Loading...
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 � 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 � 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. �