HomeMy WebLinkAbout2008 Minutes BWL 1 Approved by the Board: January 27, 2009
MINUTES OF iTHE BOARD OF COMMISSIONERS' RESCHEDULED MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, November 18, 2008
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco
Drive, Lansing, Michigan.
Present: Commissioners Robert Cochran(teleconference), Tony DeLuca, Semone James, Peter
Kramer, Tracy Thomas and Sandra Zerkle.
Absent: Commissioners Frank Lain and Julee Rodocker.
The Secretary declared a quorum present.
Acting Chairperson Zerkle called the meeting to order at 5:35 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Kramer, seconded by Commissioner Thomas, to approve the minutes
of the regular meeting held September 23, 2008 and special board meetings held October 16 and
29, 2008.
Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING TO
COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO IMMEDIATELY
PRIOR TO ADJOURNMENT.
There were no public comments.
COMMUNICATIONS
Card received September 25, 2008, from Ann L. Andrews concerning proposed BWL coal plant.
Received and placed on file.
Card received September 26, 2008, from Eric W. Crosley concerning proposed BWL coal plant.
Received and placed on file.
Board Meeting
Nov. 18,2008
Page 3 of 19
Public Comments
There were no public comments.
BWL Cash Investment Update
Susan Devon, Chief Financial Officer gave an update regarding Board of Water and Light
(BWL) cash investments. Excess cash is invested in qualified financial institutions in short and
intermediate term fixed income securities. The primary investment objective is to preserve
capital, provide liquidity and earn interest. The BWL follows the Operating Cash Policy
Summary and the Investment of Surplus Funds of Political Subdivisions Act 20 of 1943. A
securities log spreadsheet that detailed the BWL's security accounts, investment amounts,
interest rates/yields, maturity dates, interest amounts, financial institutions and investment types
was distributed to the committee members. As such, the committee discussed the designated
funds, the decrease of commercial paper investments due to increased risk, and the BWL's desire
to maintain diversified monetary funds.
In response to a Commissioner inquiry, Ms. Devon noted that the BWL could invest a maximum
of 3% of assets or$25 million in any one particular institution. It was also noted that LaSalle
Bank and National City are the BWL's depository banks. Susan Devon and staff met with
National City representatives in light of the current financial environment to help ensure access
to its account. As such, a Sweep Account was created to ensure that when funds reach a certain
amount they are swept into a mutual fund account to earn interest and provide access if needed.
The BWL is also depositing customer checks at Bank of America and then wire transferring
them to National City in order to reduce the number of float days. In response to another
inquiry, Ms. Devon advised that there is a net gain of interest on the mutual fund relative to the
cost of the sweep and wire transfer transactions.
Following further discussion, the Commissioners commended staff for their proactive efforts in
the management and safeguarding of the BWL's cash assets.
Other
Bargaining Unit Contract. Commissioner Zerkle reported that the IBEW Local 352 bargaining
unit contract negotiations are going well and appear to be coming to an end. After the contract is
presented to the union body, union representatives will then ask the Board of Commissioners to
hold a Special Board meeting to ratify the contract. The current contract is set to expire
November 1, 2008.
There being no further business, the meeting adjourned at 9:29 a.m.
Respectfully submitted,
Frank Lain, Chair
Executive Committee
FINANCE COMMITTEE
October 14, 2008
Board Meeting
Nov. 18,2008
Page 5 of 19
Update on Internal Auditor Selection
Michael Flowers, Human Resources Director provided an update regarding the Internal Auditor
selection process. As such, a request for proposal (RFP) to hire a firm to provide executive
search services was sent to nine different vendors in which six responses were received. The
vendors were rated based on their responses to the questions contained in the bid packet.
Following brief clarification regarding the vendor's fees and expenses, Mr. Flowers
recommended the selection of Global Business Resource Group Incorporated due to their scope
of work, communication, past experience and quality of work. Subsequent to discussion
regarding the cost differential between vendor fees and expenses, the Finance Committee took
the following action:
On motion by Commissioner Lain, seconded by Commissioner DeLuca, the Finance Committee
moved to award the RFP for the Internal Auditor Executive Search Services to Global Business
Resource Group Incorporated.
Abstain: Commissioner James.
Action: Carried unanimously.
Additional Comments:
Mr. Flowers noted that he would move forward and provide the Finance Committee with an
update next month. In response to a Commissioner inquiry, Mr. Flowers also noted a 30-60 day
selection process.
Commissioner Kramer advised that there had been varying opinions from different
Commissioners over time regarding the Internal Auditor position. As such, he asked the
committee members if there were any particular qualities or qualifications of importance that the
search firm should be aware of as they move forward in the process. Commissioner Kramer also
indicated that he wanted all of the Commissioners to come out of the process buying into the
qualifications of the individual and knowing that it is the right choice.
In response to Commissioner Kramer's inquiry, Commissioner James advised that she would
like to see highly qualified and able candidates. Commissioner Lain noted that he would defer to
Michael Flowers expertise in this area. Commissioner Cochran suggested the review of prior
materials and criteria used in the previous internal auditor search process.
There being no further business, the meeting adjourned at 4:47 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
Board Meeting
Nov. 18,2008
Page 7 of 19
MINUTES
BOARD OF WATER AND LIGHT
PENSION FUND TRUSTEES' ANNUAL MEETING
Tuesday, November 4, 2008
Present: Trustees Robert W. Cochran,Tony DeLuca, Semone M.James,Frank Lain,Julee M.
Rodocker and Tracy Thomas.
Absent: Trustees Peter W. Kramer and Sandra Zerkle
Staff Present: General Manager J. Peter Lark, Executive Director and Chief Financial Officer
Susan Devon, Human Resource Director Michael Flowers, Interim Director of
Internal Audit Charles Moore, Manager of Finance and Planning Bill Aldrich,
Manager of Financial Services Gennie Eva, and Corporate Secretary Rhonda
Jones.
Consultant Present: First Vice President Marie Vanerian, Associate Financial Advisors Keith
Azar and Michael Muirhead of Merrill Lynch.
The Secretary declared a quorum.
Chairperson Lain called the meeting to order at 5:30 p.m.
Public Comments
There were no public comments.
Audited Financial Statements
Executive Director and Chief Financial Officer Susan Devon reported that the financial
statements for the Defined Benefit, Defined Contribution, and Retiree Benefit and Trust Reports
(VEBA) each received a clean, unqualified audit report by external independent auditors, Plante
&Moran. The pension plan audit reports were completed September 2008.
Defined Benefit Pension Plan Performance Report
Susan Devon also gave an overview of the fiscal year end performance results for the Defined
Benefit Pension Plan. The total assets held in trust as of June 30, 2008 were $107 million and
decreased to $95 million as of September 30, 2008 due to declines in the stock market. As of
June 30, 2008, the net investment income was negative -$7.6 million and$1.6 million was
transferred to the VEBA fund pursuant to Internal Revenue Code Section 420. The Mercer
Actuarial Valuation Report as of February 29, 2008 indicates a funded ratio of 127%, which is a
reduction from its previous figure of 138%, effective February 28, 2007. The benefit payments
including administrative expenses for year ending February 29, 2008 were approximately$8.1
Board Meeting
Nov. 18,2008
Page 9 of 19
the current market. The packet materials further contained information relative to the following
data:
• Plan assets by class
• Historical performance of funds
• Historical performance benchmarks
In response to a Trustee request, it was noted that future benchmark reports would contain the
corresponding fund information on the same page. It was also advised that once the transition
from Prudential to ICMA is complete, the Board of Trustees would begin to see new reporting.
Post-retirement Benefit Plan and Trust
Susan Devon gave an overview of the fiscal year end performance results for the Post-retirement
Benefit Plan and Trust (VEBA). Total plan assets held in trust were $62 million as of June 30,
2008. However, as of September 30, 2008 they had decreased to $58 million due to the decrease
in the stock market. Target contributions for VEBA as of June 30, 2008 were $14.8 million and
$18.1 million respectively for June 30, 2009. In addition, the net target VEBA contribution
estimates for June 30, 2008 were $6.4 million and $8.4 million respectively for June 30, 2009.
In response to a Trustee inquiry, it was noted that the BWL's VEBA funding is doing well
compared to other local entities. The BWL's policy also dictates that the trust will be fully
funded in 15 years.
Marie Vanerian provided a brief overview of fiscal year end market returns for the Post-
retirement Benefit Plan and Trust for the period ending June 30, 2008. Summary reports
pertaining to the trusts performance highlighted the following areas: total portfolio performance,
asset and manager allocations, investment earnings and cash flows, and distribution returns. It
was noted that a glossary of terms is contained in the report to aid in understanding the
terminology. In the future, the report will also contain a running addendum that speaks to policy
changes and various matters that the board has considered over time. The addendum will
provide new board members with a history of decisions made by the board to provide insight
regarding the trust. In addition, it was also advised that the trust was overweight in Cash and
Cash Equivalents and underweight in Large Cap Exposure. There was also underperformance in
the bond accounts due to issues with some of the bonds contained within the portfolio. The total
distribution of returns for March 2008 to June 2008 was—1.7% and it ranked 68% against other
managers, which does not take into account risk factors that the peer group comparison is
incurring within their respective portfolios. Following the presentation, the Pension Fund
Trustees took the following action:
Moved by Trustee James, seconded by Trustee Thomas, to approve the following resolution:
RESOLUTION
Board Meeting
Nov. 18,2008
Page 11 of 19
Commissioner Zerkle noted that she would ask the Board to consider the matter and would
contact Mr. Rall regarding their response. Contact information was provided to Secretary Jones
on behalf of the Board.
Doug Jester of Lansing noted that even in the Integrated Resource Plan issued by Board of Water
and Light (BWL) staff, the cost per kilowatt (kWh) of load avoided through energy efficiency
measures is less than the cost per kWh of energy generation and distribution. He went onto note
that the purpose of his letter was to address concerns regarding the principles of this region, the
environment, global warming, and quality of life. Mr. Jester urged the Board to look at the
proposal as an economic and environmental alternative to generation and welcomed the
opportunity to present the proposal to the Board when time permits.
Approval of Minutes
Motion by Commissioner Lain, seconded by Commissioner DeLuca to approve the minutes of
the Committee of the Whole meeting held September 9, 2008 as amended.
Action: Carried unanimously.
Discharge of Easements
General Manager J. Peter Lark presented the proposed resolution. The discharge of easements is
no longer needed for facilities that have been removed as a consequence of the Ottawa Property
sale. The BWL released the property to the City of Lansing for sale to and redevelopment by
The Christman Company.
On motion by Commissioner Cochran, seconded by Commissioner DeLuca, the Committee of
the Whole agreed to move the proposed resolution for the Discharge of Easements to the full
board for consideration and approval.
Abstain: Commissioner Kramer.
Action: Carried unanimously.
On motion by Commissioner Lain, seconded by Commissioner Cochran, the Committee of the
Whole corrected the last line in staff comments to read, "City of Lansing" as opposed to
"Accident Fund".
Abstain: Commissioner Kramer.
Action: Carried unanimously.
Consideration of PURPA Standards Under the Independence and Security Act of 2007
J. Peter Lark introduced the proposed resolution concerning PURPA Standards Under the
Independence and Security Act of 2007. The Board must consider five standards that include
integrated resource planning, rate design, smart grid investments and information, and recovery
Board Meeting
Nov- 18,2008
Page 13 of 19
The Finance Committee of the Board of Water and Light met at the Executive Offices, Lansing
beginning at 4:05 p.m. on Tuesday, November 18, 2008.
Finance Committee Chair Peter Kramer called the meeting to order and asked the Secretary to
call the roll. Commissioner Peter Kramer and alternate committee members Tony DeLuca and
Semone James were present.
Absent: Commissioners Robert Cochran, Julee Rodocker and Tracy Thomas.
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner DeLuca, seconded by Commissioner James to approve the minutes of
the Finance Committee meeting held October 14, 2008.
Action: Carried unanimously.
Public Hearing for 2009 Rate Increase
General Manager J. Peter Lark reviewed the proposed utility rate increases for calendar year
2009. Due to recent stock market fluctuations and higher than anticipated operating expenses,
i.e. healthcare costs, the value of the Defined Benefit (DB) Pension fund is lower than expected.
Although, the DB plan is still fully funded, money cannot be transferred from the DB fund to the
Post-retirement Benefit Plan and Trust (VEBA) as originally budgeted thereby, creating a$6.5
million shortfall for the VEBA fund. Other concerns affecting the current fiscal budget include
fewer cooling degree-days that lead to a 15% decrease in retail sales, lower than usual natural
gas prices, and decreased third party sales. Board of Water and Light (BWL) residential electric
rates are approximately 24% lower than Consumers Energy who recently filed for a 16.4%
residential rate increase with the Michigan Public Service Commission. BWL residential electric
rates are also lower than DTE, whose rates are currently higher than Consumers Energy. The
BWL's return on assets is 6.18%. In order to achieve the return on assets, the BWL would need
to increase utility rates by the following: electric 11%, water 47%, steam 30% and chilled water
60%. Recognizing that such utility rate increases are not amendable to the ratepayer the BWL
budgeted for rate increases of 4% for electric, 7% for water and 9% for steam. Nevertheless, due
to the existing difficult economic landscape, the City of Lansing's rate of foreclosures, and
General Motors shift reductions staff proposed to reduce the rate increases and cut costs. Staff in
cooperation with the General Manager and Chief Financial Officer Susan Devon are reviewing
the Capital and Operations and Maintenance budgets for possible cost saving measures. Some of
the measures include the elimination of employee travel unless deemed essential or required for
certification, no new vehicle purchases, developing a fleet vehicle pool and considering the
reduction of P-cards currently in circulation. During the current economic environment the
BWL is attempting to position itself to continue to thrive. Hence, it was recommended that the
Finance Committee consider a proposed resolution to schedule a public hearing for January 26,
2009 at 5:30 p.m. to solicit public input regarding proposed rate increases of 2.5% for electric,
water, steam and chilled water. In addition, the Electric Residential Basic Service Charge would
Board Meeting
Nov. 18,2008
Page 15 of 19
FURTHER RESOLVED, that the Corporate Secretary be directed to record the release of
easement with the Ingham County Register of Deeds.
--------------------
Motion by Commissioner James, seconded by Commissioner Thomas to approve the Discharge
of Easements at 300 N. Graven Avenue resolution.
Abstain: Commissioner Kramer
In response to a Commissioner inquiry, it was noted that the easement, which is small in scale
would become a part of the Accident Fund redevelopment project.
Action: Carried unanimously.
esolution 2008-11-2
B. Consideration of PURPA Standards under the Energy Independence and Security
Act of 2007
WHEREAS, the Energy Independence and Security Act of 2007 (EISA) contains four new
Public Utility Regulatory Policies Act (PURPA) standards and a fifth non-PURPA "standard"
requiring covered utilities to consider adopting these new standards; and
WHEREAS, the EISA of 2007 amendments to PURPA require covered utilities to begin
consideration of 1) Integrated Resource Planning, 2) Rate Design Modifications to Promote
Energy Efficiency Investments, 3) Consideration of Smart Grid Investments, and 4) Smart Grid
Information. Although, the fifth standard is not an amendment to PURPA, utilities are required
to consider "Additional Incentives for Recovery, Use, and Prevention of Industrial Waste
Energy" under the same process as the other PURPA standards; and
WHEREAS, the Lansing Board of Water and Light, with electric retail sales in excess of 500
million kWhs meets the definition of a non-regulated covered utility.
RESOLVED, that the Lansing Board of Water and Light will commence consideration of the
five standards required by the Energy Independence and Security Act of 2007 before December
19, 2008.
FURTHER RESOLVED, that the Lansing Board of Water and Light shall hold a public hearing
to accept public comments on the five EISA standards listed above, in 2009.
--------------------
Motion by Commissioner James, seconded Commissioner Kramer to approve the resolution
regarding the Consideration of PURPA Standards under the Energy Independence Security Act
of 2007.
Board Meeting
Nov. 18,2008
Page 17 of 19
esolution 2008-11-
Compensation Increase
For Charter Position of Corporate Secretary
RESOLVED, That the Corporate Secretary, Rhonda Jones, is hereby eligible to receive a salary
adjustment effective as of July 1, 2008.
RESOLVED FURTHER, That the Board of Commissioners authorizes a three percent (3.00%)
salary adjustment for the Corporate Secretary, based on the evaluation of the employee's
performance from July 24, 2007 through June 30,2008.
................
Motion by Commissioner James, seconded by Commissioner Thomas to approve the resolution
regarding the Compensation Increase for Charter Position of Corporate Secretary.
Action: Carried unanimously.
esolution 2008-11-
BOARD MEETING SCHEDULE
In accordance with the Board's Rules of Administrative Procedure, a schedule of dates, places,
and times for each regular meeting of the Board of Commissioners for the calendar year shall be
adopted in November.
RESOLVED, That regular meetings of the Board of Commissioners are hereby set for calendar
year 2009 as follows, unless otherwise notified or as a result of date conflicts with rescheduled
City Council meetings:
2009
Tuesday January 27
Tuesday March 24
Tuesday May 26
Tuesday July 28
Tuesday September 22
Tuesday November 24
Meetings will be held in the Board Room located in the Board of Water and Light Customer
Service Center, 1232 Haco Drive, Lansing, at 5:30 p.m.
RESOLVED FURTHER, That a notice of the meeting schedule be published in the Lansing
State Journal the week of January 4, 2009.
Board Meeting
Nov. 18,2008
Page 19 of 19
On motion by Commissioner Cochran, seconded by Commissioner James, the meeting adjourned
at 6:00 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
November 26, 2008
WATER&LIGHT
Mae
Hometown People.Hometown Power. M E M O R A N D U M
TO: Chris Swope
Lansing City Clerk
FROM: Rhonda Jones
BWL Corporate Secretary
CC: Rosemary Sullivan
DATE: January 7, 2009
RE: Board of Water and Light Special Board Meeting Minutes
ZD
October 16, 2008 and October 29, 2008
A typographical error was found in the body of the Board of Water and Light Special Board
meeting minutes dated October 161h and 29th of 2008 respectively. As such, please disregard
your previous copy and instead utilize the attached version. If there are any questions or
concerns, feel free to contact me at your earliest convenience. Thank you.
Approved by the Board: November 18, 2008
MINUTES OF THE BOARD OF COMMISSIONERS SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Wednesday, October 29, 2008
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing,
Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Semone James, Frank
Lain, Julee Rodocker, Tracy Thomas and Sandra Zerkle.
Absent: Commissioner Peter Kramer.
The Secretary declared a quorum present.
Chairperson Lain called the meeting to order at 9:05 a.m.
PUBLIC COMMENT
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE
WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO
SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
MANAGER'S RECOMMENDATION
esolution 2008-10-2
Collective Bargaining Agreement between the Lansing Board of Water & Light and
the International Brotherhood of Electrical Workers,AFL-CIO, Local 352
WHEREAS, on October 9, 2008 the Board of Water and Light and IBEW Local 352
entered into a Tentative Agreement to extend the Collective Bargaining Agreement for
four years;
WHEREAS, the terms and conditions of the Tentative Agreement are in accordance with
the direction and authority that was delegated to the Board's negotiating team by the
General Manager; and
Special Board Mtg.
October 29,2008
Pa.-e 3 of 7
Final Tentative Agreement
October 7, 2008
Extend Collective Bargaining Agreement, Attachment and MOUs by a term of forty-
eight months. All provisions will remain in effect until Midnight, October 31, 2012.
As outlined in Article XV, page 46, of the CBA, except as follow:
1. Effective November 1 2008: 3% wage increase to all bargaining unit
classifications
2. Effective November 1, 2009: 3% wage increase to all bargaining unit
classifications
3. Effective November 1, 2010: 3% wage increase to all bargaining unit
classifications
4. Effective November 1, 2011: 3% wage increase to all bargaining unit
classifications
5. Effective January 1, 2009, in the event a surviving spouse remarries; the
subsequent spouse of the surviving Spouse shall not be eligible for Spouse
Benefits under the Post Retirement Benefit Plan. Benefits shall not be withdrawn
from spouses of Surviving spouses that are/were receiving benefits under the Post
Retirement Benefit Plan as of December 31, 2008
6. Eligible Employees hired after January 1, 2009 shall receive the same level of
coverage, and be responsible for health care premium sharing, and co-pays at the
same level as other active employees. To the extent the eligible Employee, who is
hired after January 1, 2009, is eligible for benefits under the Post Retirement
Benefit Plan, their respective level of coverage, co-pays and health care premium
sharing as a retiree through retirement shall be at the same level it was as of the
date of retirement. In the event the retiree dies and is survived by a spouse or
eligible dependent, the surviving Spouse and/or eligible dependent shall continue
to be responsible for the same level of health care premium sharing as the
respective retiree. Upon retirement, active employees hired on or before
December 31, 2008 will continue with the same health care benefit level of
coverage, co-pay, and premium sharing as retirees pay as of September 15, 2008,
and the provisions of the Post Retirement Benefit Plan shall remain in full force
and effect.
7. Emergency room co-pay will increase from$75.00 to $150.00; co-pay will be
waived if admitted.
Special Board Mtg.
October 29,2008
Page 5 of 7
Additional discussion:
Commissioner Cochran complimented IBEW Local 352 Business Manager Ron Byrnes,
Jr., Assistant Business Manager Jim Dravenstatt-Moceri, and Chief Financial Officer
Susan Devon for their professionalism and effort in negotiating the agreement.
General Manager J. Peter Lark thanked the Board of Commissioners and Commissioner
Zerkle in particular for their support. It was also noted that previous contract
negotiations had taken significantly longer to resolve. As such, Mr. Lark noted his
appreciation of the Board's timely approval.
NEW BUSINESS
Moved by Commissioner Thomas, seconded by Commissioner Cochran to enter into
closed session to discuss a pending litigation matter with Attorney Scott Mandel of Foster,
Swift, Collins & Smith,P.C. as protected by Open Meetings Act exemption MCL
15.268(e). (9:13 a.m.) The roll was called.
Yeas: Commissioners Cochran, DeLuca, Graves, James, Lain, Rodocker and Zerkle.
Nays: None.
Absent: Commissioner Kramer.
Carried unanimously.
Moved by Commissioner Cochran, seconded by Commissioner Thomas that the Special
Board meeting return to open session.
Carried unanimously.
The Special Board meeting reconvened in open session at 9:17 a.m.
Upon conclusion of closed session, the Board of Commissioners took the following
action:
Motion by Commissioner Thomas, seconded by Commissioner Cochran to approve the
agreement as put forth (and consistent with the Board resolution passed October 16,
2008).
Action: Carried unanimously.
MANAGER'S REMARKS
Solar Array Groundbreaking. General Manager J. Peter Lark thanked those in attendance
at the Solar Array Groundbreaking ceremony held October 22, 2008.
Granger Landfill Gas Ceremony. The Granger Landfill Gas Ceremony is scheduled for
November 18th. Invitations are forthcoming.
Special Board Mtg.
October 29,2008
Page 7 of 7
Action: Carried unanimously.
PUBLIC COMMENTS
There were no public comments.
ADJOURNMENT
On motion by Commissioner Thomas, seconded by Commissioner. DeLuca, the meeting
adjourned at 9:30 a.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
November 3, 2008
ATTACHMENT L
to
Agreement between
BOARD OF WATER AND LIGHT
Lansing, Michigan
and
LOCAL UNION NO. 352, IBEW, AFL-CIO
CUSTOMER SERVICE SUBPROCESS
PROGRESSION SYSTEM
Effective XX-01-08
Recommended by:
Robert Perialas, Manager Leslie Grannell, RPR3
Beth Chenoweth, Supervisor Michele Mickel, CSSL
Dated: September 30, 2008
REMITTANCE PROCESSING
The Remittance Processing section of the Customer Service
Subprocess is structured to include the following
classifications :
Remittance Processing Representative (RPR 1-3)
Remittance Processing Specialist (RPS)
POSTING - The RPR-1 will be an entrance level
classifications . RPR2 and RPR3 are progressive and will not be
posted. The RPS will be a Subprocess only posting.
SELECTION -
RPR-1 : Qualified applicants who meet the pre-selection
criteria as measured through an assessment process
will be chosen for the RPR position-e.
RPS : Applicants for this position will be considered on the
basis of performance, ability, demonstrated RPR level
3 skills, results of the pre-selection leadership
assessment center and seniority.
PROGRESSION-
Classification Progression
RPR
Level 1 1 Year
Level 2 2 Years
Level 3 2 Years
RPS 1 Year
Employees may progress, based upon performance and
appropriate skills demonstrated, at a faster pace than
prescribed above presuming training is available . All RPR' s are
expected to progress to the top of level 3 . If Management has
acted in good faith and sufficient training has been made
available but it is taking longer than the prescribed time for
an employee to progress, a decision will be made whether or not
the employee should remain in the position and appropriate
action will be taken. If it has been determined that Management
has not acted in good faith to make sufficient training
available in the prescribed time, the employee will progress to
the highest rate of their current classification.
Training and re-training will be offered on an as-needed
and as-available basis taking seniority into consideration.
RATES OF PAY - See Attachment A and A-1 .
CUSTOMER ACCOUNTING
The Customer Accounting section of the Customer Service
Subprocess is to be structured to include the following
classifications :
1 . Customer Billing Representative (CBR 1-3)
2 . Customer Account Specialist (CAS)
POSTING - The CBR position will be an entrance level
classification. The CAS will be a Subprocess-only posting.
SELECTION -
CBR: Qualified applicants who meet the pre-selection criteria as
measured through an assessment process will be chosen for
the CBR position.
CAS : Applicants will be considered on the basis of performance,
ability, demonstrated CBR level 3 skills & results of the
pre-selection leadership assessment center and seniority.
PROGRESSION -
CBR: Skill Groups Progression
CBR 1 1 Year
CBR 2 2 Years
CBR 3 2 Years
CAS : 1 Year
Employees may progress, based upon performance and
appropriate skills have been demonstrated, at a faster pace than
prescribed above presuming training is available. Evaluations
will be available upon request at least every six months . If
Management has acted in good faith and sufficient training has
been made available but is taking longer than the prescribed
time for an employee to progress, a decision will be made
whether or not the employee should remain in the position and
appropriate action will be taken. If it has been determined
that Management has not acted in good faith to make sufficient
training available in the prescribed time, the employee will
progress to the highest rate of their current classification.
All new CBR' s are expected to progress to the top of level
3 . Training and re-training will be offered on an as-needed and
as-available basis taking seniority into consideration.
RATES OF PAY - See Attachment A.
CALL CENTER
The Call Center Section of the Customer Service Subprocess
is to be structured to include the following classifications :
1 . Customer Service Representative 1 (CSR1)
Customer Service Representative 2 (CSR2)
Customer Service Representative 3 (CSR3)
2 . Customer Service Specialist (CSS)
POSTING - The CSR1 position will be an entrance level
classification. The CSS will be a Subprocess-only posting.
SELECTION -
CSR1 : Qualified applicants who meet the pre-selection criteria
as measured through an assessment process will be chosen
for the CSR1 position.
CSS : Applicants will be considered on the basis of performance,
ability, demonstrated CSR level 3 skills & results of the
pre-selection leadership assessment center and seniority.
PROGRESSION -
Skill Group Progression
CSR level 1 1 Year
CSR level 2 2 Years
CSR level 3 2 Years
CSS 1 Year
Employees may progress, based upon performance, ability,
and demonstrated skills at a faster pace than prescribed above,
except for the CSS position. Experience in the position is an
important factor for the CSS position, so strict adherence to by
the prescribed timetable is required. Evaluations will be
available upon request at least every six months . If Management
has acted in good faith and sufficient training has been made
available but is taking longer than the prescribed time for an
employee to progress, a decision will be made whether or not the
employee should remain in the position and appropriate action
will be taken. If it has been determined that Management has
not acted in good faith to make sufficient training available in
the prescribed time, the employee will progress to the highest
rate of their current classification.
All employees are expected to progress to the top level 3 .
Training and re-training will be offered on an as-needed and as-
available basis taking seniority into consideration.
RATES OF PAY - See Attachment A.
Approved by the Board: November 18, 2008
MINUTES OF THE BOARD OF COMMISSIONERS SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Wednesday, October 29, 2008
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing,
Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Semone James, Frank
Lain, Julee Rodocker, Tracy Thomas and Sandra Zerkle.
Absent: Commissioner Peter Kramer.
The Secretary declared a quorum present.
Chairperson Lain called the meeting to order at 9:05 a.m.
PUBLIC COMMENT
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE
WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO
SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
MANAGER'S RECOMMENDATION
esolution 2008-10-2
Collective Bargaining Agreement between the Lansing Board of Water & Light and
the International Brotherhood of Electrical Workers,AFL-CIO, Local 352
WHEREAS, on October 9, 2008 the Board of Water and Light and IBEW Local 352
entered into a Tentative Agreement to extend the Collective Bargaining Agreement for
four years;
WHEREAS, the terms and conditions of the Tentative Agreement are in accordance with
the direction and authority that was delegated to the Board's negotiating team by the
General Manager; and
Special Board Mtg.
October 29,2008
Page 2 of 7
WHEREAS, the Tentative Agreement was submitted by the IBEW Local 352 negotiating
team to the IBEW membership for its approval and was ratified on October 17, 2008.
RESOLVED, that the attached "Final Tentative Agreement" (dated and signed October 7,
2008) is hereby approved.
RESOLVED FURTHER, that the Chair and Corporate Secretary are hereby authorized to
sign the Agreement incorporating the settlement changes.
-----------------------------------------
Staff Comments: The Board and the Union have tentatively agreed to a four year
extension of the collective bargaining agreement through October 31, 2012. The
agreement provides for a 3% across the board increase to all bargaining unit employees
on November 1, 2008, November 1, 2009, November 1, 2010, and November 1, 2011.
In addition several changes to health care benefits were agreed upon including increasing
emergency room co-pay from$75.00 to $150.00, requiring $20.00 office visit co-pay for
chiropractic services, increasing annual individual deductible from$100.00 to $150.00
and annual family deductible from$200.00 to $300.00, and offering employee paid group
vision insurance that will be paid for with pre tax dollars.
Effective January 1, 2009, in the event a surviving spouse remarries; the subsequent
spouse of the surviving Spouse shall not be eligible for Spouse Benefits under the Post
Retirement Benefit Plan. Benefits shall not be withdrawn from spouses of Surviving
spouses that are/were receiving benefits under the Post Retirement Benefit Plan as of
December 31, 2008.
Eligible Employees hired after January 1, 2009 shall receive the same level of coverage,
and be responsible for health care premium sharing, and co-pays at the same level as
other active employees. To the extent the eligible Employee, who is hired after January
1, 2009, is eligible for benefits under the Post Retirement Benefit Plan, their respective
level of coverage, co-pays and health care premium sharing as a retiree through
retirement shall be at the same level it was as of the date of retirement. In the event the
retiree dies and is survived by a spouse or eligible dependent, the surviving Spouse
and/or eligible dependent shall continue to be responsible for the same level of health
care premium sharing as the respective retiree. Upon retirement, active employees hired
on or before December 31, 2008 will continue with the same health care benefit level of
coverage, co-pay, and premium sharing as retirees pay as of September 15, 2008, and the
provisions of the Post Retirement Benefit Plan shall remain in full force and effect.
Finally, the parties agree to changes as proposed by a Board and Union subcommittee
report provided in the attached Attachment L, Customer Service Subprocess Progression
System.
-----------------------------------------
Special Board Mtg.
October 29,2008
Page 3 of 7
Final Tentative Agreement
October 7, 2008
Extend Collective Bargaining Agreement, Attachment and MOUs by a term of forty-
eight months. All provisions will remain in effect until Midnight, October 31, 2012.
As outlined in Article XV, page 46, of the CBA, except as follow:
1. Effective November 1 2008: 3% wage increase to all bargaining unit
classifications
2. Effective November 1, 2009: 3% wage increase to all bargaining unit
classifications
3. Effective November 1, 2010: 3% wage increase to all bargaining unit
classifications
4. Effective November 1, 2011: 3% wage increase to all bargaining unit
classifications
5. Effective January 1, 2009, in the event a surviving spouse remarries; the
subsequent spouse of the surviving Spouse shall not be eligible for Spouse
Benefits under the Post Retirement Benefit Plan. Benefits shall not be withdrawn
from spouses of Surviving spouses that are/were receiving benefits under the Post
Retirement Benefit Plan as of December 31, 2008
6. Eligible Employees hired after January 1, 2009 shall receive the same level of
coverage, and be responsible for health care premium sharing, and co-pays at the
same level as other active employees. To the extent the eligible Employee, who is
hired after January 1, 2009, is eligible for benefits under the Post Retirement
Benefit Plan, their respective level of coverage, co-pays and health care premium
sharing as a retiree through retirement shall be at the same level it was as of the
date of retirement. In the event the retiree dies and is survived by a spouse or
eligible dependent, the surviving Spouse and/or eligible dependent shall continue
to be responsible for the same level of health care premium sharing as the
respective retiree. Upon retirement, active employees hired on or before
December 31, 2008 will continue with the same health care benefit level of
coverage, co-pay, and premium sharing as retirees pay as of September 15, 2008,
and the provisions of the Post Retirement Benefit Plan shall remain in full force
and effect.
7. Emergency room co-pay will increase from $75.00 to $150.00; co-pay will be
waived if admitted.
Special Board Mt-g.
October 29,2008
Page 4 of 7
8. Chiropractic services will now have a$20.00 office visit co-pay
9. Increase annual individual deductible from$100.00 to $150.00 and annual family
deductible from $200.00 to $300.00
10. Offer employee paid group vision insurance that will be paid for with pre tax
dollars.
11. The parties agree to the Attachment L subcommittee changes and report
12. The parties confirm that all provisions agreed to by this tentative agreement and
memorandum of Understanding become part of the Collective Bargaining
Agreement and have full force and effect.
IBEW Local 352
BY:
Dated: , 2008 Its:
Lansing Board of Water &Light
By:
Dated: , 2008 Its:
Motion by Commssioner Cochran, seconded by Commissioner DeLuca to approve the
Collective Bargaining Agreement between the Lansing Board of Water&Light (BWL)
and the International Brotherhood of Electrical Workers, AFL-CIO, Local 352 resolution.
Discussion: Commissioner Zerkle advised that she was given responsibility for
overseeing the negotiation process and found that there was minimal work for her to do.
Reaching agreement on the new bargaining unit contract was a testament to both parties
willingness to sit down with one another and workout the contract. It was also advised
that the 4-year bargaining unit contract is a benefit to the employees and a cost savings to
the BWL.
Commissioner Lain thanked General Manager J. Peter Lark, the Union and especially
that of Commissioner Zerkle for their efforts in this endeavor. He also noted that the
relationships that have been built over the years enabled everyone to accomplish this task.
Action: Carried unanimously.
Special Board Mtg.
October 29,2008
Page 5 of 7
Additional discussion:
Commissioner Cochran complimented IBEW Local 352 Business Manager Ron Byrnes,
Jr., Assistant Business Manager Jim Dravenstatt-Moceri, and Chief Financial Officer
Susan Devon for their professionalism and effort in negotiating the agreement.
General Manager J. Peter Lark thanked the Board of Commissioners and Commissioner
Zerkle in particular for their support. It was also noted that previous contract
negotiations had taken significantly longer to resolve. As such, Mr. Lark noted his
appreciation of the Board's timely approval.
NEW BUSINESS
Moved by Commissioner Thomas, seconded by Commissioner Cochran to enter into
closed session to discuss a pending litigation matter with Attorney Scott Mandel of Foster,
Swift, Collins & Smith, P.C. as protected by Open Meetings Act exemption MCL
15.268(e). (9:13 a.m.) The roll was called.
Yeas: Commissioners Cochran, DeLuca, graves, James, Lain, Rodocker, Thomas and
Zerkle.
Nays: None.
Absent: Commissioner Kramer.
Carried unanimously.
Moved by Commissioner Cochran, seconded by Commissioner Thomas that the Special
Board meeting return to open session.
Carried unanimously.
The Special Board meeting reconvened in open session at 9:17 a.m.
Upon conclusion of closed session, the Board of Commissioners took the following
action:
Motion by Commissioner Thomas, seconded by Commissioner Cochran to approve the
agreement as put forth (and consistent with the Board resolution passed October 16,
2008).
Action: Carried unanimously.
MANAGER'S REMARKS
Solar Array Groundbreaking. General Manager J. Peter Lark thanked those in attendance
at the Solar Array Groundbreaking ceremony held October 22, 2008,
Special Board Mtg.
October 29,2008
Page 6 of 7
Granger Landfill Gas Ceremony. The Granger Landfill Gas Ceremony is scheduled for
November 18th. Invitations are forthcoming.
Energy Efficiency Program. The BWL is scheduled to announce an aggressive energy
efficiency program in early 2009.
COMMISSIONERS' REMARKS
Commissioner Lain introduced the concept of going paperless whereas, the Board of
Commissioners would no longer receive paper copies of committee or board meeting
materials. Instead board members would receive their materials electronically unless
paper copies were deemed necessary. It was noted that other entities are moving in this
direction and, it is also greener and in alignment with BWL energy efficiency goals.
Depending on the need, notebook computers maybe essential to have at the meetings to
access the materials as necessary. In addition, Commissioner Lain also advised that he
receives several questions from the community asking what the board members are doing
and what they themselves can do to save energy. As a result, Commissioner Lain
suggested the need to create a pamphlet that would provide information on how to save
energy within one's own household. The paperless initiative and the pamphlet project
would also allow the Board to take the lead in becoming more energy conscious. In
addition, Go Green Initiative Coordinator Taylor Heins was asked to assist with both
respective projects.
In response to Commissioner Lain's comments regarding electronic committee packets,
Ms. Heins advised that the first step in the process is auditing the kind of documents that
the Board receives, as everything will not be paperless. In addition, General Manager J.
Peter Lark also advised that from his perspective he thought it a good idea.
Commissioner James noted that she would like to continue receiving paper copies, as she
does not have the opportunity to sit at a computer and read through documents. As such,
paper copies will allow her the occasion to review said materials during and/or between
meetings.
After brief discussion, it was noted the Board of Commissioners were supportive of the
idea, as it will save time, paper and money. It was also confirmed that all board members
with the exception of Commissioner James would start to receive electronic meeting
packet materials in the near future. It is estimated that the new process will begin
December 2008.
Commissioner James departed the meeting at 9:24 a.m.due to a prior obligation.
Commissioner Thomas noted that he appreciates relationships because they are really
powerful. He also advised that even during difficult times one must have good relations.
EXCUSED ABSENCE
Special Board Mtg.
October 29,2008
Page 7 of 7
On motion by Commissioner DeLuca, seconded by Commissioner Thomas, to excuse the
absence of Commissioner Peter Kramer.
Action: Carried unanimously.
PUBLIC COMMENTS
There were no public comments.
ADJOURNMENT
On motion by Commissioner Thomas, seconded by Commissioner DeLuca, the meeting
adjourned at 9:30 a.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
November 3, 2008
Approved by the Board: November 18, 2008
MINUTES OF THE BOARD OF COMMISSIONERS SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Thursday, October 16, 2008
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing,
Michigan.
Present: Commissioners Robert Cochran (teleconference), Tony DeLuca, Semone
James, Frank Lain, Tracy Thomas and Sandra Zerkle.
Absent: Commissioners Peter Kramer and Julee Rodocker.
The Secretary declared a quorum present.
Chairperson Lain called the meeting to order at 2:35 p.m. �.
PUBLIC COMMENT
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE
WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO
SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
NEW BUSINESS
Moved by Commissioner DeLuca, seconded by Commissioner Thomas to enter into
closed session to discuss a pending litigation matter with Attorney Scott Mandel of Foster,
Swift, Collins &Smith,P.C. as protected by Open Meetings Act exemption MCL
15.258(e). (2:38 p.m.) The roll was called.
Yeas: Commissioners Cochran (teleconference), DeLuca, Graves, James, Lain and Zerkle.
Nays: None.
Absent: Commissioners Kramer and Rodocker.
Carried unanimously.
Special Board Mtg.
October 23,2008
Page 3 of 3
to Joseph Pandy, Jr., subject to and limited by the provisions of the Plan, in accordance
with the settlement.
Adopted by Board of Commissioners at a Special Board meeting held
Frank Lain Rhonda Jones
Board of Commissioners, Chair Corporate Secretary
Motion by Commissioner Thomas, seconded by Commissioner DeLuca to approve the
Litigation resolution.
Action: Carried unanimously.
MANAGER'S REMARKS
None.
COMMISSIONER REMARKS
None.
PUBLIC COMMENTS
There were no public comments.
EXCUSED ABSENCES
None.
ADJOURNMENT
On motion by Commissioner DeLuca, seconded by Commissioner Thomas, the meeting
adjourned at 3:19 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
October 23, 2008
Approved by the Board: November 18, 2008
MINUTES OF THE BOARD OF COMMISSIONERS SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
Thursday, October 16, 2008
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing,
Michigan.
Present: Commissioners Robert Cochran (teleconference), Tony DeLuca, Semone
James,Frank Lain, Tracy Thomas and Sandra Zerkle.
Absent: Commissioners Peter Kramer and Julee Rodocker. -:.1
The Secretary declared a quorum present.
Chairperson Lain called the meeting to order at 2:35 p.m.
PUBLIC COMMENT
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE
WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO
SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
NEW BUSINESS
Moved by Commissioner DeLuca, seconded by Commissioner Thomas to enter into
closed session to discuss a pending litigation matter with Attorney Scott Mandel of Foster,
Swift, Collins & Smith,P.C. as protected by Open Meetings Act exemption MCL
15.268(e). (2:38 p.m.) The roll was called.
Yeas: Commissioners Cochran (teleconference), DeLuca, Games, James, Lain, Thomas and
Zerkle.
Nays: None.
Absent: Commissioners Kramer and Rodocker.
Carried unanimously.
Special Board Mtg.
October 16,2008
Page 2 of 3
Moved by Commissioner Thomas, seconded by Commissioner DeLuca that the Special
Board meeting return to open session.
Carried unanimously.
The Special Board meeting reconvened in open session at 3:17 p.m.
RESOLUTION
esolution 2008-10-I
LITIGATION RESOLUTION
WHEREAS, Joseph Pandy, Jr. brought suit against the Lansing Board of Water
& Light (LBWL) in Ingham County Circuit Court (2003-11169-CZ); and
WHEREAS, Joseph Pandy, Jr. and the LBWL desire to settle all disputes
between them without the uncertainty, expense and delay of continued litigation; and
WHEREAS, Joseph Pandy, Jr. and representatives from LBWL participated in a
facilitative mediation held on October 131h and 14th 2008 in the interest of resolving the
above referenced matter; and
WHEREAS,Joseph Pandy, Jr. and representatives from LBWL tentatively
reached a mutually agreeable settlement, subject to approval by the Board of
Commissioners.
RESOLVED, that the Board of Commissioners hereby approves the tentative
settlement reached at facilitative mediation.
FURTHER RESOLVED, that the Board of Commissioners hereby authorizes its
insurers, American Insurance Group and Philadelphia Insurance Company to remit
payment in accordance with the settlement.
FURTHER RESOLVED, that the Board of Commissioners hereby authorizes
the release of the full amount, less applicable taxes, in Joseph Pandy, Jr.'s 457(f) account
Special Board Mtg,
October 16,2008
Page 3 of 3
to Joseph Pandy, Jr., subject to and limited by the provisions of the Plan, in accordance
with the settlement.
Adopted by Board of Commissioners at a Special Board meeting held
Frank Lain Rhonda Jones
Board of Commissioners, Chair Corporate Secretary
Motion by Commissioner Thomas, seconded by Commissioner DeLuca to approve the
Litigation resolution.
Action: Carried unanimously.
MANAGER'S REMARKS
None.
COMMISSIONER REMARKS
None.
PUBLIC COMMENTS
There were no public comments.
EXCUSED ABSENCES
None.
ADJOURNMENT
On motion by Commissioner DeLuca, seconded by Commissioner Thomas, the meeting
adjourned at 3:19 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
October 23, 2008
Approved by the Board: November 18, 2008
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, September 23, 2008
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232
Haco Drive, Lansing, Michigan.
Present: Commissioners Robert Cochran, Semone James, Peter Kramer, Frank Lain,
Julee Rodocker, Tracy Thomas and Sandra Zerkle.
Absent: Commissioner Tony DeLuca.
cJ C7
The Secretary declared a quorum present. ;_i
F-3 ,
Chairperson Lain called the meeting to order at 5:30 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Kramer, seconded by Commissioner James, to approve the
minutes of the regular meeting held July 22, 2008 and the special board meeting held
August 12, 2008.
Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING
TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO
IMMEDIATELY PRIOR TO ADJOURNMENT.
Carol Rall of Lansing asked the Board to consider an open dialogue format that would
allow for presentations in regards to building a new coal plant. Ms. Rall also inquired as
to how the board members are preparing themselves to make a decision regarding new
generation.
Lee Filfelske of Lansing with Lansing Can Do Better asked the Board of Commissioners
to consider changing the meeting times of the New Generation Advisory Panel to
increase public participation. She also asked that more advance notice through various
mediums such as, the BWL newsletter and website to ensure public availability.
Board Meeting
September 23,2008
Page 2 of 24
David Gard, Energy Program Director with the Michigan Environmental Council echoed
Carol Rall's sentiments and also asked the Board to consider expanding the public
comment period to allow for indepth discussion with respect to the proposed coal plant.
Anne Woiwode of Meridian Township with the Sierra Club of Lansing noted continued
support of renewable power and her personal support of public power. She advised that
of 150 proposed power plants in the United States, 70 were cancelled primarily due to
cost. Ms. Woiwode noted that the Board of Commissioner are uniquely positioned to
exercise fiduciary responsibility for Lansing residents and suggested they contact other
entities for additional information and consider the rising cost of coal and carbon control.
Steve Rall of Lansing thanked Commissioner Lain for meeting with him regarding new
generation. He expressed concerns regarding a new coal plant and discussed various
presentations given regarding new generation and wind energy. Mr. Rall also advised the
Board of an upcoming environmental issues film scheduled to air on WKAR on October
91h and 27'.
Brian Featy of East Lansing urged the Board to delay making a decision regarding the
coal plant until its costs can be fully evaluated. He further noted that both presidential
candidates support a carbon tax initiative and suggested the Board wait to see what will
happen on the national level before making a local level decision.
COMMUNICATIONS
Verbal communication of July 24, 2008 from Steve Bell opposing general manager's salary
increase.
Received and placed on file.
Email of July 24,2008 from Ann-Marie Smith opposing general manager's salary increase.
Received and placed on file.
Email of July 24, 2008 from Jason Allen opposing general manager's salary increase.
Received and placed on file.
Email of July 24, 2008 from Nick Pitlosh and Curt Micol opposing general manager's salary
increase.
Received and placed on file.
Email of July 24, 2008 from Mary Anne Smith opposing general manager's salary increase.
Received and placed on file.
Email of July 24, 2008 from Vicki Kaiser opposing general manager's salary increase.
Received and placed on file.
Four anonymous phone calls opposing general manager's salary increase.
Received and placed on file.
Board Meeting
September 23,2008
Page 3 of 24
Letter of July 25, 2008 from City Council office asking for information re general manager's
salary increase.
Received and referred to management.
Letter of July 31, 2008 and Resolution#424 from City Council office re general manager's
contract.
Received and placed on file.
Email of July 31, 2008 from Kirk Hewitt opposing general manager's salary increase.
Received and placed on file.
Email of August 3, 2008 from Lynn opposing general manager's salary increase.
Received and placed on file.
Verbal complaint of August 4, 2008 from Sharon Zenker opposing general manager's salary
increase.
Received and placed on file.
Letter of August 4, 2008 from Susan Every opposing general manager's salary increase.
Received and placed on file.
Phone call of August 5, 2008 from Maria Anquiano opposing general manager's salary increase.
Received and placed on file.
Letter of August 6, 2008 from Randee Shul opposing general manager's salary increase.
Received and placed on file.
Letter of August 8, 2008 from Kenneth Wexler re tree damage during the June 7 storm.
Received and referred to management.
Letter of August 8, 2008 from Anne Woiwode, Dan Farough, Lana Pollack,John Lindemayer,
Sarah Schillio, and Douglas Chester re resource planning for BWL.
Received and placed on file.
Letter of August 11, 2008 from Ron Byrnes and Jim Dravenstatt-Moceri of Local 352 regarding
suspension of not providing same day service.
Received and referred to management.
Email of August 13, 2008 from Rebecca Payne re new coal-fired power plant.
Received and placed on file.
Letter of September 4, 2008 from Milton DeVinney re a new power plant.
Received and placed on file.
Letter of September 9, 2008 from Ron Byrnes and Jim Dravenstatt-Moceri of Local 352 agreeing
with management's proposal for same day service.
Received and placed on file.
Card of September 19, 2008 from Nancy Lombardi concerning proposed BWL coal plant.
Received and placed on file.
Board Meeting
September 23,2008
Page 4 of 24
Card of September 19, 2008 from Margaret R. Kingsbury concerning proposed BWL coal plant.
Received and placed on file.
Card of September 22, 2009 from Joe Droste concerning proposed BWL coal plant.
Received and placed on file.
Card of September 23, 2008 from Joe Bellgowan concerning proposed BWL coal plant.
Received and placed on file.
Card of September 23, 2008 from Fred Jacobs concerning proposed BWL coal plant.
Received and placed on file.
Card of September 23, 2008 from Hedluu Walton concerning proposed BWL coal plant.
Received and placed on file.
Card of September 23, 2008 from Donald D.Womboldt concerning proposed BWL coal plant.
Received and placed on file.
Card of September 23, 2008 from Emily Woodcock concerning proposed BWL coal plant.
Received and placed on file.
COMMITTEE REPORTS
EXECUTIVE COMMITTEE
August 1, 2008
The Executive Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 11:09 a.m. on Friday, August 1, 2008.
Acting Executive Committee Chair Sandra Zerkle called the meeting to order. The
following members were present: Commissioners James and Zerkle. Commissioners
Robert Cochran and Peter Kramer were also present. The committee did not have
quorum.
Absent: Commissioner Frank Lain.
Public Comments
There were no public comments.
Review General Manager's Contract
The Commissioners present at the Executive Committee meeting unanimously agreed
that the updated contract for the General Manager accurately reflected the resolutions,
which pertained to re-appointment and contract adjustments, approved at the July 22,
2008 board meeting.
There being no further business, the meeting ended at 11:11 a.m.
Board Meeting
September 23,2008
Page 5 of 24
Respectfully submitted,
Sandra Zerkle, Acting Chair
Executive Committee
FINANCE COMMITTEE
August 4, 2008
The Finance Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 4:00 p.m. on Monday, August 4, 2008.
Finance Committee Chair Peter Kramer called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Peter Kramer, Julee Rodocker and Tracy Thomas. Commissioner Frank Lain
was also present.
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Cochran, seconded by Commissioner Rodocker to approve the
minutes of the Finance Committee meeting held July 15, 2008.
Action: Carried unanimously.
External Auditors (SAS 114)
Douglas Rober, Partner with Plante & Moran (P&M) reviewed the planning process for
the audit of the financial statements and related pension plans for the Board of Water and
Light (BWL) for fiscal year end 2008. Jacob Horner of P&M was also present. The
BWL audit engagement letter for the Enterprise Fund and retirement plans include the
Defined Benefit, Defined Contribution and the Retiree Benefit Plan and Trust. The new
Statement of Auditing Standards (SAS) 114 effective the current fiscal audit year of 2008
requires changes relative to board communication. The standard requires formal upfront
communication prior to any significant undertaking of the audit engagement. The
auditors must also have a thorough understanding of internal controls, perform testing of
those controls, and then directly link their observation with how the auditors will test
various accounts. P&M will meet annually with the Finance Committee or the Board of
Commissioners prior to its audit engagement and again following the completion of the
audit.
In response to a Commissioner inquiry, Mr. Rober advised that they are aware that all of
the SAP modules have not been installed. As a result, they track those SAP modules
Board Meeting
September 23,2008
Page 6 of 24
presently in place so that an assessment of the controls for new modules will take place
upon implementation. It was also advised that from year-to-year specific changes in
audit scope and procedures are implemented, which are meant to be unpredictable so that
the routine does not drive the focus of the audit. In response to a Commissioner inquiry,
staff confirmed that they are not aware of any shortcomings in internal controls or
financial reporting that warrant a change in the scope of the audit.
Following the conclusion of the audit process review, Mr. Rober asked the committee
members their views regarding the discussion points.
• The appropriate person(s) with whom to communicate.
