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HomeMy WebLinkAbout2022-05-23 RMLD Board of Commissioners MinutesTown of Reading Meeting Minutes Board - Committee - Commission - Council: RMLD Board of Commissioners Date: 2022-05-23 Time: 7:30 PM 'RECEIVED TOWN CLERK READING, MA. 2022 DTC -5 AM 7: 57 Building: Reading Municipal Light Building Location: Winfred Spurr Audio Visual Room Address: 230 Ash Street Session: Open Session Purpose: Joint Meeting with CAB Version: Final Attendees: Members - Present: RMLD Board of Commissioners: Marlena Bite, Chair; Philip Padno, Vice Chair; John Stempeck, Commissioner; David Talbot, Commissioner; Robert Coulter, Commissioner. Citizens' Advisory Board: Jason Small, Chair (North Reading); George Hooper, Secretary (Wilmington); Dennis Kelley (Wilmington); Ken Welter (Lynnfield). Members - Not Present: Citizens' Advisory Board: Vivek Soni, Vice Chair (Reading). Others Present: RMLD Staff: Coleen O'Brien, General Manager; Janet Walsh, Director of Human Resources, Hamid Jaffarl, Director of Engineering B Operations; Gregory Phipps, Director of Integrated Resources; Wendy Markiewicz, Director of Business Finance; Erica Morse, Executive Assistant. RMLD Select Board Liasons: Karen Herrick; Jackie McCarthy Minutes Respectfully Submitted By: Philip Pacino, Secretary Pro Tem Topics of Discussion: JOINT MEETING OF THE RMLD BOARD OF COMMISSIONERS AND CITIZENS' ADVISORY BOARD 1. Call Meetino to Order Chair Small called the Citizens' Advisory Board (CAB) meeting to order at 7:30 PM. Chair Bita called the Board of Commissioner's (BoC) meeting to order at 7:30 PM and announced that the meeting would be held remotely on Zoom and streamed live on RCN and YouTube. Opening Remarks and Introductions Chair Bits read the RMLD BoC Code of Conduct and asked all remote attendees to identify themselves. Jackie McCarthy, Reading Select Board Liaison, participated in the meeting remotely on Zoom. Vice Chair Pacino served as Secretary at the meeting. 2. Public ommen Liaisons to RMLD Board No liaisons to the RMLD Board spoke at this meeting. Public Comment There was no comment from the public at this meeting. 3. Presentation of 2021 Financial Audit Findings Materials: RMLD Board Packet (Attachment 1) 2021 Financial Audit Findings Zachary Fentross, CPA, Melanson, presented the 2021 Financial Audit findings. Zach discussed the audit finding highlights as follows: Conclusion RMLD had positive operating results, a well -funded OPEB trust fund, and there was no management letter. Independent Auditor's Report (Board Packet, Page 5). • The RMLD received a clean opinion. This means there are no exceptions, and this is the best opinion you can receive from an independent auditor. • This is the same opinion the Department has received in prior years. Management's Discussion and Analysis (Board Parket, Page 8 - Page 11). • Zach noted that this section is a narrative summary of the results of operation and discusses major financial areas. Statement of Net Position (Board Packet, Page 12). • The statement of net position (balance sheet) was presented on a comparative basis. • Unrestricted cash and short-term balance Investments (current assets) had a 3.3 million dollar decrease from the prior year. o The decrease is primarily due to the use of operating funds for capital improvements. •. Capital assets net of accumulated depreciation (non-current assets) had a 3.3 million dollar increase from the prior year. o The increase is largely due to the capital improvements made In CY21. o The two largest capital improvements were over overhead and underground conductors. o There was a large convergence process to increase the voltage for a certain portion of the Town. o Approximately 178 transformers were replaced in CY21. • Net pension liability (non-current liabilities) is largely unchanged from the prior year (one hundred -thousand -dollar decrease) and is one of the larger liabilities on RMLD's balance sheet. o This represents RMLD's proportional share of the total unfunded liability for the Reading Contributory Retirement System. Page 1 2 o The liability is being presented as of December 31, 2020; amounting standards allow the liability to be presented on year in arrears. o The Reading Contributory Retirement System is about 79%funded; slightly above the average in the Commonwealth (70%-75% funded). o Being funded slightly about the average is a good position for the RMLD. • Net OPEB liability (Other Post -Employment Benefits) had a 3 million dollar decrease from the prior year. • tach noted that OPEB is essentially health insurance; the RMLD has an actuary come in to determine what the health Insurance payments will be Into the future for both for active and retired employees. o The decrease is due to a change in benefit terms in relation to some Part A and Part B Premiums o This liability is 55% funded. (Refer to Board Packet page 46 and below) Required Supplementary Information (Board Packet, Page 46) • Schedule of net OPEB liability was calculated by the actuary. • The plan fiduciary net position demonstrates the amount that RMLD has already put aside. • The total net OPER liability (as seen on page 12) shows a funding percentage