Council Minutes

Minutes of Grand Forks City Council/Committee of the Whole
Monday, January 26, 2009 - 5:30 p.m._________________ __

The City Council met as the Committee of the Whole on Monday, January 26, 2009 following the Growth Fund Authority (JDA) meeting in the Council Chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Bjerke, McNamara, Glassheim (teleconference), Gershman, Christensen, Kreun - 6; absent: Council Member Bakken - 1.

Mayor Brown commented on various items during the past week and upcoming events:
There is a public hearing on 48th Street construction tonight at 7:00 p.m. in Room A101.
Rick Duquette, city administrator, is inducted as this year's chair of the Grand Forks/East Grand Forks Chamber, congratulations Rick and we look forward to working with you.

1.3 NORTH DAKOTA LEGISLATIVE UPDATE
Pete Haga reported this is second legislative update, House deadline for submission of bills was last week and Senate is this week and will have better view next week on what bills looking like and can follow the bills and legislative process on the website and can read through his weekly reports. The major issue this week was extraterritorial zoning - Mayor Brown went to Bismarck to give testimony on Friday before the Senate Govt. and Veterans Affairs Comm., there was good deal of testimony from both directions and anticipate a lot of discussion on this. The testimony provided by the Mayor mirrored to a great extent the testimony provided by the ND League of Cities and by several other mayors, including Bismarck, Fargo and Minot and followed three main principals - that the cities do need to have the extraterritorial zoning authority, that we need to make sure that any legislation that affects that is going to be prospective and not retroactive, and that there should be some sort of compromise and partnership working together in the outer limit of the second tier of the extraterritorial zoning. That testimony will be available for everyone to view on website.

This week a few of the tax bills and valuation assessment bills because property taxes are a concern and they try to address that through several vehicles - one is doing some work with the assessment valuation process, something that we have opposed and trying to make sure the evaluation assessments are as accurate and true as possible. 3 House bills, 1422, 1423 and 1282 have some aspect to limiting the valuation increases, and from our position that is false sense on the actual property valuations, Mel Carsen will be providing some testimony to that extent. Two other bills that City departments will be providing some testimony, Senate Bill 2354, which prohibits a building code from requiring sprinkler systems in single family dwellings and fire department will be providing some testimony in opposition to that bill; and Senate Bill 2210, which is relating to the offenses for killing or injury of a law enforcement animal and police department will be providing testimony and support of that bill.

This past weekend was the first legislative forum sponsored by the Chamber of Commerce, held in city council chambers, with a good turnout and good attendance by the public. We will try to keep people posted on when the next forum is, typically at 9:30 a.m. on Saturday mornings, meetings are televised and also re-broadcast.

SUSPEND AGENDA

It was moved by Council Member Gershman and seconded by Council Member Christensen that we suspend the agenda and move item 3.1 CVB 1% Lodging Tax to be the next item. Carried 6 votes affirmative.
3.1 CVB 1% lodging tax.
Julie Rygg, executive director of Greater Grand Forks Convention & Visitors Bureau, made brief summary of recent developments with regards to their funding. The bond on the buildings which houses the CVB will be paid off in February, currently 1% of the 3% lodging tax collected in Grand Forks is being used to pay that bond with the CVB using overflow funds for the last few years to cover building maintenance and repair expenses; this tax is not slated to sunset and the funds may now be used for general tourism promotion.

The building that houses CVB was completed in 1995 and is visitors center, supplying information on Greater Grand Forks, ND and MN, and serves local residents by supplying maps and vacation guides for most of the US states and Canadian provinces, that they see approx. 22,000 visitors each year. Currently the CVB operates on revenue generated from 2 of the 3% lodging tax collected, a 1% car rental tax at the airport, a small membership program in grant dollars from the State of MN and visitor guide advertising sales, total budget for 2008 was just under $650,000, projected dollars generated through this additional tax will be around $206,000, some of their closest competitors have much higher budgets and these dollars will help them compete in the marketplace. The CVB and tourism promotion has changed and expanded over the last 6 to 7 years, have 5 full-time and 2 part-time staff members. Their budget breakout stays within industry standards with marketing promotions being the biggest share at 54%, salaries and benefits at 34% and office expenses at 12%.

