Stipulation and order for consolidation & stay

KpwluNrr Couxrv

Crncum Counr

Srerp op WrscoNsrN DonarNtoN ENrncy KBwauNBE, INC.,

PLAnqrrrr,

CassNo. 15-CY-71

V,

TowN on C.LRlroN,

FILED FtB 01

DBpsNoaNr.

DON,ITNION ETVBRCY KTWAUTVSE, INC.,

PL.q,INrrpp,

.v.

Cesp

No. l6-CV-60

Towtt or CaRlroN, DppeNpeNr.

Srpuu,noN ANo OnnBn Fon ConsoLrDATroN ANo Srav Or PnocpEDINGS

Plaintiff

DoNTTNIIoN

ENsncy KswluNen, INc. (DEK) and Defendant TowN or CaRr-roN

(Tgwn) (collectively, Parties), by their undersigned counsel, jointly submit this Stipulation and proposed Order to (1) advise the Court that the dispute between them in the two cases identified

above has been resolved through a binding Settlement Agreement; (2) obtain a stay

of all

proceedings in both cases to afford the Parties time to finalize issues arising from the Settlement

Agreement involving other taxing jurisdictions; and (3) consolidate the two cases so a single order disposing of both cases can be entered by one branch of this Court.

SrrpulauoN DEK and.the Town jointly represent to the Court

as

follows:

2017

1.

The two actions identified above are excessive assessment actions brought under

Wts. Srer. *74.31 for tax years 2015 and 2016, respectively,

in which DEK

seeks a

determination of the correct assessment of the real and personal property it owns in the Town which comprises the former Kewaunee Power Station.

2. set forth

The Parties have resolved their dispute for both tax years in issue. That resolution is

in a binding Settlement Agreement approved by the Town Board on January 14,2017

and executed by both DEK and the Town, and which is attached as an Exhibit to this Stipulation.

3.

Because of the financial impact of the Parties' settlement on the Town as well as on

the other taxing jurisdictions for which the Town collects taxes, including Kewaunee County, the Kewaunee School District, Northeast Wisconsin Technical College and the State of Wisconsin, the Parties have agreed in the Settlement Agreement to implement the refund requirement of the Settlement Agreement in such a way as to minimize the impact of the refund requirement on

those jurisdictions. Because

of the complexities of the statutory

refund and chargeback

procedures, as well as the number of governmental entities involved, the Parties need additional time to frame a proposed final order to present to the Court which will addresses these issues.

4.

Because

believe that it

of the anticipated complexity of that

proposed final order, the Parties

will be most efficient for this Court if only one branch of this Court is required to

review that proposed final order.

WtmRBroRE, the Parties jointly request the following:

a.

A stay of all proceedings in both cases for 60 days, to

and present a proposed

enable the Parties to frame

final order in consultation with the other taxing jurisdictions;

b.

Removal of the February 7,2A11 hearing date and I'cbruary 28 through March 6,

2017 trial dates fiom the Courr's calendar in No. 15-CV-77; and

c,

Consolidation cf the twcl actions and transfer of No. 16-CV-60 to Branch

f)oor County Circuit Court.

Dated tni, tduyof January, 2017.

Rrsprr:rru ILY

SU

BM ITTED,

Mrcnnnl Bpsr & FninnnrcH LLP

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Wisconsin Bar No. 1015945 100 East Wisconsin Avenue, Suite 3300 Milwaukee, WI 53202-4108 Telephone: (41 4) 27 I -6560 rl

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Jonoer,r J. Htuapalt

Wisconsin Bar No. 1026993 One South Pinckney Street, Suite 700

P.O. Box 1806 Madison, WI 53701-1806

Telephone: (608) 257-3501 ij hemaidan

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By:

eNNHr.J. B}r Wisconsin Bar No. 1019428 234 South Main Street P.O. Box 309 Jefferson, WI53549

(970) 674-6220 ben@biblaw.net

I of

ORDER Upon consideration of the foregoing Stipulation and for good cause shown it is hereby, ORDERED that the two actions identified above are consolidated and that Case No. 16CV-60 is transferred to Branch I of Door County Circuit Court; and it is further,

ORDERED that the hearing scheduled in Case No. 15-CV-17 for February 7,2417 and

the trial scheduled

in Case No.

l5-CY-71 for February 28 through March

6, 20Il

we

CANCELED; and it is further ORDERED that all proceedings in both actions are stayed for 60 days from the date of this Order to permit the parties to draft a proposed Final Order to

nt to this Court.

