City of Grand Forks, North Dakota

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PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
September 5, 2006

The city council of the city of Grand Forks, North Dakota met in the council chambers in City Hall on Tuesday, September 5, 2006 at the hour of 7:00 o’clock p.m. with Mayor Brown presiding. Present at roll call were Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; absent: none.

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

Boy Scout Troop 13 of Holy Family Church led the council in the pledge of allegiance to the flag.

Mayor Brown welcomed Council Member (Major) McNamara who recently returned from serving in Iraq.

MONTHLY FLOOD PROTECTION PROJECT UPDATE

Al Grasser, city engineer, reviewed areas where the contractors are working on the dike project: at Myra Museum area they are staining floodwalls and putting on aesthetic touches of coloration, on Minnesota Avenue where Point Bridge closed down and are anticipating that work to be done and bridge opened no later than September 13; Riverside area where contractors and subcontractors finishing off shelters and levee construction; RDO area where levee is under construction; on Merrifield Road and Washington Street, Columbia Road areas the contractors are paving and work anticipated to be done in next 3 to 4 weeks..

Greenway area: 2 trails will be opened on September 9 in Lincoln Drive Park, and Tour de Forks will be held Sunday, September 17, at 1:30 p.m. at Lincoln Park.

Council Member Gershman stated the report indicates under local funding that as of March 2006 the reduction of $6.9 million less than April 2005 estimate for the City's share and asked what that translates to for the assessment. The city auditor reported that the total anticipated assessment had been $52 million and if reduce $6.9 million that is a little over 10%, the cost was $1700 on an average lot and reduction of $170.00 on average lot.

Mr. Grasser stated over the last number of years they have had a number of different estimates from the Corps of Engineers and had some concern as to what this would mean to our local residents and that at this point we are zeroing in back on track.

ADOPT ORDINANCE NO. 4153 ENACTING SECTION RE.
TO PROHIBITION OF FEEDING DEER

An ordinance entitled "An ordinance enacting Section of the Grand Forks City Code relating to the prohibition of feeding of deer", which had been introduced and passed on its first reading on August 7, 2006, was presented and read for consideration on second reading and final passage.

Mayor Brown asked if there was anyone present who had comments to make on this matter, there were none.

Upon call for the question and upon roll call vote, the following voted "aye": Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor Brown declared the ordinance adopted.

ADOPT ORDINANCE NO. 4154, RELATING TO

ESTABLISHMENT OF VARIOUS FEES AND CHARGES.

An ordinance entitled "An ordinance amending sections of the Grand Forks City Code relating to the establishment of various fees and charges", which had been introduced and passed on its first reading on August 7, 2006, was presented and read for consideration on second reading and final passage.

Mayor Brown asked if there were any comments relating to the ordinance, there were no comments.

Upon call for the question and upon roll call vote, the following voted "aye": Council Member Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor Brown declared the ordinance adopted.

ADOPT FINAL BUDGET FOR THE CITY OF GRAND

FORKS FOR 2007 AND ANNUAL TAX LEVY

The city auditor reported that a notice calling the attention of the general public to the fact that the final budget of the City of Grand Forks, North Dakota, for the year ending December 31, 2007 had been published as required and public hearing was scheduled for this evening, and presented the final budget for consideration.

The city auditor noted there were no comments or grievances filed with his office and recommended to adopt the final budget for 2007, approve Annual Appropriation Bill and Tax Levy and Certificate of Levy.

Mayor Brown opened the public hearing and asked for comments; there were none, and the public hearing was closed.

Council Member Gershman stated the recommendation is for a 4.18 mill reduction but that he was going to move that we do a 6.5 mill reduction for several reasons: that earlier we passed a resolution suggesting 6.5 mills and stated in the resolution that we were encouraging other public entities to follow our lead and do a percentage decrease and that was a unanimous vote by this council and that we had the same basic information then as we do now, and for that reason is prudent for us to hold our resolution and mayor and staff have worked diligently on the budget to get the 4.18 but believes they can get to 6.5 by using 2.5 mills from our dike payment as we were collecting more money than we need, and if we do not take 2.5 mills from the dike payments we can pay the dike off by 2014 and that would be a savings in interest, however if we take the 2.5 mills and give property tax relief to the people today who might not be around in 2014 and will pay the dike off in 2017 approximately and thinks that is a good tradeoff because it keeps our word; and that is his motion of a 6.5 mill reduction. The motion was seconded by Council Member Christensen.
Council Member Gershman stated the mill reduction was from the dike fund because have excess dollars there but if mayor and staff could find 2.5 mills somewhere else they can take it from somewhere else.

