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HomeMy WebLinkAbout2006-11-20 Finance Committee Minutes � � FINANCE COMMITTEE November 20, 2006 � Minutes Councilor Attendance: Stone, Farrington, D'Errico, Hawes, Blanchette, Allen � Staff Attendance: Cyr, SherifF, Barrett, Caruso, Cammack, Birch, Wardwell, Little, Heitmann Others: Don Simpson � 1. Consent Agenda Barrett said that these grant funds have been designated for improvements at the waterfront in the area at Railroad Street going downriver towards the I-395. � Staff is working on a master lan for that area throu h Pam Shadle . S ecific p 9 Y p projects for that area will be developed through that planning process and will return to the Council for its final review and approval. There are no matching City funds required. Blanchette asked when the preliminary design will be available from Shadley. Barrett said the original master plan is in place but not �,. with a lot of detail. Shadley and Associates is beginning their work and will be meeting with staff next week. There will also be a process allowing for public � input. Blanchette asked when the plan will be back before the Council. In the interest of saving time, she asked if a Council member should be involved with the staff and Shadley meeting. Barrett said the initial meeting is to pull all the data together that has been gathered over time but he suggested having Pam � Shadley come back to meet with the Business and Economic Development , Committee to allow Council input through that committee process. Allen asked � why the money is being appropriated prior to any action taking place. Cyr said that an account needs to be established for this specific purpose because the City has been awarded the grant. Allen asked how the $321,750 was derived for � the grant application when no specific plans were in place. Barrett said this is an earmark. On an annual basis, the City goes to the Congressional Delegation to ��� ask for funding for certain projects. The amount requestect was significantly ,. more. Allen agreed with Blanchette that an individual council member should sit in on the staff ineetings. Barrett asked which councilor member Allen would like � to be invited. Allen said that whoever is involved with the BED Committee or whoever would have an interest in it. As Chair of the BED Committee, Barrett asked Farrington to sit in on the meeting (November 28 at 11 a.m.) and � Farrington agreed. Blanchette asked who from Parks and Recreation will be involved and Barrett indicated Parks and Recreation Director Comeau. Allen felt this item is being rushed by the Committee too quickly. She referred to the � Trails Committee and asked if anyone on that committee was involved. Barrett said that trails witl be included on this portion of the waterFront. It has been . identified as a priority by the Trails Committee. A motion was made and � seconded to accept the grant funds. � � � a. Council Resolve 07-017, Appropriating $321,750 Grant from HUD's � Economic Development Initiative Program 2. Bids/Purchasing '� a. Crack Sealer— Public Works — Crafco Inc. - $45,000 Sheriff said that two bids were received and both were higher than budgeted. � Wardwell asked each bidder to remove some of the items from the � equipment and then re-bid. Both bidders came back within budget. Crafco's machine is self-propelled and the other is not. Wardwell and staff recommend � the purchase from Crafco, Inc. of Chandler, Arizona. Blanchette asked if it . would be prudent to delay this purchase, buy what is wanted at $59,872 in - the next budget year and place the money in escrow. She also questioned � the efficiency of using a pick up truck with manpower to tow the compressor. - Wardwell said the self-contained compressor would be nice but generally - there are at two or three pick ups on the job site regardless. It is not a `� problem to tow it behind the pickup. Allen asked about contracting out for � the work and then placing this item in next year's budget. Wardwell said it is � possible but that he would prefer to go with the Crafco. A motion was made _ and seconded to approve staff recommendation. The item passed 3-2. � b. Ambulance — Fire Department—Taylor Made Ambulance - $94,290 � Sheriff said that five bids were received. There is $106,500 budgeted for the item. There will be additional items that need to be placed inside the new �' ambulance — a charging system for the power stretcher, the N warmer, etc. Stone asked Cammack to tell the Committee about his recent receipt of Fire � Chief of the Year Award for the State of Maine. Blanchette asked about prior � experience with Taylor Made Ambulance. Sheriff checked references with Akron, Ohio officials who have Taylor Made ambulances in service. Taylor � Made is a manufacturer whereas the other ambulances need to be delivered � - � to a dealer and the dealer adds 10%. Responding to Farrington, Cyr said � there are always items that do not come with the purchase of an ambulance ' and the City obtains bids/quotes for each specific item needed. Allen asked if i� the ambulance was purchased from a dealer, would the ancillary items be included. Barrett said the dealer would purchase it and then add on their mark up and their profit. Allen asked about maintenance/repair on the unit. . � Sheriff said that Taylor Made would allow the City to be its own warranty center on the repairs and then Taylor Made would reimburse. In her . conversations with Akron, she was told that Akron does their own work at $50/hour and bill Taylor Made. Their experience is to receive immediate � � reimbursement. Responding to Stone, Cyr said there