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Dated:

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THIS Settlement Agreement ("Agreement") is madc on the F.fl'ective Date by and between the l'own of Carlton ("T'own") and Dominron linergy Kewaunee, Inc. ("DEK") (collectively, the "Parties"). 'lhe Et'fective Date shall be that date on which the Parties have ftrlly executed this Agreement,

R[,CITALS A.

DEK is the owner of certain land and improvements in the Town collectively known as the Kewaunee Power Station ("KPS"), KPS comprises five tax parcels in the Town identified on'l'he Town's records as Tax Parcels 3l-004-25,CLz,31-004' 25,GL3, 3 I -004-25.GL4, 31-004-36.GL I and 3 l -004-36.GL2 ("KPS Parcels").

B,

All personal property that DLIK owns in the Town is assessed by the Town in a personal property account identified on the 'l'own's records as Account No. 3l -004PP-24 (lbrmerly Account No.0017).

C.

'l'he KPS Parcels, along with all personal property that DEK owns in the Town, arc collectively re{'erred to hereinafter as the "KPS Property".

D,

For 2015, the Town's aggregate assessment of the KPS Properry was $457,398,600 ("2015 Assessment"). DEK is challenging the 2015 Assessment in an action brought under Wts. Srer. $74.37 in Kewaunee County Circuit Court, styled Dominion Energt Kewounee, lnc. v. 1'own of Carlton, Case No. l5-CV-77 (the

"2015 Litigation").

E.

For 2016, the Town's aggregate assessment of the KPS Property was $468,970,500 ("2016 Assessment"). DEK is challenging the 2016 Assessment in an action brought under WIS. Srar. $74.37 in Kewaunee County Circuit Court, styled Dominion Energ,t Kewaunee, Inc, v, Town of Carlton, Case No. l6-CV-60 (the

"2016 Litigation"), F.

Property tax paid (or to be paid) by DEK for 201 5 and 2016 on the KPS Property will be) distributed according to law among the 'l'own, Kewaunee County, Kewaunee School District, Northeast Wisconsin Technical College and the State o{' Wisconsin (collectively, other than the Town, the "Other Taxing Jurisdictions"), was (or

G.

F'or tax year 201 5, DEK paid property taxes on the 201 5 Assessment at the Tbwn's net rate of $ I 3,35 8034 per $ I ,000 of assessed value ("201 5 Tax Rate") in the total amounl of $6,109,719.45 ("2015 DEK'l'ax"), Of this amount, $240,051.31 was

distributed to or maintained by the Town ("2015 Tr:wn Portion") and the remainder was distributed to or maintained by the Other'l"axing Jurisdictions.

H.

F'or tax year 2016, the Town has issuecl tax bills to DEK on the 2016 Assessment at the Town's net rate of $13.216840 per $1,000 of assessed value ("2016 Tax Rate") in the aggregate amount of $6,197,303.59 ( "2016 DEK 'Iax"). When paid,

I

EXHIBIT

$240,094.i4 of this amount will be distributed lr: *r malntained by the Town ("2016 Town Portion") and the remainder will be distributed tr: or maintained by the Other Taxing .lurisdictions.

I.

The Town and DEK desire by this Agreement to resolve the 2015 Litigation and 2016 Litigation, and to otherwise address future proper'ty tax issues pertaining to the KPS Property.

AGREEMENT

ln consideration of the foregoing recitals, the mutual promises and agreements hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

l.

OEK Pavment of 2016 DBK Tax: DEK shall pay the 2016 DEK Tax in two installments as provided by law in January 2017 and July 2017.

2.

Revision of 2015 and 2016 Assess.ments: For tax years 2015 and 2016, the aggregate assessment of the KPS Properfy is, by operation of the Town's approval of the execution of this Agreement. revised to Fifteen Million Dollars ($15,000.000).

3.

DEK Entitlgment_.tgRefun4: As a result of revision of the 2015 and 2016 DEK is entitled under Wis. Stat. E 74.37 to (i) a refund of 2015 DEK Tax in the total amount of $5,909,356 ("2015 Overpayment"), and; (ii) a refund or credit of 2016 DEK Tax in the amount of

Assessments set forth in paragraph 2,

$5,999,05

I (*2016

Overpayment").

