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Declining gas valuations concern for area officials
Published 3/8/2011 in Local News
By SHAJIA AHMAD
sahmad@gctelegram.com
Finney County commissioners are making a push to protect a state trust fund that assists counties, especially those in the southwest region, that have taken hits from decreasing gas valuations in recent years.
The Kansas Oil and Gas Valuation Depletion Fund was established by the 2005 state legislature as a resource for counties when future mineral valuations decline and less money is available as a result. Counties that have $100,000 or more in receipts from severance taxes on oil and gas contribute a portion of those to the fund, according to the Kansas Legislative Policy Group.
County commissioners said Monday they plan to communicate with several area state legislators about protecting the fund in the wake of many proposed budget cuts during the current legislative session.
Kansas state legislators currently are negotiating spending cuts for the current fiscal year in the wake of an expected shortfall of $500 million for the 2012 fiscal year.
According to KLPG, a bi-partisan coalition of western Kansas counties including Finney, several counties are approaching sufficient enough valuation declines to make them eligible for trust fund reimbursement. An automatic release of trust funds from the sum that now totals about $11.6 million is triggered for a participating county when that county's mineral valuation has fallen by 50 percent for two consecutive years, according to the KLPG.
"There have been previous attempts at the legislative level to not make that transfer (from counties to the state trust fund) or to divert that money for other government functions," said Doug Smith, a KLPG lobbyist. "We're just concerned that in the future there may not be sufficient money set aside, so we're trying to protect the fund."
In Finney County, oil and natural gas valuations makes up about 30 percent of the county's total assessed valuations and are the second-largest valuation pieces next to real estate countywide.
Last year, the county faced an approximate $46 million drop in valuation figures from 2009 due to decreases in gas valuations.
County Administrator Randy Partington told county commissioners on Monday he is expecting oil and gas valuations to increase a little bit next year, but not by a lot.
"We should have a better valuation in 2012 than in 2011, but we're not going to get back to where we were in previous years," he said.
Finney County Appraiser Mark Low was not available for comment this morning.
According to Grant County Appraiser Tom Fuhrmann, gas valuations in southwest Kansas, which are price driven, have gone from record highs in 2008 to nearly historic lows in 2009.
Fuhrmann, who also works as a county appraiser in Stevens and Haskell counties, said the fairly new fund is important to southwest Kansas counties because many of these counties rely so heavily on gas valuations. For example, in Stevens County, gas valuations make up about 80 percent of the county's valuation. In Grant County, the gas valuation is between 60 and 70 percent of the county's total valuation.
"It makes a huge difference in what happens in these counties," he said.
Stevens County already has contributed about $1.2 million into the state trust fund, and Grant has contributed nearly $923,000, according to the Kansas Department of Revenue. Finney County has paid a total of $717,305 into the state trust.
In other business, the commission either took the following action or discussed the following:
* Commissioners unanimously approved a rezoning request from Roberto and Maria Gutierrez for nearly three acres of their property at 2585 N. Sherlock Road.
The property owners made the request to rezone their property from a rural residential district to a general commercial district to allow for the repair and storage of semitractors and trailers.
Commissioner approved the request on the stipulation that only two semitrucks or trailers be stored and that a six-foot-high fence be placed around the storage area.
* Commissioners unanimously approved a rezoning request of about six acres of property north of Holcomb at the request of property owner Peggy Pettz.
The rezoning approval from agricultural district to suburban estates district allows Pettz to build a single-family home on the property northwest of the U.S. Highway 50 and North Big Lowe Road intersection.
* Commissioners unanimously approved a rezoning request on about six acres of property at 12560 and 12700 West River Road at the request of Richard and Bonnie Knoll and Steven and Debra Guy. The rezoning from agricultural district to suburban estates district bring the property into a conforming residential zoning district, according to planning officials.
* Commissioners unanimously approved a rezoning request from Terry Algrim, the owner of about five acres of property at the southeast intersection of Towns Road and Mary Street. The rezoning approval allows the property owner to place a single-family home on the property.
* Commissioners unanimously approved a waiver to allow Larry Binns, property owner at 1509 W. Mary St., to use a septic tank on a lot that is less than one acre but has access to public water.
Binns is relocating his radiator repair shop from its current location on VFW road, according to documents from the Planning and Community Development Department.
* Commissioners unanimously approved a request from Garden City officials to waive a $2 per ton municipal waste fee at the county landfill during the city's annual spring cleanup.
The city-wide trash pick-up program will be held April 4 through 15. County residents also may be able to dump their waste at a reduced rate during the same week, as they have in past years, pending an official confirmation from County Public Works Director John Ellermann.
The commission meets again at 8:30 a.m. Monday at the Finney County Administrative Center, 311 N. Ninth St.
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