Council Minutes

COMMITTEE OF THE WHOLE
Monday, March 11, 2002 - 7:00 p.m.

The city council met as the Committee of the Whole on Monday, March 11, 2002 at 7:00 p.m. in the council chambers in City Hall with Vice President Martinson presiding. He announced that when addressing the committee to please come forward to use the microphone for the record, and advised that the meeting is being televised live and taped for later broadcast. Present at roll call were Council Members Brooks, Bjerke, Hamerlik, Glassheim, Lunak, Christensen, Klave, Kerian (teleconference), Kreun, Martinson - 10; absent: Council Members Stevens, Burke, Gershman, Bakken - 4.

Vice President Martinson stated today marks the six month anniversary of the terrorist attacks on our nation - the Twin Towers, the Pentagon and a rural setting in Pennsylvania that took the lives of thousands of our people, and in respect to those brothers and sisters that have passed on and to their families that grieve and we grieve with them as an American people and as a free world, and requested that we bow our heads in a moment of silence.

Vice President Martinson announced that there will be no Capital Improvement meeting this week, and has been rescheduled for March 20 at 4:00 p.m. in City Hall.

DISCUSSION ITEMS

2.1 Request from Tim Crary on behalf of Crary Development, Inc. for approval of an ordinance to annex Lots 1 - 16, Block 1, Lots 1 - 10 and Lots 18 - 24, Block 2, Belmont Estates First Addn. to the city of Grand Forks, ND. (located in the 5600 block of Belmont Road. ___
Council Member Glassheim asked for an explanation of these items (also 2.2 and 2.3) Dennis Potter, city planner, stated that Crary Development owns 80 acres of land on the east side of Belmont Road, south of the drainage ditch to 62nd Avenue South, they have a plat and a PUD before the Planning Commission, the PUD will cover the entire 80 acres, the plat will cover the first part and the annexation will annex about 90% of the first subdivision of this total 80 acres. Council Member Glassheim asked if there were any flood problems with the property; Mr. Potter stated the land is inside the dike - that the property fronts on Belmont and goes to the east and will butt up against the dike as it flows north/south in that area.

2.2 Request from CPS, Ltd. on behalf of Crary Development, Inc. for preliminary approval of the plat of Belmont Estates First Addn. to the city of Grand Forks, ND (located in the 5600 block
of Belmont Road. ________________________________________________________________
There were no comments.

2.3 Request from CPS, Ltd. on behalf of Crary Development, Inc. for preliminary approval of an ordinance amending the zoning map to exclude from A-2 (Agricultural Reserve) Dist. and to include within the Belmont Estates (PUD) Planned Unit Development, Concept Development Plan (located in the 5600 block of Belmont Road). _____________________________________
Mr. Potter stated this would include a small area of B-3 zoning for commercial use.

2.4 (First reading) Request from Terry Hanson on behalf of Grand Forks Homes for preliminary approval of an ordinance to amend the zoning map to exclude from the North Congressional PUD (Planned Unit Development), Concept Dev. Plan and to include within the North Con- gressional PUD (Planned Unit Development), Concept Resubdiv. with all substantive changes lying within Lots 1 through 14, Block 6, Grand Forks, ND (located 1001-1098 Selkirk Circle)__________________________________________________________________________
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Council Member Bjerke asked for an explanation of what is the Eastern Dakota Housing Alliance, and when it gets to the point of building houses, if there is going to be any city-involve-ment in the project. Terry Hanson, Urban Development, stated that is a community housing development organization formed by the consolidation of 3 or 4 affordable housing providers in the eastern North Dakota region; that previously the city council authorized that $300,000 of HOME Funds be redirected back to the State of North Dakota and the State is reallocating those funds to the Eastern Dakota Housing Alliance; City rezoning land but not involved as City. He stated that the area to the south of Selkirk Circle is developed, that everything south of 10th Avenue North is all single-family residences.

