Approved by the
Board: November 18, 2008
MINUTES OF THE BOARD OF COMMISSIONERS’ MEETING
____________________________
Tuesday, September 23, 2008
____________________________
The Board of Commissioners met in the Boardroom
of the Administrative Offices,
Present: Commissioners Robert Cochran, Semone James,
Peter Kramer, Frank Lain, Julee Rodocker, Tracy Thomas and Sandra Zerkle.
Absent:
Commissioner Tony DeLuca.
The Secretary declared a quorum present.
Chairperson Lain called the meeting to order
at 5:30 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Kramer, seconded by
Commissioner James, to approve the minutes of the regular meeting held July 22,
2008 and the special board meeting held August 12, 2008.
Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE
PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING TO COMMENT ON ANY MATTER NOT
ON THE AGENDA MAY DO SO IMMEDIATELY PRIOR TO ADJOURNMENT.
Carol Rall of
Lee Filfelske of
David Gard, Energy Program Director with the
Michigan Environmental Council echoed Carol Rall’s sentiments and also asked
the Board to consider expanding the public comment period to allow for indepth
discussion with respect to the proposed coal plant.
Anne Woiwode of
Steve Rall of
Brian Featy of East Lansing urged the Board to delay making a decision regarding the coal plant until its costs can be fully evaluated. He further noted that both presidential candidates support a carbon tax initiative and suggested the Board wait to see what will happen on the national level before making a local level decision.
Verbal
communication of July 24, 2008 from Steve Bell opposing general manager’s
salary increase.
Received
and placed on file.
Email
of July 24, 2008 from Ann-Marie Smith opposing general manager’s salary
increase.
Received
and placed on file.
Email
of July 24, 2008 from Jason Allen opposing general manager’s salary increase.
Received
and placed on file.
Email
of July 24, 2008 from Nick Pitlosh and Curt Micol opposing general manager’s
salary increase.
Received
and placed on file.
Email
of July 24, 2008 from Mary Anne Smith opposing general manager’s salary
increase.
Received
and placed on file.
Email
of July 24, 2008 from Vicki Kaiser opposing general manager’s salary increase.
Received
and placed on file.
Four
anonymous phone calls opposing general manager’s salary increase.
Received
and placed on file.
Letter
of July 25, 2008 from City Council office asking for information re general
manager’s salary increase.
Received
and referred to management.
Letter
of July 31, 2008 and Resolution #424 from City Council office re general
manager’s contract.
Received
and placed on file.
Email
of July 31, 2008 from Kirk Hewitt opposing general manager’s salary increase.
Received
and placed on file.
Email
of August 3, 2008 from
Received
and placed on file.
Verbal
complaint of August 4, 2008 from Sharon Zenker opposing general manager’s
salary increase.
Received
and placed on file.
Letter
of August 4, 2008 from Susan Every opposing general manager’s salary increase.
Received
and placed on file.
Phone
call of August 5, 2008 from Maria Anquiano opposing general manager’s salary
increase.
Received
and placed on file.
Letter
of August 6, 2008 from Randee Shul opposing general manager’s salary increase.
Received
and placed on file.
Letter
of August 8, 2008 from Kenneth Wexler re tree damage during the June 7 storm.
Received
and referred to management.
Letter
of August 8, 2008 from Anne Woiwode, Dan Farough, Lana Pollack, John
Lindemayer, Sarah Schillio, and Douglas Chester re resource planning for BWL.
Received
and placed on file.
Letter
of August 11, 2008 from Ron Byrnes and Jim Dravenstatt-Moceri of Local 352
regarding suspension of not providing same day service.
Received
and referred to management.
Email
of August 13, 2008 from Rebecca Payne re new coal-fired power plant.
Received
and placed on file.
Letter
of September 4, 2008 from Milton DeVinney re a new power plant.
Received
and placed on file.
Letter
of September 9, 2008 from Ron Byrnes and Jim Dravenstatt-Moceri of Local 352
agreeing with management’s proposal for same day service.
Received
and placed on file.
Card
of September 19, 2008 from Nancy Lombardi concerning proposed BWL coal plant.
Received
and placed on file.
Card
of September 19, 2008 from Margaret R. Kingsbury concerning proposed BWL coal
plant.
Received
and placed on file.
Card
of September 22, 2009 from Joe Droste concerning proposed BWL coal plant.
Received
and placed on file.
Card
of September 23, 2008 from Joe Bellgowan concerning proposed BWL coal plant.
Received
and placed on file.
Card
of September 23, 2008 from Fred Jacobs concerning proposed BWL coal plant.
Received
and placed on file.
Card
of September 23, 2008 from Hedluu Walton concerning proposed BWL coal plant.
Received
and placed on file.
Card
of September 23, 2008 from Donald D. Womboldt concerning proposed BWL coal
plant.
Received
and placed on file.
Card
of September 23, 2008 from Emily Woodcock concerning proposed BWL coal plant.
