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Tuesday, May 23, 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 Chair Diane Royal.

The Acting Secretary declared a quorum present.

The Pledge of Allegiance was said by all.

APPROVAL OF MINUTES

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.

Fred Porter from the NAACP, 3700 West Holmes, spoke on surveys conducted on governmental agencies goods and services purchased. He made reference to a letter from the BWL dated March 24, 2000, and commended the Board on what it intends to do. However, he expressed disappointment on the low percentage of minority vendors being utilized by the BWL.

Brenda Hanford, 3631 Birchfield Dr., spoke regarding her utility bill. She and her husband have been trying to get on an equal monthly payment plan with the BWL and it ha s been denied.

Dick Taylor, BWL Test Group, spoke on the BWL Compensation Plan that was discussed at the Committee of the Whole meeting, and is to be voted on this evening. Mr. Taylor feels that there are still many unanswered questions regarding this plan. Several of the requests that he made at the Board Meeting of April 25, 2000, have not yet been addressed.

COMMUNICATIONS

An anonymous letter was received regarding the proposed pay plan for non-union workers, and a resolution approving taking $3.2 million a year, for the next 20 years, from the defined benefit pension plan.

Received and placed on file.

REPORTS OF COMMITTEES

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COMMITTEE OF THE WHOLE REPORT

The Committee of the Whole met on May 9, 2000, to discuss and consider the following items:

Chief Financial Officer Dana Tousley presented details of the preliminary budget by process for FY 2000-2001. He reviewed the history of rate increases, projected income statement and sales and revenue forecast.

General Manager Pandy presented an overview of various fees and charges associated with trenching, site inspections, pole attachments, and other related services. It was noted that some of the fees and charges have not been revised in a number of years.

General Manager Pandy and Human Resources Director Linda Gardner presented an overview of the history and the fundamental approach of the new compensation plan for non-bargaining employees. The new pay structure includes two major components: base pay and variable pay. Base pay for each skill family is competitive with the market. Pay ranges will be adjusted annually, based on market surveys. Variable pay is compensation above base pay. It must be re-earned each year, based on performance results on achievement of annual objectives. Variable pay includes multiple components based on the balanced scorecard concept, consisting of the following incentives:

Corporate:  Corporate measures and results.

Process:  Measures and performance results for each of the processes.

Individual:  Individual employee performance.

Six employees spoke during the Public Comments portion of the meeting to express their concerns regarding the salary survey, performance appraisal system and retaining skilled and technical employees at the BWL.

Submitted by:
Charles M. Creamer, Chair Pro
Committee of the Whole

Discussion: General Manager Pandy read the three new amendments made to the resolution on the new Compensation Plan. Commissioner Murray appreciated staff considering his concerns expressed in the Board Meeting of April 25, 2000. Commissioner Royal expressed her concern about the performance criteria not being formulated before the Board of Commissioners are asked to vote on the plan.

Action: Adopted unanimously.

#2000-5-2
APPROVAL OF UNION CONTRACT

RESOLVED, That the four-year agreement reached between Management and the Union Negotiating Committee is retroactive to November 1, 1999, unless otherwise designated in the agreement, and is hereby approved. The labor agreement is to expire at Midnight, October 31, 2003.

RESOLVED FURTHER, That the Chair and the Secretary be authorized to sign the labor agreement incorporating the settlement changes. An executive summary of major issues resolved is attached.  (See Attachment C.)

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

Action:   Carried unanimously.

#2000-5-3
EXTENSION OF COAL SALES AGREEMENT

RESOLVED, that the current coal requirements agreement dated June 26, 1996 for Moores Park Steam Plant between BWL and Lodestar Energy be extended six (6) months, starting October 1, 2000 and ending March 31, 2001 at a reduction in price of 6.3%.

In consideration of the contract extension, Lodestar has agreed to provide not less than 35,000 tons from 4/19/00 until 9/30/00 and not less that 35,000 tons from 10/1/00 until 3/31/01.

Action:   Carried unanimously.

#2000-5-4
REVISION OF ELECTRIC FEES AND CHARGES

RESOLVED, that the BWL charges identified in the "Board of Water and Light Rules for Electric Service" be revised, effective June 1, 2000, as follows:

The updating of Electric and Water Fees and Charges will positively impact BWL capital requirements by increasing the expected contribution in aid received from new customers, thus reducing BWL capital requirements by an estimated $75,000 in Fiscal 2001.

Discussion: Commissioner Aquilina inquired if the changes in fees and charges need to be part of the Public Hearing. Chief Financial Officer Dana Tousley responded that the fees do not affect the price of electric, water or steam.

Action:   Carried unanimously.

#2000-5-5
REVISION OF WATER FEES AND CHARGES

RESOLVED, that the BWL charges for Water service and hydrant construction and operation be changed, effective June 1, 2000, as follows:

The updating of Electric and Water fees and charges will positively impact BWL's capital requirements by increasing the expected contribution in aid received from new customers, thus reducing BWL capital requirements by an estimated $75,000 in Fiscal 2001.

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

Action:   Carried unanimously.

#2000-5-6
POLE ATTACHMENT FEES

RESOLVED, that the BWL Pole Attachment fees be changed, effective June 1, 2000, and previous Resolutions rescinded, as follows:

The updating of the Pole Attachment fees are expected to generate an additional $120,000 in revenue in Fiscal 2001.

