Council Minutes

Minutes of Grand Forks City Council/Committee of the Whole
Monday, August 11, 2008 - 5:30 p.m._________________ __

The City Council met as the Committee of the Whole on Monday, August 11, 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, Bakken, Kreun - 7; absent: none.

Mayor Brown commented on various items during the past week and upcoming events:
He thanked community for turning out last Tuesday for National Night Out Event at the Purpur Arena, with approx. 1500 people attending, excellent showing from law enforcement and fire safety from around Grand Forks area; thanks to sponsors who made this event memorable, and thanks to Air Base for providing canine displays and other events for children to see.
Our first Blues on the Red event was another success at Town Square on Saturday, Canad Inns and the Grand Forks Convention & Visitors Bureau were sponsoring this event and making this a great time; and other Blues on the Red Fest on Saturday, September 20.
Come to the Farmers Market at Town Square and opens at 9:00 a.m., lots of produce at several booths and is in big demand.
There is the Heritage Days Parade in East Grand Forks starting this coming Saturday with lots of music, food and displays at the Heritage Village on Hwy. 220 North - two day event that runs Saturday and Sunday; and after the parade can join him for a short walk on the Greenway at 10:30 a.m., about 3.5 mile walk and take approx. 45 minutes and opportunity to walk and talk with him about any concerns or suggestions you might have for our city.
Saturday afternoon is another addition of the Art & Wine Walk in downtown Grand Forks, get tickets and map at Empire Arts Center.
Public schools open in Grand Forks next week on Wednesday, August 20, and please drive carefully esp. near schools and crosswalks and watch out for kids.

2.1 Substandard garage and shed at 1711 12th Ave.N.
There were no comments.

2.2 Substandard dwelling at 512 N. 7th Street.
There were no comments.

2.3 Appointment to Grand Forks Regional Airport Authority Board.
Appointment of Brad Beyer for a 5-year term. Council Member Gershman stated that Brad Beyer was past president of Airport Authority and that he is a strength on there with his knowledge of regulations, is a general aviation pilot and is comfortable with that reappointment.

2.4 Redevelopment of Walnut Place and 1500 block of Chestnut St.
This item was held.

2.5 Request from CPS, Ltd. on behalf of Big Sioux Travel Plaza, Inc. for final approval (fast track) of Replat of Lot A, Blk. 1, Columbia Park 22nd Addn. (loc. at 4401 32nd Ave.S.)_________________________________________________________________
There were no comments.

2.6 Request from Widseth Smith Nolting & Associates, Inc. on behalf of Red River Habitat for Humanity for final approval (fast track) of Replat of Lots 26 and 27, Blk. 1, Promenade Third Resubdiv. (loc. at N. 53rd St. and 8th Ave.N.)_________
There were no comments.
2.7 Request from CPS, Ltd on behalf of Allen and Carole Eide for final approval (fast track) of Replat of Lot H, Blk. 1, Perkins Second Addn of Replat of Lot E, Blk. 1 of Replat of Lot A, Bk. 1 of Replat of Lot 2, Blk. 1, Perkins Second Addn. (loc, at 3351 32nd Ave.S.)____________________________________________________________
There were no comments.

2.8 Request from James Bradshaw on behalf of Landmark Developments, LLC for conditional use permit (CUP) in I-2 (Heavy Industrial) Dist. for property to be platted as Lots 1, 2 and 3, Blk. 1, Strata Third Addn. (loc. at I-29 and N. 48th St. for purpose of construction of facilities, processing or storage of sand, gravel, stone, recyclable material or other raw material, asphalt and concrete production._____
There were no comments.

2.9 Request from James Bradshaw to annex property to be platted as Lot 3, Blk. 1, Strata Third Addn., except any lands previously annexed, and to include the phased annexation of Lot 2, Blk. 1, Strata Third Addn. (loc. 2400 blk. of N. 48th St.)_______
There were no comments.

2.10 Request on behalf of City of Grand Forks for preliminary approval of ordinance to amend the text of the Land Development Code, Chapter XVIII of the Grand Forks City Code of 1987, as amended, amending Section 18-0224, Corridor Overlay District.________________________________________________________________
There were no comments.

2.11 Request from CPS, Ltd. on behalf of Landmark Investments for preliminary approval of plat of Strata 3rd Addn. (loc. in 2400 blk. of N. 48th St.)________
There were no comments.

