By JONATHAN ZWEYGARDT
Hays Post

Ellis County is expected to be forced to do more with less — that is the opinion of one Ellis County commissioner as the county deals with a projected cut in funds because of the drop in oil prices.

With the county expecting to see a large drop in in oil and gas production taxes, Ellis County could be facing a deficit of close to $2 million in the 2016 budget.

 

Commissioner Dean Haselhorst presented the commission with an oilfield economic report at a special meeting Wednesday afternoon.

Haselhorst, a production foreman for Argent Energy, told the commission and a group of county employees the oil industry has seen a 70-percent reduction in revenues with no reduction to lifting costs.

Lifting costs are the costs to get a barrel of oil or gas to get it out of the ground.

Haselhorst said after a quick survey of surrounding counties he estimates approximately 400 people have been laid off in oil field services and he said if the low prices continue that number will rise.

He also said area businesses are telling him they are starting to feel the effects because people are not buying new vehicles, equipment, and goods and services.

Haselhorst said even the company he works for has had to cut back on hours and, while he is still working 40 hours a week, he is down to just two days in the field. He said he used to work up to six days a week in the field.

As it pertains to the county, Haselhorst said the county might be forced to ask more of its employees.

“Hiring more employees is simply a(n) expense that we can’t afford, I feel at this time,” Haslehorst added. “We all need to look at ways to cut.”

He also said that even if the price of oil goes up soon it will still take time for the county to rebound.

The possibility of using the oil and gas depletion fund to fill a purposed shortfall but County Administrator Greg Sund said that one the county spends the $3.1 million in the fund they will never get that money back.

The commission also agreed it would continue with the recent policy that every department must justify, to the commission, the need to fill the position.

Currently, there are four open positions in the Public Works Department, including two mechanics.

Public Works said it spent $38,739 in outside labor.

Sund estimates it costs between $50,000 and $60,000 to hire a new employee, which includes salary, benefits and KPERS.

Sund said they may have to look into hiring a contractor to complete some of the mechanic work.

The county is expected to get a first look at the oil and gas figures for 2015 in May.