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HomeMy WebLinkAbout1998-08-03 Finance Committee MinutesFumme Committee Meeting Minutes August 3, 1998 5:00 p.m. Councilors Attend'mg: Joseph Baldacci, Jim Tyler, David Leen, Monk& Crowley, Gerry Palmer Staff Attending: Edward Barrett, Ron Heller, Dave Pellegrino, Erik Stumpfal, But Doughty, Chief Cammack, Mike Dyer, Bob Ziegehaor Others Attending. a. Metal Casting Masbate &Catchbasw Components(Public Services Department) Gagne Precast of Veame ($21,153,90) Approved. b. MaMole& Catchbsain Concrete Components(Public Services Department) American Concrete 7nduaties, be. ofBangor($18,277.00) Approved 2. Purchase ofNew Chief Cammack a plained that the staff called the distributors of rescue vetdcles to see what was available and found a 1997 E450 McCoy/M71er demo through Custom Emergency Vehicles of New England ofEdsworm The cast would be $70,500.00. The department currently bas two M Coy/hhller's and is very pleased with the vehicles and the service. Councilor Crowley asked Chief Cammack how this purchase would affect Ne ongoing discussion regarding ambulance service in the community and if this purchase is needed regardless of how the discussions tum out Chief Camnmck commented that this is needed and this vehicle would be replacing a 1991 Rescue, which recently has needed $2,OW-work on it. The unit that is bang replaced will be kept as a back up. Approved. 3. Lnt Upgrade - Airport Department Bob Ziegelaarexplained that this is a planned replacement. The existing ticketing and exiting equipment at the Airport is dated. The parking rotes were increased two years ago to accommodate this updating. This is also the begin phase of a new system where the ticketing equipment will eventually be placed in the [aminal allowing passengers to pre -pay Republic Farling went through the solitiution of quotes and Bob agrees with them that the lowest cost unit is the most desirable unit and that is what gaff is recommending. The budget allocation for thisprojectisapprournmely$125,000. The cog ofthe entire system is approximately Sii5,". The higberpriced sygemwas$168,000. Approvedrecommenda[ionto Council. 4, General Electric Comoanv Loan Refinancing Erik Stumpfel gave the Committee some background on G.E. and the financial arrangements with man. G.E. has been a mans m me Airport since 1968-1969. They lease buildings from the City in two areas. Building #273 on himas Avenue and building#468 on Griflv Road. In 1993 their lease was wrineo as a 20 year lease. Everyyear since 1993 the City lms been rcquened to emend than lease sued participate in loan closings to facilitate expanded, ahogether approximately $20 million worth of expansion. The actual leader for $3 million of that money is the City of Bangor. The other $17 nation has been Ing by Fleet Bank and the actual borrower is Bangor Target Area Developmant Corporation. The City owns the lead and G.E. gets the benefit of the money because it is used for leasehold improvements and equipment purchases. The basic obligation of the note to Fleet Banc is met by an msigmmetd of rent [lust otherwise would be payable to the City of Bangor. Throughout all of these transactions, G.E.'s rent has come to be structured in a complex way. The City receives abase rent, a certain stated amount. There is mother layer of rent which goes to pay debt service on the Airport auto, and most there are two or three other layers of rem which go to meet the current debt service obligations on the vesting $17 million Ion to Bangor Target. This is a pus mm. It comes to the City, who in mm pays Target end Target pays it to Fleet In addition, pmt ofine debt service is mar: by a TIP. Since 1994 GE has had a tax increment financing plan in place which remns to them 50% of the rax increment on personal property and 1001/o of me war increment on real csmtc. That god to pay part of the debt service. What is being proposed, and there was a closing on Friday morning, is a refinancing of all me Fleet Bank notes into a single matte with a value of up to $19,2 million They advarced $17.9 nation on Friday and what is going to be taluested from the City Council is mat the City evise some of these agreements, assignments and collateral assigmnems ofrent to come mond to that new note payment. The refmmcing is to GE's advantage. It lowers the total payment obligation. It comes with a floatmg rate rather man a fixed rate win a 5 year lock in. The effect on City revewes is neutral because the provisions of the existing Ilse make mat essentially a pass. The current repayment obligation comes to the City, goes to Target goes to Fleet. That will contuse to be the case. Erik has giver Fleet a written opinion stating that anus the City takes nation on the request to revise the existing assignment, the current assignment will coves them to me extern of the payments required In those cannot assignments. They felt confident with that sndclosedon Friday. Whatthe Councnl berequestedtodoistore wmassigmrertofrmt and conditional assignment of the lade as security for the debt service on the $18.2 million obligation. Along with that, there will be an amadmmt to the G.E. lase which reflects that those 2 or 3 tins of read, which currently go to meet Fleet Bank debt service, will be reduced to a single tin. FA Barren added that the money that G.E. has borrowed has been to expand buildings which