Counties consider state grant funds for road repairs
Dec. 5, 2013 at 6:05 a.m.
Updated Dec. 6, 2013 at 6:06 a.m.
CUERO - DeWitt County could get a minimum of $4.5 million in state assistance to repair and maintain roads affected by oil and gas exploration.
Other counties in the Crossroads also are eligible for assistance from the state if they meet the criteria in a grant funding formula application.
The Texas Legislature, during its most recent session, approved $225 million in state funds to be distributed among the state's 254 counties.
The Texas Department of Transportation, which will administer the Transportation Infrastructure Fund, recently adopted rules for applying for the grant.
The Texas Comptroller and the Railroad Commission also took part in constructing the funding formula.
The funds are intended to offset damage done to county roads by the increase in heavy truck traffic because of oil and gas industry activity.
Those rules include identifying the sources of road degradation and the formation of one or more county energy transportation reinvestment zones within the county.
Specific projects then have to be identified within the zone.
The DeWitt County Commissioners Court is studying how to best use this funding opportunity.
It conducted a public hearing Nov. 25 on the topic.
"We're studying it," said DeWitt County Judge Daryl Fowler.
"We are still looking at whether it's advantageous to have only one within the county or divide the county up to four that would mimic the commissioner precinct territories.
"If we have multiple zones, we will be mindful to consider and avoid municipal city limits and extra-territorial boundaries and draw the lines accordingly."
The commissioners court has put $1 million in its budget for matching funds and is actively seeking an engineering firm to assist the county in prioritizing transportation projects.
"We have another $16 million in the road and bridge fund if we need to transfer it for additional match grant funds," Fowler said.
The grants carry a 20 percent match requirement.
Other counties, too, are getting in position to apply for the funds.
Karnes County Judge Barbara Shaw said the county has budgeted $1.5 million in matching funds. Karnes County is estimated to receive $7,163,454 - the third-highest allocation in the state.
"Absolutely," said Gonzales County Judge David Bird, whose county stands to receive an estimated $3,782,191. "I plan to get into this on Monday."
The reinvestment zones are also a topic of discussion in commissioners court meetings in Goliad County and in Calhoun County.
Goliad's estimated allocation is $440,518, and $294,100 would be allocated to Calhoun County.
Victoria County Judge Don Pozzi said that the creation of reinvestment zones "has been thought about, but there is nothing going on at this time."
Victoria County would receive $619,724 under current allocation estimates.
Matagorda County Judge Nate McDonald said the commissioners court will be studying the grant application process in the near future.
Matagorda would receive $460,441 in grant funds.
In Wharton County, where the allocation would be $898,201, the commissioners court may also soon be considering applying for funds.
"We are definitely looking at our options. At this moment, we haven't made any key decisions," said County Judge Phillip Spenrath.
On Tuesday, the Texas Association of Counties and the County Judges and Commissioners Association sponsored a webinar on the grant application process.
"Most of the counties I have talked to are very interested in the program, although some of them have expressed frustration that the process looks rather complicated and the timeline is short, with the rules having just recently been adopted," said Lonnie Hunt, county relations officer with the Texas Association of Counties.
"We expect we will be getting more questions and, of course, the association will assist any county in any way we can."
Formation of reinvestment zones also requires an advisory board of directors for each zone with up to three members from the oil and gas industry and two public members.
When a reinvestment zone is formed, the property tax baseline is set, and revenue generated above and beyond that baseline due to an increase in property values is dedicated to transportation projects within that zone.
"It does not raise or lower anyone's taxes," said Jim Allison of Allison and Bass Associates of Austin, who led the discussion during the association's webinar. "The commissioners court will set a tax increment within the zone and a separate accounting category will be established for those funds to use within the zone."
The funding formula takes into consideration well completions (50 percent), severance taxes collected (20 percent), overweight truck permits (20 percent) and saltwater disposal activity in a county (10 percent).
If a grant is awarded, up to 5 percent of the funds may be used toward administration of the reinvestment zones.
A reinvestment zone can be dissolved Dec. 31 of the 10th year after it was established unless extended by the commissioners court. An extension may not exceed five years.
Any remaining money in the reinvestment zone account must be transferred to the county road and bridge fund.
The application window is Feb. 7-14.
Fowler has been at the forefront of seeking state assistance in paying for roads damaged by an industry it receives tax money from and the county does not.
He serves as a member of the Texas Railroad Commission's Eagle Ford Task Force. He testified before numerous legislative committees in the past session.
Fowler said his county could use every penny of the $4,559,074 it is estimated to receive.
"That could increase because there are counties out there that even though they exhibit numbers in these categories, don't have any drilling activity. Those will fall off," said Fowler.
"The pool will shrink and our ratios will rise.
"It won't be hard using. If we just put $80,000 of gravel 8 inches deep on top of 342 miles of road we know are engaged right now, we'd spend more than $24 million."