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Minutes/Committee of the Whole
Monday, March 22, 2004 - 7:00 p.m.

The city council met as the Committee of the Whole on Monday, March 22, 2004 at 7:00 p.m. in the council chambers in City Hall with Mayor Brown presiding. Present at roll call were Council Members Brooks, Hamerlik, Glassheim, Gershman, Christensen (teleconference), Kerian, Kreun - 7; absent: none.

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

Mayor Brown commented on various events held during the past week and upcoming events:
He thanked the organizers of the Home Show and the gun show this weekend at the Alerus and thanks to council members who spent some time helping at the City's booth, and to staff.
He looked forward to the ArtWise event that will start tomorrow night at the Alerus, and encouraged everyone to check it out, that it is one of his favorite events of the year and last year was impressed by some of the art and still has a painting from a Sacred Heart fourth grader hanging in the mayor's office; and congratulations to all the organizers, volunteers and local businesses who support this event.
Thursday evening is the Greenway Expo at Herald Community Room from 7:00 to 9:00 p.m.
Thursday evening is their annual meeting between City leaders and UND student leaders , a very productive way to discuss ideas and issues of mutual concern and important to keep an open dialogue with our young people.
This week marks the 35th Annual Writers Conference at UND, internationally renowned event, and some of the most influential writers participating in the conference over the years, events like this and the recent Leon Russell concerts are successes that we need to support and build upon to create more energy in our community and compliments to organizers for planning an exciting conference and encouraging such talent to visit our community.

2.1 Matter of ballot language re. publication of minutes and checks.
Council Member Gershman stated we should have some concerns about the cost of this issue, that if citizens are going to have a vote on this according to State law, need to put out the facts as to what that is going to cost, that if publish every check and publish entire minutes the vote will be very expensive, a lot of that is on the internet and we do publish the minutes in the newspaper and would hope we could get some idea of the total cost that this would cost the citizens. The city auditor stated he would take average minutes and listing of checks and take to the Herald to get pricing on those and have information on Monday. There were some questions as to size of print and that would also be checked.

The city auditor stated that printing of minutes and checks has been voted on twice in Grand Forks and has been defeated twice, that we do more than required in publishing our minutes, checks would be a new area, and if vote would pass we would be required to do that.

Mr. Swanson stated what is before you is requirement that every 4 years the matter must be placed on the ballot for determination by electors, was on ballot in 2000, and what has changed since the last ballot is an Attorney General's opinion that indicates that we no longer can identify in the ballot language the cost of publication, previously we indicted our estimated costs and that no longer is allowed and in your packet is a memorandum from his office in which they have drafted what he thinks to be acceptable language for the ballot, and next week council would be asked to approve the ballot language for submission to the County. He stated the issues and concerns that have been expressed are all accurate and on point. He stated that ballot language
that he has included is about as far as you can go with the Attorney General's opinion; the sample ballot that was provided to the city auditor is even different than what he has provided.

Council Member Brooks asked if there is an official newspaper; Mr. Swanson stated that the Grand Forks Herald is the designated official publication, there are opportunities to select another publication, has to be a publication that has to be widely circulated within the city limits. Council Member Brooks asked if website could qualify as official newspaper; Mr. Swanson stated that would not comply with requirements of State law currently.

It was noted that if anybody wanted to see the list of checks that the City issues and the entire minutes, they could come to City Hall to see that and minutes are also on the internet.

2.2 Applications for exemption of remodeling improvements to commercial buildings at
a) 1901 DeMers Avenue
b) 1923 DeMers Avenue__________________________________________________
There were no comments.

2.3 Create special assessment district for Project No. 5604, District No. 281, Watermain
on S. 42nd Street and 36th Avenue South.____________________________________
There were no comments.

