City of Grand Forks, North Dakota

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GRAND FORKS
COMMITTEE OF THE WHOLE MEETING
MONDAY, FEBRUARY 12, 2001

The city council met as the Committee of the Whole on Monday, February 12, 2001 at 7:00 p.m. in the council chambers with Mayor Brown presiding. Present at roll call were Council Members Brooks, Bjerke, Stevens, Hamerlik, Burke, Glassheim (teleconference system), Gershman, Lunak, Christensen, Bakken, Kreun - 11; absent: Council Members Klave, Martinson - 2; 1 seat vacant.

Mayor Brown announced that when addressing the committee to please come forward to the microphones, and advised that the meeting is being taped for later television play.

Mayor Brown presented certificate of appreciation awarded to Springsted, Inc., the City’s financial advisor, for their generous contribution to the success of the Bill Cosby show at the Alerus Center; that $4992 worth of tickets were purchased by Springsted, Inc. for the Bill Cosby show on Sunday, February 11, 2001, and given to the City of Grand Forks to be distributed to individuals and families who would not otherwise be able to attend, and these tickets were distributed in the following manner: Listen Center 50; YMCA 12; Salvation Army 10; Community Action 40; LaGrave Learning Center 28; Community Violence Intervention Center 8; Ruth Meiers Adolescent Center 12 and Prairie Harvest 28. Al Erickson, Springsted, stated they were very proud to be involved with the City and expressed appreciation to the City feelings towards the City and are pleased that it was helpful to the City and thanked City for allowing them to be involved.

Richard Warne, Administrative Coordinator, reviewed committee of the whole procedures, that this is the first meeting under new city council procedures, and that this is a work meeting or study session and this is a time for the mayor and city council to carefully review issues that they will vote on next week or at a future city council meeting. All issues that are brought before the city council will now go through four phases: preparation, deliberation, reflection and action. A staff report has been and will continue to be prepared for all items that will come before the city council. The committee of the whole meeting is a time for deliberation, not all items need be discussed and staff will only make a presentation when requested by the mayor or city council. He stated that the meeting procedures recommended are as follows: mayor will ask at beginning of the meeting which items the city council wishes to pull for discussion, along with any item where citizens have filled out a speaker card or where staff has made a request to pull an item; the mayor, city council and viewing public will hear a short staff report on pulled items, ask questions, take citizen input and discuss the issue if desired. Any staff directives will be given at this time; no motions will be made or vote taken at this meeting but reserved for the city council meeting. He stated that between the committee of the whole meeting and the regular city council meeting is time for reflection and consideration. The city council meeting is the time for action, debates and making motions. No new binders will be issued but a new agenda with any additional requested material will be distributed to the city council. He stated this is a new process and may have to make adjustments as go along, staff is prepared to do so and want to make this process smooth and want to have open, efficient and effective government and believes these procedures will do that.

There was some discussion about whether the general public will know how or where the council is going - and as a result they don’t know how to respond; whether motions should be made. There were some questions as to notification to the public, and it was stated these meetings will be televised in April (live) and that the committee of the whole agendas are being published on Sunday prior to Monday’s meeting. It was noted that during interim tapes would be replayed on Friday at 8:00 or Sunday at 1:00 p.m..

Council Member Hamerlik asked if there could be a motion made as a recommendation to the full city council. Mr. Swanson stated that neither your ordinance nor Roberts Rules would prohibit a motion from
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being made at a committee of the whole meeting, it would not be considered final action but would simply be a recommendation to council; that whether a motion is made and tabled before you take a vote or even if a motion is made and voted upon, until it is designated as final action it is preliminary and a recommendation subject to change, defeat or amendment. It was also noted that if it was their wish to act as a council, can convene and act as council

COMMITTEE OF THE WHOLE DISCUSSION ITEMS

2.1 Change Order No. 6, 2000 Forcemain & Watermain, City Project Nos. 4814 and 4816.
No discussion.

2.2 Change Order No. 1 for the 2000 Detector Loop Repair Contract, Project No. 5108.
Council Member Brooks questioned the amount of the change order which is to bring the contract from $17,230 to $22,942.80 or $5,712,80 increase - but it was stated that this is brought to committee because of the percentage. Council Member Gershman questioned whether several of the loops that were repaired have been charged back to the original contractor - Mr. Grasser stated this would have been part of the watermain replacement project, and gets very expensive if try to bid loop repair under a different type of project and as they already have a loop project bid added to that project, but on the budget side charged it back to the project in which the work was done.

2.3 Final Change Order (#12), project No. 5015.
No. discussion.

2.4 Pet Store licensing and inspection.
Don Shields, Public Health Dept., stated that on September 25, 2000 Ms. Quamme provided some information to public safety committee concerning allegations of poor treatment of pets in certain pet stores in town and committee referred the item to their department; that they have continued monitoring this over past several months and did not find conditions that showed poor animal health or poor conditions for those animals nor find anything that would consider a violation.. He also stated they have been in contact with the ND State Board of Animal Health, local Humane Society as well as the animal warden. He stated they were not recommending any additional regulation by the City.

