County revenue that comes from mineral tax valuations often goes up and down. Recently, it went down in a larger amount than is typical, meaning several local entities will take a significant decrease to their funding.
An error in reporting for valuations led to adjustments needing to be made, which will "reduce the amount that's going to be distributed on the next distribution from the treasurer's office in the neighborhood of about $750,000," County Assessor Dave Divis explained.
Divis spoke to the Sweetwater County Board of County Commissioners during the November 19 meeting in order to give them a heads up about the adjustment and explain its cause and effects.
"I just wanted to let you know you're going to have a large adjustment on the next abate/rebate form," Divis said, explaining that the adjustment will technically come before the commissioners on the agenda for the December 3 meeting, but he wanted to explain it beforehand.
The change came because of a mineral tax adjustment from Contango Resources, an oil and natural gas company. The company had a third party accounting firm look at returns from prior years and found there were some errors in previous reports, according to Divis. Putting valuations in the wrong places, such as reporting something as oil when it should have been gas, and then switching it back to the correct place, can reduce taxable values. When things have been reported incorrectly in the past, the current valuations need to be changed to make up for the differences.
"We do these all the time," Divis told the commissioners, explaining that corrections and valuation changes are common. When changes lead to increases in revenue, the Assessor's office simply distributes the additional funding. When they lead to decreases, the commissioners have to specifically approve the change. Divis said he wanted to address this adjustment specifically since it was "larger than expected."
This particular adjustment mostly affects entities in Rock Springs, with Divis explaining that those impacted by it include Sweetwater County School District No. 1, Western Wyoming Community College, Solid Waste District No. 1, Fire District No. 1, Countrywide Weed and Pest and the Little Snake River Conservation District. Divis said he let the entities know about the individual reductions they would see, and they all agreed to take one large reduction off of their next distribution. The entities all had enough funds in their reserves for nothing to be significantly impacted by the reduction, according to Divis.
The county will also face a reduction in revenue from the adjustment, which Divis confirmed to be close to $130,000. Divis pointed out that the county technically has the option of breaking up the reduction and spreading it out over five years, but he said he isn't aware of the county ever having used this option in the past, and he doesn't believe it is necessary now.
"We can just handle this like any other adjustment we receive," Divis said.
Commissioner Robb Slaughter noted that he discussed the adjustment with Assessor Divis. He also added that in his previous role as County Treasurer he saw adjustments happen frequently. However, because this one was larger than usual, he wanted to be sure everyone was aware of what was going on.
Assessor Divis confirmed that Treasurer Mark Cowan knows about the adjustment, and Cowan also stressed the importance of the affected entities being notified, which Divis has already done.
Divis noted that some of the entities wanted more explanation, but none of them expressed any major concerns. He also pointed out that even though the numbers for the adjustment look big, they're often a small piece of what some of the entities bring in throughout the year.
Also, the fact that mineral adjustments are made throughout the year can impact revenue positively as well, Divis added.
"Keep in mind, these don't always go down. There are going to be very large increases as well," he said. "So this $130,000 that the county got shorted this time could be made up later in another notice of valuation change that went the other way. So it just depends on what's going on at the time."
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