Approved by the Board: May 22, 2007
_________________________
Tuesday, March 27,
2007
________________________
The Board of Commissioners met in the Boardroom of the
Administrative Offices,
Present: Commissioners Gary Calkins, Robert
Cochran, Joseph Graves, Semone James,
Absent: None.
The Secretary declared a quorum present.
Chairperson Smith asked all to rise for the Pledge of Allegiance to the Flag.
Chairperson Smith called the meeting to order at 5:35 p.m.
By motion of Commissioner Graves, seconded by Commissioner Cochran the minutes of the January 23, 2007 regular meeting were unanimously approved.
By motion of Commissioner Graves, seconded by Commissioner Cochran the minutes of the February 7 and 13, 2007 special meeting were unanimously approved.
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO IMMEDIATELY PRIOR TO ADJOURNMENT.
Joseph Davis, Business Manager of IBEW Local 352 noted that the Corporate Secretary is scheduled for a six-month review and advised that he is supportive of the work she has is doing and her dedication. He also advised the Board that many are interested in their actions regarding the Corporate Secretary.
None.
COMMITTEE OF THE WHOLE
The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 4:30 p.m. on Tuesday, February 20, 2007.
Commissioner Rios 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, Santiago Rios, Julee Rodocker, and Sandra Zerkle.
Absent: Commissioner Robin Smith
Joseph Davis, Business Manager for IBEW 352, thanked the Board for allowing him to submit information he thought important for the leadership regarding the General Manager search. He stated that it was the first time an opportunity of this nature had ever been extended to the bargaining unit. Mr. Davis also advised, the bargaining group welcomes and supports whatever role they can play in the search process. He thanked Sheryl Hudson, Acting Human Resource Director for speaking to the bargaining group and utilizing a team approach for the Human Resource Director search as one of their members is currently participating in the process. Mr. Davis further explained that he would work closely with the new Director. He also noted that having a good relationship with the Director would require someone that has a value system, which supports the organization in moving from where they were to where they want to go. Mr. Davis reiterated that the bargaining group wants to be involved in the process and they welcome it being done in a timely and expeditious manner. He further explained that as they go forward he hopes the BWL does not loose its focus on safety. It was also advised that the BWL is making money right now but they want to continue focusing on the job as well as taking care of one another. Lastly, Mr. Davis reported that he attended meetings regarding the Integrated Resource Plan in which professionals recommended building a power plant. He suggested the BWL build a plant and not delay with this matter.
Commissioner Cochran asked Mr. Davis, how does the union view the progress that the Interim General Manager has made thus far in implementing the results of the Human Resource audit?
Mr. Davis responded by stating that in the Call Center there are different people but he thinks they have a good manager in Robert Perialas. He also stated that it is a tough group with a lot of issues and he would assess there is still work to be done. Mr. Davis further noted that in his opinion and at this point, the General Manager has given good direction.
Commissioner Cochran asked
Mr. Davis if he was satisfied that there is progress being made and if he is
pleased about the progress?
Mr. Davis replied by acknowledging that progress is being made.
Commissioner Graves noted that the agenda item should be
properly reworded as an update on the implementation of the Human Resource
report, related to the performance of the General Manager. He further clarified that Michael Goree of
Growth Strategies Consulting, Inc.; author of the Human Resource audit is
present to speak to the issues related to the report and his view of the
findings. Commissioner Graves advised
that he felt it would be beneficial to have Mr. Goree’s input in order to
facilitate a meaningful discussion. He
also acknowledged that it is the General Manager’s right to request a closed
session and asked
Mr. Peffley noted that he did not have issue with going into closed session to discuss the topic.
Commissioner Graves further advised that he was seeking a discussion related to the General Manager’s performance relative to the Human Resource report. He also explained that as they further delve into this item, he thought it important to have an opportunity to discuss it in closed session to provide some degree of candor.
After further discussion, it was explicitly made clear that Mr. Goree was not present to evaluate the General Manager’s performance, as that is the sole responsibility of the Board of Commissioners. It was also clarified that the General Manager has the authority to request a closed session relative to his performance review and to decidedly open the meeting if he did not agree with the persons selected to sit in on said evaluation.
Motion by Commissioner Graves, seconded by Commissioner James to conduct a performance evaluation relating to the General Manager’s performance with respect to the Human Resource Audit.
Carried unanimously.
Request made by
The Committee of the Whole reconvened in open session at 5:43 p.m.
Commissioner Rios advised there was a closed session to discuss the General Manager’s performance relative to the Human Resource audit. The Board continued discussion in open session relative to the audit.
Commissioner
Calkins departed the meeting at 5:43 p.m. due to a prior obligation.
Commissioner Graves suggested the Board hear from Michael Goree so that he could give a more in depth review and limit the discussion to exclude specific names and speak to the issues outside of the Human Resource Department.
In summary Mr. Goree noted the following information:
· He was retained to review the recruitment and selection process and they have conducted some initial new testing with regards to assessment to find a more expeditious way to bring people into the system.
· There are still problems with certain individuals in the Human Resource Department and whether or not they have the knowledge base and/or capacity to do what is being asked of them. This is a challenge that needs to be addressed by the new Human Resource Director. (Mr. Goree clarified that he has discussed this issue with Mr. Peffley and that he is aware of the names of those persons.)
· It was noted that the Interim Human Resource Director has the thought process, knowledge base, leadership skills, and strategic thinking to be the Human Resource Director. Mr. Goree advised the Board that he wholeheartedly and without reservation believes the current Interim person should be the Human Resource Director.
Commissioner Rios asked if the application period was still open and where are they in the process? He also asked if the Interim Human Resource Director is one of the candidates?
Mr. Peffley responded by stating that the application period is closed and they are currently in the process of narrowing the applicant pool to those that they are going to interview. Mr. Peffley also advised that the Interim Human Resource Director did not apply for the position.
Commissioner Graves went onto ask that although they are into the process of recruitment, if the Interim Director were to make themselves available then is it possible that the General Manager could make a decision to go into that direction and simply close the process?
Mr. Peffley replied yes and indicated that it was an option for the General Manager and he could hire whomever he wants for the position.
Mr. Goree continued the report and noted the following additional information:
· Some of the human resource group spent time regarding their branding and image with participation by individuals in the Human Resource Department. In this they developed the phase, “Together We Achieve Success”. Those that bought into process have applied that language to begin the process of mending the Human Resource Department.
· Met with the compensation and benefit committee to determine that the pay system needed assistance.
·
Worked with
· Ms. Bradley asked if he could train the supervisors on performance management of which he responded yes. However, he advised that he was not retained to do that work but he would be happy to help in anyway he could.
· Outside of Human Resources there are major concerns with some individuals in certain departments, which was previously stated. There are issues with how individuals get placed, when they get placed, and errors that are made in certain departments, which are unfortunate and begin to jeopardize the integrity of the BWL.
· It was reiterated that he has never seen a more dedicated workforce. For example, he believes Robert Perialas has done a superb job in Customer Service. However, there is some restructuring that would make it even better. It is his recommendation that they not only look at Customer Service but also at CARS, Meter Reading, Remittance, etc. and begin to do things that would relieve some of the concerns and issues, and address some of the shortfalls of the individuals who are in an authoritative role.
· There are individuals in the Environmental Department in leadership roles that are neither well versed in the environmental language nor arena, which leads to unnecessary errors that are beginning to jeopardize the BWL.
· Some of the decision-making processes for placing individuals reinforces the good ole boy network.
· The engineering report indicated that there were some restructuring issues. However, there are still people in leadership positions that are causing some of the same problems. He did not recommend firing those individuals but intervention is not there.
· Training modules instruct persons on what to do but not on how to do it. In the absence of a mentoring system, the quality decision-making process is absence.
· Mr. Goree sited a former BWL employee’s frustrations with co-workers, peers and other supervisors in attempting to do what is appropriate and obtain the proper support from management. The issue of responsibility and accountability was raised relative to the supervisory and managerial level.
· If you want to do something then he is your best ally but if you just say you want to do something then he could become your worse nightmare. He also has a huge passion for the success of his clients.
· The BWL has an absolutely wonderful organization with some individuals that need stronger intervention in Human Resources, Engineering, Water Department, Environmental, and Communications.
· He noted that he has shared the above information with Mr. Peffley in detail.
