Sevier County Facing 70% Property Tax Hike as Coal Monies Dry Up

Wellington Coal Mine in nearby Carbon County. Image Credit Utah Governor's Office of Energy Development

Wellington Coal Mine in nearby Carbon County. Image Credit: Utah Governor’s Office of Energy Development

Casualties mounting in the War on Coal

In arguably what is one of the most rural and beautiful valleys in all of the American west, an ugly reality lurks behind the smiles, social pleasantries, and the traditional work ethic of its more than twenty thousand residents.

This tranquil little valley has endured a monthly suicide within its small population for the past fourteen years and that grim statistic may not change anytime soon. Now, increasing economic pressures appear to be closing-in fast.

As those in community leadership roles continue to search for an enduring solution to this morbid problem, recent economic misfortune, coupled with past mistakes, would indicate that social stress may actually increase in the immediate future.

Recent History

Even before the autumn of 2008, when Sevier County faced turbulent opposition to its support of America’s coal industry, the winds of change began to buffet the area’s dominant revenue stream — and the state’s main source of cheap electricity.

A group of engineers and investors calling themselves Sevier Power Company had filed for a planned unit development overlay, a type of zoning variance allowing the future construction of a small, 240 megawatt, coal-fired “merchant” power plant in Sigurd township.

It’s one-square-mile containing 2,000 people in the middle of picturesque farmland. It’s also completely surrounded by mountains. In 2008, Sigurd became a sort-of “ground zero” for the nation’s so-called, “War on Coal.”

With predominantly single–family residences, hundreds of acres of alfalfa and an airshed free of metropolitan air pollution, Sigurd also is home to a large power substation offering easy access to the grid. It is less than 10 miles from the headquarters of Canyon Fuel, LLC, which operates a major coal mine east on Interstate 70 in Salina Canyon. The little town seemed the perfect place to generate electricity for a power hungry state and nation.

Public Combustion

As the residents educated themselves on the potential liabilities of having a “merchant plant” churning coal toxins and fly ash 24/7/365 in their valley, the significant economic benefits began to give way to serious discussions about health hazards and alternative and renewable power generation sources (in adjoining counties like Millard and Sanpete) as more desireable economic drivers. The political rhetoric culminated in a referendum during the national election of 2008, mandating specific voter approval of any such generation facility in Sevier County. The Utah State Supreme Court made a ruling putting the referendum on the 2008 ballot with only days to spare.

The developer subsequently changed their plan from coal to natural gas fuel and the permit to build the power plant still lingers. At the deadline for this article, no substantial effort to begin construction has occurred nor is any planned. A potential buyer for the packaged proposal was identified in Texas but that firm pronounced Sevier Power’s plans “too small.”

Absent a buyer for any power generated with the old proposal and without an industrial-sized gas line providing fuel, Sigurd and county residents began to breathe easier as life went on, almost like normal.

The coal from the Sevier County mine still rumbles to market and to existing, older power plants. And in addition to jobs at the mine, coal still provides trucking jobs in Sevier County …for now.

But it is not as quiet as many would like. The truckers hauling to older power plants in Moapa, Henderson, Four Corners in the south and Emery County to the north, are now threatened by ongoing county plans using taxpayer monies to develop a 43 mile rail spur from Levan in Juab County to Salina. It appears that the feudal lord of old King Coal is still able to issue demands to county commissioners who are willing to oblige — and to ignore the current realities of the global marketplace.

But there are additional realities being ignored as well.

Malcolm Nash, Sevier County’s economic director, has prioritized coal for more than a decade in his goal to bring more jobs to the area. Even though Richfield High School (located at the county seat where almost half of the county’s populace resides) and some other buildings are still heated by coal furnaces, many feel as though Nash and the Sevier County commissioners have little to show for their all-eggs-in-one-basket economic development strategy.

The effects of mounting local opposition, changing demographics, and a downward-shifting global market for nineteenth-century energy resources focuses market pressures in the opposite direction. All this in addition to a new, Kentucky-based owner for the mine, one with plans to exploit a different coal field primarily in Sanpete County, Sevier’s northern neighbor.

Without a historical reliance on its agriculture and transportation sectors, Sevier County would have to rely on far more creative and successful business recruiting to offer jobs and government administration revenues. Few have shown interest The vulnerabilities of the 21st century now loom large.

More Very Bad News

With serious and ongoing drug trafficking occurring along its major transportation artery between Los Angeles and Denver, Sevier County has increased their public safety budget considerably over the last several years. It has been their biggest expense.

But it wasn’t law enforcement delivering the bad news this week. No overdose, no hazardous meth lab contamination, no chronic addiction or any of the accompanying sorrows of society’s physical ills. This time, the addiction had been hiding in plain sight.

