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	MAYOR COUNCIL WORK SESSION Wednesday, May 9, 2007 - - 4:00 p.m. Council Chambers Present: Mayor Brown, Brooks, Christensen (joined meeting in progress), Gershman, Glassheim, McNamara. Absent: Bakken, Kreun. 1. Industrial Park Expansion. Greg Hoover, Director of Urban Development, stated that this meeting is an update on earlier discussions regarding the need for more land in the industrial park for future development. He reviewed that at present time there are only 28 publicly owned acres in the industrial park and of that there is only one developable parcel of land that is 8 acres. He explained that the industrial park consists of a total of 380 acres and that over the last 15 years 252 acres have been developed, 184 acres of that in the last 10 years, 64 acres in the last 5 years. Hoover continued that staff has an expansion proposal for meeting future needs for land and infrastructure that would meet the needs for industrial park development for the next 15 years. He explained that this plan includes extending South 48th Street from 17th Avenue South to 32md Avenue South and acquiring about 300 acres along the extended road between I-29 and the railroad tracks. He stated that since the last discussions on this matter they have been in contact with each landowner to determine their willingness to sell, look at potential funding opportunities with NDDOT and EDA, and worked on a proposed way to finance the infrastructure installation and land acquisition. (Christensen joins meeting.) Hoover explained that the preliminary estimates for the expansion total approximately $10.4 million, which includes right of way, utility installation, and road construction. The proposal is to use up to $1.5 million from EDA, up to $1.5 million from either special assessments or GF Utility Funds, up to $7 million from NDDOT , and up to $1.6 million from either special assessments or GF Highway User Funds. He noted that these sources total about $1.2 million more than needed, but that is to accommodate eligibility fluctuations and would be adjusted as firm plans for the project are made. Hoover continued that the proposal for land acquisition is to acquire approximately 100 acres every five years and that basis is justified in looking at the rate of historical development which has averaged about 100 acres per five year time period. The acquisition would be funded by a bond sale for $2.5 million with staggered terms on the bonds, the first for 15 years, the second issue for 10 years and the final issue for 5 years. Debt Service would be done through fund 2163, with anticipated bond payments of $245,000 for the first 5 years, $569,000 for the next five years, and $1,142 for the last five years and that $500,000 would be budgeted each year for projects. Hoover concluded that the next steps he is looking for direction on our approval to work with engineering to develop the Project Concept Report and to designate a team made up of staff and Council Members to begin negotiating with each landowner on a purchase price for their land. The group discussed that some of these numbers were different than what was presented earlier, and inquired whether the state would cover the costs of the bond issuance for advance funding of the project on our part and inquried what those fees may be. Schmisek explained that our advance funding of the project includes getting a guarantee from the state that they will cover the costs the City has for advance funding the project and that the costs for that would be about 2.5-3%. (Mayor Brown leaves the meeting.) Schmisek commented that they have suggested highway user funds for a partial funding source as there is about $1.5 million in cash carryover which would be available for use and then in 2011 there would be a return of dollars to that fund. Hoover commented that they had also left in special assessments as a potential funding option for parts of the project and that since this could be part of a negotiation would prefer to discuss specifics related to special assessment options for discussion in an executive session. Glassheim inquired whether using this $1.5 million would affect or delay any other project that is already in the works. It was stated that it would not. Grasser stated that the earlier projects listed for the upcoming highway funds were our requests that were submitted to the State and that what we got back as actually approved was slightly different. He added that to complete the PCR which would give us our best idea of definite costs and where they could be funded from would have a cost of abut $200,000 but that would be necessary to provide any more detailed information to the Council. Hoover restated that at this time they are not looking at getting approval for actually doing the expansion project at this point, but rather just a consensus that this is the direction that the Council would like to go and approval to then continue exploring in this direction through development of the PCR which would further detail costs and funding for the project as will beginning negotiations with landowners and would anticipate more updates to the Council as the process continues. McNamara inquired why the Amazon land is not included in the amount of developable land and use that for future projects and stated that he is reluctant to make any recommendation today without time to review further and digest the proposal. Christensen stated that he would like to see more detail on all costs, funding sources, and any add-ons. Hoover responded that in order to get some of that specific information the PCR needs to be developed, and for land acquisition no more detailed cost numbers can be determined without at least preliminary negotiations with the property owners. He continued that staff has reviewed what information is available and provided to the Council their best sources of funds for the proposed expansion taking into account other projects and needs of the City during the same time. Brooks stated that it would be