Committee Minutes

MINUTES/FLOOD RESPONSE COMMITTEE
Wednesday, December 17, 1997 - 5:00 p.m.

1. Members present: Hafner, Glassheim, Bakken, Polovitz, Carpenter.

2. Matter of non-profit update:
Corrine Morgan, case manager at Catholic Family Service and member of Unmet Needs Comm., presented the weekly recap of volun-teers in cases & events: that this week brought 60 volunteers for the rebuilding process, that Victory is working on 23 homes and LDR is working on 10 and listed agencies working on the reconstruction process (incl. Church of the Brethren, United Methodist Comm. on Relief, Christian Public Service, Lutheran Disaster Response and Christian Reform World Relief Comm.) She reported that the total number of cases is 928, with 695 in casework and 240 closed. She reported that Catholic Family Services has two licensed social workers hired as case managers, that they work in conjunction with the RAFT program which is a consortium of agencies who deal with disaster related needs and with the new St. Vincent de Paul Society. She stated they will be assisting with the Phase III program to rehabilitate homes. She stated their caseload is constant, with referrals from United Way; with needs from assis-tance with clothing, furniture, appliances, repairs, medical and advocate for clients if needed. She stated they help people where FEMA, SBA, IFG and insurance can't; sometimes just listening, etc., that everyone has suffered and turn no one down. She also reported that they have been able to play Santa to some families because of generosity of people across the country who have called in and want to provide for families.

3. Matter of flood protection study update:
Ken Vein, asst. city engineer, reported that they don't have much additional to bring in, weekly are continuing to meet with Corps reps. and most of the work is being done by SEH and the Corps of Engineers and City interacting with them as necessary. He reported that on the local level are trying to meet with various affected interests and with the GF County Resource District this morning, with the Red River Joint Boards, dealing with drainage up and down the Valley and setting up meetings with some of the Town-ships and any other affected interests to explain where they are and processes going through over next several months. He reported that they are releasing information as it becomes available.

4. Matter of water treatment plant update:
Charles Vein, Advanced Engineering, reported they wanted to bring information/update to the committee on the water treatment plant; that yesterday they met with FEMA on approval of the DSR's damages; and prepared for the committee a spread sheet showing the various DSR's categorized by supply treatment and distribution, and looking at what damages, mitigation, total amounts with FEMA, State and City each paying. He reported that total damages for the drinking water system amounted to about $8,312,000 of which FEMA has agreed to pay $1,746,722 for total mitigation projects to
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$10,058,000 and of that amount FEMA/State agreed to pay $6,886,000 leaving approx, $3,172,242 for the City. He reported that of the amount the City is to pay, one is raw water supply of $454,000 (project that was in construction at the time of the flood and they would not cover work that had already been planned, and the other item is for water meters of $2,435,000 which is est. at 75% of the meters in town which were under water and were damaged and because owners own the meters because of the public assistance program FEMA stated they could not pick up any of the costs associated with replacing the water meters, and have pointed them to the individual assistance program and that will have to try to work through). He reported that if they reduced City's cost by those two programs, City's cost would be $282,253 and of that amount have written letters of non-concurrence for $264,922, leaving about $17,000 extra cost to the City. He stated there is lot of work to be done with about 6 months away from completing all of the repairs and are concentrating on a number of the mitigation items to be prepared for work next year. He reported that they are also looking at meters to see if reading accurately. It was also noted that any plans for replacement of meters would be brought in at another time. Info.

