Eagle Point a Thorn in County Budget's Side

Though it’s been shuttered for a year, Sunoco’s Eagle Point refinery continues to cause headaches.

With the company’s pending tax appeals already an albatross around West Deptford’s neck, Gloucester County's freeholders had to keep both it and the Valero refinery in Greenwich in mind when building the budget, as four years of challenged assessments at Eagle Point are due to be heard in June.

The potential of a judgement in favor of Sunoco was one of the justifications the board gave Wednesday night for carrying $23 million in surplus into next year’s budget, since the county can’t set aside money in a reserve for tax appeals.

“We don’t have to physically cut them a check, we just have to have that money in surplus,” Freeholder Director Robert Damminger said.

Attorney John Gillespie told the board having that surplus is the prudent move, given that, between the two refineries, around 40 years’ and hundreds of millions of dollars’ worth of assessments are being challenged–in Valero’s case, going back to 1993, and in Sunoco’s, back into the 1980s.

“The higher the assessment, the more there is at stake,” he said.

Sunoco was assessed about $6.6 million in property taxes in 2010 for Eagle Point, but Gillespie said one of the problems West Deptford and the county face in the appeal is the fact that no refineries have been built in the United States since 1974, making it difficult to pin down an assessment.

Gillespie said, though he’s not handling the Eagle Point appeal, he’s advised governments on similar matters, and said it’s important to be prepared with a plan in place ahead of the actual judgement.

“It would take a crystal ball” to figure out what the county’s potential exposure would be, Gillespie said, but given that there are 40-plus years of assessments being challenged, he said relief, if granted, could be in the millions of dollars.

An appeal by Citgo in Paulsboro saw the county take about a $3 million hit in 2009, Damminger said, which was one of the reasons the freeholders took the Sunoco and Valero appeals in mind when building the budget.

Damminger called the pending appeals a sword of Damocles hanging over the county.

"The prudent thing to do right now is err on the side of caution," he said. "If it does hit, and we get hit hard, and we have spent that money, the money comes directly out of the pocket of the taxpayers. We cannot bond replenish that fund, we cannot do anything."