Finance Committee

REPORT OF THE FINANCE COMMITTEE NOVEMBER 19, 2014 A meeting of the Finance Committee was held on Wednesday, November 19, 2014, at 7:05pm in the Aldermanic Chamber. Mayor Donnalee Lozeau, Chair, presided. Members of the Committee present: Alderman-at-Large Daniel T. Moriarty, Vice Chair Alderman-at-Large David W. Deane Alderman Ken Siegel Alderman-at-Large Jim Donchess Alderwoman Pamela T. Brown Members not in Attendance: Alderman Paul M. Chasse, Jr. PUBLIC COMMENT - None COMMUNICATIONS From: Mayor Donnalee Lozeau Re: Emergency Change Order #3 to Millyard Fire Pump Replacement MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE MOTION CARRIED MOTION BY ALDERMAN SIEGEL THAT THE RULES BE SO FAR SUSPENDED AS TO ALLOW FOR THE INTRODUCTION OF A COMMUNICATION RECEIVED AFTER THE AGENDA WAS PREPARED MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Wastewater – Scum System Redesign MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE ON THE QUESTION Alderman Deane Shouldn’t we approve the vendor? Mayor Lozeau The vendor already did the work so the point was to just inform people because they are going to see it on the next Record of Expenditures. Alderman Deane This was part of the flood problem in April and that whole system was destroyed and it was obsolete; we couldn’t get parts for it. We will have the design in hand and then the system can be installed. Alderman Moriarty Are you talking the un-repairable power supply? Finance – 11/19/14 Page 2 Mayor Lozeau No, that’s a different item. We are talking about a letter on your desks tonight from Mr. Griffin relative to the flood and work that was done as a result of that flood at wastewater some months ago. It’s titled Scum System Redesign. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Advanced Electronics Bomb Training Course (Value: $49,102) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO TACTICAL ELECTRONICS IN THE AMOUNT OF $49,102. FUNDS ARE AVAILABLE IN DEPARTMENT 150, POLICE, POLICE GRANT FUNDS; 55, OTHER SERVICES ON THE QUESTION Alderman Moriarty It asks to award a contract but there’s no contract. This is a minor complaint because the rest of the items tonight don’t say contract, they say recommend the purchase. This should say award the purchase in the amount of $49,102 because it’s not a contract. Mayor Lozeau Purchase orders are consider contracts under the city system so it’s really a phraseology type of situation. Just keep that in mind too but I understand that you would like to see this contract. Alderman Moriarty If there is a contract, it’s always good to see the contract. Mayor Lozeau I understand. It’s a service that I believe the police department has purchased through a federal grant for themselves and the New Hampshire State Police. I think the contract actually happens through the federal process but point taken. Alderman Moriarty Oh, so there is a contract? Mayor Lozeau I believe there is a contract where they have purchased services but through a purchase order, not a contract; in the terms that you and I would recognize as a contract. Alderman Moriarty Okay. MOTION CARRIED Finance – 11/19/14 Page 3 From: John L. Griffin, Chief Financial Officer Re: Citywide Communications – Purchase of UPS (Value: $12,712) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE THE PURCHASE FROM EATON CORPORATION IN THE AMOUNT OF $12,712. SOURCE OF FUNDING IS DEPARTMENT 157, CITYWIDE COMMUNICATIONS; CITYWIDE COMMUNICATIONS CAPITAL PROJECTS MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Purchase of Two (2) 2015 Ford Interceptor Utility All Wheel Drive Vehicles Requested by Nashua Fire Rescue (Value: $56,521) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE THE PURCHASE FROM MHQ MUNICIPAL VEHICLES IN THE AMOUNT OF $56,521. FUNDS ARE AVAILABLE IN THE CERF TRUST FUND – FIRE DEPARTMENT MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Purchase of 2015 Ford F-350 Truck Requested by Edgewood Cemetery (Value: $44,043) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE THE PURCHASE FROM MHQ MUNICIPAL VEHICLES IN THE AMOUNT OF $44,043. SOURCE OF FUNDING IS THE CERF TRUST FUND – EDGEWOOD CEMETERY ON THE QUESTION Alderman Moriarty This is quite the truck and it comes with a snow plow. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Request for Legal Services (Value not to Exceed: $45,000 Plus Expenses) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND RETAIN THE SERVICES OF DEVINE, MILLIMET & BRANCH, PA, IN AN AMOUNT NOT-TO-EXCEED $45,000 PLUS EXPENSES. FUNDS ARE AVAILABLE IN DEPARTMENT 128, RISK MANAGEMENT; PROPERTY AND CASUALTY FUND; 59, INSURANCES AND CLAIMS ON THE QUESTION Alderman Donchess This relates to the Scott Halvers vs. City of Nashua. If there is a proposed settlement, what happens? Does that come back to the Finance Committee? Attorney Bennett It would depend in part on what the amount was but we do have an ordinance that requires approval by the Finance Committee for settlements which include anything in excess of his regular pay. Under those circumstances, it would come back before this committee. Finance – 11/19/14 Page 4 Alderman Donchess So you are saying that the $10,000 rule does not apply here? Attorney Bennett I don’t believe it does. Any type of settlement where the former employee receives more than their regular wages, it has to come for approval before the Finance Committee. Alderman Donchess When you say regular wages do you mean his annual wage? Attorney Bennett I’m not sure it is that specific in the ordinance, I’d have to take a look at it. If it’s anything in excess of what they would have normally received for their employment during the period of time for the settlement, it would have to come back here. Whether that’s regular pay or…I don’t believe the Deputy Chief position gets overtime. Alderman Donchess But that could be a lot of money in this respect. Let’s say that he’s been gone for 6 months or so and let’s say the case goes on and you settle 1 ½ years from now. We’d be talking about his pay during the 2 year period of time; it would be $200,000. It seems to me that under the parameters that you have set out that the settlement could be quite large and would not require Finance Committee approval. Attorney Bennett No, I’m sorry if I didn’t state it clearly enough. If he’s going to receive…again, he would not have been working during that period of time so I think any money he received would be above and beyond earned wages and I would think at that point it would come back before this committee. Mayor Lozeau It’s generally about $15,000, isn’t it, Attorney Bennett? The risk department in conjunction often times with your office, has a certain dollar amount that they are allowed by ordinance to settle at and beyond that I think is what you are talking about. Attorney Bennett I believe that the ordinance pertains to any general settlements that we may have for any liability and I think when it comes to…we have a special ordinance that relates to settlements with employees or former employees and those would have to come back before the committee. In the case that Alderman Donchess Is talking about, if those were the facts; I think that any compensation for the period of time after he retired would have to come back before this committee for approval. Alderman Donchess Because he was suspended with pay, he’s been paid for all of the time that he’s been with the city up until his departure so where he to receive damages via settlement, it would all be for a period of time for which he was not working for the city. If the deal is that it’s up to $15,000 then the Finance Committee does not have to approve it; I don’t have a problem with that but if we are talking about a substantial amount of money, and these cases can be dangerous, I would like to understand under what set of numbers we would not see the approval and what set of numbers that we would need to approve it. Finance – 11/19/14 Page 5 Mayor Lozeau Alderman Donchess, why don’t we do it like this. Either way we will bring it back to the Finance Committee. If it requires your approval, we will do that and if it doesn’t require your approval we will bring it back so you are informed. Alderman Donchess Can we get a clear opinion as to when approval is required? Mayor Lozeau Yes. Attorney Bennett I’d be glad to provide that ordinance. Alderman Donchess I am not suggesting that this be held up because I think the proposal is reasonable and I did communicate with Attorney Bennett about there being certain actions that have to be taken in the short term and so I think we should proceed with this but I would like to get the parameters of settlement approvals. Mayor Lozeau Understood, we will make sure that you get that. Alderman Deane Are we going to get a copy of the ordinance? Mayor Lozeau Yes, it will be part of the explanation. Alderman Deane I know when Jen Deshaises comes down and we deal with things that exceed $15,000; she is given leeway at $15,000 and under but this is different from other issues that she normally deals with. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Snow Plowing Services Contract for Parking Lots (Value Not To Exceed: $25,900) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO THE DOTY GROUP, INC. IN AN AMOUNT NOT-TO-EXCEED $25,900. SOURCE OF FUNDING IS DEPARTMENT 166, PARKING LOTS; GENERAL FUND OPERATING BUDGET; 54, PROPERTY SERVICES Alderman Moriarty How is it decided when to contract plowers vs. having DPW plow? Finance – 11/19/14 Page 6 Mayor Lozeau We always contract plowing for the lots that are listed in this document. Alderman Siegel I have no problem with the contract but I was a little concerned that we seem to have a little bit of trouble getting bids on this. Mayor Lozeau We didn’t have any bids. Alderman Siegel Why is that, I’m curious? Mayor Lozeau There are a couple of reasons. My understanding is that when the RFP went out, it had a not to exceed amount in it which caused some angst from people that may have been interested in bidding because if it snows, you can’t expect them not to pay them. Instead of having the typical budgeted amount without the not to exceed phrase, I think that caused some problems. When nobody bid and there wasn’t time to go back out to bid, the director reached out to the company that has done it the last couple of years and they agreed under the same terms to hold their bid and that’s why she recommended to move forward with that. Alderman Deane Which director? Mayor Lozeau Director Marchant. MOTION CARRIED MOTION BY ALDERMAN SIEGEL THAT THE RULES BE SO FAR SUSPENDED AS TO ALLOW FOR THE INTRODUCTION OF TWO COMMUNICATIONS RECEIVED AFTER THE AGENDA WAS PREPARED MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Wastewater – Boiler Installation (Value: $84,680) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO CD BOILER WORKS, INC. IN THE AMOUNT OF $84,680. FUNDS ARE AVAILABLE IN DEPARTMENT 169, WASTEWATER; WASTEWATER FUND; 81 CAPITAL OUTLAY/IMPROVEMENTS ON THE QUESTION Mayor Lozeau The committee may remember at the last Finance Committee meeting when we authorized the purchase of the boilers, I told you if we got the bid before I thought that it would be prudent to do an emergency sign-off to get it started we would but that if we had the time, we would bring it back to the Finance Committee. Although we Finance – 11/19/14 Page 7 didn’t get it in your packet on Friday, we did have an opportunity to get it to today to show you those costs associated with that. Alderman Deane I wish they were already there. There is going to be one more change order to this pertaining to the traps and the pressure testing coils. As soon as they get in there pull out the old stuff, put in the new wiring, they will be waiting for additional parts for the boilers and while they are doing that they have to go in and change the steam traps and pressure test all of the coils. Mayor Lozeau Alderman Deane, do you want to fill everyone in on the tank that’s necessary as well? Alderman Deane The next item; in between the two boilers is a condensate tank and I met with Clarity Water Systems who is going to provide a water treatment. Not just to these two boilers but to the other four boilers in the plant. The way the process works is you set a water treatment barrel up and the Director of Public Works is looking for when we met with the individual was a 15 October – 15 April maintenance schedule. The domestic water goes in its water treatment system and then it’s fed into this 250 condensate tank and then from that point, the water is pumped into the boilers and it goes through its process from water to steam. The existing tank that is there when the boilers were replaced back 1996 was never changed so the discussions we had with Tom from Clarity was…my first question was when we take the treated water and we put it into the existing condensate tank, what’s going to happen to all of the crud that’s been building up inside there. He said it’s probably going to break loose and find its way through the system. After talking with the Mayor, the Director of Public Works, and Tom; the decision was made that it’s kind of foolish to go through the entire systems and not replace that tank because the tank provides the mother load of water into these two boilers. If you are providing contaminated water that made the system fail to begin with, it’s kind of counterproductive to change the boilers out. It has to be replaced, there’s no way around it. One other thing you are going to see is that Clarity is going to bring in their water treatment, not only for these two boilers but for the other existing boilers. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Wastewater – Boiler Replacement Change Order #1 (Value: $13,388) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE CHANGE ORDER #1 FROM INDEPENDENT PIPE AND SUPPLY CORP. IN THE AMOUNT OF $13,388. FUNDS ARE AVAILABLE IN DEPARTMENT 169, WASTEWATER; WASTEWATER FUND; 81 CAPITAL OUTLAY/IMPROVEMENTS MOTION CARRIED From: Stephen M. Bennett, Corporation Counsel Re: Resolution R-14-092  Referred To Cmte – 11/12/14 MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE MOTION CARRIED UNFINISHED BUSINESS - None Finance – 11/19/14 Page 8 NEW BUSINESS – RESOLUTIONS R-14-092 Endorsers: Mayor Donnalee Lozeau Alderman-at-Large Lori Wilshire Alderwoman Pamela T. Brown AUTHORIZING THE CITY OF NASHUA TO ENTER INTO AN AGREEMENT WITH CVS MANCHESTER NH, LLC FOR FUTURE PARKING