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	MINUTES/FINANCE COMMITTEE Tuesday, July 28, 1998 - 3:45 p.m. Members present: Babinchak, Brooks, Hamerlik. 1. Matter of communication from Residual Materials, Inc., 222 Red Dot Place re. land transfer. Mr. Grotte reported he had talked with Mr. Harmeson, RMI, and question was if City would be willing to swap wastewater yard which will be on the dry side of the dike for some of their property which is farther north on Mill Road, which is site of snow dump that City has been using for many years at no cost. He stated there are a couple issues with the site - fire tower on site and some forcemain and waterlines that run through the property and would need easement if were to turn property over. He stated City not opposed to it, time more of an issue, wastewater shop won't move until next year. Mr. Harmeson, RMI, stated they would be willing to work with City as long as need. Deputy Fire Chief O'Neill stated their building sits in middle of wastewater property, has big effect on ISO rating for the fire department, and if lose use of that facility, or if move tower to another site, wouldn't object to that, do need training facility and have burn trailers there, not able to do in city proper or residential neighborhood; and have natural gas pit where practice fighting gas fires. He stated they sometimes have great number of people there; that new site would be farther out and greater distance from southend if respond from training site because keep people in service while training. Gary Goetz stated they have no problem with transfer of property, only concern for forcemains, etc. Hamerlik stated they aren't ready to act on this and would like info. as to why they can do rather than why can't do it; and should defer and get to people for discussion; and that we intend to give serious consideration to this. Deputy O'Neill reported that in CIP plan in long range plans, have been looking at upgrading training facility and could be tied in wit that. Moved by Hamerlik that we ask the proper agencies to review and come back with prudent proposal. Brooks seconded the motion. Mr. Harmeson stated in his communication they state that they are willing to work with the City in whatever way they can; and can work with the fire department and City to make them better and put City-owned land back on the tax rolls and generating income and revenue in exchange for that land that RMI has basically let the City have at no charge for many years for snow removal; and will allow RMI to continue with what doing now because when new dike goes in they lose entire back component of their land and rear access to building, that this is adjacent and gives access MINUTES/FINANCE COMMITTEE July 28, 1998 - Page 2 to land to expand their operations. Upon call for the question the motion carried. 3. Matter of approval of plans and specifications for replace- ment of IBM System 400's for the Year 2000. Roxanne Fiala reviewed specifications for the two new 400 systems, one for this building and one for Police Building, and is part of the Year 2000 project for switching to a risk management system and would like approval to go out for bids. This will handle for Year 2000 and probably last five years and costs from replacement funds and part from Year 2000 project; have multiple vendors. Moved by Brooks and Babinchak to approve plans and specifications and authorize call for bids. Motion carried. 4. Request to declare computer equipment excess property. Ms. Fiala reported that description of the property that they are updating in process of putting in wide area network, left over equipment and equipment that went through the flood, that staff has gone through and this is equipment they have identified, once declared excess property then sale of property, but only asking that it be declared excess property. She stated they are keeping some equipment for parts, etc. Hamerlik asked what steps are that City uses (ordinance, policy, etc.) when department has excess property, if advertise within do they sell to other departments, transfer, etc. or if not wanted, whether declared surplus or if non-profit agencies getting oppor-tunity for it, etc. Mr. Schmisek reported they try with most equipment/furniture, etc. usually list as surplus property and give other departments opportunity to put request in for that, and if needed, transfer it. He stated that with computer equip-ment they handle somewhat differently as they know inventory of computers and types of equipment people have and as trade out older used equipment try to move down the line, etc.; but this equipment was damaged in flood and has been looked at, used what can, only guarantee boot to DOS and not equipment want to give to non-profits nor put into our system. Mr. Schmisek stated they have not given to non-profits, only declare surplus and advertise it. Moved by Hamerlik and Brooks that the listed equipment be declared surplus since has had opportunity to be reused within the city. Motion carried. 6. Matter of contract with U.S. West. re. internet services. Ms. Fiala reported City received today, and this is contract will be entering into with U.S. West for the T-1 lines and frame relay lines for wide area network at monthly cost of $1467 and MINUTES/FINANCE COMMITTEE July 28, 1998 - Page 3 City Hall has internet service they will be providing for $599/ mo. and asked approval of the contract with the understanding that Mr. Swanson would review it. It was noted that $3500 was installation charge and part of the wide area internet and those costs covered when she presented that. It was noted that installation charge for internet is $450 one time charge. Ms. Fiala reported that current charges are $35/mo for line and varies department by department, and is an increase in costs. Hamerlik asked what total is of all departments in comparison to $1467, and Mr. Schmisek stated they will get that information for committee and that this is probably double or more. Ms. Fiala stated this is different type service than what had before; no other place to get this service; and that this is part of the wide area network this year, and haven't reviewed for next year how charge out; and are also checking whether go with annual contract rather than five year contract. Mr. Schmisek reported Budget Framework is considering this. Moved by Hamerlik and seconded by Brooks to approve the installation subject to review by legal counsel. Motion carried. 