City Council to discuss whether to continue contracting with Circle of Friends

Jan. 20—GRAND FORKS — Grand Forks City Council members will meet Monday to discuss whether to continue contracting with Circle of Friends, the financially embattled animal shelter, to serve as the city pound.

Council members will discuss whether to continue contracting with the shelter for animal impound services, City Administrator Todd Feland told the Herald, or if the city should pursue other avenues like establishing its own city-run impound services or seeking another shelter agency with which to partner.

"I suppose you could find a fourth, but these are the three options we see," Feland said Thursday.

The council will meet Monday as the Committee of the Whole so no formal action will be taken. The committee consists of council members and meets twice per month, on the weeks when the actual City Council does not meet. It does not take formal action but makes recommendations for actual council meetings.

The shelter disclosed to the Herald on Jan 5 that it had

depleted its once prodigious reserves, had rolled over $42,000 in unpaid bills from December and had begun cutting staff hours to meet a $15,000 shortfall

on a payroll that came due Jan. 17.

Executive Director Lauralee Tupa has blamed the shelter's financial woes in part on a recent upswing in pet intake, particularly strays or abandoned pets brought to the shelter by city police.

Under its 2023 agreement with the city, Circle of Friends provides "shelter, managing personnel, and facilities available to care for stray and abandoned animals ... and such animals delivered by representatives of the Grand Forks Police Department for safe keeping."

A donor letter sent out by the shelter in December claimed police brought in 1,159 animals in 2023 for a total cost of care of $944,050, compared to the $184,149.50 the city paid out.

The city-shelter contract notably does not specify the extent of care the city asks Circle of Friends to provide. The $944,050 figure included cost of stay, microchipping, vaccinations, parasite treatments and medical treatments, per the shelter letter.

"How much actually falls into the contract comes into question because these funds run out fairly fast," Tupa told the Herald in December.

That contract actually expired Jan. 1, Feland said, amid negotiations between the city and the shelter. The shelter had last agreed to continue providing those services in the interim while the city took an in-depth look at the shelter's January expenses.

Feland said council members on Monday will hear presentations from Feland, the city attorney and the finance department, as well as city police.

City officials will recommend the City Council vote to continue contracting with Circle of Friends for impound services, but will also present two alternative options: establishing a city-operated pound or sending out a request for proposal for another animal shelter to take on the animal impound contract.

Both alternative options would likely take several months to set up. Feland estimated the request-for-proposal option would be a three-month process, while establishing an in-house city pound could take longer. The city would presumably ask Circle of Friends to continue its interim agreement while it pursued these alternatives, Feland said.

"Regardless of what we do, Circle of Friends is the city's impound, and we're going to need them to continue in the interim, or find a reasonable alternative," he said.

Included in Monday's agenda documents is a draft agreement between Circle of Friends and the city that would raise the shelter's annual compensation retroactive to Jan. 1 to $198,625 and authorize the shelter to perform up to $250 in medical care on an impounded animal. Further care would require written authorization from the chief of police.

That draft agreement also includes provisions for the city and shelter to "cooperate toward the implementation of technology relating to payment of fees for licenses and impounds; creation of a City database for owner name and contact information for City impounded animals; (and) creation of online facilities for the sale of cat and dog licenses for adopted pets."

Feland said Monday's meeting was prompted in part by the Herald's Jan. 12 report

documenting how the shelter had depleted the nearly $2 million it held in cash reserves in March 2022

in the face of runaway spending and a slump in donor support.

Feland said he and top city officials met with Police Chief Mark Nelson and two deputies to discuss the city's contract following the report.

Feland also said he'd told Tupa the city likely will hold off on further planning for a February meeting between the city and Circle of Friends' leadership while city officials waited for the council's directive. Leaders from both parties were set to meet for an in-depth review of the shelter's January expenses and to discuss the future of the shelter's relationship with the city.

Circle of Friends has faced criticism in recent months for its multi-million-dollar budgets, particularly after it launched an around-the-clock sit-in in November with an ambitious $1 million goal.

Feland emphasized that while the city was taking a closer look at the shelter's finances to better understand how much of its expenses went toward fulfilling the city contract, it is by no means investigating or conducting a formal audit of Circle of Friends.

"We're auditing in the lowercase 'a' sense. ... Just so we have a better idea of what's going on, and can explain that to the City Council," Feland said.

Separately, he suggested Circle of Friends' financial straits might be a result of growing too fast during a financial upswing and without a long-term plan, an issue that had dogged other nonprofits in the past.

"That might be one more explanation: creating programs beyond the original intent that Circle of Friends might sustain over time," he said.

Neither Tupa, Chief Financial Officer Judi Marvin or Circle of Friends' Board Chair Christopher Douthit responded to a Thursday afternoon request for comment.

Tupa did not return responses to text messages sent on Monday or Thursday, including a query about the future of the shelter's Adoption Center at 910 S. Washington St.

Tupa had previously told the Herald the nonprofit was set to inform its landlords at that address on Jan. 15 whether it would continue its lease past Jan. 31 or vacate the space.

Blue Star Investments LLP, listed in city and county property records as owners of the Washington Street property, had not returned a request for information as of Friday.