Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, October 10, 1995 - 3:45 p.m.

Members present: Carpenter, Babinchak, Geller, McCabe.

1. Applications for cancellation of sidewalk assessments (under CIP policy):
a) 809 North 4th street - $709.59
b) 2224 2nd Avenue North - $2,869.96
c) 2216 2nd Avenue North - $696.24
Mr. Schmisek reported that the applications and income information had been reviewed by Mr. Sailer, and that applicants qualify under CIP guidelines. Moved by Babinchak and McCabe to approve cancellation of the sidewalk assessments. Motion carried.

2. Request by EERC to obtain clean cities designation.
Bob Gustafson, Chamber of Commerce, stated they were approached by the EERC to be a partner in helping Grand Forks become 39th city in 23 states to secure a clean cities desig-nation; that they were approached with the idea that business has something at stake along with government and that it needs to be a public and private partnership with the outstanding profes-sional resources of the Energy & Environmental Research Center, with Tim Gerlach being the coordinator for this, and saw the opportunities for a partnership which they chose to explore. He reported that a presentation was made to the Chamber several months ago, that this went to their Board, and Board adopted with commitment that they would provide initial financial support, help gather up public and private sector stake holders who would stand to benefit by the clean cities program, in an attempt to raise not only funds but interest in pursuing this government/ industry partnership to expand the use of alternative transpor-tation fuels. He stated that they have made commitment to help raise funds from the private side to match a public contribution towards a total $50,000 goal; $25,000 of which has been committed by the State Energy Conservation Program, talked to NSP and Mr. Dalglish committed resources of the company to make an initial financial contribution to the private funds, along with asking Doug Foy to assist from the private side as a coordinator. He stated that as part of the process they need to secure a financial investment on the part of the City to partner in this partnership, and then follow with the strategies which are de-tailed; the benefits are laid out; and Mr. Gerlach will address the technical questions. He urged committee's and council's consideration of this as a very positive step in visioning for the city of Grand Forks, quality of life, etc.

Tom Hagness spoke in behalf of their industry, and that if they can support alternative fuels in a community for the clean air act, thinks they should participate, and would like City to find funding if possible; thinks community and industry would benefit from this.


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Tim Gerlach, EERC, reported that an individual he met at a national clean cities conference in St. Louis this past September announced the availability of funding from Gas Research Institute for research in alternative fuel vehicles; this is type of thing they are hoping to bring into community and to the EERC; they are looking at ethanol as being a strong alternative fuel in ND; that there are others ie., propane and other variations of those fuels.

Geller questioned relationship between doing appropriate research and the assistance to cities, businesses, industries, in utilizing alternative fuels. cost effectiveness, efficiency and issues of air quality; that it seemed like funding for a research endeavor, and how does that translate into relatively short term because of 12-month time, and what happens after 12 months. Mr. Gerlach stated funding not for actual research but coordination, coalition building program; alternative fuel vehicles have been around for some time, technology proven; what they are looking at is building community support for them; that it is time; all across the county through clean cities program, cities, private fleets, federal fleets saving money using alternative fleet vehicles while at the same time helping preserve and improve air quality. He stated they are not now going to do actual research, but there are potential problems with fuels, vehicles, etc. that they are hoping to pull in; that those designated as clean cities have first priority at some of those funding sources. He stated that perhaps City looking at purchasing buses next year, and there are perhaps funding routes to pull in cost differential between the traditional fueled diesel bus and others (bio-diesel, electric, etc.) He stated that the 6 to 12-month period is to build this coalition of stake-holders. The designation is actually the beginning of the plan, the plan will be a five to ten year plan, outlining what fleets would be interested in picking up vehicles over that time period, trying out, etc. He stated they are hoping to support the program at a much lower level, through stake-holder dues; up to communities to develop program on their own and will be included in the plan. He stated they had hoped for full funding from State Energy Office but they funded half (partnership between state and city); that they are hoping to go out and continue building stake-holder membership, look at as a regional effort. Mr. Gerlach stated that he sees this as being supported through membership dues and help of State Energy Office, that if get designation, will have snowball effect; that there are lot of benefits to this program. He stated salary would be good share of the $50,000, they do have full budget worked up.

