HomeMy WebLinkAbout1999 Minutes BOWL 133
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING-"`' '
LANSING BOARD OF WATER AND LIGHT
Lr11'i.:a1i'i:.
Tuesday, December 14, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of
the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was
called to order by the Chair, Diane Royal.
Present: Commissioners Ronald C. Callen, Ernest J. Christian, Charles M.
Creamer, Mark A. Murray, David O'Leary, Diane R. Royal and
Judson M. Werbelow (by speakerphone).
Absent: Commissioner Rosemarie E. Aquilina
The Assistant Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary, seconded by Commissioner Christian, to
approve the minutes of regular session held November 23, 1999 and the special board
meeting held November 30, 1999.
Carried 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.
COMMUNICATIONS
Three communications were noted by Chairperson Royal.
Letter from Tom Bartley of East Lansing RE: Wind driven electricity generators.
Letter from Nello Valentine RE: Green Power
E-mail communication from LeRoy Harvey RE: Green Power
The communication items were noted and placed on file.
134 Board Minutes
December 14, 1999
REPORTS OF COMMITTEES
#99-12-1
FINANCE COMMITTEE REPORT
The Finance Committee met with the external auditors, Deloitte & Touche, LLP, on
November 30, 1999, to review the audit of the Board of Water and Light financial
statements for Fiscal Year (FY) ended June 30, 1999. Robert Phelps, Senior Manager,
and Michael Styczenski partner, of Deloitte & Touche reported that the audit report
expresses a clean, unqualified opinion of the financial statements. There were no
material weaknesses noted in procedures or controls. Included in the audit was
supplementary information addressing Year 2000 issues. The auditors noted that they
received the full cooperation of management and staff and had unrestricted access to
senior management in the performance of their audit. The FY 1999 audit report for the
Board of Water and Light was filed with the City of Lansing on November 2, 1999.
Copies of the Employees' Defined Benefit Pension Plan and Employees Defined
Contribution Pension Plan have been received and reviewed by the Pension Fund
Trustees.
The Finance Committee recommends the following:
RESOLVED, That the Corporate Secretary be directed to file copies of the audit reports
and the report on the system of internal control with the State Treasurer as required by
law.
Submitted by,
Charles Creamer, Chair
Finance Committee
Motion by Commissioner Creamer, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-12-2
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on November 30, 1999, to review a draft of Board of
Water and Light policies as submitted by the Board's Policy Review Committee
consisting of Commissioners Royal and Creamer.
General Manager Pandy and Legal Staff presented an overview of management's
process in reviewing, researching and writing proposed revisions to the policies. This
procedure involved several drafts before it was presented to the Board's Policy Review
Committee for feedback and evaluation. The policies were then presented to the
Committee of the Whole for final review and input.
Board Minutes 135
December 14, 1999
Suggestions made by the Commissioners are being incorporated into final policies,
intended to be broad to simply the policy manual, for submission to the Board in
January, 2000 for adoption. Staff recommendations to rescind items in the old policy
manual that are no longer relevant and to reaffirm those that are to be retained as
resolutions will be included.
Submitted by:
Rose Aquilina, Chair Pro Tern
COMMITTEE OF THE WHOLE
Motion by Commissioner Royal, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-12-3
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 regular meetings of the Board
of Water and Light Commissioners for the ensuing six (6) months are hereby set.
2000
January 25 - Tuesday
February 22 - Tuesday
March 28 - Tuesday
Apri125 - Tuesday
May 23 - Tuesday
June 27 - 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 3, 2000.
Motion by Commissioner Christian, seconded by Commissioner Callen, to adopt the
resolution.
Action: Carried unanimously.
136 Board Minutes
December 14, 1999
#99-12-4
SCHEDULED CURTAILMENT/INTERRUPTIBLE SERVICE RIDER
RESOLVED, That the current rate schedule entitled "Scheduled Curtailment Service
Rider" effective 1/1/97 be rescinded.
RESOLVED FURTHER, that the attached and revised rate schedule entitled
"Scheduled Curtailment/Interruptible Service Rider" be adopted and made effective
January 1, 2000.
The subject rate schedule was the subject of a public hearing at the regular board
meeting of 11/23/99. There were no comments, except staff substitution of an
amended rate schedule. The attached rate schedule has had further staff input and is
recommended for adoption.
The change is needed to compete for large industrial electric customer requests. The
most recent example is the Select Steel proposal. Staff needs the authority to
negotiate with potential large industrial customers on this topic.
Motion by Commissioner Christian, seconded by Commissioner Creamer, to adopt the
resolution.
Action: Carried unanimously.
#99-12-5
EXCHANGE OF PROPERTY
RESOLVED, That surplus portions of the former Lansing Connecting Railroad (LCRR)
property purchased by the Lansing Board of Water and Light (BWL) in 1998 (Res. No.
97-11-4) be exchanged for the following described property from the Holmes Street
Building Company. The surplus BWL property consists of three parcels containing
approximately 10047 sq. ft. and the property the BWL will receive in exchange consists
of two parcels containing approximately 9403 sq. ft. In addition to the property
exchange, the BWL will receive an easement for vehicle access from S. Holmes Street
into the back of the BWL Main Office property at 1232 Haco Dr.
PARCEL 1. — Part of Lot 21 of Assessor's Plat No. 26, City of Lansing, Ingham County,
Michigan, described as follows: Beginning at a point on the South Line of Lot 3 of Haco
Subdivision that is N 89018'51" W 152.51 Ft. from the Southeast Plat corner of Haco
Subdivision; thence southerly along a line that is parallel to and 24 ft. westerly of the
west side of the west block wall of the "Builders Heating Supply" Building (1234 S.
Holmes Street, Lansing, Michigan) S 00050'32" W 111.61 Ft. to a point on the
northeasterly sideline of the former Lansing Connecting Railroad (LCRR); thence
northwesterly along the curved LCRR sideline on a curve to the right with a radius of
1218.36 Ft., long chord bearing N 54°25'57" W 186.36 Ft., an arc distance of 186.54
Ft.; thence continuing along the former LCRR sideline N 50007'57" W 7.96 Ft. to a point
Board Minutes 137
December 14, 1999
at the intersection of the south line of Haco Subdivision and the northeasterly sideline of
the former LCRR; thence S 89018'51" E 159.35 Ft. to the point of beginning, containing
9391 Sq. Ft. of land, more or less.
PARCEL 2. — Part of Lot 19 of Assessor's Plat No. 26, City of Lansing, Ingham County,
Michigan, described as follows: Beginning at a point at the intersection of the centerline
of the former Lansing Connecting Railroad (LRCC) with the north line of Lot 19 of
Assessor's Plat No. 26; thence along the north line of said Lot 19 S 89028'31" E 6.46
Ft.; thence S 000 50'32" W 3.75 Ft. to a point on the centerline of the former LRCC;
thence northwesterly along the centerline of the former LCRR on a curve to the right
with a radius of 1239.16 Ft., long chord bearing N 59013'36" W 7.45 Ft., an arc distance
of 7.45 Ft. to the point of beginning, containing 12 Sq. Ft. of land, more or less.
The property to be received from the Holmes Street Building Company is adjacent to
property behind the BWL main office facilities located at 1232 Haco Dr. When we
purchased the former LCCR property, our intent was to retain and consolidate portions
with our existing properties and sell any surplus to adjacent property owners. As an
adjacent property owner, the Holmes Street Building Company agreed to exchange a
portion of its property for portions of the surplus LCRR property. The BWL will
consolidate the new parcels with our existing property to improve the existing property
boundaries and utilize the easement for an emergency entrance into 1232 Haco Dr.
from S. Holmes Street.
Commissioner Callen inquired as to whether an evaluation was done on the value of
the property. General Manager Pandy responded that there was not a formal appraisal.
The properties are similar in value.
Commissioner Werbelow inquired if the exchange of property between the BWL and the
Holmes Street Building Company required City Council approval. City Council approval
is required for this exchange.
Motion by Commissioner Creamer, seconded by Commissioner Murray, to adopt the
resolution.
Action: Carried unanimously.
#99-12-6
AMENDMENT NO. 4 TO C-8514 TRANSPORTATION CONTRACT
RESOLVED, That the Board approve Amendment No. 4 to C-8514 Transportation
Contract ("Contract") with Norfolk Southern Railroad (NS) and Canadian National
Railway (CN), subject to approval by the BWL's Legal Counsel. The amendment
particulars are as follows:
1. The term of this Contract will be extended twenty-four (24) months,
with an expiration date of December 31, 2001.
2. There shall be no minimum volume commitment.
138 Board Minutes
December 14, 1999
3. The rate, as outlined on the attached supplemental price sheet, will
be the same as that in effect on December 31, 1999.
4. The rates will be held firm and free from escalation for the entire
amendment period.
By amending this Contract with NS and CN, the BWL will be able to maintain its broad
base of potential eastern Spot coal suppliers. This will ensure that eastern Spot coal
competition is maximized and purchased at the lowest delivered cost possible. This
amendment freezes the transportation rates of 1999 levels for the next two years.
Railroad expenses, as tracked by the Association of American Railroads, exhibited an
increase of 0.73% from the first quarter of 1998 through the second quarter of 1999.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-12-7
REFUND CONTRACT WITH NORFOLK SOUTHERN RAILROAD
RESOLVED, That the Board enter into a Refund Contract ("Contract") with Norfolk
Southern Railroad (NS) subject to approval by the BWL's Legal Counsel. The Contract
particulars are as follows:
1. The term of this Contract will be effective from January 1, 2000 through
December 31, 2001 .
2. This Contract will provide for an annual refund payment based on attaining
certain tonnage levels of eastern coal shipped under Transportation
Contract C-8514.
3. The tonnage levels and refund amounts are outlined on the attached
supplemental price sheet.
4. NS will be responsible for the entire refund, as such the Canadian National
Railway will not be a party to this Contract.
By entering into this Contract with NS, BWL will have the opportunity to further reduce
its delivered price of eastern coal, by shipping tonnage levels in excess of 50,000
tons/year, as per the attached supplemental price sheet. During FY 1999, BWL
shipped 55,354 tons of coal on NS.
Motion by Commissioner O'Leary, seconded by Commissioner Murray, to adopt the
resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business
Board Minutes 139
December 14, 1999
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
General Manager Pandy announced that Brian McLeod will be the new Manager of the
Delivery Resource Center, which includes the electric, water, and steam utility
construction.
Chilled Water Update. General Manager Pandy handed out three communications
relative to the Chilled Water Plant. Lengthy discussion was held on the status of the
Chilled Water Plant. Staff will continue working on legal issues with Saga
Communications, and the Michigan Bar Association, and also with Ingham County on
purchase of the property on the corner of Kalamazoo and Walnut Streets. Questions
from the Commissioners on many of the obstacles in continuing the project, customers
willing to commit to purchasing chilled water, and environmental clean-up of the project
property were responded to by staff.
Commissioner Creamer stated, for the record, that he did not and will not participate in
the discussion on the Chilled Water Plant because of his position with Michigan
Retailers Association.
Ottawa Development Project. General Manager Pandy reported on a recent trip to
view the Easton Town Center in Columbus Ohio. A letter of interest from Steiner and
Associates, the developer of Easton Town Center, was handed out. In it, they
expressed their interest in conducting an analysis of the Lansing Market for a
development of this type. Discussion was held on the duration of continuing to pursue
the project, status of the State Waterfront Redevelopment Grant, and support from the
City of Lansing and Economic Development Corporation (EDC) on the project. Staff
was directed to proceed with the project.
Analytical Review. Internal Auditor Kellie Willson presented the BWL Analytical
Review for 1999.
Union Negotiations. Negotiations with I.B.E.W. are commencing. Health care is the
main issue still being negotiated.
REMARKS BY COMMISSIONERS
Chairperson Diane Royal wished everyone a Merry Christmas and Happy New Year.
Commissioner Christian inquired whether the health care issue currently in negotiations
will be for current employees only or includes retirees. The health care includes all
Bargaining, and Non-Bargaining employees, and retirees.
140 Board.Minutes
December 14,1999
Commissioner Callen disclosed that he will be testifying before the Michigan Public
Service Commission, representing the Michigan Environmental Council, in a case
involving the disposal of high level nuclear waste. Although this issue does not concern
the Board of Water and Light, he plans to file a conflict of interest disclosure indicating
his involvement with the Michigan Environmental Council. The Michigan Environmental
Council has taken a strong position on green power, thus he will not be participating in
discussions nor voting on the green power issue.
EXCUSED ABSENCES
Motion by Commissioner Christian, seconded by Commissioner Murray, that the
absence of Commissioner Aquilina be excused.
Action: Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner Murray, the meeting
adjourned at 7:10 p.m.
/s/Rosemary Sullivan, Acting Secretary
Filed: December , 1999
Marilynn Slade, City Clerk
DEC-17-1999 10:35 BD OF DATER LIGHT 1 517 371 6855 P.02i09
133
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, December 14, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of
the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was
called to order by the Chair, Diane Royal.
Present: Commissioners Ronald C. Callen, Ernest J. Christian, Charles M.
Creamer, Mark A. Murray, David O'Leary, Diane R. Royal and
Judson M. Werbelow (by speakerphone).
Absent: Commissioner Rosemarie E. Aquilina >
The Assistant Secretary declared a quorum present. : =�
The Pledge of Allegiance was said by all. n�
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary, seconded by Commissioner Christian, to
approve the minutes of regular session held November 23, 1999 and the special board
meeting held November 30, 1999,
Carried 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.
COMMUNICATIONS
Three communications were noted by Chairperson Royal.
Letter from Tom Bartley of East Lansing RE: Wind driven electricity generators.
Letter from Nello Valentine RE: Green Power
E-mail communication from LeRoy Harvey RE: Green Power
The communication items were noted and placed on file.
DEC-17-1999 10:35 BD OF WRTER LIGHT 1 517 371 EB55 P.03/09
134 Board Minutes
December 14, 1999
REPORTS OF COMMITTEES
#99-12-1
FINANCE COMMITTEE REPORT
The Finance Committee met with the external auditors, Deloitte & Touche, LLP, on
November 30, 1999, to review the audit of the Board of Water and Light financial
statements for Fiscal Year (FY) ended June 30, 1999. Robert Phelps, Senior Manager,
and Michael Styczenski partner, of Deloitte & Touche reported that the audit report
expresses a clean, unqualified opinion of the financial statements. There were no
material weaknesses noted in procedures or controls. Included in the audit was
supplementary information addressing Year 2000 issues. The auditors noted that they
received the full cooperation of management and staff and had unrestricted access to
senior management in the performance of their audit. The FY 1999 audit report for the
Board of Water and Light was filed with the City of Lansing on November 2, 1999.
Copies of the Employees' Defined Benefit Pension Plan and Employees Defined
Contribution Pension Plan have been received and reviewed by the Pension Fund
Trustees.
The Finance Committee recommends the following:
RESOLVED, That the Corporate Secretary be directed to file copies of the audit reports
and the report on the system of internal control with the State Treasurer as required by
law.
Submitted by,
Charles Creamer, Chair
Finance Committee
Motion by Commissioner Creamer, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-12-2
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on November 30, 1999, to review a draft of Board of
Water and Light policies as submitted by the Board's Policy Review Committee
consisting of Commissioners Royal and Creamer.
General Manager Pandy and Legal Staff presented an overview of management's
process in reviewing, researching and writing proposed revisions to the policies. This
procedure involved several drafts before it was presented to the Board's Policy Review
Committee for feedback and evaluation. The policies were then presented to the
Committee of the Whole for final review and input.
DEC-17-1999 10:35 BD OF WRTER LIGHT 1 517 371 6B55 P.04i09
Board Minutes 135
December 14, 1999
Suggestions made by the Commissioners are being incorporated into final policies,
intended to be broad to simply the policy manual, for submission to the Board in
January, 2000 for adoption. Staff recommendations to rescind items in the old policy
manual that are no longer relevant and to reaffirm those that are to be retained as
resolutions will be included.
Submitted by:
Rose Aquilina, Chair Pro Tern
COMMITTEE OF THE WHOLE
Motion by Commissioner Royal, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-12-3
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 regular meetings of the Board
of Water and Light Commissioners for the ensuing six (6) months are hereby set.
2000
January 25 - Tuesday
February 22 - Tuesday
March 28 - Tuesday
April 25 - Tuesday
May 23 - Tuesday
June 27 - 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 3, 2000.
Motion by Commissioner Christian, seconded by Commissioner Callen, to adopt the
resolution.
Action: Carried unanimously.
DEC-17-1999 10:36 BD OF WRTER LIGHT 1 517 371 6855 P.05i09
136 Board Minutes
December 14, 1999
#99-12-4
SCHEDULED CURTAILMENT/INTERRUPTIBLE SERVICE RIDER
RESOLVED, That the current rate schedule entitled "Scheduled Curtailment Service
Rider" effective 1/1/97 be rescinded.
RESOLVED FURTHER, that the attached and revised rate schedule entitled
"Scheduled Curtailment/Interruptible Service Rider" be adopted and made effective
January 1, 2000.
The subject rate schedule was the subject of a public hearing at the regular board
meeting of 11/23/99. There were no comments, except staff substitution of an
amended rate schedule. The attached rate schedule has had further staff input and is
recommended for adoption.
The change is needed to compete for large industrial electric customer requests. The
most recent example is the Select Steel proposal. Staff needs the authority to
negotiate with potential large industrial customers on this topic.
Motion by Commissioner Christian, seconded by Commissioner Creamer, to adopt the
resolution.
Action: Carried unanimously.
#99-12-5
EXCHANGE OF PROPERTY
RESOLVED, That surplus portions of the former Lansing Connecting Railroad (LCRR)
property purchased by the Lansing Board of Water and Light (BWL) in 1998 (Res. No.
97-11-4) be exchanged for the following described property from the Holmes Street
Building Company. The surplus BWL property consists of three parcels containing
approximately 10047 sq. ft. and the property the BWL will receive in exchange consists
of two parcels containing approximately 9403 sq. ft. In addition to the property
exchange, the BWL will receive an easement for vehicle access from S. Holmes Street
into the back of the BWL Main Office property at 1232 Haco Dr.
PARCEL 1. — Part of Lot 21 of Assessor's Plat No. 26, City of Lansing, Ingham County,
Michigan, described as follows: Beginning at a point on the South Line of Lot 3 of Haco
Subdivision that is N 89018'51" W 152.51 Ft. from the Southeast Plat corner of Haco
Subdivision; thence southerly along a line that is parallel to and 24 ft. westerly of the
west side of the west block wall of the "Builders Heating Supply" Building (1234 S.
Holmes Street, Lansing, Michigan) S 00050'32" W 111.61 Ft. to a point on the
northeasterly sideline of the former Lansing Connecting Railroad (LCRR); thence
northwesterly along the curved LCRR sideline on a curve to the right with a radius of
1218.36 Ft., long chord bearing N 541,25'57" W 186.36 Ft., an arc distance of 186.54
Ft.; thence continuing along the former LCRR sideline N 50107'57" W 7.96 Ft. to a point
DEC-17-1599 10:36 BD OF WRTER LIGHT 1 517 371 6B55 P.06i09
Board Minutes 137
December 14, 1999
at the intersection of the south line of Haco Subdivision and the northeasterly sideline of
the former LCRR; thence S 891,18'51" E 159.35 Ft. to the point of beginning, containing
9391 Sq. Ft. of land, more or less.
PARCEL 2. — Part of Lot 19 of Assessor's Plat No. 26, City of Lansing, Ingham County,
Michigan, described as follows: Beginning at a point at the intersection of the centerline
of the former Lansing Connecting Railroad (LRCC) with the north line of Lot 19 of
Assessor's Plat No. 26; thence along the north line of said Lot 19 S 89028'31" E 6.46
Ft.; thence S 000 50'32" W 3.75 Ft. to a point on the centerline of the former LRCC;
thence northwesterly along the centerline of the former LCRR on a curve to the right
with a radius of 1239.16 Ft., long chord bearing N 59113'36" W 7.45 Ft., an arc distance
of 7.45 Ft. to the point of beginning, containing 12 Sq. Ft. of land, more or less.
The property to be received from the Holmes Street Building Company is adjacent to
property behind the BWL main office facilities located at 1232 Haco Dr. When we
purchased the former LCCR property, our intent was to retain and consolidate portions
with our existing properties and sell any surplus to adjacent property owners. As an
adjacent property owner, the Holmes Street Building Company agreed to exchange a
portion of its property for portions of the surplus LCRR property. The BWL will
consolidate the new parcels with our existing property to improve the existing property
boundaries and utilize the easement for an emergency entrance into 1232 Haco Dr.
from S. Holmes Street.
Commissioner Callen inquired as to whether an evaluation was done on the value of
the property. General Manager Pandy responded that there was not a formal appraisal.
The properties are similar in value. °
Commissioner Werbelow inquired if the exchange of property between the BWL and the
Holmes Street Building Company required City Council approval. City Council approval
is required for this exchange.
Motion by Commissioner Creamer, seconded by Commissioner Murray, to adopt the
resolution.
Action: Carried unanimously.
#99-12-6
AMENDMENT NO. 4 TO C-8514 TRANSPORTATION CONTRACT
RESOLVED, That the Board approve Amendment No. 4 to C-8514 Transportation
Contract ("Contract") with Norfolk Southern Railroad (NS) and Canadian National
Railway (CN), subject to approval by the BWL's Legal Counsel. The amendment
particulars are as follows:
1. The term of this Contract will be extended twenty-four (24) months,
with an expiration date of December 31, 2001.
2. There shall be no minimum volume commitment.
DEC-17-1999 10.36 BD OF WRTER LIGHT 1 517 371 6B55 P.07/09
138 Board Minutes
December 14, 1999
3. The rate, as outlined on the attached supplemental price sheet, will
be the same as that in effect on December 31, 1999.
4. The rates will be held firm and free from escalation for the entire
amendment period.
By amending this Contract with NS and CN, the BWL will be able to maintain its broad
base of potential eastern Spot coal suppliers. This will ensure that eastern Spot coal
competition is maximized and purchased at the lowest delivered cost possible. This
amendment freezes the transportation rates of 1999 levels for the next two years.
Railroad expenses, as tracked by the Association of American Railroads, exhibited an
increase of 0.73% from the first quarter of 1998 through the second quarter of 1999.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-12-7
REFUND CONTRACT WITH NORFOLK SOUTHERN RAILROAD
RESOLVED, That the Board enter into a Refund Contract ("Contract") with Norfolk
Southern Railroad (NS) subject to approval by the BWL's Legal Counsel. The Contract
particulars are as follows:
1. The term of this Contract will be effective from January 1, 2000 through
December 31, 2001.
2. This Contract will provide for an annual refund payment based on attaining
certain tonnage levels of eastern coal shipped under Transportation
Contract C-8514.
3. The tonnage levels and refund amounts are outlined on the attached
supplemental price sheet.
4. NS will be responsible for the entire refund, as such the Canadian National
Railway will not be a party to this Contract.
By entering into this Contract with NS, BWL will have the opportunity to further reduce
its delivered price of eastern coal, by shipping tonnage levels in excess of 50,000
tons/year, as per the attached supplemental price sheet. During FY 1999, BWL
shipped 55,354 tons of coal on NS.
Motion by Commissioner O'Leary, seconded by Commissioner Murray, to adopt the
resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business
DEC-17-1999 10:36 BD OF WRTER LIGHT 1 517 371 6855 P.08/09
Board Minutes 139
December 14, 1999
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
General Manager Pandy announced that Brian McLeod will be the new Manager of the
Delivery Resource Center, which includes the electric, water, and steam utility
construction.
Chilled Water Update. General Manager Pandy handed out three communications
relative to the Chilled Water Plant. Lengthy discussion was held on the status of the
Chilled Water Plant. Staff will continue working on legal issues with Saga
Communications, and the Michigan Bar Association, and also with Ingham County on
purchase of the property on the corner of Kalamazoo and Walnut Streets. Questions
from the Commissioners on many of the obstacles in continuing the project, customers
willing to commit to purchasing chilled water, and environmental clean-up of the project
property were responded to by staff.
Commissioner Creamer stated, for the record, that he did not and will not participate in
the discussion on the Chilled Water Plant because of his position with Michigan
Retailers Association.
Ottawa Development Project. General Manager Pandy reported on a recent trip to
view the Easton Town Center in Columbus Ohio. A letter of interest from Steiner and
Associates, the developer of Easton Town Center, was handed out. In it, they
expressed their interest in conducting an analysis of the Lansing Market for a
development of this type. Discussion was held on the duration of continuing to pursue
the project, status of the State Waterfront Redevelopment Grant, and support from the
City of Lansing and Economic Development Corporation (EDC) on the project. Staff
was directed to proceed with the project.
Analytical Review. Internal Auditor Kellie Willson presented the BWL Analytical
Review for 1999.
Union Negotiations. Negotiations with I.B.E.W. are commencing. Health care is the
main issue still being negotiated.
REMARKS BY COMMISSIONERS
Chairperson Diane Royal wished everyone a Merry Christmas and Happy New Year.
Commissioner Christian inquired whether the health care issue currently in negotiations
will be for current employees only or includes retirees. The health care includes all
Bargaining, and Non-Bargaining employees, and retirees.
DEC-17-1999 10:37 BD OF WATER LIGHT 1 517 371 6B55 P.09i09
140 Board Minutcs
December 14, 1999
Commissioner Callen disclosed that he will be testifying before the Michigan Public
Service Commission, representing the Michigan Environmental Council, in a case
involving the disposal of high level nuclear waste. Although this issue does not concern
the Board of Water and Light, he plans to file a conflict of interest disclosure indicating
his involvement with the Michigan Environmental Council. The Michigan Environmental
Council has taken a strong position on green power, thus he will not be participating in
discussions nor voting on the green power issue.
EXCUSED ABSENCES
Motion by Commissioner Christian, seconded by Commissioner Murray, that the
absence of Commissioner Aquilina be excused.
Action: Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner Murray, the meeting
adjourned at 7:10 p.m.
/s/Rosemary Sullivan, Acting Secretary
Filed: December , 1999
Marilynn Slade, City Clerk
TOTAL P.09
DEC-17-1999 10:35 BD OF IdRTER LIGHT 1 517 371 6655 P.01i09
WATE#18"GHT
BOARD OF WATER AND LIGHT
1232 Haco Drive
P.O. Box 13007
Lansing, Ml48901-3007
Fax: 517-371-6855
DATE:
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Page128
MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEET-ING_. i
LANSING BOARD OF WATER AND LIGHT
{ v f i 1
Tuesday,November 30, 1999 ( CLERK
The Board of Commissioners met in Special Session at 5:30 p.m., in the Boardroom of the Administrative
Offices, 1232 Haco Drive,Lansing,Michigan. The meeting was called to order by the Chair, Diane Royal.
Present: Commissioners Rose E. Aquilina, Ronald C. Callen, Ernest J. Christian, Charles M. Creamer,
David O'Leary,Diane R.Royal and Judson M. Werbelow (via speakerphone).
Absent: Commissioner Mark A. Murray.
The Secretary declared a quorum present.
Chief Financial Officer Dana Tousley presented and reviewed the final draft of the proposed Series 1999B
Sales Resolution. Richard Allen of First Union Securities, Inc. and Kevin McCanna of Speer Financial,
Inc.briefed the Board on the pricing of the taxable bonds being sold by the Board of Water and Light.
Motion was made by Commissioner Creamer, seconded by Commissioner Christian,to approve the
following resolution:
#99-9-4
SERIES 1999B SALES RESOLUTION
AUTHORIZING WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM
SUBORDINATE LIEN REVENUE BONDS SERIES 1999B (FEDERALLY TAXABLE)
OF THE CITY OF LANSING,MICHIGAN
WHEREAS,the Board previously approved the Fourth Supplemental Revenue Bond
Resolution authorizing its Water Supply, Steam and Electric Utility System Subordinate Lien Revenue
Bonds (Federally Taxable), Series 1999B,the proceeds of which will be used to pay for the 1999B Project;
WHEREAS,the Board has received an offer to purchase the Series 1999B Bonds
pursuant to the terns of a Bond Purchase Agreement(the "Purchase Contract"),submitted by First Union
Securities,Inc., as representative(the "Representative")of the Underwriters selected by the Board and
identified in the Purchase Contract("Underwriters").
NOW, THEREFORE,BE IT RESOLVED BY THE COMMISSIONERS OF THE
BOARD,THAT:
1. Unless otherwise defined herein or the context indicates a contrary meaning,
capitalized terms used in this Series 1999B Sales Resolution shall have the same meaning as in the
Amended and Restated Bond Resolution, adopted on October 24, 1989,as supplemented from time to time,
including the Fourth Supplemental Revenue Bond Resolution, adopted by the Board on October 26, 1999
(collectively,the "Bond Resolution").
2. The aggregate principal amount of the Series 1999B Bonds shall be$78,455,000,
maturing on July 1 in the years and amounts and bearing interest at rates set forth in Exhibit A to this
Series 1999B Sales Resolution.
3. The proposal of First Union Securities, Inc.to purchase the Series 1999B Bonds at a
price of$78,088,086.55 (representing the par amount of the Bonds plus a net original issue premium of
$162,657.80 less an Underwriters'discount of$529,571.25)is approved.
Board Minutes Page 129
November 30, 1999
4. The form of the Purchase Contract submitted to the Board by the Representative on
behalf of the Underwriters is approved and the Chairperson, any other Commissioner,the General Manager
and the Chief Financial Officer of the Board are severally authorized to execute and deliver the Purchase
Contract for and on behalf of the Board,with such changes as they may, in consultation with the Staff
Attorney and Bond Counsel, determine to be necessary or appropriate.
5. The preparation and distribution of an Official Statement with reference to the
Bonds (the"Official Statement"), hi substantially the form of the Preliminary Official Statement,is
approved with such changes as the Chairperson or any Commissioner and the General Manager and the
Chief Financial Officer may, in consultation with the Staff Attorney and Bond Counsel, determine to be
necessary or appropriate. The Chairperson or any Commissioner and the General Manager are authorized
to execute the Official Statement for and on behalf of the Board.
6. The Chairperson, any Commissioner,the General Manager and the Chief Financial
Officer are severally authorized to execute an agreement in substantially the form presented to the Board at
this meeting,with such changes as may be necessary or desirable and not materially adverse to the Board,
in order to comply with the Continuing Disclosure Undertaking of the Board pursuant to paragraph(13)(5)
of Rule 15c2-12 adopted by the United States Securities and Exchange Commission(the "Continuing
Disclosure Agreement"). The Board covenants that it will comply with and carry out all of the provisions
of the Continuing Disclosure Agreement.
7. The last sentence of Section 3 of the Fourth Supplemental Revenue Bond
Resolution is amended to read as follows:
"The estimated cost of the 1999B Project is$78,455,000 and the
estimated useful life of the 1999B Project is 17 years."
8. Section 13(e)of the Fourth Supplemental Revenue Bond Resolution is amended to
read as follows:
"Payments with respect to claims for interest on and principal of
Insured Bonds disbursed by the Transfer Agent from proceeds of the
Policy shall not be considered to discharge the obligation of the Issuer
with respect to such Insured Bonds, and the Bond Insurer shall become
the owner of such unpaid Insured Bonds and claims for the interest in
accordance with the tenor of the assignment made to it under the
provisions of this subsection or otherwise."
9. Section 13(g)of the Fourth Supplemental Revenue Bond Resolution is amended to
read as follows:
"In connection with the issuance of additional Insured Bonds,the
Issuer shall deliver to the Bond Insurer a copy of the disclosure
document, if any, circulated with respect to such additional Insured
Bonds."
10. Section 15 of the Fourth Supplemental Revenue Bond Resolution is amended to
read as follows:
"The Board confrnns that the provisions and covenants contained in the
Bond Resolution with respect to defeasance,operating year,flow of
funds,priority of funds,management, charges, investments,applicable
law, events of default, appointment of a receiver and enforcement of
statutory rights, consent and amendment provisions and the rate
covenant contained in Section 9 of the Bond Resolution, as amended
Page 130 Board Minutes
November 30, 1999
by Section 5 of the Second Supplemental Revenue Bond Resolution,
shall apply to and include the Junior Lien Bonds, including the
Series 1999B Bonds, in addition to the Senior Lien Bonds."
11. This Series 1999B Sales Resolution shall be effective immediately upon adoption.
Isl Diane R. Royal Isl Mary E. Sova
Chairperson Corporate Secretary
ADOPTED: IN FAVOR: Commissioners Aquilina,Callen, Christian,Creamer, O'Leary, Royal,
and Werbelow.
AGAINST: None,
ABSTAIN: None.
ABSENT: Commissioner Murray.
ADJOURNMENT
On motion by Commissioner Creamer, seconded by Commissioner Aquilina, the meeting adjourned at
5:45 p.m.
/s/Mary E. S a, Secretary
Filed: December 7, 1999
Marilynn Slade, City Clerk
Board Minutes Page 131
November 30, 1999
EXHIBIT A
I. BOND DETAILS-SERIAL AND TERM BONDS
Maturity Date Principal Interest
Jul 1 Amount Rate Price
2002 $1,850,000 7.10% 100.786%
2003 3,310,000 7.15 100.809
2004 3,550,000 7.20 100.819
2005 3,805,000 7.25 100.881
2006 4,080,000 7.30 100.762
2007 4,375,000 7.35 100.619
2008 4,700,000 7.40 100.868
2009 5,045,000 7.40 100.598
2010 5,420,000 7.40 99.770
2011 5,820,000 7.50 99.682
2016* 36,500,000 7.70 99.892
* Term Bond.
The Bonds maturing July 1,2016 in the aggregate principal amount of$36,500,000 are hereby
designated Tenn Bonds and shall be subject to mandatory sinking fund redemption and be redeemed by the
Issuer and selected by lot, at a price of par plus accrued interest to the applicable redemption dates, in
accordance with the following Mandatory Redemption Requirements:
Redemption Dates Principal
Jul 1 Amount
2012 $6,260,000
2013 6,740,000
2014 7,260,000
2015 7,820,000
leaving a principal amount of$8,420,000 due on July 1,2016.
1I. MANDATORY REDEMPTION PROVISIONS
The Board shall receive a credit with respect to any Mandatory Redemption Requirements on account
of Tenn Bonds that have been redeemed(other than by application of Mandatory Redemption
Requirements) or otherwise acquired by the Board prior to giving of the notice of redemption provided for
in the Bond Resolution and that have not been applied as a credit against any other Mandatory Redemption
Requirements. Not less than 40 days prior to any mandatory redemption date,the Board shall give notice
to the paying agent that the Term Bonds are to be so credited. The Team Bonds shall be credited by the
paying agent at 100%of the principal amount thereof against the Mandatory Redemption Requirements,
and the principal of the Term Bonds to be redeemed on such mandatory redemption date shall be reduced
accordingly and any excess over such amount shall be credited to future Mandatory Redemption
Requirements in such order as the Board shall elect;provided,however,that any excess resulting from the
purchase, at less than par,of Bonds may, at the option of the Board,be transferred to the Receiving Fund.
III. OPTIONAL REDEMPTION PROVISIONS
Page 132 Board Minutes
November 30, 1999
General
The Bonds maturing in the years July 1,2002-2009,inclusive,shall not be subject to redemption
prior to maturity. Bonds due on or after July 1,2010,shall be subject to redemption prior to maturity, at
the option of the Board, in such order of maturity as the Board may determine, and by lot within any
maturity, in whole or in part, on any date on or after July 1,2009,at par plus accrued interest to the date
fixed for redemption.
Special
In addition to the foregoing optional redemption,the Bonds shall be subject to special optional
redemption prior to maturity,in such order of maturity as the Board may determine,and by lot within any
maturity,in whole or in part, on January 1,2003 from unexpended proceeds on hand as of November 1,
2002, if any,at a price of 101%of their par value,plus accrued interest,if any,to the date of redemption.
15:34 DEC 07, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #76056 PAGE: 2/6
Page 128
MINUTES OF THE BOARD OF COMMISSIONERS'SPECIAL,MEETING
LANSING BOARD OF WATER AND LIGHT ' C^+1/4`
DEC _.J ,
1 �; 2: S9
Tuesday,November 30,1999
LANSING CITY CLERN'
The Board of Commissioners met in Special Session at 5:30 p.m.,in the Boardroom of the Administrative
Offices, 1232 Haco Drive,Lansing,Michigan. The meeting was called to order by the Chair,Diane Royal.
Present: Commissioners Rose E. Aquilina, Ronald C. Callen, Ernest J. Christian, Charles M. Creamer,
David O'Leary,Diane R.Royal and Judson M.Werbelow(via speakerphone).
Absent: Commissioner Mark A Murray.
The Secretary declared a quorum present.
Chief Financial Officer Dana Tousley presented and reviewed the final draft of the proposed Series 1999B
Sales Resolution. Richard Allen of First Union Securities,Inc. and Kevin McCann of Speer Financial,Inc.
briefed the Board on the pricing of the taxable bonds being sold by the Board of Water and Light.
Motion was made by Commissioner Creamer,seconded by Commissioner Christian,to approve the following
resolution:
499-9-4
SERIES 1999B SALES RESOLUTION
AUTHORIZING WATER SUPPLY,STEAM AND ELECTRIC UTILITY SYSTEM
SUBORDINATE LIEN REVENUE BONDS SERIES 1999B(FEDERALLY TAXABLE)
OF THE CITY OF LANSING,MICHIGAN
WHEREAS,the Board previously approved the Fourth Supplemental Revenue Bond
Resolution authorizing its Water Supply,Steam and Electric Utility System Subordinate Lien Revenue Bonds
(Federally Taxable),Series 1999B,the proceeds of which will be used to pay for the 1999B Project;
WHEREAS,the Board has received an offer to purchase the Series 1999E Bonds pursuant
to the terms of a Bond Purchase Agreement(the"Purchase Contract"),submitted by First Union Securities,
Inc.,as representative(the"Representative")of the Underwriters selected by the Board and identified in the
Purchase Contract("Underwriters").
NOW,THEREFORE,BE IT RESOLVED BY THE COMMISSIONERS OF THE
BOARD,THAT:
1. Unless otherwise defined herein or the context indicates a contrary meaning,
capitalized terms used in this Series 1999B Sales Resolution shall have the same meaning as in the Amended
and Restated Bond Resolution,adopted on October 24, 1989,as supplemented from time to time,including
the Fourth Supplemental Revenue Bond Resolution,adopted by the Board on October 26, 1999(collectively,
the"Bond Resolution").
2. The aggregate principal amount of the Series 1999B Bonds shall be$78,455,000,
maturing on July 1 in the years and amounts and bearing interest at rates set forth in Exhibit A to this
Series 1999B Sales Resolution.
3. The proposal of First Union Securities,Inc.to purchase the Series 1999B Bonds at a
price of$78,088,086.55(representing the par amount of the Bonds plus a net original issue premium of
$162,657.80 less an Underwriters'discount of$529,571.25)is approved.
15:35 DEC 07, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #76056 PAGE: 3/6
Board Minutes Page 129
November 30, 1999
4. The form of the Purchase Contract submitted to the Board by the Representative on
behalf of the Underwriters is approved and the Chairperson,any other Commissioner,the General Manager
and the Chief Financial Officer of the Board are severally authorized to execute and deliver the Purchase
Contract for and on behalf of the Board,with such changes as they may,in consultation with the Staff
Attorney and Bond Counsel,determine to be necessary or appropriate.
5. The preparation and distribution of an Official Statement with reference to the Bonds
(the"Official Statement"),in substantially the form of the Preliminary Official Statement,is approved with
such changes as the Chairperson or any Commissioner and the General Manager and the Chief Financial
Officer may,in consultation with the Staff Attorney and Bond Counsel,determine to be necessary or
appropriate. The Chairperson or any Commissioner and the General Manager are authorized to execute the
Official Statement for and on behalf of the Board.
6. The Chairperson,any Commissioner,the General Manager and the Chief Financial
Officer are severally authorized to execute an agreement in substantially the form presented to the Board at
this meeting,with such changes as may be necessary or desirable and not materially adverse to the Board,in
order to comply with the Continuing Disclosure Undertaking of the Board pursuant to paragraph(B)(5)of
Rule 15c2-12 adopted by the United States Securities and Exchange Commission(the"Continuing Disclosure
Agreement"). The Board covenants that it will comply with and carry out all of the provisions of the
Continuing Disclosure Agreement.
7. The last sentence of Section 3 of the Fourth Supplemental Revenue Bond Resolution
is amended to read as follows:
"The estimated cost of the 1999B Project is$78,455,000 and the
estimated useful life of the 1999B Project is 17 years."
8. Section 13(e)of the Fourth Supplemental Revenue Bond Resolution is amended to
read as follows:
"Payments with respect to claims for interest on and principal of Insured
Bonds disbursed by the Transfer Agent from proceeds of the Policy shall
not be considered to discharge the obligation of the Issuer with respect to
such Insured Bonds,and the Bond Insurer shall become the owner of
such unpaid Insured Bonds and claims for the interest in accordance with
the tenor of the assignment made to it under the provisions of this
subsection or otherwise."
9. Section 13(g)of the Fourth Supplemental Revenue Bond Resolution is amended to
read as follows:
"In connection with the issuance of additional Insured Bonds,the Issuer
shall deliver to the Bond Insurer a copy of the disclosure document,if
any,circulated with respect to such additional Insured Bonds."
10. Section 15 of the Fourth Supplemental Revenue Bond Resolution is amended to read
as follows:
"The Board confirms that the provisions and covenants contained in the
Bond Resolution with respect to defeasance,operating year,flow of
funds,priority of funds,management,charges,investments,applicable
law,events of default,appointment of a receiver and enforcement of
statutory rights,consent and amendment provisions and the rate covenant
contained in Section 9 of the Bond Resolution,as amended by Section 5
of the Second Supplemental Revenue Bond Resolution,shall apply to
and include the Junior Lien Bonds,including the Series 1999B Bonds,in
addition to the Senior Lien Bonds."
15:36 DEC 07, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #76056 PAGE: 4/6
Page 130 Board Minutes
November 30, 1999
11. This Series 1999B Sales Resolution shall be effective immediately upon adoption.
/s/ Diane R.Royal /s/ Mary E. Sova
Chairperson Corporate Secretary
ADOPTED: IN FAVOR: Commissioners Aquilina,Callen,Christian,Creamer,O'Leary,Royal,and
W erbelow.
AGAINST: None.
ABSTAIN: None.
ABSENT: Commissioner Murray.
ADJOURNMENT
On motion by Commissioner Creamer, seconded by Commissioner Aquilina, the meeting adjourned at
5:45 p.m.
/sl Adary E. Sova, Secretary
Filed. December 7, 1999
Marilynn Slade,City Clerk
_. r..-.r. ..�.� nr--- -- 0 1 T C P_04
15:36 DEC 07, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #76056 PAGE: 5/6
Board Minutes Page 131
November 30, 1999
EXHIBIT A
I. BOND DETAILS-SERIAL AND TERM BONDS
Maturity Date Principal Interest
(July 1 Amount Rate Price
2002 $1,850,000 7.10% 100.786%
2003 3,310,000 7.15 100.809
2004 3,550,000 7.20 100,819
2005 3,805,000 7.25 100.881
2006 4,080,000 7.30 100.762
2007 4,375,000 7.35 100.619
2008 4,700,000 7.40 100.868
2009 5,045,000 7.40 100.598
2010 5,420,000 7.40 99.770
2011 5,820,000 7.50 99.682
2016* 36,500,000 7.70 99.892
*Tenn Bond.
The Bonds maturing July 1,2016 in the aggregate principal amount of$36,500,000 are hereby designated
Term Bonds and shall be subject to mandatory sinking fund redemption and be redeemed by the Issuer and
selected by lot,at a price of par plus accrued interest to the applicable redemption dates,in accordance with
the following Mandatory Redemption Requirements:
Redemption Dates Principal
(July 1 Amount
2012 $6,260,000
2013 6,740,000
2014 7,260,000
2015 7,820,000
leaving a principal amount of$8,420,000 due on July 1,2016.
II. MANDATORY REDEMPTION PROVISIONS
The Board shall receive a credit with respect to any Mandatory Redemption Requirements on account of
Term Bonds that have been redeemed(other than by application of Mandatory Redemption Requirements)or
otherwise acquired by the Board prior to giving of the notice of redemption provided for in the Bond
Resolution and that have not been applied as a credit against any other Mandatory Redemption Requirements.
Not less than 40 days prior to any mandatory redemption date,the Board shall give notice to the paying agent
that the Term Bonds are to be so credited. The Term Bonds shall be credited by the paying agent at 100%of
the principal amount thereof against the Mandatory Redemption Requirements,and the principal of the Term
Bonds to be redeemed on such mandatory redemption date shall be reduced accordingly and any excess over
such amount shall be credited to future Mandatory Redemption Requirements in such order as the Board shall
elect;provided,.however,that any excess resulting from the purchase,at less than par,of Bonds may,at the
option of the Board,be transferred to the Receiving Fund.
III. OPTIONAL REDEMPTION PROVISIONS
General
15:37 DEC 07, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #76056 PAGE: 6/6
Page 132 Board Minutes
November 30, 1999
The Bonds maturing in the years July 1,2002-2009,inclusive,shall not be subject to redemption prior
to maturity. Bonds due on or after July 1,2010,shall be subject to redemption prior to maturity,at the option
of the Board,in such order of maturity as the Board may determine,and by lot within any maturity,in whole
or in part,on any date on or after July 1,2009,at par plus accrued interest to the date fixed for redemption.
Special
In addition to the foregoing optional redemption,the Bonds shall be subject to special optional
redemption prior to maturity,in such order of maturity as the Board may determine,and by lot within any
maturity,in whole or in part,on January 1,2003 from unexpended proceeds on hand as of November 1,2002,
if any,at a price of 101%of their par value,plus accrued interest,if any,to the date of redemption.
Page 119
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT '
Tuesday,November 23, 1999 �?
The Board of Commissioners met in regular session at 5:38 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, Mark A. Murray, David O'Leary, Diane R. Royal and
Judson M. Werbelow (by speakerphone).
Absent: None
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary, seconded by Commissioner Callen, to
approve the minutes of regular session held October 26, 1999.
Carried 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.
Richard Vander Veen, President & CEO of Bay Windpower, LLC, 2050 Robinson Road,
Grand Rapids, MI 49506, supports the Board of Water and Light's (BWL) proposed wind
power project. A handout was provided on the advantages of wind power to the Lansing
community.
Rolf Peterson, 16743 Eunice Street, East Lansing, MI 48823,representing Primary Power
Marketing, LLC, supports renewable green source of electricity. A flyer was handed out
describing energy marketed by Primary Power Marketing, produced from biomass fuels.
James Clift, Policy Director, Michigan Environmental Council (MEC), 119 Pere
Marquette, Suite 2A, Lansing, MI 48912, endorses the use of electricity produced by
wind energy due to its renewable nature and because it emits no pollutants. The MEC is
willing to pay extra for electricity derived from renewable sources of energy to help spur
the development of renewable technology and to promote the renewable energy industry.
A handout was provided outlining certain MEC concerns regarding the BWL green
Board Minutes Page 120
November 23, 1999
power proposal. He expressed concern with the definition that BWL uses for green
power and biomass. The Board was urged to continue to explore methods to provide
cleaner energy in the future for the benefit of customers and their children
(Commissioner Murray arrived at the meeting at 5:50 p.m.)
Mark Clevey, 222 N. Washington Square, Suite 100, Lansing, MI, supports wind power
renewable energy. He spoke of his involvement as project manager in a solar utility
interconnect demonstration project launched in Detroit, in 1984, sponsored by BWL,
Detroit Edison and Consumers Energy. Mr. Clevey noted that the project is not only
continuing, but is considered a success story among green power utility interconnect
projects in the nation. Mr. Clevey endorsed Bay Windpower's proposal and offered to
share his thoughts and observations with the BWL on the definition of green power, the
economics of wind power, and other related activities going on across the country.
Tom Stanton, 216 Huron Street Lansing, a BWL customer for 22 years, supports green
power and the BWL's efforts in exploring renewable energy options. A handout was
provided outlining various green power opportunities to consider in developing
renewable resources at low cost, while simultaneously helping customers to achieve their
many goals. He acknowledged the BWL's efforts in "putting its toe into the green-power
water," and urged the Board to jump in all the way as quickly as possible. Mr. Stanton
expressed his appreciation to the BWL for its support in the 1999 Great Lakes Renewable
Energy Fair that took place over the summer in downtown Lansing.
COMMUNICATIONS
A letter was received from Dana Debel, Environmental Policy Specialist, Michigan
United Conservation Clubs, in support of the bid submitted by Bay Windpower, LCC, to
construct three 1.65 MW wind generation turbines to serve over 1,500 Lansing
customers.
Email in support of renewal energy was received from the following persons:
• Seth C. Murray supports wind power.
• Darren Bagley urges the prioritizing of wind power, biomass and natural gas
respectively.
• Dennis Propst suggests including wind in the mix of options and to aggressively
pursue efficiency among fixture green power options.
• LeRoy Harvey of Urban Options supports wind power as one of several green power
options.
The communication items were acknowledged and placed on file.
Page 121 Board Minutes
November 23, ]999
REPORTS OF COMMITTEES
#99-11-3
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on October 27, 1999, to receive an update on the total
compensation study.
Committee members present: Commissioners O'Leary, (Chair), Royal and Werbelow.
Excused absence: Commissioner Christian.
Consultant Paul Reagan of Dorey, Reagan & Associates, updated the Committee on
executive compensation survey results, regarding market competitiveness of the BWL's
current pay and incentive system. The objective of the compensation study is to realign
the current pay system with the labor market and performance, and to support the move
toward a process oriented organization. The strategic direction of shifting the total cash
compensation mix from fixed base to variable pay is intended to keep the BWL at the
leading edge of competitive change in the utility industry.
Following discussion, management was asked to provide specific recommendations on
variable pay for the executive staff as the pilot group, and to report back to the
Committee with suggested designs for analysis and subsequent Board review and
consideration.
Submitted by,
David O'Leary, Chair
Personnel Committee
Motion by Commissioner Christian, seconded by Commissioner Aquilina, for the
adoption of the Personnel Committee Report.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-11-1
SECOND AMENDMENT TO AMENDED AND RESTATED COAL SALES
AGREEMENT WITH COASTAL COAL COMPANY, LLC
RESOLVED, That the Board approve the Second Amendment to Amended and Restated
Coal Sales Agreement ("Agreement") with Coastal Coal Company, LLC, subject to
approval by the BWL's Legal Counsel. The amendment particulars are as follows:
Board Minutes Page 122
November 23, 1999
1. The term of the Agreement will be extended twelve (12) months, with an
expiration date of December 31, 2001.
2. The amZual volume commitment shall remain at 300,000 tons.
3. The pricing, as outlined on the attached supplemental price sheet, under the
Agreement shall be decreased twice and free from escalation during the
remainder of the contract.
4. All other major terms and conditions shall remain the same.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-11-2
FIRST AMENDMENT TO COAL SALES AGREEMENT WITH LODESTAR
ENERGY, INC.
RESOLVED, That the Board approve the First Amendment to Coal Sales Agreement
("Agreement") with Lodestar Energy, Inc., subject to approval by the BWL's Legal
Counsel. The amendment particulars are as follows:
1. The term of the Agreement will be extended six (6) months, with an expiration date
of June 30, 2000.
2. The volume commitment shall range from 35,000 to 60,000 tons.
3 The pricing, as outlined on the attached supplemental price sheet, under the
Agreement shall be held firm and free from escalation.
4 All other major terms and conditions shall remain the same.
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business
NEW BUSINESS
No new business.
Page 123 Board Minutes
November 23, 1999
GENERAL MANAGER'S REMARKS
Status Report on Green Power Bid Solicitation Process and Results. General
Manager Pandy reported that copies of RFP's for the purchase of Green Power were
issued in July, 1999, to 19 entities and only four bidders responded.
Doug Wood, Manager of System Integrity& Customer Projects, presented an overview
of the BWL's Integrated Resource Plan (IRP) completed in 1996, which recommended
development of a green power option to offer customers with strong envirommental
ideals. A customer survey in 1998 indicated that enough customers would be willing to
participate in such a program to snake it feasible. Mr. Wood reviewed the green power
option analysis and noted that Commercial Engineering submitted the best evaluated of
four green power proposals received.
A lengthy question and answer period followed with regard to the economic analysis of
the project, environmental concerns, the definition of green power and recent
congressional activity on wind power tax credits. Staff agreed to investigate and report
back on the latest developments of federal wind power reimbursements and to clarify the
definition of green power.
Staff presented the following action plan for information and Board consensus:
1. Begin negotiations with Commercial Engineering to finalize arrangements to begin
taking delivery of one megawatt of"Green Power" with a target date of September,
2000. (Must make sure they are viable, green by definition, and reliable.)
2. Market a BWL "Green Power" Program and subscribe sufficient involvement to
enable such green power purchases to be self-funded. Staff plans to solicit customer
participation in a green power program in the first quarter of 2000, and put the rate
process in motion once sufficient subscription is in place.
3. In the event that sufficient program subscription can be attained, finalize the
agreement with Commercial Engineering.
4. Establish a BWL Green Power Portfolio to initially include one megawatt of
biomass, which is methane fuel produced from cow manure at a farm in southwest
Michigan to generate one megawatt of power, enough to supply about 2,800
residential customers with half their electricity requirements.
5. Establish a Green Power rate at the BWL, which reflects all BWL green power
resources. Based on the bids received, the premium for"Green Power" would be
$5.00 to $7.50 per month for a 250-350 k)Wmonth block. This reflects about a
15%to 22% increase for the average residential customer's bill and supplies
between 50% and 65% of their energy needs.
Board Minutes
November 23, 1999 Page 124
6. After at least a year of experience in the Green Power Program, as interest and
subscription requests indicate, add to the BWL "Green Power"portfolio as
necessary. Given current availability, cost and relative size of green power projects
received to date, future projects may include a joint venture with other municipal
utilities, through the Michigan Public Power Agency, in developing wind power.
Anticipated BWL involvement includes:
• Staff plans to solicit customer participation in a green power program in the first
quarter of 2000, and put the rate process in motion once sufficient subscription is in
place. The marketing and customer sign up costs associated with this effort are
estimated to be up to $30,000. This cost would be recovered from those participating
in the program.
• Provided sufficient subscription can be obtained for an initial offering of Green Power
a "Green Rate" will be required. To meet the BWL timetable to offer such a service
in September, 2000, a rate hearing and rate approvals by the Board would have to be
completed prior to that time. April or May, 2000 is the time period estimated since
the BWL ratemaking process requires a minimum of 75 days.
• As the development of a BWL green power program expands, and the BWL moves
toward owning or building a green power supply that requires a capital investment,
Board approval would be requested.
The Board concurred with the plan
Chilled Water Project Update. General Manager Pandy handed out an outline of the
Chilled Water Project construction timeline and issues potentially affecting the timeline.
Negotiations are ongoing with Ingham County on the purchase of the proposed chilled
water facility site at 327 W. Walnut Street. Staff is continuing to negotiate with
Michigan Radio Network (a.k.a. SAGA Broadcasting Corporation) on a possible equity swap
between their property (325 S. Walnut) as part of consideration for the Michigan
Retailers Association property (221 N. Pine Street). Mr. Pandy also reported that the
Michigan Bar Association has filed suit against the City of Lansing relative to rezoning
and special land use for the chilled water facility. Discussion was held on risk assessment
matters related to the project.
Commissioner Creamer declared a possible conflict of interest with respect to property
discussions involving the Michigan Retailers Association (MRA) and the Michigan
Radio Network. He stated for the record that as a BWL Commissioner, he has not been
involved nor does he plan to participate in discussions or vote on issues pertaining to real
estate negotiations between the BWL and MRA.
Mr. Pandy further reported that customers to be served by the chilled water facility
include the future Ingham County Consolidated Courts, (2) State of Michigan facilities
currently being served by the State-owned chiller; (3) the State's new Hall of Justice,
Board Minutes
Page 125 November 23, 1999
scheduled to take service at a later phase, and (4) the office building being constructed for
State use at the former Civic Center site. The chilled water facility is being constructed
in modular 2,000-ton increments with an ultimate phase-in capacity of 12,000 tons.
Modules will be added as customer commmitments are secured.
State of Michigan Interested in Expanded Energy Services. General Manager Pandy
reported that the State of Michigan has approached the BWL to investigate the feasibility
of serving their energy needs at other locations. Possible cooling and heating cost
investments that would be required were discussed.
Lansing Business Climate Benchmarking Study Mentions Favorable Electric Rates.
General Manager Pandy handed out a summary of a Lansing Business Climate
Benchmarking Study recently conducted by the Anderson Economic Group for the
Lansing Regional Chamber of Commerce. Noteworthy in the report was Lansing's very
attractive electric rates.
BWL Advertising Campaign Update. General Manager Pandy handed out a memo
from John Strickler, dated November 17, 1999, detailing the status of the BWL
advertising campaign and the BWL's visibility in television and radio commercials. It
was noted that the Board approved additional funding in September, 1998, to support
increased brand image advertising presence in the BWL market. Mr. Pandy noted that
the customer attitude survey conducted in May, 1999, showed an increase in several
general communication perceptions.
Following discussion,the Commissioners requested benclunarking data to determine the
industry standard in advertising campaigns to understand what level of performance is
possible.
Mr. Pandy agreed to place the advertising campaign on a future Committee of the Whole
agenda to solicit the Board's input on advertising, sponsorships and to review metrics
data.
Status of State of Michigan Waterfront Redevelopment Grant Application for
Ottawa Station. General Manager reported that a letter, dated November 18, 1999, has
been received from the Michigan Economic Development Corporation(MEDC) on the
BWL's application for a grant to develop the Ottawa Power Station under the Waterfront
Redevelopment Program of the Clean Michigan Initiative. MEDC is asking for
additional information relative to how the BWL would use funding in a lesser amount
than requested and the firmness of commitments from private developers on this project.
Response is needed back to the State by December 2"d.
Report on BWL Safety Statistics. General Manager Pandy reviewed Share the Success
fiscal year-to-date (FYTD) safety ratio data as of October 31, 1999. BWL safety
statistics indicate the ratio of incidents vs. lost time accidents is better than the FYTD
Board Minutes
November 23, 1999 Page 126
goal at 15.50, Although the BWL has exceeded its goal at this point, safety remains a
priority.
Report on Electric Utility Deregulation Outlook. General Manager Pandy reported
that a compromise bill for electric utility deregulation was introduced in the Michigan
Senate. The new bill is the work of a coalition led by the Michigan Chamber of
Commerce, Consumers Energy, and American Electric Power. The BWL and other
municipal utilities also participated in the coalition and provided input. Bill Cook,
Director of System Delivery, briefed the Board on the public power ramifications in the
compromise deregulation bill. A summary of electric utility deregulation issues was
handed out for review. Mr. Cook noted that the new bill is favorable because it defines
the future of a municipally owned utility.
IBEW Local 352 Defeats Contractual Change to Share the Success. General
Manager Pandy reported that the union voted November 11, 1999, on the process
measures portion of the Share the Success (STS) program. Members voted by a margin
of 302 No to 6 YES votes. The union rejected the notion of having the processes earning a
different bonus based on STS process measures. As the result of the union vote, the STS
program is in place for Non-Bargaining unit employees only. The bargaining team is
continuing with negotiations. Management hopes to present a package for union vote by
mid-December. Linda Gardner, Director of Human Resources, noted for the record that
although all union members were notified and had the opportunity to vote on the STS
process measures question, 101 members did not participate in the vote.
Financial Condition of the BWL. General Manager Pandy updated the Commissioners
on the BWL financial condition as of October 31, 1999. He reported that management is
continuing to curtail expenses in areas of outside services and overtime; significant cuts
in overtime and in the production process have begun; and the use of outside services will
slow as the construction season winds down. Staff is exploring the possibility of rate
increases and plans to bring a rate review recommendation to the Board after the first of
the year, for both the electric and water utilities.
Chief Financial Officer Dana Tousley presented a synopsis of the budget variance
analysis and selected data. Specific indicators that provide pertinent information on the
performance of the budget were discussed.
APPA Publication on ELECTRIC UTILITY BASICS. General Manager Pandy distributed
a copy of a new publication from the American Public Power Association (APPA)
entitled, ELECTRIC UTILITY BASICS. The publication discusses how electricity is made,
who delivers it, and the changing electric utility industry.
REMARKS BY COMMISSIONERS
No remarks.
Board Minutes
Page 127 November 23, 1999
EXCUSED ABSENCES
There were no absences.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE BLIC AND ARE
SUBJECT.
WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER
Rolf Peterson, representing Primary Power Marketing, 16743 Eunice Street,East
Lansing, MI 48823,urged that a process be set up to deaf Pr Primary Peen er. H, requested
sted
an opportunity to clarify that industrial wood wasteY
uet
source is a legitimate renewable option for the City of Lansing.
Richard Vander Veen,President& CEO, Bay Windpower, LLC, 2050 Robinson Road,
Grand Rapids, MI 49506, offered to work with staff to address
exe questitended his as ista raised y the
Commissioners during discussions on green power. He
alsto
re-examine the precise economics of establishing a wndpower project in Lansing.
ADJOURNMENT
On motion by Commissioner Callen, seconded by Commissioner Christian, the meeting
adjourned at 7:35 p.m.
Is/Mary E. Sova, Secretary
Filed: December 3, 1999
Marilynn Slade, City Clerk
14:04 DEC 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *75964 PAGE: 1/10
BOARD OF WATER AND LIGHT PO Box 13007, Lansing,MI 48901
P FAX
Date: Friday, Dec 3, 1999 2:0
MmTER&LIGHT
Number of pages including 10
cover sheet:
To: City Clerk Marilynn Slade From: Mary Sova
Phone: Phone:
Fax: 377-0068 Fax phone: (517)371-6203
CC:
REMARKS: ❑ Urgent ❑ For your review ❑ Reply ASAP ❑ Please comment
Attached are the minutes of the regular meeting
ofthe Board of Water and Light Commissioners,
held November 30, 1999,for filing Nvith your office.
An original copy is being mailed today to your office.
Thank you.
14:04 DEC 03, 1999 ID: BOARD WATER & LIG TEL NO: (517) 371-6203 #75964 PAGE- 2110
Page 119
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, November 23, 1999
The Board of Commissioners met in regular session at 5:38 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, Mark A. Murray, David O'Leary, Diane R. Royal and
Judson M. Werbelow(by speakerphone). r -
_J'
Absent: None ` ' 1
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all. �-
r
APPROVAL OF MINUTES ? ry
Motion was made by Commissioner O'Leary, seconded by Commissioner Callen, to
approve the minutes of regular session held October 26, 1999.
Carried 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.
Richard Vander Veen, President& CEO of Bay Windpower, LLC, 2050 Robinson Road,
Grand Rapids, MI 49506, supports the Board of Water and Light's (BWL) proposed wind
power project. A handout was provided on the advantages of wind power to the Lansing
community.
Rolf Peterson, 16743 Eunice Street, East Lansing, MI 48823, representing Primary Power
Marketing, LLC, supports renewable green source of electricity. A flyer was handed out
describing energy marketed by Primary Power Marketing, produced from biomass fuels.
James Cliff, Policy Director, Michigan Environmental Council (MEC), 119 Pere
Marquette, Suite 2A, Lansing, MI 48912, endorses the use of electricity produced by
wind energy due to its renewable nature and because it emits no pollutants. The MEC is
willing to pay extra for electricity derived from renewable sources of energy to help spur
the development of renewable technology and to promote the renewable energy industry.
A handout was provided outlining certain MEC concerns regarding the BWL green power
proposal. He expressed concern with the definition that BWL uses for green power and
0 M-i
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Board Minutes Page 120
November 23, 1999
biomass. The Board was urged to continue to explore methods to provide cleaner energy
in the future for the benefit of customers and their children
(Commissioner Murray arrived at the meeting at 5:50 p.m.)
Mark Clevey, 222 N. Washington Square, Suite 100, Lansing, MI, supports wind power
renewable energy. He spoke of his involvement as project manager in a solar utility
interconnect demonstration project launched in Detroit, in 1984, sponsored by BWL,
Detroit Edison and Consumers Energy. Mr. Clevey noted that the project is not only
continuing, but is considered a success story among green power utility interconnect
projects in the nation. Mr. Clevey endorsed Bay Windpower's proposal and offered to
share his thoughts and observations with the BWL on the definition of green power, the
economics of wind power, and other related activities going on across the country.
Tom Stanton, 216 Huron Street Lansing, a BWL customer for 22 years, supports green
power and the BWL's efforts in exploring renewable energy options. A handout was
provided outlining various green power opportunities to consider in developing renewable
resources at low cost, while simultaneously helping customers to achieve their many
goals. He acknowledged the BWL's efforts in "putting its toe into the green-power
water," and urged the Board to jump ui all the way as quickly as possible. Mr. Stanton
expressed his appreciation to the BWL for its support in the 1999 Great Lakes Renewable
Energy Fair that took place over the summer in downtown Lansing.
COMMUNICATIONS
A letter was received from Dana Debel, Environmental Policy Specialist; Michigan United
Conservation Clubs, ui support of the bid submitted by Bay Windpower, LCC, to
construct three 1.65 MW wind generation turbines to serve over 1,500 Lansing customers.
Email in support of renewal energy was received from the following persons:
• Seth C. Murray supports wind power.
• Darren Bagley urges the prioritizing of wind power, biomass and natural gas
respectively.
• Dennis Propst suggests including wind in the mix of options and to aggressively
pursue efficiency among future green power options.
• LeRoy Harvey of Urban Options supports wind power as one of several green power
options.
The communication items were acknowledged and placed on file.
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Board Minutes
Page 121 November 23, 1999
REPORTS OF COMMITTEES
999-11-3
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on October 27, 1999, to receive an update on the total
compensation study.
Committee members present: Commissioners O'Leary, (Chair), Royal and Werbelow.
Excused absence: Commissioner Christian.
Consultant Paul Reagan of Dorey, Reagan & Associates, updated the Committee on
executive compensation survey results, regarding market competitiveness of the BWL's
current pay and incentive system. The objective of the compensation study is to realign
the current pay system with the labor market and performance, and to support the move
toward a process oriented organization. The strategic direction of shifting the total cash
compensation mix from fixed base to variable pay is intended to keep the BWL at the
leading edge of competitive change in the utility industry.
Following discussion, management was asked to provide specific recommendations on
variable pay for the executive staff as the pilot group, and to report back to the Committee
with suggested designs for analysis and subsequent Board review and consideration.
Submitted by,
David O'Leary, Chair
Personnel Committee
Motion by Commissioner Christian, seconded by Commissioner Aquilma, for the
adoption of the Personnel Committee Report.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-11-1
SECOND AMENDMENT TO AL ND D AND
NY,RESTATED COAL SALES
AGREEMENT WITH CO.
LC
RESOLVED, That the Board approve the Second Amendment to Amended and Restated
Coal Sales Agreement("Agreement") with Coastal Coal Company, LLC, subject to
approval by the BWL's Legal Counsel. The amendment particulars are as follows:
1. The term of the Agreement will be extended twelve (12)months, with an
expiration date of December 31, 2001.
2. The annual volume committnent shall remain at 300,000 tons.
P.04
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Page 122
Board Minutes
November 23, 1999
3. The pricing, as outlined on the attached supplemental price sheet, under the
Agreement shall be decreased twice and free from escalation during the
remainder of the contract.
