Fairbanks North Star Borough assembly moves to executive session as TAPS valuation settlement nears expiration

Borough attorney Jill Dolan told the Fairbanks North Star Borough Assembly on July 17 that the borough’s settlement agreement over the Trans Alaska Pipeline System valuation is set to expire at the end of tax year 2025 and recommended a confidential briefing from counsel on legal options.

Dolan, the assembly’s lead attorney on oil-and-gas valuation matters, said the settlement — in place since tax year 2016 and extended through 2025 — fixes certain valuation terms and limits appeals under specified conditions. “The settlement agreement does provide that if the valuation of TAPS is $8,000,000,000 that neither party will appeal,” she said, adding that owners pay taxes based on “a value of 8 and a half billion dollars,” with only a portion of that amount allocable to Fairbanks North Star Borough.

Why it matters: The borough relies on negotiated settlement terms and court-approved valuation methodology when calculating property tax revenue from pipeline owners. Dolan described the standard administrative path for valuation disputes — State Department of Revenue assessment, appeal to the State Assessment Review Board (SARB), and potential appeals to Superior Court and the Alaska Supreme Court — and said the borough uses a cost-approach method (sometimes referred to in the discussion as the Gleeson methodology) that was previously upheld in court.

Dolan told the assembly she expected outside counsel, including lead litigator Robin Bridal and online participant Jack Wakeland, to present a joint confidential analysis of valuation ranges, litigation strengths and weaknesses, and possible outcomes if the settlement lapses. She said some topics could not be discussed publicly and recommended the assembly move into executive session so counsel could offer candid legal advice and receive direction.

On a motion recorded by the clerk as made by Mr. Kress and seconded by Mr. Roterman, the assembly conducted a roll call and approved moving into executive session. The presiding officer noted the vote in favor and asked if any member wished to change their vote; none did. Earlier in the meeting the assembly approved the agenda by a 7-0 vote.

After the vote the assembly recessed to arrange the chambers and ‘seal the doors’ for the executive session. No confidential legal analysis or further public deliberation occurred during the open meeting.

Next steps: The assembly moved into a closed executive session to receive legal advice and to determine how to proceed as the TAPS settlement agreement approaches its end of term.