MINUTES OF THE
BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
___________________________
___________________________
The Board of Commissioners met in the Boardroom of the Administrative Offices,
1232 Haco Drive, Lansing, Michigan.
|
Present: |
Commissioners Ronald C. Callen, Nancy
W. Duncan, Tim Haggart, Ifield P.
Joseph, Connie Marin, Diane R. Royal, Robin M. Smith and Nancy Wonch |
|
Absent: |
None |
The Secretary declared a quorum present.
Chairperson Royal called the meeting to order at 5:30 p.m.
Motion by Commissioner Callen, seconded by Commissioner Haggart, to approve the minutes of the regular Board meeting held September 23, 2003.
Carried unanimously.
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.
Curt Gates, Business Manager of IBEW Local 352, presented an update on negotiations between Local 352 and the Board of Water and Light from the union point of view. He reported that a mediation date for the management and union negotiating teams has been set for December 8, 2003. Mr. Gates expressed concern with the health care premium sharing proposal for employees and retirees and noted that BWL has always taken care of retires’ health care premiums and pension adjustments. He noted that IBEW Local 352 was chartered in 1903 and is now 100 years old. Mr. Gates stated that the BWL family spirit seems to be a thing of the past, and he emphasized the importance of focusing on people.
Tracy Tolbert of Customer Service stated that she has been employed by BWL since 1980. She said that BWL employees are proud of their work and urged that the union contract reflect the rate of pay they deserve. She stated that in the past, management and the union worked together to maintain a family atmosphere and assured employees received a fair and equitable income. She stated that BWL employees work hard to keep the lights on and to promptly restore power and water services during outages. She noted that Customer Service employees are usually the first point of contact when customers call; consequently, they must be knowledgeable about many aspects of BWL business and operations. She asked that people be the focus during contract negotiations to assure a fair and equitable outcome. She noted that the May 2003 issue of the Board Digest reported that skill family range adjustments for non-bargaining employees would vary between 2% and 5%, and also that individual performance increases would range from 0% to 7.5 percent. Ms. Tolbert asked that this be kept in mind during negotiations.
Michael Stocum of Customer Account Services stated that he has been a BWL employee for almost twenty years. He said that management indicated the proposal it offered to the union was a reflection of proposals put forth by Detroit Edison (DTE) and Consumers Power (CP) to their employees as these two utilities ventured forth and met the challenges and opportunities presented by deregulation. He noted that both DTE and CP gained by the experience, and now they are prepared to deal with the consequences. Mr. Stocum stated that BWL must create a future that looks outward not inward. He stated his belief that BWL missed a money-making opportunity because it was looking inward and focused at making a profit off a lower payroll by reducing the number of employees. Mr. Stocum stated that a positive future cannot be built with the proposal presented because it is a creature of the past and indicative of an attitude that may fatally cripple the BWL. He asked for wisdom, intellect and urged thoughtful consideration of the implications the proposal will have on the BWL.
Gerald Houghtaling, Journeyman Lineworker, and a ten-year BWL employee indicated he has lived in the City of Lansing his entire life except for six years spent in the U. S. Navy. He stated that he considers himself the definition of “Hometown People-Hometown Power.” He expressed disappointment with the progress of contract negotiations. He said BWL employees are the workers customers see in their neighborhoods and streets in all kinds of adverse weather. He noted that lineworkers are on the job repairing downed wires minutes after a storm. He stated that he agrees with General Manager Novick in that the BWL needs to concentrate on rates, reliability and service. He noted that according to a recent customer satisfaction survey, nine out of ten ratepayers consider the BWL the utility of choice. Mr. Houghtaling stated that he believes employee morale is low because management’s proposal is inequitable in the pay and over-time category. He expressed concern over his welfare at the BWL and the welfare of his family.
James Farrington, BWL Lineworker, stated that he is a life-long resident of the City of Lansing and a proud BWL employee. He noted that over the past three years, the BWL hired a consultant to conduct two employee satisfaction surveys of which the findings indicated low employee morale. Mr. Farrington said that he believes employees distrust upper management because management’s actions do not promote the best interests of employees and customers. He stated that it was wrong for management’s negotiating team to tell union employees that they are paid too much and that their benefit package should be slashed. He said that General Manager Novick recently told employees that they are all one team serving the best interest of BWL customers. He noted that the percentage of the July 2003 pay increase to non-bargaining employees was higher than what is being offered to the bargaining employees. He expressed opposition to proposed premium sharing for health care.
Tom Miller, BWL Retiree, expressed concern with the impact the proposed premium sharing for health care will have on his pension. He stated that premium sharing for health care will be a burden for BWL retirees who are on a fixed income.