2.4 Bids for Project No. 5555 - TCSP Greenway Trail Enhancements, Phase 2.
Council Member Brooks noted that the low bid is 49% under the engineer's estimate of $190,000, that is significant and if there were any plan changes. Cindy Voigt, asst. city engineer, stated that the engineer's estimate could have been on the high side, that bidders all evenly low. Council Member Kerian stated this was to take advantage of some grant dollars, and with the bid coming in low, are there dollars left or what would happen there. Ms. Voigt stated there is about $100,000 left from the TCSP grant after this expenditure, we have a call into the State to see how long that money will be available because it has special stipulations, that want to make sure we know when the date is and to see what type of projects we could do that were eligible, has to be in the previous study so looking at the same segments, same locations and see what will fit with that $100,000 range. Council Member Kerian stated one of the reasons that we went to other than a hard surface was dollars, and asked if we could hard surface portions of it; Ms. Voigt stated possibly but as they won't allow this large a change order on any of the contracts we currently have open so if hard surface would have to start with a new set of construction drawings, they can look at that and report back.

2.5 Urban and Regional Program Project request to NDDot.
Council Member Brooks stated this is for construction years 2005-2009, there are some City shares related to federal aid projects and when we get into the budget process and we start talking about some of our dollars for construction projects and they say this is already in the CIP, and his question is if we are going to vote on the fiscal dollars because we are talking about future years and not ready to approve or commit City dollars that far ahead and not sure if we have the authority to do that. Ms. Voigt stated in that local funding, that the Highway Users fund is getting tapped out, and in the report they have proposed that unless we find another funding source that we will special assess our local share. Council Member Brooks stated that the feds are saying they are putting a plan together and need some kind of commitment from the City but if funding is a problem, we back out of it and that is an option we would have if we were not able to find the funds.
Council Member Hamerlik stated that as we pass this, it goes to MPO and has to meet with approval of their executive committee and asked what has been experience in the last couple years as to changing the priorities for even dropping some of them off by the MPO. Ms. Voigt stated there has been a history in the last couple years of the MPO submitting and approving lists different than ours and hasn't gone over very well with the State, they basically changed it back and so what the council had we ended up forwarding it to the State. Council Member Hamerlik stated that in 1994 we have had the DeMers Avenue/42nd Street underpass, est. cost $6.7 million, and decided that underpass most appropriate by the study committee, and was on the list a few years ago but no longer on the list, that in the year 2000 there were over 8,500 cars gong down 42nd up from 400 from 15 years before that, and since 2000 would think it would be 10-11,000 and believes that should be on the list and should be higher priority than what it is now, that you have stated that money is real problem and if start talking about special assessments have another problem both with items on the list as well as 42nd and DeMers, and would like to see the 42nd and DeMers underpass be put on list, that can't be putting on but can take them off, so why not include it, here talking 6-7-8 years down the road and way too long for that intersection.

Council Member Gershman asked if time sensitive issue here with this, that they have Wednesday afternoon planning meetings with mayor, city council and staff and this is something that is on their list - infrastructure and surprised that it is here. Ms. Voigt stated she believes that the MPO wants to get this to the State in May and was hoping to have this approved by April 5 and hit their TAC and executive committee before it was due; there might be couple weeks but if meeting this week or following week, would give them time before April 5. Council Member Gershman stated he and Mr. Duquette will be working on the agenda tomorrow and if consensus from council and the mayor that maybe this should be moved up on there so discuss this tomorrow and possibly next Wednesday if need be so will have some time to flush this out and that 42nd getting very busy. Mayor Brown asked Mr. Duquette to make that agenda.

Council Member Hamerlik stated he would like to find out if it is time sensitive for MPO, have explained what they have asked of you but wise to talk with Mr. Haugen.

Ms. Voigt stated they would like to make a change for the record that the report which states to rehabilitate Point Bridge revise est. total cost from $2,355,000 to $2,139,000 and local funding would be shown as $213,900; that they are taking away the additional City's share that they had for R/W and misc. and changing that to zero, and taking that additional contingency out of the record so that when they submit to the State that half and half with East Grand Forks and Grand Forks will show up.

2.6 Application for moving permit to move rental dwelling from 419 N. 5th Street to 317
N. 3rd Street to be used as a three-unit dwelling.______________________________
There were no comments.

