Council Minutes

Minutes

Committee of the Whole - November 26, 2001 - 7:00 p.m.

The City Council met as the Committee of the Whole on Monday, November 26, 2001 at 7:00 p.m. in Council Chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Gershman, Glassheim, Burke, Hamerlik, Stevens, Bjerke, Brooks, Martinson, Kreun, Bakken, Kerian, Klave and Lunak – (13); Council Member Glassheim participated on the phone; absent: Council Member Christensen (1).

Mayor Brown announced that when addressing the committee, please come forward to use the micro-phone for the record, and advised that the meeting is being televised live and taped for later broadcast.

Mayor Brown congratulated the UND Football team on their most recent victory and wished them good luck in their next game at the Alerus on Saturday. He said we are excited that Dave Barry will visit on January 22-24 and asked that ideas to enhance Mr. Barry’s stay be sent to the Chamber or the Herald. He welcomed Garrison Keillor to the Chester Fritz on December 8.

Mayor Brown announced that Mr. Kreun, Mr. Burke and Mr. Christensen have expressed interest to be named to the group to study redistricting. He further announced that Mr. Klave, Mr. Brooks and Mr. Bjerke have expressed interest in the group to study the seven-member Council. He said with regard to the wage study, Mr. Stevens has asked to be added to the group and the employees would like another representative, so that will be considered at the next Council meeting.

Mayor Brown said we have to discuss the December City Council schedule – considering the City Council meeting on December 17, no meeting on December 24, and a Committee of the Whole meeting on January 2 and then resume the regular schedule for City Council on January 7.

Mr. Schmisek said the Mayor has asked him to address the information regarding the potential for increased costs in the dike project. He said a number has been brought forward by the COE and our goal is to talk about the issue and try to bring some calmness to it – the Engineering Department and consultants have questioned some of the costs – we are not tying those numbers to a real hard analysis at this point. He said to keep in mind that the COE had built in some increases so there is the potential for some additional share – we need to wait for the Engineering Department and the COE to finalize and come up with a more firm number before we try to determine where the money will come from – we would be dealing with a number we are unsure of and we think it can be brought down to a lesser number. He said he wants to put some rest to the fear and anxiety that has developed. Mr. Schmisek said staff will continue to strive to minimize the impact to the taxpayers.

Council Member Martinson said when the article broke in the Herald his phone rang off the hook – he didn’t know about any increased dike costs. He said as a Council we have every right to know what is going on – the Leadership Team is fine, but this Council deserves to know, good, bad or indifferent – said he was very embarrassed. Mayor Brown said Mr. Grasser addressed the Council on October 21 that there was an unconfirmed increase in the projection of cost but they were unsubstantiated. Council Member Martinson said we still should have known. Mayor Brown said we were briefed on October 21. Mr. Grasser said he doesn’t know the exact date of the meeting with the COE where they started doing some preliminary estimates of projections of costs - the numbers don’t look quite right - tried to formulate questions and those have been sent to the COE - have not gotten answers back. He said we have a series of numbers but question whether some of the numbers are right and in the right categories. Mayor Brown said the projected updates are routine – we get this information all the time and they are updating their projections and then we go back and discuss it with them. Council Member Martinson said his point is that the Council should be informed if it is going up or going down - just a memo out of the committee or Mayor’s office so we can speak intelligently when we get phone calls.
Council Member Brooks said he is interested in finances and said we really don’t know that there is an increase yet. He said the real issue is that we didn’t get these figures before - we sat here and voted on one foot on the floodwalls and medallions and we did not know that we were talking about the possibility of increase in cost – the Leadership Group knew those figures and voted for the increased costs knowing that there was a possibility that we would run into additional costs - that is not right - we should have had that same information. He added that this is what the fine-tuning of the structure of this Council is all about. Council Member Lunak said part of the problem is we will never know how much this will cost and some knew way ahead of the rest of the Council – this committee is supposed to be a liaison between the COE and the Council.

