Loading...
HomeMy WebLinkAbout2002-06-12 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners Joint Meeting RECEIVED Reading Finance Committee OWN T C L E RX Regular Session I E A D IN G, M A S 230 Ash Street Reading, MA 01867 Z 0Z JUL 0 All: 3 ! June 12, 2002 Start Time of Regular Session: 7:34 p.m. End Time of Regular Session: 11:05 p.m. Attendees: Commissioners: Messrs. Ames, Pacino, Hughes, Soli and Herlihy RMLD Staff: Mr. Cameron, Acting General Manager and Mr. Seldon Mses. Cavagnaro, Antonio, Parenteau and O'Leary Finance Committee: Mses. Epstein, Grimes, Mohr Messrs. Richard McDonald, Charles Robinson, James Francis, Robert LeLacheur CAB Members: Messrs. Lessard, Carakatsane, Corbett, Stevenin and Bartlett Selectmen Liaison: Mr. Cummings, Reading Board of Selectmen Mr. Veno, North Reading Board of Selectmen Guests: Mr. Hechenbleikner, Reading Town Manager This meeting is being video taped for distribution to the community television stations in Reading, North Reading, Wilmington and Lynnfield. Tapes of this meeting can be purchased from RCTV ($2 tape). Mr. McDonald, Chairman of the Finance Committee and Mr. Hughes, Chairman of the RMLD Board of Commissioners called the meeting to order at 7:34 p.m. During his opening, Mr. McDonald announced the reading and approval of the Finance Committee minutes to be waived until their next meeting in two weeks. Mr. Hughes thanked Mr. McDonald and welcomed the Finance Committee, RMLD staff, CAB members, Selectmen liaisons, Town Manager and Selectmen. Mr. Hughes stated he attended the Ad Hoc Committee Establishment Meeting last evening at the Reading Town Hall and had a few comments about the total attendance at that meeting. Mr. Hughes explained at a Selectmen's meeting it was discussed establishing an Ad Hoc Committee to examine the governance of the RMLD with a deadline date of June 7`h at 5:00 p.m. At the conclusion of last evening's meeting only two citizens had come forward; one appeared for interview and one was appointed. As Chairman of the Board it appeared to Mr. Hughes the ratepayers are satisfied with the measures, which have been implemented by the existing RMLD Board, stating as one Board member, he opposes any frtherance of an Ad Hoc Committee. Mr. Hughes further stated the staff at the RMLD has a primary job of providing power in a flawlessly managed department and should not be further involved in policy, procedures and management discussions. Mr. Hughes believes this is a tremendous misuse of management time and salaries. The RMLD needs to reattached itself to the energy and power distribution world bearing in mind the approaching summer heat problems which is always a challenging factor. Mr. Hughes asked the meeting members to talk to their Town Meeting members and have them voice their opinions with the discontinuance of this Ad Hoc Committee. As Mr. Hughes sees it, this Ad Hoc Committee will be established and will be a massive Town owned revenue producing affair which will encroach on a massive Town owned revenue producing business. In closing, Mr. Hughes pointed out if only one applicant appeared for interview, and not one person from over one hundred in attendance for the Route 128/93 discussion stayed on to listen to this agenda item. This should send a message to the Board of Selectmen. Mr. Hughes then announced the meeting members appointed to the Ad Hoc Committee which were Matt Cummings, Board of Selectmen Representative, Dan Ensminger, former Selectmen of the Town of Reading and a citizen volunteer and noted there are still four vacancies lacking for the citizen's volunteer. Mr. Hughes also informed the meeting members of the additional request from the IG Office on energy related consultants as stated in the newspapers. He then asked Mr. Cameron to give an update on this issue concerning the IG recent request. Joint RMLD Board of Commissioners and FINCOM Meeting June 12, 2002 Page Two Mr. Cameron, Acting General Manager, explained the Inspector General of Massachusetts sent him a letter with copies to Chairman Hughes, RMLD Board of Commissioners and Chairman Hines, Board of Selectmen and the Town Manager, Peter Hechenbleikner. The IG's office specifically asked for information concerning the RMLD contracting practices with respect to energy related consultants. Mr. Cameron stated he intends to comply with the request, stating the information is requested back to the IG by next Monday, June 17th. However he sent a letter to the IG asking for an extension on the delivery of the information until July 8`h. Mr. Cameron clarified the staff is compiling information although he will also have to contact former employees to see if they have any information concerning these consulting services which may take time. However, RMLD intends to cooperate with the IG for whatever they are requesting. Recommendation of the Citizen's Advisory Board relative to the Melanson Health reimbursement Mr. Hughes stated he was taking this agenda item out of order. This recommendation did not carry at the CAB meeting on 4 June and the RMLD Board of Commissioners tabled this from their meeting on 4 June in order for