Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, January 9, 1996 - 3:45 p.m.

Members present: Carpenter, Babinchak, Geller, McCabe.

1. Matter of transfer of funds to Parking Authority for purchase of McPherson lot (behind Grand Forks Glass & Paint on River- boat Road).
Don Tingum and Dick Jackson, CBD Authority, presented and reviewed overall plan for acquisition of additional parking lots and improvements to existing lots for 1996 and estimated cost for the five lots in the amount of $590,700. They noted that this would create approx. 200 additional parking spaces.
a) Bridge Lot - North 3rd St. and 1st Ave.N. - $61,200
In preliminary planning stage so don't know number of lots.
b) Riverboat Lot - Between River Road and River - $142,300
88 stalls plus 2 handicapped stalls
c) County Lot - south of BN tracks along Gertrude Ave. - $211,200
88 stalls and 4 handicapped stalls
d) First Bank Lot - Between 4th and 5th Sts. - $29,600
(demo. by Urban Dev.)
e) McPherson Lot - along Kittson Ave. where NSP substation was
located - $64,900 - 46 stalls

Mr. Tingum stated they have negotiated purchase price of lot, $25,000 (parcel approx. 160'x130') He noted that assessing department had placed value of $22,000 on the lot, but reduced to $11,000 for obsolescence; that Board seems satisfied with $25,000 price. He stated they are waiting for plans and specs. on lots from eng., which will then be reviewed by city eng. dept. He also reported they have visited with River Forks Commission. Mr. Jackson stated they have discussed with EcoLab and County, need to discuss further. He stated need for parking is critical; also getting more calls from Dacotah and Pink Hanger. He stated he has written grant for funding (for Bridge Lot) for steps/walkway to make lot handicapped accessible; also getting calls from Herald and Aakers. Mr. Tingum stated that they hoped to bid improvements for lots at the same time, to save costs.

Mr. Tingum stated that today they were asking for transfer of $25,000 to purchase this particular piece of property (McPherson lot); he noted that there is $550,000 in the Reserve account and 1996 levy has been certified.

There was some discussion by the committee as to the cost of the lot, that if they were satisfied, and as they are assessing against themselves; it was moved by Geller and Babinchak to approve transfer of $25,000. Motion carried.

2. Matter of allocation of appraisers positions.
Mel Carsen, city assessor, submitted information to the committee re. comparison of positions and salary of other assessing departments in the State; and requested allocating all 3 positions to the Appraiser III level; that he would like to
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January 9, 1996 - Page 2

have committee consider allowing them to make promotions, to reward expertise and experience.

Committee questioned the need for three Appraiser III positions, and stated they felt this should have been dealt with during budget process and as part of budgeting decision. It was noted that it wouldn't affect 1996 budget but would affect 1997, 1998, and future years. The committee stated they should deal with as part of the 1997 budget, look at structure of entire department, and what is going on in assessing departments across country. Carpenter stated he has problem with top-heavy departments, and his recommendation is to receive and file and wait until Andersen study done and then move into 1997 budget, and include in 1997 budget if convinced this is what they need. The committee also questioned whether they would be setting precedent.

Mayor Polovitz stated they don't want to lose good people, that policy doesn't always work from one department to another; have funds and three individuals who are highly qualified.

Mr. Carsen reviewed some of the work these individuals doing (make appraisals, defend appraisals if needed, etc.); that they don't know what grade level of an Appraiser III is as position has not been reclassified; and doesn't know if Civil Service Commission would reclassify when this close to end of the Andersen study.

After further discussion it was moved by Geller and Carpenter to receive and file. Motion carried.

(Committee noted that it is their intent to address at later date, when study completed).

3. Matter of tax increment financing for Pink Hanger bldg. and/ or alternate financing, Baltic, LLP
4. Matter of guidelines for tax increment financing and tax exemptions.
John Schmisek, director of finance and administrative services, submitted memo re. tax increment financing, that he, the city attorney and city assessor had met and discussed both individual sale of tax increment bonds and the pooling method; and reviewed in detail the memo with the committee. He reviewed concerns re. number of issues and increasing debt of the city, impact on City's bond rating, raising of threshold on TIF's to at least $500,000, to not use pooled approach for small issues and to make more use of tax exemptions for smaller projects. He reported that they will be meeting again, and come back with revised policy that will include a process for applying for tax exemptions and TIF's.

