Meeting transcript
Board of Finance- Regular Meeting
July 26, 2023 · Watch on YouTube · All meetings
Recording. Thank you, this is the town of Andover board of finance meeting for Wednesday 07/26/2023 I'll call the meeting to order. First, recite the pledge of allegiance. I pledge allegiance to the flag of The United States Of America United States Of America to the republic for which it stands nation one nation under God the bull, liberty, and scroll. Thank you. So we are on a very limited agenda tonight. Obviously, we've said pretty much a full meeting last week. We are mainly just going to talk about the fire department RFP and the contract to purchase the new piece of equipment. Before we get into that, we'll go ahead and open it up to public speak. Eric, I don't see anybody from the public on the meeting.
Correct the only public that I see here is Sean Goebel and he's for a specific agenda item.
Okay and he'll get a chance to talk then or whenever We'll go on to review the fire department RFP. So we do have the revised contract.
I didn't look at it word for word, but this is the one that Dennis had changes that Dennis had hoped for? Yes, Dennis proposed a series of changes to the contract. None of them were really very significant. They were just fairly minor learning con. The contractor agreed to all of the changes and sent us a revised contract, which I looked at and compared to what Dennis had suggested. And he in fact did incorporate the suggestions of the town's attorney. It wasn't anything really material. They were just minor points that Dennis felt were important to include.
Yeah. And just some things to clarify and make it, know, clear in some of the jurisdictions.
I I didn't get I have the old, I guess, one printed out with me. I didn't get the new one printed out. So I don't know. I I had two areas of concern. I'm not sure if we'll talk about those tonight or or what we're gonna do. So I don't know if the areas I had of concern were addressed by the lawyer or
Okay. Well, let's let's, I guess, give Sean an opportunity to kinda talk about the process. And and so one thing that went on was that the the RFP committee reviewed the contract and the RFP, and I'm paraphrasing here, Shana will give a chance to speak a little more clearly to this, but they reviewed it they determined that the proposal met the specifications of the RFP and they recommended going forward. If you remember Rob was a part of that committee and I believe he was at that meeting. Sean had forwarded the minutes of that meeting to Eric and I think I may have included them on one of the emails that I sent you guys. I'm not sure if you read down all the way. So that's what's happened so far. So what I would propose is we kind of give Sean an opportunity to kind of explain the process and make any comments about it and then we can ask questions thereafter. Make sense? Great, makes sense.
Okay, Sean, the floor is yours. You wanna kinda tell us what you guys how how you reviewed it and what you went through and your comments and thoughts about the proposal?
So what we did was once we got the bids in, one bid, it was sent out to all the members that were going to review it, which were Jeff McGuire, Rob, myself, Mark Goheegan, Scott Yeomans, Chris O'Brien, and Mark Lynch. They were on their own. That was the truck committee from the fire department and then the other two. So we reviewed everything at home, went through it, got together, discussed it. There's really no questions about it. A lot of the topic was how detailed the specs were and how everything was spelled out for, you know, how things are going to be built, where they were going to be, all that stuff. Everybody thought it was a great product, everybody liked the way it was written, and everybody was in favor. It's pretty much just like a twelve minute meeting. And we have took a vote on it, and we voted to move it forward for approval. So, you know, signed the contract and I guess
contract was changed to meet the satisfaction of the attorney. Always good. That's pretty much where we stand. It was pretty short and sweet. Wasn't very many comments on it that night for anybody.
Okay. Alright. Good. And just to just to reiterate, if I didn't forward this stuff to you guys. There were a few comments from the attorney. Paragraph seven talks about waiving consequential damages. Dennis had concerns like that, but every attorney will say that, but as he said, it's probably standard in the industry. He said he wanted to beef up paragraph six provides for an inspection of the truck by a representative of the customer. So we talked about team of inspectors for that and I think that that customers or representatives, yes, so it got changed to plural. The paragraph in line five paragraph 11 to make sure the sentence means what I think it means. I'm quoting Dennis here. Due to the presence of the word express, I recommended adding original specifications in the bid proposal immediately after the word contract in line five. So
that is Just looking at real quickly. Yeah that's.
Specifications I asked so so paragraph 13 ought to be deleted and replaced with the following and that basically it was that this contract shall be governed by and construed to the court as the laws of state of Connecticut in a suit blah blah blah. So he brought the court a competent jurisdiction proper venue in the state of Connecticut, I think wasn't totally clear in the first contract. Right.
Okay. So I guess at this point, we'll open up the floor for to the board of finance members to ask any specific questions that they have regarding the bid or the equipment or the process or the contract. Bill, do you wanna lead off if you had concerns about the original contract?
