Story at a glance
• This spring, the Moffat County Commission contracted Visual Lease Services Inc. for $198,000 to inspect energy company sites for property that was unreported or undervalued on tax rolls.
• Suzanne Brinks, Moffat County assessor, witnessed a Visual Lease inspector find a natural gas compressor that had not been reported for two years, potentially worth more than $40,000 in back and current taxes.
• Visual Lease has found unreported property in every county it has worked in, said Ron Sosbee, Visual Lease director of governmental and client relations, including more than $153 million in extra property value during a 2006 inspection for Rio Blanco County. In Moffat County property taxes, that would be worth more than $2 million in new taxes. Since some of those taxes would be back taxes from previous years, the annual tax value would be less.
Craig Suzanne Brinks may have discovered more than $40,000 in taxes for the county.
She did it with an inspector from Visual Lease Services, an Oklahoma-based company that contracts with government bodies to appraise private oil and gas assets.
Brinks, who is the Moffat County assessor, and the Visual Lease inspector found a natural gas compressor owned by a Questar Corporation subsidiary that was not on the tax roll in 2005 or 2006.
Brinks was there on a randomly-chosen day, which is a good sign other unreported property could be found at many natural resource sites, she said.
Moffat County signed a one-time $198,000 contract with Visual Lease this spring to conduct on-site inspections at local oil and gas wells for the 2008 tax year.
Although she worked hard to take pictures of everything, and research what they were and how much they were worth, she thought someone more qualified would be better for the county. She is no expert in oil and gas equipment, she said.
The Visual Lease assessor said the compressor was worth more than $1 million, Brinks said. Because the compressor would be taxed for three years, from 2005 to 2007, that could amount to roughly $42,000.
A $42,000 collection would make finding that one compressor equal to 20 percent of what Moffat County paid Visual Lease.
The owning company could also be subject to an extra 20 percent fine for not reporting the equipment, Brinks added.
That bodes well for the county recouping more from unreported and undervalued energy property than it paid Visual Lease in the contract, Brinks said.
"My feeling is they're going to find more," Brinks said. "These companies do not report properly. I've found pipelines they say aren't there, even though there are the companies' names right on them. I have to send them pictures via e-mail."
Energy companies sometimes don't report their revenue properly, either, Brinks added. They pay taxes on how much money they generate through wells in the county.
Moffat has audited some companies because their reported taxable income didn't match projections, Brinks said.
"It's a serious problem across the entire United States," Brinks said. "There's numerous articles across the country that the oil and gas companies are taking advantage."
Visual Lease has never worked in a county where it did not find property omitted from the tax roll, said Ron Sosbee, Visual Lease director of governmental and client relations.
The reasons for this are two-fold, he added.
The oil and gas industry is replete with mergers and company acquisitions, so sometimes property falls through the cracks.
On the other hand, companies self-report on their property and revenue, so it is up to local tax assessors to take what they get or prove otherwise, Sosbee said.
Visual Lease works with Rio Blanco, Garfield and Montezuma counties in Colorado.
After its inspections in Rio Blanco County in 2006, Visual Lease found about $153 million in additional property value, including about $30 million in unreported property, Sosbee said.
In Moffat County, that much value could add more than $2 million in taxes. Because some of those taxes would be back taxes from previous years, the annual tax value would be less.
Visual Lease is done conducting on-site inventory inspections in Moffat and is in the process of valuing property.
Moffat County will not know how much money it will receive from Visual Lease inspections until early 2008, Sosbee said.
Companies are required to submit property reports at the beginning of the new year. Once those are in to the county assessor's office, Brinks will send them to Visual Lease for comparisons.
Visual Lease will decide on whether property was unreported or undervalued from those reports.