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Wardner defends oil money distribution

City Commissioners Tuesday approved the demolition of an abandoned house on 523 Dupont Street. The house has become "a public nuisance," Leonard Schwindt, city building official, said. (Brandon L. Summers / The Dickinson Press)

State Sen. Rich Wardner, District 37, attended Tuesday's City Commissioners meeting to give a presentation on state distribution of oil production tax revenue.

The infrastructure funding bill, using funds from oil and gas production taxes, is called "the Prairie Dog bill" because "prairie dogs do a great job of building infrastructure."

"This particular bill is critical to this community," Wardner said. "We started studying hub city funding because it was put into a study by the legislature, by legislators who felt that the hub cities were getting enough. You don't need it."

Hub cities incurred, and still have, debt from energy development in the area.

The formula assumes steady production at 1.2 million barrels per day, with a price average for the biennium at $52.50, which he says are conservative figures.

"They're probably going to be better in reality," he said.

There are two 5 percent taxes in the oil patch, Wardner said: the extraction tax, generating $2.2 billion, and the gross production tax, generating $2.25 billion.

Funds from both taxes go into "state buckets," Wardner said, but non-oil producing counties want to draw from the gross production tax revenue.

Wardner said he hopes the new infrastructure bill will end the dispute.

"This is greased and ready to go," he said. "Everybody's excited and I'm relieved, because we are going to be able to hold our hub city money. Until we did that, it wasn't looking good."

There was talk of reducing the split between the state and political subdivisions from 70 and 30 percent to 80 and 20 percent, Wardner said.

"It was serious," he said. "I'm glad a lot of people put a lot of work into this. We can take a breath again. It has support across the county."

The infrastructure funds are needed in hub cities, Wardner said.

"We were at 16,000 to 17,000 population, and we were happy with our lagoons, even if they stunk three weeks in the spring," he said. "But when we went over 20,000, we had to build a wastewater treatment plant, and we went into debt. For some reason, people have a hard time understanding that."

Commissioner Carson Steiner explained that, even with the tax revenue, the city has been operating on a tight budget.

"We're thin," he said. "The last three years, we've paid out debt from $100 million to $88 million. It almost feels like we could be penalized for being efficient. They're saying, 'Look what Dickinson did, they don't need it anymore.' But we've squeezed it so tight."

Commissioner Sarah Trustem emphasized the importance of the revenue for the city.

"We took $4.5 million of that to offset our funding in the general fund," she said. "If we were to lose that money, we would be in very serious trouble."

Wardner applauded the commissioners' efforts.

"We are a shining light to people out there. They look at Dickinson and say, 'They did it right,'" he said. "And I'm right with you. Pay that debt down as quickly as possible. The big thing is, you can rely on that money now because there's no sunset clause."

He added, "If somebody tries to put it on, there will be a big fight."

Mayor Scott Decker thanked Warner for his efforts.

"I know how tough it is. Changing the minds of some of these legislators, it's almost impossible," he said. "Oil does have a great impact on this state, regardless of what they think they're getting or not."

In other business:

A contract for a new city administrator was approved.

An offer has been extended to Joseph Gaa, city manager in Chariton City, Iowa.

City commissioners interviewed four candidates total in September to replace former city administrator Shawn Kessel, who left the position in May.

"Mr. Gaa was extended an offer for the position of city administrator," Jan Murtha, city attorney, explained. "This contract represents the negotiated terms of that employment arrangement."

The contract was given to commissioners Tuesday for comment and approval.

"Assuming it's approved, Mr. Gaa should begin with the city on Nov. 26," Murtha said.

Deputy Administrator Linda Carlson will continue to serve as interim administrator through December while Gaa receives training.

Commissioners also approved a pay increase for Carlson as deputy administrator.

Decker said Carlson had been promised an increase two years ago, but it had not yet come to fruition.

Her salary will increase to $108,000 starting Jan. 1. After six months, Carlson will receive a 2 percent bump along the lines of the city's other salaried employees.

Commissioners also approved the demolition of an abandoned property.

Building Official Leonard Schwindt described the house at 523 Dupont Street as "a dangerous building" and "a public nuisance."

Its owner, Schwindt said, passed away in 2015 and the house has since been sitting idle.

Photos taken in 2016 showed excessive plant and tree growth blocking public sidewalks that has since escalated, Schwindt said.

In August, it was brought to the city's attention that the front door had been kicked in.

Photos showed the interior dense with wreckage, filth and garbage.

"We suited up to take some of these interior photos. We stayed in as minimal amount of time as we could because of the odor of the property," Schwindt said.

Taxes have not been paid on the property since 2015. It will go into default next year.

No one has come forward to claim the property.

"Looking at the property, I don't know that someone would want to claim this," Schwindt said. "There's substantial work you'd have to do to comply with code."

Steiner agreed with the measure, providing no next of kin has been identified.

"As long as we've got our Ts crossed and Is dotted, we better do it," he said. "It's a hazard."