4.

No Refund of Town Portion: Nofwithstanding paragraphs 2 and3, the Town shall have no obligation to refund to DEK that part of the 2015 Overpayment that constitutes the 2015 Town Portion, or that palt of the 2016 Overpayment that constitutes the 2016 Town Portion, and DEK waives any claim to such refunds.

5.

Recovery of Overqavments froq Otlre,r HpIi*n ,rlufisdictions: Subject to paragraph 4, the 2015 Overpayment and 2016 Overpayment (collectively, the Overpayments") shall be refunded to DEK under Wls. Srar. $74.37, subject to the Townos right to proceed under Wts. Srnr. $74,41 , To minimize the impact to the Other Taxing Jurisdictions and the Town, and to the extent permitted by law, DEK will work in good faith with the Town and the Other Taxing Jurisdictions to facilitate the chargeback process under Wls. Srer. 574.41 such that the Overpayments may be refunded to DEK over an extended period not to exceed ten (10) years. The Parties will cooperate in the filing of any necessary documents to obtain court approval of such extended chargebacks. In addition, DEK will cooperate with the Town to the fullest extent possible to mitigate the need for the Town to incur interest and other costs in implementing the chargeback process.

6.

7.

DEK Waiver of Challenge to Future Assessments: For each of the tax years 2017 through 2024 (the "settlement Period"), if the aggregate assessment of the KPS Property as defined in Recital C above is equal to or less than $15,000,000, DEK will not challenge the assessment of any of the KPS Properfy. each year in the Settlernent Period, if the aggregate assessment of the KPS Properfy as defined in Recital C above is equai to or less than $15,000,000, then, in addition to any property taxes DEK pays to the Town for that year, DEK shall pay the Town an amount equai to $250,000 ("Supplemental Payment"), intended to mitigate the fiscal stress to the Town that may be occasioned by the cessation of the Public Utilify Distribution to the Town under Wts. Srar. $79.04 resulting from the shutdown of KPS. The Supplemental Payment for each year of the Settlement Period will be made in two equal

DEK Sunolemental Payment to Town: For

installments, on or before the respective dates on which the first and second installments of property tax for that year are due. DEK shall continue to pay the Supplemental Payment as set forth in this paragraph 7 even if the Town begins once again to receive a Public Utility Diskibution under Wts. SIAT. $79.04 resulting from the operation of a commercial power generation facility on KPS Propertry.

8.

: Ljryitq.Sg-Eu-uplement* Pqvryenl aqd DEE Wat.v$r of qu&re Cha Notwithstanding paragraph 7, if for any year in the Settlement Period the aggregate assessment of the KPS Properry as defined in Recital C above is greater than $15,000,000, DEK's obligation to make any further Supplemental Payments to the Town will immediately and permanently cease, i.e., DEK will not be required to

make a Supplemental Payment to the Town for that year or for any later year during

the Settlement Period. Notwithstanding paragraph 6, if for any year in the Settlement Period the aggregate assessment of the KPS Propefty as defined in Recital C above is greater than $15,000,000, then DEK may challenge the assessment of any portion of the KPS Property for that year and for any later year in

the Settlement Period.

9.

[gg:

Throughout the Settlement Period, the Town shall not (a) enact or implement

Town

will immediately

any fee that is applicabte solely to DEK or its contractors or subcontractors; (b) enact or implement any fee that is applicable to DEK or its contractors or subcontractors solely by virtue of the nature or use of DEK's property; or(c) enact or implement any fee applicable to DEK or its contractors or subcontractors that does not bear a reasonable relationship to the service for which the fee is imposed within the meaning of Wts. Srar. $66.0208. If the Town en&cts or implements any such fee, DEK's obligation to make any further Supplemental Payments to the

10.

and permanently cease.

