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FLOOD DIVERSION BOARD OF AUTHORITY Thursday, June 13, 2013 3:30 PM Fargo City Commission Room Fargo City Hall 200 3rd Street North 1. Call to order 2. Approve minutes from previous meeting Item 2. Action 3. Approve order of agenda Action 4. Program Management Consultant (PMC) update Information/action a. Monthly report (Tom O’Hara) b. Corps of Engineers monthly update (Aaron Snyder) c. Status of Authority Work Directives and Task Orders (Bruce Spiller) d. FY14 program decisions timeline (Tom O’Hara) Item 4d. 5. Washington D.C. trip report (Darrell Vanyo/Dennis Walaker) Information 6. Committee updates Information/action a. Retention update from Red River Basin Commission (Lance Yohe) b. Land Management Committee (Dennis Walaker) • Committee report • Oxbow levee Memorandum of Understanding Item 6b. c. Public Outreach Committee (Rodger Olson) • Committee report d. Finance Committee (Kent Costin) • Committee report • FY13 Authority $29 million budget update • CH2M Hill task order extension Item 6d. 7. Voucher approval Item 7. Action 8. Other Business 9. Next Meeting – July 11, 2013 10. Adjournment cc: Local Media Flood Diversion Board of Authority—May 9, 2013 1 FLOOD DIVERSION BOARD OF AUTHORITY MAY 9, 2013—3:30 PM 1. MEETING TO ORDER A meeting of the Flood Diversion Board of Authority was held Thursday, May 9, 2013, at 3:30 PM in the Fargo City Commission Room with the following members present: Cass County Commissioner Darrell Vanyo; Cass County Commissioner Ken Pawluk; West Fargo City Commissioner Mike Thorstad; Fargo Mayor Dennis Walaker; Fargo City Commissioner Tim Mahoney; Fargo City Commissioner Brad Wimmer; Cass County Joint Water Resource District Manager Mark Brodshaug; Clay County Commissioner Kevin Campbell; and Moorhead City Council Member Brenda Elmer. Also present was ex-officio member Gerald Van Amburg, Buffalo-Red River Watershed District. Staff members and others present: Cass County Administrator Keith Berndt; Moorhead City Manager Mike Redlinger; Clay County Administrator Brian Berg; Fargo City Director of Engineering Mark Bittner; Fargo City Engineer April Walker; Moorhead City Engineer Bob Zimmerman; Cass County Engineer Jason Benson; Tom O’Hara, Program Manager, CH2MHill; Bruce Spiller, CH2MHill; Aaron Snyder, Branch Chief for Project Management & Development, Corps of Engineers; Brett Coleman, Project Manager, Corps of Engineers; and Terry Williams, Project Manager, Corps of Engineers. 2. MINUTES APPROVED MOTION, passed Mr. Campbell moved and Mr. Walaker seconded to approve minutes from the March 14, 2013, meeting as written. Motion carried. 3. AGENDA ORDER MOTION, passed Mr. Walaker moved and Mr. Wimmer seconded to approve the order of the agenda as presented. Motion carried. 4. SUMMARY OF 2013 FLOOD FIGHT Rocky Schneider, diversion consultant, said 8,346 people volunteered to help with the flood efforts, logging 43,239 hours of time. City and county staff reported on the 2013 flood efforts and associated costs. Mr. Berndt said Cass County spent around $900,000; Ms. Walker said Fargo has spent $2.5 million so far and removal of clay levees and sandbags will be completed in the next few days; Mr. Zimmerman did not have a cost estimate for Moorhead, but said four properties were sandbagged, and no clay levees were needed; Mr. Berg said Clay County spent $50,000. 5. NORTH DAKOTA LEGISLATIVE SESSION UPDATE Mr. Schneider provided an update on HB1020, which was signed into law on May 2nd. The legislation includes State Water Commission funding for projects throughout the entire state, including $100 million for Fargo flood control projects for the biennium beginning July 1, 2013, through June 30, 2015. Item 2. Flood Diversion Board of Authority—May 9, 2013 2 The law also outlines four requirements that must be met before funds may be spent on the diversion project: federal authorization; execution of a project partnership agreement; federal appropriation for project construction; and approval by the State Water Commission for a diversion budget. Mr. Mahoney thanked Mr. Vanyo for his efforts during the legislative session. Mr. Vanyo thanked staff, business leaders, agencies, legislators, and elected officials for their assistance. 