Council Minutes

Minutes of Grand Forks City Council/Committee of the Whole
Monday, March 24, 2008 - 5:30 p.m._________________ __

The City Council met as the Committee of the Whole in special meeting on Monday, March 24, 2008 at 5:30 p.m. in the Council Chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Hutchison, McNamara, Glassheim, Gershman, Bakken, Kreun - 6.

Mayor Brown commented on various items during the past week and upcoming events:
He reported there was a tragic fire this past weekend in our city that resulted in the loss of a home and the loss of one of our citizens, a fund has been set up and donations can be sent or delivered to the Riverfork Federal Credit Union - our thoughts and prayers are with the family.
The 5th Annual Easter Egg Hunt at the Alerus was held, there were over 20,000 eggs and thanks to the Alerus Center and the sponsors who made this possible.
Today we officially welcomed the new company, Laser Lift Corporation that is coming to town and partnering with UND Engineering on some ground breaking technologies, thanks to Senator Dorgan for his leadership and vision that brings these opportunities to our region, also to the EDC staff and thanks to President Gershman who was there today working with these groups.
This weekend is the Annual Home Show at the Alerus, including displays from Building Inspections from the City and Green3 Grand Forks Committee with information and give aways that will help save money and operate your home efficiently.
He reminded everyone that this weekend is the Scouting for Food Drive by Boy Scouts and Girl Scouts, look for the door hangers and get non-perishable items ready.

COUNCIL MEMBER CHRISTENSEN REPORTED PRESENT

2.1 Conversion of Altru Health System bonds, Series 2005, to fixed mode.
There were no comments.

2.2 Bids for sale of Turtle River Township land.
Todd Feland, director of public works, reported that the City purchased this property in 1998, 760 acres, and the appraised value of that property was $695.00/acre and the City paid approx. $705.00/an acre. He noted that this is not prime farmland and suffers from some challenges to farm; and noted that the bids received give the City a return on their investment.
The City paid approx. $535,000 for the property in 1998 and return is approx. $52,000.

Mel Carsen, city assessor, stated copies of a report had been given to council members showing the 3 subject properties on which they have received bids, that he did an analysis based on total acreage and also cropland acreage. The biggest definer of value will be what is called productivity index (PI) - this is an index that is assigned to every piece of farmland in the nation by USDA based on type of soil and the amount of saline and is done by county. He stated in Grand Forks County 100 being the highest and 1 lowest; and the subject land in Section 18 carries an Index of 56, mid-range, and other properties in Section 19 have a 50+or- and a 45+- because USDA put one number on the entire section because it had single ownership and that is 47, the southern part of that Section is lesser index than the northern half, and the cost per acre based on the bids: Property #1 is $1,140.46/acre; Property #2 is $679.49/acre and Property #3 is $730.63/acre. He also viewed a map showing the subject property and 5 comparable sales around the property. He stated he is not a farmland appraiser but received quick course on farmland appraising from people he trusts and found that the western most part of Turtle River Township is the poorest land in the township and carries a rating between 47 and 56, and going east the productivity index increases dramatically to 82, and pending sales on this property is all higher than that, and his quick analysis would say that these bids are good bids and in his opinion should be accepted.

Gershman stated that the productivity index does not take into account the commodity prices. Mr. Carsen stated it is the potential to grow a crop and doesn't take into consideration the commodity prices at any given time; that the PI is based on 1 to 100 based on a wheat crop in that county so the price of wheat is not measured; that he talked to trusted people in the field and they stated that farmland of this nature/quality has probably increased about 30% in the last 6 months; other land or good land near Forest River or Grafton selling for $4,000/acre and has productivity rating of 95 or 98 and that land has probably increased more than land of this quality.

Council Member Christensen asked how the property was advertised for sale. Mr. Swanson reported they did not use a legal notice in the sale, but an advertisement in the Herald that ran once a week for 2 weeks (box ad) and also some farm brokers that contacted his office and received packets. It was noted that the bidders are currently farming in the area; and that Mr. Adams has been renting the land from the City for the past several years.

There was some discussion as to the rental of the land - and perhaps continuing to rent the property. Mr. Feland stated it is a cash flow and they are going to look at a lot of new investments in citing a new landfill, cash flow is from the Sanitation Enterprise Fund, and that they are going to take a short term loan from the Water Enterprise Fund as they proceed as interim financing and at some point look to buy a new piece of land in Section13 of Rye Twp. and doesn't think it is a deal breaker if they would wait and not sell it. Mr. Gershman stated with commodity prices and yields can't control but commodity prices seem like they will be there for awhile and see what get for renting it.

Mr. Feland stated the property is not being rented because considering selling it and didn't enter into a contract to rent this year; Mr. Adams rented all the property prior to this. Christensen stated they don't get into the ground until after the 15th of April which would be earliest, and doesn't think this has to be done tonight, and could go back to Mr. Adams to see if he wants to rent it in the meantime and then make a decision next Monday and if could rent it for one more year and may want to consider that.

