HomeMy WebLinkAbout2009-03-02 Finance Committee Minutes
FINANCE COMMITTEE
March 2, 2009 @ 5:00 pm
Minutes
Councilors: Stone, Hawes, Nealley, Wheeler, Bronson, Gratwick
Staff: Cyr, Dubois, Barrett, McKay, Heitmann, Willette
Others: Eric Russell, Phil Bennett, Ken Huhn, Carey Weston, Nelson Durgin
Various Members of the Public and Press
1. Consent Agenda
a. Quitclaim Deed – 17 Katahdin Street
b. Quitclaim Deed – 77-79 Kenduskeag Avenue
c. Resolve 09-092, Appropriating $10,000 from General Fund’s
Undesignated Fund Balance for Services Regarding Bangor Gas
Abatement Request
d. Bid – Pouring Rights – Bass Park – Pepsi Bottling Group - $23,049
e. Bid – Sprinkler System Inspections – Airport – Maine Fire Protection
Systems - $19,123 (three year price)
The consent agenda was moved and seconded.
2. Bids/Purchasing
a. Playground Equipment – Parks & Rec/School – Marturano
Recreation - $110,245
b. Design Services – Bangor Waterfront – Shadley Associates -
$182,933
a. Cyr provided some background and noted that while doing the block grant
application last year for Community Development funds a couple areas of
interest came up in the public hearing process. The request for two playgrounds
was subsequently approved as part of the grant application. One was to replace
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the 2 Street playground equipment and the other was a request from the PTO
to replace a playground at Downeast School. Willette worked with the School
Department and the PTO and put out a request for bids. The City received 7
responses, but only from 5 different vendors because 2 of the bids were different
options. The recommendation is to award the bid to Marturano Recreation in
Spring Lake, New Jersey and their option #1, which is a slightly higher bid at
$110,244.70. The additional cost is related to the number of play structures and
associated decking. This amount is within the approved budget through
Community Development of $140,000. There will be additional work that needs
to done for which the City is responsible such as; demolition and removal of
existing equipment as well as some basic prep work that needs to take place.
The City has purchased play equipment from Maturano in the past and has had
good luck with the quality and the installation. Responding to Hawes, Willette
said this amount would take care of both the Second Street Park and Downeast
School. It will replace the structure at Second Street and replace the oldest
structure behind the school next to the big tree. Cyr responded to Gratwick
stating that the funds will come from the Community Development Block Grant
funding that was approved last year by the City Council and public hearing
process. A motion was moved and seconded to approve staff recommendation.
Willette responded to Stone’s question about receiving help from parents
regarding the tearing down of equipment, he stated that they will work with the
schools to find the most appropriate time to do work when no children are
around for safety reasons. This item will go to full Council.
b. Cyr started by explaining that in the past the City has contracted with Pam
Shadley and Associates and Wright Pierce to do the design on the Waterfront.
The Council authorized the execution of a contract with this group last year for
the next phase. The City has found it necessary to redo this phase for a number
of reasons. There are issues with the cold tar and the need to stay away from
the river bank, and certain stormwater requirements have to be dealt with now.
