Planning Commission - workshop

Well, good morning everyone and welcome to day three of our budget workshops. Appreciate everyone's time over the last couple of days. Certainly the conversations after the meetings seem to be, these are going very well and people are certainly appreciative of the level of detail and the opportunity to have the conversations with our department leaders. So with that, I will turn it over to Ms. Thompson for any other introductions or level setting for the morning.

Once again, I just want to make sure that everyone's aware that this information is available online. The website is listed on this page. And then we're going to talk about the agenda. So today we're talking about enterprise funds. That reminded me that I was remiss in my thank yous on Monday. Our enterprise accountants Jean Henning and Kerry Clemons have worked hours and hours and hours to help with these documents, so I really appreciate both of them very much. I wanted to make sure I got that in there. So we have transit and Fargo Dome on tap for the beginning of the day, and then we'll have a break at 9.30, and then we'll go into the utility funds. First, though, we're going to get started with, so picture the big page from the first day with the sun in the middle. We talked about the fact that there are other funds besides the general fund that maybe don't get as much attention as they should. So, we're going to spend a little bit of time on that this morning. And for that, I'm going to turn it over to our Assistant Finance Director that you met on Monday, Wyatt Papenfuse. He's going to get started.

Good morning, Mayor and Commissioners. Yeah, I'm going to lean into Susan's reference about the sun. So thinking about the sun, we see that every day. And while there is Mars and Pluto, which we may not think about, we do need to pay attention to those planets because when we think about our full environment, we need to be cognizant of how decisions in, for example, the enterprise funds, the fiduciary funds, which are our pension plans, along with special revenue, impact our long-term planning and decision-making. Um, so first I did want to point out that we are on page two 82 and there was an error in our scanning. Um, we have our special revenue descriptions printed out there, but then there was a subsequent page on page 315 for health donations, which is not related to the capital projects. It is related to the special revenue funds. So three 15 should have been around two 82. So just setting the context, while the general fund is a key component of the day-to-day operations because it provides the services to our community and internally to the city, having an understanding of the other funds is a critical element of decision-making, long-term planning, and the overall financial picture. So thinking of the past few workshops, we've discussed several items that aren't really handled within the general fund. So thinking of yesterday, the CIP plan, that activity is not in the general fund. You've noticed the capital outlay requests, those typically are not in the general fund either. We talked with planning regarding parking a little bit along with HUD and CDBG. That activity is not in the general fund, but clearly these functions are providing important services to the community. So just as a baseline point of reference, some accounting lingo. Everyone's been really passionate and expressive about their topics. We can talk about debits and credits all day. And so when you do want to get into the meat of it, I would be happy to do that with each of you. And I just really want to reiterate that finance is a service department. And if there are questions, please be sure to reach out to Susan and I, and we will happily discuss and get into the detail. So when we're talking about our funds, just at a high level of background, we have what are considered our governmental activities along with our enterprise or business type activities. So governmental meaning the core services. So the general fund activity, capital projects, special revenue, debt service. And so those are just providing core services throughout the community. And then we also have our enterprise funds, which are kind of serve as a business. So thinking of transit, that is a charge for service type operation, water utility, solid waste, all of these were taking in an income to provide a service beyond our general operations. So in keeping with the theme of the workshop and because we have several new commissioners new mayor This is going to be a high-level overview the detail is within the binder But it's going to be a combination of an orientation to these funds as well as some context to what is actually going on and why they should be You know considered in all our decisions. I All right, so just by definition, a special revenue fund is used to account for and report the proceeds of a specific revenue source that is restricted or committed to expenditures for a specified purpose other than debt or capital projects. So what does that really mean? When we're thinking about restricted fund balance, these are balances that are constrained to a specific purpose by their provider. So that could be a grantor, it could be another government agency or enabling legislation. So thinking about HUD, those are program dollars directly from the federal government and the dollars are restricted to that programming. Similar, there's the opioid abatement dollars where those dollars were part of a large lawsuit that several jurisdictions took part in and we can only use those for the opioid abatement process. So when you think about special revenue funds, I like to think of each fund as kind of having an owner. So over time, we've had anywhere from 20 to 30 special revenue funds, depending on what programs are taking place at the time. So these are kind of some informal categories that I came up with just to help visualize and who you can consider the owner of these funds. So we have some general allocation funds, one of them being the city share of special assessments. We have a revenue stabilization fund. Kind of finance owns these programs and manages the budget and expenditures. And then planning has several program dollars. So they have their neighborhood revitalization initiative, or NRI, several acronyms within planning. Community development and block grants, so CDBG. And then funds just directly from housing and urban development. Those are managed by planning. Public health has dollars within their opioid abatement fund. They also have a donation fund. There are several in public safety as well, including the regional training center, court forfeits, SWAT, Red River Valley UAS, along with the public safety sales tax. And then we have some facility and special district funds. So that would include parking, the Newman Stadium, the convention and visitor bureau funding, along with the Skyway Maintenance Fund and the downtown bid. So giving some context as to what is going on within each fund, like I said, the budget detail is in subsequent pages in the packet if you do want to look at those, but just at a high level. So first we'll start with the city sheriff's special assessments. So within North Dakota Century Code, there's a levy authorization for municipalities to levy a tax to cover special assessments on properties owned by that jurisdiction. Now there's been discussion and conversation about why are we assessing ourselves and what is this program? am not an expert in the special assessment spread process but at a high level if there is a property that we owned that we did not spread the special to that would have a negative impact on the parcels owned by private individuals so it's kind of an equity type thing we are authorized to levy mills for that so we Within on our property tax bill for the city, it's comprised of our general fund levy, along with the levy for this special assessment district. And then we do levy this property tax on behalf of the airport authority as well. So that's what comprises the city's portion. So annually we take a look at what specials are coming up due for the city, and then we pay, we budget in a way that we can levy those mills. Thinking about properties that would be paid from this, If there were a certain project, thinking of Lake Fargo along 52nd Avenue, that's attributed to storm sewer, right? So we can attribute those specials to that fund because it's specific to that kind of project. However, there are several kind of random tracts of land throughout the city that aren't really related to any particular project or function. However, we own them and we do pay the specials on those. And then just as a reminder, the city is exempt from general property tax, but we do pay our share of special assessments along with any maintenance and drain fees. So that activity is going there. It's basically receipts from the county, and then we in turn pay the county back. The Convention and Visitor Bureau, so there's a lodging tax that all of the hotels are collecting and remitting to us, and then monthly we remit that back to the CVB. There's the regional training center. So that is the revenue would be agency participation from the agencies that participate in that along with various usage fees. The funding is used for the operating and capital expenditures. There are court forfeits. Incoming revenue would be seized assets from different court cases when you're thinking about those court cases There are different restrictions depending on whether it's a federal case or a state case More local so with the federal dollars technically those are federal funds, which we have several additional oversight and internal control procedures that we need to follow for that and So we work closely with police annually to ensure that the funding is eligible and reported correctly. Similar with SWAT and Red River Valley UAS. So there are contributions from the general fund, agency participation, and the activity would be the operating and capital expenditures. For the Skyway Fund and Downtown Bid, those are essentially kind of a special assessment district. So if you're Business is within the business improvement district. You are allocated a fee. We collect that via the property tax process. We get the receipts from the county and then remit that to the bid. Similar for Skyway, that is typically managed by facilities indicating that there needs to be certain improvements or just a general cost of operating that. And if you are connected or within that, the... jurisdiction of the Skyway, I guess, or the benefit area, you're assessed a fee, we collect that and we use those dollars for improvement. So as an example, last year, there was a large carpet replacement project within the Skyway. That's what those funds were used for. Then we have the planning dollars again. So NRI HUD, those are federal or loan programs, and that covers program costs. We also have a revenue stabilization fund. So this is, these are general fund dollars that are set aside in a specific fund. It's just a holding place that those funds ultimately get reported in our general fund and our year end reporting. So those would just be dollars that the city has committed via policy to set aside as a reserve. It's funded with a transfer in and if ever needed and approved by the commission, we would transfer out to the general fund for operations. Following that, the Newman Outdoor Field, there's an agreement with Newman Field, Fargo Baseball kind of facilities. Administration and finance have been involved in those negotiations in which they're collecting suite revenue. They remit a portion to us, and then we can use that for capital improvements. I talked about the opioid abatement funds as well. Just something to highlight, as we know, Fargo is the host of the county public health program so because of that city of fargo city of west fargo and the county overall participated in the abatement so when they receive their settlement funds they remit that to us at the city and then health manages and determines eligibility additionally they have their donation funds for the gladys ray shelter and mammography Then, within the special revenue funds, there are the parking operating fund and the parking repair fund. The incoming revenue would be fee revenue from parking, whether it's on a surface lot or in a ramp, along with TIF revenue, and then contributions from either the general fund or another funding source. The outgoing would be the ongoing debt service, operating expenses, and capital expenses.

I'm going to talk just a little more about the parking fund. Most of the funds in the special revenue fund that Wyatt talked about are pretty simple. They're in, in, and out. We get the sales tax, we remit it to CVB. Donation gets used for the expenses. Parking is a little more complicated, and I don't want to steal Mark Williams from planning's funder because he got a whole group of us together to talk through an RFP, and we have a new parking provider, and we're all excited about parking again. So we're going to have a brown bag to talk about parking. I guess our question is why is parking a special revenue fund? Shouldn't it be an enterprise fund? Do we expect it to make money or at least cover its costs? So when you look at the last few years, particularly when we added the last parking ramp debt service, we're not covering our costs by a long shot. Next year we're budgeting a loss of about $1 million. So, the primary, you know, revenues that are coming in are, you know, we do charge fees. Those haven't been looked at for a long time, nor have the policies around the parking fees. The other big component is TIF revenues from those parking ramps and other adjacent properties. So, and then, of course, the expenses are the operating expenses and the debt services, the primary driver. We'll be having conversations this fall on more about that. I highlighted in green, you know, we had a little bit of unexpected, you know, the GTC ramp is not in operation, nor is the 4th Street, because we're using that to stage the buses. And the MP lot, I think we were maybe a little optimistic on how quickly that would... no pun intended, but ramp up as far as attendance. I think once the theater opens, that will help a little bit. But more conversation to be had on parking. But I just wanted to point out that that's kind of the big, I would say, oddball one in the special revenue funds. So any questions on that?

I guess I'll call myself. Just curious, how long has parking been in this kind of situation?

Just the last couple years, and we did anticipate it. So when we set up the original loan for the MP lot, the MP lot was a state loan to the max that we could use, and then we had to do a bank loan for part of it. And then we did also an inter-fund loan, so we didn't have to borrow all of it. from external sources. At that time, we also authorized an inter-fund loan to cover a shortfall. Those TIF revenues are going to ramp up over the next few years and should better stabilize that, but I think we need to take a long look at our parking rates and our parking structure.

Commissioner Peterson. Just logistical. Obviously, I've got a number of questions. I happen to have a number of questions regarding a number of funds. Do we want to go piecemeal, or how would you like to handle this, Mr. Mayor?

Since we have about 20 minutes left and how much more would you need we have we have quite a bit? We want to talk about a few other fun So I love it with you if you have a high wheel How about I just listen and then at the end if we have time maybe in white can find some time together Okay, yeah, yeah, thank you. Thanks.

We should have all right Continuing with the other fun categories we'll move on to the debt service funds and so just at a high level here's some background information about debt service funds um thinking about those well that is obviously an important topic and consideration of our operations in general the budgeting component of debt is fairly fairly straightforward so when we're thinking about a project whether it's something within engineering infrastructure city hall as an example np parking ramp a project is approved At that point, typically a funding source is determined, and then we would incur costs and issue a debt. So the revenue is almost always defined in advance. There is funding attributed to that to cover the repayment. And as far as budgeting, we are following the amortization schedule. So that component of budgeting is very straightforward. So looking in your packet in debt service in pages 311A through 311E, that is that first page, the orange sheet is kind of a high-level summary of debt by issuance type. And then following that, there are each individual issuances. The goal here today would just be to give a high-level overview of what the types of debts are, why they are important, and what decisions kind of provide some context for decision-making going forward and how it will impact the city. Once you get past those detailed pages, if you were to go to page 312 of your binder, there's an infographic we've been using kind of summarizing the different types of debt and what typically has been funded there and what their revenue and outgoing sources would be. So I'll just talk through those briefly. So we'll have different TIF notes when a TIF district is approved. The property tax incoming from the county, which had been paid by the developer, is ultimately remitted back to the developer to cover their program. We do have some debt service residual funds so that incoming revenue would be special assessments. So when we go through the assessment process and the issuance, while there is a certain project, as an example, and say it costs $100,000, we do kind of consider an estimate how many people may prepay and not go through the overall assessment period. So those are estimates and there are cases where more people prepay than expected and there may be residual dollars, which can ultimately be used for other debt service, depending on the restrictions of that specific issuance. Our most common would be the refunding improvement bond, or also referred to as a RIB. That's what we use to cover the engineering CIP. So annually, we issue a RIB. For the city, we are incurring costs. Typically, I believe the period is 36 months. You can go kind of retroactively. So if an engineering project may cover two construction seasons, we would bond for that afterwards. And then they go on the special assessment spread and we collect the tax and pay the debt. Then we have the state revolving fund. So those are programs ultimately ran at the state level through DEQ and the public finance authority. It's funding through the EPA for either clean water or drinking water. So those are federal dollars. So it's relatively good consider that subsidized. Typically the rate is anywhere from one and a half to 2%. Additionally, depending on the program, there may be loan forgiveness. We have several of those right now. And so it's considered to be reasonably priced debt and it can cover long-lived assets like the expansion of the water treatment plant and improvement at the water reclamation facility. We have GO bonds and those have covered different things which may be kind of considered like a discretionary type debt. So different parking facilities, fire station, health, city hall, those are either funded with TIF revenues or contributions from the general fund. There are several transfers, thinking of the ball again, while we're collecting that tax in the general fund or whatever charges for services or state aid, we can use those to fund the debt service funds, whether it's for City Hall or different specific programs, which may not be attributed with a funding source such as rates or the TIF revenue. And then finally, there are different issuances that are backed by the water and water reclamation sales tax rates. So there's a quarter cent sales tax and that covers the related debt service interest and fees. So the next slide here. Just kind of thinking of our annual reporting, of course, we're on a 1231 year end. And just for the context for everyone, we typically close our financial year in March annually. So through the winter, we are still receiving invoices for maybe construction or services which are related to the prior report year. So we are moving that activity back to the prior year. We typically close the books at the end of March, April. We go through our audit process April and May, and then we have to issue our report by June 30th. So coming up in August, we'll have a finance committee session in which I Bailey will be here to discuss the audit report and just kind of information background about that. So, The most recent time we have rolled up everything formally would be 12-31-25, and this is where we get to the 1.3 billion number. So what is that comprised of? So looking at the list we've talked about, several of them going forward are currently, so the RIBs, GO, sales tax, appropriation, SRF, direct bank loans, parking debt, TIF loans, and different premiums on the loans. And then we get to kind of the confusing part as far as financial reporting. So GASB related, what does that mean? In the past several years, there have been new reporting standards to help users of the financial statements, whether that's an investor or people like yourselves, the commissioners, to help understand the full, what an agency has committed to. So recently, we had to implement a new standard for leases and subscription type activity. Previously, if we were to sign a lease, as an example, for the underground parking lot under city center, we could just report that activity as annual expense, and we didn't necessarily have to report a liability or the future commitment that we are obligated to. So now that is formally included in our long-term debt, and I think that's good to consider just so everyone knows what we're ultimately responsible for. On the subscription side, thinking of police and Axon and their body cameras, that kind of fits in both parts because they're getting physical equipment, also with storage, which is a subscription type service. And the body cameras and all of that technically are on a, it's almost a lease because they keep getting recycled every so often. So it is good program of course but ultimately we've committed to a large amount of dollars over several years so that is now included in the financial statements then we have our pension liabilities and just to provide some context about that that is not that is not totally due today but that is the city's share of retirement benefits that employees have earned but are not fully funded um it isn't due today and it is technically getting into the accounting part. It's the difference between the estimated benefits and the assets set aside to cover them within the plan. We have a few slides to talk about pension, so I'll get into those later, but that is just a liability that we report annually. Then we have our revenue bonds and special assessments. Thinking about special assessments, that goes back to that city share of special assessments. It's 11 million, but that covers all funds. So there are those general kind of miscellaneous parcels along with properties owned by the enterprise funds. Finally, we have the landfill post-closure liability. And this is the estimated cost that the city is obligated to incur upon the closure of the site. Thinking about that amount, As the cells fill at the landfill annually, we go through a process with the solid waste engineering consultant to determine an estimate of what that liability would be. so thinking through our current year and the budget year of 27 like i said the budgeting aspect is pretty straightforward we're following the amortization tables and if we were to make all payments and not issue any debt really it only goes from 1.3 to 1.1 So when you're looking at the big picture, if we're going to issue a RIB annually anywhere in the $35 million to $50 million range, depending on the engineering CIP and whatever growth is included in that, the amount is pretty much stagnant. So that's where it's important to consider discretionary debt versus projects that are essential. Just a reminder that finance is here to support and provide context in these decisions. I was breaking it down here. So we, in conjunction with the UN administration and our municipal advisors, if there are questions, we can work through them. Any questions about debt?

And certainly probably part of a key conversation in one of our finance committee meetings as well. So we can dig deeper into it. Any other questions? Top line? All right. Thank you.

All right. I do have just a few capital projects and fiduciary funds, which I will work through. So capital projects. Thank you. I just wanted to highlight some of the key ones and just provide some more information. So the engineering infrastructure, as we've discussed, that will be discussed in detail at an upcoming finance committee. There are several different funding sources, whether that's federal or state dollars, our contributions from the enterprise utilities, along with special assessments. Another large capital project fund would be our city building projects. So thinking of that NP ramp kind of activity. Another example, the parking lot work that's taking place, that is all getting coded to fund 402. And whether we have bond proceeds or a funding source within the general fund into there to cover that. And then 475, capital equipment. That one is really kind of... One I wanted to highlight because that is where, for example, if finance were to purchase a workstation, it would get coded to Fund 475. So it's out of the general fund kind of operating activity and in this capital project fund. Another consideration for that Fund 475, there's funding from grants, along with that 20% transfer from the enterprise funds. does not all directly go to the general fund. Portions of it are allocated to funds 475 to cover this activity as well. And the public safety sales tax, which is here. And then this is just a high-level summary of everyone's capital projects rolled, or capital requests for 2027 rolled up in one spot just by fund, which was 23 million requested, 15.9 million was approved by the budget team. Within your binder on pages 320 to 322 is everyone's capital request consolidated in one spot.

