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HomeMy WebLinkAbout2002-11-07 RMLD Board of Commissioners MinutesReading Municipal Light Board of G Regular Session 230 Ash Street Reading, MA 01867 November 7, 2002 commissioners s ECE PEED i 0LERK ~ I S. MASS. Start Time of Regular Session: 7:35 p.m. nu ROV 21 End Time of Regular Session: 10:35 p.m. Attendees: Commissioners: Messrs. Hughes, Pacino, Ames, Soli and *Herlihy RMLD Staff. Mr. Cameron, Acting General Manager, Messrs. Blomley and Fournier Mses. Gottwald, Cavagnaro, Antonio, Blomley, and Vaccaro CAB: Mr. Stevenin Selectmen Liaisons: Messrs. Cummings and Veno Guests: Messrs. Hechenbleikner and Ensminger This meeting of the Reading Municipal Light Department (RMLD) Board of Commissioners, November 7tb is being broadcast live at the RMLD's office at 230 Ash Street, Reading, MA. Live broadcasts are available only in Reading due to technology constraints. This meeting is being video taped for distribution to the community television stations in North Reading, Wilmington and Lynnfield. Chairman Hughes, Chairman of the Board, called the meeting to order at 7:30 p.m. Mr. Hughes introduced the members of the RMLD Board and the Acting General Manager and welcomed the audience to the meeting. The audience included members of the RMLD staff, Mr. Stevenin, Citizen's Advisory Committee (CAB), Mr. Joe Veno, North Reading Selectmen, Mr. Peter Hechenbleikner, Reading Town Manager, Mr. Dan Ensminger, Chairman of the Ad Hoc RMLD Governance Advisory Committee, and Mr. Matt Cummings, Reading Board of Selectmen and member of the Ad Hoc RMLD Governance Advisory Corrunittee. Mr. Hughes reminded the Board and the audience to speak directly into the microphones. Minutes October 8, 2002 Mr. Ames made a motion seconded by Mr. Soli to approve the minutes of October 8, 2002, as presented. Motion carried 3:0:1. Mr. Pacino abstained as he was not present at the October 8th meeting and Mr. Herlihy was not present to vote at this portion of the meeting. Report of the Chairman of the Board General Manager's Search Committee Update Mr. Hughes updated the Commission on the General Manager's Search Committee (GM Search Committee) held on Thursday, October 31, 2002. Mr. Hughes stated the seventy-two candidates have been narrowed down to eight semi-finalists. Mr. Hughes noted the next meeting is scheduled for Friday, November 15, 2002. Mr. Pacino stated due to the recommendations of the Ad Hoc RMLD Governance Advisory Committee (Ad Hoc Committee), the GM Search Committee needs guidance from the RMLD Board of Commissioners regarding how it should proceed after the eight candidates are interviewed. Mr. Hughes informed Mr. Pacino this issue is on the agenda for discussion at the GM Search Committee on November 15th Mr. Ames reminded the Commission the former General Manager had a contract, however, there has been discussion of not implementing a contract this time. Mr. Ames suggested the GM Search Committee meet with the Ad Hoc Committee to determine if a contract could be implemented using specific language that would be satisfying to all. Mr. Ames continued stating this recommendation arose from his concern that when an employment offer is made to the selected candidate, the candidate will want to know the terms and conditions of his/her employment and they_will need an answer. Mr. Pacino explained the mission of the GM Search Committee and the goals are to select appropriate candidates to refer to the RMLD Board of Commissioners not to implement or discuss employment conditions. Mr. Soli asked where the interviews will take place. Regular Session Minutes November 7, 2002 Report of the Chairman of the Board General Manager's Search Committee Update Mr. Pacino stated the interviews will take place off-site. Page Two Ms. Antonio gave her update to the Commission noting the GM Search Committee has selected eight candidates and the interviews will take place off site. Ms. Antonio also noted after the interviews are complete the GM Search Committee will need to decide the next step depending upon recommendations by the RMLD Board of Commissioners. Ad Hoc RMLD Governance Advisory Committee Update Mr. Hughes informed the Commission that the Ad Hoc Committee made its presentation at the Reading Board of Selectmen and the Citizen's Advisory Board meetings. Mr. Pacino elaborated on this issue stating after the Ad Hoc Committee met with the Reading Selectmen last week, however, they requested additional time from the Reading Selectmen to re-examine the recommendations they made. Mr. Pacino stated this request was an after thought for the Committee as they had an opportunity to meet with the CAB and the Selectmen from the outside Towns and received more input. Mr. Ames stated he drafted a letter to the Reading Board of Selectmen stating since the RMLD Board of Commissioners has not been formally included as part of the Ad Hoc Committee, the RMLD Board of Commissioners should at least