2.7 Bid specifications for portable live fire simulator trailer and equipment.
There were no comments.

2.8 Budget amendment for fire department.
There were no comments.

2.9 Mosquito control bid recommendation.
Council Member Gershman stated that last year we raised fees but haven't seen accounting and if we have enough in the fund. Don Shields, health department, stated that as long as have normal season feel good about funding levels. Todd Hanson stated the budget has been set for an average year based on National Weather Service at UND, last year average rainfall a little higher than normal, hard to forecast what is going to happen throughout the year.

Council Member Gershman stated last year they came asking for additional equipment and better chemicals and better plan, and congratulated them for good job.

Council Member Brooks questioned whether budgeting for average year, and if some funds go into reserve. Mr. Hanson stated they are going to maintain an aggressive larviciding program and that is most expensive part of the mosquito control program, and have identified funds for capital replacement. Mr. Shields stated last year they didn't implement increase in fees until February and revenue slightly less than it will be this year, ended up with $42,000 carry-over, don't have a lot of excess funds but have good base for capital replacement which is major goal and hope put money in for wetter years.

Council Member Kerian asked what will happen with greenway. Mr. Shields stated have greenway area planned as part of the mosquito control program, both in terms of larviciding and adulticiding, and some of the chemicals and equipment on the list are made to be able to treat greenway, will cost some money but built into the program.

Council Member Kreun stated most important part is larviciding vs. adulticiding, and asked when starting and what can citizens do to help us battle in our own backyards. Mr. Hanson stated they will start larviciding in 3 to 4 weeks, and talked with some of the research and development people from an organization and they are going to donate $3,000 worth of long term chemicals to help us do study with their products this year; last year lot of success came from residents that went out and surveyed their properties and identified areas that were breeding mosquitoes, cleaning out rain gutters and taking ownership in our program with their properties. Council Member Kerian asked if there was opportunity at different forums to get that information out. Mr. Hanson stated part of their public education campaign includes presentations to service clubs, and want to do everything they can to notify the public and educate them on the importance of avoiding being bitten by mosquitoes because West Nile virus is here and here to stay.

2.10 Bid package for new mobile command vehicle for police department.
There were no comments.

2.11 Agreement for Greenway Restoration Project No. 5248.
Council Member Kerian asked who is Red River Regional Council. Melanie Parvey-Biby, greenway coordinator, stated they are a council that deals with a number of issues, one of their projects is the Red River Basin Riparian Project and this is the one they are here to talk to council about, an environmental project they advise and oversee, that the Resource District has office in Grafton and have number of staff members that are involved and work very closely with the ND Forest Service Energy and Environmental Research Center and partner with UND as well as many others. Ms. Parvey-Biby reported there are a number of things identified on the map areas of Central Park area, Lincoln Park/Elks Drive area, Koinonia area, and Sunbeam trail area, plantings along areas void of vegetation along river bank to stabilize banks and help with pollution runoff and provide for wildlife habitat and other recreational activities. She stated reps. of Forest Service toured project and looked at number of sites void of vegetation that needed bank stabilization. It was noted that the City cost is $10,700 and is an in-kind cost, that they have been working with the Regional Council since 1999 and they looked at greenway cleanup phase projects as preparation for the site work. It was noted that this project was approved over two years ago and this is the implementation. Ms. Parvey-Biby stated the reason for the delay is that they were struggling with the timeline of the construction on the flood protection project and waiting for contractors to get in and out of those areas.

2.12 Request from Metro Plains Properties, Inc. for extension of deferment of flood
rental rehab loan payments.___________________________________________
Council Member Hamerlik stated he is assuming this will have nothing to do with any delay of the construction of our master project; Keith Lund, Urban Development, stated they are asking to defer the payments for 6 months and wished he could assure him of that but not in a position to do that. Mark Walker, asst. city engineer, stated issue is repayment of a loan and knows that an appraisal has been done on this property for the flood protection project as far as the property that we need, the city attorney's office has made an offer and is in negotiation, his understanding in dealing with Mr. Warcup is that he is continuing to negotiate a settlement with the property owners to acquire the property that we need to build the project.

Council Member Kerian recommended addition of a word in the recommended council action, to include "current" and to read "to become current with their loan payment."