2.12 Application for Class 3 (On & Off Sale Beer and Wine) license by Phoenix Wok and Grill, 2100 S. Columbia Rd._________________________________________
There were no comments.

2.13 2009 preliminary budget presentation.
Mayor Brown reported this is our preliminary budget presentation for 2009 and deals with our budget that is service neutral in our community; keeps in mind that economic development and expanding the Industrial Park are important issues, and also deals with protect and serve and that is why want to have the adequate amount of fire stations, firemen, policemen to continue to make Grand Forks a safe place to live, work, learn and play.

The city auditor made a presentation of the preliminary budget
He reviewed guiding principles, Special Revenue Funds, Enterprise Funds, Capital Projects and CIP, Listing of Special Requests that are included in the budget, and General Fund. He stated this is probably the most difficult General Fund budget he has worked on in 36 years as it was very time consuming and a lot of effort and work by department heads, administration and by staff in his office.

He stated in the Guiding Principles the key is that they want the budget document to be a planning and management tool where take a long term perspective and started that with this year's budget, 2008, and started looking at a 6-year timeline. This helps them get a lot of the major issues on the table so you know what a decision today means for the future. He stated that the mayor and department heads will review each open position as they occur and work toward efficiencies because they have been doing that and is a continuous part of our process.

Expenditure Side for Guiding Principles: The council adopted several years ago the pay for performance system and there is a lot of frustration with pay for performance, we have been able to do with that commitment is keep the pay level of city employees up at the 100% median of the market, because do the surveys and made sure people get that funding; there is a performance review that is required and can get zero to 4% or perhaps a little more than that - best thing said to the employees is that you come first in the budget process; and they are the best asset we have.

Special Revenue Funds - this is unique area of the budget where the money is dedicated to specific uses and there are areas that are funded by mill levies but those are specific mill levies authorized in State Statute and can only be used for those purposes, such as special assessments on city property; the City's share of special assessments, public building fund, etc. He stated Community Development Block Grant Funds, will be down in that budget by about $843,000, that the Block Grant Program and Supplemental Income is going down on a yearly basis. The other fund is 2115 Highway Users Fund and we have a construction project projected along 15th Avenue South (page 374) in Highway Users CIP; that fund is generally used for major streets and roadway repairs that we have on a continuous basis - used to be the match for Highway Users Funds but has been eaten up by the general year to year programs that we fund and that is why look to the infrastructure fund.

In addition to various funds he also reviewed Utility Funds
Sanitation Fund - because of the impact of the landfill have had to add an additional $1 million to cover hauling costs of our garbage to Gwinner, and are looking at a 4% rate increase in 2009, about $0.48 per month for customer; and because of the siting of the landfill the potential of a $7 million bond sale to acquire property and build the new landfill, and that there is $500,000 of construction reserve fund that was held because of the unknown of landfill and that money will be used in 2009. He noted future projected rate increases for planning purposes and that year to year those will change.

Wastewater Fund: one company is responsible for 30% of revenue - have not anticipated a rate increase in 2009 but major capital items in the future are new pump stations in 2009 and 2010, $1.2 and $1.3 million and will be bond sales and have to pick up the debt service in this department. Forcemain projects in 2012, 2013 and 2014 of $1.9, $2.4 and $2.4 and bond sales. Starting with $800,000 construction reserve account and Mr. Feland has asked that be held as there are some issues at the wastewater treatment plant. There are future projected rate increases and those rates will hopefully diminish or improve.

Waterworks Fund: a 4% rate increase for 2009 and cost of increase would be 48 cents per mo. for a 4,000 gal. user, and 80 cents per mo. for 8,000 gal. user. Major capital - aware of what is on the horizon in the area of the water treatment plant and over the next 6-year planning period between the water treatment plant, current water treatment plant rehab and planning for a residuals management unit we have $49.5 million of capital in that fund, to be bonded and hopefully with grants to assist us, and need discussion on what is best approach and how to move forward on that. Future projected rate increases and is a planning number to help diminish cost and our local share of that.

Stormwater Fund: not suggesting any rate increase. Major capital is lift station of $2.6 million in 2009, funded partially by reserve and grants and a bond sale. Other major projects are listed in the CIP.
He reviewed Capital Projects which are also listed in the CIP and the capital improvement plan over the next 6 years and keep in mind that this is a plan to inform council and the public of projects that administration and department see on the horizon - $170 million and wouldn't be done until reviewed by the city council. Smiley water tower is included at cost of $394,000 to allow council to decide whether refurbish it or tear it down - cost because of lead paint removal.

