Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, March 28, 1995 - 3:45 p.m.

Members present: Carpenter, Babinchak, Geller, McCabe

1. Matter of offer by American Red Cross to purchase City
property at S. Wash. St. and 40th Ave.S.
John Schmisek, city auditor, reported that the American Red Cross has offered $40,000 for that property, assessor's valuation set at $50,000. He reported that American Red Cross originally offered $35,000 and after negotiation have increased offer to $40,000, which is 80% of the valuation and are asking City to consider. They also are asking that the City extend the tax exempt status on the property for 18 months as they accumulate the necessary capital to begin building and that once the building is started, they will apply for the tax exempt status which is granted to the Red Cross. Mr. Swanson advised that the tax exempt status is covered by State law, that once the property conveyed by the City, it would lose its tax exempt status until the property is put to a non-profit use and that would require the construction of some type of building, that the City would have no ability to grant them any type of exemption for a tax exempt status unless they are looking at not completing the sale for an additional 18 months. He also advised that zoning change would have to be referred to the Planning and Zoning Commission. Mr. Carsen, city assessor, reported that tax liability on the property approx. $1250.00/year, would be assessed on pro-rated basis starting August 1 and if remain vacant past February 1 would remain taxable for entire next year on land only.

After further discussion it was moved Geller and Babinchak to accept the offer of the American Red Cross of $40,000 subject to the following contingencies: rezoning of the property, and approval by their national organization, with a closing date no later than August 1. Motion carried.

Moved by Babinchak and Geller to refer rezoning request to Planning and Zoning Commission. Motion carried.

2. Matter of bids for downtown parking ramp.
Mr. Schmisek reported that this matter had been held from last meeting because cost came in high on the bids received, and to research possibility of assessing benefits to the ramp property itself to allow the City and Downtown Authority to enter into agreement where split the $300,000 difference. He reported that in visiting with bond counsel, Lynn Endorf of the Whitney firm, it was possible to assess benefits to that lot if the Special Assessment Commission could find justification for assigning benefits. He stated they took that information to the Special Assessment Commission and they could not find reasoning to assign a benefit that they could justify and hold as solid reason other than saying they are trying to come up with $300,000 to assign against that lot and they didn't feel comfortable with changing original formula established on that project. He
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reported they have received from downtown property owners 8 letters in favor of the ramp and 6 opposing the ramp. He stated that it would be committee's decision whether there is some other way of funding the $300,000 split between City and Parking Authority, doesn't know where that money would come from.

Don Tingum reported that action by the Special Assessment Commission doesn't change CBD Authority's position, they would still come up with the necessary funding, $150,000; that they received one protest, so really have insufficiency of protest on that basis; however, when bids came in much higher, that misled business people in saying there would be an assessment. He reported he met with the mayor and he stated that he is only one person but thought perhaps the City could participate in a 50-50 basis on the overage, and they then calculated 50% to all of the businesses in the downtown district as an operating assessment, sent notices, only 13 responded. He stated they still support coming up with the $150,000; still need $150,000 and looking to City for guidance.

Garry Pearson, 24 N. 4th Street, spoke in opposition to the project, and suggested they delay to sometime in the future.

Sam Silver, City Center Mall; John Satrom, 112-114 North 3rd Street, and 109-111 North 3rd Street; Don Campbell, 308-314 1st Avenue North, spoke in favor of the project.

Dick Jackson, mgr., Parking Authority, noted that some ramp parking (about 20 spaces on ground level) restricted to discourage students from parking there; that there are 411 spaces in the ramp and approx. 125 rented; top level have spaces available. He also noted they have hired security for ramp area. Mr. Silverman stated that parking lots designed to accommodate maximum use.

It was reported there is $570,000 in the fund for the parking ramp, some funds have been spent for engineering fees, and purchase of some lots, and they will collect approx. $75,000 each year over next four years.

Mr. Geller noted that this is not a debate whether need parking, but issue is whether City wants to participate with downtown businesses in relatively small investment in the future. Mr. Carpenter did note that City at risk for more than $150,000 because if default, City responsible for bond issue.

