Millions at stake over Ameren fight with property tax assessments

Sixteen counties, including Cape Girardeau County, have been in a legal battle with Ameren Missouri since 2013 over the assessment of natural-gas distribution lines.

At issue are millions of dollars in tax money that local governments, particularly school districts, can't touch while the money sits in escrow.

The utility company continues to pay its property taxes under protest, arguing the assessments are too high, and it should be taxed less.

But assessors, including Cape Girardeau County Assessor Bob Adams, said depreciation is factored in, and assessors simply are following state law.

Besides Cape Girardeau County, four other Southeast Missouri counties are participants in the court battle: Bollinger, Butler, Scott and Stoddard.

In addition to the 16 counties, three other counties -- including Ste. Genevieve County -- have joined forces in the legal fight. Those three have similar assessment disputes with another utility.

Adams said about $13 million combined in the 16 counties is being held in escrow. That money was paid in protest by Ameren from 2013 through 2016.

The money in escrow increases by about $3.5 million a year, he said.

Ameren officials list a far different escrow balance.

Warren Wood, Ameren's vice president for external affairs and communications, said Ameren paid about $591 million in property taxes. Only $8.6 million of that is in dispute, or less than 1.5 percent, he said.

Adams said Ameren has about 300 miles of gas distribution lines in Cape Girardeau County, most of them in the city of Cape Girardeau.

According to Adams, about $1.5 million in taxes owed local governmental entities in Cape Girardeau County is being held in escrow. Most of that is tax money that would be paid to the Cape Girardeau School District, Adams said.

Cape Girardeau school officials said the district's share is over $1.1 million and is money the district can't spend.

"We can't build a budget around escrowed funds," assistant superintendent Neil Glass said.

Cape Girardeau School District superintendent James Welker said Ameren's actions are a financial challenge for all affected school districts.

"It is hurting school districts, and we don't have access to those funds," he said.

"It is very frustrating. It needs to be resolved," Welker added.

Adams called Ameren's actions "an atrocity."

The utility company has lost every step of the way in its efforts to pay less property tax, Adams said.

The utility company lost its case at hearings before boards of equalization in the counties, the Missouri State Tax Commission and circuit courts, he said.

Ameren has filed appeals, Adams said, but the company has contested assessments on a county-by-county basis.

"Ameren is bleeding us for more money," he said, suggesting the utility firm believes assessors eventually will give in because of the mounting legal cost.

But assessors and school districts have stuck together in this dispute with Ameren, he said.

To date, assessors and a number of school districts, including the Cape Girardeau district, have spent $1.2 million on their legal defense.

Ameren's Wood said the utility wants assessors to calculate taxes to better reflect depreciation.

But Adams said county assessors are following state law in determining the value of the gas-distribution systems.

Stoddard County Circuit Judge Stephen Mitchell ruled in favor of Cape Girardeau County in September, Adams said. The judge concluded a "depreciation of over 50 percent" had been applied by the county assessor's office.

But Ameren officials continue to argue the assessments are too high, and it puts an unfair burden on its customers.

Wood said, "This is a pass-through to our customers."

Ameren spokesman Brad Brown wrote in a follow-up email that "this is a simple issue about protecting our customers from inappropriate increases in their utility bills. A dollar of tax to the utility is a dollar of cost to our customers."

Brown added, "This is our customers' money, and we are the stewards to ensure it is being properly accounted for at the county level; in this case, a potential overcharge of $8.6 million."

But Adams said the assessors are not raising Ameren's property taxes.

"We are defending our current values," he said.

During a meeting of the assessors and Ameren representatives, Adams said an assessor asked whether Ameren would reduce its gas customers' bills if the assessments were lowered.

"They said, 'no,'" Adams recalled.

Local taxpayers would pay more if Ameren prevails in this tax dispute, he said. Local governments would be able to raise their levies to recover the lost revenue, according to Adams.

"Eighty percent of that ends up on residential customers," he said.

Meanwhile, the Missouri Supreme Court last week refused to take up the dispute, putting the issue back before various appeals courts, Adams said.

Ameren is taking its case for the 2014 and 2015 tax years before the Tax Commission later this year, officials with the utility said.

Assessors said they could face more legal fights with Ameren down the road.

Adams said Ameren has refused to consolidate all the assessment disputes into a single case as the assessors had offered.

Ameren's Wood said, "Each year is a different case. There are different facts, different numbers."

mbliss@semissourian.com

(573) 388-3641