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HomeMy WebLinkAbout1998-08-17 Finance Committee MinutesMr aua Committee Mating Minutes August 17,1998 Councilors Attending: James Tyler, Mahout Crowley, Joseph Saldacci, Gerry Panther, David l<en StaffAttending: Bdward Barren, Ron Heller, Norm Heitmum, Mary Anne Chaw Dave Pellegrino, Don Oros, Don Winslow, Bob Farrar, Charlie Mrtchelt, Penelope Olson, T.I. Marhdal, Bob Bishop 1. Executive Searsion, Povertv Abatement Sharon Baker, 114 Garland Street 829133: The Erg installment of taxes, due in September, was abmed. Ms. Baker is to contact the City in February, 1999 to assess her ability to pay the second installment ofber property taxes. 2, Fxecative Sessgom Land Cale 3. Land Sale - Anderson Tabled. 4. Matured Sewer Lien -318 Ubin S reet Staff recommends quitclaim deed. Approved. 5. Bids: a. D ) Forest By Design fOld Town ($14,950,00) Recommendation to go with low bidder a$65 per how. Approved. b. Ingalladaug Qf Dinds Book 14a Silver Ln ofOrono($617.921601 Recommendation to go with low bidder, Lou Silver, Inc. of Orono. Approved recommendation to full Couh:CI c. Car Rental Comesdona(Airport De ap rtmenr) Av4s. Budget, Hertz & National (5 year Cimustion contracts for eachl Four proposals were received for the car renal concessions. All fourproposalswere from compmdes that currently operate the Airport car rental concession. Moftlame companies have performed well over the previous five to ten years and have returned over $540,000 per year to the ahpon. AO proposals have been reviewed by maffwho, recommendrenewalofthe&veyemmntmets. Approved recommendationto Council. 2 --Resting Committee Meeting Minutes 8-17-98 d. Meal Delivery $vstem (City Nes'ng Racilirvl Direct Supply of Milwaukee. WI (S&458.71 This equipment replaces old and ime6cient meal delivery equipment that is currently used at the CNF. Recommeraimmu to go with the low bidder. Approved. e. Promote Contract Why Widel Webber Enebly Services (SU4 per sullen add-on) Recommendation to award to low bidder a$0 M per gallon The tort to obtain the gas, distribute it and take care of the terra and conditions of the contract is an additional $0.24. The $0.24 add-on will remain firm for the contract period. The rest of it will fluctuate with the Mom Bellevue price. Thin con[rac[would requve the gas wppnm to provide all labor, equipment and supplies to book up any new gas equipment that the City may acquire over the not three years. Approved. f Real Estate. Real Estate Development) Realty Exeu•tives of Range^ The three real estate companies that submitted proposals are very experienced and very Wanted in their field. One area that sets Realty Executive; apart is their current partnership with Pounds CAP. They have a knowledge of all the federal programs and Mickey Schneider of Realty Executives teaches the rousse al Persims that is a City of Burger requirement for anyone buying into these properties. Staff recommended Realty Exewtives Recommended to Council. �%r.ico nymnae.vnxuWntarrmr , This is for the competitive sale of this City's bonds this fan and was put out to proposal as staff was unhappy, with the current service. An RFP was put out and based on price, service and knowledge, staff recommends Moors & Cabot, Inc. Councilor Crowley asked staff what a fvm outside of Maine could provide that a firm in the State of Maine couldn't. He unheated he had received a can from People's Heritage Bank who reiterated to him thea experience working with municipalities and county government, Mike wanted to make sure before moving forward that the experience is there from the other firm. Finance Director Ron Heiler explained that People's has done seven deals, three of which have been bar or bond anticipation notes which are entirely diff t They have done four deals like the City wants done in thea entire history. Joe Coeburn of Moons and Cabot does four a month. Consider Baldacci understands People's concent of not being able to provide a presentation to the Council and that their bid was lower than the our of state firm. People's feel their experience is competitive. Ron Heller disagrees. Councilor Baldacci feels then because they are a local bank, the City should encourage them operations here. Ron explained that People's is the City's lead bank. Staff has been very happy with the services that they Provide in terms of the normal everyday banking relationships. But their experience does notcompmewithJoe Cuetma's. The City hosworkedwith Joe on a mother ofbond deals in the past and he has a good relationship with the rating agencies. Committee recommended tabling issue for 2 weeks =if a presentation is scheduled from both firms. Avotewasmken. Modom 3 -Finance Committee Meeting Itfrmes 8-17-98 TITrIli:97Fbd Councilor Crowley asked Ron Heller if this issue is time sensitive. Ron answered that no, bonds can be sold & any time but typically bonds have been sold in September Joe Coates ofMmers and Cabot joined the meeting at this point and it was suggested that he give the Committee a presentation - Mr. Cuetam explained that the City has asked for the RFP for frsocial advisory services and he has enjoyed the pleasure of serving the City since 1988. He believes he brings a level of imtitutionalhistorytothe City. Moors and Cabot would liketo continue providing their services tome CitycfBaagor. Ttieyhavebeenablewmai tan the City's Aarativg,wMchisavexmUcrat victory. He feels that Bangor is antjust part of eastern Maine, but escompesses an extremely broad detogmpldc base. Bangor is looked at as the hub ofEastem and Northern New England. Ed