HomeMy WebLinkAbout2001-11-28 Government Operations Committee Minutes GOVERNMENT OPERATIONS COMMITTEE
, MINUTES
November 28, 2001
Councilors Present: Joe Baldacci, Dan Tremble, Gerry Palmer
Staff Present: Bob Farrar, Chip Hodges, Dave Pellegrino
Other Present: )eff Tuttle — Bangor Daily News
With a quorum present, the Meeting was called to Order by Committee Chair Baldacci
at 5:00 p.m.
1. Amendin� Schedule VI of Cha�ter 291�Article III of the Code of the City of
Bangor Parking Limited to Parking for Handicapped — First Street
This proposed amendment would eliminate two of three existing handicapped
parking spaces on First Street near the former Unitarian Church. One space
� would be retained.
Sgt. Hodges stated that when traveling around the City, he tends to notice things
that do not need to be there any more and this item is one of them. The Shaw
House indicated that they did not need any spaces. But the Church is operated
by another organization that would like to keep one. Sgt. Hodges proposed that
the City eliminate two of the spaces and keep one. The Church indicated that
they would like to keep the one closest to Union Street so this would eliminate
one by the Church and the other space by the Shaw House.
Councilor Tremble moved the agenda item as recommended and was seconded.
2. Proposal to Purchase Electricity through Maine Power Options Consortium
The City has received a proposal to purchase its electricity through a consortium
to which it belongs. This opportunity exists due to the deregulation of the
electric industry, as enacted by the Legislature several years ago.
Assistant City Manager Farrar stated that as the Committee may recall, Electric
deregulation became efFective March 1, 2000. The theory of deregulation was
that power prices were to go down once the market was open to competition.
The Committee may also recall that, in fact, did not happen initially. In fact,
, rates began to go up. The City is now at a point where we are seeing the rates
begin to come back down. As you know, the City belongs to a consortium of
� nearly 600 nonprofit entities, mostly towns, cities, hospitals, churches, university
systems, and the State of Maine that all belong to a consortium known as Maine
Power Options. Maine Power Options has on several occasions gone out to seek
competitive bids and up until this point in time, the rates that they have received
were not as favorable as the standard offer rate. The standard offer rate, as you
may recall, is the rate that the Maine PUC obtains through a competitive bid
process for all of those customers that are residential, commercial, and industrial
who did not go out and actively seek and select a power provider. The standard
offer rate, if you will, is a default rate if a provider is not selected. For the
greater Bangor area, up until just recently, the standard offer rate was a better
rate than any competitive rate that was received. In fact, in a couple of
processes, competitive offers were not even received. However, the City was
just informed (background information included in packet), a new proposal from
Maine Power Options in which they have provided the City with two separate
proposals. One is a one-year proposal for 5.8 cents. The second is a two-year
proposal for 5.8 cents. In this instance, the service accounts are known as the
MGS (Medium General Service) accounts. Those essentially are a group that not
the smallest accounts, they are not very large, but are grouped in the middle.
They include a number of different departments/divisions around the City. The
City and School Departments use somewhere in the vicinity of 20 million
kilowatts hours per year. When talking about the MGS accounts, they are a
� group of accounts that comprise about 8.5 million kilowatt hours per year. It is a
fairly substantial piece of the City's annual usage. The projected savings, if you
look at what the City is currently paying which is about 7.3 cents versus 5.8
cents that Maine Power Options have proposed, is a savings of about 1.5 cents
per kilowatt hour and if you do the math, the City would save approximately
$126,000 dollars in a variety of locations and departments. Clearly the current
rate versus the new rate would be a substantial savings.
In terms of further background, the Maine PUC, at the moment, is also soliciting
competitive bids for the standard offer rate for the same MGS accounts. That
rate unfortunately will not be finalized until late December or early ]anuary for
an effective date of March 1, 2002.
The Maine Power Options rate is currently on the table and available through
December 13, 2001 before which, a decision must be made. We are not in a
situation where the City can hold the Maine Power Options rate to see what the
standard ofFer rate will be.
The most recent round for standard offer rates for residential home owners
results in a rate of 5 cents for kilowatt hours and it had been 7.3 cents per
kilowatt hour. So if that is used as somewhat as a gauge, you can say that the
• 5.8 cents is on the high side of the what the standard ofFer rate may come in. It
• might come in even lower than that. However, there are no guarantees. The
recommendation, therefore, is that the City go with the Maine Power Options
proposal at 5.8 cents and do a 1 year deal. The general feeling is that electric
rates generally are coming down and that this is a good savings for the City. But
it also believed that longer term, the possibility that those rates will come down
are good.
Bob stated that he and Dave Pellegrino have looked into this for the past several
days. They have talked to Maine Power Options and Bangor Hydro and it is their
opinion, at this point, that the acceptance of the one-year proposal at the fixed
rate of 5.8 cents is savings that the City can bank on. It will also give the City
the chance next year at this time to see where the electric energy market is and
obviously if prices are lower, the City can then partake of that opportunity.
Bob mentioned that with respect to BIA, which is clearly the largest consumer
within the group, the Airport has been working on fine tuning their budget
(revenues and expenses) given their slowing performance. The Finance
Manager at BIA has stated that one of the things that appeals to her is that of
the projected $65,000.00 annual savings, seven months of that will occur in the
current fiscal budget and help them balance this year's budget. Starting in
December of this year, it would give the Airport about a $42,000 savings that
they could count on. Versus if the City waits for the standard offer, that new
� rate, whatever it may be, would not become effective until March 1, 2002. In
terms of the Airport specifically, they would only have March, April, May, and
June of potential savings.
Councilor Tremble asked that once the PUC rates are out, how long are those
rates set for?
