Ameren Missouri will try to persuade the Missouri Supreme Court its natural gas property was assessed too high in 2013, and its subsequent $17 million tax bill was too high.
If the high court takes the case and reverses prior rulings that say the tax assessment was correct, county taxing entities would stand to lose around $600,000. Jefferson City Public Schools would lose most of that money - about $400,000.
Meanwhile, the cost to the county to defend it and the taxing entities that could be adversely affected if Ameren were to win, primarily the area school districts, has grown.
At Tuesday's County Commission meeting, Jefferson City attorney John Ruth, who has been involved in the county's defense in this case, told commissioners it normally takes 120 days for a case like this to get through the high court.
Cole County Circuit Judge Jon Beetem in August rejected Ameren's claim its property had been overvalued and upheld the values set by Cole County Assessor Chris Estes, the county's Board of Equalization and the State Tax Commission.
Similar decisions were handed down in circuit courts in Butler and Cape Girardeau counties. Ruth said they hope the Cole County case will be joined with the Butler and Cape Girardeau cases since all three are similar in nature, and that would speed up the appeals process.
Ruth said 16 counties filed suits against Ameren. Two other cases are awaiting rulings in circuit courts, and the other 11 cases are still waiting oral arguments.
If Beetem's ruling is upheld, county and school officials said, it would free up approximately $600,000 in Cole County, two-thirds of which would go to the Jefferson City Public Schools. Because the money has been contested, the school district has been writing budgets without the funds. If the district receives it, it will be one-time money that couldn't be used for salaries but could help with technology needs.
For 2013, Estes' office determined Ameren's natural gas operations in Cole County were worth about $53.3 million in the real estate market, for an assessed value of $17,040,760.
"We're required by statute to value everything at market value," Cole County Assessor Chris Estes said, "and you can't take an IRS depreciation schedule and determine market value on real estate."
Beetem noted Ameren said its property should be valued at $20,498,505, based on a simple calculation of the company's reported original cost less depreciation, based on the IRS Modified Accelerated Cost Recovery System (MACRS) table.
Ameren originally appealed to Cole County's Board of Equalization, which upheld Estes' determination.
Ameren then appealed to the State Tax Commission, in a case that ultimately involved challenges to the assessments in 16 of the 25 Missouri counties where Ameren has natural gas distribution equipment and systems.
Last Oct. 20, the Tax Commission upheld the assessments made on Ameren 's property in Cole and the 15 other counties.
Ameren sued the Tax Commission in Cole County and several other courts where the other counties are located. Beetem held a hearing June 13 on the Cole County case.
"Simply said, the State Tax Commission found the evidence submitted by (Ameren) to be less credible than the evidence offered by (Estes)," Beetem wrote. "The State Tax Commission is entitled to do just that."
Estes noted Ameren also has appealed the assessments for 2014, 2015 and 2016.
Ruth said Tuesday the costs for those appeals remains undetermined, but the amount the parties agreed to pay for the 2013 case will be exceeded.
At that time, the total defense cost for all 16 counties was estimated at $1 million. Of that amount, Cole County was to pay $236,000. The County Commission agreed to pay half that amount, although county government wouldn't be affected by these cases, and the rest of the amount was to be paid for by the taxing entities, mainly the school districts, since they stood to lose the most if Ameren won its appeal.
Ruth told commissioners they should know more about the status of the upcoming cases by the end of the month. Then they will have a better idea of how much more defense costs will be needed.
For the immediate future, commissioners said they will pay the defense costs. At some point, they may need to talk with the school district about helping with those costs.