the full Commission to be present. Mr. Cameron stated he received a fax from Mr. Thomas Younger, North Reading Town Administrator. The fax was a letter addressed to Mr. Peter Hechenbleikner, the Town Manager of Reading stating the Board of Selectmen of the Town of North Reading hereby support proposing the Reading Municipal Light Department reimburse the Town of Reading $45,000 for the cost incurred regarding the Melanson Heath report. Mr. Hughes asked for discussion on this article. Mr. Ames began a discussion stating he votes against this transfer at this time, as he will not override the CAB although he understands the CAB has not voted to approve the transfer and notwithstanding the statement by the North Reading Selectmen. Mr. Ames further stated his vote is deeper than explaining there is still a Task Force working on issues brought forth by the IG and there is now another Committee in which Mr. Hughes mentioned the Selectmen have started up. As Mr. Ames continued, his stated his biggest problem with that Committee is that it has no representation by their Light Board and it bothers him. Mr. Ames thinks to deny Light Board representative on this Task Force opens the opportunity of all kinds of political disasters and it is a bad move. Mr. Ames is going to make any subsequent approval of transfer contingent of a no surprise outcome of the operations of that cormnittee. As Mr. Ames explained, he does not mean to say he is going to second guess the committee recommends but he wants to know what the committee is saying ahead of time and he wants to have the opportunity to discuss with the committee what it is they are planning to say to the Selectmen and Town Meeting. Mr. Ames stated he wants no undue negative publicity because there has been a lot of that and given Mr. Ensminger as a representative does not anticipated anymore problems in that regard. So, in this point in time, Mr. Ames stated he would vote no. Mr. Soli asked for an explanation of where the source of the funds to reimburse the Town would come from. Mr. Pacino explained the source of the funds is from the below the line payment. RMLD is allowed an eight percent return on their net plant and profit, it is where the "in lieu of tax" fund payments come from. Mr. Pacino further explained the RMLD would reappropriate $45,000 more to go to the Town. Mr. Soli stated what he understood from Mr. Pacino's explanation is the funds are like money which is a return on investment that does not go to the ratepayers. Mr. Pacino replied, "that is correct." Mr. Soli thanked Mr. Pacino for the explanation. Mr. Ames noted, however, that money is reserved for capital expansion and that is why the CAB has input. The CAB has comment on capital budget, expenditure and that is money within the Light Department which is used for plant facilities. Mr. Cameron asked if it is necessary to indicate within the Motion next year's return on investment calculation would not -include the extra $45,000 for the Melanson Health report since there is a formula that we use to determine the payment to the Town each year? Joint RMLD Board of Commissioners and FINCOM Meeting Page Three June 12, 2002 Recommendation of the Citizen's Advisory Board relative to the Melanson Health reimbursement Mr. Pacino's reply is it should not be a problem since we vote on what gets transferred each year. Mr. Cameron reminded Mr. Patin there have been no votes taken previously, there is a formula in place and the letter goes out to the members of the Committee of the payment to the Town, if there are no responses back from the members of the Committee then the payment goes forward. Further noting, the letter for this year has been out for two weeks and he has not heard anything back. Mr. Pacino stated he has no problem with attaching it to the Motion if it is something for the Fiscal Year 2002, or calendar year 2002 if that addresses Mr. Cameron's concern, however, he stated it is a non-issue. Mr. Herlihy wanted to assure people understand the RMLD is not taking money which is going to the Town. Mr. Pacino again explained what the bottom financial effectiveness is and the eight percent goes into two spots. Part of it is the determined investment to the Town, the other part of it is what gets reinvested back into the system and is used for capital improvement. The RMLD Board of Commissioners have jurisdiction as to what to do with those funds. Mr. Soli replied this was a hard vote for him, however, he decided he will be a literalist meaning Chapter 164, Section 56 does not show him how he can vote for this reimbursement. He stated he must vote no. Mr. Cummings stated the Board of Selectmen believes RMLD should reimburse the Town for the cost of the audit for a number of reasons: 1. The result of the Melanson Health Audit is a better source of policy making that will overall benefit the ratepayers than the audit undertaking by the RMLD; 2. Had the Department worked according to the policies it had set in and of itself, the results or the need for the audit would not have ever taken place. Mr. Cummings further explained although the final responsibility is