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City, county not seeing much of a slowdown

Posted 9/15/15 (Tue)

By Amy Robinson
Farmer Staff Writer

Even though a lot has been done in Watford City, there is still a lot coming. And despite a slowdown in the oil and gas market, there is still continual growth. That was the message city and county officials shared with members of the North Dakota Legislative Energy Development and Transmission Committee during a visit to Watford City on Thursday, Sept. 3.
And with continued growth, local officials are asking the committee to consider recommending an increase in the oil and gas tax revenues that are being returned to local governmental entities in the state’s oil patch. During the past legislative session, the Legislature increased the local share of those tax dollars from 25 to 30 percent. Governor Dalrymple had recommended the formula be adjusted to 60 percent going to local communities. However, with declining oil prices, the Legislature only provided for a five percent increase.  
“Watford City is seeing continued progress,” stated Watford City Mayor Brent Sanford. “Our building permit level is actually higher than it’s ever been. In a city that once saw only  100 permits a year, we now have over 1,000 building permits. It’s nearly doubled since 2010.”
According to Sanford, even with the slowdown, communities such as Watford City and Williston are becoming hubs for sustained energy activity. He says the city is building the continued growth into its long-term projections for demands on infrastructure and services.
Total overall infrastructure needs for Watford City are estimated to be $345 million. Of that amount, $214.3 million is needed for transportation, $77.9 million for wastewater, $22.4 million for water, $23.4 million for the airport, and $7 million for public facilities.
“We have one of the highest, if not the highest rates of users in water and sewer utilities,” said Sanford. “And we’ve been very active with our water system here. Our new Water Pressure Zone Project has been a very good quality-of-life project. Based on our sewage flow numbers, we are serving at least 6,500 people.”
Sanford says Watford City has already overgrown the north and east parts of town. So, the need for two wastewater treatment plants is absolutely necessary.
“Although Williston and Dickinson both have one wastewater treatment plant, Watford City needs two because of the unique geographical challenges here,” said Sanford. “We have to use force mains, not gravity mains. And we have a push of three to four miles. It’s most cost-effective to add a second wastewater treatment plant because of our geography. By the end of the project, we would be serving a total of 30,000 users. We are also working on the Fox Hills Regional Lift Station and Forcemain, which costs about $5 million.”
Current projects not only include the wastewater treatment projects, but also several city facilities including a new Events Center, a new high school, a new combined Law Enforcement Center, a new healthcare facility, and associated road and utility infrastructure.
Other projects currently being worked on include an east water tower, a northwest water tower, and east end transmission, and the Pressure Zone Improvement Project.  
“We recently finished the 17th Avenue NE project from 12th Street to Highway 1806,” said Sanford. “The project was bid in August of 2014 and was just completed in July.”
According to Sanford, the city needs to complete an additional $40.1 million in road projects including the 12th Street Project, the 17th Avenue Corridor Improvements Project, the 11th Avenue Corridor Improvements Project, and the 4th Avenue NW Corridor Improvements Project.
 “The 12th Street Corridor is expected to be complete in July 2016 and will provide access to the new Law Enforcement Center,” stated Sanford. “The 17th Avenue Corridor,  which is to be complete in October of 2016, will expand the access corridor and the 11th Avenue Corridor, which is also expected to be complete in October of 2016, and will provide an alternative route for the Events Center and new High School traffic. And the 4th Avenue Corridor, expected to be complete in July of 2016, will provide an alternative connection to the U.S. Highway 85 Business Route and will connect new developments to downtown.”
To meet the growth of services being provided by the city, Watford City has seen a dramatic growth in city staff. According to Sanford, the city staff has tripled since 2009, increasing from 14 to 56 full-time employees.
County Roads Feel Impact
Not only is the city of Watford City on the Legislature’s radar, McKenzie County, as a whole, is as well.
According to Ron Anderson, McKenzie County Board of Commissioners chairman, there are a significant amount of road projects that still need to be funded in the county.
Four projects completed in 2015, the Northern Bypass Phase One project, the County Road 53 project, the 132nd Avenue project, and the County Road 30 project cost an estimated $61.9 million, while two large county road projects slated for 2016 including the Northern Bypass Phase Two project and the County Road 12 Phase One project, are estimated to cost $59.1 million.
According to Anderson, over the next four years, the county needs $296 million for its planned projects, which will improve traffic safety.
Statistics have showed McKenzie County has led the state in fatalities for the last three years. There were 18 deaths in 2012, 24 in 2013, 24 in 2014, and 12 so far in 2015.
“One county accounting for 20 percent of the deaths on North Dakota highways is unacceptable,” stated Anderson. “Completion of the Northern Bypass route would help spread the traffic in the county. This route is currently a gravel route that has been difficult for the county to maintain in reasonable condition. Paving this northern route shortens the commute from Williston to the Keene-Charlson and Ft. Berthold oil fields by approximately 40 miles.”
