Budget Review Committee

BUDGET REVIEW COMMITTEE NOVEMBER 24, 2014 A meeting of the Budget Review Committee was held Monday, November 24, 2014, at 7:10pm in the Aldermanic Chamber. Alderman-at-Large David W. Deane, Chair, presided. Members of Committee present: Alderwoman Pamela T. Brown Alderman Ken Siegel Alderman David Schoneman Alderman Michael Soucy Members not in Attendance: Alderman-at-Large Lori Wilshire, Vice Chair Alderman Richard A. Dowd Also in Attendance: Mayor Donnalee Lozeau Bruce Codagnone, CIO/IT Division Director John L. Griffin, CFO Alderman Sean M. McGuinness PUBLIC COMMENT - None COMMUNICATIONS From: John L. Griffin, Chief Financial Officer Re: Amended Resolution R-14-052 MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE MOTION CARRIED UNFINISHED BUSINESS – None NEW BUSINESS – RESOLUTIONS Chairman Deane The Mayor has asked that we go out of order and address R-14-052 first. R-14-052 Endorsers: Mayor Donnalee Lozeau Alderman Richard A. Dowd AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED THE AMOUNT OF SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000) FOR THE PURCHASE OF A CITYWIDE TELECOM SYSTEM INCLUDING BOTH THE CONSULTANT PHASE AND EQUIPMENT  Re-Referred to Cmte – 9/23/14; Tabled 10/27/14 MOTION BY ALDERMAN SIEGEL TO TAKE R-14-052 FROM THE TABLE MOTION CARRIED MOTION BY ALDERMAN SIEGEL TO AMEND R-14-052 BY REPLACING IT WITH THE AMENDED VERSION ATTACHED TO MR. GRIFFIN’S MEMORANDUM ACCEPTED EARLIER THIS EVENING MOTION CARRIED Budget Review – 11/24/14 Page 2 MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE AS AMENDED ON THE QUESTION Mayor Lozeau The amendment that you have reflects the concerns that you raised about bonding the amount of money for the consultant. I had asked the director to go back and see if he could break out the tasks for the consultant and what it would cost us to do the initial work to get us to an RFP. The amendment that you have here tonight reflects that and you’ll see that $30,000 for that scope of work which Mr. Codagnone will walk through with the committee. The funding sources that we are proposing to be used to cover that cost so it’s not bonded is $20,000 from the still vacant purchasing manager position and then we asked police, fire, and schools is they would contribute a portion to this. As you can see, police and fire are each contributing $2,500 and the schools for $5,000 which is what makes up the $30,000. Mr. Codagnone The challenge to any project like this is that the heavy lifting is really getting around the current state and understanding exactly what we have. I’ve spent 30 years of more in the corporate world where it’s a little more straight forward. We have roughly 40 buildings here in the city and it’s very unique. Finding the right consultants to come in that would understand the complexity of the city environment, the various cabling constraints that we have within the city divisions; getting the right person was very challenging. We interviewed quite a few people and a lot of them came back with more of a cookie cutter type RFP that would put the responsibility on vendors to come in and oversell us on what they had. What we really wanted to be able to do is to do a deep dive, a lot of the leg work and understand exactly what we have for cabling, routers, and switches. We went back to the consultant that we have been working with and had him break it down a little bit more granular so that we could do the due diligence, the discover, document the environment because a lot of the environment is not very well documented and that’s going to be crucial in getting an accurate design. Once we go through and design and identify the environment, we will have a very good understanding of what the costs are going to be. The top half of this plan is the assessment, the design, and the planning for the budget where we will go out and do the site inventory, the documentation, and all of the carrier details that we have throughout the city. Once we have that we will be able to come up with an exact cost or a fairly close cost as to what it is going to cost to implement the telecom strategy throughout the city. That gets us from the $30,000 from that point. Once we have that cost, we go out to RFP and work with the vendors on the Massachusetts State Contract where we can get some better price discounts. The particular consultant that we are working with will work very closely with us to try and drive those costs down and make sure that the vendors are aligned to the performance spec. Alderman Siegel I noticed there are two items here. There’s the initial assessment design budget which is just under $30,000 and I assume that’s covered by the $30,000 that’s outlined? Mr. Codagnone That’s correct. Budget Review – 11/24/14 Page 3 Alderman Siegel Then there’s additional oversight management which I would say I would definitely agree with. Wasn’t the intent to have this a part of the bond, the oversight? Mr. Codagnone The second part is part of the bond. The $30,000 is what is in the amended document before you. Once we get