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County braces for loss of oil and gas fund
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To help shore up reserves, the Barton County Commission Monday morning approved transferring money from the Oil and Gas Valuation Depletion Trust Fund. However, the commission was warned this critical piece of county funding will not be around for much longer.
With $1,308,542.94 now collected from the state, the commission can transfer those funds under state statute, County Administrator Richard Boeckman said. The resolution approved Monday puts 60 percent of the funds to the Equipment Replacement Fund and the remaining 40 percent to Capital Improvement.
These are General Fund accounts, but the money can’t be used for general operating expenses, Boeckman said. Any use has to be approved by the commission, so it sort of acts as a reserve.
The Oil and Gas Valuation Depletion Trust Fund was created as a hedge for counties against future declines in oil and gas production and the decline of tax revenue that would follow. It is made up of taxes collected by the state from oil and gas producers in each county.
In the past, the state would return 14 percent of each county’s portion back to the county.
During the 2013 Kansas Legislative Session a budget was passed that reduced the amount Kansas counties received from the fund. Due to a misunderstanding between legislators and counties about when the reduction would be enacted, the payments were reduced.
On Oct. 21, the commission opted to join a multi-county lawsuit to recover the funds. But, in January, the misunderstanding was resolved, and the funding was restored, at least for now and the governor has decided to increase the payments to counties by $7.5 million in fiscal year 2014.
 This fund is a big deal. About 23 percent of the county’s tax revenue comes from oil and gas. This would become a factor should such revenue dry up in the future.
The money could be tapped as an interim step to avoid property tax hikes while other funding options are discussed.
However, the fund will be eliminated. Barton County will receive one more $450,000 disbursement from the state later this year and one in 2015, and that will be it, Boeckman said.
The motion approved Monday authorizes this money to be deposited in the same manner as the transfer.
In other action Monday morning, the commission:
• Approved revisions to the county’s interlocal agreement on the Claflin Neighborhood Revitalization Plan, which provides tax rebates for qualified new improvements with the county performing the administrative tax functions. The agreement was first adopted by the commission in December 2013. However, after the City of Claflin submitted the agreement and plan to the Kansas Attorney General, two minor changes were required, said Claflin City Attorney Bob Suelter.