Dakota Beacon

From the January 25, 2013 Jamestown Sun:

BISMARCK — Jamestown Mayor Katie Andersen testified Thursday against a bill that would provide $9.97 million in funding for Stutsman Rural Water District’s expansion.

House Bill 1269 would provide about $10 million in state grant money for its expansion to serve much of western Stutsman County. The bill was heard by the House Appropriations Committee at the North Dakota Capitol.

Andersen said she opposed the bill because it may affect the territorial dispute between the city of Jamestown and Stutsman Rural Water over service to the area near Jamestown Regional Medical Center.

“As mayor I would like to support this bill,” Andersen said at the hearing. “Unfortunately, Stutsman Rural Water District has chosen not to honor a water purchase contract, initiated by Stutsman Rural Water District, with the city of Jamestown, and they are using their federal indebtedness and the protection of United States Code Chapter 7, section 1926(b), as legal reason to violate the agreement that simply allows Stutsman Rural Water District to purchase water from the city of Jamestown at the same price Jamestown sells water to Jamestown residents and increases the water supply capacities for the district to allow them to serve more rural residents.”

Stutsman Rural Water’s expansion project includes extending its lines to Woodworth, Streeter and rural areas in between. A total of about 750 families would receive water. House Bill 1269 includes an emergency clause that would make the funding available immediately after the governor’s signature, allowing bid letting this spring with construction possible as soon as the ground thaws.

“There was money available at the end of last calendar year so we wanted to move this up so they could be bid this year,” said bill sponsor Rep. Jon Nelson, R-Rugby. “These projects are ready to go.”

The federal law at issue is section 1926 (b), Andersen said. This law only is in effect if the Rural Water District owes a debt to the federal government.

The $9.97 million state grant pays part of an estimated $14 million expansion. The other funds would be borrowed from USDA Rural Development.

“To clarify, the federal debt of only $814,000 can be refinanced, therefore removing the protection of federal law 1926(b),” Andersen said. “The effect of HB 1269, the additional federal debt of over $5 million for Stutsman Rural Water District, is not easily refinanced. Therefore, 1926(b) protection is secured for 40 years. This negatively impacts the legal negotiation position of the city of Jamestown and further complicates the ability of Jamestown to accommodate growth.”

Stutsman Rural Water District was represented by a number of staff, board members and clientele at the meeting. They did not address the committee but Eric Volk, executive director for the North Dakota Association of Rural Water Districts, spoke on their behalf.

“We are extremely favorable for this to move forward,” Volk said. “Sometimes we’re caught in a dilemma when projects are funded in the summer and that delays the project to the next year.”

Volk asked the committee to move the bill along quickly to facilitate the governor’s signature as soon as possible.

“If we do bids in March we can move ground as soon as the weather allows,” he said.

Andersen said the issue was not unique to Jamestown with several communities around North Dakota facing territorial disputes between cities and local rural water districts.

“North Dakota needs a state law to make funding contingent on an equitable territory transfer,” she said. “If that’s a part of this bill we would support it.”