Council Member Gershman said it is obvious that there are some hurt feelings and some disappointment and he apologized for the Leadership Team not presenting the numbers. He said the reason was that they thought and he still thinks that we are doing the right thing in the sense that when the engineers heard the numbers, they questioned the assumptions that the COE based their figures on and directly questioned some of the numbers. He said their decision was do we take information that was challenged heavily by the engineering team, bring it forward to the Council and public before we knew that the figures were right or wrong. He said this is actually causing what the team was concerned about – possibly undue concern by the citizens if the numbers are not correct – that was the reasoning behind it - there is no sense among anyone on the Leadership Team to hold information - this is information that was not pleasant to get and we needed to try to get to the bottom of it – this is not a conspiracy - an attempt to get the number firmer before coming forward. Council Member Burke said some Council members and staff had the information before we had the vote on the floodwall heights - even if the COE’s numbers are wrong, the estimates won’t go down – even if they go up half of what they said, the bulk of the increase will go to the taxpayer and it’s not a trivial amount of money - if there is concern it is not undue - if the public is concerned it ought to influence how we vote on things.

In response to Council Member Burke, Council Member Kreun said he is a part of the Leadership Team involved in the discussion. He said Council Member Burke has taken the raw numbers and has not considered the contingency portion of the dike funding and the other parts too and this is exactly what we knew would happen – hit the headlines, make a big deal of it and we don’t have the numbers to make a good judgment - we are falling right into the trap of sensationalism. Council Member Lunak said we have a responsibility to know – all this could have been prevented.

Council Member Martinson asked if Council will have an opportunity to revisit the floodwall issue. Mayor Brown said that if it is not built he assumes it can be discussed. Mr. Grasser said final comments are due now to the COE – they will incorporate those into the design and bid – will typically not recoup all the savings if you come back after it is bid. He said estimates for the floodwall are not hard numbers – only 10% of the project has been bid thus far – has no confidence in floodwall costs until Phase 2 is bid – the farther we go along the more comfort we will have. Council Member Martinson said he would like to see a briefing when the COE, staff and Leadership Team meets again so the entire Council can get a heads up – we owe that to our constituency. Mayor Brown responded that they can watch the briefing on television too. Council Member Kerian said the citizens will survive this discussion and would equally have survived it had it been a little earlier and that the city had provided some of the message – maybe the information causes a lot of concern, but this issue causes concern as well.

Council Member Kreun said the information is not available today – the constituents should know it, but they have to have accurate information - inaccurate information compounds the problem. He explained some of the engineering fees and said numbers get thrown around that are not accurate - we want to make sure they have meaning and are accurate – information was given out as generalities – that is the only reason behind it – we don’t have to continue scaring people until we get the accurate information. Council Member Bakken said he explained to the people he talked with that the numbers are not concrete – they will be fluid - won’t know the exact dollar amount until the project done. He said he thinks when construction dies down bids might come in better – after talking to people they understood it and not one wants to give up on having a project - all feel it is worthwhile doing and are willing to pay extra. Council Member Brooks said the accurate information they needed was that there was going to be a significant increase and thanked the Herald for bringing it up. In response to Mr. Council Member Brooks’ question about reconsideration, Mr. Swanson said the procedural motion to reconsider would not be available to you unless brought forward in the meeting following the action. He said there are other procedural techniques including motions to rescind that would be available. Council Member Brooks said he thinks it would be appropriate to look at it and put it on hold until we have an answer. Mayor Brown said the Herald article was well done and presented both sides and presented the uncertainty that this was preliminary data and commended them on that.

1.1 Alerus report.
Mr. Schmisek presented an analysis of cash flow and how we are using up to $600,000 of Economic De-velopment Funds to help fund any potential deficit they might have. He said Mr. Kossow is out of town but would be available at the next Council or COW and that Mr. Jeske is here to answer questions and provide information about the economic impact so far this year. Mr. Schmisek explained the cash advances of $953,000 of which $135,000 was a carryover of a deficit from 2000. He said they started ramping up the employees and some of the other expenses to get the facility ready on the operational side prior to a revenue stream except for the sales tax – that leaves $818,000 in net cash advance for 2001 operations. He said we expect additional funds back in first 60 days of next year (additional sales tax and accounts receivable), which brings us to $531,000 that we are setting up as due back from the Alerus. He said that would mean for this year we will fund out of the $600,000, approximately $287,000 based on what we know today – that can fluctuate from $250,000-$350,000 - do not anticipate using the full $600,000 that w as set aside. He said there were some startup costs (presented earlier) that were higher than the normal anticipated dollar amount they would spend and there are some other costs in the unem-ployment tax area that were higher (that rate has now been lowered) - if things continue to operate as this year and more events come in, we can look at a more promising number than the $287,000 in the future.