to the design, procurement and implementation that will be part of the bond. Alderman Siegel It’s interesting that’s there’s something that is estimated to within $20.00 for something which doesn’t even have an RFP yet. Does that imply that there’s a pretty good idea of what is going to be designed going forward already? What can I infer from that level of exactness? Mr. Codagnone There’s already predefined hourly rates because the consultant is on the Massachusetts State Contract so when he applies those figures to…say if it’s $195.00 per hour and he applies it to a certain number of hours for each thing, if he goes max on certain hours, it winds up coming to a dollar value, but this is a worst case scenario. We are hoping that he is going to come in less than that. Alderman Siegel Is there idea to put a cap on hours? I do appreciate consultants but they appreciate us even more. Mr. Codagnone There will be a cap. The intent is to come up with a worst case scenario like this and then drive under it and not go over it. Chairman Deane You couldn’t find the additional $24,000 to pay for the rest of the exercise, the procurement implementation management? Mayor Lozeau I think nothing says it has to be part of the bond, that last $24,000 but I thought we should look and see what the RFP’s come in at because I think at that point we can look and see whether or not we want to bond that or whether we want to see if we have funds available for that. I think your action tonight doesn’t necessarily commit the $24,600 to being bonded but it says that it may be. I’m trying to get us to the point where we get the RFP out and we get the bids back so we know whether this is a $700,000 phone system or a $500,000 phone system or something less than that. Chairman Deane So approving the bond really isn’t…we need the initial $30,000 for the assessment and the design, right to generate the RFP? Budget Review – 11/24/14 Page 4 Mayor Lozeau That’s right. Chairman Deane So that could have been done with a separate piece of legislation, right? Mayor Lozeau It could be, yes. Chairman Deane One of the problems I have is letting a bond for $720,000 so we don’t even have any idea what the cost is going to be. Mayor Lozeau I understand that and can appreciate that but as you know we don’t sell the bond until we do know what those numbers are. We are just saying that we don’t think it will be worse than that. If you want to do this in two pieces and just for now authorize the amount to get the consultant and the RFP in, I don’t think any of us have an objection to that. Chairman Deane But we would be changing the title of the body of the legislation significantly whereas we would have to go through the process again to post and then file another piece of legislation for the sum total. I don’t have a problem doing that. If we get the $30,000 and go out and find out what it is, I think we are all pretty much understand what the issues that we have with our phone system. That way the IT Director can go out and we can get the RFP done and have the assessment and design done. When the RFP is generated and we bring the vendors in then we’d have a pretty good idea at that point what the total project cost would be in the end. Is that correct to assume? Mr. Codagnone I think that the approach we are taking here with the $30,000 is for us to do the due diligence to get a design and then from that we can identify what the cost is going to be; not go out to RFP at that point. We will know what we are going to…it will actually help us when we do go out to RFP because we will know exactly what we should be getting back from the various vendors that are bidding. Chairman Deane Okay. Alderman Siegel As a procedural question, there’s two parts to this, one is to; we’ve changed the legislation so we are actually taking it out of the bonding issue to pay for the consultant. I don’t believe that is a legislative function, we are just explain why we reduced the legislative amount in this bond, is that correct? Budget Review – 11/24/14 Page 5 Chairman Deane No. We are taking money from other sources so it’s got to be done legislatively with account numbers..they are transfers. Mayor Lozeau We are re-appropriating funds for this project. Alderman Siegel So it isn’t appropriate to table half of this? Chairman Deane No. Alderman Siegel Pass the front half which is the consultant portion. Mayor Lozeau We could certainly amend the legislation to do just the part that refers to the… Chairman Deane But if we do that we are going to have to do then is schedule another public hearing. Mayor Lozeau At a later date though, right? Chairman Deane Right and then that way you can do what you have to do and we can figure out what the legislation is and what the dollar amount is. Once everything is done we can talk to Ms. Lovering about scheduling another public hearing. Alderman Siegel I am in favor of getting the process expedited and it seems to me if we could just authorize the transfers to get the RFP money available, there doesn’t seem to be any urgency to get the