Duane Bohnsack, Stonegate III Pet Store at South Forks Plaza, stated he has been in business for 28 years, coming here to make himself available if they have questions and concerns they can take care of.

2.5 Budget amendment for Health Department ($4,914, 2/2/01).
Council Member Brooks stated the report stated this was for office equipment and asked if specific piece of equipment. Mr. Shields stated they don’t have a specific piece of equipment in mind at this time - that have found that items of equipment do break each year, and for last four years there’s been zero in the budget for replacement of those types of things and because of that depend on the cash carryover. Council Member Burke asked if they included line item for office equipment replacement; Mr. Shields stated they did not, that the direction from Finance was not to put items in that category; and try to use a combination of carryover or revenue that they may generate to put in there. Council Member Burke stated that what they’ve done is not put the line item in the budget process but putting line in after the fact, and circumventing the intent of the mayor’s office when they went through the budgeting process - either put in during budget or pay for a piece of equipment when it comes up from cash carryover. Mr. Shields stated if they gain efficiencies during the year, can use those efficiencies and use those dollars to replace equipment as needed. Council Member Bakken stated we were going to empower department heads to do what they need to do to run the department, not if have to ask for permission to buy anything.
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Council Member Gershman stated if you don’t have that ability for the department heads and staff to save money and carry over for the next year, will do what federal agencies do - spend it down, and this is opportunity for them to be creative and look for ways to have a little cash to do some things and agrees with Council Member Bakken, and if department can carry forward any funds, doesn’t have problem with that but to be prudent with the money and shouldn’t be penalized but complimented.

2.6 Budget amendment for Maternal Child Health Grant, (HL30, $3,000, 1/31/01)
No discussion.

2.7 Request permission to purchase used vehicle not following bidding requirements.
Chief O’Neill stated they have $11,000 budgeted in 2001. Mr. Swanson stated there is no provision in City Code or State law that allows a direct purchase - the alternatives could amend your Code to address situations like this - you do have some spending limitations on when bidding is required, the theory behind those limitations is to prevent somebody from making a direct purchase from relative, etc., but could amend Code to clearly give authorization for direct purchase.

Council Member Christensen asked if there was possibility to purchase a vehicle from some other department in the city; and if there was an inventory of vehicles owned by the various departments or perhaps a vehicle that isn’t being used, etc. Chief O’Neill stated they are talking to the police department about a Blazer they are trading in at the end of the year - that they have vehicles for fire marshals and are trying to get 3 decent vehicles for them; they are not using their personal vehicles because of the gear that they carry in their vehicles. Chief O’Neill stated he would check with other departments. Mayor Brown stated that the city auditor will look at the policy that’s been waived to allow this to happen and have clarification for council by Monday.

The question was asked what the maximum dollar amount is to purchase without bidding. Mr. Swanson stated $2,500 under City Code is the max. without bidding and that provision has been at that level for perhaps as long as 16 years; however, there’s a fiscal policy adopted in 1998 out of the finance department that is more liberal than what the Code says, but he has to rule contrary to what the city auditor would like, that the ordinance will supercede any policy that’s drafted; however, the policy has been waived in purchases for used vehicles off a lot, and not aware that the policy has been waived to do direct purchases from individuals. Mr. Swanson stated that the policy is in effect but there are certain items that are in violation or in opposition to provisions of the Code, his suggestion is if inclined to utilize direct purchases from individuals, amend the Code and establish what conditions or criteria you wish to use; that he doesn’t think there’s anything being proposed that is unacceptable or unreasonable and feels council is looking for these types of flexibilities but want to insure that you don’t have something that later on becomes an embarrassment or a concern that council was not aware of. Council Member Christensen stated they should probably review the Code and amend those provisions of the Code that require amendment in light of our current streamlined procedure and in light of the fact that we’re trying to empower people to make decisions within the budget; and should be working on that in the year 2001. Council Member Bakken suggested that they look at the max. bidding amount again. Council Member Gershman stated if they buy vehicles from a dealership might get extended warranty where if buy privately you’re on your own. Chief O’Neill stated their 3 mechanics would shop for the vehicle, may be private or dealership. Council Member Christensen asked staff to see what vehicles they have internally in the city.

2.8 Substandard building at 219 Cottonwood Street.
2.9 Substandard building at 416 North 5th Street.
2.10 Substandard building at 607 North 3rd Street.
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2.11 Substandard building at 1013 North 4th Street.
2.12 Substandard building at 1024 Linden Court.
Bev Collings, Inspections, reviewed procedures they follow - they receive complaint from citizen (they do not take the names of individuals but go and investigate on its own merits) contact the owner of the property, investigate the site, request inspections and request that repairs be done to the property. She stated they have been attempting to work with the property owners to get these resolved, but not being resolved. She stated that Mr. McGoven owner of 416 N. 5th Street was unable to be here this evening and asked that they pull this, he has been very cooperative and intends to demolish the structure. She stated that Mr. Eccles who owns property at 607 North 3rd Street was not able to attend, that he has hired a contractor to demolish the structure but that wouldn’t be done until April.

