City Commission - Regular Meeting

The assembly is absent. So next we'll do approval of the meeting minutes on June 23rd from the Special Assessment Committee. Any questions, changes?

I would move to approve the meeting as per the Judge June 23rd meeting. We've got a motion. I will second. All those in favor say aye. Aye. I'm going to propose. So motion carries. Number four, brief overview of the process.

So, we just got a hearing of objections today. So, if you want to formally speak, please come up and say your name and address and any improvement in the district that you'd like to make. And then, I think in the past, we've done it where we can listen to objections and then approve all three at the same time.

Would you like to do that today? Approve all three at the same time, you're saying? Correct. Probably it would be better to do it one at a time. Yeah, probably. And then we can basically, for the simple fact of then he's here for the first one, then he can get through the conclusion of the first one. Sounds good.

We'll start with the improvement district, 1345 San Antonio 6th Division.

Mm-hmm. My name is Mark Thielen. I live at 3633 17th Street South in Fargo. I'm here representing the Highland Investment Group, LLC, and I provided Dan with a letter stating I'm here to represent them. I guess our concerns, we have two big ones. One is the engineering cost. In the estimate of probable cost, you had the construction cost bid at just a hair or estimated just a hair under $4.9 million, and the engineering estimated at $815,000, which would be 16%. The final numbers came in. The construction cost went down about a half million dollars, went down to $4,355,000, and the engineering cost went up to $1,158,000, which would be 27% of the total. And I guess our concern is that we're aware of there's no notice sent out that this was a change. We haven't been able to find out why there's a change, what the contract said. In the old days, it used to be the engineering cost was a set percentage, and it didn't make any sense. And we looked at the mill and overlay cost of engineering, and it was 10%. But again, city's paying half of that. It didn't make any sense to us, so we're concerned about that. The other thing we had some questions about was the properties that were zeroed out for the assessment and what the rationale is why property in the middle of the assessment, and you've seen the map, there's several, and right in the middle they got a zero assessment. The guy on the phone told me, well, part of it was it was a city pond. Well, according to state law, they still have a benefit, and we just figured out what the rationale was for the zero benefits. That's our two points of concern.

Thank you. He and I had a chance to talk about an hour ago or so. And I did do some research and as much research as I could do at the time. And one thing to discuss on the engineering costs is when we went into the financial software, there was a payment that was made to the developer for the purchase of the pond property. That was... should have been coded by finance to the land acquisition line item, but it was coded to the engineering item. So one of the reasons the engineering costs are higher than what they actually were was internal coding error by finance on where those should go to. I can have a dollar amount for that. That was a purchase of $290,356. That should have been under the land and easement purchases and not under the engineering line item in the resolution. So there is that. And then the other things that also went into the engineering, there was, obviously there was more engineering who did the design, the construction administration, and then there's additional services that they had provided Special assessment administration permitting right away administration public communication administration and record drawing production those are things that are outside of the design and construction side of it so it's very standard on all of our contracts that those additional services are outlined in task orders that were approved by the city and But then the other thing with that, there was also some building and demolition and asbestos abatement for some properties that Ocho Indy, the developer, had purchased in the area of the pond property. For us to build the pond, we had to basically tear those homes down and abate the asbestos on that. That was also another $30,000 that was coded towards engineering as well. So could code that towards construction. It was coded towards engineering. So I guess the message there is that hopefully just at least for some form of explanation that there was at least there were two things that were, one was miscoded, the other one was the tearing down of those buildings with the asbestos abatement, so.

The one question I would have then, you also billed us in the final cost for construction administration and all those things. Is that going to be reduced because the more money should have came out of that line item under the final estimate of cost instead of, you know, it looked like you had a full amount in there, but you don't have a percentage. But you have under administration $130,000, and based on what the estimate said, that should have included all the construction administration, et cetera. Is that...

I believe administration is not construction administration. That is the City of West Fargo. There's legal administration, legal and administration fees by the City of West Fargo that are included. And that's what that is. That administration line item is not construction administration. Okay, the second.

Okay, so it's not it's legal administration doesn't include construction administration correct correct, okay?