4. All other major terms and conditions shall remain the same.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-11-2
FIRST AMENDMENT TO COAL SALES AGREEMENT WITH LODESTAR
ENERGY, INC.
RESOLVED, That the Board approve the First Amendment to Coal Sales Agreement
("Agreement'') with Lodestar Energy, Inc., subject to approval by the BWL's Legal
Counsel. The amendment particulars are as follows:
1. The terns of the Agreement will be extended six(6)months, with an expiration date
of June 30, 2000.
2. The volume commitment shall range from 35,000 to 60,000 tons.
3 The pricing, as outlined on the attached supplemental price sheet, under the
Agreement shall be held firm and free from escalation.
4 All other major terms and conditions shall remain the same.
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
Status Report on Green Power Bid Solicitation Process and Results. General
Manager Pandy reported that copies of RFP's for the purchase of Green Power were
issued in July, 1999, to 19 entities and only four bidders responded.
Sri% P.05
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Page 123 Board Minutes
November 23, 1999
Doug Wood, Manager of System Integrity& Customer Projects, presented an overview of
the BWL's Integrated Resource Plan (IRP) completed in 1996, which recommended
development of a green power option to offer customers with strong environmental ideals.
A customer survey in 1998 indicated that enough customers would be willing to
participate in such a program to make it feasible. Mr. Wood reviewed the green power
option analysis and noted that Commercial Engineering submitted the best evaluated of
four green power proposals received.
A lengthy question and answer period followed with regard to the economic analysis of
the project, environmental concerns, the definition of green power and recent
congressional activity on wind power tax credits. Staff agreed to investigate and report
back on the latest developments of federal wind power reimbursements and to clarify the
definition of green power.
Staff presented the following action plan for information and Board consensus:
1. Begin negotiations with Commercial Engineering to finalize arrangements to begin
taking delivery of one megawatt of"Green Power"with a target date of September,
2000. (Must make sure they are viable, green by definition, and reliable.)
2. Market a BWL "Green Power" Program and subscribe sufficient involvement to
enable such green power purchases to be self-funded. Staff plans to solicit customer
participation in a green power program in the first quarter of 2000, and put the rate
process in motion once sufficient subscription is in place.
3. In the event that sufficient program subscription can be attained, finalize the
agreement with Commercial Engineering.
4. Establish a BWL Green Power Portfolio to initially include one megawatt of
biomass, which is methane fuel produced from cow manure at a farm in southwest
Michigan to generate one megawatt of power, enough to supply about 2,800
residential customers with half their electricity requirements.
5. Establish a Green Power rate at the BWL, which reflects all BWL green power
resources. Based on the bids received, the premium for"Green Power" would be
$5.00 to $7.50 per month for a 250-350 kWlVmonth block. This reflects about a
15%to 22% increase for the average residential customer's bill and supplies between
50% and 65% of their energy needs.
6. Amer at least a year of experience in the Green Power Program, as interest and
subscription requests indicate, add to the BWL "Green Power" portfolio as
necessary. Given current availability, cost and relative size of green power projects
received to date, future projects may include a joint venture with other municipal
utilities, through the Michigan Public Power Agency, in developing wind power.
Anticipated BWL involvement includes:
„��_=_4000 nnoQn nG 1.10rQQ Q i Tr 9F% P.06
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Board Minutes Page 124
November 23, 1999
• Staff plans to solicit customer participation in a green power program in the first
quarter of 2000, and put the rate process in motion once sufficient subscription is in
place. The marketing and customer sign up costs associated with this effort are
estimated to be up to $30,000. This cost would be recovered from those participating
in the program.
• Provided sufficient subscription can be obtained for an initial offering of Green Power
a"Green Rate"will be required. To meet the BWL timetable to offer such a service in
September, 2000, a rate hearing and rate approvals by the Board would have to be
completed prior to that time. April or May, 2000 is the time period estimated since the
BWL ratemaking process requires a minimum of 75 days.
• As the development of a BWL green power program expands, and the BWL moves
toward owning or building a green power supply that requires a capital investment,
Board approval would be requested.
The Board concurred with the plan
Chilled Water Project Update. General Manager Pandy handed out an outline of the
Chilled Water Project construction timeline and issues potentially affecting the timeline.
Negotiations are ongoing with Ingham County on the purchase of the proposed chilled
water facility site at 327 W. Walnut Street. Staff is continuing to negotiate with Michigan
Radio Network (a.k a. SAGA Broadcasting Corporation) on a possible equity swap between their
property(325 S. Walnut) as part of consideration for the Michigan Retailers Association
property(221 N. Pine Street). Mr. Pandy also reported that the Michigan Bar Association
has filed suit against the City of Lansing relative to rezoning and special land use for the
chilled water facility. Discussion was held on risk assessment matters related to the-
project.
Commissioner Creamer declared a possible conflict of interest with respect to property
discussions involving the Michigan Retailers Association(MRA) and the Michigan Radio
Network. He stated for the record that as a BWL Commissioner, he has not been involved
nor does he plan to participate in discussions or vote on issues pertaining to real estate
negotiations between the BWL and MRA.
Mr. Pandy further reported that customers to be served by the chilled water facility include
the future Ingham County Consolidated Courts, (2) State of Michigan facilities currently
being served by the State-owned chiller; (3) the State's new Hall of Justice, scheduled to
take service at a later phase, and (4) the office building being constructed for State use at
the former Civic Center site. The chilled water facility is being constructed un modular
2,000-ton increments with an ultimate phase-in capacity of 12,000 tons. Modules will be
added as customer commitments are secured.
State of Michigan Interested in Expanded Energy Services. General Manager Pandy
reported that the State of Michigan has approached the BWL to investigate the feasibility
of serving their energy needs at other locations. Possible cooling and heating cost
investments that would be required were discussed.
----- -- .. -- nr.. P 917
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Page 125 Board Minutes
November 23, 1999
Lansing Business Climate Benchmarking Study Mentions Favorable Electric Rates.
General Manager Pandy handed out a summary of a Lansing Business Climate
Benchmarking Study recently conducted by the Anderson Economic Group for the
Lansing Regional Chamber of Commerce. Noteworthy in the report was Lansing's very
attractive electric rates.
BWL Advertising Campaign Update. General Manager Pandy handed out a memo
from John Strickler, dated November 17, 1999, detailing the status of the BWL advertising
campaign and the BWL's visibility in television and radio commercials. It was noted that
the Board approved additional funding in September, 1998, to support increased brand
image advertising presence in the BWL market. Mr. Pandy noted that the customer
attitude survey conducted in May, 1999, showed an increase in several general
communication perceptions.
Following discussion, the Commissioners requested benchmarking data to determine the
industry standard u1 advertising campaigns to understand what level of performance is
possible.
Mr. Pandy agreed to place the advertising campaign on a future Committee of the Whole
agenda to solicit the Board's input on advertising, sponsorships and to review metrics data.
Status of State of Michigan Waterfront Redevelopment Grant Application for
Ottawa Station. General Manager reported that a letter, dated November 18, 1999, has
been received from the Michigan Economic Development Corporation (MEDC) on the
BWL's application for a grant to develop the Ottawa Power Station under the Waterfront
Redevelopment Program of the Clean Michigan Initiative. MEDC is asking for additional
information relative to how the BWL would use funding in a lesser amount than requested
and the firmness of commitments from private developers on this project. Response is
needed back to the State by December Td
Report on BWL Safety Statistics. General Manager Pandy reviewed Share the Success
fiscal year-to-date (FYTD) safety ratio data as of October 31, 1999. BWL safety statistics
indicate the ratio of incidents vs. lost time accidents is better than the FYTD goal at 15.50.
Although the BWL has exceeded its goal at this point, safety remains a priority.
Report on Electric Utility Deregulation Outlook. General Manager Pandy reported that
a compromise bill for electric utility deregulation was introduced in the Michigan Senate.
The new bill is the work of a coalition led by the Michigan Chamber of Commerce,
Consumers Energy, and American Electric Power. The BWL and other municipal utilities
also participated in the coalition and provided input. Bill Cook, Director of System
Delivery, briefed the Board on the public power ramifications in the compromise
deregulation bill. A summary of electric utility deregulation issues was handed out for
review. Mr. Cook noted that the new bill is favorable because it defines the future of a
municipally owned utility.
IBEW Local 352 Defeats Contractual Change to Share the Success. General
Manager Pandy reported that the union voted November 11, 1999, on the process
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Board Minutes Page 126
November 23, 1999
measures portion of the Share the Success (STS) program. Members voted by a margin of
302 No to 6 YES votes. The union rejected the notion of having the processes earning a
different bonus based on STS process measures. As the result of the union vote, the STS
program is in place for Non-Bargaining unit employees only. The bargaining team is
continuing with negotiations. Management hopes to present a package for union vote by
mid-December. Linda Gardner, Director of Human Resources, noted for the record that
although all union members were notified and had the opportunity to vote on the STS
process measures question, 101 members did not participate in the vote.
Financial Condition of the BWL. General Manager Pandy updated the Commissioners
on the BWL financial condition as of October 31, 1999. He reported that management is
continuing to curtail expenses in areas of outside services and overtime; significant cuts in
overtime and in the production process have begun; and the use of outside services will
slow as the construction season winds down. Staff is exploring the possibility of rate
increases and plans to bring a rate review recommendation to the Board after the first of
the year, for both the electric and water utilities.
Chief Financial Officer Dana Tousley presented a synopsis of the budget variance analysis
and selected data. Specific indicators that provide pertinent information on the
performance of the budget were discussed.
APPA Publication on ELECTRIC UTILITY BASICS. General Manager Pandy distributed
a copy of a new publication from the American Public Power Association(APPA)
entitled, ELECTRIC UTILITY BASICS. The publication discusses how electricity is made,
who delivers it, and the changing electric utility industry.
REMARKS BY COMMISSIONERS
No remarks.
EXCUSED ABSENCES
There were no absences.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT
SUBJECT.
Rolf Peterson, representing Primary Power Marketing, 16743 Eunice Street, East Lansing,
MI 48823, urged that a process be set up to define green power. He requested an
opportunity to clarify that industrial wood waste used by Primary Power, as its fuel source
is a legitimate renewable option for the City of Lansing.
-- 0 MC)
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Page 127 Board Minutes
November 23, 1999
Richard Vander Veen, President& CEO, Bay Windpower, LLC, 2050 Robinson Road,
Grand Rapids, MI 49506, offered to work with staff to address the questions raised by the
Commissioners during discussions on green power. He also extended his assistance to re-
examine the precise economics of establishing a wndpower project in Lansing.
ADJOURNMENT
On motion by Commissioner Callen, seconded by Commissioner Christian, the meeting
adjourned at 7:35 p.m.
Is/Mary E. Sova, Secretary
Filed: December 3, 1999
Marilynn Slade, City Clerk
WAI tKNLIUN I ""IVILJvvv. I FLC. I-VIL-vviv rvvvLn.
1232 Haco Drive
P.O. Box 13007
Lansing,MI 48901-3007
517.371.6000
LAINSEN'13 CITY CLERiA
December 3, 1999
Ms. Marilynn Slade, City Clerk
City of Lansing — City Hail
124 West Michigan Avenue
Lansing, Michigan 48933
Dear Ms. Slade:
This is a copy of the final approved minutes of the October 26,
1999 Commissioners Meeting for the Board of Water and Light. Please
replace the current copy on file with these minutes.
Also enclosed is a copy of the November 23, 1999 minutes.
Sincere
Rose ry Sullivan
Administrative Secretary
Enclosures
Printed on recycled paper,,-::
Page 99
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING ` ` " `` jj
LANSING BOARD OF WATER AND LIGHT ! 1 ,':I'I  so
L CIT Y CLER K
Tuesday, October 26, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Mark A. Murray, Diane R. Royal and Judson M. Werbelow.
Absent: Commissioners Charles M. Creamer and David O'Leary.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner Callen, to
approve the minutes of regular session held September 28, 1999.
Carried 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
No Communications.
REPORTS OF COMMITTEES
No committee reports
Board Minutes Page 100
October 26, 1999
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-10-1
FOURTH SUPPLEMENTAL REVENUE BOND RESOLUTION
RESOLVED, That the attached Fourth Supplemental Revenue Bond Resolution
Authorizing Water Supply, Stearn and Electric Utility System Subordinate Lien Revenue
Bonds (Federally Taxable) of the City of Lansing, Michigan be approved. (See
Resolution 499-10-1 appended to these minutes on page 105.)
Discussion: General Manager Pandy noted that the taxable bonds will be used to finance
the new Central Utilities Complex to provide comprehensive utility services to the new
General Motors downtown facility at Townsend and Main Streets.
Chief Financial Officer Dana Tousley reported that the bonds will be insured through the
MBIA Insurance Corporation. The bond issue is tentatively set at $85.256 million
Commissioner Werbelow commented that he assumes all pertinent agreements with
General Motors will be fully executed prior to going to the market. Staff affirined that
the agreements will be signed before the bonds are issued.
Action: Adopted. YEAS: Commissioners Aquilina, Callen, Christian,
Murray, Royal, and Werbelow
NAYS: None
ABSENT: Commissioners Creamer and O'Leary
#99-10-2
COAL SUPPLY AGREEMENT WITH ARCH COAL SALES
RESOLVED, That the Board enter into a Coal Supply Agreement ("Agreement") with
Arch Coal Sales for the supply of Western Powder River Basin ("PRB") coal subject to
approval as to form by BWL's Legal Counsel. The Agreement particulars are as follows:
1. The term shall be for two years commencing January 1, 2000 and terminating
December 31, 2001.
2. The minimum annual quantity to be supplied is 600,000 tons.
3. The PRB coal will be supplied from Arch's Black Thunder mine with typical coal
quality specifications as follows:
Page 101 Board Minutes
October 26, 1999
Size 2" x 0"
Moisture 27.30%
Ash 5.10%
Sulfur 0.35%
Btu/lb 8,800
4. The price to be paid under this Agreement is outlined on the attached supplemental
price sheet.
The price for each year of the Agreement shall be held finn.
Motion by Commissioner Christian, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
# 99-10-3
RAIL TRANSPORTATION AGREEMENT WITH UNION PACIFIC RAILROAD
RESOLVED, That the Board enter into a Rail Transportation Agreement ("Agreement")
with the Union Pacific Railroad "UPRR") for the transport of western Powder River
Basin ("PRB") coal from the Arch Black Thunder mine to interchange with the Canadian
National Railroad in Chicago, IL subject to approval as to form by BWL's Legal
Counsel. The Agreement particulars are as follows:
1. The term shall be for two years commencing January 1, 2000 and terminating
December 31, 2001.
2. The minimum annual quantity to be transported is 600,000 tons.
3. UPRR shall provide up to three sets of 110 railcars for the transportation of PRB
coal.
4. The price to be paid under this Agreement is outlined on the attached supplemental
price sheet.
5. The price for each year of the Agreement shall be held firm.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
Board Minutes Page 102
October 26, 1999
#99-10-4
RAIL TRANSPORTATION AGREEMENT WITH CANADIAN NATIONAL
RAILROAD
RESOLVED, That the Board enter into a Rail Transportation Agreement ("Agreement")
with the Canadian National (Grand Trunk Western) Railroad ("CNNA") for the transport
of western Powder River Basin ("PRB") coal from the interchange with the Union Pacific
Railroad of Chicago, IL to BWL's Eckert and Erickson Stations subject to approval as to
form by BWL's Legal Counsel. The Agreement particulars are as follows:
The term shall be for two years commencing January 1, 2000 and terminating December
31, 2001.
1. The minimum annual quantity to be transported is 600,000 tons.
2. The price to be paid under this Agreement is outlined on the attached supplemental
price sheet.
3. The price for each year of the Agreement shall be held firm.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
DOE Performs Y2K Audit. General Manager Pandy reported that the U. S. Department
of Energy (DOE) selected the BWL and the Michigan Public Power Agency (MPPA) for
a Y2K audit as part of the DOE's ongoing Y2K readiness assessment. Based on their
evaluation, the auditors gave MPPA and the BWL operations their best Y2K readiness
rating. BWL employees Tim Palmer, Doug Bates and BESOC personnel were
recognized for their efforts in carrying out Y2K readiness and contingency planning for
the BWL and MPPA Power Pool power supply operations. Mr. Pandy also reported that
Page 103 Board Minutes
October 26, 1999
Erickson Station recently went through a rollover test and performed well, as did the
customer billing system.
Erickson Station Reheater Tube Failures. General Manager Pandy reported that
Erickson Station has experienced multiple tube failures in the reheater section of the
boiler. The failures began after the installation of EPA mandated low Nox burners, which
increased the furnace temperature causing overheating of the reheater tubes and
premature failures. The cost to purchase and install the tubes is estimated at$610,000.
In order to complete this project without increasing the overall capital budget, a couple of
projects are being deferred until the next fiscal year; namely, the installation of Erickson
Station's annunciator panel and the upgrade of Eckert Station's variable speed lift pump
motor.
Electric Deregulation Update. General Manager Pandy reported that the Public Service
Commission will look to the industry to develop and generate support for electric
restructuring legislation. A copy of proposed language and amendments to the municipal
section of the Michigan Chamber of Commerce bills was handed out for information.
Director of System Delivery & Operations Bill Cook and Kheder and Associates who are
working closely in monitoring the legislation represent the BWL. Also the Michigan
Municipal Electric Association is looking out for municipals in general.
Typical Electric Service Bills Compared with Consumers Energy. General Manager
Pandy handed out a Consumers Energy (CE) bill comparison for the quarter ending
9/30/99. He noted that BWL electric service categories are below CE as follows: (1)
residential electric: 20% to 39% (2) small commercial and industrial: 20% to 28%, (3)
large industrial: 7% to 12%. Contract rates provided by CE to certain companies are not
included in the published rates nor are they applied to the quarterly bill comparison
report.
Alliance Opportunities. General Manager Pandy updated the Board on BWL electric
service area matters, including projects under contract. He outlined possible alliance
opportunities, which the BWL may pursue. The Board engaged in lengthy discussion
regarding competitive issues. After a question and answer period, the Commissioners
gave the General Manager their consensus to proceed with caution to discuss business
opportunities with potential alliance partners.
Chiller Plant Update: The Chiller Plant Design Committee, appointed by the City
Council has selected a design similar to the Forbes Street substation on the West Side of
Lansing. A schematic drawing of the facility was circulated for the Commissioners'
review. Mr. Pandy reported that SAGA Broadcasting Corporation has filed a lawsuit
against the City of Lansing seeking a reversal of the zoning at 327 S. Walnut and also
against the BWL stating public and private nuisance.
Ottawa Station Redevelopment Update. A trip to Columbus, Ohio, to tour the Easton
Town Center is being arranged for interested parties to see a development by Steiner
Board Minutes Page 104
October 26, 1999
Associates--the developer who has special interest in pursuing the potential development
of the proposed Ottawa Power Station project. (Tour date is pending.)
REMARKS BY COMMISSIONERS
Commissioners Werbelow and Callen initiated discussion on the need for more detailed
information on the BWL's financial position, including efficiency gains and losses. It
was noted by General Manager Pandy that, recently, increases in operating costs have
exceeded increases in revenue. As a result, cash flow has not met projections. He
reported that staff is continuing to attempt to curtail costs and that rate increases may be
necessary. Lengthy discussion followed on the BWL's strategic focus to operate a
successful utility company with new project development and plamling initiatives for
growth potential and customer retention.
General Manager Pandy agreed to present a monthly report to the Board reflecting the
BWL's financial posture, as part of the regular agenda.
In response to a question from Commissioner Callen on the six-year capital expenditure
forecast, General Manager Pandy reported that the increased amount in the transmission
and distribution(T&D) portion of the forecast represents T&D upgrades, new substations
and associated 138kv transmission lines.
Commissioner Murray reported that the legislature recently amended P.A. 198 of 1974,
which includes a provision for tax abatements to increase competition in power
generation. The act provides for the exemption from certain taxes to eligible public
utilities (not owned by a local unit of government) and merchant power producers. He
noted that there is an expectation of at least two new generating facilities being brought
into the State to provide additional generating capacity to address potential shortages. He
asked for the BWL's perspective on the implications of the legislation.
General Manager Pandy stated his opinion that additional generating capacity, estimated
as high as 500 MW, would saturate the market in Michigan. Anticipated fiiture load
growths in the BWL service area indicates sufficient capacity to the years 2010 —2013,
depending on industrial loads. If merchant power producers were to locate in the State,
the BWL would evaluate the economics of participating in a purchase arrangement for a
portion of the electric generating plant's capacity.
EXCUSED ABSENCES
By Commissioner Werbelow, seconded by Commissioner Callen,that the absences of
Commissioners Creamer and O'Leary be excused.
Adopted unanimously.
Page 105 Board Minutes
October 26, 1999
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Chief Financial OfficerDana Tousley handed out a corrected sheet to a summary report
previously sent to the Board on"Defined Benefit and Defined Contribution Pension
Funds Annual Review FY 1999." He noted that the last paragraph of the sheet regarding
the Defined Contribution (DC) performance includes the following corrections: "The
total portfolio earned an average return of 8.8% in FY 1999 and 7.9% from 12/1/98, when
the DC plan started, to 6/30/98."
ADJOURNMENT
On motion by Commissioner Callen, seconded by Commissioner Aquilina, the meeting
adjourned at 6:46 p.m.
/s/Mary E. Sova, Secretary
Filed: November 1, 1999
Marilynn Slade, City Clerk
Board Minutes Page 106
October 26, 1999
Attachment
Resolution 499-10-1
(as referenced on page 100 of these Minutes)
FOURTH SUPPLEMENTAL REVENUE BOND RESOLUTION AUTHORIZING
WATER SUPPLY, STEAM AND ELECTRIC
UTILITY SYSTEM SUBORDINATE LIEN REVENUE BONDS
(FEDERALLY TAXABLE)OF THE CITY OF LANSING,MICHIGAN
Section 1. Supplemental Resolution. This Fourth Supplemental Revenue Bond Resolution
is supplemental to, and is adopted in accordance with Section 23(a)(i)of,the Bond Resolution.
Section 2. Definitions. Unless the context indicates that another meaning is intended,the
following words and terms used in this Fourth Supplemental Revenue Bond Resolution shall have the
following meanings, and any other words and terms which are defined in Act 94 or in the Bond Resolution
shall have the meanings as therein defined:
0) 'Bond Insurer"means MBIA Insurance Corporation, a New York domiciled
stock insurance company, or any successor thereto or any assignee thereof.
(ii) 'Bond Insurance"or"Policy"rneans the municipal bond insurance policy issued
by the Bond Insurer insuring the payment when due of the principal of and interest on the Series 1999B
Bonds as provided therein.
(iii) 'Bond Resolution" means the Amended And Restated Bond Resolution adopted
by the Board on October 24, 1989, as supplemented and amended from time to time.
(iv) "Holders"means Registered Owners of the Series 1999B Bonds.
(v) "Insured Bonds"means the Series 1999B Bonds.
(vi) "Senior Lien Bonds"means the Series 1989A Bonds,the Series 1989B Bonds,
the Series 1994A Bonds,the Series 1994B Bonds,the Series 1999A Bonds and any Additional Bonds to be
issued on a parity therewith.
(vii) "Series 1999B Bonds Aggregate Debt Service"for any period means, on any
date of calculation by the Board,the sum of the amounts of the debt service for such period with respect to
all Outstanding Series 1999B Bonds.
(viii) "Series 1999B Bond Aggregate Debt Service Requirement"means for any
period, as of any date of calculation,the Series 1999B Bonds Aggregate Debt Service for such period, less
any capitalized interest to be paid from the proceeds of Series 1999B Bonds.
(ix) "Series 1999B Bond Reserve Account Requirement"means one-half(1/2) of the
maximum Series 1999B Bonds Aggregate Debt Service Requirement for the then current or any future
operating year.
(x) "Series 1999B Bonds"means the Water Supply, Steam and Electric Utility
System Subordinate Lien Revenue Bonds, Series 1999B(Federally Taxable) authorized by Section 4 of
this Fourth Supplemental Revenue Bond Resolution.
(xi) "Series 1999A Bonds"means the Water Supply, Steam and Electric Utility
System Revenue Bonds, Series 1999A issued pursuant to the Bond Resolution.
Page 107
Board Minutes
October 26, 1999
(xii) "Series 1994A Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1994A issued pursuant to the Bond Resolution.
(xiii) Series 1994B Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution.
(xiv) "Series 1989A Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1989A issued pursuant to the Bond Resolution.
(xv) "Series 1989B Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1989B issued pursuant to the Bond Resolution.
(xvi) "Series 1999B Sales Resolution"means the Resolution of the Board authorizing
the sale and delivery of the Series 1999B Bonds.
(xvii) "199913 Project"means the construction and equipping of a central utilities
complex,which will provide hot water,chilled water, deionized water, compressed air and wastewater
treatment, among other utility services.
Section 3. Necessity,Estimate of Cost and Useful Life. It is determined to be necessary
for the public health, safety and welfare of the City to remodel,update and extend the life of the System by
acquiring,constructing and equipping the 1999B Project. The estimated cost of the 1999E Project is
$85,250,000 and the estimated useful life of the 1999B Project is not less than 15 years.
Section 4. Authorization of Series 1999B Bonds. To pay a portion of the cost of acquiring,
constructing and equipping the 1999B Project, including making a deposit to a reserve account,payment of
capitalized interest and payment of legal, financial and other expenses of the issuance of the Series 1999B
Bonds, the City,by and through the Board,shall borrow a sum not in excess of Ninety Million Dollars
($90,000,000), as finally detennined in the Series 1999B Sales Resolution,which sum is presently
estimated to be Eighty-Five Million Two Hundred Fifty Thousand Dollars($85,250,000),pursuant to the
provisions of Act 94.
Section 5. Bond Details, Parameters and Security. The Series 1999B Bonds shall be
designated "Water Supply, Steam And Electric Utility System Subordinate Lien Revenue Bonds,
Series 1999B(Federally Taxable),"shall be Junior Lien Bonds and the statutory lien on Net Revenues
which is hereby established and pledged to secure payment of the Series 1999B Bonds, shall be
subordinate in priority of lien to the statutory lien on the Net Revenues of the System pledged to pay the
principal of and interest on the Senior Lien Bonds. A Junior Lien Bond and Interest Redemption Fund is
established as provided for in the Bond Resolution. The Series 1999B Bonds shall be payable from the
Junior Lien Bond and Interest Redemption Fund but solely from Net Revenues and any other moneys
pledged under the Bond Resolution and shall not be a general obligation of the City.
No portion of the proceeds of the Series 1999B Bonds will be deposited in the Bond Reserve
Account established within the Redemption Fund and the Series 1999B Bonds shall not be entitled to the
benefit of nor shall the principal of or interest on the Series 1999B Bonds be paid from moneys in the
Reserve Account(s)established within the Redemption Fund;provided however, a Junior Lien Bond
Reserve Account is established hereunder within the Junior Lien Bond and Interest Redemption Fund with
respect to the Series 1999B Bonds. The City shall deposit in the Junior Lien Bond Reserve Account the
Junior Lien Bond Reserve Account Requirement. The moneys credited to the Junior Lien Bond Reserve
Account shall be used solely for the payment of the principal of,redemption premium, if any, and interest
on Series 1999B Bonds as to which there would otherwise be a default. The City's obligation to fund the
Junior Lien Bond Reserve Account as required herein may be satisfied by delivery to the Transfer Agent of
a letter of credit,surety bond or similar arrangement in form acceptable to the Bond Insurer(the "Junior
Board Minutes Page 108
October 26, 1999
Lien Bond Reserve Account Guaranty")representing the irrevocable obligation of the issuer of the Junior
Lien Bond Reserve Account Guaranty to pay to the Transfer Agent upon request made by the Transfer
Agent an amount up to the stated amount thereof for application to the Series 1999B Bonds,together with
written evidence from any Rating Agency rating the Series 1999B Bonds, in each case to the effect that
such rating agency has reviewed the proposed Junior Lien Bond Reserve Account Guaranty and that the
issuance of the Junior Lien Bond Reserve Account Guaranty or, if a Junior Lien Bond Reserve Account
Guaranty is then in effect(in whole or in part)with respect to the Junior Lien Bond Reserve Account,the
substitution of the proposed Junior Lien Bond Reserve Account Guaranty for the Junior Lien Bond Reserve
Account Guaranty then in effect,will not by itself,result in a reduction or withdrawal of its ratings on the
Series 1999B Bonds. Upon acceptance of a Junior Lien Bond Reserve Account Guaranty, any moneys
representing proceeds of the Series 1999B Bonds held in the Junior Lien Bond Reserve Account shall be
transferred to the Junior Lien Bond Redemption Fund and used to purchase or redeem outstanding
Series 1999B Bonds and the Transfer Agent shall return any previously held Junior Lien Bond Reserve
Account Guaranty to the issuer thereof for cancellation;provided that after such transfer or return,there
shall remain in the Junior Lien Bond Reserve Account moneys or Junior Lien Bond Reserve Account
Guaranties equal to the Junior Lien Bond Reserve Account Requirement. If a Junior Lien Bond Reserve
Account Guaranty is delivered contemporaneously with the delivery of the Series 1999B Bonds,the form
of guaranty shall be acceptable to the Bond Insurer and no additional written confirmation from the Rating
Agencies, other than their initial rating letters on the Series 1999B Bonds, shall be required. If at any time
it shall be necessary to use moneys or draw upon a Junior Lien Bond Reserve Account Guaranty credited
to the Junior Lien Bond Reserve Account for such payment or if the amount contained therein,together
with any Junior Lien Bond Reserve Account Guaranty are less than the Junior Lien Bond Reserve Account
Requirement,then from the Net Revenues received thereafter which are not required to be deposited(i) in
the Operation and Maintenance Fund for the expenses of administration and operation of the System, (ii) in
the Bond and Interest Redemption Fund to pay the current principal and interest requirements on Senior
Lien Bonds or to replenish any Reserve Account(s)established therein securing the Senior Lien Bonds, and
(iii) in the Junior Lien Bond and Interest Redemption Fund to pay the current principal and interest
requirements on the Series 1999B Bonds, amounts shall be made available first to pay the provider of the
Junior Lien Bond Reserve Account Guaranty pursuant to and in accordance with any financial guaranty
agreement,next, to fully reinstate the Junior Lien Bond Reserve Account Guaranty and then, to replenish
or transfer moneys, if any, in and to the Junior Lien Bond Reserve Account.
Series 1999B Bonds shall be issued in denominations of$5,000 plus increments of$1,000 and
any integral multiples thereof not exceeding the amount of the Series 1999B Bonds maturing on the same
date and shall be numbered in consecutive order of authentication from 1 upwards. The Series 1999B
Bonds shall be issued as fully registered bonds without coupons and shall have an original issuance date of
their dated date, or such other date as the Board shall approve in the Series 1999B Sales Resolution,
The Series 1999B Bonds shall bear interest at a rate or rates to be determined in the Series 1999B
Sales Resolution,not exceeding nine percent(9%)per annum and shall mature no later than July 1,2020.
Interest shall be payable on July 1,2000,or such other date as the Board shall approve in the Series 1999B
Sales Resolution, and on each July 1 and January 1 thereafter,by check drawn on the Transfer Agent and
mailed to each Registered Owner at the registered address, as shown on the registration books of the City
maintained by the Transfer Agent. Interest on the Series 1999B Bonds shall be payable to each Registered
Owner as of the 15th day of the month prior to the date on which the interest payment is due. Interest on
the Series 1999B Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. The principal of the Series 1999B Bonds shall be payable at the principal office of the Transfer
Agent upon presentation and surrender thereof,provided,however,if part of an Outstanding Series 1999B
Bond registered in the name of a securities depository company as part of a book-entry system is selected
for redemption,the securities depository company may retain the Series 1999B Bond and make an
appropriate notation on the Series 1999B Bond indicating the date and amount of the reduction in the
principal amount of the Series 1999B Bond resulting from the partial redemption,however, in the case of
the final payment of the remaining principal amount of the Series 1999B Bond,the Series 1999B Bond
shall be presented and surrendered to the Transfer Agent as a condition of payment. The aggregate
Page 109 Board Minutes
October 26, 1999
principal amount of the Series 1999B Bonds,the amount of each maturity and the designation of serial and
term bonds, if any, shall be as finally determined in the Series 1999B Sales Resolution.
The Series 1999B Bonds shall be subject to redemption as provided in the Series 1999B Sales
Resolution.
Section 6. Series 1999B Bond Proceeds. From the proceeds of the sale of the
Series 1999B Bonds,there shall be immediately deposited in the Junior Lien Bond and Interest
Redemption Fund an amount equal to the accrued interest and premium,if any,received on delivery of the
Series 1999B Bonds,together with an amount representing capitalized interest,if any, and the City shall
receive a credit equal to the amount so deposited against the amount required to be deposited in the Junior
Lien Bond and Interest Redemption Fund for payment of the next interest payments due. The remaining
proceeds of the Series 1999B Bonds shall be used to acquire a Junior Lien Bond Reserve Account
Guaranty for deposit in, or otherwise make a deposit to,the Junior Lien Bond Reserve Account established
within the Junior Lien Bond and Interest Redemption Fund in the amount of the Junior Lien Bond Reserve
Account Requirement,to pay the costs of acquiring,constructing and equipping the Series 1999B Project
and to pay the costs of issuing the Series 1999B Bonds.
Section 7. Book-Entry System- Series 1999B Bonds. Initially,one fully-registered
Series 1999B Bond for each maturity, in the aggregate amount of such maturity,will be issued in the name
of Cede&Co.,as nominee of The Depository Trust Company,for participation in the book-entry transfer
system of The Depository Trust Company. In the event the City decides to discontinue participation in the
book-entry transfer system of The Depository Trust Company(or a successor securities depository),the
City shall notify the Transfer Agent and The Depository Trust Company, in writing, and thereafter the City
shall execute and the Transfer Agent shall authenticate and deliver Series 1999B Bonds requested by the
bondholders or to a successor securities depository. In the event The Depository Trust Company
discontinues providing services as a securities depository for the Series 1999B Bonds and the City does not
designate a successor securities depository,the City shall execute and the Transfer Agent shall authenticate
and deliver Series 1999B Bonds to the bondholders.
Section 8. Bond Form. The Series 1999B Bonds shall be in substantially the following
form:
[SERIES 1999B BONDS]
UNITED STATES OF AMERICA
STATE OF MICHIGAN
INGHAM AND EATON COUNTIES
CITY OF LANSING
WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM
SUBORDINATE LIEN REVENUE BONDS, SERIES 1999B
(FEDERALLY TAXABLE)
Interest Rate Maturity Date of
Per Annum Date Original Issuance CUSIP
Board Minutes Page 1 10
October 26, 1999
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The CITY OF LANSING, Ingham and Eaton Counties, State of Michigan (the "City"),for value received,
promises to pay the Principal Amount to the Registered Owner on the Maturity Date with interest thereon
from the Date of Original Issue, or such later date to which interest has been paid, until paid at the Interest
Rate Per Annum,payable on 1,2000,and on each July 1 and January 1 thereafter until the
obligation of the City to pay the Principal Amount is satisfied. Principal of this Bond is payable at the
principal office of National City Bank of Michigan/Illinois, or such other transfer agent as the City may
hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest
payment date(the "Transfer Agent"). Interest on this Bond is payable to the registered owner of this Bond
as of the 15th day of the month next preceding the payment date as shown on the registration books of the
City kept by the Transfer Agent by check or draft mailed to the registered owner at the registered address.
The revenues of the facilities of the City for the supply and distribution of water and the generation and
distribution of electricity, steam and heat(the"System") after provision has been made for reasonable and
necessary expenses of operation,maintenance and administration of the System(the"Net Revenues"), are
irrevocably pledged and a statutory first lien thereon has been created to secure the payment of the
principal of and interest on the City of Lansing's Water Supply and Electric Utility System Revenue Bonds,
Series 1989A,its Water Supply and Electric Utility System Revenue Bonds, Series 1989B, its Water
Supply and Electric Utility System Revenue Bonds, Series 1994A and its Water Supply and Electric Utility
System Revenue Bonds, Series 1994B, its Water Supply, Steam and Electric Utility System Revenue
Bonds, Series 1999A and any additional bonds which may be issued by the City on a parity therewith
(collectively,the "Senior Lien Bonds"). The Series 1999B Bonds, of which this Bond is one, is a Junior
Lien Bond and the statutory lien on Net Revenues pledged to secure payment of the Series 1999B Bonds is
subordinate to the statutory lien on the Net Revenues pledged to pay the Senior Lien Bonds. Interest on
this Bond shall be computed on the basis of a 360-day year consisting of twelve 30-day months.
This Bond is one of a series of bonds aggregating the principal sum of$ issued pursuant to
an Amended And Restated Bond Resolution adopted by the Board of Water and Licr of the City(tile
"Board")on October 24, 1989, as supplemented from time to time, including by a Fourth Supplemental
Revenue Bond Resolution adopted by the Board on October , 1999(collectively,the "Bond
Resolution"), and under and in full compliance with the Constitution and statutes of the State of Michigan,
including specifically Act 94,Public Acts of Michigan, 1933, as amended,for the purpose of paying part
of the cost of a central utilities complex,making a deposit to a bond reserve account,paying capitalized
interest and paying the costs of issuing the bonds.
For a complete statement of the revenues from which and the conditions under which this Bond is payable,
a statement of the conditions under which additional bonds("Additional Bonds")may hereafter be issued,
the rights and limitations on the owners of the bonds and the general covenants and provisions pursuant to
which this Bond is issued,reference is made to the Bond Resolution.
Bonds of this series maturing prior to July 1, are not subject to redemption prior to their respective
dates of maturity. Bonds of this series maturing on and after July 1, , are subject to redemption
prior to maturity,at the option of the Board,at any time on and after July 1, , in whole or in part, in
the amount selected by the Board, in order of maturities selected by the Board and within a maturity by lot,
at the redemption price of par, [without premium,]plus accrued interest to the date of redemption.
Notice of the call of Bonds for redemption shall be mailed to the registered owner not less than 30 days
prior to the date fixed for redemption at the address shown on the registration books of the City. Failure to
Page 111 Board Minutes
October 26, 1999
receive such notice shall not affect the validity of the proceedings for redemption. Bonds called for
redemption shall not bear interest after the date fixed for redemption,provided funds are on hand with the
Transfer Agent to redeem the bonds called for redemption.
This Bond is a self-liquidating bond and is not a general obligation of the City or the Board and does not
constitute an indebtedness of the City or the Board within any constitutional,statutory or charter limitation,
but is payable,both as to principal and interest, solely as a Junior Lien Bond(as defined in the Bond
Resolution)from the Net Revenues of the System. The principal of and interest on this Bond are secured
by a statutory lien on the Net Revenues of the System,which lien is subordinate to the statutory lien on Net
Revenues pledged to pay principal of, and interest on,the Senior Lien Bonds. Payment of the principal of
and interest on the Series 1999B Bonds will be insured by Bond Insurance(as provided in the Bond
Resolution).
The Board has covenanted and agreed, and covenants and agrees,to fix and maintain at all times while any
bonds payable from the Net Revenues of the System shall be outstanding,such rates for service furnished
by the System as shall be sufficient to provide for payment of the principal of and interest on the bonds of
this issue and any other bonds payable from the Net Revenues as and when the same shall become due and
payable,to provide for the payment of expenses of administration and operation and such expenses for
maintenance of the System as are necessary to preserve the same in good repair and working order, and to
provide for such other expenditures and funds for the System as are required by the Bond Resolution.
This Bond is transferable only upon the registration books of the City kept by the Transfer Agent by the
Registered Owner hereof in person,or by his or her attorney duly authorized in writing,with a written
instrument of transfer satisfactory to the Transfer Agent duly executed by the Registered Owner or his or
her attorney duly authorized in writing, and thereupon a new registered bond or bonds in the same
aggregate principal amount and of the same maturity shall be issued to the transferee in exclange therefor
as provided in the Bond Resolution and upon the payment of the charges, if any,therein prescribed. The
City shall not be required to register the transfer of or exchange any Bond selected for redemption in whole
or in part, except the unredeemed portion of bonds being redeemed in part.
It is certified and recited that all acts, conditions and things required by law precedent to and in the
issuance of this Bond and the series of bonds of which this is one have been done and perfonned in regular
and due time and form as required by law,
This Bond is not valid or obligatory for any purpose until the Certificate of Authentication on this Bond
has been executed by the Transfer Agent.
IN WITNESS WHEREOF,the City of Lansing, Ingham and Eaton Counties, State of Michigan, by and
through its Board of Water and Light,has caused this Bond to be executed with the facsimile signatures of
its Chairman and its Secretary and the corporate seal of the City to be printed on this Bond.
CITY OF LANSING
By: (FACSIMILE)
Chairman
BY: (FACSIMILE)
Secretary
(Seal)
Certificate of Authentication
Board Minutes Page 112
October 26, 1999
This Bond is one of the bonds described in the within-mentioned Bond Resolution.
Transfer Agent
By:
Authorized Representative
Date of Authentication:
[Statement of Insurance
to be included with respect to the Insured Bonds only]
MBIA Insurance Corporation(the "Insurer")has issued a policy containing the following provisions, such
policy being on file at National City Bank of Michigan/Illinois,Birmingham,Michigan, as Transfer Agent.
The Bond Insurer, in consideration of the payment of the premium and subject to the terns of this policy,
hereby unconditionally and irrevocably guarantees to any owner,as hereinafter defined, of the following
described obligations,the full and complete payment required to be made by or on behalf of the Issuer to
National City Bank of Michigan/Illinois or its successor(the"Transfer Agent")of an amount equal to
(i)the principal of(either at the stated maturity or by any advancement of maturity pursuant to a mandatory
sinking fund payment) and interest on,the Obligations(as that tern is defined below) as such payments
shall become due but shall not be so paid(except that in the event of any acceleration of the due date of
such principal by reason of mandatory or optional redemption or acceleration resulting from default or
otherwise, other-than any advancement of maturity pursuant to a mandatory sinking fund payment,the
payments guaranteed hereby shall be made in such amounts and at such tirnes as such payments of
principal would have been due had there not been any such acceleration); and(ii)the reimbursement of any
such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to in clauses(i) and(ii)of the preceding
sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean:
$ City of Lansing Board of Water and Light Water Supply, Steam and Electric Utility
System Subordinate Lien Revenue Bonds, Series 1999B (Federally Taxable).
Upon receipt of telephonic or telegraphic notice,such notice subsequently confirmed in writing by
registered or certified mail, or upon receipt of written notice by registered or certified mail,by the Bond
Insurer from the Transfer Agent or any owner of an Obligation the payment of an Insured Amount for
which is then due,that such required payment has not been made,the Insurer on the due date of such
payment or within one business day after receipt of notice of such nonpayment,whichever is later,will
make a deposit of funds, in an account with State Street Bank and Trust Company,N.A.,in New York,
New York,or its successor,sufficient for the payment of any such Insured Amounts which are then due.
Upon presentation and surrender of such Obligations or presentment of such other proof of ownership of
the Obligations,together with any appropriate instruments of assignment to evidence the assignment of the
Insured Amounts due on the Obligations as are paid by the Bond Insurer,and appropriate instruments to
effect the appointment of the Bond Insurer as agent for such owners of the Obligations in any legal
proceeding related to payment of Insured Amounts on the Obligations,such instruments being in a form
satisfactory to State Street Bank and Trust Company,N.A., State Street Bank and Trust Company,N.A.
Page 113
Board Minutes
October 26, 1999
shall disburse to such owners or the Trustee payment of the Insured Amounts due on such Obligations, less
any amount held by the Trustee for the payment of such Insured Amounts and legally available therefor.
This policy does not insure against loss of any prepayment premium which may at any time be payable
with respect to any Obligation.
As used herein,the tern 'owner"shall mean the registered owner of any Obligation as indicated in the
books maintained by the Transfer Agent,the Issuer, or any designee of the Issuer for such purpose. The
tern owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the
underlying security for the Obligation.
Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street,
Annonk,New York 10504 and such service of process shall be valid and binding.
This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason
including the payment prior to maturity of the Obligations.
MBIA Insurance Corporation
ASSIGNMENT
FOR VALUE RECEIVED,the undersigned sells, assigns and transfers unto
(Please print or typewrite name and address of transferee)
the within bond and all rights thereunder, and irrevocably constitutes and appoints
attorney to transfer the within bond on the books kept for
registration thereof,with full power of substitution in the premises.
Dated:
Signature Guaranteed: NOTICE: The signature(s)to this assignment must
correspond with the name as it appears upon the face
of the within bond in every particular,without
alteration or enlargement or any change whatsoever.
Signature(s)must be guaranteed by an eligible guarantor institution participating in a Securities Transfer
Association recognized signature guaranty program. The Transfer Agent will not effect transfer of this
Bond unless the information concerning the transferee requested below is provided.
Name and Address:
PLEASE INSERT SOCIAL SECURITY
Board Minutes Page 114
October 26, 1999
NUMBER OR OTHER IDENTIFYING
NUMBER OF TRANSFEREE.
(Include information for all joint owners
if the bond is held by joint account)
(Insert number for first named transferee if held by
joint account)
Section 9. Federally Taxable. Interest on the Series 1999B Bonds shall be federally
taxable.
Section 10. Preliminary Official Statement. The preparation and distribution of a
preliminary official statement in substantially the form presented at this meeting is approved,with such
changes as the Chairperson or any Commissioner and the General Manager and Chief Financial Officer
may, in consultation with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate.
Section 11. Staff Action. The Board ratifies and confirms actions taken and filings made by
Staff necessary to effectuate the sale of the Series 1999B Bonds, including filing for an exception from
prior approval or approval with the Department of Treasury. The Chairperson, any Commissioner,the
General Manager and the Chief Financial Officer are severally authorized to execute such certificates and
other documents and to take such other actions or make such other filings as may be necessary or
convenient to effectuate the proper sale, execution and delivery of the Series 1999B Bonds.
Section 12. Bond hnsurance. The Series 1999B Bonds shall be insured by the Bond Insurer.
The Bond Insurer shall be deemed to be the Registered Owner of the Series 1999B Bonds for all purposes
under the Bond Resolution and the Act,with respect to all rights conferred upon Registered Owners, such
as the right to consent,notification,the protection and enforcement of the statutory lien,the enforcement
and compelling of performance and the application of Revenues, among others. Notwithstanding anything
herein to the contrary,the rights of the Bond Insurer under the Bond Resolution or the Act or any provision
contained herein or therein, shall be suspended during any period in which the Bond Insurer is in default in
its payment obligations under the Bond Insurance or if the Bond Insurance is no longer in effect.
Section 13. Claims on Bond Insurance. As long as the Bond Insurance shall be in full force
and effect with respect to the Insured Bonds,the Board and the Transfer Agent agree to comply with the
following provisions:
(a) In the event that, on the second Business Day, and again on the Business Day,
prior to the payment date on the Insured Bonds,the Transfer Agent has not received sufficient moneys to
pay all principal of and interest on the Insured Bonds due on the second following or following,as the case
may be, Business Day,the Transfer Agent shall immediately notify the Bond Insurer or its designee on the
same Business Day by telephone or telegraph,confinned in writing by registered or certified mail, of the
arnount of the deficiency.
(b) If the deficiency is made up in whole or in part prior to or on the payment date,
the Transfer Agent shall so notify the Bond Insurer or its designee.
(c) In addition,if the Transfer Agent has notice that any Bondholder has been
required to disgorge payments of principal or interest on the Insured Bond to a trustee in bankruptcy or
creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such Bondholder within the meaning of any applicable bankruptcy
laws,then the Transfer Agent shall notify the Bond Insurer or its designee of such fact by telephone or
telegraphic notice, confirmed in writing by registered or certified mail.
Page 115 Board Minutes
October 26, 1999
(d) The Transfer Agent is hereby irrevocably designated, appointed,directed and
authorized to act as attorney-in-fact for Holders of the Insured Bonds as follows:
(1) If and to the extent there is a deficiency in amounts required to pay
interest on the Insured Bonds,the Transfer Agent shall(a)execute and deliver to State Street Bank and
Trust Company,N.A., or its successors under the Policy(the "Insurance Paying Agent"), in form
satisfactory to the Insurance Paying Agent, an instrument appointing the Bond Insurer as agent for such
Holders in any legal proceeding related to the payment of such interest and an assignment to the Bond
Insurer of the claims for interest to which such deficiency relates and which are paid by the Bond Insurer,
(b)receives as designee of the respective Holders (and not as Transfer Agent) in accordance with the tenor
of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned,
and(c)disburse the same to such respective Holders; and
(2) If and to the extent of a deficiency in amounts required to pay principal
of the Insured Bonds,the Transfer Agent shall(a)execute and deliver to the Insurance Paying Agent in
form satisfactory to the Insurance Paying Agent an instrument appointing the Bond Insurer as agent for
such Holder in any legal proceeding relating to the payment of such principal and an assignment to the
Bond Insurer of any of the Insured Bond surrendered to the Insurance Paying Agent of so much of the
principal amount thereof as has not previously been paid or for which moneys are not held by the Transfer
Agent and available for such payment(but such assignment shall be delivered only if payment from the
Insurance Paying Agent is received), (b)receive as designee of the respective Holders(and not as Transfer
Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent,and
(c)disburse the same to such Holders.
(e) Payments with respect to claims for interest on and principal of Insured Bonds
disbursed by the Transfer Agent from proceeds of the Policy shall not be considered to discharge the
obligation of the Authority with respect to such Insured Bonds, and the Bond Insurer shall become the
owner of such unpaid Insured Bonds and claims for the interest in accordance with the tenor of the
assignment made to it under the provisions of this subsection or otherwise.
(f) Irrespective of whether any such assignment is executed and delivered,the
Issuer and the Transfer Agent hereby agree for the benefit of the Bond Insurer that:
(1) They recognize that to the extent the Bond Insurer makes payments,
directly or indirectly(as by paying through the Transfer Agent),on account of principal of or interest on
the Insured Bonds,the Bond Insurer will be subrogated to the rights of such Holders to receive the amount
of such principal and interest from the Issuer,with interest thereon as provided and solely from the sources
stated in this Indenture and the Insured Bonds; and
(2) They will accordingly pay to the Bond Insurer the amount of such
principal and interest(including principal and interest recovered under subparagraph(ii)of the first
paragraph of the Policy,which principal and interest shall be deemed past due and not to have been paid),
with interest thereon as provided in this Indenture and the Insured Bond,but only from the sources and in
the manner provided herein for the payment of principal of and interest on the Insured Bonds to Holders,
and will otherwise treat the Bond Insurer as the owner of such rights to the amount of such principal and
interest.
(g) In connection with the issuance of additional Insured Bonds,the Authority shall
deliver to the Bond Insurer a copy of the disclosure document, if any,circulated with respect to such
additional Insured Bonds.
Board Minutes Page 116
October 26, 1999
(h) Copies of any amendments made to the documents executed in connection with
the issuance of the Insured Bonds which are consented to by the Bond Insurer shall be sent to Standard&
Poor's Corporation.
W The Bond Insurer shall receive notice of the resignation or removal of the
Transfer Agent and the appointment of a successor thereto.
(j) The Bond Insurer shall receive copies of all notices required to be delivered to
Registered Owners and, on an annual basis, copies of the Board's audited financial statements and annual
budget.
Section 14. Financial Guaranty Agreement. The form of the Financial Guaranty Agreement
between the Board and the Bond Insurer presented to the Board at this meeting is approved and the
Chairperson, any other Commissioner,the General Manager and the Chief Financial Officer of the.Board
are severally authorized to execute and deliver the Financial Guaranty Agreement on behalf of the Board,
with such changes as they may, in consultation with the Staff Attorney and Bond Counsel, determine to be
necessary and appropriate.
Section 15. Junior Lien Bond Covenants. The Board confirms that the provisions and
covenants contained in the Bond Resolution with respect to defeasance, operating year, flow of funds,
priority of funds, management,charges, investments, applicable law, events of default, appointment of a
receiver and enforcement of statutory rights and the rate covenant contained in Section 9 of the Bond
Resolution, as amended by Section 5 of the Second Supplemental Revenue Bond Resolution,shall apply to
and include the Junior Lien Bonds, including the Series 1999B Bonds, in addition to the Senior Lien
Bonds,
Section 16. Surety Bond Payments. As long as a Junior Lien Bond Reserve Account
Guaranty shall be in full force and effect with respect to the Series 1999B Bonds,the Board and the
Transfer Agent shall comply with all other terns of the Junior Lien Bond Reserve Account Guaranty
issued by the provider thereof. If the Junior Lien Bond Reserve Account Guaranty is a surety bond issued
by(i)the Bond Insurer,the Transfer Agent shall be required to(i)deliver a demand for payment at least
three days prior to the date on which funds are required, and comply with the tenns of the surety bond;
(ii)no defeasance of the Series 1999B Bonds shall occur nor shall the Series 1999B Bonds be optionally
redeemed until all amounts owing the Bond Insurer under the Financial Guaranty Agreement have been
paid; and(iii)the Board and the Transfer Agent shall maintain adequate records to be periodically verified
by the Bond Insurer, of the amounts available to be drawn at any given time under the surety bond and as
to all amounts owed to the Bond Insurer under the terms of the Financial Guaranty Agreement.
Section 17. Conflicting Resolutions. All resolutions or orders, or parts thereof, in conflict
with the provisions of this Fourth Supplemental Revenue Bond Resolution are repealed.
Section 18. Severability and Paragraph Headings. If any section,paragraph, clause or
provision of this Fourth Supplemental Revenue Bond Resolution shall be held invalid,the invalidity of
such section,paragraph, clause or provision shall not affect any other provisions of this Fourth
Supplemental Revenue Bond Resolution. The paragraph headings in this Fourth Supplemental Revenue
Bond Resolution are furnished for convenience of reference only and shall not be considered to be a part of
this Fourth Supplemental Revenue Bond Resolution.
Section 19. Publication and Recordation. This Fourth Supplemental Revenue Bond
Resolution shall be published in full in The Lansing State Journal, a newspaper of general circulation in the
City of Lansing qualified under State law to publish legal notices,promptly after its adoption, and shall be
recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson
and the Secretary.
Page 117 Board Minutes
October 26, 1999
Section 20. Additional Junior Lien Bonds. The right is reserved, in accordance with the
provisions of Act 94,to issue additional bonds payable from the Net Revenues of the System which shall
be of equal standing and priority of lien to the statutory lien on Net Revenues of the System with the
Series 1999B Bonds(which lien is subordinate in priority of lien on the Net Revenues of the System
pledged to secure payment of the Senior Lien Bonds),but only for the following purposes and under the
following terms and conditions:
(a) For repairs, extensions, enlargements and improvements to the System or for the
purpose of refunding a part of any Outstanding Junior Lien Bonds(unless such partial refunding is done in
compliance with(b)below)and paying costs of issuing such Additional Junior Lien Bonds, including
deposits which may be required to be made to a junior lien bond reserve account. Junior Lien Bonds for
such purposes shall not be issued pursuant to this subparagraph(a)unless the average actual or augmented
Net Revenues of the System for the fiscal year of the System ending not more than 15 months prior to the
sale of additional Junior Lien Bonds shall be equal to at least one hundred(100%)percent of the maximum
Series 1999B Bonds Aggregate Debt Service Requirement in any current or future fiscal year on the
Outstanding Junior Lien Bonds and on the Additional Junior Lien Bonds then being issued. If the
Additional Junior Lien Bonds are to be issued in whole or in part for refunding Outstanding Junior Lien
Bonds,the maximum Aggregate Debt Service shall be determined by deducting from the principal and
interest requirements for each operating year the annual Aggregate Debt Service Requirement of any
Junior Lien Bonds to be refunded from the proceeds of the Additional Junior Lien Bonds.
Net Revenues may be augmented as follows for the purposes of this subsection(a):
(1) If the System rates, fees or charges shall be increased at or prior to the
time of authorizing the Additional Junior Lien Bonds,the Net Revenues may be augmented by an amount
which in the opinion of the Consulting Engineer will reflect the effect of the increase had the System's
billings during such time been at the increased rates.
(2) The actual Net Revenues may be augmented by the estimated increase
in Net Revenues which in the opinion of the Consulting Engineer will accrue as a result of new customers
which have not been serviced during the fiscal year described in paragraph(a)above or as a result of the
acquisition of the repairs, extensions, enlargements and improvements to the System which have been
made during or subsequent to the fiscal year described in paragraph (a)above or which will be acquired in
whole or in part from the proceeds of the Additional Junior Lien Bonds to be issued.
No Additional Junior Lien Bonds of equal standing as to the Net Revenues of the System shall be issued
pursuant to the authorization contained in subparagraphs(a)or(c)if the City shall then be in default in
making its required payments to the Operation and Maintenance Fund or the Redemption Fund.
(b) For refunding all of the Outstanding Junior Lien Bonds and paying costs of
issuing such Additional Junior Lien Bonds. For refunding a part of the Outstanding Junior Lien Bonds and
paying costs of issuing such Additional Junior Lien Bonds, if after giving effect to the refunding the
maximum amount of Aggregate Debt Service in each future fiscal year shall be less than the Aggregate
Debt Service in each future fiscal year prior to giving effect to the refunding.
Section 21. Effective Date. This Fourth Supplemental Revenue Bond Resolution shall be
effective immediately upon its adoption.
Board Minutes Page 118
October 26, 1999
Adopted and signed on the 26th day of October, 1999.
/s/Diane R. Royal /s/Mary E. Sova
Chairperson Secretary
ADOPTED: IN FAVOR: Commissioners Rosemarie E.Aquilina,Ronald C.Callen,Ernest J.
Christian,Mark A. Murray,Diane R.Royal, and Judson M. Werbelow
AGAINST: None
ABSTAIN: None
ABSENT: Commissioners Charles M. Creamer and David O'Leary
Page 84
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING; ;t
LANSING BOARD OF WATER AND LIGHT r;
Tuesday, September 28, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, David O'Leary, Diane R. Royal and Judson M.
Werbelow.
Absent: Commissioner Mark A. Murray.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner O'Leary, to
approve the minutes of regular session held August 24, 1999, and special meeting held
September 2, 1999.
Carried 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
No Communications.
REPORTS OF COMMITTEES
COMMITTEE OF THE WHOLE REPORT. The Committee of the Whole met on
Tuesday, August 24, 1999, to receive an overview of the Central Utilities Complex
project to serve the proposed new General Motors (GM) assembly plant.
Board Minutes Page 85
September 28, 1999
Present were Commissioners Ernest Christian, Mark Murray, Dave O'Leary, Diane
Royal, and Judson Werbelow. Excused absences were Commissioners Rosemarie
Aquilina, Ronald Callen, and Charles Creamer.
Staff briefed the Commissioners on the following significant aspects of the project:
• Events leading to the selection of the Board of Water and Light (BWL) and a private
entity to provide utilities services to General Motors
• Schedule and structure for the Central Utilities Complex
• Benefits of the Central Utilities Complex to the BWL
• Specific utility services to be provided
• Capacities and anticipated annual sales
• Staffing the Central Utilities Complex
• Role of the Management Coordination Committee
• Financial overview and the calendar of events for issuance of taxable revenue bonds
• Risk mitigation involving documents with the BWL and other parties.
Following a question and answer period, the Commissioners reviewed a proposed
resolution authorizing the execution of various agreements. This item is to be included in
the General Manager's Recominendations for consideration at the regular meeting on
September 28, 1999.
Submitted by,
COMMITTEE OF THE WHOLE
Motion by Commissioner Werbelow, seconded by Commissioner Christian, that the
report of the Committee of the Whole be received.
Action: Carried unanimously.
PERSONNEL COMMITTEE REPORT The Personnel Committee met on September
2, 1999, at 12 noon.
Present were Commissioners O'Leary (Chair), Christian, Royal and Werbelow.
The following topics were discussed:
Funding Post-Employment Benefits:
The implications of the following legal documents were reviewed and discussed:
(1) Second Amendment to the Defined Benefit Plan for Employees' Pensions.
(2) Retiree Benefit Plan and Trust Agreement
(3) Post-Retirement Benefit Plan for Eligible Employees
Page 86 Board Minutes
September 28 1999
The Committee gave its concurrence for staff to file the necessary documents with the
Internal Revenue Service (IRS) relative to implementing mechanisms for funding retiree
benefits. Upon approval from the IRS, the Commissioners will be asked to approve
establishing the VEBA Trust and a 401(h) subaccount of the Defined Benefit Pension
Plan.
Total Compensation:
Consultant Paul Regan of Dorey, Reagan&Associates presented an executive summary
of the BWL total compensation system. The project goal is to correct problem areas in
the current pay system design and to create a flexible market oriented system, supportive
of the B WL's processed-based organization. Current system corrections were reviewed
along with the new system design.
Health Care Insurance:
Health care consultant Frank Webster presented an interim report on the activities of the
BWL Health Care Task Force and strategies for employee health plans. The Task Force
plans to issue its findings and recommendations to the Union-Management Contract
Negotiations Team. ,
Workers' Compensation:
Chief Financial Officer Dana Tousley presented a case for remaining self-insured for
workers' compensation versus utilizing an insured plan. Staff recommendation will be
presented to the Board at the regular meeting in September.
Performance Appraisals for Three Staff Positions Reporting to the Board:
The Committee recommends the adoption of the following resolution:
#99-9-1
RESOLUTION CONCERNING PERFORMANCE APPRAISALS
WHEREAS, Performance evaluations and salary increases for the three positions
reporting directly to the Board are administered according to the BWL Wage and Salary
Plan for Non-Bargaining Unit Administrative employees; be it
RESOLVED, That the Director and General Manager, Director of Metrics and Audits,
and Corporate Secretary are eligible to receive salary increases effective as of July 1,
1999, and
RESOLVED FURTHER, That:
1. their salary ranges be increased 2.5% for Fiscal Year 1999-00 and
2. the ratings as submitted to Human Resources for the three positions reporting
to the Board be confirmed.
Director and General Manager Joseph Pandy,Jr. - Rating in the range of 2.50—4.0
Director of Metrics and Audits Kellie Willson - Rating in the range of 2.50—4.0
Corporate Secretary Mary Sova - Rating in the range of 2.50—4.0
Board Minutes Page 87
September 28, 1999
Submitted by,
David O'Leary, Chair
PERSONNEL COMMITTEE
Motion by Commissioner Creamer, seconded by Commissioner Christian, to approve the
report of the Personnel Committee, including Resolution 499-9-1.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-9-2
UTILITY SERVICES AGREEMENT WITH GENERAL MOTORS
RESOLVED, That the General Manager and the Corporate Secretary be authorized to
execute the following documents in substantially such form as presented to the Board for
final approval:
• The Utility Services Agreement
• The Participation Agreement
• The Project License Agreement
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Discussion: Staff Attorney Larry Wilhite briefed the Board on three outstanding
issues: (1) General Motors' guarantee for the bond payments on the Central Utilities
Complex(CUC) bonds, (2)parental guarantee from the alliance partners in the Utility
Services Agreement, and (3) isolation of the BWL from any liquidated damages arising
out of operation of the CUC. Mr. Wilhite indicated that the issues being negotiated are
coming to a closure.
Action: Carried unanimously.
#99-9-3
WORKERS COMPENSATION SERVICE PROVIDER CONTRACT
RESOLVED, That the BWL purchase workers compensation claims administration from
Cambridge Integrated Services Group, Inc. for the period September 1, 1999 to
September 1, 2002 on a flat fee basis for a total three year cost of$48,050. This is the
best-evaluated bid received.
RESOLVED FURTHER, That an additional three year period of claims administration
may be negotiated with Cambridge Integrated Services Group, Inc.
Page 88 Board Minutes
September 28 1999
Motion by Commissioner Werbelow, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-9-4
REVENUE BOND SERIES 1999A SALES RESOLUTION
WHEREAS, the Board previously approved the Third Supplemental Revenue Bond
Resolution authorizing its Water Supply, Steam and Electric Utility System Revenue
Bonds, Series 1999A, the proceeds of which will be used to pay for the 1999 Project,
WHEREAS, the Board has received an offer to purchase the Series 1999A Bonds
pursuant to the terms of a Bond Purchase Agreement.(the"Purchase Contract"),
submitted by Everen Securities, as representative (the "Representative") of the
Underwriters selected by the Board and identified in the Purchase Contract
("Underwriters").
NOW, THEREFORE BE IT RESOLVED BY THE COMMISSIONERS OF THE
BOARD, THAT:
1. Unless otherwise defined herein or the context indicates a contrary meaning,
capitalized terms used in this Series 1999A Sales Resolution shall have the same
meaning as in the Amended and Restated Bond Resolution, adopted on October 24,
1989, as supplemented from time to time, including the Third Supplemental Bond
Resolution, adopted by the Board on September 2, 1999 (collectively, the "Bond
Resolution").
2. The aggregate principal amount of the Series 1999A Bonds shall be $48,230,000,
maturing on July 1 in the years and amounts and bearing interest at rates set forth in
Exhibit A to this Series 1999A Sales Resolution.
3. The proposal of Everen Securities to purchase the Series 1999A Bonds at a price of
$47,830,212.20 (representing the par amount of the Bonds less a net original issue
discount of$74,235.30 less an Underwriters' discount of$325,552.50) is approved.
4. The form of the Purchase Contract submitted to the Board by the Representative on
behalf of the Underwriters is approved and the Chairperson, any other Commissioner,
the General Manager and the Chief Financial Officer of the Board are severally
authorized to execute and deliver the Purchase Contract for and on behalf of the
Board, with such changes as they may, in consultation with the Staff Attorney and
Bond Counsel, determine to be necessary or appropriate.
5. The preparation and distribution of an Official Statement with reference to the Bonds
(the "Official Statement"), in substantially the form of the Preliminary Official
Statement, is approved with such changes as the Chairperson or any Commissioner
and the General Manager and the Chief Financial Officer may, in consultation with
the Staff Attorney and Bond Counsel, determine to be necessary or appropriate. The
Board Minutes Page 89
September 28, 1999
Chairperson or any Commissioner and the General Manager are authorized to execute
the Official Statement for and on behalf of the Board.
6. The Chairperson, any Commissioner, the General Manager and the Chief Financial
Officer are severally authorized to execute an agreement in substantially the fornl
presented to the Board at this meeting, with such changes as may be necessary or
desirable and not materially adverse to the Board, in order to comply with the
Continuing Disclosure Undertaking of the Board pursuant to paragraph (13)(5) of Rule
15c2-12 adopted by the United States Securities and Exchange Commission (the "
Continuing Disclosure Agreement"). The Board covenants that it will comply with
and carry out all of the provisions of the Continuing Disclosure Agreement (see Exhibit a).
7. The form of Blanket Issuer Letter of Representations ("Letter") with The Depository
Tnist Company ("DTC")presented to the Board at this meeting is approved and the
Board ratifies and confirms any and all actions taken by Staff in connection with the
execution and delivery of the Letter to DTC (see Exhibit C attached to minutes).
8. The second sentence of Section 5 of the Third Supplemental Revenue Bond
Resolution is amended to read as follows; "Series 1999A Bonds shall be issued in
denominations of$5,000 plus increments of$1,000 and any integral multiples
thereof, not exceeding the amount of the Series 1999A Bonds maturing on the same
date and shall be numbered in consecutive order of authentication from 1 upwards."
