Submitted Photo MI-7 rip rap work is conducted on the east side of the river along Roosevelt Park by the pickleball courts.

About $60 million is on the line for flood protection in the Souris Basin as the North Dakota House and appropriators in the Senate take different approaches to addressing the state’s water projects.

The House acknowledged the impacts of inflation in passing House Bill 1020 with $125 million for the Mouse River Enhanced Flood Protection Project in 2025-27. In the 2025 session, the project had been allocated $76.1 million for this biennium, with legislative intent to continue supporting the project at that level.

The statewide water funding bill now is in the Senate, where appropriators are considering $65 million for the MREFPP for the next biennium.

Senate Majority Leader David Hogue, R-Minot, said at a legislative forum Saturday that legislators previously have over-appropriated from the Water Resources Trust Fund, which gets its money from oil extraction taxes.

“There is more money going into that fund than what all of the water projects around the state can spend,” he said. “We appropriate $700 (million) to $800 million per biennium on water projects and that money never gets spent. We can only spend about half of it.”

In the past four bienniums, projects spent just 60% of their appropriations. Legislators and others are questioning why the state is appropriating money that is never spent, Hogue said.

“We are going to reduce what we appropriate to major water projects, and Mouse River is part of that process,” he said. “Mouse River will not lack funds that they can spend, but we will try to be better stewards of our money – try not to appropriate more than they can spend.”

Ryan Ackerman, administrator for the Souris River Joint Board, which oversees the MREFPP, offered a different view this week.

“The fundamental disconnect between Senator Hogue’s position and the Souris River Joint Board’s position is based on expenditure of actual cash versus when the funding is contractually obligated,” Ackerman said. “When legislators get reports from the North Dakota Department of Water Resources, they see an unspent funding balance and get concerned that they have previously appropriated too much funding. In reality, all of the money that has been appropriated for Mouse River activities – be it to the City of Minot for acquisitions or to the Souris River Joint Board for construction – is contractually obligated. The reason why it isn’t spent is because we do not pay contractors in advance of them doing their work; we pay them as their work is completed.”

As an example, Ackerman cited Phases MI-6 and MI-7 of the flood project in Minot that were awarded to Park Construction and Wagner Construction, respectively, last fall. The projects have a combined total construction cost of about $100 million, and all funding had to be committed in 2024 before a contract could be awarded. However, construction and payment likely will extend into 2027 and possibly 2028, he said.

That is typical of multi-year projects that require securing a large amount of money upfront, with actual spending occurring over what can be several years as construction is completed.

Sixty-five percent of the funding authority that allowed SRJB to award those contracts last fall came from state funds appropriated for the 2023-25 biennium, Ackerman said. The remaining 35% is local funding.

Ackerman said the differences between the House and Senate on HB 1020 are “part economics and part philosophy.”

Economically, the latest forecasts show lower projected state revenues from oil extraction taxes, producing less money for the trust fund and for water projects.

Ackerman said the philosophical debate relates in part to the state’s use of a line of credit, which is intended to give project sponsors the appropriate funding authority to award multi-year contracts without the need to have the cash in-hand to cover the full contractual obligations. The House proposed a $200 million line of credit, while the Senate is considering possibly a $150 million line of credit.

The House also included in its bill version a bond issue of $100 million. Senate appropriators are not currently supportive of bonding, Ackerman said.

“The cumulative effects of reduced oil revenues, reduced line of credit and elimination of bonding means considerably less funding authority could be available for water projects across the state,” he said.

“We know the state supports Mouse River flood control and legislators will work to provide funding for this critical infrastructure,” he added. “We are hopeful that the conference committee will include negotiations to find a balance between the House and Senate positions regarding the line of credit and bonding. We are likewise hopeful that these negotiations yield increased funding for flood control activities throughout the Mouse River basin. We will stay engaged in the legislative process to ensure the appropriators and conferees have the best information available to make their decisions.”