Received and placed on file.
August 1, 2008
The Executive Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 11:09 a.m. on Friday, August 1, 2008.
Acting Executive Committee Chair Sandra Zerkle called the meeting to order. The following members were present: Commissioners James and Zerkle. Commissioners Robert Cochran and Peter Kramer were also present. The committee did not have quorum.
Absent: Commissioner Frank Lain.
There were no public comments.
The Commissioners present at the Executive Committee meeting unanimously agreed that the updated contract for the General Manager accurately reflected the resolutions, which pertained to re-appointment and contract adjustments, approved at the July 22, 2008 board meeting.
There being no further business, the meeting ended at 11:11 a.m.
Respectfully submitted,
Sandra Zerkle, Acting Chair
Executive Committee
The Finance Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 4:00 p.m. on Monday, August 4, 2008.
Finance Committee Chair Peter Kramer called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Robert Cochran, Peter Kramer, Julee Rodocker and Tracy Thomas. Commissioner Frank Lain was also present.
Absent: None
There were no public comments.
Motion by Commissioner Cochran, seconded by Commissioner Rodocker to approve the minutes of the Finance Committee meeting held July 15, 2008.
Action: Carried unanimously.
External Auditors (SAS 114)
Douglas Rober, Partner with Plante & Moran (P&M) reviewed the planning process for the audit of the financial statements and related pension plans for the Board of Water and Light (BWL) for fiscal year end 2008. Jacob Horner of P&M was also present. The BWL audit engagement letter for the Enterprise Fund and retirement plans include the Defined Benefit, Defined Contribution and the Retiree Benefit Plan and Trust. The new Statement of Auditing Standards (SAS) 114 effective the current fiscal audit year of 2008 requires changes relative to board communication. The standard requires formal upfront communication prior to any significant undertaking of the audit engagement. The auditors must also have a thorough understanding of internal controls, perform testing of those controls, and then directly link their observation with how the auditors will test various accounts. P&M will meet annually with the Finance Committee or the Board of Commissioners prior to its audit engagement and again following the completion of the audit.
In response to a Commissioner inquiry, Mr. Rober advised that they are aware that all of the SAP modules have not been installed. As a result, they track those SAP modules presently in place so that an assessment of the controls for new modules will take place upon implementation. It was also advised that from year-to-year specific changes in audit scope and procedures are implemented, which are meant to be unpredictable so that the routine does not drive the focus of the audit. In response to a Commissioner inquiry, staff confirmed that they are not aware of any shortcomings in internal controls or financial reporting that warrant a change in the scope of the audit.
Following the conclusion of the audit process review, Mr. Rober asked the committee members their views regarding the discussion points.
· The appropriate person(s) with whom to communicate.
· Delegation of responsibilities between the Board of Commissioners, Finance Committee and that of management.
· Whether or not there are significant matters that warrant attention and/or additional procedures.
· Concerns related to fraud or other controls.
· Any matters related to communication with outside parties regarding governmental action or agencies.
The committee indicated that there were no issues relative to fraud and that P&M is already aware of communication matters with outside parties. After brief discussion, the committee agreed that they had not gathered consensus amongst the board members regarding the other aforementioned discussion points and hence may need to add the topic to a future committee agenda for further review.
A complete copy of the BWL Presentation to the Finance Committee regarding the Audit of June 30, 2008 Financial Statements & Related Pension Plans is on file in the Corporate Secretary’s office.
Susan Devon, Chief Financial Officer (CFO) gave a brief overview of the Defined Benefit Investment Policy process. Keith Azar, Micheal Muirhead, and Marie Vanerian of Merrill Lynch were also present to answer questions if needed. During the past year, a request for proposal was issued for an investment advisor for the BWL’s Defined Benefit and Post-Employment Benefit Plans respectively. Upon completion of the process, Merrill Lynch was selected as the investment advisor and staff has since worked with them regarding the investment policy statement and the asset allocation recommendation. Revisions to the investment policy statement provide additional clarity, better understanding of the roles between the Board of Commissioners, the Finance Committee and Chief Financial Officer, and also includes Public Act 314 requirements. The proposed asset allocation strategy recommends reducing foreign equity and core fixed income while increasing large cap equity. Changes to the portfolio will enhance its efficiency and change the 12.46% current risk and 8.04 % rate of return to 13.00% and 8.20% respectively. It was also noted that the fifth paragraph of the resolution should read, “amend” as oppose to “rescind”.
In response to a Commissioner inquiry, Marie Vanerian noted that minor changes to the policy indicated that thoughtful work had been done in the past and traditionally one would not see large changes in the asset allocation mix. The work done is very strategic and they are looking at long-term risk return and correlation of different asset classes over time. It was further noted that Defined Benefits are a pool of assets that need to generate income in going forward.
