Township Meeting :
The 4 March 2009 meeting dealt mainly with new equipment purchase and rental options, COG services, and SALDO options.
The bids for a new backhoe/loader were opened in the presence of the bidders. A used Case 580M was selected as it was much lower in price and satisfied all requirements.
The advantages of renting a gravel crusher and rental options were discussed.
The town will now conduct it's own building code inspection services under a contract with Building Code Inspectors instead of COG. This action will reduce fees to residents. COG will continue to enforce Sewage codes for the town.
Copies of the county SALDO were obtained last month. A Supervisor met with Bob Templeton to discuss town-county cooperation on use of the county SALDO. The discussion of SALDO options concluded that the town would use the county SALDO rather than form a planning commission and adopt their own. The county planning commission is considering inviting town representatives to working sessions on a quarterly basis.
An engineering company provided their plans for examining potential gas well pad sites in the township along Route 706.
The February NTC meeting was briefly discussed. The NTC was informed of our decision to not zone and interest in withdrawing from the controlling Intergovernmental Cooperation Agreement for Multi-Municipal Planning and Implementation (zoning). They indicated they would review the status of the agreement for the next meeting.
NTC Meeting ( at Choconut ) :
The 19 March 2009 NTC meeting was fairly brief. Bill Stewart noted that there was little current activity of interest to most members and suggested meeting bi-monthly instead of monthly. A majority of the township representatives showed a preference for quarterly meetings and that decision was made. The next meeting will be 18 June 2008 in Jessup.
Liberty Township announced that they had voted to not zone. Bruce Griffis confirmed that Jessup had voted to not zone; he also stated that no decision had been taken on SALDO.
The NTC 2008 Audit reports and the March 2009 Treasurer report were provided. The Treasurer report continues to show $59,639 balance in SALDO-Zoning Funds; this is unchanged since Carson Helfrich returned the funds in December 2008. Ms. Kublo asked whether the towns could use those funds for their own SALDO or other uses.
The answer was interesting. The residual funds are being reviewed to determine how much is DCED funding which must be returned to the State Treasury, and how much is from township matching funds. The matching funds would go back to the towns based on their initial contribution. The initial match contributions were set by a formula involving town revenue and size. The basic match was 70% DCED to 30% Town.
So, some funds may be due to Jessup and the NTC – DCED review should be followed.
I asked Bill Stewart what they had decided about changing the NTC Intergovernmental Cooperation Agreement, since he had taken that action at the February meeting. He deferred to Bob Templeton who informed us that he had consulted Carson Helfrich. According to Carson, the Agreement had never been signed by all the townships.
In other words, the Agreement had never been properly executed in the first place. Bill Stewart suggested any town that had signed and was concerned should rescind the agreement in a town meeting and inform the NTC. This is good advice, and we should take it.
The revelation that the key intergovernmental agreement was never properly executed is amazing. It is equally amazing that the NTC could not answer the question without recourse to Mr. Helfrich through Mr. Templeton.
It also raises the question whether either the Comprehensive Plan or the Zoning Ordinance were ever legally valid since they were put together under the auspices of a Joint Planning Committee which was not properly formed under the unexecuted (and invalid) Intergovernmental Cooperation Agrreement.
This interpretation of invalidity is consistent with Carson's letter of 13 January 2009, in which he states: “This zoning ordinance as now designed can be adopted by any of the NTC municipalities independent of adoption by the others.” Implicit is the need, under the MPC, for a town to form its own planning commission which then reviews the proposed ordinance as a template and adopts it as their own town ordinance.
I suggest Jessup rescind the “Agreement” and inform the NTC by letter that we rescind it, are not interested in a joint SALDO, and want reimbursement of the funds due us from the residual Zoning – SALDO funds balance.
A citizen suggested the NTC hold a public meeting to discuss gas pipeline routes crossing town borders, safety, and minimal land disruption issues. The ensuing discussion covered pipelines along road right-of-ways and who should be in the approval process since there are safety and setback issues as well as landowner property rights involved.
Some supervisors thought they should have supervisor-only meetings before letting the public in on their thinking. Ironically, it escaped them that a citizen raised the issue and much thoughtful discussion came from the citizens. It seems a missed opportunity to improve citizen-supervisor relations, although a better place for these discussions may be the proposed county gas committee.
Sunday, March 22, 2009
Saturday, March 21, 2009
Gas Committee Tasks?
The Susquehanna County Commissioners have charged the Economic Development Board with making recommendations for a County Gas Committee. In an earlier post, Here , I offered suggestions and information sources to facilitate discussions about what a county gas committee might do.
This post discusses more specific action areas and tasks for a committee. They are presented in categories of actions, with questions, to stimulate discussions and decisions on priorities and tasks.
Public Data Access and Awareness - Some townships get advance notice from engineering companies about planned well pad sites and from gas companies about likely pipeline routes and road crossings. An engineering company provided their drill pad plans to my town prior to our last meeting. Do all towns get similar advance notice? Is it also the case for planned pipeline routes? Is this information and usage coordinated across towns and county offices? Could well site drilling and pipeline route planning information be aggregated by the County for sharing with towns and citizens, perhaps by a public website? This information could be used by citizens as well as town and county planning commissions.
