Posted 11/03/15 (Tue)
By Kevin Killough
Crosby and Divide County got some attention from state legislators Thursday.
The Energy Development and Transmission Committee gave several towns, counties, and school districts the opportunity to discuss challenges and impacts from the oil industry. They also wanted a report on how far the “surge funding” went to address needs.
“We’re here for one reason — input. We’re here to listen,” said committee chairperson Rich Wardner (R-Dickinson).
Wardner went on to explain the committee will be looking at the state formula for the gross production tax, which gives roughly 30 percent of a portion of the total revenue back to the communities where the oil is produced.
He said the debate over how much political subdivisions should get has been going on since the 1980s. The state prohibits local entities from taxing the oil industry, and the formula was supposed to supply a revenue stream in lieu of local taxes on the industry.
“The state has always taken more than they probably should have,” Wardner said.
At one time, the split sent only 10 percent back to the oil patch. In the last biennium, that share was increased from 25 percent.
“So we’re working it up, and we like to get it established above 30 and leave it for a while,” Wardner said.
County Commissioner Doug Graupe discussed the main challenge the county is facing, which is its need for a new courthouse.
He said the project will accommodate a large growth in demand from everything from social services to the sheriff’s department, over the course of the boom. The expansion is estimated at $10.5 million.
Graupe said this is a central concern for the committee to consider. Four out of the five oil-producing counties, Graupe explained, have had to take out loans to expand government administration buildings.
“These loans are due to the impact of development in the counties,” Graupe said. “We were fine with the size of our courthouse prior to oil production.”
Sen. Brad Bekkedahl (R-Williston) confirmed Graupe’s accounts of other counties’ experiences with the need for courthouse expansion.
“Williams County is literally losing its courthouse because it’s all being taken over by district court,” he said.
Graupe also discussed growing demand for sheriff services. One major issue is transporting suspects to jails in Rugby, which is four hours, one-way.
They recently got approval from the attorney general to transport prisoners to a jail in Plentywood, Mont., but the first prisoner they took there tried to hang himself. The suspect was treated in Billings and he survived, but the treatment costs of $150,000 went to the county.
Graupe also told the committee about demands placed on the Sheriff’s Department from the border patrol, which relies on local agencies for the processing of prisoners.
In one case Graupe recounted, the border patrol officers called the Divide County Sheriff to take on a prisoner in Fortuna, who ended up needing surgery. The county paid $50,000 for the medical care of the prisoner, Graupe said.
“That’s not oil related. That’s border related,” Graupe said.
Rep. Bert Anderson (R-Crosby) told the committee members how Crosby had to contract for ambulance services, which added further costs to the county.
“We couldn’t find enough volunteers,” Anderson said.
Graupe also discussed the challenge of providing social services, which he said are increasing as the oil industry falls on harder times.
The demand for child placement services in Divide County are on the rise, he said. There just aren’t enough homes for kids that need to go into foster care.
“Often times, they have to be relocated to another county,” Graupe said.
Just recently, the county learned it would need a new social worker, as the caseload has become too much.
As part of his presentation, Graupe detailed surge fund spending in Divide County.
He discussed the regrading of Co. Road 2. He said the road requires dust-control applications twice a year.
“This road needs to be paved,” he told the committee.
The problem is that it doesn’t have the width or the sight distance to accommodate a 55-mile-per-hour speed limit, which are required for paving.
He said the road connects to ND 5, which is the location of a number of saltwater disposal sites making Co. Road 2 a highly trafficked path in the county.
Engineers estimate the cost of the project at $1.7 million. Graupe recounted how they had 13 bidders at the Oct. 13 opening.
“That was unheard of,” he said.
The bid selected was just over $1 million, including engineering fees.
He also discussed plans for paving of 10 miles of Co. Road 11, south of ND 5, with a bid opening set for March. The county also plans to pave Co. Roads 12 and 14, a project estimated to cost nearly $6 million, including engineering fees.
If bids for these projects come in as low as they did for Co. Road 2, Graupe said Co. Road 14 will be regraded from Co. Road 11 west, to ND 85.
Anderson provided a presentation on Crosby’s use of its funds, none of which will be spent until next year.
The plan is to do an extensive paving of roads in town, including replacing large sections of the town’s water and sewer infrastructure, which was originally put in in the 1950s.
They will begin bidding in January so construction can begin in spring.
Both Anderson and Graupe thanked the committee for the support they received from the last session.
“We appreciate what you’re trying to do, we appreciate the surge funding,” Graupe said.
Sen. David Rust (R-Tioga) said the presentations were informative. Rust is not on the committee but was invited to come and listen to the hearing.
In that session, the surge bill and a bill to restructure the formula were originally introduced with much more generous amounts going to subdivisions. As the bills were being debated, oil prices fell. The initial largesse eventually came out much slimmer than legislators in the oil patch had hoped .
“I know a lot of us feel the 70/30 should have given more to the subdivisions,” Rust said.
He said the committee going to the trouble to learn more about the challenges is a good sign for the next session, but he also expressed some uncertainty with respect to how oil prices will continue to influence hesitation on the part of the state to let go of more funding.
“I think there will be bills introduced, and hopefully we’ll get something more than 30 percent,” he said.
After his presentation, Graupe expressed optimism the legislature will go into the session with a better understanding of the needs of oil-producing counties.
He said he’s personally known Wardner for years and believes the committee is making a sincere effort to help subdivisions with their current and future needs.
They came here to talk to us “rather than sitting in Bismarck and trying to figure it out,” he said. “So I really appreciate they’re doing this.”