Council Member Christensen stated that by suggesting that we would like another 2.38 mills from someplace, and that the issue of taking the money from the dike fund was just a suggestion. He stated that he is aware that there is a position which has been open for a couple years ($66,000 or $90,000 with benefits) and would be suggestion to remove that position from the budget; that we have several mills that have been dedicated to pay for the building in which we are sitting in and those mills are going to roll off in the year 2007, and that debt is paid; and also continue paying the 2 mills for capital project. Those are a couple suggestions and there is opportunity to find another $123,000 in this $24-25 million general fund budget; and that this gets to be a matter of principle, that when a council votes and establish a resolution, would like to have it done. Every department in the city is required to present a balanced budget and by law have to present a balanced budget but we are accepting $143,000 or $145,000 deficit by a commission that operates our largest asset in this community and have built that into the budget; doesn't come from mills but from sales tax; and seems we can do a little better and achieve the resolution we passed.

Mayor Brown stated the resolution was to strive to look at a 6.5 mill reduction, that he wants service neutral budget, a budget that allows for growth and plans for the growth of this community, that this a reasonable budget and allows for growth and we have not been doing that in the past and see repercussions from that, is reasonable to pay the dike off in the time presented because that will free up more money for other things in the future, where have new debts and new challenges - this is reasonable and responsible.

The city auditor stated that by State Statute and a motion on the floor and if there is going to be a reduction in the mills it has to be by the end of the meeting determined specifically where that mill reduction is coming from. He stated that if only reduce the 2.5 mills this year and do not reduce them any further, more than likely would be able to pay that debt off somewhere around 2017 at an additional cost of interest of $800,000 rather than $1.8 million if had to go all the way out; the reason for making some of the recommendations and only doing a 4.18 is that the Mayor wanted a service neutral budget and wanted a budget that seemed the most fiscally responsible at the time and that is what they strived for.

Council Member Kreun stated that when they adopted the resolution they wanted to strive for this particular mill reduction and also made suggestions to counter-parts and that at this time if we don't have 6.5 mill reduction we will still be the closest to the resolution, the County is probably going to raise taxes rather than cut them, the Park District may break even and the School District is not going to go down 11 mills, maybe 6. A lot of things discussed when they voted on the resolution, that the City still has a large debt load because of the flood and to pay off the dike specials early and get a better rating, and because of benefit of bond sales and rating for a long term because we do have some large projects coming in the next 10 years or so and would be beneficial to pay the dike specials off early.

Council Member Gershman stated what he proposed in the motion is neutral as far as the increased dollars from the assessment would be to the homeowner, that we talk about economic development and growth holding people's taxes down and if we do the 7 mills kept it neutral for the public, that we would not use the increased assessed value of their homes to fund the government, but use the new construction and excess sales tax, and felt that was an important message to send to the citizens that we are spending money and their tax dollars on helping growth in the community and been quite successful at it, and they should see the benefits of that, and that his motion is neutral from that aspect, but we are trying to get neutrality for the increased assessed value of someone's home by giving them that portion of the city's taxes, which is 24% of their tax bill saying you get that money back and we're going to fund the government with excess sales tax and new construction.

Council Member Christensen stated wanting to get rid of the debt load to increase our bond rating has never been proven to anyone, but in information handed out to them they proposed to issue bonds of $3.4 million G.O. Bonds which are funded by property tax and a Revenue Proceed Bonds of $1.2 million for the training facility, mosquito control facility, and garage for Homeland Security, $4.6 million, that there has been a shift from one fund to another but still added a half a mill there and can get rid of the half mill by scaling down the size of the project, and if take the half mill away the project will be a little smaller. He stated this is micromanaging but it wouldn't matter because if we choose not to build the project or of that magnitude, they will manage to that sum of money. He stated that when talking about paying off the dike fund, get to the total interest amount that you would save if you ran the bonds out to 2022, can't give us that kind of logic saying this is the interest you will save if pay them off sooner, but is how much more interest do we have to pay as a community between 2015 and 2017. He stated we haven't had a lot of meetings where we could sit down and really address the math and get the spread sheets and get the funds and engage in the conversation and so tonight we are forced with where are we going to find the extra mills so we can pass this budget. He stated he has suggested a couple things but that is easy to find a couple more mills if you have the will to go back and find another $242,000 (a mill is $121,000), plus 3.8%, and asked why would we want to approve a budget when that short and have some deficit spending going on within the budget.

