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HomeMy WebLinkAbout2002-11-26 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners Regular Session 230 Ash Street ED l D Reading, MA 01867 - a CLERK November 26, 2002 A u l G, t z J(z JAN 10 P 2: 25 Start Time of Regular Session: 7:40 p.m. End Time of Regular Session: 11:20 p.m. Attendees: Commissioners: Messrs. Hughes, *Pacino, Ames, Soli and Herlihy RMLD Staff: Mr. Cameron, Acting General Manager, Messrs. Blomley, Fournier and Owen Ms. Antonio CAB: Mr. Stevenin *Mr. Pacino arrived at 8:20 p.m. 100) JANE / 0 ~ This meeting of the Reading Municipal Light Department (RMLD) Board of Commissioners, November 26th is being taped at RMLD's office at 230 Ash Street, Reading, MA. This meeting will be aired on RCTV at a later date with video tapes available for distribution to the community television stations in North Reading, Wilmington, Lynnfield and Reading. Chairman Hughes called the meeting to order at 7:40 p.m. Chairman Hughes asked Commissioner Herlihy to act as Secretary Pro Tern as Commissioner Pacino will be late. Minutes October 24, 2002 Mr. Soli made a motion seconded by Mr. Ames to approve the minutes of October 24, 2002 with the changes noted. Motion carried 4:0:0. November 7, 2002 Mr. Soli made a motion seconded by Mr. Ames to approve the minutes of November 7, 2002 with the changes noted. Motion carried 4:0:0. Report of the Chairman of the Board Ad Hoc RMLD Governance Advisory Committee Update Mr. Hughes informed the Commission of the last two Ad Hoc RMLD Governance Advisory Conunittee (Ad Hoc Committee) meetings on November 13th and November 20th. Mr. Hughes stated the next scheduled meeting is December 4th at the Reading Town Hall. General Manager's Search Committee Update Mr. Hughes informed the Commission of the General Manager's Search Committee (GM Search Conurrittee) had their last two meetings on November 15th and November 25th. Mr. Hughes wanted to publicly thank the members of the Committee, who voluntarily provided their time to participate in the General Manager's Search Committee. Mr. Hughes recognized the members of the Committee as Fred Nemergut, Phil Pacino, Beth Ellen Antonio, Beth Klepeis, Arthur Carakatsane, Bill Wallace and himself. Letter to Chairman Hughes from Town Meeting Member, Mr. Gerald L. MacDonald, Precinct 3 Mr. Hughes noted the letter in the Commissioner's packets which he stated is self-explanatory. Letter sent to Ms. Camille Anthony, Reading Selectwoman, from Chairman Hughes Mr. Hughes explained this letter was sent requesting the RMLD Board of Commissioners be included in future discussions on issues relative to the RMLD. Mr. Hughes noted he has not received a response from Ms. Anthony, as yet, but will keep the Commission updated. Action Item Draft Procurement RMLD Policy Number 9, Revision Number 2 Mr. Hughes stated this motion will need to be tabled until Mr. Pacino arrives later this evening, as he had a question relative to this Policy and suggested a motion to that effect. Regular Session Minutes Page Two November 26, 2002 Action Item Draft Procurement RMLD Policy Number 9, Revision Number 2 - Mr. Herlihy made a motion seconded by Mr. Soli to table this motion until Mr. Pacino is present to vote. Motion carried: 4:0:0. Acting General Manager's Report October, 2002 Financials Mr. Fournier commented on the liability section of the budget relative to long term debt, stating there is a final payment of a Bond due in February, 2003, leaving two bonds left to pay. Mr. Fournier further commented on the October, 2002 Financials stating base revenues are still ahead of budget, with the forecast a little over 1%; the PPA for the month of October was about $128,000, which was smaller compared to other months, however, the total year to date is about $2.2 million which has been given back to the ratepayers. Mr. Fournier continued, stating the base power cost continues to be under budget, the outside Streetlights to date is losing about $27,000, it was budgeted for losing $83,000, so the net income is expected to be $1.0 million ahead of budget. Mr. Fournier noted the Capital Budget is in final draft form and should go out shortly, and the Operating Budget should be ready soon thereafter. Mr. Fournier also noted the Department is scheduled to do a physical inventory count during the first week in December, which is Mr. Owen's responsibility. Mr. Cameron stated he plans to give the Capital and Operating budgets to the Capital and Operating Subcomnuttee prior to the meeting. Mr. Cameron explained he wanted to forward the information to the Subcommittee for review prior to scheduling a meeting in order for them to be ready to proceed. Mr. Cameron also stated the Citizen's Advisory Board (CAB) will receive their Capital and Operating Budgets for review, as well. Although Mr. Soli is not a member of the Subcommittee, he asked for a copy of the Capital and Operating Budgets. *Mr. Pacino arrived at the meeting during this part of the discussion, approximately 8:20 p.m. Mr. Pacino agreed with Mr. Soli and suggested all Commissioners should be provided a copy of the budgets. Mr. Cameron agreed and will provide all the Commissioners with a copy of the budgets, similar to the CAB. Mr. Pacino reminded the