On motion by Commissioner Thomas, seconded by Commissioner Lain to approve the proposed resolution for the Revised Defined Benefit Plan Investment Policy Statement as amended and forward it to the full board for consideration and approval.
Action: Carried unanimously.
Susan Devon noted that the Defined Benefit Investment Policy is similar to that of the VEBA Trust Investment Policy. The asset allocation recommendations are more aggressive with respect to increasing its value, as the Post-Employment Benefit Plan is currently under funded and annual contributions to the plan will continue to be made. Changes to the asset allocation mix would occur in the following asset classes: large cap equity, small cap equity, foreign equity, 3-month T-bill, core fixed income and private equity. The current asset allocation strategy carries a risk of 11.66% and returns are 7.75%. The asset allocation mix recommended would change the risk and return to 13.00% and 8.20% respectively. It was also advised that the fifth paragraph of the resolution should read, “amend” as oppose to “rescind”.
On motion by Commissioner Cochran, seconded by Commissioner Lain to approve the proposed resolution for the Revised Post-Employment Benefit Plan (VEBA Trust) Investment Policy Statement as amended and forward it to the full board for consideration and approval.
Action: Carried unanimously.
J. Peter Lark, General Manager reported that a settlement had been reached with General Motors (GM) in regards to the contractual termination fees associated with the cessation of steam delivery to GM Plants 1 and 6. Mr. Lark thanked Doug Wood, Executive Director of Operations and Susan Devon, CFO for their hard work regarding this endeavor. Ms. Devon also noted that total termination fees the BWL can expect to receive by September 2009 equal $12.8 million.
Commissioners Cochran and Kramer congratulated staff in resolving a long-standing issue to both the satisfaction of the BWL and the customer.
Susan Devon introduced Bond Advisor Warren Kramer and Bond Attorney Bill Danhoff who were available to answer questions regarding bond refinancing. As such, Susan Devon explained that the Series 1999B Junior Lien Bonds were used to develop the Central Utilities Complex at the General Motors Lansing Grand River Facility. The proposed resolution would allow the BWL to refinance the bonds at a lower interest rate and reduce the rate covenant from to 150% to 125%, which would reduce the debt service requirement over the life of the bonds thereby, mitigating the risk. The 1999B Bonds represents 40% of the BWL’s outstanding bonds and GM is responsible for paying the bond principle and interest. In order to take this action the BWL must receive GM’s consent. As such, GM is supportive of the changes and would like the BWL to move forward. The interest rate is currently 7.5% with hopes to refinance at a rate between 5.0% - 5.5%.
In response to a Commissioner inquiry, Bill Danhoff reported that in exchange for reducing the interest rate, GM was asked to make-up the difference in the debt service as a fee to the BWL. Hence, refinancing the bonds does not jeopardize the BWL’s collection from GM.
On motion by Commissioner Lain, seconded by
Commissioner Rodocker to approve the proposed resolution Authorizing
Action: Carried unanimously.
Susan Devon gave an overview of the Return on Assets
Research and Recommendation presentation materials. The proposed resolution recommends using the
Utility Financial Solutions method thereby, changing the overall rate of return
for fiscal year 2009 to 6.18% including a return on equity of 6.31%. Utility Financial Services conducts cost of
service studies and rate of return recommendations for municipal utilities
located in
In response to a Commissioner inquiry, Ms. Devon noted that the BWL achieved a rate of return on electric of 4% and the other utilities are well below that amount. In addition, it was noted that the Commissioners and staff would have future discussions regarding the impact of rate adjustments relative to the new rate of return. Following brief discussion, it was suggested that the resolution language in the last paragraph be changed to read a, “rate of return target” to reflect the BWL’s attempt to meet this respective goal.
On motion by Commissioner Cochran, seconded by Commissioner Thomas to approve the Return on Assets proposed resolution as amended, and to forward it to the full board for consideration and approval.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 4:55 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
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 9, 2008.
Committee of the Whole Chair Sandra Zerkle called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Tony DeLuca, Semone James, Frank Lain, Julee Rodocker and Sandra Zerkle.
Absent: Commissioners Robert Cochran, Peter Kramer and Tracy Thomas.
General Manager J. Peter Lark announced that Senior Internal Control Analyst Kathryn Krause passed stringent academic, professional, and character requirements to become a Certified Fraud Examiner CFE). The CFE exam taken by Ms. Krause was comprised of financial transactions, fraud investigation, legal elements of fraud, and criminology. Certification in this field denotes proven expertise in fraud prevention, detection, deterrence, and investigation.
Mr. Lark also announced the upcoming 2nd Annual
Connections Live event scheduled for Monday, September 15, 2008 from 5:30 p.m.
to 7:30 p.m. at
Motion by Commissioner Lain, seconded by Commissioner DeLuca to approve the minutes of the Committee of the Whole meeting held July 8, 2008.
Action:
Carried unanimously.