The city auditor stated he had asked for a number between 2014 and 2017 and in his comments he had said that would cost $800,000 and not the $1.8 million of the 2022 and that is based on the fact that when they lowered the mills from 14 mills down to 11.5 mills they extended the debt service again by 2 years or could have called it in 2012 and that cost them $800,000, there is a cost and that is the cost. He stated re. Alerus Center re. deficit of $142,000, is they had an increase in an economic development rate that was a promotional rate for the first 5 years of the facility that increased their utilities by about 55%, and in a meeting with some council members they stated that they are trying to diminish that but unable to do it in one year's time. He stated they have budgeted $143,000 out of 2163 sales tax money to cover that deficit in this given year and is not their intention to continue that process but continue to work with them to find some other ways of funding, part of that will be based on adding a parking fee but could not add that until September of next year due to the fact that there is construction going on out there; if they add construction for the entire year they are going to add something like another $100,000+ worth of revenue, coming close to meeting their needs, and are also looking at fees to see if they can be increased, and believes they will hit their goal in a year's time; and did administratively through the mayor's office agree to put money in here to help assist them.

Council Member Glassheim stated there was a question as to whether they had any new information since they passed the resolution and the new information was that after strong efforts the administration and department heads worked on their budgets and cut what they could and came back and said they shouldn't make any deeper cuts, and that is information he considers is important; and the resolution was not a promise but a strive that they would reach the goal of 6.5 and that they did strive and didn't reach the goal of 6.5, but reached 4.1. The budget resolution was to send a signal to administration of what they would like and then to come back when they tried to meet it and had further discussions, and never an absolute. He stated that taxes are the price we pay for having a good society, price we pay for common good, for public safety, for public health, for public streets cleared, etc. and there are services that we deliver and that people want and although they would like to pay a little less, they don't want any of the services reduced. He stated we have been cutting mills for many years and time to stop, cannot go into the future cutting too much, we have deferred capital purchases that have to be made, deferred maintenance, have reasonable salary increases that we have to pay, have obligations on retirement benefits and that the 4 mill cut is enough in his judgment. He stated they are talking about $10 or $11 off a $100,000 home, doesn't think it is significant in terms of damage it does to the city as a whole. He stated that from 1999 to 2007 growth in commercial and residential construction went up 6% per year and any increase in dollars in the City's General Fund was more than paid for by the growth and construction rather than by increased taxes; and if add in the cost of the dike and is a cost to taxpayers, went up 5% per year over the decade. Inflation was 2.8 and new construction was 6%, that we deliver good services which are wanted and needed

Council Member Brooks reviewed process for budget, that we are here to set policy and to act on things that are brought forward with expertise of the staff; that to get into the budget process in detail and micromanage is a dangerous situation, we don't have expertise to do that, and is important that we realize that. He also noted that the budget will change through budget amendments and that is what a financial plan is about, what is before us is budget with a reduction of 4.18 mills but to go to 6.5 mills and not identify where it comes from wouldn't vote for that.

Council Member Christensen stated other issues - public safety facility that when it began was in the area of $3.4 million, morphed to $5.9 million and now $5.2 million; unfounded pension plan, that 25% of the employees will be retiring in 10 years, haven't addressed that but are throwing $1.3 million in it; and beginning the debate of transferring $1.2 million from Reserves to fund a training facility; that we are dealing with $123 million and have some big issues, that when he sees a budget of the major facility in this town come before us with $143,000 deficit spent and the excuse is that they went off the Nodak rate and onto the real rate and had to pay $63,000 more in energy costs and whether they didn't know that was going to end; and that is why supporting Mr. Gershman's motion.

Council Member McNamara stated when running for this seat and the biggest single issue that confronts the community and in his ward is taxes, and is the single most important issue in this budget and the city council has done a good job in terms of cutting mills, and 6.5 mills is a good goal and City would do well to live up to that, when talking of what services would you cut, and response he got was to give them a list and they are prepared to cut. The Alerus Center - that this is the first year they have forecast a deficit, but not the first year they will run a deficit and in terms of their ability to project financial performance accurately, would question it, normally they have been somewhere between $100,00 and $250,000 in the red, given their parameters maybe that is good, and if they are forecasting $142,000 in the red the city council ought to be prepared for that to be $250,000 to $300,000 in the red given their historical performance. He stated lack of a plan is raising its head tonight, and supports Mr. Gershman's motion, thinks 6.5 mills demonstrates that we hear what they are saying and have said for a long time, and are prepared to move in that direction and believes our job is to set the parameters with which the department heads work and to not micromanage and has no intent of doing that, but hears all the time about taxes and thinks we can do a better job and they can do a better job and maybe occasions when have to put the whip to them but that is no different than any other business or other organization that he has ever been a part of and would like to see us move in that direction. He stated that the pension plan also concerns him but that needs to be included in this secure plan that is getting put together, and when see that plan and can see how the macro pieces fit together, he would be more comfortable than supporting a public facility and in the absence of a plan with the question of the pension fund out there and question of the Alerus out there, he is uncomfortable doing it and as prioritize the finite resources we have, would say that the number one priority from what people from his ward tell him is that they want property tax relief, and wants to go extra mile to give that to them

Council Member Bakken stated that Americans love to hate to pay their taxes, federal, state, and lot comes from the fact that we see some waste in the federal government and assume that it trickles down to all forms of government which isn't necessarily true, that he has worked with majority of department heads in the past and has great deal of confidence in them and believes they tried to get to the 6.5 mills but also wanted to bring a realistic budget to us and came up with a compromise, that our department heads are doing more with the same amount or less, good to say that we're going to reduce taxes and public is aware that we are aware that taxes are a problem but not necessarily just the City's problem as City gets a small part of taxes and we have lowered the taxes but have also increased the size of the city considerably, and that he will support the budget.