• Delegation of responsibilities between the Board of Commissioners, Finance
Committee and that of management.
• Whether or not there are significant matters that warrant attention and/or additional
procedures.
• Concerns related to fraud or other controls.
• Any matters related to communication with outside parties regarding governmental
action or agencies.
The committee indicated that there were no issues relative to fraud and that P&M is
already aware of communication matters with outside parties. After brief discussion, the
committee agreed that they had not gathered consensus amongst the board members
regarding the other aforementioned discussion points and hence may need to add the
topic to a future committee agenda for further review.
A complete copy of the BWL Presentation to the Finance Committee regarding the Audit
of June 30, 2008 Financial Statements &Related Pension Plans is on file in the
Corporate Secretary's office.
Defined Benefit's Investment Policy
Susan Devon, Chief Financial Officer (CFO) gave a brief overview of the Defined
Benefit Investment Policy process. Keith Azar, Micheal Muirhead, and Marie Vanerian
of Merrill Lynch were also present to answer questions if needed. During the past year, a
request for proposal was issued for an investment advisor for the BWL's Defined Benefit
and Post-Employment Benefit Plans respectively. Upon completion of the process,
Merrill Lynch was selected as the investment advisor and staff has since worked with
them regarding the investment policy statement and the asset allocation recommendation.
Revisions to the investment policy statement provide additional clarity, better
understanding of the roles between the Board of Commissioners, the Finance Committee
and Chief Financial Officer, and also includes Public Act 314 requirements. The
proposed asset allocation strategy recommends reducing foreign equity and core fixed
income while increasing large cap equity. Changes to the portfolio will enhance its
efficiency and change the 12.46% current risk and 8.04 % rate of return to 13.00% and
8.20% respectively. It was also noted that the fifth paragraph of the resolution should
read, "amend" as oppose to "rescind".
Board Meeting
September 23,2008
Page 7 of 24
In response to a Commissioner inquiry, Marie Vanerian noted that minor changes to the
policy indicated that thoughtful work had been done in the past and traditionally one
would not see large changes in the asset allocation mix. The work done is very strategic
and they are looking at long-term risk return and correlation of different asset classes
over time. It was further noted that Defined Benefits are a pool of assets that need to
generate income in going forward.
On motion by Commissioner Thomas, seconded by Commissioner Lain to approve the
proposed resolution for the Revised Defined Benefit Plan Investment Policy Statement as
amended and forward it to the full board for consideration and approval.
Action: Carried unanimously.
VEBA Trust Investment Policy
Susan Devon noted that the Defined Benefit Investment Policy is similar to that of the
VEBA Trust Investment Policy. The asset allocation recommendations are more
aggressive with respect to increasing its value, as the Post-Employment Benefit Plan is
currently under funded and annual contributions to the plan will continue to be made.
Changes to the asset allocation mix would occur in the following asset classes: large cap
equity, small cap equity, foreign equity, 3-month T-bill, core fixed income and private
equity. The current asset allocation strategy carries a risk of 11.66% and returns are
7.75%. The asset allocation mix recommended would change the risk and return to
13.00% and 8.20% respectively. It was also advised that the fifth paragraph of the
resolution should read, "amend" as oppose to "rescind".
On motion by Commissioner Cochran, seconded by Commissioner Lain to approve the
proposed resolution for the Revised Post-Employment Benefit Plan (VEBA Trust)
Investment Policy Statement as amended and forward it to the full board for
consideration and approval.
Action: Carried unanimously.
Update on General Motors Steam Settlement
J. Peter Lark, General Manager reported that a settlement had been reached with General
Motors (GM) in regards to the contractual termination fees associated with the cessation
of steam delivery to GM Plants 1 and 6. Mr. Lark thanked Doug Wood, Executive
Director of Operations and Susan Devon, CFO for their hard work regarding this
endeavor. Ms. Devon also noted that total termination fees the BWL can expect to
receive by September 2009 equal $12.8 million.
Commissioners Cochran and Kramer congratulated staff in resolving a long-standing
issue to both the satisfaction of the BWL and the customer.
Bond Resolution— 1999B Bond Refinancing
Susan Devon introduced Bond Advisor Warren Kramer and Bond Attorney Bill Danhoff
who were available to answer questions regarding bond refinancing. As such, Susan
Board Meeting
September 23,2008
Page 8 of 24
Devon explained that the Series 1999B Junior Lien Bonds were used to develop the
Central Utilities Complex at the General Motors Lansing Grand River Facility. The
proposed resolution would allow the BWL to refinance the bonds at a lower interest rate
and reduce the rate covenant from to 150% to 125%, which would reduce the debt service
requirement over the life of the bonds thereby, mitigating the risk. The 1999B Bonds
represents 40% of the BWL's outstanding bonds and GM is responsible for paying the
bond principle and interest. In order to take this action the BWL must receive GM's
consent. As such, GM is supportive of the changes and would like the BWL to move
forward. The interest rate is currently 7.5% with hopes to refinance at a rate between
5.0% - 5.5%.
In response to a Commissioner inquiry, Bill Danhoff reported that in exchange for
reducing the interest rate, GM was asked to make-up the difference in the debt service as
a fee to the BWL. Hence, refinancing the bonds does not jeopardize the BWL's
collection from GM.
On motion by Commissioner Lain, seconded by Commissioner Rodocker to approve the
proposed resolution Authorizing Sale of Refunding Bonds for Series 1999B Junior Lien
Bonds and to forward it to the full board for consideration and approval.
Action: Carried unanimously.
Rate of Return Assets Recommendation
Susan Devon gave an overview of the Return on Assets Research and Recommendation
presentation materials. The proposed resolution recommends using the Utility Financial
Solutions method thereby, changing the overall rate of return for fiscal year 2009 to
6.18% including a return on equity of 6.31%. Utility Financial Services conducts cost of
service studies and rate of return recommendations for municipal utilities located in
Michigan and other areas. Not including investor owned utilities, Michigan's municipals
average a return on equity of 5% - 7%. Net plant financed debt is 30.08% and equity in
assets is 69.92%, which gives a combined weighted average of 6.18% (net plant 1.77%
plus equity in assets of 4.41%). Through research and review, staff recommended the
BWL use a modified Utility Financial Solutions (UFS) method applied to net fixed assets
plus materials and supplies. All of the various rates of return application methods are
reasonable but the UFS method is easily understood and explained to others.
In response to a Commissioner inquiry, Ms. Devon noted that the BWL achieved a rate of
return on electric of 4% and the other utilities are well below that amount. In addition, it
was noted that the Commissioners and staff would have future discussions regarding the
impact of rate adjustments relative to the new rate of return. Following brief discussion,
it was suggested that the resolution language in the last paragraph be changed to read a,
"rate of return target" to reflect the BWL's attempt to meet this respective goal.
On motion by Commissioner Cochran, seconded by Commissioner Thomas to approve
the Return on Assets proposed resolution as amended, and to forward it to the full board
for consideration and approval.
Board Meeting
September 23,2008
Page 9 of 24
Action: Carried unanimously.
There being no further business, the meeting adjourned at 4:55 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
COMMITTEE OF THE WHOLE
September 9, 2008
The Committee of the Whole of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 5:30 p.m. on Tuesday, September 9, 2008.
Committee of the Whole Chair Sandra Zerkle called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Tony
DeLuca, Semone James, Frank Lain, Julee Rodocker and Sandra Zerkle.
Absent: Commissioners Robert Cochran, Peter Kramer and Tracy Thomas.
Public Comments
General Manager J. Peter Lark announced that Senior Internal Control Analyst Kathryn
Krause passed stringent academic, professional, and character requirements to become a
Certified Fraud Examiner CFE). The CFE exam taken by Ms. Krause was comprised of
financial transactions, fraud investigation, legal elements of fraud, and criminology.
Certification in this field denotes proven expertise in fraud prevention, detection,
deterrence, and investigation.
Mr. Lark also announced the upcoming 2nd Annual Connections Live event scheduled for
Monday, September 15, 2008 from 5:30 p.m. to 7:30 p.m. at Dwight Rich Middle School.
The event will be an opportunity to discuss issues such as, energy efficiency, Pennies For
Power, Greenwise program and tree trimming. All Commissioners were invited to
attend.
Approval of Minutes
Motion by Commissioner Lain, seconded by Commissioner DeLuca to approve the
minutes of the Committee of the Whole meeting held July 8, 2008.
Action: Carried unanimously.
Fair and Accurate Credit Transactions Act (FACTA)
Mike Collins, Manager of Internal Controls briefly explained that following the Board of
Commissioners authorization to establish an identity theft program, staff took several
Board Meeting
September 23,2008
Page]0 of 24
steps to design and implement said program. Some of those steps included attending a
FACTA seminar to gain a better understanding of its rules and regulations, the
appointment of Chief Financial Officer Susan Devon as the Board of Water and Light's
(BWL) Privacy Officer, and the establishment of a privacy committee and associate
members. The privacy committee members include Harvey Briggs, Mike Collins,
Brandie Ekren, Gennie Eva, Mike Flowers and Jerry Mills. The associate members who
will also be significantly involved in the programs development and implementation
include Rebecca Bidelman, Laurie Briggs-Dudley, Dallas Burdick, Karen Burdick,
Whitney Ezis, Greg Hess, Kathryn Krause, Anne Stump and Linda Taylor. Staff is in the
process of completing a needs assessment and will develop a training program for
supervisors and essential employees. The program and associated training are designed
to help improve handling and safeguard of personal customer information.
On motion by Commissioner James, seconded by Commissioner Rodocker, the
Committee of the Whole agreed to move the proposed resolution for the Identity Theft
Prevention Program Policy to the full board for consideration and approval.
Action: Carried unanimously.
Record Retention Policy
J. Peter Lark advised that BWL staff members worked with the State of Michigan
Department of History, Arts and Libraries, Records Management Services to develop a
records retention policy. Upon approval by the Board of Commissioners, the retention
policy and disposal schedule will be forwarded to the Records Management Services, the
Archives of Michigan and the State Administrative Board. Mike Collins further noted
that with the assistance of Caryn Wojick from the State of Michigan, a significant amount
of time was spent with staff developing the necessary retention schedules to cover all
BWL critical business functions. Once the approval process is complete, the BWL will
have the legal right to begin disposal of records and will also develop a procedure that
will address the proper disposal mechanism.
On motion by Commissioner Lain, seconded by Commissioner James, the Committee of
the Whole agreed to move the proposed resolution for the Record Retention Policy to the
full board for consideration and approval.
Action: Carried unanimously.
MMEA Mutual Aid Agreement
J. Peter Lark noted that although the BWL was not a participating member of the
Michigan Municipal Electric Association (MMEA) Mutual Aid Agreement several
members came to its aid during the previous storm. There are 29 mutual aid participating
members and the agreement specifically lays out the terms of the program when
municipal utilities assist one another by request. Doug Wood, Executive Director of
Electric Operations advised that the agreement standardizes the relationship between
municipal members during a storm event in regards to payment of labor, material and
Board Meeting
September 23,2008
Page 11 of 24
equipment costs, liability, and indemnification. The agreement is a 30-year term of
which any member can withdraw at anytime.
On motion by Commissioner Lain, seconded by Commissioner Rodocker, the Committee
of the Whole agreed to move the proposed resolution for the MMEA Mutual Aid
Agreement to the full board for consideration and approval.
Discussion: In response to Commissioner inquires, staff confirmed that the mutual aid
agreement works for both the BWL and participating members. Hence, participating
members can contact the BWL for assistance if needed. In the addition, the party
requesting aid also provides the supervision for the parties responding to their call.
Employees are paid at their present rate of pay when assisting another entity and if people
are assisting the BWL then they are also paid at their usual rate of pay including overtime
when applicable. Furthermore, the markup for overhead is 1.5 times the multiplier.
Action: Carried unanimously.
Resolution Honoring Joseph E. Graves,Jr.
Commissioner James noted a correction to the resolution honoring former Commissioner
Joseph E. Graves, Jr. in which the second paragraph should read "At Large Ward" and
not "First Ward".
On motion by Commissioner James, seconded by Commissioner Lain the Committee of
the Whole agreed to move the proposed resolution Honoring Joseph E. Graves, Jr. to the
full board for consideration and approval.
Action: Carried unanimously.
Executive Committee Member Election
Commissioner Lain advised that the Board of Commissioners Executive Committee is in
need of one additional member. In response to Commissioner Lain's inquiry, no one
expressed interest in sitting on said committee.
On motion by Commissioner Lain, seconded by Commissioner James, the Committee of
the Whole nominated Commissioner Peter Kramer to the Board of Commissioners
Executive Committee.
Action: Carried unanimously.
Other
Commissioner Zerkle noted that there was discussion at the July 22, 2008 board meeting
regarding the new procedure for service reconnection. It is her understanding that the
General Manager and IBEW Local 352 representatives met and resolved the issue to the
satisfaction of the customer, employee, and the BWL. As such, Commissioner Zerkle
asked that the letter presented by the IBEW on September 9, 2008 at the Committee of
the Whole meeting be introduced into the minutes.
Board Meeting
September 23,2008
Page 12 of 24
Commissioner DeLuca asked to be excused from the September 23, 2008 board meeting,
as he will be out of town and unable to attend.
There being no further business, the meeting adjourned at 5:56 p.m.
Respectfully submitted,
Sandra Zerkle, Chair
Committee of the Whole
FINANCE COMMITTEE
September 18, 2008
The Finance Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 4:00 p.m. on Thursday, September 18, 2008.
Finance Committee Chair Peter Kramer called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Peter Kramer and Tracy Thomas. Alternate committee member Tony DeLuca
was present in addition to Commissioner Frank Lain.
Absent: Commissioner Julee Rodocker
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Cochran, seconded by Commissioner Thomas to approve the
minutes of the Finance Committee meeting held August 4, 2008.
Action: Carried unanimously.
Presentation of Audited Financial Statements
Susan Devon, Chief Financial Officer(CFO) presented the fiscal year-end June 30, 2008
Audited Financial Statements for the Board of Water and Light (BWL) Enterprise Funds.
In comparison to fiscal year 2007, there was an increase in total net assets of$13.7
million and a return on total net assets of approximately 2.7%. Labor, materials and other
expenses increased due to storm damage that occurred in June 2008. Depreciation
expenses for fiscal year 2008 were also higher, as new plant assets were added and the
SAP financial module was more precise in calculating depreciation as opposed to
previously used manual calculations. In addition, expenses related to fuel, coal, and rail
costs also increased in fiscal year 2008.
Board Meeting
September 23,2008
Page 13 of 24
Doug Rober, Managing Partner with Plante &Moran was also present and distributed
required communication letters for each financial statement that included the Enterprise
Fund, Defined Benefit Plan, Pension Plan and the Retiree Benefit Plan and Trust.
Supplemental materials for the purpose of the presentation were also distributed. Mr.
Rober reviewed the Enterprise Fund financial report, which was an unqualified opinion
on the audit of the enterprise and pension funds. Some of the items specifically
referenced included the environmental remediation costs, General Motors (GM) steam
service termination fees,bond issuance, and emission sales. In addition, Mr. Rober also
reviewed historical information contained within the supplemental report that addressed
the following topics:
• Comparison of Operating Revenue by utility category from 2005 —2008.
• Comparison of Operating Expenses by expense category from 2005 —2008.
• Comparison of Significant Power Costs from 2004—2008.
• Comparison of Operating Income (Loss) from 2004—2008.
• Comparison of Kilowatt Hours Generated Versus Purchased from 2004—2008.
• Comparison of Sales Source of Kilowatt Hours Generated from 2004—2008.
• Comparison of Bond Debt Service Requirements from 2008—2013.
In response to a Commissioner inquiry, Gennie Eva Manager of Financial Services
advised that most of the steam issues over the last 3 years were in relation to a billing
discrepancy and settlement of termination fees with GM. It was noted that since the
closing of GM plants, in going forward, steam billing and accounting treatments should
be consistent. However, the BWL is budgeting a loss in the steam utility. In response to
another inquiry, staff also noted that generated but unsold kilowatt-hours are considered
line loss. BWL line losses are low in comparison to other Michigan utilities, which are
contributed to the age of its infrastructure and the distance needed to travel to deliver
service.
In continuation of the presentation, Mr. Rober also reviewed the management letter that
contained audit comments and recommendations as well as management's response. The
management letter included information relative to the following topics:
• Stores Inventory
• Accounts Receivable
• Capital Assets
• Approval Documentation
• IT Systems
1) Access Termination
2) Segregation of Duties
3) User Access Review
4) Perimeter Controls
5) Authentication Controls—Network and Financial Applications
6) Information Security Program
7) Third-Party Services
• Defined Contribution Loans
Board Meeting
September 23,2008
Page 14 of 24
Emissions Allowances
In response to a Commissioner inquiry, Susan Devon noted that SAP modules were
implemented in April 2007. Hence, stores inventory cycle counting was not in place last
year due to the implementation of the new module. Since the implementation a plan is in
place, staffing levels have increased, and Stores is now able to conduct cycle counting.
Following further discussion, Doug Rober also advised that none of the items in the
management letter are significant deficiencies. The general recommendations provided
in said letter should enhance the controls and structure of the aforementioned items.
Susan Devon also noted that the Internal Controls Department is in the process of
conducting an assessment of capital assets to identify risks and internal controls that need
to put in place. The assessment is scheduled for completion by the end of the year.
In response to a Commissioner Cochran's inquiry, staff confirmed that the auditors'
recommendations would be implemented simultaneously and also assigned to specific
persons, but a timeline had been included. In lieu of developing said timeline,
Commissioner Lain suggested his meeting with the CFO to receive status report updates
regarding the auditors' recommendations.
Presentation of Electric Cost of Service Study
Bill Aldrich, Manager of Finance and Planning gave a brief overview of the Electric Cost
of Service Study—2009 Test Year. The study based on the fiscal year 2009 budget,
estimates the net revenue requirement from retail rates needed to meet net return on
assets. The study also takes into account the new net return on assets rate of 6.18% and
the payment in lieu of taxes rate of 4%. The returns by class of customers recommend a
rate increase to meet the increased revenue requirement. However, the BWL is in good
condition relative to different rate classes, as they do not cross subsidize one another.
In response to a Commissioner inquiry, it was noted the information contained in the
study would be extremely helpful with regard to future rate discussions relative to
splitting rate changes between residential and commercial customers, and service
charges. It was also advised that new proposed Michigan legislation for private utility
companies intended to eliminate cross subsidization would increase residential customer
rates. The legislation would primarily affect DTE and Consumers Energy customers, as
the BWL is in good standing relative to cross subsidization.
Presentation of Environmental Remediation Surcharge Proposal
Susan Devon gave a brief overview regarding Electric and Steam Environmental
Surcharges. It was noted that the BWL has not recognized $15.7 million in expenses for
environmental restoration projects at the North Land Fill and Comfort Street sites, as the
Board of Commissioners gave permission for deferral under FAS 71. Thereby, allowing
customers to pay the expenses through a surcharge over a period of 5 years. The
revenues and expenses can be recognized as they come in which was viewed positively
by the external auditors. Staff proposed a$0.002/kWh electric surcharge to be billed to
all rate classes except that of outdoor protective lighting and street lighting. In addition, a
Board Meeting
September 23,2008
Page 15 of 24
$0.25/Mlb steam surcharge would also be billed to all steam rate classes except that of
GM. The electric and steam surcharge would act similar to that of the energy cost
adjustment and would be included in the commodity charges.
Following brief discussion, staff clarified that there is no action necessary at this time, as
a rate hearing and proposal sheet is needed to move forward. It was also advised that this
is an agenda topic that the Board should expect to see in the future. Staff also understood
from the Commissioners that a bundled package of materials that took into account the
cost of service study would be appropriate for said discussion.
Plan Advisor 40[(a) and 457
Susan Devon briefly reviewed the 401(a) Defined Contribution Pension and 457 Deferred
Compensation Savings Plan Bid Evaluations. Upon conclusion of the review, it was
recommended that the BWL combine the plan administration of both plans under ICMA
—RC due to the best, most cost-effective plan administration services.
On motion by Commissioner Cochran, seconded by Commissioner Lain, the Finance
Committee agreed to move the proposed resolution for the Selection of ICMA as Plan
d Contribution 401(a) and 457 Plans to the full
Administrator for the Combined Define
board for review and consideration.
Discussion: In response to a Commissioner inquiry regarding the effects of the current
market, Susan Devon noted that ICMA is a nonprofit organization and there is nothing
that they are aware of in that regard that would affect the plan. Ms. Devon went onto
advise that she would discuss the matter with ICMA and advise the Board of any
additional information.
Action: Carried unanimously.
Update on Replacement of Cooling Tower
Doug Wood, Executive Director of Electric Operations gave a brief update regarding the
rs due to the June 2008 storm. As such, the following
replacement of the cooling towe
information was provided.
Cooling Towers
Tower removal, temporary cooling tower estimate, and cooling tower replacement
• costs total $3,680,000.
• Insurance proceeds are $734,000.
Estimated cost recovery from FEMA for cooling towers is $2,867,000.
•• Un-recovered costs total an estimated $79,000.
T&D System
• Storm related expenses, which include overtime and direct costs were $1,169,000.
• Estimated FEMA eligible costs for reimbursement are$948,000.
System Totals
Board Meeting
September 23,2008
Page 16 of 24
• Total storm related costs are estimated at $4,848,000.
• Estimated recoverable costs to date are $4,549,000 (dependent upon final costs and
FEMA allowances).
There being no further business, the meeting adjourned at 5:23 p.m.
Respectfully submitted,
Peter W. Kramer, Chair
Finance Committee
MANAGER'S RECOMMENDATIONS
esolution 2008-9-I
A. Identity Theft Prevention Program Policy
WHEREAS, the Fair and Accurate Credit Transactions Act of 2003 (FACT Act of 2003)
amended the Fair Credit Reporting Act of 1970 (FCRA) requiring creditors that maintain
covered accounts to develop and implement a written Identity Theft Prevention Program;
and
WHEREAS, the Board of Commissioners believes a written Identity Theft Prevention
Program consistent with the FACT Act of 2003 may be considered best practices and
appropriate for the Lansing Board of Water and Light;
WHEREAS, the Board of Commissioners have previously designated the General
Manager the oversight, development, implementation and administration of an
appropriate Program to prevent, detect, and mitigate identity theft in connection with
customer accounts;
RESOLVED, that the Board of Commissioners for the Board of Water and Light hereby
adopt the following policy:
Fair and Accurate Credit Transaction Act of 2003 is deemed best
practices. Therefore, the Lansing Board of Water and Light shall establish
and maintain an Identity Theft Prevention Program consistent with the
guidelines set forth in the Fair and Accurate Credit Transaction Act of
2003. The General Manager will appoint a Privacy Officer to administer
the Program.
The Privacy Officer, with assistance from the privacy committee members, is responsible
for developing appropriate written procedures and.
--------------------
Board Meeting
September 23,2008
Page 17 of 24
Motion by Commissioner James, seconded by Commissioner Kramer to approve the
Identity Theft Prevention Program Policy resolution.
Action: Carried unanimously.
esolution 2008-9-2
B. Records Retention Policy and Records Retention and Disposal Schedule
WHEREAS, Michigan law (MCL 399.5 and 750.491)requires that all public records be
listed on an approved Retention and Disposal Schedule that identifies the minimum amount
of time that records must be kept to satisfy administrative, legal, fiscal and historical needs;
and
WHEREAS, the Michigan Freedom of Information Act (FOIA) (MCL 15.231-15.246)
defines public records as recorded information "prepared, owned,used, in the possession
of, or retained by a public body in the performance of an official function, from the time
it is created."
RESOLVED, that the Board of Water and Light Policy 18-01 "Records, Retention" is
hereby amended as follows:
The Board of Water and Light (BWL) shall only retain records during the
period of their immediate use, unless a longer retention period is required
by law or for internal or historical reference. A Records Retention and
Disposal Schedule, as approved by this Board and the Records
Management Services, the Archives of Michigan and the State
Administrative Board, shall specify the length of time records are to be
retained. Where the BWL has knowledge that some records are or may
become relevant to a legal action, such records shall not be destroyed
except and until the legal issues have been resolved and with the approval
of the Staff Attorney.
FURTHER RESOLVED, that the Retention and Disposal Schedule proposed by the
General Manager be approved and forwarded to the Records Management Services, the
Archives of Michigan and the State Administrative Board for their approval.
--------------------
Motion by Commissioner Zerkle, seconded by Commissioner Rodocker to approve the
Records Retention Policy and Records Retention and Disposal Schedule resolution.
Action: Carried unanimously.
esolution 2008-9-
C, MMEA Mutual Aid Agreement
Board Meeting
September 23,2008
Page 18 of 24
WHEREAS, the Lansing Board of Water & Light is a member of the Michigan
Municipal Electric Association (MMEA); and
WHEREAS, from time to time it becomes necessary for members of MMEA to request
emergency assistance in the form of equipment and personnel from other MMEA
members in connection with the operation of their respective electric utilities; and
WHEREAS, MMEA has prepared a standardized written agreement entitled the "MMEA
Mutual Aid Agreement" which sets forth requirements and conditions regarding the
furnishing of emergency assistance by MMEA members to one another; and
WHEREAS, it is advisable and in the best interest of the Lansing Board of Water &
Light to have standardized requirements, obligations and conditions under which
emergency assistance will be furnished to, or may be requested by the Lansing Board of
Water& Light; and
WHEREAS, all of the terms of the MMEA Mutual Aid Agreement are acceptable to the
Lansing Board of Water& Light and are in the best interests of its ratepayers.
WHEREAS, the Lansing Board of Water & Light desires to designate the persons
authorized on its behalf to request emergency assistance or to act on the Lansing Board of
Water & Light's behalf in response to requests for emergency assistance as set forth in
the MMEA Mutual Aid Agreement.
NOW, THEREFORE, BE IT RESOLVED, that the General Manager is authorized to
sign and enter into the MMEA Mutual Aid Agreement, and
The following persons are hereby designated and authorized to request emergency
assistance on behalf of the Lansing Board of Water & Light under the MMEA Mutual
Aid Agreement and to approve requests made to the Lansing Board of Water & Light for
emergency assistance under that agreement. These persons are listed in the specific
descending order in which they are authorized on behalf of the Lansing Board of Water
& Light to request emergency assistance or, alternatively in which they are to be
contacted by another signatory to the agreement, if the person at the top of the list is not
timely available under the applicable circumstances.
1. J. Peter Lark
2. Douglas Wood
3. Timothy Palmer
4. James Macklin
The preceding list may from time to time be amended by the General Manager.
--------------------
Motion by Commissioner Thomas, seconded by Commissioner Cochran to approve the
MMEA Mutual Aid Agreement resolution.
Board Meeting
september 23,2008
Page 19 of 24
Action: Carried unanimously.
esolution 2008-9-
D, Selection of ICMA as Plan Administrator for Combined Define
�._:t.ri utio ((401a) and457 Plans
VVll Ll
A5 Board of Commissioners directed a review of plan administration for the
WHERE ,
Defined Contribution Pension Plan and the 457 Plan; and
sioners
W HEREAS,the Finance Committee of the Board o ov der rs is pension planed that a
Request for Proposals (RFP)be issued to various pr
administration services, and
strators has let to the
WHEREAS, an extensive review of potential plan mbineadminithe plan administration of both
determination that the best course of action is to
cO
the 401a and 457 plans under one administrator; and ers for the Board
NOW THEREFORE BE IT RESOLVED, that
hig Bo determines that ICMA shouldd of Commission
plan
be
of Water and Light of the City of Lansing,
reta
ined as the Plan Administrator for the Combined Defined Contribution Pension
and the 457 Plan.
econded by Commissioner Kramer to approve the
Motion-by Commissioner lan amen,Admi s st ator for Combined DC (401 a) and 457 Plans
Selection of ICM
resolution.
Action: Carried unanimously.
Vesolution 2008-9-
ment Rider for Chilled Water
E. Economic Develo
ering chilled water to customers in the downtown
WHEREAS,the BWL began off
Lansing area in the summer of 2001; and
EAS currently the State of Michigan, Constitution Hall,Michigan Economic
WHERE
Development Corporation and Ingham County Courts are chilled water customers; an
P
ater enances
WHERE ,AS the Economic Development Rider for Chilled Wail eshn the BWL'muc
development by encouraging customers to locate or expand
will result in a net benefit to the BWL and its customers; and
serv
ice area which
acity for the foreseeable future;
WHERE
AS, the BWL will have ample chilled water cap
and
Board Meeting
September 23,2008
WHEREAS, the proposed Economic Development Rider for Chilled Water offerPage'o oeza
discounts to customers on the capacity charges for the first 6 years; and s
WHEREAS, adding new chilled water customers will add to revenues which can
keep rates more stable; and help
WHEREAS, a public hearing on the Economic Development Rider for Chilled W
was held on September 8, 2008. Water
RESOLVED, that the Economic Development Rider for Chilled Water be aPP rov
the Board of Commissioners with an effective date of November 1, 2008. ed by
CHILLED WATER: Economic Development Rate Rider (Attachment)
Motion by Commissioner Cochran, seconded by Commissioner Rodocker to a
Economic Development Rider for Chilled Water resolution. Pprove the
Action: Carried unanimously.
UNFINISHED BUSINESS
Commissioner Cochran inquired as to whether or not it was necessary for the Boa
resurface a previously tabled matter and refer it to committee. rd to
In response Commissioner Lain noted that any Commissioner at anytime could
motion to bring an item off the table. make a
After brief discussion and in an effort to show a clear path of intent, the Board took the
following action: oo
On motion by Commissioner James, seconded by Commissioner Cochran, the B
Commissioners motioned that the resolutions to approve the Corporate Secretary's
oard of
contract and compensation be referred to the
review. Human Resource Committee for further
Action: The motion carried by roll call vote.
Yeas: Commissioners Cochran, James, Kramer, Lain, Rodocker, Thomas and Ze
Nays: None. rkle.
Absent: Commissioner DeLuca.
NEW BUSINESS
None.
Board Meeting
September 23,2008
Page 21 of 24
RESOLUTIONS
esolution 20 88-9-
BOARD OF WATER AND LIGHT
RESOLUTION HONORING JOSEPH E. GRAVES,JR•
sion of our thanks and best
WHEREAS, it is a pleasure to extend this expressioner of the Board of Water
wishes to Joseph E. Graves, Jr., for his service as a Comm
and Light; and Commissioner of the
Jr.,WHEREAS, Joseph E. Graves, was appointed as a
Board si g. D
Water and Light on April 11, 2005,to represent the At
Large Ward
dtn the City
of Lansing. During his time n the Board, o served on the oneRules
s
' e Human Resources Committee, Ad-Hoc Committee on the Rules of
Executive Commttte ,
Administrative Procedure, and the Ad-Hoc CPa Chair Eletee for ct;and
Development;
also served as Finance Committee Chair and t with City of Lansing as
WHEREAS, Joseph E. Graves, Jr.,past employmen
and with the State of Michigan, as Chief Deputy
Director
r ct hos the
numerous
y
Chief of Staff, Community Black Child
Services Administration,Michigan Department of Social
Big Brothers and Big
community organizations such as the Child Abuse and Neglect,Concerns, n
and Family Institute, Council Agains
g Food
Sisters,National Association for AdvancemenUocColored ll contributed torenhancing the
Bank, and is a member of Mt. Zion Baptist
quality of
life at the Board of Water and Light and the best interest of citizens,business,
and industry in Lansing; and
WHEREAS, on behalf of his colleagues, employees of the Board of Water
W gratitude for the time, energy,
and Light and the citizens of Lansing,
of the Board of Water and Light.
and talent he devoted as a
reby honor and commend
d service. In Regular Session
RESOLVED,That the members of this board he
Joseph E. Graves, Jr. for his over three years of distinguished
3rd da of September 2008, we wish Joe continued success in all his future
this 2 Y
endeavors.
BOARD OF COMMISSIONERS
Sandra Zerkle,Vice Chair
Frank Lain
Tony DeLuca
Robert W. Cochran
Board Meeting
September 23,2008
Page 22 of 24
Semone M. James, Past Chair
Peter W. Kramer
Julee M. Rodocker
Tracy Thomas
Motion by Commiss
resolut loner James, seconded by Commissioner Kramer
ion Honoring Joseph E. Graves, Jr. to approve the
Action: Carried unanimously.
MANAGER'S REMARKS
Chilled Water Groundbreaking. General Manager J. Peter Lark thanked those who were
in attendance for the Chilled Water Groundbreakin
g. He noted the undertaking by staff and also thanked those who were involved in coordinating
ating the event.
COMMISSIONERS' REMARKS
In response to public comments, Commissioner Zerkle indicated that future informal
public comments are received for rie
the record, ta neration are g
meetings with dialogue regarding
b She also noted that
ken very seriously,Board of Commissioners. y, and reviewed by the
Commissioner Lain echoed Co
mmissioner Zerkle,s sentiments and thanked the public for
their comments. He clarified that thepurpose
information. In addition Co ain also
comment is to receive
d note thatner Lain also advised that there would be
Opportunities for dialogue and noted that the Board is very interested in what t
has to say.
he public
Commissioner Thomas thanked those who made remarks during public comment. He
advised that the Board of Commissioners are listening to the public and
take comments seriously. Commissioner Thomas also thanked General Manager their
staff for their efforts regarding the Chilled Water Groundbreakingand of
b ark and
Commissioner James advised that former Commissioner her tasks.
as he served the City of Lansing well through his expertise, mental agility,
would spirited
missed
debate. Commissioner James also noted that Mr. Graves was a fine Commissioner and spirited
person, and she wished him well in all his future endeavors. mrrussioner and
Commissioner Lain echoed Commissioner James' sentiment and noted
that former
Commissioner Joseph Graves is a beautiful person who will be missed.
Board Meeting
September 23,2008
Page 23 of 24
EXCUSED ABSENCE
On motion by Commissioner James, seconded by Commissioner Cochran to excuse the
absence of Commissioner Tony DeLuca.
Action: Carried unanimously.
PUBLIC COMMENTS
None.
ADJOURNMENT
On motion by Commissioner Cochran, seconded by Commissioner Thomas, the meeting
adjourned at 6:15 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
October 2, 2008
Board Meeting
September 23,2008
Page 24 of 24
Board of Water and Light, Lansing, Michigan—Chilled Water Rates
ECONOMIC DEVELOPMENT RIDER FOR CHILLED WATER
Purpose—The primary purpose of this rider is to enhance economic development in the
Board of Water& Light (BWL) service area. It will be offered to new customers when,
in the utility's judgment, the availability of the rider is a major factor for the customer
choosing to take chilled water service and will result in a net benefit to the BWL and its
customers.
Availability—The rider is available to new commercial and industrial customers that
qualify for General Chilled Water Service Rate No. 1. This rate would be available for
the first six years from the date of the contract. All provisions of this rider are the same
as the General Chilled Water Rate No. 1 with the following exceptions:
Monthly Rate
Capacity Charge: A discount on the capacity charge will be made available under this
rider. The capacity charge per ton will be as follows:
Contract Year Capacity Charge (per ton)
1 - 2 $10.00
3 - 4 $20.00
5 - 6 $30.00
At the start of the seventh year and all years thereafter, the customer will be billed the
standard capacity charge as listed in the General Chilled Water Service Rate 1.
Adopted: September 23, 2008 Effective: November 1, 2008
Approved by the Board: September 23, 2008
MINUTES OF THE BOARD OF COMMISSIONERS SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
rh /J
Tuesday, August 12, 2008 c t
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing,
Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Semone James, Peter
Kramer, Frank Lain, Julee Rodocker, Tracy Thomas and Sandra Zerkle.
Absent: None
The Secretary declared a quorum present.
Chairperson fames Lain called the meeting to order at 5:30 p.m.
PUBLIC COMMENT
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE
WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO
SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
COMMUNICATIONS
Letter from Ron Byrnes, IBEW Local 352 Business Manager and Jim Dravenstatt-
Moceri, Assistant Business Manager regarding same day service.
The letter was read into the record and received and placed on file.
Commissioner Cochran expressed concern over new policies not brought before the
Board of Commissioners in light of current customer relations. He requested that the
Board be involved in the decision-making process prior to implementation.
Commissioner James echoed Commissioner Cochran's sentiments and inquired why,
given the effect upon ratepayers, the Board was not involved. Commissioner James
requested that implementation of the new change not take place as presented.
Special Board Mtg.
August 12,2008
Page 2 of 22
General Manager J. Peter Lark clarified that the change was operational in nature and
within management's judgment. He further highlighted the change improves efficiency
and safety, reduces overtime, and saves approximately$70,000 a year. Because the
Board of Water and Light (BWL) does not turn-off service for non-payment on Friday's,
customers have a full business day to make payment and have service restored the same
day when possible. Mr. Lark advised that the change was not scheduled to take place as
of yet. Therefore, while he thought this to be good policy, he was confident there was
time to amicably resolve any particular issues in order to ensure the BWL realizes
savings while providing utmost customer service. Lark also advised that he intended to
have continued discussion with union representatives.
In response to Commissioner inquiries, Mr. Lark highlighted that all customers are
affected by the policy. Making decisions that benefit most customers while saving
money requires the balancing of interests. Mr. Lark advised that he would make a better
effort in understanding those matters that affect the Board. In addition, Mr. Lark
confirmed that the policy would not go into effect at this time.
Commissioner Lain asked that when the General Manager deems necessary, the Board of
Commissioners should receive 48-hours notice prior to implementing changes that affect
the end-user. It was also agreed that this matter would be referred to the Committee of
the Whole for further discussion if necessary.
MANAGER'S RECOMMENDATIONS
esolution 2008-8-1
A. Revised Defined Benefit Plan Investment Policy Statement
Whereas, the Board has engaged Merrill Lynch Institutional Consulting Group to provide
consulting advisory services to the Defined Benefit Plan for Employees' Pension
regarding Investment Policy Statement review; Strategic Asset Allocation Modeling;
Investment Manager due diligence, search, and selection; Portfolio Strategy and
Performance Measurement; and
Whereas, on July 15, 2008 Merrill Lynch Institutional Consulting Group updated the
Finance Committee on the results of its Asset Allocation Study for the Defined Benefit
Plan that was completed utilizing its Strategic Allocation Modeling technique to
determine a long range asset mix that represents an appropriate blend of risk and return;
and
Whereas, the Trustees of Lansing Board of Water and Light Defined Benefit Plan for
Employees' Pension, consisting of all members of the Board of Commissioners, desire to
revise the asset allocation mix for the investments in the Trust Fund; and
Whereas, the Board of Commissioners desire to update the Investment Policy Statement
for the Lansing Board of Water and Light Defined Benefit Plan for Employees' Pension
Special Board Mtg.
August 12,2008
Page 3 of 22
consistent with recommendations provided by Merrill Lynch Institutional Consulting
Group.
RESOLVED, That the Board of Commissioners amend the resolution dated March 27,
2007, adopting policy changes to the Defined Benefit Investment Policy; and
FURTHER RESOLVED, that the Board of Commissioners hereby approve the amended
Investment Policy Statement for Lansing Board of Water and Light Defined Benefit Plan
for Employees' Pension dated July 2008, as attached.
--------------------
Motion by Commissioner Cochran, seconded by Commissioner James to approve the
resolution for the Revised Defined Benefit Plan Investment Policy Statement.
Action: Carried unanimously.
esolution 2008-
B. Revised Post-Employment Benefit Plan (VEBA Trust) Investment Policy
Statement
Whereas, the Board has engaged Merrill Lynch Institutional Consulting Group to provide
consulting advisory services to the Post-Employment Benefit Plan (VEBA) regarding
Investment Policy Statement review; Strategic Asset Allocation Modeling; Investment
Manager due diligence, search, and selection; Portfolio Strategy and Performance
Measurement; and
Whereas, on July 15, 2008 Merrill Lynch Institutional Consulting Group updated the
Finance Committee on the results of its Asset Allocation Study for the Post-Employment
Benefit Plan (VEBA) that was completed utilizing its Strategic Allocation Modeling
technique to determine a long range asset mix that represents an appropriate blend of risk
and return; and
Whereas, the Trustees of Lansing Board of Water and Light Post-Employment Benefit
Plan (VEBA), consisting of all members of the Board of Commissioners, desire to revise
the asset allocation mix for the investments in the Trust Fund; and
Whereas, the Board of Commissioners desire to update the Investment Policy Statement
for the Lansing Board of Water and Light Post-Employment Benefit Plan (VEBA)
consistent with recommendations provided by Merrill Lynch Institutional Consulting
Group.
RESOLVED, that the Board of Commissioners amend the resolution dated March 27,
2007, adopting policy changes to the VEBA Trust Investment Policy; and
FURTHER RESOLVED, that the Board of Commissioners hereby approve the amended
Investment Policy Statement for Lansing Board of Water and Light Post-Employment
Benefit Plan (VEBA) dated July 2008, as attached.
Special Board Mtg.
August 12,2008
Page 4 of 22
--------------------
Motion by Commissioner Cochran, seconded by Commissioner James to approve the
resolution for the Revised Post-Employment Benefit Plan (VEBA Trust) Investment
Policy Statement.
Action: Carried unanimously.
esolutiou 2008-8-3
C. Sale of Refunding 1999B Bonds
RESOLUTION AUTHORIZING SALE OF REFUNDING BONDS
UNDER FOURTH SUPPLEMENTAL REVENUE BOND RESOLUTION
A RESOLUTION TO:
• Refund the Subordinate Lien Revenue Bonds, Series 1999B (Federally
Taxable) through issuance of up to $60,000,000 of Subordinate Lien Revenue
Refunding Bonds (Federally Taxable);
• Create and Fund the Series 2008B Junior Lien Bond Reserve Account;
• Reduce future Rate Covenant to 125% of debt service;
• Refunding Bonds to be sold by Negotiated Sale;
• Chief Financial Officer to Select Underwriters of Bonds;
• Chief Financial Officer to sell Bonds within parameters of this resolution; and
• Other matters relative to issuance, sale and delivery of Bonds.
WHEREAS, the City of Lansing acting by and through the Lansing Board of Water and
Light has previously issued its revenue bonds payable from revenues of the Water
Supply, Steam, Chilled Water and Electric Utility System under the provisions of Act 94,
Public Acts of Michigan, 1933, as amended, and a Bond Resolution amended and
restated on October 24, 1989 and further amended and supplemented as described under
the definition"Bond Resolution"below; and
WHEREAS, under the terms of the Fourth Supplemental Revenue Bond Resolution
adopted October 26, 1999 and a Sales Resolution adopted by the Board on
November 30, 1999, the Board has heretofore issued and sold Water Supply, Steam and
Electric Utility System Subordinate Lien Revenue Bonds, Series 1999B (Federally
Taxable) (the "Series 1999B Bonds") in the aggregate principal sum of$78,455,000 for
the purpose of financing the construction and equipping of a central utilities complex
to provide hot water, chilled water, deionized water, compressed air and wastewater
treatment, among other utility services (the "Series 1999B Project"); and
WHEREAS, the Board's Financial Advisor, Robert W. Baird & Co. has advised the
Board that it may be able to accomplish a net savings of debt service costs, and thereby
reduce the cost to the Board of the Series 1999B Project, by refunding all or a portion of
the outstanding Series 1999B Bonds through the issuance of revenue refunding Bonds in
Special Board Mtg.
August 12,2008
Page 5 of 22
an aggregate principal amount of not-to-exceed $60,000,000 (the "Series 2008B Bonds");
and
WHEREAS, Section 20(b) of the Fourth Supplemental Revenue Bond Resolution
authorizes the issuance of Additional Junior Lien Bonds of equal standing and priority of
lien with the outstanding Series 1999B Bonds for the purposes of refunding a part of the
Series 1999B Bonds and paying costs of issuance 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; and
WHEREAS, in order to take advantage of the most favorable market for sale of the
Series 2008B Bonds and purchase of securities to be escrowed for payment of the
Series 1999B Bonds to be refunded, the Board wishes to authorize the Chief Financial
Officer to sell the Series 2008B Bonds at negotiated sale without further resolution of the
Board.
NOW, THEREFORE, BE IT RESOLVED THAT:
Section 1. Supplemental Resolution. The Fourth Supplemental Revenue
Bond Resolution is hereby amended and supplemented by this Resolution Authorizing
Sale of Refunding Bonds in accordance with Section 20(b) of the Fourth Supplemental
Revenue Bond Resolution and Section 23(a)(1) of the amended and restated Bond
Resolution.
Section 2. Definitions. All terms not defined herein shall have the meanings
set forth in the Bond Resolution, and whenever used in this Bond Resolution, except
when otherwise indicated by the context, the following terms shall have the following
meanings:
(a) "Additional Junior Lien Bonds" means Additional Junior Lien Bonds
issued pursuant to Section 20 of the Fourth Supplemental Revenue Bond
Resolution and Section 11 of this Resolution of equal standing and priority
of lien with the Series 1999B Bonds and the Series 2008B Bonds.
(b) "Bond Resolution" means the Bond Resolution adopted by the Board on
September 26, 1989, as amended and restated on October 24, 1989 and
supplemented by the First Supplemental Revenue Bond Resolution
adopted by the Board on October 26, 1993, the Second Supplemental
Revenue Bond Resolution adopted by the Board on January 11, 1994, the
Third Supplemental Revenue Bond Resolution adopted on September 2,
1999, the Fourth Supplemental Revenue Bond Resolution adopted
October 26, 1999, the Series 1999B Sales Resolution adopted by the
Board on November 30 1999, the Fifth Supplemental Bond Resolution
adopted by the Board on April 24, 2001, the Sixth Supplemental Revenue
Bond Resolution adopted by the Board on July 23, 2002, the Seventh
Supplemental Bond Resolution adopted by the Board on July 23, 2002, the
Eighth Supplemental Revenue Bond Resolution adopted on August 12,
2003, the Ninth Supplemental Revenue Bond Resolution adopted on July
26, 2005, the Tenth Supplemental Revenue Bond Resolution adopted on
Special Board Mtg.
August 12,2008
Page 6 of 22
January 29, 2008, and this Resolution Authorizing Sale of Refunding
Bonds, and any other resolution which amends or supplements the Bond
Resolution.
(c) "Chief Financial Officer"means the Chief Financial Officer of the Board.
(d) "Junior Lien Bond and Interest Redemption Fund" means the Junior Lien
Bond and Interest Redemption Fund established under Section 11C of the
amended and restated Bond Resolution and Section 5 of the Fourth
Supplemental Revenue Bond Resolution.
(e) "Junior Lien Bond Reserve Requirement" means the Reserve Requirement
determined to be necessary to sell the Series 2008B Bonds in consultation
with the Board's Financial Advisor as provided in Section 7 of this
Resolution.
(f) "Junior Lien Bonds" means the Series 1999B Bonds, the Series 2008B
Bonds, and any Additional Junior Lien Bonds of equal standing hereafter
issued as permitted by Section 20(b) of the Fourth Supplemental Revenue
Bond Resolution and Section 11 of this Resolution.
(g) "Senior Lien Bonds" means the Water Supply, Steam and Electric Utility
System Revenue Bonds, Series 1999A, the Water Supply, Steam and
Electric Utility System Revenue Bonds, Series 2002A, the Water Supply,
Steam and Electric Utility System Revenue Bonds, Series 2002B, the
Water Supply, Steam and Electric Utility System Revenue Bonds, Series
2003A, and the Water Supply, Steam and Electric Utility System Revenue
Bonds, Series 2005A, and the Water Supply, Steam, Chilled Water and
Electric Utility System Revenue Bonds, Series 2008A and any Additional
Bonds hereafter issued of equal standing to the Senior Lien Bonds.
(h) "Series 1999B Bonds" means the Water Supply, Steam and Electric
Utility System Subordinate Lien Revenue Bonds, Series 1999B (Federally
Taxable)being refunded pursuant to this Resolution.
(i) "Series 1999B Escrow Agreement" means the Series 1999B Escrow
Agreement described in this Resolution to provide for payment of
principal of and interest on the Series 1999B Bonds.
(j) "Series 1999B Escrow Fund" means the Series 1999B Escrow Fund
established pursuant to the Series 1999B Escrow Agreement to hold the
cash and investments necessary provide for payment of principal of and
interest on the Series 1999B Bonds.
(k) "Series 1999B Project" means the construction and equipping of a central
utilities complex to provide hot water, chilled water, deionized water,
compressed air and wastewater treatment, among other utility services,
financed by the Series 1999B Bonds and re-financed by the Series 2008B
Bonds.
Special Board Mtg.
August 12,2008
Page 7 of 22
(1) "Series 2008B Bonds" means the Water Supply, Steam, Chilled Water and
Electric Utility System Subordinate Lien Revenue Refunding Bonds,
Series 2008B (Federally Taxable).
(m) "Series 2008B Junior Lien Bond Reserve Account" means the
Series 2008B Junior Lien Bond Reserve Account created within the Junior
Lien Bond and Interest Redemption Fund under Section 7 of this
Resolution.
(n) "System" means the complete facilities of the Board for the supply and
distribution of water and the generation and distribution of electricity,
steam, chilled water, and heat, including all plants, works,
instrumentalities and properties, used or useful in connection with the
supply and distribution of water and the generation and distribution of
electricity, steam, chilled water, and heat and all additions, extensions and
improvements thereto existing or hereafter acquired by the Board.
(o) "Utility Services Agreement" means the Utility Services Agreement as
amended by the First Amended and Restated Utility Services Agreement
dated August 12, 2004 relating to the Series 1999B Project among
Trigen/Cinergy— Solutions USFOS of Lansing, LLC, and the City acting
by and through the Board, and General Motors Corporation, Worldwide
Facilities Group, Lansing Luxury Assembly Plant.
Section 3. Conditions Permitting Issuance of Additional Bonds. Pursuant to
Section 20(b) of the Fourth Supplemental Revenue Bond Resolution, the Board hereby
determines that the Series 2008B Bonds shall be issued as Additional Junior Lien Bonds
for the purpose of refinancing the Series 1999B Project by refunding all or a portion of
the Series 1999B Bonds and paying costs of issuance of the Series 2008B Bonds, only 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 4. Refunding of Series 1999B Bonds; Series 2008B Bonds
Authorized; Priority of Lien; Applicable Law. To pay costs of refunding all or a portion
of the Series 1999B Bonds, including the payment of the costs of legal, financial, bond
insurance (if any), underwriter's discount and other expenses incident thereto and
incident to the issuance and sale of the Series 2008B Bonds, the City, acting by and
through the Board, shall borrow the sum of not-to-exceed Sixty Million Dollars
($60,000,000) as finally determined upon the sale thereof, and issue the Series 2008B
Bonds therefor. The Series 2008B Bonds shall be payable solely out of the Net Revenues
of the System subject in priority only to the statutory lien with respect to the Senior Lien
Bonds. The statutory lien on Net Revenues which is hereby established and pledged to
secure payment of the Series 2008B 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. The Series 2008B Bonds shall have equal standing
and priority of lien to the statutory lien on the Net Revenues of the System with any
portion of the Series 1999B Bonds which are not paid in full or defeased. The Lansing
City Council shall not be requested to pledge the full faith and credit of the City for
Special Board Mtg.
August 12,2008
Page 8 of 22
payment of the Series 2008B Bonds. The Series 2008B Bonds shall be sold and the
proceeds applied in accordance with the provisions of Act 94.
Section 5. Series 2008B Bond Details, Registration and Execution. The
Series 2008B Bonds shall be designated as the "WATER SUPPLY, STEAM, CHILLED
WATER AND ELECTRIC UTILITY SYSTEM SUBORDINATE LIEN REVENUE
REFUNDING BONDS, SERIES 2008B (FEDERALLY TAXABLE)." The
Series 2008B Bonds shall be issued as fully registered bonds registered in the
denomination of $5,000 or integral multiples thereof and shall be numbered in
consecutive order of registration or authentication from 1 upwards. The Series 2008B
Bonds shall be dated as of the Date of Delivery thereof or such other date as determined
at the time of sale of the Series 2008B Bonds, shall mature as serial bonds or term bonds
on such dates as shall be determined at the time of sale of the Series 2008B Bonds but
not-to-exceed eight (8) annual maturities.
The Series 2008B Bonds shall bear interest at a rate or rates to be determined on
sale thereof, payable on January 1, 2009, or such other date as provided at the time of sale
of the Series 2008B Bonds, and semi-annually thereafter on January 1st and July 1st of
each year.
The Series 2008B Bonds shall be subject to optional or mandatory redemption
prior to maturity at the times and prices finally determined at the time of sale of the
Series 2008B Bonds. The Chief Financial Officer may determine that the Series 2008B
Bonds shall not be subject to optional or mandatory redemption prior to maturity.
