July 24, 2023 Minutes

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., July 24, 2023.
The Commissioners present or absent were as shown following:
Present: Kolpack, Piepkorn, Preston, Strand, Mahoney.
Absent: None.
Mayor Mahoney presiding.

The Mayor read a message with the following information regarding the July 14th incident: Fargo Police Officer Andrew Dotas is still in critical but stable condition, but continuing to show improvement, he said, and Officer Tyler Hawes is in fair stable condition and also making good improvement. He said Karlee Koswick, the civilian injured in the incident, is now in rehab and making good improvement, and Officer Zach Robinson is with his family. The Mayor thanked Zach for his heroic efforts. There will be a Celebration of Life Service on Wednesday, July 26th, at theScheels Arena, he said. A funeral and burial was held July 22nd in Pequot Lakes, Minnesota, he said, and many military honors were given to Jake. Jeff and Amy Wallin want to change the atmosphere for the Celebration of Life service for their son, he said, and he and Chief Zibolski will honor that request. Those speaking at the event on Wednesday will talk about Jake’s life, he said, and the service will be about hope and healing. The public is invited to the event, he said, and it will also be streamed live on WDAY. He said this will be a service to celebrate Jake and he then asked for a moment of silence.

Order of Agenda Approved:
Commissioner Piepkorn moved the Order of the Agenda be approved.
Second by Kolpack. All the Commissioners voted aye and the motion was declared carried.

Minutes Approved:
Commissioner Strand moved that the Minutes of the Regular Meeting of the Board held on July 10, 2023 be approved as read.
Second by Preston. All the Commissioners voted aye and the motion was declared carried.

Consent Agenda Approved:
Commissioner Kolpack moved the Consent Agenda be approved as follows:

1. Findings of Fact, Conclusions and Order of the Board of City Commissioners of the City of Fargo for property located at 421 15th Avenue North.
2. Waive requirement to receive and file an Ordinance one week prior to 1st reading and 1st reading of an Ordinance Amending Section 25-1506 of Article 25-15 of Chapter 25 of the Fargo Municipal Code, Relating to
Licenses-Classifications.
3. 2nd reading of the following Ordinances:
a. Rezoning a Certain Parcel of Land Lying in Veterans Industrial Park Addition to the City of Fargo, Cass County, North Dakota.
b. Enacting Article 25-38 of Chapter 25 of the Fargo Municipal Code Relating to Commercial Pedal Car Vehicles.
c. Amending Section 8-0311 of Article 8-03 of Chapter 8 of the Fargo Municipal Code Relating to Regulations Governing Operators.
4. Pledged securities as of 6/30/23.
5. Amended Gaming Site Authorization for Sharehouse, Inc. at Speck’s Bar.
6. Applications for Games of Chance:
a. El Zagal Shrine Temple for a calendar raffle from January through December 2024.
b. Fargo North High School for a raffle on 4/13/24.
c. Fargo North High School for a raffle from 8/8/23 to 5/30/24.
d. Fargo North High School for a raffle from 11/20/23 to 2/29/24.
e. HERO; Healthcare Equipment Recycling Organization for a raffle and raffle board on 9/29/23.
f. Legacy Children’s Foundation for a raffle on 8/21/23.
g. St. John Paul II Catholic Schools for a raffle on 4/27/24.
h. YMCA of Cass and Clay Counties for a raffle and raffle board on 8/1/23.
i. Nativity Church of Fargo for a raffle on 11/5/23.
j. Holy Spirit Catholic Church for bingo and a raffle from 9/13/23 to 10/8/23.
7. Task Order No. 2 with KLJ Engineering LLC in the amount of $401,182.60 for Floodwall Repair Project No. FM-24-A0.
8. Change Order No. 5 for a time extension to the substantial and final completion dates of 8/16/23 and 8/31/23 for Project No. MP-20-A2.
9. Contract Amendment No. 1 in the amount of $68,100.00 for Project No. MS-23-C0.
10. Contract Amendment No. 1 in the amount of $25,500.00 for Project No. NR-24-B0.
11. Payment to Key Contracting, Inc. in the amount of $274,513.00 to complete emergency sanitary sewer repairs (Project No. UR-23-C1).
12. Consent to Construction Agreement with Dakota Plains Properties, LLC at 315 27th Circle South.
13. Encroachment Agreement with Great Plains 1001 Holdings, LLC.
14. Encroachment Agreement with C. Nicholas and Ene K. Vogel for property located at 1001 8th Street South.
15. Memorandum of Offer to Landowner for Easement (Temporary Construction Easement) with Mark E. and Barbara B. McCourt (Project No. FM-19-C).
16. Memorandum of Offer to Landowner for Easement (Temporary Construction Easement) with Darrell R. and Jessica L. Johnson (Project No. FM-19-C).
17. Contract and bond for Project No. UN-23-B2.
18. Contract and bond for Project No. TR-23-A1.
19. Final Balancing Change Order No. 8 in the amount of $2,805.68 for Improvement District No. BN-21-H1.
20. Change Order No. 2 in the amount of $69,240.00 for Improvement District No. BN-22-C1.
21. Final Balancing Change Order No. 2 in the amount of $1,971.00 for Improvement District No. PN-23-C1.
22. Bid award to Dakota Underground Company, Inc. in the amount of $1,666,648.81 for Improvement District No. BN-23-C1.
23. Contract and bond for Improvement District No. BR-23-H1.
24. Supplement No. 3 to Ground Lease with Park District of the City of Fargo regarding the Carlson Library and Senior Center.
25. Sole Source Procurement with HVS Convention, Sports and Entertainment Facilities Consulting in the amount of $25,600.00 for updated expansion projections (SSP23145).
26. Agreement for Services with Folkways.
27. Purchase of Service Agreement with Cass County Human Service Zone.
28. Funding Approval/Agreement with the US Department of Housing and Urban Development for the 2023 Community Development Block Grant and HOME Investment Partnership allocations.
29. Inter-Local Agreement with Cass County, ND and allocation of the 2023 Edward Byrne Memorial Justice Assistance Grant (JAG) Program Funding (CFDA #16.738).
30. Request to transfer and reallocate funds from the Landfill Capital Improvements budget line to the Recycling Drop Site Improvement budget line to complete improvements as presented at the Osgood Recycling Drop Site.
31. Support Equipment and Vehicles Lease Agreement City of Fargo – City of Moorhead.
32. Hazard Mitigation Grant Program Subgrant Agreement for PDM 2018 with The North Dakota Department of Emergency Services (Project No. WW1707).
33. Task Order No. 27 with AE2S in the amount of $203,400.00 for Project No. WA2252.
34. Task Order No. 9 with Apex Engineering Group in the amount of $634,118.00 for Project No. WA2255.
35. Amendment I to the Agreement for Cost-Share Reimbursement Fargo Regional Water System Distribution Extensions Project with the State of North Dakota through the State Water Commission.
36. Resolutions Authorizing Filing of an Application with the ND Department of Environmental Quality for a Loan Under the Clean Water Act and/or the Safe Drinking Water Act:
a. Solid Waste Utility - Clean Water State Revolving Fund (CWSRF) Loan 2 (Cell #s 21 and 22)(Attachment “A”).
b. Water Utility – Drinking Water State Revolving Fund (DWSRF) (Project No. WA2255)(Attachment “B”).
c. Water Reclamation – Clean Water State Revolving Fund (CWSRF) Loan Amendment (Project No. WW1701)(Attachment “C”).
37. Bills in the amount of $10,928,397.07.

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

Resident Comments:
Wess Philome spoke about Jake Wallin.

Interim Financing Agreement Series D for Fargo’s 25% Local Cost Share for Years 2023-2025 Construction Activities Associated with the Red River Valley Water Supply Project (RRVWSP) Approved:
The Board received a Communication from Mayor Tim Mahoney, Lake Agassiz Water Authority (LAWA) Chair, stating the Board previously approved Interim Financing Agreements A, B and C for the startup and continued construction of the RRVWSP. He said the parties to the Series A through C Interim Financing Agreements were the Garrison Diversion Conservancy District (GDCD), LAWA and the Cities of Fargo and Grand Forks.

