BRIGHAM CITY -- Box Elder County has already paid a $930,000-plus tax refund to the Ruby Pipeline monolith, and will be paying another $930,000-plus refund this month to behemoth Union Pacific.
The refunds follow property tax assessments by the state Tax Commission protested downward by the corporations.
And as a result, Box Elder taxpayers may see bigger property tax notices this summer.
The near identical fiscal hits leave county officials shellshocked.
"We're trying to find out what happened," County Commissioner Stan Summers said. "This is tax money we've already spent.
"I just finished my first year as a commissioner, so this is new to me. But it's like they pull a number out of a hat."
"We're the ones taking it in the shorts over someone else's mistake," said Commissioner LuAnn Adams.
Particularly startling is the fact the Ruby Pipeline assessment for 2012 is lower than it was when the pipeline was empty. As in, still under construction in 2011, no natural gas flowing or selling.
"Why is it worth less now than when it was empty?" asks Summers. "The assessment is less now that something is running through it?"
Both County Auditor Tom Kotter and County Treasurer Shaun Thornley say the twin killings separately are the largest tax refunds they've ever seen the county pay, possibly the largest in the county's history.
The Ruby refund went out in June while the Union Pacific reassessment was only signed Dec. 16. The check is still to be finalized, expected to be paid later this month.
The county administers the refunds on behalf of the various taxing entities, with the hardest hit the Box Elder School District.
Fully two thirds of both refunds are coming out of school coffers. Box Elder County government takes the lion's share of the rest of the hit at more than $340,000 total.
Officials say they weathered the first blow in June with the Ruby refund. No layoffs, no tax increase.
But that remains to be seen with the big hit from Union Pacific.
"With the Ruby Pipeline, we knew it was forthcoming," said Assistant School Superintendent Terry Jackson. "Ruby had been very clear they were going to pay the taxes, but that they were going to appeal the assessment."
The district was able to adjust its $60 million budget cautiously, Jackson said, avoiding any layoffs or program slashes. "We didn't have to do anything drastic," he said.
"But that one has taken us a little by surprise," Jackson said of the Union Pacific refund, which is another more than $660,000 blow to the budget six months after the first.
"We haven't had a chance to sit down and take a hard look at what that means to us."
Jackson said layoffs can't be ruled out yet, but possibly could be handled through attrition, leaving retirements and resignations unfilled. The adjustments would be made for the next school year, he said.
Unlike the Ruby refund, the possibility of a tax increase is looming regarding the Union Pacific refund, in the form of a "judgment levy" that would be added to tax notices issued in July by the various taxing entities.
Jackson said that also hasn't been ruled out by school officials, and Kotter and Thornley said it has been discussed by the county.
"Brief discussions," Kotter said.
"The county decided not to pursue a judgment levy for the Ruby Pipeline refund," Thornley said. "It's still being considered for Union Pacific."
No estimates yet on how much money it might be.
Ruby Pipeline's owner, Houston-based Kinder Morgan Inc., is the largest U.S. natural gas pipeline and storage operator in the country, according to its website.
Richard Wheatley, company spokesman, said the reasons the pipeline's market value was higher before it actually conveyed any natural gas has to do with a number of factors.
Depreciation for one, he said, and the fact during construction on-site building materials and assets are assessed at their brand new price and such assets are more plentiful on site, with an inventory maintained in storage. Delays with regulatory procedure and protests from opposition groups also drove up costs, he said.
He wouldn't comment on when a new assessment might be sought again for the Ruby Pipeline in northern Utah.
But they would "not necessarily" occur every year, Wheatley said.
"We continually analyze our assets and seek to pay taxes in line with the fair market value of those assets."
Union Pacific, which covers 23 Western states, said the railroad's valuation in Utah was actually first challenged as too low by multiple Utah counties in 2007, leading to nearly six years of expensive litigation.
County Commissioner Summers estimated the legal cost to the counties of that fight waged through the Utah Association of Counties to be more than $1 million.
"Union Pacific has been part of the Utah economy for nearly 150 years," UP spokesman Aaron Hunt said in the statement issued from the company's corporate communications office in Roseville, Calif. "Our capital investment in Utah was more than $290 million between 2007-2012. We look forward to being a major part of Utah's economy for years to come and are pleased this case is now resolved."
Contact reporter Tim Gurrister at 801-625-4238, firstname.lastname@example.org. Follow him on Twitter at @tgurrister.
BOX ELDER CORPORATE REFUNDS
* Union Pacific tax refund ordered by state Tax Commission Dec. 16: $935,000 estimated for the years 2007, 2011, 2012 and 2013 total. Payment expected this month.
-- Box Elder County School District loss from the refund: $660,000 est.
-- Box Elder County Corp. loss from the refund: $169,000 est.
* June 2013 refund paid for Ruby Pipeline, owned by Houston-based Kinder Morgan Inc.: $937,998 after tax commission reduced its assessment for 2012.
-- Box Elder County School District loss from the refund: $678,198.
-- Box Elder County Corp. loss from the refund: $177,147.
* State Tax Commission original 2012 assessment of Ruby Pipeline in Box Elder, Cache and Rich counties: $887 million.
* Adjusted 2012 assessment after Kinder Morgan challenge: $780 million.
-- Refund from Cache County: $149,530.
-- Refund from Rich County: $107,704.
Sources: Various Box Elder County departments and officials, Kinder Morgan media relations.