HomeMy WebLinkAbout2010-09-20 Finance Committee Minutes
FINANCE COMMITTEE
September 20, 2010
Councilors: Bronson, Nealley, Blanchette, Weston, Wheeler
Staff: Cyr, Cammack, Caruso, McKay, Birch, Farrar, Seymour, Gastia,
Little
Others: Eric Russell, Jennifer Brown
1. Consent Agenda
A motion was made and seconded to approve the Consent Agenda items.
b. Quitclaim Deed – 73 Grove Street
c. Quitclaim Deed – 110 Highland Avenue
d. Quitclaim Deed – 1257 Union Street
1. Bids/Purchasing
a. Boiler Retrofit – Fire/Parks & Rec – Penobscot Temperature Controls -
$23,353
This item was discussed during the recently completed budget process. Due to the
service expansion by Bangor Gas, three facilities are now within close proximity of a
natural gas service. Unfortunately, the boilers were set up only to use #2 oil. Money
was appropriated to convert to dual fuel burners. The bid was put out for all three
facilities to obtain a better quote. The three facilities are Fire Station #5, Sawyer Arena
and the Parks and Recreation Armory Building. The recommendation is to award the
bid to Penobscot Temperature Controls in the amount of $23,353. A motion was made
and second to approve staff recommendation.
b. Electric Scissor Lift – Airport – Milton CAT - $22,500
Cyr said this item has been previously discussed and the lift is for the Aircraft
Maintenance Division. It will replace a 1987 model, which is currently out of service; it
is difficult to obtain parts. The current unit’s height limit is 20 feet and 26 feet is
needed for the larger aircraft. The recommendation is to award to Milton CAT, the low
bidder, at $22,500. Weston noted that there were 8 bids received. A motion was
made and second to approve staff recommendation.
c. Gas Fired Steam Boiler – Airport – F.W. Webb - $22,843
Cyr said that this item has also been previously discussed and referred to as a ‘trash
cooker.’ It is used to take care of aircraft trash, which must be disinfected and burned.
The current boiler had been in service for over 14 years requiring continuous repair and
maintenance. The Airport, as landlord, is responsible to replace the boiler. The
recommendation is to award the low bid to F.W. Webb in the amount of $23,842.94
with Cyr noting a typo in the original agenda item. Caruso spoke about the high use of
the boiler. A motion was made and second to approve staff recommendation. Weston
noted that taxpayer dollars are not used for Airport purchases.
d. IAB Improvements – Airport – A.A. Randall - $14,448
Cyr noted that this item has been previously discussed at the Finance Committee. The
concrete block and stucco façade of the IAB has faded and peeled. Cyr noted that,
while A.A. Randall is the second lower bidder in the amount of $14,448, the low bidder
was $5,080.10. In conversation with the low bidder, it became clear that the low
bidder had left some items out and miscalculated. The low bidder asked that his bid be
withdrawn, which was allowed by staff as mistakes do happen. Caruso circulated
photos of the current façade. Wheeler asked how the façade reached this point of poor
condition before it was addressed. Caruso said that building maintenance employees
do keep track of issues but the past year the deterioration has escalated to the point
where paint was chipping. Wheeler said it is important to stay on top of deteriorating
facilities, noting past issues with Bass Park. Repairs become costly and represent a
poor image of the City. Caruso noted that building maintenance has done some patch
work but felt it was time to put the project out for bid for complete refinishing. Nealley
spoke about the wide price difference in bid responses. Weston talked about adding
color to the façade making a more positive experience. A motion was made and
seconded to approve staff recommendation.