Mr. Swanson stated that in reviewing the staff recommendation that no public hearing has been set, that couldn’t be determined until the council acts on the 20th; and his recommendation is that on the 20th you set the date of the hearing and use 30 days for time period before that formal hearing, at hearing would make specific findings as to whether or not find this property or properties to be in violation of your building code, and then either give orders to remediate the problem or to demolish the structure. He suggested setting the public hearing date for April 2. It was noted that the property will be posted.

Wanda Vaughn, 219 Cottonwood Street, stated she purchased the house in December, 1996 and presented letter explaining the situation, that she didn’t take the buyout from the City as the damage was at approx. 50% or lower, and was given a permit to fix her house on June 1, 1998, that she spoke with someone from the City and they gave her the choice to go either way - fix the house or take the buyout; that she opted to fix the house; that after further inspection the City is requiring her to floodproof the house and at time of buyout nothing was said about floodproofing the house. She stated she has paid taxes on the property and put money into it during this time. She stated that the basic damage to her house from the flood was furnace and hot water heater and bottom part of sheetrock on lower level of house; that the house has been vacant since the flood and doesn’t feel that has been deteriorating the house.

Mrs. Collings reported that originally Ms. Vaughn’s house was over 50% damaged determined by the Corps of Engineers, she asked Inspections to do review in late 1997 or early 1998, which they did and found it slightly over 50% and that every property owner was given report that the house would have to be flood mitigated or floodproofed if over 50% because of FEMA regulations. She stated they agreed under 50% (49.9%) and trying to work with citizens; and what has happened since is that there is further deterioration and that’s why over 50% now - there were errors in the report originally and hard to tell now what was there and not there. She stated they did have an appeal process to the 50% damage where could hire licensed contractor to give them an est. on the repairs.

Council Member Kreun stated sensitivity issue is key here and building codes another issue, but this particular house is affecting many other homes in that area and those people have same sensitivities and if this house isn’t taken care of in a reasonable amount of time and fixed up in a proper manner, it becomes a health issue and safety issue and issues for neighbors is to reduce their particular value of their homes as well, but been 4 years and nothing has taken place.

Ms. Collings stated that if the council finds the building substandard they would not have to order demolition but would have to order the house repaired to compliance with code regulations. She also stated that they have no program for demolition, that if demolished would be at our cost and then put as a special assessment against the property. (Est. cost of demolition $5,000 which includes cutting off of water).

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There was some discussion relative to cost of demolition and cost of renovation of the house. It was noted that the lot is 50x140’ and is a rebuildable lot.

Mr. Larson, 1013 North 14th Street, reported he purchase property from HUD late in 1998 with the idea of fixing it up and making it livable, however, shortly after purchased it discovered that the City of Grand Forks owns the vacant lot adjacent to his property, and thought perhaps tear his house down and purchase the lot from the City and either move in a better house or build a new one, however, put into limbo because City has a lot of lots and they haven’t acted on the lot next to his property; willing to tear house down and has contractor and requested to remove it himself and asked the City to keep in mind that he is interested in that vacant lot and would improve the neighborhood; will start demolishing by the first of April. Mr. Larson was asked to provide City with date of completion. Council Member Christensen asked Mr. Larson to give Ms. Vaughn the name of the contractor; and also to make sure that Mr. Larson is aware of sale of the adjacent lot.

Roger Sannes, 1020 Cottonwood Street, stated he owns property at 1024 Linden Court and had intention to bring up to Code and put as rental property, that he has had several contractors look at the property and found that foundation not up to standard and would cost too much money to renovate; that he has someone who is interested in purchasing the building and moving it out of town; that he would remain owner of the lot. Mr. Sannes was notified they would set the public hearing for April 2 with additional time to appeal..

2.11 Issuance of $1,400,000 General Obligation Highway Refunding Bonds, Series 2001 A and $1,875,000 Sewer Reserve Revenue Refunding Bonds, Series 2001B________________
No discussion.

2.12 CDBG Supplemental Funds.
Council Member Christensen stated they can allocate this money - approx. $600,000 and that Mr. Hanson’s department was going to give council a recommendation as to how the money should be allocated against existing projects. Terry Hanson, Urban Development, stated listing is included in the handout when and if the funding does become available to them; he stated priorities were discussed with the finance department and engineering department as well as projects that they felt could pay off completely utilizing CDBG funds and put the City funds they are replacing out of the public works dollars that would cause necessity to increase water rates, etc.

