$11 Million in Grants Are Just One Benefit from Federal Mineral Leases in Mesa County

$11 Million in Grants Are Just One Benefit from Federal Mineral Leases In Mesa County

Since 2011, the Mesa County Federal Mineral Lease District has granted over $11 million to various projects that benefit every community in Mesa County.

But what exactly is a federal mineral lease? Approximately 70% of the land in Mesa County are public lands that the federal government manages. The government has leased usage of these lands for over 100 years for various needs like logging, cattle grazing, and leases for minerals like gold, silver, oil, gas, copper, zinc, limestone, gypsum, gemstones, and many others.

The Mineral Lease Act of 1920 was established to ensure minerals were produced responsibly for the benefit of the government and the local communities directly impacted by extraction operations. This act outlined the lease and royalty payments that needed to be made to help offset the impacts on local communities who were left with trying to repair roads and bridges to and from the extraction sites.  The states were required to receive 50% of the gross revenues where the drilling or extraction took place, with 40% going to the Reclamation Fund and 10% to the Federal Treasury. The royalty rate for new leases was increased in 2022 from 12.8% to 18.75%.

Mesa County government received the federal mineral lease payments until 2011. The Colorado legislative body worked together and passed Colorado House Bill 11-1218. This allowed the creation of federal mineral lease districts. The Mesa County Federal Mineral Lease District was established on June 20, 2011, by the Mesa County Board of County Commissioners through Resolution MCM 2011-050. 

In 2019, revenue from oil and natural gas leases on onshore federal lands totaled $4.2 billion. Of that $4.2 billion, $32 million was distributed to Colorado.

The FML payments are distributed to Colorado’s Department of Local Affairs (DOLA). DOLA then distributes the payments to local counties, municipalities, and school districts, along with Federal Mineral Lease Districts (FMLD), where mineral leasing activities occurred.

In the 2021 Annual Report of Federal Mineral Lease Fund Distribution from DOLA, Colorado School Districts received $1,367,162 in direct FML distributions. Mesa County Valley School District received $67,414.11; Plateau Valley School District 50 received $1,120.57; and De Beque 49JT School District received $413.87.

The MCFMLD is limited by federal law on how the funding may be used. MCFMLD is allowed to distribute the funds through a grant program. Funds can be used for planning, constructing, and maintaining public facilities or providing public services. Eligible entities able to apply for an FML grant are the state and all state political subdivisions like municipalities, school districts, public and state-controlled institutions of higher education, library districts, fire protection districts, metropolitan or other special districts.

MCFMLD has awarded grant funding for projects like Mesa County Valley School District and Caprock Academy Safe and Secure Locks for schools, Town of Palisade Downtown Street Reconstruction, 970 West Studio, street repairs in De Beque, and the new Clifton Community Center. The community of Fruita has received $710,000; Whitewater/Lands End community has received $59,597; Grand Junction community has received $8,359,258; Clifton community has received $1,014,064; Palisade community has received $1,010,209; De Beque community has received $431,530; and Collbran community has received $976,468.

The makeup of the MCFMLD is a volunteer board of three individuals and subcontract workers who manage the district’s operations. The board is required to be made up of one current county commissioner, one oil and gas representative, and one at-large community member. The Mesa County Board of County Commissioners appoints each board member.

The MCFMLD typically holds two grant cycles annually; however, due to the decline in funding, it has had to combine its grant cycles into one in the fall. This year, the MCFMLD has $350,000 available for grant awards. The grant cycle will open on August 1, 2023. Applications will be available on the website for mini and traditional grants.

A mini-grant is a request for up to $50,000 with no cash match. The project is to be a shovel-ready project, estimated to be completed within the year. A traditional grant is for any monetary request higher than $50,000 that is a shovel-ready project and requires a 30% cash match from the grant applicant. The project can take up to two years to complete.

By creating an FMLD, Mesa County ensures the continued benefits and use of mineral leasing funds. Utilizing public lands in our community and ensuring mineral lease royalties continue for our community impact is crucial. Every Mesa County community member has benefited from these funds and local grants. From improved streets, library facilities, a new community center, safer schools, new roads, fire department equipment, or water and sewage treatment facility upgrades-all these add up to a strong and healthy community thanks to FML funds.

With many new construction projects in the Grand Valley, we look forward to funding the future with FML dollars.