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HomeMy WebLinkAbout2008-06-16 Finance Committee Minutes FINANCE COMMITTEE June 16, 2008 Councilors: Stone, Palmer, Farrington, D’Errico, Hawes, Wheeler, Blanchette Staff: Barrett, Cyr, Ring, Wardwell, Little, Caruso, Moore, McKay Others: Clemons, Miller Family, Tom Brann, William Reed, Honeywell 1. Bids/Purchasing a. Bailing Wire – Public Works - Centennial Wire - $36,692 Cyr explained that the wire is for the recycling center. Three responses to the bid were received. The only responsive bidder was Centennial Wire. Staff had looked to obtain a firm price for at least one year and the other responders were not able to provide that price. Another vendor would require the City to take the wire in 40,000-pound loads, which is not acceptable. The budget amount is $20,000 and staff doesn’t estimate exceeding that amount. Responding to Palmer, Wardwell said that the wire should be remarketable if the City finds itself with an extra supply. A motion was made and seconded to approve staff recommendation. b. Sole Source – Water Main Extension – Waterfront Park - $44,061* Ring said that a number of waterfront changes are planned in the coming year and staff has been working with Pam Shadley Associates for design of the next phase of the waterfront expansion. Work will not start until late this year which will involve utility installations. Some of the major work will start next year. Because of the court house construction, some of the American Folk Festival venues will need to be relocated; i.e. the craft fair and the dance tent, which will be moved downriver. Both venues need water and electricity. The Bangor Water District estimates $44,000 to extend the water main by 690 feet as well as three hydrants. Blanchette asked if this information was included as part of the Committee’s agenda packet. Ring noted that this is a presentation only. The agenda noted that the material would be provided at the meeting. Because of the site location, the District may require additional training so the price might be elevated. Blanchette expressed her discomfort in appropriating the money without having anything documented in writing. In doing work with any utility, the City would execute an actual contract with a stated cost prior to proceeding. Cyr provided copies of the estimates received from the District. Farrington noted that in the past the Committee has made quick decisions based upon staff’s recommendation. Ring said that requested approval for action would be advantageous from a scheduling standpoint. It is not an absolute necessity but will provide the City an opportunity to save money. In the past, the City has contracted with the Water District, Bangor Hydro and other communication companies when savings were involved. Responding to Blanchette, Ring said there are water mains in the developed parts of the waterfront area. As the park is extended further downriver, there will be a need to extend a water main and also add hydrants. This request would represent a bulk of the eventual needs. Responding to Stone, Barrett said there is federal earmark funding for this project of approximately $250,000, a million dollars from the TIF pending Council action on June 23, and the City should be receiving a grant from the State towards this project which will be no more than a half million. The City will also be applying for another State grant which was in last November’s bond issue for waterfront projects around Maine. If this request isn’t taken care of at this time, it could create potential problems for City Engineering in realigning the upcoming Festival and some basic work for the remainder of the first phase of the waterfront development which will be done in about a year from now. Ring asked for authorization to contract with Bangor Water District for up to $50,000 for the work to be performed. A motion was made and seconded to approve staff recommendation. c. Renewal of Airport Liability Insurance – Global Aerospace - $286,800 Cyr said this is an annual renewal for BIA. Last year, there was a discussion at the Finance Committee level which resulted in a decision that the liability limits needed to be raised to $3M. The amount was included in the Airport’s FY09 budget. Responding to Palmer, Caruso said the Airport’s escalator has two emergency shutoffs. At Palmer’s request, Caruso reviewed the safety aspects of and employee training for use of the escalator. Airport shop and parking enforcement individuals are also involved in the training. Responding to D’Errico, Global has been with the City for 5-6 years. In response to Farrington, Caruso said there is one current outstanding claim which could be significant. Council has been apprised of the situation. A motion was made and seconded to recommend approval to the full Council for their action. d. Revenue Control Equipment – Airport - Cincinnati Time Recorder - $218,500 Cyr said that the Airport issued a RFP for the parking equipment at their lots. It is for new machine readable ticket dispensers, the gates, the fee computers, the management software, all of the exit terminals and hardware and software for it, credit card express lanes, the main cashier lanes, long and short term entrances, the future option of paying in the terminal. Two responses were received. Cincinnati Time