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HomeMy WebLinkAbout2002-10-21 ad Hoc - RMLD Governance Advisory Committee MinutesAd Hoc RMLD Governance Advisor Committee Meetin '4 Advisory g _.rx,~~s~'G. MASS. October 21, 2002 Z03tTR--S A$1:3~ 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 John Carpenter, Doug Cowell, Jim Francis and Travis Miller. Also present were Town Manager Peter Hechenbleikner, Danvers Town Manager Wayne Marquis, Danvers Light Department Operating Manager Coleen Pitts, Concord Town Manager Chris Whelan, and RMLD employees Tony Butler, Vinnie Cameron and Paula O'Leary. Interview Representatives from other Light Departments - Chairman Dan Ensminger welcomed the guests. Wayne Marquis and Coleen Pitts talked about the manner of operation of the Light Department in Danvers. Danvers is the oldest Municipal Light Department in the Commonwealth. The Town Manager Act was formed in 1950. Since 1983, the Light Department has been a division of the Department of Public Works. Mr. Marquis handed out copies of the organizational chart of the Department and the Light Division. All employees follow all Town policies and procedures. The Town Accountant serves as the Business Manager for the Light Division. The Light Division has been on both the calendar year and the fiscal year basis, and they find the calendar year basis easier because of State reports. The same auditor, Melanson Heath, is the auditor for the Town and the Light Department. The Town Manager hires the auditor. Portions of salaries are allocated to the utilities. There are three unions that cover members of the Light Division. One is the lineman which is exclusively for the Light Division. Two others are for clerical and professionals and cover clerical and professional employees in all departments of the town including the Light Division. The Town pays energy charges only for street lights. The Light Division does traffic light maintenance. The GIS program for the entire town is through the Light Department. They are going to the Arcview system. Chris Whelan explained the Light Department set up in Concord. The Light Department was founded in 1897. The Town Manager Act was approved in Concord in 1956. The Light Department is a separate department. As in Danvers, the Town Manager is the General Manager of the Light Department. Danvers has a Light Plant Supervisor who runs the day to day operations. A Light Board of five members is appointed by the Town Manager. He has delegated to them several items including the setting of rates. They use the same auditor for the Light Department as for the town and are on a calendar year basis. The Light Department is on an enterprise basis and is self supporting. They have entered into a seven year all requirements contract for power purchase at five cents per kilowatt hour. In Concord, they put together an expense projection which is adopted at a Light Board Meeting. The budget is presented to Town Meeting and Town Meeting votes to authorize the General Manager to expend receipts of the Light Department. They use Town Counsel" for most purposes but have Special Counsel for things like rates national policy, etc. The Light Department runs the GIS Program and the fiber optics RMLD Governance Advisory Committee Meeting - October 21, 2002 - Page 2 network for the town. They have a web-based GIS system. There is no union in Concord. Wages and benefits are equal between the Light Department and the town. The challenge is to pay line workers what you need to attract to retain them. They take care of the street lighting and the town pays the energy cost for street lighting. All purchases for the Light Department comply with Chapter 30B. All interest earnings are apportioned to the enterprise system. All costs are apportioned to the enterprise system. Out of state travel must be approved by the Town Manager. Concord is undertaking progressive undergrounding of wire - eventually all wires in Concord will be underground. They are coordinating this with the Department of Public Works. Danvers does not have any "outside businesses" other than their "dusk to dawn" program for private street lights. They do not do cable or internet access - they have done a study and found it to be financially risky. Concord is doing a study - it will probably do internet access and cable TV. They currently do not have Broadband internet access available in the community. Both towns pay energy costs only for street lights. Reading pays full cost. Vinnie Cameron estimated that the energy costs for about half of the full cost. Neither community is involved in any businesses outside of the town. Travis Miller asked how much time the Town Manager spends on Light Department issues versus other issues. Both indicated that the Light Department took as much time as any other department of the town - no more and no less. Concord and Danvers both indicated that Light Departments require a lot of out of state travel for training. Concord indicated that they fully comply with Chapter 30B. They solicit proposals for professional services, use purchase orders, and solicit through RFP's for consultants. They have not done this for legal services. They do not have credit cards. Danvers indicated that they did an RFP for Town Counsel approximately eight years ago. They will periodically go out to do RFP's for Town Counsel. The same is true of the auditor. They follow Chapter 30B and bidding is done through the Assistant Town Manager who is in charge of purchasing. Jim Francis asked what kind of functions the CAB does. Danvers indicated that they review