other part done so perhaps we could come up with some language in committee to craft that and slice out the bonding piece and leave in the transfer. Chairman Deane We can certainly do that. Mr. Griffin, do you have account listed with the memo? Budget Review – 11/24/14 Page 6 Mr. Griffin I have the account numbers in the amended legislation. Mayor Lozeau The amendment that was provided, if you go to page 2, where it says “whereas resolved further that transfers are approved” if you start the legislation there, I think it does what needs to be done and then the fiscal note is the bottom part and just take out the language that relates to the bond. I think that’s your new piece of legislation. Chairman Deane We’ll take R-14-052 and we will strike the title and change it to… Alderman Siegel I would change the resolution to read “relative to transfer funds for a consultant.” Chairman Deane The title is going to read “Relative to Transfers to Fund the Assessment and Design of the Telecommunications Voice Project” We are going to strike the first three paragraphs, 4th sentence, 4th paragraph will read “RESOLVED that the following transfers are approved to fund the cost associated with the hiring of a consultant to design a new telephone system and prepare a request for proposal that we issue to vendors to install the new telephone systems to achieve current state documentation a consultant will assist us in discovering a network design. It will be the solution architect that will partner with us to design a citywide telecommunications strategy from the following departments: Department 130 Department 150 Department 152 Department 191 The transfer would be made to department 122, Information Technology for a total of $30,000. Mr. Griffin, you will have to change your fiscal note to show the reduction from those departments to the increase in the.. Alderman Siegel Remove the first paragraph from the fiscal note would be fine. Chairman Deane No because he has to show a fiscal note of what the action did to these other departments. Mayor, I would get in touch with legal and have them put a marker in on a piece of legislation for what we took out of this and then when the work is done, put the figure in and bring it down and we will have another public hearing and by then we will know what the cost is. Budget Review – 11/24/14 Page 7 MOTION BY ALDERMAN SIEGEL TO AMEND R-14-052 MOTION CARRIED MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE OF R-14-052 AS AMENDED MOTION CARRIED R-14-089 Endorser: Mayor Donnalee Lozeau RELATIVE TO THE TRANSFER OF $15,000 FROM PRIOR YEAR ESCROWS – ECONOMIC DEVELOPMENT - BIDA APPRAISAL INTO DPW PROJECTS ACTIVITY “EAST HOLLIS STREET GATEWAY IMPROVEMENT PROJECT” MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE ON THE QUESTION Mayor Lozeau You may recall we accepted $3.6 million from the state to build the East Hollis Street round-about. A component of that was looking at the design work that could take care of our issues surrounding wastewater and the pump house and in July we authorized a contract with STV, a company that was successful in their bid for the work for doing the design comprehensively for that area. The legislation that we brought in allocated funds through the different resources; wastewater picked up a piece of the cost and Renaissance, the developer for Bridge Street was picking up $30,000 of the cost. We agreed not to move forward with signing that contract with the company until we had received the $30,000 from Renaissance for their share. Since that time, Renaissance has now in September contributed $15,000 of their $30,000 and in the meantime we are still waiting to move forward which is presenting some challenges. We were trying to find a way to move the project forward without having a terribly negative impact. Renaissance says that they are still committed to providing that $15,000 but in the meantime I feel hamstrung about how to move forward. You will recall that there is money that we escrowed, just over $30,000 for BIDA to use for an appraisal on that Bridge Street site. In the meantime, Renaissance moved forward and paid for an appraisal of that site. Chairman Deane How much was that? Mayor Lozeau It was just under $10,000. They did an appraisal of phase I, that’s why it was so low. To do an appraisal of all three phases would be closer to the $30,000 mark. It’s my intention to still accept the $15,000 check from Renaissance but in the meantime, I’d really like to move forward with this contract. I think it’s a little unfair to the company that bid on the work and has been holding their price for us since July. Chairman Deane When are they going to come up with the other $15,000? Budget Review – 11/24/14 Page 8 Mayor Lozeau They said that they will but I don’t know if that will be next month or when? Chairman Deane When they ask you for the money what do they tell you? Mayor Lozeau That they intend to pay it. Chairman Deane Did you ask them when? Mayor Lozeau Yes but I’m not getting an answer and I think it’s because they are probably struggling