Medina County officials are looking into allegations that the company planning to build a natural gas pipeline through the county has not been paying a state-mandated transfer fee on property acquired from local landowners.
Section 319.54 of the Ohio Revised Code requires entities receiving property worth more than $1,000 to pay a 1 percent conveyance fee to the state and up to 3 percent to the county to compensate for auditors’ services. Medina County currently charges 2 percent on such services, which include transfer of a home at purchase or in bequeathing situations.
However, some county auditors say Spectra Energy, the company behind plans to build the 255-mile NEXUS Gas Transmission pipeline from Columbiana County through 12 other counties in Ohio — including Medina and Lorain — and into Canada, has avoided paying the fees by claiming that land parcels it acquired via easements in some counties are worth less than $1,000.
Auditors say they are questioning those valuations and redoubling efforts to collect the revenue. Summit County Auditor Lee Ann Shaffer first discovered the discrepancy in her county last year.
“We are investigating 80 previous land transfers” to NEXUS, she said Thursday. Ohio requires forms stipulating the value of easements to be filed at the time of transfer, with the entity receiving it agreeing to that value “under penalty of perjury,” Shaffer noted.
“We have handed over the information we’ve found so far to our prosecutor’s office,” she said.
Shaffer has alerted her counterparts in the 12 other Ohio counties through which NEXUS would be built.
Medina officials said they would look into Summit’s efforts and soon determine if similar measures are warranted.
“The auditor has asked me about” the conveyance fees, Mike Lyons, Medina County assistant prosecutor and chief of the office’s civil division, said Friday.
“According to the statute, easements worth under $1,000 are exempt, which implies that those worth over $1,000 are not,” he added.
Asked whether he and County Auditor Mike Kovack would take additional measures against NEXUS, he said they would “take a look at what (Summit County officials) are doing and will study it further.”
Kovack was unavailable for comment.
County Prosecutor Forrest Thompson said Friday he also is aware of the issue, and the office would continue discussions with Kovack and then take appropriate action if warranted.
Spectra Energy spokesman Adam Parker said the company is unaware of the allegations. Spectra’s general cousel, Reggie Hedgebeth, did not return calls for comment.
The NEXUS Gas Transmission company is a partnership of Spectra, based in Houston, and DTE Energy, based in Detroit. The $2 billion NEXUS project was announced in 2014 and is awaiting construction approval from the Federal Energy Regulatory Commission, or FERC.
Stark County Auditor Alan Harold said his office has found some of the discrepancies flagged by Shaffer in Summit County. He said his county recorder’s office was unaware of the statute mandating conveyance fees until last August.
“We started charging at that point,” he told The Gazette on Friday. “It did become clear that we have to collect that.”
He added that easements for another Ohio-to-Canada pipeline called Rover, which runs through the northern part of the county, amounted to approximately $20,000 in revenue for Stark. He was unable to estimate the revenue that is expected from NEXUS easements.
Beyond the revenue he would collect for his county, Harold said, his primary concern in the matter is due process.
“I tell my people that when we are fair and consistent, all the other problems take care of themselves,” he said. “I treat the guy building the million-dollar shopping center the same as the gal who’s buying a $30,000 house in the poorest part of the county.”
Other nearby Ohio counties affected by NEXUS easements also are looking into the issue. Wayne County Auditor Jarra Underwood said Thursday she found no discrepancies yet but is studying the easements in her county further.
Lorain County Auditor Craig Snodgrass said “NEXUS has been paying” conveyance fees in his jurisdiction.
Officials in four NEXUS-affected counties in northwest Ohio said they did not charge conveyance fees on easements.
Still other county auditors said they read the statute in question differently than Shaffer and did not plan to pursue the issue.
Sandusky County Auditor Jerri Miller said it was difficult to determine land value in easements.
“We have never charged on easements because it’s difficult to know if they’re being honest,” she said Wednesday. “We don’t want to get into policing all that.”
In the Appalachian region where the shale gas lies, Columbiana County Auditor Nancy Milliken said she would not be aware of any problems with conveyance fees on easements unless a resident filed a complaint.
“A property owner would have to file a complaint with my office for me to be able to do anything,” she said Wednesday.
The NEXUS pipeline is awaiting final approval for construction from the Federal Energy Regulation Commission, which currently lacks enough members for a quorum after the resignation of Norman Bay on Feb. 3.
“NEXUS remains committed to placing the project in service in the fourth quarter of 2017,” Parker said earlier this month.
Contact reporter Marina Malenic at (330) 721-4063 or email@example.com.