MINUTES OF THE BOARD OF COMMISSIONERS’ MEETING
LANSING BOARD OF WATER AND LIGHT
____________________________
Tuesday, July 28, 2009
____________________________
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan.
Present: Commissioners Margaret Bossenbery, Tony DeLuca, Peter Kramer, Frank Lain, Dennis Louney, Marilyn Plummer and Sandra Zerkle.
Absent: Commissioner Tracy Thomas.
The Interim Corporate Secretary declared a quorum present.
Chairperson Lain called the meeting to order at 5:35 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Kramer, seconded by Commissioner Louney to approve the minutes of the Regular Board Meeting of May 26, 2009 and the Special Board Meeting of June 9, 2009.
Carried unanimously.
PUBLIC COMMENTS
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.
There were no public comments.
COMMUNICATIONS
There were no Communications.
COMMITTEE REPORTS
FINANCE COMMITTEE
June 9, 2009
The Finance Committee of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 4:30 p.m. on Tuesday, June 9, 2009.
Finance Committee Chairperson Peter Kramer called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Robert Cochran, Tony DeLuca, Peter Kramer and Tracy Thomas. Alternate committee member Margaret Bossenbery (arrived 5:14 p.m.) was present in addition to Commissioner Sandra Zerkle (arrived 5:20 p.m.).
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner DeLuca, seconded by Commissioner Thomas to approve the Finance Committee meeting minutes of May 12, 2009 as amended.
Action: Carried unanimously.
DB/VEBA Update
First Vice President Marie Vanerian and Associate Financial Advisor Michael Muirhead of Merrill Lynch Institutional Consulting Group provided an update with respect to the Lansing Board of Water and Light’s (BWL) Defined Benefit (DB) and Retiree Benefit Plan and Trust (VEBA). The update included a brief overview of the total portfolio performance summary report and review of handouts entitled, “Time Weighted Rate of Return by Account” for DB and VEBA and the “10-year Moving Average of United States (U.S.) Large Capitalization Common Stock”. The Asset Information and Measurement Service reports for DB and VEBA reflect the transition from the old to the new reporting. The Time Weighted Rate of Return by Account reports reflects the performance of the new asset managers. Ms. Vanerian expressed that all current federal loan programs are designed to infuse money into the system. As a result, markets have responded and banks have brought credit to the market. Anticipated market issues include inflation, overcapacity in the world market and devaluation of the U.S. dollar.
In response to a Commissioner inquiry regarding next quarter results, Merrill Lynch noted that typically a test occurs when there is a significant rise in the market to determine if the markets can substance the increase. The economy must continue to receive good news for the market to continue to improve.
Finance Quarterly Update
General Manager J. Peter Lark provided a brief quarterly update with respect to the Financial Reports for month ending March 31, 2009. The Financial Report also included information pertaining to the Balanced Scorecard and Financial Statements. Management is continuing with its cost cutting efforts and has exceeded its target to decrease Operations and Maintenance costs. Barring any unexpected issues for fiscal yearend, the BWL anticipates that it will not cut into cash reserves for fiscal year 2009. The fiscal year 2010 budget proposes a $2 million cut into reserves and does not include any future rate increases, as management will take a wait and see approach with respect to proposed rate changes for the new fiscal period.
Bond Resolution
J. Peter Lark introduced the BWL Resolution Authorizing the Sale of Refunding Bonds. Bond Advisor Warren Creamer and Bond Attorney Bill Danhof were available to answer questions with respect to bond refinancing and the proposed resolution. The Series 2009A bonds (previously entitled, “Series 1999B”) were originally used to develop the Central Utilities Complex at the General Motors (GM) Lansing Grand River Facility. The bond issuance involves the private placement of the bonds to the bond purchaser instead of sale to an underwriter. Refinancing the bonds reduced the interest rate from 7.5% to 5.34% and lowered the BWL’s exposure by approximately $3.9 million. The placement agent is Citibank and the bond purchaser is Bank of America N.A.
In response to a Commissioner inquiry, it was advised that a GM bankruptcy would not affect the bond refinancing. The purchasers analyzed the BWL and were impressed with its credit rating and relationship with GM.
On motion by Commissioner Cochran, seconded by Commissioner Thomas, the Finance Committee agreed to move the Resolution Authorizing Sale of Refunding Bonds to the Special Board meeting scheduled for June 9, 2009 for further consideration and approval.
