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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.