Joint Contingency Planning and Reaction - DEP requires gas companies to place a plastic cylinder at each well site containing their contingency plan and data in the event of an emergency. Are these plans provided and coordinated with Town and County Fire and EMA offices? Is or should the County lead in joint contingency planning between towns and fire departments and adjoining districts? Should this be done also for pipeline routes since the Texas experience is that more fires and emergencies arise from the pipelines than from the wells?
Town Road Access Permissions - Who should give approval for thumper trucks to “thump” or gather seismic data along the public roads or for companies to lay pipelines along road right-of-ways? Who should be made aware of thumper or pipeline routes in advance of permission? Should landowner permission be a prerequisite to approval since they do own the land under the right-of- ways? Pipelines create extensive safety setbacks and restrictions impacting the landowner use of his property. Seismic exploration data can cover a thousand or more feet from the road and should not be gathered without landowner permission or contractual agreement. New county-wide policies or guidelines may be needed to protect property rights as well as public safety.
Paying for Exploitation Services - Gas companies make extensive use of town roads and require other services as indicated above. These new burdens should be paid for by the companies but there are no tax methods to do so at county/town level. Should the County participate in or form alliances with other counties for legislation to get a substantial portion of gas royalty income tax or severance tax allocated back to the counties and towns that produced the gas? If the gas producing counties and legislative districts combined on this issue, they would be a powerful voice if not a majority in both house.
Of course, it is up to the Commissioners to decide what they want a Gas Committee to do and to select the right mix of talent to accomplish the mission. However, some of the above ideas represent important areas of town and county coordination. If they are not being addressed already by existing offices, the committee may a good focal point for establishing coordination and actions among the towns and the county offices.
This post discusses more specific action areas and tasks for a committee. They are presented in categories of actions, with questions, to stimulate discussions and decisions on priorities and tasks.
Public Data Access and Awareness - Some townships get advance notice from engineering companies about planned well pad sites and from gas companies about likely pipeline routes and road crossings. An engineering company provided their drill pad plans to my town prior to our last meeting. Do all towns get similar advance notice? Is it also the case for planned pipeline routes? Is this information and usage coordinated across towns and county offices? Could well site drilling and pipeline route planning information be aggregated by the County for sharing with towns and citizens, perhaps by a public website? This information could be used by citizens as well as town and county planning commissions.
Joint Contingency Planning and Reaction - DEP requires gas companies to place a plastic cylinder at each well site containing their contingency plan and data in the event of an emergency. Are these plans provided and coordinated with Town and County Fire and EMA offices? Is or should the County lead in joint contingency planning between towns and fire departments and adjoining districts? Should this be done also for pipeline routes since the Texas experience is that more fires and emergencies arise from the pipelines than from the wells?
Town Road Access Permissions - Who should give approval for thumper trucks to “thump” or gather seismic data along the public roads or for companies to lay pipelines along road right-of-ways? Who should be made aware of thumper or pipeline routes in advance of permission? Should landowner permission be a prerequisite to approval since they do own the land under the right-of- ways? Pipelines create extensive safety setbacks and restrictions impacting the landowner use of his property. Seismic exploration data can cover a thousand or more feet from the road and should not be gathered without landowner permission or contractual agreement. New county-wide policies or guidelines may be needed to protect property rights as well as public safety.
Paying for Exploitation Services - Gas companies make extensive use of town roads and require other services as indicated above. These new burdens should be paid for by the companies but there are no tax methods to do so at county/town level. Should the County participate in or form alliances with other counties for legislation to get a substantial portion of gas royalty income tax or severance tax allocated back to the counties and towns that produced the gas? If the gas producing counties and legislative districts combined on this issue, they would be a powerful voice if not a majority in both house.
Of course, it is up to the Commissioners to decide what they want a Gas Committee to do and to select the right mix of talent to accomplish the mission. However, some of the above ideas represent important areas of town and county coordination. If they are not being addressed already by existing offices, the committee may a good focal point for establishing coordination and actions among the towns and the county offices.
Susquehanna County Population Update - Decline Really !
The Census Bureau has just released their latest County level population estimates through July 2008. In this post ( Jessup Jottings: Susquehanna County Population Explosion - Really ?? ), I discussed the incredibly high growth projections for Susquehanna County made by the Penn State Data Center(PSDC).
So let's see how those projections stack up to the US Census Bureau latest estimates, released on 19 March 2009. You can find them here ( Population Estimates ) for Pennsylvania and scroll down for Susquehanna County. Remember that PSDC was projecting a straight line growth from the then July 2007 Estimate of 41,115 ( already a 2.6% decline from 2000) to a 2010 projection of 48,523, reflecting an 18% increase in 3 years, to a projected population of 77,530 in 2030.
Unfortunately, the Census Bureau sees a different reality. It revised the 2007 estimate down to 41,024 and set the 2008 estimate at 40,831. This reflects an 8-year decline of 3.3% . The trend is down every year since 2000. To reach the PSDC projection for 2010 requires a 2-year growth of 7,692 people or about 19%.
We don't seem to be going in the right direction. According to this Wall Street Journal article ( U.S. Migration Falls Sharply), we should not expect to see much inbound migration due to the economy. Nor should we expect much from the "gas rush" since prices have dropped by 2/3rds and the uncertainty about land values seems to be slowing the land development process.
So, until the PSDC can can up with some serious fact-based reasoning, I'll stick with my bottom line about their projection : it's "Incredible" - as in literally unbelievable.
