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HomeMy WebLinkAbout2015-09-16 RMLD Citizens Advisory Board MinutesTown of Reading Meeting Minutes �\l9'Ovico vo r Board - Committee - Commission - Council: RMLD Citizens Advisory Board Date: 2015 -09 -16 Time: 6:30 PM Building: Reading Municipal Light Building Address: 230 Ash Street Purpose: Regular Meeting Attendees: Members - Present: RECEIVED TOWN CLERK READING. MASS. i ?2 A Of 39 Location: Winfred Spurr Audio Visual Room Session: General Session Mr. George Hooper, Chair (Wilmington); Mr. David Nelson, Vice Chair (Lynnfield); (Reading) Mr. Mark Chrisos (North Reading); Mr. Dennis Kelley (Wilmington) Members - Not Present: Mr. David Mancuso, Secretary Others Present: Mr. Dave Talbot, RMLD Board of Commissioners (participating remotely) Ms. Coleen O'Brien, Mr. Bob Fournier, Mr. Hamid Jaffari, Ms. J<athleep Rybak Minutes Respectfully Submitted By: Mr. George Hooper, Chair Topics of Discussion: 1. Call Meeting to Order - G. Hooper, Chair Chair Hooper called the meeting of the Citizens' Advisory Board to order at 6:30 p.m. and noted that the meeting was being audio recorded. Chair Hooper noted that Commissioner Dave Talbot would be participating remotely. 2. General Managers Update - C. O'Brien, General Manager Public Power Week: Materials: Flyer regarding Public Power Week Open House Ms. O'Brien reported that RMLD would be celebrating Public Power Week the first week in October. The RMLD Open House will be held on October 8 from 2:00pm - 5:00 pm. Ms. O'Brien gave an overview of some of the activities for the Open House, which will focus on grants RMLD has received and some of our new energy efficiency programs and offerings. Ms. O'Brien noted that RMLD has been looking into a reverse 911 "Code Red" notification system (which costs $17,000). When we started looking into it, we had 5,000 customer emails in our database. Customer Services has done a great job collecting information and we now have 15,000 customer contacts. Therefore, we are not going to go with Code Red, which will save $17,000. RMLD will track our progress in collecting this data with a goal of getting to 80% of our customers (which is all "code red" can give you). Eventually, we will take that data and put it into the IVR (integration for the outage management system). Ms. O'Brien noted that when Mr. 011ila opened the RMLD on -line store, he was able to use the 15,000 email addresses. Great achievement for RMLD. NEPPA Conference: Ms. O'Brien reported that Commissioner Talbot gave a talk (at the Conference) with some of the other communities on the fiber. Ms. O'Brien noted that she has a 10 -12 question survey that will be presented to each of the town managers. Page 1 1 It's intended to give a baseline idea of how much each town spends on telephone, etc., (RMLD will be going to voice over IP by the end of the year, which should bring our own phone costs way down.) The survey will provide a base -line, and then if the Commission votes on doing some type of study, it will need to go out to a consultant (due to staff time constraints). �- Ms. O'Brien asked Mr. Talbot if he had anything to add. Mr. Talbot commented that it ` would be good to see what you're asking and noted that it might be worth asking one of the other MLPs that does this to review the survey to make sure we are capturing all the potential expenses related to fiber that the municipalities are experiencing. In addition to the things mentioned, it could include fiber backhaul to their public safety radios, towers that are attached to the fiber network - just to make sure that when you are asking them what they spent today, you're asking for enough so that we know we are going to get the full picture. There are people at other MLPs that would be able to give you a good read on that. Ms. O'Brien reported that she will be meeting with the town managers soon. We will then set up the appointments to speak with the selectmen. Mr. Talbot stated that's great and the other side of that, which is probably the more important one for the study, is what fiber can maybe do some day for economic development in the towns. That's a bigger question, but its more about understanding what would be potentially useful to bring in high tech businesses - what would an attractive offering be that would be competitive and help them reduce their costs and help them decide to move here versus somewhere else. That worked for Holyoke. They attracted a $90m business center in part with that. But, that's separate from the survey that you're doing of course. The survey you are doing is about what the public agencies use and not the other questions about what we can do for businesses - correct? Ms. O'Brien responded yes, to see if they have an existing loop, whether or not its fiber or copper, what services they have now, whether they are interested in pursuing a fiber network. Mr. Talbot responded, that he believes the Town of Reading already has a fiber network up. The question for the Town Reading, would be who are you paying for your services over the network that you've already built and could that be done potentially more cheaply or with better service from RMLD? It's an interesting question. It's something that deserves some careful study. There have been examples of big savings in other municipalities that do this. So it's great that we are starting to look at it. Mr. Talbot added that there is an event on September 29th from 9:00 -1:00 at NEPPA in Littleton and invited CAB members to attend. Mr. Talbot will be a part of the event, which is trying to educate the community about the connection between fiber and economic development. Mr. Talbot agreed to forward a link to the report done at the Berkmen Center about the Holyoke MLP and what they did with their network. Ms. O'Brien asked Chair Hooper if we could move out of order on the Agenda and give the Financial Update prior to the report on the Organizational and Reliability Studies. Chair Hooper agreed. 