Monday, February 25, 2013

Senate Budget Hearing: DCNR Has $1 Billion Maintenance Backlog

Department of Conservation and Natural Resources Secretary Richard Allan told the Senate Appropriations Committee Monday a recently updated inventory identified a $1 billion backlog in maintenance projects for State Parks and State Forests.
He said the agency is prioritizing the projects, in particular those involving health and safety issues, and devoting some additional resources from the Oil and Gas Fund for those projects.
“The upkeep of our parks and forests is a constant challenge. In addition to managing visitors and 2.4 million acres of land, we also maintain 121 dams; 3,720 miles of roads; 842 bridges; 68 wastewater treatment facilities; 172 public water supplies; 4,700 buildings; four ski areas; 180 boat launches; and much more,” explained Secretary Allan. “Keystone (Fund) and other funding will help address some of this growing need.

“My goal for the next two years is to work on a long-term solution to address the estimated $1 billion in infrastructure and major maintenance needs, a critical goal toward strengthening the very foundation of our state park and forest system.
“DCNR is a net revenue generator through forest products and minerals extraction on state forests, public-private partnerships and entrepreneurial management on state parks,” said Secretary Allan. “We have been able over the past several years to offset General Fund reductions by using the Oil and Gas Lease Fund to support our conservation and recreation efforts. During this time, DCNR's budget has remained intact at a time of significant reductions in other areas of state government.
“In the proposed budget, we are authorized to draw additional funds from our department- generated revenue sources to offset increased costs associated with personnel benefits, wage hours needed and other critical operations. We also would receive a slight increase in vitally needed infrastructure funds as well as for community grants.”
Most of the one hour and 20 minutes spent before the Committee was answering questions from members.  Here’s a quick summary of some of the issues raised--

$1 Billion Infrastructure Needs:  Sen. Lisa Baker (R-Luzerne) noted Secretary Allan’s testimony indicates there is a $1 billion backlog in maintenance projects in State Park and State Forests and asked how DCNR would prioritize needed improvements. Secretary Allan said the priority would be for health and safety improvements first and with additional monies coming from the Oil and Gas Fund helping to finance some of those improvements, along with Capital Budget authorizations.
Secretary Allan said DCNR is also planning to upgrade its cabins and other facilities with electric and other improvements.  He also said, on the higher end, The Nature Inn at Bald Eagle is going well with about a 54 percent occupancy, although the agency is not making any money.
Sen. Gene Yaw (R-Bradford), Majority Chair of the Senate Environmental Resources and Energy Committee, asked where the $1 billion is going to come from.  Secretary Allan said his agency is not looking for the money in the next 2 years (laugh).  The point of his earlier comment was they have updated their maintenance inventory and are prioritizing their projects.
Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee,  asked if the additional funding through Act 13 drilling fees could be used to finance maintenance needs and to provide additional funding for youth recreation programs.  Secretary Allan said some monies will be available through several agencies including the Commonwealth Financing Authority was well as directly to communities through Act 13.

In response to a question, Secretary Allan said there are no plans for building major attractions in State Parks like West Virginia.

Drilling Moratorium:  Sen. Jim Ferlo (D-Allegheny) followed up on the discussion on the potential of lifting the moratorium on more drilling on State Forest land by asking about public input into lifting the moratorium or drilling and access on or through DCNR land.  Secretary Allan said there is no discussion on lifting the moratorium.  Where private companies, not DCNR, owns the mineral rights, the companies are required to submit a management plan to the agency, including restoration, involving DCNR-owned land.

Loyalsock State Forest Drilling: Sen. Yaw asked about the status of Marcellus Shale drilling in the Loyalsock State Forest saying he has received many questions about drilling in the area.  Secretary Allan said two private companies own the mineral rights in the area and not DCNR.  One of the companies asked DCNR some time ago about issues related to drilling in the area, but DCNR asked them to hold off on plans for drilling until issues could be examined in more detail.  In particular, one of those issues is access across DCNR-owned land in some areas since there is a patchwork of private and DCNR landownership in the area.
In response to a question from Sen. Yudichak, Secretary Allan said the moratorium on drilling in state forest land where DCNR owns the mineral rights remains in effect.