Recorder of Maine was the low bidder. The original equipment is about ten years old, Clemons responded, at a cost of about $120,000 but the new equipment is updated and much more inclusive. Responding to Palmer, Clemons said there were close to 120,000 parking tickets issued annually. D’Errico said that he has suggested that Airport management take an aerial photo of the parking lot comparing spring, summer and fall seasons. In response to Stone, Clemons said when completed there will be three exit points. A motion was made and seconded to recommend approval to the full Council. A vote was taken with Councilor Stone in opposition. e. Request to Waive Bid – Phase II Garage Repairs – CSI - $208,781 Cyr said that there have been continuous struggles for the City regarding parking garage maintenance. In 2006, the City engaged the services of Becker Structural Engineers to provide a maintenance plans for the garage over its remaining useful life. After the report was received and reviewed by the Finance Committee, staff went out to bid for Phase I, the first year’s maintenance. The City engaged the services of CSI. CSI has completed the first phase and it has worked out very well. CSI approached the City with a proposal for Phase II. Becker Structural, Clemons and Bilancia have reviewed the proposal and have found the only cost increase is strictly for materials. Staff requested that the bid process be waived for Phase II and that it be awarded to CSI in the amount of $208,781. Staff plans to put together the bid package this fall to bid out the next three years of the maintenance. In response to Farrington, Clemons said when CSI bid this last year they were the lowest bidder with two higher responses received. In talking with Becker Structural, they feel that the three same bidders would bid once again. Barrett said that clip repair at the garage has been an ongoing process with less than positive outcomes. The City now seems to have a firm, CSI, who knows what they are doing. A motion was made and seconded to waive the bid process and to award the contract to CSI. f. Natural Gas Contract – City Wide Cyr said that the City has entered into an energy conservation project with Honeywell. The contract has been approved and signed. One of the first projects is to convert some of the City’s facilities to heat with natural gas. In order to do so, contracts need to be executed with Bangor Gas to provide gas service for three years and will exceed $100,000. It sets forth a minimum usage that the City will need to maintain and staff is comfortable with it. By reaching this agreement, Bangor Gas had agreed to extend their service line to each of the buildings (Public Works, BAT Bus Wash, Recycling, Central Fire, and City Hall) listed with no City’s contribution. Palmer asked about the cost savings. Cyr estimated $100,000-150,000 savings over oil in the upcoming fiscal year. A motion was made and seconded to recommend approval to the full Council. William Reed of Lincoln Street asked about the service routes planned by Bangor Gas. Barrett suggested he contact them directly and also noted a recent BDN article. Palmer suggested their web site at www.bangorgas.com. D’Errico asked if Honeywell and the FAA have been in communication regarding energy conservation. Barrett said that Honeywell is aware of the FAA regulations. 2. Taxpayer Request to Waive Interest Dave Little said that Dr. Brann is requesting a waiver for property at 190 Harlow Street, which is owned by CEL, LLC. The property is taxed for being in the Downtown Tax District and for the real estate tax, represented by two separate tax account numbers. Brann has indicated that he has contacted the Treasury Department on several occasions asking about the due taxes and each time was told that there was a zero balance. He then received a tax lien notice in May indicating a balance of just over $7,000 was past due. Little said the only way he can determine that a staff member indicated the balance was zero was if the staff member just looked at one account number. Staff does not have the authority to waive interest, and Brann is asking for a waiver $388.02 in interest due to a communication error between Brann and the City Treasurer’s Office. Little said there is not a written policy but historically the City does not waive interest. In the past, if there is a clear mistake by staff and it is documented, a waiver has been granted. Brann agreed that this situation is a basic miscommunication and that there was no intent on either side to misinform. Therefore, he asked for the interest to be rebated. Responding to Palmer, Brann said he walked into the Treasurer’s Office on four separate occasions asking for a summary of all outstanding taxes at 190 Harlow Street and was told it was in the clear. Farrington felt that Brann’s questioning was too general and staff’s response was not specific enough. Farrington favored waiver of the interest. Blanchette said she did not support the waiver. Hawes agreed with the precedent to not waive the interest. Palmer made a motion to split the interest fee between the City and Mr. Brann. The motion did not receive a second. Farrington then made a motion to waive the interest in its entirety. The motion was seconded. The vote did not receive a majority of the Committee’s approval. Blanchette made a motion to deny the requested waiver. The motion was seconded. The vote received passage. At Stone’s request, Little said that he would review this procedure in training sessions with his employees. 