NEXUS pipeline dispute resolved?

CASTALIA — A recent Ohio Supreme Court decision means Margaretta Schools can expect to receive millions of dollars per year following an ongoing legal battle involving the NEXUS pipeline project. The Nexus pipeline carries natural gas across 13 counties from Kensington, Ohio, into Michigan. It began serving customers located in Ohio, Michigan and Canada in 2018. Local districts that benefit from the taxes generated by the pipeline include Margaretta, Perkins Schools and Edison Schools. Margaretta Schools had been counting on the pipeline dollars to help fund the construction of a new school campus that would house pre-K through high school students. The district is one of many northern Ohio school districts still awaiting money from the project — held up after an objection from Lorain County auditor Craig Snodgrass to the settlement amount. Last week, the state's Supreme Court ruled in favor of a state tax appeals board over Snodgrass. Margaretta's superintendent, Ed Kurt, said that the district is in a holding pattern this week as Snodgrass has until today to file a motion to ask the Supreme Court to reconsider. If the auditor does not file to reconsider, the negotiated settlement decided by the tax commissioner will go back in place and NEXUS will pay that amount instead of the smaller amounts it has been paying to Margaretta Schools. Should Snodgrass decline to appeal and the settlement be finalized, the amount of revenue Margaretta would receive annually would vary and decline over time, due to depreciation. But the district, at minimum, is expecting at least $4 million annually, though that amount could end up being higher. From 2020 to 2024, Margaretta Schools was supposed to receive about $8 million per year from the pipeline. But, after Snodgrass objected, they instead only received about $4 million during the appeal process. "From 2020 to 2024, the current year, we were collecting taxes and we've been short paid each of those years," Kurt said. Kurt said after this week, the tax commissioner for the state of Ohio would send notices to the 13 county auditors affected by NEXUS. Those auditors then send notices to NEXUS informing them about the taxes they owe. This means that even after decisions are made at the state level, it will still be months until Margaretta Schools sees increased revenue from NEXUS. Voter approval sought In June, district officials voted to pursue a bond issue as an alternative funding source for a desired pre-K through high school campus. The new-money levy will be on this November's ballots for district voters to approve. The 3.2-mill bond issue will generate $34 million over a 40-year period. This means a $100k homeowner will pay $113 per year. The recent court development will not change Margaretta Schools' decision to be on the ballot. Kurt said there is a lot of money on the ballot but, if it passes, that does not mean all of it must be collected. Kurt said the bond issue will act as insurance in case there are any other delays or inflationary impacts on the project. Each year the district can notify the county auditor if they would like to collect and at what level of collection. The district will only collect on the issue if it experiences a shortfall after applying the funding from NEXUS. "We're asking the community to back us up because we can't afford any more delays because the cost of the project will go above our resources," Kurt said. Added Keegan: "Just because we are levying 3.22 mills does not mean we'll have to collect 3.22 mills. We will only collect the bond revenue if needed because of shortfalls with the NEXUS revenue stream or because of inflation impacts on the total project cost." Keegan said as more information is confirmed, the district will do what they can to keep taxpayers informed. She said the district will rely on its bond council and work with the county auditor's office to determine how to communicate information on the bond. The district wants to construct a new building due to the age of its current ones. Assessments of the district's current buildings show the middle and high school facilities cannot be effectively renovated due to their ages. Prior plans Due to the holdup of the settlement, the project has been delayed for two-plus years. Inflation has also caused construction costs and other financing to drastically increase. In 2022, the project had an estimated price tag of about $49 million. Kurt said the total project will now cost closer to $70 million. About $5 million has been paid for architecture fees, site work and utility work. The district estimates paying another $5 million off of its principal and financing the remaining $60 million. District offiicals believe the project will take anywhere from 18-to-24 months to complete. Work is not expected to resume in 2024, but could pick up sometime in 2025 based on various factors, including whether or not the bond issue passes in November, Keegan said. The district is receiving help from the Ohio Facilities Construction Commission, a state agency that helps schools with construction projects, to help fund the project. Kurt said the support from the commission is another reason the district is on the ballot. To receive the commission's assistance, the district must show progress being made on the building project. Under the district's plan, the commission would cover 38% of total project costs, which — in all likelihood — would exceed that previous estimate. Meanwhile, the levy would cover this funding gap, providing the remaining 62% without the pipeline money in place. Original plans showed the pipeline project providing up to $29 million within the project's first five years.