Duane Hicks
The town can’t appeal Minutes of Settlement for new gas distribution lines here as it previously had intended.
A recent reassessment by the Municipal Property Assessment Corp. (MPAC) indicated that following the replacement of old steel gas lines with new plastic ones, the value of the pipeline property has gone down.
This includes a reduction of municipal revenue of $19,824.88 and education revenue of $5,917.54.
Last month, council directed that the minutes of settlement be appealed—feeling that if Union Gas is improving its infrastructure, it should mean an increase in assessment, not a decrease.
But at last night’s meeting, treasurer Laurie Witherspoon notified council that she had been in touch with MPAC, which indicated the town would not be able to appeal the reassessment as legislation sets out the method to determine the assessed value for gas distribution lines.
Simply put, the regulations state new plastic pipelines are worth less than old steel ones.
“Normally, when you improve an asset, it goes up,” Witherspoon told the Times.
“In this case, it went down and it had to do with the regulation of the type of pipe.
“The only way that we could appeal is if we had some knowledge of wrong size of pipe or if we felt that the length of pipe overall was incorrect,” Witherspoon added.
“So basically we have a decrease in our assessment due to the change of the pipe from steel to plastic.”
Coun. Andrew Hallikas noted the town has been fighting with MPAC over the reassessment of the mill property and now there seems to be a contradiction with the pipeline assessment.
“It’s the same group looking at pipelines and the same group looking at mills,” he remarked.
“In the case of pipelines, [Union Gas] is replacing pipelines, albeit replacing them with a different material, but nonetheless when they replace the pipeline, they’re going to increase the life, the safety, and the value of it, and yet they want to assess it at a lower rate.
“Whereas, with mills, they’re feeding economical obsolescence and so they just write down the value of the property, even though the property still has value, based on the fact that the economy is tanking,” Coun. Hallikas added.
“It just seems to me that this organization needs to be a little more consistent in how they go about evaluating the value of things because the municipalities and the taxpayers are taking the hit on this,” he stressed.
Coun. Ken Perry said aside from putting new piping in the ground, Union Gas recently installed a new substation and increased the number of control valves from three to 12.
“If they didn’t increase their value of their asset, I don’t know what the whole deal was all about,” he remarked.
“Yes, the pipe in the ground was steel, but it was depreciated to zero dollars in 2013. It wasn’t worth nothing,” Coun. Perry noted.
“And now the new pipe is worth something and it’s not going to depreciate the same way the steel pipe did,” he added.
“It’s going to last that much longer.
“But because this is legislated, there’s nothing we can do about it except maybe inquire, send some letters of objection to how they do these things, and carry on with business,” Coun. Perry noted.
“There’s nothing else we can do.”
The town will send letters to the CEO of MPAC and its board chair, as well as the province’s finance minister, regarding the matter.
