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HomeMy WebLinkAbout2007-03-19 Finance Committee Minutes FINANCE COMMITTEE March 19, 2007 Minutes Councilor Attendance: Stone, D’Errico, Farrington, Gratwick Staff Attendance: Cyr, Barrett, Yardley, Dubois, McKay, Bolduc, Ring, Comeau, Willette, Hamer, Comeau Others: Parke Clemons Prior to starting the agenda process, Stone asked the Finance Director to talk about the bond process. Cyr said that in general the City only bonds for capital projects and is not allowed to bond for operating purposes. The City looks at a project-by-project basis. If it is $100,000 and it can be funded by reserve, the City does so. The City tends to bond projects of $250,000 and greater or if there are no other resources available. Bonds are issued for a timeframe associated with the life of the asset. The City issues General Obligation Bonds. They are issued for general fund and municipal purposes, school purposes, and enterprise fund purposes. At the end of June 2006, the City had $106,800,000 in outstanding GOB’s. Normally, the City tries not to issue more bonds than it pays off in one year. That has not been the case in the last few years and is being driven by the new police department building. The three largest projects bonded: the treatment plant in 1991, in 2003 pension obligation bonds, and the new police station. The ratio of bonded debt to assessed value is stable at 2.25% last year and is actually decreasing. Per capita debt is $2,150 per person. According to rating agencies, the City is on the lower end of debt. By State Statute, the City is allowed to have up to 15% of its last full State valuation and debt outstanding. By State Statute, the City could have up to $309M in debt outstanding. Barrett said over the last years, the City has borrowed $30M for combined sewer overflow projects to deal with environmental issues associated with wastewater treatment. Responding to Gratwick, Cyr said the downside to ratings is over the past few years the City’s revenues have declined. The City made a conscious decision to spend down its undesignated fund balance. The City also has spent down reserves in dealing with the coal tar lawsuit. Gratwick asked what the City pays for its bond rates. Cyr said it is through the bid process and usually is between 3 and 4. Barrett said the City is rated aa minus, which is the second highest rating in Maine. He talked about the various areas that rating agencies look at in a municipality. 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda with a vote of 4-0. a. Acadia Healthcare Lease of 8 Units at Park Woods 2. Bids/Purchasing a. Health & Welfare Renovations – Dunbar & Brawn - $28,900 Cyr indicated there are sufficient monies leftover from state grants and the state has indicated its approval to renovate the Health and Welfare facilities with the dollars. Bids were issued and three were received. A motion was made and seconded to approve staff’s recommendation with a vote of 4-0. b. Playground Equipment – Parks & Rec – Marturano Recreation - $47,310 Responding to Stone, Barrett explained the Community Development Block Grant program funds. They primarily have to be used to benefit low-to-moderate income individuals. There are designated City areas that meet the criteria. There are two or three eligible parks: Williams, Second Street and perhaps Coe Park. This specific request is for playground equipment at Williams Park (Hancock/Newbury Streets). The equipment should be in place by the first of the summer. A motion was made and seconded to approve staff’s recommendation with a vote of 4-0. c. Venture Way Reconstruction – Econ Dev – Sargent Corporation - $607,572 Farrington excused himself from discussion of this item due to a conflict of interest. When recently discussed at the Business and Economic Development Committee, he did the same. Cyr said that Bolduc had recently approached the BED Committee with the need to construct Venture Way providing access to the Maine Business Enterprise Park. The BED Committee decided they were interested and asked for bids. There is $328,000 in the budget for this project. Seven bids were received and the BED Committee recommended the reconstruction of Venture Way pending Finance Committee approval of the funding. Sargent Corporation is the low bidder. Cyr said the remaining funds will come from $324,000 from a sale of a lot in the Maine Business Enterprise Park and the Airport has agreed to pay for one-half of the cost to extend it to the General Aviation building. D’Errico asked if the per foot cost to reconstruct this road parallel other construction costs in the past. Ring said it is a higher unit cost than the past but it is due to construction costs which have risen over the past year or so. Responding to Gratwick, lot 1 is between the day care and the Bangor Savings Bank operation center. Cyr said the money came from the racino fund to the economic development fund. Bolduc spoke about the area which will be divided into three lots as a result of the road reconstruction. The sale proceeds will go into the economic development fund. Responding to Stone, Bolduc said the average lot sale should be $100,000 roughly. Bolduc reminded the committee that this project is more than reconstruction of the road. It includes sewer system, storm system, water system, underground electrical, streetlights, and preparation for sidewalk installation. A motion was made and seconded to approve staff’s recommendation to the full City Council with a 3-0 vote. Farrington had a conflict of interest. d. Professional Services Contract with Ames A/E for Columbia Street Parking Garage Project - $80,360 Farrington rejoined the Committee. Bates said this project has been approved as part of the downtown project listing using TIF revenues. A structural assessment study was done by Ames several years ago when the City realized the structure was reaching the end of its usefulness. It was determined in 2005 to be financially feasible to replace the upper deck as opposed to repair. The timing for the project was held off until the police department left their Court street site. The estimated cost of replacement was $850,000 at that time plus $76,500 in engineering/administration services for Ames. It has now escalated to $1.1M. Staff asked for Committee approval to contract with Ames to provide the construction documents Based on the $980,000 for estimated construction cost estimates, it would result in a fee of $80,360 plus reimbursable expenses. The proposal also provides yearly monitoring reports by Ames of the structure at a fee of $2,700/year. Gratwick