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HomeMy WebLinkAbout2011-06-20 Finance Committee Minutes FINANCE COMMITTEE June 20, 2011 Councilors: Bronson, Blanchette, Longo, Hawes, Durgin, Nealley, Palmer, Weston Staff: Cyr, Little, Conlow, Bostock, Higgins, Cammack, Metcalf Others: Jim Sullivan 1. Bids/Purchasing a. Hammond Street Resurfacing – Engineering – Lane Construction - $911,999 Cyr noted that this project qualifies as a BACTS (Bangor Area Comprehensive Transportation System) program. The project starts at Hammond/Union up to Hammond/Norway Road. Blanchette noted the need for work on Hammond Street hill, up from Union Street. Through a competitive process on a regional basis, the City is awarded funds by the State of Maine to redo certain streets. As such, 90% of the funding for the project will come from the State to BACTS and the City will provide the local 10% match. Two bids were received and staff recommended award of the bid to Lane Construction, the low bidder, in the amount of $911,999. A motion was made and seconded to approve staff recommendation. Responding to Weston, Cyr said that the City staff does not have the resources or manpower to perform the work within the bid price range. The vote was unanimous. b. Request for Sole Source – Fire/Rescue Boat – Fire – Northwind Marine - $184,434 Cammack said the Fire Department has been looking to purchase a fire/rescue boat for a couple of years. In FY09 and FY 10, funding was budgeted through the Homeland Security Funds. He noted that his staff has looked at General Service Administration’s (GSA) recommendations and four companies were cited as offering what was needed. One of the four was eliminated because they were not able to offer the needed requirements. Cammack asked for permission to waive the bid process and permission to award the bid to a GSA company, Northwind Marine, to provide the vessel at $184,434. The boat will be used for rescues, firefighting, and rescuing drifting vessels. Durgin asked about the total use of the boat and required staffing. Cammack said the boat will be used for any river incident and will be tied up at the City dock when there is a planned waterfront activity. The current boat is stored on the docks. In response to Durgin, Cammack said it will be used when there is no ice in the river, and no additional staffing is required. Responding to Weston, Cammack said the current boat can’t be used to rescue drifting vessels, oil spills, and cannot work with ProPac. The new boat would give Bangor resources to immediately deploy in the river and not have to wait for the Coast Guard, which is 60 to 90 minutes away. Weston asked the towing capacity of the new boat. Cammack responded anything up to 40 ft. Weston asked if the boat could be used to take the docks in and out each year. Cammack said he would look into it. Cammack said it could be used for land fires as well. In response to Longo, Cammack said the boat would be restricted due to tides in going up the stream. A motion was made by Nealley and seconded by Blanchette to approve staff’s recommendation. In response to Palmer, Cammack said there will be some training with Brewer. In response to Durgin, Cyr said that all funding for the purchase would come from Homeland Security Grants from various years and will not affect the FY12 City budget. In response to Bronson, Cammack said the anticipated life expectancy is 20-25 years. Jim Sullivan, Vice President of Operations at Webber Oil, and Chairman of ProPac, addressed the Committee speaking to the history of ProPac. Responding to Palmer, Sullivan said the nearest Coast Guard boat is in Rockland. Palmer noted the boat could be used for goodwill, demonstration purposes and for celebratory purposes up and down the river. Responding to Weston, Cammack said that training will extend beyond what is currently in place with the current boat. In terms of continuing of federal and state subsidy dollars, the City would look to them. The State has been great with the Mobile Command Unit to continue with funding for training. Bangor’s training will be available for its own department and surrounding communities. If other communities wish to participate, they would be welcome. Longo and Cammack spoke of train derailments. If the boat had been available at that time, it would have aided with access from the river. Blanchette suggested that training include going up the river in all different types of tides. Because it did not go out to competitive bid, in response to Bronson, Cyr said it is a sole source purchase or waiving the bid process. There was not a bid issued but staff called around to various vendors. The vote was unanimous. c. Request for Sole Source – Command Truck Satellite – Fire – Motorbrain Consulting - $20,723 Cyr said this is another request to waive the bid process for the Command Truck Satellite. The satellite came with the vehicle five years ago. There have been issues with the data speeds, which proved unreliable on some occasions. MEMA has unspent FY07 dollars, and contacted the City of Bangor. Bangor successfully obtained a grant for just over $21,000 to upgrade the satellite system in the command vehicle. Weston asked about local vendors. Bostock said that Higgins researched several companies and decided on Motorbrain Consulting. The Department currently uses the service, and Motorbrain is familiar with Bangor’s equipment. Durgin questioned the operating cost and asked about the monthly service fee. Cyr said there is no change in the fee for service. Cyr said the City is currently and has been paying for the service for five years. The remaining grant fund money will be used towards the monthly fee service. Cyr said that the State often has remaining dollars which would be available for the operating fee. A motion was made and seconded to approve staff’s recommendation. The vote was unanimous. 