Hoeven, Klobuchar secure $437 million for diversion project, fulfilling federal funding for project
The funding commitment completes the federal government's $750 million share of the $3.2 billion flood-control project to protect the Fargo-Moorhead metro area.
FARGO — Sens. John Hoeven and Amy Klobuchar announced they have secured $437 million in federal funds for the Fargo-Moorhead Area Diversion Project, an amount that completes the government's $750 million contribution to the project.
"This $437 million fufills the entire federal funding commitment for the project, providing certainty that it will be built on or ahead of schedule and ensuring the Red River Valley is permanently protected against the threat of flooding," Hoeven said in a statement announcing the funding on Wednesday, Jan. 19.
The $3.2 billion diversion project under construction is the first in the nation to use a public-private partnership model — a financing method that officials said helped the project to garner federal support.
In partnership with the Metro Flood Diversion Authority, a consortium of private companies called the Red River Valley Alliance is building the $1 billion, 30-mile diversion channel to carry Red River floodwaters around the metro area during severe floods.
The Army Corps of Engineers is building a 20-mile earthen embankment with three gated control structures to hold back and regulate the release of water into the diversion channel.
"This is a major win for the entire Fargo-Moorhead community," Klobuchar said. "With this federal funding, we will be able to continue construction on the Fargo-Moorhead flood diversion project and provide permanent flood protection for more than 200,000 people."
The financial commitment from the Biden administration means all remaining work by the Army Corps of Engineers can be completed. The money comes from the Infrastructure Investment and Jobs Act.
"Receiving $437 million to complete all of the remaining federal work for the Fargo-Moorhead Diversion Project is terrific news," said Col. Karl Jansen, St. Paul District commander.
"As a result, this project will no longer have to compete for federal funding each year, " Jansen said. "We can finish our work on schedule for the benefit of our fellow citizens."
Joel Paulsen, executive director of the Metro Flood Diversion Authority, said Wednesday's announcement that the remainder of the federal funding is assured could allow for accelerated construction.
"There's a potential we could move faster on early portions of the southern embankment than was anticipated," Paulsen said.
Also, the announcement erases any lingering uncertainty about whether the full federal financial commitment would be made, he said.
"It was the last significant source of financial risk for the authority, which has now been taken off the table with appropriation of the funds," Paulsen said.
Chad Peterson, chairmain of the Diversion Authority board and Cass County Commission, said the significant funding from local and state taxpayers helped place the project high on the Corps' priority list.
"This project stands on its own merits," he said. The public-private partnership model, which involves significant state and local financing, will become increasingly common for major public works projects, Peterson said.
"This could be the model for the future," he said.
The $437 million commitment came from talks between Hoeven, R-N.D., and Klobuchar, D-Minn., with Shalanda Young, the acting director of the office of Management and Budget, an effort that builds on the senators' ongoing work to obtain federal funding for the project.
Work on the project will accelerate this year when construction starts on the diversion channel. Work also will continue on two control structures and the embankment. Plans call for having the project done in time to provide protection beginning in 2027.
The state of North Dakota has pledged $870 million for the diversion project, and the funding plan calls for $1.1 billion in local funds generated from special sales taxes in Fargo and Cass County. Those figures are based on the $2.75 billion cost estimated in 2018, which now has increased from inflation to $3.2 billion.
Local sales tax revenues are running higher than the conservative projection of annual increases of 1.5%, Paulsen said. As a result, he said, local sales tax dollars will be able to cover the added costs from inflation.