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Dustin Monke, Forum News Service, Published March 01 2014

The boom’s ‘epicenter’

WATFORD CITY, N.D. - There are days, Brent Sanford said, when he struggles to wrap his head around everything happening in his hometown.

Ten years ago, Sanford returned to Watford City to take over his family’s automotive dealership. He soon found himself on the city council and was elected mayor in 2010 -- right as oil and gas exploration in the Bakken shale formation was beginning to put a stranglehold on northwest North Dakota communities.

Today, Sanford and other Watford City leaders are trying to keep their once-quiet community from becoming just another “dirty oil town.”

The goal, Sanford and other city leaders said, is to keep pace with growth that has gripped Watford City because of the unprecedented oil boom -- it enters the construction season with $240 million in infrastructure needs, ranging from streets to schools -- while maintaining its appeal as a progressive and welcoming home where people want to put down roots.

But that is more challenging than anyone could have ever imagined.

“Everything is in flux, basically,” Sanford said.

Quadrupled population

In a matter of four years, Watford City’s population has more than quadrupled.

It went from having 1,744 people during the 2010 census -- a figure almost everyone here knows by heart -- to an estimated 7,500 residents, give or take a thousand in any given month. City leaders expect at least 10,000 people, if not many more, to be living here by summer because of the onslaught of construction and seasonal oilfield work.

Watford City is preparing for a permanent population of at least 17,000 based on estimates provided by the state Department of Mineral Resources and North Dakota State University demographic researchers.

Watford City is the seat of McKenzie County, which has become the heart of North Dakota oil production. In January, 40 percent of drilling permits issued in the state were in the county. It produced more than 8 million barrels of oil in December, according to the state’s Department of Mineral Resources. The agency estimated as much as 15 million barrels of oil a month could be produced in the county by 2017.

“It’s just the epicenter up here,” McKenzie County Economic Development Director Gene Veeder said. “So part of the challenge right now is to make sure we recognize the opportunity and make sure we don’t get overwhelmed by the challenges.”

But Watford City and McKenzie County are in the midst of what Sanford called “a crisis.”

Infrastructure needs

Some challenges include building a new school and a new hospital and improving sewer and water service.

District residents will vote March 11 on a $27 million bond referendum to finance a $50 million high school building project. Student enrollment has doubled since 2010 and buildings, which are in fine shape, are simply running out of space.

Growth is outpacing street construction to the point where developers have to do their own off-site improvements, including building their own streets.

There is a plan to build two new water towers and a $17 million sewage treatment plant to replace old lagoons that are environmentally unsound based on the current population.

A $2 million overhaul to city hall is nearly complete, but the new offices are already overflowing. Across the street, there’s a $1 million fire hall overhaul project. The city will need more police officers -- it’s searching for a new police chief, too -- and the county could use more sheriff’s deputies. The McKenzie County Courthouse is being renovated and is operating out of what residents are calling the “courthouse man camp,” at the county fairgrounds on the city’s east edge.

“We would like to be able to stay ahead of the curve instead of getting run over and trampled,” Sanford said.

Looking to the Legislature/

McKenzie County and Watford City are looking to the state to help expand nearly every entity of their overworked local government.

In the last legislative session, Watford City was awarded $10 million in oil-impact grants after requesting $190 million.

In 2012, an estimated $1.17 billion in annual gross production and extraction tax was generated from McKenzie County oil wells. The county’s annual return is about $80 million, according to the North Dakota State Treasurer’s Office. That’s less than 7 percent allocated toward the county, for its schools, cities and townships.

“It’s just not going to where it’s supposed to go,” said Rep. David Drovdal, R-Arnegard, who graduated from Watford City High School and is a lifelong McKenzie County resident.

Sanford and McKenzie County School District Superintendent Steve Holen are involved with the North Dakota Association of Oil and Gas Producing Counties, which has been asking for a special legislative session this summer. Last week, the Legislature’s Democrat-NPL leaders called for a special session in May for emergency funding to Oil Patch communities.

“We’re sticking our fingers in the dike, holding back the water, with $1 million and $2 million projects,” Sanford said. “... We’ve just got this monumental price tag that just blows your doors off. How are we going to come up with 240 million bucks?”

Drovdal’s district is the largest in the state, encompassing six of the western-most counties in North Dakota and part of Dunn County.

“With the lack of legislators in western North Dakota, it’s sometimes tough to keep (western projects) from being the last thing that’s passed. That’s kind of what happened last time,” Drovdal said.

Enrollment boom

If there is one place where Watford City wants to see more money flow, it’s into the county’s school system.

When Holen came to Watford City in 2005, he said the school district was facing the question of whether it should make the current high school a K-12 building because of declining enrollment.

“It just so quickly changed,” he said. “Nobody really saw this coming.”

Holen said if enrollment trends continue, Watford City will soon be forced to use multiple portable classrooms.

The district’s biggest classes are kindergarten and first grade with more than 110 kids in each. Its K-5 enrollment of 567 is bigger than the entire district enrollment in 2010.

