Commissioner Meeting Minutes
COMMISSIONERS SPECIAL MEETING
Commission Chairman Percy L. Brown Jr., called the meeting of the Hancock County Commissioners to order at 8:00 a.m. on Friday, September 25, 2015 in the conference room of the county courthouse located in Ellsworth, Maine with Commissioners Joy and Blasi in attendance.
Adjustments to the agenda:
MOTION: to add an executive session under MRSA Title 1 405 6A to discuss a personnel matter. (Brown/Joy 2-0-1, motion passed, Blasi abstained)
MOTION: to go into executive session. (Brown/Joy 2-0-1, motion passed, Blasi abstained)
Commissioner Brown called the meeting back into regular session at 8:17 a.m. with nothing to report.
CA Conlogue stated that a representative from Maine PERS met parties earlier in the week. The county contribution toward Maine PERS for Treasurer Eldridge is 9% of $37,000 or $3,330; CA Conlogue requested to add this amount into the budget. Commissioner Joy stated that electing to opt into Maine PERS is a benefit that all full-time employees are offered and agreed that it should be included in the FY16 budget. The question of retroactivity is yet unresolved and would also affect other employees. The majority of commissioners agreed to include the 9% contribution toward Maine PERS in the FY16 budget. CA Conlogue recommended an official full-time start date for Treasurer Eldridge of Saturday, October 3, 2015. Commissioner Joy recommended a hire date of September 19, 2015, Commissioner Blasi agreed.
MOTION: the effective date would be September 19, 2015. (Joy/Blasi 3-0, motion passed)
Registry of Probate:
Surcharge is set by Statute and cannot be changed in house. Quotes from Lexis Nexis for electronic Statutes and related law were included in the commissioner’s packets. Additional books (non-electronic) are needed; Commissioner Joy stated that updated information is obtained quicker electronically. The Commissioners Office, Registry of Deeds and Registry of Probate share Statutes. After further discussion it was agreed that further research was needed to make an informed decision; Register Cousins was asked to return with more information later in the day.
A stenographer cost $250 for a half day, $400 for a full day and $250 extra for after hours work. It was recommended Financial Assistant/Clerk P. Linscott be trained in the recording process for the month of October. A stenographer is needed for all contested cases and all guardianships for minors and incapacitated persons; a stenographer also tapes sessions. A person who can transcribe from a tape can be utilized for most cases. Some cases have to be sent to a special company to transcribe tapes, normally the petitioner has to pay this expense. All commissioners agreed that account E-08-30-115 Stenographer should be reduced to zero. Commissioner Joy stated that he believes in “user fees” if you want your name changed, you are using the office and that cost should be included in the fee. Register Cousins stated that the Deputy Manager FY16 request was calculated at the FY15 wage scale and requested that it be changed to $16.36 per hour or $33,990 annually. The Deputy Register’s Salary was set at $32,246.
Commissioners Budget Workshop:
Airport - 40
Manager Madeira reviewed proposed airport revenues in the amount of $686,005. Commissioner Blasi questioned the decrease in R 40-510 Aeronautical Aircraft Parking; Manager Madeira stated that we no longer charge parking fees as it was more prudent to receive FAA money than continue this practice; we still issue tickets when aircraft are parked in no-parking areas.
Commissioner Blasi recommended utilizing Undesignated Funds for account R 40-800 rather than transferring Contingency Funds. Manager Madeira stated that technically it is coming from Undesignated Funds. Commissioner Blasi preferred to name the account Transfer of Undesignated Funds.
Account R 40-700 is Homeland Security is received for TSA Security.
Commissioner Brown preferred to designate a contingency account within the budget to offset the expenditures. Commissioner Blasi preferred to leave the Contingency alone and show the reduction out of the Undesignated Fund balance. Manager Madeira preferred to take the funds out of the Undesignated Fund Balance as well. After further discussion, Commissioner Brown stated “leave it like it is it will just end up coming from undesignated funds.” The projected revenue for FY16 is $643,385 without the Contingency Transfer. If expenses are changed, the transfer from contingency account will be changed.