As part of the budget team, we compile all of these. They come from each individual department. We work through them. Brenda, primarily the assistant director, city administrator, usually works on this historically. But they work with the different departments. Obviously, everyone throws in their wish list, and we narrow it down by available funds and priorities. So what's listed there is what was funded this year. A few of the things we move, if they're not over $10,000, we move them to the operating department. We just highlighted so that we understand when we talked about the public safety sales tax, there are funds that go towards this to cover the half million dollar lease for the fire truck or the new vehicles for the police. So those are highlighted there as well. That's just more for informational purposes.

And our final other fund category would be our fiduciary. Commissioner Peterson.

Mr. Mayor, thank you. So the building projects fund, the 402, caught my eye. And I'm wondering where, and this is sort of a broad question, typically the way I would manage things, I would start acknowledging future bills within that fund, right? So it would have a balance, meaning we probably need a firefighter training center at some time. This is where I would be building dollars up right now for that spend in 2020. Seven or eight and all the other things that we should be not leasing and should have bought Where does that number exist if at all Is this just in general in the fund balance?

It's not allocated to a certain fund I agree with what you're saying, and I think that's really something we should work towards okay point Thank You

all right so the final category would be our fiduciary funds and this is on page 319 in your binder so fiduciary funds are used to account for resources held for the benefit of other parties outside of the government what does that mean for us at the city um so we have our fiduciary funds typically our main categories are our pension funds and custodial funds So pension we budget for, custodial we don't, but they're still considered within our book of business as we are their fiscal agent. So pension, there is some detail within your binder describing the different plans that we currently manage and participate in. So I believe there was around 2008, 2009, the city plan for general government employees joined within the NDPERS system. Um, so most new employees, if they're not in public safety, join the ND purse plan. However, if you're in public safety, police has their own plan along with fire having their own plan as well. Um, so annually. For the plans that we own, meaning city police and fire, we work with our actuary to do a census study to determine all the members, their contributions, and come up with expected contributions, and we end up with that pension liability balance in our financial statement. We also use reporting from our actuary to determine how much the general fund should contribute to the plan to cover the shortfall. Specifically thinking of the city plan, since it is closed, I guess I would say legacy members contributing to that plan still, but there are still several beneficiaries. So that is a budget decision that needs to be acknowledged as well. And then just wrapping up with the custodial funds. So kind of similar to the airport authority, we assess special assessments on behalf of the park district. So they work with our special assessment team. We provide that information to the county. They collect it. It's remitted to us and we remit that to the park district. We are the fiscal agent for the Diversion Authority. So in conjunction with the Jacobs team, we have staff in our office that are processing the daily AP, AR, financial reporting, working closely with them, and then the seized asset funds. So if there are assets that are seized in a certain case until a decision is made, those funds are kind of on hold in this placeholder. So these funds aren't budgeted, but they are just a part of the full circle globe. So I wanted to highlight those. Any specific questions or comments at this time?

Continue on.

Thank you.

Okay, we're going to move into transit. We listed Julie Wallman on there. Julie's not available today. Today's actually her last day. She's retiring, so we thank her for her service. So Jordan Smith and Cole Swingen from the Transit Department will lead this budget discussion.

Yes, good morning, Mayor and Commissioners. We'll keep things rolling here with transit. Sorry, keep the puns going. Cole's going to start off talking about kind of what we do and services we provide and who we are, and then I will finish up with some more of the budget stuff and kind of the changes we've seen over the last couple years.

Thank you. Good morning. So to give a brief overview of our department, we provide services to the whole metropolitan area, including the cities of Fargo, Moorhead, West Fargo and Dilworth, as well as some specific services on the North Dakota State University campus. We are colloquially known as map bus, even though we are a city of Fargo department, we just kind of chose that moniker just because we operate outside of the city. So we have a common theme that ties us between the metro What we offer is public transportation. I'll go into that a little bit more of exactly what that looks like, but the services that we offer are crucial for residents to be able to attend things such as economic development, so any sort of jobs, any sort of College campuses, additional learning, provides mobility to our senior and aging population, as well as individuals with low income, provides a good quality of life for all of our residents, and gives opportunities for individuals to go about their daily lives, including things such as grocery trips, dialysis appointments, again, jobs, just whatever the community needs from us. So to go a bit into the services that we provide, we have three main types of services. Our fixed route bus system, our ADA complimentary paratransit service, and our MAP bus flex or microtransit service. So our fixed route services include routes that go along the city. There are the large buses that you see around. They operate on fixed routes and fixed timetables, so passengers know exactly where in one bus is gonna be based on those timetables. If somebody needs to get to their appointment, they're able to take a look at the information that we have online, kind of plan out their trip, and then know that there is going to be a vehicle there at a specific time so they're able to reach their destination. ADA complimentary paratransit service is a service that we operate in addition to the fixed route service. The Americans with Disabilities Act requires that we operate paratransit service within three quarters of a mile of any existing fixed route. So with that, we've actually expanded that service to the entirety of Cities of Fargo, Moorhead, West Fargo, and Dilworth, so anybody within city limits is able to access paratransit service if they qualify for the service. The service is essentially for individuals who are unable to ride the fixed route service, so individuals with cognitive or physical disabilities that may preclude them from using that service. We operate paratransit as a door-to-door service, so they're still able to meet their appointments, go get groceries, everything that everybody who uses the fixed route is able to do. And then the third service that we offer is MapBus Flex or Microtransit. This is a fairly new service within the field of transit. It operates similarly to like an Uber or Lyft style service. So it's a kind of shared ride service in that passengers can select a pickup and drop off point within a specific area. And then we'll go and pick them up and then bring them to their destination. We may pick up additional individuals along the way, but again, kind of similar to an Uber or Lyft where you can pick your exact locations that you want to be delivered to. So along with that, we have some other things that we do in the background of those services. We have bus stop and passenger facility maintenance. So we have, I believe, over 80 shelters in the metropolitan area. So maintaining services, making sure that they're clean, free from snow during the winters, maintaining quality services and quality stops for our residents is one thing that we strive to do. We offer travel training and mobility assistance. With that, that's a training program that we offer to help educate agencies to help their individuals learn to utilize the fixed route system. So generally our ADA complimentary paratransit service is significantly more expensive on a cost per ride versus our fixed route system. So our goal is to educate and make individuals feel comfortable with that fixed-route service in hopes that they'll be able to understand how the system works and be able to utilize that versus our paratransit service. So we operate that and provide that to local social service agencies, retirement homes, adult learning centers, that sort of thing. Along with everything that I've touched on so far, we also operate transit planning and scheduling. As you all know, the city's local community is growing and continues to grow. So with that, we get new requests for new routes and new service locations daily. So we take that all into consideration. We have long-term planning for both our routes as well as capital projects. We take this all into consideration both, you know, business and local stakeholder involvement. We listen to the input from passengers, and we also have a study that we do every five years called our Transit Development Plan, which kind of helps shape what the transit services look like in our metro area and look to areas that we can improve, areas that we're doing well, that sort of thing. We also have fleet maintenance. I believe that we have, is it 40-some vehicles, 40-some fixed route? So 47 fixed route vehicles, close to 20 paratransit cutaway vehicles. So all that we have to do daily, monthly routine maintenance to keep them on the road. The larger vehicles have a life of 12 years. Small vehicles have a life of five years. So with that, just doing routine maintenance, our vehicles see tons and tons and tons of miles on the road every single day and every single year. So just making sure that those keep going. We also offer passenger assistance technologies. This is something that we've been working on a little bit more in the recent last couple of years here. We offer a connect payment app so people are able to utilize an app to get on our fixed route system. They just scan QR code that's on their phone or fare boxes, read that, and they're able to get on. So a couple different ways that they're able to utilize our system. We have switched over to a new MapBus paratransit scheduling app. So it used to be where passengers were only able to call in and speak to one of our dispatchers to book a ride. Now they can do the exact same thing on an app. And then we also offer real-time bus stop arrivals. If any of you have been down to Minneapolis, St. Paul, you'll see that around there. Just being able to call a number that we have listed on our stop, you'll receive an automated response that'll tell you exactly when the next bus is going to be there. So just trying to improve conditions for our passengers, make things easier for them to be able to understand the system and to be able to get where they need to go. So with that, there are many other behind-the-scenes responsibilities to make sure that the transit operations run smoothly, that passengers are able to get to their destinations, that we're able to receive the funding that we need to continue operations. So as I had spoken to before, we operate and maintain a diverse fleet of transit vehicles, including larger buses and smaller cutaways. There's maintenance required to the Metro Transit Garage, which is where the vehicles are stored, as well as the Ground Transportation Center, which is our downtown transfer hub, and other transit properties, including the shelters that we have around town. We have some larger transfer points as well that we have to maintain and keep up maintenance. And one of the biggest things that we have to do is ensure compliance with the FTA, or Federal Transit Administration, as well as State of North Dakota and State of Minnesota regulations. So one thing that makes us very unique is because we are on the border providing services both within the state of North Dakota and state of Minnesota, we are able to receive funding from both, and with that comes regulations on both sides. So having to balance that along with FTA It can be a bit much sometimes, but that's how we do receive a majority of our funding. So making sure that we're in compliance there. We receive triennials every three years, which they come in and audit basically our entire operations to make sure that we're in compliance. So just always making sure that we're on top of any new regulatory changes, anything else that comes up. Along with that, it's administering the federal and state transit grants. So again, where we get a majority of our funding. So going through and doing drawdowns, keeping up with grant milestones, making sure that all of our reporting's up to date, and everything that comes along with that. We procure vehicles, major capital equipment, as well as other procurements for services. That's another piece that there are a lot of different requirements from the FTA as to what we can and can't include in our procurements and how we go about them. So the rolling stock purchases are definitely a big part of what we do, which is the purchase of buses. And we have to also oversee safety training and regulatory compliance. So with that, FTA is definitely looking more and more at the safety of transit operators and transit staff. They're making a larger priority of ensuring that drivers are safe and feel safe at work. So there are some requirements with that, including monitoring things such as collisions, transit worker assaults, having a safety group that meets monthly to be able to discuss any issues that we're seeing locally, and then also kind of taking a look at trends that we're seeing nationally as well and ways that we can help protect our drivers. And then also maintaining transit technology, including fare collection, scheduling, dispatch, and vehicle systems. We utilize a lot of softwares that are very specific to transit. We have what's called a CAD AVA AVL system, which is computer-assisted dispatch, automatic vehicle announcements, and automatic vehicle location. So with that, we're able to basically have GPS on our vehicles to see exactly where they are, make sure they're running on time, See if drivers are having any issues while they're out on the road And that's what our dispatch staff does every day is just monitoring that and making sure that our drivers aren't having issues out there Fair collection all of our vehicles or effects drought vehicles have fare box systems on there. So with any technology that has to be maintained Provided service to to make sure that customers are able to utilize it to pay and And then just a handful of other systems that we utilize, planning softwares, vehicle surveillance systems. There's quite a few things that we kind of manage and monitor on a daily basis. With that, go into some of the funding sources that we have. So again, the FDA and federal grants are definitely where we get the largest portion of the funding that we have for our department. Jordan will go into some recent changes that we've seen in the last couple of years that have affected that. The state of North Dakota and state of Minnesota funds, just kind of broad brush. North Dakota definitely isn't as strong of a transit-focused state as Minnesota is. Minnesota, we saw an increase of $1.2 million this last year because they redid how the funding is allocated. So unfortunately, we're only able to use that on one side of the river with City of Moorhead and City of Moorhead Services, but it still benefits the entire area here. So working on some additional legislative efforts with the state of North Dakota. Thanks to current Mayor Beauchesne for assisting with that. A couple years ago, we were able to secure some additional funding for a previous biennium, and we're looking to do that again this year to help supplement what we do and kind of lessen the burden on local funds. And then with that, we do receive local government funds. Susan can touch on this, but we do receive a transfer from the general fund to fund our operations for what the FTA and states don't cover. And then we have some smaller revenues as well, including passenger fares. So anything that passengers pay on the vehicles, any passes that they purchase, tickets, paratransit revenue, all of that goes into passenger fares. And then we also do have bus wrap advertising. So that's a smaller portion of our local revenues as well.

With that, I will turn it over to Jordan. Yeah, so as Cole had mentioned, you know, over the last couple years, we've definitely seen some bigger changes. The 2020 census was a big one because our urbanized area went over 200,000 in population. And because of that, the Federal Transit Administration now classifies us as a large urban area. which puts us in the same bucket as New York, Los Angeles, Seattle, Denver. We're not quite that big, but they still classify us the same. So with that, we actually lost funding. Our funding from FTA went down just because of the larger pool and the larger systems that we are now competing with. We lost about $800,000 in federal funding because of this designation of a large urban. In 2024 we were designated as the recipient for the large urban area. It took a couple years for the census to be finalized and that number to be official. So officially we became the FTA designated recipient for the urbanized area in 2024. What that means is that all, Fargo is responsible for administering and managing all of the transit grant funds, federal transit grant funding that comes to our metro area. This does help kind of streamline the grant administration, and then it establishes us as the lead agency for the entire region. 2025, we saw the retirement of the Moorhead Transit Manager. Lori Van Beek had been with us for many, many, many years in Matbus and in transit. And with that, we looked to kind of unify our operations. Knowing that we lost $800,000 in federal money, we had to figure out how to be more efficient and how to kind of make things work a little better. So we brought over the other Moorhead staff that had worked under Lori and had them come in as Fargo staff and kind of brought everyone together under one team. And so Fargo became the sole provider for transit and we operate the entire system. And then in 2026, the drivers joined the city of Fargo. Historically, it had contracted services for our drivers and driver management services. And in 2026, we decided to bring those employees in-house. Again, this was another thing that just helped us to bring everybody under one roof and kind of unify those operations even more. helps with morale. You know, everyone feels like now we're part of the one team. And this was also a cost-saving measure also as we continually saw those contracted services rise quite substantially. So this is our 2026 org chart as it sits currently. You have our MAPUS coordination committee, which I'll touch on a little bit, and then oversees our director, our two assistant directors, and then kind of two different silos there of operations. Then we have fleet facilities and safety kind of falls into that fleet facilities, along with support from obviously the external departments within the city. So for 2027, capital requests, you'll see there, I did a handout, an extra sheet that kind of shows all of our capital requests actually for the next five years. And then also how those capital requests, especially the local share, is shared among everyone in the region that participates in the service. So that's one very important thing to keep in mind is that the total cost of transit is not on Fargo. the total cost of transit is shared between all of the entities that we provide service for, as Cole mentioned earlier, Fargo, West Fargo, Moorhead, Dilworth, and then NDSU. So those capital requests, you'll kind of see Susan broke out kind of what the total project cost is, what the federal funding portion is, um the revenue that we would receive from our other partners in this and then ultimately the fargo share is also listed there so fargo only pays a share of these projects as they are shared with our other entities personnel requests for 2027 cole had mentioned that city of moorhead is receiving additional state funds from the state of minnesota due to them doing a different funding formula for their urban transit agencies within the state which is much appreciated the extra 1.2 million dollars is going to be used to do a pilot program of microtransit throughout the city of moorhead so the the microtransit bus operators of seven you see there that is for that service specifically and moorhead will bear the cost of those seven ftes so none of the cost of those seven ftes is actually On Fargo, if I go through the operating cost allocation a little later, I can show you kind of how that works. The other bus operators, one fixed route and one paratransit operator are requested to try to alleviate and get us to a little better cushion of extra drivers. Our current route selection is utilizing 100% of our drivers. And that means we're expecting every single driver to work every day that they're scheduled which we all know is not realistic So our overtime budget is definitely reflective of that this year but our overall salaries are down because of people we have some vacancies and then the additional road supervisor is for additional coverage for that micro transit service that we will be providing and then just the fact that we don't have full coverage at the moment and So as you look at 2027, this would be our proposed org chart for 27, which would add those nine bus operators and the one additional road supervisor. So some current and emerging issues. Our ground transportation center, if you guys have not heard, we've had some structural issues that were found when we did our deck overlay project last year. And we have been advised by the consultant to vacate the facility and find a new location So we are currently working through that we will have to work with FTA on some money that was invested in the facility that they have an interest in and work with them on investing that money into other capital projects the replacement of the GTC or some other downtown location and Funding sustainability, as Cole mentioned earlier, you know, at the time, Senator Boucher helped us with some extra funding from the state of North Dakota. And we were just, you know, we'll continue those efforts at the legislature next session to try to, you know, retain at least what we had received previously or try to increase that. And then our aging fleet and infrastructure. I know this has been echoed in other presentations over the last couple days. of just the buses are the backbone of everything we do. Without the buses on the road, we can't pick people up or get them to where they need to be. So the buses have a 12-year replacement cycle, as Cole had mentioned, and we continue to see rising costs in replacements. In 2020, our bus order, our cost per bus was $488,000. In our most recent order there, $731,000, an increase of about 50%. So just as I said, everyone has mentioned that prices or costs have increased, and these buses are no different. With the 41 buses that we have and a 12-year replacement cycle, we look at about four large buses per year. in replacement to try to maintain that 12-year replacement cycle. And then same with the small cutaways, those that are five-year, we have roughly about 20 of them. So again, four of those per year to try to maintain that five-year replacement cycle. So the total cost for you know, kind of that four year replacement cycle, the local share is about 745,000. But it is about $5 million in total project costs. So 80% of that is covered by the feds. And so the local share of the city is substantially less than what the total project cost is for replacing those vehicles. As we look at our budget over the last three years, 25, 26, and then into 27, in the revenue line, that is all of our state and federal revenue. And then Fargo's share of that is that 77% of the total revenue. Some of that state and federal revenue goes to West Fargo, NDSU. So we share the revenues just like we share the expenses. The operating budget is the total MAPUS operating budget minus those revenues. And so then the Fargo share of that operating budget is just that. That number that you see there under the operating budget total Fargo share is that transfer out of the general fund that Cole referenced that does fund kind of our gap there between our state, federal revenues, local revenues. And then the capital is there. You can see the total capital project for 2027 is $5 million. However, the local share of Fargo is the 917,776. And the difference there is the federal funding that helps. This is kind of the same numbers, just a little bit more detail. Shows the 2025, the 2026, and the 2027 has the MAPUS total, and then it does break out kind of the different, what Fargo Share, Moorhead Share, West Fargo, and NDSU is, so it gives a little more detail on what our other partners are paying into the system. I believe that was, yep, that was the last slide, so I'd be happy to answer any questions or try to explain anything more that you guys might have.

