Garfield County, Caerus settle for $1.1M in gas production dispute
Company forgives $155,000 in interest; taxing districts on hook for refund
Glenwood Springs Post Independent
Garfield County commissioners on Monday signed the second of two property tax abatement agreements with oil and gas companies in recent weeks over misreported production revenues.
The county agreed to a $1.1 million refund for Caerus Piceance, LLC, related to errors identified by the company in the volumes and revenues of natural gas the company reported to Garfield County for properties acquired in 2014.
Due to the error, Caerus overpaid $1.1 million dollars in property taxes to the county and other local governments and school districts. Those entities must now refund the money.
Caerus did agree to waive $155,000 in interest that would have been legally owed to the company by Colorado law.
That was not the case in a $5.7 million settlement announced by Garfield County earlier this month involving a similar reporting error by Encana. In that instance, taxing entities in the county were also on the hook for $858,000 in interest, which Encana refused to relinquish. Garfield County commissioners agreed to cover the interest amount out of the county’s special Oil and Gas Mitigation Fund, so that the other entities would not have to pay it.
The Monday decision ended a process that began in December of 2016, when Caerus identified the reporting errors for purposes of determining property taxes.
“I appreciate Caerus waiving the interest expense,” Commissioner Tom Jankovsky said. “It shows their leadership in the community, and their commitment to Garfield County and the Piceance Basin.”
Reporting errors are not uncommon between sellers and buyers of oil and gas properties, and in this case resulted in an overpayment of property taxes for the tax year 2015, according to a county press release announcing the settlement.
“Caerus is pleased that Garfield County will be able to use these funds for essential community services,” Caerus Vice President of Operations, Michael Rynearson, said in the release. “The 150 employees in our Parachute office are proud to call the Western Slope home. Caerus has made a long-term commitment to this community, and plans to spend approximately $400 million in 2018 to develop and produce its Piceance Basin assets.”
School districts that owe money from the Caerus settlement are Garfield School District 16 and De Beque JT-49. Other local taxing districts that are impacted include Garfield County, Grand Valley Fire District, De Beque Fire District, Grand River Hospital District, Colorado River Water Conservation District, Colorado Mountain College, Parachute Parks and Recreation District, Bluestone Water District, West Divide Water District, Grand Valley Cemetery District, and the Garfield County Public Library District.
The Caerus repayment was approved unanimously by the BOCC, 3-0 Monday.
The earlier Encana settlement resulted in a refund of $1.9 million from the county, while local districts, including the Garfield Re-2 and Garfield 16 school districts, CMC and others owe a combined $3.8 million.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.