Commissioner Blasi stated that account E40-60-400 Administrative Fee is too high and questioned why. Manager Madeira distributed a spreadsheet created and agreed upon by the CFO and the FAA that reflected the formula used to determine the Administrative Fee. Manager Madeira explained the details involved in determining the fee. The actual amount needed, according to what is allowed by the FAA approved formula, is $19,438. Manager Madeira stated that this is an expense for the airport that it really cannot afford this will drive us toward taxation; he suggested two alternatives in the amount of $15,552 or $12,091. The $15,552 alternative backs out Workers Comp, training, mileage, supplies etc. The $12,091 alternative removed all salaries and left a proration of MMA and MCCA Dues and Time Track costs. Commissioner Joy stated that he would not vary from the approved formula and offered a credit to bring the number to $16,000; Commissioner Blasi suggested $8,000.
MOTION: to cut the administrative fee in half to $8,000. (Blasi / failed for lack of 2nd)
Other suggested changes included:
E 40-05-100 FICA increase to $17,400
E 40-05-200 Retirement increase to $18,560
E 40-05-400 Workers Comp increase to $13,436
E 40-15-100 Utilities increased to $2,500
Commissioner Brown suggested speaking with Sheriff Kane about offering Security Services under account E-40-30-175; this may not be financially feasible for the airport due to the cost of deputies and their benefits. Security coverage is needed anytime the checkpoint is open, this could be as little as an hour and a half a day or as much as three hours a day. Commissioner Brown stated that extra outside details could be offered to part-time employees. Full-time patrol duties could/may interfere in offering outside detail duties to the airport. For the next three years the cost of Securitas would be $316,197 with three people at the airport every day, this would cost the airport $91,000.
E 40-07-600 Training was increased due to EMA Training and the Section 139. ARFF specific training also cost money.
After changes, proposed Airport Revenues were $642,485 an additional $44,339 was needed from Undesignated Funds/Contingency; proposed Expenditures were $686,824. Commissioner Joy was unsure of balancing the airport utilizing contingent funds. Commissioner Brown stated that it was a profit and loss system as the Airport is an entity unto itself. CA Conlogue stated there has to be a balanced budget therefore the money has to come from somewhere, it would need to come from the contingency account.
MOTION: to approve commissioners approved expenditures and revenues in the amount of $686,824. Brown/Joy (2, 1), Blasi abstained.
Bull Hill TIF discussion:
Erik Stumpfel Esq. of Rudman Winchell updated the commissioners regarding obtaining information given to Maine Revenue Services from Joan Fortin and First Wind/Sun Edison. Dave Fowler is still the project manager for the companies. The theory from Maine Revenue Services (MRS) is that the Bull Hill Project received in lieu of the .02¢ per hour production credit; at the time they were constructed, they qualified for and received a 30% Department of Energy (DOE) Grant to repay some of their property development costs. They do not get the production tax credit that other projects get, that is an election, they got 30% cash up front. MRS theory is that if the project were to be sold as a single project, that same tax credit or grant would not be available to the buyer; because it’s not available it reduces the value of the project to the new buyer. On its surface, that has some plausibility, you can apply the same principle to the production tax credit as that diminishes overtime, that’s a 15 year program had they received that instead. In reality, what has happened in this recent acquisition is that Sun Edison acquired the entire company, they did not acquire a standalone project and that 30% DOE grant represents that much less debt that First Wind was carrying to build these projects which increased the company value and presumably increased the company price when Sun Edison purchased it. The value did not disappear into 3rd party pockets in terms of the next buyer; Sun Edison had to pay for that value when they acquired the company otherwise First Wind would have been carrying more debt and would have been worth less and Sun Edison would have paid a lower price. This contradicts MRS theory in applying it as in up front adjustment to value; that for the most part is the way in which these projects are sold.
