Thursday, April 19, 2007

County seeks line of credit

By James Robinson
Staff Writer

The Archuleta County Board of County Commissioners moved Tuesday to secure a $500,000 revolving line of credit from the Bank of the San Juans, following last week’s report from finance director Bob Burchett and treasurer Lois Baker that the county faces a $200,000 shortfall for pending bills and other financial obligations.

“We may need to use it, (the line of credit) we may not,” Burchett said. “This is strictly an operating line of credit based on revenues coming into the county. Our intent is to have this in place for cash flow pickups.”

Baker and Burchett made the shortfall announcement during a BoCC strategic planning session April 10. At the time, Burchett said, “We have a strain on our cash flow because of what we had to pay up-front during the start of the first quarter.”

Burchett explained that the first quarter typically stretches county finances because the first quarter is when many big-ticket, annual expenditures such as medical service contracts, charitable contributions and insurance premiums come due.

Burchett said those annual expenditures totaled $661,000. Couple those expenses with a $90,000 shortfall in property taxes collected, as compared to collections from last year, and first quarter gross receipts income is 13 percent lower than projected, and the problem totals nearly $1 million.

Burchett explained the Taxpayer’s Bill of Rights (TABOR) mandates that the county keep 3 percent of budgeted expenditures reserved for emergencies, however, Burchett said, the 3-percent buffer does not necessarily translate into cash on hand.

Burchett said the county also maintains an emergency reserve fund — mostly in cash — although the fund can only be tapped for qualified emergency situations such as a natural disaster.

“The emergency reserve fund can only be used for qualified emergency situations approved by the state. For example: A cash flow hiccup? You can’t use it for that,” Burchett said.

Archuleta County Administrator Bob Campbell and Burchett said the first quarter has historically been a financially challenging time for the county; yet Burchett said the full scope of the cash flow shortfall wasn’t revealed until the end of March.

“The situation was made apparent after completion of March analyticals,” Burchett said.

Despite the county’s first quarter financial troubles, Campbell said not all is gloom and doom.

For example, a recent report indicated April’s gross receipt tax had come in about 5 percent above projections, and first quarter general fund expenditures were 1 percent lower than budgeted. Thus, Campbell anticipates April’s gross receipt income should partially revitalize county coffers; yet the real boost will come from forthcoming property tax revenues.

Burchett said the county will also receive Highway Users Tax Fund dollars sometime next week, and Burchett said those, plus property tax revenues, should represent two of the county’s largest revenue sources.

Campbell estimated property taxes and gross receipts would inject about $2.4 million into the coffers. And Burchett said the county’s revenue stream is generally strongest between April and June.

“Typically, we’ve collected the bulk of our revenue by June. After June, our revenue stream thins out,” Burchett said.

Campbell put the situation into perspective.

“This quarter is historically no different than other past first quarters. It seems like this is the pattern every year — we tap into reserves during the first quarter.”

And although Campbell said the trend indicates this is business as usual in Archuleta County, he is intent on breaking the pattern.

“My point of view is we shouldn’t be in this position. This is a good wake-up call,” Campbell said. “It gives us a chance to get our ducks in a row.”

As part of the long-term strategy, Campbell said future charitable disbursements will be made later in the year. In addition, Burchett said maintaining the line of credit would be a prudent fiscal measure.

“I think it would be wise to have this in place every year,” Burchett said.

As agreed upon with Tuesday’s BoCC decision, the line of credit will expire in December 2007.
In addition to securing the line of credit, the board also approved a number of short-term remedial measures last week.

Those measures include: a freeze on hiring; no capital purchases, except for essential items necessary to run various county departments; a freeze on travel and training, except in cases where it is necessary to maintain an employee’s license or certification, or where the course or training will provide an immediate cost savings to the county.

Campbell said those measures would remain in effect through June 30.

Campbell and Burchett have both stated the county will have no difficulty meeting payroll.

james@pagosasun.com

School district to develop facilities master plan

By Louis Sherman
Staff Writer

At its monthly board of education meeting Tuesday, Archuleta School District 50 Joint announced its intention to begin the process to develop a facilities master plan, after entering into contract with Blythe Design+co.

At the meeting Steve Walston, maintenance director for the district, outlined the expected process, which will involve input from a broad spectrum of district staff and community members, in order for Blythe to produce a plan and make suggestions to improve the functionality of district facilities.

During the tenure of former superintendent Duane Noggle, the district made public a request for proposals for the master plan. Blythe was chosen and the district began making plans to initiate a community advisory committee to start the process.