She reviewed recent programs that have been enhanced, expanded and added, and gave brief overview of how some of these new dollars generated from the additional 1% will benefit tourism promotion.

She invited them to their annual meeting on February 12 to hear more specifics about these programs, that the additional revenue will get them in line with some of their biggest competitors and allow them to grow and expand their promotional efforts; since strictly visitor generated income, there are no negative effects to the residents, and community will continue to be rewarded with increased sales tax revenue and economic impact for our local businesses from recurring events as well as leisure travelers.

Council Member Gershman stated in looking at some of the numbers, that he considers Bismarck and Fargo as major competitors of ours, that Bismarck has 45% more money that we do, Fargo has 173% more in their fund to promote, and that CVB had no obligation to come to the city council to talk to us about this. He thanked them for coming forward, that the cost of advertising or promotions is not going down and at time when need some stimulus because doesn't think Grand Forks and North Dakota are going to be immune from what is happening nationally and internationally, need to have greater presence in Canada and commended them and their plan going forward and expressed support for it

Council Member Christensen stated he wasn't quite ready to express support for money being maintained at the CVB until the council has had some review of the activities of the use of the money. The ordinance that enacts the tax requires a change in the ordinance because 22-0304 provides that the tax proceeds from the 2% in a special fund to be known as a Convention and Visitors Bureau Fund and 1% is a special fund to be known as the Convention and Visitors Bureau Capital Fund, and that when this ordinance was created one-third of the money was to amortize the bonds that we sold to build the facility and provide for repair and maintenance of the facility. A letter to administration from Mr. Swanson dated January 16, 2008 which states that
the fund may be used for tourism or for the purchase, equipping, improving construction, maintenance repair and acquisition of buildings or property, consistent with the visitor attraction or promotion, and cited the statute. He stated that the last payment for the bonds will be in February, 2009 and that the annual bond payments were $117,156, currently there are $491,696 in the fund of which $117,000 has to be used to pay the last payment which will leave unallocated money in the fund of $374,540.00, that can't drop down into our Loan and Stabilization Fund because it was a dedicated amount. He stated that they don't have $203,000 in their budget, but have the net amount of the revenue that is being collected and based on the 2007 numbers it would appear to have $701,107.00 coming from the tax to take care of their situation. That doesn't include the $374,000 and we have CVB, Alerus Commission, the Arts, and Special Events that we should look at all of these activities to see if we can consolidate - why allocate $375,000 for tourism, could use that money and fund special events or the Arts for 4 years or half of each and free up some money in 2163 for other things in the community which go to benefit others. He stated we have another group that will go out between $50,000 and $100,000 for events, and would like to move this to the finance/development committee for review so know if there is an overlap or any consolidation that can be made, and to review how to use the money in light of the other funding activities that we continually fund.

MAYOR BROWN RELINQUISHED CHAIR; PRESIDENT
GERSHMAN PRESIDING.

President Gershman asked for consensus of council if should refer this matter to the finance/ development standby committee; council members concurred.

Council Member Kreun stated that several years ago they looked at matter between different entities to see what could do with interacting with Ralph Engelstad Arena, with Chamber, Alerus Commission, Canad Inns, and stated that individuals representing these entities have been sent out at different times, that there is interaction taking place but doesn't want to leave impression that every entity is out there doing its own thing without relationship to the other entities.

Council Member Glassheim stated that he doesn't want the events money to go just for the purpose of filling hotels and bringing people into town but also involved with helping to fund community events and want that to continue.

President Gershman referred the matter to the finance committee.

2.1 Applications for abatement of 2007 taxes by the following:
a) Henry Passmore, 2913 Shadow Road
b) Daniel Nichols, 1801 24th Ave.S., #6
c) Stanley Johnson, 3815 S. 11th St., Unit C
d) Robert Humble, 1801 9th Ave.N.
e) Thomas Aaker, 1503 S. 19th St.
f) William Moore, 3801 S. 11th St., Unit C
g) Nicholas and Florence Ruhland, 1302 Walnut St.
There were no comments.

