HomeMy WebLinkAbout1997 Minutes BOWL BOARD OF WATER AND LIGHT
PUBLIC NOTICE
Schedule of Regular Meetings
of the
Board of Water and Light Commissioners
For the First Six Months of 1997
Regular meetings of the Board of Water and Light Commissioners of the City of Lansing,
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:
�1 U 1997
January 28
February 25
March 25
-April 22— 97 Y
May 1,4rt.e J-c.r�
June 24 :3 c 11.1
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.
WATEi8UGHT
PUBLIC NOTIC E
Schedule of Regular Meetings
of the
Board of Water and Light Commissioners
For the Last Six Months of 1997
Regular meetings of the Board of Water and Light Commissioners of the City of Lansing,
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:
1997
July2 Z-`l -Tuesday.A'ej� r _kGt d-
August 26 -Tuesday
September 23 6-Tuesday
October29M -Tuesday
Novcmbcr 25 -Tuesday
_ December 16 -Tuesday
In the event a special mee' g or rescheduled meeting is held,a notice of same will b�
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 E. Sova,Corporate Secretary
(517) 371-6033
Date of Posting: 6/25/97
In accordance with the American with DisabMes Act (ADA), please cal the
Corporate Secretarls Ot>ice at 371-8033 at least three business days prior to a
pubfic meeting to request special accommodations such as mobikty, visual,
hearing,or other assistance.
Page 105
rC I V E D
MINUTES OF BOARD OF COMMISSIONERS' MEETIl r 22
LANSING BOARD OF WATER AND LIGHT LAltji �!C CITY CLERK
Tuesday,December 16, 1997
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 the Chair,Ernest Christian.
Present: Commissioners Aquilina(arrived at 6:00 p.m), Christian, Creamer,Pratt,Royal,
and Werbelow.
Absent: Commissioners Graves and O'Leary.
The Secretary declared a quorum present.
The invocation was delivered by Chairman Christian.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Werbelow, seconded by Commissioner Royal,to approve the minutes
of regular session held November 25, 1997 and special session of December 11, 1997.
The carried unanimously.
PUBLIC COMMENTS
CHAIRMAN CHRISTIAN ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE
END OF THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications were received.
REPORTS OF COMMITTEES
There were no committee reports.
Board Minutes Page 106
December 16, 1997
GENERAL MANAGER'S RECOMMENDATIONS
=97-12-2
A. Board Meeting Schedule
RESOLVED.That pursuant to the provisions in Article II, Section 2.1 of the Board's Rules of
Administrative Procedure, the following dates for the regular meetings of the Board of Water and Light
Commissioners for the ensuing six(6)months be and is hereby set.
1998
January 27 -Tuesday
February 24 -Tuesday
March 24 -Tuesday
April 28 -Tuesdav
Mav 26 -Tuesday
June 23 -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.
RESOLVED FURTHER.That a notice of the meeting schedule be published in the Lansing State Journal
the week of January 4. 1998.
Motion was made by Commissioner Creamer, seconded by Commissioner Werbelow, to approve
Resolution 97-12-2.
Action. The motion was carried.
YEAS: Christian. Creamer,Pratt, Royal, Werbelow
NAYS: None
ABSENT: Aquilina, Graves. O'Leary
997-12-3
B. Automatic Call Distribution System
RESOLVED.That the Aspect Model 10011 Automatic Call Distribution System be purchased for
$214,426.00 from Aspect Telecommunications. This system will serve incoming and outgoing customer calling
needs for routine and emergency outage operations.
The award recommendation is based on a competitive bid evaluation developed by a cross-functional
team. Bid evaluation criteria included compatibility with the BWL Unisys Mainframe and Octel VMX 300 voice
mail system, technology that will grow with customer needs,and vendor's ability to customize and support a state
of the art phone system to serve BWL customers.
Other vendors considered with Cintech,Lucent Technologies, Northern Telcom c/o Ameritech, Siemens
Rolm and Telcom Communications.
Page 107 Board Minutes
December 16, 1997
Motion was made by Commissioner Werbelow, seconded by Commissioner Creamer,to adopt
Resolution 97-12-3.
Discussion. In response to questions raised by the Commissioners, General Manager Pandy gave an
overview on how the Automatic Call Distribution System will enhance customer service and improve employee
efficiency.
Customer enhancements include
1. Reduced wait time in queue(on-hold)and during emergency conditions.
2. Virtually no more busy signals. this new system will handle 100 incoming lines simultaneously, as
compared to 31 today.
3. Option to speak to bilingual Customer Service Representative(CSR).
4. Customers will be able to access their account information without engaging a CSR through
Interactive Voice Response(IVR).
BWL Employee efficiencies:
1. Staffing flexibility for flex-time and home based options. Home based work stations can be activated
during emergency conditions.
2. Allows larger volunteer pool to go on-line during emergencies.
3. Provides outbound calling for collections, satisfaction surveys and marketing(up-selling).
Action. Following discussion. the motion carried.
YEAS: Christian, Creamer, Pratt.Royal, Werbelow
NAYS: None
ABSENT: Aquilina. Graves, O'Leary
#97-12-4
C. Transportation Contract
RESOLVED.That the Board approve Amendment No. 1 to C-8514 Transportation Contract("Contract")
with Norfolk Southern Railroad(NS)and Canadian National Railway(CN), subject to approval as to form by the
BWL's Legal Counsel. The amendment particulars are as follows:
1. The terms of this Contract will be extended 12 months with an expiration date of December 31, 1998.
2. There shall be no minimum volume commitment.
3. The rates wi11 be the same as in the current Contract.
4. The rates will be held firm and free from escalation for the entire amendment period.
Motion was made by Commissioner Royal, seconded by Commissioner Werbelow, to approve
Resolution 97-124.
Discussion. Mr. Pandy reported that by amending this Contract with NS and CN,the BWL will be able to
maintain its broad base of potential spot coal suppliers. This Contract serves as a backup to CSX and Grand Trunk
and will ensure that spot coal competition is maximized and purchased at the lowest delivered cost possible:
Board Minutes Page 108
December 16, 1997
Action. Following discussion, the motion carried.
YEAS: Christian. Creamer, Pratt, Royal. Werbelow
NAYS: None
ABSENT: Aquilina. Graves, O'Leary
UNFINISHED BUSINESS
Electric Industry Restructuring
General Manager Pandy reported that electric industry restructuring principles were reviewed and
discussed by the Board at the February 12, 1996 Committee of the Whole meeting. The Commissioners concurred
with the principles, but the Board's position was never formalized. He noted that at the Board Retreat held
December 11, 1997, Commissioner Aquilina pointed to the importance of having an official Board position on
record regarding this issue. In this respect.Mr. Pandy handed out a draft resolution of fundamental electric
industry restructuring principles for review and consideration.
Following discussion, it was the consensus of the Board to hold action on the resolution until the regular
meeting in January. This will give the Commissioners who are not present the opportunity to review it and provide
feedback prior to consideration.
In response to an inquiry by Chairman Christian, General Manager Pandy and Electric System Control
Director Bill Cook reported on California's experience with electric deregulation. Mr. Pandy noted that there are a
total of 300 companies registered to sell power in California,and consumers are viewing that as very confusing and
overwhelming. The State of California has spent$57 million to try to educate citizens on how they can make
choices. He also noted that according to news articles,the savings in electric prices in California are not expected
to be as great as anticipated.
NEW BUSINESS
Pension Conversion Values
General Manager Pandy reported that the Board has engaged a second actuarial firm to review the
calculations provided to employees who are deciding whether to convert to the new Defined Contribution Pension
Plan. The firm, William Mercer, was chosen by an Implementation Advisory Committee that interviewed four
companies. Actuaries from the company will double check the lump sum conversion amounts supplied to all
participants of the existing Defined Benefit Plan. Those conversion amounts will be the beginning account
balances for employees who decide to switch to the new Defined Contribution Pension Plan. Over the past month,
errors were found in the way those calculations were made by Gabriel,Roeder, Smith&Co., the actuarial firm that
has handled the account for the Defined Benefit Plan. Mr. Pandy elaborated on the three problems that occurred:
(1)the erroneous use of gender-based actuarial tables, (2)a rounding problem which affected the examples used for
the annual annuities,and(3) the algebraic formula used under one of the methods to determine conversation
amounts erroneously underestimated the Defined Contribution conversion amounts for over 400 employees.
Page 109 Board Minutes
December 16, 1997
Water System Expansions
General Manager Pandy reported on the progress of negotiations taking place with Bath Township and
DeWitt Township regarding the extension of retail water service to this area. [The Board was first briefed on the
background of this issue at their December 11. 1997 Planning Retreat.] A memo from Water Utility Director
Clyde Dugan.dated December 16. 1997, regarding follow up on these expansions was handed out. There is
tentative agreement between the BWL and DeWitt Township officials on the contribution-in-aid requirement of
$642.153. Mr. Pandy noted that there is a possibility of a referendum from a citizen's petition against zoning for
the manufactured housing portion of the development in DeWitt. If that materializes, then the question could be
on the next general election ballot. In the meantime, the Township is willing to extend the BWL water service
area to the north. The revised Service Area will probably include all areas of the Township east of I-127,in
addition to the areas currently being served by the BWL. A request by resolution from the DeWitt Township Board
for an extension of water service along State Road and an amendment to the Water Service Area is to be sent to our
Board at some future date for consideration.
Mr. Pandy reported that the Bath Township Board unanimously voted to negotiate an agreement for retail
water service with the BWL. The Township is also interested in turning over their existing system to the BWL
when appropriate and to have the BWL assume operating responsibility at the earliest convenience. Mr. Pandy
noted that staff is working with Bath Township officials to have the agreements finalized for [BWL] Board
consideration at the regular meeting in January.
General Manager Pandy congratulated Water Utility Director Clyde Dugan and Water Technical Support
Manager Sue McCormick for their work on this project.
GENERAL MANAGER'S REMARKS
Financial Statements
The Board received a copy of the(1) Consolidated Financial Statements for water, electric, steam,and
general properties,dated November 1997 and(2)Planned and Bonded Capital Projects Status Report as of
November 30. 1997. General Manager Pandy noted that normally these reports are sent to the Board in advance of
the regular meeting,but because the meeting date was moved up due to the holidays there was not enough time to
send them out.
General Manager Pandy acknowledged the Board's suggestion made at the December 11. 1997 Planning
Retreat relative to producing financial reports that are in a more understandable format. He noted that it will take
a couple of months to restructure the reports to show a comparison to a benchmark.
Technology for Meters and Traffic Signals
General Manager Pandy reported that Electric Transmission and Distribution is piloting the reading of
meters via phone lines. Also newv technology is being tested using video cameras on traffic lights to activate traffic
signals for turn lanes, turn arrows.etc. From preliminary research, these two projects appear to be economically
feasible.
Cooperative Development Fund
In response to the Board's suggestion from the November 25, 1997 regular meeting,Mr.Pandy reported
that he talked to the City about using some of the Cooperative Development Fund monies toward the BWL's
purchase of the rail strip property at Haco Drive/Pennsylvania Avenue Complex from Grand Trunk Western
Railroad [Resolution 97-11-41. Both Mayor Hollister and Dennis Sykes,Director of Planning&Neighborhood
Development, have agreed to this. A resolution will be submitted to the Council in January for action. Mr. Pandy
noted that from a total of $88.868 in the Cooperative Development Fund,$48,000 has been spent for collaborative
projects with the City, leaving a balance of$40,868 to apply toward the$42,780.50 purchase price.
Board Minutes Page 110
December 16, 1997
[Commissioner Aquiline arrived at 6:00 p.m.)
Steam Line Update
General Manager Pandy reported that the BWL's steam line to serve General Motors' (GM)Body Plant,
Fabrication Plant and Craft Centre is working very well. The new steam service is currently supplying steam at a
rate of about 100.000 pounds per hour while all components of the new steam supply system are checked out. GM
will supplement that with steam from their own boilers until everyone is satisfied the system is operating correctly.
Ultimately, more than I million MLB's of steam per year will be delivered to GM through the new steam line.
Project cleanup work. involving landscaping and sidewalks,is also being completed.
Ottawa Station Development Project
General Manager Pandy reported that with the January 1 deadline approaching for Thomas J. Coates to
report his findings on the Sonv market research, he attempted to contact Mr. Coates but was unsuccessful in
reaching him. Mr. Pandy indicated that he and Commissioner Christian will continue to follow-up with Mr.
Coates and will report back to the Board in January.
REMARKS BY COMMISSIONERS
Commissioner Werbelow remarked that he clipped the following articles on deregulation from the WALL
STREET JOURNAL: "Montana Power to Sell Assets in Generating,"December 10. 1997. and"The Outlook-
Pick a Power Supplier? Many Aren't Interested,"December 15. 1997. Copies are on file with the Corporate
Secretary.
Commissioner Pratt inquired if a response has been received from customer James Strouse as a result of
the Board's letter relative to the October 27. 1997 ice storm and associated damage to his trees.
Bill Cook. Director of Electric System Control. responded that staff is working closely with Mr. Strouse to
resolve his concerns to his satisfaction.
Commissioner Aquilina stated that her lateness in arriving for the Board meeting was due to a court
matter she is representing_
PUBLIC COMMENTS
CHAIRMAN CHRISTIAN ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
BWL employee. Robert(Bob)Murphy,Parts Controller in Electric Production Maintenance,addressed
the Board regarding a v.arehouse inventory project("project")in which he has been involved. He remarked that he
and several employees in Electric Production Maintenance feel that the combining of inventories of Production
Maintenance and the Stores Department may not be in the best interest of the BWL.
Page 111 Board Minutes
December 16, 1997
General Manager Pandy responded that Mr. Murphy's approach of bypassing management and going
directly to the Board is an inappropriate forum. Mr. Pandy added that to his knowledge Mr. Murphy has not
brought this matter to the Directors who are responsible for that area. Mr. Pandy indicated that since this is a
matter that needs to be addressed by management, he would investigate Mr. Murphy's concerns and report back to
the Board.
EXCUSED ABSENCES
On motion by Commissioner Creamer, seconded by Commissioner Royal, the absences of Commissioners
Graves and O'Leary were excused.
Adopted unanimously.
ADJOURNMENT
On motion by Commissioner Werbelow, the Board adjourned at 6:17 p.m.
Mary E. S a, Secretary
Filed: December 22, 1997
Marilvnn Slade, City Clerk
_ - � �.�.� ��. ���. iv- uv ..v v. v... L. u Liv .LL ..v- .�i i J i uLUJ ll'YJJLU 1-PIl7L• G/J
Page 103
(REVISED)
MINUTES OF BOARD OF COMMISSIONERS'SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Thursday,December 11,1997
The Board of Commissioners met in special session at 5:05 p.m.,at the Holiday Inn South
Convention Center,Ballroom B, 6820 S. Cedar Street,Lansing,Michigan. The meeting was called to
order by the Chair,Ernest Christian.
Present: Commissioners Rosemarie Aquilina,Ernest Christian,Charles Creamer,
Joseph Graves,Jr.,David O'Leary,Peter Pratt,Diane Royal and Judson Werbelow.
Absent: None
Others Present: General Manager Joseph Pandy, Staff Attorney Larry Wilhite,Communications Director
John Strickler, Corporate Secretary Mary Sova,Developer Joel Ferguson of Capitol
Outlook,L.L. C.,and Attorney Patrick Reid of Reid&Reid.
A quorum of the Board was present.
Chairperson Christian called the meeting to order at 5:05 p.m.
The purpose of the special meeting was to consider an Option to Purchase Agreement for the sale
of the Board of Water and Light main office building at 123 W.Ottawa Street and 221 N. Capitol Avenue
parking lot to Capitol Outlook,L. L. C.
Upon review and discussion on the terms of the Option to Purchase Agreement submitted to the
Board of Commissioners at the meeting, the following resolution was offered:
Motion On motion of Commissioner Werbelow, seconded by Commissioner Graves,
that the following resolution be approved:
97-12-1
Option to Purchase Agreement with Capitol Outlook,L.L.C.
RESOLVED,That the Board of Water and Light enter into an Option to Purchase Agreement
with Capitol Outlook,L.L.C. in the form submitted to the Board of Commissioners for the sale of Board of
Water and Light property located at 123 W. Ottawa Street and 221 N. Capitol Avenue,with the changes
in Section(6)as discussed.
RESOLVED FURTHER,That the General Manager and Corporate Secretary be authorized to
execute the Option to Purchase Agreement on behalf of the Board.
Discussion
General Manager Pandy noted that a$50,000.00 payment for the option has been received.
Following discussion,the motion was carried.
YEAS: Aquilina, Christian, Creamer, Graves,O'Leary,Pratt,Royal,Werbelow
NAYS: None
ABSENT: None
11.! CJ1 LLL. - -1 1"- WI-IILI IX Ltl'] ILA- IlV• lJlf J Jf 1-OGYJ.7 -Wl477C0 rF'11:L• .3/.�
Page 104 Speci, card Meeting Minutes
December 11, 1997
ADJOURNMENT
On motion by Commissioner WerbeloW.seconded by Commissioner Pratt,the Board adjourned
at 5:25 p.m.
Isl Mary Sova, Secretary
Filed: December 12, 1997
Afarilynn Slade, City Clerk
BOARD OF WATER AND LIGHT VO Box 13007, Lansing,MI 48901
[I 11'ill 111Z I I
WATERb'cL m FAX Date: Friday,Dec 12, 199:3:
o ' E' Number pf pages including
covcr shcct:
To: City Clerk Marilynn Slade From: Mary Sava
Mayor's Office
Phone: Pbonc:
Fax: 483-6066 Fax phone: (517)371-6203
CC:
REMARKS: ❑ Urgent ❑ For your review ❑ Reply ASAP ❑ Please comment
Please discard the Board Meeting minutes
filed with your office today 12/12/97
and replace with this "Revised"copy_
Thank you.
Page 103
MINUTES OF BOARD OF COMMISSIONERS' SPECIAL MEETING:";
LANSING BOARD OF WATER AND LIGHT ,,,
Thursday,December 11, 1997
The Board of Commissioners met in special session at 5:05 p.m.,at the Holiday Inn South
Convention Center.Ballroom B. 6820 S. Cedar Street,Lansing,Michigan. The meeting was called to
order by the Chair, Ernest Christian.
Present: Commissioners Rosemarie Aquilina,Ernest Christian, Charles Creamer,
L},, Joseph Graves, Jr.,David O'Leary,Peter Pratt,Diane Royal and Judson Werbelow.
AUJei-t: None
Others Present: General Manager Joseph Pandy, Staff Attorney Larry Wilhite, Communications Director
John Strickler. Corporate Secretary Mary Sova,Developer Joel Ferguson of Capitol
Outlook,L. L. C.,and Attorney Patrick Reid of Reid&Reid.
A quorum of the Board was present.
Chairperson Christian called the meeting to order at 5:05 p.m.
The purpose of the special meeting was to consider an Option to Purchase Agreement for the sale
of the Board of Water and Light main office building at 123 W. Ottawa Street and 221 N. Capitol Avenue
parking lot to Capitol Outlook.L. L. C.
Upon review and discussion on the terms of the Option to Purchase Agreement, the following
resolution was offered:
Motion On motion of Commissioner Werbelow, seconded by Commissioner Graves,
that the following resolution be approved:
97-1?-1
Option to Purchase Agreement with Capitol Outlook,L.L.C.
RESOLVED. That the Board of Water and Light enter into an Option to Purchase Agreement
with Capitol Outlook, L.L.C. for the sale of Board of Water and Light property located at 123 W. Ottawa
Street and 221 N. Capitol Avenue with the changes discussed.
RESOLVED FURTHER,That the General Manager and Corporate Secretary be authorized to
execute the Option to Purchase Agreement on behalf of the Board.
Discussion
General Manager Pandy noted that a nonrefundable deposit of$50,000 has been received,which
provides Capitol Outlook,L.L.C. an exclusive option to purchase the property.
Following discussion,the motion was carried.
YEAS: Aquilina, Christian, Creamer, Graves,O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
Paee 104 Special Board Meeting Minutes
December 11, 1997
ADJOURNMENT
On motion by Commissioner Werbelow. seconded by Commissioner Pratt, the Board adjourned
at 5:25 p.m.
Mary Sova, retary
Filed: December 12. 1997
,llarilmn Slade, Citv Clerk
WATER&LIGHT
N O T I C E
SPECIAL BOARD MELTING
December IL 1997 - 5:00 p.m.
Holiday Inn South Convcntion Ccntcr (Ballroom B)
A Special Meeting of the Board of Water and Light Commissioners of the City of Lansing,
Michigan, is scheduled for Thursday, December 11, 1997 at 5:00 p.m.. The meeting will be held
at the Holiday Inn South Convention Center (Ballroom B), 6820 S. Cedar Street, Lansing,
Michigan.
Purpose: To consider the sale of the 123 W. Ottawa Street Office Building and
221 N. Capitol Avenue Parking Lot.
Certified by:
Mary E. Sova
Corporate Secretary
Post: 12/10/97
In accordance with the American with Disabilities Act(ADA),please call the Corporate
Secretary's Office at 371-6033 at least 24 hours prior to a public meeting to request
special accommodations such as mobility, visual, hearing, or other assistance.
Distribution:
Commissioners City Clerk
J.Pandy City Council Office
Executive Staff Mayor's Office
Security
Main Lobby Bulletin Board
Page 92
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,November 25,1997
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 the Vice Chair,Diane Royal.
Present: Commissioners Aquilina, Graves, O'Leary, Pratt, Royal,and Werbelow.
Absent: Commissioners Christian(out of town)and Creamer(out of town).
The Secretary declared a quorum present.
The invocation was delivered by Vice Chair Royal.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion: On motion of Commissioner Werbelow, and seconded by Commissioner O'Leary, the minutes of
special session of October 14, 1997 and regular meeting of October 27, 1997 were unanimously
approved.
PUBLIC COMMENTS
VICE CHAIR ROYAL ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE
END OF THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
A thank you letter to Commissioners and staff from former Commissioner John Strolle was received.
Placed on file.
A letter from Jack Down regarding a billing matter was received.
General Manager Pandy stated that staff has been in contact with Mr. Downs to resolve his concern.
Page 93 Board Minutes
November 25, 1997
REPORTS OF COMMITTEES
97-11-1
Committee of the Whole Report
The Committee of the Whole met on November It, 1997, at 5:30 p.m.,to receive staff reports on the
follo«ing matters:
1. Ottawa Station
2. Electric Deregulation
3. Minority Contracting
4. Steam Pipeline to General Motors' Plant#6
5. Ice Storm of October 27. 1997
6. Other matters that may come before the Committee of the Whole
Present were Commissioners Rosemarie Aquilina,Ernest Christian, Charles Creamer, Joseph Graves, Jr.,
Diane Royal, Dave O'Leary, Peter Pratt, Judson Werbelow.
Main Office Building Sale Update. Developer Gary Granger of Capitol Annex, L.L.C. presented an
update on the status of negotiations with the State of Michigan for space to relocate offices for the House of
Representatives. Mr. Granger displayed schematic drawings of a proposed renovated facade of the Board of Water
and Light(BWL) office building at 123 W. Ottawa Street. Requests for proposals were opened by the State on
October 28, 1997. The Board is awaiting confirmation that the developer has a firm tenant and formally
committed to move into the main office building. Mr. Granger indicated that a decision on the State's site
selection is expected by the end of November.
Decommissioning and Potential Development of the Ottawa Plant. General Manager Pandy
distributed to each Commissioner a printout of bid results on the RFP for the demolition/salvage of plant
equipment and environmental cleanup for the Ottawa Station Development Project. Mr. Pandy and Technical
Sen-ices Director John Elashkar responded to questions concerning staffs preliminary analysis of four alternatives
relative to decommissioning the plant. Following lengthy discussion,the Committee then directed the General
Manager to prepare a recommendation for the award of the best evaluated bid for equipment removal and salvage.
This item will be placed on the agenda for Board consideration at the November 25, 1997, regular session.
Electric Deregulation. Electric System Control Director Bill Cook updated the Commissioners on
electric utility deregulation events since his last report on restructuring in October. He reported that the Michigan
Public Service Commission(MPSC) recently issued orders in six contested cases to continue the process for
introducing competition into the Michigan electric market. Each Commissioner received a copy of an analysis
affecting deregulation. comparing key issues between Senator Dunaskiss' Draft 10 legislation, the MPSC Plan,
and HB 5245 (Representative Alley). Mr. Cook responded to questions relative to municipal utility concerns. A
newly published BWL brochure entitled,"Electric Utility Deregulation. Are you Ready to Choose?"was handed
out.
Minority Contracting. General Manager Pandy and Treasurer/Controller Dana Tousley presented an
oven-iew of purchasing activities including minority/women/handicapper owned business enterprises by the BWL
Purchasing Department. Mr. Tousley reported that the BWL Purchasing Department is committed to: (1)fair and
equal purchasing practices. (2)advocating opportunity for minority suppliers,and(3)outreach activities, including
meeting new minority suppliers. At the request of Commissioners Graves and Creamer, staff was asked to provide
information that benchmarks how the BWL compares in minority contracting with other utilities of like size. It
was suggested by Commissioner Graves that consideration be given to identifying minority suppliers in the BWL's
purchasing practices(i.e. suppliers to indicate their status on bids).
Board Minutes Page 94
November 25, 1997
Steam Pipeline Project. General Manager Pandy distributed to each Commissioner a schedule and a
detailed project status report on General Motors' 20-inch Steam Main Project. A progress schedule as of
November 10, 1997, was reviewed. One of the last steps in the construction process will be the"steam blow,"
scheduled to occur on November 29, 1997. Steam Utility Director Joette Woodard-Yauk was present to respond to
questions from the Commissioners concerning the project schedule with Pipe Systems and project cost estimates.
In the near future, staff will be reporting on where the project stands financially.
Storm Restoration Report. General Manager Pandy presented an overview of the October 27, 1997,
storm damage to the BWL electric system. The Commissioners were provided with copies of letters of complaints
and compliments relative to BWL response to the storm. The negative and positive findings on the BWL's storm
restoration performance,based on a post-incident debriefing held by staff,were detailed by Mr. Pandy. It was
noted that 23.000 (24%)customers were out of service at the peak,45,000(48%)customers experienced some
form of service interruption, and wire down"reports totaled 1400 as compared to 300 in the March, 1997, ice storm.
Teams are working to improve the BWL processes and performance. Recommendations will be forthcoming to the
Board for consideration at a future meeting. The Commissioners and Mr.Pandy acknowledged the employees'
dedicated efforts for their willingness to work long and exhausting hours attempting to restore power as quickly as
possible to all customers.
Pension Conversion Values. General Manager Pandy reported that an overstatement was discovered in
conversion value calculations for female employees. As a result, employees are being given additional time to
decide whether to convert to the new defined contribution retirement plan. The decision to extend the window
period resulted from the discovery that the actuarial firm that calculated the conversion values used gender-based
actuarial tables, which overstated those amounts for approximately 170 female employees at the BWL.
Treasurer/Controller Dana Tousley was present and provided details of the error and responded to questions from
the Commissioners concerning gender-based actuarial tables for pension benefits.
Respectfully submitted,
Peter Pratt, Chair Pro Tern
COMMITTEE OF THE WHOLE
Motion: On motion of Commissioner Werbelow, seconded by Commissioner O'Leary, the Committee of the
Whole Report was unanimously approved.
#97-11-2
Finance Committee Report
The Finance Committee met on November 11, 1997, at 4:30 p.m.,to review the audit of the BWL Annual
Financial Statements for 1996-97.
Present were Commissioners Ernest Christian, Charles Creamer,Diane Royal, and Judson Werbelow.
Also present were General Manager Joe Pandy, Treasurer/Controller Dana Tousley, Internal Auditor Kellie
Willson. General Accounting Manager Dave Cluley,Budget and Finance Analysis Supervisor David Fishback, and
Corporate Secretary Mary Sova.
Terry Fuller and Tom Zielecki,who represent the firm of Deloitte&Touche LLP were in attendance to
present the independent audit report. Mr. Fuller is a managing partner in the firm and Mr. Zielecki was the audit
manager. Mr. Fuller reported that the audit report expresses a clean,unqualified opinion on the BWL's financial
statements. In addition,there were no material weaknesses noted in procedures or controls. Following the
presentation on the audit, a question and discussion period was held. Issues identified for further discussion at a
future meeting included:
Page 95 Board Minutes
November 25, 1997
• Cash Reserves
• Deferred Compensated Absences
• Health Care Liability_
• Investment Policy
• Unbilled Revenue
The Committee then met with the external auditors privately as is customary.
Respectfully submitted,
Diane Royal, Chair
Fr:\ANCE COMMITTEE
Motion: On motion of Commissioner Graves, seconded by Commissioner Aquilina, the Finance Committee
Report was unanimously approved.
GENERAL MANAGER'S RECOMMENDATIONS
#97-11-3
Coal Supply Agreement
RESOLVED.That the Board enter into a Coal Supply Agreement("Agreement")with Venture Fuels,
("Seller")a partnership of NERCO Coal Sales Company and Midwest Energy Resource Company for the supply of
Western Powder River Basin("PRB")coal to be used at the BWL's Eckert Station, subject to approval as to form by
the BWL's legal counsel. The Agreement particulars are as follows:
1. The term of the Agreement will be from January 1, 1998 through December 31, 1998.
2. The Seller will provide up to 500,000 tons of PRB coal from its Antelope Mine located in Wyoming.
3. The Seller will arrange all of the transportation logistics for delivery to Eckert Station.
4. The purchase price for the tonnage sold and delivered by Seller shall be$23.88 per net ton F.O.B.
Eckert Station and shall be fixed for the entire term of the Agreement. This equates to a delivered
price of$1.357 per mmBtu based on a guaranteed 8,800 Btu/lb coal quality.
--------------------
By entering into this Agreement with Venture Fuels,BWL will be able to further reduce the delivered cost
of fuel to Eckert Station. The delivered fuel cost reduction(for those units able to utilize the PRB coal)equates to
17.4%on a cents/mmBtu basis below the current eastern U.S. coal being burned at Eckert Station. These fuel cost
savings will be passed on directly to BWL electric customers through the Energy Cost Adjustment clause.
Motion: On motion of Commissioner O'Leary, seconded by Commissioner Graves, Resolution 97-11-3 was
approved.
YEAS: Aquilina, Graves.O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Board Minutes Page 96
November 25, 1997
97-11-a
Purchase Rail Strip Property at Haco Drive through Penn/Hazel Complex
RESOLVED- That the following described property known as the Lansing Connecting Railway be
purchased from the Grand Trunk Western Railroad in the amount of$42,780.50.
"All Grand Trunk Western Railroad Inc.'s former Lansing Connecting Railway, so called,
situated in the Southwest Quarter of Section 15 and the Northwest Quarter of Section 22,
T4N. R2W, in the City of Lansing, County of Ingham, State of Michigan,being more
particularly described as irregular in width and alignment, lying northwesterly of Grand
Trunk Western Railroad Inc.'s regular operating right-of-way, said operating right-of-way
being 100 feet in width. as measured perpendicularly, 50 feet either side of the centerline of
said Railroad's westward Main Track; thence northwesterly across Pennsylvania Avenue,
Hazel Street and St. Joseph Street to the easterly right-of-way line of the former Pere
Marquette Railroad. now the Chessie System, sidetrack right-of-way which is in a north and
south direction."
--------------------
The Grand Trunk Western Railroad is in the process of selling excess properties including this parcel
recommended for purchase. Portions of this parcel bisects the existing BWL Hazel Street/Pennsylvania Avenue
Complex and runs adjacent to the existing BWL Haco Drive facilities. Our intent is to retain and consolidate these
portions with our existing properties and to sell the balance to the adjacent property owners. An appraisal
completed on September 27, 1996 estimated the fair market value of the subject property at$56,000.00. By
Resolution No. 435 the Lansing City Council concurs with the purchase of this property.
Motion: On motion of Commissioner Werbelow, seconded by Commissioner Graves,to approve Resolution
97-11-4.
Discussion
In response to Commissioner Werbelow's question on how much property is involved, General Manager
Pandy said that the property is a long strip of land totalling several acres. It begins at Haco Drive and moves
through the Penn/Hazel complex before moving north on Hosmer Street, ending near Kalamazoo. The area is
being paved over and will be used for parking or some other useful purpose at the complex. Portions outside the
complex and not needed for BWL use will be sold.
Commissioner O'Leary pointed out that the purchase of the rail strip property is an economic
development project that will benefit the City. He inquired if the balance of$32,000 from the Cooperative
Development Fund, established by the City and the BWL to provide money for economic development, could be
used for this purpose. (In the General Managers cover memo, dated November 20, 1997, it was reported that the
Fund was established by the City of Lansing and the BWL to provide money for economic development from the
proceeds of the 1995 sale of property at 6551 S. Pennsylvania Avenue--which property the City had conveyed to
the BWL for$1.00). General Manager Pandy stated that he would discuss this suggestion with the Mayor for
possible consideration.
Following discussion,the motion was carried.
YEAS: Aquilina, Graves, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Page 97 Board Minutes
November 25, 1997
#97-11-5
Demolition and Removal
RESOLVED, That a Contract be awarded to SCS Group, Inkster, MI, in the amount of$2,686,000 for the
demolition and removal of the equipment and materials contained in the Ottawa Station. This recommendation is
based on SCS Group providing the best overall evaluated bid to complete the work by September 1. 1998.
--------------------
Other bidders were as follows:
Dore&Associates. Contracting, Inc. $2,765,200
Louisiana Chemical Dismantling Co. $3,406,000
Cleveland Wrecking Co. $3,662,447
Adamo Demolition $4,150,000
Bierlein Companies, Inc. $4,435,174
DEMCO $4,446,000
Olshan Demolishing $4,780,000
Ciminelli Services Corp. $5,126,000
The Ottawa Station has been retired for several years and efforts have been in progress to develop the
building into a multi-use facility to benefit the Greater Lansing area. Delays in the development process have
increased concerns about deterioration of the large quantities of asbestos contained in the facility and the associated
clean-up costs and risks for employee exposure. In addition,the cost to complete the equipment demolition and
removal work required for development will increase in the future. Based on these concerns, it is recommended
that the equipment demolition and removal work be completed now rather than in the future.
The differences in the bid amounts are attributed to the amount of time each bidder spent inspecting the
facility and their accuracy in estimating the quantities of asbestos present and the salvage value or potential sale of
the equipment and materials.
Motion: On motion of Commissioner Werbelow, seconded by Commissioner Pratt, to approve Resolution
97-11-5.
Discussion
In response to questions raised by the Commissioners relative to equipment demolition and removal work,
Technical Services Director John Elashkar reported that cranes will be used inside the Ottawa facility for the
cleanup project. Access to the top floors of the facility will be through stairs and two elevators. Following the
equipment demolition and removal, all that will remain inside the plant will be two elevators and a set of stairs for
access to the top floors. In essence,the building will be as an empty shell. The plant's chimney will also remain,
except that its 4-inch cement lining will be scraped and removed. Mr. Elashkar reviewed the criteria used to
evaluate the bids.
Following discussion, the motion was carried.
YEAS: Aquilina, Graves,O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian. Creamer
Board Minutes Page 98
November 25, 1997
#97-11-6
Board of Water and Light 401A Plan (ICMA)
RESOLVED, That effective November 30, 1997, the RC-administered 401 Plan(ICMA plan number
8824) titled BOARD OF WATER&LIGHT 401A PLAN is amended and restated as a zero percent money
purchase plan. The Plan will thereafter provide for a zero percent rate of employer contributions and will be
maintained solely for the purpose of receiving rollover distributions or transfers from a qualified trust.
FURTHER RESOLVED,That participants in the BOARD OF WATER&LIGHT 401A PLAN must
elect. in writing,between January 5, 1998 and January 30, 1998 to either leave their account balance as of
November 30, 1997 in the BOARD OF WATER&LIGHT 401A PLAN or have their balance transferred to the
Lansing Board of Water and Light Employees'Defined Contribution Pension Plan. The amount transferred to the
Lansing Board of Water and Light Employees'Defined Contribution Pension Plan would consist of the balance as
of November 30, 1997 plus earnings thereon and less any losses through the date that the transfer is made. Any
participant who fails to make a written election on or before January 30, 1998 will be deemed to have elected to
leave his or her balance in the BOARD OF WATER&LIGHT 401A PLAN.
--------------------
Currently exempt emplovees(not eligible for overtime)receive a 3%contribution into the 401A money
purchase plan administered by ICMA. This resolution allows exempt employees to choose between two providers
for their money purchase plan.
Effective December 1, 1997, all future BWL contributions to this plan will go into the new defined
contribution plan administered by Prudential. Employees may choose to transfer their balances from ICMA to
Prudential or leave their balance in ICMA.
Motion: On motion of Commissioner Werbelow, seconded by Commissioner O'Leary, Resolution 97-11-6
was approved.
YEAS: Aquilina, Graves, O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
UNFINISHED BIISMSS
Resolution#97-11-7
1996-97 Audit Report
Item tabled at the regular meeting of October 27, 1997
WHEREAS, copies of the 1997 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,LLP on September 22, 1997.
WHEREAS, 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.
WHEREAS, the 1997 audit report for the Plan for Employees'Pensions has been received and reviewed by
the Pension Plan Trustees.
Page 99 Board Minutes
November 25, 1997
RESOLVED, That the Corporate Secretary be 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 LansMg State Journal is
not required by law. However. it may be done at the discretion of the General Manager.
--------------------
Motion: On motion of Commissioner O'Leary, seconded by Commissioner Aquilina, to approve Resolution
97-11-7.
Discussion
In response to Commissioner Werbelow's question relative to the statement above regarding the General
Manager's discretion to publish the audit report, General Manager Pandy stated that the Rill audit report is no
longer published in The State Journal because it has not been of interest to our customers. He noted that in recent
years, a copy of the annual report called the BWL OWNER'S MANUAL has been inserted in The State Journal.
Communications Director John Strickler interjected that the OWNER'S MANUAL will not be published this year.
In its place, a condensed financial report will be available on request to anyone who is interested in this
information. Copies of the audited financial statements are also available on request. Mr. Strickler commented
that a BWL survey indicated that the majority of customers were not reading the OWNER'S MANUAL, thus the
expense to produce and distribute the manual did not justify the cost.
Following discussion,the motion was carried.
YEAS: Aquilina, Graves, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
NEW BUSINESS
Developer Joel Ferguson, 1341 Cambridge,Lansing, and partner of Capitol Outlook, L.L.C.,briefed the
Board on the process that has evolved since 1995 when the first offer to purchase the 123 W. Ottawa Street main
office building and associated parking lot on 221 N. Capitol Avenue was made for the purpose of converting the
property into a State legislative office building. Mr.Ferguson reported that he has secured an option to purchase
the former Comerica building on 200 N. Capitol Avenue(across the street from the BWL Main Office Building).
His group plans to connect the two buildings with a bridge and remodel and re-skin both buildings to make up the
225.000 square feet needed to house both legislative parties. With the previous offer now expired as of June 30,
1996, a new preliminary Purchase Agreement reflecting the following changes,according to Mr. Ferguson, has
been submitted to the Board for consideration:
1. Financing for the development has been secured, thus the financing contingency is
eliminated.
2. The amount of the Earnest Money is non-refundable if the Purchaser does not move this
transaction forward after necessary approvals have been received.
3. Closing Date language has been modified to stipulate that this transaction is to close
within 30 days after both parties satisfy all contingencies set forth in the Agreement.
The Agreement terminates if it is not closed within 90 days after Council approval as
opposed to a date certain.
Board Minutes Page 100
November 25, 1997
Mr. Ferguson stated that he and his partner. Gary Granger,feel confident that their group, Capitol
Outlook L. L. C._will be selected by the legislature as the preferred site for a new State legislative office building.
Because time is of the essence during negotiations, he urged the Board to place this transaction on a priority track
and to authorize the filing of the new preliminary Purchase Agreement with the City Clerk so that it can be placed
on the Council Agenda as quickly as possible. This would set the 30-day clock for a public hearing, and the
Council would then be able to consider this transaction as early as January, 1998.
The Board reviewed and discussed two draft resolutions and after lengthy deliberation, the following
resolution was considered:
997-11-8
Sale of Main Office Building
WHEREAS. the Board on March 28, 1995 passed Resolution No. 95-3-11 declaring that parcels of
property located at 123 W. Ottawa Street and 221 N. Capitol Avenue were no longer necessary to the operation of
the B WL. and
WHEREAS. Capitol Outlook.L. L. C. has expressed an interest in purchasing the parcels of real property;
and
WHEREAS, the BWL has expressed an interest in selling the parcels of real property to Capitol Outlook,
L. L. C.. and
WHEREAS, time is of the essence and certain terms of the transaction remain to be established through
subsequent negotiations: and
WHEREAS, the parties desire to enter into a preliminary agreement which will evidence their respective
good faith intentions to undertake the transaction.
BE IT RESOLVED_ That the General Manager and Corporate Secretary are authorized to enter into an
exclusive option for the sale of real estate parcels located at 123 W. Ottawa Street and 221 N. Capitol Avenue to
Capitol Outlook_ L. L. C.
FURTHER RESOLVED,That the Chair of the Board shall appoint a committee,with appropriate staff
support.. to negotiate the terms and conditions of the sale of these parcels to Capitol Outlook,L. L. C.
FURTHER RESOLVED,That subsequent to satisfactorily completing negotiations, the General Manager
and Corporate Secretary are authorized to enter into a contract for the sale of such property in such form as
approved by the Staff Attorney, subject to final approval by the Board of Commissioners and the Lansing City
Council in accordance with the Lansing City Charter.
Motion: On motion of Commissioner Aquilina, seconded by Commissioner Graves, to approve Resolution
97-11-8.
Discussion
In response to questions raised by Commissioners Werbelow and O'Leary, General Manager Pandy and
Staff Attornev Wilhite clarified that the intent of the resolution is for the Chair to appoint a committee comprised
of Commissioners and staff to negotiate the terms and conditions of the sale to Capitol Outlook,L.L. C.
Following a brief question and answer period, it was clearly understood that whatever the special committee
negotiates, it is subject to final approval by the Board and the Lansing City Council. Mr. Wilhite noted that City
Page 101 Board Minutes
November 25, 1997
ordinance on disposition of real property requires a public hearing at least one week prior to City Council action on
the issue of sale. He also pointed out that the City Charter requires that complete documentation on the details of
the sale be on file in the City Clerk's Office at least 30 days prior to the public hearing.
Commissioner O'Leary pointed out that only two Commissioners who were involved with negotiations on
the main office building offer in 1995 remain on the Board. Since that time, six new Commissioners have been
appointed. He noted that the newer Commissioners should have the opportunity for input in this important
decision. Once the special committee reaches agreement with Capitol Outlook,L. L. C.,a special meeting of the
Board could then be called for final Board approval of the Purchase Agreement.
Following lengthy discussion, the motion was carried.
YEAS: Aquilina, Graves,O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Special Committee Appointments
The general consensus of the Board was to have four Commissioners serve on the special committee.
Commissioners appointed to the special committed were Rosemarie Aquilina, Joseph Graves,Diane Royal and Jud
Werbelow. The subcommittee agreed to first meet with staff at the earliest date possible and then schedule a
subsequent meeting«ith Mr. Ferguson.
GENERAL MANAGER'S REMARKS
Electric University Web Site
General Manager Pandy handed out a copy of THE SYNDICATION NEWSLETTER,Autumn 1997, which
announces that the BWL is among eight utility subscribers in the U. S. that have joined the Electric Universe,
More Syndication's internet subscription service. The"Universe" provides a seamless expansion of a subscribing
utilit}-'s website by over 350 pages. It contains a wealth of information about electricity, how it affects our lives
and how to harness its power safety.
Strategic Planning Retreat
General Manager Pandy reviewed a draft agenda for the Board's planning retreat. Items for discussion
include:
1. BWL Commissioners' Role and Staff Interactions
2. Relationship with City of Lansing Officials(Mayor and City Council)
• Pairing with Councilmembers
3. Financial Status
• Status of each utility
• Financial Forecast
4. Deregulation
• Process Improvement
• Strategic Alliances
• New Ventures
Board Minutes Page 102
November 25, 1997
5. Real Estate Matters (time permitting)
• Ottawa Power Station
• Main Office Building
Commissioner Graves indicated he may have an issue for the agenda,but would like to first discuss it with
Mr. Pandv.
The retreat will be held on Thursday,December 11, 1997 from 12 noon to 5 p.m., at the Holiday Inn,
South.
REMARKS BY COMMISSIONERS
There were no remarks.
PUBLIC COMMENTS
VICE CHAIR ROYAL ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Graves, seconded by Commissioner Pratt,the absences of Commissioners
Christian and Creamer were excused.
Adopted unanimously.
ADJOURNMENT
On motion by Commissioner Aquilina, the Board adjourned at 6:43 p.m.
'$6' �S�
May ayova, Secretary
Filed: December?, 1997
Marilynn Slade, City Clerk
Page 92
a MINUTES OF BOARD OF COMMISSIONERS' MEETING
(� •% �' LANSING BOARD OF WATER AND LIGHT
�;i ijC.jy CLERK
Tuesday,November 25, 1997
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
OttaNva Street,Lansing,Michigan. The meeting was called to order by the Vice Chair,Diane Royal.
Present: Commissioners Aquilina, Graves, O'Leary, Pratt,Royal,and Werbelow.
Absent: Commissioners Christian(out of town)and Creamer(out of town).
The Secretary declared a quorum present.
The invocation was delivered by Vice Chair Roval.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion: On motion of Commissioner Werbelow, and seconded by Commissioner O'Leary,the minutes of
special session of October 14, 1997 and regular meeting of October 27, 1997 were unanimously
approved.
PUBLIC COMMENTS
VICE CHAIR ROYAL ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE
END OF THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
A thank you letter to Commissioners and staff from former Commissioner John Strolle was received.
Placed on file.
A letter from Jack Down regarding a billing matter was received.
General Manager Pandy stated that staff has been in contact with Mr. Downs to resolve his concern.
Page 93 Board Minutes
November 25, 1997
REPORTS OF COMMITTEES
9 97-11-1
Committee of the Whole Report
The Committee of the Whole met on November 11, 1997, at 5:30 p.m., to receive staff reports on the
following matters:
1. Ottawa Station
2. Electric Deregulation
3. Minority Contracting
4. Steam Pipeline to General Motors' Plant#6
5. Ice Storm of October 27, 1997
6. Other matters that may come before the Committee of the Whole
Present were Commissioners Rosemarie Aquilina,Ernest Christian, Charles Creamer,Joseph Graves, Jr.,
Diane Royal.Dave O'Leary,Peter Pratt, Judson Werbelow.
Main Office Building Sale Update. Developer Gary Granger of Capitol Annex,L.L.C. presented an
update on the status of negotiations with the State of Michigan for space to relocate offices for the House of
Representatives. Mr. Granger displayed schematic drawings of a proposed renovated facade of the Board of Water
and Light (BWL)office building at 123 W. Ottawa Street. Requests for proposals were opened by the State on
October 28, 1997. The Board is awaiting confirmation that the developer has a firm tenant and formally
committed to move into the main office building. Mr. Granger indicated that a decision on the State's site
selection is expected by the end of November.
Decommissioning and Potential Development of the Ottawa Plant. General Manager Pandy
distributed to each Commissioner a printout of bid results on the RFP for the demolitionisalvage of plant
equipment and environmental cleanup for the Ottawa Station Development Project. Mr. Pandy and Technical
Services Director John Elashkar responded to questions concerning staffs preliminary analysis of four alternatives
relative to decommissioning the plant. Following lengthy discussion, the Committee then directed the General
Manager to prepare a recommendation for the award of the best evaluated bid for equipment removal and salvage.
This item will be placed on the agenda for Board consideration at the November 25, 1997, regular session.
Electric Deregulation. Electric System Control Director Bill Cook updated the Commissioners on
electric utility deregulation events since his last report on restructuring in October. He reported that the Michigan
Public Service Commission(MPSC) recently issued orders in six contested cases to continue the process for
introducing competition into the Michigan electric market. Each Commissioner received a copy of an analysis
affecting deregulation,comparing key issues between Senator Dunaskiss' Draft 10 legislation, the MPSC Plan,
and HB 5245 (Representative Alley). Mr. Cook responded to questions relative to municipal utility concerns. A
newly published BWL brochure entitled,"Electric Utility Deregulation. Are you Ready to Choose?"was handed
out.
Minority Contracting. General Manager Pandy and Treasurer/Controller Dana Tousley presented an
overview of purchasing activities including minority/women/handicapper owned business enterprises by the BWL
Purchasing Department. Mr. Tousley reported that the BWL Purchasing Department is committed to: (1)fair and
equal purchasing practices. (2)advocating opportunity for minority suppliers, and(3)outreach activities, including
meeting new minority suppliers. At the request of Commissioners Graves and Creamer, staff was asked to provide
information that benchmarks how the BWL compares in minority contracting with other utilities of like size. It
was suggested by Commissioner Graves that consideration be given to identifying minority suppliers in the BWL's
purchasing practices(i.e. suppliers to indicate their status on bids).
Board Minutes Page 94
November 25, 1997
Steam Pipeline Project. General Manager Pandy distributed to each Commissioner a schedule and a
detailed project status report on General Motors' 20-inch Steam Main Project. A progress schedule as of
November 10. 1997, was reviewed. One of the last steps in the construction process will be the"steam blow,"
scheduled to occur on November 29, 1997. Steam Utility Director Joette Woodard-Yauk was present to respond to
questions from the Commissioners concerning the project schedule with Pipe Systems and project cost estimates.
In the near future. staff will be reporting on where the project stands financially.
Storm Restoration Report. General Manager Pandy presented an overview of the October 27, 1997,
storm damage to the BWL electric system. The Commissioners were provided with copies of letters of complaints
and compliments relative to BWL response to the storm. The negative and positive findings on the BWL's storm
restoration performance,based on a post-incident debriefing held by staff,were detailed by Mr. Pandy. It was
noted that 23.000 (24%)customers were out of service at the peak, 45,000 (48%)customers experienced some
form of service interruption, and wire down reports totaled 1400 as compared to 300 in the March, 1997, ice storm.
Teams are working to improve the BWL processes and performance. Recommendations will be forthcoming to the
Board for consideration at a future meeting. The Commissioners and Mr. Pandy acknowledged the employees'
dedicated efforts for their willingness to work long and exhausting hours attempting to restore power as quickly as
possible to all customers.
Pension Conversion Values. General Manager Pandy reported that an overstatement was discovered in
conversion value calculations for female employees. As a result, employees are being given additional time to
decide whether to convert to the new defined contribution retirement plan. The decision to extend the window
period resulted from the discovery that the actuarial firm that calculated the conversion values used gender-based
actuarial tables,which overstated those amounts for approximately 170 female employees at the BWL.
Treasurer/Controller Dana Tousley was present and provided details of the error and responded to questions from
the Commissioners concerning gender-based actuarial tables for pension benefits.
Respectfully submitted,
Peter Pratt, Chair Pro Tern
COMMITTEE OF THE WHOLE
Motion: On motion of Commissioner Werbelow, seconded by Commissioner O'Leary, the Committee of the
Whole Report was unanimously approved.
#97-11-2
Finance Committee Report
The Finance Committee met on November 11, 1997, at 4:30 p.m., to review the audit of the BWL Annual
Financial Statements for 1996-97.
Present were Commissioners Ernest Christian, Charles Creamer,Diane Royal, and Judson Werbelow.
