_________________________
Monday, October
30, 2006
_________________________
The Board of Commissioners met in the Boardroom of the
Administrative Offices,
Present: Commissioners Gary Calkins, Robert Cochran, Semone James, Santiago Rios, and Robin Smith (teleconferenced 5:47 p.m.).
(Note: 4th Ward Vacancy exists.)
Absent: Commissioners Joseph Graves and Julee Rodocker.
The Secretary declared a quorum present.
Vice Chair Rios asked all to rise for the Pledge of Allegiance to the Flag.
Vice Chair Rios called the meeting to order at 5:46 p.m.
By motion of Commissioner Cochran, seconded by Commissioner Calkins the minutes of the September 26, 2006 regular meeting were unanimously approved.
Joseph Davis, Business Manager of the IBEW Local 352 spoke to the issue of the recently ratified collective bargaining agreement scheduled for discussion under Manager’s recommendations. He also expressed his desire for the Commissioners to complete the process during the Special Board meeting.
A letter of resignation was received from Commissioner Ronald C. Callen, effective September 26, 2006.
Received and placed on file.
A letter was received from Fred Whiting, dated September 26, 2006 regarding the estimated billing process.
Received and referred to management.
A resolution was received from Lansing City Council designating October 1, 2006 as Public Power Week.
Received and placed on file.
A letter was received from Donald Hillman, Ph.D., dated October 17, 2006 regarding the electrical pollution of our environment.
Received and placed on file.
A letter was received from Nancy Parsons Mahlow, dated October 17, 2006 regarding tree-trimming concerns.
Received and referred to management.
A letter was received from Jennie Grau, dated October 18, 2006 regarding tree-trimming concerns.
Received and referred to management.
October 6, 2006
The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 11:30 a.m. on Friday, October 6, 2006.
Commissioner Rios called the meeting to order at 11:48 a.m. and asked the secretary to call the roll. The following members were present: Commissioners Robert Cochran, Joseph Graves, Semone James (arrived at 11:46 a.m.), Santiago Rios, Julee Rodocker and Robin Smith.
Absent: Commissioner
Calkins
There were no public comments.
Ron Ishimoto, Manager of Fuel Procurement gave a presentation on BWL fuel supply contracts and its associated pricing. The presentation reviewed the process undertaken to secure a new contractual agreement as well as the pricing strategy implemented to help reduce costs. It was also indicated that Arch Coal was the only supplier willing to negotiate, as others wanted to lock-in a set price. Mr. Ishimoto reported that the BWL secured a price of $12.00 per ton, which will result in a savings of $3.33 per ton or $.39 per kWh.
Commissioner Smith asked what parameters are in place to allow the BWL to terminate the contract?
Mr. Ishimoto responded by stating that there are several items within the contract that allow them the opportunity to back out if needed. Some of those items include quality (coal does not meet spec) and failure to deliver, among others.
Commissioner Rios recommended moving the presentation to the full Board not for purposes of approving it contractually but to communicate the cost savings to the employees and general public.
Charles Moore, Interim Internal Auditor stated that he calculated a $9,000,000 calendar year savings. He went onto ask how this will affect rates?
Bill Cook, Senior Vice President of Operations, explained that the savings will be directly passed onto the customers in the form of an energy cost adjustment for both steam and electricity. The savings will be reflected in the February billing dependent upon when the actual invoice is received.
Commissioner
Mr. Cook responded that stating that he would have to check and get back with Commissioner Graves as the initial projection was based on fiscal year 2007.
After further discussion, it was suggested that the cost savings for the average residential customer be communicated to the public to help relay the relevance of this project and its cost savings ramifications. A copy of the presentation is on file if needed.
The discussion centered on the topic of whether or not the Interim General Manager should make organizational changes.
Commissioner Rios stated that when Mr. Peffley was appointed as the Interim General Manager he was given all the powers, authority, and duties of a General Manager. He went onto state that in his opinion he has all the authority that comes with that position including making whatever personnel and organizational changes deemed necessary as well as the authority to bring forth issues to the Commissioners with whatever needs Board approval.
Commissioner
Mr. Peffley reported that he did not have any other pending changes for the future. He presently has the team in place that he would like to work with and they are moving forward with the current group.
On motion by Commissioner Smith, seconded by Commissioner Cochran to go into executive session to discuss the strategy and negotiation sessions connected with the negotiation of a collective bargaining agreement, protected by the Open Meetings Act (OMA) exemption MCL 15.268 (c). (12:09 p.m.). The roll was called.
Yeas: Commissioners Cochran,
Nays: None
Absent: Commissioner Calkins
Carried unanimously.
The Commissioners continued in executive session to discuss
a legal opinion with
The Committee of the Whole meeting reconvened in open session at 1:08 p.m.
Commissioner Rios advised that Ms. Cavanaugh would draft contracts for approval and discussion with the Interim General Manager and Corporate Secretary.