of approximately 55%. • In comparison to others in the Commonwealth, this is a well -funded OPEB trust fund and is a good financial position for the RMLD. o Light Departments are anywhere from 30%-35% funded. • Vice Chair Padno noted that during the presentation to the Audit Committee, it was discussed that this number has gone down due to changes in terms of the actuary. o Sharon Angstrom had explained that some people on the health plan were over 65 and should have been on Part A and Part B of the Medicare. o Overall, the Town saw a 10 -million -dollar decrease, 13). Statement of Revenues, Expenses, & Charge In Net Position (Board Packet, Page • Statement of Revenues, Expenses, & Change in Net Position (Income statement) was presented in a comparative basis. • Purchase Power (operating expenses) had a 3 million dollar increase from the prior year. o This increase Is primarily due to the Department making a concerted effort to increase their energy buying portfolio to contain more non -carbon sources (wind, hydro, etc.). o The price of non -carbon resources is more expensive than carbon resources. Page 13 o The Increase in purchase power expenses was offset by pass-through charges to the rate payers (see below: electric sales, net of discounts). • Electric sales, net of discounts, had a one million dollar Increase from the prior year. o Operating expenses increased for purchase power but were partially offset by the Increase that was passed through to the rate payers. • Operation expenses saw a decrease of approximately 2.3 million dollars from the prior year. o This decrease was primarily due to the decrease in the OPEB liability as referenced on page 12. o The offset to the decrease In the OPEB liability is shown in the "operating" line. o Zach noted that if the OPEB adjustment was factored out, the operating expenses would have been the same from CY20 to CY21. o The one time change In benefit terms for the OPEB liability impacted RMLD's income statement by decrease those operating expenses. • The change in net position (essentially RMLD's net income) was $2,697,994. o The Department of Public Utilities (DPU) has an eight percent limit on net income; not exceed 8% of plant. c Melanson calculated net income for CY21 at 4.26 rate of return, which Is well below the 8% limit. Recommendations • In addition to proving out he balances in RMLD's financial statements, Melanson reviews the Department's internal controls to ensure that there are good internal controls in place and the Department's assets are being appropriately safeguarded. • If Melanson were to identify any areas of improvement, they would recommend that in a formal management letter, which the RMLD has not received In ten years. • Approximately only 10% of Melanson clients do not receive a management letter, putting RMLD In a good place. • Zack thanked the RMLD staff and General Manager for the timely responses and efficient work as well as the condition of RMLD records. • Vice Chair Pacino asked a question regarding the new Lease Standard that will be effective next year, which came up in the Audit Committee meeting (Board Packet, Page 46). o The new pronouncements page was included in reference to the Governmental Accounting Standard Board (GASB) issuance of Statement No. 87 Leases which must be implemented by the Department next year. o GASB no. 87 applies to situations where RMLD Is both the lessee and lessor. Page 14 o Melanson will be involved in helping RMLD implement this as it is going to be a large impact to both the liabilities and assets for CY22 year-end balance sheet. • Commissioner Coulter asked a question on the rate of return percent. o Wendy Markiewicz responded that per the DPU municipalities cannot make more than 8% gross; RMID specifically cannot make more than 8% net. o Wendy noted that RMLD is currently at 6.7%, which is the targeted rate of return when the budget is delivered annually. o Zach stated that the DPU does not specify in their regulations if whether it should be gross or net; the regulations only say plant. o The DPU was unable to provide clarification around this but did state that most light departments use gross. The RMLD however, uses net. o Vice Chair Pacino noted that gross verses net should be a future agenda item. o Coleen O'Brien, General Manager (GM), noted that some MLPs go 4% of gross and 8% of net; RMLD could do a study around this. •. Commissioner Talbot asked a question regarding Melanson's experience and how the auditor is determined. o Six — seven light Departments in the Commonwealth and does about 30 governmental audits a year. o Like RMLD, Melanson audits the same entities annually. o The process by which Melanson Is appointed varles from community to community. o Vice Chair Pacino noted that for RMLD, there is an agreement with the Town where it is determined by the Town of Reading Audit Committee in a joint contract with the Town. 4, Report of the Audit Committee Vice Chair Pacino provided a report from the Audit Committee meeting. • The Audit Committee unanimously voted to recommend to the Board of Commissioners that they accept the audit as presented and dates May 23, 2022, The RMLD Sub -Audit Committee (Vice