Finance Committee

REPORT OF THE FINANCE COMMITTEE DECEMBER 1, 2010 A meeting of the Finance Committee was held on Wednesday, December 1, 2010 at 7:00 p.m. in the Aldermanic Chamber. Mayor Donnalee Lozeau presided. Members of the Committee present: Alderman-at-Large David W. Deane, Vice Chair Alderman-at-Large Ben Clemons Alderman-at-Large Barbara Pressly Alderman Arthur T. Craffey, Jr. Alderman Paul M. Chasse, Jr. Alderman Kathy Vitale Members not in Attendance: Also in Attendance: Robert Gabriel, Purchasing Manager From: Robert Gabriel, Purchasing Manager Re: Contract Award for Legislative Services (Value: $14,000) MOTION BY ALDERMAN CLEMONS TO ACCEPT, PLACE ON FILE AND AUTHORIZE THE RENEWING OF THE CONTRACT WITH DAVID ALUKONIS IN THE AMOUNT OF $14,000. FUNDS ARE AVAILABLE IN ACCOUNT #501-53 ON THE QUESTION Alderman Pressly Could you tell us how this has worked for you as far as staying in touch with what is going on, and if it has worked to have one sort of like a lobbyist working for you? Mayor Lozeau He registers as a lobbyist just to be consistent with the spirit of the law. Mayor Lozeau Oh he does so he wears the red badge and everything? Mayor Lozeau He does. But his purpose and the way that we have worked it with the delegation in the past and I am sure going forward because the system works pretty well, is that he provides that facilitation between what the delegation needs for communication and what myself and the division directors need for communication. It has worked out beautifully. You probably remember back in the day you would be walking down the hall as a Legislator and you would come upon a city official and you would wonder gee I wonder what they are here for. So we have really been able to overcome that. He does a little newsletter that he does just with the delegation to say here are the hearings this week that somebody is going to be at from the City so they know; they are not surprised in their committee room when someone is testifying and things like that. It has been a huge help for us with the staff. He goes through all of the legislation, sends a list, goes to all of our division directors; they weigh in on the things that they think we should weigh in on. We whittle the list down. I think last year we had less than 20 issues or so that we were paying attention to, close attention to Finance – 12/01/10 Page 2 where we go out of our way to be up there and be heard on. It has really been great. You can’t beat the price, and it is great for the delegation to have somebody at the State House every day. Alderman Pressly Seeing this on the agenda and thinking about you know we have had quite a turnover in personnel and I think many of the Representatives are brand new so they are on a learning curve and also not knowing what I as an Alderman should be doing if anything, and I was thinking seeing this on the agenda how it might be appropriate if we extend an invitation as the Board of Aldermen to the new delegation and try to have some time to meet together, get acquainted, and… Mayor Lozeau My understanding is the Board President is extending that invitation, and I have talked to it. Alderman Pressly So he is doing this? Mayor Lozeau Yes he is doing that for the board yes. Alderman Pressly Okay do you have any idea when this is going to be? Mayor Lozeau No I just know that it is something that he is going to do. Alderman Pressly Okay. Well I was going to offer to help with it so if the committee would like I will… Mayor Lozeau I don’t think the Finance Committee; with all due respect, I don’t think the Finance Committee is the one that should extend the invitation… Alderman Pressly No I know that… Mayor Lozeau I think it would be great if you worked with President McCarthy about… Alderman Pressly Yes that is what I meant. Mayor Lozeau I thought you were saying if the committee meaning… Finance – 12/01/10 Page 3 Alderman Pressly No no. I’m saying that I will work with him on this since I have served in all the chambers. I think it would really be helpful for us to get to know them and have them feel comfortable to come to us if they would like to or visit when we are doing our business. I am also very worried because of the budget cuts and things like that that are going on. I am sure you are too. Mayor Lozeau Yes I am. We pay close attention to that. But I did provide Alderman McCarthy with a list of all of their names and contact information… Alderman Pressly Oh good. Mayor Lozeau So I know that he is working on that. Alderman Pressly Okay. Mayor Lozeau I meet with them, with our division directors, in early January and in December the school is going to meet with them. That has always been something we do. And then just before crossover I go up and I meet with them at the State House. I have lunch with them. It has been a very good working relationship… Alderman Pressly Okay. So you say they do traditionally meet with the School Board. Mayor Lozeau Oh they do. Alderman Pressly Oh okay. Mayor Lozeau They meet with the School Board. They will meet with me and my staff… Alderman Pressly And have they met with this board before? Mayor Lozeau Not that I am aware of, not since I have been here, but… Finance – 12/01/10 Page 4 Alderman Pressly Oh. Okay. So it is appropriate that we do that. I will follow through with the President and if anyone has… Mayor Lozeau I don’t think anything prevents the board from doing it… Alderman Pressly No. Mayor Lozeau …the board acts as a board with regard to things like that. Alderman Pressly Just to find a date and a time that is reasonably convenient for both groups and…okay just so you all know I will plan to follow up with President McCarthy on that. Thank you. Mayor Lozeau You are welcome. Is there further discussion on this item? Alderman Chasse When we created this position a couple of years ago there was talk about he was going to give us some reports. Has he been doing that? Mayor Lozeau Yes. As a matter of fact you got your last one in your packet. Alderman Chasse That was the report. Mayor Lozeau Yes. Alderman Chasse I don’t remember if he told us how he did on the things that he lobbied for, if they were favorable of unfavorable… Mayor Lozeau We did pretty well on everything except for revenue sharing, which all the