3. Review of Energy Audit Projects – WWTP and Airport Barrett said the Council has approved a series of energy conservation projects for the general fund buildings and have been working on BIA and WWTP. Staff wanted to brief the Committee on what is being recommended in the hopes of receiving Committee approval to proceed. At the Airport, projects are recommended at approximately $2.9M that will produce an estimate $387,000 in annual savings producing a 7.6 year payback on that investment. The payback is even better when looking at utility incentive payments that will be received back from the PUC and the fact that the City had already anticipated some of this spending as part of the Airport’s capital budget Improvement program. Barrett said there are a number of other projects which remain under evaluation at the Airport that are not ready to be included: Dock 11. Staff is also evaluating the transition to a woodchip biomass boiler system at the Airport. A final decision has not yet been made because it is not allowed under the City’s Land Development Code (which is being reviewed by the Transportation and Infrastructure Committee) and it is also a significant initial capital cost at almost $3.9M. It does offer estimated significant savings at $450,000/year. The system is also being evaluated for Bangor High School. The woodchip boiler would be placed in Dock 10 and would provide heat to the docks plus back to the domestic and international terminal buildings. The WWTP is so energy efficient that Honeywell didn’t arrive at many suggestions. A few things are projects that total $1.3M including replacement of one of the boilers which needs to be done. Staff continues to look at sludge. There is a contract where it is hauled to a compost facility. Because of associated water with it, the sludge is heavy and staff is looking at a more efficient way to remove the water to reduce its weight. It is hauled away and paid for by weight. Jim Lucy and Bob Marcotte of Honeywell were in attendance to answer questions. D’Errico asked the number of individual bills received by the Airport for electricity. Barrett said the City has over 200 electric accounts Citywide. Lucy said he would find the specific number but in their baseline development process Honeywell analyzed over 4,500 invoices Citywide for forty buildings. Regarding the FAA controlled lighting, D’Errico guessed it was probably the largest Airport invoice for electricity. Marcotte said it was identified in an area for energy conservation measure. There are a certain amount of lights that have received FAA approval for replacement; others have not. The payback, however, was not below the 10 year threshold that was used as a guideline. Barrett noted that the FAA is continuing to evaluate the transition from the current lighting systems with LED lighting systems. Stone asked why the WWTP boiler system replacement is being done through Honeywell’s report and not through bonding. Barrett stated Honeywell was asked to look at everything. It possibly could be done at a cheaper price but Barrett said to remember that Honeywell is recovering the cost of its audit through the work they are doing to reduce energy costs. Responding to Stone, Barrett said he is looking for the Committee’s approval to proceed with the projects as outlined this evening and staff will return to the Committee for approval on a financing arrangement similar to what was done with the general fund and the School Department by way of entering into lease/ purchase agreements. Farrington asked about the future availability of woodchips. Lucy said they have spent time discussing the question and researching an organization in the state and at the national level which deals with those questions. He said he would he glad to share the documentation to support the investment. Maine is blessed with a lot of wood as a natural resource. A motion was made and seconded to authorize staff to proceed with the recommended projects as summarized for the Airport and WWTP. Barrett noted that staff may return to the Committee in the future with some of the projects that did not meet the 10 year threshold to rising energy costs and with the potential for a federal program, Energy Block Grant Program, that has been authorized but not yet funded. The motion was seconded. Palmer spoke about the new arena and frontloading the heating plant and pump it into the old building until the new facility is in place. 