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Roosevelt County / Fort Peck Indian Reservation Corridor, Montana

November, 2003 - produced by ICF Consulting under the direction of AECOM Consulting

The map shows the US Highway 2 location along the southern boundary of Roosevelt County, Montana, spanning the entire East-West length of the county.Project Type: Better access to employment or production or distribution centers within a generally rural area.

Project Objectives: Serve specific existing employers or centers and encourage new compatible employers or centers.

Outcomes Metric: Jobs maintained/generated, Plant investment, Tax base effects

Economic Environment: Non-metropolitan, remote and isolated

Economic History: High unemployment and poverty rates, shrinking population

Distinguishing Features: Fort Peck Reservation, situated in the rural northeastern region of Montana is home to the Assiniboine and Sioux tribes.

The map shows the US Highway 2 location along the southern boundary of Roosevelt County, Montana, spanning the entire East-West length of the county.

I. Existing Conditions

Fort Peck Reservation, situated in northeastern Montana, is home to two separate Indian nations, the Sioux and the Assiniboine. The Reservation is isolated from Montana's centers of population, manufacturing and marketing and lies within a region in which the economic base is almost entirely agricultural.

The most densely populated region of the Reservation is concentrated along US 2, the major east-west transportation corridor for northeastern Montana in the southern part of its territory.

Economic development in the Fort Peck Reservation area hinges on the feasibility of specific initiatives that are either underway or in the planning stages that would support the region's agricultural economic base and help diversify the economy by focusing on alternate sectors such as manufacturing and tourism. Improving specific elements of the transportation infrastructure in the area could support these initiatives by enhancing access and improving the region's economic competitiveness.

Roosevelt and Valley Counties are predominantly rural areas, with population densities of 4.5 and 1.5 persons per square mile, respectively. This compares to a population density of 6.2 persons per square mile for the state as a whole. Of the 10,321 residents on the Fort Peck Reservation, nearly three-quarters of the population live in rural areas. Despite the large number of rural dwellers, the farm population totals just 11 percent of the total. As shown in Exhibit 1, sixty two percent of the total Reservation population is of American Indian ancestry, [1] with the white population comprising the other major group.

Exhibit 1: Selected Demographic Characteristics of Fort Peck Reservation and Off Reservation Trust Land

Total Population

10,321

100%

Sex

Male

5,121

50%

 

Female

5,200

50%

Age

Under 18

3,995

39%

 

18-54

4,553

44%

 

55-74

1,285

12%

 

75+

488

5%

Race

White

3,622

35%

 

American Indian, Eskimo or Aleut

6,391

62%

Source: US Census Bureau, 2000

The Fort Peck Reservation exhibits socio-economic characteristics that are similar to many other Indian reservations. The median household income on the Reservation is $23,095, lower than the Montana median household income of $33,024 (2000 Census). 30.1 percent of families on Fort Peck Reservation live below the poverty level, compared to 10.5 percent for the state as a whole. 48 percent of families with children under the age of 5 live in poverty, a rate that is much higher than the Montana proportion of 21.6 percent. Although the official unemployment rate in Fort Peck Reservation is 10.9 percent (2000 Census), the unofficial rate is much higher, with some estimates placing it above 60 percent. The largest sources of employment for the Reservation lie in the agriculture, forestry, and fisheries industries and in retail trade.

In terms of housing, 46 percent of housing units are occupied by whites and 52 percent by the Indian population. The median house value in 2000 was $48,400, with the majority of housing being single units, detached. 8 percent of households lacked telephone access, and 9 percent did not own a vehicle.

In terms of educational attainment, 80.5 percent of the population on the Reservation had attained at least a high school diploma. Only 14.6 percent, however, had received at least a bachelor's degree. English is the major language on the Reservation. 6.8 percent of people 5-years-old and over speak a language other than English at home, but only 1.2 percent do not speak English "very well."

Cattle ranching and farming are important sectors in the economy of the Fort Peck Reservation; 68 and 31 percent of the tribal lands, respectively, is devoted to agriculture and grazing. Important crops grown in the area include cereals and feed grains, hay silage, and grasses. "Dryland" (not irrigated) farming, mostly in spring wheat, accounts for about 75 percent of all harvested acreage. Eight grain elevators are located on the Reservation. [2] Currently, the tribe is attempting to update its irrigation system, which was constructed in 1908. Known as the North of Sprole project, this initiative would substantially expand the region's agricultural base by supporting the cultivation of high value crops.

Since the 1950s, the Fort Peck Tribes have also undertaken extensive industrial and mineral development. Fort Peck was the first of the United States Tribes to develop jointly and wholly owned oil wells. As a result, the tribally owned Assinboine and Sioux Tribal Industries is the largest private employer in Roosevelt County.