At their normal county commission meeting last Monday, Commissioners Gary Mason and Garth Ogden had to announce that yet another public stressor had been discovered and it was time to tell the public. A $2,474,000 county budget shortfall was created when extraction royalties continued a precipitous decline, aggravated by the sale of the mine from Arch to Bowie Resource Partners, LLC., the new, Kentucky-based operation, pursuing a different business plan with far less involvement for Sevier County and far fewer school trust monies to the School and Institutional Trust Lands Administration (SITLA).

These facts have exhausted any accumulated reserves in previous budgets, and the county in the very heart of Utah is now in economic trouble.

The net effect? County commissioners announced on Monday that in 2016, property taxes would be increasing by more than 70 percent after enjoying little to no increases for over 20 years. A public hearing, dubbed “the tar and pitchfork session,” is scheduled for Tuesday evening, December 8, 2015 at 7:00 PM. Notices were issued as part of the truth-in-taxation requirements of Utah’s state law.

Why and What Happens Next?

At the most recent commission meeting, Mason was asked why there had been no incremental tax increase covering the 17 years of his elected service to the people of Sevier County. Mason admitted that it would have been hugely unpopular at a time when extraction revenues were solid and plentiful. Additionally, conservative philosophies were tending toward radicalism in Utah and elsewhere — meaning less tolerance for topics like taxation and more criticism of the federal government.

The national defeat of Mitt Romney in 2012 only served to heighten Utah’s sagebrush rebellion with its roots in these rural counties and Western states. The mid-term elections of 2014 revealed more of that anger and resentment where cries of “take our country back” continue to evolve into discussions of local control and federal overreach.

Even though the war on coal may have reached its strategic turning point, there is still evidence that old lifestyles die hard. Four Utah counties (including Sevier) are still attempting to use community impact bond funds to extend western coal markets, pooling $53 million taxpayer dollars for the Port of Oakland’s development. In return, these Utah counties would secure premier loading access for shipping to markets around the Pacific Rim.

The plan has been called incredibly risky and perhaps even illegal by groups like The Sierra Club and Wild Earth Guardians — who note that the monies allocated from community impact bonds are intended for mitigation of extraction industry impacts, not the expansion or preservation of fossil-fuel markets.

One thing seems certain: Macro-factor economics, including rapidly changing market forces and long-term financial impacts to taxpayers, will have immediate and far-ranging effects on the last remaining battles of the so-called war on coal.

Of note, last night the Sevier County Planning Commission unanimously approved a new solar project by Community Energy Solar — designed to power 30,000 homes (20,000 more households than Sevier County has itself) in Sigurd within view of Interstate 70. Groundbreaking on the photovoltaic solar project is scheduled within the next six weeks with completion in November, 2016.

Twitter: @michaelorton @UtPolCapitol

5 comments for “Sevier County Facing 70% Property Tax Hike as Coal Monies Dry Up

  1. T
    December 4, 2015 at 7:48 am

    The solar company backed out

    • Michael Orton
      December 5, 2015 at 6:18 am

      I spoke with Sam Sours who said that they will plan to keep their permit. It sounded like his company was experiencing growing pains and was having difficulties with investors. He cited “bad timing.”
      The takeaway still seems to be too many eggs in one basket for the county. Manufacturing and transportation sectors may have been underserved while the administrators and the commissioners have been placating the tax base from the extraction, “boom or bust” people.

  2. December 4, 2015 at 10:03 am

    Interesting article. A tad biased with sharp attacks towards the public office people without any comments from them though. Drop by sometime. Haven’t seen you since you were editing video next to me in the Washburn building. There’s some good things happening you should hear about.

    • Michael Orton
      December 5, 2015 at 6:37 am

      I was there at the commissioners meeting and interviewed Gary Mason, Malcom Nash and Tooter Ogden, Grayson. I could have used direct quotes but the bias you cite is not there because I didn’t communicate with them. If there’s some perceived “bias,” it is because these are the people who decide how the county will be managed and how YOUR money will be spent.

      I have observed the efforts of the county commission from the days when I asked Doug Peterson about the county’s 25 year plan. That was ten years ago. That plan (and here’s some pragmatic opinion for ya) has been either myopic on its own merits or has not had the visionary execution from career bureaucrats playing a game of musical chairs with the county’s future. The current commissioners are about to pay the fiddler now that the music has stopped.

      As you are well-aware, and as with any BUSINESS, at this stage costs cannot be cut fast enough. For instance, for a county of some 20,000 people, the public safety budget has been bloated WAY out of proportion. The sheriff needs to reduce his ranks. Those jobs cannot be justified with the state’s decision to keep forfeitures where the county once participated in receiving.

      The December 8 meeting should be quite interesting, Grayson. I’m understanding that there will be some voices calling for repentance (if not outright resignation) from their elected officials. Can’t happen fast enough if you’re a property owner in Sevier County.

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