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MINUTES/FINANCE COMMITTEE
Tuesday, December 30, 1997 - 3:45 p.m.

Members present: Carpenter, Bakken, Hamerlik, Babinchak.

1. Application for abatement and settlement of 1996 taxes on property at 1331 Cottonwood Street (Lot 24, Block 3, Lincoln Park View 2nd Addition)
Mel Carsen, city assessor reported this is routine abatement, that State law allows for exemption of improvement portion only of
real estate owned by a person confined to use of a wheelchair or his unremarried spouse, and in this case Beverly Aure is the unmarried spouse of Richard Aure who was confined to a wheelchair and received exemption after 1996 assessment was set so only way to correct is by an abatement. He reported they have corrected for 1997. He reported that exemption is for entire structure, only land taxes under this exemption, and would apply for as long as she is unremarried and occupies the residence. Mr. Carsen stated its pretty liberal law and is State law so have no discretion; and applicant will have to apply for credit every year in assessor's office.

Moved by Bakken and Hamerlik to approve abatement of the taxes. Motion carried.

3. Matter of City Hall basement meeting rooms sound and media
system bid.
Mr. Schmisek reported that this was brought after flood for remodeling of downstairs meeting rooms and need for microphone and speaker system in order to carry meetings; this equipment comparable to equipment in council chambers so would need to deal with that as reason whether to go with sole source, $23,800 and is unbudgeted item and would need to take from Public Building Fund if determine to go with this. Mayor Owens reported that the meeting rooms will be very nice and committees probably will hold all their meetings there, round horseshoe tables with chairs for audience; capacity approx. 30 for each room. Hamerlik stated he was uneasy with sole source and not rebidding equipment, need to give other businesses ability to bid. Mr. Schmisek reported that because tap into present recording system and don't have to purchase additional recording system, ease of transfer of equipment between all of the rooms needed, and transcribing equipment used for all recording equipment, gives capability. (It was noted that there is also another recording system in council chambers). Held temporarily for further information (Mayor Owens will check immediately).

Mayor Owens reported that the reasons for same system is for interchanging and compatibility with the existing system and sometimes two mixed systems not compatible, for maintenance of the systems and more cost effective. It was noted that this company is located in Bismarck. Mayor Owens reported that the reason for not finishing rooms downstairs is because of sound system.

Moved by Bakken and Babinchak to sole source the equipment for
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sound system with Tricorne Audio, Inc. in the amount of $23,800.00 because of compatibility and maintenance of the equipment. Motion carried.

4. Matter of flood insurance premiums.
Mr. Schmisek reported that increased premium that need to pay for an amended rate at City Hall for new portion of the basement of $1,044 and added $470,000 contents coverage, $1,339, and added contents for parking ramp, total of $2,477.00. He reported these are brought about because of the flood and damages that we suffered and have been covered in most part by FEMA and to continue in good graces and be covered by National Flood Ins. and FEMA, so required to increase coverages to be equivalent to damages suffered in particular buildings and that's what these are doing. He noted also need budget amendment for City Hall for cash carryover for $2,383.00 to fund these increases. It was noted that the increase runs for policy term from April 7, 1997 to April 7, 1998. He reported that there will be several more increases coming in, and FEMA wants it increased immediately. It was noted that parking ramp shaft has some equipment for elevator, and also small parking office.

Moved by Hamerlik for approval of the additional premium for city Hall in the amount of $2,383.00, Babinchak seconded motion. Motion carried. (Comm.only)

Moved by Hamerlik and Babinchak to approve additional premium for contents to the parking ramp in the amount of $94.00. Motion carried. (Comm.only)

Moved by Hamerlik and Babinchak to approve budget amendment in the amount of $2,383.00 from City Hall cash carryover. Motion carried.

2. Matter of Varmints Baseball Team loan.
Hamerlik reported that the committee's previous motion was that if City had not received money for the loan by end of December, instruct legal department to proceed to make collection from co-signers. It was noted that they had discussed parking assessments or rental payments.

Howard Swanson, city attorney, reported that he was contacted by George McDonald, president of the Northwoods League, Highland City, Fl and he indicated that there had been earlier conversations between the League and the guarantors of the City and there is less than clear understanding of what was agreed between League and directors, and end result of conference call, the League is not intending to make payment directly to the City of either the principal balance or any accrued interest, and it appears that the League is in a position to make an arrangement with the guarantors individually on some portion of the balance but not a complete
resolution. He also reported that Jack Geller was on the phone
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conference and he indicated that they would be making some form of payment, either today, but not enough to bring note current. He reported that the inquiry was made as to whether the City would allow the note to run the course if brought current, that he didn't make any commitments but told him that the note was in default and could be called but until such time as actual proposal to bring current he didn't want to discuss. He reported that Mr. Geller asked that they continue to hold for another two weeks before they take any action on the note of the guarantees. He reported that the note is still in default, that there is no arrangement with the League or anyone else to make complete payment on the note but discussions that be continued to bring the note current and con-tinuing the balance for approx. two years. He stated that the note matures February 1, 2000. He also noted that the guarantee obli-gation wouldn't be affected, but if were approved, wouldn't provide any error on any future payment. He also stated that the Varmints no longer on-going entity and number of debts against the corpor-ation unsatisfied and except for guarantees by eight of the directors ours not collectible. Mr. Swanson also stated that the principal and interest earned to date or position that settle for principal, but guarantee for both. He also stated that there are eight guarantees all jointly and severally liable, meaning that any one of them could be responsible for the ultimate balance as opposed to individual shares. He stated there is some discrepancy as to actual principal balance and will clarify with Urban Development (approx. $37,900).