asked about a guarantee/warranty. Ring addressed the concerns. There are certain standards to be adhered to for this type of project. The specifications are rigid. Responding to Gratwick, Bates said part of Ames’ current proposal is that they will not be choosing out the railings but will present choices. It will be aesthetically pleasing. A motion was made and seconded to approve staff recommendation with a 4-0 vote. Stone asked the number of parking spaces. There are currently 80 spaces and it should be the same. It is the highest paid lot, the most demanded lot in the City. Fees will be raised and will be in place for the fall opening of the structure. Current revenue approximates $50,000/annually. The amortized cost per space is slightly over $3,100/space/year. Cyr said there has never been a parking structure created that covers debt service. It will be funded through the Downtown Development TIF District revenues. It will not affect the tax rate. Responding to Stone, Ring said Ames does the design and preparation of the documents. The contractor does not do that work. Supervision on any project is important. e. Professional Services Contract with Becker Structural Engineers for Pickering Square Garage Restoration - $67,500 Bates said this is a straight maintenance project. In 2006, the City commissioned Becker Structural Engineers to perform a study to identify the maintenance requirements for the parking garage. Every precast parking structure requires maintenance to the clips that join the sections of the ramps together. Repairs have life cycles. The essential maintenance requirements were identified over the remaining useful life of the structure. In January, the BED Committee approved what was needed for initial essential repairs and Cyr has financing in place. Becker’s fee of $67,500 is for the development of contract drawings and specifications for the repairs of the entire garage and preparation of bid documents for projects to be undertaken in 2007 and 2008. It includes the construction and contract administration for the 2007 repairs. $35,000 is for phase one which is preparation of the contract bid document and $32,500 for phase two which covers contract administration. Engineering staff members will be assigned to the project as it moves forward. Responding to Gratwick, Ring said there will be 20 progress meetings in a three-month period site dealing with the contractor. Barrett said that quality control over the repairs is essential. All work will be inspected for quality and correctness. A motion was made and seconded to approve staff’s recommendation with a 4-0 vote. 3. Request to Pay Sewer Assessment by Property Transfer Hamer explained that in 1965, the City levied an assessment on the property located at 633 Essex Street for the cost of constructing the Essex Street sewer. This lien is subject to a subordinate agreement that states that the lien is not due until the property owner actually connects to the sewer line. The lien is for a total of $6,096.48. The owner is now considering a small subdivision on the parcel in question, which would entail several sewer connections. He has approached the City with an offer to pay off the lien with one of the proposed lots, specifically the eastern most 3.38 acres of the parcel, which encompasses almost 740 ft. of the abandoned Veazie railway bed just north of I-95. In addition, the owner would provide the City with a 15 ft. wide easement for a trail to be located over the existing sewer line and which will give public access to the railway bed from Essex Street. This section of the railway bed also abuts another section currently owned by the City as a part of our Essex Woods recreational area. A motion was made and seconded to approve staff’s recommendation. The item will go to full Council for final action at their meeting of March 26. 4. Discussion Regarding Bangor being a Pilot Program for Early Voting Dubois said that a 2005 Legislative resolve directed the Secretary of State to design a pilot program for early voting for the November 2008 election, a presidential election. The resolve directs that one municipality willing and able to be the pilot municipality be selected by the State. A working group of Clerks has been put together by the Secretary of State. Major concerns are security of the ballots, physical location to store ballots, staffing levels, mandatory or optional for towns, how changes would affect candidates, petition gatherers, etc. Bangor has early voting which promotes absentee voting. This early voting is quite different. A voter comes in, marks the ballot and feeds the ballot into the voting machine. Voting machines have never been used in this way – for an extended period of time. To extend election day for a one-week period, means taking the machines in and out of the vault daily. Comparing Bangor to other municipalities, absentee voting has increased by an average of 25% throughout the state. Bangor leads the state on the early voting and absentee ballot voting. Bangor is a logical choice for the early vote pilot program and Dubois recommended that Bangor offer to run the pilot program. The cost to the City will be no additional cost because the City is already offering early voting. The cost is staffing the Civic Center for an extended period of time and the City is already doing so. Farrington asked if the costs can be quantified. Barrett said the pilot program is proposed for the June election. Hamer and Heitmann recommended a change to the state legislation regarding freedom of action. There should be a change prior to the November 2007 election. Responding to Gratwick, Dubois said ultimately the major success will be to maintain the integrity of the voters in Bangor and around the state. This will require proper training for all ward clerks. The success is already in the Bangor’s numbers in absentee voting. Any pilot program will be under the supervision of the Secretary of State’s office. Barrett said the process of evaluating the proposed process is the acceptance of the political parties and the candidates is important, how the machines operate when they are plugged in and taken out for storage at day’s end, the public’s reaction, and security precautions and procedures will need to be evaluated. A motion was made and seconded to approve staff recommendation with a 3-1 vote providing that the Legal Department’s recommendations are taken care of in the State Legislation. 5. Executive Session – 1 MRSA 405 (6)(E) – Consultation with Legal Counsel – Hows Corner A motion was made and seconded to move into Executive Session.