The property includes the Chase Reservoir located off of Pratt and Chestnut Hill Roads. The land has a fair market value of approximately $3 million.
The donation is being made under the Connecticut General Statutes Public Act 00-203 "An Act Concerning The Open Space Trust Fund." Public Act 00-203 provides tax benefits for water utilities that donate or sell at bargain prices open space land, provided the land remains undeveloped and is preserved as protected open space.
Mr. Chiaraluce says the donation benefits the Company's shareholders and customers, and the residents of the State of Connecticut. He states, "We are pleased to offer this picturesque land and reservoir to the Town of Killingly for the enjoyment of all residents, while simultaneously securing tax credits and exemptions that help us to hold rates stable for our customers and benefit our shareholders."
Mr. Skocypec, echoing Mr. Chiaraluce's sentiments, adds that 365 acres of undeveloped land is a significant donation. He states, "I am absolutely elated to be able to receive such a piece of property, it will help us preserve and protect the natural beauty of Killingly for future generations."
The land being donated is no longer used for water supply purposes and does not affect the quality of any public water supply. Crystal Water Company of Danielson used the Chase Reservoir as a water supply source until the early 1980's, at that time it was taken out of service. Although the reservoir is not currently used as a source of supply, Crystal Water Company of Danielson will maintain the dam at Chase Reservoir and retain water rights for future water supply purposes.
The land will be donated over a three year period beginning in 2002 to maximize tax benefits realized as a result of the donation. Through a combination of the tax credit and tax deduction provisions allowed at the federal and state level, the Company can make the donation and still realize its financial objectives. The Company estimates the incremental net benefit on the property's donation will be nearly $2 million. The Connecticut Department of Public Utility Control recently approved the land donation on May 30, 2001.
This is the third land donation Connecticut Water Service's subsidiaries have made in accordance with Public Act 00-203 in the past year. Connecticut Water Company donated 105 acres of land to the Borough of Naugatuck in December 2000 and another 135 acres to the Town of Middlebury in January 2001.
Connecticut Water Service, Inc. is the largest, domestically-based, investor-owned water utility in Connecticut. It provides water to approximately 285,000 people in 40 towns in Connecticut and Massachusetts as well as providing water-related services under contract to municipalities and companies.
This press release may contain certain forward-looking statements regarding the Company's results of operations and financial position. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties which could cause the Company's actual results to differ materially from expected results.
Source: Business News