Board of City Commissioners - January 17, 2017 Minutes

The Regular Meeting of the Board of City Commissioners of the City of Fargo, North Dakota, was held in the City Commission Room at City Hall at 5:00 o'clock p.m., Tuesday, January 17, 2017.
The Commissioners present or absent were as shown following:
Present: Gehrig, Grindberg, Piepkorn, Strand, Mahoney.
Absent: None.
Mayor Mahoney presiding.

Members of Boy Scout Troop 201 led the Pledge of Allegiance.

Mayor Mahoney read a statement with the following announcements: Fargo Municipal Court has implemented chip-enabled credit card machines and Fargo is the first test site for the 69 counties and municipalities utilizing the North Dakota Court Supreme Court’s Odyssey case management system; in 2016, the Police Department put 1.3 million miles on department vehicles and addressed approximately 91,254 calls for service, which averages to about 250 calls per day; the Street Department is working to ensure property owners are removing snow and ice from sidewalks throughout the city and per Chapter 18 of the Fargo Municipal Code which requires all property owners or occupants to perform snow and ice removal on all fronting and adjoining sidewalks; and he also announced the Solid Waste Department will continue to pick up Christmas trees from boulevards through January. The Mayor also commended the Human Relations Commission for its program at the Fargo Theatre celebrating Martin Luther King Jr. Day.

Order of Agenda Approved:
Commissioner Grindberg moved the Order of the Agenda be approved, moving Item Nos. “6,” “7” and “10” from the Consent Agenda to the Regular Agenda and continuing Item No “19b” to 5:15 pm on January 30, 2017.

Second by Gehrig. All the Commissioners voted aye and the motion was declared carried.

Minutes Approved:
Commissioner Piepkorn moved that the Minutes of the Regular Meeting of the Board held on January 3, 2017 be approved as read.

Second by Grindberg. All the Commissioners voted aye and the motion was declared carried.

Consent Agenda Approved:
Commissioner Strand moved the Consent Agenda be approved as follows:
1. Receive and file the following Ordinances:
a. Amending Sections 25-1504.2 of Article 25-15 of Chapter 25 of the Fargo Municipal Code Relating to Alcoholic Beverages.
b. Amending Section 25-1506 of Article 25-15 of Chapter 25 of the Fargo Municipal Code Relating to Alcoholic Beverages.

2. 1st reading of an Ordinance Amending Ordinance No. 5066 Pertaining to Zoning of Brandt Crossing Tenth Addition, Fargo, Cass County, North Dakota.

3. 2nd reading, waive reading and final adoption of the following Ordinances; 1st reading, 1/3/17:
a. Rezoning a Certain Parcel of Land Lying in Calico Prairie Addition, Fargo, Cass County, North Dakota.
b. Rezoning Certain Parcels of Land Lying in Hogan’s Addition, Fargo, Cass County, North Dakota.
c. Enacting Article 24-04 of Chapter 24 of the Fargo Municipal Code Relating to Wireless Telecommunication Facilities in the Public Right of Way.

4. Pledged securities as of December 31, 2016.

5. Purchase of Service Agreement with the ND Department of Health in the amount of $27,000.00 for HIV counseling, testing and referral program (CFDA #93.940).

6. Mutual Aid Agreement/Memorandum of Understanding with the City of Bismarck Fire Department (moved to the Regular Agenda).

7. Memorandum of Understanding Regarding Airport Officers to provide police services at the Municipal Airport Authority of the City of Fargo at the TSA checkpoint (moved to the Regular Agenda).

8. Acceptance of the Walmart Community Grant Program Award in the amount of $2,500.00 for the Police Department.

9. Receive and file the five-year, 2016-2020, Transit Development Plan.

10. Final Guaranteed Project Cost for the Roberts Garage work in the amount of $12,963,140.00 and budget amendments (moved to the Regular Agenda).

