Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, June 27, 1995 - 3:45 p.m.

Members present: Carpenter, Babinchak, Geller, McCabe.

1. Matter of negotiation of lease with Senior Citizens' Assn.
Mr. Swanson, city attorney, reported he had prepared lease incorporating changes as suggested by the committee. A rep. of Senior Citizens Center was present and stated that lease appears to be in good order as far as they are concerned. Mr. Swanson reported this is a five-year lease, identified utilities paid by Senior Citizens, and clarified maintenance and upkeep that lessee will make, lessor responsible for roof, parking lot and structural portions of the building.

Moved by Babinchak and seconded by McCabe to approve the lease and authorize proper City officials to sign said lease. Motion carried.

2. Matter of sale of City lot (Lot 1, Blk. 1, Medvue 6th Addn.
Mr. Carsen, city assessor, reported that valuation was set at $32,000, that he valued property at $8,000 per unit; lot is somewhat low but can be filled very easily; lot is behind other townhouse units; and reviewed comparables when he first established price; that property is in flood plain, and lot slopes towards Coulee. He stated there are 4 residential units per lot. Mr. Doe stated he anticipated two duplexes or 4 units.

Geller reported present.

Mr. Carsen also reported this is nice lot, backs up to the Coulee, private drive off Knight Drive, agreement between City and those property owners re. use of driveway. Tracy Doe stated he agrees with appraisal - with specials paid.

Al Grasser reported they have identified some potential costs, actual special assessments would have to be determined by Special Assessment Commission. He reported they have started procedure for storm sewer; but need to address sanitary sewer and water- main, with water service and fire protection off Columbia Road, at est. cost of about $140,000 for three utilities total; or $40-45,000 per lot, and suggested they might want to proceed with installation; however, committee stated that if they install and City doesn't sell lots, City would be responsible for assess- ments. He stated he was unable to determine cost of street.

Mr. Doe stated he was concerned about timing, if can't get utilities in, looking at next year. He also stated if he was able to negotiate for first lot, would be very interested in other lots.

Moved by McCabe and Babinchak to authorize the city auditor, city assessor and city attorney to negotiate for sale of the property
and to bring back in 2 to 4 weeks. Motion carried. (comm.only).

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3. Matter of land purchase for new southside fire station.
Chief Aulich reported that in January, 1995, City agreed to purchase parcel of land 130x330', however, easterly 30 ft of the parcel had to go for road easement, and there is another change in the purchase agreement; that he recommended that the City offer the right of first refusal to the seller, but the seller would prefer conditions in section 8 (seller's option to re- purchase); that the seller has offered to sell the property, 130'x300' for the same price, including the clause whereby the seller would agree to buy back for the same price if City doesn't use for fire station or other public use for a period of ten years. He stated he would expect City to utilize within 10 years; that current station on southside is way too far north, esp. in view of fact that central station built at Washington and DeMers, that fire stations should be 2 1/2 to 3 miles apart, giving each station a protection district; now southside fire station is in the central fire station's protection district and need for station to the southwest become more acute.

Mr. Swanson stated that the committee and council have already approved purchase, issue arose re. right of first refusal, and stated that he doesn't believe that section (re. seller's option to repurchase) in compliance with either State or local code, and also financial matter that needs to be addressed; that over a period of time utilities will be put in, and City would be sel- ling property back to seller at purchase price without any bene- fit for the utilities. He stated his recommendation is not to approve seller's option to repurchase but rather to grant a right of first refusal, that if City determines that property not to be used for fire station or public use, the City would place pro-perty up for bid and they would have opportunity to match highest bid, if they chose not to would be sold to highest bidder.

Steve Adams, rep. property owner, reported they offered to City at a purchase price $58,000 in 1990, later sold to Wal-Mart; then chief came back again, and offered parcel to City for $68,000, which is about half of what they sell commercial land for and if City going to be their competition, want right to buy back at same price within ten years; that if City builds on it no problem. The suggestion was made that if City doesn't building the property it would not be offered for sale until after 10 years. Mr. Adams agreed to that.

After further discussion it was moved by Geller and Babinchak to authorize proper City officials to enter into an agreement as modified (with City to either build on the property or to hold for ten years). Motion carried.

