Final –Approved January 26, 2006
MINUTES OF THE
BOARD OF COMMISSIONERS' RESCHEDULED 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 Gary
Calkins, Ron Callen, Joseph Graves, Jr., Ifield Joseph, Santiago Rios, Robin
Smith, and Nancy Wonch. |
|
Absent: |
Commissioner Tim
Haggart. |
The Secretary declared a quorum present.
Chairperson Smith called the meeting to order at 5:40 p.m.
Motion by Commissioner Haggart, seconded by Commissioner Calkins, to approve the minutes of the regular meeting held September 27, 2005 and special meeting held October 11, 2005.
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.
No persons spoke.
COMMUNICATIONS
A thank you note was received from
the family of former BWL Commissioner Diane Royal in appreciation for the Board
of Water and Light’s kind of expression of sympathy.
Chair Smith invited the family of
the late Diane Royal to the podium for a presentation. Commissioner Callen read the Memorial
Tribute to Diane Royal, adopted by the Board on October 11, 2005. Elaine and Renee VanTichelt, sister and
niece, respectively, accepted the resolution on behalf of the Royal family.
Chair Smith invited BWL employees
Rosemary Sullivan and Shelley Wells to the podium to present the Board with a
certificate of appreciation from the American Cancer Society. It was noted that Karen Seefeldt also served
with Ms. Sullivan and Ms. Wells as one of three BWL team co-chairs for the Strides
Against Breast Cancer Walk in Lansing held October 15, 2005. Approximately fifty walkers participated in
the BWL team raising $3,964.00, which more than doubled last year’s total.
Chair Smith thanked and
congratulated the “Strides” walkers on behalf of the Board.
COMMITTEE REPORTS
Resolution 2005-11-1
COMMITTEE OF THE WHOLE
The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 5:45 p.m., Tuesday, October 11, 2005.
Chair Pro Tem Joseph Graves, Jr. called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Ron Callen, Gary Calkins, Joseph Graves, Jr., Santiago Rios, Robin Smith, and Nancy Wonch. Commissioners Tim Haggart and Ifield Joseph were absent.
Public Comment
There were no public comments.
CUSTOMER
ATTITUDE SURVEY
Dr. Andrew Morrison of Market Strategies, Inc. (MSI) presented an overview of the 2005 findings of the annual BWL residential customer satisfaction and performance survey. A summary report is on file with these minutes.
Dr. Morrison reported that the 2005 survey was similar to the 2004 survey, but is a shorter version of prior annual surveys with the following objectives:
· Provide trending information for a core subset of outcome and performance measures
· Benchmark performance against other utilities, including a water utility benchmarking component
· Determine the effect of the issue of lead in area drinking water and July rate increases on customer opinion of the BWL
· Provide the BWL with planning information for future activities based on current results, benchmarking comparisons, and verbatim customer comments
He discussed the methodology used, which involved a total of 555 interviews conducted by telephone among residential electric and water customers of the BWL. Interviewing took place from June 16 to July 3, 2005. The sample selected represented the actual distribution of customer households across the BWL service area.
He compared the BWL’s performance on electric measures to the MSI energy utility benchmarking database, and compared the BWL’s performance on water measures to five additional water utilities. The data was weighted to reflect actual customer-type distribution by electric only, electric and water, and water only. In the residential benchmarking, comparisons were made to over 80 electric and natural gas operating utilities. In addition, 100 interviews were conducted for each of five other water utilities:
· East Lansing/Meridian Water and Sewer Authority
· City of Jackson Water Department
· City of Columbus, Department of Public Utilities, Water Division
· Illinois-American Water Company/Champaign
· Ann Arbor Utilities Department, Water Utility
Dr. Morrison presented trend information on selected outcomes and performance measures. He reported that the BWL continues to perform well in the MSI utility benchmarking database, although its traditionally size leads, over the benchmark average, have diminished. Positive and very positive response from BWL customers is higher than the benchmarking average on six of the seven comparable benchmarked attributes included in the 2005 study. He noted that the only measure maintaining a double-digit positive lead, compared to the benchmarked total positive response average is “reasonableness of electric rates.” Two other measures, which previously held this benchmark position for positive ratings in June 2004, “overall satisfaction” and “restoring electric service,” have dropped to single-digit lead positions. However, for very positive ratings, electric service restoration rebounded in its benchmark performance, with a notable 14-point lead ahead of the average, while overall satisfaction remains at a six-point advantage.