On behalf of the Board, Chairperson Royal thanked those who came to the meeting to express their views regarding contract negotiations. She noted that the Board has heard from both management and the union, and each team raised valid points. She said that collective bargaining is often a difficult process. She stated that in an ideal situation, each party comes to the table with their best wish list; both sides must give and take, and eventually reach a mutually acceptable contract agreement. Commissioner Royal noted that the management and union negotiating teams have agreed to non-binding mediation scheduled to begin December 8th. During mediation, both teams will have an opportunity to step back and reassess where they stand and hopefully move forward. She announced that this is an inappropriate time for the Commissioners to intervene and that the Board has faith in both the union and management and the overall negotiating process. She urged both teams to continue with contract talks through the bargaining process and said she is hopeful that these difficult issues will be resolved with a fair and equitable agreement.
Linemen Rodeo Participants Honored. Vice President of Operations Bill Cook
introduced the BWL employees who competed in the 20th Linemen’s
Rodeo in Kansas City. The journeymen
participants were James Chandler, James Farrington and Ron Davis. The apprentice participants were Tom Bayle
and Russ Marion. Mr. Cook noted that
there were approximately 240 teams and 240 apprentices participated in the rodeo. BWL teams and apprentices represented the
BWL very well.
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE REPORT
(Resolution 2003-11-1)
Present: Commissioners Callen, Duncan, Joseph, Marin,
and Wonch.
Excused
Absences: Commissioners Haggart, Royal,
and Wonch.
The Committee of the Whole met on October 14, 2003 at 5:30 p.m. to discuss the following issues:
1. Board of Water and Light’s (BWL) Communications Program
2. General Manager’s Fiscal Year 2003-04 Objectives
I. Communications Program
Communications Director John Strickler presented an overview of the BWL’s communications strategy, expenditures and benchmark results against other utilities. He reported that the program supports the BWL’s vision of being the only utility customers will accept. The program’s primary objective is to build and support the BWL’s brand identity as Lansing’s hometown utility. Secondary objectives are to help management achieve corporate goals, keep customers and employees informed about issues and developments that affect the utility and to promote new products and services.
Four major program components and their spending levels were summarized.
Chili Cook-Off: To promote downtown Lansing and its riverfront area.
Silver Bells in the City: Kicks off the holiday season and attracts between 60,000 and 80,000 visitors to downtown Lansing.
Lansing Lugnuts: A corporate sponsorship with the Lansing Class A Minor League baseball team.
Staff reported that a recommendation for a new three-year outside service contract to provide communications, marketing, advertising and public relations services would be brought to the Board at the November 25th meeting. The process used in selecting the top firm from the four agencies that submitted proposals was thoroughly reviewed.
Following discussion, the Commissioners concurred with the communication strategy and agreed to consider a resolution for awarding a contract for communications marketing, advertising and public relations services at the November Board meeting.
Respectfully submitted,
Nancy Duncan, Chair Pro Tem
Committee of the Whole
Motion by Commissioner Duncan, seconded by Commissioner Haggart, to approve the report as presented.
Action: Carried unanimously.
FINANCE COMMITTEE REPORT
(Resolution 2003-11-2)
Present: Committee Members Callen, Duncan, Joseph,
and Smith.
The Finance Committee met on October 28, 2003 at 5:30 p.m. to review and discuss the following issues:
1.
External Auditor’s Report of the Board of Water and Light
(BWL) Enterprise Fund
2. Wyandotte’s Request for Membership to the Michigan Public Power Agency (MPPA)
3. MPPA Power Pool Agreement Amendment
4. Coal and Rail Strategy
5. Nixon Farms Development
6. BWL Property Disposal Policy
I. Annual Audit Review BWL
Enterprise Fund
External Auditors Larry Cooley, Frank Audia, Tricia Walhorn from Plante & Moran presented the results of the audit for fiscal year ended June 30, 2003 for the Board of Water and Light (BWL) Enterprise Fund. The auditors discussed their responsibility under generally accepted auditing standards. As a result of the change in the application of SFAS No. 71, the auditors reviewed extraordinary items not recorded in revenue and those recorded as expenditures. They gave a presentation that included a three-year comparison of operating revenue, operating expenses, and operating income or loss. A comparative analysis was also presented on the bond debt service requirements, kilowatt hours generated versus purchased, and significant fuel costs. The auditors reviewed their Management Letter comments and responded to questions. General Manager Novick noted that responses to the Management Letter are being prepared for review with the Commissioners at a later time.
[Commissioner Joseph arrived at 6:04 p.m.]