The Series 2008B Bonds shall be executed by the manual or facsimile signature
of the Chairperson and the Corporate Secretary of the Board. No Series 2008B Bond
shall be valid until authenticated by an authorized representative of the Transfer Agent.
The Series 2008B Bonds shall be delivered to the Transfer Agent for authentication and
be delivered by the Transfer Agent to the purchaser in accordance with instructions from
the Chief Financial Officer upon payment of the purchase price for the Series 2008B
Bonds in accordance with the bid therefor when accepted. Executed blank bonds for
registration and issuance to transferees shall be delivered to the Transfer Agent for
safekeeping from time to time as necessary.
Section 6. Registration and Transfer. The bank or trust company serving as
registrar and Transfer Agent for the Series 1999B Bonds is hereby designated as transfer
agent for the Series 2008B Bonds (the "Transfer Agent"). The Chief Financial Officer is
hereby authorized to execute one or more agreements with the Transfer Agent on behalf
of the Board. The Board reserves the right to replace the Transfer Agent at any time,
provided written notice of such replacement is given to the registered owners of record of
bonds not less than sixty (60) days prior to an interest payment date. Principal of and
interest on the Series 2008B Bonds shall be payable by check or draft mailed by the
Transfer Agent to the registered owner at the registered address as shown on the
registration books of the Board maintained by the Transfer Agent. Interest shall be
payable to the person or entity who or which is the registered owner of record as of the
fifteenth (15th) day of the month prior to the payment date for each interest payment.
The date of determination of the registered owner for purposes of payment of interest as
Special Board Mtg.
August 12,2008
Page 9 of 22
provided in this paragraph may be changed by the Board to conform to market practice in
the future.
The Series 2008B Bonds may be issued in book-entry-only form through The
Depository Trust Company in New York, New York ("DTC"), and the Chief Financial
Officer is authorized to execute such custodial or other agreement with DTC as may be
necessary to accomplish the issuance of the Series 2008B Bonds in book-entry-only form
and to make such changes in the form of the Series 2008B Bonds within the parameters
of this Resolution as may be required to accomplish the foregoing. Notwithstanding the
foregoing, if the Series 2008B Bonds are held in book-entry-only form by DTC, payment
of principal of and interest on the Series 2008B Bonds shall be made in the manner
prescribed by DTC.
The Series 2008B Bonds may be transferred upon the books required to be kept
by the Transfer Agent pursuant to this section by the person or entity in whose name it is
registered, in person or by the registered owner's duly authorized attorney, upon
surrender of the bond for cancellation, accompanied by delivery of a duly executed
written instrument of transfer in a form approved by the Transfer Agent. Whenever any
bond shall be surrendered for transfer, the Board shall execute and the Transfer Agent
shall authenticate and deliver a new bond of the same series in like aggregate principal
amount, maturity and interest rate. The Transfer Agent shall require the payment by the
bondholder requesting the transfer of any tax or other governmental charge required to be
paid with respect to the transfer. Notwithstanding the foregoing, if Bonds are held by
DTC in book-entry-only form, the transfer of Bonds shall be made in the manner
prescribed by DTC.
Upon payment by the Board of all outstanding principal of and interest on the
Series 2008B Bonds, the registered owner thereof shall deliver the Series 2008B Bonds to
the Board for cancellation.
Section 7. Reserve Requirement Determined; Reserve Account Established
and Funded. The Surety Bond issued by MBIA Insurance Corporation, the "Bond
Insurer" as defined in the Fourth Supplemental Revenue Bond Resolution, which Surety
Bond is on deposit in the Junior Lien Bond Reserve Account established under the Fourth
Supplemental Revenue Bond Resolution for the Series 1999B Bonds, does not secure the
Series 2008B Bonds.
On or prior to the sale of the Series 2008B Bonds, the Chief Financial Officer
shall obtain a recommendation from Robert W. Baird & Co., the Board's Financial
Advisor, regarding the amount which the Board should pledge to maintain as the Junior
Lien Bond Reserve Requirement in order to sell the Series 2008B Bonds, and the Chief
Financial Officer is hereby authorized to determine the Junior Lien Bond Reserve
Requirement for the Series 2008B Bonds based upon the recommendation from the
Financial Advisor in an amount not to exceed one-half of the maximum Aggregate Debt
Service Requirement of the Junior Lien Bonds.
The Series 2008B Junior Lien Bond Reserve Account is hereby established in the
Junior Lien Bond and Interest Redemption Fund as separate account separate from the
Junior Lien Bond Reserve Account established under the Fourth Supplemental Revenue
Bond Resolution with respect to the Series 1999B Bonds. On or prior to the date of
Special Board Mtg.
August 12,2008
Page 10 of 22
delivery of the Series 2008B Bonds, the Chief Financial Officer shall deposit into the
Series 2008B Junior Lien Bond Reserve Account any amount necessary to cause the
amount on deposit in the Series 2008B Junior Lien Bond Reserve Account to be equal to
the Junior Lien Bond Reserve Requirement for the Series 2008B Bonds. The Board may
meet the Junior Lien Bond Reserve Requirement for the Series 2008B Bonds by a letter
of credit, a surety bond, or an insurance policy if the provider or issuer thereof shall be
rated AAA by Moody's Investors Service and Standard and Poor's Corporation or any
successor to either. Except as hereinafter provided, the moneys credited to the
Series 2008B Junior Lien Bond Reserve Account shall be used solely for the payment of
the principal of, redemption premiums (if any) and interest on the Series 2008B Bonds as
to which there would otherwise be a default. If at any time it shall be necessary to use
moneys credited to the Series 2008B Junior Lien Bond Reserve Account for such
payment, then the moneys so used shall be replaced from the Net Revenues first received
thereafter which are not required for expenses of administration, operation and
maintenance of the System, for current principal and interest requirements of any Bonds
issued under the Bond Resolution, or for deposit to the Bond Reserve Account securing
the Senior Lien Bonds. At any time that the amount of the Series 2008B Junior Lien
Bond Reserve Account is in excess of the Junior Lien Bond Reserve Requirement for the
Series 2008B Bonds, whether as a result of investment earnings or any other reason, such
excess shall be deemed to be surplus moneys and may be transferred to such fund or
account as the Board shall direct. Upon payment or defeasance in full of the
Series 2008B Bonds the amount in deposit in the Series 2008B Junior Lien Bond Reserve
Account shall be deemed to be surplus moneys and may be transferred to such fund or
account as the Board shall direct.
Section 8. Series 2008B Bond Proceeds. From the proceeds of sale of the
Series 2008B Bonds there first 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 2008B Bonds, and the Board may take credit for
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 maturing interest on the
Series 2008B Bonds; provided, however, that at the discretion of the Chief Financial
Officer, all or a portion of any premium received upon delivery of the Series 2008B
Bonds may be deposited in the Bond Reserve Account or the Series 1999B Escrow Fund
in consultation with Bond Counsel.
There shall next be deposited in the Series 2008B Junior Lien Bond Reserve
Account an amount, if any, designated by the Chief Financial Officer at the time of sale
of the Series 2008B Bonds as necessary to cause the amount on deposit in the
Series 2008B Junior Lien Bond Reserve Account to be equal to the Junior Lien Bond
Reserve Requirement for the Series 2008B Bonds.
There shall next be deposited in the Series 1999B Escrow Fund cash and
investments in direct obligations of or obligations the principal of and interest on which
are unconditionally guaranteed by the United States of America, not redeemable at the
option of the issuer, and in an amount sufficient to pay principal and interest on the
Series 1999B Bonds being refunded. The Series 1999B Escrow Fund shall be held by the
Escrow Agent (defined below) in trust pursuant to the Series 1999B Escrow Agreement
Special Board Mtg.
August 12,2008
Page 11 of 22
which shall irrevocably direct the Escrow Agent to take all necessary steps to call the
Series 1999B Bonds being refunded for redemption as specified in the Series 1999B
Escrow Agreement. The cash and investments and income received thereon held in the
Series 1999B Escrow Fund will be sufficient without reinvestment to pay the principal
and interest on the Series 1999B Bonds upon call for redemption as required by this
section. The bank or trust company serving as registrar and Transfer Agent for the
Series 1999B Bonds is hereby designated as Escrow Agent under the Series 1999B
Escrow Agreement.
Either the Chief Financial Officer or the Manager of Finance and Planning is
hereby authorized to execute and deliver the Series 1999B Escrow Agreement and to
purchase, or cause to be purchased, escrow securities in an amount sufficient to fund the
Series 1999B Escrow Fund.
The remaining proceeds of the Series 2008B Bonds shall be deposited in a fund
which may be established in the Series 1999B Escrow Agreement to pay costs of
issuance of the Series 2008B Bonds and the costs of refunding the Series 1999B Bonds.
Section 9. Rate Covenant. After payment or defeasance in full of the
Series 1999B Bonds, the Board will at all times fix, establish, maintain and collect rates,
fees and charges for the sale of the output, capacity, use or service of the System which,
together with other income, are reasonably expected to yield Net Revenues equal to at
least 125% of the Aggregate Debt Service Requirement for the forthcoming twelve
month period plus such amount as is necessary to comply with all covenants in the Bond
Resolution and to pay all charges and liens whatsoever payable out of Net Revenues in
such period. The Rate Covenant applicable to the Outstanding Senior Lien Bonds shall
remain in effect as provided in the resolution authorizing the Outstanding Senior Lien
Bonds.
Section 10. Series 2008B Bond Form. The Series 2008B Bonds shall be in
substantially the following form with such revisions, additions and deletions as the Board
may deem advisable or necessary to comply with the final terms of the Series 2008B
Bonds established upon sale thereof-
Special Board Mtg.
August 12,2008
Page 12 of 22
BOND NO.
R-
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTIES OF INGHAM AND EATON
CITY OF LANSING
LANSING BOARD OF WATER AND LIGHT
WATER SUPPLY, STEAM, CHILLED WATER AND ELECTRIC UTILITY SYSTEM
SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES 2008B
(FEDERALLY TAXABLE)
Date of
Interest Rate Date of Maturity Original Issue CUSIP
% July 1, 20 , 2008
Registered Owner: Cede & Co.
Principal Amount: ($ ) Dollars
The City of Lansing, Counties of Ingham and Eaton, State of Michigan (the
"City"), acting by and through the Lansing Board of Water and Light (the "Board"),
acknowledges itself to owe and for value received hereby promises to pay to the
Registered Owner specified above, or registered assigns, only from the Net Revenues of
the System as hereinafter provided, the Principal Amount specified above, in lawful
money of the United States of America, on the Date of Maturity specified above, unless
prepaid prior thereto as hereinafter provided, with interest thereon (computed on the basis
of a 360-day year of twelve 30-day months) from the Date of Original Issue specified
above or such later date to which interest has been paid, until paid, at the Interest Rate per
annum specified above, first payable on 1, 2009 and semiannually thereafter.
Principal of this bond is payable at the designated corporate trust office of
or such other transfer agent as the Board may
hereafter designate by notice mailed to the registered owner of record not less than sixty
(60) days prior to any interest payment date (the "Transfer Agent"). Interest on this bond
is payable by check or draft mailed by the Transfer Agent to the person or entity who or
which is as of the fifteenth (15th) day of the month prior to each interest payment date,
the registered owner of record at the registered address. For the prompt payment of
principal and interest on this bond, the revenues received by the Board from the
operations of the water supply and electric utility systems including the steam, steam heat
and chilled water distribution systems (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
subject only to the lien in favor of the Water Supply, Steam and Electric Utility System
Revenue Bonds, Series 1999A, Water Supply, Steam and Electric Utility System
Revenue Bonds, Series 2002A, Water Supply, Steam and Electric Utility System
Special Board Mtg.
August 12,2008
Page 13 of 22
Revenue Refunding Bonds, Series 2002B, Water Supply, Steam and Electric Utility
System Revenue Refunding Bonds, Series 2003A, Water Supply, Steam and Electric
Utility System Revenue Refunding Bonds, Series 2005A, and Water Supply, Steam,
Chilled Water and Electric Utility System Revenue Bonds, Series 2008A. This bond and
the series of which it is one are of equal standing and priority of lien as to the Net
Revenues with the outstanding portion of the Water Supply, Steam and Electric Utility
System Subordinate Lien Revenue Bonds, Series 1999B (Federally Taxable) and
additional junior lien bonds which might be issued in the future pursuant to the Bond
Resolution(defined below).
This Bond is one of a series of bonds of like tenor, except as to denomination, rate
of interest and date of maturity, aggregating the principal sum of $ , issued
pursuant to a Bond Resolution adopted by the Board on October 24, 1989, as amended
and supplemented from time to time, including by the Fourth Supplemental Revenue
Bond Resolution adopted by the Board on October 26, 1999, as amended by the Sales
Resolution adopted by the Board on November 30 1999 and the a resolution authorizing
sale of refunding bonds adopted by the Board on , 2008 (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 ("Act 94"), for the purpose of refunding certain outstanding subordinate lien
revenue bonds which had been issued to construct and equip a central utilities complex to
provide hot water, chilled water, deionized water, compressed air and wastewater
treatment, among other utility services, [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 of
equal standing as to the Net Revenues may hereafter be issued, and the general covenants
and provisions pursuant to which this bond is issued, reference is made to the Bond
Resolution. Reference is hereby made to the Bond Resolution and any and all
supplements thereto and modifications and amendments thereof, if any, and to Act 94, for
a more complete description of the pledges and covenants securing the bonds of this
issue, the nature, extent and manner of enforcement of such pledges, the rights and
remedies of the registered owners of the bonds of this issue with respect thereto and the
terms and conditions upon which the bonds of this issue are issued and may be issued
thereunder. To the extent and in the manner permitted by the terms of the Bond
Resolution, the provisions of the Bond Resolution or any resolution or agreement
amendatory thereof or supplemental thereto, may be modified or amended by the Board,
except in specified cases, only with the written consent of the registered owners of at
least fifty-one percent (51%) of the principal amount of the bonds of the System then
outstanding.
Bonds of this issue are not subject to redemption prior to maturity.
[Standard provisions for optional or mandatory redemption to be inserted if
applicable.]
This bond is transferable only upon the books of the Board kept for that purpose
at the office of the Transfer Agent by the registered owner hereof in person, or by the
Special Board Mtg.
August 12,2008
Page 14 of 22
registered owner's attorney duly authorized in writing, upon the surrender of this bond
together with a written instrument of transfer satisfactory to the Transfer Agent 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 therefore as provided in the Bond Resolution, and upon the payment of the
charges, if any, therein prescribed. [If bonds can be called prior to maturity, then
provision to be inserted stating that bonds to be redeemed are not required to be
exchanged beginning 15 days before mailing redemption notice, except the unredeemed
portion of bonds being redeemed in part.]
THIS BOND IS A SELF-LIQUIDATING BOND AND IS NOT A GENERAL
OBLIGATION OF THE CITY AND DOES NOT CONSTITUTE AN INDEBTEDNESS
OF THE CITY WITHIN ANY CONSTITUTIONAL, STATUTORY OR CHARTER
LIMITATION, AND IS PAYABLE BOTH AS TO PRINCIPAL AND INTEREST
SOLELY FROM THE NET REVENUES OF THE SYSTEM AND CERTAIN FUNDS
AND ACCOUNTS ESTABLISHED UNDER THE BOND RESOLUTION. THE
PRINCIPAL OF AND INTEREST ON THIS BOND ARE SECURED BY THE
STATUTORY LIEN HEREINBEFORE DESCRIBED.
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.
It is hereby certified and recited that all acts, conditions and things required by
law to be done 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 Transfer Agent's
Certificate of Authentication on this bond has been executed by the Transfer Agent.
IN WITNESS WHEREOF, the City, acting by and through the Board, has caused this
bond to be signed in the name of the City with the facsimile signatures of the Chairperson
and Corporate Secretary of the Board, and a facsimile of the City's corporate seal to be
printed hereon, all as of the Date of Original Issue.
CITY OF LANSING by and through the
LANSING BOARD OF WATER AND LIGHT
By [ Signature of Chairperson to Appear
I
Chairperson
Countersigned:
Special Board Mtg.
August 12,2008
Page 15 of 22
By [ Signature of Corporate Secretary to Appear ]
Corporate Secretary
[INSERT STANDARD FORMS OF CERTIFICATE
OF AUTHENTICATION AND ASSIGNMENT]
Special Board Mtg.
August 12,2008
Page 16 of 22
Section 11. Additional Junior Lien Bonds. The reference to the Series 1999B
Bonds Aggregate Debt Service Requirement contained in Section 20(a) of the Fourth
Supplemental Revenue Bond Resolution shall refer to the Aggregate Debt Service
Requirement for all Outstanding Junior Lien Bonds issued as permitted under Section 20
of the Fourth Supplemental Revenue Bond Resolution and this Section 11, and the
Additional Junior Lien Bonds then being issued.
After payment or defeasance in full of the Series 1999B Bonds, Section 20(b) of
the Fourth Supplemental Revenue Bond Resolution is amended to provide as follows:
(b) For refunding all of the Outstanding Junior Lien Bonds and paying
costs of issuing such Additional Junior Lien Bonds.
Section 12. Bond Counsel. The Board recognizes that Miller, Canfield,
Paddock and Stone, P.L.C. ("Miller Canfield"), has represented from time to time, and
currently represents, various underwriters, financial institutions, and other potential
participants in the bond financing process for unrelated projects, any of which might offer
to purchase the Series 2008B Bonds or provide services related to issuance and sale of
the Series 2008B Bonds. The Board hereby requests that Miller Canfield continue to
serve the Board as bond counsel for the Series 2008B Bonds, notwithstanding the
potential concurrent representation of any such participant in the bond financing process
regarding any unrelated matter.
Section 13. Financial Advisor. The Board hereby requests that Robert W.
Baird & Co. continue to serve the Board as Financial Advisor for the Series 2008B
Bonds.
Section 14. Negotiated Sale. The Board hereby determines to sell the
Series 2008B Bonds at a negotiated sale instead of a competitive sale for the reason that a
negotiated sale will permit the Board to enter the market on short notice at a point in time
which appears to be most advantageous, and thereby possibly obtain a lower rate of
interest on the Series 2008B Bonds, and in order to take advantage of the most favorable
market for purchase of securities to be escrowed for payment of the Series 1999B Bonds
to be refunded. The Chief Financial Officer is authorized to select one or more
underwriters, in consultation with the Financial Advisor, and to negotiate a Bond
Purchase Agreement with the underwriters. This authorization includes, but is not
limited to, designation of the portion of the Series 1999B Bonds to be refunded and called
for redemption prior to maturity; determination of original principal amount of the
Series 2008B Bonds; the prices at which the Series 2008B Bonds are sold; the date of the
Series 2008B Bonds; the schedule of principal maturities and whether the Series 1999B
Bonds shall mature serially or as term bonds; provisions for early redemption including
mandatory redemption of term bonds, if any; the interest rates and payment dates of the
Series 2008B Bonds; application of the proceeds of the Series 2008B Bonds; transfer of
balances, if any, from the Junior Lien Bond and Interest Redemption Fund to the Series
1999B Escrow Fund; and purchase of securities for the Series 1999B Escrow Fund.
Approval of the matters delegated to the Chief Financial Officer under this Resolution
may be evidenced by execution of the Bond Purchase Agreement or the Official
Statement.
Special Board Mtg.
August 12,2008
Page 17 of 22
The underwriter's discount for the Series 2008B Bonds shall not be greater than
1.00% of the principal amount of the Series 2008B Bonds, net of original issue discount
or premium. The Series 2008B Bonds shall not be issued unless there shall be gross
savings after payment of all costs of issuance.
By adoption of this Resolution the Board assumes no obligations or liability to
any underwriter for any loss or damage that may result to said underwriter from the
adoption of this Resolution, and all costs and expenses incurred by the underwriters in
preparing for sale of the Series 2008B Bonds shall be paid from the proceeds of the
Series 2008B Bonds, if the Series 2008B Bonds are issued, except as may be otherwise
provided in the Bond Purchase Agreement to be signed by the Board at the time of sale of
the Series 2008B Bonds.
Section 15. Bond Ratings. The Chief Financial Officer is hereby authorized to
apply for bond ratings from such municipal bond rating agencies as she deems
appropriate in consultation with the Financial Advisor.
Section 16. Bond Insurance. The Series 2008B Bonds shall not be considered
"Insured Bonds" insured by MBIA Insurance Corporation, the "Bond Insurer" as defined
in the Fourth Supplemental Revenue Bond Resolution. If the Financial Advisor or the
underwriters recommend that the Board consider purchase of municipal bond insurance,
then the Chief Financial Officer is hereby authorized to negotiate with insurers regarding
acquisition of municipal bond insurance, and, in consultation with the Financial Advisor
and the underwriters, to select an insurer and determine which bonds, if any, shall be
insured, and the Chief Financial Officer is hereby authorized to execute an agreement
with the insurer relating to procedures for paying debt service on the insured bonds and
notifying the insurer of any need to draw on the insurance and other matters.
Section 17. Official Statement. The Chief Financial Officer is authorized to
approve circulation of a Preliminary Official Statement describing the Series 2008B
Bonds and, after sale of the Series 2008B Bonds, to prepare, execute and deliver a final
Official Statement.
Section 18. Continuing Disclosure. The Chief Financial Officer is hereby
directed to execute and deliver, prior to delivery of the Series 2008B Bonds, a written
continuing disclosure undertaking in order to enable the underwriters of the Series 2008B
Bonds to comply with the requirements of Securities and Exchange Commission Rule
15c2-12. The continuing disclosure undertaking shall be in substantially the form which
she shall, in consultation with Bond Counsel, determine to be appropriate.
Section 19. Utility Services Agreement. The Chief Financial Officer is hereby
authorized, in consultation with the General Manager of the Board, to negotiate any
changes, amendments, or modifications to the Utility Services Agreement to provide that
the payments received will be sufficient to pay debt service on the Series 1999B Bonds
and the Series 2008B Bonds. The General Manager and the Corporate Secretary of the
Board are hereby authorized to execute and deliver the amendment or supplement to the
Utility Services Agreement.
Section 20. Other Actions. In the event that the Chief Financial Officer is not
available at the time that it becomes necessary to take actions directed or authorized
Special Board Mtg.
August 12,2008
Page 18 of 22
under this resolution, then either the Manager of Finance and Planning or another person
designated by the Chief Financial Officer or the General Manager of the Board or a
person designated by him is authorized to take the actions delegated to the Chief
Financial Officer by this Resolution. The officers, administrators, agents and attorneys of
the Board are authorized and directed to take all other actions necessary and convenient
to facilitate issuance and sale of the Series 2008B Bonds and the refunding of
Series 1999B Bonds and the call of the refunded bonds prior to maturity, and to execute
and deliver all other agreements, documents and certificates and to take all other actions
necessary or convenient in accordance with this Resolution, and to pay costs of issuance
including but not limited to transfer agent fees, financial advisor fees, bond counsel fees,
rating agency fees, verification agent fees, auditor fees, bond insurance premiums, costs
of printing the Series 2008B Bonds and the preliminary and final official statements, and
any other costs necessary to accomplish the refunding of Series 1999B Bonds and the call
of the refunded bonds prior to maturity and the sale and delivery of the Series 2008B
Bonds.
Section 21. Applicability cability of the Outstanding Bond Resolutions. Except to the
extent amended, supplemented or otherwise provided in this Resolution, all of the
provisions and covenants provided in Bond Resolution shall apply to the Series 2008B
Bonds issued pursuant to provisions of this Resolution, such provisions of said
Resolution being made applicable to the Series 2008B Bonds herein authorized.
Section 22. Conflicting Resolutions. All resolutions and parts of resolutions
insofar as they conflict with the provisions of this resolution are hereby rescinded.
Section 23. Severability and Paragraph Headings. If any section, paragraph,
clause or provision of this Resolution shall be held invalid, the invalidity of such section,
paragraph, clause or provision shall not affect any of the other provisions of this
Resolution. The paragraph headings in this Resolution are furnished for convenience of
reference only and shall not be considered to be part of this Resolution.
Section 24. Publication and Recordation. In accordance with the provisions of
Section 6 of Act 94, this Resolution shall be published once in full in either the Lansing
State Journal or The City Pulse, each of which is a newspaper of general circulation in
the City qualified under State law to publish legal notices, promptly after its adoption,
and this Resolution shall be recorded in the minutes of the Board and such recording
authenticated by the signatures of the Chairperson and Corporate Secretary of the Board.
Section 25. Effective Date. This Resolution is hereby determined to be
immediately necessary for the preservation of the public peace, property, health and
safety of the City. In accordance with the provisions of Section 6 of Act 94, this
Resolution shall become effective immediately upon its adoption.
Special Board Mtg.
August 12,2008
Page 19 of 22
We hereby certify that the foregoing is a true and complete copy of a resolution duly
adopted by the Lansing Board of Water and Light of the City of Lansing, State of
Michigan, at a meeting held on day, , 2008, at _._
_.m., prevailing Eastern Time, and that said meeting was conducted and public notice of
said meeting was given pursuant to and in full compliance with the Open Meetings Act,
being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were
kept and will be or have been made available as required by said Act 267.
If the above meeting was a Special meeting, I further certify that notice of said Special
meeting was given to each member of the Board in accordance with the rules of
procedure of the Board.
We further certify that the following Commissioners were present at said meeting:
and that the following
Commissioners were absent
We further certify that Commissioner moved adoption of said
Resolution, and that said motion was supported by Commissioner
We further certify that the following Commissioners voted for adoption of said
Resolution:
and that the following Commissioners voted against adoption of said Resolution:
I further certify that said Resolution has been recorded in the Resolution Book and that
such recording has been authenticated by the signature of the Chairperson and Corporate
Secretary of the Board.
Chairperson Corporate Secretary
--------------------
Motion by Commissioner Kramer, seconded by Commissioner DeLuca to approve the
resolution for the Sale of Refunding 1999B Bonds.
Discussion: In response to Commissioner Cochran's inquiry, Susan Devon noted that the
maturity date of the bonds was not extended.
Special Board Mtg.
August 12,2008
Page 20 of 22
Action: Carried unanimously.
esolution 2008-8-
D. Return on Assets
Whereas, the Board of Commissioners requested that the Staff conduct research and
prepare a recommendation for the Board's consideration regarding the setting of an
appropriate rate of return target for the Lansing Board of Water and Light; and
Whereas, the Staff completed its research and presented its study to the Finance
Committee meeting on August 4, 2008; and
Whereas, the Staff recommends that a modified Utility Financial Solutions (USF)
approach be adopted by the Board as a standard to calculate the Overall Rate of Return;
and
Whereas, in recognition of the large coal inventory carried by the BWL, the Staff
recommends the overall rate of return be applied to net fixed assets plus materials and
supplies; and
Whereas, the Staff recommends the overall rate of return should be subject to review
each year as part of the budgeting process; and
Whereas, the Staff recommends that the Board directive for return on fixed assets should
be changed to accommodate the UFS approach and should include the flexibility to adjust
the calculated return upward for large construction projects and other unusual
circumstances as needed and as approved by the Board.
RESOLVED, that the Board of Commissioners adopt the modified UFS approach for
determining an appropriate rate of return target for the Lansing Board of Water and
Light, the return should be subject to review each year as part of the budgeting process,
and should be flexible to allow for upward adjustment to accommodate large construction
projects and other unusual circumstances as needed and as approved by the Board; and
FURTHER RESOLVED, that the Overall Rate of Return target for Fiscal Year 2009 will
be 6.18% including a Return on Equity of 6.31%:
--------------------
Motion by Commissioner Rodocker, seconded by Commissioner Cochran to approve the
resolution regarding the Return on Assets Target using Utility Financial Solutions'
Approach.
Discussion: Commissioner James was pleased to see the Return on Assets Policy before
the Board of Commissioners and had questions regarding the return on equity table and
whether or not other Michigan utilities were using the Wisconsin method.
Special Board Mtg.
August 12,2008
Page 21 of 22
Chief Financial Officer Susan Devon explained the return on equity table. She further
noted that staff recommended using the Utility Financial Solutions (UFS) method, as
modified to include materials and supplies, which is appropriate due to the large coal
inventory. Most other utilities do not carry large coal inventories similar to that of the
BWL. The BWL would also have opportunity to adjust the approach in the future to
calculate a different rate of return should a large construction project take place.
Commissioner James also inquired as to why staff was not recommending the Wisconsin
method as it yields a higher rate of return.
Ms. Devon advised that they recommended the USF method but any of the approaches
would work.
Commissioner James thanked Ms. Devon for the information and noted that she may
contact her in the future.
Action: Carried unanimously.
RESOLUTIONS
None.
MANAGER'S REMARKS
Fiscal Budget 2008. General Manager J. Peter Lark advised that the BWL originally
forecast for a loss of$6 million and recently expected a net income of$12 million.
Although, the books have not closed for fiscal year 2008, the BWL expects a net income
of$13.5 million. It was noted that net income was used to help fund previously budgeted
capital expenditures and debt principle repayment. In addition, while last years budget
called for a significant reduction in reserves no such reduction is required for fiscal year
2008.
Rate Comparisons. The BWL's electric rates are approximately 20% lower than
Consumers Energy. The electric rate difference for the average residential customer
using approximately 750 kWh's per month is 24%.
New Generation Taskforce. The New Generation Taskforce is scheduled to meet on
Thursday, August 14t at 9:00 a.m. on the West Campus of Lansing Community College.
All Commissioners were invited to attend.
COMMISSIONERS' REMARKS
Commissioner Kramer expressed appreciation and congratulated the General Manager
and staff on turning the projections around and achieving financial success as a result of
their hard work. Commissioner Lain echoed the sentiment.
Special Board Mtg.
August 12,2008
Page 22 of 22
Commissioner Thomas congratulated and expressed confidence in staff. He further
acknowledged the need for Commissioner communication, but discouraged the
micromanagement of staff responsibilities.
Commissioner Cochran agreed with Commissioner Thomas in principle. His desire to be
informed is with the purpose of deflecting issues and educating those individuals who
contact Commissioners. Commissioner Cochran further applauded staff for the financial
turnaround and setting a new rate of return, which will benefit budget reviews and rate
setting deliberations.
Commissioner James reported that BWL employee, Jimmy Lee Townsend passed away
last Sunday and his service is scheduled for Wednesday, August 13th. As such, she asked
the Secretary to send a floral arrangement on the Board's behalf. In addition,
Commissioner Lain asked that the Board be informed of such matters in the future.
EXCUSED ABSENCE
None.
PUBLIC COMMENTS
There were no public comments.
UNFINISHED BUSINESS
None.
ADJOURNMENT
On motion by Commissioner Kramer, seconded by Commissioner Zerkle, the meeting
adjourned at 6:12 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
August 22, 2008
Approved by the Board: September 23, 2008
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, July 22, 2008 —J
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232
Haco Drive, Lansing, Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Semone James, Peter Kramer, Frank
Lain, Julee Rodocker, Tracy Thomas and Sandra Zerkle.
Absent: None.
The Secretary declared a quorum present.
Chairperson James called the meeting to order at 5:30 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Cochran, seconded by Commissioner Rodocker, to approve the
minutes of the regular meeting held May 27, 2008 and the special board meeting held
July 21, 2008.
Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING
TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO
IMMEDIATELY PRIOR TO ADJOURNMENT.
Steve Rall, 1608 E. Shiawassee, Lansing spoke in opposition to building a new coal
plant. Mr. Rall also presented a series of questions to the Board of Commissioners and
provided a copy of said inquires following the meeting.
Connie Doetcher, 2173 Bellinger Court, Okemos spoke in opposition to building a new
coal plant. Ms. Doetcher also expressed concerns regarding carbon dioxide emissions
and the need to look at other alternatives such as, wind and solar.
Board Meeting Page 2 of 28
July 22,2008
Dawn Fleming, 1612 W. Shiawassee, Lansing spoke in opposition to building a new coal
plant. She also advised that the Board of Water and Light (BWL) is a publicly owned
utility and asked that additional public input be gathered and that the BWL utilize
renewable resources and energy efficiency as a means to resolve its issues.
Rev. Richard Preston, 628 Lincoln Avenue, Lansing spoke in opposition to building a
new coal plant. Rev. Preston expressed concerns regarding the lack of leadership, public
input, and moral sensitivities regarding the matter.
Eric Crosley, 228 S. Foster Avenue, Lansing thanked the BWL for replacing his house
service as a result of recent storms. He also spoke in opposition to building a new coal
plant and asked the board to consider other options.
Carol Rall, 1608 W. Shiawassee, Lansing spoke in opposition to building a new coal
plant. Ms. Rall noted the high cost and advised that alternative energies can be utilized
with proper consultation.
COMMUNICATIONS
Email of May 29, 2008 from Lacey Cunningham, Lansing, Michigan regarding possible
rate increases.
Received and placed on file.
Email of May 29, 2008 from Richard L. Foster, Lansing, Michigan regarding new power
plant.
Received and placed on file.
Letter of July 7, 2008 from Susan Pifer regarding her resignation as Director of Internal
Audit effective July 18, 2008.
Received and placed on file.
Letter of July 8, 2008 from U.S. Representative Tim Walberg regarding BWL customer
without power during recent storms.
Received and referred to management.
Email of July 21, 2008 from John Dowell, Lansing, Michigan opposing the BWL coal-
fired power plant.
Received and placed on file.
Email of July 22, 2008 from Trevor Hobbs, Lansing, Michigan opposing the BWL coal-
fired power plant.
Board Meeting Page 3 of 28
July 22,2008
Received and placed on file.
Email of July 21, 2008 from Julie Roy, Lansing, Michigan opposing the BWL coal-fired
power plant.
Received and placed on file.
Email of July 21, 2008 from Charles Liken, Lansing, Michigan opposing the BWL coal-
fired power plant.
Received and placed on file.
Email of July 21, 2008 from Charles Dekubber, Mason, Michigan opposing the BWL
coal-fired power plant.
Received and placed on file.
COMMITTEE REPORTS
Joint Meeting of the
Board of Water and Light Commissioners
and Lansing City Council
June 18, 2008
Board of Commissioners Chair Semone James called the meeting to order at 8:15 a.m.
The meeting was held in the Boardroom of the Administrative Offices, 1232 Haco Drive,
Lansing, Michigan.
Commissioners Present: Tony DeLuca, Semone James, Peter Kramer, Frank Lain, Julee
Rodocker and Sandra Zerkle. Absent: Commissioners Robert Cochran and Joseph
Graves.
Councilmember's Present: Sandy Allen, Eric Hewitt, A'Lynne Robinson(arrived 8:48 a.m.)
and Carol Wood. Absent: Councilmember's Kathy Dunbar, Brian Jeffries, Tim
Kaltenbach and Derrick Quinney.
BWL Staff Present: General Manager J. Peter Lark, Chief Financial Officer Susan
Devon, Executive Director of Water Operations and Special Projects Dick Peffley,
Executive Director of Strategic Planning and Development George Stojic, Executive
Director of Electric Operations Doug Wood, Director of Governmental &Public
Relations Calvin Jones, Director of Internal Audit Susan Pifer and Corporate Secretary
Rhonda Jones.
IBEW Local 352 Representatives Present: Business Manager Ron Byrnes
Board Meeting Page 4 of 28
July 22,2008
City Staff Present: None.
Public Comments
There were no public comments.
The purpose of the joint meeting was to present an update to City Council regarding the
following topics:
1. Update on Restoration of Power Following Storms of June 6th— 8th General Manager
J. Peter Lark gave a verbal update regarding recent storms that affected the greater
Lansing area. The storms damaged approximately 1/3 of the Board of Water and Light's
(BWL) distribution system and caused several outages. Although, the damage was
extensive, approximately 90% of the customers were restored within 60 hours and there
were no reported injuries to any of the workers. During the outage communication
modifications with Customer Service were changed to help improve the dissemination of
information. It was also noted that the BWL intends to take steps in the future to improve
its communications with City Council regarding such matters.
Councilmember Wood commended staff on the work that was done and also advised that
there were some communication issues. It was suggested that BWL send email updates
to City Council to help ensure assess to current information. It was further noted that
City Council used the storm outages as an opportunity to address internal emergency
procedures. In response to a Council question, Mr. Lark noted that there was excellent
cooperation between City of Lansing and BWL employees.
Commissioner Lain thanked IBEW 352 Business Manager Ron Byrnes for his customer
assistance during the storms aftermath. It was also suggested that the BWL develop
stronger agreements between the different entities, i.e. fire, police, and the City to ensure
that everyone is aware of their role during a storm situation.
2. Update on CSO Project. Mr. Lark reported that the BWL will participate in a pilot
project whereby it will replace up to 1,500 feet of water main in the CSO area. The
project scheduled to begin during the 2009 construction season will occur in areas where
sewer work is not needed. As such, the BWL will continue to work with the City of
Lansing Public Service Department to seek out similar opportunities for the following
construction season.
3. Update on Strategic Plan. Mr. Lark gave an update regarding the BWL's strategic
plan, which included information relative to meeting its future generation needs. It was
noted that the BWL has growing load and a need to replace the units at Eckert Station by
2018. The BWL is attempting to be the cleanest utility in the country with the use of
solar, wind, hydro and biomass. It was also advised that the BWL has sent letters to sixty
different groups to begin the public input process regarding the possibility of building a
new hybrid plant composed of 30%biomass.
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July 22,2008
4. Update on Water Bonds. Mr. Lark advised that $40 million in LBWL utility system
bonds were competitively sold on April 2, 2008. Four bids were received in total and the
bid was awarded to Wachovia Bank.
5. Update on Ottawa Station/Phoenix Project. Mr. Lark noted that the Ottawa
Station/Phoenix Project is scheduled to close on September 30, 2008. Preparations to
build the new chiller facility at Allegan and Pine Street are currently on schedule. In
addition, a groundbreaking ceremony for the new chiller facility will take place in
October 2008.
6. Update on Financials. Mr. Lark reported that prior to the weekend storms of June 6,
2008, the BWL forecast $12.9 million in net income for fiscal year ending June 30, 2008.
The cost associated with the storm damages including that of replacing the Eckert Station
cooling tower will negatively impact projected net income. However, it is estimated that
prices in the wholesale market may offset the storm costs and the BWL will still fair
better than its original budgeted net loss of($5.8 million).
7. Update on Senior Citizen Rate Reduction. Mr. Lark advised that the Board of
Commissioners approved an amendment to the Electric Residential Senior Citizen Rate
No. 21, which resulted in a$2.00 monthly service charge reduction. The rate change
takes effect July 1, 2008 resulting in a 9% discount for the average senior customer and a
30% discount over Residential Rate No.1 customers. Rate 21 is available to customers
65 years of age or older who use less than 620 kWhs per month.
8. Update on EPAct of 2005 Public Hearing &Net Metering. Mr. Lark advised that the
BWL currently has two net metering customers that include Two Men &A Truck and
Horrocks. The BWL does not have an official net metering policy in place but it is not
adverse to the idea. Presently, the BWL's electric rates have not been divided into
distribution, transmission and generation costs. However,proper relays for both
locations have been installed to prevent back feed onto the system and protect the safety
of the workers.
9. Update on First STEP Program. Mr. Lark advised that the program directed towards
area high school students will allow for up to 20 part-time internships with the BWL.
Following completion of the internship, up to 10 students will be offered full-time
employment with the BWL and 10 will be given scholarships to Lansing Community
College. In response to a Council question, Director of Governmental &Public Relations
Calvin Jones advised that they have not allocated a certain number of positions to
Lansing area students. However, the parameters are still being modified and they are
focusing on the Lansing area.
Councilmember Hewitt left the meeting at 9:02 a.m.
10. Update on Diversity Council. Mr. Lark advised that the BWL Inclusion and Equity
Diversity Council is working with Public Policy Associates, Incorporated to review the
BWL's existing environment and conduct a company-wide survey. The review and
survey currently underway will aid the BWL in its efforts to install diversity in all aspects
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July 22,2008
of the organization. Current diversity levels in the managerial areas of the organization
consist of the following: executive directors—25%, directors—50%, and management—
25%.
11. Update of Lead Line Replacement Program. Mr. Lark noted that the BWL added a
third crew to work with the lead line replacement program. The additional crew
scheduled to start work July 1, 2008 was provided with the necessary vehicles and
equipment to do the replacement work.
In response to a Council question regarding sidewalk repairs, staff noted that they were
unaware of any recent issues with the lag time in replacing/repairing the sidewalks after
construction. Nevertheless, staff indicated that they would contact Chad Gamble with the
Public Service Department to address the issue.
12. Use of Low Energy Lights for Streetlights. Staff confirmed that the low energy
streetlights are located in various residential areas. The streetlights, which will be
evaluated for future continued use is a program sponsored by the American Public Power
Association DEED Grant.
13. Mercury Light Bulb Disposal. Mr. Lark noted that as of October 2007 people could
dispose of CFL bulbs at the BWL regardless of whether or not the individual is an
existing BWL customer. As such, for safety purposes people are asked to place the bulbs
inside a sealable plastic bag for proper disposal. Currently, the BWL receives a small
amount of bulbs on a monthly basis.
14. Historic Lighting on Washington in Old Town. Councilmember Wood inquired as to
the cost of acquiring historic lighting along Washington Avenue in Old Town. In
response, Executive Director Doug Wood noted that it used to cost $40,000 a block,
which was added to the City of Lansing's streetlight bill. As such, Mr. Wood will
follow-up with City Council to provide the current cost to install new historic lighting.
15. Streetlights on Martin Luther King (MLK) Jr., Blvd. Doug Wood advised that there
are loading and splicing issues on MLK Jr. Blvd, which have been a source of the
streetlight outages. In response to Council's question, it was confirmed that contractors
installed the streetlights services in question.
16. Other.
Fire Hydrants. Councilmember Wood noted that the BWL is scheduled to replace 100
fire hydrants due to the CSO Project. As such, it was noted that when City Council
passed the fire code ordinance they specifically passed it so that BWL employees would
do the type of work in question. Councilmember Wood also advised that she could
forward a copy of the City Council meeting minutes that speak to the issue if needed.
Executive Director of Water Operations and Special Projects Dick Peffley advised that
the matter was brought to his attention and they have since gathered some information
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July 22,2008
and forwarded it onto the BWL's Legal Department for review. He is currently awaiting
their response and will address the matter at said time.
Power Grid. Councilmember Robinson asked to receive a copy of the BWL's power grid
as a means to help explain the spotty power outages that occurred in her ward during the
June 6th—8th storms.
In response to Councilmember Robinson's request, staff noted that customer's can be
feed from different circuits, which can result in partial power. It was also noted that at
times there was customer confusion regarding responsibility for repairs to the mast. In
addition, staff advised that they would send a storm update to employees and customers
alike.
There being no further business, the meeting adjourned at 9:22 a.m.
NOMINATING COMMITTEE
June 26, 2008
The Nominating Committee of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 1:05 p.m. on Thursday, June 26, 2008.
Nominating Committee Chair Semone James called the meeting to order and asked the
secretary to call the roll. The following committee members were present:
Commissioners Joseph Graves, Semone James, Peter Kramer and Julee Rodocker.
Commissioner Tony DeLuca was also present.
Absent: None.
Public Comment
There were no public comments.
Nominate Board Officer Candidates for FY 2009
The Nominating Committee met to review Commissioner survey responses for
consideration of board officer nominations for fiscal year 2009. Upon reviewing an
updated copy of the officer and committee survey results, the Nominating Committee
discussed at length each respective officer position. After further discussion, the
committee did not recommend a slate of officers for fiscal year 2009. Hence, the
Nominating Committee agreed that they had reached an impasse and decided to forward
the matter to the full board for further review and discussion on July 22, 2008.
There being no further business, the meeting adjourned at 1:42 p.m.
Respectfully submitted,
Semone M. James, Chair
Board Meeting Page 8 of 28
July 22,2008
Nominating Committee
COMMITTEE OF THE WHOLE
July 8, 2008
The Committee of the Whole of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 5:30 p.m. on Tuesday, July 8, 2008.
Committee of the Whole Chair Julee Rodocker called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Tony DeLuca, Joseph Graves, Peter Kramer, Frank Lain, Julee Rodocker and
Sandra Zerkle.
Absent: Commissioner Semone James
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner DeLuca, seconded by Commissioner Zerkle to approve the
minutes of the Committee of the Whole meeting held May 13, 2008.
Action: Carried unanimously.
Fair and Accurate Credit Transactions Act (FACTA)
Mike Collins, Manager of Internal Controls gave a brief overview of the Determination
of Identity Theft Prevention Program resolution. As such, it was noted that the proposed
resolution would delegate the General Manager the responsibility for the oversight,
development, implementation, and administration of said program. The program
represents good business practice and is consistent with the Board of Water and Light's
(BWL)policy regarding customer information and confidentiality.
On motion by Commissioner Cochran, seconded Commissioner Graves, the Committee
of the Whole agreed to move the proposed resolution for the Determination of Identity
Theft Prevention Program to the full board for consideration and approval on July 22,
2008.
Action: Carried unanimously.
Economic Development Rate for Chilled Water
George Stojic, Executive Director of Strategic Planning and Development gave an
overview of the proposed resolution regarding a public hearing for the Economic
Development Rider for Chilled Water. The purpose of the rider is to allow the BWL to
offer a complete integrated energy and water service package to customers locating in the
Board Meeting Page 9 of 28
July 22,2008
downtown Lansing area. The chilled water rate composed of capacity and commodity
charges offers both non-cost and cost benefits to those seeking to utilize the service. The
new pricing strategy (which is on a life cycle basis) should allow the BWL to increase its
customer base by adding capacity without additional fixed charges added to the system.
As a result, the pricing strategy will allow the BWL to grow the chilled water business
and stabilize its revenues and finances.
Following brief discussion, the Committee of the Whole took the following action:
On motion by Commissioner Lain, seconded by Commissioner Cochran, the Committee
of the Whole agreed to move the proposed resolution for a public hearing regarding the
Economic Development Rider for Chilled Water to the full board for consideration and
approval on July 22, 2008.
Action: Carried unanimously.
EPAct of 2005 PURPA Standards
Sue Warren, Marketing Manager gave a brief overview of the EPAct of 2005 PURPA
Standards. The standard requires that the BWL review five new PURPA standards. The
last three currently under review include net metering, fuel sources, and fossil fuel
generation efficiency. As such, a public hearing was held May 22, 2008 to receive public
input regarding the aforementioned topics. It was determined that the BWL has fulfilled
the review of fuel sources and fossil fuel generation efficiency within the confines of its
current process. Fuel sources are reviewed during the Renewable Portfolio Standard
(RPS)process and in diversifying the BWL's portfolio. Fossil fuel generation efficiency
is also reviewed during the integrated resource process, capital investments, and in
considering new plant generation needs. It was recommended that the BWL develop a
net metering program in which they would utilize a Michigan Public Service Commission
standard as the model for the program. There are some issues specific to the BWL that
must be addressed. However, it is believed that customers will benefit from the program
and the cost of service study currently in progress will aid with unbundling the BWL's
existing rate structure.
Following brief discussion, the Committee of the Whole took the following action:
On motion by Commissioner Cochran, seconded by Commissioner DeLuca, the
Committee of the Whole agreed to move the proposed resolution regarding the
Determination of Net Metering and Additional Standards to the full board for
consideration and approval on July 22, 2008.
Action: Carried unanimously.
Jackson National Life Development Agreement
J. Peter Lark, General Manager advised that Jackson National Life (JNL) is relocating
their data centers worldwide to their Alaiedon Township location. As such, a new
agreement was developed to address the additional load. The agreement, which the
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July 22,2008
General Manager is prepared to sign was drafted in the same spirit as the original
agreement from 1998. JNL is obtaining their Board of Directors authority to enter into
the development agreement and requested that the BWL do likewise. Following brief
discussion, the Committee of the Whole took the following action:
On motion by Commissioner Lain, seconded by Commissioner Kramer, the Committee
of the Whole agreed to move the proposed resolution regarding the Jackson National Life
Development Agreement to the full board for consideration and approval on July 22,
2008.
Action: Carried unanimously.
Discussion of Attorney Client Privileged Document
Moved by Commissioner Lain, seconded by Commissioner Kramer to go into executive
session to discuss a privileged document received from Brandie Ekren, General Counsel
and protected by the Open Meetings Act exemption MCL 15.268(h). (6:04 p.m.) The
roll was called.
Yeas: Commissioners Cochran, DeLuca, Graves, Kramer, Lain, Rodocker and Zerkle.
Nays: None.
Absent: Commissioner Semone James.
Carried unanimously.
Moved by Commissioner Cochran, seconded by Commissioner Lain that the Committee
of the Whole meeting return to open session.
Carried unanimously.
The Committee of the Whole meeting reconvened in open session at 6:10 p.m.
On motion by Commissioner Graves, seconded by Commissioner Lain, the Committee
of the Whole agreed to move forward with the execution of any and all pertinent
documents in resolution of the Section 125 Compliance Matter with the Internal Revenue
Service.
Action: Carried unanimously.
Other
Excused Absence. On motion by Commissioner Lain, seconded by Commissioner
Kramer to excuse the absence of Commissioner Semone James.
Action: Carried unanimously.
Employee Evaluations. Commissioner Zerkle asked that all of the Commissioners turn in
their board appointee evaluations as soon as possible.
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July 22,2008
There being no further business, the meeting adjourned at 6:13 p.m.
Respectfully submitted,
Julee M. Rodocker, Chair
Committee of the Whole
EXECUTIVE COMMITTEE
July 10, 2008
The Executive Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 5:30 p.m. on Thursday, July 10, 2008.
Executive Committee Chair Semone James called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Joseph Graves, Semone James and Julee Rodocker. Commissioners Tony
DeLuca and Frank Lain were also present.
Absent: None.
Public Comments
There were no public comments.
Transition Plan for the Internal Audit Department
On July 8, 2008 the Board of Commissioners received Director of Internal Audit Susan
Pifer's letter of resignation effective July 18, 2008. The committee members thanked
Ms. Pifer for her service and wished her well in her future endeavors. Due to the pending
departure, the Executive Committee discussed a transition plan for the Internal Audit
Department.
Following discussion, Susan Pifer was directed to work with Charles Moore of C.L.
Moore & Associates, P.C. to obtain an engagement letter, which expands his current
audit contract to include an interim directorship period. It was noted that Mr. Moore was
familiar with Board of Water and Light (BWL) activities and has acted in such a capacity
on behalf of the Board of Commissioners in the past. Mr. Moore's current audit contract
with the BWL will be expanded to include compensation for his role as the Interim
Director of Internal Audit as well as those activities associated with that respective
position.
On motion by Commissioner Graves, seconded by Commissioner Cochran it was moved
to expand the contract with C.L. Moore &Associates, P.C. to include the interim period
that the Board of Commissioners is facing in regards to the vacancy created by Susan
Pifer's departure.
Board Meeting Page 12 of 28
July 22,2008
Action: Carried unanimously.
Further Discussion: Commissioner Graves advised that the engagement letter would be
added to the next Finance Committee meeting and they would also discuss the role of the
internal auditor and its independence. The committee also briefly discussed how they go
about permanently filling the internal auditor position or outsourcing the function.
There being no further business the meeting adjourned at 5:50 p.m.
Respectfully submitted
Semone M. James, Chair
Executive Committee
FINANCE COMMITTEE
July 15, 2008
The Finance Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 3:00 p.m. on Tuesday, July 15, 2008.
Finance Committee Chair Joseph Graves called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Joseph Graves, Peter Kramer and Semone James. Alternate committee member
Commissioner Frank Lain was also present.
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Cochran, seconded by Commissioner Lain to approve the
minutes of the Finance Committee meeting held May 13, 2008.
Action: Carried unanimously.
DB and VEBA Asset Allocation Studies
Marie Vanerian, First Vice President and Michael Muirhead, Associate Financial Advisor
with Merrill Lynch Institutional Consulting Group gave an overview of the Board of
Water and Light (BWL) Asset Allocation Studies. Also present were Bill Mackay and
Keith Azar with Merrill Lynch. The studies reviewed in detail addressed the following
topics: total program management, importance of asset allocation, plan sponsor dilemma,
data frequency, objectives of analysis, asset allocation modeling process, scenario
development, and the Defined Benefit (DB) and VEBA asset mixes for consideration. It
Board Meeting Page 13 of 28
July 22,2008
was advised that asset allocation is a critical component of the plan. The target rate of
return is 7.5%, of which one will not typically achieve in any given year but should reach
over time. The BWL has met its expectations regarding the current plan and do not
expect it to go any lower. It is advised that the BWL should be cognizant of what is
occurring in the current environment and the building block methodology takes this issue
into account. Every asset class added to the mix either contributes or dampens the asset
allocation. Hence, each asset class brings something different to the asset allocation mix.