Also present were General Manager Joe Pandy, Treasurer/Controller Dana Tousley, Internal Auditor Kellie
Willson, General Accounting Manager Dave Cluley,Budget and Finance Analysis Supervisor David Fishback, and
Corporate Secretary Mary Sova.
Terry Fuller and Tom Zielecki, who represent the firm of Deloitte&Touche LLP were in attendance to
present the independent audit report. Mr. Fuller is a managing partner in the firm and Mr. Zielecki was the audit
manager. Mr. Fuller reported that the audit report expresses a clean, unqualified opinion on the BWL's financial
statements. In addition, there were no material weaknesses noted in procedures or controls. Following the
presentation on the audit, a question and discussion period was held. Issues identified for further discussion at a
future meeting included:
Page 95 Board Minutes
November 25, 1997
• Cash Reserves
• Deferred Compensated Absences
• Health Care Liability_
• Investment Polio
• Unbilled Revenue
The Committee then met with the external auditors privately as is customary.
Respectfully submitted,
Diane Royal. Chair
FINANCE COMMITTEE
Motion: On motion of Commissioner Graves, seconded by Commissioner Aquilina, the Finance Committee
Report was unanimously approved.
GENERAL MANAGER'S RECOMMENDATIONS
997-11-3
Coal Supply Agreement
RESOLVED,That the Board enter into a Coal Supply Agreement("Agreement")with Venture Fuels,
("Seller") a partnership of NERCO Coal Sales Company and Midwest Energy Resource Company for the supply of
Western Powder River Basin("PRB")coal to be used at the BWL's Eckert Station, subject to approval as to form by
the BWL's legal counsel. The Agreement particulars are as follows:
1. The term of the Agreement will be from January 1, 1998 through December 31, 1998.
2. The Seller will provide up to 500,000 tons of PRB coal from its Antelope Mine located in Wyoming.
3. The Seller will arrange all of the transportation logistics for delivery to Eckert Station.
4. The purchase price for the tonnage sold and delivered by Seller shall be$23.88 per net ton F.O.B.
Eckert Station and shall be fixed for the entire term of the Agreement. This equates to a delivered
price of$1.357 per mmBtu based on a guaranteed 8,800 Btu/lb coal quality.
-------------------
By entering into this Agreement with Venture Fuels,BWL will be able to further reduce the delivered cost
of fuel to Eckert Station. The delivered fuel cost reduction(for those units able to utilize the PRB coal)equates to
17.4%on a cents/mmBtu basis below the current eastern U.S. coal being burned at Eckert Station. These fuel cost
savings will be passed on directly to BWL electric customers through the Energy Cost Adjustment clause.
Motion: On motion of Commissioner O'Leary, seconded by Commissioner Graves,Resolution 97-11-3 was
approved.
YEAS: Aquilina, Graves, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Board Minutes Page 96
November 25, 1997
97-11-a
Purchase Rail Strip Property at Haco Drive through Penn/Hazel Complex
RESOLVED, That the following described property known as the Lansing Connecting Railway be
purchased from the Grand Trunk Western Railroad in the amount of$42,780.50.
"All Grand Trunk Western Railroad Inc.'s former Lansing Connecting Railway, so called,
situated in the Southwest Quarter of Section 15 and the Northwest Quarter of Section 22,
T4N, R2W, in the City of Lansing, County of Ingham, State of Michigan,being more
particularly described as irregular in width and alignment, lying northwesterly of Grand
Trunk Western Railroad Inc.'s regular operating right-of-way, said operating right-of-way
being 100 feet in width, as measured perpendicularly, 50 feet either side of the centerline of
said Railroad's westward Main Track, thence northwesterly across Pennsylvania Avenue,
Hazel Street and St. Joseph Street to the easterly right-of-way line of the former Pere
Marquette Railroad, now the Chessie System, sidetrack right-of-way which is in a north and
south direction."
--------------------
The Grand Trunk Western Railroad is in the process of selling excess properties including this parcel
recommended for purchase. Portions of this parcel bisects the existing BWL Hazel Street/Pennsylvania Avenue
Complex and runs adjacent to the existing BWL Haco Drive facilities. Our intent is to retain and consolidate these
portions with our existing properties and to sell the balance to the adjacent property owners. An appraisal
completed on September 27, 1996 estimated the fair market value of the subject property at$56,000.00. By
Resolution No. 435 the Lansing City Council concurs with the purchase of this property.
Motion: On motion of Commissioner Werbelow, seconded by Commissioner Graves, to approve Resolution
97-11-4.
Discussion
In response to Commissioner Werbelow's question on how much property is involved, General Manager
Pandv said that the property is a long strip of land totalling several acres. It begins at Haco Drive and moves
through the Penn/Hazel complex before moving north on Hosmer Street, ending near Kalamazoo. The area is
being paved over and will be used for parking or some other useful purpose at the complex. Portions outside the
complex and not needed for BWL use will be sold.
Commissioner O'Leary pointed out that the purchase of the rail strip property is an economic
development project that will benefit the City. He inquired if the balance of$32,000 from the Cooperative
Development Fund, established by the City and the BWL to provide money for economic development, could be
used for this purpose. (In the General Managers cover memo, dated November 20, 1997, it was reported that the
Fund was established by the City of Lansing and the BWL to provide money for economic development from the
proceeds of the 1995 sale of property at 6551 S. Pennsylvania Avenue--which property the City had conveyed to
the B WL for$1.00). General Manager Pandy stated that he would discuss this suggestion with the Mayor for
possible consideration.
Following discussion, the motion was carried.
YEAS: Aquilina, Graves, O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Page 97 Board Minutes
November 25, 1997
#97-11-5
Demolition and Removal
RESOLVED,That a Contract be awarded to SCS Group, Inkster,NE, in the amount of$2,686,000 for the
demolition and removal of the equipment and materials contained in the Ottawa Station. This recommendation is
based on SCS Group providing the best overall evaluated bid to complete the work by September 1, 1998.
--------------------
Other bidders were as follows:
Dore&Associates. Contracting, Inc. $2,765,200
Louisiana Chemical Dismantling Co. $3,406,000
Cleveland Wrecking Co. $3,662,447
Adamo Demolition $4,150,000
Bierlein Companies, Inc. $4,435,174
DEMCO $4,446,000
Olshan Demolishing $4,780,000
Ciminelli Services Corp. $5,126,000
The Ottawa Station has been retired for several years and efforts have been in progress to develop the
building into a multi-use facility to benefit the Greater Lansing area. Delays in the development process have
increased concerns about deterioration of the large quantities of asbestos contained in the facility and the associated
clean-up costs and risks for employee exposure. In addition,the cost to complete the equipment demolition and
removal work required for development will increase in the future. Based on these concerns, it is recommended
that the equipment demolition and removal work be completed now rather than in the future.
The differences in the bid amounts are attributed to the amount of time each bidder spent inspecting the
facility and their accuracy in estimating the quantities of asbestos present and the salvage value or potential sale of
the equipment and materials.
Motion: On motion of Commissioner Werbelow, seconded by Commissioner Pratt,to approve Resolution
97-11-5.
Discussion
In response to questions raised by the Commissioners relative to equipment demolition and removal work,
Technical Services Director John Elashkar reported that cranes will be used inside the Ottawa facility for the
cleanup project. Access to the top floors of the facility will be through stairs and two elevators. Following the
equipment demolition and removal,all that will remain inside the plant will be two elevators and a set of stairs for
access to the top floors. In essence, the building will be as an empty shell. The plant's chimney will also remain,
except that its 4-inch cement lining will be scraped and removed. Mr.Elashkar reviewed the criteria used to
evaluate the bids.
Following discussion, the motion was carried.
YEAS: Aquilina, Graves, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Board Minutes Page 98
November 25, 1997
#97-11-6
Board of Water and Light 401A Plan (ICMA)
RESOLVED, That effective November 30, 1997,the RC-administered 401 Plan(ICMA plan number
8824)titled BOARD OF WATER&LIGHT 401A PLAN is amended and restated as a zero percent money
purchase plan. The Plan will thereafter provide for a zero percent rate of employer contributions and will be
maintained solely for the purpose of receiving rollover distributions or transfers from a qualified trust.
FURTHER RESOLVED, That participants in the BOARD OF WATER&LIGHT 401A PLAN must
elect. in writing,between January 5, 1998 and January 30, 1998 to either leave their account balance as of
November 30. 1997 in the BOARD OF WATER&LIGHT 401A PLAN or have their balance transferred to the
Lansing Board of Water and Light Employees'Defined Contribution Pension Plan. The amount transferred to the
Lansing Board of Water and Light Employees'Defined Contribution Pension Plan would consist of the balance as
of November 30, 1997 plus earnings thereon and less any losses through the date that the transfer is made. Any
participant who fails to make a written election on or before January 30, 1998 will be deemed to have elected to
leave his or her balance in the BOARD OF WATER&LIGHT 401A PLAN.
--------------------
Currently exempt employees(not eligible for overtime)receive a 3%contribution into the 401A money
purchase plan administered by ICNIA. This resolution allows exempt employees to choose between two providers
for their money purchase plan.
Effective December 1, 1997, all future BWL contributions to this plan will go into the new defined
contribution plan administered by Prudential. Employees may choose to transfer their balances from ICMA to
Prudential or leave their balance in ICMA.
Motion: On motion of Commissioner Werbelow, seconded by Commissioner O'Leary,Resolution 97-11-6
was approved.
YEAS: Aquilina, Graves. O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
UNFINISHED BUSINESS
Resolution#97-11-7
1996-97 Audit Report
Item tabled at the regular meeting of October 27, 1997
WHEREAS, copies of the 1997 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,LLP on September 22, 1997.
WHEREAS, 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.
WHEREAS,the 1997 audit report for the Plan for Employees'Pensions has been received and reviewed by
the Pension Plan Trustees.
Page 99 Board Minutes
November 25, 1997
RESOLVED, That the Corporate Secretary be 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.
--------------------
Motion: On motion of Commissioner O'Leary, seconded by Commissioner Aquilina, to approve Resolution
97-11-7.
Discussion
In response to Commissioner Werbelow's question relative to the statement above regarding the General
Manager's discretion to publish the audit report, General Manager Pandy stated that the full audit report is no
longer published in The State Journal because it has not been of interest to our customers. He noted that in recent
years, a copy of the annual report called the BWL OWNER'S MANUAL has been inserted in The State Journal.
Communications Director John Strickler interjected that the OWNER'S MANUAL will not be published this year.
In its place. a condensed financial report will be available on request to anyone who is interested in this
information. Copies of the audited financial statements are also available on request. Mr. Strickler commented
that a BAIL survey indicated that the majority of customers were not reading the OWNER'S MANUAL,thus the
expense to produce and distribute the manual did not justify the cost.
Following discussion, the motion was carried.
YEAS: Aquilina, Graves, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
NEW BUSINESS
Developer Joel Ferguson, 1341 Cambridge, Lansing, and partner of Capitol Outlook,L.L.C.,briefed the
Board on the process that has evolved since 1995 when the first offer to purchase the 123 W. Ottawa Street main
office building and associated parking lot on 221 N. Capitol Avenue was made for the purpose of converting the
property into a State legislative office building. Mr. Ferguson reported that he has secured an option to purchase
the former Comerica building on 200 N. Capitol Avenue(across the street from the BWL Main Office Building).
His group plans to connect the two buildings with a bridge and remodel and re-skin both buildings to make up the
225,000 square feet needed to house both legislative parties. With the previous offer now expired as of June 30,
1996, a new preliminary Purchase Agreement reflecting the following changes,according to Mr. Ferguson, has
been submitted to the Board for consideration:
1. Financing for the development has been secured, thus the financing contingency is
eliminated.
2. The amount of the Earnest Money is non-refundable if the Purchaser does not move this
transaction forward after necessary approvals have been received.
3. Closing Date language has been modified to stipulate that this transaction is to close
within 30 days after both parties satisfy all contingencies set forth in the Agreement.
The Agreement terminates if it is not closed within 90 days after Council approval as
opposed to a date certain.
Board Minutes Page 100
November 25_ 1997
Mr. Ferguson stated that he and his partner, Gary Granger,feel confident that their group, Capitol
Outlook L. L. C.. will be selected by the legislature as the preferred site for a new State legislative office building.
Because time is of the essence during negotiations, he urged the Board to place this transaction on a priority track
and to authorize the filing of the new preliminary Purchase Agreement with the City Clerk so that it can be placed
on the Council Agenda as quickly as possible. This would set the 30-day clock for a public hearing,and the
Council would then be able to consider this transaction as early as January, 1998.
The Board reviewed and discussed two draft resolutions and after lengthy deliberation, the following
resolution was considered:
#97-11-8
Sale of Main Office Building
WHEREAS. the Board on March 28, 1995 passed Resolution No. 95-3-11 declaring that parcels of
property located at 123 W. Ottawa Street and 221 N. Capitol Avenue were no longer necessary to the operation of
the BWL: and
WHEREAS. Capitol Outlook,L. L. C. has expressed an interest in purchasing the parcels of real property;
and
WHEREAS, the BWL has expressed an interest in selling the parcels of real property to Capitol Outlook,
L. L. C.: and
WHEREAS, time is of the essence and certain terms of the transaction remain to be established through
subsequent negotiations; and
WHEREAS.the parties desire to enter into a preliminary agreement which will evidence their respective
good faith intentions to undertake the transaction.
BE IT RESOLVED, That the General Manager and Corporate Secretary are authorized to enter into an
exclusive option for the sale of real estate parcels located at 123 W. Ottawa Street and 221 N. Capitol Avenue to
Capitol Outlook, L. L. C.
FURTHER RESOLVED,That the Chair of the Board shall appoint a committee,with appropriate staff
support. to negotiate the terms and conditions of the sale of these parcels to Capitol Outlook,L. L. C.
FURTHER RESOLVED, That subsequent to satisfactorily completing negotiations,the General Manager
and Corporate Secretary are authorized to enter into a contract for the sale of such property in such form as
approved by the Staff Attorney, subject to final approval by the Board of Commissioners and the Lansing City
Council in accordance with the Lansing City Charter.
Motion: On motion of Commissioner Aquilina, seconded by Commissioner Graves, to approve Resolution
97-11-8.
Discussion
In response to questions raised by Commissioners Werbelow and O'Leary, General Manager Pandy and
Staff Attorney Wilhite clarified that the intent of the resolution is for the Chair to appoint a committee comprised
of Commissioners and staff to negotiate the terms and conditions of the sale to Capitol Outlook,L. L. C.
Following a brief question and answer period, it was clearly understood that whatever the special committee
negotiates, it is subject to final approval by the Board and the Lansing City Council. Mr. Wilhite noted that City
Page 101 Board Minutes
November 25, 1997
ordinance on disposition of real property requires a public hearing at least one week prior to City Council action on
the issue of sale. He also pointed out that the City Charter requires that complete documentation on the details of
the sale be on file in the City Clerk's Office at least 30 days prior to the public hearing.
Commissioner O'Leary pointed out that only two Commissioners who were involved with negotiations on
the main office building offer in 1995 remain on the Board. Since that time, six new Commissioners have been
appointed. He noted that the newer Commissioners should have the opportunity for input in this important
decision. Once the special committee reaches agreement with Capitol Outlook, L. L. C., a special meeting of the
Board could then be called for final Board approval of the Purchase Agreement.
Following lengthy discussion, the motion was carried.
YEAS: Aquilina, Graves, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: Christian, Creamer
Special Committee Appointments
The general consensus of the Board was to have four Commissioners serve on the special committee.
Commissioners appointed to the special committed were Rosemarie Aquilina. Joseph Graves,Diane Royal and Jud
Werbelow. The subcommittee agreed to first meet with staff at the earliest date possible and then schedule a
subsequent meeting with Mr. Ferguson.
GENERAL MANAGER'S REMARKS
Electric University Web Site
General Manager Pandy handed out a copy of THE SYNDICATION NEWSLETTER, Autumn 1997,which
announces that the BWL is among eight utility subscribers in the U. S. that have joined the Electric Universe,
More Syndication's internet subscription service. The"Universe"provides a seamless expansion of a subscribing
utility's website by over 350 pages. It contains a wealth of information about electricity, how it affects our lives
and how to harness its power safety.
Strategic Planning Retreat
General Manager Pandy reviewed a draft agenda for the Board's planning retreat. Items for discussion
include:
1. BWL Commissioners' Role and Staff Interactions
2. Relationship with City of Lansing Officials(Mayor and City Council)
• Pairing with Councilmembers
3. Financial Status
• Status of each utility
• Financial Forecast
4. Deregulation
• Process Improvement
• Strategic Alliances
0 New Ventures
Board Minutes Page 102
November 25. 1997
5. Real Estate Matters (time permitting)
• Ottawa Power Station
• Main Office Building
Commissioner Graves indicated he may have an issue for the agenda,but would like to first discuss it with
Mr. Pandy.
The retreat will be held on Thursday. December 11, 1997 from 12 noon to 5 p.m., at the Holiday Inn,
South.
REMARKS BY COMMISSIONERS
There were no remarks.
PUBLIC COMMENTS
VICE CHAIR ROYAL ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Graves. seconded by Commissioner Pratt,the absences of Commissioners
Christian and Creamer were excused.
Adopted unanimously.
ADJOURNMENT
On motion by Commissioner Aquilina, the Board adjourned at 6:43 p.m.
May ayova, Secretary
Filed: December 2, 1997
Marilvnn Slade. City Clerk
Page 84
MINUTES OF BOARD OF COMMISSIONERS' SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, October 14, 1997
The Board of Commissioners met in special session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street, Lansing,Michigan. The meeting was called to order by Chair O'Leary.
Present: Commissioners Aquilina, Christian, Creamer,O'Leary,Pratt
Absent: Graves,Royal,and Werbelow
A quorum of the Board was present.
The purpose of the special meeting was to receive the report of the Nominating Committee on Board
officers and to set a date for the Board's annual retreat to discuss company strategies.
Chair O'Leary welcomed newly appointed Commissioners Rosemarie Aquilina and Charles Creamer.
REPORT OF THE NOMINATING COMMITTEE
(Resolution 97-10-1)
October 14, 1997
The Nominating Committee has reviewed copies of past and current Commissioner surveys and has met
to consider nominations for board officers for fiscal year 1997-98. It is the unanimous decision of the
Nominating Committee that the following Commissioners be nominated for the offices indicated:
Chair: -Ernest J. Christian
Vice Chair: -Diane R. Royal
Chair Pro Tem: -Peter P. Pratt
NOMINATING COMMITTEE
Judson M. Werbelow, Chair
Joseph E. Graves, Jr.
Peter P.Pratt
MOTION: On motion of Commissioner Pratt, seconded by Commissioner Aquilina, the report of the
Nominating Committee, including Resolution 97-10-1,was adopted by the following vote:
YEAS: Aquilina, Christian, Creamer, O'Leary,Pratt
NAYS: None
ABSENT: Graves,Royal, Werbelow
The new officers will assume their positions at the next regular meeting scheduled for October 27, 1997.
Special Board Meeting Minutes Page 85
October 16, 1997
OTHER RELATED MATTERS
Chair-Elect Ernest Christian reported that he plans to announce committee assignments at the next
regular meeting.
The date of the Board's retreat will be determined once all Commissioners have been contacted by the
Corporate Secretary to schedule a one-half day session for the month of November.
EXCUSED ABSENCES
There being no objection, the absences of Commissioners Graves,Royal and Werbelow were excused.
ADJOURNMENT
There being no further business, the Board adjourned at 5:35 p.m.
1uU1/LC�
Mary Sov , ecretary
Filed: October 16, 1997
Marilynn Slade, City Clerk
Page 86
-r ` MINUTES OF BOARD OF COMMISSIONERS' MEETING
l : 0 1 LANSING BOARD OF WATER AND LIGHT
LiAd-Siff CITY CLERK'
Tuesday, October 27,1997
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 the Chair, Ernest Christian.
Present: Commissioners Aquilina, Creamer, Christian, Graves,O'Leary, Pratt,Royal, and Werbelow.
Absent: None
The Secretary declared a quorum present.
The invocation was delivered by the Chair.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Commissioner Werbelow referred to page 82 of the September 30, 1997 minutes, the section under General
Manager's Remarks, regarding the Sale of the Main Office Building,first sentence of the second paragraph. He
proposed that the sentence be corrected by striking out three words,and to read as follows: "Following discussion,
the Commissioners agreed on the need for a definitive answer in writing from the developer er tenant
indicating an intent to proceed with the project.
MOTION: There being no objection, Commissioner Werbelow moved the approval of the minutes, as
corrected, of rescheduled meeting held September 30, 1997.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE
BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE
MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications.
REPORTS OF COMMITTEES
No committee reports.
Page 87 Board Minutes
October 27, 1997
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No. 97-10-2
RESOLVED, That the issuance of Purchase Orders be authorized to the following Consultants for
providing Professional Services for process redesign and implementation.
1. Prism Performance Systems, Fannington Hills, Michigan for providing assistance in process
definition and improvement including assisting in the planning and facilitating of employee
participation conferences.
2. Emergent Systems, Brighton, Michigan for providing assistance in Human Resource issues.
Consulting services will be provided on a hourly/daily rate plus actual expenses.
Several Consultants were contacted and these were the only two with experience in these areas which could
meet the time schedule for the process redesign and implementation. Both firms have provided consulting
services to the Board in the past.
MOTION: On motion of Commissioner O'Leary, seconded by Commissioner Royal,Resolution 97-10-2 was
approved by the following vote:
YEAS: Aquilina, Christian, Creamer, Graves,O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
Res. No. 97-10-3
WHEREAS, Copies of the 1997 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, LLP on September 22, 1997.
WHEREAS, The audit report for the Board of Water and Light and the report on the system of internal
control is hereby received and referred to the Finance Committee. The auditors found no significant items
that warranted submission of a management letter.
WHEREAS, The 1997 audit report for the Plan for Employees' Pensions has been received and reviewed
by the Pension Plan Trustees.
RESOLVED, That the Corporate Secretary be 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 State Journal is not
required by law. However, it may be done at the discretion of the General Manager.
--------------------
Board Minutes Page 88
October 27, 1997
MOTION: On motion of Commissioner Werbelow, seconded by Commissioner Pratt,to table Resolution
97-10-3 until the Finance Committee has reviewed the audit report.
Approved by the following vote:
YEAS: Aquilina, Christian, Creamer, Graves, O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
UNFINISHED BUSINESS
Office Buildino Status. Comte.issioner O'Leary reported that the deadline for Lhe State of Mic'.riban to receive
bids on their request for proposals for space to relocate offices for the House of Representatives is October 27. Bids
are expected to be opened on October 28.
Ottawa Station Update. General Manager Pandy reported that requests for proposals for equipment removal and
salvage bids for the Ottawa Station are due November 11. Staff will be presenting a preliminary cost analysis
report at the Committee of the Whole meeting scheduled for November 11. Mr. Pandy also reported that he
contacted Thomas Coates soon after the September 30, 1997, regular meeting to communicate the Board's decision
on authorizing the Sony Market Study on the feasibility of a theater complex(per Board Resolution 97-9-8). The
written communication to Mr. Coates indicated that the Board would expect to receive a copy of Sony's written
analvsis by January 1, 1998. Mr. Coates did confirm that the January 1, 1998, deadline was an adequate amount of
time to complete the study.
NEW BUSINESS
Chairperson Christian announced the standing committee assignments for Fiscal Year 1997-98:
EXECUTIVE COMMITTEE: Ernest Christian, Chair
Diane Royal, Vice Chair
Peter Pratt, Chair Pro Tem
Diane Royal, Chair
FINANCE COIYL>`9?TTEE: Ernest Christian,Member
Charles Creamer,Member
Jud Werbelow,Member
Rosemarie Aquilina, Alternate
David O'Leary, Alternate
PERSONNEL COM II=E: David O'Leary, Chair
Rosemarie Aquilina,Member
Joseph Graves,Jr., Member
Peter Pratt,Member
Ernest Christian,Alternate
Diane Royal, Alternate
Page 89 Board Minutes
October 27, 1997
RESOLUTIONS
RESOLUTION HONORING JOHN STROLLE
WHEREAS, As he brings to a close his exceptional service as Commissioner of the Board of Water and Light,it is
a pleasure to extend our congratulations to R_ John Strolle. Over his past nine years of impeccable service to the
customers of the Board of Water and Light, he has set standards of fiduciary responsibility, integrity and
effectiveness that are most deserving of formal acknowledgment;and
WHEREAS, It is most apparent that John sincerely cares about the employees and the customer owners who are
served by the Board of Water and Light. Beginning with his appointment to the Board on May 31, 1988, John has
contributed leadership over the years in a variety of matters affecting this utility. Especially noteworthy is his near
perfect attendance record of having missed only one Board meeting during his tenure. He ends his year as the
Chair Pro Tem of the Board and the Chair of the Personnel Committee; and
WHEREAS, With all 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 his peers and all who have had the good fortune of knowing John; and
WHEREAS,We are confident that his unwavering commitment to the Board of Water and Light and the City of
Lansing will continue to be manifested in many ways; and
WHEREAS, Respected as the owner of J. Strolle Gentlemen's Attire," he brought real class to the boardroom. It
is seldom we see a person as well"suited''to his career spanning forty years as John is in the men's clothing
business. A strong commitment to quality and personal service are keys to his success.
IT IS RESOLVED,That tribute be accorded to honor and thank R_ John Strolle as he brings to a close his efforts
with the Board of Commissioners of the Board of Water and Light. In regular session this 27th day of October,
1997, we wish John, his lovely wife, Deanna, and his family the very best and well-deserved happiness and
fulfillment.
MOTION: On motion of Commissioner Werbelow, seconded by Commissioner Pratt,Resolution 97-10-4 was
approved by the following vote:
YEAS: Aquilina, Christian, Creamer, Graves,O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
GENERAL MANAGER'S REMARKS
Power Outage Due to Snowstorm. General Manager Pandy reported on power restoration efforts following the
October 27 snowstorm that dumped three inches of wet snow dragging tree limbs onto power lines and knocking
out electricity for nearly 23,000 BWL customers. The Commissioners were given a handout listing outage areas
that continue to exist and areas expected to be back on between present and the next day. The storm was
particularly devastating due to the fact that leaves were still on trees,causing tree limbs to break and fall due to the
added weight. Mr. Pandy reported that ten line crews have been working around the clock, three crews from other
utilities were brought in,plus six BWL crews, and fourteen additional service crews from electrical contractors.
Nelson Tree Service,which services the BWL, increased their help from six to ten crews. A total of 22 spotting
crews were in operation, identifying trouble and reporting it back in. Hundreds of employees and other people
worked all night answering phones. Mr. Pandy noted that the phone system is still not working well and that
clearly there is a need to accelerate the acquisition of new phone equipment to improve the response time on
Board Minutes Page 90
October 27, 1997
t
answering phones. Calls reporting downed wires were given priority as well as customers on life support systems.
Customers were kept informed of restoration efforts through communications with the news media.
The Board discussed the need to accelerate publicity on the importance of keeping trees trimmed to reduce power
outages caused by fallen limbs. Mr. Pandy agreed to include information on this topic in a future Connections
newsletter. Employees were saluted for their outstanding work in responding to outage emergencies.
GM Steam Main Status Report. A memo from Steam Utility Director Joette Woodard-Yank, dated October 27,
1997 regarding the General Motors(GM)20 inch Steam Main Project was handed out for information. Mr.Pandy
gave an overview of the overall project time line. The project rework is progressing well, given the magnitude of
the work being undertaken. Joette Woodard-Yauk was present to respond to questions relative to the general
project schedule with Pipe Systems, Inc. and project cost estimates.
Adopt A River Cleanup. A thank you letter from Michael A. Sanders of Woldurnar Nature Center, dated
October 21, 1997, was handed out. Mr. Sanders' letter expresses gratitude for the BWL's Construction Services
Department's(CSD)involvement in the September 20, 1997, Adopt A River cleanup. Communications Director
John Strickler and CSD Shops Supervisor Calvin Jones were acknowledged for leading the efforts for the BWL.
REMARKS BY COMMISSIONERS
Commissioner Werbelow requested an overview on how an alliance with Wisconsin Power&Light(WP&L)to
provide coal transfer services is supposed to work and how it could benefit the BWL.
General Manager Pandy reported that WP&L and others, including Detroit Edison's coal subsidiaries,are
investigating the feasibility of selling all kinds of energy. WP&L has been prospecting for other utilities and
industrial customers in Michigan who would benefit from the less expensive Western fuels. Mr. Pandy commented
that WP&L can supply coal to Michigan in unit trains(100--ar trains)at a favorable price,however,distributing
coal in smaller amounts to smaller users becomes a problem. WP&L proposes utilizing Erickson Station as a
distribution hub for Powder River Basin(PRB)coal. An estimated 200,000 tons per year could transfer from rail
delivery to storage and to trucks for distribution in Michigan at a profit for the BWL. Staff is negotiating capital
investment issues with WP&L. Details of the BWL's proposal are outlined in a letter to WP&L, dated October 15,
1997.
Commissioner Creamer commented that he recently had a positive discussion with BWL employee Mike Stanley
on.the BWL's involvement with the School for Managing. Commissioner Creamer asked for additional
information on the program.
General Manager Pandy responded that Mike Stanley is a union employee with the BWL and is among ten
employees from management and union, attending the School for Managing(SFM)in Jackson,Michigan. The
SFM team has been learning first hand from world experts on how to change the culture of a company to become
more focused on customers and quality. The SFM team has been instrumental in sharing their knowledge on how
to improve our processes to become a better competitor. Mr. Pandy noted that the City of Lansing is planning to
send a team of employees to the SFM's next session.
Commissioner Werbelow noted that he recently listened to a TV program featuring the State Journal interview of
one of the candidates running for office. This particular candidate gave the impression that the study the City
Council is considering on the evaluation of the BWL is a joint effort between the BWL and the City Council.
Commissioner Werbelow expressed concern since the Board does not have a vote on whether the study is
necessary, the scope of the study and how it is to be done. The candidate also claimed that the BWL has excessive
*r¢ert•rc -rl chnnld itc rntrc tl,- candidate glcn ctated that hecai.ise the 9VV1_ hRS e.\ccss«'ater
Pase 91 Board Minutes
October 27, 1997
capacity, rates should be discounted to industrial customers. Commissioner Werbelow noted that at some point in
time the BWL should address these issues so that the public knows the position of the Board.
Commissioner Graves reminded that at the September 30 Board meeting, he requested information on the BWL's
contractual services with women and minority-owned firms. He asked for a time frame as to when this report will
be available.
General Manager Pandy stated that the Purchasing Department has been preparing this information and will have
it available at the next Committee of the Whole meeting.
Commissioner Pratt commended the BWL on reaching its United Way Campaign contribution goal of$100,000.
Chairperson Christian reminded the Commissioners of Public Power Week to be held November 10-13. He
encouraged everyone to show support by attending the planned activities.
PUBLIC COMMENTS
CHAIRPERSON CHRISTLA.N ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
No absences.
ADJOURNMENT
On motion by Commissioner Aquilina, the Board adjourned at 6:23 p.m.
A a'��&W,
Mary E. S Secretary
Filed: October 31, 1997
Marilynn Slade, City Clerk
Page 86
MINUTES OF BOARD OF COMMISSIONERS'MEETING
`�
LANSING BOARD OF`WATER AND LIGHT
LA WISIi;G ru'll T Y CLERI( Tuesday, October 27, 1997
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 the Chair,Ernest Christian.
Present: Commissioners Aquilina, Creamer, Christian, Graves, O'Leary,Pratt,Royal, and Werbelow.
Absent: None
The Secretary declared a quorum present.
The invocation was delivered by the Chair.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Commissioner Werbelow referred to page 82 of the September 30, 1997 minutes, the section under General
Manager's Remarks, regarding the Sale of the Main Office Building,first sentence of the second paragraph. He
proposed that the sentence be corrected by striking out three words,and to read as follows: "Following discussion,
the Commissioners agreed on the need for a definitive answer in writing from the deveieper 0,- tenant
indicating an intent to proceed with the project.
MOTION: There being no objection, Commissioner Werbelow moved the approval of the minutes, as
corrected, of rescheduled meeting held September 30, 1997.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE
BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF THE
MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications.
REPORTS OF COMMITTEES
No committee reports.
Page 87 Board Minutes
October 27, 1997
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No. 97-10-2
RESOLVED, That the issuance of Purchase Orders be authorized to the following Consultants for
providing Professional Services for process redesign and implementation.
1. Prism Performance Systems, Farmington Hills, Michigan for providing assistance in process
definition and improvement including assisting in the planning and facilitating of employee
participation conferences.
2. Emergent Systems, Brighton, Michigan for providing assistance in Human Resource issues.
Consulting services will be provided on a hourly/daily rate plus actual expenses.
Several Consultants were contacted and these were the only two with experience in these areas which could
meet the time schedule for the process redesign and implementation. Both firms have provided consulting
services to the Board in the past.
MOTION: On motion of Commissioner O'Leary, seconded by Commissioner Royal,Resolution 97-10-2 was
approved by the following vote:
YEAS: Aquilina, Christian, Creamer, Graves, O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
Res. No. 97-10-3
WHEREAS, Copies of the 1997 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, LLP on September 22, 1997.
WHEREAS, The audit report for the Board of Water and Light and the report on the system of internal
control is hereby received and referred to the Finance Committee. The auditors found no significant items
that warranted submission of a management letter.
WHEREAS, The 1997 audit report for the Plan for Employees' Pensions has been received and reviewed
by the Pension Plan Trustees.
RESOLVED, That the Corporate Secretary be 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 State Journal is not
required by law. However, it may be done at the discretion of the General Manager.
--------------------
Board Minutes Page 88
October 27, 1997
MOTION: On motion of Commissioner Werbelow, seconded by Commissioner Pratt,to table Resolution
97-10-3 until the Finance Committee has reviewed the audit report.
Approved by the following vote:
YEAS: Aquilina, Christian, Creamer, Graves,O'Leary, Pratt, Royal, Werbelow
NAYS: None
ABSENT: None
UNFINISHED BUSINESS
Office Building Status. Commissioner O'Leary reported that the deadline for the State of Michigan to receive
bids on their request for proposals for space to relocate offices for the House of Representatives is October 27. Bids
are expected to be opened on October 28.
Ottawa Station Update. General Manager Pandy reported that requests for proposals for equipment removal and
salvage bids for the Ottawa Station are due November 11. Staff will be presenting a preliminary cost analysis
report at the Committee of the Whole meeting scheduled for November 11. Mr. Pandy also reported that he
contacted Thomas Coates soon after the September 30, 1997, regular meeting to communicate the Board's decision
on authorizing the Sony Market Study on the feasibility of a theater complex(per Board Resolution 97-9-8). The
written communication to Mr. Coates indicated that the Board would expect to receive a copy of Sony's written
analysis by January 1, 1998. Mr. Coates did confirm that the January 1, 1998, deadline was an adequate amount of
time to complete the study.
NEW BUSINESS
Chairperson Christian announced the standing committee assignments for Fiscal Year 1997-98:
EXECUTIVE COMMITTEE: Ernest Christian, Chair
Diane Royal, Vice Chair
Peter Pratt, Chair Pro Tem.
FINANCE COMMITTEE: Diane Royal, Chair
Ernest Christian,Member
Charles Creamer,Member
Jud Werbelow,Member
Rosemarie Aquilina,Alternate
David O'Leary, Alternate
PERSONNEL CONRVE[TTEE: David O'Leary, Chair
Rosemarie Aquilina,Member
Joseph Graves, Jr., Member
Peter Pratt,Member
Ernest Christian, Alternate
Diane Royal,Alternate
Page 89 Board Minutes
October 27, 1997
RESOLUTIONS
RESOLUTION HONORING JOHN STROLLE
WHEREAS. As he brings to a close his exceptional service as Commissioner of the Board of Water and Light,it is
a pleasure to extend our congratulations to R John Strolle. Over his past nine years of impeccable service to the
customers of the Board of Water and Light, he has set standards of fiduciary responsibility, integrity and
effectiveness that are most deserving of formal acknowledgment; and
WHEREAS, It is most apparent that John sincerely cares about the employees and the customer owners who are
served by the Board of Water and Light. Beginning with his appointment to the Board on May 31, 1988, John has
contributed leadership over the years in a variety of matters affecting this utility. Especially noteworthy is his near
perfect attendance record of having missed only one Board meeting during his tenure. He ends his year as the
Chair Pro Tem of the Board and the Chair of the Personnel Committee; and
WHEREAS,With all 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 his peers and all who have had the good fortune of knowing John; and
WHEREAS, We are confident that his unwavering commitment to the Board of Water and Light and the City of
Lansing will continue to be manifested in many ways;and
WHEREAS, Respected as the owner of"J. Strolle Gentlemen's Attire," he brought real class to the boardroom. It
is seldom we see a person as well"suited"to his career spanning forty years as John is in the men's clothing
business. A strong commitment to quality and personal service are keys to his success.
IT IS RESOLVED,That tribute be accorded to honor and thank R. John Strolle as he brings to a close his efforts
with the Board of Commissioners of the Board of Water and Light. In regular session this 27th day of October,
1997, we wish John, his lovely wife,Deanna, and his family the very best and well-deserved happiness and
f i fillment.
MOTION: On motion of Commissioner Werbelow, seconded by Commissioner Pratt, Resolution 97-10-4 was
approved by the following vote:
YEAS: Aquilina, Christian, Creamer, Graves,O'Leary, Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
GENERAL MANAGER'S REMARKS
Power Outage Due to Snowstorm. General Manager Pandy reported on power restoration efforts following the
October 27 snowstorm that dumped three inches of wet snow dragging tree limbs onto power lines and knocking
out electricity for nearly 23,000 BWL customers. The Commissioners were given a handout listing outage areas
that continue to exist and areas expected to be back on between present and the next day. The storm was
particularly devastating due to the fact that leaves were still on trees,causing tree limbs to break and fall due to the
added weight. Mr.Pandy reported that ten line crews have been working around the clock,three crews from other
utilities were brought in,plus six BWL crews, and fourteen additional service crews from electrical contractors.
Nelson Tree Service, which services the BWL, increased their help from six to ten crews. A total of 22 spotting
crews were in operation, identifying trouble and reporting it back in. Hundreds of employees and other people
worked all night answering phones. Mr.Pandy noted that the phone system is still not working well and that
clearly there is a need to accelerate the acquisition of new phone equipment to improve the response time on
Board Minutes Page 90
October 27, 1997
answering phones. Calls reporting downed wires were given priority as well as customers on life support systems.
Customers were kept informed of restoration efforts through communications with the news media.
The Board discussed the need to accelerate publicity on the importance of keeping trees trimmed to reduce power
outages caused by fallen limbs. Mr. Pandy agreed to include information on this topic in a future Connections
newsletter. Employees were saluted for their outstanding work in responding to outage emergencies.
GM Steam Main Status Report. A memo from Steam Utility Director Joette Woodard-Yauk, dated October 27,
1997 regarding the General Motors(GM)20 inch Steam Main Project was handed out for information. Mr.Pandy
gave an overview of the overall project time line. The project rework is progressing well, given the magnitude of
the work being undertaken. Joette Woodard-Yauk was present to respond to questions relative to the general
project schedule with Pipe Systems, Inc. and project cost estimates.
Adopt A River Cleanup. A thank you letter from Michael A. Sanders of Woldtunar Nature Center, dated
October 21, 1997,was handed out. Mr. Sanders' letter expresses gratitude for the BWL's Construction Services
Department's (CSD) involvement in the September 20, 1997, Adopt A River cleanup. Communications Director
John Strickler and CSD Shops Supervisor Calvin Jones were acknowledged for leading the efforts for the BWL.
REMARKS BY COMMISSIONERS
Commissioner Werbelow requested an overview on how an alliance with Wisconsin Power&Light(WP&L)to
provide coal transfer services is supposed to work and how it could benefit the BWL.
General Manager Pandy reported that WP&L and others,including Detroit Edison's coal subsidiaries, are
investigating the feasibility of selling all kinds of energy. WP&L has been prospecting for other utilities and
industrial customers in Michigan who would benefit from the less expensive Western fuels. Mr. Pandy commented
that WP&L can supply coal to Michigan in unit trains(100-car trains)at a favorable price, however,distributing
coal in smaller amounts to smaller users becomes a problem. WP&L proposes utilizing Erickson Station as a
distribution hub for Powder River Basin(PRB)coal. An estimated 200,000 tons per year could transfer from rail
delivery to storage and to trucks for distribution in Michigan at a profit for the BWL. Staff is negotiating capital
investment issues with WP&L. Details of the BWL's proposal are outlined in a letter to WP&L, dated October 15,
1997.
Commissioner Creamer commented that he recently had a positive discussion with BWL employee Mike Stanley
on the BWL's involvement with the School for Managing. Commissioner Creamer asked for additional
information on the program.
General Manager Pandy responded that Mike Stanley is a union employee with the BWL and is among ten
employees from management and union, attending the School for Managing(SFM)in Jackson,Michigan. The
SFM team has been learning first hand from world experts on how to change the culture of a company to become
more focused on customers and quality. The SFM team has been instrumental in sharing their knowledge on how
to improve our processes to become a better competitor. Mr. Pandy noted that the City of Lansing is planning to
send a team of employees to the SFM's next session.
Commissioner Werbelow noted that he recently listened to a TV program featuring the State Journal interview of
one of the candidates running for office. This particular candidate gave the impression that the study the City
Council is considering on the evaluation of the BWL is a joint effort between the BWL and the City Council.
Commissioner Werbelow expressed concern since the Board does not have a vote on whether the study is
necessary, the scope of the study and how it is to be done. The candidate also claimed that the BWL has excessive
^-en•e,Z qnd rbonld lover its rare Finally 0— candidate also stated that because the BWL has excess water
Page 91 Board Minutes
October 27, 1997
capacity, rates should be discounted to industrial customers. Commissioner Werbelow noted that at some point in
time the BWL should address these issues so that the public knows the position of the Board.
Commissioner Graves reminded that at the September 30 Board meeting, he requested information on the BWL's
contractual services with women and minority-owned firms. He asked for a time frame as to when this report will
be available.
General Manager Pandy stated that the Purchasing Department has been preparing this information and will have
it available at the next Committee of the Whole meeting.
Commissioner Pratt commended the BWL on reaching its United Way Campaign contribution goal of$100,000.
Chairperson Christian reminded the Commissioners of Public Power Week to be held November 10-13. He
encouraged everyone to show support by attending the planned activities.
PUBLIC COMMENTS
CHAIRPERSON CHRISTIAN ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
No absences.
ADJOURNMENT
On motion by Commissioner Aquilina, the Board adjourned at 6:23 p.m.
A 04,
'e�
Lva,
Mary E. S Secretary
Filed: October 31, 1997
Marilynn Slade, City Clerk
P
Page 72
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT -
rr
Tuesday,September 30, 1997
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 the Chair,David O'Leary.
Present: Commissioners Christian, Graves,O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: None
The Secretary declared a quorum present.
The invocation was delivered by the Chair.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
MOTION: On motion of Commissioner Christian and seconded by Commissioner Strolle,that the minutes
of regular meeting of August 26, 1997,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIR O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE
BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE
MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications.
REPORTS OF COMMITTEES
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on September 4, 1997,to receive the following documents for review and
discussion:
1. Pension Plan documents, and
2. Performance appraisal results for the three staff positions reporting to the Board.
Board Minutes Page 73
September 30, 1997
Present were Commissioners Strolle as chair, Graves,O'Leary and Pratt.
Pension Plan Documents. The Commissioners received the following Board of Water and Light Pension Plan
documents prior to the meeting for review and discussion:
• Defined Benefit Plan and Summary Description as of December 1, 1997
• Defined Contribution Plan and Summary Description as of December 1, 1997
• Defined Contribution Plan Trust Agreement
Treasurer/Controller Dana Tousley presented a comparative summary of changes made to the Defined Benefit
Pension Plan. He reported that some of the changes came about as a result of union negotiations;some were made
to make the Plan as comparable as possible to the new Defined Contribution Plan; and others were made to comply
with governmental pension plan requirements.
The features of the Defined Contribution Plan were also reviewed and discussed.
The Personnel Committee recommends, adoption of the following resolution:
AUTHORIZATION TO ESTABLISH THE
EMPLOYEES'DEFINED CONTRIBUTION PENSION TRUST PLAN
(Resolution 97-9-1)
WHEREAS, the Board of Water and Light Commissioners on November 26, 1996, (Resolution 96-11-8)adopted,
subject to legal review, a new Defined Contribution Pension Plan effective July 1, 1996,and expiring June 30,
2002, and
WHEREAS, the new Defined Contribution Plan requires a trust be created to receive employer contributions and
hold employee assets.
IT IS RESOLVED, That the Employees'Defined Contribution Pension Trust Agreement, a copy of which is
attached to these minutes,is adopted and the Employees' Defined Contribution Pension Trust is established and
shall be administered according to the trust agreement.
---------------------
MOTION: Commissioner Royal moved, seconded by Commissioner Christian,to approve Resolution
97-9-1 (Employees' Defined Contribution Pension Trust Plan)as presented.
Adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
Performance Appraisals. The Personnel Committee met with Steve Pollo,Human Resources
Employment/Compensation Administrator,to review the results of job performance appraisals for the three
appointed staff positions.
Page 74 Board Minutes
September 30, 1997
The Personnel Committee recommends adoption of the following resolution:
RESOLUTION AUTHORIZING PERFORMANCE APPRAISALS
RECOMMENDED BY PERSONNEL COMMITTEE
(Resolution 97-9-2)
WHEREAS,performance appraisals and salary increases for the three positions reporting to the Board are
administered according to the Board of Water and Light wage and salary plan for non-bargaining unit
administrative employees;be it
IT IS RESOLVED, That the General Manager, Corporate Secretary and Internal Auditor are eligible to receive
salary increases effective as of July 1, 1997, according to the 1996-97 Performance Increase Matrix;and
RESOLVED FURTHER, That the ratings for the three persons reporting to the Board be hereby confirmed and
approved as follows:
Name Rating Range
General Manager Joseph Pandy,Jr. - Meets or exceeds performance expectations
Corporate Secretary Mary Sova - Meets or exceeds performance expectations
Internal Auditor Kellie Willson - Significantly exceeds performance expectations
Respectfully submitted,
John Strolle, Chair
Joseph E. Graves, Jr.
David O'Leary
Peter P. Pratt
PERSONNEL COMMITTEE
MOTION: Commissioner Strolle moved, seconded by Commissioner Royal,to approve the Personnel
Committee Report, including 97-9-2(Performance Appraisals), as presented.
Adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
COMMITTEE OF THE WHOLE REPORT
(97-9-3)
The Committee of the Whole met on September 16, 1997, at 5:30 p.m. to receive status reports on electric utility
deregulation and other matters of importance to the Commissioners.
Present were Commissioners O'Leary,Pratt,Royal, Strolle, and Werbelow.
Excused absences: Commissioners Christian and Graves.
Board Minutes Page 75
September 30, 1997
Electric Utility Deregulation. Bill Cook,Director of Electric System Support Division,presented a chronology of
key events that have occurred on electric utility restructuring since the Board's last update in June, 1997. He
reported that Senator Mat Dunaskiss is prepared to introduce legislation on electric restructuring at the onset of the
Fall legislative session to begin September 23, 1997. Other reports and issues reviewed included:
• A comparison of the Pro-Competition Coalition Bill with the Michigan Public Service Commission(MPSC)
Restructuring Order, dated June 5, 1997.
• Delivery Service Territory
• Stranded Cost Recovery
John Davis and Ralph Ostling,representing Kheder and Associates,presented an overview of their activities in
assisting the BWL with representation before the Michigan Legislature on electric restructuring issues.
An action plan detailing BWL government relations strategy over the course of the next several months to address
electric industry restructuring concerns was handed out for review. Following discussion,the Commissioners
expressed their interest in taking a more active role in meeting with legislators to convey the BWL's position on
electric deregulation. Senator Dianne Byrum's efforts in becoming well informed on electric restructuring issues
were recognized by the Commissioners, and a letter conveying the Board of Water and Light's appreciation is
being sent to her.
Other matters before the Committee of the Whole included:
Main Office Building Sale. A letter from Capitol Annex,L.L.C. , dated September 10, 1997,was received
regarding the status of negotiations in securing a tenant for the BWL main office building. This matter was
deferred until such time that the developer and the City have discussed details of the agreement.
City Study of BWL. The City is finalizing the scope of their study of the BWL. As currently written,Phase I of
the study would be a competitive assessment of the electric utility. All four phases of the study would cost an
estimated$250,000 in labor plus expenses.
Rotary Tower Dedication. The Commissioners were invited to attend the Rotary Tower dedication on September
19. The Rotary Tower(steam clock)is a$150,000 gift to the City of Lansing financed entirely by donations from
members of the Rotary Club of Lansing.
Ottawa Station Development Negotiations. The Commissioners discussed the merits of meeting with Thomas J.
Coates on September 19 due to recent developments on the loss of his financial backing,per letter received from
Waycor Corporation(a Barden Affiliate), dated August 27, 1997. Following discussion,there was consensus that
the decision should be left to the"Special Committee on Ottawa" as to whether or not the meeting with Mr. Coates
should be held. Commissioner Werbelow suggested that due to time demands and development complexities of
projects of this type, he would prefer engaging the services of a consultant to coordinate the project development
instead of burdening staff with additional responsibilities. This matter will be discussed further at a future date.
Status of General Motors' (GM)20" Steam Main. Steam Utility Director Joette Woodard-Yauk presented an
update on problems encountered with Pipe Systems,the company contracted to design and build the steam main
project to serve GM's Verlinden Street Body Plant. The following documents were handed out and reviewed:
• Copy of a memo to General Manager Pandy from Joette Woodard-Yauk,dated September 16, 1997,
summarizing the status of GM's Steam Main.
• Schematic of the underground portion of the steam line, experiencing joint problems.
• Summary report on the expansion joints, location,type,field observations, alignment data,joint damage, etc.
Page 76 Board Minutes
September 30, 1997
Ms. Woodard-Yauk briefed the Commissioners on discussions held between the BWL and Pipe Systems to keep
them on the job. She reported that to date negotiations to resolve differences relative to engineering design issues
and the schedule proposed for the redesign work and project completion have been unsuccessful. Known exposures
to date for the BWL were reviewed.
Staff reported that the BWL is prepared to take over the project if Pipe Systems shows no action within the next
couple of days. Following lengthy discussion, the Commissioners concurred that the first priority is to serve the
customer and to honor the agreement with GM. The Commissioners supported staffs proposal to retain one or
more substitute contractors to complete the construction project,with construction management to be handled by
the Project Engineering Department. This is an alternative if staff determines that further efforts to attempt to
utilize Pipe Systems to complete the project are unproductive.
Respectfully submitted,
John Strolle, Chair Pro Tem
Committee of the Whole
Commissioner Strolle reported on the most recent development between the BWL and Pipe Systems since the
Committee of the Whole Report was written. He noted that Agreement has been reached with Pipe Systems,Inc.
for completion of the Steam Pipeline Interconnect to GM Plant#6. The BWL and Pipe Systems have signed a
Memorandum of Understanding which resolves the various issues. Pipe Systems is proceeding to make
modifications to the system under the design direction of Stanley Consultants.
Steam Utility Director Joette Woodard-Yauk also reported that the Memorandum of Understanding has been an
effective means to achieve the BWL's primary goal of completing the project quickly and providing steam service
to GM at the earliest possible date.