RIGHTS AT THE CITY OWNED PARKING LOT LOCATED BEHIND CVS PHARMACY MOTION BY ALDERMAN BROWN TO RECOMMEND FINAL PASSAGE ON THE QUESTION Attorney Bennett In essence, this is the final agreement to put in place the redevelopment of CVS site and the parking lot behind CVS which is leased to the hospital. During the course of our discussions before the Board, starting back in 2012, in August of 2013, during a presentation to this committee, we referenced the need for one additional agreement with CVS. As you aware, we have a 15-year contract with Southern New Hampshire Medical Center to lease the parking lot behind CVS. That agreement with the hospital provides them with an option to purchase that property during that 15-year period. The agreement allows them to lease 37 parking spaces in the parking lot or sub-lease them to CVS. The hospital and CVS have a sublease now whereby CVS has 37 spots. The purpose of this agreement, this agreement would come into effect only if Southern New Hampshire Medical Center did not utilize the option to purchase in the lease with the city. Their lease would terminate at 15 years or if it terminates sometime prior to that, this agreement guarantees CVS that they would continue to have 37 parking spots in that parking lot. Without such an agreement, and additional 10 years up to 25, they can’t get their development plans going; financially they need to have the guarantee of the 37 spots. Part of the site plan includes the 37 spots. If the agreement with Southern New Hampshire Hospital that city has is terminated, either prior to 15 years or at 15 years then this agreement would go into effect. Once the hospital uses the option to purchase and does purchase the parking lot; should that occur then this agreement is null and void. Alderman Siegel I’ve read this agreement carefully and the problem is that there is only one out for us. There are a number of problems. The only out is if the hospital purchases the property. In the event that the hospital decides not to purchase the property or doesn’t fulfill its obligations under the prior contract by building a multi-story garage or other structure that’s reasonably acceptable to the city, we get it back after the 15 year period when the agreement expires. That’s leaves a 10 year gap during which time we have a very valuable piece of property and we are encumbered by an agreement to provide these 37 spaces right in the middle of it. That means that our ability to use that space for anything else or anyone’s ability to use that space is similarly encumbered or there has to be a sidebar agreement that we design with whoever the purchaser may be to provide those spaces and therefore complicate the negotiation. In the event that this remains a parking lot forever, I don’t see a problem with the idea of leasing out the spaces. However, the way this agreement is worded, it makes life difficult for us at no benefit. Further, this reference is an agreement that we have visibility into, that being an agreement which is a sublease agreement between Southern New Hampshire and CVS. It binds us in this agreement to terms that we are not aware of at this point. I’m not saying to kill this legislation but I think that we may wish to table this such that some of the objections and additional material can be presented so we can have a more complete review. I’ve spoken to Mr. Cody at the hospital and they have a signed agreement with CVS right now so we have 15 years. I don’t have a copy of the agreement. Finance – 11/19/14 Page 9 Attorney Bennett I believe the copied agreement was sent along with this. Mayor Lozeau The copy of the agreement that was sent along is the one that we signed with the hospital so the agreement between… Attorney Bennett I do have that sublease. Mayor Lozeau I knew we had it. Attorney Bennett My intent was for you to get that one because you are right, we do have a copy of that agreement. Mayor Lozeau I don’t think it’s a problem to wait until the next Finance Committee meeting for it to be provided. Attorney Bennett I don’t think it’s a problem. I don’t think we have 15 years to wait; their development project is based on them knowing that they have an extended period of time. Alderman Siegel I was mostly joking about that. Attorney Bennett The wrong one went down to you and I apologize for that. I will provide a copy of it to the Board. Mayor Lozeau Why don’t we finish discussion tonight and see if there is any other information that the committee would like to see and then we can table it until the next Finance Committee meeting so that information can be provided. Alderman Donchess I am glad that we are going to see the agreement that we are being asked to enter. Also, I do have substantive issues. CVS has its location and it wants to build a drive-thru and without our