Emerging markets contain a certain level of international exposure and private equity
lacks transparency and is not subject to Sarbanes-Oxley(SOX). It was further suggested
that the BWL entertain a change to the asset allocation mix for the VEBA fund to include
private equity while keeping in mind that Public Act 314 restricts the 5% asset class.
Susan Devon, Chief Financial Officer (CFO)noted that staff would review the Defined
Benefit and VEBA Trust Investment Policies, make a specific recommendation regarding
the asset allocation, and eventually interview asset allocation managers. It was also
confirmed that the BWL filled out a Merrill Lynch survey that addressed its desire to
seek diversity in their candidate pool.
A complete copy of the Lansing Board of Water and Light Asset Allocation Studies
prepared by Merrill Lynch Institutional Consulting Group is on file in the Corporate
Secretary's office.
Engagement Letter from C.L. Moore & Associates, P.C.
The Finance Committee discussed the engagement letter received from Charles Moore of
C.L. Moore &Associates, P.C. The engagement letter addresses audit processing
services for fiscal year 2008-09 and Mr. Moore's role as Interim Director of Internal
Audit due to the pending departure of Susan Pifer. It was noted that the interim director
stipend stipulated in the engagement letter would cease upon permanent replacement of
the directorship for the internal audit position. It was also suggested that the audit
processing services contract be extended for a period of two years and that the contractual
amount be increased from $110,000 (as stipulated in the engagement letter) to $150,000
per fiscal period at a billable rate for an increase in the scope of work.
The committee members also noted the need to have in depth discussion regarding the
directorship position and whether to post and fill the pending vacancy as currently
structured or outsource the director responsibilities.
On motion by Commissioner Lain, seconded by Commissioner James to approve the
engagement letter as presented by Charles Moore with the following modifications: 1)
audit processing service fees are limited to $150,000 and 2) the audit processing service
contract is extended for an additional two years (or whichever date is in compliance with
the existing request for proposal).
Discussion: Susan Pifer, Director of Internal Audit noted that she prefers the hybrid
model for the internal audit position. Whereas, an external auditor handles the
directorship responsibilities and maintains an in-house associate who would be intricately
Board Meeting Page 14 of 28
July 22,2008
familiar with the organization, as there maybe difficulties in the job market in obtaining
and retaining an internal auditor. Ms. Pifer also referenced information contained in the
Institute of Internal Auditors Position Paper on Resourcing Alternatives for the Internal
Audit Function. See attached document.
Yeas: Commissioners Cochran, Graves, James and Lain.
Nays: None
Abstain: Commissioner Kramer
Action: Motion carried.
Commissioner Lain departed the meeting at 4:19 p.m.due to a prior obligation.
Internal Controls Structure
The Management's 2008 Report on Internal Control Structure was presented by the Chief
Financial Officer, Susan Devon to the Committee. The report provided an update on the
2008 activities and future plans for the Internal Control & Tariff Administration
Department that was created in November 2007. In response to a Commissioner inquiry,
Susan Devon advised that SOX does integrate the COSO internal control framework into
its requirements. However, SOX is focused on publicly traded companies that report to
the Security Exchange Commission (SEC), have shareholders, and executive bonus plans
based ear be based on financial performance. As such, Chief Executive Officers must
file and certify quarterly reports with the SEC, which requires the implementation of a
number of costly and time-consuming controls and monitoring systems. It was noted that
the BWL wants strong internal controls without stating that it is SOX compliant, as some
of the steps are unnecessary for the BWL. Currently, the Board of Commissioners
receives monthly Financial Reports from the General Manager to keep the Board abreast
of current financial matters. It was also advised that the internal auditor could review the
financial statements on behalf of the Board if interested.
Mike Collins, Manager of Internal Controls advised that the Committee of the
Sponsoring Organizations of the Treadway Commission(COSO)was formed in 1992
and the SOX Act were passed in 2002. As such, COSO standards were included in SOX,
which made best practices a requirement of law. The purpose of the Internal Control and
Tariff Administration Department at the BWL is to establish centralized management of
the BWL Internal Control Structure under the direction of the CFO. A strong Internal
Control Structure will provide reasonable assurance regarding the achievement of
objections in: 1) effective and efficient operations, 2)reliability of financial reporting
and 3) compliance with applicable laws and regulation. Presently, the Internal Control
and Tariff Administration Department is reviewing various processes at the BWL to
ensure that proper internal controls structure is in place.
Commissioner Graves advised that the best practices implemented by staff are value
added. He also agreed that the internal auditor should review the financial materials to
ensure a separate and independent opinion of the matter. The General Manager was also
applauded for his efforts in creating the internal controls division, which with the addition
Board Meeting Page 15 of 28
July 22,2008
of the Director of Internal Audit provides a comfort level essential to moving the
organization forward.
SOX Follow-up and Discussion
Susan Pifer advised that she and the CFO were previously directed to conduct a
preliminary evaluation of SOX and the attendant auditing standards effective for fiscal
year 2008. As such, Ms. Pifer briefly reviewed the proposed committee discussion
information contained in the meeting packet materials and advised that the review had
been completed. It was also noted that there was no need for the Finance Committee to
take action at this time.
The committee members noted the possibility of future discussions regarding the benefits
of having an audit versus finance committee.
Internal Audit Charter
Commissioner Graves noted that he would like the internal auditor to independently
review the financials and budget assumptions separate and apart from staff. Separate
reporting to the governing body regarding various projects, financials,budget
assumptions and other items would serve to acknowledge that there is understanding and
agreement with the information presented.
Susan Pifer presented the proposed resolution regarding the Internal Audit Charter and
noted that it was previously modified and approved by the Board of Commissioners on
May 22, 2007.
On motion by Commissioner Kramer, seconded by Commissioner Cochran, the Finance
Committee agreed to move the proposed resolution regarding the Internal Audit Charter
to the full board for consideration and approval on July 22, 2008.
Action: Carried unanimously.
Auto Audit Demonstration
Auto Audit Software Implementation and Design materials prepared by Susan Pifer were
included in the Finance Committee packet materials for informational purposes. Auto
Audit Software is currently in place and being utilized by the Internal Audit Department.
Other
Microsoft Project. In response to a Commissioner question, Susan Pifer advised that
Charles Moore and Associate Internal Auditor Perez Goree will discuss what reports
and/or software each party will maintain.
Director of Internal Audit. The Finance Committee and Peter Lark applauded and
thanked Susan Pifer for her hard work and service as the Director of Internal Audit.
There being no further business, the meeting adjourned at 4:53 p.m.
Board Meeting Page 16 of 28
July 22,2008
Respectfully submitted,
Joseph E. Graves, Jr., Chair
Finance Committee
HUMAN RESOURCE COMMITTEE
July 21, 2008
The Human Resource Committee of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 11:30 a.m. on Monday, July 21, 2008.
Human Resource Committee Chair Sandra Zerkle called the meeting to order and asked
the secretary to call the roll. The following committee members were present:
Commissioners Tony DeLuca, Joseph Graves, Frank Lain and Sandra Zerkle. Alternate
committee members Semone James and Julee Rodocker were present in addition to
Robert Cochran and Peter Kramer.
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner James, seconded by Commissioner Graves to approve the
minutes of the Human Resource Committee meeting held May 1, 2008.
Action: Carried unanimously.
FY 2009 Salary Structure, Skill Family Salary Range Adjustments and Merit
Increases
Susan Devon, Chief Financial Officer gave a brief overview of the proposed resolution
for the fiscal year 2009 salary structure, skill family salary range adjustments and merit
increases. Modification to the current salary structure would eliminate the lower tier of
the current two-tier base pay caps system. Thereby, allowing a single minimum and
maximum pay range for each salary grade. As such, the new salary range maximum
would be equivalent to the current pay range control point. Considered best practice
under SAP, the Board of Water and Light (BWL) is in the process of implementing a new
SAP Human Resources Management and Payroll System. It was also noted that
employees would not be adversely affected by the proposed adjustments.
On motion by Commissioner James, seconded by Commissioner Graves, the Human
Resource Committee agreed to move the proposed resolution for the Salary Management
System for Fiscal Year 2008-2009 to the special board meeting for consideration and
approval on July 21, 2008.
Board Meeting Page 17 of 28
July 22,2008
Action: Carried unanimously.
FY 2008 Board Appointee Performance Reviews for Corporate Secretary and
General Manager
The Human Resource met to conduct the annual performance reviews of the Corporate
Secretary and General Manager for fiscal year-end 2008. Rhonda Jones, Corporate
Secretary and Board appointee requested a closed session for the purpose of receiving her
contractual year-end performance evaluation as permitted by Open Meetings Act
exemption MCL 15.268(a). (11:40 a.m.) The roll was called.
Yeas: Commissioners Cochran, DeLuca, Graves, James, Kramer, Lain, Rodocker and
Zerkle.
Nays: None.
Absent: None.
Carried unanimously.
Moved by Commissioner Graves, seconded by Commissioner Rodocker that the Human
Resource Committee returns to open session.
Carried unanimously.
The Human Resource Committee meeting reconvened in open session at 12:27 p.m.
Upon conclusion of the closed session, the Human Resource Committee took the
following action:
On motion by Commissioner Graves, seconded by Commissioner James, the Human
Resource Committee recommended that Rhonda Jones' contract as Corporate Secretary is
renewed for a period of one year with a base pay salary increase of 3%.
Action: Carried unanimously.
General Manager Performance Review
J. Peter Lark, General Manager and Board appointee requested a closed session for the
purpose of receiving his contractual year-end performance evaluation as permitted by
Open Meetings Act exemption MCL 15.268(a). (12:35 p.m.) The roll was called.
Yeas: Commissioners Cochran, DeLuca, Graves, James, Kramer, Lain, Rodocker and
Zerkle.
Nays: None.
Absent: None.
Carried unanimously.
Board Meeting Page 18 of 28
July 22,2008
Moved by Commissioner Lain, seconded by Commissioner DeLuca that the Human
Resource Committee returns to open session.
Carried unanimously.
The Human Resource Committee meeting reconvened in open session at 1:55 p.m.
Upon conclusion of the closed session, the Human Resource Committee took the
following action:
On motion by Commissioner DeLuca, seconded by Commissioner Lain, the Human
Resource Committee recommended to renew the General Manager's contract for one
year with six months severance, 15% contribution, six months COBRA, outplacement
services, and salary of$239,000 with a possible provision of an additional multi-year
contract.
Discussion: Commissioner James noted that the Board of Commissioners should ensure
that legal counsel review the issue with respect to any possible multi-year contract.
Action: Carried unanimously.
There being no further business the meeting adjourned at 2:00 p.m.
Respectfully submitted,
Sandra Zerkle, Chair
Human Resource Committee
MANAGER'S RECOMMENDATIONS
esolution 2008-7-3
A. Implementation of Identity Theft Prevention Program
WHEREAS, the Fair and Accurate Credit Transactions Act of 2003 (FACT Act of 2003)
amended the Fair Credit Reporting Act of 1970 (FCRA) requiring creditors that maintain
covered accounts to develop and implement a written Identity Theft Prevention Program;
and
WHEREAS, the American Public Power Association has had preliminary discussions
suggesting that municipal utilities are subject to the FACT Act of 2003; and
WHEREAS, the Board of Commissioners, upon recommendation from the General
Manager, believed FACT Act of 2003 may be considered best practices and worth
implementing for the Lansing Board of Water and Light.
Board Meeting Page 19 of28
July 22,2008
RESOLVED, that the Board of Commissioners for the Board of Water and Light
designates the oversight, development, implementation and administration of an
appropriate Program of the General Manager, who is directed to:
1. Provide the Board of Commissioners with an update of the Program when it
has been implemented.
--------------------
Motion by Commissioner James, seconded by Commissioner Lain to approve the
Implementation of Identify Theft Prevention Program resolution.
Action: Carried unanimously.
esolutlon 2008-7-
B. Public Hearing Date for Economic Development Rider for Chilled Water
WHEREAS, the BWL began offering chilled water to customers in the downtown
Lansing area in the summer of 2001; and
WHEREAS, currently the customers who are utilizing chilled water are: State of
Michigan(12 buildings), Constitution Hall, MEDC and Ingham County Courts; and
WHEREAS, the purpose of this proposed Economic Development Rider for Chilled
Water is to enhance economic development by encouraging customers to locate or
expand facilities in the BWL's service area which will result in a net benefit to the BWL
and its customers; and
WHEREAS, the BWL will have ample chilled water capacity for the foreseeable future;
and
WHEREAS, the proposed Economic Development Rider for Chilled Water offers
discounts to customers on the capacity charges for the first 6 years. After that time, the
customer then is billed on the standard capacity rate as published; and
WHEREAS, the BWL will consider adding new chilled water customers for the purpose
of adding to revenues which can help keep rates more stable; and
WHEREAS, prior to such consideration, public input is warranted in the form of a public
hearing as such addition will result in a change in the existing rate structure.
RESOLVED, that the Economic Development Rider for Chilled Water be made the
subject of a public hearing prior to further consideration by the Board of Commissioners.
RESOLVED FURTHER, that the Board of Commissioners hereby set the date of
Thursday, September 18, 2008, at 5:30 p.m. for a public hearing to solicit public input on
the proposed Economic Development Rider for Chilled Water. The hearing will be held
Board Meeting Page 20 of 28
July 22,2008
in the Board of Water and Light's offices, 1232 Haco Drive, Lansing. The Corporate
Secretary is directed to file with the City Clerk, no later than August 31, 2008,
information regarding the proposed Economic Development Rider for Chilled Water with
an effective date of October 1, 2008.
CHILLED WATER: Economic Development Rate Rider(Attachment)
--------------------
Motion by Commissioner Kramer, seconded by Commissioner Cochran to approve the
Public Hearing Date for Economic Development Rider for Chilled Water resolution.
Action: Carried unanimously.
esolution 2008-7
C. PURPA Standards for Net Metering, Fuel Sources, and Fossil Fuel
Generation Efficiency
WHEREAS, the Energy Policy Act of 2005 (EPAct of 2005) amended the Public Utility
Regulatory Policies Act of 1978 (PURPA) requiring covered utilities to consider
adopting five new standards; and
WHEREAS, the EPAct of 2005 amendments to PURPA require covered utilities to begin
consideration of the Net Metering and Additional Standards, by August 8, 2007, with a
public hearing and a determination made by August 8, 2008; and
WHEREAS, the Lansing Board of Water and Light (BWL), with electric retail sales in
excess of 500 million kWhs meets the definition of a non-regulated covered utility; and
WHEREAS, a public hearing on Net Metering and Additional Standards was held on
May 22, 2008.
BE IT RESOLVED, that the BWL shall implement the PURPA Standards accordingly:
1. Net Metering: Develop and promote a net metering program which meets the
PURPA standard as applicable to the BWL.
2. Fuel Sources: Adopt the Fuel Sources standard as applicable to the BWL.
3. Fossil Fuel Generation Efficiency: Adopt the Fossil Fuel Generation Efficiency
standard as applicable to the BWL.
--------------------
Motion by Commissioner Lain, seconded by Commissioner Kramer to approve the
PURPA Standards for Net Metering, Fuel Sources, and Fossil Fuel Generation Efficiency
resolution.
Board Meeting Page 21 of 28
July 22,2008
Action: Carried unanimously.
esolution 2008-7
D. Jackson National Life Development Agreement
WHEREAS, a Development Agreement between the city of Lansing, the Lansing Board
of Water and Light, and Jackson National Life Insurance Company (Jackson National)
has been negotiated and is presented for approval; and
WHEREAS, the Development Agreement sets forth the terms, conditions, and
agreements of the parties relative to the future expansion of Jackson National's world
headquarters,business operations, and related facilities on an additional property site now
located in Alaiedon Township adjacent to the current world headquarters; and
WHEREAS, the Alaiedon Township additional property site is the subject of a proposed
agreement between the City and the Township conditionally transferring the site to the
city of Lansing pursuant to 1984 Public Act 425 (the 2008 PA 425 Agreement); and
WHEREAS, the Development Agreement calls for the signatories to attach a Corporate
Resolution certifying the persons executing the Development Agreement are duly
authorized to do so; and
WHEREAS, the Contract Signature Authority (Res. 2004-01-08) and Line Extensions
and Service Territory Expansions (Res. 2003-3-2) authorize the General Manager to
execute agreements of this nature; and
WHEREAS, the Development Agreement is subject to the approval and execution of the
2008 PA 425 Agreement by the City and Alaiedon Township.
NOW, THEREFORE, BE IT RESOLVED, the General Manager and Corporate
Secretary are authorized to execute the Development Agreement with Jackson National
Life Insurance Company and the city of Lansing dated June 23, 2008, on behalf of the
Lansing Board of Water and Light.
--------------------
Motion by Commissioner Cochran, seconded by Commissioner Rodocker to approve the
Jackson National Life Development Agreement resolution.
Action: Carried unanimously.
esolution 2008-7--
E. Section 125 Compliance Settlement
RESOLVED, that the Lansing Board of Water& Light finalize and execute any and all
pertinent documents in resolution of the Section 125 Compliance Matter with the Internal
Revenue Service.
-----------------------
Board Meeting Page 22 of 28
July 22,2008
Motion by Commissioner Zerkle, seconded by Commissioner Cochran to approve the
Section 125 Compliance Settlement resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
None.
NEW BUSINESS
Motion by Commissioner Cochran, seconded by Commissioner DeLuca to nominate the
following slate of officers for fiscal year 2008-2009:
Chair—Commissioner Frank Lain
Vice Chair—Commissioner Sandra Zerkle
Discussion: There were no additional nominations from the floor.
Action: The Board of Commissioners voted for each officer position separately. The
motion carried unanimously to elect Commissioner Frank Lain to the position of Chair
and Commissioner Sandra Zerkle to the position of Vice Chair.
Comments: Commissioner James noted that it was a honor serving the board as Vice
Chair for 2-months and then as Chair for 10-months. She expects the board to move
forward in a positive manner, as there are critical issues facing them in the coming year.
It was also advised that there are ratepayers at the board meeting with concerns in which
they can hopefully bring about positive resolution. Commissioner James went onto
congratulate Commissioners Lain and Zerkle and wished them well for the next fiscal
year. She also advised that in serving as Chair, she viewed it as an honor and humbly and
graciously accepted the challenge. Commissioner James noted that it is a tremendous
honor to serve our citizens and hopefully the board will make the right decisions going
forward as they have done over the last year.
RESOLUTIONS
esolution 2008-7-
Internal Audit Charter
RESOLVED, that the Board of Commissioners hereby approves the Internal Audit
Charter, appended to the July 15, 2008, Finance Committee meeting minutes and the
resolution as Attachment A, which conforms to the International Standards for the
Professional Practice of Internal Auditing, Generally Accepted Government Auditing
Standards and the Statements of Auditing Standards promulgated by the American
Institute of Certified Public Accountants. On May 22, 2007, the Internal Audit Charter
was approved by the Board of Commissioners and hereto referenced by Resolution 2007-
Board Meeting Page 23 of 28
July 22,2008
5-12. It was subsequently resubmitted and discussed at the Finance Committee meeting
held July 15, 2008, and deemed suitable for continued use with an amendment to comply
with Generally Accepted Government Auditing Standards, revised in July 2007 for use
by internal audit functions of federal, state and local government entities.
---------------------
Motion by Commissioner Lain, seconded by Commissioner Cochran to approve the
Internal Audit Charter resolution.
Action: Carried unanimously.
Reappointment of the Charter Position of Corporate Secretary
The Board's Rules of Administrative Procedures specify that the Board is to appoint a
Director and General Manager, Internal Auditor, and Corporate Secretary, respectively at
its first regular meeting following July 1st of each year or as soon thereafter as may be
appropriate.
RESOLVED, That the Board of Commissioners hereby reappoints the following
individual to the Charter position of Corporate Secretary for fiscal year 2008-2009, or,
until a successor is appointed, whichever last occurs:
Rhonda Jones, Corporate Secretary
RESOLVED, That Rhonda Jones' current employment contract is amended to reflect the
new reappointment and contract commencement period of July 1, 2008.
----------------
Motion by Commissioner Kramer, seconded by Commissioner Lain to table revised
agenda items 1 Ob and 1 Oc pertaining to the Reappointment of the Charter Position of
Corporate Secretary and Compensation Increase and Contract Amendment for the
Charter Position of Corporate Secretary.
Discussion: No reasoning was provided to Commissioner James' inquiry regarding the
desire to table the resolution.
The motion carried by roll call vote.
Yeas: Commissioners DeLuca, Kramer, Lain, and Rodocker.
Nays: Commissioners Cochran, James, and Zerkle.
Abstain: Commissioner Thomas.
Board Meeting Page 24 of 28
July 22,2008
Compensation Increase
For Charter Position of Corporate Secretary
RESOLVED, That the Corporate Secretary, Rhonda Jones, is hereby eligible to receive a
salary adjustment effective as of July 1, 2008.
RESOLVED FURTHER, That the Board of Commissioners authorizes a three percent
(3.00%) salary adjustment for the Corporate Secretary,based on the evaluation of the
employee's performance from July 24, 2007 through June 30, 2008.
----------------
Motion by Commissioner Kramer, seconded by Commissioner Lain to table revised
agenda items 1 Ob and 1 Oc pertaining to the Reappointment of the Charter Position of
Corporate Secretary and Compensation Increase and Contract Amendment for the
Charter Position of Corporate Secretary.
Discussion: No reasoning was provided to Commissioner James' inquiry regarding the
desire to table the resolution.
Action: The motion carried by roll call vote.
Yeas: Commissioners DeLuca, Kramer, Lain, and Rodocker.
Nays: Commissioners Cochran, James, and Zerkle.
Abstain: Commissioner Thomas.
esolution 2008-7-
Reappointment of the Charter Position of Director and General Manager
The Board's Rules of Administrative Procedures specify that the Board is to appoint a
Director and General Manager, Internal Auditor, and Corporate Secretary, respectively at
its first regular meeting following July lst of each year or as soon thereafter as may be
appropriate.
RESOLVED, That the Board of Commissioners hereby reappoints the following
individual to the Charter position of Director and General Manager for fiscal year 2008-
2009, or, until a successor is appointed,whichever last occurs:
J. Peter Lark, Director and General Manager
RESOLVED, That J. Peter Lark's current employment contract is amended to reflect the
new reappointment and contract commencement period of July 1, 2008.
Page 25 of 28
Board Meeting
July 22,2008
----------------
Motion by Commissioner Lain, seconded by Commissioner Kramer to approve the
Reappointment of the Charter Position of Director and General Manager resolution.
Action: Carried unanimously.
esolution 2008-71
Compensation Increase and Contract Amendment
For Charter Position of Director and General Manaller
RESOLVED, That the Director and General Manager, J. Peter Lark, is hereby eligible to
receive a salary adjustment effective as of July 1, 2008.
RESOLVED, That the Board of Commissioners authorizes a salary adjustment for the
Director and General Manger, such that his base salary equates to $239,000.
RESOLVED, the Director and General Manager's contract shall be amended to reflect a
defined contribution increase to 15%, and a severance package which includes 6 months
severance pay, 6 months employer paid COBRA premiums, and outplacement services.
FURTHER RESOLVED, The Board of Commissioners shall consider a possible
provision for granting the Director and General Manager a multi-year contract.
--------------------
Motion by Commissioner Lain, seconded by Commissioner Rodocker to approve the
Compensation Increase and Contract Amendment for Charter Position of Director and
General Manager resolution.
Discussion: Commissioner James advised that the Human Resource Committee met
yesterday and recommended that Peter Lark's salary be increased from $190,000 to
$239,000. Commissioner James noted that she was not in favor of the amount and
instead suggested a cost of living increase of 3-4%. The compensation will also consist
of a 6-month severance package, 6-months COBRA, and employment assistance after
termination. In addition, there was question as to whether or not the monthly car
allowance and existing memberships to the Lansing Country Club and University Club
was still included. Commissioner James indicated that she was in favor of the other items
but thought she and the citizens of Lansing would find the club memberships and
$239,000 salary to be excessive. The BWL is a public entity that should not compensate
its Director in this manner. Commissioner James also advised that it was a gross injustice
and she maybe the only Commissioner that shares this sentiment. The citizens are the
ratepayers and it is believed that if put to a vote, the citizens of Lansing would not agree
with the compensation package. Commissioner James advised that Mr. Lark has done a
good job and she did not begrudge a modest salary increase of 3-4%. However, on behalf
of the ratepayers she could not recommend nor thought warranted a 26% or $49,000
Page 26 of 28
Board Meeting
July 22,2008
salary increase. Commissioner James noted that they owe accountability to the citizens
of Lansing and if fellow Commissioners feel the increase is warranted then she is only
one vote. It was further advised that Commissioner James thought it neither appropriate
nor acceptable and she would not be in support of the compensation package.
Commissioner Cochran advised that although he is not a member of the Human Resource
Committee, he too was present for the discussion. He further noted that sometimes you
think that you are going to feel good and find something acceptable on one day and after
you have some time to think about it you change your mind. Commissioner Cochran
noted that Mr. Lark had done a very good job as was previously stated. He also
referenced the state of the economy; Lansing's current situation, upcoming union
negotiations, and the low percentage amount budgeted for anticipated rate increases for
non-bargaining employees and executive officers. He further advised that a raise of
$49,000 is approximately a little over 20% and when the board hired Mr. Lark a year ago
his salary was adjusted from $120,000 to $190,000. Commissioner Cochran noted that
Mr. Lark has one years experience as a General Manager and because of his performance
he deserves a raise but he found it hard to wrestle with his conscience that the board
would give such a huge raise when he did not believe it necessary. He noted that just
recently they asked the ratepayers to increase rates across the board and they are paying
for this; such a big increase is going to affect the budget that was just presented.
Commissioner Cochran further advised that he did not think it appropriate and hence he
will vote no on the resolution.
Commissioner James echoed Commissioner Cochran's sentiments and also noted that
there are many foreclosures and people losing their jobs in Lansing. As such, it would
not be in their best interest to grant the increase.
Commissioner Kramer noted that none of the previous comments were voiced during the
time in which the board was discussing said matters. He also provided the following
information for the general public's understanding: finding talented executives that are
capable of managing and operating a public utility company is very difficult. When you
are in an organization where you can find the right talent, at the right place, and time to
lead an organization, one of the most important things you need to do is to be able to
retain that talent. The analysis prepared by the Human Resource Department and
independent consultants found that the median average (50% of all similar positions)
presented an average pay scale of plus 10%was $293,000. Therefore, 50% of the
executives nationally in similar positions of responsibility earn $290,000 on average
(which represents 80-90 positions). It was noted that Mr. Lark accepting a$190,000
contract a year ago was very nice and very good for him to accept at a time when the
BWL needed an executive but it is time to respect and recognize the performance that he
has done and the capabilities that he is able to provide for the BWL. The new pay
structure is still well below the national average and well below what an individual of his
capabilities is able to earn at other organizations. Hence, it takes money to retain and
seek talented people to run a very complicated organization. Commissioner Kramer also
noted that he fully supports the resolution and believes that Mr. Lark is still underpaid for
the capabilities he brings to the organization.
Page 27 of 28
Board Meeting
July 22,2008
Commissioner Lain thanked Mr. Lark for coming to Lansing at the lower rate and noted
that his current pay is at the bottom of the scale for people in his venue.
Commissioner James stated that she would like to vehemently express her displeasure at
what she considered a horrendous amount for a public official and especially
inappropriate during tough economic times. Commissioner James acknowledged that she
was unaware that the board was trying to retain Mr. Lark and did not know that there was
another offer on the table, which would warrant this type of salary and compensation
package. She also advised that she did not begrudge Mr. Lark the ability to go out and
earn as much as possible. However, this is a public utility owned by the ratepayers and
everyone has to be accountable. There are people who cannot pay their bills, receive
cutoff notices, and are laid off. Commissioner James further advised that if she were Mr.
Lark she would not accept the compensation. She also noted that Mr. Lark is earning a
good amount of money and strongly encouraged him to accept a 4%increase until times
in Lansing get better. Commissioner James further noted that she understood the range
information developed by the Human Resource Department. However, she did not think
the resolution to be in the best interest of Lansing.
Action: The motion carried by roll call vote.
Yeas: Commissioners DeLuca, Kramer, Lain, Rodocker, Thomas and Zerkle.
Nays: Commissioners Cochran and James.
Abstain: None.
MANAGER'S REMARKS
Coal Contract. General Manager Peter Lark reported that the BWL with the assistance of
Executive Director Dick Peffley executed a coal rail contract with DTE that will allow
the citizens of Lansing to save $52 million over the next two years.
Fiscal Budget. Peter Lark inherited a budget with a net income loss of$6 million.
Although not guarantee, it is projected that the BWL will have year-end net income profit
of$12 million as opposed to a loss of$6 million, which is positive for the ratepayers.
Connections Live! The BWL is scheduled to host its 2"d Annual Connections Live on
September 15th from 5:30 p.m. to 7:30 p.m. at Dwight Rich Middle School. The event is
designed to help BWL customers lower their rates and save on electricity and natural gas
through various conservation efforts.
COMMISSIONERS' REMARKS
Commissioner James noted that she was displeased at the tabling of the resolutions
regarding the Corporate Secretary. She also advised that the Secretary has done a fine
job for the Board and they will take up the matter at another time.
Page 28 of 28
Board Meeting
July 22,2008
EXCUSED ABSENCE
No excused absences.
PUBLIC COMMENTS
Eric Crosley, 228 S. Foster, Lansing shared a short poem and expressed concern
regarding the General Manager's salary increase.
Rev. Richard Preston, 628 Lincoln Avenue, Lansing discussed the guiding principle of
common good and expressed concern regarding the General Manager's salary increase.
Steve Rall, 1608 W. Shiawassee, Lansing thanked Commissioners Cochran and James for
their comments regarding the General Manager's salary increase. He also expressed
concern regarding the mountain top removal coal mining process and its environmental
and economic effects in the Appalachia area.
ADJOURNMENT
On motion by Commissioner Cochran, seconded by Commissioner DeLuca, the meeting
adjourned at 6:42 p.m.
/s/Rhonda, Corporate Secretary
Filed with Lansing City Clerk
August 1, 2008
Approved by the Board: July 22, 2008
MINUTES OF THE BOARD OF COMMISSIONERS SPECIAL MEETING
LANSING BOARD OF WATER AND LIGHT
.71
Monday, July 21, 2008
(-'
The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing;
Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Joseph Graves, Semone
James, Peter Kramer, Frank Lain, Julee Rodocker and Sandra Zerkle.
Absent: None
The Secretary declared a quorum present.
Chairperson James called the meeting to order at 2:04 p.m.
PUBLIC COMMENT
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE
WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO
SO IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
COMMUNICATIONS
None.
MANAGER'S RECOMMENDATIONS
esolution 2008-7-1
Salary Management System
Fiscal Year 2008-2009
Whereas, the Human Resource Department, in conjunction with Paul Reagan of Dorey,
Reagan &Associates, has conducted a review and analysis of the Lansing Board of
Special Board Mtg.
July 21,2008
Page 2 of 5
Water & Light's current direct compensation design and administrative processes for its
Non-Bargaining Salary Management System; and
Whereas, the Chief Financial Officer and Human Resources Department, with the
concurrence of the General Manager has recommended to the Human Resources
Committee that the Board of Commissioners modify the current salary structure so as to
eliminate the lower tier of the current two-tiered base pay caps resulting in single
minimum/maximum pay ranges for each grade level and that the new range maximum
level be equal to the current pay range Control Points (50t"percentile of the labor market
+ 10% ); and
Whereas, the proposed salary structure change is designed to provide competitive base
pay packages that will enhance potential employee attraction, improve equity for recent
hires, and maintain cost management capabilities; and
Whereas, the Board of Water & Light is currently in the process of implementing a new
SAP Human Resources Management and Payroll System and the proposed salary
structure changes are considered"best practices" under SAP. Therefore, adoption of
staff s recommendations will save time and money in implementation because no special
configuration would be required; and
Whereas, the Human Resource Department has completed its annual review of the
Lansing Board of Water & Light's skill family ranges for non-bargaining employees for
the purpose of maintaining salary ranges in line with comparable positions in the labor
marketplace; and
Whereas, the Board of Commissioners approved the Board of Water and Light's Fiscal
Year 2009 Operating Budget, on May 27, 2008, that reflected merit increases for non-
bargaining unit employees of 2%; and
Whereas, the Board of Commissioners has been advised as to these recommendations.
RESOLVED, that the Board of Commissioners approve modification of the current
salary structure to eliminate the two-tier base pay caps, and set the pay range maximum
equal to the current pay range Control Point; and
FURTHER RESOLVED, that the Board of Commissioners adopt the recommended
adjustments to the non-bargaining unit skill family ranges; and
FURTHER RESOLVED, that the General Manager is authorized to develop all
procedures necessary for implementation of the new salary structure and skill family
ranges.
Motion by Commissioner Cochran, seconded by Commissioner Graves, to approve the
Salary Management System for Fiscal Year 2008-2009.
Special Board Mtg.
July 21,2008
Page 3 of 5
Action: Carried unanimously.
CLOSED SESSION
Moved by Commissioner Lain, seconded by Commissioner Zerkle to go into closed
session to discuss a privileged document received from Melissa Jackson, Attorney with
Foster, Swift, Collins & Smith, P.C. as protected by the Open Meetings Act exemption MCL
15.268(h). (2:06 p.m.) The roll was called.
Yeas: Commissioners Cochran, DeLuca, Graves, James, Kramer, Lain, Rodocker and
Zerkle.
Nays: None.
Absent: None.
Carried unanimously.
Moved by Commissioner Lain, seconded by Commissioner Cochran that the Special
Board meeting return to open session.
Carried unanimously.
The Special Board meeting reconvened in open session at 3:00 p.m.
On motion by Commissioner James, seconded by Commissioner Kramer, to authorize
the Board's attorney to proceed in accordance with the attorney's recommendation made
in closed session.
Action: Carried unanimously.
The Special Board meeting took a meeting break at 3:05 p.m.and resumer!at 3:12 p.nr.
RESOLUTIONS
esolutio 2008-7
ENGAGEMENT LETTER FROM C.L. MOORE & ASSOCIATES, P.C.
RESOLVED, that the Lansing Board of Water & Light accept the engagement letter as
presented by Charles Moore of C.L. Moore &Associates, P.C. which includes, Auditing
Process Services Fees in an amount not to exceed $150,000 per annum and for a term not
to exceed August 1, 2010.
FURTHER RESOLVED, in accordance with the engagement letter Charles L. Moore
shall perform directorship responsibilities until a date not to exceed July 18, 2009, or
until the Board of Commissioners appoint a Director of Internal Audit, whichever occurs
first.
Special Board Mtg.
July 21,2008
Page 4 of 5
................
Motion by Commissioner Lain, seconded by Commissioner Graves, to approve the
Engagement Letter from C.L. Moore &Associates, P.C.
Action: Carried unanimously.
MANAGER'S REMARKS
None.
COMMISSIONERS' REMARKS
Commissioner Cochran advised that he is scheduled to attend a demonstration plant in
Madison, Pennsylvania Wiseonsi to see how a plasma plant operates in making biofuels
del for a variety of uses.
Commissioners Lain and James both thanked Commissioner Graves for his service to the
Board of Water and Light (BWL).
Commissioner Graves noted that his will miss dealing with the BWL in a direct manner
and advised that his time as a Commissioner has been both challenging and rewarding.
EXCUSED ABSENCE
None.
PUBLIC COMMENTS
Jim Dravenstat-Moceri, Assistant Business Manager for IBEW Local 352 expressed
appreciation to Commissioner Graves for the work he has done as a Commissioner.
The Special Board ineeting took a meeting break at 3:22 p.m.and resumed at 3:32 p.m.
UNFINISHED BUSINESS
Moved by Commissioner Graves, seconded by Commissioner Kramer to go into closed
session to discuss a privileged document received from Brandie Erken, General Counsel
as protected by the Open Meetings Act exemption MCL 15.268(h). (3:35 p.m.) The roll
was called.
Yeas: Commissioners Cochran, DeLuca, Graves, James, Kramer, Lain,Rodocker and
Zerkle.
Nays: None.
Absent: None.
Carried unanimously.
Special Board Mtg.
July 21,2008
Page 5 of 5
Moved by Commissioner Cochran, seconded by Commissioner DeLuca that the Special
Board meeting return to open session.
Carried unanimously.
The Special Board meeting reconvened in open session at 3:55 p.m.
ADJOURNMENT
On motion by the Board of Commissioners, the meeting adjourned at 3:57 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
July 22, 2008
Approved by the Board: July 22, 2008
MINUTES OF THE BOARD OF COMMISSIONERS' MEETING <<
LANSING BOARD OF WATER AND LIGHT
Tuesday, May 27, 2008 �•'�
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232
Haco Drive, Lansing, Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Semone James, Peter Kramer, Frank
Lain and Sandra Zerkle.
Absent: Commissioners Joseph Graves and Julee Rodocker
The Secretary declared a quorum present.
Chairperson James called the meeting to order at 5:30 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Cochran, seconded by Commissioner DeLuca, to approve the
minutes of the regular board meeting held March 25, 2008.
Carried unanimously.
PUBLIC COMMENTS
THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME
TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING
TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO
IMMEDIATELY PRIOR TO ADJOURNMENT.
There were no public comments.
COMMUNICATIONS
Letter from Commissioner Frank Lain regarding Commissioner Retiree Appreciation
Gift.
Received and placed on file.
Board Meeting Page 2 of 26
May 27,2008
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE
April 8, 2008
The Committee of the Whole of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 5:30 p.m. on Tuesday, April 8, 2008.
Committee of the Whole Chair, Julee Rodocker called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Tony DeLuca, Joseph Graves, Semone James, Frank Lain, Julee Rodocker and
Sandra Zerkle.
Absent: Commissioner Peter Kramer.
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Cochran, seconded by Commissioner Zerkle to approve the
minutes of the Committee of the Whole meeting held March 13, 2008.
Carried unanimously.
Balanced Scorecard
Steve Brennan, Manager of Erickson Station gave an overview of the balanced scorecard,
its components, and current standing. The balanced scorecard composed of four
perspectives and measures include financial performance, customer service, operational
excellence, and people excellence. Some of the items compete against one another
therefore it is their goal to have greater than 50% of the items meet their respective
targets, of which the BWL is currently at 75%. Listed below are the measures for each
respective performance.
• Financial Performance
o Operations and Maintenance Budget to Actual Variance
o Rate Comparison to Competitors
o Commodity Unit Cost - $/KWH, $/ccf, $/Mlb, $/Ton-hrs
• Customer Service
o Speed of answer(seconds)
o Percentage of Meters Read
o Percentage New Services Installed on Time
• Operational Excellence
Page 3 of 26
Board Meeting
May 27,2008
o Asset Reliability—CAIDI (minutes), Availability Factor, and Number of
Circuits with 5 or more Breaker Actions
o Enviromnental Stewardship -Percentage of fly Ash Sold and Number of
Variances, Compliance Notices and Fines
People Excellence
o Safe Workplace
o Employee Development—Average number of training hours per employee
In response to a Commissioner question regarding the BWL's rate comparison, staff
noted that some of the percentage changes were a result of varying fuel cost adjustments,
rate changes (including summer and winter month variations) and surcharges. BWL and
Consumers Energy(CE) do not have identical rate comparisons due to the unbundled
surcharges contained in CE's rate structure. Following the completion of the overview, it
was further noted that scorecard explanations are available online and each department
has a departmental scorecard available to all employees.
Shut Off for Non-Pay Procedure
Bob Perialas, Manager of Customer Accounts and Collections thanked the committee
members for an opportunity to present. He then proceeded to give an overview of the
shut off for non-pay procedure relative to the billing cycle, grace period, delayed
payment charge, shut off eligibility/final notices and the shut off pool.
it was noted that the comuter alorithm
In response to a Commissioner e
determines which accounts are eligible for shut off based on the number of days of
delinquently and the amount owed.
It was also advised that the BWL has the flexibility to extend the leave on for heat season
to protect the health and safety of its customers as well as the BWL's equipment. The
leave on for heat season is a practice in which electricity is not disconnected for non-
payment during the winter months of December 1st thru April 1st due to incremental
weather. It was also stressed that disconnecting are service for made to contact t customer in an effort
ent is viewed as a
last resort. Prior to disconnection, attempts
to make account arrangements prior to service interruption. Customer Account
Representatives also have the ability to install 8 amp limiters in lieu of disconnecting
service,which typically allows limitd use f the count service
The BWLll appropriate also have color-coded
arrangements
and/or payments have been made on the ac
security tabs that alert personnel to a medical condition within the household that requires
electricity. In addition, the BWL also partners with various agencies throughout the area
that assist customers with utility bills.
In response to a Commissioner question regarding the representatives' discretion, it was
noted that in order to have a positive field action one of the following three things must
happen: 1) the power will be shut-off, 2) the customer must make a signed arrangement,
or 3) they can make a payment on the account. In response to another question regarding
periodic patterns relative to the field representatives, it was advised that it is customary
Page 4 of 26
Board Meeting
May 27,2008
for the same representatives to work in the same territory. Therefore, if a promise to pay
is not kept then the field representativeeT less audits lfor homeowners (via Urban Options),
y to work with the customer. In
addition, the BWL can also conduct en gy
which help customers learn how to reduce their consumption.
Credit Card Payment
Bob Perialas gave an overview of the changes to the credit card payment process. It was
advised that beginning May 1, 2008 the BWL would no longer directly accept non-
enrolled credit card payments in an effort to reduce costs. Currently, the BWL is
responsible for all credit card charges which amount to over$700,000 ye r for As
as result,
customers would be allowed to pay credit
I addition,through
Hers an also continue to
convenience fee payable to the vendor.
participate in the automatic payment program in which the bill amount is deducted from
their respective credit card at no additional fee. An automatic teller machine has been
placed in the customer service lobby to allowas to access cash and a phone lcard
ine
will also be available to allow persons to contact the 3 party vendor to make credit
payments by phone. Changing the current process would allow the BWL to save
approximately$400,000 a year. A customer feedback hotline number was installed to
allow customers an opportunity to provide input regarding the changes. Thus far, staff
has only received a couple of calls in which they were able to provide satisfactory
explanations. Reducing the cost helps to eliminate the subsidy. It was also noted that
approximately 10% of BWL customers pay by credit card, including those that are
enrolled in the automatic bill payment plan.
Peter Lark, General Manager noted that 90% of the cutomer base is resent t mesnone of the larger udtilitie taccept
who choose to pay by credit card. At the p
credit card payments and it is an option for the
B ound by allowing their continuedL to eliminate their use in its 1useY
However, it was thought best to create a mid gr
and eliminating the indiscriminate user. The first step would be implementing the change
and then determining other options for the nextyear.
Following the overview, the Commissioners expressed concern with charging some
customers a fee to pay by credit card while others are not required to do so. ut 1 t bill.
hey also
noted that occasional credit card users might have difficulty in paying Y
Therefore, an additional convenience fee may unfairly
tter thaparage that customer base. The
should have brought before the
Commissioners also advised this to be a policy
committee prior to its implementation. In addition,ratepayer.was suggested
After further discussiondthe
aware in advance of any changes that impact t
following action was taken:
On motion by Commissioner Lain, seconded b ttee for further discussion.issioner ,thecredit card
payment matter was referred to the Finance Comm
Action: Carried unanimously.
Page 5 of 26
Board Meeting
May 27,2008
Renewable Energy Update
George Stojic,Executive Director of Strategic Planningis d the
ercompoIt nts of the
regarding forthcoming strategic plan and recommendations g g new
advised that staff is waiting for the completion of the integrated resource plan, cost
lan
related to compliance as well as cost associated with oximate y 3aweekss It waspfurther
should be complete and ready for presentationpp
noted that the BWL is the first utility company in the state of Michigan to institute a
renewable portfolio standard. As of now, the BWL is on schedule to meet its 2012 and
2016 goals respectively. The renewable energy update provided information relative to
landfill energy,hydroelectric, wind, solar and biomass.
• Landfill energy—very reliable,high availability and significantly less expensive than
other renewable resources rice competitive
• Hydro-electric—lower capacity factor than landfill facilities,p p
relative to wind and solar, limited usage to existing instate dams
o LBWL Moores Park— South unit will be
aback onlinert has beenbdle porlse08. North
0ral years.
unit dam is scheduled for investigation,
o BWL North Lansing—It is unlikely that this dam will return to service due to
rehabilitation cost, expiration of the FERC license, the cost to re-license and
the uncertainty of the dam itself. act to the BWL is
o Tower-Kleber—The dam under con
tr
the end of 2010. A re-evaluation as to whether h scheduled expire to at
e BWL shouldrenewhe
contract is under review.
Wind—high energy cost and low reliability. It also has a low capacity factor
depending on its location within the state. The BWL cur size units has possible wind
projects with Granger under review for small o
Solar—low capacity factor,higher cost compared to other renewable resources, and
can have its greatest impact during the summer peak periods.
instalWL staff is lation on on top of the currently
developing a solar energy evaluation project f potential
reservoir located across from the Dye Water plant.
Biomass—involves the use of waste matter and
oo es Park steam generators and tontly
exploring the use of biomass to co-fire the M
evaluate its use at one of the BWL's pulverized coal units.
The Committee of the Whole took a meeting breakfrom 6:52 p.m. to 7:10 p.m.after which the meeting resumed.
Marketing Update Marketing
George Stojic introduced and acknowldKellee Chrd newly istenseneds contributions and efforts to
ager Sue
Warren and Customer Projects Manager
the existing marketing and customer development
ro e t that staff members a eHe also gave a aworking on
update, which noted several new development pand
in which to provide infrastructure estimates. It was are north Ter noted that the he BWLes long-
revenue amounts are estimated and the projects guaranteed.
term forecast projects 1.4% growth and the developmentonlprojects
roects to that represent 7%spe give rowth
n
spread out over 5-7 years,with some projects coming prior
timeframe.
Board Meeting Page 6 of 26
May 27,2008
In addition, the BWL along with six other utilities is a member of the Michigan Public
Power Agency (MPPA). The BWL sells a significant amount of power to the power pool
and the majority of the other members aside from Grand Haven are net purchasers. There
has been significant conflict during the past few years as to how the power should be
priced for sell, which resulted in a termination of the BWL's power pool participation
effective calendar year 2010. Nevertheless,based on the negotiation efforts of Dave
Bolan, Peter Lark and Doug Wood the MPPA has agreed to modify the price paid to the
BWL for the energy it supplies to the pool. As a result, the BWL expects to receive
approximately$1,000,000 in additional revenue during the first year and approximately
$5,000,000 in incremental steps over the next three years. The resolved conflict is a
major step forward for the municipal community, which is beneficial to the BWL and the
MPPA members in forging a long-term partnership with regards to new generation.
In response to a Commissioner question, it was noted that despite the termination notice
given to the MPPA approximately 2.5 years ago, the BWL is still committed to its
obligations. It was advised that the BWL did not increase its obligations to the MPPA
within the confines of the new agreement. The BWL is also not committed to providing
bridge power to the municipalities unless they are partners in the building of a new power
plant. In relation to new generation, it was advised that utility companies need to
determine their strategy relative to proposed environmental legislation and carbon
footprints.
EPAct of 2005 Update
Sue Warren, Marketing Manager gave an EPAct of 2005 update which included a request
to host a public hearing on May 22, 2008 to receive public comment regarding net
metering, fuel diversity and fossil fuel generation efficiency. In response to a
Commissioner question, it was noted that the customer group interested in said topics are
those who store renewables on their property and are interested in selling it via net
metering. Following the public hearing, staff is required to make its final
recommendation to the Board of Commissioners prior to August 8, 2008.
On motion by Commissioner James, seconded by Commissioner Cochran, the
Committee of the Whole agreed to host a public hearing on May 22, 2008 to fulfill the
requirements of EPAct of 2005 that will address Net Metering, Fuel Diversity and Fossil
Fuel Generation Efficiency.
Action: Carried unanimously.
Bond Issue
Sue Devon, Chief Financial Officer gave an update regarding the bond issue and also
introduced Bond Counselor, Bill Danhoff of Miller, Canfield, Paddock and Stone, P.L.C.
and Bond Financial Advisor, Warren Cramer of Robert W. Baird & Company. The
bonds were sold through a competitive bid process on April 2, 2008 at a premium rate of
4.835%. There were four bidders that included City Group (4.91%), Merrill Lynch (5%),
RW Baird (4.95%) and Wachovia Bank (4.83%). Following the conclusion of the bond
process, the bid was awarded to Wachovia Bank. The BWL's rating with Standard&
Page 7 of 26
Board Meeting
May 27,2008
Poor's is AA- and Moody's is Aa3. The previous rate covenant was 150% and was
recently reduced to 125%,which results in lower covenant requirements and lower
promises to bond holders. It was also noted that the BWL has standalone status regarding
its financial qualifications. Therefore,the BWL's qualification status is separate from
that of the City of Lansing. It was further advised that in moving forward the BWL is in
a good position if it were to seek additional bonds for a large capital improvement
proj ect.
In response to a Commissioner question, it was noted that customers could contact
Wachovia Bank directly to determine whether or not the bonds are available for sale to
the general public.
Following the update, the Commissioners requested a copy of the rating report and
official statement.
Sparrow Foundation Update
Calvin Jones, Director of Public Relations, Diversity and Organizational Development
presented an update regarding the Sparrow Foundation. The Sparrow Foundation in
conjunction with the Sparrow Hospital has presented the BWL with an opportunity for it
to partnership in donating a monetary gift to the foundation. As such, the Sparrow
Foundation has proposed a naming gift of$50,000 that could be paid over a course of 10
years. The primary source of the monetary gift will be a portion of the proceeds raised
during the BWL Chili Cook-off so as not to impact ratepayer dollars. In return for its
investment the BWL has the option to name one of three areas: trauma room inside
Sparrow's new Emergency Department, smaller Northside Rooftop Patio on the fifth
floor of the new West Tower, or the Fast Track (Urgent Care) waiting room inside
Sparrow's new Emergency Department.
In response to a Commissioner question, it was noted that proceeds from the Chili Cook-
off are currently donated to the Impression 5 Museum and the Hope Scholarship
program; and each charity will continue to be a recipient of said funding. In response to
another question, staff noted that they were unaware of how much is donated to Pennies
for Power. However, the BWL is currently in the early stages of developing a large
fundraising effort that would benefit the Pennies for Power program.
On motion by Commissioner James, seconded by Commissioner Graves, the Committee
of the Whole agreed to select the naming option of the Fast Track(Urgent Care) waiting
room inside Sparrow's new Emergency Department.
Action: Carried unanimously.
APPA National Conference Discussion
The Committee of the Whole discussed the upcoming American Public Power
Association(APPA)National Conference scheduled for June 2008. It was noted that the
conference is worthwhile and offers fine educational activities. It was also advised that
as part of the conference, APPA is offering an opportunity to work with Habitat for
Board Meeting Page 8 of 26
May 27,2008
Humanity in building new homes. As such, the Committee of the Whole agreed that
since it is an APPA sponsored activity hosted as part of the conference, the cost to depart
in advance in order to participate in said event would be covered in the overall
conference cost.
Commissioner Cochran reported that he plans to attend the following pre-conference
seminars entitled, "Improving Controls to Protect Your Utility's Assets" and"Rates Part
2: Understand Marginal Cost-Based Rates". He also recommended that other
Commissioners consider attending the seminar entitled "Rates Part 1: Understanding
Cost-of-Service-Based Rates". In addition, it was also noted that it is general practice for
the Secretary to receive a copy of the presentation materials from each Commissioner
upon their return and compile a complete conference packet to distribute to each
Commissioner for future reference and review.
Internal Auditor of the Year Award Discussion
The Board of Commissioners received a letter from the Institute of Internal Auditors
soliciting nominations for the Internal Auditor of the Year Award.
On motion by Commissioner James, seconded by Commissioner Cochran, the
Committee of the Whole agreed to nominate Susan Pifer, Director of Internal Audit for
the Internal Auditor of the Year Award with the Institute of Internal Auditors.
Action: Carried unanimously.
Following brief discussion, Commissioner Graves agreed that he would take
responsibility for composing the information and submitting the nomination.
Commissioner Graves also asked that all of the board members provide input within the
next two days via email to Secretary Jones in order to finalize and submit the nomination
letter by the April 16, 2008 deadline.
Commissioner Retiree Appreciation Resolution Discussion
On motion by Commissioner Cochran, seconded by Commissioner Lain, the Committee
of the Whole agreed to postpone the Commissioner Retiree Appreciation resolution.
