The Moran Township School Board, meeting Monday, September 18, discussed the results of a draft audit from Anderson, Tackman and Company, which shows the school is in the black by $241,000 for the 2005/2006 school year. The positive balance is important to the school because energy companies, which claim to have been overtaxed on their assets in recent years, continue to file lawsuits against m u n i c i p a l i t i e s which collected revenue from them. In Moran Township, much of this revenue was used to help fund Gros Cap school, and now the district will have to pay the money back.

An attorney from American Transmission Company has informed the township that the company plans to file a lawsuit with the Michigan Tax Tribunal over taxes the company paid between 2002 and 2006.

In response, the school board is preparing to restrict approximately $50,000 of its fund balance to repay an estimated $35,000 to American Transmission Company, and the board is also anticipating repayment of approximately $5,000 to Edison Sault Electric Company and $10,000 to Cloverland Electric Cooperative.

Gros Cap School Superintendent Bill Peltier said the need to pay American Transmission Company was "unexpected," but it will not affect the operation of the school.

"It impacts the fund balance, and it hurts the school, sure," he told The St. Ignace News, but unless Gros Cap is surprised by more problems of this kind, "we'll get over it," he said.

"This is why having a fund balance is so critical," Mr. Peltier said at the meeting. " You just don't know."

Once filed, the suit will go before the Michigan Tax Tribunal, but a delay of several months is expected, said board president Janice O'Boyle, because a Dow Chemical Company case is currently occupying the Tribunal. When Dow's suit is settled, Mrs. O'Boyle said she expects the American Transmission suit against Moran Township to proceed quickly.

American Transmission has offered to settle out of court, said township supervisor Jim Durm.

The township board held a special meeting to discuss the matter Thursday, September 14.

Mrs. O'Boyle attended the meeting on behalf of Gros Cap School. The meeting was also attended by township assessors Richard and Cynthia Oliver and Hudson Township Supervisor Al Garavaglia.

Mr. Durm said the township plans to make a counter offer to American Transmission. The board will offer to settle for a lesser amount, he said, but the township has not yet decided what it is willing to pay. Action is expected at the November township meeting, Mr. Durm added.

Moran Township Treasurer Sue Dionne said several cases involving energy companies have been settled already, but Moran Township is expecting more. Currently, the township is only dealing with American Transmission, but Cloverland and Edison Sault are expected to file suits as well and the township is especially concerned about a potential suit by Enbridge Energy, which is expected to generate a repayment request similar in size to American Transmission's request of approximately $35,000.

Since the school system received the largest amount of tax money collected from the company, it will be the hardest entity hit, Ms. Dionne said.

To give the district time to set aside money, "We'd like to delay these repayments as long as possible," she told The St. Ignace News.

Ms. Dionne added that the figures under discussion are "ballpark estimates" and don't include interest and penalties that could add to the total owed by Moran Township and Gros Cap.

Repayments to energy companies in Michigan is widespread. In recent years, a host of companies have disputed the amount of taxes paid to municipalities, saying that the method used to calculate their taxes was flawed. They have won case after case.

The lawsuits center around financial tools called "multipliers." Multipliers are part of a method used by assessors to determine the value of personal property and to generate appropriate taxes.

Over time, assets such as American Transmission's pipelines in Moran Township depreciate in value, and lower taxes are generated based on calculations made using multipliers. American Transmission, and many other companies, claim that municipalities have used incorrect multipliers in recent years.

Ms. Dionne said the proper depreciation schedule is currently being used and added that the township hopes to settle these longstanding problems soon.

"We'd like to see this end in 2006," she said.