7. Budget amendment. a) Municipal Court - $40,000 Mr. Schmisek reviewed request to use general fund cash carryover for increased prisoner board expenses, that these do not have anything to do with new increased rates which will go into effect in January of 1999, that this is because of increased flow of prisoners through the system. Moved by Hamerlik and Brooks to approve budget amendment. Motion carried. 8. Other items: 1) Hamerlik stted that he was reading in police department minutes that Lt. Farder is working with Bobby Owens on a car pound, and asked Mr. Schmisek if that was with his knowledge and within your scope of things as discussed. Mr Schmisek reported that was within the scope of what talking about, that Saroj Jerath is heading that up and she has asked both Mr. Owens and Lt. Farder to get together and come to her with numbers they are talking about and space they need. 2) Hamerlik reported that he talked to Human Resources people and they can pull out information having to do with sick leave; that he received report for 1997 and he is really concerned about sick leave report they received, that in June, 1997, 27,224 hours used and in June of 1998 2,236 hours used, and understands that even if flood wonder what defining sick leave as and what using it as and make comparison over several years. Mr. Schmisek noted that HR could look at that for him if he wished, that in our MINUTES/FINANCE COMMITTEE July 28, 1998 - Page 4 department had an individual off for extended sick leave. Hamerlik stated he wasn't trying to curtail use of but concerned if sick leave is sick leave, and will talk to Mr. Gordon for answers before taking to council. As the city attorney was unable to attend the meeting, Hamerlik and Brooks recessed the meeting to 9:30 a.m. on July 29. MINUTES/FINANCE COMMITTEE Wednesday, July 29, 1998 - 9:30 a.m. The committee reconvened their meeting at 9:40 a.m. Members present: Babinchak, Brooks, Hamerlik 2. Matter of request from Metro Plains for tax increment financing for rehabilitation of South Junior High into senior apartments. Jeanne Kelsey, MetroPlains Development, St. Paul, MN stated they are looking at the conversion of South Jr. High into senior housing; mixed income type situation that 26 units affordable and 19 for market rate, 26 being affordable would be income restrictive renting. She stated what they are looking at to make project work is same as they did at St. Anne's (Riverside Manor), tax abatement (which allows this project to do is to take on a higher first mortgage on the front end in order to keep the rents lower), at a 10-year is what they have come up with recommenda-tions from Urban Development Department and with Mr. Schmisek's input as well. Mr. Swanson reported this couldn't be considered under industrial or commercial property and has to be considered under slum and blight, that property not zoned commercial nor could it be zoned commercial. He stated if committee inclined to move forward with any type of tax increment financing, whether cash to the project or sale of bonds, or for a tax exemption for the increment, the only section available is under slum and blighted area, could meet definition of blighted area which included under-utilized property. He reported that the committee would make a pre-liminary recommendation to council to move forward, council would refer to Planning & Zoning Commission, and they must consider whether or not it's consistent with the master plan or zoning and make recommendation purely from project relationship to the committee and project relationship to the neighborhood; this would then come back to the council who would hold public hearing, notices have to be published for that public hearing and after public hearing is held, the council can make its final determination of whether slum and blighted area, and if so what form and to what extent either TIF or TIF increment would be provided to the developer. He stated that if committee or council were to act favorably on Monday it could be added to Planning & Zoning Commission's agenda next week, and could hold MINUTES/FINANCE COMMITTEE July 29, 1998 - Page 5 their hearing next Wednesday or at a future meeting; that once the report comes back from P&Z, council can do publication for public hearing (publish once a week for two consecutive weeks), and would suggest hearing for September 8. Ms. Kelsey stated they are on Planning Commission agenda next week. Mr. Swanson reported that Urban Development will be charged with responsibility of assessing the impact the project will have on the community as described under section 2, and 2 lays out issues of availability of use of other forms of assistance, impact on slum and blighted conditions, impact on local base, financial strength of project, need for TIF assistance, project eligibility, effect upon competition, and whether in the best interest of the city as a whole, ratio of TIF funds to entire cost and any cost to the City to provide municipal services and infrastructure and utilities. Mr. Swanson stated that with regard to the increment, doesn't believe that property placed on tax rolls as yet, so typically what would occur in situation is that take the present taxable value and they would be exempt from any new value above that as the increment, and because this was an exempt property, their increment is 100% of improvement, pay no tax on entire improvement assuming TIF were to be approved. He stated this is discretionary decision for committee and council; Planning & Zoning is not to judge financial wisdom or need of project but to judge the planning and zoning issues relating to the development. John Herz, assessing department, stated he hasn't had chance to look at it nor opportunity to review with the city assessor, would do an appraisal to determine what value of the land and building would be, and would assume that would be the beginning value of the TIF. Hamerlik asked what kind of assistance occurred for Riverside Manor and Ryan House. Ms. Kelsey reported St. Anne's was for 12 years increment, and Home Funds from State in amount of $400,000 which is deferred loan vs. Community Development Block Grant