e. Request for Sole Source Purchase – Message Board – Police - $14,725
Cyr said the request is to purchase another message board. The Police Department
currently has two boards. As part of the 2009 American Recovery and Reinvestment
Act, the City was awarded $146,000. Part of the grant application for funding, included
$14,725 to purchase an additional message board and trailer. With two units that work
very well and have been in service for years relatively maintenance free, the
Department is asking permission to purchase a third unit of the same type from the
same vendor. It is a Vermack Message Board, manufactured in Canada, and would be
purchased by Work Safe Traffic Control Institute. If approved by Committee, the
competitive bid process would be waived. Responding to Nealley, Gastia said his
Department currently has two electronic boards to monitor speed and a separate
individual radar trailer that monitors speed. A motion was made and seconded to
approve staff recommendation. Weston expressed appreciation to the involved City
departments during the recent Komen Race for the Cure. In response to Wheeler,
Gastia said the Department could probably use 6 message boards and it still wouldn’t
be enough. Responding to Weston, Gastia said the message boards can be
programmed by laptop and uploaded into the device within 15-20 minutes depending
upon staff availability. Bronson noted that the recommended vendor is in Barre,
Vermont and not a local vendor.
f. Request for Sole Source Purchase – Polycomm Communication System – Fire
- $59,587
Cyr said this is another request for a sole source purchase from the Fire Department to
purchase a Polycomm Communications. It will allow video conferencing and live stream
between the four public safety locations (3 fire stations and the police station). It will
also allow the departments to interface with the local, state and federal agencies for
emergency management operations and will allow remote training. It was included as
part of the 2008 Homeland Security Grant program for the purchase and installation of
this equipment. Staff feels that Polycomm is the best visual communication system and
recommends award of contract to New England Communications, the City’s current
provider for telephone and data for maintenance and installation, in the amount of
$59,587. A motion was made and seconded to recommend approval to full Council.
Responding to Weston, Cammack said that training classes can be recorded and played
back to those employees who might be out on emergency calls. Anyone that has
Polycomm would have the capability to pipe into Bangor’s system. Nealley spoke about
grants in general being taxpayer dollars but making it clear that the US Congress has
allocated monies for certain items that one community or another will have an
opportunity to access. He said that Bangor staff is doing the citizens of Bangor a favor
by allocating those dollars for its own purposes. He credited staff for their work in
securing grant monies. Bronson agreed with Nealley. In response to Blanchette,
Cammack said that most of the Fire Department’s training is done at Central Fire.
g. Update on Pending Bids
The first item is to replace a 2003 ambulance, which has 113,000 road miles. The
vehicles also spend a considerable amount of idling time causing more wear and tear.
Cyr said this was approved during the recent budget process. Currently, this specific
unit is not in service unless another ambulance is out of service.
2. Request to Take Possession of 110 Pearl Street
Cyr and Little discussed matured tax liens on this property as well as matured sewer
liens. There was a Community Development Block Grant loan and not much has been
made in way of payments on this loan since 2007. The City has made repeated
attempts throughout that time to receive some payment but attempts have been
unsuccessful. The property owners were notified by Certified Mail that the City is
looking for payment to bring it current or enter into a workout agreement. The owners
indicated to staff that they could possibly pay $800/month and, at this point with lack of
communication and the amount owed the City, staff felt the offer was not substantial.
Staff is recommending that the City take possession of the property. It would involve
removing the owners from the premises and selling the property, and staff brought it to
the Committee for discussion and recommendation. Little noted that Jennifer Brown,
one of the property owners, was in attendance. The options given the Browns to bring
past due amounts current would be a lump sum payment of $32,000 or a monthly
workout agreement of $3,100 which would bring everything current within 12 months.
Little noted that it is very rare for staff to recommend taking possession of a single
family dwelling.
Responding to Nealley, Little said that usually it is only outstanding taxes involved and
the City has had several workout agreements that have expanded over multiple years.
This particular situation also included about $120,000 in Community Development
mortgages and involves another City Department that has to be willing to spread out
the workout agreement over multiple years. In response to Weston, Little said the last
mortgage payment was received in April 2007. Currently there are about 5 years of
outstanding taxes with two matured liens. It is approximately $14,000 in past due
taxes; $120,000 in mortgages.