Council Member Christensen asked when Grand Forks Homes sells this land, sales price. Mr. Hanson stated there are established prices on the lots that Grand Forks Homes has set but the sales price for this property has not been finally negotiated yet; that the purchase is for each individual lot but going to try to sell a number of lots at one time. Council Member Christensen asked what the outstanding obligation of Grand Forks Homes, Inc. as it pertains to the underlying indebtedness to the City. Mr. Hanson stated that the debt that Grand Forks Homes presently owes against any property, but no lien against the property, is an arrangement with Fannie Mae; the Grand Forks Housing Authority is a co-signer with Grand Forks Homes. It was noted that obligation due in December 1, 2002 - $2 million. Grand Forks Homes source of funds for the repayment of the $2 million is the property in Congressional.

2.5 Application for a Class 3 (Off and/or On-Sale Beer and Wine) license at 1149 36th Avenue
South by FND, Inc. dba Parrot's Cay Tavern, 1149 36th Avenue South._________________
Mr. Swanson stated the current owner has the same class of license as being requested; that this is not a transfer - that under our Code where there are available licenses that can be issued without a transfer we will do that - the transfer fee in this case would have been in excess of $12,000, whereas while available licenses it is handled as a straight out issuance. (Issuance fee of $3,300, annual fee of $1,100, and application fee of $250 and subject to approval of city attorney, and appropriate departments).

2.6 2002 Storefront Rehabilitation Program.
Council Member Glassheim asked how they arrive at describing an area as "blighted", if there is criteria. Mr. Hanson stated there was a survey taken of the area that is currently given that designation and based on the evidence of the photographs that were taken and review of the structures at time of designation over a certain percentage of the area was in a deteriorated condition and as a result of that they designated it an area of slum and blighted area - that area encompasses an area that begins on 8th Avenue South, west to 15th Street, north to one block north of Gateway Drive and east to the river - that is our current area. Council Member Glassheim asked if they were going to make a determination that there are significant slum and blight problems there - Mr. Hanson stated that the criteria for establishing an area of slum and blighted is locally generated criteria and would have to take a survey of the area going south on Washington and determine what percentage of the buildings in that area, or west on Gateway Drive, and determine if the percentage of buildings in the area would qualify the area as slum and blighted. He stated they would be amending the current area of designation - the other way to do it would be to go property by property and if they received an application to determine if that is in a blighted condition - if do that, the building would have to be hazard or be considered a spot blighted area. He stated they will amend our existing plan, which includes photographs of all properties, and bring that back for designation. Mr. Glassheim stated he was concerned about the effectiveness of the program, if do 7-10 or 11 storefronts if that will make any impact at all unless we are
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committing for future years. Mr. Hanson stated he didn't believe the city council would have to make any future commitments, that the dollars committed to this year's program if approved by council, doesn't mean they will put the $73,000 in unobligated funds into it, but what the council should be doing is looking at S. Washington and Gateway Drive and determining if they want to initiate a long-term program of having funds available and on an annual basis, they would continue to bring back an application for CDBG funds for allocation to these areas, as it was done in the downtown area for 15 years. Mr. Glassheim asked if they expand the area, if the downtown properties will also be able to apply or be creating new areas, which will have a specific application for their area only. Mr. Hanson stated they will be creating areas but the areas that go from Washington east on Gateway Drive and from Gateway Drive south to 8th Avenue South on Washington are already in the designated area. He stated what he would recommend the council to do is to designate areas within those corridors where want to direct their funds or resources to on an annual basis or to open it up to the entire area and just approve those they feel have the most impact on those two corridors. It was noted that the proposed designated area does include a block on each side and can extend it north beyond Gateway Drive.

Council Member Glassheim stated he was more interested in putting these funds in housing program, and asked how would $70,000 be used in a housing program if that were an alternative for the use of this money. Mr. Hanson stated they could add these funds to the existing housing programs which include a down-payment of closing costs assistance which are up to $5,000 per family, average closer to $3,500, and would give you 14-15 additional families; could use funds for renovation of existing homes, the program that was previously passed by the council on recently acquired homes, have a rehab program, and also an additional down-payment or acquisition program where they provide up to $10,000 in addition to the down-payment closing costs for the purchase of first time home buyers.

