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HomeMy WebLinkAbout2009-10-14 Finance Committee Minutes � SPECIAL FINANCE COMMITTEE ' October 14, 2009 � Councilors: Palmer, Nealley, Blanchette, Hawes, Bronson, Wheeler, Stone, Gratwick � Staff: Cyr, Barrett, Heitmann, Ring Others: Birkel, Erik Russell 1. Review and Discussion of Claim Against City — W. Tom Sawyer— Vandalism to � Boat Stone opened the meeting by stating that at the last meeting during which this item � was discussed Councilor D'Errico had mentioned some things that perhaps were not ' heard by all in attendance. In D'Errico's absence, Stone asked Gratwick to bring forth those comments. Gratwick said the question is what is legal, what is appropriate, what can be done via the insurance company as opposed to what might be a gentler ' approach from the City in dealing with this large issue of vandalism. Gratwick paraphrased the discussion by D'Errico, who thought that some sort of a rebate of the dockage fees charged by the City to Mr. Sawyer would be appropriate. The vessel had , been at the City's docks for most of the entire season and it did have significant damage which caused Sawyer to lose use of the boat for the remainder of the season. D'Errico's suggestion was to remit that year's dockage fee -- $2,000 — in recognition � that this particular citizen suffered significant problems. It has then been suggested that the City allow this individual to have free dockage for up to that amount the next time the docks become available for use as opposed to returning cash. ! Stone noted that D'Errico joined the meeting. � Blanchette said she was uncomfortable with the discussion further stating that what was discussed at the last meeting and what was said about refunding docking fees was � said in Executive Session. She indicated that no transcript is available from that Executive Session. Blanchette said she was sitting opposite D'Errico at the last meeting and she did not remember hearing D'Errico's comments as paraphrased by � Gratwick to the best of his memory. Executive Sessions are confidential. If that trust and confidence is not in place, Blanchette recommended that an ordinance be drafted directing Bangor Ciry Council to not meet in Executive Session under any circumstance. � Confidentiality has been breached, and she indicated that she was very upset about it. She said that there is nothing that is before the Finance Committee this evening that has changed since the Council voted unanimously at the last meeting following an a Executive Session. By that vote, all were in agreement to abide by the insurance company's recommendation and to not reimburse the fee. In her years of service on , the Council and on the Harbor Committee, Blanchette said there was one time only in the history of Bangor's harbor that a docking fee was refunded and that was because the individual was asked to vacate the dock. The reimbursement was for one month. � , � �� � Blanchette asked for a ruling by the Ciry Solicitor as to whether or not the Committee is allowed to discuss what was talked about in Executive Session. � Heitmann said that he did not recall hearing the comments offered by Gratwick so he doesn't know if it was said in Executive Session or not. Anything said in Executive Session is not by Ordinance to be disclosed; however, anything said following an ' Executive Session is not confidential. Blanchette again legally questioned why this is back before the Council stating that ' nothing has changed since this Council voted unanimously to adhere to what the insurance company has recommended. In response to Blanchette, Heitmann clarified that an insurance claim of $50,000 or less can be approved by the Finance Committee ' without referral to full Council. He also cfarified that the Committee is free to discuss the dollar amount since it was not voted on as part of an Order or at a Council meeting. It is at the Committee's discretion. , Gratwick clarified that this is something that he and D'Errico have discussed out of � Executive Session. Both ideas discussed by them are different than what was discussed in Executive Session and, therefore, no particular conflict. Each Councilor has the ability to bring items to Committee level, and Gratwick asked that the item be ' reconsidered by this Committee. During the Executive Session, D'Errico said that he did recall discussing this and he ' raised the question of giving one year's return. Stone interrupted indicating that what was discussed in Executive Session cannot be discussed at this meeting. � Heitmann again said what has been discussed in Executive Session is not to be disclosed in public. If someone wants to bring up something in a public session that is not confidential by statute, it is okay even if it may have been discussed in Executive � Session. In theory, no one knows because it hasn't been disclosed. � D'Errico said that he and Gratwick had discussed many issues concerning the harbor and docks on the waterfront in terms of budgets in the past week but doesn't recall focusing on this particular issue. They had discussed asking the Harbor Committee to ' reconsider their recent decision because the docks are a resource for development that maybe should be promoted more to make it more successful. � Nealley made a motion that one year's dockage fee be reimbursed or provided in a credit to Mr. Sawyer. � Heitmann advised that the motion should