Future Assessments: The Town shall not assess as taxabie property any additions to or improvements to the KPS Property that are added for the purpose of accomplishing the decommissioning of KPS. Conversely, the Town may assess as taxable property any additions to or improvements to the KPS Prope*y that are not added for the purpose of accomplishing the decommissioning of KPS, and any amounts that are assessed with respect to such additions or improvements shall not

be considered in determining whether the aggregate assessment of the KPS Property exceeds $15,000,000 during the Settlement Period.

of Pa,{cel EquadariE$ and PropeJ"tv Accounts: Throughout the Settlement Period. the Town shall not alter the boundaries of any of the KPS Parcels, or move any of KPS' personal property in the Town into a different account, if such action has the effect of altering the definition of KPS Property in Recital C, or changing the aggregate assessment of the KPS Property, So long as the aggregate assessment of KPS Properry remains at or below $15,000,000, DEK waives any right during the Settlement Period to claim that a sale, donation or other disposition of any portion of the KPS Property serves to reduce the aggregate assessment of KPS Property.

11.

lV1ai.n*q+_ance

12.

Stav and Pismissal of Litiqation: Within 10 days of the Effective Date, the Parties shall prepare and file a joint stipulation attaching this Agreement and seeking an indefinite stay of all proceedings in the 2015 and 2016 Litigation in order to facilitate the discussions contemplated in paragraph 5. Upon refund of the Overpayments to DEK, or the courl's entry of a supplemental order facilitating a refund over an extended period as provided in paragraph 5, the Parties shall jointly file a stipulation for dismissa[, with prejudice, of the 2015 and 2016 Litigation.

13.

Confidentialitv: All information produced in discovery in the 2015 Litigation, including deposition testimony, is currently subject to that certain September 21, 2016 Stipulated Protective Order (the "Protective Order') between the Parties.

From and after the Effective Date, each Party and its expert witnesses shall turn over to its counsel of record all written or elecffonic Confidential Information (as such term is defined in the Protective Order) that it obtained during the course of the 2015 Litigation. Counsel for each party shall be permitted to retain one copy of all such Confidential Information in a file to be maintained by the Party's counsel.

Future disclosures of Confidential Information shall be limited to those disclosures compelled by law. ln the event a Third Party seeks to compel the Town's disclosure of Confidential Information pursuant to WIS, Srar. ch. 19 (the "Wisconsin Public Records Law"), the Town shall provide a minimum of 7 calendar days' notice to DEK to give DEK an opportunity to obtain protection from disclosure of information under lawful exemptions or exceptions to the disclosure requirements of the Wisconsin Public Records Law. The Parties acknowledge that Confidential Information includes non-documentary information obtained visually and orally, including information obtained during site visits to KPS and from discussions between the Parties ('Unwritten Confidential Information"). The Parties shall advise their respective experts, representatives and potential witnesses who signed Exhibit A of the Protective Order that they remain subject to the obligations of the Protective Order on and after the Effective Date with respect to all Unwritten Confi dential Information.

14.

AJgidangp" of,.Cqnflict of Interest: The Parties acknowledge and agree that to avoid a conflict of interest or the appearance of impropriety, the Town of Carlton .Clerlq Ms. Linda Sinkula, shall abstain from all participation in discussions of

mafters addressed in this Agreement or in the 20i5 and 2016 l-itigation when acting in her raie as a member and vice chairperscn of the of the Board of Supervisors of Kewaunee Counfy, and shall recuse herself from any Eloard or Board Committee or $ubcornmittree vote relating to the matters aeielresseei in this Agreement or relating io the 201 5 and 2016 Litigation.

15.

Blnding Aerecment -.Town: The Town hereby represents and warrants to DEK that the execution and delivery of this Agreement, the performance of Town's obligations hereunder and thereunder and the consummation by Town of the agreements and obligations contemplated hereby have been duly authorized by all requisite Town Board action. This Agreement has been duly executed and delivered and the Agreement constitutes a iegal, valid and biqding obligation of the Town enforceable against the Town in accordance with its terms. The execution, delivery and performance by the Town of this Agreement, and the transactions contemplated hereby, do not and will not conflict with or result in a violation or breach of any provision of any of Town's requirements of law.

16.

- DEK: DEK hereby represents and warrants to the Town that the person executing this Agreement on its behalf has the full and complete right, power, and authority to enter into this Agreement and to agree to the terms, provisions, and conditions set forth in this Agreement and that all legal actions needed to authorize the execution, delivery, and performance of this Agreement Bindine Agreement

have been taken.

17.

Terry and Tetfnination: This Agreement shall be in full force and effect ilom and after the Effective Date and shall remain in full force and effect until the Parties have f.rlly discharged their obligations under this Agreement.