After Noggle’s resignation, the district put the process on hold during the administrative transition period. New superintendent Mark DeVoti then delegated development of the facilities master plan process to Walston (while maintaining administrative oversight), since the process would benefit from Walston’s expertise and experience in the corporate sector and as maintenance director, said DeVoti. Since then, Walston has formalized the contract with Blythe and worked with the firm to define the process.

Upon suggestions made by Blythe, the district made the decision to alter the process of master plan development — moving community advisory committee meetings to the end of the process — said Walston.

Walston said this would allow Blythe to gather data and other information on the state of the district to provide to the school board and community committee, in order to facilitate discussion and decisions.

“We don’t want to preconceive anything by starting a committee too soon ... we want to let the data drive our decisions ... and give the committee the ability to be more functional,” said Walston.

According to Walston, the initial stage of information gathering will include a facilities study by Blythe engineers, as well as focused research into issues such as demographics and traffic flow. Blythe will also seek input from “community stakeholders,” such as law enforcement and governmental agencies.

On April 25 and 26 Blythe will spend time in Pagosa’s schools in order to obtain input from teachers, staff and students, said Walston. Representatives from Blythe will be available for comment and discussion about facilities issues during the school day.

Following Blythe’s initial research and information gathering, the firm will present an initial report in the early summer to the school board. The report will suggest any needed changes to the process or data gathering efforts, and the board will make determinations on any necessary actions. After the initial report and suggestions, it is likely that the community advisory committee will be initiated, said Walston. The committee will represent a variety of district and community entities and viewpoints, he said.

The committee will be facilitated by Blythe and discuss potential courses of action to improve district facilities, based on the data gathered. The committee could potentially decide to open the discussion up to a public forum, said Walston.

Blythe will then take the committee’s input and produce a final master facilities plan, which will likely be completed by November or December, said Walston. The plan will identify ways in which the district facilities are effective or deficient, while suggesting corrective actions of varying degree, cost and necessity.

The plan will be presented to school administration and the board of education. Walston said it is likely that some actions will come from the process, which will be focused on the near and long term.

louis@pagosasun.com

-More questions about HD drilling

By James Robinson
Staff Writer

Larry Garcia has methane in his water well and he lives within 1.5 miles of the Fruitland Outcrop.

The Bureau of Land Management (BLM) and the United States Forest Service have recently released a Record of Decision allowing coal bed methane drilling on federal lands within 1.5 miles of the outcrop in Archuleta County. Experiences in La Plata County have shown that drilling near the Fruitland Outcrop is risky business, and many agree a 1.5 mile drilling buffer is key to protect citizens and their water supplies safe from methane contamination, depletion, or worse, an underground coal bed fire. In fact, the Record of Decision formally established the 1.5 mile buffer in La Plata County. Garcia is concerned the Forest Service/BLM decision has set his methane-contaminated well, his home, and his family on a collision course with disaster.

Addressing the Archuleta County Board of County Commissioners, Garcia said, “If they allow drilling, my water table could be depleted. I’ve already got an explosive situation. If they start to drill, what will I have then?”

According to BLM documents, Garcia’s well tested positive for methane at least twice — once in October of 2003, and then again, in a subsequent, undated test. According to the test reports, when methane occurs in concentrations exceeding 1.1 milligrams per liter of water (mg/L), “laboratory experiments have shown that under ideal controlled conditions the entrained methane can exsolve (come out of the water) to the extent that an explosive environment is created.”

The October test shows methane concentrations in Garcia’s well at 3.1510 milligrams per liter of water, while the subsequent test shows concentrations of 3.228 — in both cases, concentrations are three times the threshold.

According to the BLM well test report, “Under normal conditions, the methane-in-water concentration would have to be considerably greater (than 1.1 mg/L) to create an explosive situation.”

And Garcia wonders: Are the methane concentrations in his well high enough to create cause for concern? He isn’t sure — he hasn’t tried to light his water on fire, and he’s reluctant to drop a match down the well shaft. And he’s afraid that when drilling begins along the outcrop, his methane concentrations will only become worse.

“I don’t want to wait and see what will happen. I don’t want to be one of those variables, one of those question marks. I don’t want to be a statistic,” Garcia said.

And Garcia isn’t the only concerned Archuleta County resident.

Bob Delzell lives near the outcrop in Archuleta County on Yellow Jacket Pass. And although he feels partially protected from coal bed methane drilling related impacts because he owns the minerals beneath his property, he fears for his neighbors who don’t and who rely on domestic water wells and springs and seeps for themselves, agriculture and for tending their livestock.