Council Member Kreun stated they have gone through and verified in their own way what is best for our own wards, best for the city, have looked at the Alerus problem, pension problem in great detail, and looked at the positions that we feel could be worked through, and haven't overlooked any of those options. He stated we have to do what is best for the city and the citizens of Grand Forks to deliver all the services and do it in a manner that we can do at the right cost - that this is not a principle issue but what is best for the city of Grand Forks and the citizens.

The city auditor stated that the 15% reserve is historical and is 15% of our operating expenditures and is historically based on the fact of how revenue proceeds come in so that we can meet needs when we don't collect the taxes; are working with software companies and have final demo on new software package modeling on September 30, have been able to do 6 years CIP and want to do 6 year operators and bring those back to you; that the mayor asked him to do is to bring back every financial policy we have for review by the council and one of them will be the 15% reserve, etc. and his intention is that will become a policy document within the budget process and council will get the opportunity to review and look at those things every year because they will want to sign off by the governing body that those are the policies that they want to operate under.

Council Member Gershman stated there have been a couple of comments made about the Alerus Center but can't let them stand as he has a different opinion of it - that what one has to look at with the Alerus Center is not necessarily the deficit but have to go beyond that to look at the sales tax that is generated by the Alerus Center in the city, hasn't seen the number but is much more than $143,000 in the deficit, so it creates jobs and has a macro effect in the economy, did a study and of the multiplier effect, they actually interviewed hundreds and hundreds of people over the period of a year that were visiting Grand Forks asking where did they spend the night, how many meals did you have and calculated exactly what the people spent and in the next month to 6 weeks will probably release that and we will know what the actual multiplier effect is of the Alerus Center, and believes it will be very positive and very realistic.

Council Member Christensen stated we have a deficit of $143,000 but not forget we have a quarter percent sales tax we collect to subsidize it so remember that is $50,000 a month that we're paying but remember those that come to the city to recreate in the Alerus, might shop and stay in a motel, etc. and that has some degree of multiplier effect but it doesn't change the people's lifestyle very much in most of these wards, and that is half million a year that we have directed for that entertainment venue as opposed to something different, but when you are up here and question, that's not questioning the integrity of the individual who brings the information or the motivations of the individual that brings you the information, this is business and we care about the people's business, the people elect us and the mayor approves the department heads who manage this budget and isn't to say that we think any less of any people that bring us this information, least of all the current department heads or any department heads or staff that we work with, and maybe as we go forward part of the planning process and have software that becomes the foundation of how this city is planned and would suggest before the administration adopts any software that helps us with a future budgeting CIP and/or income and expense, ask that comes to the finance committee so they can get an overview of that before staff or adm. advocates buying that type of software because you can be held hostage to your software, and moved the question. Council Member Bakken seconded the motion. The motion carried 5 votes affirmative, with Council Members Glassheim and McNamara voting against the call for the question.

The city auditor reported that the motion moved by Council Member Gershman and seconded by Council Member Christensen is to move approval of the budget with a 6.5 mill reduction. Mr. Swanson, city attorney, stated that the provisions of the NDCC do require that any preliminary budget include a detailed breakdown of estimated revenues, appropriations and expenditures, and how he would treat this motion if it passes would be the preliminary motion and follow up with a detailed motion. Council Member Christensen stated they want the revenue decreased by $280,720.00 from the mill levy reduced and the rest can stay as is.

Upon roll call the following voted "aye": Council Members Gershman, Christensen, McNamara - 3; and the following voted "nay": Council Members Bakken, Kreun, Brooks, Glassheim - 4. Mayor Brown declared the motion failed.

It was moved by Council Member Bakken and seconded by Council Member Kreun to give final approval of the 2007 budget with an amendment to reduce the cost of the Safety/Mosquito facilities by $767,479, and adopt the Annual Appropriation Bill and Tax Levy resolution and the Certificate of Levy. Upon roll call the following voted "aye": Council Members Christensen, Bakken, Kreun, Brooks, Glassheim, Gershman - 6; voting "nay": Council Member McNamara - 1. Mayor Brown declared the motion carried and the budget adopted.

