MWCD to recommend reduction of annual property assessment

April 16, 2014

Property owners could see a reduction beginning next year in the amount of the annual assessment they pay to the Muskingum Watershed Conservancy District (MWCD) to ensure the system of reservoirs and dams operates safely and efficiently. 

Because of increased revenues from the MWCD’s oil and gas leases in the Utica Shale development, the conservancy district’s staff will recommend to the MWCD Board of Directors during a regularly scheduled meeting this Friday (April 18) that the Board should take action soon to reduce assessment collections starting in 2015. Any action taken by the Board will not eliminate projects currently under way or planned that are funded with assessment dollars, since the MWCD will use revenues from the oil and gas leases to supplement the assessment fund at current collection levels. 

Last year, the Board directed staff to review the annual assessment paid by the owners of nearly 500,000 parcels of properties in the MWCD’s 18-county region for consideration of any adjustments in the amount collected based on income received from the MWCD’s oil and gas leases. The assessment, which has not been adjusted since it originally was levied in 2009, must be approved and reviewed annually by the Board of Directors.

“The MWCD Board and staff have developed a very deliberate, pragmatic strategy for use of the funds from the oil and gas leases that allows the MWCD to invest in its public-use facilities for long-needed upgrades and to consider a reduction in the annual assessment collection,” said John M. Hoopingarner, MWCD executive director/secretary. “As responsible stewards of the 54,000 acres of MWCD-owned public property in Eastern Ohio, it has been the MWCD’s goal from the onset of the Utica Shale development to use these dollars to maximize the benefits to the public we serve.” 

MWCD officials have briefed some of the region’s legislators and business leaders about their planned recommendation that will be presented to the MWCD Board of Directors, and have received a very favorable response and feedback.

“Ohio’s shale play and the growth of the oil and gas industry in the southeastern part of our state offer tremendous economic opportunity for the residents of that region, who now stand to benefit from increased revenue going to the Muskingum Watershed Conservancy District,” said State Rep. David Hall, R-Millersburg. “I was pleased to learn that the increased revenue to the MWCD will translate to reduced property taxes for residents of that area. I fully support the MWCD’s effort to improve and protect the system of reservoirs and dams in the Muskingum River Watershed, and I commend its administrators’ judicious use of oil and natural gas revenue to fund the district’s projects and priorities. The MWCD’s decision to use oil and natural gas revenue to reduce its property tax – and give those tax dollars back to the people of that area – is a wise use of public funds.” 

“I have met regularly with the MWCD administration over the past few years and learned about the much needed investments that they plan to make at the MWCD parks and recreational facilities,” said State Rep. Al Landis, R-Dover. “I am especially pleased that by discussing a reduction of the assessment collection starting next year, the MWCD will be extending the benefits from the oil and gas development in our region by reducing the amount of taxes that property owners will pay in Eastern Ohio. This has been an important issue within our district. I consistently have challenged the MWCD to look for ways to improve our area even beyond the protection that the system of reservoirs and dams offers for people and property, and this is a very important step in that direction.”

“I am pleased that the MWCD staff is making this recommendation to the Board of Directors to consider an assessment reduction for property owners,” said State Sen. Lou Gentile, D-Steubenville. “I also am continuing to work with the MWCD staff to encourage ways in which the MWCD can partner with local political subdivisions in a way that will permit for strategic infrastructure investment and development through use of the oil and gas revenues. I am especially interested in this process since much of the oil and gas development is occurring right here in the district that I serve, and I understand that we need to identify ways for many of our communities to realize benefits from this investment in our area.” 

“The oil and gas development has been a strong source of new revenue for the MWCD and I have heard plenty over the past year about their plans to improve the MWCD’s public recreational facilities with these funds,” said Sen. Troy Balderson, R-Zanesville. “These are worthy projects, but it is time that the public that is served by the MWCD receive some of the benefits from the oil and gas dollars, too. I am very pleased that the administration and Board of Directors of the MWCD are considering to reduce the conservancy district’s assessment collection from property owners in our region. This is a wise step to show that there are public benefits available from this industry that extend beyond the properties where drilling activity is occurring. It is a wise move to offer any type of tax relief when it is available, and I am pleased that the MWCD is prepared to do this with its assessment.”