McKay said that the need for an additional $182,000 in design fees for the
waterfront design consultants, Shadley Associates and Wright Pierce
Engineering, is due to the coal tar cleanup in the River. The City now has to stay
away from the river’s edge so that improvements are not made that could
potentially be destroyed by the cleanup activities. This project will begin in 2009
and continue into 2010. The City has not been faced with stormwater permits
but when this 11 acre project begins it triggers a necessity for a stormwater
permit for the whole waterfront to include the Police and Pleasant Street
improvement. It was not expected, but the State DEP has decided that it is a
pristine site and that the City should treat it accordingly. The City is required to
build an underground retention tank underneath the parking lot that is on the
corner of Railroad Street and the railroad track on the Main Street side which will
collect all of the stormwater from on top of the hill from the Police Station to this
site. If this is done now, it will not be necessary to redesign the sites that have
been done previously to accommodate the stormwater. Another change, as a
result of last years’ Folk Festival, was when the City was required to move one of
the stage areas from Exchange Street down river to what is known as the
amphitheater. The amphitheater has recently been shifted up river which
facilitated the need to redesign that area. During the process the City received a
$675,000.00 State grant under the River Front Bond Issue Program and another
HUD Economic Development Initiative Grant of $257,000.00 allowing the City to
accommodate more work than originally envisioned. Responding to Stone,
McKay stated that the Economic Development Department is responsible for the
finances of the grant and the Engineering Department is responsible for the
grant writing. Stone said both departments have done a great job. Nealley said
that the amount of money that this department has been able to obtain is very
impressive. He also said that it is nice to not have this be something the
taxpayers of Bangor are paying for. A motion was made and seconded to
approved staff’s recommendation. Gratwick asked if it is possible to have
pervious surfaces for the parking lots as opposed to impervious. Barrett
responded by saying that he thinks that Engineering has looked into pervious
concrete on a couple of potential areas including at the Fire Station. One
concern is that it is not proven in this climate as well as the cost. Gratwick said
he would like to know more about this because he remembers a presentation
from the University of New Hampshire, which is a very similar climate that
actually worked out better for them. Responding to Gratwick, Barrett said that
this situation is different in that the DEP is saying that the City’s work done in the
past now has to be taken into account with new work that is being done. They
are not saying that we have to do work on our site to pick up stormwater from
other sites such as Shaw’s or Quirk for example. They are saying that the City
has reached a point on that site that it has to meet site location of development
permit standards for stormwater and they have included the Police Station in
that. McKay stated that the City is responsible to pick up enough to compensate
for the projects that has been done previously without going back in and redoing
those projects. Gratwick asked how the City will be a role model for better ways
to deal with pervious/impervious surfaces. Barrett said that Jim Ring will look
into it and McKay added that this will be on the Council meeting on Monday
evening. Barrett responded to Gratwick saying that there are different standards
that come into play with different settings depending upon the circumstances.
The water quality is looked at in the mall, Birch Stream and some of the other
areas. If new developments are done in these areas, they will have to meet
these stormwater standards. Responding to Gratwick, McKay said that the car
top boat access was discussed and it does not have a final design. McKay
responded to Stone saying that it is possible to ask the company that is providing
the design to provide a quote on having this done with pervious. Stone asked if
the design does not go all the way to the river’s edge because of the cold tar,
then when the cold tar is remedied, will they be able to finish the last piece.
McKay said yes. Barrett stated that Jim Ring is getting closer to an agreement
on a final method to clean up the cold tar. Ring has been meeting regularly
with the regulatory agencies and within the next month or two he will brief the
Council.
3. Request to Amend Master Transaction Agreement with Bangor
Nursing & Rehabilitation Center
Cyr stated that she is a member of the board at Bangor Nursing & Rehab Center.
She provided a quick history of the Rehab center including that up until
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December 31, 2000 the City operated the Bangor Nursing Facility, and at that
point was dealing with basically long term care, and required a significant
operating subsidy for a number of years. The City was not well positioned to
change quickly as regulatory issues came up with Medicaid and Medicare. In
2000 the City Council decided to privatize but could not find anyone to take it
over. They looked into the Community to find an entity who would start a board
of a new non-profit to take over the operation of this facility. That transfer did
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take place effective January 1 2001. There were a lot of issues that needed to
be worked out. The Master Transaction Agreement spelled out all of the issues
related to the transfer and dealt with employment type issues. Leading up to
this the City had a complete study done on that facility. It was determined that
in order to bring that facility up to a workable structure the City would need to
invest $2.25M. The City recognized that it could not saddle a newly formed non-
profit with that kind of a liability. The City did agree to provide up to $2.25M in
capital money to the facility going forward. It was also recognized that as of
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January 1 a new non-profit would have no money. The City was putting
between $200,000 to $400,000 a year in cash into it so a line of credit was
established up to $400,000 initially which the facility was able to draw down to
meet their cash flow needs. There was also some tail claims and as of
December 31, 2000 it was no longer a City asset, but there was accounts
receivable outstanding. The City allowed that any monies that the facility
received in the first 6 months would be held for cash flow purposes. In the
Master Transaction Agreement the City laid out repayment terms for account
receivables that they collected during those first few months of operations as
well as the repayment of the line of credit, both of which are at 0% interest.
