Committee Minutes

MINUTES/FINANCE-DEVELOPMENT COMMITTEE
Wednesday, October 6, 2004 - 4:30 p.m. - Room A101_____

Roll call: Christensen, Glassheim, Hamerlik.

Also present were Curt Kreun, Dennis Potter, Brad Gengler, Bob Wood, John Schmisek, Mel Carsen, Al Grasser, Greg Hoover.

1. Tax Exemption policy.
Mel Carsen, city assessor, reported he had been reviewing tax exemptions and policies, that the new business exemption is old and outdated, and clearer guidelines needed on the other exemptions we have available, that he checked with other cities to see if they have policies - Fargo has policy that sets up 7-member committee that reviews policy to see if exemption application might fit criteria in the policy before ap. goes to council - that Fargo does negotiation behind the scenes by way of committee - that he met with John Schmisek, Greg Hoover and Rick Duquette a month ago to propose this ands they liked the concept and so brought to committee to see if concept worth pursuing and what might be wishes of the committee.

Hamerlik asked what they mean by negotiating: Mr. Carsen stated they would negotiate how much exemption they might get (terminology used in the law), and committee asked why would they do that. Mr. Carsen stated the criteria we have allows for a full 5-year exemption on new business and our policy is usually a step down - 100-80-60-40-20% and that we have adopted some at declining steps for period of years, etc. and in that law there is a payment in lieu of taxes and can run as long as 20 years and council may want to use that from time to time. Committee didn't like the word negotiation - very subjective and comes to high level of criticism and scrutiny. Carsen noted that in the Fargo policy they have 10-point criteria, i.e., size of project, level of salaries, number of employees. Carsen noted that our policy is for primary sector businesses - doesn't apply to retail businesses. Fargo's policy covers all exemptions - that the new home exemption for the affordable housing district is tied to the LMI level and there is no provision to raise that - somebody should from time to time increase that along with indicator - that after Gowan Construction application was turned down by the City, they went to the County and received an exemption.

Bob Wood, County Tax Office, was at today's meeting and stated he was directed to come up with some kind of policy or criteria for the County.

Mr. Schmisek asked whether committee wanted staff to continue to pursue change from our policy as it is rather old and this seems like good policy (Fargo) and sets some criteria and also sets some that we may not want to have in there but establish other criteria and rather than negotiation have something fore formal - likes point of calculation that says it’s the type of business that council wants in - whether primary sector, mfg., higher wage - and that need to tie this together with the Growth Fund because if someone is going to the Growth Fund getting a loan and then coming here and asking for tax exemption - want to combine so don't get into both.

Greg Hoover stated he thought they would want to consider having the same definition for primary business - different in current policy then what is in Growth Fund policy - some confusion and would like to have those compliment each other. Hamerlik stated he would like to look at it for updating purposes and than determine if the staff has some changes to make it better - should keep updated all the time.

Glassheim asked what are problems with our current policy. Carsen stated that the definition of primary sector conflicts with primary sector term in Growth Fund - and they can change that. He stated it is somewhat cumbersome - that when Gowan's came forward and told them what was available and that it is up to the city council whether they want to approve it or not, and then discussed on the council floor, and that there might be a better way - if had a point system, Gowan's probably wouldn't even have had an application because they wouldn't have met the threshold , Glassheim stated in the past staff has been doing the negotiating - reason not approving Gowan's was that it was competitive and wasn't primary sector and taking them from someplace else to bring them here - that caution signs should have come up. He stated if have point system not sure much negotiating - staff usually knows what policies are and can convey that to people.

Hamerlik stated that if pull out our specific policy, staff reviews it and makes some suggestions, whether points or update, and take a look at it. Christensen stated that the Growth Fund is going through review of its policy and should continue the process, not sure that he is in favor of another commission doing this because presented as part of a Growth Fund application but part of package they recommend to the council. Carsen stated they address an addition and if addition becomes large part of a remodeling project, should that be included in the exemption.

Hamerlik stated he would like to stay away from "negotiation", but have guidelines or points. Carsen stated law does but not sure if use it in Fargo's policy.

Glassheim stated Fargo has gathered them all exemptions in one place and have listing of CDBG, low income and all incentives available are in one place - and asked if commission goes through CD incentive guidelines or Renaissance zone, home buying incentives. Carsen stated that the membership is made up of the mayor, a commissioner, city administrator, city attorney, 2 reps. from business and city auditor in Fargo. School Dist. sits on as non-voting members because they will be impacted. Glassheim stated should let staff go through it again and make a proposal.

Kreun stated that this is the entry level application and gets in the door or don't waste our time, and if have number of points to meet the criteria then start whether negotiate a 5-year tax exemption with declining balance, etc. - that is what negotiating with the committee, staff would sit down and make check-list and then work with committee and negotiate. Appeals could come before council.

