Committee Minutes

MINUTES/FINANCE COMMITTEE
Tuesday, October 13, 1998 - 3:45 p.m.

Members present: Babinchak, Brooks, Carpenter, Hamerlik.

1. Matter of financing for 4000 Valley Square.
Mr. Schmisek reported this is an additional request for financing for equipment from 4000 Valley Square, that earlier this year we did a construction financing for them, done under MIDA bond laws of North Dakota, which does not place any liability on the City of Grand Forks. He stated that if they would desire to do this, would need to have committee recommend adoption of a resolu-tion relating to a project under the Municipal Industrial Develop-ment Act of 1955, calling a public hearing and giving preliminary approval; public hearing date would be set for November 16 at 7:30 p.m. at the council meeting. He stated the City has done these in the past for the Hospital, etc. and have resolution sent to us by Mr. Endorf of the Dorsey firm. He stated that we do not show that as any of our debt statements when Moody's looks at it.

Moved by Hamerlik and Carpenter to adopt the resolution relating to a project under the Municipal Industrial Development Act of 1955, giving preliminary approval and set public hearing for November 16, 1998. Motion carried.

2. Matter of lease for landscaping of property at 1514 Lewis
Blvd.
Travis Maruska, Urban Development, reported that they have been in contact with Tom Edwards, 1512 Lewis Blvd., regarding his request to maintain the property just north of his lot to a standard that enhances his neighborhood, and has volunteered to supply labor necessary (seeding, mowing, etc.) to keep the lot up until the newly proposed dike system is built. They asked that Mr. Edwards be allowed to rent the property at 1514 Lewis Blvd. through a standard lease drawn by the city attorney's office to allow Mr. Edwards to maintain the empty lot next door to him and to release the City from any liability. He stated that there wouldn't be cost for the property, perhaps $1.00.

Hamerlik asked if Mr. Edwards would be taking care of snow removal, etc.; and Mr. Maruska stated that the City would be responsible for that; however, Mr. Swanson stated that Mr. Edwards would be obligated for snow removal for term of the lease. (It would be explained to Mr. Edwards and if not in agreement he wouldn't sign the lease or could be brought back)

Moved by Carpenter and Brooks to authorize entering into a standard lease agreement with Tom Edwards for the property at 1514 Lewis Blvd. Motion carried.

3. Matter of City's future role on Internet.
Howard Swanson, city attorney, reported that the committee had asked him to review the matter regarding complaint by Mr. Waletzko
regarding the Internet domain name of "grandforks.com", that he
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interviewed about 16 people and what he found in the course of those interviews is a great deal of misunderstanding or confusion about the Website from day one; and reviewed his communication to the committee (attached). He also stated in answer to Mr. Waletzko's question that the City of Grand Forks would not be technically an owner of the site, but rather a licensee of the site subject to the terms and conditions of the agreement; and that any determination as to whether that was personal property or not is a factual determination that he cannot make (if made - by the mayor and/or council).

Mr. Swanson stated that our Code doesn't address the transfer of intangible non-personal property; that we're in an area dealing with computer issues that neither the State Code nor City Code contemplated. He stated he's not in a position to make factual determination as to whether it is or isn't personal property; that we had some form of right to use of it but by federal law the ownership is vested in National Science Foundation. He stated he wouldn't use the term ownership, there are interests involved in holding a license. He stated there are no black and white answers in the issue; if question is rhetorically should this have been handled in a different fashion, the clear answer is yes and would have advised differently from day one, in fact there was no author-ization even by the City to register under the name of city of Grand Forks and that should have been determined; the use of the site, etc. and even a question as to whether private entities can be using governmental site, there are a lot of things that this encompasses that weren't entirely properly handled from day one; mass confusion surrounding the issue and that's evident by the number of interviews that had to be conducted, but it comes down to it that if you conclude that the City by virtue of registration had rights to the license, how could the City or can the City dispose of it, only thing to look to is surplus property ordinance. He stated he would respond to questions anyone might have.