9. This Series 1999A Sales Resolution shall be effective immediately upon adoption
/s/ /s/
Chairperson Corporate Secretary
EXHIBIT A
I. BOND DETAILS —SERIAL BONDS
Maturity Date Principal Interest
Jul 1 Amount Rate Price
2001 $1,025,000 4.10% 100.000%
2002 2,690.000 4.25 100.000
2003 1,820,000 4.40 100.000
2004 2,950,000 4.50 100.000
2005 31-075,000 4.65 100.000
2006 3,195,000 4.75 100.000
2007 3,330,000 4.85 100.000
2008 2,540,000 5.50 103.854
2009 3,680,000 5.50 103.808
2010 3,870,000 5.00 99.010
2011 4,055,000 5.10 98.689
2012 4,225,000 5.20 98.618
2013 4,435,000 5.30 98.839
2014 7,340,000 5.35 98.489
Page 90 Board Minutes
September 28 1999
II. REDEMPTION PROVISIONS
The Bonds maturing in the years July 1, 2001 —2009, inclusive, shall not be subject to
redemption prior to maturity. Bonds due on or after July 1, 2010, shall be subject to
redemption prior to maturity, at the option of the Board, in such order of maturity as the
Board may determine, and by lot within any maturity, in whole or in part, on any date on
or after July 1, 2009, at par plus accrued interest to the date fixed for redemption.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
Series 1999A Sales Resolution.
Discussion: Kevin McCanna of Speer Financial, Inc. briefed the Board on details
relative to pricing of the bonds. Mr. McCanna reported that BWL bond ratings of Aa3
and AA from Moody's and Standard & Poor's respectively were confirmed. The
excellent ratings were based on (1) Lansing's strong and stable finances, (2) the utility's
increasing role as a regional service provider, and (3) competitive rates. Rich Allen of
Everen Securities reported on the sale of the bonds. He noted that the priority of the
bonds were restricted to Michigan residents. The majority of sales and advertising efforts
were focused in the three-county service area of the BWL,with approximately $17
million of the $48 million sold locally. The Board received a copy of the Bond Purchase
Agreement between the BWL and Everen Securities for review. This document is still in
legal review.
Action: Adopted, YEAS: Commissioners Aquilina, Callen, Christian, Creamer,
O'Leary, Royal, and Werbelow.
NAYS: None
ABSENT Commissioner Murray
#99-9-5
GR.A.NTING EASEMENT IN ALAIEDON TOWNSHIP
WHEREAS, the Board of Water and Light owns property in Alaiedon Township
described as:
A parcel of land in the NW 1/4 of Section 5, T. 3 N., R. 1 W., Alaiedon
Township, Ingham County, Michigan,particularly described as follows:
Commencing at the North 1/4 corner of Section 5, T. 3 N., R. 1 W, Alaiedon
Township, Ingham County, Michigan (said 1/4 corner being recorded in L. 6, P.
228 of Ingham County Land Corner Recordation Certificates); thence along the
1/4 line S 00°35'16" E 1309.17 ft.; thence S 88°19'51" W 551.90 ft. to the Point
of Beginning of this description: thence continuing S 8899'51" W 240.00 ft.;
thence Northerly (parallel to the N-S 1/4 line of Section 5)N 00°35'16" W 377.14
ft., to the North line of land owned by the "Forsberg Family L.L.C." and known
as Alaiedon Township tax parcel number 06-05-100-047, said total tax parcel
containing 32.746 acres of land, more or less (according to township records);
thence along the North line of said tax parcel S 89°58'59"E 239.97 ft.; thence
Board Minutes Page 91
September 28, 1999
Southerly (parallel to the N-S 1/4 line of Section 5) S 00°35'16"E 370.08 ft., to
the Point of Beginning of this description. This parcel is subject to the rights of
the Ingham County Drain Commission for the "Dingman Drain", said rights
granted in a release of right of way recorded in L. 73,p. 386, Miscellaneous
Records of Ingham County, also subject to gas line easement rights of Consumer
Energy Company as retained in a"Partial Release of Easement" executed on
February 8, 1999 by Vincent D. Edwards (Consumers Energy Company Gas Field
Manager), said gas line easement encumbering the West 10 feet of the subject
property, and subject to any and all other easements and restrictions of record.
Said parcel contains 89,650 sq. ft. or 2.0581 acres of land, more or less.
WHEREAS, the Forsberg Family L.L.0 desires to acquire a 10' easement across the
southern portion of the Board's property described as:
A parcel of land in the NW '/4 of Section 5, T. 3 N., R. 1 W., Alaiedon Township,
Ingham County, Michigan,particularly described as follows: Commencing at the
North 1/4 corner of Section 5, T. 3 N., R. 1 W., Alaiedon Township, Ingham
County, Michigan(said 1/4 corner being recorded in L. 9, P. 452 of Ingham County
Land Corner Recordation Certificates); thence along the 1/4 line S 00°35'16" E
1309.17 ft.; thence S 88°19'51" W 551.90 ft. to the Point of Beginning of this
easement description: thence continuing S 88'19'51" W 240.00 ft.; thence
Northerly (parallel to the N/S 1/4 line of Section 5)N 00°35'16" W 10 ft.; thence N
88`19'51"E 240.00 ft.; thence Southerly (parallel to the N/S 1/4 line of Section 5)
S 00035'16" E 10 ft. to the Point of Beginning of this description. It is intended
that this property description describe the South 10 ft. of the parcel surveyed and
described in L. 8, PP. 542-544 of Ingham County Certified Surveys.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Commissioners of the
Board of Water and Light recommends that an easement be granted to the Forsberg
Family L.L.C., for the sum of$1.00, subject to the approval of City Council as required
under Article 2, Section 5-203.3 of the Lansing City Charter.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
#99-9-6
RELEASE OF EASEMENTS
WHEREAS, Alice R. Jessop executed a certain easement conveying and warranting to
Maxwell Haddox and Blanche Haddox, forever, such rights are recorded in Liber 295,
Page 129, in the Register of Deeds, Ingham County, Michigan, April 22, 1931;
WHEREAS, the Board of Water and Light has electrical utility easements in Maple Hill
Subdivision, Lansing Township described as: Rear and side lot lines to the distance of 2
feet, together with overhang for pole arms, are subject to an easement for necessary
Page 92 Board Minutes
September 28 1999
electric wire or telephone poles or for any utility, and ingress and egress is expressly
reserved to workmen employed thereon;
WHEREAS, Mr. Ty Patrick of 535 E. Cavanaugh Road has requested the release of the
easements for the east 2 feet of Lot 153 of Maple Hill Subdivision and the west 2 feet of
Lot 154 of Maple Hill Subdivision;
WHEREAS, the easements are not needed to continue the operations of the Board of
Water and Light.
NOW THEREFORE, BE IT RESOLVED, That the Board of Commissioners of the
Board of Water and Light release, discharge, and vacate said easements on the above
described properties and that the General Manager and Corporate Secretary be authorized
to execute the release of easements, subject to the requirement of the Lansing City
Charter. Further that the Corporate Secretary be directed to record the release of
easements with the Ingham County Register of Deeds.
This release of easements is for the remodeling of a residential home, Lots 153 and 154
of Maple Hill Subdivision, located on the north side of Cavanaugh Road east of Cedar
Street. The Board of Water and Light has no need for these easements, as electric service
is along the rear lot lines.
Motion by Commissioner Werbelow, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
#99-9-7
AMENDMENT No. 2 TO CSXT-64435 TRANSPORTATION CONTRACT
RESOLVED, that the Board approve Amendment No. 2 to CSXT-64435 Transportation
Contract ("Contract") with CSX Transportation(CSXT) 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 term of this Contract will be extended twenty-four (24) months, with an
expiration date of December 31, 2001.
2. The minimum annual volume commitment shall be changed from 90% of eastern
coal requirements to 300,000 tons.
3. CSXT shall refund to BWL $0.45 per ton on all tons over 300,000 tons of eastern
coal shipped by CSXT in each contract year.
4. Appendix B —Rates, shall be revised to reflect rail rates for the CSXT acquired
Conrail origins.
5. The rates to be effective January 1, 2000 shall be the same as those in effect on
January 1, 1999.
6. All other provisions of the Contract shall be ratified and reaffirmed.
Board Minutes Page 93
September 28, 1999
By amending this Contract with CSXT and CN, BWL will be able to continue its long-
term relationship with CSXT and CN. The amended expiration of the Contract will
coincide with the start of the Erickson Station turbine overhaul (January 1, 2002), which
may be the time frame that plant modifications are completed for a switch to 100%
Western PRB coal at Erickson Station. This amendment will provide BWL with greater
flexibility for sourcing eastern Spot coal as well as, a greater potential for lower delivered
Spot coal prices.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-9-8
SET PUBLIC HEARING TO CHANGE ELECTRIC RATE SCHEDULE
RESOLVED, that the proposed electric rate schedule listed below and detailed in the
attached proposed rate schedules be made the subject of a public hearing prior to further
consideration by the Board of Commissioners.
Page EB28 - Scheduled Curtailment Rider
FURTHER RESOLVED, that a public hearing to solicit public input on this matter be set
for Tuesday,November 23, 1999 at 5:30 p.m., in the Board of Water and Light Offices at
1232 Haco Drive. Also that the Corporate Secretary be directed to file with the City
Clerk information regarding pending changes in the rate structures on or before
September 30, 1999.
Motion by Commissioner Creamer, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
(Attachments A and B follow these minutes for details on the proposed electric rate change
pertaining to the "Scheduled Curtailment/Interruptible Service Rider')
UNFINISHED BUSINESS
POLICY ON REVENUE BOND ISSUE
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, that the
proposal on"Policy on Revenue Bond Issue"tabled at the May 25, 1999, regular
meeting, be taken from the table for consideration.
The Commissioners took no action on this motion.
Discussion: At the request of Commissioners Creamer and Callen, General Manager
Pandy briefed the Board on the evolution of the current policy on the issuance of revenue
bonds (Section 9-13—Policy on Revenue Bonds, adopted by the Board-January 9, 1979). The policy
Page 94 Board Minutes
September 28 1999
provides that any single revenue bond issue in excess of$50 million will be authorized
and issued by the Board only when the City Council has, by resolution, concurred with
the issuance of the bonds. Mr. Pandy noted that with the Board's contemplated taxable
revenue bond issue in the range of$50-$100 million to finance the Central Utilities
Complex(CUC), it is appropriate to revisit the policy. He pointed out that there is
nothing in the Revenue Bond Act or the Lansing City Charter which requires such a
policy. In the twenty years that have elapsed since 1979, inflation as measured by the
annual Consumer's Price Index has increased by 90.4%. Using this index, $50 million in
1979 would be equivalent to $95.2 million. In the spirit of cooperation, the Board's
intention to either revise or rescind this policy has been discussed with some City
Councilmembers by their Commissioner counterpart. In addition, the Board's proposed
change to the policy was provided to the City Council several weeks ago in their meeting
packet by Mayor Hollister. Following discussion as to whether a formal policy is needed,
there was consensus among the Commissioners to rescind the policy.
#99-9-9
Motion by Commissioner Werbelow, seconded by Commissioner Callen, to rescind the
current Policy on Revenue Bonds, adopted by the Board on January 9, 1979, (Section 9-13
of BWL Policy Manual).
(Note: This policy was not assigned a resolution number in 1979.)
Action: Carried unanimously.
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
Chilled Water Facility. General Manager Pandy reported that the Lansing City Council
approved the rezoning and special land use permit for 327 W. Walnut Street--the site of
the proposed chilled water plant. Mr. Pandy briefed the Board on the proposed chiller
plant plans and handed out the following informational documents for reference.
(1) His memo to City Council, dated September 27, 1999, regarding additional costs to
design, engineer, construct, operate and maintain the central chiller facility so as to
maintain an Average Sound Level not to exceed 70 decibels.
(2) City Council resolution approving the Special Land Use Permit (Resolution#438) and
Rezoning (Resolution#454), on September 27, 1999.
(3) Spreadsheets detailing the financial forecast before and after sound restrictions,
including the approximately $1.1 million added into the cost for the 70 decibels Average
Sound Level and aesthetic design considerations.
Board Minutes Page 95
September 28, 1999
Mr. Pandy reported that he has been in contact with potential chilled water customers,
including the State of Michigan and Ingham County to advise them that the sound
restrictions imposed by City Council could increase their rates due to added design costs.
The parties indicated they understood and confirmed their commitment to sign up with
the BWL for chilled water service. Mr. Pandy noted that costs in providing chilled water
service would be reviewed with the Board annually, in the similar manner that is reported
for the electric, water, and steam utilities. With respect to optional sites examined by the
BWL, Mr. Pandy noted that six alternatives had been investigated for the project,
however,none of them were feasible. Following a lengthy question and answer period,
there was consensus among the Commissioners for the project to move forward.
Chairperson Royal left the meeting at 6:35 p.m.
Motion by Commissioner Christian, seconded by Commissioner Callen, to direct staff to
proceed to develop the chilled water project.
Action: Carried unanimously.
Union Leadership Introduced. General Manager Pandy introduced the leadership of
the IBEW Local 352 Union: Max Zemer, Business Agent; Joe Davis, President; Ron
Byrnes and Eddie Rodriguez. He recognized their hard work and their leadership in the
union.
REMARKS BY COMMISSIONERS
Commissioner Callen circulated pictures taken of a converted power plant along the
harbor of Baltimore. MD.
General Manager Pandy noted that the BWL's grant application under the Clean
Michigan Initiative for waterfront redevelopment is being submitted for the Ottawa
Station project. The grant application deadline is Friday, October 1, 1999.
Commissioner Callen handed out copies of informative articles pertaining to (1) fines to
be paid by the Northeast Utilities for environmental violations, (2) Marquette, Michigan
officials are dropping the notion of selling the Board of Light and Power, and (3)the
impact of purchased power and electric price spikes in rural Minnesota.
Commissioner Creamer questioned the assumptions used in a financial impact scenario
prepared by the City of Lansing, dated August 4, 1999, on separate meters for lawn
sprinkling. He asked the General Manager to review the assumptions used in the report
and to provide data on communities with split service provisions.
Commissioner O'Leary expressed his appreciation to Councilmember Harold Leeman for
taking time to attend the Board meetings. As a matter of protocol while the Board is in
session, Commissioner O'Leary asked the Commissioners to refrain from referring to
Councilmember Leeman for the Council's position on matters being discussed.
Page 96 Board Minutes
September 28 1999
EXCUSED ABSENCES
By Commissioner Werbelow, seconded by Commissioner Creamer, that the absence of
Commissioner Murray be excused.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Max Zemer, Business Manager of IBEW Local 352, commented that members of the.
union's executive board, introduced earlier by Mr. Pandy, are also part of the negotiations
team. Mr. Zemer stated that the union is looking forward to negotiations with the
prospect that an agreement can be reached quickly to benefit the customers, the BWL,
and the employees.
EXECUTIVE SESSION
Motion by Commissioner O'Leary, seconded by Commissioner Creamer to go into
executive session to discuss potential real estate matters (6:45 p.m.).
Action: Adopted. YEAS: Commissioners Aquilina, Callen, Christian, Creamer,
O'Leary, Royal, and Werbelow.
NAYS: None
ABSENT: Commissioner Murray
The Board returned to open session at 7_15 p.m__
ADJOURNMENT
On motion by Commmissioner Werbelow, seconded by Commissioner Creamer, the
meeting adjourned at 7:17 p.m.
Is/Mary E. Sova, Secretary
Filed: October 1, 1999
Marilynn Slade, City Clerk
Board Minutes Page 97
September 28, 1999
Attachment A
NOTICE OF PUBLIC HEARING
PROPOSED ELECTRIC RATE CHANGE
BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, MICHIGAN
A Public Hearing will be held, on Tuesday,November 23, 1999 at 5:30 p.m., at the Board
of Water and Light(BWL) boardroom at 1232 Haco Drive, Lansing Michigan. Members
of the public are invited to attend. Signs directing people to the hearing room will be
posted.
PURPOSE OF THE HEARING -The Board of Water and Light solicits comments
from the public on PROPOSED ELECTRIC RATE SCHEDULES. THE PROPOSALS
being considered by the Commissioners would (1)change the Scheduled Curtailment
Rider to include Interruptible Electric Service, (2) define interruptible and curtailable
electric service, and (3) extend the rider to Large Capacity Electric Service Rate No. 8.
REASON FOR CHANGE - The proposed electric rates respond to customer requests
for more rate flexibility. The proposed electric rate changes will make BWL rates more
competitive with rates charged similar customers by other Michigan utilities.
IF YOU WANT TO BE HEARD - Comments oral or written may be submitted at the
public hearing. Mailed comments will be received until 5:00 p.m., on November 23,
1999, addressed to the Board of Water and Light, PO Box 13007, Lansing, Michigan
48901, Attention: Secretary of the Board. Comments MUST BE LIMITED TO THE
PROPOSED ELECTRIC RATE CHANGES. The hearing officer may impose time
restrictions on oral comments, depending on the number of persons wishing to be heard.
FU-R=T--HER=I-NFO-RMA=T-ION==Copies=of pr-oposed--rate-sched_u es=and=other -data-may
be picked up at the information desk on the first floor of the Board of Water and Light
Customer Service Center at 1232 Haco Drive or at the Second Floor Reception Desk on
the second floor of the Administration Building at the same address between 8:00 a.m.
and 5:00 p.m., Monday through Friday. This material will also be available at the public
hearing.
Published by order of the Board of Water and Light Commissioners.
Mary E. Sova
Corporate Secretary
Page 98 Board Minutes
September 28 1999
Attachment B
Proposed Rate Schedule
4-A 2nd Revised Sheet No, EB28
SCHEDULED CURTAILMENT/INTERRUPTIBLE SERVICE RIDER
Availability - This rider is available to customers on Primary Electric Service Rate No. 5
or Large Capacity Electric Service Rate No. 8 and any applicable future primary or
transmission service rate approved by the Commissioners. A customer desiring service
under this rider must contract to curtail or interrupt its demand by 1,000 kW or more,
upon notice by the Board of Water and Light (BWL Jay appr-a*mately 1,000 WAI ,,,.
mere. Toe am6»t deffi-ar4-d subjeet a this rider-maybe limited by the
Conditions of Curtailment/Interruption- The General Manager has authorization to
negotiate with qualifying customers as to terms and conditions of this rider, including the
total mW of curtailable or interruptible demand subject to the rider.
Definitions
Curtailed load is electric load the customer ma (the customer has the switch shed upon
notice from the BWL.
Interrupted load is electric load the customer will (the BWL has the switch) shed upon
notice from the BWL.
Adopted: Proposed Effective:
(Note: New language is underlined, and deleted language is stricken.)
EXHIBIT B RE: Res. #99-9-4
CONTINUING DISCLOSURE UNDERTAKING
In connection with the issuance and delivery of the $49,000,000* City of Lansing
Board of Water and Light (the "Board"), Water Supply, Steam and Electric Utility
System Revenue Bonds Series 1999A (the "Bonds") authorized under a resolution (the
"Resolution") adopted by the Board on September �6, 1999, amended and restated on
October 24 1989, and supplemented on October 26, 1993; January 11, 1994 and
September�8, 1999 for the benefit of the holders and beneficial owners of the Bonds, the
Board hereby undertakes and agrees as follows:
4 The Board hereby agrees, in accordance with the provisions of Rule 15c2-12 (the
ule ) promulgated by the Securities and Exchange Commission (the "SEC") pursuant
to the Securities Exchange Act of 1934, to -provide or cause to be provided to each
nationally recognized municipal securities inormation repository (` SIR") and to
the appropriate state information depository, if any, for the State of Michigan ("SID"), in
each case as designated by the SEC; in accordance with the Rule, the following Annual
Financial Information and operating data commencing with the fiscal year ended June 30,
1999:
(1) Annual Financial Information, comprised of updates of the following
tables included in the official statement of the Board relating to the Bonds (the
"Official Statement");
Official Statement Caption Heading
The Electric Utility
Tables:
Purchased Power Sales and System Losses;
Average Number and Percent of
Customers by Classification;
Ten Largest Electric Customers;
Current Monthly Electric Rates;
Electric MWH Sales and Percent
by Classification;
Electric Operating Revenues and Percent of
Revenues by Classification
T--he-Water—Utility
Tables:
Current Monthly Water Rates;
------
Average Number and Percent of
Customers by Classification;
Water Sales (1000 Cubic Feet) and
Percent Sold by Classification;
Water Operating Revenue and Percent of
Revenues by Classification;
Ten Largest Water Customers
The Steam Utility
Tables:
Monthly Steam Rates;
Average Number and Percent of
Customers by Classification;
Steam Sales (Per 1,000 Pounds) and
Preliminary, subject to change.
Percent Sold by Classification;
Steam Operating Revenues and Percent of
. Revenue by Classification; and
Ten Largest Steam Customers
Financial Information
All Tables
Debt Information
All Tables
provided, that.the information updating these tables may be provided in
such format as the Board deems most appropriate, and provided, further that if
any of the updates referred to above no longer can be provided because the
operations to which they relate have been materially tmh-an--gg�ed or discontinued, a
statement to that effect, provided by the Board to each NRMSIR then in existence
and to the SID, along with any other annual information or audited financial
statements required to be provided under the Undertaking shall satisfy the
Undertaking. To the extent available, the Board shall cause to be filed along with
the other annual information or audited financial statements operating data similar
to that which can no longer be provided.
(2) Financial statements pertaining to the Board prepared in
conformity with Generally Accepted Accounting Principles applied to
overnmental units (i.e. as subject to the provisions of the Governmental
tandards Accounting Board an subject to any express requirements of State
law),by the Board and audited by an individual or firm of independent certified
public accountants "Audited Financial Statements"); provided, however, that the
Board may without amending this Undertaking, from time to time, in order to
comply with federal or State legal requirements, modify the basis upon which its
financial statements are prepared. Notice of any such modification shall be
provided to (i either each NRMSIR or the Municipal Securities Rulemaking
Board ("MSRB") and (ii) the SID, and shall include a reference to the specific
federal or State law or regulation describing such accounting basis.
Such annual financial information and operating data described above are
expected to be provided directly by the Board but ma be pr�o_v�ided by reference
- to_subsequent olficiaLstatements o the�oarrl I - witlithe1V1RRR
(b) Such annual information and operating data described in (a)W, above and the
Audited Financial Statements will each be available on or before the Z Ot day after the
_ - en&of the=fisGa1 year,of the=Board; ov ded however—that if—the=Audited=BinanGi 1 -
Statements are not available by the 21 day aRer the end of the fiscal year, they shall be
uprovided when available, and unaudited financial statements in a format similar to the
ncial statements contained in the Official Statement shall be filed in place of the
Audited Financial Statements by such date. If the Board changes its fiscal year, the
Board shall send, or cause to be sent, notice of such change to each NRMSIR or the
MSRB, and to the SID.
(c) The Board agrees to provide or cause to be provided in a timely manner to (i)
each NRMSIR or to the MSRB and((n the SID, if any, notice of the occurrence of any of
the following events listed in (b)I i)(C) of the Rule with respect to the Bonds, if
applicable, if such event is material:
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
-2-
a
(4) unscheduled draws on credit enhancements, reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to
perform;
(6) adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(7) modifications to rights of holders of the Bonds;
(8) bond calls;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Bonds;
(11) rating changes; and
(12) any failure to provide disclosure of Annual Financial Information
and Audited Financial Statements when the same are due.
(d) The Board covenants that its determination of materiality for purposes of
(c) above will be made in conformance with federal securities laws
(e) The Board agrees to provide or cause to be provided, in a timely manner,
to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of failure by the Board to
provide the annual financial information and o crating data with respect to the Board
described in subsection (a) above on or prior �Io the dates set forth in subsection (b)
above.
(f) The undertaking pursuant to the Rule set forth herein shall terminate if the
Boards all no longer have any legal liability for any obligation relating to the repayment
of the Bonds under the Bond Resolution. The Board shall give notice to each NRMSIR
or MSRM and the SID, if any, in a timely manner if this paragraph is applicable..
(g) The Board agrees that its undertaking pursuant to the Rule set forth herein
is inters ed te—b-e_forthe_benefit—of_the—holders_of_the_Bonds,-including_alLbeneficial
owners of the Bonds, and shall be enforceable by any holder or beneficial owner of the
Bonds- provided that, the right to enforce the provisions of this Undertaking shall be
limited to a right to obtain specific enforcement of the Board's obligations hereunder and
-- an=y—failure=by the=Boar=d=to=comply=with th=e=provisions=o=f=this=lnder=taki=ng�hal-l=-not ----
constitute a default or an event of default with respect to the Bonds or under the
Resolution. For purposes of the Undertaking, "beneficial owner" means any person who
has or shares the power, directly or indirectly, to make investment decisions concerning
ownership of any Bonds (including any person holding Bonds through nominees,
depositories or other intermediaries).
(h) Notwithstanding any other provision of this Undertaking, the Board, by
resolution or ordinance authorizing such amendment or waiver may amend this
Undertaking, and any provision of this Undertaking may be waived, it.
(1) The amendment or the waiver is made in connection with a change in
circumstances that arises from a change in legal requirements, change in
law, or change in the identity, nature, or status of the Board, or type of
business conducted;
(2) This Undertaking, as amended, or the provisions, as waived would have
complied with the requirements of the Rule at the time of the rimary
offering, after taking into account any amendments or interpretations of
the Rule, as well as any change in circumstances; and
-3-
J
(3) The amendment or waiver does not materially impair the interests of the
beneficial owners of the Bonds as determined by parties unaffiliated with
the Board(such as Bond Counsel), at the time of the amendment.
Any financial information containing amended operating data or financial
information will explain in narrative form the reason for amendment and the impact of
the change in the type oI operating data or ?inancial information being provided.
(1) If a change is made to the basis on which financial statements are
prepared, the annual financial information for the year in which the change is made shall
present a comparison between the financial statements or information prepared on the
basis of the new accounting principles and those prepared on the basis of the former
accounting principles. Such comparison shall include a qualitative and, to the extent
reasonably feasible, quantitative discussion of the differences in the accounting prince les
and the imppact of the change in the accounting principles on the presentation ofpthe
financial information.
(j) The Board may, for time to time, appoint or en��ggagge a Dissemination
Agent to assist it in carrying out its obligations under this Undertaking, and may
discharge any such aggent, with or without appointing a successor Dissemination Agent.
All terms not defined herein which are defined in the Resolution shall have the meanings
herein assigned to them in the Resolution.
(k) Nothing in this Undertaking shall be deemed to prevent the Board from
disseminating any other information using the means of dissemination set forth in herein
or any other means of communication or including any other information in any Annual
Financial Information and Audited Financial Statements or notice of occurrence of a
Material Event in addition to that which is required by this Undertaking. If the Board
chooses to include anyy information form any document or notice of occurrence of a
Material Event in addition tothat which is specifically required by this Undertaking, the
Board shall have no obligation under this Undertaken to update such information or
include it in any future disclosure or notice of occurrence of a Material Event.
Dated: October 1999 _
CITY OF LANSING BOARD OF
By:
Its:
296170
-4-
EXHIBIT C RE: Res.- #99-9-4
. . D
Blanket Issuer Letter of Representations
[To be Completed by Issuer]
City of Lansing, Michigan
[Name of L=er]
September Y lb, . 19'94:::
Attention_ Underwriting Department—Eligibility
The Depository Trust Company
55 Water Street;50th Floor
New Yor1S NY 10041-0099
Ladies and-Gentlemen:
This letter sets forth our understanding with respect to al]issues (the "Securities")'that Issuer
shaIl request be made eligible for deposit.by The Depositor•Trust Company(IDTC").
To induce DTC to accept the Se=dties as eligible for deposit at DTC, and to act in accordance..
with DTCs Rules with respect to the Securities,Issuer represents to DTC that Issuer will comply
with the requirements stated in DTCs Operational Anangementr, as they may be amended from
time to time.
Very truhr yours,
�S,c�,h,�,e,_d,�unl�e, A contains statements that DTC believes
""`6""'lr descdbe DTC,the method cc v book- City of La n s i ng��ichi =an-
entry transfers off-tiiribu�-related tt
Y and through the Board of Water and Light
maers
(Iss=)
4A=boraed offices si=e)
Received and Accepted Dana W. Tousley, Chief Financial Officer
(TTewMte Name&Trde)
TBEDEPOSTTORY TRUST CoNgA_NY 1232 Haco Drive, P.O. Box 13007
(Street Address)
By Lansing; MI 48901
(may) (State) 2zp)
(517) 371-6790
(PbOae Nmnber)
c
SCHEDULE A
SAMPLE OFFERING DOCUMENT I..A-NGUAGE
DESCRIBING BOOK-ENTTRY-0NLY ISSUANCE
(Prepared by DTC—bracketed material may be applicable only to certain issues)
1. The Depository Trust Company("DTC"), New York, NY, will act as securities depository for the
securities (the"Securities"). The Securities will be issued as fully-registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully-r bQistered Security certificate will be
issued for.[each issue of] the Securities, [each] in the aggregate principal amount of such issue,and will
be deposited with DTC. [1� however, the aggregate principal amount of[any] issue exceeds S200
million, one certificate will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining pupal amount of such issue.]
2. DTC is a limited-purpose trust company organized under the New York Banking Law, a'banlmg
organization"within the meaning of the New York Banking Law, a member of the Federal Reserve
System,a"clearing corporation"within the meaning of the New York Uniform Commercial Code,and a
"clearing agency"registered purl-u t to the provisions of Section 17A of the Securities Exchange Act of
1934- DTC holds securities that its participants ("Participants") deposit with DTC. DTC also fnri es
the settlement among Participants of securities transactions, such as transfers and pledges,in deposited
securities through electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct Participants include'
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc.,the American Stock Exchange,Inc, and the National Association of Securities Dealers,
Inc Access to the DTC system is also available to others such as securities brokers and dealers,banks,
and trust companies that dear through or maintain a custocbal relationsbip with a Direct Participant,
either-directly or-indirectly-(`Indirect-Participants'),The Rules-applicable to DTC and its-Participants
are on file with the Securities and Exchange Commission.
— 3. Purchases of Securities under the DTC system must be made by or through Direct Participants,
ii receive a credit for—ht a Securities on DTC's records. The ownership interest of each actual
purchaser of each Security (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their
purchase, but Beneficial Owners are expected to receive written amfirma ions providing details of the
transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction.Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests
in Securities,except in the event that use of the book-entry system for the Securities is discontinued.
4-To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered
in the name of DTC's partnership nominee, Cede Sz Co.The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6.Redemption notices shall be sent to Cede&Co. If less than all of the Securities within an issue are
being redeemed, DTC's practice is to determine by Iot the amount of the interest of each Direct
Participant in such issue to be redeemed]
7. Neither DTC nor Cede & Co. will consent or vote with respect to Securities. under its usual
procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting riot to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus
�')•
S.Principal and interest payments on the Securities will be made to DTC. DTCs practice is to credit
Direct Participants' accounts on payable date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices,as is the case with securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of DTC, the Agent; or the,
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Issuer or the Absent, disbursement
of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participant.
[9.A Beneficial Owner shall give notice to elect to have its Securities puirhased or tendered,through
its_Participant;-to-the-[Tender/Remarketing]Ao�and-shall-effect delivery of such-Securities-by causing- ----- - __--
the Direct Participant to transfer the Partiespaut's interest in the Securities, on DTCs records, to the
[Tender/R g] Agent The requirement for physical delivery of Securities in connection with a
--demand=for -ora mandato -will Vie=deemed—satis�when flue ownership ri m
purchase- ry`Purchase
the Securities are transferred by Direct Participants on DTCs records.]
10.DTC may clisrnntinue providing its services as securities depository with respect to the Securities
at any time by giving reasonable notice to the Issuer or the Agent. Under such Vices, in the
event that a successor securities depository is not obtained, Security certificates are required to be
printed and delivered.
11.The Issuer may dedde to discontinue use of the system of book-entry transfers through DTC (or
a successor securities depository).In that event,Security certificates will be printed and delivered
M The information in this section concerning DTC and DTCs book-entry system has been obtained
from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the
accuracy thereof_
Page 84
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, September 28, 1999 i
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, David O'Leary, Diane R. Royal and Judson M.
Werbelow.
Absent: Commissioner Mark A. Murray.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner O'Leary, to
approve the minutes of regular session held August 24, 1999, and special meeting held
September 2, 1999.
Carried 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
No Communications.
REPORTS OF COMMITTEES
COMMITTEE OF THE WHOLE REPORT. The Committee of the Whole met on
Tuesday, August 24, 1999, to receive an overview of the Central Utilities Complex project
to serve the proposed new General Motors (GM) assembly plant.
Present were Commissioners Ernest Christian, Mark Murray, Dave O'Leary, Diane
Royal, and Judson Werbelow. Excused absences were Commissioners Rosemarie
Aquilina, Ronald Callen, and Charles Creamer.
OCT-02-1999 13:37 BOARD OF WATER & LIG 96% P.02
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Board Minutes Page 85
September 28, 1999
Staff briefed the Commissioners on the following significant aspects of the project:
• Events leading to the selection of the Board of Water and Light(BWL) and a private
entity to provide utilities services to General Motors
• Schedule and structure for the Central Utilities Complex
• Benefits of the Central Utilities Complex to the BWL
• Specific utility services to be provided
• Capacities and anticipated annual sales
• Staffing the Central Utilities Complex
• Role of the Management Coorduiation Committee
• Financial overview and the calendar of events for issuance of taxable revenue bonds
• Risk mitigation involving documents with the BWL and other parties.
Following a question and answer period, the Commissioners reviewed a proposed
resolution authorizing the execution of various agreements. This item is to be included in
the General Manager's Recommendations for consideration at the regular meeting on
September 28, 1999.
Submitted by,
COMMITTEE OF THE WHOLE
Motion by Commissioner Werbelow, seconded by Commissioner Christian, that the report
of the Committee of the Whole be received.
Action: Carried unanimously.
PERSONNEL COMMITTEE REPORT The Personnel Committee met on September
2, 1999, at 12 noon.
Present were Commissioners O'Leary(Chair), Christian, Royal and Werbelow.
The following topics were discussed:
Funding Post-Employment Benefits:
The implications of the followuig legal documents were reviewed and discussed:
(1) Second Amendment to the Defined Benefit Plan for Employees' Pensions.
(2) Retiree Benefit Plan and Trust Agreement
(3) Post-Retirement Benefit Plan for Eligible Employees
The Committee gave its concurrence for staff to file the necessary documents with the
Internal Revenue Service (IRS) relative to implementing mechanisms for funding retiree
benefits. Upon approval from the IRS, the Commissioners will be asked to approve
establishing the VEBA Trust and a 401(h) subaccount of the Defined Benefit Pension Plan.
13:23 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 4/16
Page 86 Board Minutes
September 28 1999
Total Compensation:
Consultant Paul Regan of Dorey, Reagan & Associates presented an executive summary
of the BWL total compensation system. The project goal is to correct problem areas in the
current pay system design and to create a flexible market oriented system, supportive of
the BWL's processed-based organization. Current system corrections were reviewed
along with the new system design.
Health Care Insurance:
Health care consultant Frank Webster presented an interim report on the activities of the
BWL Health Care Task Force and strategies for employee health plans. The Task Force
plans to issue its findings and recommendations to the Union-Management Contract
Negotiations Team.
Workers' Compensation:
Chief Financial Officer Dana Tousley presented a case for remaining self-insured for
workers' compensation versus utilizing an insured plan. Staff recommendation will be
presented to the Board at the regular meeting in September.
Performance Appraisals for Three Staff Positions Reporting to the Board:
The Committee recommends the adoption of the following resolution:
#99-9-1
RESOLUTION CONCERNING PERFORMANCE APPRAISALS
WHEREAS, Performance evaluations and salary increases for the three positions reporting
directly to the Board are administered according to the BWL Wage and Salary Plan for
Non-Bargaining Unit Administrative employees; be it
RESOLVED, That the Director and General Manager, Director of Metrics and Audits,
and Corporate Secretary are eligible to receive salary increases effective as of July 1,
1999, and
RESOLVED FURTHER, That:
1. their salary ranges be increased 2.5% for Fiscal Year 1999-00 and
2. the ratings as submitted to Human Resources for the three positions reporting
to the Board be confirmed.
Director and General Manager Joseph Pandy,Jr. - Rating in the range of 2.50—4.0
Director of Metrics and Audits Kellie Willson - Rating in the range of 2.50—4.0
Corporate Secretary Mary Sova - Rating in the range of 2.50—4.0
Submitted by,
David O'Leary, Chair
PERSONNEL COMMITTEE
Motion by Commissioner Creamer, seconded by Commissioner Christian, to approve the
report of the Personnel Committee, including Resolution 999-9-1.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
13:24 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *73656 PAGE: 5/16
Board Minutes Page 87
September 28, 1999
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-9-2
UTILITY SERVICES AGREEMENT WITH GENERAL MOTORS
RESOLVED, That the General Manager and the Corporate Secretary be authorized to
execute the following documents in substantially such form as presented to the Board for
final approval:
• The Utility Services Agreement
• The Participation Agreement
• The Project License Agreement
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Discussion: Staff Attorney Larry Wilhite briefed the Board on three outstanding
issues: (1) General Motors' guarantee for the bond payments on the Central Utilities
Complex(CUC) bonds, (2) parental guarantee from the alliance partners in the Utility
Services Agreement, and (3) isolation of the BWL from any liquidated damages arising
out of operation of the CUC. Mr. Wilhite indicated that the issues being negotiated are
coming to a closure.
Action: Carved unanimously.
#99-9-3
WORKERS COMPENSATION SERVICE PROVIDER CONTRACT
RESOLVED, That the BWL purchase workers compensation claims administration from
Cambridge Integrated Services Group, Inc. for the period September 1, 1999 to September
1, 2002 on a flat fee basis for a total three year cost of$48,050. This is the best-evaluated
bid received.
RESOLVED FURTHER, That an additional three year period of claims administration
may be negotiated with Cambridge Integrated Services Group, Inc.
Motion by Commissioner Werbelow, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
499-9-4
REVENUE BOND SERIES 1999A SALES RESOLUTION
WHEREAS, the Board previously approved the Third Supplemental Revenue Bond
Resolution authorizing its Water Supply, Steam and Electric Utility System Revenue
Bonds, Series 1999A, the proceeds of which will be used to pay for the 1999 Project,
13:24 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 6/16
Page 88 Board Minutes
September 28 1999
WHEREAS, the Board has received an offer to purchase the Series 1999A Bonds
pursuant to the terms of a Bond Purchase Agreement(the "Purchase Contract"), submitted
by Everen Securities, as representative (the"Representative") of the Underwriters selected
by the Board and identified in the Purchase Contract("Underwriters").
NOW, THEREFORE BE IT RESOLVED BY THE COMMISSIONERS OF THE
BOARD, THAT:
1. Unless otherwise defined herein or the context indicates a contrary meaning,
capitalized terms used in this Series 1999A Sales Resolution shall have the same
meaning as in the Amended and Restated Bond Resolution, adopted on October 24,
1989, as supplemented from time to time, including the Third Supplemental Bond
Resolution, adopted by the Board on September 2, 1999 (collectively, the "Bond
Resolution").
2. The aggregate principal amount of the Series 1999A Bonds shall be $48,230,000,
maturing on July 1 in the years and amounts and bearing interest at rates set forth in
Exhibit A to this Series 1999A Sales Resolution.
3. The proposal of Everen Securities to purchase the Series 1999A Bonds at a price of
$47,830,212.20 (representing the par amount of the Bonds less a net original issue
discount of$74,235.30 less an Underwriters' discount of$325,552.50) is approved.
4. The form of the Purchase Contract submitted to the Board by the Representative on
behalf of the Underwriters is approved and the Chairperson, any other Commissioner,
the General Manager and the Chief Financial Officer of the Board are severally
authorized to execute and deliver the Purchase Contract for and on behalf of the Board,
with such changes as they may, in consultation with the Staff Attorney and Bond
Counsel, determine to be necessary or appropriate.
5. The preparation and distribution of an Official Statement with reference to the Bonds
(the "Official Statement"), in substantially the form of the Preliminary Official
Statement, is approved with such changes as the Chairperson or any Commissioner
and the General Manager and the Chief Financial Officer may, in consultation with the
Staff Attorney and Bond Counsel, determine to be necessary or appropriate. The
Chairperson or any Commissioner and the General Manager are authorized to execute
the Official Statement for and on behalf of the Board.
6. The Chairperson, any Commissioner, the General Manager and the Chief Financial
Officer are severally authorized to execute an agreement in substantially the form
presented to the Board at this meeting, with such changes as may be necessary or
desirable and not materially adverse to the Board, in order to comply with the
Continuing Disclosure Undertaking of the Board pursuant to paragraph (13)(5) of Rule
15c2-12 adopted by the United States Securities and Exchange Commission (the "
Continuing Disclosure Agreement"). The Board covenants that it will comply with
and carry out all of the provisions of the Continuing Disclosure Agreement(see Exhibit B).
7. The form of Blanket Issuer Letter of Representations ("Letter") with The Depository
Trust Company("DTC") presented to the Board at this meeting is approved and the
Board ratifies and confirms any and all actions taken by Staff in connection with the
execution and delivery of the Letter to DTC (see Exhibit C attached to minutes).
13:25 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 7/16
Board Minutes Page 89
September 28, 1999
8. The second sentence of Section 5 of the Third Supplemental Revenue Bond Resolution
is amended to read as follows: "Series 1999A Bonds shall be issued in denominations
of$5,000 plus increments of$1,000 and any integral multiples thereof, not exceeding
the amount of the Series 1999A Bonds maturing on the same date and shall be
numbered in consecutive order of authentication from 1 upwards."
9. This Series 1999A Sales Resolution shall be effective immediately upon adoption
/s/ /s/
Chairperson Corporate Secretary
EXHIBIT A
I. BOND DETAILS — SERIAL BONDS
Maturity Date Principal Interest
(July 1) Amount Rate Price
2001 $1,025,000 4.10% 100.000%
2002 2,690.000 4.25 100.000
2003 1,820,000 4.40 100.000
2004 2,950,000 4.50 100.000
2005 3,075,000 4.65 100.000
2006 3,195,000 4.75 100.000
2007 3,330,000 4.85 100.000
2008 2,540,000 5.50 103.854
2009 3,680,000 5.50 103.808
2010 3,870,000 5.00 99.010
2011 4,055,000 5.10 98.689
2012 4,225,000 5.20 98.618
2013 4,435,000 5.30 98.839
2014 7,340,000 5.35 98.489
II. REDEMPTION PROVISIONS
The Bonds maturing in the years July 1, 2001 — 2009, inclusive, shall not be subject to
redemption prior to maturity. Bonds due on or after July 1, 2010, shall be subject to
redemption prior to maturity, at the option of the Board, in such order of maturity as the
Board may determine, and by lot within any maturity, in whole or in part; on any date on
or after July 1, 2009, at par plus accrued interest to the date fixed for redemption.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
Series 1999A Sales Resolution.
Discussion: Kevin McCanna of Speer Financial, Inc. briefed the Board on details relative
to pricing of the bonds. Mr. McCanna reported that BWL bond ratings of A2 and AA
from Moody's and Standard & Poor's respectively were confirmed. The excellent ratings
were based on(1) Lansuig's strong and stable finances, (2)the utility's increasing role as a
regional service provider, and (3) competitive rates. Rich Allen of Everen Securities
reported on the sale of the bonds. He noted that the priority of the bonds were restricted to
Michigan residents. The majority of sales and advertising efforts were focused in the
three-county service area of the BWL, with approximately $17 million of the $48 million
13:26 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 8/16
Page 90 Board Minutes
September 28 1999
sold locally. The Board received a copy of the Bond Purchase Agreement between the
BWL and Everen Securities for review. This document is still in legal review.
Action: Adopted. YEAS: Commissioners Aquilina, Callen, Christian, Creamer,
O'Leary, Royal, and Werbelow.
NAYS: None
ABSENT Commissioner Murray
#99-9-5
GRANTING EASEMENT IN ALAIEDON TOWNSHIP
WHEREAS, the Board of Water and Light owns property in Alaiedon Township
described as:
A parcel of land in the NW 1/4 of Section 5, T. 3 N., R. 1 W., Alaiedon
Township, Ingham County, Michigan, particularly described as follows:
Commencing at the North 1/4 corner of Section 5, T. 3 N., R. 1 W, Alaiedon
Township, Ingham County, Michigan (said 1/4 corner being recorded in L. 6, P.
228 of Ingham County Land Corner Recordation Certificates); thence along the 1/4
line S 00°35'16"E 1309.17 ft.; thence S 88°19'51"W 551.90 ft. to the Point of
Beginning of this description: thence continuing S 88°19'51"W 240.00 ft.; thence
Northerly(parallel to the N-S 1/4 line of Section 5)N 00°35'16"W 377.14 ft., to
the North line of land owned by the"Forsberg Family L.L.C."and known as
Alaiedon Township tax parcel number 06-05-100-047, said total tax parcel
containing 32.746 acres of land, more or less (according to township records);
thence along the North line of said tax parcel S 89°58'59" E 239.97 ft.; thence
Southerly(parallel to the N-S 1/4 line of Section 5) S 00°35'16" E 370.08 ft., to
the Point of Beginning of this description. This parcel is subject to the rights of the
Ingham County Drain Commission for the "Dingman Drain", said rights granted in
a release of right of way recorded in L. 73, p. 386, Miscellaneous Records of
Ingham County, also subject to gas line easement rights of Consumer Energy
Company as retained in a "Partial Release of Easement" executed on February 8,
1999 by Vincent D. Edwards (Consumers Energy Company Gas Field Manager),
said gas line easement encumbering the West 10 feet of the subject property, and
subject to any and all other easements and restrictions of record. Said parcel
contains 89,650 sq. ft. or 2.0581 acres of land, more or less.
WHEREAS, the Forsberg Family L.L.0 desires to acquire a 10' easement across the
southern portion of the Board's property described as:
A parcel of land in the NW '/4 of Section 5, T. 3 N., R. 1 W., Alaiedon Township,
Ingham County, Michigan, particularly described as follows: Commencing at the
North '/4 corner of Section 5, T. 3 N., R. 1 W., Alaiedon Township, Ingham
County, Michigan(said '/4 corner being recorded in L. 9, P. 452 of Ingham County
Land Corner Recordation Certificates); thence along the 1/4 line S 00°35'16" E
1309.17 ft.; thence S 88'19'51"W 551.90 ft. to the Point of Beginning of this
easement description: thence continuing S 88'19'51"W 240.00 ft.; thence
Northerly (parallel to the N/S 1/4 line of Section 5) N 00°35'16"W 10 ft.; thence N
13'.27 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 9/16
Board Minutes Page 91
September 28, 1999
88019'51" E 240.00 ft.; thence Southerly(parallel to the N/S '/a line of Section 5)
S 00035'16" E 10 ft. to the Point of Beginning of this description. It is intended
that this property description describe the South 10 ft. of the parcel surveyed and
described in L. 8, PP. 542-544 of Ingham County Certified Surveys.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Commissioners of the
Board of Water and Light recommends that an easement be granted to the Forsberg Family
L.L.C., for the sum of$1.00, subject to the approval of City Council as required under
Article 2, Section 5-203.3 of the Lansing City Charter.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
#99-9-6
RELEASE OF EASEMENTS
WHEREAS, Alice R. Jessop executed a certain easement conveying and warranting to
Maxwell Haddox and Blanche Haddox, forever, such rights are recorded in Liber 295,
Page 129, in the Register of Deeds, Ingham County, Michigan, April 22, 1931;
WHEREAS, the Board of Water and Light has electrical utility easements in Maple Hill
Subdivision, Lansing Township described as: Rear and side lot lines to the distance of 2
feet, together with overhang for pole arms, are subject to an easement for necessary
electric wire or telephone poles or for any utility, and ingress and egress is expressly
reserved to workmen employed thereon;
WHEREAS, Mr. Ty Patrick of 535 E. Cavanaugh Road has requested the release of the
easements for the east 2 feet of Lot 153 of Maple Hill Subdivision and the west 2 feet of
Lot 154 of Maple Hill Subdivision;
WHEREAS, the easements are not needed to continue the operations of the Board of
Water and Light.
NOW THEREFORE, BE IT RESOLVED, That the Board of Commissioners of the
Board of Water and Light release, discharge, and vacate said easements on the above
described properties and that the General Manager and Corporate Secretary be authorized
to execute the release of easements, subject to the requirement of the Lansing City
Charter. Further that the Corporate Secretary be directed to record the release of
easements with the Ingham County Register of Deeds.
This release of easements is for the remodeling of a residential home, Lots 153 and 154 of
Maple Hill Subdivision, located on the north side of Cavanaugh Road east of Cedar Street.
The Board of Water and Light has no need for these easements, as electric service is along
the rear lot lines.
Motion by Commissioner Werbelow, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
13:2e OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 10/16
Page 92 Board Minutes
September 28 1999
#99-9-7
AMENDMENT No. 2 TO CSXT-64435 TRANSPORTATION CONTRACT
RESOLVED, that the Board approve Amendment No. 2 to CSXT-64435 Transportation
Contract("Contract") with CSX Transportation(CSXT) 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 term of this Contract will be extended twenty-four(24)months, with an
expiration date of December 31, 2001.
2. The minimum annual volume commitment shall be changed from 90% of eastern
coal requirements to 300,000 tons.
3. CSXT shall refund to BWL $0.45 per ton on all tons over 300,000 tons of eastern
coal shipped by CSXT in each contract year.
4. Appendix B—Rates, shall be revised to reflect rail rates for the CSXT acquired
Conrail origins.
5. The rates to be effective January 1, 2000 shall be the same as those in effect on
January 1, 1999.
6. All other provisions of the Contract shall be ratified and reaffirmed.
By amending this Contract with CSXT and CN, BWL will be able to continue its long-
term relationship with CSXT and CN. The amended expiration of the Contract will
coincide with the start of the Erickson Station turbine overhaul (January 1, 2002), which
may be the time frame that plant modifications are completed for a switch to 100%
Western PRB coal at Erickson Station. This amendment will provide BWL with greater
flexibility for sourcing eastern Spot coal as well as, a greater potential for lower delivered
Spot coal prices.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-9-8
SET PUBLIC HEARING TO CHANGE ELECTRIC RATE SCHEDULE
RESOLVED, that the proposed electric rate schedule listed below and detailed in the
attached proposed rate schedules be made the subject of a public hearing prior to further
consideration by the Board of Commissioners.
Page EB28 - Scheduled Curtailment Rider
FURTHER RESOLVED, that a public hearing to solicit public input on this matter be set
for Tuesday, November 23, 1999 at 5:30 p.m., in the Board of Water and Light Offices at
1232 Haco Drive. Also that the Corporate Secretary be directed to file with the City Clerk
information regarding pending changes in the rate structures on or before September 30,
1999.
13:29 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 11/16
Board Minutes Page 93
September 28, 1999
Motion by Commissioner Creamer, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
(Attachments A and B follow these minutes for details on the proposed electric rate change
pertaining to the "Scheduled Curtailment/Interruptible Service Rider')
UNFINISHED BUSINESS
POLICY ON REVENUE BOND ISSUE
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, that the
proposal on"Policy on Revenue Bond Issue"tabled at the May 25, 1999, regular meeting,
be taken from the table for consideration.
The Commissioners took no action on this motion
Discussion: At the request of Commissioners Creamer and Callen, General Manager
Pandy briefed the Board on the evolution of the current policy on the issuance of revenue
bonds (Section 9-13—Policy on Revenue Bonds, adopted by the Board-January 9, 1979). The policy
provides that any single revenue bond issue in excess of$50 million will be authorized and
issued by the Board only when the City Council has, by resolution, concurred with the
issuance of the bonds. Mr. Pandy noted that with the Board's contemplated taxable
revenue bond issue in the range of$50-$100 million to finance the Central Utilities
Complex(CUC), it is appropriate to revisit the policy. He pointed out that there is nothing
in the Revenue Bond Act or the Lansing City Charter which requires such a policy. In the
twenty years that have elapsed since 1979, inflation as measured by the annual
Consumer's Price Index has increased by 90.4%. Using this index, $50 million in 1979
would be equivalent to $95.2 million. In the spirit of cooperation, the Board's intention to
either revise or rescind this policy has been discussed with some City Councilmembers by
their Commissioner counterpart. In addition, the Board's proposed change to the policy
was provided to the City Council several weeks ago in their meeting packet by Mayor
Hollister. Following discussion as to whether a formal policy is needed, there was
consensus among the Commissioners to rescind the policy.
#99-9-9
Motion by Commissioner Werbelow, seconded by Commissioner Callen, to rescind the
current Policy on Revenue Bonds, adopted by the Board on January 9, 1979, (Section 9-13 of
Bn Policy Manual).
(Note: This policy was not assigned a resolution number in 1979.)
Action: Carried unanimously.
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
13:29 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *73656 PAGE: 12/16
Page 94 Board Minutes
September 28 1999
Chilled Water Facility. General Manager Pandy reported that the Lansing City Council
approved the rezoning and special land use permit for 327 W. Walnut Street--the site of
the proposed chilled water plant. Mr. Pandy briefed the Board on the proposed chiller
plant plans and handed out the following informational documents for reference.
(1) His memo to City Council, dated September 27, 1999, regarding additional costs to
design, engineer, construct, operate and maintain the central chiller facility so as to
maintain an Average Sound Level not to exceed 70 decibels.
(2) City Council resolution approving the Special Land Use Permit(Resolution#438) and
Rezoning (Resolution #454), on September 27, 1999.
(3) Spreadsheets detailing the financial forecast before and after sound restrictions,
including the approximately $1.1 million added into the cost for the 70 decibels Average
Sound Level and aesthetic design considerations.
Mr. Pandy reported that he has been in contact with potential chilled water customers,
including the State of Michigan and Ingham County to advise them that the sound
restrictions unposed by City Council could increase their rates due to added design costs.
The parties indicated they understood and confirmed their commitment to sign up with the
BWL for chilled water service. Mr. Pandy noted that costs in providing chilled water
service would be reviewed with the Board annually, in the similar manner that is reported
for the electric, water, and steam utilities. With respect to optional sites examined by the
BWL, Mr. Pandy noted that six alternatives had been investigated for the project, however,
none of them were feasible. Following a lengthy question and answer period, there was
consensus among the Commissioners for the project to move forward.
Chairperson Royal left the meeting at 6:35 p.m.
Motion by Commissioner Christian, seconded by Commissioner Callen, to direct staff to
proceed to develop the chilled water project.
Action: Carried unanimously.
Union Leadership Introduced. General Manager Pandy introduced the leadership of the
IBEW Local 352 Union: Max Zemer, Business Agent, Joe Davis, President, Ron Byrnes
and Eddie Rodriguez. He recognized their hard work and their leadership in the union.
RE1%1ARKS BY COMMISSIONERS
Commissioner Callen circulated pictures taken of a converted power plant along the
harbor of Baltimore. MD.
General Manager Pandy noted that the BWL's grant application under the Clean Michigan
Initiative for waterfront redevelopment is being submitted for the Ottawa Station project.
The grant application deadline is Friday, October 1, 1999.
Commissioner Callen handed out copies of informative articles pertaining to (1) fines to be
paid by the Northeast Utilities for environmental violations, (2) Marquette, Michigan
13:30 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 13/16
Board Minutes Page 95
September 28, 1999
officials are dropping the notion of selluig the Board of Light and Power, and (3) the
impact of purchased power and electric price spikes in rural Minnesota.
Commissioner Creamer questioned the assumptions used in a financial impact scenario
prepared by the City of Lansing, dated August 4, 1999, on separate meters for lawn
sprinkling. He asked the General Manager to review the assumptions used in the report
and to provide data on communities with split service provisions.
Commissioner O'Leary expressed his appreciation to Councilmember Harold Leeman for
taking time to attend the Board meetings. As a matter of protocol while the Board is in
session, Commissioner O'Leary asked the Commissioners to refrain from referring to
Councilmember Leeman for the Council's position on matters being discussed.
EXCUSED ABSENCES
By Commissioner Werbelow, seconded by Commissioner Creamer, that the absence of
Commissioner Murray be excused.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT
SUBJECT.
Max Zemer, Business Manager of IBEW Local 352, commented that members of the
union's executive board, introduced earlier by Mr. Pandy, are also part of the negotiations
team. Mr. Zeiner stated that the union is looking forward to negotiations with the prospect
that an agreement can be reached quickly to benefit the customers, the BWL, and the
employees.
EXECUTIVE SESSION
Motion by Commissioner O'Leary, seconded by Commissioner Creamer to go into
executive session to discuss potential real estate matters (6:45 p.m.).
Action: Adopted. YEAS: Commissioners Aquilina, Callen, Christian, Creamer,
O'Leary, Royal, and Werbelow.
NAYS: None
ABSENT: Commissioner Murray
The Board returned to open session at 7:15 p.m.
ADJOURNMENT
On motion by Commissioner Werbelow, seconded by Commissioner Creamer, the
meeting adjourned at 7:17 p.m.
13:31 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 14116
Page 96 Board Minutes
September 28 1999
Is/Mary E. Sova, Secretary
Filed: October 1, 1999
Marilynn Slade, City Clerk
Attachment A
NOTICE OF PUBLIC HEARING
PROPOSED ELECTRIC RATE CHANGE
BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, MICHIGAN
A Public Hearing will be held, on Tuesday, November 23. 1999 at 5:30 p.m., at the Board
of Water and Light(BWL)boardroom at 1232 Haco Drive, Lansing Michigan. Members
of the public are invited to attend. Signs directing people to the hearing room will be
posted.
PURPOSE OF THE HEARING- The Board of Water and Light solicits comments
from the public on PROPOSED ELECTRIC RATE SCHEDULES. THE PROPOSALS
being considered by the Commissioners would (1) change the Scheduled Curtailment
Rider to include Interruptible Electric Service, (2) define interruptible and curtailable
electric service, and (3) extend the rider to Large Capacity Electric Service Rate No. 8.
REASON FOR CHANGE- The proposed electric rates respond to customer requests for
more rate flexibility. The proposed electric rate changes will make BWL rates more
competitive with rates charged similar customers by other Michigan utilities.
IF YOU WANT TO BE HEARD- Comments oral or written may be submitted at the
public hearing. Mailed comments will be received until 5:00 p.m.,on November 23,
1999, addressed to the Board of Water and Light, PO Box 13007, Lansing, Michigan
48901, Attention: Secretary of the Board. Comments MUST BE LIMITED TO THE
PROPOSED ELECTRIC RATE CHANGES. The hearing officer may impose time
restrictions on oral comments, depending on the number of persons wishing to be heard.
FURTHER INFORMATION- Copies of proposed rate schedules and other data may
be picked up at the information desk on the first floor of the Board of Water and Light
Customer Service Center at 1232 Haco Drive or at the Second Floor Reception Desk on
the second floor of the Administration Building at the same address between 8:00 a.m. and
5:00 p.m., Monday through Friday. This material will also be available at the public
hearing.
13:31 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE 15/16
Board Minutes Page 97
September 28, 1999
Published by order of the Board of Water and Light Commissioners.
Mary E. Sova
Corporate Secretary
13:31 OCT 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #73656 PAGE: 16/16
Page 98 Board Minutes
September 28 1999
Attachment B
Proposed Rate Schedule
4-st 2nd Revised Sheet No. EB28
SCHEDULED CURTAILMENT/INTERRUPTIBLE SERVICE RIDER
Availability- This rider is available to customers on PM*nary Electric Service Rate No. 5
or Large Capacity Electric Service Rate No. 8 and any applicable future primary or
transmission service rate approved by the Commissioners A customer desiring service
under this rider must contract to curtail or interrupt its demand by 1,000 kW or more,upon
notice by the Board of Water and Light(BWL).
ametint of euAailable demand subjeet te this rider-may be limited by the 1
teW and by eustemer,
Conditions of Curtailment/Interruption- The General Manager has authorization to
negotiate with qualifying customers as to terns and conditions of this riders including the
total mW of curtailable or interruptible demand subject to the rider.
Definitions
Curtailed load is electric load the customer may(the customer has the switch) shed upon
notice from the BWL.
Interrupted load is electric load the customer will (the BWL has the switch) shed upon
notice from the BWL.
Adopted: Proposed Effective:
(Note: New language is underlined, and deleted language is stricken)
Page 84
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT ;
Tuesday, September 28, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, David O'Leary, Diane R. Royal and Judson M.
Werbelow.
Absent: Commissioner Mark A. Murray.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner O'Leary, to
approve the minutes of regular session held August 24, 1999, and special meeting held
September 2, 1999.
Carried 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
No Communications.
REPORTS OF COMMITTEES
COMMITTEE OF THE WHOLE REPORT. The Committee of the Whole met on
Tuesday, August 24, 1999, to receive an overview of the Central Utilities Complex
project to serve the proposed new General Motors (GM) assembly plant.
Board Minutes Page 85
September 28, 1999
Present were Commissioners Ernest Christian, Mark Murray, Dave O'Leary, Diane
Royal, and Judson Werbelow. Excused absences were Commissioners Rosemarie
Aquilina, Ronald Callen, and Charles Creamer.
Staff briefed the Commissioners on the following significant aspects of the project:
• Events leading to the selection of the Board of Water and Light (BWL) and a private
entity to provide utilities services to General Motors
• Schedule and structure for the Central Utilities Complex
• Benefits of the Central Utilities Complex to the BWL
• Specific utility services to be provided
• Capacities and anticipated annual sales
• Staffing the Central Utilities Complex
• Role of the Management Coordination Committee
• Financial overview and the calendar of events for issuance of taxable revenue bonds
• Risk mitigation involving documents with the BWL and other parties.
Following a question and answer period, the Commissioners reviewed a proposed
resolution authorizing the execution of various agreements. This item is to be included in
the General Manager's Recommendations for consideration at the regular meeting on
September 28, 1999.
Submitted by,
COMMITTEE OF THE WHOLE
Motion by Commissioner Werbelow, seconded by Commissioner Christian, that the
report of the Committee of the Whole be received.
Action: Carried unanimously.
PERSONNEL COMMITTEE REPORT The Personnel Committee met on September
2, 1999, at 12 noon.
Present were Commissioners O'Leary (Chair), Christian, Royal and Werbelow.
The following topics were discussed:
Funding Post-Employment Benefits:
The implications of the following legal documents were reviewed and discussed:
(1) Second Amendment to the Defined Benefit Plan for Employees' Pensions.
(2) Retiree Benefit Plan and Trust Agreement
(3) Post-Retirement Benefit Plan for Eligible Employees
Page 86 Board Minutes
September 28 1999
The Committee gave its concurrence for staff to file the necessary documents with the
Internal Revenue Service (IRS) relative to implementing mechanisms for funding retiree
benefits. Upon approval from the IRS, the Commissioners will be asked to approve
establishing the VEBA Trust and a 401(h) subaccount of the Defined Benefit Pension
Plan.
Total Compensation:
Consultant Paul Regan of Dorey, Reagan & Associates presented an executive summary
of the BWL total compensation system. The project goal is to correct problem areas in
the current pay system design and to create a flexible market oriented system, supportive
of the BWL's processed-based organization. Current system corrections were reviewed
along with the new system design.
Health Care Insurance:
Health care consultant Frank Webster presented an interim report on the activities of the
BWL Health Care Task Force and strategies for employee health plans. The Task Force
plans to issue its findings and recommendations to the Union-Management Contract
Negotiations Team.
Workers' Compensation:
Chief Financial Officer Dana Tousley presented a case for remaining self-insured for
workers' compensation versus utilizing an insured plan. Staff recommendation will be
presented to the Board at the regular meeting in September.
Performance Appraisals for Three Staff Positions Reporting to the Bogrd:
The Committee recommends the adoption of the following resolution:
#99-9-1
RESOLUTION CONCERNING PERFORMANCE APPRAISALS
WHEREAS, Performance evaluations and salary increases for the three positions
reporting directly to the Board are administered according to the BWL Wage and Salary
Plan for Non-Bargaining Unit Administrative employees; be it
RESOLVED, That the Director and General Manager, Director of Metrics and Audits,
and Corporate Secretary are eligible to receive salary increases effective as of July 1,
1999, and
RESOLVED FURTHER, That:
1. their salary ranges be increased 2.5% for Fiscal Year 1999-00 and
2. the ratings as submitted to Human Resources for the three positions reporting
to the Board be confirmed.
Director and General Manager Joseph Pandy,Jr. - Rating in the range of 2.50—4.0
Director of Metrics and Audits Kellie Willson - Rating in the range of 2.50—4.0
Corporate Secretary Mary Sova - Rating in the range of 2.50—4.0
Board Minutes Page 87
September 28, 1999
Submitted by,
David O'Leary, Chair
PERSONNEL COMMITTEE
Motion by Commissioner Creamer, seconded by Commissioner Christian, to approve the
report of the Personnel Committee, including Resolution#99-9-1.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-9-2
UTILITY SERVICES AGREEMENT WITH GENERAL MOTORS
RESOLVED, That the General Manager and the Corporate Secretary be authorized to
execute the following documents in substantially such form as presented to the Board for
final approval:
• The Utility Services Agreement
• The Participation Agreement
• The Project License Agreement
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Discussion: Staff Attorney Larry Wilhite briefed the Board on three outstanding
issues: (1) General Motors' guarantee for the bond payments on the Central Utilities
Complex (CUC) bonds, (2) parental guarantee from the alliance partners in the Utility
Services Agreement, and (3) isolation of the BWL from any liquidated damages arising
out of operation of the CUC. Mr. Wilhite indicated that the issues being negotiated are
coming to a closure.
Action: Carried unanimously.
#99-9-3
WORKERS COMPENSATION SERVICE PROVIDER CONTRACT
RESOLVED, That the BWL purchase workers compensation claims administration from
Cambridge Integrated Services Group, Inc. for the period September 1, 1999 to
September 1, 2002 on a flat fee basis for a total three year cost of$48,050. This is the
best-evaluated bid received.
RESOLVED FURTHER, That an additional three year period of claims administration
may be negotiated with Cambridge Integrated Services Group, Inc.
Board Minutes
Page 88 September 28 1999
Motion by Commissioner Werbelow, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-9-4
REVENUE BOND SERIES 1999A SALES RESOLUTION
WHEREAS, the Board previously approved the Third Supplemental Revenue Bond
Resolution authorizing its Water Supply, Steam and Electric Utility System Revenue
Bonds, Series 1999A, the proceeds of which will be used to pay for the 1999 Project,
WHEREAS, the Board has received an offer to purchase the Series 1999A Bonds
chase Agreement,(the "Purchase Contract"),
pursuant to the terms of a Bond Pur
submitted by Everen Securities, as repsentative (the
e Pprcl ase Contract the
Underwriters selected by the Board and
identifi d in th
("Underwriters").
NOW, THEREFORE BE IT RESOLVED BY THE COMMISSIONERS OF THE
BOARD, THAT:
1. Unless otherwise defined herein or the context indicates a contrary meaning,
capitalized terms used in this Series 1999A Sales Resolution shall have the same
meaning as in the Amended and Restated Bond Resolution, adopted on October 24,
1989, as supplemented from time to time, including the Third Supplemental Bond
Resolution, adopted by the Board on September 2, 1999 (collectively,the "Bond
Resolution").