Discussion: It was noted that the Commissioner Retiree Appreciation resolution was
previously passed at a prior committee meeting. It was then suggested that the Board
continue to act under past practice regarding departing Commissioners as opposed to
creating a new policy. Therefore, a departing Commissioner would continue to receive a
resolution, BWL watch, and a dinner in honor of their service to the BWL. However, if a
departing Commissioner does not want the dinner for any reason then they would have
other options not to exceed $500.00. The choice to have or not have a dinner would be
the option of the departing Commissioner. It was further advised that Director of Internal
Audit Susan Pifer and Charles Moore of C.L. Moores &Associates confirmed that
$500.00 does not meet the threshold of a 1099 form. In addition, it was also noted that
the gift amount would be deducted from the Board of Commissioners budget.
Board Meeting Page 9 of 26
May 27,2008
Commissioner DeLuca expressed concern regarding the perception of giving a departing
Commissioner a gift certificate in lieu of a dinner in their honor. Following brief
discussion, the Committee of the Whole voted on the motion.
Action: Carried unanimously.
Other
On motion by Commissioner Lain, seconded by Commissioner Cochran, the Committee
of the Whole agreed to excuse the absence of Commissioner Peter Kramer.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 8:25 p.m.
Respectfully submitted,
Julee M. Rodocker, Chair
Committee of the Whole
FINANCE COMMITTEE
April 22, 2008
The Finance Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 4:00 p.m. on Tuesday, April 22, 2008.
Finance Committee Chair, Joseph Graves called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran(arrived at 4:17 p.m.), Joseph Graves, Semone James, and Peter Kramer. Alternate
committee member Commissioner Frank Lain was present in addition to Commissioner
Tony DeLuca.
Absent: None
Public Comments
There were no public comments.
Budget Information
Sue Devon, Chief Financial Officer gave note of the Board of Water and Light (BWL)
budget assumptions for fiscal year 2009. The presentation materials contained
information pertaining to the budget calendar, sales forecast, revenue assumptions,
operating expenses and capital expenditures.
Following brief review, the committee asked that the presentation materials contained on
page 5 under rate increases be changed to reflect, "increases/decreases", since they have
Board Meeting Page 10 of 26
May 27,2008
not made a determination as to whether or not future rate changes will increase or
decrease. In addition, the committee also requested five years of charts/graphs depicting
the yearly average increased costs for health care, prescription drugs and co-pays, which
pertains to the anticipated health care,prescription increase of 9.5%noted on page 7 of
the presentation.
In response to the request, Sue Devon noted that they would have the additional
healthcare information available, which would also include a breakdown between active
and retired employees.
Budtet Review
Internal Auditor. Susan Pifer, Director of Internal Audit gave a brief overview of the
proposed budget for the Department of Metrics and Audit for fiscal year 2009. During
the overview it was noted that the proposed budget is on a continuance basis that contains
3 full time equivalents and a 3/4 equivalent rate for outside consultant fees for the services
of C.L. Moore &Associates.
Corporate Secretary and Board of Commissioners. Rhonda Jones, Corporate Secretary
gave a brief overview of the Corporate Secretary and Board of Commissioners proposed
budgets for fiscal year 2009. It was advised that both budgets were essentially similar to
the previous year with decreases made to the Commissioners budget relative to outside
services due to a decreased anticipated need for consultants. Following brief discussion,
the Finance Committee took the following action:
On motion by Commissioner James, seconded by Commissioner Lain, the Finance
Committee approved the fiscal year 2009 budget for the Department of Metrics and
Audit, Corporate Secretary, and the Board of Commissioners, which will be submitted
with the overall budget to the full board on May 27, 2008.
Discussion: Commissioners DeLuca and Lain noted for the record that they are not
supportive of the retiree gifts.
Action: Carried unanimously.
Credit Card Payment
Peter Lark, General Manager gave an overview of the credit card payment system and the
effects of the current structure,proposed changes, and the possible application of
convenience fees to all credit card paying customers. The proposed change would
eliminate the use of non-enrolled credit card payments. Therefore, customers who are
enrolled in the automatic payment plan would not see any changes. Instead those who
are not enrolled and desired to pay by credit card would contact a third party vendor who
in turn would assess the customer a convenience fee. The proposed change made in an
effort to reduce cost would save the BWL approximately$400,000. It was further
advised that the change is the middle ground between either leaving the program as is or
charging all credit card customers a convenience fee. In addition, Manager of Customer
Accounts and Collections Bob Perialas explained the specifics of the cost breakdown
Board Meeting Page 11 of 26
May 27,2008
associated with the credit card payment process and the analysis regarding merchant
banks.
Following lengthy discussion, Commissioner Cochran expressed concern regarding the
creation of disparity between one customer base versus another, and suggested that staff
either leave the program as is or end the acceptance of credit card payments in its
entirety.
Subsequent to additional discussion, it was also noted that the proposed credit card
change is a good business practice and a way in which to exhibit cost reductions to the
ratepayer. As such, cost reduction measures should be communicated to the ratepayer
accordingly, as operating cost reductions were a topic of discussion during the previous
rate hearing. Pursuant to additional discussion, the Finance Committee took the
following action:
On motion by Commissioner James, seconded by Commissioner Kramer, the Finance
Committee voted to support the credit card payment proposal as presented by the General
Manager.
Yeas: Commissioners Graves, James, Kramer and Lain
Nays: Commissioner Cochran.
Action: Motion carried.
Following the vote, Commissioner Kramer congratulated staff regarding the task and
asked that they continue to look for opportunities to save money.
Commissioner Graves also asked staff to send the Commissioners a copy of the verbiage
they intend to use in announcing the proposed changes to the ratepayers prior to the next
Board meeting.
Other
Commissioner Cochran gave a brief overview of his experience as a judge for the BWL
amateur chili cook-off contest held on April 19, 2008.
There being no further business, the meeting adjourned at 4:35 p.m.
Respectfully submitted,
Joseph E. Graves, Jr., Chair
Finance Committee
Board Meeting Page 12 of 26
May 27,2008
HUMAN RESOURCE COMMITTEE
May 1, 2008
The Human Resource Committee of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 12:10 p.m. on Thursday, May 1, 2008.
Human Resource Committee Chair, Sandra Zerkle called the meeting to order and asked
the secretary to call the roll. The following members were present: Commissioners Tony
DeLuca, Frank Lain and Sandra Zerkle. Alternate committee members Commissioners
Semone James and Julee Rodocker were also present.
Absent: Commissioner Joseph Graves
Public Comments
There were no public comments.
Uniform Board Appointee Evaluation Forms
The Human Resource Committee met to discuss the need for a simplified uniform
evaluation tool in which to conduct the performance evaluations for the board's
appointees. As such, the committee members discussed utilizing the Board of Water and
Light (BWL) Planning and Feedback Summary Form in conjunction with the Salary
Development Interview Form as the performance evaluation tool. It was noted that the
appointees would list their performance goals and objectives on the planning and
feedback form and complete a self-evaluation at fiscal year-end. Following lengthy
discussion, the Human Resource Committee took the following action:
On motion by Commissioner James, seconded by Commissioner Lain, the Human
Resource Committee agreed to use the BWL Planning and Feedback Summary Form and
the Salary Development Interview Forms as the employee performance evaluation tools
for the Board of Commissioner board appointees. As such, the Salary Development
Interview Form should remove the terminology of limited asset, definite asset, and strong
asset and replace it with exceeds expectation, meets expectation, and does not meet
expectation. In addition, an extra page will be added to the evaluation form to allow for
appointee feedback following their respective evaluation.
Discussion: The committee confirmed that the forms would be used in the evaluation
process for the current fiscal period. A copy of each appointee's fiscal year-end goals
will be included in their evaluation materials as a reference point. Additionally, the
Human Resource Committee recommendation regarding the evaluation forms will be
forwarded to the Committee of the Whole for further review and approval.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 12:43 p.m.
Board Meeting Page 13 of 26
May 27,2008
Respectfully submitted,
Sandra Zerkle, Chair
Human Resource Committee
FINANCE COMMITTEE
May 13, 2008
The Finance Committee of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 4:00 p.m. on Tuesday, May 13, 2008.
Finance Committee Chair, Joseph Graves called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Joseph Graves, and Semone James (arrived at 4:10 p.m.). Alternate committee
members Commissioners Frank Lain and Julee Rodocker were present in addition to
Commissioners Tony DeLuca and Sandra Zerkle(arrived at 4:32 p.m.).
Absent: Commissioner Peter Kramer.
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Lain, seconded by Commissioner Cochran to approve the
minutes of the Finance Committee meeting held April 22, 2008.
Action: Carried unanimously.
Rules and Regulations for Electric, Water, Steam and Chilled Water
Kellee Christensen, Manager of Water System Integrity and Customer Projects
referenced the Rules and Regulations summary update information contained in the
committee meeting packet. Following brief discussion, the Finance Committee took the
following action:
On motion by Commissioner Cochran, seconded by Commissioner Lain, the Finance
Committee agreed to forward the proposed resolution for the Rules and Regulations for
Electric, Water, Steam, and Chilled Water Utility Services to the full board for
consideration and approval on May 27, 2008,
Action: Carried unanimously.
FY 2009 BudIlets and Six Year Forecasts
Susan Devon, Chief Financial Officer gave an overview of the fiscal year(FY) 2009
financial plan. The budget presentation materials included the following: sales forecast,
revenue assumptions, operating expense assumptions, operations and maintenance budget
Board Meeting Page 14 of 26
May 27,2008
by category, budgeted net income/cash flow, comparative financials (FY08/FY09), return
on net fixed assets, six year forecast, FY2009 capital budget, and historical and budgeted
health care costs.
SALES FORECAST FOR FY 2009 COMPARED WITH FY 2008
% '08 Forecast
Utility FY09 Forecast FY08 Budget to '08 Budget
Electric—Retail (mwh) 2,346,879 2,275,881 3.1%
Electric—Wholesale (mwh) 1,037,009 909,322 14.0%
Electric (mwh) 3,383,888 3,185,203 6.2%
Water(ccf) 10,697,797 10,782,933 -0.8%
Steam (mlb) 692,250 749,719 -7.7%
Chilled Water(tnhrs) 9,641,418 8,613,560 11.9%
Electric:
• Residential & commercial is approximately flat.
• Industrial forecast is up due to increase in FY2008 actual sales.
• Wholesale volumes increased due to projected increases in power plan availability.
Water:
• Retail load is down 2.8% due to lost GM load.
• Wholesale volumes increased over FY08 budgeted levels for Delta Township and
ELMWA.
Steam:
• Steam loads for GM approximately flat, reduction in Steam Commercial due to
conservation.
Chilled Water:
• Chilled Water loads up due to higher 2007 and YTD 2008 sales.
REVENUE ASSUMPTIONS
• Projected rate increases, January 2009:
• Electric: 4.0% _ $3.2 million additional net revenue annually
• Water: 7.0% _ $.8 million additional net revenue annually
• Steam: 9.0% _ $.4 million additional net revenue annually
• Chilled Water based on minimum bill level, no rate increase.
• Electric Wholesale
• Lower revenue than expected due to anticipated Belle River outage.
• Electric Wholesale margin:
• Margins will be affected by higher fuel costs.
• Belle River 12-week outage will affect availability.
• Increased MPPA power pool revenues.
Board Meeting Page 15 of26
May 27,2008
• Water Wholesale—contract negotiations continue, anticipated increase included in
budget.
OPERATING EXPENSE ASSUMPTIONS
• Reviews held with each department.
• Overall O&M increase 4.4% compared to final FY 2008 forecast.
• Current CPI Index—4% inflation.
• Increase of 30 FTE employees while maintaining only 4.4% increase overall.
• Wage and salary increases =2%.
• Increase in Health Care cost= 9.5%.
• Total cost per ton of coal in FY 2009 has increased 25% due to 30% increase in rail
costs and 17% increase in coal costs vs. FY 2008.
F Y 2009 O&M B UDGET BY CATEGORY(excludes depreciation)
Coal, Chemicals $77,958,000 33%
Labor 49,213,000 20%
Purchased Power 45,629,000 19%
Active/Retiree Benefits 27,612,000 11%
Other 22,238,000 9%
Material 11,534 5%
Pension 6,604 3%
$240,788,000
FY 2009 B UDGETED RETURN ON NET FIXED ASSETS
Total Electric Water Steam Chilled Water
0.9% 3.0% -1.1% -5.7% -5.3%
FINANCIAL PROJECTIONS: Six-year Forecast FY2009—FY2014 -Assumptions
• Projected sales levels—conservative growth
• Rate increases
• Electric (January) =4% in FY09, 3% in FY10, 2.5% in FYI 1 —FY14
• Water(January) = 7% in FY09, 6% in FY10—FY14
• Steam (January) =9% in FY09, 7.5% in FY10—FY14
• Chilled Water (July) = 3% in FY10—FY14
• Begins with FY09 Operating expenses (included allocations) with 2.5% inflation in
FY10—FY14, benefits at 5%.
• Capital & environmental expenditures per six year forecast.
• $40mm bond issue for Water in FY09/10 only.
• Includes $6mm per year drawn from Belle River fund.
CREDIT ISSUES
• Financial Goals
• Maintain credit quality
• Ensure adequate liquidity
• Maintain rate competitiveness
Board Meeting Page 16 of 26
May 27,2008
• Efficient & appropriate use of capital
• 4% Return on Net Assets
FY2009 CAPITAL BUDGET ASSUMPTIONS
• Revenue producing customer driven capital additions and those projects justified by
7-year cost/benefit analysis (will be noted as "Revenue Projects"),
• Lead service replacement program budgeted at $7,000,000.
• CSO related expenses budgeted to coincide with most recent City of Lansing
schedule.
• Environmental Compliance Projects included as required to meet current and
projected future emissions regulations.
• Renewable Energy Projects budgeted at $2,230,000.
• Financial systems upgrades (HR and payroll) to SAP environment budgeted at
$2,645,000.
FY 2009 CAPITAL BUDGET PROJECT CATEGORIES
Reliability $31,504,000 60%
Revenue 6,574,000 13%
Compliance 5,836,000 11%
Safety 4,570,000 9%
Environmental 4,002,000 8%
$52,486,000
The FY2009 capital budget recommendation also itemized by electric,water, steam,
chilled water and common facilities total $52,486,000. The FY2009—FY2014 six-year
capital forecast and the historical and budgeted health care costs were also included in the
committee meeting packet materials. Following discussion, the Finance Committee took
the following action:
On motion by Commissioner Cochran, seconded by Commissioner Lain, the Finance
Committee agreed to forward the proposed resolution for the Fiscal Year 2009 Operating
and Capital Budgets to the full board for consideration and approval on May 27, 2008.
Action: Carried unanimously.
RFP (401A, 457) Update
Susan Devon provided a Request for Proposal (RFP) update regarding the Defined
Contribution Pension (401A) and Deferred Compensation Savings (457) Plan's
respectively. It was noted that the top four (4) RFP's as ranked by the Joint Evaluation
Committee members will be scheduled for an interview for further analysis. It was also
suggested that Susan Pifer, Director of Internal Audit review the committees' numerical
analysis prior to scheduling the interviews. In addition, Commissioner Cochran advised
that he would like the opportunity to sit in on the vendor interviews if possible.
There being no further business, the meeting adjourned at 4:41 p.m.
Board Meeting Page 17 of 26
May 27,2008
Respectfully submitted
Joseph E. Graves, Jr., Chair
Finance Committee
COMMITTEE OF THE WHOLE
May 13, 2008
The Committee of the Whole of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 5:30 p.m. on Tuesday, May 13, 2008.
Committee of the Whole Chair, Julee Rodocker called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert
Cochran, Tony DeLuca, Joseph Graves, Semone James, Frank Lain, Julee Rodocker and
Sandra Zerkle.
Absent: Commissioner Peter Kramer.
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner James, seconded by Commissioner Graves to approve the
minutes of the Committee of the Whole meeting held April 8, 2008.
Discussion: Commissioner Lain provided a letter regarding the proposed Commissioner
Retiree Appreciation resolution and asked that it be placed on file. Following his request,
the committee members discussed the contents of the letter and explained their
understanding of the resolution that was previously postponed. Following further
discussion, the Committee of the Whole took the subsequent action regarding approval of
the April 13, 2008 meeting minutes:
Action: Carried unanimously.
National Safety Council Assessment 2008 Report Summary
Sue Pemberton, Director of Industrial Health and Safety gave an overview of the
National Safety Council Assessment 2008 report. The Board of Water and Light (BWL)
has improved its rating from 1.3 in 2005 to 2.0 (fair) in 2008 on a 4.0 scale. There was
significant improvement in 8 of the 9 assessment categories that included the following:
• Management Leadership and Commitment
• Assessments, Audits and Continuous Improvements
• Hazard Recognition, Evaluation and Control
• Motivation, Behavior and Attitudes
• Training and Orientation
Board Meeting Page 18 of 26
May 27,2008
In moving forward, it was also noted that the BWL should better utilize existing data,
improve follow thru on near misses and accident reports, continue to evaluate risk,
communicate information, and document policies and procedures. Following the
overview, the committee noted the huge improvements over the last two years and
applauded staff for their efforts.
Soil Erosion and Sedimentation Control Procedures
George Stojic, Executive Director of Strategic Planning and Development provided a
brief review of the Soil Erosion and Sedimentation Control Procedures. It was noted that
under Part 91 of Public Act 451 of 1994, the BWL is a designated Authorized Public
Agency allowed to issue Soil Erosion and Sedimentation Control permits for earth
disturbance projects. The designations issued by the Michigan Department of
Environmental Quality(MDEQ) are reviewed every five years. As such, the MDEQ
reviewed the BWL's program in June 2007, and their recommendations have since been
incorporated in the program.
On motion by Commissioner Cochran, seconded by Commissioner Graves, the
Committee of the Whole agreed to forward the proposed resolution for the BWL Soil
Erosion & Sedimentation Control Program and In-house Contract General Requirements
to the full board for consideration and approval on May 27, 2008.
Action: Carried unanimously.
Designated Representative and Alternate Designated Representative
George Stojic gave a brief overview of the proposed resolution, which names Nicholas
Burwell and George Bibbings as the Designated Representative and Alternate Designated
Representative for the purpose of reporting to the Environmental Protection Agency. The
revised resolution is a result of personnel changes at the BWL.
On motion by Commissioner Zerkle, seconded by Commissioner Lain, the Committee of
the Whole agreed to forward the proposed resolution for the Designated Representative
and Alternative Designated Representative to Comply with the Clean Air Act to the full
board for consideration and approval on May 27, 2008.
Action: Carried unanimously.
Integrated Resource Plan
George Stojic provided a copy of the 2008 Integrated Resource Plan(IRP) Update and
gave a high level overview of the respective plan, which contained extensive modeling as
the basis for the recommendations. The modeling looked at the organizations energy
needs in determining all of the combinations necessary for analysis. During the course of
the IRP, a total of 37 sensitivities and scenarios were considered, and each one created
several different resource plans to address future generation needs. Some of the
presentation highlights include the following:
Board Meeting Page 19 of 26
May 27,2008
Major Goals of Electric Generation Planning
• Minimize cost of providing electric generation services.
• Maintain electric generating reliability.
• Manage future risk and uncertainty.
Electric Resource Modeling Steps
• Assess adequacy of electric generating resources.
• Compile inventory of new electric generating options.
• Perform resource modeling.
- Develop base case
- Develop scenarios and sensitivities
Loads and Resource Assessment
• The analysis looked at maintaining the existing units versus replacement.
• The BWL has budgeted $1.4 million for an energy efficiency program; half of which
will begin this year and the full program will commence next year.
Base Case Forecasts
• Annual energy and peak demand forecast
- Annual energy forecast 1.4%
- Peak demand forecast 1.6%
• Fuel forecast
- Coal
- Natural gas
• Air emissions allowances forecasts
SO2
NOx
- GHG
• Construction cost escalation
Base Case Modeling Results
• Selects natural gas/market purchase for short-term capacity need in 2016.
• Selects new base load unit to replace Eckert units in 2018.
Model Scenarios
• Base
• High and low energy demand growth
• Energy efficiency programming
• Expanded renewable energy program
• Energy efficiency and expanded renewables
• Joint unit construction
• No greenhouse gas (GHG) regulatory controls
• Exclusive reliance on Midwest wholesale markets
Modeling Sensitivities
• High natural gas costs
Board Meeting Page 20 of 26
May 27,2008
• High construction cost escalation
• Low emission allowances costs
• High emission allowances costs
Modeling Results
• Short-term capacity needs beginning in 2016 in most scenarios and sensitivities.
• New baseload generation is selected to replace the Eckert units in all scenarios and
sensitivities.
• It is not cost-effective to make major investments in Eckert plant.
• GHG regulations represent a major future regulatory cost.
• Exclusive reliance on wholesale markets increases the BWL's costs significantly.
• Energy efficiency programs lower the total cost of meeting future electric energy
needs.
Recommendations
• Implement an energy efficiency and load management programs to eliminate capacity
need in 2016 and meet future electricity growth.
• Begin the process of replacing Eckert with a new baseload generating plant.
- Develop "hybrid" biomass/coal fueled unity.
- Plan for unit about the size of Eckert with Lansing accounting for about 250 Mw.
Following the presentation and further discussion, it was noted that staff would a)meet
with the Lansing State Journal editorial board on May 27th, b) work to permit the new
baseload generating project with the Department of Environmental Quality, and c)
involve the community. The permit process takes approximately 1 - 2 years. It was
confirmed that the Board would be kept abreast of the research, findings and public
support involved in replacing Eckert Station. It was further noted that the Board of
Commissioners do not need to take action at the present time.
Strategic Plan
George Stojic provided an overview of the BWL Strategic Plan 2008, which is an update
to the existing plan developed in 2004. One of the primary changes to the strategic plan
involved the addition of long term planning. Following brief discussion, the committee
members took the following action:
On motion by Commissioner Cochran, seconded by Commissioner James, the
Committee of the Whole adopted the BWL Strategic Plan 2008.
Action: Carried unanimously.
Uniform Board Appointee Evaluation Forms
Commissioner Zerkle, Human Resource Chair noted that the Human Resource
Committee addressed the matter of board appointee evaluation forms due to various past
issues and a need to create a uniform evaluation process.
Board Meeting Page 21 of 26
May 27,2008
On motion by Commissioner James, seconded by Commissioner Lain, the Committee of
the Whole adopted the BWL Planning and Feedback Summary Form, as the formal
evaluation tool for Board appointed employees, as modified in the May 13, 2008
Committee of the Whole meeting packet.
Action: Carried unanimously.
Solar
George Stojic reported that in an effort to meet the 7%renewable portfolio standard by
2016 as previously adopted by the Board of Commissioners, the BWL is considering the
installation of solar panels on top of the Dye Water conditioning reservoir located in
Lansing, Michigan. The location of the solar panels would provide visibility and
electricity most notably during on-peak summer hours.
Joint Commissioner/City Council MeetinLy Agenda
The Committee of the Whole reviewed a tentative agenda for the Joint
Commissioner/City Council meeting scheduled for June 18, 2008 at 8:00 a.m. Following
brief discussion, the committee members agreed to remove the Update on Credit Card
Payments Changes item from the respective agenda.
Other
On motion by Commissioner Lain, seconded by Commissioner DeLuca, the Committee
of the Whole agreed to excuse the absence of Commissioner Peter Kramer.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 7:32 p.m.
Respectfully submitted,
Julee M. Rodocker, Chair
Committee of the Whole
MANAGER'S RECOMMENDATIONS
esolutivn 2008-5-1
A. Electric Residential Senior Citizen Rate No. 21
WHEREAS, the rate schedules of the BWL were subject to a general increase of 7% for
the electric utility effective March 1, 2008, a general increase of 7% for the water utility
effective March 1, 2008, and a general increase of 6% for the steam utility effective
March 1, 2008 for electric, water, and steam consumption on or after March 1, 2008; and
WHEREAS, the general rate increase of 7% is also applied to Rate Schedule No. 21, the
BWL's electric senior citizen rate; and
Board Meeting Page 22 of 26
May 27,2008
WHEREAS, other Michigan utilities provide special senior citizen electric rate schedules
with larger discounts than are offered under the current BWL senior citizen rate; and
WHEREAS,public comments support larger discounts for the BWL's senior citizen rate
schedule; and
WHEREAS, a$2.00 reduction in the monthly service charge under the BWL's Rate
Schedule No. 21 electric senior citizen rate would provide a larger discount for customers
utilizing BWL's senior citizen rate, and will bring the discounts available under the
BWL's senior citizen rate closer to comparable rates provided by other Michigan utilities;
WHEREAS, as notice of the proposed rate change was communicated to all customers by
public notice on April 7, 2008, and a Public Hearing was held on May 22, 2008, to
receive comments on the proposed $2.00 reduction in the monthly service charge under
Electric Senior Citizen Rate Schedule No. 21; and
WHEREAS, the Board of Commissioners has considered the comments of the public as
well as the recommendation made by the BWL;
RESOLVED, that the Electric Residential Senior Citizen Rate No. 21 as detailed in the
attached rate schedule be made effective on or after July 1, 2008.
(Electric Residential Senior Citizen Rate No. 21 —attached)
--------------------
Motion by Commissioner Cochran, seconded by Commissioner Kramer, to approve the
Electric Residential Senior Citizen Rate No. 21 resolution.
Action: Carried unanimously.
esolution 2008-5
B. Rules and Regulations for Electric, Water, Steam, and Chilled Water Utility
Services
RESOLVED, that the amendments to the Rules and Regulations for Electric, Water,
Steam, and Chilled Water Services be approved as presented, to be effective July 1, 2008
(see attachments).
--------------------
Staff Comments: Staff recommends these amendments to the Rules and Regulations for
Electric, Water, Steam, and Chilled Water Utility Services. Staff also recommends that
the Finance Committee approve these amendments and forward them to the full Board
for adoption on May 27, 2008.
--------------------
Board Meeting Page 23 of 26
May 27,2008
Motion by Commissioner Lain, seconded by Commissioner DeLuca, to approve the
Rules and Regulations for Electric, Water, Steam, and Chilled Water Utility Services
resolution.
Action: Carried unanimously.
(See attachments - electric, water, steam, chilled water).
esolution 2008
C. Fiscal Year 2009 Operating and Capital Budgets
RESOLVED, that the annual Operating Budget covering Fiscal Year 2009 is hereby
approved as presented:
RESOLVED: that the Fiscal Year 2009 Capital Budget is hereby approved as presented;
RESOLVED, that the forecast for capital expenditures for the Fiscal Years 2009-2014 is
hereby accepted as presented; and
RESOLVED FURTHER, that the Corporate Secretary be directed to make the
appropriate filings with the City of Lansing City Clerk's office and the Mayor's office in
accordance with the Lansing City Charter regarding the above actions.
--------------------
Staff Comments: Staff recommends an operating and expense maintenance budget of
$240.8 million and a capital budget of$52.5 million for Fiscal Year 2009 to maintain
ongoing services to customers and maintain and enhance facilities for continued future
use. Capital expenditures for the Fiscal Years 2009-2014 are estimated to be $277
million. Staff recommends that the Finance Committee approve these budgets and
proposed resolution for presentation and adopting by the Board at its May 27, 2008
Board Meeting.
--------------------
Motion by Commissioner Zerkle, seconded by Commissioner Kramer, to approve the
Fiscal Year 2009 Operating and Capital Budgets resolution.
Action: Carried unanimously.
esolutivn 2008-54
D. Soil Erosion & Sedimentation Control Program and In-House Contract
General Requirements
WHEREAS, the Lansing Board of Water & Light is a designated Authorized Public
Agency under Part 91 of Public Act 451 of 1994, Natural Resources and Environmental
Protection Act. This designation allows the Lansing Board of Water & Light to issue
Soil Erosion and Sedimentation Control permits for their earth disturbance projects; and,
Board Meeting Page 24 of 26
May 27,2008
WHEREAS, that Authorized Public Agency designations are issued by the Michigan
Department of Environmental Quality and are reviewed every five years. During such
reviews the Michigan Department of Environmental Quality identifies changes that need
to be made in the "Soil Erosion and Sedimentation Control Program and In-House
Contract General Requirements" (Program); and,
WHEREAS, that on June 6 and 7, 2007 the Michigan Department of Environmental
Quality performed an audit on the BWL's Program and identified needed changes to the
Program. The Environmental Services Department has incorporated the requested
changes into the Program.
RESOLVED, that the Lansing Board of Water& Light Board of Commissioners does
hereby support and adopt the "SOIL EROSION AND SEDIMENTATION CONTROL
PROGRAM AND IN-HOUSE CONTRACT GENERAL REQUIREMENTS", prepared
by the Lansing Board of Water & Light Environmental Services Department, and dated
April 11, 2008.
--------------------
Staff Comments: The control of soil erosion and sediment runoff from construction
projects is a vital part of protecting the surface waters of the State of Michigan from
pollution. To address this, the MDEQ has developed the Soil Erosion and Sedimentation
Control (SESC) Program under Part 91 of Public Act 451 of 1994. Part 91 requires a
SESC permit from a county or municipal permitting agency. Part 91 also allows for the
designation of an Authorized Public Agency(APA) to allow agencies such as the BWL
to permit their own projects without the complications and potential additional costs and
delays of using other City, County or Township agencies to evaluate and formally
approve our permits. The BWL has been an APA following our own SESC program
since 1976. In June of 2007, the MDEQ performed a regular audit of the BWL SESC
Program and based on that audit, recommended changes in the program to more
effectively control soil and sediment from BWL projects.
The MDEQ's recommended changes have been incorporated into the program and
MDEQ has given preliminary approval to the program changes. They will issue a final
approval when we supply them with a resolution from the Board of Commissioners
stating that the Program has been adopted.
--------------------
Motion by Commissioner DeLuca, seconded by Commissioner Cochran, to approve the
Soil Erosion and Sedimentation Control Program and In-House Contract General
Requirements resolution.
Action: Carried unanimously.
esolution 2008-5-
E. Designated Representative and Alternative Designated Representative to
Board Meeting Page 25 of 26
May 27,2008
Comply with Clean Air Act
RESOLVED, that Nicholas Burwell and George Bibbings are respectively named the
BWL's designated representative and alternate designated representative for the purpose
of reporting to the Environmental Protection Agency(EPA) under the Clean Air Act; and
RESOLVED FURTHER, that the designated representative and the alternate designated
representative are authorized to bind the BWL by their respective actions, inactions, and
submissions with respect to the Clean Air Act.
----------------
Sta ff Comments: Due to changes in personnel, this revised resolution is necessary.
----------------
Motion by Commissioner Cochran, seconded by Commissioner Zerkle, to approve the
Designated Representative and Alternative Designated Representative to Comply with
the Clean Air Act resolution.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
GENERAL MANAGER'S REMARKS
J. Peter Lark, General Manager reported that the Employee Diversity Survey would be
presented during the Safety meetings held in June 2008. The survey will be followed up
with focus interviews with approximately 70 employees in hopes of learning more about
the BWL and its policies. In addition, staff also participated in a Lansing State Journal
editorial board interview with respect to a new power plant. The interview went well and
staff is hoping for a positive editorial in an upcoming edition of the Lansing State
Journal.
In response to Commissioner Zerkle's request, Mr. Lark gave a brief update regarding
First STEP (School to Training and Employment Program). As such, the program is
scheduled to offer approximately 20 qualified high school seniors an internship at the
BWL. Following the internship, approximately 10 students will receive an offer of
employment and the remaining students will receive a one-year scholarship to Lansing
Board Meeting Page 26 of 26
May 27,2008
Community College. Those who become employees of the BWL can continue their
education with the assistance of the BWL's tuition reimbursement program. The
program directed at Lansing area high schools will also be open to other area high
schools.
COMMISSIONERS' REMARKS
Commissioners James and Zerkle commended Mr. Lark and staff for their efforts in
developing and implementing First STEP. Commissioner James also applauded staff s
efforts for the work done on the senior citizen rate reduction and the fiscal year 2009
budget.
Commissioner Cochran echoed the Commissioners sentiments regarding First STEP and
also thanked the bargaining unit for their cooperation in this endeavor.
EXCUSED ABSENCES
On motion by Commissioner Lain, seconded by Commissioner Cochran, to excuse the
absence of Commissioners Joseph Graves and Julee Rodocker.
Action: Carried unanimously.
PUBLIC COMMENTS
No public comments.
ADJOURNMENT
On motion by Commissioner Zerkle, seconded by Commissioner Cochran, the meeting
adjourned at 5:55 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
June 6, 2008
WATER Lansing Board of
Water and Light
Rules and Regulations
For
Electric Service
Approved: 05/27/08
Effective: 07/01/08
WATER Lansing Board of Table of Contents
Water and Light
TABLE OF CONTENTS
PAGE
NUMBER
Definitions....................................................................................................................................................................4
GeneralProvisions.......................................................................................................................................................6
ServiceConditions.......................................................................................................................................................7
Characterof Service..................................................................................................................................................7
Descriptionof Service............................................................................................... ...............................................7
AvailableVoltage..................................................................................................................................................7
DualVoltage Transformers...................................................................................................................................8
Agreements............................................................................................................................................................8
MaterialAvailability..............................................................................................................................................8
Useof Service...............................................................................................................................................................9
General......................................................................................................................................................................9
Accessand Damages.................................................................................................................................................9
CustomerEquipment.................................................................................................................................................9
PowerQuality............................................................................................................................................................9
PowerFactor............................................................................................................................................................10
Tampering................................................................................................................................................................10
Discontinuationof Service......................................................................................................................................10
Metering.....................................................................................................................................................................11
General....................................................................................................................................................................11
Installation/Ownership.............................................................................................................................................11
EquipmentLocation................................................................................................................................................I I
MultipleOccupancy Buildings................................................................................................................................12
MeterCalibration Request.......................................................................................................................................12
Rate5 and 8 Meter Installations..............................................................................................................................12
Applicationof Rates..................................................................................................................................................13
General....................................................................................................................................................................13
Resale......................................................................................................................................................................13
Choiceof Rates........................................................................................................................................................14
ReactivePower........................................................................................................................................................14
Space Conditioning-Electric Water Heating Service.............................................................................................14
Mobile Homes in Courts-Individually Served.......................................................................................................15
Apartment Buildings and Multiple Dwelling Structures.........................................................................................15
Cogeneration and Small Power Production Facility................................................................................................15
BillingDemand........................................................................................................................................................16
MinimumCharges...................................................................................................................................................16
Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................16
Responsibilityfor Payment of Bills..........................................................................................................................17
General....................................................................................................................................................................17
EstimatedConsumption...........................................................................................................................................17
BillingErrors...........................................................................................................................................................17
AccountSecurity Deposits......................................................................................................................................18
Disputeand Hearing Procedure...............................................................................................................................20
Disputes...................................................................................................................................................................20
Hearings...................................................................................................................................................................20
Saleand Lease of Service Facilities..........................................................................................................................22
General....................................................................................................................................................................22
DistributionSystem Extensions................................................................................................................................23
General....................................................................................................................................................................23
Request for Distribution System Extension.........................................................................................................23
Ownership............................................................................................................................................................23
Approved:05/27/08
Effective: 07/01/08 Page 2 of 42
WATE-'R3-''- Lansing Board of Table of Contents
qPWater and Light
Nonrefundable Contribution for Underground Extensions..................................................................................23
Deposit.................................................................................................................................................................23
Refunds................................................................................................................................................................24
EconomicDevelopment Offsets..........................................................................................................................25
Easements and Tree Trimming/Removal Permits...............................................................................................25
Non-Standard Equipment....................................................................................................................................25
Non-Standard Construction.................................................................................................................................25
OtherFacilities....................................................................................................................................................25
CustomerProvided Facilities...............................................................................................................................26
MobileHome Courts...........................................................................................................................................26
StreetLighting.....................................................................................................................................................26
OutdoorProtective Lighting................................................................................................................................27
Subdivisions.........................................................................................................................................................27
AvailableVoltage................................................................................................................................................27
Construction Date of Distribution Extension.......................................................................................................28
Trenchingand Duct.................................................................................................................................................28
Conversion of Existing Overhead Distribution Systems and Associated Services..................................................29
Electric Facility Relocations and Removals............................................................................................................29
Distribution System Extensions for Second Source................................................................................................30
Services.......................................................................................................................................................................31
General....................................................................... ...31
..........................................................................................
TemporaryServices.................................................................................................................................................31
Residential,Commercial and Industrial Overhead Services....................................................................................32
Residential,Underground Services from Underground Distribution Systems........................................................32
Residential.Underground Services from Overhead Distribution Systems...............................................................33
Commercial and Industrial Underground Services..................................................................................................33
Multi-Dwelling Structure Services..........................................................................................................................35
Conversion of Existing Overhead Electric Service...................................................................................................35
Electric Service Relocations and Removals............................................................................................................35
SecondService........................................................................................................................................................35
Motors.........................................................................................................................................................................36
Useof Board Equipment...........................................................................................................................................37
General....................................................................................................................................................................37
AuthorizedAttachments..........................................................................................................................................37
UnauthorizedUse and Removal..............................................................................................................................37
Interconnection for Distribution Generators..........................................................................................................38
General....................................................................................................................................................................38
Approvals................................................................................................................................................................38
Controland Protection.............................................................................................................................................38
Operation.................................................................................................................................................................38
Termination.............................................................................................................................................................39
Contract...................................................................................................................................................................39
Scheduleof Fees&Charges......................................................................................................................................40
Approved:05/27/08
Effective: 07/01/08 Page 3 of 42
WATE-Ram Lansing Board of Definitions
10Water and Light Electric Rule and Regulation 1
DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS
AMPERE— Unit of electrical current.
ANNUAL REVENUE—Income received from a Customer or a group of Customers for a twelve(12)month period,
less sales tax.
BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board of Water and
Light.
BORING— To pierce the ground with a turning or twisting movement of a tool to make a hole for pipes,
cables etc.
CUSTOMER— A purchaser of electrical service supplied by the Board.
DEMAND— The load at the terminals of an installation or system,averaged over a specified interval of time. Demand is
expressed in kilowatts,kilovoltamperes(kVA)or other suitable units.
DISTRIBUTION LINE—That portion of the Board's system which delivers Electric Power from transformation points on
the transmission or bulk power system to the Customer.
DUAL WOUND TRANSFORMER—A transformer whose primary windings are so designed and interconnected so that the
transformer has the full rating capability to operate on either of two different Primary Voltages.
DWELLING UNIT—A Dwelling Unit shall be considered as a single room, suite or groups of rooms or suites which have
individual cooking and kitchen sink facilities designed for or used exclusively for residential purposes.
ELECTRIC POWER — A term used in the electric power industry to mean inclusively power and Energy, expressed in
kilowatts and kilowatt-hours.
ENERGY— That which does or is capable of doing work. It is measured in terms of the work it is capable of doing;
electric energy is usually measured in kilowatthours.
FACILITIES— A general term which includes devices,associated structures and the like,used as a part of or in connection
with an electric installation.
HERTZ—(Hz)— Cycle per second.
HIGH-RISE HOUSING STRUCTURE — A building in excess of three stories in height comprised primarily of several
individually metered residential Rate Customers.
HORSEPOWER(hp)—Unit of mechanical power equivalent to 746 watts of electrical power.
KILO(k)— Prefix meaning one thousand.
KILOVOLTAMPERE(kVA)—Unit of apparent electrical power which at 100%Power Factor is equivalent to one kilowatt.
KILOWATT(kW)—Unit of electrical power representing rate of usage of Energy,equivalent to about 11/3 Horsepower.
KILOWATT-HOUR(kWh)—Unit of electrical Energy equivalent to the use of one kilowatt for one hour.
LOAD— The amount of power or kilovoltamperes delivered at a given point.
MAIN LINE TRENCH—A Trench in which Primary Voltage Distribution Lines are installed.
Approved: 05/27/08
Effective: 07/01/08 Page 4 of 42
WATE�IGHT Lansing Board of Definitions
go Water and Light Electric Rule and Regulation 1
MOBILE HOME COURT—A mobile home court is defined as a parcel or tract of land upon which three(3)or more mobile
homes are located and occupied on a continuous non-recreational basis. The mobile home court shall be of
a permanent nature with improved streets and with individual water and sewer connection to each lot.
MULTI-DWELLING STRUCTURE —A building containing 5 or more Dwelling Units, including but not limited to
apartments,condominiums or senior housing projects.
PERSON— Any individual, corporation, partnership, company, limited liability corporation, organization or
governmental entity.
POWER FACTOR(P.F.)—Ratio of kilowatt power to kilovoltampere apparent power,expressed in%.
PREMISES— A building and its grounds.
PRIMARY VOLTAGE—Nominal voltage of 601 Volts to 15,000 Volts.
RATE— The unit prices as established by the Board's rate-making body and the quantities to which they apply as
specified in the Rate Schedule.
RATE SCHEDULE — A filed statement of the electric Rate and the terms and conditions governing its application as
established by the Board's rate-making body.
RESIDENCE (also residential) —Shall include one family, two family and Multi-Dwelling Structures containing three or
more individual Dwelling Units,but not including High-Rise Housing Structures.
RISER POLE— Pole where the transition takes place between underground and overhead Facilities. May be primary or
secondary.
SECOND SERVICE—Additional service of substantially the same characteristics usually supplied from the same source.
SECOND SOURCE — Additional source of substantially the same characteristics supplied from a separate electric
Distribution Line.
SECONDARY VOLTAGE—Nominal voltage of 600 Volts or less.
SERVICE ENTRANCE CONDUCTORS — The Customer-owned conductors between the Customer's main disconnecting
device and the termination of the Board's service conductors.
SERVICE LIMITER- Device used to minimize electric consumption by way of restricting amperage.
SERVICE LOCATION—The point at which the Board has agreed to provide electric service.
TRANSMISSION SYSTEM—That portion of the Board's system which delivers Electric Power with a nominal voltage of
138,000 Volts.
TRENCH— A cut in the ground in which cables,pipes,etc.are installed.
VOLT— Unit of electrical force.
Approved: 05/27/08
Effective: 07/01/08 Page 5 of 42
WATER& "c r Lansing Board of General Provisions
Water and Light Electric Rule and Regulation 2
General Provisions
Copies of the Board's Rate Schedules for electric service are open to public inspection at the
Board's offices and are available on the Board's Internet Web site www.tbwl.com or upon
request. Application for original, modified or added service shall be made at the office of the
Board of Water and Light, Utility Services,730 East Hazel Street, Lansing.
Any .Person receiving or agreeing to receive electric service from Board Facilities shall be
deemed a Customer of the Board subject to its Rates and these Rules and Regulations and
responsible for the service used whether such service is provided under a signed agreement or
not.
Electric service will not be supplied to new or remodeled buildings until such installations have
been inspected and approved by the appropriate inspection authority and are in accordance with
these Rules and Regulations.
Before purchasing equipment or installing wiring, the Customer should contact the System
Integrity & Customer Projects Department of the Board to determine the characteristics of the
electric service available at the Premises, since all voltages may not be available. The System
Integrity&Customer Projects Department will inform the Customer of the Board's requirements,
which must be fulfilled by the Customer, in order to receive electric service.
The Board may discontinue electric service to any Customer for any breach of the Board's Policy,
Rules and Regulations, Procedures or in accordance with law. The Customer must pay a
reconnection fee as stated in Rule 15 to cover the costs of restoring electric service that has been
discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in
accordance with law.
The Board will release customer information in accordance with written customer authorization
and Board policy.
This document is intended to cover most situations where standardized policies and practices
have been established. No officer, agent or employee of the Board has authority to waive or
modify the provisions of this document unless specifically authorized to do so by the Board of
Commissioners. The Board of Commissioners may revise this document at any time and may
modify or suspend any portion of it temporarily or permanently.
Approved:05/27/08
Effective: 07/01/08 Page 6 of 42
warE"Ra® Lansing Board of Service Conditions
IN Water and Light Electric Rule and Regulation 3
Service Conditions
1. Character of Service
The Board supplies 60 Hertz alternating current throughout its service area and will endeavor, but
does not guarantee, to furnish a continuous supply of electric Energy and to maintain voltage and
frequency within reasonable limits.
The Board shall not be liable for interruptions in the service including without limitation, phase
failure or reversal, or variations in the service characteristics, including but not limited to
variations in frequency and voltage or for any loss or damage of any kind or character occasioned
thereby, due to causes or conditions beyond the Board's reasonable control, and such causes or
conditions shall be deemed to specifically include, but not be limited to, the following: acts or
omissions of Customers or third parties; operation of safety devices except when such operation
is caused by the negligence of the Board; absence of an alternate supply of service; failure,
malfunction, breakage, necessary repairs or inspection of machinery, Facilities or equipment
when the Board has carried on a program of maintenance consistent with the general standards
prevailing in the industry; act of God; war; action of the elements; storm or flood; fire; riot;
sabotage; labor dispute or disturbance, or the exercise of authority or regulation by governmental
or military authorities.
Notwithstanding any other provision of these rules, the Board may interrupt, curtail or suspend
electric service to all or some of its Customers in accordance with the provisions of the Board's
Emergency Electrical Curtailment procedures or as necessary to protect the health, safety and
welfare of its employees or Customers. The Board shall be under no liability with respect to any
such interruption,curtailment or suspension.
2. Description of Service
A. Available Voltage
(1) Single phase 120/240 Volt, three wire service is available for lighting and
miscellaneous requirements. At the Board's option single phase 120/208V, three wire
service may be made available.
(2) Combined lighting and power service at 120/208 Volt, three phase, four wire; 120/240
Volt, three phase, four wire; or 277/480 Volt, three phase, four wire may be made
available at the Board's option.
(3) Three phase power service at 240 Volts, three wire, or 480 Volts, three wire, may be
made available for Customers desiring a separate power service. The Board is not
required to provide more than one lighting and one power service or one combined
lighting and power service to a Customer's Premises. In cases where the Board
permits a separate power source, the Customer shall pay the cost of providing this
additional requirement.
(4) If a Customer requires a three phase voltage different from the established voltage in
the area, it may be furnished at the Board's option. In such cases, the Customer shall
pay all extra costs involved. In the case where there is more than one established
voltage in the area, the Board shall determine which voltage will be furnished and any
applicable costs as determined by.Rule 10,Rule 11 and Rule 15.
Approved: 05/27/08
Effective: 07/01/08 Page 7 of 42
WATE-1G�HT Lansing Board of Service Conditions
Water and Light Electric Rule and Regulation 3
(5) Primary Voltage service is also available for Customers whose Demand is 100 kW or
more. The Board shall determine the particular Primary Voltage available. All
equipment necessary for the protection of the customer's equipment, the control of the
electricity and utilization of service by the Customer shall be Board approved and shall
be located on the Customer's side of the point of delivery and shall be furnished,
installed and maintained by the Customer. Point of delivery shall be at the Board's
electrical service connection to Customer owned equipment. For Customer owned
transformer installations larger than those listed below, the Board may require the
Customer to furnish, install and maintain special primary protective equipment.
.Primary Voltage (Phase to Phase) Combined Transformer—3 phase kVA
4,160 V 500 kVA
8,320 V * 1,000 kVA
13,200 V 2,000 kVA
* This voltage is only available for existing Customers
currently receiving this voltage.
(6) Service shall be provided at voltages specified in this Rule 3. Customer will be
responsible for making any voltage modifications beyond the Service Location for
equipment requiring a voltage different from this Rule 3.
B. Dual Voltage Transformers
All Customer owned transformers installed in an area that is not currently served by 13,200
V distribution voltage will be required to be dual wound. In such cases, the Board may
share in qualified additional costs of such Dual Wound Transformers.
C. Agreements
The Board may require the Customer to enter into a written agreement that details the terms
and conditions and price to be paid by the Customer prior to electric service construction.
In addition,the Board may negotiate written contractual arrangements as to the provision of
necessary service Facilities, duration of service, amount of deposit and refunds thereon,
minimum bills or other service conditions for Customers or prospective Customers whose
Load requirements exceed the capacity of the available distribution system in the area or
whose Load characteristics or special service needs require unusual investments by the
Board in service Facilities or where there is not adequate assurance of the permanent use
of the service.
The Board may charge a Connect Fee when the Customer request the service to be made
active outside normal business hours as specified in Rule 15.
No promises, agreements or representations of any agent or employee of the Board shall be
of binding force upon the Board unless the same is within the authority of that individual
and incorporated in the written agreement.
D. Material Availability
Subject to the restrictions contained in Rule 3.2.A, the Board will construct electric
distribution Facilities and extensions only in the event it is able to obtain or use the
necessary materials, equipment and supplies. The Board may, in its discretion, allocate the
use of such materials, equipment and supplies among the various classes of Customers and
prospective Customers of the same class.
Approved:05/27/08
Effective: 07/01/08 Page 8 of 42
WATER R-T Lansing Board of Use of Service
IM Water and Light Electric Rule and Regulation 4
Use of Service
1. General
Electricity is supplied to a Customer for exclusive use on the Premises to which it is delivered by
the Board. Service may not be shared with another, sold to another, or transmitted off the Premises
without the written permission of the Board, except as noted in Rule 6.
2. Access and Damages
The Customer shall provide and maintain appropriate access and working space around electric
Facilities in accordance with all applicable electrical codes and Board standards so as to permit
ready and safe operation and maintenance of such Facilities.
The Board's authorized personnel or agents of the Board shall have access to the Customer's
Premises at all reasonable hours for all purposes necessary to conduct business, including without
limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) to install, operate
and maintain other Board equipment or Facilities, and 3) to inspect and determine the connected
electrical Load. If a meter, metering equipment or other Board property is damaged or destroyed
through the neglect of the Customer, the cost of necessary repairs or replacements shall be the
responsibility of the Customer.
If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make
inspection including, but not limited to, reasons such as Premises being locked, meter being
inaccessible or unsafe conditions, then after due written notice to the Customer, the electric service
may be disconnected until such time as arrangements have been made to permit access for Board
inspection and approval, and the Customer has paid the appropriate reconnection fee as stated in
Rule 15.
3. Customer Equipment
The Board may deny or terminate service to any Customer whose wiring or equipment constitutes a
hazard to the Board's employees, equipment or its service to others. However, the Board is not
responsible to inspect the Customer's wiring or equipment and shall not be held liable for any
injury or damage resulting from the condition thereof.
The Customer shall install and maintain the necessary devices to protect Customer owned
equipment against service interruptions, phase loss, variations in voltage and other disturbances on
the Board's system, as well as the necessary devices to protect the Board's Facilities against
overload caused by the Customer's equipment.
4. Power Quality
The Customer shall use the service as not to cause interference, affect voltage,affect frequency, add
harmonics, or otherwise cause other disturbances to the Board's system or another Customer's
service. If the Board notifies the Customer of such a condition, the Customer shall discontinue
operation of equipment causing such condition until a correction has been made.
The Customer will be charged for all costs associated with alterations to the Board's system
required to continue proper operation of the Board's system in conjunction with the Customer's
equipment.
Approved: 05/27/08
Effective: 07/01/08 Page 9 of 42
WATe' R'ate Lansing Board of Use of Service
Water and Light Electric Rule and Regulation 4
In determining the existence of disturbances, the Board will rely on the latest revision of Standard
519, IEEE Recommended Practices and Requirements for Harmonic Control in Electric Power
Systems. The Board may also use other appropriate standards or criteria in determining
disturbances to the Board's system.
5. Power Factor
The Board is not obligated to furnish service to loads with a Power Factor of less than eighty-five
percent (85%) whether newly installed, reconnected or moved to another location. The Customer
will be required to provide,at no expense to the Board, suitable equipment for improving the Power
Factor to at least eighty-five percent(85%).
6. Tampering
The Board may discontinue service and seek criminal charges, if it is determined that the meter or
wiring on the Customer's Premises has been tampered with or altered in any manner to steal
electricity. If the Board discontinues service for this reason, the Board shall restore service only
after the Customer has paid the reconnection fee as stated in Rule 15, made appropriate restitution
for stolen service and made provisions for an outdoor meter installation or other metering changes
as may be required by the Board.
7. Discontinuation of Service
A. Service may be voluntarily or involuntarily disconnected.
(1)Voluntarily
Service may be voluntarily disconnected per the Customer's request. The BWL
recommends that the Customer or the Customer's representative be present for the
disconnection to ensure complete shutoff. It can be difficult for the BWL to confirm that
the service have been completely turned off if there is no one present at the premises
during the shutoff. The Customer is responsible to advise the BWL if the shutoff was not
entirely effective.