The Committee met privately with the external auditors without staff present as has been customarily done over the past years. To meet filing requirements with the City, a copy of the fiscal year 2003 audit report of the BWL Enterprise Fund has been filed with the Lansing City Clerk. Copies have also been provided to the Lansing City Council and the Mayor. The Finance Committee recommends the following resolution:
Resolution
Authorizing the Filing of the
BWL Enterprise Fund Audit Report with the State Treasurer
(Resolution 2003-11-3)
RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2003 audit report of the Board of Water and Light Enterprise Fund and the report on auditing procedures with the State Treasurer as required by the Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended).
II. Wyandotte
Request for MPPA Membership
Vice President of Operations Bill Cook reported that the City of Wyandotte has requested membership in the Michigan Public Power Agency (MPPA). The process for becoming a new member requires amendments to the MPPA Articles of Incorporation to be adopted by the governing body of each member and published and filed in the same manner as the original Articles of Incorporation. The amendments were reviewed and the Finance Committee concurred with the membership process. A resolution approving amendments to the Fourth Amended Articles of Incorporation of Michigan Public Power Agency will be submitted to the Board for approval at the November 25th meeting.
III. Amendment
to MPPA Power Pool Agreement
Vice President of Operations Bill Cook gave a brief presentation that included a historical overview of the original Michigan Public Power Agency (MPPA) Power Pool Agreement written back in 1989 and early 1990, which was prior to the actual startup of the Power Pool in mid-1992. An amendment under development is being proposed primarily to update the Agreement to bring it into conformance with present Power Pool operations and billing procedures. The present operations reflect changes that were made since the inception of the Pool as a result of unforeseen circumstances to correct procedures that did not work as expected and to reflect changes in the electric industry. Changes in power costs, charges or revenues from present procedures should only improve the situation for the BWL. Once the MPPA Project Committee approves the amendment, it will be forwarded to each member city for individual technical and legal review and, ultimately Board approvals. Each member Board must approve the amendment. Staff anticipates bringing this forward for Board consideration when appropriate.
IV. Coal
and Rail Strategy
Fuel Procurement Manager Ron Ishimoto reported on the BWL’s coal and rail strategy. He noted that existing BWL contracts for rail cars, coal, and destination rail transportation are due to expire on December 31, 2003. He gave a historical overview of the Board’s decision to convert the Eckert and Erickson Stations to burn Western coal to lower generation costs, meet environmental requirements for sulfur dioxide (SO2), and meet future competition. Burning Western coal safely and efficiently required extensive modifications to the BWL generating plants. He presented a comparative analysis that showed that leasing rail cars versus direct purchase offers significant economic and operational advantages. Leasing also ensures availability of cars for timely delivery of coal. The bid process for the rail cars, coal supply, and origin rail carriers was reviewed in detail. The benefits and disadvantages for having one coal source were discussed and a comparison of fuel cost was presented. Following the presentation and discussion, the Committee concurred with staff’s proposal. Staff will submit resolutions for coal and rail contracts for Board consideration at the November 25th meeting.
IV. Nixon
Farms Development
Doug Wood, Manager of System Integrity and Customer Projects, reported on a potential electric service project in Delta Township called Nixon Farms, also known as Grand Ledge Investment Group, LLC (GLIC). The development is a mix of retail, apartments, manufactured housing, and single-family housing surrounding 150 acres at the corner of Saginaw Highway and Nixon Road. Mr. Wood reviewed the history of the project since 2002 involving previous negotiations with BWL, however the developer declined the initial offer. The developer has since contacted the BWL to discuss several alternatives, which has led to a conceptual agreement. The essence of the proposal is that the BWL will provide the electric infrastructure with a capped dollar amount to serve the development for which in return the developer will guarantee payback of the BWL investment within 15 years through an irrevocable bank letter of credit. Mr. Wood outlined the provisions of the current proposal and project economics. General Manager Novick noted that the irrevocable bank letter of credit from the developer is a critical component in making this agreement work. In addition to the provisions presented, the conceptual agreement is contingent upon the following parameters:
BWL must be able to build the infrastructure (secure governmental permits and telephone poles)
Necessary easements must be obtained
BWL funding availability
BWL Board approval
The Finance Committee is satisfied with the conceptual agreement. At such time that management is ready to move to the next level with the project, the Committee requests that additional analysis detailing the growth potential and projected revenue assumptions be provided for review.