be definite in terms of the fee. Any motion for compensation, however the compensation is being done, also should include a ' � � condition that the City obtain a release to meet the approval of the City's insurance � company. � Responding to Hawes, Heitmann said that the insurance company is not going to cover this claim. If an individual agrees not to pursue a claim against the City in return for � something, a release would be signed. Without a release, Mr. Sawyer or his insurance company could legally return with a claim. By way of further clarification, Barrett said that the insurance company has denied liability and denied the claim. At the time of , denying the claim, the insurance company asked Sawyer if there was other information for them to look at in order to evaluate their position. Sawyer has not provided further information. If the City makes an offer to Sawyer in the way of a settlement and make ' it just to him, that would not preclude his insurance company from bringing suit against the City's insurer. If an offer is made to Sawyer to settle the claim, Barrett said it should include a release of any future claims on the part of Sawyer or his insurance ' company. Nealley noted that when Sawyer came before the Council, he asked the City to consider w goodwill. He did not ask for complete restitution and he didn't ask for all damages to be covered. If a release is now requested by the City from Sawyer, the City is not � doing what Sawyer had asked the Council to consider. Nealley again made the motion to restitute or reimburse one year's harbor fees. � Heitmann read a portion from a letter from Mr. Sawyer. "Bellshare, Inc. would be willing to drop all claims against and release the City of Bangor in this matter should the City ' agree to return the fees received by the City over the past two years for Dirigo Pilot's dockage along the Penobscot River." Heitmann clarified that by obtaining a release, it concurs with Sawyer's suggestion of dropping all claims and releasing the City. � Bronson asked if the original vote needs to be rescinded before a motion is seconded this evening which takes the City into a different direction. Heitmann said no. The � original vote was not a Council Order and a formal vote was not required but typically in negotiations staff asks direction from the Council. Sometimes it is by comment, � sometimes by show of hands and on a rare occasion such as September 14�' a formal motion was made. Bronson said he is still comfortable with the original vote but, if a majority has reached , a conclusion that some other action should be taken, he is iffy about refunding money. If the motion were to provide a credit of the unused portion of the second season's , docking fees, not a payment, in return for releases both to the City and the insurance company, he would agree. Palmer said that he has a difficult time with refunding or returning money. In the � future, he did suggest a speedier response by the City to any claims by future users of � , , � the waterfront. He understood that the Solicitor had advised Councilors not to discuss � the issue because it was a legal matter. Stone clarified that there was a motion but not a second. , Nealley said he would withdraw his motion if Bronson was prepared to move his statement. ' Bronson clarified that he would support, but did not say he would move a motion. , ' Wheeler recollected that at the previous meeting he had made a motion that the matter be left entirely in the hands of the insurance carrier. Bronson has confirmed that he seconded that motion. Wheeler stated that his position has not changed. Wheeler ' referenced an e-mail from Sawyer to the City Solicitor saying that he took exception to the implication by anyone that the City Solicitor manipulated the Council's action and � orchestrated the discussion to come out with the result that the Council made on its own after due deliberation and advice from the City Solicitor. � Bronson stated that he was deeply uncomfortable with the concept of this committee now considering a motion with 5 voting members of the Committee which would then set aside the vote of the 9 earlier votes of the full Council. ' Heitmann said that one option the Committee has is to simply refer this item to Council. This Committee has jurisdiction to settle such a claim but it doesn't mean that it can't � be referred to the Council. Nealley said that all 9 Councilors previously voted for something that was different than � what is being discussed at this time. TonighYs discussion is focusing on reimbursement of one year's docking fees from a public relations perspective. Nealley moved that a credit be issued towards future docking fees of one year's docking fees. , Blanchette said she needs to be shown a black and white example of another City ' owned municipal dock on the eastern seaboard that would issue a credit. The City's insurance company denied the claim. She was not pleased with comments slanted against the City Solicitor, City Engineer and Harbor Master. ' Stone asked if there was a second for Nealley's motion. � Nealley said that an indication after an Executive Session is not a vote of the Council. The Finance Committee has the authority to look at the reimbursement of one year's docking fees or a credit without it going back to full Council. � ' � , Heitmann said the Committee has the authority to settle a claim; it does not have the � authority to give a credit. The Council has authority to give a credit. Nealley said he � stood corrected. Bronson said he might second it if the motion was to send it to the full 9 Councilors. , Stone asked Nealley if it was his intent to send the motion to the full Council. Nealley said it would have to be but it appears that it would only have more prolonged � discussion and that might not be in the Council's best interest of time. D'Errico asked if individuals leasing dock space sign an agreement. Heitmann said ' there is an application for the dock fee along with harbor rules and regulations. There is a provision in the rules with an assumption of risk. Nealley talked about the difference of assumption of risk and due care. He again stated , that his motion is to refer the item to full Council to reimburse via a credit for future docking fees for one year of the two year docking fees. Bronson seconded the motion. ' Blanchette doubted the motion and voted against it. The motion would direct a credit , to something that might not even be in existence. She reminded all Council members that have by their own admission at tonighYs table said that they have served on the Harbor Committee in the past and the recent past and if you have served on the Harbor , Committee you have seen and approved a copy of those rules before starting to accept docking at the waterfront every year. Because of not remembering it, it is not a defense. People know that when tying up to any dock, unless is a private yacht club , with 24-7 security, that they are taking a risk. She compared it to parking at the Bangor Mall with someone hitting her car. She does not have a case to sue the Mall owners for damages done to her vehicle. She stated that this is exactly what was � discussed in Executive Session. Nealley called upon the Chair for a point of order. Blanchette said that she is not discussing what was discussed in Executive Session. We were not discussing the $44,000 claim that the insurance company, which is a matter of , public record. She stated that there was discussion about reimbursing Mr. Sawyer for docking fees for two years. She stated that Nealley's motion was part of that. The , issue of the full settlement for the damage of the Dirigo Pilot was not the issue that was discussed. Palmer asked if this item could be placed on the Council's agenda without delay. , Stone asked for a show of hands in favor of the motion. � Regarding an option of placing the item on nighYs Council agenda under suspension of rules, Heitmann noted that Sawyer is currently out of state and with all due respect he � should be given the opportunity to attend or not attend a Council meeting. Council ' � ' , Chair noted that he as Chair could not make a rule to have the item taken up under � suspension of rules. Stone noted that the item will be going to full Council at some point. ' 2. Discussion of Phasing In COPS Funding ' Barrett noted that the Government Operations Committee had recently discussed the acceptance of the COPS grant from the Department of Justice that would allow the City to hire four additional police patrol officers. Federal funding would cover all of their ' salary and benefit costs for a three year period. One of the requirements of that grant is that the City maintain the staffing level of the Police Department over that entire three years and that the Ciry then maintain that staffing level for one more year after , the grant has expired. In year four of the grant, the City would have to pay the full costs of the four officers at an estimated annual amount of $320,000. Throughout the , discussion of this, there has been a suggestion that if the City accept the grant that it should also look at some way of phasing in its impact so that it doesn't come as a shock in year four. The Finance Director has indicated it could be done by setting up a � reserve fund to be funded over the three years of the grant and then supplementing local appropriations over the subsequent three years to even out the impact on the general fund. Basically, over a six year period, the City would be adding $58,000 per � year to the budget. It would first go into a reserve and then spent out of a reserve to cushion the impact and spread it out over a longer period of time. Councilor Stone had asked that this option be brought forward for review. Barrett had also prepared a ' potential amendment to the Council Order accepting the grant that includes language that would authorize the establishment of a reserve. , In response to Gratwick, Cyr explained the reserve in detail. Barrett clarified that in year one, the General Fund spends about $58,000 with part in the reserve and part in the operating budget. In year two, it goes to about $116,000; year three $170,000; ' year four would be $320,000 but the City would start using some of the reserve. Barrett asked Cyr to provide a spreadsheet to Gratwick. ' Nealley and Gratwick both supported the approach. ' In response to D'Errico, Barrett said there was no precedent in terms of the grant but the City has from time to time established reserve with the notion to build up funds to defer large shocks to the system in the future. For example, the pension obligation �, bonds. A motion was made to adjourn at 6:30 pm � A motion was made to move into executive session to discuss military Flights at BIA. Blanchette moved 1 MRSA, Sec 405(6)(B) — Contract Negotiations. , �