MINUTES OF THE BOARD OF COMMISSIONERS' MEETING

LANSING BOARD OF WATER AND LIGHT

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Tuesday, July 23, 2002
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The Board of Commissioners met in regular session at 5:35 p.m. in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan.  Chairman Ron Callen called the meeting to order.

The Secretary declared a quorum present.

All said the Pledge of Allegiance.

Chairman Callen welcomed Benjamin Kelson as the newly appointed Commissioner to the Board of Water and Light.  Commissioner Kelson was appointed to an At-Large position that expires in 2005.

On behalf of the Board, Chairman Callen acknowledged the past service of retiring Commissioners Ernest Christian and Charles Creamer and thanked them for their commitment and many contributions to the Board while serving as Commissioners.

APPROVAL OF MINUTES

Motion made by Commissioner Wonch, seconded by Commissioner Haggart, to approve the minutes of special session held May 28, 2002.

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.

TRIBUTES

Water Tapping Teams Honored.  The BWL National Champions Women’s Watertapping Team and Runner-Up Men’s Watertapping Team were present to receive recognition on their national competition.  The Women’s team finished first place with a time of two minutes and 20 seconds at the American Water Works Association (AWWA) National Conference competition, held in June, in their second year of competition.  The Men’s Team finished second place with a time of one minute and 24 seconds.  The national contest sponsored by AWWA simulates a water service connection for a typical residential customer.  The women’s team consisted of Diana Paul, Patricia Clark, and Bobbi Johnson.  The men’s team consisted of Jim Valentine, Scott Wilkinson, and Leon Flores.  Scott Wilkinson replaced Randy Jones who was injured and unable to complete at the national level.  Remecho Sanders was also recognized on his coaching efforts for both the women’s and men’s teams.  Brian McLeod, Manager of Electric, Water and Steam Transmission and Distribution, was acknowledged for supporting the efforts of the two teams.

BWL/Delta 5K Walk/Run Participants.  General Manager Pandy recognized Commissioners Connie Marin and Nancy Wonch for their participation in the BWL/Delta Rocks 5K Walk/Run held June 22^nd.  Commissioner Marin was the official starter of the race, and Commissioner Wonch ran at the event and came in third in her age group.

COMMUNICATIONS

Letter from Thomas J. Pillar, Ed.D., Superintendent of Waverly Community Schools, Lansing, acknowledging that the citizens of the Waverly Community Schools have elected BWL employee Calvin Jones to a four-year term on the Board of Education.

Received and placed on file.  Commissioner Callen commended Mr. Jones for his civic involvement.

REPORT OF THE NOMINATING COMMITTEE

Commissioner Duncan read the report of the Nominating Committee.

Resolution # 2002-7-1

The Nominating Committee met on June 10, 2002, to review Commissioner survey responses for consideration of nominations for Board officers.

The Nominating Committee recommends the following slate of officer candidates for Fiscal Year 2002-03:

Respectfully submitted,

                                                            NOMINATING COMMITTEE
                                                            Ernest Christian, Chair
                                                            Nancy Duncan
                                                            Diane Royal

Moved by Commissioner Wonch, seconded by Commissioner Marin, that the report and the recommendation of the Nominating Committee be approved.

Action:  Carried unanimously.

GENERAL MANAGER’S RECOMMENDATIONS

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

RESOLVED, That the electric Infrastructure Recovery Rider rate schedule, attached, be adopted and made effective for electric consumption on or after September 1, 2002.

Staff Remarks:  This rate schedule was the subject of a public hearing at tonight’s meeting (July 23, 2002).  There was no input at the public hearing nor were written comments received.  The primary purpose of this rider is to encourage economic development in the BWL service area and recover those expenses necessary to provide electric distribution infrastructure from the customers receiving retail electric service from the BWL on the qualifying property.  It will be offered to customers when, in the BWL’s judgment, the availability of the rider is a major factor in the customer locating or expanding its operations and when the rider will result in a net benefit to the BWL and its customers.  The rider is available to developers or customers that are developing commercial or industrial facilities requiring installation of BWL electric infrastructure.  A customer desiring service under this rider must contract for full service electric requirements for the qualifying property, on or before December 31, 2005.  Qualifying property under contract must be 50 acres or more, unless specifically approved by the Board of Commissioners.  The contract term shall not be less than five years nor greater than twenty years.

Moved by Commissioner Duncan, seconded by Commissioner Haggart, that the resolution be approved.

Action:  Carried unanimously.