Fair and Accurate Credit Transactions Act (FACTA)
Mike Collins, Manager of Internal Controls briefly explained that following the Board of Commissioners authorization to establish an identity theft program, staff took several steps to design and implement said program. Some of those steps included attending a FACTA seminar to gain a better understanding of its rules and regulations, the appointment of Chief Financial Officer Susan Devon as the Board of Water and Light’s (BWL) Privacy Officer, and the establishment of a privacy committee and associate members. The privacy committee members include Harvey Briggs, Mike Collins, Brandie Ekren, Gennie Eva, Mike Flowers and Jerry Mills. The associate members who will also be significantly involved in the programs development and implementation include Rebecca Bidelman, Laurie Briggs-Dudley, Dallas Burdick, Karen Burdick, Whitney Ezis, Greg Hess, Kathryn Krause, Anne Stump and Linda Taylor. Staff is in the process of completing a needs assessment and will develop a training program for supervisors and essential employees. The program and associated training are designed to help improve handling and safeguard of personal customer information.
On motion by Commissioner James, seconded by Commissioner Rodocker, the Committee of the Whole agreed to move the proposed resolution for the Identity Theft Prevention Program Policy to the full board for consideration and approval.
Action: Carried unanimously.
J. Peter Lark advised that BWL staff members worked with the
State of Michigan Department of History, Arts and Libraries, Records Management
Services to develop a records retention policy.
Upon approval by the Board of Commissioners, the retention policy and
disposal schedule will be forwarded to the Records Management Services, the
Archives of Michigan and the State Administrative Board. Mike Collins further noted that with the
assistance of Caryn Wojick from the State of
On motion by Commissioner Lain, seconded by Commissioner James, the Committee of the Whole agreed to move the proposed resolution for the Record Retention Policy to the full board for consideration and approval.
Action: Carried unanimously.
J. Peter Lark noted that although the BWL was not a participating member of the Michigan Municipal Electric Association (MMEA) Mutual Aid Agreement several members came to its aid during the previous storm. There are 29 mutual aid participating members and the agreement specifically lays out the terms of the program when municipal utilities assist one another by request. Doug Wood, Executive Director of Electric Operations advised that the agreement standardizes the relationship between municipal members during a storm event in regards to payment of labor, material and equipment costs, liability, and indemnification. The agreement is a 30-year term of which any member can withdraw at anytime.
On motion by Commissioner Lain, seconded by Commissioner Rodocker, the Committee of the Whole agreed to move the proposed resolution for the MMEA Mutual Aid Agreement to the full board for consideration and approval.
Discussion: In response to Commissioner inquires, staff confirmed that the mutual aid agreement works for both the BWL and participating members. Hence, participating members can contact the BWL for assistance if needed. In the addition, the party requesting aid also provides the supervision for the parties responding to their call. Employees are paid at their present rate of pay when assisting another entity and if people are assisting the BWL then they are also paid at their usual rate of pay including overtime when applicable. Furthermore, the markup for overhead is 1.5 times the multiplier.
Action: Carried unanimously.
Resolution Honoring Joseph E. Graves, Jr.
Commissioner James noted a correction to the resolution honoring former Commissioner Joseph E. Graves, Jr. in which the second paragraph should read “At Large Ward” and not “First Ward”.
On motion by Commissioner James, seconded by Commissioner Lain the Committee of the Whole agreed to move the proposed resolution Honoring Joseph E. Graves, Jr. to the full board for consideration and approval.
Action: Carried unanimously.
Commissioner Lain advised that the Board of Commissioners Executive Committee is in need of one additional member. In response to Commissioner Lain’s inquiry, no one expressed interest in sitting on said committee.
On motion by Commissioner Lain, seconded by Commissioner James, the Committee of the Whole nominated Commissioner Peter Kramer to the Board of Commissioners Executive Committee.
Action: Carried unanimously.
Commissioner Zerkle noted that there was discussion at the July 22, 2008 board meeting regarding the new procedure for service reconnection. It is her understanding that the General Manager and IBEW Local 352 representatives met and resolved the issue to the satisfaction of the customer, employee, and the BWL. As such, Commissioner Zerkle asked that the letter presented by the IBEW on September 9, 2008 at the Committee of the Whole meeting be introduced into the minutes.
Commissioner DeLuca asked to be excused from the September 23, 2008 board meeting, as he will be out of town and unable to attend.
There being no further business, the meeting adjourned at 5:56 p.m.
Respectfully submitted,
Sandra Zerkle, Chair
Committee of the Whole
The Finance Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 4:00 p.m. on Thursday, September 18, 2008.
Finance Committee Chair Peter Kramer called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Robert Cochran, Peter Kramer and Tracy Thomas. Alternate committee member Tony DeLuca was present in addition to Commissioner Frank Lain.
Absent: Commissioner Julee Rodocker
There were no public comments.
Motion by Commissioner Cochran, seconded by Commissioner Thomas to approve the minutes of the Finance Committee meeting held August 4, 2008.