2. Personal Property Tax Write-Offs Little anticipates a balance in the City’s overlay account which is used for abatements, write-offs and uncollectable accounts. Little spoke about personal property accounts and the lack of ability to enforce payment of personal property. He looked at two criteria: one being accounts that have not been assessed for at least 7 years and corporations/businesses that are no longer in existence in Maine per the Secretary of State’s corporate data base. Using the criteria Little has identified 171 accounts totaling $204,452 which he would like to write off as uncollectable accounts. Over the past 15 years, the total commitment shows that overall 98.7% of the original commitment has been collected. This write-off represents just over a quarter of a percent. Responding to Durgin, Little said the corporation issue is always a problem because they can close without notice to the City. If a business closes and does not notify the City, Assessing continues to assess them until the City is notified. Little’s decision to bring this to the Committee depends on the Overlay Account. In the last six years, the Overlay Account has been used for some significant abatements. A motion was made and seconded to approve staff’s recommendation. The vote was unanimous. 3. Review of Proposed Fund Balance Policy At the last Committee meeting, discussion took place about the need to make some changes to the City’s current fund balance policy. Much of it is how it is classified and how it is named. It is currently referred to as Undesignated Fund Balance and Designated Fund Balance. The Governmental Accounting Standards Board requires that it now be categorized and classified differently; i.e. restricted, committed, assigned, or unassigned. A revised fund balance policy needs to be adopted by the end of the year. She noted that the Landfill Reserve should cease to exist and that the balance be transferred to the Improvement Reserve. There is a deficit balance in the Parks and Recreation Reserve. About 10 years ago, the City adopted a policy whereby one-half of the net cash flow from the Golf Course, would go to the Parks and Rec Reserve. At that same time, the bond was needed to expand Sawyer Arena. The Golf Course ran flat for a couple of years and it ended up in the negative. Cyr recommended that the deficit be erased through the Improvement Reserve as of the end of the year. Going forward, the City would continue the process of depositing one-half of the net cash proceeds of the Golf Course going forward. The Cascade Park Reserve has always been reported as a Designated Fund Balance in the General Fund but with the new standards it should not be there. All of the underlying money came from donations and contributions from individuals and fundraisers years ago. It should be shown in a different fund or a revenue fund. Cyr recommends it be moved. If these are approved by the Committee, there will be a Council Order to deal with the first two initial reserves and moving the other can be done as an accounting procedure. Longo asked if the funds could be used for the skate park. Cyr said that topic will be coming to the Council for additional consideration. The Cascade Park fund has about $55,000. Weston made a motion to move staff’s recommendation. Cyr asked if the motion is to move the entire Fund Balance Policy. It was suggested to wait until Cyr reviewed the entire policy. Bronson clarified that the Golf Course proceeds are net. Cyr said the remainder of the revised policy is generally reflective of the City’s current Fund Balance Policy. The same definitions are used, many of the same terminologies, and the same funding limits with individual items. By Charter, the City should be between 5% to 10% of its operating expenses less net debt service for its Undesignated Fund Balance, which will now be called Unassigned Fund Balance in the General Fund. When the City adopted its Designated Fund Balance Policy, it estimated a target of 7½%. The City has a varied tax base and doesn’t have unexpected swings in its operating budget. Cyr suggested that target balance be moved to 8.33% which is the equivalent of one month’s expenditures. Blanchette suggested that a camera be placed at Cascade Park due to vandalism. Weston and Palmer talked about the need for a working cascading falls. A motion was made and seconded to approve staff’s recommendation. The vote was unanimous. The vote was unanimous. Adjourned at 5:58 pm.