The City has come back 4 times to amend the Master Transaction Agreement.
All other amendments have been related to bumping out the due dates for those
amounts due back to the City. The new non-profit struggled financially for a
number of years. The facility hired North Country and Associates, which is a
consulting group that deals specifically in long term care and healthcare in this
state. They own and operate and manage a number of facilities. North Country
came on board to do some of the back office stuff to help decide if this facility
was able to survive. The facility also went through 2 or 3 administrators since
the turn over and much of that was due to asking too much of one person. Two
years ago, the facility hired Phil Bennett as the new administrator and he has
proven to be a great asset for the facility. Over the last few years the facility has
gained more of a reputation as being a rehab facility. By having the Medicare
revenue at a higher rate, they are able to subsidize the longer term care, which
is approximately $150 per day instead of 4 or 5 hundred dollars a day that is
received from Medicare. The financial picture has turned around within the last
couple of years and BNRC has begun repayment on the accounts receivable
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amount. The first installment was due June 30 of 2009 and that installment
has been paid in full and they have also made a partial payment towards the
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next installment, which isn’t due until June 30, 2010. The Board plans to
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continue to pay down the debt as cash becomes available. Under the 3 revision
to the Master Transaction Agreement the line of credit is set to expire on June
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30, 2009 and that is about $367,000. That would be a significant hardship, so
the request from the Board is to extend the due date on the line of credit to June
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30, 2012. It is staff recommendation that this request is both reasonable and
not a financial detriment to the City and that it should be approved.
Introductions were made: Carey Weston is the new Vice President and
Treasurer; Nelson Durgin is the immediate past President; and Phil Bennett is the
new Administrator. Durgin gave some history of the Bangor Nursing and Rehab
Facility within the last 9 years. He stated that the facility has gone from being
primarily a long term care facility with only 15 beds and licensed for
rehabilitation, to dual licensing all of the beds so that more rehabilitation is
provided. The rehab business is better for the facility because it pays for all the
services, while Medicare leaves the facility short about $20 a day per resident.
There are about 35 residents on MaineCare. This facility is the only non-profit
and the only organization that is totally run by local board of residence in this
area. This facility is also the only labor organized nursing facility in the area.
This has been a partnership with the City and could not have done it as a non-
profit if the City had not been supporting them. He stated that they are asking
for an extension on the line of credit for three more years. The other amount
that the facility is paying on appears to be ahead of schedule and he believes
that it will be paid off by the end of 2009. Wheeler spoke of Freda Miller who
recently passed away and her contribution to the facility. He feels that this
recommendation should be passed in honor of her and as a tribute to her.
Gratwick asked if the facility costs the City anything other than the interest on
the $400,000 and Cyr responded that it is the lost interest. She said that the line
as been fully extended and is at $367,000. Cyr stated that her hope is that the
facility will build a reserve of their own for those potential issues down the road.
Nealley complimented everyone involved in making this facility a success. A
motion was moved and seconded to approve staff’s recommendation. Barrett
thanked the members of the board for their outstanding and committed work.
This will go to full Council.
4. Request to Take Possession of 1390 Ohio Street
Heitmann stated that when this subdivision was done it was a corporation and
retained open space in the form of a drainage pond. The corporation does not
exist anymore and has not existed for about 12 years. No one has been taking
care of the property or has been paying the taxes. Staff has been looking at this
for a number of years and now believes that it is in the best interest to take
possession of this property for the unpaid taxes. The City does not know if the
pond drains and will need to look at the property to see if improvements need to
be made. He referred to the memos that recognize that because corporations
come and go, the Code has been changed to reflect different requirements when
there is any open space and/or drainage ponds in a subdivision. Staff is
recommending that the City acquire this property. A motion was moved and
seconded. Responding to Gratwick, Barrett stated that the Ordinance has been
changed so that this situation does not happen again. In terms of the larger
open space issue there is a lot of interest in coming up with a reasonable and
appropriate solution to avoid the 5% subdivision set aside for open space that
turns into the drainage pond. The Mall Marsh has come up with a couple of
proposals, one of which is already adopted, in the overlay area by Council and
the Planning Board that might serve as a model. They are now looking at a
recommendation for off-site open space. The City should be getting the Open
Space maps through the Regional Open Space Plan which will help.
