Committee Minutes
ALERUS CENTER TASK FORCE
Thursday, February 11, 2010 - - 5:00 p.m. - - Council Chambers
Minutes
Present: Gershman, Christensen, Bakken, Bjerke, Block, Emmons, Glassheim, Hafner, Hutchison, Kreun, McNamara, Rygg, Thompson.
Absent: None.
1. Review and Finalization of Task Force Report.
Christensen stated that he had made the changes to the draft that were discussed last week and had emailed that out to the task force earlier, but then had made two other revisions after reviewing the minutes. Those changes were adding the last paragraph related to amending the Home Rule Charter via a vote and a sentence on page 4. Also on task force member’s desks is a draft with revisions from Glassheim.
The group reviewed the revisions from Glassheim’s draft.
On Page 1, consensus was to add comments “increased sales and property tax collections” after jobs on line 2.
On Page 2, under Alerus Commission Structure, change the section to reflect Glassheim’s revision for section 1, 2, and 5, delete section 3, section 4 remains unchanged.
(McNamara joins the meeting.)
On Page 3, Alerus Commission Activities, Accounting – the group discussed what information and the timing of the information that the City receives now from the Alerus Center. Christensen stated that the intent of the section is to expand the information so that the Finance Director is informed about what expenses are being paid directly by the Alerus Center. The group discussed what level of City involvement was possible, Consensus was to leave language as in Christensen’s draft, as just recommends that the Comission “explore” the coordination further.
Commission Meetings – Consensus was to add Glassheim’s suggestions.
Financial Reporting – Consensus was to add Glassheim’s suggestions.
On Page 4, Budget – Glassheim had proposed to delete the language in the draft, as the budget is prepared so far in advance that it may not accommodate the needs of the facility when considering the timing for scheduling events. The group discussed that the intent is not to hinder operations, but to encourage them to work towards not taking on events that would result in the facility showing a loss Rygg commented that she has to deal with similar guidelines and if opportunities come up that would be outside the budget needs to bring forth a budget adjustment to her board to determine a funding source and that is what are asking for here. Christensen stated that this is also included already in the ordinance that established the commission in section L and are just restating the need to follow this. Thompson stated that this is not saying any small change can’t happen in the budget but if it is something that you can forsee could create a shortfall then needs to come to Council. Hutchison commented that we are here because of budget issues and even though it was supposed to operate within a budget they haven’t been and like to see language left in to reinforce the expectation. The group discussed taking out the last sentence of the paragraph on budget.
The next paragraph should be modified to “stay within the budget and to strive to create a reserve”.
McNamara commented that all realize that this may not happen immediately, but can view this paragraph as a long term goal for the facility and work toward it.
Large Concerts/Regular Concerts/Regular Events – The duplication of this section has been deleted from the prior draft.
On Page 5, Fiscal Matters – Consensus was to change the draft to include Glassheim’s suggestion.
Mission Statement – Consensus to leave as written.
Business Plan – Consensus to leave first paragraph as written. Second paragraph – The group discussed the region and how the drawing region varies depending on the event and discussed ways to potentially change the wording defining the region. Consensus was to delete the wording defining the region.
Review of Relationships – Glassheim stated that he has a concern regarding placing the full focus on the Alerus Center for making these relationships better, as it takes work from both parties to improve it and we can’t control the other side. The group discussed that the intent was to let the Commission know that they should do their part in trying to make the relationships better. Rygg commented that there may be things that can be done that will improve the experience for clients, even if you can’t get to the point of being seamless. Hutchison stated that while we can’t force the other entities, we can let the Commission know what is expected of them. Emmons stated that he believes that making the proposed change weakens the language and not what the consensus of the commission was. McNamara added that Canad came and pointed out what they perceive as a problem and also made us aware that we are one of the most expensive and that CVB has been subsidizing conventions to bring them in and need to address some of these issues and make things better. He continued that perhaps this also opens up the dialogue as to what changes could be possible to improve the process for events and then if there are obstacles, the Commission comes back and explains here is what we can get done and here’s what we can’t and why, and then can look at it and see if there is a way for Council to assist with those issues.
Kreun stated that there was a good relationship with the Canad when Jasperson was there, but since he left has been turnover and start over with each new person coming in and that new person does not have the same perception as someone who’s been there all along and wants to point out that this is not something that the Alerus Center can do alone and being the only one making an effort will be very costly. McNamara replied that the Commission doesn’t have to do it alone, but are being directed to act as the agent to get the work started. Bakken pointed out that with the way the economy is, has been tough for many facilities and may continue to be a stumbling block and questioned that if our focus is on breaking even how we do that and still look at discounting rooms or services.
Christensen replied that if we look at and cut overhead then can be more competitive on pricing and need to make holding events at the facility easier. Block agreed that the language in this section needs to remain strong and that was consensus of the task force.
Following a vote consensus was to leave wording as in draft.
Convention Strategy – Emmons was not in favor of making the change as again it seems to weaken the intent of the task force. Glassheim replied that all were in agreement that seamless would be good, but also heard it was very difficult or maybe impossible to do and don’t want to set up a recommendation to fail. Rygg replied that from her experience, there are ways that things could be done better, maybe not joint computer system, but there are other ways and need to just get the people together to work on it. Christensen agreed and stated that should leave as is and let them work on it and see how far they can go and if hit a stumbling block, then let them bring it back and look at what they are. Hutchison also agreed with leaving the stronger wording and commented that we all realize that all recommendations may not be doable, why not ask and see what could be done.
McNamara commented that the suggested changes are more depictive of the way that the Commission operated away from the Council and the draft seems to be steering things to the way that we would like to see them operate in the future, which will be functionally better and with greater dialogue than in the past.
The group voted on the wording and prevailing vote was to leave draft as written.