Delzell has said that experiences in La Plata County show that drilling on the outcrop is risky business and could lead to a whole host of troubles, including depletion of the water table or methane contamination in domestic water wells. The worse case scenario is an underground coal bed fire, which Delzell acknowledges is unlikely, although not without precedent. Thus, distance from the outcrop, Delzell argues, is the best insurance.

But Mark Stiles, forest supervisor, BLM center manager and author of the Record of Decision, sees things differently.

“The evidence in Archuleta County is that it’s (drilling) not an issue, that it’s not a serious threat. They can do it (drill) responsibly. It can be done. The bulk of the evidence showed the outcrop impacts seen in La Plata county would not be repeated on the Archuleta County side,” Stiles said.

Stiles statement pertains specifically to the Northern San Juan Basin Coal Bed Methane Project, an area that spans 125,000 acres and two counties — La Plata and Archuleta — and extends from southeast of Durango to the Piedra River and north of the Southern Ute Reservation line.

Stiles addressed the Archuleta County Board of County Commissioners Tuesday, after they expressed concern the Record of Decision didn’t afford Archuleta County the same protections — namely the 1.5 mile outcrop buffer — as La Plata County.

In the presentation, Stiles explained the rationale behind his decision.

“It wasn’t whether the industry could — they already owned the minerals —it was how,” Stiles said.

Stiles explained that key hydrologic and geologic differences between the outcrop area in Archuleta and La Plata counties formed the backbone of his decision and made it safe for drilling within the 1.5 mile area in Archuleta County to occur.

And Stiles added that the county line marked a rough approximation of where the geology and hydrology changed in the Fruitland formation.

“All features begin to change right around the county line,” Stiles said.

Furthermore, Stiles said strong empirical evidence had revealed problems with drilling near the outcrop in La Plata, whereas no such data existed for Archuleta County.

Among the list of key hydrologic and geologic differences, Stiles said that there are “no known natural seeps along the outcrop” in Archuleta County.

And Walt Brown, the environmental impact statement team leader for the Northern San Juan Basin Coal Bed Methane Project said, “All seeps existed prior to coal bed methane development in La Plata County. Historic seeps are the key difference between Archuleta County and La Plata counties.”

And that’s where Garcia questions Stiles’ decision. Couldn’t the presence of methane in his well be considered a seep?

According to Garcia’s well test report, methane gas in wells and ground water can be the result of biologic processes such as the decomposition of organic matter, or, it can also occur when a water well taps into a coal bed methane reservoir trapped beneath the Earth’s surface.

Brown said methane in well water is relatively common occurrence in La Plata County.

But there’s one caveat. Garcia lives within a mile of a decommissioned coal mine and the linkage, if any, between nearby coal extraction and methane in Garcia’s water is unclear. Garcia hopes testing done in 2006 will shed more light on the matter, although Garcia is still waiting for that report from the BLM.

According to Stiles, 27 proposed coal bed methane wells lie within the 1.5 mile outcrop zone in Archuleta County, although Delzell and Mark Pearson of the San Juan Citizens Alliance tally the number at closer to 50.

Project wide, Stiles said his Record of Decision represents a scaled back version of the industry proposal from 162 well pads to 127, 97 road miles to 72, and 788 disturbed acres to 650. However, Stiles’ decision only provides a regulatory framework for wells on federal land, and it’s up to the county’s land use code to regulate wells and ancillary facilities on private land. Currently there are roughly 16 wells proposed on private land in the Fosset Gulch area.

In order to protect residents and resources in Archuleta County, Stiles decision calls for a stepwise, one-well-at-a-time, monitoring approach concurrent with the drilling of any new wells.

In addition, Stiles said his decision incorporates certain safeguards such as requiring companies to modify drilling if impacts occur, or to implement mitigation measures. In addition, Stiles said his Record of Decision allows federal agencies to shut down a well if necessary. And Stiles is confident in his safeguards.

“We fully intend there would be no affects off-site because we will have stopped them before they would occur. We’ll learn about impacts long before they occur a mile, or miles away,” Stiles said.

Although Stiles is confident in his monitoring plan, will the county regulations adequately protect its citizens? As written, the county’s new land use code includes language regarding well spacing and ground water monitoring, but it remains to be seen whether it is beyond the county’s purview to impose its own 1.5 mile buffer for wells on private property. And in fact, that is an issue that may ultimately be up to the Colorado Oil and Gas Conservation Commission.

In the meantime, the Board of County Commissioners has stated they need more time to consider whether they will appeal Stiles’ decision, but with the appeals period set to expire 45 days from April 5, the clock is ticking.

james@pagosasun.com