MINUTES
FINANCE COMMITTEE
MEMBERS: Tony Theisen, Steven Deneys, Guy Zima, and
Patrick Buckley
OTHERS PRESENT: Dawn Foeller, Angie Dart, Julie Van Oss, Rob
Goplin, Steve Peggs, Allison Swanson, Ald. De Wane and others.
1. Roll Call.
Roll call was taken and all were present.
2. Approval
of the Agenda.
A
motion was made by Ald. Zima, seconded by Ald. Deneys, and carried to approve
the agenda.
3. Approval of the minutes of the Finance
Committee meeting of March 23, 2010.
A
motion was made by Ald. Deneys, seconded by Ald. Buckley, and carried to
approve the minutes.
4. Election of Officers.
A
motion was made by Ald. Zima to nominate Ald. Theisen as Chairman, seconded by
Ald. Deneys, and carried to approve.
A
motion was made by Ald. Deneys to nominate Ald. Zima as Vice Chairman. Ald. Zima deferred the nomination to
Deneys. A motion to approve the
nomination of Ald. Deneys was made by Ald. Zima, seconded by Ald. Thiesen and
carried.
5. Report of the Purchasing Agent:
a. Request approval to award SOS Technologies,
the third year of a three year contract awarded in 2008 for annual replacement
of 11 AED’s (Automatic External Defibrillator) used by the GBFD for the amount
of $23,774. Funded from the 101-General Fund. Replacement AED’s are
over ten years old.
This
was quoted out three years ago. This is
the last year of the three year contract, which will complete the replacement
of 33 AED’s over three years. The
Purchasing Department now obtains approval for all years of a multiyear
contract so that renewals do not require committee approval on a yearly basis.
b. Request approval to award emergency purchase
Ladder truck to Pierce Mfg. for an amount not to exceed $770,000. This is
replacing an 18 year old unit placed out-of-service due to a cracked frame rail
and it is not repairable.
c. Report of one emergency purchase Ladder truck
from Pierce Mfg. for an amount not to exceed $770,000. This purchase was
planned for in 2010 and is replacing a 28 year old unit placed out-of-service
and does not meet safety certification.
Ms.
Van Oss explained that the prices listed on the agenda were the best known
prices at the time the agenda was put together last Thursday. Since then, Div Chief Steve Peggs and his apparatus
specification team sat down late last week and went over Pierce’s
specifications and drawings thoroughly.
It was at this time they found the units we were negotiating on did not
include the Cascade storage system. The
Cascade storage system is a storage and refilling station mounted to our ladder
trucks for air cylinders used by firefighters.
It transports the air units and also has the ability to refill the
cylinders while on a scene eliminating the need to travel back to a station to
refill the cylinders.
The
addition of the Cascade storage system to each truck is an additional $22,360
cost that was not included in the original amount listed on the finance
agenda. For item 5(b), the emergency
ladder with the cracked frame rail, we could reduce the additional cost of
$22,360 but using various equipment which can be transfered to the new
rig. This would be a savings of $9,900
to reduce the cost of adding the Cascade system down to $12,460 for a total
cost of $782,460.
The
cost of the truck in item C would be $792,360 ($770,000 plus $22,360 for the
Cascade system). The cost of the ladder
trucks came in lower than our expectations of $800,000.
Ms.
Van Oss explained that the purchase of these two trucks through Pierce Mfg was
not part of a formal bid process due to the emergency situation of having two
critical vehicles out of commission.
They did, however, solicit emergency cost proposals from three qualified
and experienced vendors: Custom Fire
Apparatus, Pierce Mfg, and Rosenbauer America.
Additionally,
Purchasing and Fire explored the cost of repairing item 5(b), the unit with the
cracked frame, but found the cost estimates of $150,000 to $350,000 outweighed
the return on investment. This option
did not offer any guarantee that future maintenance would not be required.
Ald.
Zima expressed his concern over a no bidding procedure for a piece of equipment
this expensive. He believes the City
should spec it to as many vendors as it can so that we get what we need at the
lowest cost.
Ald.
Buckley asked about the length of time it would take to bid it.
Assistant
Chief Goplin explained that the normal delivery time for these trucks is 9-10
months in addition to a 30-90 day bid process.
Asst Chief Goplin went on to say that the 28 year old ladder truck (item
5 c) had been approved for replacement through the spring bond issue. This truck is unable to extend its ladder the
full length (only 75 out of 100 ft) and cannot be certified as safe to
operate. We have been using this reserve
unit to transport equipment and people but it is not a viable option as an
aerial device. The 18 year old truck (item
5 b) was going to replace this unit up until we found that its frame cracked
beyond repair. Therefore, by replacing both
of these trucks at this time, we will have a viable reserve ladder on hand to
meet the City’s needs.
As
stated above, we did receive three emergency cost proposals from three
different vendors. The City chose to work with Pierce Mfg due to their pricing
and ability to deliver our first truck in August and the second one in mid
September / early October. Pierce Mfg. met all specifications, had a chassis
available in stock and we were able negociate a multi unit discount valued at
$15,000 per truck if they are purchased together in addition to other added
features that we requested at no additional cost.
Ald.
