MWCD Board cuts property assessment payments in half
April 18, 2014
Property owners will see their assessments paid to the Muskingum Watershed Conservancy District (MWCD) cut in half beginning next year.
Members of the MWCD Board of Directors have approved a plan to provide for a 50-percent reduction in all assessment payments from property owners beginning in 2015 by using funds generated from the conservancy district’s recent oil and gas leases of its property in the Utica Shale development to cover project costs normally paid for by the assessment funds. MWCD officials also said during a meeting today (Friday, April 18) at New Philadelphia that they will continue to review periodic financial reports to determine if the reductions will be warranted in succeeding years or if further reductions could be enacted due to revenues produced from the oil and gas leases.
“Through the wise guidance of the MWCD’s Board of Directors, the oil and gas management on the district’s properties have permitted the MWCD to invest in our public-use facilities and recreational areas, and now it is possible to extend those benefits to the property owners in our watershed by enacting this 50-percent reduction in the assessment collection,” said John M. Hoopingarner, MWCD executive director/secretary. “It has been and will continue to be our goal to maximize the public benefits that have been created by the responsible stewardship of the MWCD’s natural resources.”
The assessment reduction will result in an estimated $5.5-million overall cut in the amount of assessments collected in 2015 by the MWCD. The conservancy district instead will use oil and gas funds to fill that gap and ensure that projects to protect and improve the system of reservoirs and dams constructed in the 1930s continue as planned.
The approved assessment reduction also will mean that the owners of commercial and industrial parcels of property who pay the assessment will see an overall reduction of nearly $2.3 million in their property tax statements next year. The MWCD collects about $11 million annually in assessments from property owners in the Muskingum River Watershed.
Hoopingarner said the MWCD has committed about $350 million over the next two decades for its obligations related to upgrades and maintenance for the system of reservoirs and dams in the Muskingum River Watershed and for updates to its recreational facilities. With that in mind, routine financial reviews will be very important and any major cuts in oil and gas revenues could result in corresponding assessment adjustments, he said..
MWCD officials previously briefed some of the region’s legislators and business leaders about the assessment reduction plan, and have received a very favorable response and feedback.
The assessment reduction was part of a two-part strategy the MWCD staff discussed with Board members during the meeting. Hoopingarner said that the MWCD is developing a watershed project funding program that will involve establishment of a revolving loan fund that also will use the MWCD’s oil and gas revenues as its startup funds.
“What we envision overall is to work with an appropriate agency to establish the fund for access by the local township, municipal and county governments and other agencies in the MWCD region for important projects to promote and protect water quality and flood reduction,” Hoopingarner said. “The MWCD recognizes the ever-increasing need for these projects in order to protect and enhance the quality of life and economy of Eastern Ohio.”
MWCD officials expect to prepare a complete plan for the funding program for review and consideration by the Board in upcoming months.
During the meeting, the Board also approved its fourth large-acre lease for Utica Shale development by voting to enter into an agreement with Antero Resources of Colorado for more than 6,300 acres of MWCD property at Piedmont Reservoir in Belmont and Harrison counties. According to the terms of the lease, the MWCD will receive a signing bonus of $15,000 per acre plus a share of 20 percent of the royalties from the production of the lease. Another 300 acres of the Piedmont property is being finalized and will be added to the lease later.
MWCD officials said they expect up to two well pads to be located on MWCD property according to the terms of the lease at Piedmont, with other well pads located on adjacent properties. They also stressed the environmental safeguards built into the lease and said that many of the lease’s stipulations were developed through input from a public meeting held about the lease process in January at St. Clairsville.
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 has entered into three previous 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.
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.
Last year, the Board directed MWCD 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.
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, 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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