(2) Involuntary
Service may be involuntarily disconnected in the following instances:
(a) Noncompliance with applicable Rules and Regulations;
(b) Noncompliance with Municipal, State and or Federal law; or
(c) Issuance of a Court Order.
Approved:05/27/08
Effective: 07/01/08 Page 10 of 42
WATE� Lansing Board of Metering
smWater and Light Electric Rule and Regulation 5
Metering
1. General
All Energy sold to Customers shall be measured by commercially acceptable measuring devices
owned and maintained by the Board except where it is impractical to meter, such as street lighting,
temporary or special installation, in which cases the consumption may be calculated.
2. Installation/Ownership
The Customer shall be responsible to install that metering equipment furnished by the Board and shall
furnish, install, own and maintain all other service equipment, and all wiring and conduits, from the
weatherhead of an overhead service connection and from the point of service of an underground
service connection.
3. Equipment Location
A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the
Board for the installation of the necessary metering equipment. The Customer shall also
furnish the space and the provisions for mounting current and potential transformers to meet
Board requirements. Where the Customer desires to utilize a Board standard current and
potential transformer enclosure, the Customer shall make a payment as specified in R zle 15.
Inquiries regarding installation requirements and equipment approval should be directed to
the System Integrity&Customer Projects Department.
B. The Board requires that the metering equipment for all residential and, where practicable,
commercial and small industrial Customers be located outdoors on the Customer's building
or structure. The meter shall be located within service pedestal line of sight and at the nearest
point of attachment as practicable. The meter shall be located on the same half of the
dwelling as the service pedestal and the service shall not pass under a driveway. Meters in
existing indoor installations that are to be rearranged so as to affect the Service Entrance
Conductors or service equipment shall be changed to outdoor installations where suitable
locations are available.
C. The Board must approve the mounting of metering equipment indoors in those cases where
there is no suitable outdoor location. Indoor locations must be as near as practicable to the
point where the Service Entrance Conductors enter the building. Interior walls, panels or
meter boards on which meters are mounted shall be rigid and free from vibration and shall be
located in a clean and dry part of the building.
D. Meter sockets, meter connection boxes and instrument transformer enclosures shall not be
used as junction boxes for supplying Customer's branch circuits or grounding conductor
termination, and no wiring other than service entrance and bonding conductors shall be run
through this equipment. Metered conductors from different meters shall not be placed in the
same raceway between the meter and the main disconnect device.
E. The height of single line meter settings shall not be less than four and one-half(4%) feet nor
more than five and one-half(5'/z) feet above finished grade or floor level.
F. When using stacked multiple meter socket panels, the lowest meter shall not be less than
twenty-four (24) inches from the floor for indoor locations. For outdoor locations, the
installed meter centerlines shall be a minimum of thirty (30) inches from finished grade, and
a maximum of seventy-two (72) inches from finished grade, and shall be limited to a
maximum four(4)meter stack.
Approved: 05/27/08
Effective: 07/01/08 Page 11 of 42
WATe®HT Lansing Board of Metering
sm Water and Light Electric Rule and Regulation 5
4. Multiple Occupancy Buildings
The metering and Customer's service equipment for multiple occupancy buildings where several
floors, apartments, stores, etc. are rented separately should be grouped in a common meter room,
public hallway or some other Board-approved location where they will be accessible at all times to
Board authorized personnel or agents of the Board. Metering equipment in multiple occupancy
buildings shall be plainly marked with metal tags or neat lettering and/or numerals identifying the
portion of the building served. Such identification shall be the responsibility of the building owner.
5. Meter Calibration Request
A Customer may request the Board to test the meter calibration. The Board will perform such test to
determine if the meter accuracy is within plus or minus 2%. If the test demonstrates the meter
accuracy is within the allowed limits, the Customer may be charged an amount as stated in Rule 15.
If the test demonstrates that the meter accuracy is outside of the phis or minus 2%, the Board shall
replace the meter.
6. Rate 5 and S Meter Installations
After July 1, 2002 all Customers selecting Rate Schedule 5 or Rate Schedule 8 shall install a phone
line with active service to the meter enclosure in accordance with Board standards. The Customer
shall be responsible for installation, maintenance and ongoing costs of the phone line. The Customer
shall notify the Board of any phone number changes. The Board may impose a Meter Non-
compliance Charge as specified in Rule 15 for each month the Customer has not complied with the
requirements of this Rule 5.6.
Approved:05/27/08
Effective: 07/01/08 Page 12 of 42
WATE-- Lansing Board of Application of Rates
smWater and Light Electric Rule and Regulation 6
Application of Rates
1. General
Residential Rates are predicated upon the Board not being required to provide more than one
lighting service to a residential building or structure. All other Rates are predicated upon the Board
not being required to deliver more than one lighting and one power service or one combined
lighting and power service for the total requirements of each separate building or structure of the
Customer, unless otherwise provided for in these Rules and Regulations. The Board shall
separately meter and separately bill service at different points or at different buildings or structures
unless specifically provided for in the applicable Rate Schedule.
2. Resale
The owner or operator of an office building, apartment building, shopping mall, or similar structure
may purchase Energy from the Board for resale to occupants on the condition that service to each
occupant shall be metered separately and that the occupants may not be charged more for such
service than the appropriate Rate of the Board available for similar service under like conditions. In
order to qualify for resale to tenants,the owner or operator must state in writing their intent to resell
in the application for service. The owner or operator shall be responsible for payment of purchased
Energy for resale as required by Rule 7.
The Board shall have no obligation to furnish, test or maintain meters or other Facilities for the
resale of service by the reselling owner or operator to the occupant.
Billing records of the owner or operator may be audited once every 12 to 18 months using generally
accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an
independent auditing firm approved by the Board. The reselling owner or operator shall be assessed
a reasonable fee for an audit conducted by the Board.
The owner or operator providing the resale shall be responsible for testing each occupant's meter at
least once every 3 years. The accuracy of such meters shall be maintained within 2% for non
Demand meters and within 1% for Demand meters. Meters shall be tested only by outside testing
services or laboratories approved by the Board.
A record of each meter, including testing results, shall be kept by the reselling owner or operator
during the use of the meter and for an additional period of one year thereafter. When requested,the
reselling owner operator shall submit certified copies of the meter test results and meter records to
the Board.
The reselling owner or operator shall render a bill once during each billing month to each of the
occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered
by the reselling owner or operator shall specify the following information; The Rate Schedule title,
the due date, the beginning and ending meter reading of the billing period and the dates thereof, the
difference between the meter readings; the amount due for distribution services and/or Energy use,
as applicable to the Rate; subtotal before taxes, the amount of sales tax, other taxes where
applicable; the amount due for other authorized charges; and the total amount due. The due date
shall be 21 days from the date of rendition. The reselling owner operator shall be responsible for all
collections and payment disputes for resale occupants.
Approved: 05/27/08
Effective: 07/01/08 Page 13 of42
WATE�R&LIG�HT Lansing Board of Application of Rates
Water and Light Electric Rule and Regulation 6
The reselling owner or operator shall supply each occupant with an electric system adequate to
meet the needs of the occupant with respect to the nature of service, voltage level and other
conditions of service.
If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the
appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is
not resolved,the Board may declare the reselling owner or operator in violation of Rule 2.
The renting of Premises with the cost of electric service included in the rental as an incident of
tenancy will not be considered a resale of such service.
3. Choice of Rates
In some cases, the Customer may be eligible to take service under any one of two or more Rates.
Upon request, the Board will advise the Customer in the selection of the Rate that will provide the
lowest cost of service, based on the best available information, but the responsibility for the
selection of the Rate shall be the sole responsibility of the Customer.
After the Customer has selected a Rate, the Customer may not change from that Rate to another
Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rile by
temporarily terminating service. The Board may, waive the provisions of this paragraph where it
appears that a change of the Rate is necessary for permanent rather than temporary or seasonal
advantage. The intent of this rule is to prevent frequent changes from Rate to Rate.
The Board shall not be responsible to refund the difference in charges under different Rates
applicable to the same class of service, unless the Board provided an incorrect initial service turn-
on Rate setting or unless the Customer makes a written request and has a permanent change in Load
profile. Any refund is subject to Board approval.
4. Reactive Power
General Service Rates that include a capacity charge (Demand Rate) may be subject to an
adjustment for a reactive power charge based on registered reactive kilovolt Ampere hours
(kVARh) during the billing period. All Primary Voltage installations will include kVARh metering
to determine the reactive power charge.
The Board may require all or any Secondary Voltage Demand Rate Customers whose maximum
Demand is 100 kW or more for six (6) months out of any one twelve (12) month period to install a
kVARh meter for reactive power adjustment. Secondary Voltage Demand Rate Customers whose
Demand is less than 100 kW may be tested with portable kVARh metering equipment to determine
if permanently installed kVARh metering is justified. The Board may determine the average Power
Factor by test and apply a reactive power charge. Customers who install Power Factor correction
equipment may request that kVARh metering be installed.
5. Space Conditioning-Electric Water Heating Service
15
Space Conditioning-Electric Water Heating Service Rate No. 12 is available to commercial and
industrial Customers for space conditioning and water heating service as specified in the
availability clause in the Rate Schedule. Other uses of electricity at the Premises will be billed
using an appropriate secondary General Service Rate.
Approved:05/27/08
Effective: 07/01/08 Page 14 of 42
WATE"`LIHr Lansing Board of Application of Rates
Water and Light Electric Rule and Regulation 6
6. Mobile Homes in Courts—Individually Served
Service to new Mobile Home Courts and expanded service to existing Mobile Home Courts shall be
provided through individual tenant metering.
Ordinarily, electric service to a mobile home shall be in the name of the occupant; however, service
to lots designated for occasional or short-term occupancy shall be in the name of the owner of the
Mobile Home Court or an authorized representative. For rules covering installation of electric
distribution and services for mobile homes in courts,see Rule 10.I.K.
An individually served mobile home used as a Residence will qualify for an appropriate residential
electric service Rate.
7. Apartment Buildings and Multiple Dwelling Structures
1. An apartment building or multiple dwelling structure containing four (4) or less Dwelling
Units may elect to be billed on the appropriate Residential Service Rate.
2. Apartment buildings or multiple dwelling structures containing five (5) or more Dwelling
Units shall have each Dwelling Unit separately metered.
3. Apartment buildings or multiple dwelling structures constructed after March 1, 1979 shall
have each Dwelling Unit separately metered.
8. Cogeneration and Small Power Production Facility
Customers who utilize cogeneration or small power production equipment as an Energly source may
receive partial or standby service under the following applicable Board Rate Schedules:
Residential Electric Service—Rate 1
General Service—Rate 3
Large General Service—Rate 4
Primary Service—Rate 5
Large Capacity Electric Service Rate—8
A Customer requesting electric service under this Rule shall enter into a special contract with the
Board setting forth terms and conditions of service.
Customers who elect to sell Energy to the Board will be paid for such Energy at the Rate specified
in the applicable Rate Schedule as set forth above. When not so specified in the applicable Rate
Schedule,the Board will pay for such Energy at a Rate which approximates its avoided costs.
Approved: 05/27/08
Effective: 07/01/08 Page 15 of 42
WATEER&LI Hr Lansing Board of Application of Rates
1-1 Wm Water and Light Electric Rule and Regulation 6
WO
9. Billing Demand
If a Customer's electric Load drops below the minimum Demand requirement of Rate No. 4, 5, or 8
the Board reserves the right to change the billing Rate of this service to another appropriate General
Service Rate.
10. Minimum Charges
A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the
Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate
the service by any appropriate means, including without limitation, removing the meter and/or by
disconnecting the service from the Board's distribution system.
11. Property Owner-Rental Agent Agreement for"Leave On" Service:
The BWL may waive application charges to maintain continuity of service at rental property
locations provided: (1) the landlord agrees in writing to assume the responsibility for electric
service during the interim between tenants, and(2) the landlord is in compliance with all other rules
and regulations of the Board.
Approved:05/27/08
Effective: 07/01/08 Page 16 of 42
w�rE' T Lansing Board of Responsibility for Payment of Bills
Water and Light Electric Rule and Regulation 7
Responsibility for Payment of Bills
1. General
Each Board Customer is responsible to pay all utility bills as rendered on or before the due date
shown thereon. The Customer remains responsible for payment of the bills until the Customer
orders service to be discontinued and the Board has had reasonable time to secure a final meter
reading. Bills are rendered on approximately a monthly basis. Bills are mailed to Customers
approximately fifteen(15) days before the due date shown on the bill. The Customer shall pay the
net amount if paid on or before the due date on the bill. Failure on the part of the Customer,
through no fault of the Board, to receive the bill shall not entitle the Customer to pay the net
amount after the due date of the bill. If a bill remains unpaid after issuing a five (5) day written
shut-off notice, the Board shall have the right to discontinue service.
In extenuating circumstances, a Customer will be afforded the opportunity to make payment
arrangements. Service shall not be discontinued for non-payment to residential, single unit
services from December 1 to March 31. Instead, at the Boards option, a Service Limiter may be
utilized for the purpose of minimizing consumption, thereby providing limited service for heat
while mitigating a debt.
Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer
has requested a hearing, pending results of the hearing. Service may be discontinued for
nonpayment of bills that are not in dispute.
The Board may also require individual Customers to enter into a written `Billing Service
Agreement,"insuring that the Customer is responsible for all services used and rendered.
The Board will charge a "Non Sufficient Funds Fee" in accordance with Rule 15 for returned
checks.
2. Estimated Consumption
Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills
rendered on estimated consumption have the same force and effect as bills rendered on actual
meter readings.
3. Billing Errors
A. When an error is found to exist in the billing rendered to a Customer, the Board will
correct such error to recover or refund the difference between the original billing and the
corrected billing. Corrected billings will not be rendered for periods in excess of three (3)
years from the date the error is discovered. Refunds to Customers will normally be made
promptly upon discovery of the error. Amounts due the Board from the Customer will be
subject to normal collection policy and procedures.
B. When an error is found to exist in the billing of a contract or service agreement with or
governing the Customer, the Board will correct such error to recover or refimd the
difference between original billing and the corrected billing. Corrected billings will not
be rendered for periods in excess of three (3) years from the date the error is discovered.
Refunds to Customers will normally be made promptly upon discovery of the error.
Amounts due the Board from the Customer will be subject to normal collection policy and
procedures.
Approved: 05/27/08
Effective: 07/01/08 Page 17 of 42
WArE�HT Lansing Board of Responsibility for Payment of Bills
so Water and Light Electric Rule and Regulation 7
4. Account Security Deposits
The Board shall require an account security deposit from any new or existing Customer with an
unacceptable credit history with the Board. The Board shall apply different rules to new
Customers signing up for service in accordance with Rule 7.4.13. The deposit is normally 2 times
the average monthly bill (actual or estimated) as determined by the Board and shall be applied
according to Rule 15. Security Deposits shall be administered in accordance with Customer
Service established Standards and Guidelines.
The Board may waive deposits in special circumstances. The Board may also demand deposits
larger than 2 times the average monthly bill if the Board determines that a Customer presents a
higher than normal credit risk.
A. Unacceptable credit history includes but is not limited to the following:
(1) The Customer has deliberately misinformed or misrepresented facts to the Board.
(2) The Customer misrepresents their identity.
(3) The Customer fails to provide positive identification at the time of applying for service.
(4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in
the past 6 years.
(5) The Customer has had one or more payments canceled in the last 12 months due to: (1)
non-sufficient fiords returned check, (2) account closed returned check, (3) non-sufficient
funds bank bill, (4) account closed bank bill, (5) credit card reversal, (6) or other payment
method cancellation.
(6) The Customer has a prior account that is delinquent within the last 6 years.
B. New Customers may not be required to submit a deposit, in any of the following situations:
Residential Customers
(1) The Customer has no service history with the Board and has been permitted into the Good
Faith Deposit Program in accordance with Customer Service established Standards and
Guidelines.
(2) The Customer has previously established an acceptable payment history with the Board on
a similar account.
(3) The Customer's bill is paid by a governmental agency.
(4) The Customer secures a guarantor; the guarantor has an acceptable payment history.
(5) The Customer provides an acceptable surety bond.
(6) The Customer provides an acceptable credit reference letter from a similar utility company
for a similar account. Account must have been in the Customer's name and maintained
for a minimum of 12 consecutive months.
Commercial and Industrial Customers
(1) The Customer has previously established an acceptable payment history with the Board on
a similar account.
(2) The Customer's bill is paid by a governmental agency.
(3) The Customer secures a guarantor; the guarantor has an acceptable payment history.
(4) The Customer provides an acceptable surety bond.
Approved: 05/27/08
Effective: 07/01/08 Page 18 of 42
WArE� R�3L� Lansing Board of Responsibility for Payment of Bills
j Water and Light Electric Rule and Regulation 7
(5) The Customer provides an acceptable credit reference letter from a similar utility company
for a similar account. Account must have been in the Customer's name and maintained
for a minimum of 12 consecutive months.
The Board will refiund deposits to all Customers who have taken service for 12 months and have
an acceptable payment history. The Board will also refund deposits to Customers who have
voluntarily terminated service and paid all charges due.
The Board will pay simple interest accrued on Account Security Deposits held. No interest will be
paid until the deposit is returned to the customer. The interest rate will be updated on July 1 of
each year. The interest rate used to calculate interest will be the sum of the Federal Funds rate in
effect on the last day of March of the current year plus .25%.
Approved: 05/27/08
Effective: 07/01/08 Page 19 of 42
WATE�UCHT Lansing Board of Dispute and Hearing Procedure
Water and Light Electric Rule and Regulation 8
Dispute and Hearing Procedure
1. Disputes
In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute
and hearing process for its Customers as follows:
A. When any Customer disputes a bill or service and the Board is so advised in writing, the date of
the notice of dispute will be recorded.
B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer
has requested a hearing, pending results of the hearing. Service may be discontinued for
nonpayment of bills that are not disputed.
C. The disputed bill or service will be investigated promptly and completely.
D. The Customer will be advised of the results of the investigation.
E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties.
F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement
agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute.
G. If a settlement cannot be reached between the Customer and the Board's Account Administrator,
the Customer may choose to appear before the Board's Dispute Review Committee. The review
will be scheduled within ten(10)days of the request or as mutually agreed to by both parties.
H. If a settlement cannot be reached following examination by the Dispute Review Committee, the
account will be referred to the Board's General Manager.
1. If a settlement is not reached after review by the Board's General Manager, the Customer shall be
afforded an opportunity for a hearing.
J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered
which are not in dispute.
2. Hearings
A. Any Customer who disputes the services provided or a billing for services furnished in
accordance with the Board's filed Rates, Rules and Regulations or established policies or
procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the
request must be made within ten (10) calendar days following the final outcome of the dispute
process. Any request for a hearing may be made in writing and received by the Board's corporate
office at 1232 Haco Drive, Lansing,Michigan,48912.
B. On receipt of a request for a hearing, the Board will forward this request to an independent
Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the
Customer and the Board of the date, time and location in writing. The hearing will be scheduled
during normal business hours. Failure of the Customer or Board to attend the hearing without
due cause or prior request for adjournment will constitute a waiver of right of that party to the
hearing.
C. The Board and the Customer shall:
(1) Have the right to be represented by Counsel or other persons of their choice.
(2) Have the right to present evidence, testimony and oral and written argument.
(3) Have the right to cross-examine witnesses appearing on behalf of the other party.
Approved: 05/27/08
Effective: 07/01/08 Page 20 of 42
WATER Lansing Board of Dispute and Hearing Procedure
Water and Light Electric Rule and Regulation 8
(4) Have the right to have the hearing recorded by a court reporter at the expense of the party
requesting a court reporter. The Hearing Officer shall also have the right to have the hearing
recorded by a court reporter. Recordings will be preserved at least six (6) months from the
date of the hearing. All evidence relevant to the dispute will be received.
D. For each hearing, the Hearing Officer shall compile a hearing record which will contain;
(1) A concise statement in writing of the position of the Board in relation to the dispute.
(2) A concise statement in writing of the position of the Customer in the dispute.
(3) Copies of all evidence submitted by the parties.
E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both
parties. If the Hearing Officer does not reach a decision during the hearing, additional time will
be allowed to reach a decision. When a decision has been reached, either at the hearing or later,
the Hearing Officer will prepare a report which shall contain the following:
(1) A concise summary of the evidence and argument presented by the parties.
(2) The decision and a statement that the decision of the Hearing Officer was based solely on
the evidence presented and reasons therefore.
(3) Advise that the representatives of the Board and the Customer have a right to file an appeal
with the Board of Commissioners.
(4) A statement as to any settlement agreement.
(5) A statement that the dispute determination is binding on both parties unless appealed to the
Board of Commissioners within ten(10) days of the date of mailing of decision, and that any
request for appeal must be in writing to the Corporate Secretary.
F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor
of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail.
G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make
recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will
arrange a time for the appeal and advise both the Customer and the Board of the date, time and
location in writing. Failure of the Customer to appear at the time set for the appeal without due
cause, or to request an alternate date,will constitute a waiver of right to appeal.
H. The Board of Commissioners shall report its final action on any unresolved disputes together with
the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing,
Michigan.
1. The Mayor may make recommendations to the Board of Commissioners on each unresolved
dispute.
Approved: 05/27/08
Effective: 07/01/08 Page 21 of 42
WATER i� Lansing Board of Sale and Lease of Service Facilities
so Water and Light Electric Rule and Regulation 9
Sale and Lease of Service Facilities
1. General
To qualify for a primary electric service Rate, the Customer must own and maintain or lease from the
Board all the necessary transforming, primary switching, primary metering and protective equipment
required for such service and the entire electrical requirements must be supplied through a Board
approved metering installation. This service is offered at the option of the Board and the Customer
shall meet the requirements of this Rule 9, Rule 3.2.A.(5) and all electrical codes and Board
standards.
Prior to sale or lease of a Board owned installation for a primary electric service Rate, this installation
shall be required to meet all applicable electrical codes, which may require the Customer to install
additional equipment such as gang-operated disconnect devices and protective devices.
Once the applicable code requirements are met, and subject to Board approval, the Customer will be
allowed to purchase or lease the Board owned transformer(s) and associated equipment at estimated
fair market value. Upon compliance with the provisions of this Rule 9, the Customer will be placed
on the applicable primary electric service Rate.
After date of sale, the Board disclaims any rights or ownership or responsibility for the equipment or
Facilities and purchaser accepts the equipment or Facilities as is without warranty either express or
implied and, further, the responsibility for any and all replacement, maintenance and/or repair as/or
when needed wholly rests with the Customer.
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Effective: 07/01/08 Page 22 of 42
WATERRRIGHf Lansing Board of Distribution System Extensions
UWater and Light Electric Rule and Regulation 10
Distribution System Extensions
1. General
A. Request for Distribution System Extension
Rule 10 sets forth the conditions under which the Board will extend overhead,
underground or combination overhead and underground electric distribution systems.
B. Ownership
The Board will provide, own, maintain and specify all of its distribution Facilities
including location, except as otherwise expressly provided herein. No ownership rights
to Board Facilities shall pass to any owner(s), developer(s), or Customer(s) by reason of
any contribution required hereunder.
C. Nonrefundable Contribution for Underground Extensions
The owner(s), developer(s) or Customer shall be required to make a nonrefundable
contribution in aid of construction to the Board prior to construction, to cover the
estimated difference in cost between overhead and direct burial underground Facilities.
Residential:
In Subdivisions:
The amount of the contribution shall be computed on the basis of front lot
footage as determined by the Board. Where underground distribution system
extends through areas within a subdivision that are undeveloped or consists of
lots for fiiture use, the front footage measurement of both sides of the street or
easement along which the cable extends will be the basis for such
contribution. The "Residential Underground Distribution Extension" charge
for this contribution shall be as stated in Rule 15.
Outside Subdivisions:
The amount of the contribution shall be computed on the basis of Trench
footage required and to be installed. The "Residential Underground
Distribution Extension' charge for this contribution shall be as stated in Rule
15.
Commercial, Industrial and Multi-Dwelling Strictures:
The amount of the contribution shall be computed on the basis of Trench
footage required and transformer capacity to be installed. The "Commercial
Underground Distribution .Extension' charge and "Transformer kVA
Capacity"charge for this contribution shall be as stated in Rule 15.
D. Deposit
The Customer may be required to make a deposit based on the following:
(3) For Customer(s) to be served within one year:
(a) The Board shall require a deposit from the Customer, prior to construction,
in the amount that the estimated cost of the distribution extension exceeds
one and one-half (1'/z) times the estimated new Annual Revenue to be
received from the Customer(s). Any nonreffundable contribution in aid of
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Effective: 07/01/08 Page 23 of 42
WATE`IG�HT Lansing Board of Distribution System Extensions
Water and Light Electric Rule and Regulation 10
construction made will be credited against the cost of such extension for
purposes of this calculation.
(b) When serving residential subdivisions, the Board shall require a deposit
from the Customer, prior to construction, in the amount that the estimated
cost of the distribution extension exceeds one and one-half(P/2) times the
estimated new Annual Revenue to be received from the Customer(s) based
on up to 1/3 of the lots to be served by the distribution system to be
immediately constructed. Upon request and sufficient documentation by
the Customer(s), the Board may calculate the estimated new Annual
Revenue based on more that 1/3 of the lots to be serviced by the
distribution to be immediately constructed. Any nonrefundable
contribution in aid of construction made will be credited against the cost of
such extension for purposes of this calculation.
(4) For serving Loads of questionable stability or development: A deposit, if required,
by the Customer will be based on an evaluation of the Board's recovery of capital
cost along with other business related matters. Rule 10.1.C. "Nonrefundable
Contribution for Underground Extensions" may not apply to distribution system
extensions evaluated under this section herein.
Prior to the installation of a distribution system, the owner(s), developer(s) or
Customer(s) who are to make any contribution required hereunder shall be required to
enter into a written agreement. The agreement will generally describe the proposed
distribution system and set forth the respective obligations of the parties. Such
agreements shall be subject in all respects to the provisions of this Rule 10. Each
proposed system shall be a separate and distinct unit and any extension thereof shall, if
agreed to by the Board,be made the subject of a separate written agreement.
E. Refunds
Distribution Line extension deposits made with the Board shall be subject to refund
without interest during the first five (5) twelve (12) month periods from the date of the
written agreement for a distribution system extension as required by this Rule 10.1.D.
Refunds will only be made to person(s) making the deposit and shall cease when they
equal the amount deposited or at the close of the fifth twelve (12) month period
following the month during which the line extension is completed, after which the Board
shall have no further obligation to refund any remaining portion of the line extension
deposit.
The Board will refund to the party making the deposit:
1) $500 for each additional new residential permanent Customer(s) directly
connected to the extension and;
2) An amount equal to one and one-half (1'/z) times the first year estimated
Annual Revenue less the distribution system constriction cost for each
additional new commercial/industrial permanent Customer(s) directly
connected to the extension.
Directly connected Customers are those that do not require the constriction of more than
300 feet of primary and/or secondary Distribution Lines. Refunds will not be made until
the original Customer(s)or its equivalent are permanently connected to the extension.
Approved: 05/27/08
Effective: 07/01/08 Page 24 of 42
WATER R&L®T Lansing Board of Distribution System Extensions
Water and Light Electric Rule and Regulation 10
F. Economic Development Offsets
Where the Board determines that the distribution system extension will promote
development that provides substantial and sustainable economic benefits to its
Customers or the Lansing region, the Board will consider an offset to its fees and
.charges and/or an economic incentive subject to its availability.
G. Easements and Tree Trimming/Removal Permits
Prior to the installation of any distribution system, the owner(s), developer(s) or
Customer(s) shall be required to furnish, at no expense to the Board, recordable
easements, granting right-of-ways suitable for the installation and maintenance of the
distribution system including any street lighting cables and distribution equipment as
designed by the Board for present and future service. The owner, developer, or
Customer shall also, in a form satisfactory to the Board, grant the Board permission to
trim and remove trees as necessary to protect the integrity of its distribution system and
the safety and welfare of its employees and the public.
In the event the required easements and tree trimming and removal permits are not
provided by the owner(s), developer(s) or Customer(s) for such extension, the Board
may elect to construct all or any part thereof along public highways or other private
property. In such event, the Board may require the owner(s), developer's) or
Customer(s) to pay the added construction expense occasioned by the use of such
highways or other private property, plus any expense encountered in acquiring permits
and easements on other private property when necessary to provide service to the
owner(s), developer(s) or Customer(s).
H. Non-Standard Equipment
Where the Customer requests that the Board utilize equipment which differs from its
normal specifications, purchased or installed, the Board may elect to provide such non-
standard equipment with the Customer paying any additional cost.
I. Non-Standard Construction
Where, in the Board's judgment, practical difficulties exist such as unexpected
governmental requirements, frost or wet conditions, contaminated soil, rock within the
excavation surface, or where it is necessary to deviate from the Board's approved
construction standards or established distribution system design, the Board may require
the Customer to pay for the additional cost resulting therefrom.
J. Other Facilities
The Board may elect to prohibit the construction of sanitary sewers and water Facilities
in its easement so that sewer and water connections can be made without undermining
electrical ducts or cables. It will be the responsibility of the owner(s), developer(s) or
Customer(s) to provide locations of any existing privately owned underground Facilities
such as lawn sprinkler systems, field drainage systems, septic tanks, Customer owned
electric lines, etc. If privately owned Facilities are not properly located, the Board does
not assume responsibility for any damage to these Facilities.
Approved: 05/27/08
Effective: 07/01/08 Page 25 of 42
WATER aucHr Lansing Board of Distribution System Extensions
Water and Light Electric Rule and Regulation 10
K. Customer Provided Facilities
Customers who will be served by an underground distribution system and whose Load
requires the installation of a padmounted transformer(s) larger than 500 kVA shall be
required to own, install and maintain a concrete platform(s) constructed according to the
Board's specifications.
Where it is necessary or requested to place the Board's pole(s), transformer(s) or other
above-grade equipment in an area on the Customer's property which is susceptible to
vehicular traffic, it will be the Customer's responsibility to install guard posts to the
Board's specifications or the Board will install them on an estimated installed cost basis.
L. Nfobile Home Courts
Underground distribution systems and services for Mobile Home Courts shall be
installed under the provisions of this Rule 10 and Rule 11, except that the Board will
provide, install and maintain suitable meter supports which will be located along the
Main Line Trench at locations as specified by the Board. The Board will install, own
and maintain the entire underground electric distribution system, including the pre-
metered portion of the service laterals. The service conductors from the meter to the
mobile home shall be the responsibility of the Mobile Home Court owner.
M. Street Lighting
The Board may provide street lighting in areas served directly by its distribution system
subject to the governing entity's approval Board approved standards and the Board's
Rate Schedules. The governing entity shall be required to sign a Street Light Construct
and Billing Agreement.
The Board may provide underground street lighting in areas served directly by
underground distribution systems.
(1) Where applicable street lighting facilities including standards,luminaries,cables and
associated facilities will be installed after curb and gutter installation.
(2) Street lighting facilities will be installed utilizing the direct buried method as described in
Rule 10 Section 2 except where applicable per Rule 10 section M.
(3) Underground conduits shall be installed under all drivable surfaces.
(4) Where applicable a reasonable effort should be made by the governing entity and its
contractor to coordinate the installation of conduits during road and driveway construction.
(5) Conduits will be installed across all quadrants of intersections where street lights are
proposed at locations to be specified by the customer projects engineer. The customer
projects engineer may reduce or increase the number of conduits to meet the conditions of
the system or site.
(6) Street lighting underground cables will be installed at a minimum of 12 inches and a
maximum of 24 inches behind back of curbs,gutter or drivable surface delineation. Depth
of cable is as defined in Rule 10 Section 2. Trenching and Duct.
(7) Where concrete is continuous between curb and sidewalk and or property line conduits
shall be installed from light to light. Handholes will be installed at each light standard. The
number of conduits installed will be specified by the customer projects engineer.
(8) Standards and poles will be installed 3 feet behind the back of curb or drivable surface and
6 feet from any curb radius or driveway. Exceptions shall be approved by the customer
projects engineer.
(9) Street Lighting facilities installed on State of Michigan Highways or trunk lines will be
installed according to the MDOT standards and approvals.
Approved:05/27/08
Effective: 07/01/08 Page 26 of 42
wATE�e Lansing Board of Distribution System Extensions
Water and Light Electric Rule and Regulation 10
(10) Roadway traffic signs may be installed on existing street light poles and standards with
approval from the governing entity. Installation of signs shall be completed by the
governing entity or its approved contractor. Signs shall be installed utilizing BWL
approved methods and materials and meet all local codes.
(11) Illumination levels,street lighting design and installation will be determined by the latest
standards and guidelines set forth by the Illuminating Engineering Society of North
America and BWL. Any deviations from these guidelines and standards must be submitted
in writing and approved by governing agency and the BWL.
N. Outdoor Protective Lighting
The Board may provide Outdoor Protective Lighting (OPL) in areas served directly by
its distribution system subject to the governing entity's approval, where applicable,
Board approved standards and the Board's Rate Schedule. The customer shall enter into
a Board Outdoor Protective Lighting(OPL) Contract.
(1) OPL's may be installed on existing poles as approved by the customer projects engineer.
(2) OPL's may be fed from overhead distribution or underground distribution.
(3) Where applicable OPL facilities including standards,luminaries,cables and associated
facilities will be installed after curb and gutter installation.
(4) Underground OPL facilities will be installed utilizing the direct buried method as described
in Rule 10 Section 2 except were applicable per Rule 10 section M.
(5) Where applicable to the installation underground conduits shall be installed under all.
drivable surfaces.
(6) Where applicable a reasonable effort shall be made by the customer and its contractor to
coordinate the installation of conduits during road and driveway construction.
(7) OPL underground cables will be installed at a minimum of 12 inches and a maximum of 24
inches behind back of curbs,gutter or drivable surface delineation. Depth of cable is as
defined in Rule10 Section 2. Trenching and Duct.
(8) Where concrete is continuous between curb and sidewalk and or property line conduits
shall be installed from light to light. Handholes will be installed at each light standard. The
number of conduits installed will be specified by customer projects engineer.
(9) Standards and poles will be installed 3 feet behind the back of curb or drivable surface and
6 feet from any curb radius or driveway. Exceptions shall be approved by the customer
projects engineer.
(10)Illumination levels,street lighting design and installation will be determined by the latest
standards and guidelines set forth by the Illuminating Engineering Society of North
America and BWL. Any deviations from these guidelines and standards must be submitted
in writing and approved by governing agency and the BWL.
O. Subdivisions
The Board will install underground electric distribution systems for all new
subdivisions. Likewise, where a new subdivision is located adjacent to an existing
overhead distribution system, the Board will generally provide underground service
from these overhead Facilities unless the local governmental authority approves the use
of individual overhead service connections.
P. Available Voltage
If a Customer requires a three-phase voltage different from the established voltage in the
area, it may be furnished at the Board's option. In such cases, the Customer shall pay all
extra costs involved. In the case where there is more than one established voltage in the
area, the Board shall determine which voltage will be furnished.
Approved: 05/27/08
Effective: 07/01/08 Page 27 of 42
WATER&L�T Lansing Board of Distribution System Extensions
so Water and Light Electric Rule and Regulation 10
Q. Construction Date of Distribution Extension
The Board will, based on availability of work crews and material, and subject to
approvals of the appropriate regulatory agencies, utilize best efforts in constricting the
distribution extension to meet a mutually agreed upon date.
2. Trenching and Duct
The owner(s), developer(s) or Customer(s) shall be required to provide, at no expense to the
Board, rough grading (within six (6) inches of finished grade) prior to the installation of the
Board's Facilities so that the underground electric distribution system and street lighting cables,
if any, can be properly installed in relation to the finished grade. Owner(s), developer(s), or
Customer(s) shall install and maintain permanent survey stakes indicating property lines, at no
expense to the Board, after rough grading, and prior to installation of the Board's Facilities.
The Board's construction standards for the installation of direct burial primary and secondary
cables require a minimum cover of thirty-six (36) inches for primary cable and thirty (30)
inches for secondary cables and a maximum cover of forty-eight (48) inches, unless otherwise
approved by the System Integrity & Customer Projects Department and, in no cases, shall the
Board allow any Board owned cable Facilities to remain energized when in known violation of
the minimum depth requirements of the National Electrical Safety Code. Any subsequent
relocation of Board Facilities required on account of a change in grade that violates this
minimum depth requirement shall be done by the Board and billed at actual cost to the
owner(s),developer(s)or Customer(s) causing for the violation.
The Board may jointly utilize Trenches for primary, secondary cable and service conductors
with other utilities. The other utility(s) electing to utilize joint trench will be responsible for
payment of"Joint Trench Charges" in accordance with Rule 15, "Joint Trench Charges". All
Trenching and backfilling will normally be provided by the utilities; however, the developer
shall be responsible for all extra expense involved if paving is installed before cable or conduit
crossings are in place.
The Board may elect at its sole discretion to install additional conduit or duct at the request of
other utility providers. The utility(s) utilizing the conduit or duct will be responsible for
payment of joint installation in accordance with Rule 15.
The Board will backfill Trenches for primary and secondary cables with the same material as
has been excavated and with minimum compaction except in cases where material removed is
found to be rubble, debris or unsuitable as determined by the Board. In such cases, sufficient
sand shall be provided by the owner(s) or developer(s), at no expense to the Board, or the
Board may, at the owner's expense, furnish the sand to backfill six(6) inches below and above
the Board's cables.
Where it is necessary for Trenching and installation of underground electric Facilities to be
scheduled during the "Winter Constriction Period"as defined in Rule 15,the Customer may be
required to pay a"Winter Construction Charge"as established therein.
As an option, the Customer or developer may elect to provide all Trenching, backfill and
restoration on the Customer's or developer's property to the Board's specifications.
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Effective: 07/01/08 Page 28 of 42
WATER&LIGHT Lansing Board of Distribution System Extensions
&a Water and Light Electric Rule and Regulation 10
Prior to the installation of the Board's direct burial electric Facilities in a Trench provided by
the Customer or developer, the Trench shall be inspected by the Board's authorized personnel
for proper depth and cleaning of debris. The first inspection shall be at no charge, and all
subsequent inspections may be subject to a"Site Inspection" fee as defined in Rule 15.
If the Board determines that an installation is not practical for direct burial cable, the Board will
require ducts. The owner shall be responsible to own, install and maintain ducts, manholes and
vaults located on the owner's Premises when:
A. The owner requests these Facilities;
B. Direct burial installation is impractical;
C. The Board requires these Facilities as an extension from a similar existing system, or;
D. Other reasons as may be determined by the Board.
Otherwise, the Board shall own, install and maintain such ducts and associated Facilities.
Ducts,manholes and vaults shall be installed in accordance with the Board's specifications.
3. Conversion of Existing Overhead Distribution Systems and Associated Services
At the request of a Customer, the Board will, if feasible, convert any existing overhead electric
distribution system and associated overhead services, including any provisions for street
lighting, to underground distribution Facilities.
Prior to the commencement of the conversion of any existing overhead distribution systems and
associated services, the Customer(s) shall be required to make a nonrefundable contribution in
aid of construction. The contribution in aid shall reimburse the Board for the estimated fair
market value of the existing overhead Facilities comprising such system plus the cost of
removal less the salvage value thereof, plus the cost of the new underground Facilities
including, without limitation, the cost of breaking and repairing streets, walks, parking lots,
driveways, and the cost of repairing lawns and replacing shrubs, flowers,sod.
Should the conversion of these Facilities cause the installation or re-arrangement of other
overhead Facilities in the area, the Customer(s) shall reimburse the Board for the installed cost
involved in re-arrangement or installation of other existing Facilities.
Conversion of any existing overhead electric distribution system and associated overhead
services are also subject to the easement provisions of Rule 10.1.F.
Any additional rewiring of Customer owned Facilities made necessary by the conversion of an
overhead service to any underground service shall be the responsibility of the Customer.
Pole attachments other than the Board's are the responsibility of the attaching party.
4. Electric Facility Relocations and Removals
At the request of a Customer or developer, or as required due to a conflict, or to meet Board
Standards, the Board will relocate or remove its electric and associated Facilities provided:
A. The relocation or removal is feasible and meets Board Standards.
Approved: 05/27/08
Effective: 07/01/08 Page 29 of 42
WATER&LIGHT Lansing Board of Distribution System Extensions
IM Water and Light Electric Rule and Regulation 10
B. The Customer or developer obtains approval from all Customers impacted by the
proposed relocation.
C. The relocation or removal does not degrade electrical reliability
D. All governmental approvals,permits and easements are obtained
Prior to any relocation or removal of electric Facilities, the Customer or developer shall be
required to make a nonrefundable contribution in aid of constriction. The aid in contribution
of constriction shall reimburse the Board for all relocation and removal costs including
material, labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc.,
repairing lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 10,
plus the cost of any necessary modifications to the Board's electric distribution system affected
by the relocation or removal, less the salvage value of any portion of the electric Facilities
removed. Where relocation or removal of electric Facilities is necessary to serve new or
additional Load, the Board may elect to credit all or a portion of the value of any associated
revenue to the cost of relocation or removal.
The only exception to these relocation provisions will be the relocation of the Board's electric
Facilities within public right-of-way that blocks the access to the first driveway to a residential
Premise. There will be a charge for relocation work to provide access to any additional
driveways to these Premises. Proof of driveway permits will be required prior to any relocation
work.
5. Distribution System Extensions for Second Source
A. The Board will not construct at its own expense a second electric source to any facility,
new or existing, that can be adequately served with a single source as determined by the
Board. Except that a Second Source shall be required for Customers served from the
Board's underground lead cable system and the Board may require a nonrefundable
contribution in aid of construction as determined by Rule 10.1.D.
B. The Customer may have the additional source installed by making a nonrefundable
contribution in aid of construction to the Board, in advance, to cover the entire cost of
extending the Board's electric Distribution Lines to the Customer's Facilities, and any other
cost incurred due to increasing the capacity of the Board's existing distribution Facilities.
C. Where the reasonable probability exists for future Customers to be connected to the
proposed Second Source line extension, the Board may elect to enter into a line extension
agreement in accordance with the applicable provisions of this Rule 10.
D. In the case of a request for a Second Source, the Board will endeavor, but does not
guarantee, to maintain at all times two separate sources to the Customer's Facilities.
Approved: 05/27/08
Effective: 07/01/08 Page 30 of 42
Lansing Board of Services
Water and Light Electric Rule and Regulation 11
Services
1. General
The Service Entrance Conductors shall be furnished, installed and maintained by the Customer in
accordance with the National Electrical Code or other applicable local codes and shall conform to the
Board's specifications.
The Service Location shall be specified by the Board and shall be located so that the Board's service
Facilities meet or exceed all clearance requirements of the National Electrical Code, National
Electrical Safety Code and other applicable law,regulations and local codes.
Service shall not be provided to a Service Location through an existing structure.
Should it become necessary from any cause beyond the Board's control to change the Service
Location, the entire cost of any changes in the Customer's service shall be the responsibility of the
Customer.
Should it become necessary for the Board to reinforce or upgrade area distribution Facilities to
accommodate the requested service, a nonrefundable contribution in aid of construction may be
required as determined by Rule 10.I.D.
Any poles, wires and other equipment required at or beyond the Customer's meter shall be furnished,
installed and maintained by the Customer.
The Board will maintain and repair only those service conductors owned by the Board except as
provided in Rule 11.6. In the course of maintaining or repairing service conductors, the Board shall
bear no responsibility for damage incurred or restoration to areas where the service conductors pass
under any area not readily accessible. The Customer shall be responsible for additional repair costs
due to these encumbered services or for damage as a result of negligence, willful damage or
carelessness by the Customer, owner or tenants.
2. Temporary Services
Customers desiring temporary general secondary service (normally less than six (6) months) for,
including without limitation, construction jobs, traveling shows, outdoor or indoor entertainments or
exhibitions, shall pay the charge per Customer per month provided in the Board's applicable Rate.
The Customer shall furnish a suitable support for the metering.
The Customer shall be required to make a nonrefundable contribution in aid of construction with the
Board in an amount to cover the cost of installing and removing these temporary Facilities plus a
security deposit if required prior to the start of construction. Meters shall be installed by the Board
and may be read daily and the deposit will be modified, as the Energy used may justify such
modification. Minor temporary Loads such as construction security cameras may be unmetered and
billed at a flat Rate at the approval of the System Integrity and Customer Projects Department.
Where overhead temporary service of 400 Amperes or less is desired and where such service is
available and does not exceed 100 feet at the time temporary service is needed, the charge will be as
specified in Rule 15.
Where overhead temporary service is not available at the site or exceeds 100 feet or 400 Amperes, the
Customer shall be required to make a nonrefundable contribution in aid of construction to the Board
Approved: 05/27/08
Effective: 07/01/08 Page 31 of 42
WATER R� Lansing Board of Services
la Water and Light Electric Rule and Regulation 11
in advance to cover the estimated cost of installation(excluding services and meters),phis the cost of
removal or abandonment of the temporary Facilities less the salvage realized.
For all underground temporary services, the Customer is responsible to Trench and install each
underground temporary service conductor(s) in accordance with the requirements of all electric codes
applicable, to a point within two (2) feet of the Board's Facilities. Any excavation with power
equipment will require notification of the"Miss Dig" system for the identification of all underground
Facilities in the area as required by the laws of the State of Michigan. The Customer shall make a
nonrefundable payment to the Board for connecting and disconnectin�-) temporary service
conductor(s) to Board equipment as stated in Rule 15.
3. Residential,Commercial and Industrial Overhead Services
Where suitable service is available, the Board will install, own and maintain overhead service
conductors from its Distribution Lines to the nearest suitable point of attachment on the Customer's
buildings or other structures as designated by the Board. The ampacity of the Board's overhead
service conductors will be rated for the estimated electric Demand but not less than 50% of the
customer's main over current device(s).
Where the Customer requests a point of attachment other than that specified by the Board, then the
Customer shall be responsible to pay the cost of installing additional intermediate supports, wires or
fixtures necessary to reach the point of attachment requested.
The Customer shall furnish, own, install and maintain service masts, when necessary in order to
obtain required clearance. The Board will specify the location, height and size of the mast to
adequately support the service wires under heavy loading conditions. While the mast should be
firmly attached to the principal building frame, the Board does not make recommendations regarding
the method of fastening and assumes no responsibility for damage caused by the service wires. The
Customer should consult an architect or builder regarding the method of fastening prior to
installation.
Where paralleled Set-vice Entrance Conductors are used in overhead services, the Customer(s) or the
contractor(s) shall be responsible to terminate the paralleled conductors in a single conductor suitable
for connection to the Board's overhead service wires.
4. Residential,Underground Services from Underground Distribution Systems
Upon request and where suitable .Facilities are available, the Board will install, own and maintain
single phase underground direct burial residential electric service conductors to the nearest suitable
point of attachment on the exterior of the Customer's building or other structure as designated by the
Board, provided that the total capacity of all the Dwelling Units at each Service Location does not
exceed the capacity of a single 167 kVA transformer. Where the total service capacity of all the
Dwelling Units at one Service Location exceeds the capacity of a single 167 kVA transformer, the
service conductors shall be installed in accordance with Rule 11.6.
The developer or Customer shall be required to make a nonrefundable contribution in aid of
construction to the Board to cover the additional cost resulting from the installation of an
underground service.
For standard installations, the amount of such contribution shall be computed on the basis of the
"Residential Underground Service" charge as defined in Rule 15 and applied to the straight line
distance from the termination of the Board's secondat Facilities normally at or near the front or rear
Approved:05/27/08
Effective: 07/01/08 Page 32 of 42
WATE'aa-- Lansing Board of Services
IM Water and Light Electric Rule and Regulation 11
property line, or at the Board's transformer, to a point directly below the Customer's meter as
designated by the Board.
Where special routing of the service conductors is requested by the Customer and the Board
determines this request to be feasible, the cost of the additional service length required to
accommodate such special routing shall be the responsibility of the Customer and will be based on
the"Residential Underground Service"charge as defined in Rule 15.
Where, in the Board's judgment, practical difficulties exist such as unexpected governmental
requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where
it is necessary to deviate from the Board's approved constriction standards or established distribution
system design, the Board may require the Customer to pay for the additional cost resulting therefrom.
5. Residential Underground Services from Overhead Distribution Systems
The Board will, where feasible, install, own and maintain single phase underground direct burial
residential electric service conductors from an overhead electric distribution system in accordance
with the provisions of Rule 11.4. In addition, the Board will impose a "Secondary Riser Pole
Charge"for each underground service supplied from an overhead secondary as stated in Rule 15. If a
crossing of a public road is necessary and the Customer requests that the crossing be installed
underground, the Customer may be required to make an additional contribution in aid of construction
to the Board, in an amount equal to the estimated difference in cost between an overhead and
underground crossing.
6. Commercial and Industrial Underground Services
The owner of each commercial or industrial building requiring an underground electric service system
shall install, maintain and own the underground secondary service conductors between the building
and the service pedestal, padmounted transformer or secondary attachment on the pole. Primary
service conductors shall be installed,maintained and owned by the Board.
Customers located in areas served by direct burial distribution systems may request the Board to
install direct buried electric secondary service conductors to commercial services not exceeding 400
amps where the point of metering is located outside and is in compliance with the Board's
requirements. The Board will comply with the request, if it is feasible, but shall only install service
conductors to a meter enclosure supplied by the Board and installed by the Customer. The Customer
shall still retain ownership of such service conductors with maintenance provided by the Board at the
Customer's expense.
The Customer or developer shall be required to make a nonrefundable contribution in aid of
construction toward the cost of such Board-installed services that, for standard installations, will be
computed on the basis of the"Commercial Underground Service"charge as defined in Rule 15.
Where, in the Board's judgment, practical difficulties exist such as unexpected governmental
requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where
it is necessary to deviate from the Board's approved constriction standards or established distribution
system design, the Board may require the Customer to pay for the additional cost resulting therefrom.
The commercial or industrial Customer may request the Board to maintain and repair, and the Board
may do so in its discretion, the Customer's underground secondary service conductors between the
building and the service pedestal, padmounted transformer or secondary attachment on the pole. The
Customer shall be responsible to pay all bills rendered by the Board for the cost to maintain or repair
the Customer's service conductors.
Secondary service conductors shall be installed in accordance with any applicable local codes and the
following Board specifications:
Approved: 05/27/08
Effective: 07/01/08 Page 33 of 42
WATER&LIGHT Lansing Board of Services
so Water and Light Electric Rule and Regulation 11
A. The total ampacity of all secondary service cables connected to a transformer shall not exceed
2000 Amperes. The secondary service shall be in accordance with the National Electrical Code
or other applicable local codes. Due to physical limitations of Board-owned transformers and
secondary connectors, the maximum number of paralleled secondary cables for any single service
dependent on service size shall be limited to:
Single Service Size Cables Maximum No. of Parallel
Copper Aluminum
200 Amperes 4 4
400 Amperes 4 4
600 Amperes 4 4
800 Amperes 4 4
1000 Amperes 4 4
1200 Amperes 4 4
1600 Amperes 4 5
1800 Amperes 5 6
2000 Amperes 5 6
The total number of cables connected to a single transformer connector shall not exceed five -
600 kcmil for copper cables and six - 750 kcmil for aluminum cables The Board will make
connection of all service and primary cables to Board-owned transformers.
B. A single secondary service in excess of 2000 Amperes shall be installed using one of the two
following methods.
(1) A bus duct that is provided and installed by the Customer or developer. The Applicant
must provide flexible secondary connectors with bus duct. The Board will make
connection of the bus duct to the secondary of the transformer.
(2) The Applicant may purchase a Board approved multiple secondary termination
cabinet. This cabinet is designed for use on single secondary services up to 3,000
Amperes and is available from the Board for a fee as specified in Ruffle 15. The
Applicant shall construct a concrete pad, supply and install their own cable and
provide terminal lugs for their supplied cables. The Board will make connection of the
Applicant's cable to the cabinet.
C. In locations where the Customer's service conductors are permitted to be connected directly to a
Board-owned transformer, only Board approved and provided terminations shall be allowed.
Approved: 05/27/08
Effective: 07/01/08 Page 34 of 42
WArE�IcHT Lansing Board of Services
MA Water and Light Electric Rule and Regulation 11
7. Multi-Dwelling Structure Services
The owner or developer of each Multi-Dwelling Structure requiring an underground single phase
electric service system shall install, maintain and own the underground secondary service conductors
between the building and the service pedestal,padmount transformer, or secondary attachment on the
pole. The total capacity of the Dwelling Units connected to each service shall not exceed the capacity
of a single 167 kVA transformer.
