Committee Minutes

MINUTES-Finance/Development Standby Committee
Thursday, January 2, 2003 - 4:30 p.m.---------______________

Members present: Christensen, chair; Glassheim, Hamerlik.

Also present: Charlie Bunce, Keith Lund, Rick Duquette, Pete Haga, Peggy Kurtz, Mel Carsen, John Schmisek, D.Kerian.

2. Possible changes to the guidelines, which regulate the property tax exemption for remodeling improvements._____________________________________________
Mel Carsen, city assessor, stated this concerns the 3-year remodeling exemption for homes and businesses and was referred by the city council mainly to address the 30-day filing requirement that is in our local regulation but not in the State law - the State law allows for the exemption in general and allows local jurisdiction to make rules that are more restrictive than the State law. He stated there were four things he would like to address and would like the committee to consider:

1) 30-day filing requirement. that it seems like 30 days isn't enough time and perhaps reason is that we don't give out information when we issue a building permit - that 30 days might be short and not sure 60 or 90 days would really help. He stated there is another exemption, two-year home exemption where there is no requirement for the property owner to make application and his office tracks those people and send them an application when we think they qualify, they sign it and return it. He stated he wasn't sure why they wanted the 30-day requirement and is pretty restrictive - his suggestion is that if they make application prior to the first time they need to assess the property with those improvements as they have normally gone out there and looked at the property and if it seems they might qualify his office could if the property owner hasn't submitted the application, could alert them they could qualify for that exemption. He stated if they want to give them everything they deserve, would have no restriction and if want to restrict it, want to tighten that up - in Minot have to apply and have it approved prior to construction, Bismarck doesn't have any guidelines and Fargo doesn't have a deadline.

2) Currently there is a $500,000 max. exemption on commercial property - thinks that is low, State law doesn't have any exemption limitation as far as dollar amount nor do any of the other cities. He stated the reason for the $500,000 limitation was that didn't want to give too much money away and that may be a good reason, but if somebody takes a property that needs a lot of work and brings the value up, maybe exempt the dollar value of the remodeling. He stated that the State law allows for 5 year exemption and the City limits it to 3 years - the only one that has been limited to the $500,000 is the remodeling of the former Sears store and the remodeling there is going to increase the value much more than $500,000 and they will be limited to a $500,000 exemption and taxed on anything over and above that.

3) State law allows for up to 5-year exemption and we limit it to 3 years - would think that 3 years is proper - Minot uses 3 years as a limitation, Fargo uses 3 years on some and 5 years on some other properties - older properties they use 5-years and newer properties they use 3 years.

4) New additions now qualify - currently State law allows for additions to be considered a remodeling improvement and according to State law can put an addition on, not remodel at all and gain the exemption - he stated the way he interprets the guidelines would say that the property owner would first have the qualification of the exemption by way of remodeling and then an addition can be included in the exemption. He stated we have a small addition and exempt it, have had three that are major additions and have considered each separately, and he would like to see way of writing that so could tell the property owner what he would qualify for; that now it allows for exempting the addition as long as they meet the criteria of the exemption before you get to the addition.

Hamerlik stated that the 30-day requirement isn't the problem but communication to the property owner, and when issue a building permit, there should be a packet attached to it - that to open it up without any time requirement would be too much of a problem for our own budgetary purposes; that he interprets State law as improving residence in some way and not sure garages are a part of a renovation. He stated the 30-days could be tied to the permit or to the start of the building and may increase the $500,000 restriction.

Mr. Carsen stated if an addition is put onto a building that qualifies by way of age, then it would qualify. He stated they have more problems with the 30-day requirement.

Christensen stated that it is incumbent upon the department that issues the permit to have a packet that sets forth the various exemptions the property owner would be entitled to and if the packet includes property tax exemptions or improvements and should be part of the packet, that as part of the issuance of the packet have a checklist and so don't have a problem in the future, the property owner or contractor initial it when receiving the packet so homeowner has to know. He stated that Mr. Carsen stated they have to be out there inspecting for the increase in taxation (assessing starts approx. October 1 and finish about March 1), and he is comfortable with a longer period to file request for exemption because it's the next tax year. He stated he would agree with recommendation by the assessor so the homeowner gets the packet, knows time requirement, and the statute says up to 5 years from the date of commencement of making the improvements so can't go with issuance of the permit; and if have a general consensus, ask Mr. Carsen to come up with a proposed policy as to how get notice to the taxpayer, when given and who gives it, develop a method so the issuing department knows that it is done, and that an addition to an existing structure would qualify as an exemption and is comfortable with the current policy and more a question of notice, proof of notice and a deadline and if develop that in our policy, would be willing to bring back in a couple meetings.

