HomeMy WebLinkAbout2008-12-15 Finance Committee Minutes
FINANCE COMMITTEE
December 15, 2008
Minutes
Councilors: Stone, Blanchette, D’Errico, Wheeler, Palmer, Gratwick, Nealley
Staff: Cyr, Barrett, Bilancia, Ring, Dubois, Caron
Others: Parke Clemons, Jack Burgess, Todd Neal
1. Consent Agenda
A motion was made and seconded to approve the Consent Agenda item a.
a. Quitclaim Deed – Tracy – 1295 & 1297 Ohio Street
2. Bids/Purchasing
a. Proposal – Pickering Square Garage – Phases 3-5 – Becker Structural
Engineers
In 2005, the City recognized needed maintenance to the Pickering Square Garage.
The City needed to keep it running efficiently and effectively and, at that point, went
out to bid and hired Becker Structural Engineer who performed a full maintenance
study in 2006. Based on that, Phase I and Phase II started in 2007-08 to do the
repairs. Prior to that, the City had attempted repairs on its own thinking it knew
what needed to be done. Earlier in 2007, staff asked the City for permission to use
CSI, the contractor who did the first year repair and just completed the second year.
Staff then asked Becker to submit a proposal to do the maintenance plans for
Phases III, IV and V. Becker has the best knowledge and handle of the situation.
The three-year proposal is $50,700. The fees are on the same basis in Phase I and
II with no cost increases. Staff recommended that a contract be executed with
Becker do to Phases III, IV and V of the Pickering Square Garage maintenance. Cyr
pointed out that the City anticipates spending close to $1M over the next three years
for continued improvements and upgrades.
Responding to Blanchette, Cyr said Becker will look at what’s been done in their
initial maintenance audit provided to the City. Becker will review the audit and set
the work plan and the bid specs for the next three phases.
Ring noted the garage is approaching 20 years in its life. He said that if the
investment isn’t made the garage will fall short of its useful life. He noted that the
proposal amounts to about 5% of the value of the estimated construction costs.
Gratwick clarified that Becker would recommend best practices. Ring said there are
a number of maintenance and service items. Becker has identified the best way to
deal with deteriorated elements. Ring is pleased with their work.
Wheeler asked what the average cost of annual regular maintenance and
operations, what is the average annual revenue stream, and how close to capacity is
the patronage. Parke Clemons said the capacity is at about 90%. Barrett noted that
the total expenditure budget is approximately $1.7M which covers the entire Parking
Fund. Blanchette asked for a detailed breakdown. Cyr will provide it and had left
the meeting to retrieve the information. In response to Stone, Wheeler said his
questions were strictly for informational purposes. Cyr said the operating revenue
for Pickering Square is $423,000 and the parking garage is 80% of the fee paid to
Republic Parking. The actual cost for Pickering Square approximates $250,000/
annually. The debt service is significant. The General Fund subsidizes the Parking
Fund to make up for the debt service, which is declining at an expected rate. In
response to Wheeler, Cyr said the City does not pay maintenance costs which is why
the City is at the point of the needed repairs. Wheeler asked about snow removal
from the top level and Republic invoices the City. Wheeler said the City is now
paying for the lack of regular maintenance or maintenance problems that have
cropped up that were not anticipated or foreseen. Barrett said it is a combination of
things that are now being paid for. There were some issues involving the initial
design of the garage; i.e. the clip issue. Secondly, as the garage approaches 20
years, there are maintenance items that automatically arise; i.e. painting. Becker,
along with its overall evaluation and providing a five-year maintenance plan, has
also laid out a longer term maintenance plan which identifies what needs to be done
on a continuing basis. Wheeler said that the maintenance plan should have
probably been started ten years ago. Barrett said the work probably should have
been started 5 years after the Garage became operational. Some issues were
brought forward but the City wasn’t certain how to solve some of the problems.
Blanchette said it took ten years for people to become accustomed to using a
parking garage. She agreed that a maintenance stipulation should have been
included within the budget from the onset. She asked about the impact of Eastern
Maine Healthcare opening up their garage going to affect the City’s revenue.
Clemons said there will be an impact, and Republic currently receives about
$8,600/month from EMH. On the flipside, the timing is good with the new court
system construction.
Nealley asked the total annual subsidy including debt service and the revenue
generated. Barrett replied that the current subsidy is approximately $260,000 down
from $408,000 when the garage first opened. The improvements are being paid
through the Downtown Tax Increment Financing District so the City is not adding
additional debt to the Parking Fund. Cyr said that last year’s subsidy decreased by
$30,000. Nealley asked about the 90% capacity and asked about marketing to
bring the number to 100% capacity. Clemons said the Parking Advisory Committee
deals with capacity issues. At 100%, there is no room to grow. The Parking
Committee manages the City’s parking inventory of 13 lots. Clemons said there
should always be a level of vacancy unless some other facility is in the pipeline.
Palmer spoke about the positive aspects of the parking garage.
