By Dickinson Mayor Dennis W. Johnson

Transcript of State of the City keynote speech given Monday, Nov. 4 at the Dickinson Elks Lodge

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Thank you for the introduction and the warm welcome. Thank you for the privilege to serve as your mayor. It truly is an honor. Dickinson is a wonderful community with a great future.

The Bakken development impacting the western 25 percent of North Dakota is a world-class oil development. Bakken daily oil production is expected to reach 1 million barrels per day by January. At that time, the Bakken will become the ninth super-giant oil field globally to produce more than 1 million barrels per day. By some estimates, the Bakken may hold 30 billion barrels of recoverable oil. At today’s production rate that is 80 years of production.

The impact on western North Dakota communities including Dickinson is of epic proportions. It requires from all levels of government a clear vision, extensive planning and massive financial investment to proactively manage the growth due to the Bakken oil development.

During the past five years, the city’s growth has been explosive. City non-industrial water consumption jumped 43 percent in just two years. Our population has rocketed from 16,000 to at least 25,000 people. Dickinson is the third-fastest growing small city in the nation. NDSU projects Dickinson’s population to reach 39,000 by 2020 and to stabilize at 42,000 by 2030.

Dickinson is tracking very close to the NDSU projections and, in my view, can expect to grow about 2,000 people per year for the next few years. The city expects Dickinson’s major growth to be west along Interstate 94 and old Highway 10 and north northwest along Highway 22.

Construction activity in the city’s extraterritorial zoning area is very active. During the past two years, building permit values for Dickinson have been near the top for North Dakota cities. In a four-year period, construction permit values grew by a factor of 10. In a two-year period, the city’s footprint grew by 22 percent. The challenges of affordable housing, constructing and financing infrastructure, traffic management and community safety confronting the city are formidable.

Being Mayor of Dickinson today is like being the man who fell from a 50-story building. As he was passing the 25th floor he was asked how he was doing. His response: “So far, so good.” How is Dickinson doing managing the oil impact growth? My response: “So far, so good” but like the man falling from the building, we have a ways to go.

I will briefly touch on the major areas that the city is focusing on as we attempt to effectively manage the rapid growth thrust upon us by energy impact. Those areas of focus are:

  • Safety and wellness.
  • Infrastructure build-out.
  • Quality of place and life.
  • Long term economic stability.
  • City’s balance sheet.

Safety and wellness is a major focus. Police and fire calls for service have increased significantly and the calls have become more serious. Maintaining the standards for safety and wellness in our community have grown more complex and more challenging. Some of the actions the city has taken are:

  • Increased staff for both the police and fire departments.
  • Retained an aggressive city prosecutor.
  • Designing a Public Safety Center located in the northwest sector of town.
  • Plans to increase water storage capability for firefighting.
  • Expansion of the West River Community Center for wellness.

Infrastructure build-out is a major focus. After an 18-month extensive planning process, the city this past February adopted its Comprehensive Plan. As part of the planning process, the city’s existing infrastructure was evaluated. The plan revealed that the city’s infrastructure was critically inadequate for the expected population growth. The plan provides the city with a course of action and priorities for infrastructure build-out.

Transportation infrastructure and traffic management for the greater Dickinson area is a big challenge. The North Dakota Department of Transportation reports during the past two years, western North Dakota highway traffic has increased 50 percent. In addition to the large amount of truck and car traffic within the city, there are 27 trains daily that pass through Dickinson and that number is expected to grow.

The NDDOT has committed to providing four large projects in the Dickinson area. Besides the four, the city is currently in discussions with the NDDOT regarding other needed significant projects. The city is very pleased with the support and cooperation it is receiving from the NDDOT.

The four large NDDOT projects are:

  • Exit 59 reliever route north and east to Highway 22.
  • State Avenue railroad overpass.
  • Exit 56 exchange on Interstate 94:
  • Exit 56 truck route north and east to Highway 22:

Beyond these four projects, the city has committed to 26 essential infrastructure projects estimated to cost the city about $162 million. These projects are either under construction or are being designed and engineered with the largest project being the Waste Water Treatment Facility and its related infrastructure. Another significant project under construction is the Public Works Building on the east side of Dickinson.

The community’s quality of place and life is a major focus. The city is not sacrificing the community’s quality of place and life for the sake of rapid development. We have said to more than one developer that the city is interested in, constructing projects well rather than constructing projects fast.

The city has introduced higher standards of construction and landscaping for the main traffic corridors entering and exiting the city. The city has retained several engineering firms to assist the city with engineering, construction management and inspection of city-related projects.

The city recognizes that the architecture of public buildings sets the architectural tone for private sector buildings and influences the appearance of the community.

The city is on the verge of substantially expanding its retail community. There are two retail developments at Exit 59 that will contribute greatly to the community’s curb appeal, quality of place and economic health. There is 1.4 million square feet of retail and commercial space currently under construction of being planned for the city.

The community’s long-term economic stability is a major focus. We are positioning Dickinson to be the “Bakken City of Choice.” The city wishes to attract families and energy-related companies who employ highly skilled and professional workers. Our goal is for corporate executives to conclude that Dickinson is where their people want to live.

Another goal is to mitigate the boom and bust aspects of energy development. The city is specifically interested in those energy jobs that are not oil price dependent. Two examples are the Lufkin Service Center and the Dakota Prairie Refinery jobs. These two organizations will continue to function regardless if oil prices are high or low.

Maintaining Dickinson’s diversified economy also is an effective goal to mitigate the boom and bust aspects of energy development. Furthermore, economic diversity is important because it provides a variety of employment alternatives. Not everyone wants to work in the energy industry; not everyone is capable of working in the energy industry. Labor shortages and high housing costs are the primary challenges for non-energy related employers.

The city’s balance sheet is a major focus. As I mentioned earlier the city is committed to spending about $162 million for infrastructure projects that started during the summer of 2012 and will end during 2014. The city has identified another $100 million in infrastructure needs for 2015-16 that the city has not yet committed to.

The State of North Dakota has pledged about $48 million of energy impact aid to Dickinson for the previous and current biennium. The city is able to contribute about $24 million of its own money from sales tax, the water fund and its general fund towards these infrastructure projects. The available funds from the State and City total $72 million.

That leaves $90 million to be funded by new city debt. The State Revolving Fund will provide $69 million in loans for the city’s waste water projects. The city is pursuing both public and private alternatives for the remaining $21 million.

Given the resources available to us, Dickinson is doing a credible job managing the oil impact. The community is expanding rapidly while managing to maintain its curb appeal and quality of life. Dickinson was recently named the nation’s best small town by City government has a clear vision and an extensive plan for Dickinson.

The Bakken oil development is a world-class oil play. It is a big deal and will influence Dickinson’s future for many years. Financing Dickinson’s growth is an enormous challenge for the city. It is the issue that keeps me awake at night.

My fear is that the city will over leverage its balance sheet and exhaust its financial resources before it completes the needed infrastructure build-out bringing residential and commercial development to a standstill. The State of North Dakota must provide much more funding to Dickinson.

These are exciting but extremely challenging times for Dickinson. Like the man falling from that 50-story building who while passing the 25th floor calls out, “so far so good,” so I say to you in response to the question. How is the State of the City?

“So far so good.” “So far so good.”

But there are 25 more floors to go.