Council Minutes

Minutes of Grand Forks City Council/Committee of the Whole
Monday, October 27, 2008 - 5:30 p.m._________________ __

The City Council met as the Committee of the Whole on Monday, October 27, 2008 at 5:30 p.m. in the Council Chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Bjerke, McNamara, Glassheim, Gershman, Christensen, Kreun - 6; absent: Council Member Bakken - 1.

Mayor Brown commented on various items during the past week and upcoming events:
This past Saturday as part of the Make a Difference Day with the Mayor's Urban Neighborhood Initiative a crowd of partners came together to clean up Midland Park in the Near Northside Neighborhood and plan for future improvements. That in addition to 36 neighbors there were members of the Golden Key International Honor Society, UND Students Today, Leaders Forever, and American Vista present. The effort was organized by the Neighborhood Committee with assistance of the Grand Forks Park District and the Office of Urban Development. He thanked a number of businesses who stepped up as partners.
Early voting is available at the Alerus Center, hours are 11:00 a.m. to 6:00 p.m. today through Friday and 9:00 a.m. to 1:00 p.m. on Saturday - very convenient and encourage everyone to do their patriotic duty and vote.
Flu shot clinic tonight until 7:00 p.m. at Public Health, and also hosting flu shot clinic at Alerus tomorrow during early voting.
This Friday is Halloween and reminded everyone to be safe and if driving be extra careful and if out trick or treating, please be careful and follow safety rules.

2.1 Application for abatement of 2007 taxes
a) Gary Masilko, 210 Circle Hills Drive.
b) Alfred Johnson, 1204 Oak Street.
There were no comments.

2.2 Applications for exemption of remodeling improvements to residential or commercial buildings at various locations.__________________________
There were no comments.

2.3 Pledged Collateral Report.
There were no comments.

2.4 Federal Transportation funding requests.
Council Member Kreun reported the transportation request is part of our budgeting
process, this goes out to 2014-15, and problem they have is that this comes in bits and pieces and not all at one time - 2 or 3 of these components have to be voted on and go back to the State and will get more transportation info. back in 2-week timeframe, and asked that council look at these that need to be authorized and hopefully put together on the big master plan when that is done.

2.5 Report for Project No. 5993, Grand Forks Perimeter Drainage Study.
Council Member Kreun reported that the drainage plan includes all of Grand Forks
because of the dike system and part of the federal and state programs and requirements and part of the long range flood protection program and part of it incorporated into our drainage system that affects our roads that we will be doing later.

Al Grasser, city engineer, stated the city is being faced with several issues that are impacting our drainage planning, that we have specific design requirements that came from the Corps of Engineers for interior drainage facilities and our main facilities are English Coulee and Southend drainway, and those areas have established flood elevations based on LOMR, to maintain those elevations we have to reduce our run-off from post development - as we develop and get more concrete, more asphalt that increases run-off. The design from the Corps is based on limited development and have to stay within those parameters and that is the water quantity standpoint. The other issue we have to deal with is water quality and have talked about stormwater regulations that are being imposed on us and we are on the second stage of that. EPA puts requirements as to what our stormwater water quality can be when we release it in a post development state; regulations are still coming out and will see those this winter. He stated there are a number of different ways you can address water quality, wanted to do this report to give us some idea what might make sense. Have discovered the best way to handle it for Grand Forks is on a regional approach, and the most cost effective way is to look at a method of regional ponding rather than try to have every individual property owner try to develop a pond themselves, they tend to be the least cost construction method which is not very aesthetics, not well maintained. He stated it is a concept where they can put in a series of ponds, some discharge pipes and have gone through calculations as to how much ponding you need to meet the water quality regulations and where is a reasonable point to discharge the stormwater from a particular area. They need about 3% of the land area they are dealing with and there are a number of different configurations of the ponds - there is some flexibility as to where and how they build the ponds.

Grasser showed various concepts of drainage area ponds. Kreun stated that one of the negative aspects of our flood control project is that we have to control every bit of run-off within that flood control project and that is why this has come about along with the federal regulations on the Clean Water Act.

Council Member Kreun stated that part of their discussion at the committee meeting was to incorporate ponding with the Park District as holding ponds, that a large soccer field could be utilized as a holding pond, only has to be there for few hours in order to do that; and would like to work with the Park District on Kiwanis Park behind Target as that area is not developed yet and start there, have had some limited conversations with the Park District.