2.2 Application for exemption of remodeling improvements to residential
or commercial buildings at various locations._____________________
President Gershman reported that he had some comments and that this would also be a referral, that he would like to see listing all of the programs that we have that could stimulate home building additions and businesses for development in our city - HOME funds, $75,000 exemption on new residences, and refer that to the finance committee at some point in the near future and to see if there are some other incentives that we might consider to see if the city could come up with some stimulus (i.e., capital improvements or expansions of businesses with exemption of property tax for 2 or 3 years) and would create some jobs, and would like to have that discussion and would like to refer that to the finance committee and put on an agenda and augment that with our local stimulus package and publicize it.

2.3 Plans and Specifications for Project No. 6273, Dist. No. 637, paving N. 51st Street from Gateway Dr. to 10th Ave.N., Federal Project #SU-6-986(083)087._________
There were no comments.

2.4 Amendment No. 1 to Engineering Services Agreement with CPS for Project No. 6101, paving S. 48th St. from 17th Ave.S. to 32nd Ave.S., Federal Project #SU-6-986(082)086.___________________________________________________________
Al Grasser, city engineer, reviewed project and cost - the project extends from 32nd Avenue South and ties into the end of the existing paving at 16th Avenue South in the Industrial Park; the basic project consists of a roadway with lighting and associated storm sewer and an open channel draining system on the westerly side. He stated there is a bikepath listed in the Concept Report which is proposed to tie into the existing bikepath and bring it along 32nd into the Industrial Park. Another significant feature is Legal Drain 9 which will be revised and moved as part of the base project so that it will be in the right location when the 17th overpass comes in.

A summary of the projects costs - no improvements needed on 32nd Ave.S., and after you get past 48th Street, 32nd Ave. turns into a two-lane road which limits the amount of turning movements for large trucks:

$5.8 Million - Basic 48th Street project and of that $4.7 in federal dollars, includes work on Legal
Drain 9
$1.2 Million - on local side (special assessments, tapping fees, etc.)
$1.6 Million - Trunk drain system est. and these numbers are in the PCR that the consultant has
helped develop. Majority of that cost will be assessments and tapping fees,
minimal fee of federal dollars.
$900,000 - Preliminary engineering to go through design efforts, etc.
$1.2 Million - Land acquisition, and some of that was based on buying fairly narrow strips of land
which is more expensive, and have opportunity in a subsequent item coming up on
the Industrial Park land purchase to revise if we buy that in larger acreages with
negotiated prices and knock this number down substantially. Future ditch crossing,
put one ditch crossing at intersection of a future collector street but could be a need
in the future for some additional crossings depending on how the land gets laid out,
and not putting them in now because don't know how the land may develop on the
west side.
$1.6 Million - Put in a new station to serve that section of land - Sanitary sewer lift station and
now the sanitary sewer along 32nd is going into a temporary lift station.
$1 Million - Gravity sanitary sewer that would feed that station along 48th St. est. at $1 million.

2.5 Specifications for portable car fire trainer.
There were no comments.

2.6 Riverside Pool Joint Powers Agreement.
Howard Swanson, city attorney, stated there were some minor changes in the section
dealing with public meetings.

Council Member Glassheim thanked people who worked in getting us to this point, Archie Simonson for his generous donation, the Park District for negotiating and allowing almost $600,000 of funds to buying it out to go towards construction and for agreeing to meet with pool supporters to try to make the best possible use of the pool, Rick Duquette, Howard Swanson and President Gershman.

2.7 Matter of approval of final contract with ND State Investment Board for management of DB Pension Plan Assets.___________________________
Council Member Bjerke stated that expected return 9.3% and if that is the correct
amount. The city auditor stated this is the asset allocation and this will get you to the actual expected rate of 9.3% and what we will expect from this portfolio.

Council Member McNamara stated that they did adjust the expected rate of return down for planning purposes and what this refers to is the actual asset allocation that we modeled ourselves after PERS and what they expect to get out of that portfolio.

Mr. Swanson reported there are five principal items they need to be aware of on this item:
the city council will be naming itself as the fund trustee and that will be a substitute for what presently is Alerus Financial; another major change will be that the assets themselves will be held, North Dakota State Investment Board's custodian will hole the assets, the other detailed change is now you are approving a specific allocation of the funds that is in more detail than what you have previously identified as an acceptable range of allocation; and assuming it is approved, you would be giving the proper City officials the authority to enter into the agreement with the State of North Dakota, which already has received approval from the State Industrial Commission.