city land, it does not have space to do that at the intersection of West Hollis Street and Main Street. When we consider that a part of this deal last time, a year ago, we knew that the intersection of West Hollis and Main was one of the most dangerous intersections in New Hampshire. A study done by WMUR and released very recently, this is the single most dangerous intersection in the State of New Hampshire and we, by leasing these spaces to CVS are going to exacerbate that problem. The price we are getting for the leased land is far less than market value. Finance – 11/19/14 Page 10 Mayor Lozeau I would respond by saying that they actually don’t need to have this city land in order to do the drive thru. The drive thru is not on the city’s property, it’s on the property which is owned by the property owner. The 37 spaces are not necessarily required in the downtown for a use such as this. The Zoning Board has approved the drive thru and the Planning Board will approve the changes that will impact that intersection and I believe that there are some positive changes that you will see in their site plan, which I believe has been filed. If we table this, there’s an opportunity for you to also be able to take a look at that. Alderman Donchess Probably what you are saying is technically correct but Attorney Bennett has already told us that they don’t wish to proceed with a drive thru unless they can secure these spaces for 25 years so for whatever reason, without extra parking, they can’t, as a practical matter, they can’t establish a drive thru. Mayor Lozeau I’m not sure that Attorney Bennett said that it was related to the drive thru; it’s the whole development. One of the things that we have been encouraging and supporting is the rebuild of CVS up to the sidewalk so that the building frontage is on Main Street and the parking is behind it. They would like the guarantee of those 37 spaces to run concurrently with the term of their lease before they make that investment. The drive thru is a piece of that investment. The bigger investment is the building itself. Alderman Donchess According to a fair reading, the establishment of a single story drug store with a faux second story is completely inconsistent with the Master Plan which calls for multi-story medical office buildings, street facing with a parking garage at that corner. By allowing this to occur, in my opinion, guarantee that for probably 40 years, the Master Plan can’t be implemented. The drug store has been there since the early 70’s and now they want to change it. I think if they are allowed to put a drive thru at this corner that it will last for 40 years. Mayor Lozeau I think you are right; Alderman Donchess, you and I can go back and forth on this for quite a while. They have already received permission to do the drive thru, regardless of these 37 spaces but also, the Downtown Master Plan does call for a building to be up closer to the sidewalk. There is still a spot available owned by the hospital that includes hospital plans that meet the Master Plan and should we have the garage as we are hoping for, I think we will get there. This is a safety net for the company for this investment should the hospital not move forward with the plans we are hoping. Alderman Donchess There’s a lot more that can be said about it but I don’t think now is the time. Mayor Lozeau I agree. Alderman Moriarty The minor thing that I am concerned with is the rent. In my opinion it should just track inflation. If we are going out 25 years and if it’s only going up from $48,000 to $50,000; It could be worth two or three times that amount. Finance – 11/19/14 Page 11 Mayor Lozeau I believe, subject to check, I think it mimics the same agreement that the city has with the hospital and there is an inflator in it. Alderman Moriarty Yes but it’s very slow. Attorney Bennett It’s actually in excess of what the city manages to get there. Based on how infrequently the city moves their parking space fees, it was felt that the formula that was used for this would at least match, if not exceed what the city generally does for parking. Alderman Moriarty That’s good news. Mayor Lozeau I want us to be able to come to the next Finance Committee meeting with all of the information that you want in order to make a decision so if you haven’t had the opportunity tonight, please e-mail Corporation Counsel before the next Finance Committee meeting to make sure any other information you would like is provided. MOTION BY ALDERWOMAN BROWN TO TABLE R-14-092 MOTION CARRIED NEW BUSINESS – ORDINANCES – None DISCUSSION Mayor Lozeau The next Finance Committee meeting is going to have the Motorola contract for $5.1 million coming in and Mr. Mansfield is planning to come in and be available for that discussion. Does the committee want to have a representative