6. PROGRAM MANAGEMENT FIRM UPDATE Program manager consultant monthly report Tom O’Hara provided an update on activities over the last month including Oxbow/Hickson/Bakke levee alignment outreach; on-going technical and design activities; participation in the Minnesota EIS public scoping meeting held on May 8th; and work with hardship acquisitions on a third property, and negotiations on a fourth property. Corps of Engineers status update Brett Coleman said Corps of Engineers staff continues to work on the National Environmental Policy Act (NEPA) process to address project modifications; provided support at landowner meetings on April 10-12; and worked on an amendment to the design agreement, originally approved on September 12, 2011, to allow non-federal sponsors to accelerate funds to the Corps, and to add the Diversion Authority as a nonfederal sponsor. Mr. Coleman discussed the NEPA timeline and said today, the board will submit its preference regarding either buyouts or construction of a ring levee in the Oxbow/Hickson/Bakke area. The Environmental Assessment (EA) document will be released in June with a 30-day comment period. Mr. Coleman discussed federal funding for the project, and said $5 million is included in the President’s budget for 2014. He said the Water Resources Development Act (WRDA) is on the Senate floor this week, and includes 27 projects that meet the criteria for funding. He said the Fargo-Moorhead Metro diversion is one of the top four projects and includes $810 million allocated for the project. Task Orders and Authority Work Directives Bruce Spiller discussed Task Orders (TO) and Authority Work Directives (AWD) for consideration by the board. MOTION, passed Mr. Mahoney moved and Ms. Elmer seconded to approve Task Order No. 9, Amendment 5 for Hydrology and Hydraulic Modeling with HMG in the amount of $100,000. Motion carried. MOTION, passed Mr. Mahoney moved and Mr. Thorstad seconded to approve Task Order No. 1 for Cultural Resources Investigations with URS in the amount of $495,000. Motion carried. Flood Diversion Board of Authority—May 9, 2013 3 MOTION, passed Mr. Mahoney moved and Mr. Campbell seconded to approve AWD-00029 for Phasing Plan Interim Modeling with HMG in the amount of $90,000. Motion carried. MOTION, passed Mr. Campbell moved and Mr. Mahoney seconded to approve AWD-00030 for Minnesota EIS Scoping Document Comment Support with HMG in the amount of $15,000. Motion carried. MOTION, passed Mr. Mahoney moved and Mr. Wimmer seconded to approve AWD-00031 for In-Town Levee Utility Relocations with HMG in the amount of $50,000. Motion carried. MOTION, passed Mr. Campbell moved and Mr. Mahoney seconded to approve a reimbursement to the City of Fargo in the amount of $46,920 for the cost to install stage gages to collect river level data. Motion carried. Mr. Spiller also reviewed the status of existing Task Orders and Authority Work Directives with the board. 7. UPDATES FROM COMMITTEES Retention efforts update from Red River Basin Commission Lance Yohe was present to provide an update from the Red River Basin Commission on the retention study. He discussed the Halstad Upstream Retention (HUR) project, and said the snow melt progression grid, sub-watershed retention/detention site identification, and synthetic model runoff variations have been completed. Land Management Committee Mr. Walaker said the Land Management Committee met earlier this afternoon, and discussed the following topics: Oxbow/Hickson/Bakke area levee alignment Mr. Berndt discussed the Oxbow/Hickson/Bakke area levee alignment, which will provide 500-year protection to 196 properties at a cost of $65 million while maintaining the tax base of the Kindred Public School District. Also, this will provide residents with some certainty about their homes sooner than the other alignment options, and will protect the church, community center, and other businesses in Oxbow and Hickson. Mr. Berndt said other options include an Oxbow only levee that would protect 106 properties at a cost of $90 million, and an Oxbow/Hickson levee that would protect 139 properties at a cost of $85 million. A buyout of all properties would cost $74 million. Mr. Vanyo said the board is faced with making a decision to protect the entire area or destroy part or all of the area through buyouts. The full alignment option keeps residents in the Kindred School District, and the state of limbo will be remedied because residents will know what to expect in the future. The ring dike is an important part of the process to protect the communities and put the needs of the residents first. Flood Diversion Board of Authority—May 9, 2013 4 MOTION, passed Mr. Pawluk moved and Mr. Thorstad seconded to select the full Oxbow/Hickson/Bakke alignment as the recommended alignment for the Oxbow Area Levee with the recommendation to be forwarded to the Corps of Engineers for inclusion in the upcoming Environmental Assessment (EA) documentation. Discussion: Mr. Mahoney asked if the concerns of the Hickson and Bakke residents will be addressed. Mr. Coleman said there will be a comment period after the draft EA is released. The motion today is to allow this to be submitted as the preference for the EA document. Mr. Campbell supports the motion and asks that the same