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	MINUTES/FINANCE COMMITTEE Tuesday, May 14, 1996 - 3:45 p.m. Members present: Carpenter, Babinchak, McCabe. 1. Matter of financing youth commission. Chairman Carpenter reported this item had been held from previous meeting as committee wanted to visit with other council members, etc. and that the matter was also discussed at the bud- get framework committee. He stated that he was not 100% comfort- able with this and not sure it will accomplish purpose people are professing, and not comfortable that this is one of 9 KPA (key performance areas) that are coming forward from 20/20, but will present a proposal. He presented the following proposal: that the council recommend for 1996 that the City allocate $19,000 from miscellaneous cash carryover for this program and include in the 1997 budget $37,000 to be used for this program, recognizing the fact that if the youth commission needs their full $50,000 budget, they will have to raise other funds; and also that by December 31, 1997 the effectiveness of this commission and coordinator position be evaluated to see if actually meeting the objectives and goals set and if not either to change the program in some manner or to eliminate the program. He stated he would not like to see an on-going program that is not accomplishing what they want and money better spent some other way. Chairman Carpenter asked for comments from the audience. Bob Gustafson, Chamber of Commerce, that it has been two years since community visioning process started with lot of time and effort by many citizens in community, that formal planning phase concluded yesterday; that there are some ambitious key per- formance areas/committees within the community visioning process that are anxious to get on with their agendas. He stated that there are 9 issue areas, and that they have agreed that they need to put a leadership team together to move forward in implementing the many recommendations that are in the visioning plan. He stated they have a steering committee of 15 to 20 people that have been involved in meetings/discussions in helping to move the process along, and that there was consensus that as soon as the planning phase formally done, it was important that the key performance area chairs along with steering committee reconvene and begin to put implementation plan together. He stated his concern is only for the requests that might start to line up to come to the City and present requests and don't want them moving in too many directions too fast so that they find themselves at odds with one another. He stated he supports fully the intention of people here to support the youth commission effort; but would like to see the implementation team have little time to work on strategy so that this can be somewhat united and better informed. Mayor Polovitz stated that this is very important program and important that they start now. Dennis Reisnour, United Hospital, stated that Hospital has direct MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 2 stake in health of kids in the community, and direct stake in social well-being of kids in Grand Forks; that what they see in hospitals is very often result of social ills in the city and state: car accidents, drug overdoses, violence, unwanted preg- nancies, low birth rate babies, etc.; that they worked with group of 65 agencies in Grand Forks in 1994 and 1995 to develop a com- munity health assessment focusing on health needs but move into social issues as well. He stated that the number one priority of this group of 65 agencies was improving health, safety and social well-being of children in Grand Forks. He stated that the Hos- pital supports this program and will be involved in efforts in that regard. He stated that volunteers do lot and accomplish lot of things, but to make progress over the long run need someone paid and accountable for coordinating efforts and bringing every- thing together. He stated they support the youth commission because it provides the opportunity to develop concerted effort to do those things and meet those priorities for improving the community for kids, and urged committee to support the creation of and funding for the youth commission Pat Berger, United Way, stated they work with lot of agencies involved with youth, that youth enhancement programs one of the focus areas that they raise funds for during the fall months and is something they will continue to do and continue to support. She stated that there will probably be funds coming from the United Way agencies and will be working with them and the City to coordinate them; that they support City and that they want to be involved in any coalition efforts. Tom Nielsen, police dept. gang suppression unit, stated this is important issue, and presented information received from other police departments, gang task forces, etc. around the country: that national trend is that gangs are moving to smaller com- munities. He stated they have 5 organized street gangs in the city today. He stated they believe that 50% of auto burglaries are gang-related, that is how they start; next step narcotics: have Mexican brown heroin in town, crack, marihuana, cocaine, and amphetamines, etc. available, with huge profits to be made, and that Greater Grand Forks area virgin territory. He stated that founders of gangs are not Grand Forks kids, but hard-core kids from large metropolitan areas who have come to Grand Forks. He stated that money being requested is pittance, that if this be- comes rooted will never get rid of it, potential cost to everyone is millions of dollars; and urged support of this program. Matt Engelstad, freshman at Red River High School, stated he would like to see more youth centered activities in the