What got funded in the final bonding bill

by Trevor Russell

Gov. Dayton has signed the Legislature's 2018 bonding bill.

The governor used a line-item veto to remove one controversial provision but (reluctantly) approved the rest of the bill — including an unprecedented $98 million raid of the state’s Environmental Trust Fund.

Here’s a summary of what got funded, what got line-item vetoed and what got raided.

Water infrastructure

One of our top priorities this year was robust bonding for water infrastructure. The original House position asked for about $120 million for water infrastructure. The Senate proposed about $90 million in general obligation bonds. The final bill includes just $64.350 million, plus $5 million more for metro sewer repairs.

  • Wastewater Infrastructure Fund ($25 million): Supplemental assistance grants for municipalities for high-cost drinking water infrastructure projects that address existing environmental or public health problems. Typically, they supplement either low-interest loans or are used as matching funds to secure federal grants or loans.

  • Water Infrastructure Initiative - drinking water ($14 million): State funds to be matched by federal funds through the clean water and drinking water revolving funds. State and federal funds are used together with loan repayments and Public Facilities Authority revenue bonds to provide low-interest loans to local governments for both clean water infrastructure, which includes wastewater and stormwater, and drinking water infrastructure projects. Eligible projects are prioritized based on environmental and public health criteria.

  • Public Facilities Authority (PFA) local grants ($25.35 million): Funding to the PFA for direct grants to political subdivisions to fund upgrades to water mains, wastewater treatment plants, stormwater retention ponds, drinking water systems and other water infrastructure.

    While this money is much needed, it violates the traditional approach of providing the money directly to the PFA. The PFA maintains the state’s Project Priority List – a ranked list of priority water infrastructure projects across the state. Rather than let the PFA allocate funds per the list, this approach circumvents that process and gives the money directly to chosen communities.

  • Metro municipal “inflow & infiltration” grants ($5 million): Funds for improvements in municipal wastewater systems to reduce inflow and infiltration to the Metropolitan Council's Metropolitan sanitary sewer disposal system. Grants are for a 50% state cost share to defray costs of repairs in the most problematic communities.

Where's the rest of the money you ask? Good question. Some additional water infrastructure money was secured through an unprecedented (and plainly unconstitutional) raid of the state's Environmental Trust Fund (see below). Even with that money, the total comes up well short of the target of $167 million that both the governor and the Legislative Water Commission had set prior to the session.

River Corridor projects funded

The final bill includes some vital investments along the Mississippi River in the metro area, though several important projects were left out of the mix.

  • Upper Harbor Terminal Redevelopment: $15 million will fund much-needed infrastructure, such as streets, stormwater sewers, pedestrian access, parkland and utilities, to prepare the 48-acre city-owned Upper Harbor Terminal site for redevelopment that will include residential, business and civic uses and a new destination park on the Mississippi River.
  • Wakan Tipi Center: $3 million for Wakan Tipi Center, a visitor and interpretive center at Bruce Vento Nature Sanctuary that will honor and interpret the Dakota sacred site, Wakan Tipi Cave, and the rich cultural history of this area.
  • Historic Fort Snelling Visitor Center: $15 million for the rehabilitation of a historic cavalry barracks and an ordnance building to create a new visitor center and orientation area; the removal of the current visitor center; landscaping and wayfinding; and new exhibits and programs developed in partnership with community partners.
  • StoneArch Bridge ($1 million): A small portion of the $12 million needed to repair the iconic Stone Arch Bridge over the Mississippi River in Minneapolis.
  • Snelling Upper Post ($15 million): authorizing the Minnesota Housing Finance Authority to use its bonding authority to direct $15 million for affordable housing at Ft. Snelling Upper Post.

Missed the cut:
Several key projects were left out, including:

  • Environmental Learning Center: $3 million for the proposed environmental learning center at the current Watergate Marina site in St. Paul, to fund community engagement, design development, environmental review and permitting at the site.
  • The Falls Visitor Center: $1.5 million for pre-design of “The Falls"— a destination visitor and interpretive center proposed for the recently closed Upper St. Anthony Falls Lock in downtown Minneapolis to draw people to discover our local national park on the Mississippi River.
  • Great Northern Greenway River Link / 26th Avenue North Overlook & Pier
    $3 million for Minneapolis Park & Recreation Board to extend the river biking and walking trails and construct a fishing pier and overlook at the river’s edge to provide access to the Mississippi River for North Minneapolis residents and regional trail users.

Line-item vetoed

A single project did receive a well-deserved line-item veto from Gov. Dayton. This bizarre MESERB bill attempted to grant $1 million to these regulated parties to provide "oversight" of their own wastewater treatment regulations. In his veto letter to legislative leaders, the governor noted that such an approach would add unnecessary bureaucracy, complicate rulemaking and slow down state agency work on permits and water quality standards. We are thankful to Gov. Dayton for this line-item veto.

Raiding the Environment & Natural Resources Trust Fund

A number of projects were funded through an unprecedented $98 million raid on the state’s Environment & Natural Resources Trust Fund (ENRTF).

While many of these items are sound projects, using constitutionally dedicated funds as a substitute for traditional bonding money is a terrible idea for many reasons, and permanently undermines the state’s voter-approved trust fund. The raided items include:

  • $10 million to Metro Parks for investments in the seven-county metropolitan area regional park system.
  • $6 million to clean up leaking waste at the Anoka Landfill in Andover.
  • $10 million for the Reinvest in Minnesota (RIM) program to secure permanent easements to protect water quality in agricultural areas.
  • $59 million in supplemental funds to the Public Facilities Authority (PFA) to fund water infrastructure projects.
  • $5.7 million to the Department of Natural Resources (DNR) for lake restoration and asset preservation.
  • $7.3 million for work on Lake Redwood

Conclusion

The House and Senate offered a bonding bill proposal at $825 million, well below the governor’s requested $1.5 billion.

While many good projects were funded (and a poor project was line-item vetoed), the overall bill under-funds the environment and sets a terrible precedent by raiding a constitutionally dedicated fund to pay debt service on state bonds.

FMR and our allies look forward to working with legislators and future administrations to repair these mistakes and fully refund the ENRTF raid.

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Learn more about how Minnesota's environment and the Mississippi River fared this legislative session at our River Guardians happy hour, June 5. 

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