Action: Carried unanimously.
GM Bankruptcy
J. Peter Lark provided an update with respect to analyzing the affects of a GM bankruptcy relative to the BWL. In response to a Commissioner inquiry, Mr. Lark confirmed that the anticipated GM steam termination payment is not reflected in the new budget.
There being no further business, the Finance Committee meeting adjourned at 5:20 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
HUMAN RESOURCE COMMITTEE
June 23, 2009
The Human Resource Committee of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, June 23, 2009.
Human Resource Committee Chairperson Tony DeLuca called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Tony DeLuca, Tracy Thomas and Sandra Zerkle. Commissioner Frank Lain was also present.
Absent: Commissioner Peter Kramer
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Zerkle, seconded by Commissioner Thomas to approve the Human Resource Committee meeting minutes of July 21, 2008.
Action: Carried unanimously.
Proposed Evaluation Forms for the General Manager, Corporate Secretary and Internal Auditor
The Human Resource Committee reviewed two proposed employee performance appraisal forms for the purpose of utilizing the forms to conduct the board appointees’ performance review. The appointee positions include the General Manager, Corporate Secretary and Internal Auditor. Subsequent to discussion and additional clarification the committee agreed to utilize form Option 2 with modifications. The modifications include removing the section entitled, “Developmental Plans” and the word, “strong” with respect to “Noteworthy Strong Areas of Present Performance”, and adding a section regarding employee performance goals for the upcoming year.
On motion by Commissioner Zerkle, seconded by Commissioner Thomas, the Human Resource Committee recommended the use of Employee Performance Appraisal Form – Option 2 with minor changes and agreed to utilize the schedule included in the packet materials presented by the Chief Financial Officer.
Discussion: The committee confirmed with General Manager Lark and Corporate Secretary Jones that the timeline is sufficient for them to complete their evaluations respectively. The committee also noted the possibility of changing the timeline in light of possible scheduling conflicts. In addition, they also discussed the evaluation period for Internal Auditor Perkins.
Action: Carried unanimously.
On motion by Commissioner Lain, seconded by Commissioner Thomas, the Human Resource Committee recommended that they evaluate the Internal Auditor at his 6-month anniversary.
Action: Carried unanimously.
Other
On motion by Commissioner Lain, seconded by Commissioner Thomas, to excuse the absence of Commissioner Peter Kramer.
Action: Carried unanimously.
There being no further business, the Human Resource Committee meeting adjourned at 6:20 p.m.
FINANCE COMMITTEE
July 14, 2009
The Finance Committee of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 4:30 p.m. on Tuesday, July 14, 2009.
Finance Committee Chairperson Peter Kramer called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Tony DeLuca, Peter Kramer and Tracy Thomas. Alternate committee member Margaret Bossenbery was also present. Also present were: Commissioners Frank Lain, Dennis Louney and Marilyn Plummer.
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Thomas, seconded by Commissioner DeLuca to approve the Finance Committee meeting minutes of June 9, 2009.
Action: Carried unanimously.
SAS 114 Communications
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 2009. Shaun Krick, Manager 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.
SAS 114 Communications is a statement of auditing standards that involve communications between the external auditors Plante Moran and the Governing Board.
In response to the presentation from Douglas Rober of P&M, referring to required discussion points mentioned on page 12 of the presentation, Commissioner Kramer spoke about the Internal Auditor’s involvement in the Audit process. He stated that he would prefer if there were something that needs to be brought to the Committees attention that it be presented during the course of a normal committee meeting or a special committee meeting and not have it be presented to a specific individual but have it be presented to the Finance Committee and that the Board’s voice would potentially be through the Internal Auditor as an Auditing Representative of the Board of Commissioners.
A complete copy of the BWL Presentation to the Finance Committee regarding the Audit of June 30, 2009 Financial Statements & Related Pension Plans is on file in the Corporate Secretary’s office.
Operating Cash Investment Policy Resolution
J. Peter Lark introduced the BWL Resolution Authorizing the Adoption of Investment Policy for Operating Cash.
General Manager J. Peter Lark introduced Chief Financial Officer, Susan Devon who provided an update with respect to the Investment Policy for Operating Cash. This Investment Policy will provide new opportunities for the BWL as a result of the recently revised PA 20. Chief Financial Officer Devon stated that the Administration would like to update and make the changes to this policy that would allow the pooling of funds that are now kept separate and that is in the order of efficiencies and administrative fees.