Moved by Commissioner Cochran, seconded by Commissioner Smith, to move the employment agreements for the Interim General Manager and Corporate Secretary to the full Board for recommendation and approval.
The Commissioners discussed the topic of BWL issued cell phones. It was stated that language within the Rules of Procedure under Reimbursement of Expenses addresses Members of the Board business expenses, which can be reimbursed upon submission of a receipt(s) to the BWL. After further discussion, it was suggested by the Interim Internal Auditor that all Board expenses be submitted to the Executive Committee for review on a monthly basis.
There being no further business, the Committee of the Whole adjourned at 1:30 p.m.
Respectfully submitted,
Committee of the Whole
Motion by Commissioner Rios, seconded by Commissioner Calkins to receive the report as presented.
Action: Carried unanimously.
October 10, 2006
The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 5:30 p.m. on Tuesday, October 10, 2006.
Commissioner Cochran called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Gary Calkins, Robert Cochran, Joseph Graves, Semone James and Julee Rodocker.
Absent: Commissioners
There were no public comments.
Moved by Commissioner Graves, seconded by Commissioner James to go into executive session to discuss a legal opinion presented by Melissa Jackson of Foster, Swift, Collins & Smith, P.C. protected by the Open Meetings Act exemption MCL 15.268(h). (5:30 p.m.). The roll was called.
Yeas: Commissioners
Calkins, Cochran,
Nays: None
Absent: Commissioners
Carried unanimously.
Moved by Commissioner Calkins, seconded by Commissioner James that the Committee of the Whole meeting return to open session.
Carried unanimously.
The Committee of the Whole meeting reconvened in open session at 5:58 p.m.
Bill Cook, Senior Vice President of Operations introduced Robert Presnak, Senior Vice President and John Yost, Principal Consultant with Sargent & Lundy, LLC Consulting Group. Sargent & Lundy, LLC were charged with the responsibility of assessing the BWL steam and electric utility and providing recommendations based on their study findings. Mr. Yost proceeded to review the presentation that included load and demand forecasts, supply option development and evaluations, resource plan development and analysis, as well as environmental and other planning issues. Throughout the presentation the Commissioners raised several questions, some of which include the following:
Commissioner Graves asked Mr. Yost what type of other work does Sargent & Lundy conduct and have they provided the BWL with these types of services in the past?
Mr. Yost responded by stating that they are primarily a power-engineering firm that specializes in nuclear engineering, fossil power and renewable energy, and transmission engineering in addition to consulting work.
Commissioner Cochran asked which were the least expensive resources?
Mr. Yost stated that they did not review just the economics of the coal plant. They also looked at larger coal plants and their economies of scale assuming that the BWL could work with other partners to build a facility.
Commissioner James asked if they had determined at what point the BWL would have to replace the units; at what point is it no longer optional to continue to make repairs?
Mr. Yost responded by stating that that is an economic decision. However, they have determined that based on the figures there is not a need until the year 2030. At its current rate, the BWL could continue to utilize the equipment for the next 20 – 30 years and it would be economical. Mr. Yost went onto state that when considering retirement due to the age of the units one should start within the next 10 – 15 years or by the year 2020. He also stated that economically the units could function for 50 years provided the parts are continually replaced. However, by 2030 the BWL will need to start replacing the generating units. He also stated that large costs are generally the driving factor in retirement.
Commissioner James asked what other uses are there for back-up gas boilers (see page 16)?
Mr. Yost explained that if the BWL opted out of the steam business then there would be no other use for gas boilers as there is a small resale value and the analysis was based on the assumption that the electric and steam utility would continue.
Commissioner Graves asked if the purchase of gas boilers is economical (see page 16)?
Mr. Yost reported that initially they looked at the viable options and then tried to determine if they were economical. He went onto state that the BWL would only purchase a gas boiler for reliability purposes (not resale value).
Commissioner Graves went onto state that based on the
presentation thus far it would appear that it is best to continue operating
Mr. Yost continued with the presentation and advised that
there is a savings in discontinuing the use of
In regards to revenue requirements, anything with a 10% differential is the noise level of the accuracy of a long-term plan given all of the uncertainties (see page 17). He further explained that it is important to note that there is a large surplus value. Mr. Yost went onto report that the assets provide economics that are significantly better than the overall wholesale market. Primarily because the BWL units are coal fired which indicates low fuel costs and debt service due to their age, depreciation, and non-existent balance. He further expounded that the retirement of Eckert units 1 – 3 affects electric only whereas, the retirement of Moores Park has little affect on electric but the benefit of retirement alters the steam system and reduces the cost of excess capacity.
Commissioner Cochran asked why does the regional market price increase in the year 2015 (see page 18)?
Mr. Yost responded by stating that 1) there is significant need for base load generation in Michigan and the Midwest in 2010 but most of the projects cannot aboard until 2015. He went onto state that one will see significant influx of generation during that time period and 2) the new the Clean Air Interstate Rule and the Clean Air Mercury Rule will have significant impact on the cost of power.
