Council Minutes

MINUTES - COMMITTEE OF THE WHOLE

Monday, June 25, 2001

The city council met as the Committee of the Whole on Monday, June 25, 2001 at 7:00 p.m. in the council chambers in City Hall with Vice President Martinson presiding. Present at roll call were Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Klave, Kerian, Kreun, Martinson - 10; absent: Council Members Gershman, Lunak, Bakken - 3.

Vice President Martinson announced that when addressing the committee to please come forward to use the microphone for the record, and advised that the meeting is being televised. He also stated that no action will be taken tonight and items referred to staff for follow-up and report.

2.1 Economic Development Commission presentation.
John Snustad, chairman of the Grand Forks Region Economic Development Board of Directors, stated they wanted to give a brief overview of presentation, introduce their staff and that Mr. Krauseneck will go through the operational plan that was received in the mail; that their vice chairman Karl Bollingberg from Alerus Financial who will be next year’s chairman will discuss some of their funding and needs for the future and answer any questions at the end of the presentation.

COUNCIL MEMBER CHRISTENSEN REPORTED PRESENT

Mr. Snustad stated that the Grand Forks Region Economic Development Foundation formed in 1967 by volunteers and city staff until 1988 when a new corporation was formed, that throughout this period the City has donated money and private sector came in as a major sponsor and been building that over the last three years; County was also added on. He stated in 1989 they tried to increase their involvement with the city council and added mayor and his/her designee (Doug Christensen serves in that capacity right now) and also JDA president, and are trying to stay in close contact with the City. He stated in 1998 they started trying to figure out how to get better jobs to this community and how to grow our economy.

Mr. Krauseneck reviewed the operational plan - and gave status or update in terms of where they are at, that they see partnership with City as vital. He started by explaining distinction between plan and an approach, they put in place a strategic plan when he first started and as a part of that plan they created a mission statement and a set of guiding values and were developed in working with members of the city council, their board and regional advisory group - that it’s a very comprehensive plan and that this is their mission (expansion and diversification mission) and as subset of this mission, job creation and activities associated with economic development are a part of this but should focus on economic foundation and base and an increase in standard of living, which leads to their two specific goals - 1) looking for population increase to 60,000 from 50,000 at the present date by 2010, 2) based on income and that starts with business incomes and profitability and margin and transfers to households that can cash flow and to wage and income levels and consequence of trying to go from our present position of approx. $24,000 per capita (Fargo, $28,000) and others we would be comparing ourselves to would be around the Fargo percentage - that’s an aggressive target but think it’s realistic based on a systematic approach to development. He stated they have a strategy that addresses three areas: 1) retention and expansion - not always employment driven nor physical plant expansions but capital equipment and training expansions to lead to higher business income levels and wage or professional rate; 2) recruitment - build on with joint ventures and partnerships in approach to marketing companies with better leverage city involvement; and 3) an approach - need to be that entity that looks at securing non-city resources, both of public and private nature to facilitate deals and expansion - like to see as facilitating private financing wherever possible and a maximum position for private credit instruments.


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Growing the Base: He stated they are talking about 5 different areas, classic startups and expansions, have numerous projects now on the expansion side (LM Glassfibre in staging their plans for a North American expansion, we’ve refinanced their existing position and working with them on labor issues and master planning their expansion and have options in place; that they’re working with some smaller ones in terms of their expansion issues. Start-ups - working with the UND spinoff side but other potential grounds and venues; they work with the engineering and chemistry department on IP and electrical property plays and working with the City wastewater division for hydrogen sulfide detector.

He also reviewed technology transfer: spinout corporate technologies into the University and create a joint venture or into University into EERC, which they have been working on in a clean coal technology.

Work Force Development: this is in area of training and we are part of the new growing quadrant, State has moved towards four quadrants to integrate workforce development along with Job Service in the higher ed system, and partnership with Economic Development Corp. in this region and this allows for an outreach approach to the companies.

Corporate support services: Grand Forks extremely well positioned for right couple projects where a major employer could move into town and we would have to put far less of local incentives in than other communities to make that project work based on our comparative advantage - there would still be a significant requirement for those incentives but great efficiencies though and we have present proposals out for two other major corporations using existing space in town, vacated or newly redeveloped, in many cases greenfield locations

Health Care and Medical Research: we have 3 high end medical manufacturer clients working with, one in California and 2 new ones.
Software Development: Ancept, started working with them about year and half ago and they are downtown in leased space, expect to be at 50 employees within another 2 years with an average salary of over $50,000, they developed software platforms but also service those platforms, early startup company that’s cash flowing off their service revenues and sustaining some of their own development.

