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MINUTES/COMMITTEE OF THE WHOLE
Monday, April 14, 2003 - 7:00 p.m._________

The city council met as the Committee of the Whole on Monday, April 14, 2003 in the council chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members
Brooks, Hamerlik, Gershman, Christensen, Kerian, Kreun - 6; absent: Council Member Glassheim - 1.

Mayor Brown announced that when addressing the committee to please come forward to use the microphone to give your name and address for the record, and advised that the meeting is being televised live and taped for later broadcast.

COMMITTEE DISCUSSION ITEMS

2.1 2002 Consolidated Annual Performance Evaluation Report (Close comment period and hold public hearing on April 21)________________________________________

There were no comments.

2.2 Substandard commercial building on Lot B, Block 1, Landowski's Subdivision on Mill Road._____________________________________________________________

There were no comments.

2.3 Plans and specifications for Project No. 5446, Dist. 91, mill and overlay 1800 and 1900 blocks of Cottonwood Street.________________________________________

There were no comments.

2.4 Plans and specifications for Project No. 5444, Dist. 415, sanitary sewer to serve 2700 and 2800 blocks of 36th Avenue South.______________________________________

There were no comments.

2.5 Request for funding of sanitary sewer along 47th Avenue S.
Council Member Christensen stated that if the council were to approve this request it would be a shift in policy, that he thinks it is a good idea and will spur the development of the project but not sure this is time to implement it, that they haven't established any criteria as to how they would go about beginning a shift in policy - that if there is some way that they were to come up with a policy and maybe can apply it retroactively - and if have a policy they can apply even-handedly as time moves on and do it retroactively - that he is not against concept but it's the source of funding and how we apply it in the future. He stated that in the waterworks fund have approx. $8.9 million and should think about this more before doing it this time.

Council Member Gershman stated that he and Council Member Kreun are co-chairing a committee on Affordable/Entry Level Housing and had meetings with developers, policy makers, bankers, appraisers, real estate agents and as had ordinances in place enthusiasm got ahead and the projects are moving through Planning & Zoning - got ahead of our policy making and that we would be setting policy and is concerned because we don't have a policy and may want to develop something that says that if a developer is going to do homes in the $110,000 range, they would get 100% of x dollars, and if do $125,000 home would get 50% of x dollars, etc. and could spur that entry level housing but need to be very careful as done some things in the past that have set precedence and don't have the policy in place, and have some time to consider this week how we do this - that they are very excited about the projects that Mr. Crary and Mr. Adams are planning and the Housing Authority, but have to catch up to them.
Council Member Hamerlik noted this was on the agenda last Wednesday at the CIP meeting, but meeting was cancelled.

Council Member Brooks stated this is a change and a new policy, that maybe we could refer the issue of developing that new policy to one of our standby committees, is a finance issue and would request that we refer this to finance committee for the development of that policy. Council Member Christensen stated that was fine but would invite Council Member Brooks' help or anybody else from the public safety/service committee to help with this policy because should get something in place this summer and if introduce something now as part of this resolution and finalize it, then it would be retroactive as of this time and ask the city attorney for more help on that.

Council Member Kreun stated this is more or less a pilot program to help determine what the policy should be as we work through it, sometimes easier to develop the policy as actually using an existing project rather than theorizing it, and if put it to one of our two committees, can utilize that knowledge and still go ahead with the development, that we don't want to stifle the enthusiasm that we have at this point in time, and come back and put that into play as it becomes appropriate for the timing to spend the money and make the development happen and would concur that they can do that.

Al Grasser, city engineer, stated that this item and an outline of a potential policy are in the CIP booklet and might be considering at CIP and also at one of the standby committees, but on CIP did have this specific line and had some material about some potential policy shifts on funding some infrastructure, and may have an opportunity to talk about that the CIP also, and will probably be this Wednesday.

2.6 Utility Relocation Agreement for Project 5217, 32nd Avenue South and Columbia Road reconstruction.____________________________________________________

There were no comments.

2.7 Columbia Road reconstruction project R/W acquisitions.

There were no comments.

2.8 Ordinance establishing the imposition of infrastructure connection areas and fees.
Council Member Christensen stated this is good start, and hoping could get something in
the ordinance so that if had a tapping district and as a part of the platting process it would be
noted on the plat that it was subject to a tapping fee and would be individual tapping fees
attributed to each lot and want to make sure that the public or people that buy in those areas are
aware of record that there is a fee on top of what paying for the lot; unless the developer
discloses, do it this way or in our ordinances where it says ...in our platting ordinance it says any
time we have one of these situations as part of the sale of a lot there is disclosure that there will
be tapping fees and should be included.

Howard Swanson, city attorney, stated it was the intent, and have drafted an actual notice that
will be recorded by the City of the connection fees, and it is his opinion that it would not be
appropriate to do it at the time of the platting because conceptually you will not have created that
district because you won't know the legal description, so once a plat is approved the council
would then act or even delegate to administration to act to identify the designated area or district
and the notice would be recorded. There is record that would appear either in an abstract or in a
title opinion or title insurance policy..

