“Water project faces funding gap” from the Forum, August 13, 2008
Thursday, August 14th, 2008
By Patrick Springer, The Forum
08/13/2008
Feds would seek repayment of $95M to complete diversion
Backers of a plan to divert Missouri River water to the Red River Valley to augment water supplies hope to plug a $95 million gap in funding for the $660 million project.
The good news: Gov. John Hoeven has pledged to work to provide the state’s $220 million share.
The bad news: So far, the federal government regards its $220 million share as a loan, not a grant, and therefore would seek repayment of $95 million it would pay to complete the diversion.
The rest of the federal commitment, $125 million for a water treatment plant to prevent a transfer of microorganisms from the Missouri River to the Red River, would not have to be repaid.
The project’s financing challenges dominated a meeting Tuesday in Fargo of the Lake Agassiz Water Authority – a coalition of cities and water systems in the Red River Valley that is behind the water supply proposal.
Sen. Byron Dorgan, D-N.D., recently wrote Hoeven to say the state’s plans for dedicating $100 million of its share from federal funds for water projects in the state wouldn’t go over well in Congress, which must appropriate money for the valley water delivery project.
Writing in response, Hoeven said he would work to provide state funds that don’t tap federal water project funds appropriated for the state.
Dorgan said he will work to try to convert the federal share from “reimbursable” to a grant, but said winning approval for the project will be a battle, noting that Canada, Missouri and Minnesota oppose the project.
Dale Frink, North Dakota state engineer, said the state’s natural resources trust fund is flush with greater-thanexpected oil revenues, and is expected to exceed $100 million in the 2009-11 biennium.
The state’s support should not be in the form of a loan, he said. “The Red River project needs grant, it doesn’t need another loan.”
Pending legislative approval, the state’s share could be paid over several biennia, since the resource trust fund also must help pay for Fargo’s southside flood protection plan and water pipelines in western North Dakota, Frink said.
Local governments and water systems, including the city of Fargo, would have to come up with the other third of the project’s funding, or $220 million.
Meanwhile, the state still is waiting for an official declaration from the federal government approving its “preferred option” for meeting the Red River Valley’s supplemental water needs through 2050.
That proposal would use a pumping station and canal originally designed for irrigation, as well as a new pipeline, to move water from the Missouri River to the Sheyenne River, which flows into the Red River.
The U.S. Interior Department agreed to a request from the State Department not to issue its “record of decision” until Sept. 1, allowing diplomats time to try to alleviate Canadian concerns.
“The agreement was to consult with Canada, not give Canada a yes or no,” said Dave Koland, general manager of the Garrison Diversion Conservancy District, which is overseeing the project. “The decision is a United States decision.”
Readers can reach Forum reporter Patrick Springer at (701) 241-5522