Loading...
HomeMy WebLinkAbout2011-02-07 Finance Committee Minutes FINANCE COMMITTEE February 7, 2011 Minutes Council Attendance: Bronson, Blanchette, Durgin, Nealley, Weston Staff Attendance: Cyr, Dawes, Beaton, Caruso, Drew, Birch, Spencer, Murzin Committee Chair Bronson noted that Item 3 would be moved to after Item 5. 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda. a. Quitclaim Deed – 16 Grace Court b. Quitclaim Deed – 568 Hammond Street 2. Bids/Purchasing a. Calcium Chloride – City Wide – Paris Farmers - $24,112 Cyr said the City issues RFP’s for calcium chloride on an annual basis. Staff’s recommendation is to award to the low bidder, Paris Farmers, for a one–year contract in the amount of $24,112. A motion was made and seconded to approve staff’s recommendation. b. Backhoe Loader – Fleet Maintenance – Nortrax - $86,900 This is to replace a backhoe loader which is coming off the five-year buyback process. The recommendation is to award to the low bidder, Nortrax of Hermon. The purchase price is $86,900. Nortrax has guaranteed to buy back the equipment at the end of a five-year period for the amount of $34,200 which results in a net lifecycle cost of $52,700. A motion was made and seconded to approve staff’s recommendation. The item will be referred to full Council for final action. c. Military Style Cots – Airport – Byer Manufacturing - $13,189 Assistant Airport Director Caruso has previously requested approval from the Committee for the Airport to purchase military style cots. Money was available from a prior account. Staff recommended award of bid to the low responsive bidder, Byer Manufacturing, in the amount of $13,189. The lower bids did not meet specifications for size and/or weight limits. A motion was made and seconded to approve staff’s recommendation. d. Plow Truck w/Rollover Plow – Airport – HP Fairfield - $329,748 Cyr noted that a few months ago the Airport came to the Committee with a list of equipment that had been approved through the Passenger Facility Charge (PFC) Plan. There is a number of capital equipment purchases needed and this is the first. Staff recommendation is to award to HP Fairfield of Skowhegan, the low responsive bidder, in the amount of $329,748. The low bidder offered a conventional truck and created a prototype. As it is not a standard or factory made type vehicle, staff was concerned about replacement or repair. A motion was made and seconded to approve staff’s recommendation to full Council. e. Vacuum Sweeper Truck – Airport – Tenco New England - $175,616 Cyr noted that this is the second Airport item coming forth as being funded from the PFC Plan. Staff recommendation is to award the contract to Tenco New England of Berwick in the amount of $175, 616. Tenco was the one and two bid in terms of pricing. The recommendation is to go to their second bid in that it provided for a 2010 cab-over versus a 2007 resulting in a better warranty. Both units are 2012 Elgin Crosswinds. A motion was made and seconded to approve staff’s recommendation to full Council. f. De-Icer Truck – Airport – HP Fairfield - $257,120 This item comes forward under the PFC funding source. Staff recommendation is to award to HP Fairfield of Skowhegan, the low bidder, in the amount of $257,120. A motion was made and seconded to approve staff’s recommendation to full Council. g. Runway Snow Sweepers – HP Fairfield - $993,846 This is the last item coming forward under the PFC Plan for funding. The request is for two runway snow sweepers. Staff recommendation is to award the bid to HP Fairfield, the third lowest bidder, for two runway snow sweepers in the amount of $993,846. The first bidder, MD Companies, did not meet specifications; the second bidder, Kodiak, was unresponsive to the request in submitting full specification packets with photos. Ten airports using Kodiak equipment were contacted and all references were negative. A motion was made and seconded to approve staff’s recommendation to full Council. Responding to Weston, Cyr said this item had been placed out to bid last year through the AIP process. At that time, Kodiak was the low bidder and references were negative at that time. With federal regulations related to AIP funding, BIA did not have the ability to choose anything other than the low bidder. Staff was not comfortable in making a recommendation. Staff felt it was reasonable to contact extra references in this instance. In response to Bronson, Cyr clarified that no purchase was made last year. Last year’s AIP allocation was used for the cargo apron. Responding to Weston, Cyr said that not all of the previously approved Airport purchases are replacements. Some is equipment that used to be shared with the Guard. The sweepers are new but are needed to comply with EPA. Caruso said that