2. The aggregate principal amount of the Series 1999A Bonds shall be $48,230,000,
maturing on July 1 in the years and amounts and bearing interest at rates set forth in
Exhibit A to this Series 1999A Sales Resolution.
3. veren Securities to purchase the Series 1999A Bonds at a price of
The proposal of E
$47,830,212.20 (representing the par amount of the Bonds less a net original issue
discount of$74,235.30 less an Underwriters' discount of$325,552,50) is approved.
4. The form of the Purchase Contract submitted to the Board by the Representative on
behalf of the Underwriters is approved and al Officer of thethe , any Boardther are severally sioner,
the General Manager and the Chief F
authorized to execute and deliver the Purchase Contract for and on behalf of the
Board, with such changes as they may, in consultation with the Staff Attorney and
Bond Counsel, determine to be necessary or appropriate.
5. The preparation and distribution of an Official Statement with reference to the Bonds
(the "Official Statement"), in substantially the form of the Preliminary Official
Statement, is approved with such changes as the Chairperson or any Commissioner
and the General Manager and the Chief Financial
toOfficer may, in consultation be necessary or appropriate. 1th
The
the Staff Attorney and Bond Counsel, determine
Board Minutes
September 28, 1999 Page 89
Chairperson or any Commissioner and the General Manager are authorized to execute
the Official Statement for and on behalf of the Board.
6. The Chairperson, any Commissioner, the General Manager and the Chief Financial
Officer are severally authorized to execute an agreement in substantially the form
presented to the Board at this meeting, with such changes as may be necessary or
desirable and not materially adverse to the Board, in order to comply with the
Continuing Disclosure Undertaking of the Board pursuant to paragraph (B)(5) of Rule
15c2-12 adopted by the United States Securities and Exchange Commission (the "
Continuing Disclosure Agreement"). The Board covenants that it will comply with
and carry out all of the provisions of the Continuing Disclosure Agreement (see Exhibit B).
7. The form of Blanket Issuer Letter of Representations ("Letter") with The Depository
Trust Company ("DTC") presented to the Board at this meeting is approved and the
Board ratifies and confirms any and all actions taken by Staff in connection with the
execution and delivery of the Letter to DTC (see Exhibit C attached to minutes).
8. The second sentence of Section 5 of the Third Supplemental Revenue Bond
Resolution is amended to read as follows: "Series 1999A Bonds shall be issued in
denominations of$5,000 plus increments of$1,000 and any integral multiples
thereof, not exceeding the amount of the Series 1999A Bonds maturing on the same
date and shall be numbered in consecutive order of authentication from 1 upwards."
9. This Series 1999A Sales Resolution shall be effective immediately upon adoption
/s/
Chairperson Corporate Secretary
EXHIBIT A
I BOND DETAILS — SERIAL BONDS
Maturity Date Principal Interest
Jul 1 Amount Rate
Price
2001 $1,025,000 0
2002 2,690.000 4.10/0 100.000%
1,820,000 4.40
2003 4.25 100.000 2004 2,950,000 4.50 100.000
2005 3,075,000 100.000
3,195,000 4.7 4.75 100.000
5 2007 3,330,000 4.85 100.000
2008 2,540,000 100.000
3,680,000 5.50
2009 5.50 103.854 2010 3,870,000 5.00 103.808
2011 4,055,000 99.010
2012 5.10 98.689
4,225,000 5.20 2013 4,435,000 5.30 98.618
2014 7,340,000 98.839
5.35 98.489
Board Minutes
Page 90
September 28 1999
II. REDEMPTION PROVISIONS
The Bonds maturing in the years July 1, 2001 —2009, inclusive, shall not be subject to
redemption prior to maturity. Bonds due on or after July 1, 2010, shall be subject to
redemption prior to maturity, at the option of the Board, in such order of maturity as the
Board may determine, and by lot within any maturity, in whole or in part, on any date on
or after July 1, 2009, at par plus accrued interest to the date fixed for redemption.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
Series 1999A Sales Resolution.
Discussion: Kevin McCanna of Speer Financial, Inc. briefed the Board on details
relative to pricing of the bonds. Mr. McCaima reported that BWL bond ratings of Aa3
and AA from Moody's and Standard & Poor's respectively were confirmed. The
excellent ratings were based on (1) Lansing's strong and stable finances, (2) the utility's
increasing role as a regional service provider, and (3) competitive rates. Rich Allen of
Everen Securities reported on the sale of the bonds. He noted that the priority of the
bonds were restricted to Michigan residents. The majority of sales and advertising efforts
were focused in the three-county service area of the BWL, with approximately $17
million of the $48 million sold locally. The Board received a copy of the Bond Purchase
Agreement between the BWL and Everen Securities for review. This document is still in
legal review.
Action: Adopted. YEAS: Commissioners Aquilina, Callen, Christian, Creamer,
O'Leary, Royal, and Werbelow.
NAYS: None
ABSENT Commissioner Murray
#99-9-5
GRANTING EASEMENT IN ALAIEDON TOWNSHIP
WHEREAS,the Board of Water and Light owns property in Alaiedon Township
described as:
A parcel of land in the NW 1/4 of Section 5, T. 3 N., R. 1 W., Alaiedon
Township, Ingham County, Michigan, particularly described as follows:
Commencing at the North 1/4 corner of Section 5, T. 3 N., R. 1 W, Alaiedon
Township, Ingham County, Michigan(said 1/4 corner being recorded in L. 6, P.
228 of Ingham County Land Corner Recordation Certificates); thence along the
1/4 line S 00°35'16" E 1309.17 ft.; thence S 88°19'51" W 551.90 ft. to the Point
of Beginning of this description: thence continuing S 88'19'51" W 240.00 ft.;
thence Northerly (parallel to the N-S 1/4 line of Section 5)N 009 5'16" W 377.14
ft., to the North line of land owned by the "Forsberg Family L.L.C." and known
as Alaiedon Township tax parcel number 06-05-100-047, said total tax parcel
containing 32.746 acres of land, more or less (according to township records);
thence along the North line of said tax parcel S 89°58'59" E 239.97 ft.; thence
Board Minutes
September 28, 1999 Page 91
Southerly (parallel to the N-S 1/4 line of Section 5) S 00035'16"E 370.08 ft., to
the Point of Beginning of this description. This parcel is subject to the rights of
the Ingham County Drain Commission for the "Dingman Drain", said rights
granted in a release of right of way recorded in L. 73, p. 386, Miscellaneous
Records of Ingham County, also subject to gas line easement rights of Consumer
Energy Company as retained in a"Partial Release of Easement" executed on
February 8, 1999 by Vincent D. Edwards (Consumers Energy Company Gas Field
Manager), said gas line easement encumbering the West 10 feet of the subject
property, and subject to any and all other easements and restrictions of record.
Said parcel contains 89,650 sq. ft. or 2.0581 acres of land, more or less.
WHEREAS, the Forsberg Family L.L.0 desires to acquire a 10' easement across the
southern portion of the Board's property described as:
A parcel of land in the NW '/4 of Section 5, T. 3 N., R. 1 W., Alaiedon Township,
Ingham County, Michigan, particularly described as follows: Commencing at the
North 1/4 corner of Section 5, T. 3 N., R. 1 W., Alaiedon Township, Ingham
County, Michigan(said 1/4 corner being recorded in L. 9, P. 452 of Ingham County
Land Corner Recordation Certificates); thence along the '/4 line S 00°35'16" E
1309.17 ft.; thence S 88°19'51" W 551.90 ft. to the Point of Begim-ling of this
easement description: thence continuing S 88'19'51" W 240.00 ft.; thence
Northerly (parallel to the N/S '/4 line of Section 5) N 00°35'16" W 10 ft.; thence N
88"19'51"E 240.00 ft.; thence Southerly (parallel to the N/S '/4 line of Section 5)
S 00°35'16" E 10 ft. to the Point of Begimzing of this description. It is intended
that this property description describe the South 10 ft. of the parcel surveyed and
described in L. 8, PP. 542-544 of Ingham County Certified Surveys.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Commissioners of the
Board of Water and Light recommends that an easement be granted to the Forsberg
Family L.L.C., for the sum of$1.00, subject to the approval of City Council as required
under Article 2, Section 5-203.3 of the Lansing City Charter.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
499-9-6
RELEASE OF EASEMENTS
WHEREAS, Alice R. Jessop executed a certain easement conveying and warranting to
Maxwell Haddox and Blanche Haddox, forever, such rights are recorded in Liber 295,
Page 129, in the Register of Deeds, Ingham County, Michigan, April 22, 1931;
WHEREAS, the Board of Water and Light has electrical utility easements in Maple Hill
Subdivision, Lansing Township described as: Rear and side lot lines to the distance of 2
feet, together with overhang for pole arms, are subject to an easement for necessary
Page 92 Board Minutes
September 28 1999
electric wire or telephone poles or for any utility, and ingress and egress is expressly
reserved to workmen employed thereon;
WHEREAS, Mr. Ty Patrick of 535 E. Cavanaugh Road has requested the release of the
easements for the east 2 feet of Lot 153 of Maple Hill Subdivision and the west 2 feet of
Lot 154 of Maple Hill Subdivision;
WHEREAS, the easements are not needed to continue the operations of the Board of
Water and Light.
NOW THEREFORE, BE IT RESOLVED, That the Board of Commissioners of the
Board of Water and Light release, discharge, and vacate said easements on the above
described properties and that the General Manager and Corporate Secretary be authorized
to execute the release of easements, subject to the requirement of the Lansing City
Charter. Further that the Corporate Secretary be directed to record the release of
easements with the Ingham County Register of Deeds.
This release of easements is for the remodeling of a residential home, Lots 153 and 154
of Maple Hill Subdivision, located on the north side of Cavanaugh Road east of Cedar
Street. The Board of Water and Light has no need for these easements, as electric service
is along the rear lot lines.
Motion by Commissioner Werbelow, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
#99-9-7
AMENDMENT No. 2 TO CSXT-64435 TRANSPORTATION CONTRACT
RESOLVED, that the Board approve Amendment No. 2 to CSXT-64435 Transportation
Contract ("Contract") with CSX Transportation(CSXT) 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 term of this Contract will be extended twenty-four (24) months, with an
expiration date of December 31, 2001.
2. The minimum annual volume commitment shall be changed from 90% of eastern
coal requirements to 300,000 tons.
3. CSXT shall refund to BWL $0.45 per ton on all tons over 300,000 tons of eastern
coal shipped by CSXT in each contract year.
4. Appendix B —Rates, shall be revised to reflect rail rates for the CSXT acquired
Conrail origins.
5. The rates to be effective January 1, 2000 shall be the same as those in effect on
January 1, 1999.
6. All other provisions of the Contract shall be ratified and reaffirmed.
Board Minutes Page 93
September 28, 1999
By amending this Contract with CSXT and CN, BWL will be able to continue its long-
term relationship with CSXT and CN. The amended expiration of the Contract will
coincide with the start of the Erickson Station turbine overhaul (January 1, 2002), which
may be the time frame that plant modifications are completed for a switch to 100%
Western PRB coal at Erickson Station. This amendment will provide BWL with greater
flexibility for sourcing eastern Spot coal as well as, a greater potential for lower delivered
Spot coal prices.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary,to adopt the
resolution.
Action: Carried unanimously.
999-9-8
SET PUBLIC HEARING TO CHANGE ELECTRIC RATE SCHEDULE
RESOLVED, that the proposed electric rate schedule listed below and detailed in the
attached proposed rate schedules be made the subject of a public hearing prior to further
consideration by the Board of Commissioners.
Page EB28 - Scheduled Curtailment Rider
FURTHER RESOLVED, that a public hearing to solicit public input on this matter be set
for Tuesday,November 23, 1999 at 5:30 p.m., in the Board of Water and Light Offices at
1232 Haco Drive. Also that the Corporate Secretary be directed to file with the City
Clerk information regarding pending changes in the rate structures on or before
September 30, 1999.
Motion by Commissioner Creamer, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
(Attachments A and B follow these 777inutes for details on the proposed electric rate change
pertaining to the "Scheduled Ctirtaihnent/Interruptible Service Rider')
UNFINISHED BUSINESS
POLICY ON REVENUE BOND ISSUE
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, that the
proposal on "Policy on Revenue Bond Issue" tabled at the May 25, 1999, regular
meeting, be taken from the table for consideration.
The Commissioners took no action on this motion.
Discussion: At the request of Commissioners Creamer and Callen, General Manager
Pandy briefed the Board on the evolution of the current policy on the issuance of revenue
bonds (Section 9-13—Policy on Revenue Bonds, adopted by the Board-Janziary 9, 1979). The policy
Page 94 Board Minutes
September 28 1999
provides that any single revenue bond issue in excess of$50 million will be authorized
and issued by the Board only when the City Council has, by resolution, concurred with
the issuance of the bonds. Mr. Pandy noted that with the Board's contemplated taxable
revenue bond issue in the range of$50-$100 million to finance the Central Utilities
Complex (CUC), it is appropriate to revisit the policy. He pointed out that there is
nothing in the Revenue Bond Act or the Lansing City Charter which requires such a
policy. In the twenty years that have elapsed since 1979, inflation as measured by the
annual Consumer's Price Index has increased by 90.4%. Using this index, $50 million in
1979 would be equivalent to $95.2 million. In the spirit of cooperation, the Board's
intention to either revise or rescind this policy has been discussed with some City
Councilmembers by their Commissioner counterpart. In addition, the Board's proposed
change to the policy was provided to the City Council several weeks ago in their meeting
packet by Mayor Hollister. Following discussion as to whether a formal policy is needed,
there was consensus among the Commissioners to rescind the policy.
#99-9-9
Motion by Coininissioner Werbelow, seconded by Commissioner Callen, to rescind the
current Policy on Revenue Bonds, adopted by the Board on January 9, 1979, (Section 9-13
of BWL Policy Manual).
(Note: This policy was not assigned a resolution number in 1979.)
Action: Carried unanimously.
NEW BUSINESS
No new business.
GENERAL MANAGER'S REMARKS
Chilled Water Facility. General Manager Pandy reported that the Lansing City Council
approved the rezoning and special land use permit for 327 W. Walnut Street--the site of
the proposed chilled water plant. Mr. Pandy briefed the Board on the proposed chiller
plant plans and handed out the following informational documents for reference.
(1) His memo to City Council, dated September 27, 1999, regarding additional costs to
design, engineer, construct, operate and maintain the central chiller facility so as to
maintain an Average Sound Level not to exceed 70 decibels.
(2) City Council resolution approving the Special Land Use Permit (Resolution#438) and
Rezoning (Resolution#454), on September 27, 1999.
(3) Spreadsheets detailing the financial forecast before and after sound restrictions,
including the approximately $1.1 million added into the cost for the 70 decibels Average
Sound Level and aesthetic design considerations.
Board Minutes Page 95
September 28, ]999
Mr. Pandy reported that he has been in contact with potential chilled water customers,
including the State of Michigan and Ingham County to advise them that the sound
restrictions imposed by City Council could increase their rates due to added design costs.
The parties indicated they understood and confirmed their commitment to sign up with
the BWL for chilled water service. Mr. Pandy noted that costs in providing chilled water
service would be reviewed with the Board amlually, in the similar mauler that is reported
for the electric, water, and steani utilities. With respect to optional sites examined by the
BWL, Mr. Pandy noted that six alternatives had been investigated for the project,
however, none of them were feasible. Following a lengthy question and answer period,
there was consensus among the Commissioners for the project to move forward.
Chairperson Royal left the meeting at 6:35 p.rn.
Motion by Commissioner Christian, seconded by Commissioner Callen, to direct staff to
proceed to develop the chilled water project.
Action: Carried unanimously.
Union Leadership Introduced. General Manager Pandy introduced the leadership of
the IBEW Local 352 Union: Max Zemer, Business Agent; Joe Davis, President; Ron
Byrnes and Eddie Rodriguez. He recognized their hard work and their leadership in the
union.
REMARKS BY COMMISSIONERS
Commissioner Callen circulated pictures taken of a converted power plant along the
harbor of Baltimore. MD.
General Manager Pandy noted that the BWL's grant application under the Clean
Michigan Initiative for waterfront redevelopment is being submitted for the Ottawa
Station project. The grant application deadline is Friday, October 1, 1999.
Commissioner Callen handed out copies of informative articles pertaining to (1) fines to
be paid by the Northeast Utilities for environmental violations, (2) Marquette, Michigan
officials are dropping the notion of selling the Board of Light and Power, and (3) the
impact of purchased power and electric price spikes in rural Minnesota.
Commissioner Creamer questioned the assumptions used in a financial impact scenario
prepared by the City of Lansing, dated August 4, 1999, on separate meters for lawn
sprinkling. He asked the General Manager to review the assumptions used in the report
and to provide data on communities with split service provisions.
Commissioner O'Leary expressed his appreciation to Councilmember Harold Leeman for
taking time to attend the Board meetings. As a matter of protocol while the Board is in
session, Commissioner O'Leary asked the Commissioners to refrain from referring to
Councilmember Leeman for the Council's position on matters being discussed.
Page 96 Board Minutes
September 28 1999
EXCUSED ABSENCES
By Commissioner Werbelow, seconded by Commissioner Creamer, that the absence of
Commissioner Murray be excused.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Max Zemer, Business Manager of IBEW Local 352, commented that members of the
union's executive board, introduced earlier by Mr. Pandy, are also part of the negotiations
team. Mr. Zemer stated that the union is looking forward to negotiations with the
prospect that an agreement can be reached quickly to benefit the customers, the BWL,
and the employees.
EXECUTIVE SESSION
Motion by Commissioner O'Leary, seconded by Commissioner Creamer to go into
executive session to discuss potential real estate matters (6:45 p.m.).
Action: Adopted. YEAS: Commissioners Aquilina, Callen, Christian, Creamer,
O'Leary, Royal, and Werbelow.
NAYS: None
ABSENT: Commissioner Murray
The Board returned to open session at 7:15 p.m.
ADJOURNMENT
On motion by Commissioner Werbelow, seconded by Commissioner Creamer, the
meeting adjourned at 7:17 p.m.
/s/Mary E. Sova, Secretary
Filed: October 1, 1999
MarilymZ Slade, City Clerk
Board Minutes Page 97
September 28, 1999
Attachment A
NOTICE OF PUBLIC HEARING
PROPOSED ELECTRIC RATE CHANGE
BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, MICHIGAN
A Public Hearing will be held, on Tuesday, November 23, 1999 at 5:30 p.m., at the board
of Water and Light (BWL) boardroom at 1232 Haco Drive, Lansing Michigan. Members
of the public are invited to attend. Signs directing people to the hearing room will be
posted.
PURPOSE OF THE HEARING - The Board of Water and Light solicits comments
from the public on PROPOSED ELECTRIC RATE SCHEDULES. THE PROPOSALS
being considered by the Commissioners would (1) change the Scheduled Curtailment
Rider to include Interruptible Electric Service, (2) define interruptible and curtailable
electric service, and (3) extend the rider to Large Capacity Electric Service Rate No. 8.
REASON FOR CHANGE - The proposed electric rates respond to customer requests
for more rate flexibility. The proposed electric rate changes will snake BWL rates more
competitive with rates charged similar customers by other Michigan utilities.
IF YOU WANT TO BE HEARD - Cominents oral or written may be submitted at the
public hearing. Mailed comments will be received until 5:00 p.m., on November 23,
1999, addressed to the Board of Water and Light, PO Box 13007, Lansing, Michigan
48901, Attention: Secretary of the Board. Comments MUST BE LIMITED TO THE
PROPOSED ELECTRIC RATE CHANGES. The hearing officer may impose time
restrictions on oral comments, depending on the number of persons wishing to be heard.
FURTHER INFORMATION - Copies of proposed rate schedules and other data may
be picked up at the information desk on the first floor of the Board of Water and Light
Customer Service Center at 1232 Haco Drive or at the Second Floor Reception Desk on
the second floor of the Administration Building at the same address between 8:00 a.m.
and 5:00 p.m., Monday through Friday. This material will also be available at the public
hearing.
Published by order of the Board of Water and Light Commissioners.
Mary E. Sova
Corporate Secretary
Page 98 Board Minutes
September 28 1999
Attachment B
Proposed Rate Schedule
4-st 2nd Revised Sheet No. EB28
SCHEDULED CURTAILMENTANTERRUPTIBLE SERVICE RIDER
Availability - This rider is available to customers on Primary Electric Service Rate No. 5
or Large Capacity Electric Service Rate No. 8 and any applicable future primary
transmission service rate approved by the Commissioners. A customer desiring service
under this rider must contract to curtail or interrupt its demand by 1,000 kW or more,
upon notice by the Board of Water and Light (BWL).by app-exi ,atel . 1,000 10AL o.
in total and by eustemen
Conditions of Curtailment/Interruption- The General Manager has authorization to
negotiate with qualifying customers as to terms and conditions of this rider, including the
total mW of curtailable or interruptible demand subject to the rider.
Definitions
Curtailed load is electric load the customer may (the customer has the switch) shed upon
notice from the BWL.
Interrupted load is electric load the customer will (the BWL has the switch) shed upon
notice from the BWL.
Adopted: Proposed Effective:
(Note: New language is underlined, and deleted language is stricken.)
EXHIBIT B RE: Res. #99-9-4
CONTINUING DISCLOSURE UNDERTAK[NG
In connection with the issuance and delivery of the $49,000,000* City of Lansing
Board of Water and Light (the "Board"), Water Supply, Steam and Electric Utility
System Revenue Bonds, Series 1999A (the "Bonds"), authorized under a resolution (the
"Resolution") adopted by the Board on September 26, 1999, amended and restated on
October 24, 1989, and supplemented on October 26, 1993, January 11, 1994 and
September 28, 1999 for the benefit of the holders and beneficial owners of the Bonds, the
Board hereby undertakes and agrees as follows:
4 The Board hereby agrees, in accordance with the provisions of Rule 15c2-12 (the
ule ) promulgated by the Securities and Exchange Commission (the "SEC") pursuant
to the Securities Exchange Act of 1934, to -provide or cause to be provided to each
nationally recognized municipal securities inormation repository ("NKMSIR") and to
the appropriate state information depository, if any, for the State of Michigan ("SID"), in
each case as designated by the SEC in accordance with the Rule, the following Annual
Financial Information and operating data commencing with the fiscal year endeTJune 30,
1999:
(1) Annual Financial Information, comprised of updates of the following
tables included in the official statement of the Board relating to the Bonds (the
Official Statement");
Official Statement Caption Heading
The Electric Utility
Tables:
Purchased Power Sales and System Losses;
Average Number and Percent of
Customers by Classification;
Ten Largest Electric Customers;
Current Monthly Electric Rates;
Electric MWH Sales and Percent
by Classification;
Electric Operating Revenues and Percent of
Revenues by Classification
The Water Utility
Tables:
Current Monthly Water Rates; „
Water Sold;
Average Number and Percent of
Customers by Classification;
Water Sales (1000 Cubic Feet) and
Percent Sold by Classification;
Water Operating Revenue and Percent of
Revenues by Classification;
Ten Largest Water Customers
The Steam Utility
Tables:
Monthly Steam Rates;
Average Number and Percent of
Customers by Classification;
Steam Sales (Per 1,000 Pounds) and
Preliminary, subject to change.
Percent Sold by Classification;
Steam Operating Revenues and Percent of
Revenue by Classification; and
Ten Largest Steam Customers
Financial Information
All Tables
Debt Information
All Tables
provided, that the information updating these tables may be provided in
such format as the Board deems most appropriate, and provided, further that if
any of the updates referred to above no longer can be provided because the
opperations to which they relate have been materially changed or discontinued, a
sfatement to that effect,provided by the Board to each NRMSIR then in existence
and to the SID, along with any other annual information or audited financial
statements required to be provided under the Undertaking shall satisfy the
Undertaking. To the extent available, the Board shall cause to be filed along with
the other annual information or audited financial statements operating data s=*Iar
to that which can no longer be provided.
(2) Financial statements pertaining to the Board prepared in
conformity with Generally Accepted Accounting Principles applied to
governmental units (i.e. as subject to the provisions of the Governmental
Standards Accounting Board and' subject to any express requirements of State
law) by the Board and audited by an individual or firm of independent certified
pub is accountants (("Audited Financial Statements"); provided, however, that the
Board may withou} amending this Undertaking, from time to time, in order to
comply witli federal or State legal requirements, modify the basis upon which its
financial statements are prepared. Notice of any such modification shall be
provided to (i) either each NRMSIR or the Municipal Securities Rulemaking
Board ("MSRB") and (ii) the SID, and shall include a reference to the specific
federal or State law or regulation describing such accounting basis.
Such annual financial information and operating data described above are
expected to be provided directly b the Board but may be provided by reference
to subsequent oficial statements of the Board tiled with the MSRB.
(b) Such annual information and operating data described in (a)(1) gbove and the
Audited Financial Statements will each be available on or before the 210` day after the
end of the fiscal year of the Board; provided however, that if the Audited Financial
Statements are not available b the 21 day after the end of the fiscal year, they shall be
provided when available, and unauditedfinancial statements in a format similar to the
inancial statements contained in the Official Statement shall be filed in place of the
Audited Financial Statements by such date. If the Board changes its fiscal year, the
Board shall send, or cause to be sent, notice of such change to each NRMSIR or the
MSRB, and to the SID.
(c) The Board agrees to provide or cause to be provided in a timely manner to (i)
each NRMSIR or to the MSRB and (ii the S , if any,notice of the occurrence of any of
the following events listed in (b)(S)(i SID,
of the Rule with respect to the Bonds, if
applicable, if-such event is matena :
(1) principal and interest payment delinquencies;
(2) non-payment related defaults;
(3) unscheduled draws on debt service reserves reflecting financial
difficulties;
-2-
0
e
(4) unscheduled draws on credit enhancements, reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to
perform;
(6) adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
(7) modifications to rights of holders of the Bonds;
(8) bond calls;
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Bonds;
(11) rating changes; and
(12) any failure to provide disclosure of Annual Financial Information
and Audited Financial Statements when the same are due.
(d) The Board covenants that its determination of materiality for purposes of
(c) above will be made in conformance with federal securities laws
(e) The Board agrees to provide or cause to be provided, in a timely manner,
to (i) each NRMSIR or to the MSRB and (ii) the SID, notice of failure by the Board to
provide the annual financial information and opperating data with respect to the Board
described in subsection (a) above on or prior to the dates set forth in subsection (b)
above.
f) The undertaking pursuant to the Rule set forth herein shall terminate if the
Board s all no longer have any legal liability for any obligation relating to the reppayymment
of the Bonds under the Bond Resolution. The Board shall give notice to each KV SIR
or MSRM and the SID, if any, in a timely manner if this paragraph is applicable..
( ) The Board agrees that its undertakingpursuant to the Rule set forth herein
is intenced to be for the benefit of the holders ohe Bonds, including all beneficial
owners of the Bonds, and shall be enforceable by any.holder or beneficial owner of the
Bonds- provided that, the right to enforce the provisions of this Undertaking shall be
limited to a right to obtain specific enforcement of the Board's obligations hereunder and
any failure by the Board to comply with the provisions of this Undertaking shall not
constitute a default or an event of default with respect to the Bonds or under the
Resolution. For purposes of the Undertaking, "beneficial owner" means any person who
has or shares the power, directly or indirectly, to make investment decisions concerning
ownership of any Bonds (including any person holding Bonds through nominees,
depositories or other intermediaries).
(h) Notwithstanding any other provision of this Undertaking, the Board, by
resolution or ordinance authorizing such amendment or waiver may amend this
Undertaking, and any provision of this Undertaking may be waived, if:
(1) The amendment or the waiver is made in connection with a change in
circumstances that arises from a change in legal requirements, change in
law, or charge in the identity, nature, or status of the Board, or type of
business conducted;
(2) This Undertaking, as amended, or the provisions, as waived would have
complied with the requirements of the Rule at the time of the primary
offering, after taking into account any amendments or interpretaions of
the Rule, as well as any change in circumstances; and
-3-
}
J
(3) The amendment or waiver does not materially impair the interests of the
beneficial owners of the Bonds as determined'by parties unaffiliated with
the Board(such as Bond Counsel), at the time of the amendment.
Any financial information containing amended operating data or financial
information will explain in narrative form the reason for amendment and the impact of
the change in the type of operating data or financial information being provided.
((i�) If a change is made to the basis on which financial statements are
prepared, the annual financial information for the year in which the change is made shall
present a comparison between the financial statements or information prepared on the
basis of the new accounting principles and those prepared on the basis of the former
accounting principles. Such comparison shall include a qualitative and, to the extent
reasonably feasible, quantitative discussion of the differences in the accounting princi les
and the im pact of the change in the accounting principles on the presentation ofpthe
in
formation.
nformation.
(j) The Board may, for time to time, appoint or engage a Dissemination
Agent to assist it in carrying out its obligations under this Undertaking, and may
discharge an such aggent, with or without appointing a successor Dissemination Agent.
All terms nodefinedherein which are defined in the Resolution shall have the meanings
herein assigned to them in the Resolution.
(k) Nothing in this Undertaking shall be deemed to prevent the Board from
disseminating any other information using the means of dissemination set forth in herein
or any other means of communication or including any other information in any Annual
Financial Information and Audited Financial Statements or notice of occurrence of a
Material Event in addition to that which is required by this Undertaking. If the Board
chooses to include any information form any document or notice of occurrence of a
Material Event in addition to that which is specifically required by this Undertaking, the
Board shall have no obligation under this Undertaking to update such information or
include it in any future disclosure or notice of occurrence of a Material Event.
Dated: October _, 1999
CITY OF LANSING BOARD OF
WATER AND LIGHT
By:
Its:
296170
-4-
EXHIBIT C RE: Res. #99-9-4
D
Blanket Issuer Letter of Representations
[To be Completed by Issuer]
City of Lansing, Michigan
(Name of Lssnerl
September 16i °1999
[Datel
Attention: Underwriting Department—Eligibility
The Depository Trust Company
55 Water Street;Stith Floor
New York,NY 10041-0099
Ladies and Gentlemen:
This letter sets forth our understanding with respect to aD issues (the "Securities")'that Issuer
shall request be made eligible for deposit.by The Depository Trust Company("DTC").
To induce DTC to accept the SecUrittes as eligible for deposit at DTC, and to act in accordance..
with DTC's Rules with respect to the Securities, LzSUer represents to DTC that Issuer will comply
with the reqL&ements stated in DTCs Operational Arrangements, as they may be amended from
time to time.
Note:
Schedule A contains statements that DTC believes Verytnihryours,
yd=dbeDTC,the-metbodof obi_ City of Lansing, Michigan
t rush ss cf sect distibuted t1=oagb DTC,and by and through the Board of Water and Light
cent=related mattes.
U==)
GAn&mtmd OBE's Staz=e)
Reoeived and Accepted: Dana W. Tousley, Chief Financial Officer
(T}Pewnte Name$Tie)
THE DEPOSITORY TRUST CO_MP_�-N-y 1232 Haco' Drive, P.O. Box 13007
(Sates Add ez)
By Lansing; MI 48901
(City) (Stzb--) (ZP)
(517) 371-6790
(P)aae N=ber)
SCHEDULE A
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material maybe applicable only to certain issues)
1. The Depository Trust Company (`DTC"), New York, ICY will act as securities depository for the
securities (the 'Securities"). The Securities will be issued as fully-registered securities registered in the
name of Cede & Co. (DTC's partnership nominee). One fully-registered Security certificate will be
issued for leach issue'of] the Securities, [each]in the aggregate principal amount of such issue, and will
be deposited with DTC. [1� however, the aggregate principal amount of[any] issue exceeds $200
million, one certificate will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining princq)al amount of such issue.]
2. DTC is a limited purpose trust company organized under the New York Banking Law, a'banking
0 o n=* *on" within the meaning of the New York Banking Law, a member of the Federal Reserve
System,a"clearing corporation"within the meaning of the New York Uniform Commercial Code, and a
"clearing agency"registered pursuant to the provisions of Section 17A of the Securities F.rchanb Act of
1934- DTC holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers and pledges,in deposited
securities through electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other
o banizations. DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc,the American Stock Exchange,Inc, and the National Association of Securities Dealers,
Inc Access to the DTC system is also available to others such as securities brokers and dealers, banks,
and trust companies that dear throw or maintain a custodial relationship with a Direct Particppaat:,
either directly or indirectly ('Indirect Participants"). The Rules applicable to DTC and its Participants
are on file with the Securities and EvI na Commission.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Securities on DTC's records. The ownership interest of each actual
purchaser of each Se=-Ry (`Beneficial Owner") is in tun to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation fivm DTC of their
purchase, but Beneficial Owners are expected to receive written ccmfirmations providing details of the
tr
ansaction, as well as periodic statements of their holdings, from the Direct or indirect Participant
through which the Beneficial Owner entered into the transaction.Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests
in Securities,except in the event that use of the book-entry system for the Securities is discontinued
h.To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered
in the name of DTC's partnership nominee, Cede &Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6.Redemption notices shall be sent to Cede&Co. If less than all of the Securities within an issue are
being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed]
7. Neither DTC nor Cede & Co. will consent or vote with respect to Securities. Under its usual
per, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The
Omnibus Prosy assitiw Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus
.Praty)•
S.Principal and interest payments on the Securities will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on payable date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive payment on payable date.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices,as is the rase with securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of DTC, the Agent, or the
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal and interest to DTC is the responsibility of the Issuer or the Agent, disbursement
of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.
[9.A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered,through
its Participant,to the[Tender/Remarketing]Argent,and shaIl effect delivery of such Securities by causing
the Direct Participant to transfer the Participant's interest in the Securities, on DTCs records, to the
[Tender/Remarketing]Agent The req=ement for physical delivery of Securities in connection with a
demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in
the Securities are transferred by Direct Participants on DTC's records.]
10.DTC may discontinue providing its services as sec�ies depository with respect to the Securities
at any time by giving reasonable notice to the Issuer or the Agent Under such Vices, in the
event that a successor securities depository is not obtained, Security certificates are required to be
printed and delivered
11.The Issuer may decide to discontinue use of the system of book try-transfers through DTC (or
a successor securities depository). In that event, Security certificates will be printed and delivered_
U The information in this section concerning DTC and DTC's book-entry system has been obtained
from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the
accuracy thereof_
Page 74
MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEET]Nd.
LANSING BOARD OF WATER AND LIGHT , rP , �
u
11 r,'1 ,. .rr-- l r
1.r5ic.�il a7 Li 1 i �LEfl��
Tuesday,September 2, 1999
The Board of Commissioners met in Special Session at 11:45 a.m., in the Boardroom of the Administrative
Offices, 1232 Haco Drive,Lansing,Michigan. The meeting was called to order by the Chair,Diane Royal.
Present: Commissioners Rose E. Aquilina, Ernest J. Christian, Charles M. Creamer, Mark A. Murray
(via teleconference),David O'Leary,Diane R. Royal and Judson M. Werbelow.
Absent: Commissioner Ronald C. Callen.
The Secretary declared a quorum present.
Chief Financial Officer Dana Tousley presented and reviewed changes made to Draft No. 3 of the Third
Supplemental Revenue Bond Resolution Authorizing Water Supply, Steam and Electric Utility System
Revenue Bonds of the City of Lansing,Michigan. It was noted that if market conditions change to snake it
financially worthwhile to do a refunding, changes to the resolution could be adopted at the same time the
Board adopts the selling resolution.
Following discussion,motion was made by Commissioner O'Leary, seconded by Commissioner Creamer,
to approve the following resolution:
#99-9-1
THIRD SUPPLEMENTAL REVENUE BOND RESOLUTION AUTHORIZING
WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE BONDS
OF THE CITY OF LANSING,MICHIGAN
RESOLVED THAT:
Section 1. Supplemental Resolution. This Third Supplemental Revenue Bond Resolution
is supplemental to, and is adopted in accordance with Section 23(a)(i)of,the Bond Resolution.
Section 2. Definitions. Unless the context indicates that another meaning is intended,the
following words and terms used in this Third Supplemental Revenue Bond Resolution shall have the
following meanings, and any other words and terms which are defined in Act 94 or in the Bond Resolution
shall have the meanings as therein defined:
(i) "Bond Resolution"means the Amended And Restated Bond Resolution adopted
by the Board on October 24, 1989, as supplemented and amended from time to time.
(ii) "Series 1999A Bonds"means the Water Supply, Steam and Electric Utility
System Revenue Bonds, Series 1999A authorized by Section 4 of this Third Supplemental Revenue Bond
Resolution.
(iii) "Series 1994A Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1994A issued pursuant to the Bond Resolution,
(iv) Series 1994B Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution.
Board Minutes Page 75
September 2, 1999
(v) "Series 1989A Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1989A issued pursuant to the Bond Resolution.
(vi) "Series 1989B Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1989B issued pursuant to the Bond Resolution.
(vii) "Series 1999A Sales Resolution"means the Resolution of the Board authorizing
the sale and delivery of the Series 1999 Bonds.
(viii) "1999 Project"means the remodeling,updating and extending the life of the
water,steam, and electric utilities of the City of Lansing, including some or all of the following:
(i)capacity improvement and expansion of the filter press system at Dye Water Conditioning Plant,
(ii)construction of electric transmission and distribution substations,(iii)the improvement and extension
of a water distribution system in Dewitt,Michigan,(iv)construction of a water pumping station, and
(v)construction of a chiller plant and related distribution system to serve a downtown chilled water district.
Section 3. Necessity,Estimate of Cost and Useful Life. It is determined to be necessary
for the public health, safety and welfare of the City to remodel,update and extend the life of the System by
acquiring the 1999 Project. The estimated cost of the 1999 Project is$42,361,000 and the estimated useful
life of the 1999 Project is not less than 30 years.
Section 4. Authorization of Series 1999A Bonds. To pay a portion of the cost of acquiring,
constructing and equipping the 1999 Project, including making a deposit to a reserve fund and payment of
legal, financial and other expenses of the issuance of the Series 1999A Bonds,the City,by and through the
Board, shall borrow a sum not in excess of Fifty Million Dollars ($50,000,000),as finally determined in the
Series 1999A Sales Resolution,which sum is presently estimated to be Forty-Nine Million Dollars
($49,000,000),pursuant to the provisions of Act 94.
Section 5. Bond Details,Parameters and Security. The Series 1999A Bonds shall be
designated"Water Supply, Steam And Electric Utility System Revenue Bonds, Series 1999A,"shall be of
equal standing in priority of lien on the Net Revenues of the System with the Series 1989A Bonds,the
Series 1989B Bonds,the Series 1994A Bonds,the Series 1994B Bonds and any other Additional Bonds,
shall be payable solely out of Net Revenues and any other moneys pledged under the Bond Resolution and
shall not be a general obligation of the City. Series 1999A Bonds shall be issued in denominations of
$5,000 or any integral multiples of$5,000 not exceeding the amount of the Series 1999A Bonds maturing
on the same date and shall be numbered in consecutive order of authentication from 1 upwards. The
Series 1999A Bonds shall be issued as fully registered bonds without coupons and shall have an original
issuance date of their dated date,or such other date as the Board shall approve in the Series 1999A Sales
Resolution.
The Series 1999A Bonds shall bear interest at a rate or rates to be determined in the Series 1999A
Sales Resolution,not exceeding seven percent(7%)per annum, shall mature no later than July 1,2020.
Interest shall be payable on January 1,2000, or such other date as the Board shall approve in the
Series 1999A Sales Resolution,and on each July 1 and January 1 thereafter,by check drawn on the
Transfer Agent and mailed to each Registered Owner at the registered address, as shown on the registration
books of the City maintained by the Transfer Agent. Interest on the Series 1999A Bonds shall be payable
to each Registered Owner as of the 15th day of the month prior to the date on which the interest payment is
due. Interest on the Series 1999A Bonds shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. The principal of the Series 1999A Bonds shall be payable at the principal office of
the Transfer Agent upon presentation and surrender thereof,provided,however, if part of an Outstanding
Series 1999A Bond registered in the name of a securities depository company as part of a book-entry
system is selected for redemption,the securities depository company may retain the Series 1999A Bond
and make an appropriate notation on the Series 1999A Bond indicating the date and amount of the
Page 76 Board Minutes
September 2, 1999
reduction in the principal amount of the Series 1999A Bond resulting from the partial redemption,
however,in the case of the final payment of the remaining principal amount of the Series 1999A Bond,the
Series 1999A Bond shall be presented and surrendered to the Transfer Agent as a condition of payment.
The aggregate principal amount of the Series 1999A Bonds,the amount of each maturity and the
designation of serial and teen bonds, if any, shall be as finally determined in the Series 1999A Sales
Resolution.
The Series 1999A Bonds shall be subject to redemption as provided in the Series 1999A Sales
Resolution.
Section 6. Series 1999A Bond Proceeds. From the proceeds of the sale of the
Series 1999A Bonds,there shall be immediately deposited in(a)the Redemption Fund an amount equal to
the accrued interest and premium, if any,received on delivery of the Series 1999A Bonds and the City
shall receive a credit equal to the amount so deposited against the amount required to be deposited in the
Redemption Fund for payment of the next maturing interest and(b)the Bond Reserve Account,the amount
required by the Bond Resolution. The remaining proceeds of the Series 1999A Bonds shall be used to pay
the costs of acquiring the Series 1999 Project and to pay the costs of issuing the Series 1999A Bonds.
Section 7. Book-Entry System- Series 1999A Bonds. Initially, one fully-registered
Series 1999A Bond for each maturity, in the aggregate amount of such maturity,will be issued in the name
of Cede&Co., as nominee of The Depository Trust Company,for participation in the book-entry transfer
system of The Depository Trust Company. In the event the City decides to discontinue participation in the
book-entry transfer system of The Depository Trust Company(or a successor securities depository),the
City shall notify the Transfer Agent and The Depository Trust Company, in writing, and thereafter the City
shall execute and the Transfer Agent shall authenticate and deliver Series 1999A Bonds requested by the
bondholders or to a successor securities depository. In the event The Depository Trust Company
discontinues providing services as a securities depository for the Series 1999A Bonds and the City does not
designate a successor securities depository,the City shall execute and the Transfer Agent shall authenticate
and deliver Series 1999A Bonds to the bondholders.
Section 8. Bond Form. The Series 1999A Bonds shall be in substantially the following
form:
Board Minutes Page 77
September 2, 1999
[SERIES 1999A BONDS]
UNITED STATES OF AMERICA
STATE OF MICHIGAN
INGHAM AND EATON COUNTIES
CITY OF LANSING
WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM
REVENUE BONDS, SERIES 1999A
Interest Rate Maturity Date of
Per Annum Date Original Issuance CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The CITY OF LANSING, Ingham and Eaton Counties, State of Michigan(the "City"), for value
received,promises to pay the Principal Amount to the Registered Owner on the Maturity Date with interest
thereon from the Date of Original Issue,or such later date to which interest has been paid,until paid at the
Interest Rate Per Annum,payable on January 1,2000, and on each July 1 and January 1 thereafter until the
obligation of the City to pay the Principal Amount is satisfied. Principal of this Bond is payable at the
principal office of National City Bank of Michigan/Illinois, or such other transfer agent as the City may
hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest
payment date(the"Transfer Agent"). Interest on this Bond is payable to the registered owner of this Bond
as of the 15th day of the month next preceding the payment date as shown on the registration books of the
City kept by the Transfer Agent by check or draft mailed to the registered owner at the registered address.
The revenues of the facilities of the City for the supply and distribution of water and the generation and
distribution of electricity,steam and heat(the "System")after provision has been made for reasonable and
necessary expenses of operation,maintenance and administration of the System(the "Net Revenues"), are
irrevocably pledged and a statutory lien thereon has been created to secure the payment of the principal of
and interest on this Bond,when due;however,the pledge of Net Revenues and the statutory lien are on a
parity with the pledge of Net Revenues and statutory lien in favor of the City of Lansing's Water Supply
and Electric Utility System Revenue Bonds, Series 1989A,its Water Supply and Electric Utility System
Revenue Bonds, Series 1989B, its Water Supply and Electric Utility System Revenue Bonds, Series 1994A
and its Water Supply and Electric Utility System Revenue Bonds, Series 1994B and any Additional Bonds
(as defined below)which may be issued by the City. Interest on this Bond shall be computed on the basis
of a 360-day year consisting of twelve 30-day months.
This Bond is one of a series of bonds of like tenor, except as to denomination,rate of interest, date
of maturity and prior redemption, aggregating the principal sum of$ ,issued pursuant to an
Amended And Restated Bond Resolution adopted by the Board of Water and Light of the City(the
"Board")on October 24, 1993, as supplemented from time to time,including by a Third Supplemental
Revenue Bond Resolution adopted by the Board on September_, 1999 (collectively,the "Bond
Resolution"), and under and in full compliance with the Constitution and statutes of the State of Michigan,
including specifically Act 94,Public Acts of Michigan, 1933,as amended,for the purpose of paying part
Page 78 Board Minutes
September 2, 1999
of the cost of remodeling, updating and extending the life of the System, making a deposit to a bond
reserve account and paying the costs of issuing the bonds.
For a complete statement of the revenues from which and the conditions under which this Bond is
payable,a statement of the conditions under which additional bonds("Additional Bonds")of equal
standing may hereafter be issued,the rights and limitations on the owners of the bonds and the general
covenants and provisions pursuant to which this Bond is issued,reference is made to the Bond Resolution.
Bonds of this series maturing prior to July 1, , are not subject to redemption prior to their
respective dates of maturity. Bonds of this series maturing on and after July 1, are subject to
redemption prior to maturity, at the option of the Board, at any time on and after July 1, ,in whole or
in part, in the amount selected by the Board,in order of maturities selected by the Board and within a
maturity by lot, at the redemption price of par, [without premium,]plus accrued interest to the date of
redemption.
Notice of the call of Bonds for redemption shall be mailed to the registered owner not less than 30
days prior to the date fixed for redemption at the address shown on the registration books of the City.
Failure to receive such notice shall not affect the validity of the proceedings for redemption. Bonds called
for redemption shall not bear interest after the date fixed for redemption,provided funds are on hand with
the Transfer Agent to redeem the bonds called for redemption.
This Bond is a self-liquidating bond and is not a general obligation of the City or the Board and
does not constitute an indebtedness of the City or the Board within any constitutional, statutory or charter
limitation,but is payable,both as to principal and interest, solely from the Net Revenues of the System.
The principal of and interest on this Bond are secured by a statutory lien on the Net Revenues of the
System; provided however,the statutory lien securing this Bond is on a parity of security with the statutory
lien securing the other Bonds of this series,the Series 1989A Bonds,the Series 1989B Bonds,the
Series 1994A Bonds,the Series 1994B Bonds and any Additional Bonds which may be issued by the City.
The Board has covenanted and agreed,and covenants and agrees,to fix and maintain at all times
while any bonds payable from the Net Revenues of the System shall be outstanding, such rates for service
furnished by the System as shall be sufficient to provide for payment of the principal of and interest on the
bonds of this issue and any other bonds payable from the Net Revenues as and when the same shall become
due and payable,to provide for the payment of expenses of administration and operation and such
expenses for maintenance of the System as are necessary to preserve the same in good repair and working
order, and to provide for such other expenditures and funds for the System as are required by the Bond
Resolution.
This Bond is transferable only upon the registration books of the City kept by the Transfer Agent
by the Registered Owner hereof in person, or by his or her attorney duly authorized in writing,with a
written instrument of transfer satisfactory to the Transfer Agent duly executed by the Registered Owner or
his or her attorney duly authorized in writing, and thereupon a new registered bond or bonds in the same
aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor
as provided in the Bond Resolution and upon the payment of the charges, if any,therein prescribed. The
City shall not be required to register the transfer of or exchange any Bond selected for redemption in whole
or in part, except the unredeemed portion of bonds being redeemed in part.
It is certified and recited that all acts,conditions and things required by law precedent to and in
the issuance of this Bond and the series of bonds of which this is one have been done and performed in
regular and due time and form as required by law.
This Bond is not valid or obligatory for any purpose until the Certificate of Authentication on this
Bond has been executed by the Transfer Agent.
Board Minutes Page 79
September 2, 1999
IN WITNESS WHEREOF,the City of Lansing,Ingham and Eaton Counties, State of Michigan,
by and through its Board of Water and Light,has caused this Bond to be executed with the facsimile
signatures of its Chairman and its Secretary and the corporate seal of the City to be printed on this Bond.
CITY OF LANSING
(FACSIMILE)
Chairperson
By: (FACSIMILE)
Secretary
(Seal)
Page 80 Board Minutes
September 2, 1999
Certificate of Authentication
This Bond is one of the bonds described in the within-mentioned Bond Resolution.
Transfer Agent
By:
Authorized Representative
Date of Authentication:
Board Minutes Page 81
September 2, 1999
ASSIGNMENT
FOR VALUE RECEIVED,the undersigned sells, assigns and transfers unto
(Please print or typewrite name and address of transferee)
the within bond and all rights thereunder, and irrevocably constitutes and appoints
attorney to transfer-the within bond on the books kept for
recr thereof,with full power of substitution in the premises.
Dated:
Signature Guaranteed: NOTICE: The signature(s)to this assignment
must correspond with the name as it appears
upon the face of the within bond in every
particular,with-out alteration or enlargement
or any change whatsoever.
Signature(s)must be guaranteed by an eligible guarantor institution participating in a Securities Transfer
Association recognized signature guaranty program. The Transfer Agent will not effect transfer of this
Bond unless the information concerning the transferee requested below is provided.
Name and Address:
PLEASE INSERT SOCIAL SECURITY
NUMBER OR OTHER IDENTIFYING
NUMBER OF TRANSFEREE.
(Include information for all joint owners
if the bond is held by joint account)
(Insert number for first named transferee
if held by joint account)
Page 82 Board Minutes
September 2, 1999
Section 9. Tax Status. The City covenants to comply with all requirements of the Internal
Revenue Code of 1986, as amended,necessary to assure that the interest on the Series 1999A Bonds will
be and will remain excludable from gross income for federal income tax purposes.
Section 10. Preliminary Official Statement. The preparation and distribution of a
preliminary official statement in substantially the form presented at this meeting is approved,with such
changes as the Chairperson or any Commissioner and the General Manager and Chief Financial Officer
may, in consultation with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate.
Section 11. Staff Action. The Board ratifies and confirms actions taken and filings made by
Staff necessary to effectuate the sale of the Series 1999A Bonds, including filing for an exception from
prior approval or approval with the Department of Treasury. The Chairperson, any Commissioner,the
General Manager and the Chief Financial Officer are severally authorized to execute such certificates and
other documents and to take such other actions or make such other filings as may be necessary or
convenient to effectuate the proper sale,execution and delivery of the Series 1999A Bonds.
Section 12. Conflicting Resolutions. All resolutions or orders,or parts thereof, in conflict
with the provisions of this Third Supplemental Revenue Bond Resolution are repealed.
Section 13. Severability and Paragraph Headings. If any section,paragraph, clause or
provision of this Third Supplemental Revenue Bond Resolution shall be held invalid,the invalidity of such
section,paragraph,clause or provision shall not affect any other provisions of this Third Supplemental
Revenue Bond Resolution. The paragraph headings in this Third Supplemental Revenue Bond Resolution
are furnished for convenience of reference only and shall not be considered to be a part of this Third
Supplemental Revenue Bond Resolution.
Section 14. Publication and Recordation. This Third Supplemental Revenue Bond
Resolution shall be published in full in The Lansing State Journal,a newspaper of general circulation in the
City of Lansing qualified under State law to publish legal notices,promptly after its adoption, and shall be
recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson
and the Secretary.
Section 15. Effective Date. This Third Supplemental Revenue Bond Resolution shall be
effective immediately upon its adoption.
Adopted and signed on the 2"d day of September, 1999.
/s/Diane R. Royal /s/Mary E. Sova
Chairperson Secretary
ADOPTED: IN FAVOR Commissioners Aquilina, Christian, Creamer,Murray, O'Leary,
Royal,and Werbelow.
AGAINST None.
ABSTAIN None.
ABSENT Commissioner Callen.
Board Minutes Page 83
September 2, 1999
ADJOURNMENT
On motion by Commissioner O'Leary, seconded by Commissioner Creamer, the meeting adjourned at
12:05 p.m.
/s/Mary E. Sova, Secretary
Filed: September 3, 1999
Marilynn Slade, City Clerk
15:37 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 2/11
Page 74
MINUTES OF THE BOARD OF COMMISSIONERS' SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,September 2,1999 LA,,is
.3!,:G C 1 T Y CLERK
The Board of Commissioners met in Special Session at 11:45 a.m.,in the Boardroom of the Administrative
Offices, 1232 Haco Drive,Lansing,Michigan. The meeting was called to order by the Chair,Diane Royal.
Present: Commissioners Rose E. Aquilina,Ernest J. Christian,Charles M. Creamer,Mark A Murray (via
teleconference),David O'Leary,Diane R.Royal and Judson M. Werbelow.
Absent: Commissioner Ronald C. Callen.
The Secretary declared a quorum present.
Chief Financial Officer Dana Tousley presented and reviewed changes made to Draft No. 3 of the Third
Supplemental Revenue Bond Resolution Authorizing Water Supply,Steam and Electric Utility System
Revenue Bonds of the City of Lansing,Michigan. It was noted that if market conditions change to make it
financially worthwhile to do a refunding,changes to the resolution could be adopted at the same time the
Board adopts the selling resolution.
Following discussion,motion was made by Commissioner O'Leary,seconded by Commissioner Creamer,to
approve the following resolution:
499-9-1
THIRD SUPPLEMENTAL REVENUE BOND RESOLUTION AUTHORIZING
WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM REVENUE BONDS
OF THE CITY OF LANSING,MICHIGAN
RESOLVED THAT:
Section 1. Supplemental Resolution. This Third Supplemental Revenue Bond Resolution is
supplemental to,and is adopted in accordance with Section 23(a)(1)of,the Bond Resolution.
Section 2. Definitions. Unless the context indicates that another meaning is intended,the
following words and terms used in this Third Supplemental Revenue Bond Resolution shall have the
following meanings,and any other words and terms which are defined in Act 94 or in the Bond Resolution
shall have the meanings as therein defined:
(i) 'Bond Resolution"means the Amended And Restated Bond Resolution adopted
by the Board on October 24, 1989,as supplemented and amended from time to time.
(ii) "Series 1999A Bonds"means the Water Supply, Steam and Electric Utility System
Revenue Bonds, Series 1999A authorized by Section 4 of this Third Supplemental Revenue Bond Resolution.
(iii) "Series 1994A Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1994A issued pursuant to the Bond Resolution.
(iv) Series 1994B Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1994B issued pursuant to the Bond Resolution.
(v) "Series 1989A Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1989A issued pursuant to the Bond Resolution.
15:37 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *72792 PAGE: 3/11
Board Minutes Page 75
September 2, 1999
(vi) "Series 1989B Bonds"means the Water Supply And Electric Utility System
Revenue Bonds, Series 1989B issued pursuant to the Bond Resolution.
(vii) "Series 1999A Sales Resolution"means the Resolution of the Board authorizing
the sale and delivery of the Series 1999 Bonds.
(viii) "1999 Project"means the remodeling,updating and extending the life of the water,
steam,and electric utilities of the City of Lansing,including some or all of the following: (i)capacity
improvement and expansion of the filter press system at Dye Water Conditioning Plant,(ii)construction of
electric transmission and distribution substations,(iii)the improvement and extension of a water distribution
system in Dewitt,Michigan,(iv)construction of a water pumping station,and(v)construction of a chiller
plant and related distribution system to serve a downtown chilled water district.
Section 3. Necessity,Estimate of Cost and Useful Life. It is determined to be necessary for
the public health,safety and welfare of the City to remodel,update and extend the life of the System by
acquiring the 1999 Project. The estimated cost of the 1999 Project is$42,361,000 and the estimated useful
life of the 1999 Project is not less than 30 years.
Section 4. Authorization of Series 1999A Bonds. To pay a portion of the cost of acquiring,
constructing and equipping the 1999 Project,including making a deposit to a reserve fund and payment of
legal,financial and other expenses of the issuance of the Series 1999A Bonds,the City,by and through the
Board,shall borrow a sum not in excess of Fifty Million Dollars($50,000,000),as finally determined in the
Series 1999A Sales Resolution,which sum is presently estimated to be Forty-Nine Million Dollars
($49,000,000),pursuant to the provisions of Act 94.
Section 5. Bond Details,Parameters and Security. The Series 1999A Bonds shall be
designated"Water Supply, Steam And Electric Utility System Revenue Bonds, Series 1999A,"shall be of
equal standing in priority of lien on the Net Revenues of the System with the Series 1989A Bonds,the
Series 1989B Bonds,the Series 1994A Bonds,the Series 1994B Bonds and any other Additional Bonds,
shall be payable solely out of Net Revenues and any other moneys pledged under the Bond Resolution and
shall not be a general obligation of the City. Series 1999A Bonds shall be issued in denominations of$5,000
or any integral multiples of$5,000 not exceeding the amount of the Series 1999A Bonds maturing on the same
date and shall be numbered in consecutive order of authentication from 1 upwards. The Series 1999A Bonds
shall be issued as fully registered bonds without coupons and shall have an original issuance date of their
dated date,or such other date as the Board shall approve in the Series 1999A Sales Resolution.
The Series 1999A Bonds shall bear interest at a rate or rates to be determined in the Series 1999A
Sales Resolution,not exceeding seven percent(7%)per annum,shall mature no later than July 1,2020.
Interest shall be payable on January 1,2000,or such other date as the Board shall approve in the Series 1999A
Sales Resolution,and on each July 1 and January 1 thereafter,by check drawn on the Transfer Agent and
mailed to each Registered Owner at the registered address,as shown on the registration books of the City
maintained by the Transfer Agent. Interest on the Series 1999A Bonds shall be payable to each Registered
Owner as of the 15th day of the month prior to the date on which the interest payment is due. Interest on the
Series 1999A Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months.
The principal of the Series 1999A Bonds shall be payable at the principal office of the Transfer Agent upon
presentation and surrender thereof,provided,however,if part of an Outstanding Series 1999A Bond registered
in the name of a securities depository company as part of a book-entry system is selected for redemption,the
securities depository company may retain the Series 1999A Bond and make an appropriate notation on the
Series 1999A Bond indicating the date and amount of the reduction in the principal amount of the
Series 1999A Bond resulting from the partial redemption,however,in the case of the final payment of the
remaining principal amount of the Series 1999A Bond,the Series 1999A Bond shall be presented and
surrendered to the Transfer Agent as a condition of payment. The aggregate principal amount of the
Series 1999A Bonds,the amount of each maturity and the designation of serial and term bonds,if any, shall
be as finally determined in the Series 1999A Sales Resolution.
15:3e SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 4/11
Page 76 Board Minutes
September 2, 1999
The Series 1999A Bonds shall be subject to redemption as provided in the Series 1999A Sales
Resolution.
Section 6, Series 1999A Bond Proceeds. From the proceeds of the sale of the Series 1999A
Bonds,there shall be immediately deposited in(a)the Redemption Fund an amount equal to the accrued
interest and premium, if any,received on delivery of the Series 1999A Bonds and the City shall receive a
credit equal to the amount so deposited against the amount required to be deposited in the Redemption Fund
for payment of the next maturing interest and(b)the Bond Reserve Account,the amount required by the Bond
Resolution. The remaining proceeds of the Series 1999A Bonds shall be used to pay the costs of acquiring
the Series 1999 Project and to pay the costs of issuing the Series 1999A Bonds.
Section 7. Book-Entry System-Series 1999A Bonds. Initially,one fully-registered
Series 1999A Bond for each maturity,in the aggregate amount of such maturity,will be issued in the name of
Cede&Co.,as nominee of The Depository Trust Company,for participation in the book-entry transfer system
of The Depository Trust Company. In the event the City decides to discontinue participation in the book-
entry transfer system of The Depository Trust Company(or a successor securities depository),the City shall
notify the Transfer Agent and The Depository Trust Company,in writing,and thereafter the City shall execute
and the Transfer Agent shall authenticate and deliver Series 1999A Bonds requested by the bondholders or to
a successor securities depository. In the event The Depository Trust Company discontinues providing services
as a securities depository for the Series 1999A Bonds and the City does not designate a successor securities
depository,the City shall execute and the Transfer Agent shall authenticate and deliver Series 1999A Bonds
to the bondholders.
Section S. Bond Form. The Series 1999A Bonds shall be in substantially the following form:
15:39 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 5/11
Board Minutes Page 77
September 2, 1999
[SERIES 1999A BONDS]
UNITED STATES OF AMERICA
STATE OF M[CHIGAN
INGILAM AND EATON COUNTIES
CITY OF LANSING
WATER SUPPLY, STEAM AND ELECTRIC UTILITY SYSTEM
REVENUE BONDS, SERIES 1999A
Interest Rate Maturity Date of
Per Annum Date Original Issuance CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The CITY OF LANSING,Ingham and Eaton Counties, State of Michigan(the"City"),for value
received,promises to pay the Principal Amount to the Registered Owner on the Maturity Date with interest
thereon from the Date of Original Issue,or such later date to which interest has been paid,until paid at the
Interest Rate Per Annum,payable on January 1,2000,and on each July 1 and January 1 thereafter until the
obligation of the City to pay the Principal Amount is satisfied. Principal of this Bond is payable at the
principal office of National City Bank of Michigan/Illinois,or such other transfer agent as the City may
hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest
payment date(the"Transfer Agent"). Interest on this Bond is payable to the registered owner of this Bond as
of the 15th day of the month next preceding the payment date as shown on the registration books of the City
kept by the Transfer Agent by check or draft mailed to the registered owner at the registered address. The
revenues of the facilities of the City for the supply and distribution of water and the generation and
distribution of electricity,steam and heat(the"System")after provision has been made for reasonable and
necessary expenses of operation,maintenance and administration of the System(the'Net Revenues"),are
irrevocably pledged and a statutory lien thereon has been created to secure the payment of the principal of and
interest on this Bond,when due;however,the pledge of Net Revenues and the statutory lien are on a parity
with the pledge of Net Revenues and statutory lien in favor of the City of Lansing's Water Supply and Electric
Utility System Revenue Bonds, Series 1989A,its Water Supply and Electric Utility System Revenue Bonds,
Series 1989B,its Water Supply and Electric Utility System Revenue Bonds, Series 1994A and its Water
Supply and Electric Utility System Revenue Bonds, Series 1994B and any Additional Bonds(as defined
below)which maybe issued by the City. Interest on this Bond shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
This Bond is one of a series of bonds of like tenor,except as to denomination,rate of interest,date
of maturity and prior redemption,aggregating the principal sum of$ issued pursuant to an
Amended And Restated Bond Resolution adopted by the Board of Water and Light of the City(the'Board")
on October 24, 1993, as supplemented from time to time,including by a Third Supplemental Revenue Bond
Resolution adopted by the Board on September_, 1999(collectively,the'Bond Resolution"),and under and
in full compliance with the Constitution and statutes of the State of Michigan,including specifically Act 94,
Public Acts of Michigan, 1933,as amended,for the purpose of paying part of the cost of remodeling,updating
and extending the life of the System,making a deposit to a bond reserve account and paying the costs of
issuing the bonds.
15:40 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 6/11
Page 78 Board Minutes
September 2, 1999
For a complete statement of the revenues from which and the conditions under which this Bond is
payable,a statement of the conditions under which additional bonds("Additional Bonds")of equal standing
may hereafter be issued,the rights and limitations on the owners of the bonds and the general covenants and
provisions pursuant to which this Bond is issued,reference is made to the Bond Resolution.
Bonds of this series maturing prior to July 1, are not subject to redemption prior to their
respective dates of maturity. Bonds of this series maturing on and after July 1, ,are subject to
redemption prior to maturity,at the option of the Board,at any time on and after July 1, ,in whole or in
part,in the amount selected by the Board,in order of maturities selected by the Board and within a maturity
by lot,at the redemption price of par, [without premium,]plus accrued interest to the date of redemption.
Notice of the call of Bonds for redemption shall be mailed to the registered owner not less than 30
days prior to the date fixed for redemption at the address shown on the registration books of the City. Failure
to receive such notice shall not affect the validity of the proceedings for redemption. Bonds called for
redemption shall not bear interest after the date fixed for redemption,provided funds are on hand with the
Transfer Agent to redeem the bonds called for redemption.
This Bond is a self-liquidating bond and is not a general obligation of the City or the Board and does
not constitute an indebtedness of the City or the Board within any constitutional,statutory or charter
limitation,but is payable,both as to principal and interest,solely from the Net Revenues of the System. The
principal of and interest on this Bond are secured by a statutory lien on the Net Revenues of the System;
provided however,the statutory lien securing this Bond is on a parity of security with the statutory lien
securing the other Bonds of this series,the Series 1989A Bonds,the Series 1989B Bonds,the Series 1994A
Bonds,the Series 1994B Bonds and any Additional Bonds which may be issued by the City.
The Board has covenanted and agreed, and covenants and agrees,to fix and maintain at all times
while any bonds payable from the Net Revenues of the System shall be outstanding,such rates for service
furnished by the System as shall be sufficient to provide for payment of the principal of and interest on the
bonds of this issue and any other bonds payable from the Net Revenues as and when the same shall become
due and payable,to provide for the payment of expenses of administration and operation and such expenses
for maintenance of the System as are necessary to preserve the same in good repair and working order, and to
provide for such other expenditures and funds for the System as are required by the Bond Resolution.
This Bond is transferable only upon the registration books of the City kept by the Transfer Agent by
the Registered Owner hereof in person,or by his or her attorney duly authorized in writing,with a written
instrument of transfer satisfactory to the Transfer Agent duly executed by the Registered Owner or his or her
attorney duly authorized in writing,and thereupon a new registered bond or bonds in the same aggregate
principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in
the Bond Resolution and upon the payment of the charges,if any,therein prescribed. The City shall not be
required to register the transfer of or exchange any Bond selected for redemption in whole or in part,except
the unredeemed portion of bonds being redeemed in part.
It is certified and recited that all acts,conditions and things required by law precedent to and in the
issuance of this Bond and the series of bonds of which this is one have been done and performed in regular
and due time and form as required by law.
This Bond is not valid or obligatory for any purpose until the Certificate of Authentication on this
Bond has been executed by the Transfer Agent.
--- - — 0 Mc
15:41 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 7/11
Board Minutes Page 79
September 2, 1999
IN WITNESS WHEREOF,the City of Lansing,Ingham and Eaton Counties, State of Michigan,by
and through its Board of Water and Light,has caused this Bond to be executed Anth the facsimile signatures
of its Chairman and its Secretary and the corporate seal of the City to be printed on this Bond.
CITY OF LANSING-
D3L._(FACSDjME)
Chairperson
By_(FACSD E LE)
Secretary
(Seal)
--- -- ---- •—-�. .,^...._,.-. .-.� ..T�.-, ..-. r,�., o ram
15:41 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 8/11
Page 80 Board Minutes
September 2, 1999
Certificate of Authentication
This Bond is one of the bonds described in the within-mentioned Bond Resolution.
Transfer Agent
By:
Authorized Representative
Date of Authentication:
15:41 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 9/11
Board Minutes. Page 81
September 2, 1999
ASSIGNMENT
FOR VALUE RECEIVED,the undersigned sells,assigns and transfers unto
(Please print or typewrite name and address of transferee)
the within bond and all rights thereunder,and irrevocably constitutes and appoints
attorney to transfer the within bond on the books kept for
registration thereof,with full power of substitution in the premises.
