At the Granite County Commissioners meeting, August 5, 2014, John Kinzle and a group of officials from the Montana Department of Revenue (MDOR) presented their determination of Industrial Property Changes – Year 2014. Based on the report, Flint Creek Hydro has been determined to be the Owner and “beneficial user” of the hydroelectric generating equipment for property tax purposes. The MDOR assessed a market value of $4,340,319 to equipment and indicated that the property taxes would be, approximately, $53,000. Roger Kirk and Ben Singer, Flint Creek Operators, appeared late to the meeting and were advised that they had 30 days to protest the determination. The Flint Creek Hydroelectric Plant began generating electricity in March, 2013. The County Commissioners initially notified the MDOR that Granite County was the “owner” of the equipment and, as a public entity, no property taxes should be assessed against the facility. Because of the Commissioners’ “Owner” assertion, the MDOR did not assess property taxes for fiscal 2013-14. The Commissioners representation as “Owner” effectively, means that the County did not receive $53,000 in property taxes for fiscal 2013-14.
The Hydroelectric Plant began generation of electricity in March, 2013. The Amended Agreement, May 24, 2011, called for the Operator to provide a list of the “development costs” within 90 days of the beginning of electric generation. The Operator was in default of the terms of the Agreement and the Commissioners failed to give proper notice specifying the nature of the breach. The “development cost” list was not presented until July 15, 2014. The Operator asked that the “list” be considered “confidential” and not open to the public. The Commissioners referred the question to the County Attorney, but to date there has been no response. If Granite County is the “Owner” of the equipment, the “development cost list” should also have included documentation assigning and transferring ownership. To date, the Treasurer and Clerk and Recorder have not recorded any transfer of ownership of the property. Failure to transfer the assets to the County was, initially, given little consideration by the County Commissioners as a breach of contract. The County has 90 days to review and object to the Development Costs. Failure to object will result in affirmation of the presented Development Costs. The reality is that the Agreement, between Granite County (Owner) and Flint Creek Hydroelectric, LLC, anticipated transferring ownership of the equipment to Granite County. For purposes of the Agreement and FERC License Application, Granite County was identified as the “Owner”. Per the Agreement, pg. 3, “All Equipment installed, and modifications to the Assets, shall be the sole and exclusive property of Owner.” Per the Agreement, pg, 3, the Operator “…shall at it’s sole cost and expense” design, acquire, construct and develop the equipment for the Hydroelectric Facility. The County Commissioners are not administering the Flint Creek Hydroelectric contract consistent with the terms of the Agreement. Lack of enforcement has resulted in the Restricted Flint Creek Trust Fund being reduced to, approximately, $225,000. Property taxes of $53,000 were not assessed for fiscal 2013-14. Payment of construction, operating and government management plan costs are being paid by the County which should have been the “sole cost” of the Operator. The Irrigators have already lost their historical water rights. The County Commissioners are not enforcing the terms of the Agreement as written. The Agreement is for a term of 20 years with a renewal option of another 20 years. If the Commissioners continue to neglect their duties of office, it is likely that taxpayers will bear the ultimate cost for generating electricity which is not being distributed to Granite County. Contact the Commissioners and ask why they aren’t enforcing the Flint Creek Hydroelectric Agreement.