review any recommendations made by the Ad Hoc Committee considering the it is the RMLD Board who knows more about the events that led up to the Inspector General's Report than any other Town body. Mr. Hughes stated the letter from Mr. Ames will go under consideration by the Commission. Mr. Pacino informed the Commission he attended the last Ad Hoc Committee meeting and the Committee was open and receptive to the input provided by the RMLD Board of Commissioners, Mr. Pacino noted the Ad Hoc Committee asked the Selectmen for additional time in order to obtain more input prior to their final recommendations. Mr. Pacino stated Mr. Ensminger agreed to let Mr. Cameron know when the meetings are held thus the RMLD Board of Commissioner can attend and provide their input. Mr. Hughes questioned why no Commissioners of the RMLD Board were appointed as a member to the Ad Hoc committee. Mr. Hughes stated the original Task Force from which the Ad Hoc Committee originated was comprised of two Finance Committee members, two RMLD Board members, two members of the Reading Board of Selectmen and two members of the CAB so it was puzzling that when the Ad Hoc Committee was formed a RMLD Board member was not appointed. Mr. Cummings replied, back in June 2002, when the Ad Hoc Committee was created, the Reading Board of Selectmen did have a discussion about the substance of the Ad Hoc Committee and decided to include a member of the RMLD Board would be a conflict of interest. Mr. Hughes asked why a RMLD Board member is considered a conflict of interest for the actual Ad Hoc Committee but not for the original Task Force? Mr. Cummings then replied, there is a fundamental difference between a task force to set up the audit function and a task force to decide upon the governance of the RMLD. Mr. Pacino noted he reads comments in the paper which state the RMLD is a Town of Reading Department, however, he also hears comments from members of the other Towns that the RMLD is owned by the Ratepayers. Mr. Pacino stated this is obviously a fundamental and conflicting issue. In expressing his desire to clear up an inaccurate statement, Mr. Veno confirmed he was indeed present at the September 25th Ad Hoc Committee meeting to represent North Reading and the fact a statement was made that North Reading was not represented at that meeting was incorrect. Mr. Veno also commented that the North Reading Selectmen are adamant about the RMLD Board of Commissioner remaining an elected Board and not be appointed. Selectmen Liaison, Citizen's Advisory Board and Customer Comments Ms. Cavagnaro informed the Commission the Customer Service Department has been receiving a lot of telephone calls from the ratepayers who have received their bills and were unaware of the refund. Ms. Cavagnaro wanted to inform the ratepayers about the refund they should expect to see as a credit on their bills this month stating the refund will be under a line item on the bill which reads "Rate Refund for 2002." Regular Session Minutes Page Three November 7, 2002 Selectmen Liaison, Citizen's Advisory Board and Customer Comments Ms. Cavagnaro explained this refixed is as a result of the three million dollar refund given back to the ratepayers which is based on a percentage over the past twelve months of usage, therefore, ratepayers who have just moved into the service territory may only have a small refimd. Chairman Hughes thanked Ms. Cavagnaro for the explanation. Presentation Presentation for Subsequent Town Meeting Mr. Hughes stated this presentation has been updated since the last Commissioner meeting and this report is found on pages 11-29 of the Report on the Warrant, Subsequent Town Meeting on November 12, 2002. Mr. Cameron reminded the Commission of the presentation he made to them in late September on what was required on the instructional motion from the Spring Town Meeting, however, since presenting it to the Board he has refined it. Mr. Cameron explained he will start out discussing the State of the Light Department, make a statement relative to the RMLD financial performance, present the actual versus budget year-to-date of the RMLD profit and loss statement, respond to the Article 3 Instructional Motion with a glossary of terms and explain how much money was spent and why it was spent in each of the items. Mr. Pacino suggested Mr. Cameron send this presentation information to the outside Towns for their information as well. Mr. Cameron agreed to send the presentation to the Town Managers of the other three Towns.. Action Items Draft Procurement RMLD Policy Number 9, Revision Number 2 Mr. Ames suggested this agenda item needs to be deferred until the next meeting since Mr. Owen is not present. Mr. Ames stated he and Commissioner Herlihy reviewed and revised this policy several times due to the problems brought forth by the Inspector General. Mr. Ames also brought to the attention of the Commission that on the last page, paragraph e "code of conduct", a zero