MINUTES OF BOARD OF COMMISSIONERS' MEETING

LANSING BOARD OF WATER AND LIGHT

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Tuesday, January 25, 2000
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The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to order by the Chair, Diane Royal.

Present:

Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian, Charles M. Creamer, Mark A. Murray, David O’Leary, Diane R. Royal and Judson M. Werbelow (by conference phone).

Absent:

None

The Secretary declared a quorum present.

The Pledge of Allegiance was said by all.


APPROVAL OF MINUTES

Motion was made by Commissioner Christian, seconded by Commissioner Aquilina, to a pprove the minutes of regular session held December 14, 1999.

Carried unanimously.


PUBLIC COMMENTS

THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE MEETING.

No persons spoke.


COMMUNICATIONS

No communications.


REPORTS OF COMMITTEES

No committee reports.


GENERAL MANAGER’S RECOMMENDATIONS

Background materials on items presented are on file in the Office of the Corporate Secretary.

#2000-1-1
SECOND AMENDMENT TO BWL DEFINED BENEFIT PLAN

RESOLVED, That the Second amendment to the Lansing Board of Water and Light Defined Benefit Plan for Employees’ Pensions is hereby adopted effective as of July 1, 1999; and

FURTHER RESOLVED, That the Chair of the Board of Commissioners and the Corporate Secretary are hereby authorized to execute the Amendment and related documents on behalf of the Corporation

Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the resolution.

Discussion:   General Manager Pandy noted that the amendment establishes a 401(h) subaccount that the BWL may use in the future to help pay for retiree health care costs.

Action:   Carried unanimously.

#2000-1-2
CAR ALLOWANCE REIMBURSEMENT

RESOLVED, That the present car allowance reimbursement rates effective December 1, 1992 applicable to BWL employees required to provide personal transportation in performing their respective job assignments, be amended effective February 1, 2000, as follows:

That the per mile reimbursement rate for Plan A (occasional drivers) be set at the Business Standard Mileage Rate and the per mile reimbursement for Plan B (required for job – formerly known as Plan C), be set at 75% of the Business Standard Mileage Rate announced periodically by the IRS. In addition, a flat rate reimbursement (paid biweekly) will be paid to Plan B employees (those employees required to have a personal automobile available for performing their job assignments). The flat rate (currently $25.39 per pay period) will be periodically reviewed and adjusted, if necessary, by Human Resources.

Plan A:  Business Standard Mileage Rate for all miles driven.

Plan B:  75% of the Business Standard Mileage Rate for all miles driven PLUS a biweekly flat rate to be determined by Human Resources (currently $25.39 per pay period).

Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the resolution.

Action:   Carried unanimously.

#2000-1-3
CORPORATE POLICIES AND PROCEDURES

WHEREAS, The Board appointed a special policy committee assigned to review the current Board of Water and Light Policy Manual; and

WHEREAS, The Special Policy Review Committee met on October 25, 1999, to review a draft of broad policy statements, as prepared by staff, for comments and input; and

WHEREAS, The Committee of the Whole thoroughly reviewed the proposed policy statements for input and consensus on November 30, 1999.

RESOLVED, The Board of Commissioners hereby approves the Board of Water and Light policy statements and associated resolutions (attached).

FURTHER RESOLVED, That the Board of Water and Light Policy Manual dated July 1996, be replaced with the new policies and resolutions submitted herewith.

Motion by Commissioner Aquilina, seconded by Commissioner Creamer, to adopt the resolution.

Discussion:   The Commissioners were provided with an attachment containing suggested amendments to the proposed policies and resolutions submitted by Commissioners Werbelow and Royal for review and input.

With respect to policies, Commissioner Murray raised the question of the appropriate role of the Commissioners relative to the General Manager. He stated that in his judgment the Commissioners should focus on providing fundamental governance and direction on major policy issues and allow the General Manager to manage the organization within the broad parameters of important policy issues.

General Manager Pandy gave a historical perspective on the BWL’s long record of having detailed policies and resolutions. He stated that it has been the practice of the Board to disclose decisions by setting policy and adopting resolutions to effect the policies in order to stand the test of public scrutiny.

Commissioner Callen remarked that he would like to see more specificity in the policies. In cases where there are requirements that are referred to in the policies, the specifications should be spelled out in the policy statements, such as a particular City Charter requirement.