Brown addressed the Committee noting that she had some understanding that her
husband was taking care of these issues but apparently he was not. They were
separated for part of time but are now back together. To her knowledge, they have not
heard from Community Development on a payment. The last she knew, they were
working with Community Development for a payment because they had taken on the
other loan. She thought her husband had made arrangements for the sewer payments.
She had no idea that the amount due in taxes was such a large amount. When
receiving the letter, Brown made the initial call to the Little about making a payment.
She doesn’t want to lose their home.
McKay talked about the Community Development loan and provided some historical
data on the property. The initial loan to the Brown’s was for $70,000 for property
rehabilitation. Subsequently, additional issues with the property were assessed and
additional loans of $10,000 and $12,725 were made to the Brown’s. The second and
third mortgages were deferred payment loans. The $70,000 was a 20 year loan at 3%
with payments of $388/month. The other loan is a mortgage held by Maine Stream
Finance, which is Penquis CAP, who had started foreclosure proceedings in 2007. It
was in the City’s interest to buy out that mortgage. The original amount of all loans
was about $111,000; with interest and fees, the amount due to Community
Development at this point it is $119,000 approximately. The payments due under the
$70,000 and the Penquis CAP loan totaled $543/month. The property appraisal in 2007
was $135,000.
The original $70,000 loan and deferred loan was made in 2004. Payments were to start
in 2005. Seven full payments were made in 2005 and the last payment was made
October 17, 2005. In January 2006, payments of $150/week were made until the end
of May 2006. In October 2006, they made weekly payments of $100 until December
2006. In April 2007, $150/week payments were started again slowing down to by-
weekly payments in July and August and one payment in September and their final
payment in October 2007 in the amount of $300. In total, they are behind 9 payments
in 2007, 12 payments behind in 2008 and 2009 and nine in 2010. This totals 42
months worth of behind payments to date. McKay said this needs to be resolved in
some fashion.
Responding to Bronson, McKay said his office sends out notices about late payments
and, when receiving no response, the Legal Department sends a notice. Weston asked
about in-person visits. McKay said a meeting was held with the Brown’s in 2007 to talk
about workout agreements and payments schedules. Responding to Nealley, Little
spoke about the abatement process which would go back only three years. Responding
to Wheeler, Brown said she and her husband are joint owners of the property.
Blanchette said that at this time she feels the Committee is lacking financial information
on the couple’s ability to come to grips with this situation. She suggested that in
fairness to all involved that, if the Brown’s applied for an abatement on the three years
back taxes, the Finance Committee in Executive Session would be able to look at their
finances to see if there is any hope of them redeeming the house. It’s not the City’s
goal to be a landlord but the City does have an obligation to all residents of Bangor who
pay their real estate taxes on time or make out a workout agreement. Blanchette noted
that she was not a voting committee member. Bronson thanked Blanchette for the
suggestion. In response to Weston, Brown said there are children in the home and
cited their ages.
Cyr agreed with Blanchette in that there is a lot more information needed. Cyr
suggested that Little talk with Mrs. Brown to see if the hardship abatement is an avenue
which the Brown’s would like to follow. If not, the discussion can be scheduled within a
month’s time at the Finance Committee in Executive Session as far as workout
agreements.
Weston asked Mrs. Brown if she understood the amount of time and lack of action
being discussed at this meeting. Brown replied yes and said she is willing to discuss the
abatement process with Little.
Weston made a motion to move staff recommendation to take possession of the
property. The motion did not receive a second. Wheeler felt it was appropriate to
pursue an abatement. Bronson agreed in that a 30-day delay will not much change the
City’s position. Blanchette spoke about deserving a second chance. Bronson said he
th
views it as a 5 chance. Weston made the recommendation to move forward with staff
working with the Brown’s. He made the point that the City is one vote away from
occupying the property.
Responding to Weston, Brown said she has more of an understanding that she needs to
follow up with her bill payments. She feels that regardless of the outcome she needs to
know what is going on in her home finances at all times. She has discussed this with
her husband and has started to work towards that end.