V. BWL
Real Property Disposal Policy
General Manager Novick reported that the BWL currently has no policy for the disposition of real property that is no longer needed for the continued operation of the BWL. The present procedure involves a negotiated sales agreement and approval by the Board of Commissioners and Lansing City Council. He discussed a recent request to purchase or lease a portion or all of the BWL’s East Lansing substation property. A developer has expressed an interest in purchasing the entire property and contributing financially toward an early retirement of the substation. Mr. Novick noted that although historically the BWL has not actively solicited buyers for its properties, this case raises a policy question that warrants further consideration. He questioned whether the Board may want to solicit proposals for the purchase of the substation property or if the Board may have other considerations. Following discussion, the Committee requested to have staff draft a policy on the disposition of real property addressing various issues and alternatives in addition to financial and political implications for Board consideration.
There being no further business, the meeting was adjourned at 8:05 p.m.
Respectfully submitted,
Nancy Duncan, Chair
Finance Committee
Motion by Commissioner Duncan, seconded by Commissioner Marin, to approve the report as presented.
Action: Carried unanimously.
Motion by Commissioner Duncan, seconded by Commissioner Wonch, to approve Resolution 2003-11-3 regarding filing the BWL Enterprise Fund Audit Report with the State Treasurer.
Action: Carried unanimously.
(Resolution
2003-11-4)
Present: Commissioners Haggart, Marin, Royal (by speakerphone), and Wonch.
The
Human Resources Committee met on November 18, 2003 at 12 noon to receive
reports on the following items:
1. Update on Union Negotiations
2. Overview of Pension Plans and Policies
3. Pension Plan Financials
Acting Human Resources Director Mary Dwyer reported that the management and union negotiating teams have not reached agreement on a new contract. The Agreement between BWL and IBEW, Local 352, expired October 31, 2003. Ms. Dwyer reviewed the bargaining process and indicated that both sides have agreed to initiate non-binding mediation to encourage voluntary settlement by the parties. The tentative date for the mediation is set for either December 8th or 9th. All information and records obtained in conducting mediation will be kept confidential. If a mediated resolution is not reached, either side can suggest an impartial fact finder to investigate and gather factual information and secure relevant argument with a view to a fair and expeditious process to determine a statement of disputed issues and make a private or public recommendation to both sides. If resolution is still not reached within sixty days after fact finding, the Board has the right to implement a contract. The Committee and staff engaged in general discussion concerning bargaining goals.
Chief Financial Officer Dana Tousley presented a brief overview of the current status and future direction of the Defined Benefit Pension Plan, the Defined Contribution Pension Plan and the Retirement Benefit Plan. Mr. Tousley called attention to the three primary documents for each plan that are related to the administration of the plan; namely, (1) the Plan document defines the benefits provided by the plan and eligibility, (2) the Trust Agreement establishes a separate trust fund to hold monies related to the plan, names the trustees and others involved in the trust and defines the duties and responsibilities of each party, and (3) the Investment Policy establishes the funding policy for each trust and defines specific investment goals and criteria for investing the monies in the trust fund.
The following key points from each of the FY 2003 pension reports were highlighted and discussed:
A ten-year statistical summary and selected graphical data for each of the plans was also reviewed.
Moved by Commissioner Wonch, seconded by Commissioner Marin, the Committee unanimously approved to have the following resolution submitted to the Pension Fund Trustees:
Resolution
Authorizing the Filing of the
BWL Pension Reports with the State Treasurer
(Resolution 2003-11-5)
RESOLVED, That the Corporate Secretary receive and place on file the Defined Benefit, Defined Contribution, and Retiree Benefit Pension reports presented. The following reports were reviewed and discussed at the meeting:
RESOLVED
FURTHER, That the Corporate Secretary is hereby directed to file copies of the
FY 2003 audit reports of the Board of Water and Light Defined Benefit Pension
Plan, Defined Contribution Pension Plan and Retiree Benefit Plan (VEBA), and
the reports on auditing procedures with the State Treasurer as required by the
Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended).
Defined Contribution Pension Plan Amendment to
Delineate Minimum Distribution Requirements
Mr. Tousley noted that the Board will need to approve an amendment to the Defined Contribution Pension Plan to comply with IRS Code Section 401(a)(9) setting forth new rules regarding required age 70-1/2 minimum distributions from qualified plans. He noted that such plans and annuities must be amended by the end of the plan year beginning in 2003 to comply with these rules. A letter prepared by Foster, Swift, Collins & Smith with background information and a proposed resolution was handed out for review.
Motion by Commissioner Wonch, seconded by Commissioner Marin, the Committee unanimously approved to forward the letter from Foster, Swift, Collins & Smith concerning the Defined Contribution Pension Plan amendment to the General Manager for placement on the agenda for Board consideration at the regular meeting of November 25, 2003.