So let's see how those projections stack up to the US Census Bureau latest estimates, released on 19 March 2009. You can find them here ( Population Estimates ) for Pennsylvania and scroll down for Susquehanna County. Remember that PSDC was projecting a straight line growth from the then July 2007 Estimate of 41,115 ( already a 2.6% decline from 2000) to a 2010 projection of 48,523, reflecting an 18% increase in 3 years, to a projected population of 77,530 in 2030.
Unfortunately, the Census Bureau sees a different reality. It revised the 2007 estimate down to 41,024 and set the 2008 estimate at 40,831. This reflects an 8-year decline of 3.3% . The trend is down every year since 2000. To reach the PSDC projection for 2010 requires a 2-year growth of 7,692 people or about 19%.
We don't seem to be going in the right direction. According to this Wall Street Journal article ( U.S. Migration Falls Sharply), we should not expect to see much inbound migration due to the economy. Nor should we expect much from the "gas rush" since prices have dropped by 2/3rds and the uncertainty about land values seems to be slowing the land development process.
So, until the PSDC can can up with some serious fact-based reasoning, I'll stick with my bottom line about their projection : it's "Incredible" - as in literally unbelievable.
Sunday, March 8, 2009
The Key NTC Intergovernmental Agreement
I have been asked about the key NTC agreement covering zoning and what should be done about it since several townships have voted to not zone. This subject was raised at the 19 February 2009 NTC meeting and should be discussed in future meetings. This post will adress that question directly and reference my earlier blog posts; in particular, the synopsis is useful for those who can't get a copy from their township.
The key NTC agreement is the "Intergovernmental Cooperation Agreement For Multi-Municipal Planning and Implementation". The synopsis is here: Part 1 : NTC Intergovernmental Zoning Agreement- Summary Excerpts. My initial comments are here: Jessup Jottings: Part 2 : NTC Intergovernmental Zoning Agreement. They were written in early January '09 and more recent thoughts are in this post (Jessup News Post - February 2008) summarizing the February NTC meeting.
This key 12 page agreement was established for Joint Planning and Implementation (Zoning) and establishes a "Joint Planning Committee" of elected officials to oversee all actions related to the Comprehensive Plan and any implementing Zoning and land ordinances. In essence, the agreement ties each town to that NTC Planning Committee before they can make or change land ordinances.
Don't get confused by other intergovernmental agreements to create joint planning commissions ( e.g., betwen Rush and Jessup) to follow up on zoning. There's a big legal difference in the MPC between “Committee” and “Commission”. That mistake was made by some at the NTC meeting and caused some confusion. Those "Commission" agreements were not signed and are not at issue.
This agreement was signed by all 12 participating Municipalities and was essential, under the state Municipal Planning Code, to the legality of the NTC Comprehensive Plan which all 12 towns did adopt and sign. It would be essential for Joint Zoning if we were to do that. Being in the agreement is not the same as being in the NTC - Montrose is not participating in the agreement or the Joint Planning Committee, but is in the NTC.
The agreement's status is less clear if some towns decide to zone independently in a coordinated way following the same Joint Comprehensive Plan, while others opt to not zone.
The agreement specifically covers "Implementation " of the joint Comprehensive Plan with the Joint Planning Committee (NOT a "Commission" ) acting to assure towns keep their "implementation" ordinances “Consistent" with the Plan. That could be interpreted to mean any land ordinances, triggering Committee reviews of ordinances by the non-zoning towns.
For towns that are not zoning, it makes no sense to be in the agreement and be required to have their land ordinances reviewed by that joint Committee. It also seems undesirable for the zoning towns to have to go to a committee of non-zoners for approval of changes to their zoning ordinances. So, I think both sides need to reconsider the agreement; terminate it and redo it for those who want to be tied together in joint or coordinated zoning.
The agreement states that a 100% vote is required to change the agreement and 75% vote to terminate it. If a town wants to withdraw on their own, they need to pass a resolution after which there is 1 year waiting period during which the towns stays bound to the agreement ( and I think still a "voting member"). This made sense for Joint Zoning; but not now. The agreement is overtaken by events and should be changed to fit the new facts. The easiest way is to terminate and rewrite it for the willing zoners.
Members of that “Joint Planning Committee" ( elected officials) seem defensive about keeping the agreement in force and their status on it. These options may get discussed at the next NTC meeting. There may be reasons why the agreement should continue; but it seems dangerous for towns to remain in an agreement which seriously limits their freedom of action to make their own land ordinance decisions.
If any forms of joint ordinances or zoning actions are desired in the future, those action should be taken anew and openly.The current zoning debacle has revealed a serious disconnect between the desires of many citizens and their township supervisors. One side feels they are acting in the best interests of their towns; the other side feels their interests have been betrayed to the interests of an unelected regional bureaucracy. Regardless of the merits or justifications on either side, citizens and leaders need a high level of mutual understanding and trust.
Changing this current key intergovernmental agreement will be an important step in that direction. The next step is to reconsider the objectives of the NTC. I doubt that anyone would object to it being an informational forum and a cooperative purchasing group. But, I also doubt that many citizens would endorse it becoming a regional bureaucracy or additional governmental layer. And, unfortunately, that is how many perceive the NTC's role because of the joint zoning effort.