Council Member Bakken questioned the 60-day timeline and Mr. Schmisek explained that it could very well be paid before year-end, but that is the latest. He added that part of it is due to ticket sales and clo-sing out with promoters - we have some events coming up in December. In response to Council Member Bakken’s question about normal cash flow in the industry, Mr. Jeske said 60 days are quite long - most shows settle in 30 days or sooner - better to be safe than sorry – they collect on bills as soon as possible.

Council Member Lunak asked how come we are losing money out there. Mr. Jeske responded that Com-pass and the Alerus Center Commission has always projected a loss and as far as the number increasing, it was due to employee costs and the Commission voted to spend more for initial ramp up and marketing. He discussed economic impact numbers, saying that the Alerus brought in 65,858 visitors in October which means over $11 million brought into the community because of the Alerus in October alone - year to date over $52 million in economic impact. He said retail is very appreciative of the fact that the Alerus is open and running – we have given a report every month and have updated every month. Mr. Jeske said they want this to break even but the impact to the community is huge. Council Member Lunak said he doesn’t understand any of that. He said he wanted to make the point that he never said Mr. Jeske was trying to hide anything – that he can ask anything he wants to - Mr. Jeske can spin it however he wants.

Council Member Brooks said the marketing budget is up, but the revenues are up as well – what is glaring is the personnel area. Mr. Jeske said they are concerned and when budgeting they look at all those numbers. Council Member Hamerlik said the Alerus did not request the $600,000 – it was an issue of backup. He also noted that the Alerus will have more than a year of expenses when we get to the end of December and we were 40 days short of income because we didn’t open until February. He also pointed out that the arena itself is making money - compared to others in the area, we would be doing very well. In order to build up the economic impact in the community, the convention side is where we lose money, and when pitching for a vote we were talking about closing down the Civic Auditorium and having $200-$250,000 to move over to the Alerus, in addition to the tax resulting in a situation of operating where we are expected to be by the end of the year. Since we still have the Civic we won’t have quite that amount of money to move over.

Council Member Bjerke said what he is going to say does not reflect on Mr. Jeske or his performance. He said the Civic was losing about $250,000 and there was no reason for that building to lose that kind of money. He said next year we have $160,000 set aside for special services – don’t know how much is set aside for the Alerus (off-site) - if anything happens off-site the taxpayers pay for it. He said we could be looking at $600,000 total of what it actually costs that building to run – he knew it would lose money and a fair chunk of money. Mr. Bjerke initiated discussion about the economic development impacts and expressed a difference in methodology. He said we had old events and if we are to be accurate we should only look at the new events that have occurred as a result of the Alerus. Mr. Jeske responded that they don’t have old numbers available so all they can do is give the report with the current numbers. Mr. Bjerke said when he hears Council members constantly spin the numbers one way, he will have to spin back the other.

Council Member Gershman said it is unusual these days to hear negative comments about the Alerus – this community has embraced it and is having a lot of fun and a lot of people are spending a lot of money there. He said as a retailer the difference it is making is tremendous and even if you were to cut the economic impact in half, the one percent sales tax will pay for the deficit, so what is the issue? He pointed out that the Civic had a subsidy of $250,000/year. He said it is not true that people will go out anyway - when people go to an event they change their habits as to when they go out and what they do and we have become an event city in Grand Forks. He said it’s a great problem to have to pay for off-site police – wonderful to have a lot of people in town - hope we have to replace the carpet every year because it wears out. He said he appreciates the report - will be bigger next year than this year – has added a tremendous amount of fun for families in the community.

Council Member Klave thanked Mr. Jeske for the report and said each can read the report as you want to – it is a good facility for our community – the $250,000 we were putting into the Civic didn’t get us anywhere - this is getting us somewhere – many people in the business community are excited when there are events – the amount of business gained from it. He said he has been a Sioux Booster for years and he doesn’t remember 7,500 people sitting in the stands out there but have watched 7-10,000 people a week show up for football right now – all of the Sioux away games total people in attendance has been 9,000 – our facility speaks for itself with those numbers – we are doing a good job with it and it will only get better as time goes on.

Council Member Bakken said he was not a supporter of the Alerus when it started and was skeptical, but now he sees it is a great addition to the community – no one expected it to make money the first year – if they did they haven’t had a chance doing business because most businesses don’t make money in the first couple of years. He added that he has been to every football game at home this year and before had been to only one – has seen some of our elderly citizens coming who would not have gone to a game outside – they enjoyed it and otherwise would not have left the house.