In answer to question as to when start this plan, Grasser stated they expect the new permit requirements will occur sometime in March/April/May of next year - has been delayed for over a year - that they implemented the erosion control ordinances about year ago and now these ordinances are going to be the next stage in the development where they monitor the post development water quality.

Council Member Christensen expressed concern about a lot of little ponds because that seems to be a lot of management and concerned about where find revenue to buy the land, and before we implement this plan that we figure out bigger plan - a series of holdings; and how do we take that land. Grasser stated that the next stage is for us to start developing a body of regulations and that this plan may take us out 50 or 100 years, not talking about building any ponds on these upper ends, we need to figure out how to incorporate the pond with the growth and make those come together - we need to develop the financing part of that and that will be part of the stormwater process because maintenance be beyond individual property owner - but this document doesn't spell out exactly what to do but tells you the parameters that we can meet and the flexibility that we have to get to where we are going to be regulated.; that he is envisioning that we can maintain some of that flexibility within our ordinances as going forward.

Christensen stated that one of the things we should be thinking about is dedication of ground within a certain area to our water control area; that we pick out an area that will have a pond, then have a source of revenue to buy the ground to build it out someday but if a 30 year plan then we have to pick an area and figure out how to buy it, and develop our infrastructure around it, have to know where it is going to be - have choice big tract or several little tracts but if going to build out this land in the future, have to dedicate part to our water control - another taking and force the cost of development up. Grasser stated that is the next step as this is the technical analysis and how do that is next body of work.

Grasser stated one of the major decision points they will have to determine in next phase is ask for land dedication type of process similar to what the Park District does or ask the developers to impose tapping fee or connection fee or infrastructure development fee, or go on a cash basis or try to obtain land on a donation basis as plats come together; study tells us we can do that and have the flexibility to explore either one of those routes.

Council Member Gershman stated there should be communication with the landowners/ developers who have contiguous pieces of property and want to develop it and should be talking now with the City rather than impose things on them.

2.6 Change Order #1 for Project No. 6211, 2008 City Sidewalks.
There were no comments.

2.7 Xcel Franchise Agreement.
Rick Duquette, city administrator, recognized Judy Paukert of Xcel Energy, and reported
that January, 2009 is the renewal date for the Xcel Franchise agreement, they are requesting a 20-year franchise agreement and a franchise fee of 2% of gross revenues (revenue profile and revenue projections included in staff report for 2009). He stated that he along with the city attorney, finance director and city engineer, have been working with reps. from Xcel Energy on this agreement, and presented it to the finance committee last week. This agreement will be placed in the form of an ordinance for review over the month of November. That he and Mr. Swanson noted at the committee that Section 4.1 in this agreement related to reimbursing Xcel for relocation costs and was something they did not want to keep in the agreement; that they had communication this morning with Xcel's attorney and they have agreed to delete that section. He stated at last week's finance meeting the chair suggested that they craft the agreement to allow future city councils to modify the franchise fee as needed, that he and Mr. Swanson put together some thoughts on that.

Howard Swanson reported that in their discussions with the legal department for Xcel they were not receptive to a 5-year review, and in discussions with Mr. Duquette he looked at our Nodak franchise and that franchise expires in September, 2017, and one of his thoughts was perhaps should set the fee schedule to have the same timeframe and with your thoughts and guidance create the Xcel franchise to have a review of fees to occur along with the renewal discussion of the Nodak - was not discussed at the committee but would put you even in future years on track with both of those franchise agreements. In discussing with the legal department for Xcel they did not express an agreement to that proposal, however, thinks it would be fair to say that they were open to continuing that discussion. The outright 5 year proposal was not acceptable, the thought of going to a term consistent with all electric appears to be acceptable to them, they wanted to have an opportunity to discuss that further. That is an approach that you may want to consider, it is slightly different than what the committee discussed last week.

Mr. Duquette stated we had a 20-year franchise agreement but the fee would be reviewable concurrent with Nodak's franchise agreement. Mr. Swanson stated they have tried to structure all of our franchise agreements, both electric and gas, to be similar to each other so don't have different companies treated in a different fashion and the franchise agreements during his tenure have always been 20-year franchise agreements, and if want to continue that, seems to be appropriate and also appears to be the norm in discussing it regionally in the Midwest but as far as the fee to maintain some flexibility it may be wise to put the fee schedule on the same track as the Nodak franchise agreement.

