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HomeMy WebLinkAbout2010-02-01 Finance Committee Minutes FINANCE COMMITTEE February 1, 2010 Minutes Councilors: Palmer, Bronson, Nealley, Wheeler, Blanchette, Hawes, Weston Staff: Cyr, Wardwell, Arno, Ring, Farrar, Heitmann, Tash Others: Wayne Mallar, Eric Russell 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda. Responding to Bronson, Cyr noted that Heitmann prepares the agenda items dealing with sewer which includes language that no real estate or code issues exist. The ones prepared by Little are for real estate taxes with a notation that no sewer or code issues exist. a. Quitclaim Deed – 178 Cedar Falls b. Quitclaim Deed – 254 Cedar Falls c. Quitclaim Deed – 274 Clyde Road d. Quitclaim Deed – 282 Essex Street e. Workout Agreement – 125 Ohio Street 2. Bids/Purchasing a. Firearms – Police – Interstate Arms - $45,414 Cyr said that this has been discussed at the Government Operations and the Finance Committee levels. The Finance Committee agreed, the bid was issued, and 4 responses were received. Police Department staff had identified preferred weapons. All responses were reviewed and the Department’s recommendation is to award to the low bidder, Interstate Arms in the amount of $45,414. The money for this purchase will come from a grant. The City intends to resell its weapons to a licensed firearms dealer and any proceeds will be used to offset the total cost of this purchase. A motion was made and seconded to approve staff recommendation. Wheeler brought a point of order to the Chair; Bronson then declared that the Committee voted in favor of the staff recommendation. Responding to Weston, Arno said that $40,000 will be used from the Bureau of Justice Assistance Grant. Proceeds from the sale of the current weapons will be used as well. They will be sold through the bid process. b. Aircraft Heater – Airport – NGH Retail - $18,221 Cyr noted that this item has been before the Finance Committee previously. The aircraft heater is used by the Ramp Service Division and is used to pre-heat aircraft engines and cabins. The service is charged for by BIA. The Airport has three units and only two of which are fully operational. There is difficulty in obtaining parts. Only one response was received for the City’s request for bids. Two different models were quoted, one being gray and one being white. The white model was $1,500 higher in price. The recommendation is to award to the low bidder, the only bidder, at NGH Retail in the amount of $18,221 for the gray model. Caruso followed up with a number of users of this particular model. All report very good use. The Guard does use it. A motion was made and seconded to approve staff’s recommendation. Cyr introduced Scott Tash, the Airport’s Finance Manager, who spoke about the favorable recommendations received regarding the model. c. Update on Solid Waste Collection Contracts Ring noted that last fall the Council passed a resolve directing the Recycling Committee and City staff to explore options for dealing with solid waste and in particular the City’s current recycling and curbside rubbish collection programs which resulted in two reports. The reports were provided to the Council. The findings of th the report were reported to the Government Operations Committee on January 26. The reports recommend further evaluation of a number of potential options that were identified. One is to continue the same recycling and curbside rubbish collection programs. The difficulty in evaluating options which the committee and staff identified similar programs in other communities is not knowing the actual cost for the various options in Bangor. The primary recommendation was to seek five year contracts for different alternatives in both curbside rubbish collection and recycling programs. The reason for a five-year contract is that experience has clearly been that much better pricing is obtained. The current curbside rubbish collection contract expires in June of 2010. He recommended seeking pricing through a RFP process for both programs. The recommendation is to put together RFP’s for both programs, to get actual bids for vendors for a five-year contract for each of the several options for the Council to further continue. In terms of schedule, in order to issue a RFP and provide sufficient time to receive the pricing with subsequent discussion with evaluation, would bring the schedule close to the end of the current fiscal year. A secondary recommendation of the report is to explore and hopefully negotiate an extension on the current rubbish collection contract for another full year. While it may not require a full year to implement any changes, should the Council desire, some of the options for consideration will probably take lead time to acquire or procure additional equipment. Any change from current systems would take a fair amount of time to properly educate the public as to what changes might be made. Several examples of where municipalities have made a change in their programs without sufficient advance public education time show that problems were experienced. Staff would like permission to proceed with the RFP process and then the Council would have discussion and consideration of both the pricing and the various options. Nealley made a motion to move staff recommendation. The motion was seconded by Weston. Weston asked the value of the one year extension in terms of continued terms. Ring said no, but before moving forward, staff needed to make certain that the Council had provided approval. Ring stated that if the price was different then he would return to the Council for discussion. Bronson asked if extending the contract would be opened up to other contractors other than the existing one. Ring said the recommendation would be to extend the current contract with the current vendor. In further response to Bronson, Ring said in terms of the current contract there would be discussion of a possible month to month basis extension. Weston clarified that staff’s recommendation is to explore the options and not to enter into a contract. Ring said that the Council needs to have the real pricing and not estimated pricing. It will come back to the full Council. Palmer asked if thought had been given to mixing up the pickup schedule, reducing perhaps the eastside one