Are county auditors owed a pipeline easement fee?

SALEM, Ohio — Some Ohio county auditors affected by the planned natural gas pipeline known as Nexus Gas Transmission are trying to collect conveyance fees on the easements held with landowners.

And other counties say the value of those easements is too difficult to determine, and are not collecting at this time.

Ohio law allows counties to collect up to $4 per thousand dollars of easement value, with $1 of that going to the state, for handling the easements. Easements of less than $1,000 are exempt.

But some counties and pipeline opponents say those fees were not assessed from the beginning.

Nexus is a 255-mile interstate pipeline that is intended to begin in Columbiana County, near Kensington, and cross Ohio diagonally on its way into lower Michigan.

Collecting fees

Stark County Auditor Alan Harold said his county began charging for pipeline easements in August, following a directive from the Ohio Department of Taxation.

Through January, Stark County has reviewed about 17 easements, with values as low as $3,300 and as high as $305,000.

Harold estimates that after reviewing the easements, Stark County has since collected about $40,000 from Nexus. He said it’s important revenue, but very little compared to the $4.3 million the same account generated all of last year. Stark County collects $4 per thousand dollars of easement value.

“While the $40,000 is important, it’s $40,000 on top of $4 million,” he said.

In Medina County, assistant prosecutor Mike Lyons said the issue with the conveyance fees could be an “oversight and misunderstanding.”

“I’m very reluctant to even allude to some notion of (Nexus) not being forthcoming with information,” Lyons said. “I think this was a kind of assumption that (pipeline) easements are not subject to this fee.”

Correcting the issue

Lyons said the county prosecutor’s office has been in touch with Nexus, about reviewing the leases and correcting any oversights. He said Nexus has “been responsive” to the county’s concerns.

Medina County Auditor Mike Kovack said Nexus holds 104 easements in his county, which could add up. He said that with the way the easements were filed in his county, there’s no paperwork to track the value.

The actual value of the easement could become a big question, as counties and Nexus work to determine what each easement is worth.

“That is one of the sticking points right now,” said Jack LaMonica, chief of staff for the Summit County Fiscal Officer.

Some easements might include only an access point, or right-of-way, while others could include damages or alterations to the land.

LaMonica said Summit County officials determined there were 87 parcels related to the Nexus project, since December of 2015. He said when Nexus conveyed the easements to the county, it checked a box stating the value for each was less than the state’s threshold of $1,000.

Further review

But the county later learned of at least one homeowner who was paid above the threshold, which led to a meeting with Nexus and an effort to reclaim the funds.

LaMonica said Summit County has asked Nexus for an order of payment, to verify the exact amount granted in the lease. Since the order, he said at least four leases were found to be above the threshold, and the county was paid $1,800 in conveyance fees.

LaMonica said the county also instructed Nexus that any future easements run through the county fiscal office need to include a document showing the amount paid to the homeowner.

Adam Parker, spokesperson for Nexus, told Farm and Dairy that Nexus “continues to work with county officials to address any outstanding matters.”

In a Feb. 18 article by the Medina Gazette, four Nexus-affected counties in northwest Ohio said they did not charge conveyance fees on easements.

Sandusky County Auditor Jerri Miller said her county doesn’t charge for easements because it’s difficult to determine the value, and whether the parties in the easement are being honest.

“It’s really hard for us to track them,” she said, adding that it’s even harder with pipeline easements, because the developers can claim the right-of-way is less than $1,000, and therefore exempt, while keeping the cost for damages separate.

Opposed to pipelines

Pipeline opponents have pressed the issue, saying it’s not fair to Ohio’s taxpayers to allow these funds to go unpaid.

Paul Wohlfarth, a pipeline opponent who lives in Ottawa Lake, Michigan, and owns a farm in Lucas County, Ohio, said the pipelines should be held accountable.

“Our government should be holding their feet to the fire and making them pay,” he said.

But even if Nexus did pay the amount Wohlfarth believes they owe, he said he’d still be opposed to the pipeline.

“It’s an export pipeline — there’s no need and there’s no public service,” said Wohlfarth, arguing the line would only benefit private interests.

Wohlfarth is a member of the Coalition to Reroute Nexus, and a couple other pipeline opposition groups. He said he is doubtful the pipeline will ever bring the state, or the individual counties, the millions of revenue promised.

The Nexus pipeline is being planned by Enbridge, which acquired Spectra Energy in February. The project received its final environmental impact statement from the Federal Energy Regulatory Commission for the pipeline in late November, and the company hopes to have final approval from FERC soon.