The committee asked where balance of funding coming from: $25,000 from State Energy Office, $10,500 from City, NSP and Chamber contributed $1,000 each. Mr. Gerlach stated that they are still
working with other potential stake-holders (ethanol interests and
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groups like that), and also through National Alternative Fuels
Lab. at EERC are obtaining permission to use $5,000 of that money; they are going to ND Corn Utilization Council looking for an additional $5,000 there; and trying to build piece by piece, not allowing any one fuel or interest group to input too much, but to remain fuel neutral. He stated he would be coordinator, with help from Doug Foy, Gary Lloyd, etc.

Chairman Carpenter reported that the Mayor had identified two potential sources of revenue in communication for City's share of $10,500 - Research and Development Fund, $7,000, and University Assistance Fund $3,500. Mr. Schmisek stated he wasn't aware of what Research and Dev. Fund was, but there is a Resource & De-velopment Fund presently being used to help fund civic center process comm. which is designed by State Code for promotion of the city; the Univ. Assistance Fund is an amount of money trans-ferred to UND about two years ago to funds projects such as this (windmill project, etc.) and there is $3500 remaining in that fund. There is presently $52,000 in Res. & Dev. fund but trans-ferring $20,000 today for civic center process comm. expenses.

After further discussion it was moved by Babinchak and Geller to approve supporting the clean cities program with funding as follows: $7,000 from excess sales tax, and $3,500 from the UND Research Fund, and to amend budget to increase Contingencies by $7,000. Motion carried.

3. Matter of attendance at National League of Cities conference (1995 Congress of Cities) in Phoenix, AZ (11/28-12/03/95) Mr. Schmisek noted that this was referred by council; and that Mayor Polovitz had stated he would be attending this conference. Member Geller stated that he will be in Phoenix during that time and would attend if they so directed (cost to City would be registration fees). There was some discussion re. who should attend, ie., president of council, committee chairs, etc. and committee suggested that there is benefit gained from attending the conference, and that 1 or 2 council members attend each year (on rotating basis), could determine policy at later meeting. It was noted that advance reg. date is 11/03/95. It was also noted that this could be budgeted every year. Moved by Geller and Babinchak that two members of the city council be authorized to attend the National League of Cities (1995 Congress of Cities), that volunteers be solicited (if more than two, determine by drawing straws). Motion carried.

4. Matter of review of franchise fees for electrical and gas
utilities.
Howard Swanson, city attorney, reported that City has franchise agreements with Northern States Power Company for both electrical service and natural gas service; the fee presently 2%. and that is typical fee throughout the state and regionally. He

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reported that under the franchise agreement that fee expires on December 31 of this year unless we extend or alter the level of the franchise fee; that he is making committee aware that they need to act, it is done by ordinance, and that there are some notice provisions. He stated that we have to notify NSP of City's intent with respect to the fee; and would defer to others as to the level of the fee; that several years ago when franchise agreement was up for negotiation there was strong effort by NSP to eliminate the fee; that City needs to act: either to eliminate fee, maintain the fee, or increase the fee.

Mr. Schmisek stated he can't justify increase and when other communities are at an average of 2%, his recommendation would be to confirm the 2%. He stated that this is significant part of general fund budget, and have budgeted into 1996, (about $450,000).

Mr. Swanson did report that there he is aware of some small communities in MN who did reduce and ultimately eliminate the fee. He noted that City does have franchise agreement with Nodak REA also. He reported that they gave NSP longer franchise term, however, divided into terms for review of the franchise fees.

Moved by Geller and Babinchak to introduce an ordinance establishing the electrical service franchise fee at 2% for the period January 1, 1996 through December 31, 2002. Motion carried.

