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HomeMy WebLinkAbout2011-08-15 Finance Committee Minutes FINANCE COMMITTEE August 15, 2011 Minutes Councilors: Bronson, Blanchette, Weston, Nealley, Durgin, Hawes Staff: Cyr, Little, Dyer, Caruso, Ryan, Kitchen, Birch, Willette, Courtney, Gastia Others: Eric McCue 1. Bids/Purchasing a. Crossing Guard Services – Police – B.A. Inc - $234,549 (3 years) Cyr noted that the Police Department oversees the crossing guard services for the Bangor School Department at various locations throughout the City. Three bids were received and the recommendation is to award to the low bidder, B.A. Inc. of Bangor for a three year contract totaling $234,549. Responding to Nealley, Gastia noted that reference checks for B.A. Inc. were good, and he also spoke directly with the owner of B.A. Inc. Weston asked about the frequency of reviewing walking paths and bus stops in residential areas to insure that there is adequate coverage. Gastia said the Police Department relies heavily upon the School Department and worked collaboratively with them reviewing all of the crossing sites this year. Some changes were made this year. In response to Durgin, Gastia said that B.A. Inc. does not provide this type of service to any other communities. These are very limited services. McCue clarified that his company provides services dealing with the public at the Hampden Rest Areas on both the south and north locations on I-95, in Medway and in Houlton. All employees have had criminal background checks. Through Sgt. Roach, McCue has cleared 6 employees thus far for the crossing guard contract. Gastia said that background checks are required and are completed on a routine basis. The background checks are required to be cleared by the Police Department. Gastia said the Department determines the number of locations that need to have crossing guards present but the number of employees is determined by the service provider. The Department requires that the provider insures all sites are covered at the necessary times. If not, there is a financial penalty. Durgin spoke about safety gear and appearance of the workers. Gastia said that McCue was told that both would need to meet the satisfaction of the Police Chief. McCue showed the uniform to the Committee. Responding to Blanchette, Gastia said that each year sign boards are placed advising the public that school has started and placed in the strategic locations and the boards are rotated. There are 22 crossing guard locations. A motion was made and seconded to recommend approval of staff’s recommendation to the full Council. The vote was unanimous. b. Boom Flail Mower – Parks & Rec - Greenway Equipment – $15,325 Cyr said this item was approved as part of the FY11 budget. Staff recommends award of bid to Greenway Equipment in the amount of $15,325. The first two items bid were both bid from Northland Holder out of Turner, the third was from Hammond Tractor in Fairfield and the fourth was from Greenway equipment in Bangor. Staff was at first not certain that it could afford a joy stick control and the Greenway bid does include the joy stick. The joy stick from Northland was quoted about $2,200. When comparing the bids on a comparable basis, adding the $2,200 for the joy stick and factor in that if the equipment was purchased from Northland Holder or Hammond Tractor all warranty work would need to be done on their location at the City’s cost for transportation. A motion was made and seconded to approve staff’s recommendation. Weston commended the Finance Director for her due diligence and for looking at the big picture in this instance. The vote was unanimous. c. Natural Gas Boiler Conversion – Bass Park – Northeast Mechanical - $37,647 In going through the budget process, Cyr noted that converting Bass Park to natural gas would save a significant amount of money over the next two years and actually enable the City to recoup its capital investment in the first year. Because of the age of the boiler and system, staff spoke with several firms specializing in furnace conversion. Detailed proposals were received from Northeast Mechanical as well as Mechanical Services. Depending on the type of equipment to be used, a straight bid could not be done because the fix to do this will be different. Staff recommendation is to award the work to Northeast Mechanical in the amount of $37,647. Northeast Mechanical is the Cleaver Brooks dealer in this area and the boiler is a Cleaver Brooks boiler. The chimney is clay lined and will not need to be relined. DEP has agreed since this will be in use for only two winters. The oil tank will not need to be removed as it is part of demolition of the existing facility. In response to Durgin, Dyer said that the Cleaver Brooks Northeast Mechanical fix is to supply a dual burner conversion unit which would not necessitate removing the oil tank. With current DEP rules and regulations, going to a straight natural gas would require removal of the in ground tank. A motion was made and seconded to approve staff recommendation. The vote was unanimous. d. Airport Fiber Optic Installation – Airport – New England Communications – $37,221 Currently, Dock 10, Airfield and Building Maintenance facilities are connected to the City’s network both for data and voice through a wireless antenna system, which was installed bout 7 years ago. It is experiencing some difficulty and staff would like to connect it to the City’s network. Four bids were received. The low bidder did not meet specifications, and subsequently withdrew. The second bid was in the amount of $37,130, and the third was $37,221. Staff recommends award of bid to the third bidder, New England Communications, because they are the current maintenance provider. They did some upfront work for the City in order to put out a spec for the bidding process at a cost of $975 and that is included in the $37,221. Responding to Nealley, the low bidder understood that they didn’t meet the specification and were receptive to withdrawing. A motion was made and seconded to approve staff recommendation. The vote was unanimous. e. Aircraft Anti/Deicing Fluid – Airport – Kilfrost Inc - $488,910 This item is placed out for bid on an annual basis, Cyr noted that two types of deicing fluid are used at BIA, a type 1 and a type 4. The fluids have to be approved by the FAA as well as the airlines. In addition, the bid request was for a fixed price for the first year. Staff recommendation is to award to the low responsive bidder, Kilfrost Inc of Coral Springs, Florida, for a total estimated amount of the contract for both types of fluid at $488,910. It is not the lowest priced bid but the two lower priced bids would not guarantee their pricing for the next year. A motion was made and seconded to recommend approval of staff’s recommendation to the full Council. Caruso, Bronson and Durgin discussed the difference between the types 1 and type 4 deicing fluids. The deicing and anti-icing fluid is a separate cost to the airline. Blanchette and Durgin asked questions about fluids, impervious surface runoffs and Birch Stream. Not being an expert in that area, Caruso said he would provide the information to the Committee. He noted that the Airport and the Air Guard continues to be aggressive with its stormwater management. The DEP and EPA have been very satisfied with the results thus far. Blanchette said she would appreciate the information prior to the next Airport Committee meeting as an update item for their agenda. The vote was unanimous. 