Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, October 29, 1996 - 3:45 p.m.

Members present: Carpenter, Babinchak, Bakken, Hamerlik.

1. Matter of request from Community Violence Intervention
Center, In. for waiver of rental for location in City Center
Mall.
Kristi Hall-Jiran, executive director, Community Violence Intervention Center, reported that their agency is located at 111 S. 4th Street, but as they have increased their services and expanded their client load ran out of space, employees share offices but difficult because of confidentiality, and that sup- port groups and volunteer training held at other locations. She stated they have opportunity to apply for additional funding for another position but no place to house that position; their Board looked at space on second floor of City Center Mall and would like to relocate their agency there; and have applied for CDBG funds for rehab there, install security system, etc. She stated they currently pay $7200/yr. to the Parking Authority but are reimbursed by the City; their budget doesn't allow them to absorb cost of renting and are requesting waiver of rent, including heat and utilities, if they are able to relocate. The area in City Center Mall is twice as large as what they presently have. She stated they currently pay their own utilities, and would consider paying utilities in City Center if they relocate; and that would be long term solution to their needs. She noted that their funding not guaranteed, go through process every year. She stated any improvements made would stay with the building, if they should move (rehab includes sub- dividing offices, carpet, wiring, etc., with exception of filing system).

Dick Jackson, mgr. City Center Mall, stated he did not have utility costs for that specific area.

John Schmisek, director of Finance & Adm. Services, reported that they are looking at area in former NSP building which is City-owned building; that rental rate for area they are requesting is approx. $2900/mo. and City continues to pay expenses for that building, is substantial change from the $7200. He also stated doesn't know what commitment is for long term, depending on what happens downtown, if buildings cash flow and had willing buyer City would get out of the business of owning those buildings. Ms. Hall-Jiran stated if building sold, they would look for another location.

Committee questioned how far City should be getting involved in human resource situation; and also when apply for grant, receive indirect costs to help pay for some of these things. Ms. Hall-Jiran stated they do that on all their grants; and that Parking Authority would be able to rent out their current location.

Mr. Carpenter stated initially when started this, reason for
rental subsidy was that they were located in the police building
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and City wanted that space for the Highway Patrol and the amount of rent paid by the Highway Patrol City would subsidize their move to the location they are currently in; and that he doesn't remember that it was ever intended to be permanent, but has been many years. He stated he has some concerns, that he doesn't want City to be permanent landlord downtown if can avoid it.

Mr. Jackson stated they have had some interest in leasing of this space; that area would also have to be maintained, thinks area can be rented but perhaps not all right away. He also stated he hasn't seen plans for renova- tion of the area. There were some questions re parking, and Ms. Hall-Jiran stated they have 12 employees plus clients.

Bakken stated they are requesting $65,000 for operational sup- port; $40,000 for renovation of the building, and also asking for rent and utilities on the site. Ms. Hall-Jiran stated that the operational support has been very long term for them, that they are currently receiving rent waiver so that wouldn't be something new, only new request is for the $40,000 to rehab building. Mr. Bakken noted that the rental waiver would be increase of $27,600 over what they are currently receiving, and it appears they are building bigger and bigger agency. Ms. Hall-Jiran stated that problem getting bigger and bigger and that is why they are growing.

Mr. Schmisek stated that Gerri Konze is doing analysis of buildings downtown and will break out in more detail. Held in committee for 2 weeks for additional information re. utility costs, rental history, etc. (November 12 meeting)

2. Matter of notification of Air Base water rate contract (re.
new Air Base water line).
Mr. Schmisek reported they have negotiated rate with Air Base based on their water usage to pay for that line, exclusive of $75-80,000 applied to the Airport, and submitted revisions to the contract to set up the rates, that engineering has worked on and set up rates that would pay debt service on this project: $1.04 to pay for line itself and $0.11 for operation and maint. of the pumping station; amendments to our current contract. He stated these rates will be added to the rate for treatment of the water. Mr. Swanson stated he is in process of reviewing the contract.

Keith Johnson, asst. city engineer, reported that the Air Base prepared this modification and submitted to Headquarters urging them to approve by first week of November; that construction contracts have been bid and awarded subject to Air Force approval; contractors anxious to start work or order materials.

He reported the project is for four miles of waterline, including pump station. It was noted that this rate has nothing to do with MINUTES/FINANCE COMMITTEE
October 29, 1996 - Page 3

the water rate. Mr. Schmisek stated that the Air Base contract states that their water rate will increase same percentage as residential and business customers. He reported that rate negotiated on reduction of cost based on line to their facility, and their portion of usage of the treatment plant itself and would only come up for complete negotiation if committee/council should request that.

It was noted that the Government owns line from the Airport to the Base and is responsible for maintenance of that. Mr. Johnson stated that Air Base owns line and station that is being replaced but after replacement City will own and maintain that line. He reported that tapping charge for tapping into that line hasn't been discussed. Mr. Hagness stated there would be a tapping charge to try to recover costs.