fund, along with housing tax credits and historic tax credits. She reported that at Riverside Manor there are 38 units, 30 units affordable and 8 units at market rate; Ryan 40 units and 100% affordable. Ms. Kelsey noted that if they received $363,000 through block grants, that would be repaid, and any remaining profit would be split with the City until fully repaid (repaid in Year 18), zero percent interest on rental rehab not utilized in other projects, and have over $600,000 remaining and that this would be good rental rehab property. They will be meeting with Urban Development today. There was some discussion re. financing, that Babinchak stated MINUTES/FINANCE COMMITTEE July 29, 1998 - Page 6 this is good project but City is in different situation since they were last here. Hamerlik stated some concerns, noted that housing needed and people having to move out of FEMA trailers. Mr. Swanson stated that committee doesn't need to decide that today, whether 5-10 or 15 years, decide whether want to move forward in the process. Moved by Hamerlik and Brooks to refer to Planning and Zoning Commission and set public hearing for September 8. Gary Stenson, MetroPlains Development, reported on various programs used, that first federal dollars and now mixture private dollars through tax credits and equity, some federal, State and local. He stated they did start this at 15 years plus CDBG funds of $400,000 and that got cut back to $363,000 and that's max. this development could qualify for, and stated he would like to stick to the 10-years and with the $363,000. He stated final issue is timing, have received housing tax credits from the ND Housing Finance Agency this year, that it's a reservation of tax credits and lot of things they have to do to keep those credits, have to extend 10% of funds by the end of the year to get carryover of those credits. He stated that timing is an issue and anything they can do to move along as quickly as possible would be appreciated. Upon call for the question, the motion carried. 5. Matter of reinstatement of suspended ordinances. Mr. Swanson reviewed ordinances affecting this committee; that in May of 1997 council adopted an ordinance which placed in an inactive status a number of provisions of the City Code and also gave mayor authority to suspend and modify provisions of rules, regulations, or ordinances for limited period of time; many of these have been placed back in effect, administratively or by council, however, no one place where could go to where could state these ordinances are back into place, and important for all committees, departments to review to make sure what has been suspended should remain suspended; and other committees have reviewed sections affecting them. He stated ordinances affecting this committee are on page 2, Chapter XIV, Grand Forks Central Business District, issues re. water rates, wastewater rates, etc. He stated he hasn't received any request to keep any section in suspension; but departments have indicated that in certain instances they will have to utilize their discretion in phasing things back into effect for certain concerns, etc. and not immediately demand that everyone be in compliance but work back into the system. He thought this committee should also look at Chapter IV Additional Authorization to Suspend Ordinances. He stated that mayor given authority to MINUTES/FINANCE COMMITTEE July 29, 1998 - Page 7 suspend ordinances, modify, on a limited basis. He advised that his recommendation was that the committee recommend those sections be reinstated. He stated that he will once committees have acted is draft a formal resolution for the council to act on, exception to that possibly Planning and Zoning because of timing. Mr. Schmisek reviewed process they are using for downtown parking assessments; that if called by business they work with Parking Authority staff and review usage of the buildings, and adjust accordingly, and if problem with that would bring to the proper committee. Moved by Hamerlik and Brooks that we refer to council with recommendation to reinstate suspended ordinances under our responsibility as drafted in consort with others by the legal counsel. Motion carried. Mr. Swanson stated that would be up to committee whether or not wished mayor to continue to have that authority stated in Section IV and was not in Code before but added as an emergency measure. Moved by Brooks and Hamerlik to suspend Section IV of Ordinance No. 3644, additional authorization to suspend ordinances. Motion carried. 9. Other items: 1) Mr. Swanson reported on status of City Code publications; that they have compiled all ordinances to be included in Sup. No. 8 which encompasses significantly longer period of time than have under previous supplements. He stated they had preliminary estimate last fall to go to CD's in amount of $12-15,000 but didn't include replacement of any hard volume books; have been negotiating with them to give us a quote on three combinations: CD, replacement of up to 50 hard-copy volumes of Code, and publication of our Code on their web site, but doesn't have final number on that. He stated they do have 3 sets of Code books in their office. Mr. Swanson reported he's not sure which way to go, that published Code in 1987 but not electronically composed, since 1993 all supplements have been electronically composed so can put together part of Code and input balance of Code and that's side cost of the factor. They have suggested that if change Code to different format (single page with double column), smaller print and reduce cost and get into one volume rather than two, but would have to buy more volumes to replace those in existence. He stated that once MIS department is fully operating, including web pages, that might be able to do our own Code on web page. He stated there are 3 primary Code publishing companies in the U.S. and all three tremendously busy because of web site, difficult part is keeping current. He stated he doesn't have final answer MINUTES/FINANCE COMMITTEE July 29, 1998 - Page 8 or final number. He stated they were hoping to have Codes fairly soon, and they're looking to him for numbers, question whether go to another format, etc. Info. Moved by Hamerlik and Babinchak to adjourn; meeting adjourned at 10:35 a.m. Alice Fontaine City Clerk Dated: 7/29/98.