11. Task Order No. 4 for an AE2S, Inc. contract for $47,000.00 and contract amendment with Reach Partners Inc. in the amount of $75,000.00 for The Fargo Project

12. Applications for Games of Chance:
a. Red River Valley Asperger-Autism Network for a raffle on 1/20/17.
b. Catholic Daughters – Court Sts. Anne & Joachim #2638 for a raffle on 4/22/17.

13. Applications for property tax exemptions for improvements made to buildings:
a. Michael R. and Kelly D. Beyer, 2208 North Flickertail Drive South (5 Year).
b. Christopher H. Bass and Monique L. Azure, 826 28th Street North (5 Year).
c. Ken A. and Michelle I. Enockson, 1202 8th Street North (5 Year).
d. Christopher R. and Alicia J. Kauffman, 410 Eddy Court (5 Year).
e. Dave and Denise Kolpack, 1322 6th Avenue South (5 Year).
f. Zoltan Majdik and Carrie Ann Platt, 1305 3rd Street
North (5 Year).
g. Kristen G. Paulson, 1201 2nd Street North (5 Year).
h. Barbara Headrick, 204 20th Avenue North (5 Year).

14. Engineering Technician I agreement with Peggy Amsbaugh.

15. Memorandum of Offer to Landowner for two permanent easements and a temporary easement with Cass County Electric Cooperative Inc. (Project No. PR-17-A0).

16. Memorandum of Offer to Landowner for a permanent easement and a temporary construction easement with Love’s Travel Stops and Country Stores, Inc. (Project No. PR-17-A0).

17. Bills in the amount of $7,179,950.08.

Second by Grindberg. On call of the roll Commissioners Strand, Grindberg, Gehrig, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Update from the Human Relations Commission New American Workgroup:
Fargo Human Relations Commission Chair Rachel Hoffman said the workgroup meets regularly to discuss broad and complex issues. She said the group will soon begin sending a series of press releases with more succinct information and will compile all of the information and present it to the City Commission at a later date.

In response to a question from Commissioner Grindberg if the workgroup had met with manufacturing firms and other employers in the area to discuss workforce issues and how they relate to New Americans, Ms. Hoffman said information from the workgroup’s meetings with employers will be included in the upcoming report.

State Water Commission Request for Reimbursement for FM Diversion Project Costs Approved:
Finance Director Kent Costin said the State Water Commission is requesting $4,401,701.00 for cost reimbursement for the FM Area Flood Risk Management Project for December 2016.
Commissioner Grindberg moved the cost reimbursement request in the amount of $4,401,701.00 for the FM Diversion Flood Project be approved.

Second by Gehrig. On call of the roll Commissioners Grindberg, Gehrig, Strand and Mahoney voted aye.
Commissioner Piepkorn voted nay.
The motion was declared carried.

Appointments to the Board of Health:
The Board received a communication from Mayor Mahoney recommending that Chelsey Linn Matter and Dr. Christopher Anderson be reappointed to the Board of Health.
Commissioner Piepkorn moved Chelsey Linn Matter and Dr. Christopher Anderson be reappointed to the Board of Health for three-year terms ending December 31, 2018 and December 31, 2019 respectively.

Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Strand, Gehrig and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Appointments to the Renaissance Zone Authority:
The Board received a communication from Mayor Mahoney recommending that Bruce Furness and Deb Mathern be reappointed to the Renaissance Zone Authority.
Commissioner Piepkorn moved Bruce Furness and Deb Mathern be reappointed to the Renaissance Zone Authority for three-year terms ending January 1, 2020.

Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Strand, Gehrig and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Appointments to the City Hall-Auditorium Commission:
The Board received a communication from Mayor Mahoney recommending that Daniel J. Olson and Billy Nustad be appointed and Dan Armbrust and Jim Deutsch be reappointed to the City Hall-Auditorium Commission.
Commissioner Piepkorn moved Daniel J. Olson and Billy Nustad be appointed to the City Hall-Auditorium Commission for terms ending January 1, 2019 and Dan Armbrust and Jim Deutsch be reappointed to the City Hall-Auditorium for three-year terms ending January 1, 2020.

Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Strand, Gehrig and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Legislative Update:
City Administrator Bruce Grubb said last week was the first full week of the 2017 Legislature and he has begun tracking bills internally. He said he assigns the most appropriate staff person to track specific bills and has them provide staff-level recommendations. This year, he said, there are bills scheduled for hearings the Commission may want to testify for or against. He said one bill in particular, HB1276, would establish a three percent cap on property taxes and is referred to as parcel administration. Other bills of note are HB1182 which would eliminate the Renaissance Zone program for North Dakota cities, and SB2166 which would prevent the use of both a Renaissance Zone and TIF for a single project. Other bills to be introduced this week, he said, include three bills about the infrastructure revolving loan fund, including an appropriations bill and two bills which would open up the language for eligibility within the program with one even allowing airports to be included. He said HB1258 is also of interest due to the fact it would remove extraterritorial authority from municipalities and turn it over to townships.
Finance Director Kent Costin said HB1276 imposes a three percent cap on property taxes. He said it is a parcel-based type assessment and right now Cass County has one uniform rate applied to the entire tax base. He said a City Assessor creates the values, the Commission sets mill levies and the County Auditor determines the tax. He said this new tax would be done at the parcel level and he cannot comprehend how this could possibly work. He said it complicates the process, distorts the taxation of people by imposing a cap on the valuation of property and the City and County do not think it is administratively possible.

In response to a question from Mayor Mahoney as to how the parcel gets involved and would everyone’s taxes go up three percent or if valuations do not hit three percent, is there variability, Mr. Costin said state law says property has to be valued at fair market value or a percentage of fair market value. He said they have a 90 percent bogey and are striving for equity, this proposal would be in conflict with their bar of 90 percent valuation. He said the state is attempting to lower taxes by imposing a cap; however, it is complicating the process.

In response to a question from Commissioner Piepkorn asking if there was an increase, would it be across the board and how would it apply with individuals, Mr. Costin said somehow the tax would have to be magically calculated at the individual parcel level based on its valuation and the tax cannot go up by more than three percent. He said if someone’s property went up thirty percent and they put a cap on it, a higher level of calculations would have to be done to solve it, as opposed to just a flat rate.

Commissioner Strand said the cap would be fine if the state does not cut into K-12 education funding. He said if there is a reduction in public funding for education, it falls on school districts and the only funding mechanism they have is property taxes. He said 51 percent of property taxes right now in total are for public education and there have only been a couple of sessions of property tax relief from the higher levels of property taxes from when the state was not funding public education like it had been or should be.

Mr. Costin said he and Commissioner Piepkorn will testify on Wednesday about Renaissance Zones and other incentives and will bring up public education funding.

In response to a question from Commissioner Gehrig on how the position of the Commission will be portrayed for Renaissance Zones since the Commission disagrees, Mr. Grubb said that is the purpose of having the discussion tonight.

In response to a question from Commissioner Gehrig on how the Renaissance Zone discussion will play out, Commissioner Piepkorn said he we will show the facts, how it has performed, specific numbers and tell Fargo’s story.

Commissioner Gehrig moved that when information on the Renaissance Zone is presented at the legislative hearing, it be mentioned the Fargo City Commission is not in lockstep and disagrees on some of the facts including outcomes of Renaissance Zones and other exemptions.
The motion died for lack of a second.

Commissioner Piepkorn said Renaissance Zone performance is undeniable, it has been a great thing for downtown Fargo. He said in the early 1980s the City was facing declining property values and the downtown was empty. He said Renaissance Zones are not the only reason; however, it has been a successful program. He said whether someone agrees or not, it has been great for Fargo. He said the City wants to have smaller towns learn from Fargo’s mistakes and take advantage of City of Fargo staff who are willing to work with them.

Commissioner Gehrig said Renaissance Zones had their place in the past; however, it has been going on for more than 20 years and while it is going on, the City is stacking incentives on top, such as TIFs and sometimes PILOTS, and the it that has had on young families, the elderly, all the citizens of Fargo, the story needs to be told. He said to present one side is not the best idea and there should be a full discussion.