Customers located in areas served by direct burial distribution systems may request the Board to
install direct buried single phase electric secondary service conductors to Multi-Dwelling Structures
not exceeding 800 A where the point of metering is located outside and is in compliance with the
Board's requirements. The Board will comply with this request, if it is feasible, but shall only install
service conductors to a Secondary Service Termination Box supplied by the Board and installed by
the Customer. The Customer shall pay the cost of the Secondary Service Termination Box as
specified in Rule 15. The Customer shall retain ownership of such service conductors with
maintenance provided by the Board at the Customer's expense.
The Customer or developer shall be required to make a nonrefundable contribution in aid of
construction toward the cost of such Board installed services that, for standard installations, will be
computed on the basis of the"Commercial Underground Service"charge as defined in Rule 15.
Where, in the Board's judgment, practical difficulties exist such as unexpected governmental
requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or where
it is necessary to deviate from the Board's approved construction standards or established distribution
system design, the Board may require the Customer to pay for the additional cost resulting therefrom.
8. Conversion of Existing Overhead Electric Service
At the request of a Customer, the Board will, if feasible, convert an existing overhead electric service
to an underground electric service in accordance with.Rule 10.3.
9. Electric Service Relocations and Removals
At the request of a Customer, or as required due to a conflict, or to meet Board Standards, the Board
will relocate or remove its electric service Facilities in accordance with Rule 10.4.
10. Second Service
A. The Board will not construct at its own expense a second electric service to any facility, new or
existing, that can be adequately served with a single source as determined by the Board. Except
that a Second Service shall be required for Customers served from the Board's underground lead
cable system and may require a nonrefundable contribution in aid of construction as determined
by Rule 10.1.D.
B. The Customer may have the additional service installed by making a nonrefundable contribution
in aid of construction to the Board, in advance, to cover the entire cost of providing a Second
Service.
C. In the case of a request for a Second Service, the Board will endeavor, but does not guarantee, to
maintain at all times two separate services to the Customer's Facilities.
Approved: 05/27/08
Effective: 07/01/08 Page 35 of 42
WATE�IGHT Lansing Board of Motors
so Water and Light Electric Rule and Regulation 12
Motors
Customers shall be responsible to protect a motor that cannot have its rotation safely reversed or that
would be damaged by phase or voltage failure in all phases by phase reversal and phase failure relays
and/or low voltage relays. These protective devices should be wired to automatically disconnect and
prevent restarting of motors until the problem has been corrected and service restored to normal.
Conventional single phase motors may be connected to operate at 120 or 240 Volts subject to the
following limitations:
Maximum Allowable Locked-
Nominal Motor Size Permissible Operating oltage Rotor Current
`/z hp or less 120 50 Amperes
'/2 hp to 3 hp 240 105 Amperes
Over 3 hp 240 To be connected only with
written permission of the Board
All single phase motors should be connected by the Customer to operate at 240 Volts whenever
practical to minimize voltage drop in the Customer's wiring and supply system.
The Board may restrict both the individual and combined Horsepower and locked rotor current of
three phase motors installed in a Customer's facility. The Board may require the Customer to install
reduced voltage starters, starting interlock systems, variable frequency drives, or other devices to
reduce the locked rotor demands on the Board's electric distribution system. If the Board, in its sole
discretion, determines that a larger sized transformer than what would normally be installed is
required to supply the locked rotor currents,the Customer shall bear the added cost.
Customers planning the use of three phase motors should consult the System Integrity & Customer
Projects Department of the Board for characteristics, adequacy and availability of the service.
Approved: 05/27/08
Effective: 07/01/08 Page 36 of 42
WATE® Lansing Board of Use of Board Equipment
so Water and Light Electric Rule and Regulation 13
Use of Board Equipment
1. General
The Board's wires, poles and apparatus, together with any interconnections thereof, are the exclusive
property of the Board, and the connection of a Customer's Premises thereto does not entitle the
Customer to any use thereof, except as permitted by the Board and as necessary for the delivery of the
Board's service to the Customer.
The use of any part of the Board's distribution or Transmission System without prior Board approval
is expressly prohibited.
2. Authorized Attachments
The Board may enter into a Pole Attachment Agreement providing joint use of certain of its wood
poles for the purposes of providing telephone, CATV or other telecommunications services. The use
of any pole by anyone, without first having entered into a written agreement with the Board is
prohibited.
The Board may also issue revocable permits to any person(s) or organization(s), seeking to attach any
wire, cable, facility or apparatus for the transmission of telecommunications. Upon application for
permit, the applicant shall pay a nonrefundable application fee as stated in Rule 15. Application shall
be made to the System Integrity& Customer Projects Department of the Board.
Any reconstruction work necessary to accommodate the Facilities of the applicant shall be done by
the Board at the expense of the applicant.
The annual pole rental fee shall be as stated in Rule 15. Poles found attached in the field without
permission shall, at the Board's discretion, be removed in accordance with Rule 13.33 or be subject
to a minimum of three years retroactive billing.
The Board may exclude or limit certain Facilities from its poles. Furthermore, any poles that, in the
opinion of the Board, are necessary for its sole use will be excluded from any pole attachment permit,
joint use or rental agreements.
3. Unauthorized Use and Removal
A. The unauthorized attachment (including painting or marking) of any signs, banners, lines,
cables, equipment or any other matter to the Board's poles is prohibited.
Authorization may be granted by the Board's General Manager or his designated
representative based on purposes permitted by Michigan State law and requirements of
governmental authority for the health, safety and welfare of the general public.
B. The Board may remove or cause to be removed without notice any unauthorized foreign
matter from its poles at the expense of the Customer, the person(s) attaching the unauthorized
matter or, in the event neither can be identified, the individual, firm or organization which
appears to be the primary sponsor, user or beneficiary of the unauthorized matter. The Board
will observe reasonable precaution to prevent any damage resulting from such removal, but
will not be liable for any damage thereto.
Approved: 05/27/08
Effective: 07/01/08 Page 37 of 42
WATER Lansing Board of Parallel Power Sources
MA �
Water and Light Electric Rule and Regulation 14
Interconnection for Distribution Generators
1. General
In order to provide for the safety of the Board's personnel and others and to assure reliability of
electric service to all Customers, these requirements are established for operation of Customer
generation in parallel with utility distribution systems.
These requirements include all Customer systems under 100 kW. Systems 100 kW and over will be
handled by the Board on an individual basis. All units over 10 kW must be three phase units unless
specifically exempted.
These requirements apply to both existing and proposed installations.
2. Approvals
The Customer shall submit for Board approval, detailed electrical diagrams and equipment nameplate
data, including the interface device and control systems of the Customer's power source.
The completed installation must meet all local, state and national codes and is subject to inspection
and test by the Board and local code enforcement authorities before commencement of parallel
operation and such installation may be periodically inspected by the Board as required.
The Customer shall obtain approval from the Board prior to making any revisions to the Customer's
generating unit, its control systems or the interface between the two power systems after the initial
installation.
Control and Protection
The Customer's control and protection system must be acceptable to the Board. The Customer's
system shall provide for automatic separation from the Board's distribution system in the event of a
short circuit or open circuit on the Board's distribution system. The Customer's control system shall
also provide for automatic paralleling with the Board's system when conditions are proper for parallel
operation. Manual paralleling is not permitted without prior approval of the Board. Over frequency,
under frequency, over voltage and under voltage control may be required. The Customer shall be
liable for damage or injury if any part of the Customer's protective scheme fails to function due to
lack of proper maintenance or Customer negligence.
The Customer is required to install a disconnecting device with a visible break suitable for use as a
protective tag location so as to be accessible by Board personnel or its agents and in reasonable close
proximity to the billing meter. This device shall accept a standard Board padlock and shall be located
on the outside of all buildings. In no case shall the Customer tamper with or attempt to bypass the
disconnect switch when the Board has locked it in the open position.
Operation
Should the parallel operation of the Customer's generating source cause interference or affect voltage,
frequency or harmonic content of the Board's system or of another Customer's service, the Customer
shall discontinue parallel operation until the condition has been corrected.
The Customer will be charged for all costs associated with any alteration of the Board's equipment
required for proper operation of the Customer's generating equipment in parallel with the Board's
system. The Customer will also be liable for costs of future changes due to safety or adverse effects
on the Board's and/or other Customer's systems.
Approved:05/27/08
Effective: 07/01/08 Page 38 of42
WATER R�HT: Lansing Board of Parallel Power Sources
so Water and Light Electric Rule and Regulation 14
Termination
If the Customer does not meet all of the above requirements, the Board may require termination of
parallel operation. Failure to terminate parallel operation when required shall be cause for the Board
to interrupt electric service to the Customer.
Contract
The Customer must sign a contract with the Board before commencing parallel operation. In signing
the contract, the Customer shall, among other things, accept liability for any damages or injuries
caused by the Customer's parallel operation.
Approved:05/27/08
Effective: 07/01/08 Page 39 of 42
WATE'�auk Lansing Board of Schedule of Fees & Charges
so Water and Light Electric Rule and Regulation 15
Schedule of Fees & Charges
ELECTRIC FEES and CHARGES
Charge Description When Applied Charge
Residential Underground Distribution When requested by Customer $3.50/ft
Extension $7/ft for undeveloped lots
Residential Underground Service When requested by Customer $4.50/ft
Green space only,restoration not included. Installation S290 minimum
requiring conduit,sidewalk crossing or other hindrances
will be billed at time and material
Commercial Underground Distribution When requested by Customer $7/ft
Extension
Commercial Underground Service When requested by Customer,restoration not included.
400 A or less and green space only $6.50/ft
$525 minimum
Multi-Dwelling Structure Single Phase 800 A or less $6.50/ft
$525 minimum
Transformer kVA Capacity Commercial or Industrial underground services with S l0/kVA
padmounted transformation.
Current and Potential Transformer When requested by Customer,401— 1000A S700 ea.
Enclosure When requested by Customer,>100 1 A—1200A $1,200 ea.
When requested by Customer,>1201 A—3000A $12,000 ea.
Multiple secondary termination cabinet When requested by Customer,up to 3000A $9,500 ea.
Secondary Service Termination Box BWL installed commercial services requested by customer $900 ea.
with trough system 800 A or less on Multi-Dwelling
Structures
Temporary Service Overhead Install&remove service drop, 100 fit max,
200 A or less $500 ea.
201A to 400 A $700 ea.
Temporary Service Overhead Install&remove service drop,exceeds t00 ft, At cost
400 A or not available
Temporary Underground When requested by Customer, $375 ea.
(Normal) Connection&disconnection only
April l—December 14
Temporary Underground When requested by Customer, $550 ea.
(Winter) Connection&disconnection only
December 15—March 31
Secondary Riser Pole Charge When requested by Customer
Single Phase 400 A or less $600 ea.
Three Phase 400 A or less S850 ea.
Site Inspection When applicable,per site inspection. $80 ea.
Approved: 05/27/08
Effective: 07/01/08 Page 40 of 42
WATE®Ra®'r Lansing Board of Schedule of Fees & Charges
smWater and Light Electric Rule and Regulation 15
ELECTRIC FEES and CHARGES
Charge Description When Applied Charge
Joint Use and Third Party,make ready and engineering At cost
Pole Attachment Fees Annual fee $18 per attachment
$340 minimum
Application deposit,credited to make ready costs and $30 per pole
engineering $600 minimum
Joint Trench Charges To other utilities $2.10/ft if 3 joint users
$2.85 /ft if 2 joint users
$4.25 /ft if I joint user
Winter charge may also
apply.
Conduit Delivery for Joint Facilities To other utilities when conduit is delivered to site for $2.00/ft if 2 joint users
Installation road or drive crossing for installation by developer's in same conduit
contractor or BWL for utilization by Joint user(s). $3.90/ft if 1 joint users
Joint Conduit Push with BWL To other utilities to utilize separately installed conduit $21 /ft if 2 joint users in
same conduit
$31 /ft if I joint user
Winter Construction
Charge may apply.
Joint Boring with BWL To other utilities to utilize separately installed flexible $23 /ft if 2 joint users in
duct. same duct
S34 /ft if l joint user
Winter Construction
Charge may apply.
Winter Construction Charge December 15—March 31 $8.50 /ft
In addition to normal charge
Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge
After 5:30 p.m.on weekdays or weekends and holidays $130
Reconnection fee Each occurrence
Non-pay(Normal hours) 7:30am—5:30 p.m.weekdays $25
Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and holidays $130
Meter Tampering Any time $130
Cut at Pole Anytime $ 155
Security Deposits—Residential For all new and existing customers unless waived by $106
conditions stated in Rule 7.
Security Deposits—Commercial& For all new and existing customers unless waived by 2 times average monthly
Industrial conditions stated in Rule 7. bill
Missed Appointment,No Show,No After second occurrence,then per occurrence $30
access Fee
Approved: 05/27/08
Effective: 07/01/08 Page 41 of 42
WATEERS� Lansing Board of Schedule of Fees & Charges
go -Water and Light Electric Rule and Regulation 15
ELECTRIC FEES and CHARGES
Charge Description When Applied Charge
Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $30
Rate 5&8 Meter Non-compliance For each month of non-compliance with meter $80/month
Charge requirements
Meter Calibration Charge When Customer requested meter calibration check is $75
within plus or minus 2%accuracy
OPL Disconnect/Reconnect When requested by customer $40
Charges other than published Relocations,damages,etc. At Cost
Approved: 05/27/08
Effective: 07/01/08 Page 42 of 42
WATE�IGHT Lansing Board of
Water and Light
Rules and Regulations
For
Steam Service
Approved: 05/27/08
Effective: 07/01/08
WATER Lansing Board of Table of Contents
Water and Light
TABLE OF CONTENTS
PAGE
NUMBER
Definitions....................................................................................................................................................................4
GeneralProvisions.......................................................................................................................................................5
ServiceConditions.......................................................................................................................................................6
Characterof Service..................................................................................................................................................6
Descriptionof Service...............................................................................................................................................6
Availabilityof Service...........................................................................................................................................6
Agreements............................................................................................................................................................7
MaterialAvailability..............................................................................................................................................7
Useof Service...............................................................................................................................................................8
General......................................................................................................................................................................8
Accessand Damages.................................................................................................................................................8
CustomerPiping and Equipment...............................................................................................................................8
Steam Quality and Disturbances................................................................................................................................8
ImproperUse and Tampering....................................................................................................................................9
Discontinuationof Service........................................................................................................................................9
Metering.....................................................................................................................................................................10
General....................................................................................................................................................................10
Sizing/Installation/Ownership.................................................................................................................................10
EquipmentLocation................................................................................................................................................10
DamagedMeter.......................................................................................................................................................10
Applicationof Rates..................................................................................................................................................11
General....................................................................................................................................................................11
Resale......................................................................................................................................................................11
Choiceof Rates........................................................................................................................................................12
Billing......................................................................................................................................................................12
MinimumCharges...................................................................................................................................................12
Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................12
Responsibilityfor Payment of Bills..........................................................................................................................13
General....................................................................................................................................................................13
EstimatedConsumption...........................................................................................................................................13
BillingErrors...........................................................................................................................................................13
AccountSecurity Deposits......................................................................................................................................14
Dispute and Hearing Procedure...............................................................................................................................16
Disputes...................................................................................................................................................................16
Hearings...................................................................................................................................................................16
DistributionSystem Extensions................................................................................................................................18
General....................................................................................................................................................................18
Request for Distribution System Extension.........................................................................................................18
Ownership............................................................................................................................................................18
Availability of Distribution System Extension....................................................................................................18
Installation of Distribution System Extension.....................................................................................................18
Adequate Temperature,Pressure and Flow Capacity..........................................................................................18
EconomicDevelopment Offsets..........................................................................................................................19
Easements and Tree Trimming/Removal Permits...............................................................................................19
Non-Standard Equipment....................................................................................................................................19
Non-Standard Construction.................................................................................................................................19
OtherFacilities....................................................................................................................................................19
Construction Date of Distribution System Extension..........................................................................................20
Steam Facility Relocations and Removals...............................................................................................................20
Services.......................................................................................................................................................................21
Approved: 05/27/2008 Page 2 of 28
Effective: 07/01/2008
WATER R&Lir- Lansing Board of Table of Contents
Water and Light
General....................................................................................................................................................................21
SteamService..........................................................................................................................................................21
General................................................................................................................................................................21
Customer Connections to Board Facilities..........................................................................................................22
CustomerSteam Piping.......................................................................................................................................22
Installation and Maintenance of Steam Services.................................................................................................23
Steam Facility Relocations and Removals...............................................................................................................23
Condensateand Master Trap...................................................................................................................................24
General....................................................................................................................................................................24
Condensate..............................................................................................................................................................24
MasterTrap.............................................................................................................................................................24
Condensate(Surge)Tanks.......................................................................................................................................25
By-pass Valve..........................................................................................................................................................25
SystemExtension&Service Deposit........................................................................................................................26
General....................................................................................................................................................................26
Distribution System Extension and Customer Steam Service.................................................................................26
Customer Steam Service Only.................................................................................................................................27
Scheduleof Fees&Charges......................................................................................................................................28
Approved: 05/27/2008 Page 3 of 28
Effective: 07/01/2008
WATE' R"-HT Lansing Board of Definitions
sm Water and Light Steam Rule and Regulation 1
DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS
BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board
of Water and Light.
CUSTOMER— A purchaser of steam service supplied by the Board.
CUSTOMER PIPING—A piping system owned or controlled by the Customer that conveys steam from
the Service Location throughout the Customer's Premises.
CUSTOMER STEAM SERVICE — Those pipes, valves and appurtenances installed between a Steam
Main and Customer Piping.
DEMAND— The rate of steam delivered at a given point.
FACILITIES— A general term which includes pipes, fittings, valves, associated structures and the like,
used as a part of or in connection with a steam installation.
PERSON— Any individual, corporation, partnership, company, limited liability corporation,
organization or governmental entity.
PREMISES— A building and its grounds.
RATE— The unit prices as established by the Board's rate-making body and the quantities to
which they apply as specified in the Rate Schedule.
RATE SCHEDULE — A filed statement of the steam Rate and the terms and conditions governing its
application as established by the Board's rate-making body.
SERVICE LOCATION—The point at which the Board has agreed to provide steam service to Customer
Piping.
SERVICE VALVE—The valve installed by the Board at the Service Location in the building.
STEAM DISTRIBUTION SYSTEM — The system of Steam Mains, pipes, fittings, valves and all
equipment and appurtenances thereto, necessary to distribute steam to Customer Steam
Service.
STEAM MAIN—A pipe owned and maintained by the Board that conveys steam to a Customer Steam
Service.
Approved: 05/27/2008 Page 4 of 28
Effective: 07/01/2008
WATER&LIGHT Lansing Board of General Provisions
soWater and Light Steam Rule and Regulation 2
General Provisions
Copies of the Board's Rate Schedules for steam service are open to public inspection at the
Board's offices and are available on the Board's Internet Web site ww-w.lbwl.com or upon
request. Application for original, modified or added service shall be made at the office of the
Board of Water and Light at Utility Services, 730 East Hazel Street,Lansing.
Any Person receiving or agreeing to receive steam service from Board Facilities shall be deemed
a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for
the service used whether such service is provided under a signed agreement or not.
Steam service will not be supplied to new or remodeled buildings until such installations comply
with these Rules and Regulations.
The Customer should contact the Board's System Integrity & Customer Projects Department to
determine the characteristics of the steam service available at the Premises. The System Integrity
& Customer Projects Department will inform the Customer of the Board's requirements, which
must be fulfilled by the Customer, in order to receive steam service.
The Board may discontinue steam service to any Customer for any breach of the Board's Policy,
Rules and Regulations, Procedures or in accordance with law. The Customer must pay a
reconnection fee as stated in Rule 13 to cover the costs of restoring steam service that has been
discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in
accordance with law.
The Board will release customer information in accordance with written customer authorization
and Board policy
This document is intended to cover most situations where standardized policies and practices
have been established. No officer, agent or employee of the Board has authority to waive or
modify the provisions of this document unless specifically authorized to do so by the Board of
Commissioners. The Board of Commissioners may revise this document at any time and may
modify or suspend any portion of it temporarily or permanently.
Approved: 05/27/2008 Page 5 of 28
Effective: 07/01/2008
WATER�3UGH Lansing Board of Service Conditions
Water and Light Steam Rule and Regulation 3
Service Conditions
1. Character of Service
The Board produces and distributes saturated steam for public use throughout its service area and
will endeavor, but does not guarantee, to furnish a continuous supply and to maintain steam
temperature and pressure within reasonable limits.
The Board shall not be liable for interruptions in the service including without limitation,
variations in the service characteristics, or for any loss or damage of any kind or character
occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such
causes or conditions shall be deemed to specifically include, but not be limited to, the following:
acts or omissions of Customers or third parties; operation of safety devices except when such
operation is caused by the negligence of the Board; absence of an alternate supply of service;
failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or
equipment when the Board has carried on a program of maintenance consistent with the general
standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire;
riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by
governmental or military authorities.
Notwithstanding any other provision of these rules, the Board may interrupt or limit steam service
to Customers without prior notice and in a manner that appears most equitable under the
circumstances then prevailing or as necessary to protect the health, safety and welfare of its
employees or Customers. The Board shall be under no liability with respect to any such
interruption or limited supply.
2. Description of Service
A. Availability of Service
(1) Saturated steam service is available twelve(12)months a year to Customers in the City
of Lansing except where the Board has determined it to be impractical to serve.
(2) Low pressure steam service at pressures less than 15 pound per square inch (psig) is
available where distribution mains are installed in a large portion of the downtown
area. The pressure varies according to location, load conditions and ambient
temperature,but generally is between 5 and 12 psig at building Service Valves.
(3) Medium pressure steam service at pressures exceeding 15 psig is available in some
portions of the service area. The pressure usually is 75 psig at building Service Valves
but may vary from 25 psig to 125 psig according to location and load conditions.
(4) High pressure steam service at pressures up to 275psig is available in some portions of
the service area.
(5) Steam service is not available where the Board must bring the Customer Steam Service
across another parcel or lot in order to provide service.
(6) In the case where there is more than one Steam Main capable of providing service, the
Board shall determine which Steam Main will be used for service and the location of
the Customer Steam Service connection.
Approved: 05/27/2008 Page 6 of 28
Effective: 07/01/2008
WATEwATEERR&LL16HT Lansing Board of Service Conditions
Water and Light Steam Rule and Regulation 3
B. Agreements
The Board shall require the Customer to enter into a written agreement that details the
terms and conditions and price to be paid by the Customer prior to steam service
construction.
In addition, the Board may negotiate written contractual arrangements as to the provision of
necessary service Facilities, duration of service, amount of deposit and refunds thereon,
minimum bills or other service conditions for Customers or prospective Customers whose
load requirements exceed the capacity of the available distribution system in the area or
whose load characteristics or special service needs require unusual investments by the
Board in service Facilities or where there is not adequate assurance of the permanent use of
the service.
The Board may charge a Connect Fee when the Customer request the service to be made
active outside normal business hours as specified in Rule 13.
No promises, agreements or representations of any agent or employee of the Board shall be
of binding force upon the Board unless the same is within the authority of that individual
and incorporated in the written agreement.
C. Material Availability
Subject to the restrictions contained in Rule 3.2.A, the Board will construct steam
distribution Facilities and extensions only in the event it is able to obtain or use the
necessary materials, equipment and supplies. The Board may, in its discretion, allocate the
use of such materials, equipment and supplies among the various classes of Customers and
prospective Customers of the same class.
Approved: 05/27/2008 Page 7 of 28
Effective: 07/01/2008
warE® Lansing Board of Use of Service
10Water and Light Steam Rule and Regulation 4
Use of Service
1. General
Saturated steam is supplied to a Customer for exclusive use on the Premises to which it is delivered
by the Board. Service may not be shared with another, sold to another, or transmitted off the
Premises without the written permission of the Board, except as noted in Rule 6.
Use of steam is only for the purposes authorized by the Board and is not to be extended to another
building without authorization of the Board.
2. Access and Damages
The Customer shall provide and maintain appropriate access and working space around steam
Facilities in accordance with all applicable Board standards so as to permit ready and safe operation
and maintenance of such Facilities.
The Board's authorized personnel or agents of the Board shall have access to the Customer's
Premises at all reasonable hours for all purposes necessary to conduct business, including without
limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) install, operate and
maintain other Board equipment or Facilities, and 3) inspect service installations, Customer Piping,
and to determine the connected steam Demand. If the meters, metering equipment or other Board
property are damaged or destroyed through the neglect of the Customer, the cost of necessary
repairs or replacements shall be the responsibility of the Customer.
If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make
inspection, including but not limited to, reasons such as Premises being locked, meter being
inaccessible or unsafe conditions, then after due written notice to the Customer, the steam service
may be disconnected until such time as arrangements have been made to permit access for Board
inspection and approval and the Customer has paid the appropriate reconnection fee as stated in
Rule 13.
3. Customer Piping and Equipment
The Board may deny or terminate service to any Customer whose Customer Piping or equipment
constitutes a hazard to the Board's employees, equipment or its service to others. However, the
Board is not responsible to inspect Customer Piping or equipment and shall not be held liable for
any injury or damage resulting from the condition thereof.
The Customer shall install and maintain the necessary facilities or devices to protect Customer
owned equipment against service interruptions and other disturbances on the Board's system.
Alterations to the Customer Steam Service or associated equipment are prohibited without approval
of the Board.
4. Steam Quality and Disturbances
The Customer shall operate equipment in a manner that does not cause surges, water hammer or
other problems in the Steam Distribution System or to other Customers. If the Board notifies the
Customer of such a condition, the Customer shall discontinue operation of equipment causing such
condition until a correction has been made.
Approved: 05/27/2008 Page 8 of 28
Effective: 07/01/2008
WATEER&_UGHT Lansing Board of Use of Service
Y: -
Water and Light Steam Rule and Regulation 4
5. Improper Use and Tampering
Any person that uses steam without making proper application for steam service shall be
responsible for all charges for steam service. The amount of such charges shall be determined by
the Board either by meter readings or on the basis of calculated consumption for the time steam was
used.
If steam is being used by a Customer without proper application for service or steam service
connection, the Board may discontinue service without notice. In case of such discontinuance of
service, the Board shall restore service only after the Customer has paid the reconnection fee as
stated in Rule 13
The Board may discontinue service and seek criminal charges, if it is determined that the meter or
piping on the Customer's Premises has been tampered with or altered in any manner to steal steam.
If the Board discontinues service for this reason, the Board shall restore service only after the
Customer has paid the reconnection fee as stated in Rule 13, made appropriate restitution for stolen
service and made provisions for metering and/or piping changes as may be required by the Board.
6. Discontinuation of Service
A. Service may be voluntarily or involuntarily disconnected.
(1)Voluntarily
Service may be voluntarily disconnected per the Customer's request. The BWL
recommends that the Customer or the Customer's representative be present for the
disconnection to ensure complete shutoff. It can be difficult for the BWL to confirm that
the service have been completely turned off if there is no one present at the premises
during the shutoff. The Customer is responsible to advise the BWL if the shutoff was not
entirely effective.
(2) Involuntary
Service may be involuntarily disconnected in the following instances:
(a) Noncompliance with applicable Rules and Regulations;
(b) Noncompliance with Municipal, State and or Federal law; or
(c) Issuance of a Court Order
Approved: 05/27/2008 Page 9 of 28
Effective: 07/01/2008
WATE-BHT Lansing Board of Metering
Water and Light Steam Rule and Regulation 5
Metering
1. General
All steam sold to Customers shall be measured by commercially acceptable measuring devices owned
and maintained by the Board except where it is impractical to meter, such as for temporary or special
installation, in which cases the consumption may be calculated.
If for any reason all the steam used cannot be registered accurately as condensate, the unmetered
portion shall be estimated by the Board on the basis of prior consumption or the operating
characteristics of the building and equipment.
2. Sizing/Installation/Ownership
A meter-set consisting of a gate valve, strainer, union, master trap and condensate meter shall be
installed at the termination of the building's condensate piping system.
The Customer shall furnish and install the gate valve, strainer, union and master trap according to the
Board's specifications and standards.
The Board shall furnish the condensate meter for installation by the Customer.
The Board shall own and maintain the gate valve, strainer,union,master trap and condensate meter.
The Board may furnish more than one meter for installation by the Customer, depending upon the
total capacity needed, the system arrangement, or the number of Customers in the building.
3. Equipment Location
A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the
Board for the installation of the necessary metering equipment. The Customer shall furnish
the space and the provisions for mounting metering and service equipment to meet Board
requirements. Inquiries regarding installation requirements should be directed to the Board's
System Integrity& Customer Projects Department.
B. The Customer shall locate metering equipment and master trap inside the building served in a
well ventilated area with ample space for meter reading and maintenance.
C. The Customer shall not place the meter in a pit below floor level, a rest room or on a platform
higher than thirty (30) inches above the floor unless Board approved steps and platform are
installed.
D. The Customer shall fiumish a substantial, level, concrete, metal or wood support for the meter
setting with enough space for the outlet piping and at least two (2) feet of unobstructed space
directly above the meter. The elevation of the meter support shall not be less than eighteen
(18)inches and not more than thirty(30) inches above the floor.
4. Damaged Meter
The Customer shall be held liable for damage to the meter from acts of carelessness, negligence or
willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost
shall be billed to the Customer.
Approved: 05/27/2008 Page 10 of 28
Effective: 07/01/2008
wATE Lansing Board of Application of Rates
Water and Light Steam Rule and Regulation 6
Application of Rates
1. General
Steam Rates are predicated upon the Board not being required to provide not more than one
Customer Steam Service to a building or structure. The Board shall separately meter and separately
bill service at different points or at different buildings or strictures unless specifically provided for
in the applicable Rate Schedule.
2. Resale
The owner or operator of an office building, apartment building, shopping mall, or similar stricture
may purchase steam from the Board for resale to occupants on the condition that service to each
occupant shall be metered separately and that the occupants may not be charged more for such
service than the appropriate Rate of the Board available for similar service under like conditions. In
order to qualify for resale to tenants, the owner or operator must state in writing their intent to resell
in the application for service. The owner or operator shall be responsible for payment of purchased
steam for resale as required by Rule 7.
The Board shall have no obligation to furnish, test or maintain meters or other facilities for the
resale of service by the reselling owner or operator to the occupant.
Billing records of the owner or operator may be audited once every 12 to 18 month using generally
accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an
independent auditing firm approved by the Board. The reselling owner or operator shall be assessed
a reasonable fee for an audit conducted by the Board.
The owner or operator providing the resale shall be responsible for testing of each occupant's meter
at least once every 3 years. The accuracy of such meters shall be maintained within 2%. Meters
shall be tested only by outside testing services or laboratories approved by the Board.
A record of each meter, including testing results, shall be kept by the reselling owner or operator
during the use of the meter and for an additional period of one year thereafter. When requested, the
reselling owner operator shall submit certified copies of the meter test results and meter records to
the Board.
The reselling owner or operator shall render a bill once during each billing month to each of the
occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered
by the reselling owner or operator shall specify the following information; The Rate Schedule title,
the due date, the beginning and ending meter reading of the billing period and the dates thereof; the
difference between the meter readings; the amount due for services and/or commodity use, as
applicable to the Rate; subtotal before taxes, sales tax, other taxes where applicable; the amount due
for other authorized charges; and the total amount due. The due date shall be 21 days from the date
of rendition. The reselling owner operator shall be responsible for all collections and payment
disputes for resale occupants.
The reselling owner or operator shall supply each occupant with a steam system adequate to meet
the needs of the occupant with respect to the nature of service, pressure, and other conditions of
service.
Approved: 05/27/2008 Page I 1 of 28
Effective: 07/01/2008
WATER R&LIGH 10Lansing Board of Application of Rates
Water and Light Steam Rule and Regulation 6
If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the
appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is
not resolved,the Board may declare the reselling owner or operator in violation of Rule 2.
3. Choice of Rates
In some cases, the Customer may be eligible to take service under any one of two or more Rates.
Upon request, the Board will advise the Customer in the selection of the Rate that will provide the
lowest cost of service, based on the best available information, but the responsibility for the
selection of the Rate shall be the sole responsibility of the Customer.
After the Customer has selected a Rate, the Customer may not change from that Rate to another
Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rile by
temporarily terminating service. The Board may waive the provisions of this paragraph where it
appears that a change of the Rate is necessary for permanent rather than temporary or seasonal
advantage. The intent of this rule is to prevent frequent changes from Rate to Rate.
The Board shall not be responsible to refund the difference in charges under different Rates
applicable to the same class of service, unless the Board provided an incorrect initial service turn-
on Rate setting or unless the Customer makes a written request and has a permanent change in load
profile. Any refiind is subject to Board approval.
4. Billing
Customers having more than one meter shall have consumption computed by individual meter in
accordance with the current Rate Schedule.
5. Minimum Charges
A minimum charge,as defined by the Rate in effect, shall be applied to all services and billed to the
Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate
the service by any appropriate means, including without limitation, removing the meter and by
disconnecting the service from the Board's Steam Distribution System.
6. Property Owner-Rental Agent Agreement for"Leave On" Service
The BWL may waive application charges to maintain continuity of service at rental property
locations provided: (1) the landlord agrees in writing to assume the responsibility for steam service
during the interim between tenants, and (2) the landlord is in compliance with all other rules and
regulations of the Board.
Approved: 05/27/2008 Page 12 of 28
Effective: 07/01/2008
WATE'—Ash Lansing Board of Responsibility for Payment of Bills
Water and Light Steam Rule and Regulation 7
Responsibility for Payment of Bills
1. General
Each Board Customer is responsible to pay all utility bills as rendered on or before the due date
shown thereon. The Customer remains responsible for payment of the bills until the Customer orders
service to be discontinued and the Board has had reasonable time to secure a final meter reading.
Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately
fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if
paid on or before the due date on the bill. Failure on the part of the Customer, through no fault of the
Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the
bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have
the right to discontinue service.
In extenuating circumstances, a Customer will be afforded the opportunity to make payment
arrangements.
Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has
requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of
bills that are not in dispute.
The Board may also require individual Customers to enter into a written `Billing Service
Agreement," insuring that the Customer is responsible for all services used and rendered.
The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 13 for returned checks.
2. Estimated Consumption
Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills
rendered on estimated consumption have the same force and effect as bills rendered on actual meter
readings.
3. Billing Errors
A. When an error is found to exist in the billing rendered to a Customer, the Board will correct
such error to recover or refund the difference between the original billing and the corrected
billing. Corrected billings will not be rendered for periods in excess of three (3) years from
the date the error is discovered. Refunds to Customers will normally be made promptly upon
discovery of the error. Amounts due the Board from the Customer will be subject to normal
collection policy and procedures.
B. When an error is found to exist in the billing of a contract or service agreement with or
governing the Customer, the Board will correct such error to recover or refund the difference
between original billing and the corrected billing. Corrected billings will not be rendered for
periods in excess of three (3) years from the date the error is discovered. Refunds to
Customers will normally be made promptly upon discovery of the error. Amounts due the
Board from the Customer will be subject to normal collection policy and procedures.
Approved: 05/27/2008 Page 13 of 28
Effective: 07/01/2008
WATE® Lansing Board of Responsibility for Payment of Bills
Water and Light Steam Rule and Regulation 7
4. Account Security Deposits
The Board shall require an account security deposit from any new or existing Customer with an
unacceptable credit history with the Board.. The Board shall apply different rules to new Customers
signing up for service in accordance with Rule 7.4.CB. The deposit is normally 2 times the average
monthly bill (actual or estimated) as determined by the Board and shall be applied according to Rule
13. Security Deposits shall be administered in accordance with Custome Service established
Standards and Guidelines
The Board may waive deposits in special circumstances. The Board may also demand deposits larger
than 2 times the average monthly bill if the Board determines that a Customer presents a higher than
normal credit risk.
A. Unacceptable credit history includes but is not limited to the following:
(1) The Customer has deliberately misinformed or misrepresented facts to the Board.
(2) The Customer misrepresents their identity.
(3) The Customer fails to provide positive identification at the time of applying for service.
(4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in
the past 6 years.
(5) The Customer has had one or more payments canceled in the last 12 months due to: (1) non-
sufficient funds returned check, (2) account closed returned check, (3) non-sufficient fiords
bank bill, (4) account closed bank bill, (5) credit card reversal, (6) or other payment method
cancellation.
(6) The Customer has a prior account that is delinquent within the last 6 years.
B. New Customers may not be required to submit a deposit,in any of the following situations:
Residential Customers
(1) The Customer has no service history with the Board and has been permitted into the Good
Faith Deposit Program in accordance with Customer Service established Standards and
Guidelines.
(2) The Customer has previously established an acceptable payment history with the Board on a
similar account.
(3) The Customer's bill is paid by a governmental agency.
(4) The Customer secures a guarantor; the guarantor has an acceptable payment history.
(5) The Customer provides an acceptable surety bond.
(6) The Customer provides an acceptable credit reference letter from a similar utility company
for a similar account. Account must have been in the Customer's name and maintained for a
minimum of 12 consecutive months.
Commercial and Industrial Customers
(1) The Customer has previously established an acceptable payment history with the Board on a
similar account.
(2) The Customer's bill is paid by a governmental agency.
(3) The Customer secures a guarantor; the guarantor has an acceptable payment history.
(4) The Customer provides an acceptable surety bond.
Approved: 05/27/2008 Page 14 of 28
Effective: 07/01/2008
WATE"-TIGHT Lansing Board of Responsibility for Payment of Bills
ImWater and Light Steam Rule and Regulation 7
(5) The Customer provides an acceptable credit reference letter from a similar utility company
for a similar account. Account must have been in the Customer's name and maintained for a
minimum of 12 consecutive months.
The Board will refund deposits to all Customers who have taken service for 12 months and have an
acceptable payment history. The Board will also refund deposits to Customers who have voluntarily
terminated service and paid all charges due.
The Board will pay simple interest accrued on Account Security Deposits held. No interest will be
paid until the deposit is returned to the customer. The interest rate will be updated on July 1 of each
year. The interest rate used to calculate interest will be the sum of the Federal Funds rate in effect on
the last day of March of the current year phis.25%.
Approved: 05/27/2008 Page 15 of 28
Effective: 07/01/2008
WATER IGHT Lansing Board of Dispute and Hearing Procedure
MAWater and Light Steam Rule and Regulation 8
Dispute and Hearing Procedure
1. Disputes
In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute
and hearing process for its Customers as follows:
A. When any Customer disputes a bill or service and the Board is so advised in writing, the date of
the notice of dispute will be recorded.
B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer
has requested a hearing, pending results of the hearing. Service may be discontinued for
nonpayment of bills that are not disputed.
C. The disputed bill or service will be investigated promptly and completely.
D. The Customer will be advised of the results of the investigation.
E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties.
F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement
agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute.
G. If a settlement cannot be reached between the Customer and the Board's Account Administrator,
the Customer may choose to appear before the Board's Dispute Review Committee. The review
will be scheduled within ten(10)days of the request or as mutually agreed to by both parties.
H. If a settlement cannot be reached following examination by the Dispute Review Coni,:ruittee, the
account will be referred to the Board's General Manager.
I. If a settlement is not reached after review by the Board's General Manager, the Customer shall be
afforded an opportunity for a hearing.
J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered
which are not in dispute.
2. Hearings
A. Any Customer who disputes the services provided or a billing for services fiimished in
accordance with the Board's filed Rates, Rules and Regulations or established policies or
procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the
request must be made within ten (10) calendar days following the final outcome of the dispute
process. Any request for a hearing may be made in writing and received by the Board's corporate
office at 1232 Haco Drive,Lansing,Michigan,48912.
B. On receipt of a request for a hearing, the Board will forward this request to an independent
Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the
Customer and the Board of the date, time and location in writing. The hearing will be scheduled
during normal business hours. Failure of the Customer or Board to attend the hearing without
due cause or prior request for adjournment will constitute a waiver of right of that party to the
hearing.
C. The Board and the Customer shall:
(1) Have the right to be represented by Counsel or other persons of their choice.
(2) Have the right to present evidence, testimony and oral and written argument.
(3) Have the right to cross-examine witnesses appearing on behalf of the other party.
Approved: 05/27/2008 Page 16 of 28
Effective: 07/01/2008
WATER Lansing Board of Dispute and Hearing Procedure
.us Water and Light Steam Rule and Regulation 8
(4) Have the right to have the hearing recorded by a court reporter at the expense of the
Customer. The Hearing Officer shall also have the right to have the hearing recorded by a
court reporter. Recordings will be preserved at least six (6) months from the date of the
hearing. All evidence relevant to the dispute will be received.
D. For each hearing, the Hearing Officer shall compile a hearing record which will contain;
(1) A concise statement in writing of the position of the Board in relation to the dispute.
(2) A concise statement in writing of the position of the Customer in the dispute.
(3) Copies of all evidence submitted by the parties.
E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both
parties. If the Hearing Officer does not reach a decision during the hearing, additional time will
be allowed to reach a decision. When a decision has been reached, either at the hearing or later,
the Hearing Officer will prepare a report which shall contain the following:
(1) A concise summary of the evidence and argument presented by the parties.
(2) The decision and a statement that the decision of the Hearing Officer was based solely on
the evidence presented and reasons therefore.
(3) Advise that the representatives of the Board and the Customer have a right to file an appeal
with the Board of Commissioners.
.(4) A statement as to any settlement agreement.
(5) A statement that the dispute determination is binding on both parties unless appealed to the
Board of Commissioners within ten(10) days of the date of mailing of decision,and that any
request for appeal must be in writing to the Corporate Secretary.
F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor
of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail.
G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make
recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will
arrange a time for the appeal and advise both the Customer and the Board of the date, time and
location in writing. Failure of the Customer to appear at the time set for the appeal without due
cause, or to request an alternate date,will constitute a waiver of right to appeal.
H. The Board of Commissioners shall report its final action on any unresolved disputes together with
the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing,
Michigan.
I. The Mayor may make recommendations to the Board of Commissioners on each unresolved
dispute.
Approved: 05/27/2008 Page 17 of 28
Effective: 07/01/2008
WATE-IGHT Lansing Board of Distribution System Extensions
INWater and Light Steam Rule and Regulation 9
Distribution System Extensions
1. General
A. Request for Distribution System Extension
Rule 9 sets forth the conditions under which the Board will extend its Steam Distribution
System.
B. Ownership
The Board shall provide, own, maintain and specify all of its distribution Facilities
including location. No ownership rights to Board Facilities shall pass to any owner(s),
developer(s), or Customer(s)by reason of any contribution required hereunder.
C. Availability of Distribution System Extension
The Board shall in its sole discretion determine whether or not any particular Steam
Distribution System extension shall be made, regardless of its intended use, and establish
any special conditions or requirements that may apply, including but not limited to
entering into an agreement with a developer,property owner(s) or Customer.
Steam Distribution System extensions are generally available throughout the steam service
area if the requested service will not disturb or impair service to prior users and is within
or contiguous to areas presently served.
D. Installation of Distribution System Extension
All Steam Distribution System extensions shall be installed by the Board or its agent.
Steam Distribution System extensions shall be installed in public right-of-way except in
certain cases where, at the Board's discretion, they may be installed in dedicated
recordable easements on private property at no cost to the Board.
The Customer shall provide the Board a final preliminary approved site plan for Board
review and approval.
Installation of a Steam Distribution System extension will be initiated provided:
(1) The Customer has entered into a written agreement with the Board for the
construction of the Steam Distribution System extension.
(2) The Customer has paid any deposits as required by Rule 7.4 and Rule 12 for the
Steam Distribution System extension and any required system reinforcement.
(3) Where applicable, the Customer has recorded the plat or final preliminary approval
has been received, monuments or markers are in place, lot lines staked, sewers
installed, streets at finished grade (before gravel and curb and gutter installation),
sidewalk grading completed, and the ground in workable condition.
(4) Construction during the winter season will only occur at the Board's discretion.
E. Adequate Temperature,Pressure and Flow Capacity
The Board shall not make Steam Distribution System extensions unless adequate
temperature, pressure and flow capacity is available at the location of the Steam
Distribution System extensions as determined by the Board.
Approved: 05/27/2008 Page 18 of 28
Effective: 07/01/2008
WATER LIGHT i Lansing Board of Distribution System Extensions
MAWater and Light Steam Rule and Regulation 9
Where a Steam Distribution System reinforcement is required to provide adequate
temperature, pressure and flow capacity at the location of the Steam Distribution System
extension, the Customer shall bear the cost of such Steam Distribution System
reinforcement in accordance with Rule 12.
F. Economic Development Offsets
Where the Board determines that the Steam Distribution System extension will promote
development that provides substantial and sustainable economic benefits to its Customers
or the Lansing region, the Board will consider an offset to its fees and charges and/or an
economic incentive subject to its availability.
G. Easements and Tree Trimming/Removal Permits
Where the Board has agreed to construct the Steam Distribution System extension in an
easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall
be required to furnish, at no expense to the Board, recordable easements in a form
satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress,
egress and the installation and maintenance of the Steam Distribution System extension
including any Steam Distribution System equipment as designed by the Board for present
and future service. The owner, developer, or Customer shall also, in a form satisfactory to
the Board, grant the Board permission to trim and remove trees as necessary to protect the
integrity of its distribution system and the safety and welfare of its employees and the
public.
In the event the required easements and tree trimming and removal permits are not
provided by the owner(s), developer(s) or Customer(s) for such extension, the Board may
elect to construct all or any part thereof along public highways or other private property.
In such event, the Board may require the owner(s), developer(s) or Customer(s) to pay the
added construction expense occasioned by the use of such highways or other private
property, plus any expense encountered in acquiring permits and easements on other
private property when necessary to provide service to the owner(s), developer(s) or
Customer(s).
H. Non-Standard Equipment
Where the Customer requests that the Board utilize equipment which differs from its
normal specifications, purchased or installed, the Board may elect to provide such non-
standard equipment with the Customer paying any additional cost.
I. Non-Standard Construction
Where, in the Board's judgment, practical difficulties exist such as unexpected
governmental requirements, frost or wet conditions, contaminated soil, rock within the
excavation surface, or where it is necessary to deviate from the Board's approved
construction standards or established distribution system design, the Board may require
the Customer to pay for the additional cost resulting therefrom.
J. Other Facilities
It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and
provide locations of any existing privately owned underground facilities such as lawn
sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc.
If privately owned facilities are not properly located, the Board does not assume
responsibility for any damage to these facilities.
Approved: 05/27/2008 Page 19 of 28
Effective: 07/01/2008
WATE�HT Lansing Board of Distribution System Extensions
10Water and Light Steam Rule and Regulation 9
K. Construction Date of Distribution System Extension
The Board, based on availability of work crews and material, and subject to approvals of
the appropriate regulatory agencies, utilize best efforts in constructing the Steam
Distribution System extension to meet a mutually agreed upon date.
2. Steam Facility Relocations and Removals:
(1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board
Standards, the Board will relocate or remove its steam Facilities provided:
A. The relocation or removal is feasible and meets Board Standards.
B. The Customer or developer obtains approval from all Customers impacted by the
proposed relocation.
C. The relocation or removal does not degrade steam reliability or quality.
D. All governmental approvals,permits and easements are obtained.
Prior to any relocation or removal of steam Facilities, the Customer or developer shall be required
to make a nonrefundable contribution in aid of construction. The aid in contribution of
construction shall reimburse the Board for all relocation and removal costs including material,
labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing
lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 9, plus the cost
of any necessary modifications to the Board's Steam Distribution System affected by the
relocation or removal, less the salvage value of any portion of the steam Facilities removed.
(2) If, at any time subsequent to completion of the Steam Distribution System extension, it is found
that Steam Mains or related Facilities are not at the correct location or at the proper elevation due
to changes beyond the control of the Board, the Customer or developer shall reimburse the Board
to relocate Steam Mains or related Facilities to the correct location or at the proper elevation.
Approved: 05/27/2008 Page 20 of 28
Effective: 07/01/2008
WATER LL�GHT Lansing Board of Services
Im Water and Light Steam Rule and Regulation 10
Services
1. General:
The Customer Steam Service shall be furnished, installed, owned and maintained by the Board.
In the course of maintaining or repairing a Customer Steam Service, the Board shall bear no
responsibility for damage incurred or restoration to areas where the Customer Steam Service
passes under any area not readily accessible. The Customer shall be responsible for additional
repair costs due to these encumbered services.
The Service Location shall be specified by the Board and shall be located so that the Board's
service Facilities meet or exceed all clearance requirements and applicable local codes.
Should it become necessary for any cause beyond the Board's control to change the Service
Location, the entire cost of any changes in the Customer's service shall be the responsibility of
the Customer.
Should it become necessary for the Board to reinforce or upgrade the Steam Distribution System
to accommodate the requested service, a nonrefundable contribution in aid of construction may be
required as determined by Rule 12.
2. Steam Service:
A. General
All steam supplied shall be condensed and piped to a condensate meter except where Board
approval is given for reasonable or unavoidable exceptions such as humidifiers, steam tables,
pressing equipment, cooking equipment, etc.
A plot plan showing the proposed building size, location of service entrance and steam equipment
to be supplied shall be submitted to the Board's System Integrity & Customer Projects
Department for all service requests.
Customer Steam Services shall be installed from the Steam Main to the Customer's building in
the most direct manner. The pipe comprising the connection shall cross only that legally
described property upon which the building to be serviced is located.
It is the intent of the Board that all underground steam pipes be installed and maintained by the
Board. However, where unusual or special circumstances exist, the Customer may request
approval to install underground steam pipes. Applicants shall submit plans and specifications to
the Board's System Integrity&Customer Projects Department for approval prior to installation.
No person other than an authorized employee of the Board shall open or close the outside valve
on the Customer Steam Service. No person except an authorized Board employee shall tap,
revamp or connect to a Steam Main or any of the pipes comprising the Customer Steam Service.
Approved: 05/27/2008 Page 21 of 28
Effective: 07/01/2008
WATE�GHT Lansing Board of Services
so Water and Light Steam Rule and Regulation 10
B. Customer Connections to Board Facilities
It shall be the Customer's responsibility to connect Customer Piping to the Customer Steam
Service or meter-set. All work shall be in full compliance with all Board standards and
applicable codes.
The Customer shall install a Service Valve to control the entire steam supply to the building.
This valve shall be installed within one foot of the outlet side of the Board's Service Valve and
shall have ready access.
The Customer shall not connect to the Customer Steam Service except at the outlet side of the
Board Service Valve.
C. Customer Steam Piping
(1) General
The Customer shall provide at least one automatic float type air vent for all systems except
vacuum systems. The best location sometimes is in the condensate main.
No Customer Piping shall depend upon the master trap for steam trapping or vent for air
removal, except a single zone,one pipe, direct steam system.
Customer Piping served with medium or high pressure steam shall be equipped with a
pressure regulator, including a three valve by-pass and with a pressure relief valve. The relief
valve shall have a capacity rating equal to the rating of the regulator, it is to be an ASME
approved type, and shall discharge to the outside of the building or to a space in the building
where little or no damage will occur if the valve operates. The proper relief setting depends
upon the characteristics of the system.
The Customer shall make sufficient provisions for the support, grade expansion, and
contraction of pipe near the service connections.
(2) Service Riser or Header Piping
The total length of Customer's service riser or header piping shall be kept to a minimum, but
in no case shall the length exceed twenty (20) feet from the Board's Service Valve. A
gooseneck is required from the top of all service risers unless the grade of the service from
the top of the riser to the first branch connection exceeds one diameter of the pipe.
All service risers and header piping graded to the street main shall be insulated with at least
one inch(I")thick standard pipe insulation.
When more than one Customer is supplied from a single service, each Customer's branch
connection shall have a valve for controlling his service. Each Customer will be supplied and
metered independently, and access shall be provided to each individual Service Valve. The
risers or branch connections to the individual Customer's valve shall be as short as
practicable. When the length of the common header pipe exceeds twenty (20) feet the
condensate shall be piped to a master trap and meter and the steam consumption assigned to
the building owner or an occupant by the owner.
Approved: 05/27/2008 Page 22 of 28
Effective: 07/01/2008
WATE—LI HT Lansing Board of Services
Water and Light Steam Rule and Regulation 10
(3) Automatically Operated Valves
Systems having an automatically operated valve which regulates the steam supply for more
than one-third of the total installed capacity of space heating, space cooling, or domestic
water heating shall be equipped with an adequately sized three valve by-pass around the
automatic valve; unless the valve has a dependable, rapid, manual opening feature. The
steam trap which serves the equipment shall also be equipped with a three valve by-pass.
(4) By-Pass Valves
All by-pass valves will be sealed in the closed position and shall not be operated except in
emergencies. The Board's System Integrity & Customer Projects Department shall be
notified any time a sealed by-pass valve is opened.
