FINANCE COMMITTEE

August 18, 2008

Minutes

Council Attendance: Stone, Palmer, D’Errico, Farrington, Blanchette, Hawes

Staff Attendance: Cyr, Barrett, Hupp, Dyer, Ryan, Cammack, Yardley, Ring

Others: Tim Woodcock, James Gerrity, Joyce Hedlund, Ray Cota

1. Consent Agenda

A motion was made and seconded to recommend passage of the Consent Agenda item one.

a) Council Order 08-270, Authorization to Apply for, Accept and Appropriate $15,000 from the Maine Community Foundations’ Penobscot Valley Health Association Fund to Implement the Channel Markers Youth Leadership Program

1. Bids/Purchasing

a. Roof Repairs – Bass Park – AA Randall & Sons - $15,483

Cyr noted problems with the Auditorium roof during this year’s basketball season. The roof needs to be recoated. There were six responses to the City’s bid request. Staff recommends award of the bid to the low bidder, AA Randall and Sons of Glenburn, in the amount of $15,483. They also submitted an alternate bid which was a generic coating for $11,383 but it didn’t have an extended warranty. The $15,483 response includes a ten-year warranty. Palmer stated that as much as he would like to avoid such expenses there doesn’t seem to be an option. Responding to Palmer, Dyer said that blue tarps would be less expensive but there would be an issue with anchoring them in place. The aluminum coating reflects a high percentage of the sunlight which causes the membrane underneath not to dry out. As part of this project, Dyer said the four air handlers over the main floor that are suspected to be part of the cause of the leak and which cause warm air to go out through the roof, will be capped and sealed. Dyer noted that the last roof work completed came with a 10-year warranty and that was 16 years ago. A motion was made and seconded to approve staff’s recommendation. The work should be completed within the next month.

b. Photocopier – Engineering – Spiller’s - $12,625

This item came forward as part of the Engineering Department’s budget request to replace their current copier. The new unit has the capability to reproduce high quality copies of large maps and plans which are used for bid specs, field copies, plan surveys, etc. Due to the low bid quote, staff also added a scanner to the unit. Spiller’s of Lewiston was the low bidder at a base cost of $12,625 which includes the unit, the scanner and the first year’s maintenance. Responding to Stone, Ring said there is a one-year warranty. Stone asked about leasing versus purchasing. Cyr said a comparison was not done. Since the City tends to keep the units for long periods of time, it wouldn’t make sense to lease. Responding to Stone, she said the criteria used to determine if a lease or a purchase is appropriate is: is the item a high turn over item, the amount of use, the cost of replacing it every three years, is it equipment that will be kept for 10 plus years. The reasonable life span should be 10 years, Ring said. Stone questioned the third year maintenance cost increase. He asked for a price of maintenance going out 8 years. Cyr said staff will ask the question and return to the Committee. She also asked if the Committee is willing to approve the item pending the information. Stone said he was only one of the Committee. Ring said the current unit is not operable and his staff has been outsourcing printing needs. Stone said he would change his mind. Palmer made a motion, which was seconded, to recommend approval. Stone again asked Cyr to find out the maintenance information he requested.

c. Toners Cartridges – City Wide - information will be distributed at meeting, awaiting results of reference checks prior to final recommendation

Cyr provided the bid sheet information stating that this is the first time that the City has actually issued a separate bid for toner cartridges as opposed to part of the annual office supply contract. The City and School decided to join forces regarding purchase of toners. There were 11 responders. The low bidder was M&B Supplies of Monroe, New York at $48,144.44. Their references were not reputable in terms of service. The next low bidder was The Tree House of Newton Center, Massachusetts at $49,569.75. The School Department has done business with them in the past, and a number of current references provided good recommendations. Staff recommended bid award to The Tree House. Cyr stated that Corporate Express, the current office supply vendor, is not happy with the recommendation. Responding to Blanchette, Cyr said that the City does recycle the cartridges. It is part of the bid requirement for toner recycling. Not all toners are applicable for credits but some are, and Ryan separates them out. For information only, Blanchette said she would like to know a dollar amount for cartridge recycling. Ryan said he has been keeping track of the information and will provide it to the Committee within a couple of days. In response to Stone, Ryan said CE has their own brand but the City’s Information Services Department has stressed the need to use brand names as opposed to remanufactured cartridges due to problems with them. A motion was made and seconded to move staff recommendation.

d. Request to Waive Bid Requirements – Penjajawoc Watershed Management Plan – CH2M Hill