community and to make youth aware of them. Shari Doe, Valley Health, stated she has worked with youth for 20 years, that youth has something to say and one of the ways we MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 3 can communicate to them that we believe they have position and place in our community is to recognize that they are important, and supports the efforts on behalf of the youth KPA in forming a youth commission, and urged support of the commission. Greg Mannel, pastor at United Lutheran Church, stated he was member of the health and human service KPA at 20/20 Visioning, and that their intent and missions are to see that what youth commission sponsoring and promoting really dovetails and supports what their prevention focus about, promoting health and safety in the Grand Forks community, that there are lot of resources avail- able, but bringing together, providing teamwork and collaboration could be very valuable. Polly Kilbride; spoke in support of the youth commission and financing of the program and coordinator position. Moved by Carpenter to establish a youth commission with a total budget of $25,000 in 1996 with $6,000 from mayor's city council budget, and $19,000 from miscellaneous cash carryover; and that we further recommend to the budget framework committee and city council that $37,000 be included in the 1997 budget for the youth commission. The motion was seconded by Babinchak. Member McCabe stated he was not in favor of having a government funded position and concerned with just giving salary to someone working independently, with no oversight, and would be more in favor of funding someone under another department, possibly police department. Mayor Polovitz stated that the concept of this committee is more than just a police committee, is a com- munity job, and would be under jurisdiction of mayor's office. Carpenter stated he would assume that the youth commission will have a chair and vice chair and they will have responsibilities for oversight and staff in addition to the mayor's office. Dan Gordon, human resources director, stated they have a couple of success stories on how something of similar structure has succeeded, one is project coordinator for the River Forks Commission, another one is the project coordinator for 20/20. He stated that qualifications in a candidate they select will be determined with the interview panel, with areas to be looked at, whether they are self-starters, whether they can be trusted, how accountable under job description on tasks before them. Upon call for the question, the motion carried. 2. Matter of offer to purchase City-owned lot in Auditor's Sub- division No. 27. Candi Stjern, acct., reported that the City had received an offer for Lot 6 in the amount of $9,500.00 from Alan B. Warcup or First American Bank Valley, which is approx. 75% of the value set MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 4 by the city assessor's office, and that the finance department was recommending acceptance of the offer, contingent upon review by the city attorney. Mr. Swanson reported he had reviewed documents and they appeared to be in order, that only contingency was that City would have to clear debris from the lot prior to sale. Moved by Babinchak and McCabe to accept the offer of $9,500.00. Motion carried 3. Audit report, TCI of North Dakota, Inc. for year ended December 3l, 1995. Mrs. Stjern reported that finance department reviewed report that it corresponds to receipts, and recommended to receive and file. Mr. Swanson stated he has not reviewed the report. It was noted that the purpose of the audit is to verify franchise taxes and collections based on receipts they have received. Moved by Babinchak and McCabe to receive and file. Motion carried. 4. Matter of cable t.v. franchise negotiations. Howard Swanson, city attorney, reported on status of negotiations; that they have been negotiating for approx. one year, have 41-page document they are working off of and which covers everything as far as cable franchises. He stated that there are several items they are not in agreement on and there is negotiation remaining: ie., definition of gross revenue, term of franchise agreement and some other details. He reported that the present 10-year franchise agreement will expire in the fall of 1996. He also reported that prior to on-set of negotiations, a public hearing was held as required under the 1984 Cable Act, one person attended the hearing, which was designed to determine a number of criteria for the renewal of the franchise agreement; as a result of the hearing the finance committee (which was chaired by Mr. Ludwik Kulas and vice chaired by Mr. Arden Shores) re- ceived a report from him which laid out four premises for nego- tiation: 1) basic needs (use of R/W, compaction of R/W, repair of R/W, that the cable company meet min. service standards promulgated by the FCC, certain bond and insurance requirements, and certain minimum customer standards; 2) that the franchise fee and revenue be increased from 4 to maximum 5% fee; 3) that except for increase in franchise fee, nothing was to adversely affect rates for the basic cable service; and 4) that Grand Forks should attempt to coordinate its cable franchise agreement with the East Grand Forks agreement; that East Grand Forks recently renego- tiated its agreement with TCI and there is approx. 