Public schools in Big Horn County have missed out on nearly $250,000 in tax revenue from a Hardin coal-fired power plant, one of the area's largest taxpayers that is delinquent by more than $2 million.
The unpaid tax bills from the 116-megawatt Hardin Generating Station also drains county operations, the city of Hardin and its development district of expected revenue, according to records reviewed by The Gazette.
And while a law passed this year by the Montana Legislature grants the county some additional power to try to recoup the money, officials have made no such move so far.
The power plant is owned by Rocky Mountain Power, an entity that was set up to construct the plant, which opened in 2006.
The plant was exempt from paying taxes for eight years as part of a bond agreement with Hardin to build the infrastructure needed to support the plant.
Its most immediate corporate parent is Colorado Energy, which operates the plant and makes tax payments to the county. The company's outstanding bill is $2,140,854.49 for 2014 and 2016, according to Big Horn County Treasurer Jody Guptill.
Colorado Energy also hasn't paid on another parcel that's part of the plant but assessed separately. About $156,000 is owed for 2015 and 2016.
No payment had been made as of Tuesday, Guptill said.
That includes a total of $247,584 that would have gone toward public schools in the county. The money was destined for transportation, building, retirement and general funds, among others in the school district.
Those tax payments also would have contributed to various county government functions, including $31,246 for public safety and $27,549 for the general fund.
The city of Hardin has missed out on $135,125 in tax revenue from the plant, which sits in the city's industrial development district, the records show.
In September 2016, the Colorado Energy paid $798,679 to the county to cover its 2015 taxes. It has one of the biggest property tax bills for a single entity in the county—accounting for as much as 12 percent of the county's overall tax revenue.
"It's probably the largest one we have," Guptill said.
Local governments now have the power to seek a judge's order to recover large sums of unpaid taxes.
A law passed earlier this year allows taxing jurisdictions to sue delinquent taxpayers who owe more than $250,000. Missoula state Rep. Kimberly Dudik carried the bill, HB 516, and Gov. Steve Bullock signed it in May.
Missoula County utilized the new law to sue the owners of the former Smurfit-Stone mill in Frenchtown over a $1.2 million tax delinquency.
As part of the suit, the county also sought an injunction to prevent transfer of the property by the company, M2GREEN, the Missoulian reported. County officials worried that taxpayers would have to cover the cleanup cost if the county assumed a tax lien on the mill site.
The plant is under consideration as a federal Superfund site due to the industrial pollution that remains there.
There's no lawsuit in the works to recover unpaid taxes in Big Horn County, an area that has seen an economic downturn alongside the coal industry.
Within the last year, Hardin Public Schools considered reaching out to community members to help pay to repair its pool facility, which had fallen into disrepair. Officials cancelled a state swim meet in Hardin because of the facility's condition.
The county has been looking for ways to pay for additional jail space. Voters rejected a bond proposal in November.
County Attorney Jay Harris said that he has not received any inquiries about the power plant's unpaid taxes. He referred The Gazette to Lance Pedersen, the county commissioners' legal counsel.
Petersen said that commissioners hadn't discussed the matter with him but they may review options in the future.
County Commissioner George Real Bird III said on Monday that the delinquent tax issue came up once before during a joint meeting with Hardin city officials, but there has been no move to recover the funds.
Colorado Energy has not returned repeated requests for comment. The company is owned by Heorot Power Holdings, a subsidiary of Beowulf Energy. Inquiries to Beowulf were also not returned.
Rocky Mountain Power in Hardin has no affiliation with the Utah-based power utility with the same name.
In 2006, the city of Hardin issued about $12 million in bonds to build infrastructure to support the plant. The repayment of that debt was to be drawn from tax revenue paid by the power plant as part of a tax increment financing district.
As part of the deal, the plant was exempt from taxes for eight years. During that time, Rocky Mountain Power and its parent company, Bicent Holdings, filed for bankruptcy. When it emerged, the plant's market value plummeted.
Without tax revenue, the city hasn't been able to service that debt. The bond debt is the responsibility of private bondholders and not local taxpayers.
The majority of Colorado Energy's unpaid taxes would have stayed in that TIF district — about $1.4 million. But officials have said that due to the low market value, the tax payments wouldn't have been enough to make minimum debt payments.