Committee Minutes

Minutes of the Grand Forks City Council/Finance-Development
Standby Committee Wednesday, October 3, 2007 - 12:00 Noon___

The Finance/Development Standby Committee met on Wednesday, October 3, 2007 at 12:00 noon in Room 101 in City Hall with Chairman Christensen presiding. Present at roll call:
Christensen, Brooks, Glassheim.

Also present were Terry Hansen, Greg Hoover, Peggy Kuntz, Meredith Richards, Al Grasser, John Schmisek, Rick Duquette, Chief O'Neill, Candi Stjern, Saroj Jerath, Maureen Storstad, Chief Packet, Don Shields, Hazel Sletten, Todd Feland, and Reps. of CDBG Bricks & Mortar Comm.

1. 2008 CDBG/HOME "Bricks and Mortar" Funding.
Greg Hoover, director of Urban Development, reported that city council directed and used the CAC (Citizens Advisory Committee) on the Bricks & Mortar and rated and ranked projects; staff has reviewed those and tried to follow those and allocate funds to the projects in rank order using either CDBG or HOME or combination thereof. This year deviated after the third recommendation to one for the Mission and rationale is that they want to make sure that the people that are staying at the Mission have a safe environment in which to reside and have looked at their application and come up with the health safety activities that are there; that there is a need to provide additional space but want to make sure that the people who are there now have warm bodies should unfortunate event of a fire happen; that the City has put in lot of investment in that property and only prudent that the City fund the fire/safety issues.

Meredith Richards, Urban Development, reported the staff report lays out the details of the applications that were received, that initially had 8 and 1 applicant withdrew leaving them with 7 applications totaling approx. $850,000 of requests, and staff report shows the rankings that came out of the CAC process, their process involves applicant testimony, that each applicant has to receive at least 60% yes votes for further consideration and moving onto ranking. At the yes/no vote the Mission fell out which left 6 applications and those are shown in the staff report in the priority order based on CAC ranking. The funding requests exceed the funds available, CDBG funds were after council's action on the 17th to earmark the pedestrian underpass, reduce the CDBG money available for competitive process to $127,200. She stated we have about $265,000 in HOME funds available for competitive process based on what we believe we will have as carry-over at the end of the year what they anticipate receiving in '08 funds, and have standby programs that they know they need to fund with American Dream and Affordable Infill. She stated in terms of projects staff report shows line item description and short paragraph on each project, and would like to move into the staff's funding recommendations.

The CAC ranks based on what they feel is the highest priority and staff approach is that highest priority item be fully funded and proceed in that manner until run out of money. Habitat for Humanity requested $25,000 and typically fund them with HOME funds because they request money for new construction, CDBG won't work for that; and they still have HOME funds that were allocated last year; and need to find them some lots and are recommending no funding this year but expect them to come back next year. The Mission or Shelter for Homeless was not ranked but are recommending funding them in the amount of $73,700 which is the balance of CDBG funding that is left, and staff report shows what their fire/safety needs are, and application submitted included $51,000 for fire doors but the balance of the $160,000 request was creating additional dormitory space, and that they think it is a top priority to fund fire safety and Code items first, and felt that this was a wise choice with prioritized fire safety improvement and also recommending establishing a second tier if additional programs income should become available and earmark that towards the Mission completing their entire fire safety.

Chair Christensen asked if the City did the fire safety for the Mission, would they find the rest of the money themselves. Ms. Richards stated they did a 5-year CIP at the request of Finance/Development and council and have completed that, and now they have another 5-year CIP and a big part of that is the fire safety, and that their next 5-year budget is approx. $350,000 and that they are not going to ask for that in CDBG but we have $221,000 of fire safety issues and that is big part of what they are looking at as their capital needs for the future. She stated is our recommendation to do everything we can to get those fire safety addressed with CDBG funds, whether this year and a little bit of next year or what it takes to get those done. Mr. Hoover stated that what they are also recommending is that if the committee agrees with the recommendation of $73,700 you subtract that from the $221,000 request and have a balance of $47,300 and we would ask you to make that a first priority of the second tier should get additional program income above and beyond what we expect to get in a year so can do that sooner than later.