2.13 Wet-side City-owned homes sales procedure.
No discussion.

2.14 Approval of Metro Transit Center construction bids.
Council Member Gershman questioned cost of the 1,000 sq.ft. building with canopies at cost of $548,478. Todd Feland, public works, reported that about half of that cost is for site work related to demolition of lot itself and putting down concrete including some of the benches and canopies, that part of the street also needs to be demolished; he stated that the building is basic with concrete floor, some brick - supposed to blend in with the Corporate Center; building has waiting area, ticket areas and two bathrooms. Council Member Christensen questioned why we need this building on that corner, that he’s familiar with ridership after having read reports, that he doesn’t see lot of people getting on or off buses, that they are capable of buying tickets other than riding bus downtown to buy tickets - why spend $500,000 putting up transit center on that corner at this time - city is growing to the southwest and that portion of the city isn’t serviced by bus transportation - and wondered if council shouldn’t re-examine the

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placement of this facility downtown and rethink location of a transit center within a more centrally located section of the city if we actually even need it.

Mr. Feland stated that this project initiated before his or Mr. Foster’s time with the city - previously transfer center was located at City Center Mall and after flood City asked for and received money for a new center downtown; that transit center seen as part of the development of the downtown and to get buses off the street and promote city bus and give central location; largest portion of the project is federally funded. Roger Foster, Public Transp., stated project has been on-going for quite some time and speaks directly to a need immediate and in the future for public transportation in Grand Forks, and is part of what our city has asked Congressional delegation for the last 3 years to fund and should look at for the purpose it was intended for. He also noted that there would be a ticket agent there and hope to entice Greyhound to come in and co-locate, giving out information about Grand Forks and East Grand Forks, that location was looked at because it was going to be across street from County Building and directly in area for most of social services areas in the downtown. He stated they budgeted for staff in that building this year, operating cost about $37,000.

Mr. Feland stated that as part of reducing the cost was to go with a bench with a small canopy as waiting point for each of the buses. It was noted that 5 buses could be located there, but with new routing scheme, looking at 3 buses - other locations could be used by Greyhound or with Sr. rider system. Council Member Bakken stated they had quite a few studies on this along with route changes, least expensive location and most convenient - and for people who do ride the bus don’t have to wait outside in the cold; fought hard for federal funds and committed to this project. Mr. Foster stated they have nothing in writing from Greyhound re. relocation. He stated that tickets can be purchased at any one of the Hugo stores, at Columbia Mall, Home of Economy, Super One and from drivers; staff person would be part-timers. Council Member Christensen stated that until see increased ridership and a demand can’t imagine building it. Mr. Foster stated this year they had a 4% increase in ridership over last year, 75% of riders are going to or from work; Mr. Christensen asked for demographics as to where they work and do survey. Mr. Feland stated the would speak with civil engineer and provide detailed analysis for the council.

2.15 Limited source bids for equipment items at the Grand Forks Wastewater Treatment Plant
(GFWWTP), City Project No. 4377.__________________________________________
Council Member Brooks stated recommendation is for limited source bids and asked if time was that critical that couldn’t call for other approved equals. Charles Grotte, public works, stated that it wasn’t as much of a time issue as it was a system issue, there’s hundreds of different manufacturers of this type of equipment; that Mr. Goetz of wastewater department and Mr. Shea, environmental coordinator, have gone to several conferences over several years and looked at displays of this type of equipment, gone to different facilities and looked at equipment in operation and based on their assessment this is the type of equipment we want, and concern is that you can spec. it so get generally that but other manufacturers have slight variation of that and would want to look at that also; these two would do the job that needs to be done. Council Member Brooks suggested if do a limited source, should say they are only ones who will meet the criteria and make the statement upfront.

Mayor Brown called for a 3-minute break; after which committee reconvened.

2.16 Ordinance amendment to merge the Alerus Center with the Grand Forks Convention and
Visitors Bureau.__________________________________________________________
Mr. Warne stated this issue has been under discussion for several months, have been meeting as a task force that involves several council members, reps. of Convention & Visitors Bureau Board and have asked Mr. Swanson to prepare an ordinance which would allow the Bureau to operate as an independent
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organization similar as Event Center Commission is operating under, envision a 10-member board, 7 from the Events Center Commission, a rep. from Engelstad, 1 from Park District and 1 from East Grand Forks; that the transition team continues to meet and will continue to work with Compass Facility Management, and asked for comments on the ordinance before it goes to first reading next week.

Doug Carpenter stated that the discussion is to be to the ordinance tonight but hopes at some point in time there’s opportunity for discussion on the whole concept and idea and details of how it is going to work - that he has concern that 1 member of the 10-member board will be the management company from Engelstad, that it’s a private company while everything else public entities, need to look at details before putting together entity that’s going to do it, doesn’t know if Engelstad will have its own separate marketing or if marketing part of CVB also, and whether putting money into this entity. Council Member Gershman stated those on task force thought it important to have Engelstad Arena on this CVB board because of importance of it in community, that they are talking with them re.those concerns - idea is to market the cities and the events and the properties of this city; that this is still work in progress. There has been a lot of discussion in the community about the competition between Alerus Center and Engelstad Arena, and meetings of those people to work this out.