is a 48 month � replacement cycle for ambulance. There are three frontline ambulances and one back up. The City is billing in excess of$1.3M/annually in revenues and -, receiving in excess of$iM in cash annually. A motion was made and � seconded to approve staff recommendation. � . . � � � - c. Authorizing Execution of Agreements for Professional Services— ,�; Airport— Edwards & Kelcey - $297,485 and $14,290 � Cyr said that the airport goes out for bid every 4-5 years for engineering services specifically for Airport Improvement Plan improvements, which is all federally funded. The City has chosen Edwards and Kelcey as the provider. �' There are two new upcoming projects. A motion was made and seconded to approve staff recommendation to execute the two professional services agreements. One project is the reconstruction of the cargo apron phase one � and for snow removal equipment in the amount of$14,290. Caruso reminded the Council that these projects are 95% federally funded, 2.5% � through the state and 2.5% through the airport funds. Caruso provided a diagram of the area of the cargo reconstruction. Responding to Blanchette, Barrett said the area has probably never been reconstructed. For future � meetings, she asked that such data be made available for informational purposes. Caruso said the reconstruction is per FAA requirement. Responding to Stone, Caruso said the professional services agreement is for �,. the application process, for the bidding process, for Edwards & Kelcey to develop the specifications required and to administer the projects. The actual � paving and reconstruction will be in the area of$1.5M-1.6M. D'Errico spoke in support of the FAA and its processes. Blanchette expressed concern that the wording of this item is misleading. It gives the impression that the � $297,485 amount is for the phase one reconstruction project. She thinks that � the agenda items need to be clearer. She also has questions regarding the airport but wasn't certain if this committee was the appropriate venue. Stone � said it would be the Transportation and Infrastructure Committee. Blanchette said the airport is a huge enterprise fund, but locked within the confines of � � the TIC Committee. She said the airport should stand on its own and needs � to be tracked. Stone suggested that Blanchette send her recommendations to Council Chair Greene regarding another committee. Allen suggested this item be moved to TIC and thought the whole airport picture should be �{ available. It should be segmented into parcels on various committees. Barrett said the Ordinance established the committee structure and � responsibilities of the committees. The Ordinance designates the Finance Committee as the committee that approves bids and contracts. Any change would require an Ordinance amendment. But at this time the Finance � Committee is required to act on this specific item. Responding to Allen, Cyr �` said the contract is for engineering services and contract administration. � D'Errico said it is in compliance with the Airport's five-year master plan. 95% � will be federally funded, 2.5% by the state and 2.5% by the Airport. Cyr said the rest of the contract will be done separately. Stone said that process and procedures should be scheduled at a full Council Workshop. This item needs � � to be address tonight. Allen disagreed. She merely asked that the Chair look at the full Airport picture and send it to an appropriate committee to look at .�.. . � . � the whole picture. Responding to Stone, Cyr said that the locai 2.5% share � has been budgeted. The appropriation resolve for the federal funds has been , processed and approved by Council. D'Errico said this process dealing with ;� the FAA has been in place for over 30 years. It is not a new procedure. Barrett said he will have the Airport attend an upcoming TIC Committee to . review their entire capital plan for the remainder of the year. If there is ,� interest in changing the committee structure, Barrett said it would need to be discussed by full Council. Caruso said that Hupp has been aggressively updating and apprising the TIC Committee on a monthly basis regarding t construction updates, air service development initiatives, etc. Blanchette said the whole Council does need to discuss this item. She agreed with Allen that � if there was an Airport Committee in place that alt of these items would have been discussed in detail. Stone said that the Airport staff has discussed this during last spring's budget session. It's not a secret. Allen disagreed. What is discussed during the budget session is quite often forgotten due to other � issues. It is difficult to recall the actual numbers. She said that an Airport Committee would be beneficial to the growth of BIA and the community as a � whole. Stone asked Barrett to schedule a discussion before the full Council. A motion was made and seconded to approve the Edwards and Kelcey professional services contracts. Cyr said the $297,485 contract will appear on � Monday's Council agenda. Stone asked Barrett to have the Airport prepare a memo that provides outlines and updates on anticipated AIP projects for this year. Barrett asked Caruso to pull together information for the next 5 years. � � � d. Radio Services —City Wide—Whitten's 2-Way Service, Inc. SherifF said that Whitten's was the only response received. Whittens, located �� in Brewer, is the City's current supplier of the service. They have bid $55/ hour for maintenance fees. In the past, their fees were $48/hour but they also charged a different fee for several different items including a � $100/month retainer fee. S�aff asked