A tax increase for the refinery?

Dan Wever brings up an interesting point:

Something I do not understand.  Looking through some old records I have, I found that the EPISD paid Western Refining Company  $5,432,688.29 in June of 2013.  This was a payment that a lawsuit Western Refining won required the EPISD to pay back taxes that had been collected for them.    I tried to find out the whole story in the newspapers but only found that is 2014 the company was evaluated at 1.8 billion and the company said that this was way out of line and was suing again.  Then last week we were told the company had been sold for 6.4 Billion. 
I wonder just how much tax money was lost because of the court and appraisal people’s inability to evaluate this company’s proper tax rate.   
All of the taxing entities should go back to court and try and get their millions of dollars back that they  had to repay since 2008.  Also, we should look at the payments to the Company in Austin that does this type of appraisal and try to get our money back, something like $340,000 a year. 
What am I missing on this deal?
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Western owned several refineries and many operations.  Tesoro paid $6.4 billion for more than just the El Paso Refinery.  The deal undoubtedly also included compensation for future profits.
I doubt that any of the taxing entities will be able to re-open the old lawsuit.  It has been settled.

That having been said we should hope that there is a way to look under the covers of this deal between two publicly traded companies.  The corporate lawyers and accountants have probably done a good job of combining the numbers so that it will be hard to tell what they valued the El Paso refinery at.  Then again they may have slipped up.

Any increase in taxable value of the refinery will probably only benefit the taxing entities in future years.

In A dollar here, a dollar there we wrote about a current school board member’s inability to do some simple arithmetic.  She had written that an increase in the refinery’s value from $280 million to over a billion dollars was “about a 200% increase”.

We deserve better

Brutus

10 Responses to A tax increase for the refinery?

  1. Fred Borrego says:

    Years back around 2010 when I first became a board member of the CAD Western defining was a huge problem trying to get the refinery appraisal . They would always contest it and when it was settled they got their setlled money back with 15% interest on top. Not only did they not pay their fair amount of tax, they still got taxpayer money interest on top. It was written in state tax law and they took full adavantage of it. A board member discovered this and we moved to change the law. We finally got that law changed and now we only have to pay 3%
    On the last year that I was on the CAD board we hired some top notch company that appraises refineries, it got back with an 1.2 billion appprasail. Western went nuts and started wringing letters to CAD board members and city officials and made a big stink on the media. Keep in mind that taxes have to be settled and approved so that all taxing entities by this cad can set their budgets. We at the cad had to settle for 386 million. A reason that was explained to us is that we were at their mercy because there is not another refinery around here to compare with.

    Now that western has been sold we can really have a very good amount of what that refinery is worth.

    It was sold for 6.4 billion with 1.7 in debt. Remove the debt and you have 4.7. Divide that with 3 refineries that they have and western being the biggest, I believe that western in El Paso is worth about 1.2 – 2 billion dollars

    Will the current CAD board have what it takes to represent us el pasoans or will they be intimidated by the rich and powerful

    It is of my opinion that this is a perfect time to bring western to the table and demand they pay their fare share as each and every homeowner pays

    One other thing, Western has a yearly health fair at their facility where people can go by and be administered different medical tests, yet Year Round they Poision us with all their noxious fumes and chemicals they release un to our air !

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    • JP Morgan says:

      The math doesn’t work that way. You’re confusing enterprise value with property or asset value. A company like Western is sales for more than the value of its assets.

      The problem is pretty simple. Western has the financial resources to vigorously fight the CAD appraisal. CAD always throws in the towel, saying it can’t afford a sustained legal battle. It’s worth every penny that Western spends because of what they save.

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    • investor says:

      Also, Western’s assets consist of more than 3 refineries. They own pipelines and convenience stores, and more. There is not a profitable business anywhere that does not contest it’s value when it comes to taxes. The taxing entity does not win in most of those cases. Having said that, El Paso’s CAD is particularly inept.

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  2. Deputy Dawg says:

    List of all Western Refining Properties in El Paso and appraised values: http://www.epcad.org/Search?Keywords=Western%20Refining&Year=2016&Page=0&PageSize=0

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  3. Deputy Dawg says:

    EPISD can only be concerned with the value of the property in it’s district, not the value of the company. WR has many more assets besides the refinery south of the freeway.

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  4. mamboman3 says:

    Does anybody need more proof of Paul and Alejandra’s greedy shenanigans? They cry for tax breaks and get them, but do we get any breaks?

    Like

    • anonymous says:

      Some people love being viewed as philanthropists, but they give with one hand and take with the other, even when it means taking money from public schools, influencing school district decisions to benefit their real estate development projects, or increasing the tax burden on other businesses like hotels to pay for ballparks to be used by for-profit businesses owned by those same philanthropists.

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  5. abandon hope says:

    Property appraisal for tax purposes is totally different from the value of a company, which includes property, existing contracts, personnel, expertise, current prices and everything else that goes into running a company.

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  6. Fuzzy Math says:

    To calculate 200% they must be using that new math they are teaching the kids these days. We will all learn more about this new math when EPISD starts delivering projects from their latest bond issue.

    Like

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