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February 20, 2001
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
February 20, 2001

The city council of the city of Grand Forks, North Dakota met in its regular session in the council chambers in City Hall on Tuesday, February 20, 2001 at the hour of 7:00 o’clock p.m. with Mayor Brown presiding. Present at roll call were Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim (on telephone system), Gershman, Christensen, Klave, Kreun, Martinson - 11; absent: Council Member Lunak, Bakken - 2; 1 seat vacant.

Mayor Brown announced that anyone wishing to speak to any item may do so by being recognized prior to a vote being taken on the matter, and advised that the meeting was being televised.

Mayor Brown stated he had two announcements - one is the Renaissance Zone designation, that he was proud to announce that the City of Grand Forks has received our Renaissance Zone designation from the North Dakota Division of Community Services, that this is an important step for our community and will be a great opportunity for investment, new development and revitalization of residential and commercial properties in the Renaissance Zone. He recognized Dennis Potter and Brad Gengler of the Planning Department for their hard work on this very important project.

Mayor Brown announced that the City of Grand Forks hired 131 individuals with Community Development Block Grant funds after the 1997 flood, these people were responsible for helping manage recovery programs, property inspection, information dissemination, office administration and many other duties. Since that time the pool of people has gradually been reduced as the need for additional staff has lessened, the City currently has 35 CDBG employees, 21 of those people have been approved for positions in the 2001 budget, the remaining 14 employees will be laid off as of February 25. He stated we owe a great deal of gratitude to all those who have served the City of Grand Forks well in these positions and would like to extend our best wishes to those who will no longer be working with us after this week.

ADOPT ORDINANCE NO. 3879, AMENDING THE COM-
PREHENSIVE PLAN, SECTION 18-0802, ELEMENTS OF
THE GRAND FORKS CITY CODE OF 1987, AS AMENDED,
PERTAING TO THE GRAND FORKS-EAST GRAND FORKS
2022 TRANSPORTATION PLAN UPDATE, 1999 BIKEWAY
AND PEDESTRIAN ELEMENTS; 2000 TRANSIT ELEMENT,
AND 2000 STREET AND HIGHWAY ELEMENT

An ordinance entitled “An ordinance amending the Comprehensive Plan, amending Chapter XVIII, Article 8, Comprehensive Plan; Section 18-0802, Elements of the Grand Forks City Code of 1987, as amended, pertaining to the Grand Forks-East Grand Forks 2022 Transportation Plan Update, 1999 Bikeway and Pedestrian Elements; 2000 Transit Element, and 2000 Street and Highway Element”, which had been introduced and passed on its first reading on January 16, 2001, and upon which the public hearing had been scheduled for this evening, was presented and read for consideration on second reading and final passage.

The deputy city auditor reported that the required legal notice had been published calling for a public hearing to be held on this matter this evening and further that to date no protests or grievances had been filed with her office.
Mayor Brown called upon the audience to see if there was anyone present who had comments to make on this matter. There were none.

The Planning and Zoning Commission reported having considered the matter of request from the Grand Forks Planning and Zoning Commission for final approval of an ordinance to amend Chapter XVIII of the Grand Forks City Code of 1987, as amended, amending Article 8, Comprehensive Plan, Section 18-0802, pertaining to the Grand Forks-East Grand Forks 2022 Transportation Plan Update, (1999 Bikeway and Pedestrian Elements, 2000 Transit Element, Year 2000 Street and Highway Element, and 2000 Grand Forks/East Grand Forks ITS (Intelligent Transportation Systems) Plan, together with al maps, information and data contained therein, and recommended final approval of an ordinance to amend Chapter XVIII of the Grand Forks City Code of 1987 and adopt the Grand Forks/East Grand Forks ITS Strategy Plan.

It was moved by Council Member Hamerlik and seconded by Council Member Klave that this recommendation be and is hereby approved.

Council Member Bjerke stated that in reviewing the information presented, it looked as though $2 million in capital costs for the projects if they were all approved, and asked if there was a time frame to implement this or if this was a proposal.

