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HomeMy WebLinkAbout1998-10-19 Finance Committee MinutesFinance Committee Meeting Minutes October 19, 1998 Councilors Attending: Michael Crowley, Jim Tyler, Gerry Palmer, Joe Baldacci, David Leen Staff Attending: Edward Barrett, Ron Heller, Dave Pellegrino, Erik Stumpfel, Norm Heitman, Jim Ring, Bob Farrar, Arthur Stockus, Mike Dyer, Brad Moore, Bob Ziegelaar a. Radio Equipment - Combined Dispatch (Police/Fire Departments) Whitten's 2 -Way Services of Brewer ($22,379.02) The only bid was received from Whitten's. The recommendation is to accept that bid. Approved. b. Boiler Installation (Police Department) Sullivan s Merritt, Inc. of Bangor ($23,300.00) Approved C. Penobscot River Bulkhead Reconstruction - Dock 4 (Engineering Department) Construction Divers, Inc. of Gorham ($168,854.71) Jim Ring explained that this is to replace the first 125 feet of bulkhead. This is a very good bid and is under the current - budgeted amount. The original estimate was as high as $200,000- $225,000. Recommended to Council for approval. d. Electrical Service - New Capehart Housing (Community Development) LaClaire Electric of Eddington ($31,890.00) This work is for the installation of new individual service entrances for each of the housing units and removing the existing military entrances. The costs associated with this will be paid with the future proceeds of the sale of the properties. Approved. e. Fuel Tank Installation - New Capehart Housing (Community Development) Precision Tank, Inc. of Jay ($16,480.00) Recommendation to award to low bidder. Approved. f. Boiler Upgrades (Airport Department) Northeast Mechanical Services of South Portland ($16,058.92) Recommendation to award to low bidder. Approved. Page 2 Finance Committee Minutes October 19, 1998 g. Fork Lift Truck (Airport Department) W.D. Matthews Machinery of Auburn ($20,811.00) Recommendation to award to low bidder. Approved. h. Adjustable Frequency Drives (Wastewater Treatment Plant( Industrial Electric Supply of East Newport ($29,844.00) These drives are energy efficient devices. They run the large electric motors at the Treatment Plant. Recommendation t0 purchase from low bidder. Approved. 1. Plow 6 Wing Assembly (Motor Pool Department) Maine Municipal Truck Equipment of Norridgewock ($13,981.00) Request to table this item. Staff would like to further discuss their options. Tabled. j. Road Salt (Public Services Department) Harcros Chemicals, Inc. of Westbrook ($161,232.00) This is a decrease of 1 1/28 from last year. Harcros has been a supplier in the past and has done an excellent job. Approved recommendation. V. Staff requested that this equipment be purchased on a negotiated basis rather than going to bid because the equipment and supplier that was requested is the only one that handles this type of equipment in the state. This is the only equipment that is felt will work well for the City. This will allow the City to continue to use the current hard wired system. Aron Larson of the Electrical Division supplied the Committee with a memo outlining the reasons for purchasing from R.H. Allen Co. The amount of purchase is $73,450. Approved as recommended. 3. A'ronrF mama rtment This will standardize the Matrix system at the Airport. The card readers in the parking lot are a different system from the security system inside the terminal buildings. The purchase of this equipment will combine the whole system and they will be able to integrate both systems, which will give much better control and better reliability on the employee and airline personnel parking lots. Approved as recommended. Page 3 Finance Committee Minutes October 19. 1998 This is the same piece of equipment that was rented previously. It did a very good job and in record time. There are approximately 1,000 tons of brush that needs to be cleaned up; remnants of the ice storm. The cost is $1,000 to set up the tub grinder and $6.00 per ton to chip it. The chips will be sold to A. W. Chaffee for $8.50 per ton. Approved as recommended. 5. In September, the Finance Committee approved the bid award for the purchase of a van from Walker Chevrolet of Parsonsfield. During that discussion Dave did not bring to the Committee's attention some facts that later caused c n the part of the local vendor, Varneys. In March, the Committee approved a bid award for $21,095 for a van for the airport which was ordered from Varney's, but never delivered. There were a lot of reasons why they did not deliver it and finally could not. It took from March until July for Varney's to say they had tried but never could find the van with the specifications that were required for close to the amount of the bid. Dave allowed them out of the bid and agreed to re -bid for that equipment. This was done in August. Right after the bid opening, a similar situation happened with Darlings. Ford Motor Company did not give them all the information and said that the van that the City requested was not available at the price that they had quoted us. They then asked to be excused from the bid. Dave let them go and didn't hold them to the bid. He then recommended going to the next low bidder which was Walker Chevrolet for $23,119. What Dave did not point out to the Committee was that this bid was only $36 less than the local vendor, Varney/GMC. The reasons for Dave's recommendation were: 1. They were the low bid. 2. Varney did not honor their previous bid for $21,095 and this resulted in the City paying an additional $2,000 for the vehicle. 3. The Doge van proposed by Walker has a slightly heavier suspension and has a rear window defogger that Varney could not supply. 