No funding shift

State defends flood project budget

The State Water Commission says revenue projections – and not a desire to shift money to Fargo – prompted its recommended $70 million in state funding for Souris River flood control in the 2019-21 biennium.

Last week, Minot City Manager Tom Barry told the Minot City Council that the $70 million was a reduction – aimed at freeing up more money for the Fargo-Moorhead Diversion project.

State Engineer Garland Erbele responded this week.

“We never shifted the dollars from one project to another,” Erberle said Wednesday, noting the commission never reduced money to the Mouse River Enhanced Flood Protection Project. “His statements were probably based on the recommendations of the water coalition – surely not any recommendation of the State Water Commission.”

The North Dakota Water Coalition had recommended the water commission consider $552.4 million in water projects, including $100 million for the MREFPP.

Erbele said the commission made no funding recommendations until a public presentation Dec. 7, at which $70 million was proposed for the MREFPP.

“That has been the only recommendation that has ever been made by the State Water Commission for funding the Minot-Mouse River flood control project,” he said.

“It’s semantics,” water coalition member Alan Walter of Minot responded. It’s a shift when the State Water Commission adds $100 million to the coalition’s $66 million recommendation for Fargo while scaling back the coalition’s recommendations for other projects, he said.

Barry said the commission’s position is technically correct because the coalition’s recommendations were separate from its own. But it doesn’t erase the city’s concern about the $70 million in the governor’s budget, he said.

“It’s not only disappointing – it’s detrimental to the project,” he said. He said the project has unmet needs of $180 million and should be getting at least $105 million from the state to stay on track. The money is needed for both property acquisitions and construction.

An appropriation of only $70 million will delay the project at a time when it is primed and ready, Barry said.

“Our shovels are dirty. We are well beyond shovel-ready. That can’t be said for some other projects,” he said.

The Souris River Joint Board has estimated a financial need of about $281 million for the MREFPP through the end of fiscal year 2021, according to information from the water commission. About $186 million could be eligible for state cost-share assistance. The 2017 Legislature limited the MREFPP to no more than $193 million in state funding within the city limits of Minot through the 2023-2025 biennium.

The $70 million for the MREFPP is the third largest amount recommended by the water commission, behind the FM Diversion and Northwest Area Water Supply project. The water commission is asking for a $75 million line of credit from the Bank of North Dakota to advance the NAWS biota water treatment plant. Because that project element is a federal responsibility, the state plans only to front the cost until the federal government can reimburse it.

The state’s commitment to the Fargo project is capped at $570 million, as directed by passage of Senate Bill 2020 in 2015. Of that total commitment, $450 million is for the diversion project, and $120 million is for Fargo interior flood control efforts. The water commission’s funding recommendation for the 2019-2021 biennium is $166.5 million.

Regarding the water coalition recommendations, Erbele said the commission considers those recommendations along with other information from project sponsors, but its funding proposals also must take into account the money available.

He said revenue projections won’t support the $552.4 million in overall water project spending endorsed by the coalition.

“The budget we testified on last Thursday at the Senate Appropriations Committee was for $478 million,” he said. “So clearly what the coalition had proposed wasn’t going to work based on the money available.”

Erbele said revenue estimates remain fluid as the water commission’s budget works its way through the legislative process. If it is possible to support more money for Minot, the commission will do so, he said.

In a letter this week to the Minot Daily News, Erbele wrote, “The State Water Commission has been exceedingly supportive of the MREFPP. In fact, the Commission initiated the project after the devastating impacts of the 2011 flood event. Since that time, the Commission has provided as much financial assistance ($179 million to date) and technical assistance as our funding has allowed. We have always worked very hard to assist local water managers, city officials, and technical experts with the advancement of this critical project.”