Chief Financial Officer Tousley submitted a memo with a chronology of periodic pension adjustments approved for Defined Benefit pensioners since 1964. He noted that the next review date to consider pension increases is January 2004 based on past discussions with the union. Following discussion, the Committee concurred that this item should be held in suspense until such time that management and the union reach a settlement on a new agreement at which time the total budget impact of the union contract will be known. This will assist in determining whether a pension adjustment might be appropriate.
General Manager Novick asked the Committee if it would be appropriate to have employment contracts for Director of Metrics and Audits Kellie Willson and Corporate Secretary Mary Sova that would specify the terms between the Board and these Board-appointed positions. Mr. Novick indicated that Ms Willson and Ms. Sova have an implied contract that is not clearly defined to both the Board the Board staff positions. Following discussion, the Committee agreed that this issue is something for the Committee of the Whole to discuss.
There
being no further business, the meeting was adjourned at 1:30 p.m.
Respectfully submitted,
Tim Haggart, Chair
Human Resources
Committee
Motion by Commissioner Haggart, seconded by Commissioner Smith, to approve the report as presented.
Action: Carried unanimously.
Motion by Commissioner Haggart, seconded by Commissioner Smith, to approve Resolution 2003-11-5 regarding filing the BWL pension reports with the State Treasurer.
Action: Carried unanimously.
MANAGER’S RECOMMENDATIONS
Background materials on items presented are on file in the Office of
the Corporate Secretary.
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COMMUNICATIONS
MARKETING, ADVERTISING, AND PUBLIC RELATIONS SERVICES |
RESOLVED, That staff be authorized to negotiate a three-year contract with Pace
& Partners for providing communications marketing, advertising, and public
relations services.
FURTHER RESOLVED, That staff is authorized to contract with Foresight Group for producing the BWL’s 2003 annual report, with an option to renew the agreement for two additional years.
Staff Remarks: A panel of five evaluators judged Pace & Partners as the most qualified of four local agencies that submitted proposals. Services provided under the agreement will include the following:
Pace & Partners has provided these services to the BWL for several years. Although it was evaluated as the most qualified among agencies that submitted proposals, staff agrees there are advantages to inviting additional agencies to provide services to the BWL. Staff, therefore, recommends that Foresight Group be engaged to produce this year’s annual report with an option to provide this service for two additional years. Foresight Group was the second most qualified firm as judged by the evaluation panel.
Motion by Commissioner Duncan, seconded by Commissioner Wonch, to approve the resolution.
Discussion: Commissioner Smith expressed concern with moving the annual report to a firm other than Pace and Partners. She questioned the validity of having the annual report moved to another firm, as it was the one piece of the advertising budget that has shown to have great value based on the awards it received. Commissioners Callen and Smith asked for follow-up material requested from Communications Director John Strickler at the October 14th Committee of the Whole meeting. Commissioners Callen and Smith agreed to follow-up with Mr. Strickler regarding the information requested.
Action: The motion passed by the following vote:
Yeas: Commissioners Callen, Duncan, Haggart, Joseph, Marin, Royal,
Wonch - 7
Nays: Commissioner Smith - 1
|
RESOLVED, That the Board of Water and
Light enter into a Coal Supply Agreement (Agreement) with Arch Coal Sales for
the supply of Western Powder River Basin (PRB) coal subject to approval as to
form by BWL’s Legal Counsel. The
Agreement particulars are as follows:
|
Size |
2” x 0” |
|
Moisture |
27.30% |
|
Ash |
5.10% |
|
SO2 |
0.75
lb/MMbtu |
|
Btu/lb |
8,800 |
Motion by Commissioner Joseph, seconded by Commissioner Duncan, to approve the resolution.
Action: Carried unanimously.
RESOLVED, That the Board of Water and Light (BWL) enter into a Lease Agreement (Agreement) with General Electric Railcar Services Corporation (GERSC) of Chicago, IL, a unit of General Electric Capital Corporation, for the supply of rail cars. The Agreement particulars are as follows:
Motion by Commissioner Duncan, seconded by Commissioner Wonch, to approve the resolution. Discussion: Commissioner Callen clarified for those in the audience that the items listed in the Manager’s Recommendations have all been discussed in great detail at committee meetings. General Manager Novick expressed his appreciation to the Commissioners for their preparation and thoroughness at the committee level.
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RESOLUTION APPROVING AMENDMENTS TO FOURTH AMENDED
ARTICLES OF INCORPORATION OF MICHIGAN PUBLIC POWER AGENCY
WHEREAS, this body has heretofore adopted resolutions approving the Third Amended Articles of Incorporation of the Michigan Public Power Agency (the "Agency"), and the Fourth Amended Articles of Incorporation of the Agency, which resolutions provide for the membership of this City in the Agency; and
WHEREAS, the City of Wyandotte has adopted a resolution electing to become a member of the Agency; and
WHEREAS, it is necessary to amend the Fourth Amended Articles of Incorporation of the Agency (the "Articles") in order to provide for the membership of the City of Wyandotte in the Agency.
