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HomeMy WebLinkAbout2010-10-04 Finance Committee Minutes FINANCE COMMITTEE October 4, 2010 Minutes Councilors: Bronson, Palmer, Blanchette, Wheeler, Weston, Nealley, Hawes Staff: Cyr, Little, Wardwell, Caruso Others: Sharkey, NESCOM Students 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda. Responding to Bronson, Cyr noted that the mobile homes in item c. are no longer located within the City of Bangor, and the City has no right of recourse. Mobile homes are not supposed to be moved without taxes being paid, and sometimes taxes that are owed on properties would cost the City more to dispose of it than would be worth to collect. a. Workout Agreement – 269 West Broadway b. Workout Agreement – 376 Target Industrial Circle c. Write off of Taxes on Various Mobile Homes 2. Bids/Purchasing a. Aircraft Anti-Icing Fluid – Airport – Kilfrost Inc. - $53,040 Cyr said this is de-icing fluid for aircraft. A bid was issued for a one-year supply and the recommendation is to award to the low bidder, Kilfrost Inc., at $6.24/gal for an estimated quantity of 8,500 gallons. Caruso noted the Airport’s current contract with Krotech is entering its last year of the contract. In September, Krotech advised BIA that they were manufacturing a new type of fluid which is not listed on the FAA approved list at this point although Krotech has met all the required approvals. Staff found it necessary to go out for bid. A motion was made and seconded to approve staff recommendation and to send it to full Council for final approval. b. Directional Boring Services – Public Works – ETTI - $10,537 Cyr noted that directional boring services is related to installation of conduit in which to connect the new traffic signals at State and Hancock Streets with a new controller. Directional boring is now used for new conduit installation as it allows installation without cutting the pavement. Two quotes were obtained and staff recommended ETTI from Lisbon, the low bidder, in the amount of $10,537. It came to the City’s attention that ETTI was leaving the area and actually did the directional boring last week. Staff requested the directional boring services in the amount of $10,537. Wardwell noted that ETTI was doing work in the area and didn’t know when/if they would be back in the area this fall. Wardwell made the decision to go with ETTI’s early work rather than going with the second bidder for an additional $2,000. A motion was made and seconded to approve staff recommendation. c. Update on Pending Bids Cyr noted that radio and base stations at BIA need to be replaced. She spoke about the FCC’s mandate for narrowing band widths for radio issues. All radios will need to be changed by January 1, 2013. Instead of being at 25 kilohertz, it needs to be at 12.5 kilohertz. There are 16 portable radios and 35 base units at BIA that are over 10 years old and will not be capable of making the changeover. The more recent purchases of radios will be in compliance on the 2013 date. Staff would like to replace items which are currently not in compliance. The estimated cost is $18,000 and it is included in the Airport Department’s budget. 3. Taxpayer Request to Write Off Taxes Little said in May of 2009 Ballzy LLC purchased 41 Perkins Street, formerly Cobb’s Auto st Body. By State Statute, April 1 is set as the ownership date for all property. When taxes were committed in July, all bills and notices were sent to Cobb’s as the legally assessed owner. Therefore, Mr. Sharkey of Ballzy, Inc., did not receive a bill for last year’s taxes. He did receive a bill when this year’s taxes were mailed, he spoke with the Assessing Department about the assessed value, and the Assessing Department reviewed the property, issued the abatement and dropped the value down. Mr. Sharkey also requested that last year’s taxes be abated because he was the owner for the full committed tax year. Because he approached the City after the 12 month period by Statute, however, the City Assessor could not issue an abatement. At that time, Sharkey’s only recourse is to request the Council to adjust the amount due to the City to an amount that would be equal to the abatement that would have been issued if he th had come in before July 8 of this year. The amount of the abatement would be $1,615.44. Responding to Weston, Little said that municipalities are always protected under State Law. It is up to the taxpayer who purchases the property or the seller’s ultimate responsibility to either contact the municipal office to find out what taxes are due to and to have it clearly informed as part of the closing. The town is under no legal responsibility as far as notifying a new owner. Some smaller towns do send out tax notices to both the old and current owner. For Bangor it would be a cost and time issue. Because the City made no errors in this instance, Little cannot recommend an adjustment. If Council feels it is warranted, the amount can be adjusted. Little said he could not think of any recent precedence. Responding to Nealley, Little said the property had been assessed at $145,800, the assessment brought it down to the purchase price of $61,000 paid by Sharkey. There was an issue of contamination and, because it is no longer being used as a business, it lost its grandfathered status. Sharkey can only use it as a residential property and it will take a lot of work to get it back into a workable condition as a residential structure. Sharkey said he bought a blighted Bangor property and wants to improve it. He noted that Little had clearly defined the situation. Sharkey also owns another property in Bangor. Nealley made a motion to allow an abatement of the additional $1,615.44. Weston asked if Sharkey had any communication with Cobb regarding the tax bill. Sharkey did not. Weston seconded the motion. Responding to Wheeler, Little said the interest involved is between $200 and $300, and will be paid by Sharkey. Palmer and Sharkey discussed the contamination and the EPA’s involvement. Before moving to item 4, Cyr asked the Committee to review information regarding electricity supply. She had sent an e-mail to the Committee earlier in the day. The City has been fixing its electricity supply costs through Maine PowerOptions for almost 8 years. This came about through deregulation. Maine PowerOptions is an energy purchasing consortium that serves as an aggregator for Maine’s local governments and non-profits. Currently, the City’s supply is fixed through December 1, 2011. The City has three service levels of fixed accounts: large, medium and streetlight accounts. There are other City electricity accounts but are not able to have a fixed supply cost. Currently, the medium accounts are at 9.4 cents/kilowatt hour and large accounts are at 8.75 and street lights at 7.8. All contracts expire on December 1, 2011. Late last week, MainePower Options put out a customer wide email that due to a downturn in the market they were seeing an opportunity for those customers who had contracts expiring on December 1, 2011 to consider buying a one, two or three year contract that will kick in after that date. The supply costs are very low at the moment attributable to larger than expected natural gas reserves, not as much demand, and the hurricane season has not impacted the energy market as in the past. Cyr spoke about anecdotal kilowatt costs per hours of which the City could take advantage. It could result in a 20% to 28% reduction in the City’s supply costs for the year starting December 1, 2011. She requested that the Committee consider going before the City Council at its upcoming meeting in authorizing the execution of a contract for electricity supply for at least one year provided the City achieve at least a 20% savings. She will not have the thth pricing available until October 12; the Council meets in October 13. She suggested that the recommendation include that she will share that information with either the Chair of the Finance Committee or the Council as a whole, whichever the Committee desires. Based on the pricing structure at this point, Cyr said that a 12 month medium supply account would be 6.51 cents/kilowatt hour; 24 months would be 6.71 cents. Her recommendation is to at least go for one year if not two or three year. Weston made a motion to approve staff recommendation. Nealley seconded the motion. Responding to Cyr, she explained why she felt the City should lock in for one year as opposed to two or three years. The energy and supply costs in Maine have drastically changed. Until real pricing is actually available on October 12th, Cyr said she isn’t comfortable going out to two or three years. Bronson clarified that this contract would follow the existing contract. In one year, Cyr noted that the change in supply rate would save a citywide amount well-over $300,000. 4. Executive Session – 36 MRSA Section 841(2) – Hardship Abatement A motion was made and seconded to move into Executive Session. 5. Open Session – Hardship Abatement Decision A motion was and seconded to approve staff recommendation. Adjournment: 5:55 pm