2.13 Request for extension of CDBG loan agreement substantial completion date for
Metropolitan Opera House.____________________________________________
Council Member Gershman stated this a beautiful building and want to see it happen but has questions about the amount of money, that we have expended the $600,000 and guessed that the exterior did not cost $600,000; Mr. Lund stated $185,000 of the $600,000 assistance was used to assist with the acquisition and $415,000 was expended for the exterior.

Lonnie Laffen stated those numbers are correct in addition to about $100,000 of design time they put in and have not paid themselves and $50,000 of their own money has gone into the restoration of the exterior. Council Member Gershman stated that 3.3% of the principal will be forgiven each year and if there will be interest paid on the balance. Mr. Lund stated that 3.3% is to be forgiven over 30 years if property maintains attendance as ownership of Oriental Avenue and is current on its taxes; if property were sold the unforgiven balance would come back to the City. The $600,000 doesn't have any interest on it.

Council Member Gershman stated they are asking for an extension of the loan and suggested that if they find a tenant prior to the extra year that things would happen at that point but it is almost moot if there is no interest being paid. Mr. Laffen stated the current loan agreement states that they need to have the rest of that project completed by January of 2005, tenant needs to be in there and they need to put the money into that interior space to the tune of around $1 million, that they don't have the tenant yet so can't retrofit that space and if could sign that tenant today it would take them that long to design and reconstruct and have it ready so that they know that they can't meet that 2005 deadline and need another year to meet that deadline, vacancy is still a problem downtown but are very optimistic that they will be able to sign a very good tenant this summer, are in negotiations now but know it is still 3 or 4 months at least until they have that complete and are here pre-planning.

Council Member Christensen stated that rather than go through with what Mr. Laffen and his group have in mind for the building , could be thinking about referring this to their finance development committee to get a better handle on the loan, the money that went into the project, the status of the loan and what the future of the building is, get information on Wednesday and come back to the council, something to think about. Mayor Brown stated he is seeing mixed reviews, seeing heads shaking no.

2.14 Renaissance Zone Project GF-10.
There were no comments.

2.15 Matter of increase in Defined Contribution Plan contribution percentage.
Council Member Kreun stated at the meeting last Wednesday and the defined contribution plan was not altered as far as the amount, the only thing that they actually changed was the amount of time it took to buy those particular years back with those ten people that were involved with that project. The city auditor stated that was right, that was the item on the defined benefit plan and was held in committee, and tonight have the recommendation from the Pension and Insurance Committee for the 5% effective May 1, 2004, and a plan amendment. The city auditor stated there were two separate motions and on that item the individuals had until May 15, 2004 to make a decision on whether to come in and we have to do some more work for them as far as dollar amounts and what their pay-in is; that will be coming to you at a future meeting.

The city auditor stated the defined contribution plan is a matching plan so any amendment to the plan would require a match of the City and the employee, at this time in the defined contribution plan overall city 1% would cost about $54,500 per year and General Fund about $34,600 per year, the effective date of this is May 1, 2004 and therefore the $34,600 and the $54,500 are a little bit high for the first year but that would be on-going into the future budget years.

Council Member Hamerlik stated what the match is at under the defined benefit plan. The city auditor stated that the required contribution for age 55 retirement is about 7%, 5+ percent at age 62, and 4% at 65 and can't really determine what the City's match is because the City bears the risk for any lack of interest earnings that the assumed rate and those types of things so our match can be higher than that in given years to help fund the unfunded liability for those.

Council Member Hamerlik stated that it came up in the Pension Committee sometime back whether this is a negotiated item and should it be involved with negotiations, because of the cost and it is a benefit to the employees.

Council Member Brooks stated one question is what is the fiscal impact, total would be $54,500 and don't have everyone on this - the city auditor stated only employees hired after January 1, 1996 are in this plan, all others are in the defined benefit plan. Council Member Brooks stated that making a change in any kind of a benefit plan and coming in with a change in the middle of the year and has a hard time supporting that and this is something they put into the budget process and is a consideration like everything else for the next budget process in 2005. The dollar figures are less but is an impact, impacting some of the employees and what is the impact on the others; that there are a number of things to look at here but take some deliberation and is something he would see they take up in the budget process for 2005 and look at it then and fiscal impact and other impacts not just with these employees but others.

