Committee Minutes

FINANCE/DEVELOPMENT STANDBY COMMITTEE
Tuesday, July 22, 2008 - - 4:30 p.m.- - A101

Present: Christensen (joined meeting in progress), Glassheim, McNamara, Gershman.

The meeting was called to order by Glassheim at 4:07 p.m.

1. The Comprehensive Annual Financial Report of the City of Grand Forks for the year ended December 31, 2007 and Independent Auditor’s Report.

Joe Martin, Brady, Martz and Associates, P.C., was present to discuss with the committee the Comprehensive Annual Financial Report (CAFR) and Independent Auditor’s Report on Federal Awards, as well as the overall management letter from the auditor’s concerning the financial statements. Martin stated that the financial statements are prepared by the City and as the auditors they evaluate the statements to ensure that they are fairly presented, reserve levels are adequate and no material omissions or errors were made in the statements. The audit was conducted according to Government Accounting and Auditing Procedures and OMB A-133.

Martin proceeded to give a brief overview of the sections of the CAFR and encouraged the Council Members to read in particular the Management Discussion and Analysis section, which reviews highlights of the year. As reported in the management letter, all statements were fairly presented and standards have been complied with by the City of Grand Forks.

Glassheim inquired as to the reserves. Martin stated that in determining an adequate amount of reserves the rule of thumb for municipalities is to have on hand an amount that would cover three months of expenses and the City currently maintains near that level.

(Christensen reported present.)

Christensen stated that he would like to see a detail of the due to’s and due from’s that are netted in the statements and that he would see that information as being regularly included in the CAFR and that he would also like to see a breakdown of what is transferred from the enterprise funds to the general fund and also would like to see that included in the CAFR. Schmisek stated that this information would be provided to Council.

Christensen inquired as to the profit in the enterprise funds and the level that could be available to transfer to the general fund. Martin directed him to pages in the CAFR that would show the net changes in cash balance for those funds and stated that per State statute up to 20% of the revenue from an enterprise fund can be transferred. Schmisek stated that currently we are taking 11-12% from each. Christensen commented that he would like to look at whether there is an ability to transfer any more to the general fund, but would like to be careful that we don’t take too much out.

Martin continued that another portion of their audit is to review the expenditure of federal grants and that is presented in the single audit document. He added that the audit determined that all expenditures have been made properly and no improprieties were detected.

Martin stated that the third document that had been distributed to Council was the Management Report and that is the auditors official report to the Council that there were no improprieties or irregularities found in the course of the audit, and that if any had occurred, the auditors would have brought those forward to Council prior to this meeting.

Schmisek commented that in regards to the single audit document, the information contained shows that our departments are very aggressive in seeking grants as a funding source, particularly in the homeland security area and just wanted to make that distinction to Council.

Motion by Christensen, second by McNamara, to recommend to Council that the Comprehensive Annual Financial Report be approved and submitted to the State Auditor’s Office for final review. Aye: All. Motion Carried.

The group altered the agenda to consider Item 3. Park District JPA next.

2. Park District JPA.

Bill Palmiscno, Park District, distributed to the Committee Members copies of a revised Joint Powers Agreement and a draft budget for the operation of Riverside Pool. He stated that the budget is very tentative at this point, as there are many variables, particularly in the chemical and utility areas that it is hard to estimate due to the size difference and addition of heat to the pool. He continued that they have based some information on usage at Elks with increases due to the larger size of Riverside, gotten insurance information from Schmisek, as the City will carry insurance on the pool since it is the owner, and based ticket revenue on this years ticket price and an estimate usage of 12,000 swimmers. He briefly reviewed some samples of the typical marketing that is done for Elks Pool and stated that they would plan for similar and just include Riverside in the ads. He noted that also included are comparative marketing stats for Bismarck and Fargo for the Committee’s information.

The group discussed a variety of factors related to the operation of the pool including suggesting that maybe one manager could serve both facilities, sharing staff between the two pools, potential for contacting other cities for information to help with estimates for some of the variables in the budget.

