Committee Minutes

MINUTES-FINANCE DEVELOPMENT STANDBY COMMITTEE
Tuesday, October 1, 2002 – 7:30 a.m.


Members present: Christensen, chair; Glassheim, Hamerlik

Others attending: Hal Gershman, Charlie Bunce, Rick Duquette, Al Grasser, John Schmisek, Terry Hanson, Keith Lund, John Snustad, Jim Melland, Karl Bollingberg, Dennis Reisnour, Duaine Espegard.

Discussion of Urban Development Director/JDA:

Chairman Christensen stated that this meeting is the beginning of discussion amongst the current leadership of the City to explore the economic development process as known. Mr. Christensen said we are in the business of reviewing our economic development organization and how it is delivered. He said that we are beginning the process of exploring everything, as far as how we deliver services and what it costs us to deliver the services, and try to set standards to measure whether or not our delivery of services is effective and will continue to be effective. He said this is not to address the personalities that are currently serving in the executive positions in the economic development office. This meeting is to discuss what has been spent on economic development and what we have available to fund economic deals and how we can best utilize these resources.

Mr. Christensen said we have some issues as to whether the economic development function of this community should be tied with our Urban Development Office and there are issues of exploring the hiring of the Housing Authority Director. He said when this position is hired; there will be a shift in the Urban Development Office. Charlie Bunce said he has a draft copy of the Urban Development Executive Director position and what the responsibilities will be. Mr. Christensen asked if this position will share economic development responsibilities and Mr. Hanson said he has prepared a job description for the Urban Development Director. He said this job description removes specific economic development duties, which makes it a more general economic development function and this position would be an advisor to the Mayor and to other city officials as far as economic development. He said he also prepared a Joint Powers Agreement that is currently within the office of the City Attorney. This agreement explains the relationship between the Urban Development office, City, City Council, Housing Authority Board, Housing Authority Director and the Housing Authority and also explains how these entities will continue. He said he also prepared an organizational chart on how these organizations will continue to function.

Mr. Christensen stated at issue today is, should the Urban Development Office have a part of its function with economic development and should it be part of the City or should it be separate.

Karl Bollingberg stated when John O’Leary was at Urban Development and Dick Olson was with EDC there was a close link between them. He said there was a relationship established and questioned whether this was a relationship between two people or was it required between those two areas structurally to have that function. Mr. Glassheim said there was always a tie since the City provides most of the money. He said the City, as a public body, administered the funds and the Growth Fund was established. Urban Development administered the final approval.

Karl Bollingberg clarified that there is an administrative cost at the office of EDC and also the ‘deal’ money. He said the ‘deal’ money is City money (Growth Fund). He said it is a goal to not have most of the burden directed to the City.

Mr. Gershman said discussion needs to be held at a customer’s point of view and concentration should be focused on the customer. He said the customers are not being directed properly and asked what is the best way for the customer. He said we might have lost potential business in Grand Forks because it was assumed that someone else was going to take the lead, or a packet of information may have been sent to the client instead of a visit. He said when he analyzes a business he looks at the customers first.

Mr. Bunce said there is a very large machine working economic development but there is not a scout out finding targets. Mr. Hanson said he felt that particular position is held by the EDC and they are the marketing arm of the City. He said that they should be the one making the contacts and promoting the City to outside and inside internal industry. He said they should know all the incentives available locally, state wide and nationally to any new or expanding business in the community. He said the City has a fiduciary responsibility over the funds that it puts into economic development. He said EDC should be the marketer and bring the City into a deal early into the process and then lead it. Then once it is at a point where there is an application to make; this application should be turned over to the Urban Development Office. The Urban Development Office will then review the application and make sure it is complete. They will then direct it to the Growth Fund Committee for their recommendation and then passes it on to the JDA. He said we do not want clients going back and forth between different departments. He said the process today might not be adhered to as fully as it could be. He said we should re-fine the process we currently have by letting EDC do the marketing and then turn it over to Urban Development or a department for their evaluation and review. He said the Urban Development Office currently does the paper work, monitors the activity once the loans and/or grants are established. He said to streamline this, the JDA could give the Growth Fund Committee additional authority. He said they could give the committee authority to approve and structure deals up to a certain limit. This would eliminate a step in the current structure.

Mr. Hammerlik asked what are the drawbacks of the current procedure. Mr. Espegard said it might be a good idea to look at what other communities are doing and also said the problem could be personalities.

Mr. Hanson said EDC represents the client, they are the point of contact for a company and they assist the client through the entire process. The actual funding is not part of the EDC function. They put packages together and make recommendations to the client and also to the Growth Fund Committee and recommend what they feel is the best economic development package for the client. He said the Urban Development Office should be introduced to a company early on, so the company is aware of the process.

Mr. Schmisek said we’re one of the funding sources that EDC puts into a funding package. He said our responsibility is to review this process like a bank would.

Mr. Christensen said the Growth Fund was put into place as a buffer to get a deal done with the public. He said he does not see the reason for the EDC as a corporate body, other than as an organization where people contribute money to sit on a board of directors. EDC receives $450,000 a year and he said that is a lot of money for four people. He said John Schmisek could handle the accounting that is involved. He said either he supports the EDC for a couple years or we get rid of it. Duane Espegaard said someone needs to hold everyone at task.

Mr. Glassheim asked how many jobs this current process has created over the last twenty years. He said he felt there were a lot of jobs created, even though there are flaws within this process.

Dennis Reisnour summarized their discussion in three points; strategy, the development of industry clusters in Grand Forks and the structures and roles of the different bodies involved in this process. He said the process also needs to be addressed.

Karl Bollingberg said strategic focus should be addressed. He said this year they developed a Program of Action for EDC for the current twelve months.

Mr. Christensen said it is incumbent upon the EDC Board to come back to the elected officials to inform them of what their strategy is for the delivery of economic development for 2003. He said we are accountable for the $450,000 when they approve these projects. He said it is important to get a strategy and focus from EDC.

Mr. Gershman said the Bureau of Government Affairs at UND should be considered to conduct a survey to contact people who have done business with us to see what their perception is of the City. Mr. Duquette suggested using the School of Business & Public Administration at UND. Mr. Bunce stated that he would like to put forth value-added services.

Mr. Espegard stated that economic services delivered within the City should be addressed from the outside. Mr. Snustad said the disconnect would be easy to fix on how the EDC communicates and gets input on its strategy from the elected leaders. He said two council members were added to the EDC board, hoping to accomplish this, but there is still a disconnect. Mr. Snustad said staff has not approached the Growth Fund to inform them where they are headed. He said everyone should feel more ownership in this process. Mr. Christensen said there has been discussion amongst City Council persons about the money contributed and what the community is receiving. Mr. Espegard indicated that this community must be more visible to the state and federal government.

Mr. Christensen said this needs to be reexamined, a strategy developed and implemented in the next three to nine months. He suggested that EDC report back to the Finance/Development Standby Committee with a strategy in two weeks. He said we need to explore what it would cost to review this system. Mr. Gershman said the Knight Foundation might be able to assist with this.

Mr. Christensen arranged a meeting to be held in two weeks to review the current strategy of EDC. This will include what their focus is and what should be included in a RFP. Mr. Espegard said we need to take a close look at how we want to develop economic development. He said we need to address what kind of RFP is wanted.

Mr. Christensen appointed Keith Lund, Rick Duquette and Elliot Glassheim to search for national organizations specializing in economic development studies.

As there was no further business, Chairman Christensen adjourned the meeting.


Tina Scott
Urban Development