A controversial property assessment that has been paid by area residents for the last five years will be reduced in 2015, thanks to revenues generated by shale oil and gas industry leases from the Muskingum Watershed Conservancy District.
"To date we've received about $3 million in royalty revenues from Utica shale production on one property we leased at the conservancy's Clendening Reservoir since 2011," said Darrin Lautenschleger, MWCD public affairs administrator.
The increased revenue allowed staff to recommend Friday that the MWCD Board of Directors reduce assessment collections starting in 2015. The board then approved a plan to provide a 50 percent reduction in assessments, which will mean an estimated $5.5 million cut in assessments collected.
It's good news for folks like Dave Buchanan, 77, of Lowell who was among several locals who traveled to New Philadelphia to protest the assessment when it was being proposed seven years ago.
"I went up with a couple of neighbors. We wanted to know what they were going to take out of our pockets," he said. "I'd like to see the assessment go down to zero. I'm living on Social Security and a little retirement. But any tax reduction is good."
The current assessment, on nearly 500,000 parcels of property in the Muskingum River watershed, began in 2009 and generates approximately $11 million annually for the MWCD.
The Muskingum Watershed Conservancy District Board of Directors approved a 50 percent reduction in the annual property assessment that went into effect throughout the district in 2009.
MWCD officials said the decrease, which would become effective in 2015, has been made possible due to revenues the conservancy district has realized from leasing some of its properties to shale oil and gas interests.
The MWCD currently collects about $11 million annually in assessments from property owners in the 18 counties of the Muskingum River watershed.
Approximately $4.5 million of that annual amount is paid by commercial and industrial interests.
95 percent of property owners in the watershed district pay an assessment of $12 a year.
Source: Muskingum Watershed Conservancy District.
By law that money must be used to pay for projects and programs that protect operation of the watershed's system of 16 dams and reservoirs built 80 years ago for flood reduction and water conservation.
A portion of the MWCD assessment funding, $400,000, was recently used to help install high-tech stream gauges as part of a flood warning system on the Muskingum River for Marietta and other river communities.
Lautenschleger said 95 percent of property owners pay $12 a year for the assessment. But $4.5 million of the annual assessment comes from commercial and industrial properties, and those entities would receive the largest benefit from the assessment reduction.
"I applaud the MWCD for making this decision which is in the best interest of the entire community, but especially for commercial interests and the farming community who own multiple lots," said Charlotte Keim, executive director of the Marietta Area Chamber of Commerce.
She said the action is also another indication of how the growing shale oil and gas industry investment in this area is helping to lower operating costs for businesses in Southeastern Ohio.
"This allows those companies to reinvest back into their business," Keim added.
Washington County Commission President Ron Feathers agreed.
"We had heard they were discussing a reduction in the assessment. This is definitely a positive move by the MWCD," he said. "Anytime an agency is able to cut the amount paid by businesses and taxpayers it gives those people more control of their money."
Local school districts will also see some savings.
"We don't pay a significant amount. Last year our assessment was about $305, but every dollar counts. And this is probably the appropriate thing for the MWCD to do," said Melcie Wells, treasurer for the Warren Local School District.
Lautenschleger noted the reduction approved Friday was due to royalty revenues received from the Clendening Reservoir property, just one of three leases for Utica shale development on district-managed properties. The other two leases, at the Leesville Reservoir in Carroll County in 2012 and at Seneca Reservoir in Guernsey and Noble counties in 2013, are not yet in the production stage, but could generate even more royalties.
That could result in more assessment reductions in the future.
"We could see more reductions in successive years, and if the oil and gas lease revenues continue to grow it may be possible the assessment could even be suspended," Lautenschleger said.
He added that the MWCD has managed oil and gas leases for its entire 80-year history as part of the agency's overall natural resources stewardship program.