Committee Minutes

Minutes of the Grand Forks City Council/Finance-Development
Standby Committee Wednesday, February 17, 2010 - 4:00 p.m.

The Finance/Development Standby Committee met on Wednesday, February 17., 2010 at 4:00 p.m. in Room A-101 in City Hall with Chairman Christensen presiding. Present at roll call: Christensen, Glassheim, McNamara.

Also present were Saroj Jerath, Emily Fossen, Greg Hoover, Meredith Richards, Joe O'Neil, and reps. of EAPC.

An additional item was presented by the city auditor - to cancel special assessments on the State Mill & Elevator.

1. 401 DeMers building repairs.
Greg Hoover, Urban Development, reported that the maintenance staff at Urban Development over the years have been doing some bandaid repairs on some leaks at this property, that when hard rain, thaw or strong winds, snow blows in, panels on the outside give and allow for intrusion of water; asked EAPC for more detail, but to fix the problems at 401 and in looking at that identified another leak at 402 (401 is Alerus and 402 is Social Security), and asked them for two opinions of probable cost and repairs - one is a 5-year fix for $125,000 and other is a longer fix for 20+ years for $410,000 - and because of tight budget environment , looking to do the 5 year repairs. The building was built post-flood by Mortenson; and prior to his coming here and even after he was here, the maintenance people went in and did the fix on the building and avoided any warranty on the building. Question was asked if we did some preliminary action, it voids any warranty or obligation that Mortenson would have. Contract was not available at the meeting and committee asked that the contract be provided. Joe O'Neil stated he has been with the City 10 years and when he first started the building leaked almost from the outset, and maintenance crews went in and for some reason didn't go back to the contractor and in past history that if go in and do something, you alter and voids warranty. Christensen stated not good idea to get legal advice from associate - suggested that he wants to see contract and wants legal opinion. Glassheim questioned whether design flaw rather than building flaw, that if panels badly installed or don't work. Rep. of EAPC stated from their investigation on 401 building but during construction process and reviewing drawings, not what they see in the field - some kind of panel system that has some fluctuation in it to hold it in place to give it the image and that is where encountering the water problems.

Christensen stated we have a 10 year statute of limitations in ND, questioned when the building was completed and when certificate of occupancy was issued, and would like to know that between now and Friday - Hoover stated they would provide that information, that supposedly have a Class A building with some Class A tenants and they have been suffering through this, and if moving forward with a suit, are able to undertake repairs? Christensen stated EAPC will be doing some investigation to see what is wrong with this - that if did value engineering and someone was getting paid to oversee the project, that there were plans and specs., etc.

Christensen stated once get that info. will find where we're at and then do repairs as they have to be done. Glassheim asked if can do repairs before law suit is settled? no choice. Hoover stated money for the repairs - they did loan modification with banks, took out the note on revenue bond and savings from that were $146,000 and was proposing one of two options - that if we had gone forward today would have made the repairs of $125,000 and then realized over time that money would have paid for debt service and would have replenished the account or would have gone with Loan & Stabilization Fund or some other fund at 3% and paid that back.

Committee did not advise a 5-year fix as would then have to come back with larger amount -
and asked for cost estimate for the second building. Christensen asked if have to go out with RFP for repairs - Hoover stated it depends on the amount of contract, city attorney had stated anything over $100,000 and will check with Mr. Swanson. Christensen stated that if EAPC are already invested, no sense in getting someone new.

2. Matter of flood protection special assessments against property for State Mill & Elevator.____________________________________________________________
Saroj Jerath, city auditor, reported that Howard Swanson, city attorney had sent memo to city council members and read from the memo, last paragraph "..I remain available to discuss this matter with you should you have any questions or concerns. This is an item that should ultimately be acted upon by the Grand Forks City Council." Ms. Jerath stated she would like to handle this administratively rather than taking it to city council. Assessment originally $12,800.
Motion by McNamara and Christensen to approve recommendation from Ms. Jerath to handle administratively. Council Members McNamara, Christensen and Glassheim voted in favor of the motion.

The meeting adjourned at 4:20 p.m.

Alice Fontaine
City Clerk