There are a number of manufacturing enterprises located on the Reservation, which are owned and operated by the tribe. A & S Industries, a manufacturer whose capabilities include metal fabrication, has recently expanded operations and anticipates substantial growth in the next five years as it completes business restructuring. In addition, West Electronics, also a tribally owned firm that is located in the same industrial park on the Reservation as A & S, specializes in providing electronic manufacturing services to government and private sector clients.

Problems with water quality and supply are common throughout the Reservation and present a major obstacle to increasing the quality of life and promoting economic development, since so much of the Reservation is dependent upon agriculture. The lack of an adequate water supply prevents grazing lands from being fully utilized and reduces the livestock production on the Reservation. The lack of stability in production then discourages related industrial development such as cattle feeding, packing plants, and other value added industries. The Tribe is initiating a Municipal and Industrial Rural Drinking Water program, which will be responsible for an irrigation system along the Missouri River. [3]

II. Highway Project

The analysis focused on determining the types of transportation infrastructure improvements that would be needed to support and capture the full range of economic benefits associated with other economic development interests made in the area. Transportation needs were identified as those improvements that were necessary to support initiatives but where such improvements were not programmed by the state, county or Bureau of Indian Affairs. Exhibit 2 shows the major roads located in the study area.

Exhibit 2: US 2 and Other County Roads in Roosevelt, Montana

Exhibit 2 shows the US Highway 2 location along the southern boundary of Roosevelt County, Montana, spanning the entire East-West length of the county.

Exhibit 2 shows the US Highway 2 location along the southern boundary of Roosevelt County, Montana, spanning the entire East-West length of the county.

Source: AECOM Consult Inc.

US 2 is the major east-west transportation corridor for northeastern Montana. It enters Montana from Williams County, North Dakota (ND) to the east. After a small section in non-Reservation Roosevelt County, the highway follows the southern edge of the Fort Peck Reservation and the northern borders of Richland and McCone Counties, parallel to the Missouri River, for approximately 85 miles. US 2 then turns northwest to Glasgow.

Montana Highway 16, running north-south through Sidney, intersects with US 2 at Culbertson, (Roosevelt County), about 4 miles east of the Reservation's eastern border. Montana Highway 16 then continues north to Canada.

Another north-south transportation corridor in the Fort Peck Reservation is Montana Highway 13. It bisects the Reservation, and continues on to Canada. It provides the best north-south access to Wolf Point, which lies along US 2 just west of Montana Highway 13.

Finally, Montana Highway 24, another north-south corridor, runs from Glasgow to Canada, and intersects with the northwestern tip of the Reservation. Other than US 2, in the south of the Fort Peck Reservation, there is little east-west access to Montana Highway 24 along this section. The nearest intercity bus service to the Reservation is located in Glendive, approximately 100 miles southeast of Wolf Point. Commercial air service is available at Wolf Point within the corridor and Glasgow, MT and Sidney, MT just outside the corridor.

III. Objectives of the Project

Relatively isolated from Montana's centers of population and economic activity, the Reservation suffers from high unemployment and poverty rates, and limited investment. However, there is opportunity for economic development through a number of initiatives that would diversify and enhance the region's agricultural base through irrigation, would develop energy resources, strengthen an emerging manufacturing sector and attract tourism.

The current transportation infrastructure does not fully support this development strategy, with two main obstacles to economic growth in the region. [4] First, inadequate local access to the main thoroughfare, US 2, means that the success of some of these initiatives is dependent on transportation improvements. Overcoming this obstacle is critical to fostering economic growth. Second, firms producing goods on the Reservation face great distances in receiving and sending shipments, which impacts their ability to compete. Overcoming this second obstacle is much more difficult than tackling the first. A substantial number of people in the corridor advocate improving US 2 to a continuous 4 lane highway as a response to this obstacle; however, such an improvement would only marginally affect shipping costs.

The study proceeded on the notion that economic development in the Fort Peck Reservation region would be partially determined by implementation of specific initiatives and that to capture the full range of benefits from these initiatives, transportation improvements that target specific elements of the local and regional highway network, i.e. US 2, Secondary Highways and local Bureau of Indian Affairs (BIA) and county feeder roads would need to be identified.