Dennis Potter, city planner, stated that this is a proposal which opens the door for the Metropolitan Planning Organization and for the two cities to seek federal funding under the various ITS programs that the federal government has made available; that at this point it is a wish list that comes out of an intensive study that was done by the outside consultant; and at present this is separate from the CIP and if approved would be considered in the next round of CIP and discuss with the traffic engineer and the engineering division if there are project they would like to see put into the CIP and assuming the council approves it, then go after the funding. It was noted that this doesn’t impact the budget nor put any commitment on any future budget.

Upon call for the question on the recommendation and upon voice vote, the motion carried 11 votes affirmative.

Upon call for the question of adoption of this ordinance and upon roll call vote, the following voted “aye”: Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Gershman, Christensen, Klave, Kreun, Martinson - 11; voting “nay”: none. Mayor Brown declared the ordinance adopted.

ADOPT ORDINANCE NO. 3880, AMENDING THE COM-
PREHENSIVE PLAN, SECTION 18-0802, ELEMENTS OF THE
GRAND FORKS CITY CODE OF 1987, AS AMENDED, PER-
TAINING TO THE GRAND FORKS-EAST GRAND FORKS 2022
TRANSPORTATION PLAN UPDATE, 1999 BIKEWAY AND
PEDESTRIAN ELEMENTS; 2000 TRANSIT ELEMENT, 2000
STREET AND HIGHWAY ELEMENT AND 2000 METROPOLITAN
INTELLIGENT TRANSPORTATION SYSTEMS COMPREHENSIVE
PLAN ELEMENT

An ordinance entitled “An ordinance amending the Comprehensive Plan, amending Chapter XVIII, Article 8, Comprehensive Plan; Section 18-0802, Element of the Grand Forks City code of 1987, as amended, pertaining to the Grand Forks-East Grand Forks 2022 Transportation Plan Update, 1999
Bikeway and Pedestrian Elements; 2000 Transit Element, 2000 Street and Highway Element and 2000 Metropolitan Intelligent Transportation Systems Comprehensive Plan Element”, which had been introduced and passed on its first reading on January 16, 2001 and upon which public hearing had been scheduled for this evening, was presented and read for consideration on second reading and final passage.

The deputy city auditor reported that the required legal notice had been published calling for a public hearing to be held on this matter this evening and further that to date no protests or grievances had been filed with her office.

Mayor Brown called upon the audience to see if there was anyone present who had comments to make on this matter. There were none.

The Planning and Zoning Commission reported having considered the matter of request from the Grand Forks Planning and Zoning Commission for final approval of an ordinance to amend Chapter XVIII of the Grand Forks City Code of 1987, as amended, amending Article 8, Comprehensive Plan, Section 18-0802, pertaining to the Grand Forks-East Grand Forks 2022 Transportation Plan Update, (1999 Bikeway and Pedestrian Elements, 2000 Transit Element, Year 2000 Street and Highway Element), together with al maps, information and data contained therein, and recommended final approval of an ordinance and the Non-Motorized Traffic Bridge Facilities Study amending the 1999 Bikeway Element of the Transportation Plan incorporating a site evaluation for non-motorized bridge locations

It was moved by Council Member Gershman and seconded by Council Member Martinson that this recommendation be and is hereby approved.

Council Member Gershman questioned the bridge cost estimates of $975,000 and the $655,000 whether those include engineering, site work, architectural design. Charles Grotte, assistant city engineer, stated that both the north and southside are the $975,000 and that does include the engineering, the downtown bridge includes engineering for $655,000 but that is a lower structure.

Upon call for the question on the recommendation and upon voice vote, the motion carried 11 votes affirmative.

Upon call for the question of adoption of this ordinance and upon roll call vote, the following voted “aye”: Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Gershman, Christensen, Klave, Kreun, Martinson - 11; voting “nay”: none. Mayor Brown declared the ordinance adopted.

