FINANCE COMMITTEE

February 18, 2009

Minutes

 

Councilors:     Hawes, Blanchette, D’Errico, Stone, Palmer, Wheeler, Gratwick,

                   Bronson, Nealley

Staff:            Cyr, Barrett, Higgins, Bostock

Others:         Sara Yasner, McCarthy, Brann, Melinkis, Turner, Ryder

 

1.                 Executive Session – 36 MRSA Section 841 (2) – Hardship Abatement

 

2.                 Open Session – Hardship Abatement Decision

Blanchette stated that the Committee had been in executive session in the City Manager’s Office to review Item #1.  During that session, a motion was made and seconded to recommend approval.

 

3.                 Consent Agenda

A motion was made and seconded to approve the Consent Agenda items.

a.                                          Quitclaim Deed – 356 Forest Avenue

b.                                          Quitclaim Deed – 605 Union Street

 

4.                 Bids/Purchasing

a.                                          Request to Waive Bid Requirements – Vehicle Exhaust System – Fire – Air Cleaning Specialists - $36,695

Cyr noted that over the past few months several items have come before the Committee relating to the new Station 6.  This item is the last significant owner- provided item that will be coming forward to the Committee.  When a contract was executed with Barr & Barr to construct the new station, certain pieces were pulled from the contract recognizing that the City had just as much opportunity to competitively bid on them and that the City had existing relationships with vendors.  It made sense to purchase them outside of the contract.  The vehicle exhaust system is a system of hoses to hook up to the fire units so that when started they will automatically clear all exhaust from confined areas.  The proposal is to waive the bid requirements and go with the current provider of service, Air Cleaning Specialists of New England, who will actually move components from the current station to the new station where at all possible to reduce the total cost of the proposal.   The request is to authorize staff to enter into a contract in the amount of $36,695 to move the existing pieces to be reused and to provide all of the duct work and wiring needed for the system to fully operate.  Higgins spoke about the consistency and compatibility of the system.  Blanchette made a motion to accept staff’s recommendation. The motion was seconded.  Gratwick asked about money saved by using the older equipment.  Higgins said it approximates $8,000.   In response to Stone, Cyr said that the cost for access system at Station 6 is comparable to what was paid for at the Police and Central Fire Stations.  Bostock said the original installs were around $3,000/door and these will be $1,700. 

 

5.                 Request to Sponsor City Wide Clean Up – Camp Bangor

Cyr introduced Sara Yasner from United Way.  For a number of years, the City has had a policy on requests for non-profit funding.  There is an application process and United Way has submitted their application on behalf of Camp Bangor for the 10th year.  The policy states that any requests be reviewed in terms of the event’s benefit to the citizens of Bangor, how many people are benefited in a dollar amount, and, if Bangor’s support was not in place, would the event happen or not happen.  Camp Bangor is a program sponsored by the Libra Foundation and, over the years, it began in three Maine cities (Portland, Lewiston, and Bangor).  The Foundation provides a scholarship for every child in grades 4-6 to attend a summer camp.  It is currently $500/student. Cyr spoke about the benefit to the taxpayers as well as the students.  The Libra Foundation requests that the community receiving the benefit provide a financial stake.  As part of the requirements, students need to be a good citizen and activities are available for them to participate in to show their appreciation; i.e. the Citywide cleanup.  For those participating students and families, a certain day is designated to clean up City parks.  The day’s event ends with a barbeque to celebrate.  Camp Bangor is requesting up to $415 for support of the barbeque.  At the end of the event, Yasner submits receipts to Cyr for reimbursement.  Cyr noted that the full amount has never been requested for reimbursement.  Local businesses contribute food to the event.  Yasner spoke about the application process.  A motion was made and seconded to approve the request.

 

