Mary Scherling Deceptive About Fargo Diversion and P3 Funding

“If the challenge is we have to convince everyone in that community, it’s impossible. They need to be leaders. They need to be able to stand up and say I believe this project will not harm us, and say it with authority,” – Jeff Volk, CEO, Moore Engineering June 14, 2009 (read more…)

Nearly one decade ago, Jeff Volk (CEO, Moore Engineering) uttered those words of advice to local officials which opened the financial spigot and poured millions into his firm for activities relating to the FMDA (Fargo Moorhead Diversion Authority) project. The problem is, the proposed FMDA project financially and socially harms people upstream, downstream and within the project footprint.

The FMDA is in full on propaganda mode still trying to sell Fargo’s development plan disguised as flood control. Mary Scherling’s April 29, 2019 letter (read more…) to the editor was drafted for what reason – if only to generate “headlines” and “spin” for the contentious project that is losing support faster than it is passing any sensible financial viability test.

Former ND Governor Ed Schafer’s email to select legislators offered a glimmer of truth in the constant din of disinformation that is spewed by FMDA project. It upset the status quo of project proponents and the FMDA refuses to admit the enormous debt they are willing to mire the FM metro within ~ causing long term economic headaches for property owners.

Mary Scherling’s indoctrination letter is at face value a series of prevarications that offer very little substance.

What speaks volumes is what is intentionally excluded from the narrative and the news.

 
Here are Facts that Mary Scherling Omitted:

The proposed FMDA project does not provide “regional” benefit. The project footprint is approximately 261 square miles and it excludes permanent flood protection for all entities outside the jurisdictional boundaries of the FM metro ~ it is Fargo’s development plan disguised as flood control.

 

Here are Facts that Mary Scherling Omitted:

The MN DNR issued a “conditional” permit with 54 conditions that must be met before the proposed project may be constructed and become operational.

Minnesota Statutes Section 103G.311, upon the filing of a valid contested case hearing, the order issuing the permit is no longer final, and the permit is put into abeyance and ceases to be valid.

The Buffalo Red River Watershed District, City of Comstock MN and City of Wolverton MN have all filed a contested case rendering the “permit” invalid under Minnesota law.

 
Here are Facts that Mary Scherling Omitted:

The federal government has not appropriated any money through congress for the proposed project.

 
Here are Facts that Mary Scherling Omitted:

Chief Judge Tunheim has allowed 5 limited items to proceed.

“Accordingly, should the circumstances change once again, or should Defendants overstep the relief granted here, the Court will entertain any future motions by the DNR or the JPA which seek to reinstate the preliminary injunction in its entirety or to enjoin specific aspects of the project.” – Chief Judge John R Tunheim April 8, 2019

Perhaps Mary and the rest of the FMDA ilk should have read Chief Judge Tunheims’s decision a little more closely. It certainly doesn’t sound like the GREEN LIGHT Mary has suggested ~ but a rather very fine line to walk…

 
 

Here are the 5 limited activities that Chief Judge Tunheim allowed on April 8, 2019: (read decision…)

The Court modifies the September 7, 2017 preliminary injunction [Docket No. 530] to allow Defendants to:

a.	Manufacture components and begin construction of the Diversion Inlet Structure;
b.	Manufacture components and begin construction of the Wild Rice River Structure;
c.	Commence the Public Private Partnership process for the Diversion Channel and Associated Infrastructure element of the Plan B Project in North Dakota.
d.	Begin construction of the Western Tieback; and
e.	Undertake the requested non-construction design and mitigation work in North Dakota and Minnesota.

 

 
Here are Facts that Mary Scherling Omitted:

The North Dakota State Legislature denied Fargo’s request for $300 million in funding during the 2019 Legislative session.

 
Fargo was initially to receive $133 million, but Fargo exerted political pressure and encouraged a DO NOT PASS vote in their failed efforts to secure the entire requested $300 million. Additionally, ND Gov Doug Burgum suggested that he might veto the bill if Fargo wasn’t given full funding – which essentially held ALL WATER PROJECTS in North Dakota hostage in an effort to benefit Fargo.

It’s the same old Imperial Fargo – Imperial Cass arrogant politics…

 
Here are Facts that Mary Scherling Omitted:

Fargo has not taken possession of any the funding referred to above. The $180 million in North Dakota funding won’t be fulfilled until 2029 with previous funding requests coming over the next 3 bienniums. The $300 million federal portion has not been appropriated through congress and is not “additional” funding. It does, however, have the potential to replace $300 million of the $400 million that was negotiated away in 2015-2016 in Fargo’s impulsive obsession to qualify for the elusive P3 funding for a much lower cost estimate (read more…).

 
Here are Facts that Mary Scherling Omitted:

30-90 days…? The FMDA has had 10 years to formulate a legitmate game plan and the best they can offer is “we’ll see in 30-90 days”..?

The FMDA has had ample time to negotiate a viable agreement with upstream and downstream property owners…, but the FMDA is “tone deaf”.

Currently, Fargo has not secured the entire $2.75 billion to fund the proposed project. The FMDA financials indicate around $552.2 million in funding revenue as of March 31, 2019 and approximately $468.5 million in expenditures thus far.

Even then, the FMDA financials are sketchy at best. The FMDA claims to have an $83.7 million net position, however, they failed to include the $66.2 million in contract obligations they have approved and the $150.25 million in Wells Fargo loans held off book. As of March 31, 2019 the FMDA project is running a $ -132.7 million deficit.

There are still around 1,000 property acquisitions needed, 3 concrete dam control structures, multiple river crossings with untested aqueducts and 36+ miles of earthen dam and diversion channel to construct.

The city and county sales tax measures have under-performed by nearly 9 percent since 2014.

The sales taxes that run until 2085 were based on a $2.1 billion cost estimate (2016) and will fall miserably short $2.75 billion estimate and don’t factor in any cost over-runs and have already been outpaced by inflation.

At present, the FM Metro area has over $1.5 billion in General Obligation and school debt and may experience further credit rating downgrades relating to growth in debt and fixed costs ratios and stagnation or declines in the city’s tax base signaling a reversal of the city’s past strong economic trends.

Fargo has not identified any P3 funding source domestic or foreign that will finance the proposed project.

Projects that involve the USACE historically have exceeded the initial cost estimates, with the most recent being the Olmstead Dam in Ohio (read more…), which is nearly 400 percent over the initial cost estimate of $775 million at $3 billion (Feb 2018).

If the same were to happen on the FMDA project, it could potentially push the initial $1.78 billion FMDA project to $7.12 billion.

The FMDA project is essentially broke before it begins.

How on earth does the FMDA expect to qualify for P3 funding – unless their intention is to lie…?

 
Here are Facts that Mary Scherling Omitted:

On April 9, 2019 – Mary Scherling and other FMDA representatives openly denied fair compensation to upstream property owners – telling landowners that they would not make farming operations whole and avoided any inference that would offer replacement cost to farming operations in rebuilding as a result of impacts and relocation caused by the proposed dam and diversion project.

Let’s put it in a different context.

If YOUR entire life savings and investment portfolio were arbitrarily devalued by 50-90 percent so that the fund manager could reap the profits for themselves and their buddies – would that be a problem? Because that’s EXACTLY what these arbitrary FMDA decisions have done to property owners upstream.

When the FMDA and their ilk intentionally omit pertinent information and actively create false narratives to hide the truth – are they truly serving the public or their own financial self interest(s)?

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