Duquette stated that the Joint Powers Agreement latest revision is before the committee and had a few other suggested changes yet to add during discussion of the document. He continued that the recitals section outlines what the document relates to, that the ownership section states that the City is the owner of the facility and that we are responsible for the renovations to open the pool, that we are responsible for capital maintenance on the facility, exclusive of the $15,000 contribution per year that the Park District has agreed to contribute annually. Duquette stated that main point is to show that the Park District is responsible for $15,000 of any shortfall first, then any gifts or contributions, and then the City will be responsible for any remaining shortfall.

Duquette pointed out that one change that is not included is that the word capital be inserted before maintenance on page 3 to better define that term, that the City would be the party responsible for flood preparation and cleanup, but would work with the Park District staff to coordinate.

The group discussed whether marketing of the facility needed to be specifically mentioned or whether it was covered sufficiently as a part of normal operations. Duquette pointed out that the Park District does currently market Elks and would assume that they will continue as they have been and would include Riverside in the materials. Consensus of the group was to leave as part of normal operations at this time.

Duquette continued that next sections are standard wording regarding liability and insurance. He pointed out that the desire is to appoint a main point of contact at the Park District and the City to deal with issues associated with the pool.

Duquette continued that the term of the document is currently listed as five years, but it has been suggested that we further define that as not from execution date, but from pool opening date, as concern from some that if falls in the middle of a season and could be a problem if a party wanted to not renew the agreement and also that if only a partial season occurs in 2009 that would be one year off the term and intent had been to have five full seasons under the agreement. The group also discussed whether a renewal clause should be included. Consensus on these items was to draft language that would give end date for the agreement of December 31, 2014 and then that intent was to reevaluate the agreement after five years according to what was on the ballot so o.k. to not include renewal language at this time.

Duquette stated that he will bring this forward to the COW meeting on Monday, July 28, and will work with City Attorney to get latest revisions into the document, but may need to approve subject to approval of City Attorney.

3. Lease agreement between City of Grand Forks and Park District.

Brandon Bartholomew, Platting and ROW Officer, distributed a packet of information including summary sheets of the leases that are currently in place with the park district and copies of the leases that need to be acted on.

Christensen stated that he would like to see a breakdown of where the $1.15 that is collected monthly on utility bills is going, how much direct maintenance cost there is to the City, as well as information on what the Park District is maintaining on the various leases and what they are doing as part of their maintenance, i.e. spraying, mowing, etc.

Grasser stated that the intent of this agenda item is to clean up some old deed transfers and a number of leases that we have with the Park District. He continued that as a part of those leases the Park District is responsible for the mowing, spraying, and any other costs and that there are a few leases whereby they are actually just a manager of our property, such as the Sunbeam Trailhead, which we own and maintain, but they lock and unlock the building, etc. as our manager of the facility or the sledding hill, which we own, but they lease to use for sledding in the winter months.

Christensen replied that it would still be helpful to know just exactly what property we are talking about and also to know what we are getting for the $1.15 each month. Schmisek stated that a spreadsheet can be put together and distributed to Council which shows the breakdown of expenses covered by the maintenance fee. Christensen stated that it would be nice to know what is considered maintenance, does cover the cost of mowing, employees, marketing, events, etc. and if there is any left to use towards other items like maybe bringing in some events in the future to hold in the Greenway.

Grasser stated that he could provide a map that would show what is park district land and what is city. Gershman suggested that perhaps we should check with the park district, as maybe they could do all the maintenance such as mowing at a cheaper rate than we are contracting out now since they are going to the area to do their portion anyway.

Glassheim inquired whether the leases are time sensitive and need action now or if they could be carried over to the next committee meeting and get the additional information prior to acting. Grasser responded that he did not see a big problem with holding them, as some of the deeds have been in process since 1998 and we have actually taken possession of the land and been operating as owner with contract with maintenance contract to the Park District, just not processed the deed to change the title and that some of the leases are already past the date needed for renewal. Glassheim reiterated that then the passing of the leases and the approval to finalize the deed transfer will not change anything from the way its currently operating, but just an administrative procedure.

