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MINUTES/FINANCE COMMITTEE
Tuesday, March 12, 1996 - 3:45 p.m.

ROLL CALL: Carpenter, Babinchak, Geller.

1. Matter of sale of City lot.
Mr. Schmisek reported that this is informational at this time; that they now have est. figures from engineering on special assessments for sanitary sewer and water for those lots; and that he and Mr. Carsen will be negotiating sale with Mr. Doe. It was reported that the est. cost for sanitary sewer and water $70,400 and if split to the 3 lots, $23,467 per lot. Mr. Carsen ques- tioned if they set new prices on the lots, would they have to re- advertise. Mr. Swanson advised that motion was to negotiate at whatever level inclined to do; that they could re-advertise or could move forward into negotiations. Mr. Schmisek reported there are no other bids on the other two lots, some interest expressed by two parties. Mr. Carsen reported there have never been any formal bids on the other two lots except by Mr. Doe. The committee questioned whether they could negotiate sale of all three lots, and Mr. Swanson stated they could.

It was noted that Mr. Doe's proposal is to buy on contract for deed, and Mr. Schmisek stated they have done this is the past; however, committee had some concerns re. selling on contract for deed.

After further discussion the committee directed that staff negotiate the sale, preferably not by contract for deed, and to negotiate sale of all three lots. Held in comm.

2. Application for abatement of taxes:
a) Carter Passa, 812 South 10th Street.
Mr. Carsen reported this is relatively old house in run-down condition, Mr. Pass purchased in December 1995 for $16,250; that they re-appraised recently at $18,000, that Mr. Passa asking for reduction down from $28,900, and his recommendation is to grant that. Moved by Geller and Babinchak to approve application and reduce valuation of the property from $28,900 to $18,000. Motion carried.

3. Applications for exemption of improvements to commercial property: a) Residual Materials, Inc., 222 Red Dot Place
b) Popplers Music Store, 123 DeMers Avenue
Mr. Carsen reported work on both of these applications started early in 1995, that new guidelines which are more restrictive went into effect in November of 1995, and remodeling done prior to effective date of new guidelines. He stated they may have two more applications similar to this. It was noted that the exemptions are for three-years. Moved by Babinchak and Geller to approve the applications as presented. Motion carried.

4. Matter of proposal to increase liability insurance coverage.
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Mr. Schmisek reported his office received word from North Dakota Insurance Reserve Fund that they now have a $2 million liability coverage, that Thompson Insurance sent some info. on this, and questioned whether City would want to subscribe to that, premium is about $18-19,000/year. Our current liability premium came in $102,000 less than last year's. He stated he has some concerns on why City would want to increase when we seem to have fairly good protection now and State has limit coverage on that. Mr. Swanson advised that by Statute a political sub- division cannot be sued under State law for more than $250,000 per individual injured by action of City employee, agent or officer, or a max. of $500,000 per incident; those limits of coverage would not apply to certain actions that might be brought under federal law and in those cases have $1 million in coverage. He stated that in his tenure they have never had any case which has exhausted either our individual liability amounts or our collective liability amounts, never had settlement nor verdict in excess of that, and feels comfortable with the $1 million limits; however, that's not to say that we couldn't reach a situation or case where we would have exposure above and beyond $1 million, He stated that if that were to occur the City does have a Tort Liability Fund that could be utilized to pay a judgment. He stated that the difference in cost about $20,000, and doesn't have recommendation for the committee because matter of policy whether $20,000 worthy expenditure for the additional coverage. He stated that a comment on reduction in premiums reflects only one thing, and that is loss ratio for the fiscal year 1995-96 was more favorable than it had been in previous years; had less litigation last year. It was noted that the premium will vary by usage.

After some discussion Mr. Swanson stated there are always challenges to constitutionality of those caps, most states have been upholding as constitutional limit, not to say that couldn't change. He stated that if court were to strike down our coverage limitation by statute or the legislature were to change that coverage, we would have opportunity to acquire additional coverage. He stated that the only way the $1 million comes into play is 1) if court of competent jurisdiction strikes down the $250/500,000 coverages or if claim not governed by the state caps (Section 1983 civil rights violation).

Moved by Geller and Babinchak to retain current limits of coverage. Motion carried.

5. Matter review of documents re. amendment to Home Rule Charter (use tax).
Mr. Swanson reported that when the council acted in February to place the issue of sales tax on the agenda, however, resolu- tion was not drafted prior to that meeting, that he has drafted the resolution and provided notice and proposal to amend the Home Rule Charter, which would be published in the Grand Forks Herald prior to the June election. He stated that because of sparse materials available in February, it may be appropriate that the
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council now adopt this resolution. He stated that the amendment is simply proposing to the electorate whether or not they want a use tax, disposition of funds identical, administration identical; and only thing proposing is whether current Home Rule Charter should be amended to include a use tax; if they say no, Charter would stay as is.

Moved by Babinchak and Geller to adopt the resolution. Motion carried.

6. Matter of 1995 grant from ND state Historical Society.
Mr. Schmisek reported this grant previously approved in the amount of $27,234.00 (federal funds request was $16,253 with a matching share of $10,981); however, the State Historical Society has changed their grant year and has caused grant to be divided between a 1994 amount and a 1995 amount, and they are asking for a new document to be signed and authorized. He stated that the amounts that would impact on the 1995 grant which covers period 03/01/95 through 08/31/96 is a federal fund request of $9,963 and a matching share of $6,643, and the reason we are signing and authorizing is that source is the Human Needs grant/donations area of the budget. It was reported that Mr. Swanson has reviewed the agreement.

Moved by Geller and Babinchak to approve grant application and to authorize proper City officials to sign said application. Motion carried.

7. Matter of pledge pool agreement with First National Bank.
Mr. Schmisek presented matter of pledge pool agreement for the safekeeping of pledged securities; that First National Bank is required to pledge securities in our name to insure our deposits with them, they are requesting us to look at an agreement for a pooled pledge agreement through the Bank of North Dakota with entities listed (City of Northwood, City of Reiles Acres, City of West Fargo, City of Horace, Cass County, Northwood Public School District, Grand Forks Public School District, and several other entities). Mr. Schmisek stated he doesn't anticipate any down-side to this.

Moved by Geller and Babinchak to authorize proper City officials to enter into the pool pledge agreement, subject to review and approval of the agreement by the city attorney. Motion carried.

Meeting adjourned at 4:20 p.m.

Alice Fontaine
City Clerk

Dated: 03/14/96.