Sure. So my first one was in and and, again, I don't do a lot of these contracts or these kind of things, but two things that that jumped out at me. In article two, halfway through that the agreement at the cost to NESE, I guess, NESE or whatever, of acquiring any of the raw materials used in production supply of the products, basically, they're saying they can raise the price. They can void the contract altogether. I I thought part of the whole reason for doing this now was to get locked in at a specific price. And it just seems weird to me that, you know, the town is on the hook for $967,262 or whatever the price may come up to be if their costs go up. And I just I was concerned about that language, and I guess I'd love to hear what everybody else's thoughts were concerning that.
Yeah. I I don't think this is unusual. I've seen this kind of thing before. Mean, just from my point of view, I mean, it's not desirable. Obviously, we'd love to lock it in. I think that the, I would say that the reason for signing the, going out to bid really, obviously you want to have a target price I don't know that you fully lock it in, but the other thing is you just need to secure a build slot because if you don't do this, and you know it's a long, long process. I would notice to if you for those who may not have read through all that, but it is limited to basically 5% of the quoted bill of material. So there is a potential of a 5% increase in the material cost or in the cost of the apparatus. It would need to be have to be supported by some clear, you know, costs of acquiring raw materials, costs associated with labor, which I think is kind of below any shipping costs or any other material increase in the level as they have this agreement. You know, the only thing that really doesn't, I guess I would have concern about, but I don't think it's a major concern would be that it doesn't specifically state in here what the cost basis is. But I think that that would be the kind of thing that we would just, you know, require the manufacturer to substantiate clearly with the original cost and and go back, you know and and then identify that but. You know, unfortunately, I think that's kind of what these large contracts do. Anybody else have any comments or thoughts?
I guess my other comment about it is just the fact that so how much money do we have to put down on this truck?
We do not. We're not, we're, it's gonna be probably a year before we pay anything. And more than likely, so there's two things. One, a decision has to be made to enter into the contract because these things have a long lead time to bill, in this case a year and a half, which is actually surprisingly short. I've seen other people talking about build times in the two to three year range. So, the fact that they're guaranteeing a year and a half is actually pretty healthy. But at some point, we're going to have to deal with and lock in a mechanism of financing or make a decision to self finance, but that is not something we have to decide
tonight. Right now, all we have to do is agree that we're going to buy it if you so choose and authorize me to sign a contract so we can get a bill swap.
And I get that, but my biggest thing there is so it's just that they can null and nullify this agreement without any further liability to the buyer at all upon ten days notice. Like, If they wanted to, they just can say, we don't want the contract anymore, year into this. That doesn't seem right to me that we go to town, we get the money, we're planning on a truck, there's long lead times, prices are going up. And a year from today, we can find out, we no longer have a contract, we got to start all over again. And they have no obligation, no liability, no nothing to us. That seems pretty wow. I mean, I like to enter some contracts like that where I had that kind of right. It just seems everything's in their favor, nothing in our favor in that section. And and, of course, I have another section I'm not happy about. But, I I mean, I guess I've never done this before on million dollar truck before, but it just seems like
they could just tell us to go pound sand in a year, and then we're up Shitts Creek. It just excuse my language. But wow.
Well, on the other hand, they they lose every opportunity to make any money on this deal if that happens. I mean, I would think that there would really have to be a fairly significant reason for terminating a contract such as don't know. They can't get to par. They can't they can't meet the dates. They can't you know, prices go up 10% instead of 5%. They can't recover that cost. I don't I don't know.
So Yeah. I mean I mean, people like I said, people people will help me. Right? If I were to if I were to go out and I could build a million dollar home today and I buy I I get a contract with the contractor, and he defaults on delivering that house, you know, as a contract. You're go for a million dollars. If he defaults, I'm gonna take him to court and sue his ass off. It just seems like we have no recourse if they decide to say, it doesn't look too good for us anymore to do this contract, so we're out. I don't know. Just just the concerns I had. I don't know if anybody else feels that way, but it just seems
I just wanna piggyback on Bill too. This is Joanne, and then I'll let him do a second concern. That was my concern too. Like, it is we're taking a lot of risks with, you know, and going forward and I'm in favor of it, but I just, it'll be hard to have gone, put it at our budget meeting, talked about it, talked about it several meetings. And then they do seem to have, you know, they hold all the cards where They hold all the cards. With that clause for this much money, like say we're a year in and then, you know, costs double or something, which, you know, we know how inflation is going. We have no idea. The whole reason we're trying to get this done and being willing and think it's necessary. So that clause just bothers me as well though. But I don't know if it's, you you guys would have the history more than I would have if this is in every, every truck that we get. And yeah, I doubt it, but I didn't like it.
