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NEXUS pipeline to generate millions in tax revenue

  • NEXUS-pipeline

    NEXUS pipeline route.

    ED BETZEL / GAZETTE

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MEDINA — The NEXUS Gas Transmission Pipeline is expected to generate estimated property tax revenue of $11,676,093 in its first year.

That figure is included in a report by Public Finance Resources Inc., a firm that provides financial forecasting for government entities, such as school districts, townships, villages, cities and counties, according www.PFRCFO.com.

The first year the pipeline is on the tax rolls, which could be as early as next year, it is estimated to generate about $83.7 million in tax revenue for Ohio counties, school districts, municipalities and townships, according to the PFR report.

The $2.1 billion NEXUS pipeline, first proposed in August 2014, is a business partnership of Detroit-based DTE Energy and Spectra Energy, which is owned by Calgary, Alberta-based Enbridge Inc.

Total construction costs of the project will be covered by Spectra Energy. It will comprise 255.8 miles of pipeline — 209.3 miles in Ohio — four compressor stations and five metering and regulating stations, the report said. All the compressor stations will be in Ohio, including the one under construction in Guilford Township. Once operational, the Guilford compressor station will help propel gas through the 36-inch diameter pipe.

Valuations in each county and township were based on pipeline miles. Allocation of pipeline miles to school districts was done through hand measurements using a Google Earth map. The pipeline was measured in 933 segments to arrive at the pipeline miles in each school district, the report said.

The tax rates used are from the 2015 property tax rate abstracts prepared by the Ohio Department of Taxation.

Tax revenue yields are estimated for the first five years of operation.

If the pipeline were to be completed and operational sometime in 2018, the property would go onto the tax duplicate for taxable year 2019, with the first actual tax revenue being paid by Spectra Energy early in 2020.

The report said Cloverleaf would earn the most tax revenue in the first year among school districts affected by the pipeline: $5,447,824.

Superintendent Daryl Kubilus said Cloverleaf intends to conduct a community survey to get input on what to do with the money.

“The board of education needs to discover the will of our constituents in regard to this revenue,” Kubilus said. “Before making those types of decisions, we have to engage our community. We have to do our due diligence. We do represent our community.”

He said the school board has been working with the Ohio Facilities Construction Commission to determine what matching state grants might be available if Cloverleaf wanted to undertake construction projects at the high and middle schools.

“We have some roofing issues we do have to take care of,” Kubilus said.

“The revenue potential is exciting. I want to temper that with the fact that I also understand we have great Cloverleaf supporters who are pro-pipeline and anti-pipeline. Many residents are upset by the concept of the pipeline. We will be very responsible with the resources afforded to us from the pipeline.”

Four other school districts in the county also will receive tax revenue, including the following in the first year:

  • Buckeye, $1,675,449;
  • Wadsworth, $952,404;
  • Medina $569,510;
  • Medina County Career Center, $448,602.

Among the townships the pipeline travels through, Guilford would earn $681,197 in the first year, followed by Lafayette, $247,425; York, $147,193; Wadsworth, $84,249; Montville, $74,254; and Litchfield, $62,909.

Medina County would earn $1,285,077.

The cumulative tax revenue of the first five years in Medina County would be $54,436,961.

Adam Parker, spokesman for NEXUS, said in an email tax estimates were prepared by PFR, a third party, in June 2016 based on the scope of the project at the time the study was conducted.

He said natural gas pipelines are subject to ad valorem (according to value) tax based on Ohio Revised Code. Ad valorem taxes, based on the value of the pipeline in each taxing district, are paid annually while the pipeline is in service.

Details regarding the ad valorem tax can be found at https://www.tax.ohio.gov/real_property.aspx.

Parker said project activities on the pipeline and compressor station will continue in Medina County until the project is placed into service in the third quarter of this year.

The Federal Energy Regulatory Commission gave the pipeline a green light in October to proceed with construction.

Attempts in Medina County to stop construction of the pipeline traveled unsuccessfully through the courts this year.

Right before the Christmas holiday, a federal judge, acting on a magistrate’s recommendation, denied the efforts of 64 property owners, including some from Medina County, to stop pipeline. The court said it didn’t have jurisdiction to consider the matter.

On Dec. 21, the Coalition to Reroute NEXUS filed a petition with the 6th Circuit U.S. Court of Appeals requesting it review FERC’s Oct. 23 order covering a “rehearing for further consideration regarding NEXUS” and an Aug. 25 order “issuing certificates and granting abandonment” regarding NEXUS.

On Monday, Sustainable Medina County, a grassroots group opposed to the pipeline, and others filed a an intervener request to join the petition pending in the 6th Circuit Court.

Among their reasons, they cited environmental concerns and public safety.

Contact reporter Bob Finnan at (330) 721-4049 or rfinnan@medina-gazette.com.



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