Loading...
HomeMy WebLinkAbout2006-03-06 Finance Committee Minutes . � � � � FINANCE COMMITTEE MEETING MINUTES March 6, 2006 @ 5:00 pm tCouncil attending: D'Errico, Hawes, Stone, Palmer, Gratwick, Farrington and Allen � Staff Attending: Barrett, Cyr, Pellegrino, Hupp, Dyer, Moore 1. Executive Session—Workers Compensation Settlement (A)— � 1 M.R.S.A. Section 405 (6) (E) A motion was made and seconded to go into Executive Session for items 1 and 2 �, 2. Executive Session —Workers Compensation Settlement(B)— 1 M.R.S.A. Section 405 (6) (E) � A motion was made and seconded to go into Executive Session for items 1 and 2 3. Decision Workers Compensation Settlement (A) � A motioned was made and seconded to pass stafF's recommendation onto the full council for action � 4. Decision Workers Compensation Settlement (B) A motioned was made and seconded to pass staff s recommendation onto � the full council for action � 5. Consent Agenda A motion was made and seconded to approve Consent Agenda a. through h. � a. Quitclaim Deed— Brookings — 194 Palm Street b. Quitclaim Deed —O'Connor— 33 Nelson Street � c. Quitclaim Deed— Gianibas— 628 Hammond Street d. Quitclaim Deed— Hessert— 269 West Broadway e. Acceptance of Payment— Musson — 76 Market Street ■ f. Council Ordinance 06-091, Amending Code of Ordinances— ■ Taxicabs, Rates of Fare g. Revision to Procedures for Employee Reimbursement � � � h. LAN Cargo Ground Handling Contract 6. Bids/Purchasing � a. Roof Repair— Bass Park— Roof Systems of Maine - $21,990. The repair is for 3 roofs on the stair towers installed in 1954-55.The recommendation is to award the contract to the Roof Systems of Maine for$21,990. Palmer says that he will � support this but thinks that the money should be put towards a new facility. He understands that it is unavoidable but would rather put$21,990 towards a new � � � � � facility. Mike Dyer provided pictures pointing out the worst leak. During rainy � and windy weather, it leaks a lot and the water has been getting in and around the metal windows. The roof will be repiaced with a membrane rubber roof. � Gratwick motions to approve and was seconded. Stone addressed D'Errico pointing out that D'Errico took Farrington's place as a full council voter. b. Trust Services —Airport — Bangor Savings Bank. Stone said that he was � uncomfortable with just one individual having all the money. He felt that it was too much money for only one individual and he asked Debbie to go to Bangor � Savings and Merrill Merchant and ask them if they would be willing to split the pot because there is no reason to poll the rest of the committee if the answer is no. Cry indicated that both institutions were agreeable, and then Council Stone ,� polled the committee members with input from the staff. This resulted in the committee not supporting the idea. Cyr explained that the airport maintains a � . . separate trust fund which has all the earnings since the inception of the Bangor International Airport. There are two pieces of the Airports trust portFolio. There is the fixed income which is all the income to date, and the equity piece which is � from back when the City Council decided to sell off some of the airport's properly. When that property was sold, the City wanted to maintain the same rate of return as we would if it had been leased, which is around 8 to 10%. In � doing that, all of the proceeds from the land sales were placed into an equity fund to obtain a higher rate of return. This is a total of about 14 million dollars and 13 million is in the fixed income side and $900,000 or so in the equity side. � The City went out for bids back in December or]anuary and the bids have come - � back with 11 responders and it was very clear that we had only 2 real contenders, those being Bangor Savings Bank and Merrill Merchant. Merrill � Merchant had quoted fees of 7 basis points and Bangor Savings of 8 basis points and neither is charging commissions. The next closest quote was around � 20 basis points so the cost side varied significantly so we really focused on Merrill Merchant and Bangor Savings.The City asked each respondent to provide their composites and benchmarks and staff sited 4 or 5 benchmarks that they were � looking at. The 2 that the most emphasis placed on were the Leman Brothers Intermediate Governmental Return, which replicate the taxable fixed income . . portfolio and the S&P 500. When we plotted out everyone's responses, Bangor � Savings Bank came out with higher rate of return as reported for both the S&P 500 and the Leman Brothers Intermediate Governmental Return. Staff recommended Bangor Savings and notified both Bangor Savings and Merrill � Merchant of its findings. At that point Merrill Merchant told us that the composite that they were quoting was not their full portfolio even though that is what the RFP said. What they did was they pulled out the pieces in their taxable fixed t income that closely replicates our investment requirements, for example the city �doesn't allow for investment in corporate debt or corporate notes. Cyr further � explained that the City only allows U.S. Government and U.S. Government � agencies, we don� allow going over a 10 maturity, but when you're looking over � � � � a portfolio and your comparing it to composite all of those things are factored in. So then it was a question of whether we were comparing apple to apples. � Because when we looked at it, Bangor Savings had higher rates of returns based on RFP. We asked them for the last 5 years individually, then a 3 year and a 5 year average. They beat Merrill 5 out of 7 in the Leman Brothers. Merriil was � once again saying that puiled out the Corporate and the maturities beyond 10 years, which are driving