HomeMy WebLinkAbout2011-04-04 Finance Committee Minutes
FINANCE COMMITTEE
April 4, 2011
Minutes
Council Attendance: Bronson, Hawes, Blanchette, Weston, Durgin,
Nealley, Bronson
Staff Attendance: Cyr, Beaton, Arno, Wellington, Kochis, Webb
Others: Joe Cuetara, Warren Caruso, Beth Grant
1. Consent Agenda
Nealley made a motion to approve the consent agenda, and it was seconded by Durgin.
a. Council Order, Authorizing Police Department to Apply for $5,000 in Maine
Bureau of Highway Safety Funds for the Purpose of Increasing Speed
Enforcement Efforts
2. Bids/Purchasing
a. Sodium Hypochlorite – WWTP – KA Steel Chemicals - $68,328
Cyr said this is a chemical used at the Wastewater Treatment Plant. It is an annually
bid contract. Staff recommendation is to award to the low bidder, KA Steel Chemicals,
for the estimated per unit price of 65.7 cents per gallon. A motion was made and
seconded to move staff recommendation. Responding to Bronson, Cyr said that
Searsport is a distribution for a lot of commodities brought in by ship in large quantities.
The vote was unanimous.
b. Request to Waive Bid Process – Safety Vac – Airport - $29,000
Money had been budgeted to replace the 150 gallon safety vac at BIA. It is used to
vacuum up wastewater especially from the fuel pits. The Airport had been recently
contacted by Safety Vac, which had made some specialty type 400 gallon units. It was
custom built for a customer who later was unable to take delivery. Safety Vac offered
it to BIA for $29,000. Staff looked for comparable pricing for similar units. JDI, Inc.
offers a 370 gallon version for $55,887. The larger unit would be better for Bangor
because more of the lateral fuel pits could be cleaned, and they can hold 15,000 gallons
when full. Currently in high runoffs, Clean Harbors is brought in to augment what the
Airport is able to remove. The Airport is requesting permission to waive the bid process
and to purchase the unit from Safety Vac for $29,000. A motion was made and
seconded to move staff recommendation. The vote was unanimous.
c. Website – Staff would like to discuss the possibility of utilizing FY2011 budget
savings to update/replace the City’s website
Cyr said that the City’s website has a very old version of technology for its content
manager, and it is difficult to use and to maintain. There are products available that
are all together and the City could place its information into a packet, which is easier to
use, to manage and to update. There is $20,000-30,000 remaining in the Information
Services budget due to an employee retirement midyear. The position has been held
open, and it has been advertised for replacement. Staff would like Council approval to
move forward to see what can be done to redo the current website with the savings
available in the Information Services’ budget. Nealley noted that whatever would be
achieved in savings would go back into the IS budget. Cyr agreed. Weston said it is a
wise move to invest in the City’s communication structure. He noted that the cost
benefit to the site is not so much going to be in what platform chosen, but the expertise
behind the company with which the City would be working. Bronson asked if this is
primarily aimed at website or the government channel. Cyr said it is wholly aimed at
website but staff is addressing the government channel broadcast issues. Bangor is a
party to the franchise agreement with the cable company During the first 7-10 years of
the agreement, the cable provider had to remit money to the City to be used only for
the enhancement of the government access system. There is about $120,000 available.
There was a recent upgrade at the City of Old Town, which is very much like Bangor
wants, and staff is working with that engineering firm to put specs together. Staff will
be replacing the system in the next two months. Cyr noted that the City would like to
use its website in a much higher capacity. Weston talked about on-line streaming.
Nealley agreed with on-line streaming. Responding to Bronson, Cyr said she believes
that a platform on which to operate could be purchased within the $20,000-30,000.
Bronson spoke about docks at the waterfront. Cyr said she needs to relook at the
engineering department budget. In response to Durgin, Cyr said she expects that the
website upgrade project will not exceed the $20,000-30,000 limit. Conlow noted that a
recent upgrade at the Town of Orono was $25,000. Cyr said she is looking for direction
from the Committee. Bronson noted that the Committee was in agreement. Conlow
noted that this will be a RFQ, not a RFP.
3. Request to Take Possession of 34 Holland Street
Cyr noted that Mr. Brown, owner of the subject property, was not in attendance. This
is a condemned property and earlier this year the Legal Department asked that the
property be pulled as Legal was in discussions with the owner as to rehabilitating the
property. A related discussion took place at the last Finance Committee meeting about
this project and it was clear that the Committee does not want to deal with
rehabilitating the property. If the Committee approves, there will be a Council Order on
Monday’s Council agenda authorizing that the City take possession of 34 Holland Street.
