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HomeMy WebLinkAbout1995 Minutes BOWL 8l3ARD CJF' WAEI2" AND LIGHT PUBLIC NOTICE Schedule of Regular Meetings of the Board of Water and Light Commissioners For the Last Six Months of 1995 Regular meetings of the Board of Water and Light Commissioners of the City of Lansing, t Michigan,are scheduled to be held at 5:30 p.m.in the Board Room on the Second Floor of the Main Office Building, 123 West Ottawa Street,on the following dates: 1995 July 25 - Tuesday August 22 - Tuesday $epternber26 - Tuesday c�1h.N( 1) ICj 10 October 24 - Tuesday November 28 - Tuesday December 19 - Tuesday T:ap In the event a special meeting or rescheduled meeting is held,a notice of same will be posted at 123 West Ottawa Street,Lansing,Michigan,at least 18 hours prior to the time of the meeting. Posted by order of the Board of Water and Light Commissioners in conformity with Act 267,PA 1976. BOARD OF WATER AND LIGHT Mary ftova Corporate Secretary (517) 371-6033 Date of Posting: 6/23/95 a ; G7 N 7 cc: Board of Commissioners �' `' M BWL Executive Staff < City Clerk M Mayor's Office J t City Council = u, Page 133 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT ` `) 1 Tuesday,December 19, 1995 The Board of Commissioners met in regular rescheduled session at 5:00 p.m.,in the Main Office Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz,O'Leary,Pratt,Royal, Strolle-8 Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER STROLLE That minutes of regular session of November 28, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS No communications received. Page 134 Board Meeting Minutes December 19, 1995 COMMITTEE REPORTS PERSONNEL COMMITTEE REPORT The Personnel Committee met on December 14, 1995,to discuss the following topics: 1. Quarterly Pension Fund Investments 2. Post Employment Benefits Recognition and Funding Present were Committee Members Evans,Hassler, Strolle(Chair)and O'Leary. Absent was Commissioner Pratt(previous scheduled commitment). Pension Fund The committee reviewed a status report of the BWL Employees' Pension Fund investments for the quarter ending September 30, 1995. The report of the Personnel Committee is being submitted to the Pension Fund Trustees for consideration. Treasurer/Controller Tousley presented background information on past discussions held by the Personnel Committee regarding post employment benefits recognition and funding alternatives. He referred to Resolution 90-4 adopted by the Pension Fund Trustees on September 25, 1990,in which staff was directed to research financing options to pre-fund the liability for BWL retiree health insurance. Items presented to the committee by Mr.Tousley for discussion included: Possible Changes to Funding Assumptions • Reduce amortization period of overfunding from 30 years • Reduce wage inflation assumption from 5.5%to 5.0% • Increase rate of return assumption from 7.5%to 8.0% Possible Recognition of Pensioner and/or Active Health Insurance Unfunded Liability • Measure current liability • GASB vs.FASB Possible Funding of Pensioner and/or Active Health Insurance Unfunded Liability • Accepted funding options limited or non-existent The committee,by consensus,approved the following action plan: 1. Research actuarial costs of changes in funding assumptions 2. Conduct an actuarial study to measure health insurance liability 3. Research what other municipals are doing Staff is to report on preliminary results at the next quarterly Personnel Committee meeting. Respectfully submitted John Strolle,Chair PERSONNEL COMMITTEE Board Meeting Minutes Page 135 December 19, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That the Personnel Committee Report be received as presented. Adopted unanimously. GENERAL MANAGER'S RECOMMENDATIONS ADMEVISTRATIVE Res. No.95-12-1 That in accordance with Article II, Section 2.1 of the Board's Rules of Administrative Procedure,it is recommended that the following list of dates be adopted as the regular meeting schedule for the Board of Water and Light Commissioners for the ensuing six (6)months. 1996 January 23 - Tuesday February 27- Tuesday March 26 - Tuesday April23 - Tuesday May 28 - Tuesday June 25 - Tuesday Regular meetings of the Board shall commence at 5:30 p.m. This schedule is subject to change as a result of date conflicts with rescheduled City Council meetings. It is further recommended that a notice of the meeting schedule be published in the LANSING STATE JOURNAL the week of January 7, 1996. ----------------- BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-12-1 be approved. Adopted unanimously. Page 136 Board Meeting Minutes December 19, 1995 CORPORATE PLANNING Res.No.95-12-2 Approve Release of Easement: WHEREAS, Jennie Elizabeth Chaddock executed a certain easement conveying and warranting to Consumers Power Company, a Maine corporation authorized to do business in Michigan,forever, such rights as recorded in Liber 968,Page 54,in the Register of Deeds,Ingham County,Michigan,executed August 28, 1967,and WHEREAS, Consumer Power Company, conveyed and quitclaimed said easement to the City of Lansing by its Board of Water and Light, such rights as recorded in Liber 978, Page 1057 in the Register of Deeds,Ingham County,Michigan,executed October 4, 1968,and recorded October 28, 1968,and WHEREAS,Ivywood Development Company,a co-partnership,has requested the release of said easement that falls within the following described property: PARCEL DESCRIPTION; That part of the 30 acres off S end of W 1/2 of SW 1/4 of Sec. 1,T3N,R2W,excepting the S 6 acres and excepting beginning at a point 12 rods N of the SW corner of said Sec. 1,th 377.14 ft.,th N 115.5 ft.,th W 377.14 ft.,th S 115.5 ft. to point of beginning lying S of Hwy. 1-96. WHEREAS,this easement as described above is not needed to continue the operations of the Board of Water and Light. Since there are no electric distribution facilities on the south side of I-96 and there are no plans in the foreseeable future to extend into that area,and WHEREAS,to facilitate an expeditious release of easement in order for Ivywood Development Company to obtain final state approval of the plat for Ivywood Subdivision,Phase 4,the General Manager and Secretary signed a Release of Easement on December 4, 1995. NOW,THEREFORE,BE IT RESOLVED,That the Board of Commissioners of the Board of Water and Light adopt,ratify and confirm the action of the General Manager and Corporate Secretary and release,discharge and vacate said easement on the above described property and further direct the Corporate Secretary to record the release of easement with the Ingham County Register of Deeds. Res.No.95-12-3 Approve Release of Easement: WHEREAS,Harold A.Lamoreau and wife, executed a certain easement conveying and warranting to the Board of Water and Light forever, such rights as recorded in Liber 45, Page 486, in the Register of Deeds,Ingham County,Michigan,January 31, 1949, and Board Meeting Minutes Page 137 December 19, 1995 WHEREAS,the Board of Water and Light has no need for a portion of these easement rights,more specifically described as follows: PARCEL DESCRIPTION: The North 5 feet of the East 140 feet of Lot 16 and the South 5 feet of the East 140 feet of Reservation B of Halmo Homes Subdivision in the SW 1/4 of Section 30,Lansing Township, City of Lansing,Ingham County,Michigan. The balance of the easement acquired by the Board of Water and Light remains in full force and effect,recorded January 31, 1949,Liber 45,pages 486-487. WHEREAS,The General Manager and Corporate Secretary executed a Release of Easement on August 12, 1987,and staff inadvertently omitted to submit this release of easement to the Board for action. NOW,THEREFORE,BE IT RESOLVED,That the Board of Commissioners of the Board of Water and Light ratify and confirm the action of the General Manager and Corporate Secretary and release,discharge and vacate said easement on the above described property, as recorded in Liber 1648,Page 1124,in the Ingham County Register of Deeds,Ingham County,Michigan, on August 27, 1987. Res. No. 95-12-4 Approve Release of Easement WHEREAS,Orval W. Antcliff and Velma A. Antcliff,his wife,Lester C. Antcliff and Lena Mae Antcliff, his wife, and Elbert W. Berryhill and Mattie M.Berryhill, his wife, executed a certain easement conveying and warranting to Consumers Power Company forever,such rights as recorded in Liber 293,Page 286, in the Register of Deeds,Eaton County,Michigan, April 28, 1950,and WHEREAS, Consumers Power Company executed a certain quit claim deed conveying and warranting to the Board of Water and Light forever,such rights as recorded in Liber 298,Page 320,in the Register of Deeds,Eaton County,Michigan,July 26, 1951,and WHEREAS,the Board of Water and Light has no need for the above mentioned easement that falls within the plat of Bridgewater Estates,Delta Township,Eaton County,Michigan,to continue its utility operations,and WHEREAS,The General Manager and Corporate Secretary executed a Release of Easement on April 25, 1991,and staff inadvertently omitted to submit this release of easement to the Board for action. NOW,THEREFORE,BE IT RESOLVED,That the Board of Commissioners of the Board of Water and Light ratify and confirm the action of the General Manager and Corporate Secretary and release,discharge and vacate said easement on the above described property and further direct the Corporate Secretary to record the release of easement with the Ingham County Register of Deeds. Page 138 Board Meeting Minutes December 19, 1995 BY COMIVIISSIONER STROLLE-- SECONDED BY CONMRSSIONER O'LEARY That Resolutions 95-12-2, 95-12-3, and 95-12-4 be approved. Adopted unanimously. PENSION Res.No.95-12-5 That Mark L.Vander Jagt,Human Resources Director,be placed on a Voluntary Early Retirement Program(VRP)pension of$3,468.29 per month effective January 2, 1996. He has selected Option III with the provision that after his death, if his wife,Karen E. Vander Jagt, survives him she will receive 70%or$2,427.80 per month for the rest of her life as provided under Option III. Mr. Vander Jagt has worked for the BWL for 27 years and is 52 years of age. BY CONMSSIONER STROLLE-- SECONDED BY CONMSSIONER CHRISTIAN That Resolution 95-12-5 be approved. Adopted unanimously. TECHNICAL SERVICES Res.No.95-12-6 It is recommended that a contract in the amount of$26,625 be awarded to MBDS,Inc. Architects,for professional services relative to the main office relocation project. The scope of work includes the development of a master plan for the entire Hazel Street/Penn Avenue Complex. The plan will include;parking evaluation, traffic patterns and site storage requirements in addition to conceptual design plans,estimates and schedules for office facilities. ---------------- Other bidders were: Fishbeck,Thompson, Carr&Huber,Inc.,Keystone Design Group, and Hobbs&Black Associates,Inc. Board Meeting Minutes Page 139 December 19, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-12-6 be approved. Adopted unanimously. TREASURER/CONTROLLER Res.No.95-12-7 Authorize award of a three year purchase order for Electrician Services from Hatzel& Buehler,Inc.,Ann Arbor,MI for the Electrical Maintenance,Testing an Construction Department. The contract period extends from December 20, 1995 through December 19, 1998. Services will be supplied only as required on a per hour basis. -------------------- The award is based on a competitive,best evaluated bid. Hatzel&Buehler bid$39.89 per person,per hour. The other bidders were Lansing Electric Motors,Inc.,Lansing, MI(45.64);F.D.Hayes Electric Co.,Lansing,MI($45.80);Northern Boiler Mechanical Contractors,Muskegon,MI($46.57),and Superior Electric,Lansing,MI ($50.55). C.L. Electric,Inc.,Lutz Electric Construction Co.,and Quality Electric,Inc. Were invited to bid but declined. The utilization of the electrician services as required will be approved by the General Manager or the purchasing authority delegated by him to the Electric Transmission and Distribution Director and Manager,Electrical Maintenance,Testing and Construction. ------------------ BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-12-7 be approved. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy briefed the Commissioners on the following items: Mark Vander Jagt Recognized. General Manager Pandy saluted Mark Vander Jagt for his achievements during his 27-year career at the BWL. Noteworthy BWL accomplishments under his leadership as Human Resources Director include: Page 140 Board Meeting Minutes December 19, 1995 • An outstanding safety record,including national honors from the American Public Power Association and the American Water Works Association • An excellent training program • A diverse workforce • A harmonious IBEW union relations • A Strategic business unit concept for Electric,Water and Steam utilities • Innovative programs like Share the Success Mark Vander is also credited for grooming his successor,Linda Gardner,who assumes her new role as Human Resources Director on January 1, 1996. Stadium Field Lighting. Mr.Pandy briefed the Commissioners on the status of the BWL's agreement with the City of Lansing to provide lighting for the downtown stadium and associated electric distribution equipment. Under this arrangement,the BWL would be reimbursed by the City over a fifteen(15)year period. He handed out a copy of the Stadium Field Lighting Proposal for review. The proposal states that the BWL agrees to pay$608,480 to Clark Construction(Clark)on behalf of the City. Mr.Pandy noted that Clark is acting as construction manager for the stadium. They take competitive bids on the lighting and other equipment that the BWL is purchasing. Clark basically follows the City's purchasing policy for competitive bids,which is mirrored to the BWL's purchasing policy. Commissioner Hassler noted that the other key to this arrangement is the fact that these assets will be recorded on the BWL's books for fifteen(15)years. Mr.Pandy stated that the City will maintain and preserve this equipment for life,and upon full payment the BWL will transfer title to the City. He noted that the City has a fifteen(15)year agreement with the team for baseball in Lansing. Thus this is the reason the stadium lighting proposal is patterned after the fifteen(15)year agreement. Mr.Pandy said this arrangement is not unlike other ball fields in the city. The BWL lights most of the ball parks in the city. Although they are outdoor fields,the BWL owns the equipment,provides the lighting,and charges them for the equipment through a street lighting rate. CMS Continues to Expand. Mr.Pandy reported that CMS Energy,parent of Consumers Power,is planning to spend$1 billion in Asia,and is opening an office in Singapore. Their far-reaching empire continues to grow. Share the Success Update. The Share the Success earned 353 points through October. Mr.Pandy reported that this is a fairly typical performance through the first four months of the fiscal year. Main Office Building Sale Update. Mr.Pandy reported that Capitol Annex Limited Liability Company (L.L.C.), a.k.a. Gary Granger,is questioning as to whether certain areas in proximity to the BWL's building were included as part of the main office building sale. More specifically,the confusion centers on the Ingham County Circuit Courts space,which lies between the BWL's first floor lobby area and the BWL's second floor administration area. Mr.Pandy stated that during negotiations,the BWL did not represent that it had ownership rights to the courts space,and accordingly,these areas were not part of the transaction. These areas were paid for by the City when the office building was built. He further reported that blueprints provided to Capitol Annex excluded the square footage measurements of the courts portion of the building. These areas were also excluded from the main office building appraisal. A copy of a letter,dated December 13, 1995,written by Staff Attorney Larry Wilhite to Patrick Reid,III, Board Meeting Minutes Page 141 December 19, 1995 representing Capitol Annex,was handed out. The letter reiterates discussions held during negotiations and has given Capitol Annex five(5)days to respond. If their understanding differs from the BWL,then discussion on the return of all earnest money and mutual rescission of the purchase contract will need to take place. General Manager Pandy reported that concurrently,a full price offer in the amount of$5.2 million has been received from Vlahakis Realty Company as a backup offer. The offer includes a standard Buy/Sell Agreement with no contingencies.Mr.Pandy also reported that Sam Eyde has expressed an interest in submitting a bid on the building. Mr.Pandy indicated that as a seller, the BWL is in a fine position with one offer that may be waning,but two others that appear to be coming on strong. Commissioner Lontz asked what options the BWL has with the present situation with Capitol Annex. Staff Attorney Wilhite briefed the Board on the most relevant provision of the purchase contract. Mr.Pandy will continue to keep the Board advised on this matter. Mid-Michigan Water Authority Holds First Meeting. Mr. Pandy reported that the first meeting of the Mid-Michigan Water Authority(MIviWA)has been held,with nine communities involved. The MMWA will hold their election of officers in January, 1996. Clyde Dugan,Director of the Water Utility and Sue McCormick,Manager of Water Technical Support,are slated for Chairman and Secretary, respectively. Proposed Steam Powered Clock. The BWL Steam Utility has positioned the Lansing Downtown Rotary Club for financial support of a steam powered clock in the vicinity south of the Ottawa Station,generally known as Wentworth Park. An artist's rendering of the steam clock design was handed out for reference. The design is meant to blend in with the architecture of the Ottawa Station. The clock would chime or sound steam whistles on the hour. The only other cities known to have a steam powered clock are Vancouver,B.C. and St. Louis,MO. Mr.Pandy indicated this is a substantial commitment by Rotary, estimated at$160,000. The BWL would probably assist in keeping it maintained and properly operating. Happy Holiday Wishes. General Manager Pandy wished the Board and employees a Merry Christmas and a Happy New Year. He thanked the Board for their support of the staff. REMARKS BY COMMISSIONERS OPAD Progress. Commissioner Lontz inquired on the status of the OPAD(Ottawa Park Associates, Developers)negotiations with potential major tenants. General Manager Pandy responded that OPAD is continuing to work on their potential tenants. A meeting was held last week with two of the prospective major tenants. A consultant engaged by a third prospective tenant is in town studying the feasibility of a health club at the Ottawa facility. Negotiations are continuing on track. The prospective tenants have been told that the BWL is expecting some indication as to their intent to sign leases by the Board's January 23, 1996,regular meeting. Mr.Pandy reported that the BWL has asked for an extension of time from bidders relating to equipment removal and salvage for the Ottawa Station Development Project. Mr. Pandy also reported that the Electric Utility is ahead of schedule in terms of the substation work,cable conversions, splicing, and other electric distribution work to replace the electric substation housed within Ottawa Station. Holiday Greetings. Commissioner Royal wished everyone a happy holiday. Page 142 Board Meeting Minutes December 19, 1995 PUBLIC COMMENTS No persons spoke. EXCUSED ABSENCES There were no absences. ADJOURNMENT On motion of Commissioner Royal, the Board adjourned at 5:21 p.m. 5' )JOYA, Mary E. So ecretary Fded: December 21, 1995 Marilynn Slade,City Clerk Page 133 MINUTES OF BOARD OF COMMISSIONERS'MEETING LANSING BOARD OF WATER AND LIGHT LAI'u �� i 11L• i1f� Tuesday,December 19,1995 The Board of Commissioners met in regular rescheduled session at 5:00 p.m.,in the Main Office Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz,O'Leary,Pratt,Royal, Strolle-8 Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER STROLLE That minutes of regular session of November 28, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS No communications received. Page 134 Board Meeting Minutes December 19, 1995 COMMITTEE REPORTS PERSONNEL COMMITTEE REPORT The Personnel Committee met on December 14, 1995,to discuss the following topics: 1. Quarterly Pension Fund Investments 2. Post Employment Benefits Recognition and Funding Present were Committee Members Evans,Hassler, Strolle(Chair)and O'Leary. Absent was Commissioner Pratt(previous scheduled commitment). Pension Fund The committee reviewed a status report of the BWL Employees' Pension Fund investments for the quarter ending September 30, 1995. The report of the Personnel Committee is being submitted to the Pension Fund Trustees for consideration. Treasurer/Controller Tousley presented background information on past discussions held by the Personnel Committee regarding post employment benefits recognition and funding alternatives. He referred to Resolution 90-4 adopted by the Pension Fund Trustees on September 25, 1990, in which staff was directed to research financing options to pre-fund the liability for BWL retiree health insurance. Items presented to the committee by Mr. Tousley for discussion included: Possible Changes to Funding Assumptions • Reduce amortization period of overfunding from 30 years • Reduce wage inflation assumption from 5.5%to 5.0% • Increase rate of return assumption from 7.5%to 8.0% Possible Recognition of Pensioner and/or Active Health Insurance Unfunded Liability • Measure current liability • GASB vs.FASB Possible Funding of Pensioner and/or Active Health Insurance Unfunded Liability • Accepted funding options limited or non-existent The committee,by consensus, approved the following action plan: 1. Research actuarial costs of changes in funding assumptions 2. Conduct an actuarial study to measure health insurance liability 3. Research what other municipals are doing Staff is to report on preliminary results at the next quarterly Personnel Committee meeting. Respectfully submitted John Strolle, Chair PERSONNEL COMMITTEE Board Meeting Minutes Page 135 December 19, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That the Personnel Committee Report be received as presented. Adopted unanimously. GENERAL MANAGER'S RECOMMENDATIONS ADMINISTRATIVE Res.No.95-12-1 That in accordance with Article II, Section 2.1 of the Board's Rules of Administrative Procedure,it is recommended that the following list of dates be adopted as the regular meeting schedule for the Board of Water and Light Commissioners for the ensuing six (6)months. 1996 January 23 - Tuesday February 27 - Tuesday March 26 - Tuesday April23 - Tuesday May 28 - Tuesday June 25 - Tuesday Regular meetings of the Board shall commence at 5:30 p.m. This schedule is subject to change as a result of date conflicts with rescheduled City Council meetings. It is further recommended that a notice of the meeting schedule be published in the LANSING STATE JOURNAL the week of January 7, 1996. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-12-1 be approved. Adopted unanimously. Page 136 Board Meeting Minutes December 19, 1995 CORPORATE PLANNING Rea No.95-12-2 Approve Release of Easement: WHEREAS, Jennie Elizabeth Chaddock executed a certain easement conveying and warranting to Consumers Power Company, a Maine corporation authorized to do business in Michigan,forever, such rights as recorded in Liber 968,Page 54, in the Register of Deeds,Ingham County,Michigan, executed August 28, 1967, and WHEREAS,Consumer Power Company,conveyed and quitclaimed said easement to the City of Lansing by its Board of Water and Light,such rights as recorded in Liber 978, Page 1057 in the Register of Deeds,Ingham County,Michigan, executed October 4, 1968,and recorded October 28, 1968,and WHEREAS,Ivywood Development Company,a co-partnership, has requested the release of said easement that falls within the following described property: PARCEL DESCRIPTION; That part of the 30 acres off S end of W 1/2 of SW 1/4 of Sec. 1,T3N,R2W,excepting the S 6 acres and excepting beginning at a point 12 rods N of the SW corner of said Sec. 1,th 377.14 ft.,th N 115.5 ft.,th W 377.14 ft.,th S 115.5 ft. to point of beginning lying S of Hwy. 1-96. WHEREAS,this easement as described above is not needed to continue the operations of the Board of Water and Light. Since there are no electric distribution facilities on the south side of I-96 and there are no plans in the foreseeable future to extend into that area,and WHEREAS,to facilitate an expeditious release of easement in order for Ivywood Development Company to obtain final state approval of the plat for Ivywood Subdivision,Phase 4,the General Manager and Secretary signed a Release of Easement on December 4, 1995. NOW,THEREFORE,BE IT RESOLVED,That the Board of Commissioners of the Board of Water and Light adopt, ratify and confirm the action of the General Manager and Corporate Secretary and release,discharge and vacate said easement on the above described property and further direct the Corporate Secretary to record the release of easement with the Ingham County Register of Deeds. ---------------- Rea No. 95-12-3 Approve Release of Easement: WHEREAS,Harold A.Lamoreau and wife,executed a certain easement conveying and warranting to the Board of Water and Light forever, such rights as recorded in Liber 45, Page 486,in the Register of Deeds,Ingham County,Michigan, January 31, 1949, and Page 137 Board Meeting Minutes December 19, 1995 WHEREAS,the Board of Water and Light has no need for a portion of these easement rights,more specifically described as follows: PARCEL DESCRIPTION: The North 5 feet of the East 140 feet of Lot 16 and the South 5 feet of the East 140 feet of Reservation B of Halmo Homes Subdivision in the SW 1/4 of Section 30,Lansing Township, City of Lansing,Ingham County,Michigan. The balance of the easement acquired by the Board of Water . and Light remains in full force and effect,recorded January 31, 1949,Liber 45,pages 486-487. WHEREAS,The General Manager and Corporate Secretary executed a Release of Easement on August 12, 1987,and staff inadvertently omitted to submit this release of easement to the Board for action. NOW,THEREFORE,BE IT RESOLVED,That the Board of Commissioners of and Board of Water and Light ratify and confirm the action of the General Mang er Corporate Secretary and release,discharge and vacate said easement on the above described property,as recorded in Liber 1648,Page 1124,in the Ingham County Register of Deeds,Ingham County,Michigan,on August 27, 1987. Res.No.95-124 Approve Release of Easement WHEREAS, Orval W. Antcliff and Velma A. Antcliff,his wife,Lester C. Antcliff and Lena Mae Antcliff,his wife, and Elbert W.Berryhill and Mattie M.Berryhill,his wife, executed a certain easement conveying and warranting to Consumers Power Company forever, such rights as recorded in Liber 293,Page 286,in the Register of Deeds,Eaton County,Michigan, April 28, 1950,and WHEREAS, Consumers Power Company executed a certain quit claim deed conveying and warranting to the Board of Water and Light forever,such rights as recorded in Liber 298,Page 320,in the Register of Deeds,Eaton County,Michigan, July 26, 1951,and WHEREAS,the Board of Water and Light has no need for the above mentioned easement that falls within the plat of Bridgewater Estates,Delta Township,Eaton County,Michigan,to continue its utility operations,and WHEREAS,The General Manager and Corporate Secretary executed a Release of Easement on April 25, 1991, and staff inadvertently omitted to submit this release of easement to the Board for action. NOW,THEREFORE,BE IT RESOLVED,That the Board of Commissioners of the Board of Water and Light ratify and confirm the action of the General Manager and Corporate Secretary and release,discharge and vacate said easement on the above described property and further direct the Corporate Secretary to record the release of easement with the Ingham County Register of Deeds. Page 138 Board Meeting Minutes December 19, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMWISSIONER O'LEARY That Resolutions 95-12-2, 95-12-3,and 95-12-4 be approved. Adopted unanimously. PENSION Res. No.95-12-5 That Mark L. Vander Jagt,Human Resources Director,be placed on a Voluntary Early Retirement Program(VRP)pension of$3,468.29 per month effective January 2, 1996. He has selected Option III with the provision that after his death,if his wi fv,Karen L. Vander Jagt, survives him she will receive 70%or$2,427.80 per month for the rest of her life as provided under Option III. -------------------- Mr. Vander Jagt has worked for the BWL for 27 years and is 52 years of age. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-12-5 be approved. Adopted unanimously. TECHNICAL SERVICES Res.No.95-12-6 It is recommended that a contract in the amount of$26,625 be awarded to MBDS,Inc. Architects,for professional services relative to the main office relocation project. The scope of work includes the development of a master plan for the entire Hazel Street/Penn Avenue Complex. The plan will include;parking evaluation, traffic patterns and site storage requirements in addition to conceptual design plans,estimates and schedules for office facilities. -------------------- Other bidders were: Fishbeck,Thompson, Carr&Huber,Inc.,Keystone Design Group, and Hobbs&Black Associates,Inc. Page 139 Board Meeting Minutes December 19,1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-12-6 be approved. Adopted unanimously. TREASURER/CONTROLLER Res.No.95-12-7 Authorize award of a three year purchase order for Electrician Services from Hatzel& Ann Arbor,MI for the Electrical Maintenance,Testing an Construction Buehler,Inc., h December Depart�*ne::t. The contract period extends from December 20. 1995 through 19, 1998. Services will be supplied only as required on a per hour basis. The award is based on a competitive,best evaluated bid. Hatzel&Buehler bid$39.89 per person,per hour. The other bidders were Lansing Electric Motors, ern Inc., Lansing, MI(45.64);F.D.Hayes Electric Co.,Lansing, cal Contractors,Muskegon,MI($46.57),and Superior Electric,Lansing,MI Mechanical($50.55 C.L.Electric,Inc.,Lutz Electric Construction Co.,and Quality Electric,Inc. Were invited to bid but declined. The utilization of the electrician services as required will be approved by the General Manager or the purchasing authority delegated by him to the Electric Transmission and Distribution Director and Manager,Electrical Maintenance,Testing and Construction. BY COMIVIISSIONER STROLLE-- SECONDED BY COMIVIISSIONER EVANS That Resolution 95-12-7 be approved. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy briefed the Commissioners on the following items: Mark Vander during his 2 7-year General career at the Manager PNoteworthy BWL accomplishment under his andy saluted Mark Vander Jagt for his achievement during his 27 y leadership as Human Resources Director include: Page 140 Board Meeting Minutes December 19, 1995 • An outstanding safety record,including national honors from the American Public Power Association and the American Water Works Association • An excellent training program • A diverse workforce • A harmonious IBEW union relations • A Strategic business unit concept for Electric, Water and Steam utilities • Innovative programs like Share the Success Mark Vander is also credited for grooming his successor,Linda Gardner,who assumes her new role as Human Resources Director on January 1, 1996. Stadium Field LiehtinLy. Mr.Pandy briefed the Commissioners on the status of the BWL's agreement with the City of Lansing to provide lighting for the downtown stadium and associated electric distribution equipment. Under this arrangement,the BWL would be reimbursed by the City over a fifteen(15)year period. He handed out a cop; of the Stadi»*n Field Lighting Proposal for review. The proposal states that the BWL agrees to pay$608,480 to Clark Construction(Clark)on behalf of the City. Mr. Pandy noted that Clark is acting as construction manager for the stadium. They take competitive bids on the lighting and other equipment that the BWL is purchasing. Clark basically follows the City's purchasing policy for competitive bids,which is mirrored to the BWL's purchasing policy. Commissioner Hassler noted that the other key to this arrangement is the fact that these assets will be recorded on the BWL's books for fifteen(15)years. Mr.Pandy stated that the City will maintain and preserve this equipment for life,and upon full payment the BWL will transfer title to the City. He noted that the City has a fifteen(15)year agreement with the team for baseball in Lansing. Thus this is the reason the stadium lighting proposal is patterned after the fifteen(15)year agreement. Mr.Pandy said this arrangement is not unlike other ball fields in the city. The BWL lights most of the ball parks in the city. Although they are outdoor fields,the BWL owns the equipment, provides the lighting,and charges them for the equipment through a street lighting rate. CMS Continues to Expand. Mr.Pandy reported that CMS Energy,parent of Consumers Power, is planning to spend$1 billion in Asia,and is opening an office in Singapore. Their far-reaching empire continues to grow. Share the Success Update. The Share the Success earned 353 points through October. Mr.Pandy reported that this is a fairly typical performance through the first four months of the fiscal year. Main Of-rice Buildin2 SAe update. -Mr. Pandy reported that Capitol Annex Limited Liability Company (L.L.C.),a.k.a. Gary Granger, is questioning as to whether certain areas in proximity to the BWL's building were included as part of the main office building sale. More specifically, the confusion centers on the Ingham County Circuit Courts space,which lies between the BWL's first floor lobby area and the BWL's second floor administration area. Mr.Pandy stated that during negotiations, the BWL did not represent that it had ownership rights to the courts space,and accordingly, these areas were not part of the transaction. These areas were paid for by the City when the office building was built. He further reported that blueprints provided to Capitol Annex excluded the square footage measurements of the courts portion of the building. These areas were also excluded from the main office building appraisal. A copy of a letter,dated December 13, 1995,written by Staff Attorney Larry Wilhite to Patrick Reid,III, Page 141 Board Meeting Minutes December 19,1995 negotiations representing Capitol Annex,was handed out. The letter reiterates discussions held during g then and has given Capitol Annex five(5)days to and rescissiod. If their n s the purse contract will neers from the ed to tandi discussion on the return of all earnest money take place. General Manager Pandy reported that concurrently,a full price offer in the amount of$5.2 million has been received from Vlahakis Realty Company as a backup offer. The offer includes a standard Buy/Sell Agreement with no contingencies.Mr.Pandy also reported that Sam Eyde has expressed an interest in submitting a bid on the building. Mr.Pandy indicated that as a seller,the BWL is in a fine position with one offer that may be waning,but two others that appear to be coming on strong. Commissioner Lontz asked what options the BWL has with the present situation with Capitol Annex. Staff Attorney Wilhite briefed the Board on the most relevant provision of the purchase contract. Mr.Pandy will continue to keep the Board advised on this matter. . Mr.Pandy rep of the Mid",Mich; an Water Authority F �v' 'held,with nine communities�MIein ported linvolved.the first mThenMMWA Mid-Michigan Water Authority(IvIIvIW )has been will hold their election of officers in January, 1996. Clyde Dugan,Director of the Water Utility and Sue McCormick,Manager of Water Technical Support,are slated for Chairman and Secretary,respectively. Proposed Steam Powered Clock. The BWL Steam Utility has positioned the Lansing Downtown Rotary Club for financial support of a steam powered clock in the vicinity south of the Ottawa Station,generally known as Wentworth Park. An artist's rendering of the steam clock design was handed out for reference. The design is meant to blend in with the architecture of the Ottawa Station. The clock would chime or sound steam whistles on the hour. The only other oa substantial co powered mmitme t by Rotary, are Vancouver,B.C. and St.Louis,MO. Mr.Pandy indicat d this is estimated at$160,000. The BWL would probably assist in keeping it maintained and properly operating. Happy Holiday Wishes. General Manager Pandy wished the Board and employees a Merry Christmas and a Happy New Year. He thanked the Board for their support of the staff. REMARKS BY COMMISSIONERS OPAD—Pro ress. Commissioner Lontz inquired on the status of the OPAD(Ottawa Park Associates, Developers)negotiations with potential major tenants. General Manager Pandy responded that OPAD is continuing to work on their potential tenants. a Ord meeting was held last week with two of the prospective major tenants. A consultant engaged by prospective tenant is in town studying the feasibility of a health club at the Ottawa facility. sometrations are continuing on track. The prospective tenants have been told that the BWL is expecting indication as to their intent to sign leases by the Board's January 23, 1996, regular meeting. po Mr. Pandy reported that the BWL has asked for an extension of time from bidders relating to equipment removal and salvage for the Ottawa Station Development Project. Mr. Pandy also reported that the Electric Utility is ahead of schedule in terms of the substation work,cable conversions, splicing,and other electric distribution work to replace the electric substation housed within Ottawa Station. Holiday Greetings. Commissioner Royal wished everyone a happy holiday. Page 142 Board Meeting Minutes December 19, 1995 PUBLIC COMMENTS No persons spoke. EXCUSED ABSENCES There were no absences. ADJOURNMENT On motion of Commissioner Royal,the Board adjourned at 5:21 p.m. Mary E. So ecretary Filed: December 21, 1995 Marilynn Slade, City Clerk oARn a wA R zi xT` r i .: i :. .... UBS114G CITY CLERK NOTICE RESCHEDULED REGULAR MEETING The time of the regular meeting of the Board of Water and Light Commissioners of the City of Lansing, Michigan, scheduled on December 19, 1995, is being rescheduled as follows: Rescheduled Time: from 5:30 p.m. to 5:00 p.m. (Tuesday, December 19, 1995) Location: Second Floor Board Room Board of Water and Light Office Building 123 West Ottawa Street Lansing, Michigan Certified by: BOARD OF WATER AND LIGHT Mary E. va Corporat ecretary Telephone 371-6033 Post: 12/12/95 In accordance with the American with Disabilities Act(ADA),please call the Corporate Secretary's Office at 371-6033 at least three business days prior to a public meeting to request special accommodations such as mobility, visual, hearing, or other assistance. cc: BWL City: Board of Commissioners City Clerk's Office Executive Staff City Council Office M.Fales(Building Maintenance Mayor's Office C.Jones/Eric Stancliff Page 126 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT 1��16 l)"'-VI L{ L j{ Tuesdav,November 28, 1995 The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street,Lansing, Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz,Pratt, Strolle-6 Absent: Commissioners Lontz(our of town on business)and O'Leary(business commitment)-2 The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN— SECONDED BY COMMISSIONER STROLLE That minutes of regular session of October 24, 1995, and Special Session of October 31, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MAT-IrER NOT ON THE AGENDA MA.Y DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS No communications received. COMMITTEE REPORTS There were no committee reports. Page 127 Board Meeting Minutes November 28, 1995 GENERAL MANAGER'S RECOMMENDATIONS HUMAN RESOURCES Res. No. 95-11-1 That Laurie Briggs,a Programmer Analyst for Information Systems Department,be awarded a total of$196.10 for suggestion proposal number 1995-151. to issue a Board- wide memo to inform departments of cost-effectiveness and availability of preformatted diskettes. By implementing this proposal, it is estimated that the BWL will realize a net savings of $1,211 in the first year. -------------- BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-11-1 (Human Resources)be approved as submitted. Adopted unanimously. STEAM UTILITY Res. No. 95-11-2 Subject to receipt of General Motors Lansing Automotive Division's(LAD) authorization, the Lansing Board of Water and Light Commissioners authorize the General Manager to proceed with the design, purchase and installation of equipment to provide steam service to LAD Plants#2,#3 and#6 and staff to negotiate the specific terms and conditions of the Steam Supply Contract based on the following major tenets: => Steam(thermal energy)requirements for LAD Plants#2,#3 and#6 will be supplied by BWL. Based on an initial supply capacity demand of 350,000 lb./hr. => The BWL will construct an interconnecting main to supply the contracted steam requirements of LAD Plants#2, #3 and#6. BWL will recover the actual cost of the steam project plus 6%interest through rates paid by LAD. LAD's minimum annual contract purchase will be 1,031,600 MIb./year. => LAD/BWL will enter into a Steam Supply Contract with a minimum term of 10 years. The LAD 1996 steam rate of$4.99/Mlb. will escalate at 5%per year for the first five(5)years of the contract. Board Meeting Minutes Page 128 November 28. 1995 => Steam rate will be subject to a fuel cost adjustment clause and a condensate return adjustment. => LAD's steam rates will be cost of service based for the sixth through tenth years of the contract. => LAD Plant#1 steam requirements will continue to be provided by the BWL under existing contract. -------------------- The authorization to proceed is the culmination of almost three years of efforts with GM to evaluate the option of the Board providing steam service to the GM plants cited and shutdown of GM's Plant#6 Powerhouse. The BW-L proposal is based on the debt service for the approxirriate,-y$7 million and increment pricing of the steam provided in the first year. Automatic 5%annual increases in the rate charged follow until the load becomes part of the existing steam rate base in the sixth year of the contract. Simple payback on the capital investment is less than two years. Over the ten year study period significant savings will result for the BWL customers and for GM. ----------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER EVANS That Resolution 95-11-2 (Steam Utility)be approved as submitted. Adopted unanimously. General Manager Pandy stated that this is a significant event for the Steam Utility to be able to add 70 percent to its steam load with one pipeline. He noted that this sets the stage of continuing to enhance the Steam Utility into the district energy business as other steam utilities such as in Minneapolis, Cleveland. Chicago and Baltimore. They are all going to the district energy concept where they supply cooling in the summer time. With a bigger base load for heating, the BWL Steam Utility can perhaps justify putting in capital investments for cooling. Commissioner Christian congratulated Steam Utility Director Joette Woodard-Yauk and staff for their tireless efforts since 1993 in successfully negotiating an agreement to supply steam to the Lansing Automotive Division Plants#2, #3 and#6. General Manager Pandy reported that the 2.2 miles of 20 inch diameter steam line will start from the Eckert/Moores Park complex following the railroad right of way and then cutting north near Sexton High School into Fisher Body. Page 129 Board Meeting Minutes November 28, 1995 GENERAL MANAGER'S REMARKS General Manager Pandy briefed the Commissioners on the following items: District Energy Continues Its Overall Growth Trend. An article entitled,"District Energy Growth," INDEPENDENT ENERGY,Robert S. Seeley, November 1995,p.24-26,was handed out for review. The article gives a good overview of current trends in District Energy growth. Mr. Pandy stated that as the energy industry becomes more competitive in electricity,utilities are finding that by cogenerating and being in the double energy business,they can be more competitive. More and more of investor-owned utilities are starting steam utility subsidiaries to do what the BWL essentially has been doing for a long period of time. Linda Gardner Named Human Resources Director. Mr. Pandy announced the promotion of Personnel Manager Linda Gardner to Director of Human Resources effective January 1, 1996. Ms. Gardner will succeed retiring Human Resources Director Mark Vander Jagt who will leave his post on December 31, 1995. Mr. Pandy noted that Ms. Gardner is the first Afro-American female to become a director at the BWL in the utility's I10-year history . Dinner Honoring Mark Vander Jagt-December 19. The Board and Executive Staff will honor Human Resources Director Mark Vander Jagt at a dinner to be held immediately following the regular board meeting on December 19. The Board applauded Mark Vander Jagt's outstanding 27-year career with the BWL. Mr. Pandy stated that it is much to Mark Vander Jagt's credit that the BWL has had outstanding employees and labor relations, an excellent safety record,and that Mark deserves credit for grooming Linda Gardner to be his successor. Bob Cariano Named Safety Professional of the Year. Mr. Pandy introduced BWL Safety Administrator Bob Cariano, who was awarded the Safety Professional of the Year by the Michigan Safety Conference, Public Utility Division. To commemorate this award, each Commissioner was given a pair of new BWL safety glasses. The glasses can be changed from clear to shaded lenses for added protection from bright light and adjusted to Ft personal comfort. Also available is another model of safety glasses to fit over eye glasses. Tiro-Car Crash Causes Power Outage in South Cedar Street Retail Area. General Manager Pandy reported on an outage incident that occurred November 28 in Lansing's south side as the result of a two- car crash that broke a utility pole. Safety Administrator Bob Cariano was driving on South Cedar Street and was one of the first people to see the accident. He immediately reported the problem to the BWL's operation center:and two crews started to repair the damage within ten minutes of the accident. This involved untangling the power lines and planting a new pole. Mr.Pandy commended the Line Department for their prompt response and restoration work during busy business hours. City Council Approves Sale of the BWL Main Office Building. A copy of City Council's Resolution #714, adopted November 20, 1995, approving the sale of the BWL main office building at 123 West Ottawa Street and associated parking lot located at 221 N. Capitol Avenue was handed out for reference. The Board of Commissioners approved the negotiated price of$5,157,375 at their regular meeting held July 25. 