Lorain Officials Say NEXUS Pipeline 'Misled' County, Schools On Tax Revenue

Updated: 12:39 p.m., Friday Dec. 20, 2019.

A tax reassessment requested by a gas transmission company has Lorain County officials frustrated by the possibility of losing nearly 40 percent of the expected taxes before the county has collected any money at all.

The NEXUS pipeline was initially estimated to bring $9 million to Lorain County, but the company is appealing to the Ohio Department of Taxation for a reassessment of its value.

County commissioner Matt Lundy said Lorain hasn’t received any tax revenue from the pipeline yet. The money was set to go toward school funding. The Fireland, Keystone, Midview and Oberlin schools would lose between $600,000 and $700,000 if the change is approved, he said.

“It’s one thing if you say, years from now, this pipeline is devalued or depreciated. But this is brand new infrastructure in the ground,” Lundy said.

The pipeline was built and became operational in 2018. The county will receive taxes for 2019 in 2020, and Lundy said the first check would reflect any changes in valuation.

“We were told one thing, and now we’re being told it may end up being something else,” Lundy said. “To say that we’re unhappy about it is an understatement.”

The county submitted its own appeal to counter NEXUS, Lundy said, but the issue will likely continue through the first quarter of 2020.

The pipeline also runs through Medina, Stark and Summit counties.

Medina County Auditor Mike Kovack said the county won't see any financial impact from the reassessment, though he could not speak to local school districts. Officials planned on a drop in assessed value, Kovack said.

"We anticipated the value would be lower than the initial estimates," Kovack said.

Summit County officials are waiting on a decision from the state before taking any action, said Deputy Fiscal Officer Sarah Hegnauer.

"Our office is currently working with the County Auditors Association of Ohio and the other Ohio counties affected by the pipeline," Hegnauer said.

Changes to estimated revenue would impact the Manchester, Northwest, Norton and Green school districts, Hegnauer said.

In a statement emailed to ideastream, NEXUS said the reassessment is to ensure the property tax assessment is aligned with the pipeline’s true market value, and initial estimates of revenue were made in 2016 by a third party.

“We have consistently been clear that these tax estimates were provided for illustrative purposes only, were subject to the final project scope and should not be relied on to determine future budgets,” the statement said.

An earlier version of this story stated the NEXUS pipeline became operational in 2019. It was put into service in 2018.

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