Glassheim stated that he likes a deadline - a 90-day from sometime and better for the property owner as well but being informed and being sure you're informed is our responsibility but however you implement that and starts the clock going, and probably from time of completion to determine how much you spent. Carsen stated that the incentive is that they do the work and improving their neighborhood and their incentive is that they get a tax break for 3 years if they qualify.

Glassheim stated the $500,000 max. , that he is concerned about the property tax that we need it, most of these things happen without our exemption but wouldn't mind taking it off if do on a graduated scale so that you have something coming into the city coffers and wouldn't mind taking the max off if we had a sliding scale so not fulltime exemption.

Glassheim stated that the 3-year exemption was a deliberate policy to make it easier to get in at the beginning and yet to fulfill the City's need for income. Mr. Carsen stated that the original law was 3 years max. and in 1999 they extended it 5 years.

Hamerlik stated he would agree with 1) with a more definite date, identifiable, and on item 2) maybe $1 million but what happens if get going on Renaissance and how that might tie in and also that a residence is not a garage. Mr. Carsen stated improved property in ND is classified either residential or commercial and that is reason why garage on a residential property is residential.

Glassheim stated he agreed with 3 years and asked if they want to go from $500,000 to $1 million - increase to 1 million and keep it at 3 years. He stated on 4) he has concern about using an addition as a renovation and would rather take that off and capture the full amount, and point of this is to encourage renovations and remodeling. Hamerlik stated that by putting on an addition will improve the property and will improve neighborhood. Christensen read statute and stated he would agree with the addition. Glassheim stated he would be more restrictive.

Christensen stated the committee would like Mr. Carsen to give them an end date based upon when you're assessing the property and if pass out the packet and give property owner the information and have process in place at building permit level where the recipient is signing and acknowledged receiving this and in the packet notice states that the property owner must file for application no later than -- or deemed to be waived. Hamerlik stated that permits expire in 6 months, Mr. Carsen stated they do but as long as the property owner continues to work, they don't expire but if quit working for 6 month period, then have to get a renewal. Christensen asked if it would be inconvenient for assessing if property owner must make an application within 12 months of the date of the permit or commencement of construction - Mr. Carsen stated 12 months might be too long. Committee stated that 30 days is too short but give 6 to 9 months and a policy of implementation. Christensen stated that within 12 months from the issuance of the building permit or 60 days from the date of receipt of the notice from the city assessing department. Hamerlik suggested that they take this directly to the committee of the whole and not have another meeting of standby committee. Mr. Carsen stated he may not have this for January13 committee of the whole.

1. Urban Development director job description.
Christensen stated this is discussion of the job description of the director of the urban development office as a contract position and that he prepared a job description where he used part of the existing job description that was faxed to him by the mayor's office on October 28 and distributed copies to the committee and other individuals - the other two descriptions were prepared by Mr. Bunce. Mr. Bunce stated the second one is one that was looked at before the Housing Authority decided to have its own director, and after that period of time, the one was done to show Urban Development director as separate and the description titled "Director, Urban Development (contract position)" is most current and all references to "..housing authority - operations of urban development department including housing authority.." and was looked at as a combined directorship before the Housing Authority decided to go ahead and do theirs. It was noted that there is still reference to housing as a function of the department. Mr. Bunce noted that the last two pages are diagram and shared area, and shows what the joint powers agreement is. The diagram shows a flow of difference between the urban development and rather than going directly to the growth fund, it goes to urban development to do the paperwork, and when goes back to the clients, the growth fund sends it back to urban development for review, and then to Economic Development Corporation to go to the client.