The other issue is that we have always been unsure of what MRS would do for the depreciation schedule for these projects in the Unorganized Territory’s (UT). That was always First Winds rational for cutting off their depreciation schedule after three or four years; they didn’t know if MRS would start applying an income basis appraisal technique or continue with the depreciated cost. This approach seems to hybridize that, MRS is still applying a depreciation schedule; they are depreciating the product after they are taking the adjustment, they take an economic obsolesce, after they take and adjustment for the DOE grant they then apply the depreciation schedule and they depreciate down to a residual value of 30% of the original cost after 20 years; they are doing it in a way which is more aggressive than they need to. This can be done two ways, you can say 3 ½ percent per year depreciation for 20 years, that gets you a 30% residual or you can say 5% per year depreciation and stop depreciating after year 14. That also further decreases the property tax value more rapidly than would be the case using the other method. Attorney Stumpfel stated that if it was just a straight line 3 ½ percent per year depreciation to 30% in 20 years we might not like it but we would not have grounds to quarrel with them because they’ve done that on other projects. The depreciation is done differently on this project than MRS had done on other large commercial projects; examples were given to include the Boro-max Biomass generating project in Eustis and the Dimensional Saw Mill, in those cases and in every other case of industrial property that he knows of MRS’s technique is to depreciate down to 30% residual value in 20 years, but before they do that they apply an inflation escalator to the original cost, example: if the mill costs $20 million dollars to build fifteen years ago, MRS will bring that up to current market value and then apply accrued depreciation against the adjusted figure. MRS is treating this category of properties, the wind farms, different in every respect than they treat other commercial industrial properties including power generating properties. It is entirely inconsistent to what they’ve done, to his knowledge, on other commercial industrial properties in the past when they have been responsible for assessing it.
Commissioner Blasi questioned the impetus behind the withholding of information. Attorney Stumpfel stated that it was submitted to MRS confidentially; Maine Revenue did look at it from a depreciated cost, income and market basis; they could not find any sales because these projects do not sell individually except very rarely. They correlated their method under the depreciated replacement cost with a work up that they did on an income basis, in doing that analysis they obtained proprietary information from First Wind which was submitted on a confidential basis; the Statute allows that. Maine Revenue has not been willing to release that work up to us until First Wind/Sun Edison has agreed that we can look at that information.
Commissioner Blasi stated that it appears to him that it affects our Credit Enhancement Agreement. Attorney Stumpfel stated that the valuation numbers are not locked in when you do theses TIF deals; there is language to that in the Credit Enhancement Agreement because even if everything remained pretty much the same we still don’t know what the mill rates and the exact valuation will be. There is language in the Credit Enhancement Agreement that says that is it a projection, it is not contractual as far as the actual numbers go. In this particular project we negotiated a large increase in the Community Benefit payments to the county which are unaffected by this change; in return First Wind received a 70% annual tax reimbursement, they are paying less tax but correspondingly they are receiving less in total dollars of a refund, It still saves them a substantial amount of money. In retrospect it confirms the commissioner’s decision to push those tax dollars over to the Community Benefit Agreement because that revenue stream is unaffected and those are fully flexible dollars. The one silver lining here is that if you had kept more of the taxes and had a smaller Community Benefit Agreement you would be taking more of a hit from this valuation method.
Commissioner Blasi stated that it sounded like the commissioner have no recourse. Attorney Stumpfel stated that only tax payers can pursue the direct appeals process, the commissioners, as a group, are not considered “taxpayers.” First Wind could request a tax appeal. A direct appeal has to be filed within 185 days after the taxes are committee. Commissioner Joy stated that as a shareholder he does not traditionally sell at a loss; who would be the person to hire or ask to value the sale of First Wind. There are companies who do this kind of work for wind energy projects but that level is outside of the State of Maine. The PUC always allows profit, he did not believe that First Wind had to sell at a loss of 30%. The sale price is relevant. Commissioner Joy questioned if the income approach or the comparative market analysis was utilized in this sale. Their initial approach was to use 30% of and correlated the numbers. Renewable Energy Credits meant that publicly owned utilities have to procure any new power source which has to be a certain percentage of green energy. Power Purchase agreements are usually priced above the market source and can be sold to 3rd party investors. Commissioner Blasi asked if Sun Edison has to willing change some component of our agreement; do we have to put pressure on MRS MRS determines tax value on any property in the UT; Sun Edison has challenged the assessment. Their minds may be changed if someone files an appeal or have the State Legislature specify how these projects are going to be valued. This may be the ultimate solution. The Bull Hill property just sold, the key is to get the value of the sale. Commissioner Joy stated that the cost may be included in a larger amount of money reported. But the allocation to a particular project is needed. Their long term Power Purchase Agreements are highly valuable. Commissioner Brown questioned who a person in the UT would appeal to; the answer was the State Board of Assessors. Commissioner Brown questioned if the commissioners would act as the municipality; the answer was no. Attorney Stumpfel stated that MRS’s approach in this case is inconsistent with any other project so far. The MRS and Fiscal Administrator does not like TIF’s, especially UT TIF’s. . An audio copy of the discussion is available, upon request, in the commissioner’s office.