Mr. Swanson stated this is a draft, did a great deal of research and didn’t find any community that has by ordinance created the type of body you are looking at and encouraged criticism and input, etc. on this draft - they are establishing a new article in Chapter XXIV of the Code dealing with the Greater Grand Forks Convention & Visitors Bureau as an independent body under the City, establish powers and duties, set forth members, offices, meetings, regulations and funds. He stated some of this is removed from what is now existing in the Code dealing with CVB; and are moving the section dealing with hotel/motel tax into Chapter XXII which is a taxation chapter and no changes in the text of that chapter but renumbering. He invited council, mayor, etc. or anyone who has comments or suggestions on improving this to provide them to him.

Council Member Glassheim stated he didn’t see anyone in structure re. gaming, and if gaming will be pursued by the CVB. Council Member Gershman stated everything is discussion - and have been discussing not to do the gaming and if comes under the City question if they could; their recommendation would be not to do it, that they are not really making a lot of money for the amount of energy and time that they’re putting into it; and have talked about spinning it off to another non-profit group that does bring a lot of events to Grand Forks which would be better; and think can solve it that way.

Council Member Glassheim questioned the travel counselor, and how many positions. Mr. Warne stated the travel counselors are individuals that currently work at the CVB building and assist people who might come to town, that they would keep the building either operated by the City or State and continue to have travel counselors located there. He stated their analysis showed that about 26,000 people visit the Visitors Center each year, and appears to be in the best interest of the City to keep it open.

Council Member Glassheim stated another concern is the advisory committee, which seems large, what role will have and how often meet, etc. Council Member Gershman stated at beginning they may meet once a month and help with organization, etc. and can be determined later when they meet, and that while the group does look big and he will make a recommendation at proper time to include rep. of the Grand Forks AFB because they have a number of events that are very important to us.

Council Member Glassheim concerned that people who were chosen to run the Event Center were chosen to run a building/destination and now one of this body’s main jobs will to bring people to all of Grand Forks or to events besides the one they were chosen to represent. Council Member Gershman stated those
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people understand the benefits we can get from pooling our resources and having more money to do the marketing of the entire city as well as the Alerus. It was noted that the CVB would no longer be a membership organization and they have $40,000 in membership fees budgeted for this year (they raised $18,000 last year); Mr. Warne stated he would encourage membership to continue.

2.17 Funding options for disaster relief for India.
Council Member Brooks stated there was no recommendation at this point, will they have one or create our own. Council Member Christensen stated he was listening to a public radio show after the disaster and commentator pointed out that the government of India was not looking for relief or aid from other countries or other entities - that isn’t to say that we who have suffered a disaster don’t want to share because we’ve gone through that and would like to know if put $5,000 up which agency or entity would we be giving it to - International Red Cross, but if that is the stated policy of the Government of India that they aren’t looking for relief from the US then we should be sure we’re doing something that somebody wants - and if the Red Cross is in India doing these things, then maybe Red Cross appropriate agency. Council Member Gershman stated his recommendation would be to use the excess sales tax if decide to go forward with this. (Need to leave the Military Affairs budget free right now - things can break as President Bush is doing a complete review of the military, and if that gets going again those funds would not be enough) Council Member Brooks stated there are disasters going on all the time - world-wide, and if look at $5,000 - could get these requests at every meeting, we are working on something we don’t have a budget for - we refuse to address a budget for things like this, yet they continue to come up. Council Member Glassheim remembered during the flood that individuals and other cities and states as well as some foreign places were sending monies and supplies, etc., we were in newspapers all over the world and this created climate for the assistance that came to us; that many people in India have died and have heard a number of reports and preference would be if find a way to do it to adopt a town or through Red Cross.

2.18 Residential Historic Mitigation for the permanent flood protection project.
Council Member Bjerke asked if this is something we are required to do. Mr. Grotte stated they have come up with an agreement that doesn’t leave us in a situation similar to the NP Bridge, it does leave a few houses on the tax roles by relocating 8 of them, allows us to tear down 2 of them immediately and 1 additional house when we acquire it, which are in the way of Phase I; he stated he placed new draft version of agreement on their desks and highlighted changes. He stated this would cover all the houses, there are other historical things yet to come - St. Anne’s Guest Home, granitoid streets, Campbell House, archeological sites yet to be explored, former wastewater treatment shop on North Mill Road - this does cover all the residential homes between City, Corps and SHIPPO and local Preservation Commission as an interested party. Council Member Bjerke stated we need to have discussion on how to do some of the historical buildings because we spend a lot of money and need to address how much we’re going to spend to save old buildings.

