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Front Page » February 22, 2007 » Business Focus » Different Dollar$: CIB Offers Help to Energy Impacted Cou...
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Different Dollar$: CIB Offers Help to Energy Impacted Counties in Utah

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A pump jack north of the Carbon County Airport and located on federal land pumps gas into pipelines which eventually lead to gas utility companies and on to customers. Each year gas and coal in Carbon County produce vast amounts of money, some of which go the federal government in the form of operating royalties. Some comes back through the state to Carbon County in the form of money to the Carbon County Recreation and Transportation Special Service District as well as through the CIB in the form of low interest loans and grants.

There was a time, not long ago, when if counties had an impact from certain kinds of development, they had to completely stand on their own as far as infrastructure.

That meant a small county, impacted by the development of coal, oil or gas fields, through the use of roads, water, emergency services and anything else it takes to support a rapidly growing industry, was on its own.

The argument was that the county would benefit economically, so why couldn't they handle the costs themselves?

Unfortunately, that just wasn't true. Small, struggling communities, hit with a boom often found their roads torn up by heavy equipment they weren't built to handle, emergency situations arising with poor equipment to handle them, other infrastructure incapable of handling a new, burgeoning population and many other inadequacies.

And while companies paid royalties on what they extracted, most of the money, rather than going to private individuals, went to the federal government which owns nearly 80 percent of the land in Utah, and in many rural places a much higher percentage than that.

But a number of years ago, under political pressure the state legislature created the Permanent Community Impact Fund to alleviate some of these problems.

Mike Milovich, Carbon County commissioner serves as Carbon County's representative on the CIB. Joe Piccolo, mayor of Price, is the representative to the CIB from the Utah Water Quality Board.

The core mission of the fund is to mitigate socio-economic impacts resulting from natural resource development (particularly fossil fuels) on federal lands.

Over nearly two decades this fund, which is administered by the Community Impact Board has supported rural communities needs on an application basis year after year.

Each year the state allocates a portion of its production royalties - collected from Washington, D.C., from the development of non-metalliferous minerals - to the impact fund.

The way the money comes down is somewhat intricate. The federal government collects an eight percent royalty on severed minerals, and they turn over four percent of that to the state of Utah. About 40 percent of that money is awarded to special service districts in the state, and another 40 percent goes to the CIB. The remaining 20 percent goes to various other agencies.

In addition, a small amount of the royalties collected by the State Institutional Trust Lands (state land administered by the State Institutional Trust Land Administration mainly for schools) is also put into the CIB fund.

During the year various government entities, whether they be counties, cities or other kinds of entities apply for funds for specific projects or equipment.

The CIB awards grants and loans to local governments for various kinds of projects including planning, construction and maintenance of public facilities and for the provision of public services.

The money this fund absorbs and distributes is no small amount. Across the state in 2006 the board distributed $85,294,158 and received $86,655,194.

The fund is open for application from most government entities except public schools and higher education.

For Carbon County the fund has been a very good thing, although both Carbon and Uintah counties, which are by far the highest energy producing counties, get a smaller proportion of what they put in than many of the others.

Two double-trailer coal haul trucks pass each other on Ridge Road just south of Wellington on a late afternoon run. Ridge Road was originally built using energy royalty funding monies as a toll road for the trucks between Utah Highway 10 and U.S. Highway 6 . The road was recently paid off by the tolls.

Figures show that Carbon County brought in revenues of $97,556,961 from 2002 through 2006. The state distributed $31,706,012 to the CIB. Of that Carbon received $12,091,057 in grants and $16,164,055 in low interest loans.

On the other hand a county like Kane County contributed $247,424 to the state coffers and only $80,413 of that went to the CIB. In those years however, Kane received $1,356,629 in grants and $5,555,000 in loans.

While that money is awarded to government entities, its impact in the community at large is great.

In the past couple of years projects like the new exhibit center at the fairgrounds, the new ambulance garage and road maintenance shops which are both located on Airport Road, the new Helper swimming pool and the Division of Natural Resources building on which construction commenced on last week, bring jobs and business to local enterprises.

Many smaller grants other than brick and mortar projects also add to the county. New equipment for public safety organizations, equipment for communications and many other types of projects are also funded by the CIB.

The board that makes decisions about the funding awards is made up of 11 people, many of which are from the energy producing areas of the state. The chair of the board is from the Department of Community and Economic Development. Board members include the state treasurer, a representative from the state transportation commission, and one each from the state board of water quality and state board of water resources. Also included on the board is a representative from the five county association of governments (representing Beaver, Kane, Garfield, Iron and Washington counties), and one each from Sevier County, Carbon County, Uintah Basin Association of Governments (Duchesne, Uintah and Daggett) and Uintah County.

Carbon and Uintah counties get their own representatives because the two counties are the largest producers in the state.

Money awarded is based on need, but often the way it is awarded is important.

"We prefer to have money that is going out be loans as much as possible," said Mike Milovich, Carbon's representative on the board. "We try to keep the grants at between 38 and 43 percent of the money given out and the rest we put into loan awards."

The CIB meets once a month, but sets up the awards based on trimesters, with the first meeting in a trimester being a project review meeting and the last meeting of the trimester being the a prioritization and funding meeting.

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