belong to the City. They borrowed the money then pay rent with me City taking a portion to pay the debt on buildings that the City own. There is residual value in the buildings and some ofthe equipment men is affixed to the budding. Edcgatedthatme TlFmdnotepaymem mat anuctured as a 20 year obligation so m the emi of that term, the City will own all of He property in fee simple and can cbarge the rent value and that will come to the Airport. Even with the assignment of rent to cover the debt service, the base rent paid to the Airport has increased through the restructuring ofthese ]cases. On the 10tq the Council will be asked to approve documents which would take the existing assignment ofrents and make it an assignment for repayment of the $18.2 million consolidated note mtherthm three separate notes. No specific action needed. Committee agreed with recommendation that this item go on the agenda for passage. 5. 00 nal Obloration Bonds and/or Notes in 6allgipalmn Thereof Levy TM1erefn—r Ron Heller explained that this is the =us] September borrowing. The County Action form lists the projects that are included in this order. Other projects include CSO projects, Bangor High School and City Nursing Facility laccems. The total borrowing will be approramately$6 million. Some of this may be privately placed depending upon the restrictions the City is subject to. Councilor Tyler asked if the overall debt picture could be laid out for the Council. Ron Heller will put the irSormation together and will include it in the next County packer, Recommend approval to Council. 6. Council Resolve Appropriation in the Education 's General Fund of I Manficipated Revenues for Ila; Rutprot of fug;hgonng Land and Providi tat Alternative Education Services Ed Barrett explained that this appropriation's for $400,000 to purchase land located on the comer of Kendusksag Avenue and Gr011m Road. Mother appropriation of S150,000 relates to alterative education services to be provided for selected middle school students. Lois Mn Holmes who arms property at 91 Kenduskeag Avenue expressed her concerns to the Committee regarding what the school department intends to do with the property and how it may affect her property. Superintendent Doughty explained that they are in preliminary stages at this pair. Nothing has been decided and it will be some time before it will be. Anyone potentially affected by what is done wi0 be notified andmvolved. Councilor Leon suggested that a transcript of this discussion be given to MIs. Holmes and that her concerns will be noted when discussions begin T, nilIve 99-311 AppoopoWing 7 580 boom the funded Equiment Ac r the Vehicles Ed Barrett explained that this is to purchase two vehicles for the school liaison program expansion into the middle schools. There correctly is a gmrt application in order the local law enforcement block gram program for $32,000. This is the money staff would lilts to use to purchase the vehicles. Staff is requesting that the Committee approve the appropriation of the fidl amount needed to buy the two vehicles. Once the grant is received, that would replace some of the money or reimburse the reserve Road for the expenditure of &a money. Approximately 10%(+/_ $4,000)willwmefromthereserve.theneatwtllcomefromthegrent Thevehiclesarenesdedby the Arne school starts. Approval. Ron Heller explained that this would formalizethe transfer offimds from the basketball floor project to the auditorium restroom project. The amount from the basketball poor fund is $63,000 and the majority ofdats would go into the restrooma. The rest would go into the Civic Coma interior which was budgeted at$100,000, stafffeels more will be needed. The auditorium roof is a new project that needs to be dome. Approved. 9. Bass Park Amoldth Canceler Crowley requested that the Committee delay this until the Bass Park Commitom and the Community, and Economic Development Committee can meet and look a the bigger picture ofwhat the futurewill hold forthe Auditorium/Civic Center business. Ed Barrett'swncernis spending $7,000 - $10,000 n do a study but is there awillingmss to address this at any time m the near future given the other needs a Bass Park. Is this study what needs to be done first? Is the City willing to borrow $1 million to put in an amphitheatre when there is a fist of $4 million worth of projects for the existing bulking? Councilor Tyler asked what could be significantly, different from the study that was done for the Blue Ox and the alternative uses? It was envisioned as a mutfi-purpose facility which was going to include a number of dates aside from baseball for outdoor concerts, etc. Ed Barrett explained that this would be a site feasibility study whereas the Blue Ox study was a marketing study. Councilor Leen commented that the only way there will be a viable project on the waterfront or Bass Parks by getting the local hotel association and the chamber together and explain to them that if the City is ever going w have a facility that's going to compete, they have to help put the pressure on the legislature to allow the City to pass a tax to build the facility. The Committee agreed to table this item until Augur& Mdse Dyer infarmW the Committee that after 3 days the Fav is up approximately 4,300 people which is 25% up over the first 3 days of had year. 10 With no farther business to discuss, the meeting adjourned.