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HomeMy WebLinkAbout2006-05-01 RMLD Operating and Capital Budget Subcommittee MinutesRECEIVED Reading Municipal light Department (RMLD) Board of Commis' QA CLERK Operating and Capital Budget Subcommittee Minutes ' iG, Mass 8:00 a.m. General Manager's Conference Room EL!61 NAR 20 P s 02, D ate: Monday, May 1, 2006 Time: 8:00 a.m. Place: General Manager's Conference Room Attendees: Richard Hahn, RMLD Commissioner, Subcommittee Member Mary Ellen O'Neill, RMLD Commissioner, Subcommittee Member Vincent Cameron, General Manager Ellen Kearns, Vice Chair, RMLD Board of Commissioners Robert Soli, Secretary, RMLD Board of Commissioners Pete Dion, E&O Manager Mark Uvanni, MIS Manager Joseph Donahoe, Facilities Manager Paula O'Leary, Operational Assistant To discuss Fiscal Year 2007 Operating and Capital Budgets. Regular business of the Operating and Capital Budget Subcommittee. Ms. O'Neill discussed the Quarterly Capital Budget Variance Report. Her concern was that Routine Construction was overbudget by $900,000. Mr. Cameron explained that Routine Construction includes capital work that in not included in a specific project. He noted that some of the specific projects have not been completed, but additional routine construction has been completed. He stated the work depends on priority. Ms. O'Leary stated that it could also be the mix between capital and expense in that more capital work may have been done. Ms. Kearns asked what is a Force Account? Mr. Cameron explained it is a project that is reimbursed by the State. Ms. O'Neill stated she felt that any significant changes in the budget should be discussed by the Board. Mr. Cameron stated that the budget is not a line item budget and that overall the FY06 Capital Budget is underbudget. Mr. Dion explained the following projects: Project 3C - Ms. Kearns asked if the total was mostly labor? Mr. Cameron stated the breakout of labor and material is on the next page. Project 3D - Ms. O'Neill asked what the difference was between 13kV and 15kV? Mr. Dion explained that 15kV is the voltage class that 13kV feeders would be included in. Project 4C - No comments. Project 5D - Ms. Kearns asked where the Wildwood Station is, is it needed, and would this project be a waste of money if the station is no longer needed in the future? Mr. Dion explained the location of the station, stated it is still needed, and that he'll be looking at it over the next five years. He said this is small money to keep the station more reliable. 1 Project 12 - Mr. Dion explained the issues the Department is having with lead-time on obtaining transformers due to the recent hurricanes in the south and ice storms in the Midwest. He stated the Department is looking into reconditioned transformers in case they are needed during the summer months. Ms. O'Neill stated that the budget was already overbudget this year. Mr. Dion explained that there was some overlap between the change to the new fiscal year, when they were ordered, and when they arrived. He stated the Department intends to order earlier this year. Mr. Hahn commented that the Department does earn money on the capital improvements, and noted there is a return on the investment. Mr. Soli asked what guarantees there would be that the reconditioned units did not contain PCBs? Mr. Dion stated that would be a requirement of the bid. Ms. Kearns asked about comparing a new transformer to a reconditioned transformer. Mr. Dion stated a new transformer should last at least 10 years, however, they are probably guaranteed for three to five years. He said the reconditioned units are guaranteed for three years. Mr. Hahn commented that there are many transformers that are more than 10 years old in service. Mr. Donahoe explained the following projects: Project 15 - He stated that the Reading water had done damage to the water heater, and it needs to be replaced. Mr. Soli noted that as of today, the town will be part of the MWRA water system. Project 16 - Mr. Donahoe stated he would be looking at a different style-cooling tower possibly plastic. Ms. Kearns asked what this project may do to the AccuAire invoices? Mr. Donahoe replied that although he received a budget quote from AccuAire, he will be seeking other quotes. He noted, however, that the cooling tower is not the chillers, which AccuAire does service at the present time. Mr. Dion continued on the following projects: Project 17-No comments. Project 18 - Mr. Soli asked if there are any delivery problems with the meters. Mr. Dion stated at the present time there are not. He said there is more of an issue with obtaining the raw materials. Mr. Uvanni explained the following projects: Project 19A - Ms. O'Neill asked why this project was so underspent this year? Mr. Uvanni stated is difficult to tell what hardware may be needed year-to-year. Ms. Kearns asked why not buy five Dell monitors at once instead of one at a time? Mr. Uvanni replied that the monitors are bought from the government list, and buying in bulk would not save that much money. Mr. Soli asked if the new version of Microsoft will be purchased? Mr. Uvanni responded that he saw no compelling reason to purchase it. 3 Ms. O'Neill thinks the Board should be informed of changes. She asked about the timeframe for approving the budgets? Mr. Cameron stated the budgets have to be approved by June 30. The Board is meeting on May 17. Mr. Soli reported that the CAB made basically no changes, however, one CAB member thought the budget should not be used for a Cost-of-Service Study because he thought a couple of items, (insurance and the warehousing study) were a little squishy. Mr. Hahn thought a subcommittee meeting on the operating budget should be held before the May 17th Board Meeting. Ms. O'Neill wanted to wait to recommend the Capital Budget at the same time as the Operating Budget. Mr. Hahn had submitted some questions to Mr. Cameron on the Operating Budget. Ms. O'Neill asked for a copy. Mr. Cameron stated he would send both the questions and the answers to Ms. O'Neill. Meeting adjourned at 9:36 A.M. Respectfully submitted, - Paula O'Leary i Operational Assistant 5