Barrett said the City has been working with the State DEP and a range of stakeholders to develop a Penjajawoc Watershed Management Plan. This was a spin off by the DEP to meet an EPA requirement to do a total daily maximum load analysis of the stream. Throughout the process, the State has been focused on a specific methodology which basically related to impervious cover. As staff moved forward in the process, various stakeholders and businesses became uncomfortable with that methodology and with the data historically collected on the stream. The business community suggested that they and the City hire a consultant (CH2M-Hill) to do a number of tasks: to pull together all of the data that has been collected on the stream over the years and to determine if there are areas where additional data is needed for a better understanding of the stream. CH2M-Hill would work with the data to select an appropriate computer water quality model that could be applied to the stream to provide more info about the potential impact on the Stream in terms of some of the retrofits and changes that need to be made in the future. As projects are done in the watershed, both the City and the business community want to be certain that projects can be measured for their impact and their cost justified. Once that computer model is applied to the stream, there needs to be a monitoring plan put in place to measure improvements. The City is required to submit a plan by the end of the month to the State. It will first come to the City Council for approval. The plan is strongly building on an adaptive model meaning that it can be modified as the City moves forward. The business community has proposed to pay half of the $25,000 project cost. Staff recommended approval. CH2M-Hill knows the City well and has extensive knowledge in the area of water quality and urban streams. Staff feels this is the next step to fill in gaps in its knowledge that need to be filled, select a model that can be applied to the watershed to help the City define its plan going forward and to develop a monitoring plan that will insure actual changes are seen as projects are implemented. Barrett feels this will assist the City, the business community and DEP in moving forward on an agreed upon basis of common knowledge and trust going forward. He feels it is a solid next step to make the project a success. Tim Woodcock, representing Webber Oil and other area businesses, said it is a very complicated and significant issue for the City and citizenry. He said that a data base is needed in order to proceed with the best results for the dollar expended. All are concerned about the quality of the watershed. He feels it is anticipated that the City will probably revisit its ordinance structure and may adopt some ordinances based on the results of the watershed management plan. Woodcock praised City staff for their work on the project. Responding to Farrington, Barrett said it is no longer possible to determine the water quality of the stream in 1968 as there was no testing or analysis at that time. The City has talked with the State and the stakeholders about the effect of the Marsh on the water quality in the stream. The State has agreed to look at how far downstream the effect of the Marsh extends. There is a provision in the Clean Water Act that exempts naturally occurring difficulties from the requirements of the Act. If the City can show this, that stretch would not need to meet Class B standards. The City is required to make its best efforts to bring the Stream to Class B standards. The City wants to prioritize the projects to arrive at the closest point of Class B standards at the lowest cost. Barrett feels that the business community realizes it is involved in solving this problem. It is focusing on cost effectiveness and the ability to measure where improvements are actually having the anticipated effect. Woodcock said it is reasonable to collect information that bears on the predevelopment quality of the area but it can’t be scientifically quantified. This is a dynamic system and process. D’Errico said there are a limited number of residential properties that will be impacted. Palmer praised all involved. Blanchette expressed her pleasure with CH2M-Hill. A motion was made and seconded to move staff recommendation.

e. Ambulance – Fire – Custom Truck & Body Works - $103,000

Cammack said 9 bids were issued and 4 responses received. The low bidder was Custom Truck and Body Works of Woodbury, Georgia. Because all of their references were from their immediate vicinity, he had concerns about what their immediate follow up would be should the City take possession of the truck and have subsequent difficulties. Cammack sent a mechanic to Georgia to look at the truck and the facility. He was satisfied with the firm, the quality of their operation, and also visited neighboring communities. Custom Truck suggested changing from a Ford product to a GM product. In the past, all of the specs are on a Ford chassis. When purchasing an ambulance, the Department always has to deal with two manufacturers, one for the chassis and one for the body. When the bid was prepared, staff wasn’t aware that GM had a chassis that would meet Ford specs. Whited Ford has always taken care of the chassis work but is no longer working on ambulances. Cammack said that Darling’s picked up the warranty work but they do not have a way to lift up the ambulances to perform work on them. Therefore, warranty work on the Ford chassis has been problematic. After a conversation with Quirk’s, Cammack found that they were able to work on GM products and have the equipment to lift the vehicles. He asked the Committee to consider approval to move from the Ford chassis to a GM chassis.