Barrett asked Mr. Cuemmm explain to the Creature" what a financial advisor does. Mr. Cusses uxplamed the for scope of the job is to put together a financing team of the bond counsel and this City's Wersml and internal aadaors. They would than prepare, structure and size the issue. Following that, a schdule is developed as to when to come to market at leant sic weeks in advance. Apersptt[us is also prepared which is the offering circular. This information is then seat to approximately 150-200 brokers and dealers, bond insurance companies and iostibutioml buyers to ad the marker up. In the financings he has done with the City, they have also put an ad in the Bangor Daily News and the Mame Sunday Telegram notifying the canstituems that the issue is forthcoming. Bidders are then invited to City Hall. Bids are accepted on behalf of the City as a third party. The bids are calculated, shown to the City and they the City is advised of the bid that is the lowest price yet also conforms with the specs. Following that, they would work with the hoed counsel and the underwriter to make sure all the parties understand the closing arrangements. Mr. Coerera brings with him 26 years ofesperience and expertise. He has worked in several markets and f"Is be canbriog a broad perspective to the City. Councilor Palmerasked Mr. Content the history of Mours and Cabot and his background with that company. Mr. Cuetem explained the history of the company to the Committee. Councilor Palmer asked what would happen if Mr. Cuetma were out of position with regard to this atmagiment and if there is a backup plan. Mr. Custera explained that he is developing staff. Currently, he has one person who is a under nod's in the process ofgetdng m admin person who will tarty this on. In tems of vacations, siclkness, do., there has never been a problem in the 12 years he has dealt with the City. Councilor Crowley commented that the background provided is very helpful to him, is int'ormation he didn't have access to and puts the process the Committee is considering under less pressure and order more logic and appreciates what the gaff h as gone through to acted the recmvmandadom Motion made to accept the recommendation from gaff. Vote taken. Motion failed 2-2 presentations will be scheduled with the France Committee for the two companies. Dave Pellegrino commented to the Commodes that when putting the RFP's together staff specifically notes that the selection committee may or may not interview, the prospective proposers. If there is a clear, established front ruiner, staff does not like to lead people on. It is a wage of time for them to come in and present a proposal when there is clearly a superior 4— Finance Committee -- Meeting hGnutes 8-17-98 proposal. Dave tells these firms d'remly. Some feel that a presentation may change minds, but generally that doesn't happen h. Boiler purchase (Police Benartnent) Northeast Mechanics] Services of Portland ($t&466 00) Approved recommendation. 1. Medical Smv'cea(Eire Bimartment/Workers Comp) These ere services that the Fire Department will be utilizing but potentially the pohce Department may use them as we0. It is for the examination and evaluation of medical services for cunem amploYees and new employees. RFP's were sem out and two were received, am from St. Joseph's and one from Eastem Maine. The recommendation is to go with the company associated wmh Eastem Maine. They have already provided the City services in the part. Charlie Mitchell gave the Committee a summation of the reasons for the selection. The costs are apprmovmtely the same. Councilor Crowley recused himself from Bdsisme. Approved. i The airport has secured some new freight business. It means that 747s are coming into Bangor doing freight. Thee is equipment, but it is considered not quite adequate to meet thow needs. The airport obtained prices for these items and has ordered twelve cargo carts to accommodate ibis new freight business under an emergency purchase. Jeff Russell indicated that BU has five Sights per week which generate approxanddy $6,000 hi revenue for the airport per Sight. This needed expeditious action. In addition, there is a large piece ofequipmen, a pallet louder, and it is a $400,000+/- piece of equipment. These hems are avagable on a used basis for about V2 that much or less. There are four conk that have recently been disposed of by Federal Express which are in good condition and will meet the airport's needs. Penelope Olsen explained that there is$I35,000 budgeted for this equipment with an additional 5100,000 available in the transfer to capital projects eccount thatis not earmarked for anything The staff is requesting for permission to go out and negotiate a deal right away. This will be put on the Council agenda authorizing the airport to purchase this piece of equipment not to exceed $300,000. Approved. :Li3d IRSI:S 44h5i1"IRiT� Councilor Crowley asked Sthese are the ben that the Department should have. Don Winslow explained that Nese Hreamss are adequate. Staffis confident that this is the direction to take for at least the acct 5 or 6 years. The guns being replaced are 11 years old. Recommend approval to full Council. 