 

RESOLVED, That the Eckert Station Cooling Tower Improvement Project (Project No. 99-101) budget be increased from $2,028,000 to $2,500,000 to cover the cost of additional work unforeseen at the time the project scope was defined and the budget set.  The increased funds will cover the cost of unforeseen additional repairs to the existing cooling tower steel support piles and concrete support slabs and beams.

Staff Remarks:  Actual removal of the existing steel pile coatings during construction uncovered extensive deterioration and section metal loss requiring structural repairs to approximately 140 piles versus the 20 initially included in the repair contract.  Estimates for concrete crack repair and epoxy sealing of the support slabs and beams were based on visual inspections of the crack exteriors and were significantly less than the actual amounts required to completely fill the voids and protect the concrete and imbedded re-bar from future deterioration.  Board policy requires that any overages on projects of 15% or more or over $200,000 be brought to the Board for review and consideration.

Moved by Commissioner Haggart, seconded by Commissioner Duncan, that the resolution be approved.

Discussion:  Commissioner Callen asked why more pilings were discovered than originally anticipated.  Robert Nicholson, Manager of Project Engineering, responded that it was difficult to determine the extent of the metal loss until after the contractor started the work to remove the lead paint and old coatings.  The repair work turned out to be worse than anticipated.  In response to Commissioner Wonch’s question regarding the possibility of future overruns on this project, Mr. Nicholson stated that the project is approximately six weeks away from completion and staff is staying in close contact with the contractor to monitor costs and keep them at a minimum.

Action:  Carried unanimously.

 

RESOLVED, That the Sixth and Seventh Supplemental Revenue Bond Resolutions authorizing Water Supply, Steam and Electric Utility System Revenue Bonds of the City of Lansing, Michigan, attached, be approved.

Staff Remarks:  The two bond resolutions and the official statement are subject to final review by our bond counsel.  The Commissioners are requested to approve the two bond resolutions.  The bonds would be insured and carry an AAA rating from both Moody’s (underlying rating Aa3) and Standard and Poor’s (underlying rating AA).  The bonds would be dated August 1, 2002 and sold at competitive auction on August 14, 2002.  The 2002 A bonds of $25.5 million would be issued to finance our NOx compliance projects.  The 2002 B bonds of $19 million would be issued to refinance higher interest rate bonds, which were issued in 1994.  With these bond issues, BWL’s total debt service would be approximately $19 million per year, of which General Motors pays $9 million per year for the Central Utilities Complex.  Debt service coverage (combined) of 2.02x on total debts of $182 million is a reasonable amount of debt; our plans do not anticipate any additional debt issues during the next five years.

Moved by Commissioner Kelson, seconded by Commissioner Wonch, that the resolution be approved.

Action:  Carried unanimously.

 

RESOLVED, That the 31.3 acres+ of land at Sunset Street (Comfort Street Property), which is under the jurisdiction of the BWL but no longer required in its entirety for BWL purposes, be transferred to the Department of Parks and Recreation or such other City department as the Mayor may determine appropriate, in consideration of the payment of $39,350 to the BWL and subject to the City assuming all environmental liability associated with the parcels, and indemnifying the BWL against the same.

RESOLVED FURTHER, That the 20.22 acres of land south of the railroad right-of-way, which is under the jurisdiction of the BWL but no longer required in its entirety for BWL purposes, be transferred to the Department of Parks and Recreation or such other City department as the Mayor may deem appropriate, in consideration of the payment of $16,450 to the BWL and subject to the City assuming all environmental liability associated with the parcels, and indemnifying the BWL against the same.

RESOLVED FURTHER, That these transfers shall be subject to a “use agreement” for BWL purposes and any easements or restrictions of record.

Staff Remarks:  This is a new resolution. (Prior Resolution 2001-7-15 failed).  The City proposes to buy the land for the original price that BWL paid to acquire it.  The City does not plan to harvest any trees, except for those that need cutting to extend the River Trail System.  The amount for consideration of payment from the City of Lansing to the BWL is directed by a City ordinance that indicates that if the City purchases property from the BWL, they will pay BWL the same price that was paid by BWL when it was originally acquired.  The above prices reflect very modest consideration since the northerly parcels were acquired in 1945, 1953 and 1964; and the southerly parcels were acquired in 1927 and 1942.  The BWL has asked the City to take on any environmental liability that goes with the property.  The City plans to have a base line environmental assessment done on the property before this transaction is closed.  The BWL has used this property as a flyash landfill for many years until the 1970’s.  There are some active wells that need to be protected through easements.

