Dispute over key Fargo-Moorhead diversion permit goes to trial; decision could be pivotal

FARGO — The record 2009 Red River flood crest was mere inches from overtopping the most vulnerable sandbag barriers and unleashing devastation as well as threatening lives.

That disaster delivered a “wake-up call” that spurred action that years later resulted in a $2.75 billion diversion channel to protect the Fargo-Moorhead metropolitan area from floods that are increasing in frequency and severity.

More than 11 years after the record flood, the diversion still faces administrative and legal challenges, including a battle over a crucial permit that will go before a Minnesota administrative law judge in a trial starting Monday, June 8.

The challenge was brought by the Buffalo-Red River Watershed District, which denied a local permit for the project, as well as the towns of Comstock and Wolverton in Minnesota.

The central issue at trial is whether the Minnesota Department of Natural Resources properly issued the permit in December 2018 — a permit the DNR argues should be upheld because the project is “reasonable, practical, adequately protects public health and safety and promotes the public welfare.”

Lawyers in the case expect it will take two weeks to present evidence for and against the permit. The administrative law judge will make a recommendation, but the DNR will decide whether to uphold or modify the permit — a decision that likely will be taken to court.

If the permit is upheld, however, further legal challenges of the permit will not delay the project while the arguments continue.

Assuming the DNR upholds its permit, “We should have a valid permit at that point despite any further appeals,” said Joel Paulsen, the Metro Diversion Authority’s executive director. There is a “very, very small chance” a court could reverse a favorable permit decision, since courts usually grant deference to administrative decisions, he said.

If the decision goes against the diversion, officials will work to resolve remaining disputes, Paulsen said.

“The Diversion Authority has always been willing to do what we need to do to mitigate properly or meet our environmental requirements,” he said.

Despite the permit dispute and a federal lawsuit, work on the project in North Dakota continues under a judge’s order with $100 million in construction planned this year even as wrangling continues in Minnesota.

Over the years, the massive flood control project has encountered many twists and turns. What initially was planned as a Minnesota diversion evolved to become one in North Dakota that requires a control dam to temporarily store water to avoid downstream impacts all the way to the Canadian border.

The control dam will temporarily flood an area of mostly farmland south of Fargo-Moorhead — an impact that has sparked the intense legal opposition and regulatory scrutiny that have stalled the project.

Opposition continues even after the project was revised to reduce impacts in Minnesota by increasing impacts in North Dakota, which will realize more benefits from the diversion, bringing burdens and benefits into balance, according to the DNR and Diversion Authority.

The revised plan, often called Plan B, enabled the project to get a permit from the DNR, which denied a permit for the original design.

Permit opponents argue that even the revised project unnecessarily protects undeveloped land south of Fargo-Moorhead, increasing the cost of the project and the impacts on upstream landowners whose property will be temporarily inundated during severe floods.

“Simply put, the Plan B project would flood non-floodplain land within the BRRWD to make floodplain available for development in North Dakota,” the Buffalo-Red River Watershed District argued in its brief to overturn the permit.

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The same argument is made by upstream opponents, the Richland-Wilkin Joint Powers Authority, comprising North Dakota’s Richland County and Minnesota’s Wilkin County, and the towns of Comstock and Wolverton.
“Whatever the subjective intent, the project’s design clearly eliminates floodplain storage and effectively opens those areas for growth,” the upstream opponents said in their brief, which argues that the project favors urban land over rural land, Fargo-Moorhead’s growth potential over existing rural populations to the south.

The DNR evaluated 33 alternatives and concluded that the revised project was the “least impact alternative.” One of the alternatives it rejected would require a diversion three times the size of the project’s 30-mile channel and would create “unsustainable stream stability issues,” the agency found.

Also, the DNR’s dam safety engineer concluded that sandbag barriers and temporary levees pose a greater risk of failure than a permanent dam, therefore posing a greater risk to human health and safety.

The DNR brief argues that the upstream opponents’ arguments “lack merit and should be given little or no weight.

In prefiled testimony, Fargo Mayor Tim Mahoney said the diversion is designed to protest the Fargo-Moorhead metro area in light of an increase in what qualifies as the 100-year flood, a level of about 41.3 feet that, if left without permanent protection, would cost an estimated 11,000 homeowners $3,000 to $5,000 annually in flood insurance.

“I must be blunt,” he said in his testimony. “There is only one solution, the proposed Plan B, and with our neighbors in Moorhead and the vast majority of the region, we are solidly behind it.”

Fargo does not encourage development in the 100-year floodplain, Mahoney said, and has “very strict development standards in place to protect people and property from flood hazards,” including a requirement that all new buildings must be built above the 100-year flood elevation.

The DNR argues that Wolverton and Comstock lack legal standing to challenge the permit because the two towns lie outside the project area. But the upstream opponents maintain that the dam would sever Comstock’s connection to its markets and agricultural services and Wolverton would be subject to development restrictions.

All of the diversion opponents argue that the diversion fails to pass a cost-benefit analysis, but the DNR and Diversion Authority counter that the DNR does not actually have a cost-benefit requirement and that it found that the project has “quantifiable benefits,” the standard that must be met.

The administrative law judge hearing the case will make a recommendation to the DNR, but the agency has the ultimate authority to determine whether to modify, approve or withdraw the permit.

Brent Edison, a lawyer for the Buffalo-Red board, said the administrative trial starting Monday probably won’t be the end of the permit feud.

“It’s likely there will be further proceedings following the trial,” he said.

The judge's recommendation could come 30 to 90 days after the trial, with a determination by the DNR 10 to 30 days later, Paulsen said.

The outcome of the DNR permit case, he said, "paves the way to resolve remaining litigation," including the federal lawsuit.