Mayor Mahoney said Renaissance Zones have not had a negative impact on homeowners and it has had a remarkable return on investment. He said the facts are there is no effect to the elderly and people with less money. He said the positives are increased property values in downtown Fargo and an increased number of people paying taxes. He said it is not Commissioner Piepkorn’s responsibility to give the minority report to the Legislature, it is to report the majority vote.

Commissioner Grindberg said it is early in the legislative session. He said the Commission could take a position on a bill but two days later it could change with an amendment. He said there are many bills that could impact Renaissance Zones, those need to be monitored, as well as all of the pieces of legislation to see if it is a fit or not, whether the Commission is for or against something; however, the concept is the Commission supports Renaissance Zones. He said there are going to be differences and he advised the Commission to be careful of what motions are passed at this point in time.

Commissioner Strand said current practices and policies are what should be reflected in Bismarck, and currently the Commission supports Renaissance Zones.

Mr. Grubb said of the nearly 800 bills, dozens are related to incentives and dozens are related to property taxes. He said he does not want to vote on every single bill, they need to cross over and connect. He said there is a policy in place dealing with incentives, that is a guide and that is what is approved on the books. He said that is enough direction.

In response to a question from Mr. Grubb about property taxes and caps, and how the Commissioners would like him to present the information every two weeks, Commissioner Grindberg said the Legislature is in the early stages. He said moving forward these various pieces of legislation should be sorted into categories as to what tax policies impact Fargo such as growth, incentives, local government aid and other various impacts. He said the Commission can then decide how to position for or against something. He said as far as property tax caps, does the Commission want to make a motion that is open for whether the Commission is going to support legislation capping the Commission’s ability to run the city? He said as a state senator for 22 years, he voted against every cap bill that came into the Legislature because he believes in local control.

Commissioner Grindberg moved not to support capped property taxes this legislative session.

Commissioner Piepkorn said it is early in the session and if the Commission starts taking stands, the Commission is injecting itself unnecessarily. He said he is going to Bismarck to represent Fargo and state the facts about Renaissance Zones. He said the Commission should be careful about injecting different views this early. He said the Commission has not done it in the past.

Commissioner Grindberg withdrew the motion to not support property taxes this legislative session.

Text Amendment to Amend Sections 20-0401 and 20-0402 of Chapter 20 of the Fargo Municipal Code (Land Development Code) Relating to Telecommunications Facilities Approved:
A Hearing had been set for January 3, 2017 on a text amendment to Sections 20-0401 and 20-0402 of the Fargo Municipal Code (Land Development Code) relating to use regulations and telecommunications facilities.
At the January 3, 2017 meeting, the Hearing was continued to this day and hour.

Planning Administrator Nicole Crutchfield said the text amendment to the Land Development Code (LDC) is an administrative item so the LDC is in line with the municipal code to allow small cell canisters in the right of way. She said Planning is taking that governance out of the LDC and allowing Article 24 to regulate those. She said Engineering will administer that aspect of small cell applications. She said when small cells go on private property, the Telecommunications Support Structures (TSS) category will be divided into two categories, including 50 feet in height or less, or 35 feet in height and less. She said in the 50 feet or less category there will be some conditions in single-family zoning districts and they will be permitted by right in commercial and multi-family zoning districts. She said 35 feet height or less will be permitted by right everywhere.

Commissioner Grindberg moved the request be approved on the basis the proposed Text Amendment complies with Sections 20-0904.E(1-3) of the Land Development Code.

Second by Piepkorn. On call of the roll Commissioners Grindberg, Piepkorn, Strand, Gehrig and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

First Reading of an Ordinance Amending Sections 20-0401 and 20-0402 of Article 20-04 of Chapter 20 of the Fargo Municipal Code Relating to Use Regulations and Telecommunication Facilities Approved:
Commissioner Grindberg moved the requirement relating to receipt of the Ordinance by the Commission one week prior to first reading be waived and the Ordinance Amending Sections 20-0401 and 20-0402 of Article 20-04 of Chapter 20 of the Fargo Municipal Code Relating to Use Regulations and Telecommunication Facilities be placed on first reading.

