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HomeMy WebLinkAbout2007-06-27 RMLD Board of Commissioners MinutesL11 Reading Municipal Light Board of Commissioners Regular Session RECEIVED 230 Ash Street Reading, MA 01867 TOWN CLEDING, MASS RK 27, 2007 Start Time of Regular Session: 7:30 p.m. End Time of Regular Session: 10:30 p.m. Attendees: Commissioners: Ellen Kearns, Chair Mary Ellen O'Neill, Secretary Robert Soli, Commissioner Richard Hahn, Vice Chair Philip Pacino, Commissioner 2001 JUL 2 b P 4: 11 4 Staff: Pete Dion, Engineering & Operations Manager Beth-Ellen Antonio, Human Resources Manager Joseph Bilicki, Key Accounts Manager, Commercial Jeanne Foti, Executive Assistant Robert Fournier, Accounting/Business Manager Patricia Mellino, Operational Assistant Craig Owen, Materials Manager Bill Seldon, Senior Energy Analyst Citizens' Advisory Board: Roger Lessard, Chair Opening Remarks Chair Kearns thanked the Board for their attendance at the subcommittee meetings this month. Introductions Chair Kearns introduced Citizens' Advisory Board, Chair, Roger Lessard. Chair Kearns asked for Selectmen Liaison and Customer comments, there were none. Approval of Minutes for May 30, 2007, Board Meeting Ms. O'Neill made a motion seconded by Mr. Hahn that the Board approve the Regular Session meeting minutes of May 30, 2007 with the amendments presented by Mr. Soli. Motion carried 5:0:0. Financial Reports Mr. Fournier said that he will use a new report format and there are five areas that will be addressed: Change in Net Assets, Revenues, Expenses, Cash and general comments. Mr. Fournier reported for the month of May there was a negative change in net assets or net loss of $491,000 of which $581,000 is due to the fuel expense being more than the fuel revenue. The year to date change in net assets for the first eleven months of FY2007 show a net income of $1.9 million. For this same period, fuel revenue has exceeded fuel expense by $295,000. Base revenues are slightly under budget with residential revenues coming in higher and commercials coming in lower than budgeted. Compared to last year's actuals, base revenue is 1.1 Purchase power base costs are 3.5% under budget due to transmissions costs coming in lower than budgeted. Operating expenses are almost 11 % under budget; maintenance expenses are under budget by 20%. All five departmental budgets are under budget for the eleven-month period. The Operating Fund is strong at $12.5 million; capital funds are at $2.7 million; and the Rate Stabilization Fund is slightly over the threshold set by the Board. The remaining Calpine monies of $11.3 million will be used by October; however, the interest earned on these funds will be applied to November. The Deferred Fuel Reserve Fund is at $3.5 million, a decrease of $581,000 as mentioned earlier. Mr. Fournier also reported that the position of Operational Assistant for Facilities has been filled and two positions, that of Engineering Project Manager and Line Apprentice, are unfilled. Mr. Fournier informed the Board that the physical inventory has been completed and that Craig Owen, Materials Manager, had done a great job organizing the physical inventory. The auditors will be in Tuesday, August 7. Ms. O'Neill asked Mr. Fournier relative to the 8% number to the return on investment? In response to questions from Ms. O'Neill about the allowed 8% return, Mr. Fournier replied that typically preliminary numbers are not available until the third or fourth week of July. He also said that this year when the firm numbers from the auditors are obtained, they will come back to the subcommittee, which will determine whether the 8% should be made. Regular Session Meeting Minutes 2 June 27, 2007 Financial Reports Mr. Soli noted and Mr. Fournier confirmed that the change in net assets figure indicates the Department is running $868,000' ahead of the budget: Chair Kearns stated that she likes the format Mr. Fournier used to present the financial report and would like it in a written format in the future. Reports from RMLD Board Subcommittees General Manager Subcommittee Mr. Hahn reported that the Subcommittee met and discussed the General Manager's Performance Plan. Mr. Hahn said that an additional performance goal that involves implementing the recommendations of the security audit was added and another was deleted to balance this out. Mr. Hahn said that the new set of goals is available. Mr. Hahn said that at the request of Ms. O'Neill, they considered adding a goal pertaining to strategic planning. However, the subcommittee did not know enough about the strategic planning process and it was not far enough along in order to make it a goal this year. Mr. Hahn said that the General Manager has been informed that once the strategic plan is ready it will be added to his goals. Mr. Hahn reported that the General Manager's contract runs from February 7 to February 