Legislative Reports & Updates, Reports & Updates from Phil

Legislative Report on the Oil Patch – Senator Murphy

 Legislative Report on the Oil Patch – Senator Murphy

Like most of us, you know a lot about North Dakota, so I would like to see how you do guessing the name of the county and the county seat I visited this past week.  Here are a few of the situations facing that community – of course I will provide the answer at the end of the clues:   They find themselves in the Oil Patch and their county currently produces a quarter of the oil coming out of the state. The seat had 1,500 people for the 2010 census -now they believe the population of their city to be 12,500.  In 2013 their county gets 10% of the Gross Production Tax (GPT) back from the state to local governments.   In 2014 it will be closer to 18%. (GPT is the 5% one, the Extraction Tax is 6.5% – when combined this county will get back about 7.5% of what they contribute to the state in 2014).  Their county budget for 2008 was $13.1 million – in 2013 it is $98.3 million!  They neither have nor do they know how they will have living spaces that teachers, city/county employees can afford.  Houses that I would assume are worth $100,000-$200,000 here in the rural valley are $450,000 to $750,000 there.   Furthermore, with this rush for living spaces in an area where previously economic development had always been a struggle, zoning and the need for strict zoning had been lacking.  As a result, many trailers/mobile homes are scattered around town that have been grandfathered in now that zoning has been put in place.  It came so fast that these residences have no addresses and no property taxes, so the city recently put in place what can effectively be characterized as a $400 bed tax as a way to attempt to raise some revenue.  Have you guessed where this is yet? 

While many of these situations exist to some degree in many small towns in the patch, I have been referring here to McKenzie County and Watford City.  The city annexed out so that they are about 5 miles square and are attempting to control the sprawl both industrial and residential.  Their mayor, Brent Sanford, is a smart guy who is a third generation business owner in town (car dealership), had been a CPA and a CFO for a Denver corporation who came back home to run the business and serve the town he was raised in.  He, Linda Svihovec (McKenzie Co. Auditor) and their county job development authority executive (Gene Veeder) packed my life-long friend and fellow senator George Sinner into a county vehicle and we drove around for a few hours.  These are passionate public servants combining the powers and problems of their respective local governments who were pleased to try and explain their plight.  Essentially, they need $190 million to house some public employees and to build the infrastructure (water, sewer, streets) to meet that constructed by developers.  Out of the energy impact fund, which has $40,000,000 for oil patch cities not identified as hub cities (Williston, Minot and Dickinson), Watford City gets $10,000,000. The city and school district has somewhere near 12 new modular (FEMA mobile) homes still wrapped in shipping plastic or whatever that is and are already that many more in need…  You and I may hear that some housing and infrastructure demands are leveling off, and it is true for some places.  It is not the case for McKenzie and Watford.  In 2008, they had a sheriff and 4 deputies.  Now they have 14 deputies and neither of the two outfitted with scales can take the time to weigh trucks because they are always working accidents.  They have 3 more deputies slotted for approval this year.  How one keeps them when they can make double working for the oil industry is another matter.  I may have mentioned in the past that one of my sons is a deputy in the neighboring county (Dunn), so I am well aware of the law enforcement problems.

What to do?  I would propose that we allow those impacted counties to keep a greater percentage of the GPT until this play matures.  Some of the growing pain is probably unavoidable at this rate of development, but we should perhaps consider a quick special session to further increase their share of the GPT on a temporary basis.  We made some good attempts and accomplished much this last session for many out there, but we can afford to do better.  If it is possible for you, visit that area soon to more fully understand – the people struggling to help themselves and their communities will appreciate it.



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