Dated:
Signature Guaranteed: NOTICE: The signature(s)to this assignment
must correspond with the name as it appears
upon the face of the within bond in every
particular,with-out alteration or enlargement
or any change whatsoever.
Signature(s)must be guaranteed by an eligible guarantor institution participating in a Securities Transfer
Association recognized signature guaranty program. The Transfer Agent will not effect transfer of this Bond
unless the information concerning the transferee requested below is provided.
Name and Address:
PLEASE INSERT SOCIAL SECURITY
NUIv BER OR OTTER IDE=YING
NUMBER OF TRANSFEREE.
(Include information for all joint owners
if the bond is held by joint account)
(Insert number for first named transferee
if held by joint account)
15:41 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE 10/11
Page 82 Board Minutes
September 2, 1999
Section 9. Tax Status. The City covenants to comply with all requirements of the Internal
Revenue Code of 1986,as amended,necessary to assure that the interest on the Series 1999A Bonds will be
and will remain excludable from gross income for federal income tax purposes.
Section 10. Preliminary Official Statement. The preparation and distribution of a preliminary
official statement in substantially the form presented at this meeting is approved,with such changes as the
Chairperson or any Commissioner and the General Manager and Chief Financial Officer may,in consultation
with the Staff Attorney and Bond Counsel, determine to be necessary or appropriate.
Section 11. Staff Action. The Board ratifies and confirms actions taken and filings made by
Staff necessary to effectuate the sale of the Series 1999A Bonds,including filing for an exception from prior
approval or approval with the Department of Treasury. The Chairperson,any Commissioner,the General
Manager and the Chief Financial Officer are severally authorized to execute such certificates and other
documents and to take such other actions or make such other filings as may be necessary or convenient to
effectuate the proper sale,execution and delivery of the Series 1999A Bonds.
Section 12. Conflicting Resolutions. All resolutions or orders,or parts thereof,in conflict
with the provisions of this Third Supplemental Revenue Bond Resolution are repealed.
Section 13. Severability and Paragraph Headings. If any section,paragraph,clause or
provision of this Third Supplemental Revenue Bond Resolution shall be held invalid,the invalidity of such
section,paragraph,clause or provision shall not affect any other provisions of this Third Supplemental
Revenue Bond Resolution. The paragraph headings in this Third Supplemental Revenue Bond Resolution are
furnished for convenience of reference only and shall not be considered to be a part of this Third
Supplemental Revenue Bond Resolution.
Section 14. Publication and Recordation. This Third Supplemental Revenue Bond Resolution
shall be published in full in The Lansing State Journal,a newspaper of general circulation in the City of
Lansing qualified under State law to publish legal notices,promptly after its adoption,and shall be recorded
in the minutes of the Board and such recording authenticated by the signatures of the Chairperson and the
Secretary.
Section 15. Effective Date. This Third Supplemental Revenue Bond Resolution shall be
effective immediately upon its adoption.
Adopted and signed on the 2°d day of September, 1999.
/s/Diane R.Royal /s/Mary E. Sova
Chairperson Secretary
ADOPTED: IN FAVOR Commissioners Aquilina,Christian,Creamer,Murray,O'Leary,
Royal, and Werbelow.
AGAINST None.
ABSTAIN None.
ABSENT Commissioner Callen.
15:42 SEP 03, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72792 PAGE: 11/11
Board Minutes Page 83
September 2, 1999
ADJOURNMENT
On motion by Commissioner O'Leary, seconded by Commissioner Creamer, the meeting adjourned at 12:05
p.m.
Is/Mary E. Sovq Secretary
Filed: September 3, 1999
Marilynn Slade,City Clerk
Page 65
MINUTES OF THE BOARD OF COMMISSIONERS, MEETING`; I�I r 3 ( ^;:j 1-2; 3
LANSING BOARD OF WATER AND LIGHT LAI` UNG CITY CLERK
Tuesday, August 24, 1999
The Board of Commissioners met in regular session at 5:38 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Ernest J. Christian, Mark A. Murray, David O'Leary, Diane R.
Royal and Judson M. Werbelow.
Absent: Commissioners Rosemarie E. Aquilina, Ronald C. Callen and Charles M.
Creamer.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner Werbelow, to
approve the minutes of regular session held July 27, 1999.
Carried 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.
Councilmember Sandy Allen (2"d Ward) appeared before the Board to ask for BWL
support as a sponsor in the Celebrity Lip Sync Review to be held at the Lansing
Community College (LCC) Dart Auditorium on October 24th. This annual fundraiser
benefits the LCC Foundation and provides Rinds for scholarships to those who meet the
academic criteria and financial need. A brochure with details of the fundraiser will be
provided to General Manager Pandy.
The Board will take this matter under advisement.
i I
Page 66 Board Minutes
August 24, 1999
SPECIAL CEREMONY
General Manager Pandy recognized Dorne Croley and James O. Macklin with the
following proclamation: (They were present to receive their plague)
On May 17, 199, Lansing experienced a severe windstorm causing loss of
power to as many as 15,000 customers. Following the storm, you were on
an outage call and had stopped to examine damage in the backyard of an
elderly BWL customer. When you went to the customer's door to inform
them of the work that would be going on in their yard, you noticed the
smell of gas and the residents seemed disoriented. You reported it to
Consumers Energy, alerted the Fire Department paramedics, and made
sure the residents evacuated their home. It.was, in fact,:a gas leaks and
your immediate action and follow-through averted a possibly fatal event.
We, at the Board of Water and Light, would like you to know that your
efforts and dedication to customer service and public safety are
acknowledged and appreciated.
General Manager Pandy also recognized Lawrence Taylor, Jayne Hoxie, Charles
Murphy, and Joseph Scott and read the following proclamation: (Charles Murphy was
present to receive his plaque.)
On Sunday, July 25, 1999, you assisted in the rescue of a BWL customer
from her burning home. The ladder you put up to her second floor
stairwell window enabled her to exit her home without having to pass
through the smoke-filled main floor. The Fire Department reported that
she would not have survived the thick smoke had she attempted a main
floor escape. The homeowner was additionally grateful to for saving her
dog, Buddy, by breaking down the locked,front door, which allowed him
to escape.
We, at the Board of Water and Light, would like you to know that your
efforts and dedication to customer service and public safety are
acknowledged and appreciated.
There was a round of applause in honor of these employees.
COMMUNICATIONS
No Communications.
Board Minutes Page 67
August 24, 1999
REPORTS OF COMMITTEES
The Committee of the Whole Report for the meeting held August 24, 1999, will be
presented to the Board at the regular meeting of September 28, 1999.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-8-1
ANNUAL COMMODITY PURCHASES
RESOLVED, That 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 be purchased. Pricing is firm through
August 31, 2000. Commodity quantities are released as required over the 12-month
period. All commodities were competitively bid in accordance'with the B WL Purchasing
Policy and Procedures. Below is a summary of the lowest and best-evaluated bids.
Commodity Annual Unit Annual Cost Vendor
uantit (Est.) Cost (Est.)
Hydrofluosilicic Acid 200 tons $135.00/ton $27,000.00 L C I Limited
Pebble Quicklime 15,000 tons $64.70/ton $970,500.00 Marblehead Lime Co.
Soda Ash 1,800 tons $133.49/ton $240,282.00 O C I Corp.
Granulated Salt 400 tons $49.79/ton $19,916.00 I M C Salt, Inc.
Sulfuric Acid 630 tons $60.00/ton $37,800.00 Marsulex,Inc.
Caustic Soda 175 tons $250.40/ton $43,820.00 K.A. Steel Chemicals,Inc.
Sodium Hypochlorite 165,000 gal. $.433 gal. $65,835.00 Alexander Chemical Co.
Blended Phosphate 15,000 gal. $7.65/gal. $114,750.00 Elhorn Engineering Co.
Anhydrous Ammonia 30,000 lbs. .64333/lb. $19,299.90 Alexander Chemical Corp.
Total: $1,539,202.90
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-8-2
PROVIDE TEMPORARY LABOR SERVICES
RESOLVED, That the B WL issue a Purchase Order for SkillTech Employment to provide
temporary labor services to the BWL for a three-year period commencing August 1, 1999 and
expiring July 31,2002. The expected value of these services will be approximately$572,000 per
year.
Page 68 Board Minutes
August 24, 1999
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary,to adopt the
resolution.
Discussion on Policy: Commissioner Murray questioned why would something of this
scope come to this Board for approval. General Manager Pandy reported that past
policies and practices are currently being followed to approve multi-year contracts with
outside vendors. He noted that the message is clear this Board would like to be more
involved in substantive issues and strategies and less involved on administrative matters.
Staff has been reviewing the policies to suggest guidelines for certain types of contracts
and dollar limits to come before the Board for authorization. Commissioner Royal noted
that the Policies Committee will soon be analyzing the policies before they are brought to
the Board for approval.
Action: Carried unanimously.
#99-8-3
WHOLESALE WATER SERVICE AGREEMENT
WHEREAS, the East Lansing-Meridian Water and Sewer Authority (ELMWSA)requires
additional water supply and desires the Lansing Board of Water and Light (BWL) to
provide such source of supply for a 10 year term; and
WHEREAS,the BWL has sufficient excess capacity to provide a source of water supply
to ELMWSA and such provision of supply will provide a financial benefit to the BWL
and its customers; and
WHEREAS,the BWL and the ELMWSA will mutually benefit from water storage and
pumping facilities to be located in Alaiedon Township by the BWL; and
WHEREAS,the ELMWSA has offered to provide up to four emergency interconnections
to the BWL water service area in Bath Township.
RESOLVED, That the Board enter into a Wholesale Water Service Agreement with the
East Lansing - Meridian Water and Sewer Authority, Ingham County, Michigan to
provide and sell Conditioned Water to the Authority, to participate in joint storage and
pumping facilities and to purchase water from the Authority during an emergency.
RESOLVED FURTHER, That the General Manager and Corporate Secretary are
authorized to sign the Wholesale Water Service Agreement in such form as approved by
the Staff Attorney.
Motion by Commissioner Christian,seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
j .l
Board Minutes Page 69
August 24, 1999
499-8-4
RESOLUTION DECLARING INTENT TO REIMBURSE PROJECT
EXPENDITURES WITH BOND PROCEEDS AND AUTHORIZING
PUBLICATION OF NOTICE OF INTENT TO ISSUE BONDS
WHEREAS, the Board of Water and Light(the "Issuer") proposes to issue its taxable
bonds (the"Bonds") to finance the cost to acquire, design,build, and equip a"Central
Utilities Complex"at the General Motors Midwest 1 Assembly Plant to be located in
Lansing,Michigan hereinafter described as (the"Project"); and
WHEREAS, it is anticipated that the Issuer will advance all or a portion of the costs of
the Project prior to the issuance of the Bonds, such advance to be repaid from proceeds of
the Bonds upon issuance thereof, and
RESOLVED BY THE ISSUER, as follows:
1. The Project shall consist of the acquisition, design, construction and equipping of a
Central Utilities Complex with three (3) ancillary and related facilities and associated
equipment: (1) a utility services building, (2) a waste treatment building, and(3) a
cooling tower. The utility services that are to be provided include the following: (a) a
compressed air system, (b) chilled water systems for air conditioning and process
requirements, (c)hot water systems for building heat and process requirements, (d) a
process cooling water system, (e) a de-ionized water system, (f)primary electric service -...
distribution, (g) a water treatment system, (h) a waste water treatment system, (I) air
handling equipment, and 0) an energy management system.
2. The maximum principal amount of obligations expected to be issued for the Project
is $100,000,000.
3. The Issuer hereby declares its intent to issue Bonds to finance the costs of the
Project, and hereby declares that it expects to reimburse the Issuer's advances to the
Project as anticipated by this resolution.
4. The Bonds shall be authorized by proper proceedings subsequent to this resolution.
5. Staff is authorized and directed to publish in a local newspaper of general circulation
a notice of intention to issue bonds substantially in the form attached, with such changes
as are approved by bond counsel, BWL counsel and staff. Staff is further authorized to
execute certificates and make filings with governmental entities in order to secure
necessary governmental approvals.
6. All prior resolutions and parts of resolutions insofar as they may be in conflict with
this resolution are hereby rescinded.
Discussion: Commissioner Werbelow clarified that this resolution does not obligate the
Board to issue any bonds for the maximum principal amount of$100,000,000. The
Page 70
Board Minutes
August 24, 1999
action comes at the Special Board Meeting, tentatively scheduled for November 16, 1999,
when the bonds are sold. This resolution is a preliminary step that does not commit the
Board to do anything.
Motion by Commissioner O'Leary, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
At the April 27, 1999,regular meeting, General Manager Pandy told the Board that he
would be submitting a resolution for Board authorization to file a full application in
October for a Waterfront Redevelopment Grant for the commercial redevelopment of
Ottawa Station. The deadline for the fall round of grants is October 1, 1999. In depth
details of the redevelopment project will be provided once the confidential nature of the
project can be released.
#98-8-5
STATE OF MICHIGAN WATERFRONT REDEVELOPMENT GRANT -
APPLICATION FOR OTTAWA STATION
WHEREAS, the Lansing Board of Water and Light has decommissioned its Ottawa
Power Station, and
WHEREAS, the Lansing Board of Water and Light will invest a total of approximately
$4,500,000 in costs to dismantle and remove equipment from the Ottawa Station, and
WHEREAS,the Lansing Board of Water and Light believes that the Ottawa Station and
associated real estate should be redeveloped as a commercial urban entertainment center,
with elements of theatre, lifestyle retailing, theme restaurants, and clubs, and public
access to the Grand River frontage, and
WHEREAS, the Lansing Board of Water and.Light is mindful of interest in developing
the Ottawa Station expressed by Centertainment Division of AMC Entertainment, Piper-
Wind Architects, and Clark Construction Company, all of which have experience in the
development and construction of urban entertainment centers, and
WHEREAS, the Lansing Board of Water and Light Commissioner's have been informed
of the State of Michigan's Waterfront Redevelopment Grant application process, and
have reviewed the Lansing Board of Water and Light's application for a grant, and
substantively all of the representations made in that grant application.
Page 71
Board Minutes
August 24, 1999
RESOLVED, That the Director and General Manager is hereby authorized to submit the
Lansing Board of Water and Light's Application for Waterfront Redevelopment Grant for
the Ottawa Station/The Power Tower.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
NEW BUSINESS
Chairwoman Diane Royal announced the standing committee assignments.
Executive Committee
Diane R. Royal, Chair
David O'Leary,Vice Chair
Charles M. Creamer, Chair Pro Tem
Finance Committee
Charles M. 'Creamer, Chair
Rosemarie E. Aquiliiia
Ronald C. Callen
Mark A. Murray
Alternates: Diane R. Royal & Judson M. Werbelow
Personnel Committee
David O'Leary, Chair
Ernest Christian
Diane R. Royal
Judson M. Werbelow
Alternates: Ronald C. Callen & Charles M Creamer
Nominating Committee
Rosemarie E. Aquilina, Chair
Mark A. Murray
Judson M. Werbelow
Alternate: Ernest J. Christian
RESOLUTIONS
No additional resolutions.
Page 72
Board Minutes
August 24, 1999
GENERAL MANAGER'S REMARKS
Stamp Rite Claim Settlement. General Manager Pandy reported that the BWL's Risk
Manager, Gerald Blanchard, received notification that' a claim settlement has been
negotiated with Wendall Parsons and Stamp-Rite, Inc. This claim stems from a water
main break that occurred in 1996 at the Dye Water Conditioning Plant that flooded the
Stamp-Rite building. The three insurers that agreed to defend the BWL in this matter
will pay this claim. The suit of Hastings Mutual Insurance Company, insurer for Stamp-
Rite has not yet been resolved. A settlement offer has been extended, but it has not been
accepted.
Public Hearing on Chilled Water District. General Manager Pandy reported that the
Lansing City Council held a public hearing on August 23rd with regard to the rezoning of
327 South Walnut from an E-2 Local Shopping District to a G-1 Business District and
also a request for Special Land Use to construct the Chilled Water Facility. Six persons
spoke at the hearing with questions about the aesthetics, noise levels, vibrations, and
neighborhood environment. Mr. Pandy briefed the Board on plant design options
presented at the hearing. He reported that the B WL retained Stanley Consultants, Inc. to
design and engineer the district cooling facility. Stanley has calculated the noise level
from the chilled water plant to be about 74 db at a height of.)0 feet above the ground and
11 feet away from the chilled water building. This noise level compares to normal
conversation which is listed at 70 db; at street Ievel, the noise would be lower. The matter
now goes to the City Council Committee on Planning and Development for scrutiny.
Financial Performance Reviewed. General Manager Pandy presented an overview of
the BWL's financial performance comparing FY 1998 witli FY 1999. Financial results
declined in FY 1999 to a net income of$11.6 million representing a 3.3% return on net
fixed assets, which is below our target of 5%. After paying $6.4 million return-on-equity
to the City, the BWL's return on assets was 1.48%--our target is 4%. Significant items
that affected the negative net income were reviewed. It was noted that the negating effect
of buildings General. Motors has torn down and operations they have phased out have
impacted the revenues. Some additional revenue will be coming from new wholesale
water customers. Discussion followed on how maintenance items are expensed.
Capital Project Approvals. General Manager Pandy reported that in response to
concerns raised at the July Board meeting, staff has reviewed the capital project approval
and reporting process. A template is in place of bringing capital projects to the Board
wherein the Board would authorize capital projects either as part of the annual budget, or
by specific resolutions adopted during the year. Any commitment beyond the Board's
authorization would require the General Manager's approval. If commitments or
expenditures are forecast to exceed 15% of the original authorization, the project would
be brought back to the Board for concurrence before proceeding with the project. Staff is
examining the whole issue of capital projects, their justification, and the amount of
contribution required from customers and developers to pay for the projects.
t
Page 73
Board Minutes
August 24, 1999
BWL Property at Comfort Street/Glenrose Avenue. General Manager Pandy reported
that the City is showing interest in acquiring the BWL s Comfort/Glenrose Avenue
property, previously utilized for coal ash landfill. The City is interested in a 14-acre
parcel along the river for future park use. A summary outline on the aspects of this
property was handed out.
REMARKS BY COMMISSIONERS
There were no remarks.
EXCUSED ABSENCES
By Commissioner Christian, seconded by Commissioner O'Leary, that the absences of
Commissioners Aquilina, Callen and Creamer be excused.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner O'Leary, the meeting
adjourned at 6:23 p.m.
A/11,1'arry E. So"va, &-Creta y
Filed: August 27, 1999
Marilynn Slade, City Clerk
15:35 AUG 27, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72649 PAGE: 2110
Page 65
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING..,
LANSING BOARD OF WATER AND LIGHT
Tuesday, August 24, 1999 L`''t"EC- C![Y CLE IRK
The Board of Commissioners met in regular session at 5:38 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Ernest J. Christian, Mark A. Murray, David O'Leary, Diane R.
Royal and Judson M. Werbelow.
Absent: Commissioners Rosemarie E. Aquilina, Ronald C. Callen and Charles M.
Creamer.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner Werbelow, to
approve the minutes of regular session held July 27, 1999.
Carried 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.
Councilmember Sandy Allen (Td Ward) appeared before the Board to ask for BWL
support as a sponsor in the Celebrity Lip Sync Review to be held at the Lansing
Community College (LCC) Dart Auditorium on October 24th. This annual fundraiser
benefits the LCC Foundation and provides funds for scholarships to those who meet the
academic criteria and financial need. A brochure with details of the fundraiser will be
provided to General Manager Pandy.
The Board will take this matter under advisement.
15:36 AUG 27, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #72648 PAGE: 3/10
Page 66 Board Minutes
August 24, 1999
SPECIAL CEREMONY
General Manager Pandy recognized Dorne Croley and James O. Macklin with the
following proclamation: (They were present to receive their plaque.
On May 17, 199, Lansing experienced a severe windstorm causing loss of
power to as many as 15,000 customers. Following the storm, you were on
an outage call and had stopped to examine damage in the backyard of an
elderly BWL customer. When you went to the customer's door to inform
them of the work that would be going on in their yard, you noticed the
smell of gas and the residents seemed disoriented. You reported it to
Consumers Energy, alerted the Fire Department paramedics, and made
sure the residents evacuated their home. It was, in fact, a gas leak, and
your immediate action and follow-through averted a possibly fatal event.
We, at the Board of Water and Light, would like you to know that your
efforts and dedication to customer service and public safety are
acknowledged and appreciated.
General Manager Pandy also recognized Lawrence Taylor, Jayne Hoxie, Charles
Murphy, and Joseph Scott and read the following proclamation: (Charles Murphy was
present to receive his plaque.)
On Sunday, July 25, 1999, you assisted in the rescue of a BWL customer
from her burning home. The ladder you put up to her second floor
stairwell window enabled her to exit her home without having to pass
through the smoke-filled main floor. The Fire Department reported that
she would not have survived the thick smoke had she attempted a main
floor escape. The homeowner was additionally grateful to for saving her
dog, Buddy, by breaking down the locked, front door, which allowed him
to escape.
We, at the Board of Water and Light, would like you to know that your
efforts and dedication to customer service and public safety are
acknowledged and appreciated.
There was a round of applause in honor of these employees.
COMMUNICATIONS
No Communications.
15:37 RUG 27, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *72648 PAGE: 4/10
Board Minutes Page 67
August 24, 1999
REPORTS OF COMMITTEES
The Committee of the Whole Report for the meeting held August 24, 1999, will be
presented to the Board at the regular meeting of September 28, 1999.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-8-1
ANNUAL COMMODITY PURCHASES
RESOLVED, That 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 be purchased. Pricing is firm through
August 31, 2000. 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.
Commodity Annual Unit Annual Cost Vendor
uanti (Est.) Cost (Est.)
Hydrofluosilicic Acid 200 tons $135.00/ton $27,000.00 L C I Limited
Pebble Quicklime 15,000 tons $64.70/ton $970,500.00 Marblehead Lime Co.
Soda Ash 1,800 tons $133.49/ton S240,282.00 O C I Corp.
Granulated Salt 400 tons $49.79/ton $19,916.00 I M C Salt,Inc.
Sulfuric Acid 630 tons $60.00/ton $37,800.00 Marsulex,Inc.
Caustic Soda 175 tons $250.40/ton $43,820.00 K. A. Steel Chemicals,Inc.
Sodium Hypochlorite 165,000 gal. $.433 gal. $65,835.00 Alexander Chemical Co.
Blended Phosphate 15,000 gal. $7.65/gal. $114,750.00 Elhorn Engineering Co.
Anhydrous Ammonia 30,000 lbs. .64333/lb. $19,299.90 Alexander Chemical Corp.
Total: $1,539,202.90
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-8-2
PROVIDE TEMPORARY LABOR SERVICES
RESOLVED, That the BWL issue a Purchase Order for SkillTech Employment to provide
temporary labor services to the BWL for a three-year period commencing August 1, 1999 and
expiring July 31,2002. The expected value of these services will be approximately S572,000 per
year.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Page 68 Board Minutes
August 24, 1999
Discussion on Policy: Commissioner Murray questioned why would something of this
scope come to this Board for approval. General Manager Pandy reported that past policies
and practices are currently being followed to approve multi-year contracts with outside
vendors. He noted that the message is clear this Board would like to be more involved in
substantive issues and strategies and less involved on administrative matters. Staff has been
reviewing the policies to suggest guidelines for certain types of contracts and dollar limits
to come before the Board for authorization. Commissioner Royal noted that the Policies
Committee will soon be analyzing the policies before they are brought to the Board for
approval.
Action: Carried unanimously.
#99-8-3
WHOLESALE WATER SERVICE AGREEMENT
WHEREAS, the East Lansing-Meridian Water and Sewer Authority(ELMWSA) requires
additional water supply and desires the Lansing Board of Water and Light(BWL)to
provide such source of supply for a 10 year term; and
WHEREAS, the BWL has sufficient excess capacity to provide a source of water supply
to ELMWSA and such provision of supply will provide a financial benefit to the BWL and
its customers; and
WHEREAS, the BWL and the ELMWSA will mutually benefit from water storage and
pumping facilities to be located in Alaiedon Township by the BWL; and
WHEREAS, the ELMWSA has offered to provide up to four emergency interconnections
to the BWL water service area in Bath Township.
RESOLVED, That the Board enter into a Wholesale Water Service Agreement with the
East Lansing - Meridian Water and Sewer Authority, Ingham County, Michigan to provide
and sell Conditioned Water to the Authority, to participate in joint storage and pumping
facilities and to purchase water from the Authority during an emergency.
RESOLVED FURTHER, That the General Manager and Corporate Secretary are
authorized to sign the Wholesale Water Service Agreement in such form as approved by
the Staff Attorney.
Motion by Commissioner Christian, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
#99-8-4
RESOLUTION DECLARING INTENT TO REIMBURSE PROJECT
EXPENDITURES WITH BOND PROCEEDS AND AUTHORIZING
PUBLICATION OF NOTICE OF INTENT TO ISSUE BONDS
AUG-27-1999 15:51 BOARD OF WATER & LIG P.05
Board Minutes Page 69
August 24, 1999
WHEREAS, the Board of Water and Light(the "Issuer") proposes to issue its taxable
bonds (the "Bonds") to finance the cost to acquire, design, build, and equip a "Central
Utilities Complex" at the General Motors Midwest 1 Assembly Plant to be located in
Lansing, Michigan hereinafter described as (the"Project"); and
WHEREAS, it is anticipated that the Issuer will advance all or a portion of the costs of the
Project prior to the issuance of the Bonds, such advance to be repaid from proceeds of the
Bonds upon issuance thereof; and
RESOLVED BY THE ISSUER, as follows:
1. The Project shall consist of the acquisition, design, construction and equipping of a
Central Utilities Complex with three (3) ancillary and related facilities and associated
equipment: (1) a utility services building, (2) a waste treatment building, and (3) a cooling
tower. The utility services that are to be provided include the following: (a) a compressed
air system, (b) chilled water systems for air conditioning and process requirements, (c)hot
water systems for building heat and process requirements, (d) a process cooling water
system, (e) a de-ionized water system, (f) primary electric service distribution, (g) a water
treatment system, (h) a waste water treatment system, (I) air handling equipment, and (j)
an energy management system.
2. The maximum principal amount of obligations expected to be issued for the Project is
$100,000,000.
3. The Issuer hereby declares its intent to issue Bonds to finance the costs of the Project,
and hereby declares that it expects to reimburse the Issuer's advances to the Project as
anticipated by this resolution.
4. The Bonds shall be authorized by proper proceedings subsequent to this resolution.
5. Staff is authorized and directed to publish in a local newspaper of general circulation
a notice of intention to issue bonds substantially in the form attached, with such changes as
are approved by bond counsel, BWL counsel and staff. Staff is further authorized to
execute certificates and make filings with governmental entities in order to secure
necessary governmental approvals.
6. All prior resolutions and parts of resolutions insofar as they may be in conflict with
this resolution are hereby rescinded.
Discussion: Commissioner Werbelow clarified that this resolution does not obligate the
Board to issue any bonds for the maximum principal amount of$100,000,000. The action
comes at the Special Board Meeting, tentatively scheduled for November 16, 1999, when
the bonds are sold. This resolution is a preliminary step that does not commit the Board to
do anything.
Motion by Commissioner O'Leary, seconded by Commissioner Werbelow, to adopt the
resolution.
AUG-27-1999 15:52 BOARD OF WATER & LIG 96% P.06
Page 70 Board Minutes
August 24, 1999
Action: Carried unanimously.
UNFINISHED BUSINESS
At the April 27, 1999, regular meeting, General Manager Pandy told the Board that he
would be submitting a resolution for Board authorization to file a full application in
October for a Waterfront Redevelopment Grant for the commercial redevelopment of
Ottawa Station. The deadline for the fall round of grants is October 1, 1999. In depth
details of the redevelopment project will be provided once the confidential nature of the
project can be released.
998-8-5
STATE OF MICHIGAN WATERFRONT REDEVELOPMENT GRANT -
APPLICATION FOR OTTAWA STATION
WHEREAS, the Lansing Board of Water and Light has decommissioned its Ottawa
Power Station, and
WHEREAS, the Lansing Board of Water and Light will invest a total of approximately
$4,500,000 in costs to dismantle and remove equipment from the Ottawa Station, and
WHEREAS, the Lansing Board of Water and Light believes that the Ottawa Station and
associated real estate should be redeveloped as a commercial urban entertainment center,
with elements of theatre, lifestyle retailing, theme restaurants, and clubs, and public access
to the Grand River frontage, and
WHEREAS, the Lansing Board of Water and Light is mindful of interest in developing the
Ottawa Station expressed by Centertainment Division of AMC Entertainment, Piper-Wind
Architects, and Clark Construction Company, all of which have experience in the
development and construction of urban entertaiiunent centers, and
WHEREAS, the Lansing Board of Water and Light Commissioner's have been informed
of the State of Michigan's Waterfront Redevelopment Grant application process, and have
reviewed the Lansing Board of Water and Light's application for a grant; and substantively
all of the representations made in that grant application.
RESOLVED, That the Director and General Manager is hereby authorized to submit the
Lansing Board of Water and Light's Application for Waterfront Redevelopment Grant for
the Ottawa Station/The Power Tower.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
NEW BUSINESS
AUG-27-1999 15:53 BOARD OF WATER & LIG 96% P.07
Board Minutes Page 71
August 24, 1999
Chairwoman Diane Royal announced the standing committee assignments.
Executive Committee
Diane R. Royal, Chair
David O'Leary, Vice Chair
Charles M. Creamer, Chair Pro Tern
Finance Committee
Charles M. Creamer, Chair
Rosemarie E. Aquilina
Ronald C. Callen
Mark A. Murray
Alternates: Diane R. Royal&Judson M. Werbelow
Personnel Committee
David O'Leary, Chair
Ernest Christian
Diane R. Royal
Judson M. Werbelow
Alternates: Ronald C. Callen & Charles M Creamer
Nominating Committee
Rosemarie E. Aquilina, Chair
Mark A. Murray
Judson M. Werbelow
Alternate: Ernest J. Christian
RESOLUTIONS
No additional resolutions.
AUG-27-1999 15:53 BOARD OF WATER & LIG 96% P.BB
Page 72 Board Minutes
August 24, 1999
GENERAL MANAGER'S REMARKS
Stamp-Rite Claim Settlement General Manager Pandy reported that the BWL's Risk
Manager, Gerald Blanchard, received notification that a claim settlement has been
negotiated with Wendall Parsons and Stamp-Rite, Inc. This claim stems from a water
main break that occurred in 1996 at the Dye Water Conditioning Plant that flooded the
Stamp-Rite building. The three insurers that agreed to defend the BWL in this matter will
pay this claim. The suit of Hastings Mutual Insurance Company, insurer for Stamp-Rite
has not yet been resolved. A settlement offer has been extended, but it has not been
accepted.
Public Hearing on Chilled Water District. General Manager Pandy reported that the
Lansing City Council held a public hearing on August 23rd with regard to the rezoning of
327 South Walnut from an E-2 Local Shopping District to a G-1 Business District and
also a request for Special Land Use to construct the Chilled Neater Facility. Six persons
spoke at the hearing with questions about the aesthetics, noise levels, vibrations, and
neighborhood environment. Mr. Pandy briefed the Board on plant design options
presented at the hearing. He reported that the BWL retained Stanley Consultants, Inc. to
design and engineer the district cooling facility. Stanley has calculated the noise level
from the chilled water plant to be about 74 db at a height of 30 feet above the ground and
11 feet away from the chilled water building. This noise level compares to normal
conversation which is listed at 70 db; at street level, the noise would be lower. The matter
now goes to the City Council Committee on Planning and Development for scrutiny.
Financial Performance Reviewed. General Manager Pandy presented an overview of
the BWL's financial performance comparing FY 1998 with FY 1999. Financial results
declined in FY 1999 to a net income of$11.6 million representing a 3.3% return on net
fixed assets, which is below our target of 5%. After paying $6.4 million return-on-equity
to the City, the BWL's return on assets was 1.48%--our target is 4%. Significant items
that affected the negative net income were reviewed. It was noted that the negating effect
of buildings General Motors has torn down and operations they have phased out have
impacted the revenues. Some additional revenue will be coming from new wholesale
water customers. Discussion followed on how maintenance items are expensed.
Capital Project Approvals. General Manager Pandy reported that in response to
concerns raised at the July Board meeting, staff has reviewed the capital project approval
and reporting process. A template is in place of bringing capital projects to the Board
wherein the Board would authorize capital projects either as part of the annual budget, or
by specific resolutions adopted during the year. Any commitment beyond the Board's
authorization would require the General Manager's approval. If commitments or
expenditures are forecast to exceed 15% of the original authorization, the project would be
brought back to the Board for concurrence before proceeding with the project. Staff is
examining the whole issue of capital projects, their justification, and the amount of
contribution required from customers and developers to pay for the projects.
BWL Property at Comfort Street/Glenrose Avenue General Manager Pandy reported
that the City is showing interest in acquiring the BWL's Comfort/Glenrose Avenue
AUG-27-1999 15:54 BOARD OF WATER 9 LIG 96% P.09
Board Minutes Page 73
August 24, 1999
property, previously utilized for coal ash landfill. The City is interested in a 14-acre
parcel along the river for future park use. A summary outline on the aspects of this
property was handed out.
REMARKS BY COMMISSIONERS
There were no remarks.
EXCUSED ABSENCES
By Commissioner Christian, seconded by Commissioner O'Leary, that the absences of
Commissioners Aquilina, Callen and Creamer be excused.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT
SUBJECT.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner O'Leary, the meeting
adjourned at 6:23 p.m.
Is/Mary E. Sova, Secretary
Filed: August 27, 1999
Marilynn Slade, City Clerk
AUG-27-1999 15:54 BOARD OF WATER & LIG 96% P.10
Paee 57
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, July 27, 1999
S2
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroorrxof-the .
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was 9le00
order by the Chair, Diane Royal. cD
I-0
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, Mark A. Murray, David O'Leary, Diane R. Royal and
Judson M. Werbelow.
Absent: None.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
ANNUAL MEETING
Chairwoman Diane Royal announced that in accordance with the City Charter and the
Board's Rules of Administrative Procedure, the Board is required to organize each year at
its first regularly scheduled meeting in July by selecting a Chair, Vice Chair and Chair
Pro Tern until the next annual meeting. The Nominating Committee presented its report.
499-7-1
Report of the Nominating Committee
The Nominating Committee met on July 20, 1999, to review copies of Commissioner
survevs to consider nominations for Board officers. It is the unanimous decision of the
Nominating Committee that the following Commissioners be elected to the offices
indicated:
Slate of Officer Candidates
CHAIR: - Diane Royal
VICE CHAIR: - David O'Leary
CHAIR PRo TEM: - Charles Creamer
The Nominating Committee also recommends that Board officers not hold the same
position for more than two consecutive years.
Page 58 Board Minutes
July 27, 1999
Respectfully submitted,
NOMINATING COMMITTEE
Charles M. Creamer, Chair
Ronald C. Callen
David O'Leary
Judson M. Werbelow
Motion by Commissioner Werbelow, seconded by Commissioner Christian to adopt the
recommendation of the Nominating Committee.
Action: Carried unanimously.
#99-7-2
Resolution to Appoint Charter Staff Positions
The Board's Rules of Administrative Procedures specify that the Board is to appoint a
Director, Corporate Secretary and Internal Auditor, respectively, at the first regular
meeting in July of each year, be it
RESOLVED, That the Board cast a unanimous vote for the reappointment of the
following staff positions for fiscal year 1999-2000, or, until a successor is appointed,
whichever last occurs:
DIRECTOR AND GENERAL MANAGER - Joseph Pandy, Jr.
CORPORATE SECRETARY - Mary E. Sova
INTERNAL AUDITOR - Kellie L. Willson
Motion by Commissioner O'Leary, seconded by Commissioner Callen, to adopt the
resolution.
Action: Carried unanimously.
APPROVAL OF MINUTES
Motion was made by Commissioner Werbelow, seconded by Commissioner Aquilina, to
approve the minutes of regular session held June 29, 1999.
Carried 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.
Board Minutes Page 59
July 27, 1999
No persons spoke.
COMMUNICATIONS
No Communications.
REPORTS OF COMMITTEES
No committee reports.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-7-3
SALE OF OBSOLETE VEHICLES
RESOLVED, That the sale of obsolete Board-owned vehicles and equipment made
through competitive bids be approved. The items are BWL Unit Numbers 106-1, 624-1,
707-1 and 792-1.
An itemized list is on file with the Corporate Secretary.
Motion by Commissioner Callen, seconded by Commissioner Christian, to adopt the
resolution.
Discussion: Commissioner Murray inquired on the need for this issue to come before
Board as opposed to being handled administratively.
Assistant General Manager John Elashkar responded that the purchasing policy requires
the sale or disposal of obsolete equipment, valued in excess of$15,000, to be submitted
to the Board for approval. Staff is currently reviewing the purchasing policy to
streamline procedures. Commissioner Murray's suggestion will be taken into
consideration during the analysis.
Action: Carried unanimously.
#99-7-4
PENSION CALCULATION CORRECTIONS
The Board of Commissioners approved a resolution regarding Pension Calculation
Corrections. Staff proposes amending the resolution by deleting the words "of x.x%." in
the second sentence and inserting a new sentence "The interest credit for each year is
based on the 30 Year U.S. Treasury Rate for the previous December."
Page 60 Board Minutes
July 27, 1999
RESOLVED, That the Pension Calculation Corrections resolution approved by the Board
on April 27, 1999, (Resolution 499-4-3) be amended as follows:
RESOLVED, That defined benefit plan retirees who retired on or between
August 1, 1983 and June 30, 1996 and elected an optional joint and
survivor benefit, shall have their benefit amounts recalculated using a
90/10 unisex mortality table. If the recalculation results in an increase,
retirees will be paid the difference plus accrued interest. e€*-'X4. THE
INTEREST CREDIT FOR EACH YEAR IS BASED ON THE 30-YEAR
U.S. TREASURY RATE FOR THE PREVIOUS DECEMBER. If the
recalculation results in a decrease, retirees will continue to receive their
current pension amount. There are approximately 295 retirees and
surviving spouses in the affected group. The cost to the pension fund is
approximately $660,000 plus interest.
Note:
Strikethrough indicates text to be deleted
New language indicated by zipper case text.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
499-7-5
RETAIL WATER SERVICE AGREEMENT
WHEREAS, the General Law Township of Alaiedon (Township) needs a water
distribution system to provide retail water service to designated areas of the Township
and desires the Lansing Board of Water and Light (BWL) to provide such service;
WHEREAS, the BWL has sufficient excess capacity to provide retail water service to
Alaiedon Township and such service will provide a financial benefit to the BWL; and
WHEREAS, providing retail water service to Alaiedon Township is deemed to be in the
best interest of the BWL and its current customers; be it
RESOLVED, that the Board enter into a Retail Water Service Agreement with the
General Law Township of Alaiedon, Ingham County, Michigan to supply water in such
areas as subsequently agreed to by the parties pursuant to Water Service Agreement.
FURTHER RESOLVED, that the General Manager and Corporate Secretary are
authorized to sign the Retail Water Service Agreement in such form as approved by the
Staff Attorney.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Board Minutes Page 61
July 27. 1999
Discussion: Marketing Manager Sue McCormick briefed the Commissioners on water
service negotiations that have taken place with Alaiedon Township since the last update
on March 23, 1999. The Alaiedon Township Board unanimously endorsed entering into
a retail water service agreement with the BWL on July 26, 1999, with no boundary
restrictions. By Resolution 97-7-7, the Board delegated to the General Manager authority
to extend water service within areas the Board has authorized its water utility to serve.
The simple payback methodology for cost recovery was reviewed. Ms. McCormick
noted that in general, with the addition of water districts, the payback period will be
significantly lower than the ten-year criteria set by the Board. Negotiations are underway
for two additional water service extension projects in Alaiedon Township.
Following discussion, Commissioner O'Leary suggested revisiting the policy on the
payback methodology at a 4-urc Cloiminittee of the hole meeting.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
In the absence of General Manager Pandy, who is traveling in China, Assistant General
Manager John Elashkar reported on the following items:
1998 Annual Water Quality Report. A copy of the BWL's 1998 Annual Water Quality
Report is being mailed to customers as a billing insert starting in August. This annual
consumer confidence report, is required by the Safe Drinking Water Act. The
Commissioners were provided with a copy of the report.
Customer Makes Request for an Appeal Hearing with the Board. A letter has been
received from Tom Kraus requesting to appeal the ruling of the independent Hearing
Officer in the matter of Kraus v Board of Water and Light. The appeal hearing with the
Board is scheduled for the next regular meeting on August 24°i- Discussion regarding this
issue is to take place at that time.
Page 62 Board Minutes
.July 27. 1999
Fire Rescue Incident. Assistant General Manager Elashkar reported that four BWL
employees took quick action on Sunday, July 25"' to rescue a customer trapped inside a
home engulfed with smoke. Lineworkers Chuck Murphy, Larry Taylor, Jayne Hoxie,
and Joe Scott were recognized in a LANSING STATE JOURNAL article, July 25, 1999, for
their heroic efforts. A copy of an E-mail sent to the BWL by Marianne Oren was handed
out, in which she expressed her thanks to the four employees for their swift response in
saving her life. Management plans to honor these employees.
Main Office Relocation Project— Cost Breakdown. In response to a request from
Commissioners, Assistant General Manager Elashkar distributed a copy of a cost
breakdown spreadsheet on the main office relocation project. The following key elements
were summarized:
Estimated cost of the project in 1995 dollars was $5,157,375.
1. Reorganization into a process-centered organization was concurrently in progress.
2. Scope of relocation project was changed to facilitate the streamlining and capture
efficiency gains from the new organization.
3. Estimated cost of the revised scope of work was $7,564,000, a net increase of
approximately $1.5 million after adjusting for inflation.
4. Estimated completion costs will total approximately $9,055,000.
5. Value of additional unrelated project work at the new Haco Office Center and the
Construction Service Center to supplement the process-centered organization is
approximately $4,609,000.
6. Reports will be provided to the Board on efficiency gains and cost reductions as the
result of redesigning major work processes.
Commissioner Murray inquired about the additional work totaling $4,609,000. Mr.
Elashkar provided a brief explanation of the following major items of work:
- HVAC
- Contaminated soil
- Skylights
- Parking Lot
- Security System
The Commissioners engaged in lengthy discussion regarding the importance of receiving
sufficient and adequate information to enable them to decide those issues on which the
Board must act. They raised the following significant issues of concern related to the
main office relocation project and requested that staff improve on the following areas on
future projects:
♦ Estimated costs vs. completed costs. They want regular information on major projects
and reports on how the organization is doing against the plan or the budget.
♦ Timeliness of reporting on project revisions and major expenditures. They wish to be
involved early in key decision points.
Board Minutes Page 63
July 27, 1999
♦ Purchasing Policy procedures to reflect better reporting to the Board. They desire
information on major corporate developments rather than approving unnecessary
items related to routine operations matters.
The Commissioners requested a report by December 1999 on the efficiencies of the
organization resulting from the process redesign and relocation.
REMARKS BY COMMISSIONERS
Project Coordination and Employee Morale. Commissioner Christian inquired about
employee morale and coordination activities as a result of redesigning the organization
and increased workloads from economic development projects in the afea.
Assistant General Manager Elashkar responded that employees are coping well with the
changes. The organization is moving in the direction of different thinking. Most
employees have welcomed the new challenges, and work coordination and budgetary
requirements are being met.
Commissioner Royal emphasized the importance for the BWL to remain vigilant with
timely project coordination with General Motors and the various entities involved
Chilled Water Project. Commissioner Werbelow requested an update on chilled water
service contract negotiations.
Marketing Manager Sue McCormick reported that negotiations to establish commitment
remain positive with developers to serve downtown projects. Final contract language
issues are being resolved for the Civic Center project, a Letter of Intent has been received
from the State of Michigan, and property rezoning approval is pending for the Ingham
County Hall of Courts.
Commissioner Creamer inquired about the rezoning issues related to the chiller facility.
Ms. McCormick briefed on the outcome of a meeting held with the Lansing Planning
Commission to discuss the BWL's application for rezoning and a special use permit to
place the chiller facility at the Walnut Street site. Goals for the architecture of the chiller
structure were reviewed. The cost and schedule and the benefit to all steam and electric
customers in assisting rate stabilization by reducing summer electric demand and
deferring future capacity additions, while increasing summer load for the steam system,
was emphasized to the Planning Commission. The rezoning issue is moving forward to
Council for consideration.
Lansing's Policy Preference for Lansing-Based Businesses. Commissioner Werbelow
asked if the Mayor's Executive Order establishing a one-year pilot creating a policy
preference for Lansing-based businesses is applicable to the BWL.
Page 64 Board Minutes
July 27, 1999
Mr. Elashkar responded that the BWL's purchasing policy includes a local preference
guideline, but not the 1% bid differential. For example, a bid received from two bidders
on equal basis is awarded to the local bidder. Staff is evaluating this issue as the
Purchasing Policy is reviewed for revision.
EXCUSED ABSENCES
There were no absences.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARn ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Mike Redding, 3522 Karen Street, Lansing, and a partner of Synergy Soup Advertising,
Lansing, expressed his firm's interest in purchasing the BWL's retired Pumping Station
property located at 1231 Pennsylvania Avenue, north of the Potter Park Zoo entrance.
The partners of Synergy Soup Advertising desire to restore and upgrade the building for
use as their corporate office.
This item was referred to management for review and recommendation to the Board.
ADJOURNMENT
On motion by Commissioner Aquilina, seconded by Commissioner Christian, the
meeting adjourned at 6:30 p.m.
/s/Mary E. Sova, Secretary
Filed: August 2, 1999
Marilynn Slade, City Clerk
09:59 RUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *71622 PAGE: 1/9
BOARD OF WATER AND LIGHT PO Boa 13007, Lansing,MI 48901
P FAX Date: Monday,Aug 2, 1999 9:5
6 Number of pages including 9
cover sheet:
To: City Clerk's Office From: Mary Sova
Phone: Phone:
Fag: 377-0068 Fax phone: (517)371-6203
CC:
REMARKS: ❑ Urgent ❑ For your review ❑ Reply ASAP ❑ Please comment
The attached minutes are being filed with your office.
An official copy is being mailed today for your file.
If you have any questions or concerns with this
transmission,please give me a call at 371-6033.
Thank you for your assistance.
10:00 AUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 2/9
Page 57
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, July 27, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J. Christian,
Charles M. Creamer, Mark A. Murray, David O'Leary, Diane R. Royal and
Judson M. Werbelow.
Absent: None.
The Secretary declared a quorum present.
The Pledge of Allegiance was said by all.
ANNUAL MEETING
Chairwoman Diane Royal announced that in accordance with the City Charter and the
Board's Rules of Administrative Procedure, the Board is required to organize each year at
its first regularly scheduled meeting in July by selecting a Chair, Vice Chair and Chair Pro
Tern until the next annual meeting. The Nominating Committee presented its report.
499-7-1
Report of the Nominating Com-mittee
The Nominating Committee met on July 20, 1999, to review copies of Commissioner
surveys to consider nominations for Board officers. It is the unanimous decision of the
Nominating Committee that the following Commissioners be elected to the offices
indicated:
Slate of Officer Candidates
CHAIR: - Diane Royal
VICE CHAIR: - David O'Leary
CHAIR PRo TEM: - Charles Creamer
The Nomnating Committee also recommends that Board officers not hold the same
position for more than two consecutive years.
Respectfully submitted,
10:00 RUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 3/9
Page 58 Board Minutes
July 27, 1999
NOMINATING COMMITTEE
Charles M. Creamer, Chair
Ronald C. Callen
David O'Leary
Judson M. Werbelow
Motion by Commissioner Werbelow, seconded by Commissioner Christian to adopt the
recommendation of the Nominating Committee.
Action: Carried unanimously.
#99-7-2
Resolution to Appoint Charter Staff Positions
The Board's Rules of Administrative Procedures specify that the Board is to appoint a
Director, Corporate Secretary and Internal Auditor, respectively, at the first regular
meeting in July of each year, be it
RESOLVED, That the Board cast a unanimous vote for the reappointment of the
following staff positions for fiscal year 1999-2000, or, until a successor is appointed,
whichever last occurs:
DIRECTOR AND GENERAL MANAGER - Joseph Pandy, Jr.
CORPORATE SECRETARY - Mary E. Sova
INTERNAL AUDITOR - Kellie L. Willson
Motion by Commissioner O'Leary, seconded by Commissioner Callen, to adopt the
resolution.
Action: Carried unanimously.
APPROVAL OF MINUTES
Motion was made by Commissioner Werbelow, seconded by Commissioner Aquilina, to
approve the minutes of regular session held June 29, 1999.
Carried 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.
10:01 AUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 4/9
Board Minutes Page 59
July 27, 1999
COMMUNICATIONS
No Communications.
REPORTS OF COMMITTEES
No committee reports.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
999-7-3
SALE OF OBSOLETE VEHICLES
RESOLVED, That the sale of obsolete Board-owned vehicles and equipment made
through competitive bids be approved. The items are BWL Unit Numbers 106-1, 624-1,
707-1 and 792-1.
An itemized list is on file with the Corporate Secretary.
Motion by Commissioner Callen, seconded by Commissioner Christian, to adopt the
resolution.
Discussion: Commissioner Murray inquired on the need for this issue to come before
Board as opposed to being handled administratively.
Assistant General Manager John Elashkar responded that the purchasing policy requires
the sale or disposal of obsolete equipment, valued in excess of$15,000, to be submitted to
the Board for approval. Staff is currently reviewing the purchasing policy to streamline
procedures. Commissioner Murray's suggestion will be taken into consideration during
the analysis.
Action: Carried unanimously.
#99-7-4
PENSION CALCULATION CORRECTIONS
The Board of Commissioners approved a resolution regarding Pension Calculation
Corrections. Staff proposes amending the resolution by deleting the words "of x.x%." in
the second sentence and inserting a new sentence "The interest credit for each year is based
on the 30 Year U.S. Treasury Rate for the previous December."
RESOLVED, That the Pension Calculation Corrections resolution approved by the Board
on April 27, 1999, (Resolution 999-4-3)be amended as follows:
RESOLVED, That defined benefit plan retirees who retired on or between
August 1, 1983 and June 30, 1996 and elected an optional joint and
10:01 AUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 5/9
Page 60 Board Minutes
July 27, 1999
survivor benefit, shall have their benefit amounts recalculated using a 90/10
unisex mortality table. If the recalculation results in an increase, retirees
will be paid the difference plus accrued interest. ef x.x%. THE
INTEREST CREDIT FOR EACH YEAR IS BASED ON THE 30-YEAR
U.S. TREASURY RATE FOR THE PREVIOUS DECEMBER. If the
recalculation results in a decrease, retirees will continue to receive their
current pension amount. There are approximately 295 retirees and
surviving spouses in the affected group. The cost to the pension fund is
approximately $660,000 plus interest.
Note:
Strikethrough indicates text to be deleted
New language indicated by upper case text
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
499-7-5
RETAIL WATER SERVICE AGREEMENT
WHEREAS, the General Law Township of Alaiedon (Township) needs a water
distribution system to provide retail water service to designated areas of the Township and
desires the Lansing Board of Water and Light(BWL)to provide such service,
WHEREAS, the BWL has sufficient excess capacity to provide retail water service to
Alaiedon Township and such service will provide a financial benefit to the BWL; and
WHEREAS, providing retail water service to Alaiedon Township is deemed to be in the
best interest of the BWL and its current customers; be it
RESOLVED, that the Board enter into a Retail Water Service Agreement with the General
Law Township of Alaiedon, Inghanl County, Michigan to supply water in such areas as
subsequently agreed to by the parties pursuant to Water Service Agreement.
FURTHER RESOLVED, that the General Manager and Corporate Secretary are
authorized to sign the Retail Water Service Agreement in such form as approved by the
Staff Attorney.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Discussion: Marketing Manager Sue McCormick briefed the Commissioners on water
service negotiations that have taken place with Alaiedon Township since the last update on
March 23, 1999. The Alaiedon Township Board unanimously endorsed entering into a
retail water service agreement with the BWL on July 26, 1999, with no boundary
restrictions. By Resolution 97-7-7, the Board delegated to the General Manager authority
to extend water service within areas the Board has authorized its water utility to serve.
The simple payback methodology for cost recovery was reviewed. Ms. McCormick noted
that in general, with the addition of water districts, the payback period will be significantly
10:02 AUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 6/9
Board Minutes Page 61
July 27, 1999
lower than the ten-year criteria set by the Board. Negotiations are underway for two
additional water service extension projects in Alaiedon Township.
Following discussion, Commissioner O'Leary suggested revisiting the policy on the
payback methodology at a future Committee of the Whole meeting.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
In the absence of General Manager Pandy, who is traveling in China, Assistant General
Manager John Elashkar reported on the following items:
1998 Annual Water Quality Report. A copy of the BWL's 1998 Annual Water Quality
Report is being mailed to customers as a billing insert starting in August. This annual
consumer confidence report is required by the Safe Drinking Water Act. The
Commissioners were provided with a copy of the report.
Customer Makes Request for an Appeal Hearing with the Board. A letter has been
received from Tom Kraus requesting to appeal the ruling of the independent Hearing
Officer in the matter of Kraus v Board of Water and Light. The appeal hearing with the
Board is scheduled for the next regular meeting on August 24"', Discussion regarding this
issue is to take place at that time.
Fire Rescue Incident. Assistant General Manager Elashkar reported that four BWL
employees took quick action on Sunday, July 25`s to rescue a customer trapped inside a
home engulfed with smoke. Lineworkers Chuck Murphy, Larry Taylor, Jayne Hoxie,
and Joe Scott were recognized in a LANSING STATE JOURNAL article, July 25, 1999, for
their heroic efforts. A copy of an E-mail sent to the BWL by Marianne Oren was handed
out; in which she expressed her thanks to the four employees for their swift response in
saving her life. Management plans to honor these employees.
10:03 RUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 7/9
Board Minutes
Page 62 July 27, 1999
Main Office Relocation Project—Cost Breakdown. In response to a request from
Commissioners, Assistant General Manager Elashkar distributed a copy of a cost
breakdown spreadsheet on the main office relocation project. The following key elements
were summarized:
Estimated cost of the project in 1995 dollars was $5,157,375.
1. Reorganization into a process-centered organization was concurrently in progress.
2. Scope of relocation project was changed to facilitate the streamlining and capture
efficiency gains from the new organization.
3. Estimated cost of the revised scope of work was $7,564,000, a net increase of
approximately $1.5 million after adjusting for inflation.
4. Estimated completion costs will total approximately $9,055,000.
5. Value of additional unrelated project work at the new Haco Office Center and the
Construction Service Center to supplement the process-centered organization is
approximately $4,609,000.
6. Reports will be provided to the Board on efficiency gains and cost reductions as the
result of redesigning major work processes.
Commissioner Murray inquired about the additional work totaling $4,609,000. Mr.
Elashkar provided a brief explanation of the following major items of work:
- HVAC
- Contaminated soil
- Skylights
- Parking Lot
- Security System
The Commissioners engaged in lengthy discussion regarding the importance of receiving
sufficient and adequate infornnationn to enable them to decide those issues on which the
Board must act. They raised the following significant issues of concern related to the main
office relocation project and requested that staff improve on the following areas on future
proj ects:
♦ Estimated costs vs. completed costs. They want regular information on major projects
and reports on how the organization is doing against the plan or the budget.
♦ Timeliness of reporting on project revisions and major expenditures. They wish to be
involved early in key decision points.
♦ Purchasing Policy procedures to reflect better reporting to the Board. They desire
information on major corporate developments rather than approving unnecessary items
related to routine operations matters.
The Commissioners requested a report by December 1999 on the efficiencies of the
organization resulting from the process redesign and relocation.
REMARKS BY COMMISSIONERS
10:04 AUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203
#71622 PAGE 8i9
Page 63
Board Minutes
July 27, 1999
Project Coordination and Employee Morale. Commissioner Christian inquired about
employee morale and coordination activities as a result of redesigning the organization and
increased workloads from economic development projects in the area.
Assistant General Manager Elashkar responded that employees are coping well with the
vine, in the direction of different thinking. Most
changes. The organization is mo
employees have welcomed the new challenges, and work coordination and budgetary
requirements are being met.
Commissioner Royal emphasized the importance for the BWL to remain vigilant with
timely project coordination with General Motors and the various entities involved
Chilled Water Project. Commissioner Werbelow requested an update on chilled water
service contract negotiations.
Marketing Manager Sue McCormick reported that negotiations to establish commitrnent
itive with developers to serve downtown projects. Final contract language
remainpos
issues are being resolved for the Civic Center project, a Letter of Intent has been received
from the State of Michigan, and property rezoning approval is pending for the Ingham
County Hall of Courts.
Commissioner Creamer inquired about the rezoning issues related to the chiller facility.
Ms. McCormick briefed on the outcome of a meeting held with the Lansing Planning
Commission to discuss the BWL's application for rezoning and a special use permit to
place the chiller facility at the Walnut Street site. Goals for the architecture of the chiller
structure were reviewed. The cost and schedule and the benefit to all steam and electric
customers in assisting rate stabilization by reducing summer electric demand and deferring
future capacity additions, while increasing summer load for the steam system, was
ssion. The rezoning issue is moving forward to
emphasized to the Planning Comm,
Council for consideration.
Lansing's Policy Preference for Lansing-Based Businesses. Commissioner Werbelow
asked if the Mayor's Executive Order establishing a one-year pilot creating a policy
preference for Lansing-based businesses is applicable to the BWL.
Mr. Elashkar responded that the BWL's purchasing policy includes a local preference
guideline, but not the 1% bid differential. For example, a bid received from two bidders
on equal basis is awarded to the local bidder. Staff is evaluating this issue as the
Purchasing Policy is reviewed for revision.
EXCUSED ABSENCES
There were no absences.
PUBLIC COMMENTS
10:04 AUG 02, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #71622 PAGE: 9/9
Board Minutes
Page 64 July 27, 1999
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT
SUBJECT.
Mike Redding, 3522 Karen Street, Lansing, and a partner of Synergy Soup Advertising,
Lansing, expressed his firm's interest in purchasing the BWL's retired Pumping Station
property located at 1231 Pennsylvania Avenue, north of the Potter Park Zoo entrance. The
partners of Synergy Soup Advertising desire to restore and upgrade the building for use as
their corporate office.
This item was referred to management for review and recommendation to the Board.
ADJOURNMENT
On motion by Commissioner Aquilina, seconded by Commissioner Christian, the meeting
adjourned at 6:30 p.m.
Is/Mary E. Sova, Secretary
Filed: August 2, 1999
Marilynn Slade, City Clerk
Page 47
MINUTES OF THE BOARD OF COMMISSIONERS?,MEEMN)V ; ;: 1;6
LANSING BOARD OF WATER AND LIGHT
L -di�S ii U CIT`f CLERK
Tuesday, June 29, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina,Ronald C. Callen, Ernest J.
Christian, David O'Leary, Diane R. Royal and Judson M. Werbelow.
Absent: Commissioners Charles M. Creamer and Mark A. Murray.
The Assistant Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner O'Leary, to
approve the minutes of regular session held May 25, 1999.
Carried 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
In reference to the communication from Nolan Bennett, Program Coordinator of Clean
Water Action, General Manager Pandy reported that staff will send an appropriate and
polite response to Mr. Bennett. The question was raised as to the BWL's position on this.
Bill Maier will be contacted to see if there is currently proper representation for the
Wellhead Protection Program.
Page 48 Board Minutes
June 29, 1999
REPORTS OF COMMITTEES
(Background materials on items presented are on file in the Office of the Corporate
Secretary)
#99-6-1
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on June 17, 1999, to review and discuss the following
items:
1. Increase in Salary Ranges.
2. Share the Success Program and New Incentive Pay Plan.
Committee members present: Commissioners Callen, Creamer and O'Leary.
Commissioner Werbelow was also present. Excused absences: Commissioners Christian
and Royal.
Wage and Salary. Human Resources Director Linda Gardner presented the proposed
recommendations for Non-Bargaining Unit changes in compensation for Fiscal Year
1999-2000.
The committee recommends that the following resolution be adopted:
RESOLVED, That effective July 1, 1999:
1) All current Non-Bargaining Unit Clerical-Technical salary ranges be increased
2.0% for Fiscal Year 1999-2000
2) All current Non-Bargaining Unit (First-Line Supervisor and above) salary
ranges be increased 2.5%.
3) Base salary increases for all employees be administered by each Process
Director within the budgeted amount allocated to their respective process.
RESOLVED FURTHER, That part-time employees receive up to a 2.0%
general increase rounded up to the next full nickel.
Share the Success and Incentive Pay Plan. General Manager Pandy presented an
overview of the Share the Success (STS) Program and the new Incentive Pay Plan. The
STS Program allocates up to 2.5% of fiscal base pay based on STS measures. The new
Incentive Pay Plan focuses on BWL processes and continuous improvement. The
funding mechanism insures that the BWL's financial success benefits the customers
before any incentive pay is realized.
Board Minutes Page 49
June 29, 1999
The committee recommends that the following resolution be adopted:
RESOLVED that the return on assets (ROA)percentage achieved be
utilized as a basis for the Share the Success Program and the new
Incentive Pay Plan.
RESOLVED FURTHER that the first 2.5% from the ROA percentage
achieved be allocated to Corporate Measures in three areas:
1) Financial performance
2) Customer satisfaction
3) Employee productivity
RESOLVED FURTHER that the ROA percentage above 2.5% (if any)be
allocated to Process Measures. The new incentive pay would be different for each
process,based on that process' performance measures.
NOTE: The ROA percentage is utilized as a percentage of gross payroll for
calculation of incentive pay.
Submitted by:
Dave O'Leary, Acting Chair
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to accept the
report.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-6-2
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 is hereby set.
Page 50 Board Minutes
June 29, 1999
1999
July 27 - Tuesday
August 24 - Tuesday
September 28 - Tuesday
October 26 - Tuesday
November 23 - Tuesday
December 14 - Tuesday
Regular meeting 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 July 4, 1999.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to accept the
report.
Action: Carried unanimously.
#99-6-3
EMPLOYEE BENEFITS OPTION PLAN—SHARE THE SUCCESS
RESOLVED, That the Committee has reviewed and researched numerous options for the
Share the Success bonus. The option package has administrative costs only, while
providing our employees the opportunity to purchase additional fringe benefits. Listed
below are the final recommendations submitted by the Options Committee on the
Employee Benefit Option Plan:
I. That the Flexible Spending Account (FSA) be continued:
That the BWL award the contract,until further notice, to WEYCO, Inc. for the
FSA administration. Management will be responsible to do periodic reviews
for continuation of the FSA.
H. Options available through the"Whatif'Program:
1. Purchase of Vacation * No Change
2. Purchase of Free Choice * No Change
3. ICMA No Change
4. FSA(Flexible Spending Account) No Change
***
5. Charitable Contributions ** Make-A-Wish Foundation® of Michigan and
Meals-on-Wheels "Tri-County Office on
Aging
Board Minutes Page 51
June 29, 1999
III. Options available through Human Resources:
6. Long Term Disability Program Annual enrollment for"buy-up" option
char es
7. UNUM Term Life Insurance Open enrollment for changes
8. Cancer, Intensive Care, Voluntary Annual enrollment for changes
Indemnity(previously called Direct
Cash Supplement), Accident Expense
AFLAC Plans
* Purchase of Vacation and Free Choice will be limited to ten(10) total days to include
no more than two (2) Free Choice days.
** To lower administrative costs, all checks less than$5.00 will be defaulted to the
charities option. Opt out procedures will be available for employees declining the
default.
*** Maximum annual contribution for health care expenses is $7,500 and dependent care
maximum is $5,000 (see IRS rules).
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-6-4
RETURN ON EQUITY
RESOLVED, That the Board pay $6,383,937 to the City of Lansing pursuant to our
agreement dated June 30, 1992. A memo to Dana Tousley dated 6/14/99 showing the
calculation is enclosed.
RESOLVED FURTHER, That all Receiving Fund cash and investments remaining
following the above payment be transferred effective June 30, 1999 to the Special Project
Fund for future capital projects.
Motion by Commissioner Christian, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
Page 52 Board Minutes
June 29, 1999
#99-6-5
CHILLED WATER SERVICE POLICIES
RESOLVED, That the following policies for Chilled Water Service be approved.
Chilled Water Service Policies
I. Introduction
The BWL will install, operate and maintain a chilled water system in certain locations to
provide for the air conditioning needs of its customers. The chilled water system consists
of a production facility where water is cooled by large chillers and pumped through a
network of dedicated distribution mains. The chilled water is used to provide air
conditioning including dehumidification within the buildings served. Chilled water is
warmed by use in the buildings and is then returned to the production facility through a
system of return piping to be cooled again.
The BWL will provide chilled water service to customers by contractual agreements. The
BWL's ability to provide chilled water is limited by the capacity of the chilled water
production facility. The BWL will make service available, subject to these policies, to
customers who have direct access to, or could be accessed through the extension of
existing chilled water distribution mains.
H. Chilled Water Service Area
The service area is that area where chilled water distribution mains are located with
available capacity to serve customers. The BWL will expand the service area based on
customer interest and financial feasibility for chilled water main extension and chilled
water plant capacity additions.
III. Chilled Water Service Extensions
Extension of the chilled water distribution system may be required in order to serve a new
customer. Customer service connections will be available where the BWL's chilled
water system has adequate capacity to support the requirements of such a service and
where chilled water main extensions can be cost justified. In such cases the BWL will
determine the cost of the chilled water system extension and specify any required
customer contribution in aid of construction in the contract for service.
IV. Customer Service Installations
The BWL will provide supply and return piping from the chilled water distribution mains
to the property line where chilled water service is being provided.
Board Minutes Page 53
June 29, 1999
The customer is responsible to install all services using chilled water from the BWL's
chilled water system at their own expense. Customers shall provide the BWL adequate
space on the premises in which to meter chilled water usage, including supply and return
temperature monitoring and other instrumentation as deemed by the BWL to be required.
The BWL will install, own and maintain the metering equipment and instrumentation.
The customer is responsible to connect chilled water supply to the building and return
piping to the chilled water service or meter setting installed by the BWL, and shall
cooperate with the BWL's personnel to locate metering equipment on customer's
premises in a location that is secure and can be accessed and maintained safely.
Chilled water service may be interrupted or curtailed due to circumstances such as
emergency conditions or force majeure reasons. 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 BWL'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 BWL property and to inspect the Customer's connection and piping.
Neglect or refusal on the part of the Customer to provide reasonable access shall be
sufficient cause for discontinuance of service by the BWL, and assurance of access may
be required before service is restored.
The Customer shall operate its system in accordance with prudent utility practice and in
such a fashion so as not to cause harm to the BWL's Chilled Water System. In the event
that Customer's operation of its system is determined to be detrimental to BWL's System,
the Customer shall, upon notice from the BWL, cease operating the System in such
fashion, or the BWL may discontinue Chilled Water Service.