Responding to Stone, Cammack said there is nothing different on the current spec than has been considered in prior years in terms of extra add-ons. One of the costs that is not included in the spec, because it is done locally by Whitten’s, is the mobile radios and mobile terminal data hookup which is an anticipated cost of $1,800. Responding to Stone, Cammack said that the current vehicle requires a lot of repairs and Barrett said that to not have the unit represents a loss in revenue of $250,000-$300,000. Stone specified that when he asks questions prior to the Committee meeting that he would like a written response. Cyr agreed to do so. Cyr said that ambulances on average are replaced every 3 to 3½ years. The Department has five ambulances and generates annually $1.5-$1.7 in cash revenue. She noted that an ambulance pays for itself in about 4 months. Stone asked if that was net after payroll and depreciation on the vehicles. Cyr said that payroll is paid regardless and is not a direct cost and it can’t be avoided. Stone said he would like to see a true bottom line when costs are allocated appropriately. Barrett cautioned that there is a distinction between full cost and budgetary impact.

Responding to Palmer, Cammack said he has written documentation from Custom Truck of what it would cost to change from the Ford specs to the Chevrolet spec. The item in front of the Committee outlines the new 2009 Chevrolet G4500 with the same wheel base as the Ford and the cost would be $108,000. The estimated delivery date is within 90 days from receipt of the chassis. Cammack pointed out that even with the additional $5,000, Custom Truck is $89,000 lower than the second bid. Responding to Palmer, Cammack explained that the Ford work is currently be done at Darling’s but they have no way to safely lift the vehicle. Palmer questioned if switching from Ford to GM was in keeping with the bid process policy. Cyr said yes and, in all bids, the City reserves the right to negotiate with the low bidder when it is in the best interests of the City. Farrington made a motion to approve staff recommended. It was seconded by Palmer.

f. Public Works – Sodium Chloride

Cyr noted that this was an added item to the original agenda. Staff received an e-mail from the Penobscot Valley Council of Governments late this afternoon that they had opened bids for sodium chloride for the coming season. Last year, the City participated in the PVCOG bid process for the first time. Going in with PVCOG, the City is not obligated to enter into a contract with their chosen supplier. It is up to each individual community. Last year, the prices seemed high with PVCOG. The City then went out for bid and found the responses to be even higher. This year’s price from International Salt Company through PVCOG is $66.99/ton, which is a 14.5% increase over what was paid last year. Staff feels that this is the best price. On an annual basis, approximately 5,000 gallons are used. Responding to Palmer, Barrett said that over the years the City has changed dramatically in how it applies salt and sand to the streets. The City has gone to computerized control of its salt and sand machines in an effort to reduce costs and to deal with environmental concerns. Secondly, depending on the anticipated nature of the storm and temps, the City will pre-wet streets for some storms. The Public Works Director and crews make decisions on what treatments to use based on the anticipated nature of the storm and temperatures. He anticipates additional improvements in these areas. In the various impaired watersheds, the City will be working with the private sector to try to get them to adopt best practices in these areas. A motion was made and seconded to approve staff recommendation.

2. Funding of Airport Energy Conversation Measures

In the middle of June, Cyr noted that Airport and WWTP staff and Honeywell discussed energy conservations measures with the Council. At that time, staff indicated it would return to the Committee with a proposed financing arrangement for the project. The original cost based on a total project estimated cost was close to $3M. Due to structural concerns with four hangars at the Airport, Honeywell has revised their project scope and has eliminated the insulation portion for the hangar roofs with a revised cost of not to exceed $2.1M. Staff will in all likelihood revisit the Airport hangar project with Honeywell. Staff is looking for approval of the funding option for the Airport. There are two choices: debt or lease/purchase financing or use existing funds. The cost of the financing would be 3.75-4.0% annually. Cyr said the Airport has adequate cash or cash equivalent at this time to pay for the project. Depending on the hangars and the pending bio-mass boiler, there could be other larger projects pending at the Airport. Responding to Stone, Cyr said there would still be adequate funds in the Trust Fund. The $2.6M is in a money market account. Barrett said he is very comfortable with the suggested funding mechanism. When the projects are completed, he said there will be an approximate annual savings of $300,000 at the Airport. Hupp said staff has been continually reinvesting in the Airport’s infrastructure as well as adding to the Trust Fund. In response to Palmer, Barrett said the wood chip boiler project is under further discussion. Palmer made a motion to approve staff recommendation. It was seconded.

3. Review of Proposed Replacement of Fire Station #6

Item postponed pending further information.

Committee adjourned at 6:00 pm.