On motion by Commissioner Lain, seconded by Commissioner Thomas to approve the proposed resolution for the Operating Cash Investment Policy Resolution and forward it to the full board for consideration and approval.
Action: Carried unanimously.
Authority to Invest Operating and Pension Funds
J. Peter Lark introduced the BWL Resolution Authorizing the Adoption of Authority to Invest Operating and Pension Funds.
General Manager J. Peter Lark stated that under the old Investment Policy, investments would be undertaken by the General Manager, Chief Financial Officer and Manager of Finance & Planning. This new Resolution would allow the General Manager and the Chief Financial Officer to delegate the responsibility to someone else in the absence of the Manager of Finance and Planning.
On motion by Commissioner Lain, seconded by Commissioner DeLuca to approve the proposed resolution for the Authority to Invest Operating and Pension Funds and forward it to the full board for consideration and approval.
Action: Carried unanimously.
Purchasing Policy Reporting Update
General Manager J. Peter Lark provided an update to the Purchase Policy. General Manager Lark stated that the Administration was in the process of updating this policy and making it more clear and it will be brought to the Boards attention at a later date. A number of areas that require reporting to this Board are highlighted in the packet.
In response to General Manager Lark’s update, Commissioner Kramer stated that there has been a lot of discussions in City Management regarding the Purchasing Policy and local participation of trades and contractors and was curious how the Board was considering addressing that in the new policy. Commissioner Kramer stated that it is important at this time to do what we can for the local economy through businesses and wants to make sure that the Board’s Purchasing Policy supports that in every way possible.
General Manager Lark stated as a general rule the Board tries to support local businesses anyway.
2009A Bond Refunding
General Manager J. Peter Lark introduced Sue Devon, Chief Financial Officer to speak about the Board of Water & Light Bonds related to General Motors.
Sue Devon reported that there was a Bond sale on June 22, 2009 and that sale resulted in a reduction in the interest rate. She stated that these are fully taxable Bonds because they are supporting the Central Utility Complex (CUC) and that the 7.7% rate has been reduced to 5.34%. The maturity date is 2016 and the savings as a result of the issuance of the new bonds is approximately $4 Million over the life of the bond.
GM Bankruptcy Update
General Manager Lark spoke about the CUC Bond that stated General Motors has been making payments. General Manager Lark stated that he has in his possession a check for $3 million and that was a security deposit that General Motors made to us related to utility services. One of the requirements of the new General Motors is that they keep everything current so no problems are expected with the CUC payments. General Manager Lark stated that the Board of Water & Light closed their books around July 10th, and General Motors did not pay their $1.3 million utility bill to and that affected the budget, but we still managed not to tap in to reserves. General Manager Lark stated that the new General Motors requires them to stay current with payments and the Administration has solid reason to believe future payments will be made.
With there being no further business, the Finance Committee meeting adjourned at 4:55 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
COMMITTEE OF THE WHOLE
July 14, 2009
The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:35 p.m. on Tuesday, July 14, 2009.
Committee of the Whole Chairperson Sandra Zerkle called the meeting to order and asked the secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Tony DeLuca, Peter Kramer, Frank Lain, Dennis Louney, Marilyn Plummer, Tracy Thomas and Sandra Zerkle.
Absent: None
Public Comments
There were no public comments.
Committee of the Whole Chair Sandra Zerkle stated that with new Board Members in attendance she would like for all Board Members to introduce themselves.
Approval of Minutes
Motion by Commissioner Lain, seconded by Commissioner Thomas to approve the Committee of the Whole meeting minutes of April 14, 2009 as amended.
Action: Carried unanimously.
Aurelius Road Lime Field Update
General Manager J. Peter Lark reported that there is no ash at this field. This field in question is located on Aurelius Road. The Board of Water & Light removes the lime from the water and makes it into lime cakes and then it is hauled away to landfills. There is no danger from the lime field, it’s about 20-30 ft deep and it is walled off so the lime cannot escape.