Moved by Geller and Babinchak to introduce an ordinance establishing the natural gas service franchise fee at 2% on users under 200 mcf's and at .75% for users of 200 mcf's and over for the period January 1, 1996 through December 31, 2002. Motion carried.

The committee asked Mr. Swanson what status is on cable t.v. franchise agreement; Mr. Swanson reported they are negotiating with TCI, but of 20 some items in the agreement, have reached consensus and agreement on the majority of them. He stated that area where some work remaining: some definitions they are in dispute about; some concern what to do with channel 3, as to whether it is classified as public access channel, which means that anybody that wishes to have access has right to do that, or if designate as government access channel that controls who has access to it, or if designate as educational access channel. He stated there is concern that they do not get into situation like Kansas City, when Area Nations wished to broadcast their propaganda videos, are working with the University. Chairman Carpenter stated he would like to see City have some opportunity for access; Mr. Swanson stated that City does have access now and direction he is heading is to remove City from any of the administration or discretion or decision making in that channel

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primarily for liability purposes. Mr. Carpenter stated they may want that as communications access during the future (broadcasting council meetings, etc.), don't want to exclude ourselves. Mr. Swanson stated that if handled under educational access channel, we are not excluded but don't have ability to mandate (would need to allocate portion of the franchise fee to the funding of the broadcast facilities and related costs). He reported that the University has been approached on materials that they didn't feel comfortable broadcasting, so they are really concerned. Mr. Carpenter stated that in June of 1996 there is going to be a measure on the ballot re. publishing of minutes, that he disagrees with that, that there are many other avenues of people getting information, one of which may be through public access channel or through computer, etc. but doesn't want to foreclose City having that ability in these negotiations, that might be some alternatives to publishing in the official newspaper. Mr. Swanson stated it wouldn't be foreclosed but would be dependent upon whatever arrangements they made with Channel 3 if they follow direction he has started City on.

Mr. Swanson reported they have more discussion re. audit reports
and certified documents, etc. The franchise agreement with TCI expires in the fall of 1996, and are looking at approval in summer of 1996.

5. Matter of establishing prices and offering for sale City-
owned lots in Auditor's Subdivision No. 27 (loc. between I-29
and N. 42nd St. and between Hwy 2 and 16th Ave.N.
Mr. Schmisek reported letter and map enclosed in packet from Mel Carsen, city assessor, recommending value on lots received back for taxes, and committee needs to establish value and authorize sale. Mr. Carsen reported he has established value equal to $0.40/sq.ft. as follows: Lot 1, $7,300; Lot 2, $11,000; Lot 3, $9,900; Lot 4, $10,600; Lot 5, $12,100; and Lot 6, $12,200. Moved by Geller and McCabe to establish value as recommended by the city assessor for the lots, declare the property as surplus, and authorize advertising lots for sale.
Motion carried.

6. Matter of proposed private vehicle reimbursement policy.
Mr. Carsen reported he met with employees who provide their private vehicles for City use, and discussed concerns, etc. and reviewed new proposed policy with the committee; established 3 flat rate tiers: 1) no flat rate for up to 399 miles of usage, 2) $20/mo for usage between 400 miles and 1,799 miles per year; and 3) $50/mo for employees who drive more than 1800 miles per year; that policy carries changes from way presently done: it would tie mileage reimbursement to the IRS allowable standard, which is currently 30-cents/mile and which is what City currently paying; it increases out of town reimbursement from current 22-cents/mile

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to the IRS allowable reimbursement, which is currently 30-cents/mile. He reported that based on 1994 usage, 10 employees would receive $20/mo base and 11 employees who would receive $50/mo base (47 employees using private vehicle for City use). He reported that the 1800 miles are people who use vehicle on a daily basis, etc. Mr. Carsen stated that if individual being reimbursed for in-city mileage the wear and tear on vehicle is more than if drove out of town; and by forcing people to have vehicle available on daily basis whether use or not. It was noted that there is no written policy where individual required to use private vehicle, etc.