Action: Carried unanimously.
Presentation of Audited Financial Statements
Susan Devon, Chief Financial Officer (CFO) presented the fiscal year-end June 30, 2008 Audited Financial Statements for the Board of Water and Light (BWL) Enterprise Funds. In comparison to fiscal year 2007, there was an increase in total net assets of $13.7 million and a return on total net assets of approximately 2.7%. Labor, materials and other expenses increased due to storm damage that occurred in June 2008. Depreciation expenses for fiscal year 2008 were also higher, as new plant assets were added and the SAP financial module was more precise in calculating depreciation as opposed to previously used manual calculations. In addition, expenses related to fuel, coal, and rail costs also increased in fiscal year 2008.
Doug Rober, Managing Partner with Plante & Moran was also present and distributed required communication letters for each financial statement that included the Enterprise Fund, Defined Benefit Plan, Pension Plan and the Retiree Benefit Plan and Trust. Supplemental materials for the purpose of the presentation were also distributed. Mr. Rober reviewed the Enterprise Fund financial report, which was an unqualified opinion on the audit of the enterprise and pension funds. Some of the items specifically referenced included the environmental remediation costs, General Motors (GM) steam service termination fees, bond issuance, and emission sales. In addition, Mr. Rober also reviewed historical information contained within the supplemental report that addressed the following topics:
· Comparison of Operating Revenue by utility category from 2005 – 2008.
· Comparison of Operating Expenses by expense category from 2005 – 2008.
· Comparison of Significant Power Costs from 2004 – 2008.
· Comparison of Operating Income (Loss) from 2004 – 2008.
· Comparison of Kilowatt Hours Generated Versus Purchased from 2004 – 2008.
· Comparison of Sales Source of Kilowatt Hours Generated from 2004 – 2008.
· Comparison of Bond Debt Service Requirements from 2008 – 2013.
In response to a Commissioner inquiry, Gennie Eva Manager of
Financial Services advised that most of the steam issues over the last 3 years
were in relation to a billing discrepancy and settlement of termination fees
with GM. It was noted that since the
closing of GM plants, in going forward, steam billing and accounting treatments
should be consistent. However, the BWL
is budgeting a loss in the steam utility.
In response to another inquiry, staff also noted that generated but
unsold kilowatt-hours are considered line loss.
BWL line losses are low in comparison to other
In continuation of the presentation, Mr. Rober also reviewed the management letter that contained audit comments and recommendations as well as management’s response. The management letter included information relative to the following topics:
· Stores Inventory
· Accounts Receivable
·
Capital
Assets
·
Approval
Documentation
· IT Systems
1) Access Termination
2) Segregation of Duties
3) User Access Review
4) Perimeter Controls
5) Authentication Controls – Network and Financial Applications
6) Information Security Program
7) Third-Party Services
· Defined Contribution Loans
· Emissions Allowances
In response to a Commissioner inquiry, Susan Devon noted that SAP modules were implemented in April 2007. Hence, stores inventory cycle counting was not in place last year due to the implementation of the new module. Since the implementation a plan is in place, staffing levels have increased, and Stores is now able to conduct cycle counting.
Following further discussion, Doug Rober also advised that none of the items in the management letter are significant deficiencies. The general recommendations provided in said letter should enhance the controls and structure of the aforementioned items. Susan Devon also noted that the Internal Controls Department is in the process of conducting an assessment of capital assets to identify risks and internal controls that need to put in place. The assessment is scheduled for completion by the end of the year.
In response to a Commissioner Cochran’s inquiry, staff confirmed that the auditors’ recommendations would be implemented simultaneously and also assigned to specific persons, but a timeline had been included. In lieu of developing said timeline, Commissioner Lain suggested his meeting with the CFO to receive status report updates regarding the auditors’ recommendations.
Bill Aldrich, Manager of Finance and Planning gave a brief overview of the Electric Cost of Service Study – 2009 Test Year. The study based on the fiscal year 2009 budget, estimates the net revenue requirement from retail rates needed to meet net return on assets. The study also takes into account the new net return on assets rate of 6.18% and the payment in lieu of taxes rate of 4%. The returns by class of customers recommend a rate increase to meet the increased revenue requirement. However, the BWL is in good condition relative to different rate classes, as they do not cross subsidize one another.
In response to a Commissioner inquiry, it was noted the
information contained in the study would be extremely helpful with regard to
future rate discussions relative to splitting rate changes between residential
and commercial customers, and service charges.
It was also advised that new proposed
Susan Devon gave a brief overview regarding Electric and
Steam Environmental Surcharges. It was
noted that the BWL has not recognized $15.7 million in expenses for
environmental restoration projects at the North Land Fill and
Following brief discussion, staff clarified that there is no action necessary at this time, as a rate hearing and proposal sheet is needed to move forward. It was also advised that this is an agenda topic that the Board should expect to see in the future. Staff also understood from the Commissioners that a bundled package of materials that took into account the cost of service study would be appropriate for said discussion.
