Dickinson may need $100M debt load in order to complete infrastructure projects
The city of Dickinson will have to shed its debt-free record in order to complete infrastructure projects needed to remain functional, officials said.
The city continues to grow at a record pace and has run out of developed lots. Water and sewer infrastructure needs to be updated and built to keep up with demand. Streets need to be repaved, paved and, in some cases, created.
And Dickinson city officials know that growth doesn't come for free.
"When we look forward to the next two years, I think we'll invest somewhere between $140 million and $200 million in infrastructure, and that's what we should be doing," Mayor Dennis Johnson told U.S. Department of Agriculture Housing Administrator Tammye Trevino earlier this week.
Johnson explained that the city levies $3.5 million a year in property taxes, collects between $10 million and $12 million in sales taxes, and as a result of state legislative action will receive an estimated $33 million to $43 million in oil impact funds.
By the end of this biennium, Johnson said the city is looking at a debt load of $100 million in order to get infrastructure in place. At the end of the last fiscal year, Dickinson was debt free.
One way to help raise money for infrastructure costs is to charge developers to hook up water and sewer systems to the city's existing systems when subdivisions are created and building permits are issued.
"We anticipate that this would help to fund some of the infrastructure that the city will need to put in within the next few years in order to extend the infrastructure out to some of those areas that are newly developing," City Attorney Matt Kolling said.
The city does not want to use too many special assessments to complete work, but Commissioner Gene Jackson worried that charging developers was just another way to special assess citizens.
"We've talked a lot about not wanting to do special assessments on raw ground -- it seems that's what this is," Jackson said. "Just a different form."
Another worry was that creating an ordinance requiring a developer to pay up front may discourage growth in the future, Johnson said.
"If we're in a slow period and somebody does come along and says, 'I'm willing to build something here,' then we have a pretty huge fee attached to that and it might be in our best interests to accept less in order to have the construction," Johnson said. "As long as you're in a pretty robust economy, I think the way you have it would work.
"But if something changes and our economy isn't as strong and we would be happy just to have almost anything built now you have, by formula, a pretty big fee against them," he said.
At Monday's meeting, the commission chose to reject the ordinance as written and asked Kolling to rework it, possibly introducing it into city policy versus ordinance.
The city's current water and sewer system is running at max capacity, Johnson said.
"This last rain -- we're a bit nervous because a lot of that rain water is going to flow through our sewer system too," Johnson said. "We lose too many lift stations, we're going to have a bunch of back up in basements here."
One of many projects to keep the city service running smoothly is the under-construction wastewater treatment plant. As the city grows, it will add water mains and water towers to keep up with the demand.
Ground was broken earlier this year for a public works building at the Baler Building site. The move is expected to help residents more easily locate the department they need.
The city has also approved the first step in constructing a public safety center, which will house the Dickinson Fire Department and the Dickinson Police Department.
The commission unanimously approved Schutz Foss Architecture to design the building.
The city may be able to use low-interest USDA loans to build the public safety center.
"We do hospitals, we do fire stations, we do police cars, ambulances," Trevino said. "Anything you consider an essential community facility. If you need it for your services, we can build it."