Council Member Kerian stated that at the time that infrastructure is put in the people in that area
would be notified and they would then decide whether or not it is annexed to the city and they
could then decide and this wouldn't sit for years and is suddenly surprised that all of this interest
has been accumulated. Mr. Swanson stated it is how tentative you are as a future developer or a
potential developer, you may or may not know about it, you may be aware that there was utility
work a distance from your property line or close distance to your property line but if you haven't
taken any steps to be annexed or to develop it and if you haven't had abstract updated or haven't
received a title insurance policy or haven't reviewed the records, you may not be aware of it until
you take some of those steps. In the course of platting one of the things that is required is either a
title insurance policy be on file or an attorney's title opinion, in that case if the district has been
created and encompasses part of your property then it should show up at that point in time; it may
not if those utilities haven't been extended as far as your development. Council Member Kerian
stated she would be interested in any ideas that might be able to deal with that problem as that
isn't something they would want to spring on someone if could avoid it. Mr. Swanson stated he
didn't know how you could avoid it for the inattentive landowner, you also have the same
situation for landowner that sells it at second or third time, a future potential owner, if they are
doing due diligence they will be made aware of it by the recording that Mr. Christensen
suggested, and if not doing due diligence and not paying attention, it may come as a surprise to
them but they will have more notice under this ordinance than under any proceeding that we have
presently.

Council Member Kerian asked if this was a new ordinance; Mr. Swanson stated it doesn't replace
an ordinance and is a new ordinance and a new policy, but not a new concept, the City has used
tapping fees or future assessment districts, this is related to both of those, and it was written
policy and by having this on the books it will be more assessable to the general public to be aware
of it as well.

Council Member Kreun asked if this was consistent with the other methods that were used to
notify potential owners of property. Mr. Swanson stated no, and what he is describing appears on
the plat and the reason they can do that is because that is the point in time where you are
establishing a development that is on the riverside of a potential levee, that notice says that the
area may not be served by a levee or may not be served by utilities, etc. In most cases that's
premature for the development of a district for this type of a fee but if you are purchasing that
property as a new purchaser you should be getting either an attorney's opinion from an abstract or
a title insurance policy, and in one of those two reports it should identify both of those pieces of
information, regardless of whether it appears in the plat or appears as a subsequently recorded
document and is indexed to that particular legal description.

Council Member Christensen stated a method of placing the landowner on notice would be
similar to what we do when we have proposed platting or replatting where we send notices to
people within certain distance of feet of the project, and if we are going to do a special district,
we could as part of this policy, send notice of the district to the people affected because we're
going to create it, engineer will give metes and bounds, and title work could be done. He stated
that once we create that district and have the description of the land, we could file that with the
Register of Deeds Office and once we have a plat created within that district, that will show up in
the plat and perhaps should add to this ordinance a written notice to the affected landowners prior
to the hearing so they have a knowledge that it is happening, they wouldn't be in a position to
protest it out but would know we are doing it. Mr. Swanson stated that council should be aware
that depending upon the extent of the infrastructure being installed, the area that it potentially will
serve may exceed even the platted limits, maybe into some metes and bounds description or in
some instances, may describe it by some other landmarks, such as street right of way, and only
concern he would have on recording the document in advance of council taking action, would
have to be after - and as far as public notices concern it is more important to have an accurately
drawn map than a paragraph of legal description if unchartered territory. He stated that actually
appears on page 59 of packet (section 3 Notice prior to establishment of the district) and some of
the numbering may have to be redone.

Council Member Kerian addressed the depreciation issue, and what was the purpose of the
depreciation before, only to assess the costs over time or did it have anything to do with the
depreciation that the City needs to keep track of their assets. Mr. Swanson stated the original
premise for the City to identify depreciation schedule is embodied in some of the State law with
regard to the extension of special assessments to property that was not within the city limits at the
time the project was originally assessed, the statute originally back to mid-1980's had a fairly
complicated description of how you went about determining that, that was amended to simply
allow the City to identify and select its own method of depreciation, the theory behind it was that
property owners should get the benefit and pay for the benefit of an infrastructure improvement
but not pay 100% for the improvement if it is 75% wore out.- they were trying to reflect what
usage had occurred prior to your development or your use of that or actual benefit and
somehow tie what you paid for what's left of that particular project. It is not required or not the
same depreciation that the accounting standards have required for the City to utilize in other
purposes

Council Member Kerian asked if there is depreciation that applies or does that schedule need to
be changed, the depreciation schedule that they used for those costs is different than what would
be used now and asked if they need to address that. Mr. Swanson stated the reason that it is there
is because discussion came up as to whether or not it was council's intent to depreciate the life of
the infrastructure while these fees are being collected and because there hadn't been any guidance
in prior discussions, they simply produced that to you and identified in the committee report that
if council wishes to include a depreciation component, here are examples of depreciation
schedules for different types of improvements, those schedules have been used previously with
respect to the State Statutes that he referred to earlier. Council Member Kerian asked if they need
to take action to include the revised schedules; Mr. Swanson stated if they are of the opinion to
include depreciation as a component of this fee, they would need to do some drafting to include
language for depreciation in this ordinance, and engineering report identifies is if you wanted to
keep this moving forward, which council has an interest in, you could give first reading or
preliminary reading next Monday to the draft before you, and in the meantime develop the
amendments that would be necessary to incorporate it for second reading, and that is a policy
decision for this body to address. Council Member Kerian asked if the costs will vary over time
and when infrastructure is put in, that is the cost, period and has to be paid against it and when the
initial cost stays with the property the entire time; Mr. Swanson stated she was not incorporating
on-going interest or opportunity costs as money that the City is spending, that what will happen is
that the City will have a carrying cost, the City will be advancing some or all of the funds
depending upon the improvement and the location improvement, and by including the interest
you are attempting for the City to recoup that opportunity cost.