Commissioner Cochran went onto ask why would the cost increase occur with the influx of new systems going online?
Mr. Yost explained that coal plants are a long-term investment with capital recovery costs and fixed costs. Therefore, the first several years average a higher cost of service. He went onto state that the wholesale markets perspective going forward is good from now through the year 2030. Mr. Yost also explained that the wholesale market price has been depressed because utilities have been able to meet their generation needs throughout the year, which allowed them to presumably meet their load requirements. He also stated that most utilities want to add base load generation.
Commissioner Cochran asked how many years do they estimate that this will continue to be the case? How long will the bull market for excess sales continue to last?
Mr. Yost responded by stating that assuming utilities add generation according to their needs then it will continue to be right where it is. He also stated that if someone overbuilt then you would not see the effects until 2015 or beyond. Mr. Yost went onto advise that it takes a minimum of 7 – 8 years for building and permits with the understanding that you are currently ready to build and there are no delays. If delays occur then it can add two more years to the process.
Commissioner Cochran advised that based on the information they have good reason to give some creditability to the budgeting and estimating process to believe that the BWL’s 35% of excess capacity will be purchased at a good price.
Mr. Yost concurred and went onto state that there is an
increase dependence on natural gas but very little of it is used to make
energy. In the
Commissioner James asked a series of questions, which included 1) what were the simulation model values based upon, 2) how accurate were previous forecasts, 3) have they reviewed their projections to determine how comparable they are to actual results, and 4) what is the differential attributed to?
Mr. Yost responded by indicating that there is a modeling
program based on every power plant in the region, which adds the loads from all
utilities to create a dispatch model that can simulate the sale of the
electricity on an economic dispatch basis.
The theory is based on the assumption that everyone is purchasing the
least expensive source of power available at anyone time. He went onto state that the model looks at
every year and inputs new generation as needed to balance capacity requirements
and adjust for the fuel price index. Mr.
Yost also stated that they normally review the last two years to see how close
they were and what actually occurred.
The numbers predicted for 2005 are $10-15 per kW lower than the actual
wholesale market. He also reminded everyone
to keep in mind that the wholesale market does not include all generation
capacity, as all excess capacity is not placed on the market. Mr. Yost further explained that the wholesale
market is not driven because everyone needs to input their exact cost or
slightly above to dispatch. He went onto
state that in his opinion the market is not fully traded and very little of the
full generation is being used in the
Commissioner Graves asked that if you had to choose one that had the potential of costing more than the forecast, would that be environmental compliance?
Mr. Yost agreed and stated that that is because it drives the entire market up. However, electricity is driven up by coal, and so if the BWL has more environmental compliance then so does everyone else. He went onto state that as a keynote point, there are no rules that mandate the retirement of a generating unit because it is not meeting environmental requirements (see page 24).
The question was asked as to the implications of the industrial MACT and financial ramifications relative to cost and mandating a plant closing?
Mr. Yost responded by stating that the industrial MACT is a
new rule that only affects the
Commissioner James asked if there is an estimate for cost compliance?
Mr. Yost responded by stating that the final report provides a detailed breakdown of the cost associated with level 1 - 3 compliance (see page 27).
Commissioner Graves asked if the cost of biomass in the UP is essentially a function of demand (see page 29)?
Mr. Yost stated that it is a function of delivery, collection and transportation. It is also a function of other uses such as whether or not you can sell it as mulch. If so, then it has a higher market value than if it were sold as fuel.
Commissioner Calkins asked if the estimate includes the cost of meeting all the clean air requirements?
Mr. Yost said yes and added that the busbar cost is embedded in the figure as well as the operations and maintenance costs associated with fuel. He went onto emphasize that this is based on large wind farms that have economies of scale and if you can buy into a large wind farm and possess ownership interest then it can be very competitive. Mr. Yost further explained that it is not only a way of meeting a renewable resource but it can actually reduce your present value revenue requirements. He also stated that one must recognize that you cannot use it as a large part of your generation because it is not a reliable source. However, it suggests that if there is a renewable portfolio then one could make a policy decision to participate, not on a RFP basis but as an owner.
Commissioner Calkins asked why do they see either one or two wind generation units?
Mr. Yost explained that it could still be economical because you would not have to tie into the transmission system. Whereas, the disadvantage of a large wind system is that they have to tie in the transmission system and there are significant costs associated with that task. He would not say that it is not economical to do one or two if you had the wind resources in this area. However, it might make sense to keep it within the system. Mr. Yost also explained that when noticing one unit here or there, it is often done by individuals who decided to install that source of power or it maybe a prototype for a larger system.
Commissioner James asked how long has turbine technology been used for that source of energy?
Mr. Yost reported that the economical ones with size and efficiency have been in use for less than 10 years. However, in the 1970’s people started installing wind turbine generation.
