Where Is Fargo’s $1.37 Billion Debt Going? A Full Breakdown

The city of Fargo has released financial figures showing a total debt of $1.37 billion. This total has become a central issue in the ongoing race to elect the city’s next mayor.

The debt is distributed across eight categories, with the largest portions dedicated to infrastructure improvements and utility expansions. According to reporting from Valley News Live, the city utilizes various repayment methods, including special assessments, utility rates, and the General Fund, depending on the nature of the obligation.

Infrastructure and Utility Debt

Improvement bonds constitute the largest portion of the city’s debt, totaling $580 million. This represents 42% of the overall debt total. These bonds are used to fund infrastructure for new developments and street repairs within established neighborhoods. The city stated that these bonds are repaid through special assessments paid by the property owners who benefit from the specific improvements.

Utility infrastructure debt accounts for 24% of the total, amounting to $328 million. This funding covers the expansion of wastewater and water plants, as well as upgrades to solid waste and utility systems. Repayment for this debt is handled through utility rates and a 1% infrastructure sales tax.

the city carries $41 million in flood diversion debt, which represents 3% of the total financial obligation.

Operational and Non-Traditional Obligations

Non-traditional obligations make up 19% of the city’s debt, totaling $265.5 million. This category encompasses several different types of financial commitments, including:

• Pension obligations
• Accrued employee leave
• Long-term software subscriptions

The city indicated that these non-traditional costs are repaid through the operating budgets of the respective departments.

City Facilities and Public Assets

Debt related to city facilities totals $48.7 million, or 4% of the overall debt. This funding covers the costs of Police Headquarters, City Hall, the Public Health building, and fire stations. These obligations are repaid using the General Fund.

Parking ramps account for 3% of the debt, totaling $37.3 million. This includes the NP, ROCO, and Mercantile ramps located downtown. The city stated that the General Fund serves as a backstop for this debt, while it is primarily supported by tax increment financing revenue and parking revenues.

Equipment, Leases, and Bond Premiums

A combined total of $48.3 million, or 3% of the debt, is attributed to bond premiums, leases, and FargoDome equipment. This category is broken down into three specific components:

• $35 million in unamortized bond premiums
• $11.6 million in financed equipment leases
• $1.7 million for the FargoDome video system