Mr. Swanson stated that the license was registered in the name of the City of Grand Forks and by virtue of that registration can only conclude that the City had that license. Babinchak stated that if deemed not to be personal property, something that's tangible, is the way that it was sold or disposed of improper. Mr. Swanson stated that if the transfer of a license to the Herald was sup-ported by fact or by law, it would potentially fall into the category of avoid conveyance in which we could recover that asset. The Herald if acted in good faith of the representations of either the City or of Economic Development Foundation has opportunity then to recover their costs or losses while they had the asset against whoever presented the information that they relied upon. If the City moved forward and tried to take action to recover that license, thinks you could.

Jerry Waletzko, 4806 6th Avenue North, asked whether City wants to
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support this Website or not, and there are other sites available, and he is asking for recommendation from this committee to go to council saying they want to have a site for the community, and if didn't want to have site for the community, then moot to take the Herald to task. He stated that if there was a way for City to say to small business people to generate growth that they would provide a spot for everybody, ie., chat pages, issues, coffee plate for people to meet on the Internet, and listing of businesses with no specialized advertising at cost. He distributed copies of informa-tion of cities that do provide service. He stated that by turning this over to the Herald choosing to help one business grow and expand into an area of enterprise and make money off the small business people when could be saying to the small businesses, to save them some money and offer place of our own community's web-site, and would be small man's version of a growth fund and no favoritism on this or no advertising that be allowed. He stated that if anyone were to make a motion to bring this to the city council, he would appreciate it, and if choose not to, you are saying it's okay not to be involved in this.

Mr. Schmisek asked that Roxanne Fiala speak on this because there are reasons that we decided not to be the site, and have found that it's not the norm for a city to be it but cable tv or local news-paper who does these (looked at sheet from Las Vegas and it's brought to you by the Las Vegas Review Journal).

Roxanne Fiala, IS manager, reported that the site is still being maintained by the public information center, and IS department is planning to take more of an active role, probably starting in November, and their intent at that point is to assist in the design and assist in the department's getting on-line. That they are planning to do is to have Website be delivery of city information which could include the wards, recycling schedule, bus routes, license requirements, abbreviated CAFR, annual budgets, agendas and minutes, and weekly updates for what's happening in the city. She stated that currently the public information center is spending about 5 hours a week and they do not have City staff on an on-going basis to maintain a dynamic web page, and it was not their intent as the City to take on being the place where if anybody wants to come and find out information on the city that they would take the hit on Grand Forks and get the flash to draw them to that and keep it dynamic for people to come back. She stated they were more of the intent of going forward and saying this is what the city government structure itself has to offer and what we have with the links to other sites in the community. She stated they don't have budgeted and didn't feel in a position to maintain that view for the whole community (but find under a search). She stated she attended Governor's Leadership Seminar and went to workshop on websites and a company that's doing a lot of the websites for the State, that they are not aware that city governments are taking on
main listing for the communities. She stated that when she
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attended a seminar in San Francisco she found that out there also and when she has been trying to search to find out if the cities are the ones maintaining, hasn't found that out. She stated that now you can go to grandforks.com and link back to the city or go to city and link to First Realty site on either options right now. She stated that the other entity, TeleVillage was involved and now Smart City is what it's called, spearheaded by the Chamber and is committee composed of UND, banking finance, public schools, service agencies and they are addressing the issues of creating a community for information that includes the city schools, museums, medical information, and the need to educate the community. She stated it was discussed at their last meeting that they wanted a place where could have a public chat room and felt best place probably to do that would be the library and would have the least political agenda of anybody out there, but those issues are being looked at with all of those members and combinations at Smart City. She stated that's an open committee that anyone could come to.

Mr. Waletzko stated one of his concerns is cost to the individual small business person. Ms. Fiala stated that with advertising when you pull it up and see flashing of the advertising, that's paid advertising, and she's assuming that they will have, but as far as getting to a link of getting your business on there, can do that. She stated you won't get the flash on the first page without paying for it, and wouldn't have had that on the City's either; that's dynamic advertisement - but would have the link when hit on real estate and want that to come up, they can go to real estate and that would still be there at no charge. Mr. Waletzko stated he's taking issue with is the ever escalating marketing thing, which gets to be expensive. Ms. Fiala stated it would be expensive for the City also.