8 years remaining on that agreement. He stated it was his suggestion, and approved by the committee, that City position itself in such a manner that at some future date, East Grand Forks and Grand Forks could form a combined commission or body to oversee cable franchise and cable matters within the communities. He stated that with those four premises, they have moved forward in negotiations, that they have utilized the EGF franchise agreement as basic agreement; however, recently has become aware of several MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 5 areas of concern voiced enough times and from various locations that he feels that he needs further direction from the council in negotiating with TCI. He stated first area is 1) that the City should be requiring TCI to install fiber optic cable throughout the city of Grand Forks (that this cable required for future technological advances and uses within the city). He stated that negotiations to this point do not require any rebuild of the system in Grand Forks, TCI rebuilt its system entirely in 19986, and at that time did not rebuild EGF, but subsequent to the EGF's new franchise they rebuilt and are in process of rebuilding, utilizing some fiber optic cable but not for the individual provision of service. He stated he needs to know whether they are going to require TCI to install fiber optic cable, that he has a number of concerns: do not know if City has adequate factual basis to require TCI to install fiber optic cable, that complaints re. quality of transmission are very few, complaints re. current cable service are very few, no demonstrated evidence that fits within either the 1984 Cable Act or its subsequent revisions which would place the City in a position to mandate the installation of fiber optic cable; that if they do mandate that, the cost would be passed on 100% to the basic cable user. He stated that if they allow the market to dictate installation and they choose on their own to install fiber optic cable, that rate would not be treated as a direct expense under the provisions of the cable television act but treated as a capital improvement and spread across spectrum of rates. 2) there have been no studies to tell what specific impact of rates will be, but would imagine that rates would nearly double. He stated concern for present cable user who would have obligation to pay for fiber optic is primarily residential user, and that it appears that those that would greatly benefit from installation of fiber optic cable would be those not presently subscribers of cable or minimal subscribers of cable. He stated that he does not believe that cable t.v. is the future technology in the communications area; and that industry itself has recognized that there are other technological advances that are equal to what we know today as cable service that is presently not being used in a wide-spread area (ie., small dishes, and telecos, are available and eligible to offer competing services); one concern is the cost of installing fiber optic cable which meets the need that we have in the year 2015-2020, and lastly as a result of the 1996 Tele- communications Act there is some open question as to whether City could force TCI to put in fiber optic cable without having specific findings, so needs some direction as to how to continue to negotiate. He stated he recognizes there are some benefits to be gained, that there might be other providers interested, etc. He stated that the other area addressed is the term of the agree- ment with TCI, they are requesting a 15-year agreement and he has indicated that the City wouldn't consider anything beyond 8 years, that the suggestion he has heard recently is that the City MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 6 should consider a 1-year agreement in an attempt to accommodate the changing technology, legal world, but doesn't think that's practical option (under 1984 Cable Act have to give 36-mo notice of expiration of franchise), TCI has not indicated any particular interest in obtaining a l-year agreement, and appears that 5 and 10 year terms are most common, and negotiations consume a year or more in negotiation phase. He stated it would be his recommen- dation that they enter into franchise term for the balance of the 8 years so could move in with EGF or utilize some component with- in 8 years (4 and a 4 or 5 and 3). He stated that the last area of discussion that has come up is re. channel 3, that he doesn't consider the City of Grand Forks to be a significant player in that issue as it relates to the negotiation of the cable franchise agreement. He stated that in the agreement Channel 3 designated as an educational channel, with editorial control and programming controlled by UND. He stated that the language they are proposing, which has the approval of legal counsel of UND, is to expand that channel to an educational and a governmental channel, and that would allow UND to continue on with broadcasting as they presently are, to expand their broadcast for education purposes and to expand for UND purposes, and would also allow that channel to be used for pub- lication of council/committee meetings, school board, county, park district, etc. He stated they haven't discussed expanding to public access channel, that there are three categories: educa- tional, governmental and public access. He stated the public access channel is technically a channel on which open programming is provided, and that there is concern as to whether the present proposal for language would provide for public access use; that present language agreed upon does not provide for public access but does allow for future amendment to that language if everyone is in agreement, and everyone is UND and TCI. He stated he does not need any direction on this unless committee and council wish for them to alter their present proposed language to include public access, and if that's intent, to do it now in the scope of negotiations. He stated that TCI's attorneys have some concern with public access channel but concern re. TCI's liability could be readily handled if choose to move forward. He stated he is looking