Nealley made a motion that this item be postponed to the Finance Committee two
meetings from today (October 18th) after an opportunity has been given for staff to
meet and work with the Browns. Weston seconded asking the expectation of
communication on behalf of the parties. Since the initial letter sent out last month,
Little has been in contact with Mrs. Brown a couple of times. Little said that Brown
realizes the Council’s position and he expects to be in communication with her during
the next month. Little said he would feel more comfortable if Mr. Brown were involved
as well.
3. City Assessor Update
Bronson moved this item to item 6.
4. Review of Value of In-Kind Services Provided to 2010 AFF
Back in August, Councilor Bronson had requested Cyr to schedule an update to review
the value of the City’s in-kind services provided to the recent American Folk Festival.
The agreement with the AFF states that the City would contribute no more than
$65,000 worth of in-kind to the 2010 Festival. The agreement also calls for that
amount to decrease $50,000 for the two subsequent year’s events. Cyr had presented
written information as part of the Committee’s agenda. She noted that the amount of
pay reflected is based on the employee’s actual hourly wage and an average fringe
rate. The fringe rate varies dependent upon whether it is the employee’s normal work
day, as overtime or as outside pay. The equipment rates reflected are the actual rental
rates charged for all equipment. The total came in at $57,325.76. Responding to
Weston, Cyr said it represents the City’s cost for regular, overtime, part-time or outside
assignments. The equipment rate is the regular rate charged to anyone. Responding
to Weston, Cyr said that some is tied to the indirect cost allocation plan employed by
the City. The indirect cost allocation that is attributable to the Electrical Division is
120% of labor. That indirect cost allocation plan is derived from all divisional costs. It
includes fringes and also includes the electricity cost for the street and traffic lights. All
three electricians were not scheduled on site for the entire Festival this year.
Blanchette spoke about an upcoming retirement in the electrical division and its impact
on next year’s Festival.
Nealley credited staff for their effort in keeping the in-kind service level under the
allocated amount. He spoke about other promoters paying for the services rendered to
them. In effect, it is not just a $57,000 value of in-kind services but Nealley is also
seeing the lack of payment which in effect is an opportunity cost that the AFF would be
paying if they were in a financial condition to actually run their operation without being
totally dependent on the City for these services. Wheeler spoke about the other amount
owed the City from the AFF. He noted that providing the in-kind services at the City’s
cost is in fact directly equivalent to a cash contribution of $57,325. In response to
Wheeler, Cyr said she did make the AFF aware that this item would be discussed on this
agenda. Cyr noted that she has detail to back up every task performed in the area of
Public Works for the AFF. AFF wants that information so that they can plan for the
future. Wheeler asked if the AFF has made its final report with regard to income.
From an accounting standpoint, in-kind will be shown as income, Cyr stated. Wheeler
applauded the event but noted that the Festival has a tainted history with its financial
relationship with the City. Weston said this is exactly what the City was asking for last
year in terms of cutting back in-kind. Weston asked for a scheduled time for the AFF
to meet with the Council. Cyr replied there was nothing set up to her knowledge. He
applauded the decrease of in-kind services this year stating that it needs to continue for
2011 and future years. Bronson suggested that the AFF may appear before the Cultural
Commission. Weston said that the Council had, in early spring, talked about meeting
with the AFF Board on a quarterly basis as well as to meet with the Board following the
Festival for a recap. Bronson and Cyr both felt that that would not happen with the
separation of the City from the Festival. The agreement voted on by the Council
indicated that the City would no longer be as involved in the Festival.
Feeling it to be highly appropriate, Weston made a formal request that the City ask the
AFF Board to meet with the Council. Nealley agreed with Weston.