5. Matter of CBD rehabilitation grant applications for McConn & Fisher and Norby's.
John O'Leary reported that these two proposals reviewed earlier and held for further information; that one of the applicants includes Norby's Office Services, Inc., located on South 4th Street. He reported that there are two transactions, one related that Norby's applied for a grant to help compensate for flood damages and this is a program that any business in the central business district would be eligible to receive, match is 15% and eligible to receive grant in the amount of $105,000 because of nature of damage; second part of the project was relationship of this business with corporate center - with two separate and divi-sible aspects, that the second part has to do with need for this building as part of the parking and discussion with owners as to purchase of their building, that the owners have indicated an interest in staying downtown, they have indicated trading their building for another building in the CBD (one across the street - Kloster building) which City purchased for $187,000 and which incurred substantial damage on the first floor and basement (some improvements have been made by the existing owners) but ground floor vacant. He reported that the trade, if it materializes, will need to occur after an appraisal has been done on the Norby's building across the street and are in the process of having that building appraised and when completed in next two/three weeks will bring that back to committee and then council can determine whether that transaction fair, etc. He reported that if trade or keep Kloster building, think that ground floor of that building is eligible to receive assistance (either owner or tenant can make application for grant) and that's current position of the
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transaction. Hafner asked whether Kloster building would appreciate in value in next two weeks; Mr. O'Leary stated he didn't believe so but not sure. Committee asked why award money to building that business not going to be in; Mr. O'Leary reported that Norby's owners renovated their business but perhaps trade not happen if unable to negotiate swap on the buildings or council doesn't approve. Glassheim asked whether City could fix up their current building and then give money to fix another building - into situation where excessive. Mr. O'Leary noted that if at time Norby's started fixing their building that the City was looking at corporate center, would have contacted Norby's. Mr. O'Leary reported that the $105,000 expenditures documented; and he also reported that they sell office supplies and retail outlet, etc.

Moved by Carpenter and Bakken to approve both grant applications: McConn & Fisher, 315 1st Avenue N, $53,200 and Norby's Office Services, Inc., 18 S. 4th Street, $105,000.

Jerry Waletzko, 4806 6th Avenue North, questioned trade of the Kloster building for the Norby building for even trade, someone acuiring building worth more than $185,000 when City trading building of 11,100 sq.ft. on two floors with full basement for building of lesser value, or questioned whether values have increased. Carpenter reported that what they are approving today is only for the rehab application of the Norby's building and not for the trade.

Mr. Waletzko asked what $105,000 is for in the Norby building, whether attached fixtures, etc. Gary Christianson reported they ask for estimate of expenses for committee and do detailed analysis afterward, and for this building didn't include anything for modular furniture, etc. but hasn't completed essentially.

After further discussion and upon call for the question, the motion carried. (comm. only)

6. Matter of continuation of flood response committee.
Polovitz asked to hear from staff whether the intended purpose of committee was to act quickly and decisively rather than through normal process and to council and if committee still needed. Mr. Schmisek stated that staff's recommendation hasn't changed, are getting into next phase of recovery and still some planning processes put in place but also need to continue on flood related items as well as recovery items, that those items to be processed through other committees need to go to them, and by extent of agenda, need to continue to act quickly, still find items to bring items to quickly, but don't get agendas to committee quick enough. He reported that the Tri-chairs spending limits were $50,000 and they have approved two around $20,000 for expansion of phone system as they moved back in and for work on various sidewalks; that Flood Response was up to $250,000 and not many that haven't been moved
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back on council (downtown enhancements). Polovitz asked if Flood Response has authority to acquire property (which they do) but think if public reaction could move onto council.

Jerry Waletzko suggested that people have more time and City should have section in Herald and to allow citizens to attend meeting. It was noted that many time agendas aren't ready until morning of the meeting. Mayor Owens stated that they did review with consultants on what have done right/wrong and thinks citizens so busy with normal lives and didn't hit until recently, may need to have more depth with public and are discussing ways to do that - newsletter and open session after the first of the year, and make sure have public information on things and will work harder on public communication. Scott Hennen, KCNN, stated when they receive agendas could broadcast those items, they have hourly newscasts. Mr. Schmisek reported that they could work with media and have pub-licized agenda items and that there may be more items. Mr. Hamerlik, Ward 2 council member, reported that some of the council members don't have faxes to receive agendas, that there are timing problems, and seems that committee has tough chore in deciding its own fate, tough to vote themselves out, and his recommendation would be to recommend going several more months with council to make that decision. Polovitz stated that the purpose of the committee is to act in more expedient manner but problem to get information out to council, but if purpose of committee, suggested staying together. He stated that if they continue to establish items to go to full council. Glassheim stated that council decided to pull items to appear controversial, that they get agendas in advance, and need to place minutes on internet so anyone who has access to internet could look at (Library has free internet). He stated that committee should be asking questions as citizens and not as friends of staff, but committee's job to be little bit different and ask annoying questions and nothing personal. He stated that council needs staff to do things for them, have three information specialists who work for administration but no one to work for them to filter what they think might be problems, and would ask at next budget time to look at.