In response to a question raised by Commissioner Duncan, General Manager Pandy noted that Murdock Jemerson, Director of the Lansing Parks and Recreation Department has indicated in his letter to the BWL, dated July 18, 2002, that the City is “not interested in pursuing this property for commercial gain related to the harvesting of timber.  Trees will be removed only to accommodate the development of the River Trail north of the railroad track or park/playground development south of the railroad track.”

Mr. Jemerson was present and reiterated to the Board that the City is not interested in commercial timber.  The City’s only reason for seeking this property is for the River Trail extension and also to settle a Michigan Department of Natural Resources (DNR) trust fund issue in that the City needs to replace riverfront property, located in Old Town that was sold by the City to a developer in 1997.  The Comfort Street property was considered as an acceptable exchange to mitigate the issue.  Because of the terms of the agreement with DNR, there is an obligation for the City to maintain the Comfort Street property as park land in perpetuity, which is the binding nature for not cutting the trees.  Mr. Jemerson told the Board that before the City can acquire any property, at a minimum, a baseline environmental assessment must be performed.

Moved by Commissioner Duncan, seconded by Commissioner Marin, that the resolution be approved.

Action:  Carried unanimously.

 

RESOLVED, That the General Manager be authorized to enter into a contract for utility tree maintenance service with Nelson Tree Service, Inc. for the period January 1, 2002 through December 31, 2004.

(See resolution below, as amended, following discussion.)

Staff Remarks:  The Board has contracted its tree maintenance work with Nelson Tree Service, Inc. (Nelson) since 1993.  During this period, Nelson has:

·             Continued to provide the Board with competitive and lower rates than similar services retained by other Midwest utilities;

·             Met the Board’s expectations for customer relations, quality of work, equipment availability and safety;

·             Gained valuable knowledge of the Board’s service area and tree population;

·             Provided value added services for management of the Board’s tree maintenance program.

The contract establishes fixed pricing for each fiscal year with the Board paying Nelson an hourly rate as authorized.  The fixed pricing was reviewed and is lower than similar services retained by other Midwest utilities.  The estimated cost for the Board’s anticipated tree maintenance program is $1,000,000 per year.

General Manager Pandy noted that through an oversight in communication, the agreement, which expired on December 31, 2001, was extended by staff without bringing it to the Board for concurrence.  Board authorization is being requested to extend the contract through 2004 with a commitment to rebid the program in its entirety in late 2003.  Mr. Pandy noted that when Nelson geared up to serve the BWL, they provided new equipment and vehicles to commit to Lansing to assure system reliability and public safety.  Because Nelson is a national organization, they are readily available with extra crews when conditions warrant additional workers and equipment.

Assistant General Manager Bill Cook stated that proper tree maintenance is critical to system reliability and public safety.  Nelson’s performance, system knowledge, equipment availability, safety record and price competitiveness are the reasons he recommends extending the current contract with Nelson through 2004.  As an alternative, Mr. Cook suggested at the very least, that the Board consider extending the contract through the end of this year to allow time to rebid the contract with a 2003 effective date.  He noted that staff has authorized Nelson to increase their service charge for 2002, which is higher than stated in the contract for 2001.  This arrangement was approved by staff to assist Nelson to address their high employee turnover problem.

The Commissioners expressed concern that it has been nine years since this contract was let out for bids.  They said they were uncomfortable with another three-year extension without asking for competitive bids.  It was the sense of the Board that significant contracts should be bid more frequently to provide assurance that rates are competitive with similar services.

Following lengthy discussion the Commissioners agreed to extend the tree maintenance contract with Nelson through December 31, 2002.  In the meantime, staff was directed to let out bids for tree maintenance services and come back this fall with a recommendation on the best-evaluated bid with a contract effective date of January 2003.

Moved by Commissioner Wonch, seconded by Commissioner Duncan, to approve the following resolution, as amended:

Resolution # 2002-7-6
TREE MAINTENANCE SERVICE CONTRACT (as amended)

RESOLVED, That the General Manager be authorized to enter into a EXTEND THE contract for utility tree maintenance service with Nelson Tree Service, Inc. for the period January 1, 2002 through December 31, 2004 2002.

RESOLVED FURTHER, that staff be directed to proceed with the bidding process for a tree maintenance service contract for board approval this fall and a contract effective date of january 1, 2003.

Action:  Approved by the following vote, as amended:

Yeas:  Callen, Duncan, Haggart, Kelson, Marin, and Wonch –6
Nay:  Commissioner Royal - 1

RESOLVED, That upon meeting the BWL Rules and Regulations for Electric Service and the requirements for Rate 5, the electrical transformer and associated switchgear for the State of Michigan Grand Tower building, located at 235 S. Grand Avenue, be sold to the State of Michigan for $38,931.53.