Chair Pacino and Commissioner Coulter) made the same recommendation. Vice Chair Pacino made a motion, seconded by Commissioner Stempeck, that the Board of Commissioners accept the 2021 Audit Report from Melanson, fiscal year ended December 31, 2021, as premmed, on the recommendation of the Town of Reading Audit Committee and the RMLD Sub -Audit Committee. Motion Carried: 5:0:0 (5 In favor) 5, Approval of Board of Commissioner Meeting Minutes Materials: RMLD Board Packet (Attachment 2) Approval of Board Minutes Page 1 5 . The meeting minutes were approved as presented. Vice Chair Pacino made a motion, seconded by Commissioner Coulter, that the Board of Commissioners approve the meeting minutes of the February 24, 2022, meeting on the recornmendation of the General Manager. Motion Carried: 5:0:0 (5 in favor) 6. Approval of Citizen=s' Advisory Board Minutes Materials: RMLD Board Packet (Attachment 3) Approval of CAB Minutes • Dennis Kelley made a motion, seconded by Chair Small, that the Citizens' Advisory Board approve the minutes of the December 20, 2021, meeting as written. Motion carried: 2:2:1 (2 in favor, 2 abstained, 1 absent) George Hooper and Ken Welter abstained as they were not present during the December 20, 2021, meeting. • George Hooper made a motion, seconded by Dennis Kelley, that the Citizens' Advisory Board approve the Executive Session minutes of the January 20, 2022, meeting as written. Motion carried: 3:1:1 (3 in favor, 1 abstained, 1 absent) Vivek Soni was absent from the meeting. Ken Welter abstained as he was not present for the January 20, 2022, meeting. • George Hooper made a motion, seconded by Ken Welter, that the Citizens' Advisory Board approve the Executive Session minutes of the April 4, 2022, meeting as written. Motion carried: 4:0:1 (4 in favor, 0 abstained, 1 absent) Vivek Soni was absent from the meeting. 7. Release of Executive SesrJm Minutes 2013 - 2016 • Vice Chair Pacino stated that the review to release the Executive Session minutes from 2013-2015 has been completed. • The review of the 2016 Executive Session minutes is scheduled to take place at a future meeting. • Vice Chair Pacino is recommending that the February 27, 2013, September 17, 2014, and February 26, 2015, Executive Session minutes be released. • At this time, these are the only minutes being recommended for release, as some of these issues are still going on at the present. 8. Hydro Power Supply Extension Materials: RMLD Board Packet (Attachment 4) Hydro Power Supply Extension • Gregory Phipps, Director of Integrated Resources, presented an extension on an existing power supply opportunity, a small hydro facility in eastern Connecticut, know as Wyre Wynd. e The original contract is a ten-year agreement signed in June of 2012. • The facility Is old; originally powering a textile mill on the river. Page 16 • Currently, the facility Is generating power and in the process of FERC relicensing. • If the facility does not respond back to FERC, it receives an automatic one-year extension of the existing license. • The current proposal states that the RMLD will not do anything until the FERC license Is finalized in terms of a new long-term contract. • The term is "up to 36 months" with the intention to give the owner (Gravity) additional time, however, it will likely be a 12 -month extension. • No environmental Justice review will take place until the RMLD is ready for a long-term contract. • Chair Bita asked a question relative to the asset not having CT Class 1 certificates ten years ago. o Gregory discussed the process of acquiring certificates and noted that Gravity took that responsibility In 2016. o Ten years ago, certificates were not a priority; RMLD can investigate the exact history prior to 2016. o Currently, the facility is registered as a Connecticut Class 1 asset; RMLD does not currently buy those certificates, so those are sold on the open market. o When RMLD does the long-term contract, the Department will buy the certificates associated with the energy. • Ken asked a question relative to whether the cost Increase for energy tracks the cost increase for carbon sources or an Increase in demand for clean energy. a Gregory responded that in this case, 10% is modest in terms of pricing on the open market but there is a tremendous amount of upward pressure which will continue for the next 12-24 months. o Gregory referenced a chart relative to the different classes and certificate sales that can be shared. • Commissioner Coulter asked a question relative to where the site is located (economic development area). o Gregory responded that the FERC approval has been Issued and what the site does not have is a fish ladder. o One issue is that it will take around a decade to put the Fish ladder in place. In the meantime, they will implement trucking fish up and downstream. o To the best of RMLD's understanding there are no Issues associated with the site. However, as the due diligence has not been performed yet, the Department cannot say for sure. o One point that was addressed was the fact that the price was higher than antiapated; this is due to the construction of the fish ladder. Page 17 • Commissioner Stempeck asked a question