County wants reversal of mine revaluation decision
The Grand County Board of Commissioners says it will seek to abrogate its recent tax revaluation of Henderson Mine and Mill after hearing a citizen’s concerns on the matter.
Peter Ralph raised a number of concerns with mine owner Freeport-McMoRan’s request for a revaluation, chiefly that it didn’t do so in time, at the board’s Tuesday, April 19 meeting.
In March, the board approved the mining giant’s request to change Henderson’s property tax valuation in Grand County from a five-year average of production to a three-year average of production.
In Colorado, property taxes on producing mines are levied against their total production.
Freeport-McMoRan initially requested that the county change its valuation from the current five-year average to a three-year average on Nov. 3, 2015.
It revised its request on Feb. 26 to ask for a yearly valuation rather than a three-year average.
Colorado law requires that mine owners must submit revaluation requests at least 45 days before their annual production reporting, which occurs on April 15.
Both requests fell before the March 1 deadline, but Freeport-McMoRan reverted its request back to a three-year average on March 15, just before the board’s deadline to vote on the matter.
Ralph contended that the corporation did so because of a clause in the Colorado Revised Statutes that states the board of commissioners of each county in which a mine is located in must authorize the use of any alternate reporting method.
Because Henderson, which operates its mine in Clear Creek County and mill in Grand County, is assessed on a ten-year average in Clear Creek County, changing its valuation method in Grand County from an average to an annual valuation would put it in conflict with Clear Creek County and thus state law, Ralph argued.
A conflict would open up Freeport-McMoRan to a lawsuit, Ralph said, which could possibly end with a federal court bringing Henderson’s valuation in Grand County in line with that of Clear Creek County by changing it to a ten-year average – much more costly for the mine.
Freeport-McMoRan initially sought revaluations from both counties after announcing last year that it was curtailing production at its Henderson operation, which produces molybdenum.
Freeport-McMoRan, which claims it is the world’s largest publicly traded producer of copper and molybdenum, plans to close Henderson in three to five years.
The Clear Creek County Board of Commissioners rejected Henderson’s request.
Henderson contributes around $4.5 million annually in property taxes to government and special districts in Grand County.
It’s not yet clear how much that would shrink with the proposed revaluation, but County Assessor Tom Weydert said his office would release those figures on May 1.
Ralph: Corporate lawyers sought to exploit county
During his presentation on Tuesday, Ralph described what he believes was a well-executed plot by Freeport-McMoRan’s elite legal team to exploit weaknesses identified while researching the county and board.
Those weaknesses include the county’s recent financial woes, an often-disinterested though sometimes tempestuous public, and a deeply conflicted board with a craving for grants, Ralph said.
Based on those weaknesses, Ralph said he believed the legal team came up with a three-pronged strategy that included isolating the board from the public, giving it as little time to make a decision as possible, and “giving the dog a bone” by offering recompense in the form of grants.
Commissioner Merrit Linke said that, for the most part, that version of events was likely true.
“In fact, Peter’s game that he described and strategy, really has proved out to be fairly accurate except for the isolation of the board individually, which, by the way, they tried to do with Clear Creek,” Linke said.
Citizen Eden Recor pointed to another clue that he said supported Ralph’s theory – a non-disclosure agreement that Freeport-McMoRan required the board to sign.
The board waited until the last possible day, March 16, to make a decision on the revaluation.
State law requires that the board respond to any request for revaluation at least 30 days prior to April 15, or the request is automatically approved.
County Assessor Tom Weydert told the Sky-Hi News on Tuesday that his office could not discuss production figures with the board until it had signed a non-disclosure agreement, which it did on March 8.
Recor posited that Freeport-McMoRan intentionally gave the county an unacceptable non-disclosure agreement to delay the process, which Linke said was likely true.
Hassler said Freeport-McMoRan had initially given the county a non-disclosure agreement more appropriate for a subcontractor than a government levying taxes.
Commissioner Kris Manguso, the sole dissenting vote in the board’s original decision to approve the revaluation, asked her fellow commissioners why the county wouldn’t try to challenge the revaluation.
“Why wouldn’t we just give it a shot?” Manguso asked. “The worse they can say is no.”
Board to challenge revaluation
The board ultimately directed Hassler to work with Ralph to draft a letter to Freeport-McMoRan stating that it had not submitted its revaluation request in time, though Tollett said she was still afraid of litigation.
“As I was saying, our concern is still ending up in court with these folks because they have a formidable arsenal of lawyers, much deeper pockets than we have,” Tollett said. “That’s one of the concerns about challenging this now – ending up in federal court, and I think we need to look at how serious that might be.”
Tollett said she was also concerned that, if the third request was vacated, the valuation could automatically revert to the annual valuation requested in February.
Ralph said he was confident that Freeport-McMoRan had rescinded that request for the third and final three-year proposal.
The board asked Ralph and Hassler to meet Thursday afternoon.
“You have to have some appreciation for the sheer audacity of their plan,” Ralph said. “To come to a county that’s suffering, that’s bleeding in street, and ask that county to make financial concessions to a multi-billion dollar corporation.”
A spokesman for Freeport-McMoRan had not returned a request for comment as of press time.
Related Story: County board to hear concern on Henderson revaluation
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