NOW, THEREFORE, BE IT RESOLVED as follows:
1. The City of Lansing Board of Water and Light hereby consents to the participation of the City of Wyandotte as a member in the Michigan Public Power Agency.
2. The City of Lansing Board of Water and Light hereby approves the following amendments to the Fourth Amended Articles of Incorporation of the Michigan Public Power Agency.
(a) The title of the Articles is hereby amended to read as follows: "Fifth Amended Articles of Incorporation of Michigan Public Power Agency."
(b) Section 2 under Article II of the Articles is amended to add the City of Wyandotte and delete certain members who have since withdrawn, and will now provide as follows:
Section 2. The members of this Agency are the Cities of Bay City, Charlevoix, Grand Haven, Harbor Springs, Hart, Holland, Lansing, Lowell, Petoskey, Portland, Traverse City, Wyandotte and Zeeland, and the Village of Chelsea, all municipal corporations of the State of Michigan operating municipal electric utility systems as of the effective date of Act 448.
(c) Section 1 under Article VI is amended to insert the following to the end of the Section:
The News Herald, in and for the City of Wyandotte.
(d) The clarifying amendments contained in the Fifth Amended Articles of Incorporation of Michigan Public Power Agency submitted to the City of Lansing Board of Water and Light and attached to this resolution are hereby adopted.
3. This resolution shall be printed once in the Lansing State Journal, a newspaper generally circulating in the area of the City of Lansing. The amendments approved by this resolution shall become effective and in full force and effect immediately upon the publication of this resolution and the filing of this resolution in accordance with the applicable provisions of Act 448 of the Michigan Public Acts of 1976.
Staff Remarks: The City of Wyandotte has requested
membership in the Michigan Public Power Agency (MPPA). The process for becoming a new member
requires amendments of the MPPA Articles of Incorporation to be adopted by the
governing body of each member and published and filed in the same manner as the
original Articles of Incorporation. The
BWL’s process to implement Wyandotte’s membership was reviewed with the Finance
Committee on October 28, 2003.
For the BWL this process requires:
§
Adoption of the foregoing
resolution by the BWL Board of Commissioners.
§
Certification of the
Resolution and Articles.
§
Publication of the Resolution
in the Lansing State Journal. The BWL will be reimbursed for any
publication costs by MPPA.
§
Filing of the resolution with
the Ingham and Eaton county clerks.
Motion made by Commissioner Duncan, seconded by Commissioner Marin, to approve the resolution.
Action: Carried unanimously.
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RESOLVED, That the Code
Section 401(a)(9) Minimum Distribution Amendment to the BWL Employees’ Defined
Contribution Pension Plan, appended to these minutes (Exhibit A), is hereby
adopted effective January 1, 2003; and
FURTHER
RESOLVED, That the Chair of the Board of Commissioners and the Corporate
Secretary are hereby authorized to execute the Amendment and any other
documents necessary to implement the foregoing resolution.
Motion made by Commissioner Wonch, seconded by Commissioner Smith, to approve the resolution.
Staff Remarks: This is the third “technical” amendment to the DC Plan that does not change any participant’s benefit, but keeps the plan documents compliant with IRS pension regulations. The amendment must be adopted before December 31, 2003. A letter from Steve Jurmu of Foster, Swift, Collins & Smith was submitted explaining the changes to the plan. Chief Financial Officer Dana Tousley noted that the IRS has changed the regulations about minimum distribution from DC pension plans. The amendment simply complies with the law and IRS regulations stating the minimum distribution required. Plan participants and spouses can take whatever their benefit plan allows; the beneficiary, however, has to take the money out within a certain time period and in a certain way, and the regulations define the manner in which this can be done.
Action: Carried unanimously.
|
In accordance with the Board’s Rules of Administrative Procedure, a schedule of
dates, places and times for each regular meeting of the Board for the calendar
year shall be adopted by the Board in November.
RESOLVED, That regular meetings of the Board of Commissioners are hereby set for calendar year 2004 as follows, unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings:
2004
|
Tuesday |
January 27
|
|
Tuesday |
March 23 |
|
Tuesday |
May 25 |
|
Tuesday |
July 27 |
|
Tuesday |
September 28 |
|
Tuesday |
November 23 |
Meetings will be held in the Board Room located in the Board of Water and Light Customer Service Center, 1232 Haco Drive, Lansing, at 5:30 p.m.
RESOLVED FURTHER, That a notice of the meeting schedule be published in the Lansing State Journal the week of January 4, 2004.
