Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, July 25, 1995 - 3:45 p.m.

Members present: Carpenter, Babinchak.

1. Matter of application by Conte Luna Foods for five-year
property tax exemption on building expansion.
Mel Carsen, city assessor, reported that Conte Luna granted exemption on original plant, they were granted exemption for warehouse addition and this application is for exemption on second warehouse addition. Committee raised question of how long City continues to provide that support, and would like more information on their finances.

Moved by Babinchak and Carpenter to grant preliminary approval of the application for tax exemption on a graduated scale of 100, 80, 60, 40 and 20% for years 1 through 5 and to establish public hearing for Monday, August 21, 1995.

Mr. Carsen stated that there should be clarification in legal description, that they have listed metes and bounds description, which should be lot and block (Lot 2, Block 1, Golden Harvest Addition) on both application and on public notice. (Mr. Carsen will notify Conte Luna re. legal description and request for additional information prior to the council meeting.)

Upon call for the question, the motion carried.

2. Matter of sale of City lot (Lot 1, Block 1, Medvue 6th Addn.)
Held in committee.

3. Matter of financing of detox facility.
Babinchak suggested holding this matter until all members present, however, Carpenter stated he would like to see issue come to conclusion, one way or the other; that August 7 is date for second reading of the ordinance on the zoning change. Carpenter reported that the Hospital Board had reviewed matter of an additional contribution and determined that they wanted to remain at their $20,000 contribution and not increase, that in talking with Dave Molmen the Board wants to see the project go forward, that they believe there is a need, but felt that the community also needs to respond, not just the Hospital, and so wanted to leave at the $20,000 commitment they had previously made.

He reviewed the three options for a center and estimates for renovation: 1) utilization of Mission Store for detox center, with Mission Store to relocate, that option is fairly expensive because they would need reimbursement for rent and utilities ($10-20,000/yr.), est. $100,000 + operating cost; 2) renovating second floor of the Mission Annex, which is presently used only on part-time basis, est. by Urban Development Office at $75,750.00, with largest part of cost for plumbing, heating, ventilation, air-conditioning costs; 3) new construction, 30x50'

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July 25, 1995 - Page 2

building at location previously discussed, est. $100,000, but drawbacks to that - would have to transport individuals.

Mr. Glassheim agreed that council needs to decide one way or the other on this issue, and reported that Center, Inc. awarded Bremer grant of $21,000 for renovation of any site, and that if they were not awarded operation of the facility, they would turn over to provider.

The committee reviewed the proposed financing:
1995 Operating Costs:
United Hospital $20,000
*City 5,000
$25,000
1996 Operating Costs:
United Hospital $20,000
NE Human Services 5,000
CDBG program 20,000
Human Needs 20,000
*City 35,000
$100,000

Renovation Costs (Option 2 - second floor Annex site)
Bremer grant $ 21,000
*City/CDBG program 42,500
Grand Forks County 12,500
$ 76,000

*$100,000 budget allocation

Moved by Babinchak and Carpenter to deny the proposed financing of a detox facility.

Scott Hennen, KCNN K-Lite, was present.

It was noted that United Hospital in their original request to State Health Board for certificate of need for United Recovery Center made commitment re. detox services, they cited that they would provide for social detox services regardless of ability to pay. It was stated that United will provide medical detox. Member Babinchak stated that we have County jail that is rated for detoxification, but they don't want to have anything to do with providing services, will contribute $12,500 for one year only because of cuts resulting from legislative changes, and questioned why City should bear burden. It was also noted that Minnesota requires detox, Polk County contracts through Glenmore.
Mr. Swanson advised that issue needs to be decided on policy basis; liability follows regardless of decision and shouldn't be deciding factor.


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Upon call for the question, Babinchak voted for, and Carpenter voted against the motion. Motion to deny will be forwarded to council with a 1-1 vote.