communities lost. This is our second year in a row that we lost that. Education funding, our dollars didn’t go down. We were successful in the Right to Know Requests that we made for this board to be able to meet with the school board, but then the Governor vetoed it. I think we have been pretty successful. I know the delegation has really appreciated knowing what our position is. Things go pretty quickly there, things would change on the floor and they had his number and could reach him right away. There were times that he called in to the CFO or the Superintendent to ask a Finance – 12/01/10 Page 5 question and got an answer and was able to get it back. That is a huge help as I am sure Alderman Pressly remembers. It has been very good. Alderman Chasse Okay. Alderman Pressly I just have a further question. Did he play a significant role in getting the legislation passed that we needed for the Pennichuck purchase? Mayor Lozeau Yes actually. But that was something that myself and Attorney Ardinger went up and testified on. But he was there, he coordinated the timing, he worked with our delegation so that they knew we were coming all of that. Alderman Pressly Good. Mayor Lozeau Absolutely. Alderman Pressly Okay. Thank you. Mayor Lozeau You are very welcome. Further discussion on this item? MOTION CARRIED From: Robert Gabriel, Purchasing Manager Re: Purchase of Refuse Collection Vehicles for Solid Waste (Value: $2,296,259) MOTION BY ALDERMAN CLEMONS TO ACCEPT, PLACE ON FILE AND, CONTINGENT UPON FINAL PASSAGE OF R-10-71 AND APPROVAL BY THE FULL BOARD OF ALDERMEN, AUTHORIZE THE PURCHASE OF CNG VEHICLES FROM MCNEILUS TRUCK & MANUFACTURING IN THE AMOUNT OF $2,296,259, OR IN THE ALTERNATIVE, AUTHORIZE THE PURCHASE OF DIESEL VEHICLES IN THE AMOUNT OF $1,840,724. SOURCE OF FUNDING FOR THE CNG VEHICLES IS ACCOUNT #901-5403 ($557,663), #901-5404 ($100,000), #791-3786 ($400,000) AND #599-68045 ($1,238,596). SOURCE OF FUNDING FOR THE ALTERNATIVE DIESEL VEHICLES IS ACCOUNT #901-5403 ($557,663), #901-5404 ($100,000), AND #599-68045 ($1,183,061). ON THE QUESTION Alderman Pressly Just some explanation; I really get nervous when I see these big price tags here. Finance – 12/01/10 Page 6 Mayor Lozeau I don’t blame you. I think we all do. We need new vehicles at solid waste. We have done a fleet assessment citywide; we have put a schedule together for the next ten years of vehicle purchases. We currently have 16 vehicles on the road on a regular basis for trash, recycling, soft yard waste, bulky pickup that sort of thing. Out of our packers, our youngest one is ten years old. They are well beyond their lifespan. Alderman Pressly When you say packer these are the ones at the landfill that… Mayor Lozeau These are all… Alderman Pressly I have spent a lot of time at the landfill. I was just there the other day. They are fascinating vehicles. Mayor Lozeau I have looked at them close up to see just how many band-aids we have put in the body because we eat through the bodies relatively quickly. We have the automated trucks, which are the ones with the arms that just pick up the toters. We have the semi-automatic that has the lift on the back and they can also pick up a few other items. Then we have the packers. The packers are really the workhorse. When you look at it you would think that is the typical trash truck’ big open back, a compressor inside, compactor inside, so you would recognize it. The majority of those are very old. Right now we have 5 automated, 3 semis, and the rest are packers and then we have 2 of what is called a rolloff, so like behind City Hall and some of the schools we have dumpsters that get picked up by a very old truck that actually is not a front loader as you see with waste management and others, this is something that they throw chains around the back of it and they pull it up to the back of the truck and dump it in. We really are in need of vehicles there. Out of all of the city vehicles solid waste is the one most in need. So this is the first batch of vehicles that we are buying and we are heading down the path of CNG, compressed natural gas instead of diesel. Alderman Pressly So you have a couple of things happening here; you are getting the new vehicles and you are getting the new types of fuel. There has to be some transition or you have to have some plan for the two systems to work together. Mayor Lozeau We do. It will be coming before this committee a contract with a company called AVSG, this is the one who came in last Board of Aldermen meeting and presented, that is going to be contracting with the City to build a gas station for these CNG vehicles, but we will still have our regular Streets gas system that stays in place because the City is not going to convert everything so both of those systems will be working. Alderman Pressly And will there be any competition for this new system? Is it going to be sort of just this one gas station that we have? Finance – 12/01/10 Page 7 Mayor Lozeau Competition meaning people to bid to build a gas station? Alderman Pressly That and also to provide the fuel, provide the natural gas? Mayor Lozeau The natural gas actually comes; we had to make sure it had the right pressure in the ground so it is already there. We did do an RFP for our provider and AVSG is the one that is being recommended as the one to build a gas station and provide the fuel that they will draw. Their price for CNG is lower than what we pay for diesel right now so that is also a plus. The RFP went out for the vehicles, and that is what is before you tonight. Alderman Pressly I think what concerns me is not the price for right now, but the price five years from now. Mayor Lozeau Of gas? Alderman Pressly Yes. Mayor Lozeau Diesel is going to continue to go up and as a matter of fact it is being phased out. There is a Diesel Reduction Emissions Act that the Federal Government has passed, and so vehicles are going to what is called the new diesel and to bio-diesel and things like that, but this old kind of diesel vehicle the goal is for them to not be on the road anymore. The price of that diesel gas is likely to continue to go up. We haven’t really seen it declines. Compressed natural gas on the other hand has been very steady in its price. Alderman Pressly At the $2.30? Mayor Lozeau Right. Actually some of the other stations are paying $2.45. We’re rather pleased with the deal that we have received. If we can get other companies to use the gas station we are negotiating right now for us to get some sharing of those profits from the other users. Alderman Pressly Thank you. Mayor Lozeau You are welcome. Finance – 12/01/10 Page 8 Alderman Chasse Looks like Christmas is coming early. They are buying 9 vehicles and they are trading in 12. Mayor Lozeau If we go with the CNG vehicles there is no trade allowed because the $400,000 that we are going to accept from the State of the Federal money for the Diesel Reduction Emissions Act funds requires us to take those vehicles out of service so they actually expect you to drill a hole in the engine so they are not usable. Nine vehicles will come out of service and of those remaining vehicles we are going to look at what our options are for trading them for a certain value that we don’t need to meet that requirement from the State. Alderman Chasse So that vehicle #128, which we have a trade in value of $69,000 that one is $30,000 alone. Mayor Lozeau Right. Alderman Chasse That is one of them they are going to drill a hole through the engine? Mayor Lozeau No. That one is not. Alderman Chasse Why is it so high? Mayor Lozeau Well that one just… Alderman Chasse A $30,000 trade-in? Mayor Lozeau It just has more value to it so we are not going to lose that with the CNG. Alderman Chasse What is that vehicle, do you know offhand? Mayor Lozeau It is a packer. With CNG we won’t trade it in, with diesel we would. Alderman Chasse We would. Okay. Finance – 12/01/10 Page 9 Alderman Craffey Is there any information about cost without the tax credits assuming that the tax credits are probably going to expire? Mayor Lozeau Actually they are not tax credits they are federal dollars under the Diesel Reduction Emissions Act. I think the analysis that you are thinking of is the one that we have looked at, which is we buy these 9 vehicles now, we get the gas station on line, the differential between the cost of buying a diesel vehicle and this vehicle runs between $30,000 and $50,000 per vehicle depending on the vehicle. The packers the differential is greater, it is $54,000. You have to think to yourself so what happens if that money is not available to pay that cost differential. The answer is we will by that time know whether the savings that we’re realizing and the benefit of the CNG vehicles is worth us paying that differential or it is not. If it is not there is no harm no fowl we will have those trucks and when they are done their lifespan we will get the diesel truck or not and our commitment to the gas station and keeping it will provide for us to be able to not continue should we not continue down this path. My understanding is that the Diesel Reduction Emissions Act money is a policy that is more than a stimulus dollar type of thing. It is a policy relating to the environment and things like when they required catalytic converters on vehicles back in the day, things like that. They are trying to get these diesel vehicles off the road. Alderman Craffey Okay. Thirty eight weeks is the timeframe from when we put the bid in? Mayor Lozeau We have already received our bid from this company for the trucks recommending this company, McNeilus. The AVSG the company for the gas station what we are doing now is negotiating the contract like what might our share be of any profits if other companies come in, locking in our fuel price, and things like that. That will come in relatively soon. The amount of time to get the vehicles in, the soonest we could get one in is 6 months and the longest would be 9 months, and that is actually the same for diesel or CNG. Alderman Craffey Thank you. Mayor Lozeau You are welcome. Alderman Vitale Part of what I was going to say before has already been said, but basically this is a commitment by the City to work on our environmental impacts. Because we are going with a bio-diesel we are buying new vehicles with no trades. Mayor Lozeau The CNG not the bio-diesel. Finance – 12/01/10 Page 10 Alderman Vitale With the CNG right. Mayor Lozeau That is right. Alderman Vitale If we went with the diesel, and that is where our cost differential is for the most part is because we are not using any trades? Mayor Lozeau The cost differential is the cost of a CNG truck versus… Alderman Vitale Well I know there is some cost otherwise, but it is not like we can use a trade to bring that cost down further is what I should say. Mayor Lozeau Right so what we’re doing to bring those costs down is we have accepted the $400,000 from the Federal Government to allow us to pay that differential so for us it is no different than if we were buying the newer diesel trucks that we had planned. Alderman Vitale Okay. Mayor Lozeau I think this is a future investment that makes an awful lot of sense. Alderman Vitale I like the planning in advance that is going on so we’re not being reactive we are being proactive on changes that take place in the industry anyhow on trucks, and even though we might go down future, if there is already an act in place that is talking about diesel reduction my feeling is we go through the lifespan of the truck, we could go back to diesel but by that time there might be something else that they have kind of thrown into the mix that we will also be considering at that time. As it stands right now I do think it is something that we should move forward on and consider. I know there are quite a few places that have already been in the process of doing this. Mayor Lozeau Thank you. And we right now for all of our vehicles are looking at all of the alternatives. We have our first two hybrids out there and we have had great luck with them. I think we are moving in the right direction. Alderman Deane Thank you. Did we do a cost benefits analysis on this? Finance – 12/01/10 Page 11 Mayor Lozeau The cost benefit analysis, I think what you are looking for is that return on investment like how long will it turn around. We have… Alderman Deane Did we do one? Did the City do… Mayor Lozeau We have done some of that. It is not easy to do with an unknown item. It is not exactly apples to apples, but… Alderman Deane I