County, Keystone settle on damages

Marion County commissioners reached a $431,043 settlement for road repair Friday with TransCanada Keystone Pipeline.

The payments were for damage caused by the company’s heavy trucks and equipment during construction this year of the oil sand slurry pipeline from Canada to a refinery at Cushing, Okla.

Bill Smock, Keystone project manager, told the commissioners that his company was prepared to offer $374,423 to repair and rebuild roads, including Remington Road (also known as the Pilsen Road), from 290th south to the county line, plus $26,620 for the public benefit “to spend in any way you see fit.”

In exchange, Smock said Keystone wanted a “hold harmless” agreement for the company that would exclude any more liabilities for road repairs unless the company was to come back to do work in the future.

Commission Chairman Randy Dallke said the road and bridge department estimates it will take another $90,000 to coldpatch potholes and prepare Remington Road to get through the winter.

He said he thought the commissioners would be prepared to settle if Keystone would cover $30,000, roughly a third, of that cost.

Smock left the room to make a phone call, and came back saying Keystone would pay the additional $30,000 if the county approved the settlement agreement.

With that, and with assurances from county attorney Susan Robson that the agreement looked suitable, the commissioners voted 3-0 to approve the amounts and the agreements.

Although Holub approved the agreement, and praised Keystone’s work through the county, as did other commissioners, he later said in the meeting that the settlements were small compared to the $3.8 million estimated as Marion County’s share of tax revenues at current annual levy rates had the state not exempted the company.

John Riggins, construction engineer with the firm of Kirkham Michael of Omaha, Neb., determined the $374,423 cost for doing Remington Road, which was accepted by the county and Keystone.

In a prepared statement, he said, “I would like to make sure to point out that a 2-inch overlay over what is currently in place will likely not address the issues in the long term.

“I feel that repairing the blowouts with full-depth patching and addressing the ruts with microsurfacing is the best and most cost-effective method to repair the roadway back to its condition prior to it being used as a haul route.”

Road and Bridge Director Jim Herzet and the commissioners stressed throughout the meeting that time is of the essence in even getting Remington Road cold-patched before cold weather comes.

Herzet said road crews must wait until temperatures are 50 degrees and rising for materials to set.

Jim Lorele of Sheehan Pipeline Construction from Tulsa, Okla., said his company had primary responsibility for construction of the pipeline through Marion County, and he has come to appreciate the courtesy and respect for workers shown here.

He said it had been “10 times easier to work in Marion County than in Butler County.”

All three commissioners said it has been “remarkable,” given the size of the project, that they have not had complaints from the public about Sheehan or Keystone.

Bob Brookens of Marion, who is the Kansas House representative for this area, said he thought the road agreement was good for Marion County.

Holub commended Brookens for being at the meeting, and for always communicating with the commissioners about Keystone, especially when they were being ignored by other Kansas legislators, including their own senators, concerning the tax exemption for Keystone.

Holub said he is going to ask the Marion County Commission and the commissions of the other five counties that have sought to overturn the tax exemption to join in seeking a court injunction against it.

Holub said he also wants the counties to ask the Kansas secretary of state to check campaign contributions.

He said some elected officials in Nebraska are under investigation for taking campaign contributions from TransCanada when it is illegal to take contributions from a foreign company.

TransCanada and its Keystone pipeline division are Canadian with offices in Calgary.

Holub said Rep. Carl Holmes of Liberal appeared to lead the effort to give Keystone the tax exemption even though the company still has not asked for it.

Other legislators, such as Sen. Jay Emler of Lindsborg, who represents a portion of Marion County, appeared to be working with Holmes, and refused repeated efforts by Marion County commissioners to talk to them, Holub said.

Holub said it was interesting to hear Jim Prescott, public spokesman for Keystone, say during the Friday meeting that he has been working on the pipeline to cross central Kansas for at least five years before it did.

Holub cited this and numerous newspaper accounts and documentations showing that the pipeline was at least planned in 2005 and before. The Kansas Legislature, with Holmes leading the effort, Holub said, didn’t even do the tax exemption until April 2006.

At that time, Holub said, the legislators involved were saying the exemption had to be granted to induce Keystone to cross Kansas instead of going through Missouri or Colorado to reach Cushing, Oklahoma.

“Obviously,” Holub said, “the facts were misrepresented to us later, or they just plain lied to us. The counties weren’t even informed of it until after it happened, and they dare to criticize the counties or the Kansas Association of Counties for not speaking up.

“Going across Missouri would have cost them a lot of money, and Colorado is way out of the way. If they would have gone through Missouri because Kansas didn’t give them a tax exemption, they would have had to pay Missouri property tax, so what would have been the point?

“A Keystone pipeline running through Missouri to Illinois is not tax exempt, and it was recently built.

“Their contentions that they were doing it to secure gas for Kansas refineries from Cushing were misleading, given that there are Kansas refineries that want out of their contracts with Cushing. The lines to our refineries have not happened.

“They may have done a good job of building the pipeline through here, but something is rotten. Not this many people can get this much wrong.”

Holub said Keystone still has to file for the exemption before the first of the year.

“Maybe we can stop it,” he said.

Holub cited several Kansas counties that would miss out on hundreds of thousands to millions of dollars of tax revenue under the exemption. He said the pipeline had been an $800 million project.

He said it is especially important to stop the exemption now as a precedent because there are indications there may be a second pipeline from Canada to follow on the same route.

Brookens issued a caution,, saying that in some cases legislators who said they knew of the need for an exemption actually only heard testimony about it.

Although Holub acted as the spokesman, Commissioner Bob Hein said he is in agreement with him. Dallke left before Holub’s statement.

Hein said he is disturbed that legislators who have better knowledge now than they did of the tax exemption still aren’t moving to stop it.

Other items

At Friday’s $935,232 payday meeting, the commissioners also:

• heard the sales tax receipt reported for August was $55,934. The amount was collected by the state in September and disbursed to the counties in October.

The collection put the county ahead $20,256 for the year to date compared to the same time last year.

• awarded Cooperative Grain & Supply of Hillsboro a road and bridge area fuel bid of $16,372 for 6,550 gallons of diesel over a competitive bid of $16,519 from Cardie Oil Inc. of Tampa.

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