tolerance policy. Mr. Ames explained this zero tolerance policy was discussed in a letter from the Chairman to all the vendors stating no RMLD employee, Board member or CAB member is authorized to accept any gift or gratuity from any vendor. Mr. Ames also explained, in addition to the zero tolerance policy, there are other structural features relative to administrative items within the Department. Tree Trimming Bid Suggested Motion Mr. Pacino moved that the Tree Trimming bid #2002-3 be awarded to Asplundh Tree Experts Company on the recommendation of the Acting General Manager. Services are to be utilized on an as-required, daily rate basis. We expect to utilize two (2) crews for the next three (3) years. Recommend that the contract be awarded to Asplundh Tree Experts as the bidder with the lowest total cost of $931,484.06 over the three (3) year period. Motion carried: 4:0:0. Mr. Soli questioned whether the RMLD logo, which appears on all bids in the newspapers, provides value of the money spent on it in the legal advertisements. Mr. Cameron will explore this option and return back to the Board. Acting General Manager's Report Energy New England (ENE) Relative to a discussion at the last meeting of terminating the connection with ENE, Mr. Cameron informed the Commission that he will be drafting a letter to ENE giving notice that RMLD will be leaving as a founding member ENE. Mr. Cameron also informed the Commission the equity RMLD has right now with ENE is approximately $400,000; therefore RMLD would be losing approximately $100,000.00 although he cannot guarantee that figure as it depends on the Contract which he will review. Discussion ensued with a brief history relative to the start up of ENE. Mr. Soli asked if it is within Mr. Cameron's authority terminate with ENE Regular Session Minutes Page Four November 7, 2002 Acting General Manager's Report Energy New England (ENE) Mr. Cameron did not have a definite answer and stated he does not know whether he needs a Board vote for this since he is one of the four founding Directors of ENE. Mr. Cameron will return to the Board with an answer after he reviews the Operating Agreement. Possible change of the RMLD's fiscal year to year ending June 30'h. Mr. Cameron stated as he discussed at the Reading Board of Selectmen's meeting, he has no problem with changing the Fiscal Year end date to June 30''. Mr. Cameron stated he and Mr. Hechenbleikner discussed this issue and decided one of the RMLD Board of Commissioners would need to be a member of the Town Audit Committee. Mr. Cameron also stated when he and Mr. Fournier discussed this issue they realized they need to contact the DTE to inquire what requirements they need relative to the audited statements for the end of the year and how to accomplish that task. Mr. Cameron noted unless the Board has any questions or concerns he will take the necessary steps to accomplish this task. Discussion ensued. Mr. Hechenbleikner stated he appreciates the Board's action on this issue. Mr. Hechenbleikner explained where the Town is relative to the audit selection process and how the auditing system works for the Town stating Reading is one of few communities in this area with an Audit Committee. This Committee is made up of five members, two members are appointed by the FinCom, one member is appointed by the Reading Board of Selectmen, one is appointed by the School Committee and one is appointed by the Town Moderator. The Audit Committee seeks three year bids for auditors which is part of the procurement act and selects the audit firms and signs the Contract and that is where the Town is at this point. The Town would need to amend the Bylaw that creates the Audit Committee to add a RMLD Board appointment to the Audit Committee which may delay the process. Mr. Ensminger read from Chapter 164, Section 63, Duties of Municipality and its Officers, "books, accounts and returns shall be made and kept in a form prescribed by the Department, i.e., DTE, and the accounts shall be closed annually on the last day of the fiscal year of such Town." Mr. Ensminger stated, therefore, the DTE should not have a problem with the change in fiscal year end. Extensive discussion ensued. Motion Mr. Pacino made a motion seconded by Mr. Ames to direct the Department to initiate the necessary steps needed to implement a June 30th fiscal year end date for the RMLD and to become part of the Town of Reading Audit Process, this motion is subject to: 1) the thirty day approval period from the Citizen's Advisory Board under the twenty year agreement, 2) the requirements of the DTE and; 3) the procedural requirements of the Town of Reading. Motion approved 4:0:0. Letter from North Reading Parks and Recreation Department Mr. Cameron noted a letter to Ms. Gottwald from the North Reading Parks and Recreation Department thanking the RMLD for its donation of Halloween bags for its Harvest Festival, which was held on Saturday, October 19, 2002. Mr. Cameron