Commissioner Graves further expounded and stated that there
were large farms in
Commissioner James then asked at what point does it make sense to switch? And also, have they completed an analysis to say at what point it is feasible?
Mr. Yost explained that you could not completely switch because it is unreliable and you would need a secondary source. He went onto state that it is a technology similar to a hydro unit whereas, sometimes the river flows and sometimes it does not. Wind generation acts in a similar manner but it can still be very economical as a blend with the overall portfolio. Mr. Yost answered the second question by stating that a 5-10% level could blend into an overall utility portfolio. Anything above that figure would require additional backup generation and the economies of scale are lost or decrease.
Mr. Yost continued the presentation and went onto point out that today’s ratepayers benefit from lower costs due to coal fired generating units in operation since 1954 and 1985 respectively. He further stated that without the benefit of excess generation sales then ratepayers would have additional revenue requirements. Mr. Yost also posed a question in which he asked should all of the excess energy sales over the next 20 years go to benefit today’s customer or should it be used to lay future groundwork. He further reported that he is not recommending one course of action over another, as that is a policy issue for the Board.
Commissioner Cochran asked if we make the capital investment to control the emissions then can we sell the allowances?
Mr. Yost agreed and stated that in the case of levels 1 – 3 and to the extent that there was other compliance that was credited back, then when they say 8% more on a present value basis level 3 versus level 1, then that includes any benefit that came from the sell of allowances.
Mr. Cook explained that the IRP report is an analysis that provides input as into how to address and assess some of the issues into helping make long-term decisions. The next question that the BWL needs to ask is what are we going to do about it? Mr. Cook went onto report that there were some policy assumptions that they had to make in putting the plan together and they would like to obtain the Board’s thoughts on the assumptions and see if they concur. He went onto state that the IRP did not look at retiring the steam system but in continuing operations and maximized the current assets. Mr. Cook also stated that it did not look at retiring the steam business, as that is a separate piece of analysis, which is forthcoming. He went onto report that the policy is essentially predicated on the following assumptions.
Cook - based on informal indication from the Board
v Retail demand plus reserve requirements to the extent they remain the source of lowest production cost
Cook - to meet customers load plus ample reserve requirements
v Sales into the electric wholesale market to the extent that excess capacity sales cover variable costs and contribute to BWL fixed costs.
Cook – will continue to sell excess capacity to the extend that it benefits our incumbent customers
· Wholesale Power Sale Risk will be mitigated through a Board approved Risk Management Policy and implementation of associated procedures and practices
· BWL will install environmental equipment as economically justified compared to purchased allowance cost and comply through both equipment and allowance purchase. (This is how the BWL has historically complied.)
· The BWL will include a portion of its generation portfolio as renewable
Cook – believe the State of
· Funding of Energy Efficiency and Demand Side Management initiatives will be allocated where program costs are offset by tangible cost savings
Cook – 130 mW’s of excess capacity means that the only way we can breakeven is to sell it to someone else. There is no incentive for the BWL at this point to develop a demand side management program unless it pays for itself.
· These Policy Assumptions will be reviewed periodically and revised as needed
* Subject to Board resolution 2006-8-5
Mr. Cook went onto state that the policy assumptions are the underpinnings of the action plan. They recognize that there are some issues with the asterisk (*) items that are subject to the steam utility resolution. However, those items were outside the scope of the RFP.
Commissioner Calkins asked if staff had decided not to
consider closing
Mr. Cook responded by stating that they did not say they would not close it. They stated that they would not sell it to obtain cash. If there is no need for capacity then that is a different issue which needs to be addressed.
Commissioner Calkins then stated that the fact that they have excess steam capacity does not really mean anything; it just sits there?
Mr. Cook replied that it sits but there are associated fixed
costs, which is why the alternative that Sargent & Lundy suggested in
retiring the steam assets essentially saves them 37% on the revenue
requirements. It represents the
reduction of the asset and all of the operation and maintenance costs. Mr. Cook went onto explain that they have
300% more capacity than needed, if they are going to cut cost then there are
few ways to achieve that goal. One of
which is by retiring
Commissioner Calkins went onto ask what is the 37% savings in terms of dollars?
Mr. Cook stated that he had not yet calculated that figure and would have to provide him a response. He went onto state that the big picture indicates a savings of 37% but they need to determine what that means tangibility relative to this year or the next. Right now they are confirming the high level analysis of Sargent & Lundy. However, a part of the action plan would be to seek deeper analysis.
Commissioner Calkins indicated that he was comfortable with what has been presented thus far.
Mr. Cook went onto state that if the Commissioners do not agree with the policy assumptions then there is further work to be done. However, they wanted to make sure that they are meeting the Commissioners requirements.
Wood – advised that they delayed $2.9 million from fiscal year 2007 capital budget; funds are still available to maintain reliability and compliance. However, there are some costs that were delayed for another year.
Commissioner Cochran asked what would the BWL delay with the $2.9 million?