APPROVE PLEDGED SECURITIES AND DESIGNATE
DEPOSITORIES OF PUBLIC FUNDS

The staff report from the finance department relating to approval of Pledged Collateral Report and Designate Depositories of Public Funds with recommendation for approval of pledged security report and designate the following as depositories: Wells Fargo, Alerus Financial and Community Bank.
It was moved by Council member Glassheim and seconded by Council Member Bakken that this recommendation be approved. Carried 7 votes affirmative.

ADOPT RESOLUTION AND SET BALLOT DATE FOR
MEASURE TO AMEND GRAND FORKS HOME RULE CHARTER

The staff report from the finance department relating to ballot date for initiated measure to amend Article III (j) of the City of Grand Forks Home Rule Charter, with recommendation to decide on ballot date for the above referenced item.

Mr. Swanson stated it was his understanding that the sponsoring committee has produced and turned in sufficient signatures so that the draft of the proposal which referred to the city council has sufficient signatures to be placed on a ballot at election date for you to determine, the second item he wishes to report is that last week he met with representatives of the petitioning committee and forwarded to the members of the council a series of documents including reworked ballot language, notices, proposals, etc. and that if the council were to choose to move forward with that proposal or if the petitioners were asking to move forward with that proposal, he believes it is in reasonably good form to do so; however, without the petitioning committee withdrawing the petitions, you do not have the ability to refuse to place the matter on a ballot and the question to be answered is, what ballot at what election.

Matt Schimanek, 409 Cottonwood Street, thanked Mr. Schmisek and Mr. Swanson for the help they have given in the past several weeks with this matter, and that there has been overwhelming support from the community when they went out and collected signatures initially on their first petition which there were some wording problems on a few of those and still turned in approx. 4200 signatures and since that time have gone out and corrected the matter and turned in an additional 300 to 400 signatures within the last week. He stated they feel this is an important matter and would like to see it on the ballot but are more than happy to withdraw the petitions they have turned in if that might be the best option available and that is going with the resolution that was drafted by Mr. Swanson. There are some technicalities there insofar as trying to get this amendment to mesh into the Home Rule Charter should it be passed, that would be done better with the resolution that was drafted, and thanked them for addressing this matter and look forward to their vote.

Dexter Perkins, 1112 Cottonwood Street, apologized for the confusion and caused more work for Mr. Schmisek and Mr. Swanson. He stated they turned in 4600 signatures and that is a huge percentage of the people that live in Grand Forks, that the people in Grand Forks are interested in pursuing what they have proposed, that there is a debate taking place if this goes on the ballot and will see whether it passes or not but clearly the sentiment of the people that have some ability to elect what kind of electricity they get in town and support renewable sources is there, and that he agrees with Mr. Schimanek's comments, that the language drafted by the city attorney is superior to theirs and more consistent with existing language and would say that if the city council wants to adopt the resolution that Mr. Swanson drafted, they are prepared to hand in a letter tonight with signatures on it saying they would withdraw the petitions they submitted.

Mr. Swanson stated if the council is inclined to move forward with the resolution that he drafted for the city council, you would literally move to adopt the proposed resolution as drafted by the city attorney's office as well as the accompanying notices and proposals, included in that motion there should be a call for specific election date, that the committee is asking you to place it on the November 7, 2006 ballot, and in order for us to do that as a practical requirement, that action has to occur tonight. If you are inclined to move forward with the documents that the attorney's office drafted, the motion would be appropriate and make it contingent upon withdrawal of the other petitions; that he has met with the committee and that they understand the mechanics of how they need to go about doing that, they do have the ability to withdraw the petitions as long as they do it in writing signed by all members of the petitioning committee; and that he is not sure that he did anything in drafting this that he felt uncomfortable with at all, and that he met with them because he was concerned that they understood that his purpose was not to alter the substance of what they had but rather was to put it in a form that he felt more comfortable with and matched our Home Rule Charter and at least clarified a couple of items and removed some concerns. He stated the council also needs to understand that some of the basic legal issues that he raised last week still exist, whether it is on their draft language or his draft language; the resolution that he drafted for the council to consider identifies why you acted the way you did and that was because of some inconsistencies in the original draft, and if you are inclined to move that way, suggested that they move the adoption of the resolution, the notices and proposal to amend the Home Rule Charter, establish a date for the election and make it contingent upon the withdrawal of the filed petitions by the petitioning committee.

Council Member Gershman moved the adoption of the resolution, the notices and proposal to amend the Home Rule Charter, establish November 7, 2006 as the date for the election, contingent upon withdrawal of the filed petitions by the petitioning committee. Document No. 8974.1 - Resolution. Council Member Kreun seconded the motion.

