Committee Minutes

FINANCE DEVELOPMENT STANDBY COMMITTEE
April 21, 2010 - - 4:00 p.m. - - A101

Present: Glassheim, Christensen, McNamara (joined in progress)
Absent: None

Called to order at 4:00 p.m. by Chair Christensen.

Retail Sector Support Proposal

Mayor Brown stated the retail sector is an important economic part of the community and it is important to show support for this proposal and to assist this sector as they try to compete with leakage of shoppers to other communities.

Barry Wilfahrt, President/CEO of The Chamber, stated that taxable sales are a source of revenue to the City of Grand Forks and show the importance of the retail sector to the community. He explained that the proposal is to hire the Buxton Company to complete this project which would be two-fold – first a retail propensity study to look at what is currently not available from existing businesses but that they could offer to meet needs of the community and then second to look at remaining holes that need to be filled so that we could look to recruit businesses to the community to fill those holes and the best way to do that recruitment including providing information for recruitment packets. The result of the study would be to enhance the retail sector and slow the leakage to Fargo and elsewhere.

Wilfahrt continued that the cost for the study is $50,000, of which the Chamber has committed $5,000 and the CVB has committed $20,000. A proposal has been made to the East Grand Forks EDHA for $5,000, and while they have not yet committed, is optimistic that they will agree to participate if funding is secured from the City of Grand Forks. The request today is for $20,000 from the City of Grand Forks.

Wilfahrt stated that this will be real data on what people are spending outside our community in our region instead of here within the community and Buxton Company has been hired by over 400 communities and big box stores including Walmart to provide similar data and that doing this study for our community would provide local retailers with the same information that many chain stores receive. He continued that the data received is very specific in regard to what purchases are currently being made in the community and what residents of the community are specifically purchasing out of town. Study results would be available in about 90 days.

Glassheim questioned the 15 minute drive time and whether that would be relevant for our community. Wilfahrt replied that there is the ability to modify factors in the study such as drive time to make the data relevant to our community and would work with Buxton on those factors. Wilfahrt continued that there would be numerous benefits to the City in retaining and increasing tax dollars form this type of project and that can be shown by the results in other municipalities have done similar studies.

(McNamara joined the meeting.)

Saroj Jerath, Director of Finance, stated that the funding source for the project would be excess sales tax.

Christensen asked for information on how the data would be used once the study results were compiled. Wilfahrt explained that The Chamber would have the data available for businesses in the community and region to access and would be available to both members and nonmembers. Data would be distributed in a variety of ways including 1:1 consultation, group seminars and webinars, and also sent out to any business that would like a recap. The second result of the project is that the information could be provided to potential businesses as part of a recruitment effort in marketing packets.

Christensen stated that he has learned that this type of information is already available to some businesses in the community and that seems there is still a need for plan on how to boost the retail sector, perhaps through an ongoing program to work in that area. He suggested that perhaps it would be appropriate to approach the EDC and look at an expansion of scope from their organization to include retail development, much like they expanded their scope in the past, for instance to include the UAV mission. Mayor Brown replied that we have been in contact with the EDC, but they do believe that their focus should be primary sector. Christensen stated that he believes that for the study to be beneficial we need to have in place a plan for how the data can be used once it’s gathered.

Wilfahrt commented that the data that the Buxton company provides is different from that provided by some of the other similar companies and has worked with them before and seen the results that they brought to Watertown, SD in slowing their leakage to Sioux Falls. He agreed that they do need to have a plan for using the data and that it would be valuable to real estate development companies in working with potential companies. Christensen stated that he would still like to hear how the data will be used, who will work with the owners of vacant units and how that will happen. Wilfahrt replied that The Chamber views its position as to be the one to distribute the data and work with existing businesses, but not the one to do the actual recruitment of potential new businesses, but that would be responsibility of others. McNamara commented that there are other entities that are in the community with their focus on doing projects such as this one and would see that it is more fitting for them to participate and not sure it is the City’s place to become part of this.