know, but there are a lot of unknowns here. Mayor Lozeau For us it is actually… Alderman Deane We don’t know where the filling station is going to go we don’t know how much it is going to cost us. Mayor Lozeau We do. We know both of those things. The gas station is going to go behind Riverside Drive. Alderman Deane We weren’t told that the other night during the presentation. There were still three different options available to us. Mayor Lozeau No. What you were told the other night was there were three options that we looked at, and the one that has been recommended is the one behind Riverside. I am sorry if that wasn’t clear I thought it was. Alderman Deane It wasn’t clear, and… Mayor Lozeau And we do know what it is going to cost. Alderman Deane How much is it going to cost? How much is the City’s portion of cost to construct this, maintain it, plow it and everything else? Mayor Lozeau Zero, there is no cost. Finance – 12/01/10 Page 12 Alderman Deane Zero so we are not going to do any paving, we’re not going to do any drainage work, we are not going to do any engineering, we’re doing none of that, we are just taking a piece of land off the tax rolls is that… Mayor Lozeau Well it is already off the tax rolls, it is our land. Alderman Deane It will be further off I mean we could go to unload it down the road if we cared to do so right? Once we put this structure there to house this filling station… Mayor Lozeau Don’t think of it as a typical gas station, it is a relatively small structure that is easily removable. Will we do some engineering work, we may. Depending on how we want the trucks to come in and out we may do some work, but we are not writing a check or sharing a portion of the build of the station in the true sense. Alderman Deane But we are still utilizing whatever may come to be needed? Mayor Lozeau We may do some of that. Alderman Deane That has a cost associated with it. We’re not quite sure what that is? Mayor Lozeau I think it will be very minimal. Alderman Deane It would be nice to know what the minimal amount is then. Mayor Lozeau And when we come in with the contract for the gas station we will have more of those details. Alderman Deane Well this is received on the 25th of August. Today is what the 1st of December? Mayor Lozeau Alderman Deane we have been making sure that we go through a process so that you all have an opportunity to hear about it. We have gone to the Board of Public Works; we have brought it to the Full Board of Aldermen. I guess I could have rushed it along, but I didn’t think that anybody would like that. Finance – 12/01/10 Page 13 Alderman Deane Are we under the gun to approve this for any reason? Does this have to be approved before the end of the year? Mayor Lozeau Well we would like to get the trucks ordered. Alderman Deane What if we didn’t order them to until the first of the year would there be a problem with that? Mayor Lozeau Just delay. Alderman Chasse I saw February 28th someplace in the literature as a… Alderman Craffey As a drop dead date. Alderman Deane This letter from McNeilus dated 25 August it talks about, I don’t know whether Alderman Craffey was alluding to this, “Alternative Fuel Motor Credit (Credit) under Internal Revenue Code Section 30B (e), in order for McNeilus to be able to offer the City of Nashua this reduction in price, the City of Nashua must assign the qualified alternative fuel mode vehicle credit to McNeilus.” so the credit that we are going to get is going to this company? Mayor Lozeau Well there are two pieces. While we are not receiving a tax credit because we can’t, the company can receive the tax credit and so we are acknowledging that they have done something that earns that tax credit and they are passing that tax credit savings onto us in the price that they have given us for the vehicle, and then in addition… Alderman Deane “The City must also agree that in the event all or a portion of the credit is reduced or recaptured for any reason under Internal Revenue Code Section 30B (h)(8), purchaser will pay seller an amount equal to the reduction in the credit.” So if something happens to this credit and it is not equal to the amount of money that they have listed here then we have to come up with the balance to make up the difference? Mayor Lozeau We have that money to make up the difference already with the State money that has been provided to us. Finance – 12/01/10 Page 14 Alderman Deane The specs that we received with our packet, why is the font different? When you go through any page of it you will notice that, not necessarily the font, maybe it is. It looks like some of the language is dark and some of it is light like it was added in there, which tells me that the specs were somehow derived from something. Alderman Pressly It might be the printer. I have had my printer do that. Alderman Deane No the printer isn’t going to be skipping… Alderman Vitale There is probably one place on page 7 that you do see different… you can tell the print was done at different times. In my experience, that just means that part of the form was done at one time and the rest of it was filled in as you acquired the information, and it could be that you have a new printer head or you are on a different printer when the second person filled in their part of the information. Alderman Deane With all due respect Alderman Vitale, when these specs go out for people to review they shouldn’t be changed, they should all be… Mayor Lozeau They haven’t been changed. Alderman Deane Well… Mayor Lozeau I am just telling you they haven’t been changed. Alderman Deane Then why is the print lighter and darker in areas especially where the spec numbers are, and then on page 10 when you look under packer specifications it states “Packing panel must extend 22" into the body during the load ejection cycle to facilitate unloading of the load. The hopper must be able to clear 5-cubic yards of material per minute (our actual swept volume is 1.42 cubic yards per cycle).” What does that mean? Mayor Lozeau There are a lot of different things. The group that was working with Mr. Gabriel to look at what we wanted for vehicles wanted to make sure that we got a different arm. They were very interested in this new arm that is out there that has pivot