Ms. Richards reported American Dream has been funded at approx. same level since 2002, HomeCents Program is the revolving low to moderate income home ownership rehab. program that is operated by Red River Valley Community Action Agency, the arrangement was that they would receive approx. $1.5 million over 3 years and that this is the third year of that commitment. Nobody said it would end after 3 years but that was the initial goal was to get a large enough pot of money so that there would be something to revolve; the payback is not such that we would have a revolving pot anywhere near $500,000 by next year and would anticipate that they will be coming back for additional funds. Christensen stated that if this stays the same in the future would have $300,000, and Mr. Hoover stated that he would expect that staff would not recommend if HomeCents comes back a half million dollars, something significantly below that. (HomeCents is the rehab program that is in the near northside and the low mod areas; home ownership rehab and run by Red River Comm. Action). Owner-occupied 2% loan with a max of $25,000. American Dream is a first time home buyer down payment and closing cost principal buydown; that CDBG portion is a grant and lot of Home programs are recaptured because if they stay in the home 10 years it is fully forgiven but hardly anybody does stay in a home 10 years so get a portion of that back. Hoover stated that in the near northside expect to do as in the Promenade where it is American Dream plus where you can get up to $15,000 as opposed to the regular $75,000 for down payment for home purchases.

A representative of Habitat for Humanity stated that the funds that they have not utilized this year that have been allocated and have been waiting for some lots that may be coming available, and timetable for that availability is going to be sometime mid or late winter; since they became aware of the timetable they have proceeded to begin initial arrangements for acquiring a lot out in the Promenade area off N. 55th Street, looking at potential of putting a duplex up and was checking on what kind of design can fit on those lots, and will be beginning construction as soon as can get details put together and get foundation put in, try to get framed in the wintertime if weather is good or leave until spring. He stated their plan is a little more progressive as maturing as an organization and looking at completing 4 housing units in the coming year, this year in the process of completing 3, and the $25,000 they have requested would be very helpful as they look ahead to the fills that they are going to be doing next year, and without it will slow them down in meeting goals and providing the kind of family housing that is still a necessity in the community and is not being met.

Dave Senna, Grand Forks Mission, stated he has been with the Mission for about 5 years, that the fire safety issue is part of the new addition (has fire sprinklers) and piping was put in the stairwells so there was preparation for future fire sprinkler systems. One of the priorities for the new addition was handicapped accessibility so that when had people who were handicapped could get into the upper floors because elevator they had at that time was decrepit and aging and needed to be replaced and a big portion of that project was the elevator, that the Mission put in close to half a million dollars in expanding that project to be a dining room, etc. where took note out in preparation of trying to create some funding opportunities down the line. One of the things that has hurt them over the past 4-5 years is that they have seen the number of people coming to the Mission increase and operational expenses have increased dramatically from where were 5 years ago - increased by $300-400,000 each year and are having to raise on top of operational budget capital expenditures and have invested themselves by $80,000 to help renovate our funding programs, etc. and going out to different counties - approached 21 county officials to help out with this particular project, but takes lot of time to do that - have seen increases in funding privately for the Mission but lot of that has gone to doing operation of the building, and have provided for funding but not to capital improvements because trying to help people coming and have increased from 40 people night to 80 to 90 people night and have seen double in the amount of services providing to the community and incurring those costs has been tremendous. He noted they have had about $20,000 in landscaping that has been done through private donations and a lot of things going on at the Mission. He stated big issue re. fire safety is to get fire doors and that was primary part of request realizing that fire sprinkler systems are at cost of $140,000 and their concern as have seen an increase in dorm space increased and crowded in those facilities, don't want people outside in the cold and are committed to make sure there is nobody outside.

Mr. Hoover stated that whatever amount you assign to this project, if you do, is that then make the balance a priority for a second tier of projects should they get program income; that the removal of old elevator is est. at $30,000 and they would try to do those things in rank order of importance. Christensen stated that at some point in time they (The Mission) should be on their own and also see CVIC and the Mayor's budget for $75,000 to assist them in their community activities, and they are looking for money to fix up their building, and sees few other applicants that probably are as desiring as not, that we have a limited amount of money, undertook your organization for $1.5 million, but have to help the rest of them; that at some point in time you have a building, increased occupancy but somewhere along the line the community has got to step up a little bit on this or the smaller towns that don't have anybody helping and you are taking their people off their streets and putting in the Mission - is in favor of fire doors, etc.

Glassheim stated he has not been a fan of the underpass funding even though it is in his ward, and questioned the need for it, whether some portions are more important that others. Al Grasser, city engineer, stated the improvements at the pedestrian underpass that was installed with the original street construction in the mid-80's, there are pieces as lot of frost action that occurs, lighting and looking at replacing number of lights which includes base, rewiring, and movement in the concrete (sidewalks) in that area that has to be redone, also includes the lights in the underpass and includes some of the panels.

