Fargo officials outline case to extend 1¢ infrastructure sales tax ahead of June 2026 ballot

City staff on Feb. 19 presented commissioners with a detailed review of how Fargo's infrastructure sales tax has been used and why officials want to extend the 1¢ portion on the June 2026 ballot.

During the presentation, staff said the infrastructure sales tax generated approximately $34,000,000 in 2024 and funds core projects across streets, water and wastewater that would otherwise raise costs for property owners and utility customers. "In 2024, the infrastructure sales tax generated approximately $34,000,000," said Speaker 2.

Why it matters: Staff framed the extension as a funding-stability measure for long-lived, multi-generational projects. The sales tax, they said, reduces the share of street reconstruction costs passed to property owners (examples given where special assessments were reduced to about $5,600 from tens of thousands), funds pavement preservation citywide, and supports water and wastewater projects that keep Fargo's household utility bills lower than many peers.

Key projects and numbers: Presenters described several costly capital projects funded in part by the sales tax: - A 45th Street interceptor project, cited as roughly $63,500,000, added a third major interceptor and two lift stations to relieve capacity constraints and support growth to the south; staff said it also improved conveyance from West Fargo and Horace. - A Broadway interceptor sanitary sewer overflow reduction project was described at about $23,500,000 to reduce stormwater inflow to the sanitary system. - A regional wastewater treatment-facility expansion completed recently was described at about $151,000,000 and cited as doubling treatment capacity for a regional population of about 271,000 people. - Staff identified an upcoming priority as West Side interceptor improvements (installed in the 1970s), with a planning-level estimate of about $50,000,000; presenters described the work as deep, complex and expensive.

Water system details: The water presentation noted Fargo uses two advanced treatment plants (a modernized lime-softening plant and a membrane plant) to treat challenging river water and that regionalization (serving West Fargo and others) has helped lower Fargo resident water rates. Staff said rate revenue is the water utility's largest revenue source and sales tax is the second-largest, working together to pay debt service and fund projects. The SRF (State Revolving Fund) loan program and a Bank of North Dakota loan with debt shaping were cited as critical financing tools; staff said SRF loans typically carry very low interest rates (presentation slides and comments referenced rates of roughly 2% or less).

Household impacts: Staff presented a regional rate comparison and rate-containment analysis. They estimated that, using current rate-containment strategies including sales tax, an average Fargo residential water bill is approximately $43 (versus an estimated $67.75 without those strategies), a difference of about $24.75 monthly. For sewer, staff said Fargo's average residential sewer bill is about $25 per household and that without infrastructure sales tax the city might need to raise sewer rates by roughly $10.50–$12.50 per household.

Policy and next steps: Staff said the sales tax originated from a 2005 master plan and that citizens approved the infrastructure sales tax in 2008 with roughly 69.4% support. Commissioners were told staff will return with more detailed comparative rate and ROI data (Fargo vs. West Fargo, Horace, Cass Rural, etc.) and with draft ballot language by mid-March for placement on a June 2026 ballot; staff confirmed a sales-tax ballot measure requires a 60% approval threshold.

Points of contention and follow-up requests: Several commissioners asked staff to quantify the revenue and return from regional users and to compare residential and commercial rates across neighboring utilities. One commissioner said they would not support asking Fargo taxpayers for additional diversion funding unless Minnesota jurisdictions (including Clay County and Moorhead) participated financially; staff said federal funds and other sources are expected to help close diversion funding gaps but that the infrastructure tax should not be put at risk.

Data and caveats: Presenters gave many dollar figures and planning-level estimates. In a few places the transcript produced unclear numbers (staff committed to follow up with clear, documented figures). Staff repeatedly emphasized that the sales tax has been used to buy down special assessments, fund long-term projects, and share costs with nonresidents who use city infrastructure.

What's next: Staff will compile the requested comparative-rate and ROI information, follow up with community groups, and seek city-commission approval of ballot language by mid-March for a June 2026 measure.