MOTION: Commissioner Strolle moved, seconded by Commissioner Christian,to accept the Committee of
the Whole Report as presented.
Adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
GENERAL MANAGER'S RECOMMENDATIONS
ADMMSTRATION
Res.No. 97-9-4
WHEREAS, Andrew Andersen and Helen M. Andersen, executed a certain easement, dated June 10, 1952,
conveying and warranting to the Board of Water and Light(BWL)forever, such rights as recorded in Liber 53 of
Miscellaneous Records,Pages 323-324, in the Register of Deeds, Ingham County,Michigan, and
Board Minutes Page 77
September 30, 1997
WHEREAS, Foster, Swift, Collins&Smith, representing 3500 South MLK,LLC, Owner of part of Block 3500
South Martin Luther King Boulevard, City of Lansing, has requested the release of said easement, more
specifically described as follows:
Beginning at a point of the south Right of Way line of Holmes Road, 195.64 feet west and 33 feet
south of the North 1/8 post of the northeast 1/4 of Section 32,Lansing Township,T4N,R2W,
Ingham County,Michigan. Thence South 627.0 feet to a point on the south property line 204.33
feet west of the centerline of Logan Street, thence west 20.0 feet,thence north 627.0 feet to the
south Right of Way line of Holmes Road,thence east 20.0 feet along said line to point of
beginning.
WHEREAS,this easement as specifically described above is not needed to continue the operations of the BWL,and
WHEREAS, 3500 South MLK,LLC(Owner)has agreed to grant a new easement to the BWL in exchange of the
existing easement, subject to acceptance by the BWL,and
WHEREAS, execution of the replacement easement by 3500 South MLK,LLC is deemed a condition precedent to
the BWL's declaration above that its easement is unnecessary for BWL purposes.
IT IS RESOLVED,That the Board release, discharge and vacate said easement on the above described property,
and that the General Manager and Corporate Secretary be authorized to enter into agreement for the release of
easement, subject to the requirements of State Law,the Lansing City Charter and Codified Ordinances and
conditioned upon the granting of a replacement easement. Further that the Corporate Secretary be directed to
record the release of easement with the Ingham County Register of Deeds.
RESOLVED FURTHER, That in consideration of this exchange, 3500 South MLK,LLC has agreed to provide a
replacement easement described as follows:
PROPERTY DESCRIPTION:
That part of the north 1/2 of the northwest 1/4 of the northeast 1/4 of Section 32, T4N,R2W,
City of Lansing, Ingham County,Michigan described as: Commencing at the north 1/4 comer of
Section 32, T4N, R2W, City of Lansing, Ingham County,Michigan;thence N 89°48'18" W
88 1.10 feet along the north line of said Section 32,to the point of beginning of the following
described parcel;thence S 00°20'42" W 243.00 feet parallel with the east 1/8 line of the
northeast 1/4 of said Section 32; thence N 89°48'18"W 250.00 feet parallel with the north line
of said Section 32;thence S 00°20'42" W 418.47 feet to the north line of the Plat of Montclair
No. 1,recorded in Liber 16 of Plats,Page 46;thence along the north line and extension of said
line S 89°56'45"E 695.71 feet to the east 1/8 line of the northeast 1/4 of said Section 32;thence
N 00020'42"E 496.76 feet along said 1/8 line to a point S 00°20'42" W 163.00 feet from the
north 1/8 corner of the northeast 1/4 of said Section 32;thence N 89°48'18" W 172.00 feet;
thence N 00°20'42"E 130.00 feet;thence N 89°48'18"W 73.70 feet;thence N 00°20'42"E
33.00 feet to the north line of said Section 32;thence N 89°48'18" W 200.00 feet to the point of
beginning. Containing 8.457 acres more or less,and being subject to all easements and
restrictions of record.
EASEMENT DESCRIPTION:
The south 15 feet of the above described property.
Page 78 Board Minutes
September 30, 1997
The owner of the property requests the abandonment of this easement to remove an encumbrance created by the
existing easement located down the center of the parcel, including a building standing over the easement. The
existing easement was not utilized or required. The BWL's current and new facilities will be located within the
new easement.
Res. No. 97-9-5
WHEREAS, on July 25, 1995 (Resolution 95-7-3), the Board declared real property commonly known as 1020
Filley Street,Lansing as surplus and not required for Board of Water and Light(BWL)operations,and
WHEREAS, the property is being purchased by the adjoining property owner,Maurer Enterprises,Inc.,to
maintain access and allow for future expansion of the business,and
WHEREAS, the City of Lansing Assessor's Office has advised us that a discrepancy exists in the description of the
adjoining properties such that the BWL may be deemed to have an interest in the parcel described below,and
WHEREAS, since the BWL is one of three parties involved in the conveyance of above-mentioned parcel
pursuant to previous deeds that were recorded, it may have an interest in the 10.8 foot strip of property,which is
not needed for its operations.
IT IS RESOLVED,That the following described 10.8 foot parcel of property be declared as surplus and not
required for BWL Operations:
PROPERTY DESCRIPTION:
A parcel of land in the Southeast one-quarter of the Northeast one-quarter of Section 5, T4N,
R2W, City of Lansing, Ingham County,Michigan,described as:
Commencing at the intersection of the West line of Lot 8,Plat of Scott Subdivision and the
Northerly line of Filley Street,thence North 205 feet more or less, along said West line Lot 8 to a
point 150.07 feet South of the Northwest corner said Lot 8,thence West 210.8 feet,thence South
83.17 feet to the Northerly line of said Filley Street,thence Southeasterly 245 feet more or less
along the Northerly line of Filley Street to the place of beginning;excepting the East 200 feet
thereof.
RESOLVED FURTHER,That a Quit Claim deed be provided to Maurer Enterprises,Inc. conveying the above
described parcel.
RESOLVED FURTHER,That the General Manager and Corporate Secretary be authorized to enter into agreement
for the disposition of this property, subject to the requirements of State Law,the Lansing City Charter and
Codified Ordinances.
The BWL is interested in assisting Maurer Enterprises to resolve the measurement discrepancy problem without
having to file a quiet title action. Specifically, there seems to have been a general underestimation of the sizes of
the parcels in this vicinity. The City of Lansing bought a 200 foot parcel from the Township of Lansing in 1982,
Board Minutes Page 79
September 30, 1997
Liber 1388, page 602. The City sold the west 100 feet of that to the BWL in 1985 (Liber 1520,page 1279),and
the East 100 feet of the 200 feet to Maurer Enterprises in 1994 (Liber 2209,page 883). The problem arises with a
1988 survey along the North line of the former fire station performed by a survey performed by Fred White Survey
Engineering Company,which states the dimension is 210.8 feet, leaving a gap of 10.8 feet in between the as-
surveyed"gravel" drive and the west property line of the land conveyed to the BWL by the City of Lansing in
1985. The owner,Lawrence Maurer,is also attempting to obtain quit claim deeds from the Township of Lansing
and the City of Lansing.
In addition, this resolution will allow the Contract for Sale of Real Estate between the BWL and Maurer
Enterprises, Inc. that is pending to be executed.
MOTION: On motion of Commissioner Christian, seconded by Commissioner Strolle,Resolutions 97-9-4
and 97-9-5 were approved by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Pratt,Royal,Werbelow
NAYS: None
ABSENT: None
ELECTRIC PRODUCTION
Res. No. 97-9-6
RESOLVED,that the current Chemical Commodity Supplier and Chemical Consultant Agreement with Betz
(Eckert and Moores Park Stations)and Nalco(Erickson Station)be extended for three years, July 1, 1998 to June
30, 2001. This will minimize BWL exposure to price increases.
The current agreements,which expire June 30, 1998,held fixed prices for all three years and were awarded based
on lowest and best evaluated bids. These suppliers have done commendable consulting work, and would extend
contracts based on weighted average price increases of 1.69%per year,below the average annual inflation rate of
3%.
--------------------
ol
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-9-6
was approved by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
Page 80 Board Minutes
September 30, 1997
TREASURER/CONTROLLER
Res. No. 97-9-7
RESOLVED, That the Lansing Board of Water and Light Employees' Defined Contribution Pension Plan Funding
Policy Statement with attached Schedule A is hereby adopted effective December 1, 1997; and
FURTHER RESOLVED, That the Treasurer/Controller and Chief Financial Officer of the Lansing Board of Water
and Light is authorized to act in accordance with Section IV of said Investment Policy Statement with regard to
specific participant investment options available under the Lansing Board of Water and Light Employee's Defined
Contribution Pension Plan; and
FURTHER RESOLVED, That the General Manager and the Corporate Secretary of the Board of Commissioners
are authorized to execute said Funding Policy Statement and Schedule A on behalf of the Lansing Board of Water
and Light.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian, to approve Resolution
97-9-7.
General Accounting Manager David Cluley reviewed the process by which employees will receive information on
the Defined Benefit Pension Plan and the Defined Contribution Pension Plan. The BWL is sponsoring mandatory
classes in October to educate all employees on the differences between the two pension plans. Employees will have
until November 21, 1997, to analyze the information--individually or with their financial consultant--and notify
management if they wish to convert to the Defined Contribution Pension Plan. The Board emphasized the
importance for employees to receive adequate information on the investment option selection process and the
attributes of both plans.
Adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
UNFINISHED BUSINESS
Chairman O'Leary reported that the previous Nominating Committee appointed on May 20, 1997, is being
dissolved, and a new committee is being appointed to nominate Board officer candidates for Fiscal Year 1997-98.
New members are:
Commissioners Jud Werbelow(chair), Joseph Graves, and Peter Pratt.
The Nominating Committee was requested to present their slate of officers at a Special Board Meeting to be held
October 14, 1997,for consideration.
s
Board Minutes Page 81
September 30, 1997
NEW BUSINESS
Ottawa Station Development. Commissioner Christian, Chairperson of the Ottawa Station Development Special
Committee,presented a report on their meeting with developer Thomas J. Coates on September 19, 1997. In
summary,Mr. Coates is still proposing a mixed use development with the same proposed tenants(hotel, sports bar,
theater complex, health club,as well as a separate residential development. A significant change discussed by Mr.
Coates is that he has an undisclosed equity source to stand in the stead of the Barden group. Several questions Mr.
Coates had for the committee dealt with the availability of the land, subordination of the ground lease, and
environmental issues upon the property. Mr. Coates indicated that the Magic Johnson Group is still interested as a
partner in the Ottawa Station development. Magic Johnson sees at least two leasing opportunities: (1)the theater
complex conditioned on a favorable feasibility study by Sony and(2)the sports bar conditioned on the feasibility of
the theater complex. These two leases would provide Mr. Coates with 30 percent occupancy pre-leasing,which
would render the project viable.
The Board engaged in lengthy discussion regarding two important phases involved in the redevelopment of the
Ottawa Station:
Phase 1: Equipment Removal and Salvage. General Manager Pandy distributed copies of a tabulation compiled
in June 1995 of bids received on equipment removal and salvage within the walls of the Ottawa Station. Following
discussion, there was Board concurrence for staff to seek new bids on removal of equipment and salvage of the
building. Staff is to report back at the next Board meeting.
Phase 2: Development of Master Plan. In the event the theater marketing study is negative, General Manager
Pandy suggested a conceptual contingency plan as a development alternative for the Ottawa Station starting with a
top,down approach. The BWL would essentially take responsibility for developing the building,and would
commit to occupying the top floor with up to 6,000 square feet for office space. Also,the BWL would negotiate
leases with businesses that have previously indicated an interest in the project for space on the several top floors.
Following discussion, staff was directed to prepare a comprehensive report for review and consideration at the next
Board meeting detailing a comparative cost analysis on issues such as:
1. Ramification on the budget and rates(if any)
2. Leaving the building as is
3. Equipment removal and salvage
4. Schedule
5. Grant eligibility for environmental remediation of the property
6. Contingency plan costs and possible alternatives(beyond the demolition)
MOTION: On motion of Commissioner Werbelow, seconded by Commissioner Pratt:
Authorization for Thomas J. Coates
to Proceed with the Sony Market Study
(Resolution 97-9-8)
RESOLVED,That the Board hereby wishes to advise Thomas J. Coates to proceed with the Sony review on the
feasibility of the theater complex. The Board would expect to receive a copy of Sony's written analysis by January
1, 1998, and
RESOLVED FURTHER, That the estimated time deemed necessary to prepare Ottawa Station for development,
such as demolition and/or removal of equipment, is nine(9)months, and
RESOLVED FURTHER, That the Board of Water and Light would expect to take 6,000 square feet of space in the
Ottawa Station project for offices.
Page 82 Board Minutes
September 30, 1997
Adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Pratt,Royal, Werbelow
NAYS: None
ABSENT: None
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
Sale of Main Office Building Status. General Manager Pandy reported that there is still no word from Capitol
Annex,L.L.C. on the purchase of the main office building. The last official communication received from the
developer was on September 10, 1997, indicating he was prepared to finalize an agreement to purchase the
building.
Following discussion,the Commissioners agreed on the need for a definitive answer in writing from the developer
or the tenant indicating an intent to proceed with the project. That should be the touch stone as to when staff starts
to devote more time on relocation matters.
Commissioner Appointee Rosemary Aquilina Welcomed. General Manager Pandy recognized Commissioner-
nominee,Rosemarie Aquilina,who was in the audience as an observer. Ms. Aquilina and nominee Charles
Creamer are scheduled to be interviewed by the Council's Committee of the Whole on October 2.
Electric Restructuring Update. General Manager Pandy distributed a letter written on behalf of the Board of
Commissioners to Senator Dianne Byrum in appreciation for her leadership role in electric utility restructuring.
The Commissioners have been meeting with staff and Kheder and Associates for briefings on the restructuring
process.
Metzler&Associates-Consultant for Austin Electric Utility. A promotional letter from Metzler&Associates was
distributed which describes how they assisted Austin Electric Utility in early 1997 to prepare it to succeed in the
competitive marketplace. That assignment has already cost Austin$2.2 million, and could cost an additional$3.7
million to complete.
Staff Meets with Wisconsin Power and Light. A meeting was held with representatives from Wisconsin Power and
Light who is merging with Iowa utilities to form an interstate energy corporation. They are interested in seeking
an alliance with the BWL by helping to acquire fuels at a favorable price. A graph was displayed depicting the
delivered cost of coal for large utilities in the Mid-America Interconnect Network(MAIN)and the East Central
Area Reliability(SCAR)regions. The average cost per million BTU for Eckert and Erickson Stations and Belle
River were compared against the various utilities in the midwest region of the United States. The impact of the
BWL lowering its fuel cost by potentially burning Western Powder River Basin coal was also compared. General
Manager Pandy pointed out that the BWL's ability to burn Western fuel is critical to the BWL's strategic market
position.
Board Minutes Page 83
September 30, 1997
REMARKS BY COMMISSIONERS
Commissioner Werbelow announced that the Nominating Committee plans to meet shortly to develop the slate of
officers. Input by all Commissioners was invited in the nominations process.
Commissioner Graves stated that he would like to receive a report at a future Committee of the Whole meeting on
the BWL's contractual services with women and minority-owned firms.
Commissioner Pratt inquired about the Faith Wesleyan Church communication,dated June 23, 1997, in which an
extension is requested on their Agreement for Extension of Water Distribution System.
General Manager Pandy responded that the BWL constructed a distribution system to serve the Church(developer)
in 1987. The developer agreed to reimburse the BWL for installation of the system extension. There was only one
payback to the developer during the ten-year period of the contract. Mr. Pandy reported that a ten-year limit is
common for this type of contract. Staff recommends against extending the contract as it would set a precedent of
twenty(20)years to reimburse developers for other similar hookups.
There being no objection, staff`s recommendation stands.
Commissioner Pratt stated that a colleague from his firm,Public Sector Consultants,has been engaged by the
Michigan Jobs Commission to conduct an analysis on securitization and stranded costs. Commissioner Pratt noted
that he is purposely keeping an arm's length distance on this matter by virtue of his involvement with the BWL on
electric restructuring issues. In the spirit of full disclosure he wanted to make this matter known.
Chairman O'Leary remarked that he has collected 15 different news articles relative to the Ottawa Power Station
over a two-year period,and commented on the need for the Board to step forward on this project.
Commissioner Christian stated that he recently read an article in the WALL STREET JOURNAL on California's
experience with electric deregulation. The essence of the story was that once all the hoopla was over,the
anticipated savings has been disappointing. Initially savings of up to 40 percent were expected,however,
approximately 7 percent in savings at a graduated pace is being realized. The article also indicates that businesses
in this program probably will not realize cost savings until the year 2002.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
No absences.
ADJOURNMENT
There being no further business,the meeting adjourned at 7:10 p.m.
Mary E. S?a, ecretary
Filed: October 2, 1997
Marilynn Slade, City Clerk
LANSING BOARD OF WATER AND LIGHT
EMPLOYEES' DEFINED CONTRIBUTION PENSION TRUST AGREEMENT
LANSING BOARD OF WATER AND LIGHT
EMPLOYEES' DEFINED CONTRIBUTION PENSION TRUST AGREEMENT
This Agreement, made this day of , 1997, between the
Lansing Board of Water and Light (hereinafter referred to as the "Employer") and the
individual trustees named in section 1.01(f) below (hereinafter collectively referred to as the
"Trustee").
WITNESSETH:
WHEREAS, the Employer has adopted the Lansing Board of Water and Light
Employees' Defined Contribution Pension Plan (hereinafter referred to as the "Plan") and
this related Trust Agreement for its eligible employees; and
and WHEREAS, a Plan Administrator has been appointed to administer the Plan;
WHEREAS, under the Plan, funds will from time to time be contributed to the
Trustee, which funds will constitute a trust fund to be held for the exclusive benefit of the
participants in the Plan or their beneficiaries, including payment of certain expenses; and
WHEREAS, the Employer wants the Trustee to hold, invest, reinvest and
otherwise to administer the funds, and the Trustee has indicated its willingness to do so, all
pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the Employer and the Trustee do hereby covenant and agree as
follows:
ARTICLE I - DEFINITIONS AND CONSTRUCTION
1.01 Definitions: The following words and phrases shall, when used herein, have
the following respective meanings unless their context clearly indicates otherwise:
(a) Employer: Lansing Board of Water and Light.
(b) Named Fiduciary: Lansing Board of Water and Light.
(c) Plan: Lansing Board of Water and Light Employees' Defined
Contribution Pension Plan, as amended from time to time.
(d) Plan Administrator: Lansing Board of Water and Light.
(e) Trust (or Trust Fund): The fund known as the Lansing Board of Water
and Light Employees' Defined Contribution Pension Trust, as set forth in this Agreement, as
from time to time amended.
(f) Trustee: Each member of the Employer's Board of Commissioners is a
Plan trustee during his or her term of office as a Commissioner. Each trustee shall execute
an appropriate document evidencing his or her agreement to be bound by the terms of this
Trust.
1.02 Construction: The masculine gender, where appearing in this Agreement,
shall be deemed to include the feminine gender, unless the context clearly indicates to the
contrary. The words "hereof", "herein", "hereunder" and other similar compounds of the
word "here" shall mean and refer to the entire Trust and not to any particular provision or
section.
ARTICLE II - RECEIPT OF CONTRIBUTIONS
AND PAYMENTS FROM TRUST FUND
2.01 The Trustee shall receive any contributions paid to it in cash or in the form of
such other property as it may from time to time deem acceptable and which shall have been
delivered to it. All contributions so received, together with the income therefrom and any
other increment thereon, (hereinafter collectively referred to as the "Trust Fund") shall be
held and administered by the Trustee pursuant to the terms of this Agreement without
distinction between principal and income and without liability for the payment of interest
thereon. The Employer shall make contributions in such manner and at such times as shall be
appropriate. The Trustee shall not be responsible for the calculation or collection of any
contribution under or required by the Plan, but shall be responsible only for property
received by it pursuant to this Agreement.
2.02 The Plan, this Agreement and the Trust Fund thereunder are intended to meet
all the requirements of Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as
the same may be amended from time to time.
2.03 Subject to the limitations imposed by Section 2.04 of this Article, the Trustee
shall from time to time on the written directions of the Plan Administrator make payments
out of the Trust Fund to such persons, in such amounts and for such purposes as may be
specified in the written directions of the Plan Administrator. To the extent permitted by law,
the Trustee shall be under no liability for any payment made pursuant to the direction of the
Plan Administrator. Any written direction of the Plan Administrator shall constitute a
certification that the distribution or payment so directed is one which the Plan Administrator
is authorized to direct.
2
2.04 Anything contained in this Agreement to the contrary notwithstanding, it shall
be impossible at any time prior to the satisfactioti of all liabilities with respect to participants
and their beneficiaries, for any part of the Trust Fund to be used for or diverted to purposes
other than for the exclusive benefit of the participants under the Plan and their beneficiaries.
ARTICLE III - INVESTMENT OF TRUST
3.01 Selection of Investment Options. The Trustee shall have no responsibility for
the selection of investment options under the Trust and shall not render investment advice to
any person in connection with the selection of such options.
3.02 Available Investment Options. The Named Fiduciary shall direct the Trustee
as to what investment options Plan participants may invest in.
3.03 Participant Direction. Each Plan participant shall direct the Trustee as to
which investment option(s) the assets in the participant's individual accounts will be invested
in. Such directions may be made by Plan participants in such manner as the Plan
Administrator directs. If the Trustee fails to receive a proper direction as to certain assets,
those assets shall be invested in the default investment option selected by the Plan
Administrator until the Trustee receives a proper direction.
3.04 Mutual Funds. Trust investments in Mutual Funds shall be subject to the
following limitations:
W Execution of Purchases and Sales. Purchases and sales of Mutual
Funds shall be made on the date on which the Trustee or its agent receives from the
Employer in good order all information and documentation necessary to accurately effect
such purchases and sales (or in the case of a purchase, the subsequent date on which the
Trustee or its agent has received a wire transfer of funds necessary to make such purchase).
GO Voting. At the time of mailing of notice of each annual or special
stockholders' meeting of any Mutual Fund, the Trustee or its agent shall send a copy of the
notice and all proxy solicitation materials to each Plan participant who has shares of the
Mutual Fund credited to the participant's accounts, together with a voting direction form for
return to the Trustee or its designee. The participant shall have the right to direct the
Trustee as to the manner in which the Trustee is to vote the shares credited to the
participant's accounts (both vested and unvested). The Trustee shall vote the shares as
directed by the participant. The Trustee shall not vote shares for which it has received no
directions from the participant. With respect to all rights other than the right to vote, the
Trustee shall follow the directions of the participant and if no such directions are received,
the directions of the Named Fiduciary. The Trustee shall have no duty to solicit directions
from participants.
3
3.05 N6tes. The Plan Administrator or its agent shall act as the Trustee's agent for
the purpose of holding all trust investments in pat-ticipant loan notes and related
documentation and as such shall (i) hold physical custody of and keep safe the notes and
other loan documents, (ii) collect and remit all principal and interest payments to the Trustee.
(iii) keep the proceeds of such loans separate from the other assets of the Administrator and
clearly identify such assets as Plan assets, (iv) advise the Trustee of the date, amount and
payee of the checks to be drawn representing loans, and (v) cancel and surrender the notes
and other loan documentation when a loan has been paid in full.
3.06 Reliance of Trustee on Directions. (i) The Trustee shall not be liable for any
loss, or by reason of any breach, which arises from any participant's exercise or non-
exercise of rights under this Article III over the assets in the participant's accounts, except to
the extent of the trustee's negligence related thereto.
(ii) The Trustee shall not be liable for any loss, or by reason of any
breach, which arises from the Named Fiduciary's exercise or non-exercise of rights under
this Article III, unless the actions to be taken under the Named Fiduciary's directions were
prohibited by relevant law or were contrary to the terms of the Plan or this Agreement.
ARTICLE IV - FUNDING POLICY
The Plan Administrator shall establish and carry out a funding policy consistent with
the purposes of the Plan and the requirements of applicable law. The terms of this Trust
shall be subject to such funding policy and any changes thereof from time to time as the Plan
Administrator may, pursuant to the Plan, adopt from time to time. It shall be the duty of the
Trustee to act strictly in accordance with such funding policy, and any changes therein, as so
communicated to the Trustee from time to time in writing.
ARTICLE V - TRUSTEE POWERS
The Trustee shall have the following powers and authority:
5.01 Subject to paragraphs 3.02, 3.03, and 3.04 of Article III, to sell, exchange,
convey, transfer, or otherwise dispose of any property held in the Trust, by private contract
or at public auction. Any person dealing with the Trustee in any such transaction may rely
on the Trustee's authority to enter into the transaction.
5.02 Subject to paragraphs 3.02 and 3.03 of Article III, to invest in guaranteed
investment contracts and short term investments and in collective investment funds
maintained for qualified plans, in which case the provisions of each collective investment
fund in which the Trust is invested shall be deemed adopted by the Employer and the
provisions thereof incorporated as a part of this Trust as long as the fund remains exempt
4
from taxation under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended. 11
5.03 To cause any securities or other property held as part of the Trust to be
registered in the Trustee's own name, in the name of one or more of its nominees, or in the
Trustee's account with Prudential Investments and to hold any investments in bearer form,
but the books and records of the Trustee shall at all times show that all such investments are
part of the Trust.
5.04 To keep that portion of the Trust in cash or cash balances as the Plan
Administrator may, from time to time, deem to be in the best interest of the Trust.
5.05 To make, execute, acknowledge, and deliver any and all documents of transfer
or conveyance and to carry out the powers herein granted.
5.06 To settle, compromise, or submit to arbitration any claims, debts, or damages
due to or arising from the Trust; to commence or defend suits or legal or administrative
proceedings; to represent the Trust in all suits and legal and administrative hearings; and to
pay all reasonable expenses arising from any such action from the Trust if not paid by the
Employer.
5.07 To employ legal, accounting, clerical, and other assistance as may be required
in carrying out the provisions of this Agreement and to pay their reasonable expenses and
compensation from the Trust if not paid by the Employer.
5.08 To do all other acts although not specifically mentioned herein, as the Trustee
may deem necessary to carry out any of the foregoing powers and the purposes of the Trust,
consistent with the City Charter of the City of Lansing, Michigan.
ARTICLE VI - FEES AND EXPENSES
6.01 The expenses incurred by the Trustee in the performance of its duties,
including fees for legal services, and such compensation to the Trustee as may be agreed
upon in writing from time to time between the Employer and the Trustee, and all other
proper charges and disbursements of the Trustee, including any and all taxes assessed against
the Trustee or the Trust Fund, shall be paid from the Trust Fund unless paid by the
Employer.
ARTICLE VII - TRUSTEE'S DUTIES AND OBLIGATIONS
7.01 The Trustee shall discharge its duties under this Agreement solely in the
interest of the participants in the Plan and their beneficiaries and for the exclusive purpose of
5
providing benefits to such participants and their beneficiaries and defraying reasonable
expenses of administering the Plan, with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and with like aims,
in accordance with the provisions of this Agreement as this Agreement may be from time to
time amended; but the duties and obligations of the Trustee as such shall be limited to those
expressly imposed upon it by this Agreement notwithstanding any reference herein to the
Plan, or to the provisions thereof, it being hereby expressly agreed that the Trustee is not a
party to the Plan.
7.02 The Trustee may consult with counsel (who may be counsel for the Employer
or for the Trustee in its individual capacity), and the Trustee shall not be deemed imprudent
by reason of its taking or refraining from taking any action in accordance with the opinion of
counsel. The Employer agrees, to the extent permitted by law, to indemnify and hold each
individual Trustee harmless from and against any liability that the Trustee may incur in the
administration of the Trust Fund, unless arising from the Trustee's own negligent or willful
breach of the provisions of this Agreement. The Trustee shall not be required to give any
bond or any other security for the faithful performance of its duties under this Agreement,
except such as may be required by a law which prohibits the waiver thereof.
7.03 The Trustee shall be entitled, as it may deem appropriate from time to time, to
require of the Employer, the named fiduciary or any other person involved in the
administration of the Plan or investment of the Trust Fund, or having any interest under the
Plan or in, to, or under this Agreement or to the Trust Fund held hereunder, such
certifications and proofs of facts as shall permit the Trustee to perform its duties or to
exercise the powers granted to the Trustee under this Agreement.
ARTICLE VIII - ACCOUNTS AND RECORDS
8.01 The Trustee shall keep accurate and detailed accounts of all investments,
receipts, disbursements and other transactions hereunder and all such accounts and other
records relating thereto shall be open to inspection and audit at all reasonable times by any
person designated by the Plan Administrator. Within ninety (90) days following the close of
the fiscal year of the Trust Fund and within ninety (90) days after the removal or resignation
of all of the individual Trustees as provided under Article IX hereof, the Trustee shall file
with the Employer a written account setting forth all investments, receipts, disbursements and
other transactions effected by it during such fiscal year or during the period from the close of
the last fiscal year to the date of such removal or resignation. Upon the expiration of sixty
(60) days from the filing of such account, each individual Trustee shall be forever released,
remised and discharged from all liability and accountability to anyone with respect to the
propriety of the Trustee accounts and transactions shown in such accounts except with respect
to any such account or transactions as to which the Employer shall within such sixty (60) day
period file written exceptions and objections. To the extent permitted by law, but subject to
6
any express provision of applicable law as may be in effect from time to time to the
contrary, no person other than the Employer may require an accounting or bring any action
against any individual Trustee or all of the Trustees with respect to the Trust Funds or any
actions as Trustee.
8.02 Notwithstanding any other provision of this Article VIII, the Trustee shall have
the right to have a judicial settlement of the Trustee's accounts, or for instructions in
connection with the Trust Fund, in which case the only necessary parties thereto in addition
to the Trustee shall be the Employer and the Plan Administrator. If the Trustee so elects, it
may bring in any other person or persons as a party or parties defendant.
ARTICLE IX - TRUSTEE'S REMOVAL OR RESIGNATION
9.01 Any or all of the individual Trustees may be removed by the Employer at any
time upon sixty (60) days' notice in writing to the affected Trustee(s) and the Plan
Administrator. Any or all of the individual Trustees may resign at any time upon sixty (60)
days' notice in writing to the Employer. Upon such resignation or removal, the Employer
may appoint successor trustees who shall have the same powers and duties as those conferred
upon the individual Trustees named in this Agreement. The removal of a Trustee and the
appointment of a successor trustee shall be by written instrument delivered to both
individuals.
ARTICLE X - LIMITATION ON TRUSTEE'S LIABILITY
10.01 The Plan Administrator shall administer the Plan as provided therein, and the
Trustee shall not be responsible in any respect for administering the Plan nor shall the
Trustee be responsible for the adequacy of the Trust Fund to meet or discharge any payments
or liabilities under the Plan. The Trustee shall be fully protected in relying upon any written
notice, instruction, direction or other communication of the Plan Administrator when signed
by the Plan Administrator. The Employer from time to time shall furnish the Trustee with
the names and specimen signatures of authorized representatives of the Plan Administrator
and officers of the Employer, and shall promptly notify the Trustee of the termination of
office of any authorized representative of the Plan Administrator or any relevant officer of
the Employer and the appointment of such person's successor. Until notified to the contrary
in writing, the Trustee shall be fully protected in relying upon the most recent certification of
the Plan Administrator and any certification regarding representatives and officers of the
Employer which was furnished to it by the Employer.
10.02 Any action required by any provision of this Agreement to be taken by the
Employer shall be evidenced by a resolution of the Employer's Board of Commissioners
certified to the Trustee by the Secretary of the Board, and the Trustee shall be fully protected
in relying upon any resolution so certified to it. Unless other evidence with respect thereto
7
has been expressly prescribed in this Agreement, any other action of the Employer under any
provision of this Agreement, including any approval of or exceptions to the Trustee's
accounts, shall be evidenced by a certificate signed by an authorized representative of the
Employer, and the Trustee shall be fully protected in relying upon such certificate. The
Trustee may accept a certificate signed by an authorized representative of the Employer as
proof of any fact or matter that the Trustee deems necessary or desirable to have established
in the administration of the Trust Fund (unless other evidence of such fact or matter is
expressly prescribed herein), and the Trustee shall be fully protected in relying upon the
statements in the certificate.
10.03 The Trustee shall be entitled conclusively to rely upon any written notice,
instruction, direction, certificate or other communication believed by it to be genuine and to
be signed by the proper person or persons, and the Trustee shall be under no duty to make
investigation or inquiry as to the truth, accuracy, or completeness of any statement contained
therein.
ARTICLE XI - AMENDMENT OF AGREEMENT
11.01 The Employer is vested with the right at any time and from time to time by
action of its Board of Commissioners to amend in whole or in part any or all of the
provisions of this Agreement, with the exception of Section 2.04 of Article II hereof, by an
instrument in writing duly acknowledged and delivered to the Plan Administrator and the
Trustee, provided that no such amendment which affects the rights, duties, responsibilities or
immunities of the Trustee may be made without its consent.
ARTICLE XII - TERMINATION OF PLAN OR TRUST
12.01 This Agreement and the related Trust may be terminated at any time by the
Employer, subject to the terms of any relevant collective bargaining agreement. Upon such
termination, or upon the dissolution or liquidation of the Employer, the Trust Fund shall be
paid to Plan participants by the Trustee as and when directed by the Plan Administrator, in
accordance with the provisions of Article II hereof.
ARTICLE XIII - APPLICATION OF STATE LAW
13.01 Subject to the provisions of the Internal Revenue Code, as the same may be
amended from time to time, this Agreement, as amended from time to time, shall be
administered, construed and enforced according to the laws of the State of Michigan and in
courts situated in that State.
8
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
LANSING BOARD OF WATER AND LIGHT
Dated: By:
Its: Chairman, Board of Commissioners
Dated: By:
Its: Corporate Secretary
S:\261\SIJ-D\B WLDCTR.826.8/30/97
9
Regaruing Resolution No. 97-9-7
LANSING BOARD OF WATER AND LIGHT
EMPLOYEES' DEFINED CONTRIBUTION PENSION PLAN
FUNDING POLICY STATEMENT
LANSING BOARD OF WATER AND LIGHT
EMPLOYEES' DEFINED CONTRIBUTION PENSION PLAN
FUNDING POLICY STATEMENT
I. Introduction
The Lansing Board of Water and Light (the "Employer") has adopted the Lansing
Board of Water and Light Employees' Defined Contribution Pension Plan (the "Plan") for
the purpose of rewarding long and loyal service to the Employer by providing to employees
additional financial security at retirement. Incidental benefits are provided in the case of
disability, death or other termination of employment.
Since the principal purpose of the Plan is to provide benefits at normal retirement
age, the principal goal of the investment of the funds should be both security and long-term
stability with moderate growth commensurate with the anticipated retirement dates of
participants. Investments, other than "fixed dollar" investments, should be included among
the Plan's investment options to prevent erosion of value by inflation. However, investments
should be sufficiently liquid to enable the Plan, on short notice, to make some distributions
in the event of the termination, death or disability of a participant.
The Plan allows each participant to direct the investment of the funds in his or her
Plan accounts. The Employer will select various investment options (consistent with this
Funding Policy Statement) among which participants may choose to invest their respective
interests in the Plan. The Employer will periodically (and not less often than annually)
review the performance of investment options available to participants to ensure that each
such option is meeting its investment objectives. Where appropriate, the Employer will
change the available investment options to ensure that those options are consistent with this
document. The Plan trustees are not responsible for selecting investment options or for
reviewing the performance of investment options.
If there is a discrepancy between the Plan and the related Trust Agreement, and this
Funding Policy Statement, the Plan and Trust Agreement shall supersede this Funding Policy
Statement in all cases.
The trustees are directed by the Employer with regard to the investment of the trust
fund assets. The duties of the trustees are described in the Trust Agreement.
II. Purpose of this Statement of Funding Policy
The purpose of this Statement of Funding Policy is to:
A. provide the Plan's participants and beneficiaries the opportunity to exercise
control over the assets in their respective individual accounts:
2
B. express the Employer's position with respect to the funds risk-volatility
posture.
C. formulate an appropriate set of goals and objectives for the fund's assets.
D. identify a set of guidelines which can be used by the Employer for the purpose
of formulating corresponding investment decisions over a particular time
horizon;
E. assure the investment options available to participants are consistent with
relevant Michigan and federal law: and
F. be sufficiently specific to be meaningful and sufficiently flexible to be
practical.
III. Specific Investment Goals
A. The Employer will seek to provide participants with investment options that
are diversified and that have materially different risk and return characteristics.
The investments in the aggregate should enable the participant, by choosing
among them, to achieve a portfolio with aggregate risk and return
characteristics at any point within the range normally appropriate for the
participant. Similarly, each of the investments when combined with the other
investments should tend to minimize through diversification the overall risk of
a participant's portfolio.
B. The Employer will seek to provide participants with investment options that
will represent equity, income, and cash equivalent asset categories, as well as
other appropriate asset categories. Investment options will be of a diverse
nature to provide the participant with the reasonable opportunity to diversify
the accounts under his or her control so as to minimize the risk of large losses,
taking into account the nature of the Plan and the size of the participant's
account.
C. The Employer will seek to ensure that the risk and return characteristics of the
various investment alternatives will differ in ways that ensure that each of the
investment categories, when combined with investments in any of the other
categories, will tend to minimize the risk at any given level of expected return.
This approach will provide the participant with a reasonable opportunity to
materially affect his or her potential return and degree of risk.
D. The Employer will provide information to participants concerning the
investment alternatives which is sufficient to permit informed investment
decisions.
3
E. The Employer will provide participants the ability to alter asset allocation
mixes within their subaccounts on a daily basis (subject to market access,
business conditions and Acts of God) to meet their investment objectives.
IV. Other Considerations
A. The Employer has developed more specific written selection and performance
measuring criteria for use in the implementation of this document. Those
criteria are contained in Section I of Schedule A which is attached hereto and
incorporated herein by reference. The Employer shall review this Policy
(including Section I of Schedule A) not less often than annually. This Policy
and any changes which the Employer makes to this Policy (including Section I
of Schedule A) shall be communicated in writing to the Plan trustees.
B. The Employer has selected specific investment options among which each
eligible Plan participant may select in accordance with the terms of the Plan.
Each of those investment options is listed in Section II of attached Schedule A.
Not less often than quarter-annually, the Employer's representative will review
each of those investment options for the purpose of determining whether they
are consistent with this Policy, including Section I of Schedule A. If, in the
judgement of said representative, one or more of those investment options is
not so consistent, then the representative will replace such investment options
with other options that are consistent with this Policy, including Schedule A.
The Employer's representative having full responsibility for such periodic
review of Schedule A, Section II shall be the Treasurer/Controller and Chief
Financial Officer of the Employer.
LANSING BOARD OF WATER AND LIGHT
Date: By:
Its: General Manager
Date: By:
Its: Corporate Secretary
S:\261\S U-D\B W LFND PL.911
4
SCHEDULE A
I. SELECTION & PERFORMANCE MEASURING CRITERIA
A. The Employer has selected Prudential Retirement Services to assist the Lansing Board
of Water and Light (the "Board") to administer the Lansing Board of Water and Light
Employees' Defined Contribution Pension Plan (the "Plan"). The Prudential Administration
System is the "PRUARRAY" system. It requires that at least 50% of all specific investment
funds offered to Plan participants be funds managed by Prudential Insurance Company of
America ("Prudential") and its affiliates. This mutual fund diversification strategy ensures
maximum investment flexibility. The following "Non-Prudential" or "Outside" mutual fund
families are part of the "PRUARRAY" program: AIM, ALLIANCE, FIDELITY ADVISOR,
FRANKLIN, KEMPER, MFS, MUTUAL, OPPENHEIMER, PIMCO, PUTNAM,
TEMPLETON, AND ZWEIG.
To satisfy the asset allocation guidelines on behalf of the Plan participants, the Board will screen
and select eligible mutual funds within each "asset class" to include the following:
CASH EQUIVALENT OR STABLE VALUE
1. Money Market
2. Stable Value Fund
INCOME
1. U.S. Government Bond Fund
2. Corporate Bond Fund
3. Global Bond Fund
EQUITY
1. Balanced Fund
2. Growth & Income Fund
3. Growth Fund
a. Large cap
b. Mid cap
c. Small cap
4. International Fund
5. Specialty Fund
Comparative analysis between "like" funds and indices will be made to determine selections and
to monitor fund results. Morningstar reports will be the primary resource utilized to screen,
select, and evaluate funds.
B. CASH EQUIVALENT AND STABLE VALUE ASSET CLASS
The Board has determined that the investment alternative serving as the Plan's Cash Equivalent
Fund shall be a pooled investment vehicle, such as a money market fund, where the fund's share
price is intended to remain constant and the fund's yield is comparable with risk-free rates of
return. The Board has deemed the money market fund available under the PruArray program
as an appropriate Cash Equivalent vehicle.
The Board has also sought a stable, competitive interest rate account. The Stable Value Fund
under the PruArray program is a bank collective trust fund managed by the Norwest Stable
Return Fund. The Board has deemed this Stable Value Fund as an appropriate stable value
vehicle.
C. INCOME ASSET CLASS (BONDS)
The Board has determined that the investment alternatives shall be pooled investment vehicles
such as publicly traded mutual funds providing net asset valuations published on a daily basis.
The Board has established the following criteria for the selection and retention of these mutual
funds:
1. EXPERIENCE
The management company of any mutual fund company one or more of whose funds are
offered pursuant to Section II of this Schedule A must meet the following criteria:
(1) it must have been is existence for at least five (5) years; and
(2) it must possess total capital of not less than 500 million dollars.
2. PERFORMANCE
The Board or its agent must review the performance of the mutual funds which are made
available to Plan participants to determine whether the funds remain competitive.
Comparisons between appropriate indices and/or similar fund categories will be made,
taking into account the risk ratings of the various mutual funds. Measuring time
weighted returns are not enough. Risk factors must also be reviewed. Higher risk levels
in addition to declining performance will be two of the key elements considered to
determine whether or not a replacement is needed.
2
3. RISK
The fund(s) will be reviewed based on the following risk factors:
(a) Category Risk: Evaluates the fund's downside volatility relative
to that of other funds in its Morningstar Category.
(b) Overall Ratings: Star ratings represent how well a fund balanced
risk and return in the past within a "broad" investment objective
(i.e., bonds).
(c) Category Ratings: Brings both performance and risk together
within its designated Morningstar Category.
(d) Standard Deviation: A statistical measure of the range of a fund's
performance. When a fund has a high standard deviation, its
range of performance has been very wide. indicating that there is
a greater potential for volatility.
The Board or its agent will select and evaluate each fund based on these risk factors. In
the event that greater risk and increased volatility emerge, the Board or its agent will
determine whether or not each fund continues to be a prudent and appropriate investment.
4. PORTFOLIO COMPOSITION AND INVESTMENT STYLE
The mutual fund investment and management styles will be reviewed annually to
determine whether or not participant diversification choices have been limited.
D. EQUITY ASSET CLASS (STOCKS)
1. EXPERIENCE
Any mutual fund company one or more of whose funds are offered pursuant to Section
II of this Schedule A must meet the following criteria:
(1) it must have been is existence for at least five (5) years; and
(2) it must possess total capital of not less than 500 million dollars.
2. PERFORMANCE
The Board or its agent must review the performance of the mutual funds which it makes
available to Plan participants to determine whether the funds remain competitive.
Comparisons between appropriate indices and/or similar fund categories will be made
taking into account the risk ratings of the various mutual funds. Measuring time
3
weighted returns are not enough. Risk factors must also be reviewed. Higher risk level
in addition to declining performance will be two of the key elements considered in
deciding whether or not a replacement is needed.
3. RISK
The fund(s) will be reviewed based on the following risk factors:
(a) Category Risk: Evaluates the fund's downside volatility relative
to that of other funds in its Morningstar Category.
(b) Overall Ratings: Star ratings represent how well a fund balanced
risk and return in the past within a "broad" investment objective
(i.e., growth).
(c) Category Ratings: Brings both performance and risk together
within its designated Morningstar Category.
(d) Standard Deviation: A statistical measure of the range of a fund's
performance. When a fund has a high standard deviation, its
range of performance has been very wide, indicating that there is
a greater potential of volatility.
The Board or its agent will select and monitor each fund based on these risk factors. In
the event greater risk and increased volatility emerge, the Board will determine whether
or not each fund continues to be a prudent and appropriate investment.
4. PORTFOLIO COMPOSITION AND INVESTMENT STYLES
The mutual fund investment and management styles will be reviewed annually to
determine whether or not participant diversification choices have been limited. For
example, if a mutual fund alters its portfolio structure significantly, it could affect its
Morningstar Category (i.e., small cap/value style becomes mid cap/growth style).
E. COMPLIANCE WITH MICHIGAN LAW
The Plan must offer investment options which comply with the Public Employee Retirement
System Investment Act (Michigan Complied Laws Section 38.1132 et seq.), as amended from
time to time, a copy of which is attached hereto and incorporated herein by reference.
******************************************************************************
4
H. SPECIFIC INVESTMENT OPTIONS
The attached list labeled EXHIBIT ONE shows all of the eligible funds within the PruArray
program. The funds chosen for the Plan are illustrated with a check mark (X) on EXHIBIT
ONE. Also reflected in EXHIBIT ONE are the listings of each selected fund within its own
asset class based on the specific criteria discussed above.
LANSING BOARD OF WATER AND LIGHT
Date: By:
Its: General Manager
Date: By:
Its: Corporate Secretary
S:\261\SU-D\CRITERIA.B WL
5
Page 67
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT r"
2: u(�
CITY
Y C ERh
Tuesday,August 26,1997
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 the Chair,David O'Leary.
Present: Commissioners Christian, Graves,Pratt,Royal, Strolle and Werbelow, Chairman O'Leary
The Assistant Secretary declared a quorum present.
The invocation was delivered by the Chair.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
MOTION: On motion of Commissioner Christian and seconded by Commissioner Strolle,that the minutes
of regular meeting of July 29, 1997,be adopted as filed.
Carried unanimously.
PUBLIC COMMENTS
CHAIR O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE
BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE
MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
GENERAL MANAGER'S RECOMMENDATIONS
CORPORATE PLANNING
Res.No. 97-8-1
It is recommended that:
The following described property known as the Stanley Street Metering Station be declared surplus and not
required for Board of Water and Light Operations:
Board Minutes Page 68
August 26, 1997
Beginning at a point on the east line of the Lansing Manufacturer's Railroad right of way, 1175
feet north of the center line of Saginaw Street,thence east 50 feet,thence north and northeasterly
parallel to the east railroad right of way line(approximately 150 feet)to the north line of the
southwest 1/4 of the southwest 1/4 of Section 8,T 4 N,R 2 W, thence 50 feet west to the Lansing
Manufacturer's right of way, thence southwesterly and south to the point of beginning.
Further that the jurisdiction of this property be returned to the City of Lansing Parks and Recreation Department
subject to the Board of Water and Light retaining jurisdiction for access to inspect, maintain, replace, install, etc.,
the control, signal and power cables located within this described property including access to the Metering Station
building and the cables and equipment located in the basement of this building. The City of Lansing Parks and
Recreation Department and/or their agents shall be responsible for maintenance of the property.
Further that the easement granting the Board of Water and Light the right to run cables and for ingress and egress
to and from the above described property from Stanley Street be retained.
Further if the City of Lansing leases the described property to a third party including use of the existing building
and access road,the third party shall assume responsibility for maintenance of the building, access roadway and
any fencing or gates and shall not limit the Board of Water and Light use or access to its facilities located within
described property,the building and the existing easement.
Further that the General Manager and Corporate Secretary be authorized to enter into agreements to transfer
jurisdiction of this property to the City of Lansing Parks and Recreation Department subject to the requirements of
State Law,the Lansing City Charter and Codified Ordinances.
By action of the Lansing City Council on July 30, 1951,the jurisdiction of this property was transferred from the
Board of Cemetery and Park Commissioners(now the Parks and Recreation Department)to the Board of Water
and Light for an electric Metering station. An easement was also granted for the right to run cables and for ingress
and egress to the property from Stanley Street. The metering station is no longer in service and the only required
access to the building is for inspection and maintenance of the control, signal,power cables and sump pump
located in the basement.
The City of Lansing is interested in use of the property for park purposes or for a proposed cellular tower site.
MOTION: On motion of Commissioner Strolle seconded by Commissioner Royal,Resolution 97-8-1 was
adopted by the following vote:
YEAS: Christian, Graves, O'Leary,Pratt,Royal, Strolle and Werbelow
NAYS: None
ABSENT: None
LEGAL
Res.No. 97-8-2
Purchase the following insurance coverage:
From Lyman and Sheets Insurance Agency, representing the TIG Insurance Company,
Commercial General Liability Insurance at an annual premium of$109,166 for the one year period from
September 30, 1997 to September 30, 1998.
Page 69 Board Minutes
August 26, 1997
The expiring coverage is with the Lyman and Sheets Insurance Agency representing the Gulf Insurance Company
at the same rate. Gulf Insurance Company is one of the Travelers Property and Casualty Group companies that has
decided to restructure their business after the merger. As a result,it will not offer the Board of Water and Light
renewal terms and conditions. The program underwriting agency has persuaded a company of the reinsurer's
group to offer the policy.
The limits will remain at$1 million with a$10,000 deductible.
Bidding is scheduled for 1998 for the next 3 year period.
Res.No. 97-8-3
Purchase the following insurance coverage:
From Lyman and Sheets Insurance Agency, representing the TIG Insurance Company, excess
Liability Insurance at an annual premium of$77,000 for the one year period from September 30, 1997 to
September 30, 1998.
The expiring coverage is with the Lyman and Sheets Insurance Agency representing the American Empire Surplus
Lines Insurance Company at the same premium. This policy will save the surplus lines premium tax.
Gulf Insurance Company had declined renewal of the coverage in 1996. Gulf Insurance Company is one of the
Travelers Property and Casualty Group companies that has decided to restructure their business after the merger.
As a result, it will not offer the Board of Water and Light terms and conditions for this year either. The program
underwriting agency has persuaded a company of the reinsurer's group to offer the policy.
Lyman and Sheets Insurance Agency, representing the Gulf Insurance Company,was awarded the Umbrella
Liability Insurance at an annual premium of$75,000 for the one year period from September 30, 1995 to
September 30, 1996.
The limit for the new umbrella liability coverage will remain the same at$5 million.
Bidding is scheduled for 1998 for the next 3 year period.
Res. No.97-8-4
Purchase the following insurance coverage:
From Voss Insurance Services,Inc., representing the Travelers Indemnity Company of
Illinois, Specific Excess Workers Compensation Insurance for deposit premium of$33,663 for the one
year period from September 1, 1997 to September 1, 1998. The rate is 0.085%per$100 employee
compensation.
The coverage was originally awarded to Voss Insurance Services, Inc.,representing the Aetna Casualty and Surety
Company,for deposit premium of$39,577 for the one year period from September 1, 1995 to September 1, 1996.
The rate was 0.10%per$100 employee compensation for both that period and the subsequent period ending
September 1, 1997.
Aetna Casualty and Surety Company was part of a merger with Travelers Property Casualty Group and will no
longer be writing this type of coverage. The affiliate company,The Travelers Indemnity Company of Illinois,will
be writing the policy with no reductions in coverage.
Board Minutes Page 70
August 26, 1997
The next scheduled bidding will be for the 3 year period commencing September, 1998.