APPROVE FINAL PLAT OF BIRKHOLZ’S 7TH
ADDITION

The Planning and Zoning Commission reported having considered the request from CPS, Ltd. on behalf of Phoenix Properties, a North Dakota Partnership, for final approval of a plat of Birkholz’s 7th Addition to the city of Grand Forks, North Dakota, including a variance to Subdivision Regulation Section 18-0907 (2)(L) 3 relating to access to arterial streets, being a part of the n ½ of the NW ¼ of Section 17, Township 151 North of Range 50 West of the 5th Principal Meridian (located south of 17th Avenue South between South 36th Street and South 42nd Street), and recommended to give final approval to the plat, with a variance to the access control section and subject to conditions shown on or attached to the review copy.
(This plat will supercede a previously approved plat of the same name approved by the city council on June 7, 1999 and was reconsidered and approved by the Planning and Zoning Commission on March 1, 2000.)

It was moved by Council Member Kreun and seconded by Council Member Klave that this recommendation be and is hereby approved. Carried 11 votes affirmative.

APPROVE SUMMARY ACTION CALENDAR

The deputy city auditor reported that all matters listed on this portion of the agenda are considered to be routine or noncontroversial and will be enacted by one vote. There will be no separate discussion of these items unless members of the governing body or administrative coordinator request specific items be removed.

A request for approval of Change Order No. 6, 2000 Forcemain and Watermain, City Project Nos. 4814 and 4816, with a recommendation to approve Change Order No. 6 for Projects 4814 and 4816, 2000 Forcemain and Watermain Relocations with Industrial Contract Services, Inc. in the amount of a deduct of $7,795.00

A request for approval of Change Order No. 1 for the 2000 Detector Loop Repair Contract, Project No. 5108, with recommendation to approve Change Order No. 1 for the 2000 loop detector repair contract in the amount of $5,712.80.

A request for approval of final Change Order No. 12, Project No. 5015, with recommendation to approve Change Order No. 12, Project No. 5015, Flood Hazard Mitigation, Nodak Contracting in the amount of $14,169.41.

A budget amendment from the Health Department (MCH Grant, HS Seat Belt Program) in the amount of $3,000, with recommendation that this budget amendment be approved.

A request from the Fire Department for permission to purchase a used vehicle not following bidding requirements was returned to staff.

A report from the Inspections Department relative to a building at 219 Cottonwood Street being in substandard condition with a recommendation to receive the inspection report, to set the public hearing on determination of the building being in substandard condition, and to direct the city auditor to send notice of the public hearing to the proper individuals.

A report from the Inspections Department relative to a building at 416 North 5th Street being in substandard condition, with recommendation to receive the inspection report, to set the public hearing on determination of the building being in substandard condition, and to direct the city auditor to send notice of the public hearing to the proper individuals.

A report from the Inspections Department relative to a building at 607 North 3rd Street being in substandard condition, with recommendation to receive the inspection report, to set the public hearing on determination of the building being in substandard condition, and to direct the city auditor to send notice of the public hearing to the proper individuals.

A report from the Inspections Department relative to a building at 1013 North 4th Street being in substandard condition with recommendation to receive the inspection report, to set the public hearing on determination of the building being in substandard condition, and to direct the city auditor to send notice of the public hearing to the proper individuals.

A report from the Inspections Department relative to a building at 1024 Linden Court being in substandard condition with recommendation to receive the inspection report, to set the public hearing on determination of the building being in substandard condition, and to direct the city auditor to send notice of the public hearing to the proper individuals.

The matter of Community Development Block Grant (CDBG) Supplemental Funds with recommenda-tion to authorize the utilization of the remaining CDBG Supplemental Funds, as projects close, to the attached utility projects: Document No. 8061.1 - Schedule of Dual-funded Utility Projects.

The matter of the “wet-side” City-owned homes sales procedure giving authority to staff to process the sale of those properties within the specific guidelines and parameters of the procedures, with recommendation for approval.

A request from CPS, Ltd. on behalf of Lynn C. and Virginia A. Vreeland for final approval of a minor subdivision (fast track) of the replat of Lot A, Block 9 of the Replat of Lots 7-11, Block 9, Westward Acres Addition, including half of vacated Tisdale Place adjacent thereto (located at 821-823 South 24th Street), with a recommendation for final approval subject to conditions shown on or attached to the revised review copy.