Christensen stated issue for the committee is that urban development office without Housing Authority component, and if address urban development office without housing authority, as to what the urban development office does, should be everything but housing. Keith Lund stated that the Housing Auth. has hired its own director and will not be subordinate to the urban development director, they don't have the same employers, and the urban development director needs to be very strong in housing issues for the city of Grand Forks - that in the past the Housing Auth. director was a city employee acting on behalf of the City, not to suggest that the HA would not today, but need a city employee director that is looking after those types of things on behalf of the city of Grand Forks; the existing job description states that something to the effect that "..analyzed community development housing and economic development needs identify alternative solutions, plus project consequences of employee's actions and implement recommendations and supportive goals." and sees that as responsibility of the urban development director and housing is in that statement, and should still contain the component of housing. It was noted that the component of housing would not be to supervise the HA although it would still be to supervise the joint powers shared staff (all are city classified employees) and would be under the urban development director providing under contract services to the HA (contract or shared administrative classes). The question was raised as to what the involvement of the urban development director be, and if other things beside the HA that pertain to housing. Mr. Lund stated that the City receives an allocation of CDBG funds and HOME funds from either the State or Department of HUD, HOME funds are for the sole purpose of providing for affordable housing and CDBG have additional eligible uses and primarily focused on that activity and Housing Rehab. programs that they pass funds through (Red River Valley Comm. Action Agency, home ownership programs they operate are all funded through urban development and their initiatives they've identified are very successful programs, and those are the City's dollars and need director to savvy those types of activities. Mr. Lund stated that CDBG HOME dollars can be allocated to redevelopment projects to identify a section of town that is blighted and could allocate resources that it receives to redevelop or renovate a portion of town; that he sees potentially the urban development director would with the approval of city council might determine that the HA is best suited to address a housing issue but the City's responsibility to identify its needs and define the appropriate course of action to address those. Glassheim stated the initiative from Mr. Kreun has come forward through Urban Development and maybe mod but not low income and if that is under HA; Mr. Lund stated that has not been implemented and having some struggles in how City to actually accept funding for that program, and that program was going to be administered by urban development office.

Mr. Duquette stated that Mr. Hanson was wearing two hats, both HA director and UD director and his sense was bringing that forward as a HA director with Mr. Kreun. He stated in the descriptions (director, UD, contract position) and in looking at the Definition where it states "..to coordinate assigned activities with other divisions, department and outside agencies.." as far as the relationship with HA and HA director.

The committee discussed the

Christensen stated he took the October, 2002 draft and used pretty much the same language with the exception of "...economic and business development.." and then kept it same "...with coordinated activities with other departments of the city or federal and state agencies.." and what would be the HA, that it's a separate stand-alone HA; Mr. Duquette stated it would be an outside agency - Christensen stated it could be included and kept "..and to provide highly responsible and complex administrative support..." and thought it would provide administrative support to the mayor, adm. coordinator and the city council. Hamerlik stated he was going to suggest that they include specifically the housing in that - it is generic all the way through and that housing is separated out and includes that. Christensen stated he would include "..and housing authority" to his language. and would say other departments of the city, or federal or state agencies or other housing authorities" and now have separate state-alone housing authority

Glassheim stated he liked the job description that Mr. Bunce provided, except for adding housing in one or two places (not Housing Authority) but housing interests because it indicates that when they hire somebody want them to have some knowledge of housing because separate from HA they have responsibiltiies in low and moderate income housing, whatever isn't covered unt ewhr the HA but there may be other things that not covered under the specific HA - Glassheim stated there's still a place for housing sepate from theHA's supervision in the Urban Development department. Glassheim asked if they were agreeable to add housing as a function which the urban development department with which the director will have some responsibility for. Committee agreed. Glassheim stated the only other thing in essential functions 1. would add housing needs. Glassheim stated that in the definition section that in support of the mayor, adm. coord. and would like to have city council.

Glassheim stated he would want to make sure that there's some written and contractual responsibility - Hamerlik stated that at the las tcouncil meeting, and only have to ask the mayor - Mr. Duquette stated in the definition the city council is fine because innext paragraph describes supervision received and exercised.

Christensen stated the issue is whether or not this person is part of the job description should have included the definition, economic and business develoment, and he deleted it and everything else inthe proposed description in October, 2002 is pretty much the same as far as definition is concerned with Mr. Glassheim's addition - he purposely deleted the words "economic and business development" so didn't get a cross purposes as they've seen in the past, he deleted it but added to the definition is 3. what the growth fund's ordinance provides in which the growth fund policy provides which is this person would administer, manage the property owned by the JDA, serve as the rep. of the GF when dealing with staff of the Economic Development Corporation, review and screen pre-applications submitted to the GF by the EDC before applicants submits a formal GF application which is within the policy so there is no overlap and then administer and account for all CDBG and EDA loans or grants and the loans or grants made by JDA which encompass our 2163 and 5996
accounts. That rather than saying economic and business development making it specific in essential functions - not overlap but cooperation.