points out that has changed its weight differential because those arms are lasting longer because we are replacing arms now every two years at $26,000 an arm. They took the specs that were typically out there for these vehicles and they added the new standards and specifications that they wanted, which were a step up from what we had. Finance – 12/01/10 Page 15 Alderman Deane So were all of the manufacturers able to get the same components that were added in to the specs… Mayor Lozeau This packet went out… Alderman Deane ... like when you look at the fuel system could they all get Parker Seal-Lok fittings? Mayor Lozeau Yes. This spec went out to everybody the same. Alderman Deane And the reasons…can we go over the reasons why the other bids were thrown out? Mayor Lozeau They weren’t thrown out they were just… Alderman Deane Well why they were disqualified or… what page does that start on? Mayor Lozeau I don’t think we necessarily tell you in here why they weren’t chosen, but I can tell you some of the big reasons that I am aware of. Alderman Deane Those page listings gave all of the… Alderman Craffey It didn’t give the reasons. Alderman Deane It didn’t give a reason. Vehicle #1 no bid, no bid… Alderman Clemons It is in the summary. It says “The only bid that met the City's specifications was provided by McNeilus. Mayor Lozeau Exactly, and I can tell you some of the big reasons. One was that McNeilus was willing to give us a five year warranty on hydraulics, which is the best offered in the industry. The other company was only going to give us one year and then they extended it to two years. We wanted a steel body that was abrasion resistant and McNeilus had it at 500 grade and the other company had it at 400. Finance – 12/01/10 Page 16 Alderman Deane Four hundred grade what steel? Mayor Lozeau Steel, which is a huge difference to us. The other thing that really was a selling point for the group looking at it was the McNeilus trucks had an automatic lube in their arms, which I am sure you can appreciate. That was one of the huge sellers too. Alderman Deane It self lubes? Mayor Lozeau Yes. Alderman Deane I believe it has a 50 gallon hydraulic oil capacity. That is a lot of hydraulic fluid. Who is going to service these vehicles? Mayor Lozeau Our staff. Mr. Pirkey was on the bid selection committee. The staff has been working on this for over a year. This was a job really well done. I am very proud of their work. Alderman Deane Mayor I am not taking anyone’s work ethic to task at all I am just before I vote on spending $2 million it is kind of nice to understand what you are voting on. Mayor Lozeau I understand. That is why we did the fleet assessment and laid out a ten year plan so everybody was clear. Alderman Deane That was months ago. Mayor Lozeau I know it was months ago, and it was … Alderman Deane Okay. Mayor Lozeau …in 2010 that we planned to actually buy these vehicles and we put it off in order to go through the process that we went through. Finance – 12/01/10 Page 17 Alderman Deane I still struggle with the CNG part of it. I understand the concept. I understand the volatility in the oil market. Oil was at $86 a barrel and change today. What sort of price fluctuations have they seen with that compressed natural gas? Mayor Lozeau It has been pretty steady. Alderman Deane I look at $2.30 for a gallon of that and natural gas has plummeted. The cost just seems rather high compared to what the market is bearing now and what they have found for reserves and everything else. Mayor Lozeau I can tell you that there is no CNG gas station from Concord right through to Massachusetts in a radius that is less than $2.45 a gallon right now. We will be the first one. We are paying $2.70 for diesel right now. Alderman Deane How do we control the price increases of that? Mayor Lozeau We’re working it in with our contract. We can’t control the increases but we can control how we bid it and that is part of what we are negotiating right now. Alderman Deane And the contract has to be approved by the Finance Committee? Mayor Lozeau Yes. I expect the contract to be in… Alderman Deane How much money have we paid that firm to date? Mayor Lozeau Paid what firm? AVSG? Alderman Deane Yeah. Mayor Lozeau We haven’t paid them anything. Finance – 12/01/10 Page 18 Alderman Deane Nothing. The other thing I was kind of disappointed with was that when this was brought to the Board of Public Works there was no funding source other than the $400,000 mentioned. It showed the cost of everything, but… Mayor Lozeau The Board of Public Works received the fleet assessment, which lays out where the money is coming from. Alderman Deane I know, but the motion at the meeting on the 8th of November it identified 791-3786. That account doesn’t exist. Mayor Lozeau Well the Board of Public Works Alderman Deane as you know had been referred the resolution here from the … Alderman Deane But they approved an expenditure out of an account that had yet to be set up and has yet to have any money in it so I guess there is no harm no foul because nothing has been purchased yet, but I am just saying when you look at the $2.296 million or the $1.845 million there was no other funding source even identified in the motion that was made. I was kind of surprised that nobody said anything. Mayor Lozeau They have been aware of this. Alderman Deane But normal motions have funding sources in them. That did not have any. It had the $350,000 that was amended to $400,000 from… Mayor Lozeau The resolution. Alderman Deane That is the resolution R-10-71, but as for the rest of it there was no funding, it says the funding is all found in 791-3786, which is only the $400,000. Mayor Lozeau Right, but the discussions about these vehicles coming out of CERF has been well known for over a year now. Alderman Deane That is irrelevant. Finance – 12/01/10 Page 19 Mayor Lozeau They had a resolution before them that is what they were making a recommendation on. Alderman Deane For $400,000, but they made a motion to approve spending $1.8 million or $2.2 million with only $400,000. Mayor Lozeau To purchase the vehicles that was their recommendation was to purchase the vehicles. Alderman Deane Ha? Mayor Lozeau It was to purchase the vehicles. The Board of Public