Routt County prepares for July 20 ruling on Peabody’s ability to pay outsanding property taxes
Steamboat Springs — Routt County Treasurer Brita Horn pulled out her cell phone July 12 as she exited the Board of Commissioners’ hearing room and discovered a text from her attorney Steven Klenda, informing her that he had filed a “proof of claim” on behalf of the county that day with a federal bankruptcy court.
“See? I’m doing my job,” Horn said out of hearing of the county commissioners.
A federal judge is expected to decide July 20 if Peabody Energy will be allowed to pay its delinquent property tax bills to taxing entities large and small across the country, including 20 in Routt County.
And the proof of claim is deemed vital to establishing the eligibility of the local taxing districts. They range from the West Routt Fire Protection District, which is owed $120,800, to the South Routt Library District, owed $30,438.
Tom Lillie, president of the library district board, told his fellow board members Tuesday they would probably have to defer their ambitions to build a new library while drawing from their 2015 fund balance of $370,840 to continue operations in Oak Creek and Yampa.
“At this point, we have to watch our spending and maybe pare down some of the things we can cut,” Lillie said. “We can’t change (the budget for) salaries, unless we cut hours of operation. And if we cut hours, we’re just killing ourselves.”
Commissioner Tim Corrigan, who last week helped the South Routt School District obtain a $1 million loan from the Colorado State Board of Education to offset the majority of the $1.04 million in property taxes owed to the district by Peabody, said filling out the form for the proof of claim with the bankruptcy court was simple and straightforward.
“It seems to me the only real issue at hand is what I view as the immediate need to fill out this three-page, very, very simple form for a claim for property taxes due Routt County,” Corrigan said.
But the text message from the attorney in Denver also plugged into a related issue Horn and the commissioners had just been jousting over Tuesday.
Earlier this year, the Board of Commissioners authorized Horn to extend a $2,000 retainer to the Denver law firm Klenda, Gessler and Blue to advise her.
Horn said Tuesday she was asserting her statutory authority as treasurer, charged with collecting taxes on behalf of taxing entities in the county, and by extension, empowered to retain her own counsel in regards to Peabody.
The commissioners want to retain their own legal counsel, Kutak Rock, to advise it on Peabody bankruptcy issues. Horn contends it would be more fiscally responsible for the commissioners to rely on her law firm for advice.
“I think we have a good faith difference of opinion,” Horn told the commissioners Tuesday. “You’re saying I don’t have the right to use my own attorney.”
Later she said she “won’t back down” on the issue.
Board of Commissioners Chairwoman Cari Hermacinski told Horn the commissioners are not seeking to challenge Horn’s authority, but if she intends to spend more than $2,000 with Klenda, she needs to submit a supplemental budget request.
“All we’re contemplating today is retaining an attorney to advise us on claims that are outside the scope of your office,” Hermacinski said, using road maintenance agreements Peabody has executed with the Road and Bridge Department as an example.
What the treasurer and the commissioners seem to agree on is the importance of officials at the courthouse taking the measures needed to ensure that when a federal bankruptcy judge decides whether to give Peabody permission to pay the outstanding portion of its 2015 property tax bills, local entities are eligible.
Steamboat Today published an Associated Press report July 9 that quoting a spokesperson for the beleaguered coal industry giant saying: “Peabody is a long-time employer in Routt County, and we pride ourselves on being a good neighbor. We’ve been made aware of the difficult situation caused by property tax payments missed … and have asked the court to authorize payment of property taxes.”
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