Hard to grow little towns from scratch, says Watford City

Friday, October 5, 2012

Bismarck Tribune

Hard to grow little towns from scratch, says Watford City

18 hours ago • By LAUREN DONOVAN | Bismarck Tribune

WATFORD CITY — Brent Sanford and Curt Moen are like expectant dads, only they’re preparing for thousands of newcomers, not one.

Sanford is Watford City’s mayor and Moen is the city planner. They’re nervously checking the calendar at the same time they’re checking their billfolds, hoping they’ve got enough when the time comes.

They figure they need somewhere to the tune of $115 million to be ready for this baby — triple the town’s current population, based on new projections.

Fortunately, they’ve got more than nine months, but the clock is ticking. Loudly.

If expectancy likes company, they have plenty of it.

Last week’s release of a housing assessment from the NDSU Center for Research says McKenzie County’s population will expand by 169 percent to 17,000 in 13 years. Watford City is the county seat and retail center and most growth will focus there.

That percentage is the highest projected growth rate of 10 major oil producing counties, according to the assessment. But with even the smallest percentage of growth at 45 percent for Renville County, it means everyone out in the patch hears the same clock ticking.

“We’re going to grow by 10 times what our population used to be for the last 100 years. We don’t have a choice. People will be flocking here no matter what we do,” Sanford said. “The costs will be huge, especially to build a town out of the prairie. It’s tough for little towns like us to get started.”

Watford City isn’t pulling that $115 million out of thin air.

Its engineers have helped develop a growth plan and half the money would be used for roads alone, because the physical size of the city will double, at least. That new acreage — 1,000 acres in the annexation process so far — has to be tied to a network of arterial roads and streets.

Then, there’s water and sewer to those far flung new reaches of the community.

Moen said the city just spent $12 million to expand the city lagoon as part of a five-year plan and it’s expected to be in service next month. It’s already obsolete and it isn’t even being used yet.

“We blew that out of the water. We went through that in 18 months. We are at (lagoon) capacity with the new housing developments that we have permitted and the ones that are getting bonded,” Moen said.

Right now, Watford City has between 4,000 and 5,000 new housing units that are in the preliminary and bonding stages.

“The (lagoon capacity) emergency happens this spring when those projects go vertical,” he said.

Lately, investors have been showing up at city hall, finally persuaded that the oil patch is a sound risk, Moen said.

“The money is literally walking in the door, no joke, this is going to go fast,” Moen said. They want to know who’s doing what housing and business projects and who needs money and out the door they go, he said.

Sanford said oil patch cities like his need more money to deal with that growth and they need it soon.

Now, the state takes most of the oil and gas tax revenue.

In the past fiscal year (year, not biennium) oil and gas revenue totaled $1.8 billion. Under the distribution formula, the state's 17 oil and gas producing counties shared $251 million. Counties with the most oil production get squeezed down to the smallest distribution share when they reach $18 million.

Eight counties hit that point this biennium; five of them within four months.

“That’s not enough,” says Rep. Shirley Meyer, D-Dickinson. “The more oil you produce, the less money you get. It’s ludicrous to think the counties can maintain this with the money they get.”

She wants the Legislature to give the oil and gas producing counties the entire gross production tax for the next two years, about $950 million each year.

Sanford said people also should consider that the oil patch has become an enormous generator of sales tax — Watford City is now on par with Jamestown in taxes — and that revenue is spread per capita around the state.

By that measure, Meyer’s $950 million “isn’t so outrageous,” Sanford said.

Vicky Steiner, director of the Oil and Gas Producing Counties Association, said her association, along with Vision West, is gathering growth-cost numbers from 26 cities in the oil patch. That’s a decent sampling, but there are more than 100 cities in the patch.

She hesitates to guess what the total will be.

At last month’s North Dakota Petroleum County annual meeting, Dickinson said it needs $400 million. Williston said it needs $600 million to deal with the boom.

“I don’t know what it will be (the total), but it probably will be big,” Steiner said.


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