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19917
April 23, 2007
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
April 23, 2007

The city council of the city of Grand Forks, North Dakota met in special session in the council chambers in City Hall on Monday, April 9, 2007 at the hour of 7:00 o’clock p.m. with Mayor Brown presiding, pursuant to call by the city council. Present at roll call were Council Members Brooks, McNamara, Glassheim (teleconference), Gershman, Christensen, Bakken (teleconference), Kreun - 7.

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.

HOLD PUBLIC HEARING AND DENY APPLICATION FOR
PROPERTY TAX EXEMPTION FOR NEW BUSINESS BY
AURORA MEDICAL CENTER, LLC

The deputy city auditor presented the matter of continuation of public hearing on an application for property tax exemption for new business by Aurora Medical Center, LLC at 1451 44th Avenue South, Unit C.

Mayor Brown opened the public hearing and asked those requesting to speak to keep their comments under two minutes and to present new information, and that everyone has the right to speak..

Lisa Warner, 1507 Chestnut Street, presented a petition signed by 3% of the population that states "I support the tax abatement initiative for economic development by Aurora Hospital proposed before the City". In addition she included samples of direct statements communicated on-line through the Grand Forks Herald and other community blogs that verbalize support. She presented the petitions to the city auditor.

Nancy Schulz, 304 22nd Street NW, East Grand Forks, MN, stated the building of a for-profit hospital in Grand Forks affects the whole region, including East Grand Forks, and that she is a reimbursement specialist at Altru Health System and has worked in federal government reimbursement; there has been discussion about the $7.5 Medicare reimbursement being lost if they lose that sole community provider, and another reimbursement of $2.5 million that they will be losing and would be a $9.5 million reduction in reimbursement. The sole community provider status is very easily lost, that it takes one Medicare admission that is admitted to the hospital that stays in the hospital for 4 days and have one Medicare patient admission every day throughout the year, basically would amount to $47.5 million for the 5-year time frame that we are talking about for the tax abatement, and asked that they take that into consideration when talking about economic development.

Roger Kvamme, 2217 Springfield Court, stated he believes that competition among two hospitals will eventually lead to higher medical expenses and labor costs; that he is concerned about the actual amount of care that the Aurora Hospital would be willing to provide to patients who are either uninsured or needy. He stated due to a recent experience he had with the Aurora Medical Center, that they were more concerned about payment issues rather than the care of the patient. He stated he is very concerned about the health care that will be provided and what affect it will have on the community.

Mark Bickler, administrator of Good Samaritan in East Grand Forks and Warren, MN, and questioned if the Aurora Hospital would take Medicare assignment, that he deals with senior citizens and Medicare assignment is a very important issue, and has not seen anything in writing as to whether or not the proposed Aurora Center would take Medicare assignment from senior citizens, and is concerned about staffing as there is a very serious nurse staffing shortage. (Medicare assignment is an issue where the provider, the doctor or the hospital would take a lower rate than what is charged, if the hospital does not take Medicare assignment, people would have to make up the difference.) He stated they received a letter last year that the Stadter Center, CPC, Center for Physic Care, would no longer in-patient any of their senior citizens that live in the nursing homes for psychiatric treatment or Alzheimer's people to psychiatric care for their behavior management, dementia issues, medication management, etc. and have been unable to get anyone back into the Stadter Center for those reasons.

Mayor Brown closed the public hearing.

Council Member Brooks moved that we approve a tax abatement for the Aurora Medical Center for two years, first year 100% and second year 50%. Council Member McNamara seconded the motion.

Council Member Christensen asked to be recused and it was so moved by Council Member Gershman and seconded by Council Member McNamara. Carried 6 votes affirmative.

Council Member McNamara stated after talking with people in the community presented five points he would make: 1) that people would like to have a choice in terms of medical care; 2) Altru has a record and has to stand on it and nobody wants to see Altru substantially injured in this community; 3 and 4) people believe the economic impact of another medical facility would be positive both in terms of tax base and in terms of growing jobs; 5) limited competition provided by a 70-bed facility would be good ultimately, and wouldn't say that any of these points are without contention or detractors but those are basis that he would second Mr. Brooks' motion.

Council Member Gershman stated his decision is not based on retribution or complaints, not elected to evaluate the quality of health care nor elected to arbitrate disagreements between doctors in our community. One of the guidelines in Grand Forks has been that 50% of the business, patients, should come from outside of 50-mile radius and based on his analysis of the numbers this doesn't seem possible, Aurora's market share would have to come mostly from an existing market in town and within the 50 mile region, and that would not be an expansion of the market but a transfer within the market, and therefore the Aurora does not pass the economic development test for him, that he has other areas of concern, that he has found it difficult to develop compelling reasons to offer a tax abatement, and is opposed to offering a tax abatement.

