Duncanville’s general fund gets $350k ‘bonus’ check

by Angel Morris of Duncanville TODAY

Cha-ching.

The city of Duncanville was excited to receive a $350,000 bonus last month, but there's hope that the unexpected cash doesn't stop there.

A 49.97 acre tract of land purchased in 1969 as a landfill could prove to be a treasure trove instead, when natural gas drilling begins.

“We no longer own the land, the federal government owns it. (They took it) in the late '70s to create Joe Pool Lake, removing all of the garbage that had been placed in the landfill and transporting it to another landfill,” City Manager Kent Cagle said.

The land is in the city of Grand Prairie and partially submerged under Joe Pool Lake. Duncanville retained the mineral rights to the tract, earning it the signing bonus from Adexco Operating Company of Fort Worth.

“We have received the $350,000 and the council has not decided how to use it. However, this is a one-time check and we will not receive any more funds until the drilling actually occurs and they have completed a successful well,” Cagle said.

The bonus was allocated to the city's general fund, but not earmarked for any particular expenditure. Some suggested residents reap the benefits.

“It's a big boon for Duncanville and should help with the taxes. In fact, we would suggest that there be a tax rollback for homeowners,” Jon and Mary Crawford of Duncanville said via e-mail Aug. 1. “We want to know exactly what Duncanville plans to do with this money. Putting it in the general fund and doing this and that is not acceptable; accountability is necessary.”

Cagle anticipated the monies going toward one-time projects.

“I would expect the money would go to some capital improvement or other one-time type of expenditure. We should not hire new employees, add programs of a recurring nature or cut taxes based on a one-time revenue,” he said.

According to Cagle, one possible use would be the improvement of the intersection of Wintergreen Road and Main Street along with the widening of Wintergreen from Main to Cockrell Hill Road.

“That is a $10 million dollar project, but through Federal transportation funding, Dallas County funding and funding from Cedar Hill and DeSoto, our share will be about $2.2 million,” Cagle said.

“We do not have funds available at this time and within the next two years we will need to issue debt or come up with some other funding source for our $2.2 million. The $350,000 could be used as part of the funding for the Wintergreen project.”

Cagle also warned that the unexpected funds no way guarantee future monies.

“It is not wise to reduce taxes based on a one-time revenue. Taxes fund salaries, utilities, supplies and the like that occur every year,” Cagle said. “We will not get a lease check every year. This $350,000 was a one-time event.”

Royalties from any future natural gas production will equal 25 percent of its value.

“We do not know how much that will be at this point in time, if any. There is always the chance that there will be a dry well,” Cagle noted.

Adexco has leased a neighboring property and will access the property horizontally because gas or oil drilling is not allowed on government property. Adjacent access, however, is typically allowed.

The property spans more than 20 counties and is estimated to hold 26 trillion cubic feet of natural gas. Duncanville approved a three-year lease with Adexco and, for now, can only sit in wait of anticipated drilling and potential revenues.

“We have no idea when they will begin drilling other than they must drill within the next three years. Otherwise, they will have wasted their investment of $350,000,” Cagle said. “Their lease states they have three years to drill or the lease is over. They can buy one additional year for another $350,000. If they do not drill in that final year, the lease is completely exhausted with no renewals.”