Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, May 12, 1998 - 3:45 p.m.

Members present: Carpenter, Babinchak, Hamerlik.

1. Request from Grand Forks County Correctional Center to
increase rates for housing inmates.
Mr. Schmisek reported this matter is more informational and that City does appreciate notice prior to budget time so can get instituted into our budget process, and will be looking at that.

Moved by Hamerlik and seconded by Babinchak to approve for sub-mission into our budget process.

Gary Gardner, Adm., Grand Forks County Correctional Center, reported they are trying to keep up with costs, raised rates for Federal, State and out of state inmates and their rates increased to $55/day, and are asking for increase from City from $25.00 per inmate/per day to $30.00/per inmate/per day effective January 1, 1998, and with increase possibly to be for the next two years.

Upon call for the question the motion carried.

2. Applications for exemption of remodeling improvements to
property known as the South Forks Plaza.
Mel Carsen, city assessor, reported that the four applications involve four different parcels in the South Forks Shopping Center, that the Shopping Center has 11 parcels that are owned by the Herzog Group and one additional parcel owned by Heyman Corporation (Sears store), and that of the parcels owned by Herzog Group they have asked for exemption on four parcels (K-Mart Store and 3 lesser parcels); that the property would qualify for an exemption as requested, however, there is one basic question - that the guide-lines allow maximum exemption for a commercial property of $500,000, and asked whether this should be considered as one property or 11 properties. Policy was adopted November 6, 1995. He stated that he wasn't sure what thinking was on the $500,000 max. and is matter of interpretation; they also have option of not approving whether qualifies or not, is totally discretionary by the city council. It was noted that items included in the applications would have increased value directly (roof on K-Mart, etc. but probably not parking lot to any real value). He stated some of the work not done, roof done and heating systems in the parcels. Committee questioned whether Mr. Swanson had looked at this - definition of commercial property. Mr. Carsen stated he hadn't asked Mr. Swanson to look at, that he thought more of a policy decision than legal decision. It was noted that these properties are taxed as separate parcels, but committee felt not fair to have multiple legal descriptions to increase maximum value but also improved Mall; committee felt more comfortable if Mr. Swanson looked at this prior to making decision. It was noted that the previous owner when built additions onto Mall added another description, and built in 11 different pieces.

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May 12, 1998 - Page 2

The Committee held the matter for 2 weeks (with Attorney Doug Christensen to be notified).

3. Matter of change of Remarketing Agent for Health Care
Facilities Revenue Bonds (The United Hospital Obligated
Group), Series 1992B and Series 1996A.
Mr. Schmisek reported this is request from Altru Health System to change their remarketing agent; and are before committee because these are bond issues issued under the umbrella of the City and as required in those docu-ments for the City to pass a resolution allowing change.

Dwight Thompson, Chief Financial Officer, Altru, reported that they are changing from John Nuveen & Co. to Merrill Lynch & Co.; that Nuveen has gone through breakup in staff and don't know any person that they've worked with in the past and asked for a couple proposals and Merrill Lynch came up with com-petitive proposal, that they saved some money and will lock into five years. It was noted there would be no liability for the City.

Moved by Hamerlik and Babinchak to adopt resolution relating to Health Care Facilities Revenue Bonds (The United Hospital Obligated Group), Series 1992B, and Series 1996A, consenting to removal of remarketing agent and appointment. Motion carried.

4. Matter of upgrade of City's payroll program and request for funding.
Mr. Schmisek reported they received notice from New World Systems who furnishes the City's payroll program which they will be upgrading with several new enhancements that will eliminate the need for substantial customizing they've done for various entities; and that they will no longer provide support for Version 3.5 which is the one we are presently on past December of 1999; and in order to do this have to have additional training for the staff at New World headquarters, some on-site training, installation, technical migration support and testing of new release, and hope to go live on this system by September 30, 1998, if this is approved. He stated that unfortunately they have let us know without time to budget - migration support is about $10,500, data conversion about $6,000, payroll training for staff $3,500 and additional services of $5,000, for total cost of $25,000. He stated they are asking for permission to proceed and use the general General Fund cash carryover to cover these costs since payroll item and covers all departments, and if approved, would also have to approve budget amendment allowing expenditure of cash carryover.

It was noted that this is in addition to normal costs for software, etc. and committee asked if they had considered looking for dif-ferent system, that they didn't like what doing to City in middle of the year without advanced warning. Mr. Schmisek stated they would be doing that in total as they convert to the wide area net-
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work and move away from the AS400, but problem is whether we have enough time to do that and research, that last time they did that took 6 to 9 months to do research and another year of conversion time. Carpenter stated he could understand this if paying for switching from one vendor to another without conversion and migra-tion support, but not within same vendor. It was noted that pay-roll hasn't received notice of any maintenance costs, and last time received notice, finance negotiated them down; and this is first major upgrade in 6-7 years. Carpenter stated that because of cost difficult to switch systems in the future; and Mr. Schmisek stated they will be proposing a plan that will be somewhere 3 years out or more.

There was some discussion re. training costs and Mr. Schmisek stated he thought that might be high but wanted to make sure were covered, wouldn't spend if didn't have to. Mr. Schmisek also noted that there have been custom modifications to the software and have 6 or 7 different features to system as requested by the City. Carpenter stated to express committee's extreme displeasure.

Moved by Babinchak and Carpenter to approve request for upgrade of City's payroll program in the amount of $25,000 and to approve funding from general fund cash carryover. Motion carried.

Moved by Hamerlik and Babinchak to adjourn; meeting adjourned at 4:20 p.m.

Alice Fontaine
City Clerk

Dated: 5/13/98