City of Grand Forks, North Dakota

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	MINUTES/FINANCE COMMITTEE Tuesday, April 12, 1994 - 3:30 p.m. Members present: Kulas, Johnson, McCabe, Shores. 1. Matter of setting sale of up to $1.5 Million in tax increment bonds for GFG Food Services (GFG Real Estate L.L.C.) Wally Dornfeld, Springsted, Inc., reviewed preliminary recommendations for the GFG Food Service, that the city assessor put number to this project and determined amount of tax increment available to pay the cost os the bonds and developed scenario re. size of bond issue; that were talking about $1.5 Million, it has been determined that the amount of increment that would be received by the City will only be sufficient to support $1,310,000 in bonds. He also stated that because not receiving any increment on this project until 1997, they have included capitalized interest cost which should take care of these interest payments in 1995 and 1996; they are estimating issuance cost of $23,000 and allowing for discount bidding of $15,720, and that the net proceeds available for the construction of the project would be $1,082,375; that this amount down and reason is because of increase in interest rates. He also noted that the City is planning to issue $20M for the Hospital, and this will put City into a non-bank qualified situation, and they have forwarded agreements to the City and Hospital with the Hospital making up the difference between non-bank qualified and bank-qualified. He also noted that they have allowed for call feature in the issue, and recommended that the City go for rating and hopefully City would maintain its double A category. He stated they have taken into consideration federal rebate arbitrage, but don't feel there would be a problem with that as dollars would be going out quite quickly; and are recommending sale date of May 16. Mr. Dornfeld reviewed summary of interest figures, net levy required and amount necessary to amortize the bond issue, estimated increment income and annual and accumulative surplus; that they show an accumulative surplus of $200,000 in 1997 and have an ending balance of about $15,600 based on project interest rates and estimated increment. Mr. Craigmile of GFG, stated that the net amount of proceeds is less than anticipated, but they are working with other funding sources to make up the difference. Mel Carsen, city assessor, reported that his office will make appraisal at end of construction and are trying to project what that might be at this point. It was also reported by Mr. Schmisek that they flow funds into the project when receive bill for qualified work. Mr. Shores suggested pro-rating funds throughout project, and Mr. Swanson reported that this is different than other TIF projects in that there are only certain qualified expenses that are eligible, that in most part preliminary expenses, such as ground prep., some utilities rather MINUTES/FINANCE COMMITTEE Tuesday, April 12, 1994 - Page 2 than bricks and mortar. He stated concerns valid but apply more to urban development tax increment financing; at this stage sees no particular concern from his office. Moved by Shores and Johnson that we adopt a resolution relating to the issuance of $1,310,000 General Obligation Tax Increment bonds, Series 1994A, and calling for the public sale thereof. Motion carried. 2. Matter of setting sale of $486,000 G.O. Bonds for flood control study. Mr. Schmisek reported they need authorization to fund this project; they had talked about funding through G.O. issue, with refinancing of 1989 flood issue, and to tie the two together to try to keep the mill levy at the same dollar amount; but in looking at the 1989 issue, find that those bonds not callable until 1997; that if fund this project on its own, would be a ten year issue at about $60,000/year, which is 1 mill. He reported that in visiting with the mayor, that the infrastructure account has built up to about $1.9 Million and that money sitting there for various projects, Truck Plaza funded out of that; and they felt this was also appropriate to pay for this initial part of the flood control study, this is not a project that can be special assessed, have option of paying directly or paying $600,000 over 10 years, but would need committee's direction to do that. City's share of study 50% (Phases I and II); and after payment of initial study, would end up with $600-700,000 left in the fund. There was some discussion whether City obligated to continue with Phases II and IV, after spending large amount of funds for the study, or wasting that money. Mr. Grasser stated they have about $1M study, that project broken down into 5-6 categories, can stop process at any time; and stated that there benefits to the City from the study - aerial photography (topographic may), soil borings around river and dikes showing stability, etc. would be valuable tools for engineering department. He also reported that the bid for aerial photography came in at $113,000, and had been est. at $200,000. Mr. Swanson stated they would need to make a specific finding that this is an eligible expenditure, language of sales tax states infrastructure improvement, that question is whether preliminary design or planning same as improvement. Mr. Swanson stated it was a matter of how to fund, not whether to fund; that council hasn't made commitment that will move beyond Phases I and II. The committee asked Mr. Swanson to research whether can legally do it; Mr. Swanson stated he can research, but not sure can give definitive answer; whether study will result in an improvement, that's the issue. Mr. Grasser stated that they can't do infrastructure without preliminary engineering. MINUTES/FINANCE COMMITTEE Tuesday, April 12, 1994 - Page 3 The committee directed the city attorney to research, and report back at next meeting. Held in committee. 