with some cash flow and money they have already invested in the project. I don’t want to delay the East Hollis Street project; I don’t want to jeopardize the funds that we have accepted. I don’t want to not have a solution when we get into the spring. I think that it’s really critical for that area of the city to have a plan and I think we need to get this moving forward. When the $15,000 comes in from Renaissance, that’s great but in the meantime we have the money that we escrowed for an appraisal, much of which they have already paid so I thought it seemed like a fair resource to use that money instead of for the appraisal for this work that we have all agree we would like to see done. That’s what the legislation is; it moves that $15,000 out of that appraisal escrow and into this project so we can move forward. Alderman Schoneman What is the total project cost? Mayor Lozeau The total project cost is $109,784. That what was approved in the Finance Committee for the contract moving forward and then those costs were broken down in R-14-047; $55,000 from wastewater; $30,000 from East Hollis Street; and the last $25,000 was from contingency. That’s what set up the money for this project. Now we have all of that money with the exception of that last $15,000 and because I had committed to the Board of Aldermen and the Finance Committee that we wouldn’t start that project until we had all of the $30,000 in hand from the other company I thought that it was reasonable for me to come in and say that’s not happening. Here’s a source of those funds and that’s what is holding us up and can we move forward in this manner. Alderman Schoneman How long will this project take? Mayor Lozeau The design work shouldn’t take more than 90 days. Budget Review – 11/24/14 Page 9 Alderman Schoneman What is the interface between this project and the Renaissance? Is the ultimate completion of this project dependent on Renaissance or would it be done anyway? Mayor Lozeau The reason that we were able to get Renaissance to contribute anything to this city project was because they saw the benefit to their project. It’s very tricky to get to their site when you come down Canal Street to Bridge Street and then into their site. By putting the traffic circle in there’s an easy on and off at their site which would be anyway based on thinking about where that circle and all of those points come off. We just thought it would be reasonable to ask them to contribute to this design plan and they were willing to do that. At first, the amount of the design work was higher than the $109,000; and Renaissance and wastewater was going to pay more and we were having trouble putting the funds together. We had the company downsize the design work and they came back with the $109,000 and at that point Renaissance said okay. When we started it was going to be Renaissance $70,000; wastewater $70,000; and then contingency for the difference. We have all of the money except for this $15,000 and had I not committed that money would come in first…I was confident that the $15,000 was still going to come; I could have taken another approach. Alderman Schoneman This is a project to design that traffic circle? Mayor Lozeau It’s a project to design the traffic circle and encompass all of the work that needs to be done for wastewater. There’s an open overflow area that we would like not to be open. There’s a pump house there, and a potential piece of the train station on one side. There are a lot of moving parts and we wanted to do a design that included wastewater, landscaping, traffic future use all into one so we tried to share how those costs would be allocated. Alderman Schoneman I think sharing the cost is the right thing to do. So when Renaissance pays the $15,000 it will replenish…so essentially it’s a loan. Mayor Lozeau It’s up front for the project and if they come through with it then great and if they don’t, when they move forward with their project I think we are still going to carry it on the books saying that you committed to this. Alderman Schoneman I think in their own minds if they see that the money has been paid by us, it could be easily forgotten about. Mayor Lozeau That might be the case. I can tell you that the Renaissance project right now is on hold because of the Budget Review – 11/24/14 Page 10 discussions that we have had about the amount of low income housing that would be included in the project because it changed significantly from where we started. We still want that design work. The reason that I felt comfortable using this money is because we set it aside for an appraisal that they already paid for so to me if we were to have paid for that appraisal, that’s money that they would have been able to give us for this. Chairman Deane But there’s a good reason why they paid for the appraisal, right? Mayor Lozeau I understand that. Chairman Deane It was in their best interest to have the appraisal done. Mayor Lozeau I agree but I am just saying that we did put money aside for us to pay for the appraisal and I think they think it’s