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HomeMy WebLinkAbout2007-05-23 RMLD Capital Operating Pension and Auditing Subcommittee MinutesReading Municipal Light Department Board of Commissioners= 1_ ? j Capital, Operating, Pension and Audit Sub Committee # \ Ai y C LE R May 23, 2007 tv)!NG, MASS- Start Time of Regular Session: 7:30 p.m. 21 P 3' w End Time of Regular Session: 9:52 p.m. Attendees: Sub Committee Members: Messrs. Hahn, and Pacino, Ms. O'Neill, Commissioners: Ms. Kearns and Mr. Soli RMLD Staff: Messrs. Cameron, Dion, Fournier, Mses. Parenteau and Antonio Chairman Hahn called the meeting to order at 7:30 p.m. Mr. Cameron started the meeting by stating that he and Staff are hereto present the Operating Budget to the Sub Committee. The Sub Committee has had the budget and has asked for information concerning the budget. He stated that he received questions from Mr. Hahn and Ms. O'Neill just this morning, the answers have been assembled and Bob Fournier will give these out the Sub Committee as well as others present. Hopefully, this information will answer the questions the Sub Committee had relative to labor costs and other operating costs. Mr. Fournier started out by stating that he had assembled information requested by Mr. Hahn and Ms. O'Neill. Mr. Fournier explained that the Operating Expense Summary, which is a one-page analysis of the major components of the Operating Budget for the RMLD. He then went on to explain the expense budget summary, which is a three-page analysis of the total labor and operating expenses, which are rolled up on the last page to show the incremental percentage increases of the different portions of the operating budget. Mr. Pacino asked about the process of capitalizing labor and how it was determined. Mr. Fournier explained the capitalized labor determination in the budget process. Mr. Hahn then explained why he had asked the Department for the labor analysis, in order that the Sub Committee could see the effect of the total labor on the overall budget. Mr. Hahn went onto to say that it would be the last time he would interfere in the operations of the Department. Ms. O'Neill asked about the difference in the 2007 and 2008 Engineering and Operations Budget. Mr. Hahn pointed out that the capitalized labor from the Capital Budget has now being added to the budgeted operating labor therefore a total labor cost is shown for 2007 and 2008. Ms. Kearns asked about the overtime estimates and why were they so much higher than they were in 2007? Mr. Fournier explained that the RMLD was over budget on the overtime estimates in the 2007 budget therefore the 2008 overtime estimate was increased. He also pointed out that the RMLD would not spend this money if it were not necessary. Mr. Dion then described some of the work that is done on overtime on Saturday or Sundays during the year. Mr. Cameron added that Halpin Line Construction crews have not been at the RMLD since the first of May, however, management has had the Line Department crews working on Saturdays due to business reasons, not because the underground contractor is on the system. Mr. Cameron explained that he sent a letter to the LMS Union informing them of this change. i Capital, Operating, Pension and Audit Sub Committee Minutes 3 May 23, 2007 Ms. Kearns said that the Department should find one vendor to do all the work. Mr. Donahoe replied that if, for instance Stoneham Ford was chosen to do all the work the increased cost could be 30% to50%. He did say that he bid the Preventative Maintenance to one vendor but the problems that occur from time to time are different. Ms. Kearns said that she is concerned that the Bad Debt Expense is not high enough and that the economy may force an increase in the bad debt expense. Mr. Soli left the meeting at this point. Mr. Pacino asked if it is necessary to have the budget is done in a monthly format? He would be satisfied in seeing the same level of detail for 2008 compared to 2007. Mr. Cameron replied that although the Board may not want the budget in a monthly format, it is necessary to develop it this way so that the monthly financial statements can include actual versus budget. He stated that if the Board wants an annual number next year the Department could do that. Ms. Kearns mentioned that Mr. Cameron would not be available for the June 27 meeting because of a prior commitment. She went onto say that if the Sub Committee did not come up with a recommendation tonight then the Sub Committee would have to meet again to make a recommendation for the June meeting. Mr. Cameron would like to be at the meeting. Mr. Pacino stated that is ready to make a motion on both the Capital and Operating Budgets. Ms. O'Neill said that there is a lot of information to look at and she doesn't think she is ready for a vote. Mr. Hahn said that he doesn't want to pressure anyone into a motion if they didn't feel comfortable voting on these budgets. He also said that he wants to see a financing plan within three to four weeks whether there is vote on the budgets tonight or not. Ms. O'Neill said she would liked to have been in budget discussions earlier in the year. It seems like there is not enough time to examine the budget. She would like a commitment for earlier involvement in the budget between the Board and the Department. Mr. Pacino made a motion seconded by Ms. O'Neill to recommend to 2008 Operating Budget as presented to the Capital and Operating Budget Sub Committee, to the RMLD Board of Commissioners. Motion passed 2:0:1. Ms. O'Neill abstained. Mr. Pacino made a motion seconded by Mr. Hahn to recommend to 2008 Capital Budget as presented to the Capital and Operating Budget Sub Committee, to the RMLD Board of Commissioners. Motion passed 2:0:1. Ms. O'Neill abstained. Motion to Adjourn At 9:52 a.m. Mr. Pacino made a motion seconded by Mr. O'Neill to adjourn the Regular Session. Motion carried by show of hands 3:0:0.