1995. Mr. Pandy reported that the BWL's agreement with Capitol Annex Limited Liability Company (Granger)provides for the payment of$50,000 as earnest money. The sum of$10,000 has alreadv been received and acknowledged by the BWL. The additional earnest money in the amount of $40.000 is to be paid by Granger by December 7, 1995. The contract will terminate if not closed on or before June 30. 1996. That time period is to allow Granger to get their leases signed, to secure their financing, and to negotiate agreements with the City as to the joint use of the ramps to and from the basement garage areas from Michigan Avenue and from Ottawa Street,sharing of common areas and common area expenses,and the use of the floor currently being used by the Ingham County Circuit Courts. The BWL will deliver purchaser possession within a period of 16 months subsequent to the date Board Meeting Minutes Page 130 November 28, 1995 of closing and will endeavor to deliver possession prior to the expiration of the 16-month period by,in good faith, expediting its move to another location. New BWL Office Building Relocation Alternatives. General Manager Pandy told the Commissioners he is looking for their direction on selecting a suitable location for the new BWL office building. He presented three alternatives and reported that Technical Services Director John Elashkar will be working with an architect to assist the BWL in evaluating alternatives. Options for consideration include: (1) remodeling existing BWL facilities in the Pennsylvania Avenue and Haco Drive area, (2)purchasing and remodeling a privately-owned building in the area,and(3)building a new facility at the southwest corner of the intersection of Pennsylvania and Hazel Streets. Discussion relative to customer accessibility and employee parking was held. Mr. Pandy said that the southwest corner of the Pennsylvania and Hazel intersection is probably the better point of access. Following lengthy discussion, there was a sense that the Commissioners preferred a new building on the southwest corner of the Pennsylvania Avenue and Hazel Street intersection, as opposed to remodeling existing buildings, if it can be accomplished with the $5,15 7.375 proceeds from the sale. A generic design of what a new building might look like was handed out for review. Mr. Pandy said he plans to come back with a recommendation at the regular meeting in December with regard to engaging an architect and the estimated cost of a new building. Ottawa Power Station Development Status Report. General Manager Pandy gave an overview on the progress of the Ottawa Park Associates,Developers(OPAD)team in negotiating leases with two prospective major tenants for the Ottawa Station commercial redevelopment project. Mr. Pandy reported that negotiations are taking longer than anticipated due to the fact that one of the prospective tenants has hired a consultant to study the feasibility of creating a fitness facility in the Ottawa Station which study will not be completed until mid-December. The study will have to receive consideration by the prospective tenant's Board,which in all likelihood,will not be available for public presentation until mid- January 1996. Since the results of the study are critical to investigate the feasibility of developing a fitness facility as one of the tenants, OPAD is requesting a 30-day extension of time. Mr. Pandy emphasized that this undertaking is not an idle project. Progress is being made as the two major prospective tenants are spending significant money and time to determine the feasibility of their projects. Following discussion, the Board accepted the 30-day extension. There was consensus among the Commissioners that by the regular meeting of January 23, 1996, the two major prospective tenants should be prepared to show they are proceeding to negotiate leases. Mr.Pandy will report on progress made at the regular meeting on December 19. Capital Improvement Review Process . General Manager Pandy reported that Corporate Planning Director Roger Ophaug is working with the City of Lansing to help them form a capital improvement review process. The City currently does not have a means of prioritizing their capital projects. Update on Consumers Power Takeover Deal. A copy of a fact sheet prepared by BWL Communications Director John Strickler relative to the threatened Consumers Power takeover of the BWL was handed out. Mr. Pandy reported that Sandy Pensler--the financial broker who set up the takeover arrangement--appeared before the City Council's Committee of the Whole at their November 16 meeting to present his proposal to the council members. Mr. Pandy stated that numerous misrepresentations were made by Mr. Pensler with erroneous information. Minutes of the Council's Committee of the Whole meeting,prepared by Corporate Planning Director Roger Ophaug,were handed out for reference. Page 131 Board Meeting Minutes November 28, 1995 Mr. Pandy told the Board that ultimatelv he does not think this deal would be approved by City Council or the customers. however, the BWL remains cautiously vigilant. He wants to convey to the employees that the BWL must continue to focus on its mission--continue to provide low cost services in the most reliable and safe manner possible. Mr. Pandy stated that the"politics" is the responsibility of the Board and the General Manager by continuing to communicate the value of the BWL to the City. Water/Wastewater Rate Survey. A copy of a 1995 survey completed by Black&Veatch on Michigan water and wastewater rates was handed out. The survey covers municipal water and wastewater utilities for cities with service populations of 25,000 or greater. Graphical comparisons of typical residential, commercial. and industrial water and wastewater bills reflect higher rates in Lansing as compared to other Michigan municipalities. Mr. Pandy told the Board that while BWL water rates did not rank as favorably as other Michigan municipalities,our water rates compared well with other communities that have to soften their water. Many cities listed on the survey have lower water rates because they are dealing with lake or surface water which does not have to be softened. Lansing sewer rates are the highest in Michigan. 1996 BWL and City Council Assignments. The following pairing structure for BWL Commissioners and City Council members for 1996 was established based on wards: Commissioners Ward Councilmember John Strolle 1st Harold Leeman Ernest Christian 2nd Sandy Allen Peter Pratt 3rd Tony Benavides Eva Evans 4th Paul Novak Diane Royal At Large Ellen Beal Phillip Hassler At Large Joan Bauer David O'Leary At Large Rick Lilly William Lontz At Large Howard Jones This information will be communicated to the City Council members. Union Issue on BWL Safety Incentive Program. General Manager Pandy reported that the IBEW, Local 352 of Electrical Workers. has challenged the BWL's right to unilaterally cancel the 1%Safety Bonus. The union has written a letter stating their cause and has also filed a grievance. A confidential memo from Staff Attorney Larry Wilhite was handed out for review. Management plans to meet in a special conference with the union to discuss this matter with them. The Board will be apprised on the status of this issue. REMARKS BY COMMISSIONERS Commissioner Christian asked if it is the sense of the Board to continue quarterly meetings with the City Council to maintain communications. He suggested a social gathering to meet the new council members and for the Council to meet the new BWL Commissioners. Following discussion,the Commissioners agreed that the one-on-one meetings with their paired counterpart also is very important to enhance communication ties. PUBLIC COMMENTS No persons spoke. Board Meeting Minutes Page 132 November 28, 1995 EXCUSED ABSENCES BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER CHRISTIAN That the absences of Commissioners Lontz and O'Leary be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Royal, the Board adjourned at 6:32 p.m. �Zny Mary E. va, Secretary Filed: December 1, 1995 Marilynn Slade. City Clerk Page126 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday,November 28, 1995 The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz,Pratt, Strolle-6 Absent: Commissioners Lontz(out oftown on business)and O'Leary(business commitment)-2 The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN— SECONDED BY COMMSSIONER STROLLE That minutes of regular session of October 24, 1995,and Special Session of October 31, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS No communications received. COMMITTEE REPORTS There were no committee reports. Page 127 Board Meeting Minutes November 28, 1995 GENERAL MANAGER'S RECOMMENDATIONS HUMAN RESOURCES Res. No. 95-11-1 That Laurie Briggs, a Programmer Analyst for Information Systems Department.be awarded a total of$196.10 for suggestion proposal number 1995-151. to issue a Board- wide memo to inform departments of cost-effectiveness and availability of preformatted diskettes. --------------- By implementing this proposal, it is estimated that the BWL will realize a net savings of $1,211 in the first year. ---------------- BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-11-1 (Human Resources)be approved as submitted. Adopted unanimously. STEAM UTILITY Res. No. 95-11-2 Subject to receipt of General Motors Lansing Automotive Division's(LAD) authorization, the Lansing Board of Water and Light Commissioners authorize the General Manager to proceed with the design, purchase and installation of equipment to provide steam service to LAD Plants#2,#3 and#6 and staff to negotiate the specific terms and conditions of the Steam Supply Contract based on the following major tenets: => Steam(thermal energy)requirements for LAD Plants#2,#3 and#6 will be supplied by BWL. Based on an initial supply capacity demand of 350,000 lb./hr. => The BWL will construct an interconnecting main to supply the contracted steam requirements of LAD Plants#2,#3 and#6. BWL will recover the actual cost of the steam project plus 6%interest through rates paid by LAD. LAD's minimum annual contract purchase will be 1.031,600 Mlb./year. => LAD/BWL will enter into a Steam Supply Contract with a minimum term of 10 years. The LAD 1996 steam rate of$4.99/Mlb. will escalate at 5%per year for the first five(5)years of the contract. Board Meeting MinuL_ Page 128 November 28. 1995 Steam rate will be subject to a fuel cost adjustment clause and a condensate return adjustment. => LAD's steam rates will be cost of service based for the sixth through tenth years of the contract. LAD Plant#1 steam requirements will continue to be provided by the BWL under existing contract. ----------------- The authorization to proceed is the culmination of almost three years of efforts with GM to evaluate the option of the Board providing steam service to the GM plants cited and shutdown of GM's Plant#6 Powerhouse. The BWL proposal is based on the debt service for the approximately$7 million and increment pricing of the steam provided in the first year. Automatic 5%annual increases in the rate charged follow until the load becomes part of the existing steam rate base in the sixth year of the contract. Simple payback on the capital investment is less than two years. Over the ten year study period, significant savings will result for the BWL customers and for GM. BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER EVANS That Resolution 95-11-2 (Steam Utility)be approved as submitted. Adopted unanimously. General Manager Pandy stated that this is a significant event for the Steam Utility to be able to add 70 percent to its steam load with one pipeline. He noted that this sets the stage of continuing to enhance the Steam Utility into the district energy business as other steam utilities such as in Minneapolis, Cleveland, Chicago and Baltimore. They are all going to the district energy concept where they supply cooling in the summer time. With a bigger base load for heating, the BWL Steam Utility can perhaps justify putting in capital investments for cooling. Commissioner Christian congratulated Steam Utility Director Joette Woodard-Yauk and staff for their tireless efforts since 1993 in successfully negotiating an agreement to supply steam to the Lansing Automotive Division Plants Q., #3 and#6. General Manager Pandy reported that the 2.2 miles of 20 inch diameter steam line will start from the Eckert/Moores Park complex following the railroad right of way and then cutting north near Sexton High School into Fisher Body. Page 129 Board Meeting Minutes November 28, 1995 GENERAL MANAGER'S REMARKS General Manager Pandy briefed the Commissioners on the following items: District Energy Continues Its Overall Growth Trend. An article entitled,"District Energy Growth," INDEPENDENT ENERGY, Robert S. Seeley, November 1995, p.24-26, was handed out for review. The article gives a good overview of current trends in District Energy growth. Mr.Pandy stated that as the energy industry becomes more competitive in electricity,utilities are finding that by cogenerating and being in the double energy business. they can be more competitive. More and more of investor-owned utilities are starting steam utility subsidiaries to do what the BWL essentially has been doing for a long period of time. Linda Gardner Named Human Resources Director. Mr. Pandy announced the promotion of Personnel Manager Linda Gardner to Director of Human Resources effective January 1, 1996. Ms. Gardner will succeed retiring Human Resources Director Mark Vander Jagt who will leave his post on December 31, 1995. Mr. Pandy noted that Ms. Gardner is the first Afro-American female to become a director at the BWL in the utility's 110-year history. Dinner Honoring Mark Vander Jagt-December 19. The Board and Executive Staff will honor Human Resources Director Mark Vander Jagt at a dinner to be held immediately following the regular board meeting on December 19. The Board applauded Mark Vander Jagt's outstanding 27-year career with the BWL. Mr. Pandy stated that it is much to Mark Vander Jagt's credit that the BWL has had outstanding employees and labor relations, an excellent safety record, and that Mark deserves credit for grooming Linda Gardner to be his successor. Bob Cariano Named Safety Professional of the Year. Mr.Pandy introduced BWL Safety Administrator Bob Cariano,who was awarded the Safety Professional of the Year by the Michigan Safety Conference, Public Utility Division. To commemorate this award, each Commissioner was given a pair of new BWL safety glasses. The glasses can be changed from clear to shaded lenses for added protection from bright light and adjusted to fit personal comfort. Also available is another model of safety glasses to fit over eye glasses. Two-Car Crash Causes Power Outage in South Cedar Street Retail Area. General Manager Pandy reported on an outage incident that occurred November 28 in Lansing's south side as the result of a two- car crash that broke a utility pole. Safety Administrator Bob Cariano was driving on South Cedar Street and was one of the first people to see the accident. He immediately reported the problem to the BWL's operation center; and two crews started to repair the damage within ten minutes of the accident. This involved untangling the power lines and planting a new pole. Mr.Pandy commended the Line Department for their prompt response and restoration work during busy business hours. City Council Approves Sale of the BWL Main Office Building. A copy of City Council's Resolution #714, adopted November 20, 1995, approving the sale of the BWL main office building at 123 West Ottawa Street and associated parking lot located at 221 N. Capitol Avenue was handed out for reference. The Board of Commissioners approved the negotiated price of$5,157,375 at their regular meeting held Julv 25. 1995. Mr.Pandy reported that the BWL's agreement with Capitol Annex Limited Liability Company (Granger)provides for the payment of$50,000 as earnest money. The sum of$10,000 has already been received and acknowledged by the BWL. The additional earnest money in the amount of $40.000 is to be paid by Granger by December 7, 1995. The contract will terminate if not closed on or before June 30, 1996. That time period is to allow Granger to get their leases signed, to secure their financing,and to negotiate agreements with the City as to the joint use of the ramps to and from the basement garage areas from Michigan Avenue and from Ottawa Street,sharing of common areas and common area expenses,and the use of the floor currently being used by the Ingham County Circuit Courts. The BWL will deliver purchaser possession within a period of 16 months subsequent to the date Board Meeting Minu, Page 130 November 28, 1995 of closing and will endeavor to deliver possession prior to the expiration of the 16-month period by, in good faith. expediting its move to another location. New BWL Office Building Relocation Alternatives. General Manager Pandy told the Commissioners he is looking for their direction on selecting a suitable location for the new BWL office building. He presented three alternatives and reported that Technical Services Director John Elashkar will be working with an architect to assist the BWL in evaluating alternatives. Options for consideration include: (1) remodeling existing BWL facilities in the Pennsylvania Avenue and Haco Drive area, (2)purchasing and remodeling a privately-owned building in the area, and(3)building a new facility at the southwest corner of the intersection of Pennsylvania and Hazel Streets. Discussion relative to customer accessibility and employee parking was held. Mr. Pandy said that the southwest corner of the Pennsylvania and Hazel intersection is probably the better point of access. Following lengthy discussion, there was a sense that the Commissioners preferred a new building on the southwest corner of the Pennsylvania Avenue and Hazel Street intersection, as opposed to remodeling existing buildings, if it can be accomplished with the $5,157.375 proceeds from the sale. A generic design of what a new building might look like was handed out for review. Mr. Pandy said he plans to come back with a recommendation at the regular meeting in December with regard to engaging an architect and the estimated cost of a new building. Ottawa Power Station Development Status Report. General Manager Pandy gave an overview on the progress of the Ottawa Park Associates,Developers(OPAD)team in negotiating leases with two prospective major tenants for the Ottawa Station commercial redevelopment project. Mr. Pandy reported that negotiations are taking longer than anticipated due to the fact that one of the prospective tenants has hired a consultant to study the feasibility of creating a fitness facility in the Ottawa Station which study will not be completed until mid-December. The study will have to receive consideration by the prospective tenant's Board, which in all likelihood,will not be available for public presentation until mid- January 1996. Since the results of the study are critical to investigate the feasibility of developing a fitness facility as one of the tenants, OPAD is requesting a 30-day extension of time. Mr. Pandy emphasized that this undertaking is not an idle project. Progress is being made as the two major prospective tenants are spending significant money and time to determine the feasibility of their projects. Following discussion, the Board accepted the 30-day extension. There was consensus among the Commissioners that by the regular meeting of January 23, 1996, the two major prospective tenants should be prepared to show they are proceeding to negotiate leases. Mr.Pandy will report on progress made at the regular meeting on December 19. Capital Improvement Review Process. General Manager Pandy reported that Corporate Planning Director Roger Ophaug is working with the City of Lansing to help them form a capital improvement review process. The City currently does not have a means of prioritizing their capital projects. Update on Consumers Power Takeover Deal. A copy of a fact sheet prepared by BWL Communications Director John Strickler relative to the threatened Consumers Power takeover of the BWL was handed out. Mr. Pandy reported that Sandy Pensler--the financial broker who set up the takeover arrangement--appeared before the City Council's Committee of the Whole at their November 16 meeting to present his proposal to the council members. Mr. Pandy stated that numerous misrepresentations were made by Mr. Pensler with erroneous information. Minutes of the Council's Committee of the Whole meeting,prepared by Corporate Planning Director Roger Ophaug,were handed out for reference. Page 131 Board Meeting Minutes November 28, 1995 Mr. Pandy told the Board that ultimately he does not think this deal would be approved by City Council or the customers. however, the BWL remains cautiously vigilant. He wants to convey to the employees that the BWL must continue to focus on its mission--continue to provide low cost services in the most reliable and safe manner possible. Mr. Pandy stated that the"politics" is the responsibility of the Board and the General Manager by continuing to communicate the value of the BWL to the City. Water/Wastewater Rate Survey. A copy of a 1995 survey completed by Black&Veatch on Michigan water and wastewater rates was handed out. The survey covers municipal water and wastewater utilities for cities with service populations of 25,000 or greater. Graphical comparisons of typical residential, commercial. and industrial water and wastewater bills reflect higher rates in Lansing as compared to other Michigan municipalities. Mr. Pandy told the Board that while BWL water rates did not rank as favorably as other Michigan municipalities,our water rates compared well with other communities that have to soften their water. Many cities listed on the survey have lower water rates because they are dealing with lake or surface water which does not have to be softened. Lansing sewer rates are the highest in Michigan. 1996 BWL and City Council Assignments. The following pairing structure for BWL Commissioners and City Council members for 1996 was established based on wards: Commissioners Ward Councilmember John Strolle 1st Harold Leeman Ernest Christian 2nd Sandy Allen Peter Pratt 3rd Tony Benavides Eva Evans 4th Paul Novak Diane Royal At Large Ellen Beal Phillip Hassler At Large Joan Bauer David O'Leary At Large Rick Lilly William Lontz At Large Howard Jones This information will be communicated to the City Council members. Union Issue on BWL Safety Incentive Program. General Manager Pandy reported that the IBEW, Local 352 of Electrical Workers. has challenged the BWL's right to unilaterally cancel the 1%Safety Bonus. The union has written a letter stating their cause and has also filed a grievance. A confidential memo from Staff Attorney Larry Wilhite was handed out for review. Management plans to meet in a special conference with the union to discuss this matter with them. The Board will be apprised on the status of this issue. REMARKS BY COMMISSIONERS Commissioner Christian asked if it is the sense of the Board to continue quarterly meetings with the City Council to maintain communications. He suggested a social gathering to meet the new council members and for the Council to meet the new BWL Commissioners. Following discussion, the Commissioners agreed that the one-on-one meetings with their paired counterpart also is very important to enhance communication ties. PUBLIC COMMENTS No persons spoke. Board Meeting Minute. Page 132 Noveinber 28, 1995 EXCUSED ABSENCES BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER CHRISTIAN That the absences of Commissioners Lontz and O'Leary be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Royal, the Board adjourned at 6:32 p.m. 44 Mary E. va, Secretary Fled: December 1, 1995 Marilynn Slade. City Clerk Page 123 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT 1-110-JSEf'Iv CI j'i v! L-i(l SPECIAL MEETING-Octobcr 31, 1995 The Board of Commissioners met in special session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street,Lansing,Michigan, to discuss a matter concerning the disposition of Board of Water and Light property. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian, Hassler,Lontz,O'Leary,Pratt,Royal, Strolle-7 Absent: Commissioner Evans(out of town on business). The Secretary declared a quorum present. The Invocation and Pledge of Allegiance were led by Chairman Hassler. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC HAVE THE OPPORTUNITY AT THIS TIME TO ADDRESS THE COMMISSIONERS REGARDING THE AGENDA ITEM. No persons spoke. The Commissioners reviewed a Consumers Power Company proposal, conveyed to City Councilmembers by Mayor Hollister at the Council's regular meeting held October 30, 1995, offering to take over control of the Board of Water and Light's(BWL)steam and electric operations. General Manager Pandy told the Commissioners that Mayor Hollister made it clear to the City Council he is opposed to the offer and that he urged the Councilmembers to reject the takeover proposal by Consumers Power Company. Mr. Pandy briefed the Commissioners on the details of the proposal. which entails operating the BWL's Steam and Electric Utilities for a 75-year period. Mr. Pandy noted that the proposal does not include the BWL's Water Utility, however, it would directly impact its operations,by virtue of staff support the Water Utility shares with other BWL operations. Following discussion, the Commissioners spoke in a unified position supporting the rejection of Consumers Power's proposal. Special Board Meeting Minutes Page 124 October 31, 1995 RESOLUTION REJECTING PROPOSAL OF CONSUMERS POWER COMPANY TO TAKE OVER THE OPERATIONS OF THE BOARD OF WATER AND LIGHT STEAM AND ELECTRIC UTILITIES (95-10-9) WHEREAS, Consumers Power Company has submitted an offer to the City of Lansing to lease the Board of Water and Light electric and steam systems and to run them on behalf of the city for a period of 75 years, and WHEREAS, this offer has been characterized by Mayor David Hollister as a hostile takeover attempt by Consumers Power Company of one of the city's most valuable assets, and WHEREAS, in Mavor Hollister's words,the Consumers Power proposal leaves the City of Lansing at substantial risk,and WHEREAS, Consumers Power acknowledges in its proposal that it will raise electric rates a total of 30.5 percent in the first seven years of its operating agreement, thereby imposing a major hardship on all BWL electric customers, and WHEREAS, in return for this massive rate increase, Consumers Power promises service and reliability to BWL customers which is comparable to the service provided to CPCo customers throughout the State of Michigan. This means customers would experience twice the outage rate and three times the service restoration time the BWL currently delivers to its customers, and WHEREAS,for steam utility customers, the CPCo proposal makes no promises regarding rates and would put the question of future increases to the discretion of a "Rate Board." Further, no assurances are made regarding steam service and reliability issues, and WHEREAS, under its proposal, Consumers Power Company would seize control of the BWL's cash reserves and pension fund assets to use for any purpose it deems appropriate,and WHEREAS, Consumers Power would earn profits for its stockholders through this transaction by eliminating at least 200 positions and removing millions of dollars of purchasing power from the Greater Lansing area, and WHEREAS,The Board of Water and Light has proudly served the citizens of Lansing and the surrounding area for 110 years as a publicly-owned utility, and WHEREAS, this public ownership benefits the citizens of Lansing through local utility control and energy rates that are consistently the lowest in Michigan and among the lowest in the entire midwest. NOW, THEREFORE,BE IT RESOLVED, That the Lansing Board of Water and Light Commissioners rejects in the strongest possible terms the proposal of Consumers Power Company to take over the operations of the BWL steam and electric utilities. AND BE IT FURTHER RESOLVED. That the Board of Water and Light Commissioners urges members of Lansing City Council to categorically reject this hostile takeover of the Board of Water and Light. Page 125 Special Board Meeting Minutes October 31, 1995 Adopted by the following vote: YEAS: Commissioners Christian, Hassler,Lontz, O'Leary,Pratt. Strolle, Royal-7 NAYS: None ABSENT: Commissioner Evans. NEW BUSINESS General Manager Pandy briefed the Board on matters concerning two disgruntled former employees of the Board of Water and Light. One has asked the city to remove the General Manager and all Directors and Managers. The other has threatened to kill the General Manager. EXCUSED ABSENCES BY COMMISSIONER HASSLER-- SECONDED BY COMMISSIONER STROLLE That the absence of Commissioner Evans be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Royal, the Board adjourned at 6:20 p.m. *E. va, Secretary Filed: November 2, 1995 Marilvnn Slade, City Clerk Page 123 MINUTES OF BOARD OF COMMISSIONERS' MEETING ' LANSING BOARD OF WATER AND LIGHT LA 1-.1;L,.!3 i,;1('1' a2}(i( SPECIAL MEETING-October 31, 1995 The Board of Commissioners met in special session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street.Lansing,Michigan, to discuss a matter concerning the disposition of Board of Water and Light property. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Hassler, Lontz, O'Leary,Pratt, Royal, Strolle-7 Absent: Commissioner Evans(out of town on business). The Secretary declared a quorum present. The Invocation and Pledge of Allegiance were led by Chairman Hassler. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC HAVE THE OPPORTUNITY AT THIS TIME TO ADDRESS THE COMMISSIONERS REGARDING THE AGENDA ITEM. No persons spoke. The Commissioners reviewed a Consumers Power Company proposal, conveyed to City Councilmembers by Mayor Hollister at the Council's regular meeting held October 30. 1995, offering to take over control of the Board of Water and Light's (BWL)steam and electric operations. General Manager Pandy told the Commissioners that Mayor Hollister made it clear to the City Council he is opposed to the offer and that he urged the Councilmembers to reject the takeover proposal by Consumers Power Company. Mr. Pandy briefed the Commissioners on the details of the proposal,which entails operating the BWL's Steam and Electric Utilities for a 75-year period. Mr. Pandy noted that the proposal does not include the BWL's Water Utility, however, it would directly impact its operations,by virtue of staff support the Water Utility shares with other BWL operations. Following discussion, the Commissioners spoke in a unified position supporting the rejection of Consumers Power's proposal. Special Board Meeting Minutes Page 124 October 31, 1995 RESOLUTION REJECTING PROPOSAL OF CONSUMERS POWER COMPANY TO TAKE OVER THE OPERATIONS OF THE BOARD OF WATER AND LIGHT STEAM AND ELECTRIC UTILITIES (95-10-9) WHEREAS, Consumers Power Company has submitted an offer to the City of Lansing to lease the Board of Water and Light electric and steam systems and to run them on behalf of the city for a period of 75 years, and WHEREAS, this offer has been characterized by Mayor David Hollister as a hostile takeover attempt by Consumers Power Company of one of the city's most valuable assets, and WHEREAS, in Mayor Hollister's words, the Consumers Power proposal leaves the City of Lansing at substantial risk,and WHEREAS, Consumers Power acknowledges in its proposal that it will raise electric rates a total of 30.5 percent in the first seven years of its operating agreement, thereby imposing a major hardship on all BWL electric customers, and WHEREAS, in return for this massive rate increase, Consumers Power promises service and reliability to BWL customers which is comparable to the service provided to CPCo customers throughout the State of Michigan. This means customers would experience twice the outage rate and three times the service restoration time the BWL currently delivers to its customers, and WHEREAS, for steam utility customers, the CPCo proposal makes no promises regarding rates and would put the question of future increases to the discretion of a "Rate Board." Further, no assurances are made regarding steam service and reliability issues, and WHEREAS, under its proposal, Consumers Power Company would seize control of the BWL's cash reserves and pension fund assets to use for any purpose it deems appropriate, and WHEREAS, Consumers Power would earn profits for its stockholders through this transaction by eliminating at least 200 positions and removing millions of dollars of purchasing power from the Greater Lansing area, and WHEREAS,The Board of Water and Light has proudly served the citizens of Lansing and the surrounding area for 110 years as a publicly-owned utility,and WHEREAS. this public ownership benefits the citizens of Lansing through local utility control and energy rates that are consistently the lowest in Michigan and among the lowest in the entire midwest. NOW, THEREFORE,BE IT RESOLVED, That the Lansing Board of Water and Light Commissioners rejects in the strongest possible terms the proposal of Consumers Power Company to take over the operations of the BWL steam and electric utilities. AND BE IT FURTHER RESOLVED, That the Board of Water and Light Commissioners urges members of Lansing City Council to categorically reject this hostile takeover of the Board of Water and Light. Special Board Meeting Minutes Page 125 October 31, 1995 Adopted by the following vote: YEAS: Commissioners Christian,Hassler,Lontz, O'Leary, Pratt, Strolle,Royal-7 NAYS: None ABSENT: Commissioner Evans. NEW BUSINESS led former employees of General Manager Pandy briefed the Board on mattersto remove the Genera l Mantager and all Dire tors and e Board of Water and Light. One has asked the city Managers. The other has threatened to kill the General Manager. EXCUSED ABSENCES BY COMMISSIONER HASSLER-- SECONDED BY COMMISSIONER STROLLE That the absence of Commissioner Evans be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Royal, the Board adjourned at 6:20 p.m. Mary E.lpova, Secretary Filed: November 2, 1995 Marilynn Slade,City Clerk BOARD:OF WATER AIUD LIGHT`.: J > � " PUBLIC NOTICE .cr >- LL� — U SPECIAL MEETING o r. Tuesday, October 31, 1995 - 5:30 p.m. NOTICE IS HEREBY GIVEN, That a Special Meeting of the Board of Water and Light Commissioners of the City of Lansing, Michigan, will be held at 5:30 p.m. on Tuesday, October 31, 1995, in the second floor boardroom of the Board of Water and Light Office Building, 123 West Ottawa Street, Lansing, Michigan. Topic: Disposition of BWL Property Certified by: BOARD OF WATER AND LIGHT A • Say-" Mary orate S a Corporate ecretary Post: l 0/30/95 cc: BWL City: Board of Commissioners City Clerk's office Executive Staff City Council Office C. Jones/E. Stancliff (Security) Mayor's office M. Fales (Building Maintenance) Page 114 MINUTES OF BOARD OF COMMISSIONERS' MEETING Oie ]- 2- , , - LANSING BOARD OF WATER AND LIGHT _ d F;'E 2DO Tuesday, October 24, 1995 The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street, Lansing, Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian, Hassler, Lontz, O'Leary, Pratt, Strolle- 6 Absent: Commissioner Royal (out of town on business) Commissioner Evans (out of town) The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. New Commissioner Peter Pratt was introduced and welcomed by Commissioner Hassler. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN SECONDED BY COMMISSIONER STROLLE That minutes of rescheduled regular session of October 3, be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS A letter from Thomas J. Coates and Associates, Inc, regarding Ottawa Power Station Redevelopment was received and placed on file. Page 115 Board Meeting Minutes October 24, 1995 PERSONNEL COMMITTEE REPORT The Personnel Committee met on October 12, 1995, to review and discuss the following: 1. Pension Fund Investments 2. Performance Review for the Three Board-Appointed Positions Present were Commissioners Evans, Hassler, Strolle (Chair), and O'Leary. PENSION PLAN INVESTMENT REVIEW. The report of the Personnel Committee concerning the Pension Fund investments and related matters has been submitted to the Pension Fund Trustees for action. PERFORMANCE APPRAISALS. The Personnel Committee approved the following resolution and recommends Board adoption: Resolution Concerning Performance Appraisals (Resolution#95-10-1) WHEREAS, Performance evaluations and salary increases for the three positions reporting directly to the Board are administered according to the BWL Wage and Salary Plan for Non-Bargaining Unit Administrative employees; be it RESOLVED, That the General Manager, Internal Auditor and Corporate Secretary are eligible to receive salary increases effective as of July 1, 1995, according to the Fiscal 1995 Performance Increase Matrix; and RESOLVED FURTHER, That the ratings for the three persons reporting to the Board be hereby confirmed as follows: General Manager Joseph Pandy, Jr. - Rating in the range of 4.5 -4.99 Internal Auditor Kellie Willson - Rating in the range of 4.5 - 4.99 Corporate Secretary Mary Sova - Rating in the range of 4.5- 4.99 Respectfully submitted, John Strolle, Chair PERSONNEL COMMITTEE BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER O'LEARY That the report of the Personnel Committee, including Resolution 95-10-1, be approved as submitted. Adopted unanimously. Board Meeting Minutes Page 116 October 24, 1995 FINANCE COMMITTEE REPORT The Finance Committee met on October 24, 1995, to review the Fiscal Year 1994-95 audit of the Board of Water and Light (BWL). Present were Commissioners Christian (Chair), Hassler, Lontz, and Strolle. The Finance Committee reports that the review of the audit of the BWL Financial Statements for the year ended June 30, 1995, was held with representatives of Deloitte &Touche and BWL management. An overview of the financial results was presented by management and Deloitte &Touche. The auditors proposed no audit adjustments that in their judgment, either individually or in the aggregate, would have a significant effect on the BWL's financial reports. The auditors also reported that no material weakness in internal accounting control has come to their attention. The auditors reported that they experienced no difficulties in performing their audit and noted that they received full cooperation of management and staff. The recommendation of the Finance Committee is included with the General Manager's Recommendations to the Board. Respectfully submitted, Ernest J. Christian, Chair FINANCE COMMITTEE BY COMMISSIONER CHRISTIAN SECONDED BY COMMISSIONER STROLLE That the report of the Finance Committee, including Resolution 95-10-2, be approved as submitted. Adopted unanimously. GENERAL MANAGER'S RECOMMENDATIONS ADMINISTRATIVE (AUDITING) Res. No. 95-10-3 Copies of 1995 audit reports for the Board of Water and Light and for the Plan for Employees' Pensions of the Board of Water and Light and a copy of the report on the system of internal control were filed with City of Lansing officials by Deloitte &Touche on September 15, 1995. The audit report for the Board of Water and Light and the report on the system of internal control has been received and reviewed by the Finance Committee. The auditors found no significant items that warranted submission of a management letter. Page 117 Board Meeting Minutes October 24, 1995 The 1995 audit report for the Plan for Employees' Pensions has been received and reviewed by the Personnel Committee. The Corporate Secretary is directed to file copies of both audit reports and the report on the system of internal control with the State Treasurer as required by law. Publishing a condensed copy of the Board of Water and Light audit report in The Lansing State Journal is not required by law. However, it may be done at the discretion of the General Manager. -------------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER O'LEARY That Resolution 95-10-3 be approved as submitted. Adopted unanimously. COMMUNICATIONS Res. No. 95-10-4 Authorize Market Strategies, Inc.,to conduct a semi-annual customer attitude survey at a price not to exceed $20,000. ------------------- The survey is used to determine the perception of residential customers toward the BWL and its services, and to measure performance of certain communications programs and customer satisfaction for the Share the Success program. Additional questions this Fall may also probe preferences of residential customer for service enhancements. -------------------- BY COMMISSIONER O'LEARY SECONDED BY COMMISSIONER STROLLE That Resolution 95-10-4 be approved as submitted. Adopted unanimously. HUMAN RESOURCES Res. No. 95-10-5 That Lois K. Hagy, a Customer Billing Representative for Customer Accounts, be awarded a total of$268.68 for suggestion proposal number 1.994-029, to update the automatic direct bank payment form. Board Meeting Minutes Page 118 October 24, 1995 -------------------- By implementing this proposal, it is estimated that the BWL will realize a net savings of$1,936.80 in the first year. -------------------- Res. No. 95-10-6 That Thomas Hanson, a Lineworker for Overhead Line Construction, be awarded a total of$1,228.60 for suggestion proposal number 1992-238,to provide training and thirty (30) extension switch sticks to boulevard mechanics to enable them to open and tag 480-volt fused cut-outs. ------------------- By implementing this proposal, it is estimated that the BWL will realize a net savings of$11,536.00 in the first year. ------------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-10-5 and 95-10-6 be approved as submitted. Adopted unanimously. Thomas Hanson was in the audience and introduced. PENSION Res. No. 95-10-7 That Joseph E. Raney, Electrician in Electric Construction and Maintenance Department, be placed on a disability pension of$1,636.35 per month effective August 11, 1995. He has selected a straight pension with Workers' Compensation Offset. -------------------- Mr. Raney has worked for the BWL for 22.53 years and is 52 years of age. -------------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER O'LEARY That Resolution 95-10-7 be approved as submitted. Adopted unanimously. Page 119 Board Meeting Minutes October 24, 1995 WATER Res. No. 95-10-8 That the Board of Water and Light (BWL) authorize the General Manager and Corporate Secretary to enter into a Buy/Sell Agreement for the purchase of the following parcel of land: (vacant land on S. Washington Road, Lansing) A parcel of land in the SE 1/4 of Section 17, T3N, R2W, Delhi Township, Ingham County, Michigan, said parcel particularly described as follows: Beginning at a point on the east line of Lot 8 of supervisor's Plat No. 14, Delhi Township, Ingham County, Michigan, as recorded in Ingham County Plats, said point of beginning being 317 feet south of the south line of Lot 13 of said plat; thence north 200 feet along the east lines of Lots 8, 9, & 11 of said plat to a point that is 117 feet south of the south line of Lot 13 of said plat;thence easterly parallel to the south line of Lot 13 of said plat 200 feet; thence south 200 feet to a point that is 317 feet south of the south line of Lot 13 of said plat; thence westerly 200 feet parallel to the south line of Lot.13 of said plat to the point of beginning, containing 40,000 square feet or 0.918 acres of land, more or less, and subject to easements and restrictions of record. -------------------- The Buy/Sell Agreement will be executed through Prudential Hubbell Realty for the purchase of this parcel. The purchase of this parcel was anticipated as part of the previously authorized Capital Project#85-47, Authorization 9200. (Land acquisition and engineering for well#307C as part of the State of Michigan Act 307 Well Replacement Program). Purchase cost of this parcel is$15,000.00 not including fees and closing costs. -------------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER O'LEARY That Resolution 95-10-8 be approved as submitted. Adopted unanimously. Board Meeting Minutes Page 120 October 24, 1995 EXECUTIVE SESSION Roll Call was taken to go into Executive Session: Commissioners Christian, Hassler, Lontz, O'Leary, Pratt, Strolle -6 Yes Absent: Commissioners Evans and Royal EXECUTIVE SESSION: 5:45 p.m. Discussion on Legal Opinion of General Manager's contract. Return to regular Board Meeting: 6:03 p.m. UNFINISHED BUSINESS ELECTRIC SYSTEM CONTROL DIVISION -(Item Tabled at October 3, 1995 Meeting) MOTION MADE BY COMMISSIONER O'LEARY SECONDED BY COMMISSIONER LONTZ Untable Resolution No. 95-9-6 from the October 3, 1995 Board Meeting. Adopted unanimously. Discussion was held on the decision to retain the firm of Kheder&Associates for lobbying services. (Res. No. 95-9-6) Tabled Resolution Approve recommendation to retain the firm of Kheder&Associates for professional services relative to lobbying at the State level. Major initiatives to be included are those relating to recodification of the utility code, and potential restructuring of the Electric Utility industry and Michigan Public Service Commission. The cost of such service will be a fee of$30,000. ($2500 per month for 12 months subject to 30 day cancellation by either party). -------------------- Other bidders were: McKinney&Associates and Knight Consulting. Kheder& Associates was selected as the best professional firm to represent the Board's interest in the Michigan Public Service Commission recodification. -------------------- Page 121 Board Meeting Minutes October 24, 1995 BY COMMISSIONER O'LEARY SECONDED BY COMMISSIONER CHRISTIAN OPPOSED BY COMMISSIONER STROLLE That Resolution 95-9-6 be approved as submitted. GENERAL MANAGER'S REMARKS Bob Cariano, BWL Safety Administrator, was congratulated on being awarded SAFETY PROFESSIONAL OF THE YEAR by the Michigan Safety Conference, Public Utility Division. General Manager Pandy handed out an article on the decision by Judge Giddings on the proposed settlement of Consumers Power's current rate case. Letter from Bill Cook on the off-peak power purchase from ENRON Power Marketing, Inc. was distributed. Discussion was held on the effect of purchasing power from ENRON, and its affect on Belle River purchased power contract. General Manager Pandy handed out a copy of a letter from Relume Corporation. A conference will be held to discuss new technology of traffic and pedestrian signals. A letter from Brian Cooper from Electric Coordination and Support Department giving an update on the AM/FM Project was distributed. Nancy Tarras was acknowledged for her work with NATIONAL NIGHT OUT AGAINST CRIME. General Manager Pandy updated the Commissioners on potential tenants for Ottawa Station Redevelopment by Ottawa Park Development Associates. General Manager Pandy reported he met with Bob Homan from Delhi Township on billing the township for fire hydrants. The Commissioners indicated they did not want to add this to customers water bills for the Township Commissioner Lontz asked about how progress on redevelopment of Ottawa Station will be documented. General Manager Pandy responded that he is working on various approaches for producing a video recording. General Manager Pandy announced that sale of the BWL Main Office Building to Granger is proceeding, and approval by the City is likely in the near future. Treasurer/Controller Tousley announced that Consumers Power Company had secured a contract with General Motor's outstate plants. General Manager Pandy announced that General Motors has delayed making a decision on BWL providing steam to Fisher Body. A copy of the Standing Committees for Fiscal Year 1995-96 handed out by Commissioner Hassler. EXECUTIVE: Commissioners Hassler, Evans, O'Leary FINANCE: Commissioners Christian, Hassler, Lontz, Royal Alternates: Commissioners O'Leary, Strolle PERSONNEL: Commissioners Strolle, Evans, O'Leary, Pratt Alternates: Commissioners Lontz, Christian Board Meeting Minutes Page 122 October 24, 1995 REMARKS BY COMMISSIONERS PUBLIC COMMENTS No persons spoke. EXCUSED ABSENCES BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER O'LEARY That the absences of Commissioners Evans and Royal be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Lontz, the Board adjourned at 6:40 p. I. Ros ary Sulliva Assistant Secretary Filed. October 27, 1995 Marilynn Slade, City Clerk Page 97 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT Tuesday,October 3, 1995 The Board of Commissioners met in rescheduled regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street,Lansing, Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz, O'Leary, Strolle-6 (Two Board vacancies to be filled.) Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler in memory of Clarence G. Pincumbe who retired from the BWL in 1988 as Treasurer/Controller, and passed away on September 5, 1995. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER STROLLE That minutes of regular session of August 22. 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. Llovd Teets of 116 E. Elm Street,Lansing, stated that he was disappointed to learn that only four proposals were received for development services on the Ottawa Station redevelopment project. He asked for information on the selection process and whether the meetings that took place were open to the public. Chairman Hassler summarized the selection process that took place at the Committee of the Whole meetings held September 12, 1995, and October 3, 1995,both of which were properly posted. Lloyd Teets asked if General Manager Pandy had any interests in the two final proposals being considered. Page 98 Board Meeting Minutes October 3, 1995 Chairman Hassler responded that General Manager Pandv removed himself from the entire selection and evaluation process, including the final decision to be made by the Board. General Manager Pandy told Mr. Teets that he has no interests in any of the proposals. He recused himself from consideration of all the proposals because he has partnerships with people involved in two of the development firms. Councilmember Paul Novak thanked the Board for allowing him to participate on one of the committees that reviewed the various development proposals. He noted that one of the issues discussed at length in the committee process and with the potential developers was the extent to which ratepayers would be held harmless by whatever type of development proposal the Board ultimately implements. He stated that for purposes of going forward and authorizing BWL staff to negotiate a specific development contract and implementing a development proposal, the manner in which ratepayers would be harmless needs to be more specifically articulated. As an example, he said more in depth financial analysis needs to be performed and some type of mechanism that articulates the manner in which ratepayers will be held harmless needs to be incorporated into the proposals. The financial analysis should indicate what the cost to the ratepayers would be if neither proposal is implemented. For instance the BWL ratepayers would incur costs if nothing is done to the Ottawa Station,just for purposes of keeping it in a state where it can successfully be developed at some future point. He said that those costs, as well as the costs of assessing or addressing environmental liabilities that may occur at the property, should also be included in the analysis. Councilmember Novak indicated that he had the sense each of the developers was tentative about the prospects for success of a second hotel in downtown Lansing. He urged that in reviewing aspects of the proposals that include hotel development,to be careful about the manner in which a hotel would be developed. He suggested making that contingent upon securing tenants in the development proposal as a whole that would materially increase the need for hotel space in the downtown Lansing area. Councilmember Novak also spoke with respect to retaining a lobbying firm at the state level. He suggested that there are such fundamental and radical changes going on in the electric utility industry at the state level in terms of the manner in which regulation or deregulation is going about. He said it would behoove the Board to consider retaining a specialist who participates in that process. He noted that if the BWL is shut out of the process, there is no one speaking for municipal utilities in the state. The BWL-- being Michigan's largest municipal utility--has something that can be positive and would be added to the whole deregulation atmosphere at the state capitol. He encouraged that whichever firm is selected to very strongly articulate the BWL's preference for keeping the regulatory process public. He said that currently before the Michigan Public Service Commission(MPSC)are a variety of proposals that determine the manner in which rates are set between different electric utilities and their customers, specifically industrial customers with privately negotiated and secret contracts. Those proposals are not in the interest of the ratepayers of the state as the whole,nor in the interest of the BWL, nor in the interest of having a procompetitive and a regulatory policy at the state level that benefits all customers. He urged the Board to articulate to the potential lobbyist the BWL's preference that state regulatory implementation at the MPSC cannot be done in a secretive manner. COMMUNICATIONS A thank v_ou letter was received from Mr. and Mrs. Gerald Williams for the tribute dinner hosted in their honor. Placed on file. Board Meeting Minutes Page 99 October 3, 1995 An invitation was received from Judy Raponos, Chairperson of the Michigan Council for Arts and Cultural Affairs, inviting the Commissioners to attend the Council's annual meeting to be held October 5 -6, 1995. Placed on file. A letter was received from Irving W. Knobloch offering suggestions for the redevelopment of the Ottawa Power Station. Placed on file. FINANCE COMMITTEE REPORT The Finance Committee met on August 22, 1995,with the Board's Internal Auditor. Kellie Willson,to receive her quarterly report. Present were Commissioners Christian(Chair), Hassler. Lontz, and Strolle. As follow-up to previous discussion with the Finance Committee, Internal Auditor Kellie Willson handed out a copy of a proposed Internal Audit Charter, defining the purpose, authority, and responsibility of the internal auditing department. This charter is required by the Standards for the Professional Practice of Internal Auditing. Ms. Willson also presented an overview of internal audit activities for the quarter ended June 30, 1995. Projects included a review of cellular phones. An internal audit report on cellular phones identified issues to consider to improve management's oversight of communications. The Internal Auditor is serving on the Process Analysis Task Force assigned to look for ways to identify work processes and find ways to both improve effectiveness and lower costs. Ms. Willson also reported that she is continuing to pilot Systems Assessment. This audit approach actively involves department managers in assessing their major processes, and identifies key process and quality indicators. The Finance Committee presents the following resolution for Board approval: Approval of Internal Audit Charter (Resolution 95-9-1) WHEREAS, internal auditing standards require a formal,written charter for internal audit, and. WHEREAS, the Standards for the Professional Practice of Internal Auditing require the charter to define the purpose,authority,and responsibility of the internal auditing department, and WHEREAS, the Internal Audit Charter has been reviewed with management and the Finance Committee for input. NOW. THEREFORE.BE IT RESOLVED the Board of Commissioners hereby approves the Internal Audit Charter as presented. Respectfully submitted Ernest Christian, Chair FINANCE COMMITTEE Page 100 Board Meeting Minutes October 3, 1995 INTERNAL AUDIT CHARTER Statement of Purpose The internal audit function is that part of management responsible for independent appraisals of the Board of Water and Light's activities and performance. Internal auditing reviews financial and operating activities as a service to the Board of Commissioners and all levels of management. Internal auditing provides analyses, appraisals,recommendations, counsel, and information to help managers fulfill their responsibilities. Independence The Internal Auditor is appointed annually by the Board of Commissioners and reports to them through the Chair of the Finance Committee. For administrative purposes, the Internal Auditor also reports to the Director and General Manager. Authority and Responsibility The internal audit function has full and complete access to all activities, records, property, and personnel of the Board of Water and Light. The internal audit function has no direct responsibility or any authority over any of the activities or operations of the BWL. Definition of Audit Scope The scope of internal auditing encompasses the examination and evaluation of the adequacy and effectiveness of the Board of Water and Light's system of internal control and the quality of performance in carrying out assigned responsibilities. It includes: • Reviewing and evaluating the reliability and integrity of financial and operating information and the means used to identify, measure,classify, and report such information. • Reviewing and evaluating the systems established to ensure compliance with those policies, plans. procedures, laws, and regulations that could have a significant impact on operations and reports. This involves determining whether the Board of Water and Light is in compliance. It also includes recommending to management any policies or procedures that will improve the operations and efficiency of the Board of Water and Light. • Reviewing and evaluating the means of safeguarding assets and,as appropriate, verifying the existence of such assets. • Reviewing and appraising the economy and efficiency with which resources are employed. • Reviewing and evaluating operations or programs to determine whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned. BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER EVANS That the report of the Finance Committee, including Resolution 95-9-1.be approved as submitted. Adopted unanimously. Board Meeting Minutes Page 101 October 3, 1995 COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met on September 12, 1995, to discuss the following items: 1. Integrated Resource Plan 2. Ottawa Station Redevelopment 3. Fiber Optic Communication Project 4. Lake Lansing Landfill 5. Michigan Public Service Commission Recodification Present were: Commissioners Christian, Evans,Hassler.Lontz, O'Leary and Strolle. (Two Board positions to be filled) Integrated Resource Plan. Dave Bolan, Senior Engineer-Electric Planning&System Studies, summarized the Energy Policy Act of 1992 at the public hearing held on September 12. 1995. The purpose of the Act is to provide for improved energy efficiency. The Act covers energy efficiency reforms and amends the Public Utilities Regulatory Policies Act(PURPA)of 1978 by including the requirements that a utility must decide on whether or not integrated resource planning is necessary. BY THE COMMITTEE OF THE WHOLE: Resolution A doptiniz New Federal Standards on Integrated Resource Planning for New Enemy Resources (Resolution 95-9-2) WHEREAS, the Board of Water and Light of the City of Lansing has a utility who is involved in the generation, transmission and distribution of electricity; and WHEREAS, the Board of Water and Light of the City of Lansing has a utility whose electric retail sales exceed 500 gigawatt-hours(GWhrs);and WHEREAS, the Board of Water and Light of the City of Lansing meets the above criteria subject to the Energy Policy Act of 1992 amendments to the Public Utilities Regulatory Policies Act(PURPA)of 1978 on Integrated Resource Planning,be it. RESOLVED.That the Commissioners of the Board of Water and Light of the City of Lansing,Michigan, hereby adopts the following standard for Integrated Resource Planning: The Board of Water and Light w411 emplov Integrated Resource Planning as defined in the Energy Policy Act of 1992. Redevelopment of Ottawa Power Station. Each of the four developers was given an opportunity to outline their plans for the Ottawa Power Station redevelopment project. The following representatives presented a highlight of the project master plan: Page 102 Board Meeting Minutes October 3, 1995 Developer/ Representative Development Firm Robert J. Morris - City Visions, Inc. President Retail,a theater, restaurant. offices, hotel suites. apartments, and multi-purpose rooms Thomas J. Coates - Thomas J. Coates and Associates President Eight theaters, a sports bar, a hotel, health club with an adjoining restaurant, multi-family housing,and office space Todd C. Ciavola - Compass Development Property Manager Offices.Museums, special use space, theater, restaurants, residential units,and hotel Charles J. Clark - Ottawa Park Associates,Developers(OPAD) Partner A technical center, a health club,one floor of shops and restaurants, a museum,offices and a hotel and apartments The Committee of the Whole reports that General Manager Pandy has filed a conflict of interest letter with the Board,and has taken himself away from the evaluation process due to his involvement in partnerships with two of the developers. The preliminary evaluation process was turned over to a task force of three executive staff members to review and evaluate the proposals. The Task Force members are: • John Elashkar,Director of Technical Services • Dana Tousley, Treasurer/Controller • Lawrence Wilhite. Staff Attorney The task force presented an overview of the process which took place in their preliminary review and evaluation of proposals. The process included meeting with a community advisory group on Ottawa Station and separate meetings with each of the four developers to insure that all questions were answered and proposals were understood. The task force members reported on financial criteria used in evaluating the proposals. Each proposal was graded according to various components. Key drivers in narrowing the list of potential Ottawa Station developers included(1) risk to the ratepayers, (2)the developers' financial strength,and(3) the strength of the tenants. Following discussion on the findings, the list of potential developers was narrowed to the following two finalists: • Ottawa Park Associates,Developers • Thomas J. Coates&Associates,Inc. Board Chairman Phillip Hassler noted that the Commissioners recognize their first obligation is to insure that BWL customers will not bear any expense in utility rates for Ottawa Stations redevelopment. The Board of Commissioners also recognizes its role in assisting the City with economic development, with resultant jobs, tax revenues, and improved public spaces along Lansing's riverfront. In order to provide for a proper and thorough review of the most viable development proposals, Chairman Hassler formed the following three subcommittees of Commissioners to interview and question the developers: Board Meeting Minutes Page 103 October 3. 1995 Subcommittee Alembers Subconnnittee Focus Financial To evaluate the developers' financing Commissioners Hassler, Christian package Staff Support: Treasurer/Controller Dana Tousley Developmental To evaluate the feasibility of the Commissioners Lontz, O'Leary development Staff Support: Staff Counsel Larry Wilhite City Planning Director Dennis Sykes Fourth Ward Councilmember Paul Novak BWL Participation To evaluate amount of space to be Commissioners Evans, Strolle occupied by BWL compared to other Staff Support: Technical Services Director building alternatives John Elashkar The General Manager was directed to bring the expertise of outside legal counsel in a role to assist each of the subcommittees in their analysis of important issues to be considered. Authorization to Narrow List of Ottawa Station Development Proposals (Resolution 95-9-3) RESOLVED, That the list of potential Ottawa Station developers be narrowed to the following: • Ottawa Park Associates,Developers • Thomas J. Coates&Associates, Inc. RESOLVED FURTHER That a subsequent Committee of the Whole meeting be held prior to the next regular Board meeting to review the work of the Financial, Developmental. and BWL Participation subcommittees. If a consensus is reached, the Board may take action on selecting a final developer at the next regular Board meeting. Fiber Optic Communication Project. Bill Cook.Director of Electric System Control,presented a background overview of the Fiber Optic Project initiated in 1993 for a fiber optic backbone around the BWL system. The purpose of the system was to install internal communication capabilities to tie voice. SCADA. and data between BWL major facilities and substations. In 1994, with the remodeling of the Penn/Hazel Street complex and the development of Local Area Network(LANs)across the BWL system, another project was initiated involving the development of fiber optics at the Penn/Hazel complex. In March 1995, a task force was initiated to investigate BWL communication needs and effect implementation of these projects. The task force recommends the following: 1. That Phase I of the fiber optic project be redefined to be as outlined on the Fiber Optic Logical Diagram. The justification for the recommendation is: (a) Provide for needed data communication linking critical BWL facilities together. Thus enabling commonality of a corporate database accessible through distributed processing. (b) Enable the mainframe computer to be relocated to BESOC Page 104 Board Meeting Minutes October 3, 1995 (c) Act as a pilot for fiber optic communications at the BWL prior to expanded phases of fiber optic backbone system. (d) Position the BWL for distribution automation, two wav customer interaction and providing customers with the ability to interconnect their facilities. (e) Provide for sale or expansion capability due to the implementation of excess fiber. 2. That the fiber optic backbone Phase 1 and the Penn/Hazel fiber optic project be combined and handled as a single project. The basis for this recommendation is: (a) A coordinated fiber optic effort across the BWL. (b) Commonality of design, maintenance considerations,and fiber optic objectives. 3. That due to this scope change,the fiber optic backbone budget of$1,680.000 be modified for a total of$850.000, with only Phase 1 of the backbone project and the Penn/Hazel project being implemented. Future system fiber optic development phase(s) will be treated as individual projects justified on their individual merits. 4. That Fiber Optic Communication capital expenditures in Fiscal Year 1996 be increased from$298.000 to$850,000. The total budget for Phase 1 and the Penn/Hazel project was originally estimated at$258,000.and $100.000 for Penn/Hazel. To date, less than$25,000 has been spent on this project. The change in the estimate is a result of. (a) A looped fiber backbone route is required due to the canceling of subsequent phases at this time as well as the moving of the mainframe. (b) The inclusion of the Dye Water Conditioning Plant. (c) The possible inclusion of the LPD Radio Lab. (d) The original estimate was a"conceptual estimate," where the new estimate is more detailed. BY THE COMMITTEE OF THE WHOLE: Resolution Approvinjz Redefined Fiber Optic Project (Resolution 95-9-4) RESOLVED. That the recommendation to redefine the fiber optic project. as presented by staff,be approved. Lake Lansing Landfill. John Elashkar,Director of Technical Services, reported on a problem at the North Lansing Landfill site. He advised that groundwater at the North Lansing Landfill is being impacted by selenium and sulfate that are leaching from portions of saturated ash. A rising water table observed in this area since monitoring began in 1980, has caused ash in the western portions of Area I to become saturated. As long as the water table remains at or above its current elevation, these elements are likely to leach for decades. It was noted that impacts of the Motor Wheel Disposal Site and Groesbeck stormwater diversion projects are not clear at this time. BWL staff will be working with a consultant for an interim Board Meetins Minutes Page 105 October 3, 1995 response action consisting of further assessment and continued monitoring. As part of this action, new monitoring wells will be installed south of the facility to detect and track southward migration of the plume. The BWL plans to prepare a hydrogeologic report after the Motor Wheel and Groesbeck projects are better defined. This report will describe the impacts of these projects on groundwater at the North Lansing Landfill, and the anticipated transport of selenium and sulfate leaching from the landfill. Staff will continue to keep the Board appraised on this important matter as more information becomes available. Michigan Public Service Commission Recodification. Bill Cook. Director of Electric System Control, summarized the issues and various positions of the utilities in the movement toward a more competitive environment for the electric utility. He presented background information on the recodification of the Michigan Public Service Commission rules. He noted that the Governor and the legislature are moving toward deregulating and promoting competition. A group of electric and gas utilities in Michigan and surrounding states known as the Joint Utility Coalition prepared a final draft for filing with the Michigan Jobs Commission. Because the BWL was invited to join the coalition late in the process, our participation was limited.thus the BWL declined to be a signatory to the final coalition document. dated August 24. 1995. These reports are to be submitted to Governor Engler by mid-September. The Governor plans to develop his plan for restructuring the electric industry for submittal to the legislature by the end of the year. Mr. Cook presented a comparative overview of the different issues between the Joint Utility Coalition proposals and"Proposal M." the proposed recodification of the Michigan Public Service Commission rules. An action plan to be implemented by the BWL was reviewed and discussed. Following discussion, the Commissioners concurred that the BWL should continue its involvement in developing strategies to address deregulation and competitive issues. Staff will return to the Board with a recommendation to obtain the expertise of a lobbyist to work with the BWL on this issue. Respectfully submitted. David O'Leary, Chair Pro Tern COMMITTEE OF THE WHOLE BY COMMISSIONER O'LEARY-- SECONDED BY COMMISSIONER STROLLE That the Committee of the Whole Report, including Resolutions 95-9-2. 95-9-3. and 95-9-4 be approved as submitted. Adopted unanimously. COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met again on October 3, 1995, to consider the two finalist proposals for the redevelopment of the Ottawa Power Station. Present were Commissioners Christian. Evans,Hassler.Lontz, O'Leary, and Strolle. (Two Board vacancies to be filled.) The Committee reports that the Commissioners recognize this decision will have a significant impact on the future of Lansing's downtown development. More importantly, the Board is cognizant that their first obligation is to insure that BWL customers will not bear any expense in additional utility rates for the redevelopment of the Ottawa Station. The overriding issue in the Board's deliberations was to protect the utility's customers. Page 106 Board Meeting Minutes October 3, 1995 The process to redevelop the Ottawa Power Station started in 1993 when its generation equipment was retired. The series of events that have since taken place are outlined: DATE ACTION 1993 • Ottawa Station generation equipment retired June 1994 . Task force assigned to analyze alternatives to make Ottawa Station available for commercial development November 1994 . Task force report recommended pursuing commercial development January 1995 . Ottawa Station Citizen Advisory Committee comprised of 12 citizens was formed January 1995 . BWL began contacting potential developers February 1995 . BWL General Manager attended a seminar on"Development of Urban Destination Projects" March 1995 . Request for Qualifications sent to 46 developers and 24 Lansing area vendors April 1995 . Qualifications reviewed by BWL staff June 1995 a Bids received for demolition/salvage September 1995 a Four development proposals received September 1995 • BWL Commissioners assigned to subcommittees to review the two finalist proposals October 3, 1995 . BWL Commissioners reviewed the reports of the following subcommittees (attached) (1) Financial Committee (Attachment 1) (2) Development Committee (Attachment II) (3) BWL Participation Committee (Attachment III) The Commissioners wish to recognize the input made by Councilmember Paul Novak and Dennis Sykes, Director of Planning&Neighborhood Development for the City of Lansing. The Board also acknowledges the participation of the special citizens' advisory group(Attachment IV-Ottawa Advisory Committee). Without the comments and feedback of all of these individuals, the Board's task would have been made much more difficult. Board Meeting Minutes Page 107 October 3. 1995 BY THE COMMITTEE OF THE WHOLE: RESOLUTION SELECTING DEVELOPER FOR THE OTTAWA POWER STATION REDEVELOPMENT (#95-9-9) WHEREAS, the BWL has solicited proposals for Development Services in connection with the Redevelopment of the Ottawa Power Station, and WHEREAS, the following developers submitted proposals in response to the request for Development Services: 1. City Visions, Inc. 2. Compass Development. Inc. 3. Ottawa Park Associates.Developers(OPAD) 4. Thomas J. Coates and Associates(Coates) WHEREAS,a staff task force, reviewed the proposals, interviewed the developers,and recommended that the Coates and OPAD proposals merited further consideration,and WHEREAS,three(3)subcommittees were assigned by Board Chair Phillip Hassler to review the Financial,BWL Participation, and Developmental aspects of each proposal, respectively, and WHEREAS, each subcommittee reviewed the proposals.developed questions. interviewed the developers,and submitted a report- and WHEREAS.the Board deliberated the selection of a developer at a Committee of the Whole meeting of the Board and public comments were requested. NOW, THEREFORE. BE IT RESOLVED the Commissioners of the Board of Water and Light hereby selects Ottawa Park Associates,Developers(OPAD)as the developer for the Ottawa Station redevelopment,and staff is directed to negotiate the necessary documents, including but not limited to,a Development Agreement and Ground Lease to implement the redevelopment of the Ottawa Power Station,and RESOLVED FURTHER,That staff is directed to report to the Board within ninety(90) days from this date regarding negotiations with the developer and any related matters. No agreements will be executed until all documents and contracts are reviewed and approved by the Board. Respectfully submitted, Dave O'Leary, Chair Pro Tem Committee of the Whole BY COMMISSIONER O'LEARY-- SECONDED BY COMMISSIONER EVANS That the Committee of the Whole Report including Resolution 95-9-9,be approved as presented. Adopted unanimously. ATTACHMENT I Report of Financial Issues Committee, Ottawa Redevelopment Proposals Board Members: Phillip Hassler, Ernest Christian Staff. Dana Tousley Issues The committee focused on the following issues: 1. Desirable terms and conditions of lease to developer 2. Risks associated with financing method and alternatives 3. Potential tax and insurance issues Process The committee met on Friday, September 15, 1995, to organize itself and discuss legal issues with outside counsel. The committee met again on Tuesday, September 26, 1995, with each of the two remaining developers and evaluated their responses to a series of questions. The questions asked of each developer attempted to evaluate the financial risks to BWL customers, the developer's ability to comply with BWL lease terms, and the level of interest and financial strength of the proposed tenants. Findings and Recommendation Both proposals contemplate a negotiated development agreement and a negotiated ground lease for the land and building shell. The committee has received input from outside counsel regarding the issues involved in any development agreement and ground lease. BWL owned property would remain exempt from property taxes, but developer owned property would probably be subject to property taxes. BWL occupancy is handled differently by the two proposals, but that issue is extraneous to choosing a developer to proceed with redevelopment of Ottawa Station. The Thomas Coates & Associates proposal would require the BWL to pay site remediation and preparation costs and does not propose any recovery of these costs. They indicated that if the BWL needed a non-subordinated lease, then an agreement between the BWL and any lender would be necessary to protect BWL ownership interests. This proposal has indications of interest from two potential tenants. The development team, as assembled, certainly has the financial strength and the market knowledge to pull together a financially feasible project. The Ottawa Park Associates proposal indicates a willingness to pay the BWL site remediation and preparation costs, reducing BWL financial risk to zero. They indicate they could finance the project with a non-subordinated lease, which would protect BWL ownership interests. The proposal has indications of interest from six financially strong potential tenants. The Financial Issues Committee recommends staff proceed to negotiate a development agreement and ground lease with Ottawa Park Associates. ATTACHMENT II REPORT OF DEVELOPMENT COMMITTEE, OTTAWA REDEVELOPMENT PROPOSALS Members: Commissioner William Lontz, Council Member Paul Novak, Commissioner David O`Leary, City Planning Director Dennis Sykes. Staff. Lawrence H. Wilhite Obiective: Based on the written charge from Chairman Hassler, the Committee developed the following objective: Present an evaluation to the Committee of the Whole by October 3, 1995 as to which development plan contains the most desirable mix of uses for the Ottawa Station development (6.2 acres), taking into account community concerns, downtown synergy, market demographics and overall benefit to the economic development of the City of Lansing with a corresponding lack of risk to the Board of Water and Light. Deliberations: The Committee met on September 19, 1995 for organizational purposes, and then met with each developer on September 26, 1995. The Committee lastly met on September 29, 1995 to review its findings and reach consensus. Recommendation: The OPAD proposal presents the best opportunity to meet the Committee's objectives if, and only if, OPAD is able to deliver on its promise of major tenants. Thus, the Committee's recommendation to select OPAD is conditioned upon the group making good on its promise to deliver commitments from its proposed tenants within ninety(90) days. At the end of this period, this Committee recommends that the BWL re-evaluate the proposed uses and tenants. Analysis: The strength of the OPAD proposal is its tenant base. If OPAD is successful in procuring these tenants, the project is relatively simple and risk free. Conversely, The proposal relies heavily on certain uncommitted tenants. If the tenants do not materialize, the proposal is lifeless. On a positive note, the OPAD proposal represented the more significant involvement of local companies. The Committee encourages OPAD to become more involved with concerned community groups. In addition, the Committee recommends that the OPAD architect more clearly articulate the proposed utilization of building space. Although its building concept was not as realistic as the OPAD proposal, the Coates team offered greater flexibility in concept design, and a significant financial commitment. In the event of unforeseen circumstances, which may occur in a project of this type, the Coates group appeared better positioned to cope successfully. In addition, the Coates group had apparently reached out to the various community organizations to discern their concerns. Coates, through is relationship with Barden, was rated as having better housing development expertise, and the proposal emphasized the housing portion of a cash flow project capable of supporting the Ottawa Building project. It is clear that the hotel concept for either group is not feasible without a major customer in place to provide a base occupancy. Finally, both teams indicated they could meet a deadline of August, 1997 for the Ottawa Building. Thus, the ninety (90) day period for tenant commitment by OPAD is deemed both necessary and reasonable. LHW/bb h Awordllw\devcom2.doc ATTACHMENT III OTTAWA STATION DEVELOPMENT REPORT OF BWL PARTICIPATION COMMITTEE BWL Participation Committee: Eva Evans. John Strolle, John Elashkar The BWL Participation Committee was charged with the evaluation of the following issues related to BWL involvement in the Development of Ottawa Station: 1. Amount of space to be occupied by BWL and rent charged. 2. How to proceed with demolition and salvage of equipment. I Project schedules - equipment salvage, electric substations relocation and development construction. 4. Project design and specifications. 5. Historic character of building/museum. 6. Site (soil) remediation. The committee reviewed the proposals submitted by Ottawa Park Associates, Developers (OPAD) and Thomas J. Coates and Associates (TJCA), prepared a list of questions and issues, related to their charge, and submitted them to the developers. On September 26. 1995, the committee met separately with each developer and reviewed their proposals and response to the questions. Amount of space to be occupied by BWL & rent charged: Increasing or decreasing the amount of space to be occupied by BWL will have no impact on OPAD Proposal or the rent they will charge BWL. TJCA indicated that their proposal will not be substantially impacted (if the amount of space was reduced to 7000 ft') because of sufficient demand for office space. However, a significant space requirement (55.000 ft') and a longer lease term by BWL will result in substantial lease rate reductions. Demolition and salvage of equipment: Both companies expressed willingness to coordinate and administer the Equipment Demolition and Salvage Contract. However, OPAD is agreeable to the assignment of the contract. Project schedules: OPAD is willing to negotiate additional charges resulting from accelerating the electric substation removal and/or equipment salvage and removal, only if such acceleration is driven by tenants' requirement for early completion of the development. TJCA did not express any interest in accelerating the schedule and incurring additional charges. Project design and specifications: Both companies will provide the development plan and specifications for BWL review and will entertain reasonable changes. Historic character of building/museum: Except for windows/glass replacement. both developers will maintain the historic character of the building. It is too early for either developer to provide economic evaluation of relocating the 2500kw steam turbine versus retaining it as a Public Power Museum. Site (soil) remediation: Both companies indicated that a firm commitment to remediate the site is necessary for the tenant commitment and project financing. When told about potential State of Michigan Grant for site remediation, OPAD expressed interest in working with BWL to acquire the grant. TJCA offered no response. General observations: During the discussion of the site remediation, and equipment removal and salvage work. it became obvious that TJCA assumed that the cost associated with this work would be born by BWL since it would be required under any circumstances related to transfer of ownership or the possibility of eventually demolishing the structure. OPAD , on the other hand, acknowledged that the development team will reimburse BWL for all costs associated with the equipment removal and site remediation. Recommendation: Based on the information available to us at this time. it is the BWL Participation Committee's recommendation that the Board select Ottawa Park Associates, Developers for the development of Ottawa Station and adjacent land, and authorize the staff to proceed with negotiating the details of the aureement. jea 10/02/95 h:inm g%wordxortawa%panrpt ATTACHMENT IV OTTAWA ADVISORY COMMITTEE William D. Lontz Department of Commerce and BWL Dennis J. Sykes Planning Department and EDC, City of Lansing Robert Johnson Mayor's Office Ev Beemer Lansing Regional Chamber of Commerce Eleanor Dillon Downtown Neighborhood Association Tom Galyon Convention and Visitor's Bureau Bob Brockwell City Council Representative Eric Reickel Parks and Recreation, City of Lansing Kelly Thompson Downtown Business Association Cora Huguely Lansing Center Authority Abel Sykes Lansing Community College Joe Maquire Wolverine Development MES:rs ottadvcm Page 108 Board Meeting Minutes October 3, 1995 As previously communicated to the Commissioners on September 12, 1995, General Manager Pandy stated that he had recused himself from the proposal evaluation process because he had potential conflicts of interest with two of the developers. Now that a developer has been chosen, he asked the Board's wishes with respect to his involvement in negotiations starting from this point forward. The Commissioners concurred that as the Chief Executive Officer of the BWL, General Manager Pandy could resume with negotiations on the project. GENERAL MANAGER'S RECOMMENDATIONS CORPORATE PLANNING Res. No. 95-9-5 It is recommended that the following described parcel of property be declared as surplus and not required for Board of Water and Light operations: A part of the SW 1/4 of section 5. T4N.R2W. City of Lansing, Ingham County,Michigan, particularly described as follows: commencing at the intersection of the North Line of Kaplan Street(50 ft. wide)and a point 25 ft. West of the centerline of Sunset Street; thence Northerly along a line 25 ft. West of and parallel to the centerline of Sunset Street 26.5 ft. to the point of beginning of this description(said P.O.E.being 1 ft. +North and 5.5 ft.+West of the centerline of BWL a 138 kv overhead electric utility pole); thence Northerly along a line 25 ft. West of and parallel to the centerline of Sunset Street 130 ft.-, thence Westerly parallel to the North line of Kaplan Street 178.4 ft.; thence Southerly parallel to the centerline of Sunset Street 130 ft.;thence Easterly parallel to the North line of Kaplan Street 178.4 ft. to the point of beginning,subject to a reservation to the City of Lansing Public Service Department for the existing asphalt turn-around and guard rail at the North end of Sunset Street, said reservation being the Northeast corner of this parcel and being described as the North 33 ft. of the East 30 ft. Further,that the General Manager and Corporate Secretary be authorized to enter into agreements for the disposition of this property, subject to the requirements of the Lansing City Charter. This parcel containing 23,192 square feet is that portion of Well Site 10-13 which is outside the well's 200 feet isolation zone and which is not required for operation or maintenance of the well,water transmission lines or other existing utilities. Well Site 10-13 was purchased in 1944 with BWL funds. The river bank to the North of this described parcel varying from approximately 70 to over 100 feet in width is being retained for future use by the City for a river walk in this area. Negotiations are in process with a neighboring industrial customer who is interested in the described parcel for an employee parking lot. The sale price will be under$50,000 and will be based on an appraisal of the parcel. Board Meeting Minutes Page 109 October 3, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CMUSTIAN That Resolution 95-9-5 be approved as submitted. Adopted unanimously. ELECTRIC SYSTEM CONTROL Res. No.95-9-6 Approve recommendation to retain the firm of McKinney&Associates for professional services relative to lobbying at the State level. Major initiatives to be included are those relating to recodification of the utility code, and potential restructuring of the Electric Utility industry and Michigan Public Service Commission. The cost of such service will be a fee of$30.000. ($2500 per month for 12 months subject to 30 day cancellation by either party). Other bidders were: Kheder and Associates. $48,000 ($4000/month 30 day cancellation), and Knight Consulting,$60.000 ($5000/month 30 day cancellation). McKinney&Associates were selected as the best evaluated bid. BY COMMISSIONER CMSTIAN-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-9-6 be approved as submitted. BY COMMISSIONER O'LEARY SECONDED BY COMMISSIONER LONTZ To table this item pending further review and discussion by the Commissioners. Adopted unanimously. TREASURER/CONTROLLER Res. No. 95-9-7 Authorize award of a 3-year purchase order to Skilltech Employment,Lansing, Michigan. to provide temporary labor services to the BWL,based on a best-evaluated competitive bid,for the period of October 1, 1995 to September 30, 1998. The estimated annual value of the contract is$354.300,based on 30.000 labor hours. Agency services will be used as required by BWL departments and there is no minimum guarantee of use. Page 110 Board Meeting Minutes October 3, 1995 Other bidders were Excellence Temporary Agency, East Lansing; J&M Services LLC, Lansing; and, Trillium Staffing Solutions. BY COMMISSIONER CMSTIAN-- SECONDED BY COMMISSIONER EVANS That Resolution 95-9-7 be approved as submitted. Adopted unanimously. WATER Res. No. 95-9-8 That the Board agree to serve water to proposed Water District No. 115.Delhi Township, as requested by resolution of the Delhi Charter Township Board on September 5, 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15. 