Discussion: Commissioner Joseph asked about moving the Board meetings to an evening other than Tuesdays during the summer months. Commissioner Smith questioned whether every other month is sufficient for holding Board meetings. Commissioner Wonch noted that due to her teaching schedule she has a conflict on Tuesdays for Board meetings held in January and March. Following discussion, it was agreed that regular meetings can be rescheduled and special meetings can be added if necessary.
Motion by Commissioner Duncan, seconded by Commissioner Marin, to amend the 2004 meeting schedule by moving the January and March meetings to the fourth Thursday as follows:
2004 as Amended
|
|
January
|
|
|
March |
|
Tuesday |
May 25 |
|
Tuesday |
July 27 |
|
Tuesday |
September 28 |
|
Tuesday |
November 23 |
Meetings will be held in the Board Room located in the Board of Water and Light Customer Service Center, 1232 Haco Drive, Lansing, at 5:30 p.m.
Motion made by Commissioner Duncan, seconded by Commissioner Marin, to approve the regular meeting schedule as amended.
Action: Carried unanimously.
UNFINISHED BUSINESS
The Board heard a presentation from IBEW local 352 BWL employees Curt Gates, Jim Dravenstatt-Moceri, Joe Davis, Luis Flores and Pat Martin advocating the use of BWL inspectors on combined sewer overflow (CSO) projects. They reported that currently the BWL shares the cost of inspectors with the City’s Public Service Department when a CSO project also involves disruption of water mains. They presented a detailed case with exhibits to support their argument that the use of BWL inspectors would ensure better quality work and more focused customer service. Following lengthy discussion regarding the types of problems encountered and their impact to customers, the BWL and the City, General Manger Novick told the Commissioners that the CSO is a large project that poses challenges that go beyond the inspection process. He said that he plans to hire a degreed engineer dedicated totally to devising overall responses to reliability and service issues posed by the CSO project, including the issue of inspections.
The union suggested forming a task force comprised of several Commissioners with union and management representation. Due to the priority of the CSO project and the inspection issue, the Board directed the General Manager to develop a strategy to address the issues raised for Board action no later than May 2004. The Commissioners requested a periodic progress report on efforts underway to resolve concerns discussed.
Chairperson Royal thanked the IBEW Local 352 team for their presentation and noted that they raised some valid concerns that will be addressed in an expedient manner.
GENERAL MANAGER’S REMARKS
Dana Tousley Retiring Effective January 2, 2004. General Manager Novick announced the retirement of Chief Financial Officer Dana Tousley effective January 2, 2004. He expressed his appreciation on his long service to the BWL.
Dennis McFarland is New Senior Vice President of Finance and Administration. Dennis McFarland, the BWL’s new Senior Vice President of Finance and Administration was introduced. Mr. McFarland will replace Chief Financial Officer Dana Tousley when he retires. He will assume responsibility for Financial Services, Information Technology, and Materials and Services Management. Mr. McFarland stated that it has been very enjoyable meeting employees at the BWL. He expressed appreciation for the welcome he has received and assistance provided by Dana Tousley, Bill Cook and General Manager Novick over the past few weeks. The Commissioners extended a welcome to Mr. McFarland.
United Way Exceeds Goal. General Manager Novick thanked BWL employees for their participation in this year’s United Way campaign. He acknowledged the outstanding work of BWL United Way co-chairs Calvin Jones and Jim Dravenstatt-Moceri and staff support provided by Mark Dykema and Jan Simpson. Mr. Novick invited Calvin Jones and Jim Dravenstatt-Moceri to report on campaign results.
Calvin Jones announced that the BWL exceeded the campaign goal of $95,000.00, which was 5% more than last year. He commended BWL employees for their generosity. Employees and retirees contributed a total $96,624. The Capital Area United Way netted $6.3 million for this year’s campaign. Jim Dravenstatt-Moceri stated that it was an honor to participate in the United Way team and noted that he and Calvin Jones would like to volunteer to chair the 2004 campaign. They hope to raise $100,000 next year. They thanked committee members Mark Dykema and Jan Simpson and the 20 volunteer department representatives who provided staff support.
BWL 2002 Annual Report Takes Top Honors. Communications Director John Strickler reported that he attended the American Public Power Association (APPA) Customer Connections Workshop in Savannah, Georgia and accepted an award of excellence for the BWL’s 2002 annual report. The annual report was the top award given in its size group. The BWL was one of ten public power utilities in five size categories honored.