from Motorola at the meeting? Alderman Deane They are going with Motorola? Mayor Lozeau Yes, they are. Alderman Deane Was an RFP put out so others could competitively bid on all of this. Mayor Lozeau I believe I am going to let Mr. Mansfield comment on that. Finance – 11/19/14 Page 12 Alderman Deane How much is it going to cost to have this Motorola guy come in? Mayor Lozeau I don’t believe that it will cost us anything. I just wanted to give the opportunity if people wanted them here. Alderman Siegel I will vote for yes, I would like to see them here. Alderman Moriarty To have a radio engineer come in, I’d love to talk to that person. We did pass a resolution some time ago that said that if there were any changes to contract terms, even if they were non-monetary, that we would get an update. We haven’t gotten a single update yet. Mayor Lozeau You got an update four or five meetings ago on velocity which I updated the full committee on. I’m aware one that I actually have a sticky note on my computer because what we’re actually doing as I had told the committee is we have to change some internal process to be able to make that happen in a way that doesn’t have one staff member taking all the burden and trying to figure out if was a change from finance. IT has been working with us to put a system in place. Here’s the plan. You know how you get the notice that says the record of expenditures is being sent out and posted. You will get a notice from the City Clerk. It will come out to say updates to contracts have been provided. There will be a temporary folder with that link. It will show you any of the changes that have occurred between the last meeting and the next meeting. After 30 days those changes will be linked to the contract that is already posted. That is the system that we are putting in place and we’re within striking distance of having it. There has been nothing that I thought was so critical that I should tell you other than the change in velocity. I think there was a small one that happened that didn’t have any financial impact. I just can’t remember what it is. Alderman Deane Where is that going to be on the website? Mayor Lozeau Right on the contract page of the city clerk’s office. We’re trying to make it as simple as possible for everybody to have the access. Alderman Deane Since we have that program for Mayor Lozeau Filr browser? Alderman Deane Ya. Finance – 11/19/14 Page 13 Mayor Lozeau We can look and see if we can put that same temporary folder there as well. Alderman Deane And whether Sue could upload onto that so it’s there. Mayor Lozeau I’ll ask. We just want it as easy as possible. If we put a process in place that’s just automatic then none of us have to worry about it. Alderman Deane Most people have a tablet so if we pop this stuff on the Filr. App that we have then it’s right there an noted. Mayor Lozeau I will ask if it can be done. Alderman Donchess Mr. Bennett did get the language on the settlements of employee claims that need to be approved by the finance committee. What it says is the finance committee shall approve any payments made to a city employee or former employee if such payment includes any amount other than wages or salary for work actually performed. I think under that standard since the plaintiff in that case was on paid leave, he’s already been paid for all work actually performed. Therefore under this standard, any settlement has to come back to the finance committee. Mayor Lozeau I would agree. RECORD OF EXPENDITURES MOTION BY ALDERMAN SIEGEL THAT THE FINANCE COMMITTEE HAS COMPLIED WITH THE CITY CHARTER AND ORDINANCES PERTAINING TO THE RECORD OF EXPENDITURES FOR THE PERIOD OCTOBER 31, 2014 TO NOVEMBER 13, 2014 ON THE QUESTION Alderman Siegel Mr. Griffin was very kind to provide some answers to some questions I had. I have to applaud him publicly because normally I get him my questions early but I wasn’t feeling well so he had to do these under a little bit of pressure. On page 1 of the general fund, just as a general comment, there’s payments to a BJE Investment Properties. There are several of these large payments. I’m not disputing that these are valid payments, but we’re starting to see several of these which are assessment adjustments. These are starting to stick out, and I would like to get some information if possible, obviously not this evening, but the process. What is the applications that are going in and how is this stuff being gone about. It is interesting to me that we haven’t really reassessed property in a while. I understand people constantly want to get their taxes knocked down but it’s just seems like there is quite a number of these. Finance – 11/19/14 Page 14 Mayor Lozeau Last year was a revaluation year. That’s typically a year where you see a new batch of requests for abatements. Along