I think the risk And I'm like you. Go ahead. I was just saying that just keep in mind, we don't have any money in this. We have time certainly we, and I don't think that the, you know, if they were to contact us in three months and say, hey, we can't do this for the price, you know, that we had anticipated, we're gonna terminate the contract. Is we still have the, know, wasn't this RFP that was approved during the budget meeting, it was the, we provided the intention to the town that, you know, made clear that it was going to be in our capital plan to purchase a fire truck or fire apparatus for about amount for a million dollars, so I just just wanted to clarify that so so it certainly is a risk that you know they can't come through, and I think our only real. Potential loss, if you will, is the amount of time that require us to go out to go out to bid again and figure this out.
Again, it's just like I'm for the truck. I'm not trying to say I'm not. I'm just reviewing the contract, and and that really jumped out to me as is that language that I I would ever agree to in a in a contract, but okay.
So so just a couple quick things. I mean, you know, the contract basically says is if there is an increase in cost, the town has the first rate to agree to that increase in cost. And if we don't agree to that increase in cost, they can abandon the contract. Yeah. And I will tell you that this has been an issue in the area. I know at least one neighbor in town had an ambulance that they'd been waiting on with a two or two and a half year build time, and the manufacturer just said, you know what, we're not going to deliver it, And told them to pound sand. I'm not saying it's not a real issue, it is, but I don't know that the town, you know, because there aren't a lot of vendors bidding on this thing, and there's a giant backlog of work, the town doesn't have a lot of leverage in this one. Right. You know.
Like Mark said, it's just gonna hurt the town in the long run. We're just the only what would be best. You know, we hope I understand what you're saying. This is our one chance. This is the language. It'll just push it back for the fire department, you know, so we're trying to do our best job for them. That's all. So, I mean, obviously we'd have to go back to square one and like Mark also said, there's no financial risk yet. I mean, we don't have money rolled up in it, but we kind of wanted to plan. This was the whole thing. Let's get it. This is what the cost is going to be. We can know going forward, we're going to have this every year for ten years probably when we finance it. I understand all sides of it.
And and so I know we're we're not locked in how we're paying for this right now. But do we pay them any money before delivery of the truck?
So that depends on, to some extent, on the finance company that we go through. Because in like, for instance, in the case of the public works pickup truck, we were legally obligated to escrow one year's worth of payments before the bank would lock us in and agree on a rate. Depending on who we use for financing that may occur. But if so, it's normally just escrow. It's not, you know? So it's money that can be retrieved.
Gotcha. Gotcha. That's good. That makes sense. So I'm not trying to hog your floor, but I do have article seven, which I know you said there were some changes made there too, but that's another one of those things that reads to me like, hey. We can give you a totally defective truck. The steering wheel comes off when a truck's going on the highway at 50 miles an hour, crashes and kills people, and we have no recourse at all. It's it's basically how I read article seven that it's, again, Fang Yu on you. If you if the truck's defective,
if people get killed as some as as as result of some defect in this truck, we have no recourse. That's what article says seven says. I I can't believe that. If if I buy a brand new Ford today and I'm driving down the road and the axle falls off, we're gonna sue the shit out of Ford. This thing says we have no recourse at all if they give us a a junk truck. I don't know if anybody else finds that difficult, but I got a problem I got a problem with that.
Yeah. This is the one that Dennis was concerned about also, but as he, you know, pointed out, it's kind of like standard language, and you might even be able to find this in some contract. You know, it's not a regulated thing in the same way that you'd have with a consumer product, like Ford truck, you know, and it may or may not actually hold water in any kind of you know situation of legal, don't know and that's that would be more Dennis's area than mine.
Again, I I just feel as if that as a board of finance member approving this, that we have the town's interest here, and we should be looking out for the town. And saying go forward with that kind of language again just seems like we're just putting the town at risk here and and I don't know. Just it's just weird language to me that that they can just totally avail themselves of all responsibility if they deliver us a defective truck and it ends up killing people or property or whatever.
Well, look. Remember who this contract is between. This contract is between the town and New England fire apparatus. So nowhere in there does that relieve the manufacturer of liability? It only relieves New England fire equipment from liability. And since they're not the manufacturer, you know, that's like if you go buy a vacuum cleaner from Sears and the vacuum cleaner, you know, catches on fire and burns your house down. Not really Sears' problem, that's the manufacturer's problem. Think that's why that's how I read it. That's why I don't think Dennis was all that, you know, he doesn't like it, but he wasn't really
overly concerned about it. Yeah, it doesn't make that explicit. Yeah. I mean, if it was Sears, obviously the Torreloyer would sue both, you know? Sure. They'd go over Sears and and the manufacturer. And think this is just making clear that the the distributor is not It's not the distributor. I I see what you're saying. That that is different than that. Which which is still, I think, kinda questionable. It's it's like, you know, somebody putting up, you know, management's not responsible for the loss of articles that damaged on this property. Doesn't always hold up in court, you know? Right. Right. No,
I feel better about that the way you explain it. I I lost track of the fact that there was a manufacturer and a distributor, and I I agree with what you said
about that. So okay. I'm more comfortable with that. But it's it's a fair point I mean yeah Louise what is the warranty on it from the manufacturer
I think it depends on what. I remember looking at that a while back, but It's not in this contract. So No. No. But it is in the proposal. So give Sean a couple minutes and we can get you that answer. Okay.