Glassheim moved that we restore Habitat for Humanity's $25,000, to be taken from either American Dream or HomeCents as staff prefers, and that we accept the Shelter for the Homeless amount and establish a second tier for additional funds that would go to the Mission. Brooks seconded the motion. Motion carried.

4, Other:
a) Assessment methods

Rick Duquette, city administrator, reported that there were some questions for the city council related to having discussion on the assessment process, that he, Mr. Christensen and Mr. Schmisek had discussions about how it is best to handle that, on October 15 they will have a presentation by Mel Carsen, city assessor, about how assessing does work and a primer about assessments process, and is going to recommend if there are her questions or analysis, bring that back to your committee for further work.

b) Pay for Performance
Mr. Duquette stated normally they a wage study PFP study for approval sometime in November and that they will run a primer about the PFP, wage study and that it has been about 4 years and important to see how it is going and see if there are some other ideas, doesn't have a specific date for that but in November prior to your seeing it for approval, and recommend that if there is further analysis and questions, bring back to this committee.

Brooks stated that when they look at the Pay for Performance, could they also look at longevity separately and rolling that longevity into their pay, and working that out of the system; and is something to look at.

Christensen stated that he would like to see is that when get a 3% increase, that 3% of $40,000 less than 3% of $100,000, and asked why have 3% of everybody's across the board as opposed to how much money they have, and what is a reasonable salary range for mid-management and rank and file. He knew how they developed this but not too sure what they did afterwards, in checking on salary ranges, etc.; know that we are competing to get these peoples but don't advertise for chief of police or fire chief, etc. very often but pay to stay in as opposed to going to market to find someone else - but when we have an opening how many people apply for the rank and file jobs. Daryl Hovland, Human Resources, stated they would put that info together.

2. Six-Year Capital Improvements Program.
Chair Christensen asked for the source of money that is going to come out of the General Fund for capital improvements and asked that this be put on the agenda because of conversation they had about fire trucks, and what is in the capital improvements for 2008 that we know we are going to be buying as opposed to what is being paid for rolled out someday for aerial truck in 2020, what do departments have that they are funding for that isn't projected in the 6-year CIP. Mr. Schmisek stated that is generally the equipment replacement, see CIP summary by project type and equipment replacement - General Fund Equipment and lists off the various types of equipment by engineering department, Inspections department, health department, etc. and if look at each of those - engineering department that is a reserve for future capital replacement and that is set-aside money, once bought something for cash, and now paying depreciation on it so don't have to come up with that lump sum 7 years from now, same thing in Inspections putting $5400 line item, and in Health Dept. $3500 line item; fire department, $32,000 set aside annually, police department basically rolls their vehicles over on a consistent basis so don't do a reserve for them. Street Dept. - the way they work those is that in the Hwy. Users Fund had $400,000 set aside to buy street department equipment and weaned ourselves off that money so that money is now more available for projects; and have set up a dollar amount on an on-going basis for the street department, $400,000 they can replace on a consistent basis for equipment; some years as in '08 they actually come in at $360,000, and hold the $40,000, and as move to the next year $385,000, so set up a $15,000; and next year drop $15,000 out the reserve. He stated they have changed the whole format on the CIP and gives you better information.

Glassheim stated after 5 years there will be about $2 million worth of cash reserves that will be targeted for specific items. Mr. Schmisek stated what they will do after this year, not only see this kind of a detail but if wish to by department can show you the vehicle number, year purchased and its time of replacement. He stated that there is other equipment that is added, and that the summary listing by the funding source and that at the top of water treatment plant, have talked about the reserve amount that is in there, and what now see how they are doing the major water treatment plant project plant rehab, the pilot testing that has to go on from the new treatment process and under each of those one of the revenue sources is reserve, and if track that out you will find that we use is reserve over the next 5 years to fund all of that preliminary stuff that is predesigned to the tune of about $8.5 million, and that uses that to get us to the point of where we will probably be seriously constructing the treatment plant, that is based on paying back what they have to, where gave money to the Alerus to buy land, and that will be paid back by '09 into this fund so we have that money to make those major costs to get to the point of construction, and then there will be some really major decisions made about bonding, etc.

