The Anthony Wayne and Evergreen school districts are two of many across Ohio that should recoup some of the tax revenue they feared would be gone after Canadian-based Enbridge, Inc. and Detroit-based DT Midstream tried to substantially devalue the 256-mile NEXUS pipeline they jointly own.
A final determination recently issued by Ohio Tax Commissioner Jeffrey A. McClain reset the pipeline’s value at $950 million for tax year 2019, $946 million for tax year 2020, and $935 million for tax year 2021. Mr. McClain’s decision is subject to review by county auditors over the next 60 days, and becomes effective this fall, if they don’t challenge it.
While those figures are still quite a bit less than the state’s one-time valuation of $1.4 billion, they’re better than what they would have been if the companies had succeeded in getting their pipeline’s value nearly cut in half in some parts of Ohio — a request prompted by a huge drop in natural gas prices.
“Overall, it could have been worse,” Lucas County Auditor Anita Lopez said.
Fulton County Auditor Brett Kolb agreed.
“They were able to get a decent outcome out of this,” he said. “Anything upwards was a win, I felt.”
The two auditors praised the Ohio Department of Taxation for getting an independent appraisal done, something Ms. Lopez said doesn’t happen often.
“I'm very grateful the state did not just roll over and take any number from the pipeline,” Ms. Lopez said. “The reality is we knew something was going to happen. I'm just glad the state listened to all of the counties.
The NEXUS pipeline and another one built about the same time, the Rover pipeline, were touted as big-time revenue generators for schools, townships, parks, senior centers, and other services when the projects were unveiled to Ohioans a few years ago, but neither has lived up to that so far.
Rover’s request for devaluation is still pending.
NEXUS, which traverses multiple counties across Ohio, delivers natural gas from eastern Ohio to southeast Michigan.
Records show the Anthony Wayne district, closest to the pipeline, stands to gain the most of all Lucas County entities.
It has received $5.7 million of the total $8.8 million paid to Lucas County since the 2019 tax year, but is owed $472,309.44 through the first half of tax year 2021.
The underpayment for that tax year’s second half will be based on how much the company pays as an undisputed amount when county taxes are due July 31, said Matthew H. Thal, the Lucas County Auditor’s chief tax accountant.
The pipeline company doesn’t have to pay the undisputed amounts until the settlement with the state tax commissioner becomes official this fall, but it has the option to do so. It is being credited for a $266,947.40 overpayment it made for the first half of the 2021 tax year.
Anthony Wayne also includes the site of a yet-unfinished compressor station that became as controversial as the pipeline itself because of its proximity to schools and air pollution such stations can generate.
Nearly 600 people packed the Waterville Primary Community Room in March, 2016 to oppose plans for the compressor station in Waterville Township along Moosman Drive, south of Neapolis-Waterville Road. The 680-capacity room was filling up so fast, the fire marshal told the moderator he might have to start turning some away.
But the Ohio EPA ultimately issued the permit.
Kerri L. Johnson, the Anthony Wayne district’s treasurer, became chairman of a consortium known as the Ohio School Pipeline Coalition that formed in response to the NEXUS owners’ tax-cutting effort.
She agreed with Ms. Lopez the result could have been worse.
“We thought we were getting $6 million a year. We haven't received anywhere near that, “ Ms. Johnson said. “We’ve learned over here not to count on any money until it's in our bank account.”
She also lauded the Ohio Department of Taxation for doing an appraisal.
Enbridge spokesman Adam Parker said the company “has always endeavored to pay a fair and reasonable property tax” for the pipeline.
“Throughout the process and in accordance with Ohio law, NEXUS paid the full undisputed portion of the tax bills while the valuation has been under review,” Mr. Parker said. “We are optimistic about the opportunity to implement a mutually agreeable and timely resolution that will provide additional revenue to local school districts and [more] certainty in their forecast and budgeting.”
The compressor station’s fate remains in limbo.
Mr. Parker said a Federal Energy Regulatory Commission authorization for the station expired last August. Company officials “have not sought to seek a renewal of that authorization nor have we announced plans or a timeline to construct the compressor station,” he said.
Ground facilities, such as a communications tower and an inspection tool launcher and receiver, were built on the site and placed in service in 2018, Mr. Parker said.
In Fulton County, Evergreen is the biggest NEXUS pipeline revenue recipient.
Mr. Kolb said the school district will get roughly $300,000 of the additional $1 million in tax revenue Fulton County expects to receive to settle underpayments for the 2019 and 2020 tax years.
The amount for the 2021 tax year is $1.6 million, but Enbridge has not notified the county yet how much of that it plans to pay by the July 20 deadline for uncontested amounts. Whatever balance remains is expected to be paid this fall, he said.
Enbridge has been paying taxes all along, but only what it considered uncontested amounts, Mr. Parker said.
In Fulton County, that came to $2.2 million in the first two years, Mr. Kolb said.
First Published July 8, 2022, 10:43 p.m.