Mr. Cook further stated that they wanted to make sure that any investments made are prudent relative to their long-term interests.
Commissioner Cochran stated that in looking at 8-10 year opportunity for wholesale sales, it would be nice to have another 500 mW to put on the market. He went onto ask staff to think about preparing a cost study, obtain the last 3-years of that cycle, and determine if sales could pay for the investment.
Commissioner Calkins advised that he was for moving ahead.
Commissioner Graves asked Commissioner Cochran to further expound on his request to staff.
Commissioner Cochran went onto explain there is an 8-10 year period in which the wholesale market will be extremely good for those with excess capacity. He further explained that if the BWL could build another plant within seven years then there maybe a 3-year time span in which all of the output could be sold on the wholesale market. Therefore, sales might generate enough revenue to pay for building the plant.
Mr. Cook went onto state that if we look at that option then it would effectively mean that we are installing capacity solely for the wholesale market, which is speculative. He went onto state that he is not saying that it is good nor bad, but just recognize that it is what it is and secondly, that if in doing that we would be beat the market then others would be doing the same thing. Mr. Cook went onto state that essentially we would have to accomplish this task better than anyone else to be successful.
Commissioner Graves replied by stating that his only concern
is that we are going to expend staff resource time on this task. He went onto state that he believes that this
should follow the completion of the studies that have already been
requested. Commissioner Graves further
explained that the cost study should come after the issues surrounding steam
and
Commissioner Cochran concurred and stated that he assumed that it would be a small effort in the accomplishment of what was just presented. He also added that he did not want to add yet another study, as this was not what he was trying to accomplish.
Commissioner Graves replied that that was his only concern.
Commissioner Calkins stated that it could also be integrated into the issue of whether or not to close a plant and thereby, allow the new facility to act as your next resource for generation.
Mr. Cook reported that it does provide more options in moving forward relative to new generation and speculation in the next 10 years whereas; you would be hedged to some extent.
Commissioner Cochran stated that he was thankful to the individuals that decided to build Erickson 20 – 30 years ago as we are currently enjoying its benefits.
Commissioner Calkins advised that he would presume that we would move this to the next board meeting.
Mr. Cook replied that it was brought before the Board as information. However, they would like some indication that this was what they are looking for and the direction in which they would like to move.
Commissioner Calkins stated that he would like the caveat
added about steam relative to
Commissioner Graves stated that basically this is not an action item coming before the Board so much as an informational item and an approval of the policy assumptions.
Mr. Cook responded by stating that they are policy assumptions and a blessing that the action plan is in the Commissioners opinion an appropriate method of moving forward.
Motion by Commissioner Calkins, seconded by Commissioner James to move the Integrated Resource Plan to the full Board.
Carried unanimously.
There being no further business, the Committee of the Whole adjourned at 7:43 p.m.
Respectfully submitted,
Robert Cochran, Acting Chair
Committee of the Whole
Motion by Commissioner Cochran, seconded by Commissioner James to approve the report as presented.
Action: Carried unanimously.
AD HOC COMMITTEE
October 17, 2006
The Ad Hoc Committee of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 11:30 p.m. on Tuesday, October 17, 2006.
Commissioner James called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Gary Calkins, Robert Cochran, Joseph Graves and Semone James.
Staff Present:
There were no public comments.
The Commissioners met to review and discuss possible changes to the Rules of Procedure. They also discussed the fact that the last amended (March 28, 2006) document has not been approved by City Council. Therefore, in an effort to avoid a lengthy delay between proposed amendments and approval, it was suggested that each Commissioner contact their respective Councilmember counterpart to encourage the implementation of said changes. The suggested changes below represent an effort to improve the guidelines that govern the Commissioners, provide additional clarity, enhance voting privileges and establish more equity.
1. Hiring Consultants – No individual Commissioner should have the authority to hire or contact outside consultants or counsel without the express support of the Board. At the onset of the contract or hiring decision, the Board should decide which designated Commissioner would have the responsibility of maintaining contact with the respective individual or firm. All questions or points of clarity should be addressed to the Board prior to directing them to the consultant/counsel to help reduce repetitive questions, maintain cost relative to billed time, and give Board members the opportunity to either address the issue or expand the content of the question. Intermittent communication will be handled by the designated Commissioner, final reports or opinions will be given to the Board as a whole and any subsequent questions will be directed to the Board prior to re-contacting the consultant or counsel.
2. Commissioner Calkins’ recommendations – Commissioner
Calkins originally suggested adding a section that would speak to the removal
of officers.
Voting Rights (Performance Reviews) - Commissioner Calkins originally proposed that a sitting Commissioner must be on the Board for a minimum of 8-months prior to participating in the employee performance review process. After much discussion, it was agreed that instead they would recommend that any confirmed Commissioner should recognize their limited exposure to an employee and consider abstaining from voting on that respective employee’s contract renewal.
