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HomeMy WebLinkAbout2019-05-07 RMLD Board of Commissioners Minutes TO'>WH C'_ERK '. Town of Reading 149�a Meeting Minutes 2NI FE) -2 PM 3: 05 Board - Committee- Commission - Council: RMLD Board of Commissioners Date: 2019-05-07 Time: 06:00 PM Building: Reading Municipal Light Building Location: Winfred Spurr Audio Visual Room Address: 230 Ash Street Session: Open Session Purpose: General Business Version: Final Attendees: Members- Present: David Talbot, Chair; John Stempeck, Vice Chair; David Hennessy, Commissioner; Thomas O'Rourke, Commissioner; Philip B. Pacino, Commissioner Members- Not Present: other Present: RMLD Staff: Coleen O'Brien, General Manager; Hama Jaffarl, Charles Underhill, Assistant Director of Integrated Resources; Tracy Schultz, Executive Assistant. Financial Committee Liaison:Karen Herrick Minutes Respectfully Submitted By: David Hennessy, Secretary Pro Tem Topics of Discussion: Call Meeting to Order Chair Talbot called the meeting to order and read RMLD's Code of Conduct. Chair Talbot announced that the meeting is being videotaped at the RMLD office at 230 Ash Street, for distribution to the community television stations in North Reading,Lynnfleld,and Wilmington. Public Comment Chair Talbot asked Mr. Hennessy to serve as Board Secretary. There was no Citizens' Advisory Board member in attendance and no public comment. Discuss and schedule a solar power workshop for nonproBVpublic-sector entities, private commercial property owncrs,and other Interested parties. Chair Talbot explained that it is the intention of the board to schedule a special board meeting that will provide Information to the public about solar power. Topics and the submission of questions by the public prior to the meeting were discussed. Chair Talbot thanked Ms. O'Brien and the Department for their hard work. June 20 was decided as the workshop date. Explanation and discussion of PILOT payment research plan and schedule Ms. O'Brien gave an update and stated that RMLD hired an independent party to look at the study she had performed.They're updating it and ii's expected to be done by late spring. Ms. O'Brien stated she will send the results (without deliberation) to The Commissioners and then give a presentation.The timing of the presentation was discussed and when the document becomes Page I r APPROVAL OF BOARD MINUTES MAY 7, 2019, MAY 23, 2019 AND JUNE 20, 2019 ATTACHMENT 1 Presentation of the 2018 Audit Department's unbilled receivables. July bills include a lot of AC use so the revenues that the Deportment receives in July are typically higher than the revenues received in January. There was a corresponding reduction In the estimation of receivables. Moving lorward that figure will be more comparable from year to year. Mr. Fentross then discussed net pension liability, staling that it hos a balance of about$10,781.000.This represents the Department's portion of the total unfunded liability of the Reading Contributory Retirement System, The Department's portion of that total unfunded liability is about 29 percent. The contributory retirement system is about 79 percent funded.The average in the Commonwealth is 70 percent so Reading is above overage in Its funding. Mr. Fentross reminded the Commissioners that the Department has set aside some funds to help fund the liability. The pension trust has a balance of $5,878,000. According to accounting standards, that cannot reduce the liability that's presented, because It's not in the control of the contributory retirement system. However, considering the funds set aside, the Deportment's true liability is about $4.9 million. Mr. Fentross then discussed the Net OPEB liability, which has a balance of$7.374,000.When Phe Deportment moved from a June 30 year end to 0 December 31 year end, the actuaries produced new reports, and there was on Increase of $215,000. Mr. Fentross then moved on to the Statement of Revenues. Expenses and Changes in Net Position.The figures presented are Only for a six-month period. However,as part of the audit, the auditors doubled the six-month figures and then compared them to 12-month periods: Fiscal Year 18 and Fiscal Year 17 were comparable. Mr. Fentross then staled that the change in net position has a balance of $4.891,000. The Department had strong operating results and that figure reflects that. The Department of Public Utilities staled that eight percent rote of return is okay for a six-month period, and the Department is below eight percent. The Statement of Fiduciary Net Position is where the OPEB trust fund is presented. It has a balance of$3.561,000. These are the assets that have been set aside to fund the other post-employment benefits. In 2018 the total OPEB liability was$10.705,000. However, the Department has put aside$3.561.000 towards funding that liability,which leaves a total unfunded liability of $7.144,000. It is about 33 percent funded. which is o strong position for the Department to be in. When comparing the OPER liability to towns, towns are generally well below len percent funded. Other light departments are anywhere between 25 to 40 percent,so t0 be at 33 percent is a strong position for the Department Mr. Fentross concluded by stating that the Department had positive operating results,has a well-funded OPEB trust fund,and there was no management letter. Report of the Audit Committee Mr. Pacino stated that the Town and the Board's Audit Committees met and heard the same presentation from Mr. Fentross earlier in the evening.Both committees voted to recommend that the Commission accept the audit as presented. Mr. Pacino asked Mr. Fentross if he thinks the new lease standard will have any effect on RMLD. Mr. Fentross explained that the leases are currently presented in a note disclosure. Governmental