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Published January 30 2012

Fargo leaders promote sales tax extension

FARGO – City leaders are forming plans to ask residents for a sales tax extension this year that would keep the city’s sales tax rate at 7.5 percent.

What exactly those tax dollars would be used for hasn’t been decided.

A 10-year half-cent infrastructure tax approved in 2002 and earmarked for street projects is due to expire in June.

Fargo Mayor Dennis Walaker and other city officials plan to propose a measure that would extend the sales tax to likely help fund infrastructure and flood protection needs throughout the city.

Walaker said specific plans will be announced in February. The earliest the measure might go before the voters would be the June 12 election.

“If there’s anything we’ve learned, we have to be very specific in our asking,” Walaker said. “We have to identify what it’s going to be used for, or it won’t have any chance at passing.”

Walaker first broached the idea last summer of extending the sales tax, when city leaders discussed future funding demands to pay for necessary projects, while continuing work on fortifying Fargo’s flood protection.

Walaker said the city has other expensive needs, too, such as a new city hall, “but that’s not going to be on the plate as far as this sales tax is concerned.”

Upgrading sewer, water and utility lines, and reconstructing roadways in downtown Fargo is set to cost $40 million.

“Then of course, flood protection,” Walaker said. “There’s no question about the need.”

Fargo engineers are in the process of shoring up citywide flood protection to a level of 42.5 feet, in addition to pushing for a metro-area diversion.

Fargo voters approved a half-cent sales tax for flood protection in June 2009.

It generates more than $10 million a year, but it won’t be enough to cover the cost of both the city projects and Fargo’s share of the $1.78 billion Red River diversion.

Commissioners Mike Williams and Brad Wimmer said last week they expected a proposal sometime in the near future that would extend the sales tax to help pay for the city’s share of the diversion.

But the immediacy of the forthcoming announcement caught Commissioner Dave Piepkorn by surprise on Monday.

“They had talked about it, but I just found out about it today. I was not happy about that,” said Piepkorn, the commission’s liaison to the finance department.

Piepkorn said he would oppose extending the sales tax to pay for the diversion because, “We don’t know what the amount is for our share.”

“Until we know what our number is, that would be premature,” he said.

The U.S. government is expected to match nearly half of the diversion cost. North Dakota, Minnesota, Cass County and Fargo will split the rest of the cost proportionally.

Readers can reach Forum reporter Kristen Daum at (701) 241-5541