3. Majority Voting – The Commissioners discussed the issue of whether or not certain topics should require majority voting of the confirmed Commissioners in order for the motion to pass. It was suggested that voting based on a specific number of votes (e.g. requiring five votes when there are only six confirmed members) as opposed to majority of the confirmed Board could gridlock the process and hamper addressing difficult decisions. It was further stated that certain items of sufficient relevance to the BWL should continue to require majority voting of the confirmed members due to the nature of the subject matter.
4. Chair Appointments – The Commissioners discussed committee chair appointments and whether or not the process should change from its existing practice. The discussion centered on developing a system that would create more equity and avoid exclusionary practices. During the discussion, it was suggested that every Commissioner should have a nonexclusive voluntary committee assignment to help balance the workload and responsibilities. It was also stated that perhaps there is value in collecting the Commissioner’s areas of interests prior to Board elections. After lengthy discussion, a few suggestions were made relative to changing the process of appointing committee chairs.
5. Committee Voting Privileges – The Commissioners expressed concerned over their lack of authority to vote at a committee meeting for which they were not appointed. Some members stated that if an individual reviews the packet, attends committee meetings and have an expressed interest in certain topics then they should have the right to vote at that respective meeting. The Commissioners recognized that there is opportunity to vote on said topic(s) at the Regular Board meeting. However, this attempts to allow voting privileges prior to its movement to the full Board.
6. Procedures for Public Hearings – There was some discussion regarding the regulation of public comment. Ms. Ekren noted that regulating speech is a non-advisable activity. However, the Chair has the authority to maintain peace and order throughout the meeting.
7. Procedures for Public Hearings – See Comments on Rules of Procedure For Ad Hoc Committee memo, section 3a, dated October 11, 2006. Ms. Ekren noted that there is a policy statement, which requires the General Manager to develop and implement procedures for rate hearings. However, there exist no direction from the Commissioners and this would be an appropriate topic in the Rules of Procedures. The Commissioners were in agreement with Ms. Cavanaugh and Ms. Ekren’s recommendation and suggested that they draft language pertaining to the topic for further review.
Recommendation - “Procedures for public hearings: We suggest that the Commissioners add a section that delineates the items such as scheduling, conduct of hearings (i.e. time limits, etc.), ex parte communications, and whether additional hearing opportunities are necessary if the Commission is inclined to approve rates other than those proposed at the public hearing.”
8. Procedures for Public Hearings – See Comments on Rules of Procedure For Ad Hoc Committee memo, section 3b, dated October 11, 2006. The Commissioners were in agreement that language should be added to the existing Rules of Procedure regarding Ad Hoc committees and their respective appointments or elections.
Recommendation – “Ad hoc committees: There are currently no rules about ad hoc committees in the Rules. We would like to see a section added that discusses how these committees are appointed and who chairs the ad hoc committee.”
9. Procedures for Public Hearings – See Comments on Rules of Procedure For Ad Hoc Committee memo, sections 3c – 3e dated October 11, 2006. The Commissioners were receptive to Ms. Cavanaugh and Ms. Ekren’s recommendations and suggested that they draft language pertaining to each respective topic for further review.
c. Recommendation – “We would like to add provisions relating to amending the agenda or adding or deleting items from the agenda.”
d. Recommendation – “Conflict of interest: We would like to add a section on how we would handle conflicts of interest. For example, if a Commissioner has a conflict, he or she should reveal the interest, not participate in the Board discussion on that issue, and refrain from discussing the matter with any other Board member or staff.”
e. Recommendation – “Section 12.1 of the current Rules of Procedure need to be modified. It currently says, in part, that “Failure to [attend meetings] will be brought to the attention of the Mayor and may be grounds for removal by the Mayor from the office as a Board member.” The Charter gives the authority to remove Commissioners for cause to the City Council, not the Mayor. Therefore, this section should be modified to change the reporting to City Council.
The Commissioners charged Ms. Cavanaugh and Ms. Ekren with the responsibility of drafting language for each suggested change to accommodate the above recommendations. Once complete a draft copy will be sent to the committee for further review and discussion.
There being no further business, the Ad Hoc Committee adjourned at 1:33 p.m.
Respectfully submitted,
Semone James, Chair
Ad Hoc Committee
Motion by Commissioner James, seconded by Commissioner Rios to receive the report as presented.
Action: Carried unanimously.
Commissioner
Smith entered the meeting at 5:56 p.m. and presided over the remaining agenda
items.
WHEREAS, on October 13, 2006 the Board of Water and Light and IBEW Local 352 entered into a Tentative Agreement on a successor to the 2003-2006 collective bargaining agreement;
WHEREAS, the terms and conditions of the Tentative Agreement are in accordance with the direction and authority that was delegated to the Board’s negotiating team by the Board of Commissioners; and
WHEREAS, the Tentative Agreement was submitted by the IBEW Local 352 negotiating team to the IBEW membership for its approval and was ratified on October 18, 2006.
RESOLVED, that the attached “Final Tentative Agreement” (dated and signed October 13, 2006) is hereby approved.
