One of the arguments often heard from those who oppose natural gas pipelines is that “nobody” benefits from the pipeline except the sleazy Big Corporation that builds and profits from it. A single pipeline running through Ohio and Michigan puts that lie to rest. Rover Pipeline, built and operated by Energy Transfer, paid out some $73 million in local property taxes in 2018 when the pipeline first began operation. For 2019, with the full pipeline operating at 100% capacity for the entire year, Rover says they will pay out ~$180 million in property taxes! Taxes that fund schools, roads, first responders and other worthy causes.
The following article focuses on Rover’s impact on Wood County, Ohio, but also mentions the top level tax revenue numbers for the entire pipeline project.
The Rover Pipeline paid more than $4 million to Wood County in annual property taxes for 2018, with more than $69 million paid across the state, according to a press release issued by the company.
Across the full four-state project, the pipeline paid nearly $73 million in annual property taxes, and is expected to pay more than $180 million across the entire route in property taxes for 2019. This takes into account the full operations of the pipeline going service in the last quarter of 2018.
The property taxes generated by the pipeline are paid to the local taxing authorities, which are then responsible for distributing the money based on the individual taxing guidelines set forth by each taxing jurisdiction, or county.
The property taxes are based on the actual value of the pipeline which is the sum total of the materials used to build the pipeline, labor costs and other considerations.
These taxes are paid annually while the pipeline is in service and are used to support local needs such as schools, libraries, roads, hospitals, health departments and senior citizen centers.
Construction on the 713-mile pipeline was completed in sections with the first section going into operation in August 2017, and the full project going into service November.
The project is currently transporting an average of more than 3 billion cubic feet per day of natural gas from processing plants in West Virginia, Eastern Ohio and Western Pennsylvania to the Midwest Hub near Defiance, for delivery to markets across the U.S., as well as to the Union Gas Dawn Storage Hub in Ontario, Canada.
Additionally, Rover has donated more than $375,000 to a variety of local non-profits and emergency management associations along the route, which includes the Ann Arbor YMCA, the Mountaineer Food Bank and the Ohio 4H Youth.
Together, these donations and the annual property taxes are part of an ongoing commitment by Rover Pipeline to be a good neighbor, business partner and a valued member of communities along the route. (1)
We spotted a second story about Rover and it’s tax revenue impact. Shelby City Schools in Richland County, OH has been trying, for more than a year, to build a new Pre-K through eighth grade building in the district. Three attempts to pass a bond issue have failed. But because Rover tax revenue now flows to the area, Shelby is on “the short list” to receive a grant from the state to cover half the cost of the new building project.
The Shelby City Schools District is attempting one last Hail Mary to build a new Pre-K through eighth grade building in the district.
After failing three times in 12 months to pass a bond issue in the district to fund a new facility, Shelby City Schools has one last option to build a new building without needing any additional taxpayer money.
The Ohio Facilities Construction Commission (OFCC) is still considering funding half of a new building in Shelby if the district can come up with their half – which could be possible thanks to the Rover Pipeline.
According to Superintendent Tim Tarvin, due to the fact the Rover Pipeline revenue was confirmed by the proper taxation authorities in January, the OFCC has put Shelby on the short list to receive state funding when it becomes available.
“Now, because we have received the first year’s tax settlement from Rover Pipeline money, the OFCC sees that, and that’s what may qualify us to receive our 50/50 funding share,” Tarvin said.
Through a financial package from the district plus Rover Pipeline revenue, Shelby City Schools is able to contribute $16.8 million towards the total $33.6 million needed to build a new Pre-K through eighth grade facility. However, nothing is guaranteed yet – the plan is contingent upon the OFCC receiving more funding from the state, and whether or not the OFCC will prioritize the Shelby building project.
The fate of a new building within the Shelby City Schools district will be determined in the coming months.
HOW WE GOT HERE: On Nov. 6, 2018, voters in Shelby failed for the third time to pass a bond issue that would’ve built a new pre-kindergarten through eighth grade building in the district. Unofficial final results from the Richland County Board of Elections showed the bond issue earned 54.48 percent of votes against the issue, and 45.52 percent of votes for the issue.
Shelby voters rejected the district’s first attempt at passing a levy to build a new school and a new football stadium on the Nov. 7, 2017 general election. The issue was presented again with the football stadium at the May 8, 2018 primary election, and rejected again.
The issue on the ballot Nov. 6 was a 2.8 mill, 37-year bond issue that would have cost Shelby voters $10.2 million. If passed, the bond issue would have funded a 132,000 square-foot building for Pre-K through eighth grade students that would be designed to keep the primary, intermediate and middle school grades located in separate wings.
A new pre-kindergarten through eighth grade building would combine the student populations of Dowds Elementary, Auburn Elementary and Shelby Middle School. Auburn Elementary was built in 1948, Dowds Elementary was built in 1956, and Shelby Middle School was built in 1965.
Traditionally, there are two ways to finance a school construction project via bond issues: one is to pass a bond issue where the entire cost becomes the responsibility of the citizens who live within that school district; the other is to pass a bond issue that enters into a partnership with the OFCC and shares the cost with the state of Ohio.
The Shelby Board of Education confirmed at their Oct. 22, 2018 meeting that any revenue collected from the Rover Pipeline would be used towards the retirement of the bond issue, if it had passed. Because of the fact that the Rover Pipeline project occurred through the Shelby City Schools district, the board expected the district to receive additional public utility property tax revenue from the project beginning in 2019. The exact dollar amount that will be collected by the district was unknown at the time.
After the bond issue was defeated for the third time in November 2018, the Shelby City Schools district received its first payment of $1 million in tax revenue from the Rover Pipeline. According to Treasurer Elizabeth Anatra, the full valuation of tax revenue from the pipeline won’t be realized until next year. But for now, it was enough to prove to the OFCC that the district would be able to fund its half of the building project without asking the voters for any additional money.
“It is important to understand this solution was not available prior to November 2018,” Tarvin explained.
The cost to build a new pre-k through eighth grade building would be $33.6 million total, with the state paying $16.8 million. The bond issue proposed the Shelby City Schools district contributing $6.6 million towards the project and voters would pay the remaining $10.2 million. Now, the district is still committed to contributing $6.6 million, but the $10.2 million would come from Rover Pipeline revenue generated over the next 30 years. (2)
(1) Bowling Green (OH) Sentinel-Tribune (Mar 31, 2019) – Rover Pipeline paid $4 million to Wood County in 2018
(2) Mansfield (OH) Richland Source (Mar 27, 2019) – Shelby considers unique avenue to fund new school building
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