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Hess has first mediation with City of Tioga over annexation

 

Posted 4/19/16 (Tue)

By Kevin Killough
Can Hess and the City of Tioga come to an agreement on annexation?
The two parties met with a third-party mediator last Wednesday to discuss their concerns and objectives. 
According to city officials, the meeting went well.
“They were very accommodating,” said City Auditor Abby Salinas.
The city announced last spring its plans to annex areas of the city to the east and west, which includes the Hess office complex but not the gas plant.
At a public hearing on the issue last August Hess informed the Tioga Commission of its intentions to protest the annexation and seek mediation in the matter.
“They felt we might harbor some animosity towards them for this, but that’s really not the case,” Salinas said.
According to Commissioner John Grubb, Hess representatives want to understand the reasoning for the annexation and what the annexation would cost the company.
One concern is water rates. Grubb said the company buys water from R&T in volumes about two-thirds to a half the amount of the whole city. 
If the city annexes the territory, the company would buy the water through the city rather than directly from R&T. 
Grubb said the company asked about bulk rates from the city but what the company pays now is less than the city’s rate from R&T. 
Hess is also concerned about how the city’s sales tax would impact the company. Grubb said the city has a hard time getting tax figures from the state for one company.
Since Hess knows how much it pays in taxes, the city requested they come up with figures based on the city’s tax rate. 
The meeting concluded with both sides agreeing to pull together some more information on water rates and tax figures to continue the discussion at a later date. 
Grubb said there is no certainty when that meeting will  take place, but it could be at least four to six weeks away.
Much of Wednesday’s meeting took place in executive sessions since it involved matters of potential future litigation.