West Deptford Committee Lays Out Sunoco, Coastal/El Paso Scenarios

West Deptford could have to refund as much as $90 million in tax appeals, should the Sunoco and Coastal/El Paso cases end up in tax court, committeeman Sam Cianfarini said in detailing various scenarios Thursday night, including proposed settlements with the two oil companies.

“These are big numbers,” Cianfarini said, warning the township could potentially end up with a junk bond rating, inflated debt and reduced tax revenue with a worst-case scenario, and even a mid-range court decision could hit taxpayers severely.

“We have nothing in reserve,” Cianfarini said, and whatever court decision came down would likely have to get paid out within 60 days, limiting the township’s ability to raise that money through lower-cost means.

“The day of reckoning has come,” he said.

Given that drastic scenario, the township’s professionals—from administrator Eric Campo to special tax appeals counsel John Lloyd—were all in favor of settling, Cianfarini said, a move that would save the township millions both in court costs and actual tax refunds.

Rather than paying out a total of $90 million or $55 million, which would have been the likely court outcome, Cianfarini said, two proposed settlements with the companies would cost West Deptford just $32.4 million.

Instead of worrying about tax increases in the hundreds of dollars, residents would face an initial hike of about $87, just 4.2¢ per $100 of assessed value, according to the scenario laid out by Cianfarini.

And instead of the $15 million settlement agreed to with Sunoco, the township has already talked the oil giant down to $13.9 million, Cianfarini said.

“We tried to negotiate with these folks,” he said.

The settlement would lock in Sunoco’s assessment at at $100 million for the next two years, as well, though Cianfarini acknowledged there’s some risk of Sunoco appealing that assessment again after that period is up.

But potentially mitigating that is the possibility of expansion at the site by Sunoco Logistics, the pipeline and storage arm of the company.

“They want to make more investment in that area,” Cianfarini said.

After the presentation, a number of residents, largely Republicans, fired questions at the committee about the presentation and their votes on the original settlement back in March.

Jeff Hansen, , raised the issue of donations from attorneys connected to both Sunoco and the township committee to the Democrats’ campaigns over the past decade, quoting directly from a piece of campaign literature.

He also questioned why Democrats Denice DiCarlo and Donna Szymborski would’ve voted against the settlement—though Szymborski actually abstained from voting in March—given the potential hit the township faced in a court battle.

“Why would you put our town in jeopardy?” Hansen asked.

DiCarlo said she had several unanswered questions about the settlement, including the difference in criteria used to arrive at the $100 million assessment as laid out in the settlement, versus the county’s $153.5 million assessment of the property.

“You cannot assume I voted no because I disagreed with the presentation,” she said.

Szymborski flat-out accused Hansen of starting his campaign in the public comment session.

“Let’s not stand up here and grandstand,” she said.

Others were more concerned about the timeline; township Republican Party vice chair Denny Forte questioned why things had dragged on for 24 years without a settlement earlier in the process.

Lloyd said there had been several times previously when settlements were discussed—including as late as last summer, though also around the time the refinery shut down at the end of 2009 and beginning of 2010 and even earlier than that, when Sunoco first bought the refinery in 2004.

The reasons for not settling were complex, Lloyd said, but there were times when it seemed as though the township had the upper hand in the fight, which may have prevented a settlement.

“We had a myriad of things happening,” Lloyd said, adding he is unequivocally in favor of the current proposed settlements as laid out by Cianfarini.

Mayor Ray Chintall added that he and Cianfarini went out to meet with Sunoco executives earlier this year during the negotiating process.

“We felt it was important to put a face on Sunoco,” Chintall said.

The committee did not end up taking any action after Cianfarini’s public presentation, which came just about 12 hours after over the township committee’s lack of disclosure about the details of that deal.

“We wanted to make this public as soon as possible,” Cianfarini said, adding they had kept things close to the vest under advice from their legal counsel.

A special meeting has been called for April 17 at 7:30 p.m. to further discuss and take action on the possible settlements.

If settlements are approved that night, they would come in time for the deadline for applications in the May state Local Finance Board meeting.