3. Financial Update — Bob Fournier, Business Manager Mr. Fournier reported that the auditors have completed their fieldwork. They are now working on finalizing some numbers. Because of GASB 68, we are delaying the presentation of the final audited figures until they get their numbers from the Town. Net income or the positive change in net assets for FY15 was $2,548,000, which represents a 5.7% rate of return. We are allowed to make 8 %. It was a good year. Cash position is very strong at the end of the year; RMLD has $14.5m in the operating fund, a little over $5m in deferred fuel, and rate stabilization is almost at $6.8m. The auditors did not come across anything unusual. Except for the GASB 68 implications (which the bulk of its going to be recording the liability on the balance sheet and reducing the capital section) right now it is looking probably close to about $5m. There might be a small amount, depending how the markets doing in the investments, that might affect the current fiscal year, so we cannot provide a hard number tonight. However, the Page 1 2 auditors will be making their presentation to the Board of Commissioners at the October meeting and they can answer all the questions at that point. Mr. Fournier continued discussion of GASB 68. What the auditors needed to do this year was use the Town's actuarial report for the pension and do their testing on it. This is the first year they did it and the Town is running a little late on their audit because of that. They estimate RMLD will be about $5.5m short. The full liability amount is $10m, but because there is over $5m in the pension trust (the mechanism RMLD uses to pay our commitment to the retirement system), there is a balance of about $5 -6m that they will have to record. Mr. Chrisos asked how the rate of return (5.7 %) compared to budget. Mr. Fournier responded that we try to be in the mid to high sevens - as close to the 8% as possible. Ms. O'Brien added that the operating ratio was not high enough in the event that sales went down even more. We are allowed to make 8 %, and we just want to be sure that we are able to meet all of our commitments below the line and above the line. Chair Hooper asked if there were any additional questions. Mr. Chrisos asked about the impact of the unusually high September temperatures on usage. Ms. O'Brien responded that September has not yet be captured, but sales for the first two months of FY16 are down 2.5% compared to last year's actual. 4. Organizational and Reliability Studies: Materials: Leidos Implementation Timeline and RMLD Response to Booth & Associates Recommendations Ms. O'Brien reported that the presentation would include an update on both the Organizational Study and the Reliability Study. Ms. O'Brien began with the Organization Study review using the template that was included with the Leidos report. We are still in the process of trying to come up with timelines. When you are talking organizational things like "change the culture," it's very difficult to say when you will have something like that done. Therefore, it is a little more difficult to time that out, and we are still working on that. Ms. O'Brien reviewed her understanding of what the questions were: what were the recommendations; what are we committing to; and what are we not committing to? The hashmarks where we are extending certain things is just more of a realistic timeframe for how much it might take some of these things to do. What are our barriers? RMLD has three unions and we are going into negotiations; all the contracts are ending. When you are implementing organizational changes, they are not use to the process here. So the process needs to really be discussed so that everyone is aware of what Chapter 164 allows on job descriptions, career development, restructuring changes. There are some things that will take a little bit longer (working with union), but some things have already been started even before Leidos made the recommendations. Ms. O'Brien noted the only things that are not being done (right now) are on the front page (marked with the dots): hire additional HR personnel, and creating a new finance and administration division. Their organizational structure called for a director of finance, with HR under them. A lot of that had to do with the fact that there is a lack of succession planning. But, that would also call for a very high level director or finance. We don't have that money right now, and we are trying to create the succession without that, by providing some more training within the Business Division. For HR, Leidos is helping us. We have job descriptions that haven't been updated in 20 years. We're creating career development plans that have never been created. I'm going through all of the market