Commissioner Strand.

Thank you, Jordan and Cole. That's a lot of information to unpack. Initially, I'd like to begin also joining in, I'll preface it. With these multi-jurisdictional owners and stakeholders in transit, you can imagine, and with different funding formulas across the river especially, you can imagine there's some inherent tensions that come with that. the disparities, the inequities, the perceived generosities and so on. But one of the big game changers, the last legislative session, and if Julie Baumelman were here, she would say our hero was Senator Boshe in the legislature. We had a voice for transit that was loud and clear and began the process of taking us down a new path to address these disparities with Minnesota and us and especially just in North Dakota to elevate our transit awareness. So that's a really important overview to look at. And the GTC and these changes coming are pretty significant, and the future of transit's changing. So one of the topics that hasn't, you've alluded to it a little bit today, but we had a library presentation also, and it got our attention pretty clearly Security and safety is a really big issue. If you could address that a little more, because like Commissioner Turnberg has watched videos of incidents, what our transit folks experience and deal with on a daily basis is just beyond comprehension sometime also. So if you could just allude to that in a balcony view to let us know where we're aiming for that, especially budgetarily.

Absolutely. So you'll see kind of the same stories across the entire US transit worker assaults unfortunately have been on the rise post COVID. So the FDA is prioritizing any safety that we can offer for the drivers. Locally, we have installed plexiglass barriers after COVID. It's not a full containment for the drivers so people are still able to kind of get past that reach around. Unfortunately, we have had some incidents of people trying to do that, but that's one level of safety that we've been able to provide for the drivers. We have onboard video surveillance that we're able to currently look back and see prerecorded video. By the end of this year and beginning of next year we will be able to or we will be upgrading to a new system where we'll be able to see live feeds. So our dispatchers will be able to take a look at that and potentially if we look to expand security services that we currently have We would be able to have additional security staff kind of watching that and monitoring that while our dispatchers are taking care of sales and everything else that comes up in a day. We're looking to potentially bring forward some additional legislation either this legislative session or hopefully this legislative session to categorize transit workers in the same category as law enforcement officers as well as healthcare workers because a lot of the time the individuals that transit workers deal with are the same individuals that your police officers, your healthcare workers are dealing with. Many states have it as a felony to assault a transit worker. That's potentially what we're looking for to bring that forward so at least we have some repercussions for people that do take it upon themselves to cause a disruption to our service and unfortunately hurt our workers. Besides that, we have security service at our ground transportation center, our main downtown hub. We're looking to expand that to all-day service starting next year. Currently, it's 10 a.m. to 10.30 p.m. We open at 6.15, so we're just looking to expand that a little bit to have all-day coverage there. We also have security services at our West Acres Transit Hub, which is another main transfer point. We see a lot of the same kind of issues there. And especially at that location, like drivers don't have immediate dispatch support because they're downtown. So having that security staff at that West Acres location is very crucial to our drivers. So honestly, if we could, if we have the money for it, we'd love to have a security officer on every single bus every single day. But unfortunately, we don't. So we're just trying to find ways that we can to solve those issues. And unfortunately, it has to do a lot with either issues with drug abuse, mental health issues. We see a lot of that in transit. And I'm sure the libraries echoed a lot of the same sentiments there.

Thank you, Cole. And I just have one, Mayor, just one really quick question. We see the federal contributions like 80%, and then there's a local match of 20% for like a bus that's now $750,000, $800,000. type of expenditures. A few years ago, Jordan and team and administration, we earmarked money for local matches. And I'm not sure we have the luxury to do that anymore. But when we know that there's programs coming with local matches, are we able to still earmark money for local matches like in transit? Because I hope we can or hope we can revisit that in the future if we're not.

Well, it's actually built in the budget on a per year basis, so our contribution is included in that green sheet that we had with the budget. We're not doing it on a prospective basis, looking out more years. We're not doing that.

Mr. Peterson.

Mr. Mayor, thank you. Touching on what Commissioner Strand alluded to, the uncomfort that may come forward here, how many riders did we have last year? Total trips.

Between all cities is approximately 1.2 million.

Okay, that's what I found too. I found about 1.3. How many unique riders do we have?

That is a wonderful question. We're able to look it up based on, like, if a rider uses a pass, that's a unique identifier. It's a little bit tougher when riders use cash for the buses. So we'd be able to identify the number of individual passes used, but I'm not sure if we're able to identify cash fares.

I'd be curious just if you could get me a close number someday. I don't need it today or this month or even this year, but it'd be good to know by next year, I think.

Sure.

And then the discomfort... of this conversation. So how much does West Fargo General Fund appropriate towards this service, the city of West Fargo? I couldn't find it in the revenue line items. I could not find that.

Yes. So for the 2027 budget, the West Fargo city would pay $470,000. And I assume that is what's coming out of their general fund to pay for transit.

OK. So West Fargo is $470,000. How much does Moorhead pay, the city of Moorhead?

So the city of Moorhead, so I'll try to do my best to explain the funding on the Minnesota side.

There's no ulterior motive. I'm not going anywhere with this. It's just I need to educate myself.

Yep, so the share that the city of Moorhead would pay for 2027 would be $5.2 million. Now, a majority of their funding comes from the state. Yeah, that's what I'm just talking about. What does the city pay, not the state? The city of Moorhead for 2027 will pay $0.00. They will cover their costs with state grant and federal grants.

How about Dilworth? I'm guessing the same.

So Dilworth numbers are in that Moorhead number. Moorhead bills Dilworth because Dilworth is included in that state grant. That state grant comes to the city of Moorhead.

Okay, so also $0. I'm saying the city general fund appropriation would be $0.

I think the city of Dilworth would have some money come out of their general fund. I'd have to get those numbers to you, but I think there is some cost to the city of Dilworth that they do pay out of the general fund.

Okay, so roughly half a million from West Fargo and then pretty much everything the state of Minnesota is fed state appropriation?

State and federal, yes.

Okay, and I didn't pay attention to Senator Boshe, now my mayor, Boshe, in your advocacy at the state level. I had a different hat on in my previous life. So my logic in sharing these numbers is I think this, and maybe this is what you use as a data set to our peers in Bismarck, is that true?

Correct. There was a general assumption we had to educate folks on that North Dakota does not pay more than Minnesota, and actually Minnesota subsidized some of our stuff.

Commissioner Peterson, just to interject, NDSU is the other big contributor. in that list bigger than the others, bigger than West Fargo, for example. That's on your list also.

Yes, sir. I saw that. There's a revenue line that says excluded that, and that's a different line. But I think going forward, to validate what my mayor did in his last session or two, or probably every one of them, to be blunt, I think we need to utilize these data points as advocacy. The reality is our neighbors in West Fargo aren't paying anything. and they're receiving a tremendous amount of service for that paying nothing, they may say that they would support through the legislature as a peaceman, much like our friends in Minnesota would say, well, we're contributing. No, you're not. St. Paul is contributing. locally or not. And I think it's an incredible data point to push to our friends in Bismarck that if we want to keep this relationship up with our friends in West Fargo, there needs to be more revenue coming from them, whether it's from West Fargo or probably the reality is advocating through our legislators and their legislators for additional resources coming from Bismarck to at least supplement this because I think Fargo, while we are a direct beneficiary, I think obviously transferring our people from around town, I think our neighbors in West Fargo are an extremely benefited entity. And I think it's time that they start to, whether it's directly or indirectly, advocate on the team's behalf or they need to start putting more money up out of the general fund. And that's going to cause some feathers to ruffle in City Hall and West Fargo. I realize that. But Fargo's been a very generous partner. through the years, and it's time for our friends to be at least a little more generous with their revenue based on their determined benefit. And that's where I was going with the unique riders, to figure out where these folks are actually coming from. So Mr. Mayor, thank you for my time.

Any responses? And then a question for you all. We continue to reference Fargo, West Fargo, Moorhead, Dilworth. Does Horace get to participate in at least paratransit? I know we don't have a line down there.

Yeah, so we currently do not have any service in Horace. Cole and I actually met with them this last spring to talk about kind of what the future of that might look like. There was some interest there from the city of Horace to participate in service and pay for some service. didn't sound like that would be like a fixed route, but they were interested in possibly some microtransit service, maybe a couple days a week or something like that. So yes, we will definitely continue to work with them and discuss with them what options are and what they would like to see for public transit in Horace.

And just to bring you all up to speed, what we were able to accomplish in Bismarck and what the continued conversation is and where we'll need specific help with advocacy is, and so you two can correct me if I'm wrong because I missed the last two meetings, but Last session we were, you know, the original ask, the four transit directors, so it's Minot, Bismarck, Grand Forks, and Fargo, or MAT, were able to collaborate really well to do a pitch to the state of helping have dedicated state funding for transit fixed route transit programs that of course meets a natural friction between rural transit providers so they were very careful and collaborative of making sure we don't want to take anything from rural and rural needs what rural needs and we don't want to draw from that we want some dedicated streamed funding what we were able to get out of that was you know the original ask i believe ended up camera if we started at 12 million across the four systems And that was created on a formula that the transit directors put together with information from state DOT. Ended up getting $2 million for the biennium. That was then split based on a formula that the four transit directors agreed to. You know, Fargo being the larger ridership and such received a better chunk of that than the others. It was spoken about how our MSA area had evolved. Minot was the same. So in context, us being a small urban is our designation, correct? Or our... Large urban. Yeah, we're currently large urban. I believe we're still probably the smallest of the large urbans. Yeah, so we were a big fish in a little pond, and we are now a minnow in an ocean. And mine had had the same change because a new community got wrapped into their MSA. So similar pain points for those two, and then, of course, the needs in the other two. Anyway, so the ongoing conversation, this interim with the Government Finance Committee, which these two and Julie have been instrumental on, along with Kayla, who's our contract lobbyist, rallying and working with the four transit directors, is looking for that long-term dedicated funding. And so the interim committee punted this conversation along with the regional jail conversation to a subcommittee. Those subcommittees came with various viewpoints. We do have two people on that committee, Representative Foss, who represents Fargo, and then surprisingly and pleasantly enough, Representative Dressler, who's out of Dickinson, who does not have a transit program or anything like that, but he has decided that he's interested in this conversation. So those two are supposedly going to come forward with more of a, working with the transit directors, a more specific proposal to advance hopefully to the session to DOT and Right now we're looking at not just what the cost is, but what could that dedicated stream of funding be. If it's something like legacy fund that's going into transportation dollars already, that'll just naturally grow. Things like that are some of the things that are being spitballed right now. So my ask of our team is this will be one of our legislative priorities going forward as we go into the session. Commissioner Strand.

I'll be really quick here, but there's two other topics I think just we should have on our radar informationally. Not that many years ago, we had a partnership with United Way to explore bus service to the industrial park. And it was tried, but it just really, we couldn't get it to the point where it really was effective and efficient with the different schedules of the entities out there and the different availabilities. So that fell through. And yet we still have that need for workers to get to their jobs. And then you add the Amazon facility. We've had loose discussions about what kind of service could Fargo someday provide, Matt, someday provide to the Amazon, to those centers up there. But they're still on the radar and not resolved and in the balance. Another topic I would say we should always be cognizant of is Sunday service. You know, now we have Sunday shopping and so on, but we don't have bus service on Sunday because we're just not able to do that. So these things are some potential needs that our folks here are always aware of, especially from the customer side.

Mr. Peterson, then we'll head over to the Fargo Dome.

Mr. Mayor, thank you. Anecdotally, prior to this meeting, Commissioner Strand, you won't remember this, but one of the very first meetings you and I had together after my election about 14 years ago was that very topic at MetroCOG. So this isn't a new thing. This is something you and I have discussed going back over a decade. And we just coincidentally, prior to this meeting, talked about that. So this isn't a new issue. This is an ongoing issue over time. So thank you, Mr. Mayor. Thank you, Commissioner Strand.

Thank you all. All right, Rob, thank you for your patience. We'll head over to the Fargo Dome.

Thank you. Good morning, Mayor, Commissioners. I appreciate your time today.

Somebody throw me the football.

Apparently I should have said on the other side. Whoops, guess we go that way. Apparently that's the top. Can somebody please label this top and bottom next time, Brian? Anyway, thank you all, and I appreciate your time today. A little bit about the Fargo Dome. Obviously, it is a city-owned facility, 19,000 or just under 19,000 permanent seats for football. Prior to 2016, the employees at Fargo dome were employees of private management companies that were contracted through the Fargo dome authority in the city of Fargo, but in 2016 And end of 2015 starting in 2016 the City Commission and Fargo dome authority decided to take everything quote-unquote in-house so since then all employees at Fargo dome are city of Fargo employees there is the governing board of the Fargo on the Fargo Dom Authority that was set up by the home rule Charter amendment that was voted on in 1988 I think that was the right date. I believe I was a sophomore high school, but So that that creates the seven-member governing board which has representatives of North Dakota State University the city of Fargo Fargo Park District Fargo School Board and Cass County and technically the governing board, but the powers of that board are just the general management to pass an annual budget, but it has to be ratified by city commission, different things such as that. We are a multi-purpose facility. Obviously the main tenant, prime tenant, is North Dakota State University football. But besides NDSU football, we have a myriad of annual events, but we have concerts, amateur sports, both high school and youth. We host three to four state tournaments with the North Dakota High School Activities Association annually, along with Minnesota high school football playoffs, youth football, different things such as that, family shows such as Disney on Ice, rodeo, Shrine Circus. Motorsports, so monster trucks, everybody likes to go and listen to really loud stuff get broke. And then trade and consumer shows such as the annual with the Red River Valley Home and Garden Show, the Red River Valley Boat and Marine Show, Sportsman Show, and then rotating with the International Sugar Meat Institute as well. So a lot of different things on the annual events. And throughout the 33 plus years of operation, the FargoDome team has a very strong reputation in the concert industry and Fargo itself. Mostly the consumers who buy tickets, but promoters know that when they come to Fargo, They bring their artists, they bring their events, their needs are met, their attention is paid to the details, and frankly, people buy tickets. So that's very important. With that, as I was saying, there are 27 full-time staff at Fargo Dome. 26 of them are City of Fargo employees. There's one contracted employee through the Food and Beverage Department, the concessions manager, as an arrangement with OBG 360. But the rest, the director of food and beverage and the rest of us are all City of Fargo employees along with the 400 to 500 part-time temporary variable employees that fill that out. And so obviously with myself, we have an assistant general manager, Bernie Larson, and then we have four other department managers or directors that oversee the various departments at Fargo Dome. As far as the budgeting-wise, we aim to break even. We'll talk a little bit about that in the future. We can avoid the middle number. We don't talk about that. That hurts. But you know what? Every once in a while you have to have a setback and you learn and you reprioritize and recategorize. So generally, the operating revenues have met or exceeded the operating expenses on an annual basis for surpluses. And we do budget that. Moving forward in 2026, we have a break-even budget, so to speak, and also in 2027 proposing a break-even. We average in that, depending upon the year with the different cyclical things, 80 to 90 events, public events per year with attendance in the neighborhood of that 400 to 475,000 people a year through all the different types of events. That happened at Fargo Dome. We break it out into, we have our direct event income, which is just what it is. Compared to all the events, everything is netted out there. Our other income is mainly the suite holder and advertising revenue on the annual leases there, along with interest and dividend payments, and then indirect expenses are all of the G&A expenses, insurance, building audit, the concessions contract expense, so the revenue shared with NDSU as far as food and beverage sales, operations, and management expenses as well. Our capital budget for 2027, this is funded out of the Fargo Permanent Fund, which we talked about a little bit earlier. This is a pretty large number this year. For 2027, as is 26, we have some priorities that the Fargo Authority has discussed with previous commissions, such as the upgrade of all of the lighting in the arena and the concourse to LED, switching that over to LED lighting. and updating all of the signage on the concourse level, room signage, ADA signage, wayfinding signage, things such as that, that is overall about a $6 million project that was being funded out of the 26 and 27 capital budgets. And the larger item there for the $3 million for the Fargo and parking lots, that would be also as we start to upgrade the parking lots or redo the parking lots as they are in, some are in more need than others. But we've been in a bit of a state of flux for five to 10 years as far as what's going to happen at the facility as far as different things going on. So they're moving forward with that. I'm going to skip that one first and talk about the current and emerging issues. As I mentioned with the 500 part-time staff, I can't even give you the level of importance they are to the facility, but to give an example for an NDSU football game, that takes upward of 500, 550 people to pull that event off between the forward-facing event services, ticketing, security, the food and beverage departments, the parking departments, the public safety, everything such as that. A large concert, 12, 13 plus thousand people, that is around 600 people. that takes to pull that off with loading in the show the morning and afternoon of, having the event and loading it out and then cleaning the building afterwards. So one of the challenges is not only keeping that staff full, but also as costs increase in the hourly rates and we're competing with a lot of other part-time jobs, that is one of the main challenges. challenges we continue to have all the time as i mentioned we have a lot of annual events we usually chain turn that calendar year with about 55 to 60 percent of the weekends booked annually i can say right now as of as of today for 2027 we have i think it's 30 30 of the 52 weekends booked or not bookable that have to be held for playoffs, things such as that. Keeping in mind that of some of those that aren't booked, it's Easter, it's Christmas, it's Fourth of July, Memorial Day, Labor Day, different things such as that. So we work through all of that. The other ones, a lot of them are also in that summertime period. But the great thing with the partnership between North Dakota State University and the Fargodome, the city of Fargo, we just completed at USA Wrestling. That is now 10 days of wrestling, but the economic impact and direct spend in the region is upwards 18, 19 plus million dollars for that two-week period. It sometimes is a challenging event to have, but frankly it's a great event to have when you see this year there was 7,200 unique wrestlers for about 8,800 entries into the seven different national tournaments that were happening. The largest, I believe it's the world, but hopefully the world's not watching and it's only the United States because I know it's the largest in the United States, amateur wrestling tournament that happens. And it's a great thing and we have that, NDSU has that contracted for at least another two years and we're working on past that as well. Another point is the initial half-cent sales tax that was voted in by the public in 1988. That funded the debt service and construction of the Fargo Dome. And then with the diversion of a portion of that in the mid-90s for some street maintenance, as part of that vote it also created the escrow account to plan for the future. And that fund, which is now the Fargo Dome Permanent Fund, as the Fargo Dome stopped receiving any sales tax dollars and or any local public taxing funds as of December 31st of 2008. So going on close to 20 years. That fund now was created and is managed by the North Dakota State Investment Board. So managing a lot of that. And that fund, that number of $48.5 million is of March 31st. We all get on a daily basis, so actually as of the April 30th, it's right at about 50, $51 million. Of course, we'll see May and June go a different way, so it's a wonderful little cyclical thing. But that is used to fund not only building projects that come up, but also the capital that we were talking about earlier on an annual basis, it can also is designed to fund any operating deficits if necessary but in addition to that uh... the current fund balance on the fargo balance sheet is at about four point nine million dollars so operationally the building is is very very healthy from a financial situation Buildings such as Fargo Dome and every entertainment facility, NDSU's a very important tenant with both NDSU football and USA Wrestling. Fargo is also, and entertainment facilities are at the mercy of the touring world. We have great relationships with our Monster Jam and our Disney on Ice. That's with the same promoter. We have Monster Jam every single year, Disney on Ice. We've kind of gotten into a rhythm of every other year based on market size and scheduling coming through there. Concerts, we try to have every show that we can get. Unfortunately, Commissioner Turnberg, you used to be in the television business when you're the 180th, 185th radio market, 212th, 215th television market. My comments earlier would tell you that Fargo is a must play, and from a small market, Fargo is a must play. But when a tour goes out for 40 dates, I really don't, you know, Chicago, Fargo, Minneapolis, Fargo. But it works, it works well. And we do what we can to be very competitive and incentivize the promoters to come and have as many concerts as we did. And that's, when you look back at 2025, That was one of the major reasons that there was a bit of a drop in the annual events was the touring shows just weren't happening. 2026 has been a little bit of a different story, but those margins continue to shrink along with what it takes to incentivize those as every other building pops up. They all want the shows as well. but also as labor expenses continue to increase, as healthcare continues to increase, and as energy, you know, Fargo Dome is about $1.1, $1.2 million in electricity, heating, air conditioning annually. So working through all of that as well. The other... not emerging because the Fargo Dome Authority, City of Fargo, Fargo Dome Management partners have been working on it for over a decade now, is the building is 34 years old. is in need of updating. It is in need of some accessibility, updating seating-wise, restroom-wise, expansion of restrooms, adding spaces, circulation space, parking lot improvements as we've talked. accessibility throughout the building the press box area which it says the the east side enhancements but it's really on all four levels of the building getting up to the press box and then getting there as well the far ground authority the city building management has worked with local and national architects as well as engineering teams and specialists to kind of go through this depending upon what route is chosen, taken, or what path is taken. upwards of 80 to 100 million dollars of work. So we go back to the permanent fund which is great to have 48, 50 million dollars there and that sounds like a big number but as we've kind of found it's too big of a number to do a bunch of little projects but it's just not enough standalone to do a one large upgrade project. Fargo Dome itself, the building envelope As we have done long-term capital studies over the past many years, the envelope is a 75-plus year. building the infrastructure of it the steel and the concrete however everything else is is needs updating and so looking at what those next steps are look forward to conversations between the far ground authority the city commission building management city administration to see what what the next steps will be for that building and also to try to come up with some unique funding mechanisms to fill in the gaps that are needed. There's definitely a good base there to start, but it needs to be built on. That's the gist of my presentation. I'm happy to answer questions, and as we get more in-depth into things, I'm happy to give tours and or I will not take you to the catwalk, though. There's something about that. That 125-foot drop to the floor right here, it's not the fall that usually does it in, it's that sudden stop at the end. Commissioner Peterson.

