Sunday, February 27, 2022

The Golden Goose, Looking the Other Way, and the Lowest Common Denominator


By: Rich Bergeron 
Inflationary taxation without representation is a good way to describe what is going on the state of New Hampshire right now. Another good name tag to put on it is trickle down wreckonomics. 

The dominoes are falling. Look at your power bill, your price at the pump, and so on. My own cable bill sported a $37 "surcharges and fees" line item this month. Our surcharges and fees are going up everywhere. Because, you know, INFLATION. 

     Inflation is just a buzz word for passing the cost of the grift on to the lowest common denominator: you. It's also a convenient way to distract us from the true reality: massive amounts of government waste and abuses of process that really cause inflation. Lawyers, politicians and tax rate riggers like George "Skip" Sansoucy are destroying this state and getting paid handsomely for their services. 

     There are no watchdogs to stop Skip. There are no checks and balances on the breadth and width of his capability to corrupt. Our representation in government is failing us miserably. 

     It doesn't matter if you are a Republican, a Democrat, or an Independent in New Hampshire. The property tax scheme highlighted in this series discriminates equally. The towns and cities engaging in it rode the wave as long as they could, purportedly to save the base taxpayer and voting class: the homeowners. Some of them are still riding the wave, because the scheme hasn't crashed everywhere. Where it crashes doesn't matter as much as how badly it damages municipalities when it does crash. 

     Utilities across the entire state where George "Skip" Sansoucy and Christopher Boldt coordinated to beat down abatement requests finally began winning huge appeals cases over the past few years. Just Google "Sansoucy, abatement, million" to find links to all the appeals cases waged and won by utility companies to prove the "expert" wrong. 

     FairPoint Communications won a $497, 914 settlement against the town of Gorham, NH last year. "Skip" Sansoucy and Chris Boldt milked that litigation for all it was worth. The settlement capped 7 years of litigation between the town and the utility company. The Berlin Sun reported at the time:

"Chairman Mike Waddell said that some 100 other communities across the state would also be adversely affected by this ruling, which applies to tax years 2011 through 2020. The settlement also erases an abatement application for the 2020 tax year."

     These failures represent a loss of more than just a half million in judgment payouts for towns like Gorham. The true cost comes from the paybacks of all the tax abatements earned by utility companies like FairPoint. Gorham is on the hook for a decade of grossly overtaxing FairPoint's assets in what the court deemed an "unconstitutional" method of double taxation. 

     Public Service of New Hampshire, d/b/a Eversource also earned a monumental win in a successful appeal effort that impacted 47 different municipalities. The "taxpayer" here (Eversource) wanted 138 abatements granted, but the BTLA appeals process decided just 91 of those specific requests were valid:

"Using its judgment and experience, the board finds a range of estimated market value within five percent of the equalized assessment is reasonable in these appeals. Therefore, the board grants the appeals where the degree of overassessment exceeds five percent – a total of 91 of the 138 appeals. For those 91 appeals, Table 2 details the abated assessments by adjusting the “Municipality Market Value Estimate” (estimated in the GES appraisals) by the level of assessment (see Table 1). The remaining 47 appeals are denied because, as shown in Table 2, there is either a difference of less than five percent in the overassessment or an underassessment."

     The difference in the details is astounding when you examine the tables at the end of this complex BTLA decision. Table 1 reports that the municipality assessments exceeded the taxpayer's expert estimates for the same properties by a whopping total of $681,543,538. Though the BTLA supports some of Sansoucy's methods of valuation, the overall decision takes aim at multiple flaws in Sansoucy's approach. His firm's methodology in terms of this particular appeal and the 91 granted abatements out of 138 requests has a 65% failure rate. 

     The municipalities all relied on two primary experts: Brian D. Fogg and George "Skip" Sansoucy. The decision describes their qualifications and efforts as follows: 

"Both are certified general appraisers and assessing supervisors employed by GES with decades of experience in valuing utility properties and are qualified experts in utility valuation. GES also served as the assessing contractor for many of the Municipalities and, in that capacity, recommended many of the assessments under appeal for adoption by the Municipalities."

      The BTLA described much of the final appeal efforts of Christopher Boldt (of course he's involved) and the other legal beagles representing the municipalities as, drumroll please: "WITHOUT MERIT." 

