Advisors hopeful, but funding changes will likely delay procurement.
- The Fargo Moorhead Flood Diversion Authority may advance procurement of the estimated $900 million diversion channel and associated infrastructure P3 later this year
- The authority in 2017 shortlisted four teams to deliver the P3
- A federal judge in 2017 issued an injunction due to a dispute between multiple parties
The Fargo Moorhead Flood Diversion Authority could restart procurement of the estimated $900 million diversion channel and associated infrastructure P3 in 2019.
“We don’t know the precise date when we’ll be reengaging the teams, but we hope to restart procurement later this year,” said John Schockley, a shareholder at Ohnstad Law and one of the key advisors for the project.
The project aims to prevent catastrophic flooding on the Red River through the construction of concrete river control structures, a southern embankment that will reduce the flow of water through the metropolitan area, and an upstream mitigation area in addition to floodwalls and levees.
Fargo Moorhead has two components: the diversion channel; and a southern embankment that will reduce the flow of floodwaters into the larger metropolitan area. The diversion channel will be procured as a public-private partnership, while USACE will deliver the southern embankment as a design-bid-build.
The authority in 2016 issued an RFQ for the project and, a year later, shortlisted four teams to deliver the P3. Those teams were:
- Lake Agassiz Partners (Meridiam/Walsh/AECOM)
- Red River Valley Partners (Fluor/Plenary/Ames/Barnard)
- Red River Valley Alliance (Acciona/InfraRed/North American Enterprises/Shikun&Binui)
- Red River Partners (Graham/Parsons/Alberici/BBGI)
However, the project has been on hold been on hold since 2017, when a federal judge issued an injunction due to a dispute between the Minnesota Department of Natural Resources (DNR), the Fargo Moorhead Flood Diversion Authority, the Richland/Wilkin Joint Powers Authority (JPA) and the US Army Corps of Engineers (USACE).
DNR and JPA at the time alleged that USACE and the authority’s board violated state and federal law by agreeing to, and later starting the project without requisite permits from the state. Notably, the DNR in 2016 asserted that the project failed to adequately protect the health and welfare of Minnesotans, and ultimately declined to provide a permit. Moreover, the agency maintained that the project was not reasonable or practical.
“We don’t know the precise date when we’ll be reengaging the teams, but we hope to restart procurement later this year,” John Schockley, a partner at Ohnstad Law and one of the key advisors for the project.
The federal judge suggested that the parties involved work out a compromise before the project could once again move forward. To that end, the North Dakota Gov. Doug Burgum and Minnesota Gov. Mark Dayton convened an 18-member task force to work out an agreement. That agreement, known as Plan B, includes:
- Allowing an additional 2-feet of water through Fargo-Moorhead during a 100-year flood
- Incorporating a tie-back levee in Minnesota on the east side of the southern embankment.
- Changing the location of the Southern Embankment further to the north in North Dakota in order to balance the impacts between the two states, and reduce the impacts to Richland and Wilkin counties.
According to the authority, Plan B will ensure less frequent project operations and reduce the impact to organic farms by almost 90% t from an estimated 2,900 acres to 300 acres.
DNR on December 27 received the permit from DNR. However, the project costs have risen as a result of the revisions. Shockley noted that the authority is currently looking for additional state and federal funding due to recent changes recommended by the task force. Those costs according to the authority include:
- $750 million from the federal government ($450 million existing/$300 million requested)
- $870 million from the state of North Dakota ($570 million existing/$300 million requested)
- $1 billion from the local sponsors funded through existing sales taxes
- $86 million to be requested from the state of Minnesota. ($43 million for continued work in-town to pay for Plan B changes in MN and another $43 million for project work)
Shockley noted that the Minnesota and North Dakota legislatures are currently exploring legislative fixes that could mitigate the changes in cost. The North Dakota Legislature earlier this month allocated another $133 million for the diversion, according to local media. If the measure is approved, the project would still need roughly require an additional $300 million to get over the line. Sales taxes in the city of Fargo and Cass County will contribute $1 billion.
Sen. John Hoeven, R-N.D. in February of this year said that the increased federal funding won’t require additional congressional authorization. He noted that a public-private partnership will need to be renegotiated before the project can move forward.