Risk Manager Gerald Blanchard reported that the BAIL had to change its liability insurers because Gulf Insurance
Company will no longer write utilities for this coverage. Fortunately, one of the companies(TIG),that was the re-
insurer of this coverage,was willing to directly write the liability insurance. Gulf was and is a part of a larger
insurance group(Travelers)that merged with another(Aetna)and the new combined group has restructured the
way it does business. An additional part of the restructuring effect is that the specific excess workers compensation
insurance must now also be written with a different company,but in this case it is another company in the same
combined group.
MOTION: On motion of Commissioner Strolle seconded by Commissioner Werbelow,Resolutions 97-8-2,
97-8-3, and 97-8-4 were adopted by the following vote:
YEAS: Christian, Graves, O'Leary,Pratt,Royal, Strolle and Werbelow
NAYS: None
ABSENT: None
UNFINISHED BUSINESS
There was no unfinished business.
NEW BUSINESS
There was no new business.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Treasurer/Controller Dana Tousley briefed the Commissioners on cost reduction analysis memo, and the use of
outside services. He also presented basic financial statistics and trend lines over the past twenty-five years. In the
past eight years,BWL Operation and Maintenance expenses(excluding fuel and purchased power)have had no
(zero%)increase.
General Manager Pandy complimented Corporate Secretary Mary Sova on saving the Board of Water and Light
$2,700 in storm water fees. Discrepancies were found in the square footage on several bills.
General Manager Pandy thanked Board of Water and Light crews for the work they performed in helping
Oldsmobile set up for the"Oldsmobile Centennial"held August 20-23, 1997.
General Manager Pandy briefed the Commissioners on the status of the steam line to General Motors. An outside
consultant is conducting an analysis on the joints and anchors to determine where the problem exists. Repair of
the problem could be a lengthy process if the anchors are the problem, according to Technical Services Director
John Elashkar. General Manager Pandy will report to the Commissioners on a regular basis to keep them
informed of the status of this project.
Page 71 Board Minutes
August 26, 1997
Discussion was held on the proposed scope of a study of the Board of Water and Light to be done by an outside
consultant the City of Lansing is considering hiring.
A Committee of the Whole Meeting will be held on Tuesday, September 16. The topic will be deregulation. The
Policy Manual will not be on the agenda for this meeting. Corporate Secretary Mary Sova will make changes to
the Policy Manual and an updated version will be presented to the Commissioners for their approval at a later date.
Policies that are the responsibility of the Commissioners will be presented to them for their discussion and review.
The next Board Meeting will be held on September 30, 1997,
Staff Attorney Wilhite responded to a question regarding lawsuit filed by former Board of Water and Light
employee David Lawrence;the BWL prevailed in this case.
As of this date,Mayor Hollister has not named new commissioners to replace Commissioners O'Leary and Strolle
whose terms expired June 30, 1997.
REMARKS BY COMMISSIONERS
Commissioner Peter Pratt commented on the Share the Success statistics for this year. General Manager Pandy
stated that this was a rough year weather wise for the Board of Water and Light system.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
None.
ADJOURNMENT
Chairman O'Leary adjourned the meeting at 6:42 P.M.
Rosemary Sullivan, Assistant Secretary
Filed. August 28, 1997
Marilynn Slade, City Clerk
BOARD OF WATER AND LI p �;
53,
CLERK
RESCHEDULED REGULAR MEETING
The regular meeting of the Board of Water and Light Commissioners of the City of Lansing,
Michigan, previously scheduled for July 22, 1997, is rescheduled as noted:
New Meeting Date: Tuesday, July 29, 1997
5:30 p.m.
Location: Second Floor Board Room
Board of Water and Light Office Building
123 West Ottawa Street
Lansing, Michigan 48933
Certified by:
Mary ova
Corporate Secretary
cc: BWL: Commissioners,Executive Staff,Bldg.Maintenance,Security(Stancliff,Cochran)
City: City Cleric,City Council Office,Mayor's Office
Post: 7-15-97
Page 57
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
!4u/rG�,IJ,y
l�CL�'1;ri
Tuesday,July 29,1997
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 the Chair, David O'Leary.
Present: Commissioners Christian, Graves,O'Leary,Royal, Strolle and Werbelow.
Absent: Commissioner Pratt
The Secretary declared a quoram p{esent.
The invocation was delivered by the Chair.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
MOTION: On motion of Commissioner Christian and seconded by Commissioner Strolle, that the minutes
of regular meeting of June 24, 1997,be adopted as filed.
Carried unanimously.
ANNOUNCEMENT BY THE CHAIR
REGARDING ANNUAL ORGANIZATION
The July meeting is generally the time for the annual organizational meeting for the election of officers.
Nominations for officers are being postponed until such time the Chair determines the complement of the Board is
such that nominations are appropriate.
PUBLIC COMMENTS
CHAIR O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE
BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF THE
MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
Letter from Thomas J. Coates,President,Thomas J. Coates and Associates,Inc., dated June 23, 1997, stating his
continued interest in the Ottawa Power Street Station Redevelopment project.
Received and placed on file.
Board Minutes Page 58
July 29, 1997
Letter from J. Chris Holman,Partner, Ottawa Park Associates Developers(OPAD), dated June 26, 1997, thanking
the Board and staff for their cooperation and assistance with the Ottawa Street Power Station project, and
withdrawing their name as the developer of record for the project.
Received and placed on file.
COMMITTEE OF THE WHOLE REPORT
(Resolution 97-7-1)
The Committee of the Whole met on July 15, 1997. Agenda topics were:
1. To discuss Ottawa Power Station redevelopment issues, and
2. To receive reports on the Board of Water and Light(BWL)organization process
redesign.
Present were Commissioners Christian, Graves, O'Leary, Pratt,Royal, Strolle,and Werbelow.
Ottawa Power Station Redevelopment. With General Motors' (GM)recent decision to not relocate its two
Lansing area employee training centers to the Ottawa Station, the Board is now reviewing its options for the
redevelopment of the Ottawa Power Station. The Commissioners agreed to form a special committee comprised of
three Commissioners appointed by the Board Chair and three management staff members appointed by the General
Manager to evaluate alternatives for the commercial redevelopment project. General Manager Pandy excused
himself from discussions on the project because of his business dealings with developers interested in the project.
The charge of the special committee is to meet with the development team of Thomas J. Coates and Associates to
review the firm's proposal submitted September 1995, and to outline the obstacles identified by the Board in their
initial selection process. Mr. Coates has expressed the firm's continued interest in the redevelopment project in the
event negotiations between the Ottawa Park Associates Developers(OPAD)and GM were not successful. The
special committee is also being asked to evaluate whether or not to open negotiations with the Coates team or to
reopen the project to other developers. The committee's recommendation is to be presented to the Board for
consideration.
Process Redesign Reports. Last fall BWL employees developed the organization's new Vision Statement which
focuses on employee and customer partnerships to secure customer loyalty and meet the challenge of competition.
This effort culminated into the formation of four process redesign teams who have been involved over the last
several months in putting the vision statement into action. Leaders from each of the teams provided an executive
overview of the following four processes:
• Sell/Bill-The team emphasized providing desired products and services through a single
point of contact wherever the customer exists.
• Produce/Procure-The team focused on two core processes for producing the BWL's three
current utility processes of water, electricity and steam. They include production of
steam/electric and water.
• Deliver-The team identified opportunities to achieve greater efficiencies in the delivery
processes of each of the three BWL utility services for maximum benefit to end-use
customers.
Page 59 Board Minutes
July 29, 1997
• Support -The team identified seven basic support services to be provided to the organization
and to process owners. They include: Financial, Information,Engineering,Human
Resources, Materials/Services, and Environmental/Health/Safety.
General Manger Pandy presented a preliminary organization chart showing how the BWL may organize
around its major processes. The chart identifies four major process areas, a new ventures team and a craft
center(craft center process owners to be IBEW union representatives)that would supply trades-related
services to the processes. In addition, the General Manger would have a chief financial officer reporting
directly to him, as well as legal, audit and communications officers. The General Manager would also be
served by an advisory council that would provide him with feedback on how the processes are serving
BWL customers. A Human Resources team will be submitting a list of job qualifications to begin filling
the process owner positions at the top of the organization. A tentative schedule calls for phasing in
process teams incrementally starting August 1.
Respectfully submitted,
John Strolle, Chair Pro Tem
Committee of the Whole
MOTION: Commissioner Christian moved,seconded by Commissioner Strolle,to approve the Committee of
the Whole Report as presented.
Discussion- Special Committee Appointments
Chair O'Leary announced that he would like to add an additional Commissioner to the special Ottawa
Station development committee, taking it from three to four members of the Board. The question as to
whether or not four Commissioners serving on the special committee constitutes a quorum of the board
under the Open Meetings Act was taken under advisement by Staff Attorney Wilhite. The eight-member
Board currently has an open seat, created by the recent death of Commissioner William Lontz.
SPECIAL COMMITTEE APPOINTmENTs
Commissioners Staff
1. Ernest Christian, Chair 5. Treasurer/Controller Dana Tousley
2. Joseph Graves,Jr. 6. Technical Services Director John Elashkar
3. Judson Werbelow 7. Staff Attorney Larry Wilhite
4. Peter Pratt
Discussion-Process Redesign:
The Commissioners discussed management's process redesign efforts. There was agreement that improving
services to customer must continue to be the BWL's top priority. The Board indicated they would support
committing more resources to technology to enable the Board of Water and Light to serve its customers better. The
Commissioners requested additional information on the process redesign with practical examples on how the
reorganization strategy will be implemented.
The Committee of the Whole Report was approved by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Board Minutes Page 60
July 29, 1997
GENERAL MANAGER'S RECOMMENDATIONS
TREASURER/CONTROLLER
Res. No. 97-7-2
Authorize the sale of obsolete Board-owned vehicles and equipment through competitive bids. The items are BWL
Unit Numbers 1, 8, 21, 62, 64, 71,78, 124, 125,152,165, 169, 196, 225,512, 526, 542, 569, 578, 580, 610, 612,
638,711,723,724, 725, 736, 806, 807, 852, 863,and 873.
An itemized list is on file with the Corporate Secretary.
MOTION: On motion of Commissioner Christian, seconded by Commissioner Werbelow,
Resolution 97-7-2 was adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal,Werbelow
NAYS: None
ABSENT: Pratt
Res.No. 97-7-3
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 July 31, 1998. 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 Quantity Annual Cost
Commodity (Est.) Unit Cost (Est.) Vendor
Hydrofluosilicic Acid 200 tons $134.00/ton $ 26,800.00 L C I Limited
Pebble Quicklime 15,000 tons 61.25/ton 918,750.00 Marblehead Lime Co.
Soda Ash 1,800 tons 140.00/ton 252,000.00 O C I Corp.
Granulated Salt 400 tons 71.25/ton 28,500.00 Morton Salt Division
Sulfuric Acid 630 tons 64.00/ton 40,320.00 Marsulex,Inc.
Caustic Soda 175 tons 315.18/ton 55,156.50 K.A. Steel Chemicals,
Inc.
Sodium Hypochlorite 125,000 gal. .4620/gal. 57,750.00 K.A. Steel Chemicals,
Inc.
Blended Phosphate 15,000 gal. 7.65/gal. 114,750.00 Elhorn Engineering Co.
Total: $1,494,026.50
Page 61 Board Minutes
July 29, 1997
MOTION: On motion of Commissioner Christian, seconded by Commissioner Werbelow, Resolution
97-7-3 was adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Res. No. 97-74
Water and Electric Rate Changes
Whereas, proposed rate changes were filed with the City Clerk on May 28, 1997, and,
Whereas,the rate changes eliminate ratchet provisions in the affected electric rates and remove the requirement
for payment before construction begins in the water rate,and,
Whereas, a Public Hearing on the proposed rate changes was subsequently held on July 15, 1997.
THEREFORE,BE IT RESOLVED, That the following electric and water rate schedules(attached)be adopted
and applied to all electricity or water used or services rendered on or after September 1, 1997.
Rate 3 Water System Connection Fees
Rate 4 Large General Electric Service
Rate 5 Primary Electric Service
Rate 8 Large Capacity Electric Service
Rate 10 Process Heating Electric Service
BE IT FURTHER RESOLVED,That the following electric and water rate schedules now in effect be rescinded
for billing purposes,for any electricity or water used or services rendered on or after September 1, 1997.
Effective
Rate 3 Water System Connection Fees 01-01-94
Rate 4 Large General Electric Service 01-01-97
Rate 5 Primary Electric Service 01-01-97
Rate 8 Large Capacity Electric Service 01-01-97
Rate 10 Process Heating Electric Service 01-01-97
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Graves,Resolution 97-74 was
adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Board Minutes Page 62
July 29, 1997
WATER
Res. No. 97-7-6
That the Board agree to serve water to proposed Water District No. 131,Delhi Township,as requested by
resolution of the Delhi Charter Township on December 3, 1996,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. 131 established by Township and will provide a potable
water supply to said district.
2. The Township will be required to make a$39,142.50 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 CXXXI)covering the
furnishing of a potable water supply in Water District No. 131.
4. Watermains 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$39,142.50 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)CXXI)to furnish a potable water supply in Water District No.
131.
The geographical area of Water District No. 131 is as follows: College Heights Estates Phase 6,Lots
110 through 133.
To provide a potable water supply within the proposed new district requires the installation of 1,535 feet
of watermain and fire hydrants at an estimated cost of$39,142.50. The main extension will serve twenty-
four(24) residential customers. A one-time connection fee will amount to$22,632.00. The estimated
annual revenue is$8,160.00.
Watermains to be installed in Summer/Fall of 1997 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
MOTION: On motion of Commissioner Christian, seconded by Commissioner Graves,Resolution
97-7-6 was adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal,Werbelow
NAYS: None
ABSENT: Pratt
Page 63 Board Minutes
July 29, 1997
Res. No. 97-7-7
That the Board delegates to the General Manager authority to extend water service within the geographic
boundaries of governmental units or with agencies for which the Board has authorized a retail or wholesale Water
Service Agreement.
That the General Manager and Corporate Secretary, or their respective designated representatives, are authorized
to take all necessary actions to enter into and administer Supplemental Agreements and Amendments for the
purpose of extending water service within such governmental units.
That the Board authorizes the use of a simple payback methodology as follows: The simple payback for a water
system extension shall be computed as the length of time required for all projected revenues from the service
extension to be numerically equal to the expenditures for that extension. Projected revenues shall include but not
be limited to Contribution-in-Aid of Construction, Connection Fees(Rate 3),mvenues from the sale of water
(Rates 1 and 2),Fire Hydrants and Services(Rate 4), and any other fee or charge assessed by the BWL against the
governmental unit or customers served by the extension. Revenue projections shall take into account the
anticipated density and type of customers,and the rate at which development is reasonably expected to occur.
That in any case where the simple payback methodology exceeds 10 years, staff is directed to file,within 90 days of
agreeing to extend service,a written report with the Board providing sufficient detail to justify the decision to
extend.
That the Board specifically reserves the right to authorize retail or wholesale Water Service Agreements in
governmental units or with agencies for which no retail or wholesale Water Service Agreement exists.
This resolution will provide a faster turn-around of requests for water service within the geographic boundaries of
governmental units or agencies for which the Board has authorized a water service agreement.
Historically, water system extensions within the City of Lansing and the former Landel Metropolitan District have
been authorized through the capital budget,while those in other areas have been presented for specific
authorization by the Board. Through this resolution the Board will establish a consistent policy for approval of
water system extensions within areas the Board has authorized its water utility to serve. The Board will retain
control of the overall level of expenditure through the Capital Budget process.
Water Service Agreements are in effect for the following governmental units at the time this resolution is
presented:
Retail: Delhi Township,DeWitt Township, Watertown Township,
Windsor Township and the former Landel Metropolitan District
(Lansing Township's east side).
Wholesale: Delta Township,and Lansing Township(West Side Water).
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-7-7,
was adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Board Minutes Page 64
July 29, 1997
UNFINISHED BUSINESS
There was no unfinished business.
NEW BUSINESS
There was no new business.
RESOLUTION
APPOINTMENT OF CHARTER STAFF POSITIONS
(Resolution 97-7-8)
BY THE BOARD OF COMMISSIONERS
WHEREAS,the rules of procedure of the Board of Commissioners specify that the Board shall appoint each of the
three staff positions reporting to the Board at its first regular meeting in July of each year,be it
RESOLVED, the Board of Commissioners hereby reappoints the following staff positions for the ensuing fiscal
year, or,until a successor is appointed,whichever last occurs:
Director and General Manager -Joseph Pandy, Jr.
Internal Auditor -Kellie Willson
Corporate Secretary -Mary Sova
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-7-8
was adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Steel Blanking and Distribution Operation in Delhi Township selects CMS Energy for Electric Supply.
General Manager Pandy reported that negotiations to secure the electric supply load of the Regional Steel
Distribution Center(RSDC) in Delhi Township were unsuccessful. CMS Energy offered RSDC a new economic
development rate, subject to Public Service Commission approval,that undercut the Board of Water and Light's
(BWL)energy rate. Mr. Pandy noted that it is his sense that CMS took an aggressive marketing posture to keep
Page 65 Board Minutes
July 29, 1997
the BWL out of that area because of the growth potential in that section of Delhi Township. Discussion followed
regarding competition and deregulation issues with respect to municipal utilities.
Consumers Enerzy and Stranded Costs. General Manager Pandy handed out an article which appeared in the
July 21, 1997, edition of Electric Utility Weekly. The essence of the article is that Consumers Energy is willing to
auction off the rights to portions of its Michigan-based,non-utility generating capacity each year from 1998 until
2007 in an effort to link stranded-cost recovery to the market price of power.
Standard &Poor's Revised Business Profile Scale for Public Power. General Manager Pandy presented an
overview of Standard&Poor's recently published revised business profiles for public power and rural electric
cooperative sectors and the investor owned electric utilities which appeared in the July 14, 1997, edition of Credit
Week Municipal. They revised the scoring system of their business profiles to a 10 point scale from the five point
scale first applied in 1995. This enhancement was promoted,in part,by the changes sweeping the electric industry
and the emergence of disaggregated utility systems. Mr. Pandy noted that the credit rating of the Board of Water
and Light was at AA, with a"stable" outlook, and a favorable Business Profile ranking of," (most favorable score
being"1" -"4")—assigned to systems whose exposure to market forces is limited. Utilities assigned scores of"5"-
"8" are the most likely to face formidable challenges in the rapidly evolving marketplace. The assignment and
review of business profiles include the following factors: management, operations,competitive position, markets,
and regulation. Mr. Pandy noted that the investor owned utilities generally score"5"or higher which indicates
they will face challenges in a competitive environment.
Customer Attitude Survev. Communications Director John Strickler presented an executive summary of this
summer's customer attitude survey conducted by Market Strategies,Inc. (MSI)of Southfield,Michigan. The
findings indicate that the BWL's favorability was maintained at 83 percent. An overall favorability is described as
the BWL's market position, depicting how customers feel about the BWL and the image the organization has in
the community. Overall satisfaction showed minor shifts,with a two percent drop in electric and a five percent
gain in water. Loyalty showed a four percent drop with 76%indicating they would remain with the BWL if
another utility offered electricity at the same price. Significant improvements were noted in concern,believability
and environmental protection. Ratings on these measures are also higher among customers who are aware of the
Motor Wheel Disposal Site story. Mr. Strickler noted that this suggests that the BWL's public responses to the
Motor Wheel disposal situation were appropriate. The survey numbers also showed a drop in perceived value of
electricity for the price and the value of customer service for the price. The value results in this area appear
inconsistent and are being treated as an irregularity at this time. Mr. Strickler reported that MSI is developing a
more detailed model which examines the relationships between the perceived performance of the BWL on various
specific activities and characteristics and specific outcomes of interest to the BWL. More information will be
forthcoming once the detailed analysis of the modeling results are received.
REMARKS BY COMMISSIONERS
Commissioner Werbelow inquired on the status of the proposed BWL evaluation being initiated by the City
Council Ways and Means Committee.
General Manager Pandy responded that the Ways and Means Committee is considering a proposal from Energy&
Resources Consulting Group, a successor to SVBK. As of this week BWL staff is not aware that a response has
been received by the Ways and Means Committee from the Energy&Resources group. Staff will continue to
monitor the disposition of this project and will keep the Board informed.
Chairman O'Leary reported that he had a discussion with Gary Granger of Capitol Annex,L.L.C. relative to the
purchase of the Board of Water and Light office building at 123 W. Ottawa Street. Mr. Granger has indicated that
he feels very positive about the legislature's interest in the purchase of the office building. He feels that the
September 10, 1997, deadline imposed by the Lansing City Council(Resolution 105)is still a reasonable time
frame.
Board Minutes Page 66
July 29, 1997
Chairman O'Leary also informed the Board that reporters from WILX-TV Channel 10 stopped by his office on
July 30, 1997,for an update on the Ottawa Street Power Station project. They were given the latest report on the
special committee appointed to study Ottawa Station's redevelopment options.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
Moved by Commissioner Werbelow, seconded by Commissioner Christian,that the absence of Commissioner Pratt
be excused.
Adopted unanimously.
ADJOURNMENT
Moved by Commissioner Graves, seconded by Commissioner Strolle at 6:50 p.m.,to adjourn the meeting.
Adopted unanimously.
Mary E. Secretary
Filed: August 1, 1997
Marilynn Slade, City Clerk
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No. WB5
WATER SYSTEM CONNECTION FEES
RATE NO.3
System Connection Fees-The following schedule of fees shall apply to all new water service connections
made to the mains. This fee shall not apply to active services which are being replaced.
Service Size Connection to
Main 1/1/94 1/1/95 1/1/96
3/4" $672.00 $715.00 $740.00
1" $806.00 $911.00 $943.00
1'/," or 1%" $1,075.00 $1,171.00 $1,212.00
2" $1,330.00 $1,663.00 $1,953.00
3" $1,890.00 $2,363.00 $2,954.00
4" $2,380.00 $2,975.00 $3,719.00
6" $3,430.00 $4,288.00 $5,360.00
8"and over $3,567.00 $4,637.00 $6,028.00
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation,or the production and/or sale of water,to offset any such cost and thereby prevent other customers
from being compelled to share such local increases.
Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations- Service under this rate is subject to the Board of Water and Light Rules and
Regulations for Water Service which are incorporated herein by this reference.
Adopted:July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No.EB7
LARGE GENERAL ELECTRIC SERVICE
RATE NO.4
Availability-This rate is available to any customer desiring secondary voltage for any purpose when the
electrical requirements are supplied at one point of delivery through one metering installation and the billing
demand is 15 kW or more. The limitation to secondary-voltage service may be waived in instances where the
character of the electric load at the premises served has changed substantially. This rate is not available for
standby or emergency services.
Nature of Service-The service is alternating current,60 hertz, single phase or three phase. The secondary
voltage is determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $18.00 per customer per month
Capacity Charge $8.20 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0350 per kWh
Winter Billing Months of November through May
$0.0320 per kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh.
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering
installed in accordance with BWL Rules and Regulations regarding power factor.
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand-The billing demand shall be the kW supplied during the 15-minute period of maximum use
during the month.
Metering-Where the BWL elects to measure the service on the primary side of the transformer,the metered
kW and kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one metering installation, the consumption as
registered by the different metering installations will not be combined for billing purposes,but will be
computed and billed separately.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed
payment charges,shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Adopted:July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No.EB8
LARGE GENERAL ELECTRIC SERVICE
RATE NO. 4
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted:July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
4th Revised Sheet No.EB9
PRIMARY ELECTRIC SERVICE
RATE NO.5
Availability-This rate is available to any customer desiring primary voltage service when the electrical
requirements are supplied at one point of delivery through one metering installation(except as provided below
for Multiple Delivery Point Aggregation)and the billing demand is 100 kW or more. This rate is not available
for standby or emergency service.
Nature of Service-The service is alternating current, 60 hertz,three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $50.00 per customer per month
Capacity Charge $6.90 per kW for all kW of On-Peak Billing Demand, plus
$2.00 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0315 per kWh for all kWh during the On-Peak Period, plus
$0.0270 per kWh for all kWh during the Off-Peak Period,plus
Winter Billing Months of November through May
$0.0300 per kWh for all kWh during the On-Peak Period,plus
$0.0270 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering
installed in accordance with BWL Rules and Regulations regarding power factor.
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-
minute period of maximum use during the On-Peak Period during the month.
Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period
of maximum use during the month whether on-peak or off-peak.
Schedule of on-weak and off-peak periods-The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Penod.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
4th Revised Sheet No.EB 10
PRIMARY ELECTRIC SERVICE
RATE NO.5
Multiple Delivery Point Aggregation -The 15-minute period demands of multiple delivery points of a
customer may be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; (b)the total On-
Peak Billing Demand shall not be less than 4,000 kW; and(c)the customer shall agree to a service contract
with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a
period of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing
Demand only. All other charges, including the Basic Service Charge and Maximum Demand, shall apply to
each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers, the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for in Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing,installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No.EB 12
LARGE CAPACITY ELECTRIC SERVICE
RATE NO. 8
Availabilitv-This rate is available to any customer desiring primary voltage service when: (a)the electrical
requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point
Aggregation; (b)where the total On-Peak Billing Demand is 25,000 kW or more;and(c)the customer agrees
to a service contract with the BWL for the customer's full electrical service requirements at the applicable
delivery points for a period of not less than ten(10)years. This rate is not available for standby or emergency
service.
Nature of Service-The service is alternating current, 60 hertz, three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per delivery point per month
Capacity Charge $8.00 per kW for all kW of On-Peak Billing Demand,plus
$1.50 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0300 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period,plus
Winter Billing Months of November through May
$0.0288 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees,or any other charges against the Board's property,or
its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all
applicable delivery points during the 15-minute period of maximum use during the On-Peak Period
during the month. (See Multiple Delivery Point Aggregation.)
Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during
the 15-minute period of maximum use during the month whether on-peak or off-peak.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
First Revised Sheet No.EB 12-1
LARGE CAPACITY ELECTRIC SERVICE
RATE NO.8
Schedule of on-peak and off-peak periods -The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Multiple Delivery Point Aggregation -The 15-minute period demands of multiple delivery points of a
customer shall be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW;and
(b)the total On-Peak Billing Demand shall not be less than 25,000 kW. Aggregation shall be applicable for
determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and
Maximum Demand, shall apply to each delivery point independently.
Meterine-When the BWL elects to mcas-ure the service on the secondary side of the transforr-hers, the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges,shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
First Revised Sheet No. EB14-1
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Availability-This rate is available to any customer desiring primary voltage service under the following
conditions: (a)the electrical requirements are supplied at one point of delivery through one metering
installation(except as provided below for Multiple Delivery Point Aggregation); (b)the Maximum Demand is
1,000 kW or more; (c)heat derived from electricity is an integral part of the customer's manufacturing process;
(c) such process heating equipment has a total connected load of 1,000 kW or more, and accounts for at least
50%of total kWh consumption;(e)all, or a portion of, the process heating load,not less than 1,000 kW, is
curtailable; and(f)the customer agrees to a service contract with the BWL for the customer's full electrical
service requirements,including provisions for load curtailment,for a period of not less than ten(10)years.
This rate is not available for standby or emergency service.
Nature of Service-The service is alternating current, 60 hertz, three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthlv Rate- Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per customer per month
Capacity Charge $50.00 per kW for all Curtailment Period Demand in excess of
Firm Capacity
Energy Charge $0.0740 per kWh for the first 100 hours use of Maximum Demand,
plus
$0.0350 per kWh for the excess kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The minimum charge shall be the sum of(a)the Basic Service Charge, (b)the amount of$2.00 times the
Maximum Demand,and(c)the amount of$6.90 times the Firm Capacity.
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
EnerLv Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees,or any other charges against the Board's property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
Firm Capacity: is a specified capacity(in hundreds of kW)as set forth in the electric service
agreement with the BWL sufficient to meet the customer's requirements for non-curtailable service at
any time.
Curtailment Period Demand: is the kW supplied during the 15-minute period of maximum use
during any period of curtailment as defined by the electric service agreement with the BWL.
Maximum Demand: is the kW supplied during the 15-minute period of maximum use during the
month.
Adopted:July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
First Revised Sheet No.EB 14-2
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Multiple Delivery Point Aggregation-The 15 minute period demands of multiple delivery points of a
customer may be summed for determination of the total Curtailment Period Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; and(b)the total
Maximum Demand shall not be less than 4,000 kW. Aggregation shall be applicable for determination of the
Curtailment Period Demand and related charges only. All other charges, including the Basic Service Charge,
shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation,consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed sepamtely except as provided for Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming,controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted:July 29, 1997 Effective: September 1, 1997
Page 57
`77MINUTES OF BOARD OF COMMISSIONERS'MEETING -r
LANSING BOARD OF WATER AND LIGHT
} } 0 4
CITY CLERr;
Tuesday,July 29, 1997
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 the Chair, David O'Leary.
Present: Commissioners Christian, Graves, O'Leary,Royal, Strolle and Werbelow.
Absent: Commissioner Pratt
The Secretary declared a quorum present.
The invocation was delivered by the Chair.
The Pledge of Allegiance was said by all.
APPROVAL OF NU UTES
MOTION: On motion of Commissioner Christian and seconded by Commissioner Strolle,that the minutes
of regular meeting of June 24, 1997,be adopted as filed.
Carried unanimously.
ANNOUNCEMENT BY THE CHAIR
REGARDING ANNUAL ORGANIZATION
The July meeting is generally the time for the annual organizational meeting for the election of officers.
Nominations for officers are being postponed until such time the Chair determines the complement of the Board is
such that nominations are appropriate.
PUBLIC COMMENTS
CHAIR O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE
BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF THE
MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
Letter from Thomas J. Coates,President,Thomas J. Coates and Associates, Inc., dated June 23, 1997, stating his
continued interest in the Ottawa Power Street Station Redevelopment project.
Received and placed on file.
Board Minutes Page 58
July 29, 1997
Letter from J. Chris Holman,Partner, Ottawa Park Associates Developers(OPAD), dated June 26, 1997, thanking
the Board and staff for their cooperation and assistance with the Ottawa Street Power Station project, and
withdrawing their name as the developer of record for the project.
Received and placed on file.
COMMITTEE OF THE WHOLE REPORT
(Resolution 97-7-1)
The Committee of the Whole met on July 15, 1997. Agenda topics were:
1. To discuss Ottawa Power Station redevelopment issues,and
2. To receive reports on the Board of Water and Light(BWL)organization process
redesign.
Present were Commissioners Christian, Graves, O'Leary, Pratt,Royal, Strolle, and Werbelow.
Ottawa Power Station Redevelopment. With General Motors' (GM)recent decision to not relocate its two
Lansing area employee training centers to the Ottawa Station, the Board is now reviewing its options for the
redevelopment of the Ottawa Power Station. The Commissioners agreed to form a special committee comprised of
'ommissioners appointed by the Board Chair and three management staff members appointed by the General
to evaluate alternatives for the commercial redevelopment project. General Manager Pandy excused
_..aL�:ii from discussions on the project because of his business dealings with developers interested in the project.
The charge of the special committee is to meet with the development team of Thomas J. Coates and Associates to
review the firm's proposal submitted September 1995, and to outline the obstacles identified by the Board in their
initial selection process. Mr. Coates has expressed the firm's continued interest in the redevelopment project in the
event negotiaLc.i:s between the Ottawa Park Associates Developers(OPAD)and GM were not successful. The
special commit,_-.z is also being asked to evaluate whether or not to open negotiations with the Coates team or to
reopen the project to other developers. The committee's recommendation is to be presented to the Board for
consideration.
Process Redesign Reports. Last fall BWL employees developed the organization's new Vision Statement which
xwes on employee and customer partnerships to secure customer loyalty and meet the challenge of competition.
This effort culminated into the formation of four process redesign teams who have been involved over the last
several months in putting the vision statement into action. Leaders from each of the teams provided an executive
overview of the following four processes:
• Sell/Bill-The team emphasized providing desired products and services through a single
point of contact wherever the customer exists.
• Produce/Procure-The team focused on two core processes for producing the BWL's three
current utility processes of water,electricity and steam. They include production of
steam/electric and water.
• Deliver-The team identified opportunities to achieve greater efficiencies in the delivery
processes of each of the three BWL utility services for maximum benefit to end-use
customers.
Page 59 Board Minutes
July 29, 1997
• Support-The team identified seven basic support services to be provided to the organization
and to process owners. They include: Financial, Information,Engineering,Human
Resources,Materials/Services, and EnvironmentabUealth/Safety.
General Manger Pandy presented a preliminary organization chart showing how the BWL may organize
around its major processes. The chart identifies four major process areas, a new ventures team and a craft
center(craft center process owners to be IBEW union representatives)that would supply trades-related
services to the processes. In addition, the General Manger would have a chief financial officer reporting
directly to him, as well as legal,audit and communications officers. The General Manager would also be
served by an advisory council that would provide him with feedback on how the processes are serving
BWL customers. A Human Resources team will be submitting a list of job qualifications to begin filling
the process owner positions at the top of the organization. A tentative schedule calls for phasing in
process teams incrementally starting August 1.
Respectfully submitted,
John Strolle, Chair Pro Tern
Committee of the Whole
MOTION: Commissioner Christian moved, seconded by Commissioner Strolle,to approve the Committee of
the Whole Report as presented.
Discussion-Special Committee Appointments
Chair O'Leary announced that he would like to add an additional Commissioner to the special Ottawa
Station development committee, taking it from three to four members of the Board. The question as to
whether or not four Commissioners serving on the special committee constitutes a quorum of the board
under the Open Meetings Act was taken under advisement by Staff Attorney Wilhite. The eight-member
Board currently has an open seat,created by the recent death of Commissioner William Lontz.
SPECIAL COMMITTEE APPOINT,mENTs
Commissioners Staff
1. Ernest Christian, Chair 5. Treasurer/Controller Dana Tousley
2. Joseph Graves, Jr. 6. Technical Services Director John Elashkar
3. Judson Werbelow 7. Staff Attorney Larry Wilhite
4. Peter Pratt
Discussion-Process Redesign:
The Commissioners discussed management's process redesign efforts. There was agreement that improving
services to customer must continue to be the BWL's top priority. The Board indicated they would support
committing more resources to technology to enable the Board of Water and Light to serve its customers better. The
Commissioners requested additional information on the process redesign with practical examples on how the
reorganization strategy will be implemented.
The Committee of the Whole Report was approved by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Board Minutes Page 60
July 29, 1997
GENERAL MANAGER'S RECOMMENDATIONS
TREASURER/CONTROLLER
Res. No.97-7-2
Authorize the sale of obsolete Board-owned vehicles and equipment through competitive bids. The items are BWL
Unit Numbers 1, 8,21,62,64, 71,78, 124, 125,152,165, 169, 196, 225,512, 526, 542, 569, 578, 580,610, 612,
638, 711,723,724,725, 736, 806, 807, 852, 863, and 873.
An itemized list is on file with the Corporate Secretary,
MOTION: On motion of Commissioner Christian,seconded by Commissioner Werbelow,
Resolution 97-7-2 was adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Res.No.97-7-3
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 July 31, 1998. 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 Quantity Annual Cost
Commodity (Est.) Unit Cost (Est.) Vendor
Hydrofluosilicic Acid 200 tons $134.00/ton $ 26,800.00 L C I Limited
Pebble Quicklime 15,000 tons 61.25/ton 918,750.00 Marblehead Lime Co.
Soda Ash 1,800 tons 140.00/ton 252,000.00 O C I Corp.
Granulated Salt 400 tons 71.25/ton 28,500.00 Morton Salt Division
Sulfiuic Acid 630 tons 64.00/ton 40,320.00 Marsulex,Inc.
Caustic Soda 175 tons 315.18/ton 55,156.50 K.A. Steel Chemicals,
Inc.
Sodium Hypochlorite 125,000 gal. .4620/gal. 57,750.00 K.A. Steel Chemicals,
Inc.
Blended Phosphate 15,000 gal. 7.65/gal. 114,750.00 Elhorn Engineering Co.
Total: $1,494,026.50
Page 61 Board Minutes
July 29, 1997
MOTION: On motion of Commissioner Christian, seconded by Commissioner Werbelow,Resolution
97-7-3 was adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Res. No.97-74
Water and Electric Rate Changes
Whereas,proposed rate changes were filed with the City Clerk on May 28, 1997, and,
Whereas,the rate changes eliminate ratchet provisions in the affected electric rates and remove the requirement
for payment before construction begins in the water rate, and,
Whereas, a Public Hearing on the proposed rate changes was subsequently held on July 15, 1997.
THEREFORE,BE IT RESOLVED,That the following electric and water rate schedules(attached)be adopted
and applied to all electricity or water used or services rendered on or after September 1, 1997.
Rate 3 Water System Connection Fees
Rate 4 Large General Electric Service
Rate 5 Primary Electric Service
Rate 8 Large Capacity Electric Service
Rate 10 Process Heating Electric Service
BE IT FURTHER RESOLVED,That the following electric and water rate schedules now in effect be rescinded
for billing purposes, for any electricity or water used or services rendered on or after September 1, 1997.
Effective
Rate 3 Water System Connection Fees 01-01-94
Rate 4 Large General Electric Service 01-01-97
Rate 5 Primary Electric Service 01-01-97
Rate 8 Large Capacity Electric Service 01-01-97
Rate 10 Process Heating Electric Service 01-01-97
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Graves,Resolution 97-7-4 was
adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Board Minutes Page 62
July 29, 1997
WATER
Res. No. 97-7-6
That the Board agree to serve water to proposed Water District No. 131,Delhi Township,as requested by
resolution of the Delhi Charter Township on December 3, 1996, 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. 131 established by Township and will provide a potable
water supply to said district.
2. The Township will be required to make a$39,142.50 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 CXXXI)covering the
furnishing of a potable water supply in Water District No. 131.
4. Watermains 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$39,142.50 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 CXXXI)to furnish a potable water supply in Water District No.
131.
The geographical area of Water District No. 131 is as follows: College Heights Estates Phase 6,Lots
110 through 133.
To provide a potable water supply within the proposed new district requires the installation of 1,535 feet
of watermain and fire hydrants at an estimated cost of$39,142.50. The main extension will serve twenty-
four(24) residential customers. A one-time connection fee will amount to$22,632.00. The estimated
annual revenue is$8,160.00.
Watermains to be installed in Summer/Fall of 1997 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
MOTION: On motion of Commissioner Christian, seconded by Commissioner Graves,Resolution
97-7-6 was adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Paee 63 Board Minutes
July 29, 1997
Res. No.97-7-7
That the Board delegates to the General Manager authority to extend water service within the geographic
boundaries of governmental units or with agencies for which the Board has authorized a retail or wholesale Water
Service Agreement.
That the General Manager and Corporate Secretary,or their respective designated representatives, are authorized
to take all necessary actions to enter into and administer Supplemental Agreements and Amendments for the
purpose of extending water service within such governmental units.
That the Board authorizes the use of a simple payback methodology as follows: The simple payback for a water
system extension shall be computed as the length of time required for all projected revenues from the service
extension to be numerically equal to the expenditures for that extension. Projected revenues shall include but not
be limited to Contribution-in-Aid of Construction, Connection Fees(Rate 3),revenues from the sale of water
(Rates 1 and 2),Fire Hydrants and Services(Rate 4),and any other fee or charge assessed by the BWL against the
governmental unit or customers served by the extension. Revenue projections shall take into account the
anticipated density and type of customers,and the rate at which development is reasonably expected to occur.
That in any case where the simple payback methodology exceeds 10 years,staff is directed to file,within 90 days of
agreeing to extend service,a written report with the Board providing sufficient detail to justify the decision to
extend.
That the Board specifically reserves the right to authorize retail or wholesale Water Service Agreements in
governmental units or with agencies for which no retail or wholesale Water Service Agreement exists.
This resolution will provide a faster turn-around of requests for water service within the geographic boundaries of
governmental units or agencies for which the Board has authorized a water service agreement.
Historically, water system extensions within the City of Lansing and the former Landel Metropolitan District have
been authorized through the capital budget, while those in other areas have been presented for specific
authorization by the Board. Through this resolution the Board will establish a consistent policy for approval of
water system extensions within areas the Board has authorized its water utility to serve. The Board will retain
control of the overall level of expenditure through the Capital Budget process.
Water Service Agreements are in effect for the following governmental units at the time this resolution is
presented:
Retail: Delhi Township,DeWitt Township, Watertown Township,
Windsor Township and the former Landel Metropolitan District
(Lansing Township's east side).
Wholesale: Delta Township,and Lansing Township(West Side Water).
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-7-7,
was adopted by the following vote:
YEAS: Christian, Graves, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Pratt
Board Minutes Page 64
July 29, 1997
UNFINISHED BUSINESS
There was no unfinished business.
NEW BUSINESS
There was no new business.
RESOLUTION
APPOINTMENT OF CHARTER STAFF POSITIONS
(Resolution 97-7-8)
BY THE BOARD OF COMMISSIONERS
WHEREAS,the rules of procedure of the Board of Commissioners specify that the Board shall appoint each of the
three staff positions reporting to the Board at its first regular meeting in July of each year,be it
RESOLVED,the Board of Commissioners hereby reappoints the following staff positions for the ensuing fiscal
year, or,until a successor is appointed,whichever last occurs:
Director and General Manager -Joseph Pandy,Jr.
Internal Auditor -Kellie Willson
Corporate Secretary -Mary Sova
MOTION: On motion of Commissioner Strolle,seconded by Commissioner Christian,Resolution 97-7-8
was adopted by the following vote:
YEAS: Christian, Graves, Strolle,O'Leary,Royal,Werbelow
NAYS: None
ABSENT: Pratt
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Steel Blanking and Distribution Operation in Delhi Township selects CMS Energy for Electric Supply-
General Manager Pandy reported that negotiations to secure the electric supply load of the Regional Steel
Distribution Center(RSDC)in Delhi Township were unsuccessful. CMS Energy offered RSDC a new economic
development rate, subject to Public Service Commission approval,that undercut the Board of Water and Light's
(BWL)energy rate. Mr.Pandy noted that it is his sense that CMS took an aggressive marketing posture to keep
Page 65 Board Minutes
July 29, 1997
the BWL out of that area because of the growth potential in that section of Delhi Township. Discussion followed
regarding competition and deregulation issues with respect to municipal utilities.
Consumers Energy and Stranded Costs. General Manager Pandy handed out an article which appeared in the
July 21, 1997, edition of Electric Utility Weekly. The essence of the article is that Consumers Energy is willing to
auction off the rights to portions of its Michigan-based, non-utility generating capacity each year from 1998 until
2007 in an effort to link stranded-cost recovery to the market price of power.
Standard &Poor's Revised Business Profile Scale for Public Power. General Manager Pandy presented an
overview of Standard&Poor's recently published revised business profiles for public power and rural electric
cooperative sectors and the investor owned electric utilities which appeared in the July 14, 1997, edition of Credit
Week Municipal. They revised the scoring system of their business profiles to a 10 point scale from the five point
scale first applied in 1995. This enhancement was promoted, in part,by the changes sweeping the electric industry
and the emergence of disaggregated utility systems. Mr.Pandy noted that the credit rating of the Board of Water
and Light was at AA,with a"stable" outlook, and a favorable Business Profile ranking of 4 (most favorable score
being"1" -"4")—assigned to systems whose exposure to market forces is limited. Utilities assigned scores of"5"-
"8" are the most likely to face formidable challenges in the rapidly evolving marketplace. The assignment and
review of business profiles include the following factors: management, operations,competitive position,markets,
and regulation. Mr. Pandy noted that the investor owned utilities generally score"5" or higher which indicates
they will face challenges in a competitive environment.
Customer Attitude Survev. Communications Director John Strickler presented an executive summary of this
summer's customer attitude survey conducted by Market Strategies, Inc. (MSI)of Southfield,Michigan. The
findings indicate that the BWL's favorability was maintained at 83 percent. An overall favorability is described as
the BWL's market position, depicting how customers feel about the BWL and the image the organization has in
the community. Overall satisfaction showed minor shifts,with a two percent drop in electric and a five percent
gain in water. Loyalty showed a four percent drop with 76%indicating they would remain with the BWL if
another utility offered electricity at the same price. Significant improvements were noted in concern,believability
and environmental protection. Ratings on these measures are also higher among customers who are aware of the
Motor Wheel Disposal Site story. Mr. Strickler noted that this suggests that the BWL's public responses to the
Motor Wheel disposal situation were appropriate. The survey numbers also showed a drop in perceived value of
electricity for the price and the value of customer service for the price. The value results in this area appear
inconsistent and are being treated as an irregularity at this time. Mr. Strickler reported that MSI is developing a
more detailed model which examines the relationships between the perceived performance of the BWL on various
specific activities and characteristics and specific outcomes of interest to the BWL. More information will be
forthcoming once the detailed analysis of the modeling results are received.
REMARKS BY COMMISSIONERS
Commissioner Werbelow inquired on the status of the proposed BWL evaluation being initiated by the City
Council Ways and Means Committee.
General Manager Pandy responded that the Ways and Means Committee is considering a proposal from Energy&
Resources Consulting Group,a successor to SVBK. As of this week BWL staff is not aware that a response has
been received by the Ways and Means Committee from the Energy&Resources group. Staff will continue to
monitor the disposition of this project and will keep the Board informed.
Chairman O'Leary reported that he had a discussion with Gary Granger of Capitol Annex,L.L.C. relative to the
purchase of the Board of Water and Light office building at 123 W. Ottawa Street. Mr. Granger has indicated that
he feels very positive about the legislature's interest in the purchase of the office building. He feels that the
September 10, 1997, deadline imposed by the Lansing City Council(Resolution 105)is still a reasonable time
frame.
Board Minutes Page 66
July 29, 1997
Chairman O'Leary also informed the Board that reporters from WILX-TV Channel 10 stopped by his office on
July 30, 1997,for an update on the Ottawa Street Power Station project. They were given the latest report on the
special committee appointed to study Ottawa Station's redevelopment options.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
Moved by Commissioner Werbelow, seconded by Commissioner Christian, that the absence of Commissioner Pratt
be excused.
Adopted unanimously.
ADJOURNMENT
Moved by Commissioner Graves, seconded by Commissioner Strolle at 6:50 p.m.,to adjourn the meeting.
Adopted unanimously.
Mary E. Secretary
Filed: August 1, 1997
Marilynn Slade, City Clerk
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No. W135
WATER SYSTEM CONNECTION FEES
RATE NO.3
System Connection Fees-The following schedule of fees shall apply to all new water service connections
made to the mains. This fee shall not apply to active services which are being replaced.
Service Size Connection to
Main 1/1/94 1/1/95 1/1/96
3/4" $672.00 $715.00 $740.00
1" $806.00 $911.00 $943.00
1'/," or 1'/2" $1,075.00 $1,171.00 $1,212.00
2" $1,330.00 $1,663.00 $1,953.00
3" $1,890.00 $2,363.00 $2,954.00
4" $2,380.00 $2,975.00 $3,719.00
6" $3,430.00 $4,288.00 $5,360.00
8"and over $3,567.00 $4,637.00 $6,028.00
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation, or the production and/or sale of water,to offset any such cost and thereby prevent other customers
from being compelled to share such local increases.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment cha>ges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and
Regulations for Water Service which are incorporated herein by this reference.
Adopted:July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No.EB7
LARGE GENERAL ELECTRIC SERVICE
RATE NO.4
Availabilitv-This rate is available to any customer desiring secondary voltage for any purpose when the
electrical requirements are supplied at one point of delivery through one metering installation and the billing
demand is 15 kW or more. The limitation to secondary-voltage service may be waived in instances where the
character of the electric load at the premises served has changed substantially. This rate is not available for
standby or emergency services.
Nature of Service-The service is alternating current, 60 hertz, single phase or three phase. The secondary
voltage is determined by the Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $18.00 per customer per month
Capacity Charge $8.20 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0350 per kWh
Winter Billing Months of November through May
$0.0320 per kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh.
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering
installed in accordance with BWL Rules and Regulations regarding power factor. r
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees,or any other charges against the BWL property,or
its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand -The billing demand shall be the kW supplied during the 15-minute period of maximum use
during the month.
Metering-Where the BWL elects to measure the service on the primary side of the transformer,the metered
kW and kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one metering installation, the consumption as
registered by the different metering installations will not be combined for billing purposes,but will be
computed and billed separately.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed
payment charges,shall be added to any bill that is not paid on or before the due date.
Application Charee-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No. EB8
LARGE GENERAL ELECTRIC SERVICE
RATE NO. 4
Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
4th Revised Sheet No.EB9
PRIMARY ELECTRIC SERVICE
RATE NO. 5
Availabilitv-This rate is available to any customer desiring primary voltage service when the electrical
requirements are supplied at one point of delivery through one metering installation(except as provided below
for Multiple Delivery Point Aggregation)and the billing demand is i00 kW or more. This rate is not available
for standby or emergency service.
Nature of Service-The service is alternating current, 60 hertz, three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges:
Basic Ser rice Charge $50.00 per customer per month
Capacity Charge $6.90 per kd� or all kW of On-Peak Billing Demand, plus
$2.00 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0315 per kWh for all kWh during the On-Peak Period, plus
$0.0270 per kWh for all kWh during the Off-Peak Period, plus
Winter Billing Months of November through May
$0.0300 per kWh for all kWh during the On-Peak Period, plus
$0.0270 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh) metering
installed in accordance with BWL Rules and Regulations regarding power factor.
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation,or the production and/or sale of electrical energy,to off6. ..� such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-
minute period of maximum use during the On-Peak Period during the month.
Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period
of maximum use during the month whether on-peak or off-peak.
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
4th Revised Sheet No.EB 10
PRIMARY ELECTRIC SERVICE
RATE NO. 5
Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a
customer may be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; (b)the total On-
Peak Billing Demand shall not be less than 4,000 kW; and(c)the customer shall agree to a service contract
with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a
period of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing
Demand only. All other charges, including the Basic Service Charge and Maximum Demand, shall apply to
each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers, the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for in Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming,controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No.EB12
LARGE CAPACITY ELECTRIC SERVICE
RATE NO.8
Availability-This rate is available to any customer desiring primary voltage service when: (a)the electrical
requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point
Aggregation; (b)where the total On-Peak Billing Demand is 25,000 kW or more; and(c)the customer agrees
to a service contract with the BWL for the customer's full electrical service requirements at the applicable
delivery points for a period of not less than ten(10)years. This rate is not available for standby or emergency
service.
Nature of Service-The service is alternating current, 60 hertz,three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per delivery point per month
Capacity Charge $8.00 per kW for all kW of On-Peak Billing Demand,plus
$1.50 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0300 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period,plus
Winter Billing Months of November through May
$0.0288 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Enerey Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees,or any other charges against the Board's property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all
applicable delivery points during the 15-minute period of maximum use during the On-Peak Period
during the month. (See Multiple Delivery Point Aggregation.)
Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during
the 15-minute period of maximum use during the month whether on-peak or off-peak.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
First Revised Sheet No.EB12-1
LARGE CAPACITY ELECTRIC SERVICE
RATE NO. 8
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a
customer shall be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW; and
(b)the total On-Peak Billing Demand shall not be less than 25,000 kW. Aggregation shall be applicable for
determination of the On-Peak Billing Demand only. All other charges, including the Basic Service Charge and
Maximum Demand, shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers, the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation,consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming,controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
First Revised Sheet No. EB14-1
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Availability-This rate is available to any customer desiring primary voltage service under the following
conditions: (a)the electrical requirements are supplied at one point of delivery through one metering
installation(except as provided below for Multiple Delivery Point Aggregation); (b)the Maximum Demand is
1,000 kW or more; (c)heat derived from electricity is an integral part of the customer's manufacturing process;
(c) such process heating equipment has a total connected load of 1,000 kW or more, and accounts for at least
50%of total kWh consumption; (e)all, or a portion of, the process heating load,not less than 1,000 kW, is
curtailable; and(f)the customer agrees to a service contract with the BWL for the customer's full electrical
service requirements, including provisions for load curtailment,for a period of not less than ten(10)years.
