June 12, 2013

City needs $197 million to meet growth needs

By Kate Ruggles
Farmer Staff Writer

The city of Watford City has identified over $193 million in infrastructure improvements and growth needs that must take place for the city to grow to its projected population of 7,500 people. And yet, with the state’s new practice of giving higher priority and funding to hub cities and its reduction in the amount of grant money it will be awarding to impacted cities, Watford City will more than likely be put in the position of having to pick and choose which improvements actually get done.
The city’s $193,886,000 Short Term Capital Improvement Plan is an assessment of what improvements the city must make to accommodate a population of 7,500 or more permanent residents. The plan calls for $25 million in water line improvements, $40 million for sewer lines, $9.5 million for existing transportation corridors and $118 million to construct extended transportation corridors. All of these improvements represent new construction projects that the city believes are critical in order to handle the community’s growth needs.
“We are chasing our tail trying to catch up,” states Curt Moen, Watford City city planner. “We build new infrastructure. And as fast as we can build it, it is taxed to beyond capacity.”
Moen states that the city’s existing infrastructure is 40 to 50 years old, and until it is upgraded, the city will only be able to build so much new infrastructure.
Additionally, Moen says the city needs to address sidewalks, parking, existing streets and traffic patterns, as well as needs to build new streets and create new traffic patterns.
“When we start having 10,000 permanent residents, the city will need a far better road system,” states Moen. “What we did in the past was funnel everyone in and out of Watford City by Main Street, U.S. Highway 85, N.D. Highway 23 and the bypass corridor. But that doesn’t work anymore. Traffic is backed up from one end of Main Street to the other.”
Moen says the city needs to build a new ‘box’ that will pull traffic off of Main Street and the highways, and get it onto other corridors around the city. To do that, the city would need  to make 17th Street to the north of Watford City, County Road 36 to the east, County Road 35 to the west and 11th Avenue to the south, traffic corridors that will allow for new traffic patterns in and around Watford City.
“But the state said, ‘no’ they would not fund the city’s road infrastructure projects,” states Moen. “So we will have to develop streets as the needs present and as developers push into new areas, instead.”
Everything in the city’s Capital Improvement Plan, according to Moen, was geared toward providing housing and infrastructure. They were projects that needed to take place in order to, as Watford City Mayor Brent Sanford states, strengthen Watford City’s base core infrastructure.
Without a strong core, according to Sanford and Moen, the city cannot expand. Nor can it service every aspect efficiently.
“We expect to receive between $10 million and $20 million from the Energy Impact Grant process. We also expect to receive an additional $15 to $20 million of oil gross production tax distributions over the next biennium as a result of the new oil and gas production tax formula distributions,” states Sanford.
While Sanford states that may sound like a lot of money, it actually only represents 10 percent of the needed amount.
“We hoped to receive a larger share of the billions of oil severance taxes generated in this area during the recently completed legislative session,” states Sanford. “But those efforts ended in disappointment.”
So why does Watford City need so much help from the state?
It is simple economics. According to Moen, though there are triple the number of people relying on Watford City’s infrastructure, they are viewed by the state, and the U.S. Census Bureau as temporary. So because of that view, those thousands of people who are now living in and around Watford City do not count toward the city’s population. Also, and more importantly, because they are temporary, they do not contribute to the city’s tax base.
“Temporary residents don’t add to the city’s tax base, yet they add strain to the city’s infrastructure,” states Moen. “When the city’s tax base stays virtually the same, but in turn the city must service three times the number of people, it is hard to make improvements without state help.”
As a result, Sanford says the developers will be forced to put more toward infrastructure, which will continue to drive up the price of new housing.
“The rest of the money for infrastructure will have to come directly from the developers in the form of additional ‘off-site improvement’ investments to connect themselves into the existing infrastructure. These amounts are customarily paid by the cities, but we obviously do not have the money to do it all,” states Sanford. “So the end result is that the new housing will be more expensive.”
According to Sanford, when a developer has to spend an extra $10 million to build collector streets for a mile or two to reach their development, as well as a mile or two of water and sewer branch lines to connect themselves to the main lines, that additional cost will be spread to the housing units and commercial units within the new development.
Moen states that the city has requested all of the $193 million necessary to complete the city’s Capital Improvement Plan in this most recent grant application process, though they only expect to receive $30 million. And if the state does not help Watford City fund its needed infrastructure developments, the city will be forced to move ahead with a modified plan.
“If the state wants to cater to the industry without giving us any help, then we will be in the position of having to just take care of ourselves,” states Moen. “We will continue with what we have already started, but beyond that, the industry will have to start looking somewhere other than Watford City.”