Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, November 25, 1996 - 3:45 p.m.

Members present: Carpenter, Babinchak, Bakken, Hamerlik.

1. Application for 3-year remodeling exemption:
a) 409 Gateway Drive, A-1 Vacuum, Kevin Frohlich
Mel Carsen, city assessor, reported this property formerly Gordy's Cafe, and Mr. Frohlich has done some remodeling; however, one of the requirements in the guidelines is that applicant has to file application within 30 days of the start of the improve- ments, and this application filed several months late, and fol- lowing the established guidelines, his recommendation is to deny. He noted that he has not made a re-appraisal of the property; and that if exemption granted property would remain at current valuation during term of the exemption; but didn't think re-appraisal would change value very much.

Kevin Frohlich stated that when he took out permit, he asked if there was anything else he should be aware of, and was told no. Mr. Carsen came in later and that was when he found out about the exemption. Mr. Carsen stated they have repeatedly asked engineering to make people aware of this when permit taken out; however, the permit issued for $500. Mr. Frohlich stated that when permit taken out he intended to repair roof and remove entry way to building and pylon signs; cost of improvements $4,000 (including installation of carpet, etc., that he didn't know costs and he does not know where $500 figure came from.

There was some discussion re. making property owners aware, notification. Mr. Schmisek stated that always policy decision by council, concern is that on some things notification given and some things don't; should provide them information but doesn't have specific answer.

After further discussion it was moved by Carpenter and Bakken to deny the application for exemption. Motion carried.

2. Matter of request from Community Violence Intervention Center
Inc. for waiver of rental for location in City Center Mall.
Mr. Hamerlik stated he had requested this be sent back to committee because of some other suggestions made, ie., use of third floor, 90-day termination period, etc. Kristi Hall-Jiran, CVIC, stated she was not at the last meeting and wished to clarify some comments made at that meeting: 1) that their funding similar to funding of other agencies in the state, and that the Grand Forks agency one of the larger ones in the State; have applied for 30-35 new sources of revenue (grants) and they are continually looking for new funding; 2) that vast majority of their clients are from Grand Forks and surrounding area, may initially assist EGF residents, however, they are then referred to the proper agency. She distributed copy of letter from contractor re. renovation of third floor as compared to second floor which stated that renovation of the third floor would cost

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November 26, 1996 - Page 2

almost twice as much to meet their needs. Mr. O'Leary, Urban Development Office, stated there are some funds in Contingencies and they could put another $20,000 into remodeling but hasn't seen cost estimates. He stated another option would be to do in phases (do some in next year)

It was noted that the third floor (of White Drug building) has been vacant 7-8 months. (second floor area in former NSP building) Mr. Schmisek also noted that the NSP building has est. value of $130,000. Mr. Carsen reported that $130,000 was realistic figure; only portion of White Drug building taxed, and doesn't have valuation. Mr. Bakken questioned spending $60,000 for remodeling of space in that building.

Moved by Hamerlik and Babinchak to defer for 2 weeks to allow further investigation of cost ests., etc. Motion carried.

Committee stated it was their intention to look at third floor in more depth, and if cost of remodeling is reasonable and can be funded from CDBG, that is their preferred direction. Ms. Hall-Jiran asked if their preference is still the second floor, could they still request the second floor space as that is what their grant was written for, and noted that the $40,000 includes filing system, security system etc. in addition to remodeling.

3. Request from Grand Forks Public Schools for space in City
Center Mall for alternative program for 13-15 year olds
called "Success Academy".
Ron Gruwell, assistant superintendent, presented proposal and reviewed program, collaborative proposal with several different agencies, School District spearheading because funding staff through grant from Safe and Drug Free Schools Program for at-risk youth; that concept is to take kids and work with 12 students at a time, work intensively academically, having parenting classes for parents, and is a 2-3 month program and phase gradually back into school setting, if don't catch at this age, potential drop outs and be on the street full-time. He stated the reason asking for space in City Center Mall is that many of the youngsters who would be ideal candidates for this particular program do not relate well to school in the first place and that's why looking for alternative site to not having a program like this in a school building; Mall space ideal because transportation is available. He stated he doesn't have money in grant budget to rent space; no room in Griffith building (they are remodeling one side for office space and office space being expanded for growing technology program); that if committee and council do not approve, he will find space somewhere; that once program fully funded will find other location. He stated that the specific space they are looking at is behind Equitable Life Ins. office, doesn't need any remodeling, they will provide maintenance, and reason for $1.00 lease is for legality of it so School Dist.

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liability insurance will cover programming there; kids would be supervised at all times.

Committee stated City becoming something they don't want to be, permanent landlord for no rent, requests multiplied in last few months, and puts City in hard position. Mr. Gruwell stated that space will not prevent this program from happening, option for them as they have no other space, and that even if the City could give space until summertime so they could get program up and running to allow more time to write grants, etc. Program starting January 21 to end of school year, but looking at summer program also but would then have space available.

