HEATH — A $10 million valuation of electric utility properties in Heath has dropped by about $3.5 million this year, according to a recent National Grid assessment revaluation, and town officials want to know why it has declined so much in one year.
Such a steep drop would cut noticeably into the town’s tax revenue.
“During the past 15 years, there has never been a drop of more than 18 percent from one year to the next,” said Finance Committee Chairman Ned Wolf. “Combined with a drop of $600,000 in the preceding year, the drop in the assessed value of electric properties in Heath has been more than 40 percent, which amounts to a loss in tax revenue of more than $89,000, or 4.5 percent of our tax levy.”
The effect of the revenue loss from utility property is equivalent to about 85 cents on the tax rate, Wolf said, at a recent Selectboard meeting.
“The only explanation we have received from National Grid is that the company has just completed a multi-year project of upgrading their properties,” Wolf continued. “That would lead us to expect the assessed value would go up instead of down.”
The town has contacted the Massachusetts Department of Revenue over this change in assessment valuation, which is also affecting other towns, including Ashfield, Colrain, Rowe and Erving, according to Assessor’s Assistant Alice Wozniak.
On Monday night, Rowe annual Town Meeting voters will decide to hire a utility assessment expert, George Sansoucy, to assess Rowe’s public utility property and, if necessary, defend his valuation. Heath and several other towns are also considering hiring Sansoucy to evaluate their utility properties. Sansoucy has 36 years of experience in public utilities assessment and has a history of defending his valuation results in court, according to meeting minutes.
The drop in utility valuations could be the result of using a “net book value” assessment method instead of a market rate valuation, Wolf said.
Net book value uses accelerated depreciation of property, which eventually goes to “zero” after so many years, while fair market value is based on what the property sells for. “If (a pole) is still there, supporting a wire, it’s worth something,” Wozniak said. “You’re not going to sell it for zero, if you were selling your company. It can’t be worth nothing if you’re selling it for something.”
A spokeswoman for state Rep. Paul Mark said town officials have contacted their legislators, who are trying to set up a meeting between the utilities and town officials.
National Grid was contacted but was unable to respond in time for this article.