for guidance on 1) fiber optic cable, 2) term of agreement; 3) any comments with respect to channel 3; that these issues significant to bring forward at public meeting and for council to have opportunity to debate these issues if they choose to. Ann Sande, 1110 Belmont Road, stated that she had sent letter to the committee discussing where the public technology committee is at the moment; that next Monday through Wednesday she, Mary Larson from the School Board, and Don Fisk, rep. Chamber, are going to be in Dallas at a conference on establishing a tele- MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 7 village (how they can get their telecommunications facilities up to par as best they can), and will be having meeting of public technology comm. and the communications infrastructure subcom- mittee of the economic development comm. of the Chamber of Com- merce on the 30th to debrief them, and they are particularly looking to find out where they are, where want to be and how get there. She stated that she would give committee briefing of what they learn at the conference before coming to any decisions. Eliot Glassheim, 619 North 3rd Street, spoke in favor of full public access, that there appears to be some concern re. control, and whether those concerns can be resolved, and what drawbacks are. Carpenter stated there are two concerns, cost and control, that it is an issue of what you can or cannot restrict, and UND not really interested in being involved with public access as they have concerns. Mr. Swanson advised that TCI has no obli- gation to provide equipment, studios or personnel; however, if City chose to take control of that channel, then that obli- gation on part of the City; if UND chose to continue control over public access they would have that responsibility, UND has sig- nificant reservations about having any control over channel 3 if it's classified as public access. Mr. Swanson stated that he didn't consider City to be player in this issue other than do we have the franchise agreement specifically designate channel 3 as public access now or continue to refine and develop what we want to use channel 3 for and then seek amendment to that provision. He stated that if they go to public access designated channel, that portion of the agreement would have to state who has responsibility to provide equipment, facilities, etc.; and that TCI would take position that they have no obligation to do that. Tim Burke, 208 Conklin Avenue, stated he would hope that com- mittee, Mrs. Sande's committee and Chamber committee explore the current environment, which has changed by new law passed by Congress, by changes in technology, and by what TCI doing, etc.; that we find way to minimize the term of the franchise extension while figuring out what City wants to happen with regard to tele- communications policy, which goes beyond just the cable fran- chise. He stated that while City may be required to give 36-mos. notice the cable company might agree to a term of less than 36-mos. so that they could help explore these opportunities and come up with where we want to go to achieve our goal with regard to communicating with our friends and neighbors across the city. He stated that in regard to access channel, government channel, and educational channel, talking about channel 3, which is run by the University and doesn't think there is any restriction that they would be looking at only one channel, possibly another channel made available, and could negotiate with TCI so not just left with subdividing channel 3, etc. and would hope to extend franchise for minimal period of time, while explore opportunities and possibilities and come up with well thought out policy. MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 8 Mr. Swanson stated that there is lot of misinformation between 1996 Telecommunications Act and the 1984 Cable TV Act; that the 1996 law doesn't repeal the 1984 cable law; that bulk effect of new law is that it allows the cable t.v. companies to compete with other telecommunication providers; that the reverse has the greater effect, and that is that telecommunication providers (local phone companies) can now compete either directly with cable service or with alternative technology. He stated that it was very important that when they discuss these issues that they recognize that there is a distinction between telecommunications and cable t.v. He stated his only concern is that our franchise agreement expires this fall, and if have requirement or need to gather greater expertise than his, need to get that; that if they are going to get into technological field and prescribe fiber optics, need someone to do that, and not aware of anyone within city who has that capability. He stated he is hoping that Mrs. Sande will be providing quite a bit of information from the seminar and talked to Mr. Fisk to gather information as well. He stated that he didn't think they should view the cable t.v. negotiation as being cure all; that there is private industry out there (whether TCI or phone company, etc.) that they don't want to discourage their opportunity to come in. He also stated that if they are proposing technology that does not require the use of public R/W there is no provision/requirement for them to get franchise agreement from the City. Jerry Hovet, TCI, stated that there are things happening in the industry today that make fiber optics look like their existing cable system, there's all kinds of technology out there, that there's going to be lot more competition (small dishes, phone companies), and to make a decision re. fiber, didn't believe his company would want to make that decision at this time. Mr. Swanson stated that there is nothing in franchise agreement that would prevent TCI from