07 – RCC
Proposed Revenues: $103,683
Proposed Expenditures: $666,083
Commissioner Brown questioned how the 3% increase came about in revenues, it is based on the amount per capita of participants. Swan’s Island has been backed out of the cost because the Sheriff’s Office is not providing a full-time deputy. This will decrease revenues by $1,300+; E9-1-1 would be called in any case. The sheriff’s contract should be reviewed prior to finalizing RCC revenue numbers. RCC contracts continually renew; it was suggested that they be reviewed. Transcript expenditures are reflected in account E 07-30-110 Legal Fees.
E07-01-110 the Deputy Manager was previously funded for the QA Clerk; this was switched due at the request of the former CFO. E 07-01-112 QA Clerk and E 07-01-120 Admin Asst. was added for clarification. Currently there is not Deputy Manager. The QA person works part-time. Commissioner Joy suggested budgeting the Deputy Manager at zero and add a QA Clerk and Administrative Assistant.
The Bull Hill Maintenance contract is included in account E 07-30-150 Service Contract this account also includes warrantee replacement parts. Commissioner Brown questioned why this is not paid for out of TIF’s in the UT budget. The cost of the Bull Hill Maintenance contract was questioned. Mt. Waldo is included in the Service Contract account and can be removed. The cost of Cadillac is a little over $9,000, the cost of the Bull Hill Maintenance Contract is approximately $8,000; Commissioner Brown recommended that this be removed from the RCC Department and added to the UT budget with offsetting revenues and expenditures. The structural analysis was taken out of the FY15 budget and should be removed from the FY16 budget. $36,544 is the correct total of Service contracts for FY15.
Commissioner Blasi asked why account E 07-70-100 Equipment was reduced by $40,000, this was changed by the CA to deplete the reserve account to reduce taxation. Director Wellman stated that the money was intended to be utilized for updating the console at slightly over $100,000. CA Conlogue proposed to postpone the purchase of the console due to current financial conditions. The RCC Equipment Capital currently has a balance of $83,433. Commissioner Blasi stated that this cost was already part of the RCC budget in the 70 accounts and questioned why it was paid for from a Capital account. The $83,433 is dedicated to the Mt. Waldo project. RCC Construction could be utilized for the purchase of the RCC console.
Commissioner Blasi suggested reducing account E 07-01-550 Comp Buy-out to $10,000. We will be incurring the bulk of this in the next few months.
Commissioner Blasi suggested reducing E 07-07-100 Travel/Mileage to $3,150. An employee will be attending Spillman Training in 2016. The legislature passed fire department protocol training similar to EMD training in 2016 which will also affect this budget line.
Account E 07-25-100 Liability was increased by 9%, it is something she has no control over.
Commissioner Brown wanted to know who was working in what positions and their annual wages.
E 01-01-130 should be $281,673, this was originally miscalculated in the original submission
FICA reduced by $332
Retirement increased by $337
WC increased by $2
11 - Jail
A new jail budget was not presented; Sheriff Kane stated that there is nothing in LD365 that says we have to stay with a fiscal year budget. The BAC would need to include the jail in their assessment and the county audit would also include the jail. Commissioner Blasi stated that for bookkeeping purposes, it would go through the BAC process; the Public Hearing will be held on Wednesday, September 30th. All commissioners agreed that the jail budget should be aligned with the calendar year January 1, 2016 through December 31, 2016. The BOC will require an audit for the fiscal year (July to June) each year. The ADP will not be accepted until August 1st. Administrator Richardson stated that the State will require a fiscal year audit. Commissioner Brown stated that we will try to avoid additional audit costs and they (the State) will not tell us what we are going to do. For our budget purposes it is much easier to have everything on a calendar year budget.
