Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, August 27, 1996 - 3:45 p.m.

Members present: Carpenter, Babinchak, Bakken, Hamerlik.

11. Matter of city sales tax on amusement devices.
Pat Morley, attorney, stated he is representing A & H Vending, but that there were other vending operators present (Dean Jelsing, Grand Forks Vending, and Wayne Arminton and Linda Gudeneau from Advanced Amusements of Fargo. He stated that the 3/4% increase in sales tax for the events center prompted this request, because there is no way increase can be passed on to the user. He reported that the cities of Fargo, Bismarck and Minot do not tax amusement devices, nor does the city of East Grand Forks; the State has a tax on amusement devices; and they are requesting that the finance committee recommend to the council that the entire tax on amusement devices be repealed. He stated that the main reason is that you cannot pass this kind of tax onto the user because dealing with 25-cent increments. He stated they are asking for both repeal of original and 3/4%, in the past have absorbed the 1%. He stated he has figures on amount of taxes that are paid and have been paid in the past, not a significant amount: (A & H Vending for 1995 $15,000 to the State (State only taxes 80% of gross) and $2700 to the City) He also stated they are not asking for repeal of taxes on vending machines.

Committee questioned how many companies this was going to affect, where draw the line. Mr. Hamerlik stated he would like more time to study, to act might be injustice to City or to them, would like to hold or defer indefinitely. Committee stated they don't know total impact. Mr. Schmisek suggested contacting State Tax Department for figures, etc.

Wayne Arminton, Advanced Amusement, Dean Jelsing G.F. Vending, stated machines mfg. with 25-cent slots and not able to increase 5-10 cents. Mr. Jelsing spoke in favor of request; market more competitive and more expensive.

Moved by Hamerlik and Babinchak to postpone indefinitely. Motion carried. (Chairman Carpenter noted that the intent is to gather additional information and bring back to committee.) (comm. only)

1. Matter of offer from Robert E. Mutcher, Sr. to purchase City
lot at 1310 8th Avenue North.
Mel Carsen, city assessor, stated they were directed to renegotiate price, but Mr. Mutcher didn't want to put anything in writing concerning increase in price, is interested in getting property rezoned, and is open to higher price but doesn't want to make offer in case zoning wouldn't go through. Mr. Carsen reported that Mr. Mutcher is operating service garage in B-1 zone (non-conforming use) and he is looking to have his property rezoned as well as the corner site and would then build new

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garage; has to do something because eventually City may move him from that site. Mr. Carsen suggested two options: 1) to deny the offer; 2) do a feasibility study on rezoning, P & Z would do that, determine affect on other properties. He stated it may be difficult to rezone because make other properties non-conforming. Committee stated they wouldn't want to go through study process before reaching agreement on sales price; that offer and agreement could be reached with contingency that if not rezoned, the money goes back to the purchaser. Mr. Carpenter asked Mr. Swanson that if Mr. Mutcher made offer contingent upon rezoning, that if rezoning did not occur not completion of the agreement and he would be free to make any other offer at that time. Mr. Swanson concurred.

Mr. Mutcher stated he was still at position that he was willing to pay more if property rezoned, would pay 75% of City's price, but if not rezoned, offer null. (it was noted that 75% is $10,575) Committee suggested that if Mr. Mutcher wishes to increase his offer that he put it in writing with specific contingencies.

Moved by Hamerlik and Babinchak that we reject the current offer. Motion carried.

2. Application for 5-year property tax exemption from RDO Foods Co. for expansion project at 2500 Mill Road.
There was some discussion re. committee's previous motion, whether this matter was tabled until legalities resolved, or for two weeks. Mr. Swanson stated his recollection was that item was tabled until this meeting. He stated legalities not resolved, have had significant discussions, have agreed on more language and waiting for draft from RDO's attorney. He stated that his recommendation was to act independently on the application. He stated that he doesn't have particular concern that litigation will not be resolved. Mr. Hamerlik stated his motion was to hold until litigation resolved. Chairman Carpenter stated there would then have to be motion to reconsider for any further action; with no motion to reconsider the item will be held until litigation resolved.

3. Application for 5-year property tax exemption from J. W. Perry, Inc. for building to be constructed at 1250 South 46th
Street.
Mr. Schmisek reported that application had received preliminary approval with public hearing scheduled on this item for September 16 before council; and no action needed at this point.

