Study: Salt River Project undervalued

Underassessment could be costing Moffat County tax districts $695,000

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A company at Craig Station Power Plant is undervalued by more than $10 million, according to a study commissioned by the Moffat County commissioners.

A desktop study conducted by E3 Consulting, a national firm that specializes in assessments of power plants, concluded the Colorado Division of Property Taxation is "grossly undervaluing" Salt River Project, and costing Moffat County tax districts as much as $695,146 in lost revenue.

Salt River Project's valuation has been steadily declining since 1995, a trend the commissioners say has contributed to the county's current budget woes.

Based on E3's study, the commissioners plan to move forward with a protest of the company's valuation. But they have not yet made a formal decision to do so.

"I think this is the first positive move to really gain momentum on this," Commissioner Marianna Raftopoulos said.

E3 reported that the Division of Property Taxation uses low capitalization rates to compute Salt River's value.

E3 will charge $53,600 to represent the county at a hearing before the Colorado Board of Assessment Appeals. The commissioners plan to look into grant funding from the state Department of Local Affairs to pay for the appeals representation. DOLA gave the county a $20,000 grant to pay for E3's desktop study.

Moffat County Assessor Suzanne Brinks said the county would take the appeals case to the state Supreme Court if necessary.

"I think this is pertinent, because this is going to be an important case. It's not going to stop at the BAA," Brinks said.

But if the county fails in its appeal, it could be liable for Salt River's legal and expert fees. County attorney Kathleen Taylor estimated those costs could double E3's charges. That means the county could risk $150,000 on the appeal.

The commissioners think the risk is worth taking. No one in the county has the expertise to represent the case at an appeal hearing, and the county can't train anyone to do so, Raftopoulos said. If the county is going to challenge E3's valuation, it must contract expert help.

If the county wins, Taylor said it would have implications across the state. Rural electric companies and Colorado counties would take note, she said.

"It could be groundbreaking," Taylor said.

The Moffat County School District stands to receive the most if an appeal is successful. The school could get as much as $393,879, Brinks estimated.

But school Superintendent Pete Bergmann said the school won't contribute funding for an assessment appeal, because the state backfills the tax dollars the school hasn't been getting because of declining property value.

The school receives nothing for its risk.

Moffat County could get $225,210 if the appeal is successful. Colorado Northwestern Community College could receive $32,370, and Craig Rural Fire District could receive $21,425. The commissioners plan to ask those entities to chip in for the appeal.

"If we're successful at this, we look at Tri-State," Raftopoulos said.

According to Brinks' calculations, Tri-State Generation and Transmission is undervalued by $2 million.

Rob Gebhart can be reached at 824-7031 or rgebhart@craigdailypress.com.

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