Staff Remarks:  The State of Michigan has requested that the Grand Tower building, located at 235 S. Grand Avenue, be converted from Rate 4 (wherein BWL owns the transformer and switchgear) to Rate 5 (wherein the customer owns the transformer and switchgear).

This service meets the 100kW minimum billing demand requirements for a Rate 5 customer and upon purchase of the BWL transformer and associated switchgear, will meet the requirements of a primary voltage customer, which is also a condition of Rate 5.

Estimated savings of electric usage charges to the State of Michigan is $21,000 per year.

The $38,931.53 price to the State of Michigan for the BWL transformer and associated switchgear is based on a fair market value, which was determined based on recent purchases of similar equipment.

Moved by Commissioner Wonch, seconded by Commissioner Haggart, that the resolution be approved.

Action:  Approved by the following vote:

Yeas:  Commissioners Callen, Haggart, Kelson, Marin, Royal and Wonch –6
Nays:  None
Abstention:  Commissioner Duncan – 1 (due to her position with the State of Michigan)

RESOLVED, That the Board consider support of “Lansing Works! Keeping GM” in an amount of $5,000 to $10,000, as determined by the Commissioners.

Staff Remarks:  “Lansing Works! Keeping GM” and the Mayor are seeking monies for the Retain GM Fund.  At this time it is intended for the Platinum Project, which represents a sizeable load for the BWL.  General Manager Pandy stated that this support ties in with the Board policy, which allows the BWL to sponsor advertising and to support certain programs without making direct cash contributions.  Due to the sensitivity of this issue, relative to Air Quality Permits for General Motors' facilities at the Lansing Craft Centre and the Platinum Plant in Delta Township, the Board is being asked to consider this request.

Discussion:  Commissioner Callen recused himself from discussion on this issue due to his involvement that has brought him in touch with a number of entities that were involved with this matter relative to the Air Quality Permit at the Lansing Craft Centre.

Commissioner Kelson recused himself from discussion on this issue due to his employment with General Motors.

Commissioner Royal recused herself from discussion on this issue due to her residing in the Westside Neighborhood, which is the neighborhood that has the most problems with air quality issues.  She felt it would be inappropriate for her to vote on this matter.

Moved by Commissioner Haggart, seconded by Commissioner Marin, that the Board consider support of the “Lansing Works! Keeping GM” in an amount of $5,000.

Discussion:  Commissioner Marin noted for the record that while she supports the issues raised by the environmental group, she also supports keeping jobs in Lansing for the families that she works with; and for that reason, she is supporting this motion.

Action:  The motion failed by the following vote:

Yeas:  Commissioner Duncan, Haggart, Marin -3

Nays:  Commissioner Wonch -1

Abstained:  Commissioners Callen, Kelson and Royal –3

 

RESOLVED, that the Board consider supporting the HOPE Scholarship Fund in the amount of $5,000 to $10,000, as determined by the Commissioners.

(See resolution below, as amended, following discussion.)

Staff Remarks:  The City of Lansing, Mayor Hollister and Police Chief Alley, are working to establish a permanent endowment of $2.5 million over 3-5 years, which would support 500 scholarships per year for Lansing School District students who, at grade six, commit to the completion of a high school education.  If they do so, they receive two years of paid tuition to Lansing Community College as a HOPE scholarship recipient.  HOPE is a crime prevention and education initiative in cooperation with the Lansing Police Department, Lansing Community College, Michigan State University, Lansing School District, and City of Lansing in cooperation with local businesses and private citizens.

General Manager Pandy suggested that as an alternative, future Chili Cook-Offs could take on an additional charitable recipient.  Currently all funds go to Adopt A River.  This year the Chili Cook-Off raised more money than is needed to support the program.  BWL has already promised that all funds raised from this year’s Cook-Off go to support Adopt A River.  For future Cook-Offs, proceeds can go to Adopt A River up to the amount necessary to fund the program, estimated from $10,000 to $12,000 per year, with excess proceeds going to a second charity such as the HOPE Scholarship Fund.  This year Chili Cook-Off proceeds were nearly $19,000 and are likely to continue to grow in the future.  This suggestion was offered as an alternative recommendation if the Board would like to link the HOPE Scholarship Fund to the Chili Cook-Off event.

