Berthoud Weekly Surveyor | Covering all the angles in the Garden Spot

Revenue from oil and gas development provides sizable funding for Berthoud Fire Protection District

April 17, 2020 | Local News

By Dan Karpiel

The Surveyor

Recently, the Berthoud Board of Trustees, most notably Mayor Will Karspeck, have held discussions centered around a potential ban on oil and gas extraction in town.

According to earlier reporting by the Surveyor, on the regular meeting of the board Feb. 25, Karspeck pushed for a ban on oil and gas extraction within Berthoud town limits and invited two scientists from Colorado universities as well a member of the progressive lobbying group Earthworks to address the board.

The mayor acknowledged that there are regulations in place to mitigate the adverse health effects that potentially arise from oil and gas operations but also stated that if the risks cannot be eliminated, his preference would be for the industry to not operate in Berthoud. At the Feb. 25 meeting, Karspeck said, “In any other industry, if there were these types of impacts, we’d tell them we could no longer handle that and see how else they could produce their product,” he said. “I don’t believe this industry can.”

While there is a great deal of debate around the issue of oil and gas extraction, hydraulic fracturing or “fracking” in particular, there is no debate that the Berthoud Fire Protection District (BFPD) receives a sizable portion of its funding from tax revenue generated by the oil and gas industry.

“Almost half of our revenue for 2020, for our budget, is coming out of oil and gas,” said Steven Charles, Chief of the BFPD. “If the Town of Berthoud enacts a policy or adopts an ordinance that either bans or restricts further drilling, then we’re losing future revenues.”

The service area of the BFPD totals 103 square miles and encompasses portions of Boulder, Larimer and Weld counties, with accompanying tax revenue providing funding for the department infrastructure, equipment, operations and personnel. The tax revenue is generated from assessed values of residential, commercial and oil and gas. For the 2020 budget, Weld County oil & gas tax revenue comprised 46.9%, or $3,049,956.50, total fund revenue for the BFPD.

Two different taxes are assessed on oil and gas and the process is complicated. In short, one tax is derived from the physical equipment and how long it is located at a specific site within county limits. That tax is assessed at 29% of the value of the equipment. The second tax, assessed at 87%, is based upon oil and gas production. The monies generated from each revenue stream go through the assessment, billing and payment process and the BFPD sees the funding up to two years later.

Given the BFPD’s priority-based budgeting process, it is important for long-term strategic planning for the departments to have an estimate as to how much tax revenue will be generated for future budgets. Currently, there are four active wells at the Wilson Ranch development, located on the southeastern corner of I-25 and Highway 56, with eight more wells pending. The BFPD is counting on that future revenue stream being available.

“We’re looking at those eight wells as potential revenue for us,” Charles said. “The concern we have as an organization is that there are a number of wells that are pending within the Town of Berthoud, both the Town and of Berthoud and the fire district collect taxes off of gas and oil, that’s a revenue stream that can be disrupted.”

Without the tax revenue derived from oil and gas operations, Charles said the BFPD would be forced into a position where they would need to either institute a lease-purchase agreement and thus pay interest, to provide new and additional equipment or forgo the purchase altogether.

As Charles explained, “We’re spending our current gas and oil money wisely, we’re putting it towards long-term debt, i.e. employees … the gas and oil money frees up operation money for capital expenditure to allow us to pay cash for a brand-new fire apparatus. In the past we had to do lease purchases, so we were paying interest, thousands of dollars of interest on a half-million-dollar truck.”

He continued, “We just spent over $300,000 in oil and gas money replacing our self-contained breathing apparatuses, the mask and tank that we wear when we go into a fire. If we didn’t have the gas and oil money, we’d be doing a lease-purchase, or we wouldn’t be buying them at all.”

Charles is asking that the board consider all angles and viewpoints regarding this matter and not make a decision with only a singular focus in mind. “We are at the mercy of the direction of the Town of Berthoud takes,” Charles said.

The Surveyor will continue to follow this developing story.

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