· In the original report one of the important items they talked about was being open to the free exchange of information, proactive decision making at all levels, enabling employees to be owners of their work, promoting and participating in innovation, and encouraging a positive relationship among all employees. He noted this language was in the contract, three contracts ago and further advised that had this taken place at all levels of the organization then there would be no need for this conversation.
· Originally, the Human Resource Department was chastised for not doing x, y, or z. However, no one helped the department understand how, which is not fair.
· There will always be one or two at the organization that do not belong at the BWL and there are some of those at the managerial, director and bargaining unit level.
· The BWL must have the right supervisors who can do the right things and the right directors and managers who understand what pulling in the right direction actually means.
· If the BWL hires a new General Manager without taking action then that person will come here and say what are we doing? Subsequently, they will wait to determine all of the politics and the BWL will end up in the same position that it was in 1 ½ years ago.
· The immensely good news article on Sue Warren in the Lansing State Journal was noted as a good example of the positive public relations that the BWL should seek.
· Mr. Goree noted that he does two things: 1) problem identification and 2) solution implementation.
Charles Moore, Interim Internal Auditor asked if there were some conclusions to the report and if there are going to be additional recommendations?
Mr. Goree replied yes, and indicated there are some additional recommendations he believe necessary to move the organization forward. He also advised that he and Mr. Peffley could review some additional concerns, which were discovered within the last 3-4 weeks.
Commissioner Cochran asked Mr. Goree a series of questions that included the following:
1) Many years ago he heard that when a formal organization fails, an informal one starts to form from the inside out. Is that taking place at the BWL?
2) Is it adding another layer, more layers or changing recording roles by mutual agreement?
3) How big is it and has this been communicated to Mr. Peffley?
Mr. Goree responded by stating that yes, it is happening. He also noted that it does not change recording roles, it is a defensive mechanism to maintain the status quo. Mr. Goree responded to the last question by stating that if nothing is done then it would solidify before the new General Manager is in place. He also advised that he has not communicated this to Mr. Peffley in strong enough words.
Commissioner Rodocker stated that she appreciated the report and is interested in results driven progress. She explained that she would like to hear information on topics such as is the BWL top heavy, succession planning, are there too many people in the same outfit, do we need to rotate to different jobs, etc. Commissioner Rodocker went onto say that she needs plans on how the BWL becomes more efficient and effective.
Mr. Goree noted that to a degree those items have been discussed. He also reported that he believes there are a number of additional supervisors and managers that may not be necessary to the organization. Mr. Goree continued to advise that the succession planning process is not necessarily knowledge capture driven so much as it is body filled driven. Whereby, when an employee leaves, another body is put in its place. He further stated that he has not seen the capture of knowledge versus the replacing of bodies, which represents a big difference and an issue that people need to discuss.
Commissioner Graves stated that for the record, when the human resource audit was being proposed and lobbied for by groupings within the BWL as well as individuals outside of the BWL, he was not supportive of it. He noted that he lobbied against it, didn’t want and didn’t think it necessary, which was a huge mistake on his part. After engaging the consultant, who went about the business of looking at the human side of the BWL, shared with the Board his report, and further shared in more detail some of the things presented today; it is not a report that he thinks they should simply put on the shelves and allow it to collect dusk. Commissioner Graves noted that he thinks that the Board needs to act on those items. He further stated that Commissioner Cochran suggested that he attended the governance workshop, which he did not have the opportunity to attend, but apparently the rest of the Board did and they talked about his historical position. Commissioner Graves further advised that his historical position is the same position that Commissioner Cochran spoke to and that is, what is the role of management and what is the role of the Board? He went onto note that he thinks that traditionally the Board has had very little role to play as it relates to the functioning on the management’s side. However, given the scope of the issues that they just heard he struggles with trying to figure it out. Commissioner Graves went onto state that they have an Interim General Manager who may or may not apply for the General Manager position. They have a search firm who is busy with the search process and he does not want to see another General Manager come in without there being movement in all the areas they just heard about. He also advised that this situation brings an exception to where he would normally be, which is that there is a role for the Board as a subset until a permanent General Manager is in place. He noted that it would essentially work with the General Manager in an oversight role as it relates to addressing the issues they just heard about and the issues articulated in the written report. Commissioner Graves noted that he understood everyone would not have the time or flexibility to serve in that capacity. However, he would certainly make time to serve and he would also ask Commissioners Calkins and James to serve, as he believes they also have the flexibility. Therefore, they would have a three-person oversight committee.
Motion by Commissioner Graves, seconded by
Commissioner James to create a three-person oversight committee that would act
as a subset of the Board of Commissioners in which the committee would
essentially work with the Interim General Manager as it relates to addressing
the issues relative to the Human Resource audit report. Furthermore, the oversight committee members
would consist of Commissioners Calkins,
Discussion: Some Commissioners expressed concern with the motion and noted the following reasons as to why they would not support it.
· Did not think it appropriate and suggested additional meetings to accomplish the above recommended tasks
· Do not want to micromanage the process and felt an oversight committee was unprecedented
· Suggested providing the General Manager with additional direction if needed
· The Board is currently asking more questions and increasing their expectations, which are gradually being met
· The Board is an eight-member committee and oversight of the General Manager is not their responsibility; a subset committee for super oversight is not needed
· If the Interim General Manager is going to apply for the permanent position then it throws a cloud over the General Manager if the Board is stating that they have not approved of his performance in the last six-months
There were other Commissioners who felt the oversight committee was needed and gave several reasons in support of the motion, which are listed below.
· Not fair to ratepayers to incur costs related to processes that are not functioning properly
· Desire to leave the Board in a better position than when they arrived
· Individuals are vested in maintaining the status quo without adjusting and/or making changes
· There is a capacity issue in which individuals may not have the capacity to do what needs to be done
· Do not recommend micromanaging the process or directing the General Manager in their day-to-day activities. Instead propose an oversight committee that would have more time and energy to talk to the General Manager regarding some of the issues that were outlined and a strategy to address those concerns. As a result, the General Manager would still have the freedom to go about tackling problems in whatever manner he chooses.
· There are deeply embedded problems at the Board that need to be addressed
· It was noted that while the Interim General Manager may not have had a tremendous amount of time to effectuate change, there are things that have been identified that need to be addressed
· The Interim General Manager may feel that some tasks cannot be carried out due to certain relationships that are currently in place and the precarious position it would place him in once he returns to the general body
· It was noted that one of the reasons why Ms. Hudson may not want the Human Resource Director position is because she does not know if she would have the support of the Interim General Manager nor the new General Manager. However, Ms. Hudson was encouraged to apply for the permanent position
· The General Manager was encouraged to call upon the Board for assistance if needed
After further brief discussion, the motion failed by the following roll call vote:
Yeas: Commissioners
Nays: Commissioners Cochran, Rios, and Zerkle.
Absent: Commissioners Calkins (left meeting at 5:43 p.m.) and Smith.
Commissioners
Due to time constraints the
following agenda items were moved to the next Committee of the Whole
meeting: Rossman Group – Communication
and Marketing Efforts, Outside Counsel Recommendation and Discuss Legal Review
Process.
Risk Assessment
Presentation
Bill Cook, Senior Vice
President of Operations advised that over the past several years the Board has
heard about wholesale market risk and the fact that the BWL’s wholesale
business is approaching 33% of its total business, which is a risky
position. He went onto note that with
new initiation wholesale market pricing becoming even more volatile, the
problem that the BWL will encounter in the near future is that the utility
market is changing and standard products on the wholesale market involve a
higher level of risk. Mr. Cook further
explained that the BWL currently sales recallable power, which means that if
the BWL sells everything it has and needs the power back then it can be
recalled for the BWL’s own usage.
However, today’s market is moving forward with sales of power on a
financially firm basis, which means that you are obligated to provide power if
you sign a contract. He went onto report
that a number of customers who are currently willing to buy the BWL’s
recallable product are dwindling. Mr.
Cook reported that the BWL is doing well this year but as the market matures it
will become more of a problem.
Therefore, if the BWL is going to continue to take risks of that nature
for the 1/3 revenue then they are going to have to look at financial
instruments to ensure that if they take those risks then they are not
jeopardizing the BWL’s financial future.
Mr. Cook further noted that they are not making recommendations, as the
BWL neither has a permanent Chief Financial Officer nor an Internal Auditor in
place. However, this is the first step
and they wanted to acknowledge that they have looked at a Risk Management
Policy on how to protect the BWL in moving forward. The Risk Assessment presentation was
scheduled to give the Board a brief overview of what has been accomplished thus
far.
Dan Conway, Principle with
RMI Consulting, Inc. indicated that the presentation would be educational in
terms of its structure and content. He
also noted that some of the items he would like to address include: an overview of what is risk management, what
is happening in the industry, where does BWL fit in terms of the municipality
clients they serve, steps they initially reviewed in terms of their risk
assessment and, markets and price volatility.
Mr. Conway further reported that the BWL is trying to protect a revenue
stream but in the future the BWL will have a moving energy target of prices
that is becoming more volatile. He also
advised that there are counterparts who are potentially going to transact
business with the BWL to buy its excess power that will continue the revenue
stream. However, the industry is moving
towards a financial transaction environment.
The purpose of the presentation is to layout some of the policy
directions and term where they might be heading in the next 6 - 12 months.
Charles Moore, Interim
Internal Auditor asked if they are moving towards a futures market? He also stated that it sounds as if they are
in between a futures market and the stock exchange in which they are in essence
going to require that the BWL make payments the next day?
Mr. Conway confirmed Mr.
Moore’s sentiment and further stated that currently, there is a futures market
in electricity that has developed within the last 2 - 5 years, similar to the
natural gas market that developed in the early 1990’s after deregulation. He advised that to have a successful futures
market, you have to have an overlay of a strong physical market, which is what
the BWL currently transacts within now.
Mr. Conway indicated that the futures market is another venue for BWL to
participate and protect its revenue stream.
However, the BWL may see a potential attractive price to lock in some
revenue in year 2007 or 2008 and because of the type of physical contract that
the BWL currently uses, less and less people are willing to participate in that
type of structure. Mr. Conway reiterated
that the futures market allows the BWL to have that type of opportunity and
protect revenue.
Mr. Moore asked if the
basis is to move from a restrictive market to a futures market in nature?
Mr. Conway confirmed that
it was and advised that a futures market involved financial contracts and
derivatives. He also noted that one does
not go from being a solely physical transaction environment to a financial
market without having a policy structure in place to ensure the Board that all
control processes, authorizations and all levels of risk are being
managed. Mr. Conway further advised that
the BWL has a unique situation in that it is long on power and has generation
to potentially sell out. He also
reported that municipalities unlike regulated utilities are normally less risky
on a risk spectrum perspective, whereas, the cost of energy is passed onto the
customer in a regulated utility. It was
also noted that within risk management they attempt to identify, control and
minimize exposure to price movement by developing a hedge plan. Mr. Conway continued his review of the
presentation and noted the assessment findings and several recommendations
contained within the body of the report.
2006 Assessment Findings
Summary: RMI’s main conclusion is that BWL, given its
status as a municipal utility with excess power and its current agreement with
the MPPA, has a unique current risk profile versus its post-MPPA position in
the marketplace.
RMI Recommendations:
Operational Risk
Mitigation
Policies and Procedures
·
Work to establish
policy adapted to current MPPA environment
Oversight and
Governance
·
Establish cross
functional risk oversight and operations committees
·
Conduct periodic
risk management education updates
Authority Limits
·
Continue current
schedule of authorizations with GM designee in absence
·
Continue efforts
on sub-net long MPPA committee authorization
Segregation of Duties
·
Designate
non-transacting personnel to assist with compliance for BWL and MPPA activity
Risk Monitoring and
Reporting
·
Require key
management reports
·
Ensure adequate
systems are in place
Credit Risk Mitigation
Establish credit procedure
·
Work to establish
policy for non-MPPA activity and beyond MPPA
·
Give ROC credit
risk management accountability
Perform credit evaluations
and specify/monitor credit limits
·
Perform periodic
check of MPPA and MISO credit information
·
Establish BWL
evaluation and limit setting practices for non-MPPA activity
Obtain Appropriate
Securities to Support Limit Compliance
·
Consider
exchange-cleared account to minimize credit risk
·
In post
MPPA-environment work to establish more equitable thresholds
·
Update master
agreements to include ‘netting’ credit mitigation tool
Market Risk Mitigation
RMI Recommendations Given
BWL Status: Develop Overall Hedge Plans
Coal
·
Consider products
to protect against price spikes
·
Create a
budget-driven coal procurement plan to take advantage of lower markets
Wholesale Sales
·
Determine whether
or not revenue margin risk on the low side is too great for the municipality to
endure and hedge accordingly if needed
·
Develop a
longer-term hedging approach of 2-3 years versus the current 12–18 months
·
Create a
wholesale sale methodology to establish execution triggers and limits, which
encompass a combination of historical price-driven, time-driven and budget
protection components tied to a know cost for fuel
Mr. Conway clarified that
revenue protection pertains to any type of forward sales on known input cost,
be it coal, or any another type of cost structure. He also noted this refers to protecting the
margin and knowing the input cost as well as having the ability to sell at the
top of the margin or a more profitable margin than the budget forecast. Mr. Conway further advised that whether the
BWL decides to sell or not, in looking at the forward market and power prices,
at some period of time the price is moving up and down. He continued by noting the current three step
structure as one transitions into the future:
1) enhance the current risk management practices that the BWL currently
has thru MPPA, 2) the BWL could develop its own infrastructure in the interim
while it is still associated with the pool, and 3) look at longer term revenue
protection.
Commissioner Cochran asked
when you sell that future price do you receive payment today and deliver at a
later date?
Staff noted that the gain
in position goes to the seller at the time of the transaction. Thereby, one is contracting a certain price
at that time and the buyer has to purchase it at a set price.
Mr. Moore noted that in his
opinion, the BWL should limit its futures market participation due to the fact
that it is a governmental body and the risk factors involved in trading.
Mr. Cook explained that
they agree with Mr. Moore but also noted that doing nothing is a risk in and of
itself. Therefore, based on what has
been learned they are looking at assembling a pilot project with a quantitative
amount of risk that will allow them to learn the market, determine the
positives and negatives, and assess whether or not it will meet the needs of
the BWL.
Mr. Conway closed by
advising that their current client base all began with a pilot program
structure, which allows the customer, City Council, and management to
understand what they are doing. He also
noted that if the BWL looks at the amount of generation and revenue that its
brings in on a yearly basis, which is a small percentage of what one would look
at in the forward market, 2-3 years from now the BWL may have fewer potential
counterparts.
Copies of the “Risk Management
Introduction and Risk Assessment Summary” presentation are on file in the
Office of the Corporate Secretary.
Update on
Mr. Peffley advised that
they are still working with the customer and the township supervisor was out of
the office and thereby unable to meet.
It was also noted that the materials requested for Mr. Moore are
forthcoming.
Varnum Consulting –
GM Selection Process
Sandra Soltysiak, Varnum
Consulting advised that the job description and summary for the General Manager
position were included in the packet of materials previously sent. She also reported that they are ready to
begin the advertising phase of the project and gave the Board a list of
potential advertising options. Ms.
Soltysiak reminded the Commissioners that they are going to cast a wide net to
help ensure that they receive as many candidates as possible. She also asked that all interested candidates
apply via the website, by fax or email.
Ms. Soltysiak noted that the next step in the process would be a meeting
with the Interim General Manager and anyone else he deems important and she
would also like to take a facility tour.
Ms. Soltysiak reported that the posting would close on March 30, 2007
upon which time she will present the top 5-6 candidates to the Board. The additional prescreening process will also
take place prior to the next meeting, which she hopes will be in five weeks and
the position filled in 10 weeks. Ms. Soltysiak
noted that her firm would call all of the utilities in
The Board agreed with the
language for the General Manager position announcement. They also indicated that they would decide at
a later date as to whether or not they would host a candidate meet and greet or
any other public forum of said nature.
Ms. Soltysiak confirmed
that it is common practice to send a board-wide communication to the
organization indicating that the General Manager position is being posted and
they are accepting applications. If a
BWL employee knows of anyone interested in the position then they should be
directed to the website, www.hiringsolutionsinc.com. Ms. Soltysiak also commented that if BWL
employees have any comments then they are welcome to forward them to her via
email. Mr. Peffley advised that he would
make sure that the communication is sent to all BWL employees.
There being no further
business, the meeting ended at 7:20 p.m.
Respectfully submitted,
Committee of the Whole
Motion by Commissioner Rios, seconded by Commissioner Calkins, to receive the Committee of the Whole report as presented.
Action: Carried unanimously.
HUMAN RESOURCE COMMITTEE
March 8, 2007
The Human Resource Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 4:00 p.m. on Thursday, March 8, 2007.
Human Resource Committee Chair, Robert Cochran called the meeting to order and asked the secretary to call the roll. The following committee members were present: Commissioners Robert Cochran, Joseph Graves, and Julee Rodocker.
Absent: Commissioner
There were no public comments.
Brandie Ekren, Associate Attorney advised that during the past few year’s staff has reviewed the benefit plan documents to bring them up to date, ensure compliancy and restatement. As such, they have proposed a document restatement and plan changes to reflect current practices, changes in applicable laws, compliance with the Internal Revenue Service Code and greater administrative flexibility. The changes would affect both Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug Election and the Post Retirement Benefit Plan Document. The first of said documents is in essence the plan, which gives employees and retirees the decision to either receive a taxable cash benefit or health and prescription drugs. It was noted that if an employee or retiree wants to receive cash in lieu of health and prescription then they must possess alternative healthcare coverage. The restatement includes items that are necessary since the Health Insurance Portability and Accountability Act (HIPAA) and Consolidated Omnibus Budget Reconciliation Act (COBRA) references came into effect.
Commissioner Graves inquired as to whether or not there
would be a cost savings to the BWL if retirees were required to sign up for
Medicare Part D. He also noted that
State of
Mr. Oxender advised that it would be a change to the BWL’s existing plan and there are some wraparound plans, which are administratively cumbersome at this point. He then indicated that it is something that the Healthcare Taskforce could review and make recommendations.
Moved by Commissioner Graves, seconded by Commissioner
Rodocker, to go into executive session to discuss a privileged document
received from
Yeas: Commissioners
Cochran,
Nays: None.
Absent: Commissioner Rios.
Carried unanimously.
Moved by Commissioner Graves, seconded by Commissioner Rodocker that the Human Resource Committee meeting return to open session.
Carried unanimously.
The Human Resource Committee reconvened in open session at 4:30 p.m.
Continued Discussion
On: Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug Election
On motion by Commissioner Graves, seconded by Commissioner Rodocker, the Human Resource Committee unanimously agreed to move the Restatement of Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug Election resolution forward to the full Board for consideration.
Ms. Ekren reported that the Post Retirement Benefit Plan Document specifically outlines the benefit options available to retirees by meeting certain eligibility requirements. In an effort to review and update the document, it was restated to reflect changes in applicable laws, compliance with the Internal Revenue Service Code and greater administrative flexibility. Ms. Ekren noted that the previous plan document implied ‘piggy-back’ vesting whereas; if one were vested in the pension plan then one was automatically vested in healthcare. Since that was not the intent of the BWL plan, the document restatement clarifies the language, time periods, dates, and eligibility. She went onto advise that a retirement benefit does not necessarily entitle one to a healthcare benefit package; it is simply a different plan that operates separately from the pension plan. Ms. Ekren also stated that one of the biggest changes is the plan documents flexibility. The previous document specifically restricted premium sharing for retirees whereas, the new document neither permits nor restricts premium sharing. Therefore, it is important to note that the language does not necessarily institute premium sharing for retirees. However, it adds more flexibility for that determination to be made by the Board at a future date.
Commissioner Cochran asked if there is anything in the union agreement regarding the above?
Staff replied no and reported that there is language in both plan documents that offers exceptions to anything otherwise specified in the union agreement.
After further discussion, the following motion was introduced:
On motion by Commissioner Graves, seconded by Commissioner Rodocker, the Human Resource Committee unanimously agreed to move the Restatement of Post Retirement Benefit Plan resolution to the full Board for consideration.
Ms. Erken added that in reviewing their plans they came up with a number of opportunities to help the plan improve its operation. As such, they are going to present the ideas to the healthcare taskforce for investigation.
Commissioner Graves asked when does the healthcare taskforce begin?
After further discussion, it was noted that the healthcare taskforce should formulate immediately so that they may begin research in preparation for presenting recommendations to the Board prior to the next union contract negotiation period.
There being no further business, the Human Resource Committee adjourned at 4:45 p.m.
Respectfully submitted,
Robert Cochran, Chair
Human Resource Committee
Motion by Commissioner Cochran, seconded by Commissioner Rodocker, to receive the Human Resource Committee report as presented.
Action: Carried unanimously.
March 13, 2007
The Finance Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 3:30 p.m. on Tuesday, March 13, 2007.
Finance Committee Chair, Semone James called the meeting to order and asked the secretary to call the roll. The following committee members were present: Commissioners Gary Calkins, Semone James and Robin Smith.
Absent: Commissioner Sandra Zerkle
There were no public comments.
Moved by Commissioner Calkins, seconded by Commissioner Smith, to go into executive session to discuss a privileged document received from C.L. Moore & Associates, P.C. protected by the Open Meetings Act exemption MCL 15.268(h).
(3:33 p.m.) The roll was called.
Yeas: Commissioners Calkins, James and Smith.
Nays: None.
Absent: Commissioner Sandra Zerkle
Carried unanimously.
Moved by Commissioner Calkins, seconded by Commissioner Smith that the Committee of the Whole meeting return to open session.
Carried unanimously.
The Committee of the Whole reconvened in open session at 4:18 p.m.
On motion by Commissioner Calkins, seconded by Commissioner Smith, to accept the suggested changes to the Defined Benefit Investment Policy and the VEBA Trust Investment Policy and move it forward to the full Board for approval.
Discussion: Commissioner Smith stated that she understood the final selection criteria and the fact that one cannot have a preference for minorities. She also believes that diversity is covered in the pool candidates’ statement. However, Commissioner Smith expressed concern pertaining to previous conversations regarding the avoidance of advertising efforts directed towards a specific market.
Ms. Cavanaugh clarified that if one spent all their advertising dollars trying to reach women and minority candidates then one could be in violation of Proposal 2 because it would be considered a preference for those candidates.
Commissioner Smith noted that she did not think the pool candidates’ statement creates a preference. She went onto advise that they want to cast a wide net so that the mix of advertising incorporates items to ensure they reach minority candidates. Commissioner Smith also asked staff if they have had opportunity to review the changes?
Action: Carried unanimously.
Ms. Cavanaugh explained that she combined the Corporate Diversity and Corporate Supplied Diversity Policies together because they were extremely similar. The primary difference between the two is that one spoke of customers and the latter spoke of ratepayers. The Corporate Diversity policy also charges the General Manager to establish procedures and be responsible for its implementation. As such, Ms. Cavanaugh combined the two and created one Corporate Diversity Policy. In doing so, she removed specific language that could be considered a preference and added language that 1) recognizes the importance of diversity to the BWL, and 2) language that also supports the growth and development of the candidate pool. Ms. Cavanaugh explained that they are trying to be as broad as possible in terms of promoting and making opportunities available to everyone.
Discussion surrounded the issue as to why the new statement could not continue to use the previous language, which stated that the, “…BWL will continue to establish a workforce that is highly representative of the customers who use BWL’s resources”. It was noted that the language was removed because it could be construed as a preference if the community makeup was based on ethnicity or gender.
Commissioner Smith expressed concern with the proposed changes in that the language does not indicate BWL’s desire to somewhat reflect the community it serves. She also noted that it is not embedded in the process and she is not requesting preference.
After further discussion, the following motion was introduced:
On motion by Commissioner Calkins, seconded by Commissioner Smith, to refer the Corporate Diversity Policy to the Committee of the Whole.
Discussion: Commissioner James advised that they must rely on General Counsel to write a policy that is consistent with the law ill regardless of individual issues.
Commissioner Smith added and to rely on General Counsel to a
point that the Board challenges them when they do not feel that it has gone as
far as it could go.
Ms. Cavanaugh noted that she understood Commissioner Smith’s point of view and to the extent that she may have ideas on how to accomplish this task within the law, then she would certainly review the suggestions.
Action: Carried unanimously.
Additional Discussion: Charles Moore, Interim Internal Auditor advised the Board to error on the side of caution in relation to the policy and said language changes.
It was further noted that several other entities are in the process of developing language to bring their organization into compliance. Therefore, as one hears what other industries are implementing it will help to develop a better statement. It was also explained that the policy is not written in stone and could be subject to further review and change. In addition, Commissioner Smith agreed to work with Ms. Cavanaugh to share ideas in cultivating a new Corporate Diversity Policy statement.
Sue Flores, Manager of Finance and Planning reviewed the fiscal year 2008 budget assumptions for the Board of Water and Light. It was noted that the BWL would file the budget with City Council ten days after its approval by the Board of Commissioners. The City’s final budget deadline is June 10th. Ms. Flores advised that during the beginning of April, they would also look at possible rate increases, budget reviews, and allocations. She further reported that allocation methods have been a large discussion point and they would probably bring it forward in April for a more thorough discussion.
The Commissioners asked if the budget schedule could be moved up so that they may have budget discussions sooner than projected?
Ms. Flores replied that the budget calendar is in part based on scheduled Board committee meetings. As such, a Committee of the Whole is scheduled for April and they could bring forward whatever information they have at that point. Ms. Flores clarified that rate hearings are only necessary if there is a rate increase request.
The Commissioners had a brief discussion regarding cost of service relative to retail customers. They also discussed cost allocation methods, bond issues and a schedule pertaining to rate increases.
Ms. Flores went onto continue the presentation and reviewed the sales forecast, revenue assumptions, operating expenses, capital expenditures, and other considerations such as, the payment in lieu of taxes to remain at 4%, General Motors exit fees, continued draw down of Belle River project, and bond issues.
On motion by Commissioner Calkins, seconded by Commissioner Smith, to approve the request to renew the Capital Area United Way Sponsorship and to move it forward to the full Board for approval.
Discussion: Commissioner Smith noted that the BWL has had a long history with CAUW and thought it would be a great way to help them underwrite a project. She noted that she was not sure how much was previously raised. However, each year the BWL has received an award for its employee participation and corporate contribution.
Commissioner James asked if the BWL has any other contributions and if so, what are the amounts and what publicity was given for said sponsorships? She further noted that they should also review the other sponsorships as well and consider using it in a marketing campaign and/or community relations.
It was reported that any sponsorship above $5,000 must be brought before the Board for approval. Mr. Peffley also advised that a BWL committee meets every week to review sponsorship requests. He noted that they have approved what was budgeted and they could compile a list of sponsorships per the Board’s request.
Mark Nixon, Director of Communications noted that he will introduce the new marketing firm, The Rossman Group at next week’s Committee of the Whole meeting. During which time they will briefly speak about the BWL’s community sponsorships and various projects that are currently underway.
Action: Carried unanimously.
Informational Only: Coal Letter and Investment Letter from
Charles Moore
It was advised that each respective letter was brought forward at this time for informational purposes only and would be discussed in detail at the next Finance Committee meeting, as staff has been given additional instruction. The Commissioners agreed to move the item to the next the Finance Committee meeting.
Other
Commissioner Calkins asked staff to speak to an article written in the Lansing State Journal relative to a BWL contribution for the building of a downtown fountain?
Mr. Peffley noted that the BWL has not received nor approved any requests for (in kind donations nor monetary) contributions to the building of said fountain.
There being no further business, the meeting adjourned at 5:05 p.m.
Respectfully submitted
Semone James, Chair
Finance Committee
Motion by Commissioner James, seconded by Commissioner Rios, to receive the Finance Committee report as presented.
Action: Carried unanimously.
Resolution 2007-3-4
COMMITTEE OF THE WHOLE
The Committee of the Whole of the Board of Water and Light met at the Executive Offices, Lansing, beginning at 5:30 p.m. on Tuesday, March 20, 2007.
Commissioner Rios called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Gary Calkins (teleconference), Robert Cochran, Semone James (teleconference), Santiago Rios, Julee Rodocker, and Sandra Zerkle.
Absent: Commissioners Joseph Graves and Robin Smith
There were no public comments.
Mark Nixon, Director of Communications gave a brief overview of the marketing and community sponsorships that are taking place at the Board of Water and Light. Mr. Nixon noted that the sponsorships are a good thing and it also provides emotional equity. He advised that the marketing strategy is an evolution of what they are currently doing, which is strengthening community ties through large and small partnerships and reminding people of the BWL’s commitment to the community. Mr. Nixon listed some projects that are forthcoming, which include: customer video testimonials to be aired at Lugnut games beginning April 2007, a redesigned web page that should be complete by mid-May 2007, emphasize non-profit causes at the upcoming Chili Cook-off and create an annual report to customers that will appear in local print media.
Kelly Rossman, Chief Executive Officer with The Rossman Group thanked the Board for the opportunity to work with them, and noted the importance of the community partnerships that the BWL have nurtured and cultivated over the years. She then advised that this has helped to re-enforce its primary message of “Hometown People Hometown Power”. Ms. Rossman reported that the BWL has four premiere events that include Adopt-A-River, Common Grounds, Silver Bells, and the Chili Cook-off. She then indicated that their primary goal is to make the BWL look good in every way possible and advised that their focus would be slightly different than past practice. The new focus will concentrate on community partnerships, earned media coverage and balancing earned media coverage with paid advertising. Ms. Rossman explained that they are building a strategic communications plan and they have also conducted a communications audit, which is a review of all existing communication tools, identification of what works and what could be improved. Ms. Rossman closed by showing a 2-minute BWL customer video testimonial taken December 2006.
Ms. Rossman noted that Mr. Nixon understands the value of proactive media relations in creating balance between positive and negative media stories.
Commissioner Rios noted that he appreciated hearing a balance between paid and earned media due to budget expenses relative to production costs and the return that the BWL receives for its investment. He also inquired as to where they are in terms of establishing a more structured program for donations, community activities, and the creation of a foundation?
Mr. Nixon responded by indicating that the foundation idea has been briefly discussed but is not ready for full presentation. He also reported that they would soon bring forth a policy on community sponsorships at a later date. Mr. Nixon notified the Board that the sponsorship committee is taking a closer look at sponsorships, how the BWL sponsors, who it sponsors and what is received in return.
Commissioner James thanked Mr. Nixon for developing the spreadsheet that detailed the BWL’s contributions as requested. She also asked Mr. Nixon to provide information relative to the following: current fiscal and primarily budget for community sponsorships and donations, standing donations and contributions, who makes the decisions, how are they determined, how many requests are received, and are all of the requests honored?
Mr. Nixon reported that they have sponsorship meetings approximately every 3 weeks. They typically approve more requests than they deny and a large percentage of them are bottled water requests. He went onto advise that the community sponsorship committee is responsible for determining the details and rationale for approving or denying requests.
After further discussion, it was noted that the community sponsorships would be a separate line item on the budget. It was also suggested that the BWL review changing the format of the billing statement to separate City sewer charges from BWL items. It was reiterated that the Board should be aware of the community sponsorship process, approvals, denials, and the monetary budget. Mr. Nixon suggested providing the Board a regular report as to what projects have been approved or denied. In closing, the Board made clear the importance of establishing objective criteria and communicating sponsorship requests.
Bill Cook, Senior Vice President of Operations advised it has been a part of the BWL’s strategic plan to combine operations in becoming more streamlined and making it easier for customers to work with the BWL. He went onto note that it was an issue identified two years ago relative to customer interface and as a result, Single Point of Service was developed and is a major success story.
Diana Paul, Supervisor of Single Point of Service advised that there was a disconnect in how the BWL handled customer requests for new, upgraded, and modification of an existing services. There were multiple departments involved in the process and customers were not receiving the attention they needed. The presentation discussed in detail the creation of Utility Services, which helps to address issues with call transfers, erroneous customer and billing records, delays in reaching construction and incorrect billing statements. The objectives outlined in March 2006 included the following:
· One department responsible for all service related issues with respect to new, upgrade, relocate or removal of service requests
· Improved communication with customers – more timely and consistent
· Improved application process – all services through one department
· Reduction of errors involving customer and billing records
· Communication improvements with Delivery Services on scheduling and releasing of work
· One department responsible for all construction fee collections prior to installation
· Uniform application of the Rules & Regulations for service
· Reduction in service request processing time
· Improve documentation of the process for applying for service
· Improvements to BWL website
· Reduction in call transfers
· Improvement in the education of our customers and internal staff on the service process
Commissioner Calkins asked how do you get to Utility Services as he calls Customer Service for service changes and things of that nature? Is there a different group for these services?
Ms. Paul confirmed that they are a different group and reported, that Customer Service addresses inquires regarding billing, turn on/off requests and standard inquires. She went onto advised that the phone tree directs customers to dial a different number for Utility Service that handles construction requests such as new service, demolition, relocation or modification of an existing service.
Commissioner Zerkle asked if this also applies to major projects as she received an extensive inquiry from the Ingham County Road Commission regarding a situation with the BWL. She went onto state that the presentation indicates that the BWL coordinates its efforts. However, it appeared as if that was not the case with this particular project.
Mr. Cook reported that Utility Service is for customers who want new services or service changes. He added that in working with the road commission wherein, the BWL may have to move utilities typically involves an engineer who coordinates the activity. This is a different issue and staff will look into the Ingham County Road Commission situation and respond.
Copies of the “Single Point of Service”
presentation are on file in the Office of the Corporate Secretary.
Outside Counsel Recommendations
Commissioner James asked Ms. Cavanaugh to give a comparison for reasonable rates versus expensive?
Ms. Cavanaugh noted that she thought
reasonable for full service firms is $220.00 - $320.00 per hour for partners, which
is typically for persons with a tax background who do pension and benefit
work. She advised that to the contrary,
a
Commissioner Rios asked if the firms who did not make the list were ones in which the BWL had actual experience with, or were there other reasons why they did not make the list?
Ms. Cavanaugh advised that the
biggest reason why they did not make the list was because they had
Commissioner Rios explained that the fact that a firm makes it on the list does not necessarily mean that they would receive an assignment. He went onto advise that if there are other persons who meet the general qualifications then they should be added to the list in light of the two-year term and regardless of redundancy. It was suggested and concurred that that Attorney, Michael Brown be added Special Counsel list. As such, Commissioner Rios also asked what happens if the Board wants to add another firm?
Ms. Cavanaugh explained that she would ask the Board for authorization to go to City Council to have the firm represented on the list if for some reason the existing list of Special Counsel were not sufficient.
On motion by Commissioner Cochran, seconded by Commissioner Rodocker, the Committee of the Whole unanimously agreed to move the Special Counsel resolution as amended to the full Board for consideration. The Special Counsel list for a two-year period from March 27, 2007 to March 27, 2009, includes the following law firms.
1. Canady Law Offices
2. Carlin, Edwards, Brown & Howe, PC
3. Clark Hill, PLC
4.
5. Dykema Gossett, PLLC
6. Foster, Swift, Collins & Smith, PC
7.
Miller,
Balis & O’Neil, PC
8. Oade, Stroud & Kleiman, PC
9. Speigel & McDiarmid
10. Varnum, Riddering, Schmidt & Howlett
11. Willingham & Cote
Policy Change Due to Passing of
Proposal 2
Corporate
Diversity and Corporate Supplier Diversity Policy
Ms. Cavanaugh noted that a few of the BWL’s policies needed to change due to the passing of Proposal 2. As such, there were a total of three policies, which includes the Defined Benefit Policy, VEBA Trust Investment Policy, and the Corporate Diversity and Corporate Supplier Diversity Policies. The Defined Benefit and VEBA policies were addressed at the Finance Committee and the Corporate Diversity Policy was forwarded to the Committee of the Whole. Ms. Cavanaugh advised that the policies were previously divided into two (Corporate Diversity and Corporate Supplier Diversity Policy) but she identified that they were practically identical and in an effort to focus on diversity with the applicant pool while still complying with Proposal 2, they removed the language that could be construed as preference, modified the document and combined the policies into one. She reported that she attempted to obtain information from other public entities to no avail and would be happy to entertain other ideas relative to the policy changes.
On motion by Commissioner Calkins, seconded by Commissioner James, to approve the suggest language changes to the Corporate Diversity Policy as presented.
Discussion: Commissioner Rios suggested that the BWL is
close to hiring a new Human Resource Direct and as such, recommended that they
receive input from that individual. He
also advised that they receive input from the Marketing Director in terms of
how to communicate the new policy.
Commissioner Rios noted that the policy changes places everyone in a
precarious position and they will need to develop a statement in response to
possible questions and criticism. He
went onto note that he strongly suggests they receive as much counsel as
possible. Commissioner Rios also
recommended that they receive feedback from the City of
Commissioner James asked Ms. Cavanaugh if she had received counsel from the City Attorney?
Ms. Cavanaugh noted that Brigham Smith, City Attorney advised her shortly after the passing of Proposal 2 that he wanted to work with her in terms of the BWL’s position. She has since had some difficulty in receiving further follow-up and has made several attempts to bring this issue to the forefront. She is also unaware of the City’s stance relative to its own policies in relation to Proposal 2. Ms. Cavanaugh went onto note that any policy can be changed and with that in mind if the Board puts something in place then it could be revisited at a later date. She also advised that if the Board decides not to forward the policy change then she recommended they pull and void the two existing policies.
Commissioner Rios advised that he was unaware how long it took the Board to develop a diversity policy. However, he was concerned with the need to move so quickly in modifying the existing policy.
Commissioner James noted that she did not think the Board was moving quickly but more responsively. She also reiterated that the Board could revisit the issue at a later date if they so choose. However, the existing policy is the Board’s responsibility to approve and they have received comment from General Counsel.
The motion carried by the
following roll call vote:
Ayes: Commissioners Calkins, Cochran, James and Zerkle.
Nays: Commissioners Rios and Rodocker.
Absent: Commissioners
Six-month Performance Review of
Corporate Secretary
Commissioner Calkins noted that the evaluation process had not been as organized as he would have liked. Typically they have a review by the various Commissioners, then they are apprised of one another’s appraisal, and frequently they will have the appointee give an impression of their performance within the past six-months.
It was noted that the Secretary Jones has written a self-assessment per suggestion by Commissioner James. After further discussion, the Board agreed to move the six-month performance review of the Corporate Secretary to the Human Resource Committee. At which time, Commissioner Cochran would take responsibility for setting a committee meeting before the next Board meeting, receiving the Commissioners completed evaluation forms, Secretary Jones’ self-evaluation memo, a salary range matrix from the Human Resource Department, and any other necessary materials.
Discuss Legal Review Process
The Board discussed the possibility of establishing a legal process or procedure to help determine how the legal process is going to function. An example was given in which another organization allows certain legal actions to be reviewed by a committee with objective criteria and recommendations received by General Counsel. It was noted that the committee acted as another checkpoint before the Board is committed to litigation. A Commissioner also noted that they previously spoke about having a Board committee review the litigation and talk with the attorneys who are handling the claims. Therefore, there would be someone who would review the billing and communicate with the attorneys. It was advised that there were other Commissioners who did this in the past and the Board currently has a void in this area. The Board suggested that is being viewed as a fluid process in which they may not have an answer soon but they can discuss what they have and move on from there. It was further advised that there may be a role for the Internal Auditor in this process as well as they should question what results they are receiving and if it is efficient in terms of how it is being done. It was suggested that the Board have a central person(s) that General Counsel speaks to for litigation matters filed against the Board and in relation to what action(s) they want to take. It was further clarified that the Board has its own counsel and there are other issues in which Ms. Cavanaugh addresses on the Board’s behalf. However, presently there is no specific Commissioner(s) that outside counsel speaks with in addressing legal issues such as the Pandy matter.
Ms. Cavanaugh clarified that the Pandy matter is not a typical circumstance. Normally, whenever a claim is brought against the Board of Commissioners then Ms. Cavanaugh would manage the case, review the bills, and communicate with the Board. However, in the Pandy case there are conflicts of interest that prevent Ms. Cavanaugh from acting on the Board’s behalf in this matter. It was further noted that the Pandy case is an anomaly and normally Ms. Cavanaugh would be able to manage such issues at the Board’s bequest. She also advised that it would be wise for the Board to establish a group as suggested to direct legal work.
The Board agreed to refer the matter to the Executive Committee to meet with Ms. Cavanaugh within the next month to establish some recommendations that could be presented to the next Committee of the Whole after the initial meeting occurs.
