Council Minutes

Minutes of Grand Forks City Council/Committee of the Whole
Monday, August 24, 2009 - 5:30 p.m._________________ __

The City Council met as the Committee of the Whole on Monday, August 24, 2009 at 5:30 p.m. in the Council Chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Bjerke, Glassheim, Gershman, Christensen, Kreun - 5; absent: Council Member Bakken - 1.

Mayor Brown commented on various items during the past week and upcoming events:
Welcome to University of North Dakota students and that our elementary, middle and high schools are starting up this week and that means a lot of traffic, human and vehicles, around the schools.
Congratulations to organizers for this year's Blues on the Red performances in Town Square, last one was this past Saturday and had a good turnout.
There will not be a council meeting next Monday as it is the fifth Monday of the month, next meeting will be on Tuesday, September 8, 2009, due to Labor Day.

The National Association of County and Health Officials has honored the Grand Forks Public Health Department for implementing a Vaccination on Wheels Program, this award comes from the National Association of County and City Health officials. This program provided vaccination directly to refugee children with a required daycare and school immunizations and resulted in 93 vaccinations protecting the children from 12 vaccine preventable diseases. Congratulations to the Public Health Department and the Disease Prevention Team of Kathy, Twyla and Terri, and thanked them for the great work they did for this national recognition, 116 competed and Grand Forks was chosen.

2.1 Resolution authorizing issuance and sale of:
Sanitation Reserve Revenue Bonds, Series 2009-A
Sewer Reserve Revenue and Refunding Bonds, Series 2009-B
Refunding Improvement Refunding Bonds, Series 2009-C
Water Reserve Revenue Refunding Bonds, Series 2009-D
Brenda Krueger, Springsted, Inc., reported there are four bond issues before you and going to market on September 28. Two of the bond issues are for new projects, Sanitation Reserve Revenue Bonds, 2009A, are primarily for the new landfill, and the Sewer Reserve Revenue, 2009B, are for new sewer projects and a refunding of an existing sewer bond rolled into that. The Sanitation Bonds for $9 million and will be a 30-year bond which reflects the life of the landfill and would take bids two ways, one is your normal tax exempt bonds and the other is a taxable Build America Bond, which is a taxable bond so the investor get taxable rights and what you get in return over the life of the bond is a credit or rebate equal to 35% of every interest payment, they will offer this to the underwriters so they can bid it, either way, and on the day of the sale they will take the tax exempt bid and the taxable BAB bid and net out to see which is the best interest cost to the City.

Council Member McNamara reported present.

She stated since the beginning of the summer, the Build America bonds are a better overall interest rate than the tax exempt, they are 30-year bonds. If the Build America bonds were accepted, would take some additional administration by finance staff because over the life of the bonds you have to submit to the IRS a form in advance of the interest payment date requesting that rebate, they have it all laid out so can provide it to staff what they need to do, what needs to be filed, some significant interest cost savings but well worth the effort.

Sewer Bonds will be 20-year bonds, level debt service, refundings cannot be done as Build America Bonds and since have Sewer Refunding as well as new projects, would be more advantageous to combine the new money and Sewer Refunding together to get the advantage of the lower cost of issuance and also get larger maturity and would not recommend that you offer the Sewer Bond as Build America Bonds as they want to incorporate the refunding.

On the additional issues they are both refunding and are 2009-C, Refunding Improvement Refunding Bonds, and 2009-D, the Water Reserve Revenue Bonds. All of the refundings were identified last year by the city council, put them into a resolution giving the auditor the ability to go ahead with the refunding when interest rates were good. Interest rates have stayed low and have some new money issues and are closer to the first call date so don't have to escrow the money as long. There are three criteria that the finance department uses when evaluating refunding and have met the criteria for every issue,

She stated she would be back on the 28th of September with the results of the bids - that they continue to monitor that market between now and the end of September and if anything changes, will be back in touch with the finance department.