MOTION to have the jail accounting done as of January 1st to December 31st every year. (Blasi/Brown 3-0, motion passed)
Sheriff Kane requested guidance regarding health insurance. Commissioner Joy stated that the jail will now be under the county health insurance; he was not in favor of backing out the $350,000 cost from the jail budget; after rethinking this statement he stated that this will not matter because it will be merged into Department 20; $58,000 in jail revenues will also be reflected in Department 20 revenues. What is shown in CRAS was discussed; Commissioner Joy stated that the FY15-16 budget was approved and unfunded. Administrator Richardson stated that they would leave the $475,000 in the information that goes to the state. Budgeted number would have to show through June 30th. Commissioner Blasi questioned if Department 20 should have a segregated revenue and expenditure account for jail contributions and costs. Commissioners Brown and Joy preferred to leave it as it is through June 30th. Employee contribution revenue and expense will be shown in the jail through June 30, 2016, July 1 through December 31st will be shown in Department 20 expense account. Regarding backing out of the items that the county previously takes care of, example: accounting services, trash removal, snow removal, the jail will still have a $146,000 shortfall. If health insurance was removed the at $475,000 there would be a $270,000 surplus. Administrator Richardson questioned if just insurance should be removed or if other cost should be redistributed throughout the budget.
Commissioner Brown suggested meeting on September 29th to finish this budget. Other departments will be coordinated with due to jail cost shifting; the difference will be approximately $90,000, the jail budget will be reduced and the county budget will increase.
Right now the amount to be raised by taxation by the jail will be short $146,000. Commissioner Joy stated that you have to run your budget through FY16 showing it like we are doing it now. Commissioner Brown stated that it was too late in the process to shift jail costs over to the county. The CRAS system will remain the same, the jail will keep the cost of the insurance and in January 2017 the cost shift will take place, but….the calendar budget will begin in January 2016. CA Conlogue suggested keeping the jail budget on a fiscal year through June 30, 2015 as the Legislature will be making changes that may affect that budget.
MOTION: to adjust the agenda and move the sheriff’s department to 12:30. (Joy/Brown 3-0, motion passed)
Register Cousins stated that Lexis Nexis does not include any Probate Law, it does include the Maine Procedures that tells what forms are needed at $64 a month; inserts cost $214.10 annually. Maine Probate Statutes are not published online by any company. Commissioner Joy disagreed and stated that law is public; Register Cousins stated that the Maine Probate Statutes book is a needed item. Rules and Titles and Civil Procedures are not available on line. Most new information comes out in December. Account 08-30-105 can be reduced to $1,200.
12:08 p.m. Break for lunch 12:30 p.m.: Back in session
Commissioner Joy questioned revenue from cruiser sales as they are not included in the budget.
E 10-01-142 Detective can be reduced to $54,057
E 10-05-200 Detective Retirement can be reduced by $4,865 to
E 10-05-100 Detective FICA can be reduced to $4,136.
E 10-05-400 Detective Workers Comp can be reduced to $1,680
Commissioner Brown proposed to leave the detective position vacant for the remainder of FY15 and 1FY6 and utilize DA Detective McFarland where he is (in the DA’s Office) as a detective and leave the Director of Standards and Compliance in the budget. The remainder of the detective salary, $15,788 could be utilized toward the purchase of a vehicle. Sheriff Kane stated that he would not have the man power to investigate all cases under this scenario. Commissioner Joy stated that he didn’t mind if a SO Detective was hired and the Director of Standards and Compliance and DA Detective would not be funded; he also stated that a cruiser could/should be purchased from the Town Contract account. Commissioner Blasi stated that the sheriff has prepared a budget that meets the needs of the public as far as a detective position and he will support the Sheriff’s budget as presented. Commissioner Brown stated that he was not eliminating the DA Detective position, he was eliminating the funding; no one loses a job but services are greatly diminished.
Various capital accounts were discussed; it was suggested to utilize some capital accounts as revenue to offset expenses. $25,000 of DTF forfeitures offset DTF expenses. The full cost of vehicles are reflected in account E 10-70-300 Vehicles. If you factor out the 1.5% COLA and the cost of vehicles the Sheriff’s Office increase is less than 1%.
The plan is to transfer Deputy Campbell to MDEA and hire his replacement at Step A on the wage scale; this will cause a need to increase the training budget request.
Vehicles should be reduced to $100,000, there would be 3 Ford Interceptor SUV’s purchased. Brown’s Communication’s equip the vehicles.
After making the proposed changes $22,473 was the overall difference.