Council Member Glassheim stated he has several concerns, that changes in the utility seem to be occurring very rapidly in technicality and whether we want to stay with 20 years not sure, but he had some information that the Boulder, CO city council has had in terms of renewing their franchise fee with Xcel and will make copies of that and distribute them for your review; the attitude here was more of a business agreement but the Boulder council seemed to be more progressive in what they consider business to be.

There were some questions re. item 4.1 of the agreement, and Mr. Swanson stated what he has continuously told Xcel from day 1 was section 4.1 with regard to a 5-year reimbursement for relocating utilities would never fly and that we would not accept it; they continued to ask that it be included in it and prior to last week, he told them that he would present it to the committee, that it would be without our recommendation, either from the engineering department or city attorney's office, but in deference to their request, he had them maintain it, so after the committee meeting it was clear that there wasn't much support for it and in discussion with legal counsel for Xcel this morning we put it bluntly that wasn't going to fly, and after some discussion they agreed to delete it, but we had never indicated that that was an acceptable provision.

Council Member Christensen stated this is a 20-year agreement and he asked at the committee meeting, a franchise fee that is a pass-through fee, not a dime comes out of Xcel's pocket for this fee and a city council would impose a 2% franchise fee tacked onto bill, and city council's in the past have done that for 20-40 years - that in 2007 the City collected $1,167,245 and $1.4 million in 2008, and when extrapolate that into mills it is 10 mills, and he thinks it would be prudent for a city council to retain the power to change the ordinance for the level of the fee, because of economic conditions, etc. that future councils should have the power to increase or reduce it and not in favor of binding a city council for 20 years with the same fee. As far as being consistent when the Nodak's franchise is changed or not, tying it to renewal of their franchise, and what do then and why would we want to renew the fee that is being charged if we increase or decrease the fee and what difference would that matter to Nodak because they would get the same ordinance and that council would then retain the power to increase or decreases the fee by ordinance without any consent of the franchisee.

Mr. Swanson stated that all of the franchises are based upon a contractual agreement basis, including the Nodak, so there is no provision in any existing franchise for unilateral decision, the ordinance you refer to is actually an agreement that is accepted by the franchisee. He stated at the finance meeting was that the franchise was an agreement and that the amendment clause provided that it must be accepted by the franchisee and if you were going to do anything, the only thing you could potentially do was exclude that provision from the fee section. He stated he has not had an opportunity to do the research as to whether or not that can be separated out or if has been addressed and that is why he started looking at what do we have with Nodak, one of the concerns he has is that your existing Xcel franchise has a favored nation's clause; this proposed document as in our other franchise agreements, likewise have a favored nation's clause, and a favored nation's clause simply means that you cannot treat another utility better or differently than the one you are making the agreement with, so get tied to some degree that way and that led him to think that potentially if we put it on the same schedule or same basis as Nodak that we avoid even that issue or concern entirely, that he is open to researching whether or not we could maintain a unilateral franchise fee, what he thinks would potentially be - but we may have some other options that he has not examined or looked at, and didn't go outside the region of MN, ND and SD and not looked at what was in CO, and asked to review the materials Mr. Glassheim has but the materials aren't complete enough to determine what they were doing with their fee or term of their agreement but would be happy to do that for you.

Council Member Bjerke stated this is guaranteed to be revenue: Revenue will go up as the city grows and the bills go higher so guaranteed more revenue and concerned about the fact if we include the ability in the agreement to go up or down, not going to go down and not stay the same, but go up - 2% is a pass through and Xcel pays nothing, only collect it from customers and is firm believer that if need more property tax to do what some of you want to do, go on property tax and have argument and not come in the back door.

Mr. Duquette stated he saw the first franchise agreement come through in 1997 but when use the term pass-through, keep in mind that we have a long term relationship with Nodak and Xcel and their customers are our residents and all working to control those costs, and having opportunity to work with Nodak and Xcel as they crafted their agreement over the years, have exceptionally good relationship with those corporations in this community and are an important part of our revenue profile and that for planning purposes, capital investment purposes and other things that we think about related to their infrastructure and our infrastructure and those relationships are important.

