Special Assessments Taskforce

Boards, Commissions & Committees

Special Assessments Taskforce - November 19, 2018 Minutes

Call to Order:
Commissioner Grindberg presiding.

Approve minutes from November 1, 2018 meeting:
Mr. Hanson moved the minutes from the November 1, 2018 meeting be approved. Second by Mr. Dardis. There was unanimous approval.

Commissioner Grindberg reviewed the agenda and shared a draft discussion document that he and Finance Director Kent Costin created based on prior discussions. He said it attempts to put items into categories: elimination of specials; what is required under state statutes and what has been discussed that the City Commission could change. A goal is moving closer on what to focus, he said, and any action by the City Commission could be in early February. One driver of City Commission action in adopting a new policy would be what the Legislature does with the grant fund, he said, and would factor in the potential $25 million/biennium funding as a grant line.

Commissioner Gehrig said if a different angle is considered, there would not be a need for Legislative action. The current half-cent utility sales tax to fund water and sewer utilities is about $5 million to $6 million, he said; however, at the end of the year much of it goes to the general fund, creating a pass-through. He said the City profits by putting money from the fund for special assessments into the general fund. He said Fargo’s utility fees are lower than most of North Dakota and a nominal increase to monthly utility rates could fund the utility departments. A large percent of the half-cent sales tax ends up going to the general fund, he said, and his proposal is to use utilities fees to fund utilities and use the half-cent sales tax already in place to fund infrastructure.

Taskforce Discussion/Recommendations:
Discussion included: annual average assessments; caps, project prioritization and timing; funding mechanisms;, excess funds or not collecting excess at all; City control; costs are known if building; repairs can surprise fixed income homeowners; green field and reconstruction costs assessed differently; who maintains if developers put in infrastructure; developers don’t want to compete with the City; assessment uncertainty and overlap; balancing the annual Capital Improvement Plan (CIP) and getting more information out; how does the public get notified; revenues/expenses; volatility issues/market demand; homeowner education and awareness; communication; transparency; federal funding/NDDOT; City’s involvement in financing; resale impacts if changes are made; factoring in possible state funding; fluctuating construction costs; economy; deferred maintenance adding to costs; legislative intent; uniqueness of Fargo allowing specials to be assumed; sales tax fluctuations; owe people options; need for caution after dramatic change made in 2013 had to be reversed; easiest to make changes that lower costs, specials are the only tax that has to show direct benefit to property. Some recommendations included: examine the scale of the problem; specifics not generalities needed; fees; what goes to the general fund; what is collected; track risk; revenues/expenses; separate the pieces - green field vs. reconstruction; local roads/arterials/collectors/repairs; options needed to let the people decide; ask staff for biggest impacts/savings; what would the last five years look like with Commissioner Gehrig’s plan; and how would state funding get factored.

Commissioner Grindberg said an electronic document will be distributed to the committee members for feedback and a survey. He encouraged Commissioner Gehrig to bring back facts and detailed data on his proposed plan. Members will be polled later for availability before setting the next meeting date, he said.

Mr. Bullis moved the meeting be adjourned. Second by Mr. Volk. There was unanimous approval.

The meeting adjourned at 9:01 a.m.