Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, October 11, 1994 - 5:00 p.m.

Members present: Carpenter, Babinchak, McCabe.

1. Matter of application for sidewalk assessment cancellation.
a) 1202 South 12th Street.
Saroj Jerath, acct., city auditor's office, reported that applicant has submitted required paperwork and qualifies for the exemption under the CIP policy established for cancellation of assessment for low and mod. income. Moved by McCabe and Babinchak that the application be approved. Motion carried.

2. Applications for 3-year remodeling exemptions:
a) 2503 Chestnut Street
b) 924 Cherry Street
Mel Carsen, city assessor, reported that the applicants qualify and he would recommend approval. He stated that law allows exemption of the added value for three years. Moved by Babinchak and McCabe that the applications be approved. Motion carried.

3. Matter of adopting a charter ordinance allowing issuance of
reserve revenue bonds for FTZ building expansion.
Mrs. Jerath reported that Mr. O'Leary has been furnishing information to bond counsel, Dorsey & Whitney, and need to introduce ordinance allowing issuance of the bonds. Mr. Swanson advised committee they would be adopting ordinance which provides the authority for the City to sell revenue bonds for the construction of this building, otherwise there is not authority in the State law to do it. Moved by Babinchak and McCabe to approve and to introduce ordinance for first reading. Motion carried.

4. Matter of financing for Burdick's Resubdivision.
Mrs. Jerath reported that Mr. O'Leary is still pursuing financing from banks and private sources, and has not submitted anything concrete as yet.

Mr. Swanson reported you can have the tax exemption, but the issue is what do you use for the funding, you do not have ability to do tax increment finance bonds; and Mr. O'Leary was attempting to contact financial institutions to determine whether they would be in a position to make a loan, basically to mortgage this property to provide the up-front cash. Information only.

5. Matter of city engineer/public works director position and
job description.
Ken Vein reported this matter had been referred back to committee because of concerns Mr. Hamerlik had, that he has talked to Mr. Hamerlik re. possible title changes, and how it would affect assistants. He noted that the public service committee at its meeting last evening unanimously supported the original motions that were made. Moved by McCabe and Babinchak

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to create the position and to adopt the job description.

6. Proposed amendment to Civil Service Code to allow employee
with break in service due to on the job injury to retain
his/her seniority.
Mr. Swanson reported that the new Code does not allow this, the new Code does allow full service time to be considered for promotional purposes, but for all other purposes ie. accumulation of annual leave, department seniority, it would be counted as a break in continuous service, so you would not have benefit of prior years. He advised that if they were inclined to change that it would take an ordinance change. He asked what would be effective date of that ordinance; if do now, would have to amend present Code, and amend proposed Code. He stated that the break in service for Mr. Kvadas occurred a number of years ago, the effect of what you are doing is retroactive to whatever the date of his injury was, which was approx. 1987, more than 7 years ago, and council would have to make that a specific motion, or what would be effective date. It was noted that this matter was discussed but not included the new Code. He stated that it is within council's discretion to change it.

Mr. Graba stated that in 18 years this is first time happened.
Mr. Carpenter questioned why this is coming up now. Mr. Graba reported that Jeff Kvadas has lost a lot of seniority as far as vacation and departmental seniority is concerned. Mr. Kvadas stated it does affect area in which he can work (narcotics, etc.); that Civil Service Commission has recommended that it be granted to him. He explained he was injured on the job (hand), the doctor said he would not be able to shoot a gun again, and that he was told he had to resign after a year. He stated that he returned after several more surgeries, rehab., etc. and then rehired. He stated he has lost a lot and that City should consider giving him that back; and that it is hardship to further his career with that loss of seniority (about 5 1/2-6 years).

Mr. Swanson reported that generally speaking a year is time frame to rehabilitate and come back to the position; if within that year an employee is still drawing vacation or sick leave that's not considered to be a break in service, but in existing and proposed Code if at the end of 12 months, you are not able to fulfill the duties, you are no longer considered an active employee of the City and that position can be filled. Mr. Graba stated that the year leave has been extended in several instances. Mr. Swanson stated that if they are going to amend, would need to amend both Codes.

Moved by McCabe to direct city attorney to make an amendment to the existing and new Codes, and to make retroactive to Mr. Kvadas' injury; Babinchak seconded the motion.