Moved by Commissioner Wonch, seconded by Commissioner Duncan, to approve the following resolution, which includes a friendly amendment:

RESOLVED, that the Board consider supporting the HOPE Scholarship Fund in the amount of $5,000 to $10,000, as determined by the Commissioners for Fiscal Year 2002-03.  This amount will come from the general fund.

RESOLVED FURTHER, That effective with Fiscal Year 2003-04, the profit from the Chili Cook-Off be equally split between Adopt A River and the HOPE Scholarship Fund.

resolved further, that If the split falls short of the $10,000 needed for the hope scholarship fund, the bwl is to supplement the amount needed from the general fund to make up the shortfall.

Discussion:  In response to a question raised by Commissioner Callen regarding cash contributions, Communications Director John Strickler reported that approximately $35,000 to $40,000 in cash contributions are made in the form of a sponsorship of which the BWL receives recognition for taking out program ads.  Individual events are split between three basic categories related to charitable, community or economic development activities.  This total is exclusive of the Lugnuts sponsorship.

Action:  Carried unanimously, as amended.

UNFINISHED BUSINESS

Resale of Long Distance Service.  General Manager Pandy reported that while a formal recommendation was not included in the Board packet, it was reported in his cover letter that staff proposed the consideration of the resale of long distance service at the Finance Committee meeting on May 14, 2002.  At that time the meeting was running late, and the Commissioners expressed concern about entering into the telecommunications field.  Over the past two months, Sue Warren and Dave Bolan of Resource Planning and Product Development have updated the overall telecom business case and are available to answer questions and discuss this business opportunity.  Mr. Pandy noted that the recommendation presented in May considered a dial-up Internet service, however, this option has been dropped.  At this point staff is only suggesting the consideration of a simplified long distance service, which has a single rate schedule at 3.9 cents/minute for calls made intrastate (inside the state of Michigan) and 4.9 cents/minute for interstate (state-to-state). The BWL will receive an 8% commission from Accxx Communications for gross sales.  This pricing structure is a change from the original proposal and is being recommended in order to offer our customers the lowest rates available and simplify the program parameters.  Mr. Pandy requested the Board’s consent to begin discussions with the Lansing City Council about this new venture to obtain their concurrence.  If the City agrees, staff would then ultimately come back to the Board with a formal recommendation to proceed.

Commissioner Wonch expressed her discomfort with the BWL providing long distance services, and being perceived as being similar to other telecom companies that do telemarketing every night at dinner.  Her preference would be for the BWL to continue working hard to provide customer satisfaction and delivering what it does best at competitive rates, while maintaining its good reputation.

Commissioner Royal stated she is uncomfortable with this new venture.  She suggested that the Commissioners should first determine philosophically whether this type of venture is prudent before staff begins any discussions on a proposed telecommunications program with the City.

Commissioner Duncan agreed with the comments of Commissioners Wonch and Royal, and also expressed her concerns about entering into the telecommunications market because it is different from the BWL’s core product.  She acknowledged that staff may feel that this is a good opportunity for our customers, but the question remains whether the BWL is the best company to deliver that type of service.

Commissioner Kelson noted that looking into the mystical crystal ball, it appears the telecom future is moving more in terms of airwave communication such as cellular phones rather than land line communication.

Commissioner Callen stated that he shares the concerns raised by the Commissioners.  He complimented staff for exploring ways to expand into other opportunities.  He noted that he has learned through APPA meetings that other municipal utilities have found excellent expansions.  However, his concern is the fact that the telecommunications industry has come along to uncertainties, and it could be perceived that the BWL is linked with companies that have some real problems.  The image area is very important.

Sue Warren responded to the Commissioners’ concerns.  She pointed out that the program being proposed would include language in the contract with the vendor that there will be absolutely no telemarketing and no sharing of customer lists.  There are all sorts of Federal Communication Commission (FCC) and Michigan Public Service Commission (MPSC) rules regarding telemarketing issues, so the vendor would be expected to abide by those and enforce the stringent ones.  All marketing activities would be done in-house by the BWL.  The program being considered at this time is long distance and not cellular service.  Ms. Warren noted that the trend in the next few years will likely be a lot more long distance carriers becoming local carriers, which will provide more choices in our local carrier industry.  The cellular phone business would be a natural leap in the future if the telecommunications business were approved.  Ms. Warren stated that staff would be more than willing to meet with the Commissioners individually or in small groups to answer any questions.  She noted that there are a lot of public and investor-owned utilities across the nation who are offering different types of products and services to their customers, and telecom is one of the services that seems to be a natural fit for some of them.

OLD BUSINESS

There was no old business.