Grasser stated that one item that it has been suggested to discuss changing is that the leases are renewable annually and that the Attorney suggested that a longer term maybe more appropriate given that the leases do not typically change. Christensen stated that he would also like to see exactly what the responsibilities are spelled out within the leases so that we know who is responsible for what. Grasser commented that there is also some concern as to where the proper committee is to bring issues such as this, as sometimes go to Finance and sometimes to Service Safety and seem to be duplicating discussion and perhaps if there is an overlap could also be work session potential topic.

Duquette stated that staff will prepare the spreadsheets and maps and bring this item back to committee along with the leases and deed documents.

4. Beautification Program and Holiday Lighting.

Meredith Richards stated that in 2006 Council had requested that research into updating the city’s holiday lighting be undertaken and that a couple of changes have been made, but that more improvements were desired and that a committee made up of Leon Comeau, Hal Gershman, Dakota Huseby, Sandy Norby, and staffed by Mark Aubol and herself has been meeting and come p with a citywide plan for holiday decorations.

Richards continued that the committee set goals which were to highlight najor commercial areas, develop a consistent theme throughout the community, focus on high-impact, high-efficiency displays rather than the smaller scale efforts that have been tried in the past, and to encourage private businesses to have their own displays. She explained that the group had settled on a recommendation of a snowflake theme, as the feeling was that could be used for a longer period of time, possibly from late-November through late March without seeming out of place. The group also focused on fixtures that would use LED’s rather than traditional bulbs, as they have a longer life and also use less energy, and using all white bulbs to again, make maintenance easier. In the area of encouraging private displays, the group had suggested perhaps a communitywide contest could be held in cooperation with the Chamber of Commerce and the Convention and Visitor Bureau.

Richards continued by outlining the suggested plan for the various parts of the City, which were defined as Downtown, Gateway Drive, North Washington, South Washington, DeMers, Columbia Road, and 32nd Ave South. Overall cost for the proposed plan would be $205,200, which would be funded from the current balance of beautification funds. Ongoing maintenance for the holiday decorations would be absorbed into existing budgets of the Public Works and Urban Development Departments.

Richards explained that a couple of years ago the Council began discussion on rethinking the process to be used for the beautification dollars and as such no distributions were made in 2007 or 2008, and propose to use those funds for this project’s one-time capital costs. Gershman commented that it is anticipated that these decorations would be available for use for a long period of time.

Christensen inquired as to what the annual allocation is. Schmisek replied that $109,900 for 2008, and it was at one time a mill, but then adjusted annually and comes from an allocation of sales tax dollars in 2169 Infrastructure fund.

The group discussed whether the intent is to do all the areas at one time. Gershman stated that if we order them all at one time get better pricing and so would recommend that all be completed.

Hoover recognized that Richards and Aubol have spent a lot of time researching this item and working with the committee on this matter and like to point that out to the Committee.

McNamara inquired if there was any idea of the ongoing maintenance costs. Aubol replied that we don’t, as they are a different type of bulb and fixture than we have had, but many of potential repairs that could come up are things that we can do in house and would maybe give rough potential of $2,500 to $3,000 per year but not real confident on that number.

McNamara asked whether there are any other potential projects that could be funded with these dollars that we’re forgoing if we proceed with this. Hoover reported that the program was suspended pending a decision on what the process for award of the funds would be and in anticipation of this project coming up. He added that do also have a plan to use the 2009 budgeted amount for some downtown projects that will finish up some work in that area and then also use that time to determine the process to be used for future years and go back to allocation in future.

McNamara inquired whether any replacement or maintenance costs could also be funded from beautification dollars. Hoover stated that he would see that as being appropriate and that there is not another budget area that has included this. He noted that the old decorations used on South Washington were purchased by the South Forks Merchants Association and through their organization, Leon Comeau has maintained and stored those in the past. They will be visiting with him to see whether that group and Mr. Comeau will be willing to continue with the new decorations.

Motion by Christensen, Second by McNamara, to recommend that Council approve the citywide holiday lighting project as presented. Aye: All. Motion Carried. The group requested that the presentation be given at the COW meeting so that all Council Members, as well as the general public, would be able to see what is being proposed.

5. 2009 CDBG and HOME Programs.

