Board of City Commissioners - September 23, 2019
The Regular Meeting of the Board of City Commissioners of the City of Fargo, North Dakota, was held in the City Commission Chambers at City Hall at 5:00 o'clock p.m., Monday, September 23, 2019.
The Commissioners present or absent were as shown following:
Present: Gehrig, Grindberg, Piepkorn, Strand, Mahoney.
Absent: None.
Mayor Mahoney presiding.
The Mayor read a message with the following information: The Gladys Ray Shelter and Veteran’s Drop-In Center has been selected as the charity of the month for “Reinventing Recovery;” the Arts and Culture Commission has released a call for artists for public art projects; the Library and Prairie St. John’s will host a mental wellness education series starting 9/24; weekly Crafternoon events for school-age children has started; teens can participate in leather bookmark craft events 9/24 and 9/26; Clay County Archivist Mark Piehl will give a presentation on 9/26 titled “The History of Florence Klingensmith;” the 2019 UND Air Race Classic Team will give a talk 9/28; the Carl Ben Eielson Story will be presented on 9/29; Gasper’s School of Dance and FM Ballet will present a “Spooky Ballet and Storytime” on 10/1; the Jazz into Fall concert series starts 10/6; several librarians are leading sessions at the ND Library Conference; and a video showcasing the Library was shown.
Order of Agenda Approved:
Commissioner Grindberg moved the Order of the Agenda be approved moving Item No. “4” from the Consent Agenda to the Regular Agenda, omitting Item No. “15” from the Consent Agenda and adding Item No. “24l” to the Regular Agenda.
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 September 9, 2019 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. 1st reading of an Ordinance Amending Sections 3-1301 and 3-1302 of Article 3-13 of Chapter 3 of the Fargo Municipal Code Relating to Lodging Tax.
2. Waive requirement to receive and file an Ordinance one week prior to 1st reading and 1st reading of an Ordinance Amending Section 16-0204 of Article 16-02 of Chapter 16, 16-0217 of Article 16-02 of Chapter 16 and 16-0304 of Article 16-03 of Chapter 16 of the Fargo Municipal Code Relating to Waterworks System.
3. 2nd reading and final adoption of the following Ordinances; 1st reading on 9/9/19:
a. Amending Section 25-1506 of Article 25-15 of Chapter 25 of the Fargo Municipal Code Relating to Restrictions on Sale, Service or Dispensing of Alcoholic Beverages.
b. Rezoning Certain Parcels of Land Lying in The Pines at the District Addition to the City of Fargo, Cass County, North Dakota.
c. Rezoning Certain Parcels of Land Lying in Scilley’s Addition to the City of Fargo, Cass County, North Dakota.
4. Applications for property tax exemptions for improvements made to buildings (moved to the Regular Agenda):
a. Paul Teunissen, 2509-2511 18th Street South (3 year).
b. Joseph and Jaime Foertsch, 104 Prairiewood Drive South (3 year).
c. Mark and Susan Howlett, 1429 10th Street North (5 year).
d. Eugene D. and Sandra L. Filley, 33 35th Avenue North (5 year).
e. Leslie A. and Barbara A. Herbranson, 1042 14th Street North (5 year).
f. Robert J. and Gloria Danielson, 1021 19th Street South (5 year).
g. Renee O’Brien, 820 2nd Street North (5 year).
5. Applications for Games of Chance:
a. 4 Luv of Dog Rescue for a raffle on 11/9/19.
b. Davies Eagle Elite for a raffle on 11/16/19.
c. Path of North Dakota, Inc. for a raffle on 11/26/19.
d. Fargo-Moorhead USBC Association for a calendar raffle from 1/11/20 to 1/26/20.
e. Fargo-Moorhead USBC Association for a calendar raffle from 10/5/19 to 2/16/20.
f. Homeward Animal Shelter for a raffle on 10/18/19.
g. Lewis & Clark Elementary School for a raffle on 10/25/19.
6. Access Agreement with Allison Kenninger for property at 901 42nd Avenue North (Project No. FM-19-A).
7. Access Agreement with Scott C. and Donna M. Seltveit for property at 906 41st Avenue North (Project No. FM-19-A).
8. Partial Release of Permanent Easement (Water and Sanitary Sewer) with Kevin J. and Cynthia L. Liedahl for property at 1440 12th Street South.
9. Change Order No. 2 for an increase of $74,746.50 and a 41-day time extension for Project No. SN-19-A1.
10. Change Order No. 1 for interim time extension and design modifications for Project No. FM-15-J2.
11. Change Order No. 4 for an increase of $25,339.00 and time extension to 6/15/20 for Project No. SN-18-C2.
12. Receive and file General Fund – Budget to Actual through August 2019 (unaudited).
13. Public Assistance Grant Program Subgrant Agreement for FEMA-4444-DR with the State of ND, Department of Emergency Services.