some equipment is actually owned by the Guard and they will assume the ownership back. Caruso said the same arrangement is still in place with the Guard in terms of snow removal through a Memorandum of Understanding. There is pending Federal Legislation that could change the arrangement including not just the equipment but also the Airport rescue and firefighting. BIA wants to be in the right position should it be required to operate without the Guard’s equipment. Beaton added that the rollover plow and the sweepers are equipment being used from the Guard. The units are no longer available. h. Electrical Upgrade Project – Airport Cyr noted that the Airport has recently experienced a prolonged power outage. An initial investigation of the underground power system shows decay, corrosion and sparking. Due to the existing condition of the system and safety concerns, Bangor Hydro refuses to service power system while it is live. The generator that service part of the IAB is a 1953 generator. Parts for repair are difficult to find and it will not power the entire building. There are some electrical issues with Docks 11 and 15, which are hangars closest to the terminal building. They are on poles with transformers and installed in the 1950’s and Bangor Hydro cannot obtain appropriate parts for repair. The Airport’s recommendation is to hire Carpenter and Associates, one of the approved vendors on the engineering list pre-approved for specific projects, to put a capital project together to address all of the Airport’s electrical system needs. The estimated cost is $959,000, two-thirds of which can be paid for from savings and delayed line rd items from the Airport’s budget. The additional 1/3 will be budgeted in the Airport’s FY12 budget. Responding to Durgin and Weston about other options, Beaton said that staff will look at the option of the transformers being owned by the Hydro. The transfer being owned by the City increases the cost to the City, Weston noted. A motion was made and seconded to approve staff’s recommendation. i. Bronson noted an addition to the agenda; Cyr apologized for the lateness of adding it to the agenda. The Fleet Maintenance Director has contacted Cyr noting that Ford will no longer be manufacturing Crown Vics, which is the City’s choice for police cruisers. The City has an opportunity to consider purchasing police cruisers ahead of the normal replacement schedule. As part of the upcoming budget, it would be normal to replace 3-4 cruisers in FY12. The frontline cruisers are replaced every 3-4 years and the units would have 120,000 miles and costly to operate. The timing is sensitive. In initial conversations with the bidder who was awarded the last cruiser bid, the bidder st said that if an order is placed before March 1 of this year they would be able to fill it with Crown Vics. At this point, Ford is expected to release a new severe duty police vehicle. Dodge Chargers are also used for police services. No other vehicle has the same dimensions and setup as the Crown Vic. With the newer models, it will cost $3,000 or more per vehicle for replacements. Dawes has suggested that the City st consider the purchase of four new Crown Vics before March 1. Delivery would not be taken until the next fiscal year. The City has the ability to return to the last bidder or to go through a short term bid process for the two vendors who typically respond. Responding to Durgin, Dawes said that vehicle replacement is based on mileage. There are currently 14 in service. A motion was made and seconded to approve staff recommendation. Responding to Bronson, Cyr noted there is an alternate funding proposal for these four cruisers. There is money left over from the Police Station in the amount of $215,000. Cyr’s recommendation is to use up to four vehicles’ worth of that amount to purchase the four cruisers recognizing that there is still no fix or a final determination of the mechanical issues at the Station. It would leave $120,000 to deal with those issues. Bronson noted that the mechanical issues have been troublesome for some time now. The Police Chief has been in contact with the architect engineers who are putting forward a correction active plan to address each issue hoping that some of the wider projects will address other issues. Bronson questioned the liability of the mechanical issues. Cyr said that that the City Solicitor is involved with the determination of that question. For clarification, Cyr asked if the Committee is comfortable with staff returning the last bidder or to return to a short bidder process. The Committee’s consensus was to return to the last bidder. Cyr noted that the item will return to the Council for final approval. Although he would support the Committee’s consensus, Weston noted his regret not going through the bid process. Cyr said that the vendor has agreed to hold the price so it is actually an extension of the current contract. 