Finance Committee - January 30, 2023 Minutes
City of Fargo - Finance Committee Meeting
Monday, January 30th, 2023
Go To Meeting/River Room
10:00 a.m.
The Finance Committee met on Monday, January 30th at 10:00 am in the River Room and virtually with GoTo Meeting.
All members were present which included Michael Redlinger, Terri Gayhart, Steve Sprague, Mayor Mahoney, and Dave Piepkorn. Guests included Ben Dow (virtually), Dan Eberhardt, Susan Thompson and Rob Sobolik (virtually), Tanner Smedshammer, Jim Gilmour, Kevin Gorder, Brenda Derrig, Nicole Crutchfield, Scott Olson and Jen Pickett (virtually), and Jill Minette.
CONSENT AGENDA:
Meeting Minutes Approved
Minutes from the December meeting were approved by the Committee as presented.
Sole Source and PBC items Approved
Requests were approved as presented and included Johnson Controls and Great Plains Fire Equipment/Innotex.
Michael Redlinger made the motion to approve. Terri Gayhart seconded and all voted in favor.
2022 City and County Sales Tax
Steve stated it was 23% higher than prior years and the County also increased.
REGULAR AGENDA:
Compass Minerals Salt Contract Price Adjustment Approved
Ben Dow stated that since he’s been at Public Works they have never gone through so much salt. Public Works annually issues an RFP for 3,000 tons of bulk highway salt for deicing streets throughout the winter. Included as part of the contract, there is an option to purchase an additional 1,000 tons, if needed, at the contracted price. This year they have had to exercise the 1,000 tons option, but after receiving the additional salt, they still did not have enough on hand for the remainder of the winter.
Ben contacted Compass Minerals to ask about the availability of an additional 500 tons of salt. They agreed to provide the additional tonnage, but it will be shipped from a terminal out of Illinois rather than the terminal located in Duluth. Due to this, there is an additional cost for shipping of $10,830.00
Terri Gayhart made the motion to approve. Dave Piepkorn seconded and all voted in favor.
Deferral Request for County 20 Storage and Transfer Approved
The City of Fargo Engineering and Water Utility Departments are planning a project to expand the water distribution system in the industrial portion of north Fargo. The project will transfer water from the east side of 1-29 to the west of 1-29, adding increased water flows, capacity, and redundancy to the industrial areas of north Fargo. As part of the project, a 16-inch water main will be installed along 52nd Avenue North and a 12-inch water main along 37th Street North from 46th Avenue North to 52nd Avenue North.
County 20 Storage and Transfer (Robert Nelson), owns four parcels adjacent to 52nd Avenue North and 37th Street North. Two of the parcels are located in the city limits of Fargo and two remain in the ET area of Fargo. It will be necessary for the city to acquire a street/utility easement along 52nd Avenue North and 37th Street North for this project.
Dan Eberhardt is recommending a deferral request for the two parcels that are located within the city limits. At this time, the owner of the property has no desire to develop the parcels.
Michael Redlinger made the motion to approve. Steve Sprague seconded and all voted in favor.
Office Furniture Purchase for Survey Staff Move to City Hall Approved
Kevin Gorder stated the Survey Staff is currently located at the Public Health Building, but Public Health needs additional space at their location on 25th Street South. One solution is to move Survey out of their space at the Public Health site and into City Hall, which would free up office space along with the garage area for Public Health.
Engineering is working with Christianson’s Office Supply and Smartt Interior Construction to modify the Engineering’s office setup in City Hall to add seven employees. Bekki in Facilities Management mentioned there might be price increases in some items so Kevin is bringing the costs to the Finance Committee in pieces instead of one big purchase. The cost to modify workstations and add one enclosed office is $66,400.33.
This would be the first step of three identified by Engineering. Step two would be to designate seven underground parking spots for the survey employees. Step three would include design and a cost estimate to complete the necessary HVAC, electrical, and fire suppression modifications to ensure compliance as office modifications are completed.
Delivery could take around 12 weeks on the office furniture and the suppliers anticipate a price increase sometime in February. By approving the purchase of the office items at this time, the price can be locked in prior to the expected increase in materials. Engineering would work with Facility Management in getting quotes to complete the HVAC, electrical, and fire suppression work and schedule that work before the office furniture is delivered.