2.19 Presentation of a planning update for the Grand Forks Water System.
Hazel Sletten, superintendent of water treatment plant, made a presentation of the water treatment plant and how operating what they currently have. She stated that the water treatment began in 1897 as result of a water borne disease outbreak (cholera), first treatment plant was just filtration and have much more treatment today, stabilize the water, fluoridate, disinfect and filter and reviewed process of taking water from the river and through the process. She stated they have the three water intakes, water treatment plant, water reclamation facility, pre-treatment and 6 half million gal. overhead storage tanks with the 2 newest being on-line; a 7-million gal. reservoir (storage facility for treated water), 3rd Street tank which is located across from the water treatment plant and to complete the water system have 220 miles of watermain. She reviewed challenges - water quality, controlling infectious organisms, aging and
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deficient infrastructure; flood impacts. She stated millions of dollars were spent to restore the water treatment plant after the flood, enhancements which were part of the flood mitigation, have moved critical components up and better prepared to have water around the building and still manage the treatment plant but have a series of interfacing additions (the 1956, the 1968, 1984, 1995) on that site. She stated she was proud of the treatment they are achieving at the current facility and what she struggles with daily are the system needs, the need for clean safe water when they are measuring contaminants at the part per trillion level. The need to operate efficiently without compromising that clean safe water, need to meet the current and future regulations given the challenge of treating the Red and Red Lake water, need to anticipate those needs that the residential, commercial and industrial users need now and in the future. Need for fire protection is part of their process and need to maintain the aging equipment and keep system operational, there is the do-nothing option and the do-nothing will have a cost - the cost of keeping this intermingling of 1956 and 1997 technology operating cohesively.

Steve Burian, vice president, Advanced Engineering, made presentation of planning efforts and thought process that went into the whole water system plan: historical population of the city; objectives, planning level concepts, opinions of probable costs, implementation plan, and utility cash flow analysis (informa-tion included in binder).

Council Member Bjerke questioned whether site on the western edge of town for potential water treatment plant was owned by the City; the City owns the 40-acre site (one-half mile south and little west of Amtrak Station).

Council Member Christensen stated that the 3 projects that are of some degree of urgency total $27 million for clearwell/pump station and associated transmission pipelines; plus $18 million for raw water intake and transmission lines; and $8.825 for water reclamation facility improvements, interim residuals management plan; totaling $55 million; that it appears that all of this is funded. Mr. Burian stated there are components of it that will either be Drinking Water SRF funded or bonded - the EPA money came with some strings attached, we actually have sufficient Drinking Water SRF loan money from the State Health Department to fund the EPA grant and totally match the project with SRF loan, which is 20-year money at 3%. He stated that when read the fine print of the EPA grant, that because EPA gives the State the Drinking Water SRF money that we couldn’t use the SRF for that match, and the only amount that we’re anticipating that may have to be bonded is on the clearwell pump station and associated trans-mission pipelines project, the local USEPA grant match, (revenue bonds of $8.7 million) is the only amount that have not been approved and sold by the council. Council Member Christensen asked what the source of repayment is on the low interest loans. Mr. Burian stated they have enough SRF money that they can get the parts that are Corps eligible that aren’t paid for by the State (55%) will be SRF money and the repayment mechanism anticipated for that is special assessments; the part that isn’t for match (other SRF loan) would be paid through the water utility rates (revenue bonds would have to be paid through the water utility - $8.7 million and $6 million for the Drinking Water SRF on the clearwell pump station project or total of about $14.7 million; on the other 2 jobs those are either State grants through the levee program or special assessment; and would be $14.7 out of the $55 million. He stated that only the $8.7 would be bonded. Council Member Christensen asked why they would need to raise the rates as high as they are projecting if only have $14.7 million debt to incur for these projects. Mr. Burian stated that Agenda Item 3.1 is another presentation he will be giving to the council. He stated when looking at the anticipated rate increases 2001 was 0, 2002 was 0, 2003 was 6.8 and 2004 was 3.9, 2005 was .8, etc. and in 2010 it was 0, and if they go ahead and approve the 3.1% under Agenda Item 3.1 the prevailing thought process has been because you have anywhere between a 0 and an 18.6, was to go ahead and look at virtual equivalent that got required revenue and required cash reserves turned out to be between 3.1% and 3.7% for the water utility.
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The city auditor stated they are not taking on the 3.1% to fund the $15 million, you are looking at the full projected project cost of the new plant and everything that’s coming in the future (est. $129 million). Council Member Christensen stated he was not in favor of setting in place a 3.1%-3.7% on his water, 7.2% on stormsewer and 7.4% on wastewater when he’s talking $15 million that’s going to have an average interest rate of about 4.5% over 20 years and would like to know what need to raise our rates to cover that over the next 5 years. Mr. Burian stated if you do the math on a consistent rate for the next 5 years it’s 1.65% rather than 3.1% on water. Council Member Christensen asked what rates were on stormsewer and wastewater for same period of time. Mr. Burian stated that the stormwater and wastewater utilities were only 5-year study period, those would be the numbers that have been talked about, the only one that jumped out for 10 years was the water utility and not to show a false positive impression if you were thinking you were going to build the water plant. Council Member Christensen stated he was more concerned about a 5-year period rather than a 30-year period and more concerned that move slower rather than set in motion a $125 to $150 million water treatment facility for a population of 1% increase (60,000 to 62,000 in the 2030). He asked why the assumption of the reserve level created in the water utility fund valid - 50%; what’s going to happen to spend down the reserve, but take $6 million and pay for the $5 million wastewater; will it decrease our bonding capacity - what’s minimum in reserve before it affects our bond rating. Mr. Grotte stated by going on to the next two items , will answer a lot of these questions. Mr. Christensen asked why we have to make this decision now. The city auditor stated one of the key reasons that a decision be made tonight, not all utilities but on wastewater fund, is we are trying to close out on the State Revolving Loan Fund application for the wastewater treatment system and need to show them a revenue stream that will give us 120% to meet the debt coverage requirement and have our revenues be 120% of expenditures, and we cannot do that without the projected wastewater rate increase that we have shown in the study; we are moving ahead with the wastewater treatment plant and have borrowed about $4 million of our own funds using them to cash flow that and would like to close that loan application. Mr. Christensen asked what they would have to vote on to assist you in meeting that deadline, and what is the deadline. The city auditor stated that the deadline for closing this loan was about 2 weeks to a month ago that they would have liked to have pursued this.