Wilfahrt replied that studies like this are handled differently in different communities and that there are many times when they have had municipal funding and support and also times when they have not. He added that they can bring back more specific plan for how the data could be used after the study. Christensen stated that once we have the data we own it and need to look at maybe expansion by EDC to work in this sector or perhaps division of City or other agency to focus on retail sector issues, with concern that there are vacancies and need to look at way to fill and sustain those businesses and that may need a community wide rollout for support and plan for the next 18-24 months with measurables to track progress in the sector, including who would work with businesses, do recruitment, put together and send out packets, work with real estate companies, etc. Wilfahrt will work on preparing some more information and bring back to the Committee.

Financing for PSAP building project.

Margaret Emmanuel, Interim PSAP Director, gave a brief history of the Public Safety Answering Point and challenges that the department is currently facing due to space constraints which have led to the proposal for the expansion. The expansion will be an addition to the Police Department Building which will provide for expansion of the center to accommodate an 8 console/8 person center, office space for the director and office staff, allow for relocation of equipment from the basement and eliminate problems associated with electronics in that environment, and also provide space for a break room for staff.

McNamara asked whether funding questions had been answered. Jerath stated that City Attorney Swanson had requested an Attorney General’s opinion on whether 911 fee collections could be used to finance the construction of the expansion and the opinion was that they could. With this ruling, the project will be funded internally through accumulated cash in the 911 fund, 911 fee collections, and a short-term loan from the waterworks fund, which will be repaid with 3% interest in 5 years from future 911 fee collections. Total project budget is $2.1 million.

Mark Walker, Asst. City Engineer, explained that there will be contracts associated with this project coming through Council. Icon will be used for architectural services and PSAP will hire a firm specializing in public safety facilities, Elert & Associates, for equipment and furnishing needs. Larger bids will also be brought to Council for approval and smaller bids will be handled by Elert. Walker stated that the planned timeline would be to have first bid opening July 19, 2010, Council approval August 2, 2010, and for occupancy of the facility to occur by June 1, 2011. Location of the facility will be on the northwest side of the existing building and will also include construction of a radio tower on the southside of the lot.

Motion by Glassheim, second by McNamara, to approve financing internally of $625,000 budget shortfall from water fund construction cash with payback through 911 fee collections over a 5 to 7 year period and at a rate of 3% interest with an accelerated payback if budget allows. Aye: All. Motion carried.

Repairs to 1550 South 48th Street (Noah’s Ark Building)

Greg Hoover, Executive Director of Urban Development, gave a brief review of the history of this project, that the project was included in the CIP for 2010, and had been held pending review of the leases to determine the responsible party to cover the costs for the repairs. He explained that Howard Swanson, City Attorney, provided an opinion the repairs are due to construction and or design and not maintenance issues and as such should be the responsibility of the JDA, who is the owner of the building and not the tenant. At this time the planned repairs are to replace the leaking windows and joint caulking in the exterior walls at an estimated cost of $306,000.

Motion by Glassheim, second by Christensen, to authorize staff to proceed with advertising for bid to replace leaking windows and replace joint caulking and seal exterior wall penetrations at the Noah’s Ark building.

Hoover noted that these repairs are funded from 5996 which receives revenue from rents paid by the tenants of its properties.

Bjerke requested information be provided at Committee of the Whole related to when the building was constructed and occupied, who built it, and who supervised the construction and operations of the building. The group discussed that research had been done and the statute of limitations is limited to 10 years and has run out on being able to file a claim related to issues with construction at this time, but Bjerke stated that he felt it would be relevant to know whom it was and to keep that in mind when considering contracting with them for future work. Glassheim commented that regardless the repairs are needed and we should get them done and not hold up the project to research those items.

Hoover read from a staff report provided at a prior meeting held in April 2008 that the building was constructed and occupied in 1998 as a design build project done by Innes Construction. He continued that earlier review by legal counsel had determined that it would be unlikely that the City would prevail if a suit had been undertaken at that time on either the basis of faulty design or construction issues and had been determined at that time that the City should proceed to make the repairs.

Hoover stated that he came to the City in 2003 and this has been an ongoing issue for a number of years and has been reviewed in the past and brought in Mr. O’Neil as Compliance Officer and he has worked with consultant on reviewing these facilities to determine the needs of the facilities. He continued that there are similar issues with some other buildings, such as leakage at Corporate Center 1, and shows the need for a means to plan for necessary repairs and maintenance for City owned structures, which has been done for some but not all facilities in the past, but hope that we can work toward including in the budget something for this in the future. Hoover commented that at the time some of these facilities were being constructed was a very busy time with many projects as the community struggled to rebuild and recover from the flood and staff was stretched very thin and not enough people to give the level of oversight that we would probably do today, that may have had some mistakes in the past and may have some in the future, but that we need to stop looking back and instead look forward and look at what needs to be done and put in place a plan for repairs and maintenance for all buildings including designating a funding source for those costs.

