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Local share of diversion project to go up significantly

FARGO -- The estimated cost of the proposed Fargo-Moorhead flood diversion isn't the only thing that's going up -- so is the local share of the project.

FARGO -- The estimated cost of the proposed Fargo-Moorhead flood diversion isn't the only thing that's going up -- so is the local share of the project.

Diversion Authority officials said Wednesday, March 30, that the federal share of the $2.1 billion project will be about half of what was expected and local governments will shoulder the additional $396 million burden.

That would seem to make the extension of a flood-protection sales tax all but guaranteed.

Fargo Mayor Tim Mahoney, a member of the Diversion Authority board, said Wednesday that paying for flood protection with sales taxes is preferable to paying with special assessments. The authority will be working on a financial plan to get its arms around these changes in the financial picture, he said.

The cost of the massive project was last estimated at $1.8 billion in 2011.

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At that time, the federal government was going to pay $846 million. That's how much was set aside for the project in the 2014 Water Resources Reform and Development Act.

Of the remainder, the state of North Dakota and local governments in North Dakota were going to each pay 45 percent, or $418 million. The state of Minnesota was going to pay 10 percent, or $93 million.

A lot has changed in five years.

In a presentation given to Diversion Authority officials on Wednesday, their engineering consultants CH2M Hill said the federal share had fallen to $450 million.

Mahoney said the Office of Management and Budget didn't want to pay more because the cost-benefit of the project was lower than it expected.

The state of North Dakota had earlier pledged $450 million and the state of Minnesota had pledged it would pay as much as $100 million, leaving the rest for the city of Fargo, Cass County and the Cass County Joint Water Resource District, the three North Dakota members of the Diversion Authority.

Moorhead Mayor Del Rae Williams said she understands Minnesota officials won't pay more than 2 percent of the project cost, which is the benefit they believe Minnesota residents and businesses will get from the project. This works out to about $43 million.

That leaves $1.2 billion for local governments in North Dakota. The current flood control sales taxes in Fargo and Cass County are expected to raise about $700 million before expiring.

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Mahoney had said earlier that voters will be asked to vote on extending the sales tax.

Asked when they learned that the federal share would be so low, Cass County Administrator Keith Berndt said it's been under discussion with OMB for quite a long time.

Mahoney said the fact that the federal government will pay less has been out there.

If that's the case, the news hasn't reached many people. The Diversion Authority's website still notes the $846 million without noting this has been reduced. In early March, state lawmakers speaking with the U.S. Army Corps of Engineers were still under the impression the federal government would pay $846 million.

One figure that hasn't been updated is the cost of a major flood in the Fargo-Moorhead area.

It was last tallied at $10 billion in 2012, according to Rocky Schneider, a consultant with the Diversion Authority.

Considering the metro area's population growth in the past several years, that number could be a lot higher.

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