This rate is not available for standby or emergency service.
Nature of Service-The service is alternating current, 60 hertz,three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate- Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per customer per month
Capacity Charge $50.00 per kW for all Curtailment Period Demand in excess of
Firm Capacity
Energy Charge $0.0740 per kWh for the first 100 hours use of Maximum Demand,
plus
$0.0350 per kWh for the excess kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The minimum charge shall be the sum of(a)the Basic Service Charge, (b)the amount of$2.00 times the
Maximum Demand, and(c)the amount of$6.90 times the Firm Capacity.
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
EnerEy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
Firm Capacity: is a specified capacity(in hundreds of kW)as set forth in the electric service
agreement with the BWL sufficient to meet the customer's requirements for non-curtailable service at
any time.
Curtailment Period Demand: is the kW supplied during the 15-minute period of maximum use
during any period of curtailment as defined by the electric service agreement with the BWL.
Maximum Demand: is the kW supplied during the 15-minute period of maximum use during the
month.
Adopted:July 29, 1997 Effective: September 1, 1997
Board of Water and Light,Lansing,Michigan
First Revised Sheet No.EB14-2
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Multiple Delivery Point Aggregation-The 15 minute period demands of multiple delivery points of a
customer may be summed for determination of the total Curtailment Period Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW;and(b)the total
Maximum Demand shall not be less than 4,000 kW. Aggregation shall be applicable for determination of the
Curtailment Period Demand and related charges only. All other charges, including the Basic Service Charge,
shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation,consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: July 29, 1997 Effective: September 1, 1997
r
Page 45
MINUTES OF BOARD OF COMMISSIONERS' MEETING+
LANSING BOARD OF WATER AND LIGHT-'-'?
30 !.Fr; 36
1 iS1.lG CITY CLERKTuesday,June 24, 1997
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 O'Leary.
Present: Commissioners Christian, Graves, O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: None
The Secretary declared a quorum present.
The irivocador,was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
MOTION: On motion of Commissioner Christian and seconded by Commissioner Strolle,that the minutes
of rescheduled regular meeting of May 20, 1997,be adopted as filed.
Carried unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF
THE MEETING.
Eugene Buckley, 818 N. Hayford Street, Lansing,urged the Board to establish a policy and procedure for
customers to not have their phone numbers given out to telemarketers. Mr. Buckley noted that ATT and
Ameritech have procedures in place to address privacy concerns raised by customers contacted by unwel.comed
solicitors.
General Manager Pandy responded that the BWL has made it a practice to not provide lists of customers' addresses
or telephone numbers to telemarketing groups of any type. To address customer concerns of this nature, staff will
prepare a procedure that protects the privacy of individuals who wish to be excluded from any mandated turnover
of customer list. Mr. Pandy assured Mr. Buckley that his customer record will include a notation on the computer
screen indicating that he has requested to not have his address and phone number released.
COMMUNICATIONS AND PETITIONS
A letter of thanks was received from Brian T. Cooper,BWL Administrator of Utility Support Services, for his
recognition in becoming a member of the Board of Water and Light 25 Year Club.
Placed on file.
1
Board Minutes Page 46
June 24, 1997
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on June 10, 1997, to discuss the following items:
1. Electric Utility Deregulation,
2. Dimondale Dam,
3. Fiscal 1997-98 Budget, and
4. Proposed Electric and Water Rate Changes.
Present were Commissioners Christian, Graves, O'Leary, Pratt,Royal, Strolle, Werbelow.
Electric Utility Deregulation. Bill Cook, Director of Electric System Control, reported that a task force has been
formed in the Michigan legislature to draft electric utility restructuring legislation. A draft of the legislation is
expected by this fall for finalization by Thanksgiving. Mr. Cook presented an executive summary of the following
electric restructuring policy issues to be addressed by the Board:
• Municipal Exemption to Direct Access
• "Opt In" to Direct Access
• Protecting Distribution Customer Base
• Franchises for Alternative Suppliers
• Stranded Costs
• Securitization
• Reciprocity
After lengthy discussion on the supporting and opposing arguments for each issue, the Commissioners agreed to
review and further study the proposed recommendations for consideration. There was consensus that the Board
needs to set goals to help deal with the changes that competition will bring to our industry. Public power must
demonstrate its ability to compete while also speaking forcefully against proposals that do not logically
demonstrate significant benefits and adequate protections to ultimate consumers.
Dimondale Dam Update. At the Committee of the Whole meeting held May 20, 1997, staff reported that two
conceptual proposals are being negotiated with the Village of Dimondale. Technical Services Director John
Elashkar presented an update on the proposed design and cost estimates to be presented to the Village on June 16
for further negotiations. Formal agreement is subject to approval by the Board of Commissioners and the Lansing
City Council.
Fiscal 1997-98 Budget. The revised Fiscal 1997-98 budget was presented by Treasurer/Controller Dana Tousley
with the changes discussed at the Committee of the Whole meeting held May 20, 1997. The revised budget was
received for information and filed with the City Clerk on May 28, 1997.
Proposed Electric and Water Rate Changes. Proposed electric and water rate change documents disseminated
to the public were received from Treasurer/Controller Dana Tousley. The following changes are under
consideration at the scheduled public hearing set for July 15, 1997, at 5:30 p.m.:
1. the elimination of ratchet clauses from Electric Rate Schedules 4, 5, 8 and 10, and
2. the elimination of an up-front payment for connection to the water system from Water
Rate Schedule No. 3.
John Strolle, Chair Pro Tern
COIvIIv=E OF THE WHOLE
Page 47 Board Minutes
June 24, 1997
MOTION: On motion of Commissioner Christian, seconded by Commissioner Werbelow, the Committee of
the Whole Report was adopted by the following vote:
General Manager Pandy handed out a copy of an opinion received from Dickinson, Wright, Moon, Van Dusen&
Freeman. dated June 20, 1997, relative to the General Motors Electric Service Agreement and the issue with
respect to"ratchet clauses." The opinion was submitted in preparation for the public hearing to be held July 15,
1997.
The motion was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on June 24, 1997, to consider the non-bargaining compensation for Fiscal Year
1998.
Committee members present were Commissioners Graves, O'Leary, Pratt, and Strolle(Chair). Also in attendance
was Commissioner Werbelow.
Human Resources Director Linda Gardner and Employment and Compensation Administrator Steve Polio
presented analysis for changes in compensation for Non-Bargaining Unit employees for Fiscal Year 1998. Staff
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) receiving input from the non-Bargaining Unit Compensation Committee, and(5)considering the BWL's ability
to pay. After much discussion, the Committee concurred with the following recommendation:
BY THE PERSONNEL COMMITTEE:
Non-Bargaining Compensation
(Resolution 97-6-9)
RESOLVED, That effective July 1, 1997:
1. All Non-Bargaining Unit salary ranges be increased 3.0%for Fiscal Year 1998;
2. All current Non-Bargaining Unit employees in full-time positions receive a 3.0%
General Increase, and that all Clerical-Technical (CT)employees in full-time positions
have their performance increases administered according to existing policy;
3. A broad matrix be established for non-CT employees to administer performance
increases;
4. All current part-time employees receive a 3.0%General Increase rounded up to the next
full nickel.
John Strolle, Chair
PERSONNEL COMMITTEE
Board Minutes Page 48
June 24, 1997
MOTION: On motion of Commissioner Royal. seconded by Commissioner Graves, the Personnel
Committee Report and Resolution 97-6-9 regarding the Wage and Salary Recommendations for
Non-Bargaining employees,were adopted by the following vote:
YEAS: Christian, Graves, Pratt, Strolle, O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No. 97-6-1
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.
1997
Julv 22 -Tuesday
August 26 -Tuesday
September 23 -Tuesday
October 28 -Tuesday
November 25 -Tuesday
December 16 -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 June 29, 1997.
MOTION: On motion of Commissioner Christian, seconded by Commissioner Strolle, Resolution 97-6-1
was adopted by the following vote::
YEAS: Christian, Graves, Pratt, Strolle,O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
Res. No. 97-6-2
It is recommended that:
I. The Flexible Spending Account(FSA)be continued and that the contract with the TPA/United HealthCare
Administrators, Inc., for administration of FSA be continued.
Page 49 Board Minutes
June 24, 1997
II. The following Share the Success (STS)Bonus Options be approved for FY 1997/98:
1. Deferred Cash No change
2. Purchase of Vacation * No change
3. Purchase of Free Choice * No change
4. Deferred Compensation(457) No change
5. FSA(Flexible Spending Account) No change
6. Charitable Contributions Capital Area Response Effort&
Child Abuse Prevention Services
7. Long Term Disability Program Open enrollment for"buy-up"options
8. Cancer, Intensive Care, AFLAC Plan No change
*Purchase of Vacation&Free Choice will be limited to ten (10)total days to include no
more than two(2)Free Choice days.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian, to adopt Resolution
97-6-2 as submitted.:
General Manager Pandy presented an overview of the Flexible Spending Account(FSA)and the Share the Success
(STS)program at the request of Commissioner Werbelow. Following discussion, the Commissioners agreed that a
future Committee of the Whole presentation on how the STS program performance measures are determined would
be helpful for the newer Commissioners.
Resolution 97-6-2 was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
Res. No. 97-6-3
It is recommended that:
The recommendation for Performance Measures for FY 1996/97 Share the Success Plan(STS)be approved.
That the employees be eligible to receive a Performance Bonus of up to 5%as determined by final points for FY
1997/98.
If all goals and targets are reached, BWL will realize a financial impact of$3,487,366 based on the three financial
measures. The employees will earn up to 500 points on a 5.0%STS bonus equal to$1,743,683 with the net
financial impact to BWL being$1,743,683. The other eight(8) measures have a financial impact which is not
quantifiable. (See attached Summary FY 1997/98 from the STS Performance Measures Committee).
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Pratt,Resolution 97-6-3 was
adopted by the following vote:
YEAS: Christian, Graves, Pratt, Strolle, O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
Board Minutes Page 50
June 24, 1997
Res. No. 97-6 4
That the Board authorize the establishment of a voluntary charitable contribution(positive check off)whereby
customers may choose to add$1.00 or more to their monthly utility bill to be utilized to assist in the payment of
utility bills of needy BWL customers.
Further, that the General Manager is authorized to establish appropriate accounts and agreements with assistance
agencies to administer the utility assistance program.
This will provide an additional means for needy customers to receive assistance in payment of utility bills.
General Manager Pandy noted that staff determined that the positive check off methodology for$1.00 created less
administrative costs to implement than a positive roundup for an amount less than$1.00. Commissioner Pratt
commented that a study has indicated people tend to favor the roundup option over the$1.00 check off. Following
discussion, the Board concurred that administrative burden is a legitimate consideration.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian, Resolution 97-6-4
was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
TREASURERICONTROLLER
Res. No. 97-6-5
That the Board pay$6,069,006 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, 1996 to the Special Project Fund for future capital projects.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Graves,Resolution 97-6-5 was
adopted by the following vote:
YEAS: Christian, Graves, Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
Page 51 Board Minutes
June 24, 1997
WATER
Res. No. 97-"
That the Board agree to serve water to proposed Water District No. 130,Delhi Township,as requested by
resolution of the Delhi Township Board on May 6, 1997, 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. 130 established by Township resolution, and will provide a potable
water supply to said district.
2. The Township will be required to make a$58,341.05 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 CXXX)covering the
furnishing of a potable water supply in Water District No. 130.
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$58,341.05 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 CXXX)to furnish a potable water supply in Water District No. 130.
The geographical area of Water District No. 130 is as follows:
Apple Ridge Estates, Lots 1 through 20.
To provide a potable water supply within the proposed new district requires the installation of 2185 feet of
watermain and fire hydrants at an estimated cost of$68,616.05. Delhi Township acknowledges the portion of
$58,341.05 of the cost of said project. Due to the required watermain oversizing, BWL's oversizing cost will be
$10,275.00. The main extension will serve twenty(20) residential customers. A one-time connection fee will
amount to$18,860.00. The estimated annual revenue is$6,800.00.
Watermains to be installed in Summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
This project is contiguous to Water District No. 128 and will be constructed in conjunction with.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian, Resolution 97-"
was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
Board Minutes Page 52
June 24, 1997
UNFINISHED BUSINESS
MOTION: Moved by Commissioner Werbelow, seconded by Commissioner Christian,that Resolution
97-4-3 known as the"Board of Water and Light Home Ownership Program for Employees,"
adopted by the Board on April 29, 1997, be rescinded and replaced with newly revised
Resolution 97-6-7 -"Board of Water and Light Home Ownership Program" as presented below:
(Resolution 97-6-7)
BOARD OF WATER AND LIGHT HOME OWNERSHIP PROGRAM
FOR EMPLOYEES
WHEREAS, Councilmember Paul Novak has requested the Board of Water and Light to undertake a program to
increase the number of Board of Water and Light employees who own and live in homes within the City of
Lansing, and
WHEREAS, the Board of Water and Light Commissioners have determined that such a program is in the best
interests of the Board of Water and Light.
NOW, THEREFORE,IT IS RESOLVED,That the Board of Water and Light Commissioners authorize and direct
the General Manager to develop and implement a program to encourage full-time Board of Water and Light
employees to acquire and reside in homes located in the City of Lansing.
IT IS FURTHER RESOLVED, That this approval is subject to engaging in any necessary collective bargaining
with employees represented by unions.
IT IS FURTHER RESOLVED,That Fifty Thousand Dollars ($50,000)be allocated annually for three years
effective with Fiscal Year 1997-98 for this program.
IT IS FURTHER RESOLVED, That the maximum amount to be advanced to any one Board of Water and Light
employee shall not exceed Five Thousand Dollars($5,000). Up to One Thousand Dollars ($1,000)per year of the
amount advanced to a Board of Water and Light employee may be forgiven under conditions established by the
General Manager, and the General Manager shall not be eligible to participate in the program.
IT IS FURTHER RESOLVED,That if the General Manager determines that the objectives of the program will be
advanced by participation in the matching program of the Local Initiatives Support Corporation(LISC), the Board
of Water and Light shall participate in the LISC matching program, to the extent determined by the General
Manager.
IT IS FURTHER RESOLVED, That the General Manager shall report to the Board of Water and Light
Commissioners at least semi-annually on the status of the home ownership program authorized by this resolution.
Commissioner Royal raised a point for clarification. She asked if employees participate, does that create a pool of
money which allows more applicants to come into the program or does it increase the amount to any one of the ten
(10) applicants.
Page 53 Board Minutes
June 24, 1997
General Manger Pandy responded that the$5,000 the BWL is allocating to the program is extended as a
homeownership incentive in the form of compensation. One fifth of that amount is forgiven each year for five(5)
years. Consequently, if$5,000 is allocated to someone moving into one of the targeted community development
areas, $1,000 of the$5,000 is forgiven each year or treated as compensation. The match comes from the Local
Initiatives Support Corporation(LISC); given to the same individual who received the first$5,000 as money for
rehabilitation of the targeted house for remodeling,restoration and fix up in the form of a low interest loan, to be
repaid to LISC. In summary, the$5,000 the BWL allocates is a forgivable grant, and the other$5,000 is a loan
that must be repaid.
Resolution 97-6-7 was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
MOTION: Moved by Commissioner Werbelow, seconded by Commissioner Royal, that the following
described property pulled from the regular meeting agenda of May 20, 1997, be approved as
presented:
(Resolution 97-6-8)
TO DECLARE CERTAIN PROPERTY ON WEXFORD ROAD AS SURPLUS
It is recommended that:
The following described property situated on Wexford Road,Lansing,be declared surplus and not required for
Board of Water and Light Operations:
A part of a parcel of land deeded to the Lansing Board of Water and Light(Said deed recorded in
Liber 2158,Pages 408-409 of Ingham County Deeds),being described as follows: Beginning at a
point that is on the East Line of Lot 20 of"Maple Grove Farms No. 1", Liber 8, Page 24, Ingham
County Plats, and said Point of Beginning being 68 feet North of the Southeast Lot Corner,
thence Westerly along a line parallel to the South Line of Lot 20 300 feet;thence Southerly
parallel to the East Line of Lots 20 & 19 200 feet, more or less, to the South Line of Lot 19;
thence Westerly along the South Line of Lot 19 402.7 feet. more or less, to the Southwest Corner
of Lot 19; thence Northerly along the West Line of Lots 19, 20&21 396 feet, more or less, to the
Northwest Corner of Lot 21: thence F,asterly along the North Line of Lot 21603.9 feet, more or
less, to a point that is 100 feet West of the East Line of Lot 21; thence Southerly parallel to the
East Line of Lot 2162 feet;thence Westerly 28 feet; then Southerly parallel to the East Line of
Lot 2170 feet, more or less,to the South Line of Lot 21,thence Easterly along the Lot Line 128
feet to the Southeast Corner of Lot 21; thence Southerly along the East Line of Lot 20 64 feet,
more or less, to the Point of Beginning, containing 203,300 sq. ft. or 4.67 acres of land, more or
less.
Further that the General Manager and Corporate Secretary be authorized to enter into agreements to transfer
jurisdiction of this property to the City of Lansing Planning and Neighborhood Development Department for
disposal and future development, subject to the requirements of State Law, the Lansing City Charter and Codified
Ordinances.
Further any proceeds from this sale shall be deposited in the Joint City/BWL Economic Development Fund for
funding projects in accordance with the purpose of the fund.
Board Minutes Page 54
June 24, 1997
This parcel of property is part of a larger parcel purchased from the Michigan Department of Natural Resources for
$50.00 in 1994. Approximately one acre is being retained for well site and transmission main installation. The
remaining portion is not needed for utility purposes and can be made available for development in conjunction with
other adjacent vacant properties_ The City Planning and Neighborhood Development Department will be soliciting
proposals for development and use of the property.
Resolution 97-6-8 was adopted by the following vote:
YEAS: Christian, Graves, Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
NEW BUSINESS
The Rotary Club Steam Clock. General Manger Pandy reported that groundbreaking for the steam clock in
downtown Lansing is scheduled for June 27, 1997. The Rotary Club of Lansing(Rotary) is donating the steam
clock to the City of Lansing. Insurance coverage will be assumed by the City,with premium reimbursement
coming from Rotary. The working elements of the clock, i.e., steam whistles, chimes, and the musical and
clockwork,will be maintained by Rotary through a contract with The Verdin Company. The BWL would provide
necessary steam and electric service, and maintain the clock's external structure and steam piping and the electric
wire and lamping against ordinary wear and tear, at its own cost. Mr.Pandy noted that this is a nice opportunity
for the City and the BWL to come together with The Rotary Club to provide a nice enhancement to the City's
downtown central business district. Mr. Pandy pointed out that that because he is a member of Rotary as are
Commissioners O'Leary and Werbelow, he would prefer that the Board take action to authorize the BWL's
involvement with the maintenance of certain portions of the project,which will be memorialized in an agreement
among The Rotary Club, the City of Lansing, and the BWL. A copy of the agreement was available at the meeting
for the Commissioners' perusal. A plaque honoring the BWL for its involvement will be one of four plaques on
the clock.
(Resolution 97-6-9)
BWL TO MAINTAIN CERTAIN PORTIONS
OF THE STEAM CLOCK
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Royal, the Board authorized the
General Manager and Corporate Secretary to enter into agreement with The Rotary Club of
Lansing and the City of Lansing for the steam clock project.
Adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, Royal
NAYS: None
ABSTAIN: O'Leary, Werbelow(did not participate in the discussion)
ABSENT: None
Page 55 Board Minutes
June 24, 1997
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Leased Railcar Utilization. Statistics indicate that the trainset being leased by the BWL over the past 12 months
has realized BWL customers a savings of$201,560. These savings are expected to continue throughout the term of
the 30-month lease agreement, dated May, 1996.
Be A Tourist in Your Own Town. A letter of thanks from the Greater Lansing Convention&Visitors Bureau
was handed out for"Be A Tourist in Your Own Town' program. The BWL played a key role for that event held
June 24, 1997. Open houses were held both at the Ottawa Power Plant and Dye Water Plant. Exhibits on Water
safety and environmental compliance were on display for the public. Mr. Pandy expressed his appreciation to all
employees who volunteered to work on this annual event.
Developers Meet with GM on Ottawa Power Plant. The Ottawa Park Associates,Developers(OPAD)continue
to meet with General Motors' (GM)Argonaut Worldwide Realty regarding a proposed GM training center at the
Ottawa Power Plant. An announcement is expected on June 25. Mr. Pandy noted that if GM's decision is not
positive, the Board will need to talk about options it may want to consider at the Committee of the Whole meeting
on July 15, 1997.
Temporary Leasing of Main Office Building 9th Floor Space. Interest has been expressed by a couple of City of
Lansing departments and an independent engineering firm in leasing temporary space on the 9th floor of the
BWL's 123 W. Ottawa Street office building. Mr. Pandy stated that if the BWL office building is sold,we would
have 18 months to vacate the premise. A time limit of September 10, 1997, was imposed by the Board for the
developer(Capitol Annex,L.L.C.)to secure a lease from the State of Michigan.
REMARKS BY COMMISSIONERS
Commissioner Christian asked for an update on the Lansing Lugnuts' past due utility account and what procedures
the BWL is using in collections.
Mr. Pandy briefed the Board on the nature of the dispute between the City of Lansing and the Lugnuts with respect
to their agreement in actual utility consumption and who pays for what percentage of the total. The metering was
not laid out to separately meter the various facilities. Negotiations between the City and the Lugnuts are
continuing, however, a payment from Peter Sullivan, CEO of the Lansing Entertainment and Public Facilities
Authority, is expected this week which will bring the account up to date. Mr.Pandy added that the BWL makes
every effort to work out an acceptable payment plan with customers who are in arrears.
Commissioner Pratt noted that in reviewing the BWL Performance Indicators for the period ending May 1997, the
net income for Electric is down 37.84%. He asked for an explanation.
General Manager Pandy reported that the BWL had a banner year last year, mostly on the strength of export sales.
This year the BWL has had to go more toward market pricing for wholesale sales. Last year, the BWL had a
predetermined contractual price for wholesale power that was above market. As the marketplaces have become
more competitive, the BWL has had to lower its prices in order to sell surplus wholesale power..
Board Minutes Page 56
June 24, 1997
PUBLIC COMMENTS
CHAUUV AN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEr3K TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
No excused absences.
ADJOURNMENT
There being no further business,the Board adjourned at 6:23 p.m.
A.
Mary E. S Secretary
Filed: June 26, 1997
Marilynn Slade, City Clerk
Page 45
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,June 24, 1997 A,.
y i;lSltG CLERK
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 O'Leary.
Present: Commissioners Christian, Graves, O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: None
The Secretary declared a quorum present.
The invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
MOTION: On motion of Commissioner Christian and seconded by Commissioner Strolle,that the minutes
of rescheduled regular meeting of May 20, 1997,be adopted as filed.
Carried unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF
THE MEETING.
Eugene Buckley, 818 N. Hayford Street,Lansing,urged the Board to establish a policy and procedure for
customers to not have their phone numbers given out to telemarketers. Mr. Buckley noted that ATT and
Ameritech have procedures in place to address privacy concerns raised by customers contacted by unwelcomed
solicitors.
General Manager Pandy responded that the BWL has made it a practice to not provide lists of customers' addresses
or telephone numbers to telemarketing groups of any type. To address customer concerns of this nature, staff will
prepare a procedure that protects the privacy of individuals who wish to be excluded from any mandated turnover
of customer list. Mr. Pandy assured Mr. Buckley that his customer record will include a notation on the computer
screen indicating that he has requested to not have his address and phone number released.
COMMUNICATIONS AND PETITIONS
A letter of thanks was received from Brian T. Cooper,BWL Administrator of Utility Support Services,for his
recognition in becoming a member of the Board of Water and Light 25 Year Club.
Placed on file.
Board Minutes Page 46
June 24, 1997
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on June 10, 1997, to discuss the following items:
1. Electric Utility Deregulation,
2. Dimondale Dam,
3. Fiscal 1997-98 Budget, and
4. Proposed Electric and Water Rate Changes.
Present were Commissioners Christian, Graves,O'Leary,Pratt,Royal, Strolle, Werbelow.
Electric Utility Deregulation. Bill Cook,Director of Electric System Control,reported that a task force has been
formed in the Michigan legislature to draft electric utility restructuring legislation. A draft of the legislation is
expected by this fall for finalization by Thanksgiving. Mr. Cook presented an executive summary of the following
electric restructuring policy issues to be addressed by the Board:
• Municipal Exemption to Direct Access
• "Opt In" to Direct Access
• Protecting Distribution Customer Base
• Franchises for Alternative Suppliers
• Stranded Costs
• Secuntization
• Reciprocity
After lengthy discussion on the supporting and opposing arguments for each issue, the Commissioners agreed to
review and further study the proposed recommendations for consideration. There was consensus that the Board
needs to set goals to help deal with the changes that competition will bring to our industry. Public power must
demonstrate its ability to compete while also speaking forcefully against proposals that do not logically
demonstrate significant benefits and adequate protections to ultimate consumers.
Dimondale Dam Update. At the Committee of the Whole meeting held May 20, 1997, staff reported that two
conceptual proposals are being negotiated with the Village of Dimondale. Technical Services Director John
Elashkar presented an update on the proposed design and cost estimates to be presented to the Village on June 16
for further negotiations. Formal agreement is subject to approval by the Board of Commissioners and the Lansing
City Council.
Fiscal 1997-98 Budget. The revised Fiscal 1997-98 budget was presented by Treasurer/Controller Dana Tousley
with the changes discussed at the Committee of the Whole meeting held May 20, 1997. The revised budget was
received for information and filed with the City Clerk on May 28, 1997.
Proposed Electric and Water Rate Changes. Proposed electric and water rate change documents disseminated
to the public were received from Treasurer/Controller Dana Tousley. The following changes are under
consideration at the scheduled public hearing set for July 15, 1997,at 5:30 p.m.:
1. the elimination of ratchet clauses from Electric Rate Schedules 4, 5, 8 and 10, and
2. the elimination of an up-front payment for connection to the water system from Water
Rate Schedule No. 3.
John Strolle, Chair Pro Tem
COM II=E OF THE WHOLE
Page 47 Board Minutes
June 24, 1997
MOTION: On motion of Commissioner Christian, seconded by Commissioner Werbelow, the Committee of
the Whole Report was adopted by the following vote:
General Manager Pandy handed out a copy of an opinion received from Dickinson, Wright, Moon, Van Dusen&
Freeman, dated June 20, 1997, relative to the General Motors Electric Service Agreement and the issue with
respect to"ratchet clauses." The opinion was submitted in preparation for the public hearing to be held July 15,
1997.
The motion was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary, Royal, Werbelow
NAYS: None
ABSENT: None
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on June 24, 1997, to consider the non-bargaining compensation for Fiscal Year
1998.
Committee members present were Commissioners Graves, O'Leary, Pratt, and Strolle(Chair). Also in attendance
was Commissioner Werbelow.
Human Resources Director Linda Gardner and Employment and Compensation Administrator Steve Pollo
presented analysis for changes in compensation for Non-Bargaining Unit employees for Fiscal Year 1998. Staff
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) receiving input from the non-Bargaining Unit Compensation Committee, and(5)considering the BWL's ability
to pay. After much discussion, the Committee concurred with the following recommendation:
BY THE PERSONNEL COMMITTEE:
Non-Bargaining Compensation
(Resolution 97-6-9)
RESOLVED, That effective July 1, 1997:
1. All Non-Bargaining Unit salary ranges be increased 3.0%for Fiscal Year 1998;
2. All current Non-Bargaining Unit employees in full-time positions receive a 3.0%
General Increase, and that all Clerical-Technical(CT)employees in full-time positions
have their performance increases administered according to existing policy;
3. A broad matrix be established for non-CT employees to administer performance
increases;
4. All current part-time employees receive a 3.0%General Increase rounded up to the next
full nickel.
John Strolle, Chair
PERSONNEL COMMITTEE
Board Minutes Page 48
June 24, 1997
MOTION: On motion of Commissioner Royal, seconded by Commissioner Graves,the Personnel
Committee Report and Resolution 97-6-9 regarding the Wage and Salary Recommendations for
Non-Bargaining employees, were adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No.97-6-1
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.
1997
July 22 -Tuesday
August 26 -Tuesday
September 23 -Tuesday
October 28 -Tuesday
November 25 -Tuesday
December 16 -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 June 29, 1997.
MOTION: On motion of Commissioner Christian, seconded by Commissioner Strolle,Resolution 97-6-1
was adopted by the following vote::
YEAS: Christian, Graves,Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
Res. No.97-6-2
It is recommended that:
I. The Flexible Spending Account(FSA)be continued and that the contract with the TPA/United HealthCare
Administrators, Inc., for administration of FSA be continued.
Page 49 Board Minutes
June 24, 1997
II. The following Share the Success(STS)Bonus Options be approved for FY 1997/98:
1. Deferred Cash No change
2. Purchase of Vacation* No change
3. Purchase of Free Choice* No change
4. Deferred Compensation(457) No change
5. FSA(Flexible Spending Account) No change
6. Charitable Contributions Capital Area Response Effort&
Child Abuse Prevention Services
7. Long Term Disability Program Open enrollment for"buy-up" options
8. Cancer, Intensive Care, AFLAC Plan No change
*Purchase of Vacation&Free Choice will be limited to ten(10)total days to include no
more than two(2)Free Choice days.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,to adopt Resolution
97-6-2 as submitted.:
General Manager Pandy presented an overview of the Flexible Spending Account(FSA)and the Share the Success
(STS)program at the request of Commissioner Werbelow. Following discussion, the Commissioners agreed that a
future Committee of the Whole presentation on how the STS program performance measures are determined would
be helpful for the newer Commissioners.
Resolution 97-6-2 was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
Res. No.97-6-3
It is recommended that:
The recommendation for Performance Measures for FY 1996/97 Share the Success Plan(STS)be approved.
That the employees be eligible to receive a Performance Bonus of up to 5%as determined by final points for FY
1997/98.
If all goals and targets are reached,BWL will realize a financial impact of$3,487,366 based on the three financial
measures. The employees will earn up to 500 points on a 5.0%STS bonus equal to$1,743,683 with the net
financial impact to BWL being$1,743,683. The other eight(8)measures have a financial impact which is not
quantifiable. (See attached Summary FY 1997/98 from the STS Performance Measures Committee).
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Pratt,Resolution 97-6-3 was
adopted by the following vote:
YEAS: Christian, Graves, Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
Board Minutes Page 50
June 24, 1997
Res. No. 97-64
That the Board authorize the establishment of a voluntary charitable contribution(positive check off)whereby
customers may choose to add S 1.00 or more to their monthly utility bill to be utilized to assist in the payment of
utility bills of needy BWL customers.
Further, that the General Manager is authorized to establish appropriate accounts and agreements with assistance
agencies to administer the utility assistance program.
This will provide an additional means for needy customers to receive assistance in payment of utility bills.
General Manager Pandy noted that staff determined that the positive check off methodology for$1.00 created less
administrative costs to implement than a positive roundup for an amount less than$1.00. Commissioner Pratt
commented that a study has indicated people tend to favor the roundup option over the$1.00 checkoff. Following
discussion, the Board concurred that administrative burden is a legitimate consideration.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-6-4
was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary,Royal,Werbelow
NAYS: None
ABSENT: None
TREASURER/CONTROLLER
Res. No. 97-6-5
That the Board pay$6,069,006 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, 1996 to the Special Project Fund for future capital projects.
MOTION: On motion of Commissioner Strolle,seconded by Commissioner Graves,Resolution 97-6-5 was
adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,O'Leary,Royal,Werbelow
NAYS: None
ABSENT: None
Page 51 Board Minutes
June 24, 1997
WATER
Res. No. 97-"
That the Board agree to serve water to proposed Water District No. 130,Delhi Township,as requested by
resolution of the Delhi Township Board on May 6, 1997, 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. 130 established by Township resolution,and will provide a potable
water supply to said district.
2. The Township will be required to make a$58,341.05 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 CXXX)covering the
furnishing of a potable water supply in Water District No. 130.
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$58,341.05 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 CXXX) to furnish a potable water supply in Water District No. 130.
The geographical area of Water District No. 130 is as follows:
Apple Ridge Estates,Lots 1 through 20.
To provide a potable water supply within the proposed new district requires the installation of 2185 feet of
watermain and fire hydrants at an estimated cost of$68,616.05. Delhi Township acknowledges the portion of
$58,341.05 of the cost of said project. Due to the required watermain oversizing,BWL's oversizing cost will be
$10,275.00. The main extension will serve twenty(20) residential customers. A one-time connection fee will
amount to$18,860.00. The estimated annual revenue is$6,800.00.
Watermains to be installed in Summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
This project is contiguous to Water District No. 128 and will be constructed in conjunction with.
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-"
was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
Board Minutes Page 52
June 24, 1997
UNFINISHED BUSINESS
MOTION: Moved by Commissioner Werbelow, seconded by Commissioner Christian,that Resolution
97-4-3 known as the"Board of Water and Light Home Ownership Program for Employees,"
adopted by the Board on April 29, 1997, be rescinded and replaced with newly revised
Resolution 97-6-7 -"Board of Water and Light Home Ownership Program"as presented below:
(Resolution 97-6-7)
BOARD OF WATER AND LIGHT HOME OWNERSHIP PROGRAM
FOR EMPLOYEES
WHEREAS, Councilmember Paul Novak has requested the Board of Water and Light to undertake a program to
increase the number of Board of Water and Light employees who own and live in homes within the City of
Lansing, and
WHEREAS, the Board of Water and Light Commissioners have determined that such a program is in the best
interests of the Board of Water and Light.
NOW,THEREFORE, IT IS RESOLVED,That the Board of Water and Light Commissioners authorize and direct
the General Manager to develop and implement a program to encourage full-time Board of Water and Light
employees to acquire and reside in homes located in the City of Lansing.
IT IS FURTHER RESOLVED, That this approval is subject to engaging in any necessary collective bargaining
with employees represented by unions.
IT IS FURTHER RESOLVED,That Fifty Thousand Dollars($50,000)be allocated annually for three years
effective with Fiscal Year 1997-98 for this program.
IT IS FURTHER RESOLVED,That the maximum amount to be advanced to any one Board of Water and Light
employee shall not exceed Five Thousand Dollars($5,000). Up to One Thousand Dollars($1,000)per year of the
amount advanced to a Board of Water and Light employee may be forgiven under conditions established by the
General Manager,and the General Manager shall not be eligible to participate in the program.
IT IS FURTHER RESOLVED,That if the General Manager determines that the objectives of the program will be
advanced by participation in the matching program of the Local Initiatives Support Corporation(LISC),the Board
of Water and Light shall participate in the LISC matching program,to the extent determined by the General
Manager.
IT IS FURTHER RESOLVED, That the General Manager shall report to the Board of Water and Light
Commissioners at least semi-annually on the status of the home ownership program authorized by this resolution.
Commissioner Royal raised a point for clarification. She asked if employees participate,does that create a pool of
money which allows more applicants to come into the program or does it increase the amount to any one of the ten
(10)applicants.
Page 53 Board Minutes
June 24, 1997
General Manger Pandy responded that the$5,000 the BWL is allocating to the program is extended as a
homeownership incentive in the form of compensation. One fifth of that amount is forgiven each year for five(5)
years. Consequently, if$5,000 is allocated to someone moving into one of the targeted community development
areas, $1,000 of the$5,000 is forgiven each year or treated as compensation. The match comes from the Local
Initiatives Support Corporation(LISC); given to the same individual who received the first$5,000 as money for
rehabilitation of the targeted house for remodeling, restoration and fix up in the form of a low interest loan, to be
repaid to LISC. In summary, the$5,000 the BWL allocates is a forgivable grant, and the other$5,000 is a loan
that must be repaid.
Resolution 97-6-7 was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: None
MOTION: Moved by Commissioner Werbelow, seconded by Commissioner Royal, that the following
described property pulled from the regular meeting agenda of May 20, 1997,be approved as
presented:
(Resolution 97-6-8)
TO DECLARE CERTAIN PROPERTY ON WEXFORD ROAD AS SURPLUS
It is recommended that:
The following described property situated on Wexford Road,Lansing,be declared surplus and not required for
Board of Water and Light Operations:
A part of a parcel of land deeded to the Lansing Board of Water and Light(Said deed recorded in
Liber 2158,Pages 408-409 of Ingham County Deeds),being described as follows: Beginning at a
point that is on the East Line of Lot 20 of"Maple Grove Farms No. I",Liber 8,Page 24, Ingham
County Plats, and said Point of Beginning being 68 feet North of the Southeast Lot Corner;
thence Westerly along a line parallel to the South Line of Lot 20 300 feet; thence Southerly
parallel to the East Line of Lots 20& 19 200 feet,more or less, to the South Line of Lot 19;
thence Westerly along the South Line of Lot 19 402.7 feet, more or less,to the Southwest Corner
of Lot 19; thence Northerly along the West Line of Lots 19, 20&21 396 feet, more or less,to the
Northwest Comer of Lot 21;thence Easterly along the North Line of Lot 21603.9 feet, more or
less,to a point that is 100 feet West of the East Line of Lot 21; thence Southerly parallel to the
East Line of Lot 2162 feet; thence Westerly 28 feet;then Southerly parallel to the East Line of
Lot 2170 feet, more or less,to the South Line of Lot 21,thence Easterly along the Lot Line 128
feet to the Southeast Corner of Lot 21;thence Southerly along the East Line of Lot 20 64 feet,
more or less,to the Point of Beginning, containing 203,300 sq. ft. or 4.67 acres of land,more or
less.
Further that the General Manager and Corporate Secretary be authorized to enter into agreements to transfer
jurisdiction of this property to the City of Lansing Planning and Neighborhood Development Department for
disposal and future development, subject to the requirements of State Law, the Lansing City Charter and Codified
Ordinances.
Further any proceeds from this sale shall be deposited in the Joint City/BWL Economic Development Fund for
funding projects in accordance with the purpose of the fund.
Board Minutes Page 54
June 24, 1997
This parcel of property is part of a larger parcel purchased from the Michigan Department of Natural Resources for
$50.00 in 1994. Approximately one acre is being retained for well site and transmission main installation. The
remaining portion is not needed for utility purposes and can be made available for development in conjunction with
other adjacent vacant properties. The City Planning and Neighborhood Development Department will be soliciting
proposals for development and use of the property.
Resolution 97-6-8 was adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary,Royal,Werbelow
NAYS: None
ABSENT: None
NEW BUSINESS
The Rotary Club Steam Clock. General Manger Pandy reported that groundbreaking for the steam clock in
downtown Lansing is scheduled for June 27, 1997. The Rotary Club of Lansing(Rotary)is donating the steam
clock to the City of Lansing. Insurance coverage will be assumed by the City,with premium reimbursement
coming from Rotary. The working elements of the clock,i.e., steam whistles,chimes, and the musical and
clockwork,will be maintained by Rotary through a contract with The Verdin Company. The BWL would provide
necessary steam and electric service,and maintain the clock's external structure and steam piping and the electric
wire and lamping against ordinary wear and tear,at its own cost. Mr.Pandy noted that this is a nice opportunity
for the City and the BWL to come together with The Rotary Club to provide a nice enhancement to the City's
downtown central business district. Mr.Pandy pointed out that that because he is a member of Rotary as are
Commissioners O'Leary and Werbelow, he would prefer that the Board take action to authorize the BWL's
involvement with the maintenance of certain portions of the project,which will be memorialized in an agreement
among The Rotary Club,the City of Lansing, and the BWL. A copy of the agreement was available at the meeting
for the Commissioners' perusal. A plaque honoring the BWL for its involvement will be one of four plaques on
the clock.
(Resolution 97-6-9)
BWL TO MAINTAIN CERTAIN PORTIONS
OF THE STEAM CLOCK
MOTION: On motion of Commissioner Strolle, seconded by Commissioner Royal,the Board authorized the
General Manager and Corporate Secretary to enter into agreement with The Rotary Club of
Lansing and the City of Lansing for the steam clock project.
Adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,Royal
NAYS: None
ABSTAIN: O'Leary, Werbelow(did not participate in the discussion)
ABSENT: None
* a * r
Page 55 Board Minutes
June 24, 1997
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Leased Railcar Utilization. Statistics indicate that the trainset being leased by the BWL over the past 12 months
has realized BWL customers a savings of$201,560. These savings are expected to continue throughout the term of
the 30-month lease agreement, dated May, 1996.
Be A Tourist in Your Own Town. A letter of thanks from the Greater Lansing Convention&.Visitors Bureau
was handed out for`Be A Tourist in Your Own Town"program. The BWL played a key role for that event held
June 24, 1997. Open houses were held both at the Ottawa Power Plant and Dye Water Plant. Exhibits on Water
safety and environmental compliance were on display for the public. Mr.Pandy expressed his appreciation to all
employees who volunteered to work on this annual event.
Developers Meet with GM on Ottawa Power Plant. The Ottawa Park Associates,Developers(OPAD)continue
to meet with General Motors' (GM)Argonaut Worldwide Realty regarding a proposed GM training center at the
Ottawa Power Plant. An announcement is expected on June 25. Mr.Pandy noted that if GM's decision is not
positive, the Board will need to talk about options it may want to consider at the Committee of the Whole meeting
on July 15, 1997.
Temporary Leasing of Main Office Building 9th Floor Space. Interest has been expressed by a couple of City of
Lansing departments and an independent engineering firm in leasing temporary space on the 9th floor of the
BWL's 123 W. Ottawa Street office building. Mr. Pandy stated that if the BWL office building is sold,we would
have 18 months to vacate the premise. A time limit of September 10, 1997, was imposed by the Board for the
developer(Capitol Annex,L.L.C.)to secure a lease from the State of Michigan.
REMARKS BY COMMISSIONERS
Commissioner Christian asked for an update on the Lansing Lugnuts' past due utility account and what procedures
the BWL is using in collections.
Mr. Pandy briefed the Board on the nature of the dispute between the City of Lansing and the Lugnuts with respect
to their agreement in actual utility consumption and who pays for what percentage of the total. The metering was
not laid out to separately meter the various facilities. Negotiations between the City and the Lugnuts are
continuing, however, a payment from Peter Sullivan, CEO of the Lansing Entertainment and Public Facilities
Authority, is expected this week which will bring the account up to date. Mr.Pandy added that the BWL makes
every effort to work out an acceptable payment plan with customers who are in arrears.
Commissioner Pratt noted that in reviewing the BWL Performance Indicators for the period ending May 1997, the
net income for Electric is down 37.84%. He asked for an explanation.
General Manager Pandy reported that the BWL had a banner year last year, mostly on the strength of export sales.
This year the BWL has had to go more toward market pricing for wholesale sales. Last year, the BWL had a
predetermined contractual price for wholesale power that was above market. As the marketplaces have become
more competitive,the BWL has had to lower its prices in order to sell surplus wholesale power..
Board Minutes Page 56
June 24, 1997
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
No excused absences.
ADJOURNMENT
There being no further business, the Board adjourned at 6:23 p.m.
• S
Mary E. S Secretary
Filed: June 26, 1997
Marilynn Slade, City Clerk
Board Minutes Page 43
May 20, 1997
WHEREAS,Having spent nearly thirty years address �p development issues at the state level,Bill Lontz
retired from the Michigan Department of Commerce i15.`Toughout his tenure as a public servant, he was
instrumental in coordinating many large-scale; . gets vck� ,��a Motors'Poletown Plant in Hamtramck,
Mazda's Flatrock Plant and the Chrysler Jeffer PIT frldrit'.' 44eceived many honors in community
planning for his work across the state, inclu ant of the Year. He also found time to teach
many courses in urban issues and resource development at Mic gan tate University, and served as Director of the
Peace Corp in Western Samoa. He continued his involvement in project development and community planning
through his consulting business up to the time of his death; now,therefore,be it
RESOLVED, The Board of Water and Light Commissioners hereby officially honors and salutes the life,
leadership and achievements of William D.Lontz.
RESOLVED FURTHER, It is with great respect for his contributions to this public power utility that we extend
this expression of our condolences to his wife,Rita,their son,Marty,their daughter,Marci, and his mother,
Mildred.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Share the Success. The Share the Success year-to-date performance through the month of April is at 353 points
out of a possible 500,which equates to an estimated gross financial impact of$1,808,023. The Share the Success
payment on that basis would be$1,254,666 for a net savings to our customers of$553,357. Monthly updates will
continue to be provided.
BWL v. USF&G. The BWL has settled with the U. S.Fidelity and Guaranty(USF&G)Insurance Company over
the Oakwood transformer explosion incident which occurred in 1987. A settlement of$385,000 is to be paid to the
BWL. Estimated recoverable damages were determined to be approximately$185,000, although the suit was for a
higher amount of approximately$387,000. The law firm of Willingham, Cote took this case on a contingency
basis; consequently,they will receive one-third of the net recovery, minus attorney's fees. Thus,BWL will receive
$288,752.41,which is the net recovery after deducting costs and expenses associated with the prosecution of the
lawsuit. Mr. Pandy congratulated Willingham, Cote and Staff Attorney Larry Wilhite for managing the case to a
successful conclusion.
Local Initiative Support Corporation(LISC). The BWL was among the partners listed in the Lansing LISC
brochure, consisting of 13 firms that kicked off the LISC fund raising campaign with$400,000 for development of
homes in Lansing neighborhoods.
Meetings on Electric Deregulation. General Manager Pandy reported that a positive meeting was held with
Representative Dennis Olshove who chairs the legislative effort on deregulation. Commissioners Royal and Strolle
and Electric System Control Director Bill Cook also took part in the discussions on deregulation. Mr. Pandy noted
that Representative Olshove seemed interested in proceeding with caution.
Mr. Pandy also reported that he and Bill Cook participated in a presentation at the Michigan Manufacturers
Association on May 16. A representative from CMS Energy was the main speaker on the benefits of deregulation.
The BWL was given a five-minute opportunity to present its position on this issue. Mr. Pandy noted that among
those present in the audience were many BWL customers who spoke in support of the BWL as a local utility.
Oldsmobile Classic. A schedule of events for the Oldsmobile Classic to be held June 2-8, 1997,at Walnut Hills
Country Club was handed out. The BWL as a bronze sponsor,will have a supply available of single day tickets,
Page 44 Board Minutes
May 20, 1997
club house passes and parking passes. Mr. Pandy encouraged all to participate in this worthwhile community
event. Proceeds benefit the Oldsmobile Classic Youth Charities Fund.
REMARKS BY COMMISSIONERS
Commissioner Christian commented that after hearing the memorial resolution read for the late Commissioner Bill
Lontz, it occurred to him that it is important for the Board of Commissioners to have a picture taken annually for
archival purposes.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle, seconded by Commissioner Christian,to excuse Commissioner Graves from
tonight's proceedings.
Carried unanimously.
ADJOURNMENT
There being no further business,the Board adjourned at 7:45 p.m.
(/� 4VA,
Mary E. So ,'Secretary
Filed: May 27, 1997
Marilynn Slade, City Clerk
Page 31
MII UTES OF BOARD OF COMMISSIONERS' MEETING
3 .ANSING BOARD OF WATER AND LIGHT
Li i'diir'YU CITY CLERK
Tuesday,May 20, 1997
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 O'Leary.
Present: Commissioners Christian,O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: Commissioner Graves.
The Secretary declared a quorum present.
The invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
On motion of Commissioner Strolle and seconded by Commissioner Christian, that the minutes of rescheduled
regular meeting of April 29, 1997,be adopted as filed.
Commissioner Werbelow expressed concern with the wording of Resolution 97-4-3 relative to the Board of Water
and Light Home Ownership Program for Employees. He indicated that the wording seems too restrictive in
carrying out the program and that at some point in time it could commit the management to the documents that
were delivered prior to the April 29, 1997 Board meeting. He would like to at least open the opportunity to amend
the resolution. His sense was that the Board was adopting a policy and asking the General Manager and staff to
carry it out.
Following discussion, Commissioner Werbelow moved,and seconded by Commissioner O'Leary, to amend the
motion to approve the minutes with the understanding that Resolution 97-4-3 is subject to review for possible
amendments.
The motion as amended was carried unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF
THE MEETING.
Gary Granger, representing Capitol Annex,L.L.C., presented an update to the Board on the status of the purchase
of the Board of Water and Light office building at 123 W. Ottawa Street and associated parking lot at 220 N.
Capitol Avenue. He reported that discussions with the legislative leadership involved in the decision process
continue in a positive fashion and that the deal could come together just before the end of the summer session or
soon afterwards. Mr. Granger requested an extension of 120 days from this date in order to further their efforts in
securing a lease commitment from the State of Michigan for legislative purposes. Mr. Granger noted that timing
plays an important role in the decision process due to key issues currently before the legislature.
Page 32 Board Minutes
May 20, 1997
Commissioner Christian stated that he would like to see a document indicating that negotiations with the
legislature are proceeding with a closure in sight for the immediate future.
Commissioner Werbelow commented that he does not like to raise any levels of expectation that something is
going to happen with the main office building. He stated that the purchase deal may happen or it may not.He
further stated that knowing what the practicalities of the situation are,he is content to hear Capitol Annex is still
working on the transaction and would be satisfied to let it lie at that. He expressed concern that by action of this
Board, the initial agreement between the Board of Water and Light and Capitol Annex,L.L.C.,dated March 28,
1995, as amended,which expired on June 30, 1996,would be resurrected. He stated if an extension of time is
going to be given,he would prefer to see that agreement re-evaluated and re-negotiated.
Commissioner Strolle commented that he would like to see something more concrete which shows negotiations are
further ahead this month than the last couple of months.
Chairman O'Leary stated that he felt a time frame should be placed for a decision from the legislature, particularly
in light of upcoming elections.
Following lengthy discussion, Commissioner Strolle moved, seconded by Commissioner Pratt:
RESOLVED, That subject to review of the original agreement with Capitol Annex,L.L.C., dated March 28, 1995,
as amended,and terminated on June 30, 1996, relative to the sale of the Board of Water and Light Ottawa Street
Office Building and associated parking lot,the time for securing a lease from the State of Michigan is hereby
extended until September 10, 1997. This date coincides with the expiration date set by the Lansing City Council
by Resolution 105, adopted March 10,1297.
Adopted by the following vote:
YEAS: Christian,Pratt, Strolle, O'Leary, Royal
NAYS: Werbelow
ABSENT: Graves
Michael Markey, consultant to J&L Investment Company,L.L.C.,Lansing, requested that Resolution 97-5-1 on
the agenda(General Manager's Recommendations)relative to transferring jurisdiction of excess property owned by
the Board of Water and Light(B WL)on Wexford Road to the City of Lansing Planning and Neighborhood
Development Department be pulled from the agenda. He requested to meet with the appropriate BWL staff
members prior to the next Board meeting to work out some latent title defects on the property.
Following discussion,the Board agreed to pull this item from the agenda pending further review by staff and Mr.
Markey. This item will be placed back on the agenda for the next Board meeting.
COMMUNICATIONS AND PETITIONS
No communications received.