Dr. Morrison further reported that compared to a year ago, the BWL is in a notably weaker position in terms of positive response to its water utility measures, when compared to the five other surveyed utilities listed above. He noted that the BWL is faced with the dual impact of a persistent and problematic news story regarding lead in the drinking water and the July 2005 electric and water rate increases.
When examining demographics and differences by customer type, the findings indicated that significantly more males than females are favorable toward the BWL. Among those who have had two or more outages, significantly fewer are very favorable compared to those who have had only one outage or none. Also significantly fewer 18 to 34 year olds feel favorably toward the BWL compared to the other age groups of 35-49, 50-64 and 65 and older.
Dr. Morrison reported that some erosion has occurred in the BWL’s typically strong performance among electric utilities. As the analysis continues to more specific measures of perceptions of the BWL’s performance, the results shed some light on the explanations for these levels of attrition in over positive response to these outcome measures.
Communications Director John Strickler presented the BWL’s strategies for countering the June 2005 customer satisfaction survey results. He noted that the BWL is entering a competitive environment and needs to ensure that our customers understand how the BWL is different from investor-owned utilities and what the BWL has to offer. He reviewed the public ownership campaign that has been under development since 2004. Campaign components include mass media, messages at multiple points of contact, enhanced web site contact, more visibility for lead replacements, customized informational events, speakers bureau, and a BWL “Community Report.” Mr. Strickler noted that customers, who see or hear BWL advertisements have a higher favorability, are more likely to be aware of municipal ownership and have more positive perceptions about the utility across a wide range of attributes.
There was lengthy discussion regarding the Board’s role in communicating with the citizens of Lansing about the benefits the BWL offers as a municipally-owned utility. The Commissioners concurred with the continued goal of providing BWL customers with information that builds awareness and loyalty to the BWL as a provider of utility services.
CONTROLS AND RISK MANAGEMENT
Chair Pro Tem Joseph Graves announced that if there are no objections, the agenda item regarding the Internal Auditor’s report on controls and risk management would be pulled from the agenda due to time constraints. This item will be scheduled for the next Committee of the Whole meeting. The Commissioners concurred.
EXECUTIVE SESSION
Moved by Commissioner Smith, seconded by Commissioner Calkins, to go into executive session to consult with legal counsel regarding trial or settlement strategy in connection with specific pending litigation (7:15 p.m.). The roll was called.
Yeas: Commissioners Calkins, Callen, Graves, Rios, Smith, and Wonch.
Nays: None
Absent: Commissioners Haggart and Joseph.
Carried unanimously.
Moved by Commissioner Wonch, seconded by Commissioner Calkins, that the Committee return to open session.
Carried unanimously.
The Committee of the Whole returned from executive session at 8:05 p.m.
There being no further business, the Committee of the Whole adjourned at 8:05 p.m.
Respectfully submitted,
Joseph E. Graves, Jr., Chair Pro
Tem
Committee of the Whole
Motion by Commissioner Graves, seconded by Commissioner Joseph, to receive the Committee of the Whole report as presented.
Action: Carried unanimously.
Resolution 2005-11-2
A meeting of the Human Resources Committee of the Board of Water and Light was held at the Executive Offices, Lansing, at 4:30 p.m., Tuesday, November 8, 2005.