RESOLVED FURTHER, that the Chair and Corporate Secretary are hereby authorized to sign the Agreement incorporating the settlement changes.
--------------------
October 13, 2006
Final Tentative Agreement
1. Extend Collective Bargaining Agreement, Attachments and MOUs by a term of twenty-four (24) months. All provisions to remain in effect until Midnight, October 31, 2008. As outlined in Article XV, page 46, of the CBA, except as follows:
a) Effective November 1, 2006: A 1% across the board increase in basic wage rates as listed in Attachments A and A1.
b) Effective November 1, 2007: A 3% across the board increase in basic wage rates as listed in Attachments A and A1.
2. The
a) The design of health insurance plans
b) Health and wellness programs
c) Health care cost containment challenges and strategies
d) Other issues related to health and health insurance that the Task Force may deem appropriate.
3. The parties may discuss other matters of interest pursuant to Article XI, Section 10 (Special Conferences).
IBEW Local 352
By: Joseph D. Davis
Dated: _________________, 2006 Its Business Manager
______________________________
By: Robin Smith
Dated: _________________, 2006 Its Chair
______________________________
By: Rhonda Jones
Dated: _________________, 2006 Its Secretary
Motion by Commissioner Cochran, seconded by Commissioner Rios to adopt Resolution 2006-10-4 for the Ratification of the IBEW Local 352 Union Contract.
Discussion:
Commissioner Rios stated that there was a lot of discussion in executive
session regarding the union contract. He
then asked
Mr. Peffley responded by stating that he believes the two
year negotiated contract extensive allows them to move forward. He further stated that Joseph Davis, Business
Manager of IBEW Local 352 and Rick Daly, Labor Relations Manager have agreed to
look at the contract over the course of the next two years. Mr. Peffley also explained that they have to
look at healthcare issues and as a result a group of individuals were sent to
attend a
Commissioner Rios went onto address Rick Daly and advised that the approach he had taken was a very good one. He then asked Mr. Daly to briefly comment on the healthcare aspect.
Mr. Daly reported that they attended the “Healthcare Without Bloodshed” conference at the MSU School of Labor and Industrial Relations. There were approximately 40 participants and the BWL was well presented by himself, two management and five IBEW bargaining unit representatives. He went onto state that he was impressed with the sincerity and interest demonstrated by labor’s attendance and especially that of the local IBEW representative. Mr. Daly stated that this gave him confidence that they may be able to begin to make some progress in the area of healthcare costs, plan design, and wellness programs. He went onto state that the process starts with learning because you cannot say what you agree or disagree with without first knowing where the issues lie. Mr. Daly also stated that he thinks that they have taken the first step together in understanding the problem.
Commissioner Calkins stated that he would like to attend the meeting for staff on the healthcare issue when such a meeting takes place.
Mr. Peffley replied by stating that he will notify all of the Commissioners as to when the meeting will take place. He went onto state that he was thinking out of the box in terms of bringing the instructor to the BWL as opposed to sending additional people to the seminar due to the associated expense.
Commissioner Smith responded by asking Mr. Peffley to ensure that the Board is notified of the upcoming sessions. She also stated that this shows the kind of forward thinking that other company’s look to do by actually bringing facilitators in for discussions instead of going onsite, which can be expensive. Commissioner Smith went onto state that she was very impressed with the fact that both sides are looking at the issue. She further stated that anytime conferences are called “Healthcare Without Bloodshed”, then that is an indication of the fight that lies ahead. However, she went onto state that the more understanding we have while at the table together the better it will help to facilitate this process.
Action: Carried unanimously.
None.
Resolution No.
2006-10-5
APPROVAL OF INTERIM GENERAL MANAGER’S EMPLOYMENT AGREEMENT
RESOLVED, that the Board of Commissioners approves the attached employment agreement with the Interim General Manager, Richard Peffley.
--------------------------------------
Motion by Commissioner Calkins, seconded by Commissioner Rios to adopt Resolution 2006-10-5 for the approval of the Interim General Manager’s Employment Agreement.
Action: Carried unanimously.
Resolution No. 2006-10-6
APPROVAL OF CORPORATE SECRETARY’S EMPLOYMENT AGREEMENT
RESOLVED, that the Board of Commissioners approves the attached employment agreement with the Corporate Secretary, Rhonda Jones.
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Motion by Commissioner Calkins, seconded by Commissioner Rios to adopt Resolution 2006-10-6 for the approval of the Corporate Secretary’s Employment Agreement.
Action: Carried unanimously.
Commissioner Smith asked if they are following the National Safety Council’s recommendations?
