How the Diversion Is Being Funded

The total cost of the FM Area Diversion is being covered by the federal government, state governments of North Dakota and Minnesota and local funding through sales taxes.

Cost Sharing Breakdown

To understand how the project is being paid for, it’s important to understand the difference between funding and financing.


Funding, such as appropriation and grants, does not need to be paid back.

Federal Appropriations

$750 million

This amount has been approved through the signing of the Project Partnership Agreement with the U.S. Army Corps of Engineers

Of the $750 million, $437 million was allocated by the Infrastructure Investment and Jobs Act of January 2022

State Grants

North Dakota: $850 million

North Dakota provided $435 million from a state Legacy Funds bonding package and $415 million in State Water Commission funds.

Minnesota: $86 million

The City of Moorhead contributed $40 million through the City of Moorhead and Clay County added another $46 million.

Local Revenues

$1.514 billion

Local residents overwhelmingly approved multiple sales tax initiatives to fund the FM Area Diversion, including payments during construction and short- and long-term debt payments.

In the City of Fargo, voters approved City 3-21 Sales Tax of 0.5% and City 3-22 Sales Tax of 0.5%. Fargo also dedicated 0.25% of the City 3-20 Sales Tax to the FM Area Diversion. Additionally, Cass County collects a 0.5% sales and use tax (County 2010-2 Sales Tax) that will contribute at least 94% of what’s collected.


In addition to the funding noted above, the FM Area Diversion Comprehensive Project relies on financing, such as loans, that will be repaid over time using the sales tax revenues:

  • The U.S. Environmental Protection Agency issued a $569 million Water Infrastructure Finance and Innovation Act loan. The low 2.08% interest rate on the loan will save area taxpayers about $438 million over the life of the loan.
  • The North Dakota Public Finance Agency issued about $55 million in State Revolving Fund loans.
  • U.S. Department of Transportation Private Activity Bonds (PABS) provided $280 million for the transportation elements of the project crossing the stormwater diversion channel.

The P3 contract relies on milestone payments made during construction. After substantial completion of the Stormwater Diversion Channel, a series of availability payments will be made over the course of a 30-year period for maintenance

Operations and Maintenance Funding

The MFDA established an ongoing O&M Funding Program that will be funded by excess sales and tax revenues, an annual maintenance district levy, and stormwater maintenance fees from Minnesota member entities. The program also will fund any unforeseen mitigation needs that may arise during operation.

Questions About the Project?

Check out a list of frequently asked questions.