Susan Devon briefly reviewed the 401(a) Defined Contribution Pension and 457 Deferred Compensation Savings Plan Bid Evaluations. Upon conclusion of the review, it was recommended that the BWL combine the plan administration of both plans under ICMA – RC due to the best, most cost-effective plan administration services.
On motion by Commissioner Cochran, seconded by Commissioner Lain, the Finance Committee agreed to move the proposed resolution for the Selection of ICMA as Plan Administrator for the Combined Defined Contribution 401(a) and 457 Plans to the full board for review and consideration.
Discussion: In response to a Commissioner inquiry regarding the effects of the current market, Susan Devon noted that ICMA is a nonprofit organization and there is nothing that they are aware of in that regard that would affect the plan. Ms. Devon went onto advise that she would discuss the matter with ICMA and advise the Board of any additional information.
Action: Carried unanimously.
Doug Wood, Executive Director of Electric Operations gave a brief update regarding the replacement of the cooling towers due to the June 2008 storm. As such, the following information was provided.
Cooling Towers
· Tower removal, temporary cooling tower estimate, and cooling tower replacement costs total $3,680,000.
· Insurance proceeds are $734,000.
· Estimated cost recovery from FEMA for cooling towers is $2,867,000.
· Un-recovered costs total an estimated $79,000.
T&D System
· Storm related expenses, which include overtime and direct costs were $1,169,000.
· Estimated FEMA eligible costs for reimbursement are $948,000.
System Totals
· Total storm related costs are estimated at $4,848,000.
· Estimated recoverable costs to date are $4,549,000 (dependent upon final costs and FEMA allowances).
There being no further business, the meeting adjourned at 5:23 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
MANAGER’S RECOMMENDATIONS
Resolution 2008-9-1
|
A. |
Identity Theft
Prevention Program Policy |
WHEREAS, the Fair and Accurate Credit Transactions Act of 2003 (FACT Act of 2003) amended the Fair Credit Reporting Act of 1970 (FCRA) requiring creditors that maintain covered accounts to develop and implement a written Identity Theft Prevention Program; and
WHEREAS, the Board of Commissioners believes a written Identity Theft Prevention Program consistent with the FACT Act of 2003 may be considered best practices and appropriate for the Lansing Board of Water and Light;
WHEREAS, the Board of Commissioners have previously designated the General Manager the oversight, development, implementation and administration of an appropriate Program to prevent, detect, and mitigate identity theft in connection with customer accounts;
RESOLVED, that the Board of Commissioners for the Board of Water and Light hereby adopt the following policy:
Fair and Accurate Credit Transaction Act of 2003 is deemed best practices. Therefore, the Lansing Board of Water and Light shall establish and maintain an Identity Theft Prevention Program consistent with the guidelines set forth in the Fair and Accurate Credit Transaction Act of 2003. The General Manager will appoint a Privacy Officer to administer the Program.
The Privacy Officer, with assistance from the privacy committee members, is responsible for developing appropriate written procedures and.
--------------------
Motion by Commissioner James,
seconded by Commissioner Kramer to approve the Identity Theft Prevention
Program Policy resolution.
Action: Carried unanimously.
Resolution 2008-9-2
|
B. |
Records
Retention Policy and Records Retention and Disposal Schedule |
WHEREAS, Michigan law (MCL 399.5 and 750.491) requires that all public records be listed on an approved Retention and Disposal Schedule that identifies the minimum amount of time that records must be kept to satisfy administrative, legal, fiscal and historical needs; and
WHEREAS, the Michigan Freedom of Information Act (FOIA) (MCL 15.231-15.246) defines public records as recorded information “prepared, owned, used, in the possession of, or retained by a public body in the performance of an official function, from the time it is created.”
RESOLVED, that the Board of Water and Light Policy 18-01 “Records, Retention” is hereby amended as follows:
The Board of Water and Light (BWL) shall only retain records during the period of their immediate use, unless a longer retention period is required by law or for internal or historical reference. A Records Retention and Disposal Schedule, as approved by this Board and the Records Management Services, the Archives of Michigan and the State Administrative Board, shall specify the length of time records are to be retained. Where the BWL has knowledge that some records are or may become relevant to a legal action, such records shall not be destroyed except and until the legal issues have been resolved and with the approval of the Staff Attorney.
FURTHER RESOLVED, that the Retention and Disposal Schedule proposed by the General Manager be approved and forwarded to the Records Management Services, the Archives of Michigan and the State Administrative Board for their approval.
--------------------
Motion by Commissioner Zerkle, seconded by Commissioner Rodocker to approve the Records Retention Policy and Records Retention and Disposal Schedule resolution.
Action: Carried unanimously.
