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The Friends of Salt Springs Park, Inc. • PO Box 541 • Montrose PA • 18801 • 570.967.7275 • info@friendsofsaltspringspark.org



Inside Our Gas Lease: Your Questions Answered

Updated November 22, 2014



The Friends' Board of Directors signed a nonsurface, no-access lease with Fortuna Energy, now Talisman, for 137 acres under what we call the "Friends Land." That land is not part of the 405-acre state park. The lease specifies that Talisman "will not drill, lay pipeline, store materials, conduct surface operations, or enter for any purpose whatsoever upon the surface of the premise."

Before making the decision, the Board spent two years researching and debating the pros and cons of signing a lease. The first concern was what the effect on the land might be if we signed. The second was how we could continue to fund our mission if we didn't.

The lease allows no gas company access to the 137 acres. No roads will be built. No pads, no drilling, no traversing. We did not allow seismic testing. These acres will remain open and accessible to all, seamlessly, with the other 300-acre parcel the Friends own and the 405 acres the Friends manage for the state of Pennsylvania. The lease we signed will not harm the land.

We've had to face some hard financial realities in the past couple of years. Our main sources of income are grants, donations, memberships, and camping fees. The grants and donations allowed us to restore and enhance the buildings and grounds and to purchase 437 acres for conservation. We've been so successful at transforming Salt Springs that year-round park usage has dramatically increased and continues to do so. This is our "new reality." Our needs have shifted significantly from restoring and enhancing to providing sufficient administration and maintenance to support the result. Our other two categories of income, memberships and camping fees, do not fulfill these needs.

We've been asked a number of questions since we announced our gas lease. We'd like to share them with you, too, in case they've crossed your mind. We also encourage you to e-mail us if this doesn't cover your concerns.

Q: Didn't you violate your mission by signing a gas lease?
A: No. Our mission is to maintain the park, keep it open 365 days per year, free, welcoming one and all. It is not our mission to conserve land undisturbed or unused. See our Mission Statement here.

Q: How much did you make?
A: We received $5,500 per acre for 136.82 acres, equaling a one-time payment of $752,510. If gas is ever taken from underneath our property, we will be getting royalties, as well.

Q: What are you doing with the money?
A: For the short term, we set aside $100,000 to address urgent maintenance needs. We had the two historic farmhouses stripped of lead paint, replaced rotten sills and other boards, and repainted the houses. We also replaced the roof on one of the farmhouses that had been leaking for several years. In addition, some of the gas lease funds will be used to match a 50/50 Growing Greener grant to stop water from getting into the ground floor of the hay barn, fixing the roof, restoring the stone foundation, and replacing rotten sill beams. It is our goal to restore this barn for use as a community space.

For the long term, we have invested the balance conservatively. This will provide a modest yearly income, perhaps $10,000 to $20,000, toward administration and maintenance expenses.

Q: So why do you still need my membership?
A: We cannot continue to manage Salt Springs without your support. Salt Springs is an increasingly desirable place to visit, and our management expenses increase as well. Because lands we manage are part of the state park system, we cannot charge admission. The small annual stipend we expect from our invested gas lease funds will support our current employees. It certainly could not replace our membership income.

Q: What are you doing to protect Fall Brook?
A: The state is responsible for the waterways. We will monitor activity and report any concerns to the state.

The E.L. Rose Conservancy is implementing a water monitoring program. Local residents will be trained to use basic testing equipment and taught how to accurately record and report the test results for local lakes and streams. These trained observers will serve as an early warning system should problems arise. We are looking for a member of the Friends to participate in this program.

Q: What about the roads and traffic through the park?
A: This is something out of our control, as roads are not within our purview. The two roads through the park, Buckley and Salt Springs, are public roads owned by Franklin Township. We can't block access to them in any way. If and when there is gas industry traffic through the park, it will not be because of our lease.

Q: I heard you are allowing gas drilling at Salt Springs. Doesn't this violate the reason you formed, to "save" Salt Springs?
A: The Friends manage 842 acres of which we own 437 acres. Three hundred of these are under a Conservation Easement that prohibits drilling. The remaining 137 acres are under a "no drill" lease. We will not sign a lease that allows drilling. The Commonwealth owns the balance of 405 acres and allows no gas activity on its lands. State park officials have told us the state has no intentions of signing a lease covering their land.

Q: How is the state involved?
A: The grants that provided half of the purchase funds for the Friends Land included a requirement that any use of the land other than as a park would require the state's permission. After long deliberation, the Bureau of State Parks granted that permission, although they did not explain their reasoning. We had repeatedly made them aware of the problems of postponed maintenance at Salt Springs and of their obligation, under our contract with them, to pay for those projects. Because their funding had been cut more than once and they had no prospect of being able to live up to their contractual obligations to us, they probably felt that granting permission for the non-surface gas lease would help maintain the park at a high level of physical condition and proper operation.

Q: What do you mean by "Friends Land"?
A: In 2000, the Friends purchased a 300-acre tract adjacent to the park and placed it in a Conservation Easement held by the E.L. Rose Conservancy. In 2006, we purchased a 137-acre tract that increased the total acreage of the Friends Land to 437 acres. Both purchases were made possible by grants from the Department of Conservation and Natural Resources, with matching funds donated by the public. Thus the total number of acres open for year-round public use is 842, including the 405 acres of state park land.


Update:

Our gas lease expired November 19, 2014.

The Friends of Salt Springs Park agreed more than five years ago to give Fortuna Energy, now known as Talisman USA, the right to drill for gas under 137 acres we own as long as they did not disturb the surface. We will likely sign another lease, if one is offered. There does not seem to be any new activity in our neighborhood, so an offer may not come for years, if ever.

We set up a new nonprofit organization, the Friends of Salt Springs Park Supporting Group, to manage the lease, receive potential royalties, and act in a way to support the Friends' mission. The best legal advice we could get advised us to take this step to limit potential tax liabilities and to maintain our charitable status. We transferred the lease to the group on November 18, a day before it expired, just so we would have a precedent in case a new lease develops.

To us, the most important thing about the lease was that it shored up our precarious finances while allowing us to make needed repairs to the buildings we are required to maintain under our agreement with the state. We received $752,510 upfront and removed lead paint from our historic buildings and repainted them, we repaired the old dairy barn, and we made other improvements. We still have more than $630,000 left.

While that may seem like a lot of money, the board of directors is aware it will disappear quickly unless we are prudent. The board has agreed to withdraw $25,000 a year to offset operating expenses, which should reach more than $90,000 in 2015.

That means we need to raise $65,000 in memberships, donations, grants, and sales. We continue to need and appreciate your support.