the rate of returns down. They also beat them 5 out of 7 years in the S&P 500. So all of this happened last week. Cyr did point out that � when we are looking at trust services, we are looking for fees and performances. We are comfortable working with these folks. We make our recommendation based on the information we had and Cyr said she didn't feei right changing it � even after she was notified that there might be a difference. Palmer asked if he � � could be swayed and wanted to hear from people that do this for a living and � from Merrill and the staff. Cyr indicated that the stafF's side is not to sway but to present the Committee with the information. Hupp said the Airport has a good working relationship with both Merrill Merchant and Bangor Savings and if the � committee's decision is to split it she are very agreeable to that. Jim McCloud from Bangor Savings expressed concern that his institution went through a process and that we thought it was an all or nothing bid and we put our best � foot forward. The decision was made and Bangor Savings was initially awarded the contract and since Thursday it has changed. McCloud didn't have an opportunity to compare Bangor Savings with Merrill Merchant's performance prior � to Friday. Although it could be very close on the fixed income side, he thought Bangor Savings out preformed the equity side significantly on the U.S. Equity compared to the S&P 500. Merrill also raised a question regarding the � performance that Bangor Savings did disclose in conjunction with the RFP. McCloud stated that the performance disclosed was a composite performance. � It's all of the Bank's accounts. McCloud indicated that he took the investment policy that the City Council approved in 2003 and, in that policy there are certain benchmarks. Bangor Savings provided, in their response, its investment performance relative to those specific benchmarks in the investment policy. It �� � was over 100 accounts that are included in our composite. The answer is none. Frankly every investment policy is different and depends on the unique � circumstances of each customer. When we do have identifiable benchmarks we manage money to those benchmarks. Some are more conservative or more . liberal: Stone noted that Councilor Allen has now joined the committee. Paul � Pasquin (Merrill Merchant) thought that somewhere along the line his institution would be interviewed. He participates in a number of bidding contracts like this and usually once they get down to a couple of finalist it is common to bring then � in for an oral presentation. If he had known Merrill was not going to get an . - opportunity to give an oral presentation he would have been a little more detailed in their written responses. The City's investment policies restrict it to � government and government agencies. Pasquin said that Merrill's own strategies for the last few years have been very close to the City's actual policy. Because of r � � � � rate spreads and yield curve and what was going on in the economy, Merrill , tended to stay with higher quality issues and rather short term in our bond fund. In looking at the performance, he thinks that last year Merriil had the better � performance. A motion was made and seconded to stay with the staff recommendation and is seconded. The Committee recommended award of the trust fund to Bangor Savings Bank. � c. Consulting Engineering Services —WWTP — Moore, Wastewater Treatment Supervisor, explained that CH2M Hill was the original engineering firm � � that designed and built the expansion of the plant from the primary to a secondary treatment plant. In 2007, WWTP is up for re-issuance of its main permit to discharge. There is high scrutiny of water quality standards with the � Androscoggin River. The Penobscot is still not meeting its water quality standards. Moore's concern is when we go through this re-issuance process the Plant is going to have more stringent limits in a number of areas such as � nutrients, which will primarily be phosphorus and nitrogen that we may have to remove as a result of the new limits. One that is even more of a concern is a test � called a BOD test, Bio-Chemical Oxygen Demand, this measures the waste load of the water coming into the plant and going out into the river. If they choose to � lower that, then that could impact our ability to expand in the City. This would � result in the Plant not being able to accept anymore waste load into the plant. This is why Moore would like CH2M Hill to remain available because they are very familiar with the plant because they designed the plant and are very familiar with � the sewer system as they did our CSO long-term control plan back in 1990's. Some of the people that worked on that project are still with the firm. The State sets the water quality standards for all the rivers and ponds and all the waters of � the State. This includes the Penobscot. The Penobscot is not reaching some of those standards. Particularly in dissolved Oxygen. Moore is concerned they will � - - address that issue by lowering the limits of the treatment plant. This will not just affect Bangor, but all the industry on the rivers that discharge in the Penobscot. The paper industry impacts the levels here on the Penobscot but there isn't as � much of a waste load coming into the river in the last 3 years due to the mills closing and it does have an impact here. The Engineering Services have an office in Boston so they are familiar with the staff that EPA has in the region one office � which is headquartered in Boston. They also have a working relationship with the State regulators because they are do'ing projects and actual operated several plants here in the state. A motion was