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Heidi Shaffer, Published September 20 2010

Moorhead wants to pay smaller share of diversion study costs

Moorhead officials want to start paying a smaller share of costs related to the Red River diversion’s feasibility study.

Moorhead council members made it clear at their meeting last Monday that going forward, the city will pay 10 percent of the costs to study the diversion.

The federal government pays half of the estimated $11 million to $12 million study’s costs, and the local sponsors – Fargo and Moorhead – split the other 50 percent.

Moorhead, with help from Buffalo Red River Watershed District and Clay County, had paid 20 percent of costs up to this point, with Fargo and its North Dakota-side jurisdictions picking up the rest.

The U.S. Army Corps of Engineers has determined that 93 to 95 percent of the diversion’s benefits lie on the North Dakota side, said project co-manager Craig Evans.

Though the corps determines the benefit ratio, it is up to the local sponsors to determine the funding ratio.

“Which fraction comes from North Dakota or Minnesota makes no difference to us,” Evans said.

The Moorhead council’s decision last week to pay 15 percent of the most recent $100,000 in study costs was a step toward getting the city’s payments closer to the benefits ratio, Mayor Mark Voxland said. However, the council decided it will pay 10 percent of future study costs.

“When we first started the process, we didn’t know what the (benefit) ratio was,” Voxland said. “Some could make the argument that it’s really 94-6.”

Moorhead’s decision last week was the first that Fargo Mayor Dennis Walaker had heard of any problems with the percentage that was set when the study began in 2008, he said.

“When this was presented to them, we felt this was a fair figure,” Walaker said.

Walaker said he’s never fully agreed with the corps’ benefit percentages.

“If we get a 500-year flood, both cities are in deep, deep trouble,” Walaker said.

Walaker said the Metro Flood Study Work Group is going to have to work through the cost-sharing if Moorhead wants to change its percentage.

“Somebody’s got to pay for it,” Walaker said.

Adjustments could be made at the end of the study, and there are many unknowns to necessarily know who is getting the most benefit, Walaker said.

“Until the corps finishes their estimates, some of this stuff is extremely premature,” Walaker said.

Voxland said Moorhead is waiting on the Minnesota and North Dakota governors to weigh in on the cost ratio when they decide on state funding for the final project.

“Ultimately, it’s the two governors that are going to come up with what’s a fair ratio for the two states,” Voxland said.

Minnesota Gov. Tim Pawlenty and North Dakota Gov. John Hoeven have talked about the states’ cost-share on several occasions recently but have not arrived at a final figure, Hoeven spokesman Don Canton said Friday.

The governors will look at not only the diversion costs but also the downstream mitigation costs, which could bring the Minnesota share higher than the 90-10 ratio, Canton said.

Pawlenty’s media liaison could not immediately answer questions Friday.

That state ratio can then be applied to local financing for the design, construction and eventually maintenance of the diversion, Voxland said.

“I think that will be the starting point for us, and it might be the ending point as well,” Voxland said.

Feasibility study costs

Total costs of the feasibility study are expected to reach $11 million to $12 million. The federal government and local sponsors split costs 50-50, but final adjustments to the split will come at the study’s completion, project co-manager Craig Evans said.

Total spent to date $9.2 million*

Federal share $4.2 million

Local share $5 million

*totals approximate

Note: Local share made up of money from cities of Fargo and Moorhead, North Dakota Water Commission, Cass County, Clay County and Buffalo Red River Watershed District.

Sources: U.S. Army Corps of Engineers, city of Fargo and city of Moorhead

Readers can reach Forum reporter Heidi Shaffer at (701) 241-5511