The BWL will offer technical assistance to customers as requested in areas where the
BWL possesses technical expertise, per adopted procedures. These areas include service
installation, relocation or upgrading of services and optimizing the utilization of the
commodity.
V. Chilled Water Rates
Chilled Water Service rates are under the authority of the BWL Board of Commissioners.
Chilled Water Service rate schedules are available upon request and are a part of this
policy.
VI.Payment for Chilled Water Service
All chilled water usage will be metered for billing purposes.
Page 54 Board Minutes
June 29, 1999
Service to a customer may be terminated for non-payment of bills. Also, a customer may
be back-billed for chilled water service if appropriate.
A hearing process will be available for resolution of customer disputes.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to accept the
report.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
Chair Diane Royal announced that the Nominating Committee will convene in July to
develop a slate of Board Officers for the next fiscal year. A survey will be sent to each
Commissioner for input on the member's office preference.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
Alaiedon Township—Water Service Agreement. General Manager Joe Pandy handed
out a copy of a communication from Sue McCormick, Manager of Marketing, regarding
the Alaiedon Township Retail Water Service Agreement. Commissioner Christian asked
how this will affect Jackson National Life. When the mains were originally installed, 16"
mains were put in as part of the plan to serve the entire area.
Chilled Water Update. A communication on Chilled Water was handed out. The
Letter-of-Intent indicates the State of Michigan is interested in participating in the Chilled
Water District in downtown Lansing. A 12,000-ton system, as opposed to a 6,000-ton
system will be built.
GM—Central Utility Complex. A decision may come as early as June 30 on who will
own, build and operate the central utility complex to serve the proposed General Motors
manufacturing plan. The first meeting will be scheduled for July 8th, with a November 1
groundbreaking. The plant is expected to be built in 14.5 months.
Board Minutes Page 55
June 29, 1999
Golf Tournaments. Commissioners interested in participating in either of the following
golf tournaments, are requested to contact Joe Pandy or Mary Sova.
1. July 26 VIP Tournament- Media Day for the Olds Classic
2. August 16 Convention Visitors Bureau
Pace and Partners. Lisa Crumbley and Karen Bouffard from Pace and Partners were
introduced. Pace and Partners won four National TELLY Awards for television
commercials for the Board of Water and Light.
Chili Cook-Off. Pace and Partners also had some materials available for viewing from
the recent Chili Cook-Off. According to John Strickler, Communications Director,
approximately 1,500 people attended the event which made about $8,700 for the Adopt-
A-River Program. The revenue doubled since last year's cook-off.
Joe Davis, President of IBEW Local Union 352, was introduced. The IBEW entered a
chili recipe in this years Chili-Cook-Off. Congratulations to the IBEW for their
participation.
Children's Water Festival. The Board of Water and Light received a Certificate of
Appreciation for their participation in the 1999 Children's Water Festival.
"Cities of GM's Past and Future". General Manager Pandy spoke about an article that
appeared in the June 29, 1999 issue of the Detroit Free Press entitled"Cities of GM's.
Past and Future". A copy of the article will be mailed to each of the Commissioners.
The despair of General Motors Corporation in Flint and the hope of General Motors in
Lansing were compared.
Woodingham Substation Fire. A fire at Woodingham Substation on Sunday, June 27,
was discussed. It is believed that water got into the switchgear causing the fire. One of
two transformers is salvageable, the other is a complete loss. A mobile substation from
Consumers Energy is currently being used. Staff is discussing whether to rebuild the
substation or to switch the affected customers to other circuits. The Commissioners will
be updated on the status. Woodingham Substation was built in 1965, making it 34 years
old. Something went wrong in the relaying system and the alarms did not operate
warning of the fire. The Board of Water and Light has twelve other substations similar to
Woodingham. General Manager Pandy also reported on the power outage last week at
Eckert Station.
Steam Leak. .There is a steam leak near the General Motors facility on Martin Luther
King Junior Boulevard. The repair is on hold until the first week in July when General
Motors is shut-down. The repair is the responsibility of the BWL.
Y2K Update. Harvey Briggs from Information Technology presented a status report on
Y2K. The Board of Water and Light is in excellent shape. Mr. Briggs main concern is
the status of other vendors. In comparison to other companies, the BWL has spent
relatively little money on Y2K.
Page 56 Board Minutes
June 29, 1999
Coal Dispute Settled. Michigan Public Power Agency(MPPA) settled with Detroit
Edison and received$13Million in settlement for the coal dispute during the years 1991-
1995. Negotiations are continuing for years 1995-1999 and beyond.
Water/Electric Rate Comparisons. General Manager Pandy reported that Board of
Water and Light's electric rates are 20-31% lower than Consumers for residential
customers, 24-31% lower for commercial, and 8-13% lower for industrial. For the typical
water service customer, one-third of the bill is for the price of the water, two-thirds is the
sewer fee.
REMARKS BY COMMISSIONERS
Commissioner Werbelow asked for clarification of the meaning of 115 basis point spread
on the GM Lansing Central Utilities Proposal. Joe Pandy responded that the BWL
estimated our interest rate would be 115 basis points above the rate for 15-year Treasury
bills. GM will pay the actual interest rate determined at the time bonds are sold, plus a
5% capacity fee margin to the BWL.
Commissioner Christian inquired about a$70,000 discrepancy for General Motors Plant
#1 infrastructure improvements project. General Manager Pandy will see that this is
corrected.
Commissioner Royal thanked staff for dedicated efforts in negotiation for a Central
Utility Complex with General Motors, and Chilled Water Service with the State of
Michigan.
Commissioner Christian attended the International District Energy Association
Conference. At the conference he spoke with people regarding Chilled Water Services
and making ice as a byproduct. He suggested the BWL may want to consider this
venture.
EXCUSED ABSENCES
There being no objection, the absences of Commissioners Creamer and Murray were
excused.
Adopted unanimously.
Board Minutes Page 57
June 29, 1999
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner Werbelow, the
meeting adjourned at 6:30 p.m.
/s/Rosemary Sullivan, Assistant Secretary
Filed: July 6, 1999
Marilynn Slade, City Clerk
JUL-06-1999 11:59 BD OF DATER LIGHT 1 517 371 6B55 P.03/13
Page 47
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
i'i3 °'G "IT Y CLERK
Tuesday,,Tune 29, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Ernest J.
Christian, David O'Leary, Diane R. Royal and Judson M. Werbelow.
Absent: Commissioners Charles M. Creamer and Mark A. Murray.
The Assistant Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner O'Leary, to
approve the minutes of regular session held May 25, 1999.
Carried 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
In reference to the communication from Nolan Bennett, Program Coordinator of Clean
Water Action, General Manager Pandy reported that staff will send an appropriate and
polite response to Mr. Bennett. The question was raised as to the BWL's position on this.
Bill Maier will be contacted to see if there is currently proper representation for the
Wellhead Protection Program.
JUL-06-1999 11:59 BD OF WRTER LIGHT 1 517 371 6655 P.04/13
Page 48 Board Minutes
June 29, 1999
REPORTS OF COMMITTEES
(Background materials on items presented are on file in the Office of the Corporate
Secretary)
#99-6-1
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on June 17, 1999, to review and discuss the following
items:
1. Increase in Salary Ranges.
2. Share the Success Program and New Incentive Pay Plan.
Committee members present: Commissioners Callen, Creamer and O'Leary.
Commissioner Werbelow was also present. Excused absences: Commissioners Christian
and Royal.
Wage and Salary. Human Resources Director Linda Gardner presented the proposed
recommendations for Non-Bargaining Unit changes in compensation for Fiscal Year
1999-2000.
The committee recommends that the following resolution be adopted:
RESOLVED, That effective July 1, 1999:
1) All current Non-Bargaining Unit Clerical-Technical salary ranges be increased
2.0% for Fiscal Year 1999-2000
2) All current Non-Bargaining Unit(First-Line Supervisor and above) salary
ranges be increased 2.5%.
3) Base salary increases for all employees be administered by each Process
Director within the budgeted amount allocated to their respective process.
RESOLVED FURTHER, That part-time employees receive up to a 2.0%
general increase rounded up to the next full nickel.
Share the Success and Incentive Pay Plan. General Manager Pandy presented an
overview of the Share the Success (STS)Program and the new Incentive Pay Plan. The
STS Program allocates up to 2.5% of fiscal base pay based on STS measures. The new
Incentive Pay Plan focuses on BWL processes and continuous improvement. The
funding mechanism insures that the BWL's financial success benefits the customers
before any incentive pay is realized.
JUL-06-1999 12:00 BD OF WRTER LIGHT 1 517 371 6855 P.05i13
Board Minutes Page 49
June 29, 1999
The committee recommends that the following resolution be adopted:
RESOLVED that the return on assets (ROA)percentage achieved be
utilized as a basis for the Share the Success Program and the new
Incentive Pay Plan.
RESOLVED FURTHER that the first 2.5% from the ROA percentage
achieved be allocated to Corporate Measures in three areas:
1) Financial performance
2) Customer satisfaction
3) Employee productivity
RESOLVED FURTHER that the ROA percentage above 2.5% (if any) be
allocated to Process Measures. The new incentive pay would be different for each
process,based on that process' performance measures.
NOTE: The ROA percentage is utilized as a percentage of gross payroll for
calculation of incentive pay.
Submitted by:
Dave O'Leary, Acting Chair
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to accept the
report.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
#99-6-2
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 is hereby set.
JUL-06-1999 12:00 BD OF DATER LIGHT 1 517 371 6855 P.06i13
Page 50 Board Minutes
June 29, 1999
199
July 27 -Tuesday
August 24 -Tuesday
September 28 -Tuesday
October 26 - Tuesday
November 23 - Tuesday
December 14 - Tuesday
Regular meeting 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 July 4, 1999.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to accept the
report.
Action: Carved unanimously.
#99-6-3
EMPLOYEE BENEFITS OPTION PLAN—SHARE THE SUCCESS
RESOLVED, That the Committee has reviewed and researched numerous options for the
Share the Success bonus. The option package has administrative costs only, while
providing our employees the opportunity to purchase additional fringe benefits. Listed
below are the final recommendations submitted by the Options Committee on the
Employee Benefit Option Plan:
I. That the Flexible Spending Account (FSA)be continued:
That the BWL award the contract, until further notice, to WEYCO, Inc. for the
FSA administration. Management will be responsible to do periodic reviews
for continuation of the FSA.
H. Options available through the"Whatif'Program:
1. Purchase of Vacation * No Change
2. Purchase of Free Choice * No Change
3. ICMA No Change
4. FSA (Flexible Spending Account) No Change
***
5. Charitable Contributions ** Make-A-Wish Foundation® of Michigan and
Meals-on-Wheels "Tri-County Office on
A '
JUL-06-1999 12:00 BD OF WRTER LIGHT 1 517 371 6B55 P.07/13
Board Minutes Page 51
June 29, 1999
III. Options available through Human Resources:
6. Long Term Disability Program Annual enrollment for"buy-up"option
changes
7. UNUM Term Life Insurance Open enrollment for changes
8. Cancer, Intensive Care, Voluntary Annual enrollment for changes
Indemnity(previously called Direct
Cash Supplement), Accident Expense
AFLAC Plans
* Purchase of Vacation and Free Choice will be limited to ten(10) total days to include
no more than two (2) Free Choice days.
** To lower administrative costs, all checks less than$5.00 will be defaulted to the
charities option. Opt out procedures will be available for employees declining the
default.
*** Maximum annual contribution for health care expenses is $7,500 and dependent care
maximum is $5,000 (see IRS rules).
Motion by Commissioner Christian, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-6-4
RETURN ON EQUITY
RESOLVED, That the Board pay $6,383,937 to the City of Lansing pursuant to our
agreement dated June 30, 1992. A memo to Dana Tousley dated 6/14/99 showing the
calculation is enclosed.
RESOLVED FURTHER, That all Receiving Fund cash and investments remaining
following the above payment be transferred effective June 30, 1999 to the Special Project
Fund for future capital projects.
Motion by Commissioner Christian, seconded by Commissioner Werbelow, to adopt the
resolution.
Action: Carried unanimously.
JUL-06-1999 12:00 HD OF WRTER LIGHT 1 517 371 6855 P.08/13
Page 52 Board Minutes
June 29, 1999
#99-6-5
CHILLED WATER SERVICE POLICIES
RESOLVED, That the following policies for Chilled Water Service be approved.
Chilled Water Service Policies
I. Introduction
The BWL will install, operate and maintain a chilled water system in certain locations to
provide for the air conditioning needs of its customers. The chilled water system consists
of a production facility where water is cooled by large chillers and pumped through a
network of dedicated distribution mains. The chilled water is used to provide air
conditioning including dehumidification within the buildings served. Chilled water is
warmed by use in the buildings and is then returned to the production facility through a
system of return piping to be cooled again.
The BWL will provide chilled water service to customers by contractual agreements. The
BWL's ability to provide chilled water is limited by the capacity of the chilled water
production facility. The BWL will make service available, subject to these policies, to
customers who have direct access to, or could_ be accessed through the extension of
existing chilled water distribution mains.
II. Chilled Water Service Area
The service area is that area where chilled water distribution mains are located with
available capacity to serve customers. The BWL will expand the service area based on
customer interest and financial feasibility for chilled water main extension and chilled
water plant capacity additions.
III. Chilled Water Service Extensions
Extension of the chilled water distribution system may be required in order to serve a new
customer. Customer service connections will be available where the BWL's chilled
water system has adequate capacity to support the requirements of such a service and
where chilled water main extensions can be cost justified. In such cases the BWL will
determine the cost of the chilled water system extension and specify any required
customer contribution in aid of construction in the contract for service.
IV.Customer Service Installations
The BWL will provide supply and return piping from the chilled water distribution mains
to the property line where chilled water service is being provided.
JUL-06-1999 12:00 HD OF WRTER LIGHT 1 517 371 6855 P.09/13
Page 53
Board Minutes
June 29, 1999
The customer is responsible to install all services using chilled water from the BWL's
chilled water system at their own expense. Customers shall provide the BWL adequate
space on the premises in which to meter chilled water usage, including supply and return
temperature monitoring and other instrumentation as deemed by the BWL to be required.
The BWL will install, own and maintain the metering equipment and instrumentation.
The customer is responsible to connect chilled water supply to the building and return
piping to the chilled water service or meter setting installed by the BWL, and shall
cooperate with the BWL's personnel to locate metering equipment on customer's
premises in a location that is secure and can be accessed and maintained safely.
Chilled water service may be interrupted or curtailed due to circumstances such as
emergency conditions or force majeure reasons. 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 BWL'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 BWL property and to inspect the Customer's connection and piping.
Neglect or refusal on the part of the Customer to provide reasonable access shall be
sufficient cause for discontinuance of service by the BWL, and assurance of access may
be required before service is restored.
The Customer shall operate its system in accordance with prudent utility practice and in
such a fashion so as not to cause harm to the BWL's Chilled Water System. In the event
that Customer's operation of its system is determined to be detrimental to BWL's System,
the Customer shall,upon notice from the BWL, cease operating the System in such
fashion, or the BWL may discontinue Chilled Water Service.
The BWL will offer technical assistance to customers as requested in areas where the
BWL possesses technical expertise,per adopted procedures. These areas include service
installation,relocation or upgrading of services and optimizing the utilization of the
commodity.
V. Chilled Water Rates
Chilled Water Service rates are under the authority of the BWL Board of Commissioners.
Chilled Water Service rate schedules are available upon request and are a part of this
policy.
Vl Payment for Chilled Water Service
All chilled water usage will be metered for billing purposes.
JUL-06-1999 12:01 BD OF WATER LIGHT
1 517 371 6855 P. 10i13
Board Minutes
Page 54 June 29, 1999
Service to a customer may be terminated for non-payment of bills. Also, a customer may
be back-billed for chilled water service if appropriate.
A hearing process will be available for resolution of customer disputes.
Motion by Commissioner Christian, seconded by Commissioner Aquilina,to accept the
report.
Action: Carried unanimously.
UNFI _ ED BUSINESS
No unfinished business.
NEW BUSINESS
Chair Diane Royal announced that the Nominating Committee will convene in July to
develop a slate of Board Officers for the next fiscal year. A survey will be sent to each
Commissioner for input on the member's office preference.
RESOLUTION
No resolutions.
GENERAL MANAGE REMARKS
Alaiedon Township—Water Service Agreement. General Manager Joe Pandy handed
out a copy of a communication from Sue McCormick, Manager of Marketing,regarding
the Alaiedon Township Retail Water Service Agreement. Commissioner Christian asked
how this will affect Jackson National Life. When the mains were originally installed, 16"
mains were put in as part of the plan to serve the entire area.
Chilled Water Update. A communication on Chilled Water was handed out. The
Letter-of-Intent indicates the State of Michigan is interested in participating in the Chilled
Water District in downtown Lansing. A 12,000-ton system, as opposed to a 6,000-ton
system will be built.
GM—Central Utility Complex. A decision may come as early as June 30 on who will
own,build and operate the central utility complex to serve the proposed General Motors
manufacturing plan. The first meeting will be scheduled for July 8th, with a November 1
groundbreaking. The plant is expected to be built in 14.5 months.
JUL-06-1999 12:01 HD OF WRTER LIGHT 1 517 371 6855 P. 11/13
Page 55
Board Minutes
June 29, 1999
Golf Tournaments. Commissioners interested in participating in either of the following
golf tournaments, are requested to contact Joe Pandy or Mary Sova.
1. July 26 VIP Tournament-Media Day for the Olds Classic
2. August 16 Convention Visitors Bureau
Pace and Partners. Lisa Crumbley and Karen Bouffard from Pace and Partners were
introduced. Pace and Partners won four National TELLY Awards for television
commercials for the Board of Water and Light.
Chili Cook-Off. Pace and Partners also had some materials available for viewing from
the recent Chili Cook-Off. According to John Strickler, Communications Director,
approximately 1,500 people attended the event which made about $8,700 for the Adopt-
A-River Program. The revenue doubled since last year's cook-off.
Joe Davis, President of IBEW Local Union 352,was introduced. The IBEW entered a
chili recipe in this years Chili-Cook-Off. Congratulations to the IBEW for their
participation.
Children's Water Festival. The Board of Water and Light received a Certificate of
Appreciation for their participation in the 1999 Children's Water Festival.
"Cities of GM's Past and Future". General Manager Pandy spoke about an article that
appeared in the June 29, 1999 issue of the Detroit Free Press entitled "Cities of GM's.
Past and Future". A copy of the article will be mailed to each of the Commissioners.
The despair of General Motors Corporation in Flint and the hope of General Motors in
Lansing were compared.
Woodingham Substation Fire. A fire at Woodingham Substation on Sunday, June 27,
was discussed. It is believed that water got into the switchgear causing the fire. One of
two transformers is salvageable, the other is a complete loss. A mobile substation from
Consumers Energy is currently being used. Staff is discussing whether to rebuild the
substation or to switch the affected customers to other circuits. The Commissioners will
be updated on the status. Woodingham Substation was built in 1965,making it 34 years
old. Something went wrong in the relaying system and the alarms did not operate
warning of the fire. The Board of Water and Light has twelve other substations similar to
Woodingham. General Manager Pandy also reported on the power outage last week at
Eckert Station.
Steam Leak. .There is a steam leak near the General Motors facility on Martin Luther
King Junior Boulevard. The repair is on hold until the first week in July when General
Motors is shut-down. The repair is the responsibility of the BWL.
Y2K Update. Harvey Briggs from Information Technology presented a status report on
Y2K. The Board of Water and Light is in excellent shape. Mr. Briggs main concern is
the status of other vendors. In comparison to other companies,the BWL has spent
relatively little money on Y2K.
JUL-06-1999 12:01 BD OF WATER LIGHT 1 517 371 6655 P. 12/13
Board Minutes
Page 56 June 29, 1999
Coal Dispute Settled. Michigan Public Power Agency (MPPA) settled with Detroit
Edison and received$13Million in settlement for the coal dispute during the years 1991-
1995. Negotiations are continuing for years 1995-1999 and beyond.
Water/Electric Rate Comparisons. General Manager Pandy reported that Board of
Water and Light's electric rates are 20-31% lower than Consumers for residential
customers, 24-31% lower for commercial, and 8-13% lower for industrial. For the typical
water service customer, one-third of the bill is for the price of the water, two-thirds is the
sewer fee.
R—E SS>IONERS
Commissioner Werbelow asked for clarification of the meaning of 115 basis point spread
on the GM Lansing Central Utilities Proposal. Joe Pandy responded that the BWL
estimated our interest rate would be 115 basis points above the rate for 15-year Treasury
a
bills. GM will pay the actual interest rate determined at the time bonds are sold, plus
5% capacity fee margin to the BWL.
Commissioner Christian inquired about a$70,000 discrepancy for General Motors Plant
#1 infrastructure improvements project. General Manager Pandy will see that this is
corrected.
Commissioner Royal thanked staff for dedicated efforts in negotiation for a Central
Utility Complex with General Motors, and Chilled Water Service with the State of
Michigan.
Commissioner Christian attended the International District Energy Association
Conference. At the conference he spoke with people regarding Chilled Water Services
and making ice as a byproduct. He suggested the BWL may want to consider this
venture.
EXCUSED ABSENCU
There being no objection, the absences of Commissioners Creamer and Murray were
excused.
Adopted unanimously.
HD OF DATER LIGHT 1 517 371 GB55 P.13/13
JUL-06-1999 12:02 Page..
Board Minutes
June 29, 1999
PU,BL C�NTS
THE CHAIR ANNOUNCED THAT MEMBERS OF W pLjBLC ARETER AND HT SUBJMECT.
TO SPEAK TO THE BOARD ON ANY BOARD OF
No persons spoke.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner Werbelow, the
meeting adjourned at 6:30 p.m.
/s/Rosemary Sullivan, Assistant Secretary
Filed: July 6, 1999
Marilynn Slade, City Clerk
TOTAL P.13
JUL-06-1999 11'59
BD OF IWRTER LIGHT 1 517 371 6855 P.02i13
WATm&1 GHT
im
P. O. Box 13007
Lansing, MI 48901-3007
July 6, 1999
TO: Marilynn Slade, City Clerk
City of Lansing
FROM: Rosemary Sullivan, Assistant Secretary
Board of Water and Light
RE: June 1999 Board Meeting
Attached are the minutes of the June 29, 1999 Board Meeting for the
Lansing Board of Water and Light.
Please acknowledge below, and return to Rosemary Sullivan (Fax 371-
6855), that you received the minutes, and that they were filed with your
office on July 6, 1999. ,�. '.0
Thank you.
rn ..
Received By
Filed (date)
11�59 HD OF WRTER LIGHT
1 517 371 6855 P.01i13
JUL-06-1999
WAT6R81-1 GH T
. � BOARD OF WATER
A LIGHT
1232 HaDCo Drive
P_O. Box 13007
Lansing, MI 48901-3007
Fax: 517-371-6855
DATE:
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Page 34
MINUTES OF THE BOARD OF COMMISSIONF�'I I,,I TING
LANSING BOARD OF WATER AND LIGHT 1 Q ERf;
Tuesday, May 25, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Charles M.
Creamer, David O'Leary, Diane Royal and Judson Werbelow.
Absent: Commissioners Ernest J. Christian and Mark Murray.
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Werbelow, seconded by Commissioner O'Leary, to
approve the minutes of regular session held April 27, 1999.
Carried 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
No Communications.
Board Minutes Page 35
Mav 25, 1999
REPORTS OF COMMITTEES
(Background materials on items presented are on file in the Office of the Corporate
Secretary)
999-5-1
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on May 11, 1999, at 5:30 p.m., to discuss pending
matters.
Commissioners present: Rosemarie E. Aquilina, Ronald C. Callen, Charles M. Creamer,
David O'Leary, Mark Murray, Diane R. Royal, and Judson M. Werbelow. Absent:
Commissioner Ernest J. Christian.
General Motors' Central Utilities Complex. General Manager Pandy reviewed the
significant aspects of BWL proposed data presented to prospective suppliers that are
bidding on General Motors' Request for Proposal (RPF) for a Central Utilities Complex
due on May 20, 1999. BWL principles of agreement and assumptions distributed to
Suppliers that are bidding Alternate I of the RFP were outlined. Details of the proposal
were included with the Committee of the Whole Agenda materials. Following
discussion, the Commissioners concurred with the proposal and information presented in
response to the RFP Alternate No. 1. A draft resolution on the Central Utilities Complex
and Chilled Water System has been forwarded to the Lansing City Council for their
concurrence.
District Cooling System. General Manager Pandy distributed a revised financial model
for the proposed District Cooling System (DCS) that shows a positive cash flow and
internal rate of return by 2008. Background information on the DCS was included with
the Committee of the Whole Agenda materials. Mr. Pandy noted that negotiations with
the State of Michigan are continuing to overcome calculation differences on how capital
costs are reported.
Fiscal Year 2000 Budget. Chief Financial Officer Dana Tousley provided an overview
of the three components that comprise the proposed Fiscal 2000 budget: (1) Sales and
Revenue for Water. Electric and Steam, (2) Operations and Maintenance (O&M)
Expense, and (3) Capital Projects. Projected income statements and cash flows for the
BWL for Fiscal 2000 were compared to the Fiscal 1999 budget. The proposed
consolidated 0&M expense is 1.9 percent lower than the twelve months ending March
31, 1999. This is due primarily to an expected decrease in fuel costs due to burning more
Western coal. Proposed capital expenditures during Fiscal 2000 are S55.544 million
versus $41.222 million in Fiscal 1999. This is a 34.7 percent increase due to several large
Pape 36 Board Minutes
May 25. 1999
projects. The capital budget«will be reviewed in more detail at a later date. Following
discussion. the Commissioners concurred with the proposed budget. This item will be
included in the General Manager's Recommendations for consideration at the regular
meeting of May 25, 1999 (see Resolution#99-5-3, included in these minutes).
(Commissioner Murray left the meeting at 6:35 p.m.)
There being no further business. the meeting adjourned at 6:50 p.m.
Submitted by:
Rosemarie Aquilina, Chair Pro Tem
COMMITTEE OF THE WHOLE
Motion by Commissioner Creamer, seconded by Commissioner Callen, to accept the
report as presented.
Action: Carried unanimously.
GENERAL 1'IANAGER'S-RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
POLICY ON REVENUE BOND ISSUES (TABLED)
RESOLVED, That any single Revenue Bond Issue in excess of$100 million dollars will
be authorized and issued by the Board only when the City Council has, by resolution,
concurred with the issuance of said Bonds; excluding, however, electric generating
capacity additions;
RESOLVED FURTHER, That the Board will advise the City Council of the needs for,
and the details of, all Bond Issues.
RESOLVED FURTHER, That this policy rescinds Sec. 9-13 of the BWL Policy and
Procedures, adopted by the Board on 1-9-70. and is replaced with this revised version.
Discussion. General Manager Pandy noted that the revenue bond policy adopted by the
Board in 1970 provided that concurrence by the City Council would required to authorize
any single revenue bond issue in excess of S50 million for projects other than generating
capacity additions. The resolution being proposed would raise the limit from $50 million
to $100 million.
Commissioner Werbelow provided additional history on the origin of the present policy.
He stated that under a prior state statute the City Council authorized the issuance of
Board Minutes
Mav 25. 1999 Page 37
bonds. The Revenue Bond Act was changed and now provides that a municipal utility,
governed by an independent board, is permitted to issue bonds on behalf of the City
without the approval of the City Council. In the spirit of maintaining good relations with
the City Council. the Board adopted the 1970 policy.
Following discussion, there was consensus among the Commissioners to postpone action
on the proposed resolution at this time. Once General Motors makes a decision on the
central utilities complex, which could involve BWL financing in excess of$50 million, it
would be appropriate for the Board to discuss the existing policy with City Council. The
reaction of the City Council would then be solicited concerning a decision to either
rescind the existing policy or amend the policy to raise the limit from $50 million to $100
million.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to TABLE
the resolution.
Action: By unanimous consent. the resolution was tabled.
#99-5-2
PURCHASE OF BUSINESS TRAVEL ACCIDENT INSURANCE
RESOLVED. That the Board of Water and Light purchase business travel accident
insurance from the Life Insurance Company of North America, represented by the David
Chapman Agency, Inc., for the three (3) year period from June 10, 1999 to June 10. 2002
at a three year prepaid premium of$2.599.02.
Motion by Commissioner Creamer. seconded by Commissioner Callen, to adopt the
resolution.
Action: Carried unanimously.
#99-5-3
FISCAL YEAR 2000 BUDGET
RESOLVED, That the annual budget covering Fiscal 1999-2000 be approved as
presented (see Attachment I).
RESOLVED FURTHER, That capital projects are authorized in the amount of the project
estimate. Capital expenditures for Fiscal 1999-2000 are limited to the amount included in
the budget.
The annual operation and maintenance budget estimate of expenses is $161.8 million. In
addition, the revised capital expenditures forecast is $81.4 million of which $48.3 million
will be financed by a new bond issue to include a proposed Chilled Water System.
Board Minuies
Paee 38 May 25. 1999
Motion by Commissioner Aquilina, seconded by Commissioner O'Leary, to adopt the
resolution.
At the request of Commissioner Werbelow,
Chief Financial Officer Dana Tousley
Y) The capital
reviewed the bonded capital project budget for Fiscal e eal M. TouOsley noted that
budget has three categories: annual, planned and bond projectsed
in his budget presentation to the Committee of the Whole on May 11. 1999. he inform al
the Commissioners that the proposed Chilled Water System and the proposed Gene
Motors Central Utilities Complex were not included spl the beenlpadded to st of dthe bonded capital
ed projects. Since
that meeting, however, a Chilled Water System h
999-2000. The Central Utilroect e Complex
pnotx is still includedpin hold pending
project budget for FY 1 the bonded
a decision from Gener al Motors; therefore, this p
— project list. A supplement will be sent to the Boar details planned
A revised budget incorporating the proposed Chilled Water
capital projects forecast. P
System will also be furnished.
that on May
24. 1999, the Lansing City Council
General Manager Pandy reported
truct, own, and opChilled
concur util
red that the BWL may cons ty sery cesfor industry. He brie ed
Central Utilities Complex as well as the ancillary to
the Board on negotiations in progress with the State ofdMi decision is or the Bpla contemplated provide
chilled water services to downtown buildings. A
Copies of two scenarios were handed out comparing
financial
$n19l data
r sus a 6 000-
system. which includes the State of Michigan at
a costton system without the State of Michigan at e to contingencies n cost of lenc2.1 iesi for ocost overruns. Mr.
questions raised by the Commissioners relativ g
Pandy stated that a 10 percent contingency is included in the project cost estimate.
Action: Carried unanimously.
499-5-4 (Late Agenda Item
FFICIAL INTENDT AO REIMBURSE gORIZING PROJECT
RESOLUTION DECLARING O
EXPENDITURES ��TOTB�ND PROCEEDS OF INTENT TO ISSUE BONDS
PUBLICATION O
ght (the "Issuer") proposes to issue its tax-exempt
WHEREAS. the Board of Water and Li
bonds (the "Bonds") to finance the cost of renovating and improving the water, steam and
es system of the City of Lansing as hereinafter described (the "Project");
electric utiliti
and
costs Of
WHEREAS. it is anticipated that the issuer will advance t r or a epaid fromon of o be proceeds of
the Project prior to the issuance of the Bonds, such advanceP
the Bonds upon issuance thereof; and
Board Minutes
.%IaN 25. 1999
Page 39
WHEREAS, Section 1.150-2 of the Treasury Regulations on Income Tax (the
"Reimbursement Regulations") specifies conditions under which a reimbursement
allocation may be treated as an expenditure of bond proceeds, and the Issuer intends
this resolution to qualify amounts advanced by the Issuer to the Project forby
reimbursement from proceeds of the Bonds in accordance with the requirements of the
Reimbursement Regulations.
NOW, THEREFORE. BE IT RESOLVED BY THE ISSUER. as follows.
l. The Project shall consist of improvement, renovation and extension
of certain
Portions of the water. steam and electric utilities system of the City of Lansing,
including some or all of the following:
the filter press system at Dye Water Conditioning Plant,r(ii) on tru ovement d•expansion of
transmission and distribution substations iii the improvement and extension Ion of electric
water distribution system in Dewitt, (iv) construction of a water Pumping
um in
(v) construction of a chiller plant and related distribution system to serve a downtowdn
chilled water district.
2• The maximum principal amount of obligations expected to be issued for the project is
$50,000,000.
3. The Issuer hereby declares its official intent to issue Bonds to finance the costs of the
Project, and hereby declares that it reasonably expects to reimburse the Issuer's
advances to the Project as anticipated by this resolution.
4. The Bonds shall be authorized by proper proceedings subsequent to this resolution.
5. Staff is authorized and directed to publish in a local newspaper of general circulation
a notice of intention to issue bonds substantially in the form attached, with such
changes as are approved by bond counsel, B WL counsel and staff.
6. All prior resolutions and parts of resolutions insofar as they may be in conflict with
this resolution are hereby rescinded
Motion by Commissioner t the
.Werbelow. seconded by Commissioner Creamer to adopt p
Discussion. Commissioner Werbelow asked if the resolution under consideration by the
Board had any changes from the preliminary copy that was faxed to the Board. General
Manager Pandy reported that the faxed copy listed $40 million as the maximum principal
amount of obligations expected to be issued for the project. That amount has been
revised to $50 million. Chief Financial Officer Dana Tousley noted some minor changes
were made after the preliminary copy was reviewed by staff and bond counsel.
Board Minutes
Mav 25. 1999
Page 40
Action: Carried unanimously.
-499-5-5
AGREEMENT FOR ENGINEERING AND CONSULTING SERVICE
That the BWL enter into a three-year agreement, subject to approval of
RESOLVED, oration; Blasland,
Terms and Conditions. with R.W. Beck, Inc.; Black & Veatch Corp
McKee: Clayton Group Services; Commonwealth
Bouck & Lee, Inc.; Camp Dresser & Engineers-
Associates
Carr & Huber. Inc.; Jones & Henry Eng
Associates Inc.; Fishbeck, Thompson LLC; Snell Environmental
Ltd.; Novak Engineering, Inc.: SFT, Inc.; Sargent & Lundy,
tants, Inc. to supply
Group, Inc.,
Soil &Materials Engineers, Inc.: and Stanley C ery ces to
engineering and consult be provided is
consulting services. The estimated cost o s
S200,000 per year.
Co.; CDA Engineering; Capital Consultants; Hobbs
Other bidders were Ban Engineering ement
& Black Associates. Inc.; Lutz. Daily & Brain: McNames, norteR&�rceeManag power
Svstem Engineering, Inc.; Professional D; Superior Engineering Corp.; URS Greiner
International, Inc.; STS Consultants LTD; Sup
Woodward & Clyde; and Wilcox Associates.
Tromblev, Randers Consulting Engineers;
Burns & McDonnell; Burns &Roe; Clark, Science- Inc.; RMT, Inc.
Key
stone stone Design Group; Mayotte, Jacob; Parsons Engineering dec ned to submit bids.
Michigan; and Stone & Webster Engineering Core to adopt the
n by Commissioner Werbelow, seconded by Commissioner O'Leary, P
Motio
resolution.
Action: Carried unanimously.
499-5-6
AM
ENDMENT NO. 3 TO RAIL TRANSPORTATION CONTRACT
D That the Board approve Amendment No. 3 to C-9514 Transportation
RESOLVE S and Canadian National
Contract ("Contract") with Norfolk Southern Railroad (N )
, subject to approval as to form by the BWZ-'s Legal Counsel. The
Railway (CN)
amendment particulars are as follows:
1.
The following origins shall be added: Kanawha District,2. Conway, PA
The base rates shall be as follows:
Board;Minutes
%Ia} 25. 1999
Page 41
a) From Origins in Kenova/Thacker I Districts
Sin— 1- e� 7,000 Net Ton
$15.99 Trainloads - 8.000 Net Ton
NS Cars Trainloads - Private Cars
$15.54*
$14.04
*Rate of$14.97 will apply from Colmont, Wti (Mine No.084 6)
b) From Origins in Thacker II District
Single Cars7,000 Net Ton
$16.57 Trainloads - 8,000 Net Ton
NS Cars Trainloads
il 6. - Private Cars
05 $14.55
c) From the following Origins: Kanawha District, 14.55
Conway, PA
7,000 Net Ton
Trainloads - NS Cars
$14.97 NT
�• This Amendment No. 3 will take effect on the later of June
date of the Consolidated Railroad (Conrail) break-up between
and CSX Transportation. 1, 1999 or the closing
Norfolk Southern Railroad
Motion by Commissioner Comm
Werbelow, seconded by ss
resolution. loner O'Leary, to adopt the
Action: Carried unanimously.
99-5-7 (Late Agenda Item)
RESOLUTION TO DISPOSE OF INTEREST IN REAL
(EASEMENT) LOCATED IN BLOCK I I I ON INIICHIG PROPERTY
WASHINGTON SQUARE AN AVENUE AT
WHEREAS, Summit partners, a Michigan general
of Water and Light to abandon overhead rights receivedfrom
letter datedPartnership, has requested the Board
May 16, 1991 which granted the Board of Water and Light power under a
East tv ft. of the North 110 ft. of Lot 4 and Lot 3 in Block 1 1
County, Michigan; and g right to use the
1, City of Lansing, Ingham
WHEREAS, Summit Partners has agreed to grant the Board of Water and Light a
replacement easement to lay and mai
fit. of the South 26.1 ntain cables and other appurt 3 ft. of Lot 3; and the West 10 ft. of the \Tort enances on the West 10
h 100.3., ft. of Lot 4,
Paue 42 Board Minutes
May 25. 1999
except that the easement on Lot 4 shall be only the West 5 ft. of the East 22 ft. for the
area South of Vault 2: and
WHEREAS. the easement rights granted under the Consumers Power letter dated May
16, 1991 are no longer necessary to the operation of the Board of Water and Light.
IT IS RESOLVED:
That the easement granted under the Consumers Power letter of May 16, 1991, is no
longer necessary to the operation of the Board of Water and Light. Further, that such
easement is declared surplus to the Board of Water and Light and deemed released by this
resolution. A description of the easement and abandonment agreement is attached to this
resolution as Exhibit A. (see Attachment II-a.)
That the abandonment of the easement is conditioned upon the grant of a replacement
easement and subject to approval by the Lansing City Council in accordance with the
Lansing City Charter. The replacement easement is attached to this resolution as Exhibit
B. (see Attachment II-b.)
That staff is directed to execute the abandonment agreement and submit this matter to the
City Clerk for placement on the agenda of the Lansing City Council at the earliest
possible date.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Discussion. General Manager Pandy reported that the BWL easement lies in the area
known as the former Jim's Tiffanv Restaurant, now a vacant parking lot. The developer
is trying to clear that area for future development of Block 111. The BWL no longer
requires this easement for utility purposes.
Action: Carried unanimously.
499-5-8 (Late Agenda Item)
RESOLUTION TO DISPOSE OF INTEREST IN REAL PROPERTY
(EASEMENT) LOCATED IN BLOCK 101 ON MICHIGAN AVENUE, LANSING.
WHEREAS. Land Equities Corporation has requested the Board of Water and Light to
abandon a portion of its easement rights granted it by Jury Rowe as depicted in Exhibit A
(see Attachment III-a) and more specifically described as follows:
An easement for the Board of Water and Light being over a part of the
West 44 feet of Lot 9 and the East 16 feet of Lot 8, Block 101. Original
Plat. City of Lansing, Ingham County, Michigan, according to the
recorded plat thereof. as recorded in Liber 2 of Plats. Page 36. 37 and 38.
Board Minutes Page 43
Mav 25. 1999
Ingham County Records and described as: beginning at the Northwest
corner of said Lot 9; thence East along the North line of said Lot 9 a
distance of 22.0 feet; thence South 6.30 feet; thence West 28.40 feet:
thence North along the West line of the East 16 feet of said Lot 8 a
distance of 10.00 feet; thence East along the North line of said Lot 8 a
distance of 16.00 feet to the point of beginning.
WHEREAS, Land Equities, or its assignee, has agreed to grant the Board of Water and
Light a replacement access easement to lay and maintain cables and other appurtenances
on top of the building as depicted in Exhibit B (see Attachment III-b) and more
specifically described as follows:
An access easement for the Board of Water and Light being over a part of
the West 44 feet of Lot 9, Block 101. Original Plat, City of Lansing,
Ingham Counn-. Michigan, according to the recorded plat thereof: as
recorded in Liber 2 of Plats, Pages 36. 37 and 38, Ingham Count Records
and described as: commencing at the Northwest corner of said Lot 9.
thence South along the West line of said Lot 9 a distance of 10.00 feet.
thence East 12.40 feet to the point of beginning of this description; thence
North 6.30 feet: thence East 21.60 feet, thence South 6.30 feet: thence
West 21.60 feet to the point of beginning.
WHEREAS, the easement rights depicted in paragraph one are no longer necessary to the
operation of the Board of Water and Light.
IT IS RESOLVED:
That the Board declares that the portion of the easement granted as depicted in paragraph
1 is no longer necessan- to the operation of the Board of Water and Light. Furthermore,
that such easement is declared surplus to the Board of Water and Light and deemed
released by this resolution.
That the release of the easement is conditioned upon the grant of a replacement access
easement and subject to approval by the Lansing City Council in accordance with the
Lansing City Charter.
That staff is directed to execute a release agreement and submit this matter to the City
Clerk for placement on the agenda of the Lansing City Council at the earliest possible
date.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Discussion. General Manager Pandy reported that Land Equities is building a new
building on the former Jury Rowe property adjacent to City Hall on Michigan Avenue.
Pace 44 Board Minutes
May 25. 1999
In exchange for the BWL abandoning the easement. they are granting a replacement
easement on top of the new building.
Action: Carried unanimously.
UNFINISHED BUSINESS
Post Retirement Health Insurance Liability. Commissioner Werbelow requested that a
schedule with benchmarks be maintained for the establishment of a retiree trust to fund
the post retirement health insurance liability. He noted that a regular progress report to
the Board showing the milestones of the project, expectations, and completion schedule
would be helpful to follow the progress of the project.
Kellie Willson, Director of Metrics and Audits, reported that a meeting is scheduled this
week with the external legal and benefits advisor to layout a timetable for the project.
She noted that if it is unnecessary to update the numbers, then she would prefer to
proceed with the current data. Commissioner Werbelow suggested submitting two
timetables to the Board—one showing updated numbers and another without updated
numbers. Staff,s recommendation on the best approach was requested.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
District Cooling System. General Manager Pandy discussed time line issues related to a
Chilled Water System. He reported that the BWL is under intense pressure to commit
this week to a Chilled Water System from developers who are interested in receiving
chilled water service from the BWL for their downtown projects. The developers are
trying to develop these projects to meet a year 2001 completion date. Their engineering
design cannot proceed until it is known if the new developments will be connected to a
BWL Chilled Water System; otherwise, the design will be based on their own chilled
water system. Mr. Pandy noted that the BVVL faces the dilemma of not knowing when
the State of Michigan will indicate if they want to connect to a BWL chilled water
system. He stated that if the State is not at a decision point this week or chooses not to
Board Minutes Page 45
Mav 2-�. 1999 `
connect. a decision needs to be made whether to proceed with the 6000-ton system to
serve the county consolidated courts facility and the Civic Center redevelopment project.
The developers have provided the BWL with a letter of intent to go with a BWL chilled
water system.
A lengthy question and answer period followed relative to (a) risks associated with a new
venture of this magnitude, (b) site considerations for the proposed new facility, including
aesthetics, noise. vibration, odor, and discharges into the air, and (c) the rates to be paid
by chilled water customers. The Commissioners stressed on the importance of
incorporating flexibility in the rate based on BWL costs. Mr. Pandy stated that the
developers understand they will be required to sign long-term utility contracts prior to the
BWL proceeding with the construction of a chilled water system, and that rates would be
based on cost of service. Mr. Pandy indicated that he believes there is a good business
case for this project as demonstrated in the forecast and that it is an important strategic
move for the steam utility. He also noted that there is a mechanism for the BWL to back
out of the project if the contracts are not executed.
Following discussion, the Commissioners concurred that they would be willing to
proceed with a 6000-ton chilled water system subject to securing 1 5-year contracts with
the developers that would enable the B'WZ to recover all its current and future costs and
some margin. Staff will submit a formal resolution for consideration after the contracts
have been entered into with the owners of the projects.
Report on May 171h Storm Outage. General Manager Pandy reported on the severe
storm that swept through the Lansing area late Monday afternoon on May 17`h He
displayed a sample taken from the transmission lines that fell on the I-496 expressway
and a piece of one of the poles that broke. Service to over 20.000 customers was restored
within three days. Mr. Pandy noted that the Twenty-First Century phone system recently
approved by the Board is scheduled to be on line on July 1. 1999. Crews from Traverse
City, Zeeland, Coldwater and Grand Haven were called in to assist with restoration
efforts. A transmission line contractor from Reed City was also brought in to rebuild the
transmission lines. In addition service crews from several electrical contractors were
engaged to assist customers with service restoration needs. Staff is in the process of
debriefing storm restoration efforts for process improvement. The estimated financial
impact from the storm is anticipated to total $1 million. Mr. Pandy congratulated the
employees for their tireless efforts in restoring power that in many cases involved
dangerous conditions. It was noted in answer to questions by Commissioners, that
emergency crews are required to rest 5 to 10 hours after every 16 to 20 hours of
continuous work.
Twenty-Five Year Dinner a Successful Event. General Manager Pandy reported that
31 employees were inducted into the BWL's Twenty-Five Year Club.
Paoe 46 Board Minutes
May 25. 1999
Benchmark Data on Financial and Operating Ratios Reviewed. General Manager
Pandv reviewed comparisons of B WL to investor owned utilities and other public power
systems. based on data from the American Public Power Association.
REMARKS BY COMMISSIONERS
There were no remarks.
EXCUSED ABSENCES
There being no objection, the absences of Commissioners Christian and Murray were
excused. y
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
ADJOURNMENT
On motion by Commissioner Creamer, seconded by Commissioner Callen, the meeting
adjourned at 6:55 p.m.
/s/iWary E. Sova, Secretary
Filed: May 28, 1999
Marilynn Slade, City Clerk
ATTACHMENT I
BOARD OF WATER AND LIGHT-LANSING MICHIGAN
BUDGET FISCAL YEAR ENDING JUNE 30, 2000 'Revised 5128/99 for chilled water district
WATER ELECTRIC STEAM TOTAL
PROJECTED INCOME STATEMENT $(000) FY 2000
OPERATING REVENUE 17,383 157,627 14,365 189,375
Operation/Maint Expense 11,047 127,890 11,694 150,631
Depreciation Expense 20,100
TOTAL OPERATING EXPENSE 170,731
OPERATING INCOME 18,644
Other Income 8,218
Other Expense 5.256
NET INCOME 21,606
NET INCOME AFTER CITY PAYMENT 15,058
RETURN ON NET ASSETS 4.30%
PROJECTED CASH FLOW $(000) FY 2000 _
i
Restricted Operating Cash 23,541
Restricted General Cash 13,839
Special Project/Const Cash 5.000
(BEGINNING CASH 7-1-99 42,380
i,
Sources of Cash
Net Income 21,606
Bond Proceeds 48,328
Depreciation 20,100
TOTAL SOURCES OF CASH 90,034
,SOURCES OF CASH + BEG. CASH 132,414
Uses of Cash
Debt Principal 1,508
Capital Expenditures 67,403
Payment to City 6.548
;TOTAL USES OF CASH 75,459
Restricted Operating Cash 18,829
Restricted General Cash 13,000
Special Project/Const Cash 25,126
'ENDING CASH 6-30-2000 56,955
Exhibit A
ATTACILMENT I I-a_1)
ABANDONMENT OF EASEMENT AGREEMENT
The City of Lansing, by its BOARD OF WATER AND LIGHT, a municipal
corporation, P. O. Box 13007, Lansing, Michigan 48901 ("BWL"), for the consideration set
forth below hereby abandons to SUMMIT PARTNERS, a Michigan general partnership, of
1111 Michigan Avenue, Suite 201, Fast Lansing, Michigan 48823 ("Summit") the following
described easement on the following terms and conditions.
1. Abandoned Easement Description. The easement on the attached Exhibit A is
abandoned by the BWL.
Additionally, the BWL is abandoning overhead rights under a Consumers Power
letter dated May 16, 1961 to the BWL to use the East 32' of the North 110' of Lot 4 and Lot 3
in Block 111, City of Lansing, Ingham County, Michigan.
2. Consideration. This Abandonment of Easement is given in consideration of the
Easement Agreement from Summit to BWL dated the same date as this Abandonment.
3. Removal of Structures. The BWL agrees to remove at its expenses all
underground and above ground structures located in the abandoned area (including switch gear,
transformers, underground cables, overhead poles, overhead cables, etc.). Additionally, the
BWL agrees to fill and compact all abandoned manholes after removal of equipment is
completed at BWL expense. Notwithstanding the above, BWL with Summit's approval may
leave the cable cavity from the western terminus of the abandonment eastward to existing
manhole D5 in order to preserve the possibility of udlizing that cavity to service a new
building to be constructed by Summit or its successors, but only so long as that cable cavity
presents no safety issues and the area has been filled and compacted over that cavity.
4. Effective Date. The parties are executing this Abandonment on the same date as
the Easement Agreement. However, this Abandonment shall be effective only after the new
structures are built as provided in the Easement Agreement and existing BWL Customers are
energized off the new system (in which event, the BWL will use its best efforts to accomplish
at the earliest possible time), at which time this Abandonment shall be recorded with the
Ingham County Register of Deeds.
Attachment II-a.2
5. Cooperative Efforts. Both parties agree to cooperate with each other and third
parties to effectuate the intent of this Abandonment and the intent of the Easement Agreement.
IN WITNaS WHEREOF, the parties have executed this Abandonment of Easement on
the = day of May, 1999.
WITNESSES: SUXLNM PARTNERS.
a Michigan partnership
Connie L. He nt"z By'
Van W. Martin. Partner
ol
JU I p. BOrOSI I
STATE OF MICHIGAN
COUNTY OF INGHAM ) SS.
The foregoing instrument was acknowledged before me this rf' day of May, 1999 by
Van W. Martin. Partner, on behalf of Summit Partners, a Michigan partnership.
Notary Public, Ingham County, I n
My Commission Expires:
BEVERLYI.v01T
Notary Public
shiawassee County,MI
My Commrssion Expires luh 17,10o3
ATTAUMENT TI-a.3
WITNESSES: BOARD OF WATER AND LIGHT,
a Municipal corporation
By:
Its:
STATE OF MICHIGAN )
) SS.
COUNTY OF INGHAM )
The foregoing instrument was acknowledged before me this day of May, 1999 by
, the
on behalf of the Board of Water and Light, a Municipal corporation.
Notary Public, Ingham County, MI
My Commission Expires:
Drafted by and When Recorded Return to:
Stephen L. Burlingame (P27136)
Fraser Trebilcock Davis & Foster, P.C.
1000 Michigan National Tower
Lansing, MI 48933
(517) 482-5800
ATTACHMENT II-a.4
Exhibit A
-ABANDONED EASE14ENT DFSCPJPTION
The exact legal description is to be determined by Summit's surveyor but it runs from
Grand Avenue west through Lots 1, 2 and 3 west of manhole D5 to the point where the new
electrical duct will nun south of new manhole #3.
The BWL believes that this legal description will be:
The north 10 feet of the south 36.16 feet of Lots 1, 2 and 3 of
Block 111. City of Lansing, Ingham County, Michigan, except
for the west 10 feet of the north 10 feet of the south 36.13 feet of
Lot 3 of the above-described property.
The parties agree that the abandoned easement will be as displayed in the shaded area
of Exhibit A-1 attached.
Once Summit's surveyor prepares the exact description, the arties a
that description for this Exhibit A and Exhibit A-1. p p t to substitute
ATTACHMENT II-a.5
I -•�` =I T
i
VICHIGAN AVE
w 5 4 3 2 1
Q i
10 EA EMENT A EA
> I
Q
z
O
-i=:RLO (::I-_: K 111
Q
Q CLI
6 7 8 9 10
ALLEGAN
I
I I
LEGEND
NEW EASEMENT AREA
® EXISTING EASEMENT AREA
ABANDONMENT AREA
NORTH
BOARD OF WATER �c LIGHT EASEMENT DRAWING
GRANTOR CB Richard Ells Martin
LOCATION: LOTS 3 & 4. BLOCK 111, CITY OF LANSING
PAGE OF PACES DRAWN BY: C.Gorman CHECKEa APPROVEa.
DATE 1/15/99 EASEMENT NO. 3301—'6-4050
Exhibit B
ATTACHMENT II-b. 1
EASEMENT AGREEMENT
SU�MUT PARTNERS. a Michigan general partnership. I I I I Michigan Avenue. Suite 201.
East Lansing, Michigan 48823 ("Summit"), in consideration of One and no/100 Dollars ($1.00)
(together with the additional terms and provisions set forth in this Easement Agreement) paid and
performed by the City of Lansing, by its BOARD OF WATER AND LIGHT, a municipal
corporation. P. 0. Box 13007. Lansing, Michigan 48901 ("BWL"), receipt of which is hereby
acknowledged. conveys and warrants to the BWL, its successors and assigns. forever the easement and
right to erect. lay and maintain cables. conduits. and other fixtures and appurtenances for the purpose
of transmuting and distributing electricity and/or conducting a communication business on. over, under
and across the following described parcels of land, including all public highways upon or adjacent to
said parcel of land, which parcels situated in the City of Lansing, Count- of Ingham. and State of
Michigan. :o-wit:
PROPERTY DESCRIPTION: Lots 3 and 4. Block 111. City of
Lansing, Ingham County Michigan.
EASEMENT DESCRIPTION: The west 10 feet of the south 26.13 feet
of Lot 3: and the west 10 feet of the east 22 feet of the north 100.33
feet of Lot 4, except that the easement on Lot 4 shall be only the west 5
feet of the east 22 feet for the area south of Vault 2.
With full right and authority to the BWL, its successors. licensees. lessees or assigns. and its
and their agents and employees, to enter at all times upon said premises for the purpose of constructing,
repairing, -emoving, replacing, patrolling, improving, enlarging and maintaining such cables, and
conduits with all necessary manholes, transformers, pedestals. cable and switching devices, cables or
other conductors for the transmission and distribution of electrical energy and/or communication, and to
trim, remove or otherwise control any trees and brush which may. in the opinion of the BWL, interfere
or threaten m interfere with or be hazardous to the construction, operation and maintenance of said
lines. It is expressly understood that no buildings or other structures will be placed upon the above-
described easement without the written consent of BWL. It is expressly understood that non-use or a
limited use of this easement by the BWL shall not prevent the BWL from later making use of the
easement to the full extent herein authorized.
Notwithstanding anything above to the contrary, the parties agree as follows:
1. This easement is for below ground and surface structures only with no above surface
structures. Summit shall have all air rights above the easement. except that Summit shall not create any
improvements which would result in BWL having less than thirteen feet (13') clearance from the
ground surface for access to the easement.
Exhibit B
ATTACH`fENT I I-b. 2
BWL agrees to use its best-efforts to keep underground structures in the easement as far
to the west as reasonably possible. BWL also agrees to separate vaults 1 and within the easement
area as reasonably requested by Summit prior to the construction of those vaults.
3_ BWL and Summit agree that this easement is a nonexclusive easement and is only for
the purposes set forth above. and that it creates no rights for underground or surface use for any third
parties.
4. As additional consideration for this easement. BWL is entering into an Abandonment of
Easement Agreement with Summit, dated the same date as this Easement Agreement. and further agrees
to perform all acts under that Abandonment Agreement and to install all new electrical systems in this
easement at no cost to Summit.
Witness the hand and seal of the party of the first part, this day of May. 1999.
Signed. Sealed and Delivered in SL7vMT PARTNERS.
Presence of: a Michigan general partnership
Connie L. Heintz gy;
Van W. Martin, Partner
Judie D. Boroski
STATE OF MICHIGAN
COUNTY OF INGHAM ss
On this day of May. 1999. personally appeared before me, the undersigned. a Notary Public.
Van W. Martin, to me personally known who, being by me severally duly sworn, did say that he is
Partner of Summit Partners. a general partnership organized and existing under the laws of the State of
Michigan; that said instrument n•as signed and sealed in behalf of said partnership by authority of its
partners, and acknowledged said instrument to be the free act and deed of said partnership.
t,"
Notary Public, Ingham County, MI
My commission expires: F �_ 7, ��' J
BEYERLYL Vt}1ET
Rotary Public
Shiawassee County,W
My Commusion Expires July 27,2M3
Exhibit B
ATTACHMENT II—b.3
BOARD OF WATER ANTI) LIGHT,
a Municipal corporation
Bv:
Its:
STATE OF MICHIGAN )
ss
COUNTY OF INGHAM )
On this day of May. 1999. personally appeared before me, the undersigned. a Notary Public.
to me personally known who. being by me
severaily dulv sworn, did sav that sihe is of the Board of Water and
Light. a Municipal corporation organized and existing under the laws of the State of Michigan: that said
instrument was signed and sealed in behalf of said corporation by authoriry of its officers, and
acknowiedged said instrument to be the free act and deed of said corporation.
Notary Public, Ingham County, MI
My commission expires:
Drafted by and when Recorded
Return to:
Stephen L. Burlingame
Fraser Trebilcock Davis & Foster. P.C.
1000 Nlichigan National Tower
Lansins. MI 48933
(517) 377-0894
a BW� To G►�E UP IH►5 Parr OF DER EAsEMEnrr OK To ELccTE,c Svs-rtm I'NTe9�►�
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m NORTHWEST CORNER LOT 9
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120 W. Michigan Ave.
Q Lansing, MI
PROPOSED BOARD OF WATER -BUILDING � BUILDING
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5
5
MRY-28-1599 11:53 OF WATER LIGHT 1 517 371 6B55 P.01i25
77
WATEMGHT
P. O. Box 13007
Lansing, MI 48901-3007
Fax Cover Sheet
DATE: May 28, 1999 TIME: 11:39 AM
TO: Marilynn Slade, City Clerk FAX: 377-0068
FROM: Mary Sova PHONE: (517) 371-6033
FAX: (517) 371-6855
RE Board Minutes
Number of pages including cover sheet: 25
Attached for filing is a copy of the minutes of the regular Board of Water and
Light Commissioners' meeting held May 25, 1999. An original set of the minutes
will be mailed today for the official record.
Please let me know if you have any problems receiving this transmission.
Thank you.
MAY-26-1999 11:53 IJRTER LIGHT 1 517 371 6655 P.02/25
Page 34
MINUTES OF THE BA OF
WATER ANDrLIGHT STING
LANSING B
Tuesday,May 25, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive,Lansing,Michigan. The meeting was called to
order by the Chair, Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen, Charles M.
Creamer,David O'Leary,Diane Royal and Judson Werbelow.
Absent: Commissioners Ernest J. Christian and Mark Murray.
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Werbelow, seconded by Commissioner O'Leary, to
approve the minutes of regular session held April 27, 1999.
Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS
O THE PUBLIC
ON ANY OTHER
LCOME
TO SPEAK TO THE BOARD ON ANY
SUBJECT NOW, OR AT THE END OF THE MEETING.
No persons spoke.
COMMUNICATION$
No Communications.
...... P Gil
MRY-28-1999 11:5? OF WRTER LIGHT 517 371 BB55 P.o-_-
Board Minutes Page 35
May 25, 1999
REPORTS OF COMMITTEES
(Background materials on items presented are on file in the Office of the Corporate
Secretary)
#99-5-1
COMMITTEE OF THE'WHOLE REPORT
The Committee of the Whole met on May 11, 1999, at 5:30 p.m.,to discuss pending
matters.
Commissioners present: Rosemarie E. Aquilina, Ronald C. Callen, Charles M. Creamer,
David O'Leary, Mark Murray,Diane R. Royal, and Judson M. Werbelow. Absent:
Commissioner Ernest J. Christian.
General Motors' Central Utilities Complex. General Manager Pandy reviewed the
significant aspects of BWL proposed data presented to prospective suppliers that are
bidding on General Motors' Request for Proposal (RPF) for a Central Utilities Complex
due on May 20, 1999. BWL principles of agreement and assumptions distributed to
Suppliers that are bidding Alternate I of the RFP were outlined. Details of the proposal
were included with the Committee of the Whole Agenda materials. Following
discussion,the Commissioners concurred with the proposal and information presented in
response to the RFP Alternate No. 1. A draft resolution on the Central Utilities Complex
and Chilled Water System has been forwarded to the Lansing City Council for their
concurrence.
District Cooling System. General Manager Pandy distributed a revised financial model
for the proposed District Cooling System (DCS)that shows a positive cash flow and
internal rate of return by 2008. Background information on the DCS was included with
the Committee of the Whole Agenda materials. Mr. Pandy noted that negotiations with
the State of Michigan are continuing to overcome calculation differences on how capital
costs are reported.
Fiscal Year 2000 Budget, Chief Financial Officer Dana Tousley provided an overview
of the three components that comprise the proposed Fiscal 2000 budget: (1) Sales and
Revenue for Water, Electric and Steam, (2) Operations and Maintenance (O&M)
Expense,and(3) Capital Projects. Projected income statements and cash flows for the
BWL for Fiscal 2000 were compared to the Fiscal 1999 budget. The proposed
consolidated O&M expense is 1.9 percent lower than the twelve months ending March
31, 1999. This is due primarily to an expected decrease in fuel costs due to burning more
Western coal. Proposed capital expenditures during Fiscal 2000 are$55.544 million
versus $41.222 million in Fiscal 1999. This is a 34.7 percent increase due to several large
MRY-2B-1999 11:53 OF WRTER LIGHT 1 517 371 6655 P.04i25
Page 36 Board Minutes
May 25, 1999
projects. The capital budget will be reviewed in more detail at a later date. Following
discussion, the Commissioners concurred with the proposed budget. This item will be
included in the General Manager's Recommendations for consideration at the regular
meeting of May 25, 1999 (see Resolution#99-5-3, included in these minutes).
(Commissioner Murray left the meeting at 6:35 p.m)
There being no further business, the meeting adjourned at 6:50 p.m.
Submitted by:
Rosemarie Aquilina, Chair Pro Tern
COMMITTEE OF THE WHOLE
Motion by Commissioner Creamer, seconded by Commissioner Callen, to accept the
report as presented.
Action: Carried unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate
Secretary.
POLICY ON REVENUE BOND ISSUES (TABLED)
RESOLVED, That any single Revenue Bond Issue in excess of$100 million dollars will
be authorized and issued by the Board only when the City Council has, by resolution,
concurred with the issuance of said Bonds; excluding, however, electric generating
capacity additions;
RESOLVED FURTHER, That the Board will advise the City Council of the needs for,
and the details of, all Bond Issues.
RESOLVED FURTHER, That this policy rescinds Sec. 9-13 of the BWL Policy and
Procedures, adopted by the Board on 1-9-70, and is replaced with this revised version.
Discussion. General Manager Pandy noted that the revenue bond policy adopted by the
Board in 1970 provided that concurrence by the City Council would required to authorize
any single revenue bond issue in excess of$50 million for projects other than generating
capacity additions. The resolution being proposed would raise the limit from$50 million
to $100 million.
Commissioner Werbelow provided additional history on the origin of the present policy.
He stated that under a prior state statute the City Council authorized the issuance of
MRY-26-1993 11:54 OF WRTER LIGHT 1 517 371 6B55 P.05i25
Board Minutes Page 37
May 25, 1999
bonds. The Revenue Bond Act was changed and now provides that a municipal utility,
governed by an independent board, is pern fitted to issue bonds on behalf of the City
without the approval of the City Council. In the spirit of maintaining good relations with
the City Council, the Board adopted the 1970 policy.
Following discussion, there was consensus among the Commissioners to postpone action
on the proposed resolution at this time. Once General Motors makes a decision on the
central utilities complex, which could involve BWL financing in excess of$50 million, it
would be appropriate for the Board to discuss the existing policy with City Council. The
reaction of the City Council would then be solicited concerning a decision to either
rescind the existing policy or amend the policy to raise the limit from $50 million to $100
million.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to TABLE
the resolution.
Action: By unanimous consent, the resolution was tabled.
#99-5-2
PURCHASE OF BUSINESS TRAVEL ACCIDENT INSURANCE
RESOLVED, That the Board of Water and Light purchase business travel accident
insurance from the Life Insurance Company of North America, represented by the David
Chapman Agency,Inc., for the three (3) year period from June 10, 1999 to June 10, 2002
at a three year prepaid premium of$2,599.02.
Motion by Commissioner Creamer, seconded by Commissioner Callen, to adopt the
resolution.
Action: Carried unanimously.
#99-5-3
FISCAL YEAR 2000 BUDGET
RESOLVED, That the annual budget covering Fiscal 1999-2000 be approved as
presented(see Attachment I).
RESOLVED FURTHER, That capital projects are authorized in the amount of the project
estimate. Capital expenditures for Fiscal 1999-2000 are limited to the amount included in
the budget.
The annual operation and maintenance budget estimate of expenses is $161.8 million. In
addition, the revised capital expenditures forecast is $81.4 million of which$49.3 million
will be financed by a new bond issue to include a proposed Chilled Water System.
MRY-26-1999 11:54 OF WRTER LIGHT 1 517 371 BB55 P.06/25
Board Minutcs
Page 38 May 251, 1999
Motion by Commissioner Aquilina, seconded by Commissioner O'Leary, to adopt the
resolution.
At the request of Commissioner Werbelow, Chief Financial Officer Dana Tousley
reviewed the bonded capital project budget for Fiscal Year (FY) 1999-2000. The capital
budget has three categories: annual,planned and bonded projects. Mr. Tousley noted that
in his budget presentation to the Committee of the Whole on May 11, 1999, he informed
the Commissioners that the proposed Chilled Water System and the proposed General
Motors Central Utilities Complex were not included in the list of bonded projects. Since
that meeting, however, a Chilled Water System has been added to the bonded capital
project budget for FY 1999-2000. The Central Utilities Complex is still on hold pending
a decision from General Motors; therefore, this project is not included in the bonded
project list. A supplement will be sent to the Board that details the ten-year planned
capital projects forecast. A revised budget incorporating the proposed Chilled Water
System will also be.furnished.
General Manager Pandy reported that on May 24, 1999, the Lansing City Council
concurred that the BWL may construct, own, and operate a Chilled Water System and a
Central Utilities Complex as well as the ancillary utility services for industry. He briefed
the Board on negotiations in progress with the State of Michigan for the BWL to provide
chilled water services to downtown buildings. A decision is contemplated shortly.
Copies of two scenarios were handed out comparing financial data for a 12,000-ton
system, which includes the State of Michigan at'a cost of$23.9 million versus a 6,000-
ton system without the State of Michigan at a cost of $12.1 million. In response to
questions raised by the Commissioners relative to contingencies for cost overruns, Mr.
Pandy stated that a 10 percent contingency is included in the project cost estimate.
Action: Carried unanimously.