also in their best interest to have this design work done and have the round-a-bout built. I’m just not sure that they have those funds readily available. Alderman Schoneman If Renaissance continues to be delayed, is this traffic circle still a good idea? Mayor Lozeau The traffic circle has nothing to do with Renaissance other than it benefited land that the city owns that they can potentially build on. This traffic circle had been put in the 10-year plan long before Renaissance ever came to the table. Alderman Siegel I am very empathetic with your frustration and I’m disappointed. Is it Mr. Vayo that you have been interfacing with? Mayor Lozeau He’s their local staff for the project work with us but Mr. Porter and Mr. Monty has been who we have consistently worked with. Alderman Siegel Maybe Mr. Vayo can spend less time scouring the internet for sidewalk solutions and spend a little time trying to find $15,000 to pay back the city. I’m supporting this only because I want to see the project move forward. MOTION CARRIED Budget Review – 11/24/14 Page 11 Chairman Deane Who approves the design when it comes in? Mayor Lozeau When the design comes in it is likely going to be the state that’s going to be the one to approve it because they are paying for the project. R-14-091 Endorsers: Mayor Donnalee Lozeau Alderman-at-Large David W. Deane Alderman-at-Large Lori Wilshire Alderman Michael Soucy Alderman Richard A. Dowd Alderman-at-Large Diane Sheehan AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED THE AMOUNT OF SEVEN HUNDRED FORTY SEVEN THOUSAND DOLLARS ($747,000) FOR A CATERPILLAR LANDFILL COMPACTOR MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE ON THE QUESTION Alderman Schoneman I have question about the Bomag. Does this have any salvage value? Chairman Deane It has about $45,000 worth of value. That’s what the Director of Public Works got for it. They wanted to give us $25,000 when she initially went out. We have an old CAT unit down there now and this unit would come with the carbide wheels and you get some big time mileage out of that, it’s a little more but that’s where you compaction is. The other nice thing is that it’s made in this country and the parts are readily available. The director is going to put the price for service work out to bid. Also included were the Bomag issues. The biggest problem is that the replacement parts are from Germany and a few months ago we had to replace a gear box and it was $40,000. The piece of equipment has not worked right since the day we got it and the piece of equipment is what we should have bought to begin with. Alderman Schoneman Do we have a sense of how other municipalities have done with this piece of equipment? Chairman Deane We have one down there now. We always ran CAT compactors. Back when the $7.4 million landfill expansion bond was floated, we were told by the former superintendent at solid waste how nice the Bomag was and what we would see in landfill air space gains by the compaction rate of that Bomag would more than pay for itself. I didn’t buy it then. I look at this, and I get the same compaction rate out of this piece of equipment here with one more pass. For every four passes that this makes, a Bomag would make three. When you look at the amount of waste that we bring into our landfill weekly, it’s not Budget Review – 11/24/14 Page 12 like we don’t have time to make one more pass. If you were running a huge, huge landfill that was taking in a lot of tonnage then it might make a difference where the trucks would be coming in quicker than you could compact it. But we don’t have that case here. Alderman Siegel As the BPW liaison, I have been following the saga. I highly recommend that we adopt this. For those people that are unaware – there might be people out in the public that don’t understand what this does and why it’s important – the landfill has a certain amount of area that we have accessible to us. We keep piling trash. To the extent that we compact that, that extends the life of the landfill which is very, very important for the city. If this piece of equipment, the Bomag, would continue to be used with its failure rate not only it cost us out-of-pocket for that but because of the compaction problem, we would be relying on another piece of equipment which is the old Caterpillar, the smaller unit. Should that fail, we have no compaction which in the long run is hugely expensive because as everyone will know expanding the landfill or getting new landfill area is very, very difficult and expensive. This is more than just a little critical to make this thing happen and have this work properly. Chairman Deane The one other piece of equipment that we do have is a bulldozer but you don’t get much compaction with a bulldozer. Alderman Schoneman What is the expected lifespan? Chairman Deane We have one down there now that’s a ’99. When I first got on the Board of Public Works, we bought that. Mayor Lozeau It’s a 1999 Caterpillar. Chairman Deane And it’s still running. Alderman Soucy The Bomag that we purchased is that unique and we