Customers & Vendors: example: work with company and when make calls on their behalf also representing the community in terms of some of their corporate partners
Tools/Process; - we have comprehensive communication plan, focused on market niche where represent the community externally, have had some instances where run advertisements and have gotten several bumps out of those materials or partnerships.
Partnership & Collaboration - working progressively proactively into someone’s business model based on referral or our own initiative and have better filtering of deals and better leverage in finances.

He stated they have tried to be a transparent organization and web is full of probably over 150 active files and have rigorous labor information that helps make the case to companies. The web is central to everything they do and increasingly so.
Regional Sites: when talk about Grand Forks locations, we have them look at downtown, midtown (like Sears), greenfield, Industrial Park and have distribution center site in play and a couple proposals.

Regional because Larimore, Grafton. Example of Activities: Ancept, Paragon, Meridian, recent expansions - closely involved with Spanish in a Michigan company where competing for a contract. Local Development Support and Initiatives: Telecommunications is important and been involved in that; water management - that whatever they are doing to help secure the future long term and gives them cost effective security for this community
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Funding: the importance of public/private partnership - the increasing private involvement is contingent upon a strong City commitment -

Population growth: there’s no shortcut We have everything going for us in terms of operating aggressively, and glad Dr. Kupchella announced increase in enrollment because that’s not only quantity but also grad school faculty, increased emphasis on research, more opportunities to partner with UND as one of their main engines in growth..

Carl Bollingberg with Alerus Financial, touched briefly on funding sources - three areas they draw from to cover the administrative costs associated with running the EDC - the commitment from the City has always been about $165,000, private sources increasing and bringing City’s percentage of total cost down. He stated that over the past year Alerus Financial doubled their commitment to the EDC because confidence in the staff and think model they have is right one and will be successful and want to be a part of that. Future needs: 1) hope that will have 500 private sector members over next 10 years (now 110), 2) increase in staff at EDC , 3) would like to see the Growth Fund get 33% of the sales tax dollars that get generated vs. 22%, that over the course of the next 5 years there are deals that need to be funded and need those funds to put deals together.

There were questions from the city council.

Council Member Kreun questioned that City has done some studies and if we are under-employed or over-qualified so still have that qualified labor force. Mr. Krauseneck stated when look at economic circumstance, have tremendous under employment and lot of opportunity for companies as migrate to higher end business models and assist them with expansions or bring in new employers, there’s a ready workforce to move into those positions with training, some without training as under-employed and can move into those positions. Council Member Kreun stated we still have a high quality highly educated labor force available in the community. Mr. Krauseneck stated that’s where the labor survey data helps.

Council Member Burke stated there’s been some discussion about the City withholding its contribution to the EDC and the funding was not part of the Mayor’s initial budget presentation and some people feel that would be appropriate based on balances in your accounts - consequence if not get an appropriation from the City. Mr. Krauseneck stated he feels there was a misunderstanding in terms of what EDC had in balance and what balance required for - they have balance of approx. $400,000, and would like to have between 6 and 8 months operating reserve for continuity and financial health; are an early stage deal-making soft money consultant providing, and 3) if need to move quickly on early options or transactions before coming publicly through the JDA on a company’s behalf and on community’s behalf and needs to be a reserve, and 4) that as a loss reserve and as a reserve in case have trouble.

Council Member Glassheim asked if they have any income from managing the industrial properties. Mr. Krauseneck stated they are in a pass-through, revenue neutral, that there are time when he thinks should look at revenue and have been able to go out and secure some additional grant or matching revenues on a discretionary basis. He stated they try to do events as part of their service; that they don’t charge services as their staff cost is already fixed. Council Member Glassheim stated one way to grow the city, both population and job wise, is through larger companies expanding or bringing some in, and Center for Innovation has been involved with quite a few assisting a lot of startup people, and is that something that should be part of the City’s overall economic development plan and some kind of relationship between City and Center for Innovation attempting to get the smaller entrepreneurs into business or does EDC work with that. Mr. Krauseneck stated there is a mutual working relationship - there is a larger question, the UND has been going through a comprehensive plan, and involved in looking for a vice president of
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research. They’re close to the University having a rationalized approach so there’s enrollment, promotion issues, work going on at the Center, basic research, commercialization and thinks he would have a counterpart at some point where look at intelligently at a comprehensive University relationship and Center would be a part of that.