4. Draft Letter – New Post Office Location Barrett said that at the last Finance Committee meeting, there was discussion of interest on the part of a number of Council Members to see if the Post Office would continue to give consideration for the property at 190 Harlow Street. At that meeting, the Committee asked staff to prepare a letter to the Postal Service to that effect. A draft was included in the Committee’s agenda packet. Barrett pointed out several issues for the Committee’s consideration: 1) should the letter, or a similar letter, be sent; 2) suggestions included in the letter are costs associated with parking spaces and the City is proposing that they be leased to the Postal Service at the going rate; 3) whether the Council wishes to clarify its preferred position. Stone asked for Miller and Brann to address the Committee. Farrington read information from Bob Quirk, who was not available for the meeting. Quirk formulated a plan and presented it for the Post Office location, paid $4,000 for engineering firm’s assistance, and doesn’t think that the parking spaces should be taken away from Harlow Street to accommodate the Harlow Street proposal. Miller said he was asked to submit a proposal in a timely manner meeting the requirements of the Post Office. He is concerned that it is after the fact that the Club Gemini building is now being considered. Now that two sites have been identified, Miller’s and Quirk’s, the City is now indicating that it can work with the Harlow Street site regarding parking. It seems to be a flawed process, Miller said. Brann said he also submitted a proposal on time and the Post Office sent a review team to check the facilities. Brann did not bring up the parking issue but thought that someone in the City brought the parking issue to the attention of the postal service. Mike Mitchell, Officer in Charge for Bangor Post Office, addressed the Committee. He said the City Council has been very supportive of the postal service. Stone said he asked for the draft letter. In the beginning with the Harlow Street property, he didn’t think that all of the pieces were in place regarding parking. He thinks that the postal service needs to be downtown. Farrington said he doesn’t want the overall parking issue to be hurt by removing 40 spaces in terms of long term parking plans. Farrington said the City should not be in a position where it does more for one over another. Blanchette said she has no issues with the letter. If the Post Office was to move to the 190 Harlow Street, she has problems that the City would maintain the required parking. The City owns the parking lot across from the current parking lot and it is not properly maintained. She is uncomfortable with the City leasing 40 primetime parking spaces. Barrett said the Alter Lot is in bad condition but the City receives no revenue from it. The Council has a difficult time spending money on the lot when it has largely been serving one building and mainly the Post Office. Parking is tight in the Abbott Square area. He said that if the City was to offer parking spaces in lower Abbott Square to the Post Office the City would probably change the Atler Lot into a permit parking lot. 20 public time-limited spaces would be moved into the Haynes Court Lot. One caveat would be an enforcement problem as people are accustomed to free parking in the Atler Lot. At some point, parking spaces need to be found for needs in that part of the City. Clemons said the area in question does have a parking deficit. GSA is going to close Sibley Court which means (78 ft. 12 ft.) would be available for parking. Someone spoke in favor of the Miller’s site comparing Bangor to Brewer’s facility. He said the only way to go would be Miller’s site – sufficient building with sufficient space. The Post Master of Brewer said their building houses 13 carrier operations plus the window. The proposed building for Bangor is for the window operation only. The square footage is done by a process in the postal service to determine what is needed. He asked about the City’s involvement and said there is a federal process in place with set timeframes. The decision is made by the postal service taking into account what is brought forward by the City, customers and residents as well as the postal service’s needs. The process for comment period as far as proposals submitted has passed. The process for commenting on the initial potential site selection passed thirty days ago. The decision making process is moving rapidly along with the postal service. If the City submits a letter, it needs to be done quickly. Stone clarified that it is the Post Office’s final decision. Palmer said if the Post Office leaves downtown he hopes at least a postal substation would be available in the downtown. One concern about parking with the downtown location is with the hill and with left-hand turns coming out of the area. He questioned liability with the current Atler Lot. There are no handicapped spaces near the Club. Stone asked for a motion to authorize the City to submit a letter recommending the Harlow Street site. Stone asked for a show of hands. Farrington continued conversation about parking needs. Blanchette talked about making Alter Lot a permit parking spot and to be properly maintained. Barrett said the City has been in lengthy discussion with the Federal Government for their planned use for the property. Barrett is in hopes that the Federal Government would supply sufficient funds to reconstruct the Atler Lot and staff has been given every indication that it is indeed possible. Again Stone asked for a show of hands regarding the motion. There was not a majority vote. The letter will not be issued. 5. Executive Session – 36 MRSA Section 841 (2) – Hardship Abatements (A) & (B) A motion was made and seconded to move into executive session. 6. Open Session – Hardship Abatement Decisions (A) & (B) A motion was made and seconded to approve staff recommendation. Committee adjourned at 6:55 pm. * Information to be provided at meeting.