Mr. Mayor, thank you. We had a producer locally that seemed to impact a number of your accidentally smaller piers. Was there any downfall from that producer's folding that impacted the Fargo Dome's budget?

Fargo Dome specifically, no. J Presents has been a good partner In the past, Fargo Dome, I used Jade Presents to help book the Happy Harry's Ribfest, but more as the middle buyer. All contracts and everything were always executed by Fargo Dome and paid for by Fargo Dome. It's more of an informational piece. But the venue itself, they had kind of moved out of that size of building and concentrated on smaller facilities. There was no direct impact to the Fargo Dome itself. It is a hit to the... entertainment industry as an ecosystem overall. And everyone with that company are good friends of mine. I mean, they might not say that if they were in the room. But it'll be interesting to see what happens because there are two different thoughts there. When you look at Fargo-Moorhead, West Fargo, and all the different entertainment venues with the lights, and Shields Arena, and Shields Center, and Fargo Dome, and Bluestem, and just the huge entertainment just even the colleges provide. There's a lot of discretionary income that gets spent on a lot of entertainment. And Fargo Dome is the size, you don't focus on those 3,000 and below. And that's what... a lot of these other venues do. And you say, oh, OK. And we don't. We don't compete with them for shows. everybody in the Redhawks and the zoo and everything else compete for those dollars. And that's, so it'll be interesting to see what happens with that. We wish it well. I know there are groups that are able to pick up some of those smaller shows that work. And Fargo Dome and our management team with our national promoters and even some local promoters look to continue to find a lot of events that we can pop in and have happen.

Any other questions? Commissioner Strand.

Thank you, Rob. One of the many changes over the years, and you alluded to a small venue with fewer than 3,000 seats, and there was a moment a while where you had the Gate City Theater, which was the pull-out theater within your bigger construct, and now there's no budget for theater as I see of any sort. Here's my question. How and when can we ever carve out a space to have a decent quality performing arts space in our community? And it's still a big need. And even the Civic is out of play shortly. It's an off-the-wall question. It's a need we have. And I'm wondering, can we someday maybe find a fit with the Fargo Dome to address performing arts? Like Linda Coates, Commissioner Coates used to be a school board member. Member Coates used to say there are We'd have symphonies playing in gyms over and over and over. And at some point, Fargo, maybe, hopefully.

I thought you promised that we would only jibber-jabber about that in private. You know, we did. We had the great Gate City Bank Theater for close to 20 years. And to be quite blunt and frank, which I think I'm kind of known for, thank goodness Gate City Bank came online for the branding of that or that program wouldn't have lasted anywhere near as long as it did because their branding helped to offset the show losses for that. Now, I will be the first one to admit that the Fargo Dome, a 19, 18 and a half thousand seat football stadium, is probably not the best place to have touring Broadway shows. I mean, there's this thing with acoustics, but we were able to make some investments in the facility using the permanent fund and things such as that to try to, again, expand the diversity of events we had, and we tried it for a long time. But with the pandemic coming along, that touring Broadway industry in non-performing art centers, if you will, was struggling to begin with, and the pandemic really just took out the legs. So you don't see many that aren't in performing arts centers or theaters of some sort. And again, it's a question of resources and balancing those resources. And would I love to have a performing arts center in Fargo? I think it would be fantastic. but selfishly I will point out that the Fargo Dome is already here. Yes, it only cost $50 million to build in 1990 to 1992, but it is now insured value of $220 million, and actually replacement value is upwards of $400 million for a 20,000-seat indoor stadium. I'd love to have it, but when it comes down to it, Everybody does look and I agree that Fargo is a great market. Fargo-Moorhead is a great market. It's 250,000 people, 270,000 cast clay in that 30 mile circle. It's 135,000 people who vote and pay some things when it comes to those. I'm a little sore from two defeats over the last three or four years, but that's what happens. And so we all just need to work together and remind everybody that it's not just, oh, well, you only had three concerts that year. You're right, but we had 80 other events. We had six or nine NDSU football games. We had the Shrine Circus. We had four high school state tournaments that everything coming into town. So there's the flash, which is 10% of our event activity. And yes, 40% of our revenue activity But then there's the 80% that happens there that keeps that building active all of the time in doing that.

Susan?

I just want to close with a couple quick comments. So the reason there's no financial reports that look like the city's is because the Fargo Dome is on their own financial system. At some point, they'll be merging into our new system, but that's why they look a little different. And then just to touch on the civic, we talked about that on page 361 as some information. What I did for next year is just roll over the last year's budget. Historically, the only thing we budget is small transfer from the general fund to cover utilities and then basically some in and out, kind of a net zero for events. So I just left it given the situation with the civic right now. So I just wanted to say that.

thanks i just have a couple clarifying questions about the dome when you list event days is that the actual event or if ndsu has to prep you know the stack chair or your second chairs the friday before graduation is that an event day so if you look at the budget the 82 number of event days you see that is the days that the public are in the building okay if we're adding practices if we're adding

move in, move out, set up days. We're busy upwards of 170 plus. A good example, USA Wrestling, as I said, there was 10 days of wrestling. We started setting and converting the building on June 26th. The 32 wrestling mats came in on June 28th to get set up. There's a holiday in between there. But then on July 6th, they... came in to start setting up. The wrestling started on July 10th, finished on July 18th. We've cleaned up the building and got out yesterday. So the building was actually tied up almost four weeks this is a bit of an anomaly but it is typically three weeks the home and garden show they have three public days that would be three of those event days but they set up tuesday wednesday thursday prior and pull out the monday after so it's eight eight days of tying the building up with three event days so no that does not that is strictly when people are coming to the building and doing an event.

Thank you. And then the permanent fund, the last sales tax went in 2008, I believe you had on the form, or on the slide. So anything since then has been pure investment, or do you put surplus in every once in a while? Are there other revenue sources that go in there from time to time?

No, it is, the permanent fund is, since then, is A little bit of surpluses, but that's also what the fund balance on the balance sheet of the $5 million was the annual surpluses for a while, years ago. we would work with the city and we would transfer some money from the fund balance over into the permanent fund for investing in that. Obviously when you've got an investment board that is investing billions of dollars they get a little bit So the permanent fund, for example, year to date is 13% return. Last year was in that 11, 12% return. The last three years returns averaged 7%. The return over the last five years is 5%. But that is all through there. Full disclosure, I do put local public taxing because I do have an accounting degree, which means about 5% of the time I actually do pay attention to details. and Susan's training with me, is some of that is the shutter venues grants that Fargo Dome received through the pandemic that could not be invested, that had to fund operating. So essentially what that helped was to fund the 12 to 18 months of lack of events in that time period, the operating expenses, but then help to build back up that fund balance to cover that as well. But no, there has been no, there is no tax dollars. I'm always careful on that. But in the operating wise, the operating has never received tax dollars. from it, and it is just the operating revenues versus the operating expenses. However, there are some different accounting things, depreciation things such as that, that are handled by the city of Fargo.

Thank you. And I'll just reiterate one of the final points you made and maybe a little more clear is, you know, a big aha I've had is I've learned more about the Fargo Dome. And I think, again, as we interact in our community in a very regional way, the Fargo Dome is an asset of the city of Fargo and the residents of Fargo. And, you know, I think for folks to just be aware of that, of that burden falls on taxpayers of Fargo, even though it's a regional asset and even a statewide asset, that benefits everyone. So I think as we continue conversations going forward, what that might look like, it'll be interesting because I know there's a lot of ideas out there.

Yeah, it's important to point out, you know, those who use it do pay for it to a degree. Unfortunately, when you get into building and different things such as that, it's one of those that Those who use it couldn't pay enough to fund those types of things when you look at the HVAC and everything such as that.

All right. With that, we will take our break. We're scheduled for a 15-minute break, but we'll move that down to a 10-minute break and plan to come back at 9.55 on the dot, where we'll go over to our utilities. So thank you. All right, we'll reconvene our budget workshop, moving on to our 945 item. And for those following along online, it'd be page 364 with solid waste. Mr. Olson.

