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.