5 —Finance Committee Mustang Minutes 8-17-98 B Councilor Tyler excused himselffrom this item. Bob Farrar provided Council a full copy&this report previously. In Much, the Contend asked that staff look ar taking steps to provide residents in the City with the lowest possible muss for electricity and anal gas. Essentially what this does is m remove the City from a monopolists system whereby end users can only purchase their electricity from one company, to an open competition system whereby as a user, both hommweers, businesses and the City can go out and purchase electricity on the open marks. A new law provides that power compawes us either going to be in the transmission and distribution business or they ere going m be in the power generation business, they can not be in both. Bangor Hydro, Cental Maine Power and others have been making derision with respect to which site of the business they wish to be in on. We wgl be moving to full deregulation on March 1, 2000 with further competition with rasped to meeting and building services occurring in March, 2002. Essentially the new legislation conceptually would envision lower rates occurring because ofdmpedumn. The law in Maine was written so that smaller users of electricity, homeowners and those ofher than large businesses, industries and corporations could aggregate their loads. It is this concept that we are interested in where loads could be aggregated thus putting smaller users of electricity on somewhat equal fhoting with the large industries and businesses who may be able to just go oat on the local mukd and cut their own deal by sheer volume of what they have in terms of load. On pages 2, 3 and 4 of the report, Bob talks about the four emerging strategies that are developing outer the marketplace Maine isn't a leader par say, but Bob's review has led him to believe fled: Maine is certainly, on the founding. Opt out aggregation, opt in aggegatlon, dianclusmg and mumdpalizazioo are all possibilities. In looking at these four, the one that would appear, at this point, to be mom feasible for us in the opt in aggregation Use of franchise power in Maine is prohibited with the exception of cable T.V. franchising. Municipalization would actually mean setting up oat own not-for-profit gas or electric company and that bas some downfalls. More recently, the Public Utilities Commission bas made a proposed ruling, and Bob is not certain what the final ruling IS, with respect to opt out aggregation whereby a municipality or a group of municipalities essentially aggregates everything in the men and says you us in unless you specifically tell us you're out. PUC has made an initial ruling that [het type of aggregation is something that they are not going to allow. Opt in aggregation is very similar in Imes of concept, but it would take affirmative action to actually opt into the group versus opt out where you're in unless you take action to opt out. These are the four basic strategies that us emerging in the marketplace. With respect to the smtusofother statewide aggregation efforts, thus are two other ongoing efforts which Bob has reviewed and been in contact with. One n the Cumberland/York aggregation coalition. He noted that jug under 50 communities and school departments in the greater Cumbedan"Ork County area have come together and issued an 1UP to hive a consultant to do a feasibility study. Councilor Baldacci asked Bob if it was possible to have some kind of formal information and legal representation sharing arrangement with them so that Bangor could be participants in this consultants process. Bob answered that his understanding is that money is required. All the participating communities pay approximately $200-K00 to be a participate. Bob will follow up on this. The second area that Bob touched base with was the Maine Municipal Association. At this point, MMA is moving into this area fairly slowly and has not taken a position yet with respect to 6— Finemce Committee Meeting Minutes 8-17-98 whether they are going to actually get into an aggregation effort or whether they arejust gamg to provide education and support and services to communities. Bob concluded the report by makingfour recommendations for Council consideration. The that would be to continue to monitor the Cumberland/York Aggregation Coalition. Secondly, continue to urge Maine Municipal Association to take a leadership role on this issue. IfBangor is struggling with des issue then other communities in the State will be struggling with this issue as well. Thud, continue to monitor and to participate as mecessary with all of the PUC rule melons and legislative proceedings as they come about. Fourth, if the Council is interested in further pursuhg aggregation efforts or municipal purchasing cooperatives, snuffs recommemdam m is to give some serious consideration to how deeply to become iorwalved in this effort. If there is interest a the Council level, then do something similar to what the Cumbedand/York group did in terms of engaging a consultant Bob explained that this report was prepared as in interim progressreport. Amotherupdatewillbeprepered'm90days. Councilor Baldacci suggested involving other communities in this region to do a similar study committee. It would be helpful to have a group of communities in this area to help share the burden and cost as well as sharing information- Fd suggested that gaff can begin contacting some of the huger cities, provide them a copy of Bob's report and continue monitoring what is happening in Cumberland/York Counties. Ron Heller explained that several months ago the Committee discussed the need for an Employee Dishonesty Irguravice Policy. Charlie Mitchell has secured coverage through Maine Murdcipel Association a very favorable rates. Staff is asking for permission to purchase this insurance. Me total is $7,400 for a full year but because it is only 10 mombs, it would be prorated to $6,200. This will eliminate some of the fidelity bonds than the City currently has. Approved. mWn