Wally Dornfeld, Springsted, submitted schedule for financing the proposed parking ramp, and came up with issue of $745,000, that would have to be bonded; took into consideration outstanding assessments, and designed issue around that concept, that these
bonds payable primarily from outstanding assessments and then
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requirement would be certain amount; that they have matured good portion of the bonds early, starting in 1996-1999 to coincide with outstanding specials, and then projected total principal and interest on bonds, $745,000; that starting in 1996 would have $31,000 requirement that would come from the City or from Parking Authority (through assessment or revenue), that City's commitment would not be $150,000 upfront but spread over 15 year period ($31,000 liability over 15 years) total of which is $492,000 over the term of the bonds - $33-34,000 requirement on an annual basis.

It was noted that the last date to accept bids is April 7.

Moved by Babinchak and McCabe to reject bids and that the funds be held over to 1996. Motion carried; Geller voted no.

3. Matter of request for tax increment financing for proposed
Warehouse Apartments (former Kedney Warehouse property).
Wally Dornfeld, Springsted, reported that the project developer had requested $500,000 of tax increment financing for this particular project, it was then determined by the city assessor what the projected taxes would be from that project, his preliminary projection is that it would produce $49,650 of income each and every year, that it was his charge then to determine the size of the issue that the $49,650 would support and bring into it the other integral parts of a bond issue; that if they did a tax increment issue for 10 years the bond issue size would be $300,000 less costs of issuance, allowance for discount and capitalized interest and explained reason for the capitalized interest (to cover interest payment date within year), proceeds $238,455.00. He reported that on a 15-year issue it would support $430,000, less cost of issuance, allowance for discount and capitalized interest of $57,763, net proceeds of $347,587. He also reported on 20-year schedule, would support $520,000 bond issue, with net proceeds for construction of $420,000. He noted that other pages are schedules that support those assumptions, and in every case the surpluses generated from this issue are not substantial but do believe feasible.

Mr. Dornfeld stated he also included schedule for sewer revenue bonds $830,000 and will have full recommendation at next meeting.
Bill Schoen and Jim Kobetsky, developers, were present.

Mr. Schmisek reported that they have an agreement they would like to come back with after discussions with developer to determine term of bonds, etc. Held for 2 weeks.

4. Matter of moratorium on reclassifications.
Mr. Carpenter reported this was placed on the agenda as an
opportunity for employees or anyone to express their thoughts or
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opinions on the moratorium that council approved on first reading at last meeting, and for second reading at its next meeting.

C.T. Marhula, Civil Service Commission, stated he shares concern of the council on some of the actions of the Commission, but not convinced council action appropriate; that council sees as saving money, but Commission sees as basically taking away their authority and eliminating any usefulness in their position, and employees see as denying them an equal opportunity for what they perceive as an injustice. He stated he didn't think they would build employee relations if approve this action.

Mr. McCabe stated his concern is to put on hold and look at, why certain classifications not reviewed and some departments several times, discrimination between departments.

Mr. Marhula stated they asked that question also, and his understanding is that those people who have not been heard, were not prepared. He stated action may reduce trust between employees and council because taking away their one avenue of addressing a perceived grievance; and basically result in eliminating all reclassifications, even those resulting from mathematical error; also eliminate chance of it going other way (down). He stated that if they enact this, should perhaps consider eliminating the Civil Service Commission and appoint body of council members to hear these grievances; that action at this time unnecessary and over-kill; he stated they are working with a committee made of CSC members, council members, department heads and employee reps. because they recognize some inequities that have come about but moving forward.

The committee stated they were just putting a hold on things, that moratorium is through December 31, 1995 but could be removed at any time. Mr. Marhula stated concern of employees is that December 31, 1995 but could go further and further and they would never have opportunity to address perceived grievances. He also stated there currently zero reclassifications pending, that CSC took action before ordinance discussed and sent back to departments.