George Stojic, Executive Director of Strategic Planning for the Board of Water & Light, stated that there has been an geo-technical and environmental study done at the site and according to the study the site looks stable; the walls around it looks stable. Their only suggestion was to add some sensors to it to make sure that it doesn’t move. If it does move, the sensors would alert us ahead of time and allow us to take remedial action. That’s just a precaution they recommended.
Officer Selection
Committee of the Whole Chair Zerkle stated that she has been through a couple of Officer Selection processes and wanted to have at least a minimal discussion. There was discussion regarding who was interested in becoming the next Chair of the Board. The nominating process was visited briefly. Commissioner Kramer stated that in the past if there were ever any issues with this matter or process it would be brought back to Committee of the Whole for discussion.
With there being no further business, the meeting adjourned at 6:00 p.m.
Respectfully submitted
Sandra Zerkle, Chair
Committee of the Whole
NOMINATING COMMITTEE MINUTES
July 23, 2009
The Nominating Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 4:30 p.m. on Thursday, July 23, 2009.
Nominating Committee Chair Pete Kramer called the meeting to order and asked the interim secretary to call the roll. The following committee members were present: Commissioners Marge Bossenbery, Tony DeLuca, Pete Kramer and Tracy Thomas; Alternates present were Commissioners Dennis Louney and Marilyn Plummer.
Absent: None
Public Comment
There were no public comments.
Nominate Board Officer Candidates for FY 2009
The Nominating Committee met to review the Commissioner survey responses for consideration of board officer nominations for fiscal year 2010. Upon discussing and reviewing the submitted survey forms the Nominating Committee recommended a slate of officers for fiscal year 2010.
On Motion by Commissioner Bossenbery, seconded by Commissioner Thomas, the Nominating Committee recommends the follow slate of officer candidates for Fiscal Year 2009-2010:
Chair: Sandra Zerkle
Vice chair: Frank Lain
Action: Carried unanimously.
Discussion:
Commissioner Louney questioned if there was any type of procedure set forth in regards to serving in a leadership role. He stated that he would like to have some discussion in future meetings to examine the process. Commissioner Kramer stated that the Board would need to address the issue of the Past Chair position since the only purpose of the past chair is to fill in if the Chair and Vice Chair are not present at meetings. He stated that is a formality that needs to be undertaken if Commissioner Zerkle and Commissioner Lain are approved as the Chair and Vice Chair.
There being no further business, the meeting adjourned at 4:55 p.m.
Respectfully submitted,
Peter Kramer
Nominating Committee
HUMAN RESOURCE COMMITTEE MINUTES
July 23, 2009
The Human Resource Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Thursday, July 23, 2009.
Human Resource Committee Chair Tony DeLuca called the meeting to order and asked the secretary to call the roll. The following committee members were present: Commissioners Tony DeLua, Pete Kramer, Tracy Thomas, Sandra Zerkle. Also present were Board Members Marge Bossenbery, Frank Lain, Dennis Louney and Marilyn Plummer.
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Kramer, seconded by Commissioner Lain to approve the minutes of the Human Resource Committee meeting held June 23, 2009.
Action: Carried unanimously.
FY 2009 Board Appointee Performance Review for General Manager Lark
General Manager Performance Review
General Manager J. Peter Lark, requested a closed session for the purpose of receiving his contractual year-end performance evaluation as permitted by Open Meetings Act exemption MCL 15.268(a).
Motion by Commissioner Lain, seconded by Commissioner Kramer to go into closed session.
Action: Carried unanimously.
The Human Resource Committee meeting went in to closed session at 5:40 p.m.
Motion by Commissioner Thomas, seconded by Commissioner Bossenbery that the Human Resource Committee return to open session.
Action: Carried unanimously.
The Human Resource Committee meeting reconvened in open session at 6:30 p.m.
Upon conclusion of the closed session, the Human Resource Committee took the following action:
On motion by Commissioner Lain and seconded by Commissioner Kramer to extend a three (3) year contract to BLW General Manager, J. Peter Lark with a an annual performance evaluation.
Action: Carried unanimously.
Discussion:
Commissioner Zerkle questioned what the process would be for replacing the former Corporate Secretary Rhonda Jones and Commissioner DeLuca stated that he would be meeting with Human Resource Director Michael Flowers soon to move forward with that process.
There being no further business the meeting adjourned at 6:35 p.m.