All right well I'll take that back to the owner let him know what it was absolutely then the only other thing that I would comment on is We have in the past not assessed pond lots that's been standard practice for us Excuse me what lots?

Pond lots okay like well I would argue if you look at what's what's defined in a century code that You two things is that everything's supposed to be assessed and the only ones that can make it zero is the assessment Commission that the staff can't and it appeared us that the staff put a zero on there and at least that's what the other guy told me yep, and that is incorrect according to state law that The that the Special Assessment Commission has to find no benefit the staff can't do it

Right, and everything that we're bringing here is a recommendation to the Special Assessment Commission. We, as staff, do not set the assessments. They listen to what we recommend. They approve it to move it towards City Commission. But staff at no time certifies without Special Assessment Commission or the Commission measures how look like you sir?

You know that that's what was being brought to this and I guess we would ask that you consider Assigning assessments to the obsidian properties because that's what state law requires because they benefit from it you can't you can't serve as a pond if you can't get to it to Maintain it and that that's it may be your practice, but I don't believe it's wrong

IT WAS PURCHASED FROM THE DEVELOPER BY THE CITY AND IS OWNED BY THE CITY, AND THE PURPOSE FOR THAT IS DEVELOPERS DON'T WANT TO RETAIN OWNERSHIP OF THE PONDS BECAUSE THEN THEY MAINTAIN MAINTENANCE OF THE PONDS, AND SO THE CITY IS TYPICALLY, FOR OUR DEVELOPMENTS DOWN IN THE WILDS, ALL THE OTHER DEVELOPMENTS FOR THOSE POND PROPERTIES, WE HAVE TAKEN OWNERSHIP OF THE PROPERTY FOR THAT. Correct. If you were to take a look at all of the pond lot properties down in the wilds, I don't believe any special assessments that were assigned to any of those either. That's what we've done in the past. And that's what has been presented as our standard practice here tonight. We can definitely do that.

Yeah, I didn't bring that with me, but I... I dug it up. I'd be happy to send you what I found and what it was based on. Do you have any other questions for me?

No, no, thank you.

Is there any chance, I gave Dan my card. Could you send me a copy of the minutes when they're out? Okay. Thank you. Appreciate your time.

So moving forward off of that, then if we did have another date set for if we needed another Special Assessment Commission meeting, if we are to go back, do some research, we should probably plan on having that other Special Assessment Commission meeting that we have on the calendar for us to come back and report our findings on that and then to make a final determination for this improvement district. NO, THEN ANY PROPERTIES THAT ARE ASSESSED FROM ANY And we do have city lots that we do assess for projects. Pond lots have not been one, but properties that we own with a driveway that are in developments and things like that, sometimes there's a lift station on them, sometimes there's that. Those have been assessed in the past. But one of the things, so when there is an assessment put on a city property, it is not counter-offset by adding costs to construction or anything like that. Basically, the city, just like any normal property owner, would be assessed that that amount say it's a hundred thousand dollars the city would be assessed over the twenty five years the same as everybody else and then we wouldn't need to make payments on a yearly basis of our portion of the special assessments from that improvement district No, not for this. Basically, the pond takes up the majority of the lot. There isn't a lot of room around it, and there are stormwater requirements that we need this certain storage volume for retention for the rain events. We assess all those things. We assess the... Correct, like the right-of-way where the street, so the city through a public dedication has the street right-of-way, so it would be the owner of that. There's a street put on top of it, but we don't assess it. But it's also not a parcel. It's right-of-way. So it's a little bit different when you're considering a pond lot with its own lot one, block four, or parcel number, versus there is no parcel number for a right-of-way. It's just public right-of-way. theoretically that's possible extremely improbable

what the statute says with the center code, my personal opinion would be that as long as it's not something that could be turned around and sold to a benefit for the city without special assessment. Because we've had that argument from private citizens well it's just a a tree farmer and no value there i don't understand why i'm getting special assessed but there is a value if it were to be redeveloped but if this pond were to be if there were assurances or i mean if it was never going to be anything other than a pond then that would be a different scenario versus