       They weren't so gentle when it came to George Sansoucy and his firm (GES): 

"Nonetheless, as the Taxpayer correctly points out, the GES appraisals support the granting of “assessment reductions and refunds” for many communities and many tax years. (See Taxpayer’s Initial Trial Memorandum, p. 11; and Taxpayer’s Post-Trial Memorandum, pp. 3 and 73 at fn. 16.) While it is true assessments generally have a ‘presumption of validity’ (cf. Municipalities’ Post-Trial Memorandum, p. 16), it is also true the assessors in each Municipality have an overriding obligation, reflected in the New Hampshire Constitution and statutes, to insure that each taxpayer’s property is fairly and equitably assessed on the basis of all available information." 

 "See, generally, EIP Northern Boulevard, LLC v. Town of Salem, BTLA Docket No. 27682-14, et al. (February 24, 2017 Order at p. 6, fns. 8 and 9), citing New Hampshire Constitution, Pt. II, Art. 5 (mandating governmental obligation to “impose and levy proportional and reasonable assessments . . . upon all estates”). In addition, as noted in EIP (id.): RSA 74: 1 (Annual List) and RSA 75:1 (How Appraised) establish a statutory obligation for the selectmen in each town to assess “taxable property at its market value” and to certify these values to the department of revenue administration (“DRA”). See Town of Hudson v. State Department of Revenue Administration, 118 N.H. 19, 21-22 (1978); accord, Winchester Taxpayer’s Assn. v. Board of Selectmen, 118 N.H. 144, 148 (1978). RSA 75:8 (Revised Inventory) further obligates the selectmen annually to “adjust assessments to reflect changes so that all assessments are reasonably proportional within that municipality.” (emphasis added)"

     George Sansoucy was also really called out onto the carpet in the next page of the decision, which chastised him for continuing to stand by some obviously over-inflated numbers: 

"When municipal assessors and/or assessing contractors discover property has been overassessed based on subsequent information (such as the preparation of the GES appraisals in these appeals), subject to a test of materiality and reasonableness, of course, these constitutional and statutory obligations, along with corresponding professional standards, require them to abate the assessment in question. (Cf. Taxpayer’s Post-Trial Memorandum, p. 73, fn. 16, citing several professional standards that help “ensure fair and proportional assessments” for each taxpayer.) To decline to do so is a dereliction of that governmental obligation and professional responsibility."

      Author's Translation: Some of these calculated figures were demonstrated to be flawed long before the appeals process, and "Skip" Sansoucy just whistled and held his hands over his ears when it came to evidence of him being wrong. He ignored the proven facts and stood by garbage conclusions, and Christopher Boldt backed up all of Sansoucy's bullshit with a legal strategy that had little merit in terms of the 91 granted abatements. 

      Boldt is by no means the only municipal attorney who went to bat for the bad numbers Sansoucy has been spitting out over the years. Consider the losing efforts of the town of Bow, NH, represented by Attorneys Paul Fitzgerald and Alison Ambrose in this failed appeal of abatements granted to PSNH. That appeal, decided in January of 2018, focused on Merrimack Station and other associated PSNH properties in the town of Bow. The entire decision is not all that long, as the panel of judges felt confident the trial court decision should stand. The meat of their argument is in these few snippets from the order: 

At trial, the sole issue was the determination of the proper value of this special-purpose utility property for the tax years in question. PSNH presented expert testimony from John P. Kelly of Concentric Energy Advisors regarding the value of the relevant property. The town presented expert testimony from George Sansoucy of George Sansoucy, P.E., LLC. Following a six-day bench trial, the trial court found Kelly's “testimony [to be] more credible than” Sansoucy's and, therefore, ruled that PSNH had met its burden of demonstrating that it was entitled to an abatement for tax years 2012 and 2013 with respect to the disputed property. The town moved for reconsideration, which the court denied, and this appeal followed.

On appeal, “[w]e sustain the findings and rulings of the trial court unless they are lacking in [evidentiary] support or tainted by error of law.” Tennessee Gas Pipeline Co. v. Town of Hudson, 145 N.H. 598, 600 (2000) (quotation omitted).