the Town of Reading. The overall policy impact benefits the ratepayers as a whole. Mr. Cummings noted certain changes are made and will continue to be made based more on the Melanson Health Report than ever would be done by the Price Waterhouse Coopers report that the RMLD engaged in after knowing the auditors were engaged by the Town of Reading. Mr. Cummings continued, if one sat through the CAB meeting, the Town of North Reading Representative asked the CAB to reconsider their vote because the North Reading Representative did not vote the way his community thought he should have and whether the vote was 3 to 2 against it, the need to take into account the circumstances surrounding the whole thing is relevant. He continued, fundamentally the Board should do what is right which is to reimburse the Town of Reading for an expense they should not have had to incurred had the Board have been doing what they should have been doing initially. Mr. Veno introduced himself as a Board of Selectmen Town of North Reading and commented as the letter sent to Mr. Cameron states, North Reading fully endorses the payment of the report to the Town of Reading from the Light Department. Mr. Veno explained there was a miscommunication between the Board and CAB member and without placing any blame on who is at fault it was the intent from the Town of North Reading is to have that amount reimbursement to the Town of Reading for the report. Mr. Veno asked the RMLD Board of Commissions to do what is right and fair stating he is sure the situation has been taken care of and everyone is pleased with the outcome of the report. He believes the proper thing to do is for the RMLD to reimburse the Town of Reading. Mr. Ames stated he heard two different things. Mr. Ames heard Mr. Veno say that he believes the matter has been taken care of and should be put to an end but also heard Mr. Cummings say that the problem was the fault of the Board Members and the Board Members are still here. Mr. Ames continued to state, obviously this matter is not ready to be put to bed. When it is ready to be put to bed he will do so and if moving the transfer will end it he would do it but as long as there are matters pending he will leave them open. Mr. Cummings explained there are two fundamental issues and payment of the reimbursement of an audit to be tied to a Task Force set up to look at governance, which is a completely separate issue, is wrong and it is a misunderstanding. Mr. Pacino stated nomatter howthis votes goes, someone will be alienated, stating "there is no win-win in this vote. This is a lose-lose vote. Mr. Pacino commented it is time to move on to get back to the business of RMLD. He voted in favor of paying 145,000 to the Town of Reading as a way to mend fences, move on, and get back to business. Joint RMLD Board of Commissioners and FINCOM Meeting June 12, 2002 Page Four Recommendation of the Citizen's Advisory Board relative to the Melanson Health reimbursement Mr. Herlihy mentioned his concern of embarrassment to the Town of Reading stating people outside of the immediate area are not familiar with who the RMLD is, which communities are involved and which communities are not. It was a total embarrassment to the Town and the other communities involved did not share that embarrassment factor. Mr. Herlihy continued to say he believes the RMLD has a obligation to override the CAB when they do not vote in accordance with the views of the people they represent. As he stated, this is an example of a unique case here and as a Town Meeting member he knows how badly Reading needs this money with three straight years of DPW cuts and lay-offs of teachers, etc. Mr. Herlihy's vote is to support the transfer. Mr. McDonald commented the Finance Committee has always been in favor of the reimbursement by the Light Department because the audit was necessary and the Town agreed to put up the money to get it started. Further stating the Finance Committee was always under the impression it should be reimbursed. Mr. McDonald also stated he agreed it was time to move on, the audit is complete, changes have been made at the Light Department, some tightening up of the policies and it is time to settle up on the audit and move forward. After much discussion it was clarified it is absolutely legal for the Town of accept this transfer from the RMLD. Commissioner Pacino made a motion seconded by Commissioner Herlihy that the Reading Municipal Light Department transfer the amount of $45,000.00 from the unappropriated surplus to reimburse the Town of Reading for the Melanson Health Audit Report cost. Motion carried: 3:2:0 by a roll call vote of the Board of Commissioners. Messrs. Ames and Soli voted against the reimbursement. Presentation to the FINCOM on Power Supply, MMWEC, ENE and Outside Business Mr. Cameron began the presentation by introducing two senior energy analysts in the Energy Services Department, Mr. William Seldon and Ms. Jane Parenteau. Mr. Cameron stated the reason for this presentation was for the benefit of the FINCOM, who made the recommendation as questions were raised during a Task Force meeting. Mr. Cameron