Right. There's nothing that says this is here and set forth a pond lot. But for us to... All the infrastructure has storm sewer that drains to this pond. For us to decide at some point in time, or for a developer to say, hey, I'd love to buy that pond lot for you, they're going to have to install... probably a multi-million dollar lift station. They're going to have to find another place to buy and dig a new pond. And frankly, engineering wouldn't approve it. We would not support ever, under any circumstances, taking the pond lot that's servicing this development in the center of it and abandoning it for something else. So it is hypothetically possible, but... hundred years from now that will be upon tonight in my opinion so with that uh... i would suggest that uh... commission just make a motion to table uh... thirteen forty five uh... to get some additional information We Kayla if you can check when we have that next one scheduled Then we can come back with some answers for that and we can Perfect I Yep, I can, as presented I believe on June 23rd, this is the developer Dakota Medical Foundation. They petitioned the city for these improvements. They signed a developer's agreement of You know to have these improvements done be assessed for the improvements. We have received no correspondence of any protest or anybody that plans to protest this project so With that the total project cost did come to two million one hundred nine thousand two hundred ninety four dollars and forty five cents and it would be assessed in accordance with the methodology that was presented on June 23rd and without Hearing any protest I would recommend that this body Confirms the assessment list in and file in the office of the county I Next one, District 2290. This is the public works mill and overlay project that was completed in 2025, and all the costs have been tallied for that. The total project cost came to $1,114,122.08. The city is paying for 50% of that and assessing the other 50% of those costs, and they would be allocated as presented at the June 23rd, 2026 Special Assessment Commission meeting. AND AGAIN, WITH THE SAME, WE HAVE NOT HEARD OF ANYBODY THAT INTENDS TO CONTEST THOSE SPECIAL ASSESSMENTS AND WITH NOBODY HERE I WOULD RECOMMEND CONFIRMING THE ASSESSMENT LIST AND FILE IN THE OFFICES OF THE CITY. Sure the the lawsuit is more in regards to whether we had the right to do the project Because their contention is that we violated bidding laws of self-performing work that was valued at over two hundred and fifty thousand dollars and which the city is saying that we consider Mill and Overlay Projects maintenance, and we performed maintenance work, which has the rights of our city to do. They are saying it is not maintenance, it is an improvement, and therefore also subject to public bidding laws. There is no Nothing from the lawsuit contests the assessing of the project. The city is being sued basically stating that we don't have the right to do that work. We have to bid it out publicly and have a contractor like Northern Improvement be able to bid on it and do the work. So there is no contention from the lawsuit perspective on us levying these assessments versus these properties.

with regards to how the money was, or how the labor was allocated and not assigned to special assessment. Because according to the special assessment, you paid 50% with the general fund and 50% has been attached to special assessment. But it does not include any labor that was provided on that project. So if somebody's looking at this from an outside objective view as compared to other projects COMPLETELY DISREGARDING HOW THE PROJECT WAS DONE WITH THE CITY'S EMPLOYEES THIS IS NOT AN APPLE TO APPLE COMPARISON WITH OTHER PROJECTS BECAUSE WE'VE TAKEN OUT THE LABOR IF YOU WANTED AN APPLE TO APPLE COMPARISON YOU WOULD HAVE TO GO ASK NORTHERN IMPROVEMENTS TO TAKE OUT THEIR LABOR AND PAY FOR THAT OUT OF THE GENERAL FUND AND THEN TAKE EVERYTHING ELSE YEAH

And where I would say is when this was presented to the city commission to move forward with the project, those dollars have been presented to the city commission. What did our labor costs be? What was our equipment costs? Those things have been presented to the city commission. And from the beginning, the intent that was approved by the city commission was moving forward with the project where any expenses that are incurred outside of the labor and outside of the labor and equipment costs were going to be provided by the city and what was going to be bid out, meaning the asphalt, the concrete work, the milling machine, those items where the city had to write a check for to pay for, those were the things that were going to be paid 50% by the city. Yes, the city is actually paying for more than 50% of this project because we also provided labor and equipment for it. But when you're talking the total project cost, that cost is what were costs that were determined BY THAT. AND THE OTHER THING, THE OTHER PART OF THAT IS THERE STILL IS THE LEGAL, THE FINANCIAL FEES, THE THINGS OF THAT NATURE. I DON'T KNOW IF YOU HAVE THE RESOLUTION IN THE PACKET HERE THAT SHOWS THE BREAKDOWN OF THE DIFFERENT. YEAH, YOU CAN SEE ON HERE, YOU CAN SEE THERE'S THE With the construction costs, engineering, testing, the legal advertising, all of those different costs with it. So there were a lot of soft costs that were included in this. What you don't see in there, like you said, is the payroll for the employees that were constructing the project. So what I'm hearing is you would desire for us to come back and assess more to this district to include the costs of the labor and equipment as well? I'm concerned that this could open the door to an argument by other special assessments districts that this wasn't a full assessment.

