Local Impact Fees, Pre-Emption Dominate Public Hearing

Mt. Pleasant Township Supervisor Larry Grimm said his small community has paid out almost $180,000 over the last few months alone—money spent on staffing and legal fees associated with Marcellus Shale drilling there.

“Some are saying that should not be (considered) for an impact fee,” he said at the Marcellus Municipal Co-op’s public hearing Wednesday night. “Your thoughts, sir?”

Although the first speaker, Elam Herr, with the Pennsylvania State Association of Township Supervisors agreed that those expenses are directly related to drilling, how to quantify the impact of Marcellus Shale development in local communities was a major talking point throughout the evening—with some dissenting opinion.

This was the first public hearing of the MMC, which was spearheaded by state , and included 15 representatives from some of the 18 municipalities that belong to the group.

The purpose of the hearing was to discuss whether a local impact fee on Marcellus Shale should be imposed, what the actual impacts are and how any money raised through such a fee would be distributed.

Herr, one of five panelists who testified, was clear: “We support an impact fee—purse, sweet and to the point,” he said, adding that the association believed most of the money should come back to the local municipalities that are most effected.

He went through a list of impacts—both directly and indirectly related to drilling—and said officials should be cognizant that some of them could affect communities for years to come.

Because of that, he said the association believes that as long as a well is active and producing, “then money should come back to the host municipality.”

Herr was also clear on another issue that became a major theme for all of those who testified Wednesday: The concept of pre-emption, which means a state ordinance governing drilling would supersede local ones.

Members of the MMC queried Herr and the rest of the panelists about whether they were for or against local municipalities being required to adopt a statewide model ordinance governing drilling in order to receive any proceeds from a local impact fee, as one piece of legislation in the state House suggests.

Herr, Grimm and a host of MMC voiced their vehement opposition to the idea of pre-emption.

 Supervisor Andy Schrader said he was against the concept. He said his concern was that a statewide ordinance wouldn’t tailor to the specific needs and zoning districts locally.

If, for example, drilling is allowed as a permitted use in industrial zones, that would mean active wells could in theory be close to an elementary school in Cecil, Schrader explained.

“This is a perfect example of why we need control on where they can and where they can’t go,” he said.

Also paramount to the conversation was how the money derived from a possible impact fee would be allocated.

Most of the panelists, which included representatives from Commonwealth Foundation,Pennsylvania Budget and Policy Center, and the Marcellus Shale Coalition, agreed that money should stay local.

But Andrew Heath, executive director the environmental coalition Growing Greener, urged legislators and those in attendance to support a portion of an impact fee to go toward renewing funding for the agency, which he said has seen “catastrophic” cuts over the past few years.

He said by funneling money to the agency through a “robust” impact fee, the state would ensure that its natural resources were conserved for all—because he said the long-term environmental consequences of drilling would affect more than just those living in areas where there are active wells.

But then, Elizabeth Stelle of the Commonwealth Foundation said the right-leaning policy group believes drilling companies should “pay for the government they use” and opposes any new tax on Marcellus Shale drilling.

“We do not see the need for a severance tax or impact fee,” she told members of the MMC, explaining that nobody has been able to properly qualify or quantify the impact of Marcellus Shale drilling at the local level.

Stelle then went through a laundry list of taxes paid to the state by the industry, saying that Marcellus Shale development has caused “instant prosperity” in many communities—but admitted it doesn’t come without its “growing pains.”

She also said that if an impact fee were to be imposed, it should be at the local level.

“We don’t think it’s something that should be handled at the state level,” Stelle explained, adding that industry leaders have spent large sums of money on everything from road improvements to community events.

Some of the MMC members scoffed at the notion of individual municipalities negotiating with large corporations.

“You assume the industry takes us as individual municipalities seriously,” one quipped.

That’s when Schrader chimed in.

“It’s nice that they come to the county fair and buy livestock,” he said, referring to companies such as Southpointe-based Range Resources. “But very little taxes come to us. The taxpayers are the ones that are stuck with all of this.”

Steve Ford, who represented the Marcellus Shale Coalition, was the last panelist to speak—and told MMC members about the organization representing members of the industry, and about its mission.

The testimony didn’t include specific information on the organization’s stance on the concept of local impact fees or pre-emption, which was one of the first questions members of the MMC asked: Are you in favor of a “reasonable” fee?

“We are on record and we would support an impact that is fair, clear and concise,” he said.

He was unable to answer other specific questions, however, about pre-emption and how and who would put together a model ordinance.

Ford simply said that a “fair baseline” for what qualifies as a local impact needs to be defined, and that a model ordinance would be easier for the industry to navigate than numerous individual ones.

He said the coalition doesn’t want to “endorse or dismiss” any proposal offhand, and said it looks forward to ongoing discussions and dialogue among all stakeholders.

The evening ended with a brief public comment section—when about a dozen people stepped up and addressed the panel.

Reached Thursday, White, D-Cecil, who spearheaded the MMC, said he thought the hearing was a success.

“You can go to a lot of Marcellus Shale meetings and see people yell. I think it’s important to have rational debate,” he said. “We need to be kind to accomplish something or it’s all just noise.”

And he added that the three-hour hearing allowed all involved to have a better understanding of all the intricate issues involved with the concept of a local impact fee.

“This isn’t a black-and-white issue,” he said. “There are varying shades of gray.” 

Editor's Note: PCN will air the public hearing in its entirety at 7 p.m. Monday. To read the full written testimony from the panelists, please click on the attached files.