Finance Committee - December 22, 2025

The Regular Meeting of the Finance Committee of the City of Fargo, North Dakota, was held in the Commission Chambers at City Hall at 10:00 a.m., Monday, December 22, 2025.
Commissioners present or absent were as follows:
Present: Kolpack, Piepkorn, Strand, Turnberg, Mahoney.
Absent: None.

Staff attending: Finance Director Susan Thompson, Assistant Finance Director Jamie Bullock, City Attorney Ian McLean, City Administrator Michael Redlinger, Police Chief David Zibolski, Assistant Police Chief Travis Stefonowicz.

Mayor Mahoney presiding.

Order of the Agenda:
Commissioner Kolpack moved the Order of the Agenda be approved, adding an update from City Attorney Ian McLean regarding the Red River Water Supply Project. Second by Strand. There was unanimous approval.

Minutes:
Commissioner Strand moved the Minutes from the November 10, 2025 Finance Committee meeting be approved. Second by Turnberg. There was unanimous approval.

Red River Water Supply Project Update:
City Attorney Ian McLean said this update about the Red River Valley Water Supply Project is regarding the Series F financing approved by the City Commission on October 13th. He said Fargo’s $50 million contribution, funded through water rates, leverages $153 million in State funding due to a 25% local cost-share agreement where the State provides three times the local investment. He said while the closing was briefly postponed to ensure transparency, he emphasized that no new funding is being requested beyond what was already authorized. Although Grand Forks has temporarily paused its $11 million participation due to concerns over governance and administrative structures within Lake Agassiz Water Authority (LAWA), he stated, Fargo officials fully expect Grand Forks to rejoin next month. Moving forward now is considered critical to secure historically low bids for three major construction contracts scheduled to begin in January 2026, he said.
Committee members addressed the project’s long-term financial health and governance and due to the fact that Fargo contributes the largest share of funding, it has successfully negotiated veto power over significant project decisions, a protection Grand Forks currently lacks. While some Committee members expressed concern regarding Fargo's mounting debt and the potential for increased administrative costs, staff clarified that the debt is technically held under the Garrison Diversion name and is already factored into long-term water rate modeling for Fargo and its regional partners such as West Fargo and Cass Rural Water Users. Several Committee members emphasized that maintaining momentum is vital to protect the State’s record $205 million allocation and to ensure the support of the Federal delegation, which is pursuing hundreds of millions in additional funding to further buy down local rates.
Mr. McLean said the RRVWSP board intends to move forward with the execution of the Series F agreement to keep the construction schedule on track and while Garrison Diversion currently handles much of the administration, there are ongoing discussions about transitioning to a dedicated administrative team to manage the project more like the FM Diversion. To prevent misinformation, he said, the City plans to proactively communicate this status to area legislators.
Committee members reiterated that securing a reliable long-term water supply remains a top priority and the current financial plan is within the utility budget without requiring any new action from the City Commission at this time.

General Fund Financials – YTD November 2025:
Ms. Thompson said the General Fund currently maintains a preliminary net positive position of $1.4 million through November. This financial standing is expected to be bolstered by a $5.5 million land sale of a Solid Waste parcel that closed in December, she said and while these funds are not reflected in the current November report, they are designated to go directly into the City's reserves. Overall revenue reflects some fluctuations, she said, with franchise fees, particularly from Xcel Energy, highway funds and building permit fees trending below budget due to a slowdown in commercial activity. Additionally, she said, a $1.7 million fire premium from the State caused a temporary timing variance when it arrived in December rather than November. She said charges for services have outperformed budget expectations due to increased administrative and engineering fees due to expanded Capital Improvement Plan (CIP) projects. On the expenditure side, she said, most departments are trending below budget for general operating expenses and salaries; however, these savings were partially offset by higher-than-anticipated Workers' Compensation premiums and a budget oversight regarding the final North Dakota State College of Science payment, which was required this year despite not being originally allocated. While all financial indicators remain positive, she said, these figures are preliminary. The Finance Department plans to present initial December year-end numbers in January, she said, with the final reconciliation and approval process continuing through March.

Auditor’s Office Restructure:
Ms. Thompson said the City is considering a structural reorganization of its Finance Department and the plan involves reassigning specialized financial duties, such as project accounting, debt payments and banking, to the Finance Division, while moving public records requests from Communications to the Auditor’s Office. Central to this proposal is appointing the Finance Director to also serve as the City Auditor effective upon the current auditor’s retirement in January, with Angie Bear continuing as Deputy Auditor to ensure administrative continuity. She clarified that City Auditor is largely a legacy title required by State law and municipal code, which contains more than 170 references to the position. She emphasized that despite the title, the office does not perform internal control or financial auditing functions and those are handled by the Finance Department through established policies and reinforced by a thorough annual external audit. The proposed model, which is already utilized in cities such as Grand Forks, she said, aims to resolve an odd mix of duties, including licensing, utility billing and election management that have accumulated in the Auditor’s Office over the past 25 years. She said the restructuring is expected to yield more than $100,000.00 in annual cost savings and improve operational efficiency by aligning tasks with the appropriate staff expertise. For example, special assessment certifications, which must be signed by the City Auditor, would move to the Finance Director since the Finance Department is responsible for the actual calculations, she stated. The plan also addresses changing technology, she said, as a transition to automated water meters will allow one meter reader position to move to Public Works while the other remains in the Auditor’s Office to monitor data reports and assist constituents.
Commissioners expressed reservations regarding the dual title and the potential for staff burnout within the Finance Division. Concerns were raised about the optics of the Finance Director holding the Auditor title, with some suggesting an interim appointment of the Deputy Auditor instead. However, supporters noted that peer organizations such as the North Dakota League of Cities view this consolidation as a standard trend for modernizing local government. To address these concerns, the Committee discussed the possibility of an evaluation after six months to evaluate the effectiveness of the new structure.