6.                 Conversion of Park Woods Units to Permanent Housing

Cyr said this item came before the Government Operations Committee last spring.  There were 4 units previously used for emergency housing and Yardley determined that it was no longer needed.  He recommended that the units be converted to permanent housing.  The City had an opportunity to apply for a HUD grant which was received in the amount of $19,154 to rehab the units.  Under the agreement for permanent housing, they will become available to homeless families with a disabled adult or child.  The housing will be under project based section 8 vouchers only.  Approximately $750/unit will be generated as income for the four units or approximately $3,000/month.  Yardley viewed this as a way to continue the continuum of housing.  A number of modifications and improvements were required to move the units to permanent housing; roofing, window replacement, siding replacement, paint and necessary trim.  The total estimate is just over $38,000.  Staff at Parks Woods had contacted R&K Construction, the current management company of the Park Woods units who deal with all of the tenant issues.  Cyr explained the Parks Woods Trust Fund which currently has a balance of $177,000.  Staff is recommending that the Committee support a Resolve appropriating the extra $19,154 from the Park Woods Trust Fund and authorizing a contract with R&K Construction to complete the work.  Responding to Wheeler, Cyr said the project did not go out for bid.  She said that the procurement regulations allow for the waiving of bid requirements if it is deemed in the best interest of the City.  Responding to Blanchette, Cyr said the units are on Langley Street.  Blanchette talked about needed supervision around the units in terms of tidiness.  Barrett said he would talk with Yardley about the suggestion.  Responding to Stone, Cyr said that there is nothing in place to replenish the Park Woods Trust Fund.  She doesn’t foresee any significant upcoming maintenance requirements. A motion was made and seconded to approve staff’s recommendation.

 

7.                 Request to Take Possession of 1390 Ohio Street - **Postponed

 

8.                 Review of Liquor License Applications and Special Amusement Permits Process - **Postponed

 

9.                 Quarterly Update – Racino (Arena) Fund

Cyr said that at a fall 2008 meeting, the Finance Committee had requested quarterly updates on the status of the Racino Arena Fund.  The original projections represent the initial revenue and expense estimates that were developed prior to the temporary facility even opening.  Those assumptions were based upon the fact that the temporary facility would begin operations in January 2006 and continue through June 2010.  The temporary facility actually opened in November 2005 and the permanent facility opened in July 2008.  In general, revenues appear to exceed the City’s initial projection.  At the temporary facility, they were exceeding the original projections by at least 20% on an annual basis.  In the last six months of the year, there was a downturn in the economy which has affected Penn National and the operation of Hollywood Slots.  While the actual revenues for that time period of six months are probably on track with the original projections, but it was noted that the original projection were based on the temporary facility and are far below the anticipated projections for the permanent facility.  They are 25% below the estimates of Penn National for the permanent facility.

 

On the expense side, there were some unanticipated additional expenses including an extensive amount of money for lobbyists and lawyers during the legislative process to get the slot legislation passed and subsequent runs at changing the current legislation.  Also some expenses to move the site of the permanent facility from the Bass Park area to the riverside block. 

 

Through the end of FY09, the City anticipated having $4.5M.  At the end of December 2008, that initial projection had been exceeded and there is just over $4.5M in the racino (arena) fund. 

 

In response to Palmer, Cyr said it would be fair to assume that $5M would be

reached by the end of March 2009.  Cyr pointed out that she receives weekly financial information from the Gambling Control Board.  Last week was a very good week and they returned back to the normal levels of play.  Responding to Gratwick, Cyr said the funds are now invested in CD’s at an interest rate of over 3%.

 

10.Cultural Commission – Grant Request from the Bangor Folk Festival – Funding for 2009 American Folk Festival - ** New Item

This item was originally scheduled to be heard by the Business & Economic Development Committee but was moved to the Finance Committee.

 

Barrett said that Councilor Blanchette via the Council Chair had requested that this item be placed on the Finance Committee agenda.  The item was placed as the last item on the Finance agenda so that it could run into the 5 pm Business and Economic Development Committee meeting as well.  Responding to Stone, Barrett said that technically the City Solicitor has recommended that any action should be taken by the Business and Economic Development Committee.  Barrett recommended that the vote be opened up by the entire group and it would then be moved to the full Council for final action.

 

Blanchette said she had inquired of staff as to why the item was going to the BED Committee rather than the Finance Committee.  She noted that there are citizens who watch the Finance Committee to see where taxpayer dollars are being spent.  She understands that the Cultural Commission is dealing with dollars that have been previously appropriated and that are in the current budget.  Blanchette expressed concern with the fact that an increase is being requested in these economic times.  She would like to pigeon hole financial matters whether it is the arena, the cultural fund, etc. to the Finance Committee.   She said that there are people who on a daily basis question why the City is appropriating money for a folk festival.  As wonderful as the event is, Blanchette said it is difficult to explain the benefits of the event to some folks.  Rather than discuss the merits of the AFF, she said that she would like to focus on this year’s festival; i.e. will the economy support it, will the event scaled back while still carrying the tradition forward.  

 

Blanchette stated that she wants financial matters to go to the Finance Committee. 