Board Minutes Page 33
May 20, 1997
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on May 20, 1997, to discuss the following items:
1. EEO Report
2. Fiscal Year 1997-98 Budget
3. Ottawa Station Development Project
4. Dimondale Dam
5. Public Hearing Date for Rate Amendments
Present were Commissioners Christian,O'Leary,Pratt,Royal, Strolle, and Werbelow. Absent was Commissioner
Graves.
EEO Report. Kay Porter,Employee Resource Administrator, presented an analysis of Board of Water and Light
EEO(Equal Employment Opportunity)statistics as compared to the average for the Tri-County Area. The various
classifications were reviewed,which indicated a BWL total average of 18.8% minority employees as compared to
the Tri-County area's total average of 11.8%and an average of 24.4%female employees as compared to the Tri-
County's total average of 47.2%.
Fiscal Year 1998 Budget.
Treasurer/Controller Dana Tousley presented details on the proposed Fiscal 1998 budget, as revised,including the
Projected Income Statement and cash flow forecast by utility. The proposed Operations and Maintenance(O&M)
budget is 2.4%higher as compared to the Fiscal 1997 budget. Copies of the revised documents are being mailed to
the Commissioners for their records.
Resolution 95-5-11
Fiscal Year 1998 Budget
RESOLVED,That the annual budget covering Fiscal 1997-98 as revised and presented be approved(see
Attachment 1).
FURTHER RESOLVED, That capital projects be authorized in the amount of the project estimate. Capital
expenditures for Fiscal 1997-98 are limited to the amount included in the budget.
Resolution 97-5-12
Budget Policy
RESOLVED, That the attached budget policy(Attachment II)be adopted.
FURTHER RESOLVED, That this policy be reviewed by the Commissioners annually to determine its application
to the upcoming fiscal year. This review should take place in November or December each year.
Ottawa Station Development Proiect. General Manager Joe Pandy reported that a productive meeting was held
on May 14, 1997, with General Motors' (GM)Argonaut Worldwide Realty and Ottawa Park Associates,
Developers relative to GM's Small Car Group's Education Development Center. Their space requirements of
70,000 sq. ft. were reviewed. GM has requested a formal proposal from OPAD based on a ten-year lease with ten-
year renewals,for that space by June 2, 1997. GM has indicated that if that were done,they would need the month
of June to take the proposal through the corporation for a decision point by June 30, 1997.
The question was raised as to whether or not a deadline date should be set for the developers to bring the project
with GM to closure. Following discussion,the following motion was presented for Board approval:
Page 34 Board Minutes
May 20, 1997
Resolution 95-5-13
Ottawa Station Proiect Negotiation Deadline
RESOLVED,That a definitive proposal be requested from Ottawa Park Associates,Developers(OPAD)no later
than June 30, 1997. If a firm decision is not made by that date, the Board will entertain other proposals in attempt
to work with other developers,while at the same time OPAD would have the right to continue to bring their project
negotiations to closure.
Dimondale Dam. General Manager Pandy reported that a meeting was held May 19, 1997,with Village of
Dimondale officials and residents. Officials and the residents would prefer to have the BWL rubble the dam below
the water line so that it would not appear as an eye sore above the water level,but it would not be totally removed,
thereby significantly altering the water level that exists above the dam presently. The BWL has agreed to develop
alternate designs and cost estimates to present to Dimondale on June 16. Of the two concepts presented,
Dimondale officials preferred Concept"B"wherein the Village would pay the BWL a market value for the
properties they want to acquire, and the BWL in turn would reimburse the Village approximately 95%of the
market value to be applied toward the Village Recreation Development/Plan. That methodology would allow them
to include part of the cost into a larger grant application with the Michigan Department of Natural Resources
(DNR)and the Michigan Department of Environmental Quality(DEQ). Consensus was reached between the BWL
and the Village to work collaboratively to develop a plan for the dam for grant consideration.
Staff will be bringing proposed designs and cost estimates to the next Committee of the Whole meeting in June for
review prior to meeting with Village of Dimondale officials.
Rate Amendments. A public hearing date to receive input on removing ratchet clauses from Electric rates 4, 5, 8
and 10 and other customer focused amendments to water rates was set for July 15, 1997. (See General Manager's
Recommendations-Resolution 97-5-4.)
Respectfully submitted,
John Strolle, Chair Pro Tern
COMMITTEE OF THE WHOLE
On motion of Commissioner Strolle, and seconded by Commissioner Christian,the Committee of the Whole
Report and Resolutions 95-5-11 (Fiscal Year 1998 Budget), 95-5-12 (Budget Policy), and 95-5-13 (Ottawa Station
Negotiation Deadline)was approved as presented.
Adopted by the following vote:
YEAS: Christian,Pratt,Royal, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Graves
Board Minutes Page 35
May 20, 1997
GENERAL MANAGER'S RECOMMENDATIONS
THE FOLLOWING ITEM WAS PULLED FROM TIE AGENDA:
CORPORATE PLANNING
Res. No. 97-5-1
It is recommended that:
The following described property situated on Wexford Road,Lansing, be declared surplus and not required for
Board of Water and Light Operations:
A part of a parcel of land deeded to the Lansing Board of Water and Light
�3u lit A (Said deed recorded in Liber 2158, Pages 408-409 of Ingham County Deeds),
y�(dfi �qC n being described as follows: Beginning at a point that is on the East Line of Lot
'Ifm J 20 of"Maple Grove Farms No. 1",Liber 8,Page 24, Ingham County Plats,and
Q said Point of Beginning being 68 feet North of the Southeast Lot Corner,
thence Westerly along a line parallel to the South Line of Lot 20 300 feet;
thence Southerly parallel to the East Line of Lots 20& 19 200 feet, more or
less,to the South Line of Lot 19;thence Westerly along the South Line of Lot
19 402.7 feet, more or less, to the Southwest Corner of Lot 19; thence Northerly
along the West Line of Lots 19, 20&21 396 feet,more or less, to the
Northwest Corner of Lot 21; thence Easterly along the North Line of Lot 21
603.9 feet, more or less, to a point that is 100 feet West of the East Line of Lot
21; thence Southerly parallel to the East Line of Lot 2162 feet; thence Westerly
28 feet;then Southerly-parallel to the East Line of Lot 2170 feet, more or less,
to the South Line of Lot 21,thence Easterly along the Lot Line 128 feet to the
Southeast Comer of Lot 21; thence Southerly along the East Line of Lot 20 64
feet,more or less, to the Point of Beginning,containing 203,300 sq.ft. or 4.67
acres of land, more or less.
Further that the General Manager and Corporate Secretary be authorized to enter into agreements to transfer
jurisdiction of this property to the City of Lansing Planning and Neighborhood Development Department for
disposal and future development, subject to the requirements of State Law, the Lansing City Charter and Codified
Ordinances.
Further any proceeds from this sale shall be deposited in the Joint City/BWL Economic Development Fund for
funding projects in accordance with the purpose of the fund.
This parcel of property is part of a larger parcel purchased from the Michigan Department of Natural Resources for
$50.00 in 1994. Approximately one acre is being retained for well site and transmission main installation. The
remaining portion is not needed for utility purposes and can be made available for development in conjunction with
other adjacent vacant properties. The City Planning and Neighborhood Development Department will be soliciting
proposals for development and use of the property.
RESOLUTION 97-5-1 WAS PULLED FROM THE AGENDA PENDING STAFF REVIEW.
Page 36 Board Minutes
May 20, 1997
ELECTRIC PRODUCTION/TECHNICAL SERVICES DIVISIONS
Rea No. 97-5-2
It is recommended that a contract be awarded to Environmental Elements Corporation in the amount of
$6,544,500.00 for the installation of a new precipitator at the Erickson Station. This recommendation is based on
Environmental Elements Corporation providing the best overall evaluated bid to complete the installation.
Other bidders are as follows:
1. GE Environmental Systems-$6,463,236.00
2. Wheelabrator Air Pollution Control-$6,685,755.00
3. Research-Cottrell-$8,498,000.00
Project Background:
The existing precipitator at the Erickson Station has essentially reached the end of its life cycle and is
recommended for replacement. The existing condition and recommendations for replacement were confirmed by a
"Particulate Removal Equipment Study" completed for the BWL by Stone&Webster in July of 1996.
The proposal received by Environmental Elements Corporation(EEC)offered the largest gas collection area,
lowest emissions/opacity guarantees and best overall installation experience. Although EEC was not the lowest
cost bidder,their larger precipitator provides the lowest overall cost per square foot of gas collection area,which
provides the BWL the best over all protection against more stringent air quality regulations in the future. The EEC
proposal also includes a 50150 partnering agreement for potential savings in the construction costs which could
offset the higher bid price. The services of Stone&Webster were utilized for both the technical specification and
bid evaluation and their analysis supported this overall recommendation.
General Manager Pandy disclosed that GE and Wheelabrator have challenged the selection of Environmental
Elements Corporation(EEC). He reported that engineering staff conducted a very thorough evaluation of the
precipitator bids for Unit#1 Erickson Station,with assistance from Stone&Webster consulting engineers,and
determined that EEC was the best evaluated bid,although slightly higher than GE Environmental Systems'bid.
Mr. Pandy pointed out that while the BWL is paying more on this contract,EEC was the best evaluated bid based
on the best price per square foot of available gas collection area in the precipitator. He stated that with future plans
to bum Western fuels,a larger precipitator would be the best choice. He further stated that he believes this bid was
handled in a fair, appropriate manner with all bidders having the same information and that staff has no reason to
pause or withdraw its recommendation.
Following a lengthy question and answer period, Commissioner Strolle moved,and seconded by Commissioner
Christian,to approve Resolution No. 97-5-2.
Adopted by the following vote:
YEAS: Christian,Pratt, Strolle,O'Leary, Royal, Werbelow
NAYS: None
ABSENT: Graves
Board Minutes Page 37
.\Iay 20, 1997
TREASURER/CONTROLLER
Res. No. 97-5-3
Deferred Capital Charge Payment Plan
Whereas, all three utilities,based upon numerous customer requests, have expressed a desire to defer payment of
customer capital charges required by the BWL to provide service, and,
Whereas, the high cost of service installations is an issue in extending and providing service in areas not served by
the BWL, and,
Whereas, deferred payment of capital charges is becoming a standard industry practice and the BWL needs to
remain competitive and customer friendly for new customers to choose the BWL as their utility.
THEREFORE BE IT RESOLVED,that this resolution authorizes the General Manager to establish procedures to
implement a deferred capital charges payment plan. The plan will allow deferral of required capital charges for
service installations, main or line extensions,or customer equipment. The terms and conditions of a contract with
a customer to defer payment of required capital charges are as follows:
Term: Contract required to take BWL service for at least the term of the deferment,longer if there are
other services requested. The term may be up to three(3)years. If property ownership changes during
the term of the contract,then the unpaid balance plus accrued interest is due and payable immediately.
Monthly deferred capital payments are in addition to the normal utility billing.
Rate: Prime Rate, reset annually each July 1,based on prime rate published in The Wall Street Journal for
the last market day in June eaclryear. The prime rate is currently 8.5%.
Availability: All retail customers are eligible.
Security: In the event of default,the BWL will use normal collection procedures,up to and including a
mechanics lien or applied to the tax roll, if applicable.
The Board of Commissioners must specifically approve contracts with exceptions to these terms.
On motion of Commissioner Strolle, seconded by Commissioner Christian,Resolution 97-5-5 was adopted by the
following vote:
YEAS: Christian,Pratt, Strolle,O'Leary,Royal, Vie below
NAYS: None
ABSENT: Graves
Res. No. 97-54
Ratchet Clauses Eliminated
Whereas, BWL bond counsel have opined that ratchet clauses in rate tariffs may be interpreted as minimum
charges, and,
Whereas, "ratchet" clauses are in BWL rates to discourage large customers from sudden shifts in electric usage and
to penalize large customers when a large shift occurs, and,
Whereas, the annual revenue from ratchet clauses is less than$167,000,and,
Page 38 Board Minutes
May 20, 1997
Whereas,Electric rates 4(Large General), 5 (Primary, 8 (Large Capacity), &10 (Process Heating)contain ratchet
clauses, and,
Whereas,the operational need for a penalty to encourage large customers to maintain a consistent load factor is no
longer present, nor is it customer friendly.
THEREFORE BE IT RESOLVED,that a public hearing be set for Tuesday, July 15, 1997, to receive public input
on removing the ratchet clauses from the above four electric rates.
On motion by Commissioner Strolle and seconded by Commissioner Christian,Resolution 97-5-4 was adopted by
the following vote:
YEAS: Christian,Pratt, Strolle,O'Leary,Royal,Werbelow
NAYS: None
ABSENT: Graves
WATER
Res.No.97-5-5
That the Board agree to serve water to proposed Water District No. 126,Delhi Township,as requested by
resolution of the Delhi Charter Township Board on May 6, 1997,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. 126 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$64,005.00 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 CXXVI)covering the
furnishing of a potable water supply in Water District No. 126.
4. Watermains 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$64,005.00 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 CXXVI)to furnish a potable water supply in Water District No. 126.
The geographical area of Water District No. 126 is as follows: Moorwood Farms Subdivision,Phase 3,Lots 54
through 101.
Board Minutes Page 39
May 20, 1997
To provide a potable water supply with the proposed new district requires the installation of 2,510 feet of
watermain and fire hydrants at an estimated cost of$64,005.00. The main extension will serve forty-eight(48)
residential customers. A one-time connection fee will amount to$45,264.00. The estimated annual revenue is
$16,320.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res. No.97-5-6
RESOLVED,That the Board agree to serve water to proposed Water District No. 127,Delhi Township,as
requested by resolution of the Delhi Charter Township Board on May 6, 1997, 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. 127 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$28,305.00 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 CXXVII)covering the
fumishing of a potable water supply in Water District No. 127.
4. Watermains 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$28,305.00 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 CXXVII)to furnish a potable water supply in Water District No. 127.
The geographical area of Water District No. 127 is as follows: Centennial Farms Site Condominiums,Phase 2,
Lots 23 through 44.
To provide a potable water supply with the proposed new district requires the installation of 1,110 feet of
watermain and fire hydrants at an estimated cost of$28,305.00. The main extension will serve twenty-two(22)
residential customers. A one-time connection fee will amount to$20.746.00. The estimated annual revenue is
$7,480.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res.No. 97-5-7
RESOLVED,That the Board agree to serve water to proposed Water District No. 128,Delhi Township,as
requested by resolution of the Delhi Charter Township Board on April 29, 1997, 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:
Page 40 Board Minutes
May 20, 1997
1. The Board will accept Water District No. 128 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$100,826.00 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 CXXVUI)covering the
furnishing of a potable water supply in Water District No. 128.
4. Watermains 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$100,826.00 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 CXXVHI)to furnish a potable water supply in Water District No. 128.
The geographical area of Water District No. 128 is as follows: Hunters Glen Planned Unit Development,Phase 1,
2 and 3,Lots 1 through 45.
To provide a potable water supply with the proposed new district requires the installation of 3,340 feet of
watermain and fire hydrants and 905 feet of road frontage payback to BWL at an estimated cost of$116,951.00.
Delhi Township acknowledges the portion of$100,826.00 of the cost of said project. Due to required watermain
oversizing,BWL's oversizing cost will be$16,125.00. The main extension will serve forty-five(45) residential
customers. A one-time connection fee will amount to$42,435.00. The estimated annual revenue is$15,300.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res. No. 97-5-8
RESOLVED, That the Board agree to serve water to proposed Water District No. 129,Delhi Township,as
requested by resolution of the Delhi Charter Township Board on April 15, 1997, 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. 129 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$24,862.50 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 CXXDQ covering the
furnishing of a potable water supply in Water District No. 129.
4. Watermains are to be installed in accordance with the current Board's Policies and Procedures for Water
Service.
Board Minutes Page 41
May 20, 1997
Further, that upon receipt of the sum of$24,862.50 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,CKIX)to furnish a potable water supply in Water District No. 129.
The geographical area of Water District No. 129 is as follows: Chisholm Hills Estates No. 2,Lots 21 through 42.
To provide a potable water supply with the proposed new district requires the installation of 975 feet of watermain
and fire hydrants at an estimated cost of$24,862.50. The main extension will serve twenty-two(22) residential
customers. A one-time connection fee will amount to$20,746.00. The estimated annual revenue is$7,480.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res. No. 97-5-9
That the Board agree to rescind and replace proposed Water District No. 3, Watertown Township, as requested by
resolution of the Watertown Charter Township Board on October 11, 1993 with the request as dated May 9, 1997,
and that in accordance with the agreement between the Board and the Charter Township of Watertown dated
November 25, 1986, covering the furnishing of a potable water supply in Watertown Township,the Board advises
officials of Watertown Township as follows:
1. The Board will accept Water District No. 3 established by Township resolution on May 19, 1997 and will
provide a potable water supply to said district.
2. The Township will be required to make a$5,864.00 non-refundable contribution-in-aid of construction to
cover the charges set forth in the Board's Rules and Regulations 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 III)covering the furnishing of
a potable water supply in Water District No. 3.
4. Watermains are to be installed in accordance with the current Board's Rules and Regulations for Water
Service.
Further,that upon receipt of the sum of$5,865.00 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 III)to furnish a potable water supply in Water District No. 3.
The geographical area of Water District No. 3 is as follows: Grove Road-Extending existing watermain 300 feet
north to State Road.
To provide a potable water supply within the proposed new district requires the installation of 300 fee of 12"
watermain at an estimated cot of$11,900.00.
The main extension will serve two(2)industrial customers. One-time connection fees will amount to$1,886.00.
Estimated annual revenue is$725.00.
Watermains to be installed in Summer/Fall of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Page 42 Board Minutes
May 20, 1997
Res. No.97-5-10
RESOLVED,That the Board approve a revision to Water Utility Policies for Water System Extensions and
Customer Service Installations as recommended in Attachment III.
This revision will improve our flexibility in providing service to Water Utility customers and improves the ability
of the Water Utility to be successful in providing service in developed areas. The recommended changes are
necessary and compatible with the proposed policy for recovery of retail water service installation fees and charges.
On motion by Commissioner Strolle and seconded by Commissioner Christian,Resolution Nos. 97-5-5, 97-5-6, 97-
5-7, 97-5-8, 97-5-9,and 97-5-10 were adopted by the following vote:
YEAS: Christian, Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Graves
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
Chairman O'Leary appointed the following Commissioners to the Nominating Committee for Board officers:
Commissioners Christian(Chair), Pratt, and Werbelow. Their work will begin once the Mayor announces the
Board appointments, subject to City Council confirmation.
RESOLUTIONS
MEMORIAL TRIBUTE TO WILLIAM D.LONTZ
WHEREAS,The members of the Board of Commissioners wish to express their sadness over the loss of
Commissioner William D. Lontz("Bill")on April 24, 1997, at the age of sixty. Bill Lontz was appointed Board of
Water and Light Commissioner on July 1, 1994. He served on the Finance Committee and also exercised a
leadership role as the Board's Chair Pro Tem;and
WHEREAS,Bill Lontz was a powerful advocate for economic development issues, and made numerous
contributions to the people of this community and state that will long endure; and
WHEREAS,Bill Lontz was a man of vision and conviction with genuine concern for community-related issues and
their relationship to economic development. He touched people with his wonderful sense of humor and kind,
gentle manner. His intelligence, integrity and sincerity leaves a mark on this Board that will be felt for years to
come;and
Board Minutes Page 43
May 20, 1997
WHEREAS,Having spent nearly thirty years addressing economic development issues at the state level,Bill Lontz
retired from the Michigan Department of Commerce in 1995. Throughout his tenure as a public servant, he was
instrumental in coordinating many large-scale projects such as General Motors' Poletown Plant in Hamtramck,
Mazda's Flatrock Plant and the Chrysler Jefferson Avenue Plant. He received many honors in community
planning for his work across the state,including the 1986 Public Servant of the Year. He also found time to teach
many courses in urban issues and resource development at Michigan State University,and served as Director of the
Peace Corp in Western Samoa. He continued his involvement in project development and community planning
through his consulting business up to the time of his death; now,therefore,be it
RESOLVED,The Board of Water and Light Commissioners hereby officially honors and salutes the life,
leadership and achievements of William D. Lontz.
RESOLVED FURTHER,It is with great respect for his contributions to this public power utility that we extend
this expression of our condolences to his wife,Rita,their son,Marty, their daughter,Marci, and his mother,
Mildred.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Share the Success. The Share the Success year-to-date performance through the month of April is at 353 points
out of a possible 500,which equates to an estimated gross financial impact of$1,808,023. The Share the Success
payment on that basis would be$2,254,666 for a net savings to our customers of$553,357. Monthly updates will
continue to be provided.
BWL v. USF&G. The BWL has settled with the U. S.Fidelity and Guaranty(USF&cG)Insurance Company over
the Oakwood transformer explosion incident which occurred in 1987. A settlement of$385,000 is to be paid to the
BWL. Estimated recoverable damages were determined to be approximately$185,000,although the suit was for a
higher amount of approximately$387,000. The law firm of Willingham, Cote took this case on a contingency
basis;consequently, they will receive one-third of the net recovery,minus attorney's fees. Thus,BWL will receive
$288,752.41,which is the net recovery after deducting costs and expenses associated with the prosecution of the
lawsuit. Mr. Pandy congratulated Willingham, Cote and Staff Attorney Larry Wilhite for managing the case to a
successful conclusion.
Local Initiative Support Corporation (LISC). The BWL was among the partners listed in the Lansing LISC
brochure, consisting of 13 firms that kicked off the LISC fund raising campaign with$400,000 for development of
homes in Lansing neighborhoods.
Meetings on Electric Deregulation. General Manager Pandy reported that a positive meeting was held with
Representative Dennis Olshove who chairs the legislative effort on deregulation. Commissioners Royal and Strolle
and Electric System Control Director Bill Cook also took part in the discussions on deregulation. Mr.Pandy noted
that Representative Olshove seemed interested in proceeding with caution.
Mr. Pandy also reported that he and Bill Cook participated in a presentation at the Michigan Manufacturers
Association on May 16. A representative from CMS Energy was the main speaker on the benefits of deregulation.
The BWL was given a five-minute opportunity to present its position on this issue. Mr. Pandy noted that among
those present in the audience were many BWL customers who spoke in support of the BWL as a local utility.
Oldsmobile Classic. A schedule of events for the Oldsmobile Classic to be held June 2-8, 1997,at Walnut Hills
Country Club was handed out. The BWL as a bronze sponsor,will have a supply available of single day tickets,
Page 44 Board Minutes
May 20, 1997
club house passes and parking passes. Mr. Pandy encouraged all to participate in this worthwhile community
event. Proceeds benefit the Oldsmobile Classic Youth Charities Fund.
REMARKS BY COMMISSIONERS
Commissioner Christian commented that after hearing the memorial resolution read for the late Commissioner Bill
Lontz, it occurred to him that it is important for the Board of Commissioners to have a picture taken annually for
archival purposes.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle,seconded by Commissioner Christian, to excuse Commissioner Graves from
tonight's proceedings.
Carried unanimously.
ADJOURNMENT
There being no further business,the Board adjourned at 7:45 p.m.
May E. Secretary
Filed. A.1Gry 27, 1997
Marilynn Slade,City Clerk
ATTACHMENT I
BOARD OF WATER AND LIGHT-LANSING MICHIGAN (Page or
BUDGET FISCAL YEAR ENDING JUNE 30, 1998
WATER ELECTRIC STEAM TOTAL
PROJECTED INCOME STATEMENT FY 98
OPERATING REVENUE [1] 16,214,823 141,197,912 15,866,959 173,279,694
Operation/Maint Expense 11,488,057 114,287,831 12,460,468 138,236,356
Depreciation Expense 18,365,000
TOTAL OPERATING EXPENSE 156,601,356
OPERATING INCOME 16,678,338
Other Income [2] 5,757,727
Other Expense [3] 2,450,727
NET INCOME 19,985,338
NET INCOME AFTER CITY PAYMENT 13,504,618
RATE OF RETURN-3/97 RATE BASE 4.60%
PROJECTED CASH FLOW FY 98
Restricted Operating Cash 21,156,500
Restricted General Cash 16,500,000
Special Project/Const Cash
21,100,000
BEGINNING CASH 7-1-97 [4] 58,756,500
Sources of Cash
Net Income 19,985,338
Depreciation 18,365,000
TOTAL SOURCES OF CASH 38,350,338
SOURCES OF CASH + BEG. CASH 97,106,838
Uses of Cash
Debt Principal [5] 2,392,957
Capital Expenditures [6] 29,307,000
Payment to City 6,480,720
TOTAL USES OF CASH 38,180,677
Restricted Operating Cash 17,279,545
Restricted General Cash 17,160,000
Special Project/Const Cash 24,4861616
ENDING CASH 6-30-98 58,926,161
ATTACHMENT I
(page 2 or 4)
BOARD OF WATER AND LIGHT - BUDGET FOOTNOTES
FISCAL YEAR ENDING JUNE 30, 1998
[1] Revenue based on sales forecast for water (9,254,000 ccf), electric (2,546,600
mwh) and Steam (2,410,898 mlb). These sales levels are 0.2% lower, 2.6% lower
(resale sales), and 66.6% higher (GM Plant 6) respectively than the twelve month
period ended December 1996. There are no rate changes anticipated, other than the
removal of electric ratchet clauses, included in the budget revenues.
[2] Other Income includes earnings on short term securities, water sewerage collection
fees and electric interest income on steam debt to electric.
[3] Other Expense includes interest on the 1989 and 1994 Revenue Bonds, pension
debt, Michigan Ash building at Erickson, steam interest expense of steam debt to
Electric, and customer deposits.
[4] Projected June 30, 1997 Restricted Operating Cash balances
Operations and Maint. Fund $20,716,500
Bond and Interest Fund 440,000
Total Restricted Operating Cash $21,156,500
Projected June 30, 1997 Restricted General Cash balances
Coal Buildup $ 3,600,000
Water Facilities 3,000,000
Uninsured Losses 9,900,000
Total Restricted General Cash $16,500,000
[5] Debt repayment includes principal payment for the 1989 and 1994 Revenue Bonds,
pension debt, Michigan Ash building at Erickson and the electric loan to steam.
[6] Capital expenditures represent total amounts estimated for all Annual Capital
Additions, Planned Capital Projects, and Bond Projects during Fiscal Year 1998
ATTACHMENT I
(Page 3 or 4)
BOARD OF WATER&LIGHT-I.ANSING,MICHIGAN
BUDGET FOR FISCAL YEAR ENDING JUNE 30,1998
DIVISION SUMMARY-OPERATIONS&MAINTENANCE EXPENSE
Restated for Budget Comparison
Vehicle& Material Production Outside Expenses
Net Equipment & Fuels/Chem. Services to be
Labor/1/ Charges Supplies Purch Power &Other 0 Total Water Electric Steam Distributed Total
ADMINISTRATIVE 980,501 1,000 63,466 0 17,616,299 18,661,266 50,018 731,474 40,530 17,839,244 18,661,266
ELECTRIC UTILITY 16,036,777 597,231 3,032,967 70,117,568 4,194,362 93,978,905 0 93,689,452 0 289,453 93,978,905
WATER UTILITY 3,699,308 183,079 479,920 2,831,702 1,084,280 8,278,289 8,278,289 0 0 0 8,278,289
STEAM UTILITY 2,346,781 53,800 427,600 6,835,789 2,264,149 11,928,119 0 0 11,928,119 0 11,928,119
TECHNICAL SERVICES 3,334,955 67,739 774,038 0 1,600,454 5,777,186 0 0 0 5,777,186 5,777,186
HUMAN RESOURCES 467.058 0 66,950 0 270,375 804,383 0 0 0 804,383 804,383
CORPORATE PLANNING 166,644 0 9,000 0 25,300 200,944 0 0 0 200,944 200,944
COMMUNICATION 157,735 0 88,016 0 368.586 614,337 0 9,800 0 604,537 614,337
TREASURER/CONTROLLER 1,951,344 71,358 45,151 0 263,916 2,331,769 0 0 0 2,331,769 2,331,769
CONSUMER SERVICES 4,190,686 112,255 123,094 0 869,935 5,295.970 223,668 313,809 39,500 4,718,993 5,295,970
GRAND TOTAL $33,331,789 $1,086,452 $5,110,202 $79.785,059 $28,557,656 $147,871.168 $8,551,975 $94,744,535 $12,008,149 $32,566,509 $147,871,168
Distributed Expenses:
Spread to Water,Electric,&Steam/3/ 2,936,082 19,543,296 452,319 (22.931,697) 0
Vehicle and Equipment Charges/4/ 1 086 462
Indirect Costs Spread to Capital Budget/5/ (1,086,462)
(1, , )
(8,548,350) (8,54848,35050)
NET BUDGET BY UTILITY $11,488,057 $114,287,831 $12,460,468 $0 $138,236,356
ATTACHMENT I
(Ppse 4 of 4)
BOARD OF WATER AND LIGHT - DIVISION SUMMARY FOOTNOTES
FISCAL YEAR ENDING JUNE 30, 1998
[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.
Board Minutes
May 20, 1997
ATTACHMENT II
Budget Policy
WHEREAS, the Lansing City Charter requires the Board of Water and Light to adopt an annual budget for the
coming fiscal year(July through June)before June 1 each fiscal year, and
WHEREAS,it is fiscally prudent and good management practice to prepare and use short term forecasts of
operations,as well as, longer term forecasts of facilities and financial resources required,and
WHEREAS,a budget provides fiscal guidelines for management to operate within and a tool for Commissioners to
use when developing adequate rates for services or when monitoring management's performance.
THEREFORE,BE IT RESOLVED,That:
1. Management will prepare an annual budget for the upcoming fiscal year for Commissioner review and
approval before June 1 each fiscal year.
2. The budget documents will include projected sales, revenues, expenses and cash flow with appropriate
explanations.
3. The General Manager is authorized to establish and implement budgeting procedures consistent with this
policy and good financial practice.
4. The budget goal each fiscal year is to provide all services within the expected revenues and provide
sufficient funds for future capital expenditures. However, if that is not the case,then management must present
specific recommendations for rate changes,cost reductions,issuance of debt or other specific actions, prior to
budget approval.
5. Approval of the budget authorizes the General Manager and management to expend funds up to the
budget amount and pursuant to the Purchasing Policy. Approval authorizes capital projects at the amount of the
project estimate,but limits total annual capital expenditures to the total amount included in the capital budget.
6. As business conditions warrant,the Commissioners may,from time to time,authorize adjustments to the
approved budget.
* * s
Re: Resolution 97-5-10
ATTAC ENT III_
(Page 1 of 2)
Recommended Changes to: Sec.12-8 Water Service Policies:
Proposed revisions are indicated by: language to be added is shown underlined, language to be deleted is shown as
s6Fi!Eeihfea-R4.
M. Water System Extension
Extension of the BWL's water distribution system may be required in order to serve a new customer in the
water service area. In such cases the cost of the system extension will be paid by the customer requesting
the service. The Water Utility may share in the cost for items such as main oversizing for system
reinforcement.
The Water Utility will provide a firm cost to the customer for the system extension before the project is
initiated. Payment in full wiN be r-equiFed prior-to eeFkstFuetien. Payment af4er-the staA ef eenswiesien
fea�r�e-pef i tea l- e-di 6€�` -A4 of ;t1}gej e. fig.
Full pavment of costs are normally required before the start of construction however,payment
arrangements may be approved by the BWL. A minimum vavment of 50% is required before construction
is initiated and final payment is due upon receipt of invoice at the completion of construction Payment
arrangements that extend bevond the completion of construction may be permitted at the discretion of the
General Manager, with payment to include a finance charge.
The design for all system extensions will conform to good engineering practice as determined by the water
utility in order to protect the integrity of the water distribution system. It is recognized that flexibility in
design may be required at times in order to accommodate specific customer needs.
The Board of Water and Light will assume ownership of all system extensions and will be responsible for
maintenance as required.
Iv. Customer Service Installation
The cost of a new water service installation will be paid by the customer requesting the installation. The
Water Utility will provide a firm cost for the service installation before the project is initiated. The firm
cost will include a system connection fee assessed for all new service connections as required in Rate#3
of the Water Service Rates. Payment in M!will be r-equifed peensL-uetien. Full payment of costs
is normally required before the start of construction,unless prior arrangement is made with the BWL.
Payment arrangements will conform to policies for recovery of water service installation fees and charges.
The design for all service installations will conform to good engineering practice as determined by the
Water Utility. Water Utility personnel will assist the customer if requested regarding design of the
service and connection to customer-owned plumbing. The customer is responsible for costs associated
with connection to customer owned plumbing.
The Board of Water and Light will assume ownership of all services up to and including the meter and
will be responsible for maintenance of the service as required.
Water service to any customer may be interrupted or curtailed due to emergency conditions. The
customer is responsible for installation and maintenance of devices necessary to protect customer-owned
equipment against service interruptions or other disturbances in the distribution system. The Water Utility
will make every effort to minimize such interruptions.
The customer is also responsible for installation and maintenance of equipment to prevent a cross-
ATTACHMENT III
Page 2 o —
connection between customer-owned plumbing and the water distribution system. The cross-connection
control measures will conform to good engineering practice as determined by the Water Utility.
The Water Utility reserves the right to deny or terminate service to any customer whose piping or
equipment threatens the safe operation of the water distribution system.
The Board's authorized agents shall have access to the Customer's premises at all reasonable hours,to
install,inspect,read,repair or remove its meters;to install,operate and maintain other Board property,
and to inspect the Customer's connection and plumbing. Neglect or refusal on the part of the Customer to
provide reasonable access shall be sufficient cause for discontinuance of service by the Board,and
assurance of access may be required before service is restored.
The Water Utility will offer assistance to customers as requested in areas where the technical assistance of
Utility personnel may be of assistance. These areas include cross connection control,fire service design,
lawn sprinkler system design,relocation or upgrading of existing services,surge protection,and pressure
problems.
Page 31
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
LAi,G;ING CITY CLERK
Tuesday,May 20,1997
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 O'Leary.
Present: Commissioners Christian, O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: Commissioner Graves.
The Secretary declared a quorum present.
The invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
On motion of Commissioner Strolle and seconded by Commissioner Christian,that the minutes of rescheduled
regular meeting of April 29, 1997,be adopted as filed.
Commissioner Werbelow expressed concern with the wording of Resolution 97-4-3 relative to the Board of Water
and Light Home Ownership Program for Employees. He indicated that the wording seems too restrictive in
carrying out the program and that at some point in time it could commit the management to the documents that
were delivered prior to the April 29, 1997 Board meeting. He would like to at least open the opportunity to amend
the resolution. His sense was that the Board was adopting a policy and asking the General Manager and staff to
carry it out.
Following discussion, Commissioner Werbelow moved,and seconded by Commissioner O'Leary,to amend the
motion to approve the minutes with the understanding that Resolution 97-4-3 is subject to review for possible
amendments.
The motion as amended was carried unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF
THE MEETING.
Gary Granger, representing Capitol Annex,L.L.C.,presented an update to the Board on the status of the purchase
of the Board of Water and Light office building at 123 W. Ottawa Street and associated parking lot at 220 N.
Capitol Avenue. He reported that discussions with the legislative leadership involved in the decision process
continue in a positive fashion and that the deal could come together just before the end of the summer session or
soon afterwards. Mr. Granger requested an extension of 120 days from this date in order to further their efforts in
securing a lease commitment from the State of Michigan for legislative purposes. Mr. Granger noted that timing
plays an important role in the decision process due to key issues currently before the legislature.
Page 32 Board Minutes
May 20, 1997
Commissioner Christian stated that he would like to see a document indicating that negotiations with the
legislature are proceeding with a closure in sight for the immediate future.
Commissioner Werbelow commented that he does not like to raise any levels of expectation that something is
going to happen with the main office building. He stated that the purchase deal may happen or it may not.He
further stated that knowing what the practicalities of the situation are, he is content to hear Capitol Annex is still
working on the transaction and would be satisfied to let it lie at that. He expressed concern that by action of this
Board,the initial agreement between the Board of Water and Light and Capitol Annex,L.L.C.,dated March 28,
1995, as amended,which expired on June 30, 1996,would be resurrected. He stated if an extension of time is
going to be given,he would prefer to see that agreement re-evaluated and re-negotiated.
Commissioner Strolle commented that he would like to see something more concrete which shows negotiations are
further ahead this month than the last couple of months.
Chairman O'Leary stated that he felt a time frame should be placed for a decision from the legislature, particularly
in light of upcoming elections.
Following lengthy discussion,Commissioner Strolle moved, seconded by Commissioner Pratt:
RESOLVED,That subject to review of the original agreement with Capitol Annex,L.L.C., dated March 28, 1995,
as amended, and terminated on June 30, 1996, relative to the sale of the Board of Water and Light Ottawa Street
Office Building and associated parking lot,the time for securing a lease from the State of Michigan is hereby
extended until September 10, 1997. This date coincides with the expiration date set by the Lansing City Council
by Resolution 105, adopted March 10, 1497.
Adopted by the following vote:
YEAS: Christian,Pratt, Strolle,O'Leary,Royal
NAYS: Werbelow
ABSENT: Graves
Michael Markey,consultant to J&L Investment Company,L.L.C.,Lansing,requested that Resolution 97-5-1 on
the agenda(General Manager's Recommendations)relative to transferring jurisdiction of excess property owned by
the Board of Water and Light(BWL)on Wexford Road to the City of Lansing Planning and Neighborhood
Development Department be pulled from the agenda. He requested to meet with the appropriate BWL staff
members prior to the next Board meeting to work out some latent title defects on the property.
Following aiscussion,tile Boara agreed to pull flus item Min the agenda pending turtlier review by stq anct Mr.
Markey. This item will be placed back on the agenda for the next Board meeting.
COMMUNICATIONS AND PETITIONS
No communications received.
Board Minutes Page 33
May 20, 1997
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on May 20, 1997,to discuss the following items:
1. EEO Report
2. Fiscal Year 1997-98 Budget
3. Ottawa Station Development Project
4. Dimondale Dam
5. Public Hearing Date for Rate Amendments
Present were Commissioners Christian,O'Leary,Pratt,Royal, Strolle, and Werbelow. Absent was Commissioner
Graves.
EEO Report. Kay Porter,Employee Resource Administrator,presented an analysis of Board of Water and Light
EEO(Equal Employment Opportunity)statistics as compared to the average for the Tri-County Area. The various
classifications were reviewed,which indicated a BWL total average of 18.8% minority employees as compared to
the Tri-County area's total average of 11.8%and an average of 24.4%female employees as compared to the Tri-
County's total average of 47.2%.
Fiscal Year 1998 Budget.
Treasurer/Controller Dana Tousley presented details on the proposed Fiscal 1998 budget, as revised, including the
Projected Income Statement and cash flow forecast by utility. The proposed Operations and Maintenance(O&M)
budget is 2.4%higher as compared to the Fiscal 1997 budget. Copies of the revised documents are being mailed to
the Commissioners for their records.
Resolution 95-5-11
Fiscal Year 1998 Budget
RESOLVED, That the annual budget covering Fiscal 1997-98 as revised and presented be approved(see
Attachment 1).
FURTHER RESOLVED,That capital projects be authorized in the amount of the project estimate. Capital
expenditures for Fiscal 1997-98 are limited to the amount included in the budget.
Resolution 97-5-12
Budget Policy
RESOLVED, That the attached budget policy(Attachment In be adopted.
FURTHER RESOLVED, That this policy be reviewed by the Commissioners annually to determine its application
to the upcoming fiscal year. This review should take place in November or December each year.
Ottawa Station Development Proiect. General Manager Joe Pandy reported that a productive meeting was held
on May 14, 1997,with General Motors' (GM)Argonaut Worldwide Realty and Ottawa Park Associates,
Developers relative to GM's Small Car Group's Education Development Center. Their space requirements of
70,000 sq. ft. were reviewed. GM has requested a formal proposal from OPAD based on a ten-year lease with ten-
year renewals, for that space by June 2, 1997. GM has indicated that if that were done,they would need the month
of June to take the proposal through the corporation for a decision point by June 30, 1997.
The question was raised as to whether or not a deadline date should be set for the developers to bring the project
with GM to closure. Following discussion,the following motion was presented for Board approval:
Page 34 Board Minutes
May 20, 1997
Resolution 95-5-13
Ottawa Station Proiect Negotiation Deadline
RESOLVED,That a definitive proposal be requested from Ottawa Park Associates,Developers(OPAD)no later
than June 30, 1997. If a firm decision is not made by that date, the Board will entertain other proposals in attempt
to work with other developers,while at the same time OPAD would have the right to continue to bring their project
negotiations to closure.
Dimondale Dam. General Manager Pandy reported that a meeting was held May 19, 1997,with Village of
Dimondale officials and residents. Officials and the residents would prefer to have the BWL rubble the dam below
the water line so that it would not appear as an eye sore above the water level,but it would not be totally removed,
thereby significantly altering the water level that exists above the dam presently. The BWL has agreed to develop
alternate designs and cost estimates to present to Dimondale on June 16. Of the two concepts presented,
Dimondale officials preferred Concept"B" wherein the Village would pay the BWL a market value for the
properties they want to acquire, and the BWL in turn would reimburse the Village approximately 95%of the
market value to be applied toward the Village Recreation Development/Plan. That methodology would allow them
to include part of the cost into a larger grant application with the Michigan Department of Natural Resources
(DNR)and the Michigan Department of Environmental Quality(DEQ). Consensus was reached between the BWL
and the Village to work collaboratively to develop a plan for the dam for grant consideration.
Staff will be bringing proposed designs and cost estimates to the next Committee of the Whole meeting in June for
review prior to meeting with Village of Dimondale officials.
Rate Amendments. A public hearing date to receive input on removing ratchet clauses from Electric rates 4, 5, 8
and 10 and other customer focused amendments to water rates was set for July 15, 1997. (See General Manager's
Recommendations-Resolution 97-5-4.)
Respectfully submitted,
John Strolle,Chair Pro Tern
COMMITTEE OF THE WHOLE
On motion of Commissioner Strolle, and seconded by Commissioner Christian, the Committee of the Whole
Report and Resolutions 95-5-11 (Fiscal Year 1998 Budget),95-5-12(Budget Policy), and 95-5-13 (Ottawa Station
Negotiation Deadline)was approved as presented.
Adopted by the following vote:
VMAS- Cbri!Z ian 12mtt RWI Stmue Cl' =4. Box-al. WP inw
NAYS: None
ABSENT: Graves
Board Minutes Page 35
May 20, 1997
GENERAL MANAGER'S RECOMMENDATIONS
THE FOLLOWING ITEM WAS PULLED FROM THE AGENDA:
CORPORATE PLANNING
Res. No. 97-5-1
It is recommended that:
The following described property situated on Wexford Road,Lansing, be declared surplus and not required for
Board of Water and Light Operations:
A part of a parcel of land deeded to the Lansing Board of Water and Light
��`le A (Said deed recorded in Liber 2158,Pages 408-409 of Ingham County Deeds),
y�(d� �qC n being described as follows: Beginning at a point that is on the East Line of Lot
O J 20 of"Maple Grove Farms No. 1",Liber 8,Page 24,Ingham County Plats,and
Ya said Point of Beginning being 68 feet North of the Southeast Lot Comer,
thence Westerly along a line parallel to the South Line of Lot 20 300 feet;
thence Southerly parallel to the East Line of Lots 20& 19 200 feet, more or
less,to the South Line of Lot 19;thence Westerly along the South Line of Lot
19 402.7 feet, more or less, to the Southwest Corner of Lot 19; thence Northerly
along the West Line of Lots 19, 20&21 396 feet,more or less,to the
Northwest Corner of Lot 21; thence Easterly along the North Line of Lot 21
603.9 feet,more or less, to a point that is 100 feet West of the East Line of Lot
21; thence Southerly parallel to the East Line of Lot 21 62 feet; thence Westerly
28 feet;then Southerly-parallel to the East Line of Lot 2170 feet, more or less,
to the South Line of Lot 21, thence Easterly along the Lot Line 128 feet to the
Southeast Corner of Lot 21; thence Southerly along the East Line of Lot 20 64
feet,more or less, to the Point of Beginning,containing 203,300 sq. ft. or 4.67
acres of land,more or less.
Further that the General Manager and Corporate Secretary be authorized to enter into agreements to transfer
jurisdiction of this property to the City of Lansing Planning and Neighborhood Development Department for
disposal and future development, subject to the requirements of State Law,the Lansing City Charter and Codified
Ordinances.
Further any proceeds from this sale shall be deposited in the Joint CityBWL Economic Development Fund for
funding projects in accordance with the purpose of the fund.
This parcel of property is part of a larger parcel purchased from the Michigan Department of Natural Resources for
$50.00 in 1994. Approximately one acre is being retained for well site and transmission main installation. The
remaining portion is not needed for utility purposes and can be made available for development in conjunction with
other adjacent vacant properties. The City Planning and Neighborhood Development Department will be soliciting
proposals for development and use of the property.
RESOLUTION 97-5-1 WAS PULLED FROM THE AGENDA PENDING STAFF REVIEW.
Page 36 Board Minutes
May 20, 1997
ELECTRIC PRODUCTION/TECHNICAL SERVICES DIVISIONS
Res. No. 97-5-2
It is recommended that a contract be awarded to Environmental Elements Corporation in the amount of
$6,544,500.00 for the installation of a new precipitator at the Erickson Station. This recommendation is based on
Environmental Elements Corporation providing the best overall evaluated bid to complete the installation.
Other bidders are as follows:
1. GE Environmental Systems-$6,463,236.00
2. Wheelabrator Air Pollution Control-$6,685,755.00
3. Research-Cottrell-$8,498,000.00
Project Background:
The existing precipitator at the Erickson Station has essentially reached the end of its life cycle and is
recommended for replacement. The existing condition and recommendations for replacement were confirmed by a
"Particulate Removal Equipment Study"completed for the BWL by Stone&Webster in July of 1996.
The proposal received by Environmental Elements Corporation(EEC)offered the largest gas collection area,
lowest emissions/opacity guarantees and best overall installation experience. Although EEC was not the lowest
cost bidder,their larger precipitator provides the lowest overall cost per square foot of gas collection area,which
provides the BWL the best over all protection against more stringent air quality regulations in the future. The EEC
proposal also includes a 50150 partnering agreement for potential savings in the construction costs which could
offset the higher bid price. The services of Stone&Webster were utilized for both the technical specification and
bid evaluation and their analysis supported this overall recommendation.
General Manager Pandy disclosed that GE and Wheelabrator have challenged the selection of Environmental
Elements Corporation(EEC). He reported that engineering staff conducted a very thorough evaluation of the
precipitator bids for Unit#1 Erickson Station,with assistance from Stone&Webster consulting engineers,and
determined that EEC was the best evaluated bid,although slightly higher than GE Environmental Systems'bid.
Mr.Pandy pointed out that while the BWL is paying more on this contract,EEC was the best evaluated bid based
on the best price per square foot of available gas collection area in the precipitator. He stated that with future plans
to bum Western fuels, a larger precipitator would be the best choice. He further stated that he believes this bid was
handled in a fair ap rgpriate manner with all bidders havins the same information and that staff has no reason to
pause or withdraw its recommendation.
Following a lengthy question and answer period, Commissioner Strolle moved,and seconded by Commissioner
Christian,to approve Resolution No. 97-5-2.
Adopted by the following vote:
YEAS: Christian,Pratt, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Graves
Board Minutes Page 37
May 20, 1997
TREASURER/CONTROLLER
Res. No. 97-5-3
Deferred Capital Charge Payment Plan
Whereas, all three utilities,based upon numerous customer requests, have expressed a desire to defer payment of
customer capital charges required by the BWL to provide service, and,
Whereas,the high cost of service installations is an issue in extending and providing service in areas not served by
the BWL,and,
Whereas,deferred payment of capital charges is becoming a standard industry practice and the BWL needs to
remain competitive and customer friendly for new customers to choose the BWL as their utility.
THEREFORE BE IT RESOLVED,that this resolution authorizes the General Manager to establish procedures to
implement a deferred capital charges payment plan. The plan will allow deferral of required capital charges for
service installations, main or line extensions, or customer equipment. The terms and conditions of a contract with
a customer to defer payment of required capital charges are as follows:
Term: Contract required to take BWL service for at least the term of the deferment,longer if there are
other services requested. The term may be up to three(3)years. If property ownership changes during
the term of the contract,then the unpaid balance plus accrued interest is due and payable immediately.
Monthly deferred capital payments are in addition to the normal utility billing.
Rate: Prime Rate, reset annually each July 1,based on prime rate published in The Wall Street Journal for
the last market day in June eacir year. The prime rate is currently 8.5%.
Availability: All retail customers are eligible.
Security: In the event of default,the BWL will use normal collection procedures,up to and including a
mechanics lien or applied to the tax roll,if applicable.
The Board of Commissioners must specifically approve contracts with exceptions to these terms.
On motion of Commissioner Strolle,seconded by Commissioner Christian,Resolution 97-5-5 was adopted by the
following vote:
YEAS: Christian,Pratt, Strolle,O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Graves
Res.No. 97-5-4
Ratchet Clauses Eliminated
Whereas,BWL bond counsel have opined that ratchet clauses in rate tariffs may be interpreted as minimum
charges, and,
Whereas, "ratchet" clauses are in BWL rates to discourage large customers from sudden shifts in electric usage and
to penalize large customers when a large shift occurs,and,
Whereas,the annual revenue from ratchet clauses is less than$167,000,and,
Page 38 Board Minutes
May 20, 1997
Whereas,Electric rates 4 (Large General), 5 (Primary, 8(Large Capacity), &10 (Process Heating)contain ratchet
clauses, and,
Whereas, the operational need for a penalty to encourage large customers to maintain a consistent load factor is no
longer present, nor is it customer friendly.
THEREFORE BE IT RESOLVED, that a public hearing be set for Tuesday, July 15, 1997, to receive public input
on removing the ratchet clauses from the above four electric rates.
On motion by Commissioner Strolle and seconded by Commissioner Christian,Resolution 97-5-4 was adopted by
the following vote:
YEAS: Christian,Pratt, Strolle,O'Leary,Royal,Werbelow
NAYS: None
ABSENT: Graves
* r r s
WATER
Res.No.97-5-5
That the Board agree to serve water to proposed Water District No. 126,Delhi Township,as requested by
resolution of the Delhi Charter Township Board on May 6, 1997,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. 126 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$64,005.00 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 CXXVI)covering the
filmishing of a potable water slrp�nly in Water District No. 126_
4. Watermains 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$64,005.00 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 CXXVI)to furnish a potable water supply in Water District No. 126.
The geographical area of Water District No. 126 is as follows: Moorwood Farms Subdivision,Phase 3,Lots 54
through 101.
Board Minutes Page 39
May 20, 1997
To provide a potable water supply with the proposed new district requires the installation of 2,510 feet of
watermain and fire hydrants at an estimated cost of$64,005.00. The main extension will serve forty-eight(48)
residential customers. A one-time connection fee will amount to$45,264.00. The estimated annual revenue is
$16,320,00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res. No. 97-5-6
RESOLVED,That the Board agree to serve water to proposed Water District No. 127,Delhi Township,as
requested by resolution of the Delhi Charter Township Board on May 6, 1997, 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. 127 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$28,305.00 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 CXXVII)covering the
furnishing of a potable water supply in Water District No. 127.
4. Watermains 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$28,305.00 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 CXXVII)to furnish a potable water supply in Water District No. 127.
