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City and state officials discuss oil impacts

Community leaders from Kenmare, Bowbells, Powers Lake, Portal, Columbus and Lignite sat down with representatives from several state agencies on January 12th to discuss the impact of oil development and needs across the area.

1/25/12 (Wed)

By Caroline Downs

Community leaders from Kenmare, Bowbells, Powers Lake, Portal, Columbus and Lignite sat down with representatives from several state agencies on January 12th to discuss the impact of oil development and needs across the area.

Al Anderson, commissioner of the North Dakota Department of Commerce, chaired the session held at the Bowbells Memorial Hall, but he emphasized the state officials would spend most of their time listening to concerns.

“We’re here to help you solve some of the problems,” he said. “It wasn’t that long ago we were all looking for growth. Now, we have unprecedented growth.”

He noted the state legislature appropriated $1.2 billion to be spent on oil impacts in the 2011-2012 biennium, including housing, transportation and infrastructure, with much of that money still to be distributed.

Jerry Fischer, Assistant Director for the Energy Infrastructure and Impact Office of the ND Department of Lands, said his office would be awarding up to $135 million in impact grants to counties, cities, school districts and emergency services. Another $5 million is available to qualifying counties with impact from new oil and gas development.

Fischer explained the calendar for grant applications, with applications from cities considered during the July round for infrastructure needs, townships considered in the October round for road projects, emergency services considered in the January round, and other political subdivisions such as counties, school districts, parks and airport boards considered in April.

“We encourage small towns applying for these funds to do the engineering work ahead of time and be shovel-ready when the grants are awarded,” he said.

Transportation and traffic safety
Grant Levi, Deputy Director of Engineering for the ND Department of Transportation, and Colonel Jim Prochniak, Superintendent of the ND Highway Patrol, addressed transportation and highway safety in the area. “We have $305 million in road projects planned for 2012,” Levi said.

He agreed with audience members that predicting future needs for the area was difficult. “One thing we do know,” he said, “is that each time they drill a well, 2000 trucks are needed to get that well into service. And that’s inbound trucks.”

Prochniak talked about safety issues, including the 148 fatalities on the state’s roads in 2011. “I hope we’re not setting a new norm,” he said, “but we’re seeing a lot more traffic on our highways and byways, and we’re asking people to take a conscientious approach.”

Safety concerns in the immediate area were raised by state representative Glen Froseth, Kenmare, state senator John Andrist, Crosby, and Bowbells mayor Dan Linster, especially as related to semi-truck traffic, speed limits and the assignment of new highway patrolmen. Levi and Prochniak both reassured the group that safety and speed issues are under consideration in their departments. Nine new patrolmen have already been stationed in western North Dakota, with four more to be deployed in the Williston, Watford City and Stanley areas following completion of their training.

“We don’t want to forget about the educational component either,” Prochniak said. “Our highway patrolmen have conducted 1700 safety presentations during the last couple of years. We’re asking people to take a conscientious approach on the road, and that message has to be made more clear.”

Water and housing demands
Demands for water in the oil patch have strained some local water resources and raised questions about the capacity of projects currently in progress, such as the Northwest Area Water Supply (NAWS) and the Western Area Water Supply (WAWS). Kenmare mayor Roger Ness focused directly on the supply levels. “Is there ever going to be not enough water coming out of Minot for those of us on the NAWS line?” he asked.

Michelle Klose of the State Water Commission explained the agency was issuing temporary permits for industrial water users to draw from surface water sources currently available because of wet conditions across the state, a condition that should help municipal and rural water supplies.

She noted existing water contracts for communities slated for large housing developments, such as Berthold, were working with the SWC to protect those contracts. Berthold and Kenmare now receive water delivered from the city of Minot through the NAWS pipeline. “The developer for the housing project [near Berthold] is working with North Prairie Rural Water System, which had planned turnouts with NAWS,” she said.

The developer can discuss the water supply with the NAWS Advisory Committee if a higher demand for water is expected than the planned turnouts can provide. However, the water contracts in place for Berthold and Kenmare will remain as written at this time.

Ness asked about limits on communities selling bulk water. “We have a few communities abusing the system,” Klose said. “Now, cities have to report their industrial water sales monthly, and once they meet their allocation [from their aquifer], they’re shut down until the next year.”

Kenmare has sold bulk water from its former municipal supply, but the city’s aquifer has been sufficient to meet all demands to date and the city has never reached its allocated amount.

Klose also reported work continues on the Environmental Impact Study required to be submitted for the NAWS lawsuit. “We’re being very careful how the environmental work is being prepared for the court,” she said, “and we expect it done within a year.” Construction of a treatment plant for Missouri River water to be used in the NAWS system depends on the outcome of a lawsuit filed against the project by the province of Manitoba and the state of Missouri, although construction of the pipeline delivery system has been allowed to take place.

Mike Anderson of the North Dakota Housing and Finance Agency fielded questions about the housing shortage in the area and spoke about the new Housing Incentive Fund that could provide seed money for affordable workforce housing. “This program allows the state to issue income tax credits for contributions made to the program,” he said. “This is a dollar-for-dollar benefit for contributions to a housing project in your town or your area.”

The state legislature approved up to $15 million in such income tax credits, with just over $6 million claimed so far. “Our goal is to put that $15 million to work this spring,” Anderson said, adding that the funds could generate up to $45 million in new housing projects.

He noted applications for the funds had been received already for nine projects, including Kenmare, Crosby and Williston. One project in Crosby has already been approved, along with one in Minot. The majority of the HIF has been targeted for projects in oil- and disaster-impacted areas in the state, with funds awarded as a type of “soft loan” for projects that meet the application requirements.

Ness asked Anderson to define a soft loan. “It’s not payable like a mortgage,” Anderson said. “When the project has the capacity to start paying money back, we’ll talk about some type of payments.”

Anderson emphasized that projects applying for the HIF should address the needs of a range of incomes. “These are all multi-family projects,” he said. “Part of the unit must be dedicated to low income housing. Our intention is to help people working on Main Street, who may not qualify for assistance, but they’re not making enough to cover some of the rents being charged in the area.”

He encouraged the group to maintain a local focus on housing needs. “What communities do with their housing is a local decision,” he said. “You want to protect your residents and their businesses.”

Community leaders raised a few concerns about sewer system capacities, demands on emergency fire and ambulance services, and ways to provide housing for both long-term and transient workers. Anderson suggested that cities complete a strategic plan if they had not already done so and continue communicating with each other about common problems.

“Every community is in a different position,” he said. “You’re in a similar situation, but with different constraints. I’m impressed by how much these communities already share information and best practices with each other.”