Craig There are good apples and bad apples, said Jerry Wisdom, vice president for Oklahoma-based Visual Lease Services.
Wisdom has been in and around Moffat County this year and last year surveying business personal property for local energy companies.
There are some apples that don't report all their property - or don't accurately value their property - so they can pay less in property taxes, Wisdom said.
"Some people give bad information, for whatever reason," he said. "I'm not here to judge the energy industry, I'm just judging the information. Lucky for me, I think I'm going to be employed for a while. The way I get unemployed is if they start telling the truth."
Moffat County Assessor Suzanne Brinks requested the county hire Visual Lease because she said she does not have the expertise to accurately value the array of technology and machinery employed at natural gas wells and other industry sites.
With tax appeal hearings under way, the county is getting close to seeing whether the $198,000 paid to Visual Lease was a good investment.
So far, it appears it was. The Assessor's Office estimates about $1.1 million in additional property tax revenue for the Moffat County School District, Colorado Northwestern Community College Craig campus and the county.
The added sum comes from higher valuations on property and tax penalties from property that was never reported, back to 2002.
The figure is about $200,000 less than reported a few weeks ago. The drawback in added property taxes came from agreements made between certain companies and the Assessor's Office after tax appeals.
During the County Board of Equalization tax appeal hearings Wednesday, which are ruled on by the Moffat County Commission, county officials became frustrated with the apparent lack of property information provided.
"My hope is that Questar (Gas Management) or other companies really be honest and sincere with the Assessor's Office so they can tabulate the facts," Commissioner Saed Tayyara said.
Wisdom said during Questar's appeal hearing - in which the company's property went from about $3.5 million to about $15.5 million in value - the values reported did not make sense.
"There's some fallacy in your reporting because these numbers don't add up," he said. "They're not reasonable, they're skewed and we can't rely on them."
Wisdom pointed to items such as metering equipment that were reported at less than their true cost and a gas compressor installed in 2006 in east Hiawatha that was never reported to the assessor.
There also were underground pipes reported at a fraction of their true worth, Wisdom said, and the company never reported new gas lines from 2001 to 2006 despite the addition of new gas wells.
Ben Thompson, vice president of energy services at Taxes-based K.E. Andrews and Company, appeared by phone at Wednesday's hearings to represent Questar and other companies. K.E. Andrews is a national tax service company that only takes property tax cases.
Regarding Questar, Thompson said there was no attempt to circumvent the rightful amount of property tax payments.
"There is no, from our end, miscommunication," Thompson said. "Certainly, if Mr. Wisdom believes some property was left off, that is completely inadvertent. Our hope is, as yours is, this information is completely accurate."
Wisdom then invited Thompson to visit Moffat County so the two could inspect the property and reported values together.
Thompson said his company may send someone.
In a conversation Thursday, Thompson said Visual Lease is one of the only tax consulting firms that is difficult for his company to work with.
"We work with a lot of different consulting firms in a lot of different states," he said. Sharp tax increases are "not common, except for anywhere that Visual Lease Services does business, generally."
Thompson said the cost schedule for property used by Visual Lease is different from other consultants and seems to overvalue property.
He pointed to one case where a gas compressor leasing company in Moffat County had a compressor valued at $1.3 million by Visual Lease, when the same compressor can be bought on the market for about $700,000.
Wisdom said his company's cost schedules are driven by market data, adding that it's always difficult to asses a true value because companies rarely disclose how much they paid for something or how much income it generates.
"We just need the right information," Wisdom added. "If they can tell us how much they bought something for and how much income they derive from it, that will go a long way toward finding the right value."
When companies do report purchase amounts or income statements, Wisdom said, their reports are usually instances where outside factors drove down costs or earnings.
"They don't want to give you the good stuff," Wisdom said. "They only want to give you ones showing they had a bad sale or a bad year."
The increased property tax revenue will not offset earlier reports that the county would lose tax dollars from 2007 to 2008. Taxes are paid one year late, so 2008 revenue would be collected and spent in 2009.
With the loss of about $200,000 in revenue following appeals, the county expects a shortfall between $500,000 and $900,000 in the 2009 budget compared to the 2008 budget.
The shortfall could increase for a number of reasons: There are three more appeal hearings scheduled for Aug. 5, companies may appeal the county's decisions to the state Board of Assessment Appeals and all companies have yet to file appeals for tax penalties from omitted property.
Omitted property taxes and penalties account for about $640,000 of the $1.1 million in estimated additional revenue.
On the county's side, however, money collected from omitted property also could go up. Visual Lease has not finished investigating unreported pipelines, and the roughly $640,000 attributed to omitted property does not include any additional taxes for pipelines.
In any event, Brinks said her goal is to have everything settled before Jan. 1, 2009.
"Hopefully, we know what's going to happen with all this so we have that money to spend," she said.
The county plans to retain Visual Lease to conduct annual "maintenance" investigations from now on, Brinks said. A contract agreement has not been signed, but payments to Visual Lease are expected to be about $40,000 each year.