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Council Minutes

PROCEEDINGS OF THE CITY COUNCIL

OF THE CITY OF GRAND FORKS, NORTH DAKOTA
April 6, 2000

The city council of the city of Grand Forks, North Dakota met in a special session in the council chambers in City Hall on Thursday, April 6, 2000 at the hour of 7:00 o’clock p.m. with Mayor Owens presiding. Present at roll call were Council Members Brooks, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner, Martinson - 14; absent: none.

Mayor Owens announced that anyone wishing to speak to any item may do so by being recognized prior to a vote being taken on the matter.

HOLD PUBLIC HEARING AND DETERMINE INSUFFICIENCY
OF PROTEST ON PAVING DISTRICT NO. 563, PROJECT NO. 5048

The public hearing on the determination of protest for Paving District No. 563, Project No. 5048, had been continued from the April 3, 2000 city council meeting, and was before the city council.

Scott Zainhofsky, project engineer, made a brief presentation on method used for calculation and verification of the sufficiency of protest; and showed map on the overhead of the assessment district showing majority of the residential areas that protested and showing majority of commercial areas that did not protest. He stated they took the assessor’s printout of these areas, put in spreadsheet along with the i.d. for each of those properties and totaled up the columns, and took those totals and determined the percentages for the protest.

Al Grasser, asst. city engineer, presented results of the calculations: that of the protests received of the non-residential areas had almost 3 million sq.ft. of protest which is 23.6%, that of the developed residential areas had about 3.3 million sq.ft. which is 89% of that area, and of the total district had 38.8% protest.

It was moved by Council Member Beyer and seconded by Council Member Hafner to declare an insufficiency of protest to the project. Carried 14 votes affirmative.

Council Member Beyer introduced the following resolution as to protests which was presented and read: Document No. 7951 - Resolution.

It was moved by Council Member Beyer and seconded by Council Member Hafner that as we found an insufficiency of protest against Paving District No. 563, Project No. 5048, that the resolution be and is hereby adopted. Carried 14 votes affirmative.

Mayor Owens stated that she and staff had been working on what would be a fair and equitable solution that would keep the promises that were made, that in the resolution of November 2, 1995 the mayor and city council told the residents of this city that the costs of the infrastructure associated with the Aurora would be between $5 and $7 million, and also made the promise that no costs for the installation of the infrastructure necessitated by the construction of the facility will be assessed to those residential properties currently platted and within the city limits, including the Johnson’s Additions and Birkholz Additions. She stated she would like to recommend that we do not put assessments on those properties that were platted, that it leaves a gap because some properties came into the city after that, and that a motion had been made that 35 cents would be the cost of a unit to honor the promise and continue to move forward with the rest of the motion, that this is a fair and equitable manner, and opened the matter for discussion.

The Committee of the Whole reported having considered the matter of special assessments for Project No. 5048, District No. 563, paving on South 42nd Street from University Avenue to 29th Avenue South, 11th Avenue South from South 40th Street to south 42nd Street, and on 17th Avenue South from South 35th Street to South 42nd Street, and recommended that we change the assessment to 35 cents per unit but on the Aurora Properties and the future assessment areas to allow us to pay up to the cost of 52 or 65 cents on those properties out of the Aurora funds, with the remainder from the Infrastructure Account.

It was moved by Council Member Hafner and seconded by Council Member Brooks that this recommendation be and is hereby approved.

Council Member Carpenter stated he agrees that currently platted and within the city limits were not to be assessed for 42nd Street, an unrelated to 17th Avenue South which would continue at the 35 cents per unit. Mayor Owens stated that everything else would remain the same, except the promise that was made in the resolution.

Council Member Babinchak moved an amendment to the motion that we pay the special assessments for South 42nd Street for the residential properties in Johnson’s and Birkholz’ Additions that were platted and currently within the city limits as of November 2, 1995. Council Member Beyer seconded the motion for the amendment.

Council Member Carpenter asked to be excused from voting on this matter. It was so moved by Council Member Babinchak and Klave. Carried 13 votes affirmative.