Mr. Grasser that to refer to the current depreciation schedules we have, and there is a depreciation
schedule currently (paving) and it is zero for 5 years and depreciates down to zero at 25 and there
was some discussion previously about if that depreciation too quick, and some of this was
developed earlier when there were other guidelines they had to meet, his recollection is that they
wanted to come up a new depreciation schedule to recognize that the asset will deteriorate and
need to be replaced and yet wanted that depreciation to be less aggressive, and that on page 66
and 67 the dash lines maintains a zero schedule longer and depreciates it and doesn't depreciate it
down to zero, recognize that there's some value left basically indefinitely, and that is a policy
issue for the city council, that he would recommend that they acknowledge some level of
depreciation that goes with that asset, and wouldn't want to be in situation where paving has
actually been replaced and this tapping fee maybe sits out there for 25 or 30 years and original
one is replaced and new one is there and yet the costs are still being carried on the books of the
first one. He stated he thinks they want to look at the depreciation schedule and the dash line or
modify it.

Council Member Kerian stated she thought there was agreement to follow his advice based on
the longer lasting infrastructure that we have and if that is his recommendation, maybe that's the
action that should take place.

Council Member Christensen stated the depreciation schedule that Mr. Grasser developed has to
do with the changes in the construction materials (pavement and sewer and water - most of
sewer and water is plastic pipe and doesn't wear out), and that's why took it out from 5 years to 30
years, that if for example were to run something past person's land in the southend that isn't in
yet and assess tapping fees - they would have 15 years accruing interest on money City spent on
the pavement and accruing interest on the money City spent on the underground for 30 years, that
might get their attention and in these lower interest rate days probably not as much but it's going
to add to their potential costs of development but to lessen it to some degree, start dropping it off
so that the cost of the lots aren't that high because depreciation is a component that we subtract
some of it because it is worn out and nothing in this ordinance dealing with depreciation and there
should be; and that he likes the schedule Mr. Grasser developed and not sure shouldn't adopt a
depreciation component when we do a tapping fee based upon the recommendation of the
engineering department at that time because materials might even get better and don't want to
have adherence to this schedule because that requires amendment to the ordinance.

Mr. Grasser stated they can address the depreciation schedule and there needs to be something in
the ordinance, the question whether it's simply a reference to a depreciation schedule that then
comes in at the time that they create the district or whether actually detail out the depreciation
schedule within the ordinance, his preference as an engineer would be that they not be as specific
in the ordinance but do it more at the time they create the original tapping fee but defer to legal
authorities. Council Member Christensen stated as a member of the body be more inclined to go
with that also because times change and rather than being stuck with this schedule and rather
have a recommendation from an engineering department telling them what to do.

2.9 Memorandum of Agreement to become cooperating agency.

There were no comments.

2.10 Matter of defining water service area boundaries.

There were no comments.

2.11 Purchase and exchange of real estate for the Grand Forks County Historical Society/Myra Museum.______________________________________________

There were no comments.

2.12 Bids for street department tandem trucks, truck boxes and hoists.
Council Member Hamerlik questioned why only one bid; Todd Feland stated that 5 bids were received but only listed the low bidder but included in the attachments are bids of all bidders; and 2 bids received on truck boxes and hoist.

2.13 Public Transportation budget amendment.
There were no comments.

2.14 Affordable in-fill housing development request for proposals.
Council Member Hamerlik asked if there was anything in the contract re. completion date, as have had some homes not finished. Keith Lund, Urban Development, stated that the developer's agreement for each developer will indicate that the project needs to be completed by the end of the year, and if go through a subsequent phase of requests for proposals and start later will make necessary adjustments.

2.15 RFP for historic home relocations.
There were no comments.

2.16 2003 Beautification applications.
Mr. Lund stated there was discussion of project with Mr. Hamerlik over the past several years re. obelisk or monuments throughout town potentially marking the level of the floodwater and again this year that project was omitted from the project list, that next week they would like to make a recommendation to amend our staff recommendations to deobligate $500.00 from project (tree relocation) and allocate that to plans and specifications for such a project to bring that forward next year.

Laura Munski, 2111 4th Avenue North, stated that they are coordinating an outdoor classroom project and that is part of the beautification funds, and provided an overview and answer any questions they may have. The Grand Forks Horticultural Society has partnered with the Dakota Science Center to provide this classroom, the educational garden will be located on the southside of the Dakota Science Center, and will be constructed in the outline of a butterfly in flight and integrated with sculptures to be an attraction for the downtown and brought displays of the landscaping design and photographs of the sculptures that have been completed. The greenway is a destination landscape that will attract tourism and provide a resource for environmental education; the community green is near the Sorlie Bridge where people will come up off the greenway to visit our downtown and the garden will be located for environmental education at this classroom, adults working with the youth will be able to use the garden as an outdoor classroom with teach modules that will be provided by the Dakota Science Center. Steve Silverman has agreed to take the photographs for their brochure and an internet link from the Dakota Science Center web page and the Grand Forks City web page will provide the brochure on line to people who want to visit downtown. The garden will also be a part of the Cornell lab of ornithology, project bird feeder watch so the youth will be able to participate in the research; with the help of local businesses hope to build the garden in May.