Mr. Swanson stated the technical approach to the problem you have before you is by not acting upon the two petitions that were submitted by the committee this evening, you have effectively determined that those petitions could not be heard at an election on November 7, 2006; if they failed to withdraw those petitions it would be back on an agenda for you to determine an election date sometime no sooner than sixty (60) days and no later than two (2) years, and that is the window of opportunity you have to call for an election but by passing the motion as made by Council Member Gershman he believes that you have done is met the goal of the committee in getting it on the November 7, 2006 ballot in a form that they are accepting them; that you are not acting on their petitions, you have heard the representations that they would withdraw those based on the passage of the resolution as moved by this council; that you are not compelled to vote in favor of the motion.

Council Member Gershman stated this is not an endorsement by the city council of this resolution but recognizing that thousands of citizens wanted to put it on the ballot and that is what we are doing, and that the debate will ensue and the public will make up their mind on November 7.

Council Member McNamara stated when this issue first came up there was question by Mr. Swanson of whether the council would amend our own charter to have all ballot initiatives submitted to the city attorney so that we wouldn't go through this again and would be an additional motion. Mr. Swanson stated he would prefer they not tie it to this action but it is not germane to the matter before you, it is something his office has started working on and would like to bring it forward to you in a more complete form than it is right now, and thinks it merits from the city's perspective and from the perspective of those passing petitions, difficult to reach the end of the road turning your petitions only then to learn that there is a problem with them and they have to go back out and retrace their steps or take alternative steps and sees that as an appropriate step and would prefer that the council give them an opportunity to do some work on that and bring back what they think is a well thought out, well drafted proposal.

Council Member Bakken stated that alternate energy is a good thing, but has some concerns about squeezing it in November election because not sure that either side is going to have sufficient time to educates everybody on it thoroughly and doesn't look at what the cost is going to be and from that standpoint might want to wait until they have more time to educate everybody.

Council Member Kreun stated that he thinks it affects the city because there are some indications that we are going to monitor this and enforce this and some things that aren't clear, that maybe the petitioners and the electrical companies would like to have a work session or some type of information gathering system so they can look at this to see how this affects our role as city council members and if we can actually do some of the things that are on there, and would like this on a work session or committee of the whole meeting as information.

Upon call for the question and upon voice vote, the motion carried 6 votes affirmative, Council Member Bakken voted against the motion.

RECEIVE TABULATION OF BIDS, ESTIMATES OF TOTAL
COST AND AWARD CONTRACT, SEWER PROJECT NO. 6012,
AND WATERMAIN PROJECT NO. 6013

The city auditor presented and read tabulation of bids which had been received and opened on August 28, 2006 for Sewer Project No. 6012, District No. 449, and Watermain Project No. 6013, District No. 293, sanitary sewer and watermain for Desiree Drive, indicating that Molstad Excavating, Inc. was the low bidder based upon their bid in the amounts of $36,880.00 and $11,940.00 respectively, for a total combined bid of $48,820.00: Document No. 8975 - Bid Tabulation.

The city engineer's estimates of total cost for Project No. 6012, Sewer District No. 449, in the amount of $ and for Project No. 6013, Watermain District No. 293, in the amount of $ , were presented and read.

The staff report from the engineering department relating to consideration of bids for Project No. 6012, Sewer District No. 449, and Project No. 6013, Watermain District No. 293, sanitary sewer and watermain for Desiree Drive, with recommendation to award contract to low bidder Molstad Excavating, Inc. in the amount of $48,820.00.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that this recommendation be approved and the resolution awarding the contract to Molstad Excavating, Inc. was presented and read: Document No. 8976 - Resolution. Upon roll call the following voted "aye": Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor Brown declared the resolution adopted and the contract awarded.

ADOPT RESOLUTION APPROVING PLANS AND
SPECIFICATIONS AND ADVERTISEMENT FOR BIDS,
WATERMAIN PROJECT NO. 6039, DISTRICT NO. 295
The city engineer's estimate of total cost of the construction of watermain on North 48th Street, 1600-1800 blocks, in the amount of $ , was presented and read.

The staff report from the engineering department relating to plans and specifications for Project No. 6039, District No. 295, watermain on North 48th Street, 1600-1800 blocks, with recommendation to approve plans and specifications for this construction and further that the city auditor be directed to advertise for bids on the project.

Council Member Glassheim introduced the following resolution which was presented and read: Document No. 8977 - Resolution.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that the recommendation be approved and that the resolution approving the plans and specifications be adopted. Carried 7 votes affirmative.

ADFOPT RESOLUTION CREATING SPECIAL ASSESSMENT
DISTRICT, ACCEPT ENGINEER'S REPORT AND ADOPT
RESOLUTION OF NECESSITY FOR PAVING PROJECT NO.
6026, DISTRICT NO. 626
The staff report from the engineering department relating to creating special assessment district for Project No. 6026, District No. 626, paving Columbia Park 32nd Addition, with recommendation to create the assessment district, approve the engineer's report, including estimate of cost, an assessment district map; and further that we direct engineering department to prepare detailed plans and specifications and advertise for construction bids, and that we declare intent to sell bonds to finance these improvements.

