Energy operators meet with county officials

Lannie Massey, of Encana, speaks with RBC commissioner Ken Parson (foreground), while Mesa county commissioner Craig Meis chats with RBC commissioner chairman Shawn Bolton, and WSCOGA director David Ludlam and RBC commissioner Kai Turner (right).

RBC I Rio Blanco County commissioners and road and bridge personnel met last week with several energy operators working in the county and members of the Western Slope Colorado Oil and Gas Association (WSCOGA) to discuss alternatives to the county’s impact fees.
“We want to create partnerships and lead by example,” RBC commission chairman Shawn Bolton said in his opening remarks.
Before RBC road and bridge director David Morlan spoke about upcoming projects, he announced that the spring thaw weight restrictions went into effect March 7. RBC Roads 5 (Piceance Creek), RBC Road 7 (Strawberry) and RBC Road 21 (Bonanza) are restricted to a 14,000 pounds per axle maximum weight. Morlan said based on data from the past four years they know the restrictions will be lifted on RBC Road 5 April 14 and April 6 for RBC Roads 7 and 21.
Morlan and RBC road and bridge engineer Van Pilaud presented information on the projects identified on RBC Road 5, summarized by RBC administrator Kimberly Bullen:
n Currently the county has 30 percent of the design work done on County Road 5. By June 2012, the county will be at 100 percent design on the 24 projects and will have projects “shovel ready” in anticipation of funding.
n The 24 projects identified do not cover the entire County Road 5 corridor but were selected due to safety concerns and impact on the road. Most of these projects include intersections, corners, crossings and passing lanes.
n In the past, the county has used impact fees to match DOLA grants and will continue to pursue these grants when the fund is again active.
n Construction cost estimates are increasing and take into account additional costs such as ROW, cost of structures, intersection improvements, utility relocation, wetland replacement, etc.
The county implemented impact fees in June 2008 and since that time $9.931 million has been collected. Grants and interest have added an additional $2.94 million. Revenues have continued to decrease from a high of $3.8 million in 2008 to $1.2 million in 2011.
Approximately 93 percent of the impact fees go to the road and bridge department, with the remaining 7 percent applied to administration and the justice center/courthouse project.
According to Bullen’s summary, the majority of the $7.445 million in expenditures has gone to engineering and design of County Road 5 and the reconstruction of 16 miles of County Road 122. In 2012, $5.78 million will go towards County Road 5 improvements and $400,000 will be used for justice center/courthouse improvements.
David Ludlam, director of WSCOGA, said the idea most supported by industry at this time is the pre-payment of ad valorem taxes. Mesa County commissioner Craig Meis of Olson and Associates said industry believes this option can address the impacts of today, representing a partnership with industry and local government, and would identify the demographics of who is using the road. RBC commissioners are concerned about future cash flow for the county using the ad valorem model.
Commissioner Ken Parson presented the concept of a Public Improvement District (PID) and Local Improvement District (LID) to the group and said RBC currently contributes more than a third (38.67 percent) of their mill levy to road and bridge.
Parson said a PID or LID district would allow for a dollar for dollar credit on severance tax for up to 87.5 percent, would require a boundary be defined and determine assessed value, an election by property owners and a mill levy set to generate revenue, which would be kept in RBC versus sending it to the state.
Industry will now do an analysis on the pre-payment of ad valorem taxes and the county will analyze the PID/LID option. Both parties agreed to meet again in April.
“No matter where we go from here, Rio Blanco County is among a select few Colorado counties who understands our business and values our contributions of jobs creation and economic activity,” Ludlam said after the meeting. “So while it’s not possible to agree on everything all the time, this commission is one of best boards in the state in terms of supporting us and working in collaboration. It’s always tempting for companies to take a solo approach to regulation, but our group is full of thoughtful companies who understand we can sometimes achieve better public policy working together. The going is slow but the progress we’re making is undeniable.”
Ludlam went on to say, “During this lull in activity we must continue working together to strengthen relationships in preparation for an inevitable future when Rio Blanco County continues its march towards becoming one of the energy powerhouses of Colorado.”