6 and that a six-month notice period is required if the contract is not to be extended. Even though it was not quite six months, the subcommittee felt it wanted to extend the General Manager's contract for one year. A motion and vote was made at the subcommittee to recommend to the RMLD Board that it extend the General Manager's contract until February 6, 2009. The motion passed 2:0. Mr. Hahn made a motion seconded by Mr. Soli that the Reading Municipal Light Board extend the General Manager's contract for one year until February 6, 2009. Motion carried 5:0:0. In response to a question from Ms. O'Neill with regard to the exact wording of the new performance goal, Mr. Hahn said that while he did not remember the exact wording, the spirit of the goal is to implement the recommendations of the security audit. Mr. Dion stated that he had spoken to the General Manager and that he intends to give an update in executive session at the next Board meeting. Power Contracts, Rate Setting, Customer Choice Mr. Hahn stated that the subcommittee met and the Energy Services Division gave them presentations on two renewable projects that may be available. While no vote was taken at the meeting, information on these projects and potential costs associated with green power were discussed. Policy Subcommittee Chair Kearns stated that the subcommittee discussed changes and are making recommendations for revisions to three policies at this time. Policy 9 - Procurement Policy Mr. Soli stated that the revisions recommended to the procurement policy kept the RMLD compliant with Massachusetts General Law Chapter 30B as required by the Reading Home Rule Charter. In the past, Mr. Soli said, the RMLD policy was more restrictive than required by law. Mr. Owen explained to the Board that under the revised policy, the threshold for written quotations would increase from $500 to $1,000; quotes for projects estimated to cost between $5,000 and $24,999 would follow the 30B guidelines as would bids for projects estimated to cost $25,000 and over; and the open account process would be eliminated. The policy spells out a code of conduct and proper relationships with vendors. Mr. Pacino said that the policy says there is a zero tolerance for gifts with vendors that is more restrictive than the state law that sets a $50 threshold. Chair Kearns replied that the RMLD is going to continue with the zero tolerance standard. Mr. Soli made a motion seconded by Chair Kearns that the RMLD Board of Commissioners accept Revision 3 to the Police 9, Procurement Policy. Motion carried 4:1:0. Mr. Pacino voted against this motion. Regular Session Meeting Minutes June 27, 2007 Reports from RMLD Board Subcommittees Policy 19 - Board of Commissioners Mr. Soli reported that the basic change is specifying the number of people that can be on a subcommittee. Mr. Soli stated that several subcommittees were collapsed into a larger subcommittee, which will consist of three members, and the policy has been changed to reflect this. The role of subcommittees to make recommendations to the Board, unless otherwise given a special charter by the Board, is already spelled out in the policy. Some grammatical changes were made in the policy. Mr. Soli commented that the subcommittee determined that the recommended changes are not substantive enough to warrant advertisement to the public as provided for in the policy. The status of the Green Power and Strategic Planning Subcommittees were discussed briefly. Ms. O'Neill asked that the word "the" be placed in front of Commission section D. Mr. Soli made a motion seconded by Mr. Hahn that the RMLD Board of Commissioners accept Revision 11 to Policy 19, the Board of Commissioners Policy with the change presented by Ms. O'Neill. Motion carried 5:0:0. Policy 23 - Dress Standards Mr. Soli reported that the term "division manager" was changed to "senior manager" to reflect current terminology; the description of clothing by gender was eliminated and replaced by "appropriate business attire;" and reference to flame retardant clothing was included as this is now required by the department for certain positions. Chair Kearns said that Mr. Cameron has occasionally designated Fridays as casual days and wanted language in the policy in order to accommodate that. Ms. O'Neill presented some grammatical changes and recommended spelling out the acronym FR. Mr. Soli made a motion seconded by Mr. Pacino that the RMLD Board of Commissioners accept Revision 1 to Policy 23 Dress Standards with the changes presented by Ms. O'Neill. Motion carried 5:0:0. Green Power Subcommittee Ms. O'Neill said that the subcommittee discussed the Russell Biomass project, a renewable project being developed in western Massachusetts. Ms. O'Neill stated that the subcommittee recommended that the Department send a non-binding letter of intent to the developers of that project expressing