2.20 Presentation of the Facility Plan Amendment for the Water Reclamation Facility Improve-
ments Interim Residuals Management Plan.____________________________________
Nate Weisenberger, Advanced Engineering, presented the Facility Plan Amendment; that the plan stemmed from the November, 1996 evaluation that Advanced Engineering completed for the Grand Forks Water Treatment Plant; from this evaluation an $8.8 million project was approved by the City and received with final design. This project was needed to rectify several deficiencies that were identified at the existing water reclamation facility; that during first part of 1997 A/E completed a 20% design and submitted it to the City; then the flood of 1997 hit and City halted any future work on that project in order to re-evaluate the existing water reclamation facility and how it would react to the concept plan and also flood protection. The flood protection project is intended to run through the existing facility, and project evolved from improvements project at existing facility to a complete replacement and interim residuals management plan as it will handle residuals from the water treatment plant during interim period between the flood protection system construction to the time at which the future water treatment plant will be built. He stated during planning period evaluated 3 sets of alternatives - do nothing alternative (direct discharge into the river for which the City does have a permit from the State, but not under normal operating conditions - penalty by EPA of $25,000/day); significant renovation to the existing facility but that facility is scheduled for demolition with construction of the flood protection levee; the set of alternatives feasible included the construction of gravity lines and forcemain in the vicinity of water treatment plant to be used in conjunction with the renovation of the 500,000 gal. recycle basin after it is converted into a pump station, which will pump residuals through a forcemain that will be constructed in three phases (2 with the transmission lines and third phase from the future water treatment facility site) to the aeration
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ponds near the wastewater treatment ponds. He stated that another phase of the project consists of the renovation of these ponds for residual storage - liquid portion pumped from ponds to the wastewater stabilization ponds and solid residuals settle out in the aeration ponds which will be hauled to the landfill as cover material or used at wastewater treatment plant pending further review by KBM and the City. He stated that the project is eligible for Corps match of $9.9 million, 45% of which will be funded by the State of North Dakota, 55% from the Clean Water SRF loan money and administered by the ND Department of Health. The total cost of the project including fees and contingencies is estimated at $8.8 million, which is $1 million lower than the amount that is eligible under Corps match. This project since it uses renovation of the ponds and gravity settling, City could stand to save some operating costs over the course of the interim planning period, project tentatively scheduled for construction in 2001 and 2002, completion required prior to 2003 and 2004 with the construction of the levee and flood protection system in the vicinity of the water treatment plant. He stated when this issue is voted upon and if approved, will approve the facility plan amendment and will approve submittal of amendment to the ND Department of Health for the securement of the Clean Water SRF.

Council Member Bjerke stated in the report it states that portions of the plant may be reusable if new water plant is built; Mr. Weisenberger stated it depends on future planning but since installed underneath the dual transmission lines, it could be used as backup raw water line or could be used for additional capacity for raw water conveyance; aeration ponds could be continued for use with expansion to give greater storage capacity.

Mr. Burian stated that the secondary aeration ponds are already there and the new Grand Forks wastewater treatment plant is planning that although putting in a state of the art actuated sludge type treatment process you are using the lagoons to discharge the good flow from the wastewater plant to lagoons and then to the river as safety net and secondary process, and to the degree those lagoons are continued to be used for the wastewater plant, they should be continued to be useable for our ponds to store things - and because not make a rapid decision on the water plant it seems to be in good parallel with wastewater treatment plant plan. Council Member Burke asked if there were some other options that might want to consider before making this commitment. Mr. Burian stated the reason they are using the infrastructures that they are is that they did consult with Steve Johnson, Airport, and because existing infrastructure has been somewhat grandfathered in over the years, this was the preferable choice and as looked at long term plans for the water system it seemed like that might be the appropriate time to look at long term plans for residuals management and landfill and the airport. Mr. Grotte stated they are looking at reducing the size of the lagoon, that cell here is on the east edge of the lagoon system and farthest away from the airport, and Mr. Shea has been consulting with the ND Health Department about using some of our lagoon cells on the west side for inert landfill which might be compatible.