Dean Kreitinger, business manager for the Grand Forks School District, stated that the last legislative assembly passed law that provided that rep. from the School Districts would be non-

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voting ex-officio members of the committee when considering tax exemptions. He stated that question they have is granting exemptions when it involves another governmental body and they will be at meetings to sit in and listen and ask for input periodically in regard to the granting of these exemptions for property taxes.

Mr. Hamerlik asked what the status was of Budget Board of Review, which was made up of reps. of School Board, city council, etc. Committee members not aware of this Board, nothing in place at this time.

4. Matter of recommendation from Implementation Committee for
Police Study re. disciplinary action policy.
Dan Gordon, Human Resources Director, reported that according to our current Civil Service Code, mayor has only authority for formal disciplinary action, that this was brought up as part of police study and brought to implementation committee, and submitted recommendation for department head or supervisor to issue oral and written reprimands. He stated that notice was sent to all employees, civil service commission, mayor to bring up concerns, received very few; that main concern from employees is inequity in discipline decisions by department heads, that can occur; but real key making sure facts are on the table, making sure both sides of the story are heard and having neutral source to review documents and on proper course. Mrs. Sande stated she and Mrs. Babinchak met with Mr. Swanson and they agreed that there would be some revisions - ie., that appeal would be to the mayor rather than Commission, and that written notice to the employee is required by State law; and other item is that administrative leave would be paid for up to a week.

Mr. Swanson reported that prior to 1995 the discipline process was a joint process, the department head had some authority as did the mayor; during 1993 and 1994 there was a committee that rewrote the Code, it was discussed that there were departments that felt there were inequities among the disciplinary decisions being made in the city, that some departments rendered much harsher judgment by discretion of employees than others, and it was felt that an attempt should be made to make discipline more consistent, with theory that if vest in centralized person should have consistent application of discipline. He stated that they do very little discipline in the city, that in his tenure of 12 years, they have terminated one employee, demoted one or two, suspended less than half dozen, given formal reprimands to maybe 6 to 12; grievances are separate. He stated that January 1, 1995 when Code went into effect, the mayor handled all disciplinary decisions. He recommended that they not classify oral reprimand as discipline, that's management's prerogative, to deal with at department level; and department heads do have that ability now.


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Mr. Swanson stated some of the questions he has are that some departments have chain of command and some department with only one level of command, and need to make sure don't treat employees of one department differently than those of another department. He also raised questions as to who is supervisor and whether they want all employees with supervisory capacity to be issuing discipline. He recommended that even if they do give department heads or supervisors some discipline authority, mayor should play role unless eliminate mayor entirely. He stated they have redrafted and need direction where they would like to go with this. He stated that policy must apply to all employees. He asked committee if they want to change the form of discipline now have, and if so, who should be able to make decisions on discipline and to what degree.

Committee questioned whether all department heads capable of handling discipline; Mr. Swanson stated that some better equipped than others, but can train department heads to take right steps, ie., give proper notices, gather information and make a decision. He stated that proposal from consultant workable, can draft, but decision for council to make whether department heads responsible for discipline and if so to what level and what role does the mayor play. Mr. Hamerlik stated he would like to see mayor as last level and keep commission out of it. Mr. Swanson stated
that at this point can't eliminate commission, and at best mayor an intermediate stop, unless restructure commission.

Mr. Swanson stated that in proposal they have, mayor would have no role in an oral or written reprimand issued by the department except for an appeal, and would have no role in deciding suspension without pay for up to 3 days except for possible appeal; any suspension beyond 3 days, any placement of employee on long term probation, any demotion or any termination requires decision of the mayor. Mr. Carpenter stated he has always been advocate of getting rid of Civil Service Commission, doesn't have problem with making these changes; wouldn't be opposed to getting the mayor out of it, would not want council involved, but no problem with CSC as appeal body. He suggested having Mr. Swanson put proposal in different form, review in next few weeks and bring back to committee.

Mr. Swanson suggested that whatever changes they make should be effective on a given date. He stated they could remove mayor from any disciplinary decisions and have department head make decision with appeal to Civil Service Commission. It was noted that mayor would make disciplinary decision if it were a department head under discussion. Mr. Carpenter stated he felt mayor should have as little involvement as possible.

