Published On: Wed, Oct 5th, 2011

Pipeline a big benefit to Cedar Co. taxpayers

HARTINGTON — The Keystone pipeline that stretches through  Cedar County has been a good thing for area residents, tax wise.
County tax entities are benefitting from the tax revenue coming in from TransCanada’s Keystone pipeline.
The pump station outside of Hartington, along with 37 miles of pipe and equipment carries a valuation of just under $24.5 million in Cedar County for 2011.

Hartington, Coleridge and Randolph School and Fire Districts, along with the Cedar County Ag Society, ESU, Northeast Community College, both Natural Resource Districts and Cedar County will all share in the taxes paid by TransCanada.
The pump station is located on a five and one-half acre parcel of ground northeast of Hartington. The land is located in the Hartington School District, Hartington Fire District and the Lewis and Clark Natural Resource District.
TransCanada paid only $4,518.96 in personal property taxes for 2010, although the amount of taxes will increase substantially for 2011.
Cedar County officials are still calculating this year’s tax amount for the pipeline project.
“The tax should be considerably more for 2011. Last year’s valuation was only for the improvements that were there on Jan. 1, of 2010,” said Cedar County Assessor Don Hoesing. “The pipeline, along with the real estate is all centrally assessed by the Nebraska Dept. of Revenue.”
Last year’s valuation was just over $350,000 while the 2011 valuation for TransCanada is set at over $24 million which is more than 70 times larger than last year’s figure.
For school districts, gains in property taxes could be offset by cuts in state aid, which is generally based on a formula that balances a district’s needs versus resources. If resources increase, such as the tax revenue from TransCanada, and needs remain the same, then state aid will decrease, said Hartington School Supt. Randy Anderson.
That fact will not affect the Hartington School District as the district has seen state aid drop down to less than $17,000 for this year’s budget period.
“The Assessor’s Office told me there was a little over $14 million in valuation from the pipeline in the Hartington School District,” Anderson said. “It will be an assistance to the tax payers – it will defray some taxes.”
Tax benefits for school districts can be used to pay down school bond issues and would not be affected by state aid.
If the added tax benefit reduces the school district’s state aid that will still amount to significant savings for the state, which affects taxpayers’ pockets.
The Keystone Pipeline Project was first announced in February 2005.
Connections and needed permits were obtained from the U.S. State Dept, Army Corps of Engineers, National Park Service, U.S. Fish and Wildlife Service and the State Historic Preservation Office and the path through Nebraska had to be walked to check for archeology finds.
Jeff Rauh, Public Consultation Representative with TransCanada, spoke at a public meeting in Hartington and began visiting with land owners concerning purchasing permanent easements from land owners.
A 30-inch steel pipeline, that is close to one-half inch thick and has four feet of soil cover on top, now crosses the county.

The Keystone Pipeline Project is pumping over 400,000 barrels of crude oil per day from oil sand deposits in Canada —  one of the largest resources in the world.
Since TransCanada’s Keystone pipeline went into service in eastern Nebraska in June 2010, it is difficult to find a county or town official who has anything bad to say about it.
“I have not heard any negative comments on the pipeline from anyone,” Hoesing said.
Tracking down all of the economic benefits of the pipeline is a larger challenge.
Some of the financial windfall from TransCanada was temporary.
Construction of the project ran almost straight down from near Yankton, S.D., into Cedar County and passed several small communities along the way as it crossed ten counties in Nebraska.
There were noticeable increases in local business during the construction  – motels filled up, grocery stores and gas stations saw new customers.
These counties will experience some long term benefits.
Local electric power companies will see increased revenue due to the added demand of five pump stations.
More significantly, recently-released property assessments show the ten counties now have an additional $143.49 million in taxable value which will give local taxing entities additional funding.
The added valuations of the pipeline is set to depreciate on a 15-year schedule which means the revenue from the pipeline could be halved in seven years.
By 2018 the personal property taxes will be worth half of what they are today and will be depreciated down to no value by 2027.
Rauh doesn’t like the static view of the depreciation schedule because it does not take into account the lifespan of the pipeline or improvements.
“As we own, maintain and modify the pipeline, and if we increase pump capacity, it will reset the clock on the new investments,” Rauh said.
Frederick Pinkelman, Wynot, drove 125 miles to give his testimony at a meeting in Atkinson on his experience with TransCanada.
Pinkelman was serving as a County Commissioner when TransCanada made the first contact about a pipeline across Cedar County. Pinkelman was on the county board during the construction of the pipeline.
“The company did what they said they would do. The workers were very professional,” Pinkelman said.

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