New Lobbyist Firm Selected. General Manager Novick reported that the Lansing firm of Muchmore, Harrington, Smalley and Associates has been selected to perform professional lobbying services for the BWL. The agreement is for one year and is subject to renewal on a year-by-year basis. The company was chosen from among six firms who submitted sealed proposals for the work. The firm will work with BWL Commissioners and staff to develop and implement the BWL’s government relations objectives and will track state legislation that affects the utility.
Update on Triangular Property Project. General Manager Novick updated the Board on the status of the Triangle property proposal. The Triangle property project is located at the corner of Kalamazoo Street and Grand Avenue where a proposed state office complex was targeted. State officials put that project on hold in September 2002 after concerns about whether the State could afford the project at a time it faces severe budget problems. The property was originally proposed to be developed as residential. As a condition to selling the Triangle property, the City required the developer to build a residential development elsewhere in the downtown area. The BWL owns property north of Ottawa Station. The parcel is located at the southeast corner of Shiawassee Street and Grand Avenue and linked to the Triangle property, which was to be sold to the developer to construct residential units on that land. Mr. Novick stated that there are interlocking agreements between the BWL, the developer and the City as approved by the Board and City Council. Any changes ultimately made to the original agreement would be subject to Board and City Council approval. Mr. Novick noted that at this point, the BWL has received nothing in writing from the City requesting that the arrangement be renegotiated. He stated that if and when the BWL is presented with a new proposal from the City or developer, it will be brought to the Board for review and consideration.
Year-to-Date Operating Results Reviewed. Senior Vice President of Finance and Administration Dennis McFarland gave a brief update on year-to-date operating results and budget comparison for August 2003.
COMMISSIONERS’ COMMENTS
Commissioner Duncan stated that Silver Bells this year was a wonderful event. She thanked BWL employees for the role they played in this festive event. She also congratulated Chief Financial Officer Dana Tousley on his retirement and thanked him for his years of service at the BWL and wished him all the best in the future.
Commissioner Smith thanked BWL employees for their presence at the meeting this evening and for taking time to convey their concerns with respect to collective bargaining. She expressed her appreciation to those present for their dedication and hard work in serving BWL customers.
Commissioner Wonch also congratulated Chief Financial Officer Dana Tousley on his retirement. She thanked the union employees who came to the Board meeting to state their concerns over contract negotiations.
Commissioner Marin also thanked the employees for coming to the Board meeting to share their concerns on union/management negotiations. She expressed appreciation to the union employees for their excellent presentation on CSO project issues.
EXCUSED ABSENCE
There were no absences.
PUBLIC COMMENTS
Lansing City Council President Carol Wood, briefed the Board on the City’s plan with regard to the Capitol Loop Reconstruction project that includes sewer separation, roadway enhancement and water main work on parts of Ottawa, Allegan, Pine and Walnut Streets and Capitol Avenue between Ottawa and Allegan. She reported that City Council has been talking with downtown merchants about the project in response to their concern with the impact this project will have on their businesses. Councilmember Wood announced that a revised plan for the Capitol Loop project is being considered by City Council. The revised plans include work starting at Capitol at Ottawa to Martin Luther King in 2004 and from Capitol at Allegan to Martin Luther King. When work is being done on Walnut Street, Pine Street will be open and vice-versa. She noted that there would be no work done on Michigan Avenue in the downtown area. She handed out a map depicting the site of the original Capitol Loop Reconstruction project and the revised construction plan. A second map was handed out depicting a conceptual plan for the various phases of the CSO Sewer Separation project between 2004 and 2020 in the downtown area. Councilmember Wood stated that she is hopeful there will be a BWL representative serving on a task force being formed by the Mayor to oversee these projects. She noted that to date the City has spent approximately $15 million with Tetra Tech; and indicated that if BWL inspectors were used for some of the CSO projects, there would have been significant savings for both the City and BWL.
BWL retiree Tom Miller stated that after listening to discussion regarding the CSO project, it appears there are ways some projects could be accomplished more efficiently. He said that if work is done more efficiently, money could be better spent for the benefit of everybody.
Moved by Commissioner Duncan, seconded by Commissioner Joseph, that the Board convene in closed session to meet with outside counsel to discuss pending litigation (7:53 p.m.).
Action: Adopted by roll call vote:
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Yeas: |
Commissioners Callen, Duncan, Haggart, Joseph, Smith, Marin, Royal and Wonch |
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Nays: |
None |
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Abstentions: |
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Absent: |
None |
OPEN SESSION
The Board returned to open session at 8:30 p.m.
No action was taken as the result of the closed session.
ADJOURNMENT
On motion by Commissioner Wonch, seconded by Commissioner Marin, the meeting adjourned at 8:31 p.m.
/s/ Mary E. Sova, Secretary
Filed with Lansing City Clerk
December 29, 2003