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Changes on Fargo-Moorhead diversion amendments likely, but doubts linger

BISMARCK -- House Majority Leader Al Carlson of Fargo said Friday he is open to contributing more state funds toward the Fargo-Moorhead Area Diversion Project, though whether the project will be able to make use of the money remains in doubt.

Carlson met with Fargo city officials this week to hear their concerns about amendments he had proposed to the State Water Commission budget, House Bill 1020, which includes money for the flood protection plan.

After the meeting, Carlson said he thinks the Senate Appropriations Committee will alter his original amendments.

He said the $325 million cap on state funds could be changed after he heard the city's request for $450 million from the state during this week's meeting.

Another change will correct what Carlson says was a wording error. The amendment currently prohibits the use of public funds, which included local tax money. It was intended to only prohibit the use of state funds.

"The intention was not to inhibit the voters' sales tax," he said.

Under the bill's current proposal, the Fargo area stands to lose its ability to use public funds, including local tax funds, for the proposed $1.8 billion plan. The Senate Appropriations Committee, which would have to approve any changes to the amendments, held a hearing on the bill Friday. It heard testimony from those wanting flood protection for about 200,000 Fargo-area homes and those concerned about the diversion's ripple effects.

Opponents are worried the current diversion project would wash out their farmland, shrink the property tax base and increase costs to taxpayers in areas south of Fargo.

Committee vice chairman, Sen. Tony Grindberg, R-Fargo, said both sides have solid arguments and will take some time to evaluate.

"It's important we allow the local decision-making ability to prevail and yet have some guidance at the state level," he said. " I don't know what that compromise might be."

No action was taken by the committee Friday. A subcommittee led by Grindberg and including Sen. Ray Holmberg, R-Grand Forks, and Sen. Larry Robinson, D-Valley City, will take up the discussion in two weeks.

Fargo and Cass County officials who have endorsed the current plan are trying to get the amendments removed from the bill because it hampers their ability to move forward with the project.

Of the $1.8 billion estimated cost, Diversion Authority Chairman Darrell Vanyo said $800 million is expected to come from the federal government, $100 million from Minnesota and $450 million each from Fargo and North Dakota.

The city has at least $40 million so far, generated by two citywide half-cent sales taxes and one county sales tax, for the city's share of the project.

But the amendments, as currently written, would prohibit the city from using tax dollars to cover its $450 million share and cap the states share at $325 million.

Carlson offered the amendments to push the federal government to come up with the money first, worried they won't get a strong financial commitment if the state puts money towards the project first.

Vanyo is worried that without a firm commitment by the state, the amendments could make it more difficult to get federal approval to go ahead with the project.

"We may be questioned by congressional people reviewing projects who are interested in what has been committed," he said. "We want to go to Washington with the full support of the state, armed with as much as we can to seek that authorization."

Fargo City Commissioner Brad Zimmer told the committee the diversion, "is the only adequate solution for protection," indicating current and other levees do not have as large of an impact as the diversion would.

"I ask you to strongly consider removing amendments that will deter efforts to build the diversion," he told them.

One group, the MnDak Upstream Coalition, says the upstream effects of the dam have not been studied sufficiently. The group supports flood protection efforts and the amendments, but overall say the diversion proposal will cause multiple problems.

Raeann Kelsch, the lobbyist for the Upstream Coalition, said the amendments add accountability for state tax dollars, which is necessary for the state's appropriation to the project.

Steve Hall, superintendent of the Kindred School District, said the current diversion proposal already has put a hole in the district's pocket. Property taxes in nearby Oxbow have dropped, which is 23 percent of the school district's tax base and 19 percent of the 676 student population.

He said communities such as Leonard, Walcott, Kindred and Davenport would likely have to increase taxes to cover some of the losses, creating a large burden on property owners as the district already is paying $900,000 a year to pay off it's recently built $14.7 million high school.

"Who would cover losses to school district budgets and district taxpayers?" he asked the committee.

Jerome Nipstad, a third-generation North Dakotan born and raised on a small farm south of Fargo, said he's looking forward to the day his grandson takes over.

But under the current project, his farmland would take on 5 to 6 feet of water, he says.

"I'm for flood protection, but they don't have to flood us out to get it," he told the committee. "You can't go buy another farmstead like you can buy out a home."

The Water Commission budget passed the House by a 90-4 vote. If the Senate eventually passes a bill different than the House's, the two bodies would go into conference committee to hash out the details.