Respectfully submitted,
Tony DeLuca, Chair
Human Resource Committee
MANAGER’S RECOMMENDATIONS
Resolution 2009-07-1
Adoption of Investment Policy for Operating Cash
WHEREAS, the BWL’s Operating Cash Investment Policy was last approved by the Board 17 years ago (Resolution 92-2-1); and
WHEREAS, Public Act 20 of 1943, Investment of Surplus Funds of Political Subdivisions, was recently amended to allow new investment options for the BWL; and
WHEREAS, the Government Finance Officers Association (GFOA) provides guidance regarding investment policy recommendations; and
WHEREAS, the Staff has incorporated the changes in Public Act 20 and the recommendations of the GFOA in the proposed Investment Policy of Operating Cash;
RESOLVED, that the Finance Committee approve the proposed attached Investment Policy for Operating Cash and forward the policy to the Board for adoption.
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Motion by Commissioner Kramer, seconded by Commissioner Bossenbery, to approve the resolution entitled, “Investment Policy for Operating Cash”.
Action: Carried unanimously.
Lansing Board of Water and Light
Investment Policy Statement For
Operating Cash
The purpose of this policy is to provide guidelines which govern the investment of Lansing Board of Water and Light operating funds.
I. Governing Authority
The investment
program shall be operated in conformance with federal, state, and other legal
requirements, including the Lansing City Charter, the State of Michigan
[Investment Act 20 of 1943, as amended and Investment and The Revenue Bond Act
94 of 1933, as amended], and current Lansing Board of Water and Light Bond
Resolutions.
II. Scope
This policy applies
to the investment of all funds of the Lansing Board of Water and Light
(hereinafter referred to as the LBWL) excluding the investment of employees’
retirement funds. Proceeds from certain bond issues and related funds are also
subject to the restrictions of applicable bond covenants.
1. Pooling of Funds
Except for the balance in certain restricted
funds, the LBWL may consolidate balances from all funds to maximize investment
earnings. Investment income will be allocated to the various funds based on
their respective participation.
III. General Objectives
The primary
objectives, in priority order, of investment activities shall be safety,
liquidity, and yield:
1. Safety
Safety of
principal is the foremost objective of the investment program. Investments
shall be undertaken in a manner that seeks to ensure the preservation of
capital in the overall portfolio. The objective will be to mitigate credit risk
and interest rate risk.
a. Credit Risk
The
LBWL will minimize credit risk, which is the risk of loss due to the failure of
the security issuer or backer to make payment, by:
·
Limiting investments to
the types of securities referred to in Section VI of this Investment Policy
·
Diversifying the
investment portfolio so that potential losses on individual securities will be
minimized.
b. Interest Rate Risk
The
LBWL will minimize the interest rate risk, which is the risk that the market
value of securities in the portfolio will fall due to changes in market
interest rates, by:
·
Structuring the
investment portfolio so that securities mature to meet cash requirements for
ongoing operations, thereby avoiding the need to sell securities on the open
market prior to maturity.
· Investing operating funds primarily in shorter-term securities, money market mutual funds, or similar investment pools.
1. Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands. Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets. A portion of the portfolio also may be placed in money market mutual funds or local government investment pools which offer same-day liquidity.
2. Yield
The investment portfolio shall be designed with the objective of attaining a market rate of return taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objectives described above. The core of investments must be limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed.
IV. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials (the Chief Financial Officer and the Manager of Finance and Planning) shall be the "prudent person" standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with this investment policy and exercising due diligence shall be relieved of personal responsibility for investment losses. The “prudent person” standard states that, “Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”
2. Ethics and Conflicts of Interest
Investment officers and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Employees and investment officers shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and investment officers shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the LBWL.
3. Delegation of Authority
Authority to invest Operating Funds is granted to the General Manager, Chief Financial Officer and the Manager of Finance and Planning. Additionally, the Chief Financial Officer is authorized to delegate aforementioned privilege on behalf of the Manager of Finance and Planning. This authority is derived from the LBWL Policy 7-01 “Authority to Invest Operating and Pension Funds” as amended. No person may engage in an investment transaction except as provided in LBWL Policy 7-01 as amended.
V. Safekeeping and Custody
1. Safekeeping
Securities will be held by independent third-party custodians selected by the LBWL. The safekeeping institution shall annually provide a copy of their most recent report on internal controls (Statement of Auditing Standards No. 70, or SAS 70 or acceptable alternative).