is just as much as the next person, but we have to try to keep this as very possible, so I don't know.

I mean, if we can justify it and we say that this is reasonable, then I'm all behind it, but I fear that we're gonna go approve a special assessment district, for example, down in the Shadowwood area, and we're gonna get a lot of pushback from residents asking why

why theirs is so much more than what this one is.

And then we go in and number one, the city did it, which is great that, you know, outside of the legal issue, but it's great that we can save money for the residents and it's great that we can do it, but I struggled that, I struggled to Right.

And I would say that as it's being presented is some history on this project is back in 2023, we brought forth a design bid mill and overlay project where we were going to mill and overlay eight different neighborhoods. And the commission at that time, we were proposing with that an estimated assessment of $4,000 per parcel for those eight different neighborhoods. The commission at that time on a three to two vote with Commissioner Anderson, Mandy and Mayor Bernie Dardis all voted no on moving forward with the project. And they said that at that time that special assessments were too high, that $4,000 was too much, and staff was directed, we need to figure out a different way that we can do more and assess less to be less of a burden on the people within the improvement districts being created. Staff brought back, Public Works had already been doing several years of mill and overlays just out of their budget, going in and doing certain ways. 13th Avenue, if you remember, from Prairie Parkway to Cheyenne Street and several other neighborhoods had in the past been overlaid. Those actually did not get assessed. Those were just done by Public Works at the time. And those mill and overlay projects that were done prior to 2023, those were not being assessed at all. But what it did was it proved the capability of our public works staff to be able to do the work. So we came back and we proposed as a staff that we do have the ability to do this work, and if the direction of the commission is how can we do more or do the work and assess less, we said, well, one way that we could do it is we could do the projects and we would just assess the costs that were associated with the purchasing of materials and things like that, and the commission said, this is great, let's move forward with that, and that's how this project moved forward. Again, to your point, the next ones that are coming in, they're not moving forward under the same way that we did this project, and they're going to be higher assessments, because the answer to why is mine higher, it is because right now the city was sued by the twice now and those lawsuits are yet to be determined. They're still out there having yet to be determined. So right now there is no legal there's nothing that any court has told us about the project that we did that we can't assess it the way that we did. Now if we're told we have to cease and desist. If the courts come back and say, yeah, City of West Fargo, you were wrong in doing these mill and overlays in this method. They need to be designed, built. We'll move forward with that and we won't do it anymore. Now, if the courts come back and side with the City of West Fargo saying, yes, it is maintenance, City of West Fargo, you do have the ability to self-perform work because we believe it also is maintenance, then you might see more of these projects coming back where we do the work and assess it like that. But right now we have, in our CIP, we just have asphalt, I can't remember what I called the line item, but it's basically our asphalt pavement management program is being funded. The intent right now is until we get word from the court on the result of the lawsuits, we're not performing any more of these projects. AND WE'RE GOING TO WAIT AND SEE WHAT THE COURT TELLS US. BECAUSE IF WE'RE NOT LEGALLY SUPPOSED TO DO THEM, WE DON'T WANT TO DO THEM EITHER. THIS WAS ALL IN AN EFFORT TO SEE CAN WE DO THE WORK OURSELVES AND LESSEN THE BURDEN OF SPECIAL ASSESSMENTS FOR THE DISTRICT. AS I'VE SAID A COUPLE DIFFERENT TIMES, WHETHER IT'S THE COMMISSION OR ALSO AT THIS, IN REPLY TO THE JUNE 23rd SPECIAL ASSESSMENT COMMISSION MEETING, IF YOU RECALL, This was brought up. We had a brief discussion about it and this improvement district is Getting a benefit that maybe nobody else will see If we are cited against us because of the way that we move forward with with assessing it But what is in front of you is the means and methods that? Was moved forward through the Commission on the intent of how this would be assessed, but nobody is saying that THIS IS GOING TO BE COMPARABLE TO THE OTHER PROJECTS THAT WE'RE BRINGING FORTH. AND THE ANSWER TO ANYBODY IS WHY I'M PAYING MORE IS BECAUSE IT WOULD HAVE TO BE THAT THE CITY WAS TOLD LEGALLY WE WEREN'T ALLOWED TO DO THIS. WE TRIED. WE WANTED TO, BUT WE CAN'T. SO I GUESS I DON'T KNOW IF THAT SATISFIES YOUR QUESTION AT ALL, BUT THAT GIVES YOU A BRIEF HISTORY OF THE PROCESS.