Sandy Norby, Norby's, stated that she thinks council doing a wonderful job, that there have been meetings upon meetings and if anyone wants to be heard they could be heard and hopes council can keep vision for future years.

Carpenter stated he has been more of advocate of dissolving com-mittee and that items which belong on agenda belong here, and sees one major response for this committee, which is that residents have one place to go but need to see agendas in advance.

Jerry Lucke, Ward 2 council member, stated that this committee not only public body with spending limits for emergency situation, but only one left in place at this point, that some items not referred
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to committee (pumps for change order, grant order not going to council, and Kloster building not been to council); Bakken stated that's part of reason they're here and have to keep course that affects everyone years ahead and that committee should continue for another six months with current spending limits, and that council could vote out if they so desire.

Moved by Carpenter to amend motion to continue flood response com-mittee for six months to require that agendas be made public one day in advance of the meeting and be distributed to council members and press during that time.

Hafner stated that some items have been presented to more than one committee.

Mr. Waletzko stated he had been unable to obtain copies of minutes, and has called to city attorney's office for information, and asked that info be placed on internet. Mr. Schmisek reported that Pete Haga of Info Center working with Computerland to establish web page, and will happen fairly quickly; also working with HUB con-sultants to work with city government on better E-mail system, better wide area network so all offices can have access to the internet and can also establish web page.

Upon call for the amendment, the motion carried.

Upon call for the question on the original motion, which is to continue this committee for an additional six months at current expenditure limits and to acquire agendas to be established day before. Motion carried.

7. Matter of alternative single family rehabilitation.
Mr. Hamerlik reported that he had explained this on Monday night, and which appears to be quite simple, and asked whether they wanted to refer to staff to bring in with more concrete proposal rather than concept at this time. Carpenter asked to hear concept from public and then refer to staff for more details. Bakken stated that he becomes concerned when put concepts out before being defined before making proposal but may not be able to fund. Mr. Hamerlik reported this is to fund residences that are owner-occupied through CDBG grant that will assist the owner by granting them money beyond a certain level of damage as determined by one set agency, something like damage above $15,000 and used as base to be consistent so city assessor's estimation and beyond that level of damage, fund half of their damage beyond that and put ceiling on that (wouldn't include apartment buildings, businesses nor anybody who had sewer insurance so no duplication of effort) wouldn't be funded over $10,000 and no duplication of benefits so should go
back to staff, so more they can fund is better. He stated he indicated that isn't as important but able or capable of spending in family rehab. Mr. Hamerlik stated this would exclude anyone in
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Phase I, IA, II or III, this would be considered Phase V. Glass-heim asked what problem this would be facing, what trying to accomplish. Hamerlik stated that many people asking what can City do to help them, lot of people asking for something for them in some small measure, many included debts on their residences. Mr. Schmisek reported this was for damages over $15,000 damages in concept, and gave assessor authorization to reduce appraised value by $15,000 which may be different that this. Mr. Hamerlik stated that it was over the $15,000 reduction of the assessor, and tried to make more simple for these people. Committee referred the matter to staff and be brought back at next meeting.