McKenzie County, according to Anderson, currently maintains 1,130 total miles of roads (407 miles of organized townships, 130 miles of paved, and 593 miles of country gravel roads). And the cost of maintaining those roads is staggering with the county budgeting $125,000 per mile to gravel roads. Anderson says the cost to reshape and regravel 890 miles of county and township roads would be $111.3 million over two bienniums.
Not only does the county also have to worry about significant road projects, they have county building projects currently in the works and planned for the future at an estimated cost of $97.9 million. Those projects include employee and senior housing projects, a 129-bed Combined Law Enforcement Center, a courthouse renovation and addition/remodel, and a Public Works facility.
Because of the energy development in the county, Anderson told the committee the number of county employees has increased from 137 in 2009 to 204 in 2015 with payroll increasing from $3.7 million to $10.5 million.
Law Enforcement, Court
System Continue To Grow
Not only is the city and county experiencing a sharp increase in the need for staffing, but the Watford City Police Department is as well.
“We are also facing a lot of challenges,” said Watford City Police Department Chief of Police Art Walgren. “In 2010, we were at five employees and now we are at about 20 and we are still looking at growing. In 2007, there were 46 calls for service for the entire year and now we are at about 10,000 calls for service. With that  and the complexity of the cases, we are needing more man hours, more detective hours, and the associated equipment, not to mention the technical side of things.”
According to McKenzie County State’s Attorney Jake Rodenbiker, the McKenzie County State’s Attorney has endured growing pains unparalleled among public prosecutors in the region, due to the influx of criminal cases that has accompanied energy development.
The increase in criminal cases filed in McKenzie County from 2013 to 2014, according to Rodenbiker, was over 17 percent. Since 2011, the number of cases filed per year in the county has doubled. And the decrease in the price of oil has not resulted in a decrease in crime. Instead, 2015 year-to-date case filings are on par with 2014.
“Over the last 10 years, total criminal case filings in McKenzie County have increased 500 percent, far more than any other county in the state,” wrote Rodenbiker, in his testimony before the committee. “Felony criminal cases filed in McKenzie County have increased a staggering 1,600 percent over 10 years, from a mere 20 in 2005 to 340 in 2014. It goes to show how much criminal justice infrastructure McKenzie County has had to build from where we were a decade ago.”
“Mental health is a hot topic for the Legislature,” stated Walgren. “We deal with mental health issues fairly frequently. We are trying to find the resources for these people because we just don’t have quite the resources the eastern part of the state has. If we had more mental health resources for the people here, it would help us be a front-runner in combating mental health. Right now, Minot has the closest psychologist.”
Walgren is also concerned about  training, or the lack thereof, for his officers, as most are young and less experienced in the field.
“Right now, more than half of my department has less than two years of experience to deal with the complexity of the crimes we’re seeing,” said Walgren. “We are so call-driven now that we don’t necessarily have the time to send officers to trainings that they need.”
City, County Working
To Meet Housing Needs
To help address the affordable housing crisis in Watford City, there are collaborative projects in the works as well. According to Gene Veeder, executive director for the McKenzie County Job Development Authority,  several of those housing projects include Wolf Run Village, an affordable housing project for essential workers that will include 18 one-bedroom town homes and 24 two-bedroom units; Lutheran Social Services (LSS) Watford City II, which will include 72 units - 36 of those for essential workers; and a G.A. Haan housing project that will include 35 units for essential workers and a 40-unit senior housing complex.
“We also collaborated on the Wolf Pup Daycare Center, which is a 200-child day care facility to help with child care needs of the community,” said Veeder. “Recently, the healthcare systems built an apartment building for their workers, including 24 units for essential workers. And Prairie Heights was built, starting with 24 units and then added another 125 for affordable housing.”
What has worked for Watford City, according to Veeder, are the LSS Creekside Cottages, which included 24 affordable housing units, and the Watford City Housing Authority’s six duplexes. From what has been built to meet the affordable housing need to what is currently being built, Veeder says the city is quite on track addressing the affordable housing dilemma in Watford City.
Low Oil Prices Impacting
City, County Finances
With a decline in oil prices, the city is seeing a decline in its Gross Production Tax (GPT).
According to Sanford, the city’s GPT monthly revenue dropped from $1.5 million in 2014 to $1 million a month currently. He says that approximately $7 million is needed annually for debt service and another $6 million is needed annually for operations. And the city’s energy-related infrastructure needs continue to outstrip available financial resources.
The debt load the city currently carries is $154 million and additional funding will be needed shortly, says Sanford. The city is anticipating another $75 million of debt to add on  to the $154 million that is currently there for upcoming projects.
As with the county, Watford City has also seen rapid growth in its payroll costs as more full-time employees have been added. Since 2012, the city’s payroll costs have tripled, increasing from $1.4 million to an estimated $4.3 million in 2016. And those costs, along with other associated operational cost increases are limiting the city’s financial flexibility.
“Other revenue sources will not be able to keep up with projected demands and allow the city to remain affordable for all,” stated Sanford. “We just need the state to recognize that more funding has to come here.”