made and seconded to approve staff's , recommendation. d. Value Engineering for Parking Garage Facility—Airport - $35,000- ! This is a firm that is known to have expertise in parking garage facilities. They come in and review the design usually in 30-40% of the preliminary design and then they come in a 75-80% and look at such things as constructability and � overall efficiency of the design, lifecycle costing and those sorts of things. They � . � � ` perform a design review and make recommendations to save the city some money or increase the efficiency of the structure. Farrington asked why the City � didn't use the Value Engineering for the new Police Station Barrett said that is a good question and in hind site he thinks we shouid have used them in the Police Station. I think the reason we did not use them is because we got so rushed. I � think in general it would be a good policy to set a dollar limit on contracts above which we would afways have Value Engineering preformed on them. Staff has had some discussion of whether we should proceed with the actual construction � of the Parking Garage. Barrett said that staff's thinking is that this will allow us to go ahead and design it and it will also give us some time to see what is happening with passenger traffic at the airport. Once we get closer to having �, the design finished we can have a more detailed discussion of whether or not we want to proceed or hold off. Part of the difFcultly we are going to face is the 18 � month waiting period for pr�-stressed concrete delivery. So even if we went out to bid this summer we would be looking at about 2 �/z to 3 years before the garage is open. If Airport traffic holds up at the levels we have been seeing, we � know we have a space crunch as it is and we actually run out of room and have � to get very creative by shuttling people around. But it is something we need to look at before we make that final decision. Barrett said that staff � � recommendation is to finish the design, track our passenger placement and once the design is finished look at the actual timing of putting out the bid for construction. A motion was made and seconded to approve staff � recommendation. � e. Environmental Services Providers— City Wide- � Pellegrino explained that the City hired St. Germain and Associates to assist after the EPA inspection of the City at which time the City received a fine. Under emergency provisions, the City hired St. Germain to help with that and they have ! done a fine job. Over the years, the City has hired other environmental firms to do testing, air quality, spill prevention, control and counter measures and felt � that it was time to put it all together and get a more formal appraach to contracting for services. The City issued a request for statement of qualifications� from environmental firms from this area and state wide 12 were received and a � .selection committee narrowed it down 6 and 4 were selected. The Committee � found that St. Germain and associates did an excellent job and there was no - � reason not to continue with them. Fessenden Geo-Environmental Services has � been around for 25 or more years and does testing. Their expertise is air/water testing and also construction testing. His office is at the airport and he is "Johnny on the spot"and has provided us with excellent service as well. We � wish to continue with him for those sorts of services. Civil Engineering Services has been acting as back up on both of the above firms. We have not done a lot work over the years with this firm. Arnson Environmental Services is out of � Portland and Leslie Arnson is a unique individual; her expertise is more on the legal side. She is a member of the bar in Texas and non-practicing attorney and � � ' � her expertise is environment and training and she is very knowledgeable in OSHA , standards and these sort or things and wili be a great advisor for the City to avoid future problems with DEP and EPA. She has a good relationship with these � regulatory agencies. The Selection Committee recommends a 3 year contract with ail 4 of these firms and will then do a review. The costs are not certain at . - this point. If we have a project the City wili decide which one wiii fit the project � best and we ask them for an estimate of project costs inciuding their fees and then we make a decision. If we say ok then we send them a purchase order and we don't have to deal with the contracts because we have a blanket contract for � those services. Their fees are similar to those of engineering fees. This is on an as need basis. Warren said that- St. Germain and Associates did an excellent job of negotiating with the EPA on our behalf and with DEP and being the go � between to reduce our fees and our exposure. They have a good history with the Airport. The Airport ended up choosing this company because of the history and experience with the airport and also has connection with sub-contractors. � � Barrett said that his hope is that given the amount of work and effort we put into environmental issues in the last several years we will see a significant drop � in what we will see in the future. He referred to finding oil in retention pond at the airport, We have to have the ability to respond pretty quickly with the level of involvement with the DEP & EPA, they are watching the airport very closely. ■ So we have to be able to respond very quickly. In that instance, to this day, we � do not know where that oil came from. Warren said a lot of the fees that we paid to St. Germain were actually reimbursed through the Tank Fund Reimbursement. � A motion was made and seconded to approve contracts with Environmental � � Services on an as needed basis are awarded to the four firms. f. Pro osal to Seek Ener Audit and Pertormance Contract � p 9Y Barrett reviewed the City's plan to send out a proposal for energy audit and � performance services. The City will be seeking services to review specific buildings to identify investments needed to increase fuel efficiency. Most of . these firms get paid via the saving of a project. IVo committee reaction was � needed; he just wanted to update the Committee. 