General Fund: Property tax (1 mill in 2009 equals $136,625); Sales tax - Anticipates 4% increase, allocated as follows: 49.5% to General Fund to off-set need that would be there otherwise for property tax), 20.5% to Economic Development and 30% to Infrastructure).
Revenues other than property tax increased only 2.2% (decreases in fines, building permits, admin. and eng. fees projects). Expenditures increased in utilities, fuel, wages/benefits. He stated they have to review some alternative revenue streams - transfer from utility funds and that 1% more from utilities would be equivalent of 2 mills. He stated that by refinancing the G.O. Dike Bonds have freed up for the potential of either decreasing the total mills by 6 mills or transferring and moving some or all of those mills to the General Fund where it puts us in good stead fiscally for the next 6 years, and concern about doing it now is that this is opportunity to do it now and if don't use those mills in this way, that within year's time you will say need to raise mills.

Council Member Christensen stated that there is a potential of a 6 mill reduction because we refinanced the bonds and when say moving 2 mills, is that we won't reduce the mills by 2 but keep 2 of those mills or we have the choice of allocating 1% from the Enterprise Funds which will give $270,000 as each mill is $136,000+. He stated that a future council if it chooses to build the SE firehouse can do so, sell bonds and don't have to save up for that issue as they will find a way to pay for it; that you need 12 people to staff it which will be $1 million add and when look at the CIP we are saving $235,000/year for future capital for the fire department and that is $1.4 million and may be a need that people think we have but this is something we should discuss; likes that they are thinking of transferring some money from the Enterprise Funds to fund some ongoing expenses. The auditor stated for clarity on the building of the fire station they have that in the 2013 Public Building Fund as bond sale - not planning for that to come out of the General Fund, but planning for and added to the 2014 the $1.1 million of operating to fund the personnel. This is planning document and decision made today has an impact. Council Member Christensen stated that if $1.1 million to staff that station, this is keeping 2 mills for the future staff who will staff that station in 2013 - and in the meantime what will they do with this money for the next 5 years and how used. The auditor stated they will see a schedule as to how the cash balance ebbs and flows through the next 6 years.

Mr. Christensen stated the auditor is saying that he needs all 6 mills to maintain the level of services as he thinks are required based upon Mayor's instructions and department heads they need to maintain that level of services.

Council Member Glassheim stated the shifting of money from Utility Funds is just taking out of one pocket and giving to another, that if take it out of Utility Funds then have to raise utility rates in one, two, etc. years, same people paying for it and wants to register on the floor that there is a different perspective on using that.

The city auditor stated that since 1998 general fund mills have been reduced 27.68 mills but total tax dollars have gone up and that is because we had to build the dike and put mills elsewhere to build the dike but took away a significant amount of operating cash to the tune of $3.8 million, need about $800,000+ and we need to be more aware of sustaining the General Fund budget as we reduce mills - the key of moving mills to the General Fund is that we don't have to add mills to the total mills, have choices. The G.O. Dike Bond is refinanced and some mills can be moved to the General Fund to create sustainability; the total valuation went up 5.04% including new construction but the average revaluation on a resident house is 2% this year, and that helps to minimize the impact of retaining any mills, however, it still means more money out of the pocket.

He stated that if we do 2 mills or equivalent of 2 mills, that current services that we are providing aren't sustainable and there will be some service cuts - they have had discussions about what goes first, and will be in areas of office help, etc. and will require, if only do 2 mills, and want to retain services, it will require either mill adds or reduction of service. He stated on an average $100,000 home that increase 2%, the average value, if did this plan would be a reduction of about $8.00 in property tax. He stated if they retained the equivalent of 4 mills, cutting 2 mills, the services would probably be sustainable if his assumptions are accurate to the dollar - and will require mill adds or reduction of services and would have to delay the SE fire house more than 2013. The impact on the same house in 2008 with average of 2% on this one would be increase of $0.80 for the year. He stated that if no mills cut and 6 mills, and this is the recommendation, the services are more sustainable and not add mills or reduce services and the fire station and the staffing in 2014 more likely and impact on $100,000 house increasing 2% is $10.00 for the year.

