County denies energy firm

By Brandon Mathis

Journal Staff writer

There will be no abatement for energy giant Kinder Morgan as declared by the Montezuma County Commissioners at their meeting Monday, Feb. 6.

Kinder Morgan spokesman Walker Knight maintained that considering the costs of transportation and shipping their carbon dioxide, or CO2, via the Cortez pipeline they should be allowed a tariff for the year 2008, which would have doubled the company’s operational expenses of $48 million. In 2008, the county assessor’s office initiated an audit of Kinder Morgan to determine the market value of CO2, and found discrepancies in their reports.

Since Kinder Morgan owns the Cortez pipeline it can be argued that they pay the tariff to themselves.

Kinder Morgan is calling for a 21 percent expense on the dollar for that year.

“If it were 12 or 13 percent, that’s one thing, but these are too high,” said Commissioner Steve Chappell.

In short, the board determined that Kinder Morgan was paying themselves to send their own product to Texas, and wanted a tax reduction of those costs. With millions of tax dollars at stake and no settlement offer from Kinder Morgan, the board moved to deny any abatement at this time, as recommended by County Assessor Bob Vanderpool.

Commissioner Larrie Rule agreed.

“As a business owner, I can only deduct my actual expenses.”

Vanderpool pointed out that the county assessor’s office is audited closely by the state, and every homeowner in the county is held to a standard, but oil and gas interests are to self report their tax information, with no audits in place to examine them. The county also brought in outside consultant Mary Ellen Denomy, who specializes in natural resource and forensic accounting, to corroborate their findings.

Knight encouraged the county to examine other energy companies in the area, and not to single out Kinder Morgan. Knight also stated his intent to appeal the board’s decision. Kinder Morgan is the largest producer of CO2 in the county.

Vanderpool later said Kinder Morgan has been helpful, courteous and professional throughout the process, during what he called “an honest disagreement.”

In other commissioner business, Kent Helwig and John Nadone gave the quarterly update for Southwest Memorial Hospital They reported that while there were losses due to a one time accounting change within the hospital, overall it is in a strong financial position for the fiscal year.

“We have improved financially overall, with cash in the bank and lower long term debts,” said Helwig, the hospital’s chief executive officer.

Helwig mentioned possibilities of construction of a new hospital or a significant remodel of the current facility, costs of which would not be a burden on taxpayers (see related story). Helwig also said they would be recruiting more board certified staff for the emergency room.

Other health related updates came from county Health Department Director Lori Cooper. She reported that the department received a grant in the amount of $31,752 for a cardiovascular health program.

“The grant will go for basic screenings, education, prevention and high-risk case management,” Cooper said. She said cardiovascular health can often be improved by lifestyle choices.

She also presented to the board the department of health’s master contract, to be signed every five years as a contract between the department and the county to uphold efforts to maintain health standards, which the board signed.

Dean Roundtree gave his road report, presenting the board with information on the completed McElmo Canyon Road concrete retaining wall. The short section of wall was put in place to slow erosion at a cost of less than $6,000. Roundtree also reported issues surrounding missing stop sights at the intersection of Road 16 and DD. The county will consider whether or not the stop signs are needed.

Reach Brandon at brandonm@cortezjournal.com