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Ray Gammons and Chance Rainer are among the Howard County Volunteer Fire Department firefighters working on an American flag that will be part of tonight's displays during Pops in the Park, which begins at 6 p.m. in Comanche Trail Park. (Courtesy photo/Zach Johnson)
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Testimony Begins In Alon Trial
Tuesday, 19 August 2008
By THOMAS JENKINS
Staff Writer
Alon USA CEO and president Jeff Morris spent nearly three hours on the witness stand Monday morning, as the  petrochemical company's suit against the Howard County Appraisal District alleging inflated tax valuations began.

Amid stacks of black binders and boxes of evidence, both sides in the suit delivered their opening statements to 118th District Court Judge Robert H. Moore III, with attorneys Robert Mott and Sandra Griffin representing the appraisal district and David Huggins representing Alon USA, the owner of the Big Spring Refinery.

In 2007, Alon USA disputed its $320 million tax appraisal, claiming it should only have to pay taxes on approximately $152 million. The $320 million assessment was later upheld by the appraisal district's review board, spurring the company to file a lawsuit.

In his opening remarks, Huggins went over a graph showing the taxable values of the Big Spring Refinery during the past seven years, outlining a dramatic increase in values — and the subsequent taxes — in 2006, when he said they increased 140 percent, and 2007, when he claims values rose nearly 500 percent.

“That's why we're here,” said Huggins, pointing to the graph.

Huggins went on to discuss the differences between market values and other appraisal tools, as well as the use of intangible items in the appraisal process.

“When it gets down to it — down to the bricks and sticks — it's just some concrete, steel tubing and contaminated dirt,” said Huggins.

According to Huggins, the replacement cost of the facility — if the refinery had to be rebuilt from the ground up — has been estimated at less than $1 billion by several experts, while the experts being utilized by the appraisal district puts the cost at approximately $1.6 billion.

Mott defended the values determined by the appraisal district, describing the case as “straight forward.”

“Looking at the price of gasoline these days, I would have thought a jury trial was a good idea,” said Mott. “However, we put our trust in the court ... The plaintiff is going to use a shotgun, 'give us a break' approach. They want us to compare this refinery to refineries in other counties, and this is not allowed by law. It's important to keep that in mind.”

The plaintiff called Morris to the stand, asking the head of Alon USA to recount much of his history dealing with the Big Spring Refinery, including a period on the 1980s when owner Fina all but abandoned the facility.

“We were actually scavenging parts from one unit to another just to keep things running,” said Morris. “The employees at the refinery did their dead-level best to keep it working.”

Huggins' questions for Morris regarding the value of the facility — including how much it was insured for — brought a slew of objections from Sandra Griffin, who is also representing the appraisal district and handled cross examinations Monday.

Morris testified Alon USA currently insures the Big Spring Refinery for $385 million, but was not allowed to testify as to the details of the insured amount because he had not been designated as an expert witness.

Griffin questioned Morris regarding Alon's recent purchase of a refinery in Crotz Springs, La., comparing the refinement of sweet crude at that facility to the refinement of sour crude at the Big Spring facility.

According to Griffin, the Crotz Springs refinery purchase included $333 million in assets and $143 million in working capital.

Morris also testified repairs from a devastating fire that ripped through the Big Spring Refinery in February have already cost Alon USA $285 million, less than $40 million shy of the appraisal district's 2007 valuation.

In addition to a slew of attorneys, Monday's proceedings also drew the attention of local officials ranging from county commissioners to representatives of the college district, all waiting to see how the trial will effect tax revenues for 2006, 2007 and possibly the coming tax year.

According to reports following the filing of the lawsuit, Alon agreed to pay $80 million in taxes until the matter is resolved, leaving Howard County with a shortfall of more than $700,000 and Big Spring Independent School District picking up a $264,000 loss.

Testimony was set to resume Tuesday morning.


Contact Staff Writer Thomas Jenkins at 263-7331 ext. 232 or by e-mail at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Last Updated ( Wednesday, 20 August 2008 )
 
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