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MINUTES-FINANCE/DEVELOPMENT STANDBY COMMITTEE
Tuesday, September 24, 2002 - 7:30 a.m.________________________

Members present: Christensen, chair; Glassheim, Hamerlik, Gershman.

Others attending: Terry Hanson, Keith Lund, Peggy Kurtz, John Schmisek, Dave Sena,
executive director of the Mission; Bobbie Hepper-Olson, architect; Leroy Sondreal, member of Grand Forks Mission Board of Directors.

1. Shelter for the Homeless 2003 CDBG application and 5-year Capital Improvement Plan.
Chairman Christensen stated that they looked at the Mission's request - that this year they are asking for an elevator, $400,000, and nobody on the committee that didn't want them to have the $400,000, the issue is the other $800,000 in an on-going project and of getting the rest of the money so when done; and asked what their plan was to have the community behind them to help raise another million dollars, and want to make sure when project finished that the rest of it gets done.

Mr. Sondreal reported the study was result of last year's study, and made them look at the entire facility and the Board has reviewed the report and study and labored over where and what the Mission is going to be doing - the report addresses all of the physical needs of the building and because of the help they have received from the City they are making strides in getting the building improved and that the Mission is doing a job now that it has never been able to completely do as well as now - that as things change in the community and clientele within the Mission has some changes and finding that just having an elevator is not necessarily the brunt of what they really need, security is also a part of that and the drawing will allow them to change how people enter and leave the Mission and still have some security for the residents that are there - they feed about 120 people a day there and getting those people in and out and they don't all live there but don't turn anybody away that needs a meal - need to keep part of the building secure for those who reside there. He stated they are looking at how they can provide the basic services that they have always been providing - food and shelter for the homeless and how to do that and get people in and out and need to wash up before going in for a meal and not the case now. Bathroom facilities are inadequate for that kind of traffic - that is built into this addition and that's why there is a large amount of money needed for the elevator - eventually they need to look at the upper floors and the rest of the building - they have worked with the city engineers and inspections departments to have them go through the building, point out things that they would have to look at to be code compliant throughout the building. He stated that was they way the approached the study and put it together. Included in the report is a complete listing of needs they see at this time and that is a long-range 5-year plan, whether they can get match for part of what they can do, got a $30,000 grant from Bremer to look at their marketing and to be able to identify the type of services that they put on through the Mission and provide for the community that they serve but basically looking there at how they feed, who they feed, the type of people they serve and the kind of services that they may have to change or get into in the future, and that study will be coming out in the next year.

Mr. Sena stated they are always going to shelter and provide a place for the homeless person in the city to go, they have added a clothing give-away program and have had their education center, and also address a need within the city for a true family shelter where family can go and those are things they would like to see in the future, and all depends on the marketing strategy. He stated of the 60 years in the community has shown when they do those basic things, providing food, shelter and place for the homeless person to go, that the community has supported that and are very encouraged by that and their future really lies with the community
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and its support, and community knows there's a need for the homeless within the community - they are not where they would like to be financially, better than last year. He stated they have seen a lot of changes in the Mission, that the money they received from the CDBG grant finished out their first level and looks beautiful and the atmosphere with their appliances are tremendous and with the new elevator entrance, the reason is looks so good to him is the security aspect of it - they get so many people, 347 people last year that stayed with them, not including people who come in for food - over 500 people coming through their doors looking for a service that they provide - that now someone coming through their main entrance to go to the dinning room, unless they station somebody on that stairwell it would be very easy for people to go up and perhaps do if they've been there before - want to get away from that and want it to be welcoming but find out who is coming into their building and who is not and making sure they are going to the right place and the elevator entrance will allow them to take their client services entrance and put it all into their front and all of the business assets would be off to their left and that would allow watching people coming into the dining room, making sure they are where they need to go. Another asset is for the elevator entrance is really center piece for food services additions later on where they allow themselves more direct route for dining facilities for people coming in, have a lot of women and children come through but to come through area where lot of men around, can be very intimidating. He stated when looking at their budget - look at $1.2 million every 3 years for operating expenses and they have come through pretty well, can't be extravagant but can get the job done and with marketing strategy will do that very well. He stated they feed about 50 people a meal so about 120-150 per day they feed. They had 347 people stay with them but a lot of people who access their services that don't stay. He stated they have a fellow there who has been there for 17 years, average about 3 to 6 months, rotation of people, some people with mental illness, depression or addictions that they deal with that incapacitates them from going after jobs - and estimates that between 60 and 80% of people that do have regular work and there are people who aren't just sitting around - and those sitting around are waiting for a day job or good reason why they are not working - have a certain percentage that don't want to work and low percentage without our Mission and from 1995 to 2001 the age group got younger (18-24 was one of the biggest increases) and other 45-65 and over 65 stayed pretty much the same. that nationally the population for the Mission is changing, getting younger - in debt and having child support, etc.