The key NTC agreement is the "Intergovernmental Cooperation Agreement For Multi-Municipal Planning and Implementation". The synopsis is here: Part 1 : NTC Intergovernmental Zoning Agreement- Summary Excerpts. My initial comments are here: Jessup Jottings: Part 2 : NTC Intergovernmental Zoning Agreement. They were written in early January '09 and more recent thoughts are in this post (Jessup News Post - February 2008) summarizing the February NTC meeting.
This key 12 page agreement was established for Joint Planning and Implementation (Zoning) and establishes a "Joint Planning Committee" of elected officials to oversee all actions related to the Comprehensive Plan and any implementing Zoning and land ordinances. In essence, the agreement ties each town to that NTC Planning Committee before they can make or change land ordinances.
Don't get confused by other intergovernmental agreements to create joint planning commissions ( e.g., betwen Rush and Jessup) to follow up on zoning. There's a big legal difference in the MPC between “Committee” and “Commission”. That mistake was made by some at the NTC meeting and caused some confusion. Those "Commission" agreements were not signed and are not at issue.
This agreement was signed by all 12 participating Municipalities and was essential, under the state Municipal Planning Code, to the legality of the NTC Comprehensive Plan which all 12 towns did adopt and sign. It would be essential for Joint Zoning if we were to do that. Being in the agreement is not the same as being in the NTC - Montrose is not participating in the agreement or the Joint Planning Committee, but is in the NTC.
The agreement's status is less clear if some towns decide to zone independently in a coordinated way following the same Joint Comprehensive Plan, while others opt to not zone.
The agreement specifically covers "Implementation " of the joint Comprehensive Plan with the Joint Planning Committee (NOT a "Commission" ) acting to assure towns keep their "implementation" ordinances “Consistent" with the Plan. That could be interpreted to mean any land ordinances, triggering Committee reviews of ordinances by the non-zoning towns.
For towns that are not zoning, it makes no sense to be in the agreement and be required to have their land ordinances reviewed by that joint Committee. It also seems undesirable for the zoning towns to have to go to a committee of non-zoners for approval of changes to their zoning ordinances. So, I think both sides need to reconsider the agreement; terminate it and redo it for those who want to be tied together in joint or coordinated zoning.
The agreement states that a 100% vote is required to change the agreement and 75% vote to terminate it. If a town wants to withdraw on their own, they need to pass a resolution after which there is 1 year waiting period during which the towns stays bound to the agreement ( and I think still a "voting member"). This made sense for Joint Zoning; but not now. The agreement is overtaken by events and should be changed to fit the new facts. The easiest way is to terminate and rewrite it for the willing zoners.
Members of that “Joint Planning Committee" ( elected officials) seem defensive about keeping the agreement in force and their status on it. These options may get discussed at the next NTC meeting. There may be reasons why the agreement should continue; but it seems dangerous for towns to remain in an agreement which seriously limits their freedom of action to make their own land ordinance decisions.
If any forms of joint ordinances or zoning actions are desired in the future, those action should be taken anew and openly.The current zoning debacle has revealed a serious disconnect between the desires of many citizens and their township supervisors. One side feels they are acting in the best interests of their towns; the other side feels their interests have been betrayed to the interests of an unelected regional bureaucracy. Regardless of the merits or justifications on either side, citizens and leaders need a high level of mutual understanding and trust.
Changing this current key intergovernmental agreement will be an important step in that direction. The next step is to reconsider the objectives of the NTC. I doubt that anyone would object to it being an informational forum and a cooperative purchasing group. But, I also doubt that many citizens would endorse it becoming a regional bureaucracy or additional governmental layer. And, unfortunately, that is how many perceive the NTC's role because of the joint zoning effort.
Sunday, March 1, 2009
A County Gas Committee ?
Should Susquehanna County establish a County Gas Committee and, if so, what should it do ?
The County Commissioners have discussed creating a "Gas Committee" at recent meetings and have asked the Economic Development Board to address the issue. I attended the 26 February meeting of the Board to learn what was being considered.
The county is rich in Marcellus Shale and the extraction of natural gas is very likely to become a major driver of the county's economy with impacts on public services, infrastructure, and the environment. The Board is an understandable place to start even though the issues may go beyond their normal purview.
While I lack the context of prior discussions, my main impression was that the Commissioners were not going to set the committee's mission and goals. Instead, they wanted the Board to come up with mission, goals, objectives, structure and personnel recommendations - basically from scratch. It is very hard for an advisory board to do this without specific guidance from the executive leadership. The Board accepted the task.
In an attempt to get or clarify some executive guidelines, I commented that the "Committee" might try to do three things : Educate the public ( in conjunction with Penn State's efforts - Don't be redundant); Establish a forum for county offices to discuss and coordinate their actions on gas extraction issues ( safety, roads, etc.); and Identify key legislative or regulatory issues for the County to pursue.
I did not ask whether the committee should be "inward"focused per the first two items above or "outward" focused per the legislative item, which might entail suggesting alliances of legislators or counties for coordinated action (e.g. lobbying). It became clear that the Board would have to define these guidelines for themselves. The main resource for them was their contract staff, the Planning Authority (PA), which had obtained information about two other county committees. Reviewing those documents can be useful if one focuses on committee effectiveness rather than just structure and process.
OK; that's what was. Now what should be done?
Simple answer - I really don't know. But I'll offer a few more suggestions that might help the Board develop recommendations for a county gas committee; or at least stimulate some discussion about what a committee should and could do. The overall guideline should be to prioritize effort - don't do what others are doing; do things that get actions and results.