The MWCD has entered into three leases for Utica Shale development for its property at Clendening Reservoir in Harrison County in 2011, at Leesville Reservoir in Carroll County in 2012 and at Seneca Reservoir in Guernsey and Noble counties in 2013. A lease for MWCD property at Piedmont Reservoir in Belmont and Harrison counties is expected to be considered for approval during the Board’s meeting this Friday. 

To date, the MWCD has earned $77.8 million in signing bonuses for the leases it has entered into and about $3 million in royalty revenue. The funds have been used to pay down the MWCD’s debt, improve public access and to begin planning and work on a $160-million plan to upgrade the MWCD’s recreational facilities, including its lake parks, campgrounds and marinas that it operates.

“The conservancy district finds itself in a different position today than it did several years ago when it began collections of the assessment to begin work on the many needed projects to ensure the continued effective operation of the system of reservoirs and dams,” Hoopingarner said. “We believe it is not only prudent, but a responsibility of the conservancy district to return some of the benefits the oil and gas leases have generated for the MWCD to the property owners in the form of a reduction in their annual assessments.” 

The MWCD collects about $11 million annually in assessments from property owners in the Muskingum River Watershed. Assessments are collected through landowners’ county property tax statements, and the funds legally must be used to pay for projects and programs that protect the operation of the system of 16 dams and reservoirs that were constructed nearly 80 years ago for flood reduction and water conservation benefits in the Muskingum River Watershed. Nearly 95 percent of all property owners subject to the assessment pay the minimum annual amount of $12 per year.

The MWCD serves as the federally required local cost-share sponsor for the work that has been identified at several of the system’s dams owned and operated by the U.S. Army Corps of Engineers (USACE). Projects are under way at both Dover and Bolivar dams in northern Tuscarawas County, others are planned and the entire project plan at the dams is projected to cost more than $600 million and the MWCD share is estimated to be up to $137 million. 

In addition, the MWCD has spent assessment funds on shoreline stabilization projects at the MWCD lakes, planning for dredging of the lakes that will begin later this year, grant funding for area communities for projects that encourage flood reduction and water quality improvements and other programs. Assessment revenues by law cannot be used to pay for projects that enhance or improve the MWCD’s recreational programs and facilities, and all expenditures must be covered by guidelines stipulated in the Amendment to the Official Plan of the MWCD that was approved in 2005 by the Conservancy Court and the Board of Directors.

The MWCD collects assessments from owners of property in all or portions of the following counties: Ashland, Belmont, Carroll, Coshocton, Guernsey, Harrison, Holmes, Knox, Licking, Morgan, Muskingum, Noble, Richland, Stark, Summit, Tuscarawas, Washington and Wayne. 

The MWCD has managed oil and gas leases on its properties for its entire 80-year history as a part of its overall natural resources stewardship program. Oil and gas leases developed by the conservancy district have served as a model for other owners of public property considering strategies for management of leases that provide for revenues to enhance public benefit and services while ensuring the highest level of environmental protections.

The MWCD, a political subdivision of the state, was organized in 1933 to develop and implement a plan to reduce flooding and conserve water for beneficial public uses in the Muskingum River Watershed, the largest wholly contained watershed in Ohio. Since their construction, the 16 reservoirs and dams in the MWCD region have been credited for saving an estimated $10.7 billion worth of potential property damage from flooding, according to the federal government, as well as providing popular recreational opportunities that bolster the region’s economy. A significant portion of the reservoirs are managed by the MWCD and the dams are managed for flood-risk management by the federal U.S. Army Corps of Engineers (USACE).

For more information about the MWCD, visit www.mwcd.org and follow the MWCD on Facebook and Twitter.

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