A motion was made and seconded to approve staff’s recommendation. Blanchette
suggested that before the budget process begins for the upcoming year that the
Finance Committee looks at the ins and the outs of the parking garage and what the
City needs to do to plan ahead for future parking needs. Stone asked Cyr to add it
to the agenda in mid to late January.
b. Review of Request to Issue Request for Design/Build Proposals for the
Replacement of Columbia Street Parking Deck
Cyr stated that the Columbia Street Parking Deck has been deteriorating for a
number of years. In 2004, Ames Engineering was hired to provide some solutions
for the deterioration. In 2005, Public Works did some of the work based on the
specs provided by Ames. Ames at that time indicated that major repairs would be
necessary but realized that it wouldn’t significantly extend the life of the structure
sufficiently to spend $300,000 to repair the structure’s top deck. Staff went out to
bid and the bids came in at $1.6M. Staff asked the Committee at that time for
permission to ask Becker to do a condition assessment. In the end, Becker’s
recommendation was to demolish the current structure with a modified design.
Becker did stress that until the structure is demolished the total scope of the work
will not be known. Staff then began to discuss a design/build process versus a hard
bid. Staff is securing permission from the Committee to issue a RFP for design/build
services to replace the Columbia Street Parking Deck.
Blanchette asked about the City’s experience with design/build responses. Cyr said
the first project to be done is the Station 6 Fire program. Responding to Blanchette,
Cyr said the project is on schedule, the actual contracts are coming in at or below
their estimates, and every indication shows that they will not hit their guaranteed
maximum price in their contract. In the end, she feels that it will come in less than
anticipated. The grand opening will be in April.
Gratwick asked why the Columbia Street site has problems since it is where the
former City Hall was located. He asked if the Committee will be able to look at the
proposed design. He asked about putting good money up front to insure a quality
product.
Ring said that this structure had received some major upgrades in the 1990’s. He
said that back in 2004 when staff was talking about repairs to the Columbia Street
structure and realized it would be more than a $300,000 deck repair, careful
discussion took place about rebuilding and the useful life. Based on the estimated
cost of $850,000 it seemed reasonable for the projected length of time. When the
bids came back nearly doubled, obviously the City took a different position. Barrett
said that the Committee will be shown drawings and pictures of the project.
Gratwick talked about a facility that would have a long lifespan. Ring said rebuilding
the entire project would insure a better quality facility. Barrett said that
maintenance and deterioration are always part of parking facilities. The current
structure is 40 plus years old. It is unlikely that more than 40 years would be
obtained with a parking structure. It could probably be stretched with ongoing
maintenance.
Responding to Nealley, Bilancia said that the Columbia Street parking area is one of
the highest demands and commands one of the highest per month rates. Even
when the court house moves, she feels it will still continue to be in high demand.
Clemons said it is approximately $16,000/space for the addition to the parking
garage.
Stone said he would like to see discussion on the cost of this project, on the cost of
tearing down the former police station and perhaps use it for parking. Barrett said
many of these options have been discussed by the parking committee and by staff.
The next structure will most likely be in the Abbott Square area. After the Columbia
Street deck is rebuilt and the former police station is taken down, the City will have
the ability to add surface parking in that area. Funding was requested and included
this year to do a preliminary evaluation of the possibility of decking over lower
Abbott Square as a first step for additional parking in that area. Clemons said cost
analyses have been performed for the past ten years for the Columbia Street Deck
and Abbott Square. Abbott Square came in at $33,000/space because space is lost
in order to gain space. The return investment on the Columbia Street deck will be
much quicker than other locations. Clemons feels that there are not a lot of options
for the deck. It needs replacement or closure.
Gratwick said that Clemons has a good overview presentation. He also spoke of his
membership on the Parking Advisory Committee. In response to Gratwick, Barrett
said that staff is requesting permission to issue a request for proposals for
design/build process.
Blanchette made a motion to approve staff’s recommendation. It was seconded by
Nealley.
Palmer agreed that the Columbia Street Deck replacement needs to be better
structurally and aesthetically than what is currently in place. He agreed with
D’Errico that the pigeon problem needs to be addressed. He also agreed with Stone
that the City needs to make certain this is the best place to put its dollars in terms
of reconstruction. He would like to see the full Council receive an update on
parking.
Blanchette said that if the Columbia Street Deck is falling down it is the City
Council’s fault. It sets the budget every year. She spoke about the Fleet
Maintenance Replacement Fund which has proven to be most effective. She would
like the Council to consider as part of their upcoming budget sessions to start a
reserve fund for the City’s parking surfaces. If the structure cannot be fixed, it needs
to be closed, she stated. She is concerned about safety issues. Stone asked Cyr to
return to the Committee in January for a broader discussion regarding parking.
c. Council Order – Contract for Elevator & Escalator Maintenance – BIA -
$60,096/year This item was tabled.