1972, covering the furnishing of a potable water supply in Delhi Township,the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 115 established by Township resolution on September 5, 1995,and will provide a potable water supply to said district. 2. The Township will be required to make a$18.763 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CXV)covering the furnishing of a potable water supply in Water District No. 115. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further,that upon receipt of the sum of$18.763 from the Township, the project be approved for installation,and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CXV)to furnish a potable water supply in Water District No. 115. The geographical area of Water District No. 115 is as follows: Grovenburg Woods Phase 3 Subdivision,Lots 56 through 69. To provide a potable water supply within the proposed new district requires the installation of 790 feet of water main and fire hydrants at an estimated cost of$18,763. Board Meeting Minutes Page 11 I October 3, 1995 The main extension will serve fourteen(14) residential customers. One-time connection fees will amount to$10.010. Estimated annual revenue is$4.760. Water mains to be installed in Fall of 1995 following the receipt of the Township's non- refundable contribution-in-aid of construction and the signing of the agreement. ----------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-9-8 be approved as submitted. Adopted unanimously. GENERAL MANAGER'S REMARKS Contract Coal Prices Being Negotiated. General Manager Pandy reported that the BWL's Fuels Procurement staff is negotiating with its major coal suppliers, per contract price reopener dates. The goal is to take advantage of the current low cost spot market coal. The savings will be passed on to BWL customers. Study of BWL Building for Consolidated Courts Facility. General Manager Pandy reported that Mayor Hollister has advised him of recent communications with the Ingham County Board of Commissioners regarding their interest in the BWL Main Office Building as a potential consolidated courts facility. The City plans to meet with the Ingham County Board of Commissioners in the near future to discuss the study and to consider if the proposed facility is feasible. Mr. Pandy indicated that there is still support on the City Council to approve the transaction with Capitol Annex L.L.C. as filed with the City. Fiscal Year 1995 Electric Utility in Review. A copy of the Electric Utility Annual Report was handed out for review. The report provides an annual review of the Electric Production Division. the Transmission&Distribution Division and the Electric System Control Division. Communication Received from Local 352-IBEW Re: BWL's Safety Incentive Program. General Manager Pandy reported that the IBEW Local 352 of Electrical Workers has sent a letter to our Human Resources Department objecting to the elimination of the Safety Bonus Incentive program that was discontinued effective this current fiscal year. Staff plans to meet with union officials to discuss this issue. The Board will be kept appraised on the outcome of that meeting. Consumers Power Company Files Proposed Settlement Proposal with MPSC. General Manager Pandy briefed the Board on Consumers Power Company's(CPCo)proposed settlement with the Michigan Public Service Commission on outstanding cases. The settlement includes that the 325 megawatts(MW) of Midland generating capacity not currently in Consumers Power rate base would be rolled in. While the industrial customers are protected, there would be a 9 percent rate increase for residential customers of CPCo. There is also a mention of the special competitive service rate. Mr. Pandy said that effectively what CPCo has done is roll three major issues that have been subjected to other litigation into one settlement order. The BWL is an intervener through the Michigan Public Power Agency(MPPA)to try to stop the settlement order. Page 112 Board Meeting Minutes October 3, 1995 Status on Proposed Lugnuts Tower. General Manager Pandy reported on community activities relative to the proposed Lugnuts symbol on the BWL chimney located near Michigan Avenue and South Cedar Street. He reported that it is estimated the construction and erection of a lugnut on the chimney would cost approximately$50,000. A goal of$75,000 has been set to be raised by the end of November this year. The committee hopes to carve that up into pieces of$1,000 so it takes 75 donors at that level. People who donate more than$1,000 would be designated as"Hall of Famers." A plaque would be placed on the stadium in an appropriate place recognizing the donations. There would be an annual event hosted by the Lugnuts organization to honor these people. Also there would be a 15-year membership in the "Legion of Lugnuts." The committee is in the process of identifying potential donors. REMARKS BY COMMISSIONERS Commissioner Evans asked for an overview on pending lobbying going on in the legislature regarding public utilities and their transmission capabilities, ratemaking, and related issues. General Manager Pandy reported that the proposals are all moving toward taking the electric utility out of a monopoly type of situation into a free market or competitive type of model. Some of the concerns are that Consumers Power Company(CPCo)is the dominate player in the State with more than 80 percent market power. Whatever special rates they would set in competitive situations to get a large load or to try to take away a large load from another utility,would end up being paid for by the small users(residential customers). There is concern about the secret rates mentioned by Councilmember Novak during the public comments portion of the meeting. CPCo would have the ability to target customers that are in the BWL's perimeter areas. There is also concern about their undo market power and the control of the transmission system and being given equal and fair access to the transmission so that all players are on the same rules and the same rates. Mr. Pandy also noted that some of the proposals talk about regulating municipals in the State. All municipals in the State could fall under some degree of MPSC regulation of which municipals have not been a part before. Changes from legislative and regulatory activity could potentially diminish the local control aspect of municipal ownership. The speed in which this process could move is not known at this time. PUBLIC COMMENTS Lloyd Teets inquired if the BWL offers a senior citizen's utility rate. General Manager Pandy responded that the BWL does offer a senior citizen's electric service rate (Rate No. 21). This is publicized periodically in the BWL's newsletter to customers. This rate is available to all customers age 65 years or older. Communications Director John Strickler interjected that the senior citizen's rate is also a low usage rate. He suggested that before senior citizens sign up for this rate. they should first consult with a Customer Service Representative to have their file reviewed to determine their average usage. If usage exceeds a certain kilowatt-hour(kWh), the senior customer may be better off with the regular residential rate (Rate No. 1). Mr. Teets reported that at the October 2, 1995, City Council meeting,a resolution was passed regarding residency preference as a factor to be considered in recruitment and selection of new hires in the City of Lansing. He recommended that the BWL also look at this issue as the City Council has done. Board Meeting Minutes Page 113 October 3, 1995 EXCUSED ABSENCES There were no absences. ADJOURNMENT On motion of Commissioner Lontz, the Board adjourned at 6:13 p.m. 4�(' Ma . Sova, ecretary Filed: October 6, 1995 Marilynn Slade, City Clerk BOARD OF WATER AND LIGHT: NOTICE RESCHEDULED REGULAR MEETING The regular meeting of the Board of Water and Light Commissioners of the City of Lansing, Michigan, scheduled on September 26, 1995, is being rescheduled as follows: Rescheduled Date: Tuesday, October 3, 1995, at 5:30 p.m. Location: Second Floor Board Room Board of Water and Light Office Building 123 West Ottawa Street Lansing, Michigan In accordance with the American with Disabilities Act(ADA),please call the Corporate Secretary's Office at 371-6033 at least three business days prior to a public meeting to request special accommodations such as mobility, visual, hearing, or other assistance. Certified by: BOARD OF WATER AND LIGHT cry Mary . Sova Corporate Secretary Telephone 371-6033 c: Post: 9/18/95 cc: BWL City: Board of Commissioners City Clerk's Office ✓ Executive Staff City Council Office M.Fales(Building Maintenance Mayor's Office C.Jones/Eric Stancliff Page 83 -'MINUTES OF BOARD OF COMMISSIONERS' MEETING `v LANSING BOARD OF WATER AND LIGHT Lr;i . 10 CITY CLERK Tuesday,August 22, 1995 The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz, O'Leary, Strolle-6 (Two Board vacancies to be filled.) Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That minutes of regular session of July 25, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. GENERAL MANAGER'S RECOMMENDATIONS COMMUNICATIONS Res. No. 95-8-1 Approve extending the current advertising services agreement with Pace&Partners for a three-year period effective October 1, 1995. Page 84 Board Meeting Minutes August 22, 1995 -------------------- The initial agreement was consummated following a competitive proposal process in which all area agencies were invited to participate. In addition to advertising,Pace has also provided additional communications and public relations services. Services from Pace have been superior in all areas. Agency fees throughout the three-year extension will be at prices in effect when the initial agreement was negotiated in 1992. -------------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-8-1 be approved. Adopted unanimously. ELECTRIC SYSTEM CONTROL Res. No.95-8-2 That a Public Hearing be held September 12, 1995 at 5:30 p.m. to consider an Integrated Resource Plan(IRP)for the Board of Water and Light, pursuant to the provisions of the Energy Policy Act. -------------------- The object of the Integrated Resource Plan(IRP)is to provide adequate and reliable service to the utility's customers at the lowest system cost. The IRP evaluates a full range of alternatives for new energy resources. -------------------- Res. No. 95-8-3 It is recommended that Synergic Resources Corporation(SRC)do a Demand Side Management(DSM) Study with a cost not to exceed$70,000. -------------------- The evaluation of DSM potential is a integral part of the integrated resource plan that is now in progress. The approach to the DSM study will be as follows: 1. Survey BWL electric customers to determine their existing appliance stock and collect their input on any DSM options that they would be interested in trying. 2. Screen the options contained in the customer surveys with other DSM programs that have been deemed successful with other utilities. Due to the tight time frame of the ongoing Integrated Resource Plan now in progress, SRC will be selected to do the study because they have provided the lowest cost bids that have met out specifications on three(3)previous studies. Also, they have done two(2)previous studies for BWL and have a familiarity of the BWL system. -------------------- Board Meeting Minutes Page 85 August 22, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolutions 95-8-2 and 95-8-3 be approved. Adopted unanimously. LEGAL Res. No. 95-84 Purchase the following insurance coverage: From Lyman and Sheets Insurance Agency, representing the Gulf Insurance Company, Commercial General Liability Insurance at an annual premium of$95,000 for the one year period from September 30, 1995 to September 30, 1996. From Lyman and Sheets Insurance Agency, representing the Gulf Insurance Company, Umbrella Liability Insurance at an annual premium of$75,000 for the one year period from September 30, 1995 to September 30, 1996. From Lansing Insurance Agency, representing the National Union Fire Insurance Company of Pittsburgh,PA, Umbrella Liability Insurance at an annual premium of $37.500 for the one year period from September 30, 1995 to September 30, 1996. From Lansing Insurance Agency, representing the Federal Insurance Company,Excess Liability Insurance at an annual premium of$30,000 for the one year period from September 30, 1995 to September 30, 1996. -------------------- Bids were received from four(4)insurance agencies. The limits for expiring coverage was$1 million for the commercial general liability insurance with the Gulf Insurance Company and$25 million excess liability with the Gulf Insurance Company and Auto-Owners Insurance Company. There was no deductible. The limits for new coverage will be$1 million for the commercial general liability insurance with the Gulf Insurance Company, $5 million umbrella liability also with Gulf, $5 million with National Union, and$15 million excess liability with Federal Insurance Company. There will be a$10,000 deductible in the commercial general liability insurance. The annual premium will be$159,490 less than last year's premium. -------------------- Res. No. 95-8-5 Purchase the following insurance coverage.- From Independent Insurance Centre of Okemos, Inc., representing the Citizens Insurance Company of America, Auto Insurance at an annual premium of$85,763 for the one year period from September 30, 1995 to September 30, 1996. -------------------- Page 86 Board Meeting Minutes August 22, 1995 Bids were received from six(6) insurance agencies. Basically, the coverages for the expiring and the renewal are the same: $1 million residual liability; $100 deductible for comprehensive; $1,000 broad form collision deductible; and no-fault coverages. Bids ranged from$83,287 to$126.500, There are 213 vehicles and 74 trailers in the fleet. This is a reduction in premium of$5,250 from last year. -------------------- Res. No.95-8-6 Purchase the following insurance coverage: From Voss Insurance Services, Inc.,representing the St. Paul Fire and Marine Insurance Company,Property Insurance at an annual premium of$315,984 for the one year period from September 30, 1995 to September 30, 1996. From Voss Insurance Services, Inc., representing the Continental Insurance Company, Boiler and Machinery Insurance at an annual premium of$94,100 for the one year period from September 30, 1995 to September 30, 1996. -------------------- Bids were received from three(3)bidders. The limit of liability for the property insurance coverages is$846 million and the boiler and machinery coverage is$100 million. Each policy has a$250.000 deductible. The total premiums are$410,084. The renewal with the current carrier would have been $424.246 with a$730 million limit of liability for both coverages and a$250.000 deductible. The current coverage has a basic$100,000 deductible and a renewal premium of$493,200. The increased deductibles help obtain a premium reduction of $83,116 for these coverages. -------------------- Res. No.95-8-7 Purchase the following insurance coverage: From Lyman and Sheets Insurance Agency, representing the United States Fidelity and Guaranty Company,Faithful Performance Bonding and Crime Insurance at an annual premium of$3,205 for the one year period from September 30, 1995 to September 30, 1996. ------------------- Bids were received from three(3) insurance agencies. Basically, the limits for faithful performance bonding will be raised to$100,000 per employee and an additional$900,000 per loss,with a$5,000 deductible. Also covered would be: Forgery or Alteration; Theft,Disappearance and Destruction; Computer Fraud with Wire Fund Transfer coverage; and Pension Funds.Form A. Board Meeting Minutes Page 87 August 22, 1995 Limits range from$500.000 to$1,000,000 and deductibles range from$100 to$50,000. The replaced policy had a faithful performance bonding limit of$12,500 per employee and$115.000 per loss with no deductible among its coverages. It was with Hartford Fire Insurance Company at a premium of$2,843. -------------------- BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolutions 95-8-4, 95-8-5, 95-8-6. and 95-8-7, respectively,be approved. Adopted unanimously. TECHNICAL SERVICES/ ELECTRIC PRODUCTION Res. No. 95-8-8 It is recommended that the budget for the Project No. 96-104, Erickson Station Coal Conveyor System Repairs,be increased by One Hundred Forty Thousand Dollars ($140,000). Original Estimated Cost - $410,000 Revised Completion Cost- $550,000 -------------------- The original scope of work was to: paint structural steel on Coal Conveyors IA, 2A, 3A, and 4A; replace panels at selected areas on Conveyor 2A roof; replace metal panels at selected areas on Conveyor 4A walls; and replace the entire bottom metal panels of Conveyor 4A. The revised scope of work includes: abatement of lead paint on Conveyor 4A; painting the structural steel on Conveyor 4A; replace metal panels at selected areas on Conveyor 2A roof. replace all metal panels of Conveyor 4A west wall and all bottom panels of Conveyor 4A. The increase in cost is due to the presence of lead in the existing paint and the associated abatement costs involved and more extensive deterioration of the metal panels on the west wall of Conveyor 4A than originally estimated. -------------------- BY COMMISSIONER STROLLE SECONDED BY COMMISSIONER EVANS That Resolution 95-8-8 be approved. Adopted unanimously. Page 88 Board Meeting Minutes August 22, 1995 TREASURER/CONTROLLER Res. No.95-8-9 Authorize the sale of obsolete Board-owned vehicles and equipment through competitive bids. The items are BWL units#14.#23.#54,#1271.#155. #170, #177, #179, #638, #715,#768,#775, #786,#795, #874. -------------------- An itemized list is on file with the Corporate Secretary. -------------------- BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-8-9 be approved. Adopted unanimously. WATER Res. No.95-8-10 That the Board of Water and Light authorize the General Manager and Corporate Secretary to rescind Water Districts 108 and 109 in Delhi Township previously authorized in Board resolutions 95-2-8 and 95-2-9, respectively. -------------------- Delhi Township has advised Water Technical Support that these Districts will not be proceeding as previously indicated and has requested that Water Districts 108 and 109 be rescinded. Numbers 108 and 109 will be reassigned to new water districts. (see Resolution Nos. 95-8-11 and 95-8-12.) -------------------- Res. No.95-8-11 That the Board agree to serve water to a new proposed Water District No. 108,Delhi Township,as requested by resolution of the Delhi Charter Township Board on June 6, 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 108 established by Township resolution on June 6, 1995,and will provide a potable water supply to said district. Board Meeting Minutes Page 89 August 22, 1995 2, The Township will be required to make a$39,900.00 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CVIII)covering the furnishing of a potable water supply in Water District No. 108. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further,that upon receipt of the sum of$39,900.00 from the Township,the project be approved for installation,and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CVIII)to furnish a potable water supply in Water District No. 108. The geographical area of Water District No. 108 is as follows: Houghton Heights#1 Subdivision, Lots 1-24. To provide a potable water supply within the proposed new district requires the installation of 1,680 feet of water main and fire hydrants at an estimated cost of $39.900.00. The main extension will serve twenty-four(24)residential customers. One-time connection fees will amount to$17,160.00. Estimated annual revenue is$8,160.00. Water mains to be installed in Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. ------------------- Res. No. 9"-12 That the Board agree to serve water to a new proposed Water District No. 109, Delhi Township,as requested by resolution of the Delhi Charter Township Board on August 15, 1995,and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15, 1972,covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 109 established by Township resolution on August 15, 1995,and will provide a potable water supply to said district. 2. The Township will be required to make a$23.988.00 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement(Supple- ment CIX)covering the furnishing of a potable water supply in Water District No. 109. Page 90 Board Meeting Minutes August 22, 1995 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the sum of$23,988.00 from the Township, the project be approved for installation,and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CIX))to furnish a potable water supply in Water District No. 109. The geographical area of Water District No. 109 is as follows: Legacy Park Subdivision Phase I, Lots 11 through 19. To provide a potable water supply within the proposed new district requires the installation of 1,010 feet of water main and fire hydrants at an estimated cost of $23,988.00. The main extension will serve nine(9)commercial customers. One-time connection fees will amount to$14,967.00. Estimated annual revenue is$4,500.000. Water mains to be installed in summer/fall of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. -------------------- Res.No. 95-8-13 That the Board agree to serve water to proposed Water District No. 114, Delhi Township, as requested by Resolution of the Delhi Charter Township Board on August 15, 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15, 1972, covering the furnishing of a potable water supply in Delhi Township,the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 114 established by Township resolution on August 15, 1995, and will provide a potable water supply to said district. 2. The Township will be required to make a$42.124.00 non-refundable contri- bution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement(Supple- ment CXIV)covering the furnishing of a potable water supply in Water District No. 114. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the sum of$42,124.00 from the Township, the project be approved for installation,and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CXIV)to furnish a potable water supply in Water District No. 114. Board Meeting Minutes Page 91 August 22, 1995 The geographical area of Water District No. 114 is as follows: Arbor Wood Subdivision Phase I,Lots 1 through 10. To provide a potable water supply within the proposed new district requires the installation of 1,570 feet of water main and fire hydrants at an estimated cost of $42.124.00. The main extension will serve ten(10)residential customers. One-time connection fees will amount to$7,150.00. Estimated annual revenue is$3,400.00. Water mains to be installed in summer/fall of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. -------------------- Res. No.95-8-14 That the Board select and recommend to City Council for confirmation, the Delegate and Alternate Delegate to the Mid-Michigan Water Authority, as follows: Delegate Clyde Dugan Director, Water Utility Alternate Delegate Susan McCormick Manager, Water Technical Support Services -------------------- With City Council adopting the Articles of Incorporation of the Mid-Michigan Water Authority and designating the Board of Water and Light as the City's agent, the Commissioners must recommend a Delegate and Alternate Delegate to represent the Board of Water and Light and the City on the Authority. In accordance with the prior agreement with City Council and their resolution,the selection is subject to Council confirmation. The individuals listed hereinabove are recommended based on their qualifications, management responsibilities within the Board's water utility, and unbroken participation on the Water Regionalization Task Force which provided the foundation for creation of the Mid-Michigan Water Authority. -------------------- BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That Resolutions 95-8-10 through 95-8-14, respectively,be approved. The Board discussed issues raised at the joint meeting held with the Mayor and Councilmembers on August 10, 1995. General Manager Pandy reported on discussions held with the Council at their Committee of the Whole meeting of August 17. He indicated a Councilmember suggested that Lansing's designated delegates to the Mid-Michigan Water Authority(Authority)should be a member of City Council and someone from the BWL as the alternate delegate. General Manager Pandy noted that he Page 92 Board Meeting Minutes August 22, 1995 tried to persuade the Council on the merits of having Clyde Dugan,Director of Water Utility,and Susan McCormick, Manager of Water Technical Support Services, represent the BWL and the City on the Authority. Mr. Pandy stated that their expertise in technical and engineering matters in the water utility makes them the best qualified delegates. Also an extensive amount of time would be required of the Delegate and Alternate who would be required to attend several all-day meetings held monthly to select officers and develop operating procedures of the Authority. Mr. Pandy compared the delegate's participation to what is currently in place for the Michigan Public Power Agency,with Bill Cook,Director of Electric Utility, serving as the BWL's representative. Following discussion, Mr. Pandy reported that he has indicated to the Council the BWL's position that if City Council chooses a Councilmember as the delegate to the Authority, the BWL would elect not to participate. Commissioner Evans asked if any action has been taken by the Council on the Authority's Articles of Incorporation. Mr. Pandy responded that no action has been taken to date. The Council has been given until September 1, 1995, to act on the BWL resolution recommending the adoption of the Articles and to designate the BWL as its agent. He explained that the City would be able to attend all meetings of the Authority. Further, the City would be provided with agendas,minutes,and reports. In addition,the BWL has offered to brief the Councilmembers on activities of the Authority at any interval convenient to them. Mr.Pandy handed out a draft resolution prepared at the request of some Councilmembers and provided at the Council's Ways and Means Committee of August 16 for review. The draft resolution authorizes the BWL to be the agent of the City and names Clyde Dugan as its Delegate and Susan McCormick as Alternate Delegate. It also stipulates the BWL must comply with seven provisions;among them are that: (1)the BWL is to assume all financial obligations, (2)the BWL is not to sell any assets, (3)meetings and records shall be public and provided to the City in a timely manner, (4)no authority is granted to the BWL for zoning or other land use,planning, nor any other functions performed by the City. Commissioner Strolle suggested having a liaison person of the Council attend meetings of the Mid- Michigan Water Authority who could report back to the Council. He said this may bridge the gap of receiving first-hand information from a Councilmember. General Manager Pandy stated he would make that suggestion to the Council. Following discussion, the Commissioners again concurred that participation in the Mid-Michigan Water Authority is in the best interests of BWL customers. The motion to adopt Resolutions 95-8-10 through 95-8-14, respectively,was adopted unanimously. BY THE BOARD OF COMMISSIONERS-- BOARD OF WATER AND LIGHT RESOLUTION HONORING GERALD W.WILLIAMS WHEREAS, It is with great respect that the members of this Board join in offering highest tribute to Gerald W. Williams as he completes his tenure as a Board Commissioner of the Board of Water and Light (BWL)with over 13 years of service;and WHEREAS,Gerald W. Williams was appointed to the Board on March 23, 1982. He was elected Chairman Pro Tem in July 1983 and continued in that capacity throughout his tenure. While he served on the Board and the Executive. Finance and Personnel Committees, he applied his academic and intellectual assets--along with his leadership and vision--on behalf of the citizens of Lansing in a host of issues Board Meeting Minutes Page 93 August 22, 1995 involving the BWL. Among noteworthy events during his term of office were the Belle River purchase in 1982, selection of a new General Manager in 1984,centennial anniversary of the BWL in 1985, Strategic Planning in 1986. Share the Success employee improvement incentive program in 1987, installation of a new Customer Information System combining electric,water and sewer bills on a single monthly statement in 1990, Belle River power entering the BWL system in 1991, the potential sale of the BWL to UtiliCorp in 1992, the BWL's first ever early retirement and voluntary separation program in 1994,and innovative mini-bond financing for BWL facilities in 1989 and 1994; and WHEREAS,In addition to faithfully and effectively fulfilling his responsibilities as a Board Commissioner, Gerald Williams also holds the position of Director of the Office of Management and Information Systems for the State of Michigan,Department of Management and Budget. His broad knowledge and expertise in areas of management and systems analysis, computer and telecommunication systems design management, and information technology in planning and policy development brought a wealth of expertise to this Board;and WHEREAS,With all of his responsibilities, he was always prepared and thoughtful during all Board deliberations. His professionalism, hard work,and sensitivity to the needs of the public have won for him the respect and admiration of all who have had the good fortune of knowing him. NOW THEREFORE,BE IT RESOLVED,That the highest tribute be accorded to Gerald Williams as he brings to a close his tenure as a Board Commissioner. In regular session this 22nd day of August, 1995,we wish"Jerry," his lovely wife Carol,and their family the very best and well-deserved happiness and fulfillment. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: Rod Turner and Jenne Samuel are"Unsung Heroes." Consumer Services Director Terry Graham showed a 90-second video clip of a news item in the WLNS-TV news program recognizing two BWL employees. On August 21, BWL meter readers Rod Turner and Jenne Samuel were both honored as "unsung heroes"by TV-6 News for their heroic efforts above and beyond the call of duty. About one month ago, Rod Turner was reading his route; and in the neighborhood next to Mr. Turner was Jenne Samuel reading her route. During the course of reading their routes.Mr. Turner heard screaming and witnessed an elderly lady running out the front door of her home asking for help. Mr. Turner ran to the lady and also radioed Jenne Samuel for help. They entered the home and found a gentleman in his nineties--who relied on life support oxygen--fallen out of bed. To complicate the incident,the weather was sweltering with a heat index of over 100 degrees and their air conditioner was not working. Mr. Turner and Ms. Samuel knew the man's life was in jeopardy. By the time the medical emergency team arrived.Rod Turner and Jenne Samuel had the gentleman back up in bed with his oxygen mask-on- he was calm and enjoying life again. As an added bonus,Rod Turner was also able to get the air conditioner back in operation while the emergency team worked on the man. Mr. Graham introduced Virginia Cluley,Manager of Customer Accounts and Meter Reading, and Tim McKim, Supervisor of Meter Reading, who were in the audience. The Commissioners applauded this week's unsung heroes--Rod Turner and Jenne Samuel--and thanked them for their compassion and courage. BWL Tapping Team Recognized. General Manager Pandy distributed a complimentary letter received from Robert Pontek.Director of Utilities, Martin County Florida, dated August 16, 1995. Although the BWL's tapping team did not win this year,Mr. Pontek complimented their excellent teamwork and sportsmanship. Mr. Pandy also commended the team for their fine performance. Page 94 Board Meeting Minutes August 22, 1995 IBEW Solicits Clerical and Technical Employees for Union Representation. A letter mailed to BWL clerical and technical employees by Local 352 of the International Brotherhood of Electrical Workers (IBEW), dated August 14. 1995, was handed out. The letter asks clerical and technical employees who are interested in union representation,to complete and return an enclosed authorization card. This is IBEW's first step in trying to organize the clerical and technical employees. The Union's last attempt to organize these groups of employees was eight years ago. BWL Cash Reserves Update. An analysis prepared by Treasurer/Controller Dana Tousley explaining BWL cash funds was handed out detailing the two classes of cash reserves. In summary, they are: (1)required by bond resolution and(2)required by BWL Commissioners' resolution as a prudent management practice. Cash reserves as of June 30, 1995,are itemized below: Bond&Interest Redemption&Reserve $6,460,153 Operation&Maintenance 15,292,644 Construction 8,969,331 Rebate 20,456 Capital Projects 22,269,031 Coal Pile Buildup&Unfunded Losses 11,990,029 Cash at 6/30/95 $65,001,644 General Manager Pandy stated that its noteworthy to mention there is only$22,269,031 in the capital projects fund, however, the BWL is typically spending approximately$28 million per year. Commissioner Hassler suggested reviewing this analysis in detail with the City at the next joint meeting to promote better understanding of how the funds are used. BWL Return on Equity Payments to the City of Lansing. A tabulation showing total return the BWL has made to the City from 1931 forward was handed out. Mr. Pandy noted that from 1931 through 1972 the BWL provided free water,electric, steam and construction services to the City. From 1973 through 1980, the City paid their own bills and BWL returned to the City a like amount at year-end. From 1981 through 1992.the BWL paid the City 3.5%of revenue. In 1992, a 4.0%rate of return was negotiated starting with 1993 to present. In the aggregate the BWL has returned to the City$116,363,240 over a span of more than fifty years. Commissioner Hassler noted that the BWL returns to the City more than the top ten taxpayers combined annually,which includes General Motors. Mr. Pandy stated that the top ten taxpayers in the City combined pay approximately$5.1 million as compared to the BWL's return on equity payment of$5.8 million at the 1995 fiscal year end. Residential Monthly Bills. A copy of a bar graph was handed out showing the average cost for electricity,water and sewerage over the last twenty years. Mr.Pandy noted that,other than inflation in the mid-seventies.electric bills have been relatively flat. The water cost during the twenty years has gone up 236%compared to inflation at 186%. Water has done about 50%worse than inflation as it lost load. The electric utility at 134%beat inflation by 50%. The sewerage rates have gone up 705%in that same twenty-year period of time. Mr.Pandy stated that typically water and sewerage bills were about even-- approximately 50%components of each bill--now the bill is 70%sewerage and 30%water. Benefits of Water ReLionalization. General Manager Pandy handed out a copy of a sales forecast showing the benefits of water regionalization. The analysis compares the differences in water sales and revenue with the BWL going alone,with wholesale sales,and with the Mid-Michigan Water Authority. Mr. Pandy remarked that some Councilmembers feel they should have more opportunity to meet with officials of communities participating in the Authority. He handed out a chronology of discussions and meetings held with the Council on water regionalization since 1992. He noted that there have been 23 Board Meeting Minutes Page 95 August 22, 1995 forms of communications through resolutions, Council committee meetings, memos, and legal opinions. Also eight joint meetings of this Board and City Council were held,and water regionalization was an agenda item. Mr. Pandy remarked that the Council has asked for an extension to adopt the Mid-Michigan Water Authority's articles of incorporation until October 2, 1995. Two lengthy extensions have already been given at the request of the City. The original timeline of January 1, 1995,was extended to May 15, 1995, The City subsequently requested another extension,which was granted and extended to September L 1995. Mr. Pandy handed out a tabulation showing a breakdown of utility bills for each of the surrounding communities. This document was prepared at the request of a Councilmember. Also handed out was a sheet outlining issues that might come before the Mid-Michigan Water Authority and an outline of BWL basic policies and procedures of control for the delegate to the Authority. Mr. Pandy noted that with administrative controls in place, the delegate would have to bring to the Board any projects deemed to have merit for BWL customers for review and consideration. BWL Sets An All-Time Demand for Electricity. General Manager Pandy reported that the BWL set a new system peak when electricity topped 515 megawatts at 2:00 p.m. on August 14. 1995. He commended the operations employees for their outstanding response in producing more power with fewer workers. Mr. Pandy reported that BWL production plants operated at nearly full capacity on August 14, as utilities throughout the midwest looked for electricity to meet soaring demands. Analysis of Kilowatt-hour Sales Presented. A graph of kilowatt-hour(kWh)sales and revenues in surrounding townships over the last decade was displayed. Mr. Pandy noted that Lansing sales and revenues have declined over the ten-year period while sales and revenues are growing in adjoining townships. Status of Michigan Public Service Commission Utility Recodification Efforts. General Manager Pandy reported that Bill Cook,Director of Electric System Control, is participating along with other utility groups on the Joint Utility Recodification team. His team will be submitting a position paper with recommendations on restructuring the utility industry in Michigan. Issues on competition are being addressed as they are brought forward. Commissioner Lontz Forms New Consulting Firm. General Manager Pandy congratulated Commissioner Bill Lontz on the formation of his Great Lakes Corporate Resources consulting firm. Power Pool Sales Up. General Manager Pandy reported that BWL power supplied and billed to the Michigan Public Power Agency(MPPA)power pool for the month of July was up 20%as compared to the same period last year. Sales for the month of August are anticipated to be even stronger. Mr. Pandy praised the employees for their excellent performance during hot weather conditons. REMARKS BY COMMISSIONERS Commissioner O'Leary complimented Clyde Dugan,Director of Water Utility, on his water regionalization presentation at the televised joint meeting with the Mayor and City Council on August 10. PUBLIC COMMENTS Lloyd Teets, 116 E. Elm Street.Lansing, spoke regarding the Board's authority to approve wholesale water agreements with various townships. He said he plans to recommend to the City Attorney that this matter be reviewed. He indicated that water regionalization would not happen. Mr. Teets said he intends to continue speaking at Council meetings on the importance for Councilmembers to thoroughly review the Page 96 Board Meeting Minutes August 22, 1995 water regionalization issue before taking a vote on it. He told the Commissioners he favors water regionalization, but has concerns with the rates charged per million gallons inside the city versus outside. In closing, he stated that the citizens of Lansing never needed the power being purchased from Belle River through MPPA. EXCUSED ABSENCES There were no absences. ADJOURNMENT On motion of Commissioner Lontz, the Board adjourned at 6:25 p.m. Mary tova, Secretary Filed: August 31, 1995 Marilynn Slade, City Clerk Page 70 MINUTES OF BOARD OF COMMISSIONERS' MEETING 'r r LANSING BOARD OF WATER AND LIGHT 4 sir t v Y CLER, Tuesday,July 25, 1995 The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street, Lansing, Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Evans,Hassler,Lontz, O'Leary. Strolle, and Williams-7 Vacancy appointment for retiring Commissioner Jack Sebolt pending. Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. ANNUAL ORGANIZATION Chairman Hassler announced that in accordance with provisions of the City Charter and the Rules of Administrative procedure of the Board of Water and Light, the first regular meeting of the fiscal year is designated as the organizational meeting. He called for the report of the Nominating Committee for the results of the election of officers for the ensuing fiscal year. REPORT OF THE NOMINATING COMMITTEE (Resolution 95-7-10) The Report of the Nominating Committee was read by Commissioner Strolle: THE NOMINATING COMMITTEE,to whom was referred the duty of setting a process of nominating officers of the Board of Commissioners and staff appointments for Fiscal Year 1995-96, REPORTS AS FOLLOWS: The Committee submits the following slate of officers for the ensuing fiscal year, or until a successor is duly elected, whichever last occurs: Chair - Phillip E.Hassler Vice Chair - Eva L. Evans Chair Pro Tern - David O'Leary Board Meeting Minutes Page 71 July 25, 1995 The Committee further submits the following slate of staff appointments for the ensuing fiscal year. or. until a successor is appointed.whichever last occurs: Director and General Manager - Joseph Pandy, Jr. Corporate Secretary - Mary E. Sova Internal Auditor - Kellie L. Willson SIGNED BY COMMISSIONERS: David O'Leary John Strolle Ernest Christian BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER WILLIAMS Commissioner Lontz inquired about the process used by the Nominating Committee in the nomination of officers on the Board. He specifically asked if there were restrictions on the terms a Commissioner can hold a certain post as an officer. Commissioner Strolle responded that the Nominating Committee takes various criteria into consideration each year in preparing the slate of officers. The Board's Rules of Administrative Procedure are silent with regard to the number of years a Commissioner may serve in a given post as an officer. Commissioner Lontz suggested setting criteria with guidelines that would provide a process for rotating officers on the Board. Following discussion, there was concurrence among the Commissioners to give this matter attention. That the Report of the Nominating Committee, including Resolution 95-7-10.be approved as presented. Adopted unanimously. APPROVAL OF MINUTES BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER EVANS That minutes of rescheduled regular session of June 20, 1995. be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. Lloyd Teets. 116 E. Elm Street.Lansing, spoke on several items: (1)He suggested including a common street name for ease in identifying the location of legal property descriptions listed on the agenda. (2) He challenged the right for Commissioner Gerald Williams to be in attendance at today's regular meeting since his term on the Board expired June 30. 1995. (3) For the benefit of newer members on the Board. Mr. Teets provided background information on his dispute with the Board of Water and Light dating back to 1989 relative to a past due utility bill. Mr. Teets told the Board he plans to send a letter to them Page 72 Board Meeting Minutes July 25. 