In answer to Council Member McNamara's question of what is difference between municipal revenue bonds and the bonds with the credits, Ms. Krueger stated that one is normal tax exempt bond and the other is a taxable bond to the investor, only difference are the interest rates for the City; that you have to apply for the rebate on the Build America bonds, other than that have same call feature, but there is an extraordinary call provision in the Build America bonds. In the event the federal government were to take away the Build America bonds and the credit, could call the bonds as early as 2015, other than that everything is the same.

2.2 Amendment to the Event Center Commission ordinance (amending Section 24-0203
of the Grand Forks City Code)._____________________________________________
The ordinance would change membership of the Alerus Commission so that membership shall consist of 5 members at large rather than one member being a rep. from a hotel, restaurant or on-sale liquor industry.

Council Member Gershman stated he understands why the Alerus Commission wants to do this but has concern that the quarter-cent sales tax is levied on the hotels, restaurants and liquor that goes to help part of the subsidy of operating expenses with the Alerus, but can't reconcile taking a group of businesses off of the commission who are actually being taxed for the Alerus Center, and unless convinced he will oppose this and ask that council consider taking off a rep. of the Alerus Commission from an industry or businesses that are being taxed where many others are not and would have representation. That $388,000 is raised by these businesses through the quarter cent sales tax, and consider next week if we should continue to have a rep. of the hotel, restaurant or on-sale liquor industry.

Council Member Christensen stated he is concerned, that there is a 7 member commission and seem to continue to have issues, but maybe time for us to re-examine the strategy, this commission was in place when they got on the council and not to say there shouldn't be a rep. from the UND, but curious to their involvement and if continue to have these continued relationships in this community but look at the structure of the Alerus, whether 5 or 7 person commission, and is more concerned about what the Commission does and the input they have in the running of the Alerus as opposed to the 5 or 7 people that sit on it. That he is curious about the guidance they are getting from the Commission, guidance into moving forward with some of these strategies - biggest asset and biggest problem and would like to get rid of this problem - get it settled down. Should address and make a decision.

Council Member Bjerke stated that in November they voted on the Alerus Commission, that he compromised and voted for those people and about 6 weeks later found out about $900,000 transferred from the City to the Alerus and that apparently only two people in this town knew about, and doesn't think the Alerus Commission is looking out for the bottom line, and next week will be putting forth a motion affecting this ordinance, paragraph (2) which talks about terms and his motion would be "…Any Commissioner that serves two consecutive terms may not serve again until a period of three years has elapsed.", time for some diversity on the Alerus Commission and start making some changes.

Council Member McNamara stated he would like comments from Mr. Kreun re. Mr. Gershman's argument about retaining somebody from the hospitality industry. Council Member Kreun stated they have reviewed this a number of times, and when they advertised for person in this capacity, nobody applied, very demanding job, creates conflict of interest for them so they have to be very cautious on how they react and how they address their issues.

The person that was there had a conflict and resigned because of it, always had rep. from the University, only person missing is the food and beverage, that they have a lot of proprietary information that they don't feel is proper to give out, this is a public facility but asked to run it in a private manner and they have VenuWorks to run the private portion and the City is the owner, very delicate balance, and looking for and asking for aps and bring it to the council, but Mayor's choice. He stated they spent 6 months going through the reporting process and have done everything that has been asked of them, doing quite well as far as concessions and catering, etc. - could have a person from food and beverage, not really appropriate for us as a business to do that, and if want to put a competitor on there and give them the proprietary info. that is our choice, but would recommend against it.

Council Member Gershman stated when he made his comments, didn't intend for this to become attack of Alerus Center nor did he want his questioning of taking this rep. off to be interpreted as being against the Alerus Center, that this is the largest single investment in the city, we have to let those people get their work done, need to make the improvements and supports that, but lets tone it down a little bit, the citizens voted for the Alerus Center and incumbent upon elected officials that once decision by the public is made, that we do everything we can to make it successful - thinks in most cases those on the council who question the Alerus Center, would hope and think are questioning it with good intentions because they want it to be better, and will consider comments made.

Council Member Kreun stated he takes offense that individual who made the comment that we don't take the financial concerns of the city at heart, huge operation and very difficult operation, no credit for any good - only negative aspects that has come across and will work within the budget as best as can, and no different than any other part of the city- that to say the individuals on the Alerus Comm. don't take the financial aspects seriously is incorrect statement.