First - I still like the above 3 objectives : Educate Public ( and Listen); Coordinate Internal Resources; Influence Legislation. These are reasonably distinct areas of endeavor which could be pursued separately. They are not in priority order. The Board should refine and prioritize.
Second - Recognize our strengths and resources : we have a Planning Commission, an EMA office, a Conservation office, a Penn State Extension Office, and other resources ( including knowledgeable citizens) that can be tapped or coordinated.
Third - Accept our limitations : we are a small 41,000 person county with limited volunteer and financial resources. Prioritize on the doable (e.g. if the commissioners won't lobby or permit it, downplay legislative initiatives).
Fourth - Face the inevitable : Expect the commissioners to deflect public concerns onto the committee. Be prepared to listen and do triage ( executive action, staff referral, noted for consideration).
Fifth - Consider organization flexibility - e.g., short term task forces, formed from people who present issues strongly and knowledgeably, to report out with actionable recommendations.
Sixth - Review some pertinent literature but don't get carried away by academic breadth and comprehensiveness - remember item (3) above.
Penn State has a good website on Natural Gas Impacts ( http://naturalgas.extension.psu.ed ) with a lot of information as well as many links to documents and presentations. They link several publications on local government issues and on organizing a local task force.
Of course, there are also some good earlier posts on this blog, Jessup Jottings (http://jessupjottings.blogspot.com) ; and I'll be adding more in the future. This is an important issue and I wish the Board success.
The County Commissioners have discussed creating a "Gas Committee" at recent meetings and have asked the Economic Development Board to address the issue. I attended the 26 February meeting of the Board to learn what was being considered.
The county is rich in Marcellus Shale and the extraction of natural gas is very likely to become a major driver of the county's economy with impacts on public services, infrastructure, and the environment. The Board is an understandable place to start even though the issues may go beyond their normal purview.
While I lack the context of prior discussions, my main impression was that the Commissioners were not going to set the committee's mission and goals. Instead, they wanted the Board to come up with mission, goals, objectives, structure and personnel recommendations - basically from scratch. It is very hard for an advisory board to do this without specific guidance from the executive leadership. The Board accepted the task.
In an attempt to get or clarify some executive guidelines, I commented that the "Committee" might try to do three things : Educate the public ( in conjunction with Penn State's efforts - Don't be redundant); Establish a forum for county offices to discuss and coordinate their actions on gas extraction issues ( safety, roads, etc.); and Identify key legislative or regulatory issues for the County to pursue.
I did not ask whether the committee should be "inward"focused per the first two items above or "outward" focused per the legislative item, which might entail suggesting alliances of legislators or counties for coordinated action (e.g. lobbying). It became clear that the Board would have to define these guidelines for themselves. The main resource for them was their contract staff, the Planning Authority (PA), which had obtained information about two other county committees. Reviewing those documents can be useful if one focuses on committee effectiveness rather than just structure and process.
OK; that's what was. Now what should be done?
Simple answer - I really don't know. But I'll offer a few more suggestions that might help the Board develop recommendations for a county gas committee; or at least stimulate some discussion about what a committee should and could do. The overall guideline should be to prioritize effort - don't do what others are doing; do things that get actions and results.
First - I still like the above 3 objectives : Educate Public ( and Listen); Coordinate Internal Resources; Influence Legislation. These are reasonably distinct areas of endeavor which could be pursued separately. They are not in priority order. The Board should refine and prioritize.
Second - Recognize our strengths and resources : we have a Planning Commission, an EMA office, a Conservation office, a Penn State Extension Office, and other resources ( including knowledgeable citizens) that can be tapped or coordinated.
Third - Accept our limitations : we are a small 41,000 person county with limited volunteer and financial resources. Prioritize on the doable (e.g. if the commissioners won't lobby or permit it, downplay legislative initiatives).
Fourth - Face the inevitable : Expect the commissioners to deflect public concerns onto the committee. Be prepared to listen and do triage ( executive action, staff referral, noted for consideration).
Fifth - Consider organization flexibility - e.g., short term task forces, formed from people who present issues strongly and knowledgeably, to report out with actionable recommendations.
Sixth - Review some pertinent literature but don't get carried away by academic breadth and comprehensiveness - remember item (3) above.
Penn State has a good website on Natural Gas Impacts ( http://naturalgas.extension.psu.ed ) with a lot of information as well as many links to documents and presentations. They link several publications on local government issues and on organizing a local task force.
Of course, there are also some good earlier posts on this blog, Jessup Jottings (http://jessupjottings.blogspot.com) ; and I'll be adding more in the future. This is an important issue and I wish the Board success.
Saturday, February 28, 2009
Mathematics, Gas, and Taxes
Let's have fun with mathematics, starting with some interesting numbers about Susquehanna County.
We have 823 square miles of land area and 9 square miles of water; about 932 sq. miles total.
Pennsylvania has 46,058 square miles of surface. Dividing that into 832 yields 1.81% as The County share of the State's surface area.
Geologists and gas companies claim that 60% of the State's area overlays the Marcellus Shale deposits from which we hope to produce large amounts of natural gas. That works out to about 27,600 square miles. Susquehanna County is completely in that area. So, we overlay about 3% of the Marcellus Shale area in the state. The thickness of the shale layer in Susquehanna County is considered to be about twice the average. So, the shale gas value of our deposits is probably a much higher percentage, say perhaps 6%.
