Lawsuit puts water infrastructure funding in jeopardy

During the last legislative session, the Legislature funded $98 million worth of projects in the bonding bill through a new type of revenue bond to be paid back using the Environmental and Natural Resources Trust Fund (ENRTF). The projects funded using these bonds includes $38.3 million for the Point Source Implementation Grant Program (PSIG), $14.6 million for the Water Infrastructure Fund (WIF) for wastewater projects, and $6 million in matching funds for U.S. EPA funding — all programs that the CGMC supports and are widely used by our member cities.

Last week, a coalition of eight environmental groups served the State of Minnesota with a lawsuit challenging the constitutionality of the funding source for these projects. The environmental groups claim that financing these projects with bonds paid for out of the ENRTF violates the State Constitution. 

We are in the process of investigating this matter on behalf of the CGMC and its members. There is still some uncertainty, but we do know is that this lawsuit endangers the PSIG and WIF funding contained in the 2018 bonding bill and could impact several of our members who were slated to receive this funding. Sale of the bonds to fund these programs could be postponed or even cancelled as a result of the proposed lawsuit, delaying important wastewater and related projects for multiple CGMC members.

You can read more about the lawsuit in this Star Tribune article and this article from MPR.

We will continue to monitor this situation. If you have any questions, please contact Elizabeth Wefel at eawefel@flaherty-hood.com.