Commission a presentation of the budgets is supposed to be made to the Reading Finance Committee in December, therefore, that meeting needs to be scheduled. Mr. Cameron will arrange a time with the Finance Committee via Mr. Hechenbleikner. Mr. Herlihy reminded the Commission about the Town's concern that the RMLD financials are not presented in the same manner as Town's financial information. He asked Mr. Fournier for clarification on this issue. Mr. Fournier stated FERC requires all utilities, including the RMLD, to use a certain format, although if there is a way to make it easier for the Town to understand the RMLD's financials he can certainly do that; however, he needs guidance from the Town relative to the format. Mr. Fournier explained Mr. Hechenbleikner agreed to meet with him to review the financials in order to learn how the RMLD classifies things, etc. As Mr. Fournier noted, the conversations have begun and he is now waiting for the Town to provide some guidance on format. Brief discussion ensued. Pension Trust Statement Mr. Cameron stated no action is required under this agenda item, it is a six-month update only and is done as a request at the last Board meeting. Brief question and answer period ensued. Mr. Pacino suggested another actuarial study be done on the Pension Trust. `e. Regular Session Minutes Page Three November 26, 2002 Called Bonds, Pension Trust Mr. Cameron noted this was added to the report for information only, noting Policy 22 has a provision for the General Manager - to confer with the Town Treasurer to make investment decisions when situations involve a Bond needing to be reinvested. Mr. Cameron stated he spoke with Ms. Klepeis relative to Called Bonds and the decision was made that the best investment vehicle is a "step up" which is going for about 3.25 percent, and on an annual basis if they are not called, they go up one-half percent; however, when they are available, they are the best investment. Mr. Cameron noted those funds are in a MMDT which is similar to a passbook savings account. Citizen's Advisory Board Meeting for all Towns Mr. Cameron noted the CAB sent a letter to the four towns to inform them of the meeting they scheduled for Tuesday, December 3, 2002 at 7:00 p.m., at the Wilmington Town Hall, hosted by the CAB. Mr. Cameron noted the letter is included in the Commissioners packet and is self-explanatory. DTE Response to the Fiscal Year Date Change to June 30th Mr. Cameron explained at the last meeting there was a motion concerning moving the RMLD's fiscal year to coincide with the Town's fiscal year and, in that motion, there were several issues to be addressed relative to DTE and reporting requirements. Mr. Cameron stated although Mr. Fournier has been working on these issues, he does not have all the information; however, he is hoping by the next meeting he will have all the answers. Mr. Fournier updated the Commission stating that the Massachusetts Department of Telecommunications and Energy (DTE) has no problem with the RMLD changing its fiscal year end date to June 30, although they would still expect annual reports completed on a calendar year basis, meaning there would be unaudited numbers. Mr. Fournier stated he is waiting for this opinion to be sent to him in writing so the RMLD will be covered if some of the figures are unaudited. Mr. Fournier also stated he called the Energy Information Administration in Washington, D.C., because there are two reports he submits to them on an annual basis, and one must be on a calendar year basis. Mr. Fournier confirmed the other report can be on a fiscal year basis and he is waiting for the Energy Information Administration to state that in writing as well.. Mr. Fournier noted he will have everything outlined for the Commission at the next RMLD Board Meeting in order for them to make a decision. Mr. Fournier also confirmed that use of the Town Auditors is not an issue. MEAM Meeting Mr. Cameron noted he attended the Municipal Electric Association of Massachusetts (MEAM) monthly meeting and one of the items on their agenda was the proposed legislation by the Inspector General to change Chapter 164. As Mr. Cameron explained, the Inspector General has changed wording, putting more responsibility on the Town Accountant to oversee expenditures of municipal Light Departments. Mr. Cameron stated he will put the "State Ethics Commission Facts Sheet #10" in all the Commissioner's mailboxes for their review. General Manager's Bond and Fiduciary Policy Mr. Cameron stated Mr. Blomley has a memo dated November 19`h which explains what a Bond will pay and what a Fiduciary Bond would pay. Mr. Cameron noted this memo discusses the General Manager's job description and details about Chapter 164, Section 56, outlining what the General Manager's job responsibilities are, upon which a Bond would be based. Mr. Cameron stated the actions of a General Manager outside of his normal job responsibilities that are questionable or unlawful would not have been recouped through a Bond. It was still unclear to the Commission what a Bond would or would not pay. Mr. Soli suggested a more detailed General Manager's job description be drafted and distributed to the Commission. Mr. Cameron stated he would have more information in the