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HomeMy WebLinkAbout2002-10-28 ad Hoc - RMLD Governance Advisory Committee MinutesC'EIV D Ad Hoc RMLD Governance Advisory Committee Meeting G, M A S S. October 28, 2002 Z016 AI -08 A H: 3 The meeting convened at 7:30 p.m. in the Town Hall Conference Room, 16 Lowell Street, Reading, Massachusetts. Present were Chairman Dan Ensminger, Members Travis Miller, Doug Cowell, George Theophanis and John Carpenter, Selectman Matthew Cummings and Finance Committee Member Jim Francis. Also present were Town Manager Peter Hechenbleikner, Town Counsel John Langsam and the following list of interested parties: Phil Pacino, Bill Hughes, Tony Butler. Dan Ensminger noted that last Thursday he and John Carpenter attended the Reading Municipal Light Board Meeting. There is concern that the recommendations of the Advisory Committee might violate the 20 Year Agreement or 85-121. They will ask Town Counsel for review on this. The recommendations of the Advisory Committee are on the Board of Selectmen's Agenda for tomorrow. The most likely timing for a final set of recommendations will be mid-December. Dan Ensminger recommended that the Advisory Committee stay constituted at least through Town Meeting. The CAB is meeting in Wilmington on Wednesday. Town Counsel Joan Langsam reviewed the draft recommendations. Travis Miller asked what, in broad terms, can be done to the Charter. Town Counsel noted that if what is being proposed varies from the general law, that would need a special legislation. If it would amend what is in the Charter, that would be a Charter amendment. For example, if the Light Board was changed, it may be a general law and Charter change. If the duties of the General Manager changed, that might be a special act. Doug Cowell asked if there was special legislation, would that be difficult. The Town Manager noted that special acts are done fairly often and the process of special acts should not be difficult. Joan Langsam noted that with regard to the 20 Year Agreement, she sees nothing proposed that would cause a problem. With regard to changing the accounting calendar, that should be given to the CAB for their 30 day review. Phil Pacino noted that the other communities have contacted the CAB and the Light Board to express concern. 80% of the power distributed is outside of Reading. 14 years ago, the RMLD was run as the Reading Light Department. The Wilmington Chamber of Commerce brought suit and Wilmington took two votes to leave the system. The 20 Year Agreement was the result. The risk to making some of the changes is that Wilmington could again vote to leave the Light Department. The 20 Year Agreement passed in other communities withdraws, that would leave the Town of Reading with those RMLD Governance Advisory Committee Meeting - October 28, 2002 - Page 2 contracts. The issues that would be a concern are the change in the role of the CAB, change in the Fiscal Year, and changing the CAB by eliminating the role of the CAB. Phil Pacino recommended that the Advisory Committee not do anything that would alienate the outside towns. They could walk at any time and the legal cost could be huge. If there is no confidence by the Town of Reading in the Commission, he is willing to accept term limits. He would be interested in the instructions regarding the General Manager's contract. If the Town wants the current Commission to step aside, he would be willing to do so. Joan Langsam noted that the Agreement is in place unless there is a default. There is nothing being proposed that would change the CAB. With regard to the accounting methodology, she will take a look but does not think that there is anything with regard to change in the fiscal year that would trigger a default. The 20 Year Agreement stays in place unless there is a default and notice of default. Phil Pacino noted that if there is a breach of terms, then there is a question of damages. He has been told that Lynnfield's Town Counsel feels that this set of proposals would violate the 20 Year Agreement. He urged the Advisory Committee to be sensitive to the outside towns concerns. We have a well run department and need not damage that. Dan Ensminger noted that he and the Advisory Committee are not interested in violating any of the contractual terms. Jim Francis wondered how changing the fiscal year would breach the agreement. Dan Ensminger felt that their fears being expressed, there is nothing to fear. The Advisory Committee will be going out to the other towns to explain their proposals. Jim Francis noted that he does not have the feeling that there is no confidence in the Board. His concern is about the structure. He feels that Wilmington is very happy with the cost and service from the Reading Municipal Light Department. They signed a 20 Year Agreement and renewed it a couple of years ago. All the towns voted to renew it. The Advisory Committee is not talking about individuals - they are talking about structure of the Light Department. Phil Pacino noted that it was important that the Advisory Committee is willing to listen to what the outside towns have to say. He is not 100% sure that we will ever reach a point where the problems outlined by the Inspector General could not happen again. Travis Miller noted that the outside towns do not have a vote now. Phil Pacino noted that the outside towns could buy a seat on the Light Board, and the Town of Reading would be foolish not to do this. Doug Cowell felt that there was misinformation about what the Advisory Committee has facts are that the Advisory Committee is not recommending changes to the CAB, and the RMLD Governance Advisory Committee Meeting - October 28, 2002 - Page 3 Advisory Committee is standing behind the 20 Year Agreement. The system has been in place for 106 years, and it is time to create the very best that we can for the Light Department. This is necessary so that the Light Department can go back to its basic provision of service. We are all here because of a major foul up of individuals. There is a major problem with the organizational structure and culture. Why would we not want a more efficient, better run department with lower rates. Phil Pacino indicated that we should try to keep politics out of this process. John Carpenter noted that he appreciates what Phil Pacino said about a closed process. In the past five years, the Light Department has drifted. Their attitude was that they were not answerable to the Town of Reading. There was a break in faith the Light Department felt that they could do what they wanted, and that they are their own enterprise. There was an opportunistic General Manager. There is now an underacted organization following its own guidelines, and not following proper professional practice and Town guidelines. The Annual Reports do not include any financial information. The employees have worked hard to keep up the service in spite of senior management. There is a loss of confidence beginning when the Inspector General's report was filed. There is a crisis in confidence. The Light Department needs to move towards more openness and visibility. The Advisory Committee by consensus agreed to hold delivery of the report to the Board of Selectmen. The Advisory Committee focused on several key areas: Elected versus - appointed board concerns were with an elected board, it was difficult to make informed choices. The expertise needed on this board is somewhat technical and the elected process might not be the best way to get the best people. Matthew Cummings indicated that the Advisory Committee is trying to set up a system of checks and balances. There is an enormous amount of work expected of the Town Manager. To pile on another significant amount of responsibility would take resources away from other Town issues that _ need to be addressed. George Theophanis agreed especially since the Light Department needs to work with the other towns. Dan Ensminger noted that the presentations last week showed an integrated system where the Light Department is part of the Town. Matthew Cummings noted that 80% of the sales are outside the community. In many situations, the responsibility for the Light Department should be part of the community but perhaps not where the bulk of the sales are to outside communities. George Theophanis noted that he would go with a special legislation or contract to control the authority of the General Manager. He suggested not using gimmicks to get around the law. Doug Cowell was concerned about the power of Chapter 164. The Board of Selectmen RMLD Governance Advisory Committee Meeting - October 28, 2002 - Page 4 Manager. One person would be accountable. There would be efficiencies in operation in the department. Dan Ensminger asked what safeguards there would be. Matthew Cummings noted that if the General Manager is not performing, the Board could fire him. The core problem is that there are no policies in place to regulate the General Manager. George Theophanis didn't know that there were not valid policies in place and they should go in the report. Joan Langsam noted that special legislation could be prepared to accomplish that. John Carpenter noted that due to the former General Manager's "outside" activities, it is clear that the Light Department does not need a full-time General Manager. Travis Miller noted that he would not anticipate a reduction in staff but a shift in responsibilities. Bill Hughes noted that in hiring a General Manager, there are issues of outside involvement. Jim Francis felt that the Light Department and the General Manager should adhere to the policies of the Town. Travis Miller noted that it is a department of the Town, and the type of structure being considered is done all over the country. t Doug Cowell noted that he is impressed with the Danvers model where the General Manager of the Light Department is Division Head of the Department of Public Works. He indicated that he is shocked by the power of Chapter 164 in the authority given to the General Manager. George Theophanis noted that the action of the former General Manager is part of the problem but it is systematic of the problem of