Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, October 28, 1997 - 3:45 p.m.

Members present: Carpenter, Babinchak, Bakken, Hamerlik.

1. Matter of Varmints Baseball Team loan.
Mr. Schmisek reported that committee had asked that they invite one of the owners to be here, that Bill Coutts is here to give an update as to where they are at and that there is potential for the sale of the team. Mr. Coutts reported that he had talked with Jack Geller who is dealing with new team, that sale is close and that will result in the payment of that loan, new team assuming some debt in turn for their help in the transition. It was noted that there are rent payments and parking assessments due - $1700 in rent and $122 in parking fees. There was some discussion re. deadline for payment. The committee also asked that information be received from third party as to their intentions and Mr. Coutts stated they will ask for that information.

Moved by Hamerlik and Bakken that if payment not received by December 31, 1997 that the City start proceedings to recoup money from the co-signers of the note. Motion carried.

2. Matter of proposal from Brady Martz & associates to conduct
1997 audit.
Mr. Schmisek reported copies of proposal had been sent to com-mittee members, including fees for year ending 1997, base audit $17,850 plus additional fees due to increase in federal funds sub-ject to single audit and change in single audit requirements of $4,350 to $6,000; and optional proposal for year 1998: $18,350 plus additional fees for single audit of $2,950 to $4,000. Mr. Schmisek reported that fee for prior year was $17,350 (this year's proposal has increase of $500). He noted they also detailed process and assumptions they use in bidding out audit.

Ron Johnke, Brady Martz reviewed their proposal, stating that process that happened with all federal dollars coming in creates lot more transactions during the year; also, the Government Accounting Office passed new single audit rules (Single Audit Amendments of 1996), which require new approach to how single audit funds or federal monies handled, new procedure started as of June 30, 1997 and all audits ended thereafter. He stated that what that requires is understanding of how all those federal monies are being spent, gaining internal controls, documenting that, getting risk level down to tolerance low risk, and then doing assessments and tests based on that. He reported that the incremental fee for 1997, $4350 to $6000 is getting that understanding, finding how grants brought in, reading all grant agreements, what compliance requirements have to be tested, the internal controls over those programs and doing the testing. He reported that the optional proposal for 1998 goes down and optional part reduced because after first year a lot is carry-over type schedules and work papers they can maintain in their files and update rather than redoing process.

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He stated that with magnitude of funds and that this is first audit of this size under the new audit requirements, this is best esti-mate of what it's going to take to do that.

Moved by Hamerlik and Babinchak that we accept proposal in the amount of $17,850 plus additional fee of $4,350 to $6,000, and enter into agreement for one year, with option to renew for second year. Motion carried.

3. Matter of establishing price for delinquent tax lot from
County - Lot B, Harty's 2nd Resub. located on Gateway adj. to
McDonalds.
Mr. Schmisek reported that they had asked Mr. Carsen to place value on this property which is located adj. to McDonalds and behind Mini-Mart on Gateway Drive, and that value was set at $12,400. Mr. Carsen reported that this lot is 26,000 sq. ft. including the strip along side of Mini-Mart, that he valued back piece which is 12400 sq.ft. at $1.00/sq.ft. or $12,400, that the strip of land adj. to McDonalds and/or Mini-Mart encumbered by easements (utility and ingress/egress easements for the benefit of the property owner to the west - McDonalds), and has very limited value. He noted that McDonald's as full use of that strip of land. He noted that McDonald's might have interest in the property, as well as Mini-Mart and transmission shop to the east.

Moved by Babinchak and Bakken to declare the lot as surplus property and to establish an asking price of $12,400.00. Motion carried.

Mr. Schmisek reported that after council acts on this matter they will advertise the property for sale and give direct notice to adjacent properties.

4. Matter of ordinance relating to acceptance and expenditure
of gifts, grants and donations by mayor or department heads.
The committee noted that the requested changes had been included in the ordinance draft (acceptance of gifts, donations, etc. to the City, and depositing of funds into City accounts or funds as deemed appropriate by the city auditor rather than into separate fund). Moved by Hamerlik and Babinchak to approve the proposed ordinance and to introduce for first reading. Motion carried.