3. Consolidation of Polling Places for Special Elections
Dubois said that in June of 2009 and 2010 there will be a school budget validation
vote as part of the School Budget Consolidation process recently passed by the
State. Typically on special elections the voter turn-out is particularly low, usually
10% or less. In the primary election, there was a 12% turnout and the year prior
with just a referendum election there was a 7% turnout. She requested the
Committee to consider returning the number of polling places to one on special
elections. The Ordinance designates that there be one polling place per legislative
district and suggested the wording could be changed to one polling place per
legislative district except for special elections. The Council could set the polling
places prior to each election. Several Maine municipalities use one polling place for
special elections such as this.
Responding to Wheeler, Dubois said there would still be early voting available.
Blanchette would like to see one standard polling place at the Bangor Civic Center
for every election held in the City of Bangor. She made a motion, seconded by
Palmer, to bring the suggestion to full Council for their review and vote.
Dubois said in order to have one polling place for the June 2009 election the polling
place has to be set 60 days prior to June. Barrett said the normal process would be
to have an item on a Council agenda for first reading and referral. When the City
changed from eight to four polling places three years ago, Dubois worked with a
group of citizens from the community and individuals who represented political
parties. He suggested Dubois meet with the group again to get their feedback prior
to having the item placed on a committee agenda for discussion purposes.
Blanchette said that if the item goes forward to Council it could include a committee
a date certain for it to return to a committee. It would allow Dubois time to work on
the project.
Stone noted that the vote was unanimous.
4. Council Resolve 09-020, Appropriating $4,000 for Audio
Improvements in the City Council Chambers
A motion was made and seconded to recommend approval to the full Council.
5. Racino (Arena) Fund Update
Cyr said there are two sources of revenue from the racino operation. One is what is
considered rent and the other is a host community fee, which is paid to the City
from the State. Prior to the racino opening, the Council established a special fund
for all of these monies to be deposited into and the money was to be used
specifically for construction of a new arena/meeting facility to replace the current
auditorium and civic center as well as costs incurred in locating the racino
operations. Those reimbursements have been made to date.
In 2005 staff did some initial financial projections as to what was expected to
accumulate over time and by year, and Cyr included that information with the
committee’s packet. For 2006, the City took in $506,000 versus estimated
$325,000; for 2007 the City anticipated to be at an ending balance of $1, 575,000
and was actually at $1,686,000. At this point, as of June 30, 2008, there was nearly
$3.4M in the racino fund and the projection had been $2.9M. The major expenses
from the account have been reimbursement to the City for costs incurred (legal and
lobbyist) to actually get the operation up and running and another large portion was
to relocate the gaming facility to the other side of Main Street.
On the revenue side for 2006 and 2007, revenues were about 20% greater than
anticipated. It dropped off some in 2008 and went to 14% through June 30, 2008.
In the new facility, in 2009 revenue is expected to be about 25% below the revised
estimates. With drop off in the economy, Palmer felt it is important to keep this
information in front of the Finance Committee and the Special Committee on Arena
Implementation.
Cyr said that in the six months since June 30, 2008, another $977,000 has been
received.
Gratwick asked how much is needed to start a new arena. Cyr said the higher the
better. It depends on the price of the facility -- $60M, $80M or $100M. She said
that the projections have never included private dollars or grant money. The
original projections did assume there would be $7M-$10M before the project would
be started.
Stone asked about the debt service on $70M. Cyr said the projections have been
over 20 years. Cyr said on average it would be 7-8% on average annually or roughly
$5M/year, which includes principal.
Nealley said he would like to see the first full year of the new facility in operation
providing significant revenue for a better indication for projection. In response to
Nealley, Cyr said the financial information is always kept in front of the Special
Arena Committee and that she would be setting up a meeting of the Special
Committee’s financial subcommittee within the next few weeks. The City has the
ability to amortize debt up to 30 years. She has always been conservative picking
the 20 year approach.
Blanchette said that Penn National will appear before the Gambling Control Board on
December 18 to obtain authorization to open the slots on 8 am on Sunday
mornings. If this passes and they do open on Sunday mornings, she requested that
three months from now that another report be provided regarding revenue. Barrett
said that Penn has already made estimates that it would produce an additional $1M
in revenue to the state which would approximate $2M total.
Blanchette asked when the City last spent $70M on any project. Cyr said never.
Blanchette said the City should look to go out for 30 years. Cyr said in order to
bond at that level, the City would have to go to the State Legislature to get the
statutory bonding authorized raised.
Cyr said the City assumed it would see increased slot revenue to $2.9M. On an
average year, based on the way the temporary facility worked, $1.4M would have
been expected for the first six months of the fiscal year. It will be somewhere
around $1.12M. Wheeler asked how much would be in the racino fund if the 60%
increase remains consistent. Cyr said $2.4M should be added.
Before adjourning, Blanchette noted her absence at the next evening’s TIC
Committee and that she had asked Palmer to chair it.
A motion was made and seconded to adjourn at 6:25 pm.