VI. Suitable and Authorized Investments
1. Investment Types
Investments shall be in conformance with Section 1 of Public Act 20 of 1943 as amended from time to time. With respect to mutual funds, authorization to invest is limited to securities whose intention is to maintain a net asset value of $1 per share.
VII. Investment Parameters
1. Diversification
The investments shall be diversified by:
·
Limiting investments to
avoid over concentration in securities from a specific issuer or business sector (excluding U.S.
Treasury securities).
·
Investing in securities
with varying maturities, and
· Continuously investing a portion of the portfolio in readily available funds such as local government investment pools (LGIPs), money market funds or overnight repurchase agreements.
2. Maximum Maturities
To the extent possible, the LBWL shall attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the LBWL will not directly invest in securities maturing more than five (5) years from the date of purchase.
VIII. Reporting
1. Methods
The Chief Financial Officer shall provide quarterly a written report to the Board of Commissioners of the LBWL concerning the investment of the Operating Funds.
IX. The Board of Water and Light Operating Funds and Accounts
The Board of Water and Light has three classes of operating funds and accounts:
1. Restricted by Bond Resolution:
a. Bond and Interest Redemption Fund
This fund accumulates and pays bond interest and principal when due.
b. Bond Reserve Account
This account shall be used solely for the payment of the principal of, redemption premium, if any, and interest on bonds as to which there would otherwise be a default.
c. Operation and Maintenance Fund
This fund must include a sum sufficient to provide for the payment during the succeeding period of the next month’s expenses of administration and operation of the System, including such current expenses for the maintenance thereof as may be necessary to preserve the same in good repair and working order.
d. Construction Funds
These funds include bond proceeds earmarked for specific projects and spent only on those projects.
e. Rebate Fund
This fund shall be used to hold an amount sufficient to enable the LBWL to rebate excess investment earnings to the federal government.
f. Receiving Fund
This fund is required by bond resolution. All revenues of the LBWL are credited to this fund and are pledged for the purpose of meeting the requirements of the aforementioned restricted funds and accounts.
2. Designated by the Board of Commissioners of the LBWL:
a. Coal Inventory Account
This account is used to overstock coal and prevent shortage in anticipation of a coal or freight strike.
b. Uninsured Losses Account
This account is used to cover uninsured losses in environmental liability, property damage self insurance and workers compensation self insurance.
c. Water Facilities Account
This account was funded with proceeds received from Delta and Lansing townships for future water system expansion.
3. Unrestricted and Undesignated
a. Any revenue remaining in the receiving fund after satisfying all requirements of the restricted and designated funds and accounts shall be deemed to be monies that may be used for such purposes as the LBWL deems to be in its best interest.
Resolution 2009-07-2
Authority to Invest Operating and Pension Funds
RESOLVED, that Board of Water and Light Policy 7-01 “Authority to Invest Operating and Pension Funds” is hereby amended as follows:
RESOLVED, that the General Manager and the Chief Financial Officer shall be authorized to establish all necessary cash and investment accounts and to enter into all necessary transactions and agreements required to provide for the investment of operating and pension funds in the name of the Board of Water and Light (BWL), in such securities as permitted by law. Allowable transactions include, but are not limited to, the purchase, sale, and endorsement for transfer of certificates representing said securities. All transactions must also be in compliance with the then current BWL Pension and Operating Fund Investment Policies.
RESOLVED, that the General Manager and the Chief Financial Officer delegate full investment authority to the Manager of Finance and Planning.
RESOLVED, that the General Manager and/or the Chief Financial Officer may delegate full or limited investment authority to other specified BWL staff. The General Manager and/or Chief Financial Officer shall document the extent of authority delegated as well as the specific BWL staff receiving said authority. Only employees with actual, documented authority may be permitted to execute investment activities.
The Revenue Bond Act of 1933 (PA 94 of 1933, MSA 5.2731), as amended, Act 20 of 1943, as amended, and BWL Bond Resolution 89-10-3 govern and restrict the investment of BWL operating funds. Pension funds are governed by the Public Retirement System Investment Act (MCL 38.1132 et seq.), as amended.
This resolution supersedes Resolution 2007-9-12.