2.8 Consideration of Engineering Services Agreement for Project No. 6399, North End Water Tower Rehab and Smiley Tower Alternative Evaluation.________________
Council Member Bjerke stated it’s a rusty water tower, doesn't hold water, not going to
hold water and is time to move on.

Council Member Kreun reported that about a year ago Service/Safety indicated that they would come back with this option when the northend tower needed repair and would bid the two together, one of the things that has happened is that there has been a lot of discussion on it and asked if in the amount of the rehab, if there is anything for the structural component of the water tower because one of the reasons the water tower doesn't hold water is that it is structurally not capable even if we did rehab it; would it stand for that time without extra works.

Wayne Gerszewski, project manager with Advanced Engineering, reported the Smiley tower was taken out of service about the time the Purpur tower was built, 1999/2000, and at that time there was a very detailed inspection of the water tower completed along with an assessment of the structural condition of the tower by KLM Engineering who is a specialist in water tower evaluations and construction observation. At the time the tower condition was assessed the coatings on the interior and exterior were in very poor condition, interior shell thickness pitting was very severe, even some holes found in the tower but the water tower was also taken off line, not just for the structural condition of the coatings and shell components, etc. but the water elevation within that tower can't be quite as high as the new towers, and that limited the actual operational heights of those towers and didn't fit into the scheme of the water system any more and the overall size of the tower as being about half the size of the others and didn't fit with the water systems operations. Those were taken into consideration when taken out of service but the structural integrity of the tower standing itself, would stand for a long time. There are some structural components that they have looked at because there are individuals that still climb that tower from time to time - there is a paragon falcon box on the water tower and there is an individual that climbs that at least once or twice a year to assess the bird's conditions, etc. and there are some proposed improvements - railing systems, etc. - liability.

Kreun stated there are some portions of the water tower that are substandard that need to be brought up to code and those costs were included in the proposal. Mr. Gerszewski stated they prepared three different alternative cost estimates - each of those contains a certain amount of components, the main difference between the three when go from the est. $90,000 cost for Alt. 1 vs. $185,000 for Alt. 2 vs. $360,000 for Alt. 3, more on coating removals and containment systems that are required to do that work. Mr. Feland stated they are now approving a design agreement for the northend water tower and also to look at the 3 alternatives, and if decided to demolish it, would go back to Advanced Engineering to eliminate those items and reduce that fee.

Council Member Glassheim stated that if they demolish the tower, suggested putting some kind of marker or historical monument or something there and if in the interval between now and when we make a decision if we couldn't have a rough estimate of cost; and if we did take it down, perhaps the public would like to have some memento of it having been there. President Gershman stated that if the council decides to take it down, would like to see a bid on painting the Purpur tower with a smiley face on two sides, one from downtown and one facing west, and this might be compromise for people.

Council Member McNamara stated when discussing Smiley tower lot of people concerned about it - we would invest $90,000 to demolish it, but if wanted to give citizens a chance to come forward to put something together to take it down, sandblast and put it in a park, if there is a timeline. Mr. Feland stated that if some group came forward to take this from the water tower and put in park would be amenable to that - will be doing plans/specifications and take bids, and some time if someone comes forward with a good proposal, can modify plans/specs. at that time.

Mr. Gerszewski stated total engineering agreement was $85,000 to design the northend water reconditioning portion of the project for design and bidding, and the 3 Alternatives for the Smiley tower, and for the Alternatives look at between 4 and 5% of that construction cost is what it would cost to put together the plans and specifications for each of the alternatives - so about 15% of the est. cost for the northend water tower.

Mr. Christensen asked what would cost City for any plans to paint two smiley faces on the Purpur tower. Mr. Bjerke stated that to have Alt #1 the $85,000 fee would go down $20,000 because 4% of the fees would be eliminated - that we will save $20,000 if we move to get rid of it.

2.9 Amendment No. 1 to Consulting Service Agreement for Project No. 6324, Landfill Preliminary Design and Permitting Agreement._____________________________
There were no comments.