Carsen stated he is looking for policy when talking to prospective new or expanding business, has criteria where can tell them yes or no that qualify or not - that council can adopt any part of this policy.

Bob Wood stated he and Mel discussed this thoroughly and visited with city assessor in Fargo, and commission stated County needs to have a system compatible with the City, and his Board asked him to look at a system and to poll every city and county in ND to see if anyone had system like Fargo, no one else does and his Board is looking and waiting to see what the City does because they want to develop some type of criteria. Kreun stated it would be good to have Bob involved when put together staff to look at this so write one policy between the County and the City and have him at all staff meeting. Committee agreed.

Glassheim stated he would hope that the criteria would speak to compete locally, primary business or not, tourism, wages, size of building and don't steal from trade area. - that once staff has negotiated with applicant, hard for us to say no , and if want declining exemption and if prefer that, who and when is decision made - can committee deviate from general policy statement - Fargo policy gives flexibility - Schmisek stated that general guidelines and staff would not promise anything but run by people as to their thoughts or pursue that or give them the standard or general guidelines as to what prefer to have happen.

Hamerlik moved that we request staff, headed by Mel Carsen with appropriate people, to review our current policy and bring back any suggested changes to this committee and committee review to council. . Carsen said for new or expanded business exemption. - review our existing policy with Fargo policy. Glassheim seconded motion.

Mel stated they would plug their exemptions into this policy and may or may not include 7-member committee. - Committee stated they have Carsen, Schmisek, Hoover - and any political change could be made by this committee if see there should be a change in the policy, that proposed change would be brought back to this committee. Motion carried.

2. Planning and Zoning Overview.

Christensen stated that at the Legislative Committee meeting they discussed changing the state law and section in the Municipal Planning Ordinance, Municipal Master Plans, NDCC 40-48 where there seems to be some overlap as to purpose of planning and zoning commission and what originally set up for and how morphed into super zoning body - that in section 40-48-20 it says - "…before exercising the powers referred to in this chapter, the planning commission shall adopt general regulations governing the subdivision of land within its jurisdiction to provide…" and operative word is "shall" - general regulations to provide for the proper arrangement of streets in relation to other existing and planned streets and to the master plan.." and reason for Municipal Master Plan was to lay out streets, plazas, parks, open spaces, etc. an overview of city, and this statute was amended in 1943 and in 2001 but apparently the planning commission now have the power for adequate and convenient open spaces for traffic utilities, access of fire fighting apparatus, recreation, light and for the avoidance of congestion and for easements for set back lines for public utility lines, and this probably gives Planning the authority but authority that they have to look at every plat that comes in and every amendment to every plat, that they are thinking the word "shall" should be changed to "may" and if do that, then they no longer have to do all of that and can get into more expeditious fashion so that the planning commission always has this overview of how the city is laid out, how the streets are laid out and corridors, etc. but once the planning commission has laid out this overview and once have this municipal master plan then as things are brought in, PUD's , and brought in for areas planned for residential, after that then it falls back to staff of planning and engineering and they can work within the parameters of your rules and regulations, so expedite the procedure and have fewer meetings but great degree of oversight and if something done that someone didn't like, there would be an appeal, not sure whether to Planning Commission or city council not sure it matters, and pointed those things out to the legislative committee, and that will require more of a review of the State's stature than articulated, and that is what those at legislative committee (Kreun, Gershman Haga and Hamerlik) discussed. He stated to get it moving through city level, that is what bringing up now. and that he was going to have one of his clerks give him a review of the legislative history of NDCC legislative proceedings in 1943 and 2001 and get that to them within a week so they know what the legislative committee had, what testimony was at the hearings so can see what the reasons were for some of these statutes. There is also some issue about how go about implementing this change, and Mr. Swanson had stated we have Home Rule Charter and have a lot of things in place that we didn't have when these statutes were put in, and in our Home Rule Charter we have the power to do planning and zoning and regulation of what goes on inside your city and not sure there isn't the ability to do this with Home Rule Charter if we just change a few words from "shall" to "may", and that is a brief overview of what he was thinking and why he has been pursuing this - and to move the process and get it back in the hands of the professionals.

Hamerlik stated that the change of "shall" to "may" may do it, but another way of doing that is to grant an exception for certain Home Rule cities that they not have to follow the letter of the law so to speak. Glassheim stated it may be easier to do that because it would affect everybody when change from "shall" to "may" and undermine planning and zoning in every town in the state. Christensen stated that planning commissions could in cities of 25,000 population because only 4 cities that have extra-territorial jurisdiction now, and have different ways of doing this, or make population change. Christensen stated they could begin to review the statute from Municipal Master Plan to see where word "zoning" appear or some changes to get ideas within next 10 days and get to legislators and League of Cities and introduce bill or minor changes so won't cause a lot of problems state-wide. It was noted that Pete Haga will be working with some of the other cities so that they come on board.