helpful for Council to be provided with a copy of the presentation for study and notes and commented that this is the type of information that he anticipated receiving today and asked what type of time frame they are looking at in regards to the proposed next steps. Hoover stated that they would like to be able to proceed as quickly as possible, but that there would still not be any actual construction until at least the 2008 season. Duquette commented that the intent in looking at this expansion now is to be able to take advantage of some opportunities that are presenting themselves and would like to have support to move forward. In regards to the Amazon land, he continued that discussions have taken place with other entities in relation to the BRIC master planning and that there will be more information brought to Council later on these potential opportunities and that process moves forward, but in brief the thought is to use that land to develop a campus type setting there. Glassheim commented that it is helpful to know that there are some separate opportunities being explored for that parcel, but inquired whether there would be any opportunities to change direction or stop if things change in the future. Duquette responded that there will be several points along the way where the project could be stopped. McNamara commented that he is still not in favor even giving a consensus opinion at this point. Duquette stated that what staff is looking for at this time is not a firm policy or approval of the process, but for guidance as to the direction to continue researching and gathering more information and would like to be able to get the information gathered so that the Council could feel comfortable with making a decision. Christensen commented that he knows this has been a tentative plan for a long time and that there have been other studies done and would like to see more detail before going ahead, because once infrastructure begins to be installed the City is in a forced position as a motivated buyer of land in that area and has a question where there will still be money available to fund development deals on the land if we use all the funding available for land acquisition and infrastructure installation. Gershman commented that there are still some funds available in 5996. Schmisek added that actual funding in 2163 also came in higher than was anticipated and listed in the 2007 budget book and there would still be deal funding available and that more information on this will be provided as the process goes forward. He continued that in the budget process this fund as been set up to have renewable funding and that with the sales tax continuing to increase at the anticipated 4% growth rate the additional funds going into 2163 would be enough to handle the debt service. Grasser commented that in relation to the schedule, if the PCR went to Council in May, it would take until December to complete it and then the earliest construction would be sometime in 2008. He continued that it would be important to see where the property owners are at and the timeline for when parcels would be available in the area we are considering and that will come out as part of the negotiation process. He added that some time ago the Council identified this as a community need and as such urban dollars can be used as a funding source, but it is a large portion of those dollars so a large decision to place them with this project and the Council should have all the information to make the decision. Gershman inquired whether there would be any access to federal dollars for any development in this area as a result of BRIC. Duquette thinks that there may be and that there is an OEA meeting coming up and this will be one of the topics discussed, but would like to have some cost information to use as well as encouraged a consensus to proceed and to set up a team to meet with landowners. Glassheim stated that he wished that the Council could have had more details on the sources and uses of funds at this meeting, but also realizes that we are running out of land and if we want to continue development perhaps should let the professionals work on this and then bring back that information. Brooks stated that he would also be in favor of continuing forward and would suggest that any team to meet with landowners would include Christensen as a member since he chairs the Finance Development Committee. Christensen stated that he would like to see the amount of funding that will be left to use in development deals if this project goes forward as proposed, as well as what the plans are for lift stations in this area as there was talk of two being needed and make sure what the source and application of funds for those are included. Hoover stated that the lift stations are included in the utility infrastructure costs in the proposal. Duquette stated that he would encourage the formation of a team to begin discussions with the landowners at this time. Gershman requested that information be distributed on Fund 5996 and more information on the funding sources for the proposed project, and also, whether it would be possible to design one lift station that would be able to handle the entire area instead of having two. Gershman stated that in coversations with Kreun, who could not be here today, he was in favor of moving forward. Following short discussion, Gershman stated that while there are a couple of members that would like to hold off, it appears that there is a majority of Council Members in favor of moving ahead at this time and that staff should work on gathering additional information and have another meeting on this topic in the near future to bring back the information requested at today’s meeting. The group asked whether there was funding in the current budget for the PCR development. Grasser stated that funds are available. Duquette stated that he would work with staff on getting another meeting set in the next couple of weeks on this matter. Meeting adjourned 5:20 p.m. Respectfully submitted, Sherie Lundmark Admin Spec Sr.