relative to the age of equipment and potential failure. o Gregory responded that almost all the hydro facilities are unit contingent; RMLD buys whatever Is produced, but Gravity has a track record of high quality maintenance of equipment. o Gregory noted that this agreement is low risk for RMLD. • George Hooper made a motion, seconded by Dennis Kelley, that the Citizens' Advisory Board recommend that the Board of Commissioners vote to accept the General Manager's recommendation to extend the existing power supply contract for the Aspinook Wyre Wynd hydro facility for up to 36 months, commencing June 2022. Motion carried: 4:0:1 (4 in favor, 0 abstained, 1 absent) Vivek Soni was absent from the meeting. Vice Chair Pacino made a motion, seconded by Commissioner Coulter, that the Board of Commissioners, on the recommendation of the Citizens' Advisory Board, vote to accept the General Manager's recommendation to extend the existing power supply contract for the Aspinook Wyre Wynd hydro facility for up to 36 months, commencing June 2022. Motion Carried: 5:0:0 (5 in favor) 9. RMLD Procurement ReoLeetS Reouirinc Board Amami i IFB 2022-18 Electric Utility Excavation Services • Hamid Jaffari, Director of Engineering and Operations, presented IFB 2022-18, which is a three-year contract for excavation of both emergency and non- emergency related matters; Hamid cited the examples of repairing underground duct banks, manholes enclosures, and manholes structures. • Hamid noted that the Included analysis Is Inclusive of labor only. • George asked a question relative to the considerable difference in cost, and whether this was examined. o Hamid responded with information related to the monetary range and procurement laws; and commented that he calls to check on costs. • It was noted that Zanelli has been used for eight plus years. • Vice Chair Pacino asked a question relative to fixed materials costs. o Hamid responded that there is no fixed mark up; payments are determined by whatever the cost of the material is. • Vice Chair Pacino asked a question relative to prevailing wage. o Hamid responded that this job is subject to prevailing wage; all included labor rates are prevailing wages. . Vice Chair Pacino made a motion, seconded by Chair Bita, that bid 2022-18 Electrical Utility Excavation Services for hourly rates be awarded to Tim Zanelll Excavating, LLC, pursuant to M.G.L., c. 30 4 39M, as the lowest responsible and eligible bidder, on the recommendation of the General Manager. The contract Is for a one-year term with the option for RMLD to renew the contract for a maximum of two one-year renewal terms. Motion carried: 5:0:0 (5 in favor) Page 18 • At 8:15 PM it was reported that Zoom participants were having audio trouble, which was resolved. 10.GM Coleen O'Brien, General Manager, provided the General Managers report. Community Update • The High School Art Contest Awards night was held on May 12th by Zoom; Commissioner Coulter and Vice Chair Pacino presented the virtual awards. • The annual Bike Swap, hosted by the Reading Climate Action Committee, was held at RMLD on May 3, 2022. • The CY21 Annual Report is in process and is targeted to be published in June after final review and approvals; winning artwork will be featured on the cover.; • RMLD will be participating in most of the traditional summer events this year, such as the Wilmington Farmers Market. • EV chargers are being installed this week and next week in Reading and Wilmington. The GM provided general Information on the associated grants and noted a potential photo opportunity. • George asked if there is an anticipated date on when the next EV chargers will be installed. o The GM responded with information relative to the EV charger construction and site selection process. o It was noted that Jason and Ken would follow up on site selections in North Reading and Lynnfield. •. Commissioner Talbot asked a question relative to why certain sites are chosen; specifically, the level 3 charger at the library. o The GM responded that the library was the only location with the voltage available. Commissioner Talbot asked a follow up question on the ability to adjust locations, as level 3 chargers are most beneficial near highways. o The GM responded that placing level 3 chargers near highways was part of the grant; however, the sites proposed by the Town and the associated voltage did not allow for that. o Gregory provided additional information on the grant limitations and cited examples of how the level 3 chargers can work well at the library. Policy 13: Facilities — RMLD Property Use The current Facilities Use policy allows for use of the AV room, cafeteria, and non-restrictive land area for municipal meetings. • The AV room will be undergoing AV technology upgrades (subject to supply chain Issues) which would help facilitate outside meetings. P.,19 • The GM discussed the issues around staffing in relation to outside use of RMLD facilities. Limited staffing and lack of custodians would have to be considered. • Commissioner Stempeck asked if RMLD would charge a fee for the use of facilities. o The GM responded that this could help with supporting outside use, however RMLD is not