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Motion by Commissioner Kramer, seconded by Commissioner Zerkle, to approve the resolution entitled “Authority to Invest Operating and Pension Funds”
Action: Carried unanimously.
UNFINISHED BUSINESS
None.
NEW BUSINESS
The Nominating Committee recommended a slate of officers for the 2009-2010 Fiscal Year. The slate of officers included Commissioner Zerkle as the Chair and Commissioner Lain as the Vice Chair.
Chairman Lain asked if there were any nominations from the floor and with no nominations from the floor, the nominations were closed.
Moved by Commissioner Kramer and Supported by Commissioner Bossenbery to approve the slate of officers as recommended by the Nominating Committee with Commissioner Zerkle as the Chair and Commissioner Lain as the Vice Chair.
Action: Carried unanimously.
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RESOLUTIONS
Resolution 2009-07-3
Reappointment of the Charter Position of Director and General Manager
The Board’s Rules of Administrative Procedures and the Lansing City Charter specify that the Board is to appoint a Director and General Manager, Internal Auditor, and Corporate Secretary.
RESOLVED, That the Board of Commissioners hereby reappoints the following individual to the Charter position of Director and General Manager for a period of three years (July 1, 2009 – June 30, 2012):
J. Peter Lark, Director and General Manager
FURTHER RESOLVED, That J. Peter Lark shall receive an annual performance evaluation.
Moved by Commissioner Kramer and Supported by Commissioner Bossenbery to reappoint J. Peter Lark to the Charter position of Director and General Manager.
Action: Carried unanimously.
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Commissioner Lain thanked Mr. Lark for all of his work and stated that it has truly been a pleasure to work with him and he could not be more excited about Mr. Lark remaining at the Board of Water & Light.
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MANAGER’S REMARKS
General Manager Lark stated that just recently in Mt. Pleasant there was a water test taste off competition for the best water in Mid-Michigan and the Board of Water & Light was the winner of the Regional Award. General Manager Lark introduced Tim Hyde, Manager of Water Production and stated that he was the person who is most responsible for the Board of Water & Light receiving this award. He asked Mr. Hyde to stand to be recognized.
COMMISSIONERS’ REMARKS
Commissioner Kramer thanked Commissioner Lain for his service as Chair. He stated that there were several item on the Board of Commissioners agenda this year and Commissioner Lain took that leadership role of someone standing up and taking responsibility for the Board’s collective actions and did a wonderful job. He said that he was proud to serve with Commissioner Lain in the leadership capacity and looks forward to next year’s leadership under Commissioner Zerkle.
Commissioner Bossenbery spoke about her office taking part in green initiatives and participating in a water taste-testing event that compared bottled water and city water. She said only 4 people could tell the difference. This is a part of moving towards not having bottled water at any of their office meetings.
General Manager Lark stated that the Board of Water & Light’s water is considered quite excellent and has finished in the top 15 in taste tests nationally. He also stated that it has been a pleasure to work with Commissioner Lain and that he has been an outstanding leader. He congratulated Commissioner Zerkle on becoming the new Chair.
Commissioner Zerkle stated that it has been a pleasure to work with Commissioner Lain and that she appreciates the Commissioners support for her in the upcoming year. She congratulated General Manager Lark on a successful Chili Cook-Off and the amount of money that was raised.
Commissioner Lain stated that since he has been chosen as the Vice Chair the Board needed to address the position of Past Chair.
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Moved by Commissioner Lain and seconded by Commissioner Bossenbery to have Commissioner Kramer assume the duties of the Past Chair.
Action: Carried unanimously.
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Commissioner Lain spoke about his term as the Chair of the Board and said that he had fun and has enjoyed working with all of the Commissioners as well as the Administration and J. Peter Lark. He stated that General Manager Lark has put together a marvelous team and everyone has been extremely supportive.
EXCUSED ABSENCE
On Motion by Commissioner Plummer, seconded by Commissioner Zerkle to excuse the absence of Commissioner Tracy Thomas.
Action: Carried unanimously.
PUBLIC COMMENTS
There were no public comments.
ADJOURNMENT
On motion by Commissioner DeLuca, seconded by Commissioner Kramer, the meeting adjourned at 5:51 p.m.
M. Denise Griffin, Interim Corporate Secretary
Filed with Lansing City Clerk
August 4, 2009