But when it came down to dividing up the $225 million associated with the County Transportation Infrastructure Fund Grant Program, many were surprised to find out that much of the funding would be given to counties that have very little oilfield activity, or none at all.
Karnes County, which has seen its county roads seriously damaged over the past four years, is at the bottom of the list, when the grant funding is expressed as a fraction of its annual oil and gas production.
For example, Milam County is slated to receive $2.74 per $100 of its 2013 oil and gas production, while Karnes County is only set to receive eight cents per $100 value of the $8.53 billion in annual oil and gas produced in Karnes County in 2013.
The reason for this disparity, according to Karnes County Judge Richard Butler, is that the amounts given to the different counties were not based on a system designed to be directly proportional to the volume of oil and gas produced within those counties.
According to information from TxDOT (Texas Department of Transportation) the amounts of the grant awards were based on a combination of ratios for weight tolerance permits, oil and gas production taxes, well completion, volume of oil and gas waste injected.
La Salle County sued TxDOT in May claiming that many counties who are slated to receive funding, did not follow the rules or complete the necessary paperwork required in order to be eligible for grant funding. As a result, the $225 million, has been diluted among a list of 191 counties, and in the meantime, the counties that need the money the most, are getting grant amounts that are only a small fraction of what they need to make the necessary repairs.
“The lawsuit is aimed at increasing the amount of money that will be allocated to the counties that have been affected by recent oil and gas activity, that have corporally competed and filed in a timely fashion the paperwork the state requires for eligibility under the program,” Karnes County Judge Richard Butler said. “The lawsuit claims that La Salle County is in total compliance with this.”
La Salle County has been affected adversely by the Eagle Ford Shale development, and the same can be said for Karnes County, as well, Butler explained. La Salle and Karnes both followed the rules and complied with all the requirements of the program.
“The way I understand it, a large number of counties submitted applications and asked to be put in the pool to receive these funds that either didn’t properly submit an application – didn’t get the correct information to TxDOT (Texas Department of Transportation) and should not be eligible for that reason, and/or were not really affected in the zone of recent drilling and energy related activities,” Butler said.
“If the plaintiff prevails in the La Salle County case, the best case scenario for us would be for the court to find that we are one of the ‘good guys’ – one of the people truly impacted and we submitted our paperwork correctly, and they are going to take back the money they were going to give to some of those counties and then reallocate the funds,” Butler said.
The problem however, Butler explained, is that no injunction has yet been obtained by attorneys representing the plaintiffs, and therefore the program is moving forward according to the original plan and timeline.
“The counties are submitting their applications and entering into their agreements with TxDOT and are actually now starting to get money,” Butler said. “It is moving forward.”
Another issue, Butler said, is that the money Karnes County is slated to receive – will only support about a year’s worth of work. The $7.6 million dollars that Karnes County is expected to receive from the program, will only repair a small fraction of the damage that has been inflicted on Karnes County roads over the past several years.
Butler said it has hard to estimate the cost to bring Karnes County roads back to a “pre Eagle Ford oil boom” condition, but officials with other counties have come up with figures in excess of $100 million, and the grants awarded, in some cases have been less than five percent of what it would take to complete comprehensive repairs and reconstruction.
The damage to county roads is one of the “downsides” to the oil boom, Butler said, but there are many “upsides” as well, such as new opportunities and new jobs that pay far beyond the minimum wage. The flow of billions of dollars through these communities is leading toward an unprecedented transformation for thousands of people who live and work in the Eagle Ford Shale region.
Safety of the roads is a major concern to local officials, Butler said, as damaged roads are becoming more and more hazardous to drive. Butler said he is also hopeful the state will find funding for much needed repairs for federal and state highways such as the Farm-to-Market roads that cross Karnes County.
Repairs to both the state highways and county roads are in the state’s own interest, county officials have stated, as they are needed to keep the flow of oil and gas production moving – an activity that feeds billions of tax dollars into state coffers each year and is expected to keep doing so for many years to come. Experts say this infrastructure is critical to sustaining the “cash cow” that from which the State of Texas is now reaping the benefits in the form of tax revenue.
As for now, Karnes County is hopeful to move forward in the near future with about $7.16 million in county road and bridge projects connected to the program.
If not the solution to the entire problem, county officials say it is a step in the right direction and they hope state leaders will take action in the future for more steps toward making much needed repairs and reconstruction of the county’s roads and bridges.