5. Review of Liquor License Applications and Special Amusement
Permits Process
Postponed – Due to Dubois was not there due to weather
6. Review of Current/Proposed Bids/Proposals
Cyr stated that the City currently has some bids and proposals in various stages
of completion. The Columbia Street Parking deck is one that just came back.
This Committee heard about this issue when it came to the Committee for a
review and then again when this Committee granted the authority to issue the
request for qualifications to find a design build team to rehab or reconstruct the
Columbia Street parking deck. There are 8 responses and at this time the City is
estimating a cost between 1.3M and 1.6M dollars. The City’s plan is to review the
proposals and set up interviews within the next 10-14 days. Cyr asked the
Committee if they feel that this project is going forward. The response was
positive.
Cyr went on to the next item, which was the Arena Marketing and Facility Sizing
Study. Based on the action of the City Council, Cyr understands that this process
is moving forward. The City’s plan is to move forward when the revised scope of
work has been agreed to.
Cyr moved on to the window renovations bid at 49 Florida Ave which are due
back next Wednesday. This entails removing all of the existing windows and
storm panels and installing new vinyl replacements windows. The bid also asks
the contractor to repair existing window trim; prepare, prime and paint the
interior and exterior windows and door trims. This was included in the Economic
Development budget as an estimated cost of $12,000.00 and this property is
currently leased to a tenant who pays almost $25,000.00 a year in rent as well
as all utilities for the building and property taxes.
Cyr went on to a number of bids that are in draft form. Two of them are Airport
Marketing and Advertising Services and Airport Public Relations Services. This
item has been discussed at the Transportation and Infrastructure Committee
when the staff came forward with issues pertaining to the City’s current provider.
The City has severed ties with that provider and that contract is now terminated.
In order to have this a campaign out this fall which is the peak season, the City
has to hire a new Advertising Marketing Public Relations group. The City as
determined that it would be best to separate the Marketing and Advertising from
the Public Relations. These bids are ready to be issued unless there are some
issues or concerns. Cyr said there were no indications that the City would have
had issues with the Florida Marketing Firm. Cyr said there were some people
that the staff saw throughout this process that were very creative and once they
were signed on, they were not seen again. In response to Gratwick, Cyr said that
the staff learned from the Florida Marketing firm. She feels that different
questions would be asked and as much as of an affirmation as possible from
other prospects. Wheeler and Bronson agreed that a local or Maine firm would
be preferred but they are not putting limitations. They also agree that Marketing
and Advertising should be separate from Public Relations. Bronson asked what
specifically will the Public Relations Service provide to the airport? In response
to the question of local firms, Cyr stated that the City’s purchasing guidelines are
set up that staff will always choose the most appropriate vendor of choice.
However, with all things being equal, if the local vendor bids the same the tie
breaker would be the local firm.
Cyr went on to the Airport tractor, which is part of the FY09 budget at $50,000.
It is used for airfields for a number of reasons. It has a 15 ft wide rotary mower
and a rake and harrow attachment and a Rototiller attachment. All of these
attachments have specific requirements that they fulfill and most of these are
FAA requirements. The City has to keep areas mowed. There are hundreds of
acres of grass in that area. The City is responsible to smooth the runway safety
areas, which is done with a rake and harrow. Other runway safety areas are
done with the Rototiller. The City has all of the attachments and does not need
to purchase them.
Cyr moved onto the next two items, which are the Design and Engineer Services.
There are two separate contracts that the City needs to look at for the Airport.
One is specific to AIP projects (Airport Improvement Plan Projects) and the other
is PFC projects (Passenger Facility Charges Projects). The City gets a significant
amount of Federal and State grant money for any number of Infrastructure
Improvements at the Airport of which 97 ½% are funded by the AIP grants.