It was moved by Council Member Kreun and seconded by Council Member Klave that these recommendations be and are hereby approved. Carried 11 votes affirmative.

RECEIVE AND FILE MATTER OF PET STORE
LICENSING AND INSPECTION

Information relative to pet store licensing and inspection in the city of Grand Forks was presented to the city council after review and consideration by the committee of the whole.

Ms. Venita Quamme, 506 2nd Avenue South, addressed the city council stating that she had visited all three of the pet stores in the city in the last three and one-half weeks, that she is not accusing pet store personnel of intentional cruelty to the animals housed there, but according to the NDCC cruelty includes neglect, and that she feels that the pet stores are still neglecting animals (ie., loose birds and no idea whether had access to food and water, cleaning agents causing burning of her eyes, filthy cages, filthy water), and animals housed at pet stores go to live in someone’s home and if health or behavioral problems due to neglect on the part of pet store personnel, then consumer has to pay the price, and hoped that the council will have some sort of inspection to help insure the health and safety of both animals housed in pet stores and the consumer.

Mark Mayer, manager of Petco, stated that Ms. Quamme has brought to his and his personnel’s attention problems they may have in their store and do correct those situations as quickly as possible; and reviewed animals in his business and personnel who take care of and insure the health of the animals. He stated they are open to inspections and have had individuals in from the Health Department and animal warden, his veterinarian comes in periodically; and that Petco has strict guidelines as to care of animals; and no problem with monitoring.

Duane Bohnsack, Stonegate III, South Forks Plaza, stated that they have been in business for 28 years, working with the State Legislator, State Veterinarian on licensing, laws, etc.; that they know who their breeders are, their suppliers and get good livestock, and that the last thing that they want is to have customers coming in and complaining about their animals, that they do a good job.

Don Shields, Health Department, stated since their last update they have called the ND Department of Health and checked with the animal warden this morning and have not received any additional complaints, and will continue working with the animal warden, Humane Society and with the pet stores; and were not recommending licensing of pet stores at this time.

Council Member Burke asked if the pet stores would object to displaying some type of voluntary notice stating that if customers felt concerns about animals were not being addressed by the management, the phone number and Health Department as a place to file a complaint. Mr. Mayer stated he would not, but because corporate store, would have to go through his superiors.

There were no further comments and it was moved by Council Member Kreun and seconded by Council Member Klave to receive and file the information. Carried 11 votes affirmative.

APPROVE BUDGET AMENDMENT FOR HEALTH
DEPARTMENT

A budget amendment to transfer funds within the Health Department budget in the amount of $4,914 from accumulated cash carryover for office equipment needs was presented and read after consideration by the committee of the whole.

It was moved by Council Member Kreun and seconded by Council Member Klave to approve the budget amendment for office equipment needs.

Council Member Brooks stated that the cash carryover is there so department heads won’t spend money at the end of the year, that they are forcing the department heads to take this money and carry it forward to the current budget so that he will have that dollar figure in his equipment budget; this is a bad policy and need to change the system.

Upon call for the question and upon voice vote, the motion carried 11 votes affirmative.

ADOPT RESOLUTIONS RELATING TO GENERAL OBLI-
GATION HIGHWAY REFUNDING BONDS, SERIES 2001A,
AND TO SEWER RESERVE REVENUE REFUNDING BONDS,
SERIES 2001B; AND CALLING FOR PUBLIC SALE

The deputy city auditor presented the matter of issuance of $1,400,000 General Obligation Highway Refunding Bonds, Series 2001A and $1,875,000 Sewer Reserve Revenue Refunding Bonds, Series 2001B for the council’s consideration after review by the committee of the whole.

It was moved by Council Member Kreun and seconded by Council Member Klave to approve the issuance of the $1,400,000 General Obligation Highway Refunding Bonds, Series 2001A and $1,875,000 Sewer Reserve Revenue Refunding Bonds, Series 2001B and set the sale date for March 19, 2001. Carried 11 votes affirmative.