Thank you, Mayor and Commissioners. Happy to be here. It's never easy following Rob Sobolik, but luckily I get the pressure eased off of me because I get to talk about everyone's favorite subject, which is garbage. So I'm going to try and keep it relatively high level here today. Any questions, feel free to stop me or you can wait until the end. Department overview of the Solid Waste Department. We have 10 different divisions within the department, seven of which are kind of what I call operating, three of which are kind of finance-managed, non-operating ones. Administration, that includes myself and two front office staff kind of managing the entire department. We have a residential division. That's residential curbside collection. 21,000 tons from almost 29,000 residents last year. So it's a big operation. 30,000 homes, basically, that we touch every single week. Our commercial division, there again, that's businesses, restaurants, hotels, schools. There we had 17,000 tons from just over 1,200 accounts. That's one of those divisions that we do allow private haulers and private entities to also work in that market. We collect probably 60% of the commercial garbage in the city and then 40% is handled by private. Our landfill, which is one of the big ones, probably my most exciting one, 220,000 tons were delivered to the landfill last year. It's a lot, 600 tons per day, 300 trucks per day running out of there. One cool thing about the landfill is it's the only landfill in the state of North Dakota that has an active gas collection system. Last year we collected about 210 million cubic feet of landfill gas. That gets sent to an industrial partner that we have in West Fargo. They use that in their boiler system rather than natural gas. And we have an on-site generator that produces electricity and puts that back on the grid. Kind of a fun stat for anyone who cares about environmental stuff is... To date, since that was put online, we've destroyed the methane equivalent of about 2 million metric tons of CO2. So keeping that from the atmosphere and keeping the environment healthy. Follow that with our roll-off division. This is kind of a call service. We deliver roll-off boxes to businesses, homes, if they have big projects that they're going to be doing. Last year, we collected almost 10,000 tons of waste from over 4,000 separate encounters, we'll call them. Then we have our recycling division. This is another pretty big one. Bi-weekly collection on that. Last year, from residential curbside collection, we collected 3,400 tons worth of material from 21,500 residences. That number is lower than what our garbage is because recycling is an opt-in, opt-out program. Residents can say they don't want to recycle, and we honor that. We have since that curbside collection was implemented in 2017. But we do have a pretty good participation rate, so we're happy with that. We also operate 28 different drop sites throughout the city. From that, we pulled about 23,000 tons of material from each of those drop sites last year. And that includes separated recyclables as well as grass and leaves during those seasons. And then our last kind of operating division is the Household Hazardous Waste Division. 76 tons of hazardous waste materials that's recyclable. Electronic recycling, batteries, paints, stains, aerosols, stuff like that goes through there. One thing I'd like to note is this is kind of a function of the landfill. So we are required to have this through the state of North Dakota. And what that does is not only keep some of this hazardous waste out of the landfill, but it helps us in terms of our construction of our landfill cells. By having this building operating, we can save millions of dollars with each construction, cell construction. There's certain environmental items that we have to install if we didn't have this, and we would be classified as a different type of landfill. So this is, it's a low cost building in the grand scheme of the department, low revenue building. But again, it is really a function of the landfill. So it's a beneficial one for us. And then kind of the non-operating divisions. We have unallocated. It's a financial managed division there. Obviously, solid waste transfers, which everyone's aware of. And our infrastructure fund, which I wanted to touch on just a little bit because it's a new one. Since solid waste departments started utilizing clean water SRF loans, this account or this division kind of came on board as a... Carrie is going to get mad when I say this, but kind of a... I call it funny money account because we pay for those... It's real money, right? It is real money. But in terms of full operations, you know, we pay contractors out for those projects, the state reimburses that. So theoretically, in a perfect world, expenses, revenues, match out throughout the division. So that's kind of my joke for Carrie all the time, when she's in my office. Here is our organizational chart. As you can see, we have 53 full-time employees within the department, 40 of which are operators, so six supervisory employments. And what that includes is we have a recycling supervisor, a landfill supervisor, a route supervisor who manages kind of the collection routes, We have an assistant supervisor under that person who handles the roll-off calls, all those call-in numbers, and also some of the commercial calls. We also do a lot of extra pickups throughout the days and a lot of different items at couches, refrigerators, people put on the side of the curb. So two of those, and then a maintenance supervisor who kind of monitors the equipment at the landfill specifically. So he's... taking care of when those need to go in, what work needs to be done on them, calling out for the outside contractors to come in and fix something that might be wrong. So those are really working supervisors. And then our tech employees, maintenance technicians, we employ one that drives around to all the different drop sites. So he's a recycling attendant. And he tries to maintain those, keep those clean year round. We have one for the residential transfer station out at the landfill. That's been very helpful over the years since we've opened that. People come in there, residents come in, dump things for free year round, and he can be there to help guide them. Here's where metal goes because we recycle metal. Here's where recyclables go. Here's where the garbage can go. Help them unload. It's a good one. And then we have one at household hazardous waste. So really, when I say all this, 50 of the 53 current FTEs in there are working supervisors, boots on the ground. So they are the lifeblood of the department. I'm lucky. They make my job very easy. I'm lucky enough to basically sign papers. So I always say in the solid waste department, if I didn't have to sign my name on a bunch of things, that place could run without me even showing up most of the time. So it's great. Here's some of our capital requests for this coming up year. Pretty standard. You'll see these pretty much every single year as we go through. That landfill capital improvements line item, I will touch on that in a little bit here on a different slide. And then we have our different truck requests. We have our vehicle replacements, which it's two pickups is basically what we are purchasing. We started that a couple years ago because we had an aging fleet of pickups that were coming out. And many, many years ago, what the policy was was Once one of those pickup trucks starts failing, ending its life, send it to the landfill. Those guys can use it. And when I get in here, I kind of thought we should really start rebuilding that fleet a little bit. And after 2027, we will be there. So that number will start coming down. We won't need to replace so many. But we've been a little bit aggressive here the last couple of years, kind of rebuilding that pickup fleet for the supervisors and the workers out at the landfill. and then it's mostly just containers nearly replacements of containers dumpsters get damaged curbside recycling and garbage get damaged constantly so we have to keep replacing those and you know a big one again i'll touch on the trucks a little bit further but that's that's been a good replacement schedule for us because we need to be responsive we're one of those departments that we have to have trucks on the ground we can't tell people that we're not going to be there because We don't have the vehicle. So this helps us be able to ensure that we're responsive to our customers and to our residents. As far as human capital, we are just trying to reclass that one maintenance supervisor position. Pretty low impact for the human capital side. I want to touch quickly just on our rates. You can see the two graphs here. That's for residential garbage and recycling. That's a cost per month. So we are, amongst other markets around us, we are sitting really good. And the landfill there too, we're competitive with some smaller ones, and we are under some of the larger ones. So I think we're in a great spot here. We are a department that does not receive sales tax dollars, so we are 100% rate-based. And I calculate those rates based on tonnages coming in, actual costs of the department, my proposed costs coming up, and we last changed rates in January 1, 2026. I am not anticipating any rate changes for 2027. And if anyone would like to know how I calculate those rates, Susan is probably still rolling her eyes from the spreadsheets that I walked her through when we were getting ready for 2026. So I have a lot of data. I use a lot of numbers. And I think we're sound and we're sitting good amongst the market. We'll see in your packet the big line itemed out budget that Solid Waste has. It's a lot of numbers, a lot of lines. So I wanted to touch quickly just on kind of the big highlights. As I said, I would mention the trucks again. Our biggest thing is we want to be responsive to all of our residents. We want to be available. We have about 30 trucks, 25 to 30 trucks that go out every single day. Once we get into grass and leaf season, we send out a handful more just to keep up on all of our drop sites. We have extra pickups we have to do, and then we've got to be prepared for cleanup week. You heard Ben yesterday talk about the vast number of vehicles that exist within the city. And most of our maintenance gets done over at Central Garage. And sadly, you know, sometimes we get in there and it's like going to Valvoline, where for routine maintenance, it's in, they get it out right away. That's pretty common. Sometimes we're back at the line and we have to have trucks ready to roll. So this replacement schedule of two curbside vehicles trucks every year, one in recycling, one in residential garbage, one commercial truck and one roll-off truck. They can kind of swap there between the trucks that we need, but that replacement schedule has really helped us be able to ensure that we're responsive and we're still handling all those extra duties that we want to do. That capital improvements line item at the landfill, that was the big one on our capital request, and I just wanted to touch a little bit on that. Inside your packet as well, you'll see kind of a an example of how we use that line item. There's a few big projects that have to be done at the landfill when you own a landfill. There too, we have to be ready for the trucks to come in. We have 300 trucks coming a day, 600 tons per day. If we have a road that blows out, we can't just tell people to stop. So we need to have funds available to us that we can quickly address some of those. We're constantly improving roadways. That's one of the items that I include in this yearly. We have some other capital projects like closure projects, inert cell projects. The inert cells are our construction debris cells and we have to keep up with those as well because again we can't turn the public away. For our closure, we have a financial assurance obligation that we have to have only 80 acres open at the landfill. So what open means is it's not formally closed. So as we continue to open new cells, we have to also close areas that are already full. They've met their useful life. So we include that in our capital improvements budget. Those are just a few examples of what we would have in there. One story I would like to share on a little bit to some of the cost savings that we try and pull from this item in particular, and that's some of our self-performed work. So when we look at a closure project specifically, our closures require four and a half feet of dirt across large areas. So our last one was about five acres. And in the past, we would normally contract that out. Someone would come in, $450,000 later, the closure was done. What we found a little bit is with each of our cell constructions, we're generating like half a million yards of dirt and we're keeping that on site. So what we decided to do starting a few years ago was Let's identify places that we want to be closing pretty soon. And as that dirt comes out, we'll place it close to it. And then we'll give ourselves months to complete a closure. And we can use landfill staff to do it. We have an excavator on site. We have a haul truck on site. We currently have three dozers. We're going to a fourth one. So with that, we can self-perform some of this work, where it's a relatively simple project and concept. So basically, one of our last closure projects, I estimated five acres would be about $400,000. And we rented a piece of equipment and staff performed it over a handful of months. So there was no urgency to complete that. And we ended up saving probably over $300,000 on that. And that comes right out of this capital improvements line. That's some of the efforts that we've done to try and reduce spending where we can. And it's one of the cool things that I like to highlight. One of the other big items that we are requesting in 2027 is a landfill compactor. Everyone's seen one of those, I'm sure. It's, in my opinion, the most important piece of equipment we have at the landfill. If we can compact trash more, it extends the life of the landfill and can increase whatever revenue is available. I have a little note here. Every foot of added compaction that we save in our 10-acre cells that we construct is about the equivalent of $500,000 and gives us more time. So if we can continue to pack that down, the compactors that they make now compared to the one we currently have say they can do 30% better compaction, which is Great. Whether that's true or not, I don't know. But we are requesting one of those. Ours is getting pretty tired. We're hoping to still keep that one and move it to the inert site so we can demo that material even further and extend that lifespan. So that is one of our big ones. At the landfill, we do lease most of the equipment out there. It's a really tough environment, as one can imagine. And after about four years, those pieces of equipment are sometimes get obsolete by then and not worth very much. So we want to get those off-site and bring it back in. So this allows us, by leasing that, it allows us to know that we're pulling some of those pieces of equipment off. We know they're leaving right when they're paid. And we can get more of those large pieces of heavy equipment on hand at one time. So that's where we're at. We have moved out of leases in our collections department. The trucks we do purchase now, we used to lease, we no longer do that. So that was one good thing. And then just for transparency's sake, just like other utilities, we're obligated to transfer that 20% to the general fund. And that number is worked into our rate structure. Our current rates account for all of that. So it's just a number, 20%. Some of our current and emerging issues. Currently, the reclamation of that East Landfill campus that we've been discussing briefly here, we had about two million cubic yards of existing waste in place that was placed from the 1950s to the 1970s. Once the West Landfill campus, west of 45th Street, started filling up, the choice was made in 2016 to try and permit that reclamation. And that passed through, so now we've been going through that. Now what that does is removes that potential environmental liability of old garbage sitting in an unlined area, basically just in dirt. We're pulling that out and in its place we're constructing a regulated landfill cell. So regulated not only by the state but the EPA. And what that means is we install liner systems, we have contaminated water with leachate collection systems that goes to Jim's facility up north. and a robust environmental monitoring system that goes around that site. So it helps us because we didn't have to move. The landfill is 300 acres of good space for us that boasts fantastic views of the skyline of Fargo, 100 feet above the ground level. So it was good to stay right there and kind of clean up that mess that we had. The biggest issue that I see in the future here is what we're going to do in the future for landfilling. And our current site has about 15 years left. We do have a permit renewal in, and with that we did a modification to try and see where we could expand some options. So if that goes through, which I anticipate it will any day here, we could see that lifespan increasing by four or five years, which helps, but there is an end in sight, and permitting a new landfill does take some time. So my goal would be in the next two to three years to try and find where we're going, what we're going to be doing, and then follow that with permitting. And one thing I want to touch on just a little bit briefly is We will always continue to evaluate those different technologies that are in waste disposal. So the easy one right away is the incineration. That's what a lot of places are doing overseas, and there's some places along the coastlines that are doing it. Right now, we've looked at it, dating all the way back to my days in the private engineering industry. For a facility of our size, you're talking hundreds of millions of dollars for one to accommodate that, and there's some... additional infrastructure that needs to go into. You still have to have a landfill for residuals. You still have to install a materials recovery facility in front of it. So there's a bunch there. And when you look at overseas or even in other states within the country, those might be subsidized by the state or other governments overseas a bit more than what North Dakota currently has an appetite to do. And I think a lot of that is because we have space. We have land available to us. It's a bit cheaper to get 300 acres of land than it is to try and build an incinerator. But my overarching point with that is I think it's my opinion that we still move forward with assuming that we need to be landfilling. And if 10 years from now, something happens with that on that technology front, we can still go for it. We can still do that. But plan for what we know we will have to do and hope that something else can happen. Financial stability there, it's mostly just continue to evaluate our rates, continue to evaluate what our needs are, especially in the future with this future landfill, future infrastructure needs, and kind of make sure that we're set up, whether that's with reserves accounts, to help pay for some of that or what that would be. So we're working with the finance department closely with that. And lastly, future admin space. If anyone's bent over to Solid Waste headquarters, you will see a building that's about 60 years old and is in somewhat of a state of disrepair. Certainly not urgent, but it's not pretty. And eventually we'll have to do something with our admin space there. There are plans that we've been looking at briefly, and we're going to continue to evaluate those, but that will be a need that comes up probably within the next five years. And lastly, here's just the budget breakdowns over the last five years provided by the Finance Department. So with that, I stand for any questions.

Commissioners? Commissioner Peterson?

mr mayor thank you uh i always look at these departments as the easiest budgets to review because they cash flow right we can be critical of those that sort of for lack of a term drain this does not uh and i do think to reiterate or to reinforce one of the most important things he said was we've got 15 to 20 years of storage capacity mr mayor i would challenge both you and i and commissioner gullickson we have a couple that are only here for two more years and possibly more over three elections But I think the three of us, at the very least, need to figure out what our next step is by the time the three of us are out of office. This should be a mission, because it does take the better part of a decade, plus or minus, right, to permit?

Yeah, so the last landfills that were permitted would have been Minot and Grand Forks, of just green fields to a landfill. And each of those took seven and nine years, respectively.

So I have the unique benefit of having designed the... been one of the people that worked on the solid waste transfer station in Walker, Minnesota, which is also in Cass County, Minnesota. What they do with their solid waste, because working with the MPCA is so troublesome, is they drive trucks every day to Gwinner, North Dakota. So there are a myriad of people whose sole responsibility is to drive a truck of garbage to Gwinner and then drive it deadhead on the way back. If we don't react soon enough, that interim solution will be exactly what we'll have to do because we'll have no other choice because there's nowhere else to put anything. So I think with some good sound planning and some rock-solid leadership, we should find a home for whatever is next, whether it's an incineration, which I don't think it should be, but land is plentiful and cheap. I've said that for years. You've been researching on your own. He and I met, had a wonderful conversation. Looking forward to working with you more. I think he's been doing some research that could help guide us in some very cost-effective solutions over time. in terms of land location. And obviously wherever we put this, we're going to have neighbors that will be upset. That's the reality of what this is going to be. So that conversation will be the difficult one. But again, if we have enough time ahead, we can work with those adjacent landowners and help them prepare, maybe even buy them out, don't know. But work that through on a good neighbor basis. And one more final thought is that our friends in Minnesota are also struggling. So our friends across the river in Clay and in Moorhead are looking for a solution. They've bought land recently, is my understanding. That does not mean a regional solution should be off the boards. Getting something permitted in the state of North Dakota is exponentially easier than in the state of Minnesota. So what can we do? Again, you're hearing the same theme from me over and over. Regional, regional, regional. We're a big community. but we're not that big. So the more partnerships we can help develop over time, if we can help our friends across the river and have a mutual benefit for both of us, again, given the fact we've got this lead up to this, I think we can have a wonderful solution, certainly by the time your first term is done, or I guess our first term is done, and have those dialogues rather than having to be reactive, God forbid, in 10 years where we just blow this off until then and figure out, oh, we'll just spend a bunch of money maybe not have the best solution we could have had had we done our due diligence with this commission and this mayor. So thank you for your work. Thanks for making this budget super easy. Looking forward to working with you in the past, and thanks for educating me. Thank you. Thank you, Mayor.

Thank you. Other questions? Question I have, Scott. First of all, building off the conversation about potential regionalization, you didn't mention it, so I assume I know the answer, but Are there currently any other jurisdictions that use our landfill?

Yes, I should have mentioned that, that we are currently essentially a regional landfill for the entirety of Cass County. So West Fargo uses it, other outside cities come to us, basically all of Cass County does. And we also serve about 8,000 tons per year from Becker County, Minnesota, who goes past the Clay County landfill to get to us, and 4,000 tons per year from Valley City. Okay, thank you. And so when you reference the

quantity of trucks every day. That represents those users as well, not just Fargo trucks.

And then my final question is, when you reference the very conservative good low rates of $15 per month for both recycling and solid waste, I know that we have a pro-rata, depending on the size of the bucket I have, or the drill. So is that referencing the lower component of both buckets, or is that the high side, if I did both?

It's the most common one. So in recycling, we only offer 96-gallon carts. Our most common on the garbage side is 64. So that's the one that we use. It's about probably 75% use the 64-gallon cart.

Thank you. Anything else? Commissioner Trumburg? Well, this is just... not super pertinent to the budget, but what was the reason that we took glass out of our recycling all-in-one containers? Was that safety?

It was kind of, I do not want to say it was a forced endeavor, but basically what we heard was our partners who accept our recycling items had said that their outlets are no longer taking glass co-mingled garbage that has glass in it. And why was that? It was because most facilities still have hand sorting for these types of items. And it is dangerous for those that are doing that work. So they said, these facilities are all cutting it off. If we are still going to continue the glass, then it's going to have to go to some facility elsewhere. And it was going to basically double our rates. Don't quote me exactly on those numbers, but that's roughly what I remember. And at the time, we kind of evaluated, what do we have for glass? Where does it go? What's being done with it on the back end? And the real truth of it was that a lot of the recyclable materials that are in commingled garbage, I'm sure if anyone's listening that's interested in this topic could argue me on this, but from my research on it, was that some of that cardboard gets embedded with glass, and it's hard to recover that. So some of those items just end up getting thrown away anyway. So we thought the best benefit for us was until that market gets a little bit better on the back end, that we would just end that. We would still take our separated glass at the drop sites. We reuse that in a beneficial way for ourselves out at the landfill as kind of a drainage layer for certain items rather than purchasing sand. So we did find a way to kind of beneficially reuse the drop site material that we got, but thought it was best if we just end the glass for now.

Thank you. Thank you. Seeing none, we'll go on to Mr. Hall with water.

Yeah, thank you, Mayor, Commissioners. Thanks for your time. Just first, just echo something Susan said at the beginning, just appreciation to Carrie and all her work over our time working really helped us out in the financial world. And then also just a thank you to Susan and her team and Jill and her team for the help on both financial and personnel stuff. So we'll just kind of move on. So, oh, new one here, the org chart. Okay, I'll start over here, so. Yeah, these are new. So with our org chart, what we do is we have, I won't spend a lot of time on this, but we have allocated 38 full-time employees. We really have a operations group that operates a plant and our residuals plant. And then we have an improvements group that really works on capital projects. That's on the very right side of it. And then we just have some specialty areas. But I won't spend a lot of time on this one. I guess from a request standpoint, I could touch on this. But for this year, there's no personnel requests in the budget anyway. But anytime we have a retirement or someone leave, we do reevaluate our org charts. So in this case, we're expecting one of our retirements of our pretty high-level people at the end of the year. So what we're going to do with that is we're going to change that to a full-time electrician if we can get one. And then what we've done over the past five years is we've – contracted with an electrical contractor to provide an electrician. So we're going to not do that, which would be about a $200,000 savings for us. And so we won't change the number, but we're actually going to kind of go down an employee. So just so you know, and then When we get to the capital improvements, so what we do, we have kind of three lines here. But the water plant tenure, that's really, we put that in our operations budget. That's really for small stuff like, say, mowers, snow removal equipment, those types of smaller things. We have capital improvement, repair and replacement. What that really, that is, is it is a really big operation that we do. We can't, from a budget, we can't forecast what's going to happen a year and a half in advance. So we do have, like, breakdowns. For example, in June we had a motor go out on our Cheyenne pump station, and so it's too expensive from a treatment, not to, deal with that. So things do come up. We've had breaks on our Cheyenne line, probably a handful of them since I've been in Fargo since 2012. The other thing that would go to is say like we have a membrane plant, which is extremely valuable to us from a cost standpoint. We do have periodic membrane replacements, so those types of things. And then Also, I did provide to the budget team, we have just a kind of a prioritized list of things as we get to and we work on it. So we're trying to kind of stay away from the deferred maintenance, just kind of keep up on that. So that's what that's about. The last line there, We're working on, we're about close to 85% done with the meter replacement project, and we'd like a little cash to continue on that. I'm not sure if we'll get to 100% next year, but work on that. So that's the capital part of it. Okay. Okay. I had to improvise there for a little bit. I didn't know those slides were coming. But that helps. So as far as what we do, we serve drinking water to over 180,000 people. That's Fargo, West Fargo, and then parts of Cass County, more locally, not out in Cass County, but more right around Fargo. We have two river water sources, Red River, Cheyenne River. We use them strategically, whatever is most cost-efficient to treat, or if there's other issues, we use both of those. We don't have any access to groundwater. We have two water treatment plants, older 1997 plant that's 30 million gallons a day, a newer membrane plant, which is 15 million gallons a day for about 45 million total. Right now this summer, because it is a little bit dry out there, we got good stream flows in our rivers right now, but we're over 30 million gallons a day. a day right now uh and then on an annual basis we were about on average about 16 million a day so that's a lot of swimming pools that's a lot of water there so um as far as um and we're organized a little bit differently in fargo but from a water utility perspective we we're responsible for the larger diameter pipes we have eight water towers in fargo that we operate we also For our regional partners, we use pumping stations. We actually operate some of their towers as well. We have a ground storage reservoir and pump station. We have a storage reservoir on our water plant campus. We also have one down about 52nd Avenue, and that kind of helps us get pressure to the south side and then for growth in the future. And then we have three booster stations. that just gives an overview of what we do and this is a slide i actually had this when we were talking about sales tax several several months ago and i'm really grateful that the sales tax passed that really help help us out or help our our customers out but um so in fargo with our red and cheyenne river We have kind of typical what most systems see which when we look at water quality we look at like organic material in the water and then like you've all heard probably hardness of the water that type of thing but in organics but there's a typical range and then there's There's what Fargo, we're kind of on the extreme. So it's actually a really big deal from a budget and then from a treatment technology standpoint. But I just thought I'd point that out. As far as improvements, we've done, so we did a master plan in about 2005. I was not around for that at that time, in Fargo anyway. But since that time, we've done a lot of improvements, thanks to the sales tax and other things. But it's more of an engineering thing. department led thing, but we've replaced a lot of old cast iron pipe. So that's done really well. Water main breaks have gone down, that type of thing. We finally, after just about 20 years, we got the water towers operating the way it was envisioned in the 2005 master plan. So they really operate nicely, float, have good reserve emergency storage. We did complete and operate memory plant expansion fully in service in 2019. And then since that time, since completing that, we've kind of redone the older plant too. Because design changes, they change things over decades. And so we've really brought that up to current treatment. treatment things, I guess. And then another thing on the very lower end, we did this, this is more for the Red River Valley water supply project, but we built a, so this is kind of a cool thing that we did. So rather than, it's on the Cheyenne, so the Red River Valley water supply comes through the Cheyenne River. So rather than building a big diameter pipe through town, we're actually using like open channels. So basically we lift it over over a hill and it runs all the way to the water treatment plant. So it's a much, much lower cost way to transfer the water to the treatment plant. So, and then the one on the lower right, I talked about that, but that's really to get pressure on the south side and for growth down south. So from a revenue expense standpoint, we work with finance on the accounting part. We also have a financial model that we kind of model everything to project out rates and capital improvement, those types of things. From a revenue standpoint, we have rate revenue, and that's Fargo, that's West Fargo Cash Rural. We have infrastructure sales tax. We have grant funding. And then the SRF, that's really kind of a, we pay contractors out expenses, and then it comes back in, and then eventually we pay the debt service on that. So it's kind of an in-out type of thing. yeah like i i was gonna say funny money but i held back yeah it's gonna but no so uh and then um we have a debt service we try to manage that's really a good program i'll talk about that in a bit operating expenses so it's not just the water treatment plant but i know ben presented to you on meters mains and hydrants we have utility billing and those so we cover multiple departments within the rates and then professional services consultants and then we or other things and then we have transfers we do fund the water the water like when a street replacement project happens Jim he'll probably get to that but with water and water reclamation fund the water and sewer part of it and then we do a general fund transfer so As far as monthly bill, and this goes back to 2025, but this for a three quarter inch meter, 6,000 gallons a month, we're at about $43 and we didn't have a rate change in 26. So we're about the lower third regionally if we look around different. And then getting to budget priorities for 2027, we have two larger Water Chile projects we're working on. Lead service line replacement, we have grant funding. We're approved for about $23 million through 2029. So we're on pace. There's about 2,000 or roughly 2,000 lead service lines at least they were in town but we're on we're on schedule to replace about 500 this year and then we're going to try and get that mostly done by 2029 so we're working on that also trying to finish up our meter project so those are the two two things we're working on um and then um just from a general operations budget we're we're gonna try we we just come off like if you call it starting with the membrane, the treatment plant, and then West Fargo coming on. We've been about 11 years of just straight on capital projects. So we're kind of finishing up some of the big stuff. So now we're doing another master plan. We did one in 2005 and then we're doing one right now to kind of look into the future and look in when we might need to expand like the water treatment plant and look at future growth. I know we did the growth plan, so we're built for about 50,000 more people, but we got to start looking ahead at that. But just staff training, development, retention, work on our staff building team. Another thing we want to work on, which we don't have right now, is a computerized maintenance management system. And that would be one that we would try to keep it... lower cost and the intent would be to do that a lot just internally. So it wouldn't mean a little bit of help but kind of self-perform. We built a really cool reporting system so we see all kinds of analysis data on our operation. This would be kind of the same. We kind of built that internally and we'd kind of do the same here. Plant optimization, just address needs as they come up. From a rate standpoint, some of the factors, River Valley Water Supply Project, inflationary adjustments, and then reserves. But kind of the goal to keep lower cash flow type things for the foreseeable future. When we look, we do have strategies. So I showed you before, we're about the lower third. regionally. We do have strategies to keep our rates down. So without these strategies, it'd be close to $68 a month. We're about 43. So the infrastructure sales tax, that's just a huge, been a huge benefit. Donna's job kept the rates down. Regional service, that's actually a really big deal because what we do is we just split the fixed costs or operations costs and debt service that applies to them. And so that's about an $8 a month benefit or a little over for working with West Fargo and Cashflow Water. another thing we do we really work hard at the grants and loan forgiveness type stuff so that helps about seven percent or three dollars um a month for a monthly bill and then another thing we really strive for is to is to be efficient with our product water production. So this one is just a kind of a straight calculation. We have a control system. It measures inventories and flows and it just computes the difference. But the memory plan actually saves us some money. So all in all, it helps with rates. So our major cost to produce water, and this is about 60% or probably a little over 60% of our treatment budget, but it's power, chemicals, and sludge disposal. So that's the thing we really, really focus on. How am I doing on time here? One of the things, just to make you aware of, and we really try to be efficient with our operation as best we can, but we are seeing very significant inflationary increases on our chemicals. So when you look, I kind of point, so the lower part of the building there, that's our older lime softening plant, the upper part is our membrane plant. But from 2021 to 25, we've seen about a 71% change in chemical costs. And that's not just Fargo, that's like nationwide, which pretty much everyone's seeing that. But It does change things, and again, we strive to be efficient, but we're having a hard time overcoming this. If you annualize that, since 2021, it's about 14.3% per year if you annualize that. So it's very significant, so I want to just make you aware of that. um the um the other really big project which is very important long term for uh drought supplies or red river valley water supply project it's actually under construction right now for completion you know maybe right around 2034 something like that but just it's under construction um and so that we're looking at that and then just to make you aware that it's not like a new project this has been going on for decades you know close to 100 years are are the thing we compare against is like the 1930s the depression the drought and stuff but it's been going on a long time so The last thing I have for you, I just want to really, I know that Wyatt kind of covered some of it before, but it's the SRF loan program that we have that's available that Scott and Jim, all of us use, drinking water, clean water side, but it's really good loan terms, 2%, or in our case, like the lead service line one, that's 0.5% versus 2%. but 20 to 30 years. One thing that's nice about North Dakota is you can get loans, whereas in other states it's much more competitive and less likely to get it. So it's a really good opportunity. Sometimes there's grants or loan forgiveness with it. And then what it allows us to do is build multi-generation projects without having short-term rate spikes. It spreads out costs much like a mortgage does. um the way we do the projects is interest only until the projects are completed and then uh one thing i i don't know how much you've talked about it but chemical inflation inflation for infrastructure it's really good that we got a lot done over the past couple of decades so that really helps us moving ahead in the future but really good program i just wanted to talk about that a bit And then as far as the budget, I guess I'll just maybe leave it for questions. But we have revenues and then overall operating expenses. But inflation is a factor. But our budget is pretty, it's a lot to it. There's a lot going on. So that's where I need the help from Susan and Harry and stuff.

