Farmington, NM - The Central Consolidated School District (CCSD) in San Juan County unanimously approved, by a vote of 5-0, the payment in lieu of taxes (PILOT) proposed by the Desert Rock Energy Project May 15, 2007. The PILOT is part of a larger tax payment proposal that includes CCSD, San Juan County and San Juan College. In April 2007, the San Juan College Board approved the agreement worked out by the county. Presently, the San Juan County Commissioners must provide the final approval of the plan.

Overall, the PILOT provides for payments exceeding $16 million to the County taxing authorities during construction of Desert Rock and payments of $151 million during 27 years of plant operations. In response to a request by the CCSD, the plan also provides an upfront payment of $8 million to fund new facilities, equipment, or services that may be required to address increased school enrollment during the construction of the project. With the plan, Desert Rock would be one of the County’s largest tax payers.

The PILOT offers many advantages to San Juan County and the taxing entities. The PILOT provides revenue certainty for the County, College, and School District since it will fix the level of annual tax payments from Desert Rock independent of the level of Navajo Nation ownership in the Desert Rock Project. Any ownership by the Navajo Nation, by law, would otherwise reduce tax payments to these entities proportional to the investment amount. The PILOT proposes up front tax payments to CCSD to address the need for new facilities, equipment, and/or services to support additional students that the Project may bring to the area. The PILOT allows the School District to obtain monies without risking potential state ordered reallocation of school taxes to other school districts and it may reduce the tax burden of those who pay property taxes. In addition, PILOT monies provide the School District a source of funding with no use limitations that that may otherwise apply to existing property tax revenues and state funding. In all, the proposed PILOT offers fairness to enable the county to deliver services during a possible influx of students when the Desert Rock Energy Project is constructed and provides for reliable tax revenue that might otherwise be reduced or redirected.

The San Juan County Commissioners will hear the proposal for the IRB's and PILOT in August and will vote to ratify the bonds.