Royalties From Drilling On DCNR Land:  Sen. Yaw asked for a status report on royalties DCNR collected so far from drilling on State Forest land.   By June 30, Secretary Allan said, DCNR will have collected $60 million in royalties for this fiscal year which are used, with Budget Office approval, for agency operational costs.  (Click Here for more on drilling in State Forest land.)
Sen. Larry Farnese (D-Philadelphia) asked about tracking royalty payments from drilling on State Forest land.  Secretary Allan said DCNR has staff devoted to tracking royalty payments to make sure everything due the agency is paid where drilling occurs on State Forest land.

Securitizing Drilling Fees: Sen. Yudichak asked DCNR, like he did with DEP last week, if the agency was looking at the potential for securitizing some of the revenue from drilling to provide for maintenance project funding.  Secretary Allan said he was not aware of any discussion of securitization.

Drill Site Restoration:  Sen. Tim Solobay (D-Washington) said the Game Commission has indicated restoration of drilling sites results in the creation of new habitat for wildlife and asked if there was a similar experience with DCNR.  Secretary Allan said DCNR works closely with drilling companies on restoration plans with each drill site and access roads and they have seen a similar experience in opening areas for habitat.
Sen. Yaw commented Marcellus Shale drilling creates greater public access to certain areas for recreation or hunting and fishing activities as a result of access road and pad construction, in particular for handicapped individuals.  Secretary Allan said more and more of their areas are open to the public and DCNR is working with groups, like Wounded Warriors, to provide additional access.

State Forest Sustainability Certification: Sen. Randy Vulakovich (R-Allegheny) asked if State Forest would have been certified as sustainable if DCNR was mismanaging Marcellus Shale drilling.  Secretary Allan said there are many factors going into managing State Forests in a sustainable way.  He noted the certification was recently renewed.

Emergency Response At Well Sites: Sen. Lisa Baker (R-Luzerne) asked for a status report on compliance with Act 9 providing for emergency response on drilling sites.  Secretary Allan said DCNR is complying with and working with the relevant agencies on the signage and other steps required under Act 9.

Shallow Oil & Gas Wells: Sen. John Wozniak (D-Cambria) asked how many shallow oil and gas wells, not Marcellus wells, are on State Forest land and if there have been any problems with them.  Secretary Allan said there are about 100 shallow oil and gas wells on State Forest land and would provide more information to the Committee.

Natural Gas Vehicles: Sen. Baker asked if DCNR is looking into using natural gas-fueled vehicles.  Secretary Allan said the agency was looking into that issue for several types of fuels as well as looking at the potential of sharing fueling stations with other agencies.

Leasing Other State Lands For Drilling: Sen. Baker asked about the status of leasing other state lands under Act 147 of last year.  Secretary Allan said DCNR is working with the Department of General Services on identifying Marcellus Shale areas and, if asked, would handle the actual leasing under an agreement with DGS.

Drilling Health Study: Sen. John Blake (D-Lackawanna) noted the $1 million grant to the Geisinger Health Service last week to study the potential health impacts associated with Marcellus Shale drilling and asked if he knew the status the study efforts.  Secretary Allan said DCNR was not involved in that issue, but there are a number of recommendations made by the Governor’s Marcellus Shale Commission, including health-related issues, that have yet to be adopted, but he noted agencies are working through them.

Keystone Fund: Sen. Yudichak ask if there is any thought about taking funds away from the Keystone Recreation, Parks and Conservation Fund to use for other purposes in this budget cycle.  Secretary Allan said there is not in this budget cycle.

Conservation Partnership Grants: Sen. Judith Schwank (D-Berks) asked if DCNR is able to fulfill all the requests for recreation and park funding under the Community Conservation Partnership Grants.   Secretary Allan noted the most recent grant round awarded $26.5 million in grants, but there was almost three times as much applied for.

Heritage Park Funding: Sen. Yudichak asked if the Heritage Park Program funding is being eliminated in FY 2013-14.  Secretary Allan said the line item was proposed to be eliminated as it was in past budgets.  However, Heritage Areas are eligible to apply for grants under DCNR’s Community Conservation Partnership Grants Program.
Sen. David Argall (R-Schuylkill) asked if DCNR would object if the Heritage Park line item would be restored and Secretary Allan said no.

