Red River Valley Water Supply Project

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The North Dakota Legislature’s Legacy Fund Earnings Committee members dedicated an evening and the better part of a day in mid-November to listening to proposed ways to spend the earnings of the State’s Legacy Fund. Representatives of the Red River Valley Water Supply Project’s (RRVWSP) future users testified in front of the Committee chaired by the Representative Chet Pollert.

Eric Volk, Executive Director of the North Dakota Rural Water Systems Association, addressed the Committee, saying the emergency and supplemental water supply project comes at an additional cost to the rural water systems and participating cities. These costs are added on top of users’ existing water system costs, as the RRVWSP will not replace existing water plants or transmission infrastructure. Speaking in support of Legacy Fund earnings being allocated to infrastructure, including the RRVWSP, Volk reminded the Committee that the Legislature approved a 75-25 state-local cost share, rather than the requested 80-20 split, during the last session and did not include a loan program for the local share.

“This is why I am advocating for the use of Legacy Fund earnings to be used to fund water infrastructure projects. Using the Fund’s earnings to create a long-term, low-interest loan program is a smart way to reinvest Legacy earnings back into North Dakota. The projected interest earnings returned to the state for use by future generations on a 40-year, 2% loan is $135 million on an estimated $290 million original loan amount,” explained Volk.

 In addition to the interest returned to the State, Volk said creating a long-term, low-interest loan program would save taxpayers across the project service area over $500 million if they can avoid traditional bonding costs. “It’s a win-win situation for the State and for the 35 end users of the Red River Valley Water Supply Project that otherwise may not be able to afford this necessary emergency water supply,” said Volk.

Tom Erdmann, the Mayor of Carrington, spoke on behalf of his City’s need for the Project to remain affordable. “Specifically, it’s important the local share of the costs does not burden communities with smaller populations, such as Carrington. It is critical to each of the participating entities that the local share is feasible and sustainable to maintain long-term affordability on this multi-generational project,” said Mayor Erdmann.

He explained, “Carrington is located in a ‘sweet spot’ to utilize project water, as we lie just a mile from the pipeline route. As the project funding currently sits – without long-term, low interest loans available – Carrington and many other project end users are unable to afford tapping into that pipeline to meet our future domestic and industrial water needs.”

The Legacy Fund Earnings Committee has not announced plans yet for how the Fund’s earnings may be utilized. The next Committee meeting is planned for Watford City in early 2020.