To that end, if you want to move that back. So before the meeting, I handed out kind of the detail that ties to this. Just to say this is complicated is kind of an understatement the way we report all the utilities. But you know, we have sales tax coming in one fund, we have debt service out of a few different funds, we have rate revenue coming in different funds. Within their major fund, they have all their individual divisional funds. So one of Carrie's big projects that has just been immensely helpful is to really put it all in one nice little spreadsheet that kind of shows the utility. And this ties to those reports that we gave you. So it rolls up like this. So looking at this is a little deceptive without seeing the back because we have transfers in and transfers out that offset each other so that overstates the revenue and the expense. But by looking at this, you know, you can see those if you trace them across. So it's been a very valuable tool. So thank you, Carrie. I was looking at it last night and it all tied and I almost cried. So very, very happy about that.

Thank you. Mr. Peterson, as the liaison.

Mr. Mayor, thank you. We actually had some time yesterday, sat down with the team over there and I am learning quite a bit in the last couple weeks regarding all my team members here that are blessed. I want to go through our last division, then I have some general comments for the commission and my mayor.

Thank you. Any other questions for Commissioner Strand?

I'm just going to show you how far out in left field I can be at times. You know, and it's not necessarily in tongue-in-cheek. You know, you talk rate containment and always look for opportunities for revenue and I just remember a few years back, I remember, I want to say Minnesota, but Upper Midwest City decided to start selling their water to a company that was bottling it. We have great water and good tasting water. And if ever you can find somebody at one of your conferences that's looking for a water supply and they start selling water, Fargo water, I'd say good for you. Let's go for it.

Thank you. Commissioner Peterson.

Mr. Mayor, thank you. Commissioner Strand, maybe to that thought, give us a 60 second brief on what we talked about in regard to the results you're having with the water output relative to our peers. water quality you said you took.

I don't want to steal your thunder. No, are you more talking about the taste contest or stuff? No, that was pretty cool. It kind of gets lost in the news every day, but we were actually... runner up in the nation on a volume taste test at Anaheim a couple of years ago. I was like, I remember Commissioner Turberg, that was like our first meeting. I talked to her, got to tell her, hey, that was pretty cool. So, and then from a state standpoint, so we compete every year, at a state contest. We've been top three like four years in a row now, so that's good. So, you know, not everyone loves our water, but we sure try hard to make it good for everyone.

So, thank you. Thank you. Commissioner Turmberg?

I think it would be great with a wood chipper logo, and we could make some money. Side note, what can I tell my kids about bathroom water being the same as kitchen water?

Oh, bathroom water?

They say it tastes different. It's the same water, right?

Oh, yeah, it's the same water. Well, you know, I saw, yeah, no, it's the same, it's funny. Because I saw, this was one I used to use in some of my presentations and stuff, but there was a fire hydrant on it, and then one side of the fire hydrant said sparkling water, the other said regular water. It's kind of that same thing, so.

Anything else? Thank you, Troy. Thank you. With that, we'll move on to Water Rec with Mr. Hausauer.

Good morning, Mayor and Commissioners. My name is Jim Hausauer. I'm the Water Rec Utility Director, and we will now talk about bathroom water. Oops, am I going the wrong way? So just to give you a quick overview of our utility, you probably noticed the construction that's been taking place. In 2025, we finally finished our seven-year expansion project of the water rec utility. We opened bids in 2018. We've had full construction for seven straight years. And in fact, even this year, we've got contractors up there doing punchless items and warranty items and that type of deal. So we've had contractors on our footprint for a long time. What we installed with that expansion was something called an integrated fixed film activated sludge technology. That may not mean much, but it's a really high performance, small footprint technology just because we have such a limited footprint up there. It's a finite footprint. We actually can reduce total nitrogen and total phosphorus about 80% to 90%. And when we were designing this plant, we wanted to make sure that we exceeded the discharge parameters for the city of Winnipeg. As we were discharging into the Red River, we didn't want to have any problems with our downstream partners and international waters and that type of deal. So we had that in mind when we were designing this plant. This type of technology does deal with a lot of electricity because it's based on aeration. So we're using blowers all the time. As we sit today, we can treat an average daily flow of 29 million gallons per day, and that's a 50 million gallon hydraulic peak. So in a rain event, a flood event, we can get upwards of 50 million. And what we're seeing today on an average daily flow is about 17 to 20 million, depending upon if it's a wet event or not. And all this is a population equivalent of 271,000 people. In our collection system, we operate and maintain 73 sanitary lift stations, Talked about this yesterday with the stormwater utility. It's a consequence of the Red River Valley terrain. It's flat. We have to pump to get to our endpoint. I think as a comparison, Boulder, Colorado, which would be a comparable city to the city of Fargo, they have five sanitary lift stations, and we have 73. We also maintain 89 miles of force main and hundreds of miles of gravity lines. You may or may not have known this, but we are a regional provider for wastewater treatment. We have agreements with many outside entities, whether it's subdivisions or cities or that type of deal. And you can see in 1978 was the first time we had our outside sewer agreement. So we've been doing this for a long time. Riley's Acres, Oxbow, Roundhill, our most recent are West Fargo and Horace. So just a little bit of an overview. We're pretty proud of the fact that we operate and maintain two effluent reuse facilities. Essentially, we take treated wastewater and we treat it even to a higher quality for industrial purposes. We utilize ultrafiltration and reverse osmosis technology. Essentially, it's the same as what you see in the water plant that Troy operates. For example, Theros and Ethanol, we had an MOU with them in 2007. That MOU stated that we needed to provide them 1.4 million gallons per day. So since 2007, we have sold them 6.4 billion gallons. We have a recent agreement with the North Dakota Soybean Processors in 2024. That MOU states that we have to provide them 820,000 gallons per day. And essentially, this is just water would have ordinarily gone to the river, but we're able to generate revenue off of that. These were put together with a three-way agreement that included the city, the industry, and Cass Rural Water. The reason Cass Rural Water is involved is because the pipeline that goes across the prairie is in their jurisdiction. So essentially, Cass Rural Water funded the projects. The industry paid for the debt, and the city would then own and operate the effluent reuse facility. So it's a really big win for the city. If you look back in 2007 when we started this with Thurlson, there weren't many communities in the United States that were doing reclaimed water for industry. So we were a little bit of a leader there back in that time. Here's our org chart. Kind of tough to see here. The only thing that I want to make a note of here is we are not asking for any new FTEs in 2027. In fact, we're going to have a reduction of two. So if you look at the right-hand side there, we have the compliance group. Essentially, we have two gentlemen that are going to be retiring from the compliance group, and we're essentially going to put those duties onto the inspections team. So they will take over those responsibilities to do the sump pump inspections and verifications on new construction and existing homes. So this is just a quick snippet of our capital requests. You can see the small items up there as far as the pickup, the utility vehicle, the dumpster, and that type of thing. The larger items there, you will see the water rec and effluent reuse, pump station valves, membranes. That's kind of, it's more of a rainy day fund because if a valve didn't close, for example, in one of these effluent reuse facilities, there would be the possibility that acid would go to the wrong place and damage a quarter of a million dollars worth of membranes. So we're not planning on using it. It's just there in case something catastrophic happens. The same thing with the lift station R&R fund. We've had gravity lines that have failed in the late 20-teens, and the repair costs were close to a quarter of a million dollars to repair them just because of the location and the difficulty in repairing them. The one true project that we probably will be looking at is the lift station 58 and Force Main. We need to put a Force Main under Interstate 29 to be able to pump flows from South Fargo and to get it to our 45th Street interceptor. So some of the emergent issues for us, first and foremost, our utility has its own revenue adequacy model. We're able to identify trends and forecast rates, and we use that every year at budget time. Some of the pollutants of concern, we have a laundry list of items that we do need to test for in our current permit. We do it on a daily basis, a weekly basis, and a monthly basis. And before we can discharge to the river, those are some of the things that we have to meet. We also have to test for phosphorus and nitrogen. We test for that monthly, but we have no numeric limits yet. There might be a time that our regulators will say that we have to have a numeric limit for those. Again, the energy cost, the new treatment train requires a lot of aeration for treatment. So electricity is a big budget line item for us. And moving forward, we're probably going to be looking at three rather large projects. Our biosolids management, essentially we want to improve the treatment. And the automation. Currently we have staff that are working on Saturdays and sometimes on holidays. Just because our new removal rates are so high with our new treatment process, we're generating more biosolids. So to keep up with it, our staff are working a lot of extra hours. The admin building, if and when you ever come out and do a tour at the water rec utility, you'll see that we might be due for a new admin building. The original was built in 1934, and I'll just leave it at that. And then the west side interceptor, it's one of three large interceptors that conveys wastewater to the water rec facility. This was installed in the 70s, so of course, 50 years of sulfides and that type of deal, we're going to have a rather large project to rehab that. Our 2027 budget requests, again, operationally, the biosolids disposal, we are permitted to dispose of our biosolids at the landfill. It's probably the least expensive way to dispose of biosolids, but we also pay a tipping fee for that. And the more we generate, the more we transfer to the solid waste utility. Again, electricity, I talked about that, but natural gas is a big operational need budgetarily for us. The prices of natural gas has gone up, and we utilize that to heat our digesters. And then, of course, like Troy was mentioning, chemicals. We use chemicals to dewater our solids and for odor control throughout the collection system. So those prices have really gotten high as well. Then, of course, we transfer to the general fund, the capital project fund. And then if there are any road projects in the engineering CIP that include water and sewer improvements, we help support that as well, too. And, of course, we do have debt service. That's one of our larger items as well. And as we move forward, when we talk about revenue projections, those are all generally based on potential rate increases or new users, new customers. So as we sit today, our single family residents, they pay $25 per household. It's one of the lowest in the region. Our outside users also pay $25, but we charge them a surcharge because we take care of their lift stations. Multifamily and commercial, $2.55 per thousand. That's just based on meter readers, water meter reading. And then of course our wholesale and volumetric rates for West Fargo and Horace, that's $3.71 per thousand. The reason they have a different rate than other outside users is we don't take care of their lift stations, they take care of their own. And then of course the reuse reclaimed water which I mentioned earlier with Thurlson and the soybean processors, they pay $3.52 per thousand. And we will have more discussion to follow about rates. But you'll probably see this slide a few more times. We're really proud of this. First, you can see amongst all the peer cities there how Fargo is one of the lowest. I'd like to say it's because of great management, but I think it has more to do with the infrastructure sales tax and how we were able to keep our rates low over the last 20 years. So we've been really happy about that. So with that, I'd be happy to answer any questions if there are any. Oh, this was inserted here as well, too. And this is just the preliminary estimates for our revenues and our expenses moving forward. So with that.

Thank you. Commissioner Peterson as the liaison.

Mr. Mayor, thank you. I don't really have a question or a statement. And it's an interesting study over the last couple weeks that I'm learning. what we've been up to here at the city. I think that these are three pretty easy budgets. They're fee-for-service. What does it cost to produce? Here's your bill. But the important takeaways in all three of the last presentations in particular is The innovation that the team members have been doing on the behalf of citizens of the region, not just Fargo. Again, reinforcing the regional solutions are the answer. I think that you've got, and if you do have time, please, if you have not made time and you do have time in the future, make time to meet with these folks on site within their facilities and learn what they've been up to because there's a lot of nuance to what they've been up to and there's some complexity here. regarding even our relationships with NDSU on some studies they've done and results that yield a positive outcome for all of us that pay bills in the city of Fargo. So gratitude to the team, gratitude to all of your team, not just my leadership team, but gratitude to the team that has been working on the behalf of the taxpayers of the Fargo-Moorhead, West Fargo metro area. Thank you, Mayor.

Commissioner Schramm.

Thank you. I'm just curious about, you know, sometimes we get thrown surprises and one of our surprises regionally in the last while has been the data center and conversations about electricity and water usage of a data center and then of course our relationship with Harwood. How does that look? Are they going to be using our water? Will that be reclaimed water? Will they be I just want to know the bigger picture there because I couldn't answer it to people accurately necessarily at all.

Yeah, with the data center, they're using more water-efficient technology for cooling and stuff, but they actually drilled a well, I believe, out there. I mean, there's really limited groundwater under the area here. There's only certain pools. So they're not going to be getting any Fargo drinking water for that facility. So that's how they're doing it.

And commissioner on the wastewater side, they are not not hard piping anything to the city of Fargo. They're not hard piping anything to the city of Harwood. They have holding tanks, so they will be pumping and bringing it to the wastewater utility for treatment. But that cost is significantly higher than what they would pay a volumetric rate that if it came in a pipe, for example. So.

A question I have is in regards to, well, just a level set. I hear the term gray water, different terms of water. Can you just give us some generic definitions of what the language you'd like us to use or learn as a part of what is water? I know we use reclamation, but also is the water going out to the soybean processor in Theraltsen gray water or something different because of how it's treated? I mean, if you could just educate me since we have some time.

Well, you know, it depends who you talk to. Because a lot of times if you get in the rural settings, they'll say something after a septic tank is considered gray water. I'd still consider it sewage because there's pathogens in there, for example. So some people also say gray water would be wastewater from... like a washing machine or a dishwasher that they try to reclaim in some other way, that could be gray water. I think it's all where you come from and what you're used to. What we send out to Thurlson, it's this close to drinking water, but I wouldn't tell anybody to drink it. But it's reverse osmosis quality water, for example. We looked in the basin yesterday, and it's crystal clear. It looks like tap water. So to use those phrases, it depends. If you're talking like in a rural setting, like a septic tank and drain field, or if you're talking about trying to reclaim water to put in your garden, for example.

