Committee Minutes

MINUTES/GROWTH FUND AUTHORITY (JDA)
Monday, January 13, 2003 - 7:00 p.m.____________

The city council of the city of Grand Forks sitting as the Growth Fund Authority met in the council chambers in City Hall on Monday, January 13, 2003 at the hour of 7:00 p.m. with President Gershman presiding. Present at roll call were Council Members Brooks, Hamerlik, Glassheim (teleconference), Gershman, Christensen, Kreun, Mayor Brown - 7; absent: none.

HOLD PUBLIC HEARING ON REQUEST FROM
PEMBINA COUNTY JOBS DEVELOPMENT AUTHORITY
FOR MOTOR COACH INDUSTRIES (MCI) AND APPROVE
REQUEST

The city auditor read the recommendation from the Grand Forks Growth Fund relating to the Motor Coach Industries retention project. :
1) To hold a public hearing on the proposed funding to the Pembina County Jobs Development Authority for the retention of Motor Coach Industries in Pembina, ND.
2) To approve the request of the Pembina County Jobs Development Authority to provide a grant in the amount of $100,000 for the retention of Motor Coach Industries in Pembina, ND in one installment.

President Gershman opened the public hearing on the request. There were no comments and the public hearing was closed.

COUNCIL MEMBER KERIAN REPORTED PRESENT

Council Member Brooks stated this is a $100,000 grant and there is some down-sizing or reconfiguring going on and report stated between 400-450 employees and questioned if anything tied in that this grant becoming a loan should the number of employees drop below 400, and if that was considered by the committee. Council Member Christensen stated they didn't consider that, that the applicant has requested a grant because communities are making grants and so a matching grant, communities are not lending the money and we are actually giving the money to the communities so they can replenish their funds because they've made a commitment to MCI, and we would actually be regranting.

Mark Krauseneck, president and CEO, Grand Forks Region Economic Development Corporation, stated the ultimate package is a combination of state loans and grants, federal loan and all the local communities ended up in grant position for additional training funds and there was discussion about those being loans; the local communities collectively as a consortium made a grant in good faith to try to get as close to $750,000, and that Neche fell out and the company decided they would accept the lesser of the amount with Neche out that doesn't have to be made up so our $100,000 helps underwrite on a pro-rata basis all the other smaller communities' commitment and they are from cash flow point of view very strapped because they committed out in some cases 3 years of their revenues to do this, and they are in turn borrowing from the Bank of North Dakota for their local grant commitments so our grant support helps lessen the blow to those communities. He stated with respect to the employment at the beginning of last winter they had about 530 at the plant and they have a float anytime of between 10 and 15% of temporary employment in which case there were 42 employees let go on Friday and per agreement with the company there is an understanding that throughout the winter the 2 lines that went to Winnipeg and will make that move and as a consequence there was a short-term drop in salaried and hourly wages in employment, which temporarily could put the site in the mid-300's to the higher 300's, and the agreement with the company and understanding and concern with training and productivity improvements is within 3 years they will be at 425-450 plus and sustainable employment because of the productivity improvements and workplace flexibility and capital investments - they received major awards and those buses will be built late 2003 and 04. and feel confidant that the employment will not within a year or two drop below 425 and will grow as needed to meet their demands but could be mid-300's, but just temporary.

Council Member Kerian stated she supports regional economic development as they contribute to and draw from the community development and important to show support for that. She stated she understood we were late in the game and even though this is an established company in some ways trying to improve business and need to support them - and hopes this is not the model for future economic development to the extent that they can be a little clearer and have a bigger presence with the company so that we can better meet the expectations of our constitu-ents as we make adjustments and would speak in support of that.

Council Member Hamerlik stated at the Growth Fund committee meeting they discussed how they proceed from here - and discussed in some detail as to the numbers, how many employed now and what layoffs would be upfront and took under advisement.

Council Member Kreun moved to approve the request of the Pembina County Jobs Development Authority to provide for a grant in the amount of $100,000 for the retention of Motor Coach Industries in Pembina, ND in three installments as we would pay as they go. Council Member Christensen seconded the motion.

Upon call for the question and upon roll call vote, the following voted "aye": Council Members Brooks, Hamerlik, Glassheim, Christensen, Kerian, Kreun, Mayor Brown and President Gershman - 8; voting "nay": none. President Gershman declared the motion carried.

ADJOURN

It was moved by Council Member Kreun and seconded by Mayor Brown that we adjourn. Carried 8 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor