Approved
by the Board: November 27, 2007
MINUTES
OF THE BOARD OF COMMISSIONERS REGULAR MEETING
_________________________
Tuesday,
September 25, 2007
_________________________
The Board of Commissioners met in
the Boardroom of the Administrative Offices,
Present: Commissioners Robert Cochran, Joseph
Graves, Semone James, Peter Kramer,
Absent: Commissioner Robin
Smith.
The Secretary declared a quorum
present.
Chairperson Rios asked all to
rise for the Pledge of Allegiance to the Flag.
Chairperson Rios called the
meeting to order at 5:30 p.m.
APPROVAL
OF MINUTES
By motion of Commissioner
Zerkle, seconded by Commissioner Cochran the minutes of the July 24, 2007
regular meeting were unanimously approved.
PUBLIC
COMMENT
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.
There were no public comments.
COMMUNICATIONS
Letter from Joseph D. Davis,
Business Manager of IBEW Local 352 regarding, Changing of the Guard. The letter was presented at the July 24, 2007
Board meeting.
Received and placed on file.
Letter from an anonymous person
to J. Peter Lark, General Manager regarding actions taken on first day of
employment.
Received and placed on file.
COMMITTEE
REPORTS
Resolution
2007-9-1
COMMITTEE OF THE WHOLE
August 21, 2007
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, August 21, 2007.
Committee of the Whole Chair,
Semone James called the meeting to order and asked the secretary to call the
roll. The following members were
present: Commissioners Gary Calkins,
Joseph Graves, Semone James, Julee Rodocker, Robin Smith and Sandra Zerkle.
Absent: Commissioners Robert Cochran and
Public Comments
There were no public comments.
Update on Rules of Procedure
The
Board of Commissioners Rules of Procedure amended November 28, 2006 was
submitted to the City Attorney’s office for approval as to form. Upon approval, the item would then be sent to
City Council for consideration and final approval. As such, Brigham Smith, City Attorney
proposed several changes to the amended Rules of Procedure and discussed with
the Board of Commissioners the reasoning for said modifications relative to
style, substance and form. Upon further
discussion, the Committee of the Whole took the following actions:
On motion by Commissioner
Calkins, seconded by Commissioner Smith, the Committee of the Whole agreed to
remove section 13.1.1 from the amended Rules of Procedure.
Action:
Carried unanimously.
On motion by Commissioner
Calkins, seconded by Commissioner Smith, the Committee of the Whole agreed to
approve the Rules of Procedure as amended by City Attorney, Brigham Smith and
to move forward said item to the full Board for consideration and approval; at
which time it would then be resubmitted to City Council for final approval.
Discussion: The Commissioners further discussed whether
or not there was agreement with the authority that Mr. Smith stipulated during
their discussion of the rules and his explanation regarding various changes.
Action: Carried
unanimously.
Commissioner James introduced
the new Associate Internal Auditor, Perez Goree.
Replacing Alternate
Designated Rep for the Acid Rain Program was pulled from the agenda.
Replacement of MPPA Commissioners from BWL
Peter
Lark, General Manager noted that the primary reason for the change is to
replace the former Senior Vice President of Operations who is no longer with
the Board of Water and Light (BWL). The
commissioner and the alternates represent the BWL on the Michigan Public Power
Agency Board of Commissioners. As such,
George Stojic, Director of Strategic Planning and Development were recommended
as the BWL’s commissioner to MPPA. It
was also advised that Douglas Wood and David Bolan would remain as MPPA’s first
and second alternate commissioners, respectively.
On motion by Commissioner
Smith, seconded by Commissioner Graves, the Committee of the Whole agreed to
forward the proposed resolution to Authorize Naming of Commissioner to Michigan
Public Power Agency (MPPA) to the full Board for consideration.
Discussion: Mr. Lark confirmed that Mr. Stojic’s job
title is correct as of now. However, it
may change in the near future.
Action: Carried
unanimously.
Stonehouse III Property Development Project
Kellee
Christensen, Manager of System Integrity and Customer Projects advised that
Stonehouse III is a condominium development project in
On motion by Commissioner
Graves, seconded by Commissioner Rodocker, the Committee of the Whole agreed to
forward the proposed resolution for the Stonehouse III Development
Project: BWL Easement Transaction to the
full Board for consideration.
Action:
Carried unanimously.
National Safety Council Update
Pete
Thelen, Director of Safety reminded the Commissioners that in 2005 the National
Safety Council (NSC) audited the BWL and made a series of recommendations. The audit results became a roadmap that the
BWL is following in an effort to improve safety. The information in the packet materials
contains a list of twenty-one (21) priority items that the NSC recommended the
BWL improve. The list contains the activities,
target dates and milestones. The NSC
will be brought back to conduct another audit to substantiate the BWL efforts
and make any further comments and recommendations it deems appropriate. Mr. Thelen also advised the Commissioners of
the cooperation he has received from the IBEW and improved communications made
with employees. In addition, it was also
noted that it has taken the BWL a long time to achieve a safety culture.
General Manager’s Goals and Objectives
Peter
Lark, General Manager submitted a list of twenty-seven (27) goals and
objectives that included suggestions from himself, the Board of Commissioners,
and Dick Peffley’s previous objectives as Interim General Manager.
Commissioner Graves noted that
the list contains good ideas relative to strategic planning regarding new
generation and aging plants, which are two issues that should be addressed by
either Mr. Lark or George Stojic. He
also advised that the BWL needs a comprehensive plan that addresses the needs
of the state of
Mr. Lark notified the Board that
Mr. Stojic is in the process of developing a draft plan within the next
6-months that would address issues such as, renewable energy, energy
efficiency, purchasing power, etc. In
response to the Commissioners request to complete the draft in a shorter
timeframe, Mr. Lark asked Mr. Stojic to complete the plan in 5-months with a
note to the Board that he would request additional time to finish said draft if
necessary.
In addition, the Committee of the Whole also
discussed whether or not the objectives dated August 16, 2007 reflect the
measures that the Board would use to evaluate the General Manager’s
performance. After further discussion, the
committee suggested that Mr. Lark submit to the Human Resource Committee a
prioritized list of goals obtainable within a one-year timeframe.
On motion by Commissioner
Calkins, seconded by Commissioner Smith, the Committee of the Whole agreed to
approve the General Manager’s Objectives document dated August 16, 2007 and to
also have the General Manager prioritize the items.
Discussion: The Commissioners discussed the need for
criteria to be laid out in which to evaluate Mr. Lark. They also discussed the standard form that
the Commissioners traditionally use to evaluate the General Manager and other
appointees as well as the need to place the objectives within said format. The Committee of the Whole referred the
prioritization matter and the development of a suitable evaluation format to
the Human Resource Committee.
Upon further discussion,
Commissioner Smith introduced a friendly amendment to change the title of the
document from “General Manager’s Objectives” to “BWL Priority Focus” that the
General Manager will oversee. The amended
document will also be submitted to the full Board for consideration and
approval.
Commissioner Calkins accepted
the friendly amendment.
Action:
Carried unanimously.
Other
Interim
Director of Operations. The ‘interim’ title for the Director of
Operations position has been removed.
Dick Peffley has formally accepted the position, which may be changed to
Executive Director of Operations although, that decision has not yet been
made. Mr. Lark has worked closely with
Mr. Peffley who has an excellent working knowledge of Eckert and Erickson
Station. He also advised that with the
addition of Susan Devon, George Stojic, Dick Peffley and himself the BWL is
second to no other utility company in the state of
Lead Pipe Replacement.
Commissioner Calkins noted that he received a complaint that the BWL is
leaving lead pipe in the ground when working on lead pipe replacements. Staff noted that the BWL attempts to pull the
lead out through the ground as opposed to boring it. However, sometimes the lead will break
depending on its strength. After brief
discussion, Mr. Lark advised that he would note the matter regarding
Commissioner Calkins request for further clarification regarding the
aforementioned subject. He also notified
the Commissioners that the BWL is currently pricing a new truck for both lead
pipe removal and tree trimming, as he would like to accelerate the lead pipe
replacement program. In addition, Mr.
Lark verified that he has not reviewed the existing tree trimming
contract. However, he is looking to
increase BWL employee workload relative to tree trimming.
The Commissioners discussed
concerns surrounding tree-trimming issues and asked the General Manager to
review the matter for future consideration.
New Customer Load.
The BWL is expecting new electric and water load with the building of a
new 15-story condominium development project in downtown
The Commissioners noted the need
for further discussion regarding steam, the cross subsidization of said utility,
steam rates and the development of a strategic plan that takes those items into
account.
Executive Summaries.
The Commissioners asked that executive summaries and presenters names be
included with future presentations as a standard course of operation. In the past, it was found to be helpful when
meeting and/or receiving information from staff members.
MMEA.
The BWL rejoined the Michigan Municipal Electric Association (MMEA),
which will be very beneficial in moving forward to address the 90% mercury rule
and its affect on Eckert Station.
Proposed Revision to Public
Act 141. Mr. Lark is scheduled to meet with Frank
Accavitti, Chairman of the Energy and Technology Committee in the House of
Representatives to look at changing the decision date relative to the BWL’s
participation in deregulation. If the
BWL chooses to participate then the city of
Executive Report.
Commissioner Smith asked Mr. Lark to provide an executive report to the
Board of Commissioners that highlights various items on a monthly basis via
email. She also advised that if additional items arise then the Board would
want to be aware of those topics as well.
It was further noted that the executive report did not have to contain
explicit explanations relative to its content.
There being no further business, the meeting
adjourned at 8:11 p.m.
Respectfully
submitted,
Semone M.
James, Chair
Committee of
the Whole
Motion by Commissioner Zerkle, seconded by
Commissioner Rodocker, to receive the Committee of the Whole report as
presented.
Action: Carried
unanimously.
Resolution
2007-9-2
AD HOC COMMITTEE
September 11, 2007
The Ad Hoc Committee on
Workforce Development met at the Executive Offices, Lansing, beginning at 11:10
a.m. on Tuesday, September 11, 2007.
Ad Hoc Committee Chair, Sandra
Zerkle called the meeting to order and asked the secretary to call the
roll. The following members were
present: Commissioners Cochran, Santiago
Rios, Julee Rodocker (arrived at 11:21 a.m.) and Sandra Zerkle. Alternate committee member Joseph Graves (arrived
at 11:26 a.m.) was also
present.
Absent: None
Public Comments
There were no public comments.
Discuss Parameters of Workforce Development Committee
The
Ad Hoc Committee on Workforce Development met to discuss the committee’s
parameters. As such, various topics were
reviewed in relation to the development of the Board of Water and Light’s (BWL)
employee workforce. Listed below is a
brief summary of the topics addressed during said meeting.
Lineman shortage – It was
suggested that the BWL re-establish hiring entry level persons such as
groundsmen or truck drivers for a feeder program that would lead to a
journeyman apprenticeship. The in-house
program would provide employees the opportunity to show ability and aptitude
for the journeyman apprenticeship while allowing the BWL to address lineman
shortages with an internal program. It
was noted that recent BWL wage increases have mad hourly wage rates competitive
with other companies. However, there
might be issue with the BWL’s deferred compensation relative to other
utilities. In addition, it was
recommended that Denise Mulder, Human Resource Director seek non-monetary
enhancements unique to the lineman that would give them a sense of pride and
heightened value within the organization, i.e. lab coats, BWL shirts, etc. The Commissioners also suggested that Ms.
Mulder provide a list of possible items to the Board of Commissioners for
further consideration.
High School Partnerships – The
committee discussed the possibility of creating a partnership with the
Diversity – The committee
expressed a desire to incorporate diversity into workforce development,
recruitment of new hires, internal promotions, and procurement. It was noted that the committee would like
the BWL Diversity Coordinator to attend a future Ad Hoc Committee meeting for
further discussion on said topic. The
General Manager may also have to address purported issues of frustration and
lack of support from various supervisory levels relative to diversity
initiatives. In addition, it is the
committee’s desire to ensure that the BWL is reaching out to a diverse
population and that diversity is a part of the process.
Mr. Lark noted that in July 2007
Shan Shaw, Administrator/Diversity Omsbudmen was charged with the
responsibility of creating and submitting a diversity plan by November 4,
2007. Mr. Lark also advised that they
would be open to making sure that the BWL mirrors its community.
Ms. Mulder further reported
efforts by the Human Resource Department in an effort to draw a more diverse
population, which include broader recruitment forms, campus recruiting, posting
on college job boards, and increased electronic recruitment. The program will be finalized by January
2008.
Accurate and Valid Data – In
moving forward with developing and maintaining an adequate and well prepared
workforce, it is necessary to receive accurate and factual information. A cost benefit analysis is an essential tool
that would aid the Commissioners in making various decisions as they move
forward.
Contractor Work – The committee
suggested reviewing the economic feasibility of allowing external contractors
to do prime work for the Water Department.
To this regard, the broader scope of the committee is to re-evaluate the
BWL’s capacity and what it should be, make decisions, give direction, and
provide the resources and tools necessary for management to carry out the tasks
at hand. A request was also made to
receive definitive information from staff on the total number of dollars being
spent on contractor work. In addition,
it was noted that the Commissioners do not have enough sufficient information
to express a specific opinion on the direction the BWL should take relative to utility
rates and employee staffing levels.
Mr. Lark noted that the BWL is
in the process of securing two new trucks that will allow for the creation of a
tree trimming and water crew. The BWL
will hire 3-4 persons for each crew, which will allow for a decrease in work
currently awarded to outside contractors.
He also advised that the BWL is doing an outstanding job with tree
trimming. As the former Chairman of
Michigan Public Service Commission, they received a significant number of calls
regarding tree trimming, which is the nature of the utility industry. Mr. Lark also reported that they are ahead of
schedule with lead water replacements and the BWL is the only utility in the
country with such a program. The grogram
will eventually end and the BWL should be careful not to over hire for that
particular project; although there is no danger of over hiring in the Water
Department in and of itself. He further
noted that a good estimated employee count for the BWL would be 850 employees.
Energy Rates – It was advised
that the BWL electric rates are lower than Consumers Energy (CE) due to smart
investment decisions made within the last 5 – 10 years. CE’s rates are approximately 20% higher than
the BWL’s and they also have a rate increase before the MPSC for
$200,000,000. It was noted that based on
certain items the BWL’s rates should be lower than CE’s. However, there are infrastructure
improvements, water bond issues, environmental concerns, and future generation
needs that the BWL must address in the near future.
Combined Sewer Overflow (CSO)
Project – The BWL previously worked with the City of
Joint Technical Training Committee
(JTTC) – Dolores Appling, President IBEW Local 352 announced that the BWL held
its second JTTC meeting and they are in the process of sending surveys (due in
30 days) to assess departmental training needs.
Department Training Committees are also being formed who will aid in
determining respective departmental training needs. In addition, two
After further discussion, the Ad
Hoc Committee expressed its pleasure with the direction and optimism of the
meeting. They also agreed to meet on a
monthly basis and directed staff to report on the above items at the next
meeting, which will be scheduled for October 2007.
There being no further business,
the meeting adjourned at 12:51 p.m.
Respectfully
submitted,
Sandra
Zerkle, Chair
Ad Hoc
Committee
Motion by Commissioner James, seconded by
Commissioner Cochran, to receive the Human Resource Committee report as
presented.
Action:
Carried unanimously.
Resolution
2007-9-3
September
13, 2007
The
Human Resource Committee of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 4:10 p.m. on Thursday, September 13, 2007.
Human
Resource Committee Chair, Julee Rodocker called the meeting to order and
initially received information from staff.
The Chair asked the secretary to call the roll after a quorum of members
was available at 4:38 p.m. The following
committee members were present:
Commissioners Robert Cochran, Julee Rodocker, and Sandra Zerkle (arrived at 4:38 p.m.).
Absent: Commissioner Joseph Graves.
Public
Comment
There
were no public comments.
General Manager Goals 2007-08
The
Committee of the Whole met August 21, 2007 and directed J. Peter Lark, General
Manager to submit a list of goals and objectives to be used in his performance
evaluation for fiscal year end 2008. As
such, Mr. Lark submitted the following items in response to the committee’s
direction. He also advised the Human
Resource (HR) Committee that he has reviewed the evaluation materials forwarded
to him, and he is fine with whatever evaluation tool the Board agrees to
utilize.
General
Manager Goals FY 2007-08
1. Improve relations between management and the
workforce, with particular emphasis on developing a more congenial and
productive relationship with the union.
Eliminate “Management vs.
2. Improve external relations – develop a
greater community presence by supporting key components of our community (e.g.
Sparrow Foundation and educational resources.)
3. Improve relations with our fellow municipal
utility entities, in particular the MMEA and the MPPA.
4. Re-visit the decision to withdraw from the
MPPA Power Pool.
5. Prepare draft Strategic Plan for the potential
development of added generation resources on the BWL system.
6. Work to reverse preliminary MDEQ mercury
ruling that as of 2015 will effectively limit BWL to the operation of two of
the three smaller units at Eckert, and none of the three larger units.
7. Continue working with
8. Make recommendation for water bonding.
9. Develop economic development policy for
existing and new customers.
Commissioner Rodocker noted that
the Human Resource Committee would reach consensus regarding, which evaluation
tool to use for the General Manager and will notify him accordingly. It was further advised that the Board of
Commissioners is attempting to utilize a forward thinking tool as they advance
with the evaluation process.
Denise Mulder, Human Resource
Director advised that it is easy for Board appointees to be forgotten because
they are not a part of the Board of Water and Light’s (BWL) evaluation
process. The BWL conducts performance
evaluations after the close of the fiscal year.
However, the appointees are on a contractual basis, which does not
coincide with the fiscal period. As
such, the Commissioners may want to consider altering the next contract length
to allow the appointees performance reviews to fall within the BWL fiscal year
cycle so that all reviews would take place at the same time. Ms. Mulder also noted that the HR Department
is presently modifying their performance review format. Once finalized the HR Department could
forward a copy of the format to the Board of Commissioners to consider using as
a tool for the appointees, except for the General Manager who would typically
have a slightly different format. The
new format will be in place for the July 1, 2008 review cycle.
After further discussion, the
Human Resource Committee took the following actions:
On motion by Commissioner
Cochran, seconded by Commissioner Zerkle, the Human Resource Committee
recommended that the full Board approve the suggestion to place the appointees
in the BWL system and adjust the contracts accordingly in each case and to also
evaluate the new Human Resource Department form after it has been revised to
see if it will work for the Board of Commissioners. In the meanwhile, it was further recommended
that the Board continue to use its existing evaluation form until further
notice.
Action:
Carried unanimously.
On motion by Commissioner
Cochran, seconded by Commissioner Rodocker, the Human Resource Committee agreed
to approve the General Manager’s Goals for Fiscal-Year 2008 as submitted. The item will be forwarded to the full Board
for consideration and approval.
Action:
Carried unanimously.
Discuss Six-Month Review Process for the Director of
Internal Audit
Susan
Pifer, Director of Internal Audit began work at the BWL on March 26, 2007. As such, her six-month anniversary date is
September 26th. Presently, the HR Committee is not scheduled
to meet again until November 10th, which would be Ms. Pifer’s
7½-month anniversary. After brief
discussion, the HR Committee agreed to schedule another meeting for October
2007 in order to conduct the Director of Internal Audit’s six-month performance
review in a timely manner. It was also
noted that the Board would utilize the same format as was used for the
Corporate Secretary. In addition, Wendy
Bradley, HR
System Consultant will
process the evaluation materials and compile the results on behalf of the Board
of Commissioners. Ms. Pifer will also
forward a copy of her performance factors to the HR Department.
The HR Committee agreed to
schedule another meeting for Tuesday, October 9th at 11:00 a.m. for
the purpose of conducting the Director of Internal Audit’s six-month
performance review.
Annual Performance Review of Corporate Secretary
Rhonda
Jones, Corporate Secretary and Board appointee requested a closed session for
the purpose of receiving her contractual year-end performance evaluation as
permitted by Open Meetings Act exemption MCL 15.268(a). (4:55 p.m.)
The roll was called.
Yeas: Commissioners Cochran, Rodocker, and Zerkle.
Nays: None.
Absent: Commissioner Graves.
Carried unanimously.
Moved by Commissioner Zerkle,
seconded by Commissioner Cochran that the Human Resource Committee returns to
open session.
Carried unanimously.
The Human Resource Committee
meeting reconvened in open session at 5:12 p.m.
Upon conclusion of the closed
session, the Human Resource Committee took the following actions:
On motion by Commissioner
Cochran, seconded by Commissioner Zerkle, the Human Resource Committee
recommends to the full Board changing the cycles to agree with the company
cycle, which represents reviews in August for the three appointees and adjust
the contracts accordingly.
Action:
Carried unanimously
On motion by Commissioner
Cochran, seconded by Commissioner Zerkle, the Human Resource Committee
recommends to the full Board that Rhonda Jones be reappointed as Corporate
Secretary and that her wage be raised by 3.25% effective July 23, 2007.
Discussion: Ms. Mulder recommended July 23, 2007 as the
effective date of the wage increase, as it coincides with Secretary Jones’
anniversary date.
Action:
Carried unanimously.
There being no further business,
the meeting adjourned at 5:19 p.m.
Respectfully
submitted,
Julee
M. Rodocker, Chair
Human
Resource Committee
Motion by Commissioner Kramer, seconded by
Commissioner Cochran, to receive the Human Resource Committee report as
presented.
Action:
Carried unanimously.
Resolution
2007-9-4
COMMITTEE OF THE WHOLE
September 18, 2007
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, September 18, 2007.
Committee of the Whole Chair,
Semone James called the meeting to order and asked the secretary to call the
roll. The following members were
present: Commissioners Robert Cochran,
Semone James, Peter Kramer, Santiago Rios, Julee Rodocker, Robin Smith, and
Sandra Zerkle.
Absent: Commissioner Joseph Graves
Public Comments
There
were no public comments.
Designated Development Fund
J.
Peter Lark, General Manager presented a proposed resolution in which staff
sought approval for the creation of a designated development fund. The establishment of the fund would allow the
Board of Water and Light (BWL) to take steps towards addressing future
infrastructure needs. It was noted that
the proposed resolution would also represent the Board’s acceptance of the fund
in theory with staff recommended guidelines to follow.
The Committee of the Whole discussed
the creation of the designated development fund and generally supported what is
believed to be a good visionary idea.
However, committee members expressed a desire to receive additional
information and explanation regarding the theory of the fund, future funding
options, whether or not the fund should be a part of the operations and
maintenance budget, guidelines that speak to the specific purpose of the fund,
and verbiage changes to the proposed resolution. The committee also expressed concern regarding
the characterization of the funds as excess, rather than a more accurate
terminology such as unallocated. After
further discussion, the committee directed staff to provide additional
information and re-present the proposal pending changes to the original
resolution.
Utility Rate Adjustments
Susan
Devon, Chief Financial Officer presented a proposed resolution regarding a
public hearing concerning electric, water, and steam rate increases. The resolution proposed rate increases (of
electric 4%, water 6%, steam 6%) similar to what was approved in the fiscal
year 2008 budget on May 22, 2007.
However, in addition to the original 4% electric rate increase, staff
proposed an additional 1% electric rate change, whereas, the increase would
help mitigate budgeted net losses and future infrastructure concerns. It also was noted that the BWL has certain
statue guidelines that it must follow in order to propose and approve utility
adjustments. Therefore, the proposed
resolution was presented in an effort to move forth a public hearing so that
rate changes may take effect January 1, 2008.
The committee members discussed
the proposed resolution and explained to staff past practice whereas, staff
would typically present various rate cases and supporting documentation to the
Finance Committee, which would also include a PowerPoint presentation. It was also noted that although the fiscal
year 2008 budget was passed with the aforementioned rate changes, the Board of
Commissioners would like to receive additional data in order to determine if
the budgeted rate adjustments should be modified. The committee also asked staff to present a
budget that does not have a net loss in the first or second fiscal year. After further discussion, Commissioner James
recommended that the matter be referred to the Finance Committee. Staff was also advised that they could
request a special Finance Committee meeting if deemed necessary.
In response to the committee’s
comments, Mr. Lark noted that staff attributed some strength to the fact that
the Board previously approved the rate changes in theory at the May 22, 2007
board meeting. Nevertheless, he advised
the committee that staff would present the requested information at the next
Finance Committee meeting, as directed by the Committee of the Whole. It was also clarified that by doing so, there
is a possibility that the rate change will not take effect January 1, 2008 as
originally anticipated. And in response
to a request to see capital outlays, Mr. Lark noted that they are presently
unable to estimate capital outlay costs relative to possible future
infrastructure projects at this time.
Agenda Items for
The
committee briefly reviewed the agenda items for the Joint BWL/City Council
meeting scheduled for Thursday, September 27, 2007 at 11:30 a.m. located in the
boardroom at
Management Updates:
Tree
Trimming – Dick Peffley,
Executive Director of Operations gave a brief update regarding tree
trimming. It was noted that Wright Tree
Service presently has seven (7) trucks/crews servicing BWL territories. However, that number should be reduced to
five (5), as the BWL will have a company sponsored crew and the City of
Community Sponsorships – Cheval Breggins, Communications/Public
Relations Representatives gave a brief update of community sponsorships for
fiscal year to date 2008. The update
provided information relative to sponsorship requests that were either approved
and/or denied as well as a list of upcoming events that contain BWL
involvement.
Other
New
Commissioner. Commissioner James introduced Peter W. Kramer
as the latest addition to the Board of Commissioners.
Legal Updates. Commissioner
Smith asked that Brandie Ekren, Associate Attorney provide an update to the
Board on the Joseph Pandy legal matter at a future date.
There being no further business,
the meeting adjourned at 7:10 p.m.
Respectfully
submitted,
Semone
James, Chair
Committee of
the Whole
Motion by Commissioner James, seconded by
Commissioner Cochran, to receive the Committee of the Whole report as
presented.
Action:
Carried unanimously.
Resolution
2007-9-5
FINANCE COMMITTEE
September 19, 2007
The Finance Committee met at the
Executive Offices, Lansing beginning at 4:00 p.m. on Wednesday, September 19,
2007.
Finance Committee, Robin Smith
called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Semone James, Peter Kramer, and
Robin Smith. Alternate committee member
Robert Cochran was also present.
Absent: Commissioner
Public Comments
There
were no public comments.
FY 2007 Audited Financial Statements: Enterprise & Trust Funds
Doug
Rober, Managing Partner and Kristine Latchaw, Audit Manager of Plante &
Moran were introduced to the Finance Committee.
The auditors were present to review the year-end June 30, 2007 Audited
Financial Statements for the Board of Water and Light (BWL) Enterprise
Funds. Final copies of the audited
reports were distributed, in addition to copies of the auditor and management
letters, and copies of supplemental materials for Plante & Moran’s
presentation. Mr. Rober briefly reviewed
the auditor letter and noted that samples of the organizations high risks areas
were taken in order to provide an unqualified opinion. The letter also sited sensitive accounting
estimates regarding the North Lake Lansing and
·
Known
misstatements: To record accounts
payable that was not accrued at year-end due to late-arriving invoices or
receiving's
·
Estimate
Adjustments: To adjust outstanding CSO
liability to calculated amount based on actual costs incurred to date on
project and;
·
To
record IBNR liability for worker’s compensation self-insurance
·
Implied
Adjustments: None
Kristine Lachaw noted that all
four reports that include the Enterprise Fund, Defined Benefit Plan, Pension Plan
and the Retiree Benefit Plan and Trust were unqualified opinions, which is the
highest rating that Plante & Moran could give. Ms. Lachaw reviewed the graphical information
contained within the supplemental report that addressed the following topics
·
Comparison
of Operating Revenue by utility category from 2004 – 2007.
·
Comparison
of Operating Expenses by expense category from 2004 – 2007.
·
Comparison
of Significant Power Costs from 2003 – 2007.
·
Comparison
of Operating Income (Loss) from 2003 – 2007.
·
Comparison
of Kilowatt Hours Generated Versus Purchased from 2003 – 2007.
·
Comparison
of Sales Source of Kilowatt Hours Generated from 2003 – 2007.
·
Comparison
of Bond Debt Service Requirements from 2007 – 2012.
Doug Rober briefly reviewed the
Statement of Net Assets for the Enterprise Fund and noted that the accruals are
consistent with no new disclosure requirements, as they are similar to what
they were in the past.
Kristine Latchaw also reviewed
Plante & Moran’s management letter comments, which also include BWL
management responses. A brief summary of
the manager comments are presented below:
New Auditing Standards – There were changes made to the auditing
rules in 2006. The new standards
significantly change how audits are conducted and communicated to the Board of
Commissioners. In addition, the new
standards will also bring nonpublic companies and governmental bodies into
closer alignment with organizations currently under Sarbanes-Oxley. As part of the new guidelines, Plante &
Moran also reported that they are not aware of any significant deficiencies in
account procedures or internal controls.
Therefore, nothing was reported.
In addition, as a result of the new rules Plante & Moran will also
work with management in reviewing and documentation of internal controls. In response to a committee question, Ms.
Latchaw noted that the presentation materials will not change. However, time spent will increase and become
more staggered throughout the year as opposed to primary year-end auditing
work.
Commissioner Smith asked that
Plante & Moran provide guidance to Susan Pifer, Director of Internal Audit,
as this will be a new process for the BWL.
She also asked that it be communicated to the general public and City
Council so as to ensure that the changes being made are not result of BWL past
practice.
Stores Inventory – The BWL conducts cycle counts of
stores inventory items throughout the year.
It was determined that cycle counts and system records are not
sufficient for a year-end inventory, and physical year-end inventories are
costly. Therefore, it was recommended
that staff and the Internal Audit Department develop a cycle counting system
that meets all reporting and auditing needs.
Journal Entry Review and
Approval – It was
reported that several journal entries did not reflect evidence of a
reviewer. As such, it was recommended
that the BWL maintain adequate documentation of the review being performed, as
it will aid in the implementation of the new auditing standards previously
discussed.
Capital Assets – Capital assets are the primary asset on
BWL financial statements. Therefore, it
is essential that they possess a thorough understanding of the assets, and that
management and accounting staff reviews all procedures and internal control process
related to said topic. It was also noted
that self-constructed assets are difficult and audit risky because of the time
and materials included and the possibility of manipulating those figures. Therefore, the process used relative to those
items should be consistent with generally accepted accounting principles.
Accounting for Derivatives – If the BWL decides to withdraw from the
MPPA Power Pool and enter into arrangements with more risk then it could be
considered derivatives for accounting purposes.
Therefore, should the BWL engage in instruments designed to leverage or
hedge risk in an effort to ear a higher return on power sales; then it should
consider guidance from an outside third party to assist in implementing the
accounting and internal control procedures.
Business Continuation
Planning – The BWL has a
significant number of persons who are nearing retirement. It is critical that the BWL continue to take
steps to plan and implement a business continuation plan to prepare for the
departure of key personnel.
RFP for Investment and Banking Services
Susan
Pifer presented a proposed Finance Committee action, which indicated a change
in committee members from Sue Flores, Charles Moore and Susan Pifer to Sue
On motion by Commissioner
James, seconded by Commissioner Cochran, the Finance Committee agreed to adopt
the proposed committee action pertaining to the changes regarding the
Subcommittee Plan.
Action:
Carried unanimously.
Sarbanes-Oxley Subcommittee
Ms.
Pifer presented a proposed Finance Committee action whereas, she and Sue Devon,
Chief Financial Officer will co-chair a subcommittee to study Sarbanes-Oxley or
a equivalent internal controls implementation; and make a recommendation to the
Finance Committee in November 2007 regarding said findings.
Ms. Pifer also provided
information regarding a one-day seminar in Metro Detroit, Michigan entitled,
“Sarbanes-Oxley Benefiting from Compliance”.
The information was forwarded to the Board of Commissioners and various
staff persons to determine their level of interest in attending.
On motion by Commissioner
James, seconded by Commissioner Cochran, the Finance Committee adopted the
proposed committee action recommending the formation of a Sarbanes-Oxley
Subcommittee with recommendations to be made to the Finance Committee in
November 2007.
Action: Carried
unanimously.
Signature Authorizations
Sue
Devon presented four proposed signature authorization resolutions necessary due
to recent BWL staff and job title changes.
The Finance Committee took the following actions:
On motion by Commissioner
Cochran, seconded by Commissioner James, the Finance Committee agreed to
approve the Authority to Sign Checks resolution and forward it to the full
Board for consideration and approval.
Action:
Carried unanimously.
On motion by Commissioner
Cochran, seconded by Commissioner Kramer, the Finance Committee agreed to
approve the Delegation of Authority resolution and forward it to the full Board
for consideration and approval.
Action:
Carried unanimously.
On motion by Commissioner
Cochran, seconded by Commissioner Kramer, the Finance Committee agreed to
approve the Authority to Invest Operating and Pension Funds resolution and
forward it to the full Board for consideration and approval.
Action:
Carried unanimously.
On motion by Commissioner
Cochran, seconded by Commissioner Kramer, the Finance Committee agreed to
approve the Automated Transaction Clearing House (ACH) Policy resolution and
forward it to the full Board for consideration and approval.
Action:
Carried unanimously.
Other
Commissioner
Smith noted that she intends to recommend to the Executive Committee that they
consider forming an Audit Committee so that they may separate Finance and Audit
Committee items respectively.
There being no further business,
the meeting adjourned at 4:54 p.m.
Respectfully
submitted,
Robin M.
Smith, Chair
Finance
Committee
Motion by Commissioner Rios, seconded by
Commissioner Cochran, to receive the Finance Committee report as presented.
Action:
Carried unanimously.
Resolution
2007-9-6
EXECUTIVE COMMITTEE
September 20, 2007
The Executive Committee of the
Board of Water and Light met at the Executive Offices, Lansing beginning at
4:00 p.m. on Thursday, September 20, 2007.
Executive Committee Chair,
Santiago Rios called the meeting to order and asked the secretary to call the
roll. The following members were
present: Commissioners Robert Cochran,
Semone James, Santiago Rios, and Robin Smith.
Absent: None
Public Comments
There
were no public comments.
Board of Commissioners Budget
The
Executive Committee reviewed and discussed the Board of Commissioners budget
update for fiscal year to date 2008.
Following their discussion, the Executive Committee directed Susan
Pifer, Director of Internal Audit to review the Commissioner’s budget to ensure
that the correct budget items are allocated to the appropriate responsibility
areas (RA). They also asked Ms. Pifer to
specifically review the cost and budget allocations associated with the
Collaborative Economic Development Hope Loan and cellular phone costs. In addition, the committee asked that an
itemized expense report be included with future Board budget updates.
In response to a committee
question, J. Peter Lark, General Manager noted that employees are allowed to
utilize Board of Water and Light cell phones for personal use, provided they do
not engender additional costs.