Mr. Swanson asked for direction re. supervisors. Mrs. Babinchak stated that in some departments immediate supervisors should have MINUTES/FINANCE COMMITTEE
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that ability, to start disciplinary action (written reprimand). Mr. Carpenter asked if any supervisor could start the discipline, but appeal consistent (to mayor or commission). Mr. Hamerlik suggested that immediate supervisor initiate action, with appeal to the department head, and department head make decision.
It was stated that if disciplinary action taken by the department head, appeal would go to mayor. Mr. Swanson stated that he doesn't have confidence that all supervisors have ability to effectively decide when discipline warranted and then to appropriately decide what discipline is warranted. He stated concern he has is that he won't know when employee being disciplined in a department when occurring at that level. Mr. Gordon stated that normally what occurs in multi-tiered department is that immediate supervisor initiates a disciplinary action and forward to the department head for consideration, need department head support before doing anything. Mr. Swanson stated that as he understands, the committee is inclined to allow department head to do discipline, and his next question was re. supervisor. Mr. Gordon stated that discipline needs to be done quickly for effect. Mr. Carpenter stated that direction for Mr. Swanson was that supervisors have ability for reprimand.

Mr. Swanson stated he will draft and bring to committee on September 10. Held to September 10 meeting of the committee.

5. Matter of recommendation from Human Resources re. Employee
Suggestion Program (IDEAS Program).
Mr. Gordon stated that the present Civil Service Code allows for suggestions program, which allows awards or certain forms of recognition to employees for significant ideas that improve either the efficiency or operation of the department. He stated he has put together a program for consideration (IDEAS - Ideas Driven by Employees Assures Success) and has shared with the employee reps. He stated that several months ago the mayor appointed five individuals to this committee, who will meet when six ideas are submitted, process of referral for consideration. He reported that the entire funding for the program are out of Human Resources budget, and have approx. $3,000 per year. He also noted that if an employee received compensation other than normal wages, it has to be approved through the finance committee and the city council, and that he is asking the committee to endorse the suggestion program, and would like on a quarterly basis to bring to committee the ideas that were implemented and request for a cash award, he suggested a cap of $100. (if an idea were patentable, something for council to consider); give recognition for tangible ideas.

There was some discussion re. patentable ideas, if developed on City time, whether it should be employee's; Mr. Gordon stated that an idea will not be considered if part of their normal job,

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and if working on something personal on City-time, violation of Code subject to disciplinary action. Mr. Carpenter stated if eliminate ideas if part of their job, eliminate most ideas of any value. Mr. Gordon stated they don't have to create ideas in their department or within their job, but allows them to focus on the city; that this does not give employee authority to work on ideas on city-time.

Mr. Hamerlik suggested giving time off rather than money, maybe more publicly acceptable; Mr. Bakken stated he didn't feel public would object if were saving them money. Mr. Gordon stated there might not always be cash award given, give other items (t-shirts, etc.)

Mr. Swanson stated there is ordinance in place, policy can be reviewed and amended at any time; that he has reviewed proposed program and has no comments.

Moved by Babinchak and Bakken to approve the Grand Forks Employee Suggestion Program. Motion carried.

6. Report on cable TV franchise negotiations.
Mr. Swanson reported that he met with TCI, that they have reached agreement on all issues of the cable television franchise and recommended that the council move forward and adopt a new franchise agreement, that it is an entirely new franchise agreement, it is based on agreement that East Grand Forks used. He summarized franchise: 1) term beginning October 1, 1996 and terminating September 30, 2004, 8-year term (they had requested a 15-year term) and along with that would need to extend our existing franchise to September 30; 2) that he is recommending that the franchise fee be increased from 4% to 5%, and that has been anticipated in the 1996 as well as the 1997 budgets; 3) they are recommending elimination of the performance bond requirement from TCI, in return they are doubling security deposit (they have a cash account) because performance bond had limited application, better to have cash with direct access to as opposed to the bond; 4) whether or not to continue to require independently audited revenue statements, they had proposed that they would only file SCC filings, which are income statements filed on a quarterly basis, after negotiation they have agreed to file both; 5) they have expanded channel 3 to include government channel as well as educational channel; they did not go as far as public access channel; 6) that he is proposing 14 different sections, with as many as 10 sub-parts; and he is recommending that the committee move forward with the introduction of an ordinance for the franchise fee and other terms as outlined, and set public hearing and final approval for September 16.