2.17 Amendments to 2003 Community Development Block Grant Program.

Council Member Brooks stated the deobligation was an economic development project,

and if consideration for keeping the funds in same vein but switched over to another type of project vs. economic development. Mr. Lund stated the deobligation as they suggested would remove it from an economic development project, one of their concerns is one of the priorities of the Department of Housing & Urban Development is the timeliness of the expenditure of funds, staff is concerned with having a project that may not happen and reserving such a large dollar amount and could run into some trouble at the end of the year if had half million dollars that wasn't going anywhere - not aware of any economic development projects that CDBG funds would be appropriate for, and CDBG funds for economic development need to have a low/moderate income benefit. Council Member Christensen stated CDBG funds are available for fire engines and the Chief is looking for something in his department and commended them for their aggressiveness in making their recommendation, did have a committee and reviewed some of the requests and put forward some of their ideas, and that interesting to see staff's innovation when did the $400,000 for an economic development project and before they deobligate this for these items, would like to have a meeting with the group that obligated these funds and rethink that - and would be entertaining moving this back to the granting committee on Monday so they have an opportunity to rethink these and review recommendations. He asked what would happen if we had a carryover of $400,000.

Mr. Lund stated the City has one and one-half times its annual allocation of entitlement dollars,
this year $522,000 and federal government or HUD can actually take the difference between $1.5
million and what we have on expense and take it back to the Treasury and we would essentially
lose those dollars. Council Member Christensen stated that the Urban Development Office also
knows that a lot of our CDBG money is recycled money from monies received as a result of the
flood, and if that were a concern we could explain to them that we're still trying to find some
good projects, would like to think about this for a couple weeks before we spend the $400,000 or
$500,000.

Mr. Lund stated that one of the projects that if it pleases the council that he would like to see is
the allocation of $50,000 for public service projects, when they allocate public service dollars,
they are forced as they start this project in July to estimate their program income until the end of
the year, can allocate 15% of this year's entitlement dollars as well as 50% of last year's program
income dollars, they estimated low and are able now to allocate an additional $50,000 to public
service projects and that would be the first of their recommendations.

Council Member Kerian stated that next Monday they could make an amendment to this for public hearing for item 2 and take it back to the committee.

Council Member Brooks stated he would like to look at that and allocating the $50,000 to the public service; Mr. Lund stated they would need direction from the council and then advertise that portion for a 30-day public comment period and come back.

2.18 Grand Forks Renaissance Zone Project GF-5.

Council Member Gershman asked if there was a report on how they are doing with the

Renaissance Zone. Dennis Potter, city planner, stated this is 5th project in the renaissance zone and will generate a more comprehensive report for the council. Council Member Christensen stated that the Legislature amended the renaissance act which will be effective August 1, and also that don't have to have contiguous blocks any longer, and there are some areas in town that they perhaps could leap frog their renaissance zone, and asked that Mr. Potter look into that and explain how we could leap frog and move our renaissance zone in areas of town that could use some help.

2.19 Request from CPS, Ltd. on behalf of Dakota Sales Company, Inc. for final approval of the Plat of Kieffer's Resubdivision (loc. in 1900 block of DeMers Avenue)._______

Council Member Kreun stated in Planning & Zoning's recommendation there was a

requirement that he didn't know if we could meet or not in behalf of Dakota Sales - the request to have a hold harmless agreement until they were able to record their deed and plat and get it back from the Railroad. Mr. Swanson stated he wasn't familiar with the request and who were they intending to hold harmless and why. Council Member Kreun stated that one of the P & Z members felt that there could be some glitch in the construction before they authorized the building permit and that they wanted to hold the City harmless if there was a problem in recording the deed and plat, and that the Planning Department has been unable to find something that would reflect that protection, if that could be done or to leave that part out of recommenda-tion. Mr. Swanson stated he would need to have more information, but that this is approval of a plat, and the property owner is going to have to sign the plat before it can be effective. Council Member Kreun stated it has been signed but they are waiting for it to come back from the Railroad and that takes considerable amount of time and want to get the building permit prior to that happening and have that signed before getting a building permit. Mr. Swanson stated the concern is the issuance of the building permit in advance of a plat being recorded; and he will discuss that further with staff. Council Member Kreun stated that is in the recommendation and if can eliminate the hold harmless agreement would do that on Monday.

2.20 Request from Cyprus Builders on behalf of Deacon's Development, LLP for final approval of the Plat of Fountain Vista Park Resubdivision (being a Replat of Lot 20, Block B of the Replat of Lot 7, Block 1, Kannowski's 1st Addition )(located in 5800 block of Pinehurst Drive)._________________________________________________

There were no comments.

2.21 Request from CPS, Ltd. on behalf of Grand Forks Park District for final approval (fast track) of Replat of Lot 2, Block 1, Flaat-Mikkelson Addition (located in 3900 block of S.11th Street).__________________________________________________
Council Member Brooks stated this is a dedicated plat for Park District and if that is part
of the 8% dedication and if so how can they sell it. Mr. Potter stated that the Park District will be able to sell the property, take the money from that sale and use that to acquire additional park property in another area. Council Member Christensen stated that apparently this land was dedicated as a park when this land was platted and when dedicated as a park, not sure who owns it but it seems there is public interest involved here and doesn't know when dedicated for park purposes that it is the Park Districts were we to allow this platting so they could sell it, and is a question we should get resolved.

Mr. Swanson stated with regard to the park property, there is a specific statute in Section 40.49.23 that specifically grants the right for a Park District to convey property previously acquired by the Park District or the municipality for park or recreational purposes free from any restriction as to their intended use for park or recreational purposes. Council Member Christensen stated that when land has been dedicated to the Park District on these plats they are supposed to maintain it; that in the '70's when the Park District got some dedication (some pocket parks around in the southwest, behind Hugo's) and not sure the Park District has been maintaining those, but taking position that they are too costly to maintain and want the adjacent landowners to maintain it, curious about that.

2.22 Request from Advanced Engineering and Environmental Services, Inc. on behalf of Clifford and Marilyn Coss for final approval (fast track) of a Replat of Lots 1 and 2, Block 1, Aurora Plaza Addition (loc. at 2463 S. 42nd St.)_______________________

There were no comments.

