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HomeMy WebLinkAbout2011-10-03 Finance Committee Minutes FINANCE COMMITTEE October 3, 2011 Minutes Councilors: Bronson, Blanchette, Durgin, Longo, Hawes, Nealley, Weston Staff: Cyr, Conlow, Heitmann, Yardley, Hupp 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda. In response to Bronson, Cyr said the skid steer tractor bid awarded by staff is for the Public Works. Bronson asked if this tractor is to be utilized by Public Works generally or is this to replace the one that has been in the Recycling Facility. She indicated she would verify her response and respond to the Committee by email. a. Bids Awarded by Staff - September 2011 b. Resolve 11-293, Appropriating $26,148 of Edward Byrne Memorial Grant Funds c. Resolve 11-294, Appropriating $78,240 of Housing & Urban Development Grant Funds for the Shelter Plus Care program d. Resolve 11-295, Appropriating $346,296 of Housing & Urban Development Grants Funds for the Shelter Plus Care Program 2. Bids/Purchasing a. Sole Source Purchase – Surface Sensor System – Vaisala - $23,597 Cyr said the surface sensor system is used at the Airport. It actually goes over the runway surfaces and from that certain determinations are made as to runway conditions and what, if any, applications need to be made during the winter months. The system was purchased in the 1980’s. In 2002, a major rehabilitation took place and the system has not required maintenance since then. In preparing for winter operations, there are some issues. Some of the sensors and electrical boards are in need of replacement as well as recalibration of the system itself. This is a proprietary piece of equipment. Vaisala, although not the original manufacturer, purchased SSI, the original provider. Staff obtained a quote from Vaisala of $23,596.94. Hupp highly recommended the proposed improvements and repairs to the current system to provide accurate reading for the runway conditions this coming winter. She noted that Vaisala is the sole provider. A motion was made and seconded to approve staff recommendation. b. Cutting Edge Contract Cyr said the City issues a supply contract for cutting edges which are the used on the City’s and Airport’s plows. It was put out to bid in January of 2009, and the City awarded a contract at that time. The City has recently been contacted by two other vendors, one of whom has claimed to have ‘bought’ the contract awarded to another company, and the other of whom claimed that the contracted supplier had ceased operations. There was a significant amount of conflicting information and staff issued a Notice of Termination to the current supplier. The City Solicitor and Cyr met with the attorney representing the current contracted supplier and the attorney noted unresolved issues amongst the three parties. The attorney did note, however, that the current contracted supplier is still in business. With the pending issues among parties and the impending winter weather, the City cannot risk not having a supply of cutting edges. Cyr is in hopes that the three parties will resolve their issues in a timely manner and that one or all of the vendors, all of which are located in Bangor, could be a potential vendor for future contracts. Until all issues are resolved, staff recommends that the City should not conduct business with any of the three firms. At a staff level, Cyr would like to contact the second lowest bidder from the last competitive bid process to determine if the City’s needs can be met. Staff asked for the Committee to approve returning to that bidder, obtain interim pricing, make certain it is reasonable and in line with the bids submitted back then as well as the prices currently being paid, and execute a contract through August 31, 2012. At that time, there will be a competitive bid process for a three-year contract. The estimated annual cost is between $10,000- $15,000. Responding to Nealley, Cyr said the current contracted supplier is aware of the City’s determination. A motion was made and seconded to approve staff’s recommendation. Responding to Weston, Heitmann said there is currently litigation between the contracted supplier and another newly formed company. The newly formed company includes some of the supplier’s former employees. In addition, there is another vendor indicating he has purchased the City’s contract. Heitmann said that the City’s contract could not be purchased without the City’s consent. The contracted supplier’s attorney has indicated that while there was a sale of some assets it may not include this contract. In response to Bronson, upon hearing of the sale Heitmann said the City requested documentation but none was received. The City is not a party to the litigation. Responding to Durgin, Heitmann said the City has a right to terminate a contract which requires a 30-day notice. In response to Bronson, Cyr said the second bidder is R.F. Jordon of Hermon. c. Review of Purchasing Policy This discussion was a continuation from the previous Finance Committee meeting at which the entire Procurement/Purchasing Policy was reviewed. At the end of that discussion, staff was asked to return with additional information on two specific issues. The first was the bid protest provision of the policy. Initially, staff had recommended that all bid protests be heard by the Board of Appeals. There was some discomfort at the Committee level, and staff returned with three options for tonight’s review: 1) the Board of Appeals; 2) the Council as a whole; 3) a two-step process whereby the protest is initially heard by the Council and, if not resolved, then to the Board of Appeals. Nealley supported option 3. Responding to Hawes, Cyr said that she has seen one protest process in 19 years. Durgin preferred option 1. Longo preferred going to the Board of Appeals first and then to the Council. Blanchette favored going to the Council as a whole. Durgin asked Heitmann if the Board of Appeals statutorily has authority to overrule the Council on technicalities on a bid process or if the Council has the final word. Heitmann said the Board of Appeals stands where the Council decides by City Ordinance. The Board of Appeals