“It’s kind of just beginning and I think that’s what this county and area understand,” Holen said. “We’re still in the second inning of a long game.”

The proposed new 162,000 square-foot high school would have a capacity for 800 students. The old high school would be used for other grades.

If the bond referendum passes, Watford City will still need about $23 million to build the school. Some leaders would like to ask the state for help.

“As far as the school, it’s tough to appropriate for any one district because then pretty soon you’re going to end up doing it for all the districts throughout the state,” Drovdal said.

In addition to a new school, city officials are proposing a $50 million on-campus events center for high school activities and city functions. It would house a basketball arena, two hockey rinks and a competition swimming pool.

“The ability to retain and attract the workers that are needed for this thing for the next 50 years is not going to be there if we don’t have the right-sized facilities,” Sanford said.

Finding a home

Holen said he expects school enrollment growth to continue once more homes are built.

“We haven’t even got to the point of where the housing has caught up and the families are going to move,” Holen said. “So I think our largest growth is yet to come. More and more now, the wife is coming here for work (saying), ‘My husband has been here for two years.’”

Apartment rents are slowly falling from the ridiculous rates of the early boom, Sanford said, but very few units are even available. The summer construction season is slated to be hectic with apartments, twin homes and townhomes, and new housing developments all set to take shape.

But housing hasn’t caught up to other developments in Watford City.

Sanford said he received a call earlier this year from an official with Hess Corp., asking why the company couldn’t fill a $100,000 a year position at its Keene office northeast of Watford City.

“I said, ‘I wonder why? Where in the world are they going to live?’” Sanford said.

Creating a community

City Auditor Peni Peterson said she is beginning to see signs that the city is going beyond being one big man camp as families begin to make it their new home.

“Before, when it kind of first happened, you didn’t really see the family part of it. It was a lot of the men. They needed a place to eat and a place to sleep,” Peterson said. “Now you go to these groups and there’s a new mom with her kids and she’s ready to volunteer. We are getting some of that support now because they are moving here.”

Sandy Updegrave is one of those people. The Oregon native and her husband moved to Watford City in 2012, and brought their daughter and son-in-law. Updegrave said they found a community.

They still live in the RV they came to North Dakota in, but the family is doing well. Updegrave is the manager of Outlaws Bar & Grill, where her daughter bartends, and her husband and son-in-law are electricians.

“I love this little town,” she said. “It’s a nice little town. There’s not tons to do, but we’ve met some great people, some great friends. Lots of opportunities.”

‘The busiest ER in the state’

As more people like the Updegraves move into Watford City, the more services it’ll need.

McKenzie County Healthcare Systems plans to break ground on a new $57.3 million hospital and clinic this spring to replace its 62-year-old facility.

Dan Kelly, CEO of McKenzie County Healthcare Systems, said the hospital averaged 150 emergency-room visits a month prior to the boom. That number has increased to about 550 each month. They'll add two new physicians this month and a temporary modular unit to the existing clinic.

“Beyond the increase in emergency room visits, we’re seeing a 20 percent increase in clinic visits year over year,” Kelly stated in an email. “We are at the point where, due to space limitations and our limited number of providers, we cannot accommodate additional patients.”

Commercial growth

More families means a greater demand for everyday services for the booming little city.

However, luring retailers and restaurants is challenging.

Peterson said the 2010 census figure is holding Watford City back from recruiting new commercial businesses.

“There’s a lot of commercial properties that won’t come into town based on our population,” she said. “We say, ‘No, come see it.’ You can’t just look at the 2010 number. You’ve got to see what we’re living.”

Veeder said more commercial development will come when permanent housing improvements allow more people to become permanent residents.

“The retail piece and service piece, that comes with the rooftops,” he said.

Alleviating worries

The road traveling north into Watford City is a somewhat unsightly mix of campgrounds, crew camps and oilfield service companies. There’s an agricultural implement dealership, an Assembly of God church undergoing a huge expansion, two new hotels opened within the past year, and a 120,000-square-foot retail complex completed last year that features a CashWise supermarket.

City streets are congested and parking is a problem on Main Street. Traffic on two-lane U.S. Highway 85 that cuts through town is packed much of the day, especially in the late afternoon when semi-trucks and service trucks begin to back up on their way into Watford City from the south and east.

A Highway 85 bypass -- sending truck traffic away from Watford City -- is to be completed either later this year or in early 2015. Another bypass that connected Highway 85 to eastbound Highway 23 will get an expansion.

“One of the biggest challenges you’ve had in this community is adjusting to that traffic,” Veeder said.

Sanford said he and others have a vision of what Watford City could become in five to 10 years.

The hope, he said, is that the bypass projects alleviate the city’s “frantic” pace. There’s also an effort to improve Watford City’s cleanliness “instead of just being covered in a layer of dirt all the time from the constant pounding around town of the trucks.”

City leaders hope population estimates are somewhat overblown and it’ll top out around 7,500 to 10,000 people.

“But I think that might be naive,” Sanford said. “I really feel that it might be headed for growing larger than that.”