Vice President Martinson stated as a council person he would like to make a short comment - the current verbiage "slum and blighted area" speaks very poorly of a neighborhood that has an enormous amount of homes, families, and concerned that it will impact property values when this comes out and thinks need to change that verbiage because it does not speak well, understands there are some federal regs, but if there is a different language. Mr. Hanson stated that the criteria is established by the local city, but designation of slum and blighted area is a federal terminology for the area - that the three national objectives of CDBG funds are: for the benefit of low and moderate income families; for the elimination and/or prevention of slum and blighted areas, or urgent need - and have to have the area designated slum and blighted - and doesn't believe that is in much conversation when they talk about these areas as far as property values. Vice President Martinson stated he thought it was an injustice to homeowners.

There was some discussion relating to the cash match, which is 2 for 1, and also the in-kind matches which are encouraged.

There was further discussion as to whether the program has been approved, and it was noted that the council had discussed three options for the usage of these funds, that two of the programs were already in place and would only have to reallocate dollars; that they decided that the storefront program was the one they were going to pursue and asked staff to bring the proposal to council for consideration but didn't allocate dollars, and if approve the proposal, then allocate dollars.

Council Member Glassheim questioned why you have a public hearing on something you have already approved. Mr. Hanson stated that last week they could not approve it because they have to
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establish this program by amending their annual action plan which requires a 30-day public comment period, and at the close of the 30-day public comment period they have a public hearing and then the city council will vote on the plan (concept approved). He stated that for staff to move forward and hold the 30-day public comment period, they wanted the direction of the council that they were in favor or direction they were going.

Council Member Christensen stated that the federal law says the prevention of blight so don't have to talk about slum or blight - just to prevent a future blighted area; that before they brought this program forward he spoke with Mr. Kreun and asked if this would affect his housing projects, and was told it wouldn't affect his housing project or what he is trying to bring forward and thought there was money available for the housing project that the council will get in the next 2 to 4 weeks, and more than enough to go around - and either this year or next year we will have about $4.5 or $5 million in CDBG money coming back to the City and could begin using that for reallocation in these types of areas and spread that throughout the city.

Mr. Hanson asked the council to consider their proposal, and to give some thoughts to: 1) do you want the maximum to be $10,000 or more or less; 2) do you want a two for one match or more or less; 3) do you want it to be a grant, a deferred loan or an interest bearing loan or not; 4) whether a committee member or someone the council would be interested in sitting on the committee to review the applications prior to them coming back to city council for final approval; 5) the designation of any additional area to the slum and blighted area doesn't have to go where directing it, can take it down as far south as 24th Avenue South, or taking it west as far as 42nd Street, could take it farther north so council would have some input on how far they want to go.

2.7 Resolution establishing terms and directing issuance of $1,835,570 definitive improvement
warrants, Series 2002-A (Dike Improvements) on the fund of the Flood District No. 14 and providing for and appropriating special assessments for the support and maintenance of said fund.___________________________________________________________________________
Council Member Kerian stated that the staff report says CWSRF loan repayment will be accomplished via special assessments, and if that is in the current flood assessment. The city auditor stated that is correct.

2.8 Resolution authorizing the issuance of Sewer Reserve Revenue Bonds, Series 2002-C to finance the undertaking of an expansion and improvement of the municipal sewerage utility._________
Council Member Bjerke asked if this is part of the wastewater treatment plant and if they are still at $34.5 million on this project; Mr. Feland stated about $34.1. Mr. Bjerke asked when plant to be opened; Mr. Feland stated they will start putting water into the reactor tanks in April-May and looking at startup around July or August.

Council Member Christensen asked if this was the State loan and borrowing money to pay for what we have already built; Mr. Feland stated this is the SRF loan. Mr. Christensen stated the staff report mentions a pilot study for the ultimate goal of co-compost sludge and asked if doing another study or if we have a study. Mr. Feland stated that is part of the SRF loan, original one for $550,000 was for pilot composting study which Mr. West presented a week ago. Mr. Christensen stated in reading some minutes back in December when Mr. Walker was explaining the next step, which is the compost plan and Mr. Grasser told us that we were going to have more information on that to make a decision and a committee was appointed of 3 council members - that we're borrowing money to pay for what we already have. Mr. Feland stated that $34.1 million is to finish

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the wastewater treatment plant as they know it today - that should be finished with landscaping this summer.