consideration is given to Comstock and Wolverton on the Minnesota side when the levee concept moves forward in those areas. On roll call vote, the motion carried unanimously. Purchase agreement for hardship property Eric Dodds from AE2S said an agreement has been reached for a third hardship property in Oxbow. The Finance Committee and Land Management Committee both approved the purchase. MOTION, passed Mr. Walaker moved and Mr. Mahoney seconded to approve the agreement to purchase a residential property determined to be in compliance with the conditions of the Hardship Policy adopted by the Hardship Review Committee for the purchase contract of not less than $350,000 based on the “completed” appraisal, plus $6,000 to compensate for relocation expenses for a total not less than $356,000; and authorize the Fargo Finance Director or Cass County Auditor to execute the closing papers. Discussion: Mr. Pawluk asked why the Flood Diversion Board paid for a third appraisal since there were issues with the individual who completed the second appraisal. Mr. Dodds said the appraiser did not follow the yellow book standards required by the Corps, and this type of situation will not be an issue again. Mr. Dodds said the process to acquire this property has been long negotiated, and feels it is in the best interest of the board to move forward with the purchase. On roll call vote, the motion carried unanimously. Public Outreach Committee Mr. Campbell said the Public Outreach Committee met on May 8th, and discussed the inclusion of additional lots within the ring levee to offer to impacted residents as a relocation option. Mr. Dodds said the committee has been busy with outreach activities. He said 57 individual landowner meetings were held last month with residents in the staging area. The intention is to meet with Minnesota residents this summer regarding the Comstock area ring levee. Also, a draft outreach plan has been developed for the biennium to help address how information will be distributed to the public. Some feedback has been received on the plan, which the committee has incorporated into the document. Flood Diversion Board of Authority—May 9, 2013 5 Finance Committee Michael Montplaisir, Cass County Auditor, said the Finance Committee met on May 8th. He said $19.5 million has been spent since 2011. The committee reviewed the FY2013 program budget status, and $13.7 million of the $29 million is remaining for the year. The committee also discussed work projects over the next two years and possible financing options. The Diversion Project Assessment Committee (DPAC) continues to meet to study the special assessment option to fund local costs for North Dakota with the goal to use the sales tax to pay for any assessments. Corps of Engineers supplemental funding Mr. O’Hara said technical reviews for the expanded in-town levees and Oxbow/Hickson/Bakke levee designs were not included in the 2013 work plan of the St. Paul District Army Corps of Engineers and were not funded for this fiscal year. The reviews will cost approximately $350,000 and are critical to retain the components within the federal program. The cost was included in the $29 million budget of the Diversion Authority for 2013. MOTION, passed Mr. Mahoney moved and Mr. Thorstad seconded to approve $350,000 in funding to the St. Paul District Army Corps of Engineers for technical reviews required to complete the in-town levees and the Oxbow/Hickson/Bakke levee designs. On roll call vote, the motion carried unanimously. 8. VOUCHERS, Approved MOTION, passed Mr. Mahoney moved and Mr. Pawluk seconded to approve the vouchers for March and April, 2013. On roll call vote, the motion carried unanimously. 9. NEXT MEETING DATE The next meeting will be held on Thursday, June 13, 2013, at 3:30 PM. 10. ADJOURNMENT MOTION, passed On motion by Mr. Mahoney, seconded by Mr. Walaker, and all voting in favor, the meeting was adjourned at 5:04 PM. Minutes prepared by Heather Worden, Cass County Administrative Assistant Item 4d. Item 6b. 6-10-2013 version MEMORANDUM OF UNDERSTANDING CITY OF OXBOW, NORTH DAKOTA AND METRO FLOOD DIVERSION BOARD OF AUTHORITY This Memorandum of Understanding is made effective as of the _____ day of ____________________, 2013, by and between the METRO FLOOD DIVERSION BOARD OF AUTHORITY, a joint powers entity established by the 2011 limited joint powers agreement between Clay County, Minnesota, Moorhead, Minnesota, Cass County, North Dakota, Fargo, North Dakota, Cass County Joint Water Resource District and the Buffalo-Red River Watershed District [hereinafter referred to as the “Diversion Authority”], the CITY OF OXBOW, a North Dakota municipal corporation [hereinafter referred to as the “City” or the “City of Oxbow”]. RECITALS: WHEREAS, property