also noted Certificates were given for Community Service to students who assisted the RMLD in the 2002 Halloween Party fulfilling community service requirements. Ms. Cavagnaro, Customer Service Manager and Ms. Vaccaro, Customer Service Representative gave a presentation to the Board relative to the Residential Conservation Services Program. Ms. Cavagnaro explained this program was originally handled via ENE which cost the RMLD $3,000.00 per month, however, the services will now be handled in-house via the Customer Service Representatives thus saving $3,000.00 per month. This program was well received among the Board as well as the audience. Mr. Hughes noted this as an example of the integrity of the RMLD staff as they take an interest in the ratepayers in order to save them money and provide quality service. Mr. Hechenbleikner stated the Town of Reading is doing a Water Conservation Program which has similar interest in conserving the resources which is a match, not only for Reading but the other three communities RMLD serves as well since all the communities draw water from the Ipswich River Basin. Regular Session Minutes Page Five November 7, 2002 RMLD Residential Conservation Services (RSC) Program (Laurie Cavagnaro) Mr. Hechenbleikner suggested the Town and the RMLD work together in a joint energy/water program, possibly joint auditing. Mr. Hechenbleikner stated this is another area where a partnership with the Light Department and the four communities could work together fairly well. Discussion ensued. September, 2002 Financials (Bob Fournier) Mr. Fournier commented on the September 2002 Financials stating base revenues are ahead of budget; the PPA year-to-date, which is a credit, is over two million dollars; operating expenses are all under budget; the Streetlight Program still shows a loss including a legal expense incurred of about fourteen thousand in September concerning a prevailing wage issue with one of the Towns. Mr. Fournier continued it has been a good year so far for the Light Department. Discussion ensued. Board Members sending correspondence Mr. Cameron stated in Policy 19 that Board members are not to send correspondence on RMLD letterhead. Mr. Cameron explained that regardless of the letterhead, under no circumstances should a Commissioner send any correspondence to anyone relative to Light Department business without first discussing it with Mr. Cameron and the Chairman of the Board. Mr. Cameron further stated even if the correspondence is being sent as a concerned citizen, it needs to be brought to the attention of the Acting General Manager and the Chairman before it is sent. Discussion of a Policy on Discretionary Spending Mr. Cameron stated discretionary spending is an Ad Hoc Committee description of Professional Services, i.e., legal, engineering, consulting, auditing and accounting services and what has been spent in the past. Mr. Cameron stated he has been ,considering how the Board, CAB and the Town can look at discretionary spending patterns and see what they are on a budget versus actual basis as these are listed in the RMLD Financials every month. Extensive discussion ensued. Board Discussion Mr. Bill Brown, Town Meeting Member, requested Messrs. Ames and Pacino make a statement for Town Meeting Mr. Ames updated the Commission that he had a discussion with Mr. Brown who suggested a statement be made to the Town Meeting relative to the Twenty-Year Agreement. Mr. Ames stated Mr. Brown made this suggestion after discussions at the meeting in Wilmington since he was aware of the relationship defined by the Twenty-year Agreement and he was fearful that the outside communities would react strongly to the proposals that the Ad Hoc Committee put forth. As Mr. Ames continued, given the CAB meeting and the Ad Hoc Meeting last evening, the statement may not be necessary. Commissioner Ames' letter to Mr. Veno, North Reading Selectmen Liaison Mr. Ames stated he wrote a letter to Mr. Veno relative to the summer/winter rates. Mr. Ames explained this letter was in response to the discussion the Board had engaged in about differentiated rates and Mr. Veno being adamantly opposed to these rate variations. Mr. Ames stated there is a reason to have time differentiated rates and was hoping this letter would help convince Mr. Veno of the necessity. Mr. Ames stated he did send this letter to Mr. Veno and commented it was certainly not trying to circumvent Policy 19. Mr. Ames apologizes if the letter offended anybody. Mr. Veno stated he received the letter from Mr. Ames and would like to further discuss it, although he did not bring the letter with him this evening. Mr. Veno gave a brief history of the discussion which led up to the letter stating he approached the Light Department about the time differentiated rates approximately fourteen years ago. Mr. Veno stated the issue he had with the differentiated rates is the fact he uses less power in the summer months than winter months although