Works… Alderman Deane To approve the purchase. It wasn’t a recommendation it was a motion to approve. Mayor Lozeau Public Works doesn’t vote to spend the money to buy the vehicles. This is the board that does that and this will go back before the full board after this committee. Alderman Deane But when you look at the very next motion the funding source is identified and it even gives the balance similar to what has been done here, which is very nice with the Finance Committee agenda that shows the dollar total and then the amount remaining after purchase. Mayor Lozeau The funding source in the other ones you are referring to are budgeted items that are line items. The funding for this is coming from CERF with this additional money from the State. Alderman Deane That makes no sense. Mayor Lozeau I am sorry you see it that way. It makes perfect sense. Alderman Deane So anything that they vote on if it is coming from CERF or SWERF or any of the other waste water WERF, there will be no account numbers or balances associated with the purchase? Finance – 12/01/10 Page 20 Mayor Lozeau I don’t think that is what I said, but…Alderman Deane obviously we’re not going to … Alderman Deane Well it is not budgeted for. Mayor Lozeau Well as you know we move the money through transfers into CERF. I mean I think you are splitting hairs. Alderman Deane I’m not I am just trying to understand how they could approve something with no funding source. That is not splitting hairs when you are talking about $2 million. Mayor Lozeau Well you can characterize it that way looking like they are being careless, but I would disagree, and as a voting member of that board I can tell you that this is something that we have talked about for more than a year, they understanding the funding source to be CERF. The money is there, it has been set aside, they know it is coming, they know it is going to be there. Alderman Deane Thank you Mayor. Mayor Lozeau You are welcome. Alderman Vitale Alderman Deane mentioned something about this being an unknown, and during our presentation that we had before the Board of Aldermen it was brought up about different communities that are currently on this type of vehicle that we’re talking about this evening and Smithtown I believe was one on Long Island, a number of locations on Long Island. Have you by any chance had a chance or somebody from the City had a chance to talk with those communities and ask? And it wasn’t really I don’t remember that as part of the discussion, but maybe that could be mentioned tonight so that other people know that this isn’t like a brand new thing that nobody else has done. Mayor Lozeau On occasion it is nice to say you are the first ones out there on something, but sometimes it is nice to be safe to say that you are not the first ones, but maybe the first in the State. But the team that has been working on CNG for over a year now has visited other communities, has met with them, has talked to them, has met with their mechanics, has gone to New York, has gone to Logan Airport. They are very excited they went to New York in one of the hybrid cars on one tank of gas. In addition, they have met with the State because the State is using CNG vehicles right now, and that is one of the other pluses to this is the State has a CNG station that AVSG talked about that night that they are upgrading, and I am hopeful that we can work with the State for them to come down and use CNG plows and fill up here at this station. We have not heard anything negative from any of the communities that use them. And frankly AVSG was highly recommended by the majority of those communities they are providing service. As he talked about that night in the instance where that bad ice Finance – 12/01/10 Page 21 storm was and they had a problem with the station, they were able to deploy their portable stations and still not use all of them. Alderman Vitale Do you know if any of those communities are on their second round of vehicles yet? Mayor Lozeau No I don’t believe they are yet. Alderman Vitale Okay. And the other thing that was brought up by Alderman Deane was the cost associated with the location that we have chosen for this station. It is a City owned property… Mayor Lozeau Yes. Alderman Vitale …and they would have a piece of that, we will probably direct it one way or the other. As part of the agreement with that is that considered like a lease agreement? Mayor Lozeau Yes. Alderman Vitale So it would in fact…the cost of that spot would be incorporated within their lease agreement? Mayor Lozeau Right…I mean I don’t see us charging them for that lease, but it certainly would remain City property. Alderman Vitale Okay. Mayor Lozeau In my perfect world… Alderman Vitale Say we, as was mentioned, if we wanted to get rid of that property at some time, that would be part of any type of agreement that we had, if there was a reason the City wanted to divest of that property it would be part of that and therefore… Mayor Lozeau It would be their responsibility to take down the station. Finance – 12/01/10 Page 22 Alderman Vitale Okay. Alderman Deane Who is going to insure this facility? Mayor Lozeau They are. Alderman Deane And the City doesn’t have to insure any of it? Mayor Lozeau Well I didn’t say the City didn’t have to insure any of it. I guess we have to finish figuring out where it lands or whatever, but they are insuring the gas station. I would imagine we would still keep insurance on our land. Alderman Deane We’re not going to have to insure any part of the hazardous… Mayor Lozeau No. Alderman Deane …piping and…so if there is ever a problem there the City is not on the hook… Mayor Lozeau That is correct. Alderman Deane So we will see that in the… Mayor Lozeau In the Contract . Alderman Deane …in the contract. Mayor Lozeau Yes. Finance – 12/01/10 Page 23 Alderman Deane Obviously that construction, plans of that facility have to go through the Planning Board right? Mayor Lozeau Yes. We have also made sure that it is allowed in that zone. Alderman Deane If it is not then what do we do? Mayor Lozeau It is allowed in the zone, we made sure of it. I wanted to make sure we did before we tried to put it there. Alderman Deane So it is allowed there? Mayor Lozeau Yes it is. Alderman Craffey I’m