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Published April 10 2012

Sales tax extension would help fund flood protection needed to avert higher insurance premiums

FARGO – Annual flood insurance bills for thousands of property owners here could spike to more than $2,500 in a couple of years if the city doesn’t shore up its internal flood protection.

But Fargo leaders need a funding stream to pay for that protection, and that’s one of the main reasons they say voters should pass the sales tax extension that’ll be on the June ballot.

“There’s no question the needs are there,” Fargo Mayor Dennis Walaker said Tuesday, as he and other city leaders met with The Forum’s Editorial Board to advocate for the sales tax measure.

The extension would continue generating about $11 million a year for the next 20 years to help the city pay for needed infrastructure projects, including flood protection.

Fargo officials are working on a five-year goal to get the city’s flood protection up to a level of 42.5 feet, in addition to the metrowide efforts to build a Red River diversion.

The Federal Emergency Management Agency’s revised definition for Fargo’s 100-year floodplain is 39.4 feet, so protection to 42.5 feet means homeowners wouldn’t be forced to pay exorbitant premiums for flood insurance coverage.

Fargo Administrator Pat Zavoral said FEMA’s revised flood maps are now expected in July, which will give the city a couple of years to shore up protection before homeowners face the stiffer premiums.

In the absence of certified protection, 7,500 parcels and 7,800 additional acres will be affected by FEMA’s revised floodplain, Fargo city engineers say.

Homeowners today pay $365 to $405 a year for flood insurance coverage on a $250,000 home with $100,000 worth of contents.

Without certified protection for the city, that same coverage would cost property owners $2,540 a year once insurance rates reflect the new floodplain, according to FEMA’s estimates to Fargo officials.

“It’s critical for us, in the next two or three years, to attack this problem,” Zavoral said. “You have to connect every dot; we can’t leave any holes.”

Although the proposed sales tax extension could be used to pay for a variety of infrastructure needs, Fargo city leaders told The Forum’s Editorial Board that flood protection is the No. 1 reason voters should back the measure.

If the sales tax extension fails, Walaker said special assessments could be an option to fund the work.

Complete internal flood protection could cost

$247 million, while the city’s proposed share of the diversion could likely be upward of $272 million, officials said.

“We can’t fund both of them – there’s no way,” Walaker said. “We’ve been stealing from Peter to pay Paul for a couple of years just to keep us going and keep some of these projects moving forward.”

Fargo officials have used more than $50 million in planned revenues from the city’s 2009 half-cent sales tax to fund inner-city flood protection efforts, leaving them short on available funds to pay for the diversion project, too.

If voters pass the infrastructure sales tax extension in June, officials said they could use part of those revenues to pay for the city’s projects while reserving future revenues from the half-cent flood tax for diversion-related costs.

The half-cent tax that expires this summer was initially approved in 1992 and extended in 2002.

It’s been used to pay for a variety of infrastructure needs in Fargo, including streets, sewer and water infrastructure and flood protection.

If city voters approve the extension on the June 12 ballot, the sales tax would resume Jan. 1, 2013.

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