Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, January 27, 1998 - 3:45 p.m.

Members present: Carpenter, Babinchak, Bakken, Hamerlik.

1. Matter of airport authority membership.
Howard Swanson, city attorney, reported he had opportunity to read letter from Don Olson, attorney for Airport Authority, who has given an opinion that neither the City nor the County can affect change in the membership of the Board of Airport Authority; that he doesn't agree with basis if his opinion that once corpora-tion is established through the Secretary of State's Office it requires consent under Airport Authority's statute for a change, however, when Airport Authority set up by joint resolution in ordinance of County and City and in Sec. 20-0204 it speaks subject to any restrictions or limitations herein to the Regional Airport Authority created hereunder shall have such powers as granted by ND Century Code Chapter 2-06. He reported there are various locations throughout our chapter on the Airport Authority that we have restricted their authority and not granted them complete authority and have come back to City, so he is not sure Mr. Olson has entirely considered the restrictions and limitations to be placed on the provisions in creation of the body; however, there is a provision in the Airport Authority section of the Century Code that does talk about any changes in makeup having to be approved and consented to by the Airport Authority. He stated he doesn't know where city council may want to take the issue nor what intent of county commission is. He stated they could have several things occur: 1) simply force the issue and adopt the current ordinance and resolution (which may already be adopted) and direct Airport Authority that their membership has been increased by two members, 2) request that they consent to the change in membership, 3) hold off on membership change, or 4) seek an attorney general's opinion, but hesitant, because aware of some comments of the Aeronautical Commission that they have already expressed on this. He stated if circumstances warranted could file declaratory action in District Court and let Court determine issue. He stated not an open and shut case, and his opinion not without risk.

Carpenter asked Mr. Swanson that if City to change anything in the ordinance, would require consent of the Airport Authority, if that view held or just membership. Mr. Swanson stated he hasn't seen what Secretary of State's file indicates as far as restrictions and limitations. He stated that one of the things City required was that Airport Authority had to maintain its civil service type program for employees, and couldn't deviate from that. He stated that he didn't know when Secretary of State issued the certificate of corporation it noted any of those restrictions or limitations. Another required maintaining pension fund, and another, there is a provision for increase in membership upon the addition of other participants.

Carpenter questioned whether in the future the council or county commission wished to terminate the airport authority, would that
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take consent of the Airport Authority Board; and Mr. Swanson stated that by position taken by Mr. Olson, it would. Carpenter ques-tioned if allow Airport Authority to consent, would that establish a precedent for future issues, and it wasn't intent of the city council at time created. Mr. Swanson stated they could word such a request in a fashion that it would not. Mr. Swanson stated that's portion of the reason he's not so confident of Mr. Olson's opinion, ignores history and ignores transfer documents.

Mr. Swanson stated that they could advise Airport Authority that both bodies have taken that step, not sure who appointed to serve on body, advising Authority of step of County and City and request they be seated. He reported that the opinion of Mr. Olson was that they be seated but not allowed to vote. Committee stated they already have ex-officio members on the Board.

Moved by Babinchak and Hamerlik to authorize City officials to sign communication with the County advising the Airport Authority of the action taken by both bodies and request the seating of the members.

Ted Anderson, executive director of Airport Authority, stated he is there to do as governing body wants, that this has some consider-able tension at State level from State Aeronautics Commission as to what and how it happens and they passed that on to him and will go ahead and take appropriate action, that it maybe contradiction what they believe the way voting should be set up. He stated that he will wait for what Board wants to do as they are his governing body.

Upon call for the question, the motion carried.

2. Request for a resolution from the council allowing plat to be
recorded even though taxes not paid.
The deputy auditor reported that letter had been received asking that the City record Lot 1, Block 1, Columbia Park 2nd Addition so that property can be sold, that if City can do that they will pay specials on that portion of that property, and pay balance later from sale of that property.

Bill Gambucci, lawyer for Big Sioux Travel Plaza, reported on taxes that his client would be willing to pay in exchange for this resolution. He reported that First Bank has significant mortgage on the property and has been in discussion with their lawyer during this process and that First Bank wanted proceeds of the sale but reported that they wouldn't be able to sell property without resolution from the City. He reported that total taxes due on the 30-acres is $548,785.71 as of 1/26/98 and basically First Bank has
agreed to go with whatever arrangement client is able to make with the City, and what they would change in letter that they apply pro-ceeds of the sale to the taxes, there would be some closing costs, but in the range of $250,000 to apply from sale to Interstate and
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that would basically give all proceeds from the sale to taxes. He reported that he has talked to Mr. Swanson re. statute Section 11-03, subpart 5, and are in agreement that this could be done under Century Code and in council's sole discretion where give resolution to replat lot without regard to taxes.

Committee asked what guarantees are that proceeds would go to taxes, Mr. Gambucci stated they are willing to enter into whatever arrangements with the City, setting up escrow, that Grand Forks Abstract handling sale, and that he and Mr. Swanson could work out satisfactory arrangements to see that proceeds go for taxes. Bakken stated he would support request, and stated that this exception not a rule, and buyer wants to build and expand their business.