John Shockley, an attorney representing LAWA, gave a presentation outlining funding and financing for the RRVWSP. He said the 2023 North Dakota Legislative session approved $180 million for the 2023-2025 biennium and the total State commitment for the project to-date is $953 million at a 75% cost share. He shared a 2023-2025 work plan for the Project, outlining construction of the pipeline from the McClusky Canal to Lake Ashtabula, which will serve as the project reservoir. He gave an overview of the Series D and the future series loan needs, debt structure alternatives and alternative financing structures offered by the Bank of North Dakota. Interim agreements between Garrison Diversion and LAWA through Fargo and Grand Forks will fund the local share of ongoing work, he said, with work underway on a Project Participation Agreement and Water Supply Agreement to identify all final project participants. The interim agreements have been developed since the State Legislature is funding it in increments, he said, and Fargo, Grand Forks and the Garrison Diversion are prepaying expenses subject to later reimbursement by project participants. He shared the models and funding and the share amounts of the Interim Agreements for the Series A, B, C and D agreements and said a local cost share of $318 million will be required through the 2031-2033 Biennium. He outlined the response from the Bank of North Dakota and debt structure alternatives, comparing traditional level vs. shaped principal repayment. The loan application has been completed and Grand Forks has approved the Series D Agreement, he said and the Loan application review by the State Water Commission is expected August 10th with final underwriting and loan closing in early fall. He said he will return for a presentation on the final terms.

In response to a question from Commissioner Strand asking what protections are in place if there were a significant drought, and jurisdictions all the way down the Missouri River could say Fargo does not have a right to that water, Mr. Shockley said having the water rights in place and the level of insurance the project provides is a good thing for the City and for the Red River Valley.

Commissioner Strand moved the Interim Financing Agreement Series D for Fargo’s portion of the 25% local cost-share for years 2023-2025 construction activities associated with the Red River Valley Water Supply Project be approved.

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

Application Filed by Horse Race North Dakota d/b/a The North Dakota Horse Park for an Alcoholic Beverage License Approved:
A Hearing had been set for this day and hour on the application filed by Horse Race North Dakota d/b/a The North Dakota Horse Park for a Class "N" Alcoholic Beverage License at 5180 19th Avenue North, 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.

Commissioner Piepkorn moved the application be approved.

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

Application to Transfer the Alcoholic Beverage License from Wurst Pub LLC d/b/a Wurst Bier Hall to Two Start Boys LLC d/b/a Wurst Bier Hall Approved:
A Hearing had been set for this day and hour on an application to transfer the Class "FA-RZ-M" Alcoholic Beverage License from Wurst Pub LLC d/b/a Wurst Bier Hall to Two Star Boys LLC d/b/a Wurst Bier Hall at 630 1st Avenue North 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.
Commissioner Piepkorn moved the application be approved.

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

Request for the Rezoning of Land in Valley View Estates Fourth Addition Withdrawn (4606-4890 Decorah Way South):
A Hearing had been set for April 3, 2023 on a request for zoning change in Valley View Estates Fourth Addition.
At the April 3, 2023 meeting the Hearing was continued to May 1, 2023.
At the May 1, 2023 meeting the Hearing was continued to June 12, 2023.
At the June 12, 2023 meeting the Hearing was continued to this day and hour; however, the item has been withdrawn.

Hearing on a Zoning Change and Plat for Southwest Fargo Mission Second Addition Continued to August 21, 2023 (4451, 4455, 4475 40th Avenue South):
A Hearing had been set for July 10, 2023 on a request for zoning change in Southwest Fargo Mission Second Addition.
At the July 10, 2023 meeting the Hearing was continued to this day and hour; however, staff is requesting the Hearing be continued to August 21, 2023.
Commissioner Preston moved the Hearing be continued to 5:15 o’clock p.m. on Monday, August 21, 2023.

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

Resolution Adopted Approving Radio Second Addition (5709-5790 53rd Avenue South):
Current Planning Coordinator Donald Kress said the Radio Second Addition is a Major Subdivision with a Vacation of Right of Way. He said the property is located on the west side of Veteran’s Boulevard, south of 52nd Avenue South and is currently undeveloped with no zone change is being proposed.

Commissioner Preston offered the following Resolution and moved its adoption:
BE IT RESOLVED BY THE BOARD OF CITY COMMISSIONERS OF THE CITY OF FARGO:
WHEREAS, A Plat has been filed in the office of the City Auditor entitled “Radio Second Addition” containing 5 Lots, 1 Block, and 16.63 acres of land more or less, located at 5709-5790 53rd Avenue South; including a Vacation of a portion of 53rd Avenue South Right-of-Way; and
WHEREAS, A Hearing was held April 4, 2023 by the Fargo Planning Commission, and notice of such Hearing had been published, as required by law, and said Plat had been approved by the Fargo Planning Commission and by the City Engineer; and
WHEREAS, The City Auditor's Office published a Notice of Hearing on said Plat in the official newspaper for the City of Fargo on June 21 and 28 and July 5 and 12, 2023 that a Hearing would be held in the Commission Chambers, City Hall, Fargo, North Dakota at 5:15 p.m., July 24, 2023 at which time said Plat would be considered and all interested persons would be heard.
NOW, THEREFORE, BE IT RESOLVED, That the findings and recommendations of staff and the Planning Commission be accepted and the Plat entitled “Radio Second Addition” be and the same is hereby in all things affirmed and approved on the basis that it complies with the Standards of Article 20-06, and all other applicable requirements of the Land Development Code, and that the Mayor of the City of Fargo and the appropriate City Officials are hereby directed to endorse their approval on the Plat and then direct Petitioner to file same for record in the Office of the Recorder of Cass County, North Dakota.