Committee Chair Santiago Rios, called the meeting to order and asked the secretary to call the roll. The following members of the Human Resources Committee were present: Commissioners Gary Calkins, Joseph Graves, Jr., Santiago Rios, Ron Callen (alternate) and Robin Smith (ex officio.) Also present were Commissioners Ifield Joseph and Nancy Wonch (arrived at 4:35 p.m.).
Public Comment
BWL retiree Ron Byrnes of Mecosta, Michigan, noted that it was his understanding the Human Resources Committee had under consideration the issue of immediate pension vesting for the three Board appointed positions. He stated that he finds it hypocritical to tell retirees there is no money to pay COLA, when there are excess funds in the Defined Benefit Pension Fund.
Commissioner Rios responded that the committee had discussed the immediate vesting option at a previous meeting; however, it was decided not to recommend action at this time, but to discuss this option in the future as it related to all employees at the BWL.
GENERAL MANAGER’S PERFORMANCE
EVALUATION
Committee Chair Rios announced that General Manager Sanford Novick has requested a closed hearing for his performance evaluations as permitted under Section 8 of the Open Meetings Act (MCL 15.268 regarding closed sessions and permissible purposes.)
Moved by Commissioner Graves, seconded by Commissioner Callen, to go into executive session.
Carried unanimously.
The Committee entered into executive session at 4:35 p.m.
The Committee returned from executive session at 5:30 p.m.
Chair Rios reported that at the October 11th special meeting, the Board resolved to extend General Manager Novick’s contract. He noted that the reflection of the performance evaluation of each Commissioner indicated that Mr. Novick’s contributions and accomplishments have been very positive, and the Board looks forward to continued progress in all the areas he has brought to fruition at the BWL.
The Human Resources Committee, therefore, recommends that a contribution in the amount of $7,000 be made in lieu of a performance increase, generally reflected in base pay, to the Executive 401 Plan (Plan). An amendment to the Plan to permit the Board to make such a contribution on behalf of the General Manager will be required. Formal resolutions to effectuate these recommendations will be presented to the Board under the “Resolutions” order of business.
The Human Resources Committee meeting adjourned at 5:30 p.m.
Respectfully submitted,
Santiago Rios, Chair
Human Resources Committee
Motion by Commissioner Joseph, seconded by Commissioner Graves, to accept the report of the Human Resources as presented.
Action: Carried unanimously.
MANAGER’S
RECOMMENDATIONS
General Manager Novick reported there are no recommendations to present to the Board at this time.
Commissioner Graves stated that it is his understanding an ad hoc
committee has been formed to review the Board’s Rules of Administrative
Procedure. He expressed an interest in
this area and requested to be appointed to the ad hoc committee. He also asked when the committee would be
meeting.
Chair Smith responded that a four-member ad hoc committee is already in
place. She urged the Commissioners to
submit any concerns with respect to the current Rules to the ad hoc committee
as early as possible for review sometime in December. Also, any Commissioner interesting in attending the meeting is
free to do so. The committee plans to
submit a preliminary draft to the Committee of the Whole for review and discussion
before it is sent to the Board for action.
No new business.
Resolution # 2005-11-4
RESOLUTION TO AMEND
ICMA EXECUTIVE 401
MONEY PURCHASE PLAN
#108824
WHEREAS, the Commissioners of the Lansing Board of Water and Light
(“Employer”) acknowledge that the Director and General Manager (“Participant”)
renders a valuable service to the Board of Water and Light; and
WHEREAS, the Employer desires to amend the defined contribution ICMA 401A Plan #108824 (“Plan”) to
allow contributions for the Participant in the following manner:
·
The General
Manager shall be the only eligible active participant in the Plan
·
The Plan will
allow for immediate vesting
·
The Normal
Retirement Age shall be fifty-five
·
Employer
contributions on behalf of the Participant shall not exceed 10% of earnings
·
Employer
contributions shall be contributed on a bi-weekly basis
·
The Plan year
shall be made effective as of August 18th, 2005.