NEW BUSINESS

Chairman Callen announced that new committee assignments would be made this week and sent out to the Commissioners.

RESOLUTIONS

None

GENERAL MANAGER'S REMARKS

Customer Satisfaction Survey:  General Manager Pandy reported that the recent Customer Satisfaction Survey, conducted in May 2002, indicates the BWL is an above average operating utility on all 13 of the benchmarked comparisons.  However, while the BWL remains in a good overall position relative to the Market Strategies, Inc. (MSI) benchmarking database, positive gaps between the BWL and the benchmarking averages are smaller than observed in the November 2001 study.

Communications Director John Strickler presented an executive overview of the survey findings.  He reported that throughout this period, the BWL remains relatively well positioned in the MSI Benchmarking database, ranking in the top quartile on eight out of the 13 comparable measures, and 10 points or more higher than the benchmarking averages on five measures.  Although some positive gaps between the BWL and the MSI benchmarking average were larger in November, the Board continues to receive higher levels of positive response from its customers compared to other energy utilities.  He noted that positive response to the quality of water from the BWL is down slightly, but remains above May 2001.  A summary of current national energy utility benchmarking comparisons is shown below:

A copy of the full report will be provided to the Commissioners.  The Customer Attitude Survey will be referred to an appropriate committee as designated by the Chair.

Employee Satisfaction Survey.  General Manager Pandy called Acting Director of Human Resources, Mary Dwyer, to present the results of the Employee Satisfaction Survey.  Ms. Dwyer reported that the BWL’s position among employees has declined from last year, with 61 out of 68 item scores decreasing at least one point from 2001.  Only 13 out of the 68 item scores declined significantly compared to 2001.  On the positive side, 60 out of 68 item scores remain significantly higher than in 1999.  The current model shows that three key drivers; namely, Work Environment and Support, Customer Satisfaction, and Senior Management are critical to improving the Employee Satisfaction survey.

• Work Environment and Support to employees is a significant five points lower than in 2001, but remains six points higher than in 1999.  This has a stronger relationship with Employee Satisfaction compared to prior models, indicating that these items deserve further attention.  Feedback, Evaluation and Autonomy all have a large impact on Work Environment and Support.  The survey shows that regular feedback and evaluation is crucial to helping employees feel valued in their workplace and their ability to advance.  Also, giving employees the flexibility and control to do their job effectively are crucial to how motivated they are and their perceptions of their work environment and their managers.  Among Bargaining Unit employees, scores for two items in the Feedback and Evaluation component decreased significantly compared to 2001 on the question of “my immediate manager encourages me to learn from my mistakes (down 7 points) and “I am recognized for good performance” (down 9 points), while the scores among Non-Bargaining Unit employees held steady.  The impact from Teamwork is down four points from 2001.  This is a reminder that BWL needs to find ways to encourage a team-oriented environment and focusing on giving employees the skills to do their work and encouraging a feeling of mutual respect among employees.

• Customer Satisfaction also has a strong impact on employee satisfaction.  Customer Satisfaction has a higher index compared to most of the other model components.  Customer Service Performance is a strong driver of Customer Satisfaction.  Although the scores for the three items within the Customer Service Performance component are relatively high, they have each slipped by two points since 2001, and all of them show room for improvement indicating that it is important for BWL to communicate with employees about efforts to meet customer needs, be customer-focused, and keep commitments to the customers.

• Senior Management Performance has a low index of 45 and a strong impact on Employee Satisfaction.  The strongest impactor of Senior Management Performance is Employee Information Levels.  Those were very low in this particular survey.  Among Bargaining Unit employees, scores for all three items in the Employee Information Levels component decreased significantly compared to 2001, declining from five to seven points.  Senior Management Direction also has a large impact on Senior Management Performance and very low scores on all three measures.  Senior Management continues to try to improve that particular performance.

• Motivation has a relatively weak impact on Employee Satisfaction.  It did drop a significant five points since 2001 and is three points lower than 1999.  It is important for BWL to help employees feel motivated to do their job well.  Motivation is also strongly impacted by Autonomy and Feedback and Evaluation.

