Committee Minutes

Minutes of the Grand Forks City Council/Finance-Development
Standby Committee Wednesday, April 2, 2008 - 4:00 p.m. ___

The Finance/Development Standby Committee met on Wednesday, April 2, 2008 at 4:00 p.m. in Room 102 in City Hall with Vice Chair Glassheim presiding. Present at roll call: Glassheim, Hutchison, Gershman.

Also present were Rick Duquette, Council Member Kreun, Greg Hoover, John Schmisek, Daryl Hovland, Todd Feland, Mel Carsen,

Chairman Christensen reported present.

1. Sale of Turtle River Township land.
Mel Carsen, city assessor, reviewed land value comparisons he found in the market for the property in Turtle River and listed five comparable sales, total acreage and crop land acres within that parcel and productivity index (PI) as determined by USDA who puts productivity index on every piece of farmland in the nation, and in ND that cropland productivity index is based on wheat crop, 100 being best and 1 lowest. The sales have been analyzed as to what price was per cropland acre and also for total acreage - #1 has index of 64 and sale is $1166 and took place in May or '07; #2 has low productivity index comparable with subject property and sold in June of '07 for $555/acre; #3 has index of 51 and sold in November of '07 for $501/acre; and #4 and #5 are better land and farther east in Turtle River Twp with an index of 78 and 82 and sale price was $1200 and $1333 per acre. The subject property (SE Quarter of Sec. 18) #1 is the best property of this entire tract of land, has an index of 56 and brought a price of $1140 per cropland acre; Subject #2 is second best land and has index rating of approx. 50 (USDA determination on this parcel was based on entire section of land) and bid is $679 per cropland acre; and #3 has PI of 45 and bid was $730/acre. He noted Subject #3 is marginal land but is selling for more than #2. There was only one bid on #3 and 3 bids on #1 and on #2. The successful bidder on #3 bid on all 3 in writing with oral bids following.

Ron Adams was high bidder on #3, John Buck on #2 and Kameron Slominski on #1 and owns NE quarter of that section - all three bidders farm in the area.

Todd Feland reported there are 584 tillable acres in Section 19 and 155 in Section 18, and that 18 is bringing $1141 and $702 per tillable acre in Section 19, however Alerus Financial stated the quarter section in 18 is of much better quality than 19 - 19 has some saline soil issues and some drainage issues and poorer piece of land than quarter section north of it.

He also asked Alerus Financial about cash rent options and last year rental was $23,000 annually and that part of the problem was going year to year because not sure when would put in a landfill and the renters were not sure if have long term issue with it, and thought in today's market $35,000 to $40,000 annually if rent it out - that 18 is the jewel of the 760 acres and also discussed the bids and their thinking on the quarter section in 18 at $1140/acre is really a good bid, they thought that the property in Sec. 19 would go for little more than the bid and advised that could see if bid this in a year that could actually get less and maybe $750 or $800/acre tops but if came back year from now for less - think these are reasonable bids, and that 19 is a marginal piece of property and is a challenge - and in next year could get less because farm markets are at their peak. They felt that taken as a package bids seemed reasonable. There was some discussion by the committee in selling #1 and #3 and if it was worth keeping #2. Hutchison stated that perhaps getting low bid on #2 but doesn’t seem sensible to sell two of the parcels and keeps one and doesn't think the City needs to be in that position and thinks citizens would prefer us to get out of it and make some money on it. Gershman and Kreun agreed and Kreun stated that for good PR to sell the property as they had stated they would do.

Glassheim moved to recommend to council that we accept bid prices to sell the land in Turtle River Township, Hutchison seconded the motion. Motion carried.

2, Discussion on change in committee date/time.
There was some discussion as to date and time of the committee meeting - Mr. Hoover noted that meetings were scheduled on the second and fourth Wednesdays at noon to accommodate Mr. Brooks' work schedule. There was some discussion re. meeting on Thursday at 4:00 p.m. during council week or on Tuesday at 4:00 during committee of the whole week. After some discussion the committee scheduled their meetings for 4:00 p.m. on Wednesday during first and third weeks of the month during council week.

Adjourn

Meeting adjourned at 4:30 p.m.

Alice Fontaine
City Clerk