14. Third Amendment to Parking Management Agreement with Interstate Parking Company of North Dakota, LLC.
15. Amendment No. 4 to Agreement with First Transit (omitted).
16. Amendment No. 1 with KLJ in the amount of $4,210.61 for the GTC Jefferson Ticketing/Storage Counter Project.
17. Change Order No. 10 for an increase of $260,478.57 for Project No. WA1301 (electrical contract).
18. Payment to KPH in the amount of $313,494.40 for emergency sanitary sewer repairs.
19. Bills in the amount of $9,085,642.25.
Second by Gehrig. On call of the roll Commissioners Strand, Gehrig, Grindberg, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Payment to KPH, Inc. for Improvement District No. BN-18-A1 Approved:
The Board received a communication from the Engineering Department stating that after final estimate approval for Improvement District No. BN-18-A1, which is for the development of Bison Meadows 2nd Addition, it was discovered that the final asphalt quantities were not paid correctly to the Contractor. Due to the final pay estimate and the final balancing change order reconciliation process, they said, it was determined by City staff to pay the invoice for the additional cost to the Contractor to meet the deadline for project certification. The additional cost of $56,250.78 will be included in the Special Assessment District costs, they stated.
Commissioner Strand moved the payment to KPH, Inc. in the amount of $56,250.78 for Improvement District BN-18-A1 be approved.
Second by Gehrig. On call of the roll Commissioners Strand, Gehrig, Grindberg, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Change Order Nos. 5 and 6 for Improvement District No. BR-18-A1 Approved:
Commissioner Strand moved Change Order No. 5 for an increase of $8,296.07 and Change Order No. 6 for an increase of $54,127.00 for Improvement District No. BR-18-A1 be approved.
Second by Gehrig. On call of the roll Commissioners Strand, Gehrig, Grindberg, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Task Order No. 2 for Improvement District No. BR-20-B0 Approved:
The Board received a communication from the Public Works Projects Evaluation Committee stating the Engineering Department solicited proposals for Task Orders for the 2020 Street Reconstruction Design. They said Engineering Department staff met with four different firms to discuss project details and staff is recommending that Task Order No. 2 be awarded to Moore Engineering to provide project administration, preliminary survey, preliminary and final design and plan preparation, design support during construction and aid in a property owner meeting. They said the fee would not exceed $350,000.00 or about 8.5% of the preliminary estimated cost of construction.
Commissioner Strand moved Task Order No. 2 in the amount of $350,000.00 to Moore Engineering for Improvement District No. BR-20-B0 be approved.
Second by Gehrig. On call of the roll Commissioners Strand, Gehrig, Grindberg, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Tax Levies for the Budget Year Beginning January 1, 2020 and Ending December 31, 2020 Approved:
Mayor Mahoney said the 2020 City of Fargo Budget and Proposed Tax Levies are being presented to the Board tonight for approval.
Commissioner Gehrig said there is going to be a lot of discussion about this budget, especially regarding the property tax increase and special assessments. He said the most hated tax is special assessments and this budget does not address it. There are a few simple things that can be done, he said, so there is no increase to the mills, including the Cost of Living Adjustments (COLA), which he proposes follow a three-two-zero formula. If an employee has been with the City for five years or less, he said, they get a 3 percent increase, five to 15 year employees gets a two percent increase and those with the City more than 15 years get zero. He said the formula would save the City $1 million.
Commissioner Gehrig moved that a three-two-zero formula for Cost of Living Adjustments for City employees be approved.
The motion died for lack of a second.
Commissioner Gehrig said pay for Fire, Police and bus drivers was adjusted earlier this year, which cost almost $1.5 million; therefore, if the COLA for Fire, Police and bus drivers was taken out of the budget, that would save the City $690,000.00.
Commissioner Gehrig moved the Cost of Living Adjustment for Fire, Police and bus drivers be eliminated from the budget.
The motion died for lack of a second.
Commissioner Gehrig moved that City Commissioners not receive a Cost of Living Adjustment this year.
The motion died for lack of a second.
Commissioner Gehrig said the City is raising taxes and giving pay increases; however, he wants to point out that the City is getting $13 million from the State of North Dakota, which is brand new money the City has never had before; however, the City is increasing property taxes instead of giving any relief to property owners. He said if the City does nothing and keeps the mills exactly the same as last year, the City will take in 6 percent more just by virtue of valuation increases; however, the City Commission is telling the people of Fargo that is not enough and two mills are needed, which would be an 11.5 percent increase over last year, which is dramatic. He said he would be remiss not to notice what happened a couple years ago and for the last few years the City has been taking up to 12 percent increases through property taxes, and that is dramatic for residents to absorb. He said the City Commission is going to vote later at this meeting on incentives for low-income housing. At the same time, working people who may be first-time homebuyers or maybe they are elderly, are going to see their property taxes go up, so where is their relief, he asked. The people of Fargo deserve a COLA, he said, he cannot support this budget, it is too high and the City Commission has not addressed the issues that the citizens have demanded.
Mayor Mahoney said the Prairie Dog Fund money is to buy down infrastructure and the Special Assessments Taskforce is recommending that the City look into that and they will have some answers on what to do with that money; however, it is not proposed at this time.