The geographical area of Water District No. 127 is as follows: Centennial Farms Site Condominiums,Phase 2,
Lots 23 through 44.
To provide a potable water supply with the proposed new district requires the installation of 1,110 feet of
watermain and fire hydrants at an estimated cost of$28,305.00. The main extension will serve twenty-two(22)
residential customers. A one-time connection fee will amount to$20,746.00. The estimated annual revenue is
$7,480.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res. No. 97-5-7
RESOLVED,That the Board agree to serve water to proposed Water District No. 128,Delhi Township,as
requested by resolution of the Delhi Charter Township Board on April 29, 1997, 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:
Page 40 Board Minutes
May 20, 1997
1. The Board will accept Water District No. 128 established by Township resolution and will provide a potable
water supply to said district.
2. The Township will be required to make a$100,826.00 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 CXXVIII)covering the
furnishing of a potable water supply in Water District No. 128.
4. Watermains 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$100,826.00 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 CXXVIII)to furnish a potable water supply in Water District No. 128.
The geographical area of Water District No. 128 is as follows: Hunters Glen Planned Unit Development,Phase 1,
2 and 3,Lots 1 through 45.
To provide a potable water supply with the proposed new district requires the installation of 3,340 feet of
watermain and fire hydrants and 905 feet of road frontage payback to BWL at an estimated cost of$116,951.00.
Delhi Township acknowledges the portion of$100,826.00 of the cost of said project. Due to required watermain
oversizing,BWL's oversizing cost will be$16,125.00. The main extension will serve forty-five(45) residential
customers. A one-time connection fee will amount to$42,435.00. The estimated annual revenue is$15,300.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res.No. 97-5-8
RESOLVED,That the Board agree to serve water to proposed Water District No. 129,Delhi Township, as
requested by resolution of the Delhi Charter Township Board on April 15, 1997,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. 129 established by Township resolution and will provide a potable
water tipply tc-said distliat
2. The Township will be required to make a$24,862.50 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 CXXI)X)covering the
furnishing of a potable water supply in Water District No. 129.
4. Watermains are to be installed in accordance with the current Board's Policies and Procedures for Water
Service.
Board Minutes Page 41
May 20, 1997
Further, that upon receipt of the sum of$24,862.50 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 CXXIX)to furnish a potable water supply in Water District No. 129.
The geographical area of Water District No. 129 is as follows: Chisholm Hills Estates No. 2,Lots 21 through 42.
To provide a potable water supply with the proposed new district requires the installation of 975 feet of watermain
and fire hydrants at an estimated cost of$24,862.50. The main extension will serve twenty-two(22)residential
customers. A one-time connection fee will amount to$20,746.00. The estimated annual revenue is$7,480.00.
Watermains to be installed in summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Res. No. 97-5-9
That the Board agree to rescind and replace proposed Water District No. 3, Watertown Township,as requested by
resolution of the Watertown Charter Township Board on October 11, 1993 with the request as dated May 9, 1997,
and that in accordance with the agreement between the Board and the Charter Township of Watertown dated
November 25, 1986, covering the furnishing of a potable water supply in Watertown Township,the Board advises
officials of Watertown Township as follows:
1. The Board will accept Water District No. 3 established by Township resolution on May 19, 1997 and will
provide a potable water supply to said district.
2. The Township will be required to make a$5,864.00 non-refundable contribution-in-aid of construction to
cover the charges set forth in the Board's Rules and Regulations 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 III)covering the furnishing of
a potable water supply in Water District No. 3.
4. Watermains are to be installed in accordance with the current Board's Rules and Regulations for Water
Service.
Further, that upon receipt of the sum of$5,865.00 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 III)to furnish a potable water supply in Water District No. 3.
The geographical area of Water District No. 3 is as follows: Grove Road-Extending existing watermain 300 feet
north to State Road.
To provide a potable water supply within the proposed new district requires the installation of 300 fee of 12"
watermain at an estimated cot of$11,900.00.
The main extension will serve two(2)industrial customers. One-time connection fees will amount to$1,886.00.
Estimated annual revenue is$725.00.
Watermains to be installed in Summer/Fall of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
Page 42 Board Minutes
May 20, 1997
Res. No. 97-5-10
RESOLVED,That the Board approve a revision to Water Utility Policies for Water System Extensions and
Customer Service Installations as recommended in Attachment III.
This revision will improve our flexibility in providing service to Water Utility customers and improves the ability
of the Water Utility to be successful in providing service in developed areas. The recommended changes are
necessary and compatible with the proposed policy for recovery of retail water service installation fees and charges.
On motion by Commissioner Strolle and seconded by Commissioner Christian,Resolution Nos. 97-5-5, 97-5-6, 97-
5-7, 97-5-8, 97-5-9,and 97-5-10 were adopted by the following vote:
YEAS: Christian,Pratt, Strolle, O'Leary,Royal, Werbelow
NAYS: None
ABSENT: Graves
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
Chairman O'Leary appointed the following Commissioners to the Nominating Committee for Board officers:
Commissioners Christian(Chair),Pratt, and Werbelow. Their work will begin once the Mayor announces the
Board appointments, subject to City Council confirmation.
RESOLUTIONS
MEMORIAL TRIBUTE TO WILLIAM D.LONTZ
MaMEEAS The members of the Board of Commissioners wish to express their sadness over the loss of
Commissioner William D. Lontz("Bill")on April 24, 1997,at the age of sixty. Bill Lontz was appointed Board of
Water and Light Commissioner on July 1, 1994. He served on the Finance Committee and also exercised a
leadership role as the Board's Chair Pro Tem;and
WHEREAS,Bill Lontz was a powerful advocate for economic development issues, and made numerous
contributions to the people of this community and state that will long endure;and
WHEREAS,Bill Lontz was a man of vision and conviction with genuine concern for community-related issues and
their relationship to economic development. He touched people with his wonderful sense of humor and kind,
gentle manner. His intelligence, integrity and sincerity leaves a mark on this Board that will be felt for years to
come; and
Board Minutes Page 43
May 20, 1997
WHEREAS,Having spent nearly thirty years addressing economic development issues at the state level,Bill Lontz
retired from the Michigan Department of Commerce in 1995. Throughout his tenure as a public servant, he was
instrumental in coordinating many large-scale projects such as General Motors' Poletown Plant in Hamtramck,
Mazda's Flatrock Plant and the Chrysler Jefferson Avenue Plant. He received many honors in community
planning for his work across the state,including the 1986 Public Servant of the Year. He also found time to teach
many courses in urban issues and resource development at Michigan State University, and served as Director of the
Peace Corp in Western Samoa. He continued his involvement in project development and community planning
through his consulting business up to the time of his death;now,therefore,be it
RESOLVED,The Board of Water and Light Commissioners hereby officially honors and salutes the life,
leadership and achievements of William D. Lontz.
RESOLVED FURTHER, It is with great respect for his contributions to this public power utility that we extend
this expression of our condolences to his wife,Rita, their son,Marty,their daughter,Marci, and his mother,
Mildred.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Share the Success. The Share the Success year-to-date performance through the month of April is at 353 points
out of a possible 500,which equates to an estimated gross financial impact of$1,808,023. The Share the Success
payment on that basis would be$2,254,666 for a net savings to our customers of$553,357. Monthly updates will
continue to be provided.
BWL v. USF&G. The BWL has settled with the U. S. Fidelity and Guaranty(USF&G)Insurance Company over
the Oakwood transformer explosion incident which occurred in 1987. A settlement of$385,000 is to be paid to the
BWL. Estimated recoverable damages were determined to be approximately$185,000, although the suit was for a
higher amount of approximately$387,000. The law firm of Willingham, Cote took this case on a contingency
basis; consequently, they will receive one-third of the net recovery,minus attorney's fees. Thus,BWL will receive
$288,752.41,which is the net recovery after deducting costs and expenses associated with the prosecution of the
lawsuit. Mr. Pandy congratulated Willingham, Cote and Staff Attorney Larry Wilhite for managing the case to a
successful conclusion.
Local Initiative Support Corporation (LISC). The BWL was among the partners listed in the Lansing LISC
brochure, consisting of 13 firms that kicked off the LISC fund raising campaign with$400,000 for development of
homes in Lansing neighborhoods.
Meetings on Electric Deregulation. General Manager Pandy reported that a positive meeting was held with
Representative Dennis Olshove who chairs the legislative effort on deregulation. Commissioners Royal and Strolle
and Electric System Control Director Bill Cook also took part in the discussions on deregulation. Mr. Pandy noted
that Representative Olshove seemed interested in proceeding with caution.
Mr.Pandy also reported that he and Bill Cook participated in a presentation at the Michigan Manufacturers
Association on May 16. A representative from CMS Energy was the main speaker on the benefits of deregulation.
The BWL was given a five-minute opportunity to present its position on this issue. Mr. Pandy noted that among
those present in the audience were many BWL customers who spoke in support of the BWL as a local utility.
Oldsmobile Classic. A schedule of events for the Oldsmobile Classic to be held June 2-8, 1997,at Walnut Hills
Country Club was handed out. The BWL as a bronze sponsor,will have a supply available of single day tickets,
Page 44 Board Minutes
May 20, 1997
club house passes and parking passes. Mr.Pandy encouraged all to participate in this worthwhile community
event. Proceeds benefit the Oldsmobile Classic Youth Charities Fund.
REMARKS BY COMMISSIONERS
Commissioner Christian commented that after hearing the memorial resolution read for the late Commissioner Bill
Lontz,it occurred to him that it is important for the Board of Commissioners to have a picture taken annually for
archival purposes.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle,seconded by Commissioner Christian,to excuse Commissioner Graves from
tonight's proceedings.
Carried unanimously. ,
ADJOURNMENT
There being no further business,the Board adjourned at 7:45 p.m.
Mary E. Secretary
Filed: May 27, 1997
Marilynn Slade, City Clerk
ATTACHMENT I
BOARD OF WATER AND LIGHT-LANSING MICHIGAN (Page 1 or
BUDGET FISCAL YEAR ENDING JUNE 30, 1998
WATER ELECTRIC STEAM TOTAL
PROJECTED INCOME STATEMENT FY 98
OPERATING REVENUE [1] 16,214,823 141,197,912 15,866,969 173,279,694
Operation/Maint Expense 11,488,057 114,287,831 12,460,468 138,236,356
Depreciation Expense 18,365,000
TOTAL OPERATING EXPENSE 166,601,356
OPERATING INCOME 16,678,338
Other Income [2] 5,757,727
Other Expense [3] 2,450727
NET INCOME 19,985,338
NET INCOME AFTER CITY PAYMENT 13,504,618
RATE OF RETURN-3/97 RATE BASE 4.60%
PROJECTED CASH FLOW FY 98
Restricted Operating Cash 21,156,500
Restricted General Cash 16,600,000
Special Project/Const Cash 21,100,000
BEGINNING CASH 7-1-97 [4] 58,756,600
Sources of Cash
Net Income 19,985,338
Depreciation 18,365,000
TOTAL SOURCES OF CASH 38,350,338
SOURCES OF CASH + BEG. CASH 97,106,838
Uses of Cash
Debt Principal [5] 2,392,957
Capital Expenditures [6] 29,307,000
Payment to City 6,480,720
TOTAL USES OF CASH 38,180,677
Restricted Operating Cash 17,279,545
Restricted General Cash 17,160,000
Special Project/Const Cash 24,486,616
ENDING CASH 6-30-98 58,926,161
ATTACHMENT I
(page 2 or 4)
BOARD OF WATER AND LIGHT - BUDGET FOOTNOTES
FISCAL YEAR ENDING JUNE 30, 1998
[1] Revenue based on sales forecast for water (9,254,000 ccf), electric (2,546,600
mwh) and Steam (2,410,898 mlb). These sales levels are 0.2% lower, 2.6% lower
(resale sales), and 66.6% higher (GM Plant 6) respectively than the twelve month
period ended December 1996. There are no rate changes anticipated, other than the
removal of electric ratchet clauses, included in the budget revenues.
[2] Other Income includes earnings on short term securities, water sewerage collection
fees and electric interest income on steam debt to electric.
[3] Other Expense includes interest on the 1989 and 1994 Revenue Bonds, pension
debt, Michigan Ash building at Erickson, steam interest expense of steam debt to
Electric, and customer deposits.
[4] Projected June 30, 1997 Restricted Operating Cash balances
Operations and Maint. Fund $20,716,500
Bond and Interest Fund 440,000
Total Restricted Operating Cash $21,156,500
Projected June 30, 1997 Restricted General Cash balances
Coal Buildup $ 3,600,000
Water Facilities 3,000,000
Uninsured Losses 9,900,000
Total Restricted General Cash $16,500,000
[5] Debt repayment includes principal payment for the 1989 and 1994 Revenue Bonds,
pension debt, Michigan Ash building at Erickson and the electric loan to steam.
(6] Capital expenditures represent total amounts estimated for all Annual Capital
Additions, Planned Capital Projects, and Bond Projects during Fiscal Year 1998
ATTACHMENT I
(Page 3 or 4)
BOARD OF WATER&LIGHT-LANSING,MICHIGAN
BUDGET FOR FISCAL YEAR ENDING JUNE 30,1998
DIVISION SUMMARY-OPERATIONS&MAINTENANCE EXPENSE
Restated for Budget Comparison
Vehicle& Material Production Outside Expenses
Net Equipment & Fuels/Chem. Services to be
Labor/1/ Charges --aURplies Purch Power 8 Other/2/ Total Water Electric Steam Distributed Total
ADMINISTRATIVE 980,501 1,000 63,466 0 17,616,299 18,661,266 50,018 731,474 40,530 17,839,244 18,661,266
ELECTRIC UTILITY 16,036,777 597,231 3,032,967 70,117,568 4,194,362 93,978,905 0 93,689,452 0 289,453 93,978,905
WATER UTILITY 3,699,308 183,079 479,920 2,831,702 1,084,280 8,278,289 8,278,289 0 0 0 8,278,289
STEAM UTILITY 2.346,781 53,800 427,600 6,835,789 2,264,149 11,928,119 0 0 11,928,119 0 11,928,119
TECHNICAL SERVICES 3,334,955 67,739 774,038 0 1,600,454 5,777,186 0 0 0 5,777,186 5,777,186
HUMAN RESOURCES 467,058 0 66,950 0 270,375 804,383 0 0 0 804,383 804,383
CORPORATE PLANNING 166,644 0 9,000 0 25,300 200,944 0 0 0 200,944 200,944
COMMUNICATION 157,735 0 88,016 0 368,586 614,337 0 9,800 0 604,537 614,337
TREASURER/CONTROLLER 1,951,344 71,358 45,151 0 263,916 2,331,769 0 0 0 2,331,769 2,331,769
CONSUMER SERVICES 4,190,686 112,255 123,094 0 869,935 5,295,970 223,668 313,809 39,500 4,718,993 5,295,970
GRAND TOTAL $33,331,789 $1,086,462 $5.110,202 $79,785,059 $28,557,656 $147,871,168 $8.551,975 $94,744,535 $12,008,149 $32,566,509 $147,871,168
Distributed Expenses:
Spread to Water, Electric,&Steam/3/ 2,936,082 19,543,296 452,319 (22,931,697) 0
Vehicle and Equipment Charges 141 (1,086,462) (1,086,462)
Indirect Costs Spread to Capital Budget/5/ (8,548,350) (8,548,350)
NET BUDGET BY UTILITY $11.488,057 $114,287,831 $12,460,468 $0 $138,236,356
ATTACHMENT I
(Paae 4 of 4)
BOARD OF WATER AND LIGHT - DIVISION SUMMARY FOOTNOTES
FISCAL YEAR ENDING JUNE 30, 1998
[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.
Board Minutes
May 20, 1997
ATTACHMENT II
Budget Policv
WHEREAS, the Lansing City Charter requires the Board of Water and Light to adopt an annual budget for the
coming fiscal year(July through June)before June 1 each fiscal year, and
WHEREAS, it is fiscally prudent and good management practice to prepare and use short term forecasts of
operations,as well as, longer term forecasts of facilities and financial resources required, and
WHEREAS, a budget provides fiscal guidelines for management to operate within and a tool for Commissioners to
use when developing adequate rates for services or when monitoring management's performance.
THEREFORE,BE IT RESOLVED,That:
1. Management will prepare an annual budget for the upcoming fiscal year for Commissioner review and
approval before June 1 each fiscal year.
2. The budget documents will include projected sales, revenues, expenses and cash flow with appropriate
explanations.
3. The General Manager is authorized to establish and implement budgeting procedures consistent with this
policy and good financial practice.
4. The budget goal each fiscal year is to provide all services within the expected revenues and provide
sufficient funds for future capital expenditures. However, if that is not the case,then management must present
specific recommendations for rate changes,cost reductions,issuance of debt or other specific actions,prior to
budget approval.
5. Approval of the budget authorizes the General Manager and management to expend funds up to the
budget amount and pursuant to the Purchasing Policy. Approval authorizes capital projects at the amount of the
project estimate,but limits total annual capital expenditures to the total amount included in the capital budget.
6. As business conditions warrant,the Commissioners may,from time to time,authorize adjustments to the
approved budget.
Re: Resolution 97-5-10
ATTACHM_
(Page 1 of 2)
Recommended Changes to: Sec.12-8 Water Service Policies:
Proposed revisions are indicated by: language to be added is shown underlined, language to be deleted is shown as
stfikeilif .
III. Water System Extension
Extension of the BWL's water distribution system may be required in order to serve a new customer in the
water service area. In such cases the cost of the system extension will be paid by the customer requesting
the service. The Water Utility may share in the cost for items such as main oversizing for system
reinforcement.
The Water Utility will provide a firm cost to the customer for the system extension before the project is
initiated. Payment in ftill will be r-equir-ed pr-i8r-te eensEmetien. Payment after-the stfft ef eensa%
Full payment of costs are normally required before the start of construction, however,payment
arrangements may be approved by the BWL. A minimum Payment of 50% is required before construction
is initiated and final pavment is due upon receipt of invoice at the completion of construction. Payment
arrangements that extend bevond the completion of construction may be permitted at the discretion of the
General Manager,with payment to include a finance charge.
The design for all system extensions will conform to good engineering practice as determined by the water
utility in order to protect the integrity of the water distribution system. It is recognized that flexibility in
design may be required at times in order to accommodate specific customer needs.
The Board of Water and Light will assume ownership of all system extensions and will be responsible for
maintenance as required.
N. Customer Service Installation
The cost of a new water service installation will be paid by the customer requesting the installation. The
Water Utility will provide a firm cost for the service installation before the project is initiated. The firm
cost will include a system connection fee assessed for all new service connections as required in Rate#3
of the Water Service Rates. . Full Payment of costs
is normally required before the start of construction,unless prior arrangement is made with the BWL.
Payment arrangements will conform to policies for recovery of water service installation fees and charges.
The design for all service installations will conform to good engineering practice as determined by the
Water Utility. Water Utility personnel will assist the customer if requested regarding design of the
service and connection to customer-ownedplumbing. a customeris responsible for costs associat
with connection to customer owned plumbing.
The Board of Water and Light will assume ownership of all services up to and including the meter and
will be responsible for maintenance of the service as required.
Water service to any customer may be interrupted or curtailed due to emergency conditions. The
customer is responsible for installation and maintenance of devices necessary to protect customer-owned
equipment against service interruptions or other disturbances in the distribution system. The Water Utility
will make every effort to minimize such interruptions.
The customer is also responsible for installation and maintenance of equipment to prevent a cross-
ATTACHMENT III
Page 2 o
connection between customer-owned plumbing and the water distribution system. The cross-connection
control measures will conform to good engineering practice as determined by the Water Utility.
The Water Utility reserves the right to deny or terminate service to any customer whose piping or
equipment threatens the safe operation of the water distribution system.
The Board's authorized agents shall have access to the Customer's premises at all reasonable hours,to
install,inspect,read,repair or remove its meters;to install,operate and maintain other Board property,
and to inspect the Customer's connection and plumbing. Neglect or refusal on the part of the Customer to
provide reasonable access shall be sufficient cause for discontinuance of service by the Board,and
assurance of access may be required before service is restored.
The Water Utility will offer assistance to customers as requested in areas where the technical assistance of
Utility personnel may be of assistance. These areas include cross connection control,fire service design,
lawn sprinkler system design,relocation or upgrading of existing services,surge protection,and pressure
problems.
41 MAY 12, 1997 ID: BOARD OF WATER & LIG TEL NO: (517) 371-G203 #39702 PAGE: 2/2
Y
.. .. ..
COMMITTEE OF THE WHOLE
The Committee of the Whole of the Board of Water and Light Commissioners will meet on:
Meeting Date: Tuesday,May 20, 1997-5:30 p.m.
Location: Second Floor Boardroom
Board of Water and Light Office Building
123 West Ottawa Street,Lansing r
AGENDA
1. EEO Report ry
2. Fiscal Year 1997-98 Budget =_ "� 2-0-
-C
C-, m
3. Ottawa Station Development Project rn ry
4. Dimondale Dam
5. Public Hearing Date for Rate Amendments
. ,� ��.3+�.,F. . . .
RESCHEDULED REGULAR MEETING
The regular meeting of the Board of Water and Light Commissioners of the City of Lansing,
Michigan, previously scheduled for May 27, 1997,is rescheduled as noted:
New Meeting Date: Tuesday,May 20, 1997-Approximately 6.30 p.m.
Location: Second Floor Board Room
Board of Water and Light Office Building
123 West Ottawa Street,Lansing
Certified by:
Mary E. Sova
Corporate Secretary
Page 24
MINUTES OF BOARD OF COMMISSIONERS' MEETING I '� -2 N J: O
LANSING BOARD OF WATER AND LIGHT
Lr'O.1'5.�1„�` NIG CITY Y CLERK
Tuesday,April 29, 1997
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 O'Leary.
Present: Commissioners Christian, Graves, O'Leary,Pratt, and Strolle.
Commissioner Werbelow participated via speakerphone.
Absent: Commissioner Royal.
The Secretary declared a quorum present.
Chairman O'Leary opened the meeting by paying tribute to the memory of the late Commissioner William D.
Lontz who passed away on April 24, 1997. His comments follow:
"There is an empty chair here tonight that we are all acutely aware of. A month ago that chair
was filled with Bill Lontz. Last Thursday(April 24, 1997), Bill passed away. Bill left a loving
wife and family, and many, many friends. He left a legacy of service to his fellow men. In Frank
Cappola's movie, It's a Wonderful Life, 'the angel, Clarence, said to George Bailey, 'every
man's life touches so many other lives that when that individual is missing, it leaves a huge
hole. ' There will be a huge hole on this Board and in this community, and even in Western
Samoa where Bill and his wife, Rita, served during their years in the Peace Corp. Bill touched
many lives in a direct way; he and Rita are the epitome of service above self. Bill was a very
soft spoken, kind person who was very involved in the community and sensitive to other people's
feelings. He had strong views about many issues, and presented them very gently. In a word, he
could disagree without being disagreeable. We are honoring Bill tonight by dedicating this
meeting to his memory. Please join me for a moment of silent meditation."
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
On motion of Commissioner Christian, and seconded by Commissioner Strolle,the minutes of regular meeting of
March 25, 1997, were adopted.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF
THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications received.
Board Minutes Page 25
April 29, 1997
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on April 16, 1997,to discuss the following items:
1. Proposed BWL Home Ownership Program,
2. Deregulation Issues, and
3. Pension Process
Present were Commissioners Christian, Graves,O'Leary,Pratt,Royal, Strolle.
Commissioner Werbelow participated via speakerphone. Commissioner Lontz was absent.
Proposed BWL Home Ownership Program. The Committee discussed a proposed home ownership residency
incentive program for full-time Board of Water and Light employees, modeled after the City of Lansing's Home
Ownership Program(LHOP). The objective for implementing the home ownership program is to provide an
economic development assistance program that would revitalize neighborhoods in the City of Lansing and provide
an incentive for employees to move inside Lansing's city limits. The Commissioners are weighing the merits of
expanding a suggested proposal based on a commitment of$50,000 to provide ten(10)loans at$5,000 and
partnering with the Housing Resource Center, as a non-profit corporation,for additional leverage for matching
funds from the Local Initiatives Support Coalition(LISC). Rose Norwood,Director of the Housing Resource
Center(HRC), and Denise Gathman were present to respond to questions relative to eligibility guidelines and the
terms by which loans would be made available to BWL employees through HRC. Before proceeding further, the
Commissioners requested staff to provide information on the geographic boundaries of targeted neighborhoods
eligible for LISC funds. The program parameters are being evaluated to determine the most feasible option for the
proposed BWL Home Ownership Program for Employees(BWL-LHOPE).
Deregulation Issues. An overview on electric restructuring activities was presented by Bill Cook,Director of
Electric System Control, and Brian Cooper,Utility Support Services Administrator. Background information on
Michigan's electric utilities and the opportunities and concerns surrounding efforts to foster competition in this
important industry was discussed. The Commissioners agreed that it is essential for the BWL to continue
positioning for the full impact of restructuring. Electric restructuring activities to the present were outlined.
Pension Plan(Defined Benefit and Defined Contribution)Process Update. Treasurer/Controller Dana Tousley
gave an overview of activities that are taking place on the pension plan transition issue. Through union
negotiations, it was agreed to freeze the BWL's Defined Benefit(DB)Plan and start up a new Defined
Contribution(DC)Plan. This transition is expected to take approximately one year before it is fully resolved.
Proposed pension changes were reviewed for the existing DB Plan and the new DC Plan. The DB Pension Plan
and Trust Agreement are being finalized for Board consideration in June and the DC Plan is expected to be on the
Board agenda in July.
Respectfully submitted,
COMMITTEE OF THE WHOLE
On motion of Commissioner Strolle and seconded by Commissioner Christian,the Committee of the Whole Report
was approved as presented.
General Manager Pandy introduced Tom Edmiston,Director of the Lansing area Local Initiatives Support
Corporation(LISC)who answered questions relative to LISC matching funds. A map was displayed depicting the
City of Lansing's four neighborhood strategy areas eligible for LISC funds through the Housing Resource Center
serving as the conduit. To qualify for LISC matching funds, the BWL would need to commit funds to LISC for an
employee-assisted housing program by June 30, 1997. By selecting the LISC option,ten employees per year could
qualify for$5,000 loans from the BWL to purchase a home in targeted neighborhoods in the city. The BWL loan
Page 26 Board Minutes
April 29, 1997
would be forgiven if the employee remains in the home for at least five years. The same ten employees would also
be eligible for$5,000 of matched, low-interest loans through LISC to rehabilitate their homes. It was noted that if
employees do not utilize the rehabilitated areas,the remainder of LISC matching funds for the fiscal year would be
reallocated to other cities in Michigan.
A second alternative discussed,but not selected,was providing$5,000 in BWL funds to eligible employees without
placing a restriction on targeted areas in which to locate within the city. There would be no matching LISC funds
available under this option.
Following deliberation, Commissioner Christian moved, seconded by Commissioner Pratt,to approve the following
resolution:
Board of Water and Light Home Ownership Program for Employees
Resolution 97-4-3
WHEREAS, Councilmember Paul Novak has proposed a Board of Water and Light Home Ownership Program to
increase the number of Board of Water and Light employees who live in the City of Lansing, and
WHEREAS, he has proposed a home ownership residency incentive program for full-time Board of Water and
Light employees, and
WHEREAS, the Board of Water and Light Commissioners desire to implement the program as attached hereto,
and
WHEREAS, the Board of Water and Light Commissioners desire to participate in the Local Initiatives Support
Corporation(LISC)home ownership program in conjunction with the locally organized Community Development
Corporation(CDC)to help transform distressed neighborhoods into healthy communities and to maximize the
LISC match, and
WHEREAS,Homes eligible for the program would come from Community Development Corporation Grant
(CDCG)target areas within the City of Lansing,as delineated on the attached map.
NOW, THEREFORE BE IT RESOLVED, That the Board of Water and Light Commissioners hereby approve and
adopt the attached final draft of the Board of Water and Light Home Ownership Program for Employees(BWL-
HOPE)for full-time Board of Water and Light employees whose bargaining units have agreed to participate in the
program and exempt employees, except for the General Manager, and
BE IT FURTHER RESOLVED, That this approval is subject to obtaining any necessary approvals or concurrences
from employee groups represented by unions, and
BE IT FURTHER RESOLVED, That$50,000 be allocated annually for three years effective with Fiscal Year
1997-98,for the Board of Water and Light Home Ownership Program for Employees,and
BE IT FURTHER RESOLVED,That the offering of the program is subject to the$50,000 Fiscal Year 1997-98
funding limitation set in the budget($5,000 for up to ten employees)and is to be implemented on a first-come first-
served basis,and.
BE IT FINALLY RESOLVED,That the program be evaluated in nine months to determine if employees are
utilizing the homes eligible for the program in the targeted areas within the city. The Board would have the option
to decide at that time whether participation with LISC should continue and/or if the program should be modified to
remove target area restrictions within the city.
Board Minutes Page 27
April 29, 1997
Adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary, Werbelow-(participated by speakerphone)
NAYS: None
ABSENT: Royal
GENERAL MANAGER'S RECOMMENDATIONS
WATER
Res. No. 974-1
That the Board agree to serve water to proposed Water District No. 124,Delhi Township, as requested by
resolution of the Delhi Charter Township Board on April 29, 1997,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 advised officials of Delhi Township as follows:
1. The Board will accept Water District No. 124 established by Township resolution and will provide a
potable water supply to said district.
2. The Township will be required to make a$40,162.50 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 CXXM covering the
furnishing of a potable water supply in Water District No. 124.
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$40,162.50 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)CXIV)to furnish a potable water supply in Water District No. 124.
The geographical area of Water District No. 124 is as follows: Northeast corner of Section 24,T3N,R2W,Delhi
Township,beginning at then north side of Holt Road approximately 2,455 feet west of College Road, thence south
1,575 feet along proposed road.
To provide a potable water supply within the proposed new district requires the installation of 1,575 feet of water
I1Mff Ma TM ny=rs 51 an estimated coN o e owns p—acknowlEages the portion o
$40,162.50 of the cost of said project due to required water main oversizing,BWL's oversizing cost will be
$55,125. The main extension will serve three(3)industrial customers. One-time connection fees will amount to
$16,080. Estimated annual revenue is$41,400.
Water mains to be installed in Summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
This project is contiguous to Water District No. 125 and will be constructed in conjunction with.
Page 28 Board Minutes
April 29, 1997
Res. No. 974-2
That the Board agree to serve water to proposed Water District No. 125,Delhi Township, as requested by
resolution of the Delhi Charter Township Board on April 29, 1997, 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. 125 established by Township resolution and will provide a
potable water supply to said district.
2. The Township will be required to make a$87,720 non-refundable contribution-in-aid of construction
to cover the charges set forth in the Board's Policies and Procedures for 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(CXXV)covering the
furnishing of a potable water supply in Water District No. 125.
4. Watermains 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$87,720 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 CXXV)to furnish a potable water supply in Water District No. 125.
The geographical area of Water District No. 125 is as follows: East 1/4 corner of Section 24, T3N,R2W,Delhi
Township beginning at south end of Water District No. 124,thence southeast direction along proposed future road
3,440 feet to College Road.
To provide a potable water supply within the proposed new district requires the installation of 3,440 feet of
watermain and fire hydrants at an estimated cost of$208,120. Delhi Township acknowledges the portion of
$87,720 of the cost of said project. Due to required watermain oversizing,BWL's oversizing cost will be
$120,400. The main extension will serve four(4) industrial customers. One-time connection fees will amount to
$21,440. The estimated annual revenue is$93,600.
Watermains to be installed in Summer of 1997 following the receipt of the Township's non-refundable
contribution-in-aid of construction and the signing of the agreement.
This project is contiguous to Water District No. 124 and will be constructed in conjunction with.
On motion by Commissioner Strolle, and seconded by Commissioner Christian,to approve Resolutions 974-1 and
97-4-2 as presented.
Adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle,O'Leary, Werbelow-(participated by speakerphone)
NAYS: None
ABSENT: Royal
Board Minutes Page 29
April 29, 1997
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
Chairman O'Leary appointed Commissioner Strolle Chair Pro Tern of the Board to fill the vacancy created by the
recent death of Commissioner William Lontz. In this capacity Commissioner Strolle will preside at the Board's
Committee of the Whole meetings.
On motion by Commissioner Christian, seconded by Commissioner Pratt,to appoint Commissioner Strolle as the
Chair Pro Tem for the remainder of this fiscal year.
Adopted by the following vote:
YEAS: Christian, Graves,Pratt, O'Leary, Werbelow-(participated by speakerphone)
NAYS: None
ABSTAINED: Strolle
ABSENT: Royal
(Commissioner Werbelow signed off by telephone at approximately 6:00 p.m.)
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Belle River Fuel Cost. General Manager Pandy reported that a letter has been sent to the Michigan Public Power
Agency by Bill Cook,Director of Electric System Control Division, expressing concern over an ongoing fuels costs
dispute with Detroit Edison Company's(DECo). It was noted that while DECo's fuels costs go down,Lansing's
Belle River related variable costs due to power purchased from Belle River have been on the rise. A copy of the
letter dated April 24, 1997,was handed out for reference.
Motor Wheel Disposal Site. Mr. Pandy reported that a letter has been written to the U. S. Environmental
Protection Agency(EPA),Region 5,by the Department of Environmental Quality(DEQ) -Drinking Water and
Radiological Protection Division,expressing concern about clean-up activities associated with the Motor Wheel
Disposal Site. EPA is also requested to take corrective action to"fast track" any necessary corrective actions for
the bedrock aquifer(Saginaw Formation)and amend the Record of Decision for clean-up of the glacial aquifer to
provide clean-up standards consistent with drinking water criteria. A copy of the April 18, 1997, letter was handed
out for reference.
Meetine on Dereeulation. Attending a luncheon to discuss deregulation issues with State Representative Dennis
Olshove are Commissioners Diane Royal and John Strolle(attending in Chairman O'Leary's absence).
Ottawa Power Plant Redevelopment Status. General Manager Pandy reported that positive discussions are
continuing between Ottawa Park Associates,Developers(OPAD)and officials from General Motors(GM).
Financial models showing alternative ways to finance the project were reviewed with GM. Mr.Pandy noted that
the developers and GM are well aware that this project is in the public eye,and that time is of the essence. It is a
question of whether OPAD can structure the transaction in a manner that is acceptable to GM. An added incentive
for a quick decision is the fact that GM's training facility on Saginaw Street,Lansing,is coming up for renewal.
Page 30 Board Minutes
April 29, 1997
Commissioner Graves commented that at some point the Board may have to lock in a time frame for a decision in
order to determine if the project should go out for bid.
REMARKS BY COMMISSIONERS
Commissioner Christian inquired about the status on the sale of the BWL Main Office Building at 123 W. Ottawa
Street. General Manager Pandy responded that Joel Ferguson(Capitol Annex,L.L.C.)was advised on March 17,
1997, of the Board's understanding that a written commitment from the Speaker of the House would be
forthcoming by the end of April, 1997. Chairman O'Leary indicated that the latest word he received was that the
Governor's signature is needed to finalize the commitment. Following discussion,the Board agreed to request an
update report from Mr.Ferguson to determine if an extension is needed.
Commissioner Strolle commended Brian McLeod,Fuels Procurement Manager,for his recent price adjustment
negotiation with Costain Coal Sales(MP88).
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle, seconded by Commissioner Christian,to excuse Commissioners Royal and
Werbelow from tonight's proceedings.
Carried unanimously.
ADJOURNMENT
On motion by Commissioner Graves,the Board adjourned at 6:20 p.m.
Mary E.AIV. .retary
Filed: May 2, 1997
Marilynn Slade, City Clerk
16:30 APR 07, 1997 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #36774 PAGE: 212
,
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,
REVISED NOTICE
COMMITTEE OF THE WHOLE MEETING
Wednesday,April 16, 1997-5:30 p.m.
A meeting of the Committee of the Whole of the Board of Water and Light Commissioners of the City of
Lansing, Michigan,will be held at 5:30 p.m. on Wednesday, April 16, 1997, in the second floor Board Room of
the Board of Water and Light Office Building, 123 West Ottawa Street,Lansing,Michigan.
AGENDA TOPICS
i-TI
1. Deregulation Issues co n
l
2. Proposed BWL Home Ownership Program C-) 1-71
m CO CD
3. Pension Process Update -v —
co
4. Other related matters that may appropriately come before the Committee
RESCHEDULED REGULAR MEETING
The date of the regular meeting of the Board of Commissioners of the Board of Water and Light of the City of
Lansing, Michigan, set for April 22, 1997,is changed as follows:
Rescheduled Date: Tuesday,April 29,1997-5:30 p.m.
Location: Second Floor Board Room
Board of Water and Tight Office Building
123 West Ottawa Street
Lansing, Michigan
Certified by:
Mary E. Sova
Corporate Secretary
cc: BWL: Commissioners,Executive.Staff,Bldg.Maintenance, Security(Stancliff,Cochran)
City City Clerk City Council office, Mayor's office
Post: 417197
Page 13
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,March 25,1997
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 O'Leary.
Present: Commissioners Christian, Graves,Lontz, O'Leary,Pratt,Royal, and Strolle--7
Absent: Commissioner Werbelow-1
The Secretary declared a quorum present.
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
c� C.)
APPROVAL OF MINUTES
On motion of Commissioner Strolle,and seconded by Commissioner Christian,the minutes of rear meeting of
February 25, 1997,were adopted. x'
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF
THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
A thank you letter from Commissioner William Lontz was received in appreciation for the Board's get well wishes
during his recent illness.
Placed on file.
A letter from Dave Dempsey,Director of the Michigan Environmental Council,was received relative to the
BWL's Integrated Resource Plan(IRP).
Referred to staff for follow-up and response.
A letter from Jennifer Norris,48845 S.Hagadorn,East Lansing,was received relative to the 1RP.
Referred to staff for follow-up and response.
Page 14 Board Minutes
March 25, 1997
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on March 11, 1997.
Present were Commissioners Lontz, O'Leary,Pratt,Royal,and Strolle. Commissioner Werbelow participated in
discussions via a speakerphone connection. Absent were Commissioners Christian and Graves.
The following items were considered:
1. Lansing Home Ownership. Councilmember Paul Novak presented an overview of the Lansing Home
Ownership Program for Employees(LHOPE)implemented by the City of Lansing. He encouraged the
Commissioners to consider a similar program for Board of Water and Light(BWL)employees. Following
discussion,the Commissioners requested that staff prepare a proposal outlining the program parameters for BWL
employees who locate in the City of Lansing. An appropriation of$50,000 for loans up to$5,000 each was
suggested by Councilmember Novak. Upon review,the Board will consider a recommendation for
implementation.
2. Community Assistance Programs. Councilmember Novak also encouraged the Board to consider
pursuing a low-income utility assistance program based on a dollar check-off on a customer's monthly utility bill.
This program would be voluntarily provided by customers to recognize needed assistance to low-income customers
in meeting their utility bills. Almus Thorp,Executive Director of the Greater Lansing Housing Coalition,was also
present and suggested a form of utility incentive to assist homeowners who are taking distressed properties by
offering a rate similar to that of the Enterprise Zone. Following discussion,staff was requested to bring back
proposals addressing the above two issues for review and consideration.
3. Dimondale Dam. Bruce Miller,President of the Village of Dimondale,and Denise Parisian, Village
Clerk,were present to discuss the Village Council's interest in the possible acquisition of the BWL properties
within the corporate limits of the Village of Dimondale. Mr.Miller reported that the BWL's recent pressure from
the Department of Natural Resources(DNR)to eliminate the dam and return the river to a natural state suggests
the need for the Village Council to formalize its interest and intent in these parcels. He also reported that the
Village is proceeding with the development of a recreation plan which will include a recommendation for each of
the properties in question and funding efforts. The Commissioners discussed the BWL's potential liability with
DNR requirements for the dam removal and containment of the silt around the dam and the impact of the tradeoffs
between the liability and the asset. General Manager Pandy was requested to report back with appraisal
information on the Dimondale parcels for review by the Committee.
4. Budget Overview. Treasurer/Controller Dana Tousley presented an overview of the budget process for
Fiscal 1998. He described three versions of budgeting consisting of a traditional budget,"zero"budget and
"market driven"budget.
5. Sale of BWL Ottawa Street Office Building. The City Council's resolution#105,adopted March 10,
1997,expressing a favorable view regarding the sale of the BWL Office Building to CapitaI Amine ,L.L.C.
as a State legislative building was reviewed. After lengthy discussion,there was consensus among the
Commissioners to communicate with Capitol Annex,L.L.C.that the Board awaits the developer obtaining a
written commitment from the Speaker of the House by the end of April, 1997. After a commitment is obtained and
the major issues with the City are negotiated,the Board of Commissioners would expect to negotiate the final
details of a purchase agreement with the developer.
6. OPAD Update. General Manager Pandy presented an update on the Ottawa Power Plant project. Ottawa
Park Associates,Developer(OPAD)is proceeding to arrange a meeting with representatives of General Motors'
Small Car Group to discuss their training needs and building modifications.
Page 15
Board Minutes
March 25, 1997
7. Industry Restructuring. General Manager Pandy presented an overview of a major initiative aimed at
dramatically streamlining work processes at the BWL. He briefed the Commissioners on the creation of four teams
of employees to examine the following major processes that exist at the BWL:
• Selling and Billing
• Delivery
• Producing/Procuring
• Support
The teams consisting of a cross section of employees are being asked to organize work around these four processes.
Mr.Pandy noted that it is essential for the BWL to become a more flexible organization and able to adapt quickly
to change and to take advantage of new opportunities to serve our customers. The four redesign teams have been
asked to submit their recommendations by mid-June so that changes can be in place in the new fiscal year.
Respectfully submitted,
William D.Lontz,Chair Pro Tern
COMMITTEE OF THE WHOLE
On motion of Commissioner Lontz, and seconded by Commissioner Christian,the Committee of the Whole Report
was accepted as presented.
General Manager Pandy handed out a proposal for a Board of Water and Light(BWL)Lansing Home Ownership
Program for BWL employees. This item will be discussed at the Committee of the Whole meeting in April.
An executive summary of the appraisal report prepared by Appraisal Associates,Inc. on the vacant BWL land in
the Village of Dimondale was handed out for review. Mr.Pandy reported that a memorandum of understanding is
being drafted that enunciates the Village's assumption of the responsibility on what this transaction would
encompass relative to the Department of Natural Resources matters.
With regard to the sale of the BWL Ottawa Street Office Building, Chairman O'Leary reported that a letter from
the Board of Commissioners has been sent to Capitol Annex,L.L.C. stating the Board's position, as noted in the
Committee of the Whole Report,above.
With regard to the Ottawa Power Plant redevelopment project,General Manager Pandy told the Board that a
meeting was held March 25, 1997,between General Motors' (GM)Small Car Group management and the United
Auto Workers' union to discuss training needs. The prospect of the plan to use the Ottawa Street Power Plant for
training workers continues to be under active discussion.
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on March 19, 1997,to discuss(1)the Pension Fund Quarterly Report and(2)to
hear Pension Fund Investment Consulting and Money Management Presentations.
Present were: Commissioners Strolle(Chair),Christian,O'Leary,Pratt, and Royal.
Commissioner Werbelow participated in the discussion via speaker phone.
Treasurer/Controller Dana Tousley reviewed the quarterly pension fund report.
Interviews and discussions were held with the following consultants regarding outside money management and
investment consulting.
Page 16
Board Minutes
March 25, 1997
• Chuck Sargent - Everen Securities
• Harvey Gammage - Smith Barney
• Thad Zale and Ernst Kasower - Merrill Lynch
• Mark Dixon and Harry Buttorf - Plante&Moran
• Glenn Murray - Smith Barney
Staff will prepare a summary of the alternatives discussed,including the costs and benefits of each option for
Commissioners review.
The proposed amendment to Pension Investment Policy Section VIR was tabled by the Commissioners for future
consideration.
Respectfully submitted,
John Strolle, Chair
Personnel Committee
On motion of Commissioner Strolle,and seconded by Commissioner Christian,the Personnel Committee Report
was received and placed on file.
GENERAL MANAGER'S RECOMMENDATIONS
CORPORATE PLANNING
Res.No.97-3-1
WHEREAS, certain real property, (known as property at North Grand Avenue/East Shiawassee
Street)more particularly described below,is under the jurisdiction of the BWL;and,
WHEREAS, the City of Lansing by its Public Service Department desires to use such real
Property for the purpose of storm water sewer and outlet;and,
WHEREAS,pursuant to 5-202.7 of the Lansing City Charter,the BWL and other agencies of the
City are encouraged to cooperate on projects deemed to be beneficial to the City,and,
Property Description
The northerly 45 feet of the southerly 99 feet of lot 9 of block 66,Dri 'nal plat of the
Town Of Michigan,now City of Lansing,Ingham County,Michigan,as recorded in
Liber 2,pages 36-38,Ingham County Plats, and also described as the 45 feet wide
parcel of land fronting on North Grand Avenue immediately south of East Shiawassee
Street between the east line of North Grand Avenue and the west side of the Grand
River.
NOW, THEREFORE,be it resolved,that the aforementioned property is,at present, not needed
in its entirety for utility operational purposes and may be used by the City of Lansing by its Public
Service Department for a storm water sewer and outlet. Further,that the General Manager is
authorized to execute a use agreement, subject to approval of BWL legal counsel,granting
consent to the City of Lansing by its Public Service Department to use the property solely for
storm water sewer and outlet purposes. Further,should the property cease to be used by the City
Board Minutes Page 17
March 25, 1997
of Lansing by its Public Service Department for storm water sewer and outlet purposes, it shall
revert to the jurisdiction of the BWL, to be used for utility purposes.
The reconstruction of the Shiawassee Street Bridge required the City to relocate, replace and
modify the storm water sewer and outlet to the Grand River previously located in the Shiawassee
Street right-of-way. The new underground structures are located within the northern portion of
the Board's property at the corner of North Grand Avenue and Shiawassee Street and will not
interfere with the future development of the property or the Ottawa Street Station redevelopment.
Res.No. 97-3-2
WHEREAS,certain real property(known as river bank property at Eckert Station),more
particularly described below, is under the jurisdiction of the BWL;and,
WHEREAS,the City of Lansing by its Parks and Recreation Department desires to use such real
property for the purpose of an extension of River Trail West;and,
WHEREAS,pursuant to 5-202.7 of the Lansing City Charter,the BWL and other agencies of the
City are encouraged to cooperate on projects deemed to be beneficial to the City;and,
Property Description
Commencing at the Center of Section 21,T4N,R2W, City of Lansing,Ingham
County,Michigan;thence N 89" 50'47' W,parallel with the southerly right-Of-way
line of the Grand Trunk Railroad,784.49 feet;thence S 00°00'00" W,296.38 feet to
the point of beginning on the northerly waters edge of the Grand River,thence N 17'
37' 17" E, 37.39 feet;thence N 37°41'39' E,42.50 feet;thence N 78'20' 15" E,
99.70 feet;thence N 391 30'25' E,224.50 feet;thence S 89'50'47' E, along the
southerly right-of-way line of the Grand Trunk Railroad,20 feet;thence southwesterly
along the waters edge of the Grand River to the point of beginning.
NOW,THEREFORE,be it resolved,that the aforementioned property is,at present,not needed
in its entirety for utility operational purposes and may be used by the City of Lansing by its Parks
and Recreation Department for River Trail West purposes. Further,that the General Manager is
authorized to execute a use agreement,subject to approval of BWL legal counsel,granting
consent to the City of Lansing by its Parks and Recreation Department to use the property solely
for River Trail West purposes. Further, should the property cease to be used by the City of
Lansing by its Parks and Recreation Department for River Trail West purposes,it shall revert to
the jurisdiction of the BWL,to be used for utility purposes.
A portion of the River Trail West is to be constructed on and along a portion of the river bank at
the Eckert Station. The City, as part of the use agreement and at their expense,will be
responsible for security fencing,landscaping and protection of any BWL utility facilities within
the above described area.
Page 18
Board Minutes
March 25, 1997
On motion by Commissioner Strolle, and seconded by Commissioner Royal,to approve Resolutions 97-3-1 and
97-3-2 as presented.
Adopted by the following vote:
YEAS: Christian, Graves,Lontz,Pratt,Royal, Strolle,O'Leary
NAYS: None
ABSENT: Werbelow
ELECTRIC PRODUCTION
Res.No.97-3-3
That the Board enter into a Coal Supply Agreement("Agreement")with Venture Energy,a
partnership of NERCO Coal Sales Company and DTE Coal Services,Inc. ("Seller")for the
supply of Western Powder River Basin(PRB")coal to be used in a test bum project at the Board's
Eckert Station, subject to approval as to form by the BWL's legal counsel. The Agreement
particulars are as follows:
I. The term of this agreement will be through July 31, 1997, unless otherwise
extended upon mutual consent by the parties.
2. The Seller will provide up to 100,000 tons of PRB coal from its Antelope Mine
located in Wyoming.
3. The Seller will arrange all of the transportation logistics for delivery to Eckert
Station.
4. The purchase price for the tonnage sold and delivered by Seller shall be$25.78
per net ton F.O.B. Eckert Station. This equates to delivered price of$1.465 per
mmbtu based on a guaranteed 8,800 Btu/lb coal quality.
By entering into this Agreement with Venture Energy,the BWL will be able to conduct a test
bum of$100%PRB coal at Eckert Station unit#6 to further its knowledge and experience
utilizing these different types of coals to prepare itself to effectively and efficiently reduce electric
generation costs for the benefit of our customers. The test bum is tentatively scheduled to
commence May 1, 1997, and is expected to run for ninety(90)days.
On motion by Commissioner Strolle,and seconded by Commissioner Lontz,to approve Resolution 97-3-3 as
presented.
Adopted by the following vote:
YEAS: Christian, Graves,Lontz,Pratt,Royal, Strolle,O'Leary
NAYS: None
ABSENT: Werbelow
Board Minutes Page 19
March 25, 1997
ELECTRIC SYSTEM CONTROL
Res. No. 97-34
It is recommended that R. W. Beck,Inc.,perform an electric rate unbundling study with a cost
not to exceed$76,600.
This study is needed for the Electric Utility to assess its unbundled costs and develop policy
recommendations for competing in a deregulated environment. Results of this study will be a
determination of stranded/transitional costs and unbundled functional costs(i.e. Power Supply,
Transmission,Energy Delivery and Customer Services). The study will also address policy
impact and rate making strategies.
Also, the study has the option of developing a retail access pilot program. If this option is not
done the study cost will be reduced by$14,000.
A consultant with national experience in these matters will provide insight and assistance that
will supplement staff s work in preparing for deregulation.
Resource Management International bid was$136,300 for this study.
On motion by Commissioner Strolle, and seconded by Commissioner Graves,to approve Resolution 97-3-4 as
presented.
Adopted by the following vote:
YEAS: Christian, Graves,Lontz,Pratt,Royal, Strolle, O'Leary
NAYS: None
ABSENT: Werbelow
LEGAL
Res.No. 97-3-5
Purchase the following insurance coverage:
Public Officials and Employees Liability Insurance from Lyman and Sheets Insurance Agency
representing the First Re-insurance Company of Hartford for one year at an annual premium of
$55,000. This would provide a limit of liability of$5 million and a retention of$50,000 per loss
or per insured individual.
This selection is viewed as the best value.
The BWL's expiring coverage is with the Voss Insurance Services representing the Coregis
Insurance Company for$5 million at an annual premium of$69,125.
