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Seeing the changes

By Staff | Oct 13, 2012

We’ve all heard the rumors-a “man camp” to house oilfield workers will soon be built in Pierce County. Houses are selling for twice their appraised value. Teenagers are making $18.00 an hour at fast food restaurants in the oil patch. Farmland in the county is going for $1500 an acre, or is it $3000?, no wait-it’s $10,000 an acre!

While the rumors are swirling like leaves on a windy fall day, most of the facts about the recent uptick in economic activity in Pierce County are a little more down to earth. But one thing everyone seems to agree on is that because of drilling for oil out west, the Minot flood, and high farm prices, area communities have seen economic changes in the past year or so, and are scrambling to cope with the new Pierce County dynamic. Some see the changes as positive, while others acknowledge the negative.

A few of the areas that have seen the impact are in the shortage of workers, elevated housing costs and increased traffic.

Shortage of workers

Bonnie Berginski, owner of Rockin’ Relics restaurant, has been struggling for some time to keep her business fully staffed, and has had to cut back operating hours. “I don’t think the people who would be working for me are working in the oilfield, but maybe their spouses are,” she said. “And maybe the wife can’t work if they have small children and her husband is never home.” Berginski becomes frustrated with what seems to be an economic contradiction. “There used to be more businesses (in Rugby) and they didn’t seem to have a shortage of workers.” She wonders, why now? But she has no answers. She does say, “If you find somebody who is a good applicant, you jump on it.”

Hardware Hank owner, Terry Wentz, also can’t find enough help. “That’s been a struggle. My employees are putting in overtime. If you hire new people they last three or four days and then they’re gone. I use semi-retired guys but they don’t want to work that many hours,” he said, and added, “If you have a good candidate you’d better hire him on the spot or he walks down the street and gets a job at the next business.”

Lack of housing

Another obvious shortage is in the area of housing. Bob Houim, a realtor with Brokers 12, has only three or four homes for sale. “That’s the lowest it’s been in 12 years,” he said. Partly because of oil activity, but also because of good commodity prices and low interest rates, demand and prices are sky high. “I’ve seen some houses actually double in price in the last year,” he said. “We’ve sold a few to oilfield workers. We had a huge number of buyers last spring, but no houses.”

Aimee Lehman of Real Estate 7 agrees that the market has exploded in the past year. “We have two houses (listed),” she said. “They sell right away. It doesn’t seem to matter the price of the home, either. Some (buyers) are investors looking for a bargain to rent out. They think oil is coming.” But, she adds, it isn’t just the impact of oil. “It’s the normal cycle. People move, grandma dies and the family puts her house up for sale. I don’t think we’ve seen a ton of oil yet, but it’s coming, and people are buying in anticipation.” Both she and Houim agree it’s a seller’s market.

Rents have also gone up because of the shortage of available units. “I don’t know of any places for rent,” Houim said. Rents in areas west of Pierce County are very high and people are looking further east, he believes. Houim knows of several three-bedroom, two-bath houses in Rugby renting for $875 per month, an amount unthinkable only a year ago. “If this continues and they start drilling up north you will see the prices really go up,” Houim added.

He sees both good and bad in the housing situation. Having every house in town occupied might be a good thing, however, “Rugby could have had a considerably larger population right now based on the inquiries I’ve had, but there’s no place to put them.” And because of the Souris River flood and the boom in oil some people can no longer afford to live in the area and have been forced to move out of town and even out of state.

Even owners of storage units, which have been popping up around Rugby like dandelions in May, are not able to keep up with demand. Rugby Number 1 Storage owner Terry Wentz added another large unit last spring and it is already full, making his 257 spaces completely leased. A large number were rented following the Souris River flood last year because, as was the situation with houses and apartments, there was nothing available in Minot. Wentz is going to put up another unit because of continued demand.

Traffic

Over at the Rugby Motor Vehicle Branch Office, manager Sue Steinke is also in the midst of a boom. “We definitely have seen an increase in people bringing in (out-of-state) plates to be changed.” She has also seen in influx of people from west of the Rugby trade area who don’t want to stand in line for one-and-one-half to two hours in the Minot Motor Vehicle office. “All the places out west have waiting lines,” she said. “It just takes a lot longer in those towns.”

Al Gault, who owns A&C Tire and Truck Repair, and also operates a wrecker service, has observed an increase in truck traffic and the resulting breakdowns. “We get them from all over the world,” he said, naming Bosnia, Serbia, England, Cuba, Mexico, Poland and Germany as some of the native countries of the drivers. Not all of them are trucking equipment to the oilfield, he said, but a sizeable percentage are. He’s also towed in and repaired motorhomes of people heading to work in western North Dakota. “Lots of them,” he said succinctly.

Law and order

Rugby Chief of Police John Rose has seen an small increase in crime in the past 12 to 18 months. “We’re seeing the same kind of stuff, domestic assaults, alcohol-related stuff,” he said, “but it seems to be population driven. As more people move in the number of incidents will increase. We haven’t been smacked head-on with it yet, but if the population increases it will become worse. And we’re short on officers as it is.” He has also seen more traffic, especially trucks, on Highways 2 and 3.

The District Court of Judge John McClintock is also busy because of oil and flood related issues. “Definitely,” said McClintock. “In fact our latest report out of McHenry County was a 30 percent increase (in court cases).” Pierce County’s increase is lower than that, but it is up, he said. “Alcohol is a problem,” he added. “Young people work one or two weeks, come back for one week, have a lot of money and sit in the bars for that week. They have time on their hands and money in their pockets.” Many of the people who come in front of the judge are new to the area and are doing Minot flood recovery work or have oilfield jobs.