Council Member Brooks asked if we have the financial resources to meet those goals. Mr. Krauseneck stated on the expansion side, could probably use those resources up in a year and have other projects that are higher end financial service - worried about that and that’s why the 33% is important. He stated they are nervous about trend on amount of money available, because they could bring within next four months $4 million of local requirements for deals. He stated they are trying to use all the private and public property and put that on the table as opposed to just incentives.

Council Member Glassheim asked 1) that this enterprise sold to City as a 50-50% partnership and pleased that the private sector is now coming up towards its promise, was sold as private sector path to demonstrate that people in business had confidence and faith in the operation and public sector to demonstrate that the public would support the private sector in their activities; 2) that the City’s position has been whatever we appropriate during budget process, that it has been his impression over the past two years there has been a number of deals, maybe laying the groundwork for big things coming down the pipe, and do have a significant carryover in this year’s Growth Fund budget, to bring us some really good deals and whole general public and people of Grand Forks will be pleased to put money into jobs being created and population growing, and City will know a good thing when they see it and support good reasonable but productive deals that are brought to us. Mr. Krauseneck stated they’ve possibly erred on the side of communication or promotion, not always Growth Fund dollars that are required on the table,
and try to make more of a concerted effort at communications to talk about the 100 jobs here, 50 here, and when add up 250 where there isn’t a Growth Fund deal.

Vice President Martinson thanked EDC for presentation and comments.

2.2 Task force on population decline in Grand Forks.
Council Member Glassheim reviewed the insert prepared re. this item and stated that his motion for next week would be to request the mayor to appoint a task force on increasing the population with special emphasis on ages 20 to 34.

He stated the problem is that between 1990 and 2000 the population loss was 5,300 people in that age group, and without a plan for focusing resources to replace those lost residents, Grand Forks faces declining public school enrollment, loss of generation of workers and civic leaders and declining services or rising costs for services. He stated the purpose of the task force will be to gather suggestions at public meetings from leaders, general public and members of that age group for actions that can and should be taken by various public bodies and making recommendations re. actions to be taken. He stated he has been questioned why another study group, when the answer is just to raise salaries, that he is interested in the study for thought and action, and would hope the task force would be short lived and recommendation focused - and report back to council by September 15 and that task force be dissolved. He suggested several meetings for discussion and 2 to 3 meetings to discus recommendations to the council. He suggested membership (11 to 13 members) to include representatives from council, county commission, Park District UND, School District, new Knight board, vastlane.org group, EDC, labor, Chamber of Commerce and people from general public. He stated he has received packet from young people with suggestions and comments about what they would like and need to be productive in Grand Forks.


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He stated reasons why council involved in this - that council has been working toward less involvement in details in order to discuss policy; 2) control sales tax funds which are spent on economic development, 3) council controls laws relating to building codes, property tax subsidies that may impact affordable
housing, control rental rehab. dollars, have bonding authority, control laws and enforcement of laws which may impact city’s attractiveness, council controls services and level of services; council controls local and federal funds which support cultural, artistic and social future activities, impact on next generation if increase or decrease; Park District has outstanding recreational programs, the council will decide what additional recreational opportunities the city should sponsor in the greenway, and whether this matters in retaining and attracting the next generation. He stated if anyone has amendments or discussion, debate he would be happy to hear comments to the idea of a task force.

Ross Weiler, 701 North 3rd Street, stated this is an alarming thing to see the population decline as it has in the last few years in Grand Forks, that a decline and an increase in population does not threaten a community but this large of a decline is significant harbinger of problems and wise to have a task force developed to look at this - the biggest issue brought up is standard of living, quality of life, and wanted to speak to the quality of living and definite need for younger people as well as entire population of Grand Forks to have a sense of hope that they have a future and possibilities to advance themselves in this community - that the thing the Midwest is known for is the friendliness, the quality of life, and this is the thing that makes Grand Forks a good community and if market and develop our economy, our work force is such that we need to keep this perception that Grand Forks is a user friendly, citizen friendly involved community - and other part is one thing we’re missing is that it is not just our view, there are a lot of senior citizens who leave this community with all of their resources, experience and these people are critical to this community and they are leaving and we are losing resource, knowledge, potential of these people to be part of this community - these people are very important to our community. He stated one thing he would like to see as part of this task force would be something to possibly get younger children who don’t have nearby grandparents involved with older citizens so don’t just have fun/entertainment , that what it’s about is connectedness to the people - old, young, in between and feeling of hope and some kind of power and actually have an opportunity to advance and make a better life for yourself in this community - and would like to participate in any kind of task force on this.