4. Matter of review of ordinance re. regularly scheduled council meeting dates.
Mr. Swanson reported that the ordinance mirrors State law, gives ability to call special meetings, that council does have ability to alter meetings from first and third Mondays; that conflict will come up periodically, and would leave to council's discretion; however, they do need to be aware of problem if ordinance changed and if council changed meeting date on short notice, re. pre-advertised public hearings, etc. It was also noted that if council meeting time changed there could be conflict with other committees. There was some discussion re. relatively few times conflict would occur and it was moved by Babinchak and Carpenter to receive and file. Motion carried.

5. Matter of guidelines for 3-year remodeling exemption.
Mr. Carsen, city assessor, reported that State Legislature gave cities authority to put restrictive guidelines on the three-year remodeling exemption, and reviewed six possible conditions outlined in his communication of July 19: 1) age requirement on property, 2) limited to defined area of city, 3) exclusion of certain improvements, 4) exclusion of improvements paid through government grants, etc. 5) limit number of years for certain properties, and 6) time within which exemption claim would have to be made.

After some discussion the committee noted that the bill provides great deal of discretion to local communities, and stated they would like to see initial draft of guidelines: 1) restricting age of property to 25 years for residential, at least 15 years of age for commercial and change in use, 2) commercial exemptions limited to downtown business district, locations of zoning or urban renewal projects; no restriction on location of residential property, 3) project of at least 10% of value of building or $5,000 to go forward, max. based on circumstances, location, total cost, etc. and ceiling on commercial property outside of B-4 zones, limiting exemption outside special zone at 1 or 2 years, 6) as program is to be incentive for remodeling, limit to that; require application within specified period at time after taking out building permit.

Held to August 15 meeting.

6. Matter of emergency levy funds.
Mr. Swanson reported that City has emergency fund, that by State law City limited to a balance in that fund, and as of 1995 are quickly approaching that balance which is currently $254,000, and if apply 1996 levy would exceed statutory amount; that the

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July 25, 1995 - Page 4

$254,000 is a pittance in case of significant flood, in event of bad winter, etc. He reported that he had advised Mr. Schmisek that decision should be made as to whether the City wishes to continue to accumulate in the emergency fund that would exceed statutory amount, that as Home Rule City have ability to do that if adopt ordinance authorizing that the emergency fund may be carried in excess of statutory limit. He stated that only way to get to emergency funds is by declaring emergency. There was some discussion re. use of Loan and Stabilization funds for emergency if Emergency Fund limited. Mr. Swanson stated that amendment would give council ability to exceed statutory limits; committee stated that decision would be made at budget time whether to levy to exceed or not. Moved by Babinchak and Carpenter to introduce ordinance for first reading to allow City to exceed statutory limits. Motion carried.

7. Matter of ordinance relating to issuance of revenue bonds.
Mr. Swanson stated he would classify items 7. and 8. as housekeeping ordinances, that they have on the books two separate ordinances on issuance of revenue bonds and issuance of sales tax revenue bonds which date back number of years, that Mr. Endorf of the Dorsey firm has reviewed those ordinance and has some concerns (letter in packet) about conformity with certain IRS requirements, and has redrafted the ordinances suggesting they both be introduced. Mr. Swanson stated he has reviewed the proposed ordinances and finds in order except ordinance relating to reserve revenues bonds which requires some additional language in the repealing clause, content-wise no problem with either one and recommended both be introduced for adoption.

Moved by Babinchak and seconded by Carpenter to introduce ordinance for first reading. Motion carried.

8. Matter of ordinance relating to issuance of sales tax revenue bonds.
Moved by Babinchak and Carpenter to introduce ordinance for first reading. Motion carried.

9. Temporary and overtime statement for June, 1995.
The committee reviewed the statement; Saroj Jerath, deputy city auditor, reported that MIS overdrawn by $209.32, and transfer of funds is being made to cover this. Moved by Babinchak and Carpenter to receive and file. Motion carried. (comm. only)

Meeting adjourned at 5:05 p.m.

Alice Fontaine
City Clerk

Dated: 7/27/95.