Businesses upbeat

But not everyone is seeing the negative side of the recent impacts. B and M Laundry has been washing rig workers’ clothing for a couple of years. “They are filthy, filthy dirty,” says Bea Welk, who owns the business with her husband, Marlon. “But I don’t mind doing them. The guys are super nice and they are not fussy.” Most of her new customers live within a 40-mile radius of Rugby, but some come from greater distances. “They come here because Williston and Minot laundries were charging exorbitant amounts,” Bea said. “We charge $80 for the same (amount of clothing) as others charge $400.”

In the Wolford area the economy is also doing well according to Jim Wolf, manager of Farmers Union Oil. But since Wolford is mostly an agricultural community, the upbeat attitude is because of high grain prices. “I’m seeing more newer equipment in the area,” Wolf said. “Land is selling high. If farmers do good, we do good. Of course, we don’t know what’s down the road with this dry weather,” he added. There aren’t as many vacant farmsteads in the area as in past years, but, Wolf says, since Wolford is a little further east, that is not oil related. “It’s mostly people who work in Rugby or Rolette,” he said. In the past out-of-state hunters bought up the vacant houses in Wolford and that boosts the economy a couple of months of the year. “If they need something, gloves, for instance, they buy them here,” Wolf said, “and they eat at the bar.” He has heard of land in the Wolford area selling for $3000 per acre, but, he said, it is east of town, close to the Towner County line.

Chuck Christenson, who owns Christenson Electric in Rugby, says he’s been busy lately, but most of his jobs are also ag related. He’s wired grain bin fans and take-out augers, storage buildings and heated shops on farms. He has converted some residences in Rugby to electric heat and is in the process of wiring a new house in town. But it’s farmers, not drilling companies or the Minot flood cleanup, who are keeping him working. “I think we’re a little bit too far east for too much oil activity yet,” he said.

Rugby newcomer, flooring installer Charles Hovey, has been here since last fall. He moved from Lansing, Mich., because of a lack of work there. Although he returned to Michigan for a time late last winter to do a few jobs, “It’s just terrible in that part of the country,” he said. In North Dakota his business, Kustom Flooring, has had plenty of work. “The last couple of weeks it has slowed down,” he said, “but I was extremely busy up to that point.” He works in the Rugby area, but also has jobs in Minot and will soon have some work in Williston. He lives in Rugby, he said, because there are no affordable apartments in Minot.

In Balta mayor Mike Jundt says the city has no empty houses and adds, “Everything liveable is being bought up.” Some new residents are working in the oil patch, but a lot of houses were sold to out-of-state hunters years ago. Kenny Heilman, of rural Balta, knows of a farmstead which was bought for $30,000 a few years back, was improved by the new owner, and recently sold for $230,000. John Scheet owns a couple of vacant rental units in Balta but rents only to selected tenants. “I’m very fussy,” he said, which is why he still has empty apartments. “I don’t take pets, don’t take smokers.” One of his units was recently rented to a local farmer who tore down his old house and is building a new one on his farm. But that construction may take more time than in years past because carpenters, plumbers and electricians seem to be in short supply.

A rumor making the rounds early last spring was that a Family Dollar store was to be built east of The Hub complex on Highway 2. “Negotiations were going on one year ago,” said Dennis Fred, owner of The Hub. They have since broken off and the store will not be built as far as Fred knows. He said he doesn’t know why the company backed out, but they might have had trouble negotiating permits with the city or realized that staffing would be a problem. “But they could come back to the table as things grow and expand this direction,” he added.

Possible solutions

To help alleviate the housing shortage, the City of Rugby is in the process of developing a new housing area on the east edge of town. According to city auditor, Dawn Hauck, the engineers are putting together all the information for bids, and the city is working with a bonding company on special assessments, which will be levied only on residents who will build there. The time frame, however, is unclear. The city may be able to start moving dirt this fall, and will put in the infrastructure. Building the actual houses could start in about a year, Hauck said, or possibly earlier. “It all depends on the city’s ability to get bonding.” And she added, “I think Pierce County gets overlooked sometimes. We’ve been so quiet for so long. When you try to get state funding for projects, it’s tough.”

Rugby City Council members James Hoffert and Arland Geiszler attended a North Dakota League of Cities meeting in Grand Forks last week and got an earful about communities in the western part of the state. Cities there have employees leaving to drive trucks in the oilfield. City fathers wrestle with ways to keep good employees, and some attendees advised cities should do whatever it takes to retain them. So far, Hoffert and Geiszler said, Rugby hasn’t lost any employees to the west.

One strategy for keeping employees is to raise their wages. This has been working for Northern Equipment according to co-owner, Gerry Jacobson. “We’ve been proactively bumping up wages for the last three years,” he said. The kind of employee Jacobson’s business hires is just the kind the Bakken oilfield is also looking for. “The oilfield attracts a specific type,” he said. “It’s a young man’s game and it has raised the wage scale for tradesmen.” Heating and air conditioning technicians and mechanics are in huge demand. “Now that is the hot sector.”

It appears that almost everyone in the county is affected by the bulge in activity in one way or another, but no one has a handle on how long the boom will last or just how crazy things could become. For now people are just coping day to day, wishing there were more hours in a day, more people to hire, more places to live and a little more downtime. Some are also seeing the upside. “We are sitting in a good position with the oil out west and the potential for growth,” says Terry Wentz. For most, the pace is still manageable, and the rumors and facts are separated by a wide enough gap that Pierce County remains a good place to live.

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