China Spring ISD Taking Lease Bids

China Spring schools hope to benefit from lucrative gas deposit
Monday, February 05, 2007
By Mike Anderson
Tribune-Herald staff writer
The China Spring Independent School District is looking to tap into a large natural gas field that has made millions of dollars for some North Texas schools.
The district, in northwest McLennan County, is taking bids to lease about 100 acres to gas companies for possible drilling in the natural formation known as the Barnett Shale. Bids are due into the district later this month.
China Spring sits on the southeastern edge the formation that has been the site of a huge natural gas boom, as thousands of wells have been drilled into the gas-rich shale lying west of Interstate 35.
The gas field has made hundreds of people rich overnight near the epicenter of production in the counties near Fort Worth. Individual property owners and school districts alike have made millions from signing leases on a few hundred acres, and that doesn’t include future royalties as gas is pumped from the ground.
For instance, Fort Worth schools made $1.3 million in May for leasing out about 160 acres, a fraction of the land the district is considering leasing for drilling.
Though drilling has not yet begun in McLennan County, dozens of property owners have signed leases, many around China Spring. The first McLennan County gas drilling permit, approved by the state in December, was for a piece of property that sits a few miles from China Spring ISD property.
“There’s quite a few people in China Spring who are getting very excited about this,” said Jim Gleason, China Spring ISD board president.
He added: “It’s hard to say what this could actually mean for us. If we hit the mother lode, well, that just produces and produces — it could really be a benefit.”
Officials in other districts near China Spring, including Crawford and Bosqueville, said so far they have not been approached about signing gas leases.
Because China Spring ISD is in the bidding process, officials would not speculate on what types of offers the district might get for a gas lease. In Arlington, the district leased school property to a gas company for $5,700 an acre, and Mansfield schools leased for $7,875 an acre, officials with both districts said. But in McLennan County, most property owners have been offered leases for no more than $450 an acre.
Whatever income a lease or well might bring, China Spring certainly has the need. The district recently completed a demographics study that shows the area’s population is growing, and that will mean extra expense to handle additional students.
“We are going to look at all avenues for funding and any more income would be greatly appreciated,” Gleason said.
However, school officials are aware that a well would not produce an endless revenue stream, so no income from gas will be used to obligate the school to any additional long-term expenses, CSISD Superintendent George Kazanas said.
Property owners living in the district likely shouldn’t expect a tax break if gas money starts rolling in, said officials with other districts that already have benefited from the Barnett Shale.
Mansfield Independent School District has gotten about $3.5 million in bonuses for signing gas leases, said Lou Spiegel, the district’s associate superintendent of business and government affairs. And though property values are going up in the district because of the underground wealth, the district is not expecting to cut its tax rate, she said.
“The increase in property values will mean more money coming into the district from landowners, but then the state would cut back that amount of its funding,” Spiegel said. “That’s what you get with the state’s funding formula. The state would end up saving money in the long run, but not the property owners.”
China Spring officials also said no drilling will take place close to schools or areas where children gather.
“We are going about this very cautiously, and we are going to keep the interests of the schoolchildren first and foremost,” Gleason said.

manderson@wacotrib.com