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HomeMy WebLinkAbout2005-03-20 Finance Committee Minutes � � FINANCE COMMITTEE March 20, 2005 Minutes � Councilor Attendance:Stone, Paimer, Gratwick, Hawes, Farrington Staff Attendance: Barrett, Cyr, Olson � Others: Clif Eames, Ken Huhn, Roger Dumont, Stephanie Cote, Bobbi-Jo Yeager, Dawn Gagnon � 1. Consent Agenda A motion was made and seconded to approve the Consent Agenda. � a. Quitclaim Deed—Astran —301 Fourteenth Street b. Workout Agreement— Curry—Lot 228 Cedar Falis � 2. Order 06-111,Authorizing Bond Issuance of$455,000 Cyr indicated that representatives of the Bangor Nursing and Rehabilitation Center were � in attendance. She provided a brief history of the former City Nursing Facility which became a separate non-profit in ]anuary 2001 known as the Bangor Nursing and Rehabilitation Center. Part of the master transaction agreement included that the non-profit took title to the facilities � at 103 Texas Avenue which also houses the Health and Welfare Department. The agreement also stipulated that the City would provide $2.25M in bond money to bring the facility in better . working order and/or toward the building of a new facility. One of the facility's largest � operating costs is heat. The current boiler is circa 1960. The Center's building committee has reviewed needed improvements and part of their recommendation is to replace the boiler and installing a ventilation system. Cyr indicated that half of the bonds would be issued in the � spring and the second half next year. Huhn, BNRC Board of Directors, spoke on behalf of the Center. He spoke of past deficits indicating that the project deficit for this year is $60,000. The slant of the business operation has changed to rehabilitation for a large part. Farrington spoke 1 about MaineCare reimbursement. Gratwick praised the Board of Directors for their work at the Center. Gratwick mentioned the upcoming energy audit to be performed for the City and asked if BNRC would be incorporated into that audit. Cyr said the City is hopes to go forward with this . particular project during May, June and )uly. ll�is action will not address the other energy � � needs of the facility. The Board would like to eventually expand the facility. Barrett said that BNRC could be included by the timing may not work well. Palmer served on the Council when � the City wasn't able to financially run the facility. He applauded the Board. Palmer spoke of the boiler in the police department wondering if it would have application. Barrett said it is not a question of age but size. Cyr said the engineer's recommendation is for one boiler for the � entire facility. Responding to Stone, Cyr said the City has spent$165,000 of that $2.25M. It has not been bonded. The $455,000 is all the City will be bonding. The boiler and ventilation project will be near $550,000 but$150,OOO�will be coming back from the Airport. When the nuCsing facility was considering relocation to the Naval Reserve Center site, the City � appropriated money to tear down those buildings and remove the asbestos. The facility decided not to make that move.The project is Airport owned.The Airport will return those monies invested by the City.. A motion was made and seconded to recommend passage of the Order to � the full Council. � � � � 3. Request for Support—UCP Camp CaPella � Stephanie Cote and Bobbi-Jo Yeager from UCP were in attendance. United Cerebral Palsy of Northeastern Maine operates a number of programs in our area, including Camp CaPella. Camp CaPella provides a number of recreational programs for children with severe ' disabilities. Due to budget constraints, UCP has been forced to close the Camp for the 2006 season. Unfortunately, there are no other recreational opportunities available for the population served by the Camp. UCP is conducting fundraising efForts to provide the resources necessary � to open the Camp in 2007. Tim Sample, a well-known Maine humorist and long-time supporter of UCP, has agreed to perform in June or luly at no cost to benefit Camp CaPella. UCP identified the Bangor Civic Center as the preferred location to host such an event. UCP � requested City support of the event for the total estimated cost of$1,579. Yeager provided detailed information regarding Camp CaPella, which has been operating for approximately 45 years serving 70-80 children at each 7-8 sessions annually. Responding to Gratwick, Yeager � said that UCP's operating budget on a whole has 11 programs with Camp CaPella being one of the eleven. Most programs are 90%funded through Medicaid but Camp CaPella is not. Parents pay for Camp CaPella as they are financially able which ranges from $200 to $400 for a � week. To make it safe, one on one staff is necessary for each child attending. Camp Capella's operating budget is approximately$120,000. About five years, monies were raised through a fund drive and the dollars were used to redo the lodge, the bathhouse has been redone within � the last few years. The bunkhouse is in of future attention with repairs and upkeep. Farrington asked how Camp CaPellla compares with Camp Rainbow (Camp Jordan). Yeager has met with Camp Rainbow's director. One of Camp CaPella's sessions will be held at Camp � Rainbow using their staff. If it works out well, she is in hopes it will continue in future years. Responding