Garfield County gas production audit going ahead

GLENWOOD SPRINGS - Garfield County plans to spend up to $250,000 to go back five years to audit energy companies' reports of natural gas production.

The audit is intended to fulfill the major campaign promise of county Assessor John Gorman, who successfully unseated incumbent Shannon Hurst in last November's election based largely on a pledge to make sure the energy industry pays its fair share of taxes.

County commissioners on Monday approved a contract to pay up to $250,000 to Martindale Consultants to audit gas production from 2002-07.

The audit for 2002 gas production will focus on three companies: Williams Production RMT, EnCana Oil & Gas (USA) and Petroleum Development Corp. Williams and EnCana are the county's two leading natural gas producers.

With the county's drilling boom, gas production has become a chief source of revenues for many local taxing entities. Although some gas production auditing had occurred under Hurst, Gorman contended during his campaign that more needed to be done, and that the energy industry may have underpaid taxes by millions of dollars.

Energy companies have said they disagree with Gorman's contention, but stand ready to work with him when the auditing occurs.

Although Gorman centered his campaign on the issue, proceeding with the audit has taken a year, as he has first focused on familiarizing himself with running the assessor's office. Gorman did not attend Monday's meeting at which commissioners agreed to his contract request.

Commissioner Larry McCown said he wants the three companies targeted for the 2002 audit also to be audited through 2007. Under the contract, he said, eight companies would be audited for gas production in 2005.

Commissioner Trési Houpt said, "It makes practical sense to me to start with these three, but I anticipate we will assess the potential addition of all the (energy) companies that are working in our county."

County attorney Don DeFord said the audit also will require additional legal staff, and will result in travel and office remodeling costs for his office.

"The contracting is only one piece of accomplishing this task," he said.

He said if the audit produces additional tax proceeds, state law allows the county to recover a substantial portion of the costs of the audit from those proceeds before distributing revenues to other taxing entities.

Contact Dennis Webb: 384-9119dwebb@postindependent.com



Post Independent, Glenwood Springs Colorado CO