alUhitter�'s for a more simplistic bid which resulted in the $55/hour for maintenance fees. A motion was made ,� and seconded to approve stafF's recommendation for a three-yea�Citywide contract. � 3. Sale of Northwest Bankru t Claim � P �N Stone indicated that Cyr had received another bankruptcy claim today and asked Cyr to bring it before the Committee even though not officially on the agenda. . � Northwest Airlines, an airline serving Bangor International Airport, filed for bankruptcy on September 14, 2005. Northwest Airlines owes the airport � $7,127.79. Recently, the City has received two settlement offers from companies that purchase liabilities related to companies in bankruptcy. One offer is for $.42 on the dollar; a second for $.50 on the dollar. Both of these ofFers, which are �time limited, compare favorably with the amounts received by the City in other � � � bankruptcy actions. Given that we have two competing offers and the potential . ;�. � � �; to receive further offers, staff requested that the Finance Committee authorize the Finance Director to accept the most advantageous offer taking into account the amount proposed and the terms and conditions of the offer. D'Errico asked �'. about fuel prices indicating these are air carriers contracted with E�ocon for fuel. He asked if F�ocon has exposure to the non-payment of fees. Caruso said he is not certain but will discuss it with the fuel accounting office at BIA. Cyr said it ,� was a valid point raised by D'Errico. D'Errico asked to be updated. The Airport should not be taking all of the risk. Cyr agreed. Stone said that the next time the City is dealing with E�ocon's contract there should be a provision designating �' specific average receivable days. D'Errico said the City's exposure is handling . the product not the product itself. He asked if the receivable included the cost of � � the product as well as the handling of the project. Cyr and Caruso said yes. D'Errico said that is not appropriate. Cyr agreed. The Finance Committee recommended this approach to the full Council. An Order will appear on � Monday's agenda accepting the settlement offer deemed most advantageous to the City for the Airport's bankruptcy claim against Northwest Airlines, Inc., subject to the condition that such settlement be equal to or better than $.42 � cents on the dollar and that the terms and conditions of the settlement be approved by the City Solicitor. A motion was made and seconded to approve staff recommendation. �' Cyr also discussed a claim from the sale of Delta Airlines, an airline serving Bangor International Airport, filed for bankruptcy on September 14, 2005. Delta � Airlines owes the airport $90,517.43. Recently, the City has received a settlement offer from a company that purchases liabilities related to companies in � bankruptcy. This ofFer is for $.40 on the dollar. This offer compares favorably with the amounts received by the City in other bankruptcy actions. In a separate situation involving Northwest Airlines, the City received ofFers from several � companies and there is a potential that we will receive more than one offer in this situation. Such offers, however; are generally time limited. As a result, staff requested that the Finance Committee�authorize`the Firrance Director to accept �: the most advantageous settlement offer taking into account the amount proposed and the terms and conditions of the offer. Again, the terms and , conditions of the settlement will be approved by the City Solicitor. Blanchette � asked when the Finance Committee will be aware of what is finally accepted from the bankruptcy buyouts. Cyr said she will send an e-mail when the papers are signed. A motion was made and seconded to approve staff � recommendation. � 4. Review of Amounts Owed— 268 Odlin � Cyr provided a brief outline of the past history regarding this property. Late - Friday afternoon, Simpson provided Cyr a spreadsheet indicating what he is � looking for in terms of changes in amounts the City feels he owns at 268 Od1in Road. Simpson had the Assessing Department look at the personal property �. � . � account before the Z007 taxes were issued. As a result, the assessment dropped. `� Cyr reviewed the items in detail. For example, the projection equipment was listed as a 1997 when it is in fact a 1958 model. Simpson proposed paying the � City $117,538.29 as payment in full on his account. Staff did not recommend accepting Simpson's proposal. From 1997-2000, Cyr said the only personal properly taxes assessed were assessed to Miami North and to Simpson himself. � These four tax years were paid in full by Simpson at that time. From a staff point of view, it indicates that Simpson had no problem with the assessments at that time. Beyond 2000 for personal property tax years 2001 to 2003, Cyr said '� these taxes were paid by the tenants, not by Simpson. This again implies that he felt the assessments were just. Also he has no claim to a credit for taxes he did not pay. Cyr explained that there are two types of personal properly tax � accounts at this location: the billiard side and the cinema side. The first year there was a cinema assessment done in 2001. Since that time, no one has completed and returned the City's annual personal property declaration form and � � no one has appealed the assessment. When there is no declaration, the Assessing Department has the authority to add on an assumed quality adjustment. Of the interest paid, Cyr said that Simpson has been making �� , payments under the workout agreement beginning in April and has paid appro�imately $2,606 that has been applied to interest. Simpson feels