Auditor, schools muscling up for fight over NEXUS money

ELYRIA — Talk of appeals and lawsuits over the NEXUS pipeline's tax bills are in the wind. Its owners, DT Midstream and Enbridge, have struck a deal to pay just 58 percent of their property tax valuation for the 256-mile natural gas transmission line that crosses 13 Ohio counties. That would short the schools, townships, villages and libraries along its path by an estimated $600 million over the next 30 years, according to Lorain County Auditor Craig Snodgrass. Snodgrass has spent the last few weeks talking to affected parties such as the Oberlin City Schools, Firelands Schools and Midview Schools about an appeal. Under Ohio law, only county auditors can appeal the deal Ohio Tax Commissioner Jeffrey McClain struck with the pipeline's owners. Snodgrass has until Sept. 3 to do so. Talking Thursday morning to the Lorain County commissioners, he stopped just short of declaring war. "I think this is worth fighting," Snodgrass said. "Let's try to be reasonable here. You (NEXUS) made representations. You said you were going to do something." The natural gas transmission line was supposed to generate $34 million for government entities in Lorain County in its first five years of operation. Taking the state deal as-is would mean walking away from about $7 million in taxes for the first five years alone, Snodgrass said. The potential loss didn't sit well with Matt Lundy, the lone Democratic county commissioner, who blasted NEXUS' owners. "They came into this very room and made all kinds of promises," he said. "I've always been a big believer that if you say something you should stand by it. We know what we heard. We know what we were told." If companies don't pay their share of taxes, residents end up carrying the weight, he said. Snodgrass agreed: "Nobody likes to pay taxes. But it's about paying for your fair share," he said. "And the problem is when somebody's not paying, somebody else is. Unfortunately, it always seems to come down to the homeowner. They're the ones who are continually getting soaked on a lot of things." Republican Commissioners Michelle Hung and David Moore did not comment during the discussion. Auditors from the 13 counties along the pipeline were supposed to discuss the issue earlier in the week with McClain via conference call. Snodgrass said that on the advice of the Ohio attorney general's office, the state tax commissioner did not show, fearing potential litigation. That left Snodgrass and others without answers to some of their biggest questions — he told commissioners there has been a lack of transparency from the state about negotiations with DT Midstream and Enbridge, and McClain has refused to hand over a tax appraisal that allegedly puts the pipeline's valuation at $1.2 billion. The situation has other county auditors considering a fight, said Snodgrass, who has already started talks with the Lorain County Prosecutor's Office and has another meeting set for Monday. "I think they're starting to see things a little more my way, that this might not be the best deal," he said. Local school districts seem to be tipping the same way, even though appealing the process could drag out the final verdict by years. Lorain County Joint Vocational School Treasurer Cory Thompson told the vocational school board Thursday night that taking the deal would mean sacrificing about $111,000 per year in tax revenue that had been promised before construction of the pipeline began. "Schools like Firelands are being hurt the most in this situation," he said, looking to Firelands representative Dwayne Becker, who nodded in agreement. Thompson asked board members who represent districts on the pipeline's path whether they would support the county's appeal and received a resounding yes. "Our school district is all for appealing it," said Kathy Quintiliano of Midview. Thompson said districts can't lose any more money by appealing. If the effort were to fail, they would revert to the state settlement amount. But allowing the NEXUS deal to stand may have further negative effects, he said — it could embolden other companies to negotiate for lower tax rates. Attorneys from various school districts have also been weighing a separate lawsuit, Thompson said, though he had little other information. Snodgrass said that if the tax commissioner's office doesn't start sharing more information, he will push for payments in the full promised amount for the first five years of the pipeline's operation. After that, he is willing to compromise for a lower amount for the next 25 years. "I think I have a reasonable compromise to offer the tax commissioner," he said. "We'll be penning a letter to them shortly." Contact Jason Hawk at (440) 329-7122 or news@lcnewspapers.com.