Committee Minutes

MINUTES/URBAN DEVELOPMENT COMMITTEE
Saturday, January 21, 1995 - 1:30 p.m.

Members present: Beach, Glassheim.

1. Public hearing on Growth Fund project:
a) AgriData, Inc.
Chairman Beach called for the public hearing.
(The Growth Fund Committee had met and approved funding for the project as follows: $20,000 loan at an interest rate of 4%, with payments deferred for one year from date of loan, amortization period of five years, loan security will be company equipment and personal guaranty from Mr. Hagert, with funding contingent upon AgriData, Inc. securing $50,000 in additional funding.)

David Hagert, president of AgriData, Inc., presented requests as follows: 1) he stated they are approaching APUC (Agricultural Products Utilization Commission) for $44,850 for further development and marketing of their product, that they had $5,000 working capital, and is requesting amendment of additional funding to $40,000 so if APUC doesn't grant the full request, and another request to lower interest rate on loan from 4 to 3%.

Mr. Beach stated that the request is to change the $50,000 to $40,000 for additional funding and lower interest from 4% to 3% and is probably significant enough change in request so that go back to Growth Fund.

Mr. O'Leary concurred and stated that the original application called for $45,000 of financing (new money injected in the business), $45,000 in APUC money and $12,000 in commercial.

The general manager of AgriData stated that this proposal originally submitted in December, no quorum and $12,000 figure had depleted by the time they met in January to about $5,000, so the $45,000 plus $5,000 equaled $50,000 that was placed in the request, and the $12,000 should have been changed to $5,000. He stated their request is to drop matching funds from $50,000 to $40,000; and if don't get APUC funds would go to personal financing, and talk with SBA.

Mr.Beach stated that maybe not significant change as first thought, questioned whether significant deviation, and council would be able to make any changes. Mr. Hagert stated they would meet with APUC on February 2 and would know on the 3rd, but product ready to be marketed.

After further discussion Mr. Hagert agreed to leave $50,000 as is, but still would request change in interest rate from 4 to 3%.
The committee suggested leaving as is, and that they are always amenable to change.

Chairman Beach closed the public hearing.

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Moved by Glassheim that we approve the loan to AgriData, Inc. as follows: $20,000 at an interest rate of 4%, with payments deferred for one year, amortized over five years, loan security to be equipment owned by the company as well as a personal guaranty from Mr. Hagert, contingent upon AgriData, Inc. securing $50,000 in additional funding. Beach seconded the motion. Motion carried.

2. Demolition of house at 409 Walnut Street.
Mr. O'Leary submitted copies of letters from Mr. Bushfield, and from the engineering department stating this to be substandard building and delineated reasons why. Copies of City Code re. non-conforming structures, repairs and maint. were also presented.

Mr. O'Leary stated there are 3 issues that affect the Code: and read Section 18-0406 (5), that structure has been vacant over l8 mos., and would have to come in compliance with Code, and because non-conforming structure and lot; secondly, read Section 18-0407 (1) which states that work may be done, provided that the cubic content existing when it became nonconforming shall not be increased; and (2) which stated that if nonconforming structure or portion becomes unsafe or unlawful due to lack of repairs and maintenance and is so declared by any duly authorized official, it shall not thereafter be restored, repaired, etc. except in conformity with the regulations of the district in which located, provided that the city building inspector shall be authorized to direct temporary repairs when the same are required to protect the safety of the persons on or about the premises. He stated that those three paragraphs impact this issue.

Mr. O'Leary stated that two other issues came up at the last meeting; 1) building or any other building that is within a quarter of a mile or over 50 years in age, and Mr. Kucher asked that we clarify and submit amendment to local Historical Society; and other issue is that they did solicit quotations for demo of the house: 3 bids received, and R.J. Zavoral & Sons low bid in the amount of $1200, which includes filling in hole; and low bid for shutting off of water service was PDQ Sanitary Services for $350.00. He noted that $5,000 is budgeted for this project.

Clyde Morris stated they have had two weeks to get estimates and to prepare statement for your perusal; that they would like to acquire the property and would like to rehab and would propose that this could be done in 24 month period or less and can make reasonable rehab. of the structure as shown in the prospectus. He stated there's a clear need for housing and this would provide another unit. He stated there's a l.5% vacancy rate, and is apparent in level of 2-bedroom houses. He reviewed some of the work which would be done. He stated that council working to relieve problem and this is one of them; that in talking with

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people no question this property can be made habitable; and is asking committee to consider value of property, land worthless to City, taxes lost to community at large and serves no useful purpose, and impact of demolition on adj. property should be considered; value of historical district decreased, very historical, typical of house put up in l880's. He stated they are proposing to buy rights to property with a payment of $1.00 and at end of two-year period and completion of the work if the inspection is satisfactory, that the title passes to them.

There was discussion relative to work to be done, cost estimates with Morris' providing labor. Mr. Kuchar stated it doesn't appear to him the questions discussed 2 weeks ago answered; that it does not appear that ordinance would prevent rehab. project Morris proposing; that it appears that the repair work can be made within the 10% limitation; and reasonable proposal has been made and is possible within guidelines and within the provisions of the ordinance respecting the grandfathering in of old structures; that property can be rehabilitated and restored to the housing stock. He stated that any structure of over 100 years old has some historical significance.

The committee stated that it seems that building can't be brought up to Code within l0%. Mr. Beach stated that it's not a reflection on Morris' ability, however, is a difficult project for anyone to bring back to marginal condition; no matter what is done still have nonconforming lot and no way to provide any legal parking there; and is his opinion that demo is answer for this property.

Sally Morris stated that with rehab. this could be made safe and comfortable house, good location, and property useless without the house.