The short answer is with New England fire and app equipment and apparatus, there is no warranty once you've once you've inspected the vehicle and signed it. So that's kind of the, you know, item six, I think there, paragraph six.
I'm just saying if do we have a recourse as long as we have some sort of a recourse back from the manufacturer
that makes me feel better. It's probably very limited but there probably is some. Specialty equipment like this, there's not going to be a ton. And can you get an extended warranty? Do I cost a lot of money?
I'm gonna say usually not worth the money you spend on No. That's a way for businesses to make a lot of extra profit. Yeah. It's just big profit for them. Yep. Which makes sense if you really can't afford to take a big hit, but I think in this case we'd probably be better off without.
There's no warranty general warranty plumbing warranty third party pump warranty. General warranties two years, then there's a plumbing warranty for ten years. Third party pump warranty. We'd have to look through. So basically, you know all the subsystems carry their own where a bunch of the subsystems carry their own warranties. So it's like specific to each individual thing. So I don't think you can say the drive train versus the vehicle warranty on a car. Right. Versus the van. Right. You know, it's all warrantied individually.
A lot of health systems involved. General warranty is two years. I'm I'm actually impressed with that. I I would have thought a year. But Yeah. Me too. Yeah. And that's from date of delivery. It go by mileage? No. No? Okay. Now,
of the big problems in, you know, having some involvement with the fire department up in Suffield where I used to live, just one of the big problems with fire equipment is it doesn't get used very much, you know, stuff sits. You have to make sure that you start the engine and, you know, make things make sure things operate and everything else. You may have more failures on a piece of equipment that doesn't get used very often that's low mileage. I mean, Sean could probably speak more to that than I could, but. Yeah,
I think a lot of this stuff, like same thing with the plow truck, you know, if they're manufactured, but then if you have, for instance, a Cummings engine in it, the engine comes with a different warranty from that manufacturer. So, the manufacturers pass off the warranties from their sub assembly people to you, essentially. Does that answer your question? Yep. Thanks.
Other questions for Sean or concerns about the contract and the RFP or proposal?
Bill brought up really good points. I'm glad you addressed them and I feel better about it too with the explanation. Know, we're just I think we have no in my opinion, yeah, you asked if there's any more questions. So no, no, I feel satisfied with the things that were brought up and answered. Okay.
Does anyone wanna make a motion to approve moving forward on the contract? Yeah. Okay, we make some motions. So just to restate it, this is a motion to approve the town of Andover moving forward with the contract of new England fire equipment and apparatus for the new. New fire squad vehicle. Right? I guess. Anybody want to second that? I'll second it. Okay. Brian seconds. Do we have further discussion?
So if I were to suggest, I would suggest two things. One, you add to the motion the sum listed in the agreement, which is $967,262.00. And the second is that the motion explicitly authorizes the town administrator to sign the contract on behalf of the town.
Yeah. I thought about that one. Okay, Louise, are you okay with that wording? And Brian?
Yes, definitely. Okay. Yeah, it's a good point. You know, the sum I wouldn't have really thought about, but yeah, to explicitly authorize Eric to sign the contract, that does make a lot of sense.
Should we add that the price will not go up more than 5%?
I think that's implicit in the contract or it's explicit. Yeah, so it's clear in the contract pretty well written so I think since we're approving this contract you know provided by you know the vendor and signed on the date of July 24 just to make it explicit that probably is a good thing to put in there as well that should hold it lock it up pretty solid. Any other discussion? Okay, some good questions came up some good discussion. I guess we'll go ahead and call for a vote. All those favor of the motion say aye. Aye.
Any opposed? Any abstentions? Okay, hearing none, the motion passes. Thank you everybody. Appreciate everybody joining today to take care of this business. Item four on the agenda is public speak. Again, it doesn't look like we have anybody from members of the public other than Sean. So unless Sean, you have anything to add, we'll go ahead and move on. Appreciate all your hard work.
Okay, thank you. And does anybody want to make a motion to adjourn?
I'll make the motion to adjourn, Bill DeRoziers. Yeah, thanks Bill.
Anybody want a second? Second. Mooney seconds, any discussion? All those in favor say aye. Aye. Opposed?
I trust no abstentions. Okay, the meeting is adjourned. Thank you everybody for your time. Appreciate you gathering when we didn't really expect to, but this important business, I think it's a good move forward for the town. Some good questions and discussion. Thank you for paying close attention to this. Thank you, everybody. Thanks, Mark. You go Yeah. Oh, go ahead, Louise.