Hoeven: We've Got It – RRV Flood Protection Project Will Be the First P3 Major Public Works Project in the Nation

Senator Highlights Project’s Major Milestones, Including Completed $750 Million Federal Funding Commitment

FARGO, N.D. – Senator John Hoeven (R-N.D.) today outlined how the Fargo-Moorhead region is serving as an example to the rest of the nation with its first-of-its-kind flood protection project. The senator made the remarks at a roundtable discussion with Senator Amy Klobuchar (D-Minn.), leaders from the Fargo-Moorhead region and U.S. Army Corps of Engineers officials, during which he highlighted major milestones in the project’s development and the barriers that he worked to overcome to help achieve this progress. 

“With the $750 million federal funding commitment completed, we don’t have to talk about getting this project funded any more – we’ve got it,” said Hoeven. “This is the Army Corps’ first P3 project in the nation, and we’ve got it authorized and fully funded, with a WIFIA loan on top of that. The result is a truly first-in-the-nation project that’s demonstrated a new paradigm for building major public works.” 

Hoeven’s efforts have included: 

  • Working to pass 16 acts of Congress, including:
    • 9 legislative provisions, such as the project authorization in 2014 and a new construction start authorization in 2016.
    • 7 separate appropriations to fund the project’s construction.
  • Coordinating efforts across four federal agencies.
  • Working with Senator Klobuchar and the Office of Management and Budget (OMB) to secure a $437 million award for the project, which completes the $750 million federal funding commitment.
  • Advancing this as the first major Army Corps project to utilize:
    • The public-private partnership (P3) split-delivery model.
    • Water Infrastructure Finance and Innovation Act (WIFIA) loan.
  • Providing funding and flexibility to concurrently raise I-29 and begin excavating the Red River Control Structure to keep the project on schedule.
  • Helping renegotiate the Project Partnership Agreement to increase the federal funding commitment from $450 million.
  • Resolving the easement issue on lands purchased with Hazard Mitigation Grant Program (HMGP) funding, allowing the project to use an alternative route.

Completing the $750 Million Federal Commitment

Hoeven worked closely with Klobuchar and OMB to advance the $437 million award, having recently met with Acting OMB Director Shalanda Young and local leaders from the Fargo-Moorhead region to make the case for fully funding the project. Hoeven, along with Senators Klobuchar, Kevin Cramer (R-N.D.) and Tina Smith (D-Minn.), also raised this priority with Young in a letter sent in November.

Prior to this, Hoeven worked through his role on the Senate Energy and Water Development Appropriations Committee to provide increased funding for the Army Corps’ construction account. This helped ensure the Red River Valley flood protection project received funding each year through the Army Corps’ annual work plan. 

Advancing the P3 Model  

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. Accordingly, Hoeven has worked to advance the Fargo-Moorhead project as a proof-of-concept for the rest of the nation, while also ensuring projects that use alternative financing methods, like P3s, receive fair treatment during the Corps’ cost-benefit analysis.

Securing a WIFIA Loan

This is also the first Army Corps project to utilize a WIFIA loan, which was finalized by the project sponsors last year. By removing the risk of increasing interest rates, securing a lower rate than other options and providing flexibility in its draw down and payback schedule, the $569 million loan 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.