Commissioner Piepkorn moved the 12-month budget beginning January 1, 2020 and ending December 31, 2020 be approved as follows:
General Fund $103,135,000
Special Revenue Funds:
City Share of Special Assessments 586,000
Noxious Weeds 8,373
Convention Bureau 2,331,000
Regional Law Enforcement Training Center 100,000
Court Forfeits 100,000
Skyway Maintenance 130,000
Downtown Business Improvement District 330,000
Neighborhood Revitalization Initiatives (NRI) 8,650
HOME Program 13,602
Neighborhood Stabilization Grant 71,000
HOME Projects 442,577
Parking Authority Operations 1,899,209
Parking Repair and Replacement 36,000
Newman Outdoor Stadium 130,000
Total Special Revenue Fund Expenditures 7,009,204
Debt Service Fund Expenditures 70,677,640
Enterprise Funds:
Water 27,662,741
Solid Waste 17,098,612
Wastewater 17,746,979
Forestry 12,524,213
Street Lighting 3,563,200
Storm Sewer 3,030,901
Vector Control 711,171
Southeast Cass Sewer 58,405
FARGODOME 7,620,526
Airport Authority 34,660,220
Total Enterprise Fund Expenses 114,636,968
Pension Trust Funds:
City Employee Pension 3,899,000
Police Pension 4,510,000
Total Pension Trust Funds 8,409,500
Grand Total - All Funds 303,868,312
Preliminary Tax Levies Are:
General Fund 49.90
City Share of Special Improvements 1.10
Airport Construction 2.00
Total Proposed Mills to be Levied for 2020 Budget 53.00
Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Strand and Mahoney voted aye.
Commissioner Gehrig voted nay.
The motion was declared carried.
Resolution Approving the Issuance of Revenue Bonds by the Colorado Health Facilities Authority for the Benefit of Sanford and the Evangelical Lutheran Good Samaritan Society (Series 2019 (Sanford)):
A Hearing had been set for this day and hour on a Resolution Approving the Issuance of Revenue Bonds by the Colorado Health Facilities Authority for the Benefit of Sanford and the Evangelical Lutheran Good Samaritan Society (Series 2019 (Sanford)).
Finance Director Kent Costin said this hearing is solely an accommodation by the City to satisfy the requirements of Section 147(f) of the Internal Revenue Service Code and approval does not impose any liability on the City or in any way involve the City. He said a public hearing is required in the City where certain facilities will be impacted by the money being refinanced.
Commissioner Piepkorn moved the Resolution entitled "Resolution Approving the Issuance of Revenue Bonds by the Colorado Health Facilities Authority for the Benefit of Sanford and the Evangelical Lutheran Good Samaritan Society" and referred to as Attachment "A” be adopted and attached hereto.
Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Gehrig, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the Resolution was adopted.
Application Filed by La Fiesta Mexican and American Grill LLC d/b/a La Fiesta Mexican and American Grill for an Alcoholic Beverage License Approved:
A Hearing had been set for this day and hour on the application filed by La Fiesta Mexican and American Grill LLC d/b/a La Fiesta Mexican and American Grill for a Class "F" Alcoholic Beverage License at 1109 38th Street South, notice of which had been duly published in the official newspaper for the City of Fargo.
No written protest or objection to the granting of the application has been received or filed in the office of the City Auditor, and said application has been approved by the Police Department as to the character of the applicant.
The Board determined that no person is present at this Hearing to protest or offer objection to the granting of the application.
City Auditor Steve Sprague said the application is for a new Class “F” Alcoholic Beverage License for a restaurant that will serve American and Mexican cuisine. A Class “F” license requires 50 percent food sales and allows the “on sale” of alcoholic beverages with no bar allowed. He said after the required background investigation of the applicant there were no areas of concern and the Liquor Control Board voted to approve the issuance of the license.
Commissioner Piepkorn moved the application be approved.
Second by Gehrig. On call of the roll Commissioners Piepkorn, Gehrig, Grindberg, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Hearing on Renaissance Zone Project for Great Plains Mercantile Holdings, LLC Continued to 10/7/19:
A Hearing had been set for this day and hour to receive comments on a Renaissance Zone Project for Great Plains Mercantile Holdings, LLC for a new construction project located at 401 Broadway Avenue and 410 and 412 5th Street North ; however, the applicant has requested the Hearing be continued to October 7, 2019.
Commissioner Grindberg moved the hearing be continued to 5:15 o’clock p.m. on Monday, October 7, 2019.
Second by Gehrig. On call of the roll Commissioners Grindberg, Gehrig, Piepkorn, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay the motion was declared carried.
Hearing on Renaissance Zone Project for 201 Hospitality, LLC Continued to 10/7/19:
A Hearing had been set for this day and hour to receive comments on a Renaissance Zone Project for 201 Hospitality, LLC for a rehab project located at 201 5th Street North; however, the applicant has requested the Hearing be continued to October 7, 2019.
