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HomeMy WebLinkAbout2011-08-22 Finance Committee Minutes FINANCE COMMITTEE August 22, 2011 Minutes Councilors: Bronson, Durgin, Weston, Blanchette, Nealley, Gratwick, Hawes, Longo, Palmer Staff: Cyr, Conlow, Morgan 1. Bids/Purchasing a. Hogan Road Resurfacing Improvements Project – Lane Construction - $411,730 Due a scheduling and timeframe issue for paving work, staff needed to bring this forward for the City’s consideration so that the Council could take further action on it this evening at their regular meeting. This project is to resurface parts of Hogan Road from I-95 to the K-Mart entrance. The portion of the project from I-95 to Bangor Mall Boulevard qualifies as a BACTS program, the conduit through which the City receives state and federal funding for road work. The second portion from Bangor Mall Boulevard to the K-Mart entrance is a 100% City project. It was discussed during recent budget deliberations, and money was appropriated for the project from the Mall Area Traffic Impact TIF. Staff recommendation is to award to Lane Construction, the low bidder, in the amount of $411,730. A motion was made and seconded to recommend approval of staff recommendation to the full Council. Responding to Durgin, Morgan said the bid disparity reflects work loads of two different companies both of which have done work for the City in the past and both have performed quality projects. Durgin questioned the per-ton cost and the other bidder’s quote was virtually double on each item. Morgan said he is confident that Lane Construction will competently complete the project. From past experience on the Council, Blanchette said that when some contractors are overbooked and lacking manpower they flat double their quote. They don’t want to be known as a non-bidder. Responding to Bronson, Cyr clarified that it is the total of all of the work, both City and state. The state portion is about $250,000 and the City’s share is 10% or $25,000. The remaining amount is 100% City dollars. The vote was unanimous. 2. Finance Committee Resolution Approving Make Whole Optional Redemption Feature When the Finance Committee approved the details of the Qualified School Construction bond issue last week, there was a provision that had been changed from the preliminary official statement to the final offer and deal with the purchaser. It typically includes that the City’s tax exempt general obligation bonds have a call feature whereby they can be called at 10 years at 101% or at 11 years at 100%. In this particular market, they are looking for the investor to be made whole if the City intends to call the bonds early. People are purchasing the bonds to be held to maturity at 17 years taking a long-term approach. Cyr said a ‘make whole’ provision could be added so that the City maintains some amount of flexibility but recognizes that if the City chose to exercise that right to redeem these bonds ahead of their maturity it would need to make the investor whole; i.e. all interest and principal to which they were entitled. This is an amendment to the Resolution which clarifies that the bond issue actually has a make whole optional redemption feature and not a call feature. A motion was made and seconded to approve staff recommendation. The vote was unanimous. Adjourned at 5:35 pm.