Moved by Bakken and Babinchak to approve contract subject to approval by the city attorney. Motion carried.

3. Matter of provision for cable burial under cable television
franchise agreement.
Howard Swanson, city attorney, reported that he requested TCI make proposal to City and he received proposal this morning; they are proposing additional language in the franchise agreement which would establish a standard of a 6" burial level at the initial burial of any drop, and that proposal by TCI is a reasonable proposal.

Mr. Grasser reported that they talked with TCI about some of the issues involved in cable burial, etc. they chose to address in franchise agreement and thinks 6" reasonable depth and no problem addressing this way.

Committee expressed some concern with the 6" burial depth on existing ground level in installation of driveways, etc. Mr. Grasser stated there are two issues - cable depth (main lines) which will be buried similarly to telephone and elec. utilities, and 6" is depth for service drop to individual properties, but they run into with telephone and electrical cables also; and this will cover vast majority of areas of complaints.

Jerry Hovet, TCI, stated that if they go into new area and every- thing not to grade and bury cable 6", there could be problem; concern in new parts of town and going to happen, either have service and cable buried but not always to grade.

Mr. Swanson reported that TCI amendable to including in the franchise agreement draft, not sure committee has to do anything, thinks all issues dealt with, and incorporating this language
into agreement. He stated they have had preliminary reading of the ordinance, will need to amend.

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Moved by Hamerlik and Bakken that we recommend including language in the franchise agreement as proposed by TCI re. establishing a standard of a 6" burial level at the initial burial of any cable drop. Motion carried.

4. Matter of participation in funding of feasibility study re.
development on international cargo hub project at Grand Forks
Airport.
Mr. Schmisek reported he was asked to review budget and financial information and recommendation he would make is that they could use additional funds in the excess sales tax area as have generated more than anticipated and there would be funding up to $25,000, but will need to determine the amount.

Bob Selig, executive director of Airport, reported that he and John O'Leary met with Economic Development Administration people out of Denver last week, and response was favorable. Mr. O'Leary stated that EDA indicated that it was worth pursuing. They will be requesting $25,000. Mr. Selig reported that they also met with the Red River Regional Economic Development Council and requested $2500 which is the max. they would contribute, and proposed that if they get the grant and the $2500, leave as 1/3, 1/3 and 1/3 with Economic Development, Airport Authority and City and if get more partners will take everything from the grant amount and split balance between the partners. He stated he has sent letter to the County but hasn't had response. He stated that if the council would consider an amount up to $25,000, he would then work with Mr. Schmisek re. equal shares. It was also noted that if any money received from MPO in 1997 could still be used for this study, and would reduce shares.

Committee stated they are not sure they want to set one-third's , but commit fixed amount. Mr. Hagness stated that he would like to see County contribute to this project. Mr. Selig stated that Authority Board wants to make this a regional/community partner- ship, and suggested City could set amount with County match. He stated Authority Board's interest to get regional cooperation, Board has fronted $75,000 out of some of their emergency funds, feeling that they would get a grant and some participation. He stated he will be requesting to be on the County's next agenda (request has been submitted in writing).

Moved by Hamerlik and Babinchak that we approve up to $15,000 to be spent on the study limited by a match by the County. Motion carried.

Mr. Selig stated that the Authority Board and staff don't want to be in middle of these things - and would like to work with the
City and County in creating better working relationship between all three governmental units.


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5. Communication from Sherman Associates, Inc. re. financing
low/moderate income housing.
Mr. Schmisek stated this is to bring communication before the committee to let committee review and determine if of any interest, that he has some qualms in that there isn't lot of equity from the private side that goes into it, more City risk. He stated there may be some concerns from private developers in this community who have done things without asking for housing development bonds, tax increment financing or use of tax credits.
Mr. O'Leary, Community Development, reported that they admini- strate lot of 2 and 3 bedroom units, that vacancy rate on 3-bedroom units very low (1%) and on 4-bedroom so low can't measure, that advantage of this project is that it provides 3 and 4 bedroom units at affordable level in the market, the vacancy rate for 1 and 2 bedroom units is improving. He stated he is neither opposing or endorsing this project, and decision whether to do a TIF is up to the city council, but need to separate two issues involved in this request - this is a letter of inquiry but does request TIF which would set aside the taxes that this pro- ject would generate over the next 15 years; that developer would sell tax credits at a discounted rate and when they do they generate equity; housing revenue bonds which do not obligate the City in case project fails, take large project to make feasible. He stated they need to separate housing revenue bonds and TIF. He stated he is not prepared to talk about infrastructure assistance.

Committee asked what developer putting into the project; Mr. O'Leary stated the equity consists exclusively of $2 Million, which is funded by the federal tax credits.