Council Member Kreun introduced the following resolution and moved its adoption: Document No. 8062 - Resolution.

The motion for the adoption of the foregoing resolution was duly seconded by Council Member Klave and upon voice being taken thereon the following voted in favor: Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Gershman, Christensen, Klave, Kreun, Martinson - 11; and the following voted against the same: none; whereupon the resolution was declared passed and adopted and was signed by the Mayor and his signature attested by the City Auditor.

Council Member Kreun introduced the following resolution and moved its adoption: Document No. 8063 - Resolution.

The motion for the adoption of the foregoing resolution was duly seconded by Council Member Klave and upon voice being taken thereon the following voted in favor: Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Gershman, Christensen, Klave, Kreun, Martinson - 11; and the following voted against the same: none; whereupon the resolution was declared passed and adopted and was signed by the Mayor and his signature attested by the City Auditor.

APPROVE LIMITED SOURCE BIDS FOR EQUIPMENT
AT GRAND FORKS WASTEWATER TREATMENT PLANT,
PROJECT NO. 4377

A request for limited source bids for equipment items at the Grand Forks Wastewater Treatment Plant, City Project No. 4377, was presented to the city council after consideration by the committee of the whole.

It was moved by Council Member Kreun and seconded by Council Member Klave that the request be approved for the City to call for limited source bids on select items in the upcoming Grand Forks Wastewater Treatment Plant bid package, City Project No. 4377.

Council Member Brooks stated there are two items that they need and suggested that the council should state the items that they want and not have someone come forward and appeal their bid being rejected, etc. Mr. Grotte stated that the council has it within their authority to state that those are the only two companies whose equipment they will allow - the reason those two are allowed is that several of the employees have been to those facilities that have this equipment, trade-shows, etc. and that these two particular models meet all the requirements, that doesn’t mean that there isn’t another brand that does the same thing but to go through the process of determining whether those brands are the same is time consuming, etc. and know that these two meet the requirements and that’s the reason for the request. He stated that by approving the action is limiting the bidding to those two particular manufacturers.

Upon call for the question and upon voice vote, the motion carried 11 votes affirmative.


APPROVE ENTERING INTO STANDARD MITIGATION
AGREEMENT WITH US ARMY CORPS OF ENGINEERS
AND NORTH DAKOTA STATE HISTORIC PRESERVATION
OFFICER CONTINGENT UPON REVIEW BY CITY ATTORNEY

The matter of residential historic mitigation for the permanent flood protection project with recommendation to approve entering into a Standard Mitigation Agreement (SMA) for fourteen (14) residences at the City of Grand Forks, North Dakota with the US Army Corps of Engineers (USACE) and the North Dakota State Historic Preservation Officer (NDSHPO) and authorizing the appropriate City officials to sign the agreement.

Charles Grotte, assistant city engineer, reported this was reviewed briefly last week and a revised draft version dated February 12, 2001 and wanted to mention that they had another conference call and a few minor changes were made to the agreement, not changing the intent of the agreement but clarifying it, and also that Mr. Swanson may have some concerns on it, and would like to see that the motion be changed to rather than approving the agreement to approve it contingent upon minor clarifications and review by the city attorney.

It was moved by Council Member Gershman and seconded by Council Member Hamerlik to approve the agreement contingent upon minor clarifications and review by the city attorney.

Mr. Swanson stated his comments are not substantive in nature but rather primarily are terminology or language as included within the agreement, and feels the motion is appropriate.

Upon call for the question and upon voice vote, the motion carried 11 votes affirmative.

TABLE PROPOSED ORDINANCE AMENDMENT TO MERGE THE ALERUS CENTER WITH THE GRAND FORK CONVENTION
AND VISITORS BUREAU TO MARCH 5, 2001

It was noted that the first reading of the proposed ordinance amendment to merge the Alerus Center with the Grand Forks Convention and Visitors Bureau had been tabled to March 5, 2001.

