FARGO — An ongoing feud between the Fargo Municipal Airport Authority and the Fargo City Commission came to a head Tuesday, Oct. 22, when the airport authority rejected a proposed memorandum of understanding with the city and instead voted to contract with a private company for a number of services it has been paying the city for, including human resources and payroll services.

In the process, a city commissioner serving as the commission's liaison to the authority abruptly walked out of the meeting, and Fargo Mayor Tim Mahoney subsequently issued a written statement saying that it appeared to him the airport authority was ready to end a 50-year partnership with the city.

"I am profoundly disappointed with today’s votes by the MAA," Mahoney said in his letter.

"Instead of focusing on the vital issues facing Hector International Airport and working together to build a thriving and modern airport for our metro community, the MAA is clearly disinterested in continuing our 50-year partnership," Mahoney said, adding he would be meeting with fellow city commissioners soon "to discuss today’s disappointing votes of the MAA and chart our next step forward in this process.

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"Today’s actions truly defy logic, and I invite a community conversation on this topic," Mahoney added.

Prior to rejecting the city commission's proposed memo of understanding that aimed to clearly define the current relationship between the city and the airport authority, the authority's Chairman Mike Haugen spoke at length on the history between the two entities, which dates back to 1969, when an agreement was signed between the city and airport authority regarding how the airport would operate.

The Fargo Municipal Airport Authority discusses a proposed memorandum of understanding with the city of Fargo during a meeting of the authority in October. Dave Olson / The Forum
The Fargo Municipal Airport Authority discusses a proposed memorandum of understanding with the city of Fargo during a meeting of the authority in October. Dave Olson / The Forum

The two entities began talking about possibly updating the language of the agreement about two years ago and since then one of the sticking points has been a disagreement about whether airport workers are employees of the airport authority or the city.

In proposing a new memo of understanding between the city and airport authority, the city made it clear it believes the workers are city employees, while the airport authority maintains that airport workers are employees of the airport authority.

In the midst of that discussion, the airport authority began reviewing how much it pays the city for a number of vendor services and exploring whether it should seek alternative providers in the private sector.

When the original agreement between the entities began in 1969, the airport authority paid about $30,000 for the services it receives from the city. In the mid-1980s, that charge was increased to about $50,000.

In 2016, the city proposed boosting what it charges the airport authority to something above $90,000, with the proposed increase subject to approval by the FAA.

The FAA subsequently gave its OK and the city's bill for annual services is now about $107,000.

Changing course

However, at Tuesday's meeting the airport authority board unanimously voted to turn down the city's proposed memorandum of understanding and instead agreed to hire a private company, PRO Resources, to provide services like human resources, payroll and benefits management.

Now, PRO Resources is to charge the airport authority 2.69% of the gross payroll, which comes to just under $50,000.

Airport authority members said they are also looking to go elsewhere for banking services and health insurance, but how those areas will be handled is not precisely clear.

During Tuesday's meeting, several airport authority members voiced concern about rhetoric they were hearing from city officials.

Erik Lind said he viewed the city's position that the airport authority could not pick and choose which services it wanted to receive from the city but would have to accept them all as a single package as a "hostile" form of negotiating.

Fellow airport authority member Tammy Linn said it was the authority's impression that the city commission was ready to simply fire the entire airport authority board if an agreement could not be reached.

During the meeting, Haugen had a back-and-forth exchange with City Commissioner Dave Piepkorn, the commission's liaison on the airport authority.

Haugen had asserted that flights into and out of the airport could halt overnight if the authority is disbanded and loses its certificate of operation from the Federal Aviation Administration.

"That's a false statement," said Piepkorn, who insisted that Haugen retract his claim.

"I will not retract that," Haugen said.

Later, after the airport authority voted to reject the city's proposed memo of understanding, Haugen asked Piepkorn if he would spell out what it was the commission felt needed fixing regarding its relationship with the airport authority.

"Nope. I'm done. Thank you for having me," Piepkorn said, before walking out of the meeting.

City Attorney Erik Johnson told the airport authority that there was no chance of the airport being shut down, even if there was a change in the airport authority board, because any change, if it happened, would come in an orderly fashion that would preserve the airport's certificate of operation.

Airport Executive Director Shawn Dobberstein said one health insurance option the airport is considering for workers, of which there are about 26 full-time employees, is an employee health insurance plan the North Dakota Insurance Reserve Fund is looking to possibly create in the near future.

In the meantime, Dobberstein said it is possible the airport will have to temporarily purchase an alternative insurance plan, most likely at the "silver" level of coverage.

He acknowledged that could be an expensive option for a time, but he stressed employees would pay the same for their coverage as they do now, with the airport authority picking up any additional cost.

The best option, if it is possible, would be to negotiate with the city for workers to remain on the city's health plan until alternative long-term coverage can be found, Dobberstein said.

In his letter Tuesday, Mahoney maintained that airport workers are city employees.

"I am a strong advocate for the rights of these people," Mahoney said, adding that employees currently serving at the airport would "immediately lose their civil service protections under the MAA’s plan, along with the many services the city offers them as part of its workforce family.

"Separating from the city will substantially increase healthcare, operating and administrative costs for the airport, which will undoubtedly be passed along to the people flying out of Hector International," Mahoney added.