2.23 Petition from Clifford Coss for ordinance to annex all those lands to be known as Lot A, Block 1, Aurora Plaza Addition, being a replat of Lots 1 and 2, Block 1, Aurora Plaza Addition, except parts previously annexed (loc. at 2463 S. 42nd St.)

There were no comments.

2.24 Request from EAPC Architects Engineers on behalf of Clifford and Marilyn Coss for preliminary approval of an ordinance to amend zoning map to exclude from the A-1 (Limited Development) District and to include within the Valley Memorial Homes PUD (Planned Unit Development) Concept Development Plan, Amendment No. 1, all of Birkholz's 6th Addition and Lot A of Replat of Lots 1 and 2, Block 1, Aurora Plaza Addition.__________________________________________________

There were no comments.

2.25 Request from CPS, Ltd. on behalf of Crary Development, Inc. for final approval (fast track) of a Replat of Lot 3, Block 1, Johnson's 4th Addition (loc. at 17th Ave.S. and S. 42nd St.)__________________________________________________________

There were no comments.

2.26 Petition from Tim Crary for ordinance to annex part of Johnson's 4th Addition (loc. at 17th Ave.S. and S. 42nd St.)______________________________________________

Council Member Kerian stated this is the first reading of ordinance of annexation, picture

of parcel in the staff report and is located along South 42nd Street and 17th Avenue and parcel is without transportation access, and access would need to go through some lots that would not be annexed in this plan, that she voted against this in Planning & Zoning because she was concerned about how that would come into the city and would like information.

2.27 Request from Advanced Engineering and Environmental Services, Inc. on behalf of City of Grand Forks for final approval (fast track) of the Replat of Lots 42 and 43, Block 4 and Lots 1, 2, 28, 29, E and F, Block 14, Riverside Park Addition and adj. vacated rights of way thereto (loc. at 1628 and 1714 Lewis Blvd.)_________________

There were no comments.

2.28 Request from Steven L. Adams on behalf of Arthur Greenberg for preliminary approval of Plat of Columbia Park 29th Resubdivision (loc. north of 40th Ave.S. and west of S. 20th St.) and designate plat as an Affordable Housing District. _________
Council Member Kerian asked the Affordable Housing Committee if they have the policies in place in re. to this or are we okay with the preliminary approval if we did pass and the concept that we want to move this ahead, that this is to set public hearing, etc. but are there other activities that need to occur in regards to this, would like to see something that allows us to know which portions of the recommendation a developer might be taking advantage of and which they wouldn't. Council Member Gershman stated they are working off of the 1997 ordinance that allows smaller lots, etc. and what has happened is that the developers are picking and choosing what they want. Mr. Greenberg and Mr. Adams could go to 60 ft. lot but are going to a 65 ft. frontage because they want to have the ability to put on a double garage if the homeowner wants that, that they could give a list of what developer doing, Mr. Grasser worked very closely with Mr. Adams on this and changed road system and came up with more lots, and is a cooperative effort and likes what is going on because it is fluid and thinks that part of the problem in Grand Forks is that we are very compartmentalized and thinks this flexibility and give and take has been very positive and the fact that have over 200 homes that are coming on as project is indication of possibly change in way we're doing things and working closely with our department heads and developers, council and mayor.

Council Member Kreun stated this is a work in progress and as the first time it goes through and as we utilize it, would be able to define some of these areas a little more closely, and this gives us flexibility to adapt a specific area to become a designated district, and will be able to come back and give you that answer as the request comes in to either P & Z or engineering to find out which ones are going to be utilizing, Mr. Lund had minutes of last meeting of Entry Level Housing meeting with the developers and real estate agents and going to refine that a little deeper and bring that back to the council.

Mr. Grasser referred the council to page 175 which is listing of affordable housing items, and
when he was on the Planning & Zoning Commission he tried to note in the minutes the
exceptions and that this is a fluid list and might not hurt as part of the overall process to either
identify which of those items are being followed or if do it by exception, note which ones aren't
being followed; that is procedural thing but would clarify which items are being utilized.

Council Member Kreun stated that in looking at the ordinance that was passed, city council may grant variances in the required lot width, depth under subsection located to designated affordable districts, and another for reduced right of way so gives those flexibilities, will refine and bring forward as the project goes on.

Council Member Gershman stated that many times they find things and good work that has been
done by people prior to us being here and time to recognize the council members from 1997,
Mayor Owens and staff; that this was passed in February and then the flood hit and this
disappeared and that he and Council Member Kreun requested of the mayor if they could start
this process again and this great piece of work surfaced; and publicly thanked the former council
members, Mayor Owens and former staff that worked so hard to do this.