Commissioner Grindberg moved the hearing be continued to 5:15 o’clock p.m. on Monday, October 7, 2019.
Second by Gehrig. On call of the roll Commissioners Grindberg, Gehrig, Piepkorn, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay the motion was declared carried.
Resolution Approving a Right-of-Way Alley Vacation of the Alley Between Lots A Through F, Lot T and Lot U of Hagaman’s Subdivision of Part of Block 2, Roberts Addition and Lot 10, Block 2, Roberts Addition (624 2nd Avenue North and 613, 617 and 621 1st Avenue North):
A Hearing had been set for July 15, 2019 on an application for the Right-of-Way Vacation of the Alley between Lots A Through F, Lot T and Lot U of Hagaman’s Subdivision of Part of Block 2, Roberts Addition and Lot 10, Block 2, Roberts Addition.
At the July 15, 2019 Regular Meeting the Hearing was continued to August 12, 2019.
At the August 12, 2019 Regular Meeting the Hearing was continued to August 26, 2019.
At the August 26, 2019 Regular Meeting the Hearing was continued to September 9, 2019.
At the September 9, 2019 Regular Meeting the Hearing was continued to this date and hour.
Current Planning Coordinator Donald Kress said this item has been continued from previous City Commission agendas due to the applicant’s ongoing negotiations with private utility providers in order to secure easements and agreements. He said the City does not have any specifications for a vacation of right-of-way; therefore, the City follows the North Dakota Century Code. He said this is in the Downtown Mixed Use zone (DMU) and is being brought forward by the Kilbourne Group. He said with this vacation, the alley is not very well defined and is actually part of a parking lot, which will be part of the Kesler project.
Commissioner Strand moved the Resolution entitled “Resolution Approving a Right-of-Way Vacation of the Alley Plat between Lots A Through F, Lot T and Lot U of Hagaman’s Subdivision of Part of Block 2, Roberts Addition and Lot 10, Block 2, Roberts Addition to the City of Fargo, Cass County North Dakota” referred to as Attachment “B” be adopted and attached hereto.
Second by Grindberg. On the vote being taken on the question of the adoption of the Resolution Commissioners Strand, Grindberg, Gehrig, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay the Resolution was adopted.
Resolution Adopted Authorizing Right-of-Way Vacation on a Portion of 5th Street North between Blocks 21 and 22, Keeney and Devitt’s Second Addition and Lying North of 4th Avenue North and South of Lot B, Block 1, Great Northern Depot Addition (410 5th Street North):
A Hearing had been set for August 12, 2019 on an application for a Right-of-Way Vacation of a Portion of 5th Street North between Blocks 21 and 22, Keeney and Devitt’s Second Addition and Lying North of 4th Avenue North and South of Lot B, Block 1, Great Northern Depot Addition.
At the August 12, 2019 Regular Meeting the Hearing was continued to August 26, 2019.
At the August 26, 2019 Regular Meeting the Hearing was continued to September 23, 2019.
At the September 9, 2019 Regular meeting the Hearing was continued to this date and hour.
Current Planning Coordinator Donald Kress said this has been continued from previous City Commission agendas due to the applicant’s ongoing negotiations with private utility providers in order to secure easements and agreements regarding those utilities. He said this item and the next item on the agenda are part of the same project on 4th Avenue North and Broadway, often referred to as the old Goodyear Tire facility. The applicant is the Kilbourne Group, he said, and the items have to do with the proposed Mercantile project, which will be similar to the Roberts Commons project with a parking ramp, surrounding retail and residential units. In order to make the project fit on the site and to have vehicle access, he said, the developer proposes to add 21.5 feet to the project. The developer does have a contingency in these applications regarding City and private utilities, he said, and the State requires that all utilities must be accounted for. The City utilities are all accounted for, he said, the applicant is still working with the private utilities to create easements to allow the existing utilities to remain or to define a relocation agreement. The developer does not have all of the required documentation finalized and approved by the City Engineer, he said; therefore, the contingency allows the City Commission to approve the plat, which then allows the project to keep moving forward as the developer continues to work with private utility providers.
In response to a question from Commissioner Piepkorn asking since he owns property to the east of this project and has signed an easement with the developer, should he recuse himself from the vote, City Attorney Erik Johnson said as long as Commissioner Piepkorn does not have a direct and/or substantial personal or pecuniary interest in the project, it does not constitute a conflict and he does not have to recuse himself from the vote.
Commissioner Piepkorn said he does not have a personal or financial interest in the project.
In response to a question from Commissioner Strand asking if the vacated land becomes part of the lot that will be developed and what is the cost to the City, Director of Strategic Planning and Research Jim Gilmour said the land is added to the size of the lot and the developer will pay taxes on the land. He said as far as the land’s value, the purchase price of the property when the developer acquired it was about $45.00 per square foot. He said the right-of-way does not belong to the City; it belongs to the adjacent property owner and anytime the City vacates a right-of-way, that property is transferred back to the property owner. He said it is not publicly owned property; it is owned by the property owner who agrees to permit a way for the public to gain access to property. The ownership was always theirs, he said; therefore, it is not a gift from the City in any way, shape or form.