looking over the tax credits. I count 7 vehicles, 8 vehicles, yet we are purchasing 9. Are we getting… Mayor Lozeau The 9th vehicle was a late arrival when the State had additional funds available so we are just taking advantage of it. Alderman Craffey So what is the advantage? Which one does it fall under? Does it fall under the 25 yard XC re-loader or the side loader? Which one was it? Do you remember? Mayor Lozeau I don’t think that they have responded to us yet about the extra vehicle. We just captured that money from the State and are able to use it so we will talk to McNeilus about that. Alderman Craffey We’ve already got the money from the State allocated to that 9th vehicle? Mayor Lozeau Yes exactly. That is why we amended it up to the $400,000 was to allow for that 9th vehicle. It still has to go to Governor and Council. It still has to go to the full Board of Aldermen. The Human Affairs Committee passed it Monday night. You will take it up on the 14th. Finance – 12/01/10 Page 24 Alderman Craffey Thank you. Mayor Lozeau You are welcome. Is there further discussion on this item? Alderman Clemons Just briefly I would just like to say that I think it is a good opportunity for the City to try out this technology where we are getting the difference from the State. I think it is an opportunity for us to see if this is going to benefit us in a way that isn’t going to cost us too much more money. It is a good example of what we can do with a public/private partnership. I am excited for it and I hope that the results are good. Hopefully as this project moves along I hope we see the benefits. Thank you. Mayor Lozeau Thank you. Is there further discussion? MOTION CARRIED From: Robert Gabriel, Purchasing Manager Re: Contract Award for Transit Advertising Services (Value: Income Generating) MOTION BY ALDERMAN CLEMONS TO ACCEPT, PLACE ON FILE AND AWARD THE REVENUE GENERATING CONTRACT TO ALTERNATE TRANSIT ADVERTISING ON THE QUESTION Alderman Chasse Who is going to say what can go on there for advertisement? Is there a committee that is put together so you don’t have anything obscene or… Mayor Lozeau It is actually part of the contract and agreement. It talks about good taste, things that we don’t allow, and that is the responsibility of the Transportation Department so Mark Sousa, the Manager of the department working with his staff ensures that nothing in appropriate. Alderman Chasse So it is not just one person it is the staff? Mayor Lozeau Right it is. Alderman Chasse Okay. Thank you. Mayor Lozeau You are welcome. Finance – 12/01/10 Page 25 Alderman Deane I have an advertising question. Does this cover the bus stops too like when they hang the signs in the bus stops with the little routes on them? Mayor Lozeau Yes. And in the transit center there are two new ones. Alderman Deane So they put one of those on Amherst Street. Mayor Lozeau The bus shelter. Alderman Deane Right. Now the bus doesn’t stop there anymore for some reason. Is that because the street is under construction? Mayor Lozeau That would be my guess. Alderman Deane I have a constituent very upset especially when I told him that bus stop was put there specifically for him. And when I see him walking up Sargents Avenue he is not smiling. I will have to stop in and let him… Mayor Lozeau Well the base paving was supposed to happen this … Alderman Deane I will stop and let him know as soon as Amherst Street is complete his bus will probably stop at the stop again. Thank you. Mayor Lozeau You are welcome. Is there further discussion on this item? Alderman Craffey Payment rates; $30,000 minimum… Mayor Lozeau Pardon me? I didn’t hear the first part of the question. Finance – 12/01/10 Page 26 Alderman Craffey Under 4 C, under the payment reporting and rates, I see $30,000 that is guaranteed money to us. Do we have any idea on the up side how much that would be? Mayor Lozeau We have been averaging between $50,000 and $60,000 a year. Alderman Craffey That is all I had. Thank you. MOTION CARRIED From: Robert Gabriel, Purchasing Manager Re: Contract Award for Rebuilding Secondary Clarifier Requested by Nashua Wastewater Treatment Facility (Value: $10,150) MOTION BY ALDERMAN CLEMONS TO ACCEPT, PLACE ON FILE AND, CONTINGENT UPON BOARD OF PUBLIC WORKS APPROVAL, AWARD THE CONTRACT TO WATERLINE SERVICES IN THE AMOUNT OF $10,150. FUNDS ARE AVAILABLE IN ACCOUNT #802-96080-8500-8900-72 ON THE QUESTION Mayor Lozeau The next two items on the agenda go together, which frequently happens with waste water as you know. This first one is to remove, crate, and reinstall the item and the second one is the actual rebuild of the arm. The other thing I thought you would like to know is that the warranty on the rebuild or a new one is the same amount of time, and then the lifespan on a rebuilt compared to a new one is the same amount of time, and it is at half the cost so that is not a bad thing. Alderman Deane And they are both funded out of WERF. Mayor Lozeau And your point is that when the Board of Public Works votes on this they will identify the funding source. Alderman Deane No. They might. How are we doing on that balance in WERF with their replacement schedules and things? Mayor Lozeau They have laid out their replacement schedule. They are doing very well with it. Things are happening as expected. In 2008 one of the three was repaired, now they are doing this one, and they expect to do the third one next year. They have a lifespan of about 20 years. Alderman Deane I’m just looking at these accounts are both the same in each one of these. Finance – 12/01/10 Page 27 Mayor Lozeau Right. Alderman Deane And there is a million dollar difference in the amount in the balance remaining, and we have only spent $10,000 on this one. Fifteen thousand on the first one and $10,150 on the second one, but the balance drops by a million. Alderman Clemons It does. Mayor Lozeau Mr. Gabriel did you want to say… Robert Gabriel Yeah I made a mistake because I tick down the balance once I decide the order of presentation to this committee. Mayor Lozeau So the balance should be less… Robert Gabriel So the balance of $7,295,850 would be reduced by the next one $15,155. Mayor Lozeau So you did by $1,115,000 instead of $15,000 okay. Alderman Deane Thank you for the