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HomeMy WebLinkAbout2011-11-21 Finance Committee Minutes FINANCE COMMITEE November 21, 2011 Minutes Councilors: Durgin, Blanchette, Longo, Baldacci, Sprague, Weston, Gratwick Staff: Cyr, Conlow, Moore, Morgan 1. Bids/Purchasing a. Request to Execute One-Year Maintenance Contract – WWTP – ADS Environmental Service - $96,150 By way of background, Cyr said that in July 2010 the City purchased five permanent flow meters for the combined sewer outflow points. The purchase was a requirement of the EPA Consent Decree. The flow meters measure the discharge into Kenduskeag Stream and Penobscot River during heavy rain fall or snow melt. Earlier this year in June 2011 the City purchased ten portable flow meters. The meters will be moved around the sewer system as needed to obtain accurate modeling information. As part of the second purchase, there was a three-month maintenance agreement. The Sewer Maintenance department has had several employee retirements. Because it took several months to find replacement employees, staff has not been able to get up to speed for continued maintenance. Wastewater Treatment Plant Director Moore requested that a one-year maintenance agreement be executed for all 15 flow monitors at a cost of $96,150. Savings have been identified which have been realized year to date in the Treatment Plant due to vacancies. The one-year maintenance contract will allow the new Sewer Maintenance Supervisor time to get up to speed. This item will also be discussed during the FY13 budget deliberations. Staff recommends execution of a one-year maintenance contract with ADS Environmental Service in the amount of $96,150. Responding to Baldacci, Moore expects that some level of support would be requested in the upcoming budget deliberations but far less than the current request. Gratwick noted that the cost of a one-year contract equates to a full time position. Moore said the contract would be for fifteen meters, of which and five are installed in combined sewer overflow points which only activate during extreme wet weather. The other ten are in the system and do continuously record flow. The meters are tied in by cell phone and can be read remotely by ADS Environmental which is what staff needs to learn to do. Staff is assisting ADS in the initial reconnaissance if there is a problem. The maintenance contract also includes sending two individuals to Bangor quarterly to go through all of the equipment. Moore said the analyzing of the data is complicated in that it is in very challenging operating conditions. Gratwick said he would support staff’s recommendation but still questioned the cost of the contract. Weston asked Cyr if the fiscal note on the $96,150 is zero in terms of excess of the budget that under which WWTP is currently operating. Cyr confirmed his statement. A motion was made and seconded to approve staff’s recommendation. The vote was unanimous. 2. Discussion of Monthly Financial Review Durgin noted that he recently met with the Finance Director who has prepared a standard format for a monthly financial review. Cyr distributed copies to the Committee. The Finance Committee felt it needed more up to date information on the City’s status of revenue and expenditures. Cyr noted that she had put the format together in consultation with the City Manager. On the general fund side, Cyr had broken out the major revenue types; i.e. excise taxes, other taxes, licenses and permits, use of money and property which is rental and investment income. She also broke out the bigger pieces of each subsection; i.e. revenue sharing, general assistance, state reimbursements. On the expenditure side, Cyr broke it out by department with annual budgeted amounts and each month will have a year-to-date column. Governmental accounting is different and the main difference is in property taxes. Property taxes show up as revenue the day the City commits. At the bottom of the document, she added a tax collection rate to see percentage wise how much of the tax levy has been collected throughout the year. She provided a summary format for the Enterprise Funds to look at their operating revenues vs. expenditures on a budgetary basis and a year-to-date basis as well. Cyr initially chose 5%. If the year-to-date revenue or expense is within 5% of that 25%, she would consider it normal. If there is more than a 5% variance, she will prepare explanations. Cyr and the Finance Chair talked of doing this once a month. It will take Cyr a month or so to get caught up. She will do the first quarter the first time and then at the next meeting get caught up through the end of November and then back onto a regular schedule. Durgin and Cyr had discussed the City’s software and computer programming currently being used. There is a RFP under consideration which will be issued within the month. The IT systems are perfectly adequate and meet requirements but are not state of the art. The City is working with a financial computer system that has software that goes back to 1995. Durgin has asked Cyr to provide a monthly report in a summary data form such as was presented at this meeting. With the new software, it will be more streamlined. Weston expressed appreciation for the report. He asked about cash vs. accrual reporting and asked if it applied to all expenditures and all revenues. Cyr said that governments use the modified accrual basis of accounting which is a combination of cash and full blown accrual. Because of the ebb and flow, Cyr said that the City is basically operating on a cash basis in many ways. Expenditures tend to be on a cash basis. The revenue side has the property taxes, which is the odd one. There is no such thing as accrual for excise tax. Ambulance billings tend to be full accrual. General assistance in July typically shows no revenue as it doesn’t get into the system until August. Responding to Weston about the budget number, Cyr said the number shown on the standard format sheet would be the year-to-date revenue or expense expressed as a percentage of the annual budget. Weston said the two largest components under the expenditure side are police and fire, aside from general assistance. He recalled many conversations about payroll and overtime discussions during budget deliberations. He asked for a breakdown, rather than one number for police, for payroll and overtime. Durgin commented that the standard format information would be presented but break- out details will be available when looking at specific areas. If the Committee wishes, the report can be tailored. Because of the level of software currently used, Durgin said that this reporting becomes a very manual job. Weston talked of accounts receivable on the ambulance services. He would like to see what has been received. Durgin noted the varying payment sources associated with ambulance billing causing delayed payments. Gratwick also expressed appreciation for the report but expressed concern about staff’s involved time. The Council needs to make sure that the City has an updated computer system. Cyr said that more than an adequate amount of money has been set aside for the software replacement. The updated software will create efficiencies. Cyr and Conlow are hoping that the update can be done with one software package but Cyr feels that it will be two that will be integrated. It will require training and time from everyone in the organization. Conlow said that as the software programs are evaluated the ultimate idea is to make it easier for the City’s customers and citizens. The focus is how can Bangor better serve and create better efficiencies. Durgin said that both the Manager and Finance Director are eager to move ahead with this change. Sprague asked if this report will be readily available to the public. Cyr said it will also be a part of the weekly packet as part of the Finance Committee agenda. She could certainly post it on the Finance Department’s website page once approved by the Committee. Three year’s worth of financial statements is on the City’s website as well as official statements, rating agency information and budget. Durgin said this is not just a financial system but a City-wide upgrade of its IT capability and the idea of transparency is part of it. It will provide Councilors and Department Directors with a better product. Sprague commended staff for the excellent report. The Committee also received in its agenda packet an overview of the Finance Committee and its functions. Durgin urged members to review it. Weston felt that the new system would most likely not be in place for at least another year of 18 months. Cyr agreed. Responding to Weston, Cyr said the new report would be ready for the next Finance Committee meeting. Durgin plans to have the report for the first Finance Committee meeting of each month. The first one will be a quarterly summary for the first fiscal quarterly from the end of September. 3. Executive Session – 36 MRSA Section 841 (2) – Hardship Abatement (A) and (B) A motion was made and seconded to move into Executive Session. 4. Open Session – Hardship Abatement Decision A motion was made and seconded to approve staff recommendation for Hardship Abatement (A). A motion was made and seconded to approve staff recommendation for Hardship Abatement (B). Adjourned at 5:53 pm.