There is a 10-day window before the Order takes effect and then the owner has 30
days in which to right themselves of the property. After 40 days, the City would
demolish the property using Community Development Block Grant funding. There are
matured tax liens on the property so the City has the right to take possession.
Wellington said that during the 30 day period there are two options: to redeem the
property for the back taxes plus interest or appeal the Council’s action to Superior
Court. Weston asked if either option allows the structure to remain. Wellington said
only from the standpoint that the source of funding for demolition is CDBG monies.
Blight removal under CDBG can only be done on buildings that the City owns. Another
source of money would be needed if the property has not been transferred to the City.
In response to Weston, Wellington said it is a question of when, not if. Assuming
another source of funding is not found, Bronson said the structure could stand a while,
and asked if during that time if it be possible for the owner to come forward to rehab
the property. Wellington said the owner could come in with a plan but he would not
issue a building permit because the building is condemned and that appeal has already
run. The owner would need to go to the Board of Appeals to have Code’s decision
overturned. Nealley asked Wellington to speak about the City’s guidelines and policies
to reach this point of possession. Wellington did so and cited specific information about
the subject property. He also discussed state laws. Nealley made a motion to move
staff’s recommendation; seconded by Weston. Responding to Weston about the
owner’s second property, Wellington said the owner has presented Treasury a check for
the Larkin Street property to cover taxes owed on that property. It is Brown’s wish to
redeem his personal residence. Weston’s question was to show intent. Bronson noted
it was a vote, not doubted.
4. Discussion of Qualified School Construction Bond Opportunity
The State recently received an allocation of Federal Assistance through the Qualified
School Construction Bond. Bangor School Department submitted an application and
was awarded $7M from the program. Any type of debt issued by the City whether it is
City or School requires Council approval. Webb introduced School Committee members
Warren Caruso and Beth Grant. With aged school buildings, Webb said it made sense
to apply for the funding. This does not impact the school debt service and it is virtually
interest free. Kochis said the bond will allow the School Department to upgrade heating
and ventilation infrastructure in all schools as well as some lighting upgrades. The roof
on Bangor High School will be replaced. It is 28 years old with leaks. The 47 year old
bleachers at Bangor High would be replaced. Costs estimates have been obtained from
various engineers. The School Department is asking Council approval to bond up to
$7M. Kochis reviewed a potential debt service scenario, and said the loan is nearly
interest free all depending on the rates. The federal government subsidizes the interest
paid. The School Department needs to make a full loan payment based on the $7M on
an annual basis. A form is filed semi-annually and the federal government reimburses
the interest rate. In the worst case scenario, the School Department may be
responsible for about $14,000 annually of interest costs. The fund balance would be
increased in order to handle it. Nealley spoke about energy savings costs resulting
from the proposed projects. Durgin asked what other projects might be expected from
the School Department in the next 3-5 years. Kochis said that the above mentioned
projects address most of the major needs. Weston asked about the $14,000 interest.
If this was a traditional bond, the interest costs would be $190,000. Nealley and
Weston expressed support. In light of the fact that this could result in a subsequent
Council Order for Council action, Cyr said she prefers to have a formal recommendation
from the Finance Committee in support of the concept. It would not go to full Council
until the actual project costs are better defined. If the money isn’t used, it needs to be
turned back into the state even though the bond has been issued. It would likely come
back to the Council in May or June with a final budget estimate. At that point, the
Council would be authorizing the issuance of the bonds. Durgin made a motion to
recommend approval of staff recommendation with the understanding that the amount
may need to be adjusted when the final estimates are available. Weston seconded the
motion. Nealley asked Cyr to remind the Council of the source of funding at the time it
comes up. Cyr agreed.
5. Discussion with the City’s Financial Advisor
The Finance Committee has recently discussed the fact that the City would like to look
at broader issues and have broader discussions relating to the financial position and
potential of the City of Bangor. There are new GASB regulations which will need to be
undertaken by the City and which will require a new fund balance policy. Cyr
introduced Joe Cuetara, the City’s Financial Advisor at Moors and Cabot in Boston. The
Committee had received copies of the presentation as part of the agenda packet.
Responding to Bronson, Cyr said she consults with Cuetara 3-6 times a year. The
majority of the City’s work with Cuetara relates to the City’s bonds. He oversees and
deals with the public sale of the City’s bonds.
6. Executive Session – 36 MRSA Section 841(2) – Hardship Abatement
A motion was made and seconded to move into executive session.
7. Open Session – Hardship Abatement Decision
A motion was made and seconded to unanimously approve staff’s recommendation.
The Committee adjourned at 7:15 pm.