And another piece with that is, do we have capacity for additional sales if there's other industrial users? What does that look like?

So as far as like reclaimed water, like with Thurlson? Correct. So in 2007, we worked with the State Water Commission at that time to have what they called a pointed diversion permit. So essentially, we had to prove that by diverting this water away from the Red River, we weren't going to harm any downstream users. And that volume that we were given with this permit is 4 million gallons per day. We're currently using 2.2 with Thurlson and the North Dakota soybean processors. So if someone did come and knock on our door, we could build another reuse facility and provide them close to 1.8 million gallons per day with that permit.

Mr. Turnburg.

Just curious. I remember going on a field trip in college and all of the items that have come through. What is the craziest item that you've had come through?

Well, a live boa constrictor, a yellow one that was about this long. And we took it back to NDSU. I don't know where it came from. Somebody just flushed it.

Commissioner Peterson. Anecdotally, regarding the permits, one thing I learned yesterday was we are permitted, as you just said, I want to reinforce this, through the state of North Dakota, even though this does wander into international waters. I was happily stunned that our friends in Minnesota have not tried to intervene and cause trouble, and our friends downstream in Canada through Winnipeg, as an example, have also not. So we're doing a good enough job where no one's worried, and that made me really happy. So should we need something in the future, it would be much easier to get missions accomplished. Thank you, Mayor.

Commissioner Strand.

I don't know if it's my imagination or not, and I've lived in many different places. I've never had water pressure anywhere. I've always been marveled at New York City when I visit this big city and go, how do they get this water pressure in this big city? But how do we do it? Because I have not seen any examples, hardly at all, of the great water pressure we have.

Oh, no, thanks for the question. I did, in one of the slides I talked about, one of the things, well, our water pressure, it comes from the water tower levels, the water levels in the water towers. And what we do is we push out right by the treatment plant. We have pumping stations, so we push out enough water. We try to be kind of somewhat constant during the day. So when... in say the morning, you know, people wake up, they shower, they use more water. So we see patterns of how people use water and that the water does fluctuate up and down. And we want to do that in our water towers, but it's really the water level in the water towers provides the pressure. When you get to like different, like say New York City, I imagine they're using like pumping systems. The other way you can, another way you can do it is you can just pressure control your pressure through regulating pressure and not have towers. But the risk when you get to those types of systems, you can maybe get situations of negative pressure because you kind of got to keep up with the demand. where you can maybe, you know, it's more risk of contamination of your system. Whereas the tower system that we have, it just keeps pressure like all the time, you know, throughout the system. But it's just, yeah, basically the level of the water towers or level of the water in the water towers. And we have eight towers in our system in Fargo. West Fargo has five. And then Casserole has won by north of Horace there. So that's kind of how we maintain pressure in this area here anyway. Does that make sense? Yep, very good.

Thank you. Okay, we'll move on to our 1115 item, the rate discussion. Who's helping me with that? Is that you, Brenda?

That would be me. I get to close it out, I guess, other than maybe Susan will do a final. Erin Commissioners, I am happy today to do a summary of all of our rate recommendations for 2027. You know, we have a lot of individual discussions, but really, we need to then bring them all together and take a look at them holistically. The only way I figured we could start this discussion is to start with a thank you to the community and especially the residents of Fargo for supporting the extension of the infrastructure sales tax. Because a lot of the water and the sewer rates would not be where they are at today without that. So the one cent infrastructure sales tax has been used to fund our water, water utility, wastewater water utility, and our roadway preservation projects, along with the flood and drought improvements. What you see here is the sales tax really did what it was intended to do by keeping our utility rates low from 2008 to 2022. For the last 14 years, our rates only increased 35 cents for residential wastewater and 20 cents per 1000 gallons for residential water. So the increases in the recent years have been necessary due to the post COVID increases that we've seen in chemicals and operating expenses, our plant expansions, along with the sharp increase in our construction materials and labor costs. So to date, we have really maximize the benefits of our infrastructure sales tax. And you can see this in our 2026 residential rate surveys that we complete annually. Fargo is in about the bottom third for water. And then wastewater, we're about as close to the bottom without being at the bottom. So historically, You see, so up to this point, what we've really done with the infrastructure sales tax is a quarter has gone to flood protection. That is dedicated to the diversion. We have a quarter of water, a quarter to wastewater, and then a quarter to streets. Going forward, we see this distribution changing with the Red River Valley water supply projects. project coming on board, we see these splits being more fluid going forward and being incorporated within our budgeting process. So no longer will you see that quarter, quarter, quarter. We will see where those needs go and let those lines move as we approve those budgets. And with streets, they look out three to five years will, I would see us looking out more forward than just a year, but kind of have that idea of where those percentages lie. And we have a lot of collaboration between our departments. And so that's how I see us working through those splits throughout the throughout the future. So yesterday, in the presentations, we saw the proposed rate increases for street lighting. There were no changes to the commercial, but looking at a more equitable structure, or no changes to residential, I apologize, but a more equitable structure on the commercial. Storm sewer was a 12.5% increase, and For forest, it was $1.02 for residential. So I'd like to just go through some of the highlighting slides for these utilities. For the first time, we've been able to put a revenue adequacy model together for streetlights and traffic control devices. This is exciting, and the engineering department, they've been working on this for a while. And so looking at those projected revenues, you can see what will be needed to be able to manage the utility. And so you know, as you look at how we were distributing the rates for the revenues, you can see where we were landing in our commercial classes. And so throughout the evaluation, it was obvious that we needed to look at a restructure on the commercial class rate. And so the recommendation that we saw yesterday was a five-tier commercial rate design. And so by doing this, what it did is it equalized the splits on the revenues more equitable and more comparable to our other utilities. Storm sewer, based on the ongoing revenue anticipated, along with the expenditures we're seeing, the rate adjustment proposed was a 12.5%, which is equating to about $1 a month. for residential rate. For forestry, it would be about a 20% rate increase. And this is, you know, looking at the projected revenues and then the rising operational costs, along with the increased financial obligation to our Emerald Ash Borer identification and management. And so we would be looking at $1 to increase for residential. As you can see in these slides. The last time we raised forestry was two years ago. And so typically, you're seeing about an every other year increase on these utilities. So for our proposed water utility rates, you know, Troy visited about what are some of the issues they're seeing and the increased in costs. And what we're seeing is you know, the increase in costs and chemical and operation. And then we also have the debt service for our capital improvements, our expansion, that has allowed us to be to regionalize the cost of the membrane treatment plants. And then also, as we look at it, the changing of the sales tax distribution, and putting more fluidity in where we're allocating the funds and how much to each. So also we have the Red River Valley water supply project. And so to this point, what we have had is our water utility has covered those costs. We are now to a point where we are creating its own line item. And this is also part of the model that we've had and proposed as we've gone through the Red River Valley Water Supply Project. So we knew eventually that the water utility would not, the cost would come to a point where it would have to become its own line item. We are now to that point. And so you'll see that we are proposing a $3.50, 15 cent charge for the Red River Valley Water Supply Project. Now that is only for the City of Fargo share. When we look at our regional rates, that allocation is being included in the regional rates to water and casserole water. So you'll see the total impact of the residential bill would be $7.75. As Troy had talked about earlier, you know, the leadership and staff have done a great job of looking at different ways to do rate containment strategies. And so Troy had gone through this earlier, I just wanted to re highlight all the hard work that they have done. And then as he talked about earlier, chemical costs have risen exponentially, and are impacting the cost of the operations. So you'll see a bunch of double-up slides here. And then one of the things I just wanted to reiterate and what Troy talked about is the Red River Valley Water Supply Project. I would say it's talked a lot, but it's not talked a lot about. And it's just been in the works for such a long time. And it has gone through multiple iterations, but is finally coming to fruition. And we're finally seeing that project moving forward. And I'm going to hand it over to Troy to talk about the next slide.

Yeah, we're looking at or going to be recommending just a couple of structural changes to how we do rates. One on the top there, what we have in Fargo is called a declining block rate. And we have some statistics of larger systems across the nation. This is really... unusual that we have a declining block. So the more water you use, the less you pay. Generally across the nations, it's more of an inclining block. And that's for a couple of reasons. One is the more water you use, you know, we've talked about SRF loans and building expansions. Capital infrastructure is very expensive to build. So it's more of a water conservation thing, so that's why they have the incline in black. That's more common across the nation. The other side is, just as Brenda talked about, the Red River Valley water supply project drought, the source water we have is kind of a finite amount. We'd like to look at going away and just more of a flat rate for the volumetric. So it would be kind of the same. The other thing we'd like to look at is one thing we do, which our neighbors to the east, west, and cash rural, So when they bill for their water, they have a fixed or base meter fee. And then the volume is on top of that. In Fargo, we include the first 2,000 gallons in our base rate. And that's not something our neighbors are doing. And then going back to that same statistical stuff across the nation. We're really in kind of the minority that do that. It's only, I think, about 20% of the systems that I have access to data across the nation, larger systems that actually do that. So rather than have a real significant bill impact in the near term if what we're proposing is we just gently move away from that over the next period of years. So in 2027, rather than 2000, we'd go to like 1500 as part of it, and then just at some point in the future, just get away from that. So those are two things. It's just more kind of modernizing our rate structure to be similar to what other people are doing. I just, that's kind of what I have for that.

Can I ask for clarification on this grid? Because, so the previous information that's been given to us specifically in the sheet, not this sheet, but the sheet that looks like this, we had said that proposed rates would go up $4.60 per resident, but now I'm seeing, is that an averaging of how this all works out, or are these two different conversations and I'm not tracking?

Yeah. So this would be... Go ahead. We'll take this one. This would be the impact of changing that. So it's like a subgroup of that 460. So part of that 460 is being impacted by this change.

So I'm a residential water user. Am I going to see, if we move forward with this, am I seeing a 460 increase on my bill or am I seeing something different based on my water usage or a combination of the two?

Yeah, so the 460, this change here going to $1,500, that would account for $3 of that 460. The 160 would be some of the other changes. So this would be included in that 460 increase. So like on a... A three-quarter-inch meter, 6,000 gallons, the bill impact on average would be $4.60 to include this change here.

Does that help? So this is inclusive of the $4.60 being discussed? That is correct. Thank you.

Mr. Peterson. Mr. Mayor, thank you. What is the number of users at each tier? Can you give me a guess at that?

I don't have the number. The majority, obviously, would be under 200,000. We did look at that, not recently, but we looked at it a few years ago from a sensitivity analysis kind of a thing. But I don't have that number. I can get that for you, though.

I'm going to presume the lowest tier is going to be very minimal numbers of people. And where I'm getting at is this will impact pretty much everybody.

Correct. So that first, yeah, so like that first going to that 1,500, that would impact every meter out there. So it would impact every meter out there.

And then in our budget right now, what number is in our budget? This or the previous? This.

It's the same. So this, when we do a 460 residential rate, that's including reducing that first by 500. So it's already included.

Thank you.

Commissioner Strand.

Thank you. Just a couple notes to make, and thinking out loud as much as anything, this $3.15 Red River Valley water supply. Is that a brand new charge to the folks? Or is it just the way we're divvying up the infrastructure tax?

Yeah, so I'll try and answer this. So what's happening is that the project is being built right now. So the annual... amount we have to pay from Fargo and our regional partners, that's going up. And so in the past, what we've done is we've just included that in our water. It's been built into our water rates, but now it's going to get to a point that it's sort of like sales tax brings down our rate. This would really inflate our rate over time. And it's kind of to the point we should, we would like to separate those into two different things. And I know we're, I think up north, Grand Forks already does this, where they have a separate rate, but we're kind of to that point that it's being built.

Those series ABC, the alphabet soups that we've been approving over the course of several bienniums, The first ones were pretty nominal, and those were absorbed by the water rates. We're getting to the substantive ones now where they're starting to have debt service, and so we need this to make those payments.

And here's just the note I'll make without any substance much other than that for the moment. You know, in my mind, we have this teeter-totter of resiliency and protection, and one of them is drought protection, one's water protection, and the diversion project has been entirely $3.2 billion of of that side of that teeter-totter without any assessments to the people and to the owners. And those assessment districts were created, but they're intended to never be implemented, hopefully, for the diversion funding as to the property owners. This, to me, is an assessment directly to the people. And I wish we could find another way to fund that without directly assessing each property owner. 315 a month is pretty substantial. It's just a note of how you get to that point. And if there are any other options or ways or federal fundings or whatever, like we've done with the diversion to supplant, this funding so that it's not on the individual people so directly.

So if I can jump in and Troy and Susan correct me. So I was talking to Spencer earlier and we just have to remember, so our cost is 25% of the total cost. So the state's picking up 75%. And then there's been discussion of federal funds helping us bring that even down further. And then our city Fargo allocation of that 25% is 67%. So we're continually making improvements. And I think there is some potential of maybe some more federal money. So as those come in, that's going to keep massaging what those numbers look like.

And I'm just optimistic and irrationally so that maybe we can get some more federal monies to diminish the burden on the folks. Here's my other observational point to make. On page three, when you're talking about the infrastructure sales tax distribution going forward, all right, and you've modified it from 25-25, 25-25 to a variety of things. I would like to add another category into our thinking caps with that whole approach. And it doesn't have to be a big piece of the pie, but I think housing is an infrastructure issue. And I think that a small percentage of that diminishment of flood receipts from that sales tax infrastructure I believe we have a valid discussion to have. Could a quarter percent of a quarter percent or a 15% or 10% go to housing infrastructure as an infrastructure need? And I would like to put that on that radar as another element to see if there's a way to incorporate housing as an infrastructure into the infrastructure sales tax. It's just a wide open topic going forward, but in my mind it would be really a valuable one to vet.

And I think that would be, it would be a legal question we would want to talk about because that was not listed at all in the ordinance or any of the language. And so that would be something we would want to talk about further.

If I could just, maybe this is me just speaking out loud in regards to what I've learned about the Lake Agassiz Water Authority, our role with the Red River Water Supply Project and kind of repeat what Brenda had said, and this is more for commissioners and the public to understand. So when Brenda had said 25%, she meant the users. And of the users of the Red River Water Supply Project, Fargo is 62, 67? 67-some percent. Grand Forks is a good share of that. And then there's all the potential users down the road. And that's where our opportunity as building this regional infrastructure, this statewide infrastructure is, is if we, as this gets built out, and I have conversations ongoing with the state about financing models and such, getting other communities on board for their resiliency and the inputs they would have to cover, but as they become ratepayers or buy into the system, that helps really cushion that and potentially even I shouldn't even say it all, but potentially even lower that impact for our Fargo folks. But right now we're carrying the burden to get it finished with the hopes of we'll build this statewide regional infrastructure that benefits the center and the east of the entire state. You can clean me up if you need to.

And I'll look to...

No, that's a great summary, Mayor. Thank you. And Commissioner, to your point too on rates long term, the commission obviously will get an opportunity to take a look at those rates over time. And this will be actively managed in a much like we think about, you mentioned the diversion assessment districts created to backstop the the eventuality, or hopefully not eventuality, but the occasion, if you didn't have revenues that produce, that you'd have a fallback mechanism. We obviously want to be as austere as we can on these rates long term, and so we'll be revisiting that every year, but to Brenda's observation in summary, it was really quite remarkable that Fargo was able to go as long as it did, you know, before having to kind of blink on a more permanent, dedicated, fenced off piece of revenue on the rates for the project. But we are looking forward to moving forward. This is something that has been such a long time coming, not only for Fargo, but now for West Fargo, for our users in the East, as well as Central North Dakota. We're going to keep monitoring this. The commission will hear about this more too over the next four or five and six years. So a lot more to follow.

Mr. Peterson?

Mr. Mayor, thank you. I think this is an education piece for not just us, but the public at large. Because there will be a time, and it may be decades, but there will be a time when this widget is paid for and this fee becomes a maintenance fee, right? So this isn't a permanent thing. This is a, you've asked us to perform an activity, insurance of water supply, Here's the bill. Here's how we're paying it off. And over time, it will be paid off. And then it's, as I said, just a maintenance fee. So I think it's important to discuss that education piece, that this is purposeful. It is pointed and intentional. And over time, it will eventually certainly be reduced. It may go back to the point where we were prior, where, yeah, we just operationalize it, and it's fine. We don't even have a separate line item. So the education piece, Mr. Mayor, I think is incredibly important. Thank you.

Okay, can I keep going?

Yes.

No, you're good. No, I'm not done yet. But it's good conversation. So with the $4.60 increase to water, you see, you know, we're inching more towards the middle of the pack when you look at our rate comparison. In regards to water reclamation, today they said at $25 a month, and we are proposing 30. As Jim talked about, the needs that we're seeing are the energy increase costs that we're seeing, with the better efficient plant, we're seeing way more bio solids than we have in the past. And so managing of the bio salad solids, we do need to start getting ready for an administration building. Their building is very old. And so we just need to start preparing for what that could look like. We do have the West Side Interceptor rehabilitation project, the chemical costs, and then also the debt service for the regional water reclamation facility expansion. And then the flexibility of that infrastructure sales tax and kind of looking at there might be some reduction on the allocation to water reclamation. So again, Jim talked about his rate containment strategies. The infrastructure sales tax is one of the largest parts of our rate containment strategies, and then also regionalization and the grant loan forgiveness. You can see what a $5 increase does. We aren't second from the bottom, but we're still fourth from the bottom here when we look at our regional surveys. So putting them all on one page, this is what we're looking at for residential. Streetlight utility would have no increase. Storm sewer utility would have $1. Forestry, $1.2. Water, $4.60. Wastewater or water rec, $5. And then the Red River Valley supply project would be $3.15. So as you put them all together, it would be a $14.77 monthly increase. I wanted to add this slide. This is not all of them, but we did this two years ago when we did our water. Two years ago, we had a water, a wastewater, and a storm sewer increase. And so this is how would you pair all three of those together? Because those are utilities that the majority of cities all charge. And that's where we rank with our comparable cities for the monthly rate. And with that, that is all I have for you today. And we'd answer additional questions for you.

Commissioner Strand. Thank you. I didn't know you weren't done. Okay, there's $1,477. Is that the increase that's being proposed, everything totaled up?

All totaled together, it's $1,477, correct.

So the initial foray into this is what's that compared to current rates all added up now? If it's $1,477 over what? So this is...

But you need to add in 86 plus 2,515.

So that's a pretty substantial increase.

Correct.