Second by Piepkorn. On call of the roll Commissioners Grindberg, Piepkorn, Strand, Gehrig and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Hearing on Appeal of the Board of Adjustment’s Denial of a Variance Continued to January 30, 2017 (303 11th Street North):
This was the time and date set for a Hearing on the appeal of a variance request at 303 11th Street North which was denied by the Board of Adjustment at their December 22, 2016 meeting; however, the applicant has asked that the hearing be continued to January 30, 2017.
Commissioner Piepkorn moved the Hearing be continued to 5:15 o’clock pm Monday, January 30, 2017.

Second by Gehrig. On call of the roll Commissioners Piepkorn, Gehrig, Strand, Grindberg and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Mutual Aid Agreement/Memorandum of Understanding with the City of Bismarck Fire Department Approved:
Fire Chief Steve Dirksen said the Fire Department has 12 mutual aid agreements with other public safety agencies, including Sioux Falls, South Dakota, which was almost invoked recently when a building collapsed in downtown Sioux Falls. He said the Fire Department reaches out quite a way; however, the process of trying to have Fargo, Grand Forks, Minot and Bismarck agree on everything has been difficult, so he decided to pick them off individually. He said these agreements are important because sometimes an incident happens that is just too big and a city needs backup with a department which has similarly trained personnel.

In response to a question from Commissioner Strand about mutual aid agreements with law enforcement and are they more a gentleman’s agreement rather than a formal document, Police Chief David Todd said his department does have Memorandums of Understanding with some agencies in the area and he says mutual aid happens on both sides of the border. He said with statewide issues it is a gentleman’s agreement, but a caveat is, since Fargo Police is a larger agency with a multi-jurisdictional SWAT team, Fargo Police has a sector of the state for which it is responsible for a response, including bomb and negotiator teams.

Chief Dirksen said Fargo has a regional mutual aid agreement for hazardous materials in the southeast 11 counties of North Dakota. He said in each jurisdiction within this agreement and most others, each entity is responsible for providing their own workers’ comp.

Commissioner Gehrig moved the Mutual Aid Agreement/Memorandum of Understanding with the City of Bismarck Fire Department be approved.

Second by Grindberg. On call of the roll Commissioners Gehrig, Grindberg, Strand, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Memorandum of Understanding Regarding Airport Officers to Provide Police Services at the Municipal Airport Authority of the City of Fargo at the TSA Checkpoint Approved:
Airport Executive Director Shawn Dobberstein said the costs for the police officers will be borne by the Municipal Airport Authority. He said the funds come out of the airport’s operations and maintenance budget and are also covered in part through Homeland Security through its law enforcement reimbursement program. He said how much it will be is not known, perhaps 25 percent or 30 percent of the estimated cost. He said Fargo’s taxpayer money will not be spent on these services.

In response to a question from Commissioner Gehrig about what law requires an official arresting authority at the airport such as police and not just security guards, Mr. Dobberstein said CFR 1542 is a federal requirement and he said he wants to insure going forward the airport always meets federal requirements. He said the airport has been using private security since the TSA was formed after 9/11, and prior to that, the National Guard was used. He said Fargo Police covered airport security in the late 1970s to early 1980s.

In response to a question from Mayor Mahoney about working with Senator John Hoeven, Mr. Dobberstein said Senator Hoeven is Chairman of the Senate Appropriations Subcommittee for Homeland Security and he hopes to increase funding in the line item for police security to have the federal government pick up more of this cost.

In response to a question from Commissioner Strand on who has ultimate authority over airport police officers, Mr. Dobberstein said Chief Todd has ultimate authority.
In response to a question from Mayor Mahoney about the annual costs of police officers at the Airport Authority, Chief Todd said annual costs will be about $600,000.00.