Mr. Gambucci reported that they would be willing to include in some way, his clients also own the old Big Sioux Truck Stop which has been sold and will close on June 16, 1998 and have had to escrow with the Bank money from that sale to cover the taxes and all taxes will be taken care of as of that date, and also willing to put that in their agreement with the City.

Mr. Swanson reported that the City has had requests and last time with Perkins Land property at Columbia Road and 32nd Avenue S. and on other property east of that; and only time ever approved was on property on S. 3rd Street behind Windmill when City tried to acquire property along the river. He reported that on one hand have some taxes paid, and recoup some taxes but lose some leverage in allowing. He stated it is purely council discretion.

Committee asked if something could be included in document to make more of an exception; but Mr. Swanson stated not aware of all facts to come up with true distinguishing feature. Mr. Gambucci reported that in letter they would pay taxes applicable to three acres to be sold, but now offering full purchase price of the parcel (less closing costs).

Mel Carsen, city assessor, reported that largest part of tax bill would be general taxes, taxes on lot to be sold about $10,000. He reported that of the 30 acres, 20 acres developed, and most of taxes on developed land. It was noted that taxes would include special assessments also.

Mr. Gambucci reported that requirement with the Bank is that to transfer deed to Superpumper (on old Big Sioux) they pay all back taxes on new property and would be part of what proposing today. He reported that Interstate ready to go, replat drafted, and purchase agreement signed with sale in month or less.

Hamerlik moved that we instruct city attorney to draft resolution
that would outline provisions that were offered and discussed today and that we meet as soon as possible to move forward and recommend
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to the city council. Babinchak seconded the motion.

There was some discussion re. resolution; Carpenter stated he would think very important to include distinctions in resolution because allowing resolution because proceeds going to entire taxes and remaining taxes be paid within six months. Mr. Swanson also noted that once plat recorded cannot be unrecorded.

Committee scheduled meeting at 7:15 p.m. on Monday, February 2.

Upon call for the question, the motion carried.

3. Consideration of bids for Lot B, Harty's Second Resub.
(located on Gateway Drive adj. to McDonald's)
Mrs. Jerath reported that two bids received: Bill O'Keefe, McDonald's, $4,550 and Smitty's Transmission Service, Inc., $5,000; property est. at $12,400. Mrs. Jerath stated that bidders were given opportunity to up their bids but didn't. Mr. Carsen reported that $12,400 reasonable price for the property, that about 12,500 sq.ft. usable property and that excludes tail to Gateway Drive.

Moved by Hamerlik and Bakken to reject bids.

There was some discussion re. resale of the property, and it was noted that property offered for sale, if don't accept bid, property still for sale and City could consider any offers.

Babinchak moved to amend motion that we try to re-negotiate price with bidders, motion died for lack of a second.

Upon call for the question, the motion carried.

4. Matter of resolution concerning the investigation of funds (to
establish and maintain account with A.g. Edwards).
Mrs. Jerath reported they received request by A.G.Edwards
that they be included in list of brokers so be included in our investment list.

Hamerlik and Babinchak moved to adopt resolution allowing A.G.Edwards to be placed on the bidders list. Motion carried.

Hamerlik excused.

5. Matter of specifications for safes for water utility and MIS.
Mrs. Jerath presented specs. for two safes, one for finance department (utility cash) and for MIS (storage of tapes). It was noted these are moveable safes. Moved by Babinchak and Bakken to approve specifications and authorize call for bids. Motion
carried. (comm. only)

Hamerlik reported back.
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6. Matter of specifications for mail machine.
Mrs. Jerath reviewed specs. for mail machine (with some components) for finance department who does mail for the entire City. It was noted that no one has replaced Handi-Mail. Moved by Babinchak and Bakken to approve specs. and advertise for bids. Motion carried. (comm. only)

7. Claim for payment of damages to vehicle.
Mr. Swanson reported he has received claim for damages to automobile (and passed out photos), that Chuck Orvick (Minnesota) claims that vehicle driven by son or daughter at University was damaged during snow removal last year, claim was turned over to ND Insurance Reserve Fund, was investigated and claim denied because insufficient evidence that damage caused by city snowplow. He stated his understanding was date and time of incident, street department does not believe it had any equipment on that street, and also believed that damage could have been caused by private snowplow clearing parking lot in background; that Mr. Orvick turned claim into his carrier and he is asking that his deductible be paid by the City, and that request also turned into Insurance Fund and they denied that as well as no evidence on part of the City. Mr. Swanson reported he had written to Mr. Orvick and reported that he would be recommending denial of the claim.

Moved by Hamerlik and Babinchak to deny claim for damages. Motion carried. (comm. only)

Moved by Hamerlik and Bakken to adjourn, meeting adjourned at 4:45 p.m.

Alice Fontaine
City Clerk

Dated: 1/29/98.