just got a lemon or are all the Bomags having that problem? I’m just wondering if this company might owe us something if they gave us a lemon. Chairman Deane I asked the Mayor, who probably asked the Director, is that how that worked? I’m getting confused here, going through the proper channels as I always do for not only the specs on the new one but what had happened, the file on the repairs and issues that we had with the Bomag. When the unit was delivered, on the initial startup the unit overheated, right off the trailer. Budget Review – 11/24/14 Page 13 Alderman Soucy That’s my question. Is this unique and we just got a bad one or are they typically just a bad product? Chairman Deane Some landfills use them. What we kept finding was to kind of calm the waters they kept doing things for us for little or nothing or a minimal charge. After we put in our fifth turbo charger and they extended the warranty on it, at that point in time, it was abundantly clear that there were significant issues that we were having that were now going to be on our dime. They got a price to replace the motor. It was $50,000 just to buy the motor, never mind putting it in. Unfortunately, it just comes to a point in time where you just have to cut your losses and move on. I’m just happy that the director was able to get $45,000 for this gem. Somebody is going to end up with it. I don’t know how anybody else has made out with the purchase of one of these, but back when we went to buy this, I didn’t vote for the bond for the landfill expansion because of this. I was the only one. I didn’t buy it. I thought we should have stayed with the CAT. Most of our equipment is CAT in the city. The parts are made in this country. There are people that service it locally. We’ve had good luck with CAT equipment. Alderman Siegel I just wanted to note for the record that Director Fauteux did a tremendous job in beating down the price of this and also getting more for the Bomag. That’s a big plus. It kind of really eases the pain a little bit. In aggregate what was it? $160,000 or so between the trade-in value and the cost. Chairman Deane We have another aggregate though. We’re still going to be paying for this Bomag even when it’s trucked out of here. Alderman Siegel Understood, but it could have been worse. Chairman Deane It could be sitting down there with a blown motor. Alderman Schoneman Does this have a warranty? I presume it does, and what is the warranty? Chairman Deane When they talked about it at Public Works, they talked about buying an extended warranty with it. Mayor Lozeau And the service contract. Budget Review – 11/24/14 Page 14 Chairman Deane The director wasn’t happy with the price on the service contract. She’s going to put that out to bid, right? Mayor Lozeau Yes. I’m not seeing the warranty. Chairman Deane When this comes to finance, we’ll have all of that. I’ll make sure you get that. I’m sure the director will supply that for us. Mayor Lozeau I know it’s got a better warranty than the Bomag, and the Bomag warranty just ran out. Alderman Schoneman All the maintenance and service is going to be done by a contracted firm? Chairman Deane I wouldn’t say all, but a majority, all the engine maintenance and hydraulic maintenance. It’s going to come in with a schedule and it is run on an hour meter. When that goes out, they are going to get that all figured out. A firm is just going to come in and do that. They will take it off line and service it. In the meantime, they will use the old CAT. They are going to run that old CAT until it collapses. We’ve put a little bit of money into that. The wheels are what wear the most on these. That’s the plan as I understand it. Alderman Schoneman Will our staff need any additional training to operate it or to take care of whatever service or maintenance the city is going to do? Chairman Deane I think they are pretty well versed in the basic maintenance of it. They periodically or daily clean the filters and wash the things down. There are a lot of daily things they have to do. When your get into the belly of it, I think that’s when we’ll have somebody come in and take care of it. MOTION CARRIED Budget Review – 11/24/14 Page 15 R-14-093 Endorsers: Mayor Donnalee Lozeau Alderman-at-Large David W. Deane RELATIVE TO THE TRANSFER OF $20,000 FROM DEPARTMENT 186 TRANSIT ACCOUNTING CLASSIFICATION 89 INTERFUND TRANSFERS OUT INTO DEPARTMENT 166 PARKING LOTS ACCOUNTING CLASSIFICATION 55 OTHER SERVICES MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE ON THE QUESTION Mayor Lozeau This legislation is before you for your consideration to cover an error that was made. As many as you will recall we bought pay stations for the downtown area and replaced parking meters. When that work was done, there are three components that are ongoing to these pay stations. One is the cost of processing the credit card fees because unlike what we do when you pay your motor vehicle or pay at the landfill and you pay a convenience fee, we can’t do that at pay stations. There’s a cost associated with processing that. There’s