Think about the last time you filled out paperwork for a home loan, car loan or home equity line of credit.
Generally speaking, the final lines before your signature read something like this:
“…the information provided in this application is true and correct and that any intentional or negligent misrepresentation contained in this application may result in civil liability, including monetary damages, to any person who may suffer any loss due to reliance upon any misrepresentation that I have made on this application, and/or in criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Sec. 1001, et seq…”
The FMDA (Fargo Dam and FM Diversion Authority) is falling all over itself to borrow money via P3 or PPP (Public Private Partnership) financing to advance Fargo’s development project disguised as flood control.
The term P3 or PPP (Public Private Partnership) has been thrown around as though it is the salvation to the beleaguered FMDA boondoggle.
In reality, the signing of the P3/PPP in July 2016 cost the taxpayers of North Dakota, Cass County and Fargo a significant chunk of change, which added around $400 million to the previous $924 million local share. Increasing the local and state share of the project to around $1.8 billion ~ “if” the project is able to remain on budget.
The sales tax extension to 2085 and the FM Flood Risk Management District NO. 1 exist because Fargo, via the FMDA and Cass county has a propensity to spend money they don’t have and manipulated the process to serve the development agenda. Even if the city and county sales taxes were combined with property assessments, they are projected to only cover around $1.4 billion, ensuring that Imperial Fargo – Cass will continue suckling from the state teat of North Dakota and strong-arming any and all legislators to achieve that end.
So what does this all mean?
Think again about the last time you filled out a loan application. The FMDA is actively pursuing P3/PPP financing while simultaneously borrowing money, without taxpayer consent, to keep the project alive. The FMDA is scrambling to refinance a portion of $150+ million in existing loans by July 2017 and need to generate a financial position to support their request.
Cited Source: June 2017 FMDA Packet
|424,830,717.09||Contracts & Invoices|
|-62,854,352.66||Outstanding Contracts & Invoices|
|-150,250,000.00||Well Fargo Loans (not approved by taxpayers)|
|-213,104,352.66||Outstanding Contracts, Invoices & Wells Fargo Loans|
|79,552,312.00||Net Position 5-31-2017 (cash & receivables)|
|-133,552,040.66||Outstanding FMDA Debt “AFTER” Liquidation|
So how is it possible for the FMDA to hold over $213 million in debt liabilities off their net position statement and over $150 million in non-approved loans via Wells Fargo completely off the FMDA books, which are messy if not outright cryptic?
If Wells Fargo were to “call” the FMDA loans today, the FMDA would be financially upside down by nearly 134 million. Which would be equal to a brand new FargoDome and a 2,704 space parking ramp.
Why would any P3/PPP lender with any common sense borrow money to a project that is already operating in the red, that is tied to a volatile sales tax and a property tax assessment that doesn’t come close to covering the local share? Is this neo-liberalism at its worst?
If you or I “massaged the books” to conceal debt obligation in order to qualify for financing or a better lending rate, it could land us in hot water. So…, why doesn’t the same apply to the FMDA, Fargo or Cass County?