to Farrington, Cyr said there is approximately$3,000 available in the Council's Bass Park rental fee account. About 1/3 of Camp CaPella participants are from Bangor and the � remainder of outlying areas. Farrington asked Yeager if other communities are participating in the funding. Yeager said that Brewer makes a donation. Hampden made a donation last year. All area municipalities are requested to support the Camp. Farrington said it should be � proportionate. UCP as a whole serves 1,000 families per year. The percentage of the overall ag�ncy is well beyond 50% of the children are from the Bangor area. Palmer said that Camp CaPella is a specialized resource, along with the Bangor Auditorium, that other communities � can't ofFer. He said that Bangor also benefits from individuals who eat and shop in Bangor for the Tim Sample concert. Yeager spoke of a couple of recent fundraising events. Penelope Olson spoke in favor of Camp CaPella's facilities,which is available for event rental purposes as � well. Palmer made a motion to provide $900 in support. Farrington and Gratwick further discussed the item. There was no second to the motion; it failed. Hawes seconded the motion. The Committee's final recommendation, on a 41 vote, was to provide $900 in support for the � rental of the facility. Farrington opposed. Normal rental costs are $1,100 plus expenses. This will reduce the cost to $200 plus expenses.. Cyr indicated there will be a Council Order on the March 27�' Council agenda indicating Council's support. It requires final Council action. � 4. Order 06-112,Authorizing Refunding Bond Issuance of$1,265,000 Cyr spoke about refinancing its debt: This Order will authorize the City to issue up to $1,265,000 in general obligation bonds to refund the outstanding port�ons of its 1995 and 1996 , bond issues. Both of the original issues allow for the bonds to be"called"after 10 years, at a premium. Therefore, in order to retire $1,215,000 in bonds, the City will issue $1,265,000 in � refunding bonds. The interest rates on the 1995 and 1996 issue range from 5.2% - 5.9%. The City estimates the interest rate on the refunding bonds will be between 3.5% - 4%. It is � , � � estimated that the refunding wiil provide enough savings to cover the increased principal costs as well as produce an estimated $66,000 in interest savings over the next 10 years. Responding to Gratwick, Cyr said the City has over$100M in debt. The most significant portion � is the pension obligation bonds. Barrett said the City's sewer system is a self-supporting debt. The Airport has a small debt. The police station will increase the debt. Barrett said that as the debt service increases it limits the increase allowed under LD 1. He said that increases in the � debt level will make it probiematic in that it squeezes the operating budget. C�rr said the rating agencies do not feel that the city is overcommitted on debt at this point. Stone asked Barrett to . come back to the Council with increased fees for police department services to be used to offset , the debt service. A motion was made and seconded to approve stafPs recommendation. The Order will be on the upcoming Council Agenda. � 5. Review of Investment Policies Stone had requested this item be placed on the Committee's agenda. He wanted to review the � Airport's current investment policy and then, at a later date, come back with recommended changes. Gyr explained that there is a standard investment policy which governs all funds that the City holds outside of the Airport. Most of the City's investments are short term and cyclical. There is a separate BIA Investment Policy because these are longer term. Cyr said one �- � difference between the two policies is that the City can invest in corporate notes and BIA cannot. Dollars from airport land sales are in an equity; the other funds are in a fixed income � portfolio. Cyr suggested that the fixed income portfolio be amended to include corporate notes. On the equity side, she recommended a higher rate of retum on land sale proceeds to ofFset for the loss of land rent. Responding to Farrington, Cyr said if there is a 25% growth, an appreciation is allowed up to 25%. Olson has spoken with the Airport's portfolio manager. One � suggestion was adding the corporate notes, as Cyr had mentioned. The portfolio manager also suggested to look at the permitted asset class range changing it from 60 to 100% on a large cap and 10-20% on the small and intemationals. Stone asked about using exchange trader � funds as opposed to picking select stocks. Olson said she would check into it. Gratwick asked if the City's policy is comparable to other municipalities. Cyr said yes. Barrett talked about bond cycles. For inclusion in stafYs recommendation, Stone has for a definition of how the City , goes out for proposals for the next time. In noting the first paragraph of the City's investment policy, Farrington asked if the City Manager is the City's Chief Operating Officer or should it be the City's Chief Executive Officer. Barrett said he would check the City's Charter. Farrington 1 asked for clarification. 6. Executive Session—36 MRSA Section 841 (2)—Hardship Abatement � _ A motion was made and seconded to go into executive session. 7. Open Session —Hardship Abatement Decision A motion was made and seconded to table this item. � � � �