Council Member Polovitz suggested that perhaps they should start over and if can't find the money someplace else to expand the special district area, and not sure of impact of motion on the University; he asked impact of doing nothing, starting over, and wouldn’t be built this summer. Mayor Owens stated they would lose federal funding, which is over $3 million. Mr. Grasser stated that the DOT has a policy when they get to this phase of the project, there’s possibility that the DOT would remove funds, that in the past they have been very adamant to the cities that when commit to a project, they as a general policy will not rebid a project for 2 years because of effort and fact that the contractors have all their numbers on the table, and have bidding schedules made. Mr. Grasser made a comparison with Minnesota and 4th Avenue South, where similar type situation was bid, were going to special assess about 5% of the project and project was protested out and project never happened again. Mr. Grasser stated that the State made a commitment on these funds almost 2 years in advance, that the DOT expect engineering department to estimate down to the closest dollar even before the scope is defined, and that’s the way the system works and they control the dollars. He stated that several years ago the council changed the policy where on these classified streets they went halfway back to the next street so made an attempt to make those districts larger, this was sent back to the CIP committee to study that for the future.

The city auditor reviewed funding sources included in their motion before council, that the funding for the difference in costs for the Aurora property and for the future assessment areas are going to come from the Infrastructure Funds that were sold in the bond issue, that he researched the Aurora construction project and in that budget there was about a $3 million contingency. He stated in visiting with Dan Mehls, Mortenson Construction, and in looking at where contingency has been used they are still under budget but he believes contingency will be used up, now projecting about $8,000 under budget out of a $60 million project. He stated they looked at alternative sources and have about $2 million of excess sales tax in the General Fund which was considered being held to help pay for shortfall in FEMA reimbursements, etc. and have done some analysis on that at this point and probably talking shortfall of $800,000 to $1.5 million and that fund fairly well dried up. The cost of lowering the assessments to 35 cents amounts to approx. $810,000, and the action tonight will add about another $200,000 to that and the cost that we need to find in additional money over and above what was the assessment and off-site infrastructure portion of the bond sale is about $1 million, and felt that could be done and still leave us the availability of $500,000 to put towards the dike project per year as a debt service payment. He stated that after the year 2003 when several other bond issues are paid off will free some funding. and that’s source of what would use to pay for this.

Doug Christensen asked what the total project is and how much the citizens will have to pay. The city auditor stated it’s a $10.1 million project, $4.3 million is being assessed with approx. $2 million of that coming from the Aurora properties and the future assessment areas, and that part is being paid out of the bond issue from the Aurora, and citizens pick up $2.3 million in specials. The properties that are not going to get assessed anything at this point off of 42nd Street because they were platted and in the city limits, approx. 151 properties involved and the assessments against those properties are about $196,000, and also saving $810,000 from a previous action of the council to lower the per unit cost from 65 cents to 35 cents. The city auditor stated they were sourcing that from the infrastructure sales tax revenue.

Council Member Lucke stated he has a problem with the 17th Avenue S. assessments being as high as they are and that’s largely because they are constructing a road that’s a little higher grade than necessary because of the additional traffic, and his goal is to get this down even further, and asked what it would cost to lower those assessments to 30 cents. The city auditor stated that to exclude the Aurora and future assessments, probably talking about another $230,000. Council Member Lucke moved an amendment to lower the assessment to 30 cents per unit. It was noted there was another amendment and motion on the floor and would have to take care of that first.

Council Member Polovitz questioned why the City couldn’t extend the ¾% tax for the Aurora to off-set some of these costs. Mr. Swanson stated that the ¾% sales and use tax is dedicated to the construction, acquisition or leasing of a multi-use facility and related infrastructure; there is not a specific date as far as sunset provision, it will have to be terminated once you have accumulated sufficient funds to pay those bonds or those expenses, that as he understands it you have essentially allocated those funds for the full term of the bond. The city auditor stated they have done that and in order to extend it would have to sell additional bonds using those funds, that they have already issued a 30 year debt on this and would doubt you would get out into the market any further than that.

Don Olson, 3302 Belmont Road, stated that one of the property owners that he represents owns about 28 acres of farmland adjacent to 42nd Street on the west and it’s been farmland in a family farm since 1936; that it was farmland before Birkholz Addition and before Johnson’s Addition were platted, with the exception of the front 50 ft. the remaining 27 acres or 28 acres are in a tapping zone, tapping zones aren’t in the assessment district so they have no way to protest yet that land is going to be assessed at 35 cents on the west side of 42nd Street but the property on the east side of 42nd is not going to be assessed. He stated it doesn’t seem fair to be in the assessment district with tapping areas included in having to pay an assessment but not having the property included for purposes of determining volume of land to reach the 51% to stop a project, and are in a situation where they can’t do anything about it.