Page 20 Board Minutes
March 25, 1997
The BWL also received bids from the Voss Insurance Services representing Coregis Insurance
Company, Inc.,for$5 million for$65,668, and Independent Insurance Centre, representing
Reliance National Insurance Company,for$5 million for$63,818.
Renewal of this coverage will be negotiated for the next two year.
On motion by Commissioner Strolle,and seconded by Commissioner Royal,to approve Resolution 97-3-5 as
presented.
Adopted by the following vote:
YEAS: Christian, Graves,Lontz,Pratt,Royal, Strolle,O'Leary
NAYS: None
ABSENT: Werbelow
* * *
TECHNICAL SERVICES/ELECTRIC PRODUCTION
Res.No.97-3-6
It is recommended that the BWL enter into a three-year agreement with Envirologic
Technologies,Inc.,for completion of the annual Relative Accuracy Test Audits(RATA)for the
Continuous Emissions Monitoring Systems on our Electric Generating Units. This
recommendation is based on the lowest and best evaluated bid received. The total bids received
are as follows:
1. Envirologic Technologies,Inc.,Ann Arbor,MI-$35,205/year.
2. EMC Analytical,Inc.,Gilberts,IL-$39,865/year.
3. Kilkelly Environmental Assoc.,Raleigh,NC-$41,700/year.
The Continuous Emissions Monitoring Systems are used to monitor the flue gas emissions from
our boilers and the USEPA,under the Clean Air Act Amendment(CAAA)of 1990, requires
completion of annual RATA's to insure their accuracy. For the past two years the RATA's have
been contracted on an individual annual basis;FY 1996-$44,945 and FY 1997-$39,865. This
three year agreement reduces our annual RATA costs approximately 15%in addition to reducing
the costs of soliciting and evaluating bids on an annual basis.
On motion by Commissioner Strolle,and seconded by Commissioner Pratt,to approve Resolution 97-3-6 as
presented.
Adopted by the following vote:
YEAS: Christian, Graves,Lontz,Pratt,Royal, Strolle,O'Leary
NAYS: None
ABSENT: Werbelow
* * * *
Board Minutes Page 21
March 25, 1997
WATER
Res. No. 97-3-7
That the Board agree to serve water to proposed Water District No. 122,Delhi Township,as
requested by resolution of the Delhi Charter Township Board on April 2, 1996,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. 122 established by Township resolution and
will provide a potable water supply to said district.
2. The Township will be required to make a$38,250 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
00P covering the furnishing of a potable water supply in Water District No. 122.
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$38,250 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)QGI)to furnish a potable water supply in Water
District No. 122.
The geographical area of Water District No. 122 is as follows: College Heights Estates Phase 5,
Lots 87 through 109.
To provide a potable water supply within the proposed new district requires the installation of
1500 feet of water main and fire hydrants at an estimated cost of$38,250.
The main extension will serve twenty-three(23)residential customer. One-time connection fees
will amount to$21,689. The estimated annual revenue is$7,820.
Water mains to be installed in Summer of 1997 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
Prior Board action by Resolution 96-7-9, adopted July 30, 1996,to serve water to proposed Water
District No. 122-College Heights Estates Subdivision Phase 5,Lots 87 through 109,Delhi
Township,is hereby rescinded and superseded by this new Board resolution 97-3-7 to reflect
1997 water main construction costs.
On motion by Commissioner Christian,and seconded by Commissioner Lontz,to approve Resolution 97-3-7 as
presented.
Adopted by the following vote:
YEAS: Christian, Graves,Lontz,Pratt,Royal, Strolle,O'Leary
NAYS: None
ABSENT: Werbelow
Page 22 Board Minutes
March 25, 1997
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Eckert Unit Experiences Major Bearing Failure. A scheduled maintenance outage for Eckert Station's unit#4
will be extended a couple of weeks due to extensive damage to the turbine and generator rotors. Repairs are
estimated to be on the order of$350,000 by awarding the job to the three lowest bidders. Each bidder specializes
in certain areas,and staff analysis indicates a savings by spreading the repair among the three contractors. The
unit is expected to be back in service in mid-June.
1996 Capital Choice Report. The Board received a copy of the 1996 Capital Choice report. General Manager
Pandy highlighted the progress of various projects in the Lansing region.
Local Initiatives Support Corporation(LISC). General Manager Pandy is serving on the Lansing Advisory
Committee for the Local Initiatives Support Corporation. LISC is a national non-profit intermediary which
provides financial and technical resources to community-based development corporations to help transform
distressed neighborhoods into healthy communities. LISC's national private sector sponsors provide matching
funds for contributions made by local businesses and foundations to the Lansing LISC program. LISC has set a
goal of generating$580,000 by July 1997 in contributions and pledges from corporations. Improvements from the
BWL for street lights or water mains were suggested as in-kind services in lieu of a cash contribution.
Analysis of Pending Transmission Cases. General Manager Pandy handed out a confidential analysis of active
cases before the Federal Energy Regulatory Commission(FERC)in which the Michigan Public Power Agency
(MPPA)is involved. The implications of the various cases will be discussed in greater depth at the April
Committee of the Whole meeting.
BWL is Top Fundraiser for Junior Achievement. The BWL was the top fundraiser for the Junior Achievement
campaign, raising$7,900. Employees Ron Ishimoto,Jim Robie, Steve Simpson,and Wendy Bradley were four of
the top twenty fundraisers for the BWL.
Ice Storm Update. The Lansing area experienced its worst ice storm in 12 years. General Manager Pandy briefed
on the BWL's service restoration work following the major ice storm on the morning of March 14, 1997. Service
was interrupted to more than 20,000 BWL electric customers. Municipal utility crews from Holland,Lowell,
Grand-Haven-and-Portland d-assisted-B-WL—line-workers-in-restoring-service4o-all-bat-about-1-00
customers by the end of the next day. Contract crews and additional tree trimming crews were also brought on
board to help with restoration efforts. Mr. Pandy noted that the BWL was able to achieve complete electric service
restoration three to four days ahead of the large investor owned utilities. Copies of thank you letters were handed
out from customers acknowledging the BWL employees' outstanding response to the ice storm.
U. S. Electric Utility Statistics Reviewed. General Manager Pandy presented an overview of U. S. and Michigan
electric utility statistics based on 1995 data compiled by the American Public Power Association(APPA). The
analysis compared electric rate categories with BWL residential,commercial and industrial rates;average revenue
per kilowatt-hour(kWh); capacity factor for approximately 1,200 fossil fuel-fired plants, including their heat rates
and distribution by plant capacity. Plant operations and maintenance costs by region were also compared to BWL
plants.
Page 9
MINUTES OF BOARD OF COMMISSIONERS' MEETF!R,;—
LANSING BOARD OF WATER AND LIGHT _
tLi G8 Fii 9: 20
Tuesday,February 25, 1997 LAN SING 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 O'Leary.
Present: Commissioners Christian, Graves,O'Leary,Pratt, Strolle, and Werbelow--6
Absent: Commissioners Lontz and Royal--2
The Secretary declared a quorum present.
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
On motion of Commissioner Strolle, and seconded by Commissioner Christian,the minutes of regular meeting of
January 28, 1997 were adopted.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF
THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
There were no communications.
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on February 4, 1997, to receive a status report on the Integrated Resource Plan
and to develop the agenda for the Board's planning retreat scheduled for February 25.
Present were Commissioners Christian,Lontz,O'Leary,Pratt,Royal and Strolle. Excused absences were
Commissioners Graves and Werbelow.
Integrated Resource Plan. Manager of Electric Planning& System Studies,Doug Wood,presented an update on
the Integrated Resource Plan(IRP). The IRP is a comprehensive long-term study of the lowest cost options for
supplying electric and steam loads for the next twenty(20)years. To date, the following activities have taken
place:
Page 10 Board Minutes
February 25, 1997
• Held a public hearing to further consider whether to conduct an IRP,
• Adopted new federal standards on integrated resource planning in October 1995 as defined
in the Energy Policy Act of 1992.
• Formulated a Citizens' Advisory Committee representing all rate classes and convened three
sessions for input.
• Prioritized customers' energy supply issues and values based on the Citizens Advisory
Committee and customer telephone survey.
• Completed study analysis based on the following:
• electric and steam load and energy forecasts,
• evaluation of existing resources,
• use of information from customers, staff and consultants, and
• twenty(20)year horizon.
Preliminary conclusions indicate the BWL has adequate capacity and reserves until the year 2013 for Electric and
until the year 2015 for Steam. Modifications to capacity will need to be justified on the basis of economic savings
through the synergy of technologies applicable to both electric and steam production.
Remaining activities include:
• evaluate combined electric and steam options,
• conduct sensitivity analysis,
• inform Citizens Advisory Committee and customers, and
• finalize the report.
The IRP will provide a direction for further discussion and decision making.
Planning Retreat. The agenda for the Board planning retreat set for February 25 was finalized. The Board will
focus on its shared vision for the utility.
Respectfully submitted,
William D. Lontz, Chair Pro Tem
COMMITTEE OF THE WHOLE
On motion of Commissioner Strolle, and seconded by Commissioner Christian, the Committee of the Whole
Report was received and placed on file.
GENERAL MANAGER'S RECOMMENDATIONS
LEGAL-Resolution No. 97-2-1
On motion by Commissioner Strolle,and seconded by Commissioner Christian,to approved the following
resolution:
RESOLVED, That the General Manager be authorized to retain the following law firms as special counsel on an
as-needed basis:
1. Miller, Canfield,Paddock and Stone,P.L.C.
2. Butzel Long,P.C.
These firms shall be retained for a period of two years and shall be reimbursed at their respective hourly rates.
They will provide as-needed advice in the areas of public finance, municipal law, general commercial litigation,
real estate, environmental law,and employment law. After consultation with the City Attorney, Varnum
d Minutes Page 11
i-ebruary 25, 1997
Riddering has been removed from the list of previously approved firms, while Miller, Canfield and Butzel Long
have been added. These firms, in addition to the four firms which had been approved by the Board in Resolution
96-10-1, were also approved by Lansing City Council. Use of special counsel would be subject to the
recommendation of Staff Counsel and the approval of the General Manager.
Adopted by the following vote:
YEAS: Christian, Graves, O'Leary,Pratt, Strolle
NAYS: None
ABSTAIN: Werbelow
ABSENT: Lontz,Royal
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
There being no objection, Commissioner Werbelow offered the following resolution:
ADMINISTRATIVE-Resolution 97-2-2
RESOLVED,That the Board forward a letter to the President of the Lansing City Council advising the City
Council that the Board has been requested by Capitol Annex,L.L.C. to reactivate the agreement for the sale of the
Board of Water and Light Office Building at 123 W. Ottawa Street and associated parking lot at 221 N. Capitol
Avenue approved by Resolution#714 of the City Council,that the Board is considering the request and asking the
City Council for its input.
On motion by Commissioner Strolle, and seconded by Commissioner Christian, to approve Resolution 97-2-2 as
presented.
Adopted by the following vote:
YEAS: Christian, Graves,Pratt, Strolle, O'Leary, Werbelow
NAYS: None
ABSENT: Lontz,Royal
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Ottawa Power Plant Redevelopment Status. A tour of General Motors(GM)trainers and union officials was
held February 21 at the Ottawa Power Plant. Mr. Pandy reported that the group seemed enthusiastic about the
possibility of relocating GM's Small Car Group's training needs to the Ottawa facility. The redevelopment project
would include space for robotics assembly equipment to be used for training purposes. Mr. Pandy indicated that
the emphasis has shifted from using the Ottawa Power Plant as Oldsmobile's Vision Center for training and
motivating sales staff to a manufacturing mode--using the facility to train workers at Lansing's car assembly and
chassis plants. The Vision Center is still being considered,but it would probably be a smaller project than
originally anticipated.
Page 12 Board Minutes
February 25, 1997
Water Rates Impacted by Sewer Rate Increases. An analysis of the potential impact of sewer rate increases to
water bills was handed out. The tabulation depicted that if the sewer rates increase 20%, 30%, or 40%, water rates
would increase 6.51%, 10.08%, or 14.02%respectively. For every 1%increase in the total cost of water and sewer,
sales decline.5%.
Erickson Station Off Line. Erickson Station was taken off line on February 24 due to a failure of a 1,000 pound
bearing in the preheater,which is an integral part of the combustion system. Electric Production Director Jack Hill
told the Commissioners that a replacement bearing is being shipped for installation. If there are no other long
lead-time items that need to be repaired,Erickson Station is expected to be back on line by March 1.
APPA Seminar Focuses on Dereealation and Competition. Mr.Pandy reported on an American Public Power
Association(APPA)seminar he recently attended on deregulation and competition. He highlighted major issues
covered at the conference, noting that the electric utility industry is changing very rapidly. He briefed on new
services being offered by utility companies such as communications, natural gas, appliance services, security
systems, satellites,etc. He concluded his remarks by naming the four"C's"of competition,which are:
(1)Customer Choice, (2)Consolidation, (3) Convergence of Industries(i.e.,electric, gas,communications)and
(4) Cost Cutting.
REMARKS BY COMMISSIONERS
Commissioner Strolle commented on the productive Board planning retreat held February 25. The Commissioners
agreed to schedule retreats on a regular basis for planning purposes.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle, seconded by Commissioner Christian,the absences of Commissioners Lontz
and Royal were unanimously adopted.
ADJOURNMENT
On motion by Conunissionei Giaves, the Board adjourned at 6:02 p.m.
A ¢ X 1OlILU
Mary E. Sq Secretary
Filed: February 28, 1997
Marilynn Slade, City Clerk
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
CI I Y CLER"
Tuesday,January 28, 1997
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 O'Leary.
Present: Commissioners Graves,Lontz,O'Leary,Pratt,Royal, Strolle-6
Absent: Commissioners Christian and Werbelow(out of town)-2
The Secretary declared a quorum present
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
On motion of Commissioner Strolle, )ntz,the minutes of regular meeting of
December 17, 1996 were adopted.
CHAIRMAN O'LEARY ANNOUNI 'UBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA _UBJECT NOW,OR AT THE END OF
THE MEETING.
Lloyd Teets, 116 E. Elm Street,Lansing,congratulated the Board of Water and Light(BWL)for the increased
steam sales to General Motors. He also commented that change is going to come to the electric industry and that
instead of spending money for a lobbyist he would rather see the Board be proactive than reactive.
COMMUNICATIONS AND PETITIONS
A thank you letter from Commissioner Peter Pratt and spouse Linda Pratt was received in appreciation for the
congratulatory cards received on the birth of their daughter.
Placed on file.
A letter from James E. Harken was received requesting that the BWL's written response to questions raised in his
letter dated January 7, 1997,be given to Lloyd Teets at the regular meeting on January 28, 1997.
Placed on file.
Page 2 Board Minutes
January 28, 1997
The following report was read by Commissioner Royal:
FINANCE COMMITTEE REPORT
The Finance Committee met on January 9, 1997, to receive the report of the Internal Auditor.
Committee Members Present: Commissioners Christian(Chair), Lontz,Royal, and Werbelow.
Role of the Internal Auditor. As background information for the newer Commissioners,Internal Auditor Kellie
Willson provided an overview of the role of the BAIL Internal Auditor position. The Internal Auditor reports
directly to the Board and provides an independent appraisal to the Board on financial and operational activities of
the Board of Water and Light(BWL). The primary role of the Internal Auditor is to:
• conduct audits of assigned organizational and functional activities,
• evaluate the adequacy and effectiveness of management controls over those activities,
• determine whether organizational units at the BWL are performing their planning,
accounting,custodial or control activities in compliance with management guidelines,
policies and procedures,
• report audit findings and make recommendations for correcting unsatisfactory conditions,
improving operations and reducing cost,and
• perform special audits at the request of management
1996 BWL Analytical Review. The first step taken by the Internal Auditor in evaluating the system of internal
control was to perform an analytical review of the BWL. Graphs developed in performing an analytical review
were presented. The graphs indicate key relationships and trends from 1984 through 1996 and they point to
critical success factors. Each graph provides useful information,but in particular the following trends were noted:
• the BWL's continuing financial stability and asset growth,
• the improvement in net income and return on assets, and
• the significant impact of paying the return on equity to the City.
City of Lansing Internal Audit Retort. A report prepared by the City of Lansing Internal Auditor,dated October
10, 1996,was reviewed. Internal Auditor Willson called attention to certain discrepancies found in the report.
Following discussion,it was suggested that BWL staff should contact the City's Internal Auditor to review the
information in question.
FINANCE COMMITTEE
Ernest Christian, Chair
William Lontz
Diane Royal
Judson Werbelow
On motion of Commissioner Royal, seconded by Commissioner Pratt, and unanimously carried,the report was
received and placed on file.
GENERAL MANAGER'S RECOMMENDATIONS
On motion by Commissioner Strolle, seconded by Commissioner Lontz, the following Electric Production
resolution was adopted unanimously:
ELECTRIC PRODUCTION-Res. No. 97-1-1
It is recommended that a contract be awarded to Sargent and Lundy in the amount of$155,000 to complete an
engineering evaluation study for conversion of the Eckert and Erickson Stations to burn western coal. This study
Board Minutes Page 3
January 28, 1997
was not included in the FY 1996/97 Planned Capital Projects, however, the approval of these funds will not
increase the overall Planned Capital Project Budget for the Electric Utility.
This recommendation is based on Sargent and Lundy providing the lowest and best evaluated bid to complete the
study. Other bids received are as follows:
Stone and Webster -$182,500
Stanley Consultants- $201,000
Investigations by BWL staff have determined that a large number of Utilities are utilizing western coal to lower
their generation costs and meet future competition. Current estimates for purchasing western coal show
approximately a 25%reduction in fuel costs,which corresponds to a potential savings of$150,000,000 to the BWL
over the next 20 years. Burning western coal safely and efficiently will require extensive modifications to the BWL
generating plants with cost estimates in the range of$18,000,000 to$40,000,000. The recommended evaluation
study is the next step in our efforts to determine the total scope of work required,the costs involved and the most
economic plan for the future.
On motion by Commissioner Strolle, seconded by Commissioner Lontz,the following Human Resources resolution
was adopted unanimously:
HUMAN RESOURCES-Res.No.97-1-2
That the Leaves of Absence Policy, as adopted by the Board on April 14, 1975 and as changed in September 28,
1982, September 25, 1990,and February 22, 1994,be approved to include the following changes to Injury or
Illness Leave(s)section. (Old wording is shown with sW;kethFeugl}and new wording is in bold,italic.)
During any such leave due to compensable illness or injury,pension service credit shall be retained but shall not be
accumulated. An employee on compensable illness or injury leave shall not lose pension service credit until having
been on such leave for a period equal to the pension service credit accumulated at the time the leave began(not to
exceed€Yve(5)two(2)years)or as provided by the FMLA
The Leaves of Absence Policy has been updated to comply with negotiated changes for both Bargaining and Non-
bargaining unit employees for both the Injury and Illness Leave. The change affects future Leave of Absences
only. The entire BWL Family Medical Leave(FMLA)Policy is enclosed for your reference.
On motion of Strolle,seconded by Commissioner Royal,the following Pension resolution was adopted
unanimously:
PENSION-Res. No.97-1-3
That Ronald N. Kelley, Customer Account Representative in Consumer Services,be placed on an early reduced
pension of$1,773.18 per month effective January 2, 1997. He has selected Option VI with the provision that after
his death, if his wife, Carol J. Kelley, survives him she will receive 70%or$1,241.23 per month for the rest of her
life as provided under Option VI. If his wife predeceases him,the pension amount of$1,773.18 will revert back to
the regular pension amount of$1,954.59 for the rest of his life, as provided under Option VI.
Mr. Kelley has worked for the BWL for 33.24 years and is 54 years of age.
Page 4 Board Minutes
January 28, 1997
On motion of Commissioner Strolle, seconded by Commissioner Royal, the following Technical Services
resolutions were adopted unanimously:
TECHNICAL SERVICES- Res. No. 97-14
It is recommended that the Board of Water and Light(BWL)enter into a five year agreement with U.S. Ash
Company of Essexville,Michigan, subject to approval of the Board's Legal Counsel,for the Marketing and
Disposal of Coal Ash generated from Eckert, Erickson and Moores Park Stations,at an estimated annual cost of
$480,000.
The existing agreement with U.S. Ash provides for the marketing of flyash generated by any of the above facilities.
The new agreement will expand on this to include the proper landfilling of ash that can not be marketed.
Currently,ash that is not marketed is disposed of at the BWL's North Lansing Landfill(NLL).
Based on the average of the previous five years of total production,tons landfilled,and tons marketed,this
agreement has the least cost of the alternatives evaluated.
Other alternatives to this recommendation were:
Marketing by U.S. Ash, landfilling to new cell at NLL by BWL $870,000
Marketing by U.S. Ash, landfilling to commercial landfill by BWL $830,000
Systech Resource Recovery Services proposal $787,000
"As Is" -Marketing by U.S. Ash, landfilling to NIL by BWL.
(Not an option); $610,000
Trans Ash Company did not submit a bid.
TECHNICAL SERVICES-Res.No.97-1-5
It is recommended that the existing two year Contracts for Professional Services for the following Consultants,be
extended one year based on satisfactory performance on work completed and in progress. The original Contracts,
which expire on February 28, 1997, contain provisions to extend the term on an annual basis.
1. Novak Engineering,Inc.,Jackson, Michigan
2. SFT,Inc.,Toledo,Ohio
3. Stanley Consultants,Inc.,Muscatine,Iowa
4. Stone and Webster,Inc.,Boston,Massachusetts.
Over the last two years the BWL Project Engineering and Electric Engineering Departments have utilized these
Consultants to supplement existing staff on projects and studies requiring outside expertise. The Consultants have
also been utilized to meet project demands without replacing personnel lost during recent staff reductions. This
continued approach of retaining Consultants will:
1. Reduce evaluation time and bidding costs by staff.
2. Improve project response time to meet our needs.
3. Maintain BWL competitiveness due to staff and cost reductions.
The utilization of these consultants will continue to be approved by the General Manager or the Purchasing
Authority delegated by him to the Directors and Managers of the Electric and Technical Services Divisions.
Board Minutes Page 5
January 28, 1997
On motion of Commissioner Strolle, seconded by Commissioner Royal, the following Water Utility resolution was
adopted unanimously:
WATER-Res. No. 97-1-6
That Board of Water and Light charges for water service installations be changed,effective January 1, 1997,as
follows:
Size Main-To-Curb-Box Curb-Box-To-Bldg.
Current Proposed Current Proposed
Fee 1997 Fee Fee 1997 Fee
3/4" $740 $760 $12.85 $13.17
1" $890 $850 $13.15 $13.55
The new proposed fees reflects a 2.7%increase in the 3/4"and 4.5%decrease in the 1"main-to-curb-box;and an
increase of 2.5%in the 3/4" and a 3%increase in the 1"curb-box-to building.
The reduction in main-curb box charge for 1" services should occur due to the change from a residential standard
of 1"instead of 3/4".
It is recommended that we eliminate the charges for 1 1/2"and 2" services and go to a firm cost"estimate". It is
not fair to our customers to try to establish standard charges based on a small number of installations: (example:
only six 1 1/2"leads were installed in FY'96). Although standards.will have to be established as guidelines for the
"estimator", this will be more equitable for our customers and the BWL.
The additional charge of$3.00 per foot for adverse winter weather conditions will remain in effect.
On motion of Commissioner Strolle, seconded by Commissioner Royal, the following Corporate Planning
resolution was adopted unanimously:
CORPORATE PLANNING-Rea No.97-1-7
It is recommended that the following described property be declared surplus and not required for Board of Water
and Light Operations:
Lots 9 and 10 in Meadowlawn Subdivision in the NE 1/4 of Section 12,T4N,R3W,Charter
Township of Delta,Eaton County, State of Michigan.
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 and subject to all funds or
proceeds being retained by the Board of Water and Light for its operations.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Main Office Building Sale Status. The earnest money deposits for the Board of Water and Light(BWL)Main
Office Building real estate transactions have been returned to the Vlahakis Companies and Capitol Annex,L.L.C.
(a.k.a. Granger Company). Both transactions have lapsed;consequently, there are no matters pending on the sale
of the building at this time. Mr. Pandy noted that the BWL stands ready to cooperate with the City of Lansing in
trying to develop the City Hall Annex or the entire block.
Page 6 Board Minutes
January 28, 1997
Electric Competition is Heating Up. In a utility first,the Southern Company will start airing ads on national
television on January 20, promoting its low-cost energy and aggressive position in the new competitive energy
markets. The Northern California Power Agency(NCPA)and Enron Corporation also announced a multi-million
dollar national advertising campaign, designed to compete in a deregulated business environment.
Electric,Water and Steam Sales Are Up. Mr. Pandy reported that while steam sales are growing 70 percent
with the new General Motors' steam agreement,water sales have increased by 24 percent with the wholesale
service agreements with Lansing and Delta Townships. The BWL electric utility is also aggressively marketing its
surplus capacity to other utilities on a daily and hourly basis. Export sales over the past year have been excellent,
amounting to approximately 20 percent of total megawatt-hours. Sales are expected to exceed last year's total.
Mr. Pandy briefed on the BWL's involvement in the electricity commodity market. The BWL is buying and selling
electricity on behalf of the Michigan Public Power Agency(MPPA)pool,which represents eight cities. MPPA is
connected to the OASIS (On-line Available System Information System)of Michigan cities. He noted that it will
be a growing part of the BWL to market surplus when it serves to keep rates low for customers.
Wendy Bradley Recognized for ASTM Involvement. Wendy Bradley of Fuels Supply and Results was
congratulated for her key role with the American Society of Testing Materials(ASTM)--a prestigious national
organizational on testing of raw materials. Wendy Bradley is involved in the Hardgrove Grindability Index(HGI)
Task Force in reviewing the standards on testing the hardness of coal.
Larry Wilhite Appointed to Capital Region Community Foundation Board. Staff Attorney Lary Wilhite was
congratulated for his willingness to serve on the Board of the Community Foundation—a community charity
foundation.
Dave Emmons Elected Vice President of the Lansing Area Safety Council. Electric Transmission&
Distribution Director Dave Emmons was congratulated on his election as vice president of the Lansing Area Safety
Council.
BWL PIPELINE Features Article on Steam Sales to GM's Lansing Car Assembly Body Plant. Copies of the
January 1997 issue of the BWL PIPELINE were handed out. The publication reports on the new steam agreement
with General Motors' (GM)Lansing Car Assembly Body Plant,Fabrication Plant and the Craft Centre.
Coal Handling Crew Commended For Preventing Serious Train Collision at Eckert Station. A BWL coal
handling crew was saluted by General Manager Pandy for their quick response,averting a serious train accident at
Eckert Station on December 21. A full report on this incident is detailed in the January issue of BWL PIPELINE. Mr.
Pandy noted that enhancements have been put in place to address safety concerns.
New Steam Main Status Report. Steam Utility Director Joette Woodard-Yauk reported that the new steam line
was scheduled to have steam blown through it in January to clear it of any debris that may have accumulated in the
main during construction_ Difficulties were encountered by the contractor in the startup process of warming the
two-mile long line. A rescheduled date is being set sometime within a week for this operation.
Lansing Hope Ownership Program for Employees(LHOPE). Councilmember Paul Novak has requested an
opportunity to speak to the Board regarding a home ownership program for the BWL, similar to the City's
LHOPE. The City's program provides$5,000 as a loan to employees who relocate into the City. The loan
provides an attractive interest rate for a five-year period,with one-fifth of the principle forgiven for each year the
employee remains a City resident. The LHOPE was modeled after a program started by Sparrow Hospital.
Councilmember Harold Leeman Strives to Improve Security With Streetlights. General Manager Pandy
expressed his appreciation to Councilmember Harold Leeman for his role in identifying streetlight areas in his
ward that needed increased security. His collaborative efforts with BWL employees to address constituent concerns
were recognized.
Board Minutes Page 7
January 28, 1997
APPA Workshop for Elected and Appointed Public Power Members. The American Public Power Association
(APPA)is offering a workshop on April 3-5, 1997,for elected and appointed public power board and city
councilmembers focusing on the responsibilities and processes of electricity utility board work and policy setting
in a competitive environment.
Committee of the Whole Meeting Rescheduled for February 4,1997. Planning Agenda for Board Retreat.
Agenda topics for the February 4 Committee of the Whole meeting include the Integrated Resource Plan(1RP)and
planning the agenda for the Board Retreat. The retreat is set for February 25,from 12:00 noon to 5:00 p.m., at the
Riverview Center,Lansing. Chairperson O'Leary commented that the first retreat session should deal with basic
issues such as the duties and responsibilities of the Board. Key topics suggested by the Commissioners for future
retreat sessions include policy issues,long-range planning and deregulation.
Customer Attitude Survey Overview. Communications Director John Strickler presented an executive summary
of the residential customer attitude survey completed in December, 1996,by the energy research and consulting
firm of Market Strategies(MSI). He reported that the results indicate overall favorability(83%)remains near the
top of utilities surveyed by MSI. Overall satisfaction,basically unchanged over the last 12 months, remains above
average. Satisfaction is highest among electric-only and Delta Township customers. The BWL's greatest strength
among residential customers continues to be in perceptions of reasonable rates(87%positive)and the value of
electricity for the price(831/6),placing the BWL at or near the top among MSI clients. Satisfaction among water
customers who are satisfied with the water service provided by the BWL decreased four points in the last six
months to 82%. The survey data links this decline with the fact that the sewer rates have increased much more
dramatically. Mr. Strickler noted that if future relationships with customers in a competitive price environment
depend on other decision criteria such as service reliability, restoration capabilities, and the ability of a utility to
protect customers from harm,the BWL will need to be as strong as the competition on these factors. Following
discussion, General Manager Pandy congratulated Consumer Services Director Terry Graham and Electric
Transmission&Distribution(T&D)Director Dave Emmons and their employees--who are on the front line--for
their fine work performance as reflected by the survey results. The T&D are is continuing to address the
restoration issue.
REMARKS BY COMMISSIONERS
Consolidated Financial Statement. Chairman O'Leary referred to the December 1996 Consolidated Financial
Statement and noted that year to date Electric(KWH)sales increased(.5%)as compared to the same period last
year,yet the Electric revenue decreased(-2.81/6)for the same period. He asked for a clarification.
Treasurer/Controller Tousley responded that fuel costs for the year-to-date period ending December 1996,
decreased,which resulted in savings to customers. General Manager Pandy added that although Electric sales
increased, there is less margin on wholesale export sales as compared to retail sales.
Wisconsin Electric Power Company. Commissioner Lontz asked about Wisconsin Electric Power Company's
relationship to Wisconsin Energy Corporation.
General Manager Pandy responded that Wisconsin Electric Power Company is a subsidiary of Wisconsin Energy
Corporation. It is being merged with Northern States Power to become Prime Energy effective in the first quarter
of 1997.
Lobbying Costs. Commissioner Royal responded to the concern raised earlier by Lloyd Teets regarding lobbying
costs. She noted that the BWL is not working against restructuring,but is being proactive. With electric utility
restructuring,the BWL cannot even be a real player in this fast-moving field without having a voice in the
Michigan Legislature. She noted that the large investor-owned utilities(IOU's)are investing large resources to
drive the movement. If the IOU's get their way, it could be harmful to residential customers. The lobbyist is
presenting the BWL's position to the legislators to assure a good understanding of the issues important to the
restructuring debate.
Board Minutes ,
Page 8 January 28, 1997
Habitat for Humanity. Commissioner Strolle commented that he received an inquiry from a constituent who is
involved with Habitat for Humanity. He asked if there is a way for the BWL to assist through community service
in eliminating or helping with electric or water connections for new houses for Habitat.
Communications Director John Strickler responded that contact has been made by Habitat for Humanity volunteers
for BWL assistance with water hookups. The request has been referred to Water Utility Director Clyde Dugan. In
the past the BWL has worked with Habit for Humanity through employee volunteers.
Lobbyist. Commissioner Pratt echoed Commissioner Royal's remarks regarding the lobbying costs. He noted that
the BWL is not lobbying against deregulation of electricity, but instead is lobbying for a level playing field. The
BWL's concern is that deregulation is going to put the IOU's in such an advantage resulting in high rates and
captive residential customers.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle, seconded by Commissioner Royal,the absences of Commissioners Christian
and Werbelow were unanimously adopted.
ADJOURNMENT
On motion by Commissioner Graves,the Board adjourned at 6:36 p.m.
A �t 4w,
Mary E. Secretary
Filed: February 3, 1997
Marilynn Slade, City Clerk
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,January 28,1997
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 O'Leary.
Present: Commissioners Graves,Lontz,O'Leary,Pratt,Royal, Strolle--6
Absent: Commissioners Christian and Werbelow(out of town)-2
The Secretary declared a quorum present.
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
On motion of Commissioner Strolle,and seconded by Commissioner Lontz,the minutes of regular meeting of
December 17, 1996 were adopted.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF
THE MEETING.
Lloyd Teets, 116 E.Elm Street,Lansing,congratulated the Board of Water and Light(BWL)for the increased
steam sales to General Motors. He also commented that change is going to come to the electric industry and that
instead of spending money for a lobbyist he would rather see the Board be proactive than reactive.
COMMUNICATIONS AND PETITIONS
A thank you letter from Commissioner Peter Pratt and spouse Linda Pratt was received in appreciation for the
congratulatory cards received on the birth of their daughter.
Placed on file.
A letter from James E. Harken was received requesting that the BWL's written response to questions raised in his
letter dated January 7, 1997,be given to Lloyd Teets at the regular meeting on January 28, 1997.
Placed on file.
Page 2 Board Minutes
January 28, 1997
The following report was read by Commissioner Royal:
FINANCE COMMITTEE REPORT
The Finance Committee met on January 9, 1997, to receive the report of the Internal Auditor.
Committee Members Present: Commissioners Christian(Chair),Lontz,Royal, and Werbelow.
Role of the Internal Auditor. As background information for the newer Commissioners, Internal Auditor Kellie
Willson provided an overview of the role of the BWL Internal Auditor position. The Internal Auditor reports
directly to the Board and provides an independent appraisal to the Board on financial and operational activities of
the Board of Water and Light(BWL). The primary role of the Internal Auditor is to:
• conduct audits of assigned organizational and functional activities,
• evaluate the adequacy and effectiveness of management controls over those activities,
• determine whether organizational units at the BWL are performing their planning,
accounting, custodial or control activities in compliance with management guidelines,
policies and procedures,
• report audit findings and make recommendations for correcting unsatisfactory conditions,
improving operations and reducing cost, and
• perform special audits at the request of management.
1996 BWL Analytical Review. The first step taken by the Internal Auditor in evaluating the system of internal
control was to perform an analytical review of the BWL. Graphs developed in performing an analytical review
were presented. The graphs indicate key relationships and trends from 1984 through 1996 and they point to
critical success factors. Each graph provides useful information,but in particular the following trends were noted:
• the B WL's continuing financial stability and asset growth,
• the improvement in net income and return on assets,and
• the significant impact of paying the return on equity to the City.
City of Lansing Internal Audit Report. A report prepared by the City of Lansing Internal Auditor,dated October
10, 1996,was reviewed. Internal Auditor Willson called attention to certain diisrrepanciec found in the report.
Following discussion,it was suggested that BWL staff should contact the City's Internal Auditor to review the
information in question.
FINANCE COMMITTEE
Ernest Christian, Chair
William Lontz
Diane Royal
Judson Werbelow
OLL motion of ssioner RoyaL seconded y Commissioner Pratt, and unanimously carrle a report was
received and placed on file.
GENERAL MANAGER'S RECOMMENDATIONS
On motion by Commissioner Strolle, seconded by Commissioner Lontz, the following Electric Production
resolution was adopted unanimously:
ELECTRIC PRODUCTION-Res. No. 97-1-1
It is recommended that a contract be awarded to Sargent and Lundy in the amount of S155,000 to complete an
engineering evaluation study for conversion of the Eckert and Erickson Stations to bum western coal. This study
Board Minutes Page 3
January 28, 1997
was not included in the FY 1996/97 Planned Capital Projects, however, the approval of these funds will not
increase the overall Planned Capital Project Budget for the Electric Utility.
This recommendation is based on Sargent and Lundy providing the lowest and best evaluated bid to complete the
study. Other bids received are as follows:
Stone and Webster -$182,500
Stanley Consultants- $201,000
Investigations by BWL staff have determined that a large number of Utilities are utilizing western coal to lower
their generation costs and meet future competition. Current estimates for purchasing western coal show
approximately a 25%reduction in fuel costs,which corresponds to a potential savings of$150,000,000 to the BWL
over the next 20 years. Burning western coal safely and efficiently will require extensive modifications to the BWL
generating plants with cost estimates in the range of$18,000,000 to$40,000,000. The recommended evaluation
study is the next step in our efforts to determine the total scope of work required,the costs involved and the most
economic plan for the future.
On motion by Commissioner Strolle, seconded by Commissioner Lontz,the following Human Resources resolution
was adopted unanimously:
HUMAN RESOURCES-Res.No.97-1-2
That the Leaves of Absence Policy,as adopted by the Board on April 14, 1975 and as changed in September 28,
1982, September 25, 1990, and February 22, 1994,be approved to include the following changes to Injury or
Illness Leave(s) section. (Old wording is shown with ugh and new wording is in bold,italic.)
During any such leave due to compensable illness or injury,pension service credit shall be retained but shall not be
accumulated An employee on compensable illness or injury leave shall not lose pension service credit until having
been on such leave for a period equal to the pension service credit accumulated at the time the leave began(not to
exceed€t,e-(5)two(2)years)or as provided by the FU LA.
The Leaves of Absence Policy has been updated to comply with negotiated changes for both Bargaining and Non-
bargaining unit employees for both the Injury and Illness Leave. The change affects future Leave of Absences
only. The entire BWL Family Medical Leave(FULA)Policy is enclosed for your reference.
On motion of Strolle, seconded by Commissioner Royal,the following Pension resolution was adopted
unanimously:
PENSION-Res.No. 97-1-3
That Ronald N. Kelley, Customer Account Representative in Consumer Services,be placed on an early reduced
pension of$1,773.18 per month effective January 2, 1997. He has selected Option VI with the provision that after
his death, if his wife, Carol J. Kelley, survives him she will receive 70%or$1,241.23 per month for the rest of her
life as provided under Option VI. If his wife predeceases him,the pension amount of$1,773.18 will revert back to
the regular pension amount of$1,954.59 for the rest of his life, as provided under Option VI.
Mr.Kelley has worked for the BWL for 33.24 years and is 54 years of age.
Page 4 Board Minutes
January 28, 1997
On motion of Commissioner Strolle, seconded by Commissioner Royal, the following Technical Services
resolutions were adopted unanimously:
TECHNICAL SERVICES -Res. No. 97-14
It is recommended that the Board of Water and Light(BWL) enter into a five year agreement with U.S. Ash
Company of Essexville,Michigan, subject to approval of the Board's Legal Counsel,for the Marketing and
Disposal of Coal Ash generated from Eckert, Erickson and Moores Park Stations,at an estimated annual cost of
$480,000.
The existing agreement with U.S. Ash provides for the marketing of flyash generated by any of the above facilities.
The new agreement will expand on this to include the proper landfilling of ash that can not be marketed.
Currently,ash that is not marketed is disposed of at the BWL's North Lansing Landfill(NLL).
Based on the average of the previous five years of total production,tons landfilled,and tons marketed, this
agreement has the least cost of the alternatives evaluated.
Other alternatives to this recommendation were:
Marketing by U.S. Ash, landfilling to new cell at NLL by BWL $870,000
Marketing by U.S. Ash, landfilling to commercial landfill by BWL $830,000
Systech Resource Recovery Services proposal $787,000
"As Is" -Marketing by U.S. Ash,landfilling to NLL by BWL.
(Not an option); $610,000
Trans Ash Company did not submit a bid.
TECHNICAL SERVICES-Res.No.97-1-5
It is recommended that the existing two year Contracts for Professional Services for the following Consultants,be
extended one year based on satisfactory performance on work completed and in progress. The original Cori`uaets,
which expire on February 28, 1997, contain provisions to extend the term on an annual basis.
1. Novak Engineering,Inc.,Jackson,Michigan
2. SFT, Inc.,Toledo,Ohio
3. Stanley Consultants,Inc.,Muscatine, Iowa
4. Stone and Webster,Inc.,Boston,Massachusetts.
Over the last two years the BWL Project Engineering and Electric Engineering Departments have utilized these
Consultants to supplement existing staff on projects and studies requiring outside expertise. The Consultants have
also been utilized to meet project demands without replacing personnel lost during recent staff reductions. This
continued approach of retaining Consultants will:
1. Reduce evaluation time and bidding costs by staff.
2. Improve project response time to meet our needs.
3. Maintain BWL competitiveness due to staff and cost reductions.
The utilization of these consultants will continue to be approved by the General Manager or the Purchasing
Authority delegated by him to the Directors and Managers of the Electric and Technical Services Divisions.
Board Minutes Page 5
January 28, 1997
On motion of Commissioner Strolle, seconded by Commissioner Royal,the following Water Utility resolution was
adopted unanimously:
WATER-Res. No. 97-1-6
That Board of Water and Light charges for water service installations be changed. effective January 1, 1997, as
follows:
Size Main-To-Curb-Box Curb-Box-To-Bldg.
Current Proposed Current Proposed
Fee 1997 Fee Fee 1997 Fee
3/4" $740 $760 $12.85 $13.17
1" $890 $850 $13.15 $13.55
The new proposed fees reflects a 2.7%increase in the 3/4"and 4.5%decrease in the 1"main-to-curb-box;and an
increase of 2.5%in the 3/4" and a 3%increase in the 1"curb-box-to building.
The reduction in main-curb box charge for 1" services should occur due to the change from a residential standard
of 1" instead of 3/4".
It is recommended that we eliminate the charges for 1 1/2"and 2" services and go to a firm cost"estimate". It is
not fair to our customers to try to establish standard charges based on a small number of installations: (example:
only six 1 1/2"leads were installed in FY'96). Although standards will have to be established as guidelines for the
"estimator",this will be more equitable for our customers and the BWL.
The additional charge of$3.00 per foot for adverse winter weather conditions will remain in effect.
On motion of Commissioner Strolle, seconded by Commissioner Royal,the following Corporate Planning
resolution was adopted unanimously:
CORPORATE PLANNING-Res. No.97-1-7
It is recommended that the following described property be declared surplus and not required for Board of Water
and Light Operations:
Lots 9 and 10 in Meadowlawn Subdivision in the NE 1/4 of Section 12,T4N,R3W,Charter
Township of Delta,Eaton County, State of Michigan.
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 and subject to all funds or
proceeds being retained by the Board of Water and Light for its operations.
GENERAL MANAGER'S REMARKS
General Manager Joe Pandy reported on the following topics:
Main Office Building Sale Status. The earnest money deposits for the Board of Water and Light(BWL)Main
Office Building real estate transactions have been returned to the Vlahakis Companies and Capitol Annex,L.L.C.
(a.k.a. Granger Company). Both transactions have lapsed;consequently,there are no matters pending on the sale
of the building at this time. Mr.Pandy noted that the BWL stands ready to cooperate with the City of Lansing in
trying to develop the City Hall Annex or the entire block.
Page 6 Board Minutes
January 28, 1997
Electric Competition is Heating Up. In a utility first,the Southern Company will start airing ads on national
television on January 20, promoting its low-cost energy and aggressive position in the new competitive energy
markets. The Northern California Power Agency(NCPA)and Enron Corporation also announced a multi-million
dollar national advertising campaign, designed to compete in a deregulated business environment.
Electric,Water and Steam Sales Are Up. Mr.Pandy reported that while steam sales are growing 70 percent
with the new General Motors' steam agreement,water sales have increased by 24 percent with the wholesale
service agreements with Lansing and Delta Townships. The BWL electric utility is also aggressively marketing its
surplus capacity to other utilities on a daily and hourly basis. Export sales over the past year have been excellent,
amounting to approximately 20 percent of total megawatt-hours. Sales are expected to exceed last year's total.
Mr.Pandy briefed on the BWL's involvement in the electricity commodity market. The BWL is buying and selling
electricity on behalf of the Michigan Public Power Agency(MPPA)pool,which represents eight cities. MPPA is
connected to the OASIS (On-line Available System Information System)of Michigan cities. He noted that it will
be a growing part of the BWL to market surplus when it serves to keep rates low for customers.
Wendy Bradley Recognized for ASTM Involvement. Wendy Bradley of Fuels Supply and Results was
congratulated for her key role with the American Society of Testing Materials(ASTM)--a prestigious national
organizational on testing of raw materials. Wendy Bradley is involved in the Hardgrove Grindability Index(HGI)
Task Force in reviewing the standards on testing the hardness of coal.
Larry Wilhite Appointed to Capital Region Community Foundation Board. Staff Attorney Larry Wilhite was
congratulated for his willingness to serve on the Board of the Community Foundation—a community charity
foundation.
Dave Emmons Elected Vice President of the Lansing Area Safety Council. Electric Transmission&
Distribution Director Dave Emmons was congratulated on his election as vice president of the Lansing Area Safety
Council.
BWL PIPELINE Features Article on Steam Sales to GM's Lansing Car Assembly Body Plant. Copies of the
January 1997 issue of the BWL PIPELINE were handed out. The publication reports on the new steam agreement
with General Motors' (GM)Lansing Car Assembly Body Plant,Fabrication Plant and the Craft Centre.
Coal Handling Crew Commended For Preventing Serious Train Collision at Eckert Station. A BWL coai
handling crew was saluted by General Manager Pandy for their quick response,averting a serious train accident at
Eckert Station on December 21. A full report on this incident is detailed in the January issue of BWL PIPELINE. Mr.
Pandy noted that enhancements have been put in place to address safety concerns.
New Steam Main Status Report. Steam Utility Director Joette Woodard-Yauk reported that the new steam line
was scheduled to have steam blown through it in January to clear it of any debris that may have accumulated in the
main during construction. Difficulties were encountered by the contractor in the startup process of warming the
two-mile long line. A rescheduled date is being set sometime within a week for this operation.
Lansing Hope Ownership Program for Employees(LHOPE). Councilmember Paul Novak has requested an
opportunity to speak to the Board regarding a home ownership program for the BWL, similar to the City's
LHOPE. The City's program provides$5,000 as a loan to employees who relocate into the City. The loan
provides an attractive interest rate for a five-year period,with one-fifth of the principle forgiven for each year the
employee remains a City resident. The LHOPE was modeled after a program started by Sparrow Hospital.
Councilmember Harold Leeman Strives to Improve Security With Streetlights. General Manager Pandy
expressed his appreciation to Councilmember Harold Leeman for his role in identifying streetlight areas in his
ward that needed increased security. His collaborative efforts with BWL employees to address constituent concerns
were recognized.
Board Minutes Page 7
January 28, 1997
APPA Workshop for Elected and Appointed Public Power Members. The American Public Power Association
(APPA) is offering a workshop on April 3-5, 1997,for elected and appointed public power board and city
councilmembers focusing on the responsibilities and processes of electricity utility board work and policy setting
in a competitive environment.
Committee of the Whole Meeting Rescheduled for February 4,1997. Planning Agenda for Board Retreat.
Agenda topics for the February 4 Committee of the Whole meeting include the Integrated Resource Plan(IRP)and
planning the agenda for the Board Retreat. The retreat is set for February 25,from 12:00 noon to 5:00 p.m.,at the
Riverview Center,Lansing. Chairperson O'Leary commented that the first retreat session should deal with basic
issues such as the duties and responsibilities of the Board. Key topics suggested by the Commissioners for future
retreat sessions include policy issues, long-range planning and deregulation.
Customer Attitude Survey Overview. Communications Director John Strickler presented an executive summary
of the residential customer attitude survey completed in December, 1996,by the energy research and consulting
firm of Market Strategies(MSI). He reported that the results indicate overall favorability(83%)remains near the
top of utilities surveyed by MSI. Overall satisfaction,basically unchanged over the last 12 months,remains above
average. Satisfaction is highest among electric-only and Delta Township customers. The BWL's greatest strength
among residential customers continues to be in perceptions of reasonable rates(87%positive)and the value of
electricity for the price(83%),placing the BWL at or near the top among MSI clients. Satisfaction among water
customers who are satisfied with the water service provided by the BWL decreased four points in the last six
months to 82%. The survey data links this decline with the fact that the sewer rates have increased much more
dramatically. Mr. Strickler noted that if future relationships with customers in a competitive price environment
depend on other decision criteria such as service reliability, restoration capabilities, and the ability of a utility to
protect customers from harm,the BWL will need to be as strong as the competition on these factors. Following
discussion, General Manager Pandy congratulated Consumer Services Director Terry Graham and Electric
Transmission&Distribution(T&D)Director Dave Emmons and their employees--who are on the front line--for
their fine work performance as reflected by the survey results. The T&D are is continuing to address the
restoration issue.
REMARKS BY COMMISSIONERS
Consolidated Financial Statement. Chairman O'Leary referred to the December 1996 Consolidated Financial
Statement and noted that year to date Electric(KWH)sales increased(.51/6)as compared to the same period last
year,yet the Electric revenue decreased(-2.81/6)for the same period. He asked for a clarification.
Treasurer/Controller Tousley responded that fuel costs for the year-to-date period ending December 1996,
decreased,which resulted in savings to customers. General Manager Pandy added that although Electric sales
increased,there is less margin on wholesale export sales as compared to retail sales.
Wisconsin Electric Power Company. Commissioner Lontz asked about Wisconsin Electric Power Company's
relationship to Wisconsin Energy Corporation.
General Manager Pandy responded that Wisconsin Electric Power Company is a subsidiary of Wisconsin Energy
Corporation. It is being merged with Northern States Power to become Prime Energy effective in the first quarter
of 1997.
Lobbying Costs. Commissioner Royal responded to the concern raised earlier by Lloyd Teets regarding lobbying
costs. She noted that the BWL is not working against restructuring,but is being proactive. With electric utility
restructuring,the BWL cannot even be a real player in this fast-moving field without having a voice in the
Michigan Legislature. She noted that the large investor-owned utilities(IOU's)are investing large resources to
drive the movement. If the IOU's get their way, it could be harmful to residential customers. The lobbyist is
presenting the BWL's position to the legislators to assure a good understanding of the issues important to the
restructuring debate.
Page 8 Board Minutes
January 28, 1997
Habitat for Humanity. Commissioner Strolle commented that he received an inquiry from a constituent who is
involved with Habitat for Humanity. He asked if there is a way for the BWL to assist through community service
in eliminating or helping with electric or water connections for new houses for Habitat.
Communications Director John Strickler responded that contact has been made by Habitat for Humanity volunteers
for BWL assistance with water hookups. The request has been referred to Water Utility Director Clyde Dugan. In
the past the BWL has worked with Habit for Humanity through employee volunteers.
Lobbyist. Commissioner Pratt echoed Commissioner Royal's remarks regarding the lobbying costs. He noted that
the BWL is not lobbying against deregulation of electricity, but instead is lobbying for a level playing field. The
BWL's concern is that deregulation is going to put the IOU's in such an advantage resulting in high rates and
captive residential customers.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
EXCUSED ABSENCES
On motion by Commissioner Strolle, seconded by Commissioner Royal,the absences of Commissioners Christian
and Werbelow were unanimously adopted.
ADJOURNMENT
On motion by Commissioner Graves,the Board adjourned at 6:36 p.m.
Mary E. Secretary
Filed: February 3, 1997
Marilynn Slade, City Clerk