Accounting Standards Board Statement number 87 Is not going to come into effect until 2020.Mr.Fentross stated that the oudRors will be working with management.Mr. Pacino then asked about key audit matters,and whether that is something that the Board should consider. Mr. Pacino explained that It would be o separate paragraph In the opinion letter reporting anything that's risky. Mr. Fentross staled that he is unaware of that, but as for as anything risky, there was nothing in the audit that would warrant that disclosure. If there was something that could be improved or if the Department was engaged In a risky transaction, that would have been addressed in a management letter. Mr. O'Rourke asked Mr.Fentross to talk about cash on hand.Mc Fentross explained that the industry standard is to have three months of operating cash on hand. RMLD has about 2.6 months,which is a little lower, but as of June 30,2018 the ratio was at 2.3 months:the Department is trending in the right direction. W. Herrick asked if there were industry standards far the different accounts listed, such as depreciation and rate stabilization. Chair Talbot clarified that Ms. Herrick was asking if there were standards and where RMLD fits. Chair Talbot then asked Mr. Fentross R he represents other light plants. Mr. Fentross replied that he audits six municipal light plants a year and that as far as restricted cash, he Is unaware of any industry standards. Mr. Fentross added that compared to the other light departments that he has looked at, RMLD's cash position is better.Mr.Fentross stated he could not compare RMLD to other departments by line item at the Page 12 Report of the Audit Commiitee current time but could do an analysis. Ms. O'Brien stated that she can write an explanation of how the OrmOunts are established.Ms.O'Brien explained that it's difficult to compare to other municipals because they don't have the some types of transactions. Chair Talbot suggested that Ms. Herrick email Ms.O'Brien clarifying her question. Mr. Pacino made a motion,seconded by Mr. Hennessy, that the Board of Commissioners accept the Audit Report from Melonson Heath, Fiscal Period ending December 31, 2018 as presented, on the recommendation of the General Manager. Motion Carded:5;0:0. General Manager's Report Ms. O'Brien requested that the Board allow her to attend the NEPPA conference in New Hampshire. Mr.Stempeck made a motion, seconded by Mr. Pacino, that the Board approve Ms. O'Brien's travel to, and attendance at, the NEPPA conference to fake place from August 18 to August 21, in Bretton Woods, NH. Motion Canted:5:0:0. Integrated Resources Division Q- Power Supply Report-March 2019 Mr. Underhill stated that RMLD is tracking very well against budget and performing better than what was budgeted. Market power supply costs,capacity,and transmission were discussed. b. Solar Workshop Update The solar workshop is scheduled for June 20m at 7:00 p.m. c. Solar Rebates Mr.Underhill explained that the state achieved a supplemental appropriation for solar programs that is budgeted of a quarter million.This significantly increases public investment in solar. Energy New England will be helping RMLD in the rebate process.Ms.O'Brien explained that it applies to projects that have a maximum of 25 kWh,with the rebate not to exceed up to 50 percent of cost.Chair Talbot asked if the program makes solar more affordable.He was answered In the affirmative.Ms.O'Brien stated the maximum rebate per customer is$2.000 and is only available until the funds run out.That means a maximum of 30 customers are eligible. Chair Talbot asked who is eligible.Mr.Underhill replied that the program is for residential and small commercial customers.Mr.Stempeck asked for the name of the program.Mr.Underhill replied that it is the MLP Solar Program. Engineedng and Operotlons Report Mr. Jaffori reviewed major construction projects, maintenance, and reliability. Grid modernization is ahead of schedule and the BESS battery Is online and running. Mr. Jaffari reviewed area upgrade projects including Gloria Lone in Lynnfield. Lynnlield has 28 pending pole transfers and one pull pole. Reading has 30 pending pole transfers and five pull poles. North Reading has three transfers and 16 pull poles, while Wilmington has 10 transfers and one pull pole. Reliability is great and RMLD is well below the national and regional averages. Mr. Jaffori reviewed outages and stated that the tree trimming program is working. Capital spending year- to-date is$1.2 million. Determination of Uniqueness of Property Mr. Jaffori explained that Board is voting to waive advertising for the Wilmington substation site. The notice will still go into Central Register. The Letter of Intent is signed, and an environmental assessment is being conducted.The Purchase and Soles has contingencies for permitting. Mr. Stempeck made a motion, seconded by Mr. Pacino, that the RMLD Board of Commissioners approve the Determination of Uniqueness of property and waive the publication requirements of M.G.L. Chapter 30B § 16, with respect to the acquisition of land located off Andover Bypass Street (Route 125) in Wilmington, MA 01887, and identified on the Town of Wilmington Assessor's Map in Book 891,Page 15, on the recommendation of the General Manager. Motion Carried:50:0. Page 13 General Discussion Mr.Underhill stated that he hod misspoke in a previous meeting:Volta has Level 2 chargers,not Level 1. Meeting dates were discussed. Adjoumment At 8:32 p.m., Mr. Pacino made a motion, seconded by Mr. Hennessy, that the Board go into Executive Session to consider the purchase of real estate and return to Regular Session far the sole purpose of adjournment. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Philip B.Pacino,Secretary Pro Tem RMLD Board of Commissioners Page 14