2.10 Consulting Service Agreement for Project No. 6423, New Landfill Final Design.
There were no comments.

2.11 Consulting Services Agreement for Project No. 6421, reconstruction of N. 69th St. between 27th and 54th Aves.N. and 54th Ave. between N. 55th and 69th Sts., including grading, drainage, roadway construction and other related work._____
There were no comments.
2.12 Industrial land acquisition.
Council Member Christensen reported that there has been some discussion and staff has been thinking of some ways to pay for the project without selling bonds, and are examining a couple funds 5996 and 2163, to pay for the land, would save the interest.

Mr. Swanson stated that if the decision is made to acquire the property with funding sources other than bonds, the contingency that is in the purchase agreement needs to be removed or may need some modification depending upon what decisions are made by council

Council Member Christensen stated he received information re. cash balances in those funds and what is unencumbered and an unencumbered million dollars in 5996, and feels can find the money without selling the bonds.

Mr. Swanson stated if the council is committed to moving forward with the purchase and not trying to create an exemption or contingency, can remove that from the purchase agreement and then ultimately decide whether you are going to pay cash, finance combination, options would not be limited but before you now is the question on the purchase agreement. Council Member Kreun stated they should move forward with that and send that to the finance committee to decide which way we would want to utilize our funds.

Mr. Swanson stated that the sale on the issue of bonds, depending upon the use of the bonds, and the property that is involved here, balances as to whether it is a tax exempt bond or taxable bond, and that decision significantly impacts the rates that would be paid, and that is basis as to why you are even looking at something other than a bond sale. If don't have a bond sale, you also save the costs of issuance - the acquisition is not what is being questioned just the financing.

Council Member Bjerke stated in conjunction with the 48th Street project which includes a lift station, as this gets done and the approx. 80 acres in the Amazon land will become much more useable because that lift station is put in, that we are really getting 200 acres because that land will be useable as it will have the sewer system; and should be considered before we buy any more land after this - that we do have approx. 80 more acres coming on line because of the S. 48th project.

Council Member McNamara stated that finance department has been very gracious as they have gone through a lot of reiterations of this and that he and Mr. Bjerke discussed if there were any subsequent costs to the citizens after we do this that aren't in the picture as we see it now, and that the lift station that we were talking about was that they can do without constructing that, and wanted to thank them because they have been great in being patient with us, along with people in Engineering.

President Gershman stated that the land we are acquiring now along with the Amazon, we have projections of 15 years. Mr. Lund stated that with Mr. Hoover's help a few years ago did an analysis of industrial land consumption, and that somewhere between 250 and 280 acres were consumed through industrial development in the park over the last 15 years and that is the number they have been looking in terms of planning for the next 15 years.

3. INFORMATION ITEMS

3.2 Project Concept Report for Project No. 6272, Cherry Street reconstruction from 17th Ave.S. to 25th Ave.S, Federal Project #SU-6-986(084)088________________
Information only.
6. MAYOR AND COUNCIL MEMBER COMMENTS
1) Council Member Bjerke stated that S. 48th Street is very big project, lot of money, lot of long term planning, and lot of land and have put lot of time and effort into that because trying to make sure we do the best for the citizens.

2) Council Member McNamara asked for explanation from Council Member Kreun why not just leave Smiley tower alone. Mr. Kreun stated that was brought up during safety/service committee, one of the things is that there are large chunks of thick paint falling off and does create somewhat of a hazard, it has deteriorated to the point where it is ugly, and do we want a piece of our community deteriorating before our eyes and leave it standing - that if let a building deteriorate, we condemn it and tear it down - this is not on the historic register and nothing special except it has a face painted on it. That with the bids that we're getting now to do the rehab on the northend water tower is the most economical time to do that - it is going to have to come down at some point in time and this is the opportunity to do that, that he doesn't think it has a lot of significance, sentimental value to it, and that is why making the recommendation through safety/service committee to follow through with demolition of it.

3) Council Member Christensen stated he doesn't think there is a great safety hazard with some paint falling down - tower is rusting and appears that it will continue to rust - that if we need a smiley picture on a tower, not sure if it would cost that much to put smiley face on the Purpur tower.

ADJOURN

It was moved by Council Member Bjerke and seconded by Council Member McNamara that we adjourn. Carried 6 votes affirmative.

Respectfully submitted,



Saroj Jerath
City Auditor