Gershman asked how much they raise in the community each year. Mr. Sena stated last year their budget was $420,000 but raised close to about $500,000 when include legacies, special gifts, etc. He stated they do conservative estimate on food ($80,000 last year) and probably over $100,000, and bought a new walk-in freezer to accommodate all the food that they got and find that the freezer is not big enough and excited about in the future of having larger storage area for food, that when people want to give them meat, etc. , they don't calculate volunteer time and with all the clothing, toilet paper, toothpaste, toothbrushes, deodorant, etc. that they account for but haven't put a dollar figure to them yet. He stated they don't have a thrift store, clothing give away program - don't have the storage or space for thrift store.

Christensen asked how much they receive from churches. Mr. Sena stated around $45,000/
year but this year received a $10,000 donation from one of the churches in town, Faith Evangelical Free Church, and last year about $39,000 and maybe hit $50,000 this year from churches and have increased over last several years - get support from churches not only in
Grand Forks but from every ladies auxiliary across the land - $50.00, $75.00 from every ELC Women's Group in every little small town across ND - amazing deal what they get from them.

Minutes/Finance-Development Comm. 9/24/02 - Page 3

Location of elevator: corner next to the old building - the elevator and the addition is $390,000 and that includes the men's and women's washrooms and because coming in at ground level and have lobby and reception area and access to the elevator, go up a half flight of stairs to get to the toilet level and that is the main level of the Mission - is a one story addition, but lobby area story and a half.

Christensen stated that the churches got together years ago and built a number of apartments and they are managed by Urban Development, doesn't know who owns the Mission building but having facility out of which to operate, and concerned about is that once this is built out is the upkeep, will provide the $400,000 but it doesn't provide for maintenance, and where that fits in your plan and how we find you the other $1 million, and when talk about marketing strategy, wonder if have that because it isn't going out to find more people to feed, but finding more people to help you feed the people and if have money budgeted for marketing strategy maybe now is time to begin capital improvement and fund raising drive in the community by going to all the churches and talking to the board of directors and is big undertaking but this is really good to bring to them and say this is what they need because capital improvement projects are easy to fund, easier to get money to build far harder for maintenance.

Mr. Sena stated their marketing strategy is not trying to get more people into the Mission, but trying to get a plan together so that they can look at, they have changed over the last couple years and look at as more regional center located in Grand Forks and provide services to 22 different counties in MN and Dakota and that they get a lot of money from those counties, not as much as Grand Forks and East Grand Forks, and need to go out to a lot of those churches and that is something that the board and he are looking at and how do they do that and what is strategy - and this does give them a great tool that they have allowed the Mission to have to put out their need to the community of what need to do and use every avenue whether grants, foundations, etc.

Christensen stated he sees this as $400,000 as matching grant, have it in your pocket but have to go out and get a million dollars, they did it twice in their church and had to pay somebody 5 or 10% of what they raised, but if already have $400,000 in you pocket, you don't pay 5% on that - 5% of $1 million is $50,000, have $400,000 and doesn't know how much you really need to build the addition but if came up short, we could probably help fund part of your capital project also - help you fund it but you have to do the leg work. Now is prime opportunity for start on that - have funds and have done the homework, got plan and capital plan and would hope they would do that.

Mr. Sondreal stated that area where they get most of the people from and those are areas they would like to market - Grand Forks has done good job in providing funds for the Mission and would like to go out to the other communities such as Grafton, Crookston, Hillsboro, etc. that have not necessarily had the opportunity to participate in work of this mission and thinks there's a real market out there and need to tell the story and report is what is going to be able to do that.

Gershman stated that if they were to get a capital campaign going and went out to the county
governments, city governments, churches and individuals, service organizations, lot of work but
could get your campaign team to go and get reps. from those cities, and by showing commitment that Grand Forks has made, that we're giving $400,000 and put that up there as a match, and need those cities to come in and build out the rest for you but as go forward beyond
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next year, thinks the council could look favorably on additional funding for some things that there's a match and continue to do that.

