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HomeMy WebLinkAbout2001-01-17 Business and Economic Development Committee Minutes • Business and Economic Development Committee January 17, 2001 at 5:00 p.m. Minutes Attendees: Councilor Baldacci, Crowley, Palmer, Vardamis; City Manager Barrett, Mike Dyer, Sally Brewer, Bob Ziegelaar, Jeff Russell, Rebecca Hupp 1. Request for Financial Support— Bangor Area Children's Choir By way of background, City Manager Barrett indicated that Bernie Kubetr contacted the Mayor regarding the City's making a financial contribution to the Bangor Area Children's Choir in support of their efforts to participate in The National Festival of States in Washington DC in April 2001. This is a year-long festival commemorating the 225th anniversary of the signing of the Declaration of Independence. The Mayor asked that the item be placed on this committee agenda for consideration. The City does not receive many such requests with the last one being from a girl's softball team participating in a national tournament. The City made a $50 contribution to the group. The City does provide annual contributions to the Snowmobile Club which is based on the amount of money received by registration of snowmobiles. Bernie Kubetz, Board Member of the group as well co-chair of the group's fundraising committee, made a presentation to the group and the choir serenaded the Committee with three selections. The choir consists of 51 children with the majority being Bangor residents. The group started in the early 1990's as the Heritage Singers, reorganizing in 1992 as the • Bangor Area Children's Choir as a non-profit, non-sectarian community children's choir. It exists on public support, contributions, and fundraisers. The BACC members and families have done substantial fundraising over the past several months and several local businesses have become corporate sponsors. However, the group is still approximately $10,000 short of its goal for the Washington trip. Kubetz details the requirements for children to become a member and reviewed BACC stafF biographies. Being selected to represent the entire State of Maine at this event is a most unique opportunity. He further detailed the Washington trip in terms of activities and schedules. Councilor Vardamis asked the ramifications of receiving such requests in the future. Barrett indicated that funding has not been provided for this and it does raise the possibility of the Council receiving future requests from local groups. Councilor Crowley asked if other communities had been approached for support. Kubetz indicated 60% of the kids are from Bangor and 40% from other communities. The Board felt it was appropriate to approach Bangor; the children have solicited from their respective communities. Barrett asked how many kids from Bangor are in need of financial support. Kubetz indicated the Board's Treasurer is the only one who could answer that question. Barrett suggested an option of donating scholarships to several of the Bangor children. Councilor Baldacci recognized the importance of the group representing the State of Maine and for the community of Bangor, and suggested a one-year only financial commitment in terms of assisting the group on the Washington trip. i • Councilor Crowley indicated a concern with the suggestion. Although an extremely worthwhile project, he questioned the use of taxpayer dollars for this project. Crowley didn't feel he was at a point to make a decision at this time. In response to Councilor Vardamis, City Manager Barrett indicated the Committee's recommendation would need to go to full Council as there is no line item in the budget for the funding. It would have to come from the City's Contingency Account. He also had neglected to mention earlier that contributions last year to the Maine Arts Commission and Shakespeare Festival were taken from the Contingency account. Councilor Palmer felt it would be a good tool to market Bangor and felt it was a responsibility to the young people in this group to become involved in this process. Councilor Palmer stated his support for a financial contribution. Mike Dyer, Bass Park Manager, suggested there may be some way that the Fair could possibly pay for a performance during the Fair. Barrett suggested that there may be other events, such as a Sister City Saint)ohn visit, at which the group could perform. Councilor Palmer suggested that the city's cable access channel could be used to promote the BACC. The Airport Director mentioned looking into the possibility of getting the kids as far as Allentown, PA by air. He stressed it was a possibility, not a promise. Kubetz indicated he would be in touch with Ziegelaar. Brewer City Councilor Cobb indicated that the Brewer City Council did make a donation to the Brewer Hometown Band for attendance at an event last fall. � Councilor Baldacci suggested and the Committee agreed to come back to their next meeting with staff recommendations on possible options to handle the request. Councilor Crowley suggested some sort of resolution to encourage others to support the group to underscore the City's commitment in general, not financially. He also suggested passing a hat at the annual Chamber of Commerce dinner, where the BACC will be performing. 