There were no comments from the council

2.3 Budget amendment ($16,000, new 2001 revenue) and grant agreement with Tri-Valley Opportunity
Council for Child Care Resource and Referral Services--___________________________________
Don Shields, Health Department, reviewed the budget amendment and stated this is one of a number of grants that will come before council, grant runs from July 1 through June 30, and is a $16,000 increase in grant (similar grant as received last year and before) to continue to provide education and training services for child care providers in the community - there is also a grant agreement for approval.
He stated that Tri-Valley choose Grand Forks Public Health Department as recipient and they’ve been in collaborative arrangement to provide this set of health and safety training and education for three years. He noted that $16,000 is budget this year and the other $8,000 will be included in the proposed budget for 2002; that there is a requirement through the Child Care Community to receive so much training and education and that will be provided; and was not sure whether available for profit, is available for non-profit and will get back with answer. He also noted that there is no matching with City funds - strictly state and federal dollars.

2.4 Plans and specifications for City Project No. 5256, District No. 88 - Street Improvements for 24th
Avenue North.___________________________________________________________________

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Al Grasser stated this is the next step in the assessment process, approving plans and specs. He stated he sent letter to Mr. Senske re. his concerns but hasn’t heard anything back from his or other property owners.

2.5 Special assessment district for City Project No. 5262, District No. 581, paving Mighty Acres
Second Addition Phase II.______________________________________________________
Mr. Grasser stated this is request from local developer asking that the City do the paving, their proposal is to do the underground themselves (sewer, storm sewer and water) and that counts for the 50% up-front money requirements and this would create the district.

2.6 Change order for Project No. 5053, Metro Transit Center, electrical contract.
Roger Foster stated the change order for $9,000 for a transformer to be put on the site is a first-time event. Jim Galloway, Johnson Laffen Architects, stated there shouldn’t be any problem with the Corporate Center and the reason this came up as an issue is that in the previous 10 years, NSP has always provided a transformer for the project and never been a cost, and with Xcel it’s a company policy that they charge for the transformers, they tried to find a way of lessening that cost, there is a panel in the parking ramp which is sized greater than it needs to be and the $6,000 would be for a sub-panel added there so that it could be metered, billed separately and totally independent. It was noted that if the City sells the Corporate Center, we still have to have access to that area, should be accessible.

2.7 Amendment of the Joint Paratransit Plan.
Mr. Foster stated this is a requirement after a long period of review, in trying to get City to the point where it can purchase anything other than large vehicles and is an important step and been involved in with the MPO for a long period of time. He stated they conducted a public hearing to amend the joint paratransit plan and the minutes should cover the reason and result of that public hearing. Council Member Brooks stated we’ve modified our plan so can buy a trolley. Mr. Foster stated they’ve modified our plan so can buy any particular vehicle other than what was specified in the joint paratransit plan, and is a double benefit, purpose and need of this particular vehicle, but also opens up the avenue for us to look at other opportunities that have been voiced by council members on what we can purchase. Council Member Hamerlik stated it’s important to also note that there’ve been some changes, and trolley now held for us - that we could have it in operation by the first of September.

Council Member Burke asked if MPO has to sign off on this even though this will be a vehicle that will be used only on this side of the river. Mr. Foster stated they will, because the MPO is responsible for approving this and it has already gone through the MPO executive board as well as the technical review board and passed unanimously at both - and has to go to city council in Grand Forks. Council Member Bjerke stated we can get any type of vehicle including smaller as in people mover types as long as ADA accessible; Mr. Foster stated that was correct.

2.8 Approval of Chamber of Commerce curling tour event plan.
Council Member Hamerlik stated he thought we had passed on this, set the money aside, pending submittal to the original committee to pass on it, and if that be incorrect, maybe we don’t have to vote on Monday. Council Member Christensen stated this was not to come back to us if they had their plan done by June 30 it was over, funded, etc. Terry Hanson, Urban Development, stated what was directed in the minutes was for the plan to come back to the original committee that reviewed all the projects to the council, and when trying to establish a meeting of the original committee, it was suggested by the committee members that this be an action of the council and go directly to the council and that is why on the agenda tonight for approval next week.

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2.9 Gaming site authorization for Greater Grand Forks Convention and Visitors Bureau.
No comments.

2.10 Liquor license for Giovani’s of Grand Forks.
It was noted licenses run on a calendar year basis and all come for renewal the first of the year.

