Our goal is to help communities consider their own personalized response, not determine their response for them. These recommendations are ideas rather than hard and fast recommendations. In an effort to obtain the best, most comprehensive recommendations possible, recommendations were collected from over 20 individuals, including current and former residents, oil service company workers, company owners, and government officials. Their responses are intermingled with recommendations from the Rural Planning Group in the following section.
Know the Industry
Most community leaders in the Uintah Basin understand the industry at the local level; they know the major employers, the service companies, and how these companies are doing generally. However, some lack knowledge of the oil industry’s primary drivers. These leaders should expand their understanding of the industry on which their community is based at regional, national, and global levels. This does not mean they need to become experts in global oil-politics and economics. Rather they need to understand the fundamental drivers of the global market that ultimately shape the industry and their communities.
This study is a first step toward empowering leaders to consider their community’s current position and understand what would have to change globally, nationally, or regionally before their community’s economic situation will change. This knowledge empowers leaders to be proactive when the industry’s trajectory appears to be changing, rather than waiting to respond after a boom or a bust have taken the market. Similarly, this allows leaders to advocate more effectively for the local and regional issues that will help the oil industry succeed, and for causes that can help the basin in other ways.
Having a common understanding of the industry and what affects it regionally helps local governmental leaders to work together on important local causes. Local governments across the basin should be vested in supporting decisions by their neighboring communities that will improve each community's resiliency. A united voice from all basin communities will carry much more weight than an individual county commissioner or mayor on questions of regulation, production on state and federal lands, decisions about Highway 40, etc. This requires recognition that success in one community does not preclude success in another; it brings opportunities for all communities.
Similarly, asking for advice and assistance from others with direct experience is crucial. There are many city officials, elected officials, planners, and managers who have worked in this environment for decades. Obtaining their input will greatly inform community decisions and actions.
DURING THE BUST
Populations and revenue fluctuations make long term planning difficult, but also provide opportunities. Many community leaders recommended using production downturns as opportunities to perform the bulk of the planning work that needs to be completed. These lulls are great times to prepare for the next upswing. Obviously, planning will occur during all periods, and community leaders can never know when the industry will fall flat or grow wildly. Still, prioritizing plans during low production periods benefits communities in multiple ways:
1. It allows city officials to review the last boom period, and determine how well their previous plans shaped and supported the type of growth (residential, commercial, economic diversity, etc.) the community desired. This allows leaders to evaluate what went well and what they would have done differently.
2. During boom times, planning commissions, planners, and managers can get very busy with day-to-day tasks. Generally, in lulls, more time exists to accomplish strategic tasks. This leads to better plans that shape growth rather than trying to respond to growth in real time. Community leaders should consider how they can formalize this process with clear expectations so future leaders can follow a system as they continue building the community.
The Rural Planning Group recommends the above simple model. This graphic illustrates a planning and implementation cycle communities should consider in connection with boom-and-bust cycles. The premise of this suggestion revolves around maximizing the benefit of high- and low-production periods.
Planning is essential during both time periods; however as projects and opportunities arise, most major plans that occur within the community should occur on this schedule. Then boom periods play into community plans rather than growth occurring without public leadership and direction.
During the Boom
Implementing during the boom does not necessarily mean building all capital projects during the boom cycle. Rather, it means that the general plan, municipal code, economic development plan, and master plans are followed as new development occurs. It also means that the city or county should start saving during the boom, and using the plans the community supported to justify saving. This will help the revenue of the community be more consistent, and allow for construction at the best possible times.
Capital Asset Planning
Capital asset planning is difficult to time in a fluctuating market for two primary reasons. First, repairs and capital asset improvements are best done during a lull in production when uses are low and industry / quality- f-life disruption would be limited (e.g. road repair, sewer, water, etc.). Precisely timing these repairs with the market is nearly impossible. Secondly, funding is most readily available during boom cycles, and many citizens do not understand why their community is taxing them for a rainy day (that they might not think is coming).
For these reasons, planning and carrying-out capital improvements and construction often have to occur at the same time. Good planning can reduce the need to do major construction projects during the boom by driving development where the community desires it, and by getting the best time frames for needed repairs and overloaded systems. Saving during upswings for projects can reduce service provision disruption, road delays, and municipal and county financial troubles by increasing expendable capital during busts. As a result, cities can have sufficient funding to pay for projects that require significant bonding or borrowing, rather than barely affording their loan obligations.