He reported that the preliminary budget will be presented to the city council on September 2, 2008 with work sessions as needed; on September 15 final budget adoption and second reading of rate ordinances; and by October 10 have to certify the budget to the County Auditor.

He thanked everybody who is responsible for working on the budget, finance departments, mayor and council, and citizens for input throughout the year. He also stated that our goal is to provide those services as efficiently and effectively as can and want to minimize the impact but when costs increasing on things that we use the most in our line of work, it is difficult to hold that line.

Mayor Brown thanked Mr. Schmisek, Mr. Duquette and the department heads for their hard work on this preliminary budget, that it is a responsible, thoughtful budget.

There were general comments following the presentation of the budget.
Council Member Gershman suggested re. dike refinancing that some people felt that we should pay the dike off early and save the interest, but that he along with several others took the position that letting those who are going to benefit from the dike pay for the dike. There is some consensus that people today should not pay for things 10 and 15 years from now, and suggested looking at extending the dike bonding, which is scheduled to be paid in 2022; and should discuss in work session. The city auditor stated that is worth discussion and would bring it up to the bond advisors, but we need to think about is that we have an extremely high debt load because of the dike - and if extend it and see what the average maturity life of different bonds are - water treatment plant, airport terminal, etc. and that he suggested that they go out to 30 years and worth looking at.

Council Member Bjerke stated he has some questions and some comments.
That re. Enterprise Funds we have payment in lieu of taxes coming out of Sanitation, Wastewater, etc. and his question is why don't we do that to the Alerus, give police and fire protection and that is something that should be looked at - that it is a policy decision and is up to council. He also stated under Special Requests/Services for Special Events - overtime fund revenue and asked for a breakout of that info, where it goes and needs to be discussion if we're subsidizing the Alerus (the auditor stated also the REA).
Special Requests, the Animal Control gets 1/2 mill - the auditor stated that is where they take stray animals and City recovers an impound fee on those picked up - but not all are picked up.
Greenway Fund - if that is not part of the greenway fee that is paid - the auditor stated they are looking at consolidation of all maintenance and that might happen.
Third assessment for the dike - the city auditor stated the first two have been somewhere near $11 to $13 million and is hoping that the third one will be somewhere in the range of $8 to $10 million; Bjerke stated that will be a tax increase, city-wide special assessment.
Potential property tax increase for Riverside pool and dogs, special assessment for the citizens of Grand Forks and challenges the foundation of this budget on three premises:
1) citizens want all these services and heard that based on a 2001 survey, survey outdated, that property tax issue is number 1 issue in the state, and would like to see that survey put away of what services citizens want;
2) need to maintain the city services - recently took on a pool and not only build it but maintain it, new service; took on a dog park, etc. which is new service, holiday lights which is a major expansion of what we had; looking at putting trash cans downtown and maintaining them and not even going to vote on it because below $30,000, new service; Public Service was an extension of a service that was supposed to go away; funding for the Arts and Events, new service when started in 2000; in 2001 Public Transportation paid a consultant $50,000/year to analyze our public transportation, started out as making minor changes to save $100,000 and effect about 2% of the riders, keep it the same but expanded the service. The Greenway seems to be under a never ending expansion, that we are not maintaining the services, we are exploding in growth. Cities aren't supposed to be doing pools and dog parks, have a separate taxing entity and would challenge the premise that we are maintaining city services.
3) We should put people first, not government first - seem to have the mindset of where government that happens to have a city, should be a city that happens to have a government, and challenge the premise of we need to be first.
. He stated he didn't know how the work sessions should go but he intends to bring forth a series of motions to cut millions of dollars, and will have debate about different issues - Smiley is on the target, doesn't refurbish water towers that don't hold water, that he will bring forth some issues.

Meetings of the work session were scheduled for Wednesday and Thursday at 4:30 p.m. the week of August 21, with two meetings the following week if required.