the budget, customer advocates, establish policies, have hearings on rates and when asked, assist in the reviewing for key positions. Danvers looks at their rate structure monthly. The rates have not changed since 1991 but they fluctuate based on purchase power and fuel. They are constantly projecting 12 months out. In Concord, the General Manager has the authority for setting rates and other such matters but the Town Manager has agreed to delegate this to the Light Board. In - - Concord, the Town Accountant manages the books for all departments. The Light Department has a staff accountant who reports to the supervisor of the department. RMLD Governance Advisory Committee Meeting - October 21, 2002 - Page 3 Both General Managers have faithful performance bonds. Both Danvers and Concord indicated that town policies apply to all town departments including the Light Department. Some specific procedures apply only to the Light Department. Danvers has a formula for its payment in lieu of taxes. They pay 2 %2% of sales for electric, water and sewer. In addition to that, they pay a portion of the expenses of the different functions that serve the Light Department - approximately $200,000 a year for administrative services. When asked how Danvers arrived at that 2%2%, Mr. Marquis indicated that they did a survey and went through the auditor. Concord does a payment in lieu of taxes based upon assessing the property and what they would be otherwise paying in taxes. Danvers has a municipal rate for electric costs which are slightly higher than the residential rate. This is because of a peculiarity with the hydroquebec power purchase contract. Concord has a street light rate but otherwise the municipality pays the same as other users. Review Draft Summary of Options - The Advisory Committee thanked the guests for their participation and went on to review the options. Jim Francis felt that he needed legal counsel's advice in order to determine what the primary options were. The Town Manager noted that it would be better for the Committee to focus their recommendations so that the review from Town Counsel could be focused. Vinnie Cameron noted for the Committee that the Light Department would be willing to do two audits per year one on the calendar year basis and one on the fiscal year basis. This would be a fairly simple operations issue. John Carpenter asked if they could go to a town fiscal year and still be able to file the reports with the State on a calendar year basis. Vinnie Cameron agreed that their computer is set up to be able to do that. On motion by Miller seconded by Francis, the Advisory Committee voted to exclude the items on Page 26 - Options related to Policies The motion was approved by a vote of 4-1-0, with Cowell voting against. The Advisory Committee proceeded to go through the options focusing first on board issues. Attached is a summary of the consensus from the members present. Doug Cowell made a pitch for having a hybrid board. This would be tailor made to Reading so that we would not loose the effective elected board, but could more easily change the-culture-of the Light Department. He believes that this would ensure against all of the cultures collapsing at the same time. He believed that this would provide the RMLD Governance Advisory Committee Meeting - October 21, 2002 - Page 4 best checks and balances. Under the discussion on the General Manager, the Advisory Committee asked if the General Manager can waive Group 4 status. Town Counsel will be asked to review this. The Advisory Committee indicated that we would need to look at the provisions for transition. The Town Manager suggested that there not be a transition from an elected board to an appointed board if that is the decision made. When the Charter was approved on the effective date of the Charter, the previously elected boards were eliminated and the appointed boards were put in place. Doug Cowell noted that the letter they had sent to the RMLB asking for them to stop the hiring process was not heeded. This could create a problem. Tony Butler addressed the Advisory Committee and noted that employees recognize that they are employees of the Town of Reading. Mr. Cowell noted that he was not talking about the employees - he was talking about the Board. Mr. Butler felt that the Advisory Committee should take into account the effect of their recommendations on the other towns served by the RMLD. They might not appreciate the Town Manager from Reading running the Light Department. Dan Ensminger noted that the Advisory Committee could and should be pro-active in going out to the other towns. He reminded everyone that the department does service extremely well and asked Mr. Butler how he would recommend addressing the issues. Mr. Ensminger noted that the twenty year agreement is solid. All the rate payers have the same interest which is good service at low cost. All the members of the CAB have agreed that the Light Department provides good service at low rates and this will continue. John Carpenter added that the rates could be lowered slightly because of more effectiveness and more openness and accountability. Jim Francis noted that the RMLB is meeting on Thursday night and they would be discussing the Governance Committee. Since he has a Finance Committee Meeting, he will not be able to attend but it would be good if someone from the Advisory Committee could attend. On motion by Miller seconded by Carpenter, the Ad Hoc RMLD Governance Advisory Committee voted to adiourn their meeting of October 21, 2002 at 10:25 p.m. by a vote of 5-0-0. R s ect• u11 submitted,