SCHMID: LOOKING BACK FROM THE LEFT COAST - OCTOBER 5, 2014
FORMER MICROSOFT EXECUTIVE DOUG BURGUM says ND has generations of people that are used to seeing small towns shrinking and kids leaving. He sees a mentality of scarcity at all levels of the state that discourages investment and growth. Burgum, probably the state’s leading entrepreneur, believes the state should consider having a population which breaks one million. That’s a big jump -- the state presently has about 723,000 residents -- reaching one million would mean 277,000 new residents, an increase of nearly 40 percent. Burgum would like the state to change its mindset and develop housing, transportation and other infrastructure needed to support a population of a million.
THE TERM “MAN CAMP” creates an unpleasant image of barracks-like housing spread over the prairie. There are nicer terms such as workforce housing or temporary labor housing, but the images are the same. So far, this type of housing has been confined to several Oil Patch counties; however, city officials in both Jamestown and Grand Forks are considering the need for man camps. The construction of a multi-billion dollar nitrogen fertilizer plant near each city will require several years of temporary housing for 1,800 to 2,000 workers at both locations. Upon completion of the plants, the man camps will come down. Camps are definitely required at Jamestown; Grand Forks has more housing resources to accommodate workers, but unless some temporary housing is built there, hotel rooms could become scarce and prices could skyrocket.
HUH! “What’s the worst-case scenario that might involve the new nitrogen-fertilizer plant to be built northwest of town? What could happen in that ‘perfect storm’ of circumstances in which everything goes wrong?” -- These questions were raised by Tom Dennis at the GF Herald. Planners for the proposed Northern Plains Nitrogen plant must be scratching their heads in frustration. Dennis is asking officials to project and disclose consequences which are difficult to imagine -- a considerable theoretical effort. The questions need refinement and some parameters.
UNINTENDED CONSEQUENCES The Resources Trust Fund finances ND water projects. The fund receives 20 percent of the state’s oil extraction tax. Historically, the fund has not been ambitious -- in the 2003-2005 biennium it collected only $14 million. But it is now estimated that 12 years later in the 2015-2017 biennium the fund will receive over $1 billion. The fund’s policies suddenly became inadequate -- they did not respond to changing conditions. Revised policies kick in this week. The new policies prioritize fast-growing areas in oil country and require local agencies to have more “skin in the game” in order to control costs.
WE DON’T WANT TO PAY “But Grand Forks is part of North Dakota, too — and the members of the North Dakota Water Commission should remember that.” -- Does that seem a little plaintive? Tom Dennis at the GF Herald complained because the new policies discussed above would cover only 12-1/2 percent of a new water treatment plant in Grand Forks, leaving local taxpayers with a $114 million burden. That may have been exactly the intention behind the new policies.
THE STATE BOARD PUNTS ND’s two largest universities are academically mediocre by national standards. In a recent U.S. News ranking, UND was #168 and NDSU was #181 among larger universities. Hamid Shirvani, the former chancellor of the ND University System, proposed raising the rankings by, among other reforms, tightening admission standards. The State Board of Higher Education has backed away from Shirvani’s reforms and, with what they call “deliberate vagueness,” are urging the individual campuses to achieve higher admission standards. The board wants to improve the reputations of the two schools, but board Chairwoman Kirtsen Diederich said “we’re not telling them exactly how to do that.”
CLIMATE CHANGE will create winners and losers in U.S. agriculture according to Bloomberg Business Week. Overall, the U.S. will gain more land suitable for agriculture. States in the upper Great Plains (ND and SD) will be distinct winners; states in the lower Great Plains (Kansas, Oklahoma and Texas) will be losers. Corn Belt states near the Great Lakes will also be winners. Among nations, Canada and Russia will have large increases in areas suitable for agriculture.
“THE LARGEST SINGLE MILLING SITE IN THE NATION.” -- The chief executive of the ND Mill & Elevator in Grand Forks says when their current expansion is complete they will be the largest wheat-grinding firm in the U.S. The ND Industrial Commission has approved a $27 million expansion of the mill.
MINNESOTA SOMALIS are spreading over the region. The bulk are in the Twin Cities -- estimates vary greatly, but some are as high as 50,000. St. Cloud, which is about 65 miles northwest of Minneapolis on I-94, has a population of 66,000 of which 8-10,000 are Somalis according to the StarTribune. The St. Cloud city council has two Somali candidates. Further up I-94, there are a meaningful number of Somalis in Fargo. Grand Forks and Jamestown also have Somali refugees.
DAKTOIDS: ND Treasurer Kelly Schmidt says the Legacy Fund has a balance of $2.4 billion, but is still dwarfed by similar funds in other oil producing states. The Alaskan fund has $51 billion and Wyoming has $6 billion . . . The student loan default rate is ND is among the lowest in the nation. ND’s default rate is 6%, while the rate in Minnesota is 12% and the national rate is 14% . . . Tomorrow, the highly-ranked U. of Montana Griz will play a nameless UND football team in Grand Forks. Two weeks ago, the Bison beat the Griz in Fargo.
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