The sheriff’s department was approximately $60,000 over expended in FY14; this is no reflection on the current administration. Funding of half of the SO detective position may be an option. The cost of a copier was discussed. Six computers at a cost of $750 per computer was budgeted in account E 10-30-325 Computer Support. Commissioner Joy suggested adding $4,500 to SO Revenues to offset the cost of the computer purchase, commissioner Brown agreed. Commissioner Joy suggested adding a revenue account in the amount of $4,000 for vehicle offset.
$10,000 was added to account E 10-07-600 Training and $1,000 was added to account E 10-07-500 Dues.
E12-05-301 Swan’s Island Health Insurance should be increased to $27,330.24. Commissioner Joy explained how health insurance companies figure cost increases.
13 – Civil Process:
The Admin Assistant has not been working 10 hours a week in the RCC. Sheriff Kane stated that there is no overtime built into her position in the Civil Department; this person is needed 40 hours a week, most of the time. Civil Process is a statutory requirement; some departments have contracted employees and some have full-time regular employees. The challenge is to make the department revenue neutral. Legislation should be introduced to increase user fees.
Sheriff Kane suggested offering Animal Control services through his department as a revenue source; Airport Security was also a suggested revenue source as well as Clam Warden.
17 - Third Party Donations
Proposed Expenditures: $154,900
CA Conlogue proposed a reduction of $10,925 from FY15, there was no consistency to the reductions. The biggest reduction was for the University of Maine Cooperative Extension in the amount of $8,200. Commissioner Blasi stated that the BAC did not automatically put funds back into Department 17 last year. Commissioner Blasi stated that he tried to get consideration for other agencies but could not get a second. Commissioner Brown preferred to have $500 for EPIC Maine taken from Community Benefit funds; he was not filling to fund the One Hancock request of $100,000 stating that if it were opened up to everyone, people would be lined up for money. Commissioner Blasi thought it was unfair.
Commissioner Blasi questioned where Community Benefit funds were showing in the budget; CA Conlogue stated that the revenue would come in, in the Treasurer’s Office; he suggested moving it to Department 20.
60 - Unorganized Territory:
Proposed Revenues: $557,574
Proposed Expenditures: $557,574
Supervisor Billings stated that Dave Fowler of First Wind apologized for missing the meeting and stated in an e-mail that he would be available on October 6, 2015.
Commissioner Blasi questioned account R60-400 Taxes, this is the amount of revenue minus expenditures. Once the commissioners approve the budget, it goes to property taxation, it then goes to Maine Revenue Service, they send out tax bills, funds are paid to Maine Revenue Services. The FY17 budget includes the expenditures and revenue for Bull Hill. Account R 60-80-0740 was listed as $289,464, this is the full revenue from the TIF. Commissioner Blasi asked “with the depreciation, is this number still good.” It is as close an estimation that we can make. Commissioner Brown offered a 1.5% salary increase to Supervisor Billings. The biggest single increase is for snow removal due to the Nicatous contract ending in June.
E 60-01-01-0120 Administrative Assistant is not presently utilized.
R 60-80-420 Local Roads Assistance Revenue is money received from the State as a reimbursement for plowing state roads, it has declined every year.
A budget meeting was scheduled for Tuesday September 29, 2015 at 8:00 a.m.
Commissioner Brown stated that the sheriff’s department will need major cuts. He questioned what a half detective would do; he didn’t want to cut services adding that last year the department was top heavy but this year.
Maintenance for computers was duplicated in the Contractual account and the Computer Maintenance account for FY15. Contracts were not itemized but includes Spillman, the Radio Contract for Browns, the Acorn Recording Contract and OIT $2,400. Account 07-30-150 Contractual includes approximately $17,000 for Bull Hill and “all my other stuff.” The Bull Hill amount can be removed and charged to the UT TIF account. The cost of Mt. Waldo is $400 a month.
Account 30-150 Service Contracts includes the interface with the Spillman system so the information is automatically transferred. Commissioner Brown questioned how much of the lease on Mt. Waldo would be paid by the Hancock TIF, he was not sure if funds will be available in FY16. This will show up under taxation in 2017.
E 07-30-150 Service contracts was reduced by $1,000.
The LD1 Cap currently is 2.4%, this can apply to the jail budget as well.
MOTION: to adjourn. (Joy/Blasi 3-0, motion passed)