Council Member Christensen asked what the definition is of an affordable housing development
area, where found in the Code. Mr. Lund stated that HUD does define median income level by
family-size and in 1997 study and affordability of the homes was based off of those particular
income levels - the 1997 study did identify the eligibility of a home or development that could be
classified as an affordable housing district, that was not codified to his knowledge; the fact that
you could have a reduced right of way, the fact that a city could alter the way that it requires a
developer to pay for specials or not up-front for infrastructure development, and the minimum
width and depth of lots - those exceptions or the ability for the City to waive existing code
elements was spelled out but the actual definition of what the costs of the home had to be at or
below is not in the city code. Council Member Christensen stated included in their packet an
ordinance that was drafted in 1997 and three changes made to the Planning and Zoning ordinance
at that time, curious as to what comes first, the designation of an affordable housing development
area, have we done that, and what's criteria of an affordable housing development area. Mr.
Potter stated in the research they have done along with the work that was done in Urban
Development and in looking at the ordinance, they could find nothing other than the ordinance
that you have in the book, and says council may designate - that led them to believe that the
council can custom create affordable housing districts however you desire - large, small, using
that as a starting point, then looking at the items that were adopted by the council simply by
motion, it appeared that it gave the council creativity to be able to look at --- Council Member
Christensen stated he understands we have the ability to waive the deposit for utilities and streets,
ability to grant variances for the required lot width and depth and have ability to reduce right of
way requirements where warranted. Mr. Potter stated they started to look at how do you take a
subdivision plat which is coming in by guidance that was given by prior council and put together
a workable package to give to the city council, he stated they were bringing a plat, look at the
guidance that was given and that all applies and you agree that this is an affordable housing
district - that in Planning and Zoning when you adopt the plat, you also designate it as
an affordable housing area. Council Member Christensen stated to go with that, make it an
affordable housing district or development area, and if that by definition requires that
the lots be sold for a minimum sum and/or that the homes constructed on the lots, inclusive of
what you pay for the lots, at a specific sum - not to exceed; and it rolls in with your LMI which
has different requirements for low to moderate income but eligible for HUD statements.

Mr. Potter stated they do not have that worked out yet but will have that worked out before
getting back to council in May for final approval.

2.29 Petition from Steven Adams on behalf of Arthur Greenberg for ordinance to annex all lands not previously annexed in the Columbia Park Addition (loc. north of 40th Ave.S. and west of S. 20th St.)._____________________________________________

There were no comments.

2.30 Request from CPS, Ltd on behalf of Crary Development, Inc. for preliminary approval of plat of Southbrook First Addition (loc. at 47th Ave.S. and S. Washington St.) and designate the plat as an Affordable Housing District.____

There were no comments.

2.31 Request from CPS, Ltd on behalf of Crary Development, Inc. for preliminary approval of ordinance amending zoning map to exclude from A-2 (Agricultural Reserve) District and to include within the Southbrook PUD (Planned Unit Development), Concept Development Plan, all of Southbrook First Addition (loc. at 47th Ave.S. and S. Washington St.)_________________________________________

There were no comments.

2.32 Request from Terry Hanson on behalf of GF Housing Authority and Grand Forks Homes, Inc. for preliminary approval of Plat of Promenade First Addition (loc. at 6th Ave.N., 10th Ave.N,, N. 53rd St. and N. 55th St.) and designate plat as an Affordable Housing District._____________________________________________

There were no comments.

2.33 Request from Planning Department for final approval of ordinance to amend Section 18-0204 Rules and Definitions, Section 18-0215 B-2 (Shopping Center) Districts, subsection (2) Uses Permitted, and (11) Special Conditions, relating to drive-up coffee kiosks.__________________________________________________

Council Member Gershman stated that the council discussed at the March 10 meeting

how long it would be before Mountain Mudd could get a license (they were at this for four months at that time) and were told it would be about 6 weeks or 2 months, that they instructed that an ordinance be introduced, went to Planning & Zoning April 2 and Planning & Zoning tabled it for a month, not impressed and maybe what we have to do because its sense of the council that we want to move this forward; that he would like to have discussion with council members about the city council drafting and passing the ordinance and getting this done. That on March 10 Mr. Swanson said the quickest way to move it forward would be to give the ordinance preliminary approval at next council meeting and refer it back to Planning & Zoning and upon next available meeting after Planning and Zoning has filed consideration, take what ever action - but they tabled it, so our attorney says we can go ahead and design this ordinance and lets get this done. Mr. Swanson stated when he made that quote, it never occurred to him that Planning & Zoning might table the action, the plan he laid out was based upon the premise that various bodies would act as scheduled and that there would be no delays or tabling. He stated because the P & Z Commission did hold their public hearing on the ordinance on April 2 and at that public hearing they tabled if for one month, this body does not have the authority to act on the ordinance until such time as they have either acted on their public hearing or more than 30 days from their public hearing have passed.

Council Member Christensen asked if the people requesting the kiosk were to set up their shop and started selling coffee, what ordinances would they be violating. Mr. Swanson stated they would be violating the zoning use ordinance and some code issues. Ryan Lindemann, 3017 Broadway Blvd., stated they have two leases signed (1 at El Roco parking lot and other 2 Med Park Mall or K-Mart shopping plaza). Council Member Christensen stated should then see if violating any of the rules associated with the use of their parking lot, and thinks should look at ordinance brought by Mountain Mudd, not sure Planning & Zoning should be in the business of regulating businesses, but making sure land is developed orderly, and businesses will conduct themselves on the land developed orderly - that this proposed ordinance contains language that would preclude them from doing anything - that the applicant shall not cause a reduction of the total number of required off-street parking spaces provided by the principal use of the property; and need an overall review of our planning and zoning ordinance.

Council Member Brooks stated that we have farmers markets set and have had couple of circuses and they don't have to go through Planning and Zoning, but get permission to set up there. Mr. Swanson stated depending upon the zone, they get a temporary use permit for a short period of time, will have Christmas tree sales, gardening supplies and various periodic sales - for the record the rep. of Mountain Mudd and he are playing game of telephone tag over last 2 to 3 weeks - his intent was to inquire from her what her track history was as what works and what doesn't on the regulations. He stated from personal opinion the ordinance you have before you isn't going to cut it, either from the side of the City for the regulation purposes nor for business purposes and was hoping to gather from Mountain Mudd some insight and was hoping to get information.

