Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, April 11, 1995 - 3:45 p.m.

Members present: McCabe, chairman; Babinchak, Geller.

1. Application by ProMark One Marketing for five-year property
tax exemption on proposed expansion at 4324 University Ave.
Steve Moack, ProMark One Marketing, stated they are requesting tax exemption for center they are occupying, phase II of the facility as they expand their operations; currently employ 173 people, that since September, 1994 through March had a payroll of $650,000; est. payroll in Grand Forks area to be in excess of $3 Million in 1995 as they expand.

Mel Carsen, city assessor, reported that ProMark currently occupying 9,474 sq.ft. in building that contains approx. 15,000 sq.ft., under phase I, which they occupied in September, 1994; now plan to occupy an additional 4,050 sq.ft. under Phase II on May 16. He stated that the problem with granting an exemption to property already occupied, there is no provision in State Law to allow that; this type of exemption has to be applied for and granted prior to occupancy of the building, discussed with Mr. Swanson, city attorney, and he concurs, so this type of exemption couldn't extend to property already occupied, but could for property which is going to be occupied May 16. He stated that property is currently fully assessed, so taxes for any space they would occupy (portion of building and parking lot) would come off tax rolls and go back on rolls on a graduated scale. He reported there is one other way they could do this, through 3-year remodeling exemption, which would freeze value at value prior to remodeling, owner would have to make application, and could pass on to tenant. It was noted that ProMark's lease states that any benefits would be passed on to the tenant. Mr. Carsen suggested they apply for the 3-year remodeling exemption for the existing space, and 5-year for proposed expansion. He also noted that committee would need to set public hearing today.

Dick Olson spoke in favor of the exemption; that they missed on first one because of tight time-lines.

Moved by Babinchak and Geller to grant the five-year tax exemption as follows: 100% for the first year, 80% for the second year, 60% for the third year, 40% for the fourth year and 20% for the fifth year subject to the public hearing; and further that the public hearing be set for Monday, May 15, 1995. Motion carried.

2. Applications for 3-year remodeling exemption on the following
properties:
Mel Carsen, city assessor, reviewed applications and recommended approval:
a) 715 Lewis Boulevard - Simonson Station Stores, Inc.
warehouse building on Lewis Blvd, qualifies except for canopy.
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b) 2475 South Washington Street - Holbrook, Inc. (Floor to Ceiling) on S. Washington, qualifies
c) 1901 32nd Avenue South - Lumber Mart, Inc., qualifies except for addition and new storage building.
d) 905 North 25th Street - Rodney and Patricia Bubach residence. qualifies except for addition
e) 120 North 4th Street/302 2nd Avenue North - Grand Forks Herald, improvements qualify.
Moved by Geller and Babinchak to approve the applications, with exceptions as noted by the assessor. Motion carried.

3. Matter of report from subcommittee on funding sources for
detox center.
Member Geller reported the subcommittee looked at funding sources other than property taxes, and presented their findings to the committee for consideration: 1) United Way - $8,000, but can't guarantee; 2) United Hospital - $20,000 annually; 3) Beverage Dealers - discussed with Mr. Swanson and Mr. Schmisek use of portion of revenue received from liquor licenses - possibly 15% of the fees or $26,250, based upon last year's figures; 4) Grand Forks County - $12,000 - some question how long that would continue; 5) $20,000 CDBG (talked to John O'Leary); 6) $20,000 from Human Needs (monies set aside from excess sales taxes); for a total of $107,250.00/year, with no funds from property taxes. He stated that the $107,250/annually, which, again based upon information from Fargo where they operate detox center for $97,000/year, would be sufficient funding. He stated it appears they would generate $100,000 out of various diversified funding sources. He also noted there would be other costs in erecting structure; but have budgeted $100,000 in this year's budget, could build structure to serve this purpose for $100,000, with funding stream in place to build and operate and they felt it was reasonable plan, that others need to look at, and would prefer not to take action today. He stated they would like to see something within next month or so to go to council. He stated that if plan unacceptable and council doesn't want to fund, they won't.

Member Geller suggested they hold for 2 weeks and would encourage everyone to consider and if other streams of revenue to diversify, to submit those suggestions.

There was some discussion re. future funding, and Member Geller noted funding for anything City funds not guaranteed.

It was noted that United Hospital very supportive; Mrs. Sande stated that their certificate of need for United Recovery stated they will do detox, they have to do (they are doing medical detox). Held for 2 weeks.

4. Matter of consolidating building management (police building)
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Mrs. Sande, 1110 Belmont Road, who had submitted this matter for consideration, reported this had been referred to the mayor and asked that the matter be held.

5. Matter of RFQ for wage study consultant.
Dan Gordon, human resource officer, reported that at the last meeting of the joint committee some changes made in RFQ re. time-frame and scope; extended time-frame because of advertising, discussed evaluation criteria and deleted point system, cost ($40,000 set aside for this); that focus of joint committee in RFQ to see what consultants out there, and if meet our needs; he also reported that goal is to have approved by December 31.

Moved by Babinchak and Geller to approve the Request for Qualifications for consultant to perform wage study for the City of Grand Forks. Motion carried.

Member Geller asked whether joint committee would evaluate qualifications of the consultants and make final recommendation, and questioned whether this committee had authority to do that. He also asked if there was any concern re. make-up of the committee or process. Mr. Gordon stated he had heard no comments.

Moved by Geller and Babinchak to request the mayor to authorize this committee to evaluate the proposals and provide recommendation to the city council on the selection of a consultant to do the wage study. Motion carried.

6. Budget amendments.
Saroj Jerath, dep. city auditor, reviewed budget amendments with the committee:
a) Civic Auditorium - $259.00
To transfer funds from Cash Carryover to General Equipment to replace picture in office.
b) CBD Authority - $24,000
To transfer monies from reserve fund to CBD Auth. fund to pay engineering costs for parking ramp project.

Moved by Babinchak and Geller that these budget amendments be approved. Motion carried.

7. Consideration of bids for city flag.
Saroj Jerath, Dept. City Auditor, reported that three bids had been received and distributed copies of bid tabulation. After review of the bids, it was moved by Geller and Babinchak to accept the bid of Deitz Business Promotions for 50 3'x5' nylon outdoor flags in the amount of $1,961.65, and 500 4"x6" muslin desk flags at a cost of $1,006.50 (prices include set-up costs).
After further discussion it was moved by Geller and Babinchak to
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amend the motion to include provision that monies to purchase flags be made from Loan & Stabilization Fund and to be reimbursed from sale of the flags through civic auditorium and with adminis-trative costs to be determined. Motion carried.

Motion, as amended, carried.

Meeting adjourned at 4:45 p.m.

Alice Fontaine
City Clerk

Dated: 4/11/95.