MMEA Mutual Aid Agreement
|
WHEREAS,
the Lansing Board of Water & Light is a member of the Michigan Municipal
Electric Association (MMEA); and
WHEREAS, from time to time it becomes necessary for members of MMEA to request emergency assistance in the form of equipment and personnel from other MMEA members in connection with the operation of their respective electric utilities; and
WHEREAS, MMEA has prepared a standardized written agreement entitled the "MMEA Mutual Aid Agreement" which sets forth requirements and conditions regarding the furnishing of emergency assistance by MMEA members to one another; and
WHEREAS, it is advisable and in the best interest of the Lansing Board of Water & Light to have standardized requirements, obligations and conditions under which emergency assistance will be furnished to, or may be requested by the Lansing Board of Water & Light; and
WHEREAS, all of the terms of the MMEA Mutual Aid Agreement are acceptable to the Lansing Board of Water & Light and are in the best interests of its ratepayers.
WHEREAS, the Lansing Board of Water & Light desires to designate the persons authorized on its behalf to request emergency assistance or to act on the Lansing Board of Water & Light’s behalf in response to requests for emergency assistance as set forth in the MMEA Mutual Aid Agreement.
NOW, THEREFORE, BE IT RESOLVED, that the General Manager is authorized to sign and enter into the MMEA Mutual Aid Agreement, and
The following persons are hereby designated and authorized to request emergency assistance on behalf of the Lansing Board of Water & Light under the MMEA Mutual Aid Agreement and to approve requests made to the Lansing Board of Water & Light for emergency assistance under that agreement. These persons are listed in the specific descending order in which they are authorized on behalf of the Lansing Board of Water & Light to request emergency assistance or, alternatively in which they are to be contacted by another signatory to the agreement, if the person at the top of the list is not timely available under the applicable circumstances.
1. J. Peter Lark
2. Douglas Wood
3. Timothy Palmer
4. James Macklin
The preceding list may from time to time be amended by the General Manager.
--------------------
Motion by Commissioner Thomas, seconded by Commissioner Cochran to approve the MMEA Mutual Aid Agreement resolution.
Action: Carried unanimously.
|
D. |
Selection of
ICMA as Plan Administrator for Combined Defined Contribution (401a) and457
Plans |
WHEREAS, Board of Commissioners directed a review of plan administration for the Defined Contribution Pension Plan and the 457 Plan; and
WHEREAS, the Finance Committee of the Board of Commissioners directed that a Request for Proposals (RFP) be issued to various providers of pension plan administration services, and
WHEREAS, an extensive review of potential plan administrators has let to the determination that the best course of action is to combine the plan administration of both the 401a and 457 plans under one administrator; and
NOW THEREFORE BE IT RESOLVED, that the Board of Commissioners for the Board of Water and Light of the City of Lansing, Michigan, determines that ICMA should be retained as the Plan Administrator for the Combined Defined Contribution Pension Plan and the 457 Plan.
--------------------
Motion by Commissioner James, seconded by
Commissioner Kramer to approve the Selection of ICMA as Plan Administrator for
Action: Carried unanimously.
Resolution
2008-9-5
|
E. |
Economic
Development Rider for Chilled Water |
WHEREAS, the BWL began offering chilled water to customers
in the downtown
WHEREAS, currently the State of Michigan, Constitution Hall, Michigan Economic Development Corporation and Ingham County Courts are chilled water customers; and
WHEREAS, the Economic Development Rider for Chilled Water enhances economic development by encouraging customers to locate or expand facilities in the BWL’s service area which will result in a net benefit to the BWL and its customers; and
WHEREAS, the BWL will have ample chilled water capacity for the foreseeable future; and
WHEREAS, the proposed Economic Development Rider for Chilled Water offers discounts to customers on the capacity charges for the first 6 years; and
WHEREAS, adding new chilled water customers will add to revenues which can help keep rates more stable; and
WHEREAS, a public hearing on the Economic Development Rider for Chilled Water was held on September 8, 2008.
RESOLVED, that the Economic
Development Rider for Chilled Water be approved by the Board of Commissioners
with an effective date of November 1, 2008.
CHILLED WATER: Economic Development Rate Rider (Attachment)
Motion by Commissioner Cochran, seconded by Commissioner Rodocker to approve the Economic Development Rider for Chilled Water resolution.
Action: Carried unanimously.
Commissioner Cochran inquired as to whether or not it was necessary for the Board to resurface a previously tabled matter and refer it to committee.
In response Commissioner Lain noted that any Commissioner at anytime could make a motion to bring an item off the table.
After brief discussion and in an effort to show a clear path of intent, the Board took the following action:
On motion by Commissioner James, seconded by Commissioner Cochran, the Board of Commissioners motioned that the resolutions to approve the Corporate Secretary’s contract and compensation be referred to the Human Resource Committee for further review.
Action: The motion carried by roll call vote.
Yeas: Commissioners Cochran, James, Kramer, Lain, Rodocker, Thomas and Zerkle.