considers appeals from Code Enforcement, for example, as provided by Ordinance. The Board hears an appeal from a Council decision regarding special amusement permits, as provided by Ordinance. This applies to hardship abatements as well. Heitmann said it would be unusual for appeals to go to the Board of Appeals and then back to the Council. Weston mentioned that if a Committee makes a decision that is met with protest it does come back to the Council. Weston favored bringing protests back to the Council as it follows precedent. Bronson asked how many levels of appeal need to be provided by the City. Heitmann recommended only one but indicated that the City is not required to provide one as the process could go to the court level. Responding to Durgin, Cyr agreed that there are two issues – has the City solicited appropriately or awarded appropriately. The individual responsible for looking at the award probably should not work for the group who made the award. Cyr said that is why staff recommended going to a higher level, the Council or the Board of Appeals. Heitmann said the solicitation, the bids, RFP, and RFQ are prepared and sent out and controlled by staff. Certainly if someone has concerns with staff, it would be in the Council’s interest to review staff’s actions as opposed to another Board. If the Committee wants to refer protests back to the Council as a whole, Blanchette said she didn’t see language that would stop it at that point. Referring to option 3, she suggested that 1 and A are fine, B should be removed, 2 would remain and somewhere there needs to be language indicating that if the individual does not agree with the Council decision as a whole that their next step would be the courts. She would like the Board of Appeals removed from this process. Cyr said that option 2 is close to what Blanchette suggested but by adding a sentence that the decision of the Council is final. Hawes agreed stating that the Council is the policy making body. If a decision is not correct, then the Council is the body that needs to correct it. Weston agreed that proper solicitation is a staff task and review at the Council level is appropriate. There are tangibles and scenarios that are taken into consideration when awarding a bid and it is the Council’s responsibility to document those discussion points during the decision making process. As new individuals join the Council, Weston felt it important to periodically review the procedures. Nealley said he still favored option 3, a layered process. Nealley made a motion to adopt option 3. The motion was not seconded. Nealley asked for the rationale behind option 3. Cyr said option 3 was presented with the layers as a result of discussion at the last Committee meeting. The comments made at that meeting referred to having the appeals heard by the Council or having a two step process. Staff tried to lay out all of the potential options. Durgin said the process currently has the bids coming to the Finance Committee for approval and referral to the City Council for final action. At that point, the City has the authority to implement the process and award the bid. If there is an appeal, Durgin said it has to be settled before the actual culmination of the process. He said that he still did not understand the relationship of the Board of Appeals to the Council in terms of any action taken by the Council and found it difficult to place the Board of Appeals in a position of acting after the Council makes a final decision. Heitmann made it clear that the Council does not review all bids, only those of a certain dollar amount. In that case, if the vendor is not satisfied with the Finance Committee, currently the vendor appeals to the City Manager. When the Board of Appeals is involved, they are the last in the chain and the next level would be the court. If there is an interest in adding an extra layer, it would be Finance Committee to Council to Board of Appeals. The Board’s involvement with the Council is limited to whatever statutory provisions are in place for the Board to review municipal action. Durgin asked if the Board, under current statute, has the authority to overrule the action of the Council. Heitmann said only on the things given to the Board; i.e. hardship abatements and special amusement permits. Blanchette made a motion to go with option 2 whereby all protests would go from the Finance Committee to the Council as a whole. She did not see a need for the third tier. The motion was seconded. Longo asked for clarification on the motion. Bronson indicated it was for option 2. Blanchette said that five members of the Finance Committee would hear a bid, vote it either up or down and, if the bidder then objects, the Council Chair would convene a Special Workshop of nine elected officials to hear the protest. After that, the decision would go to the Council for ratification. If the bidder objects at that level, the next level is the court system. Weston asked if the intention of the motion also was intended for appeals coming after the initial Council approval of said decision. Blanchette said if someone wants an item to be reconsidered they are always granted a full audience with the Council as a whole. Responding to Bronson, Cyr said she understood Blanchette’s description of option 2. Bronson noted that the appeal could come after the awarding of a bid. Some would be awarded based on staff, based on the amount of spending, based on Finance Committee action, and some would have been based on whole Council action. Nealley wondered about amending the motion to include those things which actually would regularly go to full Council anyway; i.e., bids in the amount of over $100,000. He noted that the Council would approve the Finance Committee’s decision without another process. He felt it defies the layered process. Bronson said there is nothing to appeal until a contract has been awarded to an entity. There are three steps, depending upon the size of the contract, and the full Council could authorize the contract and they become the appeals body. The Council may, however, be hearing different information than perceived the first time and the full Council could