Mr.Morris stated it might be premature to take bids or proceed with demo as there are federal regs, Chap. 8, 194 Ed. which requires that approval has to be given by the Preservation Officer of the State; and would request that the l06 process be followed meticulously as this property may well be eligible for inclusion in a historical district and also possible that house might be eligible for inclusion on its own, but until determined by State His. Pres. Office and then chief officer of the region from Denver and that approval must be obtained before any action is taken to demolish that property, and is requesting that process be followed.

Mr. O'Leary reported that the letter Mr. Morris is referring to is in the packet, that the State Hist. Society has not responded within the 30 days required, and while comments are appreciated at this point, are moot; that if don't respond within 30 days have forfeited their right to comment and read letter differently MINUTES/URBAN DEVELOPMENT COMMITTEE
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than Mr. Morris. He stated they asked for local review and comment from local Historical Society and they have indicated that there is no negative impact on neighborhood.

Mr. Glassheim stated that we do not need to make finding of substandard building because we have title and may dispose of building as we see fit; if want to demolish get bids or declare intention to demolish. Mr. O'Leary stated that staff has already solicited bids which are before committee and question is whether want to award. Mr. Kuchar asked if City owned mortgage; and Mr. O'Leary stated that City owns mortgage but doesn't have title, are in process of obtaining title, and if committee decides to approve, to award contingent upon acquisition and quit claim deed, titled owned by private party and don't anticipate any problems.

Moved by Glassheim and Beach that contingent upon receiving title the City award demolition bids to Zavoral & Sons in the amount of $1200 for base bid, and to PDQ Sanitary Services for water abandonment portion of the bid in the amount of $350.00.

Mr. Morris stated that City must go through 106 process. Mr. Beach stated that committee appreciates his comments and staff will have time to investigate those comments before council.

Motion carried.

3. Report on Flood Relief Program.
4. Review and make appropriate changes to Flood Relief Policy.
Sue Redman distributed copies of request for policy change for Flood Relief Project., and stated they are still accepting applications from low and moderate income applicants, have 106 low income families that are first priority or Level A; and have completed 20-21 of those, about half of those awaiting final inspection; in Category B (between moderate and median income), have about 80 applicants, and just started doing write up and get bids, have actually completed 11 of those; and still have about 225-250 Level C applicants about ready to start on.

She stated they want to request change in policy; that under current policy for non-low income households has limit of $1500 assistance and they would have to match $ for $, and only health and safety repairs eligible; that Category B applicants are having hard time coming up with match, especially in outlying areas, that damages more extensive than realized when submitted grant application, and also applicants living in Nelson and Traill who are considered Level B would have been low-income if living in Grand Forks County; so are looking through aps. to see where worst damage was, what needs were, and came up with new match requirement where also financial assistance would be increased if severity of damages warranted it. She stated that

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with repairs of up to $1500, would still recommend a 50% match; for repairs of $1500 to $5000 a 25% match, and for repairs over $5000 a 25% match up to a max of $1500. She stated they are working with homeowners in ways they can match grant assistance, including repairs they may have made last summer, actual cash, donated or "sweat" equity, and also repairs they are going to be able to do in the future.

She stated that second recommendation was for the people in Category C, aps. who are above median income, and that was to increase the grant assistance up to $5,000 if there were major structural or mechanical damage or severe health concerns, the match would still remain at 50%. She stated they also included the change in situations of financial hardship to request waiver of the match and could be reviewed either by executive director or urban development.

She reported that they are anticipating that everyone in Category A and Category B will be funded; total funding $750,000 and have spent or have billings in for $111,000 (incl. adm.). She stated that A and B's and their needs have to be met before going to Cat. C; and if meet everybody's needs in Level C would go to rental property. They are assuming they can do about half of Category C, and would prioritize those with most severe damages first.

Moved by Glassheim and Beach that we accept recommendation by staff as follows:
Category B: 1) increase the maximum grant and reduce the match for households needing extensive repairs to correct health and safety concerns; priority repairs include: severe basement and foundation damage, ongoing flooding in the basement, damage to mechanical systems, lack of adequate water or sewer, chronic health problems aggravated by water/mold, and repair of bedrooms used by family members;
2) allow homeowner match to be met by earlier payment of emergency repairs, cash, donated labor, or future repairs. Grant funds could pay for major work, and the match could be met by owners doing the secondary repairs when they can afford to do so (e.g., painting or flooring in non-essential areas); staff would work with each applicant on the best way to meet match.
3) Match will be 50% for assistance up to $1,500 and 25% on amounts over $1,500.
4) An applicant may request a further reduction of match but must document need (age or disability impedes self-help, high housing or medical expense, lack of assets, etc.). The executive director would review these requests.
Category C:
1) No assistance will be approved until the needs of low and moderate income and Category B applicants are known; however, the maximum grant will be increased to $5,000 for major structural/
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mechanical damage or severe health concerns; match will remain at 50%, but could be met in the ways mentioned previously; and an applicant could apply for a reduction of match but must furnish proof of financial need for review by the executive director. Motion carried.

5. Matter of bidding process re. local preference.
Mr. Beach stated that the City should give preference to local bidders and contractors wherever possible consistent with the law. Glassheim questioned whether we would want to give local preference - stop competitive bidding. Committee also questioned definition of "local" bidders. Mr. O'Leary stated that another major community ruled out bidders from Grand Forks because suppliers, etc. gave special break to local bidders and not provided to out of town bidders, and that was enough to make local bidders uncompetitive. He also noted there could be problem on federal projects. Mrs. Sande questioned to whom do we owe our duty, taxpayers or contractors.

Moved by Glassheim and Beach that if city attorney believes legal that the council then sponsor a public hearing. Motion carried.

Meeting adjourned.
Alice Fontaine, City Clerk
Dated: 1/26/95.