Firm lets Rio Blanco keep cash improperly assessed
Conservation districts in Rio Blanco County are welcoming financial gestures including a $135,000 concession from the energy company Enterprise Products Partners L.P. and a $125,000 contribution from the county as they continue to work through a tax-revenue crisis.
“We have received a tremendous amount of support from everybody,” said Callie Hendrickson, executive director of the White River and Douglas Creek conservation districts.
The districts learned from Rio Blanco County Assessor Renae Neilson last year that they long had been mistakenly receiving personal property tax revenues. It turns out conservation districts are eligible for tax revenues from real property but not personal property under state law.
That revelation has long-term financial implications for the districts because it means a big drop in mill levy revenues. But it also held the potential to have devastating immediate impacts because entities that paid taxes they didn’t owe collectively had the right to seek reimbursements totaling about $338,000, or most of the districts’ reserves.
While the tax collection error occurred for decades in the county, state law limits how far back taxpayers can seek the reimbursements, known as abatements. In this case, the limit was for taxes paid beginning in 2014.
But while anyone wanting an abatement for 2014 taxes had to request it by Jan. 1, Hendrickson said that to her knowledge, no one had done so.
“We’ve been very appreciative of that,” she said.
Most of the big taxpayers are energy companies, and several of them volunteered last year after the tax error’s discovery to forgo seeking abatements. Among them was Williams, which operates pipeline and gas processing facilities and agreed to pass up on asking for $60,000 that it had unnecessarily paid.
Enterprise, which also has gas processing and pipelines infrastructure in the county, more recently promised to do the same. The $135,000 it decided against requesting from the soil districts is the largest amount that any single taxpayer was entitled to have asked from the districts as a result of the error.
In the case of companies like Williams and Enterprise, personal property includes things such as pipelines, and machinery and equipment in gas processing buildings.
The conservation districts still can collect taxes on the values of land, buildings, and the value of gas production. Revenues from production have fallen, however, as production levels and natural gas prices have declined.
Hendrickson said the county also agreed to contribute $125,000 to help address the districts’ basic needs. The districts also cut their budgets by 20 percent to 25 percent.
Hendrickson called the $135,000 concession by Enterprise “huge,” and said being able to hold onto reserves and not have to reimburse taxpayers has helped give the districts a cushion as they work to get their feet back under themselves financially.
“Without that and the county we would be dead in the water today,” she said.
Neil Brennan, president of the White River district, said in a prepared statement, “When Enterprise committed to forgo the abatement, it was a welcome and greatly appreciated recognition of their support for the conservation and wise use of natural resources and our community.”
While the two districts formed as soil conservation districts, their mission has expanded to things such as promoting wise use of natural resources and addressing rangeland health, wildlife, water and other issues.
“We’re just glad that we were able to help out,” said Steve Pudlewski, director of operations for Enterprise’s natural gas assets in Colorado and Wyoming.
He said it was his understanding that the double whammy of reduced revenues going forward and having to pay tax abatements out of reserves would have been detrimental to the work the districts do.
“We’re members of the community too, me and my folks. We all live and work here and the company, Enterprise, has got a big presence here. We’re all interested in conservation. Land conservation is a big issue with us and we take our responsibility there seriously. We didn’t want to see the land districts suffer and we had an opportunity to let them forgo our abatement and decided it was the right thing to do,” he said.
David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, said the large contribution “speaks volumes to the quality of Enterprise as a company and the character of their people who live and work in western Colorado.”
Neilson discovered the error in tax collections last year. She said at the time that it dates back to the formation of the districts in the 1980s and she didn’t question when she took office in 1991 whether soil districts could collect personal property taxes.
Since learning of the situation in the county, the state Division of Property Taxation has revised some of its class materials to help clarify for employees in assessor offices the kinds of taxation that are permitted for certain kinds of special districts under state law.
Despite the reprieve from major taxpayers and the help of the county, the soil districts continue to face a big challenge in terms of funding going forward. Losing the personal property tax revenue source meant that their combined mill levy revenues fell to about $38,000 this year, from $223,000 last year.
Hendrickson said the district will continue to work with the county, and with partners at the local, state and national levels, to explore options, which could include things like memberships, sponsorships and grants. Even if the taxpayers agreed to raise the districts’ mill levies to their highest allowable amounts — something Hendrickson called “a big if” — it wouldn’t result in enough revenues to sustain the districts, she said.
“We are going to spend 2017 really taking a hard look at what all of our options are,” Hendrickson said.
She said the districts hope in the next 18 months or so to “have a strong path forward.” Meanwhile, they are highly appreciative for the breathing room provided to them through the actions of entities including Enterprise, the county and Williams.