HomeMy WebLinkAbout2009-05-04 Finance Committee Minutes
FINANCE COMMITTEE
May 4, 2009
Minutes
Councilors: Stone, Wheeler, D’Errico, Blanchette, Bronson, Palmer,
Hawes, Nealley
Staff: Barrett, Cyr, Little, Birch
Committee Chair Stone noted that item 4 would be taken up out of sequence.
1. Consent Agenda
A motion was made and seconded to approve the Consent Agenda.
a. Quitclaim Deed – 29 I Street Birch Hill Estates
2. Bids/Purchasing
a. Lawn Maintenance Services – Ban Air – Levant Landscaping -
$31,800
Cyr noted that BanAir is a private corporation that manages all of the rental
property in and around the Airport. Historically, landscaping is bid on a
three-year basis. Four bid responses were received and the
recommendation is to award the three-year contract Levant Landscaping in
the amount of $31,800 over the total three-year period. The vendor has
been successful for the last two times the item was placed out to bid, and
the City has been pleased with their performance. A motion was made and
seconded to approve staff recommendation.
b. Update on Pending Bid
Responding to Stone, Cyr said the BIA Advertising/Marketing and PR firms
will be interviewed beginning the middle of May.
There are two pending bids and a third one has been added since the
Committee had received its agenda packet.
The first is the fire tanker. Back in January, an appropriation was authorized
of just under $185,000 in Emergency Management Grant funds with a
$20,500 local match, which was available in the Fire Equipment Reserve to
replace the tanker. The current unit is a handmade, in house shop piece of
equipment with older parts and safety issues. Part of the grant requirement
is that the new piece of equipment be placed in service by December 2009.
In order to meet that deadline, specs need to be put out for bid shortly.
Bronson advocated that staff move forward as quickly as possible and
Nealley agreed.
The next involves the Airport. The first is for repaving two areas. One is
Godfrey Boulevard from Maine Avenue up to the entrance and loading area
of the domestic terminal. The other is the parking lot at Eldur Corp, which is
the building on the right hand side at the intersection of Griffin Avenue and
Maine Avenue. Responding to D’Errico, Barrett said that he would check
with Ring about the Airport paying for some of the wires that string across
from the street lights. D’Errico noted that it is not aesthetically pleasing.
The next item is ground power units at BIA. The Airport would like to
purchase two units to replace the current two 1977 units with over 10,000
working hours on each. One has been decommissioned and at this point is
being used as parts. The two new units were approved as part of the FY09
budget process. The units supply electrical power to aircraft during servicing
and are a vital component of the ground handling service provided by the
Airport to its customers. The current two units have an existing capacity of
90 KVA and they want to replace them with two 140 KVA. The 90 KVA is not
sufficient for the larger aircraft. D’Errico mentioned that the cost of
providing this service to the airlines is included in BIA’s ground handling
package.
3. Assessors Update
Birch said that several times during the course of the year he provides an
update to the Finance Committee as to the valuation status since the prior
year’s commitment in July 2008. Each individual property taxpayer is well
aware of the different media blitzes pertaining to the poor real estate market.
The Assessor’s responsibility is to assure the Council that the valuations are
as near to 100% as possible.
He referred to the Office of Federal Housing Enterprise Oversight in
Washington which tracks the real estate market by individual region,
individual state, and they utilized Fannie Mae, Fannie Mac as financial aids to
track all of the different purchases and refinances in the country. He is
nearing completion of adjustments for next year’s commitment. One of the
primary issues is how Assessors verify legitimate transactions in the down
market. Assessors are urged to track the market conditions over a period of
time rather than over react and make adjustments upward or downward too
soon. From July to December 2008, Birch’s Department performed additional
sales ratio analysis and, up through November, Bangor was still seeing an
appreciation in valuation. It slipped slightly in December and the latest two
reports indicate it has slipped further but March showed positive indication
showing a 1.7% increase. The first requirement of a legal assessment shall
be that it is uniform according to Maine Property Tax Law, Title 36, Section
327.1. Assessors need to have a ratio of 70% and a quality rating of 20 or
less. Bangor’s Assessing Department has met all of the requirements.
The final adjustments for the upcoming tax year utilize the sales analysis
from July 2007 to June 30, 2008. There were a reduced number of sales but
there was sufficient numbers to draw some conclusions. Birch has met with
all three of his Department’s Appraisers and has completed a final review on
all neighborhoods. There are 101 residential neighborhoods. For the most
part, single families, condominiums, mobile homes for the upcoming tax year
will see no increase in the property valuation. The single family homes
include the mobile homes on their own property and as assessment ratio of
93.2% with a quality rating of 11.1 was finalized.
Regarding commercial, industrial and two plus apartments, in January 2009
the ratio was 89% with a rating of 18. Since then, the Assessing Department
has made the Marshall and Swift Commercial file update using the March
release and used a local multiplier to adjust valuations in order for
commercial to be uniform with residential.
Comparing the nation, the region, Maine and specifically Bangor, Birch said
that statistical information show that valuations are improving and it is not as
severe as what the news media may report. Barrett said that given past
history, the City has generally kept assessed values somewhat below the
market.
Birch referred to an update from the Maine Real Estate information system
which, as of March 23 of this year, reported that the activity of the total sales
is significantly down (21.98%) and also, because the activity is down, the
median sale of price of the individual homes is also down. He noted that
Maine banks have money to lend and are doing so at record low interest
rates. He also provided information about a new federal tax credit of $8,000
for new home buyers and details are available at
www.yourpieceofmaine.com.
Regarding personal property declaration forms, 2,770 were mailed from
Assessing and as of April 22, 1,716 have been received. Over 1,500 have
been processed. He thinks that the 65% return rate will be exceeded. Birch
also reviewed several departmental projects.
Responding to Stone, Cyr agreed that individuals are not aware of the
different opportunities that may exist to their financial benefit. She felt that it
would be better to approach the local banks to determine if there is an
interest. Space could be provided at City Hall. Cyr said she will give it some
thought and report back. She also talked about placing information on the
City’s Government Channel.
4. Revision to City’s Accounts Payable Process
At the request of Councilor Stone, Little and the Finance Director have been
discussing options for potential savings for the City in its processing of
accounts payable. One option is for electronic payments through the ACH
process and the other is to issue payable checks bi-weekly or bi-monthly.
The current method is on a weekly basis. Because the current operating
system does not have the ability to handle the Automated Clearinghouse Files
(ACH), it would cost the City in the range of $15,000-$27,000 to modify the
current operating system. In their discussions, staff concentrated on the bi-
weekly or bi-monthly. Approximately 160 fewer checks would be printed on a
monthly basis and save $1,200/year in supply costs, printing, cost of checks,
etc. Weekly payable amounts are around $930,000, and the money would
remain in the bank account for an extra 7 days and, even at a 1% interest
rate, it would generate $4,600 in interest earnings on an annual basis. Staff
would like to start handling accounts payable checks twice a month. Once
the operating system is upgraded, there is a possibility of electronic payments
in the future.
Stone applauded staff for their efforts. Stone also noted that Councilor
Nealley had joined the meeting.
Responding to Blanchette, Cyr said that the City’s goal is to pay its bills close
to the due date and not a month in advance. Vendors are set up with a
default date and nearly all vendors are 30-day payment. The invoice number
and invoice date is entered into the system and then calculated 30 days from
the invoice date unless it is overridden in order to make a payment due in 10
days, for example.
A motion was made and seconded to approve staff recommendation.
Adjourned at 5:40 pm