with the same ones we pretty much get every year. They are perennial particularly because there are some companies out there that work with commercial entities that anything they can get abated on their taxes, they get a percentage of. We typically have some bigger properties that come through. The process is that the staff in Assessing and the Board of Assessors make decisions on whether they do or don’t’ grant the abatements. IT’s pretty much how it works. If people don’t receive the answer that they like, they have the opportunity to appeal it to the BTLA, the Board of Tax and Land Appeals. They often times will come back and say this is our ruling and then we meet that ruling. These windows around tax time, you see more than usual. Alderman Siegel I understand. Based on when these probably came in they were probably before the property tax bills actually went out or were received, looking at the timing. I may ask off line for some additional information on this. I’d like to dig a little bit into this if possible. The other item is on page 4. There’s another Mailings Unlimited. I know we did this last time when we bought stamps. Now we’ve got a couple of these things. They are both for mailings from the same company from the same department. One is for $9700 and one is $11,040. They are both for the same purpose from what I understand from my answer and that, of course, exceeds our threshold. Once again here we are with Mailings Unlimited. I was just wondering why this hasn’t gone before Finance unless I missed something. Mayor Lozeau I think postage costs what it costs. Mr. Griffin Mr. Fredette helped me with this particular request. Motor Vehicles mailings, 6800 monthly go out. 28,000 tax bills go out twice a year. That expenditure is us essentially paying Mailings Unlimited to mail on our behalf the bills. I did some quick math and we are getting a break doing it as bulk mailing. We took 28,000 tax bills times’ 46 cents it’s more than what’s on that Record of Expenditure. Alderman Siegel That was actually part of my thinking. I understand that stamps are stamps, but this is actually a service that is being provided. Therefore, it is a service that might be provided by others. It’s over $10,000. Therefore, it is something which I believe should be before the Finance Committee. I’m not saying anybody has done anything tremendously wrong. I’m sure they provided a great service, but we have our rules here. I don’t’ think they are necessarily all that bad especially because this is not to fund postage stamps. Mr. Griffin That’s actually what this expense is, is the postage related to the mailing. Alderman Siegel It’s not the service? Mr. Griffin It’s not the service. Finance – 11/19/14 Page 15 Alderman Siegel But it is part of payments we’re making to a single vendor. Alderman Deane Were both those cut from the same PO? Mayor Lozeau No. Alderman Deane The PO was split for the services? Mr. Griffin The way it reads in the Record of Expenditures is postage and delivery. On the vendor side it’s Mailings Unlimited-Tax, for the tax bills and Mailings Unlimited-MVR for the motor vehicle. They told me that years ago we did our own mailings and found that outsourcing was preferable. With regard to the NRO that allows us not to bid this service, 5-84(a)(2), the price is set more or less from the federal government. Alderman Siegel I understand that, but it still comes before Finance as a sole source purchase. Am I correct? I’m just saying I don’t want to set a precedent whereby we have certain things that we decide this may be over $10,000 but everybody understands what this is. It’s not like you’re going to have a hard time from the members of the committee understanding what postage is. It is what it is, right? Mayor Lozeau I think what you’re hearing from Mr. Griffin is his conversation with the City Treasurer, who has been doing this for a very long time, is we don’t go before the committee for postage because there’s an exemption as it relates to postage of bidding out postage because the price is what the price is. If we have a company that is going to charge us less than the 46 cents because they are doing the billing and as part of doing the billing, they’ve been mailing it at a reduced rate. That’s what it is. There are two separate things. One is the motor vehicle registrations and one is the tax bill. I think that was the conversation that you’re trying to say that you had with the City Treasurer. Mr. Griffin Right. In this particular instance, it’s one semi-annual tax bill and one monthly motor vehicle that was paid with the same Record of Expenditure. Alderman Moriarty When we pay our utility bills, does that come through Finance? Mayor Lozeau No. It’s on the Record of Expenditures as this is. Finance – 11/19/14 Page 16 Alderman Moriarty So