Glassheim stated he still wanted the urban development director to have as one of the primary legs of the stool - economic development when hiring, when evaluating and how they think of themselves - not just a property manager - wants a fairly high level peron who is not just going to administer EDA money but sees as part of their job. - wants this person to be well versed in economic development and looking for job description where he is hiring somebody and thinks economic development is equal to community development and property management as what they do - and one of the most important things this person is going to do - they won't go out and recruit the deals and never seen what the problem is if somebody comes in the window that way - what's the differfence - and if conflictgs that are p;ersonality based, then change personalities but the structure is not bad and doesn't want to compete with EDC - but have to have initiative in the economic development field and its urgent and one of the three things they do, or more.

Hamerlik asked if possible that person serve on the EDC as any other person to be involved.
Christensen stated they've changed the makeup of our Growth Fund but the EDC's board of directors changed its executive committee to provide for a member of the Growth Fund and the director of the UD to sit on theexecutive commitee. Hamerlik stated the individual from urban development will be a major part if they're executive committe of the EDC. Christensen stated to include to work with EDC and ---

Christensen stated they want to have a job description so they can go to market and want to get one out as quickly as can - within the next two weeks. Glassheim askedif they were going to include - to cooperate with the EDC and that was fine as that's part of their intention.

Christensen stated he will get it re-typed and e-mailed to all those attending tomorrow but if go with this and submit it. Hamerlik asked if this should go directly to the committee of the whole or should the committee meet again prior to the committee of the whole meeting. Christensen stated that they will want this in their packet and that they want this done in 6 weeks. Mr. Bunce stated there is a missing piece - the joint powers agreement that we need to make sure that we're not putting two different job descriptions - HA and this one, but make sure we look at joint powers agreement. Christensen stated he would like to get the person hired and that he/she find and see the lay of the land and that person come back with some recommendations re. the joint powers agreement - as long as it's moving forward and let that person have the ability to work on that agreement because it's going to be their department. Mr. Duquette stated he felt it ws ready to go to the committee of the whole, maybe with a 6:30 meeting if necessary. Christensen stated he would have this ready for the committee of the whole on January 13.

After further discussion and review of the changes - Glassheim stated these are divisions of the department - client services, management. Christensen stated that the job description does not set forth the divisions of the urban development office - that's for a later day - that when we received this in October there ws no vibrocation of the HA and the UD Office - have a budgeting process and have administration of its financial matters. Mr. Lund stated that 1) is to define the individual, legs department's funcitons of the urban development office and there is a finance leg to the office.

Christensen stated they are not setting forth the various departments of the Urban Development Office by virtue of this job description, and it is his understanding that this is what this person would be called upon to do at this juncture, but when we hire this person that person along with Mr. Bunce, the administrative coordinator and others will make recommendations re. the joint powers agreement. Mr. Duquette agreed; Mr. Bunce stated the HA has a big input to joint powers also - Christensen stated that's another discussion for another day. Christensen stated we're not creating or setting forth the structure of the urban development office for the future based upon this job description. Mr. Duquette stated he tended to look at the pieces of this job description as they describe what he is goifng to be looking for the urban development director, and want that executive to be able to manage the finances of the services and programs that are coming into and out of that department. Christensen asked if the words "and financial matters" is clear enough in 1) of his description to help him go to market - Mr. Duquette agreed.

Hamerlik asked if this were to go to committee of the whole Monday night (January 13) and put this in legible and get that out to the committee and staff and if there is a need to meet before committee of the whole, otherwise to committee.

Glassheim asked Mr. Lund if there was anything they are not taking account of that they should be. Mr. Lund stated it is okay to get very specific in a job description, his main goal coming here today was to make sure that housing initiatives and housing issues remained in the job description and economic development be a key component and was articulated very strongly that they want that type of person managing the department, and as long as those functions are in there, that was his goal along with everything else that was included; and sometimes wonders if not getting too technical in their Growth Fund policy and procedures isn't where a lot of this discussion and should be documented - could have a general job description and these are your duties, and here's policy and procedures and you are responsible for that just as easily as a job description - most job descriptions are generic and duties include these basic things and other documents that state specifically item by item, but his main objectives were met.

Christensen stated with item 3) that with the items that were included achieve the goals of the committee as far as the beginning for their conversations back in October, and doesn't think taking away from what you've perceived to be the primary goals of the HA, and agree that it is housing, etc. but to the extent that person is going to have some interplay in our EDC and JDA and wants to make sure that he/she knows we're going to expect cooperation and working together. Mr. Lund stated that is the key to this process.

The committee adjourned at 6:20 p.m.

Alice Fontaine
City Clerk

Dated: January 8, 2003.