City of Grand Forks, North Dakota

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Minutes of Grand Forks City Council/Committee of the
Whole - Monday, November 27, 2006 _______________

The city council of the city of Grand Forks sitting as the Committee of the Whole met in the council chambers in City Hall on Monday, November 27, 2006 at the hour of 7:00 p.m. with Mayor Brown presiding. Present at roll call were Council Members McNamara, Glassheim, Gershman, Christensen, Bakken, Kreun - 6; absent: Council Member Brooks - 1.

Mayor Brown commented on various events during the past week and upcoming events:
He stated it is great to see the lights coming on throughout the community, that last week we lit the City Christmas tree near the overpass, and tonight President Kupchella lit the UND green tree. Christmas in the Park is underway in Lincoln Drive Park and will continue through December 31.
Congratulations to Coach Lenin and the UND football team for a thrilling game on Saturday, and good luck this weekend against Grand Valley.

2.1 Election results from November 7, 2006 election to amend the home rule charter._______________________________________________________

There were no comments.

2.2 Matter of 2006 sidewalk warrants.

There were no comments.

2.3 Change of pension asset allocation model.
Mark. Hall reported at the last Pension meeting the trustee, Alerus Financial, presented a
proposal that each manager be utilized for their specific strengths; that right now the Pension Plan
is utilizing three managers for the investment portfolio and two of those three managers are
presently managing assets across most of the asset classes. There is some concern that these
manager processes are overlapping and it can cause some inconsistencies with the overall
investment policy that has been adopted by the City; and that they propose that each manager be
utilized for their specific strengths, the dollars would then be allocated using the investment
policy and would allow for greater flexibility as market conditions change and be able to adjust to
those changes. He stated what they want to do and what was spelled out to the Pension
Committee, and has also been somewhat reaffirmed by John Schmisek, city auditor, when he
attended a meeting of finance managers, and would help eradicate some of the manager
diversification issues that can arise regarding inappropriate structure of asset allocation insuring
that the asset allocation is maintained and to provide for the proper correlation of investments as
the Plan moves forward.. He noted that is a summary of what was presented to the City Pension
Committee.

Council Member Glassheim stated he believes the point is to reduce the risk and increase the return, and if there will be a recommendation for any plan for the long range on the downside, and if there would be discussion on that at a later time. Mr. Hall stated that in October they proposed an asset allocation to be used, that went to the Pension Committee and was approved at their level, that they do meet with the City every 3 - 4 months with an update. The investment policy as it relates to the asset allocation is reviewed annually so that if anything comes up the Committee would be aware of it and can make changes at that time or look for recommendations to the adjustments.

Council Member Christensen stated there was a study done that explains what possibly could be done to make up for the shortfall; that 70 to 80% of all pension funds are probably underfunded statistically, but the bigger issue for this City and for future councils is we have a big group of people soon to retire, that we are putting money in every year because we are funding for people and would hope that you would have the earnings sufficient on the assets (that we don't have anybody else joining this plan, as it is closed) when there are going to be payouts of $3 to $3.5 million or better per year and doesn't appear to be earning that; that we adopted a policy, a mortgage idea funding it over 29 years and putting in excess contributions, $1.3 million/year, and our idea is how much it's going to be for payout 10 years from now, as about half or 70% of the people in the plan are receiving benefits, and that is the math model we hope to get built for us in the next quarter so can give a better report.

Council Member Kreun stated that we have been doing that for quite some time but the biggest issue is the assumption that we are making for the next 20 years because it will take longer than that for those people to work through this plan and be totally paid off.

Council Member McNamara stated that we are currently funded at 72%, fairly old number, and in the process of collecting that data and being able to discuss remedies for that, and getting our assumed rate of return back in line with historical norms for the market, and should have that back to council fairly soon.,

2.4 Acquisition of easement at 813 Lewis Boulevard, Riverside Manor Property, GF Flood Protection Project.________________________________________
Council Member Kreun stated this was one of the last pieces of the flood protection project, and
have had an agreement to go into the property and utilize it and build the floodwall and that one
of the questions they have is the City as mortgagee authorizing the release for those funds to that
partnership rather than applying it to the outstanding mortgage.