interest in five megawatts or 10% of the project and its associated renewable energy certificates. Ms. O'Neill said that the Mr. Hahn had developed an excellent mission statement that will be discussed at their next meeting, along with another proposed renewable project. Strategic Planning Subcommittee Chair Kearns reported that the subcommittee met and looked at a proposed invitation to bid for a ten-year strategic plan. Chair Kearns stated that the purpose for the invitation to bid is to seek a proposal from a consultant to lead the RMLD through the development of this plan. The consultant will hold meetings with the Board of Commissioners, General Manager, Citizens' Advisory Board and staff to outline the RMLD's quality level of operations and have interactive discussions on future goals. Chair Kearns stated that the final proposal will be ready to send out in early July and she hoped the RMLD could select the consultant in August. It is anticipated that the consultant will start the beginning of September and have a draft plan by January 2008. Chair Kearns informed the Board that they would be asked to attend one four hour session one Saturday and one two hour evening session. On another matter, Mr. Pacino said that Bill Wallace, Manager at Wakefield Gas & Light, was retiring after forty-three years of service and that he was instrumental in the General Manager search for the RMLD. Mr. Pacino asked that the RMLD extend its congratulations. Mr. Dion said that the Department will send a letter to him expressing its thanks and congratulations. M. G. L. c. 30B Bids Three Phase Pad Mounted Dead Front Loop Transformers - IFB 2007-27 Mr. Dion said that the first two bids are for three phase pad mounted transformers. Mr. Dion said they decided to go out to bid earlier because prior bids bore out excessive lead-time. Mr. Dion said that the three phase pad mounted transformers are to replenish stock. Mr. Dion explained that these are used for underground residential and commercial customers. Mr. Soli questioned the cost including charges to make units meet specifications. Regular Session Meeting Minutes June 27, 2007 4 M. G. L. c. 30B Bids Three Phase Pad Mounted Dead Front Loop Transformers - IFB 2007-27 - Mr. Dion replied that there were minor changes in the shipping and that he will get back to the Board on this next month. The differential of $68,645.15 versus $71,095.15 needs to be clarified. Ms. O'Neill made a motion seconded by Mr. Soli that 2007-27 for Three Phase Pad Mounted Dead Front Loop Feed Transformers be awarded to HD Supply Utilities for a total cost of $114,372.58 as the lowest qualified bidder on the recommendation of the General Manager. There were additional questions on the bid. Mr. Pacino made a motion seconded by Mr. Soli to table the motion until the next meeting. Motion carried 5:0:0. Three Phase Pad Mounted Transformers - IFB 2007-26 Mr. Dion explained that an addendum was e-mailed out on Monday, which shows total life cycle costs. Mr. Dion commented that two other vendors may appear to be lower, however, it is spelled out in the specifications that the Department uses total life cycle cost analysis and transformer efficiencies in the bid process. Mr. Pacino noted that the bid was over the amount budgeted for this item and wanted to know where the additional funds were going to come from. Mr. Dion replied that some of the transformers are for specified projects for which the Department will be reimbursed and some adjustments will need to be made to the capital budget for the remainder. Mr. Dion said that the transformer calculation was based on last year's numbers with some cushion; however, prices came in significantly higher than projected. Mr. Dion explained that the copper prices have been higher than forecasted three months ago when the budget was prepared. Chair Kearns said that the Board wants updates from Mr. Dion when there are cuts in the budget to account for the overbid. Mr. Dion replied that it is something that they will monitor and keep the Board informed. Ms. O'Neill made a motion seconded by Mr. Hahn Move that bid 2007-26 for Three Phase Pad Mounted Transformers be awarded to WESCO for a total cost of $121,901.00 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 5:0:0. Single Phase Pad Mounted Transformers - IFB 2007-25 Mr. Dion explained that in the last bid they did not go out for single phase pad mounted transformers bid and that these are to replace stock. Mr. Dion said that life cycle cost analysis was performed on these transformers. In response to an observation by Mr. Soli, Mr. Dion explained that all bidders took exception to the liquidated damages provision. Mr. Dion said that the Department had added this provision to protect itself from lengthy lead times that have occurred in the past. Chair Kearns suggested lowering the amount of the liquidated damages. Mr. Dion said that he