4. Matter of financing of detox facility.
Chairman Carpenter reported that they had previously approved motion for financing of a facility anticipated to be in the Berg

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building, that is no longer an option, and the matter brought back to the finance committee to consider a financing plan for a future location, i.e., City Mission. He stated that renovation and relocation costs at the Mission would be greater than what they had anticipated for the Berg building, and would need to take more of the $100,000 set aside for renovation versus what was to be used for operation for the first three years under that financing plan so need to approve something different to send back to council reflecting a different site for the facility. He stated that they need to have some general discussion on what they want and/or need to do. He stated that he had visited with Dave Molmen at United Hospital and requested that they increase the amount of their annual contribution; he was favorably inclined to that, however, would have to take to his Board sometime this week, but hasn't heard back. He reported they consider two options, one to increase annual subsidy, or two, coming up with upfront money for renovation which would allow City to continue the annual subsidy proposed before. He suggested holding for 2 weeks. Mr. Schmisek asked whether the Mission had agreed to do this, and that holding was a good idea. Mr. Carpenter stated that what he is hearing is that if Mission site doesn't come through, won't be doing a detox. facility.

After further discussion re. funding, the committee held the matter for two weeks for additional information re. renovation costs, etc.

5. Matter of financial assurance for landfill closure and post-
closure costs.
Mr. Lambrecht reported that the City is in the process of closing the landfill, that landfill will be operating for approx. the next 5 years, so between 5 and 8 years will be completing closure, have already invested approx. $900,000 toward closing the landfill and have approx. $5.4 Million of liability remaining to close the landfill and maintain for 30 years thereafter ($4.2 million to close and $1.2 million to maintain for the 30 years after closure). He reported that under federal law there is a requirement that the owner of a landfill, have the financial wherewithal to carry out this obligation; that City is in good financial condition and sanitation department is quite solvent.
Mr. Schmisek reported that they are trying to use a combination of methods, one being the reserve account and the other a financial test and corporate guarantee; that under the reserve account the City may use a savings account or cert. of deposit or other account where monies set aside to cover the costs of liability. He stated that they have about $3.1 million balance that they can set aside in this account with intention that as
the costs drop and interest earned there will be a crossing of the line and use these funds to draw down until have the amount that would guarantee post-closure cost after done. He stated

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that there was concern re. assignment of the certificate of deposit. He reported that the other method they will use is called financial test and corporate guarantee, which requires City to go through the financial report and finances every year and answer questionnaire showing our financial capability to fund the rest of what our closure and post-closure costs are. He stated they are trying to set money aside so won't have to do that annually and insure corporate guarantee we do have the money there and know we can handle it. He stated they made that recommendation to public service last night and they made recommendation to finance that they would agree and go along with putting into a reserve account of up to $2 million and also submit the financial test and corporate guarantee for the $3.5 million. He stated their recommendation is to do the reserve account and financial test at this point in time, subject to the review of the city attorney on assignment part if not a different way of doing it as far as making sure it usable by the Health Dept. if necessary.

Mr. Swanson stated that his concern is that if true assignment, City would no longer have any rights to the CD. it is assigned to the State, and State has lost its sovereign immunity and subject to law suits as any other party, and wouldn't want the City of Grand Forks funding litigation that the State is involved in, and City is not, and suggested putting in escrow or trust agreement rather than pure assignment.

Moved by Babinchak and Geller that we approve establishment of this fund and pursue financial test method. Motion carried.

Mr. Swanson advised that when they enter into specific agreement will come back to committee.

9. Plans and specs. for parking ramp, Proj. 4285, Dist. 10.
Don Tingum stated they were back for second phase of the project, to request approval of the plans and specifications and set the bid date for August 9, 1995. He reported that they went back and talked to the CBD committee re. the project with new developments (Silverman's and Plunkett's leaving) and that comm. still felt very strong re. building of a ramp and asked engineer to include alternate to remove one floor in the bids, and by doing that alternate felt the bids could come in around $1 Mil. for the project and the CBD would have the monies on hand and would continue the assessment for four more years at the present location and add in the $10,000 lease payment and they would have enough money to pay for the project through a bond issue through their own revenues without the alternate assessments to the other people in the district; so with alternate would ask for support in asking for proceeding with the bidding to see what objections are and paying for without additional assessment. Mr. Tingum stated they will still go throgh same protest period.

