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Front Page » September 19, 2006 » Local News » Commission expands county service district
Published 3,304 days ago

Commission expands county service district

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Sun Advocate reporter

Carbon commissioners set out two weeks ago to change how mineral lease monies are utilized in the county.

Portions of federal and state mineral lease royalties are returned to the counties where the funds originated.

At a commission meeting on Sept. 6, county officials indicated intentions to take two steps toward making those funds available on a wider basis than they are now.

When energy developers lease the mineral rights on federal or state land, the companies have to pay a certain amount each year just to have the lease.

When the companies produce, a percentage of royalties is also paid to the state or federal government.

In Carbon County, the royalties total in the millions of dollars, primarily due to the fact that most of the larger coal mining and oil and gas extraction operations in the area lease mineral rights from the government.

The largest portions of lease payments go to the federal government for activities on land operated by the United States Bureau of Land Management. The state government gets a substantial portion of funds as well for operations on parcels managed by the state institutional trust land administration.

The bulk of federal monies is retained in Washington, D.C., and allocated by U.S. lawmakers. However, a portion is returned to mineral producing states. Officials in the states are free to allocate federal mineral lease funds as they sees fit.

In Utah, approximately 20 percent of total federal lease payments is returned to the county in which the revenues originate.

A slightly smaller portion of state monies is returned to the county, with the State Institutional Trust Land Administration retaining the bulk of the related revenues. Fund administrators take an administrative fee and the balance is utilized for educational needs around the state.

Due to the wording of federal and state statutes, the county is limited from taking federal lease monies into its coffers.

If the county were to take federal lease monies directly into its general funds, it would give up more than $600,000 in payments in lieu of taxes. For this reason, local officials created the Carbon County Transportation Special Service District in the late 1980s.

Later, the special service district was expanded to include recreation.

Since it was created, the special service district has taken in more than $37.6 million dollars. A sizable sum of that was used to construct coal haul roads such as the Dugout Canyon Mine Road, the C Canyon Mine Road and Ridge Road.

The roads were constructed as toll roads and, during various periods of time, the funds used for construction will be returned to the special service district.

Another way mineral lease revenues have been utilized has been to offset the budget for various county departments.

Each year, the county allocates funds to different departments in its budgetary process.

The special service district can make payments directly to the county to offset the departments' budgets as long as the payments can be categorized as a transportation or recreation expense.

The county road department, the county golf course and the search and rescue team have been among the departments funded through the Carbon County Recreation and Transportation Special Service District.

The county has reached its capacity for offsetting transportation and recreation budgets. As a result, county officials plan to expand the scope of the special service district.

In addition to acting as an agent to receive federal mineral lease funds, Utah law permits special service districts to fund water, sewerage, drainage, flood control, garbage, health care, transportation, recreation, fire protection, emergency medical, ambulance, jail facilities, street lighting, consolidated 911 and emergency dispatch and animal shelter and control.

Carbon County's special service district already funds recreation and transportation needs around the state. In order to expand those funding areas, county officials must pass a resolution expanding the scope of the special service district.

Commissioners Bill Krompel and Mike Milovich agreed that the county could benefit if the special service district were expanded to include emergency dispatch, animal services, fire protection and garbage needs.

That change would allow the special service to offset funds for the designated areas of government, freeing up funds currently spent at the animal shelter and for the county's share of public safety dispatch.

For years, fire chiefs in the various cities around the county have tossed around the idea of creating a fire protection district.

If it is created, the fire district could be a candidate for funding from the special service district.

The second change the county plans to make relates specifically to how SITLA funds are received by the county.

A recent legal opinion from the Utah attorney general clarified how those funds are handled.

Since SITLA monies are not federal mineral lease monies, they are exempt from certain laws.

Among those laws is the statue regarding the payments in lieu of taxes which the county would forfeit if it took federal mineral lease funds into its general fund.

As a result, the county could take those funds from mineral leases on SITLA land into its general fund.

The SITLA funds can also be used for any purpose in the county, not just the activities or projects specified by the special service district.

The legal opinion gives county officials greater latitude in using state mineral lease funds.

Carbon officials indicated two weeks ago that the county plans to pursue the route provided by the attorney general's legal opinion.

In Carbon County, SITLA funds make up a considerable amount of total mineral lease revenues, since two coal mines and the drilling activities in the Drunkards Wash gas field are primarily on institutional trust lands.

In making the change, Carbon officials will reduce the amount of funding available through the service district, but will make the same funds available to any department of the county.

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