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There was considerable discussion relative to time restrictions etc. various registers: rehabilitation, re-employment, etc. Mr. Swanson stated that rehabilitated employee could return under provisions of re-employment register within one year or rehabilitation register with no time restriction. Mr. Swanson suggested another alternative - to re-define seniority to include all years of service.

There was also some discussion re. back vacation for Mr. Kvadas, which according to Mr. Kvadas would amount to a couple hundred hours and that he felt that it would be fair if he did get that because reason for his injury was work-related. He stated his main concern would be to count seniority interdepartmentally.

Upon call for the question and upon voice vote, the motion carried; Carpenter voted against the motion. The committee stated it was their intent that Mr. Swanson draft the ordinance, and to bring back to the next finance committee meeting.

7. Matter of hiring director of human resources by contract
instead of under Civil Service Code.
Mr. Carpenter stated his thoughts are that vacancy in this position provides opportunity to experiment outside Civil Service Code and provide opportunity that may work better, make department heads more accountable, and allow for more experimentation. He stated they need to look at opportunities to try something new, see how works, and referred for discussion and thought.

Mr. McCabe asked what happens if position filled from in-house, and Mr. Carpenter stated they would move to outside Civil Service Code.

Mrs. Babinchak asked how selected; Mr. Carpenter it would be mayor's responsibility to be making those determinations or council members, or council chairs; would have to be defined.

Mr. Graba asked Mr. Swanson if during research on Civil Service Code revision what others doing. Mr. Swanson stated his research indicated that certain positions are hired on contract basis as opposed to Civil Service system; varied across board; ones most common: city attorney, fire chief, chief of police, city auditor, city engineer and city health director - saw little of everything.

Mr. Graba stated they have already advertised and Commission established process, and are they upsetting selection process; and Mr. Swanson stated process could be changed with notification, etc.

Mr. Graba stated he is leaving December 30, won't affect him;

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Mayor wants someone on board by December 15; thinks this needs lot of study; significant change in whole policy of the city; thinks we have good system, and there should be study made before changing. He stated he works for City under direction of the council; would be answerable to the council, and that applies to every department head.

Bob Bushfield, city planner, stated he would hate to feel job jeopardized with every decision, or pressured to make decision; and he would see paying contract people more than under Civil Service. Mr. Swanson agreed they would find that the salary costs are higher; find that average term of contract 5 years; contracts varied, no buy-out clause. He also stated costs higher because employee taking more risk, recruiting more difficult, not as many applicants, detachment from other department heads. He stated he does have some of that information available, and that the new Code has provision recognizing contract employees.

Don Shields, health department director, commented on potential of pressures being applied by businesses, etc.

Chief Aulich stated he could see potential of politicization, and possibility of pressures applied by businesses, etc.

Mr. Swanson stated city attorney is city contract holder; that he has never once received any pressure from anyone once made decision, never feeling of backlash.

Mayor Polovitz questioned definition of accountability; Mr. Carpenter stated defining goals and objectives and holding to meeting those. Mayor Polovitz questioned why can't do under system we have. Mr. Carpenter stated that if can't accomplish what citizens want then no one's accountable.

Mayor Polovitz stated he doesn't agree with experimenting for experimenting's sake; that he has no problem with accountability; and stated he has been put under tremendous pressure, re. letting department heads go. He stated that under contract, don't have continuity, need security, dealing with human element and providing security for that person; and that when you appoint someone, want them to be part of the community, not there for himself. He stated he is firmly against this, because thinks things going well, it's people that make difference and not contract and civil service.

Ken Vein, city engineer, stated concern - hard to come out in favor until see how contract written and have protection for department heads to do job without undue pressure.

Mr. Carpenter stated positions he would see under contract: police chief, fire chief, planning director, city engineer,

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health department director, human resources, office of urban development, city auditor - those core positions under contract; that city assessor not major policy department, nor waterworks streets, etc. He stated that provisions of contract would 1) set term, 2) some terms for allowing evaluation of performance on yearly basis, 3) if goals not reached, that may reflect on evaluation; sees contract defining terms, accountability, etc.

Don Shields asked how much flexibility within department, to make changes within system.