exercising its right in using different transmission mode than coaxle cable. Mr. Hovet stated that he didn't know what they would be doing in five years, but believe they will still be a company and do what is good for both themselves and the City. He stated they wouldn't build anything with a l or 3 year franchise. Mr. Burke stated he would like to see what TCI doing in other communities our size and what kind of service providing to those communities, rates they are charging, etc. and see what comes out of committees; that alternative is to do short term extension of franchise. After further discussion the committee held the matter for 2 weeks for committee to review information provided by city attorney. Bob Gustafson, Chamber of Commerce, stated they have formed a telecommunications subcommittee within their infrastructure committee, and is pleased to see that the City, schools and MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 9 businesses will be represented at the tele-village conference and they have committed to holding public forums afterwards. 5. Matter of mayor's salary. This item was pulled. 6. Matter of surplus property. Bobby Owens, mgr. city auditorium, reported that items of equipment on the listing is no longer in use and has been offered to other departments for 30 days, would like to have declared as surplus and offer for sale. Mrs. Stjern reported that there is also some MIS equipment on another list and they have requested approval to include any computer-related equipment deemed un- usable or unfit for City use becoming available between now and May 18 (at police auction). Moved by Babinchak and McCabe to declare the property as listed as surplus and to offer for sale, along with unusalbe equipment becoming availabe between now and May 18, which is the date of the police auction. Motion carried. 7. Applications for 3-year remodeling exemption: a) BVI Partnership, LLP, 2016 South Washington Street. Mel Carsen, city assessor, stated this application by engineering firm who purchased this building and are doing approx. $200,000 in remodeling of the building; that application qualifies under new guidelines. He noted that property previously exempt and they are in process of placing value on the property. Mr. Carpenter stated that he would support two-year exemption, that he sees full exemption for older neighborhoods and to encourage development downtown. Moved by McCabe and Carpenter to approve application for a two-year exemption. Motion carried. b) Grand Forks Homes, Inc., 110 Cherry Street (Phase A, Cherry Heights Apts.) Mr. Carsen reported that this is apartment-complex which is about 20 years old, Grand Forks Homes rehabbing building (new roof, mechanical system, etc.) and meets criteria and guidelines. Carpenter stated this is benefit for low-income residential housing. Moved by Babinchak and McCabe to approve application for a 3-year remodeling exemption. Motion carried. c) Grand Forks Homes, Inc., 710 4th Avenue South (Phase C, Oak Manor) Mr. Carsen stated this building adjacent to 110 Cherry St. complex, built about 20 years ago, meets criteria and guidelines. Moved by Babinchak and McCabe to approve 3-year remodeling exemption. Motion carried. 8. Matter of resolution concerning the investment of funds by the City of Grand Forks with Merrill Lynch. MINUTES/FINANCE COMMITTEE May 14, 1996 - Page 10 Mrs. Stjern reported this is a request to approve the agree- ment with Merrill Lynch, that this is standard investment agree- ment that we have with other financial institutions. Moved by Babinchak and McCabe to approve the resolution. Motion carried. 9. Matter of approval of pledged securities. Mrs. Stjern reported that this is being handled differently than in the past where committee member came in and reviewed the pledged securities; that presently only securities requiring pledges are at First National Bank and they have agreement with the Bank of North Dakota on a pooled investment basis, that as of May 1 First National had $22,348,508 which required pledges and they had deposited with the Bank of North Dakota $27 million plus which covers our requirements. A detailed listing of pledges available for review, and they will be receiving quarterly report detailing their investments covered by this pooled investment. Moved by Babinchak and McCabe to approve the detailed listing of pledged securities. Motion carried. 10. Matter of legislative committee. Mr. Swanson suggested that the future council seriously consider formulating a legislative committee this summer. 11. Matter of ordinance amendment re. appointment of standing committees of council and committee chairs. Council Member Glassheim presented drafts of three ordinances prepared by the city attorney giving following options: 1) essentially same as what City now has; 2) provides for the election by the council as a whole of the four committee chairs with chairs selecting members, and ratification by council; or 3) mayor appoint committees with each committee electing its own chair. The committee stated that any change should be made prior to any new council members coming in. Mr. Swanson advised committee re. consideration of ordinances by new council, which cannot be considered until their second regularly scheduled meeting. Mr. Glassheim also suggested that perhaps this should be presented at a committee of the whole meeting prior to adoption of an ordinance making any change. Chairman Carpenter stated this could be done sometime after May 20 when ordinance introduced for first reading. The committee scheduled a meeting for Monday to address the issue and to introduce ordinance that evening. Held until Monday, May 20, at 7:00 p.m. Meeting adjourned at 7:35 p.m. Alice Fontaine, City Clerk Dated: 5/14/96.