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HomeMy WebLinkAbout2014-11-06 RMLD Board of Commissioners Minutes - General Manager Review CommitteeF e Town of Reading ra f Meeting Minutes ®o f Fr"I.rn 4 G Board - Committee - Commission - Council: i8ib MAY 12 A % 23 RMLD Board of Commissioners General Mgr. Review Committee Date: 2014 -11 -06 Time: 6:30 PM Building: Reading Municipal Light Building Address: 230 Ash Street Purpose: General meeting Location: General Managers Conference Room Session: General Session Attendees: Members - Present: Committee Chairman Stempeck, Messrs. Pacino and O'Rourke Members - Not Present: Others Present: RMLD Staff: Mses. O'Brien, Foti and Mr. Jaffari RMLD Citizens' Advisory Board: Dave Mancuso (partial attendance) Town of Reading Board of Selectmen: Marsie West Minutes Respectfully Submitted By: Thomas O'Rourke, Chairman Topics of Discussion: Review of General Manager, Coleen O'Brien Chairman Stempeck called the meeting to order. Chairman Stempeck explained that the purpose of the meeting is to review the performance criteria that will be used for the evaluation of the General Manager. Chairman Stempeck apologized to Ms. O'Brien because this should have been Performed in July as per her contract. We are late, but anything that will be done will be retroactive to the July 15 date. The performance criteria are the same that have been utilized previously with modifications made to that template. Chairman Stempeck said that he would like to get input from everyone. Chairman Stempeck commented that Ms. O'Brien had seen this document previously. Chairman Stempeck said that any recommended changes could be brought to the full Board. Chairman Stempeck said that at the following Board meeting, each commission member will fill out the form, tally it at that time and make the recommendation in terms of salary, cost of living increase or whatever else is appropriate, retroactive to July 15. Any other suggestions by committee members are welcomed. Chairman Stempeck said that the document contains many buckets: finance, energy efficiency, etcetera with weighted percentages. There are also goals for future performance including priorities, goals and timetables. Some items can be added from a strategic plan perspective. The review process will include page by page review for input. This will also include Ms. O'Brien s input. Mr. Pacino entered the meeting at this point. Page i 1 Evaluative Criteria Chairman Stempeck handed out the evaluation to all those present. Chairman Stempeck said that if the CAB wants to add input to the evaluation document to provide him with such comments. By the next meeting we will take a poll and take the weighted average score which has been past precedent. Chairman Stempeck said that Mr. O'Rourke had mentioned that the percentage weighting for leadership should be more than ten percent Chairman Stempeck is in agreement with this because there have been so many changes implemented that a strong leader makes things happen and reconstitutes the organization, which the General Manager has been doing extremely well. Leadership should be weighted more heavily and that additional amount should be taken from another category. Mr. O'Rourke suggested that ten percent is not enough for leadership. Chairman Stempeck asked Ms. O'Brien if the categories that have changed percentage wise are satisfactory. Ms. O'Brien responded that energy efficiency and load management constitute eighty percent of the budget, operating and maintenance is only twenty percent of the budget. The percentile factors should align with these factors. Page 1: Changes: Percentages changed Energy Efficiency and Load Management 15 %; Leadership 20 %; Board Relations 5 %. L Finance Chairman Stempeck pointed out that on item 7, it currently reads "meets its 8% return." The RMLD has managed less than that in the last couple of years. Mr. O'Rourke clarified that 8% is the maximum. Mr. Facing, concurred and if we over collect, we can give money back to the customers or the pension reserve to fund that liability. Mr. O'Rourke suggested having a range of acceptability such as 4% to 8 %. Mr. O'Rourke said that he feels more comfortable with a range. Regarding the 8 %, Mr. Pacino added that the payment below the line comes to the towns and what is left goes into the system. Mr. O'Rourke asked for fiscal year 2015 if there is a budgeted return rate. Ms. O'Brien replied this is found in the Six Year Plan. Mr. O'Rourke suggested putting in the language of meet or exceed the budgeted return. Ms. O'Brien pointed out that the percentage can fluctuate due to payments or payouts. Ms. O'Brien said that there are certain standards to cover your commitments in scenarios that will occur. We do not try to always make 8% because we want to keep the rate as low as possible, but maintain prudent fiduciary duties. If OPEB and Pension Trust changes, a range of 4% to 8% is the target. Ms. O'Brien pointed out that if she is building a substation that will draw this down if there is less capacity in