there’s certainly examples when the city writes checks where the $10,000 doesn’t come through finance. Mayor Lozeau Yes. Alderman Moriarty Is this one of those things? Mayor Lozeau I think that’s the way the Treasurer treats it. It’s postage not set by us. Alderman Deane It’s not a utility bill. It’s a service that we got a price to have provided to us. Mr. Griffin It’s a direct pass through from what I understand. Using the barcoding technology and the bulk mailing, we get a better price than 46 cents. Alderman Deane We’re not arguing about the price. It’s a contracted service that they provide to the city to mail out motor vehicle and tax bills. Mr. Griffin Correct. Alderman Deane And it’s combined. The same company does both, right? Mr. Griffin Correct. Alderman Deane They do it by what, the piece? They charge us by piece? Mr. Griffin Correct. Mayor Lozeau They charge us for the postage per piece. Then they charge us for … Finance – 11/19/14 Page 17 Alderman Deane The envelopes, the handling, the printing and all that stuff. Mayor Lozeau Correct. Alderman Deane The motor vehicle and tax bills that were just in the Record of Expenditures, that was part of a combined contract services, right, and it exceeds $10,000 for the month. Mr. Griffin The two numbers added together on this Record of Expenditure exceeds $10,000. Mayor Lozeau I believe the Treasurer doesn’t see them as a single thing. They are separate for motor vehicles and separate for property taxes. Alderman Deane Although the checks go to the same company that are providing the same service and the same envelopes and the same postage and mailing them out. Mayor Lozeau I don’t agree. One is if they are mailing out motor vehicle registrations which they do every month. The other is the tax bill which they do twice a year. It’s two separate things. They just happened to land on the record of expenditures at the same time. Alderman Deane I don’t agree, but thank you anyway. Alderman Siegel In the record of expenditures there’s certain things which we can look at but I really feel we have no say over. The school department, for example. We see all of the expenses, but we really don’t get to say you should or shouldn’t do this. There’s a problem though. We can look at the city expenses and anything that comes before the Finance, $10,000 and over, and we even get to see these little expenses, but that process doesn’t exist at the school system level. The only time the expenses are reviewed at the school system level are if they are in excess of $10,000 for expenses or $5,000 for transfers. While we routinely go through this information here, there isn’t a parallel process for basically 55 percent of the city budget. Mayor Lozeau I know the President of the School Board looks at the Record of Expenditures and at the school expenses the same way the Board of Aldermen do. They may not have a committee that takes them up one at a time the way we do, but they certainly have access to the information. I know that they have viewed it and have asked similar questions on things on their budget as well. Finance – 11/19/14 Page 18 Alderman Siegel My discussion now in bringing this up is actually a direct outcrop of a conversation I had this afternoon with Board of Education member Kim Muise. We were talking about the record of expenditures. I was kind of lamenting the fact that I can take a look at certain things in the city but here’s this big, long list of expenses and I don’t understand it nor do I feel like I have the authority to ask about it. I said: how do you folks handle this. She said: they don’t. While Mr. Farrington, himself, may look at that and I don’t know. I can’t speak for him. As an organization, a committee in representing the city, they do not do that. Of course as we see here, there’s real value in having a group discussion on certain things. It’s not an individual effort. I’m concerned. I don’t know how to solve it. I have no authority over the school department, but I’m saying this publicly because I think this is something that needs to be brought to light. It’s half the city budget. Mayor Lozeau I understand your concern. My only point was they have the access to the information posted. It’s there. I talked to President Hallowell about different items on it over the years as I have with President Farrington. Alderman Siegel I agree with your, and I pointed out to Ms. Muise that it is available. I told her where to look and I requested that possibly they begin to exam it the way we do here. Hopefully everybody will keep a tight lid on what’s going on in the city on both ends. MOTION CARRIED PUBLIC COMMENT POSSIBLE NON-PUBLIC SESSION ADJOURNMENT MOTION BY ALDERMAN DONCHESS TO ADJOURN MOTION CARRIED The Finance Committee meeting was adjourned at 8:05 p.m. Alderman Ken Siegel Committee Clerk