Bob stated that the PUC is expecting bids for 1, 2, and 3 years. However, the
PUC does not know at this point what they will be receiving.
Councilor Tremble asked if the Order from last March giving Bob authority to
enter into a contract for electricity was passed?
Bob stated that that Order was passed by the Council. Bob stated that given this
is a new program and the interest shown by the Council, he felt it prudent to run
this by the Committee and get concurrence.
Bob also stated that he spoke with the School Department as well. They are part
of the consortium and are in favor of saving whatever they can. Continued
review of all accounts to make sure all MGS accounts are included in this effort.
The City has literally hundreds of electric accounts. At some time in the future, a
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comprehensive review to make sure all accounts are in the right areas will be
� done.
Bob stated that if this offer is selected than next year, if the standard offer is
lower and the City decides to go back to standard offer, at that point the City is
committed to stay with the standard offer for a least one year. The reason for
that is the PUC does not want entities to play the market. At this point, there is
no penalty and no reason not to proceed unless the Committee feels that the
standard offer rate that will be coming sometime in December is significantly less
than 5.8 cents.
Councilor Tremble moved the agenda item as recommended and was seconded.
Councilor Tremble asked Bob to give him an update of what the standard offer
rate comes in at.
3. Continuation of Committee Discussion Regarding the Concept of Providinq
Certain Fringe Benefits to Domestic Partners and Part-time Employees
At the October 24th Government Operations Committee meeting, Councilor began
a discussion concerning the above referenced topics. It was decided to table the
• issue until a new Committee was appointed following the November election.
Bob stated that at the last meeting of the Government Operations Committee, it
was decided to continue the discussion at its second meeting in November once
the new Committee had been formed. There were two issues brought to the
Committee's attention. One was the issue of domestic partner benefits. At that
meeting, cost summaries were provided in those areas that would be impacted.
In round numbers it was estimated that to provide domestic partner benefits, it
would cost approximately $4,000.00 per domestic partner. A rough estimate
that was figured was 10 so that would be in range of $40,000.00. This depends
on the number of people that come forward and at this point it is unclear as to
how many people may come forward to participate.
The second part of the discussion focused on whether the City should be
providing any type of fringe benefits for a part-time employee. Those are the
two areas that the Committee discussed in very general terms.
Bob stated that he thought that Ed has briefly mentioned to several of the
Councilors that obviously both of these areas have a potential for a significant
financial impact on next year's budget. Ed's thought was that perhaps the
Committee could further develop and refine those costs and then have that cost
available for consideration as the City moves into the spring 2002 budget
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process. To that end, obviously we have the numbers for the domestic partner
� issue other than nailing down exactly how many people might be interested.
Bob stated that on the issue of part-time employment benefits, a survey has
been prepared for the Committee's review. Bob stated that his intent was to
survey 15 or so of the largest Maine municipalities as well as some of the larger
employers in the Bangor area to find out what they do for fringe benefits for
part-timers. Also on the survey are a couple of questions in respect to domestic
partner benefits. At the request of Councilor Baldacci there is a question in
regard to childcare. With the approval of the Committee, the City will begin to
collect the survey information which at least would be a good starting point.
From that, potential costs could be developed and essentially bring the
Committee to the same spot where the City with the domestic partnership issue
where there is an estimated cost number.
Councilor Baldacci stated that at the last meeting this issue should be refined
and seen as part of the budget process. What this Committee can do is refine
the proposal and put some alternatives together for the rest of the Council
during the budget process.
Bob stated that in addition to the level of benefits, the other issue that will take
some time discussing is the definition of a part-time employee. The City has 38,
� what the City calls, part-time employees, 255 temporary employees, and 139 on-
call employees. In the City's Personnel Rules and Regulations, which is the
document that the Committee would be working from, the definition of a part-
time employee was read to the Committee. The City has between 50 and 70
part-time workers depending on how discreetly the definition of part-time is
defined. The City has some part-time people that work 1 day a week for 8
hours. They are scheduled every week. Other part-timers work 16, 24, and 32
hours. Prorating is an issue that Bob is going to look at. One thing the City
wants to try and do with the part-time employees is make sure they do want to
work and are committed to work which most of them are. Bob stated that it
would be important that part-time employees be correctly classified.
Councilor Baldacci asked when the survey responses might be back?
Bob stated that that process can be started fairly quickly and anticipates that he
will have some good information by January.
Councilor Palmer stated that when defining the definition of part-time, the
definition of full-time should be provided.
Bob stated for informational purposes, the City defines full-time as 37.5, 40, or
• 42 hours. Those are essentially the three classifications for full-time employees.
Anything less than that, even 35 hours would be considered part-time.
� Communities and businesses do draw that line at different levels. Generally
speaking in the municipal sector, 37.5 and/or 40 tend to be the standard.
Councilor Baldacci asked if the part-time people were generally non-union or are
they all non-union.
Bob stated that the City has both. The employees that we are talking about with
the Committee would be the non-union. The vast majority of regular, part-time
employees are on the non-union side. Between bus employees and parking
control aides, those two groups probably constitute a good third or more of part-
time employees.
Councilor Palmer asked about the timeframe for both the part-time employee
benefits and the domestic partner issues.
Bob responded that if the City has to go to the unions and offers something to
them and is asking for nothing in return, that could be accepted fairly readily. If
the City waits for the contracts to expire, three expire this spring, the following
year there are no contracts that expire and then eight the year after that, so it is
conceivable that if the City did this at contract expiration, this timeframe could
. be two or three years away.
Bob stated that the City could proceed with the survey, collect data, and plan to
return to a meeting in ]anuary with further information and cost estimates.
The Committee agreed to the survey concept and approach outlined above.
With no further business to come before the Committee, the meeting was adjourned at
5:35 p.m.
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