Commissioner Grindberg moved that the Resolution entitled “Resolution Approving Right-of-Way Vacation of a portion of 5th Street North Between Blocks 21 and 22, Keeney and Devitt’s Second Addition and lying North of 4th Avenue North and South of Lot B, Block 1, Great Northern Depot Addition to the City of Fargo, Cass County, North Dakota” and referred to as Attachment “C” be adopted and attached hereto.
Second by Gehrig. On the vote being taken on the question of the adoption of the Resolution Commissioners Grindberg, Gehrig, Piepkorn, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay the Resolution was adopted.
Resolution Adopted Authorizing Alley Vacation of the Alley in Block 21, Keeney & Devitt’s Second Addition (401 Broadway North):
A Hearing had been set for this day and hour to consider an application for a Alley Vacation of the alley in Block 21, Keeney & Devitt’s Second Addition.
Commissioner Grindberg moved the Resolution titled “Resolution Approving Alley Vacation of the alley in Block 21, Keeney & Devitt’s Second Addition to the City of Fargo, Cass County, North Dakota” and referred to as Attachment “D” be adopted and attached hereto.
Second by Piepkorn. On the vote being taken on the question of the adoption of the Resolution Commissioners Grindberg, Piepkorn, Gehrig, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay the Resolution was adopted.
Appeal of the Planning Commission’s Approval of a Conditional Use Permit to Allow a Bed and Breakfast in the Chas A. Roberts Addition Denied (611 8th Street South):
A Hearing had been set for September 9, 2019 on an appeal of the Planning Commission’s Approval of a Conditional Use Permit that would allow a Bed and Breakfast in the Chas A. Roberts Addition.
At the September 23, 2019 Regular Meeting the Hearing was continued to this day and hour.
Planning Director Nicole Crutchfield said this issue was continued at the September 9th meeting in order to allow more time to possibly come up with a compromise. She said there has been a lot of discussion the past two weeks with neighbors and attempts to find a compromise; however, a compromise could not be found. She said one point of clarification she would like to make is that the City Commission voted three to two to not require a super majority vote on this item.
Commissioner Grindberg said he has spent considerable time over the past two weeks with the Planning Department and with those for and against granting the approval. He said a compromise could not be reached and members of the City Commission will have to make a decision as to what they think is the right thing to do.
Commissioner Piepkorn said this block is very unique and has some of the most special homes in the City as far as historic value. He said there are appropriate places to put businesses and this block is not one of them; therefore, he will not be voting in favor of this permit.
Commissioner Strand moved the Appeal of the Planning Commission’s approval of a Conditional Use Permit to allow a bed and breakfast in the Chas A. Roberts Addition be denied.
Second by Grindberg. On call of the roll Commissioners Strand, Grindberg, Gehrig and Mahoney voted aye.
Commissioner Piepkorn voted nay.
The motion was declared carried.
Public Hearing on Amendments to the 2019 Action Plan Community Development Block Grant (CBDG)/HOME Investment Partnerships Programs:
A Hearing had been set for this day and hour to consider Amendments to the Community Development Block Grant (CBDG) and Home Investment Partnership Programs.
Community Development Planning Coordinator Tia Braseth said the proposed amendments include identified scope, location and budget for activities under the previously approved HOME Senior Affordable Housing Development project. She said this item is for public hearing only and no action is required at this time. She said final consideration of the amendments will be October 7, 2019, after the 30-day public comment period has ended. She said the public comment period runs through September 26th and comments may be received in person, in writing, through email or by phone.
Mayor Mahoney closed the public hearing.
Application Filed by City Flats, LLC for Payment in Lieu of Tax Exemption (PILOT) Approved:
A Hearing had been set for this day and hour on an application filed by City Flats, LLC for a payment in lieu of property tax exemption for a project at 1329 5th Avenue North, which the applicant will use to build a new 42-unit, low-income housing project.
No written protests have been filed for the attention of the Board.
The Board determined that no person is present at this Hearing to protest or offer objection thereto.