 

After hearing Blanchette’s request to move the item from the Business and Economic Development Committee, Palmer said he felt it fair to bring the item to the Finance Committee. 

 

Hawes, Chair of the Business and Economic Development Committee, noted that the entire Council was present and, if Blanchette’s recommendation goes through, it would require an Ordinance change.  Currently, the Ordinance dictates that cultural commission items go to the Business and Economic Development Committee.  Until a change is made, that is where the item should be heard.  She did indicate that she had no problem with it being discussed at the Finance Committee and following into the Business and Economic Development Committee meeting at 5 pm. 

 

Stone invited guests to the table.

 

Rohman, Chair of the Commission for Cultural Development, said the Commission should in large part be viewed as economic development referring to it as asset-based development.  Bangor is leading the way in terms of arts and cultural, City forests and parks.  The City’s investment in the Commission has had a major impact in the community especially when coupled with matching funds from other sources.  The AFF is one of the great examples of a successful grantees but it is not the only one. He noted the Downtown Countdown, the Maine Discovery Museum expansions, and Bangor Symphony Orchestra. The AFF clearly reaches the entire region and beyond and it is a three-day party for citizens.  Rohman said it is also a good foot forward for the downtown area hotels, restaurants and waterfront.   

 

Rohman said that the Commission is asking the City to approve $85,000 out of the already approved Commission for Cultural Development budget to be used for the 2009 American Folk Festival.  The total cost for the AFF is approximately $1M with over $900,000 coming from other resources other than the City’s money.  

 

Stone noted that a vote on this item will be taken at the Business and Economic Development Committee shortly after 5 pm. 

 

Heather McCarthy, Executive Director of the American Folk Festival, noted that the National Folk Festival started in 2002.  She spoke about the impact and challenges facing her organization this year.  The AFF worked with the UM Center for Tourism Research and Outreach for survey and economic impact analysis.  The data for the 2008 event concluded that over the Festival weekend there is an economic impact of $9.8M in the Greater Bangor Region as a result of the AFF.  She has copies of the State Planning Board reports of Bangor’s tax revenues over the course of quarters and months for the past eight years.   While she wasn’t able to analyze the effect on lodging and restaurant impact in Bangor, she would like to meet with someone who could perform the analysis.   The economic impact, quality and sense of place in Bangor are all enhanced and have moved forward when the folk festival started.  McCarthy noted that over 900 volunteers participate at the event and over 168,000 visits from festival goers in 2008.

 

McCarthy noted that the $85,000 request represents 11% of the Festival’s budget for 2009.  The Board is working on new projects and being creative with new ways to market the event, to get the message out as to the cost to present the event and to identify new sources of revenue.     

 

Responding to Stone, Blanchette said she wants to know why the financial aspect of this or any other entity in the City to which the City disperses money does not come through the Finance Committee.  She stressed her support of the Festival.  As an elected official, she needs to make certain that the 33,000 residents of Bangor know where their money is being spent.  She stated that she does support cultural development in Bangor.  Because she has questions, she doesn’t feel it necessary to have an entire meeting focused around her.  She is asking for accountability and to run government like a business.

Rohman suggested that the reason for the Cultural Commission’s connection with the Business and Economic Development Committee might be because of economic development staff member’s presence on the Commission.  He made the argument that it is where it belongs.  It is an economic development issue. 

 

Gratwick is the Council representative on the Cultural Commission and reported that he feels that the subcommittee structure is working very well.  He feels that the $85,000 would be money well spent at this time.

 

Responding to Wheeler, McCarthy said the economic factor used was 1.5.  He asked if McCarthy would be prepared to give an itemized breakout of the administration costs.  She referenced information she had submitted previously asking if it didn’t cover all of this prior requests.  Wheeler said he has a concern about salaries and fringe being lumped together.  He would like specific information and McCarthy said she would provide it prior to the upcoming Council meeting.

 

Barrett said that over the last 20 years the image of Bangor has changed dramatically.  The downtown has been reinvented and the City has started to reinvent its waterfront making great progress.  The Folk Festival has changed the City’s image throughout the state as well as its own self-image.  Barrett noted that Rohman has taken statewide lead in creative economy areas and said he hears of people looking up to Bangor as an example of what can be done in a community.  

 

Stone suggested a two-minute break before starting the 5 pm Business and Economic Development Committee.

 

A motion was made and seconded to adjourn at 4:58 pm.