IN THIS BEING AN UNKNOWN ANSWER,

Correct The only thing we could do is if we wanted to go in and pay it down or you know things like that you can a city could a city commission could come back and say I We found an extra million dollars in this account. We wanted to apply it towards something, and we want to pay this improvement district principal down, the bond down. If they had the ability to do that, it wouldn't probably happen because we're not going to find a million dollars somewhere in today's climate. So it can get paid down early, but there's no method to go back, reopen it, and increase special assessments from here.

I'LL MOVE TO APPROVE THE DISTRICT AS SHOWN, KNOWING THAT THE STATE COMMISSION HAS OVERCOME ALL OF THIS.

BUT... ALL IN FAVOR SAY AYE. AYE. OPPOSED?

Yeah.

It's also kind of similar to when Cheyenne was done. If you recall, there was a reallocation of multifamily, the percentages that we charge multifamily. So with that project, there was a new way of assessing multifamily that wasn't done previously. And we heard from the multifamily development community that This isn't fair. Prior to that, we had single family. You guys probably were on this special assessment commission, but we had people that were single family homes that were showing up and saying, why am I paying the same amount as that 32 plex over there? It shouldn't be per each. They should pay more because they've got 32 cars coming out of where we have one car coming out. So the pendulum has moved in a couple different directions over the past, and Anytime there's a change, there's people that were either charged more or less in the past and in future. Kayla, did you look up when we had that other Special Assessment Commission meeting tentatively planned for? For a placeholder? I can take a look in mine and see. Okay, so what I would say is we should bring 1345 back to this body again, and with that we would be able to answer the question we'll have Katie dig into, are we legally allowed to not assess a pond lot, and bring some answers back for that. So I don't know, I don't believe this is the body that actually, I think it would probably, wouldn't hurt for us to acknowledge that we would be meeting again on the 15th of September, but I think what we would do is when we bring, I'll check with Katie or Dustin to see how the procedure goes with us having that next meeting, but I would say just note for the record at this point in time, that we will be meeting back here at 5.30 on September 15th. I believe you can. I believe if you made a motion to approve this pending city attorney confirming that the methods that were used to assess this project are legal per century code, then you would recommend approval. If we find from legal that it is, that what we've done is not following sensory code, then we need to come back and it's not approved. So I think that would be a method that you could do. Yeah. YEAH, SO... AND THEN YOU'D HAVE TO SECOND THAT.

NOW I'LL MOVE TO APPROVE 1345 PENDING REVIEW BY THE CITY ATTORNEY OR CITY LEGAL STAFF CONFIRMING THAT IT IS

That would work All right, I will follow up with you and let you know what we find out from Katie Yeah No, we were. We presented a lot of them that will be assessed next year to just make you aware of them and go through the methodology that we planned on assessing them just to get your buy in. It was more for if you recall those ones that were presented were for informational purposes only. Only these three were for approval to move forth to this meeting, so these are the only three that we will be doing so. 2027, this would be the last meeting of this body in 2026. From here, what we'll do is we will confirm that from 1345 that we were legal to assess the way that we have it, and then we would move forth to the city commission for certification. Yep, absolutely. Let the record show all are present. Thank you. Absolutely.