Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, April 28, 1998 - 3:45 p.m.

Members present: Carpenter, Babinchak, Bakken, Hamerlik

1. Application for abatement of 1997 and/or 1996 real estate
taxes:
a) Jerry and Susan Olson, 1908 1st Ave.N. (Lots 21 and 22, Block 51, Budge & Eshelman's Third Addition).
Mel Carsen, city assessor, reported this is 1997 tax and
involves flood-damaged property, that it was checked out by their office, they did computation but didn't put into computer system so change not made and tax not adjusted. He stated that the only way to change for 1997 is by abatement and this will remedy that situa-tion, give an adjustment at 70% and a refund. Moved by Bakken and Hamerlik to approve the application for abatement as presented. Motion carried.

Babinchak reported present.

b) Michael Braley, 905 North 20th Street (Lot 12, Blk. 1,
Swangler's Subdivision.
Mr. Carsen reported that Mr. Braley is a disabled veteran, has been since late 1995 with a service-connected disability of 50% or more and an income from non-service connected income for the pre-vious calendar year of less than $13,500, that he qualifies for an exemption up to a certain limit on the house only and these two abatements ask for that refund to be allowed for 1996 and 1997 and this would give adjustment for those two years. Mr. Carsen stated you can go back two years and Mr. Braley did not receive before that because he did not meet that disability until late 1995 with disability to 60 or 70%. He stated that individuals are normally referred to assessing by the Veterans Service Officer. Moved by Bakken and Babinchak to approve the applications for abatement as presented. Motion carried.

2. Matter of airport bonds.
Steve Johnson, interim executive director of the Airport Authority, and Mary Jo Crystal, director of finance and administra-tion, were present. Mr. Johnson presented information packet to committee members. Mr. Johnson reported that about April 16 the Airport Authority Board accepted bids on a project at the Airport to expand the heavy air cargo apron that FedEx and other cargo carriers use, and reason for expansion is that it has become crowded with number of aircraft on the apron, parking restrictions as to how aircraft have to be oriented and attempting to provide for some growth for FedEx to expand their operation at the airport consistent with what they tell us their plans are for the future. The cost of the apron expansion project they bid is approx. $2,026,000, about $870,000 is being financed by the Airport FAA Grant Entitlement funds, leaving approx. $1.2 million that the Authority wishes to finance with bonds and are asking both the City Council and County Commission for their concurrence to issue those bonds, and are planning to issue contingent tax levy g.o. bonds,
MINUTES/FINANCE COMMITTEE
April 28, 1998 - Page 2

which will be repaid over the next six years through a revenue stream created by their collection of passenger facility charges which is basically $3.00/passenger who flies out of Grand Forks on a revenue type basis (not a frequent flyer ticket or pass). The passenger facility charge generates about $250,000/year for them and they have used this type of bond issue with City's concurrence in the past, with bond issue in 1990, in 1994 and pursuing again at this time. He stated that the primary reason they are asking for City's concurrence and going with the contingent tax levy g.o. bonds is that they save significant dollars. He stated that Commissioner Wood is an ex-officio member of the Authority Board and when they brought this up suggested they approach council and the commission and get concurrence rather than going through a strictly airport revenue bond; they've calculated it and it makes about $30,000 difference over the life of the bonds.

Hamerlik asked what their jurisdiction is relative to ours that would enable them to have savings, separate entities, and asking City/County to sign off so they get cheaper rates, and asked why didn't they go to State or other entity, what is relationship with us. Mr. Johnson reported that the City and County created the Airport Authority, but it was noted that the City has no jurisdic-tion and no voting members. It was asked if Mr. Schmisek had seen letter from Springsted; Mrs. Jerath reported letter was from City's bond advisors that bond issue needs to be looked at more closely before pledging taxing authority of the City. Mr. Johnson stated this was no different than when City and County committed in 1990 and 1994 for fuel farm, rebuild crosswind runway A26 and taxiway Bravo, new FedEx building, etc. Mrs. Jerath reported that only refinancing bond was in 1995 and didn't pledge the taxing authority. Ms. Crystal stated that both 1990 and 1994 were both contingent tax levy g.o. bonds. Committee stated they need more information re. what has taken place in the past.

Committee asked what timeline is, what would impact be with two weeks delay. Mr. Johnson stated they would have to speak with Authority Board and decide whether it does have an impact, may drive the Authority to determine to go back to its original plan of issuing airport revenue bonds rather than asking for assistance, doesn't know what effect delay would have and what their wishes would be. He stated they have interim financing set up with a financial institution to carry them over until the bonds are approved and believed for the sake of saving $30,000 they might be able to delay but will be an Authority Board decision.

Committee asked what passenger facility charge was being used for now; Mr. Johnson reported to pay for projects that had already been completed in the past. Mr. Johnson reported this is continuing when have collected for a series of projects and paid that off, then the next PFC collection starts the next month and is continuous process as long as have projects that qualify for PFC (includes apron, pur-
MINUTES/FINANCE COMMITTEE
April 28, 1998 - Page 3

chase of snowplow and front-end loader), on projects completed or are being built this summer; and this project would qualify and would continue in September when other expires; amount sufficient to make these payments. Carpenter stated that it's all contingent upon Northwest staying and continuing their service; if take off or reduce service would have problem. Mr. Johnson stated there wouldn't be a problem even then, looked at current tax levy being provided to the Airport by the City and County and should something catastrophic happen it appears they could continue to pay with those tax dollars the 1990 bond, the 1994 bond and bond they are proposing out of tax revenues already providing them.

Committee asked Mrs. Jerath to discuss with Mr. Schmisek and meet with Mr. Johnson and Ms. Crystal to discuss what outstanding bond issues there are, how done and what information Mr. Erickson of Springsted would need and see if information can be put together and provided to committee members by Saturday's mail, and if that happens, then meet prior to council Monday night; that if informa-tion cannot be put together, hold until next regular meeting.

3. Matter of wide area network bid summary.
Roxanne Fiala, finance department, reported that she doesn't have summary available from the proposals from the wide area network, what proposing is that when bids came in vendors each approached wide area network so differently that at this point would like to hire a consultant that would help design the system and send out for proposals again, and are asking that they approve entering into contract with BTCI not to exceed 60 hours, which would be $8100, and funding out of MIS carryover. It was noted that when they did original request for proposals no one else came forward in that area, and this particular company has worked with First National and they are very pleased with them, can start now and be done in a couple weeks so still stay on same timeframe. Moved by Babinchak and Bakken to approve entering into contract with BTCI with price not to exceed $8,100.00. Motion carried.

4. Request from Fraternal Order of Police for donation of bikes
from bike pound.
Mrs. Jerath presented request for the City that rather than auctioning bikes is to donate bikes from the bike pound to the FOP to repair and give to needy children. Hamerlik presented several questions, that property being advertised for auction sale and impact on that, selling bikes to pick up some of the costs that City has either for facility or other things and is that budgeted, and if approved, should they all go or hold some back to help pick up those costs, auctioneer's bid. Council Member Sande checked and reported that the sale will be held May 16. There was some discussion re. use of place for impound lot (public works), hold
sales twice year so not as much property on hold.

Carpenter reported that if they approved this, it would have to go
MINUTES/FINANCE COMMITTEE
April 28, 1998 - Page 4

to council, and any details could be worked out before Monday night.

Moved by Bakken and Babinchak to refer to public safety committee for additional information with report back to finance department for consideration at their meeting prior to Monday's council meeting.

Moved by Hamerlik and Bakken to adjourn; meeting adjourned at 4:25 p.m.

Alice Fontaine
City Clerk

Dated: 4/28/98