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Western ND oil patch leaders plea for help

 By Nick Smith

BISMARCK, N.D. — Leaders of oil patch communities say they are reaching the limits of their resources to deal with the effects of oil development and need more state help.

“The needs don’t go away. They get bigger and they get left undone,” Williston City Commissioner Brad Bekkedahl said Wednesday.

About 70 people met at the Ramada Hotel to make a case for adjusting state funding levels for western North Dakota in the 2015 legislative session. Leaders agreed that they must not only gather data but come to Bismarck next year with one voice.

Williston was set to receive $60 million from the state during the 2013-15 biennium. Bekkedahl said the state changes to the oil production tax formula were steps in the right direction but the city still has more than $200 million in infrastructure projects underway.

Williston has reached its bonding limit for projects, Bekkedahl said, and has had two downgrades on its credit rating in the past 12 months. He said Williston’s bonded indebtedness on projects that were under construction in 2013 leaped from $30 million to $130 million.

“What does the formula have to be adjusted to to take care of your needs?” asked Sen. Bill Bowman, R-Bowman.

Bowman said communities would need to give legislators an exact number in 2015, not a guess.

Bekkedahl said changing the state formula to provide oil-producing counties 60 percent of the gross production tax dollars would largely address local needs. The current balance sends approximately 75 percent back to the state and 25 percent to the oil patch counties.

Bekkedahl said the expiration of the June 30, 2015, expiration date of the legislation severely hamstrings communities when trying to bond.

Watford City Mayor Brent Sanford agreed with the need for removing the expiration date and bringing the formula more in line with a 60 percent local share.

Sanford said the city expects around $20 million through the legislation but it has approximately $190 million in infrastructure needs. He said the state funding for the next two years was “a bitter disappointment for city officials, to say the least.”

The city is working to get services to new developments, pass a school bond issue and is in need of a new hospital, Sanford said. He said the needs have grown exponentially for a town whose population jumped from just more than 1,700 in the 2010 U.S. Census to an estimated 7,500 to 10,000 now.

Dickinson City Administrator Shawn Kessel said his city is essentially “going to mortgage 20 years of our future” to address one year’s growth in infrastructure projects this year.

He said Dickinson’s debt level is between $125 million and $130 million compared with being virtually debt-free a few years ago.

A more sizeable and immediate investment is critically important in the cities most impacted by energy development, Kessel said.

“If they can’t go to Dickinson, if they can’t go to Williston, if they can’t go to Watford City (and) if they can’t go to Minot, where are they going to go?” Kessel said. “An investment in western North Dakota will pay off in spades.”

North Dakota Department of Transportation Director Grant Levi outlined the state’s $2.3 billion funding for highways across the state during the 2013-15 biennium.

It includes hundreds of millions for truck bypass routes in oil patch communities, money for county and township roads and a project to four-lane U.S. Highway 85 from Williston to Watford City.

State Treasurer Kelly Schmidt said projections from her office, based on production tax revenues from the last quarter, could serve as a starting point in discussions on changing the formula.

Reach Nick Smith at 250-8255 or 223-8482 or at nick.smith@bismarcktribune.com.

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