Director of Strategic Planning and Research Jim Gilmour said the developer is also applying for tax credits from the Low Income Housing Tax Credit (LITC) program administered by the State of North Dakota and if approved, will be required to offer 100 percent of the units to low-income people in the community. Nine of the units will be supportive housing, he stated, aimed at people who are homeless and therefore the developer may not be able to collect any rent. He said four units would be very low income and more than 60 percent of the units would be for people earning less than half the median income in Cass County with an average of $603.00 per month. The reason the City has a policy of supporting these projects with lower property taxes, he said, is when the City Assessor values a building, they cannot look at the rent and restrictions in determining value; therefore, the Assessor will look at this building just like any other apartment building and assess its worth at $5.7 million. The property tax on the building would then be $87,000.00 a year or roughly $173.00 per month per apartment and that becomes a burden for the owner who is trying to manage the building and make it affordable. He said LITC does not cover all of the costs of the building including mortgages and operating expenses. The City has always supported LITC and still requires the developer to pay a certain percentage of property taxes. The community needs low-income housing, he said, particularly supportive housing for people who are homeless. The applications for LITC are very competitive, he said, and if the City does not support the applicant financially with lower property taxes, it is unlikely this project would be able to get funding and the developer would not be able to proceed. He said there are typically nine to 10 applications per year for LITC and only four or five are successful. This particular one was unsuccessful last year, he said; however, this year the applicant is optimistic. The School District and Cass County are willing to participate if the property tax exemption is granted, he said, and the City will receive $18,000.00 a year in property taxes the first year and that amount goes up about 2 percent a year for 15 years. In addition, he said, the requirements of the State of the North Dakota are these housing units have be to be affordable for 30 years.
Commissioner Strand said this is the type of housing Fargo needs and he is very black and white when it comes to tax breaks for market rate housing, especially when apartments have been overbuilt. Due to the population of North Dakota, he said, Fargo is limited in its LITC relative to the program’s availability. He said when the City can put this amount of support into this type of project on top of having 30 years of affordability for 42 different units, he thanked the developer for bringing this project to the City.
Commissioner Strand moved that the application filed by City Flats, LLC for a 15-year payment in lieu of tax exemption pursuant to Chapter 40-57.1, NDCC be approved as follows:
Year 1 $17,919.00
Year 2 $18,278.00
Year 3 $18,643.00
Year 4 $19.016.00
Year 5 $19,396.00
Year 6 $19,784.00
Year 7 $20,180.00
Year 8 $20,583.00
Year 9 $20,995.00
Year 10 $21,415.00
Year 11 $21,843.00
Year 12 $22,280.00
Year 13 $22,726.00
Year 14 $23,180.00
Year 15 $23,644.00
Second by Piepkorn. On call of the roll Commissioners Strand, Piepkorn, Grindberg and Mahoney voted aye.
Commissioner Gehrig voted nay.
The motion was declared carried.
Application Filed by Computer Telephony Innovations d/b/a Voxtelesys for a 5-Year Property Tax Exemption Approved:
A Hearing had been set for this day and hour on an application filed by Computer Telephony Innovations d/b/a Voxtelesys for a 5-year, 100% property tax exemption for the purchase and remodeling of an existing building at 509 25th Avenue North where the applicants telecommunications and software development company will manufacture telecommunications switching and billing software.
No written protests have been filed for the attention of the Board.
The Board determined that no person is present at this Hearing to protest or offer objection thereto.
City Assessor Ben Hushka said Voxtelesys is a telecommunications service and a software development company. In 2018, he said, the company partnered with the ND Center of Excellence at NDSU to work on a joint research project. Five software engineers were hired and a sixth will be added this month, he said, and the grant for this project runs through May 31, 2020, at which time five of the six NDSU engineers will become employees of Voxtelesys. The business will combine the current Voxtelesys custom services and make them available through mobile apps.
In response to a question from Commissioner Grindberg asking about the business and in particular its cell phone scrubbing app, Bruce Burke, owner and manager of Voxtelesys, said his company wrote an application where customers can comply with the Telephone Consumer Protection Act (TCPA) requirements that the Federal Communications Commission (FCC) requires that a person cannot machine-dial cell phones. He said he is sure that everyone in this room has received phone calls they do not want and with this app, every single phone call and every single phone number is looked up and validated as to whether it is an actual cell phone and where the number originates.
In response to a question from Commissioner Gehrig asking if he does not get the incentive will the expansion continue, Mr. Burke said the expansion will continue and the decision was made three years ago to move from Nebraska to North Dakota due to the number of developers graduating from NDSU, the business environment and incentives. He said the business has quickly outgrown its current office and is in desperate need of additional space for computer networking servers and a software development lab. A building to purchase has been found that will perfectly fit the current and long-term plans for the business, he said, including room to add office space as needed. Projections are to go from the 11 current employees to more than 40 employees in year five, he stated, and many of the software developer positions pay upwards of $35.00 per hour.
Commissioner Piepkorn moved the application filed by Voxtelesys for a 5-year, 100% exemption for improvements at 509 25th Avenue North pursuant to Chapter 40.57.1, NDCCC be approved.
Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Strand and Mahoney voted aye.
Commissioner Gehrig voted nay.
The motion was declared carried.
Special Assessments for Maintenance of the Skyway System Approved:
A Hearing had been set for this day and hour on the special assessments list for maintenance of the Skyway System in the City of Fargo, North Dakota.
No appeals have been filed in writing against any item appearing on such special assessments list and no person is present at this Hearing to appeal or offer any objection thereto.
City Auditor Steve Sprague said the City Commission annually approves the assessment to the properties connected to the Skyway System and notices have been sent to property owners. He said the assessment this year is more than last year at about $120,000.00; however, the amount assessed to each individual is going down due to the fact that the parking ramp was added, which provides additional dollars. He said the assessment funds are used for heating, cooling, maintenance and cleaning of the Skyway System.
