Committee Minutes

MINUTES/FINANCE COMMITTEE
Wednessday, May 11, 1994 - 3:00 p.m.

Members present: Kulas, Johnson, Shores.

1. Matter of sale of City lot - Lot 15, Block 1, Rydell-West
Subdivision.
John Schmisek, city auditor, reported that a counter-offer was made to Mr. Wavra on behalf of Grand Forks Equipment of $6500, with no contingencies; that in discussing with Mr. Swanson, city attorney, he stated that wasn't an exclusive offer because City can't make an exclusive counter offer, that was a standing offer until there would be a response to it. We did have another individual (Mr. Knipe of Halcyon, Inc.) come in on the 2nd or 3rd and offered $6500. He stated he then informed Mr. Wavra of that and of city attorney's conversation; and that committee has option of what want to do with that property.

Mr. Schmisek again stated that the city attorney's comments were that this was not an exclusive offer, was a counter offer, and that there was no response to this offer coming in, therefore it's open for committee to decide whether to refuse bids, rebidding, or accepting one of the offers.

Committee reviewed minutes and letters; and questioned whether this was offer or counter-offer, and noted that no date set for acceptance.

Johnson reported present.

Mr. Schmisek asked if they wanted to hold this item until just prior to the council meeting as the city attorney was not able to be present today.

Mr. Wavra reported that Grand Forks Equipment would need this lot to expand their business, and when he gets done, will have $1 Million invested in that property providing he gets this lot.

The committee stated that this was question of whether this is counter offer or an offer, that if it's an offer then we should have stated a date on which it would terminate, that was not stated, and then would be a reasonable time, and question comes in, what constitutes a reasonable time.

Committee stated that it comes down to question of whether they waited beyond reasonable time, with no response from 19th to the 5th. Committee questioned why took so long to respond, if handling $1 Million project, why took 2 - 2 1/2 weeks. Mr. Wavra stated they didn't want to buy lot until he could make sure other things fell into place before proceeding with building, zoning, etc.; that City took contingencies out and he had to make sure some things happen. The committee stated that there was nothing in motion that sale contingent upon other building being purchased.
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Moved by Shores and Johnson to accept the offer in the amount of $6500 from Grand Forks Equipment, Inc. subject to the review of the city attorney.

It was noted that the committee would meet at 7:15 p.m. on Monday, prior to the council meeting.

Reps of Grand Forks Equipment asked if there was way of getting response before Monday, because that project can't go on without the lot and would have to take other action. The committee stated there was another possibility; that the City originally assessed that property at $8600, and asked Grand Forks Equipment if they wanted to increase their offer; and if other bidder did not go over, they could accept it here and now. Grand Forks Equipment and Mr. Knipe increased bids orally, with last bid by Grand Forks Equipment in the amount of $7,900. Grand Forks Equipment requested copy of letter for review by their attorney.
Mr. Kulas stated that the city attorney had stated to him that the committee had the right to take additional bids at this meeting, that was one of the options, and that is what offered to them, and it was up to them whether they wanted to do so.

Moved by Shores and Johnson to amend original motion and to accept offer of Grand Forks Equipment in the amount of $7,900.00.

Mr. Knipe stated he made offer in good faith, and weren't aware of other bid.

Motion carried.

2. Matter of roofs on City buildings in City Center Mall:
a) Young building, 2 S. 3rd Street
Dick Jackson, Mall manager, reported that portion of ceiling fell in because of weight of water - roof pretty bad and should probably be redone, est. cost $11,500. Mr. Schmisek reported that City receives rents, and they will file claim with insurance company. Mr. Jackson reported that they had trouble with that roof in the back part of the building, and water running into electrical panel, whole roof should be redone. It was noted that the Young building generates $1200 mo. from the apartments, plus $1500 to 1600/mo. for lower level - $2500 to $3000/mo. Mr. Schmisek reported cost could be borrowed from Deficiency Fund and repaid through rentals. Moved by Johnson and Shores to authorize call for bids. Motion carried. (committee only)

b) Blinphal building, annex to Plunkett's
Mr. Jackson reported roof leaking on this building, est. cost to repair $18,000. However Mr. Jackson stated they may be able to pick up more rent on that building. It was reported that City has had building for 12 years and no monies put into the building. Mr. Schmisek noted that they don't collect enough in
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rents to pay specials. Moved by Shores and Johnson to authorize call for bids. Motion carried. (committee only)

3. Protest of assessor's 1994 valuation of property:
a) Roy Lindvall, 2503 South 11th Street
Mr. Carsen reported that Mr. Lindvall had been hospitalized with heart attack. Held.

b) Albert Miller, 5311 Chestnut Street
Mr. Carsen reported this house received 15% neighborhood factor, 1994 value of $84,300; that they inspected property and were recommending adjusting the valuation down to $73,400. Mr. Miller has been notified of proposed reduction. Moved by Johnson and Shores that the market value of the property be reduced from $84,300 to $73,400. Motion carried.

c) Darlyne Hegg, 520 Plum Avenue
Mr. Carsen reported that protest involves single family house which received increase in value of 10% by a neighborhood factor, plus they have added value for new garage, concrete patio, roof and soffit rebuild and repair; that they inspected the property and made a new appraisal which seems to support the new valuation of $87,700. He reported that the owner could qualify for a 3-year remodeling exemption, that he is sending exemption form to the property owner, and when that is returned they could reduce the value by $3,600 to $84,100.