explanation. Mayor Lozeau Further discussion on this item? MOTION CARRIED From: Robert Gabriel, Purchasing Manager Re: Purchase of Drive Unit for Clarifier Rebuild Requested by Nashua Wastewater Treatment Facility (Value: $15,155) MOTION BY ALDERMAN CLEMONS TO ACCEPT, PLACE ON FILE AND, CONTINGENT UPON BOARD OF PUBLIC WORKS APPROVAL, AWARD THE CONTRACT TO SIEMENS WATER TECHNOLOGIES IN THE AMOUNT OF $15,155. SOURCE OF FUNDING IS ACCOUNT #802-96080-8500-8900-72 MOTION CARRIED UNFINISHED BUSINESS – None Finance – 12/01/10 Page 28 NEW BUSINESS – None DISCUSSION Alderman Deane I don’t know when it was, but we approved that work on East Hollis Street down by C Street. Mayor Lozeau The CSO drop over. Alderman Deane Not the drop over, the work that is being done on the road there. Mayor Lozeau Oh okay, the crosswalk. Alderman Deane When are those people going to be completed with that project do you know off hand? Mayor Lozeau I don’t know offhand. I would be happy to look into it and get an answer for you. Alderman Deane I went by there the other day, they have the roads all closed, traffic is all tied up, and seven guys standing around doing nothing. Not City employees these are contractors that we hired and it is just people down there are just frustrated. Mayor Lozeau And it is not related to the work being done on the CSO where they have… Alderman Deane Oh no it is right out on East Hollis Street at the corner of C… Mayor Lozeau So this is right in front of the store? Alderman Deane Right in front of the little variety store on the corner of C Street. Mayor Lozeau I will ask Patty to look into it and let you know. Finance – 12/01/10 Page 29 Alderman Deane While you are talking to Patty, if you could mention it to her, the cobblestones are popping up on the roundabout in the South end. There are like five of them now. Somebody has been kind enough to get out and put them up on the edge of the grass so that people didn’t run them over, but there are like 4 or 5 that need to be set back in. Mayor Lozeau Sure. Alderman Vitale Since East Hollis Street was brought up, it was mentioned to me the other day and I know it doesn’t have anything to do with here, but since we are discussing it, and if you are going to mention one thing you might as well mention them all, somebody mentioned either it was at the stroll or just before the stroll that they have seen a number of people going down East Hollis Street and they must have bumped it out a little bit in a spot so it has narrowed it, and because they travel it every day they have seen a number of people not know it is bumped out and they are running right into it with their cars on the bump out. I don’t know if it is not finished and it is not marked correctly, but literally people are going down the road and they are hitting it. Alderman Deane Alderman Vitale it is a thing of relative beauty. I don’t know who designed it. It is a ramp that jets out at about a 25 degree angle and I can’t wait to see one of our city plow trucks go down there and catch that curbing because it is all coming out. Mayor Lozeau And where is this located on East Hollis? Alderman Deane Right next to the variety store across from C Street. Mayor Lozeau So part of the design must be for the bump out for the new crosswalk, which one of the things that you have to do if you are going to do that. Alderman Vitale Right, but they are hitting it currently. They watch people hit it. Alderman Deane It is not an inch up off the asphalt either. Alderman Chasse No. Mayor Lozeau It must be like the one near the Senior Center? Finance – 12/01/10 Page 30 Alderman Vitale Yes. I am assuming so. Mayor Lozeau That kind of bump out. Alderman Vitale I myself haven’t driven down there yet, but I did have somebody pull me aside and ask what the intent is because they have seen it happen at night a number of times. Alderman Deane Tell them not to have any fear the first snow storm it will be gone, it will be in Hudson somewhere. Alderman Chasse On the same topic, that is not in Ward 6. It is in Ward 7 so please call Alderman Flynn. Alderman Vitale And actually that was their first thing they wanted to know who the Alderman was. Alderman Chasse It is not just where the store is either it is also where the dollar store, the new one that went in, up in that area they also jetted that out. I am going to agree with Alderman Deane, the minute the plow goes by it is going to… Mayor Lozeau Actually they didn’t jet out the ones where Family Dollar is. What they did that was different is they brought the sidewalk in to allow for some parking there. So the existing one isn’t much further out that the others. It is just you are not use to all of a sudden it is narrow because it used to all be out. Alderman Chasse It is a hazard. Whatever they put in there even by the store, it is a hazard and it is going to create havoc especially in the winter time because you won’t be able to see that little jet out because a plow will go probably right over it or something. I think they need to redesign that before we have a catastrophe. Mayor Lozeau Well you know I will make sure that the engineer sees it… Alderman Chasse Take a ride. Mayor Lozeau I have ridden by the Family Dollar store. I don’t think that one…I can’t compare it to the one down there the other one, and I will take a look but… Finance – 12/01/10 Page 31 Alderman Deane I was out there on Black Friday okay in front of the Dollar Store with my lawn chair and that thing is dangerous. I agree with Alderman Chasse. Alderman Clemons On a much lighter note I want to wish my grandmother a Happy Birthday today and also wish folks a Happy Hanukkah. Mayor Lozeau In addition to calling their Ward Alderman anybody is welcome to call the Mayor’s Office. Today was our launch of our Citizen Service Request Portal on the website. So if you could try that out. WARRANT MOTION BY ALDERMAN CLEMONS TO APPROVE WARRANT #10 IN THE TOTAL AMOUNT OF $11,557,280.00 OF WHICH $2,331,612.38 ARE ACCOUNTS PAYABLE, $5,568,064.60 ARE PAYROLL AMOUNTS, $13,063.00 ARE PREPAY AMOUNTS AND $3,644,540.02 ARE WIRE TRANSFERS MOTION CARRIED ADJOURNMENT MOTION BY ALDERMAN CHASSE TO ADJOURN MOTION CARRIED The Finance Committee meeting was adjourned at 8:00 p.m. Alderman-at-Large Ben Clemons Committee Clerk