Following discussion, there was consensus that the suggested changes in the attachment (Policies and Resolutions – comments and revisions), faxed to the Commissioners on January 25, 2000, be incorporated in the final written policies and resolutions.

Action:   Carried unanimously.

#2000-1-4
REDESIGNING THE COMPENSATION SYSTEM

RESOLVED, That a contract be awarded to Dorey, Reagan & Associates in an amount not to exceed $111,950 to recommend and implement changes in the Non-Bargaining Unit (NBU) compensation plan. The contractor will make recommendations to align our compensation system with a process-based organization, and to provide information enabling the BWL to design pay strategies, which are market driven. The contractor will also advise the BWL on implementation of a system, which incorporates a variable pay approach.

Motion by Commissioner O’Leary, seconded by Commissioner Aquilina, to adopt the resolution.

Discussion:   In response to questions raised by the Commissioners, General Manager Pandy reported that the scope of the contract to redesign the compensation system was expanded from what was originally proposed in April 1998 (Res. 98-4-1). He noted that this study is the first major review of the Non-Bargaining Unit compensation plan in over twenty years.

Action:   Carried unanimously.


UNFINISHED BUSINESS

No unfinished business.


NEW BUSINESS

No new business.


GENERAL MANAGER'S REMARKS

Series 1999A and 1999B Bond Issue Cost.  General Manager Pandy reported that bond issuance costs were below the estimated 1.5% of the face amount of the bonds. Bond issuance costs as summarized below:

Bond Issue

Tax-Exempt Series 1999A 1

 

Taxable Series 1999B 2

 

Face Amount of Bonds

$48,230,000.00

$78,455,000.00

Total Issuance Cost

$562,938.71

$1,125,493.78

Issue Cost as Percent of Face Amount

1.17%

1.43%

Bond Rating – Moody’s

Aa3

Aaa

Bond Rating – Standard & Poor’s

AA

AAA

Net Interest Cost

5.23%

7.62%

Average Coupon

5.14%

7.58%

Average Bond: Life – Years

9.6

11.0

1  To finance BWL capital improvements needs

2  To finance the Central Utilities Complex to serve General Motors’ new Lansing Grand River Assembly Center.

Cost Reductions.  Efforts are underway in all processes to reduce BWL costs. The Commissioners received a reported submitted by the Production Process demonstrating reductions in overtime, while simultaneously reducing outstanding work orders and without heavy reliance on outside contractors. Cost reduction reports on the other processes will be submitted within the next couple of months.

General Motors’ Lansing Grand River Site Dedication.  The site dedication media briefing to announce General Motors’ (GM) newest U.S. facility, the Lansing Grand River Assembly Center (LGR), is set for Monday, January 31, 2000. Speakers include GM President Rick Wagoner, Governor John Engler, Mayor David Hollister, UAW Local 652 Chair Art Baker, and LGR Plant Manager Bob Anderson.

Chilled Water Project Update

Saga Broadcasting Corp.- Proposed Settlement Agreement.  General Manager Pandy distributed a copy of a proposed Settlement Agreement with Saga Broadcasting Corp. (Saga) relative to siting the chilled water facility on the premises known as 327 W. Walnut Street, Lansing, owned Ingham County. The terms of the proposed agreement were reviewed.

Ottawa Station as a Viable Site for the Chilled Water Facility.  General Manager Pandy reported that BWL engineering staff has evaluated the use of the Ottawa Station as a viable site for the chilled water plant. The analysis indicates the chiller plant could be located at the Ottawa Plant, potentially at savings over the Walnut Street site. Graphic slides were displayed showing that the chilled water plant would take up about 22,000 square feet (using the basement and mezzanine of the turbine hall, both of which are below the street grade) of the Ottawa Station’s 180,000 square feet, and would still leave the rest of the facility available for commercial redevelopment. The advantages and disadvantages of the Ottawa Station site versus the Walnut Street site indicates cost increases in extending the piping of the chilled water distribution system would be more than offset by savings in environmental, legal and land costs.

Ingham County.  General Manager Pandy briefed the Board on the status of negotiations with Ingham County on the responsibility for environmental clean-up if soil contamination is found at the 327 W. Walnut Street property. This site is currently a parking lot, but was formerly the location of a gasoline station.

