Cass County Joint Water Resource District Missing $25.5 Million in Vendor Details

Over the past several years a common question seems to resurface when it comes to the spending spree relating to the Fargo Dam and FM Diversion Authority project. When huge sums of taxpayer dollars exchange hands, all eyes are on those persons making decisions on who, how and the amount of the transaction.

It’s easy to assume the worst and hardly a month goes by without hearing a theory that people close to the Fargo Dam and FM Diversion Authority money train are somehow siphoning off funds for their own gain, or offering preferential treatment on contracts and buyouts.

One of the more recent rumors is that Fargo Dam and FM Diversion Authority (DA) members are receiving up to $150,000 year to serve on the board. Had I not heard it from three different sources, allegedly close to a DA member, it probably would not have piqued my interest.

The easiest way to resolve the question is look at the books…, which has been met with resistance over the course of 2015.

In April 2015, I began a more concerted effort in exploring the transactions connected to the Fargo Dam and FM Diversion Authority project. My April 2015 request began with an email to Cass County Auditor, Mike Montplaisir, but was met with a certain amount of finger pointing. Cass County administrator, Keith Berndt, made a very professional effort to facilitate my request, however, Rocky Schneider, AE2S somehow stuck his nose in the matter and began providing/filtering information that seemed to contradict what had been provided by Keith Berndt.

A few more email exchanges took place requesting more vendor detail which Rocky Schneider, AE2S, eventually sent in early June 2015.

Upon reviewing the information it was very apparent that the Cass County Joint Water Resource District was acting as in intermediary in the handling large sums of Fargo Dam and FM Diversion Authority funds. I requested additional details on CCJWRD expenditures in June 2015 and nothing came until I pressed the matter further in mid December 2015 and CC’d the North Dakota Attorney General.

FINALLY!! December 23, 2015 I received and email from Cass County Water Resource District Secretary-Treasurer, Carol Harbeke Lewis.

At the time of my request the primary question was what made up the $105,267,376.30 approved by the Cass County Joint Water Resource District report at the end of November 2015?

Here are the Excel ledger files that were received:

• CCJWRD Contract Amounts – 12.21.15 Information Request
• CCJWRD Expense – 12.21.15 Information Request
• DIVERSION EXPENSES
• IN TOWN LEVEE EXPENSES
• OXBOW COUNTRY CLUB EXPENSES
• OXBOW-HICKSON-BAKKE EXPENSES

There are three basic ways money is viewed by the Fargo Dam and FM Diversion Authority:

Approved Contract/Invoice Amount = Receipts, PO’s and Contracts Approved by the Board
Liquidated = What Has Been Paid
Outstanding Encumbrance = What Is Still Owed on Approved Contracts

Upon opening the CCJWRD Contract Amounts file reflecting the nearly $105.3 million in question the vendor detail indicated CCJWRD for all vendor entries.

So I move onto the CCJWRD Expense file to see how and what was paid and again all vendor details point to CCJWRD with payments totaling nearly $73.3 million.

There is no question the CCJWRD received taxpayer funds from Fargo Dam and FM Diversion Authority…, so why the lack of transparency?

These are taxpayer dollars, not criminal enterprise, so why use the CCJWRD as an intermediary for placement, layering, and integration as is done in money laundering schemes?

Which brings us to the remaining four files provided by CCJWRD. Finally, some unique vendor detail and quasi descriptions on what the funds were used for.

Seems simple enough…, until a person tries to reconcile

DIVERSION EXPENSES, IN TOWN LEVEE EXPENSES, OXBOW COUNTRY CLUB EXPENSES and OXBOW-HICKSON-BAKKE EXPENSES to the CCJWRD Contract Amounts or CCJWRD Expense files. There are no specific dates, check numbers don’t match up, project number or PO’s don’t seem to coincide and the $ 79,770,630.18 grand total for all four detailed files does not match the $ 73,298,271.38 amount indicated as paid by the CCJWRD.

So aside from the $6.5 million dollar discrepancy within the files provided by the CCJWRD, there are no vendor details showing who will receive the remaining $ 25,496,746.12 that makes up the balance of the $ 105.3 million contracts in question.

Delving deeper into the expenditure files from the CCJWRD provided some insights on who some of the biggest vendor recipients are and how the single line CCJWRD district entry in the Fargo Dam and FM Diversion Authority Cumulative Vendor Payment report is preventing preventing transparency in the overall process.

For example, routing payments via the CCJWRD to the following six vendors makes it difficult for the average taxpayer to see the actual contract totals being approved and monies directed towards these firms.

As of November 30, 2015:

Download: CCJWRD Vendor (greatest to least) – Excel
Download: CCJWRD Vendor (greatest to least) – PDF

The $617k combined total for AE2S is rather misleading because $567.9k is indicated as DPAC (Diversion Project Assesment Committee) related…, so where or how is AE2S being paid for the rest of their involvement in the overall project. The remaining $50k entry seems very implausible for years of work on the project. Is AE2S being paid by another vendor acting as another layer of intermediary to conceal taxpayer monies directed toward the AE2S firm?

If so, then former Fargo city administrator, Pat Zavoral, currently with AE2S, could unwittingly provide sensitive insight and information on how to protract government contracts which could reap untold millions for AE2S.

So let’s get back to the allegation that Diversion Authority members are being paid upwards of $150,000 a year to serve on the board.

Currently, the books DO NOT support that allegation. That being said, it is not uncommon for governmental entities to pay per diem payments to members attending meetings or serving on boards. Those records would be public information and any taxpayer could contract the governmental entity and request that information.

As to the allegation that some are somehow siphoning off funds for their own gain, or offering preferential treatment on contracts, the books provided by the CCJWRD and/or Fargo Dam and FM Diversion Authority are…, in short…, a mess. A cursory look at the books cannot support or refute the allegation of malfeasance. That is not to say a more in-depth audit by a qualified firm, without ties to project proponents that could influence an auditor, couldn’t dig up more facts…

One thing is for certain. The greatest champions of the project are laughing all the way to the bank because taxpayers are generally too lazy or timid to hold “officials” accountable for their actions.

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