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HomeMy WebLinkAbout2004-12-20 Finance Committee Minutes ! � FINANCE COMMITTEE December 20, 2004 Minutes � Councilor Attendance: Cashwell, Farrington, Hawes, Stone, Gratwick, Greene � Staff Attendance: Cyr, Barrett, Little, Pellegrino, Dawes, Caruso 1. Consent Agenda � A motion was made and seconded to approve the Consent Agenda items. a. Quitclaim Deed — 591 Union Street— Blanchard � b. Emergency Repairs — Airport - Front End Loader 2. Bids/Purchasing ' a. Lavatory Service Truck— Airport— Stinar Corporation - $71,320 A motion was made and seconded to approve staff's recommendation. � In response to Cashwell, Pellegrino indicated the amount is $10,000 over budget. The excess amount will be covered by savings resulting � from previous purchases by the Airport. Caruso said the standard life � expectancy of the unit is 20 years. It is a very specialized piece of equipment. In response to Stone, Caruso said the equipment is used for the air guard as well. It is included in the air service fees charged � by BIA to the air guard. b. Pick Up Truck — Motor Pool — Varney Pontiac GMC - $14,076 � A motion was made and seconded to approve staff's recommendation. There are approximately 20-22 pick-up trucks in the City's fleet. Dawes said the City plans to purchase two this year. � 3. Citizen Request—Tax Reform Dr. Sidney Block requested the opportunity to address the Committee , regarding tax reform. Block indicated his disenchantment with the State's efforts dealing with the tax system, in particular property taxes. The three , major sources of revenue are sales, property and income taxes. At the municipal level, the major problem is property taxes. His proposed plan will not adversely affect municipal revenue and has the potential to � decrease municipal expenses. Basically, he proposes that the amount of the property tax be set from when the property is purchased. The assessment value would be increased by capital investment to the � properry and an annual increase in the property tax assessment based upon a cost of living adjustment. First, the property owner will not find his tax and value increasing simply because someone else could purchase i the same piece of property for a higher price. Secondly, no one will be forced to sell based on the basis of what someone else paid to purchase � � � the property next door. Block's proposal eliminates the cost to the City of � the expense of tax re-valuations. The Ciry retains the power to set its own mil rate for what it needs. IYs better apportioned amongst the � various property owners. Regarding total tax problems, Block isn't sure the State will be able to make meaningful tax reductions. Citizens want the services. He feels the federal government needs to start paying for its � mandated programs. Given that Maine has a high income tax and a low sales tax, he suggested an increase in the sales tax. In order to increase it and not hurt the poorer population, he suggested raising it to 6%. � Assuming it costs $10,000 to an individual to live in Maine, if each citizen received a $100 rebate on their income tax, it would take care of the 1% � increase in sales tax. He urged municipalities to solicit support from the Legislation on such a proposal. Barrett said there is a lot of emphasis on the Governor's proposed tax reform packet. He referred to LD 2, which is , a proposed constitutional amendment that would freeze assessments on homestead land. The difFerence in value between two similar properties is based on the value of the land. Barrett said it appears that the Legislation � is going in the direction of the Circuit Breaker program, which is to cap the taxes an individual would pay based on their income as opposed to � capped value of the property. He said that there has been discussion of ■ Block's proposed approach. Cashwell asked Barrett to add Block's proposal ■ to the discussions at MMA and the Maine Service Center level. Stone and Greene commended Block for his desire to research the tax reform � concept. Greene asked if there was a model used by other states. Barrett said there are a range of options and spoke of California and � Maryland. In response to Gratwick, Barrett said that a proposal such as Block's could apply only to properties that qualify for the homestead exemption. It should also apply only to certain classes of property. � 5. Presentation of FY 2004 Audit This item was taken out of sequence. Cyr introduced representative(s) of � the City's external auditors, Runyan, Kersteen and Ouellette, who presented an overview of the City's audited financial statements for the ' year ended June 30, 2004. (Draft copies of the Financial Statements and Letter of Recommendations were provided separately). 4. Update on Cues Inc. � Dave Little brought the Committee up to date on the workout agreement j with Cues, Inc. Cues, Inc. is approximately 7 weekly payments behind. Based on their delinquency, staff has asked the Legal Department to � begin the process of revoking Cues' business license. If a business owes City tax dollars, it cannot receive a business license. The mortgage � r � � holder of the property, Miami North, has also contacted Little indicating that Cues is delinquent on vendor payments. Little was contact by Alex � Gray of Cues, one of their principals. In the past, Little has dealt with Alex's brother, who is no longer with the company. Alex indicated the books reflected payments made to the City but were not received. Gray � would like the opportuniry to start making payments again on a workout agreement, if the Council is acceptable, or to come before the Committee directly. In response to Cashwell, Barrett said the Finance Committee has � to approve unusual workout agreements that aren't covered by a standard format. Under normal circumstances, Little handles taxpayer work out agreements. Because of the matured tax liens, this is a different situation � and requires Finance Committee approval to enter into a workout agreement. Alex Gray wanted Little to know that he was unaware of the problems and wants to rebuild the relationship with the City. Barrett 1 suggested that Little and Gray attempt to workout a schedule. If it is different than what is currently in place, it will come back to the Finance � Committee. A motion was made and seconded to approve staff's recommendation. � , � � � , � i � t �