In response to a question from Commissioner Gehrig asking if any of the businesses protested the assessments, Mr. Sprague said they had not.
Commissioner Piepkorn moved that the special assessments list for maintenance of the Skyway System be and the same is hereby approved and confirmed and ordered filed in the office of the City Auditor and that the City Auditor's Office be instructed to proceed to collect the assessments in the manner provided by law.
Second by Gehrig. On call of the roll Commissioners Piepkorn, Gehrig, Grindberg, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
First Reading of Ordinances Relating to E-Cigarettes and E-Liquids and Restricting the Sale of E-Liquids to Minors:
Assistant City Attorney Nancy Morris said these Ordinances are the culmination of several meetings and discussions following the City Commission’s directive to Fargo Cass Public Health (FCPH) to review and consider Ordinance revisions in light of recent State Legislation and a Board of Health discussion regarding the increase of vaping and smoking by minors. She said the Ordinances address the sale and procurement of vaping products, clarifying minors between the ages of 14 and 18 who are determined to be selling, purchasing or using these prohibited products are in violation of the law, are subject a $25 non-criminal fee and must attend a tobacco education program. There is no distinction in the education and cessation program provided by FCPH, she said, which eliminates the need for additional program language. She said at the next City Commission, she will present a new Ordinance that will parrot State Legislation by prohibiting the sale of flavored e-liquids to minors and establishing penalties for violations, with escalated penalties for repeat violations.
Larry Anenson, Director of Health Protection and Promotion at FCPH, said vaping is a public health concern and there have been some recent deaths. He said the Centers for Disease Control (CDC), the Food and Drug Administration (FDA) and other partners have been investigating a variety of different pulmonary outbreaks related to vaping. He said youth’s access to e-cigarettes is a serious issue including harming brain development and inhaling toxins, as well as the addiction component. Research has shown, he stated, that individuals under the age of 19 oftentimes will have addictions to other drugs later and tobacco vaping is considered a gateway drug. He said there is some talk about the black market producing e-liquid; however, e-liquid has chemicals, is addictive and is not a safe alternative to smoking. As time goes on more research will come out, he said.
In response to a question from Commissioner Gehrig asking if this is just for flavored e-liquid and is there such a thing as unflavored e-liquid, Mr. Anenson said in his mind there is no such thing as an unflavored e-liquid and to others unflavored is tobacco flavored. In some states, communities have banned flavored e-liquids because there are some that are bubble gum or gummy bear flavored, which appeals to children.
Darius Endres, owner of Sports Vape in Fargo, says he has been in business for six years and he does not oppose fines. He said he nor anyone who works in his shop sells these products to minors. He said they are adult-only products and he said anyone who works in his shop and sells these items to a minor should get a strict fine.
Ms. Morris said what will be brought back is an adjustment to the penalties that would be applicable as administrative penalties due to the that that now the penalties are as provided by ordinance. She said the first violation is a warning, the second is a three-day suspension and so on.
In response to a question from Commissioner Gehrig asking in comparing this to selling alcohol to minors, and the City recently adjusted the penalties for that, would the individual get fined or would the establishment or both, Ms. Morris said there are two separate violations, one is administrative for the entity for selling to a minor and then there is also a criminal penalty for the individual selling to a minor.
Mr. Endres said during the last Legislative session House Bill 1477 was to ban all flavored vape liquid; however, there was an exemption for tobacco flavored and the language was changed to just a stricter fine. He said if a shop like his or a gas station fails a compliance check, it will just be a probation, which he thinks is too lenient. He said he wants to note that the CDC and FDA both came out recently with warnings not to vape black-market cartridges. He said people are selling cannabis oil mixed with Vitamin D acetate as a thickening agent. He said in more than 80 percent of the cases reported, those people have admitted to vaping illicit THC cartridges, not the products he sells in his store. He said the vaping industry has been around for more than 20 years and it has just been in the past 45 days that these illnesses have been reported. He said he agrees 100 percent and supports stringent fines on businesses and individuals that sell to a minor due to the fact that his business has not been good for the past couple of months due to the stigma. He said every single vape shop in Fargo has passed the compliance checks and he has three layers of ID checks. He said he has asked Representative Gretchen Dobervich to propose some laws to keep these things out of the hands of youth due to the fact that it affects his business.
In response to a question from Commissioner Piepkorn asking if the ordinances include fines for the business or just the employee, Ms. Morris said the actual individual selling the product presently would be subject to criminal penalties and that she will be bring to the next meeting the penalties that are applicable to the business.
Mr. Endres said as far as administrative penalties, he can assure the Board that there is not a business like his that will oppose it.
Mr. Anenson said the Health Department follows the recommendations of the CDC and the at this time, the CDC is recommending and discouraging anyone from using any e-cigarettes until their investigation is completed.
Commissioner Strand said there is a black market for e-cigarettes for minors due to the fact they can be ordered online.
