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Enbridge to pay $275,000 to Berthold for infrastructure needs

After two and a half weeks of negotiations, the city of Berthold and Enbridge Pipelines LLC have reached an agreement in their differences over the zoning status of an 80-acre tract of land Enbridge wants to purchase and use in a series of expansion projects planned for the region.

10/06/10 (Wed)


City of Berthold and Enbridge settle differences
By Caroline Downs
After two and a half weeks of negotiations, the city of Berthold and Enbridge Pipelines LLC have reached an agreement in their differences over the zoning status of an 80-acre tract of land Enbridge wants to purchase and use in a series of expansion projects planned for the region.
Berthold city attorney Bryan Van Grinsven reviewed the points of the new proposal during the city council’s regular meeting on Monday night, before council members took action. “We want to emphasize that both parties are facing uncertainty and risk,” he said, adding the new agreement reflected an attempt to compromise the disputed claims.
In August, following the recommendation of its Planning/Zoning Committee, the Berthold city council denied Enbridge’s request to rezone the property in question from agricultural to industrial use. Earlier this year, Enbridge announced plans to use the land, adjacent to the east side of the current station Enbridge operates at Berthold, to construct an eight-station truck unloading facility to transfer crude oil extracted from the Bakken formation through the Enbridge pipeline system to markets in the midwestern and eastern U.S.
Additional plans at the site call for two more 80,000 barrel oil storage tanks to be constructed and pipeline upgrades in order to boost takeaway capacity at the Berthold Station by 145,000 barrels per day, by 2013.
When the Berthold city council rejected the rezoning request, Enbridge took other steps to resolve the situation. Van Grinsven pointed out that an appeal on the city’s denial had been filed in district court and a motion was filed with the North Dakota Public Service Commission to supersede Berthold’s action, with a hearing scheduled for November 5th in Berthold. Further litigation had also been discussed.
However, representatives from the two parties continued talking to each other about steps necessary to settle the dispute favorably for both sides. Van Grinsven listed the terms of the new agreement for the council members and public Monday night.
Under the new proposal, Enbridge would pay $275,000 to the city of Berthold for infrastructure and municipal needs. Enbridge would also request annexation of its current facility and the 80 acres it plans to purchase and develop as a truck unloading facility, but it would not request city services at the site, such as sewer and water. If those services are needed at the site in the future, Enbridge would pay all the costs involved.
Enbridge will plant tree rows along the east and south boundaries of the truck unloading facility, in cooperation with the NDSU Extension Service in Ward County, with at least one row being evergreen trees at least six to seven feet in height. The company agreed not to extend its facilities east and south beyond those tree rows.
One of the city’s major concerns related to traffic safety on U.S. Highway 2 at the entrance to the Enbridge facility. The company will coordinate efforts with the North Dakota Department of Transportation, at no cost to the city, to construct a separate right turning lane at the facility for eastbound traffic and a separate left turning/acceleration lane in the same location for westbound traffic, and to install signs advising drivers of lower speed limits through that stretch of highway. The NDDOT already proposed the turning lanes and speed limit reduction for the project.
Enbridge will take up the city’s request with the NDDOT for the left turning lane for westbound traffic to be constructed in the median between the roadways, if feasible. Because trucks entering the Enbridge facility will be driving on 296th Street, a township road and public roadway, Enbridge will use their best efforts to prevent tankers and oversized trucks from heading south on that road to exit the facility and interfere with local traffic.
Finally, Enbridge will coordinate its Berthold operations with local fire and emergency departments and will reimburse the city of Berthold for legal fees up to $15,000.
For its part, the city of Berthold will amend the zoning map, with the 80-acre tract in question zoned for industrial use. After the Enbridge site is annexed, the city will designate a tract of land west of the Berthold Station for industrial use.
The city will also determine a fair and equitable rate for taxing the Berthold Station and truck unloading facility, in light of the fact the Enbridge site is not receiving any city services.
“This agreement is not admission that either party is correct,” Van Grinsven said as he finished. “Both parties get to maintain they were right.”
The use of 296th Street was discussed further in the city council meeting, as Berthold fire chief Richard Blahut asked if Enbridge could designate a specific route for trucks to use in their lease agreements with the companies using the unloading facilities.
Because the road is public, Van Grinsven noted such conditions in the lease agreements may not be enforceable.
However, Mark Cruwin, senior legal counsel for Enbridge, noted the company had plans to address the issue. “Enbridge will only improve the road to the boundary of where their facilities are,” he said, “and we’ll put up signage to do what we can to direct traffic back to Highway 2.”
Blahut also asked about the possibility of public input or hearings with the NDDOT regarding the design of the turning/acceleration lanes planned for U.S. 2.
Van Grinsven recommended members of the public should express any concerns to the Berthold city council. “They can take [those comments] into consideration and repeat those concerns to the DOT,” he said.
Council member Robert Inman moved to accept the terms of the agreement, with a second from Mark Birdsall and unanimous approval from the council on a roll call vote. “This is in our best interests,” Berthold mayor Alan Lee told Cruwin, “and will allow you guys to get on with your work.”
Cruwin said the company was pleased that productive discussions could continue, despite differing views. “We’ve been able to come up with solutions that work for everybody involved,” he said, “with safety remaining the priority concern collectively.”
He continued, “The company places a lot of value on its relationships with the communities we are in. This is one of the locations where [the facilities] will see a significant upgrade. It’s good for the state, it’s good for the community, and it’s good for Enbridge.”
He noted that Enbridge planned to inform the PSC, which already approved the project contingent on the Berthold city council’s zoning decision, about the new agreement. “This way, we comply with our certificate requirements and can proceed with the project,” he said.
Some upgrades to equipment have been completed at the present Berthold Station, with construction suspended on the new truck unloading facilities until the zoning question could be resolved.
Cruwin also said the company would coordinate safety measures with the local fire and emergency response departments as the site is developed and expanded. “We work closely with local emergency responders,” he said. “We do a lot of educating and training. [Those crews] are our eyes right here in the area.”
Lee was pleased the city and Enbridge could work out an agreement without getting the courts involved. “Litigation wasn’t practical for a city the size of Berthold,” he said. “It’s better to use the city’s resources for things good for the city.”
Both the cash payment and the attention to the safety concerns on U.S. 2 will benefit Berthold residents, according to Lee. He laughed as he admitted the city council had not yet determined exactly how the money would be spent.
In early discussions, the council has agreed a portion of the money will be set aside and used for a project to benefit the entire community, with acknowledgement of Enbridge’s contribution. “The rest, we’d like to try and put into something that would be an improvement to the city and bring revenue back, some type of long-term return,” Lee said. “This will give us the ability to do some things we’ve wanted to do, without taxing our residents.”
More important to Lee was Enbridge’s commitment to address safety issues on U.S. 2. “That will be a major accomplishment that will benefit not only the Berthold residents, but everyone who travels that road,” he said. “That will be a big improvement from a safety factor.”
He noted that Enbridge secured the zoning status they wanted to proceed with their project. “They also have the ability to continue their development to the west, with the annexation,” he said.
Kesley Myhre, community relations advisor for Enbridge, said the company was excited about resolving the issues and getting their crews back to work at the site.
“We’ve been moving forward with some surveying work,” she said. “Now, we’re hoping to get construction started as soon as possible, maybe even later this week. We’re so pleased we were able to come up with a win-win solution, and we’re looking forward to working with Berthold.”
Lee said he was encouraged to think the two parties could work through their differences when Enbridge approached the city to negotiate. “It was the best course of action for the city,” he said. “We gained resources and didn’t have to expend them. At the end of the day, it’s always best to get to a resolution without going to court.”