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West Fargo will sell bonds for part of new fire headquarters cost

A graphic rendering of a fire department building
An architect's rendering of the new West Fargo Fire headquarters to be built in 2022.
Special to the Pioneer

WEST FARGO — The West Fargo City Commission will sell bonds to pay for about $10 million of the estimated $17 million needed to build the new West Fargo Fire Headquarters.

The headquarters to be located at 1201 10th Ave. E., will begin construction in the spring.

At the commission's Monday, Dec. 20 meeting, City Administrator Tina Fisk presented three options for footing the bill of the new headquarters.

One option was to fund the full $17.2 million from the city's half cent sales tax for capital improvement plans. Public safety such as the police and fire could use the sales tax fund to build new buildings or buy new equipment in this scenario.

A second option was to fund $12.2 million with the city's annual appropriations fund then use about $2.5 million from an excess fund and $2.5 million from the reserves.

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The third option, which Fisk recommended, is to finance $10 million of the cost with an annual appropriations bond and draw about $2.5 million from its reserve funds. The cost of the bond would be about $643,000 over 20 years.

"Also, by buying down the cost of the debt, it will not hurt the city’s bond rating," Fisk said.

City Attorney Jon Shockley said the interest rates on city bonds is currently very favorable.

“It’s a really good interest rate environment, what happens in six months I have no idea, Shockley said. “It’s not an issue of interest rates, it’s a matter of how you want to finance.”

However, City Commissioner Eric Gjerdevig pointed out that the city continues to have about $2.2 million in reserve. The city received that money to assist with COVID-related issues but the commission has not yet directed a use for the money that City Finance Director Jim Larson said has no restrictions.

Larson added the city may also be soon receiving additional COVID-19 funds that will have restrictions on how it can be spent.

"Why wouldn’t we first apply the 2.2 million that is sitting there that is unencumbered and we have no idea what we‘re going to spend it on?" Gjerdevig said.

"That was actually considered," Fisk said. "We were trying to hold on to that and see how 2022 played out and what the 2023 budget looked like."

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“From my perspective, the COVID money should be spent,” Gjerdevig said.

The commission agreed to bond for the initial $10 million needed and asked staff to present additional scenarios to pay the balance of the project in the near future, including some that make use of the pandemic aid.

The city is now estimating the cost of the project to be about $17.97 million, which will include not just construction but design services, professional services, furniture, fixtures and equipment as well as a traffic signal to be placed at Ninth Street East and 10th Avenue East.

The new building will have a first floor of 30,384 square feet, a second floor of 9,461 square feet, and a basement of 7,579 square feet for a total of 47,424 square feet of space. When fully operational, the building will house nine, 24-hour operations employees, and 14 administrative, risk reduction, training, and services employees. A training room that can accommodate up to 100 students and a four-story training/hose tower.

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