Jim Struckness and Steve Melby, Baltic, LLP, were present, and
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discussed the tax increment financing over the tax exemption; and the need for the TIF to do the renovation project in the downtown area. There was discussion as to what amount property would generate, term of issue, etc. which were unknown at this time (based on projected valuation of the property). They also stated that this is what TIF was created for, to help slum and blighted areas, to encourage development in downtown areas; and questioned what would effect be on downtown areas, if this financing elim- inated. Chairman Carpenter stated purpose of TIF's was to give upfront dollars to developer to be able to renovate properties. Mr. Swanson stated that based on size of issue, not cost effec- tive to sell for $100,000, where net $65,000 as opposed to tax exemption which would be much in excess of $65,000, need to look at impact on city, size of project, and need to focus on project by project, can't anticipate ironclad policy for every project, and that exemption worth more than TIF, however, tax exemption doesn't help project on front-end. Mr. Melby stated that until City makes decision, they are at standstill.

Mr. Schmisek also noted that the City's financial consultants have advised caution in issuance of too many bond issues, and wanted to point out their concerns.

Mr. Swanson stated that public hearing has been set for January 16, council to determine whether project qualifies for TIF, whether City should do a TIF, intent is to hear pros and cons; and noted that City has pooled projects in the past.

After further discussion McCabe moved to approve the TIF for the Pink Hanger building project. Carpenter seconded the motion. Mr. Schmisek noted that motion should be subject to the public hearing. Mr. Swanson stated they could revisit P.O. building issue; and also stated he would recommend that if they go with TIF, don't go with pooling.

There was some discussion re. setting up revolving fund for local projects.

After further discussion and upon call for the question, the motion failed on vote of 3-1 (McCabe voting for the motion).

Mr. Swanson suggested that committee take no action; that council hold public hearing, and after hearing closed, two committee members could ask that the matter be referred back to committee.
He also noted that only calculations Springsted needs is valuation, TIF based on valuation.

5. Matter of designated depositories.
Mr. Schmisek reported that each year they need to designate
depositories, and they have contacted financial institutions and
asked them to submit their names if wished to be designated as a
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depository of public funds; is a formality under State law that allows us to use them if we have banking accounts, savings accounts etc. He stated that those that have requested designation are Norwest Bank of North Dakota, N.A., First Bank Grand Forks, First National Bank North Dakota, and Community National Bank of Grand Forks. It was moved by Babinchak and Geller that we approve and designate those institutions as depositories of City funds. Motion carried.

6. Matter of delinquent County lots.
Mr. Schmisek presented listing from County of lots with delinquent taxes and matter of purchase from the County, that there is only one lot (Lot B, Blk. 3, Walchester Addition, located at 15th Ave.S. and Chestnut St.) that this is parcel 30'x80', that currently adjacent property owner is maintaining; and has specials of $618.00. Moved by McCabe and Babinchak that we authorize city auditor to purchase the delinquent tax lot from the County for the sum of $20.00. Motion carried.

7. Matter of full-time mayor or city manager.
Mr. Schmisek reported he has received some information from International City Mgrs. Assn., statistical information for cities our size and salaries, mean salary both nationally and for north central area; and listing of cities with full-time and part time mayors and salaries for comparable size. He also reported that Lloyd Omdahl, who taught city government at UND, had con-tacted his office and offered to make presentation on differences between city manager and other forms of city government, he would be happy to do so; and asked committee how they wanted to pro- ceed. Committee stated there was third option, not to change city government to a city mgr. type of government, but to develop position of chief administrative officer, which would not change the governing structure, but add a position.

Mr. Swanson reviewed process in changing form of government, whether require change in Home Rule Charter, vote, etc. Committee asked Mr. Swanson to do memo on what requires vote, what doesn't, etc. and have that information submitted to council along with information gathered by Mr. Schmisek, and have Mr. Omdahl make presentation; committee suggested a noon luncheon meeting for Friday, January 19, if possible; and then come back to finance for recommendation to council at first meeting in February.

8. Matter of pledged securities.
Chairman Carpenter volunteered to review of pledged securities on file in auditor's office.

Meeting adjourned at 5:45 p.m.

Alice Fontaine, City Clerk
Dated: 01/09/96