2. Discussion of Airport Terminal Building Lease Airport Director Ziegelaar asked Allon Fish, the principal of 7erry's Catering, to address the group regarding his business conditions. Fish indicated his business took over the BIA terminal coffee shop and lounge a few months ago and made some small physical changes to the facility at that time to make it more appealing. More important are changes regarding food safety and quality, cleaning equipment, etc. necessary to bring the facility up to standard. Also an investment in employees have been made by way of benefits (health benefits, short and long term disability, life insurance, medical and dental plan) and increases in wages. There has been a difficult balancing act between raising prices but still having them affordable for employees who work on the airport complex. Even though the prices have been moved up, they are still under Portland and Manchester's. There has been an increase in the cost of operations plus a decline in passenger traff'ic so the revenue goal has not been reached. In closing the books for this last year, there is a loss of$27,000. Under direct expenses, Mr. Fish has looked at the commission paid to the Airport, which was $71,500 last year, and asked the Committee if there was any way to get some relief in order to save the employee's benefits and continue to offer • quality service in the concessions. He is looking to breakeven, not to make a huge amount of profit. He proposed a relief from the commission for January to June of 2001. That would help . gain back the loss from last year and within a two year point, when passenger traffic is expected to increase, be at a breakeven point. Ziegelaar stressed that the Airport needs a restaurant/lounge area indicating it is a critical asset. He agreed with Mr. Fish's statement that he is loosing money and the Airport is still making money off his same operation and is somewhat sympathetic. Fish reimburses the City for electrical costs at approximately $24,000/year. The Airport recognizes the essential improvements made to the personnel, i.e. they are a better caliber and in uniform and are no longer minimum wage employees. Ziegelaar would like to review the numbers and come back to the Committee with a recommendation. Ziegelaar said the catering was being hit on two sides—the domestic and international side. Without Fish's catering service at the Airport, there would be no international passenger flights. Fish felt the catering side would close this year with a profit of$2,200. The terminal operation is a bare bones operation. Baldacci asked the length of the agreement, and Ziegelaar said 5 years and currently half way through that time period. The lease is also subject to audit. The Committee agreed with the Airport Director's recommendation to come back to the next meeting with a proposal. A Committee member questioned if a competitive process was involved with the airport space. Ziegelaar indicated it was a matter of the previous Marriott selling out and at that point the lease arrangements were renegotiated. • 3. Review of Air Service Proposal to United Airlines� BIA to Washington, D.C. Ziegelaar indicated that it was a pretry much a foregone conclusion that United Airlines will be back in Bangor with the timing being the question at this point. Currently, b�ased on jet delivery, they are looking at 2003. However, if the merger with US Airways goes through it may be sooner perhaps within a year or so. Jeff Russell reviewed the proposal which the Committee had received in its agenda packet. Two years ago Bangor's average yields were ranging to from 9-10 cents and that it one measure that the airlines look at; the latest polls now show Bangor has gone to an average of 14 cents. Crowley asked for a copy of the first two sections of the report to be distributed to the entire Council. 4. Campus Travel Management Proposal Ziegelaar indicated this is an outcome of the work started over a year ago with the Governor's Air Service Task Force Study. Larry Handel, President of Campus Travel Managers,joined with the Airport to contact a number of local businesses identifying passenger travel to and from Bangor, destination, origination, price and carrier. Airport staff feels it is time to make a decision on his involvement and staff doesn't feel there is enough momentum in the business sector to carry the freight. At the same time, the information provided by Campus Travel is critical for Airport presentations for strategic marketing. Providing the Airport is willing to foot the bill, he can gather the information in such a way that travel agencies cooperate with him. Staff recommended that the Airport assume the $15,000 cost, which would come from the • marketing money. The Committee recommended approval. • Councilor Baldacci asked if this agency was still involved with the University of Maine and he thought businesses were going to organize with leverage to the airlines. Ziegelaar indicated that is the normal process but Bangor's market doesn't work that well. One of the challenges is to get yield up to the airlines to become more interested in our market. If you take the best paying business travels in our market (those from health care, university, ]ackson Lab, Lemforder), go to the airlines and ask for a better deal, at this point it doesn't work well. 5. Bass Park Fee Schedule and Policv By way of background, Barrett indicated the rental rate fees, which are attached to the policy, have been reviewed by the Bass Park Committee. The effect of the rate sheet is to try to reduce the number of line items of separate changes down to something more manageable for both customers and staff. The policy addresses a separate issue of handling non-profit organizations; it prohibits discounts for non-profits and replaces this with the option of giving the Council, through the Finance Committee, authority to determine if the City will sponsor or co-sponsor an event through a contribution from the General Fund. Dyer indicated that this had been reviewed in detail over the past fevu months with the Bass Park Committee. In reference to agencies that have used the Bass Park Complex for multiple years, it was proposed to put this policy in place and notify these agencies that their next event would be operated within the current rate schedule but that within the year from the date that the policy is adopted the new rate schedule would be in effect so that appropriate budgeting can be