Mr. Hamerlik asked if increase in franchise fee would be passed onto customers; Mr. Swanson stated that is tacked onto the bill

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as City fee; the tax itself is on their gross revenues, but what they do is attach to bill. Mr. Hamerlik asked if changing channel 3 to governmental as well as educational, we are making any moves towards payments. Mr. Swanson stated that the City has utilized channel 3, even on billboard process in putting information out, but not in that direction at all. Mr. Swanson stated he was concerned about public access channels, the University has been involved in these negotiations to the extent that he has kept them informed and aware of proposed language. Mr. Carpenter stated he feels they should have the ability for the governmental channel, but are in no way committed to doing anything at this stage, just gives us the ability to do something without renegotiating the agreement. Mr. Swanson stated that any of the terms could be renegotiated, even within 8 years. Mr. Swanson also stated that this has no impact on competition, this is non-exclusive franchise. Mr. Swanson stated that the City has very limited control over pricing, only control over basic package, but no control over upper tiers; do have some control over service; but have seen dramatic decrease in complaints over last few years.

Moved by Hamerlik and Babinchak to extend the current franchise to October 1, 1996, give preliminary approval to the new franchise agreement, introduce the ordinance for first reading and call for a public hearing on September 16, 1996. Motion carried.

The committee asked that Mr. Swanson send complete copy of the agreement to each council member prior to the meeting.

7. Matter of transferring Parking Authority funds for construc-
tion of 4th Street lot and Bridge lot.
Don Tingum, representing Grand Forks CBD, and Dick Jackson, Central Business Dist. Auth., were present. Mr. Tingum reported they have completed purchase of houses along Division and South 4th Street, and bids for construction on lots opened yesterday, with Opp Construction low bidder in amount of $156,490 for the 4th Street lot, which will include concrete paving and electrical work, striping and concreting the alley; negotiations with County are complete for transferring the four lots, and would like to start work this fall. The number of parking spaces will increase from 49 to about 95.

He stated that Nodak Contracting low bidder on Bridge lot for repaving of part of the overlay of that lot and blacktopping balance of that lot (behind Chamber), $52,703.00; with total cost $230,000, that there is $380,000 surplus funds in that account, and are asking for transfer of $230,000 for both projects.

Moved by Hamerlik and Bakken to approve transfer of funds $230,000 to the Parking Authority fund. Motion carried.

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8. Matter of offer to purchase Lot 4, Block 1, Auditor's Resub. No. 27.
Mr. Schmisek reported that Dick King had indicated interest in coming to this meeting to make an offer, but not here; no action required.

9. Matter of allocation of public funds for establishment and
operation of Youth Commission.
Mr. Schmisek reported committee and city attorney had received copies of letter from John Rolczynski. Mr. Swanson had no comments. Moved by Hamerlik and Babinchak to receive and file. Motion carried.

10. Temporary and overtime statement for July, 1996.
Moved by Babinchak and Hamerlik to receive and file. Mr.Hamerlik asked that since they are obligated to pay overtime, why seeing report after the fact. Mr. Schmisek stated this is more in keeping committee informed, no requirement to bring to committee, and is committee's choice. Question called, and motion carried.

Moved by Hamerlik that until further notice we dispense with having overtime statement on the agenda. Carpenter seconded the motion.

Mr. Swanson stated there is no legal reason to do, unless informational. Mr. Carpenter stated that they budget certain amount for overtime, and only concern would be if department brings in amendment to increase that amount. Mrs. Sande stated that sometimes it provides clue to other problems, committee stated that department head problem.

Question called and motion carried. (comm. only)

11. Matter of copier bids.
Mr. Schmisek reported his office has received new bids for a copier, that some of the bids had minor variances to the specs., ie., stapler option, out-put capacity, warm-up time, etc. and would be up to the discretion of the committee whether they would consider those minor variances and allow them to look at all machines that fit dollar price they are looking at. He stated they're not ready to make decision but are asking for demo of qualifying machines; don't want them to bring machine in if not going to be considered. Mr. Swanson stated it would depend on whether material deviation to bid. Moved by Babinchak and Hamerlik to waive minor deviations in specs. and authorize department to make evaluations. Motion carried.

12. Memo of observations re. council agenda items.
Mr Swanson reported he had compiled listing of agenda items
for review and possible removal from council agendas.
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13. Letter re. Clean Cities Program.
Chairman Carpenter reported he had been receiving letters re. Clean Cities program re. Red River Valley Clean Cities Winnipeg Kickoff and Workshop on September 19 in Winnipeg, asked whether anyone interested in attending, and gave information to Mr. Schmisek.

Meeting adjourned at 5:45 p.m.

Alice Fontaine
City Clerk

Dated: 8/28/96.