explained this presentation has a lot of information and questions were welcome at any time. Mr. Cameron described, utilizing an overhead slide the power supply that RMLD is faced with explaining the definition of power pool and NEPOOL is New England's power pool. Mr. Cameron then turned the presentation to Mr. Seldon and Ms. Parenteau. Mr. Seldon and Ms. Parenteau distributed handouts and described a detailed description about the process of buying power supply contracts, the unit cost of power, etc. They also explained what the history of the Massachusetts Municipal Wholesale Electric Company (MMWEC) and Energy New England (ENE) how they relate to RMLD. Discussion ensued with an informative question and answer period relative to the presentation and the business of power supply. Mr. Pacino suggested the RMLD and FINCOM meet at least annually which was well received by both groups. Mr. Hines thanked the Board of Commissioners and Mr. Cameron and his staff for an informative presentation in addition to thanking the RMLD for the reimbursement of the audit report. FINCOM adjourned meeting. Acting General Manager's Salary Mr. Pacino noted both he and Mr. Hughes met as a subcommittee relative to the Acting General Manager's salary increase and it is their recommendation that the Acting General Manager's salary be increased. Mr. Pacino stated Mr. Cameron's salary is presently at $114,000 per year, the former General Manager's salary was $140,000 per year so they came up with a figure somewhere in between of $120,000 per year. This increase is to recognize him for the job he has done in very trying times and the leadership he has given the Department in order to bring it forward and bring it back on track. Mr. Soli questioned when this salary increase will start. Mr. Cameron informed Mr. Soli the salary would go back to January 28, 2002 Joint RMLD Board of Commissioners and FINCOM Meeting June 12, 2002 Page Five Acting General Manager's Salary Mr. Hughes reiterated Mr. Cameron wore many hats during the time he has been Acting General Manager and he has assisted him in enabling the Commission and RMLD staff to get together to work as a family, a team and communicating together within the employees of the department. Mr. Hughes commented we now have to trust each other, communicate to each other and it is not an easy thing to do, in fact there is still a few skeletons out there who are still hesitant. Mr. Hughes again stated his endorsement of Mr. Cameron's salary increase. Commissioner Pacino made a motion seconded by Commissioner Ames that the Reading Municipal Light Department increase the Acting General Manager's salary to $120,000 per year from $114,000 per year. This amount should be retroactive back to January 28, 2002 when Mr. Cameron began covering the role of Acting General Manager. Motion carried by a show of hands 4:1:0. Mr. Herlihy voted against. Replace Commissioner Ames as signer on Payable Warrants Subcommittee Mr. Pacino informed the Commission about this agenda item being tabled from the last meeting due to Mr. Ames not being present. Mr. Pacino then asked Mr. Ames what he proposes. Mr. Ames stated the difficulty he has signing the warrants and explained the warrant signing process seems unmanageable because of all the paperwork required. Mr. Ames offered some suggestions which included breaking the warrant items up into those that are approved by multiple internal managers by RMLD and/or those that are driven by contract but in any one weekly warrant there are two or three items that would be a concern to a Commissioner and the rest are standard boiler plate. Mr. Ames stated he would be happy to go back to doing payables as long as it is understood that they will be isolated in parts that are of concern to Commissioners and the rest of it simply signature verification. Or, some other division strategy up to, and including Mr. Soli's approval, and that probably should be part of it. Mr. Ames stated he finds it to be an undefined process based on principles he does not fully understand. Mr. Ames said he did what he thought he was supposed to do which is signing the warrants. Mr. Pacino informed the Commission he and Mr. Hughes discussed this issue as a subcommittee and could not come up with any objective criteria basically, it just comes down to whether individual Commissioners like or do not like what they see in the warrant. Discussion ensued, It was decided that Mr. Hughes, Mr. Soli and Mr. Herlihy would be the primary signers of the Account Payable Warrants and Mr. Herlihy would be the primary signer for payroll. Mr. Pacino is the primary back-up for both payables and payroll and Mr. Ames is secondary back-up of payables and payroll. Next Meeting Date The next RMLD Board of Commissioners meeting is scheduled for Monday, July 8"' at 7:30 p.m. Motion to Adjourn At 11:05 p.m., Mr. Pacino made a motion seconded by Mr. Ames to adjourn the Regular Session. Motion carried by a show of hands 5:0:0. A true copy of the RMLD Board of Commissioners minutes as approved by a majority of the Commission. Mr. Philip B. Pacino Secretary, RMLD Board of Commissioners