FARGO — The Fargo Municipal Airport Authority and the city of Fargo announced Tuesday, Jan. 14, approval of a new memorandum of understanding governing how the airport and city operate together.

The two government entities have worked cooperatively since the airport authority was established in 1969, but the new MOU serves as an amendment of the 50-year-old agreement between the parties and settles several issues that have been a source of contention in recent years, including the question of whether airport workers are employees of the airport authority or the city.

Under the new agreement, airport workers will be city employees for the purposes of payroll, pension, health insurance and other benefits.

However, airport workers will be subject to a command and reporting structure that recognizes the airport authority as their employer. That includes the job of executive director, currently held by Shawn Dobberstein, and workers under him.

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The new agreement keeps in place services the city has provided the airport authority, including financial and payroll assistance, employment benefits, administrative and financial services, as well as information technology and miscellaneous other support.

The agreement notes the two sides have a formula for future calculations of what the authority will pay the city for services it provides. It also acknowledges that better communication must occur between the authority and the city and identifies a number of steps aimed at establishing that.

The Fargo City Commission approved the new agreement at a meeting Monday night, and the airport authority voted 3-2 Tuesday morning to accept the agreement as well, but with a counteroffer involving one particular section of the document.

The City Commission held a meeting after the airport authority meeting Tuesday, and the announcement regarding the agreement came shortly afterward.

Fargo City Commissioner Tony Grindberg stressed Monday night that the pending agreement would not dissolve the airport authority as some residents, airport businesses and airlines had feared. He said it was a mediated settlement "based on good-faith negotiations."

The airport has about 16 full-time airport employees and about 10 full-time aircraft rescue and firefighting employees.

The workers receive city paychecks and are covered by the city workers' compensation coverage. The city recoups its costs from the airport authority.

Fargo Mayor Tim Mahoney called the new agreement a win-win for both parties, adding that the former memorandum of understanding was outdated and a continual challenge for past mayors, commissioners and airport authority members.

"This city commission and this airport authority worked together to honor the sentiment of our forefathers while also incorporating the current needs of our two organizations," Mahoney said. "We have created a synergy that will lead to an even better Hector International Airport of the future and, in turn, a stronger city."

Mike Haugen, chairman of the airport authority, said the agreement came after a long, arduous process.

"I would say it was a learning experience for both boards," Haugen said, adding that the authority was eager to get on with the business of running what is an increasingly busy airport, which saw about 939,720 passengers in 2019, an all-time record.