Greg Hoover, urban development director, stated that he understands that with this piece we are
in a junior position and if we asked for those proceeds to be applied to our loan, the senior lender
would probably take that position also and we probably wouldn't get any of that plus it is also part
of the package deal that we are trying to work up so we can keep this as affordable housing. He
stated they will also have another item coming up later on the loan we have on that particular
property; they have a new owner, MDI 35 and that general partner is Grand Forks Homes and
their intent is to take that money and to build additional parking at that site, money will not be
leaving the community.

2.5 Project Concept Report for Project No. 5988, paving 40th Ave.S. (S. 20th St. to S. Washington St.)_______________________________________________
Al Grasser, city engineer, reported they had hired CPS to do the Concept Report.
Melissa Knutson, CPS, stated that development of 40th Avenue South from South 20th Street on
the west to South Washington Street on the east is to facilitate the development and will provide
major link in the city's transportation system. Last year constructed 40th Ave.S. from Ruemmele
Road to South 20th Street and this link will provide a direct route all the way to Belmont Road.
The project will include the construction of a concrete street with curb and gutter, a concrete
pedestrian walk on the north side connecting existing pedestrian walks on S. 20th Street and on S.
Washington St. and also a concrete shared use path constructed on the southside of 40th Ave.S.
that will connect existing path at S. Washington Street to the existing bituminous path that runs
along the southend drainway; the project will include street lighting, underground utilities, the
project is programmed and will be part of the ND Dept. of Transp. bid letting on May 18, 2007
and if approved, constructed during 2007. Preliminary estimate included construction cost of
$1.7 million, with $1 million of federal funding from the Urban Roads Program; they are also
looking to provide us with additional funding, if available, for an additional $100,000; eligible
costs end up being funded at a rate of 80.93% and opportunity to develop with federal funds. She
stated they were asking for approval of the Concept Report and a request for executive decision
that will be needed as part of the Dept. of Transportation's approval process..

Council Member Glassheim questioned what happens when shared use path ends abruptly. Mr.
Grasser stated the shared use path is the new term for bikepath, that it ties into Washington Street
on the east and into the other asphalt path that goes along the drainway on the west, that it is 10 ft.
wide and was funded with federal funds. Paths are signed for no motorized vehicles.

2.6 Create special assessment district for Project No. 5988, Dist. No. 627, paving 40th Ave.S. (S. 20th St. to S. Washington St.)___________________________
There were no comments.

2.7 Create special assessment district for Project No. 6059, Dist. No. 453, trunk storm sewer crossing on 40th Ave.S. (1600 block).______________________

There were no comments.

2.8 Change Order #6 for Project No. 5703, 47th Ave.S. Reconstruction from Washington to Belmont Road and associated budget amendment.______
There were no comments.

2.9 2006 Holiday bonus hours.
Daryl Hovland, HR director, presented request brought forward by Mayor Brown and Council Member Brooks, and on behalf of city employees thanked the council and mayor and also appreciate change that was made last year to allow hours to be used up to July 1.

2.10 Mosquito Control 2007 bid recommendations.

There were no comments.

2.11 Mosquito Control Commercial rate ordinance amendment.

Council Member Kreun stated that the report included several exemptions, that the

Airport is paying a flat fee of $2500 and asked if that will continue. Don Shields, Health Department, stated that the Airport Authority and the Park District are giving us a voluntary contribution, Airport Authority of $2500 and the Park District of $5,000, that they are recommending in the ordinance which patterns itself after the storm sewer ordinance passed approx. a year ago, to take a system that was on a per meter basis and bring it to an acreage type basis, that large land areas pay more; the formula for the Airport didn't seem to make sense as there are approx. 6400 acres and as based on the formula would amount monthly amount of $10,000, and recommendation was to use a fixed rate for the airport, that the $2500 was a fair amount for the service they are providing at the airport, and fees could be adjusted yearly.

Council Member Kreun stated that public and private cemeteries are sprayed and they receive benefit and suggested they consider that using storm water as a model and bring back an amount compensating us for costs as they should have responsibility for that.

