Finance Committee - February 28, 2023 Minutes
City of Fargo - Finance Committee Meeting
Tuesday, February 28th, 2023
Go To Meeting/River Room
9:00 a.m.
The Finance Committee met on Tuesday, February 28th at 9:00 am in the River Room and virtually with GoTo Meeting.
Members present included Michael Redlinger, Steve Sprague, Mayor Mahoney, and Dave Piepkorn. Terri Gayhart was absent. Guests included Troy Hall, Jill Minette, Tanner Smedshammer, Tim Dirks, Bruce Grubb, Jordan Corneliusen, Wyatt Papenfuss, Kim Citrowske, Shawn Bullinger, Jordan Smith, Mark Williams, Nathan Boerboom, and Brenda Derrig.
CONSENT AGENDA:
Meeting Minutes Approved
Minutes from the January meeting were approved by the Committee as presented.
Sole Source and PBC items Approved
Requests were approved as presented and included Greater Outcomes Consulting, Credible Mind, and Frontier Precision.
Dave Piepkorn made the motion to approve. Michael Redlinger seconded and all voted in favor.
2023 City and County Sales Tax
Steve stated both the City and County increased.
REGULAR AGENDA:
Library 2023 Budget Amendment Approved
Tim Dirks explained the amounts approved in FY2022 decreased in FY2023 due to an error on his part. He had no intention of decreasing them and would like to request an adjustment to reflect the previously approved amounts.
It would be a $9,000 increase for 101-7010-463.54-11 and a $5,000 increase for 101-7010-463.61-43.
Given the minor amount the consensus of the committee was to approve it for now but would like to evaluate it at year end for the 2024 budget.
Michael Redlinger made the motion to approve. Dave Piepkorn seconded and all voted in favor.
Transit Vehicle Purchases Approved
Jordan Smith stated Transit is requesting $60,000 to purchase a used, non-accessible passenger van and related equipment required to operate the vehicle for the paratransit fleet. The request allows them to utilize 100% local money with no State or Federal money involved.
There are high levels of mechanical failures on current vehicles due to the increase in miles covered and replacement parts being difficult to get. An additional vehicle will allow Transit to have additional resources available and reduce the chance of having to cancel runs due to lack of vehicles.
They are also requesting $104,538 in additional local share for buses in an existing grant waiting for buses to become available to purchase. As part of a consortium with several other transit agencies and Duluth, MN as the lead, final pricing was just received. All pricing has increased and there is still about an 18 month wait time once ordered. However, a purchase order needs to be issued to reserve a spot in the production line.
The requested motion is to allocate a combined total of $164,538 to fund the purchase of a used passenger van and additional local share to match to an existing grant to purchase large buses.
Dave Piepkorn made the motion to approve. Redlinger seconded and all voted in favor.
FN19C Easement Acquisition Approved
The Engineering department is currently completing the last neighborhood flood protection in north Fargo. On November 9, 2021, Engineering started the easement acquisition process for a Woodcrest property and have been attempting to negotiate but have had difficulty engaging and negotiating with the property owner. By the end of 2022, all necessary easements had been acquired except for this property and in order to keep this flood protection project moving forward, eminent domain proceedings were filed in court. The property owners then hired an attorney, who assisted in getting the negotiations restarted and have come to an agreed price of $113,000 plus $5,000 for the attorney fees for a total of $118,000.
Engineering would like the approval and authorization to purchase the flood protection easement at 131 South Woodcrest Drive from Stan Andrist and Jan Nelson in association with Project #FM-19-C and have the Mayor and City Auditor execute the Settlement Agreement on behalf of the City of Fargo.
Steve Sprague made the motion to approve. Piepkorn seconded and all voted in favor.
Growth Plan for Planning and Enterprise Utilities Cost Share Approved
At the January 9, 2023 City Commission meeting, a contract was made with czb, LLC through an RFP process (RFP22159) to guide and facilitate a city-wide Growth Plan. The project includes a capital facilities analysis considering enterprise utility impacts from varying scenarios for future growth.
The Utility Committee unanimously recommended to contribute up to $100,000 to support and participate in the growth planning process at the February 1, 2023 Utility Committee meeting.