5. Budget amendment:
a) Youth Commission - $29,800.00
Mr. Schmisek reported these are grant funds Youth Commission has raised over and above funds allocated by the City and asking for an amendment to allow use of those funds (incl. in transfer is $13,000 for printing of the yellow pages). Moved by Babinchak and Carpenter to approve the budget amendment. Motion carried.


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6. Matter of pay for election workers.
Mr. Schmisek reported that normally election workers are paid minimum wage plus 25% upon attending of training session; however, there were a number of people unable to attend but because these are fully qualified people and have difficult time getting election workers, he recommended that they pay all election workers this amount - total est. cost $600.

Moved by Babinchak and Hamerlik to authorize election workers pay at minimum wage plus 25%. Motion carried.

7. Matter of reinstating parking assessments in central business district.
Mr. Schmisek reported that the parking assessments had been rescinded by council action, that the waiver hasn't been rescinded and now setting budget for 1998 parking assessments, need to rescind so can implement budget established at last council meeting.

Moved by Bakken and Babinchak to rescind the waiver of parking assessments in the central business district effective January 1, 1998. Motion carried.

Hamerlik asked whether fees collected from ticketing on streets (prior to rescinding of waiver) would be refunded; Mr. Schmisek stated he didn't think so.

8. Matter of status of Mall/Parking Authority employees.
Dan Gordon, Human Resources, explained process they used in establishing salaries. He reported that before last committee meeting Mr. Schmisek and Ms. Fiala visited with him re. some of the financial problems with the employees for the Central Business District and he mentioned that maybe they could use some of the Disaster Assistance, that they used it for helping out the Emer-gency Management Office which is City/County and didn't see why this wouldn't be eligible. He stated that they then called Ray Holmberg informing him that there are 4 employees working there plus a director and to give the Central Business District and City officials some time to make them whole with what they were cur-rently making for a period of up to $12,000 for each person, that Mr. Holmberg said to submit request for that, which they did, then appeared before finance committee and explained process. He stated that article came out this morning and caused lot of confusion/ frustration, that they came back with separate proposal for labor positions at $10/hr. and if that would be reasonable for their request, that they received preliminary okay but need everything in writing and are waiting for that process. Carpenter asked that based on the article in the newspaper if it was intended that these two individuals be supervisors only or if they would be doing the work. Mr. Gordon stated they evolved into supervisor titles because they've been there almost 20 years but they are working

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supervisors. Carpenter then asked what status of director was, and Mr. Gordon stated that would probably go back to CBD Board for their consideration if there is a request for funding for the length of Mr. Jackson's position, and that right now his position is outside of what working through. Carpenter asked if they would have to change assessments; Mr. Schmisek stated that at this point the committee may want to refer to the CBD Authority and allow them to come back with recommendation to the finance committee, would still have time to amend the budget because that won't go into effect until 1-1-98 and then bill accordingly.

Carpenter stated that under the disaster assistance this runs for 6 months or $12,000 per person and what happens to those employees at that time; Mr. Schmisek stated they may end up unemployed dependent upon situation of Mall or Parking Authority but allows downtown to take shape and allows whatever body gets formed to look at that and to come back and request action from the council. Bakken stated that he feels they need Mr. Jackson for this 6-month period along with those four people, and only trying to keep at current levels.

Moved by Babinchak and Bakken to refer the status of the director to the Central Business District Authority. Motion carried.

9. Matter of issuance of bonds for Grand Forks Homes, Inc.
Mr. Schmisek reported that committee needs to meet re. issuance of bonds for Grand Forks Homes, Inc. - housing revenue bonds to finance actual construction of houses, that they are using Fannie Mae for purchase of the lots and infrastructure. Meeting scheduled for 6:15 p.m. in Room 304 - council chambers overflow area.

Moved by Hamerlik and Babinchak to adjourn; meeting adjourned at 4:30 p.m.

Alice Fontaine
City Clerk

Dated: 10/29/97.