Cities and counties should educate community members on the benefits of saving during upswings. Saving funds should be part of a community’s planning and budgeting discussion so community members can understand and comment on the plan to save funds as a municipality. Saving is likely part of their personal finances.
Community leaders should focus their economic development on maintaining local businesses first, followed by developing local entrepreneurs and entrepreneurial opportunities, and finally by attracting new companies. Following this pattern maximizes the effect of economic development efforts, and ensures support for companies who are vested in the community.
KEEPING CURRENT BUSINESSES
ASSISTING LOCAL ENTREPRENEURS
ATTRACTING OUTSIDE COMPANIES
Current businesses have a vested interest in the community and create the largest disruption if they leave. Maintaining current businesses is the foundation of a solid economic base for rural communities.
In context of oil and natural gas prices, maintaining current businesses is also one of the larger difficulties as oil production and service companies lay-off and reduce hours for workers. The resulting reductions in disposable income throughout the community cause food and retail based companies to struggle. In these cases, making the communities a welcoming place will not be enough for many of these businesses when revenue and costs don’t balance.
Increased tourism and ‘buy local’ campaigns can increase sales to local companies which benefits the local governments that rely on their sales tax for maintaining governmental services.
Local entrepreneurs are more likely to be vested in the community, and are therefore less likely to leave when margins tighten. Local entrepreneurs in every field should be supported, but special emphasis should be given to businesses that bring wealth into the community (exports, tourism) rather than spreading wealth around in the basin (retail, local services).
Current efforts in Duchesne and Uintah County high schools, USU Extension, and the assistance programs and events produced by the local chambers of commerce are extensive and valuable. These efforts maintain momentum and develop economic diversity from within. Additional small business grant and loan opportunities should be developed for local entrepreneurs.
Outside businesses are also a priority, yet their commitment to the local area is generally weaker, and significant time can be wasted trying to attract even one business unsuccessfully. For this reason, efforts to attract new industry and businesses should be conducted only after programs to maintain local companies and bolster local entrepreneurs are established.
The Uintah Basin provides unique difficulties for new industry and employers. Many companies do not pay enough to keep their employees from switching to oil field work when oil prices are high. A lack of a freeway, railroad, or major airport makes shipping goods expensive. For these reasons, the most successful outside businesses that have relocated to rural communities in Utah are people who grew-up in a rural community then returned their business to that community to be closer to family. A slightly unorthodox idea would be to establish a directory of former residents and contact this ‘alumni network’ with regularity. Wyoming, Montana, and some midwestern towns have tried a similar approach.
Finding a second industry that could truly counterbalance oil and gas market shifts is unlikely. Rather, the Uintah Basin needs to maintain their current “all of the above” approach to economic development, while recognizing and attempting to mitigate the barriers that exist for new development. The counties should continue promoting maintenance of Highway 40, improving air and rail transportation, and helping communities absorb tourists and industry workers. Accomplishing these tasks will help communities diversify into new industries.
Manufacturing, tourism, and web-based companies were the most commonly recommended options by community members and leaders for economic diversification in the basin.