Review Process for Expense Reports
The
Executive Committee reviewed the budget updates and expenses reports for Board
appointed employees. Ms. Pifer noted
that she intends to interview two firms in response to the RFP for the SAP
Controls Assessment. As a result, the
Board will be invited to sit in on the interviews if they choose to do so. In response to a committee question, staff
was unsure if the BWL currently has a policy denoting a preference for local or
Discuss Board of Commissioners Retreat
The
Executive Committee discussed the possibility of holding a Board retreat in
which the Board of Commissioners and executive staff would have opportunity to
discuss recent and future changes as well as the strategic plan. It was suggested that the BWL conduct a 2-day
retreat in which the Board of Commissioners would meet to discuss various
issues on day one and then meet with executive staff on day two. After brief discussion, the Executive
Committee took the following action:
On motion by Commissioner
James, seconded by Commissioner Cochran, the Executive Committee agreed to
support the development of a cost effective 2-day Board retreat in which the
Commissioners would meet together on day one and management would meet with the
Board of Commissioners on day two.
Action:
Carried unanimously.
Upon further discussion, the
Executive Committee also agreed that a facilitator would be helpful in giving
input on the strategic plan and maintaining focus during the Commissioners
session. In addition, it also appears
that a facilitator may not be necessary during the second phase of the retreat
with the Board of Commissioners and executive staff. However, the committee agreed to allow
Commissioner Rios to work with Secretary Jones in planning the retreat as such,
a proposal will be submitted to the Executive Committee at the next meeting.
Discuss Legal Review Process
The
Executive Committee agreed to table the legal review process discussion until
further notice.
Other
The
General Manager provided Executive Committee with information pertaining to a
potential business deal with the City of
There being no further business,
the meeting adjourned at 5:28 p.m.
Respectfully
submitted,
Executive
Committee
Motion by Commissioner James, seconded by
Commissioner Cochran, to receive the Executive Committee report as presented.
Action:
Carried unanimously.
MANAGER’S
RECOMMENDATIONS
Resolution 2007-9-7
|
A. |
Naming of Commissioner
to Michigan Public Power Agency |
RESOLVED,
That George Stojic, Executive Director of Strategic Planning and Development,
be named as the BWL commissioner to MPPA; and
RESOLVED FURTHER, That Douglas
Wood and David Bolan remain as MPPA’s first alternate commissioner and second
alternate commissioner, respectively.
--------------------
Staff
Comments: The change of primary commissioner is
necessary to replace William Cook Jr. who is no longer employed at the
BWL. The commissioner and the alternates
represent the BWL on the MPPA Board of Commissioners. The alternates represent the BWL in the event
the commissioner is not available.
--------------------
Motion by Commissioner Rios, seconded by
Commissioner Rodocker, to adopt Resolution 2007-9-7 for the Naming of
Commissioner to Michigan Public Power Agency.
Action:
Carried unanimously.
Resolution 2007-9-8
|
B. |
Stonehouse III
Development Project: BWL Easement Transactions |
RESOLVED, That the Board of
Commissioners hereby authorize the General Manager to release the easements
related to the Stonehouse III development project as presented at the August
21, 2007, Committee of the Whole meeting, provided the Lansing Board of Water
and Light receives adequate easements to meet its operational needs upon the
General Manager’s review.
--------------------
Staff Comments: Stonehouse III, LLC and the City of
--------------------
Motion by Commissioner Rios, seconded by
Commissioner James, to adopt Resolution 2007-9-8 for the Stonehouse Development
Project: BWL Easement Transactions.
Action:
Carried unanimously.
Resolution 2007-9-9
|
C. |
Fiscal Year 2007
Audited Financial Statements |
RESOLVED,
That the fiscal year 2007 Audited Financial Statements for the Board of Water
and Light Enterprise Fund have been reviewed and is hereby accepted as
presented.
FURTHER RESOLVED, That the Corporate
Secretary is hereby directed to file a copy of the fiscal year 2007 Audited
Financial Statements of the Board of Water and Light Enterprise Fund and the
report on auditing procedures with the State Treasurer as required by the
Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended) no
later than December 31, 2007.
FURTHER RESOLVED, That the
Corporate Secretary is hereby directed to file a coy of the fiscal year 2007
Audited Financial Statements of the Board of Water and Light Enterprise Fund
with the City of Lansing no later than October 15, 2007.
--------------------
Motion by Commissioner Cochran, seconded by
Commissioner James, to adopt Resolution 2007-9-9 for the Fiscal Year 2007
Audited Financial Statements.
Action:
Carried unanimously.
Resolution 2007-9-10
|
D. |
Authority to Sign
Checks |
RESOLVED, That Board of Water
and Light Policy 1-01 “Authority to Sign Checks” is hereby amended as follows:
The signatures of not less than two
(2) of the following officers shall be required to sign checks for the general
checking account at National City Bank and the payroll/pension checking account
at Standard Federal Bank.
1. General Manager
2. Chief Financial Officer
3. Corporate Secretary
This resolution supersedes
Resolution 2004-01-07.
--------------------
Staff
Comments: Due to organizational and title changes, this
resolution is necessary to incorporate the new title of Chief Financial
Officer.
--------------------
Motion by Commissioner James, seconded by
Commissioner Zerkle, to adopt Resolution 2007-9-10 for the Authority to Invest
Operating and Pension Funds.
Action:
Carried unanimously.
Resolution 2007-9-11
|
E. |
Delegation of
Authority |
RESOLVED, That Board of Water and Light Policy 1-03 “Delegation of Authority” is