Council Member Christensen suggested the area they are spraying at the airport on sq. footage using formula and should set up a fee with yearly adjustments and have it included in the ordinance rather than a voluntary act as we are providing a service, and asked for a recommendation as to the appropriate fee for cemeteries and include that also. Mr. Shields stated they would bring back recommendations next week; and noted that they also do larviciding at the airport as well as spraying because do comprehensive mosquito control program out there.

Council Member Gershman stated that you have an issue when you are that far out of migration of mosquitoes and can't afford to spray as much as they need; Mr. Shields agreed and that was why they felt that the $2500 was a fair representation as can't possibly provide the control there as they do within the city limits because of the distance issue, but will go back and review that. He stated in terms of the cemeteries they are looking at on a sq.ft. basis - the cemetery on the corner of 32nd Ave.S. and S. Washington St. based on their formula (3.5 cents per 1,000 sq.ft.) would be about $40.00/month, that there are 4 different entities on Gateway and that would be about the same for all of them, and will also take another look at that and make a recommendation.

Council Member Bakken suggested for airport and cemeteries to cover our costs of materials as there is some benefit to them, as chemical costs are going up and should recover those costs.

2.12 2007 Chemical bids for water treatment plant.
There were no comments.

2,13 Enhance existing bus service for Grand Forks.
Todd Feland, director of public works, stated that MPO is assisting the City in doing the
Transportation Development Plan (TDP) and they looked at service improvements and at
modifying some of their services, that through that Plan got rid of tripper services as city entity
and transferred those over to Dietrich Bus Service, and combined the dial-a-ride and senior rider
system under one system and did some reductions on the City's side to save some money. He
stated they also looked at servicing the Industrial Park area in the western corridor of the city as
service improvements, and another improvement the riders have wanted is some limited service
on Sundays, currently do not have any Sunday service. During the week they have mainline
service from approx. 6:00 or 6:30 a.m. to approx. 6:00 p.m. and have a night service that runs
from 6:00 to 10:00 p.m., on Saturday only mainline service from 10:00 a.m. to 6:00 p.m. and
night service that continues from 6:00 p.m. to 10:00 p.m. and the gap in the morning is another
issue the riders have raised where they would like to see service improvement. He stated we get
an urban allocation of funds from the federal government which is approx. $750,000 to
$800,000/year to run our urban system for operation and maintenance; they also created two
programs, one is New Freedoms and NDDoT received money of approx. $250,000 to $300,000
annually through the Transportation Bill which gets us through 2009. He stated that Earl Haugen,
MPO, has worked with other metropolitan areas in ND (Bismarck and Fargo) and how they are
going to allocate this money between the 3 metropolitan areas.

Mr. Haugen stated we have done some service reductions creating more efficiencies within the
department so that monies could be set aside as the community grows, plan was to do some of
these reductions so could build up some revenues so as expanded didn't have to ask for more
funds from the taxpayers or the city council, the revenues have been accumulating in the
department's budget so not ask for addition mill levy increase or general levy increases to
department. He stated the programs that Congress created for FTA are very specific to type of
uses - and working with Human Services through Coordination Plan that was brought before
council in the last month that was adopted were identified gaps they would like us to try to fill: 1:
covering areas to the west of community, S. 42nd Street and Industrial Park; 2) early morning on
Saturdays (in 1995 cut service on Saturdays to help make up for budget constraints) and now feel
in a position with additional federal funds available to bring back those services; and 3) Sunday
service and what they are proposing is skeleton night service type fixed route system with
complimentary dial-a-ride service available, would not be the full routes they run Monday
through Saturday but would be one-hour night service that circulates around Grand Forks and
would have the complimentary dial-a-ride service as well.

The question was asked as to how long they can sustain the new service without going into a
deficit. Mr. Haugen stated he believe they will be able to support it, these programs came about
through the adoption of the new authorization bill that authorizes federal transportation funding,
and in a smaller increment is increase in the funding we receive on our 5309 Program, regular
urbanized formula grant, and in a couple years from now the funds will be built up enough that if
we were to lose these funds we will have had replacement dollars available for us, we always
have the option that if these services are not making the grade we could either eliminate or
modify the services.

