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HomeMy WebLinkAbout2008-04-07 Finance Committee Minutes FINANCE COMMITTEE April 7, 2008 Minutes Councilors: Stone, Hawes, D’Errico, Farrington, Gratwick, Palmer Staff: Barrett, Cyr, Dawes, Birch 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda items. Palmer asked for details on item g. Dawes stated that the Airport had two older ½ ton vans, which needed to be replaced. The Airport had $40,000 for the purchase. He recommended and purchased two used vans with fairly low mileage. a. Quitclaim Deed – Hewes – 26 Bower Street b. Quitclaim Deed – Marston/Wells Fargo – 75 Division Street c. Quitclaim Deed – Hill/Carr – 112 Elm Street d. Quitclaim Deed – Archer – 666 Finson Road e. Quitclaim Deed – MacDonald – 9 Heather Road f. Quitclaim Deed – Kellehar – 1343 Ohio Street g. Update on Used Vehicle Purchase – Airport 2. Agreement with University of Maine Last year, Cyr noted that the University approached the City to install the head-end of a fiber cable into City Hall. This has been completed. The University now wants to connect its offices at 6 Central Street with the cable head-end, which is located in the City Hall’s basement. It will require the installation of some small racks, and it will be totally separate from the City’s network. An agreement is needed to allow the University access to the building to service their equipment as needed. Staff recommended that the City enter into a lease agreement with the University that governs their usage and access subject to the approval of the City Solicitor. A motion was made and seconded to approve staff’s recommendation. 3. Review of Service Purchased from Employee A few months back, Cyr said that anytime the City does business with an employee or the Council that is below the level that would normally come before the Council or Finance Committee, the City Manager directed staff to bring the item to the Finance Committee to make them aware of the activity so that questions do not arise in the future. Cyr noted that this issue has also been referred to the Board of Ethics for th further review at their April 15 meeting. Until the Board recommends a procedure, staff will bring each item to the Finance Committee. Cyr said there is a very small number of individuals involved – she estimated 5 or less. The Board of Ethics needs to clarify at what point it would become an issue. Farrington stressed that the staff needs to use their judgment and bring issues before the Committee as they deem appropriate. If the Board of Ethics does not come forward with any issue, Farrington recommended approval. Barrett said that anything purchased over $10,000 comes to the Finance Committee. It goes through the bid process and is then awarded. He basically is suggesting that anything under that amount performed by a City employee/Council member, come before this Committee. He thinks it is unclear as to how far down in an organization one needs to go. He cited the example of Hawes working for EMMC as well as Councilor Blanchette’s past employment at Hannaford. He feels strongly that the Board needs to provide guidance to the City in this area. Palmer said he is most interested in goods and services bought and sold. It all needs to be above board no matter the dollar amount involved. Cyr said this item was for information only and that Committee action was not needed. She spoke about the Fire Department employee who provides seamstress repair for the Department. 4. Assessor’s Update Birch referred to information from the Office of Federal Housing price index indicating the nationwide housing market status and where Maine fits into it. Maine continues to see appreciation rather than a complete negative loss of valuation up through February of this year. Bangor’s valuations are not fluctuating as much as the new media reports. In addition, Bangor has started to perform its sales ratio analysis for the upcoming tax year. In his 17 year tenure, Birch said this is the first time he has seen a sizeable number of areas in the City that are going to see a reduction as well as no changes. The areas are near the Golf Course, the Capehart area and in-town urban area on the east side of the City, along Main Street to Third Street, Hammond Street to the I-95 over to Union Street, and large sections out beyond the interstate. To reach the conclusions, his department ran 98 sales ratios three specific times. 8 neighborhoods will see a negative adjustment; 27 will see no change; further studies are being completed on 13 neighborhoods going beyond sales and into multiple listings and actually comparing sales with current listings. th The residential valuations should be completed by April 18. Speaking of commercial districts, using Marshall and Swift, all will see an 8-9% increase. For the first time, he has a quantified number of commercial sales on which he will make land adjustments specifically in the Stillwater and Hogan Road areas and Broadway. The industrial properties will see an increase of commercial land valuations as well. Birch will bring the final numbers back to the Committee in May. Birch spoke about the BETE program – Business Equipment Tax Exemption – which st became effective April 1 of this year. He had originally identified 368 eligible accounts for exemption and 140 have returned declarations. Of those, 22 new exemptions have been issued by Assessing. Birch referred to a January 23 memo from Rod McKay outlining new and on-going projects in Bangor. Those projects will add $87,802,400 in new assessments for next year. Many projects listed by McKay have not yet commenced or have just broken ground. For the racino, Assessing staff has walked through for an assessment. For the first year, he has coordinated the completion of status with the folks on site and they agree with the percentage adjustment. $69M in new valuation will be generated from the racino itself. It is 80% completed, the parking garage is 100% assessment completed and the hotel has been set at 50%. Annually, Birch provides a TIF District summary. Jordan’s Meat and the Waterworks have been removed. The Penjajawoc Marsh/Mall Management and the Mall Area Traffic Infrastructure Municipal District have been added. Gratwick asked about the disparity between residential and commercial valuation rates. Birch said they are two distinct classes of property. There has been a lot of activity in the commercial areas of the Mall and Broadway. Responding to Gratwick, Birch said gaming facilities are not eligible for the BETE exemptions. Barrett said for a number of years residential property valuations have increased more rapidly than commercial. This coming year will start to redress a growing imbalance between the two classifications. Some parts of the country have seen 15- 20% decline in residential values. Bangor isn’t seeing the same level of foreclosure st activity as other areas. Birch noted that since January 1, 11 new exemptions have been issued for property that qualified under the Maine Property Tax Law. These were properties that were previously on the tax roll and now will be exempt. The valuation is in the $2M range. Responding to Farrington, Barrett said that $2M is a relatively small impact on a $2 billion dollar tax base. He said that tax exempt properties might add a 10% shift to the taxpayer. Bangor has a higher than average concentration of tax exempt properties.