Mr. Sondreal stated that one of the things the Board has pretty much decided is that as they looked at this expansion really still takes care of the need, their overall look is not to build more facility doing the same thing they are doing but need to get this facility fully operational to do what they are doing better and that's where going with their capital improvement portion of it now, not looking to add rooms, except more dining facilities which allow them to feed more people easier - not expanding the building.

Hamerlik stated that after a capital contribution by an individual they feel more a part of it and your on-going voluntary contributions yearly will most likely increase and maybe get more involved - there's an on-going thing and that is the $200,000 that they have tentatively put in there and thinking about another $200,000 and cash flow and asked for comments on that.

Mr. Sondreal stated the $200,000 over 2 years, and look at the construction but there is a cash flow problem and that $200,000 for the first phase gets them into a bit of a cash flow crunch, and that the first part of the contract is going to be a little more than the second part because they'd like to build everything except what the mechanical portion in the elevator shaft and basic construction would be higher and be able to award a contract if looking over a 2-year period - can do first half for $250,000 and go $150,000 the next year.

Bobbie Hepper-Olson stated she is proposing that they see the spread sheet they put together, is the first big chunk that becomes the hard part - once they get past that the other projects are smaller and to try to get the initial elevator and entrance and toilet facilities put in, and proposing to do is to do the enclosure and elevator shaft as first phase, and how that would cash flow, and then push the elevator itself which is $80,000 item and put that into next year.

Mr. Sondreal stated the last money they received from the CDBG did the first floor, that has helped them market the Mission but with that they got all the carpet for that donated and they installed it themselves so there has been matching on every project they have got; stairwell painting and trim was done by volunteers and looking at that kind of in-kind too, and there are people who will come and do that kind of work.

Christensen stated that perhaps they could give them $250,000 this year and $150,000 the next year, and refigure engineering. Mr. Hanson stated they could postpone the project for two months - Ms. Olson stated they could but that would increase the cost because getting into winter construction. Gershman stated they could look at low interest bridge loan from a bank. Ms. Olson stated they maybe able to handle some of that in the bidding documents also as when the money is available. The City of Grand Forks is the major donor to start your campaign. Mr. Sondreal stated they know that and the Board has acknowledged that. Gershman stated now is the time to organize your Board, lot of work and get pastors together from all the different denominations - and Mr. Sondreal stated that's what they need to look at with their marketing plan they are going to be doing now.

It was noted 18-month campaign to raise $1.2 million with $400,000 guaranteed from the City. Christensen stated we have to raise the consciousness of churches.


Minutes/Finance-Development Comm. 9/24/02 - Page 5

Hamerlik stated if you change the '02's to '03's and '03's to '04's and take about $35,000 and in construction costs, $25,000 and before January, 04, there's $125,000 - and only need $160,000 before January of 04. Mr. Hanson stated funding cycle starts as early as they get the application and HUD approval and HUD has extended it - actually supposed to be ready January 1. Mr. Hanson stated if they get to that point they can actually fund pre-payment costs towards the end of the year on the account. He stated with these funds could award the contract prior to because making a commitment of $400,000 and will get the $200,000 in 2004. Ms. Olson stated they would be making one package because save everybody time and money - Christensen stated they are making that commitment and not conditioned upon your commitment but would like it conditioned upon your commitment. Mr. Sondreal stated they would bring that back to the Board.

Christensen asked Mr. Sondreal if he could get his Board to undertake that task, the campaign, and would like to see it finished and get done in next 3 to 5 years. Mr. Sondreal stated they are in the process of getting a new president for the Board and this will be one of the agenda items and everyone wants to see this done. Christensen asked if we have any way of finding or help them with capital drive - $20,000 to $25,000 as far as staff and people. Mr. Hanson stated he didn't know if we could assist them and not sure have the staff and whether they would need it, and if hire the right campaign chairman they will do that. Mr. Sondreal stated they would be willing to put it on the agenda as quickly as possibly can and give you some commitment within the next month. It was noted that the council will have to vote on this on November 4.

Mr. Sondreal stated that the Board has acted on the report and bought the report and wants to move ahead with report regardless of how they go about getting the money. Christensen stated there are lots of capital people and lots of churches know about them, and they get paid on a percentage and like bigger projects and asked that they explore that. Gershman stated that if they need a councilperson to appear before their Board that anyone of them would be happy to do that, talk to them and give them the view we have.

Mr. Sena stated that their annual banquet is October 10 - selling tickets for $25 and between $15 and $17,000 will be raised - banquet will be at Touch of Magic, above Applebee's and if they would like to go, to give him a call.

The meeting adjourned at 8:25 a.m.

Alice Fontaine
City Clerk