Todd Feland, supt. of public works, stated they will be bringing report in 2013, that they are beginning the long term alternative discussion that was approved, and study will come back in about a year that will provide some guidance on what to do in the future and perhaps have projection of timeframe in which to do that, whether 2015 or 2020; and in the meantime will be doing those $2 million worth of renovations to the existing facility using reserve funds. He stated that if the decision in 2009 is that it looks like we need to build a facility, whether renovated or new, would then get into engineering in 2010-2011 and start spending down those reserves, but if don't go to that process, keep those in reserve but will have to be refined when get report back. For something new or renovated probably be between $15 and $100 million. - no major decisions before year or so.

3. Funding of South 48th Street and Industrial Park expansion.
Al Grasser, city engineer, presented draft outlining some of the basic cost assumptions, cost estimates that went into the 48th Street project, that the report identifies estimated cost at this time, identifies potential funding sources between DOT, in urban program have $7 million identified in federal funds through 2010; and report shows what potential special assessments districts may look like and/or tapping fee areas, a lot of that is unknown at this time because it depends upon what lands they may acquire and what lands they may annex.

Christensen stated the reason he asked for this is because the City's share of this project would be approx. how much - total bill is $11 million; and there is an engineering study to build a road there. Mr. Grasser stated there is a project concept report that will not cover all of it, that report is going to be the first step in being able to identify and acquire federal funds, have it programmed but have to go through the report to find out what the State and the feds criteria are and we start to identify what we qualify for federal funds, and in this document made a number of assumptions esp. on storm sewer of what the federal participation rate may be hoping to identify that; that when first started were going to make a strong emphasis on how to do advanced funding because at one time tried to get this project into 2008 or 2009, and his latest information is backing off of that and into 2010 - the advanced funding issue on the constructions side may go away but may still want to consider for land acquisition - and if want to build in 2010 better have land acquired by '09; need to have study and need our act together in 2008. Hoover stated that we have willing sellers out there at what we believe is an acceptable price. Christensen stated that we need to know source of that money but have spread sheet from Schmisek and he suggested selling bonds, $2.5 million about every 5 years, and source of that 2163 money was first sell bonds for $2.5 million with $250,000 and next 5 years sell another for $250,000, etc. and when looking at the spread sheet - not very much money left to do economic development, that now rolling $500,000 from 2163 into JDA but once we start to spending that down to pay for land, don't have any money to do anything - Schmisek stated that it will not allow us to do any more than that $500,000/year. Christensen stated that in presentation need to do sprinkler system, $300,000, and if going to continue with this project in that area and spending that kind of money, are we going to take ourselves out of the economic development, don't have any money to develop. Schmisek stated that even if had money to develop, don't have land. Christensen stated do we go into the Amazon area because received a report yesterday about a lift station out there for $150,000 and if did that, have to decide whether we are going to pursue this project in that area, or if going to pursue a project on land we already have, then have policy decision - need to have pros and cons before too far down. Grasser stated we end up with a similar situation with our federal aid money, have $100 million on improvements we should make, and then start to look where spend the extra money in the next 20 years. He stated a critical piece of this document is going to be the PCR so find out what issues we are going to have, how we can access some of the funding issues, critical component to look at - we are gaining information on this project as we go - we put it together in the TIP last winter, and another round of TIP will be coming to you the end of October and will have to reaffirm 48th Street on that process - but as gather information it has some brief discussion with John as we will need to look at it once we have more information, going right direction, but from information he has we haven't substituted anything for this, still makes sense - it grows the Industrial Park to the south and is a big chunk of dollars so we need to spend it in the right spot.

Brooks stated he thinks the issues is that the City needs economic development and we have committed if we want to talk policy - we need to have the economic development function and keep it going if going to expand development - to say if get more land to do the economic development that we are not going to have money to do it, that council as policy makers have to present it to us and step forward and say where we are going to find the dollars now that we have the land available in area . Christensen stated that the conversation is that infrastructure money that we have in 2008 is $2.5 million budget and question is what do we do with the infrastructure money as opposed to our economic development because it is all sales tax money, and $500,000 is a house for some people - get buydowns and it isn't like you have a lot to offer for someone coming through - Brooks stated what we were elected to do is to find the innovative expand beyond the $500,000 - Christensen stated by raising the taxes or the sales tax. Schmisek stated he would send numbers out today.

The meeting adjourned at 1:05 p.m.

Alice Fontaine
City Clerk