Treasurer Brita Horn meets coal company officials in Denver
October 5, 2016
Steamboat Springs — Sounding a note of optimism, Routt County Treasurer Brita Horn told the Board of County Commissioners Oct. 5 that she and her legal counsel met with Peabody Energy officials in Denver Oct. 4 and talked about the terms under which the coal mining giant could pay about $1.8 million in overdue 2016 taxes with interest and fees.
"Our conversations were cooperative and productive," Horn read from a prepared statement. "We had an engaging conversation that gave a pathway for good faith settlement discussions … I believe the conversations will continue in the same spirit. All parties at the table have agreed to not communicate on the substance and particulars of our discussion, and they are confidential until we all reach an agreement."
However, the commissioners were not satisfied with her report, and the treasurer declined to provide them with any detail.
Peabody Energy, saddled with enormous debt, filed for bankruptcy protection in federal court in April. And after a federal judge cleared the company to pay its taxes, Peabody announced in late July it would act swiftly to pay property taxes to local jurisdictions. However, the judge's ruling made no mention of interest payments attached to the overdue taxes, and Horn took the stand that she is bound by Colorado law to require payment of interest and taxes at the same time.
The result has been a standoff with some small taxing entities here, with several depending heavily on property tax revenues from Peabody's Twentymile Coal Mine and waiting for their money.
"Have you and your attorneys considered that the authority of the federal bankruptcy judge overrides state law and you could follow the order of the bankruptcy judge?" Commission Chairwoman Cari Hermacinski asked Horn.
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"What I believe is happening is that there are two differed sides to this and how we interpret" the situation, Horn responded. "We believe we are handcuffed to the statutes that say you have to take full payment (including interest and fees) and can't accept partial payment."
Commissioner Tim Corrigan asked Horn about the status of Peabody's 2016 taxes payable in 2017.
“Does your counsel have an opinion on our ability to collect post-petition (post bankruptcy filing) taxes and interest?" he asked. “Are post-petition taxes subject to the bankruptcy?"
"My understanding is they will be paid when the bills are sent and when the taxes are due," Horn responded.
A significant thread to the story is the fact that Peabody's Twentymile Coal Company, southwest of Steamboat Springs, is a major employer in both Routt and Moffat counties and the single largest property taxpayer on the county's diverse tax rolls.
Twentymile's environmental manager Jerry Nettleton, who often acts as a spokesman for the mine, was in the audience Wednesday but did not make any remarks.
Hermacinski asked Horn to consider the dispute in the context of the high interest payments Twentymile is paying on the overdue taxes.
"Not having to pay 1 percent interest monthly on $1.8 million would be beneficial to our local coal mine," Hermacinski said, comparing the monthly interest of $18,000 accruing to Peabody, which she presumes is being assignedd to Twentymile, to a payday loan.
A woman in the audience told Hermacinski she admires Horn for sticking to state law.
"As a single mom, if I didn't pay my taxes on time, I'd get the same treatment," the woman said. "I think what (Horn) is doing is great."
"If you were paying interest of 1 percent on $1,000 a month, it would be a big deal for you," Hermacinski responded. "That's a pattern of abuse. I wouldn't expect that to happen to a single mom, and I wouldn't expect it to happen," to a company.
Commissioner Doug Monger said he intends to ask Colorado Counties Inc. to work with the Colorado County Treasurers and Trustees Association to draft a sample piece of legislation that would change state law to allow anyone, or any company in bankruptcy, to pay its tax bill and engage in a payment plan for interest only. He hopes the draft could be considered by the legislature in its 2018 session.