1995 detailing all the circumstances of his old dispute, and will request a response within a reasonable period of time. Mr. Teets was given a copy of a legal opinion prepared by BWL Staff Attorney Larry Wilhite, dated July 20. 1995, on the question of Commissioner Williams continuing to serve on the Board. The opinion indicates that in Michigan, public policy requires public offices to be filled at all times without interruption unless there are rules,ordinances or statutes which direct otherwise. There being no provision in the City Charter to the contrary, Commissioner Williams may serve until a successor is appointed. COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met on July 25, 1995,to review the Board of Water and Light's mainframe computer equipment. Present were Commissioners Christian, Evans,Hassler,Lontz.O'Leary, Strolle, and Williams. Information Systems Manager Harvey Briggs reported on the memory limitation of the current Unisys 2200/400 mainframe computer. purchased in November 1988. The maximum memory level of 64 MB was reached over three years ago. Over the past six years,technology has allowed computers to be built with massive amounts of memory compared to what was previously available. The industry has taken advantage of this by developing advanced software that requires very large amounts of memory. Mr. Briggs presented four alternatives to the BWL's mainframe computer, and outlined the costs and benefits over a five-year period. Alternative II is considered the most viable option by Information Systems Department staff for the following reasons: Pros: • Low maintenance and software costs nearly offset cost of purchase. • New hardware/software will improve ISD productivity and system capacity, performance and reliabilitv. • Gives BWL five years to gradually(and safely) migrate to Client-Server and open systems environment. • Vendor price concessions(incentives)totaling about$100.000. Con: • Locked into Unisys for five more years. Following discussion,the Committee of the Whole concurred with the implementation of alternative II. Authorization to Purchase a Unisys 2200/500 Mainframe Computer (Resolution 95-7-11) It is recommended that a Unisys 2200/500 mainframe computer be purchased during Fiscal Year 1996. This includes financing at 6.25 percent interest per year.and includes an additional 8.5 GB disk. The total cost over five years will be$1,693.000. Respectfully submitted. Gerald W. Williams, Chair Pro Tem COMMITTEE OF THE WHOLE Board Meeting Minutes Page 73 July 25, 1995 BY COMMISSIONER WILLIAMS SECONDED BY COMMISSIONER CMSTIAN That the Committee of the Whole Report, including Resolution 95-7-11. be approved. Adopted unanimously. GENERAL MANAGER'S RECOMMENDATIONS ADMINISTRATIVE Res. No. 95-7-1 That the Board, pursuant to its Resolution No. 95-3-11.acknowledges that an acceptable sales price of$5.157,375 has been negotiated between the General Manager and Capitol Annex Limited Liability Company for the real properties at 123 W. Ottawa Street and 221 N. Capital Avenue:and, That the General Manager is authorized to file the terms and conditions of sale as an addendum to the contract for the Purchase of Real Estate dated 3/28/95: and That a request is respectfully made to the City to establish a public hearing date on this matter,and for the City Council to consider this matter in a timely manner following public hearing. The negotiated price is a fair market price based on appraisal,book value.and comparable real estate sales. Res. No. 95-7-2 That the General Manager be authorized to negotiate a severance agreement with Mark Vander Jagt which may include a retirement incentive. The retirement incentive shall be limited to and may not exceed three years increase to his age and years of service for the purposes of pension benefit calculation and the paid retirement allowance formula. The severance agreement shall include a release of all claims. -------------- Mr. Vander Jagt's duties are targeted for reassignment in 1999. Due to his involvement with the previous workforce reduction plan,Mr. Vander Jagt was excluded from taking the benefits of the plan. As of January 2, 1996, Mr. Vander Jagt will be 52 years of age and have 27.0082 years of service. BY COMMISSIONER CMUSTIAN-- SECONDED BY COMMISSIONER WILLIAMS That Resolutions 95-7-1 and 95-7-2 be approved. Adopted unanimously. Page 74 Board Meeting Minutes July 25. 1995 CORPORATE PLANNING Res. No. 95-7-3 It is recommended that: The following described property be declared as surplus and not required for Board of Water and Light Operations: Land previously deeded to the Board of Water and Light and recorded in Liber 1520.Page 1279 and described as: The West 100 feet of a parcel described as: That part of the SE 1/4 of NE 1/4 of Section 5. T4N, R2W. Citv of Lansing. Ingham County.Michigan, commencing at a point on the Northerly line of Filley Street and the West line of Lot 8 of Scott's Subdivision on Sections 4 and 5, as recorded in Liber 3, Page 7 of Ingham County Plats, said point of beginning being North 440.96 feet and South 590 41'East 489.0 Feet from the SW corner of SE 1/4 of NE 1/4 of said Section 5: running thence North on West line of said Lot 8. 200.0 feet;thence West 200.0 feet: thence South 83.05 Feet to Northerly line of Filley Street.thence South 59' 41'East 231.68 Feet to point of beginning, and subject to all easements and restrictions of record. Further, that the General Manager and Corporate Secretary be authorized to enter into agreements for the disposition of this property, subject to the requirements of the Lansing City Charter. This property commonly known as 1020 Filley Street.Lansing, was acquired from the City of Lansing in 1985 for Well 25-41 drilled and equipped under an easement granted in 1983. The well is no longer in service and it has been determined to be more cost effective and in the best interests of the Board of Water and Light to replace rather than rehabilitating this well. The property has been leased to the adjoining property owner and the lease has expired. The adjoining property owner has expressed interest in purchasing this property to maintain access and allow for future expansion of the business. The sale price will be based on recovery of the cost to plug and seal the well,cap the raw water main and obtaining a replacement well site. BY COMMISSIONER EVANS-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-7-3 be approved. Adopted unanimously. Board Meeting Minutes Page 75 July 25, 1995 HUMAN RESOURCES Res. No. 95-7-4 That Raymond Terwilliger, an Operator A for Eckert Station, be awarded a total of $227.10 for suggestion proposal number 1993-042, to operate one forced draft fan until #3 boiler is at or near full load. By implementing this proposal, it is estimated that the BWL will realize a net savings of $1.521 in the first year. Res. No. 95-7-5 That Kenneth Dudley II, an Overhead Supervisor for Overhead Line Construction,be awarded a total of$151.50 for suggestion proposal number 1993-233, to purchase hi-pot adapters for phasing sets that can locate faulted sections of URD cable. By implementing this proposal, it is estimated that the BWL will realize a net savings of $1.005 in the first year. Res. No. 95-7-6 That Anne H. Stump,a Customer Service Representative for Customer Service,be awarded a total of$167.02 for suggestion proposal number 1995-045, to put credit form letter on computer to save CSR time and to provide record of issuance. By implementing this proposal, it is estimated that the BWL will realize a net savings of $1.040 in the first year. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER WILLIAMS That Resolutions 95-7-4. 95-7-5 and 94-7-6. respectively,be approved. Adopted unanimously. LEGAL Res. No. 95-7-7 Purchase the following insurance coverage: From Voss Insurance Services, Inc.. representing the Aetna Casualty and Surety Company, Specific Excess Workers Compensation Insurance for deposit premium of $39.577 for the one year period from September 1. 1995 to September 1. 1996. The rate is 0.10%per$100 employee compensation. Page 76 Board Meeting Minutes July 25. 1995 Bids were received from three insurance agencies: Lansing Insurance Agency, representing National Union Fire Insurance Company of Pittsburgh..PA and Frontier Insurance Company; Lyman&Sheets Insurance Agency representing Zurich Insurance Company;and Voss Insurance Services. Inc.,which also represented Continental Casualty Company. The deposit premiums for the options ranged from$39,111 to $66.528 and the rates ranged from 0.1008%to 0.127%. The expiring coverage was also with Aetna Casualty and Surety Company with a deposit premium of$45,785 and a rate of 0.118%per$100 employee compensation. This coverage is necessary for the workers compensation self insurance program. The represents a 15.3%reduction in rates for the next year. -------------- BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-7-7 be approved. Adopted unanimously. PENSION Res. No. 95-7-8 That Willie M. Foreman, Construction Mechanic in Construction Services Department, be placed on a disability pension of$694.51 per month effective June 2. 1995. He has selected Option IV,with Workers' Compensation Offset,with the provision that after his death, if his wife,Mary A. Brown-Foreman, survives him she will receive 100%,or $694.51, per month for the rest of her life as provided under Option IV. If his wife predeceases him,the pension amount of$694.51 will revert back to the regular pension amount of$753.50 for the rest of his life as provided under Option IV. ------------- Mr. Foreman has worked for the BWL for 14.12 years and is 41 years of age. ------------------ BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-7-8 be approved. Adopted unanimously. STEAM Res. No. 95-7-9 It is recommended that Project No. 89-111 "Monitoring System-Moores Park Station". Project estimate be increased to$1,498,000 from$1.266.000. The original scope of work was for the installation of data acquisition and boiler control systems for the boilers and header system. The revised scope of work includes, in addition to the original data acquisition system and boiler controls,boiler blowdown Board Meeting Minutes Page 77 July 25, 1995 system modifications and hardware and software modifications to the data acquisition system to enable data transfer and error checking. -------------------- BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER EVANS That Resolution 95-7-9 be approved. Adopted unanimously. WATER(Addendum) Res. No.95-7-12 That the following Resolution be forwarded to the Lansing City Council requesting that the Council adopt the Articles of Incorporation of the Mid-Michigan Water Authority and designate the Board of Water and Light as the City's agent in all matters associated with participation, subject only to the right of City Council to confirm the appointment by the Board of Water and Light of the Delegate and Alternate Delegate to the Authority: WHEREAS. the Board of Water and Light Commissioners passed Resolution Number 94-4- 7 on April 26. 1994 requesting that the Lansing City Council adopt the Articles of Incorporation of the Mid-Michigan Water Authority and designate the Board of Water and Light as their agent,following notice that the Articles of Incorporation have been published in the Lansing State Journal, and WHEREAS,publication of the Articles of Incorporation was delayed by the need of City Council, City Administration and Board of Water and Light, to hold discussions on several issues, and WHEREAS. The Articles of Incorporation were modified to reflect changes resulting from these discussions,and subsequently a true copy was published in the Lansing State Journal on May 10. 1995, listing the City of Lansing as a"Participating Unit". as required by 1989 PA 292,and WHEREAS, the Board of Water and Light still desires to become a formative member of the Mid-Michigan Water Authority. NOW,THEREFORE,BE IT RESOLVED THAT: 1. The Board of Water and Light Commissioners requests the City of Lansing to adopt the Articles of Incorporation of the MID-MICHIGAN WATER AUTHORITY, and to designate the Board of Water and Light as its agent. The Board shall be responsible to act in all matters connected with membership including,but not limited to, the appointment of the Delegate and Alternate Delegate to the Authority subject to confirmation by Lansing City Council. The Board shall be solely responsible for all fees or charges assessed by the Mid-Michigan Water Authority. Page 78 Board Meeting Minutes July 25. 1995 2. The Board of Water and Light Commissioners requests the City Clerk, subject to the Council's adoption of the Articles of Incorporation and upon being notified by the Board of Water and Light that all participating local government units have acted on the adoption of articles,to file a printed copy of the articles with the Secretary of State and the clerk of each county in which is located all or part of a participating local government unit, as required by 1989 PA 292, The Board of Water and Light will be responsible for all of the City of Lansing's share of the costs associated with the incorporation and operation of the Mid-Michigan Water Authority. BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER WILLIAMS That Resolution 95-7-12 be approved. Adopted unanimously. NEW BUSINESS Dr. Andrew Morrison of Market Strategies, Inc.,presented the conclusions of the semi-annual customer attitude survey. The findings of the survey indicate the BWL continues to hold a strong position on cost and value for residential customers. The BWL continues to slip in overall favorability and satisfaction. Dr. Morrison noted that despite the drop,the BWL maintains its position as one of the top utilities in Market Strategies, Inc.'s data base in terms of overall favorability, overall satisfaction and loyalty. Communications Director John Strickler introduced Dennis Pace, President of Pace&Partners and several members of his staff. Over the past three years,Pace&Partners has provided outstanding services to the BWL through their creative advertising and public relations strategies. General Manager Pandv noted that their contract with the BWL is maturing in September, 1995. and there is sufficient justification to continuing our business relationship with them for three additional years. Staff will be coming to the Board in September with a recommendation to extend our contract with Pace&Partners. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: Commissioner Vacancies. Mayor Hollister has indicated that he continues to adhere to his policy of generally replacing Board members serving on City Boards for more than two terms. That means two new members will be appointed to the BWL Board replacing Commissioner Gerald Williams and retiring Commissioner Jack Sebolt. The names of the two Board candidates to be placed in nomination before the City Council are expected to be announced shortly by the Mayor's Office. Mr. Pandy noted that the Mayor has indicated he is very appreciative of the dedicated service given by Commissioner Williams. and that he intends to nominate him to another City Board. Special Leval Counsel Selection. By a vote of 5 to 3, the City Council voted on July 24. 1995, to approve the retention of the law firm of Dickinson Wright Moon VanDusen&Freeman as special counsel to the BWL for fiscal year 1995-96. Board Meeting Minutes Page 79 July 25, 1995 Safetv Performance the Best Ever. The BWL's total safety performance for the fiscal year ending June 30. 1995_ was at 2.49, which is the best in the BWL's history. The goal was set at 4.0.and the 2.5 barrier has never been broken. With the BWL's early retirement last fall. the utility lost 3500 years of experience. General Manager Pandy congratulated all the employees for their good safety practices. He noted that management was concerned with the reduced workforce being able to perform their duties safely. Generally, utilities who achieve scores below 4.0 are eligible for a national award by size category. BWL Comments Regarding Proposal M. The BWL has completed its comments on "Proposal M." which is the proposed recodification of the Michigan Public Service Commission (MPSC)rules. A copy of management's conclusions and recommendations to"Proposal M" was handed out to the Commissioners for reference. Mr. Pandy noted that the Governor and the legislature seem aimed at deregulating and promoting competition. The BWL's comments are aimed at protecting the interests of the municipal utilities in the state and trying to keep a level playing field. The Citv of Marshall Case-Order Sustained. A memo from the Michigan Municipal Electric Association(MMEA)was handed out relative to the City of Marshall case. Mr.Pandy reported that the original Marshall case has now reached a final decision favorable to municipal utilities. The Order has been sustained upholding the provision by the Michigan Supreme Court.that a regulated utility: i.e., Consumers Power, cannot take a customer from a municipal utility without receiving an Act 69 (certificate of convenience and necessity)approval from the MPSC in advance of the switchover. Mr. Pandy noted that MMEA has won in court,but is still facing a battle in the legislature over the protection of Act 69. APPA Article on Takeover Proposals. A copy of an article in the American Public Power Association (APPA) Weekly, July 10, 1995, was handed out relative to communities facing takeover proposals. The article indicates that utilities ought to be doing what Lansing,Michigan, did to defend itself against a takeover. Mr. Pandy noted that the BWL is credited in this article in several ways. Capital Choice Active Leads and Prospects. A list of active leads and prospects for future investment in the Lansing area, prepared by the Lansing Regional Chamber of Commerce Capital Choice Steering Committee was handed out for reference. Mr. Pandy noted that the Capital Choice Steering Committee, of which he is a member, has been actively working in attempting to land some of these businesses. The list provides information on the size of their potential investments, the square footage and the types of business categories. Actuarial Valuation Update. Mr_ Pandy handed out a copy of a memo prepared by Treasurer/Controller Dana Tousley, summarizing the 1995 actuarial valuation,conducted by Gabriel. Roeder and Smith& Company. The results indicate the following: Annual contribution for Fiscal 1995 $3,495,968 Lower payroll due to early retirement program (481,828) Early retirement program decreased the unfunded liability and thus 446,099 increased the annual contribution Investment earnings exceeded assumed earnings (112,825) Annual contribution for Fiscal 1996 $3,347414 Mr. Pandy noted that this is an indication the early retirement program, implemented in September, 1995. was well executed and financially sound. Public Power Costs Less. A public power survey based on 1993 data, conducted by the Michigan Municipal Electric Association(MMEA), indicates that Michigan electric rates cost less. For 1993. municipal utilities were at a rate of 6.37 cents/kilowatt-hour, while all other utilities(investor owned and Page 80 Board Meeting Minutes July 25. 1995 cooperatives)were at 7.25 cents/kilowatt-hour. Mr. Pandy noted that the BWL continues to lead the group at a rate of 5.19 cents/kilowatt-hour. Export Sales Up. With the extreme heat recently being experienced,the BWL has been very active with export sales. Mr. Pandy congratulated the employees for holding up during adverse heat conditions and for Eckert Station responding from typically running one unit to running six units in overload. The BWL load hit 448MW on July 14.which is 13MW below our all-time peak of 461MW reached on June 16 of last year. Mr. Pandy reported that both Eckert and Erickson Stations continue to exceed their goal for availability--Eckert is running at approximately 80 percent average availability and Erickson Station is at 88 percent availability. A review of the heat rate for both plants indicate both plants are performing exceptionally well. Mr. Pandy gave credit to both the operations and management personnel at the plants for their excellent efforts in maintaining the plants. Erickson Station's June heat rate would rank it as the second best heat rate in the United States. BWL Beeins West Side Water Service on July 31. Mr. Pandy reported that the West Side Water Service is ready to go to Lansing Township. A ceremony is planned for Monday. July 31. 1995, for 10 a.m., at which time the valve will be opened at the top of the West Side water reservoir and officially begin providing the township with BWL water. The Commissioners were invited to attend the ceremony at the Lansing Township office. Delta Township Water Service Update. The water line construction to provide wholesale water service to Delta Township is proceeding ahead of schedule and within budget. A similar ceremony as in Lansing Township will be held in the fall for Delta Township. Ottawa Development Update. Mr. Pandy provided an update on the commercial development of the Ottawa Station. He reported that two of the six developers have dropped off the list. They determined that the Lansing market would not support their projects of mixed use of office and retail/restaurants. mostly geared toward larger cities. Main Office Buildine Sale Update. Mr. Pandy offered to answer any questions relative to negotiations held with Capitol Annex Limited Liability Company, a division of the Granger Group, on the sale of the BWL main office building and North Capitol Avenue parking lot. He also reported that an architect for the Ingham County Courts visited the main office building and is preparing a report on the feasibility of converting the BWL building into a consolidated courts facility. Mr. Pandy noted that the Granger Company is aware of a competing interest. If the architect concludes the BWL office building is feasible, then the City will need to decide as to whether to act on the Capitol Annex proposal or go with the court facility. Commissioner Lontz asked about options being considered for relocating the employees who currently work out of the main office building. Mr. Pandy reported on three options being explored: 1. Relocating some of the employees to the Ottawa Station,which is being prepared for commercial development. The BWL would be the anchor tenant. 2. Constructing a new two to three story facility on the southwest corner of Pennsylvania Avenue at Hazel Street with one sub-level of parking and peripheral parking. The BWL already owns this property. 3. Purchasing and renovating an existing building in the same Pennsylvania Avenue area. If final sale approval comes from the City Council, details relative to relocation options will be discussed in greater detail with the Board. Board Meeting Minutes Page 81 July 25, 1995 REMARKS BY COMMISSIONERS Commission Williams reported that he met with representatives from the Energy Commission, Ministry of Economic Affairs,from the Republic of China, to discuss issues pertaining to economic development and the energy demand situation in Taiwan. Commissioner Williams noted that Taiwan is an island densely populated but endowed with limited natural resources, especially energy resources on land. Their energy consumption is growing 7%annually. The Energy Commission under the Ministry of Economic Affairs has been entrusted with the task of executing the national energy policy and energy management law and carrying out such major missions as the evaluation of the overall energy plan,the establishment of an energy data base system,the promotion of research and development on energy technology. Commissioner Williams read the following farewell letter: Dear Phil, Fellow Boardmembers, Joe and Mary: I wanted to take this opportunity to thank you as my tenure comes to an end at the Board. First and foremost I want to thank you for your friendship. I have come to know and enjoy each of you,your spouses and families. Carol and I value each of you as dear friends and wish the very best for each of you. I thank you also for the honor of having served as your Chairman Pro Tem over these past years. I have truly enjoyed the totally open and yet, respectful manner we have dealt with each other and all the issues that have come before us. One of the reasons the Lansing Board of Water and Light has had such an outstanding record of achievement is that its governing body acts as one. There are no self-serving factions and no infighting among us. By acting in this unified way, we have been able to create.sustain and communicate the vision and goals that epitomize the BWL. In addition. we have been able to provide Joe with the authority and direction necessary to achieving outstanding results. Phil,your leadership and wisdom over the years has been another great source of the Board's success. Your dedication to our customers and to keeping the BWL on a sound financial footing has been fantastic. Don't let up for one minute. Joe, it has been my pleasure and joy to have worked with you. Simply put.I think you are the best in the business. You take on the tough issues,and you solve them in a thoughtful, practical and effective manner. With you at the helm, the BWL can only continue to succeed. While leadership and sound management are essential ingredients to any successful organization, it is the employees who, in the end,decide the question. To be a winner on a sustained basis, employees with extraordinary dedication are a must. Here is where the Lansing BWL shines above all others. Our employees really and truly care for their customers and that caring is the central motivator from which all other actions flow. With this solid base, the BWL is prepared to take on all comers and be a winner every time. Finally, I want to thank you.Mary,for all that you do to make us Boardmembers look so good. I especially value the prayers you prepare to be read at the beginning of each Page 82 Board Meeting Minutes July 25, 1995 meeting. I believe that those prayers are heard and answered and. in the end,are the single most important reason for the Board's achievements. So. to say that I am proud to have been associated with the BWL is an understatement. I have enjoyed immensely being part of this wonderful organization,and I count it as a major highlight of my career. Thanks! Sincerely, /s/Gerald W. Williams Chair Pro Tern ADJOURNMENT On motion of Commissioner Lontz,the Board adjourned at 7:40 p.m. Mary E. So�ecretary Riled. July 28, 1995 Marilynn Slade, City Clerk Page 58 MINUTES OF BOARD OF COMMISSIONERS'MEETING f 1! ! i .�:: --.3 F1 OJ LANSING BOARD OF WATER AND LIGHT L NIS!1`10 CITY CLERK Tuesday,June 20, 1995 The Board of Commissioners met in rescheduled regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street, Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian, Evans,Hassler,Lentz,O'Leary, Sebolt, Strolle,and Williams-8 Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That minutes of regular session of May 23, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS AND PETITIONS A letter of thanks was received from Commissioner Eva Evans for the BWL's contribution to the Lansing School District through the scholarship fund and the benefit Festival of Jazz. Placed on file. BAIL-Board Meeting Minutes Page 59 June 28, 1995 PERSONNEL COMMITTEE REPORT The Personnel Committee met on June 6, 1995, to discuss the following matters: 1. Quarterly Pension Fund Investments 2. Non-Bargaining Unit Wage and Salary Plan for Fiscal 1996 Present were Personnel Committee Members Strolle(Chair),Evans, Sebolt. Also present was Commissioner Hassler. Absent was Commissioner O'Leary(out ofU,e state). Pension Plan Investment Review Treasurer/Controller Tousley presented a status report of the Pension Fund investments for the quarter ending March 31, 1995,for final review and consideration by the Pension Fund Trustees. Non-Bargaining Unit Wage and Salary Plan for Fiscal 1996 Recommended changes in compensation for Non-Bargaining Unit employees for Fiscal Year 1996 were presented by Steve Pollo.Personnel Employment/Compensation Administrator. As in the past, the recommendations were made after(1)conducting an external market survey, (2)analyzing Cost of Living trends, (3)comparing Non-Bargaining and Bargaining Unit salaries within the Board of Water and Light (BWL), (4)considering the BWL's ability to pay, and(5)receiving input from the Non-Bargaining Unit Compensation Committee. Following analysis and discussion,the Personnel Committee agreed to the following recommendation: Non-Bargaining Unit Wage and Salary Recommendation (Resolution 95-6-1) RESOLVED,That effective July 1, 1995: A. WAGES AND SALARIES --FULL-TIME EMPLOYEES 1. All current Non-Bargaining Unit salary ranges be increased 2.0% for Fiscal Year 1996: 2. all current Clerical-Technical(CT's)employees in full-time positions receive a 2.0%General Increase, and that their performance increases be administered according to existing policy: 3. the matrix for non-CT's be established to reflect half-step increments for performance increases, and 4. the vector for the matrix be set at 2.0%for all payroll categories. Page 60 .AWL-Board Meeting Minutes June 28, 1995 B. WAGES AND SALARIES--PART-TIME EMPLOYEES 1. That part-time employees receive a 2.0%general increase rounded up to the next full nickel. Respectfully submitted, John Strolle, Chair PERSONNEL COMMITTEE BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER SEBOLT That the Personnel Committee Report, including Resolution 95-6-1 regarding the Non- Bargaining Unit Wage and Salary Plan,be approved as presented. Adopted unanimously. GENERAL MANAGER'S RECOMMENDATIONS ADMINISTRATIVE Res. No.95-6-2 That in accordance with Article II, Section 2.1 of the Board's Rules of Administrative Procedure, it is recommended that the following list of dates be adopted as the regular meeting schedule for the Board of Water and Light Commissioners for the ensuing six (6) months. 1995 July 25 - Tuesday August 22 - Tuesday September 26 - Tuesday October 24 - Tuesday November 28 - Tuesday December 19 - -Tuesday ------------------- Regular meetings of the Board shall commence at 5:30 p.m. This schedule is subject to change as a result of date conflicts with rescheduled City Council meetings. It is further recommended that a notice of the meeting schedule be published in the LANSING STATE JOURNAL the week of July 2, 1995. BWL-Board Meeting Minutes Page 61 June 28. 1995 Res. No. 95-6-3 It is recommended that: 1. The Flexible Spending Account(FSA)be continued and that the contract with Travelers Plan Administrators of Illinois, Inc. (TPA),for administration of FSA be continued. II. The following Share the Success(STS)Bonus Options be approved for FY 1995/96: 1. Deferred Cash No change 2. Purchase of Vacation No change 3. Purchase of Free Choice No change 4. I.C.M.A. No change 5. FSA(Flexible Spending Account No change 6. Cancer Care, Intensive Care, AFLAC Plan No change 7. Charitable Contributions No change** 8. Long Term Disability Program No change*** * The purchase of vacation and free choice days will be limited to ten(10)total days to include no more than two(2)free choice days. ** This year's contributions will be split equally between two(2) charities: Woldumar Nature Center and Advent House. *** Open enrollment for"buy-up"option -------------------- Res. No. 95-64 It is recommended that: The recommendation for Performance Measures for FY 1995/96 Share the Success Plan (STS)be approved. The employees be eligible to receive a Performance Bonus of 0-5%as determined by final points with total payment to the employees not to exceed the gross savings for FY 1995/96. ------------------- If all goals and targets are reached,BWL will realize a financial impact of$3,332,659 based on the three financial impact measures. The employees will earn up to 500 points on a 5.0%STS bonus equal to$1,666.330 with the net financial impact to BWL being $1,666.329. The other six measures have a financial impact which is not quantifiable. (See attached Summary FY 1995/96 STS Performance Measures). -------------------- Page 62 BWL-Board Meeting Minutes June 28, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER WILLIAMS That Resolutions 95-6-2, 95-6-3 and 95-6-4, respectively.be approved. General Manager Pandy mentioned that Resolution 95-6-4 on Performance Measures for Fiscal 1996 Share the Success(STS)program caps the STS not to exceed the gross savings. Without capping it,there would be greater financial numbers potentially. This will eliminate the possibility that STS will cost the organization rather than receive savings. Mr. Pandy noted that this slight change to STS is timely as the BWL approaches competition. By responding to competitive threats, the BWL will realize savings and the employees will benefit as well as the customers. Adopted unanimously. CORPORATE PLANNING Res. No. 95-6-5 It is recommended that the following described property be declared as surplus and not required for Board of Water and Light operations: A part of the SW 1/4 of Section 34,T4N, R3W,Delta Township,Eaton County,Michigan particularly described as follows: Beginning at the South 1/4 corner of Section 34;thence along the south section line S 890 44' 16" W 1364.77 feet to a point on the sideline of the GTWRR; thence along a line 50 feet from and parallel to the centerline of tract of the southeasterly tract of the GTWRR N 550 36' 28"E 1650.08 to a point at the intersection of the RR sideline with N-S 1/4 line: thence along the 1/4 line S 000 11' 34"E 925.81 to the point of beginning, also described as that part of the SW 1/4 of Section 34, T4N, R3W, Delta Township lying Southeasterly of the GTWRR containing 14.5 acres of land, more or less, and subject to the rights of the public in Davis Highway,and all other easements and restrictions of record. -------------------- This parcel of property was acquired as part of the Erickson Station property purchase in 1968. The parcel is vacant and there is no planned or foreseeable future use of the property for utility purposes. The property is physically separated from the Erickson Station property by the Grand Trunk Western Railroad right-of-way. Access to the property has been further limited by the closing of the railroad crossing at Davis Highway, east of Canal Road and the property is only accessible from the east by way of Davis Highway off US 27. The property has been appraised at$160,000.00 and will be available for sale in accordance with Board of Water and Light policies and City Charter requirements. -------------------- BWL-Board Meeting Minutes Page 63 June 28, 1995 BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-6-5 be approved. Adopted unanimously. TREASURER/CONTROLLER Res. No.95-6-6 That the Board pay$5,835,855 to the City of Lansing pursuant to our agreement dated June 30, 1992. Further, that all Receiving Fund cash and investments remaining following the above payment be transferred effective June 30, 1995 to the Special Project Fund for future capital projects. -------------------- Res. No.95-6-7 Purchases, Annual Commodity. Authorize the purchase of the estimated 12 month requirements of the following commodities for use in Dye and Wise Road Water Conditioning Plants.Moores Park Steam Plant,and Eckert and Erickson Electric Generating Plants. Pricing is firm through June 30, 1996. Commodity quantities are released as required over the 12 month period. All commodities were competitively bid in accordance with the BWL Purchasing Policy and Procedures. Below is a summary of the lowest and best evaluated bids. Annual Annual Quantity Cost Commodity (Est.) Unit Cost (Est.) Vendor Hydrofluosilicic Acid 160 tons $149.20/ton $ 23,872.00 PVS Nol/Wood Chemicals Pebble Quicklime 11,000 tons 59.57/ton 655,270.00 Marblehead Lime Co. Soda Ash 1,600 tons 168.32/ton 269.312.00 General Chemical Corp. Granulated Salt 320 tons 68.25/ton 21,840.00 Akzo Salt, Inc. Sulfuric Acid 528 tons 59.00/ton 31,152.00 Marsules, Inc. Caustic Soda 145.6 tons 430.58/ton 62,692.45 K.A. Steel Chemicals, Inc. Liquid Chlorine 55 tons 425.00/ton 23,375.00 Carrier- Stephens Co. Page 64 BWL-Board Meeting Minutes June 28, 1995 Sodium Hypochlorite 75,000 gal. .584/Gal. 43,800.00 K.A. Steel Chemicals, Inc. Sodium Hexametaphosphate 36,000 lbs. .62/Lb. 22,380.00 Haviland Products Co. Total: $1,153,633.45 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER SEBOLT That Resolutions 95-6-6 and 95-6-7 be approved. Adopted unanimously. WATER UTILITY Res. No. 95-6-8 That the Board of Water and Light(BWL)authorize the General Manager and Corporate Secretary to enter into a Buy/Sell agreement for the purchase of the following parcel of land: That portion of the W 1/2 of the W 1/2 of the SE 1/4 of Section 15, T3N,R2W,Township of Delhi, County of Ingham,Michigan, lying N of the recorded replat of Bloomfield Park,except Lot No. 1 of the recorded plat of Webert Park Subdivision No. 1 and that part of Park Drive lying within said W 1/2 of the W 1/2 of the SE 1/4. -------------------- The Buy/Sell Agreement will be executed through Prudential Hubbell Realty for the purchase of this parcel. The purchase of this parcel was anticipated as part of the previously authorized Capital Project#85-47, Authorization 9200. (Land acquisition and engineering for well#30713 as part of the State of Michigan Act 307 Well Replacement Program.) Purchase cost of this parcel is$20,000.00 not including fees and closing costs. -------------------- Res. No. 95-6-9 That the Board agree to enter into a Water Service Agreement with the Charter Township of DeWitt, Clinton County, Michigan for the purpose of supplying water in certain designated areas of the Township,as follows: BWL-Board Meeting Minutes Page 65 June 28, 1995 1. The Board will enter into a Water Service Agreement for the area of the Township lying south of Stoll Road and west of US 127,excluding the northwest 1/4 of Section 30 of the Township(Exhibit A). 2. The Township will grant to the Board a franchise for the provision of water service within the Township for a period of thirty(30)years. 3. The Board will accept Water District No. 1 established by Township Resolution on June 12, 1995,and will provide potable water supply to said district. 4. The Township will be required to make a$450,000.00 non-refundable contribution-in-aid of construction to cover charges set forth in accordance with the Board's Policies and Procedures for Water Service for installing necessary distribution facilities to serve the District,due on the 1st day of September, 1995. 5. The Board and the Township are to enter into a written agreement(Supplement Agreement No. 1)covering the furnishing of a potable water supply in Water District No. 1. 6. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the Water Service Agreement and the Agreement for Water District No. 1 (Supplement Agreement No. 1), properly executed on behalf of the Charter Township of DeWitt, the Service Area and District be approved,and the General Manager and Corporate Secretary be authorized to sign the aforementioned agreements to furnish a potable water supply in Water District No. 1. The geographical area of Water District No. 1 is a follows: N. East Street from the south border of the Township,thence north to the intersection of N. East Street and Northcrest Street,a distance of approximately 8,272 feet. To provide a potable water supply within Water District No. 1 requires a total of 8,272 feet of 16 inch main and 15 hydrants, at a cost of$511.367. The main extension will serve approximately 108 residential and commercial properties. One time connection fees will amount to$114,000. Estimated annual revenue,when fully developed,is$47,130. Water mains to be installed in the Summer of 1995 following signing of the Agreement. -------------------- Supplement Agreement No. 1 includes a 10%surcharge on Water Rate Nos.1 and 2, to be applied to the total of customer and commodity charges, including power and chemical cost adjustments. The surcharge will be in effect for a period of ten(10)years. In the interest of promoting customer connection, this surcharge will not apply to any customer for which a water service application is made within one year of the date of Supplement Agreement No. 1. Page 66 BWL-Board Meeting Minutes June 28, 1995 BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That Resolutions 95-6-8 and 95-6-9 be approved. Adopted unanimously. RESOLUTIONS Members of the Jack Sebolt family sitting in the audience were acknowledged by Chairman Hassler. Present were sons Brian,John and Robyn Sebolt. BY THE BOARD OF COMMISSIONERS-- The following resolution of tribute for Commissioner Jack Sebolt was read by Chairman Hassler: BOARD OF WATER AND LIGHT RESOLUTION HONORING JACK R. SEBOLT WHEREAS, as Jack R. Sebolt steps down from an exemplary seventeen and three-quarter years of service as a Commissioner of the Board of Water and Light, the Board of Commissioners are pleased to join in acknowledging his many contributions to the Board of Water and Light,the City of Lansing and its citizens;and WHEREAS, in addition to his efforts as Commissioner of the Board of Water and Light,Jack Sebolt has contributed leadership over the years in a variety of matters affecting this utility. He served on the Finance,Personnel, Steam, and Water Committees. He chaired the Special Public Opinion Poll Committee assigned to select a polling company to conduct the public opinion poll relative to bulk power supply in 1979; he served on the Executive Search Committee to select the new General Manager in 1984; he chaired the Personnel Committee from 1980 to 1994; and was the Vice Chair of the Board from 1980 to 1982,and again from 1986 to 1994; and WHEREAS, a lifelong resident of Lansing, Jack Sebolt is a veteran of the U. S. Navy, and was employed by the U. S. Postal Service for thirty years. He retired on January 1. 1991. as National Business Agent of the National Association of Letter Carriers of the USA.AFL-CIO,Kentucky, Indiana and Michigan Region. Jack Sebolt remained actively involved in his community taking firm stands on issues during his tenure on the Board; and WHEREAS, since his appointment to the Board on October 18. 1977. Jack Sebolt was highly committed to his role as an officer of the City and contributed to the common good of the Board of Water and Light and the City of Lansing. His knowledge and expertise on matters of labor relations will be greatly missed by the Board of Water and Light and the people of the Greater Lansing area. NOW THEREFORE,BE IT RESOLVED,That the highest tribute be accorded to JACK SEBOLT as he brings to a close his tenure as a Board of Water and Light Commissioner. In regular session this 20th day of June. 1995, we wish him many more vears of well-deserved happiness and fulfillment;and BWL-Board Meeting Minutes Page 67 June 28, 1995 BE IT FURTHER RESOLVED,That a copy of this resolution be presented to him as a token of the high esteem in which he is held by the members of this Board. Adopted unanimously. The Commissioners and the audience stood to applaud Commissioner Sebolt's accomplishments and contributions to the Board of Water and Light. General Manager Pandy thanked Commissioner Sebolt for his advocacy on behalf of BWL employees. Chairman Hassler noted that a resolution adopted by the Lansing City Council on June 19, 1995, would be presented to Jack Sebolt at a dinner to be held in his honor following the Board meeting. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: Return on Equity to the City of Lansing. The BWL's return on equity paid to the City this year is approximately three percent above the total returned to the City last year,which is an increase of about $165,000. Per Resolution 95-6-6, the$5,835,855 to be paid to the City is 4.2 percent more than forecasted in June 1992 when the Return on Equity Agreement was signed. The return on equity under the current agreement is 4.0 percent of the retail revenue earned from the sale of electricity, water and steam. Ottawa Station Development Proieet Status. A copy of the bid tabulation for Equipment Removal and Salvage(Specification 9059-1)for the Ottawa Station Development Project was handed out for reference. General Manager Pandy noted that a good range of bids were received from eight companies. The BWL has ninety days from June 14, 1995,to select the best bid for Equipment Removal and Salvage. He briefed the Board on the various stages involved with the Ottawa Station Development Project. He noted that bids are being solicited for the commercial development of the Ottawa Station and are due September 1, 1995. Mr. Pandy told the Board that before any contract is awarded for the Ottawa Development Project, he would be submitting his recommendation for appropriate authorization. Safety Performance Improving. A copy of the BWL's Total Safety Performance(TSP) Report for fiscal year-to-date ending May 30, 1995,was handed out. The data indicates an improved safety performance this fiscal year with a TSP of 2.33 compared to 4.60 for the same time last year(lower numbers being better). General Manager Pandy congratulated the employees and stated he would hope they will continue to work safely. Competition Matters. General Manger Pandy distributed a copy of a letter from Southern Electric International.dated June 2, 1995, relative to their competitive rates for firm capacity and energy. Mr. Pandy and staff have met with representatives from Southern Electric International on several occasions to discuss cogeneration options and other opportunities. He noted that Southern Electric is developing a cogeneration project in Michigan. Mr. Pandy stated that competition is coming to Michigan from independent power producers(IPP's). Southern Electric International is probably one of the strongest ones,being a utility holding company in the Southern part of the United States. The Midwest region of the U.S. is particularly an attractive market to Southern Electric International due to a slowdown in the building of new locally owned generation plants. Page 68 BWL-Board Meeting Minutes June 28, 1995 Efforts to Reduce Coal Freight Costs. General Manager Pandy displayed a graph prepared by the BWL's Fuel Procurement staff depicting a downward trend in the price of coal purchased from about 2.2 cents per kwh in 1988 down to 1.9 cents per kwh in 1995. Staff is meeting with CN North America to further good faith negotiations on a private rail car to be used in unit train coal transport for a portion of the BWL's annual coal requirements. Savings realized from reduced coal freight costs are passed on to our customers through the Energy Cost Adjustment. This effort is helping to moderate electric bills for our customers. Overview of BWL Competition Team Results. General Manager Pandy summarized the issues identified by the two teams formed in April, 1995, to examine the financial and organizational implications of operating in a competitive environment. He reported that the BWL's Competition Task Force reviewed the recommendations submitted by the two teams. The Competition Task Force narrowed the list of options to respond to competition expected to challenge our utility in the next five years. Five new teams were formed to recommend an action plan to address the following issues: 1. Process Analysis 2. Integrated Resource Plan and New Technologies 3. Mutual Gains Bargaining/Market-based Compensation 4. Customer Flexibility and Services 5. Competitive Targets Conference on Enabling Technologies for Competitive Advantage. General Manager Pandy gave a broad overview of the technological changes expected to alter the utility industry, presented at a seminar by ABB. He noted that ABB is an international company who is a leader in automation, network management, information management, meter and load management, services,and communications. A copy of a speech, entitled"Is Price All there Is?" presented by G. Stein of General Motors Corporation was handed out. The focus of Mr. Stein's presentation at the conference was on competition and technology. Temporary Removal of River Fountain. General Manager Pandy reported that due to the replacement of the Riverwalk north of Michigan Avenue and construction of a plaza along the east bank of the Grand River, north of Michigan Avenue,the fountain in the river will need to be temporarily removed to avoid damage. The River-walk replacement project will extend into September, 1995, and will have an impact on events along the east side of the river--Michigan Avenue to Shiawassee. Mr. Pandy noted that the Riverfest held during the Labor Day weekend will be moved to another location. John and Deanna Strolle Focused on SPARROW Publication. General Manager Pandy called attention to an article in the Spring, 1995, issue of SPARROW. The publication features a story on Deanna Strolle's experience during her bout with cancer in 1989. She shares her insights on concerns and her experiences during her treatment period. It has been five years since Deanna Strolle's cancer was discovered and treated,and today, she remains cancer free. REMARKS BY COMMISSIONERS Commissioner Lontz mentioned he recently read an article in the DETROIT FREE PRESS regarding proposals initiated by the Michigan Public Service Commission(MPSC) to make specific recommendations for statutory changes to the Legislature. Proposals being presented by the MSPC would BWL-Board Meeting Minutes Page 69 June 28. 1995 provide greater innovation, achieve rate flexibility and promote competition and increased productivity. Commissioner Lontz expressed concern that the bottom line appears to be the residential customer will be paying the offset on the industrial rate. He asked how the BWL will be involved in lobbying efforts. General Manager Pandy stated that a proposal to restructure the provision of energy services and the regulation of Michigan's energy utility industries,called"Proposal M-A Michigan Plan for Flexible and Competitive Energy Utility Services" has been received. Electric System Control Division Director Bill Cook is coordinating a group to provide input to the MPSC on the proposal. Mr. Pandy stated that the BWL will also be working with MPPA,MMEA, and others in the discussion process. A report will be provided to the Board on management's conclusions and recommendations. Commissioner Strolle asked for an update on the BWL's Energy Proposal to Sparrow Hospital. General Manager Pandy responded that Sparrow has indicated they would like to work with the BWL on fine tuning our Energy Proposal. Sparrow seems to have turned away from the cogeneration option because of their physical property limits and the notion of their core businesses versus ancillary businesses. Steam Utility Director Joette Woodard-Yauk and Electric System Control Director Bill Cook also responded to additional questions raised by the Commissioners. Commissioner Evans asked about the status on discussions held with the Granger Company on the sale of the BWL's main office building. General Manager Pandy responded that no further discussions have been held with the Granger Company since May. 1995, when they were unable to negotiate a satisfactory price for the main office building. Mr. Pandy noted that it is his understanding Mr. Granger is continuing to talk to prospective tenants. Chairman Hassler congratulated Commissioner Dr. Eva Evans who is retiring from the Lansing School District at the end of this month following a 30-year career with the system. She will leave as the Deputy Superintendent for Curriculum. Commissioner Hassler also congratulated Commissioner William Lontz who is retiring this month from the State of Michigan after 29 years of service. He will leave as Director of Michigan Development Service in the Department of Commerce. The Board, staff,and the audience gave Commissioners Evans and Lontz a round of applause for reaching a new milestone. General Manager Pandy thanked Commissioner Jack Sebolt for his role in the management of the BWL Employees' Pension Fund through the Personnel Committee. When Mr. Pandy came to work for the BWL in 1984, the Pension Fund was valued at$48 million. As Commissioner Sebolt closes his time with the Board, the Pension Fund is now valued at over$150 million. ADJOURNMENT On motion of Commissioner Lontz, the Board adjourned a 6:30 p.m. Mary E. S a, Secretary Filed. June 28, 1995 Marilynn Slade, City Clerk RECEIVED ..:::::...............:::..:: ::::::: . .........:::::::::::::::::.. ::.::.::::>:::>::>:::: :>:::::;:.;:.>:.;:.::.:>::::>::>:.::::::..::..: .:::::...:::::.:.: :.:::::::.::......... L I� : :::> : BOARD . F WAT NOTICE RESCHEDULED REGULAR MEETING The regular meeting of the Board of Water and Light Commissioners of the City of Lansing, Michigan, scheduled on June 27, 1995, is being rescheduled as follows: Rescheduled Date: Tuesday, June 20, 1995, at 5:30 p.m. Location: Second Floor Boardroom Board of Water and Light Office Building 123 West Ottawa Street Lansing, Michigan In accordance with the American with Disabilities Act (ADA), please call the Corporate Secretary's Office at 371-6033 at least three business days prior to a public meeting to request special accommodations such as mobility, visual, hearing or other assistance. Certified by: BOARD OF WATER AND LIGHT Mary ova Corporate Secretary Telephone: 371-6033 Post: 5-26-95 BWL: City cc: Board of Commissioners City Clerks Office BWL Executive Staff City Council Office Information Desk Mayors Office Calvin Jones/Eric Stancliff Township Clerks Page 49 MINUTES OF BOARD OF COMMISSIONERS' MEETING u LANSING BOARD OF WATER AND LIGHT CITY CLERK Tuesday,May 23, 1995 The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian,Hassler,Lontz, Sebolt,and Williams-5 Absent: Commissioner Evans, O'Leary, and Strolle-3 The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS That minutes of regular session of April 25, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS AND PETITIONS No communications received. Page 50 BWL -Board Meeting Minutes May 23, 1995 COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met on May 9, 1995,to discuss the following topics: 1. Fiscal 1995-96 Budget 2. Risk Insurance 3. DeWitt Township Water 4. Real Property Matters 5. Michigan Municipal Electric Association(MMEA) Present were Commissioners Christian,Evans,Hassler,O'Leary, Strolle, and Williams. With excused absence were Commissioners Lontz and Sebolt. Fiscal 1995-96 Budget. Treasurer/Controller Dana Tousley presented details on the proposed Fiscal 1995-96 budget, including the projected income statement and sales and revenue forecast. The budget to budget percentage change is-0.2%from last year's budget. A total budget variance analysis was presented. FY 1996 Program/Reason Primary Reason Budgeted increase/decrease Net Labor Early Retirement and Health Insurance ($3,273,269) Outside Services&Other Decreased Outside Services ($ 832.558) Coal, Chemical&Purch. Power Increased Purch.Power&Wholesale Water Sale $4,340,151 Vehicle&Material Costs Decreased in Maintenance Material ($ 268,926) Transfer to Capital Increased transfers to capital ($ 222,649) Total Change Budget to Budget ($ 257,251) BY THE COMMITTEE OF THE WHOLE: FISCAL YEAR 1995-96 BUDGET (Resolution 95-5-1) RESOLVED,That the annual budget covering Fiscal 1995-96 be approved as presented (see attachment). FURTHER RESOLVED,That the capital projects in Exhibit 3 of the budget booklet be authorized in the amount of the project estimate. Capital expenditures for Fiscal 1995- 96 are limited to the amount included in the budget. Risk Insurance. The feasibility of raising BWL insurance deductibles and self-insuring with respect to directors' and officers liability insurance was discussed. Risk Manager Jerry Blanchard presented a current and historical overview of BWL insurance expenses over the past ten years. Perspectives were presented on how insurance expenses can be reduced for various coverages nearing their policy term. Based on past BWL experience relative to premiums paid and paid losses, the alternative of taking more risk appears to be favorable. There was consensus among the Commissioners that raising insurance deductibles for property, liability,workers compensation and other related coverages would be a viable option to control premiums. Staff will be preparing bid specifications to solicit bids for various insurance coverages with higher deductibles. Management recommendations are to be submitted to the Board for consideration. BWL-Board Meeting Minutes May 23, 1995 Page 51 Real Propertv Matters. General Manager Pandy reported that the BWL and the Granger Company have thus far been unable to negotiate a satisfactory price for the main office building at 123 W. Ottawa Street and the parking lot at 221 North Capitol Avenue. Arriving at a satisfactory sales price was one of the conditions the Commissioners placed on the proposed sale of the building and associated parking lot. This assures that the sales price would bring in enough money to build or buy and/or remodel new office facilities. The City Council is being asked to cancel the scheduled public hearing, scheduled for June 4, 1995, on the sale of the BWL main office building and the 221 North Capitol Avenue parking lot. The sale of the main office building is on hold for now. DeWitt Township Water. Water Utility Director Clyde Dugan updated the Commissioners on discussions with DeWitt Township(Township)leading to a retail water service agreement for portions of the Township. Three documents were reviewed: (1)Draft Water Franchise Agreement, (2)Draft Water Service Agreement,and(3)Draft Supplemental Agreement No. 1. These documents would form the basis for the BWL providing retail water service to portions of DeWitt Township. Under the proposed agreement,the BWL would be in a position to provide retail water service to the southern part of the Township, including all parts from Sheridan Road, north to Stoll Road, lying west of U. S. 127. Provisions in the draft agreement would allow for future expansion to include connecting to the Township's existing water system. The connection would allow the BWL to either provide DeWitt Township customers with water under a future wholesale arrangement,or to assume the Township's customers under an extension of the retail agreement. Since the Township's system is already interconnected with the City of DeWitt's system, the BWL would also be in a position to provide the City of DeWitt with water service. The master agreement has provisions for the BWL to acquire well properties within the Township and lay transmission mains. This agreement is consistent with the BWL's existing retail water service agreements in Delhi Township and Watertown Township. Michip,an Municipal Electric Association(MMEA). General Manager Pandy reported that the MMEA Board will be considering a new dues formula at their Spring Conference on May 11-12, 1995. The new formula would increase BWL dues by$5,000 per year(34.7%)from$14,427 to$19,435. BWL management with Board concurrence does not believe that the value of services provided by the Association justifies the annual cost of dues. The BWL will be resigning as a full member of MMEA,and will request Associate Member status. The BWL would request the privilege of advocating its own position if and when said position is not consistent with the position of MMEA on any issue. The BWL plans to pay a nominal annual amount to the Association in support of MMEA activities. Respectfully submitted, Gerald W. Williams, Chair Pro Tern COMMITTEE OF THE WHOLE BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER SEBOLT That the Committee of the Whole Report, including Resolution 95-5-1 regarding the Fiscal Year 1995-96 Budget,be approved as presented. Adopted unanimously. f✓1 >`�t�C Ft i^�.��'r I BOARD OF WATER AND LIGHT-LANSING MICHIGAN BUDGET FISCAL YEAR ENDING JUNE 30, "1996 WATER ELECTRIC STEAM TOTAL PROJECTED INCOME STATEMENT FY 96 OPERATING REVENUE [1] 15,831,817 135,275,673 9,117,994 160,225,484 Operation/Maint Expense 10,946,620 114,507,746 8,639,768 134,094,134 Depreciation Expense - 17,469,000 TOTAL OPERATING EXPENSE 151,563,134 OPERATING INCOME 8,662,350 Other income (2] 3,950,600 Other Expense [3] 2-088,379 NET INCOME 10,624,571 NET INCOME AFTER CITY PAYMENT 4437057 RATE OF RETURN-3195 RATE BASE 1.7% PROJECTED CASH FLOW FY 96 Restricted Operating Cash 17,468,000 Restricted General Cash 11,879,532 Special Project/Const Cash 27,000,000 BEGINNING CASH 7-1-95 [4] 66,347,532 Sources of Cash Net Income 10,524,571 Facillities Advancement Charge 2,909,000 Depreciation 17,469,000 TOTAL SOURCES OF CASH 30,902,571 SOURCES OF CASH + BEG. CASH 87,250,103 Uses of Cash Debt Principal (5] 1,277,500 Capital Expenditures (6] 30,230,000 Payment to City 6,087,514 TOTAL USES OF CASH 37,595,014 Operating Cash Restricted Op 9 11,174,467 Restricted General Cash 15,263,713 Special Project/Const Cash 23,216,909 ENDING CASH 6-30-96 49,655,0891 1 BOARD OF WATER AND LIGHT- BUDGET FOOTNOTES FISCAL YEAR ENDING DUNE 30, 1996 [1) Revenue based on sales forecast for water(9,044,262 ccf), electric (2,503,970 mwh) and Steam (1,431,441 mlb). These sales levels are 13.8% higher, 1.6% lower, and 0.6% lower respectively than the twelve month period ended March 1995. Water revenue includes a 5.5% rate increase 1/1/96 and wholesale sales to Delta and Lansing Townships. [2] Other Income includes earnings on short term securities and sewerage collection fees. [3] Other Expense includes interest on the 1989 and 1994 Revenue Bonds, Pension debt, Michigan Ash building at Erickson, Steam Debt to Electric, and customer deposits. [4] Projected June 30, 1995 Restricted Operating Cash balances Operations and Maintenance Fund $17,000,000 Bond and Interest Fund 468,000 Total Restricted Operating Cash $17,468,000 Projected June 30, 1995 Restricted General Cash balances Coal Buildup $ 3,153,518 Uninsured Losses 8,726,014 Total Restricted General Cash $11,879,532 [5] Debt repayment includes principal payment for the 1989 and 1994 Revenue Bonds, Pension debt, and the Michigan Ash building at Erickson. [6] Capital expenditures represent total amounts estimated for all Annual Capital Additions, Planned Capital Projects, and Bond Projects during Fiscal Year 1996. BOARD OF WATER &LIGHT-LANSING, MICHIGAN BUDGET FOR FISCAL YEAR ENDING JUNE 30, 1996 DIVISION SUMMARY-OPERATIONS &MAINTENANCE EXPENSE Restated for Budget Comparison ------------------------------------------------------ Vetiicle & Material Production Outside Expenses Net Equipment & Fuels/Chem. Services to be Labor 11/ Charges Supplies Purch Power & Other 0 Total Water Electric Steam Distributed Total TRATIVE 1,032,511 78 43,225 0 18,716,187 19,792,001 90,127 983,636 55,310 18,662,928 19,792.001 C UTILITY 15,93B,690 699,659 2,819,842 70,766,259 3,126.993 93,351,443 0 93,023,643 0 327.800 93.351,443 JTILITY 3.364,398 219,199 477,677 2,427,068 1,092,396 7,580,738 7,580,738 0 0 0 7,580,738 ITILITY 2,179,542 90,721 368,485 4,292,013 1.202,526 8,133.287 0 0 8,133.287 0 8.133,287 ;AL SERVICES 3,617.500 67,954 706,021 0 1,522,439 5,913,914 0 0 0 5,913,914 5,913,914 RESOURCES 481,749 0 54,850 0 252,200 788,799 0 0 0 788,799 788,799 IATE PLANNING 157,734 0 47,500 0 70,500 275,734 0 0 0 275,734 275.734 JICATION 155.731 1,196 47,820 0 218,280 423,027 0 19,091 0 403,936 423,027 RER/CONTROLLER 1,756,030 73,375 37.709 0 196,041 2,063,155 0 0 0 2,063,155 2.063,155 1ER SERVICES 4,242,534 111,280 107,758 0 722.661 5.184,233 152,515 324,444 31,009 4.676,265 5.184,233 D i OTAI_ $32,926.419 $1,263,462 $4.710,887 $77.485,340 $27,120,223 $143,506,331 $7,823,380 $94,350,814 $8,219,606 $33.112,531 $143,506,331 Distributed Expenses: Spread to Water, Electric,&Steam/3/ 3,123,240 20,156,932 420,162 (23,700.334) 0 Vehicle and Equipment Charges/4/ (1,263,462) (1,263,462) Indirect Costs Spread to Capital Budget/5/ (8,148.735) (8,148,735) 35 NET BUDGET BY UTILITY $10.946,620 $114,507.746 $8,639,768 $0 $134.094,134 BOARD OF WATER AND LIGHT- DIVISION SUMMARY FOOTNOTES FISCAL YEAR ENDING DUNE 30, 1996 [1] Net Labor refers to the dollar amount of labor charged to operations and maintenance expense accounts. [2] Outside Services and Other include such items as insurance, pension funding, FICA; service engineers, maintenance contractors, consultants, utilities, travel and conference, dues and subscriptions. [3] Administrative, general, and engineering expenses are allocated to the Water, Electric, and Steam based on such factors as personnel, labor charges, fuel costs, and meters in service. [4] The cost of owning and operating vehicles is in RA 425 and in the grand total. Thus, vehicle charges must be subtracted from total charges to arrive at net operation and maintenance expense. This procedure complies with our normal accounting practice. [5] Indirect costs applied to capital projects represents overhead charged to fixed capital and credited to expense. Page 52 BWL-Board Meeting Minutes May 23, 1995 GENERAL MANAGER'S RECOMMENDATIONS ELECTRIC Res. No. 95-5-2 That Board enter into a three year purchase order with Nalco Chemical Co. of Naperville.Illinois,for Chemical Commodity Supplier and Consultant Services. The chemical commodities and consultant services will be provided at Erickson Station for use in boiler water and cooling tower processes. The purchase order particulars are as follows: 1. The three year cost for chemical commodity supplier and consultant services is estimated to be$271,163. 2. The unit pricing for chemical commodities and consultant services will remain firm for the entire three year period. 3. The term of the purchase order will be from July 1, 1995 -June 30, 1998. -------------------- By entering into this three year purchase order with Nalco Chemical Co., the BWL will be able to maintain its successful chemical treatment program while at the same time minimizing cost. Further, this purchase order will allow the BWL to continue its long term successful business relationship with Nalco Chemical Co. -------------------- Res. No. 95-5-3 That Board enter into a three year purchase order with Betz Laboratories, Inc., of Trevose,PA for Chemical Commodity Supplier and Consultant Services. The chemical commodities and consultant services will be provided at Eckert Station for use in boiler water and waste water processes. This purchase order will be subject to approval by the Michigan Department of Natural Resources of the chemical commodities proposed for use at Eckert Station by Betz Laboratories, Inc. The purchase order particulars are as follows: 1. The three year cost for chemical commodity supplier and consultant services is estimated to be$80,013. This represents a 3.3%discount due to Betz being the successful bidder at Moores Park Steam Plant. 2. The unit pricing for chemical commodities and consultant services will remain firm for the entire three year period. 3. The term of the purchase order will be from July 1, 1995 -June 30, 1998. -------------------- BWL-Board Meeting Minutes May 23, 1995 Page 53 By entering into this three year purchase order with Betz Laboratories,Inc.,the BAIL will be able to maintain its successful chemical treatment program while at the same time minimizing cost. Further, this purchase order will allow the BWL to continue its long term successful business relationship with Betz Laboratories, Inc. -------------------- BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER CHRISTIAN That Resolutions 95-5-2 and 95-5-3, respectively,be approved. Adopted unanimously. STEAM Res. No. 95-5-4 That the Board enter into a three year purchase order with Betz Laboratories, Inc., of Trevose, PA for Chemical Commodity Supplier and Consultant Services. The chemical commodities and consultant services will be provided at Moores Park Steam Plant for use in boiler water and steam conditioning processes. The purchase order particulars are as follows: 1. The three year cost for chemical commodity supplier and consultant services is estimated to be$469,564. This represents a 3.3%discount due to Betz being the successful bidder at Eckert Station. 2. The unit pricing for chemical commodities and consultant services will remain firm for the entire three year period. 3. The term of the purchase order will be July 1, 1995 -June 30, 1998. ------------------- By entering into this three year purchase order with Betz Laboratories, Inc., the BWL will be able to maintain its successful chemical treatment program while at the same time minimizing cost. Further,this purchase order will allow the BWL to continue its long term successful business relationship with Betz Laboratories, Inc. ----------------- BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS That Resolution 95-5-4 be approved. Adopted unanimously. Page 54 BWL-Board Meeting Minutes May 23, 1995 WATER Res. No. 95-5-5 That the Board agree to serve water to proposed Water District No. 110,Delhi Township, as requested by resolution of the Delhi Charter Township Board on February 7, 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15, 1972,covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 110 established by Township resolution on February 7, 1995, and will provide a potable water supply to said district. 2. The Township will be required to make a$48,294 non-refundable contribution- in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement(Supplement CX)covering the furnishing of a potable water supply in Water District No. 110. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the sum of$48,294 from the Township, the project be approved for installation, and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CX) to furnish a potable water supply in Water District No. 110. The geographical area of Water District No. 110 is as follows: Beginning at northeast corner of S. Washington Avenue and Holt Road thence west along Holt Road 1,325 feet to Kahres Road thence south along Kahres Road 475 feet. To provide a potable water supply within the proposed new district requires the installation of 1,800 feet of water main and fire hydrants at an estimated cost of $48,294. The main extension will serve four(4)residential customers. One-time connection fees will amount to$2,860. Estimated annual revenue is$1,360. Water mains to be installed in Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. ------------------- This amends Resolution 95-2-10,adopted by the Board on February 28, 1995,which modifies the geographical area described in part"thence south along Kahres Rd. , feet" to 475 feet and modifies the"estimated cost of$70,697.05" to$48,294. BWL-Board Meeting Minutes May 23, 1995 Page 55 Res. No. 95-5-6 That the Board agree to serve water to proposed Water District No. 113,Delhi Township,as requested by resolution of the Delhi Township Board on February 1, 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15. 1972, covering the furnishing of a potable water supply in Delhi Township,the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 113 established by Township resolution on February 1, 1995, and will provide a potable water supply to said district. 2. The township will be required to make a$37,643.75 non-refundable contribution- in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement(Supplement CXIII)covering the furnishing of a potable water supply in Water District No. 113. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the sum of$37,643.75 from the Township, the project be approved for installation,and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CXIII)to furnish a potable water supply in Water District No. 113. The geographical area of Water District No. 113 is as follows: Meadow Ridge Subdivision Phase 1,Lots 1 through 27. To provide a potable water supply within the proposed new district requires the installation of 1,585 feet of water main and fire hydrants at an estimated cost of $37,643.75. The main extension will serve twenty-seven(27)residential customers. One-time connection fees will amount to$19,305. Estimated annual revenue is$9,180. Water mains to be installed in summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. -------------------- BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER SEBOLT That Resolutions 95-5-5 and 95-5-6, respectively,be approved. Adopted unanimously. Page 56 BWL-Board Meeting Minutes Mav 23, 1995 RESOLUTIONS BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS RESOLVED,That the regular meeting of June 27, 1995,be rescheduled for Tuesday, June 20, 1995, at 5:30 p.m. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: • The BWL recently won the 1995 Employee Involvement Association(EIA)Award. The BWL was honored by the Employee Involvement Association for our Share the Success. Safety, and Suggestion programs. The EIA Award recognizes excellent efforts that contribute to improved employee recognition and the enhancement of overall quality processes and customer satisfaction. • The BWL received a 1994 Safety Award from the American Public Power Association(APPA). The BWL placed second in Group F,for systems with 1,000,000 to 1.999,999 worker-hours of exposure annually. • An article in ELECTRIC UTILITY WEEK May 8, 1995, states that UtiliCorp United has launched EnergyOne as the first nationally branded line of products and services for electric and gas utility customers. The move signals the start of true national competition in the$255-billion electricity and natural gas market. • The April 10. 1995 issue of the STANDARD &POOR'S CREDITWEEK MUNICIPAL reports that public power faces crucial choices. Increasing competition in the public power industry is forcing issuers in this sector to make critical choices to survive. Some public power utilities will be incompatible with the high ratings they traditionally have enjoyed. The article states that as utilities debate their strategies over the next three to five years.. investors should be aware that"restructuring" will be a common theme. These financial and organizational changes will present risks and opportunities. • Market Strategies has started conducting the BWL's semi-annual customer attitude survey (the week of May 22. 1995). Telephone interviews will take place with 400 residential customers and will take between five and seven days to complete. • The Greater Lansing Convention&Visitors Bureau has appointed General Manager Joe Pandy to serve on their Board of Governors. The Bureau's advisory Board considers matters relative to sales, marketing programs and promotions. • The Commissioners received a copy of the Water Utility Annual Report for Fiscal Year 1993- 1994. General Manager Pandy presented an overview of the report. BWL-Board Meeting Minutes May 23, 1995 Page 57 • A sheet providing information on Consumers Power Company's SBU first quarter ending March 30, 1995,performance was handed out. Consumers Power electric division tracks its performance through key factors such as the price customers pay for electricity, the amount of electricity sold,the quality and level of service provided to customers,finances, and safety. • A copy of the Ottawa Station Development bidder's list was handed out for information. Request for Proposals are being issued on June 2, 1995, to four major firms with strong development experience. All proposals are due no later than September 1, 1995. REMARKS BY COMMISSIONERS Chairman Hassler appointed the following Commissioners to serve on the Board's Nominating Committee to select new Board officers for Fiscal Year 1995-1996: Commissioner David O'Leary, Chair Commissioner John Strolle Commissioner Ernest Christian Commissioner Hassler complimented the directors for a fine job in recognizing their employees at the BWL's Annual 25-Year Club Party. General Manager Pandy announced that dinner arrangements are being made to honor Commissioner Jack Sebolt on the occasion of his retirement as a Commissioner of the Board of Water and Light. He has served on the Board for over 17 years. EXCUSED ABSENCES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER CHRISTIAN That the absences of Commissioners Evans,O'Leary, and Strolle be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Lontz,the Board adjourned at 5:50 p.m. Amova, Secretary Filed. May 30, 1995 Marilynn Slade. City Clerk Page 40 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT`S y' _ f l 1" J Tuesday,April 25, 1995 LA;,S1_%`f�1 CITY CLERK The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa Street.Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian.Evans,Hassler,Lontz, O'Leary, Sebolt,and Strolle-7 Absent: Commissioner Williams-1 The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That minutes of regular session of March 28, 1995,be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS AND PETITIONS No communications received. BWL-Board Meeting Minutes April 25, 1995 Page 41 GENERAL MANAGER'S RECOMMENDATIONS ADMINISTRATION(AUDITING) Res. No. 954-1 Advise the Lansing City Council that we have received a proposal dated March 30 1995, from Deloitte&Touche. Their proposal quotes a not-to-exceed fee of$33,500 for audits of the Board of Water and Light and its Pension Fund for the fiscal year ending June 30, 1995. We asked for this proposal in accordance with the City Council resolution adopted March 29. 1993, on engaging independent auditors for the fiscal years ending June 30, 1993-95. The cost is reasonable. It is the amount quoted in their April 1993 proposal,a 4.7% increase from last vear. We recommend retaining Deloitte&Touche to conduct these audits according to their proposal. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 954-1 be approved. Adopted unanimously. COMMUNICATIONS Res. No. 954-2 Authorize Market Strategies. Inc. to conduct a semi-annual customer attitude survey at a price not to exceed$20,000. ---------------- The survey is used to determine the perception of residential customers toward the BWL and its services,and to measure performance of certain communications programs and customer satisfaction for the Share the Success program. An additional$2.500 is included in this request to cover added questions relating to the auto-attend phone system expected to go on-line later this year. We may also add questions relating to customer service preferences of our customers. Page 42 B'NL-Board Meeting Minutes April 25. 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER EVANS That Resolution 95-4-2 be approved. Adopted unanimously. CORPORATE PLANNING Res. No. 954-3 That the Board of Water and Light(BWL)declare the following described property as surplus and no longer used or useful for the operation of the BWL's utilities: That portion of the SW 1/4 of Section 34,T4N, R3W, Delta Township, Eaton County, Michigan lying Southeasterly of the Grand Trunk Western Railroad right-of-way, containing 14.3 acres, more or less. ----------------- This parcel of property was acquired as part of the Erickson Station property purchase in 1968. This parcel is vacant and there is no foreseeable use for utility purposes in the future. The property is physically separated from the Erickson Station property by the Grand Trunk Western Railroad right-of--way. Access to the property has been further limited by the closing of the railroad crossing at Davis Highway, east of Canal Road and the property is only accessible from the east by way of Davis Highway off US 27. The property will be available for sale in accordance with BWL policies and City Charter requirements. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-4-3 be approved. General Manager Pandy interjected and advised the Commissioners that this property item needs further discussion. He asked that it be pulled from the agenda and considered at a future meeting. Commissioner Strolle rescinded his motion on the adoption of Resolution 95-4-3, and there was concurrence by Commissioner Christian. There being no objection, agenda item 95-4-3 (Corporate Planning)was pulled from the agenda. BWL-Board Meeting Minutes April 25, 1995 Page 43 HUMAN RESOURCES Res. No. 95-44 That Jim D. Valentine, a Distribution. Maintenance and Installation Supervisor for Water Distribution,be awarded a total of$285.90 for suggestion proposal number 1995- 051, to use a regular valve key, reinforced at bottom and driven over seat collar to turn and lift seat out of hydrant when replacing Traverse City hydrant system. By implementing this proposal, it is estimated that the BWL will realize a net savings of $2.109.04 in the first year. Res. No. 954-5 That Patrick Rennie, a Steam Production Operator for Moores Park Operations, be awarded a total of$202.00 for suggestion proposal number 1995-057, to use sewer cleaning nozzle attached to air hose to clean bottom ash lines when clogged. By implementing this proposal,it is estimated that the BWL will realize a net savings of $1,280.00 in the first year. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-4-4 and 954-5 be approved. Adopted unanimously. PENSION Res. No. 954-6 That Bobby L. Olson,Emergency Service Worker in Overhead Line Construction. be placed on a disability pension of$1.241.95 per month effective April 26, 1995. He has selected Option IV, with Workers' Compensation Offset, with the provision that after his death, if his wife. Sharon M. Olson. survives him she will receive 100%,or $1.241.95, per month for the rest of her life as provided under Option IV. If his wife predeceases him. the pension amount of$1.241.95 will revert back to the regular pension amount of$1.408.52 for the rest of his life as provided under Option IV. Mr. Olson has worked for the BWL for 23.52 years and is 51 years of age. Page 44 BWL-Board Meeting Minutes April 25. 1995 BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-4-6 be approved. Adopted unanimously. RESOLUTIONS WATER QUALITY AWARENESS WEEK (Resolution No. 95-4-7) WHEREAS, Governor John Engler has declared May 7 - 13 , 1995 as Water Quality Awareness Week in the State Of Michigan: and WHEREAS. An abundant supply of safe, high quality water is essential to the health and comfort of Lansing citizens as well as its economic growth; and WHEREAS. The Board of Water and Light has been charged with this responsibility and has provided a safe. reliable water supply since 1885 in an ever more complex environment: and WHEREAS. The Board of Water and Light, in cooperation with the American Water Works Association, the Michigan Water Environment Association and the Lansing Area Groundwater Management Board have all joined together in educating the public on this limited natural resource and to call attention to Water Quality Awareness Week. NOW, BE IT RESOLVED THAT WE,THE BOARD OF COMMISSIONERS. OF THE BOARD OF WATER AND LIGHT. IN THE CITY OF LANSING.by the power vested in us, do hereby proclaim the week of May 7 - 13, 1995 as "WATER QUALITY AWARENESS WEEK" and urge all of our employees and customers to join us in celebrating our abundant supply of a safe. reliable and high quality source of water. BY COMMISSIONER EVANS-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-4-6 be approved. Adopted unanimously. BWL-Board Meeting Minutes April 25, 1995 Page 45 GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: Public Power Under Attack. General Manager Pandy handed out a copy of APPA's article entitled "War," written by Roberta Varela,editor of PUBLIC POWER WEEKLY. The article indicates that investor-owned utilities(IOU's) have launched a"holy war' against public power. The author writes that IOU's want"equalizers" to fall into place so that the most efficient power producers will win on their economic merits. Those equalizers include: (1) elimination of public power's privilege of issuing tax- exempt securities, (2)elimination of public power's exemptions from income and other taxes: (3) an end to public power's preferential access to federal power: and(4)in the case of rural electric cooperatives, elimination of access to low-interest loans. Mr. Pandy noted that with competition emerging,the public power system will be under attack through federal treatments. The BWL will be involved in this important issue through the American Public Power Association(APPA). Guide to Downtown Development Projects. The BWL has been cooperating with the City of Lansing's publication"1995 Guide to Downtown Development Projects." The guide provides information to the public on construction projects and road resurfacing and repairs which will temporarily create some traffic problems in Downtown Lansing. The BWL is doing a companion piece at the request of the City in the BWL's CONNECTIONS bill stuffier during the May billing cycle,which includes similar information in a more abbreviated form. THE LANSING REGION Publication. General Manager Pandy handed out a copy of the Lansing Regional Chamber of Commerce's publication entitled THE LANSING REGION- 1995 METROPOLITAN PROFILE. This publication is supported through the Economic Development arm of the Chamber through business support of the Capital Choice program. Employee Handbook on Changing Work Habits. General Manager Pandy handed out copies of THE EMPLOYEE HANDBOOK OF NEW WORK HABITS FOR A RADICALLY CHANGING WORLD. The handbook provides thirteen(13)ground rules for job success in the Information Age. All BWL employees will be receiving a copy of this publication in hopes that it will reinforce management's continuing message on change and the need for employees to adapt and add value to the organization for the BWL's survival in a competitive world. MMEA Directory. Newly published copies of the Michigan Municipal Electric Association(MMEA) directory were handed out for reference. The directory lists all of the municipal utilities in the state with the names of their officers and Board Members. Adopt-A-River Fund-Raiser. The Adopt A River is sponsoring a riverboat gambling party cruise on the Grand River on May 20th. This riverboat extravaganza will be held aboard the Michigan Princess starting at 5:30 p.m. The ship will dock permanently at Grand River Park at 7:15 p.m. for general boarding and public gambling for the remainder of the evening. The cost is$100 for a Table Sponsorship and$25 for individual party cruise tickets. Proceeds from this event will benefit the Adopt A River's biannual river cleanups. Be a Tourist in Your Town. The Greater Lansing Convention Visitors' Bureau is planning a city-wide event to be held Mav 6th called `Bea Tourist in Your Town.' A passport is available for$1.00 and will provide free admission to all Lansing area museums and Potter Park Zoo. The passport can also be used for riverboat rides, trolley transportation and special restaurant discounts. In conjunction with this event, the BWL will be celebrating the beginning of Drinking Water Week and will be hosting an open house on May 6th at the Dye Water Conditioning Plant,from 10 a.m. to 5 p.m. The BWL's state champion water tapping team will be demonstrating their swift tapping talent between 11 a.m. and 3 p.m. BWL-Board Meeting Minutes Page 46 April 25. 1995 Dr. Eva Evans to Retire From Lansing School District. General Manager Pandy reported that Commissioner Eva Evans will be honored at a retirement reception on Friday,May 19th, at the Wharton Center Grand Tier. This celebration includes the Festival of Jazz,featuring Tim Cunningham.Lansing students and the Dr. Eva Evans. MPPA Proposal to Southern Engineering Comnanv. A proposal has been submitted to Southern Engineering Company on behalf of the Michigan Public Power(MPPA)for the Rate Pavers'Request jor Proposals. General Manager Pandy noted that the Rate Pavers is comprised of MPPA members who are not in the MPPA Power Pool but who chose to buy wholesale power and energy from Consumers Power under their wholesale rate tariffs. He stated that Southern Engineering has a need for 51.5 MW of power and energy services for the years 1997 through 2001. MPPA has teamed up with Indeck Energy Services and submitted a joint energy services proposal. A summary of estimated charges were reviewed with the Board based on (1)busbar costs with no transmission or losses and(2)delivered costs with transmission charges and bulk transmission losses. Consumer Power Co. Rate Survey. General Manager Pandy displayed Consumers Power Company's typical bill comparison rate survey for the quarter ending March 31, 1995. The survey compares electric rates by various levels of usage for rural electric cooperatives, municipals,and investor-awned utilities. Mr. Pandy noted that BWL rates ranked number one in both the Residential type and Small Commercial &Industrial customer type,while ranking number two for the Large Commercial&Industrial group. The range breakdown of BWL rates below Consumers Power rates are listed below: Customer Type Ran a of BWL Rates Below CPCo Residential 16.7%to 26.3% Small Commercial&Industrial 21.5%to 31.4% Large Commercial&Industrial 13.1%to 34.4% Steam Supply Proposal to General Motors. General Manager Pandy reported of General Motors' notification on April 25 that they have filed the 150 day letter with the local union in Lansing. The clock is officially running, and the 150 days will be up by September 22. 1995. Barring any major labor relations issues.the BWL hopes to proceed with the steam extension project this fall. Surplus Computer Equipment. BWL staff has taken an inventory of surplus computer equipment considered outdated technically but has some value for less technical users. The surplus IBM compatible PC's with monochrome and color monitors will be offered to the Lansing School System for classroom use. Share the Success Performance Measures. General Manager Pandy reported that he will be meeting with the Share the Success(STS)Performance Measures Committee on Thursday, April 27th to discuss a new focus for STS. At the request of the Executive Staff, the committee is being directed as follows: 1. That the number of measures be narrowed to a maximum of ten(10)--focusing on key competitive issues such as cost per unit, reliability, safety, environmental, customer favorability. 