8. Other business:
a) Carpenter presented the matter of Congressional First and Second where he had read that City had given to the Grand Forks Realtors Governmental Affairs Committee, the pricing of the units; that the City would be subsidizing the lots to approx. $10,000 per lot and in effect not fully recovering the cost of the land and the infrastructure that City has put in and his understanding is that the actions of the council were that it is not to be a subsidy but debated the issue of a voucher program that people could use anyplace vs. subsidization of lot costs and his understanding is that council approved the voucher system and not subsidization program, and would like to have clarified and need to be recovering full amount of the lot, etc.

John O'Leary, Urban Development Office, reported he has talked to several council members with different clarifications, and that when this property purchased it was turned over to Grand Forks Homes, Inc., a non-profit corporation, who would be charged with responsibility of developing these homes and Grand Forks Homes would be establishing sales prices based on fair analysis of the families that would be displaced as well as what pre-flood values of these lots would have been if gone through more traditional way of developing them, lots were in the neighborhood of approx. $10,000 each pre-flood less than what these lots turned out to be. He reported that because City determined early on that City would lose $50 million in the tax base and that they were going to try to replace as many homes as could, given the limited number of contractors, etc. it would not be able to replace 600-700 homes, but have targeted 200 homes this year which bumps outside capacity of local contractors to build, and in the spring 220, but Grand Forks Homes Board has completed bidding these homes and pricing them and asked Mr. Manske to report cost of those lots.

Mr. Manske reported that they were going to try to charge less than legal price to these lots, and Mr. Carpenter stated that was directly contrary to what was before council. Mr. Manske



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reported to council that when acquiring land that the council was actually inquiring the full cost of the acquisition of this land and one of the efforts to leverage block grant money and extend it, went out and Fannie Mae came in to help finance this project and came to the position of allocating lot costs to each of these lots and pricing these homes, went out and tried to find comparable units for single family development that had tappable infrastruc-ture and tried to find some land, post-flood, with value of $15,000/acre and acquired some land (Burdick's Subdivision and Myhra property) that they used as comps. to establish the $15,000 per unit per acre cost to try to allocate the cost down to what would have been pre-flood market value to each of these homes. He reviewed several actual studies but according to study the average homeowner 49 years of age, value of home in buyout is $77,000 with mortgage balance of $47,800 which puts them in equity position of $25-30,000 with SBA financing City's voucher program for $15,000 provides them with vehicle or amenities to afford the house in this price range, but wouldn't if price all of the costs. He stated that the pre-flood mortgage payment of these homeowners in the buyout program is between $535/745 mo. He reviewed several actual cases; that these homes are affordable to the displaced families. He stated they are building 200 single-family residences that aren't affordable housing but are affordable to the homeowner from the Lincoln and Central Park neighborhoods and that is what they told council what they would do.

Mr. Manske reported on acquisition of cost: Sunland West which is 51.67 acres or $27,000 per acre; UND Foundation piece which is 11 acre parcel and paid $19,466/acre so total cost for First Congres-sional Subdivision is $1.6 million; 34 acres of 63 acre parcel not developed at this time; total platted acre cost of the 28.53 acres
is $731,000, land cost for the Second Congressional Subdivision
a 70-acre parcel, is $3,329,9972 so total cost for First and Second Congressional Subdivisions that's platted is $4.61 million; using the $15,000 per acre pre-flood land acquisition cost that they are allocating to the sale price of each of these homes, is $1,477,950 and total subsidy in this project with CDBG funds is $2.5 to $2.583 million; and putting that $20 million of infrastructure and tax base back into the community within a year of the flood, will have a tax base return in five years of that subsidy. He stated their goal was to redevelop tax base in short window as possible and would cost something to do that, but return in redeveloping single family housing. Hafner stated it was his understanding that they were going to give lots away and then when issue of voucher came up it was to charge for the lots, but not aware of price. Mr. Manske reported he was not involved in voucher program.