Other
Director of Safety
Mr. Peffley advised the Board that
they went through an exhausting process to determine the new Director of Safety
as the current Director;
Mr. Thelen noted that his background is in production and safety and he plans to pass that knowledge onto Mr. Rodriquez. He noted that Mr. Rodriquez will be seeing the Board more frequently and will also meet with different parts of the organization. Mr. Thelen noted that Mr. Rodriquez is one of the premiere people in the environmental lab, he teaches American Water Works Association classes on water purity and water licensing. His background also consists of industrial health, a Masters degree and published papers. Mr. Thelen closed by stating that they are going to work together to introduce Mr. Rodriquez to the rest of the organization.
Mr. Rodriquez advised that he was very blessed to be considered and he will work hard in the position.
Mr. Peffley also noted that Mr. Thelen was one of the persons who helped the BWL transition from eastern coal to western coal without any severe incidents. He also noted that they will be working over the next year to transfer knowledge. Mr. Peffley advised that this was another step forward in recommending what was recommended in the Human Resource Audit.
Mr. Hill clarified that they have had a vacancy in Safety that Mr. Rodriguez is filling. Therefore, Mr. Rodriquez’s position was not an addition to staff.
Discuss Legal Review Process –
Additional Comments
Charles Moore, Interim Internal Auditor added to the prior legal review discussion and suggested that when the Board engages with an outside firm they may want to obtain a budget. It could be used as a measuring stick to determine where they are relative to expenses and gage whether or not it is cost beneficial.
The Board discussed the feasibility of obtaining a legal budget when one does not know the outcome of the case. Concerned was also expressed about the level of service that the Board would receive relative to the constraints of a monetary budget. It was further suggested that the Board should make clear its expectations to legal counsel when handling a case on their behalf. After further discussion, the Board recommended that Mr. Moore’s suggestion be forwarded to the Executive Committee for consideration and he be included in future meetings for further discussion relative to said topic.
There being no further business, the Committee of the Whole adjourned at 7:19 p.m.
Respectfully submitted
Committee of the Whole
Motion by Commissioner Rios, seconded by Commissioner James, to receive the Committee of the Whole report as presented.
Action: Carried unanimously.
Resolution 2007-3-5
HUMAN RESOURCE COMMITTEE
March 27, 2007
The Human Resource Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 3:30 p.m. on Tuesday, March 27, 2007.
Human Resource Committee Chair, Robert Cochran called the meeting to order and asked the secretary to call the roll. The following committee members were present: Commissioners Robert Cochran, Joseph Graves, and Julee Rodocker. Commissioners Gary Calkins and Robin Smith (arrived 4:14 p.m.) were also present.
Absent: Commissioner
There were no public comments.
The Human Resource Committee met to discuss and review the six-month performance evaluation of the Corporate Secretary, Rhonda Jones. It was noted that with the assistance of the Human Resource Department, the committee received a packet of materials that included an excerpt from the employment agreement, job description, salary range matrix, self-evaluation, and a compilation of evaluations from the Commissioners. The evaluation materials were presented to Secretary Jones and she was allowed to review and discuss its contents with the committee. The committee also discussed the current process relative to previous annual and bi-annual reviews as well as the creation of mutually agreed upon goals and objectives. The committee addressed the timeliness of the evaluation and recommended that future performance reviews be conducted in a timely manner.
On motion by Commissioner Calkins, seconded by Commissioner Zerkle, the Human Resource Committee unanimously agreed that Corporate Secretary, Rhonda Jones is doing a good job and the Board will review said performance again in July 2007. As such, they recommended a salary increase of 3.5% to be made retroactive to January 24, 2007. A resolution will be presented to the Board under “Resolutions” order of business at the next Board meeting scheduled for March 27, 2007.
There being no further business, the Human Resource Committee adjourned at 4:26 p.m.
Respectfully submitted,
Robert Cochran, Chair
Human Resource Committee
Motion by Commissioner Cochran, seconded by Commissioner Graves, to receive the Human Resource Committee report as presented.
Discussion: Commissioner Rios noted that the Human Resource Committee was delegated with the responsibility of assembling information to make a recommendation to the full Board regarding specific action relative to the increase and performance evaluation of the Corporate Secretary.
Action: Carried unanimously.
|
A. |
Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug
Election |
RESOLVED, that the Board of Commissioners hereby adopts the restated Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug Election, as attached, effective March 28, 2007.
FURTHER RESOLVED, that the Chair is hereby authorized to execute the above referenced document on behalf of the Board of Commissioners.
--------------------
Staff Comments: This benefit plan document, Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug Election, is being restated to reflect changes in applicable laws (such as HIPAA and COBRA), to comply with the Internal Revenue Service Code and to provide for greater administrative flexibility.
--------------------
Motion by Commissioner Cochran, seconded by Commissioner Graves, to adopt Resolution 2007-3-6 for Section 125 Cafeteria Plan B: Cash or Health/Prescription Drug Election.
Discussion: The Commissioners asked how widely used was the program and what amount are the recipients receiving?
Action: Carried unanimously.
|
B. |
Post Retirement Benefit Plan Document |
RESOLVED, that the Board of Commissioners hereby adopts the restated Post Retirement Benefit Plan, as attached, effective March 28, 2007.
FURTHER RESOLVED, that the Chair is hereby authorized to execute the above referenced document on behalf of the Board of Commissioners.
--------------------
Staff comments: This benefit plan document, Post Retirement Benefit Plan, is being restated to reflect changes in applicable laws (such as HIPAA), to comply with the Internal Revenue Service Code and to provide for greater administrative flexibility.
--------------------
Motion by Commissioner Graves, seconded by Commissioner Cochran, to adopt Resolution 2007-3-7 regarding the Post Retirement Benefit Plan Document.
Discussion: The Board advised that they understood changes necessary to comply with the law and the Internal Revenue Service code but expressed concern with changes in respect to administrative flexibility relative to healthcare premiums. It was further noted that current retirees have indicated that they were promised healthcare without premiums whereas, the previous administration reported that there is no legal obligation to maintain the no co-pay provision. The Board also advised that they were concerned that such changes would be made in light of the issues BWL retirees have expressed regarding healthcare premiums. It was further noted that the revised Post Retirement Benefit Plan Document does not specifically address future retirees. As such, the Board requested that the document language reflect its intent.
Staff responded by noting that the previous document spoke to very specific coverage and they were attempting to make the document very generic to allow flexibility in making future changes. It was also advised that the intent was to address future and not present retirees due to healthcare costs. Staff further explained that the new document does not change the policy, it only adds flexibility and the Board would have to take additional action to implement premium sharing or anything else of that nature.
The Board went onto ask if they included language specific to future retirees, is there anything relative to inclusion of such language that the Board should be aware of?
Ms. Cavanaugh replied no and indicated that they could craft that language, and it would bind the hands of a future Board but only to the extent that they would have to amend the current document if they choose to do so.
The Board noted that that argument could be made for any policy currently in existence. However, each Board has the opportunity to make whatever amendments or changes necessary as time progresses. It was also advised that the Board does not want to give the impression that it binds other Boards, as this process is similar to other polices that have been implemented. After further discussion, the Board requested that all language that includes retiree premium sharing be removed from the proposed document and the original language pertaining to the policy should remain. It was also noted that staff will take the Board’s concerns into consideration and will present a redrafted document at a later date. The Board also requested a copy of the previous plan document for purpose of comparison to the new document.
Action: Carried unanimously as amended.
|
C. |
Policy Changes to Defined Benefit Investment Policy |
RESOLVED, that the Board of Commissioners hereby approves the amended Defined Benefit Investment Policy dated March 27, 2007, as attached.
--------------------
Staff comments: Proposal 2, passed by the electorate in November 2006, modified the Michigan Constitution to prohibit public entities from discriminating against, or giving a preference to, individuals or groups on the basis of race, sex, color, ethnicity, or national origin. To comply with the amendment, the BWL needed to modify certain policies, including the Defined Benefit Investment Policy. Although diversity remains an important goal of the BWL, this policy stresses providing opportunities for all individuals and groups, rather than a preference in their selection.
--------------------
Motion by Commissioner Calkins, seconded by Commissioner Cochran, to adopt Resolution 2007-3-8 regarding the Policy Changes to the Defined Benefit Investment Policy.
