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HomeMy WebLinkAbout2002-05-28 RMLD Board of Commissioners MinutesReading Municipal Light Board of Commissioners Joint Meeting with Reading Board of Selectmen Selectmen's Conference Room ' Reading Town Hall 16 Lowell Street Reading, MA 01867 May 28, 2002 Start time of Regular Meeting: 7:42 p.m. End time of Regular Meeting: 8:55 p.m. Attendees: Commissioners: Messrs. Ames, Pacino, Hughes, Soli, and Herlihy RMLD Staff: Mr. Cameron, Acting General Manager Selectmen: Messrs. Hines, Cummings and Schubert Mses. Anthony and Wood CAB Members: Messrs. Lessard, Carakatsane, and Corbett Selectmen Liaison: Mr. Veno, North Reading Board of Selectmen RMLD Employees: Messrs. Butler and Donahoe F-CEIVED TOWN CLERK R'7 DING, MASS.'_' 1OO1 JUL 10 A 11: If- 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. Hines, Chairman of the Reading Board of Selectmen, and Mr. Hughes, Chairman of the RMLD Board of Commissioners, both called the meeting to order at 7:42 p.m. Mr. Hines opened the meeting by explaining this was a result of a follow-up meeting he and Mr. Hughes had after the last Task Force meeting in order to discuss the Selectmen's and Light Board's concerns, to hear the actions being taken by the Light Board and to discuss an Ad Hoc Advisory Committee the Selectmen are proposing. This Ad Hoc Committee is being proposed in order to explore different options for governance for the Light Board and hear other options for the current governance models that the Town of Reading Charter has in place. At this point, Mr. Hines asked Mr. Schubert to explain the policy. Mr. Schubert explained the goal of this policy would be to set up an Ad Hoc Advisory Committee to look at the governance of the Reading Municipal Light Department, also known as the "Committee", to advise the Board of Selectmen on what, if any, changes should be made to the governance of the RMLD. Also its goals is to ensure continued high quality of service, to fair community standards of business, the ability to afford measures that reinforce a commitment to the Town of Reading and the communities they serve. The work effort has been broken into basically four areas, i.e., 1. Review and understand the existing structure of the RMLD including the roles and responsibilities of the Light Board, General Manager, Accounting Manager, senior staff and the Citizen's Advisory Board (CAB). 2. Review and understand the laws and regulations surrounding the Municipal Light Department of the Commonwealth of Massachusetts, including state and federal law, the Reading Home Rule Charter and the agency rules and regulations that effect municipal light departments as to their governing structure. Mr. Hines emphasized this is on the governance, not the details of the power purchases, rate setting or those sort of things. 3. Review existing models of governance keeping in mind the size of the community, different models of governance, multi- municipal service areas, size of the service area proximity to Reading, etc. The suggestion is that the Committee at least look at the models available in Taunton-which is a large multi municipal department, Peabody-which is a large multi municipal department; Chicopee-which is a large department; Westfield-which is a large department; Braintree-which is large department; and Danvers- which is a large department and fairly local; and potentially Holden. 4. Develop one or more options for future governance for RMLD with advantages and disadvantages to each. It would be the intent to have the Ad Hoc Committee report back to the Board of Selectmen at key junctions but not less often than dealing with each of those areas, utilize all the resources at its disposal including Town Counsel, State Agencies and Officials, Town senior staff, RMLD staff, CAB, the representatives of the other communities served by the RMLD, representatives of other municipal light departments and their staff and officials and all others who may contribute to the process. The Town Managers will assign a liaison from the Town staff to the Committee, which is standard item for the Committee andshall fall under the Department of Community Services for organizational purposes, that is for the standard organizational issue and a final report will be complete by September 15, 2002, if possible, in order for the results to be available before the closing of the warrant of the 2002 subsequent Town meeting. The alternative, if the work of the Committee cannot be done by September 15, 2002, the Board of Selectmen may establish a later date for the final report and may consider calling a Special Town Meeting to address any issues recommended by the Committee. Joint RMLD Board of Commissioners/Reading Board of Selectmen May 28, 2002 Page Two Mr. Schubert further explained the Committee would be made up of seven members, one would be a member of the Board of Selectmen, appointed by the Board, one would be a member of the Finance Committee, appointed by the Finance Committee, and five other members, appointed by the Board of Selectmen, and the Board of Selectmen would appoint their Chair. It is a fairly standard Ad Hoc Committee, as the Board has established in the past. Mr. Hines stated Mr. Schubert has described a proposed plan but the Board of Selectmen are obviously open to comments and suggestions. Mr. Hines further stated this proposal came about as a result of the recent issues which arose out of the IG Report and some concerns of other members of the Board of Selectmen and the public. Mr. Hines then asked for comments. Mr. Hughes introduced himself as Chairman of the Reading Municipal Light Board and stated he met with the Chairman of the Reading Board of Selectmen two weeks ago. They met to establish a dialogue of communication between the two Boards which was previously tempered. Mr. Hughes further stated he was upset and perplexed with the agenda discussion items proposed by the Selectmen because the Board of Selectmen and Town Counsel have brought this item to the agenda syllabus, however, he was under the impression this discussion was going to be a five person/five person joint meeting, nothing that would propose an Ad Hoc Committee to be established. Mr. Hughes stated he was never told about an Ad Hoc Committee being established, nor has any other RMLD staff members or fellow board members. RMLD Board of Commissioners learned about it from reading the agenda on Friday. As the Board Chairman Mr. Hughes asked, "under what authorization, Town Charter, or state rules, regulations, the authority is given to establish an Ad Hoc Committee, as is proposed in this evening's agenda?" Mr. Hines replied it is in the Charter and the Board of Selectmen can form various committees to look into different topics under the Charter. Mr. Hines also reminded Mr. Hughes the Board of Selectmen had some discussions along this line and subsequently the consensus of the Board of Selectmen was to go ahead and proceed. Mr. Hughes then went into a little background of the RMLD stating the RMLD is the single largest municipal electric utility in the Northeast with annual revenues of seventy million dollars, which the Town of Reading is receiving almost two million dollars annually. The RMLD is a franchise responsibility by statute to serve electricity in the Town of Reading, Wilmington, North Reading and Lynnfield. The Board of Commissioners of the RMLD are voted in their positions by the voters of the Town of Reading. The Commission has the responsibility to oversee the General Manager and set policy for the RMLD. The Commissioners also have a responsibility to act in the best interest of all the ratepayers in the four towns. Recent actions and the employees which created the problem with respect to the Inspector General's Report are gone. The RMLD is presently examining all its policies and the Commissioners are participating in this effort. The credit cards are gone, the Acting General Manager has implemented an Exception Sheet Process by which any payable being questioned by the Account Service Manager would be reported directly to the RMLD Board. This is a process which did not exist with the prior management so it is one of the immediate stop gaps activated. The Accounting Services Manager has been in contact with the Town Accountant about reporting responsibilities to the Selectmen and the Town Manager with respect to the payables. The Town Manager stated the payables have all the back up required. The question of originals will be cleared up with a letter from Nelson, Adam & Dickson, P.C. (NAD). The RMLD has responded to all of the Town's requests for further explanation of certain payables. The Town is creating an Ad Hoc Committee while RMLD is in need of restructuring including selecting a permanent General Manager. The Board cannot wait until the Town completes its review until September. It will take anywhere from four to six months to get a person on board to become a permanent General Manager, there is a need for one now, or at least to go out soliciting interviews waiting on the outcome of the review. Mr. Hughes asked the Board of Selectmen if there have been many calls received as to the dissatisfaction of the changes that have been implemented during the present running of the RMLD since the IG Report, or the forensic report? Mr. Hines replied, "Not since the changes were made, i.e., eliminating credit cards, etc. there has been positive feedback." Mr. Hines further replied, however, the RMLD Board is responsible for overseeing the General Manager and it did not happen and so the comments the Board of Selectmen were hearing were geared as to how to make sure oversight is there in the future. Discussion ensued. Mr. Hines commented it may well be the outcome of this Ad Hoc Committee's analysis would be they recommend no change at all, there is no predetermined outcome, at least not on his part and he does not think there is on any other Board of Selectmen's part, he does however think it is worthy of an objective analysis. Mr. Hughes stated the importance of advertising for a General Manager and the need to go forward with a search. Mr. Hughes informed the Board of Selectmen where the advertisements will take place, etc. Joint RMLD Board of Commissioners/Reading Board of Selectmen May 28, 2002 Page Three Mr. Hines stated it is certainly within the Board of Commissioners authority to go ahead with a search, however, suggested that a Search Committee be established with members other than RMLD Board members. Mr. Hughes assured Mr. Hines he has already started a Search Committee and commented about that the Twenty Year Agreement with the Towns asking if this is impacted by this Committee? Mr. Hines replied he asked Town Counsel to become familiar with this Agreement to avoid potential impacts to those agreements. Mr. Hughes stated these Agreements are FERC controlled and administered as part of language going into the Twenty Year Agreement. RMLD also has the DTE up on the hill, in the Commonwealth of Boston who oversee situations and clearly knows this has been a goal of some of the folks here within the Town to have control of the RMLD but once again the Board of Commissioners have addressed the problems, established measures to prevent a future recurrence and with a new qualified General Manager on board within six months or earlier, Mr. Hughes will assure Mr. Hines corrective measures will be in place and will address previous mismanagement. If Mr. Hughes cannot accomplish this task through the support of an outstanding RMLD staff and the cooperation of the RMLD Board, the CAB, the Board of Selectmen and other Boards of the Towns or supporting departments then he assured Mr. Hines he would consider stepping down from over twenty-five years of volunteer service to Town government and the community. Mr. Hughes further stated since the 1 April, he spent two hours daily in the morning sitting down with the Acting General Manager working arduously to ensure this great department is back to professional and morale high state stating he spent two or three nights drafting material and plans to discuss with the Acting General Manager, and he also works on some of the weekends reviewing materials and developing plans for implementation. Mr. Hughes received many comments from ratepayers saying they realized RMLD had a problem, the problem was exposed and the measures which have been put into place, even as recent as yesterday at the parade. Mr. Hughes then thanked the Board of Selectmen. Mr. Cummings stated it is important for everyone to understand this is not about individuals, certainly not the Light Board of Commissioners, its about a relationship, a governance relationship about the Town and the Light Department and as time passes there are always reasons or opportunities where those relationships should be re-examined and evaluated to see if changes need to be made, maybe changes do not need to be made, but a lot of information could be pulled from such a Task Force even as far as educating Town Meeting. There are a lot of questions, people do not understand the relationship. The intention is not to focus on people, it is to focus on the relationship between the two bodies. Mr. Hughes asked people please bear with RMLD, this brick wall took fifteen years of instrumentation so it will be slow to chip away at even with the help of all the other Boards, opinions and studies. Mr. Pacino, Secretary of the RMLD Board of Commissioners, commented on the culture of RMLD and stated the RMLD delivers the lowest rates in the Commonwealth of Massachusetts. He further stated, "as many problems as Mr. Rucker had, please remember he hired a lot of good people, there are a lot of good people that work down in that department. Mr. Cameron is just as much responsible for those low rates as anyone, they do a lot of good work down there." Mr. Pacino also agreed with Mr. Hughes on how important it is to get a good General Manager on board as quickly as possible. Mr. Ames commented there has been policy decisions made which probably led to the situation the IG report called up. However, those were conscience decisions that were made. Explaining the environment which led to them as he went back a few years to 85-121, recalling the Town of Wilmington. In one fell swoop forty percent of customer rates were potentially gone, the situation got reversed, partly because the policies put in place were done to bring about that reserve. He further explained the deregulation issue, stating deregulation threatened RMLD and had all involved lying awake at night figuring out how to stop it. Some of the policies were put in place were done so to address deregulation. Further stating he did not claim it was not done perfectly, it was not but the Department delivers a good product, it has excellent people and overall have done a reasonable job. Mr. Ames stated if the Town wants to investigate it, okay there is some investigation that is warranted but advised the Town to tread cautiously because as Mr. Pacino emphasizes this is a unique situation, there is no municipal utility in all the United States which has majority of its load outside of its owning town. As he continued, that represents a very interesting promise because for the Town this is nothing more than business. This is not a Town department, this is business and the Town needs to think about how that business is managed from a standpoint of the customers, not by the standpoint of the people in the Town who have feelings about it, who are entitled to have those feelings, but when push comes to shove its how the customer reacts to the business that determines whether it sinks or swims. It was the RMLD's attempt to adhere to that orientation, which in part led to where we are here and now but those were conscience decisions and can be reserved as they were made in the first place. Joint RMLD Board of Commissioners/Reading Board of Selectmen Page Four May 28, 2002 Mr. Ames made a comment he read all the IG reports, has done a lot of soul searching as he was Chair at the time and can honestly say if management wants to run amuck, there is very little any Board can do about it so most of what led to the IG Report although he is not happy and is uncomfortable with it, does not think the Board was directly responsible for it, nor does he think it was a governance failure that led to a culture failure which led to a management failure. Mr. Ames is convinced at this point it was a management failure. First and foremost, if the Board had better oversight, it would have been caught sooner and what would it have produced, who can say? Finally, much of what happened had an underlying policy underneath it but that policy was a result of the Board of Commissioner's recognition of how completely unique RMLD is and again advised the Town to go very cautiously of any areas of review or investigation because there are perilous situations. Mr. Hines stated while the RMLD is a business and somewhat unique compared to other Town Departments, it is a Town Department, it is owned by the voters of Reading and they are the stockholders, if you will. There needs to get the balance right between operating the Department as a business within the municipal environment and thinks a lot of people would agree the contract of the General Manager is one example that would not be viewed as a municipal contract. Mr. Ames agreed. Mr. Cummings stated he wanted to reiterate a word of caution stating he does not want to make a situation less favorable for the Town, whatever the outcome is and he thinks the intention is to look at some options and understand in fact to proceed cautiously, if at all. He stated the importance of understanding all the implications and he is not in favor of any type of risk to change just for the sake of change. He also thinks if any change is to occur it has to be for the true benefit to the Town, to the Department and to the customers, otherwise we risk making the situation worse. Ms. Anthony stated the members of the RMLD Board of Commissioners and the Light Department has to be responsive to the other communities as customers, and questioned would not the other Towns feel that they would be served better as a customer base if they knew that it was a well-run management team at the helm? And, by being careful, it means the RMLD has these other communities but do they not anticipate as a business it is being well management? - " Mr. Ames said there are some distinctions because not everyone agrees with the definition of good management. Good management used to be perceived as tight procedures and tight processes and it meant that if you came to RMLD and you wanted a new service installed you had to fill out a form, show three pieces of identification, two letters of credit and ninety-six hours later you might have a service and that was considered good management. However, it did not make customers happy. Now, you can call on the phone and get the service in about three hours and they do not ask all the searching questions about whether the customer can pay, its just quick service. So, which is the better management? He stated he would agree better management is the one which provides the highest level of customer satisfaction. Mr. Ames also stated he sat on the Board when we had not been as respectful of the Wilmington Selectmen. The Wilmington Selectmen actually had some serious complaints as customers and it was not a matter of management because the management was doing what it was told to do and the Board was following policies as it thought it was suppose to do, but at a customer level it was not working and it is what they wanted to convey, they were not happy and the Board did not want to hear it. Mr. Schubert said he does not know what the best scenario is or what the best form of governance is but it is up to the Board of Selectmen to create the opportunity for the citizens, the taxpayers of this Town, to have a chance to look at it and see if there is anything they feel is better than the current situation or if the current situation is the way they want it to be. There are a lot of times the Selectmen don't really make the decisions, but just provide the opportunities for the voters of this Town to decide on any issues. As he explained, he sees it as more of that, the Selectmen has the opportunity to give the taxpayers, the voters of this Town an opportunity to reevaluate the governance and make changes if necessary or keep it the same. Mr. Schubert stated he thinks it weighs heaviest because as a representative of the residents, citizen of this Town, the Selectmen are the people that afford them a chance to review this relationship and so as a Selectmen you would understand where you have that same relationship with your citizens where you provide the opportunity to weigh in on issues which affect the whole community. Mr. Veno stated he certainly has no problem with citizens of any Town conveying to the Board of Selectmen. He explained, the current situation is not what it was two months ago, it is a new situation and he believes it is a situation which is going to clear itself up because as the situation has ended, the problem is over. Mr. Veno further stated he would not preclude any resident from - any Town from speaking their peace or their mind, but would hope the Selectmen would look at the fact the problem is gone. Mr. Veno also stated a new General Manager is going to walk on egg shells, no matter where he comes from because he will certainly siow what has happened here Joint RMLD Board of Commissioners/Reading Board of Selectmen May 28, 2002 Page Five Mr. Hughes stated having sat the past six months on the Board he cannot remember one hostile ratepayer coming down to the meetings. Mr. Hughes has received no phone calls nor has other members of the Board. He would say the public is satisfied in the way the adjustments have been made and cannot see opening up or establishing an Ad Hoc Committee, or another Committee, because the citizens are satisfied with the changes the Department has put into place. Mr. Hughes explained for almost over half a year, the Board has done very little concerning electricity but has been devoted to these forensic reports, investigations, etc. even as late as today with this Ad Hoc Committee. The RMLD must get down to keeping this business going, electricity, contracts, other business agreements, the staff at the Department want to get on they want to get beyond the skeletons, these shadows and by hearing of another Ad Hoc Committee, they do not want to think about another five more months of producing this document or producing this ledger. Mr. Hughes noted the Executive Assistant and her assistant here had to devote time to produce these documents, etc. and its not as if we would not do it, we do it, but it distracts from their main job description so give us a chance and consideration we are on a new track to right this ship to make it the way it was fourteen years ago. Mr. Hines thanked everyone for their feedback and stated the Selectmen will be taking up this policy at the next meeting on June 11, 2002. And, if this policy is adopted and people are interested in serving they should inform the Town Clerk's office. Mr. Hughes asked if this would be a joint decision, if this policy is instituted by both Boards, or just the Board of Selectmen. Mr. Hines stated it would be a Selectmen's decision but are certainly open to comments or suggestions on the Policy. To reiterate it is not another investigation, it is a review and limited to governance, not on the business operations of the Light Department. Joint Meeting Adjourned at 8:55 p.m. 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