Richards stated that included in the packets are information as requested by the committee including comparative information for other cities as to the process that they follow and the dollar amounts that they are allocating. She continued that if the assumption is that the United Way will not be allocating the Public Service funds, then the proposal is to have those also allocated by the Citizen Advisory Committee (CAC) and to expand that committee to also include one representative from each of the following: Northeast Human Services, UND Social Work Department, County Social Services, United Way, The Chamber, and City Council. The recommendations for allocation would come from the CAC to Finance Development Committee, then on to COW and Council. She continued that in looking at the information provided on how other cities are doing this, there is a variety of formats used from outsourcing to staff recommendation, to a committee recommendation similar to what we have used.

The group discussed various items listed on the detail provided and how recaptures of funds work in some of the programs. Richards noted that Thames Court is an extension of the Promenade development and will provide 30 rental units that after 20 years will become available for a lease purchase program.
Gershman inquired how comfortable Urban Development is with the budgeted $450,000 in property sales. Richards stated not very, as for 2008 had projected $665,000 and not coming in on pace to meet that so will have some that roll over to next year.

Christensen inquired if there was a place to get a written ruling on whether or not a fire truck could be funded through CDBG. Richards stated that there is not one source for that information on the HUD site, but if you talked with a representative could get the same information – that CDBG funds can only be used when only serves LMI and that our trucks serve entire community which is not all LMI so answer for us is no.

Christensen inquired whether there were any infrastructure projects in Ward 3 that could be funded through these dollars, since that is LMI area. Hoover responded that Urban Development is working with Engineering to determine those projects. Glassheim asked what items are coming out of the charrettes that have been held. Hoover responded that sidewalk projects are a big request. Glassheim commented that there is a possibility of earmarking some of those dollars for those projects or could let all go to the CAC and have those projects compete with other submissions.

The group discussed whether or not to specify that some funds would go to MUNI area for needed projects. Duquette stated that it would be a solid investment to get things completed in that area in a short time frame and if they are coming from the charrette then maybe could earmark those dollars and get the projects done. The group discussed whether it would be appropriate to set aside all of the bricks and mortar dollars for the MUNI area or whether should split and take some, then leave some for allocation, as a way to phase in the use of these funds for needed City infrastructure projects rather than nonprofit use. Hoover stated that another way to do that is to instruct the CAC that projects submitted in the MUNI neighborhood are a priority of the City and then submit along with other projects that come in from nonprofits and see how it comes out, as Council does still have ability to shift the funding if they deem it appropriate when it comes to them for approval. The group discussed that if some is earmarked then could also schedule out the projects so that some are done in 2009, 2010, 2011, etc. and still leaves some available for other community needs that may be proposed. The group discussed various allocations between an earmarked amount for MUNI projects and what amount would be used for bricks & mortar.

Motion by Christensen, second by Glassheim, to recommend allocation $150,000 of funds to projects in the MUNI neighborhood and $350,000 to Bricks & Mortar.

Duquette stated that this seems to be a good basis to begin, as it allows research to continue on determining projects that fit this funding source over the next couple of years and can schedule those out and still allows for potential needs that may come up in the nonprofit community to be met. McNamara stated that he is still more inclined to give guidance to CAC and submit our projects along with others and see how they come out. Richards added that you could end up with the CAC giving all to MUNI or they could then be compelled by testimony from nonprofit needs and give all to that and then Council has difficult decision to face if they want to change what the CAC recommended or find other funding source for MUNI projects. The group discussed this and whether the allocation moved will be enough to get started in the MUNI area and determined that perhaps the $150,000 should be used as a minimum level and make guidance that CAC can still award more to those projects.

Upon call for the question, Aye: All. Motion Carried.

Richards stated that the committee also needed to approve the proposed schedule and determine whether they would like to add additional members to the CAC as discussed earlier.

Consensus of the group was that the schedule was appropriate and should move forward to COW.

Motion by McNamara, second by Glassheim, to recommend addition of positions to the Citizen Advisory Committee which would be one representative from each of the following: Northeast Human Service Center, United Way, UND Social Work Department, The Chamber, County Social Services, and City Council. Aye: All. Motion Carried. Consensus of the group is to recommend that Council Member Glassheim represent the City Council on the CAC.

Meeting adjourned 6:45 p.m.

Respectfully submitted,


Sherie Lundmark
Admin Spec Sr.