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Frederick OKs oil/gas tax collection pact

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Intergovernmental agreement to better report amount of tax revenue allocated to Weld County municipalities: Page 3

By Ben Wiebesiek

FREDERICK — The Town Board of Trustees unanimously approved an intergovernmental agreement March 25 with Weld County to help collect tax revenue from the booming oil and gas work happening in the county.

“This is for the purposes of collecting Colorado severance tax and federal mineral distribution tax for oil and gas employees,” Town Manager Matt LeCerf said before the vote. “An individual, Mr. Bill Jerke, has been pioneering this charge on behalf of all the municipalities in Weld County — and Weld County, themselves — to actually meet with the oil and gas entities, and make sure they’re doing what they’re supposed to in terms of reporting the amount of taxes that need to be paid to the state.”

Accurate reporting determines the amount of tax revenue allocated to municipalities such as Frederick, LeCerf explained.

“This directly impacts our bottom line, and it’s something we did not do last year, but the year before we did do this, in 2012,” LeCerf said. “We’re hopeful that we can see a significant change compared to what you’ve seen between 2012 and 2013.”

Jerke, who resides in LaSalle, is to be paid a base amount of $20,000 plus a bonus amount of 5 percent of the state’s distribution per employee. The recently approved IGA is only for work done by Jerke in 2014.

“This allows and provides toward more leverage with the oil and gas companies to ensure they’re reporting what they are supposed to,” LeCerf said.

The contractor position is described as providing several services to help the county and state collect severance tax.

“Contractor shall solicit and encourage oil and gas service companies performing services for oil and gas operators working within Weld County during 2013 to report their employees’ home addresses to those operators,” the IGA reads. “The operators will then be encouraged by the Contractor to report such information, along with information regarding their own employees’ home addresses, to the Colorado Department of Revenue, for 2014 reporting purposes.”

To accomplish this goal, Jerke will have access to the county’s geographic information systems.

In 2013, county records reported 4,353 oil and gas employees resided in Weld County. Frederick was home to 63 employees, Firestone had 57, and Dacono had 42 oil and gas employees. 

In unincorporated Weld County, there were 741 residents employed in the oil and gas sector in 2013.

In a packet distributed to the Frederick trustees, town staff explained that the fee being charged by Jerke has increased from $10,000 (when last approved) to $20,000.

“Consequently, Weld County has requested that the other municipal governments in the County assist with the payment of the flat fee by paying a proportionate amount based on the number of oil and gas employees in their municipality,” the town memo read. “The Town has 63 of the 4353 oil and gas employees in the County and our fee for this service would be $144.73. Additionally, if there are any additional employees above the 63 in the Town, we would pay 5% of that collection amount with a maximum of $50.00.”

“I’m not sure what this guy does and I’m not exactly sure why his fee doubled,” Mayor Tony Carey asked LeCerf. “I think basically what he does is call the oil companies and have them report the addresses, home addresses, of oil and gas employees?”

“I’m not sure how he goes about it,” LeCerf responded.

“Perhaps you can pass my concerns along to Commissioner Rademacher,” Carey said.