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Londonderry started budget work in 2017 to limit impact of Three Mile Island closure

By Laura Hayes

laurahayes@pressandjournal.com

717-944-4628
Posted 5/15/19

Londonderry Township has been financially preparing for the closure of Three Mile Island since Exelon Generation announced it would prematurely retire TMI in September 2019 unless the state enacted …

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Londonderry started budget work in 2017 to limit impact of Three Mile Island closure

TMI Vice President Ed Callan presents Londonderry Township Fire Department a check for $40,000 on Aug. 4, 2017, during a golf outing at Sunset Golf Course.
TMI Vice President Ed Callan presents Londonderry Township Fire Department a check for $40,000 on Aug. 4, 2017, during a golf outing at Sunset Golf Course.
SPECIAL TO THE PRESS & JOURNAL BY BILL DARRAH
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Londonderry Township has been financially preparing for the closure of Three Mile Island since Exelon Generation announced it would prematurely retire TMI in September 2019 unless the state enacted reforms.

That was in 2017.

The night after the announcement, Londonderry Township Manager Steve Letavic pulled out the budget to see how the township could move forward if TMI closed without raising taxes.

In 2018, Londonderry received $110,607 in revenue from Three Mile Island, a combination of real estate and earned income taxes, money raised from TMI’s annual golf outing at Sunset Golf Course and money donated to the Lebanon VA Medical Center during the township’s annual Stars & Stripes Salute. The township’s budget for 2019 called for about $2.2 million in expenditures.

The township went down two paths — it worked with Clean Jobs for Pennsylvania to preserve the nuclear industry, but it also planned financially for the plant’s closure, Letavic said.

The parks program was reduced. Full-time staff members picked up other duties. When full-time positions opened due to attrition, the township didn’t fill them and chose to instead use part-time employees, Letavic said.

They planned to be able to meet operational demands while keeping costs down; being proactive instead of reactive, Letavic said.

“It’s not the ideal situation in those terms, but again, for us, the last resort is always a tax increase,” Letavic said. “We also don’t believe in being reactionary. We want to plan ahead.”

On Wednesday, Exelon announced that TMI will shut down by Sept. 30, absent action in the state Legislature.

“We’re saddened by the loss of the jobs, we’re saddened by the impact on the families, the friends that we’ve developed out there,” Letavic said. The workers, he added, are part of the community.

Right now, Letavic is not anticipating a rise in taxes next year, although he added that the township couldn’t control unfunded mandates from the federal or state government.

In a March letter to the editor, Lower Dauphin School District Superintendent Robert Schultz said without the tax revenue from TMI, the district “will have no choice but to raise taxes for the first time in a decade and cut programs and future investments in facilities.”

“We’re trying to avoid the situation where every taxing authority has tax increases in the same year. We’re focusing on expense management and controlled growth in the township,” Letavic said.

To Letavic, one of the next steps is adjusting the township’s internal operations and annual expenditures to absorb the revenue loss, meaning open full-time positions won’t be filled and the parks program won’t be restored until revenues improve.

In 2008, an agreement was signed by then-owner AmerGen Energy Co., Dauphin County, Londonderry, Lower Dauphin School District and the Dauphin County Board of Assessment Appeals after a dispute over the value of the TMI property and what parts may be considered non-assessable property.

Under the agreement, which expired in 2017 and was renewed for another two years, $930,000 in real estate taxes and payments in addition to taxes would be paid to the county, school district and township. The $930,000 would be divided as $637,701 to Lower Dauphin, $254,634 to the county and $37,665 to Londonderry, and it wouldn’t change regardless of property assessment or millage changes, according to the agreement.

Revenue from TMI, however, can fluctuate, particularly the earned income tax which depends on the number of employees and payroll, Letavic said.

TMI currently has 675 full-time employees and an annual payroll of $60 million, although the decommissioning plan submitted by Exelon to the Nuclear Regulatory Commission reported that the number of full-time employees will go down to 50 by the end of 2022.

According to Letavic’s figures, the amount of earned income tax that the township has received from Exelon has decreased by $6,221.49 over the past three years. In 2016, the township received $25,163.44 in earned income tax from Exelon. That figure decreased to $23,771.46 in 2017, and fell even further to $18,941.95 in 2018.

With the agreement set to expire and the number of employees at TMI to decrease, Letavic is anticipating revenue from TMI may stop coming into Londonderry by 2020.

Every summer, TMI hosts a golf tournament at Sunset Golf Course. Proceeds average $50,000 and go toward the Londonderry Volunteer Fire Company, which is used for the debt service for the Londonderry fire hall expansion. Letavic estimates that more than $600,000 has been raised for the department over the past 12 years.

The golf outing is on for this summer. Letavic said there is no commitment past this year.

Letavic is anticipating that debt service for the fire hall expansion may have to come out of the township’s general fund budget.

TMI also donates $4,000 to the Lebanon VA Medical Center, and last year, $10,331 from the Stars & Stripes Salute was donated to the hospital.

Letavic plans to head back to Harrisburg to work with legislators to draw economic vitality to the region to replace the jobs and revenue lost by TMI and continue the conversation regarding nuclear power.

“We don’t want this to be the end of the conversation. We want this to be the continuation of the conversation,” Letavic said.