Council Member Kerian stated that it looked like this was brought forward because there may be some discrepancy between those contributions within the defined contribution plan vs. those who have the defined benefit, and somehow the people who are in the defined contribution for those who maybe retiring at 55 may not be adequately funded and that there was some discussion that may be there should be a couple different tiers that those people who because of the kind of work they do are more likely to need to retire at 55 and would be handled different and looks like the consensus of the committee was that we don't want to treat people differently and if that was the discussion.

Mr. Duquette stated that was correct, if you think in the sense with their defined benefit plan that there is sort of an employer's match, although it doesn't work in the defined benefit plan because there is a big ball of money out there that funds the entire plan, that employees pay into it and the City pays into it but it is not an individual account basis. There is a certain mathematical finding that approx. 5 or 6% is applied to the employees in the defined benefit plan to get them to retirement, and as we know now in the defined contribution plan which is what all employees are in now since 1996, 4% is applied to them and they match that 4%, the issue is a sense of equity between the defined benefit employees and the defined contribution employees and that is why they brought this forward.

Council Member Kerian stated that at some levels depending on when people needed or would prefer to retire at some levels a different percentage would be equitable. and it appeared that at 55 it would be closer to 5% but if retirement 62 some lower number -- Mr. Duquette stated that public safety employees who retire at 55 pay about 7% of their salaries into the plan vs. an employee retiring at 65 is 4.5% or so to this point. Council Member Kerian stated that the decision here is to stay with a number for all. Mr. Duquette stated in the perspective of what is coming from the City vs. what is coming from the employee.

Council Member Kerian stated the minutes stated that the funding is to come from cash carry-over and that would be first year only and after that budgeted. The city auditor stated that was correct and if implemented this year, that is the only way we would be able to do it.

Council Member Christensen stated the defined benefit and the defined contribution issues are a bit serious in that our defined benefit plan is under funded, we extended an actuarial computation a while back and went from 20 years to 30 years to make the numbers appear that it wasn't as under funded or wouldn't have the potential problems that are being addressed although he is not positive in this conversation, and his question would be if those who are retiring if we are throwing money into the plan to smooth their way out because there is an under funding in the defined benefit portion of the plan as the same pertains to them as far as meeting what they need, and if that is correct. The city auditor stated he is talking about the defined benefit plan and what this one is related to is the defined contribution; and that we haven't received the actuarial report for this year on the defined benefit plan, and believes it will be somewhat better than the prior year because the market has done somewhat better and that has a major impact on that plan. Council Member Christensen asked why would we be putting $54,000 or $60,000 into the plan mid-year for some employees that are leaving now. Mr. Duquette stated that the money that is going into the defined contribution plan, not the defined benefit plan, to raise the match provided by the City from 4% to 5%, the employees would be matching that 5% as well, and the defined benefit plan is not a part of this discussion

Council Member Christensen asked why are we making this contribution just for these employees. Mr. Duquette stated there was a mathematical issue that should you break down the defined benefit contribution to the defined benefit employees is around 5 to 6% if broke it down into individual accounts and that number moves based upon the market, it is difficult to equate a defined benefit plan to a defined contribution as in individual accounts but if you break it down, each account is getting roughly 5 to 6% from the City; the defined contribution employees are getting 4% match and they are matching 4% and it is their sense that there is a bit of a disparity in the pensions that are paid to the secondary group of employees, the defined contribution.

Council Member Christensen stated what they did was adopt a different plan a while back and did it to save money and reduced the amount of City contributions and if the people who were there before have a better pension because of what prior councils did and now have a prior council taking it down from 5% to 4%, that's a decision that was made and what really doing is funding this time and trying to equalize them and can't do that and if here before and had a pension of 5% and a 5% match and now going forward and it’s a 4 and 4 and if that isn't how it is. Otherwise going to keep on doing this and as middle management goes forward your makeup ball is going to be bigger, 3 or 4 years from now doing $150,000 or $200,000.