State Park Fee Increases: Sen. John Gordner (R-Columbia) asked about potential increases in State Park use fees.  Secretary Allan said DCNR reviews its fee structure each year, comparing the fees with other states and similar facilities.  Secretary Allan said DCNR has increased the number of private concessionaires to operate some facilities and activities to allow agency staff to focus on the management of the parks and forests and to better leverage its existing resources.
Sen. John Wozniak (D-Cambria) asked if there has been discussion about a per user entrance fee for State Parks.  Secretary Allan said by law DCNR is prohibited from charging a per user or parking fee for State Parks.  

Growing Greener II Debt Service: Sen. Blake asked if the debt service payment for the Growing Greener II bond issue taken from the Environmental Stewardship (Growing Greener) Fund will increase.  Secretary Allan said he believed it was a flat amount continuing until the bonds were paid off.

Dirt and Gravel Road Program: Sen. Elder Vogel (R-Beaver) asked about the adequacy of funding for the maintenance of DCNR’s 3,500 of State Forest and State Park roads.  Secretary Allan said the agency could always use more funding for road and other maintenance, but they are pulling some additional funding from the Oil and Gas Fund for these purposes.  Sen. Vogel then asked if Dirt and Gravel Road Funding should be included in the Governor’s Transportation Plan and Secretary Allan said they would be looking to increase the allocation for the program.
Sen. Jake Corman (R-Centre), Majority Chair of the Senate Appropriations Committee, supported the Dirt and Gravel Road Program and urged that it be part of the Governor’s Transportation Funding Plan.  Note: a portion of the Dirt and Gravel Road Program funding goes directly to DCNR and the remainder to county conservation districts to conduct road repairs and rebuilding.

Forest Pest Management: Sen. Yaw asked why some line items related to forest pest management seem to be zeroed out.   Secretary Allan said budget line items were consolidated so that about $12 million in funding is now in one place so it can be managed more efficiently.  He noted an office and laboratory dealing with forest pest management in Middletown was moved to the central office and laboratory space leased from the Department of Agriculture resulting in significant savings.

Ryerson State Park Dam Repairs: Sen. Tim Solobay (D-Washington) asked about the rebuilding of the lake at Ryerson State Park dam and lake which was damaged by underground longwall coal mining.  Secretary Allan said there is a meeting planned with stakeholders in the area this week to go over their plans and an expected settlement with Consol coal company is expected to pay for the rebuilding of the dam.

Conservation Landscapes Initiative: Sen. Schwank asked if DCNR coordinated with other agencies as part of the agency’s Conservation Landscapes Initiative.  Secretary Allan said DCNR works with a variety of local partners and other state agency partners in its initiatives.

Community Input: Sen. Ferlo commented there should be a close relationship between DCNR’s initiatives and local communities and businesses to ensure local input.  Secretary Allan said there is, for example, an open process for bidding projects as concessions in the local area.

ATV/Snowmobile Trails: Sen. Wozniak asked if there has been any conversation about destination trails for ATVs and snowmobiles running across the state.  Secretary Allan said DCNR is always looking for opportunities for connecting trails to State Forest and State Park trails.  He noted DCNR is working on a study in Armstrong County to better connect trails.  He said upgrading ATV trails requires more funding than snowmobile trails.

Cell Service Tower Leasing: Sen. Vulakovich asked about the status of renting DCNR facilities as cell towers.  Secretary Allan said the agency is looking for opportunities to lease existing structures-- water and fire towers for example-- to expand cell service in State Parks and State Forest areas not only to provide additional revenue, but to provide for public safety.  He noted DCNR does not allow the construction of regular cell towers on their property.

Scouting Project Opportunities: Sen. Vulakovich asked if there are opportunities for scouts to do projects in State Forests and State Parks.  Secretary Allan said DCNR does work with scouts and local friends of parks and forests groups to make these connections.

Timber Sales: Sen. Blake noted revenue from timber sales from DCNR lands was up and asked if he knew how much of the timber was going for international sales.  Secretary Allan said they deal with local timber companies and do not generally know where the timber is sold.

Consolidation with Fish & Boat and Game Commissions: Sen. Corman asked if it was feasible, sometime in the future, to consolidate the functions of the Fish and Boat and Game Commissions with DCNR.  Secretary Allan said they do work with the Commission on the Natural Diversity Inventory and noted their missions are compatible.

A copy of Secretary Allan’s written testimony is available online.

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