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FM Diversion and Dam Increases national debt

Taxpayer Tolerance Wearing Thin for T-Times

Vote NO

We taxpayers are an amazingly tolerant lot. This whole F-M diversion thing has certainly borne that out. We have been and continue to be raked over the financial coals and we can’t seem to muster even a little outrage. But perhaps that’s because we tend to view the abuses of our trust as individual and isolated incidents. But what if we string a few of them together?

Let’s start with the original plan approved by the USACE (Corps of Engineers). This diversion ran through Minnesota and was both affordable and effective in protecting the Fargo that existed at the time. But that was the problem: Fargo had designs on flood plain land to its south. So local ‘leadership’ proposed a plan for the North Dakota side of the river, a mammoth project that eliminates something like 35 square miles from the flood plain and opens it for development.

The Corps quickly bought into this idea. Hey, when you have a client like North Dakota, rich in oil money at the time and able to pay, your ethics are negotiable! Of course, this assumes that you have some to begin with, but I digress. So the diversion authority (DA) launched a push for a county-wide sales tax, to be dedicated to flood control work, voted on and passed in November of 2010. Withheld from the taxpaying voters prior to the vote was the DA’s decision to store massive amounts of water, hundreds of thousands of acre-feet, upstream from Fargo. The DA had been working on the ‘old switcheroo’ (trading downstream impacts for upstream impacts) for months prior to the vote but waited until a few days after the passage of the county tax to reveal their plan. Yep, the vote on the county tax was a fraud. But we are a tolerant group so no one was held to account in any way, shape or form.

So, what about the folks who live upstream, who will be flooded by this new lake? Well, these rural folk are to be pushed out of the way or, where possible, ring diked, and the farm land is to be declared a floodway, where nothing can ever be built again. Any structures subject to more than three-feet of flooding was originally to be bought out and removed. But this caused trouble for the Kindred school district as the communities of Oxbow, Hickson and Bakke were subject to buyout. The diversion authority lobbied the Corps to approve a massive ring levee around the communities as an acceptable alternative to buyout. They argued that it was cheaper to move homes and build a ring levee around the communities than to buy everything out ($65 million vs. $70 million).

As all things government tend to go, incompetence and greed have driven the cost of the Oxbow project well over budget. To purchase Oxbow’s cooperation, the DA did just that, lavishing extraordinary sums on the homeowners it needed to relocate and on the private country club, which it is rebuilding in near total. The DA attributes the extravagance to federal guidelines that turned the country club into a veritable Club Fed. The latest projected cost of all this has risen from the original $65 million to $126 million, and even that number is likely too low. This lavish spending momentarily ruffled the feathers of a couple of Fargo commissioners but nothing really came of it. We are, after all, a tolerant lot.

Sales tax revenues don’t secure bonding very well so the next step by the DA was to set up an assessment district to the tune of $725 million to facilitate bonding. This was brought to the voters but was constructed (rigged) by the DA in such a way as to ensure that it could not lose. Even if everyone had voted ‘NO’, all that was needed to pass the assessment was the favorable votes of the Cass County and Fargo city commissions, both of which voted in the affirmative well before the public voting deadline had passed. Again, the public vote was turned into a fraud and the DA now has an open $725 million line of credit from the taxpayer, constituting an encumbrance on their individual properties. Though the DA lost the popular vote, little has been said of it since. Yes, we are a tolerant group.

Still, getting a project partnership agreement with the Corps and a funding commitment from the same was going to be tough, given the project’s relatively meager benefit/cost ratio. The original project funding distribution was roughly as follows: $850 million federal, $450 million North Dakota, $450 million local and $100 million Minnesota. Enter the P3 (private-public partnership) proposal. P3 was sold as the best idea since sliced bread: it’s magical! So magical, in fact, that the federal share under P3 drops from $850 million to $450 million. No, this isn’t money saved but money shifted from federal share to local share (that would be us). So the DA negotiated the local share up an extra $400 million to get this project started. That seems reasonable and tolerable, right?

At the same time the DA negotiated the public-share increase, it was announced that the overall project cost had increased another $351 million. This, again, is an increase to the local share so, in a matter of days, our local obligation to the project increased $751 million, from $450 million to $1,201 million (aka $1.201 billion). This was little mentioned by the DA’s local mouthpiece, WDAY/The Forum. Guess it wasn’t all that newsworthy when the local cost share jumped by over 166%. It’s just business as usual here in Little Chicago. Meanwhile, in a Forum article dated August 22, 2016, it was revealed that the overall cost, with interest, is expected to hit $3 billion. A billion here and a billion there, pretty soon we will be talking real money here!

The DA’s bullying tactics are that of legend. No abuse of the public trust is too big for this group: they are the DA Mafia (DAMafia). Just ask Minnesota’s DNR and its governor, Mark Dayton. See, Minnesota law requires that the proposed dam on the red river is permitted, something that has not yet happened. And the DAMafia has been acting as though they don’t need no stinkin’ Minnesota permit. Editorials in the DAMafia’s mouthpiece, The Forum, have repeatedly ridiculed and discounted Minnesota’s concerns that this project conform to Minnesota state law and meet its standards. They are treating Minnesota in much the same way that they treated Bakke and Hickson, with a heartfelt, single-digit salute.

As you go to the polls to vote on the sales tax extension, just remember that the financial projections and assurances that this project is fiscally manageable come to you from the same folks who missed the Oxbow project’s costs by half. The Oxbow project is nothing exotic, like the aqueducts and gated dam structure that are components of the proposed diversion. This is simple urban street and residential construction with some high-end landscaping involved, yet they appear to have been only about half right in the estimate that drove the Oxbow project decision.

The DAMafia has already spent something like $318 million and hasn’t turned a shovel on the diversion proper. And the State of North Dakota has ‘Yuge!’ financial problems. If their estimate for the diversion project is as accurate as the one for Oxbow, this diversion will cost billions more than currently projected and every dollar of cost overrun will be a local obligation, unless the state’s oil industry can rebound and Bismarck once again can afford to feel generous. Question: Is city and county bankruptcy also tolerable? Vote wisely, my friends!

In the meantime, before you vote, drive out to Oxbow and give it a look see. Check out the golf course and that new clubhouse that you have built. Take in the new homes, most of which you have built or are building at values of double, triple and more of those homes that they replace. Observe the crews rebuilding the rest of the original course, matching it to the new nine holes to the south. These beneficiaries of your largess appreciate the fact that you’re so darned tolerant.

Rich G. Etricher

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