Council Member Christensen stated he would like from administration is if there is a 4 mill reduction or a 6 mill reduction, would like to know what services you would suggest be cut, and wants citizens to know what staff feels would have to be cut if they didn't have the money, and if administration could tell us what plans are for attrition or down-sizing (not threatening anybody's job) or if could do with less - but have had same level of staff for 4 or 5 years. He noted that administration wants to make sure that Pension Plan is funded, and had suggested that they use the mills from bond payments - to extend the life of the bonds and reduce mills and using that money for other infrastructure or projects - that utilities and fuel have gone up and that if the cost of buying the goods goes up, sales tax will go up proportionately but people will cut back. We are talking about the General Fund where we have 76 mills out of 110, and talking about 85 mills that we control, if that, and questioned why taking $1 million in 2009 setting it aside or using it for staffing in 2014 - that once they decide they need this, they will find a way to pay for it and if we were to use 4% from the Enterprise Funds, what would be the incremental effect to a home owner that uses 4 or 8,000 gals. and lives in a $200,000 home so have something as a comparator.

Council Member Bakken stated taxes seem to be the most important one and how save the general public, but perhaps should talk to the County as now pay more for County taxes than City taxes and doesn't see County giving much service, State for schools takes about half of our budget, and the amount of tax he pays on his house is very small compared to the overall tax that he pays on his tax bill. He stated they talked about bonding, bond is debt and the longer you extend your debt out and the more debt you take on, and sooner or later has to be paid, that if pay now for future generations, not all bad. He stated he thinks staff did a good job and as a council their responsibility is to the people today but also to the people that will be here in the future.

Council Member Kreun stated that Mr. Christensen asked what would we cut, general government is city assessor, city attorney, finance administration, planning and zoning and City Hall, information services, engineering, inspections, etc. and they are the items that less than $10 million pays for and when start talking about cutting from General Fund, everyone of those is a service, including municipal court, police, fire, health, human services, etc. and have been living off the sales tax and off growth in the community and as those things slow down, that is why we are looking at utilizing the other monies - that Grand Forks is growing strong and we are working to stay strong and important that we look at what we want cut and if cut to the bone, will we still have a growing community that funds most of the things we do, so be careful when you say cut this and that out of the General Fund.

Council Member Glassheim stated Mr. Bjerke asked if we are maintaining services, that we are maintaining services that people want - not maintaining services that people wanted in 1970, people now want dog parks, Riverside pool was voted on by the public that knew there would be a cost. The lights budget is not new and have had in the Beautification Program, continuation of a budget and that people want some investment by their City in beautification; Arts and Events, not new expenditure. The good news is that we are going to have gigantic debates over 1 or 2 mills and thinks the public should know that the State Legislature will deliver to them a 50 mill reduction coming out of the 2009 session. He noted that Mr. Christensen asked for lists of things and is very reluctant to ask staff to provide us a list of cuts they would make before we decide what we want - that is bad management and not sound to ask for cuts and is asking that they not do that.

Council Member Gershman asked for clarification, referring to $800,000 since passed Special Events for the Arts, that is a cumulative dollar amount, and when look at various amenities have improved the quality of life in Grand Forks, has done rough calculation of number of people in our community that attend events - around a million people - Alerus Center, Engelstad Arena, Farmers Market, Greenway, etc. and that personally he is not interested in diminishing it, and that we have worked hard with mayor and staff to reduce 29 mills or $3.8 million - that we have saved some money in our Beautification Fund and buy some lights to beautify our city and receive criticism and happens because we are on television and are the ones the public sees spending their money every week - don't see the others, that we are 24% and pay more to other entities in our property tax than to our city. He stated he hopes we can come up with something Mr. Bjerke can be happy with and Mr. Bakken, and not diminish the quality of life in our city.

Council Member Kreun stated that the 50 mills that is being projected with the Governor's budget for schools is going to be one of the largest tax decreases in property tax, that when had quarterly meeting with County, Park District and School District, we offered our support in any work that we could do to help promote that particular agenda item at the Legislature, and we have to contact our Legislative groups that will be in Bismarck and work towards reduction of that cost, those are significant issues that we should be looking at and supporting along with looking at our own budget and helping those individuals with their quest to reduce their property tax in our community

3. INFORMATION ITEMS

3.1 Portfolio Management/Summary for period ending July 31, 2008.
Information only.

MAYOR AND COUNCIL MEMBER COMMENTS

1) Council Member Gershman stated they received a very nice report from engineering on the traffic study on 32nd Avenue and some other areas, and asked if they could look at 2 intersections (two access roads) one is Minnesota Avenue coming into DeMers that is an angle and make that perpendicular, and the one coming onto Columbia Road going south at the overpass - and try to rectify those.

AJOURN

It was moved by Council Member Christensen and seconded by Council Member Gershman that we adjourn. Carried 7 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor