Council Minutes
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
September 29, 2003
The city council of the city of Grand Forks, North Dakota met in special session in the council chambers in City Hall on Monday, September 29, 2003 at the hour of 7:00 o’clock p.m. with Mayor Brown presiding. Present at roll call were Council Members Brooks, Hamerlik (teleconference), Glassheim, Gershman, Christensen, Kerian, Kreun - 7; absent: none.
Mayor Brown announced that anyone wishing to speak to any item may do so by being recognized prior to a vote being taken on the matter, and that the meeting is being televised.
Mayor Brown commented on various events during the past week and upcoming events.
1) he congratulated Sgt. Cliff Phelps of the police department who retired after 32 years of dedicated service to the city and wished him the best in the future.
2) Tour de Forks - thanked organizers, including Louise Sullivan, Louse Eberwein, and Sharon Lambreth for Walk for breast cancer
3) UND Homecoming this past weekend and one of the busiest in our community, and that he appreciates the positive efforts that go into Homecoming, and congratulations to them.
4) last Friday city leaders had opportunity to experience a presentation about economic development in North Dakota by Linda Butts of the State Commerce Department , and that he is hoping to bring her back so more community people can hear her message.
5) he asked everyone in our community to join him in recognized Wednesday, October 1, as International Day of Older Persons, and that they will be giving free bus rides to everyone 55 and over all day.
SUSPEND AGENDA
Council Member Gershman moved to suspend the agenda to consider non-controversial items and hold the first item of the agenda re. Aquatics Center until the end of the meeting. The motion was seconded by Council Member Christensen. Carried 7 votes affirmative.
APPROVE APPLICATION FOR EXEMPTION OF
IMPROVEMENTS TO RESIDENTIAL PROPERTY AT
801 CHESTNUT STREET FOR 3 YEARS
The staff report from the city assessor relating to the application for exemption of improvements to residential building at 801 Chestnut Street, with recommendation to grant exemption on the increased value due to remodeling for three years.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Carried 7 votes affirmative.
AWARD BID FOR PROJECT NO. 5355, NORTH COLUMBIA
ROAD/COULEE BANK REPAIR
The staff report from the engineering department relating to consideration of bids for Project No. 5355, North Columbia Road/Coulee Bank Repair, with recommendation to award contract to ICS, Inc. in the amount of $46,776.00, contingent on acceptable findings from the cultural resources inventory and NDDOT Concurrence.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Upon roll call the following voted "aye": Council Members Brooks, Hamerlik, Glassheim, Gershman, Christensen, Kerian, Kreun - 7; voting "nay": none. Mayor Brown declared the motion carried and the contract awarded.
ACCEPT BIDS FOR SALT AND SAND
The staff report from the director of public works relating to consideration of street department rock salt and sand bids, with recommendation to approve award of bids to the lowest responsible bidders as follows: rock salt to NSC Minerals at $36.50/ton or $14,600.00 and sand to Strata Corporation at $7.50/ton or $42,000.00.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Upon roll call the following voted "aye": Council Members Brooks, Hamerlik, Glassheim, Gershman, Christensen, Kerian, Kreun - 7; voting "nay": none. Mayor Brown declared the motion carried.
APPROVE APPOINTMENT TO PENSION/INSURANCE
COMMITTEE
The staff report from Mayor Brown relating to Pension and Insurance Committee appointment with recommendation to confirm the appointment of Council Member Brooks as one of the city council representatives to a three-year term to the Pension and Insurance Committee.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Carried 7 votes affirmative.
ESTABLISH GATEWAY DRIVE DESIGN REVIEW
CORRIDOR BOARD
The staff report from the planning department relating to establishing Gateway Drive Design Review Corridor Board, with recommendation to request the city attorney to prepare an ordinance that: A) establishes a nine (9) member Gateway Drive Design Review Board consisting of the following members appointed by the mayor and confirmed by the city council: a) six property owners or their representatives: three from the area east of I-20, three from the area west of I-29, one Grand Forks County representative, one Grand Forks City Planning & Zoning Commission representative, and one at large representative; B) establish the Gateway Drive Design Review Corridor; c) provide the Design Review Board with authority to adopt design guidelines; D) provide the Design Review Board with authority to review and approve the design of new development, renovations and reconstruction of existing development within the Gateway Drive Design Review Corridor; E) provide the Design Review Board with authority to assist businesses within the Gateway Drive Design Review Corridor as the Board deems appropriate; F) assign administrative responsibilities for the Design Review Board to the Urban Development Department.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Carried 7 votes affirmative.
INTRODUCE ORDINANCE TO AMEND SECTION
7-0101(4) OF THE CITY CODE TO REDUCE NUMBER OF
MEMBERS TO CONSTITUTE VALID VOTE
The staff report from director of finance and administrative services for the Pension and Insurance Committee relating to change in city Ordinance No. 3937, with recommendation to approve an ordinance to amend Section 7-0101(4) of the Grand Forks City Code to reduce the number of members to constitute valid vote.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Carried 7 votes affirmative.
Council Member Kerian introduced an ordinance entitled "An ordinance amending Section 7-0101(4) relating to the pension and insurance committee", which was presented, read and passed on its first reading.
AUTHORIZE RETIREMENT WORKING GROUP SUB-
COMMITTEE TO SOLICIT PROPOSALS FOR POST-
EMPLOYMENT SAVING PLAN
The staff report from the director of finance and administrative services and director of Human Resources for Pension and Insurance Committee relating to request authorization to send out an RFP for a pretax, post-employment savings plan for medical expenses, with recommendation that the council authorize the Retirement Working Group Subcommittee to solicit proposals for a post-employment saving plan for medical expenses, pending review of the draft RFP by appropriate staff.
It was moved by Council Member Kerian and seconded by Council Member Kreun that this recommendation be approved. Carried 7 votes affirmative.
APPROVE APPLICATION FOR ABATEMENT OF TAXES
AT 3532 10TH AVENUE NORTH
The staff report from the city assessor relating to applications for abatement for 2001, 2002 and 2003 taxes by Mercedes Kohanowski, 3532 10th Avenue North, with recommendation to recommend to the Board of County Commissioners that the applications be approved as submitted.
It was moved by Council Member Gershman and seconded by Council Member Kerian that this recommendation be approved.
The city assessor reported that the taxes on this property are five years delinquent, that valuation estimated and this would reduce valuation, that the owner passed away a number of years ago and the property is in an estate and trying to settle estate, and doesn't limit responsibility to take house after five years.
Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
APPROVE APPOINTMENT TO MPO EXECUTIVE
POLICY COMMITTEE
The staff report from Mayor Brown relating to appointment to MPO Executive Policy Committee, with recommendation to confirm the reappointment of Council Member Kreun as one of the city council representatives on the MPO Executive Policy Committee.
It was moved by Council Member Brooks and seconded by Council Member Christensen that this recommendation be approved.
Council Member Brooks suggested, that while not opposing the appointment, to rotate members through different committees to give everybody broader idea and benefit of positions.
Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
ADOPT RESOLUTION RE. AQUATICS CENTER
Council Member Glassheim stated he had prepared resolution for consideration by the city council and suggested that the council then go through the resolution section by section with any amendments the council may wish to make and moved the resolution for adoption. Council Member Kreun seconded the motion. Document No. 8291 - Resolution.
Council Member Glassheim moved that we divide the question and proceed to consider each section of the resolution; Council Member Kreun seconded the motion. Carried 7 votes affirmative.
Council Member Glassheim stated he prepared this resolution and that it seemed to him that there was a lot of uncertainty in the community, unanswered questions, etc. and that we owed it to the public to make it as clear as we could our understanding of where we were at and what aiming for and then it is up to the public to decide.
1) Community Water Facilities.
Council Member Glassheim stated this is a statement of 46,000 sq.ft. aquatics center we are intending to build with a $12 million price tag and also a use of $230,000 of money already approved from the Riverside pool buyout to the Park District if they choose to match it and to do neighborhood splash parks in University Park, Optimist Park, Riverside Park and Elks Park, and the Elks pool upgrading, and moved Item 1. Council Member Kreun seconded the motion.
Council Member Brooks questioned the statement in the section that the City authorize the Park District to spend $230,000 of the $830,000 to help the Park District build splash parks, and if the City has the authority to authorize that as that is part of the Park District's mission, and that money had been given to the Park District. Council Member Glassheim stated in the buyout of Riverside pool they stated that the Park District would receive $830,000 but that was to go for a replacement for a city-wide water park and that we still have those dollars in our coffers and we would say instead of spending them on a city-wide water pool like the aquatics center, they could put it towards four neighborhood water centers.
The city auditor stated their previous authorization was $2 million and $1 million coming from the Park District and they could use this buyout money as part of their million dollars; that the City had talked about a $2 million number and is a dollar amount that we still needed to come up with, but that was prior to our letter from FEMA and that we have to consider that at this point.
Council Member Christensen stated that it would be wise before we get into the resolution for the citizens to take the time to trace how we got to this point and reviewed background: that in September of 2002 the principals from Canad Inn may have approached the City to see if there was possibility of negotiating a hotel, and at that time the Park District was in the business of deciding what their needs were as a community and the Park District had hired an organization called Councilman and Hunsaker and this organization came up with a proposed plan that was finalized in January 2003 and updated in May, 2003; that on February 26 the Mayor gave his state of the city address and endorsed the water facility; prior to that time, December 3, 2002, a letter of understanding was signed (letter of understanding is a non-binding agreement to agree) and in that letter of understanding Canad Inn had been led to believe that they would pay $50,000/year as their share of access to the water facility; that we learned in early March that the Park District did not have the ability to build the facility as they did not have the capacity to sell the bonds and pay for them and we have that in writing from their attorney. The Mayor appointed a task force and consultants were hired by the task force (Councilman-Hunsaker group and another group called Ohlson Lavoier out of Colorado and they brought with them a consultant, Mr. Haralson), and heard their reports; then received Mr. Duquette's report, business plan, and that report endorsed by Mr. Haralson and now have new numbers, new projections, updates and financial feasibility; that reports had size of the facility, had projections as to what it is going to cost to operate; and now first order of business is going to reject the consultants report and take it down from 49,000 + sq.ft. to 46,000 and asked how can we get all these reports, spend all this money on consultants and then decide we are going to take everything we have to date and come up with our own sizing plan and our own financial feasibility; and why hire consultants.
Council Member Glassheim stated we are the policy making branch of government, we authorize expenditure of money, we decide and use consultants to guide us, take what we can from what they give and if we think they don't make sense to Grand Forks, it is up to us to amend them, we follow best professional advise and use our heads and make modest changes in the consultant's report and working with national averages which may not be appropriate to local conditions.
Council Member Brooks stated he is not comfortable with dropping the figure down 4,000 sq.ft. and has an impact on the per sq.ft. operating costs and not sure blanket that in terms of the construction cost, and that is a concern to him.
Council Member Glassheim stated that Mr. Haralson told us several times that both construction costs and operating costs were linear which meant if reduce the sq. footage you reduce construction costs by about $260/sq.ft. and reduce operating costs by about $50/sq.ft. and may not come out exactly to that extent and question is what kind of package can we present to the voters that we believe they will find acceptable - how much of the 1/4 cent sales tax do we want to devote to the water park, how much to streets, how much to levee and the greenway - how much risk do we want to take that there might have to be subsidies, the bigger the water park the more risk of subsidies because the operating expenses are higher - and in an attempt to lessen the possibility, cut 4,000 sq.ft. but to go from 50,000 to 46,000 won't be that great, our designers came up with 50,000 based upon the desires of lot of groups, and settle for slight bit less.
Council Member Christensen stated that the resolution says we intend to spend $230,000 of the Riverside flood buyout monies to help Park District to build four neighborhood splash parks for younger children in University Park, Optimist Park, Riverside Park and Elks Park, this money will be contingent upon the Park District providing sufficient match to build the four neighborhood splash parks and investing in upgrading Elks pool. He stated that a former council on or about the 27th day of June, 2000 and Mayor Owens signed an agreement that said "the Riverside buyout monies would be used to build a neighborhood pool north of DeMers Avenue", that this is a valid written agreement between two governmental bodies, and if we choose to amend or modify this, that is a decision we have to do as does the Park District; this is a legal binding document, and we cannot by this resolution change a contract and we have to deal with this issue because other councils and Park Districts have made a covenant with the electorate and that is part of the deal to get a neighborhood pool north of DeMers Avenue. He stated we have to recognize that we are being asked to use our taxing authority to facilitate the needs of another body of government. He stated there is a statute that allows this body along with the Park District to enter into a joint powers agreement and use property taxes, 5 mills, to fund a joint community wide facility. He stated he can't favor this part of the resolution until such time as this council deals with a written binding agreement that imposes an obligation upon the City of Grand Forks to honor this contractual obligation.
Mayor Brown asked if the sentence limits us from going forward or do the two bodies agree in the future to re-look at this or what is our option. Mr. Swanson stated he had not seen the resolution except for a few minutes ago, that he had no idea that we were going to be discussing a prior action, and doesn't want to rely on his recollection of what that prior agreement said and would be somewhat concerned that the City is attempting to unilaterally change an agreement, but not in a position to tell you one way or the other, presumably it should have mutual consent or mutual action. Mayor Brown said that the option would be to delete that sentence from this document.
Council Member Glassheim stated that if the council approved these sentences tonight, he would take that as a statement of intention that we would intend to move forward with a revision of the binding document and the Park District does not wish to change the uses, all they have to do is say they don't wish to and the money will remain in the $830,000 Riverside pool buyout, which then could be used for making not a neighborhood park but a city-wide aquatics center, and would read this as a statement of our intention to do that which would require the agreement of both parties and could have future action.
Council Member Christensen stated it would be prudent to bifurcate the motion as to paragraph 1, voting on each sentence. Mr. Swanson stated on his draft there are more than two sentences in section 1 and would be more appropriate method would be if there is an intent to amend it, that you would move to amend by deleting.
Council Member Christensen that in light of the fact that we have a resolution this evening and in light of the fact that he is the only council person who has a copy of this agreement or could move to amend the resolution to delete all sentences but the first sentence, then can move forward with the size of the water park; and moved to delete all the sentences in paragraph 1 but the first sentence. Council Member Gershman seconded the motion.
Upon call for the question on the amendment and upon roll call the following voted "aye": Council Members Gershman, Christensen, Brooks - 3; voting "nay": Council Members Hamerlik, Glassheim, Kerian, Kreun - 4. Mayor Brown declared the amendment failed.
Upon call for the question on the original motion and upon roll call vote, the following voted "aye": Council Members Glassheim Gershman, Kerian, Kreun, Hamerlik- 5; voting "nay": Council Member Christensen, Brooks - 2. Mayor Brown declared the motion carried.
Item 2. Why Build an Aquatics Center?
Council Member Glassheim stated Item 2 is a list of seven reasons why we believe we should build this aquatics center and moved approval of Item 2 and seconded by Council Member Kreun. Upon call for the question and upon voice vote, the motion carried 6 votes affirmative; Council Member Brooks voting against the motion.
Item 3. Major Features of the Aquatics Center.
Council Member Glassheim stated Item 3 is a list of the major features that would be in such an aquatics center so that the public knows what those are, and moved approval of Item 3, Council Member Hamerlik seconded the motion. Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
Item 4. Local Programming.
Council Member Glassheim stated that Item 4 is a list of the local programming apart from admission income, the local programming that we anticipate will be used and is a list of them, an estimation that there will be 153,000 local individual uses of the aquatics center and a number of community organizations with whom we anticipate some collaboration between them and the aquatics center in the use of the aquatics center, and moved approval of Item 4. Council Member Kerian seconded the motion.
