Hoeven: RRV Flood Protection Has Strong Momentum, Working to Keep First-in-the-Nation Project Moving Forward
Senator Reviews Construction and Funding Progress with Army Corps Chief
FARGO, N.D. – Senator John Hoeven today reviewed the significant progress being made on the construction of the Fargo-Moorhead region’s comprehensive flood protection project with Lieutenant General Scott Spellmon, Chief of the U.S. Army Corps of Engineers. While discussing the project’s recent milestones, Hoeven stressed to Spellmon the need to maintain the project’s momentum and ensure the federal government continues to meet its funding commitments to the project. To this end, Hoeven highlighted his work as a member of the Senate Energy and Water Development (EWD) Appropriations Committee to:
- Secure increased Corps construction funding.
- The Senate’s Fiscal Year (FY) 2022 EWD funding legislation includes $246 million above the president’s budget request for the Corps’ construction account for flood protection projects.
- Hoeven advanced this increased funding level to help ensure the Fargo-Moorhead project is included in the Corps’ annual work plan.
- As a result of similar efforts in recent years, the project has received $310 million in federal construction funding to date, nearly half of the federal funding commitment of $750 million.
- Pursue additional Corps construction funding included in the Senate’s bipartisan infrastructure legislation.
- The bill included $2.5 billion for the Corps to construct flood mitigation projects, for which the Fargo-Moorhead region will be eligible.
“This flood protection project has a tremendous amount of momentum, having achieved two first-in-the-nation milestones earlier this year,” Hoeven said. “In particular, as a P3, the Red River Valley’s flood protection is serving as a new model for major Army Corps projects. That’s why it’s important to keep this construction work on schedule. In order to do that, the project needs $180 million in FY2022. The good news is that we are advancing two opportunities to secure funding for this critical flood protection project, both through the annual appropriations process and the bipartisan infrastructure bill.”
Today’s tour follows two first-in-the-nation milestones, which Hoeven helped announce in June, in the effort to build permanent, comprehensive flood protection in the Red River Valley.
P3 Partner Selection
This is the first major Army Corps’ project to utilize the P3 split-delivery model, which enables the project to be built more cost-effectively and on a significantly faster timeline. Compared to traditional construction delivery, the P3 model will save the project $330 million and 10 years.
Hoeven has worked to advance the Fargo-Moorhead project as a proof-of-concept for the rest of the nation, demonstrating a solution to help the Corps resolve its project backlog and build critical infrastructure in a more timely way. At the same time, the senator has worked to ensure projects that use alternative financing methods, like P3s, receive fair treatment during the Corps’ cost-benefit analysis.
WIFIA Loan Signing
This is also the first Army Corps project to utilize a Water Infrastructure Finance and Innovation Act (WIFIA) loan. Earlier this year, the project sponsors finalized their $569 WIFIA loan, which:
- Removes the risk of increasing interest rates and provides lower rates than other financing options.
- Allows the project sponsor to draw down funds as needed, enabling less debt to be carried earlier in the project.
- Provides flexibility in its payback schedule.
- Will save the project nearly $500 million over the life of the loan.
Hoeven initially secured a formal invitation from the Environmental Protection Agency (EPA) for Fargo-Moorhead to apply for a WIFIA loan in 2019, following his efforts to fund the program. The EPA’s invitation was a critical step, as they are limited through a competitive process. In addition, the senator worked with the EPA to expedite Fargo-Moorhead’s application and prevent delays that could have resulted from an interagency effort to standardize the WIFIA loan process.
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