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New LIPA board member says he'll work to curb tax lawsuits

New LIPA board appointee Ali Mohammed of Woodbury

New LIPA board appointee Ali Mohammed of Woodbury would end LIPA's tax lawsuits against school districts and municipalities, including challenges over assessments on power plants. Credit: Newsday/John Paraskevas

ALBANY — A Wall Street executive appointed Monday to the Long Island Power Authority board of trustees said he would work to end tax lawsuits by the authority against school districts and municipalities.

LIPA has  sought lower tax assessments on four National Grid-owned power stations across Long Island, challenging hundreds of millions in tax payments it has made for the past decade. It has also begun challenging tax payments on other properties, such as substations.

Local governments and taxpayers in those districts have said the challenges could damage their communities, hiking tax bills or forcing budget cuts in school districts.

Brookhaven Town has settled a challenge over the Port Jefferson power plant. But Huntington Town has rejected a LIPA offer to reduce the Northport power plant's $84 million in annual taxes by 50 percent over nine years. The case returns to state Supreme Court later this month. 

“One of my first priorities as a LIPA trustee will be to end LIPA's practice of reckless tax certiorari lawsuits against communities and school districts,” said Ali Mohammed of Woodbury, who was appointed to the LIPA board by the State Senate.

“LIPA must immediately cease all litigation …," he said. "The time has come and gone for LIPA to behave as a responsible corporate neighbor and I look forward to  [bringing] an unequivocally ethical and honest voice to the board.”

A spokesman for LIPA declined to comment. 

Mohammed works for J.P. Morgan and has worked for Goldman Sachs and Solomon Brothers. He has a bachelor’s degree in electronics and communications engineering from Osmania University in India.

The LIPA board is composed of nine Long Island residents who adopt an annual budget, monitor staff and polices and oversee contracts. The positions are unpaid.

“I am proud to appoint Ali Mohammed to the Long Island Power Authority board,” said Senate Majority Leader Andrea Stewart-Cousins (D-Yonkers).

“Mr. Mohammed’s expertise in transforming organizations will help usher in a new ‘green era’ for LIPA, while at the same time fighting to support ratepayers,” Stewart-Cousins said.

The State Legislature created LIPA in 1986 to lower utility rates on Long Island. Since 2013, LIPA has contracted with PSEG Long Island to operate the LIPA electric system.

Five of LIPA's nine trustees are appointees of Gov. Andrew M. Cuomo, and none of the other eight members has expressed outright opposition to the LIPA tax challenges. Most have been vocal supporters of the policy, which promises to put tens to hundreds of millions of dollars back in LIPA's coffers. 

LIPA chief executive Tom Falcone, a former Morgan Stanley investment banker, has been an outspoken proponent of the tax challenges.

Falcone said the Northport power plant has among the highest taxes of any commercial property in the country.

But many local officials and residents call the plant a vital facility that's worth its $3.4 billion assessed value.

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