Diversion authority authorizes release of preliminary statement for $220M subordinated sales-tax bonds to finish construction

The Metro Flood Diversion Authority voted on June 15 to authorize the release of a preliminary official statement for subordinated sales-tax revenue bonds intended to provide roughly $220 million in remaining construction financing for the diversion project.

General counsel John Shley told the board the bond issue is part of the agreed plan of finance and will also refund two smaller bond issues issued by the city of Fargo in 2013 and 2014, leaving about $36 million of outstanding principal on those earlier issues. Board members asked clarifying questions about timing and the effect on interest costs; staff said the authority is pacing issuance to limit interest expense.

The motion to release the preliminary official statement carried on a roll-call vote. The board’s approval clears the way for the formal bond process to proceed with an official statement and related underwriting steps.

Why it matters: The subordinated sales-tax bonds are intended to supply the remaining construction financing the diversion authority planned to issue this year. Because the new issuance also will refund earlier Fargo-issued debt that predated the current authority structure, the action consolidates and streamlines the project’s debt profile.

What’s next: Staff will proceed with preparing the official statement and the formal issuance process; further board approvals will be required for final bond sale documents and closing.