2.9 Resolution establishing terms and directing issuance of $3,094,077 definitive improvement
warrants, Series 2002-B (Dike Improvements) on the fund of the Flood District No. 14 and
providing for and appropriating special assessments for the support and maintenance of said
fund.___________________________________________________________________________
There were no comments. The deputy city auditor reported that this is the same project as the agenda item #2.7, water reclamation facility, the project is done in two phases and the loan application was made for two phases separately and it is SRF loan, at 3% interest rate.

2.10 Applications for abatement for 1999 and 2000 taxes by Chris Ortega on 512 4th Avenue
South (rear 60 ft. of Lot 11, Block 14, Traill's Addition.____________________________
There were no comments.

2.11 Change Order #2 for City Project No. 5172, Greenway Cleanup Phase 1, removal of pavement on the west side of the flood protection project near the Koinonia site, along Hughes Ct. and along Belmont Ct. as well as removal of the bridge in the Koinonia site.____________________
Council Member Lunak questioned why they did not bid this out rather than a change order. Melanie Parvey-Biby stated they had a current contract with Gowan Construction, and found an area they wanted to do removal of before they let the bid for the next part of the project and didn't bid because small enough project that it was easier to add it to the current contract than to bid it out and have more favorable prices this way. Mark Walker, asst. city engineer, stated that quite often with construction projects they issue change orders to existing contracts, more expedient process to get a contractor underway to do the work - that in this particular case they had very favorable prices from the contractor and did not presume that they could get more favorable contracts by bidding it and to expedite the project and to eliminate the cost of advertising and putting together a separate project for this small project, they elected to change order the work onto an existing contract, and that this is something that is done quite frequently. It was also noted that contractors have a set-up charge when bringing large equipment in and when attach a small project to a larger one the costs are absorbed in the set-up charges.

Council Member Hamerlik asked if a contract change order can take place if the completion date has passed (10/01/01) and extending it 242 days to 06/01/02), and how far back can it be. Mr. Swanson stated they can, and that it is a question of reasonableness and question of whether or not there's a material change in the underlying contract.

Council Member Lunak stated the reason he questioned this process is because there's over 59% increase in change orders and talking $57,000 on a $98,000 project, and if going to do business that way, we basically don't have a bid process and if get our bid processing done right, doesn't think we would have these change orders. Mr. Walker stated that this is work that they were going to do and add this in a future bid package, that we are adding extra work that we would have paid for anyway. He stated that when looking at issuing a change order they look at the work that they are going to ask the contractor to do and compare that to his original bid prices, and in this case the cost of doing the work they are asking is very similar to the original bid price, if substantially more they would not have supported the change order and went to bidding the project.

Council Member Lunak stated he doesn't make up the rules, but makes sure we go by the rules, and thinks there are better ways to do things.
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2.12 Landfill woody debris grinding bid.
There were no comments.

2.13 Plans and specifications for City Project No. 5328, District No. 584, Linden Court paving from
10th Avenue to 15th Avenue South.__________________________________________________
Cindy Voigt, asst. city engineer, stated that the recommended council action for this
item should also include approval of the revised engineer's report dated 3/06/02, which reflects the reduction of overhead from the last council meeting.

2.14 Consideration of bids for construction of City Project No. 5291, 2002 ADA Curb Ramps.
There were no comments.

2.15 Consideration of bids for construction of City Project No. 5289, 2002 Concrete Street Repairs.
There were no comments.

2.16 Consideration of bids for construction of City Project No. 5288, 2002 Sidewalk Repairs.
There were no comments.

2.17 Mayor committee appointments to: Planning and Zoning Commission and Downtown
Design Review Board._______________________________________________________
Council Member Bjerke stated he will be voting no on the members to the Downtown Design Review Board, first have planning rules, then building code rules and now tell people with their own private property that the government is going to tell them what their building could look like.