There are several estimates of the value of the Marcellus Shale. All are highly speculative until more drilling and production experience is gained. Governor Rendell uses an estimate of $1Trillion in his budget fact sheet on his proposed severance tax. On that basis, at just 3%, the county would have about $30Billion of shale gas under the surface. At higher % estimates for greater thickness, the value could double to $60Billion.
What do those numbers mean in more human terms - like an acre? At 624 acres per square mile times 830 acres in the county, the county has about 518,000 acres. Dividing that into $30Billion gives a value of about $58,000 per acre. At the higher percentages, that could exceed $100,000/acre. Pretty high for most land here!
Of course, these are "averages" and the real value of any specific parcel can be dramatically different depending on what really lies below and can be extracted. In the last couple of years gas companies have paid 5-year lease prices from $25 per acre to over $2,500 per acre for parcels with roughly comparable gas extraction potentials.
The lease prices vary based on the awareness of the landowners, the degree of company competition, the rising price of natural gas, and expectations of high payoffs from a small portion of the large amounts of land leased. Only some of the payoff may come from actually extracting gas from a parcel. The payoff can also come from flipping leases to other companies or from using the land for pipelines at very low annual payments instead of the high gas royalties hoped for by landowners. Some of the leased land will never be worth exploiting and it may be years before that culling is done.
For these reasons, using the lease price as a fair valuation of the underlying gas is apt to be very misleading. Yet, the county commissioners and township supervisors associations propose to use the lease price as the basis for taxing gas rights (or possible deposits) as property. The resulting tax may require companies and landowners to pay disparate amounts for similar parcels regardless of whether they can get any value from the assumed gas deposits.
How a property tax would be written to protect landowners from additional property taxes when they get no revenue is unclear. A severance tax avoids this issue by only taxing the produced gas. If there is no production, there is neither tax nor royalty income. At least, no one is threatened with foreclosure for failing to pay taxes on non-existent gas deposits, as might happen with a property tax.
Unfortunately, the Governor's proposed severance tax is intended to be used to reduce the state deficit and to pay for projects in the cities and counties that have nothing to do with the production of the gas. The burden of paying for gas-production related services (roads, social and law enforcement, etc.)will fall on the producing counties and towns that may see little of the state severance tax.
Before we jump on the need for any new taxes,it's worth noting that successful gas production yields both corporate income taxes and royalty income taxes to the state. The problem is that the state does not allocate a fair share of those taxes back to the local governments that provide the essential services.
The gas-producing counties and towns deserve a fair share of any gas related taxes whether from royalty income tax, corporate income tax, or severance tax. Getting it depends on the effectiveness of our legislators in writing a fair share allocation into the tax laws. And that brings us to some other numbers.
The US Census Bureau estimates Susquehanna County population at 41,123 in 2007. The comparable 2007 estimate for Pennsylvania was 12,432,792 ( the updated Jan09 estimate is now 12,419,930). New county data will be available in April, but the Susquehanna County population will still be about 0.3% of the state population.
So, 3%-6% of the Marcellus Shale gas value is located on land populated by only 0.3% of the voting public. These numbers do not look good for Susquehanna County getting its fair share of any natural gas tax devised in the political horse trading arena of the State Legislature.
Some other numbers may improve the outlook. As a percentage of the state, our population is only 0.3%; but we are 1.5% of the 67 counties; and we elect 1% of the 203 state representatives and 2% of the 50 state senators. Those numbers look more promising.
If we add representatives and senators from other Marcellus Shale areas, the numbers start to look like a strong minority voting block; if we add the other oil and gas producing areas of the state ( mostly the western half), the numbers have the potential to be a decisive voting block. As a reference point, last year,the DEP issued over 7000 gas well permits, but only 450 were for Marcellus Shale gas (about 15% of these in Susquehanna County).There may be a lot of allies for allocating a fair share of state (income or severance) tax revenues derived from gas production back to the producing towns and counties.
Of course, that's just potential; making it real requires a lot of alliance building around some common interests. And that effort is in the realm of politics not mathematics.
We have 823 square miles of land area and 9 square miles of water; about 932 sq. miles total.
Pennsylvania has 46,058 square miles of surface. Dividing that into 832 yields 1.81% as The County share of the State's surface area.
Geologists and gas companies claim that 60% of the State's area overlays the Marcellus Shale deposits from which we hope to produce large amounts of natural gas. That works out to about 27,600 square miles. Susquehanna County is completely in that area. So, we overlay about 3% of the Marcellus Shale area in the state. The thickness of the shale layer in Susquehanna County is considered to be about twice the average. So, the shale gas value of our deposits is probably a much higher percentage, say perhaps 6%.
There are several estimates of the value of the Marcellus Shale. All are highly speculative until more drilling and production experience is gained. Governor Rendell uses an estimate of $1Trillion in his budget fact sheet on his proposed severance tax. On that basis, at just 3%, the county would have about $30Billion of shale gas under the surface. At higher % estimates for greater thickness, the value could double to $60Billion.
What do those numbers mean in more human terms - like an acre? At 624 acres per square mile times 830 acres in the county, the county has about 518,000 acres. Dividing that into $30Billion gives a value of about $58,000 per acre. At the higher percentages, that could exceed $100,000/acre. Pretty high for most land here!