Mr. Swanson reported that Mr. Geller and Mr. McDonald were advised of prior motion that is before committee and that his orders were to pursue.

Mr. Swanson reported that after he got off the phone Mr. Geller and Mr. McDonald were still discussing this, that he made two recom-mendations: 1) that they bring both principal and interest cur-rent, 2) guarantors consider paying note off entirely and making whatever arrangements they have with the League a matter between the guarantors and League and City not be involved. Committee stated that would be their preference. Mr. Swanson stated that the League has valid concern that they do not want to be perceived as independently guaranteeing the debt of the corporation or being any form of joint venture with the corporation (now appears t be defunct corporation) so that the league's assets are in any way tied up with any debts of the Varmints, and want clear division between their role as the League in the new franchise and old franchise and old league and don't want to make direct payment to the City except to guarantors or others and the City. He stated there was no request by the League to assume the note either. Committee stated they would like to continue with the original motion. Mr. Swanson stated his first step would be correspondence with the guarantors.

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Mr. Schmisek reported that along with the loan amount outstanding, there are other issues amounting to approx. $1,700 in rent for mall and $122.00 in parking fees, and would need some direction on those items whether write off or try to pursue. Mr. Swanson stated that the guarantee would not extend to those items, would be corporate debts and not sure what corporate's attention would be with respect to that; as far as assets for levy or attachment, his understanding that not great deal of assets available (but large inventory of tee-shirts and sweatshirts) and some uniforms and equipment, but also some other proceedings against the corporation, including mechanic's lien threatened or placed against Kraft Field for improvements. Committee stated they should ask for payment of those items. Mr. Swanson stated that they have a standing pro-cedure on delinquent lease payments and parking assessments they would follow through to make it a part of committee's discussion, but different entities.

Carpenter reported that the wishes of the committee are to leave the prior action, with understanding that may take several weeks to handle, and with report at the next committee meeting. Mr. Swanson reported that he was requested by Mr. McDonald to provide him with confirmation of the outstanding indebtedness of the former corpora-tion, Grand Forks Professional Baseball League.

5. Matter of lease renewals for the following properties:
Mr. Schmisek reported that these were three-year agreements expiring December 31, 1997, and all tenants want to continue their leases. Mr. Swanson stated he would not have any changes from past leases.

a) William J. Wrenn, 2329 University Avenue for leasing of Lots A and B, Block 1, University Park Addn.
Mr. Wrenn was present and stated that he wanted to continue this lease, one year lease with two yearly options, lease $1.00/year. Moved by Babinchak and Bakken to authorize proper City officials to enter into a lease under same terms as previous lease.
Motion carried.

b) Frank F. and Judy A. Bures, 1005 Reeves Drive, for leasing of Lot 4, Block 1, McIntyre Subdivision. ($1.00/yr.)
Moved by Babinchak and Bakken to authorize proper City officials to enter into a lease under same terms as previous lease. Motion carried.

c) John Miller, Miller's True Value Hardware, 1803 S. Washington Street, for leasing of Block 1, east 33 ft. of south 33 ft. of Lot 5, Cox's Addn. (property on which Lift Station 14 is located). ($100/year)
Moved by Babinchak and Bakken to authorize proper city officials to enter into a lease under same terms as previous lease. Motion carried.

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6. Matter of agreement with State Historical Society of North Dakota for the coordination of flood-related activities.
Mr. Schmisek reported that there were two agreements, first agreement with State Historical Society for coordination of flood-related activities (they are helping in analysis of historical buildings in the area - federal grant to City of $15,000 and $10,000 match which is Commission volunteer time and volunteer labor for community); second agreement is for hosting and pre-senting the 1997 Annual Certified Local Governmental Workshop and agreement which has to pass through us and is $500 with no local match; that Mr. Swanson has reviewed forms and has signed off on the forms.

Moved by Babinchak and Bakken to approve the agreement with State Historical Society for flood-related activities. Motion carried.

Moved by Babinchak and Bakken to approve the agreement with the State Historical Society for hosting and presenting the 1997 Annual Certified Local Government Workshop. Motion carried.

7. Bids for police vehicles.
It was reported that bids had been opened this afternoon and that the police department had asked whether bids could be handled by this committee or wait for public safety committee because using grant funds and wanted to get approved by council as soon as possible. Bids were reported as follows:

Hansen Ford: 5 squad cars @$20,009.90 for total of @$100,049.50 less trade of 5 vehicles at $6,575 or $32,875 or net bid of $67,174.50;
3 4-wheel drive vehicles @$25,016.18 for a total of $75,048.54 less trade of 2 vehicles @$6,575.00 or $13,150 for a net bid of $61,898.54;

Rydell Chevrolet: 3 4-wheel drive vehicles @$23,993 or $71,979 less trade of $12,860 for a net bid of $59,119.00.

Committee Member Hamerlik suggested that this should be handled by public safety; Mr. Schmisek called Chairman Sande of the safety committee and they will meet on Monday evening, January 5 to consider the items.

Moved by Hamerlik and Bakken to adjourn; meeting adjourned at 4:40 p.m.

Alice Fontaine
City Clerk

Dated: 12/30/97