data fees which means the information that goes from the pay stations to the money in the sky kind of communication. Then there are the maintenance fees ongoing for pay stations. When the transit manager worked on this, he made some assumptions that he should not have made. One was that the credit fees would come out of the financial services division because they manage the company that has been processing the credit cards; that the data fees would come out of the telecommunications budget; and that the maintenance fees would come out of their budget. That one was correct. Although I am concerned. I hope we budgeted enough for that. The data fees coming out of Telecom this year, I don’t think that’s going to be a problem, but next year we’re going to call it out and place it in the proper budget. Having the credit card fees come out of financial services, I think is a problem. It’s a number that can go up to $20,000 a year and should have been budgeted for in the parking budget. Also while we were looking at this, I think another error that was made was assuming we’ll just use the company that we already use instead of looking to see if there’s another company out there that we may be able to get a better rate from. We’ve done a couple of things. Director Marchant, when she quickly discovered this problem, has gone out and looked at getting prices from other companies that do this credit card processing for pay stations. We have found a local New Hampshire company that we are hoping will be able to contract with to do these credit card fees. Their price is about half of what we’re paying now. In the meantime, we do have to pay the cost of these credit card fees. In order to do that, we had to find funds to pay for it. What I’m proposing tonight is $20,000 of the transit manager salary that was carried in the transit budget be moved into the parking budget to pay for those costs that we have to pay. Alderman Siegel There’s an amount over and above the statutory amount that goes to the Downtown Improvement Committee. It seems to me that this is relative to parking downtown. Why isn’t it being taken out of that? I understand you have that salaried money available, but it seems to me that’s a more directly relevant transfer. Mayor Lozeau I don’t disagree with the nexus that you’re forming, but the legislation and that money that you are referring to is really revenue. It has nothing to do with any associated expenses. That legislation and the ordinance says revenue above a certain number. That’s why we came in this way. Going forward, if Budget Review – 11/24/14 Page 16 people make different choices we’ll deal with that as it comes. I think the one thing we have to make sure is we budget properly in the parking budget to account for the cost associated with these units. Alderman Siegel Credit card processing fees are unfortunately near and not so dear to my heart. I understand how that can go. There are tremendous savings. This is something that you should be able to cut over fairly soon. As soon as you identify it, that’s something you can do within a few days even based on our experience in my own business. Mayor Lozeau We can. Alderman Siegel Is that the plan? Mayor Lozeau That is the plan if we can go forward with this company out of Londonderry. Mr. Griffin The local rep that’s been very responsible is from Pelham I believe. The company is trying to increase its market share in New Hampshire and has recently replaced the incumbent in Concord. Alderman Siegel May I ask which credit card company you were using? Mayor Lozeau We’re currently using Global. This other company is Heartland. Alderman Schoneman This is an additional $20,000 cost we weren’t anticipating. Mayor Lozeau No, we were anticipating the cost. The transit manager just assumed it would come out of somebody else’s budget. Alderman Schoneman I wasn’t around when we decided to change from the standard coin operated meters to these machines. Were these machines chosen because they saved money? Budget Review – 11/24/14 Page 17 Mayor Lozeau These machines were chosen for a lot of different reasons, some of which is less maintenance than multiple meters, more convenient, allowing people to be able to use credit cards. There was a consistent problem with people trying to find change. The cost of those pay stations came out of the first amount of money that the Downtown Improvement Committee could make recommendations on from that revenue source. They recommended to the Board of Aldermen that those funds come out of that first year’s revenue. There was just a multitude of reasons to use them. I think it’s a good decision, but we shouldn’t allow the money that we make from them to be cut into with credit card fees that we may not have to have be quite so expensive. MOTION CARRIED NEW BUSINESS – ORDINANCES – None GENERAL DISCUSSION PUBLIC COMMENT REMARKS BY THE ALDERMEN POSSIBLE NON-PUBLIC SESSION ADJOURNMENT MOTION BY ALDERWOMAN BROWN TO ADJOURN MOTION CARRIED The meeting was declared closed at 8:13 p.m. Alderman Ken Siegel Committee Clerk