NOW THEREFORE, IT IS RESOLVED, That the Employer amend the ICMA 401A PLAN money purchase retirement
plan (the “Plan”) to reflect the changes listed above.
RESOLVED FURTHER, That the Senior Vice President of Finance shall be
granted authority to amend the Plan to reflect the changes listed above.
Motion by Commissioner Wonch, seconded by Commissioner Graves, to approve the resolution.
Action: Carried unanimously.
Resolution 2005-11-3
GENERAL MANAGER’S
COMPENSATION
WHEREAS, the Board of Commissioners of the Board of Water and Light
discussed the compensation package for the Director and General Manager
(“General Manager”) at a Board meeting on October 11th, 2005; and
WHEREAS, the Board agreed that the terms of the General Manager’s
compensation package were still being negotiated; and
WHEREAS, the Board agreed that the General Manager’s compensation
package terms would be finalized within thirty business days for subsequent
Board action.
RESOLVED, That pursuant to an agreement with the General Manager, an
amendment will be made to the ICMA defined contribution 401A Plan (“Plan”) for
the purpose of providing contributions on behalf of the General Manager.
RESOLVED FURTHER, That the contributions are made in lieu of a performance increase that is generally reflected in base pay.
RESOLVED FURTHER, That the General Manager waives his right to any
post-retirement health benefits.
RESOLVED FURTHER, That the contribution to the Executive 401 Plan shall
be seven thousand dollars ($7,000.00) and such contribution shall be evenly
divided and contributed bi-weekly, effective as of August 18th, 2005
and continuing up to the contract expiration period.
RESOLVED FURTHER, That the General Manager’s current employment
contract be amended to reflect this action.
Motion by Commissioner Calkins, seconded by Commissioner Wonch, to approve the resolution.
Commissioner Calkins commented that General Manager Novick has done an excellent job for the BWL. He expressed his appreciation for the various initiatives Mr. Novick has set forth and noted that he is looking forward to seeing that they are followed through.
Commissioner Rios stated that this Board appreciates the work and accomplishments of General Manager Novick. The Commissioners are pleased that Mr. Novick has agreed to extend his contract with the BWL for another year to help overcome current and potential difficulties facing the utility in the horizon. Commissioner Rios also noted that among the achievements over the past year, there was also controversy and criticism, some of which were unfounded. He commented that the dollar amount that has been approved for Mr. Novick is not reflective of what, in a perfect world, might more appropriately reflect the Board’s appreciation and gratitude for a job well done.
Commissioner Wonch echoed the comments expressed by Commissioner Rios and Calkins. She noted that from reading the “Breakfast with Sandy” notes, the one message that clearly comes across is that transition is very difficult. She stated that strides made at the BWL are in large part due to General Manager Novick and all the employees who have worked together to collaborate, even when they do not always agree, to build consensus in order to achieve the BWL’s objectives.
Commissioner Callen suggested implementing a procedure to start the General Manager’s performance evaluation earlier in order to expedite and streamline the reappointment and contract renewal process. He also expressed appreciation to General Manager Novick on his accomplishments.
Commissioner Joseph also echoed earlier comments made by the Commissioners. He emphasized that the General Manager’s contract renewal should not be such a long process. He stated that he plans to promote a more efficient performance review and contract renewal process. In closing, he congratulated General Manager Novick on a job well done.
Commissioner Graves commented that he recently had the opportunity to attend the American Public Power Association (APPA) Policymakers Workshop, “Governing in a Changing Marketplace.” In addition to an excellent training and learning opportunity, he networked with many commissioners, city council members and chief executive officers from around the country. Commissioner Graves stated that after listening to the various issues facing municipally-owned utilities, he left appreciating what the BWL is doing. He noted that there is still opportunity for growth, but in general much of what was discussed is currently in place at the BWL, which is a reflection of the excellent job General Manager Novick is doing. He concurred with earlier comments made by the Commissioners.