Mr. Schmisek noted that they do have as an added item, matter of RFQ for wage study consultant coming from that committee.

Mr. Carpenter stated they want to make sure don't see reoccurrence during period of time when looking at a study, and while there maybe some unfairness, willing to say no; because looking at addressing entire wage classification system through joint committee and looking to hire consultant, thinks moratorium proper step. He stated that if at some stage it looks like not going to make progress and need to re-address, can bring up again.
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Ron Grande, rep. Firefighters Local #1099, responded to Mr. McCabe's comments; that the fire department hasn't been in for reclassification since 1992, last time was March of 1995 because of clerical error in their classifications.

No formal action taken, ordinance will be on agenda for second reading.

5. Matter of purchase of computer for Dial-A-Ride.
Mr. Schmisek reported that the Dial-A-Ride office does not have a computer (Larry Kennedy using his own computer), that there is nothing in current year's budget, and are asking for approval to use money out of the Computer Capital Replacement Fund, with the intent that Dial-A-Ride would budget that money in next year's budget and reimburse that Fund. Moved by McCabe and Babinchak to approve the request. Motion carried.

6. Temporary and overtime report for February, 1995.
The committee reviewed the report. Mr. Schmisek advised that the overage in overtime area in MIS department will be reimbursed out of regular wages (vacancy in department). Moved by Babinchak and McCabe to approve report. Motion carried. (committee only)

7. Matter of new documents for the North Dakota Small Business
Investment Company.
Mr. Schmisek reported they have received number of documents with changes because of length of time taken to set this up, change in subscriber's name. Mr. Swanson reported that original approval by the City of Grand Forks using Growth Fund monies, that since that time have established a Growth Fund Authority, and that investment should be held in the name of the Growth Fund Authority, however, that Authority has not had its election of officers since establishment of the ordinance and at this point no one that's capable of signing documents until that election occurs.

Moved by Babinchak and McCabe to authorize the city council to transfer ownership of its interest in the fund from the City of Grand Forks to the Growth Fund, and that the appropriate Growth Fund officials be authorized to sign the documents. Motion carried.

Mr. Schmisek reported they have received request for draw-down of 60% of the funds to be paid no later than April, 1995; and balance prior to the end of this year.

8. Matter of RFQ for wage study consultant.
Mr. Schmisek reported this is coming from the joint study committee made up of 3 council members, 2 CSC members, 2
department head reps. and 2 employee reps. and stated this is a recommendation from that committee to proceed with a study.
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Ken Vein distributed draft copies of RFQ for committee's review, and that it was committee's consensus that this is direction to take (get authorization to go through request process, and once qualified consultant negotiated with, come back to committee and council for final approval) and are requesting authorization to proceed with the process, which is outlined in the RFQ.

It was noted that a firm scope of work has not been established at this time. Mr. Carpenter stated there was a consensus of the committee that we want to come up with something to provide equity within a department and across departments. He stated that ultimate financial decisions in the hands of the council.

It was noted that they will advertise locally, trade journals, etc. Mr. Swanson advised that there are no requirements to bid services.

Mrs. Beyer addressed some concerns (advertising time schedule, providing old study to the consultant, etc.) and suggested that they review at a meeting of the joint committee.

After further discussion the committee held the matter for review by the joint study committee on Thursday, April 6, with report back to the finance committee on April 11, and to council on April 17.

9. Matter of River Forks Commission.
Mr. Swanson reported he has received communication from City of East Grand Forks, that they have adopted action to establish the River Forks Commission, they have appointed four individuals to act as their representatives to that body: Maury Finney, Dave Homstad, Marquerite Streifel, and Robert (Punky) Beauchamp with staggered terms; and that the City now needs to authorize the mayor to enter into a Joint Powers Agreement with the City of East Grand Forks.

Moved by Geller and McCabe to authorize the mayor to enter into the Joint Powers Agreement with the City of East Grand Forks. Motion carried.

Meeting adjourned at 6:15 p.m.

Alice Fontaine
City Clerk

Dated: 3/29/95.