ADOPT RESOLUTION URGING CITIZENS TO CONSIDER
CONTRIBUTING TO LOCAL ORGANIZATIONS RAISING
FUNDS FOR DISASTER RELIEF FOR INDIA

Rick Duquette, assistant to the mayor, presented the matter of funding options for disaster relief for India, that he had some communication with the local Red Cross and it’s their recommendation that if the city council and mayor decide to submit this funding that we send it through the local Red Cross as it might be the most expeditious way to do it; and that Mayor Brown had suggested that we do submit this funding to the Red Cross for disaster relief in India.

Council Member Brooks stated that Altru Hospital is doing a fund raiser as well as one of our local radio stations, KNOX, not only for the earthquake in India but since then El Salvador has had an earthquake; that this can go on and on - that he doesn’t believe that the council has the authority to take taxpayer dollars and direct them out of the country. Mr. Swanson stated that he is not aware of any prohibition included in the Century Code nor the City Code which would prohibit the council from making a contribution in aid of this nature or for another type of disaster, that it really is a policy decision.

Council Member Brooks moved that the council pass a resolution that we strongly urge the citizens of Grand Forks to consider contributing to local organizations raising funds to be sent to the earthquake stricken areas in India. Council Member Christensen seconded the motion.

Council Member Glassheim moved a substitute motion that the City of Grand Forks send $5,000 to the Red Cross for the purpose of assisting India with the process of relief and rebuilding for their recent earthquake, and that the funds be taken from the excess sales tax. Council Member Martinson seconded the motion.

Upon roll call the following voted “aye”: Council Members Glassheim, Martinson - 2; voting “nay”: Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Gershman, Christensen, Klave, Kreun - 9. Mayor Brown declared the motion defeated.

Upon call for the question on the original motion and upon voice vote, the motion carried 11 votes affirmative.

MAYOR AND COUNCIL MEMBER COMMENTS

1) Council Member Burke stated that the Event Center Core Committee might have gone into an executive session today to deal with recommendations from the city attorney - but raised issue that he would have liked to have been party to that discussion, that in the past he and other council members have been excluded from the Events Center Core Committee when they were in executive session on hotel negotiations, and asked for referral to staff with recommendation to committee of the whole, the possibility of naming all of the council members as ex officio members of all committees, so should council member wish to sit in on an executive session that they can do that and be better informed about the issue before it comes to the council.

2) Council Member Bjerke asked Mr. Potter, City Planner, for a report on the Downtown Design Review Board (members and their duties), that decisions of appeal are made to Planning and Zoning Commission, which means two unelected bodies determine the fate of what’s going on downtown; and would like staff recommendation as to whether that committee should be kept or disbanded.

3) Council Member Brooks urged citizens of Ward 6 to get involved.

4) Council Member Brooks stated that the CDBG funding is over and asked Urban Development, Terry Hanson, for written report on status of Congressional I and II - number of homes remaining and status of lots, and total dollar amount given Grand Forks Homes.

5) Council Member Brooks asked for a city organizational chart.

COMMENTS/INFORMATION FROM CITY ATTORNEY
RELATIVE TO ARTICLE IN NEWSPAPER ON LAW SUIT
THE CITY WAS INVOLVED IN FOR CONDEMNATION
OF PROPERTY NEAR THE WATER TREATMENT PLANT

Mr. Swanson, city attorney, commented on article which appeared in the Grand Forks Herald on Saturday, February 17, that attempted to give information about a law suit the City was involved in for the condemnation of property near the water treatment plant; the property was required for the water intake structure which is going to be constructed. He expressed concern that the article did not appear to be factually accurate nor did it appear to be balanced. In particular there was no effort on the part of the Grand Forks Herald reporter to contact the City Attorney’s Office and consequently, the article left significant misunderstanding about what happened. The initial facts were that the City had obtained an appraisal showing the property was worth $180,000 and the City made that offer to Mr. Buegel; Mr. Buegel rejected the offer and several months later presented the City of Grand Forks with an appraisal of $289,000, what the Grand Forks Herald article did not indicate was that the City of Grand Forks offered Mr. Buegel in October of 2000 the sum of $289,000, an amount equal to his appraisal, Mr. Buegel rejected that offer and consequently trial was held; the article did not indicate that Mr. Buegel asked for value of $600,000, his attorney suggested that if that number was not supported by the evidence, that perhaps $450,000 was an appropriate amount; the jury returned a verdict of $230,000 which is $59,000 less than what had been offered by the City of Grand Forks. Under ND law the offers are not admitted into evidence so the jury had no information about them. The article left the impression that the City had either acted inappropriately in dealing with the property owner or that it had significantly been damaged by the jury verdict. Point of fact is that the City Attorney’s Office was very pleased with the sum of $230,000 determined by the jury.