499-5-4 (Late Agenda Item)
RESOLUTION DECLARING OFFICIAL INTENT TO REIMBURSE PROJECT
EXPENDITURES WITH BOND PROCEEDS AND AUTHORIZING
PUBLICATION OF NOTICE OF INTENT TO ISSUE BONDS
WHEREAS, the Board of Water and Light (the "Issuer")proposes to issue its tax-exempt
bonds (the "Bonds")to finance the cost of renovating and improving the water, steam and
electric utilities system of the City of Lansing as hereinafter described (the "Project");
and
WHEREAS, it is anticipated that the issuer will advance all or a portion of the costs of
the Project prior to the issuance of the Bonds, such advance to be repaid from proceeds of
the Bonds upon issuance thereof; and
MRY-26-1999 11:54 OF WRTER LIGHT 1 517 371 6855 P.07i25
Board Minutes Page 39
May 25, 1999
WHEREAS, Section 1.150-2 of the Treasury Regulations on Income Tax (the
"Reimbursement Regulations") specifies conditions under which a reimbursement
allocation may be treated as an expenditure of bond proceeds, and the Issuer intends by
this resolution to qualify amounts advanced by the Issuer to the Project for
reimbursement from proceeds of the Bonds in accordance with the requirements of the
Reimbursement Regulations.
NOW, THEREFORE, BE IT RESOLVED BY THE ISSUER, as follows:
1. The Project shall consist of improvement, renovation and extension of certain
portions of the water, steam and electric utilities system of the City of Lansing,
including some or all of the following: (i) capacity improvement and expansion of
the filter press system at Dye Water Conditioning Plant, (ii) construction of electric
transmission and distribution substations, (iii)the improvement and extension of a
water distribution system in Dewitt, (iv) construction of a water pumping station, and
(v) construction of a chiller plant and related distribution system to serve a downtown
chilled water district.
2. The maximum principal amount of obligations expected to be issued for the project is
$50,000,000.
3. The Issuer hereby declares its official intent to issue Bonds to finance the costs of the
Project,and hereby declares that it reasonably expects to reimburse the Issuer's
advances to the Project as anticipated by this resolution.
4. The Bonds shall be authorized by proper proceedings subsequent to this resolution.
5. Staff is authorized and directed to publish in a local newspaper of general circulation
a notice of intention to issue bonds substantially in the form attached, with such
changes as are approved by bond counsel, BWL counsel and staff.
6. All prior resolutions and parts of resolutions insofar as they may be in conflict with
this resolution are hereby rescinded
Motion by Commissioner Werbelow, seconded by Commissioner Creamer, to adopt the
resolution.
Discussion. Commissioner Werbelow asked if the resolution under consideration by the
Board had any changes from the preliminary copy that was faxed to the Board. General
Manager Pandy reported that the faxed copy listed $40 million as the maximum principal
amount of obligations expected to be issued for the project. That amount has been
revised to $50 million. Chief Financial Officer Dana Tousley noted some minor changes
were made after the preliminary copy was reviewed by staff and bond counsel.
MRY-28-1999 11:55 OF WRTER LIGHT 1 517 371 6855 P.08i25
Page 40 Board Minutcs
May 25, 1999
Action: Carried unanimously.
#99-5-5
AGREEMENT FOR ENGINEERING AND CONSULTING SERVICES
RESOLVED,That the BWL enter into a three-year agreement, subject to approval of
Terms and Conditions, with R.W. Beck, Inc.; Black& Veatch Corporation; Blasland,
Bouck & Lee, Inc.; Camp Dresser&McKee; Clayton Group Services; Commonwealth
Associates Inc.; Fishbeck,Thompson, Carr& Huber, Inc.; Jones &Henry Engineers,
Ltd.; Novak Engineering, Inc.; SFT, Inc.; Sargent &Lundy, LLC; Snell Environmental
Group, Inc.; Soil& Materials Engineers,Inc.; and Stanley Consultants, Inc. to supply
engineering and consulting services. The estimated cost of services to be provided is
$200,000 per year.
Other bidders were Barr Engineering Co.; CDA Engineering; Capital Consultants; Hobbs
& Black Associates, Inc.; Lutz, Daily & Brain; McNamee, Porter& Seeley, Inc.; Power
System Engineering, Inc.; Professional Service Industries, Inc.; Resource Management
International, Inc.; STS Consultants LTD; Superior Engineering Corp.; URS Greiner
Woodward& Clyde; and Wilcox Associates.
Burns & McDonnell; Burns &Roe; Clark, Trombley, Randers Consulting Engineers;
Keystone Design Group; Mayotte, Jacob; Parsons Engineering Science, Inc.; RMT, Inc.
Michigan; and Stone & Webster Engineering Corp. declined to submit bids.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
#99-5-6
AMENDMENT NO. 3 TO RAIL TRANSPORTATION CONTRACT
RESOLVED, That the Board approve Amendment No. 3 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 following origins shall be added: Kanawha District, Conway, PA
2. The base rates shall be as follows:
MRY-2B-1999 11:55 OF WRTER LIGHT 1 517 371 6B55 P.09i25
Board Minutes Page 41
May 25, 1999
a) From Origins in Kenova/Thacker I Districts
Single Cars 7,000 Net Ton 8,000 Net Ton
$15.99 Trainloads -NS Cars Trainloads - Private Cars
$15.54* $14.04
*Rate of$14.97 will apply from Colmont, WV (Mine No.0846)
b) From Origins in Thacker lI District
Single Cars 7,000 Net Ton 8,000 Net Ton
$16.57 Trainloads -NS Cars Trainloads - Private Cars
$16.05 $14.55
c) From the following Origins: Kanawha District, Conway, PA
7,000 Net Ton
Trainloads -NS Cars
$14.97 NT
3. This Amendment No. 3 will take effect on the later of June 1, 1999 or the closing
date of the Consolidated Railroad (Conrail) break-up between Norfolk Southern Railroad
and CSX Transportation.
Motion by Commissioner Werbelow, seconded by Commissioner O'Leary, to adopt the
resolution.
Action: Carried unanimously.
499-5-7 (Late Agenda Item)
RESOLUTION TO DISPOSE OF INTEREST IN REAL PROPERTY
(EASEMENT) LOCATED IN BLOCK III ON MICHIGAN AVENUE AT
WASHINGTON SQUARE
WHEREAS, Summit Partners, a Michigan general partnership,has requested the Board
of Water and Light to abandon overhead rights received from Consumers Power under a
letter dated May 16, 1991 which granted the Board of Water and Light right to use the
East 32 ft. of the North 110 ft. of Lot 4 and Lot 3 in Block 111, City of Lansing, Ingham
County, Michigan; and
WHEREAS, Summit Partners has agreed to grant the Board of Water and Light a
replacement easement to lay and maintain cables and other appurtenances on the West 10
ft. of the South 26.13 ft. of Lot 3; and the West 10 ft. of the North 100.33 ft. of Lot 4,
MRY-2B-1999 11:55 BD OF WATER LIGHT 1 517 371 6B55 P. 10i25
Board Minutcs
Page 42 May 25, 1999
except that the easement on Lot 4 shall be only the West 5 ft. of the East 22 ft. for the
area South of Vault 2; and
WHEREAS,the easement rights granted under the Consumers Power letter dated May
16, 1991 are no longer necessary to the operation of the Board of Water and Light.
IT IS RESOLVED:
That the easement granted under the Consumers Power letter of May 16, 1991, is no
longer necessary to the operation of the Board of Water and Light. Further, that such
easement is declared surplus to the Board of Water and Light and deemed released by this
resolution. A description of the easement and abandonment agreement is attached to this
resolution as Exhibit A. (see Attachment II-a.)
That the abandonment of the easement is conditioned upon the grant of a replacement
easement and subject to approval by the Lansing City Council in accordance with the
Lansing City Charter. The replacement easement is attached to this resolution as Exhibit
B. (see Attachment II-b.)
That staff is directed to execute the abandonment agreement and submit this matter to the
City Clerk for placement on the agenda of the Lansing City Council at the earliest
possible date.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Discussion. General Manager Pandy reported that the BWL easement lies in the area
known as the former Jim's Tiffany Restaurant, now a vacant parking lot. The developer
is trying to clear that area for future development of Block 111. The BWL no longer
requires this easement for utility purposes.
Action: Carried unanimously.
#99-5-8 (Late Agenda Item)
RESOLUTION TO DISPOSE OF INTEREST IN REAL PROPERTY
(EASEMENT) LOCATED IN BLOCK 101 ON MICHIGAN AVENUE, LANSING.
WHEREAS, Land Equities Corporation has requested the Board of Water and Light to
abandon a portion of its easement rights granted it by Jury Rowe as depicted in Exhibit A
(see Attachment III-a) and more specifically described as follows:
An easement for the Board of Water and Light being over a part of the
West 44 feet of Lot 9 and the East 16 feet of Lot 8, Block 101, Original
Plat, City of Lansing, Ingham County, Michigan, according to the
recorded plat thereof, as recorded in Liber 2 of Plats, Page 36, 37 and 38,
MRY-2B-1999 11:55 HD OF WRTER LIGHT 1 517 371 6655 P. 11i25
Board Minutes Page 43
May 25, 1999
Ingham County Records and described as: beginning at the Northwest
comer of said Lot 9; thence East along the North line of said Lot 9 a
distance of 22.0 feet; thence South 6.30 feet;thence West 28.40 feet;
thence North along the West line of the East 16 feet of said Lot 8 a
distance of 10.00 feet; thence East along the North line of said Lot 8 a
distance of 16.00 feet to the point of beginning.
WHEREAS, Land Equities, or its assignee, has agreed to grant the Board of Water and
Light a replacement access easement to lay and maintain cables and other appurtenances
on top of the building as depicted in Exhibit B (see Attachment III-b) and more
specifically described as follows:
An access easement for the Board of Water and Light being over a part of
the West 44 feet of Lot 9, Block 101, Original Plat, City of Lansing,
Ingham County, Michigan, according to the recorded plat thereof, as
recorded in Liber 2 of Plats, Pages 36, 37 and 38, Ingham Count Records
and described as: commencing at the Northwest corner of said Lot 9;
thence South along the West line of said Lot 9 a distance of 10.00 feet;
thence East 12.40 feet to the point of beginning of this description;thence
North 6.30 feet; thence East 21.60 feet; thence South 6.30 feet;thence
West 21.60 feet to the point of beginning.
WHEREAS, the easement rights depicted in paragraph one are no longer necessary to the
operation of the Board of Water and Light;
IT IS RESOLVED:
That the Board declares that the portion of the easement granted as depicted in paragraph
1 is no longer necessary to the operation of the Board of Water and Light. Furthermore,
that such easement is declared surplus to the Board of Water and Light and deemed
released by this resolution.
That the release of the easement is conditioned upon the grant of a replacement access
easement and subject to approval by the Lansing City Council in accordance with the
Lansing City Charter.
That staff is directed to execute a release agreement and submit this matter to the City
Clerk for placement on the agenda of the Lansing City Council at the earliest possible
date.
Motion by Commissioner O'Leary, seconded by Commissioner Aquilina, to adopt the
resolution.
Discussion. General Manager Pandy reported that Land Equities is building a new
building on the former Jury Rowe property adjacent to City Hall on Michigan Avenue.
MRY-2B-1999 11:56 BD OF WRTER LIGHT 1 517 371 6855 P. 12i25
Page 44 Board Minutcs
May 25, 1999
In exchange for the BWL abandoning the easement, they are granting a replacement
easement on top of the new building.
Action: Carried unanimously.
UNFINISHED BUSINESS
Post Retirement Health Insurance Liability. Commissioner Werbelow requested that a
schedule with benchmarks be maintained for the establishment of a retiree trust to fund
the post retirement health insurance liability. He noted that a regular progress report to
the Board showing the milestones of the project, expectations, and completion schedule
would be helpful to follow the progress of the project.
Kellie Willson, Director of Metrics and Audits, reported that a meeting is scheduled this
week with the external legal and benefits advisor to layout a timetable for the project.
She noted that if it is unnecessary to update the numbers,then she would prefer to
proceed with the current data. Commissioner Werbelow suggested submitting two
timetables to the Board—one showing updated numbers and another without updated
numbers. Staffs recommendation on the best approach was requested.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
District Cooling System. General Manager Pandy discussed time line issues related to a
Chilled Water System. He reported that the BWL is under intense pressure to commit
this week to a Chilled Water System from developers who are interested in receiving
chilled water service from the BWL for their downtown projects. The developers are
trying to develop these projects to meet a year 2001 completion date. Their engineering
design cannot proceed until it is known if the new developments will be connected to a
BWL Chilled Water System; otherwise, the design will be based on their own chilled
water system. Mr. Pandy noted that the BWL faces the dilemma of not knowing when
the State of Michigan will indicate if they want to connect to a BWL chilled water
system. He stated that if the State is not at a decision point this week or chooses not to
MRY-2B-1999 11:56 BD OF WRTER LIGHT 1 517 371 6B55 P. 13i25
Board Minutes Page 45
May 25, 1999
connect, a decision needs to be made whether to proceed with the 6000-ton system to
serve the county consolidated courts facility and the Civic Center redevelopment project.
The developers have provided the BWL with a letter of intent to go with a BWL chilled
water system.
A lengthy question and answer period followed relative to (a) risks associated with a new
venture of this magnitude, (b) site considerations for the proposed new facility, including
aesthetics, noise, vibration, odor, and discharges into the air, and (c) the rates to be paid
by chilled water customers. The Commissioners stressed on the importance of
incorporating flexibility in the rate based on BWL costs. Mr. Pandy stated that the
developers understand they will be required to sign long-term utility contracts prior to the
BWL proceeding with the construction of a chilled water system, and that rates would be
based on cost of service. Mr. Pandy indicated that he believes there is a good business
case for this project as demonstrated in the forecast and that it is an important strategic
move for the steam utility. He also noted that there is a mechanism for the BWL to back
out of the project if the contracts are not executed.
Following discussion, the Commissioners concurred that they would be willing to
proceed with a 6000-ton chilled water system subject to securing 15-year contracts with
the developers that would enable the BWL to recover all its current and future costs and
some margin. Staff will submit a formal resolution for consideration after the contracts
have been entered into with the owners of the projects.
Report on May 17`h Storm Outage. General Manager Pandy reported on the severe
storm that swept through the Lansing area late Monday afternoon on May 17' He
displayed a sample taken from the transmission lines that fell on the I-496 expressway
and a piece of one of the poles that broke. Service to over 20,000 customers was restored
within three days. Mr. Pandy noted that the Twenty-First Century phone system recently
approved by the Board is scheduled to be on line on July 1, 1999. Crews from Traverse
City, Zeeland, Coldwater and Grand Haven were called in to assist with restoration
efforts. A transmission line contractor from Reed City was also brought in to rebuild the
transmission lines. In addition service crews from several electrical contractors were
engaged to assist customers with service restoration needs. Staff is in the process of
debriefing storm restoration efforts for process improvement. The estimated financial
impact from the storm is anticipated to total $1 million. Mr. Pandy congratulated the
employees for their tireless efforts in restoring power that in many cases involved
dangerous conditions. It was noted in answer to questions by Commissioners, that
emergency crews are required to rest 5 to 10 hours after every 16 to 20 hours of
continuous work.
Twenty-Five Year Dinner a Successful Event. General Manager Pandy reported that
31 employees were inducted into the B WL's Twenty-Five Year Club.
MRY-28-1999 11:56 HD OF WRTER LIGHT 1 517 371 6855 P. 14i25
Page 46 Board Minutes
May 25, 1999
Benchmark Data on Financial and Operating Ratios Reviewed. General Manager
Pandy reviewed comparisons of BWL to investor owned utilities and other public power
systems, based on data from the American Public Power Association.
REMARKS BY COMMISSIONERS
There were no remarks.
EXCUSED ABSENCES
There being no objection, the absences of Commissioners Christian and Murray were
excused.
Adopted unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
ADJOURNMENT
On motion by Commissioner Creamer, seconded by Commissioner Callen, the meeting
adjourned at 6:55 p.m.
Is/Mary E. Sova, Secretary
,Me& May 28, 1999
Marilynn Slade, City Clerk
MAY-28-1999 11:56 BD OF WRTER LIGHT 1 517 371 6855 P. 15i25
BOARD OF WATER AND LIG►__-LANSING MICHIGAN
BUDGET FISCAL YEAR ENDING JUNE 30, 2000 'Revised 5128199 for chilled water district
WATER ELECTRIC STEAM TOTAL
PROJECTED INCOME STATEMENT$(000) FY 2000
OPERATING REVENUE 17,383 157,627 14,365 189,375
Operation/Maint Expense 11,047 127,890 11,694 150,631
Depreciation Expense 20,100
TOTAL OPERATING EXPENSE 170,731
OPERATING INCOME 18,644
Other Income 8,218
Other Expense 5,256
NET INCOME 21,606
NET INCOME AFTER CITY PAYMENT 15,058
RETURN ON NET ASSETS 4.30%
PROJECTED CASH FLOW $(000) FY 2000
Restricted Operating Cash 23,541
Restricted General Cash 13,839
Special Project/Const Cash 5.000
BEGINNING CASH 7-1-99 42,380
Sources of Cash
Net Income 48,328
21,606
Bond Proceeds 20.1
Depreciation 20
TOTAL SOURCES OF CASH 90.034
SOURCES OF CASH + BEG. CASH 132,414
Uses of Cash
Debt Principal , 08
Capital Expenditures 67,403
Payment to City ¢,548
TOTAL USES OF CASH 75,459
Restricted Operating Cash 18,829
Restricted General Cash 13,000
Special Project/Const Cash 25,126
ENDING CASH 6-30-2000 56 955
MAY-26-1999 11:57 ED OF WRTER LIGHT 1 517 371 6855 P. 16i25
ATTACHMENT II-a.1)
ABANDONMENT OF EASEMENT AGREEMENT
The City of Lansing, by its BOARD OF WATER AND LIGHT, a municipal
corporation, P. O. Box 13007, Lansing, Michigan 48901 ("BWL"), for the consideration set
forth below hereby abandons to SUNEM TT PARTNERS, a Michigan general partnership, of
_ 1111 Michigan Avenue, Suite 201, East Lansing, Michigan 48823 ("Summit") the following
described easement on the following terms and conditions.
1. Abandoned Easement Description. The easement on the attached Exhibit A is
abandoned by the BWL.
Additionally, the BWL is abandoning overhead, rights under a Consumers Power
letter dated May 16, 1961 to the BWL to use the East 32' of the North 110' of Lot 4 and Lot 3
in Block 111, City of Lansing, Ingham County, Michigan.
2. Consideration. This Abandonment of Easement is given in consideration of the
Easement Agreement from Summit to BWL dated the same date as this Abandonment.
3. Removal of Structures. The BWL agrees to remove at its expenses all
underground and above ground structures located in the abandoned area (including switch gear,
transformers, underground cables, overhead poles, overhead cables, etc.). Additionally, the
BWL agrees to fill and compact all abandoned manholes after removal of equipment is
completed at BWL expense. Notwithstanding the above, BWL with Summit's approval may
leave the cable cavity from the western terminus of the abandonment eastward to existing
manhole D5 in order to preserve the possibility of utilizing that cavity to service a new
building to be constructed by Summit or its successors, but only so long as that cable cavity
presents no safety issues and the area has been filled and compacted over that cavity.
4. Effective Date. The parties are executing this Abandonment on the same date as
the Easement Agreement_ However, this Abandonment shall be effective only after the new
structures are built as provided in the Easement Agreement and existing BWL Customers are
energized off the new system (in which event, the BWL will use its best efforts to accomplish
at the earliest possible time), at which time this Abandonment shall be recorded with the
Ingham County Register of Deeds.
MAY-26-1999 11:57 HD OF WRTER LIGHT 1 517 371 6655 P. 17i25
Attachment 11—a.2
5. Cooperative Efforts. Both parties agree to cooperate with each other and third
parties to effectuate the intent of this Abandonment and the intent of the Easement Agreement.
fi WITNESS WHEREOF, the parties have executed this Abandonment of Easement on
the � day of May, 1999.
WITNESSES: SUIVEVIIT PARTNERS,
a Michigan ership
By: w
Connie L_ Heintz J Van W. Martin, Partner
�C 4TI
Jrh D_ Boroski
STATE OF MICHIGAN )
) SS.
COUNTY OF INGHAM
The foregoing instrument was acknowledged before me this 1Li day of May, 1999 by
Van W. Martin, Partner, on behalf of Summit Parmers, a Michigan partnership.
Notary Public, Ingham County, I
My Commission Expires:
BEVERLY1.vw
NotaryPublic
sh"asses Coueh,MI
Mr Commission tapir"1uy 27,2003
MRY-28-1999 11:57 HD OF WRTER LIGHT 1 517 371 6855 P. 18i25
ATTACHMENT II-a.3
WITNFSSES: BOARD OF WATER AND LIGHT,
a Municipal corporation
By:
Its:
STATE OF MICHIGAN )
) SS.
COUNTY OF INGHAM )
The foregoing instrument was acknowledged before me this day of May, 1999 by
, the
on behalf of the Board of Water and Light, a Municipal corporation.
Notary Public, Ingham County, MI
My Commission Expires:
Drafted by and When Recorded Return to:
Stephen L. Burlingame (P27136)
Fraser Trebilcock Davis & Foster, P.C.
1000 Michigan National Tower
Lansing, MI 48933
(517) 482-5800
MRY-28-1999 11:57 ED OF WRTER LIGHT 1 517 371 6855 P. 19i25
ATTACHMENT II-a.4
Exhibit A
ABANDONED EASEMENT DESCRIPTION
The exact legal description is to be determined by Summit's surveyor but it runs from
Grand Avenue west through Lots 1, 2 and 3 west of manhole D5 to the point where the new
electrical duct will run south of new manhole #3.
The BWL believes that this legal description will be:
The north 10 feet of the south 36.16 feet of Lots 1, 2 and 3 of
Block 111, City of Lansing, Ingham County, Michigan, except
for the west 10 feet of the north 10 feet of the south 36.13 feet of
Lot 3 of the above-described property.
The parties agree that the abandoned easement will be as displayed in the shaded area
of Exhibit A-1 attached.
Once Summit's surveyor prepares the exact description, the parties agree to substitute
that description for this Exhibit A and Exhibit A-1.
MAY-28-1999 11:57 HD OF WRTER LIGHT 1 517 371 6655 P.20i25
ATTACHnNT II-a.5
"EXHIBIT A- 1 "
MICHIGAN AVE
w 5 4 3 2 1
Q
10' EASEMENT AREA
Q
O
O
Z
(n Q
6 7 8 9 10 0
ALLEGAN
LEGEND
® NEW EASEMENT AREA
® EXISTING EASEMENT AREA
ABANDONMENT AREA
NORTH
BOARD OF WATER & LIGHT EASEMENT DRAWING
CPANTOR Cq Richard Ellii Mortin
LOCATION: LOTS 3 do d. BLOCK 111, CITY OF LANSING
PAGE OR PAGES DRAWN BY: C.QQrmen CHEC)CM APPROVED
DAM 3115Z99 EASEMENT NO. 3301-16-4050 I
MRY-2B-1999 11:57 BD OF WRTER LIGHT 1 517 371 6655 P.21i25
EXnlDlt n
ATTACHMENT II—b.1
EASEMENT AGREEMENT
SUNBM PARTNERS. a Michigan general partnership, 1111 Michigan Avenue, Suite 201,
East Lansing, Michigan 48823 ("Summit"), in consideration of One and no/100 Dollars ($1.00)
(together with the additional terms and provisions set forth in this Easement Agreement) paid and
performed by the City of Lansing, by its BOARD OF WATER AND LIGHT, a municipal
- corporation. P. 0. Box 13007, Lansing, Michigan 48901 ("BWL"), receipt of which is hereby
acknowledged, conveys and warrants to the BWL, its successors and assigns, forever the easement and
right to erect, lay and maintain cables, conduits, and other fixtures and appurtenances for the purpose
of transmitting and distributing electricity and/or conducting a communication business on. over, under
and across the following described parcels of land, including all public highways upon or adjacent to
said parcel of land, which parcels situated in the City of Lansing, County of Ingham, and State of
Michigan, to-wit:
PROPERTY DESCRIPTION: Lots 3 and 4, Block I11. City of
Lansing, Ingham County Michigan.
EASEMENT DESCRIPTION: The west 10 feet of the south 26.13 feet
of Lot 3; and the west 10 feet of the east 22 feet of the north 100.33
feet of Lot 4, except that the easement on Lot 4 shall be only the west 5
feet of the east 22 feet for the area south of Vault 2.
With full right and authority to the BWL, its successors, licensees. lessees or assigns, and its
and their agents and employees, to enter at all times upon said premises for the purpose of constructing,
repairing, removing, replacing, patrolling, improving, enlarging and maintaining such cables, and
conduits with all necessary manholes, transformers, pedestals, cable and switching devices, cables or
other conductors for the transmission and distribution of electrical energy and/or communication, and to
trim, remove or otherwise control any trees and brush which may, in the opinion of the BWL, interfere
or threaten to interfere with or be hazardous to the construction, operation and maintenance of said
lines. It is expressly understood that no buildings or other structures will be placed upon the above-
described easement without the written consent of BWL. It.is expressly understood that non-use or a
limited use of this easement by the BWL shall not prevent the BWL from later making use of the
easement to the full extent herein authorized.
Notwithstanding anything above to the contrary, the parties agree as follows:
1. This easement is for below ground and surface structures only with no above surface
structures. Summit shall have all air rights above the easement, except that Summit shall not create any
improvements which would result in BWL having less than thirteen feet (13') clearance from the
ground surface for access to the easement.
MRY-2B-1999 11:56 BD OF WRTER LIGHT 1 517 371 6655 P.22i25
Exhibit B
ATTACHMENT II—b.2
2. BWL agrees to use its best-efforts to keep underground structures in the easement as far
to the west as reasonably possible. BWL also agrees to separate vaults 1 and 2 within the easement
area as reasonably requested by Summit prior to the construction of those vaults.
3. BWL and Summit agree that this easement is a nonexclusive easement and is only for
the purposes set forth above. and that it creates no rights for underground or surface use for any third
parties.
4. As additional consideration for this easement, BWL is entering into an Abandonment of
Easement Agreement with Summit, dated the same date as this Easement Agreement, and further agrees
to perform all acts under that Abandonment Agreement and to install all new electrical systems in this
easement at no cost to Summit.
t�
Witness the hand and seal of the parry of the first pan, this day of May, 1999.
Signed, Sealed and Delivered in SUMIVIIT PARTNERS,
Presence of: a Michigan general partnership
r
Connie L. Heintz Van W. Martin, Partner
Judith D. Boroski
STATE OF MICHIGAN )
ss
COUNTY OF INGHAM )
On this Z,. day of May. 1999, personally appeared before me, the undersigned, a Notary Public,
Van W. Martin, to me personally known who, being by me severally duly sworn, did say that he is
Partner of Summit Partners, a general partnership organized and existing under the laws of the State of
Michigan; that said instrument was signed and sealed in behalf of said partnership by authority of its
partners, and acknowledged said instrument to be the free act and deed of said partnership.
Notary Public, Inghamcounty, MI 1
My commission expires: 2 7 G0
BEVERLYL VOR
Notary Public
S4iaw3ueecourrty,MI
My Commmion Expires Juy 27.2 3
2
MRY-26-1999 11:56 BD OF WATER LIGHT 1 517 371 6655 P.23/25
Exhibit B
ATTACHMENT II-b.3
BOARD OF WATER AND LIGHT,
a Municipal corporation
By:
Its:
STATE OF MICHIGAN )
ss
COUNTY OF INGHAM )
On this day of May, 1999, personally appeared before me, the undersigned, a Notary Public,
. to me personally known who, being by me
severally duly sworn, did say that s/he is of the Board of Water and
Light, a Municipal corporation organized and existing under the laws of the State of Michigan; that said
instrument was signed and sealed in behalf of said corporation by authority of its officers, and
acknowledged said instrument to be the free act and deed of said corporation.
Notary Public, Ingham County, MI
My commission expires:
Drafted by and when Recorded
Return to:
Stephen L. Burlingame
Fraser Trebilcock Davis& Foster. P.C.
1000 Michigan National Tower
Lansing, MI 48933
(517) 377-0894
3
NUWl. T. GfvE VP -Nss PART OF OVA +EASEMENT OK To Erec-rEic SvsTemT..wjrL,TN C�.•��•Ca't.u�(Y
v
Remuesve.A Ar_,A9s EAseftcmT w tla.!
BWL To Ret-rA N Tom NeT of our- �ASe�e..rj- OK Ts E�E<Te%c Sven WTkAjLjcr Q16-J. annsd /* �/3/94
in
m
L
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NORTHWEST CORNER LOT 9
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J 120 W. Michigon Ave.
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PROPOSED BOARD OF WATER BUILDING A a- BUILDING
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- .._-P3 :7 R 44 GRAVEL
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JJ AND LIGHT EASEIVENT
LIBER 60, PAGE 401
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SCALE 1" =
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Q Lansing, MI
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- - z I P.O.8, LOT
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° I PROPOSED BOARD OF WATER
AND LIGHT ACCESS E
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CD
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SCALE 1" = 10, = Recorded Distance
}
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12:44 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 468401 PAGE: 2110
Page 25
.. .._.e I...
MINUTES OF THE BOARD OF COMMISSIONERS`MEETING'''r! '
LANSING BOARD OF WATER AND LIGHT
03
L`�"��;''fJ CITY CLEir�
Tuesday,April 27, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to
order by the Chair,Diane Royal.
Present: Commissioners Rosemarie E. Aquilina, Ronald C. Callen,Ernest J. Christian, Mark
Murray,David O'Leary,Diane Royal and Judson Werbelow(by teleconference).
Absent: Commissioner Charles M. Creamer.
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary, seconded by Commissioner Christian, to
approve the minutes of regular session held March 23, 1999.
Carried 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
No Communications.
12:45 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 468401 PAGE: 3/10
Page 26 Board Minutes
April 27,1999
REPORTS OF COMMITTEES
(Background materials on items presented are on file in the Office of the Corporate
Secretary)
#99-4-1
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on April 13, 1999, at 5.00 p.m_,to receive a briefing on
pending matters.
Commissioners present: Rosemarie E. Aquilina, Charles M. Creamer,David O'Leary,Mark
Murray,Diane R Royal, and Judson M. Werbelow(by teleconference). Commissioners
absent: Ronald C. Callen and Ernest J. Christian.
Funding Post-Retirement Health Insurance. KeIlie Willson,Director of Metrics and
Measures,presented an overview of the health care liability issue. Extensive background
material on this topic was sent to the Commissioners in advance of the meeting for review.
Following lengthy discussion,the Committee of the Whole concurred with staffs
recommendation to proceed to work with legal and benefits advisors to establish mechanisms
for funding BWL post-retirement benefits. The Committee of the Whole concurred with the
proposed resolution presented,to be brought forth by the General Manager for action at the
regular meeting on April 27, 1999 (see Manager's Recommendations, item VII, A.).
Pension Plan Matters:
Pension Calculation Correction. Chief Financial Officer Dana Tousley briefed the
Commissioners on a pension calculation error affecting pensioners who retired between August
1, 1983 and June 30, 1996 due to the actuarial firm's improperly using separate mortality
tables for men and women. The Commissioners agreed that the BWL has a fiduciary duty to
correct the error. A lawsuit has been initiated against the actuarial firm. An action plan on
how this correction will be implemented and communicated to retirees was handed out. The
Committee of the Whole concurred with the proposed resolution,to be brought forth by the
General Manager for action at the regular meeting on April 27, 1999 (see Manager's
Recommendations, item VII,B_).
Lump Sam Payment of Deferred Pensions. Chief Financial Officer Dana TousIey
reported that when the Board amended the Defined Benefit Pension Plan in 1997,two options
were provided for paying deferred vested pensioners who terminated their employment with
the BWL. There are sixty-five former employees with vested pension benefits starting at age
60 or 65. It is anticipated that up to 75 percent of the vested pensioners will take the lump sum
offer and roll the money over to their current 401 (k)or IRA Plan. The anticipated
implementation date for the buyout plan is targeted for late summer to early fall. The estimated
cost of implementation is $6 million. This item was presented for information only.
12:46 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #68401 PAGE: 4/10
Board Minutes Page 27
April 27, 1999
Waterfront Redevelopment Grant Funds for Ottawa Station. General Manager Pandy
reported that the Michigan Department of Environmental Quality and Michigan Jobs
Commission have up to$50 million of grant funds available for waterfront redevelopment. In
reviewing the application process,it was reported that two application deadlines have been set:
The first round is April 16, 1999,with $20 million allocated,and the second application date is
October 1, 1999, with$30 million allocated. Grant application rules require that if an entity
intends to apply in October, a Notice of Intent to Apply must be submitted by April 16, 1999.
Copies of the Notice of Intent to Apply for Waterfront Redevelopment Grants and a
preliminary conceptual plan of the project were distributed to the Commissioners for review
and feedback. Mr. Pandy summarized the scope of the proposed mixed-use development of
approximately 384,400 square feet in size,to include retail, entertainment, restaurant, and
Class"A"office uses in addition to a future 300 room hotel,totaling 208,600 square feet. He
reported that the BWL has already invested approximately$4.5 million in the decornnussioning
of the Ottawa Station, including engineering, demolition and environmental response activities
to prepare the building for development. This amount would qualify the BWL for a 25 percent
match for grant funds,making the BWL eligible to apply for a grant of up to$13.5 million.
Following discussion,the Commissioners concurred that filing the Notice of Intent to Apply for
Waterfront Redevelopment Grant Funds for the Ottawa Street Power Station is an
administrative matter,thereby staff was directed to proceed with filing the notice. A resolution
to authorize the General Manager to file the full grant application in October will be presented
to the Board for action at a Iater date.
Other Matters:
East Lansing/Meridian Township Water Service Agreement. General Manager
Pandy reported that substantial agreement-in-principle has been reached with East Lansing,
Meridian Township and their joint Authority for a wholesale water supply interconnection on
the east end of the BWL's system,near Jolly and Okemos Roads. Plans call for the installation
of a booster pumping station to tie in with the East Lansing/Mendian Township Water
Authority to provide up to five million gallons of water per day. The interconnection also ties
in with the Jackson National Life development.
Michigan State University (MSU) Tie. Staff has met with MSU officials to discuss
proposals for electric and water services. Summaries of the proposals were handed out.
(CommissionerMarkMurray arrived at 5:50 p.m.)
Development of Chilled Water District. General Manager Pandy provided an
update on the proposed chilled water district to serve downtown buildings and the
contemplated General Motors assembly plant. A map was displayed showing the orientation of
buildings targeted for the proposed chilled water service,the land needed for the chiller
building and associated equipment. Staff will provide more information prior to the April
Board meeting detailing the proposed plan, feasibility analysis, financial forecast,and
anticipated loads.
(Commissioner Charles Creamer left the meeting at 6:00 p.m)
12:46 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #68401 PAGE: 5/10
Page 28 Board Minutes
April 27,I999
Site Work Improvements for Proposed General Motors (GM) Plant. General
Manager Pandy reported on site work design and cost involving the BWL for a water line to
serve the proposed GM plant in Lansing, south of the I-496 freeway. This work is included as
part of the City of Lansing's GM project package of documents on which a request for
proposals is being made. Construction on infrastructure improvements is expected to start this
summer.
There being no further business,the meeting adjourned at 6:10 p-m.
Submitted by:
Rosemane AquiIina, Chair Pro Tern
COMMITTEE OF THE WHOLE
The Committee of the Whole Report was received and accepted as presented
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on items presented are on file in the Office of the Corporate Secretary.
#99-4-2
A. FUNDING POST-RETIREMENT HEALTH INSURANCE
RESOLVED,That staff be directed to proceed to work with legal and benefits advisors to
establish mechanisms for funding BWL post-retirement benefits. The preferred approach is a
combination of a VEBA trust and Section 420 transfers of the defined benefit pension plan
surplus to a 401(h)subaccount of the defined benefit plan. Proposed implementation details
wiII be submitted to the Commissioners for their review and authorization.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
#99-4-3
B. PENSION CALCULATION CORRECTIONS
RESOLVED,That defined benefit plan retirees who retired on or between August 1, 1983 and
June 30, 1996 and elected an optional joint and survivor benefit, shall have their benefit
amounts recalculated using a 90/10 unisex mortality table. If the recalculation results in an
increase, retirees will be paid the difference plus accrued interest of x.x%. If the recalculation
results in a decrease,retirees will continue to receive their current pension amount. There are
approximately 295 retirees and surviving spouses in the affected group. The cost to the
pension fund is approximately$660,000 plus interest.
12:47 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *68401 PAGE: 6/10
Board Minutes Page 29
Apri127, 1999
Motion by Commissioner Christian, seconded by Commissioner Murray, to adopt the
resolution.
Action: Carried unanimously.
#99-4-4
C. WATERMAIN INSTALLATION CHARGES
RESOLVED, That the Board of Water and Light(BWL)charge for 6" and 8"watermain
installations on unimproved roads, all having fire hydrant coverage,be changed to$27.10 per
foot, effective April 1, 1999. This is a 6%increase over the current charge adopted January 1,
1997.
RESOLVED FURTHER, That one-half this amount be the standard per foot frontage charge
to be levied in conjunction with a water service connection on either side of a street where a
charge for watermain installation has never been made, directly or indirectly.
RESOLVED FURTHER, That the BWL charge for public fire hydrant installations on mains
12" and smaller be changed to$2,015 per hydrant, effective April 1, 1999. This is a 7.5%
increase over the current charge adopted January 1, 1997.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution.
Action: Carried unanimously.
#99-4-5
D. ONE INCH WATER SERVICE INSTALLATION
RESOLVED, That the BWL charges for 1"water service installations be changed,effective
April 1, 1999, as follows:
Main-To-Curb Box Curb Box-To-Building(per ft.)
Size Current Fee Proposed Fee Current Fee Proposed Fee
1" $850 $850 $13.96 $14.67
The new proposed fees reflect no change in main-to-curb box, and an increase of 5%for curb
box-to-building.
--------------------
As a result of the BWL adopting a 1" service standard two years ago, 3/"service installations
have reduced significantly. It is therefore recommended that a set charge for%" service
installations be eliminated and replaced with a firm cost estimate method.
12:48 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *68401 PAGE: 7/10
Page 30 Board Minutes
April 27, I999
The additional charge of$3.00 per foot for adverse winter weather conditions will remain in
effect.
--------------------
Motion by Commissioner Christian, seconded by Commissioner Murray, to adopt the
resolution.
Action: Carried unanimously.
999-4-6
E. INCREASE CAPITAL BUDGET
RESOLVED, That the Board of Water and Light Capital Budget for fiscal year 1999 be
increased$800,000 to accommodate the following project:
Project I Project Cost FY 99 Expenditures
18"High Pressure Main Relocation @ GM 1 $800,000 $264,000
This steam line is currently routed over the roof of a General Motors (GM) building at their
Plant 1 site. GM will be demolishing this building which requires the BWL to re-route the 18"
high-pressure steam line.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Carried unanimously.
999-4-7
F. REAFFIRMING AUTHORIZATION TO PROCEED'WITH DISTRICT
COOLING
WHEREAS,the Board approved Resolution 91-1-15 authorizing final engineering design of a
Board of Water and Light District Cooling System provided sufficient contracts can be
obtained to justify the District Cooling System, and
WHEREAS,the Board approved a General Chilled Water Service Rate No. 1 on March 26,
1991, and
WHEREAS ,there is renewed interest in receiving service from a District Cooling System
from the State of Michigan and other property owners in the Lansing Downtown area
RESOLVED, That the Lansing Board of Water and Light reaffirms Resolution 91-1-15.
--------------------
ID: BOARD OF WATER & LIG TEL N0: (517) 371-62 tk68401 PAGE: 8i10
12:48 APR 30, 1999 03 paged
Board Minutes
April 27, 1999
This will allow staff to proceed with conceptual engmeermg design of a system that could be
developed in a modular configuration as follows:
Cooling Capacity tons
Year Connected 2,000
2001
2003
4,000
2004 4,000
10,000
Total:
Business Case/economic feasibility and political review will require further oversight from the
Commissioners.
Motion by Commissioner Christian, seconded by Commissioner Aquilina, to adopt the
resolution. planned
ory of the
Discussion: General Manager Pandy briefed the Commissionersciated oadsl approximateto the
chilled water system A map was displayed showing Pgh
chiller site. Mr. Pandy reported that letters of intent have been receive fr Center,
proposed de who is redeveloping
County for the proposed new Hall of Courts, Sam EY the YWCA. Ongoing discussions
and the Gentilozzr Real F-state group who is redeveloping
atin loads that are presently
are in process with the State of Michigan with regard to integr g the
served by the State of Michigan chiller, as well as new loads. A financial model showing
ro ect can yield a positive
cost of the chilled water project for the loads identified ig thnt n)✓a this Lansing. t can
CoolingSystem
was reviewed. The model demonstrates emphasizedes that timing for the BWL to commit to
return for the BWL over time. Mr. Pandy
the project is critical because it affects building designs.hExtensive
C en of Lansing's s position on this
P
related to legal opinions on the chilled water system an
matter was included with the board meeting package for review.
Action: Following lengthy discussion,the resolution was adopted unanimously.
LJNFIMS ED BUSINESS
Report on Load and Capacity. Bill Cook,Director of Delivery Process,reported P the
1999 load and capacity projection for the Michigan Public Power Agency(MP
an
PA)
pool. The MPPA Power Pool is comprised of eight member 1 tti re e Mlle b k f the total of
857 MW of electric generation resources,nt d the which peak demand forecast,total generation
resources at 661 MW- Mr. CO°k P capacity availability
resources, and the reserve requirement.resale revaP enue in 199hs were 1g was$17.4 million and projections
at any given time for the pool. BWL r$ le 8 million.
for 1999 are estimated to be as high as
NEW BUSINESS
P.08
T� 1 r r_ 97%
12:49 APR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #68401 PAGE 9/10
Board Minutes
Page 32 April 27,1999
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
General Motors - Ancillary Utility Services. General Manager Pandy beefed the Board on
Ge y plant and ancillary utility
activities concerning General Motors' potential new assembly P of a Dint venture concept to
services the BWL would be abussecl.to pTlus matte. er will be discussed further at the Committee
provide utility services was dis
of the Whole meeting in May.
APPA National Conference. The APPA annual conference will be held in Salt Lake City,
June 21-23. _
onnecti
ons markg
APPA Connection Services. Staff has met v`'i APPA Hometown C de surge protectio devices for homes
clurepresentatives to discuss services offered, which in
and businesses and appliance warranty programs. A recommendation to provide these services
will be brought to the Board in the near future for consideration.
all of the
Year MOO Readiness Disclosure. General Manager Pandy
reportedlian that
ork is BWL
production facilities (electric, steam and water) are P
schedule on contingency plans to address issues that could to meetthe Y2K challenge was
and essential technologies. A booklet outlining BWL P
handed out for reference. Continued updates will be presented to the Board.
REMARKS B'1'COMMISSIONERS
Commissioner Murray asked for a briefing on two issues included in the General Manager's
cover letter: (1)the reason for stockpiling coal from a sixty-day supply to a ninety-day supply
and (2) the expectations of Midwest states on the appeal of EPA regulations that require area
power plants to reduce nitrogen oxide errussions (NO.).
General Manager Pandy responded that the coal build up is a standard practice by utilities
I disruptions are anticipated. A ninety-day supply is recommended to
when possible fuel supply 1 with the
prepare for the Y2K turnover. Due to e Statehe large of Micluganl Deptal artment of Environmental Quality act on u is
federal NO,pollution standard, th
in the process of appealing the EPA regulations--as are the comparable agencies in other
Midwest states_
ce of coal versus spot market
Commissioner Callen requested information on the average pri
coal. General Manager Pandy indicated he would send him that information.
P.09
I T f, 97/
ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203
#bt34b1
12:49 APR 30, 1999 Page 33
Board Minutes
April27, 1999
EXCUSED ABSENCES
By Commissioner O'Leary, seconded by
Commissioner Christian, that the absence of Commissioner Creamer be excused.
Adopted unanimously.
PUBLIC COMMENTS
PUBLIC ARE WFI�COME TO
.� CHAIR ANNOUNCED THAT MEMBERS OF T'IIE LIGHT SUBJECT.
SPEAK TO THE BOARD ON ANY BOARD OF WAS AND
No persons spoke.
ADJOURNMENT
On motion by
Commissioner Chi-istian, seconded by Commissioner Aquilina, the meeting
adjourned at 6:51 p-m-
/s/Mary k Sova, Secretary
Filed: April 30, 1999
Marilynn Slade, City Clerk
P.10
--non np wATER & L I G
97%
Page 18
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING, F;i
LANSING BOARD OF WATER AND LIGHTI 'Si�;U C1 I v CLERK;
Tuesday, March 23, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to order
by the Chair, Diane Royal.
Present: Commissioners Rosemarie Aquilina, Ernest Christian, Charles Creamer, Mark
Murray, David O'Leary, Diane Royal and Judson Werbelow(by teleconference).
Absent: Ronald Callen (our ofrown).
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary, seconded by Commissioner Christian, to approve
the minutes of regular session held February 23, 1999.
Carried 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
No Communications.
REPORTS OF COMMITTEES
No reports from committees.
Board Minutes Page 19
March 23. 1999
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on the items presented are on file in the Office of the Corporate Secretary.
#99-3-1
A. TELECONFERENCE MEETING ATTENDANCE
WHEREAS, the Board of Commissioners intends to employ teleconferencing as a means to
establish a quorum; and
WHEREAS, the Board of Commissioners desires to ensure compliance with the spirit as well as
the intent of the Open Meetings Act by use of teleconferencing.
IT IS RESOLVED, That
1. The roll call attendance taken by the Corporate Secretary shall indicate whether the
Commissioner is participating by teleconference. Each Commissioner so participating shall
verbally affirm his or her participation by teleconference and such response shall be a part of
the Board minutes.
2. The Corporate Secretary is directed and authorized to only utilize a teleconferencing system
which allows all participants to hear each other contemporaneously. The Corporate
Secretary will further ensure that the teleconferencing system will enable members of the
public to hear and communicate with the teleconferencing Commissioner.
3. Each Commissioner participating by teleconference must announce his or her intent to be
absent, temporarily or otherwise, from the meeting and such fact must be recorded by the
Corporate Secretary.
4. Each Commissioner participating by teleconference should to the extent practicable identify
himself or herself before speaking.
Motion by Commissioner O'Leary, seconded by Commissioner Christian, to adopt the
resolution.
Action: Adopted unanimously.
#99-3-2
B. CORPORATE FINANCIAL GOALS
RESOLVED, That the corporate financial goals for the BWL strategic business units be
established as follows:
1. Return on Assets target of> 4.0% (Return on Assets is defined as net income divided by net
fixed assets).
2. Operating Ration target of<95% (Operating Ratio is defined as operating expenses divided
by operating revenue).
Page 20 Board Minutes
March 23. 1999
These goals are based on actual operating experience over the past five (5) years and will stretch
the BWL to be more competitive.
Both goals treat the return on equity payment to the City as an operating expense.
Motion by Commissioner Christian, seconded by Commissioner Aquilina to adopt the
resolution.
Action: Adopted unanimously.
#99-3-3
C. CUSTOMER SATISFACTION GOAL
RESOLVED, That the Board establish a customer satisfaction goal of 90% overall satisfaction
level among its customers. This goal is based on the semi-annual customer attitude survey.
Motion by Commissioner Creamer. seconded by Commissioner O'Leary to adopt the resolution.
Discussion: Communications Director John Strickler reported that strategies for residential
customers will be based on the Market Strategies Key Drivers of Customer Satisfaction Model,
purchased by the BWL. This model was initially administered in spring, 1997. Conceptually the
model leads the organization from very specific to general activities that lead to customer
satisfaction. Staff intends to more closely follow the guidelines of the model to return to the
90% overall satisfaction level.
Action: Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
APPA Brochure on Public Power Benefits: General Manager Pandy handed out copies of
STRAIGHT ANSWERS TO MORE FALSE CHARGES AGAINST PUBLIC POWER, published by the American
Board Minutes Paee 21
March 23. 1999
Public Power Association (APPA), 1999. Commissioner Murray suggested presenting a more
positive tone to the opener introduction of the brochure. General Manager Pandy agreed to
utilize only the positive bullet points from the inside front and back covers for the legislative
reception on March 24, 1999.
BWL Co-Sponsors Legislative Reception. General Manager Pandy reminded the
Commissioners of the legislative reception on March 24 at the Lansing Center, 5:30 p.m. to 7:30
p.m. to meet and greet newly elected and returning legislators. Reception co-sponsors include
the City of Lansing, Lansing Regional Chamber of Commerce, Lansing Convention and Visitors
Bureau, and the Michigan Retailers Association.
APPA Features Article on BWL. A copy of APPA's QUARTERLY COMMUNICATOR, Winter
1999 issue, was handed out. The article highlights the BWL's new Customer Service Center and
how customer convenience is a priority. The drive-up window, 24-hours a day, seven days a
week service, and streamlined customer transactions are among improved services emphasized
in the article.
Report on Minority/Women/Handicapper-Owned Business Enterprise Activity. A report
summarizing BWL business with minority/women/handicapper-owned businesses was handed
out. General Manager Pandy congratulated Kathy Younglove, Manager of Material and
Services, for the department's aggressive effort in trying to identify and work with these types of
suppliers. Total dollars spent during the calendar year on minority/women/handicapper suppliers
that received purchase orders increased from $115,113 in 1997 to $473,234 in 1998. Total
dollars spent on goods and services was $24,593,190 in 1998. Mr. Pandy noted that many of the
utilities' suppliers are large, international firms and big vendors of original equipment; i.e.,
boilers, power plant distribution and transmission equipment. The bulk of the dollars spent are
for infrastructure needs of which large companies are the market players.
Natural Gas Program a Success. A copy of preliminary results of the natural gas program, as
of March 17, 1999, was distributed for information. Program enrollment expired at midnight
March 23, 1999. with the.customer count expected to exceed 3,000. An economic analysis was
presented. Commissioner Murray asked if Lansing schools were involved in the program.
General Manager Pandy responded that before the BWL came out with the Customer Choice
program. Lansing schools had already aggregated their loads and received a good price through a
transportation gas program. General Motors also negotiated volume purchasing with another
supplier. Commissioner Creamer complimented BWL employees for their sense of team spirit
in assisting customers with changing over to the BWL gas supply.
APPA CEO Roundtable Report. General Manager Pandy gave an overview of topics
discussed at a recent American Public Power Association (APPA) CEO Roundtable at which
speakers from deregulated industries such as telecommunications, natural gas and the airlines
shared their experiences with deregulation. A flier describing APPA's Hometown Connections
program was distributed for information. The Hometown Connections is focusing its efforts on
helping APPA members gain competitive advantage in local markets by two types of services:
(1) services that help utilities become more competitive, and (2) services that public power
systems can offer to customers as part of their customer retention or new market penetration
strategies.
Page 22 Board Minutes
March 23, 1999
Report on Water Interconnect Projects - History and Present. Clvde Dugan, Director of
Marketing, presented a brief history of the challenges faced in forming the Mid-Michigan Water
Authority (MMWA) in 1994. The motivation to expand the water service territories was based
on economics and benefits to ratepayers by spreading fixed costs out over a larger volume of
water. The MMWA study looked at potential interconnections between existing independent
water systems, all run by local units of government. and recommended interconnects between
various systems. The BWL entered into wholesale water agreements with Lansing Township
(94-8-17) and Delta Township (Res.994-8-1'). Retail water service has also been extended into
Watertown Township (Res#86-8-12), DeWitt Township (Res. 95-6-9), and most recently in Bath
Township (Res.#98-2-9). Following the overview. Mr. Dugan updated the Board on the following
two ongoing extension projects for consensus:
1. Jackson National Life and Alaiedon Township Development. As part of the 425
Agreement between the City of Lansing and Alaiedon Township, the BWL is obligated to serve
a certain area of Alaiedon Township. Territorial limitations exist for electric service due to the
425 Agreement, however, water utility service is not restricted by the agreement. A number of
changes have occurred since staff last briefed the Board on initial negotiations with Jackson
National Life and Alaiedon Township. An update was presented on the justification for electric
and water service on revised costs. The assumptions for the following scenarios were reviewed:
Scenario 1 Scenario 2 Scenario 3 Scenario 4
Jackson National Life Initial Estimate Revised with Proposed Larger Booster
Interconnect Project with Proposed Proposed Storage Tank- Pumping
Storage Tank Booster Pumping north side of Station-north
Station.Delhi Freeway, side of Freeway,
Twp. Alaiedon Twp. Alaiedon Twp.
Electric Capital Cost Estimate $880,000 S758,770 $758,770 $758,770
Electric Payback(1 st year positive) 2003 2003 2003 2003
Electric Net Cash Flow by Year $2,060,000 S2,185,000 $2,185,000 $2,185,000
2010
Water Capital Cost Estimate S2,389.000 S2,622,000 $3,741,000 $6,247,000
Water Payback(1 st year positive) 2010 2011 2010 2005
Water Net Cash Flow by Year $165,000 ($180,245) ($211,720) $4,081,000
2010
Combined Net Cash Flow by Year $2,228,000 S2,005,000 $2,396,720 $6,288,000
2010
After a question and answer period, the Board concurred with the following, as recommended by
staff:
1. Proceed with the water main extension as identified in scenario 4.
2. Negotiate companion water service agreements with Alaiedon Township.
3. Negotiate a wholesale interconnect agreement with three parties; namely, the East
Lansing/Meridian Water Authority, City of East Lansing, and Meridian Township.
4. Proceed with an option to purchase a two-acre parcel, north of the I-96 freeway for the
booster pumping station. Cost projections in scenario 4 include the purchase price of the
property.
Board Minutes
March 23. 1999
Page 23
Mr. Dugan noted that in the event negotiations for one or both agreements fail. there is still good
flexibility to revert to one of the other scenarios presented.
2. Water Extension to serve City of DeWitt/DeWitt and Bath Townships. Marketing
Director Dugan briefed on the status of water distribution interconnect projects completed in
DeWitt and Bath Townships for retail water service. The BWL negotiated an agreement for the
southern portion of DeWitt Township, which also extended service to Bath Township. Part of
that main extension project--east along State Road, extending to Bath Township, is already under
way. The Bath Township schools were recently connected in January, and this year there will be
a final connection made to pick up the existing Bath Township system, on the east. Negotiations
with DeWitt Township for the northern portion is expected to be concluded this summer. A
request for proposal has been received from the City of DeWitt for retail water service.
Mr. Dugan reported that costs for the DeWitt Township/City of DeWitt water main
reinforcement project as initially reported have gone up. Two scenarios relative to this project
were reviewed. showing the economics associated to install a 24-inch high pressure main versus
a 30-inch main. A 30-inch main was recommended because it would improve hydraulic
conditions on the north end of the City of Lansing and provide potential for future capacity.
Following discussion. the Board concurred with the recommendation and authorized staff to
proceed with the 30-inch water main reinforcement project.
Commissioner O'Leary left the meeting at 6:30 p.m.
Utility Rate of Return Research. General Manager Pandy reported that the Ways and Means
Committee has asked Council staff to compile research on the rate of return municipal utilities
provide their communities.
Post Retirement Health Insurance. General Manager Pandy reported that the consulting firm
of William M. Mercer. Inc., has submitted alternatives to prefunding post retirement health
insurance obligations. This matter will be discussed in April at a Committee of the Whole
meeting. Commissioner Werbelow requested that information on this topic be forwarded to the
Board in advance of the meeting.
Lansing Regional Sister Cities Commission Request. General Manager Pandy handed out a
letter from Mayor Hollister and Barbara Roberts Mason, Chairperson of the Lansing Regional
Sister City Commission. The Commission is requesting a financial contribution to provide
medical assistance for the Akuapim, Ghana, Health Project. Sparrow Hospital, World Medical
Relief and others are partnering with the Commission to donate a large quantity of medical
supplies and equipment. A minimum of$40,000 is needed in order to purchase and refurbish a
used ambulance, packaging and shipping donations to Ghana. Following discussion, it was the
consensus of the Board to deny the request because making monetary contributions for charitable
purposes does not fit the mission of the BWL.
Page 24 Board Minutes
March 23. 1999
REMARKS BY COMMISSIONERS
MCRC Realignment. Commissioner Creamer inquired about management's intentions in
addressing job responsibilities vacated by the resignation of the Maintenance Construction
Resource Center (MCRC) Director. General Manager Pandy responded that executive staff is
evaluating the most effective way to utilize and realign MCRC employees under the existing
processes, while saving the cost of the former director's wages and benefits. A decision is
expected in May.
Ottawa Street Power Station Update. Commissioner Christian inquired about the status of the
Ottawa Station. General Manager Pandy reported that an application is being submitted by the
BWL for the Clean Michigan Initiative, a new State of Michigan grant program wherein up to
$50 million is available in increments tip to $20 million in the first round for grants to local units
of government for waterfront improvements. Grant applications are due April 15, 1999, and
October 1, 1999. For the purposes of the grant application, Mr. Pandy indicated that he is
leaning on the expertise of Clark Construction Company. Mr. Pandy noted that a couple
developers have expressed interest in the Ottawa Station. Discussion was held on the importance
of carefully examining potential developers for the Ottawa Station. Commissioner Murray noted
that it may be appropriate to pay Clark or others for their efforts in support of the grant
application.
PUBLIC COMMENTS
THE CHAIR 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
By Commissioner Christian, seconded by Commissioner Aquilina, that the absence of
Commissioner Callen be excused.
Adopted unanimously.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner Creamer, the meeting
adjourned at 6:53 p.m.
ISI Mary . ova, Secretary
Filed: March 30, 1999
Marilynn Slade, City Clerk
10:02 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #67491 PAGE: 21B
Page 18
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING,. . „
LANSING BOARD OF WATER AND LIGHT
Tuesday,March 23,1999 L;_i="!G �I l i ..LEIRIK
The Board of Commissioners met in regular session at 5:30 p.m., in the Boardroom of the
Administrative Offices, 1232 Haco Drive, Lansing, Michigan. The meeting was called to order by
the Chair,Diane Royal.
Present_ Commissioners Rosemarie Aquilina, Ernest Christian, Charles Creamer, Mark Murray,
David O'Leary,Diane Royal and Judson Werbelow(by teleconference).
Absent: Ronald Callen(ourofrown).
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary, seconded by Commissioner Christian, to approve
the minutes of regular session held February 23, 1999.
Carried 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
No Communications.
REPORTS OF COMMITTEES
No reports from committees_
10:03 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #67491 PAGE: 3/8
Board Minutes Page 19
March 23,1999
GENERAL MANAGER'S RECOMMENDATIONS
Background materials on the items presented are on file in the Office of the Corporate Secretary.
#99-3-1
A. TELECONFERENCE MEETING ATTENDANCE
WHEREAS,the Board of Commissioners intends to employ teleconferencing as a means to
establish a quorum;and
WHEREAS,the Board of Commissioners desires to ensure compliance with the spirit as well as
the intent of the Open Meetings Act by use of teleconferencing.
IT IS RESOLVED, That
1. The roll call attendance taken by the Corporate Secretary shall indicate whether the
Commissioner is participating by teleconference. Each Commissioner so participating shall
verbally affirm his or her participation by teleconference and such response shall be a part of
the Board minutes.
2. The Corporate Secretary is directed and authorized to only utilize a teleconferencing system
which allows all participants to hear each other contemporaneously. The Corporate Secretary
will further ensure that the teleconferencing system will enable members of the public to hear
and communicate with the teleconferencing Commissioner.
3. Each Commissioner participating by teleconference must announce his or her intent to be
absent,temporarily or otherwise,from the meeting and such fact must be recorded by the
Corporate Secretary.
4. Each Commissioner participating by teleconference should to the extent practicable identify
himself or herself before speaking.
Motion by Commissioner O'Leary, seconded by Commissioner Christian,to adopt the resolution.
Action: Adopted unanimously.
#99-3-2
B. CORPORATE FINANCIAL GOALS
RESOLVED,That the corporate financial goals for the BWL strategic business units be
established as follows:
1. Return on Assets target of>4.0%(Return on Assets is defined as net income divided by net
fixed assets).
2. Operating Ration target of<95%(Operating Ratio is defined as operating expenses divided by
operating revenue).
10:03 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #67491 PAGE: 4/8
Page 20 Board Minutes
March 23, 1999
These goals are based on actual operating experience over the past five(S)years and will stretch
the BWL to be more competitive.
Both goals treat the return on equity payment to the City as an operating expense.
Motion by Commissioner Christian, seconded by Commissioner Aquilina to adopt the resolution.
Action: Adopted unanimously.
#99-3-3
C. CUSTOMER SATISFACTION GOAL
RESOLVED,That the Board establish a customer satisfaction goal of 90%overall satisfaction
level among its customers. This goal is based on the semi-annual customer attitude survey.
Motion by Commissioner Creamer, seconded by Commissioner O'Leary to adopt the resolution.
Discussion: Communications Director John Strickler reported that strategies for residential
customers will be based on the Market Strategies Key Drivers of Customer Satisfaction Model,
purchased by the BWL. This model was initially administered in spring, 1997. Conceptually the
model leads the organization from very specific to general activities that lead to customer
satisfaction. Staff intends to more closely follow the guidelines of the model to return to the 90%
overall satisfaction level.
Action: Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
APPA Brochure on Public Power Benefits: General Manager Pandy handed out copies of
STRAIGHT ANSWERS TO MORE FALSE CH.ARGEs AGAINST PUBLIC POWER, published by the American
Public Power Association (APPA), 1999. Commissioner Murray suggested presenting a more
positive tone to the opener introduction of the brochure. General Manager Pandy agreed to utilize
10:04 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203
#67491 PAGE: 5/8
Page 21
Board Minutes
March 23,1999
only the positive bullet points from the inside front and back covers for the legislative reception on
March 24, 1999.
BWL Co-Sponsors Legislative Reception. General Manager Pandy reminded the
Commissioners of the legislative reception on March 24 at the Lansing Center, 5:30 p.m. to 7:30
P.M. tbe
on
to meet and greet newly Relected al Chambers of Coing mmerce, Lansing Conventionrs I
andcV1 itors
City of Lansing, Lansing g
Bureau,and the Michigan Retailers Association.
APPA Features Article on BWL. A copy of APPA's QUARTERLY COMMUNICATOR, Winter
1999 issue, was handed out. The article highlights the BWL's new Customer Service Center and
how customer convenience is a P e t anslions are amongmp improved service emphasd the
° acnty. he v is i, 24-hours a day, seven days a week
ze in
m
service, and streamlined custom
article.
Report on Minority/Women/Handicapper-Owned Business Enterprise Activity. A report
BWL business with h minority/« /h
'omenandicapper-owned businesses was handed out.
General Manager Pandy congratulated Kathy Younglove, Manager of Material and Services, for
ve effort in trying to identify and work with these types of suppliers.
the department's aggre
ssive
Total dollars spent during the calendar year on minority/women/handicapper suppliers that
received purchase orders increased from $115,113 in 1997 to $473,234 in 1998. °thet e s
spent on goods and services was $24,593,190 in 1998. Mr. Pandy noted that many over
suppliers are large, intemabonal firms and big vendors of original equipment, i.e., boilers, p
plant distribution and transmission equipment. The bulk of the dollars spent are for infrastructure
needs of which large companies are the market players.
Natural Gas Program a Success. A copy of preliminary results of the natural gas program, as of
March 17, 1999, was distributed for information. Program enrollment expired at midnight March
d.
23, 1999,with the customer count expected to exceed 3,000. An economic alysis was pNlanager
Commissioner Murray asked if Lansing schools were invoked in the Program- General
BWL came out with the Customer Choice program, Lansing
Pandy responded that before the
schools had already aggregated their loads and received a good price through a transportation gas
program. General Motors also negotiated volume purchasing with another supplier.
BWL employees for their sense of team spirit in assisting
Commissioner Creamer complimented
customers with changing over to the BWL gas supply.
APPA CEO Roundtable Report. General Manager Pandy gave an overview of topics discussed
at a recent American Public Power Association(APPA) CEO Roundtable at which speakers from
such as telecommunications, natural gas and the airlines shared their
deregulated industries
experiences with deregulation. A flier describing APPA's Hometown Connections program was
distributed for information. The Hometown Connections is focusing its efforts on helping APPA
members gain competitive advantage in local markets by two types of services: (1) services that
help utilities become more competitive, and (2) seances that public power systems can offer to
customers as part of their customer retention or new market penetration strategies.
Report on Water Interconnect Projects - History and Present. Clyde Dugan, Director of
Marketing, presented a brief history of the challenges faced in forming the Mid-Michigan Water
Authority(MMWA)in 1994. The motivation to expand the water service territories was based on
P.05
10:05 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #67491 PAGE: 6/8
Page 22 Board Minutes
March 23,1999
economics and benefits to ratepayers by spreading fixed costs out over a Irger volume of water.
The MMWA study looked at potential interconnections between existing independent water
systems, all run by local units of government, and recommended interconnects between various
systems. The BWL entered into wholesale water agreements with Lansing Township
(94-8-17) and Delta Township (Res.#94-8-17). Retail water service has also been extended into
Watertown Township (Res#86-8-17), DeWitt Township (Res. 95-6-9), and most recently in Bath
Township (Res.#98-2-9). Following the overview, Mr. Dugan updated the Board on the following
two ongoing extension projects for consensus:
1. Jackson National Life and Alaiedon Township Development. As part of the 425
Agreement between the City of Lansing and Alaiedon Township, the BWL is obligated to serve a
certain area of Alaiedon Township. Territorial limitations exist for electric service due to the 425
Agreement, however,water utility service is not restricted by the agreement. A number of changes
have occurred since staff last briefed the Board on initial negotiations with Jackson National Life
and Alaiedon Township. An update was presented on the justification for electric and water
service on revised costs. The assumptions for the following scenarios were reviewed:
Scenario 1 Scenario 2 Scenario 3 Scenario 4
Jackson National Life Initial Estimate Revised with Proposed Larger Booster
Interconnect Project with Proposed Proposed Storage Tank- Pumping
Storage Tank Booster Pumping north side of Station-north
Station,Delhi Freeway, side of Freeway,
Twp. Alaiedon Twp. Alaiedon Twp.
Electric Capital Cost Estimate $880,000 $758,770 $758,770 $758,770
Electric Payback(1st yearpositive) 2003 2003 2003 2003
Electric Net Cash Flow by Year $2,060,000 $2,185,000 $2,185,000 $2,185,000
2010
Water Capital Cost Estimate $2,389,000 $2,622,000 $3,741,000 $6,247,000
Water Payback(1st yWpositive) 2010 2011 2010 2005
Water Net Cash Flow by Year $165,000 ($180,245) ($211,720) $4,081,000
2010
Combined Net Cash Flow by Year $2,228,000 $2,005,000 $2,396,720 $6,288,000
2010
After a question and answer period, the Board concurred with the following, as recommended by
staff
1. Proceed with the water main extension as identified in scenario 4.
2. Negotiate companion water service agreements with Alaiedon Township.
3. Negotiate a wholesale interconnect agreement with three parties; namely, the East
Lansing/Meridian Water Authority, City of East Lansing, and Meridian Township.
4. Proceed with an option to purchase a two-acre parcel, north of the I-96 freeway for the
booster pumping station. Cost projections in scenario 4 include the purchase price of the
property.
Mr. Dugan noted that in the event negotiations for one or both agreements fail, there is still good
flexibility to revert to one of the other scenarios presented.