Wilmington, she does not want to be penalized. Chairman Stempeck suggested that he would like to see more charts and graphs, not just budgetary numbers for Board meetings because it is a much better communication method. Ms. O'Brien is in agreement because the bills are unbundled. Ms. O'Brien reported that Mr. Fournier is working on unbundling the financials, but the budgeted amount needs to remain in order that you have something to refer to. Ms. Ulb ien said that she would like to see a format that is different than Mr. Fournier has presented previously. Mr. Talbot commented that on an ongoing basis it would be good to we what RMLD's revenue is, which is flat. Over longer time scales, how does it look and what does that mean in terms of the overall business model that worked so well for decades. This will demonstrate what is happening to the current business model. Mr. Talbot pointed out that he thinks it is important as a board to see and understand the strategic issues. Mr. Pacing added a change to item eight, to read in the prior year audit management letter. Page 2: Changes: Items #7 and #8 #7. Create a plan to show how the RMLD will meet or exceed the budgeted return with a target of 4% to 8 %. #8. If required, report to the Board on matters raised in the prior years audit management letter. Page 1 2 II. Energy Efficiency and Load Management Chairman Stempeck suggested taking out Item #7, "Propose budget funding to decrease the RMLD energy use at the 230 Ash Street complex by at least 5 %." This is so small in the scope of things for an $80 million operation. Promoting energy efficiency is a great thing to do, it is a noble thing to do without the dollar criteria. Mr. Talbot said that the RMLD should be more specific on Item #5 because the sharp economics of what is called green power can be a misnomer. Photovoltaics are more economical whereas transmission and power supply costs are going up. The power we purchase is going to get more expensive. He would like to see numbers and projections on photovoltaics and get RMLD back into generation, whether it be photovoltaics or something else. Chairman Stempeck is in agreement the tactics are different than the strategies. Any other mechanism to reduce our peak needs to be looked at. There are so many things over the past couple of months that have taken the focus off the RMLD, the RMLD needs to get back on track and should be embedded in the strategic plan. Mr. Talbot said that the study being performed will show us ways to deal with the peak. Mr. Talbot added that we could enumerate a certain peak shaving capacity. Ms. O'Brien responded that the system needs to be more flexible to handle peak shaving. Distributed generation proves to be an economical way to address the peak and many utilities are using that. Ms. O'Brien explained that currently the RMLD is working with Tangent for demand response to create an incentive for customers to shave their peak. If the RMLD is going to shave customer load the electrical system must remain stable. There may be the need to have caps on the photovoltaics as well. The RMLD is in the business of selling electricity. Many utilities encourage a cap. Mr. Talbot said that his point is to get ahead of it where the RMLD can put up its own photovoltaic panels and selt the electricity. Ms. O'Brien said that this evaluative criteria is based on last year. Ms. O'Brien added that you want her to look at the system flexibility, perform economic development and demand side management. Ms. O'Brien said what is lacking in this approach is attracting and retaining customers. Chairman Stempeck added that Item #7 could be replaced to read "Adopt pro -active measures to attract and retain customers through economic development." Ms. O'Brien briefly discussed having charging stations off peak. Mr. Mancuso left the meeting at this point due to an unforeseen emergency. Mr. Pacino said that there is nothing contained relative to the Renewable Energy Certificates. Chairman Stempeck added that the RMLD has been charged with selling the RECs at maximum value which has been done. Mr. Pacino commented that if the market goes down on the RECs it may make better sense to retire them versus selling them. Ms. O'Brien stated that the RMLD is not investing in biomass RECs because they are not worth it. Mr. Pacino stated that he would like the wording to reflect energy - related financial instruments because it can pertain to another instrument besides RECs that may come up in the future. Page 3: Changes: Items #7 and #8 Replace #7 with: Adopt pro-active measure to attract and retain customers through economic development. Add #8: Maintain policy of maximizing return from any energy - related financial instruments. III. Reliability of the System Chairman Stempeck commented that Item #8 "To propose budget funding for a twenty-five year plan for increasing the RMLD's resistance to hurricanes and ice storms" should be deleted. Mr. O'Rourke asked if there are reliability metrics. Ms. O'Brien responded that the RMLD does have those, but