And I'll just note, you know, in the past few years, a few years ago, we had a doubling of our utility rate increase. So this path going forward of adjuncting our budget by fee increases, it adds up pretty substantially. Now I have my dumbest question of the day. For me, maybe not. in a lot of these categories of types of properties, you know, you have different levels of commercials, you have residential, you have single family, you have mobile homes. What I look for is something that I'm familiar with in my particular little life, and that's a small multi-use building. that has a couple apartments and a couple of commercial units. I don't know where that ever fits in on these rates. I can't quite know where what I'm familiar with land, like you're familiar with a residential rate, but I just don't know where something that's a small multi-use property, how it's categorized. There's a lot of them in town.

I think Tom's going to come up. You can sit at the table.

I mean, at the table.

Yeah. And so I could think of some ways, you know, the small residential type users, when we look at special assessments are almost single family. And so I'll let Tom talk about maybe streetlights, what we're seeing.

Yeah, for streetlight and storm sewer utility, both of those would fall into the commercial category for a mixed use structure.

And so it would be the small, but on the small.

But it's based on, yeah, for, so again, for streetlights, storm sewer, both are based on parcel size. And so the size of the parcel is going to dictate what the rate is.

So the size of the parcel, not just the number of units and types of housing it is?

So again, I'm almost positive for both of those utilities, they're going to fall into a commercial rate and not consider the residential.

And I'm not here to wear my personal hat, but personally I go, wow, that's quite a jump for a small little building that just has a little bit of commercial and is mostly residential. So I don't know how those categories, I've just wondered this over the years, how those get sorted out.

What if I could add, I assume there's also a function of, if you're talking about someone who's renting, generally in that situation, how their agreement with their lease is in terms of who's paying what. So whether it's all going to the property owner and divvied out however they divvied out to their tenants, or what we're seeing more and more is tenants are getting a direct bill, whether it's tied to a meter, especially new, they're all individual or metered generally. So then this would be an impact, I think, to most of those people individually versus the property owner and however that gets spread out.

But I think what I've noticed as we you know, as originally when we were talking about rate increases, the Red River Valley water supply project was part of water. And so then, you know, you're looking at that 775 increase and that's, you know, and that was being deemed just a water rate increase, but it wasn't reflecting just the water costs. And so as you separate that, and you look at drought protection, and flood protection, you know, those have taken for for Fargo, those have taken a lot of whether it's sales tax or rates, it is taken a lot of funds to support both those projects.

Commissioner's other questions before we since we have some time, I think we'll have some just general discussion too. But All right. Well, commission, did you ever have a commissioners, you know, we've been presented over the last three days, the proposed budget put together by staff based on the needs and priorities. You know, one of the big takeaways I have, and I think to reiterate with commissioner Peterson said is that what's been really eyeopening to me in all of this is how hard our departments are working to be smarter, to be more efficient, to find ways, you know, a couple hundred thousand dollars here, a couple hundred thousands there, you know, giving up employees to create efficiencies and merging responsibilities. So that was certainly a theme I saw across all this. So kudos to you all and thank you. I know it's no easy task because sometimes that leads to tough conversations, but we know that the public. Cost is an impact to a lot of us, whether it's what we choose to spend our money on or what we have to spend our money on. And so it'll be an important part of the discussion. But as we prepare for our July 27th Finance Committee meeting, where we'll have to, and I'll make sure Susan summarizes this, and we'll send out an email by the end of the day tomorrow, the commissioners as far as what our homework is or what information we need would be helpful for us to go into that meeting so we know what we're going to be discussing to kind of move some milestones through the process. But I think more importantly for the public, what I'm taking away from this is this is a really honest conversation we've received. It's as transparent as possible. Things about priorities of what some of this money would be going towards, whether it's an increase or not, just the general budget is It's very clear to me in front what's this going to. There's not things being hidden or tucked away for another purpose. So again, kudos to our staff in providing that. So with that commission, I think just some just general discussion about whether it's, you know, we have till, we're scheduled till noon. But if there's any general takeaways you have or things you'd like more information off the top of the head to prepare for July 27th, I think I can just leave it open-ended for us and happy to let us just discuss. Kind of let staff get a feel for it, let the public get a feel for what we're thinking at this point. Commissioner Strand.

Thank you. I don't know what anybody is individually thinking or not about the budget and or line items of the budget. But observationally i remember a few years ago at the very 11th hour in west fargo some some advances were made of very specific line item edits to their budget which led to a really big brouhaha fallout and their finance director basically walked out because at the very last second that's not the time for us to say well i want to modify line item number 422 and then all of a sudden we're just in this big situation where we're approving the final budget and we're getting pulled out. So my thinking is if anybody does have any specific recommendations about specific line item, get to the team now, proactively. Talk them through in advance so you're not dropping that type of a surprise on everybody at the last minute when it's pretty untenable at that point if that's what happens. I just remember West Fargo when that happened. and how uncomfortable it made people, and what a disruption it was, as I saw it, in their internal operations to have this happen between electeds and their finance director. Just an observation.

Mr. Peterson?

Mr. Mayor, thank you. I think to that point, Commissioner Strand, this reinforces why this election for three of us should have taken place in November. Luckily, I've got 12 years of doing things similar to this, but that's not this. This budget is not the way I have done a budget for my 12 years. And again, it's not good nor bad. It's just different. Just because it's different doesn't make it bad. So broadly speaking, if I was to give you examples right now of what I would recommend to cut, I couldn't give you one because I don't fully understand this budget because I've only had it for five days. I do think the interesting portion of it is how certain departments fund the general fund and then how that weaves its way down the river to fund other things. That's what I've got to learn better or learn more about. And I believe you've been here longer than I, Commissioner Turnberg, you've been here longer than I. So from my perspective right now, I'm struggling to understand the nuance of everything. Something as simple as the JAG grant that came up. So justice assistance grant is a federal grant to buy things like body armor. the plates that go inside the body armor. That would have been within my sheriff's budget, right? It wouldn't have been a separate line item. And again, it's not that it's wrong. It's just that I've got to learn how you do these things. Because up until that time, thus my question to the chief was, where's your JAG grant? Oh, that's in a different spot. So trying to figure out the nuances between where the widgets are, not hidden, but just where they are, so then I can come back educated and say, I would make a recommendation to do X, Y, or Z. The big hole I see is what I alluded to prior is, We have got capital projects coming forward that I don't see acknowledged here at all, meaning the firefighter training center, all of the other buildings that you know, Commissioner, and you know, Commissioner, but there's three new faces here who don't have the history, the institutional knowledge that you do. That should be within this budget saying, here's what we're doing in 1, 2, 3, 4, 5, 10 years. That's my history. That's what I did. Right now, the Cass County Courthouse just put forth a $12.5 million remodel on two floors of the annex building, the building to the west. They wrote a check. We don't have debt. We saved capital to prepare for that project in advance where the taxpayers had no impact. It's called our building fund. It just funds buildings. I don't see that here. And again, it sounds like a criticism, and it kind of is, but I need to figure out why it doesn't exist. Because I know we've got CapEx. The training center alone could easily be $25 million. I don't think it will be. But if the commission and the chief thinks the net should be X, well, it might have to be that number. That ain't here. So it's that... I feel as though we're being left to fix the things that have been ignored. So here I sit in a seat, and I don't want to be critical of my predecessors because what was done was done. I need to move on from that. But in the same breath, here I am saying, how did we get here? And having only been here two weeks, I don't know the answer to that. But what I do know is I have a state of discomfort right now, especially with the utility discussion. I have to then go to my neighbors and say, yeah, this should have been done 10 years ago. I don't know what to tell you because I wasn't here. An easy example is, to me, the police station. God works in strange ways. Had this fence not been on our first meeting agenda, I never would have gone down the rabbit hole of looking up what the bond was. I said, what's this 24, what is this? I went down the rabbit hole. I found out what I believe was a lease we engaged for about a million dollars a year. We then invested X amount of dollars into that building, which I believe is three to four million in a lease. And then in 2024, we then bought the building. for $11.5 million. If I'm wrong, please interrupt me because I'm praying to God I'm wrong.

And then we put more millions into that building.

Hindsight's 20-20. I'm in the unique position that in my prime, trying to constrain myself here, in my prior life within one calendar year of the city of Fargo doing this, I did this myself in real time. This isn't hindsight. I did the thing. And your Cass County government spent $2.2 million, albeit for a facility one-third the size. And I'm not questioning the need. We needed a new LEC in Fargo, just like we did in Cass. But in real time, with me and my team, I spent $2.2 million. If my math is correct, on a facility roughly two-thirds bigger, we spent $30 million. And if I take that money back and I say we should have bought it in 2017, what was the assessed value? What would the investment be? The dollars were worth more back then. I see this having wasted a massive amount of money accomplishing the same mission I did for exponentially less. And again, I don't want to be critical because it's so easy, but again, I sit in a unique position that I did this myself for way less. And my main message, I didn't want to even get into this, but I think it's prudent. My main message I want to convey to this leadership team is we need to rethink the way we've been doing business because we've been reacting. And if we're proactive, It saves us, not figuratively, it saves us literal millions of dollars accomplishing the same mission. What would we do if we had $10 million of unappropriated liquid cash right now? Because I propose that's what we could have had, but for whatever reason, we don't. So the methodology, which is, again, why I wanted this done, and I bless you so much for doing this. This was a nightmare between you and the department heads doing this differently. And it's still, I can't see how many bullets we bought. But we're getting closer. And this is how people like me who love this, this is a passion for me, helping our taxpayers accomplish a mission at the lowest possible cost, which is why I love my water people so much, you have no idea, and my solid waste people so much. It's that innovation that none of us see that matters. Because over time, those add up to be huge amounts of money. point being the way we've been doing this i believe one person sitting here having not talked to any of my peers about this the way we've been doing this is flawed i don't know why i don't care why going forward we need to change the way we do things as a city because then we won't have this i don't want to leave city hall Lesser than I found it. When I gaveled in my last meeting, I passed the gavel to Commissioner Tony Grinberg, taking over his chair. I handed him the gavel and said, I have left you a well-run, fiscally sound courthouse if you can keep it. Because my team, you were awesome. And our finances were solid. No debt. Going forward, if you need to fix widgets and we need to hire staff, we need to do whatever, I can't have left it any better than I did. And bear witness to what has happened. They spent eight and a half million dollars, not tax, there's not a person that knows about that. Sorry, Mr. Mayor, this was not intentional. Thanks.

Thank you. Other comments or questions, discussion? Commissioner Strand.

I'll just say one thing. personally experience-wise, Cass County hasn't always been there either. Just saying. I was in a lawsuit once with them and on trial for a week 20 years ago over their following the law. So we all learn. I'll leave it at that.

Thank you. All right. Susan, can you give us just kind of high-level things we should be thinking about to prepare for next Monday's Finance Committee? And again, team, Commission will send out an email by tomorrow afternoon summarizing some of this to help us frame our thoughts. And maybe I'll just reiterate, you know, our goal is to get to the preliminary budget on August 3rd, Commission. So, you know, a lot of work's been done. There's certainly some big things we'll be talking about on the 27th to help set that for us to be comfortable with August 3rd as a commission, but there's still two more months to do work and details and things that might need to be tweaked out. Correct.

Yes, that's exactly what I was going to say, actually. The meeting on Monday should be to prepare us to make a decision on the preliminary budget, knowing that there's still weeks ahead. Both Wyatt and Michael have been kind of keeping track of items. Michael has kind of a, you know, this is a detail, fine detail, this is a major ideas. So we'll try to compile those. But again, if you have things that you want us to get on the agenda, it would be very helpful for us as staff to be able to do some planning before the meeting on Monday, because it's going to come before we know it. So please let us know and then we'll have those ready for you.

I would just add my thanks, commissioners. Thank you for all of this time. This is a really meaningful 12 hours that you gave to this process and the time that you invested in it. I also want to really acknowledge all of the effort, and thank you, Mayor, for doing that as well, acknowledge the effort that the department has really put into this. We want this to be meaningful. We want it to help answer questions for you. and provide a foundation, not only for your decision-making next year in 2027, but for the years that will follow, for those of you who will be here at the table for the next several years. And so to Susan's point, what we will do and what I've already started to assemble, picture a spreadsheet kind of by department, and then the sort of magnitude of the topic that was raised, if it has bearing or weight at a major magnitude level on the 2027 budget and levy. We'll put that in the kind of top tier bucket. More of a kind of a middle tier rates might be a question that may be more research oriented that might also have bearing on 27. We'll put that in the middle category. And then I have a number of research requests that have really been, I think, outlined over our three days together where you've said, hey, I'm really curious about this, or more an orientation and onboarding type activities. curious about that. How does it relate to this? How do we work with another entity? I will also capture that in this matrix so that you can react to that. And we will work on that tonight and tomorrow and really try to have that in position so that by Monday, you can come to that finance committee discussion. And we just get to kind of talk about the big, big picture. So we've been kind of giving you all these good overviews, but I'm going to say, I'm going to agree with Susan, I think Monday is kind of 20, 30,000 feet, but then what do we need to really kind of get to that finish line the week following that? And so you'll have some early information, but then admittedly some of these requests that came in two over the last three days together will be a longer term and longer duration that will be into 27 and beyond, and we appreciate all of that input that you provided on those topics as well. So I'll leave it at that with just a simple thank you to you, thank you to our staff for giving all of their time to this process as well, and look forward to the next steps. Thank you for all of your effort.

Commissioner Strand, then Turnberg.

I'm just, I'm wondering, where does the airport discussion fit in this bigger picture? Because they have an MOU that requires them to come to the commission to tell us the use of their two mills or a financial allocation the prior year and to ask for formally a continuation or a new request. I don't know if it fits in this format or in that format, but all of a sudden we're going to be down the road and that topic will not have been vetted internally with us. Maybe it has administratively.

Thank you, Commissioner. We do have the formal request letter, the transmittal that is required per the MOU that we have with the MAA. I have that. I'll email that to the Commission this afternoon. And what we could certainly do is have the airport through at a regular Commission meeting and just do that brief report that they do. We also were trying to organize, and I know Diana's working very, very hard to get our joint meetings together. Joint meeting also was something that we were talking about with the airport. That likely will be after these budget timelines, however, so if you kind of think about capital, you think about long range, kind of joint planning together. Those will be really reserved for more of a futures discussion, but I do have the formal transmittal requesting the equivalent not to exceed the two mils from the airport authority that I will share with the commission. So they've, in my mind, have satisfied their transmittal requirement to let us know what they're requesting, but then we can also make them available in future discussions with the commission.

And I'll just note that landed on my desk yesterday in the mail. So Susan's passed on, and we'll get it digitally this afternoon. Commissioner Trenburg?

So I have a lot of notes and ideas that I've written down. How do you foresee the meeting on Monday going? Will we be going department by department? Or what would be the best way to bring up ideas?

So I think it would be really helpful for the staff and all the departments if we could agree on Monday what the major magnitude issues are, would really have weight and bearing on the approval of the preliminary. But if there are some of those longer range ones, what I would ask is if the commission could take a look at what I put together in this matrix together with Susan, and please challenge the assumptions. If we've categorized something in kind of a tier two that really should be tier one, I think that would be a good place to start. So I guess I would share that. But if there's other requests that commissioners didn't express in our three days together here this week, if you could send them to me, I'll make sure that I kind of place them where I think it is in order of priority. I'll ask Susan if she has any other thoughts on that.

No, I think that's exactly right. I just, you know, it's a lot of data, and I don't remember all of it either. So in order for us to give you educated answers, it would be helpful to know it up front so we can do a little research.

Mr. Peterson? Mr. Mayor, thank you. To Commissioner Strand's point, I think there is an opportunity for us to have those conversations later. Because if you remember, I asked about some of the folks we're funding for additional data. I think we'd set them up to fail if we forced them to have it by Monday. So then this is just maybe this is a question. I would say it's a question more than a statement, maybe to my mayor. That's my perception of what's going to transpire. I also want to talk about the CVB because there's a dollar figure there. There's other things I want to talk about more in detail. And Mr. Mayor, what do you think?

Yeah, no, I agree. I think our goal is so statutorily we have to pass a preliminary budget just like all the political subdivisions. And so that's Theoretically to the state standpoint, our starting point, we're clearly on the half, getting to the halfway point, and we'll round that out. So I think thinking as we go into the 27th and then August 3rd, if we're able to pass a preliminary budget that evening, I think, so for instance, if we were to pass as it's proposed now, the headlines will say, City of Fargo proposes X for utility increases, right? 24%. just maybe caution us and any of the media that are paying attention that that is an ongoing conversation. We are just getting this through our statutory. So we might need to move the needle a little bit on Monday and have those conversations. So if there's big utility changes we want to propose, our employee compensation plan, some of those big variables are, I think, what we need to get figured out on Monday. And then the minutia or some of the detailed stuff in budgets, we can continue on after that. And again, we'll send out the email that'll summarize kind of what are those, because off the top of my head, again, it's employee compensation, utilities, some of that, because then that all works backwards, and the expenses side as well, if our revenue's impacted and what our expenses are.

Right, and then, you know, as you're thinking of that, remember the ball. You know, as we reduce rates or increase expenses, there's just not enough to go around, so get some ideas on how we're going to pay for things like that.

Mayor, might I ask a basic question? Sure. the approach that administration and you are using, is it to maintain the mill levy? Or is there an expected modification at all in the mill levy relative to the budget itself? But the mills are, what, 57 mills? Is that anticipated to change or stay the same?

It actually, when we did the math on the proposed with the 5% or the 3% and then the additional million dollars that we got to add with the adjusted levy, the mill's at like 58 right now, I believe. But there's a piece of paper in here. I'll find the page number and give it to you.

Yeah, and my answer to that, Commissioner Tran, is I think as we're learning is mills have less of an impact now based on property tax cuts, or property tax caps. And so while the mill, I think, drove a lot of that before, it's a little less. It's just our overall budget based on our property tax revenue.

Yeah, I would just add to, in addition to what Susan said, really the goal was to deliver a balanced proposal or outline or a framework for the commission to react to so that you had a good place to start. And then to Susan's point, we can have conversations that really don't need to be resolved entirely by Monday, but over the next several weeks as we move from preliminary to final. But we wanted to try to put you in a position for success and in a position for having productive conversations with the departments. And so we hope that we've accomplished that and look forward to the next steps with it.

Any closing questions or comments? With that, we ended on time. So good work, team. And again, thank you, everyone, for your hard work and the time put forward for the last 12 hours. This will continue the conversation. I know I can speak for myself, but it sounds like from others we feel much more informed to be able to make some of these big decisions going forward. So thank you. With that, we will close out.