Council Member Kreun reported that this is strictly an abatement for a hospital, did his own research independently and the number one issue is that there is a moratorium on hospitals in MN at this time except if you show public interest, and where new hospitals are needed to provide timely access to care or access to new or improved services, financial impact of a new hospital or hospital beds on existing acute care hospitals that have emergency departments in the region, how the new hospital or hospital beds will affect the ability of existing hospitals in the region to maintain existing staff and the extent to which the new hospital or hospital beds will provide services to non-paying and low income patients relative to the level of services provided to these groups by existing hospitals in the region. None of the region hospitals in the area (Park River, Northwood, Mayville, Bemidji, Thief River, Roseau and Altru) have more than 60% occupancy and if apply that number to the criteria for public interest review of a hospital that is where asked what to do as far as spreading the customer base. He stated the only way we can bring more people into this region is from a long ways away and if that is possible but is part of our criteria.

Council Member Brooks stated this is strictly about the tax abatement, and in his review it qualifies and he supports it, the issues of concern are that this is not taxpayer dollars going into this, not about other issues as hurting health care, that we don't make those decisions, and hopes Aurora will continue with this and that both entities will embrace the competitive nature and see health care continue to grow and prosper because helps the whole region.

Council Member Glassheim stated he doesn't see that it is the city council's job to encourage new businesses to compete with existing businesses, that he hasn't seen any review of business plan put forward by Aurora to see whether it is sound or speculative, thinks it is likely that a new hospital will provide care and health education that isn't particularly profitable, and after reviewing the numbers provided by those organization has concluded that the Aurora will not provide new services, new patients or new wealth through its business, and not go forward with something new until there is clear view.

Council Member Bakken (very hard to hear comments), but is in support of the motion.

Council Member McNamara stated several weeks ago the idea of a conditional abatement was discussed, and asked if they would consider any conditions to support the motion or if that is out of the question.
Council Members Gershman and Brooks stated they would not support it.

Upon call for the question on the motion to grant two year tax abatement, first year 100% and second year, 50%, and upon roll call vote, the following voted "aye": Council Members Brooks, McNamara, Bakken - 3; voting "nay": Council Members Glassheim Gershman, Kreun - 3; Council Member Christensen recused. Mayor Brown stated as an employee of Altru Hospital and because of a conflict could not vote to break the tie vote.

Mr. Swanson, city attorney, advised that in order for a resolution to be passed by this body it has to have a majority of those voting, and 3 to 3 vote does not attain a majority; that with the mayor declaring a conflict of interest, he cannot vote to break the tie, and the motion fails for lack of a majority vote.

APPROVE 2007 SPRINGFEST REQUEST

The staff report from the city administrator relating to the 2007 Springfest, with recommendation to approve the request by Suite 49 for a noise variance and a special license to sell alcoholic beverages at designated premises, and to request a special city council meeting for Monday, April 30, to take these actions prior to the May 5 date of the event.

Rick Duquette, city administrator, reported that from past experiences they had a committee working on the Springfest event and that last year Suite 49 took over the management of the event and applied to council for a noise variance and a special alcohol event license to serve alcohol in University Park, that they have had a series of operational meetings with the Park District, the police department, Suite 49 staff and they are here to respond to questions that you may have.

Katie Brown and Jessie Thorson, Suite 49, were available for questions.

Council Member Gershman thanked them for stepping up again this year, that he will recuse himself from voting on this but had one comment, that it came to his attention that some people were cutting their armbands off and taping them on someone else, then going back in for another wristband, that police department did find several people who had done this, and suggested that perhaps they might want to do the band and also a stamp so would know that they have actually checked that person, would help for liability and the police department.

Mr. Duquette stated that the staff report gives two options on this matter, that because of the permit process for the Park District and the permit process through the City, Suite 49 has time problem, first option is to have a special city council meeting next Monday, April 30, and the other option is that Suite 49 be consistent with what they did last year and it would be his recommendation to take action tonight if they feel what they have is appropriate; no changes in application process. He stated what has been real consistent for their operational efforts related to this event has been the perimeter patrols and the police providing a lot of neighbor work, paying attention to those outlying neighborhoods.

There were some concerns by Council Member Brooks and Council Member McNamara about acting on this matter tonight without giving neighborhood time to react with concerns; but with no changes from last year and was successful last year, they would agree to consider the motion this evening and that if there were concerns from the neighborhood, they could call a special meeting (by 2 members of the council) on Monday, April 30.

Howard Swanson, city attorney, stated because this is a matter that did not appear on the committee of the whole agenda nor have prior consideration or action, need to have unanimous motion passed to give yourself authority to act on this, and if that motion is passed, then council can take action.

Council Member Gershman asked to be recused from voting on this issue, and it was so moved by Council Member Christensen and seconded by Council Member Kreun. Carried 6 votes affirmative.

It was moved by Council Member Brooks and seconded by Council Member Kreun to consider the matter of the Springfest event Upon roll call the following voted "aye": Council Members Brooks, McNamara, Glassheim, Christensen, Bakken, Kreun - 6; Council Member Gershman recused.

It was moved by Council Member Kreun and seconded by Council Member Christensen to approve the request by Suite 49 for noise ordinance and special event alcoholic beverage license for 2007 Springfest with the same conditions as previous year. Carried 6 votes affirmative; Council Member Gershman recused.

ADJOURN

It was moved by Council Member Gershman and seconded by Council Member Kreun to adjourn. Carried 7 votes affirmative.

Respectfully submitted,

Saroj Jerath, Deputy City Auditor
Approved:
______________________________
Michael R. Brown, Mayor