8111 Varney called Dave about the $36 difference. He felt it was a lack of support from the City. Dave explained that whenever there is a bid like this it is very difficult. There is a bid process that needs to be followed. Dave commented that staff supports local vendors at every opportunity, especially in the non -formal bid process. Varney/GMC has been supported over the years. The City has purchased 11 vehicles from them since July of 1995 and total payments have been approximately $322,000. Page 9 Finance Committee Minutes October 19, 1998 Bill Varney addressed the Committee with his concerns. rns. He commented that he was upset not because they were the bid on the van but because he believes that local business should have some kind of a preference. He does not feel it should be a percentage, it should be a common sense preference. He spoke with others in business locally that also have concerns over using local vendors. Mother concern Bill has is the memo from Dave stating that Varney's cost the City $2,000 on the bid. Bill stated that Dave was told that they could not get the yellow van. It was not available at that time from the factory. On March 19, Varney's was informed that they did receive the bid. At that time, they reiterated that the yellow van a w not available from the factory. In April or May, they tried to find the van from another dealer and were unsuccessful. In July, they received a call that indicated that the City would take a blue van. By this time it was too late. They were unable to purchase the van. Hr. Varney agrees that Varney/GMC take on the responsibility, but feels that the $2,000 should not fall entirely in their lap. Bill commented that yes, the City has bought $322,000 worth of vehicles from Varney's since 1995 and he appreciates the business and wants the business but they payed approximately $325,000 in real estate taxes is that some time. Dave added that Varney/GMC is an excellent dealer and there have never been any problems with them. Councilor Baldacci asked if Dave recalls the response from Bill Varney? Dave answered that yes, but the chrome yellow is an FAA requirement for vehicles that are regularly on the run way and the air side of the airport. Dave talked with Bob Jarvis at the airport who stated they would like the yellow, but it was not absolutely critical. This van was for the individual heating maintenance mechanic for the airport and he would not be on the air side very often. In the end, it was decided not to get the yellow. Regardless of the color chosen, there was nothing available that was close to the bid that Varney's had given. This was when Dave made the decision to throw out the bid and re- bid. Councilor Leen asked if this bid, since last signed, has already been submitted to Walker Chevrolet? Dave answered that yes, the purchase order has been sent. Councilor Leen asked Mr. Varney what he, as a local businessman, considers to be local? As an example, if the bid came in from Downeast Toyota and they had beat the bid by $36.00, would he have a problem with that? Mr. Varney answered that no, he would not, but if it were Ellsworth, he would. Mr. Varney explained that they have been the low bidder in other municipalities by $300-$900 and did not get the bid because of a local dealer. Councilor Crowley asked Dave if the color of the van from Walker is yellow? Dave answered no. Councilor Crowley asked if when a vendor submits a bid, does the City typically hold them to that Page 5 Finance Committee Minutes October 19, 1998 bid? Dave answered yes, it is a contract. Councilor Crowley asked if preferential treatment is shown in holding to that bid to local versus the outside bids? nave answered no, technically the bid amount is the last piece of the contract with the vendor. Michael asked that although there is a policy that suggests taking the lowest bid, can that be ignored? Erik Stumpfel answered yes, the City Council can waive the policy. Councilor Baldacci feels that the Council needs to be sensitive to local business. He understands the concerns about prices and competition. Joe is suggesting that as a policy of fairness, if something is looked at that is less than a certain percentage, it does not bind the Committee to accept it, but give some sort of prior notice to local vendors. Councilor Tyler commented that the difficulty with this is that it would not be fair that one party address the Committee and that all parties be given the opportunity. A bidding war should not be encouraged. Councilor Baldacci commented that certain interests need to be balanced. It may not change a result, but will evaluate it closer. Councilor Leen asked what would you do if you had the same bid process and every one of the dealers were within $1 of each other? Councilor Leen is pointing out that the Committee should not get involved in the figures. The point that Mr. Varney i making is that if you get a bid from someone local, you should be giving that business to the local individual. They pay taxes here and have an investment in the community. Councilor Leen agrees with Mr. Varney. Ed Barrett commented that in a lot of instances like this, if a reason could be found to show the difference between a local vendor and an out of town vendor on an item, that vendor will be recommended. In many instances, a local vendor has been chosen over a lower bidder for various reasons. Ed commented that working on percentages would dissuade those who are not local from bidding at all. These types of situations happen infrequently. There are times when no local vendor even submits a bid. Councilor Palmer feels this issue should be revisited. There may need to be a trigger in this process so that when the