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Mike Murie stated it was more expensive per stall to bid without top level, Parking Auth. originally talked about that option but didn't go with it, that it is feasible but cost per stall higher. He also stated that ramp could be built and add third level at later date, but a premium to be paid by doing that.

There was some discussion re. ground prep., and Mr. Murie stated still same extent, and by removing one level doesn't preclude the need to go down to deeper level with footings, is possible make footings smaller unless design with potential future addition.

Moved by Geller and McCabe to pass a resolution approving the plans and specifications for this construction and further that the city auditor be directed to advertise for bids on the project, with a bid opening date of August 9.

The committee expressed some concern re. timing of the project; Mr. Tingum stated that the CBD Authority requested changes and alternative bids, and can't guarantee that they have all the cash to cover this if bids come in high, but if bids come in at $1 million they can handle.

The motion carried; Babinchak voted no.

McCabe excused.

10. Request from Forks Freightliner for 5-year property tax
exemption.
Mr. Schmisek reported his office received call to place this item on the agenda but have not received written application. Bray Croy, Forks Freightliner, 4200 Gateway Drive, presented letter explaining their project (new truck franchise dealership) and requesting a 7-year tax exemption to help offset the expenses incurred to build this project, that improvements to the ground alone will run $76,000. A rep. of Forks Freightliner stated they had talked with John O'Leary, and were asked to bring to finance and then go to Planning and Zoning on July 5, brought in to make committee aware.

There was some discussion by the committee and staff as to what method of exemption and/or financing this project would qualify. Mr. Carsen advised that new or expanded business exemption excludes retail-type development by our own guidelines. Mr. Swanson stated he would hesitate to give guidance, would like to
have more time to investigate. It was suggested by Mr. Schmisek that he meet with these gentlemen and with Mr. O'Leary and then
with finance committee at special meeting on Monday at 7:00 p.m.
Reps. of the business stated that building has been removed from the site, and were going to proceed tomorrow and have done by Monday night. The committee stated they do not have enough

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information to provide adequate counsel, that by continuing work ap. might not be eligible, however, may not be eligible in any case. Mr. Swanson suggested they contact their own attorney and investigate options and advise on what decision they should make. Held until Monday, July 3 at 7:00 p.m.

6. Matter of replacement of computer equipment at police dept.
Mr. Schmisek presented proposals for purchase of an IBM AS/36 to replace system in the police department sourced from IBM at a net cost of $15,450.00 and sourced from SCI at a net cost of $14,602.00. After some discussion re. bidding process it was moved by Babinchak and Geller to authorize staff to call for bids for upgrading of the IBM System 36. Motion carried. (comm. only)
7. Matter of request for figures on tax levies and per capita
comparisons with other cities.
Mr. Schmisek reported that his office has requested information from other cities (Fargo, Minot and Bismarck) and intent is to look at mill levies, per capita costs, cost per gallon of water produced, etc.; that Mr. Glassheim's concern is that some comments made re. costs in the city of Grand Forks
and need to have some justification for what's going on. He stated that they will put together laundry list of things for comparison. Mr. Carpenter stated they need to compare Fargo as well as Minot and Bismarck, breakdown of mill levies, what's coming from commercial, residential, overall cost of government per capita, etc. which may give us some information to see if out of line or if have fairly efficient government compared to other cities and have information to combat general statements that Grand Forks is more expensive. He stated that this committee could provide him with list of things they would like to see. Mr. Geller stated that it was important to see not only costs but level of service to make adequate comparisons (ie., number of police officers, patrol officers per 5,000 pop.; watermain breaks, crime rate info., number of fire and loss of valuation; how structure work force, salaries, what percentage salaries and benefits are of total budget). Held in committee.

8. Temporary and overtime statement for May, 1995.
Mr. Schmisek reported they are within budget. Moved by Babinchak and Geller to approve the statement. Motion carried. (committee only)

Meeting adjourned at 5:40 p.m.

Alice Fontaine
City Clerk
Dated 6/29/95.