Second by Kolpack. On the vote being taken on the question of the adoption of the Resolution Commissioners Preston, Kolpack, Piepkorn, Strand and Mahoney voted aye.
No Commissioner being absent and none voting nay, the Resolution was adopted.

Application Filed by The Wave by EPIC, LLC for Payment in Lieu of Tax Exemption (PILOT) Referred Back to the Economic Development Incentive Committee for Further Review:
A Hearing had been set for this day and hour on an application filed by The Wave by EPIC, LLC for a payment in lieu of property tax exemption for a project to be located at 4410 and 4471 24th Avenue South, which the applicant will use in operating a full-service water park resort.

Director of Strategic Planning and Research Jim Gilmour said the City received a request for a PILOT for 17 years on two properties at 4410 and 4471 24th Avenues South. He said the proposed project is a water park, hotel, parking ramp and a third building. The request was referred to PFM, one of the City’s financial advisers, he said, and that review indicates the project is not feasible without a property tax exemption; however, a 10-year property tax exemption should be sufficient to make the project feasible. This exemption would also be limited to the hotel and water park, he said, not the third building. The Economic Development Incentives Committee voted 5-0 to recommend approval of a 10-year property tax exemption, he stated, with the conditions that there be a 500-space parking ramp free and open to the public, construction of the proposed hotel and water park and an additional $79 million of private development on the site in a time certain. He said a Development Agreement will need to be prepared to implement this project. He said the City wants a parking ramp to help provide additional parking to neighboring developments, including the youth baseball fields, Curling Club, youth hockey arena and the Red River Zoo, as well as reducing development density. A parking ramp takes up less space than surface level parking, he said.

Wess Philome, Fargo, said the tax breaks the City gives is making it more expensive to live in Fargo and at some point, people are going to start moving away due to rising rent and inflation. He asked if the City is paying attention to this to ensure it does not go too far and does not come back on the taxpayers.

Commissioner Piepkorn said the City is not giving developers any money; the City is deferring the time developers have to pay property taxes. He said the question that is asked by the City is what is the current property tax being paid, and on this property, it was not paying any, and then what will the property taxes be after the development is completed, that is the key question. He said the critical point is making sure the City has in writing what is promised and the developers do it. He said this is a positive project for the City and he supports it.

Blake Nybakken, Chief Operating Officer for EPIC, said EPIC needs the PILOT to fund the parking ramp, with construction ready to start this summer. He said the PILOT will primarily help fund a public parking ramp as part of the overall project and a delay could force EPIC to drop the ramp and build less expensive surface parking lots. He said the public parking ramp is zero risk to the City and EPIC has designed the ramp so there will be a surplus of parking even after the full build out. He said when games are going on at Anderson Fields, 24th Avenue South is full of cars and the Zoo’s parking lot is inundated. A parking ramp also allows for high density, he said, which falls in line with the City’s goals with smart growth, walkable communities and the Go2030 plan. He said this was a former Park District property and did not generate any property tax and in his estimates, the development will bring in more than $400,000.00 in property taxes annually once it is online. The two buildings opening soon are a $36 million project, he said, and when you look at the comparison between the full build out as proposed versus what would happen if EPIC has to replace that with all surface parking, it is less development of $78 million and a loss of more than $1.1 million annually in property taxes. EPIC is not asking for any cash up front for the parking ramp, he said, and is not asking for the City to own it or do any maintenance or management of it; EPIC is asking to be able to leverage the future tax savings so the company can build the water park and a 500-space free and open to the public parking ramp.

