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Receding flood waters reveal huge damage assessment

Total bill will exceed $1 billion; infrastructure costs will hang on for years

April 1, 1997


Edward Lotterman Agricultural Economist

Receding flood waters reveal huge damage assessment

After some respite from an unusually harsh winter in late February and in March, much of the Ninth District suffered one last arctic blast in the form of an ice storm and blizzard that covered most of the Dakotas and parts of Minnesota the weekend of April 4-6. Hundreds of miles of power lines were downed in North Dakota, and the cold wind and snow added insult to injury for the Minnesotans and North and South Dakotans who were outside fighting rising flood waters.

The flooding that ensued in towns and cities in Minnesota and North Dakota is well known, as local and national media chronicled the daily battle against the rising waters. What isn't so well known, yet, is the precise economic impact of the worst flooding in that region's history; as of late April, though, it was possible to make some estimations.

From cattle to cropland and bridges to homes, flood's damage spread wide

In the agriculture industry, ranchers in North and South Dakota were perhaps the hardest hit by the late blizzard, since most were in the middle of calving season. Beef operators in both states had already suffered unusually high mortality throughout the winter as a result of extreme cold and snow. North Dakota officials estimate that weather-related cattle losses for the whole winter, including the April storm, totaled 160,000 head, about 10 percent of the state's beef herd. South Dakota's Department of Agriculture had estimated losses before the storm at some 7 percent of the state's 1.5 million head breeding herd; the blizzard took the lives of additional cows and many newborn calves.

Where the blizzard ended, rapidly rising waters took over. Farmers sandbagged, diked, moved grain and livestock to other locations, and parked machinery on high road grades where possible. Early estimates report that some 2,000 farm homes were damaged to some degree, and an equal number of other farm buildings including some large potato storage buildings. Damage to stored grain has not yet been assessed, nor that to machinery. Most tillage implements can survive submersion with negligible damage, but combines and other harvesting equipment with many moving parts may require extensive disassembly, cleaning and lubrication if submerged.

Crop planting will surely be late in flooded areas, but reduction in crop production need not be significant unless the region receives above-normal precipitation in May and June. High-value crops, such as sugar beets, are likely to be planted first, and perhaps on land more distant from the river than had been planned. Similarly, some acres may be planted to shorter-season crops than usual, with lower value of output per acre, but few acres will produce nothing this year.

Throughout the whole valley, publicly owned property such as roads, bridges, schools, county and municipal buildings, and water and sewer systems received substantial damage. At the end of April, water levels were declining in most areas, though still above flood stage in all but a few.

A very initial estimate made at the Minneapolis Fed indicated total property damage in the Red River Valley—for public and private property—in the range of $1.2 billion to $1.8 billion. On April 28, Minnesota's Director of Emergency Response announced that his state had suffered $800 million in damages to residences and to public infrastructure and government buildings. Estimates were still being made of damage to commercial property and to agriculture.

North Dakota is still tabulating, but officials indicate that property damage is expected to exceed $1 billion. The Director of Public Services for the city of Grand Forks indicated that some $250 million might be necessary to repair all the damage to public infrastructure and municipal property in that city alone.

While the total bill for property damage, cleanup and lost output will be large, it should not have significant effects on the economy as a whole. Federal disaster assistance of nearly $500 million has already been offered, and unprecedented donations of cash and material by individuals and businesses will also help. Still, even at best, many families will experience a significant drop in net worth and some small businesses may fail. Taxpayers, especially in North Dakota where damage is much greater relative to the size of the state economy as a whole compared to Minnesota, will face higher taxes over a number of years as bonding necessary to rebuild infrastructure is serviced.

An overview of the flood

During the blizzard that raged through the region in early April, the Minnesota River in west-central Minnesota was already above flood stage in many areas, and the Red, Red Lake, Big Sioux and James rivers were near the top of their banks. The combination of flooding and blizzard caused unusual damage in Ada, Minn., where the freezing of flood waters filled much of the town with water covered with ice too thick to break, making evacuation and damage prevention activities difficult.

Many homes and businesses in Granite Falls, Montevideo and Breckenridge, Minn., suffered some flood damage, although heroic efforts by residents and volunteers from around the region kept the waters out of most parts of these cities. As the crest on the Minnesota moved downstream, there was some additional damage to low-lying property in New Ulm and other Minnesota Valley towns, but nothing of major consequence.

At the same time, there was minor flooding along the St. Croix River, between Minnesota and Wisconsin, including the closing of a much-used bridge at Stillwater, Minn.

Further west, there was high water along the James and Big Sioux rivers in South Dakota. Both of these rivers rose substantially above flood stage, setting new records at several sites and causing some damage to roads, bridges, residences and farms. Huron, on the James River, and Watertown, on the Big Sioux, suffered the greatest damage. But in both cases, flooding was largely limited to the basements of a few dozen houses. There was little structural damage, and few houses were flooded to a level that would require major rehabilitation work.

As the Minnesota, James and Big Sioux river crests moved downstream and people in those river basins let out their breath, the focus shifted back to the Red River between North Dakota and Minnesota. This river flows north, in a gently sloping, broad and flat valley that experiences some flooding in many years. But the snowfall during the winter was the highest on record, and clearly the 1997 snow melt was going to cause major increases in water levels.

The twin cities of Fargo, N.D., and Moorhead, Minn., are protected by substantial permanent levees, but officials in both communities had spent weeks preparing additional defenses. The crest was reached about April 16, and despite some neighborhoods damaged by overland flooding or their location outside of protected areas, most of the two cities escaped major damage. About 100 homes and a number of businesses suffered some damage, and many businesses shut down because owners and employees were engaged in flood work, but the cities came through remarkably well.

Unfortunately, their neighbors 70 miles to the north were not so lucky. Grand Forks, N.D., and East Grand Forks, Minn., stand at the confluence of the Red and Red Lake rivers. Officials in these two towns had also implemented major flood defense efforts.

The Red River rose very quickly, with a crest that arrived nearly a week before predicted. The crest also turned out to be 5 feet higher than predicted and was aggravated by overland flooding from snow melt in flat agricultural areas adjacent to the cities. In the late afternoon of April 18, levees were overtopped and began to fail. Officials ordered the progressive evacuation of both cities as neighborhoods were flooded and as essential water, sewer and electrical service were cut off. Nearly 60,000 people were forced to evacuate the two cities, including hospital and nursing home patients.

The shocking destruction in Grand Forks mobilized frantic efforts in downstream towns. Sandbagging and levee construction went on round the clock in Drayton and Pembina, ND, and St. Vincent, Minn., as well as in Canadian towns across the border. Warren, Minn., some miles from the Red, but on the Snake River, also fought to spare itself. Some damage occurred in all these towns, but there was no catastrophic break in the defenses as there had been in Grand Forks, and things turned out better than many anticipated during the dark fourth week of April.