within the City of Oxbow and other property has been identified as being impacted by the periodic staging of water upstream of the physical structure of the project known as the Fargo-Moorhead Metropolitan Area Flood Risk Management Project [hereinafter referred to as the “Metro Flood Project”] to the point where it has been determined that mitigation of the impact should be addressed; and WHEREAS, the U.S. Army Corps of Engineers [hereinafter the “Corps”], which is the federal sponsor of the Metro Flood Project, is developing an alternative proposal by which a levee [hereinafter referred to as the “O-H-B Levee”] would be constructed to reduce the risk of flooding for many of the parcels located within the City of Oxbow and for the community of Hickson and the Bakke Subdivision; and WHEREAS, the current preliminary routing of the proposed O-H-B Levee would require that approximately 42 homes lying within the City of Oxbow be acquired and either moved or destroyed and would require the acquisition of other unimproved lands to accommodate construction of the levee; and WHEREAS, the City of Oxbow has requested that, as part of the project, the land within the city that is being acquired and used for construction of the levee be replaced by other land within the area protected by the levee that can be subdivided into residential, and other, lots 2 (referred to herein as “Replacement Lots”) so that loss of population and tax base to the city may be minimized; and, WHEREAS, the City of Oxbow has requested that the proposed levee project include installation of public infrastructure (i.e. sanitary sewer, storm sewer, water, streets, curb and gutter and street lighting) at a level equivalent to existing development within the City of Oxbow to service the Replacement Lots the cost of such infrastructure to be borne by the Diversion Authority, that the Replacement Lots be of equivalent size as the lots being replaced, that three additional lots be provided for replacement of equipment and amenities to replace the Oxbow City Park, that the public infrastructure installed also include drainage/retention and pump stations appropriate for such Replacement Lots and that all of this be completed within thirty-six (36) months from the date the Corps approves the O-H-B Levee project; and WHEREAS, the Diversion Authority has requested that in addition to the Replacement Lots to be located within the area protected by the O-H-B Levee the City of Oxbow accommodate at least 38 additional lots that would be available to property owners in the current upstream staging area whose properties may need to be purchased as a requirement for the Diversion Project and who may wish to relocate within the area protected by the O-H-B Levee (for purposes of this MOU, said additional lots will be referred to as “Staging-area Replacement Lots”); and, WHEREAS, construction of the proposed levee also will cross through the existing golf course of the Oxbow Golf and Country Club (a North Dakota nonprofit corporation) which would: 1. require the destruction of golf holes; 2. require the destruction or removal of the clubhouse and related facilities; 3. leave certain holes (presumably the existing holes 1 through 6 and 18) on the existing golf course unprotected by the O-H-B Levee; 4. cause other remaining golf holes to need some level of modification as a result of the O-H-B Levee project; and, 5. to the extent said “unprotected” golf course land is not needed for the location or footprint of the O-H-B Levee that the Diversion Authority allow the City of Oxbow to purchase or lease said surplus land for a purpose to be determined later; 6. that the replacement of the club house facility including the practice area, pool, and parking lots be based on the current square footage at a one to one ratio; 3 and the City of Oxbow has requested that the Diversion Authority supply the funds for such requirements and that such arrangements be made so that the same may be completed within 36 months from the date the Corps approves the project; and WHEREAS, the Corps, which is the federal sponsor of the Metro Flood Project, has indicated that, subject to the Corps’ formal approval process, it will study and approve the O-H-B Levee alternative as part of the Metro Flood Project and, if it is approved, will participate in the design of the O-H-B Levee but the Corps has asked that the non-federal sponsors to approve the O-H-B Levee alternative and the non-federal sponsors (speaking through the Diversion Authority) have, in turn, asked the Oxbow City Council to approve the same; and WHEREAS, the City of Oxbow has requested that, as part of the O-H-B Levee project, the construction cost associated with the appointment of an independent project manager or consulting