Discussion: Commissioner Graves asked if the word, “preference” was used in the former language?
Ms. Cavanaugh replied no and read the previous policy language. She also noted that the language of the previous policy implied preference on the basis of ethnicity and gender.
The motion carried by the
following vote:
Ayes: Commissioners Calkins, Cochran, James, Rodocker and Zerkle.
Nays: Commissioners
Resolution 2007-3-9
|
D. |
Policy Changes to VEBA Trust Investment Policy |
RESOLVED, that the Board of Commissioners hereby approves the amended VEBA Trust Investment Policy dated March 27, 2007, as attached.
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Staff Comments: Proposal 2, passed by the electorate in November 2006, modified the Michigan Constitution to prohibit public entities from discriminating against, or giving a preference to, individuals or groups on the basis of race, sex, color, ethnicity, or national origin. To comply with the amendment, the BWL needed to modify certain policies, including the VEBA Trust Investment Policy. Although diversity remains an important goal of the BWL, this policy stresses providing opportunities for all individuals and groups, rather than a preference in their selection.
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Motion by Commissioner Calkins, seconded by Commissioner Cochran, to adopt Resolution 2007-3-9 regarding Policy Changes to VEBA Trust Investment Policy.
The motion carried by the following vote:
Ayes: Commissioners Calkins, Cochran, James, Rodocker and Zerkle.
Nays: Commissioners
|
E. |
Capital Area United Way Sponsorship Renewal |
WHEREAS, for the last several years the BWL has provided corporate support for the Capital Area United Way (CAUW) by underwriting the advertising campaign for their annual fundraising drive; and
WHEREAS, the BWL’s new Purchasing Policy requires Board approval for sponsorships with a value of $5,000 or more;
THEREFORE, BE IT RESOLVED, the Board of Commissioners approves an annual sponsorship of the Capital Area United Way (CAUW) in the amount of $7,500 a year for a period of three years. Funds from this sponsorship are to be used to finance CAUW’s advertising campaign in support of its annual fundraising drive. Sponsorship will be taken from the Communications Budget for community sponsorships.
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Staff Comments: Since
2004, the BWL has approved $7,500 a year for the
The BWL has long been a supporter
of CAUW, and on March 15, 2007, the BWL was recognized by CAUW for this public
utility’s record of community support.
The BWL is one of the CAUW’s chief corporate sponsors. Agencies funded by CAUW positively touch the
lives of tens of thousands of people in the mid-Michigan community. With
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Motion by Commissioner Rios, seconded by Commissioner
Graves, to adopt Resolution 2007-3-10 regarding the Renewal of Corporate
Sponsorship for
Discussion: Commissioner Cochran introduced a friendly amendment in which the $7,500 contribution would be indexable with the cost of living over the next 3-years. He noted that if the Board did not agree to the cost of living increase then the contribution would slightly erode each of the two following years.
The friendly amendment failed.
Commissioner Rios asked how does the BWL receive recognition for its contribution?
Mark Nixon, Director of Communications advised that
Action: Carried unanimously.
|
F. |
Outside Counsel List for March 2007 through March 2009 |
RESOLVED, that the following law firms be placed on the Board of Water and Light Special Counsel approved list for a two year period from March 27, 2007 to March 27, 2009.
|
1. |
Canady Law Offices |
|
2. |
|
|
3. |
Dykema Gossett PLLC |
|
4. |
Foster, Swift, Collins & Smith, P.C. |
|
5. |
Oade, Stroud & Kleiman, PC |
|
6 |
Varnum, Riddering, Schmidt & Howlett |
|
7. |
Willingham & Cote |
|
8. |
Clark Hill PLC |
|
9. |
Carlin, Edwards, Brown & Howe, PC |
|
10. |
Miller, Balis
& O’Neil, PC |
|
11 |
Speigel & McDiarmid |
RESOLVED FURTHER, that this list be submitted to the Lansing City Attorney, and upon his recommendation and opinion, then to the Lansing City Council for final approval in accordance with the Lansing City Charter.
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Motion by Commissioner Rios, seconded by Commissioner Rodocker, to adopt Resolution 2007-3-11 regarding the Outside Counsel Recommendations for March 2007 through March 2009.
Discussion: Commissioner Smith asked if the two additional firms were added because they have expertise in areas that the other firms do not possess?
Ms. Cavanaugh noted that the additional firms are
Commissioner Rios clarified that they thought it best to have more firms on the list, as this is a two-year time period and it is not a commitment to hire the firms for a specific service.
Commissioner Smith also asked what criteria does General Counsel review in making a determination when deciding to use outside counsel?
Ms. Cavanaugh explained that she makes the determination based on the particular case and skill set needed for that particular situation. She also noted that one is able to make a choice based on the firm’s skill, personality and what they bring to the case, which could be different from case to case.
After further discussion, it was clarified that counsel reviewed the firm’s area of specialty and spoke to other managers at the BWL who had legal dealings with said firms. It was also advised that if the need arises for a specific expertise then they could seek approval to add a firm/attorney to the list if needed.
Action: Carried unanimously.
|
G. |
Amend the Corporate Diversity Policy |
None.
Commissioner Smith advised that an amended agenda for the
Joint City Council/BWL Commissioner meeting scheduled for March 29, 2007 was
received on March 27, 2007. The items
were sent to Secretary Jones, and management is actively working to address the
agenda items for the upcoming meeting.
Secretary Jones read the list of agenda items and it was noted that the
meeting is scheduled for Tuesday, March 29th at Clara’s, located at
Commissioner James noted that due to a conference she would not be in attendance and asked that her best regards be extended to City Council.
Corporate Secretary Six-month Performance Increase
RESOLVED, that the consensus of the Human Resource Committee was that Corporate Secretary Rhonda Jones is doing a good job. As such, the performance increase recommendation is the numerical average of all eight (8) Commissioners rounded to the nearest half percent. The performance raise recommendation is 3.5%.
Motion by Commissioner Cochran, seconded by Commissioner Graves, to approve Resolution 2007-3-12 regarding the Corporate Secretary’s Six-month Performance Increase.
Discussion: The Board discussed the Human Resource Committee’s recommendation as well as the information received from the Human Resource Department. The human resource packet contained information regarding the salary range, which also included the control points. It was also reported that the Human Resource Committee did not reach consensus as to whether or not the Board would conduct an annual review July 2007 as previously assumed. After further discussion, the Board noted the following:
· The Human Resource Committee is now charged with the responsibility of addressing process questions, Commissioner expectations, compilation of information for future performance evaluations, and making recommendations to the full Board for consideration.
· Secretary Jones will respond to the Board’s evaluation and provide a set of goals of objectives within 3-weeks to be carried out starting now through the end of the employment contract, July 2007.
· A special meeting maybe called to provide additional time to discuss and review mutually agreed upon goals and objectives.
Mr. Peffley notified the Board that he would not apply for the permanent General Manager position. He advised that the BWL needs to move forward in its generation portfolio. As such, he explained that the BWL needs to add generation and they have always planned for the future. Mr. Peffley went onto report that if they are going to move forward with building, which he intends to recommend, then he thinks that that would be a better fit for him. He also commented that he is willing to lend his assistance to the Board with the General Manager search if needed.
None.
None.
Max Zemer, BWL retiree advised that he has received inquires regarding the Healthcare Taskforce. He also noted that they want to participant but have not received any information from the BWL thus far.
Mr. Peffley noted that the BWL held a healthcare seminar and a letter was sent to the union requesting representation and another letter is forthcoming for the retirees next week.
Mr. Zemer advised that the letter should be sent to the
attention of
Joseph Davis, Business Manager of Local IBEW 352, asked to have information regarding the Section 125 Cafeteria Plan B and the Post Retirement Benefit Plan Document sent to him as he is receiving questions from retirees. He also asked if the cash out option in lieu of prescription healthcare affects active employees and retirees?
Mr. Davis went onto advise that he would like to speak to issues effecting bargaining employees prior to their presentation at the Board to represent the bargaining units point of view.
Ms. Cavanaugh noted that the cash out option in lieu of
would affect beneficiaries only. She
also commented that
On motion by Commissioner Calkins, seconded by Commissioner Graves, the meeting adjourned at 7:05 p.m.
/s/ Rhonda Jones, Corporate Secretary
Filed with
April 4, 2007