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

Action:   Carried unanimously.

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CUSTOMER CHOICE FOR WATER SERVICE & MAIN INSTALLATIONS

RESOLVED, That BWL will allow customer choice for water service and main installations on customer sites. Customer choice will allow qualified contractors and/or developers to construct water system installations that meet BWL specifications and construction standards; the water system installations constructed in this manner will become assets that are owned by the BWL.

RESOLVED FURTHER, That fees be assessed to recover the cost of ensuring compliance with these specifications and standards.

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

Action:   Carried unanimously.

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PROPOSED RATE SCHEDULES

FURTHER RESOLVED, that a public hearing to solicit public input on this matter be set for Tuesday, July 11, 2000 at 5:30 p.m., in the Board of Water and Light Offices at 1232 Haco Drive. Also that the Corporate Secretary be directed to file with the City Clerk information regarding pending changes in the rate structures on or before May 26, 2000.

Action:   Carried unanimously.

#2000-5-9
FY 2001 BUDGET

RESOLVED, That the annual budget covering Fiscal 2000-2001 be approved as presented. (See Attachment B.)

FURTHER RESOLVED, That capital projects are authorized in the amount of the project estimate. Capital expenditures for fiscal 2000-2001 are limited to the amount included in the budget.

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

Action:   Carried unanimously.

UNFINISHED BUSINESS

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Resolution to Adopt New Compensation Plan for Non-Bargaining Unit Employees

The last redesign of the BWL compensation system was conducted in June, 1980.

WHEREAS, Staff and the consultant presented details of the new compensation plan for Non-Bargaining Unit employees with recommendations regarding changes.

WHEREAS, as discussed by the Personnel Committee on October 27, 1999, and approved by the Board, the Board of Water and Light base pay in relation to market is established at the 50th percentile.

WHEREAS, The internal equity issue related to the Technical Skill Family, Grades 1 through 6, was reassessed, especially in relation to the Bargaining Unit.

RESOLVED:

This proposed change allows for a gradual transition to the new plan and reduces the percentage of employees above market rate by approximately 30%. Furthermore, it will shift approximately $200,000 from variable to base pay, with an additional $30,000 for pension and benefit costs.

Motion by Commissioner Murray, seconded by Commissioner Creamer, to take the proposed resolution for the Compensation Plan off the table.

Action:   Motion to take off the table was carried unanimously.

The Chair called the question on the Resolution to Adopt the New Compensation Plan for Non Bargaining Unit Employees, as amended.

Action: The resolution was not passed, as five affirmative votes of the total Board are required for passage.

#2000-5-11
PROPOSED RESOLUTION TO OFFER THE ROTH IRA PROGRAM TO EMPLOYEES

WHEREAS, The Board of Water and Light desires to provide a payroll deduction Roth IRA Program to the employee pension options, and

WHEREAS, Roth IRA contributions may be made after withholding taxes up to an annual contribution of $2,000.00, and

WHEREAS, Prudential, which manages the BWL Defined Contribution Plan investments, offers an IRS-approved Roth Program, and

RESOLVED, That the BWL is hereby authorized to offer payroll deduction to its employees for Roth IRA options from both ICMA and Prudential retirement services.

RESOLVED FURTHER, That the Chief Financial Officer is directed to take such actions as may be necessary to carry the Roth IRA Program into operation.

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

Action:   Carried unanimously.

RESOLUTIONS

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RESOLUTION HONORING JOHN ELASHKAR

WHEREAS, the Lansing Board of Water and Light Commissioners wish to honor John Elashkar on the occasion of his retirement from the BWL on May 20, 2000, after more than 30 years of outstanding service and exceptional achievements, and

WHEREAS, Hanna El-Ashkar had arrived in the United States of America as an alien visitor with six months visa from his home in Deir Mimas, Merjeyoun, Lebanon and was hired by the BWL in 1970 as a civil engineer, having graduated from the American University of Beirut; and

WHEREAS, John Elashkar became a naturalized citizen of the United State of America on October 28, 1976; and

NOW THEREFORE BE IT RESOLVED, that the Board of Water and Light Commissioners salute the many achievements, dedication, and professional competence of John Elashkar.

Action: Resolution approved by consensus.

Retired Assistant General Manager John Elashkar expressed his gratitude to the Board of Water and Light for his 30 years of employment. He said that he learned a lot, and developed valuable friendships.

GENERAL MANAGER'S REMARKS

Commissioner Christian asked for the time line of this project. Mr. Pandy said that service will begin in the Spring of 2001.

Ottawa Station Update: General Manager Pandy handed out color-drawings showing a rendering of the proposed Ottawa Station Redevelopment Project. The feasibility study from Steiner and Associates has not yet been received.

REMARKS BY COMMISSIONERS

Commissioner Christian expressed his appreciation to John Elashkar for everything he has done for the Board of Water and Light, and wished him well in his retirement.

EXCUSED ABSENCES

By Commissioner Christian, seconded by Commissioner Murray, that the absences of Commissioners Callen and Werbelow be excused.

Adopted unanimously.

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

Cathy Gorman, BWL Employee, expressed her appreciation on not passing the Compensation Plan.

ADJOURNMENT

On motion by Commissioner Christian, seconded by Commissioner Creamer, the meeting adjourned at 7:20 p.m.

                                            /s/ Rosemary Sullivan, Acting Secretary

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Marilynn Slade, City Clerk