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PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
Thursday, November 2, 1995

The city council of the city of Grand Forks, North Dakota met in special session in the council chambers in the City Hall on Thursday, November 2, 1995 at approximately 7:15 p.m. with Mayor Polovitz presiding, pursuant to call by Mayor Polovitz, which was served on all members on October 24, 1995: Document No. 6636 - Notice.

Present at roll call were Council Members Beach, McCabe, Hamerlik, Hanson, Glassheim, Carpenter, Sande, Klave, Beyer, Babinchak, Johnson, Hagness - 12; absent: Council Members Hoeppner, Geller - 2.

Mayor Polovitz announced that anyone wishing to speak to the matter before the council may do so by being recognized prior to a vote being taken on the issue.

ADOPT RESOLUTION RELATING TO PROPOSED
CIVIC CENTER

Council Member Carpenter, chairman of the process committee, presented and read resolution from the committee giving more specific information relative to estimated cost and financing of the facility, its location, size and usage, and administration.

There was some discussion relative to statement in the resolution that "..it is the intent of the current city council that no costs for the installation of the infrastructure necessitated by the construction of the facility will be assessed to those residential properties platted and within the city limits, including Johnson's Addition and Birkholz' Addition...", and assessment of those residential properties not yet annexed. Howard Swanson, city attorney, stated that his preference would be that they not address special assessments in any regard; and that resolution not particularly binding on any future council.

There was some discussion re. financing of the facility through bond issue or lease/purchase; that primary benefit of a form of lease/purchase is that you don't have coverage requirements that you do with a bond issue; that normal bond issue would require 1 1/2 coverage on revenue; that another benefit is monthly payments vs. normal bonding which is semi-annual interest payments and fixed principal payments over the term of the issue, that by lowering principal sooner you pay less interest in the long run. Mr. Swanson noted that there are certain costs you would not incur in a lease/purchase, including cost for bond counsel, financial advisor/counsel, publication costs, cost for Moody's rating, costs for bond registration and bond escrow, but will reach point where difference will become negligible; the shorter the time period the more savings in a lease/purchase.

It was moved by Council Member Sande and seconded by Council Member Hamerlik to amend subparagraph 1) of the resolution to insert the word "currently" in the fifth line between the words "property" and "platted". Carried 12 votes affirmative.

There was discussion relative to financing of the facility from the new sales tax if approved, that the new 3/4 percent sales tax will sunset when the facility is paid for in approx. 23 to 28 years. James Tibbets, 214 Fenton Avenue, questioned why people benefitting most, not paying most, motel/hotels; that he is for an events center but against this package. The city auditor stated that the general retail tax will increase 3/4% percent but that also applies to lodging, and they will pay the full 1%. It was noted that there is 14257
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now a 9% tax on lodging (5% State, 1% City, 2% CVB and additional 1% for visitor center), and when add the increased 1%, lodging will be taxed at 10%, the highest in North Dakota, and from regional standpoint need to try to stay competitive. Mr. Tibbets stated that land for civic center would become non-taxable property. Council Member McCabe stated that event center would create commercial property development. Council Member Hanson questioned whether the hospitality tax should be mentioned in the resolution; Mr. Swanson stated he didn't know council's intent in passing this resolution, as they have already passed Home Rule Charter amendment; thinks that this is intended to provide some explanatory information, and should not be confused with resolution amending or having any effect on the Home Rule Charter. During discussion it was noted that the 1/4% percent sales tax is not intended to terminate but to provide operating revenues for the facility, and that the 3/4% percent increase has a sunset clause.

It was moved by Council Member Hanson and seconded by Council Member McCabe to include provision that the 1/4% gross sales receipts tax upon the sale of prepared food, beverages, on-sale alcoholic beverages, and leasing or renting of hotel, motel, bed and breakfast, and tourist court accommodations be used to provide operating revenues for the facility. Carried 12 votes affirmative. (This will become subparagraph 3) with subsequent subparagraphs renumbered.)

There was discussion relative to the governing of the facility and representa-tion on the commission, and that council should have representation on that commission. After some discussion it was moved by Council Member Beyer and seconded by Council Member Johnson that representation on the commission be as follows: 4 representatives from public at large, 1 city council member, 1 representative from the hotel/restaurant/on-sale liquor industry; and 1 representative from the University of North Dakota.

Council Member Hanson asked whether this can be restructured at later time, Mr. Swanson stated that the resolution would be superseded by ordinance. Council Member Hanson moved that the language in subparagraph 5) be such that the mayor and council reserve right to restructure representation as necessary; there was no second to the amendment and Council Member Hanson withdrew his motion.

Rick Williams, 1613 Rider Road, stated he has never seen government remove itself from a position of power.

Upon call for the question on the amendment, and upon voice vote, the motion carried 11 votes affirmative; Council McCabe voted no.

It was moved by Council Member Hamerlik and seconded by Council Member Beach that we adopt the resolution as amended - Document No. 6637 - Resolution. Carried 12 votes affirmative.

ADJOURN

It was moved by Council Member Beach and seconded by Council Member Hagness that we do now adjourn. Carried 12 votes affirmative.

Respectfully submitted,



John M. Schmisek, City Auditor

Approved:
Michael Polovitz, Mayor