bidding is close, locals would be aware that the bidding is close. Erik Stumpfel commented that while this has been looked at before, there are a number of communities that use local preferences as a tie-breaker when the bids are equal. If you had a definition of equal bids you could allow the local preference but the percentage should not be s large as to drive away bidders not in this area. Ron Heller made a point that what is trying to be done is to provide asmuch support as possible to local vendors but there is also the responsibility to the taxpayer to get the lowest price or the best service for the price. Royce Day commented that if Mr. Varney pays that much in taxes and employs several people, he has a great investment in the City and preference should be given to him. Page 6 Finance Committee Minutes October 19, 1998 The bid can not be revisited because the purchase order has already gone to Walker• 6. 2B9 Broadway - Matured Sewer Lien Norm Heitmann explained that this is a routine situation. The difference would be that the bank is involved and it is a building that the City has a particular interest in on the corner of Broadway and Stillwater. If the Committee Is inclined not to take the building but to deed it back to the bank, before any action is taken, staff would like to meet with the bank to explore alternatives with that building. There are a number of problems with the building. The area it is located in is a grandfathered, non -conforming use. As of March, the apartment use, residential use, will not longer be grandfathered. This would leave the building as three floors above a small retail area of no use to anyone. The policy is to go ahead and try to get the property back to the owner if the property is brought back to code. In this case, it is quite an expense and the bank needs to understand what their obligations may be and what type of commitments they will have to undertake. Recommendation to accept staff recommendation. ]. 240 State Street - Matured Sewer Lien The matured 1996 tax lien, a 1997 tax lien and outstanding 1998 taxes were paid on this property in February. The 1996 lien was not quit claimed. Staff is requesting a quitclaim deed on the property. Approved. 8, Council Resolve96-410 Anprooriatinu PERC Performance Credit and Cash Reserves Account Bob Farrar explained that as part of the closing out of the Parity deal, the City has been notified by the Municipal Review Committee that $328,000 is to be given back to the City. The practice is to put this money into the General Fund Improvement Reserve Account for future use for capital projects. Approved. 9. Proposed Hardship Abatement Policy On the basis of a number of experiences in trying to process hardship statements, a policy was needed to specify the criteria under which a hardship abatement would be provided and also allow staff to be more involved in working with individuals who are having difficulty in paying their taxes to see if there are other alternatives that they could pursue other than asking the Council to forgive taxes. At times, it is difficult to make the decision without a clear set of criteria. In this policy, appeals to the Council on hardship abatements go to the Board of Assessment Page 7 Finance Committee Minutes October 19, 1998 Review and it would be helpful for them to have clear guidelines that have been adopted. If the household meets the definition of poverty, they would be granted an abatement if they meet a number of conditions: if their reasonable and necessary living expenses exceed their income and if it's for their primary residence, they would be eligible for an abatement. A more difficult circumstance i where s may not meet the definition of poverty, but may be In great financial difficulty. A preliminary determination would be made with the applicant whether they met the criteria and try to work with them before going before the Committee. The biggest difference is that staff will work with the applicant, give them a preliminary reading and try to get them into one of the other programs before they meet with the Committee. Erik commented that the statute relating to hardship abatements only refers to the municipal officers making a decision yes o no and that could be delegated to staff. This has been discussed before, but Council felt it needed a more hands on role. There have been two cases before the Board of Assessment Review recently and the board granted both of them. One that concerns Erik is that there is a practice in the City of avoiding granting hardship abatements by giving tax mortgages. The Board of Assessment Review feels that under the statute, if someone can not contribute to the public charges, they are entitled to an abatement and not simply a deferral of the amount owed. It is likely that in cases that come in the future, there will be the same result. Councilor Tyler commented that this policy appears to be more directed to staff than to Council. None of the various methods that have been used to disposition these at Council level are included. Ed answered that the reason is that if someone comes in and requests ahardship abatement, if you want to use anything other than that as a mechanism, you must deny the abatement. Without some kind of standard it is hard, as Council changes, to remain consistent. Councilor Tyler asked about section 3.4 mentioning basic utilities, should they be defined to include those things such as entertainment (cable)? Staff will look into defining the basic utilities. Recommendation to put this before the Council. Approved. 10. MSRS Amortization Tabled for two weeks. 11. Executive Session: Legal Issue 12. Executive Session: Legal Issue