The Planning Department would like the approval of a cost share of up to $100,000 of Enterprise Utility funds for professional consulting services with czb, LLC who is conducting a comprehensive, city-wide study for the development of a Growth Plan for a total of $776,000 resulting in $676,000 from Planning Services and $100,000 from Enterprise Utilities budgets.
Redlinger made the motion to approve. Sprague seconded and all voted in favor.
Usage of Unexpected Wireless Lease Revenue Approved
Troy Hall submitted a draft of a four-month lease extension with AT&T at Water Tower #1 (7th Avenue North), which is the site of the new Downtown Water Tower construction. AT&T was given formal notice of lease termination in 2021 because new water tower planning showed AT&T equipment in the way of underground infrastructure routing during construction. However, a review has shown the equipment can stay on the site until the tower contractor is near ready to remove the old water tower.
AT&T is offering a one-time payment of $25,000 to keep their equipment on site for four additional months. A previous one-year extension was approved for $75,000 with revenue allocated to the Planning Department.
The AT&T lease extension will need to be approved by the City Commission. Water Utility staff requests this unexpected revenue to be used to finish piping and meter modifications for two Reverse Osmosis skids in the Membrane Water Treatment Plant. The modifications total around $12,000 to $13,000.
Redlinger made the motion to approve. Piepkorn seconded and all voted in favor.
Transfer Request Fund 450 to Fund 501 Approved
Troy Hall is requesting a transfer from Fund 450 (Infrastructure Sales Tax) to Fund 501 (Water Rates) in the amount of a Membrane Water Treatment Plant annual principal and interest payment (approximately $4.7 million). This can be considered a loan until a new State Revolving Fund (SRF) loan agreement can be finalized.
In order to receive grant funds for Project WA2255, the Water Utility will need to float materials payments for roughly five months until grant funds become available which will likely result in Fund 501 having a negative balance.
Water Utility recently received news that the North Dakota Department of Environmental Quality (DEQ) is recommending the Fargo Water Utility for 75% EPA grant funding on Project WA2255. With the project estimated at about $7 million, the grant amount will be in the $5 million range. The DEQ priority list includes the Fargo WTP Filter Rehabilitation project for 2023 funding but it needs to be approved by the North Dakota State Water Commission in April 2023. Grant funds would not be available for reimbursement until later in the summer.
Sprague made the motion to approve and all voted in favor.
Funding Approval for Reorganizations/Reclassifications Approved
Jill Minette stated the PEC met on February 7 and February 15 to review several reorganization and reclassification requests. The annual cost associated with the requests as requested is $131,304 but PEC approved $69,778.
Due to being outside of a regular budget cycle, it was determined the requests should be presented to the Finance Committee for funding consideration in the 2023 budget.
Redlinger made the motion to approve. Sprague seconded and all voted in favor.
Red River Properties LLP Building/Lease Purchase Option Approved
On February 13, 2017, the City Commission approved a series of agreements related to a lease/acquisition of the Border States Electric (BSI) building at 105 25th Street North. The building was owned by Red River Properties, LLP (RRP) which was leasing the building to BSI at that time.
The BSI lease expired at the end of 2019, at which point, the City began leasing the building from RRP. BSI also owned a building at 2401 3rd Avenue North, which housed their IT operations. The City has an agreement with RRP that defines the terms of a RRP building lease extension or option to purchase. The agreement requires a formal notification from the City on the lease option or purchase option by June 30, 2023.
Although the purchase price is to be negotiated based on a fair market appraisal, the City Assessor currently has the assessed value at approximately $8 million. It is recommended that the purchase price be debt funded with a GO bond and the annual debt service obligation to be budgeted annually in place of the budgeted lease obligation.
The suggested motion is to approve a formal notification to RRP of the City's intent to exercise the purchase option for the RRP building and land located at 105 25th Street North and 131 24th Street North.
Piepkorn made the motion to approve. Sprague seconded and all voted in favor.
Other Business
Mayor Mahoney brought up the Finance Committee meetings being open and held in the Meadowlark Room moving forward. He’s not anticipating many public visitors.
Piepkorn stated he did not think the meeting is being held incorrectly but Sprague stated it wouldn’t be a bad idea to have it reviewed. City Attorney Nancy Morris received the question from a City Commissioner. The minutes are not published but are available to anyone.
Redlinger said start holding the meetings in the Meadowlark room and see if that works.