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Dickinson to receive $5M in first round of oil-impact grants announced Thursday

BISMARCK -- State officials authorized nearly $54 million in grants on Thursday to help oil-impacted cities with infrastructure needs.

The state's three largest cities in oil country -- Dickinson, Williston and Minot -- received $21 million after submitting $48.9 million in project requests.

Dickinson will receive the $5 million it requested to help pay for a wastewater treatment facility. The Board of University and School Lands also approved $12 million for Williston and $4 million for Minot to help with infrastructure development.

Smaller oil-impacted cities split $32.5 million after requesting $93.4 million in assistance.

Approved funding includes $200,000 for street repair in Belfield, $100,000 for truck route repair in Beach and $2 million for projects in Killdeer.

Killdeer Mayor Dan Dolechek said it was tremendous news for the area.

"It is nice to see some of the revenue sticking around our part of the state helping deal with problems that we have since the oil boom has been around," he said.

The money will go toward furthering housing development, Killdeer Auditor Dawn Marquardt said.

"We needed to get some infrastructure in the areas that are left to be developed," she said, adding that the city plans to improve the sewage system and roads. "If we can get that in there, the chances of development are going to be better as far as housing."

Other infrastructure allocations include $4.1 million for Stanley, $7.7 million for Tioga and $12.3 million for Watford City.

The money for these grants comes from taxes paid to the state by the oil and gas industry.

The Oil and Gas Impact Fund is expected to collect $100 million during the 2011-13 biennium to help address the growing needs in western North Dakota's 17 oil- and gas-producing counties. The money allocated on Thursday was the first round of funding awards for the biennium.

Just because the money was approved does not mean the check is immediately in the mail, however. Since the biennium began July 1, the impact fund needs time to build up the tax money that supports these projects.

The cities must also move forward with the projects before the state sends its payment. Officials say the authorized state funding helps cities to plan and begin moving forward.

An advisory committee of local officials in western North Dakota prepared the funding recommendations for the small cities. Bowman Mayor Lyn James said the committee did its best to award money to projects that would have the most impact.

City officials from Dickinson, Williston and Minot each gave presentations Thursday to the Board of University and School Lands.

A mechanical wastewater plant will be constructed in Dickinson.

Dickinson Mayor Dennis Johnson said the grant funding will help progress a wasterwater project that needs quick action.

"We are already seeing performance issues with wastewater and every day we have a new home or new business connecting into the system," he said. "It is a project that we have to move as quickly forward as we can."

Dickinson City Administrator Shawn Kessel was ecstatic about receiving the impact funding. He said receiving the funding would alleviate financial stress on the city as well as consumers.

"It lowers the financing of the project, and therefore lowers the cost of our users in the end," he said.

The wastewater project was expected to cost $11 million, but due to engineering changes in response to population increases it is estimated to cost over $35 million, Kessel said. He added that the working population for the project is expected at nearly 31,000 which requires a mechanical plant instead of a lagoon-based system.

"In essence you double the cost of construction and the cost of operation," Kessel said.

Sen. Karen Krebsbach, R-Minot, said funding for the large cities should be distributed equally, not according to a "gentleman's agreement" that suggested approximately 57 percent for Williston, 28 percent for Dickinson and 14 percent for Minot.

Attorney General Wayne Stenehjem, who serves on the board, said there will be more opportunities for the cities to receive money from the state.

"This is just one step along a long journey that we're all taking together," he said. "This isn't the end of the line."

Williston, Minot and Dickinson are eligible to share $33 million during the two-year period, while other political subdivisions -- such as counties, townships and smaller cities -- are eligible for $61.4 million.

Schools with rapid enrollment growth are eligible for $5 million, and $350,000 will go toward updating road studies. The remaining funding is for administrative costs.

October's funding round will focus on township infrastructure, and January's will focus on emergency services/response assets and training. The April round will provide grants to airports, counties, parks and other infrastructure.

Press reporter Sean Soehren contributed to this report.

Finneman is a multimedia reporter for Forum Communications Co.