On appeal, the town argues that the trial court erred by ruling “in favor of PSNH relative to its expert's valuation of Merrimack Station, the combustion turbines, and the transmission and distribution network within” the town. Specifically, with respect to Merrimack Station, the town contends that the trial court erred by failing “to consider the effect of the scrubber as evidence of the substantial value of” Merrimack Station, including that PSNH “would recover its scrubber and operation expenses from ratepayers and continue to generate future cash flow.” The town also maintains that the court erred by accepting Kelly's determination that the highest and best use of Merrimack Station was as a merchant-owned plant, rather than as a regulated utility-owned plant. It further argues that the court erred by crediting Kelly's “methodologies, which significantly understated revenues and overstated expenses” for Merrimack Station, and “resulted in negative cashflows for the Plant and reduced its indicated value.” In addition, the town contends that the court erred by “misapprehend[ing] the purpose of the Plant and its benefits to ratepayers.” It maintains that the court erroneously “failed to consider the value provided to PSNH ratepayers through the Plant's ability to mitigate (or stimulate)* the high costs of electric power at peak demand periods in the context of Merrimack Station's overall value.”* Emphasis added, Author's Notes in Parentheses. 

...After considering the evidence, which included six days of testimony, voluminous exhibits, and a view of the property, the trial court issued a nineteen-page order explaining why it found Kelly's testimony to be more persuasive than Sansoucy's and thereby accepted his valuations of the disputed property. The town essentially faults the trial court because it found Kelly's valuations more credible than Sansoucy's. “Credibility, of course, is for the trial judge to determine as a matter of fact and if the findings could reasonably be made on all the evidence they must stand.” Southern N.H. Water Co. v. Town of Hudson, 139 N.H. 139, 144 (1994) (quotation omitted). We find no reason to disturb the court's assessment.

   Bow had the tough choice of accepting the payback of $8.5 million in abatement refunds or appealing a ruling from Superior Court Judge Richard McNamara from October 2016 that set the value of all Eversource property related to the plant at about $66.6 million in 2012 and $67.4 million in 2013. The town valued the plant at $159 million thanks to Sansoucy's creative methodology. There was ultimately "no reason to disturb the court's assessment" indeed. 

     This article, hosted as an exhibit on the state's Public Utilities Commission Web-site, illustrates just how much of an impact a $50 million reduction of PSNH's Bow property assessment could make on the town's entire tax base. There is no mystery here. The evidence is laid out. Towns don't mind gouging the utilities because the utilities will just pass the cost onto the ratepayers (that's you). Yet the town leaders are still out there claiming they are protecting homeowners by getting all the property tax money from the utilities. It all circles back. 

      One hand is claiming it is saving you money while the other hand is taking money out of your pockets. You keep getting that same $37 "fees and surcharges" line item I'm getting this month on my cable bill. That's $444 every year from every customer above and beyond the original bill if it keeps up. And how many fees are the other utilities charging to pay for all their successful litigation? Do the rewards these utilities reaped by discrediting Sansoucy's methods ever come back to reduce our bills at any point, or does it all go to the attorneys?

    The total cost to Bow for the 2014-2016 tax years ended up being another $10 million, according to a report in The Union Leader about the ultimate settlement of the dispute, published in July of 2019. Bow paid nearly half the judgment out of a budget surplus and promised to provide the rest as a property tax grace period of sorts, foregoing roughly $1.5 million per year in taxes until the debt to the power company reaches zero. Later, the town ended up delivering a $5,722,373 check and $1.8 million in interest (posted under "Legal Services") in 2018 to end the saga and pay for another set of years they overtaxed the plant. To put this all into perspective, it could have been worse according the the Union Leader: 

"Bow had been on the hook for up to $14 million after losing a court fight against Eversource over how much to value the Merrimack Station power plant. The $14 million represents more than the town’s $11.1 million annual budget."

     So, prior to this piece it's been a bit of a struggle to explain properly how this whole entire scheme impacts "the little guy." This article hopefully brings the issue home. As an average NH homeowner in a town in crisis due to a Sansoucy utility abatement disaster, your home assessments may be low for another year. The last few years might have been great for you in that department, too. There's a good chance your utility bills all went up this year, though. If you have a decent amount of utility property your town was counting on overcharging on their property taxes, and those utilities have all won judgments, the businesses in your town are taking the first big hits. You have to pay more at your local grocery store, the prices at your favorite restaurant go up, and even a cup of coffee costs more. 