Council Member Brooks thanked Mr. Jeske for coming to answer questions. Council Member Gershman asked how many people are employed at a major concert or football game. Mr. Jeske said all employees are local people who put the money back into the community – had close to 400 employees for the Backstreet Boys. He said they appreciate the support of the community. He said this is why UND is in a win situation for the playoffs – they look at attendance and other factors to get the playoff games here – it’s huge for us.

Council Member Kreun pointed out that some of the events have been the largest grossing shows on tour. He said no matter how you look at the numbers for economic impact, he was amazed that furniture store are selling large ticket items to people coming in for events – it doesn’t just affect the restaurant/hotel/motel business - they have to bring in extra staff when there is an event at the Alerus or Engelstad – when there is an event there are more people in town and we have to gear up for it – there will be extra costs involved but overall it should offset and eventually hope it reduces our individual property tax over the long run.

1.2 Appointment to the Alerus Commission.
No comments.

1.3 Task Force on Fares Recommendation.
Frank Harlow, 110 Cherry St., #102 said if the Bremer Foundation is coming in why do we have to raise the fares. Citizens that have a disability and don’t have jobs can’t afford it if you are going to raise it. Mary Weaver, 509 Cherry, and Blair Sondreal, 2482 Huntington Park Dr. made a combined presentation including the possible consequences if the tripper service were abandoned - will create a burden on students and parents - this segment of riders is a money-making opportunity. After further discussion, they proposed fare increases of 10% across the board with complementary rises in ticket prices: adults from $1.25 to $1.30 with a strip of 10 for $10., .50 to .55 for seniors and disabled with a strip of 10 for $5, students .60 to .65 with a strip of 10 for $6, all day passes the same at $30, but off-peak to be raised from $15 to $18. Mr. Sondreal said he doesn’t know the department’s mission statement but hoped it would be that our goal is to provide a comprehensive, safe, reliable and affordable alternative form of transportation for the communities of Grand Forks and East Grand Forks. Ms. Weaver said they are in favor of reasonable fare hikes, if necessary and are in favor of doing what they can to keep tripper routes as part of the transportation system.

Bobby Vogel, 2500 14th Av. S. #11 said it is true that some people don’t ride so often but you can get a lot more people that may be coming into town that will ride the bus more often if you advertise it.

Council Member Burke reviewed the Task Force recommendations in the staff report and thanked the members for serving. He said with regard to student fares, the staff has reported that if the school district found that the fares were too high and chose not to participate that the private bus company would step in and fill the need. He said the committee felt that many of the fares haven’t been raised since the mid-90’s and that staff could not identify a clear relationship between fare increases and ridership. Council Member Hamerlik suggested if there are other changes made in the recommendation they should all be done at mid-year. He commented that over the years he has noticed that the prices were complicated and hard to understand – let’s make it easier – set the adult rate, that triggers the Dial-A-Ride and say all the others are half price – might be an advantage to the bus system. Council Member Martinson pointed out that we are talking pennies and we are spending hours discussing it – he suggested that Council vote on it and get it done. He said he would vote in favor of it. Council Member Brooks said he would vote for this and that he may add an amendment that the topic of the bus be outlawed until the next budget session.

Council Member Burke said that one issue discussed but not acted upon was if the senior bus should continue to run into East Grand Forks if they are not providing assistance - asked staff to approach them to see what their reaction would be - their response was they wold be willing to pay on a comparable basis for the senior bus if the senior bus were also able to provide their Dial-A-Ride service. He said the issue was raised about Dial-A-Ride itself and that it might be cheaper if there were one provider and we bid the service. He said we ought to consider the senior bus and how East Grand Forks contributes to its operation and how we might be able to reduce some of the cost with regard to Dial-A-Ride.

After discussion about whether a public hearing would be necessary, Mr. Haugen informed that there is a federal requirement to have a public hearing before fares can be raised. Discussion followed on who has the final approval. Mr. Haugen said that with federal funds involved, use of the funds must be part of the long-range transportation plan and any changes would have to become a part of the MPO long-range transportation plan, the plan would have to be amended and the executive board would have to make a decision. Council Member Hamerlik said in the past the Transportation Committee has held the hearings before it came to Council – the public should know what we are thinking and we should have a motion of some sort as a recommendation and then have a second vote the following week after we have a hearing – we may want to have a special hearing conducted by staff with the Task Force members there to hear it out. Council Member Bakken said the reason for the process was to make sure that before the public hearings the public would know what the Council wanted to do.

