OLIVIA — Renville County, two school districts and five of its townships will need to refund an estimated $195,110 in taxes to the Alliance Pipeline if a proposed settlement is approved.
Estimated taxes totaling $143,820 and collected for the Renville County portion of the pipeline but paid to the state of Minnesota would be repaid from the state, making the total estimated cost of the settlement $338,926 in Renville County.
The estimated losses for the BOLD and Buffalo Lake-Hector school districts are $40,027.30 and $10,702.67, respectively. Townships affected by the settlement include Hector, Kingman, Martinsburg, Melville and Osceola.
The natural gas pipeline slices through 23.2 miles of Renville County. There is also a large compressor station located on the pipeline in the county, which increases the tax impact for the county and Kingman Township.
The Renville County Board of Commissioners will decide on Tuesday whether to approve the settlement, which was negotiated by the state with the company.
Alliance Pipeline had filed lawsuits challenging the valuations placed on the pipeline in 13 Minnesota counties. Chippewa, Kandiyohi and Swift are among area counties in which the pipeline runs.
Under the settlement, the assessed valuation is being reduced by 9.25 percent in each of the last four years, according to Renville County Attorney David Torgelson.
If Renville County rejects the settlement, it has already been put on notice that it would be on its own to litigate the dispute with Alliance Pipeline. The state of Minnesota has indicated that it will be approving the settlement.
Torgelson told the County Board of Commissioners on Tuesday that the county’s costs for litigating the issue could easily prove greater than the amount of taxes to be refunded.
The settlement is based on taxes paid during the years 2010, 2011, 2012 and 2013.
The taxes have already been collected and spent. That makes it very difficult for the county and the other affected taxing entities to make refunds, the County Board of Commissioners said. They told visiting legislators State Sen. Gary Dahms, R-Redwood Falls, and Rep. Paul Torkelson, R-Hanska, that this is the second time the county has had to refund Alliance Pipeline for taxes based on disputed valuations.
In 2007, Renville County and taxing entities in it refunded $438,649.81 to Alliance Pipeline. The county essentially took on the role of “banker’’ for the other townships and school districts, said Commissioner Bob Fox. They repaid the county as they were able to collect taxes to make up for the loss.
County Administrator Sara Folsted said the county will have to tap its reserves to make the refund if this settlement is approved.
The Alliance Pipeline represents one of the larger tax paying entities in the county.
The settlement with the Alliance Pipeline does not provide any assurances that there will not be challenges to valuations for taxes in future years, according to Torgelson.