week and the west side another week as a way of cost containment. Ring said that staff and Recycling Committee have talked about getting pricing on the recycling side to continue the current program. Staff can look at Palmer’s suggestion although there may not be as much of a savings as one might think. One of the objectives of the Council and the Recycling Committee and certainly the public is that the goal should be to increase the City’s recycling effort and hopefully to show a corresponding reduction in waste disposal. One of the other options included in the report is the single stream recycling. It has a potential to do more. 3. Review Council Order Establishing a City-side Tax Rate Goal of $9.28 for FY 2011 Cyr said this Order comes forward at the request of Council Chair Stone and other Councilors who had an interest. The Order would direct staff to prepare a budget for FY11 maintaining the current year tax rate. She noted that staff needs direction from the Council at this point. Responding to Weston, Cyr said the current overall Citywide tax rate is $19.05/thousand of value. The overall City tax rate is made up of three pieces: the portion that supports the operation of the Bangor School Department, the portion that supports the operation of Penobscot County, and the portion associated with everything else (police, fire, public works, etc.) The City’s portion of the $19.05 is currently $9.28. The County’s portion is $1.06 and the School’s portion is $8.71. The proposed Order is to maintain the City’s side at $9.28. The only portion of the City Manager’s recommended budget or would normally come forward to the Council the first meeting in April that staff has any control over is the City side portion. The County rate is voted on by the County Commissioners and the Council votes separately on the School Department appropriation. Wheeler said he initially supported the Order. No one on the Council wants to increase the property tax but it seems that this is a flawed process. Does this not in its present form place the responsibility for suggesting the amount of reductions and cuts that would be necessary given the revenue shortfalls squarely on the Finance Director and the City Manager? Wheeler said that responsibility lies with the City Council. The Order unfairly places the burden to staff. Wheeler suggested it would be better to pass such a resolution after receiving the Manager’s recommended budget as to what amount tax rate would be required in order to fund all departments at current levels factoring in the revenue shortfalls. Once that info is available, there would be a measure by which to determine what percentage of cuts needs to be accomplished in the total budget and direct through the City Manager that all department heads submit every possible reduction and cut that they can live with and then bring it back to the Council. Wheeler said he did not feel comfortable passing this responsibility out of the Council’s hand to the staff’s hands. Therefore, he is no longer in support of the proposed Order. Nealley talked about the possibility of City’s actions becoming contagious to the School Department. Nealley said it is healthy to set forth the Council’s position first so that as department heads review their budgets they can make certain they are doing their best. Nealley supported the proposed Order. Wheeler said that within the text of the Order there is the implicit direction that current programs and levels of services be maintained. Rather than pass this Order, he suggested that Council follow the usual procedure of getting the first draft of the budget with all service and program levels sustained at the current level and then the Council takes the responsibility for determining how much should and could be cut. He assumed that if department heads are told sustained current levels of service that’s what they will do. Blanchette questioned why Chair Stone and members supporting this Order feel it is necessary to pass an Order to hold the tax rate at a certain level. Every time an Order or directive is passed indicating that taxes will not be raised, it has always come back to bite the proposer. The Council has no idea of what will come out of Augusta. The Council’s responsibility to direct the budget in the City of Bangor would be turned over to staff by the proposed Order. That is not their job. The Acting City Manager, under the Charter, has an obligation to bring the budget to the th Council by April 15. The Council has the option to adjust and modify the City side only. She does not want to be or accept lightly the fact that some Councilors are making a lot of assumptions with no supporting facts and pushing the Council into a corner. The Council has a job that it can handle. It is not necessary to pass an Order indicating that the Council will hold the tax rate. What’s going to happen if a windfall comes? Does the Order indicate that the amount could be less than $9.28? It’s a recipe for disaster. The system has worked since the City’s incorporation. She asked that common sense from Councilors kick in. Palmer agreed with Blanchette on most of what was said. The Council would do itself a disservice to paint itself into a corner. It’s too early in the game. It burdens a staff that is already burdened. Bronson agreed that it might be too early to instruct staff at this point. Many department heads have heard the general mood of the Council in terms of tax increases. He would not have written the Order with the County and the Schools exempted understanding that the County cannot be forced. Bronson would rather focus on the total tax rate. Bronson suggested that the Order be held in abeyance for a while. Hawes said she would like this set aside for now. When it was first brought to her attention, it was an item that would let people know, department heads and staff, that the Council was very serious about it. Hawes said that she feels staff knows it already. Staff is very busy and this isn’t the time to add anything else on their plate. She agreed with Bronson that it does set two of these bodies off the hook if the City is going to adjust itself to meet the need. Nealley made a motion recommending passage to full Council of the Order. The motion was not Sseconded. Bronson said the motion failed. Committee adjourned at 5:45 pm.