what is missing is any long term planning which provides a road map for staying competitive and keeping the RMLD up to date on safety and construction standards. Chairman Stempeck added to "Initiate and maintain a 20 year reliability plan." Page 1 3 Mr. Pacino asked about the meter upgrade project, is it still going on. Ms. O'Brien responded that she canceled the 500 club because the AMR meters that were installed into the fixed network did not have two way communication. You could not make the system flexible if you do not know the current voltage at the end of the line. We cannot communicate with the meter without two way communication. There was no plan for the attributes of the meter; the new technology was coming behind them. The 500 club customers will get meshed meters that will be two way communication. On a handful of AMR meters that cannot provide data, the module will be changed out at the end of certain meters in order to get data. On a hot day, in order to shut down the system by 2.5 %, we need to have that data. In the capital budget there are the 500 club meters. Ms. O'Brien added "develop a predictive and preventative maintenance schedule." Mr. O'Rourke asked if the RMLD had one. Ms. O'Brien responded, no, but she created one. The Technical Services group was formed with existing employees to negate the need of contractors to perform this service. A full program is now underway. Page 4: Changes: Items #7, #8 and #9 #7: Change to: Address the Meter Upgrade Project. #8: Change to: Initiate and maintain a 20 year reliability plan. #9: Develop and maintain a predictive and preventative maintenance schedule. IV. Manage Employees Mr. O'Rourke said the title should read "Employee Relations." The committee members were in agreement. Mr. O'Rourke commented that employee relations is a component of many of these things. Ms. O'Brien added that Item #1 needs to read "Assess and train in order to maintain a highly skilled and knowledgeable workforce." There are Career Development Plans in place, once this component is completed then she can "Maintain a highly skilled and knowledgeable workforce." Mr. O'Rourke added if succession planning should be in here. Ms. O'Brien said that the organizational study will look to see if skill sets are in alignment with salary. Ms. O'Brien said that SP could be in Leadership. Mr. O'Rourke was recommending that employees receive regular feedback besides the annual review process. Ms. O'Brien pointed out that in the past, employees received step raises when due, but now they have to meet requirements in the Career Development Plans - career and performance based. Page 5: Changes: Title Change and Item #1 Change title to Employee Relations #1: Change to: Assess and train in order to maintain a highly skilled and knowledgeable workforce. V. Leadership Chairman Stempeck asked Mr. O'Rourke for his comments. Mr. O'Rourke expressed concern about succession planning. Ms. O'Brien said that she has put some succession planning in place whereas the organizational study will be addressing this as well. There are some job descriptions where there is no one physically able to cover. Ms. O'Brien added there was a strategic plan performed in 2008: it should be continuous. After the organizational and reliability study, they both need to be integrated and we must go back to the strategic plan for updating. Ms. O'Brien added that she has continued to delegate, monitor, mentor, and support the impact of cultural change as a result of a transitioning the RMLD from reactive to proactive. Page 6: Changes: Items #4 and #5 #4: Change to Assure that the goals and implementing strategies of an updated strategic plan are being followed. #5: Add Report to the Board once a year on succession planning. VI. Relationship With The Board Page 7 No changes. Page 14 VII. Relationship With The Community Served By The RMLD Chairman Stempeck questioned attendance all meetings of the CAB is in here, does Ms. O'Brien go the meetings. Ms. O'Brien responded that she attends most of the meetings. Chairman Stempeck added that Ms. O'Brien has met with all the town managers. Mr. Pacino asked how often Ms. O'Brien meets with the Town Manager. Ms. O'Brien responded that she has met with the Board of Selectmen at least twice. Mr. Pacino said that the former i3MLD manager met monthly with the Town Manager. Mr. Pacino said that he would like Ms. O'Brien to meet with the Town Manager monthly. We are working towards common goals. Ms. O'Brien said she would e-mail the Town Manager to add additional meetings in addition to the Department Head staff meetings. Page 8: Changes: Item #2 #2: Change to: The General Manager, Acting General Manager, or designated individual, to attend all meetings of the Citizens Advisory Board. The Board members would like to have a joint meeting with the Reading Board of Selectmen, to address any disconnects. Ms. West was in agreement. Motion to Adjourn At 7:37 p.m. Mr. Pacino made a motion seconded by Mr. Stempeck to adjourn the meeting. Motion carved 3:0:0. Page 1 5