Theisen asked what kind of situation the City would be in if we waited the 9
months, and Assistant Chief Goplin explained that given the alternatives, there
simply would be no guarantee that a ladder truck would be available to us. They looked at contracting with other
municipalities but could not get the assurance they needed that equipment would
be available in a timely manner.
Ald.
Deneys asked for clarification on the amount of trucks we do have. Asst Chief Goplin clarified that the City has
two ladder trucks in use at the moment that can be used as aerial devices, but
no viable reserve. These trucks go out
on over 50% of non-EMS response calls and on routine inspections. They are called out to the mill and hospitals
fairly regularly.
Ms.
Van Oss also added that by purchasing the second ladder now, we would be able
to have a 2009 engine saving us approximately $25,000 over a 2010 engine where
new emission standards have increased the initial cost considerably in addition
to the long term maintenance of the new engine.
If we were to follow the bid process, she is uncertain about being able
to get a 2009 engine.
Ald.
Zima asked about a secondhand market.
Ms. Van Oss explained that the used equipment out there has already used
up the best part of its shelf life and that there are always unforeseen issues
and costs to consider when investing in used equipment.
Ald.
Zima reiterated his disapproval of not bidding the purchase. He doesn’t believe we should speculate on what
vendors might bid in this economy. He
thinks we should use our reciprocity agreements with other municipalities in
the interim.
Ald.
Buckley clarified that entering into a bidding process would affect the
availability of the 2009 engine, thereby losing out on the $25,000 savings and
potentially another $15,000 multi unit discount. There is also the time frame of at least a 9
month delay before receiving the truck.
Ald.
Theisen added that it sounds like the City did its due diligence in exploring
its pricing options and bidding the project doesn’t seem likely to return a
significant decrease in price. The other
two vendors were given an opportunity to get our business but were unable to
meet specifications and provide a timeline.
A
motion was made by Ald. Deneys, seconded by Ald. Buckley, and carried to take
items B and C together since it is a multi unit purchase.
Ald.
Theisen clarified that the choice before this committee is to either approve
the purchase of the two units or bid it.
Ald.
Theisen asked for clarification on the financing. The truck in item C was bonded at $800,000 in
the Spring bond issue. Finance Director
Dawn Foeller said she was opting to go to the State Trust Fund to borrow the
money for the truck in item B. We can
use the Build America bonds with the State Trust Fund which would give us the
35% credit towards our interest payment.
Ald.
Zima stated he believes a purchase of this magnitude should be put to a
bid. He made a motion to put the purchase
of the two ladder trucks to bid. Motion
died without a second.
Ald.
De Wane made a statement clarifying that these ladder trucks maintain the jaws
of life and to rely on other municipalities is risky – every second counts in
emergency situations.
Ald.
Deneys made a motion to approve the purchase of the two ladder trucks from
Pierce Mfg, seconded by Ald. Buckley.
Under
discussion, Ald. Theisen explained that he shared the concern about bidding and
asks that the committee review Pierce’s prices for units sold to other
communities over the last year.
Ald.
Zima asked Asst Chief Goplin if the ladder trucks are the only means by which
the jaws of life can get to the scene of an accident. Asst Chief Goplin said they are not, but
currently the jaws of life are on the ladder truck. The Fire Department would need to change its
current operations for the jaws of life if the ladder truck was out of
commission. Ald. Zima clarified that if there was a need for the jaws of life,
the City currently has the capacity to take care of the jaws of life with a
functional ladder truck, and that is not really a factor at play in these
discussions. He believes it is
reasonable to bid the purchase.
Ald.
Buckley reiterated the huge difference between a 3 month and a possible 1 year
delay in delivery of a new truck and asked if the City is prepared for such a
substantial delay.
Ald.
Theisen stated the committee has looked at this from all angles, asked all
those in favor, and the motion carried.
Ald. Zima opposed.
6. Request by the Fire Chief to update the
committee on discussions we are having with Allouez regarding collaboration of
fire service.
Asst
Chief Goplin said the department has just recently entered into discussions
with Allouez but at this time has nothing to report. Asst Chief Goplin also stated that these
discussions are an extension of Ritter Forum.
Ald.
Zima made a motion to hold the item, seconded by Ald. Deneys, and carried to
hold over the update by the Fire Chief on discussions the City is having with
Allouez regarding collaboration of fire service.
The
Committee may convene in closed session pursuant to Sections 19.85(1)(e), Wis.
Stats., for purposes of deliberating or negotiating the sale of public
properties, investing of public funds or conducting other specified public
business as necessary for competitive or bargaining reasons. The
Committee may thereafter reconvene in open session pursuant to Section
19.85(2), Wis. Stats., to report the results of the closed session and consider
the balance of the agenda.
7. First Quarter Financial Statements
Ms.
Foeller said the City is favorable on some revenues, unfavorable on others, but
overall we should come in on budget.
Interest income continues to be stagnant, but we should see a gain on
our water utility payment. Overall,
revenues are doing well and we are controlling our expenses.
A
motion was made by Ald. Zima, seconded by Ald. Theisen, and carried to receive
and place on file.
A
motion to adjourn was made by Ald. Deneys, seconded by Ald. Zima, and carried.
2010 Contingency Fund
$51,300.08