Montezuma County and its municipalities and school districts will receive more than $3.5 million in state severance tax and federal mineral lease direct distribution payments, according to information released from the Colorado Department of Local Affairs and Gov. John Hickenloopers office.
The payments as a whole are nearly a 25 percent increase from 2010s distributions.
Severance tax and federal mineral lease direct distribution payments are derived from energy and mineral extraction statewide. For 2011, roughly $54.7 million will be distributed around the state, a rise from $37 million last year.
This direct distribution of energy impact funds is an important resource for local governments, Hickenlooper said in a written statement from the governors office. These funds help make vital, day-to-day operations possible, ensure needed public improvement projects become reality and bolster government services offered to local communities.
Increases in the payments are attributed to a decrease in tax credits taken for 2010 and an increase in mineral lease revenues, production and prices, according to the governors office.
Montezuma County will gain the largest boost from the payments, receiving $2,286,221 in federal mineral lease direct distribution payments, a 32 percent increase over last year, and $278,418 in severance tax payments, a 30 percent increase.
Direct distribution payments are designed to provide aid to communities whose roads, schools and infrastructure are impacted by energy and mineral production.
Payments will provide a boon to the county in terms of providing resources for necessary road work and other projects, according to Montezuma County Commissioner Steve Chappell.
The tax is designed to help counties deal with the impacts of extra traffic and the needs of the employees and all those different entities that are impacted by having extra people and industry in your county, Chappell said. Those taxes go to the state and then are given back to the counties. We are delighted to get some of that money back into our budget and our roads and our schools and to benefit the area where the impacts are taking place.
Construction work is already underway on certain roads in the county to repair damage caused by oil and gas industry equipment, Chappell said.
When they move these big oil rigs that weigh thousands of pounds across chip-sealed roads it can cause problems, he said, referring to county roads that have lighter surfacing than highways. The county is starting this week and next week doing patch work to fill in those spots, so we are certainly excited to get some of those funds back.
Montezuma-Cortez School District Re-1 Superintendent Stacy Houser said the school district is grateful for the extra funds. The local district will receive $186,930 in federal mineral lease direct distribution payments this year, a 28 percent increase over last year.
The benefit is the added income, Houser said. We are actually getting about $40,000 more than we budgeted for from last year, so it will help. It is not a significant amount in terms of a $29 million budget, but it is definitely an assistance to us.
Direct distribution payments are based on factors including a communitys mineral production and number of mining and well permits. According to the recently released report from the department of local affairs, 81 mining and well permits are on file for Montezuma County and there are 107 mineral production sites. The county is home to 29 coal employees and 60 oil and gas employees.
Other payments in the county follow: city of Cortez, $631,000; town of Dolores, $45,906; town of Mancos, $110,593; Dolores School District Re-4A, $43,249; Mancos School District Re-6, $24,376.
On the Net: Colorado Department of Local Affairs, www.colorado.gov/cs/Satellite/DOLA-Main/CBON/1251593265220.
Reach Kimberly Benedict at kimberlyb@cortezjournal.com.