Council Member Hamerlik questioned why they didn't say that the 153,000 is an addition to the other numbers, and asked that they add the word additional "..We expect an additional 153,000…." Council Member Glassheim stated that was acceptable to him and to the second.
Council Member Gershman stated that Council Member Christensen had received a letter from the President of the Y-Family Center listing the amount of programming that they do for the community, the number of people that participate in water exercises, swimming lessons for under privileged youth, family special event programs, etc. and that the Y-Family center fulfills a very important need in the community and expressed concern that this type of programming at the proposed aquatics center could have an effect on the Y-Family Center and is a serious concern. Council Member Christensen stated he has the same concern and is sure the Y wouldn't take a proactive position publicly against this facility, and should this pass, would hope the proponents would try to build facility that it wouldn't compete with what we already have. Council Member Kreun stated they would never want to damage a facility that is already in place, that people indicated that there is a need for this kind of facility; and if look at the programming it says community programs or as collaborative effort with such organizations as UND, Altru and YMCA.
Upon call for the question and upon roll call vote, the following voted "aye": Council Members Kerian, Kreun, Hamerlik, Glassheim - 4; voting "nay": Council Members Gershman, Christensen, Brooks - 3. Mayor Brown declared the motion carried.
Item 5. Maximum cost of the Facility.
Council Member Glassheim stated this item is the maximum cost of the facility and reiterates an already taken vote of the council that this will not cost more than $13 million for construction and articulates that since we intend if this passes to reduce the 46,000 sq.ft. and anticipate the facility can be built, but for $12 million, and moved approval of Item 5. The motion was seconded by Council Member Kreun. Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
Item 6. Canad Inn's Contribution to Grand Forks.
Council Member Glassheim stated Item 6 is a discussion of the contributions of Canad Inn's presence locating here in Grand Forks at this site, and in the benefits we expect to receive from Canad Inn and the benefits Canad Inn might receive from us, and purpose is to articulate that both parties have a good deal to gain from the relationship, and moved approval of Item 6. The motion was seconded by Council Member Kerian. Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
Item 7. Partner in Place.
Council Member Glassheim stated this item is called partner in place and is important to discuss this and it announces that even if both the aquatics center and the 1/4 cent sales tax pass in the vote by the public, this council will not sell bonds to build a water park unless we have a signed binding agreement with the hotel partner for fair and equitable participation up to $250,000 for 3 to 5 years to help offset annual operating deficits should there be any, no water park will be authorized by the council unless such an agreement is in place, and moved approval of Item 7. The motion was seconded by Council Member Kerian
Council Member Glassheim stated it is their commitment for 3 to 5 years of $250,000/year to match our up to $250,000/year. Mr. Swanson stated he thinks if it is intended to provide for $250,000 per year it should state that, as it is now, he thinks it is subject to ambiguous reading as $250,000 for 3 to 5 years or $250,000 per year. Council Member Glassheim asked to make that as an editorial change - $250,000 per year; Council Member Kerian agreed to the change in the motion.
Council Member Brooks stated we couldn't say 3 to 5 years, need to be specific. Mr. Swanson stated he would interpret that as having no meaning other than a minimum of 3 years, and 3 to 5 has to be interpreted that it establishes a minimum but not anything beyond that. Council Member Brooks stated we still don't know what Canad Inn's commitment is and don't have an agreement with them. Mr. Swanson stated he would recommend that with respect with language 3 to 5 years, and again depending upon what the intent is, but perhaps state a minimum of 3 years. Council Member Glassheim stated this matter is still in negotiation and range is intended to indicate that the parties may wish different things but to indicate to both council and the citizens it is not likely to be more than 5 and not less than 3, and that is why the range is still in there and there are two parties for negotiation and this represents something that will continue to be discussed.