CITY COUNCIL SPECIAL ACTION ITEMS

MAYOR EXCUSED STAFF NOT INVOLVED WITH THE ISSUE

3.1 Utility Annual Cash Flow Analysis.
Mr. Burian, Advanced Engineering, made presentation on Utility Annual Cash Flow Analysis (made to CIP Committee on January 22, 2001), including projected expenses, projected non-rate revenues, projected rate revenues and projected cash surplus (included in binder).

Council Member Kreun stated that the critical issues are the lime sludge plant, raw water intake and the clearwell with the transmission lines. Mr. Burian stated for the water utility and wastewater utility to
finish the plant and look at new residuals management facility, and other issue on stormwater another
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phase in southend is the bigger project there. He stated that Mr. Feland wanted him to stress that his understanding of what you are approving tonight is not 10 years of numbers nor 5 years of numbers; the action that was taken at the CIP committee was to approve the cash driven study rate adjustment methodology and also recommended that this be analyzed every year by the City and his understanding that would be approving a steady rate and also approving the concept in terms of the numbers for your 2002 budget, but as look at outlying years that would be something you would look at on an annual basis. He stated that the water utility was spread out so far it may imply that building towards something grand in the future but actual motion does not bind you to any of those things.

Council Member Brooks stated recommended action is to accept the utility annual cash flow analysis, which include rate increases, percentage ones for the next 5 or 10 years, won’t vote for anything that has prices in it.

The city auditor stated that he believes what they are voting on is to accept a methodology and the actual cash flow analysis, not approving rates because rates have to be approved by ordinance and are done annually.

Mr. Feland stated our goal was to show conceptually what they have in the CIP right now and what those rates would be, first of all wanted to know what rate plan they wanted, and the motion is a steady rate cash flow model; the next thing they would come forward with is how much cash do they want to use on a given year and what would they want to use for cash balance, zero or 50% or in between - it’s important that it’s a planning tool and when go through budget process and every CIP item that’s in the 2002 budget, suspects they will have decision making on every single item and go through each item and if do this what’s going to be the rate, that in order to go forward need a plan and no one is saying we’re going to have a 7.2% in the stormwater, that’s what projected today, but tomorrow based upon what get for special assessment revenue, what happens out there - we’re just accepting the plan that we have going forward using a certain model, but not saying work on a rehab of a lift station in 2003 that we’re going to do, and as go through process of analyzing all those, they’re going to change and come back with different numbers, but have to have planning tool to respond to citizens.

Council Member Gershman stated some of the concern is that if we approve the rate increase is that the press is going to report that we’ve got these fixed increases because we set them in numbers, can approve the concept but that’s not how going to be reported and concerned about the cost of living and price of entry into our city and price of staying here, and that if people who are going to use the new water plant should probably pay for it at the time that we decide to do it, if start to build a balance and if have 20% of the population turns every year in Grand Forks that means in 5 years from now all those people have paid for something not benefit from; need to keep the price of entry and price of retention very reasonable in Grand Forks.

Council Member Hamerlik stated we need to have a motion so know what voting on, can have material in front of us but until the motion is made, can’t decide which way to vote, let’s have motion before decide discussing what we’re voting on.

Council Member Burke if we’re going to vote on this later on tonight based on what’s in front of us, will not vote in favor of it, but with regard to the steady rate increases vs. the variable ones, esp. with regard to the water utility, it seems we’re putting money in the bank for it as opposed to paying for it when we actually need it, inclined to pay for it when it’s needed, and support the variable rate.

CONVENE AS CITY COUNCIL
COMMITTEE OF THE WHOLE - PAGE 13

RE-CONVENE AS COMMITTEE OF THE WHOLE

MAYOR AND COUNCIL MEMBER COMMENTS

Mayor Brown asked for comments from the council members:

1) Council Member Hamerlik stated that he was very much in favor of the committee of the whole, on the average spent 5 hours for committee and had some time to concentrate between each one of them.

Mayor Brown stated that in regard to Council Members Brooks and Bjerke’s request to name a task force to discuss the Richard’s West Aspen Park, that has been done and the council will get that memo.

Mayor Brown stated that he would like to start the committee of the whole meeting at 5:30 p.m., put out for thought.

ADJOURN

It was moved by Council Member Lunak and seconded by Council Member Brooks to adjourn. Carried 12 votes affirmative.

Respectfully submitted,

John M. Schmisek
City Auditor