Brenda Derrig would like her staff together. Steve Sprague stated the bigger concern is underground parking. Michael Redlinger said the parking will have to be reviewed every couple of years as departments grow, etc.
Dave Piepkorn made the motion to approve. Michael Redlinger seconded and all voted in favor.
Downtown InFocus Interface Studio Additional Services Approved
Nicole Crutchfield stated in early 2022, the City of Fargo contracted with Interface Studio, the consultants who prepared the 2018 Downtown lnFocus Study. This contract was procured through Sole Source processes. Through the project and findings to date, additional scope of work is needed to prepare an action plan and prioritization of recommended actions more fully for the City and the downtown stakeholders to implement.
The proposal for work would be an additional $44,620. The original study used funds from 101-2010-409.33-15 Planning Services. Funds are available to pay for these services.
Terri Gayhart made the motion to approve. Michael Redlinger seconded and all voted in favor.
2023 Temporary Surcharge Request by MinnKota Recycling Approved
Scott Olson stated in April 2022 there was an RFP for recycling services and MinnKota was approved. Later in 2022, MinnKota and Solid Waste staff met to discuss the current market and logistical issues with recycling and sorting facilities. There is a continued market decline to near record lows which results in a significant financial loss for MinnKota. They asked for a temporary offset fee/surcharge of $50 per ton for single stream material collected by the City. There will be similar surcharges applied to the cities of Moorhead, Clay County and other entities that provide single stream recycling to MinnKota.
The additional expense will be approximately $195,000 if things remain the same in 2023. To offset the cost, funds would be reallocated from the Landfill Capital Improvement budget line at the end of 2023 once the extent of the additional expense is known.
Michael Redlinger made the motion to approve. Dave Piepkorn seconded and all voted in favor.
HR Temporary/Seasonal Budget Account Approved
Jill is requesting additional funding for the Human Resources temporary / seasonal budget account (101-405-0515-1400) which is currently budgeted at $34,233 and covers the cost of Civil Service Commissioners ($2,233) when they are engaged in appeal hearings or meetings and our temporary variable HR Analyst position scheduled for 16 hours per week ($32,000).
In 2022, additional funding of $5,000 was requested for the temporary retention of Vicki Jangula, who moved out of the area, to continue working with the HR department primarily assisting with document scanning and storage in Laserfiche. Vicki continued working on Laserfiche as well as supporting other projects in a temporary variable status. Jill would like to continue the remote work arrangement with Vicki for five to seven hours per week. The annual cost would be approximately $10,148.
Dave Piepkorn made the motion to approve. Michael Redlinger seconded and all voted in favor.
Update on sale of old Health Building at 401 3rd Ave N
Jim Gilmour stated in the fall of 2021, the City requested proposals for the development of three sites in downtown Fargo. The proposals received were reviewed by the Economic Development Incentives Committee (EDIC) and the Renaissance Zone Authority. Recommendations for two of the properties were forwarded to the City Commission. Sale and development agreements have been signed for 419 3rd Street North and 234 Main Ave.
The City Commission selected Green Acre and Lloyd Companies to acquire a property at 401 3rd Avenue North, trade it for property on the northwest corner of 4th Avenue and 4th Street and build a development that would include a hotel and apartments. Green Acre and Lloyd recently informed the City that they are withdrawing their proposal because current economic conditions have made the project no longer feasible.
Dave Piepkorn said he would recommend redoing the RFP process to be fair and give everyone a fair shot.
Citizen Fee Waiver Request (No action needed)
Redlinger stated Commissioner Strand brought up a request from a citizen on waiving a reinspection fee of $100. The citizen was wondering why he keeps getting tagged on reinspection requests from the Inspections department. Redlinger explained he visited with Shawn Ouradnik and there is a long-standing practice in Inspections to charge for time when they have to go back out and reinspect. They would like to stay consistent with policy. Sprague said the fees are the cost of doing business and the thought behind it is the fees are a deterrent so items are fixed timely and reinspections won’t continually have to be done. There have been many emails and contact with the Finance department and the charge will go to collections after the third notice.