Mr. Jackson stated that this space is rented by Equitable Life but not utilized, lease will expire in next 5 months. Mr. Swanson stated that if space leased, City cannot sublease without authorization; City paying utilities. Mr. Hamerlik suggested approaching Equitable. Mr. Schmisek advised committee that Equitable paying $900/mo. and $400/mo of that for that space. He also stated that he and John O'Leary attended Mall Authority board meeting last week and been volunteered to a committee to study usage of the Mall in general and what they want in there, and asked committee to keep that in mind as to what they do with these requests because key point which came out at meeting was whether roof should come off, and they are saying need to decide what want to do with that Mall first and what want in there and then decide whether roof should come off. He stated there is a planning process that is going to take place, but if something develops and they have opportunity to get rid of these buildings
and asked committee to keep that in mind re. long term leases, etc. Committee asked Mall management to contact Equitable to see if anything can be worked out, and held for 2 weeks.

4. Matter of request from Grand Forks Varmints for funding.
Jack Geller, 3321 Primrose Court, stated that their request for $40,000 loan had been held for two weeks, terms were not particularly discussed but some discussion re. personal guarantees, etc.; that this is unique industry, asset to the City of Grand Forks, industry that has no competition, and provides part-time summer jobs for kids. He noted it also has promotional value and asset to the community. He stated question is if City should have any role at all in providing some short term modest assistance, and in his opinion is a low-risk no-risk proposal to the City. He stated they have sold 200 season tickets, goal is 1000, going exceedingly well. He stated it would be hard to make the case that the future of the team rests on this decision, that it's matter of infusing a modest amount of short-term capital for the purpose of consolidating community debt. Mr. Hamerlik stated this is worthwhile but thinks City should be lender of last resort.


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Mr. Geller stated they didn't qualify under Growth Fund as they are not a primary sector industry. Mr. O'Leary spoke in favor of the request, creates jobs and brings money into the community; looks at in same light as riverboat; owners willing to give personal guarantee, and supports request.

Moved by Hamerlik that we approve loan subject to 3 year max, with interest rate City has to pay and with personal guarantees, providing we are lender of last resort; motion died for lack of a second.

Moved by Babinchak to approve $40,000 loan for max. of 36 months, at rate investment portfolio currently earning, and that there be personal guarantees from the owners of the Grand Forks Varmints; seconded by Carpenter. Motion carried; Hamerlik voted against the motion.

Mr. Schmisek asked committee where money to come from; and committee instructed him to bring recommendation back on Monday night as well as rate of interest.

5. Matter of agreement with Springsted, Inc. for arbitrage and
rebate monitoring services.
Held in committee.

6. Matter of copier bids.
Mr. Schmisek reported they have been evaluating copiers for past several months, asked vendors meeting specs. to bring in their copier for 2-week trial period, and staff members evaluated equipment; recommendation is for the Mita DC90 which was bid by Liberty Business Systems, lowest and best bid (time savings) in amount of $17,792.00; other equipment as final was Lanier 6775 at $14,515. It was noted that references re. service were checked, 3 local service techs. with excellent response time; life of equipment 2 million copies before need for refurbishing; City averages 50-60,000 copies/mo. Moved by Babinchak and Bakken to authorize purchase of the Mita DC-8090 from Liberty Business Systems in the amount of $17,792.00. Motion carried.

7. Matter of communication to Sherman Associates, Inc. relative
to their request for financing for low/mod income housing.
Mr. Schmisek reported that draft of letter had been sent to the committee for their review. Committee suggested including that they would be interested in looking at housing revenue bonds, Mr. Hamerlik had some suggested language re. this program, that under different terms would welcome second proposal. Committee suggested that Mr. Hamerlik meet with Mr. Schmisek and to send letter to Sherman Assoc. Comm. only.

8. Request to call for bids for backup boiler for civic
auditorium.

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Bob Owens reviewed specs. and requested to call for bids; that this is included in 1996 CIP budget, $30,000 budgeted and would come from Building Fund. He stated that they have only one boiler, operated without backup for five years (existing boiler would become backup). He also reported that he worked with mechanical inspector on specs.; it was noted that there was specific equipment and model number referred to in the specs. and it was suggested they include equal or better in the specs. Mr. Swanson stated they need to id. functional equipment, does not favor brand or model. Moved by Bakken and Babinchak to authorize call for bids, subject to review and approval of specs. by the city attorney. Motion carried. (Committee only)

9. Matter of review of sick leave transfer policy.
Dan Gordon, Human Resources, submitted information to the committee re. usage of sick leave donations for city employees from 1993 to 1996. He reported that Fargo allows donation of vacation time, but Fargo, Bismarck and Minot do not allow donation of sick leave.

Committee noted that most of the donations of sick leave did not appear to be of emergency nature. Mr. Gordon suggested program that when there was a demonstrated need, forward to mayor's office, who would then call for donations, and this would benefit person who has emergency and fall in line with tax regulations. Mr. Schmisek asked that they hold this for 2 weeks and he would run it by Brady's. Mr. Hamerlik questioned funneling through mayor's office, whether becomes political, and suggested maybe another way of handling. After further discussion the matter was held for 2 weeks.

10. Matter of proposed changes in license and permit fees.
Mr. Schmisek reported that the listing of proposed changes were presented during 1997 budget process and included in the 1997 budget. Moved by Babinchak and Hamerlik to approve proposed changes and to introduce ordinance for first reading. Motion carried.

Moved by Hamerlik and Babinchak to adjourn; meeting adjourned at 5:30 p.m.

Alice Fontaine
City Clerk

Dated: 11/26/96.