Mr. Peffley responded by indicating yes and stated that they have applied a lot of the safety recommendations and an update will be forthcoming. He then proceeded to discuss the Balanced Scorecard and how the figures are prepared and calculated. Mr. Peffley went onto explain that staff created the Scorecard and typically one would prefer half of the measures to be up and half of them down, which is an indication that you have correctly developed your measures. He went onto state that if you are meeting all of your goals then they are probably too easy and if they are all down then you have set yourself up to fail. Mr. Peffley explained that the BWL has followed the Scorecard measures for three years in which they have been slightly massaged but not entirely changed. He also reported that the current Scorecard as of September 2006 reflects the best efforts that the BWL has ever accomplished. There are a total of 15 measures, 11 of which are up and 4 are down. He also stated that the message is getting to employees and he would eventually like to expand it downward and gain the input of the entire organization. Mr. Peffley also stated that this is impressive for the workforce and the budget is starting to reflect it as well.
Commissioner Rios asked what timeframe does the document represent?
Mr. Peffley responded by stating that it is cumulative and
represents fiscal year July 1, 2006 through September 2006. He also went onto provide a tree trimming
update in which, he stated that they are following through on the items that he
had put forth in the letter originally addressed to the Commissioners, City
Council and the Mayor’s office. Mr.
Peffley also reported that a community group of approximately 8 citizens is
scheduled to meet on November 13th to obtain their input. Mark Nixon, Communications Director is
coordinating the group session. They have
also contacted the City of
Commissioner Cochran asked if Pete Baker would be present at the meeting?
Mr. Peffley responded by stating that Mr. Baker’s supervisor, Alan Carroll will be in attendance. He went onto state that they will be asking permission to put the Revised Six-year Forecast on the next Committee of the Whole agenda. At which point, staff will proceed to report in detail why the BWL will not need to borrow $30,000,000 to fund capital projects for this year or the next. Mr. Peffley went onto state that his forecast will show that the BWL does not need the funds this year and they will not move forward in borrowing the money at this time.
Commissioner Smith asked if Mr. Peffley if he would report to the Board why they do not need those monies?
Mr. Peffley responded by stating yes and indicating that they will report why it is not necessary to borrow the money at this time. He went onto state that he asked Human Resources to do some research and found that in the last 20 years this is the first time that a union contract has been ratified and approved prior to the expiration date. Mr. Peffley applauded everyone for his or her efforts in this matter.
Mark Nixon introduced his newest staff member, Cheval Breggins, Communications & Public Relations Representative.
COMMISSIONERS’
REMARKS
Commissioner Cochran stated that he has been on the Board of Commissioners since March 2006 and there has been a lot of turmoil and stress which is now gone. He went onto state that a lot of the problems have been fixed and there is a great attitude among the employees and a much more positive atmosphere. He also stated that the workers never had a problem; it was the rest of them. Commissioner Cochran further explained that he is happy to be a Commissioner now and it is pleasant to see smiles and talk to the employees. He also stated that he is hearing an air of hope and renewed enthusiasm. Commissioner Cochran went onto state that one thing they all need to guard against are the agendas that surround us but are not a part of us and that has to do with politics of the upcoming elections. He went onto state that he hopes it does not affect them and that they continue as a team. Lastly, Commissioner Cochran closed by thanking staff and employees for allowing him to be a part of their process.
Commissioner Smith thanked Mark Nixon and other staff that attended the City Council session in which the BWL was commended for Public Power Week efforts. She went onto state that for the past three years the Board has requested that the BWL acknowledge utility week celebrations in some form or another. Commissioner Smith commended Mr. Nixon for being at the BWL for less than a year and yet picking up on the urgency of the request. She further stated that she and other Commissioner’s had the opportunity to handout some of the thank you bags, which were well received.
Commissioner Smith continued by
stating that she received a phone call from Jennie Grau who had received
letters from
Commissioner Smith also asked staff
to report back to the Board on the status of the diversity initiatives. She went onto state that they had opportunity
to attend the recent NAACP dinner and thanked the BWL for sponsoring two
tables. Commissioner Smith also stated
that they have a commitment to diversity and she would like to see it on a higher
level so that they know where we are and if it is permeating throughout the
organization. She also stated that she
knows that there are initiatives out there and she has spoken to
On motion by Commissioner Rios and seconded by Commissioner Cochran, that the absences of Commissioners Graves and Rodocker be excused.
Carried unanimously.
Joseph Davis stated that completing the contract negotiations took a great deal of weight off of the BWL. He went onto state that they have to be mindful that there are issues that need to be worked through. However, the greatest part is that they will be in a position to address those issues together. Mr. Davis also stated that the idea is to look forward and not backwards in working together and making this the best organization possible. He also stated that there are issues that he intends to commit to in addressing to help alleviate those items. Mr. Davis went onto thank the Commissioners for putting up with the last two years and much of the staff for working long hours on prior issues. He closed by stating that the 24-month contract allows them time to address other issues and help strive to make the BWL a better organization.
On motion by Commissioner Calkins, seconded by Commissioner Cochran, the meeting adjourned at 6:29 p.m.
/s/ Rhonda Jones,
Corporate Secretary
Filed with
November 8, 2006