firm to represent the City of Oxbow until the completion of the said project will be borne in full by the Diversion Authority; and, WHEREAS, the City of Oxbow is willing to take responsibility for purchase and development of the replacement lands, annexation of such lands, platting and zoning thereof, and sale of such land; and, WHEREAS, the Diversion Authority and the City of Oxbow have agreed to a mutual understanding as to the proposed O-B-H Levee, which they wish to put into a written memorandum; NOW, THEREFORE, IT IS AGREED: 1.1. City of Oxbow—approval of O-H-B Levee alternative. Subject to the terms hereof, the City Council of the City of Oxbow agrees to and supports the construction of a flood protection levee as is being proposed by the U.S. Army Corps of Engineers. The parties recognize that the current proposal being considered is a preliminary route and design and that the Corps, with input from non-federal sponsors and others, will approve the route and design; but the parties agree to coordinate with each other to identify a suitable route and design and, in turn, the Diversion Authority will work with the Corps regarding obtaining the Corps’ approval. 1.2 Diversion Authority – Obligations Binding on Successors. The representations, covenants, obligations and duties of the Diversion Authority contained herein shall not only be binding upon the Diversion Authority but also shall be binding upon its successors and assigns as well as the various entities which have entered into the Metro Flood Diversion Limited Joint Powers 4 Agreement and the undersigned member-entities of the Metro Flood Diversion Authority Limited Joint Powers Agreement do hereby agree to the terms hereof . 2. DIVERSION AUTHORITY RESPONSIBILITIES. The Diversion Authority, in cooperation with the Corps agrees: 2.1. Acquisition of Property. The land, homes, buildings and other improvements needed for the levee to be built will be identified along with any needed permanent and temporary easements for construction. The Corps, the Diversion Authority, or both, will be responsible for the acquisition of such property in accordance with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 and N.D.C.C. Chapter 54-01.1 and any other applicable law, rule or regulation. All costs for acquisition, relocation and any other expenses related thereto shall be borne by parties other than the City of Oxbow. The Diversion Authority agrees to indemnify and hold harmless the City of Oxbow for any costs, expenses, fees or charges of any kind related thereto. The Diversion Authority may delegate the task of acquisition to one or more of its member entities such as the County of Cass or the Cass County Joint Water Resource District. 2.2. The Diversion Authority shall be responsible for the actual design and construction of the O-H-B Levee, with involvement and assistance by the Corps as may be determined appropriate by the Corps with the intention that construction be complete within 36 months from the date of the approval of such construction by the Corps. At a minimum, the O-H-B levee shall include necessary design features to provide adequate flood protection, interior drainage protection, external drainage protection, external drainage and shall include any necessary modifications to utility services. 2.3 Funding for Acquisition of Replacement Lots. The Diversion Authority shall provide funds to the City of Oxbow for acquisition of real property necessary for development of Replacement Lots, Staging-area Replacement Lots, public infrastructure and public amenities. The Diversion Authority will also either purchase directly or provide funds to the City of Oxbow for the purchase of real property necessary or convenient for reconstruction and/or relocation of the Oxbow Golf & Country Club. Said funds will be provided in the form of a loan, secured by the replacement land being purchased by the City of Oxbow, with said loan to be repaid on a pro-rata basis as said replacement land is, in turn, platted and sold off as lots or, as to a portion of such replacement land, portions are sold to the Diversion Authority to be utilized for the O-HB Levee or related facilities or to the Oxbow Golf & Country Club for use by the club for replacement golf holes, a replacement clubhouse and parking lot facility or related facilities of the club. Further, it is recognized that certain portions or parcels of land 5 purchased by the City of Oxbow will, in turn, be transferred and conveyed to the Diversion Authority for use for the O-H-B Levee, itself, or for other such facilities or amenities such as pumping stations, retention and detention ponds, et cetera, and to that extent the fund provided by the Diversion Authority will not be a loan to the City of Oxbow