John Shockley presents diversion authority resolution information.

county commission

Karen Newman 

John Shockley, on behalf of the FM Diversion Authority, appeared before the Clay County Commission, to request approval for the Clay County Pledge Resolution 2021-2024 for Operation and Maintenance for the DF Diversion project.  The board unanimously approved the resolution after prolonged discussion.

 Shockley opened by saying, “None of the Minnesota entities are being required to pay capitol out of local taxes or special assessments. I just want to make that abundantly clear. For any of the capital costs, the resolution authorizes the Diversion Authority to enter into a WIFIA loan.  WIFIA stands for Water Infrastructure Finance and Innovation Act. The WIFIA loan is $569 million.” Shockley cited the advantages for the Diversion Authority to enter into the WIFIA loan are:

·         Treasury rates at about 1.59% interest

·         46 years loan

·         Five years to draw down, five years before debt service begins, 35 years for payment

Shockley explained that the resolution authorizes the Diversion Authority to enter into State Revolving Fund (SRF) loans which provide low interest loans to improve water and sewer infrastructure while protecting public health and the environment. The SRF is $81.6 million. The resolution permits the Diversion Authority to enter into a Master Indenture of Trust Instrument with the Bank of North Dakota as trustee.  The bank will take all of the sales taxes and pledge revenues and apply them to monthly payments on the outstanding obligations. He said, “It is a transparency issue.  If you have a professional administering it, with this large of a transaction, having a trustee in place is really important.”

Shockley affirmed that Clay County will not be issuing any debt as part of the project, “Whatever the Diversion Authority is doing for debt can never be counted as a debt of Clay County or Moorhead.” The resolution calls for the Minnesota entities to pay 2% of operation and maintenance of the project. It is estimated that the annual share for Clay County and Moorhead’s share of operation and maintenance will be about $70,000-$200,000 to be split between the two entities. The split has not been determined yet, but Commission Chair Kevin Campbell affirmed that Clay County government and Moorhead have already begun discussing the prospective split.

In response to requiring affected areas in the southern county to pay for damages, operations and maintenance, Campbell said, “It is our board’s intent that the people in the southern part of the county would never be billed for operations and maintenance if their property is affected.  Shockley added that the diversion authority will be paying for insurance policies to mitigate losses to farmers and business owners negatively affected by the diversion.

Commissioner Jenny Mongeau explained why she voted for the resolution, “It’s no secret that I have been quite critical of the diversion and to the plan and its effect that it will have on southern Clay County. When I was appointed to the governor’s task force, we gathered and heard all the complaints and the concerns and really took into account the stories from affected citizens in that area.

She added, “I will support this today.  The reason I will do that is because O and M [operation and maintenance funds] will go to make whole those who are being affected.  There is a need for flood protection for the metro. I understand that.  The plan has been modified so that there will be less effect on those in southern Clay County than before approving this allows us to make sure that farms can access the insurance that you have talked about.  Businesses will be able to reach out and receive the benefits that you talked about.  It also makes sure that the cemeteries are cleaned up. It makes sure that the land is cleaned up so that farmers can continue their livelihoods.”

She concluded, “I think that this board should consider some kind of resolution in the near future that even after this board is gone, we will not burden those affected with any of fees to go into O and M. I would support that…we will address the needs of those affected and make them whole going forward.”