After a question and answer period, the Commissioners gave staff the option of pursing the Ottawa Station either as an alternate or as the preferred site for locating the chilled water plant. The Commissioners will be kept informed on the progress as the options are being evaluated. Mr. Pandy told the Board that he plans to discuss the Ottawa Station option with the Mayor and city officials.

Status of the Ottawa Station Site Demolition Project.  General Manager Pandy reported on activities relevant to the demolition project at Ottawa Station. Bids are due on January 26, 2000, for completion of the demolition work.

Dimondale Dam Property.  General Manager Pandy reported that the Village of Dimondale has expressed renewed interest in acquiring the BWL property within the Village corporate limits for their planned Dimondale Island Park. He noted that this matter has been pending since 1997 with the Village of Dimondale at which time discussion took place about conveying the property to the Village for nominal consideration for the development of a recreational facility. The Village proposes purchasing the property and dams in their current condition for $1.00, and releasing the BWL from any obligations to repair or maintain the dams. Mr. Pandy noted that the BWL has owned this property for many years, but it is not suitable for hydroelectric power generation or any other BWL use. Following discussion the Commissioners concurred that it would be good use of the property to convey it to the Village and let them develop it for their community.

Employee Satisfaction Survey.  General Manager Pandy presented the results of the employee satisfaction survey conducted by Market Strategies, Inc. He summarized the scores for questions pertaining to: (1) Overall satisfaction with the BWL as a place to work, (2) Satisfaction with your current position, (3) Overall satisfaction with BWL as a company, and (4) How well does your job meet your expectations? This is the first time a comprehensive survey has been conducted at the BWL to measure employee satisfaction. The primary objectives of the survey were to explore links between employee satisfaction and customer satisfaction and to provide basic information about employee performance, perceptions of the work environment, employee satisfaction and retention. Perceptions of senior management direction and senior management performance received the lowest marks among employees. The Directors are presenting survey results to employees in their processes throughout the BWL for feedback in seeking solutions. The survey results and subsequent actions to address them will be the subject of a future Personnel Committee meeting.

Update on Negotiations with IBEW Local 352.  General Manager Pandy reported that management and the IBEW negotiating committee have reached agreement for a four-year contract. The package will be presented to the IBEW membership for consideration, but without an endorsement from the IBEW’s bargaining team. Highlights of the basic agreement, economic changes and procedural issues were reviewed. Linda Gardner, Director of Human Resources, was present to respond to questions. The reading of the contract package will take place on Friday, January 28th. She told the Board that the union leadership serving on the union negotiating team indicated that they would read the proposed agreement as a management package and allow their membership to vote on it, however, they would not endorse it. The vote on the management proposal is set for Thursday, February 3rd.

Northwest Well Site Property.  General Manager Pandy reported that the City of Lansing Parks and Recreation Department is requesting an easement/license agreement from the BWL for a portion of the Northwest Well Field property for the westerly extension of the River Trail. Staff Attorney Larry Wilhite spoke to this issue. He noted that the strip of land the City wants the BWL to relinquish is not suitable for development. The Commissioners agreed that the River Trail has been a great addition to the City. In the spirit of cooperation with the City, they concurred that a recommendation to relinquish the strip of land requested be brought forth for approval.


REMARKS BY COMMISSIONERS

Commissioner Callen conveyed a message with respect to Y2K from Councilmember Harold Leeman:  "Thanks for keeping the lights on."

General Manager Pandy acknowledged the work of many employees throughout the BWL who worked for over a year in preparing the BWL for Y2K, and many of whom gave up their New Years Eve to make sure the BWL was protected and prepared.


EXCUSED ABSENCES

There were no absences.


PUBLIC COMMENTS

THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.

Joseph (Joe) Davis, President of IBEW Local 352, explained why the union negotiating team is not endorsing the contract package. He stated that union negotiating team members were close to achieving a package they could support, however the general increase is 0.5% lower than requested, and .the prescription co-pay is $5.00 higher than requested. For these two reasons, the union negotiating team is not endorsing the package, but has agreed to offer the proposal to the membership for a vote on February 3rd.


ADJOURNMENT

On motion by Commissioner Callen, seconded by Commissioner Creamer, the meeting adjourned at 7:00 p.m.

                                            /s/ Mary E. Sova, Secretary



Filed: January 31, 2000

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Marilynn Slade, City Clerk