supposed to go beyond the electric business. a The GM cited the use of bottom-line funds for the "adopt an island" program. • Commissioner Coulter noted that the technology upgrades in the AV Room are crucial, as most groups who use the space will display something. • Commissioner Talbot clarified that municipal entities of all four towns have always been able to use these spaces and asked how frequently this occurred prior to Covid. o The GM responded that this did not occur often and cited the example of RAD training in the cafeteria. • The BOC and CAB discussed solutions for use of RMLD space, Including but not limited to, the Town leasing the space, the room reservation process, the availability of facilities during the day verses night, and staff overtime. • Discussion ensued on the logistics of outside facility use. George cited examples of logistical areas that need to be considered such as; IT logistics, current staff use, isolation, locksmiths, and custodial staff. • Dennis noted that parking logistics needs to be considered. • It was decided that the GM would consult with the Senior Management team and follow up with a memo. • It was determined that the RMLD and Town of Reading should meet to discuss possible solutlons for the use of RMLD facilities. Economic Development Meeting • On Monday May 160, 2022, a joint meeting between the RMLD Board of Commissioners and Town of Reading Select Board was held. • Chair Site, Vice Chair Pacino and Commissioner Coulter attended the meeting. • The RMLD took the following action Items: provide a preliminary overview of space use; arrange an informal meeting with Barbas Trucking; and provide a discussion of the RMLD Facilities Use policy. • It was decided that Commissioner Coulter would be the BOC representative at the Economic Development meetings. ENE Board Meetings • The next ENE Board meeting is tentatively scheduled for June SO, 2022 • Agendas are usually circulated 48 hours prior the meeting. 11. Report from the May MEAM Manager's Meeting Page 1 10 Chair Bits and the GM provided a report on the May MEAM meeting. • Chair Bits noted that Steve Doucette spoke on the importance of terms and Conditions being written perfectly and cited the example of a situation that occurred relative to RMLD's terms which are extremely well written. • The GM said that RMLD's terms and conditions have been changed twice since she has been with the Department and are reviewed annually. • The GM cited the example of the training video on RMLD's website relative to what RMLD is responsible for, verses what the homeowner is responsible for. r Chair Bita said that John Fitch, the GM of West Boylston developed a spreadsheet for reporting for the zero climate law goals. o The GM noted that the MLPs are working together to develop a uniform reporting mechanism. • The GM noted the other topics that were discussed at the meeting, Including but not limited to; time of use rates, tariffed bill financing (lien), and air source heat pumps. • The GM asked Representative Jeff Roy from the Telecommunications, Utilities, and Energy (TUE) committee a question relative to funding for the North Shore Concert Consortium EV chargers. • The GM noted that Representative Roy spoke about offshore wind. • During the MEAM legislative update reliability Insurance related to mutual aid was discussed. 12. Schedulina • The next BOC meeting Is scheduled for June 23, 2022. • It was noted that If something educational or a common interest was on both the CAB and BoC agendas, then the meeting can be held jointly. Otherwise, the CAB will meet prior to the BoC. • It was decided that future BOC meetings would occur at 7:30 PM on the third Thursday of the month. • The BGC reviewed the Warrant Schedule as outlined on the meeting agenda. 13.Od ' mmenl Chair Small (Citizen•' Advisoro Board) • George Hooper made a motion, seconded by Dennis Kelly, that the Citizens' Advisory Board adjourn regular session. Motion Carried: 4:0:1 (4in favor, 0 abstained, 1 absent) Vivek Soni was absent from the meeting. 14. ExecdtIVe Session Vice Chair Pacino, made a motion, seconded by Chair Bita, that the Board of Commissioners go Into Executive Session pursuant to Massachusetts G.L. c.164 section 47D, exemption from public records and open meeting requirements in certain instances, to conduct strategy sessions In preparation for negotiations with nonunion personnel or to conduct collective bargaining sessions or contract negotiations with nonunion personnel and to consider the purchase, exchange, lease or value of real property if the chair declares that an open meeting may have a detrimental effect on the Page 1 11 negotiating position of the public body; and return to regular session, for the sole purpose of adjournment. Motion Carried: 5:0:0 (S in favor) 15.Adiournment Vice Chair Pacino made a motion, seconded by Commissioner Stempeck, that the Board of Commissioners adjourn regular session. Motion Carried: 5:0:0 (S in favor) Regular Session adjourned at 10:20 PM. A true copy of the RMLD Board of Commissioners minutes As approved by a majority the Commission. - rml vnwr , m.,i ron,, :, Philip B. Pacino, Secretary Pro Tem RMLD Board of Commissioners Pave 1 12