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Wellsville nets $1.9M windfall

November 14, 2011
Weirton Daily Times

WELLSVILLE - A lease signed last weekend with Chesapeake Energy for gas and oil drilling will mean a $1.9 million windfall to the village.

Fiscal Officer Dale Davis signed the lease at a meeting in Minerva after Village Council authorized him to do so during a special council meeting on Nov. 4.

The lease was negotiated on the village's behalf by the Association of Ohio Valley Landowners and will "bring in the neighborhood of $1.9 million," according to Mayor Joe Surace, who said Tuesday he wasn't sure when the village will actually receive the money.

Unlike some communities which jumped at the chance to sign up with Chesapeake, Wellsville officials took their time, according to Surace, who said that resulted in the village reaping $5,800 per acre for more than 300 acres of public property.

In addition, the village will receive 20 percent royalties once drilling begins.

At this point, it appears the village has snagged one of the more lucrative contracts in the county, although the county park district recently signed a contract for $5,000 per acre.

A cursory look at other entities showed Salineville appears to have agreed to the lowest amount at $1,900 per acre in March. Other examples include United Local, $2,000 per acre; Beaver Local and county career center, $2,250; and commissioners, $2,750.

Surace said there have been several discussions on use of any revenue generated by gas and oil leasing, saying one scenario would be to bring the budget into line by paying up all bills and using $250,000 for raises for employees, "who haven't had a raise for awhile."

A second scenario, Surace said, again would include paying up all bills and then investing the rest of the money.

In July, Councilman Sue Haugh insisted the best use for the revenue - estimated at that time as about $500,000 - would be as the village's matching share for road and sidewalk projects.

However, at that time, finance Chairman Tony Cataldo pointed out one street project cost upwards of $500,000 and cautioned that the windfall is "not going to be another fiscal emergency 'save me.'"

Nonetheless, Surace said Tuesday, "This money will help the village out a lot."

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