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Kyle Potter, Published March 08 2014

Oxbow leaders scrap plan to pay themselves

OXBOW, N.D. – City officials here are backing away from a plan that would have paid a local seven-member board up to $6,500 a month to oversee the construction of a ring dike around the area.

Oxbow’s City Council last week approved a plan for the town’s recently formed Job Development Authority to handle project management for the ring levee around Oxbow, Hickson and Bakke – a $65 million project meant to mitigate the effects of a proposed $1.8 billion flood diversion channel around the metro.

But after backlash and some squeamish reaction from diversion officials, Mayor Jim Nyhof – who also serves as chair of the development authority – said he will officially scrap the idea at its meeting next Tuesday and instead ask the Diversion Authority to help hire an independent project manager.

“We didn’t get the reception we were hoping for,” said Nyhof, who framed the idea as a cost-saving measure.

The development authority would have worked on a contract for $800,000 total, as compared to the bids from firms at $1.2 million or more.

“It probably doesn’t look right,” he conceded of the development authority’s plan, which he declared dead.

The project manager dustup stems from an agreement, finalized in August, between the city and the Diversion Authority for the construction of the ring dike around Oxbow, Hickson and Bakke. Part of their memorandum of understanding stated the Diversion Authority will cover 10 percent of administrative costs and 15 percent of engineering costs.

In an interview Friday, Nyhof said it didn’t make sense to pay out more than $1 million to a project manager for a project that “doesn’t need a full developer’s attention.” The Oxbow City Council officially formed its Job Development Authority in December, and began discussing a project manager soon after, meeting minutes show.

In a meeting with The Forum’s editorial board last week, local diversion leaders said they were surprised to learn the members of Oxbow’s Job Development Authority had decided to award the contract to themselves.

Several diversion officials openly wondered whether Nyhof and the six other members on Oxbow’s Job Development Authority had the expertise to handle project management for the ring dike. Others said they worried about the appearance of city officials funneling money, which could be leveraged by diversion opponents.

“They’re being a little tone deaf to what’s going on with the politics here,” said Fargo City Administrator Pat Zavoral.

In an interview Friday, Diversion Authority Chairman Darrell Vanyo called Nyhof’s decision to back away from that plan “a wise move.”

He said he didn’t urge Nyhof to scrap the proposal but called the mayor to let him know the idea of paying local board members to oversee the project didn’t feel right.

There was also a question of legality. Though state law allows development authority members to be reimbursed for work-related expenses, it specifically bans direct compensation for that work.

Nyhof said several lawyers reviewed and signed off on the development authority’s proposal.

Nathan Berseth, a spokesman for a group of diversion opponents called the MnDak Upstream Coalition, said it was clear Nyhof and the other authority members wanted an extra paycheck.

“I think that everybody involved realized it was a horrible decision,” Berseth said of the backlash.

Vanyo said he believes there is a way to reduce the costs of project management for the ring dike in Oxbow “without making it look like somebody’s benefitting from it.”

Readers can reach Forum reporter

Kyle Potter at (701) 241-5502