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Monday, March 16, 2015

SCHMID: LOOKING BACK FROM THE LEFT COAST - MARCH 15, 2015

ONCE, ND DID NOT LIKE LISTS -- the state was portrayed as a low income backwater. Today, ND revels in lists. To assist in the reveling, the Forum published a list of lists showing Fargo and ND in a favorable light. The state has the best economy, more centenarians (people aged 100 or more) per capita, etc. The F-M Chamber of Commerce gleefully provides an even longer list.
 
SURGE MONEY The so-called legislative “surge bill” pushes $1.1 billion to local government in ND. The idea is to permit counties and cities to start critical road and infrastructure projects as soon as weather permits. Most of the money goes to western counties. The first instalment of $300 million has been disbursed. It’s big money for some, for example, Williston received $64 million and Watford City $32 million. There are smaller, yet meaningful, amounts for non-oil producing counties. Stutsman County (Jamestown) received $10,000 for each of its 64 townships.
 
CARNAGE IN OIL COUNTRY There are a shocking number of crashes involving multiple deaths and semis in Oil Country counties. Near Watford City a semi struck a pickup which ran a stop sign killing two men from Florida and one from Idaho. In late February three Ray high school students were killed on Highway 2 and in late January two teenagers from Alexander were killed. In both cases the teenagers lost control and struck a semi. The accidents took place in Williams (Williston) and McKenzie (Watford City) counties.
 
WATFORD CITY is frequently mentioned here. You may ask why this little town you never heard of gets so much attention. Well, in the 2010 census, Watford City had only 1,400 residents, its current population is a little indefinite, but is expected to rise to 24,000 in the next 10 years. In 2010, a city of 24,000 would have been the fifth largest city in the state. The city is building a new school, hospital and events center. A city official said, "It's 30 years of building going on in three years ... it's overwhelming that way but it has to be done."
 
MAN CAMPS The second largest town in McKenzie County after Watford City is a man camp surrounding a fuel and food stop out on U.S. Highway 85. A university researcher said, “It’s completely modular -- it will not be there in a decade, or maybe it will be. It’d be interesting to come back in 30 years and see. North Dakota’s always been a place of dreams where more people couldn’t make it than could.” ND currently has 50-60 man camps -- researchers are building a data base for future research.
 
GRAND FORKS grows a little anxious. Not long ago it was ND’s second largest city, then Bismarck slipped past. Now, Minot is in the passing lane. Fargo always concerned Grand Forks, but columnist Mike Jacobs sees the growth of cities in the west as a new source of anxiety. How can the anxiety be soothed? Jacobs hints that Gov. Dalrymple “might want to spread a little more love in the direction of Grand Forks.”
 
TITAN MACHINERY A Dickinson Press news article extols Titan Machinery’s construction equipment dealership in Dickinson. The branch is growing and expanding its facilities because of business in the Oil Patch. There is a very different mood at company headquarters in West Fargo. Titan Machinery has 95 North American dealerships plus dealerships in southeast Europe and the Ukraine, and is the largest Case IH dealer in the world. The company has expanded rapidly by acquiring small dealerships, but is experiencing operating losses and negative cash flow. It has been hurt by a downturn in American agriculture and weak business and currency losses in the Ukraine.
 
WATCH TITAN CLOSELY Numerous parties on the Internet speculate Titan may be near bankruptcy, although the company counters those rumors in SEC filings and press releases. The company is reducing employee headcount and closing branches. In September 2013, I commented, “The company (Titan) is very sensitive to commodities and agriculture. Unless the company trims its sails, there may be trouble.” Preliminary results for the year ended January 31, 2015 show reduced revenues and significant losses. This week, the stock price, already low, dropped over 15 percent.
 
BE ALERT FOR “INTELLIGENT DOZERS” Some western ND companies have had surprising growth due to the oil boom. Baranko Bros. in Dickinson was a small company specializing in earth-moving projects on ranches. Today, they have 200 pieces of equipment and 100 employees, and are involved in major road and infrastructure projects. The company uses large, expensive equipment. One example is a Komatsu “intelligent dozer” which uses computerized design plans and GPS-guidance to operate on its own. Oh! Oh! a bulldozer with a mind of its own -- sounds like a horror movie.
 
DON’T CALL US MIDWESTERNERS Certain business and civic leaders in five northern states are rejecting the label “Midwest,” a term used to describe a nebulous blob of states -- an area left over after subtracting more well-defined regions of the country. Groups in the two Dakotas, Minnesota, Wisconsin and Michigan seriously want to rebrand their states as “The North.” They believe the new name will set the five states apart. Not everyone is aboard.
 
U-HAUL FRANCHISES can be an indicator of business conditions. U-Haul in Williston sees five times more people moving out than moving in. It’s not that the number going out has greatly increased, it’s more that very few replacements are coming in because oil companies are lowering their rig counts.
 
DAKTOIDS: UND needs a lot of policing -- the school has 18 full-time officers . . . Bird people say ND has 140 bald eagle nests compared to just a handful 100 years ago . . . This week there were 112 active drilling rigs in ND -- regulators estimate that 120 to 125 rigs are needed to maintain current oil production levels

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Comments

Grand Forks Mayor Jacobs hints that Gov. Dalrymple “might want to spread a little more love in the direction of Grand Forks.”

The good mayor should remember that love = work + courage. These attributes cannot be just “spread”. No, they are qualities that must come from the individual, not penalizing institutions like government that steal from the economically successful to benefit campaign contributors.

Money is NOT love…

Lynn Bergman on March 16, 2015 at 02:18 pm
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