Council Member Kerian stated as member of Planning & Zoning she was in favor of tabling this because they didn't get the work done, there are some things that need to be addressed and do want to be careful about the ordinances, businesses want things quick but also want them predictable and level playing field and thinks that's the way to do business and asked how do they handle the parking lot issue because the next person who comes up here and wants to put in a business, and there can be some variance, but needs to be established and repeatable. She stated it does not make sense to pass less quality ordinances, wants to move along quickly as can but removing parking issue isn't the answer; and other question or objection is that there are businesses that have drive-ups that have permanent locations they have remodeled and what is the equity in businesses that are paying property taxes have higher expense than the person who puts up a building on somebody else's property and no additional cost to that. Council Member Gershman stated that is a legitimate concern, but the property owner is already paying property taxes on that land and what need to do is to have a seasonal rate or license and an annual license so the annual license becomes larger and that is how bring some equity into the system. He stated Mountain Mudd is in 32 states and 200 cities and doesn't understand why 200 cities can figure this out and we cannot - but we should have.

Council Member Brooks stated first thing is how can we get them set up - in temporary use permit and they can get started while we go through and do the right process.

Council Member Christensen started Article 22, Mobile Food Vendors - any business established for the primary purpose of selling food and food products and beverages and novelty items to the general public for use by bicycles, motors, cars, vans or other vehicles - can get it for one year. Mr. Swanson stated he is looking at the licensing section, the licensing isn't the problem here, the problem is the Planning and Zoning Code, and not sure it fits into the mobile food vendor but the concern hasn't been expressed from the Health Department, the concern here is the issue before you as an ordinance dealing with the zoning side of it.
Council Member Christensen said they propose to place one of their units on the parking lot at the El Roco, and if the parking is only for the people who go into the El Roco or parking spaces to service the facility, and if they have enough parking to service the facility they could get this permit and open up - take some research. Mr. Swanson stated he thinks they want to do the right thing the right way and little concerned that if the council is advocating moving forward in violation of the Code, despite the fact he understands the frustration you have, but licensing referring to in the mobile food vendor doesn't resolve the zoning issue, actually the mobile food vendor is intended for the Good Humor Ice Cream truck, etc. and the reason he called the rep. from Mountain Mudd was because hearing the debate that the council had and not knowing what the Planning and Zoning Department had been through or what the Commission was going to do, he wanted to have his office getting as much information from her as could and to this point haven't been able to connect, and is telling council is to really understand the importance you're placing on this, and thinks it can get resolved.

Council Member Kreun stated that if a conditional use permit doesn't work, where should they go with it. Mr. Swanson stated conditional use permit is not the way to go - that he sent this body a memo in December expressing concerns about what he thought was an over reliance on conditional use permits - his approach would be not to put it in conditional use permit at all but either make it an express permitted use in different zones or at a minimum treat it as a special use, with temporary uses. He stated what you will find in the code section isn't a zoning section, it is a licensing and that's not the side they have had a problem with in City Hall. Council Member Kreun stated that the main problem is our parking ordinance as to number of available parking stalls and how much can you reduce them by what percentage, in some cases not a huge issue but in others could and if they could write that into the ordinance because it has to be very flexible as far as parking. Mr. Swanson stated he thinks they can, and that was his intent but has not been successful in getting more information, that as it is right now the council cannot act until 30 days after Planning and Zoning has failed to give you a report from their public hearing or as provided you with a public report. He stated they are not bound by the P & Z report - could have a special P & Z meeting. Mr. Swanson stated he didn't think they should interpret his comments as being the sole source of obtaining information, he did it based upon what he heard at the council and will continue his efforts in making that communication

Council Member Hamerlik stated there were some problems he would see with P & Z that once it has been tabled until a certain time and may have some difficulties there, he stated this is a two-step affair - there is long range and have ordinance we can live by and instead of council trying to draft it here, why not charge staff , administration and city attorney to come out with something to get this going in next week or ten days, that there has to be a way and by Monday night should be able to have a motion to move forward. Mr. Swanson stated with respect to the amendment to the zoning code, this body is without jurisdiction to act until at least 30 days after the date P & Z held the public hearing which was April 2 and council would not have the authority to act on the ordinance next Monday night nor would they have the authority to act until after the first day of May, 2003. Council Member Hamerlik asked if there was some temporary way of doing it, that council doesn't have the ability to figure out how to do something. Mr. Swanson stated he will consider that - the Code is very clear, very definitive with respect to the Zoning Code, but will give it consideration to see if he can identify a manner in which they can move forward.

2.34 Application to Fannie Mae for funding in support of City sponsored housing initiatives._________________________________________________________

Terry Hanson, Housing Authority, stated that last Thursday Bob Knoll with Fannie Mae

ND Office gave a presentation to the GF Housing Authority Board as well as Mr. Gershman, president of the city council and Mr. Kreun, council member, and offered to the City of Grand Forks a utilization of one of their program which is the American Community Fund (this was started 3 years ago by Fannie Mae) and is a resource used by communities throughout the U.S. for funding of housing initiatives - what it provides for the city is lower cost funding than bonds, at least on short term, and provides a more timely source of funding for the City. That after hearing the presentation and giving consideration, Mr. Gershman and Mr. Kreun asked that they come forward with this action and ask for authorization from the City to apply to Fannie Mae for the funding, that they have not developed a program through which these funds would be utilized but want authorization just to move ahead and make application to Fannie Mae. He stated this falls hand in hand with the initiative that the City is undertaking for affordable housing with the entry level affordable housing districts; provides the City will lower cost funding if the City is to move forward and fund all of the infrastructure costs under the affordable housing district program as well as more timeliness in the application. Council Member Gershman stated this is more like a line of credit and have it out there at little cost and won't access it until we need, and thought best to bring forward to council for consideration to get process going, not committing to $5 million, line of credit for us. Mr. Hanson stated they received a phone call from Robert Knoll and he did advise that there is an on-going fee just to hold the line of credit and suggested that our initial application be for less than $5 million but maybe $3 million because of the fee and can always come back and request an additional line and an addition to that line. The fee is 15 basis points or $45,000 annually.