1.4 $4,853 Budget Amendment for Training and Education.
No comments.

1.5 through 1.11 Budget Amendment Requests.
Mr. Schmisek said 1.5 through 1.11 are all Police Department requests either due to additional contributions, grants, reimbursements, special service fees or asset forfeiture funds and those would be additional budget amounts.

1.12 Consideration of Funding for Railroad Crossing Signal.
No comments.

1.13 2002 Chemical Bid Approval for Water Treatment Plant.
Mr. Feland pointed out that one of the polymer bids (ONDEO NALCO) was not opened and provided the Fed Ex tracking form which showed that the overnight letter was picked up in Aurora, IL on Nov. 14 at 6:59 p.m. and did not arrive in Grand Forks until the 16th at 7:25 a.m. He said the bid opening was Nov. 15 at 2 p.m. Council Member Burke said the date is known and we ought not to be making exceptions.

1.14 Arts Regranting Program.
Council Member Gershman said he would like Council to consider having the NOVAC do the regranting - they are reconstituting the arts board and that should be done by the end of December – the board puts together an objective committee – in 1992 the City Council had granted that NOVAC be the granting authority - they have guidelines in place for it and independent people selected for it.

1.15 2002 Human Needs Funds.
Council Member Bjerke said citizens can give to United Way any way they want - not the role of government to take taxpayer’s money and give it to a charity. Council Member Lunak said he disagreed.

1.16 Change Order #5 for Project #5197–2001 Concrete Street Repairs.
No comments.

1.17 Storm Water Lift Station No. 89 and Drainage Improvement Study to Surrounding Area.
Council Member Bjerke said he wants to go over the policy. Ms Voigt said water and sanitary come from the utility funds but storm is special assessed. Council Member Bjerke said we are not consistent - city should consider looking into being consistent and maybe this type of storm sewer work should be part of a fund rather than a special assessment when we are going back into an area. Ms. Voigt said we wanted to find another way of financing it and it is on the agenda to let Council it is a special assessment project. Mr. Feland said this is an oddity and it may be because storm stations serve a larger area so it was probably easier to special assess it. He gave an example of a scenario they looked at where if they sold revenue bonds through the stormwater utility fund and were reimbursed through a monthly account payers – did look at both and the difference worked out to 9.85% over five years (utility fund – an increase in storm rates) vs. debt service in the storm fund (5.6%) so there is about a 4.5% difference. Difference on year one for utility rate payer is about $1.44/year using the special assessment process (basic customer) and at year five the difference would range to $9.24/year - can generally see the range in the two different funding issues. He said they don’t know what to do so are proposing to do a study through the stormwater utility fund so we know the extent of the problem, so we can determine what the cost would be a come back to this group. Council Member Bjerke said he doesn’t understand why it is different. Mayor Brown said we will research it.

ADMINISTRATIVE COORDINATOR COMMENTS
No comments.

MAYOR AND COUNCIL MEMBER COMMENTS
Council Member Gershman: appreciates the new format – it works well.

Council Member Glassheim: expressed that it was very difficult to hear the conversation.

Council Member Council Member Burke: No comments.

Council Member Council Member Hamerlik: No comments.

Council Member Stevens: No comments.

Council Member Bjerke: No comments.

Council Member Brooks: Thanked staff for the finance report – not exactly what we wanted but a step in the right direction.

Council Member Martinson: brings greetings from Pat and Bobby Owens. Real estate closings up 50% compared to last October and year to date January to October closings are 28% ahead.

Council Member Kreun: question of council members – we have had considerable discussion on the recycling program – is it proper to put together an ad-hoc committee to look at it to bring recommendations back to the Committee of the Whole before the budget process starts. He said that he, Mr. Bjerke and Mr. Glassheim would volunteer to be on that committee. Council Member Kerian volunteered as well.

Council Member Bakken: hopes everyone goes to football game so we have a sold out house.

Council Member Kerian: No comments.

Council Member Klave: No comments.

Council Member Christensen: Absent.

Council Member Lunak: No comments.

Mr. Dean asked Council members to speak directly into the microphone - difficult to pick it up of you do not speak directly into the microphone.

ADJOURNMENT
Council Members Brooks and Gershman moved to adjourn. Motion carried unanimously.

Respectfully submitted,


_____________________________
John M. Schmisek