analysis for all the jobs. We want to do is make sure that we have the right jobs for what this utility needs going forward so it meets those short and long -term plans: the job description matches what we need done; the salary /wage matches what the job description is, based on experience; and their space allocation matches what they do. But, because that hasn't been really done it's going to take a bit. We've finished the Line group and Tech Services. I'm on Integrated Resources right now, and then will move to Engineering, Finance and Human Resources, Pate 13 Mr. Nelson asked if the document provided was the timeline used to keep track of progress. Ms. O'Brien reported that there is another document that has been created,. but it's more of a very rough project timeline. Ms. O'Brien agreed to share it with the CAB once it is finished. We have committed to quarterly updates and should have it then. There are some things that I believe a manager should be able to process, and there are employees who think that that needs to go through a union. Therefore, there is this movement to push it towards negotiations, and I am working with legal right now to get the answer to that. Mr. Nelson asked if RMLD policies were addressed. Ms. O'Brien responded that they did not make recommendations for things that had already been identified and for which she had a plan. As an example, they mention update your financial plan - they want you to make sure that your policy that addresses your financial plan and your rates is updated. Ms. O'Brien noted that of the thirty policies, only some are governing and the rest are operational. Each one of these recommendations would come with an operational policy or procedure - it's inherent to the recommendation. RMLD is still going through the thirty existing policies and has just finished Policy 5 on Travel. Mr. Chrisos asked about the ability of staff to complete all of the recommendations as outlined. He also asked about the priority of the recommendations and the order in which they will be addressed, which was not clear looking at the document. All of the recommendations cannot be equally weighted. Ms. O'Brien responded, that they are all integrated, which is what makes it difficult to come up with a timeline. When you do an organizational structure, you are looking to see if you have the right amount of staff, doing the right jobs. The utility business saw major change in 1998, when deregulation came through, but now it's changing really quickly with solar, and the lack of gas capacity and transmission, especially in the New England area. Ms. O'Brien continued, you need to identify the people that you need - these are the tasks that have to get done: do I have those jobs, and do I have the skill set and the talent to do those jobs? That's the first priority. The career development is developing the training to get staff the right skill sets. Mr. Chrisos commented to evaluate where you stand, as an example in the next quarter and maybe the next year, you have to pick a metric that shows what's been completed (as a percentage). We should develop that, because then if you need help we can say that; we're getting behind schedule because we don't have resources, then maybe bring in some help, maybe a consultant. Mr. Chrisos cited as an example project management, which seems like a big piece. If we're falling behind, maybe we bring in an outside trainer to train everyone in project management. Mr. Chrisos suggested that with these very detailed studies and recommendations, if we track it, we should track it against a metric. There are many moving parts and they are all intertwined. Ms. O'Brien stated, if you have been doing your job, but you don't have time management skills or project management skills, but it is essential in order for you to do your job efficiently, this is how it starts to become a bit complicated. So, we are little bit premature in identifying the metric. In negotiations, a lot of this will start to resolve itself. Because that will be identified and that's why a lot of testing has been being done, because when you do testing you can say to the employee, now we know what you need to be trained in. However, if they don't want to be tested because they know they might not pass, or you are going to identify that they don't have that skill set, that becomes intimidating. It's one of the reasons why we called for this (study). So, we hired a consultant to say, yeah we're not reinventing the wheel here - this is what you need. Now everyone is on the same page. You have to go through that process so Page 1 4 there's a learning curve and people understand that this has to happen. What you are used to doing, it has to change because we have to stay with the times, we have to be competitive - sales are down, and we have to stay successful. Mr. Jaffari reiterated what Ms. O'Brien said. The utility industry is changing. There are lots of changes that are coming about and they require different sets of skills, so the job specs are changing. We have been working on the succession planning, job descriptions, job skill sets that are required to bring the workforce skills to the level that they can perform those analysis and we can move onto the next decade of the changes that are required in order to be a successful utility. So all of those things are in progress, but they are time - consuming. We have prioritized them; we know what needs to be done, but it's really hard to pinpoint exactly when this is going to happen. People are resistant to change. The sales are down. The maintenance is up. We must close the gap. In order to do that, we are going to have to keep preaching to the communities about energy efficiency - become more efficient in using the electricity. At the same time, we are becoming a very efficient organization as well. In order to become productive and efficient, there is a need for a culture change. Ms. O'Brien noted that Customer Services has been restructured under Integrated Resources (as of September 1) and that's going really well. Mr. Nelson commented that he thought Ms. O'Brien had accomplished a lot and was doing a great job. Something is a certain way for years and years and years, and maybe its good, maybe it's not. But, times change and things have to change; slowly but surely you are making change. Ms. O'Brien noted that it is not the intent to embarrass people. Its to try to educate people - this is the direction we need to go and we'll bring in other companies and people to explain to you that we are not making this up - this is what we have to do, and help train them and help them get in the right direction. The CAB agreed that quarterly updates would be sufficient. Mr. Jaffari reviewed the spreadsheet provided, which listed the Booth Reliability Study recommendations and the UPG recommendations. Mr. Jaffari noted that when he and Ms. O'Brien came on board at RMLD they started the process of evaluating the system, evaluating the organization, doing our own gap analysis - seeing what we need to do in order to move from the status quo to the future. When Booth & Associates conducted the reliability study, their recommendations were about a 90% match with our ideas. It reassured us that we are on the right path - it was nice to hear from others that these are the right steps to take. One of the early steps that we took (because of the lack of maintenance) was to propose and implement the seven maintenance programs. One of these seven programs was for the substations. We brought UPG in to test all substations from A to Z. They made 26 recommendations to address years of unattended issues. To date, a lot has been corrected and we are moving forward to complete the rest in a timely fashion. The spreadsheet outlines 71 recommendations - 45 from Booth and Associates and 26 from UPG. Of the 71, there are 53 that are recommended solutions by Booth. About eight of those 71 recommended solution have been completed to date. There are ten recommendations where we decided to take an alternative approach; there are a number of reasons why we decided to take an alternative approach. We had some construction challenges with the solutions that were recommended for the substations. Booth recommendations require major construction and we are still going to have limitations. The reason they made those recommendations was to increase the feeders' current carrying capacity. They performed thermal loading analysis, which indicated Page 1 5 every feeder current carrying ampacity limitation, and therefore, they made the recommendations to double -up some feeders out of substation 3 and 4. Doubling -up the feeders will create more heat, which means you're not going to get the full benefit of the thermal loading capability of the cable. So, for what they are recommending - to double up - we don't have the empty ducts available. All ducts coming out of both substations are full - that's lack of design; they should have had two parallel duct lines 15 -20 feet apart so the heat exchange wouldn't lower the rating of the cables. It wasn't done properly the first time, and now it's too late to do that because there are no ducts available in the current duct system coming out of the substation to the streets. Adding another duct bank now wouldn't be beneficial. The alternatives are (1) transferring the heavily loaded circuits to the lightly loaded circuits by switching and shifting the load basically from one to another, and (2) building a new substation in Wilmington, (which is in the plan from 2016 -2019) and take load off of substation 3, 4, and 5. Booth also made the recommendation to build that substation in order to replace existing Station 5, which is at the end of its useful life. So, the ten recommendations that we decided to follow an alternative solution are addressed in the planning of the new substation. If the RMLD Board approves the construction of our new substation, we're going to bring the feeders form the new substation to substations 3, 4 and 5, and provide the relief that is required. In the meantime, we are shifting load from Station 4, which is heavily loaded, to Station 3 and 5 until we build a new substation. So, that's why we decided to go with an alternative solution. If you look at your sheet, seven out of the ten recommendations that call for feeder upgrades, are addressed by building the new substation. Two are related to Station 5, which is at the end of its useful life. At Substation 4, they called the switchgear obsolete. We brought UPG to verify and I asked if the gut of the system could be changed without touching the outer structure. The report indicated that the switchgear structure's integrity is intact. So, rather than spending $2m to change the entire