Moved by Shores and Johnson to accept assessor's recommendation to reduce market value to $84,100 subject to receiving 3-year tax exemption application. Motion carried.

d) Arnold Westgard, 505 Pakenham Avenue
Mr. Westgard was present. Mr. Carsen reported protest involves single family where value increased for 1994 by 10% by a neighborhood factor; that they made a new appraisal, and evidence seems to indicate that their current value of $64,000 is low, and recommended that the Board uphold their valuation of $64,000.
Moved by Johnson and Shores that we accept the assessor's value of $64,000 on the property. Motion carried.

e) Timothy Rerick, 2503 Olive Street
Mr. Carsen reported that value of property increased from $82,500 to $91,600, and that after reviewing with Mr. Rerick, he withdrew his protest. Moved by Shores and Johnson to uphold the assessor's valuation on the property. Motion carried.

f) Bruce Betcher, 503 27th Avenue South
Mr. Carsen reported that this property owner didn't intend to protest but make statement of escalating property taxes. Moved by Johnson and Shores to uphold assessor's valuation of $83,600.00 on the property. Motion carried.
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g) AAA Office Building at 2701 S. Columbia Road
Bob Simons, rep. Triple A of North Dakota, reported there are three approaches to valuing property: cost approach, income approach, and market approach, and most weight given where have best data and fits standards, commented on functional obsolescence in the building; and stated that cost approach doesn't fit very well, market approach, don't have best data, don't have comparable sales of similar property; and this leaves them with income approach. He reviewed figures using the income approach, which indicated value of $746,576, or $750,000 as a fair and equitable value for the property.

Mr. Carsen reported that he has done new income approach which reduces the value to $787,000 (cost approach, $856,500 and market approach, $864,300), and reviewed information with the committee.
After further discussion Mr. Shores reported he had read through main appraisal and reviewed information, and moved to set value of the property at $787,000, the motion was seconded by Kulas. Motion carried.

4. Applications for 3-year tax exemption on improvements:
Mr. Carsen reviewed applications for exemption of taxes on improvements, all applicants qualify for exemption for 1994, 1995 and 1996, and he recommended approval.
a) 1109 Lanark Avenue
Alan and Toni Halvorson - house resided, shingled and new windows, etc.
b) 1204 Chestnut Street
Robin E. Gray - remodeled kitchen in February 1993.
c) 2410 9th Avenue North
Daniel Hart - basement remodeling, shingles and new siding.
d) 1602 13th Avenue South
Richard J. Bennett - windows and siding replaced.
Moved by Johnson and Shores that the applications be approved. Motion carried.

5. Matter of purchase of recorder system and budget amendment.
Mr. Schmisek reviewed for budget amendment for auditor's office in the amount of $3,197.00 to use 1993 pooled cash carry over to purchase recorder system for City Hall use. He noted that the recorder has capability of recording on two tapes, without having to change tapes, and adapted to system in council chambers. Moved by Shores and Johnson to approve the budget amendment in the amount of $3,197.00 and to introduce ordinance for first reading. Motion carried.

6. Matter of pledged collateral.
Mr. Johnson will review securities on file in the auditor's office.
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7. Matter of job description for director of public works and enterprise funds.
Mr. Kulas reported they didn't have much success with ad, ad states applicant must have master's degree in business administration, needs to have engineering degree plus master's degree in business administration, and would require change in job description. He stated that is the only change that he's aware of. The committee reviewed the job description and deleted items listed in section A. under Specific Duties and Responsibilities, and combined/included with items listed under section B, and re-lettered/renumbered items. Moved by Kulas and Shores to approve corrected job description. Motion carried.

8. Matter of valuation of City-owned lot - Lot 4, Block 1,
Medvue Estates 6th Resubdivision.
Mr. Schmisek presented matter of setting property value on City-owned lot (Lot 4, Block 1, Medvue Estates 6th Resubdiv.), and informed committee they are still in the process of designating access to the property, and are asking for recommendation for sale. Mr. Carsen reported he was recommending value of $1.00 per sq.ft. or $16,300. The committee suggested waiting until get access before selling. Mr. Schmisek reported that they have had inquiries on the property, and are quite anxious for property to be offered for sale. Moved by Shores and Johnson that we price lot at $16,300 and offer for sale subject to appropriate departments reviewing access and to provide access from the southwest corner of Lot 3. Motion carried.

9. Matter of budget amendment request - civic auditorium.
The committee reviewed request to amend civic auditorium budget in the amount of $750.00 to reflect receipt of promotional grant from the Convention and Visitors Bureau. Moved by Johnson and Shores to approve amendment in the amount of $750.00, and to introduce ordinance for first reading. Motion carried.

10. Schedule meeting dates on protests on property valuations.
Mel Carsen asked committee to schedule meetings to hear protests on property valuations. He stated they probably will have to set meetings for all Tuesdays in May. The committee scheduled a meeting for Tuesday, May 17, at 2:45 p.m.

Meeting adjourned.

Alice Fontaine
City Clerk

Dated: 5/11/94.