The other 2½% is picked up by the Airport. However, it is a long and
complicated process of getting the application in for AIP grants. It is a
requirement to have the design and engineering firm on board making these
applications; to physically design them; do the bid documents; review all of the
bids that are received; and then do on-site inspection, follow-up with the
construction, and then lastly submit all the paperwork to the Feds and the State
to receive the reimbursement. The PFC legislation came into effect where
airports are able to assess a charge or fee to the passengers. The Airport has to
file a plan with the Federal Government that says that the airport will collect
Passenger Facility Charges and will be used for X, Y & Z and the airlines have to
sign off on these charges. The City has reached the end of its first plan, and if it
wants to continue to receive PFC money, it will have to file the next plan. Again,
this will require having the design and engineering firm on board to help with the
application, etc. Responding to Stone, Cyr said the City typically goes out to
anyone on the City’s bidders list for engineering services and advertise it on the
web and in the papers, etc. Barrett commented that this is very specialized and
this is not the kind of work that the local engineering firms do. He stated that it
is a horrible process that the Federal government requires. The process requires
that once the engineering firm is on board, they tell the City what the costs will
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be to engineer a project and then it is sent out to a 3 party engineer to review
for being reasonable and negotiate back and forth and hope it is reasonable.
Cyr went on to the “Near Term Bids and Proposals”. The Waterfront Park has
been talked about and appropriations have been approved. The next one is
Commissioning agent for the Police Station. Since opening the Police station, the
City has experienced a number of issues relating to the HVAC system. The city
has been working with the architect/engineer and the GC in the attempt to
resolve these issues. The staff believes that a hiring a commissioning agent to
review them is needed. The City is pursuing the option of asking
architect/engineer and the general contractor to pay for it. The City may have
to go out to bid as it is estimated to cost over $10,000. Nealley asked if the City
should ask the architect and engineer to try some possible fixes before going out
to bid. Cyr responded by saying that the City has tried several fixes and we have
them on site quite often and there have been times lawyers were also present. It
was asked if the work had been done during the construction of the building
would be ahead of where we are now? Barrett agreed and said that the City
does that now. With the LEEDS process that the City as adopted, it is a
requirement. Although there were a number of energy conservation things built
into the Police Station, this was not included and should have been. This is
something that the City will do in the future. Some of the problems have been
resolved, but the ability to control temperature is the biggest problem currently.
Cyr said this is costing the City money and the hope is that the City find out what
the problem is, whether it is the installation, manufacturer, etc and then the City
can make headway with appropriate parties. Staff feels that the issues were
brought up to the architect/ engineer well within the warranty period. The City
is holding a portion of the retainage.
The next item is the deicing unit. The City has 3 of them at the airport and as
part of the FY08 budget the Council appropriated $292,000 to replace one of the
older units. They are experiencing continuous maintenance issues. The new
models have a number of enhancements such as; increased safety for the
operators; enclosed cap; more environmentally friendly in that there is a hot air
option first so that the hot air can be sprayed across the airplane and clear the
snow without having to use deicing fluid. They are also available with extended
boom heights to serve the larger aircraft. Currently the boom is not long enough
to do the best job on the larger aircraft. This item had recently gone out to bid
but for a number of reasons, the City determined that it was in the best interest
to reject the bid. There were issues with the timing of deliver, price, freight, and
there was only one response. The City would like to order a unit that has already
been built or see if there are any refurbished items that can be taken advantage
of. If this is to go forward, the City would still need to this in May or early June
in order to be sure that it was one site and that staff was properly trained prior
to winter.
The next item is a Tow Barless tractor which is the equipment that the airport
uses to push and tow large aircraft of the gates. The current unit is 25 years old
and has been refurbished but it is experiencing engine problems. In June of
2008 the Council appropriated $700,000 to purchase this unit. The City would
ask for bids on new and pre-owned units. There are limited numbers of
manufactures of this type of unit.
The last item not on the agenda is the maintenance plan for Pickering Square
Garage that will be provided by Becker Structure for the next 3 years. Becker
Structure has done this project for the City for the last 2 fiscal years. The City
had discussed the anticipation of issuing a request for bid for the maintenance
for Pickering Square for a 3 year period so that the City would not be in the
position of starting over every year.
Cyr made the point that as she becomes aware of things, she will bring them
forward. Stone said that unless someone objects strongly the committee will
continue to do this.
Meeting adjourned at 6:25 p.m.