3. Applications for three-year remodeling exemptions: Mel Carsen, city assessor, reviewed applications and recommended approval of the applications: a) 711 North Washington Street This application by Riverfork Credit Union, they purchased building and remodeled and improved first floor, and qualify. b) 1619 South 19th Street Ap. by Larry Sherwin, single-family house, qualifies. c) 1300 Lincoln Drive Ap by Ken Svedjan, who did considerable remodeling, and qualifies. d) 2515 South Washington Street Ap. by Goodman's Family Furniture, who did considerable remodeling, and qualifies. e) 716 South 25th Street f) 736 South 25th Street g) 2523 7th Avenue South h) 2529 7th Avenue South i) 2603 7th Avenue South Ap. for properties e) through i) owned by Virgil Stenberg and Terry Farder, Stratford Apartments (formerly RBJ Apts.), and applicant qualifies. Moved by McCabe and Shores that the applications be approved. Motion carried. 4. Matter of sale of Lot 15, Block 1, Rydell-West Subdivision. Jack Wavra, rep. Grand Forks Equipment, Inc., was present; they had made offer of $5200.00 for the property. It was reported that City had property listed for $8500; that lot is fairly low, and is land-locked. Mr. Swanson briefly reviewed purchase agreement and raised several questions re. provisions of the agreement, i.e., City to pay title insurance or abstract, requires City to pay specials (no special assessments), and "City will make bona fide effort to bring property up to grade during 1994-1995". Mr. Wavra stated they would waive title insurance provision, and other provision wouldn't obligate City, good faith effort to bring up to grade. Mr. Schmisek reported that in talking to engineering department, their first priority for dirt is to landfill. After further discussion it was moved by Shores and Johnson to offer property for sale for $6,500, with no contingencies as far as title or dirt work, in an "as is" condition; and that the city attorney handle documentation of the sale. Motion carried. 5. Matter of vehicle mileage reimbursement through grant funds for use of private vehicle. MINUTES/FINANCE COMMITTEE Tuesday, April 12, 1994 - Page 4 Ken Schultz presented request for a higher reimbursement rate for mileage for the occupational health nurse who investigates agricultural related accidents/diseases; that she covers a 14 county area, with an office in Cavalier, ND; and has total miles of 19-20,000 per year with private vehicle. He asked whether because of high number of miles on private vehicle, and because funded 100% through grant, they would be able to increase mileage reimbursement for this position. It was noted that majority of miles out of city; and that grant goes from year to year, up to 5 years. Mr. Johnson asked whether they had considered leasing a vehicle; they had not. Moved by McCabe and Johnson to approve request and allow a mileage rate of 29 cents/per mile under the occupational health nurse grant only. Motion carried. 6. Matter of office furnishings for engineering department. Al Grasser presented request to update three offices currently equipped with drafting tables to CADD/P.C. work stations at a cost of $4300; to rehab. two corner offices to increase work area and provide P.C. work stations at cost of $1900, and to outfit part-time work station to original layout, $1,100, for a total cost of $7300. He reviewed proposed funding for the project as follows: $1370 from Building Fund, $2250 from sale of drafting tables, and $3680 from engineering dept. budget. Mr. Schmisek stated they would have to check to see where monies from sale of tables went, unanticipated income. Moved by Kulas and Shores to approve request for office furnishings in the amount of $7300, with funding as outlined. Motion carried. 7. Matter of office furnishings for public works department. Mr. Grasser reviewed request to purchase furnishings for two work stations in offices temporarily used by the city attorney and now vacated in the amount of $5562.63, with half of the funding from public works department and half from Building Fund from funds designated for new City Hall. Moved by McCabe and Johnson to approve request for office furnishings in the amount of $5562, with total funding from the public works department budget. Motion carried. 8. Grant application by GF Historic Preservation Commission. Harleen Young reviewed grant application in the amount of $28,000 ($16,800 federal funds and $11,200 matching share from City sales tax funds, Community Needs and citizens). Moved by Shores and McCabe to approve grant application and authorize submittal to the State. Motion carried. 9. Request to authorize creation of new community health nurse position funded by MCH and EPSDT grants. Deb Swanson presented request to the committee; that due to MINUTES/FINANCE COMMITTEE Tuesday, April 12, 1994 - Page 5 increase in Maternal Child Health Grant funding and vacancy in the Early Periodic Screening Diagnosis and Treatment Program, they were recommending combining of the two grants to provide for one full-time community health position, grant would absorb benefits. She stated they are requesting authorization to create another position, requirements are the same. She also reported that the request had been approved by the Board of Health. Moved by Johnson and McCabe to grant the request for one full-time position rather than part-time positions, if funds available. Motion carried. Howard Swanson, city attorney, reported that draft of new Civil Service Code covers concerns re. funding of positions; and that present Code does have provision re. lack of funding. 10. Matter of quiet title action on property in City Center Mall. Mr. Swanson reported that City sold building loc. on Lot 3 and NW one-half of Lot 5, Block 26, Original Townsite to Sam Silverman in 1983, that City had purchased the building (10 people owned it prior to 1983), that only 8 of the 10 signed the deed (2 people whose whereabouts unknown), that City sold building to Mr. Silverman and didn't have good title; and Mr. Silverman now asking what City is going to do. He stated City's options: 1) do nothing; 2) Mr. Silverman can fight title; 3) wait and see if people show up; or 4) bring quiet title action to clear title at their expense. He recommended 4) to the committee. Moved by Shores and McCabe to authorize city attorney's office to initiate quiet title action. Motion carried. Meeting adjourned. Alice Fontaine City Clerk Dated: 4/12/94.