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Effects of Longwall Mining On Real Property Value and the Tax Baseof Greene and Washington Counties, Pennsylvania

December 13, 2002 Page 31

worth of tax data, from 1991-2002 were available. In Greene County, only 1993-1997,2000, and 2001 were available. Data was interpolated between 1997 and 2000.

The methods of using these data are described in the sections below.

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4.0 SALE AND COUNTY VALUE OF LONGWALL AND NON-LONGWALLPROPERTIES

4.1 Introduction/ Summary

Differences in property value based on proximity to longwall mining were analyzedfor this study. Properties above longwall mining were compared to similar properties notaffected by longwall mining. Comparing sales data and county value data, RTC found nostatistically significant correlation between the presence of longwall mining and general oraverage property values. Other factors such as access to infrastructure such as publicsewer and water, remoteness of site (land use density), and proximity to a roadway havemore pronounced relationships to value than proximity to mining.

4.2 Sale and County Value Comparisons

The following objective from the Project Work Statement was addressed:

Using areas of appropriate size and composition, obtain and compare the fairmarket values of surface properties above longwall mines and the fair market valuesof surface properties in control areas to determine if there is a statistically significantdifference between the two groups.

In addressing this objective, RTC realized that the available data sets would notallow an analysis of “fair market” value in the strict sense of the word. As used in theappraisal industry, fair market value is defined as an estimate of current monetary valueof a property, including all tangible and intangible assets, assuming that a willing andcompetent buyer, with full knowledge of all pertinent characteristics and possible uses ofthe asset, without undue pressure or duress to motivate the purchase, would purchase theasset from a willing and competent seller, who also possesses full knowledge of allpertinent characteristics and uses and, without undue pressure or duress to motivate thesale of the asset, would sell the property.

To solve the dilemma of assigning value for the analyses, RTC converted the countyassessed values of all relevant properties to an estimated market value, and named theresulting estimate the “county value.” The county value was calculated by dividing theassessed value from the county records by the county’s common level ratio. Commonlevel ratio is a number calculated by the state Department of Revenue and used to makesure Pennsylvania’s property transfer taxes are equitable across the state. Each countyin the state has a common level ratio calculated annually on the basis of property sales inthat county. By dividing assessed value by the common level ratio, an estimate of marketvalue can be calculated. This county value estimate may be different from the fair marketvalue a willing buyer will pay a willing seller for a property.

Therefore, analyses for Sections 4 and 5 of this report use the calculated countyvalue, which is an estimate of market value and may not be the same as actual fair marketvalue.




December 13, 2002 3

4.2.1 Control Group Selection

Control groups of properties in areas where no longwall mining had occurred wereidentified within each county. The control groups were used to compare properties withsimilar characteristics, such as house size, access to roads, access to public sewer andwater, to see whether differences in county value could be attributed solely to longwallmining. Five longwall and five control non-longwall groups of properties were selected forthe study.

4.2.2 Control Area Selection Methodology

The following methodology was used to select mine areas and associated controlareas for study:

1. Longwall mine study areas were selected from current mine maps. Maps wereobtained from the DEP and confirmed with mining companies. Mine maps wereregistered to the Greene County and Washington County map base. All panels weredigitized into the GIS system and the panel completion dates were included in thetabulated data attached to each mapped panel (Exhibit 4.2.2-1).

2. Abandoned and closed conventional underground mine areas were mapped.Each mined area was identified by mine, operator name, and type of mining.

3. Proposed mining areas were identified from existing mine plans obtained fromDEP and the longwall mining companies.

4. Basic coal geology was mapped. Geologic information was limited to depth andseam thickness.





Exhibit 4.2.2-1 A Portion of the Study Area Showing Longw all Panels and Completion Dates

(black), Abandoned M ine (orange crosshatch), Permitted Mining (red), Greene County Parcels

(green), and Washington County Tax Index Maps (blue).

5. All property tax parcels in Greene County were mapped. The data file attachedto each mapped parcel includes current assessed value, size, extent of structuralimprovements, sale price, deed number, last known transfer, owner name, locationaddress, access to utilities, appeals history.

6. Digital versions of Washington County’s paper tax index maps were created in theGIS, but digital maps of individual property tax parcels were not created.





Exhibit 4.2.2-2 Base Map of County Tax Index Maps (black) and TownshipBoundaries (blue)





Exhibit 4.2.2-4

Exhibit 4.2.2-3

Records in the county’s tax assessment database were associated with theappropriate tax index map. The average Washington County tax index area represents 350acres, although some encompass as few as 10 acres and a couple as many as 1,200acres. In Greene County, the average tax index map is 1,500 acres, the maximum is 5,000acres, and the minimum is 1 acre. On average, a property located by tax index map isestimated to be within 1,500 feet of its real map location. The Washington County dataincluded similar attributes as the Greene County data files, such as current assessed value,size, extent of structural improvements, sale price, deed number, last known transfer, ownername, location address, access to utilities, appeals history..