Council Member Hafner stated this is an issue between unannexed and annexed lands, that unannexed land could remain unannexed for the next 10 or 15 years and not pay anything and the rest of the citizens of Grand Forks will be paying that assessment. Mr. Grasser stated that there is substantial property on the west side of 42nd that’s outside the city limits, and that this is a future assessment district. Mr. Swanson stated that is not a tapping fee area but a future assessment area, distinction between the two is that a future assessment area the amount to be paid depreciates so it reduces in accordance with the depreciation schedule or life of a project, whereas the tapping fee is a set fee to be paid upon development; and if the property owner chooses not to develop and not to move forward with development of the property they could avoid the entire future assessment but not necessarily true of a tapping fee.

Mr. Grasser stated that the thickness and the design criteria of 17th Avenue South are based on primarily the existing conditions that are out there because of the soft sub-grades we need to have a certain amount of grade and concrete, that any kind of classified street will carry over its 20-year design life a certain amount of traffic, mostly irrespective of what the adjacent properties are because a lot of the traffic is through traffic, a lot of it is trucks.

Council Member Lucke questioned if 11th Avenue South was only 21 cents per unit; Mr. Grasser stated because that doesn’t have any of the sub-grade support and is very short section and almost qualifies as a local street, the traffic projections are so low on that street. Council Member Hafner stated that the traffic associated with the Aurora events is actually a small percentage of total traffic that will happen to 17th or 42nd, events themselves do not create that much traffic. Mr. Grasser stated that pavement is designed based on vehicle loads, your heavy loads come from trucks and buses, and that’s why you see local residential streets are usually 6 inches concrete flat on the grade, and that’s what 11th is because it’s not projected to take truck traffic, no place for trucks to travel on that road, 42nd Street is going to be a connection from area north of Gateway Drive south into the Oppidan development, and there’s a certain expectation of traffic loads, be on a bus route , going to be on those types of things and that’s what really triggers the design of the street.

A resident of the area questioned why they were allowing trucks on this road, there’s a school on this road and why paying to accommodate trucks. Mr. Grasser stated that if trucks have a designation they are allowed to haul on those routes even though signed as no trucks, and another thing that impacts traffic are the buses and there is a school and they are running school routes up and down those streets and still need to handle heavier duty trucks, garbage trucks, cement trucks, etc. Mr. Swanson stated that the no truck sign refers that it is not a designated truck route and that does not preclude trucks from accessing the area either to go to or from a destination.

Terry Swenson, 3934 15th Avenue South, asked how many people were platted after the resolution, if any, because it’s stated that the residents of those two subdivisions would not be asked to pay for 42nd Street, that they built their house in 1998 and knows several other people are in the same situation, and doesn’t think it would be fair to make the people who came in after into the same area to pay, and should be reconsidered.

Mayor Owens stated that in the resolution that it was the intent of the current city council that no costs for the installation of the infrastructure necessitated by the construction of the facility will be assessed to those residential properties currently platted and within the city limits.

Jeremy Davis, 131 Conklin, general counsel for the University of North Dakota, asked that if the motion passes aren’t we essentially changing the assessment district and if we would have to start over. Mr. Swanson stated that the district is not at issue whatsoever, the motion actually provides for the spreading of the assessments but that the City will use the additional funds to pay off those assessments for the properties that were platted. He stated there were no changes to the district boundaries. He stated that the assessments are not known at this point, the preliminary opinion by the Commission is that there may be some areas that are reserved for future assessment, and that may or may not be final decision by the Commission, any property within the district may be subject to assessment and the motion tonight has nothing to do with the district. Mr. Davis stated that certain properties will be assessed at nothing which essentially means that they are out of the district; Mr. Swanson disagreed, and that the district boundaries are not being changed and the motion provides that the assessment will actually go on but they will be paid by the City, not being removed from the District.

Upon call for the question on the amendment and upon voice vote, the motion carried 13 votes affirmative; Council Member Carpenter abstaining.

Council Member Lucke moved an amendment to substitute the no more than 35 cents to substitute no more than 30 cents for that. Council Member Lunak seconded the motion.

Council Member Carpenter asked to be excused from voting on this matter, and it was so moved by Council Members Beyer and Babinchak. Carried 13 votes affirmative.