Mr. Swanson stated that is now the fourth eminent domain action that the City of Grand Forks has tried, either for the southend drainway, the water treatment plant, or for flood protection, not that this standard will hold true because he has tried enough cases or been in practice long enough to know that you never can predict what will happen, but this is the fourth action in a row in which the ultimate decision of value was either equal to or less than what had been offered by the City of Grand Forks. He stated there was a counter claim, the article appeared to indicate that there were compensatory damages provided - there were no compensatory damages, that we were successful by motion to have the counter claim dismissed entirely by the judge.

REQUEST FOR APPROVAL OF SETTLEMENT OF
CLAIM - AURORA ROOF COLLAPSE

Mr. Swanson stated that he briefed the Core Committee on matter earlier which has to do with a proposal from Chubb Insurance on a settlement with them for the collapse at the Aurora Center of the steel roof structure; Chubb Insurance is our Builders Risk carrier, we have made claims with them following the incident and to this point in time have been paid approx. $798,000 by Chubb Insurance; that several months ago he and Lynn Witt had made a suggestion to Chubb that they look at a lump sum settlement with the insured so that all of the claims that we were presenting to our insurance carrier could be resolved, that would still leave our opportunity to recover the balance from the contractor’s that we believe are responsible for the collapse of the steel - in particular the fabricator of the steel structure itself. He stated yesterday afternoon they reached a point in negotiations with Chubb Insurance where they have agreed upon settlement language in an agreement and Chubb is offering to pay approx. $1.3 million total dollars, an additional $800,000 and already received to resolve all coverage issues under the Builders Risk policy, the exact amount is $1,293,000+ but approximately $1.3 million; in addition they’re proposing that moving forward with the mediation session, which will be held in Chicago beginning on March 7 and the parties to that mediation include CanAm Steel, the fabricator of the steel trusses and Havens Steel which was the erector subcontractor as well as the City of Grand Forks; Chubb would pay 50% of the cost of mediation including the Thornton-Tomasetti engineer who will participate in the mediation. The balance of the proposal is that any recovery that is received from the mediation or subsequent negotiation from either Havens Steel or CanAm would be shared on a 50-50 basis, the same percentage as what the cost would be shared at; the agreement provides that any coverage that may be provided to Havens Steel under this Builders Risk policy are saved, in other words we’re not addressing any claim that Havens Steel may have under the Builders Risk policy, they can pursue that separately; however, it does provide that if there are any other subcontractors that would present a claim and to date no one else has and under this proposal all subcontractors except Havens would appear to be satisfied; the City would have to defend any of those actions. He stated he and Mr. Witt believe that this is a good settlement, in fact it is beyond what they had anticipated that Chubb would ultimately make an offer to the City at, and that they are recommending that the city council approve a settlement of approximately $1.3 million, to approve the agreement in which the City and Chubb would share the costs on a 50-50 basis and share future recoveries on a 50-50 basis to provide the hold harmless indemnification language excluding any claims by Havens Steel. Additionally he is recommending or asking that the council consider granting to the Core Committee the power to act for purposes of establishing mediation strategies and settlement approvals that will be coming up on the 7th. He stated this is not an agenda item and will require a motion unanimously approved for council to take action on this tonight. He stated at this point he is not recommending that the council need to go into executive session, the settlement offer from Chubb has some real time constraints, they want everything done well in advance of the mediation, and it is on a take it or leave it type basis, no more negotiations to be undertaken, those negotiations are concluded at this point.