• In terms of the Bargaining and Non-Bargaining Unit groups, the Non-Bargaining employees have significantly higher scores than the Bargaining Unit employees on all but four component indexes.  Service Reputation of BWL is three points higher, whereas Workload, Retention, and Core Services are only two points higher for Bargaining versus Non-Bargaining employees.  In terms of the Bargaining and Non-Bargaining model impacts, the same things are important to both Bargaining and Non-Bargaining employees.  For example, Work Environment and Support and Senior Management Performance have strong impacts on Employee Satisfaction in both sub-group models.  Also, Feedback and Evaluation is a very strong driver of Work Environment and Support for both sub-groups.  A few differences include:

o       Immediate Manager has a stronger impact on Senior Management Performance for Non-Bargaining employees than Bargaining employees.

o       Professional Development does not have any impact on Motivation or Immediate Manager for Bargaining employees.  However for Non-Bargaining Unit employees, Professional Development has a strong impact on Motivation and a moderate impact on Immediate Manager.

o        Job Security is somewhat more important to Non-Bargaining employees than Bargaining employees.

o       The impact of Employee Satisfaction to Retention is stronger for Non-Bargaining employees than for Bargaining employees.

Following the presentation, Commissioner Royal expressed her concern that the Employee Satisfaction Survey results have declined as compared to last year.  The Employee Satisfaction Survey was referred to the Human Resources Committee for further discussion.  A copy of the full report will be sent to all the Commissioners.

[Commissioner Royal asked to be excused from the meeting due to a prescheduled commitment.  She was excused at 7:17 p.m.]

General Manager Pandy requested the Board’s permission to communicate the Customer Satisfaction and the Employee Satisfaction results to the employees prior to discussing these in committee.

The Commissioners concurred that it is important to communicate the results of the surveys to the employees as soon as possible.

Wolverine Petroleum Pipe Line.  General Manager Pandy reported that the Michigan Public Service Commission (MPSC) announced on July 23 that the Wolverine Pipe Line Company’s petition for a permit to construct a 12-inch high-pressure petroleum pipeline was approved.  This matter will be considered by the Lansing City Council’s Committee of the Whole on July 25, and then a formal vote on the approval of Wolverine’s application will be taken at Council’s regular meeting on July 29.  Mr. Pandy handed out a copy of a press release issued by the MPSC, which describes the process the MPSC went through.  The BWL and the City Attorney’s Office have been working with Wolverine to identify concerns and to achieve the goal of minimizing the risk to the drinking water through the design, operation and maintenance of the pipe line.  A second document was handed out listing safety standards that Wolverine Pipe Line Company has committed to meeting in all respects, and exceeding in several respects, the requirements imposed by federal standards.

In response to questions raised by the Commissioners, Staff Attorney Larry Wilhite reviewed the slight differences between the elements tentatively agreed upon by Wolverine in a meeting held July 16, 2002 and the final commitments made to the BWL as outlined in the copy handed out to the Board, dated July 23, 2002.  He noted that the last paragraph of the handout was deleted, which pertained to the time line for the City of Lansing to grant all routine permits necessary…no later than August 15, 2002.  Mr. Wilhite also reported that if the Lansing City Council does not approve the pipe line, this matter would probably go to court.

Wellhead Protection Program.  General Manager Pandy reported that BWL continues to be a leader in seeking the closing of abandoned wells that represent a threat to our drinking water aquifer.  A letter was sent to the Michigan Department of Environmental Quality (MDEQ) about funding the wellhead capping program, and the BWL was successful.  The State has reinstituted the Clean Michigan Initiative Abandoned Well Program and has allocated $3,000,000 in their budget for closures of abandoned wells.  Eighty-five wells have been identified in Lansing, and signed waivers of liability for closure on 38 of them have been received.  Another 92 identified wells are scheduled to be closed in surrounding areas, which will be administered by the various townships using their own grant funds.

Water and Electric Demands are Up.  General Manager Pandy congratulated all the employees from the Water and Electric utilities who worked in the intense July heat to deliver record levels of output.  The water system, particularly, has been in the high 30 million gallon/day pumpage.  The BWL has 50 million gallons of capacity.  He noted that on July 17, 39 million gallons were pumped that day.  Mr. Pandy reported that a Water Load Curtailment Plan Task Force has been formed to review water demands and recommend a curtailment plan to manage excessive drought induced demands.  A proposed plan will be brought to the Board at a future date for consideration.  Management wants to have a plan in place for next summer to deal with peak conditions in the event another drought-like summer occurs.  Electric demand reached 552 megawatts (MW), which is the BWL’s second highest, all-time peak, just below the previous record of 556 MW set last year in August.  All the units have been running and the BWL has been assisting other utilities as well during the high demand period.

Nancy Kremsreiter Commended.  General Manager Pandy commended Public Information Analyst Nancy Kremsreiter and Bob Tidd of System Integrity& Customer Projects for their positive response in assisting an educator who was trying to help students learn how much electricity an amusement park would use.  He thanked them for their follow up and response.