18.

Severabilitv: The Parties agree that it is their collective intent for this Agreement to be construed as a valid and enforceable contract and that all ofthe provisions of this Agreement be treated collectively as an individual whole. If.any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of the Parties under this Agreement will not be materially and adversely affected thereby, then such provision shall be severed from this Agreement, and this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof. The remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreernent. Upon such determination that any provision is illegal, invalid or unenforceable and not severable from this Agreement, the Parties shall negotiate in good faith to modiff this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the purposes of this Agreement are fulfilled to the fullest extent possible.

19.

Enforcement of Asreement: The Parties may enforce or compel the performance mandamus, or any other proceeding, including without limitation specific performance. In the event of a

of this Agreement, in law or in equity, by suit, action,

judicial proceeding brought by one Party against another Party, each Party in the judicial proceeding shall pay all of its own costs and expenses, including attorneys' fees, incurred in connection with the judicial proceeding.

2A.

Defense pf Third Partv Claims: in the event a person or persons other than a Parry (a "Third Parry') initiates a claim or cause of action against Town or DEK challenging the validity or enforceability of this Agreement then: (1) if either "I'own or DEK is not included by the Third Parfy as a party to such claim or cause of action, Town or DEK, as the case may be, shall take all steps necessary to join or intervene into such claim or cause ofaction as a co-defendant; (2) the Parties shall cooperate in good faith in the defense of the claim or cause of action; (3) DEK shall be primarily responsible for, and shall lead, the defense of the claim or cause of action; and (4) each Party shall pay its own costs and expenses, including attomeys' fees, incurred in connection with such defense.

21. Rights Cumulative: Unless expressly provided to the contrary in this Agreement, each and every one of the rights, remedies, and benefits provided by this Agreement shall be cumulative and shall not be exclusive of any other such rights, remedies, and benefits allowed by law.

22"

Assisnment: DEK may assign this Agreement to any curre-nt or future owner of KPS or any poltion of the KPS Properfy upon thi6y (30) days advance written notice to the Town. Upon any assignment, it shail be required that any assignee execute a written assumption agreement indicating that it has formally accepted the terms of this Agreement.

23. Successors:

This Agreement shall be binding on the Parties' successors

and

permitted assigns, 24.

No Waivpr: The Parties shall be under no obligation to exercise any of the rights respectively granted to them in this Agreement. The failure of any Parfy to exercise at any time any such right shall not be deemed or construed to be a waiver thereof nor shall such failure void or affect that Parly's right to enforce such right or any other right.

25. Choice of Law: This Agreement shall be governed by, and enforced in accordance with the internal laws, but not the conflicts of laws rules, of the State of Wisconsin.

26. Entire Asreement: This Agreement constitutes the entire agreement between the Parties, superseding any and all prior agreements and negotiations between the Parties, whether written or oral, relating to the subject matter of this Agrcement.

27.

Constfgetion: This Agreement shall be construed without regard to the identity of the Party who drafted the various provisions of this Agreement. Each provision of this Agreement shall be construed as though all Parties to this Agreement participated equally in the drafting of this Agreement. Any rule or construction that a document is to be construed against the drafting parly shall not be applicable to this Agreement.

28.

Incornoration of Rceitals and Exhibitq: The Recitals and Exhibits attached tc) this Agreemeflt are) by this reference, incorporated in and made a part of this Agreement. In the event of a conflict between an exhibit to this Agreement and the text of this Agreement the lafier shall control.

?o

Amgndpeqt: No

30.

Third Partv Beneficiam: No claim as a Third Party beneficiary under

3r.

Countsrparts: This Agreement may he executed in counterparts, each of which shall constitute an original document and together shall constitute the same

amendment or modification to this Agreement shall be effective unless and until it is reduced to writing and approved and executed by the Parties in accordance with all applicable statutory procedures,

this Agreement by any person, firm, or corporation shall be made, or be valid, against the Town or DEK.

instrument.

[Signatures on next page]

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IN WIINESS IVHEBEOF, the Parties have hereuhto

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above wriuem. al tagTl^--*rt\ (':Town') TOWN OF CARLTON

David Hardtke Town Boq$d Chairman

Town Clerk

DOMINION ENERGY KEY/AUNEE, rNC. ('DEK*)

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