General Manager's job description by the next meeting. Extensive discussion ensued with a decision from the Board for Mr. Pacino to do research relative to this issue and report back to the Commission with his findings. Cost of the RMLD Logo Mr. Cameron explained this issue was brought up at the last meeting, questioning if the RMLD gets value for the money spent _ . ' by putting the logo in the paper when advertising for bids. Mr. Cameron noted if we do not get value, maybe the logo should be deleted for cost saving measures. Mr. Cameron explained this is difficult to assess and asked Mr. Owen for clarity. Regular Session Minutes Page Four November 26, 2002 Cost of the RMLD Logo Mr. Owen stated the cost for publishing the logo on the notices in the newspaper is between $5.00 and $12.00; this year there were four bids in the newspaper which equals approximately $60.00. Mr. Owen stated it is an identity issue and it is difficult to determine whether the RMLD has benefited from using the logo; however, it is to meet a legal requirement. Mr. Owen stated his opinion is that the logo should be retained. Mr. Pacino suggested the list of Commissioners' names be deleted Mr. Owen noted deleting the names would shorten the column by at least an inch; thus, it would save money on the advertisement-- probably more then deleting the logo. After brief discussion, the Commission decided the logo stays on the advertisements; however, the Commissioners' names will be deleted, with the exception of the Chair's name. ENE Management Report, September, 2002 Mr. Cameron stated this management report has not changed from the last report and gave some specific details on the activities. Mr. Cameron noted ENE's total equity is $1,652,000,000. Mr. Cameron also noted one-quarter of the total equity is approximately $413,000. Mr. Cameron stated the answer to the question whether he has the authority to terminate the agreement with ENE is, yes he believes he does have authority-- there is nothing in the Operating Agreement that says differently. Mr. Cameron explained he does not want to use Counsel on this issue unless it is absolutely necessary; however, he will return to the Board at the next meeting with more concrete answers to the two remaining questions. Mr. Soli added he wants a draft of a termination letter to ENE for all the Commissioners and the General Manager to sign CIBFMS Update Mr. Cameron noted a draft contract has been submitted to the company RMLD is currently negotiating with and the Contract appears to be close to executable. Mr. Cameron reiterated the selection process for this vendor was done via a bid, therefore, when ready, Mr. Cameron will bring a motion to the Board with the pertinent analysis as to why the vendor was selected as well as the Contract. Mr. Cameron stated he may very well return to the next meeting with this bid. Action Item Draft Procurement RMLD Policy Number 9, Revision Number 2 SunEested Motion Mr. Ames made a motion seconded by Mr. Herlihy to take the previous motion relative to Policy 9 off the table for discussion. Motion carried: 5:0:0. Mr. Owen stated Policy 9 was revised to: include an update for procurement bids and solicitations according to the Massachusetts General Laws; enhance oversight of purchases; establish clearer, more defined responsibilities; and, most importantly, incorporate a code of conduct into the Policy that addresses the RMLD policy on the solicitation and acceptance of any gifts or gratuities by any RMLD employee, Board member or CAB member. Extensive discussion ensued. Mr. Ames suggested the Commission revisit Policy 9 in one year, November 2003, to ensure performance under this newly revised Policy. Mr. Herlihy made a motion seconded by Mr. Ames that the Reading Municipal Light Department Board of Commissioners approve Procurement Policy Number 9, Revision Number 2, based on the recommendation of the Policy Subcommittee. Motion carried: 5:0:0. Ad Hoc RMLD Governance Advisory Committee Mr. Pacino updated the Commission on the November 201h meeting of the Ad Hoc Committee, which he and Commissioner Herlihy attended. Mr. Pacino stated the Ad Hoc Committee has only, one major issue remaining, which is whether this Commission should be an appointed or elected Board. Mr. Pacino also stated the Ad Hoc Committee recommended that the ;Department go forward with hiring a General Manager, which Mr. Pacino will reiterate to the GM Search Committee. Regular Session Minutes Page Five November 26, 2002 Policy 19, Revision 6 Mr. Herlihy updated the Commission that the Policy Subcommittee met in a posted open meeting prior to this Board meeting / ,and reviewed RMLD Policy 19, Revision 6. Mr. Herlihy noted under section IV.A.4. Policy Elements, wording was added to "the Policy concerning the Policy of the RMLD Board. Mr. Herlihy stated the language was to be supportive of a good relationship between management and unions as detailed in the Labor Relations objective section of the Labor Relations Guidelines. Mr. Herlihy read the additional wording, with respect to RMLD business. Mr. Ames explained this wording is actually enabling communication and interaction in areas of non-business areas, i.e., its okay to be congenial with employees, however, it is not okay