Council Member Kreun asked when either Xcel or Nodak ask for a price increase in front of Public Service Commission is the franchise fee a part of that price increase or added to the cost. Mr. Swanson there are differences in how the rates are approved or established between a co-op such as Nodak and an investor on utility such as Xcel but his understanding is that when the create their rate base and provide the information to the Public Service Commission for rate approval, franchise fees are not included in that and not an element of that review but as the Public Service Commission would adjust their rates, the 2% would apply on top of or to that adjusted rate, but the Public Service Commission has no jurisdiction over that 2%. If the City deleted its 2% fee that come off the bill that a consumer receives, separate line item on your individual monthly billing, not included in the rate base, but is akin to a sales tax but not a sales tax but is exempted from sales tax.

Mr. Swanson stated that when he spoke this morning with Mr. Duquette or last week the four potential areas that he used and there could be variations of these so have options: 1) to grant a request for a 20-year fixed franchise; 2) to grant a franchise agreement for less than 20-year term; 3) hybrid that he suggested was granting a 20-year term of the franchise agreement but reserving the renewal rates on the fee in 2017 and the reason for that was to put it on the same par as the Nodak agreement; 4) the other was Mr. Christensen's suggestion of reserving the power to adjust the fee at the action of the council. He stated he told you that Nodak electric franchise expires on September 2017 and again there is mixing oil and water before your information that Mid-Continent Cable franchise expires in January 2015; there are major differences however in that your fees on Mid-continent are heavily regulated by federal law and not necessarily true with regard to natural gas or electricity.

2.8 Appointments to various boards/committees:
a) Grand Forks Public Library Board.
b) Civil Service Commission.
c) Downtown Design Review Board.
d) Emergency Management Board.
e) MPO Executive Policy Board.
f) City Planning & Zoning Commission.
Council Member Bjerke stated re. the Downtown Design Review Board, not against the people but doesn't think the government should be in the business of telling people what their buildings can look like, has nothing to do with building or fire codes, but a subjective opinion of what people's buildings should look like and will vote no on that particular item.

There were comments and questions as to whether a review board is needed any longer, what review function do they serve at this juncture, board was put together after the flood and probably had a need then but doesn't see too many new buildings having been constructed downtown since the flood.

Council Member Gershman stated they had a report last week about the downtown plan and could be talking about demolishing the civic auditorium and having some new buildings and believes in the integrity of architecture, that communities have asked for certain regulations so that their property would not be diminished by somebody who would paint their house with interior color that doesn't work on the exterior, etc. but it never hurts to review a committee but if we have future development downtown by the old civic auditorium perhaps still need this commission and would be his position on this.

2.9 Greenway/Bikeway-Pedestrian Path Users Group.
There were no comments.

2.10 Redevelopment of 1500 block of Chestnut St., west side.
Meredith Richards, urban development, reported that the Selection Committee met last Thursday afternoon and their recommendation is that the proposal submitted by Corey and Peggy Vreeland be approved.

2.11 Public parking at The Current.
There were no comments.

6. MAYOR AND COUNCIL MEMBER COMMENTS

1) Council Member Glassheim stated as part of initiative to improve the Near North Neighborhood has been trying to get city departments to be more aggressive in enforcing rules and codes and responding to neighborhood complaints, even on private property, that they have been cooperative but staff seems unclear about how far administration and/or council wants them to go. The recent tragic fire at the house that had many complaints over the year underscores this concern; unless the council has the will to clarify authority and encourage enforcement, nothing will change. That he would like the council to review esp. with police, health, inspections and city attorney what it would take to be more responsive to citizen complaints about mess and junk, overcrowding of people, car or animals on a lot or in a home, about dwellings which are unsafe or in poor repair, some of these situations endanger neighbors, others endanger their property values and undermine their enjoyment of their own property. He stated he would like to work with Service/Safety to move this matter forward and make sure we have the tools needed to have safe, secure and decent neighborhoods.

2) Council Member Gershman stated he had brought up the matter of the 4-day work week and suggested that be referred to finance/development committee to look at and move forward for study to see if save any money. It was noted that Mr. Dean will make a report to the council.

ADJOURN

It was moved by Council Member Gershman and seconded by Council Member Kreun that we adjourn. Carried 6 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor