Red River Valley Water Supply Project

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North Dakota’s 66th Legislative Assembly wrapped up the 2019 session after approving a $4.8 billion General Fund budget which includes support for infrastructure projects across the state. Garrison Diversion Conservancy District (Garrison Diversion) and Lake Agassiz Water Authority (LAWA) representatives made frequent visits to the State Capitol, in support of the Red River Valley Water Supply Project (RRVWSP).

“The legislative session feels like a marathon at times because there is so much to do in a short period of time. The legislature put a lot of focus on infrastructure this session which is very appreciated. Garrison Diversion is particularly thankful to Sen. Rich Wardner, Rep. Chet Pollert, Rep. Jim Schmidt and Sen. Gary Lee who are strong advocates for the Red River Valley Water Supply Project,” says Merri Mooridian, Garrison Diversion Administrative Officer and Deputy Program Manager of RRVWSP Administration. “We’re grateful to all of North Dakota’s lawmakers and the State Water Commission for their ongoing support.”

Here is a recap of the legislation that impacted the RRVWSP:

SB 2020 – State Water Commission Budget
Governor Doug Burgum signed Senate Bill 2020 (SB 2020), the 2019-2021 State Water Commission (SWC) budget, with $30 million for the RRVWSP and a cost share requirement of 75 percent state and 25 percent local. Representatives of Garrison Diversion and the cosponsor of the RRVWSP, Lake Agassiz Water Authority (LAWA), devoted a great deal of time talking to legislators throughout the session about the financial needs of the RRVWSP to underline the importance of affordability to the Project’s end users.

Representatives of the Project’s participating communities and water systems also took the time to contact legislators and provide testimony during legislative hearings to show their support for affordable financing. Garrison Diversion and LAWA originally requested $50 million and a 90 percent state and 10 percent local cost share from the SWC budget.

“We are currently adjusting the Project’s work plan for the next two years to accommodate a budget that is lower than we requested. However, we remain grateful the legislature supports the creation of a drought mitigation plan to serve half of North Dakota’s population,” says Duane DeKrey, Garrison Diversion General Manager. “We are also working on maintaining affordability for the 35 communities and rural water systems that signed up for the development phase of the Project. We are going to do everything we can to keep the project affordable for the smaller communities and water systems.”

SB 2020 also includes $13 million in carryover grant funds from the 2017-2019 budget for the RRVWSP.

SB 2015 – Office of Management & Budget
Senate Bill 2015 (SB 2015) passed with the inclusion of an amendment that allowed the RRVWSP to become eligible for the Bank of North Dakota’s existing Infrastructure Revolving Loan Fund program which has a maximum borrowing term of 30 years and an interest rate of two percent.  Prior to SB 2015’s passage, Garrison Diversion and LAWA were hoping two other bills would pass that included loans with a 40-year term at two percent interest.  

“It is helpful that the Red River Valley Water Supply Project is now eligible for Infrastructure Revolving Loan Funding. However, we will need to get creative to fund this project for the long-term in a way that keeps it affordable for all the Project’s users, especially the smaller water systems and communities,” explains Mooridian.

“The communities and water systems involved in the project are thankful for the legislative support received. One issue that needs to continue to be worked on in the interim is affordable financing. Without long-term affordable financing, some users will truly not be able to afford to participate,” says Ken Vein, LAWA Vice Chairman.

SB 2358 – Amendments to ND Century Code
Senate Bill 2358 (SB 2358) includes amendments to the North Dakota Century Code, related to the RRVWSP’s contract terms. Prior to the passage of SB 2358, municipal water supply contracts were limited to 40-year periods by state law. Since the RRVWSP is a multi-generational project that may need a financing package that extends beyond four decades, Garrison Diversion and LAWA supported the flexibility to extend contracts beyond 40 years to ensure payments are affordable.

“The Red River Valley Water Supply Project is projected to cost $1.16 billion. This emergency water supply will benefit generations to come, so it makes sense that we should spread out the cost to future beneficiaries of the Project to ensure affordability for everyone,” says Dr. Tim Mahoney, LAWA Chairman and Fargo Mayor.

SB 2358 also eliminated voter approval requirements previously included in section 40-33-16 of the Century Code. LAWA and Garrison Diversion are pleased with this decision because it was expected to cause confusion when it comes time to bond for project funding. 
Successful Legislative Session
“We received bi-partisan support in the House and Senate. We’re especially thankful for the legislature recognizing the need for and importance of the Red River Valley Water Supply Project,” says Mahoney. “However, long-term affordable funding was major a project need that wasn’t acquired this session. We need to keep this long-term, multi-generational project affordable.”

“Garrison Diversion and LAWA will be working hard in the legislative interim to convey the ongoing, crucial need for affordability. We sincerely hope that the next legislative session results in affordable long-term financing for the communities and water systems relying on the Red River Valley Water Supply Project,” says DeKrey.