7. A base map of all tax indexmaps (combining Greene andWashington Counties) wascreated (Exhibit 4.2.2-2). Theaverage size of each tax indexarea (called a map polygon) inthe combined base map is 350acres. The average mappolygon contains 50 propertytax parcels. In urban areas, thedensity is higher (more than 500parcels per map polygon) andthe map index areas are smaller(10 acres or less). No longwallpanels are located under urbanareas in either county. In ruraland remote regions of thecounties, the map polygonsrepresent more land area (up to1,750 acres) and fewer propertytax parcels (less than 35).Longwall mines tend to belocated in remote and ruralareas of the counties. Thedistribution of sizes and densityof property tax parcels areshown in Exhibit 4.2.2-3 and4.2.2-4.

8. Areas with public sewer andwater were digitally mappedusing county supplied maps (anexample is shown in Exhibit4.2.2-5).





Exhibit 4.2.2-5 A Portion of Greene County ShowingAreas with Public Sewer and Water (blue) and Sewer

Delivery Zones (red) over Tax Index Maps (black).

9. All state numbered highwayswere mapped. Each parceland/or index map location that iswithin ½ mile of a road wasattributed as such.

10. Areas (polygons) surroundingthe longwall panels but withinexisting mine subsidence permitswere analyzed to identify basiccharacteristics: depth to coal,density of surface development,public sewer and water deliveryareas, road accessibility, andrelationship to abandonedmining.

11. Control group areas wherelongwall mining has not occurred were selected to closely match the properties inlongwall study areas. Each control area was selected to represent similarcharacteristics with each related longwall group, as follows:

• size (geographic area)• land use (density of parcels and structures)• historical mining• access to infrastructure (length of public sewer and water lines,

number of roads)• surface characteristics, topography, density of streams

For both counties, all surface properties with their associated assessments, sales,and tax index maps were assigned to a control area, a mine area, or an “outside” area(neither control nor mine). All analyses and comparisons were performed on theseconsistent assignments. The control and mine areas were identified as Greene East,Greene Central, Greene West, Washington East, and Washington West (Exhibit 4.2.2-6)and are associated with the following longwall mining:

• Greene East: CONSOL Dilworth Mine• Greene Central: RAG Emerald and Cumberland Mines• Greene West: CONSOL Bailey and Enlow Fork Complex• Washington East: Maple Creek, New Century, and 84 Mines• Washington West: CONSOL Enlow Fork complex

12. The average density of land use (improved parcels per square mile) wascalculated from the GIS data. Using a natural break analysis, a grid of the study





Exhibit 4.2.2-6 Matched Analysis StudyAreas with Longwall Mining (Mine) andRelated Control Areas without Longwall

Mining

area (both counties) wasdeveloped. Density ranges

for the grid were assigned as follows(Exhibit 4.2.2-7):

• Remote (lesst h a n 5 0i m p r o v e dparcels persquare mile)

• Rural (less than500 improvedparcels persquare mile)

• Suburban (lesst h a n 2 ,0 0 0i m p r o v e dparcels persquare mile)

• Urban (moret h a n 2 , 0 0 0i m p r o v e dparce ls persquare mile)

Exhibit 4.2.2-7 provides anoverview of the tax index mapdensity throughout two counties.Density was an important factor usedto select the control (no-longwall)comparison areas. Table 4.2.2-1counts the number of index map areas classified as remote, rural, or suburban by mineand control areas.

Sewer and water service delivery areas are shown in Exhibit 4.2.2-8. Table 4.2.2-2counts the number of index map areas with and without public sewer and water servicesin the mine and control areas.





Exhibit 4.2.2-7: Image of study area showing roads,color grid of parcels per square mile, mining areas and

control areas.

Table 4.2.2-1: Land Use Density by Analysis Area

Analysis

Control Area

Count of Tax Maps Classified

Density

TotalRem ote Rural Suburban

Control 653 68 41 762

Mine 500 63 43 606

Outside 38 9 9 56

Total 1191 140 93 1424





Exhibit 4.2.2-8: Sewer and water delivery service areas

Table 4.2.2-2: Utilities by Analysis Area

Analysis Area Count of Tax Maps

Utility Status Total

None Public Services

Control 634 150 784

Mine 427 157 584

Outside 29 27 56

Total 1090 334 1424


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