Council Member Glassheim introduced the following resolution creating the assessment district, which was presented and read: Document No. 8978 - Resolution.

The city auditor presented and read the engineer's report on Paving Project No. 6026, District No. 626: Document No. 8979 - Report.

Council Member Glassheim introduced the following resolution of necessity, which was presented and read: Document No. 8980 - Resolution.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that the recommendation be approved and the resolution creating the special assessment district, the engineer's report and the resolution of necessity for Paving Project No. 6026, District No. 626, be accepted and adopted. Upon roll call the following voted "aye": Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor brown declared the motion carried and the resolutions adopted.

ADOPT RESOLUTION CREATING SPECIAL ASSESSMENT
DISTRICT, ACCEPT ENGINEER'S REPORT AND ADOPT
RESOLUTION OF NECESSITY FOR PAVING PROJECT NO.
6033, DISTRICT NO. 628

The staff report from the engineering department relating to creating special assessment district for Project No. 6033, District No. 628, paving South 38th Street (north property line of Lot 7, Block 1 of Columbia Park 27th Addition to the Southend Drainway), with recommendation to create the assessment district, approve the engineer's report, including estimate of cost, an assessment district map; and further that we direct engineering department to prepare detailed plans and specifications and advertise for construction bids, and that we declare intent to sell bonds to finance these improvements.

Council Member Glassheim introduced the following resolution creating the assessment district, which was presented and read: Document No. 8981 - Resolution.

The city auditor presented and read the engineer's report on Paving Project No. 6033, District No. 628: Document No. 8982 - Report.

Council Member Glassheim introduced the following resolution of necessity, which was presented and read: Document No. 8983 - Resolution.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that the recommendation be approved and the resolution creating the special assessment district, the engineer's report and the resolution of necessity for Paving Project No. 6033, District No. 628, be accepted and adopted. Upon roll call the following voted "aye": Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor brown declared the motion carried and the resolutions adopted.

APPROVE AMENDMENT NO. 1 TO PROJCT NO. 5983,
REHABILITATE PUMP STATION NO. 8

The staff report from the engineering department relating to Amendment No. 1 to engineering services agreement with Webster, Foster & Weston for Project No. 5983, Rehabilitate Pump Station No. 8, with recommendation to approve Amendment No. 1 with Webster, Foster & Weston for construction administration services in the amount of $45,495.00.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that this recommendation be approved. Upon roll call the following voted "aye": Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor Brown declared the motion carried.

SET PUBLIC HEARING FOR APPLICATION TO MOVE
BUILDING FROM MINTO, ND TO 812 SOUTH 10TH STREET

The staff report from Inspections relating to hold public hearing on September 18, 2006 for moving permit application to move dwelling from Minto, ND to 812 South 10th Street, with recommendation to approve the public hearing for September 18, 2006.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that this recommendation be approved. Carried 7 votes affirmative.

APPROVE URBAN DEVELOPMENT REORGANIZATION

The staff report from the urban development director relating to Urban Development reorganization, with recommendation to approve the reorganization as proposed.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that this recommendation be approved. Carried 7 votes affirmative.

APPROVE COMMUNITY DEVELOPMENT BLOCK GRANT
PROGRAM FOR 2007

The staff report from the urban development director relating to 2007 Community Development Block Grant Program (CDBG), with recommendation to discuss and approve a tentative allocation of 2007 CDBG funds.

Council Member Glassheim moved that the 2007 CDBG funds, both Public Service and Bricks and Mortar, be restored to the original amounts proposed by Urban Development ($200,000 in Pubic Service and $287,000 in Bricks and Mortar; that we establish a permanent low and moderate income special assessment Assistance Fund funded at $100,000 a year from the sales tax Infrastructure Fund (2169); that the Urban Development Department recommend eligibility guidelines, a sliding scale based on income and procedures for using this fund to be adopted by the city council; that the funds be used to pay annual assessments on qualified projects for qualified property owners; that funds not expended each year be retained in the Fund and carried forward from year to year, subject to city council appropriation; and that the council request Urban Development Department to meet with nonprofits over the next four months to determine whether some nonprofits can benefit from co-locating and what role the City can play in assisting that process. Council Member Gershman seconded the motion.

Council Member Kreun stated that being this is the first year is whether they should do this for one year to see how it works before making it permanent as we are setting a new line item in the budget and questioned whether it should be permanent or not. Council Member Glassheim stated that the council always has the option in any future year of changing it if it is not working and as planning for these projects and once sell bonds the $100,000 is set aside to pay off bonds so really don't want it to be one year and as departments move ahead with plans for infrastructure projects, they would want to know whether the council is committed to it and would prefer to keep it. Council Member Kreun moved to amend the motion by deleting the work "permanent"; seconded by Council Member Christensen. Upon voice vote the motion carried 6 votes affirmative, Council Member Glassheim voting against the motion.

