Williams pays out $4.5 million in delinquent taxes
Post Independent staff
Glenwood Springs, CO Colorado
GLENWOOD SPRINGS, Colorado – An audit of county and energy-industry financial data has revealed that Williams Production RMT, known as the biggest player in Garfield County’s oil and gas industry, underpaid its production taxes for at least four years running, from 2002 to 2005.
The resulting “omitted property” tax payments, plus interest, amount to nearly $4.5 million, and are providing some needed relief to school districts and other taxing districts that rely on property taxes for most of their income.
For example, the Garfield School District R-16, in Parachute, received a payment last month of more than $860,000.
Approximately $354,000 of that must be used to pay off district debts, said director of business services Rose Belden.
But she said the remaining $506,000 or so will mean fewer layoffs and other cutbacks that had been blamed on the slump in the energy industry and a resultant loss of 230 students as families moved away.
The Re-2 school district, which includes schools from Rifle to New Castle, received payments of more than $900,000, while Colorado Mountain College got more than $370,000.
Theresa Hamilton of the Re-2 district said that approximately $500,000 of the Williams payment is going into the district’s general fund, and is expected to help offset anticipated budget cuts for the 2010-2011 school year.
Garfield County itself has received more than $1.26 million. The money is being distributed among various funds within the county’s departments, with the lion’s share of nearly $524,000 going to the General Fund, according to county finance director Lisa Dawson.
The audit was performed by an outside contractor, Martindale Consultants, according to Garfield County Assessor John Gorman, who began the auditing process in 2007.
The consultant found discrepancies in the valuations of Williams’ production numbers, along with tax deductions for production-related expenses, as related to wells within the county, Gorman said. He indicated that some of the discrepancies may have stemmed from record-keeping errors made by earlier owners of the mineral rights, prior to Williams’ involvement.
Gorman’s office negotiated with Williams officials, ultimately arriving at the $4.5 million payment.
Susan Alvillar, speaking for Williams, said on Wednesday, “We’ve cooperated fully with the county assessor’s office in this. We want to be good corporate citizens and pay our fair share of the taxes.”
She noted that the company hired two employees to work with the assessor on the matter, and beefed up its complement of contractors that keep track of production numbers and corresponding tax liabilities.
She said the company believes the errors may have occurred after the filing of tax returns each year, when the gas-production monitoring department may have come up with new sets of production figures that never made it into amended tax returns.
Also, she said, given the “voluminous” amount of data involved with keeping track of 3,000 gas wells, it is not surprising to find “typos and miscalculations” and mistakes in “the way that we take what we thought were allowable deductions.”
Audits of the taxes paid by other companies working the Garfield County oil and gas fields are underway, and there will be further audits of Williams concerning more recent years’ production figures, Gorman said.
Gorman, a Democrat, unseated Republican incumbent Shannon Hurst in 2006, based in part on Gorman’s campaign pledge to tighten up the county’s collections of tax revenues from the energy industry.
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