2. That the bonus of 0-5%be capped at the level of gross savings to customers. If savings do not exceed the bonus, then the bonus would be limited. BWL-Board Meeting Minutes April 25, 1995 Page 47 3. That the 1%safety bonus for individuals be eliminated. By assigning proper points in STS to safety, the safety program would remain a priority at the BWL. Resolution Requesting the Reappointment of Gerald Williams. The Commissioners signed a letter addressed to Mavor David Hollister requesting the reappointment of Commissioner Gerald Williams. BY COMMISSIONER O'LEARY-- SECONDED BY COMMISSIONER EVANS RESOLVED, That the BWL Board of Commissioners heartily recommends the reappointment of Commissioner Gerald Williams for another four-year term commencing July 1,1995. FURTHER RESOLVED, That the Commissioners' letter of support be transmitted to Mayor Hollister for consideration. Adopted unanimously. REMARKS BY COMMISSIONERS Commissioner Hassler commented on the Consolidated Financial Statement for March, 1995. He expressed concern over excessive production costs incurred by the Electric Utility in March. He stated that hopefully the April 1995 financial statement will reflect costs more in line with normal expenditures for this fiscal year. General Manager Pandy reported that a torn coal handling conveyor belt at Erickson Station. restricted the plant's normal load to one-half or 80 MW for the day. A repair crew was brought in at 3:30 a.m. (April 25)to repair the conveyor belt. An improperly operating limit switch caused the belt to tear over night. Normal operations are expected to resume by April 26th. EXCUSED ABSENCES BY COMMISSIONER EVANS-- SECONDED BY COMMISSIONER SEBOLT That the absence of Commissioner Williams be excused. Adopted unanimously. BWL-Board Meeting Minutes Page 48 April 25. 1995 EXECUTIVE SESSION BY COMMISSIONER HASSLER-- SECONDED BY COMMISSIONER STROLLE That the Board go into Executive Session to consider a potential land acquisition matter. The motion was adopted by the following vote: YES: Commissioners Christian,Evans,Hassler,Lontz,O'Leary, Sebolt, Strolle-7 NAYS: None ABSENT: Commissioner Williams-1 The Board convened in Executive Session at 6:12 p.m. BY COMMISSIONER HASSLER-- SECONDED BY COMMISSIONER STROLLE That the Board return to regular session(6:35 p.m.) Adopted unanimously. ADJOURNMENT On motion of Commissioner Christian,the Board adjourned at 6:35 p.m. Mary . SWa, Secretary Filed: May 2, 1995 Marilynn Slade, City Clerk —Page 25 MINUTES OF BOARD OF COMMISSIONERS' MEETING ! -� LANSING BOARD OF WATER AND LIGHT ,t CLERK Tuesday,March 28, 1995 The Board of Commissioners met in regular session at 5:30 p.m.- in the Main OR-ice Building, 123 West Ottawa Street. Lansing. Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian. Hassler, Lontz. O'Leary, Sebolt, Strolle- and Williams-7 Absent: Commissioner Evans -I The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That minutes of regular session of February 28. 1995. be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS AND PETITIONS No communications received. 11aee 26 BWL-P-ns,d Meeting Mwutez March 28. 1995 COMMITTEE OF THE WHOLE REPORT The Committee of the Whole met on February 28. 1995. to receive update reports on Board of Water and Light(BWL) activities. Present were: Commissioners Evans. Hassler,Lontz, O'Leary, SebolL Strolle. and Williams(Chair Pro Tem). Excused absence was Commissioner Christian. Staff presentations on the following topics were received. 1. Lansing Automotive Division (LAD) Steam Proposal. Steam Utility Director Joette Woodard- Yauk presented a summary update on the benefits and rate projection methodology for the proposed steam supply to General Motor's(GM) Lansing Automotive Division Plant#6 Powerhouse. A combination of two models were used in analyzing the LAD project and estimating the savings the facility will experience if GM decides to purchase steam from the BWL rather than obtain steam from other sources. Following discussion, the Commissioners endorsed the concept of the rate projection methodology and authorized staff to proceed negotiations with GM using the assumptions discussed. The Board is to receive update reports on the progress of the negotiations. 2. Customer Attitude Survey Results. Communications Director John Strickler presented an executive summary_ of the customer attitude survey conducted in December 1994. The survey indicated that: • Overall favorabilitv has reached 85%, the BWL's highest rating yet. • Overall satisfaction remains very high--92%for the water utility and 90%for the electric utility. • Satisfaction with service restoration has declined. • Perceptions of reasonable electric rates and value of electricity for the price have both slid significantly, despite the fact that the BWL has not had an electric rate increase in the last year. The steepest drop on this measure has been among Lansing electric-only customers. This would include apartment dwellers, trailer park residents and condominium owners. • Satisfaction with telephone handling has dropped significantly, perhaps reflecting fallout from the BWL's recent downsizing efforts. 3. Task Force on Electric Competition. Treasurer/Controller Dana Tousley reported that the Electric Competition Task Force was formed for the purpose of developing strategies to meet and beat the competition in the electric utility industry. The focus was on the BWL's large industrial customers. The goal was an overall strategy that addressed competitive rates and rate structures, contract arrangements with major customers, and strategically position the Electric Utility for an expected future of competition and change. The Electric Competition Task Force identified the following issues requiring management and Board attention to meet competition in the future: Competitive Costs • Continue to control and lower cost • Review cost allocation of common expenses due to recent reorganization • Reduce fixed costs where possible. continue efforts to reduce fuel costs • Review employee benefits 13WL- 3oard Meeting Minutes Page 27 March 28, 199� • Improve the flexibility of the work force to improve productivity • Standardize materials and buv on commodity basis where possible Competitive Capital Expenditures • Assign responsibility for common capital to Director of Technical Services • Limit capital expenditures of each utility to capital funds generated by that utility Competitive Operating Policies • Review Current Steam Heat and 2500 kW Turbine agreements to assure the best win-win position for both utilities, mindful of the competitive position of both utilities • Maintain reliability at present level Competitive Customer Relations. • Target programs to customers at risk and having a big impact on revenue • Survev commercial and industrial customers to determine possible program areas of service • Expand existing program of individual contact with commercial and industrial customers Competitive Rates and Rate Structures • Conduct an electric rate study immediately • Adopt new. different, flexible rate structures to remain competitive • Continue 1986 decision to"move towards equity" among customer classes • Earn income to net a 5-7%rate of return to generate cash for capital expenditures Competitive Contracts with Major Customers • Begin discussions about long term contract with General Motors • Goal to retain and satisfy needs of base load customers and protect BWL owners 4. Western Coal Burn Update: Fuel Supply&Results Supervisor Ron Ishimoto and Wendv Bradley. Senior Lab Technician of Fuel Supply. presented the results of the Western Coal Test Burn project. The purpose of the project was to ascertain whether burning a blend of Western coal and Eastern coal could be utilized at the BWL to reduce overall delivered costs. The test burn was conducted on Unit#4 at Eckert Station for a duration of 6-1/2 weeks(8/22/94 - 10/5/9.1). The blend ratio was based on Eastern Coal (80%)and low sulfur Western coal (20%). Staff reported that the results of the test burn at Eckert using a blend of Western and Eastern coal has concluded that the BWL could reduce fuel costs using such a mixture, if current Western coal prices were lowered by$2.68 a ton. Following discussion, there was Board consensus for staff to work to negotiate with Western coal producers and Western railroads to achieve the lowest delivered coal cost possible; investigate other Western U. S. compliance coal options; and start planning for testing Eastern/Western coal blends at Erickson Station later this year. 5. EEO Update. Personnel Manager Linda Gardner reported on the latest equal employment opportunity(EEO) statistics and the BWL's future succession plans. With the recent work force reduction and eventual replacement process.Human Resources has determined to not let a mass change in the work force affect the BWL's commitment to affirmative action. In reviewing the statistics, it was noted that overall the BWL compares favorably with the Tri- County availability numbers in maintaining a well represented work force. Page 23 S Al-Board Meeting Minutes March 28, 1995 This meeting was held for informational purposes. No action was taken. Respectfully submitted, Gerald W. Williams, Chair Pro Tern Committee of the Whole BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER SEBOLT That the Committee of the Whole report be received as presented and placed on file. Adopted unanimously. GENERAL MANAGER'S RECOMMENDATIONS HUMAN RESOURCES Res. No. 95-3-1 That Jeremy Adcock. an Apprentice Lineworker, Kenneth Dudley II, an Overhead Supervisor, and Charles Murphy, a Lineworker, for Overhead Line Construction, be awarded a total of$60.64, each to receive$20.21,for suggestion proposal number 1994- 202, to purchase 8 inch dielectric shovels instead of cutting down larger shovels. -------------------- By implementing this proposal, it is estimated that the BWL will realize a net savings of $242.56 in the first year. BY COMMISSIONER SEBOLT -- SECONDED BY COMMISSIONER STROLLE That Resolution 95-3-1 be approved. Adopted unanimously. ELECTRIC PRODUCTION/ TECHNICAL SERVICES Res. No. 95-3-2 It is recommended that Project No. 92-102 "Ottawa Station Site Cleanup'be renamed "Ottawa Station Site Development." BAT-Board Meeting Minutes Page 29 March 28, 1995 It is further recommended that the project estimate be increased by two million dollars ($2.000.000). Original Estimated Cost: $3.181.000 Revised Estimated Cost: $5.181.000 -------------------- The original scope of work was for the cleanup of soil contamination in the coal pile area and the west yard of the plant. The revised scope of work will include, in addition to site cleanup,the removal of the surplus equipment and other pre-development activities. See attached memo dated March 21. 1995 Res. No. 95-3-3 It is recommended that all the equipment not needed by the Electric and Steam Utility at Ottawa Station be declared surplus and not required for Board of Water and Light operations. It is further recommended that the property records be adjusted in accordance with the regularly accepted accounting procedure. -------------------- With the retirement of the Ottawa Station, and the removal/salvage of surplus equipment, the station's structure will be released for development. The equipment and piping associated with the 2500kW Turbine Generator will remain in place and optional. The present net book value of electric and steam equipment is approximately $2.400.000. Most of the value belongs to the Steam Cycle because of the modifications and changes that were undertaken within the last three(3)to four(4)years. -------------------- Res. No. 95-3-4 It is recommended that the estimated cost of Project No. 95-102,"Lightning Protection for Erickson Station",be increased in the amount of$125,000. Original Estimated Cost: $160.000 Revised Completion Cost: $285,000 Page-30 B L-Board Meeting Minutes March 28, 1995 The increase in cost is due to under estimating the equipment and installation cost of this unique system of lightning protection. See attached memo dated March 21. 1995. -------------------- Res. No. 95-3-5 It is recommended that FY 94/95 Planned Capital Projects be increased in the amount of S 185.000 to cover the cost of "The Site Drainage Project at Erickson Station". -------------------- The original scope was to improve coal pile drainage to alleviate freezing of the coal. The cost was considered routine maintenance and charged to Erickson Station Operation &Maintenance (O&M)Budget. As the project progressed it was determined that major site work and earth work were required to provide a permanent solution to the coal pile freezing and enhance drainage of the entire site. The expanded scope of work eliminated a possible future need for a very expensive project to provide an impermeable base for the coal pile. The project was completed on September 20, 1994 and presented to the Board of Commissioners at the Committee of the Whole on October 11. 1994. The reason for this resolution is to transfer the cost of the project from Erickson Station O&M Budget to the Capital Budget allowing it to be depreciated as an asset. See attached memo dated March 21, 1995. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER WILLIAMS That Resolutions 95-3-2 through 95-3-5. respectively,be approved. Adopted unanimously. TECHNICAL SERVICES Res. No. 95-3-6 It is recommended that: 1. A contract for Continuing Professional Services be awarded to Entex Information Services of Bloomfield Hills. MI. Term of contract is for two(2) years. f3WL- Hoard Meeting Minutes Page 31 March 28. 1995 2. A contract for continuing Professional Services be awarded to Entre Computer Services of Lansing,MI. Term of contract is for two(2)years. 3. A contract for Continuing Professional Services be awarded to BDM Technologies. Inc. of Dearborn.MI. Term of contract is for two(2)years. Estimated cost of services to be provided is$50,000 per year. Other Bidders were IBM and Unisys. -------------------- Information Systems Department lost an experienced ISD Engineer in our recent rightsizing effort. The decision was made to contract for outside services in lieu of hiring a replacement for this position. The main reason for this is that contracted services can provide. on demand, a significantly broader range of technical expertise than any one individual could possess. The main areas of expertise required is in the PC LAN and Telecommunications area. Expected services include network design,and hardware/software installation,configuration and trouble shooting. The consultants will be utilized on an as-needed basis. They will be asked to submit quotes and project personnel for the larger projects and award will be given to the best evaluated project team and quote. Small projects will be awarded by telephone request considering consultant availability, price and personnel. The utilization of these consultants will be approved by the General Manager, Technical Services Director and Manager of Information Systems Department, based on delegated purchasing authority. -------------------- BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS That Resolution 95-3-6 be approved. Adopted unanimously. TREASURER/CONTROLLER Res. No. 95-3-7 Authorize the sale of obsolete Board-owned vehicles and equipment through competitive bids. The items are BWL units#50, #53.#65, #714. #559, and#759. -------------------- An itemized list is on file with the Corporate Secretary. -------------------- Page 32 BWL-Board Meeting Minutes March 28, ?995 BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-3-7 be approved. Adopted unanimously. WATER Res. No. 95-3-8 That the Board agree to serve water to proposed Water District No. 104,Delhi Township, as requested by resolution of the Delhi Charter Township Board on September 20, 1994. and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15, 1972.covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 104 established by Township resolution on 9/20/94, and will provide a potable water supply to said district. 2. The Township will be required to make a$42,868.75 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CIV)covering the furnishing of a potable water supply in Water District No. 104. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the sum of$42,868.75 from the Township,the project be approved for installation, and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CIV) to furnish a potable water supply in Water District No. 104. The geographical area of Water District No. 104 is as follows: College Heights Estates Subdivision No. 4, Lots 63 through 86. To provide a potable water supply within the proposed new district requires the installation of 1.805 feet of water main and fire hydrants at an estimated cost of $42,868.75. The main extension will serve twenty-four(24) residential customers. One-time connection fees will amount to$17,160. Estimated annual revenue is$8.160. BWL-Board Meeting Minutes Page 33 March 28, 1995 Water mains to be installed in Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. ------------------- Res. No. 95-3-9 That the Board agree to serve water to proposed Water District No. 111,Delhi Township, as requested by resolution of the Delhi Charter Township Board of February 21. 1995.and that in accordance with the agreement between the Board and the Charter Township of Delhi Township dated August 15, 1972, covering the furnishing of a potable water supply in Delhi Township,the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 111 established by Township resolution on 2/21/95 and will provide a potable water supply to said district. 2. The Township will be required to make a$21,256.25 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CM)covering the furnishing of a potable water supply in Water District No. 111. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further. that upon receipt of the sum of$21,256.25 from the Township,the project be approved for installation, and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement C)G)to furnish a potable water supply in Water District No. 111. The geographical area of Water District No. 111 is as follows: Ivywood Subdivision, Phase 4, Lots 78-91. To provide a potable water supply within the proposed new district requires the installation of 895 feet of water main and fire hydrants at an estimated cost of $21.256.25. The main extension will serve fourteen(14) residential customers. One-time connection fees will amount to$10,010. Estimated annual revenue is$4.760. Water mains to be installed in Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. ------------------- Pape 34 BVIL-Board Meeting Minutes - March 28, 1995 Res. No. 95-3-10 That the Board agree to serve water to proposed Water District No. 112, Delhi Township, as requested by resolution of the Delhi Charter Township Board of February 21. 1995. and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 112 established by Township resolution on 2/21/95 and will provide a potable water supply to said district. 2. The Township will be required to make a$85,123.95 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CXII)covering the furnishing of a potable water supply in Water District No. 112. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further, that upon receipt of the sum of$85,123.95 from the Township, the project be approved for installation, and the General Manager and the Corporate Secretary be authorized to sign the aforementioned agreement(Supplement CXII) to furnish a potable water supply in Water District No. 112. ------------------- The geographical area of Water District No. 112 is as follows: Centennial Farms Subdivision,Phase I,Lots 1 through 22. To provide a potable water supply within the proposed new district requires the installation of 3,365 feet of water main and fire hydrants at an estimated cost of $85.123.95. The main extension will serve twenty-two(22)residential customers. One-time connection fees will amount to$15,730. Estimated annual revenue is$7,480. Water mains to be installed in Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. ------------------- BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER CHRISTIAN That Resolutions 95-3-8, 95-3-9, and 95-3-10, respectively,be adopted. Adopted unanimously. BWL-Board Meeting Minutes Page 35 March 28, 1995 CONSIDERATION OF LATE ITEM RE: SALE OF BOARD OF WATER AND LIGHT BUILDING General Manager Pandy submitted a late item for Board consideration. He handed out a proposed resolution recommending the sale of the Board of Water and Light(BWL)main office building. Mr. Pandy reported that the BWL received on this date(March 28,1995)a Purchase Agreement from Capitol Annex Limited Liability Company for the purchase of the BWL main office building situated on 123 West Ottawa Street. The proposed sale also includes the BWL's 36-space parking lot at 221 North Capitol Avenue. The purchaser has provided the BWL the sum of$10,000 as Earnest Money for this transaction. Mr. Pandy said the price for the sale has not yet been determined, but the BWL should fully cover its cost of moving including acquisition of new property and remodeling costs. Mr. Pandy cited several advantages for the sale. He stated that the sale of the office building would place a prime piece of downtown real estate in the City's tax rolls which would generate property tax income. It would also allow the BWL to relocate customer service operations to a location with more convenient parking and access. This move would also consolidate staff operations and better coordinate internal communications and activities. Possible relocation sites were displayed from an area map, including BWL property near the corner of Pennsylvania Avenue and Hazel Street The timetable contemplated,if this transaction is approved, is to move the offices by the end of 1995 or a later date if remodeling takes longer. The Commissioners engaged in lengthy discussion with respect to the merits of approving the resolution prior to discussing the proposed sale with the City Council. Mr.Pandy reviewed the contingency clauses contained in the Purchase Agreement. He pointed out that by approving the proposed resolution, the Purchase Agreement documents would be filed with the Lansing City Clerk to request a public hearing on the sale and approval by the City Council. The filing would start at least a thirty day clock before a public hearing can be held. This period would give the City and the public ample time for input on the proposed sale. PUBLIC COMMENT ON THE LATE AGENDA ITEM Harold Leeman of 529 North Francis Street. Lansing,stated that due to the lateness of this item, he was not given an opportunity to review the documents for comment at the meeting. He stated that when items are placed on a fast track,it raises questions. Following discussion,the Commissioners included a contingency in the proposed resolution submitted by General Manager Pandy to authorize the signing of the Purchase Agreement subject to the conditions outlined in the following resolution: BY COMMISSIONER O'LEARY-- SECONDED BY COMMISSIONER LONTZ ADMINISTRATIVE Res. No. 95-3-11 RESOLVED: That the Board of Water and Light real property located at 123 W. Ottawa Street. office building and land, and associated parking lot located at 221 N. Capital Avenue, are not needed to continue the operation of the Board of Water and Light; and, Page 36 BWL-Board Meeting Minutes March2o, i995 That the Board of Water and Light Commissioners find that the functions of customer service, accounting, engineering, information systems and administration can be more efficiently provided in other locations within the City of Lansing; and, That the Board of Water and Light Commissioners hereby conditionally authorizes the General Manager to sign a Purchase Agreement with Capitol Annex Limited Liability Company. This authorization is contingent upon the satisfaction of the following conditions: 1. Negotiation of an acceptable sale price between the General Manager and Capitol Annex Limited Liability Company, and 2. Approval of the sale price by the Board of Commissioners. Now,Therefore,subject to the above conditions, the Board of Water and Light Commissioners authorizes the filing of the Purchase Agreement with the City Clerk. City Council. Mayor and City officials for their consideration following filing and public hearing. STATEMENT OF NECESSITY OF THE PROPERTY FOR PUBLIC PURPOSES The Board of Water and Light(BWL) Commissioners have reviewed the utility function performed at the BWL office located at 123 W. Ottawa Street and associated parking lot at 221 N. Capital Avenue. These functions include customer service, accounting, engineering, information systems, and administration. The BWL Commissioners find that these functions can be performed more efficiently at facilities in proximity to the BWL's Pennsylvania Avenue/Hazel Street complex. Therefore, the BWL Commissioners find that the real properties at 123 W. Ottawa Street and 221 N. Capital Avenue are no longer necessary for the provision of BWL utility services. Therefore, these properties are declared surplus and the General Manager is authorized to sell or exchange them for other property, pursuant to the applicable provisions of the Lansing City Charter. ------------------- Adopted unanimously. (Commissioner Evans was absent) GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: Ottawa Station Development Update. Mr. Pandy reported on his trip to New York March 16-17. 1995. to attend the Urban Land Institute seminar on"Developing Urban Entertainment Destination Projects." He learned that the festival marketplace is becoming a popular venture focusing on providing entertainment experiences, including retail and dining. He noted that retail businesses located on the first through the fourth floors have a greater chance of success as compared to higher elevations. usually Page 37 BWl,-Board Meetine Minutes March 29, 1995 te to the success reserved for office and reside ntial developments. Pandvhe rreported that Requeategic factors that st tfor uQualifications for urban entertainment centers were discussed. Mr. Ottawa Street Power Plant Development marled ave been May 15Ss1995ued tand due by Ju vo local and o elopers. Project l. 1995 Request for proposals are scheduled to Cogeneration Energy Services. BWL and MPPA management have met with officials from Southern ey have Electric International and Indeck Energy dv advisedlthat tpower sales from such facilities o discuss cogeneration projects are expected to developed in the United States. Mr. third party utilities in the future. He reported that Geneentral Motor's cogeneration facility to be build at GM'Energy ll of Services. executed a 20-year Energy Services ill Saginaw complex. Indeck will develop,construct, own and oper ate t facility, B'WL and wMPPAIa are a GM•s electrical and thermal energy requirement at the Sagi P exploring partnership opportunities with both Southern Electric International and Indeck Energy Services. l Pro osal to General Motors. Mr. Dandy reported that a BWL,steam supply proposal has Steam Supp y P (LCA) into been submitted to General Motors integrating their on as presented resen ed based on LCA operating their Plant No. grid. A BWL/LCA steam conversion compari in steam to Plant No. 6. GM is reviewing the BWL's 6 Powerhouse as compared to the BWL supplying 150�ay letter of intent before a final decision is proposal with the United Autoworkers Union, and has a made. lity Security. Mr. Pandy reported that a Dr. Rupert Charles Bell has made several contacts Water Qua ater should be by hone and letter with BWL Water Distribution e d as an International Red Cross Triage Officer. P BWL treated. Dr. Bell represent himself as an"M.D." and authenticity of his credentials. security is pursuing this matter and is investigating Ground Breaking Ceremony for Delta and Lansing Townships. Mr.Pandy Water Interconnect to start construction to connect the BWL water system to ceremony stated that a formal ground breaking water from the Delta Township and Lansing Township's West contractater s to buy wholesale&inking vstem is scheduled for Fri March d 1995. The two township systems recently approved BWL. Both townships will continue to read Conditioned water from rs and bill their rthe Betail cWL will be served ol through master maintain their own distribution systems. hip. The Lansing Township connection will be meters into the distribution systems of each towns nnecuon late fall. completed by late summer and the Delta Township Mayor David Hollister to serve on Capital Area Health Alliance Board. Mr.TheCARA Boa that he y has stepped down from the Board of the Capital Area Health Alliance(CAHA)'recently elected Mayor David Hollister to fill the unexpired term. WL. Mr' Da Junior Achievement of Mid-Michigan Recognizes Bndy reported that BWL employees raised$6, 125 over a six-year period for Junior Achievement of Mid-Michigan. The following employees were congratulated for providing leadership as volunteers: Ron Ishimoto, Jim Robie, Steve Simpson.and Randy Roost. g how to City Debates Combined Sanitary and Storm Sewer System. The City of Lansing is debating reported fund the separation of its over$1 billion combined sanitary and orking Storm with the City to ensurethat that the Lansing Regional Chamber of Commerce receive fair and equitable treatment at the least cost Lansing's commercial and industrial property possible. Federal law mandates that combined sewer systems must be separated. An es for stadium lighting during night games. Baseball Stadium Utilities Costs. The Bcontinues to work with the City on stadium matters• mated estimate has been provided to the City of resent rates.the estimated assuming a seventy game season. Based on preliminary load information and p Page 38 BWL-Board"fleeting Minute Marcn 28, 1995 electric cost for seventy game days would be$33.014 or an average of$472 per game. The BWL is attempting to develop a special rate for stadium utilities, similar to what was done for the street lighting rate. Proposed City Energy Board Resolutions. The City of Lansing's Energy Advisory Board is considering three draft resolutions regarding: (1) industrial ecology services in the Greater Lansing area. (2)the incorporation of opportunities for energy and water efficiency and renewable energy technologies in all City of Lansing procurement, and(3)conducting preliminary research to determine whether the City of Lansing should support establishment of a long-range community energy plan. The BWL will be providing staff comments on the proposed resolutions. Competition in the Utility Industry. Mr. Pandy reported that BWL executive staff met for rivo days in March to discuss the impact of competition on BWL operations. He told the Board that the electric power industry will be changing in significant ways. Simply stated, pure economics will dictate decision making in the competitive markets of the future. Graphics were displayed depicting the continuing evolution of competition. The Old Power Industry: Traditional generation, transmission, distribution and end- users and resellers. The Present Power Industry: Similar to the old power industry, but includes independent power producers (IPPs), and non-utility generators(NUGs), and exempt wholesale generators(EWGs). The Future Power Structure: Emerging network of sophisticated power brokers driven by economic incentives alone and will seize opportunities wherever they exist. As a result of the two-day meeting, two task forces were formed by the General Manager. One will identifv the competitive threats and risks facing our water, steam and electric utilities. A second task force will look at our costs. The conclusions of both task forces will be analyzed and used to develop strategies for the BWL to survive in a competitive environment. Mr. Pandy stressed that management- union and non-bargaining emplovees must work as a team to meet the challenges the BWL will be facing over the next decade. To communicate the impact of competition on the BWL. Mr. Pandy will be meeting with all employees on March 29-30 to brief them on the state of the utility industry and how we must respond. REMARKS BY COMMISSIONERS Commissioner Hassler commented on the February 1995 financial statement. He noted that with the exception of the Steam Utility, gross revenues are up for the Electric and Water utilities. He encouraged the continuation of cost control measures for the organization. EXCUSED ABSENCES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That the absence of Commissioner Evans be excused. Adopted unanimously. Page 39 BVJL-Board rAeeting Minutes March 29. 1,995 ADJOURNMENT on motion of Commissioner Lonm the Board adjourned at 6:29 P.M. Mary E.tova5 , Secretary Filed: April 7, 1995 Marilynn Slade. City Clerk Page 11 MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT ul I i CLEM', Tuesday,February 28, 1995 The Board of Commissioners met in regular session at 5:30 p.m.. in the Main Office Building, 123 West Ottawa Street. Lansing,Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian. Evans, Hassler. Lontz. O'Leary. Sebolt, Strolle. and Williams-8 Absent: None The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER CHRISTIAN That minutes of regular session of January 24, 1995. be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS AND PETITIONS A letter was received from John A. Legler. Engineering Officer, Arkwright Mutual Insurance Company. complimenting the BWL for the fine work being done relative to installing needed fire protection improvements for the turbine generators, boilers, coal handling systems, relav rooms and other miscellaneous areas of Erickson and Eckert Stations. Recognized in Mr. Legler's letter were: Risk Manager Jcrnr Blanchard, Electric Production Director Jack Hill, Project Engineering Supervisor Dan Flvnn, and Bill Beak--now retired and former Manager of Erickson Station. Placed on file. Pace 12 BWL-Board Meetine Minutes February 28, 1995 GENERAL MANAGER'S RECOMMENDATIONS ADMINISTRATIVE Res. No. 95-2-1 That Resolution No. 82-2. as amended. entitled"BWL Authority to become a Member of the Michigan Public Power Agency(MPPA)and to participate with the MPPA Members in the Belle River project", is hereby revised by amending item"5" as follows: 5. That Joseph D. P it a eeoqtr-ae� .,i,,. ,roce nrr,r_ WILLIAM J. COOK. JR.. DIRECTOR OF ELECTRIC SYSTEM CONTROL, is hereby appointed to be the Lansing Board of Water and Light's representative on the MPPA's Board of Commissioners, and that Joseph Pandy. Jr., is hereby appointed to be its alternate representative. -------------------- This supersedes Board action by Resolution 82-2, 84-5. and 9.4-6-7. -------------------- BY COMMISSIONER WILLIAMS SECONDED BY COMMISSIONER SEBOLT That Resolution 95-2-1 be approved. Adopted unanimously. ELECTRIC SYSTEM CONTROUTECHNICAL SERVICES Res. No. 95-2-2 It is recommended that: 1. A contract for Continuing Professional Services be awarded to Novak Engineering. Inc.. of Jackson. MI. Term of contract is for two (2)years. 2. A contract for Continuing Professional Services be awarded to SFT. Inc.. of Toledo, Ohio. Term of contract is for two(2)years. 3. A contract for Continuing Professional Services be awarded to Stanley Consultants. Inc.. of Muscatine. Iowa. Term of contract is for two(2) years. 4. A contract for Continuing Professional Services be awarded to Stone& Webster Michigan, Inc.. of Boston, MA. Term of contract is for two(2) years. HWL- 13oara Meetine Minutes Paee 13 I'ebmary 28. 1995 Estimated cost of services to be provided is$200,000 per year. Other bidders were Commonwealth Associates. Greiner. Inc.. Lutz. Daily_ &Brain. Power System Engineering. Inc.. Sargent&Lundy. and Wolf Wineman. -------------------- Because of extensive studies required to maintain and/or improve reliable electric. water and steam service. and to expand the BWL service area, the engineering staffs of the Electric Planning and System Studies and Project Engineering Departments cannot fulfill this work load and its routine functions in a timely manner. Rather than adding employees to meet these needs, we have opted to supplement staff with outside assistance. The four consultants will be utilized on an as-needed basis. Thev will be asked to submit quotes and project personnel for the larger projects. and award will be given to the best evaluated project team and quote. Small one day type projects will be awarded by telephone request considering consultant availability, price and personnel. The utilization of these consultants will be approved by the General Manager or the Purchasing authority delegated by him to the Electric Svstem Control Division Director. Technical Services Division Director, Manager of Electric Planning and System Studies. and Manager of Project Engineering. This approach of retaining four consultants for two years will: a. Reduce evaluation time spent by staff. b. Improve consultant response time to meet our needs. c. Maintain competitiveness. -------------------- ELECTRIC SYSTEM CONTROL Res. No. 95-2-3 That a two year contract for commercial and industrial energy audit services be awarded to Grumman/Butkus Associates and to Novak Engineering, Inc.. for a cost not to exceed $50,000 for the fiscal year ending June 30. 1995. These energy audits will target medium to large commercial and industrial customers. Each request for energy audit will be evaluated on an individual customer need basis. The B WL cost per custom audit performed is typically 75%of total invoiced cost customer. The recipient customer's cost is typically 25%of total invoiced cost of the audit performed. The services under these contracts will be on an as-needed as-performed basis with no guaranteed minimums. Future fiscal year expenditures will be on a budget approved basis. -------------------- This recommendation is in accordance with the 1990 five vear marketing plan and falls within the approved FY 94/95 Customer Projects and Marketing Department budget. Other bidders were W.E.B.C.O.. Enertech Engineering Co.. Inc.. and ANCO Engineers, Inc. A report detailing proposal evaluation is on record with the Secretary of the Board. -------------------- 11aee 14 BWL-Board Meetine Minutes February 28. 1995 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER CHRISTIAN That Resolutions 95-2-2 and 95-2-3 be approved. Adopted unanimously. PENSION Res. No. 95-2-4 That Gerald R. DeWitt,Jr.. Operator A at Eckert Station,be placed on a disability pension of$1,417.31 per month effective February 1. 1995. He has selected Option I with the provision that after his death. said amount of pension shall continue to his wife. Jovice E. DeWitt. if she survives him. -------------------- Mr. DeWitt has worked for the BWL for 25.89 years and is 48 years of age. -------------------- BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-2-4 be approved. Adopted unanimously. STEAM UTILITY Res. No. 95-2-5 That Project No. 99-993 Hanger Replacement Moores Park Station Main Steam Header, be approved for addition to the Steam Utility's FY 1994/95 Planned Capital Project Budget. Total project cost is estimated to be$95,000. -------------------- Need for project was not anticipated at time of budget preparation. Spring hangers on Moores Park's loop header have been found to have failed. Design of replacement hangers has been finalized. With Board approval, contract will be awarded May 1. 1995. Project scheduled for completion July 31, 1995. Addition of this project is not anticipated to result in Steam Utility_ exceeding total approved FY 1994/95 Capital Project Budget. -------------------- 13Wi,-Board Meetine Minutes Page 15 I ebniary 28, 1995 BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER SEBOLT That Resolution 95-2-5 be approved. Adoptcd unanimously. TREASURER/CONTROLLER Res. No. 95-2-6 Authorize the sale of obsolete Board-owned vehicles and equipment through competitive bids. The items are BWL units#26, #86. =91. #539, #616, #702. #726 and 4858. An itemized list is on file with the Corporate Secretary. BY COMMISSIONER STROLLE-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-2-0 be approved. Adopted unanimously. WATER Res. No. 95-2-7 That the Board agree to serve water to proposed Water District No. 107. Delhi Township, as requested by resolution of the Delhi Charter Township Board of February 7. 1995. and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15. 1972. covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 107 established by Township resolution on February 7, 1995. and will provide a potable water supply to said district. 2. The Township will be required to make a$40,608 non-refundable contribution-in-aid of construction to cover the Townships share of the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. The Board will fund$31.833 of the cost of the district and receive all frontage fees collected until such time as the BWL has been reimbursed for the equivalent of 1350 feet at the then current charge. Paee 16 BWL-13oard Meeting Minutes February 28. 1995 3. The Board and the Township are to enter into a written agreement (Supplement CVII) covering the furnishing of a potable water supply in Water District No. 107. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. 5. The Township agrees to provide the Board with two well sites meeting all requirements necessary to permit the sites as future public water supply well locations. Further, that upon receipt of the sum of$40.608 from the Township, the project be approved for installation. and the General Manager and the Secretary be authorized to sign the aforementioned agreement(Supplement CVII)to furnish a potable water supply in Water District No. 107. The geographical area of Water District No. 107 is as follows: Beginning approximately 580 feet west of Wigman Road then easterly_ 2.700 feet along East Holt Road in Delhi Township. To provide a potable water supply within the proposed new district requires the installation of 2.700 feet of water main and fire hydrants at an estimated cost of $40.608. The main extension v6ll serve eight(8) residential and three (3)business customers. One-time connection fees will amount to$9.366. Estimated annual revenue is$3,920. Water mains to be installed in the Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. -------------------- Res. No. 95-2-8 That the Board agree to serve water to proposed Water District No. 108. Delhi Township, as requested by resolution of the Delhi Charter Township Board of February 7, 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15. 1972. covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: I. The Board will accept Water District No. 108 established by Township resolution on February 7. 1995, and will provide a potable water supply to said district. 2. The Township will be required to make a$45,611 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CVIII)covering the furnishing of a potable water supply in Water District No. 108. 13WL-Board Meeting Minutes Page 17 February 28. 1995 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further_ that upon receipt of the sum of$45.611 from the Township, the project be approved for installation, and the General Manager and the Secretary_ be authorized to sign the aforementioned agreement(Supplement CVIII)to furnish a potable water supply in Water District No. 108. The geographical area of Water District No. 108 is as follows: Beginning at northeast corner of E. Holt Road and College Road thence westward 1.700 feet to Water District No. 107. To provide a potable water supply within the proposed new district requires the installation of 1.700 feet of water main and fire hydrants at an estimated cost of $45.611. The main extension will serve four(4) residential customers. One-time connection fees will amount to$2.860. Estimated annual revenue is$1.360. Water mains to be installed in Summer of 1995 or at a time mutually agreeable between Charter Township of Delhi and Board of Water and Light within three years provided the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement in 1995. -------------------- Res. No. 95-2-9 That the Board agree to serve water to proposed Water District No. 109. Delhi Township, as requested by resolution of the Delhi Charter Township Board of February 7. 1995. and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15. 1972. covering the furnishing of a potable water supply in Delhi Township, the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 109 established by Township resolution on February 7, 1995,and will provide a potable water supply to said district. 2. The Township will be required to make a$79,742 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. The Board will fund$62,487 to cover that portion of the project cost associated with providing water service to an area outside of the Township boundaries. 3. The Board and the Township are to enter into a written agreement (Supplement CIX) covering the furnishing of a potable water supply in Water District No. 109. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Page 18 BWL-Board Meeting Minutes February 28, 1995 Further_ that upon receipt of the sum of$79,742 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement(Supplement CI.X) to furnish a potable water supply in Water District No. 109. The geographical area of Water District No. 109 is as follows: Beginning at northeast corner of College Road and Willoughby Road thence south along College Road 5.300 feet to northeast corner of College Road and Holt Road. To provide a potable water supply within the proposed new district requires the installation of 5.300 feet of water main and fire hv_drants at an estimated cost of $79.742. The main extension will serve twenty-five (25) residential customers. One-time connection fees will amount to$17.875. Estimated annual revenue is$8,500. Water mains to be installed in Summer of 1995 or at a time mutually agreeable between Charter Township of Delhi and Board of Water and Light within three years provided the receipt of the Townships non-refundable contribution-in-aid of construction and the signing of the agreement in 1995. -------------------- Res. No. 95-2-10 That the Board agree to serve water to proposed Water District No. 110.Delhi Township, as requested by resolution of the Delhi Charter Township Board of February 7. 1995, and that in accordance with the agreement between the Board and the Charter Township of Delhi dated August 15. 1972. covering the furnishing of a potable water supply in Delhi Township,the Board advises officials of Delhi Township as follows: 1. The Board will accept Water District No. 110 established by Township resolution on February 7. 1995. and will provide a potable water supply to said district. 2. The Township will be required to make a$70.697.05 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Policies and Procedures for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement CX)covering the furnishing of a potable water supply in Water District No. 110. 4. Water mains are to be installed in accordance with the current Board's Policies and Procedures for Water Service. Further. that upon receipt of the sum of$70.697.05 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement(Supplement CX)to furnish a potable water supply in Water District No. 110. 13WL-Board Meeting Minutes Page 19 F ebruary 28. 1995 The geographical area of Water District No. 110 is as follows: Beginning at northeast corner of S. Washington Avenue and Holt Road thence Nvest along Holt Road 1.375 feet to Kahres Road thence south along Kahres Road 1.260 feet. To provide a potable water supply within the proposed new district requires the installation of 2,635 feet of water main and fire hv_drants at an estimated cost of $70.697.05. The main extension will serve four(4) residential customers. One-time connection fees will amount to$2.860. Estimated annual revenue is$1,360. Water mains to be installed in Summer of 1995 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. ------------------- BY COMMISSIONER SEBOLT SECONDED BY COMMISSIONER STROLLE That Resolution 95-2-7 through 95-2-10. respectively, be approved. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following items: lec Storm Causes Power Surge. The ice storm that occurred over the weekend resulted in water flooding the roof of the Eckert Station, causing the drains to clog with ice and water trickling down the building into a line reactor in the plant's switchgear. This caused the reactor to fail on Monday. February 27 tripping half of the Eckert bus. creating a momentary surge on interruption in most of the downtown supply while the load was switched to the other half of the bus. Units 1 and 3 were off line most of the day until approximately 10:30 p.m. Capital Area United Wav(CAUW). The BWL was recognized by the Capital Area United Way at the annual awards dinner by receiving the Silver Award for participation. Mr. Pandy thanked BWL employees for their participation and congratulated Harry Doesburg representing the International Brotherhood of Electrical Workers(IBEW),and 011ie Kingsbury, representing management,for their efforts in leading the BWL to another successful year. Mr. Pandy also congratulated Dr. Eva Evans who is the CAUW General Campaign Chair for 1995. and noted that Human Resources Director Mark Vander Jagt is the BWL's representative. Commissioner Evans thanked Bill Jones, System Production Supervisor-Information Systems Department. for serving as CAUW's division chair for Business Group C. Share the Success . Share the Success has gained another 12 points for a total of 364 points through the month of Januarv. A written report with an analysis of the scoring was handed out for review. Page 20 BWL-Board Meeting Minutes February 28. 1995 OSHA Standards for Electrical Worker ClothinE. The Occupational Safetv and Health Administration (OSHA) is implementing standards for electric utility worker clothing. By June 1995. OSHA will mandate certain apes of protective clothing that will be considered safe for the electrical environment. Proposed Groesbeck Storm Water Iniection Plan. Mr. Pandy reported in previous communications to the Board that the BWL has serious concerns about the Groesbeck(Municipal Golf Course) storm water injection plan as proposed by the Ingham County Drain Commission. A copy of a letter written by the Department of Natural Resources(DNR) to Drain Commissioner Patrick Lindemann. dated February 22. 1995. was handed out for reference. The DNR outlines in their letter the several agreements made with Mr. Lindemann during their meeting of February 8, 1995, to address concerns regarding potential environmental consequences that would impact the quality of the drinking water aquifer. The BWL has proposed alternatives for the Drain Commissioners consideration that would avoid potential problems. Mr. Pandv noted that in the Drain Commissioners presentation to the City's Committee of the Whole meeting on February 23. 1995. Mr. Lindemann held back on the proposed Groesbeck storm water drain infiltration system. and only presented the Tollgate Drain project which is east of the Groesbeck project. Mr. Lindemann is continuing to gather more data about the type of runoff water being proposed to put into the Groesbeck project. Mr. Pandy reported that Drain Commissioner Lindemann has indicated that if the injection of typical storm water runoff into the ground will degrade the quality of the groundwater. he will not proceed with the project. BWL staff is continuing to monitor this project. Following discussion, the Board agreed to send a letter expressing their opposition to the proposed Groesbeck Storm Water Injection Plan in the interest of BWL customers and owners. Suring Adopt A River Cleanup. The nest Adopt A River event is scheduled for May 20. 1995. A flier with pertinent information was handed out. Motor Wheel Plant. A copy of a letter from J. C. Overbeck, Chief Executive Officer of Motor Wheel Corporation. dated February 24, 1995, was handed out. In his letter, Mr. Overbeck expresses appreciation to BWL staff for efforts in assisting the Motor Wheel plant manager and comptroller in analyzing the impact various rate discounts would have to the Lansing plant. Mr. Pandy reported that Motor Wheel's closing decision is narrowed down to the Lansing plant and a plant in Illinois. An announcement is expected very shortly. Motor Wheel is the BWL's seventh largest customer based on revenue from electric, water and steam sales. Some of the factors cited that would keep Motor Wheel in Lansing include union concessions.continuation of the City's tax abatement. plus other inducements and productivity gains. Motor Wheel Corporation has indicated that their Kentucky plant will continue to operate. City of Alma Studies Utilitv Service Municipalization. The City of Alma is continuing to pursue municipalization.driven mostly by Total Petroleum Company. Thirty companies submitted proposals to supply approximately 60 MW of electric service--10 MW for their refinery operating at a 90 percent load factor. and 20 MW for the city's customers. The BWL, through the Michigan Public Power Agency (MPPA), is one of two finalists for providing wholesale power. Officials from Alma are scheduled to tour BWL facilities on March 9. Mr. Pandy noted that Consumers Power has assigned a special team to develop a strategy to retain the City of Alma as a customer and to avoid municipalization. MPPA Quotes on Power Sales to MECS. The Michigan Electric Coordinated Systems (MECS)pool-- which is the combined Consumers Power and Detroit Edison pool--has asked for 1.000 MW for the whole summer with an option on another 1.000 MW. To put that into perspective. Mr. Pandy noted that MECS is trying to purchase approximately three times as much power as the BWL's total system for the summer months. MPPA has quoted on 75 MW, and the BWL would stand to get approximately 83 percent of that business if the sale is awarded to MPPA. This transaction would bring in approximately$100,000/month to the BWL during June. July and August. BWI,-Board Meeting Minutes Page 21 Febmary 28. 1995 Proposed MPPA Coordination Agreement with Ontario Hydro, The Michigan Public Power Agency (MPPA) is preparing a draft coordination agreement with Ontario Hydro for consideration by the MPPA Board at its next meeting. With the transmission system opening up. MPPA is structuring to do more business with Canada. MPSC Involving the City of Marshall. Mr. Pandy updated the Commissioners on the status of the Michigan Public Service Commission(MPSC)jurisdiction case involving the City of Marshall. This is the case in which a MPSC staff member has recommended that Consumers Power Companv(CPCo)be allowed to take a large customer from a municipal utility. MPSC staff recommends that CPCo be granted a Certificate of public convenience and necessity, unless Marshall agrees to voluntarily comply with the requirements of MPSC Rule 411 for customers located outside the municipal corporate boundaries. Rule 411 is a"closer to" rule as to which utility may serve the load. Mr. Pandv reported that essentially MPSC is trying to force the City of Marshall into voluntarily coming under MPSC regulation. Members of the Michigan Municipal Electric Association(MMEA)are opposed to agreeing to MPSC Rule 411 jurisdiction because it would create a precedent for municipal utilities being subject to broader MPSC jurisdiction in the future. MMEA is concerned that municipal utilities will face significant delays and constraints imposed by the MPSC's procedures for resolving Rule 411 disputes. Michigan South Central Power Agency's Future Power Supply. Mr. Pandv reported on another dynamic to the electric competition process. He referred to the Michigan South Central Power Agency's (MSCPA) Bond Prospectus of December, 1994. which summarizes that MSCPA's present power supply planning contemplates the addition of approximately 25 MW of electric capacity by 1997. Based on such evaluation. it was determined that the proposal from the Michigan Public Power Agency (MPPA)was the best alternative to meeting future power requirements. The 14-year agreement with MPPA will commence in 1997 through the year 2010. The counterpart to that is that separate agreements are being formalized with each of the Member Municipalities. Mr. Pandy noted that right in the face of this proposed transaction. CPCo has approached the City of Hillsdale--which like the City of Marshall has lost a large customer to CPCo--to attempt to negotiate a wholesale bulk power purchase agreement. The question now is whether the City of Hillsdale will opt for wholesale power from CPCo to retain their retail customers. Mr. Pandy said that clearly competition is stepping up; CPCo is using various tactics to capture future electric loads. Speculative Power Plant Planned by Kimball Power Company. Mr. Pandv briefed the Board on a project being developed by Kimball Power Company in association with Southern Engineering International--a large holding company for the Southeast part of the United States. He reported that Southern Engineering International has decided to venture all over the world in the energy business. They are planning to build a speculative plant in the midwest region of the U.S. since there has been no new generating plant construction recently in this region. Southern Engineering has a captive customer in Upjohn(Kalamazoo)with approximately 80 MW. They are planning to build approximately 160 MW of gas-fired combined-cycle produced electricity and sell the steam to the Upjohn host. Michigan Public Power Agency(MPPA)and BWL officials will be meeting with Southern Engineering International on March 2. 1995, to discuss the feasibility of purchasing excess power and energy from that project. Rail Transportation Contract- Refund for Coal Volume. A copy of a letter written by Brian McLeod, Fuels Supply and Results Manager, to CSX Transportation and CN North America, dated February 28, 1995. was handed out for reference. Mr. Pandy reported that the BWL's volume contract provides a discount based on tonnage amounts. The BWL has received a sufficient coal volume to justify a refund of $65.748.83. Chamber's METROLINK Recognizes Larry Wilhite. Staff Attorney Larry Wilhite was congratulated for being recognized in the Lansing Regional Chamber of Commerce's METROLINK for his leadership role in the Chambers Volunteer Orientation program. Page 22 BWL-Board Meeting Minutes Pebruary 28. 1995 Ottawa Street Power Plant Development Proiect Update. General Manager Pandy updated the Board on the project for the commercial development of the retired Ottawa Power Plant The BWL is not planning to sell the Ottawa Plant. but intends to lease it to prospective developers. Mr. Pandy reported that Pace Creative has prepared a notebook format to be sent to prospective developers, which includes a site map, facts about the project. and statement of intent to develop the plant. Technical Services Director John Elashkar(Project Leader) has been working with Mr. Pandy on developing the necessary documents and project schedule, which calls for a 1999 completion date. Key dates for the Ottawa Power Plant development are as follows: Specification Issue Date Due Date Request For Qualifications (RFQ) RFQ Developers 3/03/95 3/24/95 RFQ Local Partners —Request for Proposals (RFP's) 5/15/95 7/01/95 —Equipment Salvage&Removal 3/17/95 6/15/95 Mr. Pandy reported that preliminary figures on the total cost to vacate the building and have the"shell" ready for commercial development will be available for review with the Board in June, 1995. The Commissioners suggested that consideration be given to designating a full-time project manager to manage the development project. General Manager Pandy stated that questions related to development issues have been raised that could best be answered by someone with development expertise. He indicated that he may be coming to the Board in March with a recommendation to retain a real estate advisor to assist staff in structuring development deals that would benefit and protect the BWL and its customers. The Commissioners expressed concern relative to risks involved with a commercial development of this type. The Commissioners agreed that careful review of the equipment salvage and removal bids will be very important to determine the economics of the project development. The timing of the proposals for development is also crucial to determine whether to proceed with equipment salvage and removal. Mr. Pandy told the Board that he is planning to attend a seminar in New York sponsored by the Urban Land Institute. called"Developing Urban Entertainment Destination Projects" to network and learn more about development projects of this type. Mr. Pandv noted that interested developers have indicated to him that there is a 75/25 probability of the Ottawa Station being a success--three-fourth of these developments succeed and one-fourth of them fail. Technical Services Director Elashkar briefed the Commissioners on the economics of maintaining the Ottawa Street Power Plant. He said that data is being compiled to conduct an economic analysis on the economics of the development project. The analysis will include a comparison of present expenditures involved in maintaining the facility versus preparing the facility for commercial development. Some of the ongoing costs necessary to maintain the Ottawa plant include expenditures for environmental cleanup at the site, roof replacement. heating the building to prevent deterioration of asbestos and other structural maintenance. Following discussion. General Manager Pandy assured the Commissioners that the economic analysis will be thoroughly reviewed with the Board in June before requesting authorization to proceed with the equipment salvage and removal. Copies of draft RFQ's and RFD's on the Ottawa Station Development Project were handed out to the Commissioners for their information and reference. BWL-Board Meetine Minutes Page 23 February 28, 1995 Removal of Distribution Facilities From Ottawa Station. A memo to Technical Services D;rector John Elashkar from the Electric Utility_ dated January 30. 1995, was handed out for reference. The Electric Utility reports that the substation work that needs to be done by 1997 to accommodate the proposed Ottawa Power Plant project schedule has been accelerated. Mr. Pandy reported that the Electric Utility has found an engineering solution to enhance electrical supply to the downtown area from other substations without having to build a new downtown substation This solution eliminates the need to build a transmission line across Michigan Avenue. Riverside Sludee Pond Area/Radio Tower Site. A copy of a proposed letter being sent to the Liggett Broadcasting Group(owners of WJIM Radio)relative to their proposed tower in the Riverside Sludge Pond area was handed out for review. Mr. Pandy displayed a map showing the proposed location of the radio tower to be constructed by the Liggett Broadcasting Group. The proposed lease agreement provides for an annual lease payment of$2.000. BWL access to install and maintain a paging antenna on their radio tower, and a small space within their building for associated equipment. Following discussion, the Commissioners concurred with the letter. Enerey Act Replacement Vehicles. General Manager Pandy reported that Fleet Services is trying to buy Energy Act replacement vehicles.which have to be 1995 model year. He advised that Chevrolet Blazers were sold out in October, 1994.and S10 pick-ups are also sold out. Mr. Pandv stated that he has called evervone he knows at General Motors(GM)to try to get special consideration and was told that due to the heavy demand for light duty vehicles, the supply is not available at this time. The BWL is now considering half-ton GM pickups and Chevrolet Corsica passenger cars. Mr. Pandy stated that he is reluctant to place other than General Motors Corporation vehicles on the road with the BWL logo in Lansing. Michigan. Annual Meetine of the Greater Lansing Convention& Visitors Bureau. The Greater Lansing Convention&Visitors Bureau will be hosting their Annual Meeting on Monday, March 20, 1995, at the Michigan Historical Center. The spotlight will be on Greater Lansing as they premiere the Bureau's new -'Lansing Makes It Happen" video. The Commissioners were encouraged to attend. Ticket arrangements may be made through Mary Sova. REMARKS BY COMMISSIONERS Voice Messaeine Svstem. Commissioner Williams commented on the BWL's Voice Messaging System (VMS), being supplied by Octel Corporation. He stated that the BWL has chosen an excellent vendor. The State of Michigan has utilized Octel for the past eight years with over 10.000 customers using Octel's VMS. Commissioner Williams offered any assistance the State can provide to the BWL to assure a smooth transition. He stressed the importance for managers to push to assure the success of this new technology. He added that often people do not like to use new technology but once they become familiar with it, manv benefits will be realized. General Manager Pandy indicated that VMS training is in progress, and voice mailboxes will be operational by March 13, 1995. Transmission Line Sitine Bill. Commissioner Lentz inquired on the implications the revised version of the Transmission Siting Bill would have on the BWL if it is introduced. General Manager Pandy responded that the bill as drafted could impact municipal utilities. The BWL is involved through the Michigan Municipal Electric Association(MMEA)in seeking to be excluded. Paee 24 BWL-Board Meetine Minutes February 28. 1995 Fire Hydrant Complaint. Commissioner Strolle inquired about staff follow-up relative to Heidi Doherty's complaint to the City Council regarding the BWL's maintenance of fire hydrants. General Manager Pandy stated that hydrant log books are available that verify the hydrant in question has been maintained annually. He briefed the Board on her concerns and reported how the BWL takes its responsibility for the proper maintenance of all city hydrants very seriously. He also noted that staff has endeavored to respond to Ms. Doherty's concerns in a timely manner on several occasions. A copy of the letter and log book records which were sent to Mrs. Doherty was given to each Commissioner. ADJOURNMENT Prior to adjournment. General Manager Pandy indicated that after the Committee of the Whole meeting. lie would like the Board to convene in Executive Session to discuss a real estate matter. On motion of Commissioner Lontz. the Board adjourned at 6:30 p.m. A '4va, Mary EJSa, Secretary Filers: March 3, 1995 Marilvnn Slade. Citv Clerk MINUTES OF BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGIIT Tuesday,January 24, 1995 The Board of Commissioners met in regular session at 5:30 p.m.. in the Main Office Building. 123 West Ottawa Street. Lansing_ Michigan. The meeting was called to order by Chairman Hassler. Present: Commissioners Christian.Evans.Hassler. Lontz, Sebolt. Strolle. and Williams-7 Absent: Commissioner O'Leary(out of town) -1 The Secretary declared a quorum present. The Invocation was delivered by Chairman Hassler. The Pledge of Allegiance was said by all. APPROVAL OF MINUTES BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS That minutes of rescheduled session of December 20. 1994, be approved as filed. Adopted unanimously. PUBLIC COMMENTS CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT. No persons spoke. COMMUNICATIONS AND PETITIONS A letter was received from Patricia B. Kane requesting an adjustment to her BWL payment plan. A response letter from Terry D. Graham. Director. Consumer Services Division was ackno-,vledged. Received and placed on file. gee 2 Board Meeting Minutes anuary 24. 1995 GENERAL MANAGER'S RECOMMENDATIONS PENSION Res. No. 95-1-1 That Charles N. Cassidy be placed on a straight vested pension of$202.23 per month effective March 1, 1995. -------------------- Mr. Cassidv worked for the BWL from December. 1953 to September. 1972 for a total of 18.75 years. He will be 60 years of age at the time of his retirement. -------------------- BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS That Resolution 95-1-1 be approved. Adopted unanimously. WATER Res. No. 95-1-2 That Board of Water and Light charges for 6" and 8" watermain installations be changed to$20.50 per foot, effective January 1. 1995. This is a 3.96%increase over the current charges. That Board of Water and Light charges for fire hydrant installations be changed to $1.625.00 per hydrant, effective January 1. 1995. This is a 6.34%decrease over the current charges. That Board of Water and Light charges for water service installations be changed. effective January 1, 1995. as follows: Main-to-Curb-Box Curb-Box-To-Bldg. Size Current Fee Proposed 1995 Fee Current Fee Proposed 1995 Fee 3/4 $617 S680 $9.65 $10.75 1 S740 $815 10.20 $11.00 1 1/2 $987 $1.085 11.55 $12.18 2 $1.233 $1.355 12.10 $12.76 -------------------- !3oard Meetine Minutes 'n a_o e 3 January 24. 1995 WATER(Continued) (Res. No. 95-1-2) The watermain and hydrant installation charges are based on the three(3) previous years of BWL average costs for that type of work. trended to July 1. 1995. the middle of next vear's construction. The service installation fees are increased 10%. Cost calculations are attached for reference. -------------------- BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER CHRISTIAN That Resolution 95-1-2 be approved. Adopted unanimously. CORPORATE PLANNING Res. No. 95-1-3 Whereas. the Board of Water and Light(BWL)and the Citv of Lansing(City)are encouraged to cooperate on projects deemed to be beneficial and to utilize each other's services; and Whereas. Ordinance 208.06(C)provides that real property under the jurisdictional control of the BWL, which is no longer required for purposes of its operation, may be transferred to another City department upon written consent of the Board and acceptance by the Mayor: and Whereas. the Citv has agreed to transfer and/or permit use of an existing City parcel to the BWL. subject to acceptance by the BWL and for other valuable consideration: and Whereas. the transfer of a replacement parcel and other valuable consideration by the City is deemed a condition precedent to the BWL's declaration below that its parcel is unnecessary for BWL purposes; Now Therefore, be it resolved: That the parcel described below is no longer required for BWL purposes and that the BWL agrees to transfer to the City the following described property at 543 E. Ottawa Street which is the location of Well No. 25-11: The East eighteen(18)feet of the North eighteen(18)feet of the North one-third(1/3)of the West fourteen and one-half(14 1/2) rods of Lot 6. Block 244 Original Plat of City of Lansing as situated on Sec. 16. T LN, R2W all being in Ingham County, Michigan. In consideration of this transfer, the City has agreed to: 11ase 4 3uard Nlectine Minutes January 24. 1995 l) provide a replacement well site either by transfer of an existing parcel of City property to BWL or by agreement for joint use of a City_ owned property. The propem,shall be approved by the Michigan Public Health Department for a municipal hell site and requires an acce,.able environmental assessment, and 2) make payment to BWL in the amount of$170,000 as reimbursement for removal of equipment. demolition and capping of the well and for drilling and equipping the replacement well. -------------------- Well 25-11 is located within the proposed Baseball Stadium project area and needs to be removed prior to construction of the Baseball Field. scheduled to begin this spring. The property to be transferred to the City contains approximately 324 sq. ft. and was acquired in 1935 along with rights of access for installation and maintenance of a well and right to install and maintain a water main. Citv Parks and Recreation Parcel"B" located south of I-96 and cast of Richards Street is one site that is available as a replacement for Well 25-11. another site is Parcel "D" located on Pine Tree. which is to be developed as a soccer complex. could also be utilized for a well site. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLE That Resolution 95-1-3 be approved. General Manager Pandy handed out a copy of a letter, dated January 24. 1995. from Dennis J. Sykes, Director. Department of Planning and Neighborhood Development. City of Lansing,confirming the terms and conditions of the City's proposal to include a concurrent transfer of the 513 E. Ottawa Street parcel for parcel"B" or"D" and a payment of$170.000 over time, by the City to the BWL as reimbursement for the removal of equipment, demolition, and capping of the well and for drilling and equipping the replacement well. Mr. Pandv noted that due to the nature of this property transfer, the Mayor and the General Manager of the BWL--under the Citv_ 's Codified Ordinance 208.06(c)--are authorized to approve an even land swap. Adopted unanimously. GENERAL MANAGER'S REMARKS Ottawa.Station Development. Preliminary plans to convert the Ottawa Station into a downtown mall. commercial development and museum are moving forward. General Manager Pandy reported that an advisory committee on the commercial development of the Ottawa Station has been formed and held its first meeting on January 24. 1995. The Advisory Committee, consisting of representatives from the Mavor"s Office. Planning and Neighborhood Development, Economic Development. Chamber of Commerce, and other community organizations will provide input into this important economic development project. General Manager Pandy is serving as the Project Manager with Technical Services Director John Elashkar as the Team Leader. The five major functions of the project include: (1) Environmental. (2) Electric Facilities. (3) Equipment Salvage, (4) Demolition and Development, and (5) Steam Facilities. Request for Proposals (RFP) are being drafted for the sale and removal of equipment no longer in service and for commercial development. Mr. Pandy told the Commissioners that a draft Board Meetins Minutes Page 5 Jantiary 24_ 1995 RFP would be submitted to the Board for review and authorization prior to mailing in the second quarter of 1995. Mr. Pandv noted that significant national developers are interested in the project. Conceptual diagrams of the proposed multi-use development were displayed. A preliminary timeline targets the entire redevelopment project to be completed by September 1999. Commissioner Evans inquired who would own this development. General Manager Pandy responded that it is envisioned the BWL would retain ownership. but lease it to the primary developer for a period from 50 years up to 99 years. Commissioner Evans stated that it is her understanding this venture is not viewed as a subsidiary business for the BWL. General Manager Pandy responded that the BWL wants to recover all costs incurred during project development, but that no other real estate ventures are planned. He further clarified that the intent is to isolate BWL ratepayers from any development consequences. River Trail Extension Proiect. General Manager Pandy reported that the BWL has been working with the City in extending the river trail toward the Eckert/Moores Park Station complex. A map was displayed showing the layout of the proposed river trail routing along the northerly side of the Grand River up to the Joseph Wolfe Bridge and crossing the river at that point. going over to the south side and up to the Moores Park area. Comuarison of Sales and Revenues. General Manager Pandy reported that the comparison of sales and revenues report previously mailed for the 1993 and 1994 calendar years was erroneously based on 13 months of data instead of 12 months. A corrected report was presented and summarized as follows: Sales FYTD(6 mos.) CYTD(12 mos.) 1994 vs. 1993 1994 vs. 1993 Water - 1.87% - 1.67% Electric 6.77% 10.38% Steam -15.23% - 3.17% Revenues FYTD(6 mos.) CYTD(12 mos.) 1994 vs. 1993 1994 vs. 1993 Water 10.44% 9.27% Electric 12.82% 11.02% Steam -8.87% - 2.65% General Manager Pandy stated that the increase in water revenues was primarily due to the January 1, 1994 rate increase. He also indicated that the increase in electric sales was primarily due to the increase in resale sales. and the increase in electric revenues was due to the January 1, 1994 rate increase. Page t, 3oard MeetinE Minutes Januan 24. 1995 Mr. Pandv asked Electric Production Director Jack Hill to provide an update on current events at Belle River. Mr. Hill reported that the Belle River coal-fired plant lost a unit on the afternoon of January- 23. 1995. due to a tube leak causing the unit to remain down for two to three days. thus the BWL will receive 75 MW instead of 150 MW. The BWL has the option to either buy backup from Detroit Edison Company (DECo) or generate its own power. Since the latter is more economical. the BWL is using this opportunity to generate the additional 75 MW to cover our needs as well as supplying N PPA members. Belle River has scheduled another planned outage in February.which will give the BWL another opportunity for increased resale sales. With respect to the Steam Utilitv. Mr. Pandy reported that the decrease in steam sales and revenues is due to the decrease in commercial MLB sales. The decrease in steam revenues is also due to the reduction in General Motors contractual demand payment.which is based in prior year steam usage. Purchase of Snot Market Coal. General Manager Pandy reported that he has authorized the purchase of spot market coal for the first quarter of 1995. Five extra 7.000 ton trains will be ordered over a three- month period at approximately$41.00/ton delivered. including the rail charges. This means an additional S 1.4 million worth of coal will be purchased to supply the resale sales. Mr. Pandv noted that this activity v,ill be reflected in budget numbers(actual vs. budget)with increases in both revenues and expense. Update on Negotiations Concerning MECS and Transmission Access. A handout outlining negotiation details with Consumers Power Companv(CPCo) and Detroit Edison Company (DECo) concerning membership in Michigan Electric Coordinated Svstems(MECS)was distributed for reference. General Manager Pandy reported that on January 13. 1995, there was a breakthrough on issues submitted by a coalition of municipal and electric cooperative utilities(MPPA. Wolverine. MSCPA and the City of Wvandotte) that includes the BWL. Mr. Pandy stated that CPCo and DECo are offering coordinated transmission service through MECS at a single combined price. Such a service will be accomplished via a buy-sell arrangement. CPCo and DECo have agreed to split currently in-place transmission charges for transfers across all of MECS. Mr. Pandv noted that because progress has also been made on other issues and with the apparent flexibility on the part of CPCo and DECo, the coalition has refrained from filing with FERC. CPCo's Rate K Dismissed. As previously communicated to the Board. General Manager Pandv reported Consumers Power Companv's (CPCo)Rate K case has been dismissed by the Michigan Public Commission. According to a recent article in the Coxsu-n¢Rs' WEEKLY. CPCo plans to file a .;,ued rate case. which will be another discounted rate. Power Sales to Southeastern Michigan Rural Electric Cooperative. General Manager Pandv advised that meetings have been held with the Southeastern Michigan Rural Electric Cooperative relative to power sales. MPPA has been selling them five(5)MW through a multi-year agreement. Southeastern is now considering increasing their take by another megawatt and extending the time period of their agreement. Power Supply Proposal to the Citv of Alma. General Manager Pandy reported that the City of Alma has engaged consultants to studv the feasibility of forming a municipal utility. Through MPPA. the BWL is submitting a wholesale power supply proposal to Alma for 30 MW for ten vears. Mr. Pandv stated that if the move to establish a ,au„ becomes a reality. MPPA would have an opportunity to supply the municipal utility wholesale power. most 01 wiuci: uie BWL. Hoard Meeting Minutes !'gee 7 `amen•'.4, 1995 Communitv Resource Guide for Electric Vehicle Infrastructure. General Manager Pandy reported that a task force is going forward to develop a community resource guide for electric vehicle infrastructure. This is being sponsored by the Michigan Public Service Commission. General Motors. Detroit Edison Companv. the Hughes Aircraft Division of GM. and others. The purpose of the task force is to attempt to standardize the charging system so that electric vehicles can become a reality. The BWL will be staying abreast on that effort. Delta Township Approves Wholesale Water Service Agreement. General Manager Pandy reported that after six years of negotiations, agreement has been reached with the Delta Charter Township to provide wholesale water service to 6.000 township customers. He handed out a copy of a resolution unanimously adopted by the Board of Trustees of Delta Charter Township at its regular meeting on January 17. 1995. which reads as follows: Water Treatment The Delta Charter Township Board of Trustees approve the Wholesale water service agreement between the Lansing Board of Water and Light and Delta Charter Township subject to review by each part's attorneys. and Further. the agreement will be returned to the Board of Trustees for final examination after review by the attorneys prior to it being signed by the supervisor and clerk. Technical Support Manager, Sue McCormick.presented a brief overview of construction arrangements starting from the Dye Water Conditioning Plant. A map layout was displayed showing how the BWL and Delta water systems will interconnect. The entire system interconnection is to be completed by the end of the 1995 construction season at a cost of$4.9 million. The work is to be done by BWL crews. Water Utility Director Clyde Dugan presented an update to the original wholesale water proposal reviewed with the Commissioners in August, 1995. He handed out a copy of a memo submitted to the Delta Charter Township, dated January 24. 1995,updating the BWL's wholesale water proposal to Delta Township and to address concerns raised. Mr. Dugan highlighted the following significant aspects outlined in the memo: 1. The proposed wholesale water rate to be charged for conditioned water has been reduced by a net 7%. • The original proposed rate used FY 90/91 as the test year. • An annual inflationary adjustment of 3.9%was used to compute the original proposed rate. • The revised rate reflects our actual experience of 2.9%per year since the test year. • Reduction in workforce will further reduce the BWL's operating expenses. 2. Township options on capacity and service (a) Interconnect Costs • Eliminate raw water interconnect. This creates a direct savings to the Township of$1.669.000 plus whatever costs were anticipated for connecting additional wells. (b) Facility Charges • "Maximum Week, Average Day," instead of "Maximum Day" reduces the Facility Charge for either Option 1 A or Option 1 C by $95,000 to$2.320.000 and$2.909.000 respectively. Paee H 3oard Meetine Minutes January 24. 1995 • The proposed 30" interconnect will deliver at least 15.6 MGD. which would meet the Township's projected needs through the year 2057. • Projecting the combined requirements of the BWL and Delta Township for 50 years, no additional facilities are required beyond those already included in the Facilitv Charge schedules previously provided. In summary, these adjustments represent a benefit to the Township as follows: Wholesale rate reduction $67.500/vear Raw water interconnect >$1,669,000 Planning criterion $95,000 Capacity beyond 10 MGD $2.946.000 savings* * Not reflected in the Townships 10 MGD cost comparison Mr. Dugan displayed an exhibit showing a comparative analysis of the wholesale water contract for Delta Township and the wholesale agreement proposed to Lansing Township for their West Side Water System. Lansing Township should be making a final decision in March. 1995. The system interconnections for both townships are expected to be completed by the end of the construction season this vear. DeWitt Township Reviewing BWL Proposal for Water Service. General Manager Pandy reported that aft agreement has been submitted to DeWitt Charter Township for the BWL to provide either Aesale water service or retail water service. Further updates will be provided to the Board once the township has deliberated the interconnect possibility. Mavor Hollister's State of the Citv Address. General Manager Pandy stated that in Mayor Hollister's State of the City Address, he endorsed the BWL's efforts for a regional water authority and the Ottawa Station redevelopment project. Update on EnerZy Proposals to Sparrow Hospital. General Manager Pandy reported that Sparrow Hospital moved forward this week with a groundbreaking ceremony on their new parking facility. They will follow this summer with a new seven story medical office complex on the south side of Michigan Avenue. Mr. Pandy told the Commissioners that he had an opportunity to meet with Sparrow's CEO to ' ?he BWL's energy proposals to supply cogeneration. steam service, and/or electric service. :a►Area Health Alliance. General Manager Pandy previously communicated to the Board that Chairperson Hassler has been elected Secretary-Treasurer of the Capital Area Health Alliance. Mr. Pandy handed out a copy of an executive summary of"Purchasing Guidelines" compiled by the Business Advisory Board of the Capital Area Health Alliance. The intent of the guidelines is to assist businesses in their purchase of health care and to reduce the cost of health care in the community. Mr. Pandv noted that the Mayor also included a comment in his State of rile City Address that he intends to get the City involved in some type of coalition for the purchase of health care. Appreciation ter for Wood Chip Delivery. A copy of a thank you letter wri" PWL emnlovee ''­-nman. ,e Department, by Karen Dalton, Horizon Project Coordin _ .. School. was ' -it for rc­ie«v. Ms. Dalton expresses h•_r -preciation man for his help and support with L. - 'r- Ir•r'!1 through donated wood chips. 3oard Meetma Minutes nape y January 24. 1995 AWWA Issues New Safetv Talks. General Manager Pandv reported that the American Water Works Association (AWWA) has issued a series of 52 safety talks for utilities. Bob Cariano. Safety Administrator. was credited for his involvement and input in developing the guide to be used by 40.000 Avater systems in the United States. Contributions to Local Government. A new American Pubic Power Association(APPA)publication has been received entitled PAYMENT IN LIEU OF TAXES AND OTHER CONTRIBUTIONS TO LOCAL GOVERNMENT. The 1992 data compiled for public power systems in the East North Central regions. indicates the average net payments and contributions as percent of Electric Operating Revenue was 3.6%. General Manager Pandy reminded the Board that the BWL went to a 4.0%contribution in 1992. which is in step with the East North Central region. He noted that a total of 700 public power systems reported in this survey. Economic Development Activities Discussed with the Mavor. General Manager Pandy reported that Commissioners Lontz and Williams have met with Mayor Hollister to talk about economic development activities of the BWL. One-on-one meetings between the Commissioners and Councilmembers will continue to be facilitated to discuss issues of interest to both the City and the BWL. Telecommunications Assessment for Citv of Lansing. General Manager Pandy handed out a copy of a draft. interim report of the Lansing Metropolitan Regional Telecommunication Assessment(LanMet). prepared by graduate students of the MSU Department of Telecommunication. This interim study was submitted to the City of Lansing in May and June. 1994. In summary the study concludes that the Tri- County area should have a regional telecommunications network. The City Council's General Services Committee will be discussing the telecommunications ordinance on January 25. BWL staff will be there to present our views. BOARD BULLETS-A New BWL Publication. General Manager Pandy handed out a new informational sheet entitled. BOARD BULLETS for regular distribution to the City Council and the Mayor. The new publication will focus on positive feedback on BWL activities in response to negative comments sometimes heard during public commentary, such as Council meetings. Pension Adiustment Acknowledged. In appreciation for the pension adjustment approved by the Board on December 20. a thank you card was received from Mr. and Mrs. Robert Wise. A Recap of BWL 1994 Activities. General Manger Pandy referred to the January. 1995- issue of the BWL PIPELINE. which provides a recap of significant events affecting the BWL during 1994. REMARKS BY COMMISSIONERS MDNR Request for Rehearine Before FERC. Commissioner Lontz asked for background information on the status of the Michigan Department of Natural Resources' (MDNR) request for a rehearing at the Federal Energy Regulatory Commission(FERC) relative to the BWL not being required to engage in pre- retirement planning and funding for the Moores Park Dam and related hydro project. General Manager Pandy gave an overview of the rehearing issue. He reported that MDNR wants to have FERC call a hearing on the requirement for the BWL to reserve funds for the decommissioning of the Moores Park Dam. This has become a national issue--APPA has taken a position by filing for consideration by the FERC. a policy statement regarding the decommissioning of the existing hydro facilities. APPA remains convinced that FERC lacks the authority to order licensees to decommission existing projects. Such action was not contemplated in the Federal Power Act. Mr. Pandy stated that it appears this issue will be a struggle of state regulators vs. federal regulators. and the BWL may get involved in some form. Pape 10 Board Meettne Minutes January 24. 1995 Setting Economic Development Criteria. Commissioner Lontz shared his thoughts on economic development in relation to BWL properties. He stated that with an inventory on BAIL buildings and sites in place. the BWL could develop criteria for economic development. so that our sites make some sense in relationship to what the market is asking. This information could then be disseminated into the market through a realtor. Mr. Lontz noted that Detroit Edison Company uses this approach and the BWL has the same opportunity here. EXCUSED ABSENCES BY COMMISSIONER CHRISTIAN-- SECONDED BY COMMISSIONER WILLIAMS That the absence of Commissioner O'Leary(out of town)be excused. Adopted unanimously. ADJOURNMENT On motion of Commissioner Lontz. the Board adjourned at 6:30 p.m. 1�.` ✓E. c.e ecf t ry Filed: January 30, 1995 Marilynn Slade. City Clerk