3. Request from Taxpayer – 113 and 115 Center Street Little brought forth a request from Richard and Mary Cyr for the City to consider waiving $1,336.85 of interest on 113-115 Center Street. The Cyr’s were the mortgage holders for the two properties. The taxpayer was unable to pay the taxes, the City placed liens on the properties and the oldest lien came up for foreclosure in December 2010. As required by State Law, the City sent notification to the Cyr’s, who currently live in Florida. Once aware of the situation, the Cyr’s immediately took action. The end result is they have taken back the property from the taxpayer and are now the legal owners. The Cyr’s have sent payments of over $18,000 in full to zero balance both accounts. The Cyr’s asked the City to consider their immediate action and the fact that the City is required to notify a mortgage holder that a lien has been filed (which takes place in June) but the Cyr’s did not receive notice. State Law does not contain a requirement to waive interest but allows the mortgage holder an additional three months to pay the taxes. Little noted that he is not bringing forth a recommendation but providing guidance for the Committee. He does not have a problem either way. It is a unique situation. Weston, Durgin and Little spoke about the lien notification process. Little spoke about lack of staff resources and time. Nealley commended Little for his oversight and recommended support of the proposed waiver. In response to Blanchette, Little said that this type of situation has occurred in the past. Blanchette seconded Nealley’s motion. The vote was 4-1 in favor with Weston in opposition. Weston spoke about increased efficiency of systems in the area of collections. Blanchette said that Weston’s concern needs to be addressed during the budget process. She spoke about the continual cutback of staff and the overwhelming State regulations. 3. Finance Committee Resolution Approving the Details of the City’s $6,391,000 2011 General Obligation Bonds Cyr had come to the Committee in the fall of 2010 discussing the fact that bonds would be issued in 2011 not only for the current capital projects but also to refund some existing debt. The City refinanced its 2000 bonds with ten years remaining and its 2001 bonds. For the 2001 bonds, a $30,000 premium was required because they were called a year ahead of their established call date. The City sells bonds in a sealed bid process through its financial adviser in Boston. Eleven bids were received. The bonds sold to UBS Financial Services. Cyr asked the Committee to approve the details; i.e. $6.391M of bonds and the interest rate averages from 2% up to 3.25%. The City and its Enterprise Fund will save over $600,000 in interest costs over the next ten years. The savings are somewhat evenly split between the Sewer Fund, the Parking Fund and the General Fund. Weston commended Cyr for her proactive work. Nealley agreed. A motion was made and seconded to approve staff’s request to approve Finance Committee’s Resolution approving the details of the City’s $6.391M General Obligation Bond issue. 4. Update from City Assessor Birch briefed the Committee reviewing information previously distributed to members. The difference between the FY11 State Valuation and the FY10 was 1.26% or $30,650,000. Drew, City Appraiser, spoke about sales ratio analysis. Last winter, sales from July 2008 to June 2009 were used to modify the valuation model, which is used to get to the April 1, 2010 assessment values for Bangor. The results of the ratio studies, the sales from the next one year period of July 2009 to June 2010, are analyzed against the April 1, 2010 assessment. Each ratio study conducted has three measures of importance: the percentage of market value, the uniformity of appraisal, and the price related differential. Weston commended the Assessing Department staff for their detailed work. Nealley agreed. Nealley and Birch talked about the downtown assessments. Bronson expressed appreciation to the Assessing staff. Responding to Bronson, Birch said the sales ratio process begins with him and Drew taking all of the sales data, quantifying the sales; the three Assessing appraisers are assigned geographic locations; they will do their own initial ratios. Birch will share those ratios working as a team. Drew does the majority of the Marshall and Swift commercial updates. Each time a change is made all sales ratio studies are repeated to see how the change affects the properties. Birch said they are about 90-95% complete with all ratio analysis. The other appraisers are retesting the work by looking at the multiple