Switzerland Schools Cashing In on Drilling

November 24, 2013

BEALLSVILLE - Switzerland of Ohio Local Schools has received more than $1 million so far from Marcellus and Utica shale drilling deals, but Treasurer Lance Erlwein said Ohio's largest school district in terms of geographic area is still headed for the "fiscal cliff."

"The lease proceeds are a much needed shot in the arm to our general fund, and they will be used for day-to-day operations," said Erlwein. "Despite receiving those funds, we were still forced to make devastating cuts. And we only have enough operating funds to end this current school year - and finish the next school year."

At a predominantly rural 546 square miles, the district includes all of Monroe County, a significant portion of southern Belmont County and part of eastern Noble County. It operates three separate high schools in Monroe Central, River and Beallsville, but overall enrollment has dropped from about 3,500 in 1990 to about 2,300.

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The district has already cut insurance and some teaching positions and implemented a "pay-to-play" system for sports.

Earlier this month, district voters rejected a proposed 7.72-mill levy over five years to be used to help the district avoid an operating deficit.

"The board will begin a series of community meetings to determine what kind of education our community will support after the first of the year," Erlwein said of the Switzerland of Ohio District Board of Education. "At this point I am not recommending that we rush back on the next ballot. We will need to listen to our taxpayers and communities to see what they will support, if anything."

As the school district struggles, a plethora of natural gas companies continue fracking throughout the countryside. Erlwein figured it was only a matter of time before the district would get some of the drilling action. For about 50 acres in Powhatan Point, the school signed its lease with Paloma Partners.

The district leased another 50 acres of land in Beallsville with Gulfport Energy, and another 79 acres at the Swiss Hills Career Center campus with Eclipse Resources, according to Erlwein.

Erlwein said each lease contract will pay the district 20 percent of production royalties once the companies start pumping gas from school property. The district received a total of more than $1 million in lease bonus money for the deals.

"All contracts include a no drill clause, so no rigs or well pads can be installed on school property. The no drill clause was a must for us. We were insistent that the wells, and the ensuing mess and truck traffic, would not be acceptable on or around the school buildings," he said.

At the same time the district faces such operating challenges, an $88 million district-wide construction project continues. A new Beallsville elementary/high school, a new Monroe Central High School and a new Woodsfield Elementary already have been completed.

"I would hate to see us be forced to make additional cuts or close new buildings before those leases start paying off," Erlwein said.



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