Council Member Christensen stated since they passed the downtown design ordinance, has this committee ever met to review any plans; Mr. Potter stated they have and would send e-mail re. number of meetings. Mr. Christensen asked if they could apply these ordinances against existing signs, if there were a sign they didn't want downtown, could they apply these ordinances or not; Mr. Swanson stated that as he recalls the ordinance it only applies to either new construction or remodeling, and would not apply to any existing sign; and for existing buildings does require some type modification. Mr. Christensen stated he will call Mr. Swanson.

2.18 Fire Department FEMA Fire Grant application request.
Council Member Brooks stated he likes to see grants, that there's a match from cash carryover but questioned "maintaining" and asked if there was a commitment upfront in this grant or committing future funds. Fire Chief O'Neill stated that they placed $8100 as a project annual on-going cost and that was a "guestimate", and what they are challenging the fire department with is by hiring young firefighters that are in very good shape and because they have to keep them in shape, asking the City to help them through the budget financially - will do some physical testing, medical exams but there will be some on-going costs, exams in the future, replacing equipment.

MAYOR AND COUNCIL COMMENTS

1) Council Member Glassheim stated he read in the newspaper about the study of the dial-a-ride and asked who initiated that - City staff, MPO staff, council people or MPO. Council Member Christensen stated that he attended that meeting and it appears it was initiated by MPO staff but not sure that it wasn't initiated at the request of the East Grand Forks contingent, and that when reading the minutes of the MPO the comments made by the persons on the committee appear that they were concerned about the on-going costs of dial-a-ride. He stated that the original
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recommendation of the staff was to form a committee of couple city council persons, one from EGF and couple participants and that he suggested that we didn't want to do anything to make users of these facilities feel that the use of the facility was going to be threatened again because we just went through that - and they chose to have an in-house staff study without any committee or council participation, just prepare a report and submit it - after that incumbent upon both bodies to act - report may be done in June or July.

2) Council Member Hamerlik stated he was disappointed with this, that he served on the MPO and on the public transportation committee - seems like they start on this a year or two late, one of the first things they were talking about when discussing prices was the cost of dial-a-ride. He stated he would like for the next committee of the whole meeting to hear a report re. Human Resources and Urban Development staff as to where they are and what procedure is.

3) Council Member Bjerke commented on item 6.3 tax status on State-owned properties - RTC building and EERC, and what he reads there are a lot of politics involved in this issue - and if that's the way its going to turn out he would be more than happy to go to whatever state entity to have them look into this also and hopes to get a clear and accurate decision based on facts and logic and not based on politics. He stated the letter he read from the Legislative Council that he received from Mr. Glassheim and what is being said on the other side, sees real discrepancy - one group trying to say they are not and that it seems to him that they should be taxable and that the State needs to get involved if they have to. He stated he would ask Mr. Dean from Public Info. Office to get some information - a complete list of all the tenants of the Rural Technology Center, how long they have been there because its an incubator, and would like a copy of this information given to the mayor and council members and to the media. The reason he wants to know how long they've been there is because it is supposed to be an incubator, and why he wants to find out who is in that building is that they have a lot of talk about economic development and take tax payers money to the amount of $1.2 million per year to do that, hear talk about rebuilding downtown, how taxes are not a burden to the citizens of this city and how quality of life is so important, that some of the people who say that on a regular basis then go put their office in a building where they don't pay property taxes and not pay a dike special assessment. He stated that as far as the EERC it is stated there is no state money involved in there and asked Mr. Dean to get an organizational chart from the University of North Dakota that shows where the EERC is and if all the EERC employees State employees, UND employees and wants a clear answer to this issue, has gone on for too long. He stated he would like Mr. Swanson to look at the Legislative Council letter from Mr. Glassheim, esp. last paragraph in reference to the Starlites and the rental of the civic auditorium and would like his opinion on that in reference to property taxes. Vice President Martinson stated that Mr. Dean and Mr. Swanson will follow up on his requests.

4) Council Member Brooks stated that last week he had asked for a budget amendment re. savings from downsizing the council and owe it to the constituents to show that in the form of a budget amendment. This will probably go on the agenda for the next committee of the whole.

5) Council Member Brooks complimented the East Grand Forks city council on their balanced budget.

