With no state bonding bill in three of the last four years, flood mitigation funding is unreliable

HENDERSON, Minn. — A day after the Minnesota River crested, grayish-tan muddy water still lapped the edges of levees and covered some roads in this low-lying river city.

Two of the main roads in and out of town flood nearly every spring, said Mayor Keith Swenson, and Henderson has been lobbying for nearly a decade for state funding to raise the road surface above the flood line.

Construction started earlier this spring. Then the Minnesota River flooded again, submerging the construction projects.

"They're dead in the water," Swenson said.

Lawmakers have traditionally passed large bonding bills — so-called because Minnesota borrows money to pay for public infrastructure projects — in even-numbered years, with smaller bills in odd-numbered years. To get one passed requires a 60% vote in the Minnesota House and Senate, a threshold that is becoming increasingly hard to reach.

There has been no bonding bill in three of the last four years.

Much of the money in state bonding bills goes to local governments, to fund projects like raising Henderson's roads. State borrowing also funds the Department of Natural Resources' flood hazard mitigation program.

The program "is totally reliant on bond funds," director Matt Bauman said. That means it's nearly impossible to predict how much funding the program will receive, and how much money it can send downstream to local projects.

"The need always exceeds the funds available, and since the funds available are variable, the ... amounts we are able to award in any given year are very variable," Bauman said.

Unfunded projects

The city of Waterville saw some of the worst of last week's flooding, and for years, Le Sueur County has been trying to get state bonding money for water retention projects upstream. The county's request did not make the DFL's final list of projects, said Le Sueur County Commissioner David Preisler — not that it mattered much this year.

"Of course, in the end, there was no bonding bill at all," he noted.

The county will keep asking, he said. He hopes the floods will remind legislators of the urgency of these projects.

That won't stop the price on those projects from rising, or the needs from growing.

In western Minnesota, the Red River Watershed Management Board asked for $57 million this year to fund seven northwest Minnesota flood mitigation and water retention projects that will improve water quality and reduce sediment flow in the Red River Basin.

Robert Sip, the board's executive director, said lawmakers asked the group to pare down their request to about $21 million before this year's bonding bill was scrapped.

Some of the projects, such as flood control work near Newfolden to store more water and remove the city from a flood plain, were partly funded last year. But the delay forces watershed officials to reconfigure construction schedules.

"A lot of these projects can take up to seven or eight funding partners," Sip said. "Trying to align all those timelines and deadlines, trying to get things done, is a real challenge."

On the other side of the state, officials in Albert Lea are seeking flood mitigation money from other sources. The city wants to build a water storage area to protect houses on Front Street near Fountain and Albert Lea lakes from major flooding.

The project costs about $1 million, but the city doesn't want to get bonding money for the project — they want lawmakers to help fund an $80 million project to replace Albert Lea's aging wastewater treatment plant and don't plan to ask for anything else until the project is paid for, according to Steven Jahnke, the city engineer and public works director.

Wastewater treatment plants are key to help clean up floodwater, but many throughout the state are aging and in need of repair. And they're not designed to withstand major flooding — almost 100 communities had to pump sewage directly into waterways over the past two weeks.

Jahnke estimates it will take at least six years — and three requests to pay for phases of the project — before that's done.

"We would love to have an $80 million project request, but politically it just doesn't work that way," Jahnke said. "They just don't give a town like Albert Lea that much in one chunk."

Rising need

Bauman, of the DNR's flood mitigation program, said Minnesota's changing climate and increasing development mean the program's needs are growing too, with once-rare extreme flooding becoming more common in recent decades.

"The more that we don't do a bonding bill, the less we're going to be able to address issues like this, and the more cost," said Rep. Fue Lee, DFL-Minneapolis, who chaired the House Capital Investment Committee. Lee said the 60% supermajority required means it's hard to pass a bonding bill every year, but he said members on his committee agree that bonding bills need to get done.

"We have bipartisan agreement that this critical infrastructure is necessary and we can fund it," said Sen. Eric Pratt, R-Prior Lake, who serves on the Senate's Capital Investment Committee.

The House committee received more than $7.6 billion in requests this year. "That's growing by the minute," Lee said. The flood mitigation program alone requested $130 million in 2024, he said, and those needs will keep growing as infrastructure ages and damage adds up.

"Whether we agree or not on the size and scope, we have to start chipping away on these critical projects," Lee said.

Waiting game

Minnesota Public Facilities Authority Director Jeff Freeman said the lack of a bonding bill in 2024 will affect projects that cities and counties hoped to start in 2025.

"Right now, we're continuing pretty much full speed ahead for 2024 construction," Freeman said, approving projects that received money in the 2023 bonding bill.

"New project requests will be kind of put on a separate list, a holding pattern until we receive state match funds."

Bauman said funding has been inconsistent from the start, with surges of funding often coming in the years following a catastrophic flood.

Yet he said Minnesota is fortunate to have the funding at all. Many other states rely on FEMA funding to clean up after major floods and prepare for the next one, and some other states have special revenue sources; for example, North Dakota uses oil revenue to fund flood mitigation.

Since the flood mitigation program started, Bauman said, Minnesota has spent more than $600 million on projects. Though the funding isn't perfectly consistent, Bauman said he sees those investments paying off.

"Yeah, we're getting a lot of water right now, and there are some homes and businesses affected in Minnesota," he said. "But not to the scale we've seen in other states."