Hard work on Hub city funding pays off

Minot’s hard work on changing the hub city funding formula is expected to pay off very soon.

Under a new formula approved by the 2019 N.D. Legislature, Minot is projected to collect approximately $4 million more in hub city funding over the next two years. Shane Goettle, special counsel who works on the City’s behalf on legislative issues, said the new conservative estimate for Minot’s hub city funding is $12.56 million for the 2020-21 biennium, compared to $8.036 million that Minot received for the 2017-2019 biennium.

The new formula, which was approved as part of House Bill 1066, also known as the Prairie Dog Bill, is far more permanent than previous versions. The formula is based on the oil production tax, with new rules taking effect July 1.

The updated formula is great news for our community. Our position as one of three hub cities in North Dakota is now more accurately reflected within the formula, and the anticipated funding will now be more consistent, allowing us to make better strategic financial plans and decisions. In fact, the expected funding increase is already having a tangible effect on the City’s preliminary budget for 2020 by helping alleviate the need for property taxes increases. We’re grateful to legislators, and local and state officials who worked diligently to update the hub city formula.

While the final changes may have been approved by the Legislature in the spring of 2019, the work behind the scenes began nearly 18 months earlier.

In the fall of 2017, members of the Legislature’s Energy Development and Transmission Committee visited the hub cities of Minot, Dickinson, and Williston in preparation for the 2019 session.

In late November of that year, Chairman Rich Wardner and other committee members joined various Minot officials for a two-day visit that included tours of energy sector businesses throughout the city, including Baker Hughes, Hess, Enbridge, and Cameron Surface Systems. Those up-close, on-site visits allowed legislators to learn first-hand the energy industry’s impact on Minot, despite our community not being located within the Bakken formation. The information shared by employees and company officials reflected the very real and ongoing changes Minot and our business community have endured because of the energy industry’s rapid growth. Those firms, who chose to locate in Minot for strategic business reasons, were prime examples of Minot’s growth during the energy boom. Their participation in the two days of meetings played a key role in educating legislators about the changes taking place in our community.

The legislators also toured several City departments and infrastructure locations. They heard from City department heads who shared tales of losing experienced employees to the energy industry. The City of Minot police and fire departments discussed the rapid increases in the number of calls for service since the city has grown, and the effects of that growth on their staffs and resources. As our city has grown, we’ve had to build infrastructure accordingly, which means we now have more miles of streets that need maintenance and snow removal, along with additional miles of pipe for water, sanitary sewer, and storm sewer that must be installed and maintained.

In discussing the need to change the hub city funding formula, Minot officials and area legislators worked closely with our counterparts from Dickinson and Williston to ensure them that Minot wasn’t trying to take any funding from those cities. Rather, Minot made a compelling case that our community was being under-funded in comparison. Our impact from the energy industry isn’t as visible as it is in Dickinson or Williston; there are no oil rigs within sight of Minot. Yet there’s no doubt we have been greatly impacted by the boom, from rising population numbers to increased class sizes at our schools to busier days at our local health care facilities. Legislators who toured Minot during those two days in November 2017 saw those impacts with their own eyes.

Many officials from Minot, including myself, City Manager Tom Barry, and several council members, repeatedly traveled to Bismarck during the Legislature to testify in favor of the new hub city formula, and meet with key lawmakers to make our city’s case. It made for a hectic schedule during the Legislature’s 76 days, but it was well worth the effort to reinforce our identity as a hub city, and to shed light on our city’s actual needs.

The additional funding of approximately $2 million per year in 2020 and 2021 will make a real difference in our City’s budget. For example, those funds can help us catch up on critical infrastructure needs, like road repairs and maintenance. Or they could be used for costs associated with aspects of ongoing flood control work. Or they could be used to help fund a much-needed fire station in northwest Minot.

The changing of the hub city funding formula was a major legislative victory not only for Minot, but for Dickinson and Williston, as well. It took nearly 18 months of work to accomplish our goal, but the end result is certainly worth the effort. I’d like to thank the state legislators for understanding Minot’s role in the Bakken and the needs that we still have. I also want to extend my sincere gratitude to the City staff for the countless hours in planning and preparation throughout the last 18 months; it was truly a worthy investment that will pay off for years to come.

Sincerely, City Hall

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