City Commission Governance Workshop Facilitation Services – Expanded Scope Approved
The City Commission participated in a second Governance Workshop led by Dr. Jeff Schatz, Schatz & Associates, LLC in January 2023. The Commission desires to continue its relationship with Dr. Schatz to provide facilitation services on governance topics with the Fargo City Commission. An expanded scope of work has been prepared by Dr. Schatz and it is proposed that Dr. Schatz collaborate with the City Commission and City staff on the development of future workshop agendas, best practices in the public sector, and provide an analysis of other governance models that may be of interest to Fargo. The expanded scope of work establishes a flat fee of $6,000 per additional session.
Dave Piepkorn made the motion to approve. Michael Redlinger seconded and all voted in favor.
Task Order for Black & Veatch/AE2S Approved
Redlinger brought forth a Task Order with Black & Veatch/AE2S for Project Coordination and Funding Support for the 2023-2025 legislative session. The Task Order was requested by the Garrison Diversion Conservancy District (GDCD) and the Lake Agassiz Water Authority (LAWA) to assist with critical legislative issues and funding commitments to be determined during the 2023-2025 legislative session.
At this point, a State cost-share and funding commitment to the project are critical to the local users to allow them to sign a Project Participation Agreement. Therefore, this legislative session is of extreme importance to secure a funding commitment from the State. This professional services Task Order will greatly enhance the chances of achieving LAWA's project funding goals from the State. The total cost is $92,250 to be paid for 50% GDCD and 50% LAWA. The LAWA share will be paid by Fargo and Grand Forks.
Fargo’s cost-share would be $35,516, with funding coming from Infrastructure Sales Tax Fund 450, line item #450-3510-510.73-62, Water Infrastructure.
Terri Gayhart made the motion to approve. Michael Redlinger seconded and all voted in favor.
Budget Amendments and Line-Item overrides - tabled for approximately 60 days
Terri explained departments as a whole need to reflect on the organization and management of their budgets. Departments currently are allowed to override a line item when processing a purchase order, which means the department could overspend the account. Departments are currently unable to modify their own budget in Central Square, so they are unable to shift savings and priority from one account to another. Additionally, budget amendment requests are vague and sometimes difficult to interpret. All add to the burden of the Finance Department to monitor and update.
Terri would like to not allow departments to override accounts but allow them to move budget between operating accounts and create an organized way to request budget amendments. Terri is currently working with BSI on the possibility of adding a module to create a workflow and process that would allow departments to create their own budget amendments and will work on instructions to help educate departmental staff.
Tanner thinks this would be a beneficial change as it would make sure money is available before purchasing is done. Ben Dow has a lot of concern with it because of the unknown. For example, going into the end of the year he thought they were solid budget wise, but then December hit and with all the snow received, he blew his budget. He is also concerned with the process of how he would make payments to his vendors the last two weeks of the year. Would it create a lot more paperwork? He thinks Terri’s plan could work but is questioning what would happen if the department hit their budget but has contractors waiting to get paid because a funding plan would need to be prepared. He also does not want to plan for overages when he doesn’t need to.
Terri said she wouldn’t change the process without a lot of instruction and having departments understand. Redlinger stated time needs to be spent on these changes to really get it right and would like to table the request for a couple of months to allow for internal coordination.
Michael Redlinger moved to table the request for 60 days. Dave Piepkorn agreed and seconded and all voted in favor to table the request.
Reassign ARPA Funds Approved
Terri stated administering the American Rescue Plan Act (ARPA) grant remains laborious. The City has until 2026 to spend the funds even though purchase orders must be requisitioned by 2024. The City has funds in excess of $4M with vague assigned purposes and Terri would like to move those funds to the General Fund as revenue loss replacement, which would draw the General Fund closer to a balanced budget and to close out the grant in 2023.
Redlinger stated this plan meets the timelines on how to requisition the funds and follows compliance rules. Steve Sprague said the funds have caused spending and budgets to go out of whack.
Dave Piepkorn made the motion to approve. Steve Sprague seconded and all voted in favor.