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Helmut Schmidt, Published March 07 2013

Bill would force more public votes on building projects

WEST FARGO – A North Dakota House bill requiring votes on projects financed by building authority bonds could, if it becomes law, plug up plans to replace the almost 60-year-old Veterans Memorial Pool here, an official said.

The proposal, House Bill 1286, is designed to muzzle the unrestricted use of building authorities by local governments, said primary author Rep. Jim Kasper, R-Fargo.

Kasper has introduced the bill in a couple of forms over the years as a reaction to the Fargo School District’s use of its building authority to build or renovate schools without asking voters to approve the plans.

Under state law, most building projects in which local governments issue the financing bonds directly require 60 percent approval in a public vote. A building authority is a nonprofit that can issue bonds local governments then pay off, a method of financing public building projects that does not require ballot approval.

Most recently, the construction of Fargo Davies High School – even though it is financed through the district’s building fund, not its building authority – got the goat of Kasper and others.

Kasper’s idea has found traction this year, sailing through the House to now be taken up by the Senate.

Kasper said while local governments can still use their building authorities for the tax benefits they provide, “you can no longer circumvent a vote of the people.”

Requiring a vote could delay West Fargo’s outdoor pool project a year – maybe two – as officials figure out when to hold the vote and inform the public, said Justin Germundson, West Fargo Park District business manager.

“It’s horrific timing,” Germundson said. “It might really slow down how fast this (pool) will get done.”

Broc Lietz, business manager for the Fargo School District, said the school board voted in 2010 to change how the building authority was used, making it district policy to seek voter approval – a simple 50 percent majority – for projects that use the building authority and are paid from the general fund.

Lietz said there have been four projects or packages of projects financed with building authority bonding in recent years:

• $23 million to expand and renovate South High School and build Kennedy Elementary School.

• $19.6 million for renovations and new classrooms at Ben Franklin Middle School, North High School and Clara Barton Elementary School.

• $3.6 million of the cost to build Jefferson Elementary.

• $3.4 million to build the outdoor water park at Davies High School, which is being paid by the Fargo Park District.

Other than HB 1286’s requirement for a 60 percent supermajority vote, the bill would have no effect on the operations of Fargo Public Schools, Lietz said. He said the district will not lobby against the proposal.

The West Fargo School District has regularly gone to the public for its major school construction and renovation projects, but it does oppose HB 1286.

The West Fargo School Board a few years ago used its building authority to renovate the old middle school and turn it into the Lodoen Community Center, Business Manager Mark Lemer said.

Lemer said the school district likes the financial flexibility its building authority offers.

Kent Costin, the city of Fargo’s finance director, said Fargo also opposes HB 1286.

“Simply because it restricts the ability and efficiency of getting bonds to market in certain instances,” Costin said.

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Readers can reach Forum reporter Helmut Schmidt at (701) 241-5583