7. Request to Release Covenant on 251v Randolph Drive- �� Heitmann explained that the City sold vacant land adjacent to 249 Randoph . Drive to first-time home buyers with a covenant specifying that"no building structure, road or parking area"be built upon it. In December 2004, JefFrey & � Debra Kinney purchased both lots. The lot's price reflected the limited utility of the parcel because of the covenant; while the lot was assessed for $11,100 in 2001, the City sold the lot for $2,024. Currently, the lot is assessed at $2,600. , The Kinneys now request that the City release the covenant against building on 251v Randolph to allow the constructioR of a single-family residence on the �vacant parcel. The recommendation of stafF is that they pay $9,076, which is the � � � difference between the price for which the City sold the vacant lot and price for � � � � which the City would have sold the lot without the covenant. Tom Needham, attorney, discussed the map and plot.. Gratwick asked if the amount of$9,076 is � appropriate because the land has accrued in value over the years. If this �/z acre lot was put on the market it might be worth $20,000. Gratwick felt that the price should be as near as the market value as possible. Allen disagreed. One � Councilor felt that the City should take more time and look into it and doesn't want to give the land away. Farrington states that if a house were built there the City would receive more taxes on that properly, which to him, is the overriding � decision. Stone says that he doesn't think the price is enough and says that he doesn't think it would take long to look into it. He is not looking for the price to be too high but thinks we should get more data. A motion was moved to send � this to full Council provided actual assessed value could be provided prior to Council Action. Those in favor were Farrington, Stone, Hawes The motion was � seconded. 8. Request to Review Insurance Carrier's Decision- Heitmann provided background regarding the incidence on January 20"' when a � city plow was backing around the Abraham Lincoln School and hit a cedar post that used to be used as a cable gate to stop people from driving to the back of � the school, breaking off all but 12 to 18 inches of it. The operator of the City plow did not report the accident. Ms. Dickerson was at the school on ]anuary 23rd to drop off her child and struck the remaining part of the post, damaging the �� � bumper to her vehicle. Later that day the post was cut off at ground level. It was after this that Public Works was told of the accidents. Ms. Dickerson has since had the vehicle repaired. Of the $922.05 repair bill, $868.00 relates to the � damage caused to the bumper by the accident. Farrington made the point that it is a driver's responsibility to look around to see what is around. Heitmann said � � that the City was more negligent than the driver, therefore the City should pay. Barrett referred to Dr. Gratwick's example about City owned tree. There are some examples where we require 24 hour notice such as pot holes. If we don't have notice of that then we don't have any liability. If the City is notfiect, then it �� � has 24 hours to repair it. The example here is different because the City knocked down the pole and the driver didn't report it. Based upon the � information, it was determined that both parties share equal responsibility. A motion was made and seconded to have the City pay �h of the costs. � � 9. Update by Friends of Dakin Pool- Mike Robinson- president of _ _ Dakin Pool Corp. Robinson discussed the packet of information he supplied and went through.the � diagrams. In the packet it lists the funding to include Bangor Savings which contributed $2500, and Bangor Daily News contributed $10,000. There have � � ! been some delays with our fundraising. With the Building estimates, The Friends � of Dakin Pool were not able to contact Patrick Tabert in a timely basis which put him back a month or so. They did manage to work with Tom Duffy and he was � able to go to some reputable contractors and come up with some figures for you. Our original idea was to come up with $153,000. The City was going to bring $22,000-$25,000 in goods and services and that would be $130,000 for the M friends of Dakin Pool to come up with to build the bath house and the pump house. Those figures were considered conservative based on using commercial labor and retail cost of materials and so forth. But a more realistic figure is much � less then the $130,000 and therefore our fundraising goals are much less then we originally thought. The Friends also have decided to use a professional fund raiser and have been speaking to Alicia Nickel, who is well known in the � community and had done a lot of fundraising for MPBN. She has supplied a proposal which will go to the board of directors this week. Nickel believes that the goal of$130,000 to be raised by June,July or August is doable. She feels � that we are much better organized then some non-profit organizations she has worked with. Robinson said that if the group can get to the $50,000 mark by � the beginning of June we can begin putting in the foundation, putting up the shell, the chain link fence, and the picnic tables. . . � � . � . . � � � � � � � r � � � � � . r