By: Mike Nowatzki, Forum News Service
BISMARCK – Gov. Jack Dalrymple said Monday he expects to decide sometime in April whether to call the state Legislature into special session to address pressing needs facing cities and counties affected by western North Dakota’s oil bonanza.
And while he wouldn’t say which way he’s leaning, the Republican governor highlighted several short-term fixes – including a new program providing millions in loans from the state-owned Bank of North Dakota – that could avert having to call lawmakers back to Bismarck as requested by Democratic-NPL Party lawmakers.
During a sit-down interview with Forum News Service, Dalrymple said he’s been meeting with western North Dakota mayors, county commissioners and legislators about their infrastructure needs in 2014 and 2015. He said he still has several meetings left before reaching a decision.
“I think I’ll have a pretty good idea of whether I should call them into session or whether there are other options that we can use that will solve the short-term problems that they have,” he said.
The state could do that in two ways, he said.
The first involves interim funding through the executive branch. For example, Dalrymple noted the State Water Commission approved $32 million in grants in late February for water supply projects in Dickinson, Watford City and Williston.
The North Dakota Industrial Commission, which Dalrymple chairs, also created a special lending program in January that allows the Bank of North Dakota to provide loans to cities, counties and other political subdivisions that receive revenue through the state’s 5 percent gross production tax on crude oil.
“It can provide them with a lot of very helpful funding in the short-term for the immediate needs that they’re facing, and that would certainly be good for a couple of years until we get through another session,” Dalrymple said.
Last week, the state bank approved two loans from the program: $36 million to Watford City for infrastructure and $10 million to $15 million to the McKenzie County School District, bank President Eric Hardmeyer said. The bank also is reviewing requests from Dickinson and Williston for the loans, which are generally for 10 years with interest rates typically at less than 2 percent, he said.
“Certainly they have needs that are immediate that they need to take care of today, and this just allows them to leverage off of future tax receipts,” Hardmeyer said.
Dalrymple said the other approach would be for lawmakers to act early when the GOP-controlled Legislature meets for regular session in January, thereby giving local officials more certainty as they prepare for the 2015 construction season.
“They, for the most part, have been saying to me so far that they feel they have 2014 pretty well in hand, but their biggest concern is about having enough funds to do the preliminary engineering for things that need to be completed in 2015,” he said. “So, in that sense, it looks like gap financing is a big part of the issue.”
Still, Dalrymple wouldn’t say that he’s leaning against a special session.
“I’m going to reserve judgment until I have all my information in,” he said.
Senate Minority Leader Mac Schneider, D-Grand Forks, and House Minority Leader Kenton Onstad of Parshall sent a letter to Dalrymple on Feb. 24 calling for a special session, stating many in western North Dakota fear their communities and counties “are reaching the breaking point.”
Schneider said Monday that “momentum is building” for the special session they’ve requested, noting Williston city leaders are among those calling for it.
“I don’t think there’s any question that if we went in for a limited legislative session that we would have work to do to address western North Dakota needs,” he said.
Schneider said it would be a “tremendous benefit” to western counties and cities if lawmakers could lift the expiration date from the current formula used to distribute oil production tax revenue to cities and counties.
Local officials have complained that the sunset clause, which will cause the formula to end in June 2015 and revert to a previous version that provided less than half as much funding to cities and counties, is hurting their ability to bond for projects.
Dalrymple said he believes the sunset clause should be removed, but he said he doesn’t know how pressing the issue is.
“The question becomes is it absolutely necessary to float a long-term bond issue right away or can that wait?” he said.
Some western leaders also want lawmakers to change the distribution formula so that a greater share of production tax revenue goes to political subdivisions, which currently receive 20 percent. Dalrymple said that’s “a major policy question” that will require a lot of work and discussion by the Legislature.
“It does not lend itself well to a quick session,” he said.
Williston City Commissioner Brad Bekkedahl, who along with Mayor Ward Koeser met with Dalrymple last week, said the governor “is offering as much assistance as he can to get us through this time period” and avoid a special session. But Bekkedahl, a Republican candidate for state Senate, said he still believes a special session is necessary to address the tax formula and sunset clause in order to make more money available for Williston, which brought $225 million in needs to the Legislature last year and received $60 million through the production tax.
“It has to be pretty well-defined … to be effective,” he said of a special session.
Vicky Steiner, executive director of the North Dakota Association of Oil and Gas Producing Counties, said Monday she thought the association’s executive committee was leaning toward asking for a special session, but now she’s not sure. The committee meets March 19 and could take a position then, she said.
“I just don’t know what the cumulative effect is going to be with the governor meeting with everybody and pushing some dollars out early,” she said.
Reach Nowatzki at (701) 255-5607 or by email at firstname.lastname@example.org.