Upon call for the question, Aye:All. Motion carried.

2010 CDBG Program

Meredith Richards, Community Development Manager, explained that City Council previously approved the 2010 Annual Action Plan for bricks and mortar projects to be funded from CDBG dollars. They have received notification that one project included in the action plan for repairs of the Central Parking Ramp is not eligible for CDBG funding and City Council now needs to reallocate those funds to a different project which is eligible under CDBG guidelines. She continued that they have reviewed other needs and there is a need for repairs at the JDA owned building located at 201 S. 4th Street which would qualify for CDBG funding and are asking for approval to substitute that project for the Central Parking Ramp project.

Richards reviewed the various repairs that are needed at the building and stated that all would not be able to be completed with the $168,000 that would be allocated now in 2010, but the plan would be to include this building in the 2011 allocation for the remainder of necessary repairs. The
1st floor of the building is currently unfinished. The building’s 2nd and 3rd floors are currently leased to Centre Inc. for use as a transitional /residential treatment facility, with the lease running through 2017. The rent collected is set at the amount needed to cover operational costs for the building and there is no reserve to cover the needed repairs from other sources. She explained that the building was donated to the City from the County after the 1997 flood and a fit up of the upper floors was done at that time for Centre, Inc.’s use funded through CDBG. The lease will remain in place until 2017 and will only terminate sooner if State funding for the program is discontinued. There is an opportunity that if a tenant were interested or if Centre, Inc. needed to expand that the first floor could now be finished since the flood protection project is complete.

Christensen asked whether this is the most needed qualifying project. Richards stated that based on the short time frame to utilize the funds coupled with the fact that this project is shovel ready makes it the best choice at this time.

Motion by McNamara, Second by Glassheim, to recommend that City Council revise the 2010 Annual Action Plan as discussed. Aye: All. Motion Carried.

Hoover stated that there is still an issue with the Central Parking Ramp and the need for a funding source for the needed repairs and that matter will be coming back to Council at a future meeting. He added that he will also be meeting with downtown businesses to discuss the issues with the ramp in the upcoming weeks.

Public Works Facility Renewal Project

Todd Feland, Public Works Director, reported that this is an added item to the agenda and this was discussed at the Service Safety Standby Committee yesterday and will be coming to the Committee of the Whole meeting on Monday, April 26 and to City Council for approval on May 3. He provided a handout to the Committee Members that detailed how project costs would be funded and gave a brief review of the items included in the project. He explained that the Public Works Facility Fund has cash available and is proposing to use that cash, divide cost out proportionately to departments located within the building and use cash from those funds and a short term loan from the Water Fund to finance the project. Bids came in and looking at doing the base project as well as the alternate for exterior metal panels and an alternate to address stormwater needs at the site.

Christensen stated that he would not be in favor of part of the funding allocation coming from the Street Department Fund, as that is General Fund dollars and with budget being tight would prefer to see this funded in the enterprise funds which have more revenue generating ability. Feland agreed that the funding could be modified to only allocate to enterprise funds and will bring the revised funding plan to the Council in the project information for the April 26 Committee of the Whole Meeting.

Riverside Pool Lawn Furniture

Feland reported that this is an added item to the agenda as discussed at the City Council meeting this past Monday. This proposal would be for purchasing some additional furniture for use around Riverside Pool at a cost of $5,100. He gave a description of the items to be purchased and that proposed items would match existing items used at the pool and are commercial grade and made from recycled milk containers. Funding for the items can not be taken from donations given as those can only be used for operations. The purchase would be funded from funds remaining in the construction budget for the pool.

Motion by Glassheim, second by Christensen, to approve the purchase of furniture for Riverside Pool from project funds. Aye: All. Motion carried.

Meeting adjourned at 5:20 p.m.

Respectfully submitted,

Sherie Lundmark
Admin Specialist Senior