2.11 Transient merchant license exemption - Summerthing for Kids.
Mr. Swanson stated the transient merchant license is issued to the merchant, dependent upon type of activity but a daily permit they could acquire, request is for Summerthing for Kids and have that same type of request for Arts in the Park and other summertime activities to waive those fees to encourage vendors or participants to appear at those events. Council Member Christensen asked if vendors in Farmers Market paying. Council Member Hamerlik stated we been discussing reducing action by the council, if doing this all the time, why shouldn’t have this on our administrative staff to do this, and would like Mr. Duquette to review that because doesn’t seem that it would have to go to council. Mr. Swanson reported that the annual fee would be a max. of $300 for any one merchant, could buy a daily fee or pay an annual fee.

2.12 Approval of Grand Forks Renaissance Zone Project.
Mr. Potter stated this is an action that the staff is presenting for approval on the second renaissance zone project, the applicant is the Skin and Bodywork Institute, Inc., the propose to lease 6,534 sq.ft. of commercial space at 12 South 4th Street, and will operate as a school of massage as defined and regulated by State law; thee applicant meets the evaluation criteria as established in the Grand Forks Renaissance Zone Development Plan. Council Member Kerian asked if this business fits with other retail businesses looking into for additional traffic - this is both education and retail facility. Tamara Hennessey, 27 Sandy Hill Lane, stated this is clinic and drawing new people into community for service, etc. and retail center - Unique Impressions.

2.13 Local support letter for low income housing tax credits for Metro Plains Development.
Terry Hanson, Urban Development, stated this is a requirement and asked that the committee convene as city council and that there is also another item on the agenda - lease agreement between L.T.D. Properties for space in the J.C. Penney building on South 3rd Street. Council Member Hamerlik stated he has number of questions on these items.

Joy Bostrom, 2304 South 36th Street, stated they live directly across the street from northeast quadrant of 24th Avenue South and South 36th Street, and that they have concerns about MetroPlains Development plan to approve build a 38-unit apartment building at this location; when purchased the property it was owned by a church; area is residential with several twin homes; and are concerned with property value decrease. and asked council not to grant support for MetroPlains.

Mr. Hanson reviewed requirements, that applicant for tax credits needs letter of support as part of his application to the State.

After further discussion it was noted by Council Member Brooks that this will go on the agenda next week, that MetroPlains and neighbors meet re. the matter; and if need to defer it can be done next week.

2.14 Lease agreement between L.T.D. Properties, Inc. and Kim and Matt McKee for space in
J.C.Penney building on South 3rd Street._______________________________________
Mr. Duquette stated there is a time factor, lease requires city council approval and wants entrance next week, brought in so could put on city council agenda. Dan Samson, 100 North 3rd Street, L.T.D.
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Properties, stated tenant needs to be in building by July 1; needs to be approved by the city council; details are in lease and renter been in business for many years; noted that this property is only one that requires approval by the city council. In answer to Council Member Burke’s question, Mr. Hanson stated approval is a requirement in the purchase and grant agreement - money allocated to businesses on South 3rd Street without any tenants, others had to have tenants before funding authorized and future leases were to be brought back to city council for approval.

After further discussion Council Member Hamerlik suggested that we call a special meeting on Wednesday evening prior to the budget meeting, Council Member Christensen agreed. Mr. Samson stated that the tenant was in a hurry and that his building was only one required to request council approval. Council Member Hamerlik withdrew his suggestion. Council Members Christensen and Brooks called for a special meeting of the city council to be held on Wednesday, June 27, 2001 at 6:50 p.m.

ADMINISTRATIVE COORDINATOR COMMENTS

4.1 Information regarding Clearwell/Pump Station and associated transmission lines and potential
implications for planned new water treatment facility.________________________________
4.2 Landfill siting update.
Mr. Duquette reported updates were included in the binder relative to these items.

MAYOR AND COUNCIL MEMBER COMMENTS

5.1 Council Member Brooks stated he had talked to Mark Walker to go out and meet with businesses and discuss sidewalk and Mr. Walker brought up those points, and noted no street lights and will meet with those business and mobile home park - street lights bigger safety issue.

5.2 Council Member Kreun commented re. sidewalks - need to adhere to ordinances and should have sidewalks there.

5.3 Vice President Martinson reported that Council Member Lunak is at home and doing well and looking forward to coming back. Mr. Martinson thanked staff and audience.

ADJOURN

It was moved by Council Member Glassheim and seconded by Council Member Hamerlik that we do now adjourn. Carried 11 votes affirmative.

Respectfully submitted,


Saroj Jerath
Deputy City Auditor