Carpenter stated he had asked at meeting whether recoup infrastruc-ture and cost of land and was told yes; that affordable housing different than City buying land starting to construct housing to make housing available for people who lost houses - two different
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issues and people have gone to second issue without proper debate and discussion because have impacted and are impacting a lot of other residents in the city, that there are 8,000 property owners who suffered damage, that now subsiding the purchase of homes that can jeopardize the value of their homes, and is an issue that needs to be debated, have done something that was not intent of the council. Mr. Manske stated they weren't sub-sidizing the purchaser of this property, in the degree talking about, nobody would have gone out and purchased land for developing single family housing at their post flood values and reason they did was because only infrastructure tappable and developable for this year's construction, all they did then was bring playing field down to par and didn't allocate most flood disaster related charges onto the potential home buyer, subsidized the development cost of house to bring to par. Carpenter stated plus subsidizing interest which he knew they were going to do with CDBG fund, which he thought was only subsidization, but also administration of it, and doing lot more than $10,000 and questioned if only people eligible to buy these homes that were bought out - and not only not limiting to them so if subsidizing whether should be doing for those who didn't lose their houses. Mr. O'Leary reported that intent at beginning of this program was to everyone that clear intent of this program was to put $20 million back in our tax base as soon as can, and if don't do that in a world of hurt, this is big money and only way to rebuild those houses. He stated that if Grand Forks Homes not willing to move forward to do this, would have had 15-20% reduction in people. He also reported that they are using local developers, etc., and if hadn't built homes would have had larger percentage of those without home ownership. Carpenter stated he didn't have $20 million in tax base back on but what he disagrees with is hidden subsidy that wasn't debated and discussed, should have had larger voucher system and no subsidy. Mr. O'Leary reported what he thinks they can do with CDBG money is to relieve some of the tremendous pressure have on new development on infrastructure costs, that this land because of its flatness creates high infrastructure costs because of having to move liquids is to pump it there; need to partner up with private sector to relieve those infrastructure costs, reduce the cost of those lots and to encourage more private sector involvement, and have time now for the next round of housing to look at the best options we've got and will bring number of options to the committee/council's desks and bring down cost of lots by driving down cost of infrastructure (that by putting in cost of lift stations or water towers on south or west end of costs, reduce cost of those lots).

Jerry Tuchscherer, Grand Forks Board of Realtors, stated that property average increase in cost of land is 5.6%, numbers came from sales prices from January 1 to September 15, did for four-year period, 5.8% average percent, and this year 5.6%; that market is starting to adjust. He stated they need to do something to trigger
growth of future development of housing and possibly by going with
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some infrastructure over next number of years, putting infrastruc-ture on land owned by more than one/two property owners.

Polovitz excused.

Mr. Manske reported that goal is to get under construction as many homes as possible and put on market from sale and demand; that demand is very high - have 133 families interested in purchasing houses; and have 263 lots developable and then Grand Forks Homes make determination on how much more to go.

Bakken reported have 758 homes willing to buy, 450 accept and with dike alignment, demand go higher, and if put 200-300 houses year/ still be behind pre-flood house market; but if don't want to grow, don't have place for people to live.

Mr. O'Leary reported that about 20,000 households in city, half renter and half homeowner, should be putting on 100 new single family units per year, and been many years since built that and some of those homes been as low as 15-17 units, been falling behind, not as worried as some are in over building, with 200 units, only catch up. Carpenter stated that while haven't lost 10-15% pop. have lost some, so perhaps don't have to replace everyone, and shouldn't be built with subsidy. Hafner stated they should make it easier for builders to build. Info. only.

9. Next meeting of committee:
The committee scheduled their next meeting for Tuesday, December 31 at 12:00 noon.

8) Other business:
b) Glassheim reported he had call re. closing for buyout, couldn't wait for 10 days for City to take possession so they would have time to apply their money for new place and moving; that Mr. Swanson had said problem with liability; and wasn't sure of City's policy. Committee referred back to the city attorney's office.

Moved by Bakken and Glassheim to adjourn; meeting adjourned at 7:00 p.m.

Alice Fontaine
City Clerk

Dated: 12/20/97.