done. Barrett said Bass Park was created as an enterprise fund and should be covering as much of its operating expenses as possible. In effect, the City has been backdoor subsidizing some of the • events through the enterprise fund. This can still be done under the new policy, but there has to be a conscious decision made by the Council and the Council has to recognize there is a cost associated which should be picked up by the General Fund, not by the Enterprise Fund. There has to be a Council decision that the event is appropriate for support that a governmental purpose is met and that it provides a benefit to the community to justify that cost. The downside is that all requests have to come before and be dealt with by the Finance Committee and then the Council as a whole. The policy will also apply to other City departments. In March, when the City Hall elevator is not working, Council meetings will be held at the Civic Center and the Council will pay the full rate for use of the facility. Councilor Crowley expressed frustration due to lack of a policy in the past, and applauded those involved with the development of the policy. It's an attempt to correct a situation, and the Council will have a better understanding of what is being subsidized. Looking at the opportunities of a new facility in the future, these issues need to be nailed down and in place involving other players involved in funding this new facility. It puts a level of professionalism in place which will be demanded of a new facility. If the Council is ultimately going to make the decision, perhaps the Council should have some responsibility to take it out of its own budget, maybe with a marketing budget within the Council budget specifically for collaborative efforts. Barrett agreed that a line item in the Council budget would be a good move stressing, however, that at this point we don't know the number of requests to be received. Baldacci asked if the Finance Committee could have final authority, and Barrett indicated it would be difficult as using General Fund monies would require Council action. � . Committee agreed to have the item placed on the full Council agenda for adoption with the full recognition that it may come back to the committee for fine-tuning adjustments. 6. Bangor State Fair Pro-Forma and Projections Dyer reviewed financial projection Tables 1, 2 and 3 provided in the Committee agenda packet for the 2001 Bangor State Fair. The goal is to improve upon the average sponsorship by 5% in 2001, which is an approximately 32% improvement from 2000. Sally Brewer reviewed areas where revenue could be improved: sponsorship and contributorship and increased independent midway sales. She distributed copies of a new presentation folder and materials used in sponsorship sales. Ticket sales will go from $5 to $6/adult. 7. Airport Director's Update a. �Land Acquisition—Status: Ziegelaar briefed the Committee on a letter of understanding between the Airport and the Coburn family regarding purchase of 40 acres along Union Street which abuts airport property. It is along the terms which the Committee approved at the last meeting: $12,000/acre, 7% interest carried over 3 years, paid off in 3 years to avoid a large outlay in one year. Committee agreed; a Council Order will be prepared. b. Update on Telford/Volvo Contracts: This situation continues to mature. Total involvement on the part of Volvo in $80M. c. Governor's Conference on Tourism: The January 22-24t" conference was • outlined. Brochures mailed to 6,200 Maine recipients. The Airport will have a strong presence at the conference. The Governor has recommended on the basis of the Task Force report that the State increase its spending on tourism from approximately $4M to $9M. d. Other Items of Interest: PanAm is continuing to do well. Its passenger number have increased every month except for last September. Air rage incidents used as publicity as a stepping stone. BIA agreed to do some footage for the BBC and got some positive feedback when it aired in Europe. Work continues with PanAm for service to the Maritimes. PanAm leaves its plane overnight, Airport receives revenue from that and good advertising as it sits on the ramp. 8. Bass Park Director Update a. Disney on Ice: Total of nine shows, $205,000 in gross ticket sales, 11,000 tickets purchased, building rent was $14,000, $5,000 in concession sales with a per cap concession sale of$.49. Dyer indicated the difference between this year's show and the 1996 show was that the prior show ran Oct. 30 to Nov 3. When events are successful, it is when the Bangor market is up. When a show comes in right after Christmas, it doesn't catch on as well. There is a definite interest in coming back every other year. It brought 85 cast members into Bangor from Wednesday thru Tuesday. Dyer will come back to the committee once the zip code information from ticket purchases is available. b. Other Items of Interest: Councilor Crowley had asked about looking into the beano operation that Penobscot Indians do; the Penobscot Nation is licensed to run beano on tribal lands only. Regarding the article about Up With People going out of business, Bangor Breakfast Rotary was going to sponsor this event. Staff is working with the Club on sponsoring a wrestling show and to have them meet with Fiesta Shows in Portland at the Fair Convention • and perhaps get local charities involved in running the games of chance on the fair grounds. � Tournaments start February 17th, State and Eastern Maine Cheerleader championships on January 27t" and February 10tn Dyer and Joanne Gula have been working with Steve Robbins on a proposal to have a marketing type booth to set up at various shows. It will be attractive, eye catching and upbeat. It will go beyond the fact that the building needs to be replaced. Will give a taste of what could be at the location. � �