Luick, ND legislators request F-M Diversion audit

North Dakota’s Water Topics Overview Committee is requesting an audit of the Fargo-Moorhead Diversion. State Sen. Larry Luick, R-District 25, is among the legislators concerned that issues affecting upstream residents aren’t being addressed.

With a 13-1 vote, the North Dakota Water Topics Overview Committee is requesting an audit of the Fargo-Moorhead Diversion.

The $2.75 billion project has been the subject of litigation between upstream and metroplex North Dakota and Minnesota communities along the Red River of the North since 2012.

“My concern is that they haven’t addressed some of the big problems that we have in Richland County,” said North Dakota state Sen. Larry Luick, R-District 25. “What about the farmers and business owners that are going to be negatively affected by this? What are some of the ways that we’re going to fix the road damages, loss of tax revenue and loss of available funding to school districts? How are they going to handle the crop losses? How are the farmers getting compensated?”

The committee pushed back against Diversion Authority Executive Director Joel Paulsen, Sen. Luick said. Paulsen, who spoke Tuesday, Dec. 10 before the committee, said he and Luick had “a good discussion” about potential impacts upstream.

“I think the senator wanted more answers than I could provide because we’re still working out the specific strategies involved,” Paulsen said.

That line of reasoning’s not good enough for Luick.

“From day one, we were told ‘That was all figured out, you just need to ratify this,’” Luick said. “Every time it was brought up in a meeting in the last eight years, ‘We’ve got it all figured out.’”

Legislators have heard the same story for years, while the diversion authority has kicked the can down the road, Luick said. As far as he was concerned, Paulsen was another mouthpiece following the same procedure.

“There’s a new pawn in there, another mouthpiece (the Diversion Authority) has, telling us whatever we want,” Luick said. “Well, we weren’t told all of this before. There were different numbers. ‘Oh, all of that can just go away. Believe what I have to say now.’ That’s not the way we’re going to look at this.”

North Dakota state Rep. Michael Howe, R-District 22, voted against the audit recommendation. State Sen. David Hogue, the committee’s vice chair and R-District 38, was absent. State Rep. Tracy Boe, D-District 9, and Rep. Denton Zubke, R-District 39, were also absent.

The proposed audit is being referred to North Dakota’s Legislative Audit and Fiscal Review Committee. In February 2019, Sen. Luick said, he had talked to North Dakota State Auditor Josh Gallion about the possibility of a diversion audit.

“Because of the jurisdiction issue of Minnesota and North Dakota being involved, there was thought that the FBI would need to be involved,” Luick said. “I had brought this to the (MnDak) Upstream Coalition, which had been mulling over it all this time now.”

In addition to the MnDak Upstream Coalition, the Richland-Wilkin Joint Powers Authority opposes the F-M Diversion. Earlier in December, the authority wrote an editorial calling for the State Auditor’s office to examine the Cass County Joint Water Resource District, North Dakota.

There is the possibility of an audit from either his office or an independent firm, Gallion said.

“Certainly, we are happy to share any information if anyone would care to have that shared with them,” said Cass County Commissioner Mary Scherling, outgoing chair of the Diversion Authority Board.

The financial plan was developed by the firm of Ernst & Young, Scherling said. The F-M Diversion has been included in and will continue to be included in several audits, she and Paulsen said.

One audit is annually performed by the city of Fargo, the project’s fiscal agent. Because the project will use federal funds, Paulsen said, it is also required to receive audits from the government.

“I don’t view the audit as something terribly concerning. This is part of a large project and this is how they do things,” Paulsen said.

Luick said he hopes for an in-depth fiscal review and fiscal audit, to track “where all this money has gone.”

Richland County Commissioner Sid Berg, who has twice publicly called for the diversion project to be audited, said he was glad about Tuesday’s vote.

“If the state’s going to give (the Diversion Authority) money, there should be a forensic audit of their books,” Berg said. “I think we’ll see more of what’s going on with the Diversion Authority, a bit more on how its operations are being done.”

The F-M Diversion could have been completed by spring 2020 had it not been for its delays, Scherling said. Moving forward with the project is one way to cut rising costs.

“It has been stated many times that the goal is to delay this and drive the costs up as much as possible,” she said.

Scherling is remaining with the Diversion Authority Board, although Fargo Mayor Tim Mahoney will serve as chair beginning on Jan. 1, 2020.

“This project is massive,” she said. “It’s never going to be, ‘Okay, just flip the switch’ and we’re moving on. There’s always going to be bumps in the road to deal with — people, farmsteads, many different aspects of financing, the weather. There are a lot of different things we have to confront in the next few years.”

Sen. Luick said he was surprised by the “overwhelming” vote requesting an audit of the F-M Diversion.

“There is more and more concern about this whole doggone thing than there was before,” he said. “More people are understanding that this is more of a boondoggle than we want to get into. We can protect Fargo from flooding, but it doesn’t have to have this kind of a mess.”

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