Council Member Hutchison stated he would like to know what rental price was last year and whether Mr. Adams would want to rent it again, and what typical price is. Mr. Feland stated Alerus Financial is assisting us in renting this land but we received about $25,000 for the whole area to rent it out; and the way land prices have gone, think would need to renegotiate that if rent this again. Last month they received authorization to dispose of the property and that is reason not renting property.

Mr. Bakken stated he would vote to sell the property, that we have had enough issues in Turtle River Twp. and don't need to be a land renter up there, and price of land appears to be fair, might wait and get more, but might wait and get less; that according to Kiplinger wheat commodity prices are going to go down, need to sell it and move on, and use money for the new landfill.

Council Member Christensen stated he would like a little more information that validates the decision; and Mr. Feland suggested that if want committee meeting prior to the next council meeting, could do additional analysis and provide something to the finance committee for review. Mr. Swanson stated his recollection is that bids are good for 30 days from the date of the bid opening, bid opening was March 18; and advised that his recommendation is that when call the special council meeting, that simply move to table it until a date certain or report to committee.

2.3 Applications for exemption of remodeling improvements to residential/
commercial buildings at various locations._________________________
There were no comments.

2.4 Create special assessment district for Project No. 6123, Dist. No. 636, paving and street lights on 40th Ave.S. (S. Washington St. to Clearview Dr.)______________
There were no comments.

2.5 Plans and specifications for Project No. 6152, Dist. No. 632, paving for 4200-4400 blocks of 16th Avenue N. and 16th Avenue N. Circle_________________________
There were no comments.

2.6 Plans and specifications for Project No. 6244, Dist. No. 633, paving and street lighting for McEnroe's 1st Addn. (Garden View Dr.)_____________________
There were no comments.

2.7 Bids for construction of Project No. 6212, 2008 Concrete Street Repairs.
There were no comments.

2.8 Bids for construction of Project No. 6213, 2008 Asphalt Street Repairs.
There were no comments.

2.9 Preliminary Engineering Services Agreement for Project No. 6271, Federal Project SU-6-986(083)087, N. 51st Street Reconstruction.______________________________
Council Member Gershman questioned funding for the project as the staff report states
funding of the construction of this project and eligible engineering services will be funded by 20% assessment and 80% federal and next bullet point says the work on this agreement is not eligible for federal funding and will be 100% City funding from Fund 2169 Infrastructure.

Mark Walker explained how the funding works with the Dept. of Transp., that the funding isn't locked in until we decide exactly how much funding we need - we have to evaluate the project to determine what the costs are, and one of the problems in identifying the funding too early and we don't identify an adequate amount, that we have to fund the shortfall with City funds anyway, and if we identify that we need too much funding and don't use it, then it stays with the DOT. The way we have been handling these DOT projects is that we've entered into agreements with consulting firms to do the project concept report that identifies the project needs to determine different options for constructing the project, that once that has been identified then lock in our funding with the DOT; that as far as the construction of the project it is federally funded with 80% funds and 20% City, but as far as the evaluation work in the beginning that we need to do, that is not eligible until we lock in the funds and because we have not locked in the funds because we don't know what our expenses are going to be, that portion of the work is not eligible.

2.10 Preliminary Engineering Services Agreement for Project No. 6272, Federal Project SU-6-986(084)088, Cherry Street Reconstruction._____________________________
There were no comments.

2.11 Sole source purchase request - police department.
There were no comments.

2.12 Public Works Department - Street Div. tandem truck, box and hoist bids.
There were no comments.
2.13 Public Works/Engineering/Inspections Depts. fleet vehicle bids.
There were no comments.

2.14 2007 Consolidated Annual Performance Evaluation Report (CAPER).
Council Member Gershman stated he thinks we need to put a little more in the paragraph under project listing, that we do have private corporate donations of $175,000, the City contributes money as does the County - and that a few of those things should be included because it shows the private sector contributing $175,000, which is significant. Mr. Hoover agreed to include that info.

3 INFORMATION ITEMS

3.1 2007 Annual Storm Water Report.
Information only.

MAYOR AND COUNCIL MEMBER COMMENTS

1) Council Member Kreun stated the Housing Authority has two booths at the Home Design/ Garden Show, and would like people to stop in and look at entry level housing and to look at other programs and services that we have taking place there, and that this is just 1 of 34 events that have taken place at the Alerus Center this month.

2) Council Member Gershman stated there was an event this afternoon at 4:00 p.m., a reception by Economic Development Corporation for Laser Lift, the new company that is locating in Grand Forks with some very high tech jobs, starting out in the React Building, to which the City contributed $500,000 - very important jobs and Mayor did good job at press conference.

ADJOURN

It was moved by Council Member Bakken and seconded by Council Member McNamara to adjourn. Carried 7 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor