'Prairie Dog' Infrastructure Funds on Pace for 2021 Construction Season for Counties

There are many watchful eyes on the progress of the buckets that need to fill to distribute $250 million in infrastructure funding to counties, townships, cities and airports. The timing of when these funds will be available to local governments has been the focus of many commission planning and budget discussions. And there’s great news; those buckets are filling up ahead of schedule by about 4%. This means local governments will more than likely see funds sooner. Large cities may receive funds by the end of 2020. But a large $400 million Strategic Investment and Infrastructure will need to fill next before dollars trickle into the bucket for counties, townships and other cities.

“Tracking ahead of forecast is always a good thing. But at this point, it’s not a great enough lead for us to change our expectations. We should still anticipate the funds for counties and townships to be available in the spring or early summer of 2021,” said NDACo Executive Director Terry Traynor.

The 2019 Legislature approved House Bill 1066, often referred to as “Operation Prairie Dog.” This reallocates up to $250 million of North Dakota’s oil and gas extraction tax to non-oil producing counties, townships and municipalities. It is intended to be a permanent formula for continued distributions for local government infrastructure projects. The municipal and county/township buckets will receive funds after state budgetary buckets are filled to statutory limits. Because the funds are based on oil and gas revenues, revenue will vary from biennium to biennium. If there is not enough revenue to fill the bucket, the funds will be distributed on a pro-rated basis at the end of a biennium.

Oil production and the price of oil factor into how fast or slow the buckets fill. The State Treasurers Office has placed a chart on their website which will be updated monthly to show the progress of revenues filling up the various buckets. The new formula went into effect August 1st and as the chart illustrates in the first five months, two buckets are full and funds are now filling up the third bucket.

Here is a quick summary of the Prairie Dog funding:

$250 million allocated to infrastructure funds

• $20 million for airports

• $115 million to cities

• $115 million to non-oil producing Counties and Townships
• $100,050,000 will go to the non-oil producing counties (based on UGPTI needs study)

• $14,950,000 will be divided equally to townships in non-oil producing counties
• $9,300 to each township
• Those funds will be distributed to the county for allocation to organized townships 
• Current forecasts show distribution of funding to counties will happen the second quarter of 2021
• Funding intended to be a continuing appropriation
• Eligible projects for counties: Prairie Dog funds are to specifically be used for road and bridge infrastructure (paved or unpaved, new, repair, maintenance or replacement)
• Counties able to “carry over” prairie dog funds from year to year to use for a large project 
• Counties to report by 11/30/22 to State Treasurer on use of Prairie Dog funds 
• There will be a method to indicate if carrying over funds 
• No reporting requirement for Townships
• The nine large oil-producing counties will not receive funds through the County and Township Infrastructure Fund; however, they will continue to receive a direct monthly allocation through the gross production tax formula 
• Large cities could possibly receive funds by the end of 2020 
• Graph on State Treasurer’s website tracks progress of Prairie Dog funds https://www.treasurer.nd.gov/operation-prairie-doghouse-bill-1066