Commissioner Gehrig moved the Memorandum of Understanding Regarding Airport Officers to Provide Police Services at the Municipal Airport Authority of the City of Fargo at the TSA Checkpoint be approved.

Second by Piepkorn. On call of the roll Commissioners Gehrig, Piepkorn, Strand, Grindberg and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.

Final Guaranteed Project Cost for the Roberts Garage Work and Budget Amendments Approved:
The Board received a communication from Planning Director Jim Gilmour stating DFI Roberts, LLC has provided a Final Guaranteed Project Cost (GPC) proposal. He said the proposed guaranteed maximum price is based on the Primary GPC previously approved by the City Commission, contracts which have been conditionally awarded for the work and DFI’s estimate of the costs for the Roberts Garage work. He said the approved Primary GPC was $11,588,000.00 which included the parking ramp substructure, foundation and shell, as well as electrical, mechanical and plumbing work. The balance of work was estimated to be $800,000.00, he said, for a project cost of $12,388,000.00. The reason for the higher cost of $575,140.00 is that contracts for masonry and finishes were higher than expected, he said. He said under the development agreement with Kilbourne Group, they have to seek multiple bids which are monitored by the title company, Planning and the City’s parking consultant, who looks at the plans and specifications to make sure the City is getting a quality structure. He said while the costs are higher, they will not use general funds and the balance will be paid out of the parking surplus fund, the parking fund and proceeds from the sale of two parking lots.

Commissioner Piepkorn said $800,000.00 for masonry may seem like a lot of money; however, he said it is not luxury masonry, it is structural masonry. He said there were other factors for the increased costs including the discovery of several fuel tanks during excavation. He said it was hard to get masonry bids, especially since the work will be in the alley next to large power lines.

In response to a question from Commissioner Strand about private bids and awards for public funds, City Attorney Erik Johnson said a similar system is being used to build the Diversion, it is a Public Private Partnership (PPP) and unlike the typical public bidding process for such things as roads and the new City Hall, the PPP comes under a particular chapter in the Century Code and in another chapter called Infrastructure Development by Private Operators. He said it has been on the books since 1979 or the early 1980s in state law and provides for a proposal process of identifying a developer, then entering into an arrangement. He said per the development agreement, the developer did get competitive bids; however, it is not required.

In response to a question from Commissioner Strand about the statutory requirements and processes for public bid awards, advertising and bid letting, and if those are required of the private developer, Mr. Johnson said they are not required by law, the City asked them to follow competitive bidding processes.

Commissioner Strand said he is uncomfortable with this due to the fact there is a high threshold of accountability for public bidding on every front and he hopes it is always the case if it is a private developer doing those bids for public funds.

Mr. Gilmour said the City has access to all requests and knows who bid, what the bids were and has copies of the bids. All of it is a matter of public record as part of the agreement with the developer, he said.

Mike Allmendinger, Kilbourne Group, said all divisions of work in this project were done competitively. He said this is a mixed-used project with the parking garage connected to private development. He said he would have been happy to have the City of Fargo be the builder, the manager, hold public bids and build it themselves; however, someone had to take the lead and be the builder of both because they are together. He said that is the core reason Kilbourne Group and the City of Fargo entered into this arrangement. He said the top floor of the garage is done and now is when the core happens with the elevator structure, condo agreements and more.

Commissioner Grindberg moved the Final GPC Proposal for Roberts Street Garage Work, in the amount of $12,963,140.00, and budget amendments to transfer the surplus fund, parking lot proceeds and needed parking fund money to the Roberts Parking Garage Capital Fund be approved.

Second by Piepkorn. On call of the roll Commissioners Grindberg, Piepkorn, Strand and Mahoney voted aye.
Commissioner Gehrig voted nay.
The motion was declared carried.

Commissioner Piepkorn moved that the Board adjourn to 5:00 o’clock p.m., Monday, January 30, 2017.

Second by Grindberg. All the Commissioners voted aye and the motion was declared carried.
The time at adjournment was 6:05 o’clock p.m.