listings. With a high level of confidence, Birch said his department knows where the values are throughout the City. There are a couple of neighborhoods that are going down in value and a couple going upward but most of the ratios are within the Council Resolve of 95%. In the commercial properties, there is between a 3-4% valuation increase predicated to the cost manuals, developers, building contracts in the works submit their data to Marshall and Swift. By occupancy, Drew upgrades those changes. As a final test, the Assessing staff reviews its individual ratios and makes the final st projections for April 1. Birch is concerned that the City’s new growth activity has been significantly curtailed. Two years ago there was $130M in new construction, last year it was $48M and this year is will be in the area of $20M. Birch and Drew reviewed the area of personal property activity. On January 7, 2011, business and personal declaration forms were mailed out to 2,717 businesses. 595 have been received and processed to date. Drew explained the BTR and BETE programs. Nealley spoke about other businesses that would look to Bangor if a new arena was in place. 4. Discussion of Committee Agenda Content Bronson noted that at a recent Council Best Practices Workshop Session there was discussion about the various committees and their assignments. Cyr noted that quitclaim deeds do not need to go to Committee but directly to Council. Bronson asked the Committee’s thoughts. Blanchette said she is comfortable with the Finance Director’s recommendation. She asked if the City Manager sees the quitclaim deed recommendations from the Finance Director before it goes to Council. Blanchette also discussed the review of pending bids by the Committee feeling that it is repetitious. The Finance Director never brings a bid to the Committee without providing a detailed explanation. Bronson again asked for a consensus on quitclaim deeds. Conlow said that any abnormal quitclaim deed would be brought to the Committee’s attention. There was a Committee consensus. Regarding the review of bids, Bronson asked if it was being suggested to skip the review but no action required of bids. When action is required, it would then come to the Committee for approval. If the bid process is working correctly, Durgin did feel it necessary to bring it before the Committee. The Committee should review bids that reach a dollar amount that is necessary for the Finance Director to obtain concurrence from the Committee. He also would like the Committee to review bids that are not recommended to be awarded to a low bidder. Bronson clarified as follows: unless it is required by policy or ordinance to come before the Finance Committee, the Committee would trust the Department for the process. If staff wishes to do something other than appears to be the obvious, then it would come to the Committee. Cyr clarified that Conlow and Blanchette were referring to the current process where the Finance Director comes to the Committee with a description of a bid to be issued. The current policy is to place any item over $10,000 out to bid. When the Committee memberships were changed from 5 members to 3 members, the levels of authority were changed by Ordinance. At that time, the Finance Committee had the authority to execute a contract for under a $100,000. Cyr indicated that there could be some consideration to returning to that level. Nealley noted that the membership is now back to 5 members. He feels that Cyr should determine what needs to come to the Committee for bid updates. Durkin agreed. Blanchette said that the current City Council is very much in line with going back to be policy makers instead of micromanaging departments. Bronson said between the Finance Director and the City Manager to bring forward a proposal for the entire Council to endorse. Bronson noted that he is in favor of returning to the limits in place when there were five person committees. Bronson spoke about his wish to have local businesses aware of available bids. Cyr noted that staff does not solicit bids from just those who are on the City’s vendor list. Staff uses the yellow pages and Google to find vendors. Cyr noted that the bid award recommendations she had listed detailed information about the bids issued, the location by county and by state to show that the City does reach out to the local community. Bronson would like that practice continued. Conlow and Cyr spoke about their wish to discuss items with the Finance Committee that are not just bid related; i.e. fund balance, collection policy, quarterly financial statements, etc. Durgin said that it seems all are in agreement that the Council should be a policymaking board and not dealing with the day to day minutia of spending. Adjournment at 7:10 pm.