Goliad County's tax battle headed to court
Aug. 18, 2012 at 3:18 a.m.
Updated Aug. 19, 2012 at 3:19 a.m.
Goliad County is facing a lawsuit that may result in less tax money because Coleto Creek Power Co. filed a petition in district court protesting its value.
The power company usually generates about 40 percent of the tax revenue for the county and the school district.
The newest appraised value of the power plant - the largest taxpayer in the county - could mean a loss of about $175,000 for Goliad County and $484,000 for the Goliad school district.
If the lawsuit goes to trial, the Appraisal District will need to hire an attorney, funded by the county, according to a statement from the Goliad County Appraisal District.
Also, Coleto Creek Power will not be required to pay taxes on its property until the matter is resolved because the value is being disputed. If Coleto Creek Power pays the entire tax due on its contested value and a judge later rules to lower the taxable value, the county then would have to refund any overpayment plus interest to the power company.
County Judge David Bowman said he does not know how long the process to reach a decision could last. He said the petition will make planning the budget complicated.
"Normally, you have to have everything in place by Oct. 1 - budget adopted and tax rate set," Bowman said. "So I have to understand what the rules are going to be in calculating an effective tax rate - how that is done with a situation like this. I don't have experience with that. No one in the county does . And the school has a tighter deadline because their budget year starts Sept. 1."
He also said he did not know how expensive a legal battle will be for the county.
The company filed the petition in the 135th Judicial Court on Thursday, according to Danni Sabota, a company spokeswoman.
"We felt that the original valuation of the property was much higher than any other coal plant in the state and we wanted to work with the appraisal district to negotiate what we felt was a more applicable value for the tax base," Sabota said. "We hope that we can come to an agreement before we go to trial."
Sabota said the Goliad County Appraisal District has three weeks to reply to the petition.
In the annual Appraisal District appraisal notices, the plant was originally valued at $355.3 million, said Pat Brenna, the county's chief appraiser. The appraisal work was conducted by Pritchard & Abbott Inc., a Fort Worth valuation and consultant company.
But the power plant had its own appraisal conducted. Duff & Phelps, a Chicago-based investment management firm, set the value at $200 million.
After the power company contested the county's valuation, the Appraisal Review Board lowered the value of the plant $26.7 million to $328.6 million on June 20.
From there, the company had until Saturday to protest in court.
Bowman said he did not know how the county plans to handle the situation.
"We have to have some time to work on that and try to figure out what the best approach is going to be," Bowman said. "This is a new experience for all of us."
His first step, he said, would be to get a copy of the petition on Monday.
Using the $328.6 million valuation and the current tax rates, the school district could earn about $3.7 million from the plant and the county about $2.2 million.
Though the Goliad School District is hoping to give staff members a 2-percent raise this year, Superintendent Christy Paulsgrove said in an earlier interview that if Coleto Creek contests its value, the district may have to layoff employees or cut programs.