pays more in the summer. Mr. Veno continued stating the ratepayers who use air conditioning and pool filters during the summer months pay more because they use more energy, however, ratepayers who use the same amount of power all year should not have higher bills in the summer. Mr. Cameron stated the NEPOOL rules have changed over the last few years. given those changes and the fact that the RMLD needs to do a cost of service study, Mr. Cameron sent out a RFP during this past week calling for proposals from companies to do a cost of service study. As Mr. Cameron continued, one of the things outlined in the RFP is that the RMLD has seasonal rates. The proposed Cost of Service Study will look into levelizing the rates thus eliminating the summer/winter differential. Regular Session Minutes November 7, 2002 Page Six Commissioner Ames' letter to Mr. Veno, North Reading Selectmen Liaison Mr. Soli suggested having a conservation rate similar to the Town of Middleton. Mr. Soli understands this conservation rate to be similar to tiered rates. Discussion ensued. *Mr. Herlihy arrived at 9:47 p.m. Mr. Hughes stated he would like to take a personal point of privilege and revert back to Item Six on the agenda since Mr. Herlihy was not present earlier when it was discussed. Mr. Hughes explained to Mr. Herlihy that the final approval of Policy 9 will be made at the next RMLD Board of Commissioners meeting due to Mr. Owen being unavailable to attend this meeting. Mr. Herlihy apologized for being late for the meeting and stated the Policy meeting he and Mr. Ames attended last Friday with Mr. Owen was a productive meeting. Mr. Herlihy commented that as they reviewed Policy 9 they made sure the policy fell in line with 30B as much as possible without calling it 30B, however, Policy 9 still needs some minor editing as it relates to the language portion. Mr. Herlihy noted he would like this policy change to be made as quickly as possible. Mr. Ames confirmed that Policy 9 is in place now, it just needs formalization. For informational purposes only, Mr. Cameron informed the Commission that the Town Treasurer, Ms. Klepeis, informed him the RMLD has certain investments being called. Mr. Cameron noted one investment is in the Rate Stabilization Fund which will be called on December 6t`, and with the interest rate dropping, the RMLD has some bonds that are being called. Mr. Cameron stated he will take care of the Rate Stabilization Fund. However, there is a $900,000.00 Bond in the Retirement Trust that is being called on November 26th. Mr. Cameron stated in the past the Board has relied upon the Town Treasurer to make the pertinent investments on these occasions, however, given the RMLD Board being the Trustees of the Retirement Trust, the Board needs to know when these occur. If the Board needs further information, please notify Mr. Cameron. Mr. Pacino noted it has been a while since the Retirement Trust has been examined by the Board and suggested Ms. Klepeis to put a schedule together for Board review for the next meeting. Mr. Cameron will have the schedule for the next meeting. Mr. Ames stated, what to watch for is any significant departures from the actuarial assumptions part of the Trust plan Mr. Cameron commented he would have to discuss this with Mr. Fournier because he is not sure what the investment rates were on the last actuarial study. Mr. Cameron will get back to Ms. Klepeis because she has options, however, Mr. Cameron wasn't sure how long that window stays open. Mr. Pacino asked for a status report on the Ad Hoc Committee and asked where the Board stands on the General Manager's Bond? Mr. Cameron stated this was discussed a few meetings ago and Mr. Ames suggested meeting with Mr. Ensminger of the Ad Hoc Committee to discuss the Manager's Bond. Mr. Cameron noted he contacted Mr. Ensminger who said he had no problem with meeting relative to this issue. Mr. Ames stated Mr. Blomley was going to obtain information and arrange a telephone conference call with the insurance consultant and the Board in addition to obtaining some brochures. Discussion ensued. Mr. Cameron stated he will have all the information at the next Board meeting. Mr. Herlihy asked about _the_sale of the Seabrook Nuclear Power Plantand was unclear as to who this sales effects. Mr. Cameron explained that thirteen percent of that plant which was not sold is owned by MMWEC and due to the the financing it was not prudent for MMWEC to be included in that sale. Mr. Cameron continued, therefore the decision was made for MMWEC not to sell their portion of that plant. Discussion ensued. Regular Session Minutes November 7, 2002 Next Meeting Date Tuesday, November 26, 2002 Page Seven Executive Session Motion At 9:55 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 10:35 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. Hughes, Aye; 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. Philip B. Pacino, Secretary RMLD Board of Commissioners