Council Member McNamara asked if they were able to evaluate the demand for those routes. Mr.
Haugen stated they would perform similar to our existing routes, the difficulty they have on the
Sunday service is that the night service hours are from 6:00 p.m. to 10:00 p.m. and would be
operating this more during the normal day hours so would suspect that perhaps demand or use
would be a little higher than night service. Use of night service is 600 per month on average;
and dial-a-ride program would also be provided on Sunday but would like to have more people
using fixed route, better for them and for us, much cheaper and more efficient service.

Council Member Christensen noted that it was $133,000 city-share (from 5500, and cash balance
in that fund is $436,000), and asked how much that fund has grown each year because spending
down our reserve and would like more detail on ridership on this before acting on this next
Monday - that if add service and then is discontinued there is an outcry or perhaps move it to a
work session of the council. Mr. Haugen stated they would add that information for the next
meeting; and that there is an urgency as requesting through the MPO process to get to Bismarck
on December 15, competitive grant process as Fargo will be requesting some of these funds,
Bismarck not in a position to apply for them, and absence of us requesting, Fargo will be the only
other applicant and we would not be in line for any grant this year. He noted at the last meeting
council approved a work request for MPO to figure out how they are going to service the 42nd
Street and Industrial Park areas, and there is a grant request which is the most costly operation out
there and depended upon whether we get our full grant request or portion, that will help us
determine how to service that area, but will come back by March with recommendation as to how
to service those two growing areas; one of the options will not be the full route regular operating
12 times a day, could implement a worker tripper service where only operating during peak
demand times so there is an itemized list of alternatives but the one that provided the most cost
would be the one identified as the $85,000 grant request since they wanted to capture as much
funds as possible. It was noted that if they approve next Monday it would authorize them to go
forward with the grant.

Roger Foster, Public Transportation, reported with the night bus is that it is 600 per month
because they only have one bus out there, so should be an accurate number for Sunday also. Mr.
Gershman stated it was important to get the numbers and take a hard look at this because he
agrees that once you start something and if take it away if it doesn't work but are seeing that the
Industrial Park has thousands more workers today than it did 10 years ago and there are many
people looking for ways to get to work and they are also doing a lot of hiring out there, could be a
good move for the city and for businesses and industrial growth.

Council Member Bakken reported that they took some routes away one time and very painful
deal, would like to know what it costs us for a person to ride our system including all federal
funds, matching funds, etc.

Mr. Feland stated the savings on transferring the school tripper to Dietrich was $30-35,000
annually and by combining the senior rider and the dial-a-ride saving about $15 to $20,000
quarter and about $100,000 on those two; the combined service on how we are doing it and there
are some concerns about peak times as sometimes the vans are filled up and that the will be
meeting sometime in the next couple weeks to try to rectify that, that he hasn't received a lot of
calls but in talking to some of the users will talk to the long time service provider to discuss that
issue. Mr. Glassheim stated the concern about the cost is that this extra $133,000 if that is money
we will have annually. Mr. Feland stated that in looking to federal funding now compared to
mid-90's we're upwards of $800,000 and have received allocations on buying new buses, federal
government pays about 83% of those buses, and that in another thing that we receive that we
didn't get 10 years ago. The State funding has increased, and couple years ago the State
government increased fees for licensing that goes to public transportation and that increased our
funding also, that we have raised some of the fees but have received more federal and State
money; our mill levy has gone up and we have transferred some services and have saved money,
but wages have gone up, fuel and that public transit seems to be healthier than it ever has been in
Grand Forks and on the combined service, the jury is still out.

Council Member Gershman stated he thought it would be helpful to see a report on ridership.
Mr. Feland reported that Mr. Haugen should be able to bring back a 5-year forecast of what it
looks like, and will bring that back.

Council Member Christensen stated that perhaps it is time for a briefing of the council on a
Wednesday session of what it costs per rider, get ridership summary and get update as to
consolidation and asked to do that in December. It was noted that they could.

3. INFORMATION ITEMS

3.1 Statement of Changes in Cash Balances as of October 31, 2006.
Information only.

ADJOURN

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

Respectfully submitted,

Candi Stjern
Acting City Auditor