Funds from mineral leases not expected to meet county’s future budget needs
The Carbon County Recreation/Transportation Special Service District (SSD) finds itself in a very different financial position than it was a few years ago.
Board members are concerned about meeting obligations in coming years.
At last week’s board meeting a discussion to purchase safety nets for the Carbon County Fairgrounds Soccer Fields turned into a discussion about the financial position of the SSD and future appropriations and obligations.
SSD Director Linda Ballard said a moratorium is in place on funding requests, except those that have already been budgeted.
SSD funds come from mineral leases on federal lands. Funds are also received from state-owned lands in what is called “in lieu of taxes.” Mineral lease money goes to the federal government, then re-distributed to the states. The money is then distributed to the Community Impact Board (CIB) and to counties impacted by mineral extraction. Due to law, the county cannot receive the money directly. The county portion of the money goes to the SSD.
Counties and communities meeting specific qualifications can apply to the CIB for project funding. That funding can be used for any purpose related to impacts of mineral extraction. Funding for most of the facilities that have been built in recent years has come from the CIB and from the SSD. Construction of certain roads has also come from the CIB. The CIB gives grants and low-interest loans to help communities cope with impacts from mineral extraction.
At one point nearly all mineral lease money in Carbon County came from coal leases. In the past 20 years a substantial portion of the funds have come from natural gas. In recent years there has been a decline in both coal and gas production in Carbon County. Coal production is a fraction of what it once was.
During the recent SSD meeting board member Larry Jensen, who is running for Carbon County commissioner, said he has received a lot of negative feedback from residents concerning expenditures.
In a later interview, Jensen said the county depends on the SSD for a substantial contribution each year in order to balance the budget. It’s possible, said Jensen, that the SSD might not be able to meet that obligation in future years.
A portion of the money received by the CIB comes in the form of loans. Often those loans are offered at a very low interest, but must still be repaid. Right now, according to Jensen, the County has a debt of approximately $40 million. The first of those loans won’t be paid off until 2024. There are also loans that will be retired in 2027, 2034 and even as far out as 2043. At the current time the county is paying $400,000 annually in interest alone, Jensen said.
Future funding looks bleak, Jensen said. There is some money in reserve, but every funding approval “shortens the length of time the reserves will cover us.”
Jensen also addressed quality of life. While every project makes life better for someone, there is a point where there’s no money and the only option is to raise taxes. The community might be great, but “we won’t be able to live here because taxes are too high.”
An attempt by the commission to raise taxes last year met with significant opposition and resulted in the commission dropping the proposal and opting for major cuts in the budget. That effort resulted in several employees being terminated.
According to Jensen, the future of energy production is a big question. Gas production goes down as gas fields age. Every gas field has a life expectancy. In a few years some of the fields will be at be at the end of their life expectancy. Gas companies could choose to close wells at any time. If that happens, the money coming into the SSD will once again diminish dramatically. If that should happen, Jensen said, the SSD will not be able to meet its obligation to the county.