The following individuals spoke in opposition to the project:
Ben Trapnell, 1806 South 38th Street
John Duerre, 3614 20th Avenue South
Dave Allard, 2550 South 38th Street
Angela Sullivan, 3934 15th Avenue South

Doug Christensen stated they don’t have to make this decision tonight and suggested that this is a prime example of whether we should consider the policy of how they fund major arterials in this city, that this will become a major arterial, that council has caused a lot of concern for these people in that area, and that it seems to him that the City could start over, could redefine the special assessment district, that there is a guiding principle - that all the citizens have paid for a road in front of their house and halfway on either side; and someone should clarify it for the citizens so they know because in addition to the protesting citizens you’re acting for the city as a whole and the rest of the citizens want to be able to figure out what council is doing.

COUNCIL MEMBER BOULEY EXCUSED

Duane Espegard, 3649 Lynwood Circle, stated he believes people have to pay for streets and supports Council Member Lucke’s amendment to the motion, and that he could make argument that 17th is part of that plot of ground too and asked that they look at it, and move this on.

Ted Black, 1717 South 35th Street, stated that according to his calculations there are 19 property owner that have already paid for a portion of 17th Avenue South when it was constructed from Columbia to 35th and hasn’t heard any discussion relative to that. Council Member Hafner stated that he talked with Mr. Black this morning and tried to reassure him that if there are discrepancies and that if some of these properties have already been assessed for 17th, that council will do what is necessary to make sure they are not double assessed and find proper mechanism to do that. The city auditor reported that the review of that by the Special Assessment Commission is their preliminary review and we have spoken with the individuals in this area and have told them we will take this back to the Special Assessment Commission for their review, and property owners notified.

Upon call for the question on the amendment and upon roll call vote, the following voted “aye”: Council Members Lunak, Martinson, Brooks, Polovitz, Lucke, Hamerlik - 6; voting “nay”: Council Members Glassheim, Klave, Beyer, Babinchak, Bakken, Hafner - 6; Council Member Carpenter abstaining. Mayor Owens voted to break the tie, voted against the motion, and the motion failed.

It was then moved by Council Member Hamerlik to move from 35 cents per unit to 32 cents per unit. The amendment was seconded by Council Member Brooks.

Council Member Carpenter asked to be excused from voting on this matter; and it was moved by Council Members Hafner and Hamerlik. Carried 12 votes affirmative.

Upon roll call the following voted “aye”: Council Members Lunak, Klave, Babinchak, Bakken, Hafner, Martinson, Brooks, Polovitz, Lucke, Hamerlik, Glassheim - 11; voting “nay”: Council Member Beyer - 1;
Council Member Carpenter abstaining.

Council Member Polovitz asked if this could be held and have time to digest this and talk to the DOT to see if we have any flexibility, and reconvene in one week.

Mayor Owens stated that she thinks this is a good compromise; and asked that they understand that this has to fit within the budget; and that if there was anything drastic that should happen, that she has 10 days to veto, and that she would go to the council before doing anything.

Upon call for the question and upon roll call vote, the following voted “aye”: Council Members Brooks, Polovitz, Lucke, Hamerlik, Glassheim, Lunak, Klave, Beyer, Babinchak, Bakken, Hafner - 11; voting “nay”: Council Member Martinson - 1; Council Member Carpenter abstaining.

Mr. Swanson stated that part of the funding for the additional payments of the unit cost down to 32 cents involves in part use of bonded proceeds, and it is his recommendation that you make a factual finding that the amounts to be used to reduce the per unit charges to be paid by the City is attributable to increased costs of The Aurora infrastructure.

It was moved by Council Member Beyer and seconded y Council Member Babinchak to make a factual finding that the funds we are using to buy down the cost per unit to 32 cents is due to or attributable to the infrastructure costs for the Aurora. Carried 12 votes affirmative; Council Member Carpenter abstaining.

Council Member Hafner stated that we have to get information to the public so they understand fully what the council has done, either through the Public Information Office or through the private media, and would hope they take the time to investigate and write clearly and concisely what the council has done.

ADJOURN

It was moved by Council Member Hamerlik and seconded by Council Member Babinchak that we do now adjourn. Carried 13 votes affirmative.

Respectfully submitted,

John M. Schmisek
City Auditor

Approved:
__________________________________
Patricia A. Owens, Mayor