Council Member Hamerlik stated that while the cost next year is $54,000 as people leave the system that are on the defined benefit plan that will free up some of the so-called match but under the defined contribution plan it is $54,000 this year and will be whatever it is with the people we hire in the future and that will be escalating but as long as not new positions the defined benefit match will decrease and so almost like a wash. To explain not any better, the defined contribution plan is controlled by their investments and they who are under the plan have opportunities to determine how that is done, and if wish to retire early and our 4% or proposed 5%, they can put in 7, 8 or 9% like the people who were under the defined benefit plan now who wish to retire at age 55, (one person put in $25,000 cash so he could retire at age 55), so the point he is making is that our 4 or 5% but it doesn't limit the employee from putting 4, 5, 6 or 10% which would be a wise investment if they can afford to do it, by giving these people this amount shouldn't have any impact within that group of defined contribution whatsoever because they can put in more and if want to go at 55 or 60 or whatever, they can determine that and they retire according to what money they will be receiving for income.

Council Member Gershman stated that when people accepted a position with the City, they accepted it under the terms that were in place at the time, not to say that things don't change but his question is at $54,000 does that include any of the employees from the Enterprise funds. The city auditor stated that includes General Fund and Enterprise Funds.

Council Member Kerian commented about the cost to the City and one of the purposes of going to the defined contribution was to limit the dollars that the City puts into it but the bigger piece is that in the defined benefit the risk was all the City's; that is really more of our issue so we know that if we increase it 1% we know what our bill is but if you increase the defined benefit at some point in the future don't know what the bill is, there are still some more positive budget implications even if we do increase this defined contribution and moving in this direction still leaves some benefits in how we can budget for the City.

INFORMATION ITEMS

3.1 Information on Project No. 5319, District No. 89, street improvements for Sunbeam
Addition, west of Belmont Road.___________________________________________
There were no comments.

3.2 2005 Congressional earmark request.
There were no comments.

3.3 Statement of changes in cash balances as of February 29, 2004.
There were no comments.

COUNCIL MEMBER COMMENTS

1) Council Member Brooks stated on an annual basis have had some groups come in, EDC and Alerus have done presentations, and asked when have another meeting with Alerus Commission or for them to do a presentation. Mr. Duquette stated he would check that.
2) Council Member Hamerlik asked if there were any announcements re. any meetings coming up. Mr. Duquette stated he thought they were going to pull Canad negotiation committee together this week and work through those documents this week and see what the wishes are of the committee and what we do next Monday or the following Monday.

3) Council Member Kerian stated she was getting questions about the delays in Canad Inn and asked what are issues that it is being held. Mr. Duquette stated there are no big issues for either of the entities but don't develop a $40 million project without a lot of discussion and work by our attorney and theirs, down to details on how much parking and where parking is at, etc. and dotting i's and crossing t's.
Council Member Kerian commended police department for annual report, we are a safe city and appreciates work of the police department and appreciates Mr. Packet's statement that the police force is at the right size.

She stated she received a brochure of the City's permanent flood protection project, is a great idea and puts a lot of information is perspective for people and asked that they let people know where this is available. Mr. Grasser will take care of that.

4) Council Member Kreun stated our Special Enforcement Team won a regional award between MN, ND, SD and Wisconsin and recognition they received for the work that they do and they were recognized and should make that public. Chief Packet stated he appreciates recognition from the mayor and council and recognized their deployments in the last couple years, professionalism they have displayed under trying circumstances and they appreciate that.

4) Council Member Gershman stated some time ago he had requested Urban Development to put together pamphlet re. home ownership plans, that pamphlets are ready and explains in easy to read language affordable housing districts, how you can quality, programs for home owners, home improvement exemptions, new construction exemptions, renaissance zone programs, etc. and would encourage people to please call urban development and take advantage of the programs we have - will get these out to realtors and bankers, and thanks to Urban Development.

The city auditor reported that the attendance report which had been placed on the council members' desks would be on the council agenda next week as an informational item and be included in the minutes per ethics code resolution.

ADJOURN

It was moved by Council Member Gershman and seconded by Council Member Brooks that we adjourn. Carried 7 votes affirmative.

Respectfully submitted,



John M. Schmisek
City Auditor