Axon Contract Renewal:
Ms. Thompson said the initial contract with Axon was implemented in July 2021 in response to public demand for transparency. She said the initial five-year contract was funded by $3 million in CARES Act cash. To address long-term budget concerns, she said, the Police and purchasing departments began renewal planning 18 months ago. The new 10-year plan, valued at $11.2 million, is designed to be largely revenue-neutral by utilizing the Public Safety Sales Tax and existing operating budgets, she said, and by signing the agreement before the end of 2025, the City can lock in 2025 pricing and avoid a substantial price increase scheduled for 2026.
Assistant Police Chief Travis Stefonowicz highlighted the operational necessity of the Axon ecosystem, noting hundreds of officers are already trained on the platform and the State’s Attorney’s office uses it for seamless evidence sharing. He said switching vendors would result in high data migration risks and significant operational disruption. The 10-year contract includes hardware refreshes every 30 months, he stated, to ensure cameras and equipment remain functional despite heavy use and environmental wear. Additionally, he said, the renewal introduces a virtual reality training platform, which allows officers to practice de-escalation and use-of-force scenarios in a realistic, immersive environment, significantly reducing the recurring costs of ammunition and Taser cartridges used in traditional certifications.
Police Chief David Zibolski said that while the Police Department has used drones since 2018, the new contract fully integrates drones into the Axon system, allowing for real-time video streaming to responding officers. He illustrated the safety benefits of “Drone as a First Responder” technology by describing a foot chase where a drone can provide overwatch, spotting suspects hiding in dark backyards or identifying weapons before an officer rounds a corner. This intelligence allows officers to wait for backup and coordinates a safer response for both the Police and the public, he said.
In response to questions from Commissioners regarding potential privacy concerns, Chief Zibolski said the Police Department operates under strict Fourth Amendment guardrails. He clarified the distinction between responding to a call for service and unlawful surveillance, noting that drones will not be used to peer into private dwellings without a warrant. He said the contract with Axon is a fiscally prudent move that maintains essential transparency tools while adding life-saving technology for the community and its officers. Axon has acquired Criminal Justice Information Services (CJIS) security certifications, he stated and all data uploaded to the Axon cloud is protected and stored within a CJIS cloud, ensuring that access is restricted to the Fargo Police Department for operational needs and to Axon for necessary maintenance. This ecosystem also facilitates efficient discovery for the State’s Attorney’s Office, he said, by providing a direct, streamlined link for court preparation.
In response to questions from the Commissioners regarding concerns about Axon’s large video stockpile, Chief Zibolski said the volume is simply a reflection of the company's numerous contracts nationwide. He said he has worked with Axon for more than 10 years across different agencies and Axon is a reliable, forward-leaning partner that effectively bridges the needs of law enforcement with community safety. He said the Police Department plans to house drones at various public buildings to provide coverage for high-priority calls, such as those involving intelligence gathering, officer safety and crime solvability. While the initial fleet will not be large enough to respond to every call, he said, the technology allows for a more efficient allocation of resources. He said a drone can quickly determine if a situation is escalating or if it is a false alarm, potentially canceling unnecessary responders. The drones will also assist the Fire Department with thermal imaging during structure fires, he said. This high-tech approach is bolstered by community partnerships, he said, such as Bell Bank, which has integrated its public-facing cameras into the City’s Real-Time Crime Center.
Commissioner Kolpack said locking in the agreement now would save the City $8.6 million, though some Commissioners expressed caution regarding the length of the commitment and the rapid evolution of technology.
In response to questions from Commissioner Strand about privacy, specifically regarding license plate readers and facial recognition, Chief Zibolski said the current system does not utilize facial recognition and the Department follows strict Fourth Amendment guidelines to prevent unlawful surveillance of private dwellings.
In response to questions from the Commissioners about the use of Public Safety Sales Tax funds, Deputy Chief Stefonowicz said Axon’s technology compensates for staffing gaps, provides critical overwatch during dangerous foot chases and ensures officers are protected by real-time intelligence in dynamic environments.

Adjourn:
The meeting adjourned at 11:26 o’clock a.m.