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Officials call it ‘normal’ part of process; community group, residents demand transparency

By AMANDA SCOTT

Staff writer

A non-disclosure agreement for discussions about the county’s property tax credits between the county commissioners and Dominion Cove Point recently has surfaced, causing additional friction between the county and residents on the proposed $3.8 billion liquefied natural gas export project.

On Jan. 30, the Accokeek, Mattawoman and Piscataway Creeks Communities Council released the non-disclosure agreement it obtained through a public information request.

Calvert County Attorney John Norris said Wednesday morning that the agreement, dated Aug. 21, 2012, was a mechanism the county used to ask Dominion to identify classified documents up front, “so we could be more proactive about public information requests” without revealing those documents and getting into a lawsuit.

Dominion media relations director James Norvelle said in a statement Wednesday afternoon, “A non-disclosure agreement is a normal part of negotiations involving multi-billion dollar projects. Companies and counties involved in such economic development discussions often use such agreements because they each need to share business-sensitive confidential information that cannot be shared with other businesses or counties.”

The six-page agreement states that the county “desires to participate in discussions regarding Calvert County property tax credits. During these discussions, [Dominion] may share certain proprietary information with the [county].”

In the agreement confidential information is defined as: “… any data or information that is proprietary to [DCP] and not generally known to the public, whether in tangible or intangible form, and meeting the requirements for mandatory denial of inspections pursuant to the Maryland Public Information Act … whenever and however disclosed, including, but not limited to: (i) marketing strategies, plans, financial information, or projections, operations, sales estimates, business plans and performance results relating to the past, present or future business activities of such party, its affiliates, subsidiaries and affiliated companies; (ii) plans for products or services, and customer supplier lists; (iii) any scientific or technical information, invention, design, process, procedure, formula, improvement, technology or method; (iv) any concepts, reports, data, know-how, works-in-progress, designs, development tools, specifications, computer software, source code, object code, flow charts, databases, inventions, information and trade secrets; and (v) any other information that should reasonably be recognized as confidential information of [DCP].”

With government contracts, Norris said the county is required to disclose certain information, but one of the exceptions is proprietary information.

“It’s purely just a tool to implement the PIA,” he said, adding that the county commissioners “can give all the same comments [about the project] as if the non-disclosure agreement were not in place.”

However, opponents of the project are claiming it prevented citizens from effectively participating in the process and from making informed recommendations to the commissioners.

President of the AMP Creeks Council Kelly Canavan said in a news release, “The property tax deal packed Calvert County and the Chesapeake Bay into a treasure chest and handed Dominion the key, which was confusing to citizens. Now we see why. The commissioners were working with Dominion’s best interest in mind, not the people’s. … Hiding financial information from the public so that they cannot understand a tax deal that affects them as residents of Calvert County is unethical.”

Then-Commissioners’ President Gerald W. “Jerry” Clark (R) defended the agreement Thursday morning, saying, “Any time you’re doing a project like this, of this magnitude, there is always proprietary information … you have to keep some of this stuff private so your competitors don’t have the ability to undercut you.”

Clark described the non-disclosure agreement as a “regular thing” and said it’s “not something that’s unusual in a project of this kind.”

The agreement didn’t cover any environmental issues, Clark said.

Cove Point resident Sue Allison, who has been very vocal about her safety and environmental concerns on Dominion’s project, said Thursday morning that she feels as though the non-disclosure agreement itself should have been a public document.

“I think the citizens at least had the right to know that it was in place, and we would be able look at it so we knew what we could ask the commissioners,” she said.

Allison said she would like to see Dominion “voluntarily release” the county commissioners from the agreement “so we can work directly with our commissioners … and work through our commissioners as honest brokers between Dominion and the citizens.”

To Allison and her neighbors, she said, the agreement seems “very broad” and may constrain the commissioners from discussing safety issues and “some very technical questions we want answered.”

In a statement released Thursday, the county commissioners defended the agreement, saying “In the case of the county and Dominion Cove Point, the NDA was signed because Dominion sought assurances that the county would comply with its obligation to protect specific business proprietary/financial information that, if divulged, could damage business operations. Dominion identified the information to which it claimed privilege and the County Attorney’s Office has the obligation to make the ultimate determination on what must be protected and what may be disclosed.”

In November, the commissioners unanimously approved to amend county code to permit the county to grant a property tax credit and enter into an agreement for the payment of county taxes with the owner of a facility for the liquefaction of natural gas. The commissioners subsequently approved to enter into a five-year payment in lieu of taxes and nine-year tax credit agreement with Dominion.

For each of the five years of the payment in lieu of taxes (PILOT) period, which begins July 1, 2017, Dominion is required to pay the county $15,100,000. If the plant is in service by July 1, 2018, then the PILOT period ends June 30, 2023. Depending on when the plant begins service, the PILOT period could end June 30, 2025. If the plant is not in service by June 30, 2020, then the agreement is automatically terminated.

In the first PILOT year, Dominion will pay $35,805,000; the second year, $45,100,000. The third year — when the PILOT payment peaks — Dominion will pay $48,895,000. In the fourth and fifth years, Dominion will pay $48,345,000 and $47,685,000, respectively.

As part of the PILOT agreement, if Dominion incurs cumulative expenditures equal to or greater than $500 million by Jan. 17, 2018, then Dominion will make a one-time payment of $25 million to the county before Jan. 31, 2018, but after Jan. 17, 2018.

If the property, after the export expansion is in service, is determined by the Maryland Department of Assessments and Taxation to be valued at more than $4.788 billion, then the PILOT payments for the applicable fiscal year can be adjusted by an amount equal to 55 percent of the taxes due under the then-current law on the difference between the state’s assessment and $4.788 billion.

The PILOT “removes risk of financial loss to the county on the depreciation of existing equipment,” according to staff’s presentation.

Once the PILOT period ends, July 1 of the fiscal year immediately following, a nine-year tax credit equal to 42 percent of the property tax imposed upon Dominion’s property begins. After the nine years, the assessment, levy and collection of the property tax will be made pursuant to the then-current law.

ascott@somdnews.com