Council Member Christensen asked if we were to access this money, can we relend it to developers for area of LMI; Mr. Hanson stated we can and up to 120% of the area income and LMI income families they want funds directed to. Council Member Christensen stated if they authorize Housing Authority to make application, when find out how can use it; Mr. Hanson stated the funds can be used for housing or housing related developments, pre-development acquisitions, bridge construction or perm loans and short term up to 3 years, non-mortgage loan use to help finance community development priorities. Council Member Christensen asked if they could make it available to homeowners themselves for 3 years. Mr. Hanson stated they can and could develop a program where using these funds to fund programs to the homeowners. Mr. Swanson asked if the intent is that the City would be the borrower and if there is risk involved; Mr. Hanson stated yes and that a promissory note to be signed and is based on the general obligation of the city. Mr. Swanson stated they do not have the authority to borrow these funds without exercising the Home Rule Authority and adopting an ordinance to do so. The only method the City has to take credit in its name is as a general obligation through the sale of bonds, either revenue or general obligation bonds, or through the use of certificates of indebtedness, which are governed by State law. The City would have the authority (hasn't seen any of the federal regulations) to by ordinance exercise its Home Rule Authority to take advantage of whatever federal underwriting or federal authorization there is; the Attorney General last week released an opinion that the cities in ND do not have the authority to enter into agreements under a joint powers agreement with the federal government, not sure that opinion is directly relevant but does highlight the point that you have to find other statutory authority to enter into indebtedness of this nature, not saying you can't do it but have to go through the proper channels to do it.

Council Member Christensen stated it occurred to him that the Grand Forks Housing Authority wouldn't have those restrictions and the Housing Authority could borrow the money; Mr. Hanson stated that Fannie Mae has programs that are available to other political and public bodies, the funds discussing here and reason for selecting the City is if the other entities have to have a net worth of about $15 million in order to access these funds without a guarantee or collateral; the City can do it based on its good faith and credit under general obligation, and rates will be less to the City. The Housing Authority would have to pledge property and get it at higher rate, 2%
Mr. Hanson stated we were unofficially quoted a rate to the City last week of 2 1/2 % and asked the city auditor what the current bond rate is for the last bond issue - 4 1/2% and that's 2% better; also the rate offered to the Grand Forks Housing Authority is about the same as the City bond rate and that's pledging collateral, and reduces interest rate by almost half; the intent would be for any program that the City would have a pool of funds available for projects, whether it be their own funded project, financing the infrastructure or re-lending the proceeds of these funds to other entities to perhaps include the Housing Authority or a for-profit developer for infrastructure or other housing costs and the City would have the authority as with its own funds at any rate, could charge the Housing Authority the same rate that they could get the money from Fannie Mae but the City would be able to obtain those funds at a lower rate and hopefully pass on lower rate to the Housing Authority that what they can access the funds for. Council Member Christensen stated we're risking the taxpayers money and have a Housing Authority that has assets and has the ability to leverage your assets - $1 million 2%, $20,000, $3 million, $60,000, that is serious money but also curious about taking on more risk without a much better definition of how we minimize the risk and recapture the funds rather than have it out there for a long period of time.

Council Member Brooks stated that one of those that housing business is not something the City should be in, however, this city is unique through what we went through the flood and really lost our affordable housing stock and presented with some unique situations, challenges, but with Congressional I and II, need to understand his concern when talking about housing issues; those were different times but hope that look to real estate industry to give us some good direction on how we proceed.

Council Member Kreun asked if this was going to affect our bond rating in any way and if we should be doing this through the City or through Housing Authority. The city auditor reported in visiting with Springsted and looking at Moody's, doesn't think it will affect our bond rating but need to find a way to do it. He stated that if we do pass an ordinance to get the funding from Fannie Mae but as a sense of making it more secure when we do the infrastructure, perhaps still have to go through the process of establishing a special assessment district and draw these funds down at a 1 or 2% interest instead of selling our normal special assessments bonds for these types of projects and Mr. Swanson would have to respond to that.

MAYOR AND COUNCIL COMMENTS

1) Council Member Christensen thanked Mr. Carsen for getting information to city council re. additional revenues that may be collected in 2003. Mr. Carsen stated that is for the 2004 operating budget. Council Member Christensen stated we are having a better than expected collection in our sales tax revenues.

2) Council Member Brooks stated he would like to have financial report for 2002 referred to finance committee for review if others interested in that.

3) Council Member Hamerlik requested the Mayor as chair of the Pension & Insurance Committee schedule a meeting, that we have a defined benefit plan with many individuals under it and with the stock market as it is and assumptions that were made, would like to hear how we're not doing; and that it will take some time before we get our consultants to give us that. The city auditor stated the actuarial report for 2002 is in the works and should have it fairly soon.

ADJOURN

It was moved by Council Member Kreun and seconded by Council Member Gershman
that we adjourn. Carried 6 votes affirmative.

Respectfully submitted,

John M. Schmisek
City Auditor