The Washita County Board of Equalization voted Friday, July 19, 2019, to affirm the decision of the county assessor and deny the appeals of two corporations asking for drastic reductions in the listed fair market values of property in the county.
The first appeal was filed by Midcoast Energy with regard to properties impacting seven school districts in Washita County. Midcoast purchased Enbridge in August 2018, acquiring pipelines and processing plants in Oklahoma and Texas for approximately $1.1 billion. According to the Washita County Assessor, the value of properties owned by Midcoast and its subsidiaries in Washita County is $30,817,952. Midcoast appealed the decision and put forth an alternate fair market value of $1,696,505. According to Jerry Wisdom, the county’s subcontracted valuation expert, the ad valorem tax due is roughly one percent of the fair market value of the property, which means Midcoast is liable for more than $300,000 in tax at the assessor’s value, but less than $17,000 at their stated value.
During Friday’s hearing, representatives from Midcoast argued the valuation was much higher than it should have been based upon the purchase price of the property from its former owner, Enbridge, and upon the future income potential of the property. The assessor countered Midcoast’s claim, arguing that the purchase of the pipeline and property was a “fire sale” and therefore represented much lower values than what could be considered reasonable fair market value. She also told the board members that the income potential could not be properly evaluated as Midcoast had failed to provide adequate information from which to base such an assessment.
During the past five years, the property in question has been valued at an average of $29,871,971 per year. The highest value used for tax purposes was in 2018, at $31, 290,764 and the lowest coming in at $26,809,712 in 2015.
Board chairman Jimmy Musick told the Midcoast representatives he was leaning toward ruling in favor of the assessor’s office and asked if they were willing to settle the dispute out of court. Midcoast offered to come up to 50 percent of the assessor’s listed value, roughly $15.4 million. The board declined the offer and voted unanimously to affirm the assessor’s valuation on the grounds Midcoast did not provide adequate information to justify the requested drastic reduction.
The second case was reported in the July 10, 2019, issue of The Cordell Beacon and involves Enel Green Power North America’s wind farms in the Sentinel School District.
Enel’s Rocky Ridge project was initially valued at $116,749,859 by the county assessor. After an informal hearing, the valuation was reduced to $113,500,000. Enel, however, claimed the property should be valued at $45,541,078.
During the discussion of Enel’s appeal, the board members expressed concern about a number of items rolled into the operating expenses of the project, expenses which, if allowed, would reduce the value of the asset.
In 2018, Enel entered into a settlement agreement with Washita County and accepted a valuation of $105,135,806 as compared to the $112,444,321 valuation initially placed on the property. County Assessor Krystle Uecke said she grudgingly accepted the settlement to keep the county out of litigation, but was unwilling to drop to the $45 million number proposed by Enel.
Enel said the drop in valuation was not a drop in actual value of the asset, but reflected more of a change in the methodology used to determine the fair market value.
“While Enel Green Power North America maintains that the value of the facility is significantly lower, we decided it was in our best interest to agree to a $105 million value with Washita County in 2018,” the company said in a statement. “The significant difference between our 2018 agreed value and our 2019 reported value does not represent a ‘drop in value’ entirely; rather, it results from differing methodologies of valuation used by the company and the County. We are hopeful about reaching a reasonable compromise with the County.”
The board members determined that Enel had failed to provide sufficient justification for the lower valuation and again voted unanimously to uphold the assessor’s valuation.
The next steps in the process are up to Enel and Midcoast. Should they decide not to accept the decision of the Board of Equalization, they can challenge the decision by filing suit in District Court.
bob henline can be reached at