Bronson questioned the number of hours that might be required for an update, based
on information provided in past years by the AFF. He noted that the hourly rates
applied for City personnel’s in-kind services at the AFF are different and lower than the
rates applied to others; i.e. Bass Park, School Department, Waterfront Concert. Cyr
said that is correct. Bronson said it seems to be an appropriate time to have a total
review of what the City charges various entities and would like to see a schedule which
shows how much would be charged the School Department for an electrician, as an
example. Bronson also stated there needs to be a policy in place for use of the
waterfront. He would like a proposed schedule for use of services and of facilities
brought back to the committee within 3-4 months. Cyr said the rate schedule for
services is clearly defined but not applied in the case of the AFF because the contract
was negotiated differently. It was not negotiated by staff. Bronson said he did not
recall the negotiation. Responding to Bronson, Cyr referred back to when the AFF
contract was negotiated. At that time, she had been asked the question of how
overhead is calculated, she defined the City’s process and she was asked if that
included heating the building at Public Works, for example. She said yes. The
individual asking the questions did not feel it would be an appropriate charge for the
AFF. Cyr stated that the words of the contract and how it was put together was done
by Council Chair Stone and representatives of the AFF. Bronson said it appears that
the City is locked into the agreement with the rate calculation for the next two years.
Responding to Bronson, Cyr said she could defend either rate. Bronson said his ultimate
goal is to treat all entities equally. Nealley said that what has been done, has been
done and there is another two years for the contract. At that time, it could be changed
so that all using the waterfront pay the same amount for various services. Nealley
asked if the AFF is in a position to keep making the payments. Responding, Bronson
said that he thought he had agreed to a contract that said in-kind would be limited to
$65,000 and he did not understand different rates would be used to bring the amount
in under $65,000. He is uncomfortable with it. Blanchette made a comment that the
contract can be ‘un-done.’ Wheeler said it is not good management of the taxpayer
dollars to apply different rates to different users. The City’s word should be its bond,
in reference to the current AFF/City agreement. Wheeler stated that the City is not
trying to sink the Folk Festival but only to be accountable to the citizens who elected
the City Council members and to act responsibly in the use of tax dollars. Bronson also
said he wants to see the AFF continue.
Blanchette said that the Parks and Recreation Advisory Committee has discussed the
need to re-examine the user fees for the waterfront. She asked if the Council had
signed a three year agreement with the Folk Festival. Bronson asked Cyr to provide a
copy of the existing rates applied to all entities, excepting the Folk Festival, and a copy
of the current AFF/City agreement. Blanchette said she doesn’t think that the Chair of
the Council has the authority to commit the City to any fiduciary responsibility without
going before the entire Council. Cyr will find the date on which the contract was
ratified. Blanchette stated that the Council needs to be very conscious from this year
forward that the Chair of the Council is just that and not the head of the City. The
Finance Committee controls the finances with the recommendation of staff. She feels
the City has stepped away from that. She said that the staff has done exactly what
they should do but people have overstepped their bounds and it needs to stop with the
Council of 2010.
Farrar believed there was a Council Order approving the agreement between the AFF
and the City and it may have been brought to the Council in February or March of this
year. The agreement would have been signed by the Interim City Manager on behalf of
the Council at the Council’s direction by approving that Council Order. Bronson wanted
to be sure that all Councilors were exposed to the document. Wheeler affirmed Farrar’s
comments are consistent with his recollection. Wheeler doesn’t recall seeing the final
document.
Weston thanked staff and agree moving forward to find appropriate documentation
from the past. Bronson agreed but noted that more progress is required.
5. Discussion of Potential Best Practices Workshop
Bronson noted that this item is being recommended by Nealley and that a half day best
practices workshop would be in the range of $750-$900. Nealley said that during a
day-long seminar a while back this item was ranked at top of the list by Councilors and
staff in attendance. A review of best practices helps improve an organization’s
performance and efficiency by looking at other like scenarios (city and town leaders and
department heads) to insure a smoother process, time-consuming issues would be
handled in the autonomy of department heads and staff to streamline them, and to
focus on the Council being a policy board. Farrar identified Don Gerrish, retired
Brunswick Town Manager, as an appropriate facilitator. Farrar reviewed Gerrish’s
background. Nealley made a motion that the Finance Committee authorize up to a full
half-day workshop with Don Gerrish. Responding to Bronson, Cyr said there are some
dollars available within the City Manager’s budget from payroll savings alone.