Chair Smith also echoed the sentiments of the Commissioners. She stated that General Manager Novick has been creative and innovative, and in some cases even revolutionary in terms of what he has accomplished at the BWL. She noted that organizational transitions often cause controversy, however, Mr. Novick is getting the job done. In defense of the time the Board invested in discussing Mr. Novick’s job performance and compensation, she commended the Commissioners for their thoroughness and careful deliberation in considering a fair compensation for the General Manager that was fully supported by the Board. Commissioner Smith thanked General Manager Novick and his staff for the many accomplishments over the past fiscal year.
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 2006 as follows, unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings:
2006
|
Tuesday |
-
January 24 |
|
Tuesday |
- March 28 |
|
Tuesday |
- May 23 |
|
Tuesday |
- July 25 |
|
Tuesday |
- September 26 |
|
Tuesday |
- November 28 |
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 8, 2006.
Motion by Commissioner Callen, seconded by Commissioner Wonch, to approve the resolution.
Action: Carried unanimously.
General Manager Novick stated that since there will not be another regularly scheduled meeting before the holidays, he wanted to wish all the Commissioners and employees a happy Thanksgiving and a happy holiday season.
General Manager Novick reported that the employees have made some dramatic gains in safety performance through the first three months of the fiscal year. He thanked the employees for their commitment to improve the BWL’s safety performance.
General Manager Novick expressed his appreciation to the Commissioners for their support. He agreed with earlier comments made by the Commissioners that transitions are difficult because we are faced with a rapidly changing environment. The BWL is trying to not only keep up, but catch up at the same time. He expressed his appreciation to the management team for their support and efforts to keep up. He added that by doing the right things for the right reasons, the BWL should hopefully look forward to a successful calendar year in 2006 and fiscal year 2005-06.
Commissioner Calkins requested an update on coal delivery issues and Eastern coal purchases.
General Manager Novick reported that staff is assembling a fact sheet on coal delivery issues for the Commissioners’ reference. Senior Vice President of Operations Bill Cook reported that the BWL’s goal is to maintain a 30 to 40-day supply of coal on hand locally. In order to effectively maintain an adequate on-site supply of fuel, the BWL purchased 80,000 tons of Eastern coal and began burning it at Eckert Station in late October. It is expected to burn throughout November and into December. During this time, the Erickson Station pile of PRB coal will be stockpiled to reach the desired 150,000 to 200,000 ton level. The BWL maintains a diversity of fuel supply options with Erickson able to burn PRB coal and Eckert able to burn both PRB and Eastern coal. Transportation remains a concern with limited options to Canadian National Railroad as the major railroad servicing Lansing. Belle River is able to burn PRB and Colorado coal and its transportation and storage ability are separate from BWL internal generation facilities. General Manager Novick reported that the BWL is continuing to work with both the Union Pacific Railroad and Canadian National Railroad as well as other utilities and our congressional delegation to effect improvement in the performance of coal deliveries to the BWL.
On motion by Commissioner Wonch and seconded by Commissioner Joseph, that the absence of Commissioners Haggart be excused.
Carried unanimously.
No comments.
Commissioner Callen stated that he knows all the Commissioners join him in asking the General Manager to compliment the employees for their generous contributions and voluntary efforts to the Capital Area United Way campaign. A total of $91,790 was pledged.
Chair Smith noted that she recently attended the employees’ “End of a Great United Way Campaign” soup and sandwich luncheon held at the BWL on November 3rd. She was impressed with the employees’ enthusiasm and friendliness.
Chair Smith also thanked the family of former Commissioner Diane Royal; namely Elaine VanTichelt and Renee VanTichelt, for attending the meeting to accept the Board’s memorial tribute resolution.
On motion by Commissioner Joseph, seconded by Commissioner Calkins, the meeting adjourned at 6:30 p.m.
/s/ Mary Sova, Corporate Secretary
Filed with Lansing City Clerk
November 18, 2005