Officials look to bring in money
COLUMBUS, Ohio – Local officials and state lawmakers from Eastern Ohio are continually searching for ways for area municipalities to cash in on the oil and gas explosion.
After all, this is where the action is taking place.
Recently, Ohio Rep. Jack Cera introduced H.B. 134 and while the legislation is in its infancy, if passed, it would go a long way to helping local cities and towns.
H.B. 134’s premise is to “amend section 743.05 of the Revised Code to allow a municipal corporation to transfer funds received under contracts for the sale of water for use in well stimulation to the general fund of the municipal corporation.”
As it currently stands, any money made by a city or town’s water department must stay within the water department fund.
This is true no matter the state of the water fund nor the state of the municipality’s general fund.
H.B. 134 would change that should a particular community have and subsequently take advantage of the ability to sell water to fracking companies.
“It grew out of a meeting I had with (Cathy Davison) the city manager in Steubenville,” Cera admitted. “It basically amounted to finding other revenue sources for the cities for the oil and gas development.
“It would give local governments the ability to take some of the money generated by the sale of water for general fund purposes.
“A lot of these communities’ water funds are flush with water while the general fund is struggling.”
Some towns, like Barnesville and Martins Ferry, have sold mineral rights to companies, receiving sizable checks in the process. Not every town is as fortunate to have the excess land.
Most of the revenue local governments have gained locally from the industry, thus far, has come in the form of sales tax.
The towns don’t receive that directly. What Cera and his seven co-sponsors are trying to accomplish is provide municipalities the ability to find others way to pump dollars into the general fund.
This is paramount given the continued decrease in local government funding coming out of Columbus.
Currently, not many towns have major contracts, if any, with companies seeking to purchase water.
The transportation costs for trucking water from town out to the well site can be expensive. But once well sites are being placed closer and closer to towns like Martins Ferry and Bellaire, those same companies are going to move past the general inquiry stage into the purchasing stage.
“We’ve talked to some companies but the expense in water is the transportation,” Martins Ferry Mayor Paul Riethmiller said. “We’ve had some preliminary conversations with people.
“They’d actually prefer to run a water line right out to the well site.
“But right now, they are drilling out in the country and don’t want to truck that water all the way out.”
When the time comes, Riethmiller said Martins Ferry is positioned nicely to be a leader in water sales for fracking purposes.
The town’s water plant is operating at about 40 percent capacity of what it’s capable of providing. The city has eight wells and only three are running currently.
“We have plenty to sell if anyone is interested, whether that is raw or treated water.”
Because of the replacement of two filter beds at the plant and the numerous water line breaks plaguing the city, any water sold in Martins Ferry would need to be put back into the water fund.
But towns like Bellaire, for instance, could benefit greatly.
When clerk Tom Sable gave the state of the city’s finances a few months ago, the water department seemed to be doing fine and Village Administrator Dan Marling and his crew’s efforts at recouping water debt owed to the village has proven fruitful.
The general fund, however, is another story. The police department has received one raise during the last decade and given current general fund totals, that isn’t likely to come any time soon.
The selling of water, under the new regulations that H.B. 134 would create, would be a boon to the village’s general fund.
Hughes may be reached at firstname.lastname@example.org