Economic Development programs throughout the Mondak region are generally funded at least in part with county, state, and federal funding to safe guard the the fiscal health of the private sector in local communities. That be can a challenge when one corporation enters or leaves a small community once a year. In a boom economy, that happens sometimes on a daily basis. Economic development directors from eastern Montana and Western North Dakota met in Baker, Montana on Thursday to help each other provide support for their individual communities. Organized by Jason Rittal, Executive Director of the federally-funded Eastern Plains Economic Development Corporation, over two dozen economic specialists from Dickinson to Fromberg to Colstrip and points in between grappled with workforce housing, energy company relationships, long-term resident retention, infrastructure, and emergency services.
Gaylen Baker, Vice President of Stark Development in Dickinson represented the largest community. He told his colleagues “Although I know what the town needs, they need to decide for themselves.” Baker also was a realist about the planning process explaining the because the town is growing fast “sometimes it works out, sometimes it doesn't.”
In terms of workforce housing, the development specialists were in agreement that workforce camps generally want to be visible and public about what they are doing. Communities had different attitudes however about what was appropriate. Dickinson staff said they have put in place a new man-camp ordinance that only gives camps a one year conditional use permit. Baker pointed out that installing a man-camp takes a large financial investment for water/sewer and other utilities. He commented “Who is going to do that on a one year conditional use permit for the money it takes to put in? Nobody.” He also said that outside of the city, they have worked to get camps as close as possible to work sites as opposed to putting them visibly in towns where crews would have to travel 25 miles each way to work sites on gravel roads and they are trying to make sure that sites are located by hard surface roads.
Other communities such as Hettinger, ND said they are keeping workforce housing close to town in order to address control issues. They noted that it is difficult for counties with small law enforcement contingencies to add the equivalent of whole new towns 20 miles away from their base where they may need to travel regularly to. Some communities also faced confusion in regards to the structure of how campgrounds, mobile home parks, and workforce camps are statutorily defined, licensed, and treated by zoning regulations. Other communities said they are utilizing requirements for putting camps in to provide long-time infrastructure from the short term camps by getting the camps to put pipe in the ground and improving streets. Still other communities are charging annual impact fees at $21,000 per acre per year. Killdeer, ND has stopped all outdoor auxiliary housing such as RV's in order to get energy companies to keep control over their staff. Billings County has similar regulations, although it was said that some have gotten very creative in ways they hide their RV's. In Williston, one development specialist said truck drivers have enrolled at Williston State University full-time so that they are eligible for student housing. North Dakota staff encouraged Montana staff to start now encouraging area home owners to consider converting basements to rental rooms and to look at preparing households by teaching them how to screen and set parameters for borders and renters. Landlords were not the only one ones cautioned to screen clients. The staff advised each other to scrutinize business entering the area and to check with the Better Business Bureau and regulatory agencies in their home states to verify their legitimacy before assisting them.
Baker said in Dickinson concerns over who will pay in the long run still exist. Three years ago Dickinson required a new sewage treatment plant that would cost $11 million. Population increases mean a different type of plane is now needed which cost $35 million. Outlying areas also now need water towers. “Who pays for that?” Baker said. In Montana, communities are not allowed to plan for more than 3% growth. In the beginning of the boom three years ago Dickinson offered incentives to builders. Now, however, they are re-thinking those incentives and he said they are at the point that developers know it is profitable to work the area and they will need to include infrastructure up to city and county standards at their own cost.
Small communities are overwhelmed by planning needs. The town of Terry, Montana staff related they are starting the planning process from scratch. Small North Dakota towns have had an advantage not available in Montana because of their state's funding structure. Energy impacts affect roadways and because of that North Dakota communities have been able to access state transportation dollars, planners, and engineers. One model that has not yet been tried but is being considered by several communities is a private road building company that carries financing and through a bond guarantees all work including providing all road repairs for fifteen years.
Emergency services planning was discussed from several angles. In North Dakota, communities with no drilling can not apply for impact dollars. In Montana, some dollars are available to those types of communities. Wibaux said they see a need for increased emergency services capacity. Towns around the room nodded at that sentiment. In North Dakota, Beach representatives emphasized it is important for emergency workers to meet with oil and gas companies and find out their emergency procedures in advance. Because of the some of the dangers of energy sites, companies have special safety procedures that even need to be followed by emergency personnel. The House of Manna, a church-based emergency program in Dickinson, has seen their clientele more than quadruple because families are coming to the area for work after years of unemployment and poverty. Glendive now has an soup kitchen and the food bank program is stretched.
Housing for families and service workers was a common theme throughout the region as well as space for increased customers – whether those customers are students in schools or businesses needing real estate. Business is difficult to attract in the boom because there are no staff. In Williston, the story was relayed that a $5 million dollar incentive was offered to bring a Menard's into town and they were ready to come until they found they could not find staff. Economic development groups are also finding a need to help small business adapt their books to the boom in order to stay afloat. Business has had to learn to raise prices because, in order to keep workers, traditional minimum wage workers are making twice as much meaning other prices must rise to stay solvent. One specialist noted “You can't capitalize growth.” Raising prices also means it is difficult for government support workers to travel the region because state hotel and travel rates are substantially below rates available for lodging and food.
Local business across the region is having a tough time competing. Bank's risk portfolios are stretched and often now requiring 30%-40% down for business loans compared to 20% a few years ago. Some communities have secondary money from economic development groups. Rittal said those funds are a key factor to supporting larger, locally-initiated projects. By the time complicated funding is obtained, out of state companies have come in and paid cash for properties and locally based projects are lost. Other communities, such as Beach, North Dakota, have started micro loan programs that they said have been very successful but because of the regional growth more capital is needed.
After the work session, Rittal spoke with The Examiner about the next steps the economic programs will need to take. Listen to the audio to the left of this column to hear his comments.
Rittal added that regional economic development is all about timing and said “It's a land of opportunity and a land of challenges.”
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