Council Member Gershman stated he also has a problem with this, that according to the figures the Canad Inn visitors will utilize about 43% of the facility but would pay $250,000/year for 3 to 5 years and if they will be having the advantages of 43% of the facility and over $5 million of facility that they would have to build for themselves if build an independent free-standing water park with their hotel, and that he felt that $500,000 would be a fair assessment and being that the facility is smaller, that possibly could come down to $400,000, but has a real problem with putting 3 to 5 years when the potential for deficits goes on for the life of the facility and seems that whatever number you agree on, and can't support $250,000 for 3 to 5 years, does not seem to be a fair value for the citizens of Grand Forks.
The city auditor stated projected income if bring $15 million hotel to the Alerus Center and come from Item 6 of the resolution: if $15 million hotel they will pay approx. $330,000 in annual property tax, and based on revenue stream $150,000 in new sales tax collections and also pay hotel/motel tax of 3% which would be approx. $200-225,000, and what payroll rate would generate revenue streams to us.
Council Member Glassheim stated we should call to mind the agreement that Canad Inn believed they had with us, signed, sealed and delivered, they were primarily asked to be a 4-star convention hotel and that is the role we wanted from them, and they believe what we agreed to was they would pay us $50,000 cash every year and their people would use the facility free. Mayor Brown stated letter of intent, non-binding. Mr. Swanson stated if he knew which document you are referring to, he believes the document has specific language indicating that it is not a binding agreement, and his recollection is that it was before the council. Council Member Glassheim stated he believed it was passed by council as an expression of our intentions, whether binding legal document or not, and they believed as our partner we had agreed to and what we believed we had agreed to. There has been a tremendous shift since that time of $50,000 and no income from their users for us; somewhere between $400,000 and $600,000 of income from their users which they have agreed to so they have no competitive advantage with any other hotel in terms of admission fees, closer, and in addition because we explained to them how important it was for us to see some movement on their part to put something back into Grand Forks, they are agreeing to this additional $250,000 in case there is a deficit, and they are about to agree to that and we would have to receive and accept an agreement and vote on a binding agreement with them to that effect; they did not ask for a water park to be this size and all we are doing for them, the fact of the matter is, we couldn't have a water park this size without them, and they are doing something for us as well, furthermore, we looked to them and the water park both to increase our business at our convention hotel, the Alerus, and relieve us of deficits in that regard because we have both a 4-star hotel connected to the Alerus Center and a 4-star swimming facility; and if look at one item you can say we're not getting enough from them but seems we're giving about as good as we are getting.
Council Member Christensen stated he does like things in writing and that is why he reminded this council of a written agreement that the City had signed with the Park District re. Riverside pool, that is a loose end that will have to be addressed and that he has the letter of intent in front of him and it says basis for legal agreement, this letter of understanding forms the basis for a future final legal agreement to be entered into between the parties, this document is not a contractual agreement but serves as a representative of intent of the parties to be in the process of planning and development of the project , now we are building a water facility adjacent to their hotel which wasn't even being contemplated when they answered to the RFP and we are going to assume the risk of a $12 to $13 million facility, not really sure about the pricing and there is going to be a potential for a loss - that it was suggested that in 5 years it will be renegotiated - the issue is trying to minimize and protect the risks for this community as policy makers and if financing something for 20 and have potential usage for 20 or better and it doesn't seem to be imprudent to ask them to share the risk for the length of the bonds up to $250,000 with that being capped with a CPI, $250,000 10 years from now is not equivalent to what it is going to cost us to operate that place, heat and lights are going to go up, the cost of salaries and benefits go up, and not going to help us and can't support it for 3 to 5 years.
Council Member Gershman stated that the other benefit that accrues to any hotel that locates next to a $13 million water facility is increased room rates and increased occupancy, that water park resorts in the Dells had a combined occupancy rate of 26.9 points higher than other properties, and if calculate that back - it could be a 50-60% more occupancy, occupancy is compared to the rate that others are getting - that is a wonderful benefit to a hotel and wants Canad Inn to come to Grand Forks but to come under an agreement that is fair to the citizens and pay their fair share of this. Council Member Kreun stated they do not have control of this facility and if we decide not to operate that facility, then their benefits are lost - if we don't operate in a proper manner they also lose and they are not going to take all the risk. Council Member Gershman stated we have risk on the other side.
