Funding issues in Belmont County

ST. CLAIRSVILLE – Belmont County Auditor Andrew Sutak gave an update on the county’s progress of pursuing refunding issues relating to the water system.

He noted that interest saving and the term dates were key factors. He said a reduction of terms by about 11 years will save principle interest during the timeframe. The county is also borrowing an additional $3 million for water well upgrades, tanks and the extension of lines. The projected interest rate two weeks ago was 1.25. Currently the interest rate would be one percent, a savings of $7,400.

Sutak noted shortening the old issues from 1992 and 1997, which would have been paid in 2037 and 2032, and paying $2 million down would likely mean a savings of $4.8 million.

Commissioner Matt Coffland noted that factors in the arrangement was that the county qualified for bond insurance.

“This was a major savings for Belmont County,” he said.

Sutak added that the upgrades to the water system were necessary.

Commissioner Mark Thomas noted that the $2 million paid on principle comes from a check received from Rice Energy. Coffland added that 426 acres remain to be leased.

“It makes good fiscal sense,” he said. He also noted ongoing talks with Sanitary Sewer District Director Mark Esposito regarding water and sewer needs. Thomas said these are necessary projects to provide safe drinking water for citizens and businesses.

“We have some major pump station sewage upgrades we need to discuss for this year and next year. The two big ones being the Ohio Valley Mall Exit 218 and the Morristown Exit 208,” he said. “I think we seriously need to look at committing some additional funds and potentially borrowing more money to get these projects, because we are going to run into a point where we cannot accommodate development without these upgrades.”

He pointed out further planned developments such as a new hotel in the mall area that may be built as soon as this year.

Esposito said the mall is the focus area for the moment, although other interests are also potential developments.

“This industry’s coming in to Belmont County so fast that we don’t know where the next boom is going to be. Right now it is around the mall, but tomorrow it could be out at 208,” Esposito said. “We just can’t go out and borrow money and spend money and upgrade infrastructure without us knowing where to do it at.”

“We’ve got a problem, but it’s a great problem. We’ve got a county that’s booming and growing fast,” Coffland said.

He noted that there is little time before they are contacted with a development project and that project’s initiation.

Sutak noted the continuing growth and development. He said there is a time lag between the building of a new development and the tax date of Jan. 1, when the county begins to reap benefits. Sutak said a business must be open a full year, although there may be partial tax bills.

Commissioner Ginny Favede thanked Sutak for his work on behalf of the taxpayers and his input on this decision. She added that the county is currently seeing little to no income from the oil and gas. The auditor collects an ad vallorum tax based on the number of barrels extracted, the year after extraction. There are currently 12 wells being fracked. A year after the fracking the county will receive a very small portion of funds.

“Other than that, the only thing we’re seeing is this increased demand of funds for the infrastructure to support businesses,” she said. “There’s going to be money made out of this business that at this point 80 percent is going to be taken from us and taken by the state.”

She said that many believe 75 percent should be returned locally to offset costs rather than the county take on debt and the state profit. She said that often impacted counties face the onus of taking on the cost of the industry with no revenue coming back.

“That is why the severance tax issue is so fundamentally important to this issue,” she said.

“This will be a major bloodline to all the infrastructure,” said Sutak. “This is our key. If they take it away, like they cut our local government funds, like they took with personal property tax, like they de-regulated public utilities, our tax base for all our political subdivisions had diminished, with nothing new really going in.”

Favede spoke about efforts to capture a portion of the severance tax. She pointed out the current plan of a 2.75 increase in severance tax with 80 percent to be utilized by the state in an income tax reduction, 20 percent sent back to the area, with half of that 20 percent sent to impacted areas via the governor’s NBR. She noted that the Budget Commission does not have a line item in the appropriations.

The impacted counties have met with Sen. Lou Gentile and Rep. Jack Cera with the goal of supporting a resolution for 75 percent of the proposed tax be returned to local government and 25 percent set aside for OENR for regulatory work on idle and orphaned wells, also that the local government and public library funds be held harmless.

“We’re just asking for fair representation for something that’s coming directly from our area,” she said.

DeFrank can be reached at