but rather will be an advance of funds to purchase land ultimately to be placed into title in the Diversion Authority. The loan will be repaid on an annual basis based on the number of replacement lots sold each year; with the remaining amount being paid in full, with accrued interest, by the City of Oxbow by the end of the term of the loan. Thus, the loan transaction and the process for repayment of such loan, shall occur as follows: 2.3.1 The City of Oxbow will enter into one or more purchase agreements for the purchase of said replacement real property. The City of Oxbow may establish one or more separate entities, such as a development corporation, to function as the entity that will buy, hold, maintain and sell said replacement real property, it being the intent that said separate entity would be wholly owned by the City of Oxbow. The said purchase agreement or agreements are intended to contain a contingency in which the obligation of the City of Oxbow (or its development corporation) to purchase the said real property is contingent upon approval and execution of this MOU and is contingent upon the approval and authorization of the construction of the O-H-B Levy by the Corps. To the extent that the City of Oxbow, or its development corporation, enter into any land purchase agreements or option agreements for such purpose, the Diversion Authority will advance-fund such agreements. It is the intent of the parties is to maximize the ability of the Diversion Authority to adhere to the requirements of federal and state relocation law. 2.3.2 Prior to execution of the said purchase agreement or agreements, the City of Oxbow will obtain approval of the terms, including the purchase price, by the Diversion Authority. 2.3.3 At the time all contingencies are removed and one or more purchase transactions are ready to be closed, the Diversion Authority will provide the funds to the City of Oxbow or its development corporation or other similar entity for the purchase of said real property. Said funds will be provided in the form of a purchase money loan provided by the Diversion Authority or by one of its member entities, said loan to be secured by a purchase money mortgage and a fixture financing statement in forms customarily utilized for such transactions containing the following terms: 6 2.3.3.1. The loan shall be for a term of fifteen years and shall be repaid at an interest rate to be negotiated. The loan shall be due in on an annual basis based on the number of replacement lots sold each year; with the remaining amount being paid in full at the end of the said fifteen (15) years, along with any interest that has accrued. It is the intention of the parties that the loan and mortgage is to be a mechanism for allowing the Diversion Authority, or one of its member entities, to advance funds for the purchase of the relocation property with said advances to be repaid to the lender as the lots are acquired from the City of Oxbow by buyers of said lots. Also, with respect to any property that has been acquired and is located within the area protected by the O-H-B Levee that remains subject to the mortgage granted to the Diversion Authority, it is expected and intended that before the mortgage comes due, in 15 years, that any surplus land may be sold to a private developer so that the remaining remaining balance of the loan paid from such proceeds or the City of Oxbow (or its development corporation) may re-finance the loan with a private lender and remain in ownership of said land beyond said 15-year term. 2.3.3.2. As lots are sold by the City of Oxbow, or its development corporation, and as the balance of the loan is reduced by payments made to the holder of the mortgage, the holder shall release such sold lots or parcels from the mortgage and fixture financing statement. In the event, however, that the mortgage and financing statement have not been fully satisfied and the loan fully repaid within fifteen (15) years from the date of such loan, then, the remaining unsold land must be sold to a third party for at least the remaining balance due on the loan or, in the alternative, the City of Oxbow shall pay off the remaining balance due on the loan along with any accrued interest. 2.3.4 It is anticipated that the City of Oxbow and its development corporation will take such steps to prepare said replacement real property for development, including the zoning and platting of said property. City of Oxbow will annex any lands into the city prior to development. Sewer, water, streets and other public infrastructure, as described in this agreement, will be designed and prepared for installation. Replacement lots and Staging-area Replacement Lots will be established and made available for sale by the City of Oxbow, or its