Management of Events Center – Draft ok with minor spelling correction.
Commission/Event Center/Public Relations – Change the word “import” to “impact”, remainder of wording in first paragraph stays as in draft. The second paragraph should be changed to include Glassheim’s suggestions.
Glassheim suggested adding a new paragraph directed at City Council and their comments related to the facility. He stated that the intent is not to say they shouldn’t speak about the Alerus Center, but to realize that the comments that they make do have an impact on the facility. Rygg stated that it would seem appropriate that they would treat it the same as any other City department.
Christensen responded that perhaps Council did not exercise enough oversight in the past, but does not feel it is appropriate to suggest what City Council should or should not say or how they conduct themselves, particularly as a part of this report. Kreun stated that he would normally agree, but this facility is not like other department, it is in the business of attracting people and not muzzling anyone, just asking that they be more careful in making comments and keep in mind the effect that their comments could have on the facility. Rygg stated that she believes that Council Members should offer the same level of support to the Alerus Center that they do to other City departments. Thompson stated that they tried to incorporate some of that intent in the preamble to the report. Christensen agreed and stated that the tone of the report has been kept as positive as possible.
Gershman stated that this is a recommendation to the Commission, not the Council and so does not seem the appropriate place to address, but also for the task force to tell anyone what to say does not seem appropriate. Glassheim replied that he does not see this language as telling anyone what to say, but rather just asking them to think about the impacts their statements could have.
The group voted and majority was to not include the language in the report.
Contract Review – The group discussed the intent of this section and that it was being included based on past issues that have arisen, discussed that the City Attorney does review most, if not all, City contracts and therefore, should be reviewing Alerus Center contracts as well.
Kreun commented that there are some types of contracts such as for suite rental that the City Attorney did draft and would like to see language reflect that those would not need to be reviewed, since were created and as such should be in proper form.
Following further discussion, consensus was that wording will be changed to state that “All contract will go to the City Attorney for review.” Bakken commented that this seems to remove the contracts from being political.
On Page 7, Amendment to Home Rule Charter – Christensen stated that the intent is to add a recommendation that the Commission should work with the City Council on bringing to a vote of the public an amendment to the Home Rule Charter that would allow for use of the ¾% sales tax for same uses as the ¼% sales tax.
Consensus was to include the paragraph as drafted.
Escrow Account – Glassheim suggested addition of a section related to the establishment of an escrow account. He commented that Fargo has an escrow account for the remainder of their bond proceeds and use only the interest from it to fund capital maintenance on the facility and would be a funding source for those projects after the ¾% tax is done.
The group discussed whether there was enough information to get consensus support for this recommendation from the task force at this time, that most seemed to favor amending the Home Rule Charter, but not sure how much further to go at this time. Bjerke stated that at present they do have the ability to use the ¾ % for capital. McNamara supported the escrow account and that it be bluntly stated what the uses should be from the fund.
Hutchison stated that he personally is not sure of an amendment to allow for more uses for the ¾ % and could give onus that it was available for any use and allow for them to not focus as fully on being within budget as we intend them to and then all your funds get eaten away by a continuing shortfall. Christensen stated that it could also be the funding source to bring in the large concerts that some believe the community needs. Gershman added that right now shortfalls are being funded from other sales tax dollars that should be targeted for economic development and that is a detriment which a change in the home rule charter could help to correct. These comments led the group to reopen discussion on the Home Rule Charter amendment addition to the report.
The group discussed that any use of the funds must come to the Council for approval, so no automatic blank check for the funds to be used for operations. McNamara stated that he still shares Hutchison’s concern about shortfalls and need to make the facility operate within the budget parameters set and not sure that access to these funds won’t make the problem worse. Gershman agreed that these funds are not going to be an open account to encourage shortfalls and since Council controls the funds, they can control that they get used properly. Bakken agreed that City should maintain control of those funds and don’t want to continue to fund shortfalls from our City budget. He cautioned that need to prepare for the fact that the economy is not going to go back to what it was in 2006 and need to be mindful of that as we set our expectations.
Hafner commented that he agrees that there should be control by the Council over the funds and not given directly to the Alerus Center and that the funds only be used when deemed necessary by Council. He pointed out that everyone needs to realize that the facility is ours as taxpayers and we need to utilize it to make it successful.
The group reconsidered adding the Home Rule Charter amendment language and majority vote was to add the language.
McNamara commented that when discussion about any change in the Home Rule Charter is included it should be accurately presented that what is currently in the Home Rule Charter is what the citizens approved in their vote and that the bond covenants were written wrong and not have the appearance that this vote is a clerical correction, because it’s not and he does not feel that just because the bond covenant is written wrong is a good reason to make a change in what the citizens approved. Christensen replied that McNamara was correct, but things in the community and region have also changed since the vote was held and also we didn’t have the growth in Fargo that we currently have. McNamara stated that he still feels that it would be more appropriate to leave out a mention of the bond covenants in the language related to a change in the Home Rule Charter.
Consensus of the group was that they want to keep the matter clear for the people in any vote that is held and not to give the appearance of a correction to a clerical error.
The group voted and majority approved.
Christensen will draft the final report. The group discussed how long the Commission should have to review and respond to the Council. Intent will be to get the report to the Commission at its February 17 meeting and then look for response back by March 22 or April 5 meeting.
The group discussed the items to include in Appendix A.
Bjerke requested that a Roll Call vote be taken on the full report. Upon call for the question, Aye: Gershman, Christensen, McNamara, Hutchison, Glassheim, Kreun, Hafner, Bakken, Thompson, Emmons, Block, Rygg. Nay: Bjerke. Majority approves report.
Meeting adjourned at 7:10 p.m.
Respectfully submitted,
Sherie Lundmark
Admin Spec Sr.