Of course, these are "averages" and the real value of any specific parcel can be dramatically different depending on what really lies below and can be extracted. In the last couple of years gas companies have paid 5-year lease prices from $25 per acre to over $2,500 per acre for parcels with roughly comparable gas extraction potentials.
The lease prices vary based on the awareness of the landowners, the degree of company competition, the rising price of natural gas, and expectations of high payoffs from a small portion of the large amounts of land leased. Only some of the payoff may come from actually extracting gas from a parcel. The payoff can also come from flipping leases to other companies or from using the land for pipelines at very low annual payments instead of the high gas royalties hoped for by landowners. Some of the leased land will never be worth exploiting and it may be years before that culling is done.
For these reasons, using the lease price as a fair valuation of the underlying gas is apt to be very misleading. Yet, the county commissioners and township supervisors associations propose to use the lease price as the basis for taxing gas rights (or possible deposits) as property. The resulting tax may require companies and landowners to pay disparate amounts for similar parcels regardless of whether they can get any value from the assumed gas deposits.
How a property tax would be written to protect landowners from additional property taxes when they get no revenue is unclear. A severance tax avoids this issue by only taxing the produced gas. If there is no production, there is neither tax nor royalty income. At least, no one is threatened with foreclosure for failing to pay taxes on non-existent gas deposits, as might happen with a property tax.
Unfortunately, the Governor's proposed severance tax is intended to be used to reduce the state deficit and to pay for projects in the cities and counties that have nothing to do with the production of the gas. The burden of paying for gas-production related services (roads, social and law enforcement, etc.)will fall on the producing counties and towns that may see little of the state severance tax.
Before we jump on the need for any new taxes,it's worth noting that successful gas production yields both corporate income taxes and royalty income taxes to the state. The problem is that the state does not allocate a fair share of those taxes back to the local governments that provide the essential services.
The gas-producing counties and towns deserve a fair share of any gas related taxes whether from royalty income tax, corporate income tax, or severance tax. Getting it depends on the effectiveness of our legislators in writing a fair share allocation into the tax laws. And that brings us to some other numbers.
The US Census Bureau estimates Susquehanna County population at 41,123 in 2007. The comparable 2007 estimate for Pennsylvania was 12,432,792 ( the updated Jan09 estimate is now 12,419,930). New county data will be available in April, but the Susquehanna County population will still be about 0.3% of the state population.
So, 3%-6% of the Marcellus Shale gas value is located on land populated by only 0.3% of the voting public. These numbers do not look good for Susquehanna County getting its fair share of any natural gas tax devised in the political horse trading arena of the State Legislature.
Some other numbers may improve the outlook. As a percentage of the state, our population is only 0.3%; but we are 1.5% of the 67 counties; and we elect 1% of the 203 state representatives and 2% of the 50 state senators. Those numbers look more promising.
If we add representatives and senators from other Marcellus Shale areas, the numbers start to look like a strong minority voting block; if we add the other oil and gas producing areas of the state ( mostly the western half), the numbers have the potential to be a decisive voting block. As a reference point, last year,the DEP issued over 7000 gas well permits, but only 450 were for Marcellus Shale gas (about 15% of these in Susquehanna County).There may be a lot of allies for allocating a fair share of state (income or severance) tax revenues derived from gas production back to the producing towns and counties.
Of course, that's just potential; making it real requires a lot of alliance building around some common interests. And that effort is in the realm of politics not mathematics.
Saturday, February 21, 2009
Jessup News Post - February 2008
Township Meeting:
The 4 February 2008 meeting had a significant discussion of zoning,the related NTC Intergovernmental Cooperation Agreement For Multi-Municipal Planning And Implementation, and the proposed NTC SALDO.
After discussion, a unanimous vote was taken to not zone the township.
It was further decided to seek to withdraw from the Intergovernmental Agreement. It requires the township to seek approval of the other 11 municipalities for any land ordinances we want to enact - a condition that is not relevant if we do not zone.
It was decided to investigate other SALDO options including adopting the County SALDO as our own and establishing a planning commission; or establishing a liaison with the County planning commission to improve coordination and input on their decisions. Copies of the County SALDO will be obtained and reviewed.
There was a discussion of obtaining a replacement for the existing backhoe/loader. The decision was to seek bids to do so.
The option of contracting directly with an engineering organization(s)instead of COG for codes and septic enforcement was discussed again with the intent of taking action in the near future to reduce fees to residents.
NTC Meeting:
The 19February2008 NTC meeting was fairly brief. The key items were a discussion of subdivision activity by Bob Templeton and a discussion of zoning and the intergovernmental agreement. Bill Stewart mentioned that Alta Resources may come to the next meeting to discuss their gas leasing and drilling activities. Dave Darrow said that he would be a "Non-Voting" alternate for Franklin Township.
Bill Stewart said there was no report of any township opposed to zoning and he thought all were just talking and no action was taking place. We informed him about the zoning vote in Jessup and Franklin confirmed they had also voted to not zone.
Gene Famolari and Charles Davis, Jessup Rep, raised and discussed the issues about withdrawing from the Intergovernmental Agreement. There was some confusion about whether we wanted to drop from the NTC or just the agreement. Our position was about only the Agreement and this was clarified in the meeting and in a subsequent discussion with Charles Mead.
This NTC meeting had several positives :
Bob Templeton talked about his subdivision summary handout and really endorsed that there is no need for a NTC SALDO based on the number of lots per year for many towns ( e.g. 3/year over 15 years for Jessup.). He said he liked the approach we had discussed about having a Jessup observer attend County planning commission meetings and act as town liaison. He encouraged other towns to consider that.
Bill Stewart tried to defend the NTC's value to one questioner, but could not really point to anything the NTC had done other than getting grants for composting leaf vacuums and improving supervisor relations by regular get-togethers.
I had a long chat with Charles Mead that went from his being angry and convinced I was "misrepresenting" to his understanding my points about what the Intergovernmental Agreement really said, why it needed change and how to do so. We ended up cordial and, perhaps, he will rethink his position.
The key is that the “Agreement” must be updated to do what he and others want to do for the “zoners”. To Change requires a 100% agreement of 12 towns. To Terminate requires only a 75% vote. It is easier to terminate and redo for the willing than to be hard-nosed and force us to withdraw over a year period - during which we are not likely to vote for their needed change.
The issue of changing the intergovernmental agreement is now on the table and should get follow-up in the next meeting. It's important for non-zoners to drop out of it; and that can be done without leaving the NTC. That action gives us freedom from more regulatory efforts by the "joint planning committee" which has a lot of authority ceded it by the towns in the agreement.
On the not so positive side :
Some of the "inner" clique of NTC supervisors are unhappy and may try to find a way to reverse the events or prevent withdrawal. We should be prepared for more discussion on March 19.
Money may be a factor - the budget shows $59.6K tied to SALDO-ZONING. Perhaps they can only keep it if they spend for those items. That could be a terrible incentive to do "wrong" rather than to return the funds. If so, some open discussions and negotiations with DCED could lead to a win-win if approached correctly.
The 4 February 2008 meeting had a significant discussion of zoning,the related NTC Intergovernmental Cooperation Agreement For Multi-Municipal Planning And Implementation, and the proposed NTC SALDO.
After discussion, a unanimous vote was taken to not zone the township.
It was further decided to seek to withdraw from the Intergovernmental Agreement. It requires the township to seek approval of the other 11 municipalities for any land ordinances we want to enact - a condition that is not relevant if we do not zone.
It was decided to investigate other SALDO options including adopting the County SALDO as our own and establishing a planning commission; or establishing a liaison with the County planning commission to improve coordination and input on their decisions. Copies of the County SALDO will be obtained and reviewed.
There was a discussion of obtaining a replacement for the existing backhoe/loader. The decision was to seek bids to do so.
The option of contracting directly with an engineering organization(s)instead of COG for codes and septic enforcement was discussed again with the intent of taking action in the near future to reduce fees to residents.
NTC Meeting:
The 19February2008 NTC meeting was fairly brief. The key items were a discussion of subdivision activity by Bob Templeton and a discussion of zoning and the intergovernmental agreement. Bill Stewart mentioned that Alta Resources may come to the next meeting to discuss their gas leasing and drilling activities. Dave Darrow said that he would be a "Non-Voting" alternate for Franklin Township.
Bill Stewart said there was no report of any township opposed to zoning and he thought all were just talking and no action was taking place. We informed him about the zoning vote in Jessup and Franklin confirmed they had also voted to not zone.
Gene Famolari and Charles Davis, Jessup Rep, raised and discussed the issues about withdrawing from the Intergovernmental Agreement. There was some confusion about whether we wanted to drop from the NTC or just the agreement. Our position was about only the Agreement and this was clarified in the meeting and in a subsequent discussion with Charles Mead.
This NTC meeting had several positives :
Bob Templeton talked about his subdivision summary handout and really endorsed that there is no need for a NTC SALDO based on the number of lots per year for many towns ( e.g. 3/year over 15 years for Jessup.). He said he liked the approach we had discussed about having a Jessup observer attend County planning commission meetings and act as town liaison. He encouraged other towns to consider that.
Bill Stewart tried to defend the NTC's value to one questioner, but could not really point to anything the NTC had done other than getting grants for composting leaf vacuums and improving supervisor relations by regular get-togethers.
I had a long chat with Charles Mead that went from his being angry and convinced I was "misrepresenting" to his understanding my points about what the Intergovernmental Agreement really said, why it needed change and how to do so. We ended up cordial and, perhaps, he will rethink his position.
The key is that the “Agreement” must be updated to do what he and others want to do for the “zoners”. To Change requires a 100% agreement of 12 towns. To Terminate requires only a 75% vote. It is easier to terminate and redo for the willing than to be hard-nosed and force us to withdraw over a year period - during which we are not likely to vote for their needed change.
The issue of changing the intergovernmental agreement is now on the table and should get follow-up in the next meeting. It's important for non-zoners to drop out of it; and that can be done without leaving the NTC. That action gives us freedom from more regulatory efforts by the "joint planning committee" which has a lot of authority ceded it by the towns in the agreement.
On the not so positive side :
Some of the "inner" clique of NTC supervisors are unhappy and may try to find a way to reverse the events or prevent withdrawal. We should be prepared for more discussion on March 19.
Money may be a factor - the budget shows $59.6K tied to SALDO-ZONING. Perhaps they can only keep it if they spend for those items. That could be a terrible incentive to do "wrong" rather than to return the funds. If so, some open discussions and negotiations with DCED could lead to a win-win if approached correctly.
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