2. Tax Collector’s Personal Property Tax Update Based on recent conversations at the last Finance Committee meeting, Little felt it was appropriate to provide an update on the status of the City’s personal property accounts. Currently there are accounts going back to 1997. In looking at the total amount outstanding from 1997 through 2011 tax year, it represents approximately $767,000 outstanding out of a total commitment of $76,791,000 giving an overall collection rate of 99%. Due to a staffing issue, Little’s department does not make telephone contact with delinquent taxpayers. At one point, the Department was staffed with 7 fulltime employees, one being a dedicated collection clerk whose main job was to contact delinquent taxpayers. During a ten-year period with that position, the collection rate was 94.6%. The position was eliminated in 1998 and the Department is now staffed with 4 fulltime positions and one part-time position. The collection rate is now 97.3% on average. In 2001 using new tax software along with new technology, annual and sometimes bi-annual past due notices are sent. Personal property is required to be paid before the approval of any business license that the City issues. All personal property is required to be paid if an individual wishes to pay off a real estate account and has a property deeded back. All vendor checks are held so if the City is going to pay someone that it has contracted with to perform a service and, if taxes have not been paid, the vendor’s check is applied to the taxes. Because the personal property tax lien process did not have enforcement teeth, the department has discontinued the process. The personal property tax lien process requires a full listing of all the equipment being taxed. It is not always available or clear as to what is actually being taxed. Liens are not a first priority and do not mature. They are good for five years unless a continuation statement is filed. It doesn’t prevent the property from being sold, it doesn’t prevent the equipment from being thrown away, moved or taken. The court action process was also discontinued as it was not a good use of City staff and time. Little talked about use of a collection agency but the agency would want a complete listing of the equipment being taxed before moving forward. Some delinquent accounts have been sent to a collection agency but no real benefit has resulted. 30% of the collection goes to the collection agency. Two options under State Law Title 36 give tax collectors the authority to have the County Sheriff seize a taxpayer’s property. If the delinquent amount is not paid within seven days, the property is sold until taxes are paid. Tax collectors also have the right to arrest a taxpayer. The City has not pursued those options, and Little does not recommend doing so. Although never used by Bangor, Little spoke of printing a delinquent tax booklet which is done by smaller communities. 3. Assessor’s Update on Personal Property Declaration Forms Birch said the personal property assessments begin in the Assessing Department with an annual January mailing. Each individual owning personal property receives the information consisting of a personal property declaration form, an itemized list of the equipment for which they were taxed the previous year as well as a letter of instruction. The individuals are asked to complete the form to be returned to the City. After the information has been processed, the personal property accounts are codified and those not returned as “non-declares.” The Assessing Department provided the Treasury Department with a list of non-declares. Out of 450 non-declares, staff was able to search out 152 accounts that did not pay. Staff was successful in contacting 72, and 5 forms were returned. In January 2012 when the FY13 personal property declaration information will be mailed, his staff will call each of the 152 non-declares and non-pays reminding them that the City did not receive their return of last year. Birch intends to follow this practice each January. Durgin and Birch discussed the BETE and BTR program. 4. Assessor’s Update on Commitment Error Birch explained that this error involves Residential Neighborhood #94. The error has inconvenienced 93 taxpayers. Thus far, three taxpayers have been contacted and one has visited the Assessing Department. The Department has prepared a spreadsheet identifying the affected accounts, showing the before taxes, the after taxes, and the abatement amount. The City Treasurer has also received the information and has started to process the individual accounts. The Assessing Department has sent a letter from Bud Kitchen to each affected taxpayer explaining the problem and how it will be corrected. Birch noted that this problem has not occurred in the past and, to prevent it from occurring in the future, an Assessing Department employee has come up with a report showing the current year and past year’s numbers. The Department will be able to go line by line, by individual neighborhood, by zone to compare the individual adjustments. Birch explained that the error was discovered when a taxpayer brought it to the City’s attention. Weston expressed his respect for Birch and Little and thanked Birch for his level of integrity and the proactive measures put in place. Blanchette and Durgin agreed. Bronson noted that human errors do occur but it is the correction that is of significance. 5. Update on Qualified School Construction Bonds Cyr noted that staff was looking to go into the market to sell the City’s Qualified School Constructions Bonds last week. In talking with the City’s financial advisor and underwriter, staff felt it best to stay out of the market due to its volatility. Because this is a taxable issue and a different investor, it is a negotiated sale so the underwriter is talking to potential investors trying to obtain the best possible price. Cyr felt that an official offer would be made tomorrow to sell the bonds, which would require the City to settle on Wednesday. She noted that there may be a need for Special Finance Committee on Wednesday to approve the details, which is approving the interest rate per year. Cyr reported that Moody’s as well as Standard & Poors maintained the same credit rating that the City has enjoyed for some time now. Standard and Poors is a Aa rating; Moody’s is a Aa2. In order to maintain and raise the rating, the City needs to continue to improve its financial position, strengthen the tax base and demographic profile to levels more consistent with higher rating categories. Things that could move the ratings down are protracted structural budget imbalances, depletion of the general fund balance, deterioration of the tax base and demographic profile or significant increase in debt burden. Responding to Bronson, Cyr said the only deadline for the School Construction Bonds is December 31, 2011, which is a requirement of the Federal Government. Adjourned at 6:00 pm.