ManufacturingTourismTech BusinessesEnergyDespite having a well-trained, capable workforce for manufacturing, the Uintah Basin lacks transportation capacity to support more intensive manufacturing projects. Lacking a major freeway, railway, and / or major airport creates obstacles that are difficult to surmount for manufacturing companies who may consider the basin as a location. A major manufacturer relocating to the Uintah Basin is unlikely, yet smaller niche shops that rely less on bulk transportation could make use of the labor force and increase economic stability.The desert and mountains surrounding the communities of the Uintah Basin, alongside unique hieroglyphic and archaeological resources, are opportunities for increased tourism in the Basin. However, challenges for tourism exist in high production periods. Hotel rooms are extremely difficult to book, restaurants and roadways are much busier in the high-production period (which decreases the small- own feel that attracts some tourists), and employees retention is difficult when higher paying jobs are readily available. Tourism brings revenue from outside the Basin, increasing the amount of new cash that can be spent at local stores. Tourism also provides jobs for population segments that generally do not work in the oil and gas fields (generally considered over 60 and under 18). Facilitating tourism by addressing these concerns will benefit communities; however, it is unlikely to counterbalance the revenue loss attendant a slide in oil and gas development on its own.Tech business products often do not require shipping at all, reducing the transportation barrier for location in the Basin. Similarly, Strata Networks, the Basin’s local internet provider, is known for quality service and many residents of the Basin consider their internet the best in Utah. The current workforce is not known for its training in this field, and a new company would have to attract many of its workers. Still, many tech companies have demonstrated interest in moving to locations with lower costs and a quality of life not available in urban communities. Another opportunity exists for bringing money into Basin communities through telecommuters. While not widespread yet, many Americans are opting to work from home and relocating to rural regions that are close to family, have a slower pace, and provide the quality of life they prefer while keeping their job in urban centers. The Uintah Basin’s high quality internet, quality of life, and sense of community make it a possibility for some of these employees.Governor Herbert has an “all of the above approach” for energy development in Utah. Of particular note for Duchesne and Uintah Counties is the pivot in energy production that will occur in Utah in the coming 20 years. Coal fired power has increasing regulations that will eventually lead to closures of many coal fired plants; natural gas and renewables are expected to fill the void. At roughly two-thirds of Utah’s energy production mix, replacing coal will mean a significant number of new power sources will be necessary. Assuming that the air quality issues could be addressed, Uintah and Duchesne County’s large natural gas deposits would be favorable for the development of power plants within the Basin. This would increase the amount of money natural gas generates for Basin communities by providing jobs, increasing governmental revenue, and turning natural gas into money twice (once as it’s extracted and once as it’s turned into electricity). Getting a power plant to locate within the region would take significant amounts of planning, time, and effort on the part of counties, but could be a possibility in the future.
Prioritizing expenditures can be extremely difficult when revenue is strong. During these periods, the temptation is to go after every project that appears to have public support and will benefit the community. Advice from every person interviewed in the Basin came with a word of caution about maxing expenditures and borrowing based on boom-time revenues—most from personal experience. The following principles for solid budgeting surfaced many times in conversations with community members:
1. Base funding decisions on a worst-case scenario. When obtaining loans or grants for projects, consider your communities capacity to fund the project in a worst-case scenario. Will this asset be able to pay for itself? Will operations and maintenance take funds from other projects that are more vital to the community?
2. Be patient. Having a long-term vision for your community will likely involve many city projects that assist the community in reaching its goals. Conducting all projects at the same time is a mistake, even if current funding appears sufficient. When revenues can fluctuate so significantly in such a short period of time, community projects are best broken down into several, smaller pieces that require less long-term commitment and allow the community to hold back in low revenue periods and surge forward in high revenue periods.
This type of budgeting can make the timeframes for reaching goals more difficult to predict than in cities with more consistent revenue streams. Variations in the market can put projects on hold for much longer than desired. For this reason, a solid long-term vision and goals are necessary to ensure community projects and development work towards a focused desire even as the market fluctuates.
3. Empower the community by saving funds. Another way to protect the budget and pay for longterm obligations is to save during the boom. This makes funding capacity more consistent in booms and busts.
4. Prioritize needs first. Decision making about what, when, and how to use funds is fundamental to the provision of governmental services, and is also where city and county officials expose themselves to risk. Effective planning helps community leaders prioritize and focus their finite resources on critical needs first. While every community is different and will have specific needs at specific times, there is a general hierarchy to community assets which center around the physical, fiscal, and economic aspects of a place (although resources take different positions based on a community's characteristics).
To assist with the long-term health of a community, leaders should prioritize essential infrastructure, then basic services, and lastly amenities which can be safely financed into the future. This protects communities from severe fiscal problems in the long-run and enables leaders to prioritize their time in the most meaningful manner first. City and county leaders should consider what criteria are most important to their citizens, as well as what will enable the community to reach its long-term goals. Using these goals, leaders should create a list of criteria by which they will prioritize their projects. This protects political leaders from the threat of arbitrary decision making, and justifies decisions through consistency. Flexibility should remain so that leaders can make decisions based on specific circumstances, but all decisions should be informed by a set of criteria that illustrate a project’s importance to the community.
This graphic illustrates the Rural Planning Group’s approach to the provision of governmental services. Infrastructure and basic services that the community can control take first priority. Amenities, policies, etc. that affect community life are important, yet a lack of control over outcomes should make these lower priority. Using this prioritization pattern will help ensure that public infrastructure is closer to needs, and can help keep leaders from wasting time putting out fires.
Know the Industry
Capital Asset Planning