It was moved by Council Member Christensen and seconded by Council Member Kreun to consider this matter this evening.

Council Member Hamerlik stated that the Events Center Core Committee had met and made a recommendation to proceed this way; and that the Core Committee voted unanimously to agree with Mr. Swanson’s statements.

Upon call for the question and upon voice vote, the motion carried 11 votes affirmative.

It was moved by Council Member Christensen and seconded by Council Member Gershman to approve
recommendations by the city attorney to approve a settlement of approximately $1.3 million, to approve the agreement in which the City and Chubb would share the costs on a 50-50 basis, and share future recoveries on a 50-50 basis, to provide the hold harmless indemnification language excluding any claims by Havens Steel, and that the council grant to the Core Committee the power to act for purposes of establishing mediation strategies and settlement approvals that will be coming up on the 7th.

Council Member Burke questioned how close the $1.3 million is to making us whole; and whether that number includes costs for attorney’s fees, additional engineering and any interest costs we might have incurred for the expense that we went to between the time we incurred it and the time we will be reimbursed by the various parties. Mr. Swanson stated he was hesitating putting it into any numerical position, that our original estimates of loss were approx. $2.2 million, that number appears to be slightly high as we’ve got actual dollars, and believe there would be $700,000 to be attempted to be recovered. He stated that the $2.2 million doesn’t include out of pocket expenses for attorney’s fees, doesn’t include any interest costs, opportunity costs, for the money; it does include some engineering fees and includes in particular fees related to the cause and original investigation but does not include certain engineering fees that were utilized to re-examine the roof structure to insure that there was not a design defect in it.

Council Member Burke moved an amendment to the motion that provides for direction to our negotiators in the mediation that they attempt to recover all funds, including our out of pocket expenses for engineering, attorneys’ fees and any interest costs for money as part of what we try to recover through the mediation. The motion died for lack of a second.

Mr. Swanson stated that the attorney’s fees under ND law and virtually any other law, unless there’s a contractual obligation to pay attorney’s fees, you can’t recover those; if we are mediating you need to understand that you have to have some option and some incentive for the other party to agree to mediate - if you are going to stand at 100% you’ve not given them any option as a realistic matter to settle it, why would they pay 100% when they could litigate it and potentially with the risk of litigation, win. If our position is for mediation purposes that we’re not going to go in that direction, then question why want to mediate it at all.

Upon call for the question and upon voice vote, the motion carried 11 votes affirmative.

APPROVE MINUTES FEBRUARY 5 AND 12, 2001

Typewritten copies of the minutes of the meetings of the city council held on Monday, February 5, 2001 and February 12, 2001, were presented and read. Council Member Bjerke noted that on page 10 of the minutes of February 5 regarding the liquor license for Branigan’s the motion should show a vote against approval of the license by Council Member Bjerke rather than Council Member Burke. It was moved by Council Member Kreun and seconded by Council Member Klave that these minutes be approved as corrected. Carried 11 votes affirmative.

APPROVE BILLS ANDS ESTIMATES FOR VARIOUS
PROJECTS

Vendor Payment Listing No. 01-04, dated February 20, 2001 and totaling $1,532,118.48, and various estimates for payment as follows: CDBG Estimate Summary, $673,393.59, and Flood Estimate Summary, total deduct of $75,438.22; were presented and read.

It was moved by Council Member Martinson and seconded by Council Member Klave that these bills be allowed and that the city auditor be authorized to issue warrants in payment of the same. Upon roll call the following voted “aye”: Council Member Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim, Gershman, Christensen, Klave, Kreun, Martinson - 11; voting “nay”: none. Mayor Brown declared the motion carried and the bills ordered paid.

ADJOURN

It was moved by Council Member Christensen and seconded by Council Member Kreun that we do now adjourn. Carried 11 votes affirmative.

Respectfully submitted,



Saroj Jerath
Deputy City Auditor

Approved:
____________________________________
Michael R. Brown Mayor