Upon call for the question as amended and upon voice vote, the motion carried 7 votes affirmative.

ADOPT RESOLUTIONS DIRECTING SPECIAL ASSESSMENT
COMMISSION TO ASSESS SPECIAL ASSESSMENTS ON AN
ESTIMATED COST BASIS

The staff report from the finance department relating to directing Special Assessment Commission to assess special assessments on an estimated cost basis, with recommendation to direct that special assessments be levied for the payment of the entire cost of work completed or partially completed for the following projects and that the city auditor be directed to notify the chairman of the Special Assessment Commission:
Watermain Project No. 5534, District No. 288 - $51,200 - Document No. 8984 - Resolution.
Storm Sewer Project No. 5819, District No. 439 - $113,330.00 - Document No. 8985 - Resolution.

Council Member Glassheim introduced the resolutions certifying the total cost of the projects with estimated costs and directed that the special assessments be levied for the payment of the entire cost of said work and that the city auditor be directed to notify the chairman of the Special Assessment Commission.

It was moved by Council Member Glassheim and seconded by Council Member Bakken that these resolutions be adopted. Carried 7 votes affirmative.

APPROVE BILL LISTING AND ESTIMATES

Vendor Payment No. 06-17, dated September 1, 2006, totaling $3,827,005.46, and Estimate Summary in the amount of $2,043,589.59, were presented and read.
It was moved by Council Member Glassheim and seconded by Council Member Bakken that these bills and estimates be allowed and that the city auditor be authorized to issue warrants in payment of the same. Upon roll call the following voted "aye": Council Members Brooks, McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 7; voting "nay": none. Mayor Brown declared the motion carried and the bills ordered paid.

APPROVE MINUTES AUGUST 21, 2006

Typewritten copies of the minutes of the city council meeting held on Monday, August 21, 2006 were presented and read.

It was moved by Council Member Brooks and seconded by Council Member Bakken that these minutes be approved as read. Carried 7 votes affirmative.

COMMENTS BY CITY ADMINISTRATOR

Rick Duquette, city administrator, thanked the city council and mayor for adoption of the budget this evening, that it has been long diligent process and appreciates the comments tonight, we do attend to the people's business and take it very seriously and looks forward to continue to work with the city council. He also thanked John Schmisek and Maureen Storstad for their work and also the department heads and thanked the Mayor for his vision and commitment.

MAYOR AND COUNCIL COMMENTS

1) Council Member McNamara stated he wanted to touch on the Alerus, that in his comments it certainly wasn't questioning the worth of the Alerus because he does appreciate its worth to the community, and his question was more concerning their ability to forecast accurately in the budget, and wanted to make sure that was clarified.

2) Council Member Christensen stated that he agreed with Council Member McNamara, that the issue has nothing to do with the integrity of the people that have been sitting on the Alerus Commission and have had problems managing the Alerus and are going to have continued problems managing the Alerus esp. in light of the construction and the change that is going on at the University of North Dakota. That we have to be attuned to the fact that we have this $100 million community asset soon to have a $40-50 million hotel entertainment complex next to it, the biggest asset we have in this community other than our people. He stated he would like to have complete briefing on the finance/development committee agenda as soon as possible regarding software being looked at and how to implement it and show them future funding and future program activities, or have a special session of the council to see the software. The city auditor stated it is software that council will run by their recommendations.

3) Council Member Bakken stated our department heads have done a good job on the budget, and Mr. Glassheim did good job in his motion, always ways we can improve and look for efficiencies, and have a lot of things coming up on our plate and a lot are bid issues, landfill, and with help of department heads can solve them.

4) Council Member Kreun reported they have a Service/Safety Standby Committee at 4:30 p.m. on Thursday, September 7, 2006, with an update on the landfill. He stated he has only been to one meeting of the Alerus Commission but is receiving information and what has been brought up re Alerus has been addressed and they are having the same concerns as this group and analyzing it and trying to bring this body a good solution.

5) Council Member Gershman reported he had a question on the radio by a citizen, asking how much property tax we get from the sales tax, that he called Ms. Jerath for the information, the property tax relief that we get from the sales tax that people pay on products that they buy is equivalent to 33 mills and that is just property tax relief, not economic development or infrastructure, and is $147.00 on a $100,000 home.

Council President Gershman and Mayor Brown welcomed Mike McNamara to the city council and presented a cake with an American flag and "Welcome Back Mac" and stated they are glad he is back safely and going to be an asset to the city.

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

Approved:
______________________________________
Michael R. Brown, Mayor