Paper segment price and mix was lower than the second quarter of 2015, but higher than the first quarter of 2016. White paper sales volume was up slightly and pulp volume was lower compared to the second quarter of 2015, while volume for both white paper and pulp was lower than the first quarter of 2016 primarily due to scheduled annual outages at two mills. Commenting on reported results, Mark W. Kowlzan, Chairman and CEO, said, “We achieved record second quarter earnings despite lower pricing in packaging and paper products. Our corrugated products volume for the quarter set all-time records for both total shipments as well as shipments per day, and corrugated prices and mix were up compared to first quarter 2016 levels. White paper prices and mix showed positive trends towards the end of the quarter as a result of the previously announced price increases. Operationally, we had another exceptional quarter as manufacturing and freight costs across our packaging and paper mills were outstanding and we successfully completed four annual outages.”
Sappi Fine Paper Co. has agreed in principle to withdraw its tax abatement requests against the town for 2014 and 2015 in exchange for an agreed upon $64 million in reduced value for taxation beginning this coming year.
The tentative agreement is a move to save jobs at the paper mill on U.S. Route 201 and is a compromise between mill owners and the town, officials said Tuesday night.
Under the agreement, the town would lose about $1.2 million in taxes for fiscal year 2016-17, the town’s assessor’s agent Bill Van Tuinen said Tuesday night after an executive session of the Board of Assessors and the Board of Selectmen.
“All the details are not done,” Van Tuinen said, “but the concept is totally agreed to.”
S.D. Warren Co., a subsidiary of Sappi and the legal owner of the property, agrees to withdraw its pending abatements before the state Board of Property Tax Review, he said.
“Those are dismissed. Those are done away with. The town doesn’t owe any back money to S.D. Warren,” Van Tuinen said. “Going forward, the 2016 valuation is set at $380 million. That’s about a $64 million reduction from the most recent tax bill, and it will probably be less.”
In the year following, the town assessors will update the property valuation, but not to exceed $380 million in 2016-17 and 2017-18.
“I think it’s a good compromise with the situation that we’re face with,” Van Tuinen said.
Mark Hittie, director of communications at Sappi, was out of the office Tuesday night and said he could not comment on the agreement.
Donald Skillings, chairman of the Skowhegan Board of Selectmen, said the compromise means that the town will received roughly $1.2 million less in taxes for the 2016-17 tax year, which begins July 1. He said the budget will be attacked in a “three-pronged approach,” meaning the town budget, the school budget and the county tax all will have to be considered.
“Everyone has worked diligently in coming to a solution that would be acceptable to the town of Skowhegan and acceptable for Sappi,” Skillings said. “We have to remember that our neighbors recent lost 200-plus jobs, and as bad as we feel for them and as much as we want to help them, to the best of our abilities we need to limit that exposure here.”
He said town officials will work with state, county, school and local officials in meetings to come to find ways to increase funding, especially promised funding for education.
Skillings said the deal is a mutual understanding that is reasonable to enable Sappi to operate and enable the town to continue operating. He said the town already gave Sappi a reduction in valuation of about $100,000 in September 2014.
The previous reduction in the mill’s value, from $567 million to $463 million, approved by assessors in 2014, cut its tax bill to $7.94 million, or about 48 percent of the town’s total property tax revenue.
more at: https://www.centralmaine.com/2016/03/22/skowhegan-sappi-agree-on-assessment-for-taxation-on-paper-mill/