Council Member Glassheim stated the way you get charged for being near a public improvement is through your property taxes and the value of your property - if value of your property goes up, you pay more property tax but because we built the street, the citizens built street on 32nd Avenue South and people locate there and get more of a benefit from that than others who live somewhere else, their business is not water parks, their business is hotels - that he thinks this is hard to follow and understand as legitimate demand upon them - the total we are going to get from them or their clients for the first 3 years is going to be $700-800,000 which is more than what we thought we would be getting - and the water park will be established, rates established and have a track record, etc. and as looking at the numbers very close to breaking even.
Council Member Kerian moved an amendment to the motion for changing the 3 to 5 years to 5 years. Council Member Kreun seconded the motion. Upon roll call the following voted "aye": Council Member Kerian, Kreun - 2; voting "nay": Council Members Christensen, Brooks, Hamerlik, Glassheim, Gershman - 5. Mayor Brown declared the motion to amend failed.
Council Member Hamerlik moved an amendment from 3 to 5 to 10 years. Council Member Kerian seconded the motion. Upon roll call the following voted "aye": Council Member Kerian, Kreun, Hamerlik - 3; voting "nay": Council Members Brooks, Glassheim, Gershman, Christensen - 4. Mayor Brown declared the motion to amend failed.
Upon call for the question of the original motion and upon roll call the following voted "aye": Council Members Kreun, Glassheim, Kerian - 3; voting "nay": Council Members Brooks, Hamerlik, Gershman, Christensen - 4. Mayor Brown declared the motion defeated.
Item 8. Pricing.
Council Member Glassheim stated this item is the pricing item and they discussed the general structure that all people would pay the same admission fee regardless of where they live and whether they are residents, from other hotels, etc. and also announced the policy that the prices for admission will not be one price but will vary depending upon usage, time of day, season of the year, day of the week or essentially by demand, and also to articulate what they believe a high price will be, an average or a low price will be, corresponding to times of high usage, average usage and flow usage; that for adults that the average price would be $10.95 with a high of $14.95, and a low of $6.95; that for children the average price would be $4.95, with a high of $6.95 and a low of $2.95; that children under the age of 3 would be admitted free; and that no decision has been made on exact amount of annual passes or family passes or adult annual passes, give a range of what expect it to be, needs further refinement, and the range being considered - an annual pass for children somewhere between $100 and $120; an annual pass for adults, somewhere between $150-$200; and an annual pass for families, between $300-$500, and moved Item 8 for pricing. Council Member Kerian seconded the motion.
Council Member Brooks stated the average prices are low and can't see that we are going to generate the revenues with the numbers. Council Member Glassheim explained pricing - that he used proportion of local children to adults as the figure and used 30% children and 70% adults, using convention visitors, hotel visitors, college students without children, that he is down on Canad visitors from 102,000 to 52,000 and up on Grand Forks residents from 22,000 to almost 55,000; stating the increase in local residents was that in the years 1999 - 2001 there was an average of 10,000, mostly children, using the slides in 3 months and if multiply by 4 to get 12 months, and take 20,000 from that group using the expanded slides for year round use; and explained how he derived the adult uses - and that one thing these figures left out was $150,000 from net income from programming.
After discussion Council Member Christensen stated he didn't know that this resolution is necessary but better resolution to suggest to the electorate that it has to be priced in such a fashion based upon information we have to date from Mr. Duquette and our consultants which makes it appear that on average on high usage range could be between $8 for children and $15 for adults and on low usage average could be between $4 and 7, and moved that amendment to the motion to change the proposed admission prices - that on higher usage times on weekends, the range would be between $8 and $15. Council Member Gershman seconded the motion. After further discussion Council Members Christensen and Gershman withdrew their amendment to the motion.
