CHICAGO — Williston, N.D., the small city located in the heart of the state's oil boom, can't keep up with the massive infrastructure and operating demands tied to the boom, Moody's Investors Service warned Friday.

The state's record-setting oil boom from the Bakken oil field has brought significant economic benefits to the state and many of its local governments, Moody's said in a new report, titled "Growing Pains: Oil Boom's Costs Outweigh Benefits."

But "the sudden influx of high-paying jobs and economic activity has also brought sizable credit challenges to the small, western North Dakota city," analysts wrote. "The city must contend with the weight of rapidly increasing operating and infrastructure needs and the city's increasing concentration in the energy industry has also left it vulnerable to the recent steep declines in oil prices."

A recent survey shows Williston faces $625 million of key capital needs over the next six years. The city already faces a debt burden that's equal to more than 500% of 2013 operating revenues, according to Moody's. "The city ... is running out of financing options to address these needs," Moody's said. "The city's mounting capital needs will only increase should energy exploration continue. The city will need to find alternate sources of funding to finance its capital plan as existing sources are close to leveraged."

Williston in 2013 floated $100 million in special assessment, sales, and oil and gas-tax backed debt, a move that quadrupled its direct debt burden, Moody's said.

Most of the oil and gas-production tax revenues have already been tapped through 2015 to pay for current capital needs, so won't help offset future demands.

Local governments have been lobbying the state Legislature for state relief to help them deal with exploding populations and infrastructure demands. The state Legislature is set to meet in 2015.

Moody's in January 2014 downgraded the city's general obligation rating to Baa2 from A3 and assigned a negative outlook, the city's second downgrade in two years. Moody's also downgraded its sales tax revenue bonds to Baa2 from A3, and its water revenue bonds to A3 from A1.

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