will look into modifying the liquidated damages amounts for upcoming bids. Ms. O'Neill made a motion seconded by Mr. Soli that bid 2007-25 for Single Phase Pad Mounted Transformers be awarded to Graybar Electric Company for a total cost of $75,394.00 as the only qualified bidder on the recommendation of the General Manager. Motion carried 5:0:0. Single Phase Pole Mounted Transformers - IFB 2007-24 Mr. Dion explained that these items have historically had a long lead-time time. Mr. Dion pointed out that the transformers ordered last fall arrived the first week of June. Mr. Soli asked about the liquidated damages and Mr. Dion said that he will look into lowering the liquidated damages for the next bid. Regular Session Meeting Minutes June 27, 2007 M. G. L. c. 30B Bids Single Phase Pole Mounted Transformers - IFB 2007-24 Ms. O'Neill made a motion seconded by Mr. Soli that bid 2007-24 for Single Phase Pole Mounted Transformers be awarded to Graybar Electric Company for a total cost of $150,270.00 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 5:0:0. Digger Derrick Utility Vehicle - IFB 2007-18 Mr. Dion stated that the low bidder, Altec, did not meet the RMLD's requirements or specifications therefore staff is recommending that the bid go to the second lowest bidder, James A. Kiley, Co. Mr. Dion said that RMLD employees have developed the specifications for the trucks over many years. Mr. Dion said that Joe Donahoe, Brian Hansen and the purchasing group have worked to make this bid non-vendor specific, however, vendors must meet the technical specifications determined by the RMLD. The specifications have been modified but Altec could not meet the key specifications. Chair Kearns asked if the bid could go to the lowest bidder if modifications were made for less than the cost differential? Mr. Dion replied that items such as the stiff legs, hydraulics and control systems work could not be changed with paid modifications. In response to a question from Mr. Soli, Mr. Dion said that the expected life of the vehicle is nine years. He also stated that the issues of the warranty and parts and labor also differentiated the bids. Ms. O'Neill made a motion seconded by Mr. Hahn that bid 2007-18 for a Digger Derrick Utility Vehicle be awarded to James A. Kiley, Co. for $178,604.00 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 5:0:0. Janitorial Services Contract - IFB 2007-31 Mr. Owen said that more than sixteen prospective bidders attended a mandatory pre-bid conference. He noted that this is a two-year contract, the current contractor is the lowest bidder, and the contractor will ensure that the quality of service is better at a lower cost. Chair Kearns said that there were issues discussed relative to the janitorial service in the security report. Mr. Dion responded that these have been addressed. Ms. O'Neill made a motion seconded by Mr. Soli that bid 2007-31 for the Janitorial Services be awarded to Commonwealth Maintenance Systems, Inc. for $97,170 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 5:0:0. Commercial and Industrial Energy Audits - IFB 2007-21 Mr. Bilicki explained that an outside firm performs the commercial and industrial energy audit programs and that this project has been put out to bid in order to conform with Chapter 30B. Mr. Bilicki explained that Energy New England was the only qualified bidder; another bidder responded thirty days past the due date. A discussion of the program, who can take advantage of it, how many companies can be served, and promotion of the program ensued. Ms. O'Neill made a motion seconded by Mr. Hahn that bid 2007-21 for Commercial & Industrial Energy Audits be awarded to Energy New England as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 5:0:0. Energy Efficiency and Renewable Energy Technology Assessment - IFB 2007-28 Mr. Seldon stated that the Department sent requests for proposal (RFP's) to eleven vendors to perform the technical potential study and received the one bid from GDS. Given the limited number of responses that were received, calls were made to all the potential bidders to find out why they did not bid. Mr. Seldon said that based on the feedback from the vendors there is currently a demand for this type of work and the Department gave a limited amount of time for response. Regular Session Meeting Minutes June 27, 2007 6 M. G. L. c. 30B Bids Energy Efficiency and Renewable Energy Technology Assessment - IFB 2007-28 Mr. Seldon said that Jane Parenteau and he reviewed the bid submitted by GDS; Pete Dion performed the technical review, and Vinnie Cameron reviewed the financial proposal. Mr. Hahn disclosed that GDS is a subcontractor to his company on a project in another state and said that he would recuse himself on the vote. Chair Kearns stated that she had discussed this issue with Mr. Cameron and believed it prudent for Mr. Hahn to leave the room also