10:05 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203
#k67491 PRGE: 7/8
Page 23
Board Minutes
March 23,1999
2. Water Extension to serve City of DeWitt/DeWitt and Bath Townships. Marketing
Director Dugan briefed on the status of water distribution interconnect projects completed in
DeWitt and Bath Townships for retail water service. The BWL negotiated an agreement for the
southern portion of DeWitt Township,which also extended service to Bath Township. Part of that
main extension project--east along State Road, extending to Bath Township, is already under way.
The Bath Township schools were recently connected in January, and this year there will be a final
connection made to pick up the existing Bath Township system, on the east. Negotiations with
DeWitt Township for the northern portion is expected to be concluded this summer. A request for
proposal has been received from the City of DeWitt for retail water service.
Mr. Dugan reported that costs for the DeWitt Township/City of DeWitt water main reinforcement
project as initially reported have gone up. Two scenarios relative to this project were reviewed,
showing the economics associated to install a 24-inch high pressure main versus a 30-inch main. A
30-inch main was recommended because it would improve hydraulic conditions on the north end of
ty. Following
oard
the City of Lansing and provide annd authortial for i
zed zed staff toture l discussion, B
proceed with the 30-in h water
rmain
concurred with the recommendation
reinforcement protect.
Commissioner O'Leary left the meeting at 6:30 p.m.
Utility Rate of Return Research. General Manager Pandy reported that the Ways and Means
Committee has asked Council staff to compile research on the rate of return municipal utilities
provide their communities.
Post Retirement Health Insurance. General Manager Pandy reported that the consulting firm of
William M. Mercer, Inc., has submitted alternatives to prefunding post retirement health insurce
obligations. This matter will be discussed in April at a Committee of the Whole meeti anng.
Commissioner Werbelow requested that information on this topic be forwarded to the Board in
advance of the meeting.
Lansing Regional Sister Cities Commission Request, General Manager Pandy handed out a
letter from Mayor Hollister and Barbara Roberts Mason, Chairperson of the Lansing Regional
Sister City Commission. The Commission is requesting a financial contribution to provide medical
assistance for the Akuapim, Ghana, Health Project. Sparrow Hospital,World Medical Relief and
others are partnering with the Commission to donate a large quantity of medical supplies and
equipment. A minimum of$40,000 is needed in order to purchase and refurbish a used ambulance,
packaging and shipping donations to Ghana. Following discussion, it was the consensus of the
Board to deny the request because making monetary contributions for charitable purposes does not
fit the mission of the BWL.
P.07
10:06 MAR 30, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203
#67491 PAGE: B/B
Board Minutes
Page 24 March 23,I 999
REMARKS BY COMMISSIONERS
MCRC Realignment. Commissioner Creamer inquired about management's intentions in
addressing job responsibilities vacated by the resignation of the Maintenance Construction
Resource Center (MCRC) Director. General Manager Pandy responded thatt executive staff is
evaluating the most effective way to utilize and realign MCRC employees under the existing
processes, while saving the cost of the former director's wages and benefits. A decision is
expected in May.
Ottawa Street Power Station Update. Commissioner Christian inquired about the status of the
Ottawa Station. General Manager Pandy reported that an application is being submitted by the
BWL for the Clean Michigan Initiative, a new State of Michigan grant program wherein up to$50
million is available in increments up to $20 million in the first round for grants to local units of
government for waterfront improvements. Grant applications are due April 15, 1999, and October
1, 1999. For the purposes of the grant application, Mr. Pandy indicated that he is leaning on the
expertise of CIark Construction Company. Mr. Pandy noted that a couple developers have
expressed interest in the Ottawa Station. Discussion was held on the importance of carefully
examining potential developers for the Ottawa Station. Commissioner Murray noted that it may be
ir efforts in support of the grant application.
appropriate to pay Clark or others for the
PUBLIC COMMENTS
THE CHAIR ANNOUNC LIGHT SUBJECT.
WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND
No persons spoke.
EXCUSED ABSENCES
By Commissioner Christian, seconded by Commissioner Aquilina, that the absence of
Commissioner Callen be excused.
Adopted unanimously.
ADJOURNMENT
On motion by Commissioner Christian, seconded by Commissioner Creamer, the meeting
adjourned at 6:53 p.m.
Is/Mary E. Sova, Secretary
Filed: March 30, 1999
Marilynn Slade, City Clerk
P.08
Page 14
ME-UTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,February 23, 1999 �L&
The Board of Commissioners met in regular session at 5:30 p.m., in the Administration Building, 1232
Haco Drive, Lansing,Michigan. The meeting was called to order by the Chair, Diane Royal.
Present: Commissioners Rosemarie Aquilina, Ronald Callen, Ernest Christian, Charles Creamer, Mark
Murray,David O'Leary,Diane Royal and Judson Werbelow.
Absent: None
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner Aquilina, to approve the
minutes of regular session held January 26, 1999.
Carried 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.
Tom Stanton, 216 Huron Street, Lansing, spoke on the recent BWL Integrated Resource Plan and
encouraged the Board to provide a demand-side-management (DSM) resource acquisition program and
renewable energy services. He advised that Urban Options and the Michigan Environmental Council stand
ready to assist in improving the environment and seeing renewable energy come into the picture in
Lansing.
COMMUNICATIONS
Letter from the NAACP, Lansing Branch, Economic Development Committee, requesting purchasing data
for the last fiscal year relative to women and minority suppliers.
Referred to management for reply with data requested and a report back to the Board at the next regular
meeting.
Board Minutes Page 15
February 23, 1999
REPORTS OF COMMITTEES
No reports from committees.
GENERAL MANAGER'S RECOMMENDATIONS
(Background material on the item below may be obtained from the Secretary)
#99-2-1
A. USE OF SPECIAL COUNSEL
RESOLVED, that the General Manager be authorized to retain the following law firms as special counsel
on an as-needed basis for a period of two years from February 17, 1999 to February 17, 2001. These firms
will provide advice and services as needed in the areas of public finance, municipal law, general litigation,
real estate, energy, environmental and employment law. These firms will be submitted to the City
Attorney and upon his recommendation to City Council for approval. Use of Special Counsel is subject to
the recommendation of Staff Counsel and the approval of the General Manager.
• Canady Law Offices
• Clark,Hill
• Dickinson, Wright
• Foster, Swift,Collins&Smith
• Howard&Howard
• Melvin McWilliams Associates
• Willingham&Cote'
----------------
Requests for Qualifications were solicited by public advertisement and direct mail notice. Thirteen fumy
submitted proposals. Each firm proposal was reviewed, analyzed and compared with other proposals.
These firms were selected with due regard to community reputation, particularized expertise, proposed
legal fees, and diversity. A bid comparison tabulation was provided.
Motion by Commissioner Christian,seconded by Commissioner Aquilina to adopt the resolution.
Discussion: Staff answered questions on the expertise of each fum, the selection processed used, and the
amount of legal fees paid over the past four years with an overview of the major cases. Commissioner
Callen requested a copy of the tabulation form showing the results and experience factors.
Action: Adopted by the following vote:
Yeas: Aquilina, Callen,Christian,Creamer,Murray, O'Leary,Royal--7
Nays: None
Abstentions: Werbelow
Commissioner Werbelow neither participated in the discussion nor voted on the issue.
Board Minutes
Page 16 February 23, 1999
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
Board Retreat. The agenda for the Board retreat set for February 24 was slightly modified to allow time
to discuss the future of the electric utility industry and deregulation issuand es. Topics Future of the de: (1)IndustryAncill�
Services, (2)Business Strategies and Policies,(3)Return on Equity,
Natural Gas Supply Pilot Program. General Manager Pandy reported on preliminary numbers of City of
Lansing customers who have signed up to participate in the BWL natural gas program. The gas supply
service is being offered under provisions of a pilot customer choice program ordered by the Michigan
Public Service Commission for natural gas customers of Consumers Energy. With a couple of weeks
remaining for customers to take advantage of the offer(by March 15 appears
developed ed participation
for the on wi l
methodology
be a success. There was lengthy discussion on the pricing categories and delivery of the gas supply arranged by AMI Energy, ious
Inc., a Traverse City natural gas broker
with whom the BWL formed a strategic alliance for the duration of the customer choice pilot program.
he
High Volume Call Answering System. General Manager Pandy presented an overviewery a t f t electronic
Twenty-
First Century Communications high volume call answering system. system
will Po
interface for BWL customers wishing to report an outage during a major storm or other event. The system
has the capacity to handle 18,000 calls simultaneously with a caller identification feature. Costs associated
with the one-time set-up fee and monthly charges were reviewed.
Utility Services Proposal. General Manager Pandy updated on a major customer request for information
on BWL utility service availability. Interest has also been expresse obemer on the possibility of
A diagram of the proposed site
the BWL conveying real estate to them for plant construction purp
location was displayed. Mr. Pandy asked the Board for their input on the possible land sale. Discussion
followed on financial and human resource implications for the BWL to provide the services being
proposed.
Rules of Administrative Procedure. The City Attof an Office has completed a review opinion rendered by the Deputy ifty Attorney
the y
Rules of Procedure for approval as to form. A copy of an
with regard to employing teleconference as a method to establish a quorum at meetings was handed out.
Safeguard procedures were suggested to be incorporated in the Rules to ensure compliance with the spirit
and intent of the Open Meetings Act. The Rules now need to be submitted to the City Clerk for
transmission to the City Council for concurrence.
APPA Conferences. General Pandy advised that he will be attending the American Public Power
Association(APPA)chief executive roundtable on March 14-16 in Scottsdale,Arizonan StrategicThtopics
to be
discussed are (1) Leading Organizations in Deregulated markets, (2) Determining
Board Minutes
February 23, 1999
Page 17
the Competitive Marketplace, and (3) Organizing for Competitive Advantage. Mr. Pandy encouraged the
Comrtussioners to consider attending the APPA National Conference to be held June 21-23 in Salt Lake
City. Pre-conference seminars begin June 18-19.
Analytical Review. An analytical review of the Board of Water and Light (BWL) was presented by
Director of Metrics and Auditing Kellie Willson. A notebook with detailed information was previously
provided to each Commissioner for advance review. Graphs indicating key relationships and trends from
1986 through 1998, which point to the critical success factors were displayed indicating performance
results by the Electric Utility, Water Utility and the Steam Utility. BWL measures tracked included:
operational data, customer attitude data on reliability and power restoration, capacity factor, number of
employees, total compensation, overall satisfaction of our customers by utility, and how the BWL
compares with other utilities based on a benchmark survey conducted by Market Strategies,Inc.
Capital Expenditure Forecast. An update on strategies being explored to provide long-term financing for
capital investments to fund economic development projects and to frnance major capital additions to BWL
facilities was presented by Chief Financial Officer Dana Tousley. Preliminary numbers for potential bond
issues were reviewed along with financing alternatives for proposed projects using tax-exempt bonds and
taxable bonds.
REMARKS BY COMMISSIONERS
Commissioner Christian welcomed newly appointed Commissioner Mark Murray to the Board.
PUBLIC COMMENTS
THE CHAIR 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
There were no absences.
ADJOURNMENT
There being no further business,the meeting adjourned at 7:15 p.m.
Is/Mary E.Sova,Secretary
Filed: March 1, 1999
Marilynn Slade,City Clerk
Page 14
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT j_ i Cj I Y C(_EM
Tuesday,February 23,1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Administration Building, 1232
Haco Drive.Lansing,Michigan. The meeting was called to order by the Chair, Diane Royal.
Present: Commissioners Rosemarie Aquilina, Ronald Callen, Ernest Christian, Charles Creamer, Mark
Murray. David O'Leary, Diane Royal and Judson Werbelow.
Absent: Nune
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner Aquilina, to approve the
minutes of regular session held January 26, 1999.
Carried 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.
Tom Stanton. 216 Huron Street. Lansing, spoke on the recent BWL Integrated Resource Plan and
encouraged the Board to provide a demand-side-management (DSM) resource acquisition program and
renewable energy services. He advised that Urban Options and the Michigan Environmental Council
stand ready to assist in improving the environment and seeing renewable energy come into the picture in
Lansing.
COMMUNICATIONS
Letter from the NAACP, Lansing Branch, Economic Development Committee, requesting purchasing
data for the last fiscal year relative to women and minority suppliers.
Referred to management for reply with data requested and a report back to the Board at the next regular
meeting.
Board Minutes Page 15
February 23, 1999
REPORTS OF COMMITTEES
No reports from committees.
GENERAL MANAGER'S RECOMMENDATIONS
(Background material on the item below may be obtained from the Secretary)
#99-2-1
A. USE OF SPECIAL COUNSEL
RESOLVED, that the General Manager be authorized to retain the following law firms as special counsel
on an as-needed basis for a period of two years from February 17. 1999 to February 17, 2001. These firms
will provide advice and services as needed in the areas of public finance, municipal law, general litigation,
real estate, energy, environmental and employment law. These firms will be submitted to the City
Attornev and upon his recommendation to City Council for approval. Use of Special Counsel is subject to
the recommendation of Staff Counsel and the approval of the General Manager.
• Canadv Law Offices
• Clark, Hill
• Dickinson. Wright
• Foster, Swift, Collins&Smith
• Howard&Howard
• Melvin McWilliams Associates
• Willingham&Cote'
Requests for Qualifications were solicited by pubic advertisement and direct mail notice. Thirteen firms
submitted proposals. Each firm proposal was reviewed, analyzed and compared with other proposals.
These firms were selected with due regard to community reputation, particularized expertise, proposed
legal fees,and diversity. A bid comparison tabulation was provided.
Motion by Commissioner Christian, seconded by Commissioner Aquiline to adopt the resolution.
Discussion: Staff answered questions on the expertise of each firm, the selection processed used and the
amount of legal fees paid over the past four years with an overview of the major cases. Commissioner
Callen requested a copy of the tabulation form showing the results and experience factors.
Action: Adopted by the following vote:
Yeas: Aquilina.Callen, Christian, Creamer,Murray,O'Leary,Royal-7
Nays: None
Abstentions: Werbelow
Commissioner Werbelow neither participated in the discussion nor voted on the issue.
Board Minutes
Page 16 February 23, 1999
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
Board Retreat. The agenda for the Board retreat set for February 24 was slightly modified to allow time
to discuss the future of the electric utility industry and deregulation issues. Topics include: (1) Ancillary
Services. (2) Business Strategies and Policies. (3)Return on Equity, and(4)Future of the Utility Industry.
Iv Pilot Program. General Manager Pandy reported on preliminary numbers of City
Natural Gas Supp . g as program. The gas supply
of Lansing customers who have signed up to participate in the BWL natural g ordered by the Michigan
service is being offered under provisions of a Plome�f Consumers Eneomer choice rgy. With
a couple of weeks
Public Service Commission for natural g program participation
remaining for customers to take advantage of the offer (by pricing methodologythodol appears
p elopedforthe various
will be a success. There was lengthy discussionarraned b eAMI Energy, Inc., a Traverse City natural gas
categories and delivery of the gas supply
broker with whom the BWL formed a strategic alliance for the duration of the customer choice pilot
program.
rogr m. General Manager Pandy presented an overview of the Twenty
High Volume Call Answering Syste -
First Century Communications high volume call answering system. The system will provide electronic
or other event.
rm
interface for BWL customers wishing00 catis report an
wpth calleruring a major o *itificat on feati.re.e system
has the capacity to handle 18. es were reviewed.
associated with the one-time set-up fee and monthly charges
ger Pandy updated on a major customer request for information
Utility Services Proposal. General Mana
availability. Interest on BWL utility service t has also been expressed by the customer on the possibility of
the BWL conveying real estate to them for plant construction purposes. A diagram of the proposed site
location was displayed. Mr. Pandy asked the Board for their input on the possible land sale. Discussion
followed on financial and human resource implications for the BWL to provide the services being
proposed.
Rules of Administrative Procedure. The City Attorneys Office has completed a review of the BWL
Rules of Procedure for approval as to form. A copy of an opinion rendered by the Deputy City Attorney
with regard to employing teleconference as a method to establish a quorum at meetings was handed out.
in the nsure
spirit
Safeguard procedures were suggested to berme rporatedRules now needuto be es to submitted toliance with the the City Clerk for
and intent of the Open Meetings Act.
transmission to the City Council for concurrence.
Board Minutes
February,23, 1999 Page 17
APPA Conferences. General Pandy advised that he will be attending the American Public Power
Association(APPA)chief executive roundtable on March 14-16 in Scottsdale, Arizona. 'Three topics to be
discussed are(1)Leading Organizations in Deregulated markets, (2)Determining Your Strategic Focus in
the Competitive Marketplace, and(3) Organizing for Competitive Advantage. Mr. Pandy encouraged the
Commissioners to consider attending the APPA National Conference to be held June 21-23 in Salt Lake City. Pre-conference seminars begin June 18-19.
Analytical Review. An analytical review of the Board of Water and Light (BWL) was presented by
Director of Metrics and Auditing Kellie Willson. A notebook with detailed information was previously
provided to each Commissioner for advance review. Graphs indicating key relationships and trends from
1986 through 1998. which point to the critical success factors were displayed indicating performance
results by the Electric Utility, Water Utility and the Steam Utility. BWL measures tracked included:
operational data. customer attitude data on reliability and power restoration, capacity factor. number of
employees, total compensation, overall satisfaction of our customers by utility, and how the BWL
compares with other utilities based on a benchmark survey conducted by Market Strategies,Inc.
Capital Expenditure Forecast. An update on strategies being explored to provide long-term financing
for capital investments to fund economic development projects and to finance major capital additions to
BWL facilities was presented by Chief Financial Officer Dana Touslev. Preliminary numbers for potential
bond issues were reviewed along with financing alternatives for proposed projects using tax-exempt bonds
and taxable bonds.
REMARKS BY COMMISSIONERS
Commissioner Christian welcomed newly appointed Commissioner Mark Murray to the Board.
PUBLIC COMMENTS
THE CHAIR 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
There«vere no absences.
ADJOURNMENT
There being no further business, the meeting adjourned at 7:15 p.m.
/slMaryE. Sova, Secretary
Filed. march 1, 1999
Marilynn Slade, City Clerk
12:20 MAR 01, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #66314 PAGE 2/5
Page 14
MINUTES OF BOARD OF COMMISSIONERS' MEETING,;-
LANSING BOARD OF WATER AND LIGHT ' ''' _ E �'� 21
Tuesday,February 23,1999 L�'��S''91"' CITY CLEIRK
The Board of Commissioners met in regular session at 5:30 p.m., in the Administration Building, 1232
Haco Drive,Lansing,Michigan. The meeting was called to order by the Chair,Diane Royal.
Present: Commissioners Rosemarie Aqu ilina,Ronald Callen,Ernest Christian, Charles Creamer,Mark
Murray,David O'Leary,Diane Royal and Judson Werbelow.
Absent: None
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner Christian, seconded by Commissioner Aquilina, to approve the
minutes of regular session held January 26, 1999.
Carried 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.
Tom Stanton, 216 Huron Street, Lansing, spoke on the recent BWL Integrated Resource Plan and
encouraged the Board to provide a demand-side-management (DSM) resource acquisition program and
renewable energy services. He advised that Urban Options and the Michigan Environmental Council
stand ready to assist in improving the environment and seeing renewable energy come into the picture in
Lansing.
COMMUNICATIONS
Letter from the NAACP, Lansing Branch, Economic Development Committee, requesting purchasing
data for the last fiscal year relative to women and minority suppliers.
Referred to management for reply with data requested and a report back to the Board at the next regular
meeting.
12:21 MAR 01, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #66314 PAGE: 3/5
Board Minutes Page 15
D
February 23, 1999
REPORTS OF COMMITTEES
No reports from committees.
GENERAL MANAGER'S RECOMMENDATIONS
(Background material on the item below may be obtained from the Secretary.)
#99-2-1
A. USE OF SPECIAL COUNSEL
RESOLVED,that the General Manager be authorized to retain the following law firms as special counsel
on an as-needed basis for a period of two years from February 17, 1999 to February 17, 2001. These firms
will provide advice and services as needed in the areas of public finance,municipal law,general litigation,
real estate, energy, environmental and employment law_ These firms will be submitted to the City
Attorney and upon his recommendation to City Council for approval. Use of Special Counsel is subject to
the recommendation of Staff Counsel and the approval of the General Manager.
• Canady Law Offices
• Clark,Hill
• Dickinson,Wright
• Foster, Swift, Collins&Smith
• Howard&Howard
• Melvin McWilliams Associates
• Willingham&Cote'
Requests for Qualifications were solicited by pubic advertisement and direct mail notice. Thirteen firms
submitted proposals. Each firm proposal was reviewed, analyzed and compared with other proposals.
These firms were selected with due regard to community reputation, particularized expertise, proposed
legal fees,and diversity. A bid comparison tabulation was provided.
Motion by Commissioner Christian, seconded by Commissioner AquiIina to adopt the resolution.
Discussion: Staff answered questions on the expertise of each firm, the selection processed used, and the
amount of legal fees paid over the past four years with an overview of the major cases. Commissioner
Callen requested a copy of the tabulation form showing the results and experience factors.
Action: Adopted by the following vote:
Yeas: Aquilina,Callen, Christian, Creamer,Murray, O'Leary,Royal-7
Nays: None
Abstentions: Werbelow
Commissioner Werbelow neither participated in the discussion nor voted on the issue.
12:21 MAR 01, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 466314 PAGE: 4/5
Page 16 Board Minutes
February 23, 1999
UNFMSHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
Board Retreat. The agenda for the Board retreat set for February 24 was slightly modified to allow time
to discuss the future of the electric utility industry and deregulation issues. Topics include: (1) Ancillary
Services, (2)Business Strategies and Policies,(3)Return on Equity,and(4)Future of the Utility Industry.
Natural Gas Supply Pilot Program. General Manager Pandy reported on preliminary numbers of City
of Lansing customers who have signed up to participate in the BWL natural gas program. The gas supply
service is being offered under provisions of a pilot customer choice program ordered by the Michigan
Public Service Commission for natural gas customers of Consumers Energy. With a couple of weeks
remaining for customers to take advantage of the offer (by March 15) it appears program participation
will be a success. There was lengthy discussion on the pricing methodology developed for the various
categories and delivery of the gas supply arranged by AMI Energy, Inc., a Traverse City natural gas
broker with whom the BWL formed a strategic alliance for the duration of the customer choice pilot
program.
High Volume Call Answering System. General Manager Pandy presented an overview of the Twenty-
First Century Communications high volume call answering system. The system will provide electronic
interface for BWL customers wishing to report an outage during a major storm or other event. The system
has the capacity to handle 18,000 calls simultaneously with a caller identification feature. Costs
associated with the one-time set-up fee and monthly charges were reviewed.
Utility Services Proposal. General Manager Pandy updated on a major customer request for information
on BWL utility service availability. Interest has also been expressed by the customer on the possibility of
the BWL conveying real estate to them for plant construction purposes. A diagram of the proposed site
location was displayed_ Mr. Pandy asked the Board for their input on the possible land sale. Discussion
followed on financial and human resource implications for the BWL to provide the services being
proposed.
Rules of Administrative Procedure. The City Attorney's Office has completed a review of the BWL
Rules of Procedure for approval as to form. A copy of an opinion rendered by the Deputy City Attorney
with regard to employing teleconference as a method to est,*lish a quonim at meetings was handed out.
Safeguard procedures were suggested to be incorporated in the Rules to ensure compliance with the spirit
and intent of the Open Meetings Act. The Rules now need to be submitted to the City Clerk for
transmission to the City Council for concurrence.
12:22 MAR 01, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *66314 PAGE: 5/5
Board Minutes Page 17
February 23,1999
APPA Conferences. General Pandy advised that he will be attending the American Public Power
Association(APPA)chief executive roundtable on March 14-16 in Scottsdale,Arizona. Three topics to be
discussed are(1)Leading Organizations in Deregulated markets,(2)Determining Your Strategic Focus in
the Competitive Marketplace,and(3)Organizing for Competitive Advantage. Mr. Pandy encouraged the
Commissioners to consider attending the APPA National Conference to be held June 21-23 in Salt Lake
City. Pre-conference seminars begin June 18-19.
Analytical Review. An analytical review of the Board of Water and Light (BWL) was presented by
Director of Metrics and Auditing Kellie Willson. A notebook with detailed information was previously
provided to each Commissioner for advance review. Graphs indicating key relationships and trends from
1986 through 1998, which point to the critical success factors were displayed indicating performance
results by the Electric Utility, Water Utility and the Steam Utility. BWL measures tracked included:
operational data, customer attitude data on reliability and power restoration, capacity- factor, number of
employees, total compensation, overall satisfaction of our customers by utility, and how the BWL
compares with other utilities based on a benchmark survey conducted by Market Strategies,Inc.
Capital Expenditure Forecast. An update on strategies being explored to provide Iong-term financing
for capital investments to fund economic development projects and to finance major capital additions to
BWL facilities was presented by Chief Financial Officer Dana TousIey. Preliminary numbers for potential
bond issues were reviewed along with financing alternatives for proposed projects using tax-exempt bonds
and taxable bonds.
REMARKS BY COMMISSIONERS
Commissioner Christian welcomed newly appointed Commissioner Mark Murray to the Board.
PUBLIC COMMENTS
THE CHAIR 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
There were no absences.
ADJOURNMENT
There being no further business,the meeting adjourned at 7:15 p.m.
/s1 Mary E. Sava, Secretary
Filed. March 1, 1999
Marilynn Slade,City Clerk
Page 1
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,January 26, 1999
The Board of Commissioners met in regular session at 5:30 p.m., in the Administration Building, 1232
Haco Drive, Lansing,Michigan. The meeting was called to order by the Chair,Diane Royal.
Present: Commissioners Aquilina, Christian. Creamer,O'Leary, Royal and Werbelow(by speakerphone).
Absent: Commissioner Callen. r--
The Secretary declared a quorum present.
-=7
APPROVAL OF MINUTES _i
F-
M
Motion was made by Commissioner O'Leary, seconded by Commissioner Christian,to approvaAe c=
minutes of regular session held December 15, 1998.
Carried 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.
Christine Parker. 6301 Lerner Way. Lansing 489 1 1-6006, asked the Board seven questions with regard
to the BWL's preparations for the Year 2000(Y2K).
1. How many computer systems do you have in your inventory?
2. How many of these systems do you consider mission critical?
3. What criteria did you use to determine which systems were mission critical and which were not?
4. How many of your mission critical systems are currently Y2K ready?
5. What are vour critical Y2K milestones for each of your major systems?
6. Have you identified, contacted and heard back from your critical vendors and other suppliers?
7. Do you have any written contingency plans?
General Manager Pandy gave an overview of the BWL's Y2K readiness program in place for utility
production and distribution facilities to ensure that systems and customer service operations will function
with minimal disruptions through the year 2000 date change_ Mr. Pandy told Ms. Parker that a written
response to the questions raised would be sent to her.
COMMUNICATIONS
No communications.
Board Minutes Page 2
January 26, 1999
REPORTS OF COMMITTEES
#99-1-1
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met January 13, 1999,to review the Board of Water and Light's(BWL)
long-term financial forecast.
Present were Commissioners Aquilina, Callen, Creamer, Christian O'Leary,Royal and Werbelow(via
speakerphone).
Chair Pro Tern
By unanimous consent, Commissioner Aquilina was appointed Chair Pro Tem for the balance of this
current fiscal year,filling the vacancy created by the resignation.of Peter Pratt.
Long-Term Financing
General Manager Pandy reported on strategies being explored to provide financing for short-term and
long-term capital investments to fund economic development projects and finance major capital additions
to BWL production and distribution facilities. While the financial picture is bright for the BWL,customer
demands for investment is expected to increase and a plan must be developed to meet those needs. To set
the stage for borrowing, a short-term solution is proposed to cover any cash shortage with short-term debt
and to position the BWL for the long-term solution of issuing revenue bonds in fiscal year 2000. A
summary was presented of planned capital projects scheduled within the next several years,projected
revenue requirements for 1999-2003,financial ratios related to debt,BWL outstanding debt and other
credit facilities.and the BWL's rate increase history. Following discussion, there was consensus to
proceed with seeking the advice of bond counsel and a financial advisor on legal requirements associated
with issuing revenue bonds. The Board plans to discuss policy matters associated with public and private
projects to be financed through revenue bonds at its retreat on February 24.
Electric Green Pricing Program
The results of Market Strategies' special report regarding customer opinions on environmental issues and
using renewable resources to generate electricity was distributed for information. General Manager Pandy
presented an overview of the results which indicate an above average concern in environmental issues and
interest in renewable resources. An action plan to begin the process of developing a BWL green pricing
program involves a request for proposal(RFP)for the purchase of one(1)to five(5)megawatts(MW)of
renewable energy. The RFP will be reviewed with interested environmental groups for input prior to
issuing it to bidders. Plans call for proposals to be received by March 1.
Power Outage
General Manager Pandy reported on the weather-related power outage of January 5,caused by a cable
failure. Action has been taken to correct the problem involving a static line that failed due io arcing.
Rose Aquilina, Chair Pro Tern
COMMITTEE OF THE WHOLE
There being no objections, the Committee of the Whole Report was adopted as received.
Board Minutes
Page 3 January 26, 1999
GENERAL MANAGER'S RECOMMENDATIONS
(Background material on each of the items below may be obtained from the Secretary.)
The following items were recommended for approval:
#99-1-2
A. TREE TRIMMING CONTRACT
RESOLVED,That the Board of Water and Light be authorized to er into aarch c1Antr 19acttfor lineugh December
clearance
tree trimming with Nelson Tree Service, Inc.,for the three year period
31. 2001.as per specifications detailed in the document"Contract and Specification for Trimming of
Trees and Related Work Along Electric Lines Owned and Maintained by the Board of Water and Light
dated January 15, 1993".
In this contract.BWL pays on an hourly basis for labor and equipment as authorized. At our present level
of line clearance work, six crews are authorized at an estimated cost of$800-$900 thousand per year.
Reasons for this recommendation include:
Nelson crews have six(6)years. having won the 1993 contract on a competitive bid.
Relations with BWL customers and clean-up have been exceptional.
Equipment and safety record have been well maintained.
Proposed rates are competitive and lower than similar services retained by other midwest
utilities.
(Director of Delivery David Emmons' memo of January 6, 1999,and attachments provide detailed
analyses on this recommendation).
nded by Commissioner O'Leary,to adopt the resolution.
Motion by Commissioner Creamer, seco
tion
Discussion: General Manager Pandy summarizedS taffccj Inefi�el on) Heon in pnoted that irt of the n199 Nelson
to approve a three-year alliance with Nelson toeing athree-year puce protection. Tree trimming
agreed to freeze their rates over 1995 pricing, guaran
rate comparisons for utilities in Michigan and other national utilities were reviewed.
Action: Following discussion, the motion was carried unanimously.
#99-1-3
#9 PRICING METHODOLOGY FOR NATURAL GAS
B.
RESOLVED,That the Manager of Fuels Procurement(Brian McLeod)and the Manager of Marketing
(Mark Taylor).in conjunction with the Chief er�to BWL customcial Officer ers under the Co Tousley),be nsumers Energy Gas establish to
BWL Pricing Methodology for natural g
Customer Choice Pilot Program.
Motion by Commissioner Aquilim seconded by Commissioner O'Leary,to adopt the resolution.
Board Minutes
January 26, 1999 Page 4
Discussion: A lengthy question and answer period followed regarding customer participation in the Gas
Customer Choice Pilot Program. Commissioner Werbelow requested that the resolution be amended so as
to set guidelines indicating the target to be used by staff in establishing the pricing methodology.
Motion to amend by Commissioner Werbelow, seconded by Commissioner Creamer, to amend the
resolution by inserting the following words at the end of the resolution after Program. "THE GUIDELINE
FOR PRICING SHALL BE COMPETITIVE WITH OTHER NATU LU GAS SUPPLIERS TO THE BENEFIT OF BWL
CUSTOMERS. PRICING SHALL NOT BE LOWER THAN THE OVERALL COST FOR THE TRANSACTION.
Action: There being no objection, the motion to amend the resolution carried unanimously.
The question being on the adoption of the resolution as amended.
Action: Carried unanimously.
#99-1-4
C. NEW ELECTRIC RATE SCHEDULES
RESOLVED, That the following electric rate schedules be adopted and applied to all electricity used or
services rendered on or after February 1 1999. These rate schedules were the subject.
of a Public Hearing
on December 15, 1998. (New rate schedules are also attached).
Rate 9 Outdoor Lighting Service(Sheet No. EB 13 &EB 14)
Rate 31 Street Lighting Service-Board Owned(Sheet No. EB 18&EB 19)
Rate 32 Street Lighting Service-Customer Owned(Sheet No. EB23 &EB24)
Energy Cost Adjustment(Sheet No. EB27
RESOLVED FURTHER- That the following electric rate schedules now in effect be rescinded for billing
purposes for any electricity or services rendered on or after February 1, 1999.
Rate 9 Outdoor Lighting Service Effective Date
Rate 31 Street Lighting Service-Board Owned 01-01-97
01-01-97
Rate 32 Street Lighting Service-Customer Owned
01-01-97
Energy Cost Adjustment
01-01-97
Motion by Commissioner Christian, seconded by Commissioner Aquilina to adopt the resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
Page 5 Board Minutes
January 26, 1999
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
General Manager Pandy reported on the following items:
State of Michigan Chilled Water Service Proposal. A meeting was held with Duane Berger,Deputy
Director of the State's Department of Management and Budget,and Sam Eyde,developer of the Civic
Center, on January 21, 1999, regarding their interest in chilled water servico from the BWL. A
preliminary proposal is being prepared by BWL Marketing staff for further discussion. The subject of
chilled water service was first discussed with the State in 1991-92.
Separate Water Meters for Outdoor Sprinkling. Information on the possibility of reinstating the"split
water meter program" for City of Lansing customers has been provided to the City for consideration. The
documentation to the City includes reasoning as to why the BWL advocates amending Chapter 1042
(Sewer Rates and Charges)of the Lansing Code of Ordinances. Currently 550 customers are on the split
water meter program who were grandfathered in when the City instructed the BWL to halt the program in
1994.
Letter of Appreciation. A letter of thanks was received from Carole Lyman, the pastor of the University
United Methodist Church. East Lansing,expressing appreciation for exceptional service provided by Beth
Chenoweth, Customer Service Supervisor,during the January 5, 1999,power outage.
Customer Attitude Survey. Communications Director John Strickler provided an overview of key
findings of the November 1998 BWL customer attitude survey performed by Market Strategies, Inc.
(MSI). Results indicate that performance has remained steady over the last three surveys. Highlights of
responses were reviewed for overall satisfaction,value, favorability,and customer loyalty and retention.
Mr. Strickler noted that the findings were surprisingly positive given our main office building relocation
and construction activities that had been going on over the past six months. The office building
disruption led to closing down the Customer Service Center on Ottawa Street and setting up a temporary
Service Center on Grand Avenue. It was also disruptive to BWL employees who were working in difficult
situations.
APPA Annual Rate Survey. General Manager Pandy gave an overview of the American Public Power
Association's (APPA)annual survey of rates for Michigan,based on 1997 data. The survey includes
electric rate information for municipals,cooperatives and investor-owned utilities. In general BWL rates
are competitive with large utilities in Michigan.
Board Retreat. General Manager Pandy reviewed preliminary agenda topics for the Board retreat to be
held February 24 at the University Club from 12 noon to 5:00 p.m. Preliminary topics include: BWL
analytical review, proposed services to General Motors, financial planning,electric deregulation
strategies, and Board policies. The Commissioners were asked to submit their feedback to Mr.Pandy
within the next week in preparation for the retreat.
Board Minutes Page 6
January 26, 1999
REMARKS BY COMMISSIONERS
There were no remarks.
PUBLIC COMMENTS
THE CHAIR 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
Motion by Commissioner Christian. seconded by Commissioner Aquilina, that the absence of
Commissioner Callen be excused.
Action: Carried unanimously.
ADJOURNMENT
There being no further business, the meeting adjourned at 6:21 p.m.
A OM
/s/Mary E. va, Secretary
Filed: January 29, 1999
Marilynn Slade. City Clerk
Page 7 Board Minutes
January 26, 1999
3rd Revised Sheet No. EB13
OUTDOOR LIGHTING SERVICE
RATE NO. 9
Availabilitv-This rate is available to any customer located within the Board of Water and Light(BWL)
service area for dusk to dawn lighting of customer's premises. The BWL furnishes and maintains all
lights. The installation will overhang private property from existing or new poles set at points accessible
to BWL construction and maintenance equipment. This rate is not available for purposes of street,
highway,or public thoroughfare lighting.
Monthlv Rate-Shall be computed in accordance with the following charges.
Luminaires on Overhead Mast Arm on existing BWL poles
High Pressure Sodium
100 W $ 8.15
250 W $13.75
400 W $14.70
Mercury Vapors
175 W $ 8.55
400 W $14.70
Floodlighting Luminaires on Bracket Arm on existing BWL poles
High Pressure Sodium
100 W $11.65
250 W $14.60
400 W $17.10
Metal Halide
400W $21.25
1000 W $36.75
1500W $51.00
In the event additional facilities or rearrangement of existing facilities is required, the BWL shall install,
operate and maintain such facilities for the following monthly charges.
Type of Facilities
35-foot wood poles including span of overhead secondary extension $4.75 per pole
37-foot concrete pole including span of overhead secondary extension $11.30 per pole
Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of est. cost
Adopted: 1/26/99 Effective: 2/1/99
1 Rates apply to existing luminaires only and are not open to new business.
Board Minutes Page 8
January 26, 1999
3rd Revised Sheet No. EB 14
OUTDOOR LIGHTING SERVICE
RATE NO. 9
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.
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.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Service Contract-A written service agreement shall be entered into to take BWL service for a term of
nears determined as follows:
(a) One year, if additional facilities are not required. or
(b) Three years, if additional facilities are required;
(c) Five years.for metal halide lamps or if monthly charges calculated at 1.67%of estimated cost;
and
(d) Ten years,if special contractual arrangements are made.
In the event the customer discontinues service before the end of the agreement term, the established rate
for the remaining portion of the agreement shall immediately become due and payable. The BWL will
replace lamps or make repairs when practicable after the customer has reported that the installation
requires servicing. Such replacements and repairs will be made during regular working hours. The BWL
may refuse or restrict the service provided in this rate to seasonal type customers and/or may require such
customers to pay for the service annually in advance where the permanency of the customer is doubtful or
has not been demonstrated by the customer. If relocation, including adjustment, of the outdoor protective
light or relocation of other facilities used in connection with the light is desired by the customer during
the term of the contract,the BWL will provide this service, if feasible, at the customer's expense.
Adopted: 1/26/99 Effective: 2/1/99
Page 9 Board Minutes
January 26, 1999
3rd Revised Sheet No. EB18
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO.31
Availabilitv -Available to any political subdivision or agency of the State of Michigan for street lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution
system with secondary voltage available. Luminaires may be installed with no limitations as to spacing
between luminaires. Where an overhead line extension is required to serve one or more luminaires,the
BWL will furnish 350 linear feet of line extension per luminaire served from such extension. A special
agreement will be required if more than 350 linear feet of line extension per luminaire is required.
Nature of Service-The BWL will famish, install, own, operate,and maintain all equipment comprising
the street lighting system and sapply the unrnetered energy. The BWL reserves the right to furnish
service from either a series or multiple system or both.
Annual Rate-The annual rate per luminaire with fixture and setting, payable in twelve(12)monthly
installments, shall be as follows,
High Pressure Sodium Lnmmaire
70 W S 62.00
100 W S 71.00
150 W S 81.00
250 W $100.00
400 W $128.00
1000W $259.00
Mercury Vapor Luminaire2
100 W S 67.00
175 W S 79.00
250 W S 93.00
400 W $120.00
1000 W $227.00
Metal Halide Luminaire
175W $138.00
250:zJ S 161.00
40OW $159.00
1000W $312.00
150OW $477.00
Induction Luminaire
85 W $67.00
165W $80.00
Adopted: 1/26/99 Effective: 2/1/99
2 Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the
customer's request,to install additional luminaires within an area already served by a mercury vapor lighting
system.
Board Minutes Page 10
January 26, 1999
3rd Revised Sheet No. EB19
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO.31
Annual Rate(continued)
plus an additional annual charge,depending on type of installation,of:
Wood Pole-Overhead Service None
Wood Pole-Underground Service $ 73.00
Concrete Pole-Overhead Service $113.00
Concrete Pole-Underground Service $113.00
Post Top $ 73.00
Historic -Single Top $235.00
Large Historic-Dual Top $688.00
Small Historic-Dual Top $490.00
Wall/Tunnel -8760 hours $100.00
Wall/Tunnel-4200 hours $ 60.00
Bollard $233.00
Customer Contribution-The annual rates are based on fixtures normally stocked by the BWL,and
installed utilizing normal construction techniques. The BWL may, at its option, upon customer request
install a street lighting system not covered by the rates below. The customer,after installation,will be
required to make a one time contribution equal to the difference between the actual installed cost and the
BWL estimated installed cost of a standard installation. The annual unit charge for each luminaire will
then be as stated below.
Unit Replacement-The BWL may,at its option,upon customer request replace existing street light
units. After installation, the customer shall make a one time contribution equal to the undepreciated value
of the unit plus the cost of removal.
Special Terms and Conditions -The BWL reserves the right to make special contractual arrangements
as to termination charges.contributions in aid of construction, term or other special considerations when
the customer requests service,equipment or facilities not normally provided under this rate.
Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political
suMb ivision 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.
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.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: 1/26/99 Effective: 2/1/99
Page 11 Board Minutes
January 26, 1999
3rd Revised Sheet No. EB23
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO.32
Availabilitv- Available to any political subdivision or agency of the State of Michigan for street lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution
system available.
Nature of Service-The BWL will connect the customer's equipment to BWL lines,furnish the control
equipment, supply the unmetered energy, control the burning hours of the lamps, provide normal
replacement of luminaire refractors, control devices and lamps. The customer will furnish, install and
own all equipment comprising the street lighting system,including, but not limited to the overhead wires
or underground cables between luminaires and the supply circuits extending to the point of attachment
with the BWL. All maintenance and replacement of the customer's equipment except normal lamp and
glass replacement shall be paid by the customer. The BWL reserves the right to furnish service from
either a series or multiple system or both.
Annual Rate-The annual rate per luminaire, payable in twelve(12)monthly installments, shall be as
follows:
High Pressure Sodium Luminaire
70 W $ 32.00
100 W $ 42.00
150 W $ 51.00
250 W $ 70.00
400 W $ 98.00
1000W $231.00
Mercury Vapor Luminaire3
175 W $ 47.00
250 W $ 63.00
400 W $ 89.00
1000 W $197.00
Incandescent Luminaire4
2500 L $ 66.00
4000 L $105.00
6000 L $127.00
Maintenance Charge-The actual labor, material,miscellaneous and indirect charges experienced
maintaining street light units during the preceding month.
Combined Rates-The annual rate for units consisting of more than one luminaire shall be the appropriate
combination of individual unit charges above.
Adopted: 1/26/99 Effective: 2/l/99
3 Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the
customer's request,to install additional luminaires within an area already served by a mercury vapor lighting
system.
4 Rates apply to existing luminaires only and are not open to new business.
Board Minutes Page 12
January 26, 1999
Original Sheet No. EB24
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO. 32
Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements
as to termination charges.contributions in aid of construction, term or other special considerations when
the customer requests service,equipment or facilities not normally provided under this rate.
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 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.
Delaved Payment Chary -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.
Rules and Regulations-Senzce under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: 1/26/99 Effective: 2/1/99
Page 13 Board Minutes
January 26, 1999
2nd Revised Sheet No.EB27
ENERGY COST ADJUSTMENT
The Energy Cost Adjustment permits the monthly adjustment of rates for the costs of energy incurred in
supplying electricity to retail customers. All residential and general service rates are subject to the Energy
Cost Adjustment. In applying the Energy Cost Adjustment the applicable rate per kWh shall be increased
or decreased by the amount of the current Energy Cost Adjustment. The following definitions and
procedures will be followed in calculating the monthly Energy Cost Adjustment.
Definitions
Energy Cost Adjustment-the amount per kWh by which the applicable rates shall be adjusted for billing
in each month.
Energy Costs-those costs incurred in supplying retail electricity. Such costs include fuel burned,energy
costs associated with firm power purchases, net interchange power costs,and costs associated with other
temporary power transactions. The cost of fuel burned shall include the delivered cost of fuel(base cost,
escalations,premiums/penalties,transportation,demurrage), outside lab fees and other outside costs
related to fuel procurement, and fuel additives such as freeze proofing.
Over/Under Recovery-the difference between actual Energy Costs for prior months and the amount of
energy cost recovered by means of the Base Cost of Energy and the Energy Cost Adjustment. The
Over/Under Recovery shall be added to the Energy Costs for purposes of computing the Energy Cost
Adjustment for each month.
Base Cost of Energy-the average Energy Cost included in the energy rates of the various rate schedules.
Such amount shall not be recovered by means of the Energy Cost Adjustment. The current Base Cost of
Energy is$0.017921 per kWh sold.
Procedures
Estimated Energy Cost shall be projected for a twelve-month period. Any amount of Over/Under
Recovery(positive or negative)shall be added to the Energy Cost to determine the total cost basis for the
Energy Cost Adjustment. The total cost basis shall be divided by the projected total retail billed sales for
the twelve-month period resulting in the average energy cost per kWh. The Base Cost of Energy shall be
subtracted from the average energy cost to result in the Energy Cost Adjustment.
The Energy Cost Adjustment shall be reviewed and,as necessary, revised periodically in accordance with
the provisions of this schedule,but not less frequently than every twelve months.
Effective February 2, 1999,through February 2,2003,the Energy Cost Adjustment(ECA)is frozen at
$0.001000 per kWh. Thus,the total cost of fuel and purchased power charged to customers is set at
$0.018921 per kWh(Base 0.017921 +ECA 0.001000).
Adopted: 1/26/99 Effective: 2/l/99
16:02 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #65556 PAGE 2/14
Page I
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,January 26, 1999
The Board of Commissioners met in regular session at 5:30 p.m.,in the Administration Building, 1232
Haco Drive,Lansing,Michigan. The meeting was called to order by the Chair,Diane Royal.
Present: Commissioners Aquilina; Christian, Creamer,O'Leary,Royal and Werbelow(by speakerphone).
Absent: Commissioner Callen.
The Secretary declared a quorum present.
APPROVAL OF MINUTES
Motion was made by Commissioner O'Leary,seconded by Commissioner Christian,to approve the
minutes of regular session held December 15, 1998-
Carried 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.
Christine Parker, 6301 Lerner Way, Lansing 48911-6006, asked the Board seven questions with regard
to the BWL's preparations for the Year 2000(Y2K).
1. How many computer systems do you have in your inventory?
2. How many of these systems do you consider mission critical?
3. What criteria did you use to determine which systems were mission critical and which were not?
4. How many of your mission critical systems are currently Y2K ready?
5. What are your critical Y2K milestones for each of your major systems?
6. Have you identified, contacted and heard back from your critical vendors and other suppliers?
7. Do you have any written contingency plans?
General Manager Pandy gave an overview of the BWL's Y2K readiness program in place for utility
production and distribution facilities to ensure that systems and customer service operations will function
with minimal disruptions through the year 2000 date change. Mr.Pandy told Ms.Parker that a written
response to the questions raised would be sent to her.
r—
COMMUNICATIONS
No communications.
c-�
rm
co
16:03 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #t65556 PAGE: 3/14
Board Minutes Page 2
January 26, I999
REPORTS OF COMMITTEES
#99-1-1
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met January 13, 1999,to review the Board of Water and Light's(BWL)
long-term financial forecast.
Present were Commissioners Aquilina, Callen,Creamer, Christian, O'Leary,Royal and Werbelow(aria
speakerphone).
Chair Pro Tem
By unanimous consent,Commissioner Aquilina was appointed Chair Pro Tem for the balance of this
current fiscal year,filling the vacancy created by the resignation of Peter Pratt
Long-Term Financing
General Manager Pandy reported on strategies being explored to provide financing for short-term and
long-term capital investments to fund economic development projects and finance major capital additions
to BWL production and distribution facilities. While the financial picture is bright for the BWL,customer
demands for investment is expected to increase and a plan must be developed to meet those needs. To set
the stage for borrowing,a short-term solution is proposed to cover any cash shortage with short-term debt
and to position the BWL for the long-term solution of issuing revenue bonds in fiscal year 2000. A
summary was presented of planned capital projects scheduled within the next several years,projected
revenue requirements for 1999-2003,financial ratios related to debt,BWL outstanding debt and other
credit facilities,and the BWL's rate increase history. Following discussion,there was consensus to
proceed with seeking the advice of bond counsel and a financial advisor on legal requirements associated
with issuing revenue bonds. The Board plans to discuss policy matters associated with public and private
projects to be financed through revenue bonds at its retreat on February 24.
Electric Green Pricing Program
The results of Market Strategies' special report regarding customer opinions on environmental issues and
using renewable resources to generate electricity was distributed for information. General Manager Pandy
presented an overview of the results which indicate an above average concern in environmental issues and
interest in renewable resources. An action plan to begin the process of developing a BWL green pricing
program involves a request for proposal(RFP)for the purchase of one(1)to five(5)megawatts(MW)of
renewable energy. The RFP will be reviewed with interested environmental groups for input prior to
issuing it to bidders. Plans call for proposals to be received by March 1.
Power Outage
General Manager Pandy reported on the weather-reIated power outage of January 5,caused by a cable
failure. Action has been taken to correct the problem involving a static line that failed due to arcing.
Rose Aquilina,Chair Pro Tem
COMMITTEE OF THE WHOLE
There being no objections,the Committee of the Whole Report was adopted as received.
16:03 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *65556 PAGE: 4/14
Page 3 Board Minutes
January 26,1999
GENERAL MANAGER'S RECOMMENDATIONS
(Background material on each of the items below may be obtained from the Secretary.)
The following items were recommended for approval:
#99-1-2
A. TREE TRIMMING CONTRACT
RESOLVED,That the Board of Water and Light be authorized to enter into a contract for line clearance
tree trimming with Nelson Tree Service, Inc.,for the three year period March 1, 1999 through December
31,2001,as per specifications detailed in the document"Contract and Specification for Trimming of
Trees and Related Work Along Electric Lines Owned and Maintained by the Board of Water and Light,
dated January 15, 1993".
In this contract,BWL pays on an hourly basis for labor and equipment as authorized. At our present level
of Iine clearance work, six crews are authorized at an estimated cost of$800-$900 thousand per year.
Reasons for this recommendation include:
-Nelson crews have six(6)years,having won the 1993 contract on a competitive bid.
-Relations with BWL customers and clean-up have been exceptional.
-Equipment and safety record have been well maintained.
-Proposed rates are competitive and lower than similar services retained by other
midwest utilities.
(Director of Delivery David Emmons' memo of January 6, 1999,and attachments provide detailed
analyses on this recommendation).
Motion by Commissioner Creamer,seconded by Commissioner O'Leary,to adopt the resolution.
Discussion: General Manager Pandy summarized staffs justification in support of the recommendation
to approve a three-year alliance with Nelson Tree Service,Inc. (Nelson). He noted that in 1996 Nelson
agreed to freeze their rates over 1995 pricing,guaranteeing a three-year price protection. Tree trimming
rate comparisons for utilities in Michigan and other national utilities were reviewed.
Action: Following discussion,the motion was carried unanimously.
#99-1-3
B. PRICING METHODOLOGY FOR NATURAL GAS
RESOLVED,That the Manager of Fuels Procurement(Brian McLeod)and the Manager of Marketing
(Mark Taylor),in conjunction with the Chief Financial Officer(Dana Tousley),be authorized to establish
BWL Pricing Methodology for natural gas offered to BWL customers under the Consumers Energy Gas
Customer Choice Pilot Program.
Motion by Commissioner Aquilina,seconded by Commissioner O'Leary,to adopt the resolution.
16:04 JRN 29, 1999 ID: BORRD OF WATER & LIG TEL NO: (517) 371-6203 #65556 PRGE: 5/14
Board Minutes Page 4
January 26,I999
Discussion: A lengthy question and answer period followed regarding customer participation in the Gas
Customer Choice Pilot Program. Commissioner WerbeIow requested that the resolution be amended so as
to set guidelines indicating the target to be used by staff in establishing the pricing methodology.
Motion to amend by Commissioner Werbelow,seconded by Commissioner Creamer,to amend the
resolution by inserting the following words at the end of the resolution after Program. "THE GUIDELINE
FOR PRICING SHALL BE COMPETITIVE WITH OTHER NATURAL GAS SUPPLIERS TO THE BENEFIT OF BWL
CUSTOMERS. PRICING SHALL NOT BE LOWER THAN THE OVERALL COST FOR THE TRANSACTION.
Action: There being no objection,the motion to amend the resolution carried unanimously.
The question being on the adoption of the resolution as amended.
Action: Carried unanimously.
#t99-1-4
C. NEW ELECTRIC RATE SCHEDULES
RESOLVED,That the following electric rate schedules be adopted and applied to all electricity used or
services rendered on or after February 1. 1999. These rate schedules were the subject of a Public Hearing
on December 15, 1998. (New rate schedules are also attached).
Rate 9 Outdoor Lighting Service(Sheet No.EB13&EB14)
Rate 31 Street Lighting Service-Board Owned(Sheet No.EB18&EB19)
Rate 32 Street Lighting Service-Customer Owned(Sheet No. EB23 &EB24)
Energy Cost Adjustment(Sheet No.EB27
RESOLVED FURTHER,That the following electric rate schedules now in effect be rescinded for billing
purposes for any electricity or services rendered on or after February 1, 1999.
Effective Date
Rate 9 Outdoor Lighting Service 01-01-97
Rate 31 Street Lighting Service-Board Owned 01-01-97
Rate 32 Street Lighting Service-Customer Owned 01-01-97
Energy Cost Adjustment 01-01-97
Motion by Commissioner Christian,seconded by Commissioner Aquiline to adopt the resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
16:05 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #65556 PAGE: 6/14
Page 5 Board Minutes
January 26, 1999
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
General Manager Pandy reported on the following items.-
State of Michigan Chilled Water Service Proposal. A meeting was held with Duane Berger,Deputy
Director of the State's Department of Management and Budget,and Sam Eyde, developer of the Civic
Center,on January 21, 1999, regarding their interest in chilled water service from the BWL. A
preliminary proposal is being prepared by BWL Marketing staff for further discussion. The subject of
chilled water service was first discussed with the State in 1991-92.
Separate Water Meters for Outdoor Sprinkling. Information on the possibility of reinstating the"split
water meter program"for City of Lansing customers has been provided to the City for consideration. The
documentation to the City includes reasoning as to why the BWL advocates amending Chapter 1042
(Sewer Rates and Charges)of the Lansing Code of Ordinances. Currently 550 customers are on the split
water meter program who were grandfathered in when the City instructed the BWL to halt the program in
1994.
Letter of Appreciation. A letter of thanks was received from Carole Lyman,the pastor of the University
United Methodist Church,East Lansing, expressing appreciation for exceptional service provided by Beth
Chenoweth,Customer Service Supervisor,during the January 5, 1999,power outage.
Customer Attitude Survey. Communications Director John Strickler provided an overview of key
findings of the November 1998 BWL customer attitude survey performed by Market Strategies,Inc.
(MSI). Results indicate that performance has remained steady over the last three surveys. Highlights of
responses were reviewed for overall satisfaction,value,favorability,and customer loyalty and retention.
Mr. Strickler noted that the findings were surprisingly positive given our main office building relocation
and construction activities that had been going on over the past six months. The office building
disruption led to closing down the Customer Service Center on Ottawa Street and setting up a temporary
Service Center on Grand Avenue. It was also disruptive to BWL employees who were working in difficult
situations.
APPA Annual Rate Survey. General Manager Pandy gave an overview of the American Public Power
Association's (APPA)annual survey of rates for Michigan,based on 1997 data. The swvey includes
electric rate information for municipals,cooperatives and investor-owned utilities. In general BWL rates
are competitive with large utilities in Michigan.
Board Retreat. General Manager Pandy reviewed preliminary agenda topics for the Board retreat to be
held February 24 at the University Club from 12 noon to 5:00 p.m. Preliminary topics include: BWL
analytical review,proposed services to General Motors,financial planning,electric deregulation
strategies,and Board policies. The Commissioners were asked to submit their feedback to Mr.Pandy
within the next week in preparation for the retreat.
16:05 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *65556 PAGE: 7/14
Board Minutes Page 6
January 26,1999
REMARKS BY COMMISSIONERS
There were no remarks.
PUBLIC COMMENTS
THE CHAIR 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
Motion by Commissioner Christian, seconded by Commissioner AquiIina,that the absence of
Commissioner Callen be excused.
Action: Carried unanimously.
ADJOURNMENT
There being no further business,the meeting adjourned at 6:21 p.m.
/s/R,fary E Sova, Secretary
Filed: January 29, 1999
Marilynn Slade,City Clerk
16:06 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 971-6209 #65556 PAGE: B/14
Page 7 Board Minutes
January 26,1999
3rd Revised Sheet No.EB 13
OUTDOOR LIGHTING SERVICE
RATE NO.9
Availability-This rate is available to any customer located within the Board of Water and Light(BWL)
service area for dusk to dawn lighting of customer's premises. The BWL furnishes and maintains all
lights. The installation will overhang private property from existing or new poles set at points accessible
to BWL construction and maintenance equipment. This rate is not available for purposes of street,
highway,or public thoroughfare lighting.
Monthly Rate-Shall be computed in accordance with the following charges.
Luminaires on Overhead Mast Arm on existing BWL poles
High Pressure Sodium
100 W $ 8.15
250 W $13.75
400 W $14.70
Mercury Vaporl
175 W $ 9.55
400 W $14.70
Floodlighting Luminaires on Bracket Arm on existing BWL poles
High Pressure Sodium
100 W $11.65
250 W $14.60
400 W $17.10
Metal Halide
40OW $21.25
1000 W $36.75
150OW $51.00
In the event additional facilities or rearrangement of existing facilities is required,the BWL shall install,
operate and maintain such facilities for the following monthly charges.
Type of Facilities
35-foot wood poles including span of overhead secondary extension $4.75 per pole
37-foot concrete pole including span of overhead secondary extension $11.30 per pole
Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of est.cost
Adopted: 1/26/99 Effective:2/1/99
1 Rates apply to existing Iuminaires only and are not open to new business.
16:06 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *95556 PAGE: 9/14
Board Minutes Page 9
January 26,I999
3rd Revised Sheet No. EB 14
OUTDOOR LIGHTING SERVICE
RATE NO.9
Tax Aduustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which Ievies 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.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any biII that is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Service Contract-A written service agreement shall be entered into to take BWL service for a term of
years determined as follows:
(a) One year,if additional facilities are not required,or
(b) Three years,if additional facilities are required;
(c) Five years,for metal halide lamps or if monthly charges calculated at 1.67%of estimated cost;
and
(d) Ten years,if special contractual arrangements are made.
In the event the customer discontinues service before the end of the agreement term,the established rate
for the remaining portion of the agreement shall immediately become due and payable. The BWL will
replace lamps or make repairs when practicable after the customer has reported that the installation
requires servicing. Such replacements and repairs will be made during regular working hours. The BWL
may refuse or restrict the service provided in this rate to seasonal type customers and/or may require such
customers to pay for the service annually in advance where the permanency of the customer is doubtful or
has not been demonstrated by the customer. If relocation,including adjustment,of the outdoor protective
light or relocation of other facilities used in connection with the light is desired by the customer during
the term of the contract,the BWL w'iIl provide this senzce,if feasible, at the customer's expense.
Adopted: 1/26/99 Effective: 2/1/99
16:07 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *65556 PAGE: 10/14
Page 9 Board Minutes
January 26, I999
3rd Revised Sheet No.EB18
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO.31
Availability-Available to any political subdivision or agency of the State of Michigan for sweet lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution
system with secondary voltage available. Luminaires may be installed with no limitations as to spacing
between luminaires. Where an overhead line extension is required to serve one or more luminaires,the
BWL will furnish 350 linear feet of line extension per luminaire served from such extension. A special
agreement will be required if more than 350 linear feet of line extension per luminaire is required.
Nature of Service-The BWL will furnish,install,own, operate,and maintain all equipment comprising
the street lighting system,and supply the unmetered energy. The BWL reserves the right to furnish
service from either a series or multiple system or both.
Annual Rate-The annual rate per luminaire with fixture and setting,payable in twelve(12)monthly
installments,shall be as follows;
High Pressure Sodium Luminaire
70 W $ 62.00
100 W $ 71.00
150 W $ 81.00
250 W $100.00
400 W $128.00
1000W $259.00
Mercury Vapor Luminaire2
100 W $ 67.00
175 W $ 79.00
250 W $ 93.00
400 W $120.00
1000 W $227.00
Metal Halide Luminaire
175W $138.00
250W $161.00
400W $159.00
1000W $312.00
150OW $477.00
Induction Luminaire
85W $67.00
165W $80.00
Adopted: 1/26/99 Effective:2/l/99
2 Rates apply to existing luminaires only and are not open to new business except where the BWL elects,at the
customer's request,to install additional luminaires within an area already served by a mercury vapor Ighting
sy�stem.
16:07 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #65556 PAGE: 11/14
Board Minutes Page 10
January 26,1999
3rd Revised Sheet No.EB19
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO. 31
Annual Rate(continued)
plus an additional annual charge,depending on type of installation,of:
Wood Pole-Overhead Service None
Wood Pole-Underground Service $ 73.00
Concrete Pole-Overhead Service $113.00
Concrete Pole-Underground Service $113.00
Post Top $ 73.00
Historic -Single Top $235.00
Large Historic-Dual Top $688.00
Small Historic-Dual Top $490.00
Wall/Tunnel-8760 hours $100.00
Wall/TunneI-4200 hours $ 60.00
Bollard $23 3.00
Customer Contribution-The annual rates are based on fixtures normally stocked by the BWL,and
installed utilizing normal construction techniques. The BWL may, at its option,upon customer request
install a street lighting system not covered by the rates below. The customer,after installation,will be
required to make a one time contribution equal to the difference between the actual installed cost and the
BWL estimated installed cost of a standard installation. The annual unit charge for each Iuminaire will
then be as stated below.
Unit Replacement-The BWL may,at its option,upon customer request replace existing street light
units. After installation,the customer shall make a one time contribution equal to the undepreciated value
of the unit plus the cost of removal.
Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements
as to termination charges, contributions in aid of constriction,term or other special considerations when
the customer requests service,equipment or facilities not normally provided under this rate.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which Ievies 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.
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.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: 1/26/99 Effective:2/1/99
16:08 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 *65556 PAGE: 12/14
Page I 1 Board Minutes
January 26, I999
3rd Revised Sheet No. EB23
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO.32
Availability-Available to any political subdivision or agency of the State of Michigan for street lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution
system available.
Nature of Service-The BWL will connect the customer's equipment to BWL lines,furnish the control
equipment,supply the unmetered energy,control the burning hours of the lamps,provide normal
replacement of luminaire refractors,control devices and lamps. The customer will furnish,install and
own all equipment comprising the street lighting system,including,but not limited to the overhead wires
or underground cables between Iuminaires and the supply circuits extending to the point of attachment
with the BWL. All maintenance and replacement of the customer's equipment except normal lamp and
glass replacement shall be paid by the customer. The BWL reserves the right to furnish service from
either a series or multiple system or both.
Annual Rate-The annual rate per luminaire,payable in twelve(12)monthly installments,shall be as
follows:
High Pressure Sodium Luminaire
70 W $ 32.00
100 W $ 42.00
150 W $ .51.00
250 W $ 70.00
400 W $ 98.00
1000W $231.00
Mercury Vapor Luminaire3
175 W $ 47.00
250 W $ 63.00
400 W $ 89.00
1000 W $197.00
Incandescent Luminaire4
2500 L $ 66.00
4000 L $105.00
6000 L $127.00
Maintenance Charge-The actual labor,material;miscellaneous and indirect charges experienced
maintaining street light units during the preceding month.
Combined Rates-The annual rate for units consisting of more than one luminaire shall be the appropriate
combination of individual unit charges above.
Adopted: 1/26/99 Effective:2/1/99
3 Rates apply to existing Iuminaires only and are not open to new business except where the BWL elects,at the
customer's request,to install additional luminaires within an area already served by a mercury vapor lighting
system.
4 Rates apply to existing luminaires only and are not open to new business.
16:08 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 #65556 PAGE: 13/14
Board Minutes Page 12
January 26,I999
Original Sheet No.EB24
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO. 32
Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements
as to termination charges,contributions in aid of construction,term or other special considerations when
the customer requests service,equipment or facilities not normally provided under this rate.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which Ievies 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_
Detaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any biII that is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: 1/26/99 Effective:2/l/99
16:09 JAN 29, 1999 ID: BOARD OF WATER & LIG TEL NO: (517) 371-6203 465556 PAGE: 14/14
Board Minutes
Page I3
January 26,1999
2nd Revised Sheet No_EB27
ENERGY COST ADJUSTMENT
The Energy Cost Adjustment permits the monthly adjustment of rates for the costs of energy incurred in
supplying electricity to retail customers. All residential and general service rates are subject to the Energy
Cost Adjustment. In applying the Energy Cost Adjustment the applicable rate per kWh shall be increased
or decreased by the amount of the current Energy Cost Adjustment. The following definitions and
procedures will be followed in calculating the monthly Energy Cost Adjustment.
Definitions
Energy Cost Adjustment-the amount per kWh by which the applicable rates shall be adjusted for billing
in each month.
Energy Costs-those costs incurred in supplying retail electricity. Such costs include fuel burned,energy
costs associated with firm power purchases,net interchange power costs,and costs associated with other
temporary power transactions. The cost of fuel burned shall include the delivered cost of fuel(base cost,
escalations,premiums/penalties,transportation,demurrage),outside lab fees and other outside costs
related to fuel procurement,and fuel additives such as freeze proofing.
Over/Under Recovery-the difference between actual Energy Costs for prior months and the amount of
energy cost recovered by means of the Base Cost of Energy and the Energy Cost Adjustment. The
Over/Under Recovery shall be added to the Energy Costs for purposes of computing the Energy Cost
Adjustment for each month.
Base Cost of Energy-the average Energy Cost included in the energy rates of the various rate schedules.
Such amount shall not be recovered by means of the Energy Cost Adjustment. The current Base Cost of
Energy is$0.017921 per kWh sold.
Procedures
Estimated Energy Cost shall be projected for a twelve-month period. Any amount of Over/Under
Recovery(positive or negative)shall be added to the Energy Cost to determine the total cost basis for the
Energy Cost Adjustment. The total cost basis shall be divided by the projected total retail billed sales for
the twelve-month period resulting in the average energy cost per kWh. The Base Cost of Energy shall be
subtracted from the average energy cost to result in the Energy Cost Adjustment.
The Energy Cost Adjustment shall be reviewed and,as necessary,revised periodically in accordance vNith
the provisions of this schedule,but not less frequently than every twelve months.
Effective February 2, 1999,through February 2,2003,the Energy Cost Adjustment(ECA)is frozen at
$0.001000 per kWh. Thus,the total cost of fuel and purchased power charged to customers is set at.
$0.018921 per kWh(Base 0.017921 +ECA 0.001000).
Adopted: 1/26/99 Effective:2/l/99