701-566-9300The legislature’s Water Topics Overview Committee met on June 10 and continued to address significant water topics. The meeting agenda and video are available on the legislative website.
Legislative Council staff presented a Watershed Management Study -Interim Status Update summarizing previous testimony regarding assigning management authority for the waters of the state to the area located in the naturally occurring watershed, rather than assigning management authority based upon political subdivision boundaries. Legislative Council staff also presented an Interim Status Update for the Storm Water Projects Study and Wastewater Projects Funds Study summarizing previous testimony provided to the committee regarding the committee’s studies of funding for stormwater projects and establishing a wastewater project fund. The website provides significant information on these studies.
Reice Hasse, Director of the Department of Water Resources (DWR), provided a presentation on multiple topics. One topic was governance and finance of select regional water systems. Options recommended by the State Water Commission (SWC) consultant, Deloitte, ranged from keeping the current model with improvements to more SWC oversight to transferring ownership to the entities. (Video at 10:13 a.m.) The SWC has not yet made its recommendations for any options relating to the regional water systems. Another topic was the studies related to the state’s cost-share policy, including an evaluation of whether projected funding for water projects, in conjunction with the existing cost-share policy, will adequately address anticipated funding needs for water projects for the next 14 years. (Video at 10:21 a.m.) Despite the initial 14-year period and projections, DWR is now projecting $3.9 billion for the next twelve years in expected asks for the state cost-share for water projects. With the projected revenues for this time period, DWR is projecting a $1.7 billion shortfall. The Deloitte Model for DWR also reflects a $2.1 billion near-term shortfall due to forecasted water project needs through 2031.
Reice discussed Deloitte options or recommendations for resolving the shortfall throughout the next 12 years. These options, among others, include : 1) For replacement costs, adjust cost-share payments to 25%; 2) Institute state funding ceiling for Mouse River Flood Protection Project and Red River Valley Water Supply Project; 3) Leverage earnings from the Legacy Fund for $791 million to issue bonds to aid in funding those two projects; 4) Adjust cost-share percentages for high-priority projects to receive a 50% cost-share, medium 45% and low 40%; 5) Delay Moderate and low priority projects; and 6) Fully obligate $260 million in lines of credit. The SWC and DWR have not yet decided on the options or their recommendations.
Legislative committee members raised concerns or questions about reducing cost-share payments and the funding impact on water users with cost-share reductions. One legislator raised that one of the recognitions must be whether the State wants to push more of the cost back to the locals with a reduction in cost-share as a tax burden or user fees.
The SWC and DWR will be further considering the options and their recommendations to resolve the shortfall and other issues. The committee meets again September 17.