6) Council Member Brooks stated re. the dial-a-ride, was concerned when he saw that study being done, that we discussed the bus and our disabled community comes up here and fights to keep that transportation system and now starting to look at that; that some of the comments that concerned you were not made by MPO staff, they were made by the head of our transportation; that doing a
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study is fine and can improve things but is concerned that we need to protect that system for our disabled community.

7) Mr. Swanson stated that next Tuesday, March 19, they have a mediation session scheduled on an acquisition property, that may be a day that some council members may be involved in planning meetings, and if there is someone who is not involved in meetings that would be willing to par-ticipate in an acquisition mediation, he would appreciate it if they would contact him, not sure re. length of meeting, are scheduled to start about 9:00 or 9:30 that morning.

8) Mr. Swanson stated he has not been involved in any review of the RTC or EERC. Council Member Bjerke stated that the staff report stated that Mr. Carsen would be contacting him to discuss the matter. Mr. Swanson stated he has not rendered any opinion, and stated he wanted Mr. Bjerke to think about his comment - that going to ask a State agency to rule whether or not a State lease is subject to property tax at the local level, his experience is that when you ask somebody to rule against themselves, that oftentimes they don't do that very quickly, so - make sure we have a specific fact situation that we think is egregious enough to raise the issue very clearly and the one they had talked about a few weeks ago was the special assessment, and is clearly one to move forward with. He stated the questions on real estate tax which is entirely different from special assessments, need to have a very definitive set of facts to move forward to push an issue - the other comment he would make is that although he has reviewed, doesn't have a copy of the Legislative Council's letter, and stated that the Legislative Council has no authority to issue a public opinion that is binding upon anyone; the Legislative Council is merely an advisory group to the North Dakota Legislature, their opinions are not subject to weight before either a court or the Attorney General's Office - in fact historically there has been a great deal of tension between the Attorney General's Office and the Legislative Council, he doesn't think he can point out any deficiencies in the opinion that was provided by Legislative Council, it may not reflect exactly what the Attorney General's Office might issue. Council Member Bjerke stated he wanted to make sure they get to the bottom of the issue, whoever he has to call or ask, and wants a true definitive answer. Mr. Swanson stated he wasn't sure he would get a definitive answer, this is not a black and white question. He stated if he can get a copy of the Legislative Council's opinion, he will provide his opinion with respect to that and any advise that Mr. Carsen needs,, that they met briefly this morning about it and he has not reviewed any lease agreements and not aware of what arrangements might exist on paper, and in order to be taxable you have to have a term of years and that's a question of law as to what is a term of years as far as a lease arrangement. Council Member Bjerke stated if they are legally doing everything, that's good, but wants to make sure the citizens of Grand Forks know what's going on and know that some people talk one way and maybe act another and important for them to know that also. Mr. Swanson stated the only reason he raised the issue he wasn't exactly certain what the intent was, and doesn't think his office has had any opportunity to render any opinions on the taxability - that issues with regard to the Ralph Engelstad Arena were actually made by this council, not by the city attorney's office. Council Member Bjerke stated he knew that the council can abate taxes and that's what he much prefers - a vote by the elected officials to abate taxes, not in an ambiguous decision that they can't get a black and white answer to, and if want to give people tax abatements, then sit up here and give it to them. Council Member Hamerlik stated they maybe should be putting some of these items under discussion items rather than informational items.

9) Council Member Lunak stated he had a complaint - he had received a call from an individual who had discussion/argument with another person, and was told if you don't like it, call Lunak, and that he called - that we can be more people friendly and user friendly, and that goes for all of us.
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10) Council Member Klave questioned date for CIP - date is March 20, 4:00 p.m.

11) Council Member Kerian commended Terry Hanson and staff for their prompt response re, the program description.

12) Vice President Martinson thanked everyone for their attendance and courtesy.

ADJOURN

It was moved by Council Member Brooks and seconded by Council Member Lunak that we adjourn. Carried 10 votes affirmative.


INFORMATIONAL ITEMS

6.1 2001 Consolidated Annual Performance Evaluation Report (CAPER).
6.2 Affordable In-Fill Housing Development request for proposals.
6.3 Tax status of two State-owned properties, Center for Innovation and EERC.


Respectfully submitted,


Saroj Jerath, Deputy City Auditor