Mr. Endres said any time there is a product with an age restriction, there is going to be a problem. He said even if there is a state statute, youth can still access products online and the City’s role needs to be education.
Mr. Anenson said education and outreach to youth is critical. He said FCPH holds tobacco education classes if minors are caught selling or possessing tobacco products, including e-cigarettes. He said compliance checks are done with local law enforcement and every single time, tobacco retailers and vape shops pass; therefore, that is something they should be proud of.
Mr. Endres said when it comes to keeping these items out of kids’ hands. shops like his are not the enemy. He said it is the online retailers and one of the recommendations he gave to Representative Dobervich was to have anyone who wants to purchase these products online pay an extra $5.00 and the courier would check the ID of the person to whom it is delivered. He said South Dakota recently implemented that requirement.
In response to a question from Commissioner Strand about THC vape cartridges showing up in Grand Forks, Mr. Endres said there were two young adults in Grand Forks caught with a lot of cash and dried marijuana flowers, which they were using to make cartridges. He said the same type of incident occurred in Wisconsin, which has been the most problematic state for these illnesses. In Phoenix, he said, they are using oil cartridges, which can be purchased legally from a dispensary. That is how people are dealing cannabis, he said; instead of the dry stuff, they are dealing the oils.
Commissioner Strand said he wishes the City Commission had the authority at the local level to discuss decriminalization and legalization of marijuana products so there would not be the influx of these black market products that are probably the root of the health problems. He said the people have voted to approve medical marijuana and will probably be voting again to approve recreational marijuana. It is a very complex issue and of course, the City Commission stands for public safety and public health; however, he wants people to have choices and freedoms.
Commissioner Strand moved the requirement relating to receipt of Ordinances by the Commission one week prior to first reading be waived and that the Ordinances Amending Section 10-0103 of Article 10-01 of Chapter 10 Relating to the Sale of Tobacco, Sale of Tobacco to Minors and Use and Possession by Minors Prohibited, and Sale of Flavored E-Liquid to Minors Prohibited; Enacting Section 10-0105 of Article 10-01 of Chapter 10, Relating to the Sale of Flavored E-Liquid to Minors Prohibited; and Amending Section 1-0305(C)(3) of Article 1-03 of Chapter 1 of the Fargo Municipal Code Relating to Classification of Ordinance Violations be placed on first reading.
Second by Gehrig. On call of the roll Commissioners Strand, Gehrig, Grindberg, Piepkorn and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Michael Leier and Tonna Horsley Reappointed to the Housing and Redevelopment Authority:
The Board received a communication from Mayor Mahoney recommending that Michael Leier and Tonna Horsley be reappointed to the Housing and Redevelopment Authority.
Commissioner Gehrig moved Michael Leier and Tonna Hosley be reappointed to the Housing and Redevelopment Authority for three-year terms ending September 30, 2022.
Second by Grindberg. On call of the roll Commissioners Gehrig, Grindberg, Piepkorn, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Maranda Tasa Appointed to the Metropolitan Council of Governments Policy Board:
The Board received a communication from Mayor Mahoney recommending that that Maranda Tasa be appointed to the Metropolitan Council of Governments Policy Board to fill the vacancy created by the resignation of Shara Fischer.
Commissioner Gehrig moved Maranda Tasa be appointed to the Metropolitan Council of Governments Policy Board.
Second by Grindberg. On call of the roll Commissioners Gehrig, Grindberg, Piepkorn, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Construction Projects Update:
City Engineer Brenda Derrig stated there have been no accidents to report since the last update and most construction projects are progressing and should be completed on time. Right-of-way small cell deployment is underway along 42nd and 45th Street from Main Avenue to I-94, she said, and the permit review has started for fiber permits Downtown to support future requests. She said northbound Broadway will be closed for a few days this week to evaluate utility issues with the Block 9 project, concrete spot repair continues on 42nd Street from I-94 to 32nd Avenue South and the fire lane on 2nd Avenue near the Post Office was closed temporarily this week for a repair. She said the last mainline pour of the 52nd Avenue South project has been completed and work will now turn to concrete sidewalks, turn lanes and streetlights. She said the roundabout at 2nd Street and Main Avenue is almost complete and should be open east-west by October 11th. She said there has been a delay on the northeast corner of the project where the floodwall is being installed.
Applications for Property Tax Exemptions for Improvements Made to Buildings (Moved from the Consent Agenda):____
commissioner Piepkorn asked that these items be moved from the Consent Agenda to the Regular Agenda in order to highlight the fact that there are tax incentive programs available for homeowners.
Commissioner Piepkorn moved the applications for Property Tax Exemptions be approved, as presented.
Second by Grindberg. On call of the roll Commissioners Piepkorn, Grindberg, Gehrig, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the motion was declared carried.
Commissioner Grindberg moved that the Board adjourn to 5:00 o’clock p.m., Monday, October 7, 2019.
Second by Gehrig. All the Commissioners voted aye and the motion was declared carried.
The time at adjournment was 6:11 o’clock p.m.