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.

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

The meeting adjourned at 9:01 a.m.