By Ken de la Bastide, Kokomo Tribune enterprise editor
ken.delabastide@kokomotribune.com
Howard County officials believe a finalized deal is close with Chrysler Group LLC over unpaid personal property taxes and an appeal to lower the assessed value of the two newest transmission plants located in Kokomo.
Representatives from Chrysler were in Kokomo Wednesday to continue negotiations with Howard County on the two issues.
After the meeting, Dick Miller, president of the Howard County Council, said he believes an agreement could be finalized at one more session, a meeting that could take place within the next two weeks.
"There are a couple of points of clarification on both sides," Miller said. "Come to an agreement, sign some documents and bring this to a successful resolution."
County officials and representatives from Chrysler Group LLC have been negotiating an agreement on unpaid personal property taxes owed by Old Carco, formerly Chrysler LLC that filed for bankruptcy earlier this year.
Being discussed is $12.9 million in personal property taxes owed for 2009 and $12.3 million owed in 2010. Those taxes are distributed to Howard County, Kokomo, Kokomo-Center and Northwestern schools.
"I'm pleased with the discussions that took place," Miller said. "I believe we can wrap up all of the issues into this one package."
The company has appealed to lower the assessed value on Kokomo Transmission Plant I and II.
The two plants have an assessed valuation of $110 million, and company officials have requested the amount be lowered to $55 million.
Howard County Assessor Jamie Shepherd said the company provided all the documents needed on the appeal of the assessed valuation.
"I have everything I needed in order to look at the assessment appeal," she said.
Larry Murrell, Howard County attorney, said the negotiations are moving in the right direction and agreed the talks could be concluded with one more meeting.
"There is one other major issue on the taxes," he said, declining to discuss the remaining issue until after an agreement has been reached.
The Indiana General Assembly included in the 2010 state budget legislation a provision that would allow county taxing units to borrow the amount of unpaid taxes from the state's Rainy Day Fund. An unknown is if the state will charge the local government entities interest and what the interest rate would be.
"Both sides want to get this wrapped up," Murrell said.
"We're trying to do what's best for the company and the taxpayers," Miller said.
Chrysler's representatives have worked hard to reach a reasonable agreement with the county, Murrell said.
"There has been outstanding cooperation from the company to try and reach an agreement," Miller added. "We're really close to settling this issue once and for all."
This is the second time local taxing units have had to deal with tax issues as the result of a major employer in Howard County filing for bankruptcy protection.
Delphi Corp. filed for bankruptcy in 2005. The state allowed local taxing units to borrow money from the Rainy Day Fund at no interest, with the loans to be repaid by 2015.
The New York bankruptcy court signed an order in August requiring payment of the personal property taxes due to the county. Property assessed March 1, 2005, for $4,615,399 must be paid in full by March 1, 2011, with an interest rate to be set by the court.
The real estate taxes for 2005 in the amount of $1,881,860 will be paid over the next seven years, with an interest rate of 5 percent.
General Motors agreed to purchase the Delphi facilities in Kokomo as part of the bankruptcy agreement. GM will be responsible for paying $3,769,193 in personal and real-estate taxes due in November and $7.6 million in taxes due during 2010.