Fargo officials seek 20-year extension of 1-cent infrastructure sales tax to fund roads, water and wastewater

City officials told the Fargo City Commission they will place a 20-year extension of the city’s 1-cent infrastructure sales tax on the June 2026 ballot and urged commissioners to support ballot language that would keep the revenue dedicated to streets, water supply and treatment, sewage and flood control.

The presenters said the penny tax generated roughly $34 million in 2025 and has been the local match that unlocked federal and state grants. “This is not a new tax. This is simply an extension of an existing tax,” a city staff member said, adding that the ballot language restricts the funds to core infrastructure and aims to give voters clear, narrow choices.

Why it matters: officials said the sales tax stabilizes long-term planning, reduces the need for large special assessments and helps keep utility bills lower. Tom Nachmoose, Fargo’s city engineer, told commissioners that proactive pavement preservation is far cheaper than delayed reconstruction and that the sales tax permits a predictable preservation program across arterials, collectors and local streets. “Spending a dollar at the right place would otherwise cost us $8 if we delay it,” Nachmoose said.

What city staff presented: the briefing combined three technical presentations. Nachmoose outlined how the city measures pavement condition and the treatments that extend life (crack sealing, seal coats, mill-and-overlay). He showed how surveys from 2017, 2021 and a pending 2025 survey track declines and recoveries in pavement quality and detailed how a mix of federal grants, special assessments, utility funds and the infrastructure sales tax are programmed through the capital plan.

Nachmoose gave homeowner examples to illustrate the local impact: for a typical mill-and-overlay project, a property owner’s special assessment is about $2,000 with the sales tax in place and might rise to roughly $4,000 without it; for a typical street reconstruction he cited an assessed share of about $5,600 with the tax versus an estimated $41,400 if the full cost were special assessed.

Troy Hall, water utility director, said the utility’s financial model combines rate revenue, sales tax and grants (about $52 million in grant funding to date) to fund projects and SRF loan payments while limiting rate volatility. Hall said sales tax is the single most impactful element in the city’s rate-containment strategy and estimated the tax prevented roughly a 26% increase in bills in 2025. He also described the city’s two treatment plants, an extensive distribution network with eight towers, and the Red River Valley Water Supply project as the largest ongoing drought‑proofing effort.

Jim Hassau, director of water reclamation, summarized wastewater investments including three major interceptors and a $151 million regional wastewater plant expansion. Hassau told commissioners that outside users pay higher surcharges because they did not contribute to initial infrastructure, and he gave a 2025 example of a wastewater rate of $25 with the sales tax in place versus an estimated $43 without it.

Questions and next steps: Commissioners asked about the proposed term, flood-tax interactions and the scope of the word “infrastructure.” Commissioner Strand asked, “How long is that term of that sales tax?” and staff replied, “That’ll be a 20‑year term.” Staff explained that a separate quarter‑cent diversion/flood tax is governed by different legal language and could end earlier if its debt is retired; the infrastructure measure is 20 years regardless, though the ballot language allows flexibility to respond to flood‑related needs. Staff also said the city will present draft ballot language to the commission at the March 16 meeting and that the measure is planned for the June 2026 ballot.

Campaign mechanics: presenters emphasized the city cannot organize a pro‑vote committee and will rely on partners — the Chamber, homebuilders and other community organizations — to educate and advocate on the city’s behalf. Staff described a coalition approach for outreach while noting the city can provide factual information but cannot run a ‘vote‑yes’ campaign.

What was not decided: no formal vote on the measure occurred at this briefing; the commission will review ballot language and take further procedural steps. The presenters did not commit to a particular project list beyond the categories permitted in the ballot language and said annual budgeting would retain flexibility to direct funds to the highest need across streets, water, wastewater and flood control.

The commission spent its remaining time clarifying financial examples, the mechanics of special assessments and how regional partnerships and grants interact with the sales tax. The meeting closed with staff thanking the utility directors and noting they would return with draft ballot language and supporting materials for the public and commission review.