Blanchette asked if any Councilors present feel this should go before the full Council for
a decision. She feels that staff follows the Charter and Ordnances and brings its best
recommendations forward to the Council; i.e. the former item regarding possession of
property. Blanchette asked Nealley to work with her in understanding the benefit of the
half-day workshop. She believes the Council is currently getting the best practice
recommendation from staff. Nealley talked about postponing this until a new Council
is in place. He spoke about a manual in place which covers Council procedures. He
thinks that some rhetoric at meetings can be shortened. He agrees that staff does an
outstanding job of bringing forth their best judgment forward to Council and perhaps
Council needs to pay more attention to it. He spoke about the amount of time spent
crafting a new vision for the City. He also expressed his disappointment in that the City
no longer sends Councilors to the National League of Cities annual conference.
Wheeler favored a Council dialogue in a day-long session focusing on what the Council
thinks they do is good and what needs to be improved. Weston suggested such a
workshop should take place when a new city manager is in place. Farrar said that
Gerrish would talk about the working relationship between staff and Council,
communications, the role of Council and staff, the difference between policy issues and
administration issues, process, etc. It is more of a dialogue and not coming up with a
prioritized list. Bronson noted that Nealley’s motion had failed. Nealley then moved
that this item come back to the Finance Committee after a new City Manager and new
Council are in place. Nealley also stated that the item needs to go to full Council for
final approval. Weston seconded the motion.
3. City Assessor Update
This item was taken out of sequence. The Committee agreed to break and reconvene
at 7:15 pm. Bronson reconvened the meeting. Birch reviewed the materials provided
with the Committee’s agenda. He last met with the Committee in April of this year and
the following tasks have been completed by the Assessing Department during that time
period: the FY11 tax commitment, preparation of the FY11 power point presentation
which is on the City’s website and the government access channel, a taxpayer
notification letter printed on the back of real estate bills, the Assessor’s Commitment
Report and the TIF (Tax Increment Financing). Birch urged citizenry to contact him any
time with questions or concerns. He also noted a change in Assessing Software
programs which combines the Treasury Department and the Assessing Department
under one software package. An estimated $500 will be saved in licensing fees as well
as staff time savings. Due to State changes in the Homestead Act, taxpayers saw an
increase of $57.60 in their tax bill. For this tax year, Bangor has over $10,342,000 of
telecommunication equipment. The equipment is taxable equipment. At the base of
towers, there is usually a small building which is also assessed for taxation. The State
is surveying all municipalities to determine each evaluation in telecommunication. In
$10.3 amount assessed in Bangor, the State will probably try to shift from the
municipalities receiving the taxes locally and the State will tax the individual property
owners. The bill is listed on the Legislative Bulletin dated 9/15/10 “Telecommunications
Personal Property Tax”. Bangor would lose approximately $200,000 tax dollars. Birch
suggested that he provide further information to the Interim City Manager and allow
him to coordinate with the State representatives to challenge the State from taking this
over. Wheeler felt the Legislature will use the strategy of the telecommunications
towers extend signals beyond the municipal boundaries. Nealley suggested a Council
Resolve challenging such a legislative action. Birch responded to Nealley about
commercial versus residential assessments. Birch will return to the Committee in
November for another update. Bronson applauded Birch’s efforts; Birch applauded his
staff’s efforts.
6. Executive Session - 1 MRSA Section 405 (6) (E) – Workers
Compensation Settlement
A motion was made and seconded to move into executive session.
7. Open Session – Workers Compensation Settlement Decision
A motion was made and seconded to recommend approval to full Council.
8. Executive Session – 36 MRSA Section 841 (2) – Hardship Abatement
A motion was made and seconded to move into executive session.
9. Open Session – Hardship Abatement Decision
A motion was made and seconded to approve staff recommendation.
Adjourned at 8:00 pm.