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E-M:/ Filer Township - Court sides with township

Decision allows higher tax rate to stand
By PATRICK SULLIVAN Record-Eagle staff writer

MANISTEE — The Michigan Court of Appeals released a decision that could signal an end to a million-dollar tax fight that's dragged on for 13 years.

State judges sided with Filer Township and a Michigan Tax Tribunal decision that established a higher rate of taxation for Tondu Corporation's TES Filer City Station, a coal, wood and tire-burning power plant on Lake Manistee.

Tondu attorneys argued the plant is valued too high and they should be taxed at a lower rate.

The tax tribunal in 2004 put Tondu on the hook for $1.2 million in back taxes for the power plant. The judgment covered tax years 1993 through 1996 and increased the amount of taxes owed for the Filer City plant for other years.

Filer Township supervisor Jim Espvik said he needed to talk to the township attorney before he could comment on details of the decision that was released this week.

Township attorney Richard Reed of Kalamazoo said the court of appeals decision upholds the position taken by Filer Township from the start of the dispute.

"It looks like we lost," said Joe Tondu of Tondu Corporation.

Tondu said he doesn't know whether another appeal will be filed. He said he needs to discuss it with attorneys and partners.

Tondu filed suit in 1993, arguing officials used the wrong formula to tax the nearly $90 million plant.

The plant operates under a 35-year agreement that requires Consumers Power to purchase electricity at above-market prices.

The appeals court sided with the township and tax tribunal, which decided the agreement should be taken into consideration in determining a "cost less depreciation" valuation of the property. Tondu argued the agreement should not be part of the consideration.