Council Member Glassheim stated what he was proposing was that at periods of highest use, it would be about $15 and at periods of low usage about $7 for adults and would be up to management, and the same for children - at period of low usage $3 and high usage at $7, with an average of $5, and that he has distributed the numbers differently from the consultant and is within $200,000 of his bottom line number and $150,000 of that is that he didn't use the income from local programming
Mayor Brown stated that the intent is that it is affordable for families and children.
Mr. Swanson, city attorney, stated he would caution you to look at Item 8 as to whether you left any language that would need one to conclude that there is some elasticity in pricing; and only concern he is pointing out is that it is not clear to him from the first sentence if your rate structure as you have identified in the balance is the elasticity or if that is the preliminary price. Council Member Glassheim stated he wants to tell the public and wanted it very clear that everyone is paying $15and to say this is our intention and over the years can change but wants to make some commitment.
Council Member Christensen asked if they removed the words "this council pledges itself to the following rate structure" and not sure if that was something Mr. Swanson was alluding to so get some flexibility, then would have "..that all people will pay the same admission fee so won't be resident or non-resident and also have prices for admission will vary depending upon usage (times ) and include operational costs, but will be driven by how the public embraces this facility and uses it; and high usage so the citizens know is Friday, Saturday and Sunday, and low usage is Monday, Tuesday, Wednesday and Thursday and children do things on school nights and try to make it available for those that don't have something else committing themselves during the week but on the weekends we have to make it up to pay for it, and moved to remove "this council pledges itself to the following rate structure" and add that the words "prices for admission will vary depending upon usage (time of day, day of the week, and season) and cost of operation." Council Member Glassheim accepted that as a friendly amendment.
Upon call for the question and upon voice vote, the motion carried 6 votes affirmative; Council Member Brooks voted against the motion. Mayor Brown declared the motion carried.
Item 9. Aquatics Center Construction Costs.
Council Member Glassheim stated this item restates that 46,000 sq.ft. will cost no more than $12 million and will be funded from the 1/4 cent sales tax if approved by the voters and depending on interest rates it will cost $960,000/year from the $1.8 million generated by the 1/4 cent sales tax; and moved approval of Item 9; Council Member Kreun seconded the motion. Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
Item 10. Aquatics Center Operating Costs.
Council Member Glassheim stated this item is the aquatics center operating cost and that the consultants have told us that industry averages are between $47 and $50/sq.ft. to operate an aquatics center and note that local calculations show that there were savings on heat and laundry which had been extrapolated from the average and that $47.50 sq.ft. would be a reasonable figure to expect the cost and multiplying that times 46,000 sq.ft. we anticipate that operating costs will be $2.185 million, and moved Item 10 for approval. Council Member Brooks seconded the motion.
Council Member Brooks stated we are dropping the total sq.footage and dropping the cost, that energy costs are volatile, and concerned with lowering the cost per sq. ft. when lowering total sq.footage. Council Member Glassheim stated re. laundry figure that a number of people think we should not be in the laundry business and not providing renting towels; that he spoke with the local EAPC representative who did a thorough review with Xcel of the design and layout of the facility and the averages were given by the consultant as $47 to $50, and with the savings that are anticipated and the $47 to $50 which is the industry range thinks we are okay.
Wayne Dietrich, EAPC, stated they did a study of this facility at the 48,500 sq.ft. and producing calculations of $590,000/year and not linear and their numbers is more like $11.00/sq.ft. for all utilities (except water).
Upon call for the question and upon voice vote, the motion carried 7 votes affirmative.
Item 11. Aquatics Center Annual Income.
Council Member Glassheim stated this item says we are looking at their annual revenue of $2.22 million and lists the various numbers whence this figure was derived, and explains that his figures anticipate close to a break even and then say that as a precaution the City is setting aside $250,000 from existing sales tax reserves and we are also negotiating this agreement with our hotel partner in which they will participate equally with the City up to $250,000 in offsetting operating deficits, and moved approval of Item 11. Council Member Kreun seconded the motion.