Babinchak asked if there were a problem with a government entity to allow them to do what he wants in advertising, and if there is a problem for us to give to them. Mr. Swanson stated that the law hasn't kept up with computer age, and falls within that. He stated that the closest analogy that we have in the city government are as signs on sides of buses and reviewed that the council authorized advertising to occur on signs on buses, City took proposal to vendors and accepted proposals and made decisions on which vendor would be allowed to go out and solicit individual advertising; and is same process Airport has used at the terminal. He stated conceptually that if we had a webpage and were seeking to do that could determine that we will or wont' allow advertising, and if do question whether City going to support that or take requests for proposals from vendors to support that service who would go out and solicit, and is a legislative function of the council, nothing in our Code to address that.

Babinchak stated there would still have to be some cost to the City to provide this also, would still have to recover our costs for
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manpower to provide and would need to know what those costs are before determining whether wanting to do it. Mr. Swanson stated he didn't find a legal prohibition for City to do it and no obligation for the City to do that.

Carpenter asked if City were to do that would they have to accept anybody who wants to have a link or whether city could restrict. Mr. Swanson stated that interesting issue which is not fully defined by law, there is a growing body of law dealing with cable tv, wireless or open video communication, that indicates that if you are soliciting advertising or if allow open access, you don't have the ability to determine one over another except if use law re. pornography; the issue has been addressed both by University and in Fargo with re. education channels, people wanting to show their own videos, that he hasn't done any research to see if that's transferred over into websites, but theoretically the same types of first amendment law would apparently apply from what's occurred in the format of cable tv, broadcast requirements into the internet. He stated that there's fairly recent decision involving print advertising in bus stops where exclude tobacco, and/or tobacco billboards, and there is split in federal circuits as to whether the community can do that, also case law re. ads of a sexual nature that don't rise to the definition of pornography but were within an area community felt was outside of good taste and not allow, and again some splits in authority, and it appears that the greater trend is to limit what ability you have to make decisions re. who and what can be advertised. It was noted that the City would have less discretion than private company would in maintaining the sites if not dependent upon a governmental conduit.

Ms. Fiala stated that if looking at webmaster should be paying at least $40,000/year and now don't have the time within our own staff to be doing that and if have to bring on someone to make self suf-ficient City would end up charging for ads if find out can do that; that now it's being done by the public information center and are taking on in our staff now and will be going out to the depart-ments and hopefully not a lot of maintenance on it.

After further discussion it was moved by Brooks to receive and file the report.

Mr. Schmisek apologized for any of the consternation this caused the committee or council and Mr. Waletzko, because he believed that what they were doing was serving as a conduit between the Develop-ment Foundation and over to the Herald, and reinforces in his mind should really be checking everything with Mr. Swanson.

Carpenter stated as far as the matter of "grandforks.com" he feels that whether done right or wrong or whatever the value is, should
put to bed, and would support receiving and filing and ending that. He stated that the idea of a discussion of whether we should have

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"grandforksgov" or "grandforksnet" should have more discussion and not ready to make recommendation to the council whether to do or not. He stated he would like to get some feedback from the Tele-Village Committee and maybe have them give us some of their thoughts and maybe not just the city of Grand Forks, but maybe City, School District, Public Library, Chamber, and multiple sponsors that end of up doing it; and does have restrictions can put into it and always weighted us in cable tv and is undecided as to what he would like t see the City do and would like more dis-cussion from the community - whether TeleVillage or hear from other governmental entities or outreach entities like Chamber, Economic Development Corporation think about doing it.

Carpenter seconded motion to receive and file the report on that issue. Motion carried.