that most �� � of the interest, which is $26,397, should be forgiven. Staff recommends that no reduction in interest should be granted unless there is a reduction in principal. Because the principal was wrong, the interest was wrong. Simpson backed off � the $29,735, which he says is due in March of 2007. In actuality only $16,649 is due in March of 2007. Staff also did not recommend accepting any settlement of � account on 268 Odlin Road �that did not assure the City payment of the amount due in March. This is not typical of the City's dealings with any taxpayer or � mortgage dealer in handling tax liens. � Cyr reviewed a recommendation which staff supported. There was an original outstanding accounts receivables for false alarm fees billed to Russell's � � Entertainment Center which could be written ofF($1,025). Regarding personal properly, there were two issues. The movie projection equipment should be _ 1958 vs. 1997. Birch recalculated all of the past tax years and the value � assigned there is what the value would have been reduced by had that machinery been listed as a 1958. Cyr then calculated the taxes attributable to that. The next area is the quality as�essment adjustment. There is actually a ,� �place in the Assessing records that shows how much money is added annually to that account. She has calculated taxes associated with that amount. Birch had looked at the equipment at Odlin Road and had made several reductions for.the ,,� 2007 personal property declaration list. Cyr then calculated the value difference in 2006 and 2005. C�rr estimated the amount of interest that would be forgiven. � Her recommendation is that $14,686.18 would be the amount to be adjusted on the real and personal property tax. �: � � � Sim son ave a brief histo f th t ' p g ry o e ax issues. He spoke of Mr. Gray not paymg previous taxes and Simpson not being aware of the issue. Once discovered, he �' took action. He spoke of applying for a liquor license and finding that taxes were behind. He made a payment and thought it was settled. He feels that Gray had no intention of keeping current payments and now he (Simpson) is left with the � interest problem. He didn't realize there was a personal property tax problem on the property. � Cyr agreed that Simpson is working on the issues. Responding to Stone, Heitmann said in January the committee told Simpson that he had three months and in April the committee gave him another three months and now eleven � months the same issue is being discussed. In the meantime, Simpson has been faithfully making monthly payments. One alternative is to let this go on and � continue to explore other options, Heitmann said. As the options get lower, and the bank can come up with more money, Simpson might be in a position to pay the balance off. Simpson said he had home equity to use and didn't see the point of dragging this beyond tonight's meeting. Allen said that the � municipality's hands are being tied by the state with the state imposed 11.5% interest rate. Blanchette pointed out that the City is not in the money lending � business and that's why there are financial lending institutions. Stone asked if it � would be appropriate to send stafF out of the room to confer. Heitmann said that since Simpson has home equity to factor into this issue to work with the � amount after a $14,000 decrease. Heitmann suggested a staff conversation take place but not tonight. The City needs to talk with the bank and with Simpson � and then come back to the committee for a recommendation at its meeting in two weeks. � Cyr said she would like a motion to write off the $14,686 because she does not have the authority to do so. A motion was made and seconded. Simpson asked if he comes up with the $192,000 less the 2007's amount at tk�at point 6s therea � deal. Cyr said in all likelihood but she could not promise. Barrett clarified that the final agreement will have to come back to the committee. � 5. Assessor's Update Birch spoke briefly about statewide valuations. He provided a memo and a Maine Townsman article, the annual notification from the Office of the Federal � Housing Index, two articles from the Bangor Daily News regarding how realtors perceive the valuations of home pricing in the local market. The Assessing Department is well aware of what is taking place in the real estate market industry. Lewiston has gone through a valuation, the numbers were finalized, and their elected officials decided not to implement the numbers because of a , � � tax shift. Twenty years ago this past June, Bangor had some major issues , dealing with re-valuation. The ratio had slipped below 70% and a d�cision was .� � �. made to begin to do a re-valuation. There was miscommunication between the � then Assessor and Council. At that time, elected officiais determined to have annual adjustments to keep fluctuations in property values to a minimum. The � latest report shows that residential properties have slipped from 100% statutory provision to 87%; the business ratio has slipped down to 86%; condo to 83% and mobile homes to 97%. The Assessing Department has started to analyze � that data and to come back with forecast numbers later on. He would like to wait until receiving the Office of Federal Housing Index in December. The Governor is talking of possible legislation in an attempt to freeze property values. ;� In checking with MMA, there is nothing in writing at this point. Birch will pass it along to the City Manager as soon as it becomes available. LD 2056 has passed � which he indicated is an administrative nightmare. ,Adjourned at 7:10 pm. � � �� � � � � . . � �� � � � . . � �