There was some discussion by committee re. need for vehicle policy, matter of motor pool, matter of allocating vehicles to departments, and need to study the matter.

Moved by Geller to approve the proposed policy and institute on a year's trial basis, effective January 1, 1996 and with a sunset clause of December 31, 1996; Babinchak seconded the motion. Motion carried.

Geller excused.

7. Matter of guidelines for 3-year remodeling exemption.
Mr. Swanson submitted proposed guidelines for review and or granting of exemptions, that guidelines incorporate state law and suggestions from the committee. and reviewed with the committee.

The committee held to allow for their further review and/or comments before forwarding onto the council. Mr. Swanson reported that the statute effective August 1, 1995, so adoption of policy could be from that date forward or at a future date.

Mr. Carsen reported that he currently is holding 7 or 8 appli-cations; Mr. Swanson stated he would have concern to retro-
actively apply guidelines and committee directed Mr. Carsen to process the applications.

8. Matter of tax increment financing and tax exemptions.
Mr. Schmisek reported they are looking for approval/direction from the committee to do an establishment of guidelines for tax increment financing and for tax exemptions in the slum and blighted areas, that currently they don't have policy/guidelines. He stated he has received request from Innes Construction who is converting post office building into office facilities and have asked for tax increment financing; that this is very small project to try to do bond sale on, and can't keep going to the market with these small projects. He stated they are looking for direction, whether to establish guidelines, when it's appropriate to do tax exemption vs. tax increment financing, and to establish application process. Committee stated that they need policy/
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guidelines in place and directed that they need to do as soon as possible. It was also noted that Wally Dornfeld of Springstead has great deal of concern from financial perspective re. effect on bond rating when have multiple issues in a given year for small amounts. Mr. Swanson stated they could place moratorium on applications until policy in effect; Committee stated they don't have to do tif, can say no; that committee may not do tif but would consider tax exemption.

Mr. Schmisek reported that since he has received request from Innes for tax increment financing, his intent was to send communication back and ask for full documentation on project, revenue stream, etc. Committee suggested that he tell applicant that it is highly unlikely that the committee will do tax increment on small project, but may consider tax exemption.

Committee held for draft of guidelines/policy (city auditor, city attorney, city assessor and dir. of urban development) until first meeting in November and in interim to discourage current requests/applications.

9. Matter of report on tax levies and per capita comparisons
with other cities.
Held in committee.

10. Budget amendments.
a) Resources and Development - $20,000
Mr. Schmisek reported this amendment is to reallocate part of cash carryover to fund costs for the civic center project). Moved by McCabe and Babinchak to approve. Motion carried.

b) Central Purchasing - $5200
Mr. Schmisek reported this amendment to use Loan & Stabilization Funds as a loan to purchase initial items (flags and City logo items), that fund will be reimbursed upon sale of those items. Moved by Babinchak and McCabe to approve. Motion carried.

11. Matter of reclassification of Appraiser III position in
assessing department.
Mr. Schmisek reported that this matter has been before Civil Service Commission, who has now referred back to committee for clarification on whether this is one of the exempted ones or not. Mr. Carsen reported this request came to Civil Service right after the Porter Eberhardt study back in 1992, together with Appraiser I, Appraiser II and Deputy Assessor; that the Commission considered all four, but because didn't have incumbent in Appraiser III spot they didn't make recommendation; that this was covered prior to moratorium , along with MIS, and now Mr.
Marhula thinks this was not one those items. Mr. Carsen stated this has been in the budget since 1990 and they want to fill that MINUTES/FINANCE COMMITTEE
October 11, 1995 - Page 8

position. He stated that if acted on now, there would not be any retroactive pay because position not filled.

After considerable discussion the committee determined to delay on this matter as it is too close to final wage study recommenda-tion. Moved by McCabe and Babinchak to table pending report from the wage study consultant. Motion carried; Babinchak voted no.

Meeting adjourned at 5:50 p.m.

Alice Fontaine
City Clerk

Dated: 10/11/95.