Hamerlik stated that they have all these entities and that someone has to show the leadership to at least start talking so they get something going, that City shouldn't be the leader, but have to get them to pull together if even discuss another step. Ms. Fiala stated that's what Smart City is working on and doing, and they are trying to get everybody on their agenda was for the City to get connected and wide area network, so City and School were doing their parts, and all start linking off of each other; and that she is a rep. to the Smart City Committee and will go back to them. She also noted that the School has their own separate domain, as does the Library; that Chamber will have one on 1-1. Committee asked that she express to them interest the finance committee sees in wanting to move forward on this, who should be the sponsor. Ms. Fiala stated they meet this coming Thursday morning at the Chamber of Commerce, and will bring it up then; and will report back to the finance committee.

4. Matter of city income to replace some property tax and/or
sales tax.
Hamerlik stated that since they are holding open forums for the expressed intent of finding out what people think, it's premature for us to discuss this, we may not even want to have this studied; it was referred here and shouldn't before Tuesday and Thursday nights be suggesting anything, even a discussion.

Mr. Swanson stated that presently the City of Grand Forks could not implement an income tax without an amendment to the Home Rule Charter, not unlike an additional sales tax, if that were a direction that the council were inclined to go, it would take a vote of the public to amend the Home Rule Charter and subsequent adoption of ordinances implementing that.

Carpenter stated that Mr. Glassheim gave him some information and
that he's asking this not with any connection to the flood protec-tion plan and paying for it but broader issue should we have a

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different additional leg under which local taxation is based on so not specifically related to flood protection plan. Hamerlik stated they are discussing indebtedness of the citizenry and from that standpoint, whether it's Aurora or dike or replacement.

Carpenter stated what Mr. Glassheim is asking the committee to do is to ask staff to check with the State Tax Department as to 1) can we do it, 2) how would it be done, 3) what would be the cost of doing it, 4) what percentage of State tax would be needed to re-place sales tax, or what kind of revenue would it raise for each percent, 5) problem areas - dealing with if work here but live outside the confines of the city limits of Grand Forks; and would be looking at information gathering. He stated he wouldn't have a problem with waiting two weeks or until after forums are over but at that stage is going to want to gather this information. Hamerlik stated that as long as seeking information and ask staff to present information, no problem with starting at any time. Mr. Schmisek asked if it was for replacement of sales tax or also property tax; and is assuming they would look at both. Hamerlik asked whether it would be proper to ask proper City officials to start developing pros and cons and details for an income tax and report to committee at a later date, and to get started at their convenience before the forums, and made a motion. There was no second, and the direction for staff was to include Mr. Glassheim's questions in report. Information.

5. Hamerlik asked committee if they were interested in reviewing the part-time temporary employees and ordinance, those people hired temporarily; that people can be put on but have to be reviewed after a year, and asking what doing with those employees - that his concern is that they've had a freeze on hiring for some time, but if same persons are being rehired, defying the ordinance if go year to year, etc. He asked why have freeze on hiring if can hire on temporary basis for several years, and that's reason asking question. He stated Human Resources is probably where to look at that and if rest of committee not interested, he would yield, but this has concerned him for some time. Brooks stated he would be interested from a budget standpoint, as salaries and personnel large part of the budget to have that information.

Hamerlik stated that if the work has to be done, and is needed, then get them on the budget or say no; rather have them working as an employee rather than as a temporary and circumventing the system. Carpenter stated they can look at it, but when the Mayor went through the process of putting together the budget, she made a very conscious decision not to do that to maintain flexibility in the next year or two that goes on and council did ratify that through the budget process and did not make those permanent positions, where there were requests by departments to do.

Hamerlik stated that prior to the flood, they had some employees
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who were temporary and each year added on, etc. and after the first year either gone or hired and go through the regular system; that council says not adding anyone and temporary employees consistently on the payroll. Mr. Schmisek reported that the Mayor asked H.R. to visit with every department and rejustify every part-time person before she approved in the budget, and some were dropped from the requests that were made. He stated that H.R. would come and review with the committee. Brooks stated that if employees added year after year as temporary, City perhaps taking advantage of those employees and probably not getting the fringe benefits that full-time permanent would; and it was noted that they may dependent upon hours. Hamerlik asked to bring this forward in committee.

Moved by Hamerlik and Brooks to adjourn; meeting adjourned at 4:55 p.m.

Alice Fontaine
City Clerk

Dated: 10/14/98