Mr. Carpenter stated he had proposed doing away with civil service process, give as much flexibility as possible; need to take steps to give more flexibility; and have to find better way of doing things.

John O'Leary stated that because of budgets forced to be more creative; and would submit that what he is proposing would make more cautious managers.

Mr. Carpenter stated that because of what he has heard today, wont' push change for this position; but won't allow idea to die, and there will be some study. He also stated that change wouldn't affect any of the present department heads. Mr. Graba stated that no council person has ever come to his office and gone through process, etc. to become more aware of how they function and what they do.

Moved by Babinchak and McCabe to receive and file. Motion carried.

8. Matter of RFP for audit services.
Mrs. Jerath reviewed changes in proposals with committee, that committee will review proposals received, gives option of oral interview, and three-year option (1994, 1995 and 1996). She stated they are requesting approval of the document and to seek bids. The committee asked that they add River Forks Commission to scope of work (Commission presently under consideration for creation).

Moved by McCabe and Babinchak to authorize the finance department to request proposals including changes as presented. Motion carried. (committee only)

9. Matter of carry-over of unspent funds in certain budget
categories.
Held in committee.

10. Matter of ordinance allowing tapping fees.
Held in committee.


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11. Request by MetroPlains Development for establishment of a tax
exemption district for a period of fifteen years to assist in development of St. Anne's property.
Mr. Carsen reported they request was for $150,000 in tax forgiveness; they were using some erroneous numbers, they anticipated that the current value was going to be value of this project, that is not the case; they anticipated tax savings to be about $20,400/year, that by figuring at 9% interest discount for 10 years, the present value of $22,430 is essentially $144,000, for 11 year exemption looking at $152,600; so if they are really asking for $150,000, it seems as though 11 years would be an appropriate number.

Mr. Swanson reported that Planning and Zoning established the district, and council needs to establish the exemption period, and public hearing.

Mr. O'Leary reported that $150,000 contribution to get State to provide Home grant.

Mr. Swanson stated they came in and said what was on books wasn't enough time to give them $150,000; council terminated existing exemption, referred it to Planning and Zoning to create a new district, which is different than original district; now matter of setting term of tax exemption. Mr. Swanson stated that he doesn't know if anyone has looked at proforma, whether they have $10,000 in hard cash, and in first year they are taking out $300,000, then they are asking for 15 year exemption, and in his experience, Grand Forks' mill levy has never dropped; so any increase in mill levy gives them that much more. Mr. O'Leary reported that the cost per one-bedroom unit is $63,000, and that's astounding, and reason that high is that developer maintains it's cost of historical rehab.; that $300,000 is development fee, administrative fee.

Moved by Babinchak and McCabe to call for public hearing at a date to be established in regard to the tax exemption district. Motion carried.

12. Matter of budget amendment.
a) Parking Lot budget - $91,000 from 1993 pooled cash carryover.
Mrs. Jerath reviewed budget amendment to transfer funds (council set aside $495,000 for Parking Authority to expand parking facilities downtown). Moved by McCabe and Babinchak to approve budget amendment, and to introduce ordinance amending annual appropriations bill ordinance for calendar year 1994. Motion carried.

13. Matter of offer by Red Cross to purchase City property at
40th Avenue South and South Washington Street.

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Mr. Swanson reported that rep. of Red Cross had asked whether land in the city could be conveyed to the Red Cross without advertising and bidding, and the answer is no; that under our City Code any real estate that is determined to be surplus must be advertised and sold.

14. Matter of tax exemption for Burdick's Resubdivision
Mr. O'Leary stated that there is one other thing that needs to be clarified on bonds for that project, bond consultant said that a bond wouldn't be possible, and were then considering converting that from bond to an exemption. He stated that they did that and low quotations came in at 6.16% but still need exemption in lieu of the tax increment bonds to match Home monies, and are requesting that they consider an exemption rather than tax increment.

Mr. Swanson stated that only thing to be done is that public hearing has to be held and final action on the tax exemption.

Moved by McCabe and Babinchak that we establish public hearing on the request for tax exemption for Burdick's Resubdivision. Motion carried.

Meeting adjourned.

Alice Fontaine, City Clerk

Dated: 10/12/94.