Council Member Christensen stated if there is going to be some peace as to the Alerus, there has to be some transparency, knows that we had good conversation and resolution the first quarter of this year, but even if change ordinance, can change it again. - let's review the business plan, change structure if have to, but let's put it behind us for several years.

Council Member Kreun responded to the transparency issue, everything is reported, gone through audit and every dollar accounted for, it is the internal workings of how do you get there that becomes somewhat proprietary; costs for goods, for food, rooms, etc. should be kept within our confines, that have done everything that the finance and development committee, finance department and Brady's have asked, and not sure how much more transparency can give, other than if give away the information of how they get there, and then run into a problem - don't want to give away how they get to those points, that is business aspect of it - every department has a fund over and above their budget to cover some of their losses, don't always need it, but is available - making progress but get zero credit for making any progress and only talk about negative aspect.

Council Member Gershman stated that Mr. Kreun made a compelling argument about having a full service hotel on the Commission but by next week would like you to consider a limited service hotel, that does not have catering and would represent that portion. Mr. Kreun stated have been open about suggestions for year and half and taken a lot of suggestions and incorporated them into all of their reporting, business aspects and will do the same here.

Council Member Christensen stated what he hears is full service hotel, not too many in this town and if that individual is appointed, would be the same argument again re. proprietary information, could be discussed later.

2.3 Johnson Farms land buy back.
There were no comments.

2.4 Plans and specifications for Project No. 6272, Dist. No. 99, Cherry Street
reconstruction from 17th Ave.S. to 25th Ave.S.______________________
There were no comments.

2.5 Budget amendment - Fire Dept.
This item was pulled from the agenda.

2.6 Matter of wireless communication premises site lease agreements renewal and addendum.
Todd Feland, public works director, reviewed and gave corrected information to the council, on monthly fees for wireless communication premises which are in process of being renewed. That our current rate for a water tower lease is $1,200 rather than $2,200; and that on the basis of $1,200 which is our current lease amount and which goes to 2011, at the committee meeting had suggested that rate go to $1500/mo. in 2011 and in 2016 suggested that should go to $2000/mo. The finance/development committee did concur with the 10 year agreement and in place of the second 5-year term, which would run from 2016 to 2021, Glassheim made the motion to make that $2500/mo rather than $2000. The City of Fargo has similar agreements on their wireless tower agreements and have $1200/mo. similar to what we have and they have 5-year terms with increase at the end of each 5-year period.

Council Member Bjerke noted that the wireless companies put up equipment, and would prefer keeping cost at $2,000/mo. and will make that motion next week - thinks 3% increase is enough when consider that people with cell phones will be paying for this, not the company, and as we do have some expenses and recoup those and keep low for the customers. Council Member Gershman stated he would assume that the rates that the cell phone companies are going to charge would not go down because we go from $1200 to $1500/mo - tens of thousands of users and rates relatively standard so we can play nice and won't make one bit of difference, is a miniscule amount that would be passed on anyway - pass on increased revenue for the City.

2.7 Matter of agreement for the Grand Forks Water Treatment technology tours, preliminary pilot study planning, and preliminary funding development.____
There were no comments.

MAYOR AND COUNCIL MEMBER COMMENTS

1) Council Member Glassheim stated that he find the continuing assaults on the Alerus to be aggravating to him personally, doesn't like to be serving on a council that perpetually does it and stated his belief that the presence of the Alerus where tens of thousands go into the coffers of the city, and that if there are some losses sometimes, they are more than made up for by the economic activity it generates; that he is really exhausted with some of these critiques.

2) Council Member Kreun stated he is too, that he works extremely hard, doesn't want this or anything else to go down, is very concerned about our tax dollars in this community, how we spend them and how we make them, should keep a positive attitude and go forward rather than backward all the time.

3) Council Member Gershman stated he wanted to say one thing - that at council they have had some serious disagreements but it is not personal, and after meetings are collegial and that is very important.

ADJOURN

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

Respectfully submitted,



Saroj Jerath
City Auditor