switchgear, we will only spend about $300k to replace the breakers (operate the breakers) without disturbing the bus bar, which is going to stay the same (CTs and PTs and all the relays are going to stay intact). Spending $2m to upgrade it is ideal. However, we can live with a less expensive fix by only changing the gut of the system and extend the life for another 10 -15 years. The same strategy is being used for Station 5. We will have UPG test it and see what kind of condition it is in and what we can do to survive until we build a new substation, which will be operational in 2019 -20. In the meantime, I have to make sure that the station is in good condition - at least workable condition. Rather than spending money on outdated equipment (a station that is at the end of its useful life), we will put the money towards the new substation. In summary the, alternate solutions (including item 2, 12, 19, 23, 32, 34, 36, and 38) are related somehow to the new substations and the feeder balancing and feeder load shifting. Ms. O'Brien noted that the new substation being described is already in the budget (it is not another new one). Mr. Jaffari stated that the new substation should go on -line in 2020. However, we will not fully- retire Station 5, we will use it the end of its useful life, and we will have the new substation that will take over and carry the load. Mr. Jaffari stated that the other recommendations are well- managed. We've got some timing associated with them. Approximately 14% (of the 71) are alternate solutions as I explained and 86% were accepted as recommended. The ones that are completed are noted. Some of the work is still in progress as you will see as the status. Mr. Nelson noted that when Booth gave their presentation there were three or four grounding and fencing issues noted. Mr. Jaffari responded that those are being done now. Mr. Chrisos asked about the Arc Flash and Mr. Jaffari responded that the study was complete. The labels are up at the substations, and labeling of system transformers (4,000) is in process. Any new transformer installed in the system will have the sticker on it. FR rated clothing for Category 4 (80 Cal) is being purchased for everyone. The operational procedure is written and is going to the Electrical Safety Committee. Mr. Jaffari explained that any safety operational procedure will go to the Electrical Safety Page 1 6 Committee, which is comprised of operations, engineering and technical services. Recommendations are then presented to the General Manager for approval and it becomes officially adopted. Mr. Jaffari noted that all relevant staff has been trained. Mr. Talbot signed off from the meeting. Mr. Chrisos asked if RMLD owns the parcel of land on Haverhill Street, North Reading, where the old substation was located. Ms. O'Brien agreed to look into it. It was noted that there is also a parcel of land (across from Town Hall) in Lynnfield that is owned by RMLD. Chair Hooper asked if there were any other questions on the Reliability Study. There were no other questions. 5. NEXT MEETING — G. Hooper, Chair The next CAB meeting was scheduled for October 21, at 6:30 pm. Ms. O'Brien asked if Mr. Hooper about the community solar initiative in Wilmington. Mr. Hooper noted that he had met with Mr. 011ila, and will be presenting it to the Town Manager before going to the selectmen. Mr. Hooper noted that it is a good concept. Ms. O'Brien offered to assist with the presentation if needed. Mr. Nelson asked if this program was unique to Wilmington. Ms. O'Brien responded that RMLD had approached the Town of Reading and they declined. Ms. O'Brien noted that it is challenging to develop the project parameters (who's going to build it, how it's going to work and how the numbers work) without first identifying a specific site. Wilmington has a potential site so we can work with them to come up with what the package could look like. Mr. Hooper noted that it is going to be part of the Green Program and we will bring customers in. Ms. O'Brien noted that it will be offered to each of the towns and depending on what they want to target as the community project would depend on what finances look like (the construction, who owns the SRECS, who owns it at the end of 20 years). Ms. O'Brien noted that Mr. 011ila has been reaching out to each of the towns. Mr. Nelson asked about the status of the town Administrator /Manager meetings. Ms. O'Brien responded that we are trying to get a meeting scheduled to include all the town managers. If that does not work out, we will begin to schedule individual meetings with each town manager. Mr. Hooper asked about the LED replacement program, and noted that he has noticed LED fixtures installed sporadically. Ms. O'Brien responded that we are in the full implementation phase so we are replacing a certain percentage of lights in each of the towns every year for three years. In the meantime, if a light goes out, the nightman determines whether the whole physical arrangement needs to be replaced. If that's the case, an LED is installed. 6. Motion to Adjourn — G. Hooper, Chair Mr. Nelson made a Motion to adjourn the Citizens' Advisory Board meeting, seconded by Mr. Chrisos. Hearing no further discussion, Motion carried 4:0 :1 (4 in favor, 0 opposed, 1 absent). The Citizens' Advisory Board Meeting adjourned at 7:44 p.m. As approved on October 21, 2015. Page 17