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Kyle Potter, Published September 26 2013

Flood protection benefits vary greatly inside proposed F-M Diversion

FARGO – Flood-prone lands north of West Fargo stand to gain the most from the Fargo-Moorhead Diversion, while the West Acres area will receive the least additional flood protection from the proposed project, according to a modeling map commissioned by the Diversion Authority.

The map is meant to help lay out how Cass County property owners inside the proposed 36-mile flood channel may be charged if the county levies a special assessment to cover construction or ongoing maintenance costs.

It also provides a barometer for how homeowners throughout the area will benefit from the $1.8 billion flood protection project.

And the benefits vary greatly.

Diversion consultants calculated the change in flood threat for 16 areas if the $1.8 billion project is built, and assigned each region its own score.

Within each area, some properties will receive more benefits and less benefits than the regional average – and in some cases, no flooding improvement at all. Eric Dodds, diversion consultant with Fargo-based AE2S, said some areas of Harwood still won’t reach 100-year flood protection.

Dodds said no similar analysis has been compiled for the Minnesota side of the Red River. He stressed that all of the information on benefits is preliminary.

Those flooding improvement scores, called “Benefit Weight Factors,” play a big role in shaping residents’ bills for a property tax special assessment, which diversion leaders and Cass County officials are still considering.

If the Diversion Authority decides to go ahead with a special assessment – and voters approve it – Dodds and others say that money would never be collected from property owners. Instead, it would be used as a “financial tool” – a kind of collateral to show Wall Street if it comes time to sell bonds.

“This is really just an exercise, because at this point, we’d have the sales tax paid for,” Fargo City Administrator Pat Zavoral said at a Diversion Project Assessment Committee meeting Thursday.

Fargo voters passed a half-cent sales tax dedicated to flood protection in 2009 and Cass County voters passed a similar sales tax in 2010. Dodds said there has been discussion of extending those taxes to cover the local share of the project.

With state funding at a standstill and federal funding at question – the Senate has authorized the project, but it’s still awaiting an OK from the House before it could get in line for federal appropriations – diversion opponent Nathan Berseth took Thursday’s discussion as a sign diversion leaders will use property taxes to cover funding gaps.

“This a process they’re moving forward with to have the local property owners pay for the diversion,” Berseth said.

How a special assessment would work

Combined with property values and land area, the “Benefit Weight Factor” helps diversion leaders lay out how much of a special assessment each region would have to cover.

Because they have the highest property values and the most parcels of land in the county, the area of Fargo south of Interstate 94 and east of Interstate 29 would be on the hook for more than 37 percent of a special assessment. The northern Harwood area would foot less than three-tenths of a percent of the bill.

If a special assessment is collected to cover construction costs – and diversion leaders insist it won’t be – taxpayers’ bills would vary from region to region, and from house to house. It also varies based on whether the property is residential, commercial or agricultural land.

That’s how a special assessment would also work to cover ongoing maintenance costs for the diversion, which are expected to be between $3 million and $3.5 million every year. Each region would likely pick up the same share of the tab as the map calls for, Dodds said.

Dodds said discussion won’t turn to how to pay for those maintenance costs until sometime next year.

Readers can reach Forum reporter

Kyle Potter at (701) 241-5502