until the vote was taken. Mr. Hahn left the meeting at this point. Mr. Soli asked that if the vendors would bid if they had sufficient time. Mr. Seldon replied while that possibility exists, the amount of time required for re-bid and the likelihood that vendors have taken on other work in the meantime would serve to hold back implementation of elements of this year's budget that are tied to the findings of this study. Ms. O'Neill made a motion seconded by Mr. Soli that bid 2007-28 - Energy Efficiency and Renewable Energy Technology Assessment be awarded to GDS Associates Inc. for $88,546 as the lowest qualified bidder on the recommendation of the General Manager. Motion carried 4:0:1. Mr. Hahn was not in the room for the vote. Mr. Hahn reentered the meeting at this point. Power Supply Report Mr. Seldon commented that load for May 2007 was up 2.89% over May 2006. The RMLD's load growth year to date is up 3.8% from 2006. May's energy costs were $2.055 million or 3.43¢ kilowatt hour. Capacity costs were $6.65 per kilowatt month. Under-recovery of fuel costs for the month by $580,000 has resulted in a Deferred Fuel Cash Reserve of $3.5 - million. Mr. Seldon noted a discrepancy picked up by Mr. Hahn in Table 1 on the ISO Interchange Costs is due to a one,, week overlap in the monthly ISO billing. Mr. Seldon said that he will bring it back to the Energy Services group to' determine whether that should be stripped out. Chair Kearns asked Mr. Hahn for his preference and Mr. Hahn stated that whatever is the most expeditious for the staff is fine with him. Mr. Soli commented that the capacity charges are determined by the peak usage and stressed the importance of customers contributing to lowering costs by reducing their electricity usage during peak times. Ms. O'Neill commented that she would like to see the RMLD take a pro-active step by approaching developers before they build in order to encourage them to incorporate energy efficiency measures. Mr. Dion said that currently the RMLD does not have a program like this, but that the work with GDS and the technical potential study could result in something that addresses this. Engineering and Operations Update Mr. Dion reported that there are no significant changes in the capital portion from the prior month. The Lynnfield conversions are being done and since there is more load than anticipated, some capital projects are going to be expedited. Details are provided in the written report. The reliability statistics provided in the report indicate that the RMLD is doing extremely well. Chair Kearns suggested having the reliability information in In Brief to make customers aware of the level of reliability they are receiving. In response to a question from Mr. Soli, Mr. Dion stated that staff has been discussing how labor costs are allocated between the capital and operating budgets. Mr. Fournier said that the Department has sufficient money to fund the capital projects, including those that have been over budget. Regular Session Meeting Minutes June 27, 2007 Engineering and Operations Update - In response to a question from Ms. O'Neill about transformers, Mr. Dion replied that four transformers have been replaced during the current heat wave compared to 80 over a one-week stretch last summer. Mr. Dion said that staff has received information from some customers when they have increased their usage and he encouraged customers to continue to so. This will allow the RMLD to upgrade its service if necessary. General Managers Report Mr. Dion reported that the Rate Comparisons for May is in the Board book. Mr. Soli requested that the font size be increased in the Rate Comparisons charts Mr. Dion said that the answers to the warrant are contained in the Board book. Mr. Dion said that the RMLD has provided temporary service for Reading's Friends and Family Day that will take place June 30 at the Birch Meadow field and that the RMLD will have a table. Mr. Dion added that Vehicle Day is Wednesday, August 21 at the Reading Public Library. Chair Kearns stated that a motion was made at the last Citizens' Advisory Board (CAB) meeting and she will take it up at the next RMLD Board meeting. BOARD MATERIAL AVAILABLE BUT NOT DISCUSSED NEXT BOARD MEETING: July 25, 2007, 7:30 p.m. Executive Session Ms. O'Neill made a motion seconded by Mr. Soli that the Board go into Executive Session to discuss power contracts under MGL Chapter 164 Section 47D, and collective bargaining strategy and return to Regular Session for the sole purpose of adjournment. Motion carried by a polling of the Board 5:0:0. Mr. Hahn, Aye; Mr. Soli, Aye; Mr. Pacino, Aye; Ms. Kearns, Aye; and Ms. O'Neill, Aye. Motion to Adjourn At 10:30 p.m. Mr. Soli made a motion seconded by Mr. Hahn to adjourn the Regular Session. Motion carried 5:0:0. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Mary Ellen O'Neill, Secretary RMLD Board of Commissioners