Alex Christensen, Christiansen Companies, said he has spent time on the financial analysis of this project and he has concerns. He said his company has a lot of experience with hospitality and multi-family, they are the developers of Kingpins and Suite Shots, and typically they look at financing these projects at about 65%. He said the City's financial adviser stated this project was at 78%, which is high, and the only reason they need an incentive is to please their bank’s coverage ratio, due to the fact that EPIC is under-capitalized. He said it does not seem right that the City is funding the difference that EPIC needs for cash flow. It seems like this is rushed, he said, and the City wants to make this project happen financially to please EPIC’s bank. This is a slippery slope, he said, and there is going to be a lot of people trying to game the system and take advantage of what happens here tonight. He said he would be happy to be an adviser for a policy and the City should not be making an exception for one project. He said other developers have also voiced concerns over the tax break.

Charley Johnson, President of the Fargo-Moorhead Convention and Visitors Bureau, said there are two things people in this area have been asking about for a very long time and number one is a water park and number two is a particular retail store. He said a water park that would be accessible year round would be huge to visitors. He said he supports getting a destination like a water park developed in the community and he thinks the City Commission should take whatever steps are feasible and advisable to do it. He said it would be particularly nice to have the water park in a complex with hockey, the zoo and youth baseball as well as another hotel.

Sally Jacobson, Red River Zoo, said she would love to see this whole neighborhood develop and to have a partner with the water park across the street, which will help create a destination node for the community. She said the zoo is a non-profit and has to balance the budget every year with just earned revenue. Having to repave the zoo parking lot after the youth baseball season is financially difficult, she said, so she supports getting a parking ramp built.

Commissioner Strand said the City does not have a policy that allows this project to receive a PILOT. He said it is egregious on the responsibilities of the Board to act arbitrarily and not have a policy to direct this. He said the project does not meet the existing policy guidelines for the PILOT tax break and the City must first go through a policy change process. He said PILOTs are used to fund job growth, not hospitality projects or water parks. He said this request is for a PILOT that does not qualify and he will not go down the path where policy is not what is driving the Board.

Commissioner Preston said it is concerning that the City is making an exception to a current policy. She said this is a wonderful project and the water park would be great. Higher density is something she supports, she said; however, it is greenfields, there is no blight, no affordable housing and there is no over the top kind of infrastructure costs. She said it would be wise for the City to do some research and analysis of what kind of floodgates this will open. There is no guarantee that ultimately a policy would be adopted and a number of projects in the recent past have been turned away due to the fact that they did not meet the policy requirements. She said this does not feel right and she would argue that it feels like a direct subsidy to a project that should be able to make it on its own.

Mayor Mahoney said delaying and changing the policy puts the project at risk. He said the numerous benefits provided by the development justify an exemption from the existing policy.

Commissioner Kolpack said she looked at the report from PFM and did a lot of research. She said she supports this project, yet she is struggling with the fact that the policy is going to be changed post-decision. She said she hopes a policy is done in an expedited way and comes back to the City Commission.
Commissioner Strand moved that the application filed by The Wave by EPIC, LLC for a 10-year payment in lieu of tax exemption be referred back to the Economic Development Incentive Committee for further review.

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

Appointment to the Special Assessment Commission Approved:
The Board received a communication from Mayor Mahoney recommending Steve Bladholm be reappointed to the Special Assessment Commission.
Commissioner Preston moved Steve Bladholm be reappointed to the Special Assessment Commission for a three-year term ending July 1, 2026.

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

Liaison Commissioner Assignment Updates:
Commissioners offered their condolences and prayers to the officers fallen, their families and everyone at the Police Department.
Commissioner Kolpack thanked the Fire Department and the team who were at the July 14th call and the Communications Department for all the work they have done.

Mayor Mahoney said there is nothing harder than the death of an officer who truly wanted to work for the City and the loss of Jake Wallin is a huge blow to the community. He thanked all involved.

Commissioner Preston added that her thoughts are also for the two officers still in the hospital and for the community member who was injured and to the Wallin family. She thanked the PD, Fire, EMS and all the first responders who were at the scene that difficult day. She said no one envisioned such an event could happen here; however, it could have been so much worse. She wants members of the community to know that there is support no matter what race or religion and if anyone is harassed or feels unsafe, she hopes they will reach out.

Commissioner Kolpack moved that the Board adjourn to 5:00 o’clock p.m., Monday, August 7, 2023.

Second by Strand. All the Commissioners voted aye and the motion was declared carried.
The time at adjournment was 6:30 o’clock p.m.