approve a contract without actual Council discussions. It changes the dynamic a bit. Cyr pointed out that when someone comes forward with a protest they come forward with a reason. There would be new items to look at when something comes forward as a protest. Blanchette noted that the Council in the past has overturned its original vote because of new information. The motion and the second received unanimous approval from the Committee. Cyr then moved to discussion of the current bid limits and whether it should be revisited. Currently, purchases of $10,000 or more are required to be competitively solicited through the formalized bid process. The policy itself gives authority to the Purchasing Agent to establish operational procedures for purchases under $10,000. Cyr said that 90 bids were issued for FY10 and FY11. The information provided was broken down into $5,000 increments in case the Committee wanted to consider a change in the $10,000 bid threshold. Nealley pointed out that roughly one-third of the bids are $25,000 or less. Cyr noted three written vendor quotes are requested when spending up to $10,000. With smaller amounts, Cyr requires staff to obtain telephone quotes. Nealley suggested that up to some level perhaps more discretion should be allowed for the Finance Director versus a formal bid. Blanchette recalled the time when day to day bid purchases were highly scrutinized. She said that the bid process has greatly improved over the years. It is transparent. She asked the Chair if the City Manager would like to comment on the dollar amount. Conlow said the question is not so much the process but the dollar amount as to when staff starts to bring bids through Council. It is the preference of the Council. The Finance Director has a good process in place and the City is audited each year. Conlow said she is comfortable if the amount is raised above $10,000. Longo asked if there is a way to include a formula in the language so that inflation is adjusted automatically. Conlow said she felt a fixed dollar amount is better. Cyr agreed with the City Manager as did Bronson. Nealley said it was his intent to raise the amount. Weston spoke of his interest to protect small businesses in the area and $10,000 or $20,000 is a good size transaction for many small businesses. Without a formal bid process, he noted there is still a structured bid process. There is an opportunity for review of a dispute. Weston said he supports it knowing that the City is continuing to support small business going forward with a structured process. Durgin asked if the purchase order process with three quotes has the same weight as the bid process in terms of holding to the price. Cyr responded that she assumed so because it is a written document. She clarified that it is not going to be a formal bid process, 10-20 vendors will not be contacted, it will not be listed on the City’s website, but staff will call the 3-4 businesses that provide the item or service on a regular basis and ask for a written quote. Weston then withdrew his support. With technology and transparency today, he noted that making it public by posting it on the web is a simple and efficient task. He doesn’t believe that 10-20 vendors need to be called but there are methods by which it can be made known that certain services are being sought. He felt that opportunities would be declined without an open process. There needs to be a public communication. Nealley noted that a lot of small businesses are reluctant to go through a formal structured documentation bid process but, if contacted, can be competitive. They may not have staff on hand for municipal bids or searching on line for public bids. Weston expressed surprise at fellow Councilors lack of trust and faith in the small business person. To say that someone is not going to be searching for business is a general statement with which he does not agree. Weston noted that he would not support the motion unless it includes a public transparency solution. Durgin supported Weston’s comments about public transparency. Longo agreed; however, said there should be something for over $10,000 on the City’s website when time sensitivity is not a priority. He also thinks that items under $10,000 without a time sensitive deadline should be made available on the website. Bronson asked Cyr if she has received sufficient direction from the Committee for a consensus to be able to bring the entire policy back for approval. Cyr said she did and explained that she understands the public transparency, opportunities noting that public notices are posted on the web and in the Bangor Daily News and EMDC views the City’s website each Friday because they accumulate businesses within their area so that they can send out those opportunities to others. She spoke about the difference between a statement on a vendor letterhead or a formal bid. Depending on the item, there isn’t much difference. Cyr recommended that the bid level remain as is at $10,000. Staff throughout the City currently understands the limit. She thinks that requiring that smaller amounts need to be posted on the website creates a hardship and a significant amount of time. A bid takes between 10 and 12 hours staff time. A Request for Qualifications is much longer. For transparency and the sake of the organization, the best thing to do would be leave it as it is. Bronson asked the Committee members if they felt a consensus was being reached to move in one direction. Weston spoke of the 7 hour timeframe spent for a bid process. If the limit is raised to $20,000 or $25,000 and only a public communication threshold for between $10,000 and $25,000 is in place it would save significant time. Responding to Weston, Cyr said that the most of the 7-10 hours is spent in her office and it would be pushed out into other areas for spec development, an independent review, etc. Weston asked if it would need to leave Cyr’s office. Cyr said it would not and she could work with it. Bronson clarified that Cyr is at a point where she is prepared to return with policy language that takes the essence of what has been presented this evening from the Committee. Cyr agreed. Adjourned at 6:25 pm.