From the Desk of West Deptford Mayor Ray Chintall,
Deputy Mayor Sean Kilpatrick & Committeeman Samuel Cianfarini
This important decision is whether to approve the tax appeals settlement with the current and previous owners of the Eagle Point Refinery or to go to court with those same companies.
Since 1988 West Deptford has been litigating the Sunoco- Coastal/El Paso Tax Appeals dispute resulting in over two decades of uncertainty for this township’s residents and businesses. Those same residents and businesses want to put this issue behind them so stability can be brought to West Deptford. With this issue settled, West Deptford can begin to attract new residents and businesses creating a vibrant community.
West Deptford has endured 24 long years of litigation with no results. What we do have to show is over $3 million dollars worth of expenses from the past 10 years of litigation. Worse, no money has been set aside in reserve to pay for these tax appeals. It is also important to mention that West Deptford lost our last tax appeals case against Coastal/El Paso for the years 1985 to 1987, resulting in a $4.5 million dollar payout for just a three year period of disputed taxes.1
When looking at past rulings dealing with West Deptford’s Eagle Point Refinery we find the words of Judge Small, the Presiding Judge of the Tax Court, in his decision on Dec. 4th, 2009, stating “there is no question that the proof of value of a refinery, absent a sale, is an almost impossible task,” meaning that the Tax Court would very likely conclude prior sales figures would be the only clear way to determine the actual assessed value of a refinery. Looking back to the last time the Eagle Point Refinery was bought, we find our answer in a January 19th, 2004 article in the Philadelphia Inquirer wherein it is reported that Sunoco bought the Eagle Point refinery for $111 million dollars.2
The decision before your Township Committee is to either accept the settlement without trial, avoiding a costly court case or reject the settlement and end up going to court. This settlement agreement, contrary to rhetoric, is a result of numerous meetings and tele-conference negotiations between these two companies and officials from West Deptford Township. West Deptford would return $13.9 million dollars to Sunoco for the years 2004 to 2011. Also, $18.3 million dollars would be returned to Coastal/El Paso for the years 1988 to 2003. This is down from the initially negotiated $18.5 million amount because of bi-partisan negotiations including Mayor Chintall and Committeewoman DiCarlo. The entire settlement would result in a maximum $87.35 increase per averaged assessed home. However, because the first settlement payment doesn’t become due until 2014, the budget impact could be completely offset by LS Power which will begin paying an additional $1 million dollars in PILOT payments that year. Sunoco would also, as part of this settlement agree to a $100 million dollar assessment for the next two years and West Deptford would likely maintain our current bond rating of A-.
1Philadelphia Inquirer May 24, 1995 article titled, “Court Backs Refund To Refinery- The Appeal Upheld A $4.5 Million Tax-court Judgment Against West Deptford.”
2PhiladelphiaBusiness Journal December 31, 2003 article titled, “Sunoco to buy Eagle Point Refinery for $111 Million.”
If West Deptford were to go to trial, experts have advised us of two likely scenarios. One scenario being the worst guess would result in up to $47.5 million dollar return to Sunoco and up to a $42.5 million dollar return to Coastal/El Paso. In this scenario Sunoco’s likely assessment would drop to $50 million for the next two years and our Townships bond rating would drop to BBB, which is basically junk status. The other scenario, which our experts think is our best guess, results in up to $28.5 million dollar return to Sunoco and up to a $26.5 million dollar return to Coastal/El Paso. Again with this scenario, Sunoco’s likely assessment would drop to $50 million for the next two years and our Townships bond rating would drop to BBB, which again is basically junk status. The worst guess scenario would result in over a $900 increase to the average assessed home in the Township and the best guess scenario would result in over a $550 increase.
These are the facts surrounding the Tax Appeals issue West Deptford Township faces with regards to the Eagle Point Refinery. As you can tell this issue is a complex one which has taken a lot of time to understand and work out so that the best outcome would arise for our township. This is an issue that we have worked on every day since we swore our oath to do our best for the residents of West Deptford. This settlement takes into account all the issues which surround this case and results in the best possible outcome for our residents.
We are asking you as a resident of West Deptford to get involved! This issue can either deliver a huge tax increase to you via the courts, or have virtually no tax impact at all with the settlement. We ask you to look at the facts and choose for yourself. To become more informed on the issues surrounding this case please check out www.fairtaxwd.com. It is time for our community to move forward and attract new businesses and residents. Call (856) 845-4004 and tell Committeewomen Szymborski and DiCarlo to vote YES to this Tax Appeals Settlement. Also, please come out to the July 5th, 2012 Township Committee Meeting at 7:00pm and let your voice be heard as we take this important vote. It is time to move West Deptford Township toward a brighter future.
Mayor Ray Chintall
Deputy Mayor Sean Kilpatrick
Committeeman Sam Cianfarini
The full letter is available HERE.