A rep. of Dakota Financial and Dan Mikkelson, Fritz Building, expressed concern re. this project, unfair advantage.

Committee stated they were willing to look at housing revenue bonds but probably not TIF or infrastructure assistance, and would like more information on the housing revenue bonds. Mr. Hagness stated he likes the low income housing but doesn't want to subsidize it.

Committee held the matter for 2 weeks for additional information from Mr. Schmisek and Mr. O'Leary.

6. Matter of extension of probationary period for communications
technicians.
Pete Eggeman, director 911 Center, presented request to amend Civil Service Code to revise probationary period from 6 months to
one year, that this is supported by Civil Service Commission, Human Resources and PSAP staff. He stated problem is they don't have large number of college or technical school programs that

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specialize in communications, most coming in with no training and no background, and receive about 18 weeks on-the-job training and sometimes have to extend probationary period, makes sense to move probationary period to one year and put in line with other public safety agencies. Mr. Gordon stated that if probationary period extended, employee has to go before Civil Service Commission; turn-over very high.Moved by Babinchak and Bakken to amend Civil Service Code to extend probationary period from 6 months to 1 year. Carried.

7. Matter of implementation cost material and pay band structure
for reclassification/wage study.
Mr. Schmisek reported they have been looking at in his office doing checking of the dollar amounts, there were errors in some positions which have been corrected and Ralph Andersen has been giving them some of the new schedules with their calculations; the dollar amounts are going to change as they are not correct with what have received and some amendments, still don't have all the numbers put together because missing some of the information.

Dan Gordon, Human Resources, stated that reason for inaccuracies is that after some of the information gathered - retirements, promotions, etc. He stated that the allocation is correct and should have exact figures in couple days, doesn't think figures will change very much. He stated that information submitted to the committee on the implementation costs on the 8 different options that are spread out over four years. He stated he wanted to remain in neutral ground, to help them look at options as would affect City for the next four years. He stated different options for total implementation over the 4 years will range from 2.3% of total payroll to 7.02%. He stated that currently 70% of the employees at the top of the range (no more step increases), and only way those employees receive any increase in salary is through promotion or cost of living increase that is negotiated. He stated he is big supporter of an open range system, thinks it's controlled cost by the council although the employees need to know a general percentage and thinks employees looking for standard percentage each year (of those who have not reached top of their range). He stated various options directly reflect how a person in entry level will get to the top of the range. He stated employees would like Option 7 with 4% each year, and that cost over 4 years is $877,000 or a 7.02% over 4 years. He stated that's the best case for employees and best case for council is to have open range and not to disclose what the yearly increases
would be, that is the full control of this system. He stated there are lot of options in the middle that still can maintain
control of progression increases and that employees would agree to. He stated he thought most viable options were l and 2, and 7 and 8, where he gave some implementation costs.

It was noted that they negotiated $75,000 that would be applied
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in 1996 for wage study. Mr. Schmisek reported that the 1997 budget is set and carried a flat amount of $75,000, that council set a 2.6% pay raise for everyone across the system and not based upon study; and an amount for step increases.

Carpenter stated he was strong advocate of the open range option, gives council flexibility, understands that employees have concern about that but thinks it appropriate for council to make year to year decisions, allows flexibility in meeting needs that come up, and gives council flexibility to try to address concerns where they have little flexibility to grant across the board cost of living increases because having significant step increases.

Carpenter excused/Babinchak acting chair.

Ron Grande asked if don't have consistent way of getting to the top of the range, how ever get to the top. Committee stated it would take longer to get to the top of pay range. Mr. Schmisek stated no guarantee to get to top unless step larger than cost
of living, no way of guaranteeing timeline. Mr. Grande stated that in open range option, no consistent way to get through the range. Mr. Gordon stated that open range is what private industry does, that employees want guaranteed step increase; he stated that if they talk about open range there will be step increases for 1997 that are not budgeted or negotiated, and questioned how will that be handled or will they start in 1998, only 30% of employees budgeted for stp increases in 1997.

Mr. Schmisek stated that they will try to have information ready, possibly by end of next week. Held for 2 weeks.

8. Matter of transfer of funds for riverbank maintenance.
Mr. Schmisek reported that they could take monies, $22,000, from Nuisance Abatement Fund for riverbank maintenance, and will need to talk later about 1997 because not budgeted.

Moved by Hamerlik and Bakken to approve transferring $22,000 out of the nuisance abatement fund to fund the riverbank maintenance project. Motion carried.

9. Matter of five-year special assessment cancellation for
streets, sidewalks, etc.
Held in committee for two weeks.

INFORMATION: Mr. Schmisek reported that the mill levy for the City went down about one-half mill from last year, and the
overall levy against city residents for all the taxing entities is going to go down about 1.55 mills.

Meeting adjourned at 5:30 p.m.
Alice Fontaine, City Clerk