Permanent Agreement between Member Entities of Diversion Authority Considered; Minnesota Representation Doubled

Agreement image_300Diversion Authority members are considering an amendment to the existing Limited Joint Powers Agreement which will serve as a permanent agreement between member entities, as construction of the FM Area Diversion Project draws nearer. The proposed agreement also doubles Minnesota’s representation on the Diversion Authority.

The agreement is needed to enable implementation of the Diversion Project. It establishes duties, responsibilities, and obligations regarding the Diversion Project among the member entities, including:

  • City of Moorhead
  • City of Fargo
  • Clay County
  • Cass County
  • Buffalo-Red River Watershed District
  • Cass Count Joint Water Resource District

Why is a Permanent Agreement Needed?

The new JPA would repeal and replace the former agreement in entirety, and needs to be fully approved prior to the signing of a Project Partnership Agreement (PPA) with the U.S. Army Corps of Engineers.

The Limited Joint Powers Agreement established by the Diversion Authority in 2011 was limited in the sense that it had an “end date”. As written in that agreement:

“It is the intent of the members that this agreement will terminate on or before the execution of the PPA.”…Article XIII of Limited Joint Powers Agreement

The PPA is scheduled to be signed in July in order to meet the Corps schedule for utilizing 2016 federal construction funds.

Maximizing Efficiencies

The new JPA would allow member entities to work together, avoid duplication and maximize efficiencies. It would provide clear procedures for governance, resolve technical issues (financial, bidding, cost share, land acquisition, etc.), and add an Executive Director position.

Under the JPA, the Diversion Authority would become a policymaking and financial clearing house for the Diversion Project. The JPA provides a roadmap for construction, which includes planning for Public-Private Partnership (P3) financing.

Greater Participation

The new JPA would create greater participation on the Diversion Project by:

  • Increasing the number of Minnesota members from two to four
  • Establishing a rotating Chair of the Board
  • Establishing a Vice Chair of the Board from a different state as the Chair
  • Adding a seat for membership from upstream interests
  • Adding an additional seat on the Diversion Authority for the City of Moorhead
  • Adding a new seat on the Diversion Authority for the Buffalo-Red River Watershed District

Cost Share

Under the JPA, the Diversion Authority is expressly assuming risk that Minnesota may not fully fund or provide appropriations for the Minnesota Member Entities’ share of Total Project Costs. In this situation, the City of Moorhead cannot obligate the State of Minnesota to provide funds.

Minnesota members’ share is capped at $100 million, but no Minnesota Member Entity will be held liable for non-appropriations by the Minnesota Legislature. There is no cap on North Dakota members’ share.

The Corps of Engineers’ share is capped at $450 million.

What If a Member Entity Does Not Approve the JPA?

In legal terms, any Member Entity that does not approve the JPA will be deemed a “non-party” to the JPA. In effect, that entity would no longer be a Member Entity of the Diversion Authority and, in technical language, becomes a “Former Member Entity”. A Former Member Entity’s position on the Board would be redistributed to Member Entities in the same state.

Timeline

With signing of the PPA scheduled for July, Diversion Authority members are being asked to suggest any changes to the JPA, or provide other comments, by the end of March, with approval by all members being requested by late April.

Additional Downloads

Details on the information to be included in the JPA, which is currently being drafted, are available in the following documents, which have been posted on FMDiversion.com:

Presentation on Draft Joint Powers Agreement

JPA Summary Outline

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