      Sooner or later in this scenario, the tax break you got on your house is erased by the indirect ramifications of all the fuckery that went on behind the scenes to give it to you in the first place. Next year your afflicted municipality will be taking your tax break back and giving you a tax headache. The failure of your town or city leaders to game the system and get away with it will bite every taxpayer in some form or another. Many of the the victims of this scheme are already feeling the burn from the breakdown of all the greased gears that make it work. Guess who's not paying the price? The expert and the attorney who are directly responsible for your tax headache.

     The irony is that a very well-trained attorney and former judge had a seat on the Bow Budget Committee during the life of these litigation efforts against the town regarding Merrimack Station. Chuck Douglas, currently the chairman of the state's Judicial Selection Commission, even started his own blog to highlight the issues facing "The Concerned Taxpayers of Bow." He had a peculiar stance on the days before the town became saddled by all the abatement debt in one of his January, 2017 posts: 

     "Now that the goose that long laid golden eggs has become a turkey vulture there will have to be large tax increases or spending cuts to fund the check to Eversource."

     The outlook he expresses is concerning because he seems to prefer the "golden goose" to keep laying those golden eggs (which represents the valuations of PSNH facilities done by George Sansoucy's firm) while in other places he blasts Sansoucy as lacking in credibility and needing to be replaced. He also suggests firing the town's attorney. 

     Despite the front page article he wrote in his own newspaper (The Bow Times) to decimate Sansoucy's reputation, Chuck Douglas had already resigned from the Bow Budget Committee in 2017. He went off to knight new judges in Concord and left his hometown hanging. The same 2019 edition of the newspaper he blasted Sansoucy in featured a brief editorial I almost overlooked. I am very glad I didn't. Here's the full text of Chuck's rant: 

"SANSOUCY MUST GO – AND FAST This writer has long been critical of “Skip” Sansoucy being Bow’s appraisal expert in the Public Service/Eversource powerplant tax case that will be tried in June. Judge Richard McNamara three years ago ruled against Bow saying repeatedly that our expert lacked credibility. He may be Harry Judd’s guy but Skip has to go. The exposé in today’s paper should be enough to let him go and get our money back too. A key question for town counsel should be did our “expert” voluntarily disclose the Utica utility case sanctions pending against him to counsel? I seriously doubt it. It is time for the town to sue Sansoucy for a full refund of his fees and our lawyer time in the last train wreck that cost $5,800,000. The taxpayers are owed that money and the selectmen should go get it. Skip’s gravy train is now off the rails for good. Chuck Douglas For a free press, je suis Charlie"

     Sansoucy and Boldt have been repeating different versions of Bow's follies for years. "Coming to a theater near you" might be a good slogan for their combined circus act. One of Sansoucy's biggest critics is now in a seat where he can have a huge hand in selecting new judges. The future of Sansoucy and his number fudging certainly does not look bright, because you can take it from a legal expert now on good faith: you deserve a refund for the whole three-ring dog and pony show you didn't ask for.

     The editorial advice Chuck Douglas gave the citizens of his town in 2019 seems more and more relevant with each new chapter that unfolds in this series. The biggest looming question is why aren't towns and cities burnt by Sansoucy's and Boldt's schemes filing lawsuits to get their money back like the guy who picks our judges said Bow ought to do? Why didn't Bow sue for their money back? And how do Sansoucy and Boldt keep getting away with all their corruption without ever facing any real consequences of their own? 

     I think the answer is obvious. Money. Follow it, and it leads to far too many people looking the other way to keep it flowing in this state. This golden goose was always a product of pure fairy tale logic, and instead of golden eggs it's going to start spitting out shit sandwiches. Your municipal leadership is going to try to tell you they're lobster rolls. Don't believe the hype. You are the lowest common denominator, and you are bound to bear the burden for your leadership's failure to act responsibly and seek accountability. 

     Most communities have set March 1, 2022 as the deadline for abatement applications in New Hampshire municipalities. If you have a genuine dispute, raise it now. 

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