Update on Pilot Water Choice Projects in the City of Lansing.  General Manger Pandy reported on the two pilot Water Customer Choice projects approved by the Board on May 28.  The Pentecostal Outreach Church project went well.  The United Van Lines project has been brought to the attention of the City Administration by developer and owner David Nicklesen.  BWL has received intense political pressure to allow Mr. Nicklesen not only “Choice” on his private property, but also to be able to use a contractor in the public right of way for the extension of the 12-inch main to his project.  Mr. Nicklesen has indicated there are other projects to come that will require a sizeable water service.  Mr. Pandy has alerted IBEW Local 352 that this issue is not a BWL management idea, but rather the initiative came from City Hall, and staff is trying to cooperate.  Mr. Pandy noted that the Friendship Baptist Church is also seeking “Customer Choice.”  They are seeking similar treatment as the Pentecostal Outreach Church.

New Commissioner Kelson Welcomed.  General Manager Pandy handed out a copy of Commissioner Kelson’s application for membership on a City Board.  Mr. Pandy welcomed Mr. Kelson to the BWL and noted his broad experience and background will be an important addition to the Board of Commissioners.

Forbes Substation Wins Historic Commission Award.  General Manager Pandy reported that the BWL Forbes Substation constructed in 1937 is a recipient of the Lansing Historic District Commission’s Preservation/Stewardship Award.  He called attention to a story in the June 2002 issue of the BWL PIPELINE, which features the Forbes Substation located in the West Side neighborhood.

Announcements.  General Manager Pandy reported on the following items:

• The 2001 Annual Water Quality Report has been mailed with customer bills.

• The BWL’s new promotion on Surge Sentinel, which is the whole-house surge protection equipment the Board authorized, has also been mailed out to customers.

• The BWL has renewed its efforts on GreenWise energy by contacting all commercial customers to promote the use of environmentally friendly energy power.

COMMISSIONERS’ REMARKS

Update on Water Construction Issues.  Commissioner Marin reported that the Special Committee on Water Construction Issues met with management and union representatives in June and July to discuss ways to resolve water construction concerns associated with the City’s combined sewer overflow project and alleged problems with water line plugging, water system construction and inspection, meter installations, and fire hydrant issues.  The committee is continuing to meet and plans to submit a report to the full Board by this fall.

The 5K Walk/Run Event.  Commissioner Wonch congratulated BWL employee Calvin Jones for organizing a good race at the 5K Walk/Run event on June 22.  She thanked Commissioner Marin for serving as the starter.

APPA National Conference.  Commissioner Marin gave an overview report on the American Public Power Association (APPA) National Conference held June 7-12 in Dallas.  She thanked the BWL for the opportunity to attend the conference.  She encouraged the other Commissioners to take the opportunity to attend the annual conference, which provides educational seminars on broad issues such as governance, citizen participation, human resources, and municipal utility matters.

Commissioner Callen commented that he also attended the annual APPA conference.  He encouraged every Commissioner to attend to the extent that they can get away for it.  He indicated that he observed an excitement amongst people who are both board members and also employees of municipal utilities across the country with all kinds of new and different and innovative ideas.  He found it refreshing and insightful to experience such activity and to return back to the BWL with a diversity of input from across the country.  Commissioner Callen referred to the ten recommendations included in the Board meeting packet, which provides an excellent format on ten key recommendations on approaches to policy direction and management of public power utilities that should be beneficial regardless of the future direction of the electric utility industry.  He noted that a 20-page document exists that provides the basics of these approaches and supported by much more penetrating material contained on a CD.  Each one of these areas will be published on APPA’s web page.  Commissioner Callen said that he has started talking with the General Manager about a retreat for this year.  This document will be provided to all the Commissioners in anticipation of the retreat, which will focus on long-range issues and decisions made at the March 2002 retreat.

The Board and Planning.  General Manager Pandy commented that staff has received the Board’s input and feedback regarding wanting more information and less data.  An attempt has been made with this month’s meeting packet to provide information, both pro and con, about the many issues that are before the Board.  Mr. Pandy asked for the Board’s feedback if staff is moving in either the right or wrong direction.  Staff has learned some things in that process and is trying to be responsive to the Board’s needs.

EXCUSED ABSENCE

None.

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.

No persons spoke.

ADJOURNMENT

On motion by Commissioner Wonch, seconded by Commissioner Haggart, the meeting adjourned at 7:35 p.m.

/s/ Mary E. Sova, Secretary
Filed with Lansing City Clerk
July 26, 2002