Source: United States Senator for North Dakota John Hoeven
11.08.21
WASHINGTON – Senators John Hoeven, Amy Klobuchar, Kevin Cramer and Tina Smith today urged Office of Management and Budget (OMB) Acting Director Shalanda Young to:
- Support $180 million in funding for permanent flood protection in the Red River Valley in the Army Corp of Engineer’s Fiscal Year (FY) 2022 work plan.
- Include the project in the president’s FY2023 budget request.
The senators highlighted that the project is at a critical stage and stressed the need to keep the construction of the Red River Control Structure on schedule. A delay in this key feature would push back the project’s completion date while opening up the region to additional annual spring flooding seasons. Inclusion in the president’s budget would provide certainty to the project developers and help ensure the Army Corps continues to fulfill its funding commitment to the project. The project has received $310 million in federal construction funding to date.
“The Fargo-Moorhead flood diversion project not only provides critical protection for local residents, it also serves as an example of an alternative approach to project financing that can accelerate the speed and lower the cost of a wide array of water infrastructure projects nationwide,” said the senators. “The Fargo-Moorhead region has a clear need for permanent flood protection. The Red River of the North exceeded flood stage 55 times between 1902 and 2019, with seven of the top 10 floods occurring during the last 30 years. Completion of this project means permanent protection of lives and property and the end of constructing temporary protective measures every time the river rises.”
The full text of the senators’ letter can be found below:
Dear Acting Director Young:
We write to ask for your support in funding permanent flood protection for Fargo, North Dakota and Moorhead, Minnesota. The Fargo-Moorhead flood diversion project not only provides critical protection for local residents, it also serves as an example of an alternative approach to project financing that can accelerate the speed and lower the cost of a wide array of water infrastructure projects nationwide. Indeed, it is perhaps the most innovative flood protection project in America.
The Fargo-Moorhead region has a clear need for permanent flood protection. The Red River of the North exceeded flood stage 55 times between 1902 and 2019, with seven of the top 10 floods occurring during the last 30 years. Completion of this project means permanent protection of lives and property and the end of constructing temporary protective measures every time the river rises. The project also reduces the risk that the federal government will have to provide significant funding, estimated at $10 billion, to help the region recover from a future catastrophic flood.
The Fargo-Moorhead flood protection project uses a public-private partnership (P3) that leverages private sector capital to accelerate construction timelines. The P3 model dramatically reduces the federal cost share when compared to traditional financing while delivering a completed project – and providing permanent flood protection – faster. The federal share of this project is capped at $750 million, of which nearly half — $313 million – has been provided to date. While the typical flood protection project is split 65 percent federal and 35 percent non-federal, this project is currently only 25 percent federal and 75 percent non-federal. This is the U.S. Army Corps of Engineers’ first and only P3 project in the nation, and this innovative approach has attracted support from other U.S. federal agencies, including over $500 million in Water Infrastructure Finance and Innovation Act (WIFIA) loans from the Environmental Protection Agency (EPA) and Private Activity Bonds from the Department of Transportation (DOT).
In order to continue to move the project forward, Congress will provide funding in Fiscal Year (FY) 2022 above the president’s budget request, similar to appropriations made in previous years. We urge you to support $180 million in the work plan developed by the Corps of Engineers to support construction in FY22. This funding supports a key feature of the federal section of the project: a control structure to divert the flow of water from the main river channel to a diversion channel. The project cannot function without this feature and a delay in funding will push back the project’s completion date while opening up the region to additional annual spring flooding seasons.
We also urge you to include funding for the Fargo-Moorhead project in the president’s FY23 budget request. By FY23, we will have obligated more than half of the federal share of project funding. Inclusion in the budget request would reinforce the federal government’s commitment to delivering the project on time, provide financial stability for later stages of project construction, and move us closer to permanent flood protection for more than 200,000 people, 70 square miles of infrastructure, and flood risk reduction from other area river systems.
We hope that you will support funding in the FY22 workplan and the FY23 budget request for permanent flood protection in the Fargo-Moorhead region. We look forward to working with you to complete the federal commitment to this project in the coming years.
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