For example, in order to capture the full benefits associated with agricultural, oil drilling and other economic opportunities within the Fort Peck Reservation, the area needs access to affordable electricity. The Fort Peck Tribe has invested considerable resources into studying the viability of wind power. The tribe began investigating this potential opportunity in 1994 after it received a $250,000 grant from the U.S. Department of Energy. Two sites with average annual wind speeds of about 19 mph were identified, and the tribe completed a feasibility study for a 200-megawatt wind farm. Such a farm would create enough electricity for about 10,000 homes, as well as good-paying jobs for between 30 to 40 "windsmiths." Using the latest technology, the turbines could sell electricity for about 4 cents per kilowatt-hour and be profitable. As part of a deal with potential investors, an outside group would own the majority state in the enterprise, to use federal tax incentives, but the tribe would have an ownership stake and would earn royalties off of each turbine.

Private commercial businesses include a convenience store, gas stations, restaurants, a laundromat, an auto repair shop, a shop that has both a video arcade and fast food, vendors/makers of arts and handcrafts, and some other service and commercial vendors. The Assiniboine and Sioux Tribes, Fort Peck Community College, BIA, and the Indian Health Service provide the majority of employment within the Reservation itself. [5]

IV. Coordination of Project with other Economic Development Strategies, Plans and Opportunities

A key aspect of this study was the formation and ongoing involvement of a stakeholder advisory committee. The committee consisted of representatives from the following organizations:

Three meetings were held at Fort Peck Reservation, two of which focused on convening the stakeholder advisory group to give feedback on the analytical approach, the initiatives selected and the findings of the study. The road projects selected for study were those that improved access to other development initiatives sponsored by the groups identified above. Thus, the coordination between the transportation investment and other local strategies was especially close.

V. Methodology

In order to examine the linkages between economic development and highway improvements, the study pursued an approach that is grounded in, first, understanding the region's economic development strategy and, second, determining the type and cost of transportation investments that would support this strategy. The overall approach was to:

  1. Identify economic development initiatives that are:
    • Reliant on highway infrastructure improvements,
    • In the latter stages of development, and
    • Potential drivers of the local economy.
  2. Assess transportation needs and investments that would be necessary to support these initiatives
  3. Estimate the economic benefits that are supported by the transportation investments.

In order to evaluate the potential economic impacts of the identified transportation investments along the US 2/Fort Peck Reservation Corridor, the analysis focused on the following two sources of economic benefits:

Drawing on two approaches, Incremental Benefit and Input-Output analysis, project benefits were measured as the total potential effects of the transportation improvements. In applying the concept of Incremental Benefit Estimation, the study compared the economic benefits with and without highway investments, thereby providing an assessment of benefit reliance on transportation improvements and determining those benefits that can only occur as a result of the highway investments. Once an assessment of benefit reliance on transportation improvements had been made, Input-Output analysis was used to estimate regional economic benefits (direct, indirect and induced) in terms of jobs, output (revenue/sales volume), and value added income (essentially wage income plus corporate profit). Benefits presented stem from both the economic initiative and the required transportation investment to support the initiative.

The full approach is illustrated in Exhibit 3 and described in detail thereafter.

Exhibit 3: Study Approach

Exhibit 3 shows the Peck Reservation five-step study approach composed of 1) Assessing the Region's Economic Development Potential, 2) Identifying Key Economic Sectors, 3) Assessing the Transportation Needs and Investments to Support Key Sectors, 4) Evaluating the Economic Impacts of Those Transportation Investments, and 5) Selection of Investments for Plans and Programs

Exhibit 5 shows the Peck Reservation five-step study approach composed of 1) Assessing the Region's Economic Development Potential, 2) Identifying Key Economic Sectors, 3) Assessing the Transportation Needs and Investments to Support Key Sectors, 4) Evaluating the Economic Impacts of Those Transportation Investments, and 5) Selection of Investments for Plans and Programs.

Source: ICF Consulting

Step 1: Assess Economic Development Strategy for the Region

The study team directed initial research efforts towards reviewing the socio-economic and transportation conditions in the region. This research revealed the importance of the agricultural sector to the region, as well as the energy, manufacturing and tourism sectors. Interviews with local stakeholders allowed a closer examination of the Reservation's economic development strategy. This strategy is characterized by specific initiatives that aim to grow the Reservation's agricultural economic base, as well as to diversify the economy through supporting alternate sectors.

Initiatives that target the agricultural sector include the introduction of high value irrigated crops and the potential development of a dairy farm. The Reservation also seeks to broaden its economic base by supporting projects such as natural gas and oil production, wind power, infrastructure development (improving water quality and distribution and expanding Poplar airport), manufacturing and tourism.

Step 2: Identify Economic Development Initiatives that will Serve as Engines for Growth

The methodology noted previously in section V. was applied. By prioritizing and selecting those initiatives that are in the later stage of project development, have a moderate to high reliance on highway improvements, and are expected to generate economic growth, the study provided a targeted and effective approach to linking economic development and highway investment in the region.

Exhibit 4 highlights the projects that, on the basis of field research and in consultation with the local stakeholder group, were selected for further analysis in this study (those projects are the ones that are circled in the exhibit):

Exhibit 4: Economic Development Initiatives Selected

Exhibit 4 highlights the projects that were selected for further analysis in this study: wind power, irrigation, tourism, oil and gas development, and manufacturing. A dairy farm and water project were excluded

Exhibit 4 highlights the projects that were selected for further analysis in this study: wind power, irrigation, tourism, oil and gas development, and manufacturing. A dairy farm and water project were excluded.

Source: ICF Consulting

Step 3: Transportation Needs and Investment Analysis

For the projects selected, the study team determined the types of highway investments that are needed to support and capture the full range of economic benefits associated with each initiative [6] .

Step 4: Economic Impact Analysis

To evaluate the potential economic impacts of the identified transportation investments along the US 2 Fort Peck Reservation Corridor, the analysis focused on determining the benefits from transportation improvements such as new jobs resulting from road construction and the benefits from the impact of transportation improvement on accessibility

Drawing on two approaches - Incremental Benefit and Input-Output analysis - the sum of the above two benefits was measured as the total potential impacts of the transportation improvements and then used as the basis for regional economic impact estimation.

In applying the concept of Incremental Benefit Estimation, the study compared the economic benefits with and without highway investments, thereby providing an assessment of benefit reliance on transportation improvements and determining those benefits that can only occur as a result of the highway investments. For example, in the case of the North of Sprole Irrigation initiative, the projected economic benefits did not reflect the level of reliance on transportation needs. As such, the analysis estimated the proportion of benefits such as jobs and income that are dependent on highway investments.

Once an assessment of benefit reliance on transportation improvements had been made, Input-Output analysis was used to estimate construction and operation period benefits.

Step 5: Select Investments for Plans and Program

The work conducted in Step 4 will allow government agencies in the region to identify, on the basis of economic impact analysis, highway investments that are critical to achieving maximum project benefits and that contribute to economic development in the Fort Peck Reservation area. This study does not make recommendations on investment prioritization and/or funding sources; instead, it focuses on demonstrating the linkages between investment needs and implementation (and benefit accrual) of the relevant economic development initiatives that are being pursued by Fort Peck.

VI. Results

To provide access to the site for construction and operation of the wind farm, the project is dependent on improvements to the local road system and linkage to the regional road system.

Phase 1: A $0.9 million in transportation investments could potentially support an estimated

Phase 2: A $2.8 million in transportation investments could potentially support an estimated:

The study determined that there are no major transportation improvements required at this time to support manufacturing, oil and gas production or tourism. However, this determination might be different if there were future expansion of manufacturing operations, a substantial increase in oil and gas production, the implementation of a proposed dairy farm located near to the oil and gas production area and a broader tourism related Hi-Line [7] region initiative.

Conclusion. A number of conditions could warrant further analysis of the links between transportation and economic development opportunities. For example, in the case of tourism, while the study concluded that the transportation infrastructure in the project area is adequate for supporting this sector, development of tourism sites - particularly those located in inaccessible areas - could generate needs for improvements to the local and possibly regional network. In addition, a study of tourism in the broader region may support regional transportation improvements.

Notwithstanding the above, the current and reasonably foreseeable economic development initiatives at Fort Peck do not justify widening US 2 to a continuous four lane highway throughout the corridor. However, there are a number of factors that might warrant further analysis of the improvement issue, including assessing the aggregate impacts of initiatives along other sections of US 2 and examining new or revised initiatives in the project area, such as an amended tourism strategy that might be expected to substantially increase traffic volumes. In addition, the improvements noted in Chapter VI needed for irrigation and wind energy production are clearly justified. Finally, there may be other reasons to widen portions of US to a 4 lanes (e.g., safety, turn off lanes for slower vehicles) that do not depend on economic development for justification.


[1] According to the Census, they are American Indian, Eskimo or Aleut.

[2] Tiller, Veronica. "Tiller's Guide to Indian Country: Economic Profiles of American Indian Reservations." Bow Arrow. 1996

[3] Mini Sose Reservation Profile

[4] The focus of this study is on the relationship between highways and economic development. However, it is recognized that there are other modes of transport in the area (for example passenger and freight rail service, air service and general rural transit) that also contribute to economic development.

[5] Mini Sose Reservation Profile

[6] This report details those specific transportation improvements that demonstrated the most potential in supporting economic development in the region. For a description of the full range of transportation needs identified during the analysis, see technical transportation memo that is available upon request from AECOM Consult Inc.

[7] The Hi-Line is the name given to the string of farm and ranch communities stretching 666 miles across northern Montana along US 2.

Updated: 05/04/2012
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