poor structure. Special legislation is needed to get around Chapter 164. Bill Hughes indicated that the School Department is also run as an independent organization. John Carpenter noted that the School Department is part of an outside consortium. The Fire Department uses mutual aid. Police have NEMLEC and the Library has NOBLE. All departments of the Town deal with parties outside the Town of Reading. Dan Ensminger felt that we needed to get input from the Board of Selectmen. He does want to take it to a strict vote at their next meeting. Doug Cowell asked how much time would be involved. RMLD Governance Advisory Committee Meeting - October 28, 2002 - Page 5 Phil Pacino noted that with regard to Chapter 164 and special legislation, he discussed this with DTE. He indicated that we should be careful because investor owned utilities are waiting to "pounce." John Carpenter noted that due to scandals uncovered by the Inspector General's Office, if Chapter 164 is opened up statewide, he wondered what the effect would be on the 20 Year Agreement. With regard to a contract for the General Manager, John Carpenter noted that if there is a separate General Manager and there is a decision to delineate authority with the contract, could the General Manager sign away his authority. Town Counsel felt that he could not. Matthew Cummings noted that some things need to be changed in Chapter 164. Specifically, the authority to hire legal counsel, professional services and auditor need to rest with somebody other than the General Manager. Additionally, it should be specified that the General Manager has to post a bond. Tony Butler asked if the Town Manager can post a bond. With regard to financial organization, John Carpenter felt that if there is a separation, it makes the financial management more visible. Matthew Cummings felt that there needs to be an independence of the financial operation. If it is combined, that could be a problem. The Town has allocated more and more of water/sewer funds to make up the Town budget shortfalls. Other communities would have an issue of whether the Town of Reading would be doing that for the Light Department. Doug Cowell noted that he was interested in efficiency. An Accounting Manager hired by the Board of Selectmen with input from the Light Board and the CAB may be appropriate. George Theophanis felt that if we mingled the Town's finances with the Light Department's finances, that could be the "kiss of death." Travis Miller feels that the Town of Reading has lack of control of finances of a major department of the Town of Reading and that is a problem. Matthew Cummings felt that the Reading Municipal Light Board should make a presentation to Town Meeting and/or the Finance Committee. Human Resources issues should involve the Town Manager and the Town's Human Resources Administrator. Doug Cowell felt that we should not intermingle funds but keep control. John Carpenter felt that the CAB would scrutinize all the financial matters. RMLD Governance Advisory Committee Meeting - October 28, 2002 - Page 6 Matthew Cummings felt that would then abdicate the authority of the Light Board to the i CAB. Doug Cowell felt that was the CAB's job. Travis Miller felt that was what the audit does. Phil Pacino reminded the Advisory Committee that 85-121 was a rate payer suit. Doug Cowell noted that all rate payers were paying for the excesses of the former General Manager. He would like to reduce the potential for the above through improved visibility. Jim Francis noted that the strongest critic of the previous direction is a member of the Board of Selectmen. Travis Miller noted that it is not the Advisory Committee's responsibility to negotiate for other parties. It is to put forward the best ideas. Matthew Cummings noted that if the Board of Selectmen appoints the Light Board and the General Manager, then the Board of Selectmen will feel responsible for what happens at the Light Department. He feels that is asking too much and investing too much authority in the Board of Selectmen. Bill Hughes referred the Advisory Committee to the October 24th Chronicle article. John Carpenter noted that the Advisory Committee's recommendation represented a shift in locus of power and a change in past practice. Travis Miller noted that one option is to have an elected board with the Town Manager as the General Manager. Doug Cowell noted that the Town Manager as the General Manager reduces the confusion. It would place most of the workload on the Operating Manager. There may be some savings in cost. Jim Francis felt that there would be no savings - it is the same position. George Theophanis felt that it may make the job less attractive. Matthew Cummings noted that the fundamental problem was that the former General Manager consolidated his power, and the elected board allowed it to happen. The Advisory Committee went through the remainder of the items in the 10/27 report. On motion by Francis seconded by Carpenter, the RMLD Governance Advisory Committee voted to adjourn their meeting of October 28, 2002 at 11:15 p.m. es ectf l