Christensen stated he would want the Commission to always be able to lay out the area of the community as they have been doing the master plan and this calls for master street plans so have some order before had professional staff in 1943, and should always have that.

Potter stated to try to move the process faster. Christensen stated he understands that process is important but understands that you can impede the process with the hearings that we have, it's not to set up in state statute but give cities ability to streamline their process in areas they would like to streamline. Glassheim stated there should be some things which cannot be streamlined to provide for protection, and trying to get sense - that we have gone to fast track - Potter stated we have gone to fast track on platting because we don't need to do the ordinance and hearing process you have with the ordinance, and it is back to 1998 where site plans and detailed development plans had to go through the planning commission and that was changed by the council and now site plans and detailed development plans are signed off at the staff level and those are good examples of how streamline because the policy is set by the council, and that they want to see these types of uses in this area and once the PUD is put in place which details what goes where, after that the actual layout and setbacks and where the building goes, etc fall to staff. Christensen stated you don't need every change to be in the form of an ordinance, that the master ordinance doesn't require that all of those things be amended to the planning ordinance, that everything under ordinance and publication. Kreun asked why have an ordinance prior to it being filed. Grasser stated what have to watch is the public hearing, that's getting publications in and holding official public hearing is what takes lot of time, publication periods and another key feature to look at and shorten that up.

Hamerlik excused

Christensen stated one of the ways to shorten that up is to expand the notice, the area affected, rather than 200 or 300 feet but even anyone even remotely touched so expand whom you give the notice so they know it's coming.

Brad Gengler, planning office, stated that the public hearing notice and notifications to the Herald, have certain things they do in planning and zoning that requires one hearing to the Herald 10 days prior to the public hearing at P & Z, send to council and another advertising period prior to final decision and that is called out in the Century Code and that is waiting game and ties our hands. Christensen asked Brad to explain that in a Memo and could ask legislators to reduce that notice under Home Rule and what really requires the notice. Grasser stated some of that would go away if got rid of the ordinance aspect.
Christensen noted that the statute before 40-48 (40-47) is what was in place before had Municipal Planning, and that cities were always in charge of zoning and if issue on zoning, there was a Board of Adjustments and Board listened and if ruled against it, there was appeal back to the council and that Board of Adjustments could be standing board - Grasser stated that there is a Board of Adjustments and may or may not be the same one, re. Code issues. Christensen says the state statue says the Board of Adjustments on zoning and allows changes in zoning; and that these laws except the 2001 amendments are 60 years old.

Glassheim asked for 6 major categories of the kinds of things Planning does - PUD, zoning, and if there are major categories of what planning deals with that have different degrees for need for protection or precaution. Mr. Potter stated they would include that.

Christensen asked Brad for state law statutes, citations dealing with required publications because changing an ordinance and asked how they got to where all of these things have to be in ordinance form. Brad stated it would probably appear that this shall be done by ordinance.

Christensen stated MPO has big directive, new urbanism, where at national level running out of land, quit expanding and there is $150,000 we will get for the next two years to review all our planning and zoning and processes with the ideal to implement new urbanism, and also get between $50 and $80,000 to study our corridors and this is good opportunity for the study but because legislature meets every 2 years if get some flexibility in the State Code where choose to exercise the discretion. Glassheim stated under new rules could have new urbanism and don't need to change state law to get new urbanism, just take couple months to make sure and done properly. Brad stated with new urbanism, to accomplish the physical layout, just change setbacks in zoning code.

Christensen stated the statue governing regulation of land says that the planning commission is to adopt general regulations governing the subdivision of land within its jurisdiction to provide for an adequate arrangement of streets, etc. and general regulations - but doesn't say if has to oversee every one -

Grasser stated if he starts rating things in priority of preferences of how want to proceed to make your proposals successful, bottom of list would be having member of the minority party introduce it on their own; better strategy is somebody from majority party introduce changes, next above that to have someone from both minority and majority party co-sign and even about that be if minority or majority party members from different communities and threw out as bit of info. and helps. Glassheim stated he would concur, and next level up would be to have the League of Cities on board.

Christensen asked for information from 3 cities - to get Planning and Zoning regulations from Bismarck, Minot and Fargo, and get copies to committee and staff so work on this together, and if something to get to the League of Cities along with our reps. from our community from each party.

3. Adjournment.

The meeting adjourned at 6:50 p.m.

Alice Fontaine
City Clerk