Nays: None.
Absent: Commissioner DeLuca.
None.
RESOLUTION
HONORING JOSEPH E. GRAVES, JR.
WHEREAS, it is a pleasure to extend this expression of our thanks and best wishes to Joseph E. Graves, Jr., for his service as a Commissioner of the Board of Water and Light; and
WHEREAS, Joseph E. Graves, Jr., was appointed as a Commissioner of the Board of Water and Light on April 11, 2005, to represent the At Large Ward in the City of Lansing. During his time on the Board, he served on the Finance Committee, Executive Committee, Human Resources Committee, Ad-Hoc Committee on the Rules of Administrative Procedure, and the Ad-Hoc Committee for Workforce Development; he also served as Finance Committee Chair and Past-Chair Elect; and
WHEREAS, Joseph E. Graves, Jr., past employment with City of Lansing as Chief of Staff, and with the State of Michigan, as Chief Deputy Director of the Family Services Administration, Michigan Department of Social Services, and his numerous community organizations such as the Coalition for Community Concerns, Black Child and Family Institute, Council Against Child Abuse and Neglect, Big Brothers and Big Sisters, National Association for Advancement of Colored People, Greater Lansing Food Bank, and is a member of Mt. Zion Baptist Church, all contributed to enhancing the quality of life at the Board of Water and Light and the best interest of citizens, business, and industry in Lansing; and
WHEREAS,
on behalf of his colleagues, employees of the Board of Water and Light and the
citizens of
RESOLVED, That the members of this board hereby honor and commend Joseph E. Graves, Jr. for his over three years of distinguished service. In Regular Session this 23rd day of September 2008, we wish Joe continued success in all his future endeavors.
__________________________ _________________________
__________________________ _________________________
Robert W. Cochran Tony DeLuca
__________________________ _________________________
Semone M. James, Past Chair Peter W. Kramer
__________________________ _________________________
Julee M. Rodocker Tracy Thomas
Motion by Commissioner James, seconded by
Commissioner Kramer to approve the resolution Honoring Joseph E.
Action: Carried unanimously.
MANAGER’S REMARKS
Chilled Water Groundbreaking. General Manager J. Peter Lark thanked those who were in attendance for the Chilled Water Groundbreaking. He noted the significant undertaking by staff and also thanked those who were involved in coordinating the event.
COMMISSIONERS’ REMARKS
In response to public comments, Commissioner Zerkle indicated that future informal meetings with dialogue regarding new generation are forthcoming. She also noted that public comments are received for the record, taken very seriously, and reviewed by the Board of Commissioners.
Commissioner Lain echoed Commissioner Zerkle’s sentiments and thanked the public for their comments. He clarified that the purpose of public comment is to receive information. In addition, Commissioner Lain also advised that there would be opportunities for dialogue and noted that the Board is very interested in what the public has to say.
Commissioner Thomas thanked those who made remarks during public comment. He advised that the Board of Commissioners are listening to the public and take their comments seriously. Commissioner Thomas also thanked General Manager Lark and staff for their efforts regarding the Chilled Water Groundbreaking and other tasks.
Commissioner James advised that former Commissioner Joseph
Graves would be missed as he served the City of
Commissioner Lain echoed Commissioner James’ sentiment and noted that former Commissioner Joseph Graves is a beautiful person who will be missed.
EXCUSED ABSENCE
On motion by Commissioner James,
seconded by Commissioner Cochran to excuse the absence of Commissioner Tony
DeLuca.
Action: Carried
unanimously.
PUBLIC COMMENTS
None.
ADJOURNMENT
On motion by Commissioner Cochran, seconded by Commissioner Thomas, the
meeting adjourned at 6:15 p.m.
/s/ Rhonda Jones, Corporate Secretary
Filed with
October 2, 2008
Board of Water and Light,
ECONOMIC DEVELOPMENT RIDER FOR CHILLED WATER
Purpose – The primary purpose of this rider is to enhance economic development in the Board of Water & Light (BWL) service area. It will be offered to new customers when, in the utility’s judgment, the availability of the rider is a major factor for the customer choosing to take chilled water service and will result in a net benefit to the BWL and its customers.
Availability – The rider is available to new commercial and industrial customers that qualify for General Chilled Water Service Rate No. 1. This rate would be available for the first six years from the date of the contract. All provisions of this rider are the same as the General Chilled Water Rate No. 1 with the following exceptions:
Monthly Rate
Capacity Charge: A discount on the capacity charge will be made available under this rider. The capacity charge per ton will be as follows:
Contract Year Capacity Charge (per ton)
1 - 2 $10.00
3 - 4 $20.00 5 - 6 $30.00
At the start of the seventh year and all years thereafter, the customer will be billed the standard capacity charge as listed in the General Chilled Water Service Rate 1.
Adopted: September
23, 2008 Effective: November 1, 2008