to discuss RMLD business. Mr. Herlihy stated there was also a determination of the Policy Subcommittee to consider a Policy relative to non-compliance of Policies by Board members. Mr. Ames explained the Policy Subcommittee suggests the Board agree that a motion be made that attempts to determine what happens when a Board member violates policies. Mr. Ames stated there is no such penalty or process in place; therefore, the Policy Subcommittee needs guidance from the Board to create such a Policy. Discussion ensued. Mr. Cameron suggested researching this issue with APPA and NEPPA to determine if they have a similar Policy and offered to query those organizations. A sense of the Board was to give the Policy Subcommittee a blinking green light to proceed with a Policy to ensure Policy 19, Revision 6, is followed. 2003 Commission Operating Budget Mr. Pacino informed the Board that the Operating Budget Subcommittee met to discuss the Commissioners' budget for 2003. Mr. Pacino explained the budget for this year was $20,000, including $2,000 for each Commissioner's education costs, which were not spent last year. Mr. Pacino noted the Subcommittee recommends $1,000 be set aside for flowers, postage, etc., 2,000 for the secretarial services, $7,000 for NEPPA and APPA conferences and travel incurred by these events. Mr. Pacino _-noted the Subcommittee cut the Commissioner education line to $1,000 each and will leave it up to each Commissioner as to whether they utilize that money or not; this would bring the total budget to $15,000. Mr. Cameron suggested deleting the $1,000 for flowers, etc., due to the Sunshine Fund. Discussion ensued. The Commission decided the $1,000 will be spent on postage, supplies, etc., and if flowers are needed, they will donate their own personal money. November, 2002 Rate Comparison Mr. Cameron stated the rate comparison for November shows the RMLD's residential rates just below Massachusetts Electric's rates and well below Nstar and Wakefield; however, our rates are five to six percent above Peabody and Middleton; the time of use rate is below everyone except for Middleton; the commercial rates are below all of the other utilities and the industrial time of use rates are also below all of the other utilities. Discussion ensued. Credit Card Policy Mr. Soli suggested a Policy be put into place indicating there are absolutely no Credit Cards, stating this would serve as advice for future Board members and be documented. Mr. Soli suggested this Policy would have three parts, as follows: 1. The application for RMLD Credit Cards is strictly prohibited by RMLD Commissioners: 2. The use of RMLD Credit Cards by employees or Commissioners is_strictly -prohibited by the RMLD Commissioners. - 11 f 3. If a change in this Policy is considered, before any change is voted upon, the old Policy and the proposed new Policy shall be published for three consecutive weeks as a legal notice in the newspapers of the communities provided electricity service by the RMLD. Regular Session Minutes November 26, 2002 Page Six Credit Card Policy Mr. Soli noted the last part of this Policy would include a reference from the Reading Chronicle on December 11, 2001, page one, using the headline and the subheadline; he believes the total story should be included. Mr. Ames suggested having this as an appendix to the Procurement Policy. Discussion ensued. Mr. Pacino suggested to move forward by including these suggestions into a Policy. Mr. Cameron stated he does not have a problem with this suggestion; however, he wants to review it with the Department prior to going forward. Mr. Cameron noted it may be added in with the Procurement Policy. He will obtain feedback and return to the Policy Subcommittee. Warrant Subcommittee Policy Mr. Soli suggested the Warrant Subcommittee should be required to alternate every four weeks, therefore, all Commissioners would be required to sign the warrants at least every four weeks per year. Mr. Soli explained this would allow more sets of eyes and less burnout. Mr. Soli would like to refer this to the Subcommittee for review. Extensive discussion ensued. Mr. Pacino agreed to be a primary signer and Mr. Soli to be the alternate. Mr. Cameron suggested a schedule for signing, due to the fact that there are certain times of the year when some Commissioners are busier than other, i.e., Mr. Pacino's tax season, etc. Warrant Subcommittee Policy Mr. Pacino stated this change should be part of Policy 19, Revision 6. Mr. Cameron will investigate under which Policy this issue should be addressed. Meeting Date Thursday, December 12, 2002. Executive Session d Motion At 10:30 p.m., Mr. Pacino made a motion seconded by Mr. Ames to enter into Executive Session to discuss strategy with respect to litigation and return to the Regular Session for the sole purpose of adjourning. Motion carried by a show of hands, 5:0:0. Motion to Adjourn At 11:20 p.m., Mr. Pacino made a motion seconded by Mr. Ames to adjourn the Regular Session. Motion carried by a show of hands 4:0:0. Mr. Pacino called for a poll of the vote: Mr. Ames, Aye; Mr. Pacino, Aye; Mr. Soli; Aye and Mr. Herlihy; Aye. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Andrew K. Herlihy, Secretary Pro Tern RMLD Board of Commissioners