D. Installation and Maintenance of Steam Services
Installation of a steam service will be initiated provided:
(1) The Customer has provided the Board a final preliminary approved site plan for Board
review and approval.
(2) The Customer has entered into a written agreement with the Board for the construction of
the steam service.
(3) The Customer has paid any deposits as required by Rule 7.4 and Rule 12 for the steam
service.
(4) Where applicable, the Customer shall have the plat recorded or final preliminary approval
received, monuments or markers in place, lot lines staked, sewers installed, streets at
finished grade (before gravel and curb and gutter installation), sidewalk grading
completed, and the ground in workable condition.
(5) Construction during the winter season will only occur at the Board's discretion.
Where, in the Board's judgment, practical difficulties exist such as unexpected governmental
requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or
where it is necessary to deviate from the Board's approved construction standards or established
distribution system design, the Board may require the Customer to pay for the additional cost
resulting therefrom.
The Customer shall be responsible for additional repair costs due to encumbered Customer Steam
Services or damage as a result of negligence, willful damage or carelessness by the Customer,
owner or tenants.
3. Steam Facility Relocations and Removals:
The Board will relocate or remove its steam Facilities in accordance with Rule 9.2.
Approved: 05/27/2008 Page 23 of 28
Effective: 07/01/2008
WATER R� Lansing Board of Condensate and Traps
Im Water and Light Steam Rule and Regulation 11
Condensate and Master Trap
1. General
The only approved piping system consists of a single master trap and meter combination to serve an
entire building.
Systems designed for more than one master trap and meter combination in different parts of a
building shall not be installed unless written approval has been obtained from the Board.
Condensate disposal shall be the responsibility of the property owner once it passes through the
Board's meter.
All piping shall be supported so that none of its weight depends on the meter or master trap, except
when the pipe length between the two is three(3) feet or less.
2. Condensate
The Customer shall provide a condensate piping system in accordance with the following.
(1) Pipes carrying condensate from the entire system supplied by each Customer's Service Valve
shall be connected to a single pipe ahead of the master trap assembly or the pump receiving
tank.
(2) Provide a readily accessible screwed cap or plug and a valve slightly above and at each end of
every concealed portion of piping or wherever leakage or the effects of leakage will not be
obvious. Use copper or other non-ferrous pipe, without joints if practicable, for such piping.
(3) When sections of the condensate piping depend on a water column to move the condensate,
air loops or automatic vents ahead of the flooded portion shall be provided.
(4) Unrestricted gravity flow, without pockets or lifts, should be provided wherever practicable.
Unavoidable flooded portions, such as loops around doorways, are to be copper or other non-
ferrous pipe. Where lifts are unavoidable, the maximum amount of lift to the master trap
shall be determined by the characteristics of the system and approved by the Board before
installation.
(5) Sufficient drainage capacity shall be provided at the meter outlet to allow for gravity
discharge at the maximum rate of condensate flow. Extend a short drain pipe riser loosely
around the smaller meter outlet nipple wherever extension of the drain pipe is necessary to
reach a floor drain or sewer. (The Board may strap the outlet piping to the meter support).
3. Master Trap
For low, medium and high pressure systems except those equipped with a pump and surge tank, the
Customer shall install a steam master trap ahead of the meter. The Customer shall in accordance with
Board standards furnish and install the valve, strainer, and union just ahead of the trap inlet, and a
union close to the trap outlet if the trap is not close to the meter inlet union. The trap may be at any
convenient readily accessible location between the meter and the last branch connection into the
condensate main.
Capacity of the master trap, or traps, as rated by the Manufacturer shall be at least equal to the
maximum condensate rate of the system at the maximum condensate (water column) pressure
available, without flooding equipment, provided that this maximum pressure is not more than 48
inches.
Approved: 05/27/2008 Page 24 of 28
Effective: 07/01/2008
WATER Lansing Board of Condensate and Traps
Water and Light Steam Rule and Regulation 11
4. Condensate (Surge)Tanks
The Customer shall provide a condensate (surge) tank instead of a master trap for systems which are
equipped with a condensate pump or a vacuum pump. The volume of the tank shall be at least equal
to the quantity of condensate discharged by the pump during two operations of the float-operated
switch.
The Customer shall also:
(1) Install a valve in the single gravity discharge pipe from the bottom of the tank to the meter if
the bottom of the tank is more than 12 inches above the meter inlet.
(2) Provide a short, open vent pipe at the top of the tank, independent of the condensate inlet
pipe. If the pump is a vacuum type, connect both the condensate and air discharge pipes to
the top of the tank, independently.
(3) Provide an emergency by-pass to a floor drain around the pump receiver.
5. By-pass Valve
The Customer shall in accordance with Board standards install a 3 valve by-pass around the master
trap for any system having a maximum load in excess of 2200 pounds per hour.
Approved: 05/27/2008 Page 25 of 28
Effective: 07/01/2008
wnre-"r Lansing Board of System Extension & Service Deposit
IM Water and Light Steam Rule and Regulation 12
System Extension & Service Deposit
1. General
When application is made for steam service which requires the extension of the Board's existing
Steam Distribution System, the Board will make such extensions when the estimated annual revenue,
probable stability of the load and prospective load growth reasonably warrant the capital expenditure
required.
2. Distribution System Extension and Customer Steam Service
The Board shall bear the cost of an extension of its existing Steam Distribution System and
installation of a Customer Steam Service up to one and one-half (1'/2) times the estimated annual
revenue from Customers to be immediately served.
Refunds
Steam Distribution System extension deposits made with the Board shall be subject to refund
without interest during the first five (5) twelve (12) month periods following the month in which
each such extension is completed. Refunds will only be made to person(s) making the deposit and
shall cease when they equal the amount deposited or at the close of the fifth twelve (12) month
period following the month during which the line extension is completed, after which the Board
shall have no further obligation to refund any remaining portion of the line extension deposit.
The Board will refund to the party making the deposit an amount equal to one and one-half(I%2)
times the estimated annual revenue for each additional new Customer who is furnished service
from such extension.
Reconciliation
If at the end of three (3) years from the date which the Board deems the Customer Steam Service
to be operational, the actual cost of the Steam Distribution System extension and Customer Steam
Service exceeds the sum of three (3) years actual operating income, plus the Customer's
contribution-in-aid to construction, the Customer shall pay the difference.
Approved: 05/27/2008 Page 26 of 28
Effective: 07/01/2008
WATE-LIGHT Lansing Board of System Extension & Service Deposit
so Water and Light Steam Rule and Regulation 12
3. Customer Steam Service Only
The Board shall bear the cost of the installation of a Customer Steam Service up to one (1) times the
estimated annual revenue from Customers to be immediately served.
Reconciliation
If at the end of one (1)year from the date which the Board deems the Customer Steam Service to
be operational, the actual cost of the Customer Steam Service exceeds the sum of one (1) year
actual operating income, plus the Customer's contribution-in-aid to construction, the Customer
shall pay the difference.
Approved: 05/27/2008 Page 27 of 28
Effective: 07/01/2008
WATE'�r Lansing Board of Schedule of Fees & Charges
Im Water and Light Steam Rule and Regulation 13
Schedule of Fees& Charges
STEAM FEES and CHARGES
Charge Description When Applied Charge
Security Deposits—Residential For all new customers unless waived by conditions S210
stated in Rule 7.
Security Deposits—Commercial& For all new customers unless waived by conditions 2 times average monthly bill
Industrial stated in Rule 7.
Connect fee 7:30 a.m.—5:30 pm weekdays No charge
After 5:30 pm on weekdays or weekends and $200
holidays
Reconnection fee
Non-pay or other(Normal hours) 7:30 a.m.—5:30 pm weekdays $80
Non-pay or other(Other than normal After 5:30 pm on weekdays or weekends and S200
hours) holidays
Any time S200
Meter Tampering
Missed Appointment,No Show,No After second occurrence,per occurrence $30
access Fee
Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $30
Charges other than those published Relocations,damages,etc. At cost
Approved: 05/27/2008 Page 28 of 28
Effective: 07/01/2008
WATE® Lansing Board of
Water and Light
Rules and Regulations
For
Chilled Water Service
Approved: 05/27/08
EFFECTNE: 07/01/08
WATER Lansing Board of Table of Contents
Water and Light
TABLE OF CONTENTS
PAGE
NUMBER
Definitions....................................................................................................................................................................4
GeneralProvisions.......................................................................................................................................................5
ServiceConditions.......................................................................................................................................................6
Characterof Service..................................................................................................................................................6
Descriptionof Service...............................................................................................................................................6
Availabilityof Service...........................................................................................................................................6
Agreements............................................................................................................................................................7
MaterialAvailability..............................................................................................................................................7
Useof Service...................................................................... .......................... ................................... .........................8
General......................................................................................................................................................................8
Accessand Damages.................................................................................................................................................8
CustomerPiping and Equipment...............................................................................................................................8
Chilled Water Quality and Disturbances...................................................................................................................8
ImproperUse and Tampering....................................................................................................................................9
Discontinuationof Service........................................................................................................................................9
Metering.....................................................................................................................................................................10
General....................................................................................................................................................................10
Sizing/Installation/Ownership.................................................................................................................................10
EquipmentLocation................................................................................................................................................10
DamagedMeter.......................................................................................................................................................10
Applicationof Rates..................................................................................................................................................11
General....................................................................................................................................................................11
Resale......................................................................................................................................................................11
Billing......................................................................................................................................................................12
MinimumCharges...................................................................................................................................................12
Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................12
Responsibilityfor Payment of Bills..........................................................................................................................13
General....................................................................................................................................................................13
EstimatedConsumption...........................................................................................................................................13
BillingErrors......................... .................................................................................................................................13
AccountSecurity Deposits......................................................................................................................................14
Disputeand Hearing Procedure...............................................................................................................................16
Disputes...................................................................................................................................................................16
Hearings...................................................................................................................................................................16
DistributionSystem Extensions................................................................................................................................18
General....................................................................................................................................................................18
Request for Distribution System Extension.........................................................................................................18
Ownership............................................................................................................................................................18
Availability of Distribution System Extension....................................................................................................18
Installation of Distribution System Extension.....................................................................................................18
Adequate Temperature,Pressure and Flow Capacity..........................................................................................18
EconomicDevelopment Offsets..........................................................................................................................19
Easements and Tree Trimming/Removal Permits...............................................................................................19
Non-Standard Equipment....................................................................................................................................19
Non-Standard Construction.................................................................................................................................19
OtherFacilities....................................................................................................................................................19
Construction Date of Distribution System Extension..........................................................................................20
Chilled Water Facility Relocations and Removals..................................................................................................20
Services.......................................................................................................................................................................21
General....................................................................................................................................................................21
Approved:05/27/2008
Effective: 07/01/2008
WATER R� Lansing Board of Table of Contents
Water and Light
ChilledWater Service..............................................................................................................................................21
General................................................................................................................................................................21
Customer Connections to Board Facilities..........................................................................................................22
CustomerChilled Water Piping...........................................................................................................................22
Installation and Maintenance of Chilled Water Services.....................................................................................22
Chilled Water Facility Relocations and Removals..................................................................................................22
SystemExtension&Service Deposit........................................................................................................................23
General....................................................................................................................................................................23
Distribution System Extension and Customer Chilled Water Service.....................................................................23
CustomerChilled Water Service Only....................................................................................................................23
Scheduleof Fees&Charges......................................................................................................................................24
Approved:05/27/2008
Effective: 07/01/2008
WATEER&— Lansing Board of Definitions
I= Water and Light Chilled Water Rule and Regulation 1
DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS
BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board
of Water and Light.
BTU- British Thermal Unit, the heat necessary to raise one pound of water one degree
Fahrenheit.
CHILLED WATER DISTRIBUTION SYSTEM — The system of Chilled Water Mains, pipes, fittings,
valves and all equipment and appurtenances thereto, necessary to distribute chilled water
to Customer Chilled Water Service.
CHILLED WATER MAIN—The pipes owned and maintained by the Board that conveys chilled water to
and from a Customer Chilled Water Service.
CUSTOMER— A purchaser of chilled water service supplied by the Board.
CUSTOMER PIPING—A piping system owned or controlled by the Customer that conveys chilled water
from the Service Location throughout the Customer's Premises.
CUSTOMER CHILLED WATER SERVICE—Those pipes, valves and appurtenances installed between
a Chilled Water Main and Customer Piping.
DEMAND— The rate of chilled water delivered at a given point in Tons of refrigeration.
FACILITIES— A general term which includes pipes, fittings, valves, associated structures and the like,
used as a part of or in connection with a chilled water installation.
PERSON— Any individual, corporation, partnership, company, limited liability corporation,
organization or governmental entity.
PREMISES— A building and its grounds.
RATE— The unit prices as established by the Board's rate-making body and the quantities to
which they apply as specified in the Rate Schedule.
RATE SCHEDULE—A filed statement of the chilled water Rate and the terms and conditions governing
its application as established by the Board's rate-making body.
RTU- Remote Telemetry Unit housing Board owned Chilled Water metering and monitoring
equipment.
SERVICE LOCATION — The point at which the Board has agreed to provide chilled water service to
Customer Piping.
SERVICE VALVES — The valves installed by the Board at the Service Location at the customers
property line.
TON- A unit of refrigeration. One Ton equals to 12,000 BTU/hr.
Approved:05/27/2008
Effective: 07/01/2008
WArEER&LIGHT Lansing Board of General Provisions
Water and Light Chilled Water Rule and Regulation 2
General Provisions
Copies of the Board's Rate Schedules for chilled water service are open to public inspection at
the Board's offices and are available on the Board's Internet Web site www.lbwl.com or upon
request. Application for original, modified or added service shall be made at the office of the
Board of Water and Light, Utility Services,at 730 East Hazel Street,Lansing.
Any Person receiving or agreeing to receive chilled water service from Board Facilities shall be
deemed a Customer of the Board subject to its Rates and these Rules and Regulations and
responsible for the service used whether such service is provided under a signed agreement or
not.
Chilled water service will not be supplied to new or remodeled buildings until such installations
comply with these Rules and Regulations.
The Customer should contact the Board's System Integrity & Customer Projects Department to
determine the characteristics of the chilled water service available at the Premises. The System
Integrity& Customer Projects Department will inform the Customer of the Board's requirements,
which must be fulfilled by the Customer,in order to receive chilled water service.
The Board may discontinue chilled water service to any Customer for any breach of the Board's
Policy, Rules and Regulations, Procedures or in accordance with law. The Customer must pay a
reconnection fee as stated in Rule 12 to cover the costs of restoring chilled water service that has
been discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in
accordance with law.
The Board will release customer information in accordance with written customer authorization
and Board policy
This document is intended to cover most situations where standardized policies and practices
have been established. No officer, agent or employee of the Board has authority to waive or
modify the provisions of this document unless specifically authorized to do so by the Board of
Commissioners. The Board of Commissioners may revise this document at any time and may
modify or suspend any portion of it temporarily or permanently.
Approved: 05/27/2008
Effective: 07/01/2008
WATE�HT Lansing Board of Service Conditions
Water and Light Chilled Water Rule and Regulation 3
Service Conditions
1. Character of Service
The Board produces and distributes chilled water for public use throughout its service area and
will endeavor, but does not guarantee, to furnish a continuous supply and to maintain chilled
water temperature and pressure within reasonable limits.
The Board shall not be liable for interruptions in the service including without limitation,
variations in the service characteristics, or for any loss or damage of any kind or character
occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such
causes or conditions shall be deemed to specifically include, but not be limited to, the following:
acts or omissions of Customers or third parties; operation of safety devices except when such
operation is caused by the negligence of the Board; loss of electrical power needed to operate the
Board's control valve, metering, and monitoring equipment; absence of an alternate supply of
service; failure, malfunction, breakage, necessary repairs or inspection of machinery,Facilities or
equipment when the Board has carried on a program of maintenance consistent with the general
standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire;
riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by
governmental or military authorities.
Notwithstanding any other provision of these rules, the Board may interrupt or limit chilled water
service to Customers without prior notice and in a manner that appears most equitable under the
circumstances then prevailing or as necessary to protect the health, safety and welfare of its
employees or Customers. The Board shall be under no liability with respect to any such
interruption or limited supply.
2. Description of Service
A. Availability of Service
(1) Chilled water service is available twelve (12) months a year to Customers in the City
of Lansing except where the Board has determined it to be impractical to serve.
(2) The Board will endeavor to deliver Chilled Water Service at a maximum supply
temperature not to exceed 44 degrees Fahrenheit.
(3) The Board will endeavor to deliver Chilled Water Service with maximum pressure not
to exceed 120 psig and minimum pressure of not less than 100 psig.
(4) Chilled water service is not available where the Board must bring the Customer
Chilled Water Service across another parcel or lot in order to provide service.
(5) In the case where there is more than one Chilled Water Main capable of providing
service, the Board shall determine which Chilled Water Main will be used for service
and the location of the Customer Chilled Water Service connection.
Approved:05/27/2008
Effective: 07/01/2008
WATER&LI- Lansing Board of Service Conditions
IN Water and Light Chilled Water Rule and Regulation 3
B. Agreements
The Board shall require the Customer to enter into a written agreement that details the
terms and conditions and price to be paid by the Customer prior to chilled water service
construction.
In addition, the Board may negotiate written contractual arrangements as to the provision of
necessary service Facilities, duration of service, amount of deposit and refunds thereon,
minimum bills or other service conditions for Customers or prospective Customers whose
load requirements exceed the capacity of the available distribution system in the area or
whose load characteristics or special service needs require unusual investments by the
Board in service Facilities or where there is not adequate assurance of the permanent use of
the service.
The Board may charge a Connect Fee when the Customer request the service to be made
active outside normal business hours as specified in Rule 12.
No promises, agreements or representations of any agent or employee of the Board shall be
of binding force upon the Board unless the same is within the authority of that individual
and incorporated in the written agreement.
C. Material Availability
Subject to the restrictions contained in Rule 3.2.A, the Board will constrict chilled water
distribution Facilities and extensions only in the event it is able to obtain or use the
necessary materials, equipment and supplies. The Board may, in its discretion, allocate the
use of such materials, equipment and supplies among the various classes of Customers and
prospective Customers of the same class.
Approved:05/27/2008
Effective: 07/01/2008
WATE- Lansing Board of Use of Service
IM Water and Light Chilled Water Rule and Regulation 4
Use of Service
1. General
Chilled water is supplied to a Customer for exclusive use on the Premises to which it is delivered
by the Board. Service may not be shared with another, sold to another, or transmitted off the
Premises without the written permission of the Board,except as noted in Rule 6.
Use of chilled water is only for the purposes authorized by the Board and is not to be extended to
another building without authorization of the Board.
2. Access and Damages
The Customer shall provide and maintain appropriate access and working space around chilled
water Facilities in accordance with all applicable Board standards so as to permit ready and safe
operation and maintenance of such Facilities.
The Board's authorized personnel or agents of the Board shall have access to the Customer's
Premises at all reasonable hours for all purposes necessary to conduct business, including without
limitation: 1) install, inspect, read, repair, maintain, test or remove its meters and fiber optics 2)
install, operate and maintain other Board equipment or Facilities, and 3) inspect service
installations, Customer Piping, and to determine the connected chilled water Demand. If the
meters, metering equipment or other Board property are damaged or destroyed through the neglect
of the Customer, the cost of necessary repairs or replacements shall be the responsibility of the
Customer.
If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make
inspection, including but not limited to, reasons such as Premises being locked, meter being
inaccessible or unsafe conditions, then after due written notice to the Customer, the chilled water
service may be disconnected until such time as arrangements have been made to permit access for
Board inspection and approval and the Customer has paid the appropriate reconnection fee as stated
in Rule 12.
3. Customer Piping and Equipment
The Board may deny or terminate service to any Customer whose Customer Piping or equipment
constitutes a hazard to the Board's employees, equipment or its service to others. However, the
Board is not responsible to inspect Customer Piping or equipment and shall not be held liable for
any injury or damage resulting from the condition thereof.
The Customer shall install and maintain the necessary facilities or devices to protect Customer
owned equipment against service interruptions and other disturbances on the Board's system.
Alterations to the Customer Chilled Water Service or associated equipment are prohibited without
approval of the Board.
4. Chilled Water Quality and Disturbances
The Customer shall operate equipment in a manner that does not cause surges, water hammer or
other problems in the Chilled Water Distribution System or to other Customers. If the Board
notifies the Customer of such a condition, the Customer shall discontinue operation of equipment
causing such condition until a correction has been made.
Approved:05/27/2008
Effective: 07/01/2008
WATE—tIc�hr Lansing Board of Use of Service
so Water and Light Chilled Water Rule and Regulation 4
5. Improper Use and Tampering
Any person that uses chilled water without making proper application for chilled water service shall
be responsible for all charges for chilled water service. The amount of such charges shall be
determined by the Board either by meter readings or on the basis of calculated consumption for the
time chilled water was used.
If chilled water is being used by a Customer without proper application for service or chilled water
service connection, the Board may discontinue service without notice. In case of such
discontinuance of service, the Board shall restore service only after the Customer has paid the
reconnection fee as stated in Rule 12.
The Board may discontinue service and seek criminal charges, if it is determined that the meter or
piping on the Customer's Premises has been tampered with or altered in any manner to steal chilled
water. If the Board discontinues service for this reason, the Board shall restore service only after
the Customer has paid the reconnection fee as stated in Rule 12, made appropriate restitution for
stolen service and made provisions for metering and/or piping changes as may be required by the
Board.
6. Discontinuation of Service
A. Service may be voluntarily or involuntarily disconnected.
(1)Voluntarily
Service may be voluntarily disconnected per the Customer's request. The BWL
recommends that the Customer or the Customer's representative be present for the
disconnection to ensure complete shutoff. It can be difficult for the BWL to confirm that
the service have been completely turned off if there is no one present at the premises
during the shutoff. The Customer is responsible to advise the BWL if the shutoff was not
entirely effective.
(2) Involuntary
Service may be involuntarily disconnected in the following instances:
(a) Noncompliance with applicable Rules and Regulations;
(b) Noncompliance with Municipal, State and or Federal law; or
(c) Issuance of a Court Order.
Approved: 05/27/2008
Effective: 07/01/2008
WATER&L�IGHT Lansing Board of Metering
Water and Light Chilled Water Rule and Regulation 5
Metering
1. General
All chilled water sold to Customers shall be measured by commercially acceptable measuring devices
owned and maintained by the Board except where it is impractical to meter, such as for temporary or
special installation, in which cases the consumption may be calculated.
If for any reason all the chilled water used cannot be registered accurately the unmetered portion shall
be estimated by the Board on the basis of prior consumption or the operating characteristics of the
building and equipment.
2. Sizing/Installation/Ownership
The Board shall fiimish, own and maintain metering and monitoring equipment consisting of RTU
cabinet, temperature elements and transmitters, flow transmitters, differential pressure transmitters,
and temperature control valves for installation by the Customer.
The Customer shall provide two 120 VAC 20 AMP power circuits to the RTU cabinet.
The Board shall install, own and maintain all communication and control wiring for the metering and
monitoring equipment.
3. Equipment Location
A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the
Board for the installation of the necessary metering equipment. The Customer shall furnish
the space and the provisions for mounting metering and service equipment to meet Board
requirements. Inquiries regarding installation requirements should be directed to the Board's
System Integrity& Customer Projects Department.
B. The Customer shall locate metering equipment inside the building served in a well ventilated
area with ample space for meter reading and maintenance.
C. The Customer shall not place metering equipment in a pit below floor level, in a rest room or
on a platform higher than thirty (30) inches above the floor unless Board approved steps and
platform are installed.
4. Damaged Meter
The Customer shall be held liable for damage to the metering and monitoring equipment, and
communication and control wiring from acts of carelessness, negligence or willful damage by owner
or his tenants. The Board will repair any meter so damaged, and the cost shall be billed to the
Customer.
Approved:05/27/2008
Effective: 07/0 l/2008
WATE�UGHT Lansing Board of Application of Rates
NaWater and Light Chilled Water Rule and Regulation 6
Application of Rates
1. General
Chilled Water Rates are predicated upon the Board not being required to provide not more than one
Customer Chilled Water Service to a building or structure. The Board shall separately meter and
separately bill service at different points or at different buildings or structures unless specifically
provided for in the applicable Rate Schedule.
2. Resale
The owner or operator of an office building, apartment building, shopping mall, or similar structure
may purchase chilled water from the Board for resale to occupants on the condition that service to
each occupant shall be metered separately and that the occupants may not be charged more for such
service than the appropriate Rate of the Board available for similar service under like conditions. In
order to qualify for resale to tenants,the owner or operator must state in writing their intent to resell
in the application for service. The owner or operator shall be responsible for payment of purchased
chilled water for resale as required by Rule 7.
The Board shall have no obligation to furnish, test or maintain meters or other facilities for the
resale of service by the reselling owner or operator to the occupant.
Billing records of the owner or operator may be audited once every 12 to 18 month using generally
accepted auditing practices. The audit shall be conducted by the Board or if the Board elects,by an
independent auditing firm approved by the Board. The reselling owner or operator shall be assessed
a reasonable fee for an audit conducted by the Board.
The owner or operator providing the resale shall be responsible for testing of each occupant's meter
at least once every 3 years. The accuracy of such meters shall be maintained within 2%. Meters
shall be tested only by outside testing services or laboratories approved by the Board.
A record of each meter, including testing results, shall be kept by the reselling owner or operator
during the use of the meter and for an additional period of one year thereafter. When requested, the
reselling owner operator shall submit certified copies of the meter test results and meter records to
the Board.
The reselling owner or operator shall render a bill once during each billing month to each of the
occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered
by the reselling owner or operator shall specify the following information; The Rate Schedule title,
the due date, the beginning and ending meter reading of the billing period and the dates thereof, the
difference between the meter readings; the amount due for services and/or commodity use, as
applicable to the Rate; subtotal before taxes, sales tax, other taxes where applicable; the amount due
for other authorized charges; and the total amount due. The due date shall be 21 days from the date
of rendition. The reselling owner operator shall be responsible for all collections and payment
disputes for resale occupants.
The reselling owner or operator shall supply each occupant with a chilled water system adequate to
meet the needs of the occupant with respect to the nature of service, and other conditions of service.
Approved: 05/27/2008
Effective: 07/01/2008
WATER RR&L® Lansing Board of Application of Rates
Water and Light Chilled Water Rule and Regulation 6
If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the
appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is
not resolved, the Board may declare the reselling owner or operator in violation of Rule 2.
The renting of Premises with the cost of chilled water service included in the rental as an incident
of tenancy will not be considered a resale of such service.
3. Billing
Customers having more than one meter shall have consumption computed by individual meter in
accordance with the current Rate Schedule and contract.
4. Minimum Charges
A minimum charge, as defined by the Rate in effect, shall be applied to all services and billed to the
Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate
the service by any appropriate means, including without limitation, removing the metering devices
and by disconnecting the service from the Board's Chilled Water Distribution System.
5. Property Owner-Rental Agent Agreement for"Leave On"Service
The BWL may waive application charges to maintain continuity of service at rental property
locations provided: (1) the landlord agrees in writing to assume the responsibility for chilled water
service during the interim between tenants, and(2) the landlord is in compliance with all other rules
and regulations of the Board.
Approved:05/27/2008
Effective: 07/01/2008
WATE'—GHT Lansing Board of Responsibility for Payment of Bills
Water and Light Chilled Water Rule and Regulation 7
Responsibility for Payment of Bills
1. General
Each Board Customer is responsible to pay all utility bills as rendered on or before the due date
shown thereon. The Customer remains responsible for payment of the bills until the Customer orders
service to be discontinued and the Board has had reasonable time to secure a final meter reading.
Bills are rendered on approximately a monthly basis. Bills are mailed to Customers approximately
fifteen (15) days before the due date shown on the bill. The Customer shall pay the net amount if
paid on or before the due date on the bill. Failure on the part of the Customer,through no fault of the
Board, to receive the bill shall not entitle the Customer to pay the net amount after the due date of the
bill. If a bill remains unpaid after issuing a five (5) day written shut-off notice, the Board shall have
the right to discontinue service.
In extenuating circumstances, a Customer will be afforded the opportunity to make payment
arrangements.
Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has
requested a hearing, pending results of the hearing. Service may be discontinued for nonpayment of
bills that are not in dispute.
The Board may also require individual Customers to enter into a written "Billing Service
Agreement,"insuring that the Customer is responsible for all services used and rendered.
The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 12 for returned checks.
2. Estimated Consumption
Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills
rendered on estimated consumption have the same force and effect as bills rendered on actual meter
readings.
3. Billing Errors
A. When an error is found to exist in the billing rendered to a Customer, the Board will correct
such error to recover or refund the difference between the original billing and the corrected
billing. Corrected billings will not be rendered for periods in excess of three (3) years from
the date the error is discovered. Refunds to Customers will normally be made promptly upon
discovery of the error. Amounts due the Board from the Customer will be subject to normal
collection policy and procedures.
B. When an error is found to exist in the billing of a contract or service agreement with or
governing the Customer, the Board will correct such error to recover or refund the difference
between original billing and the corrected billing. Corrected billings will not be rendered for
periods in excess of three (3) years from the date the error is discovered. Refunds to
Customers will normally be made promptly upon discovery of the error. Amounts due the
Board from the Customer will be subject to normal collection policy and procedures.
Approved:05/27/2008
Effective: 07/01/2008
WATER ELIGHT Lansing Board of Responsibility for Payment of Bills
Water and Light Chilled Water Rule and Regulation 7
4. Account Security Deposits
The Board shall require an account security deposit from any new or existing Customer with an
unacceptable credit history with the Board. The Board shall apply different rules to new Customers
signing up for service in accordance with Rule 7.4.13. The deposit is normally 2 times the average
monthly bill (actual or estimated) as determined by the Board and shall be applied according to Rule
15. Security Deposits shall be administered in accordance with Customer Service established
Standards and Guidelines.
The Board may waive deposits in special circumstances. The Board may also demand deposits larger
than 2 times the average monthly bill if the Board determines that a Customer presents a higher than
normal credit risk.
Unacceptable credit history includes but is not limited to the following:
(1) The Customer has deliberately misinformed or misrepresented facts to the Board.
(2) The Customer misrepresents their identity.
(3) The Customer fails to provide positive identification at the time of applying for service.
(4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in
the past 6 years.
(5) The Customer has had one or more payments canceled in the last 12 months due to: (1) non-
sufficient funds returned check, (2) account closed returned check, (3) non-sufficient funds
bank bill, (4) account closed bank bill, (5) credit card reversal, (6) or other payment method
cancellation.
(6) The Customer has a prior account that is delinquent within the last 6 years.
B. New Customers may not be required to submit a deposit, in any of the following situations:
Residential Customers
(1) The Customer has no service history with the Board and has been permitted into the Good
Faith Deposit Program in accordance with Customer Service established Standards and
Guidelines.
(2) The Customer has previously established an acceptable payment history with the Board on a
similar account.
(3) The Customer's bill is paid by a governmental agency.
(4) The Customer secures a guarantor with a similar account and an acceptable payment history.
(5) The Customer provides an acceptable surety bond.
(6) The Customer provides an acceptable credit reference letter from a similar utility company
for a similar account. Account must have been in the Customer's name and maintained for a
minimum of 12 consecutive months.
Commercial and Industrial Customers
(1) The Customer has previously established an acceptable payment history with the Board on a
similar account.
(2) The Customer's bill is paid by a governmental agency.
(3) The Customer secures a guarantor with a similar account and an acceptable payment history.
(4) The Customer provides an acceptable surety bond.
Approved: 05/27/2008
Effective: 07/01/2008
wArE Lansing Board of Responsibility for Payment of Bills
Water and Light Chilled Water Rule and Regulation 7
(5) The Customer provides an acceptable credit reference letter from a similar utility company
for a similar account. Account must have been in the Customer's name and maintained for a
minimum of 12 consecutive months.
The Board will refund deposits to all Customers who have taken service for 12 months and have an
acceptable payment history. The Board will also refund deposits to Customers who have voluntarily
terminated service and paid all charges due.
The Board will pay simple interest accrued on Account Security Deposits held. No interest will be
paid until the deposit is returned to the customer. The interest rate will be updated on July 1 of each
year. The interest rate used to calculate interest will be the sum of the Federal Funds rate in effect on
the last day of March of the current year plus .25%.
Approved:05/27/2008
Effective: 07/01/2008
WATE�HT Lansing Board of Dispute and Hearing Procedure
Water and Light Chilled Water Rule and Regulation 8
Dispute and Hearing Procedure
1. Disputes
In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute
and hearing process for its Customers as follows:
A. When any Customer disputes a bill or service and the Board is so advised in writing, the date of
the notice of dispute will be recorded.
B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer
has requested a hearing, pending results of the hearing. Service may be discontinued for
nonpayment of bills that are not disputed.
C. The disputed bill or service will be investigated promptly and completely.
D. The Customer will be advised of the results of the investigation.
E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties.
F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement
agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute.
G. If a settlement cannot be reached between the Customer and the Board's Account Administrator,
the Customer may choose to appear before the Board's Dispute Review Committee. The review
will be scheduled within ten(10)days of the request or as mutually agreed to by both parties.
H. If a settlement cannot be reached following examination by the Dispute Review Committee, the
account will be referred to the Board's General Manager.
I. If a settlement is not reached after review by the Board's General Manager, the Customer shall be
afforded an opportunity for a hearing.
J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered
which are not in dispute.
2. Hearings
A. Any Customer who disputes the services provided or a billing for services furnished in
accordance with the Board's filed Rates, Rules and Regulations or established policies or
procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the
request must be made within ten (10) calendar days following the final outcome of the dispute
process. Any request for a hearing may be made in writing and received by the Board's corporate
office at 1232 Haco Drive, Lansing,Michigan,48912.
B. On receipt of a request for a hearing, the Board will forward this request to an independent
Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the
Customer and the Board of the date, time and location in writing. The hearing will be scheduled
during normal business hours. Failure of the Customer or Board to attend the hearing without
due cause or prior request for adjournment will constitute a waiver of right of that party to the
hearing.
C. The Board and the Customer shall:
(1) Have the right to be represented by Counsel or other persons of their choice.
(2) Have the right to present evidence, testimony and oral and written argument.
(3) Have the right to cross-examine witnesses appearing on behalf of the other party.
Approved:05/27/2008
Effective: 07/01/2008
WATE'A'aLIGHT Lansing Board of Dispute and Hearing Procedure
Water and Light Chilled Water Rule and Regulation 8
(4) Have the right to have the hearing recorded by a court reporter at the expense of the
Customer. The Hearing Officer shall also have the right to have the hearing recorded by a
court reporter. Recordings will be preserved at least six (6) months from the date of the
hearing. All evidence relevant to the dispute will be received.
D. For each hearing, the Hearing Officer shall compile a hearing record which will contain;
(1) A concise statement in writing of the position of the Board in relation to the dispute.
(2) A concise statement in writing of the position of the Customer in the dispute.
(3) Copies of all evidence submitted by the parties.
E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both
parties. If the Hearing Officer does not reach a decision during the hearing, additional time will
be allowed to reach a decision. When a decision has been reached, either at the hearing or later,
the Hearing Officer will prepare a report which shall contain the following:
(1) A concise summary of the evidence and argument presented by the parties.
(2) The decision and a statement that the decision of the Hearing Officer was based solely on
the evidence presented and reasons therefore.
(3) Advise that the representatives of the Board and the Customer have a right to file an appeal
with the Board of Commissioners.
(4) A statement as to any settlement agreement.
(5) A statement that the dispute determination is binding on both parties unless appealed to the
Board of Commissioners within ten(10) days of the date of mailing of decision,and that any
request for appeal must be in writing to the Corporate Secretary.
F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor
of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail.
G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make
recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will
arrange a time for the appeal and advise both the Customer and the Board of the date, time and
location in writing. Failure of the Customer to appear at the time set for the appeal without due
cause, or to request an alternate date,will constitute a waiver of right to appeal.
H. The Board of Commissioners shall report its final action on any unresolved disputes together with
the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing,
Michigan.
I. The Mayor may make recommendations to the Board of Commissioners on each unresolved
dispute.
Approved:05/27/2008
Effective: 07/01/2008
WATER T Lansing Board of Distribution System Extensions
so Water and Light Chilled Water Rule and Regulation 9
Distribution System Extensions
1. General
A. Request for Distribution System Extension
Rule 9 sets forth the conditions under which the Board will extend its Chilled Water
Distribution System.
B. Ownership
The Board shall provide, own, maintain and specify all of its distribution Facilities
including location. No ownership rights to Board Facilities shall pass to any owner(s),
developer(s), or Customer(s)by reason of any contribution required hereunder.
C. Availability of Distribution System Extension
The Board shall in its sole discretion determine whether or not any particular Chilled
Water Distribution System extension shall be made, regardless of its intended use, and
establish any special conditions or requirements that may apply, including but not limited
to entering into an agreement with a developer,property owner(s)or Customer.
Chilled Water Distribution System extensions are generally available throughout the
chilled water service area if the requested service will not disturb or impair service to prior
users and is within or contiguous to areas presently served.
D. Installation of Distribution System Extension
All Chilled Water Distribution System extensions shall be installed by the Board or its
agent.
Chilled Water Distribution System extensions shall be installed in public right-of-way
except in certain cases where, at the Board's discretion, they may be installed in dedicated
recordable easements on private property at no cost to the Board.
The Customer shall provide the Board a final preliminary approved site plan for Board
review and approval.
Installation of a Chilled Water Distribution System extension will be initiated provided:
(1) The Customer has entered into a written agreement with the Board for the
construction of the Chilled Water Distribution System extension.
(2) The Customer has paid any deposits as required by Rule 7.4 and Rule 11 for the
Chilled Water Distribution System extension and any required system
reinforcement.
(3) Where applicable, the Customer has recorded the plat or final preliminary approval
has been received, monuments or markers are in place, lot lines staked, sewers
installed, streets at finished grade (before gravel and curb and gutter installation),
sidewalk grading completed,and the ground in workable condition.
(4) Constriction during the winter season will only occur at the Board's discretion.
E. Adequate Temperature,Pressure and Flow Capacity
The Board shall not make Chilled Water Distribution System extensions unless adequate
temperature, pressure and flow capacity is available at the location of the Chilled Water
Distribution System extensions as determined by the Board.
Approved:05/27/2008
Effective: 07/01/2008
WATE-311- Lansing Board of Distribution System Extensions
IM Water and Light Chilled Water Rule and Regulation 9
Where a Chilled Water Distribution System reinforcement is required to provide adequate
temperature, pressure and flow capacity at the location of the Chilled Water Distribution
System extension, the Customer shall bear the cost of such Chilled Water Distribution
System reinforcement in accordance with Rule 11.
F. Economic Development Offsets
Where the Board determines that the Chilled Water Distribution System extension will
promote development that provides substantial and sustainable economic benefits to its
Customers or the Lansing region, the Board will consider an offset to its fees and charges
and/or an economic incentive subject to its availability.
G. Easements and Tree Trimming/Removal Permits
Where the Board has agreed to construct the Chilled Water Distribution System extension
in an easement and prior to such construction, the owner(s), developer(s) or Customer(s)
shall be required to furnish, at no expense to the Board, recordable easements in a form
satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress,
egress and the installation and maintenance of the Chilled Water Distribution System
extension including any Chilled Water Distribution System equipment as designed by the
Board for present and future service. The owner, developer, or Customer shall also, in a
form satisfactory to the Board, grant the Board permission to trim and remove trees as
necessary to protect the integrity of its distribution system and the safety and welfare of its
employees and the public.
In the event the required easements tree trimming and removal permits are not provided by
the owner(s), developer(s) or Customer(s) for such extension, the Board may elect to
construct all or any part thereof along public highways or other private property. In such
event, the Board may require the owner(s), developer(s) or Customer(s) to pay the added
construction expense occasioned by the use of such highways or other private property,
plus any expense encountered in acquiring permits and easements on other private
property when necessary to provide service to the owner(s), developer(s)or Customer(s).
H. Non-Standard Equipment
Where the Customer requests that the Board utilize equipment which differs from its
normal specifications, purchased or installed, the Board may elect to provide such non-
standard equipment with the Customer paying any additional cost.
I. Non-Standard Construction
Where, in the Board's judgment, practical difficulties exist such as unexpected
governmental requirements, frost or wet conditions, contaminated soil, rock within the
excavation surface, or where it is necessary to deviate from the Board's approved
construction standards or established distribution system design, the Board may require
the Customer to pay for the additional cost resulting therefrom.
J. Other Facilities
It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and
provide locations of any existing privately owned underground facilities such as lawn
sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc.
If privately owned facilities are not properly located, the Board does not assume
responsibility for any damage to these facilities.
Approved:05/27/2008
Effective: 07/01/2008
WATER R�T Lansing Board of Distribution System Extensions
Water and Light Chilled Water Rule and Regulation 9
K. Construction Date of Distribution System Extension
The Board, based on availability of work crews and material, and subject to approvals of
the appropriate regulatory agencies, utilize best efforts in constructing the Chilled Water
Distribution System extension to meet a mutually agreed upon date.
2. Chilled Water Facility Relocations and Removals:
(1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board
Standards,the Board will relocate or remove its chilled water Facilities provided:
A. The relocation or removal is feasible and meets Board Standards.
B. The Customer or developer obtains approval from all Customers impacted by the
proposed relocation.
C. The relocation or removal does not degrade chilled water reliability or quality.
D. All governmental approvals, permits and easements are obtained.
Prior to any relocation or removal of chilled water Facilities, the Customer or developer shall be
required to make a nonrefundable contribution in aid of construction. The aid in contribution of
construction shall reimburse the Board for all relocation and removal costs including material,
labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing
lawns, replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 9, plus the cost
of any necessary modifications to the Board's Chilled Water Distribution System affected by the
relocation or removal, less the salvage value of any portion of the chilled water Facilities
removed.
(2) If, at any time subsequent to completion of the Chilled Water Distribution System extension, it is
found that Chilled Water Mains or related Facilities are not at the correct location or at the proper
elevation due to changes beyond the control of the Board, the Customer or developer shall
reimburse the Board to relocate Chilled Water Mains or related Facilities to the correct location
or at the proper elevation.
Approved:05/27/2008
Effective: 07/01/2008
ioLansing Board of Services
Water and Light Chilled Water Rule and Regulation 10
Services
1. General:
The Customer Chilled Water Service shall be furnished, installed, owned and maintained by the
Board. In the course of maintaining or repairing a Customer Chilled Water Service,-the Board
shall bear no responsibility for damage incurred or restoration to areas where the Customer
Chilled Water Service passes under any area not readily accessible. The Customer shall be
responsible for additional repair costs due to these encumbered services
The Service Location shall be specified by the Board and shall be located so that the Board's
service Facilities meet or exceed all clearance requirements and applicable local codes.
Should it become necessary for any cause beyond the Board's control to change the Service
Location, the entire cost of any changes in the Customer's service shall be the responsibility of
the Customer.
Should it become necessary for the Board to reinforce or upgrade the Chilled Water Distribution
System to accommodate the requested service, a nonrefundable contribution in aid of
construction may be required as determined by Rule 11.
2. Chilled Water Service:
A. General
The Customer shall provide the chilled water demand and a plot plan showing the proposed
building size and location of proposed service entrance to the Board's System Integrity &
Customer Projects Department.
Customer Chilled Water Services shall be installed from the Chilled Water Main to the
Customer's property line in the most direct manner. The pipe comprising the connection shall
cross only that legally described property upon which the building to be serviced is located.
It is the intent of the Board that all underground chilled water pipes be installed and maintained
by the Board. However, where unusual or special circumstances exist, the Customer may request
approval to install underground chilled water pipes. Applicants shall submit plans and
specifications to the Board's System Integrity&Customer Projects Department for approval prior
to installation.
No person other than an authorized employee of the Board shall open or close the outside valve
on the Customer Chilled Water Service. No person except an authorized Board employee shall
tap, revamp or connect to a Chilled Water Main or any of the pipes comprising the Customer
Chilled Water Service.
The Customer shall flush the Customer Piping prior to connection to the Customer Chilled Water
Service. The flushing shall remove all debris and foreign matter from the Customer Piping. The
Board shall be notified of the date of flushing and given the opportunity to witness same. The
Customer shall not use the Customer Chilled Water Service for cleaning or flushing of the
Customer Piping.
Approved: 05/27/2008
Effective: 07/01/2008
WATER&LI� Lansing Board of Services
10Water and Light Chilled Water Rule and Regulation 10
B. Customer Connections to Board Facilities
It shall be the Customer's responsibility to connect Customer Piping to the Customer Chilled
Water Service. All work shall be in full compliance with all Board standards and applicable
codes.
The Customer shall not connect to the Customer Chilled Water Service except at the outlet side of
the Board Service Valves.
C. Customer Chilled Water Piping
The Customer shall make sufficient provisions to support the Customer Piping so that the Board's
Customer Chilled Water Service is not adversely affected.
The Customer shall inform the Board of the date of connection to the chilled water system. The
Board shall be afforded the opportunity to witness the connection.
D. Installation and Maintenance of Chilled Water Services
Installation of a chilled water service will be initiated provided:
(1) The Customer has provided the Board a final preliminary approved site plan for Board
review and approval.
(2) The Customer has entered into a written agreement with the Board for the construction of
the chilled water service.
(3) The Customer has paid any deposits as required by Rule 7.4 and Rule 11 for the chilled
water service.
(4) Where applicable, the Customer shall have the plat recorded or final preliminary approval
received, monuments or markers in place, lot lines staked, sewers installed, streets at
finished grade (before gravel and curb and gutter installation), sidewalk grading
completed, and the ground in workable condition.
(5) Construction during the winter season will only occur at the Board's discretion.
Where, in the Board's judgment, practical difficulties exist such as unexpected governmental
requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or
where it is necessary to deviate from the Board's approved constriction standards or established
distribution system design, the Board may require the Customer to pay for the additional cost
resulting therefrom.
The Customer shall be responsible for additional repair costs due to encumbered Customer
Chilled Water Services or damage as a result of negligence, willful damage or carelessness by the
Customer, owner or tenants.
3. Chilled Water Facility Relocations and Removals:
The Board will relocate or remove its chilled water Facilities in accordance with Rule 9.2
Approved:05/27/2008
Effective: 07/01/2008
WATER RtI� IGHT Lansing Board of System Extension $ Service Deposit
IM Water and Light Chilled Water Rule and Regulation 11
System Extension& Service Deposit
1. General
When application is made for chilled water service which requires the extension of the Board's
existing Chilled Water Distribution System, the Board will make such extensions when the estimated
annual revenue, probable stability of the load and prospective load growth reasonably warrant the
capital expenditure required.
2. Distribution System Extension and Customer Chilled Water Service
The Customer may be required to pay all or a portion of the cost of an extension of the Board's
existing Chilled Water Distribution System and installation of a Customer Chilled Water Service,
based on an evaluation of the Board's recovery of capital cost along with other business related
matters.
3. Customer Chilled Water Service Only
The Customer may be required to pay all or a portion of the cost of the installation of a Customer
Chilled Water Service,based on an evaluation of the Board's recovery of capital cost along with other
business related matters.
Approved: 05/27/2008
Effective: 07/01/2008
WATE-Ii° Lansing Board of Schedule of Fees & Charges
10Water and Light Chilled Water Rule and Regulation 12
Schedule of Fees& Charges
CHILLED WATER FEES and CHARGES
Charge Description When Applied Charge
Security Deposits—Commercial& For all new customers unless waived by conditions 2 times average monthly bill
Industrial stated in Rule 7.
Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge
After 5;30 p.m.on weekdays or weekends and $135
holidays
Reconnection fee
Non-pay(Normal hours) 7:30 a.m.—5:30 p.m.weekdays $80$135
Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and
holidays $135
Meter Tampering Any time
Missed Appointment,No Show,No After second occurrence,per occurrence $30
access Fee
Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks $30
Charges other than those published Relocations,damages,etc. _ At cost
Approved:05/27/2008
Effective: 07/01/2008
WATER Lansing Bard of
rCi�l
Water and Light
Rules and Regulations
For
Water Service
Approved: 05/27/2008
Effective: 07/01/2008
WATERBUG—HT Lansing Board of Table of Contents
Im Water and Light
TABLE OF CONTENTS
PAGE
NUMBER
Definitions....................................................................................................................................................................4
GeneralProvisions.......................................................................................................................................................6
ServiceConditions.......................................................................................................................................................7
Characterof Service..................................................................................................................................................7
Descriptionof Service...............................................................................................................................................7
Availabilityof Service...........................................................................................................................................7
Agreements............................................................................................................................................................8
MaterialAvailability..............................................................................................................................................8
Useof Service...............................................................................................................................................................9
General......................................................................................................................................................................9
Accessand Damages.................................................................................................................................................9
CustomerPiping and Equipment...............................................................................................................................9
WaterQuality and Disturbances..............................................................................................................................10
ImproperUse and Tampering..................................................................................................................................10
Discontinuationof Service......................................................................................................................................10
Metering.....................................................................................................................................................................11
General..........................................................................................................................................• ....................11
Sizing/Installation/Ownership.................................................................................................................................11
EquipmentLocation................................................................................................................................................11
MultipleOccupancy Buildings................................................................................................................................11
Damagedor Frozen Meter.......................................................................................................................................12
Applicationof Rates..................................................................................................................................................13
General....................................................................................................................................................................13
Resale......................................................................................................................................................................13
Choiceof Rates........................................................................................................................................................14
Apartment Buildings and Multiple Dwelling Structures.........................................................................................14
Billing......................................................................................................................................................................14
MinimumCharges...................................................................................................................................................14
Property Owner-Rental Agent Agreement for'Leave On'Service........................................................................15
Responsibilityfor Payment of Bills..........................................................................................................................16
General....................................................................................................................................................................16
EstimatedConsumption...........................................................................................................................................16
BillingErrors...........................................................................................................................................................16
AccountSecurity Deposits......................................................................................................................................17
Disputeand Hearing Procedure...............................................................................................................................19
Disputes...................................................................................................................................................................19
Hearings...................................................................................................................................................................19
WaterCustomer Choice Program............................................................................................................................21
General....................................................................................................................................................................21
Contractor Qualification and Approval...................................................................................................................21
ResidentialServices.................................................................................................................................................21
Deposit and Non-Refundable Contributions for On-Site Water Mains and Large Services..........................21
Permits.....................................................................................................................................................................21
DistributionSystem Extensions................................................................................................................................22
General....................................................................................................................................................................22
Request for Distribution System Extension.........................................................................................................22
Ownership............................................................................................................................................................22
Availability of Distribution System Extension....................................................................................................22
Contribution In Aid of Construction for System Extensions...............................................................................22
Installation of Distribution System Extension.....................................................................................................23
Approved: 05/27/2008 Page 2 of 38
Effective: 07/01/2 00 8
WATE� Lansing Board of 'Table of Contents
Water and Light
AdequatePressure and Flow Capacity................................................................................................................23
Permits.................................................................................................................................................................24
StakingRequirements..........................................................................................................................................24
FireHydrants.......................................................................................................................................................24
Oversizing of Distribution System Extension......................................................................................................24
Economic Development Considerations..............................................................................................................24
Easements and Tree Removal Permits.................................................................................................................24
Non-Standard Equipment....................................................................................................................................25
Non-Standard Construction.................................................................................................................................25
OtherFacilities....................................................................................................................................................25
Construction Date of Distribution System Extension..........................................................................................25
Water Facility Relocations and Removals...............................................................................................................25
Services.......................................................................................................................................................................27
General....................................................................................................................................................................27
TemporaryWater Service........................................................................................................................................27
DomesticWater Service..........................................................................................................................................27
General................................................................................................................................................................27
Customer Connections to Board Facilities..........................................................................................................28
Charges................................................................................................................................................................28
FireService..............................................................................................................................................................28
General................................................................................................................................................................28
Charges................................................................................................................................................................29
Lawn Sprinkler(Irrigation)Service.........................................................................................................................29
Water Facility Relocations and Removals...............................................................................................................29
LeadService Pull Ahead Program...........................................................................................................................29
BoosterPumps...........................................................................................................................................................31
WaterStorage Facilities............................................................................................................................................32
Cross—Connection......................................................................................................................................................33
General....................................................................................................................................................................33
Installation of Backflow Prevention Devices..........................................................................................................33
Inspection and Maintenance of Backflow Prevention Devices................................................................................33
Compliance..............................................................................................................................................................33
SevereHazard Locations.........................................................................................................................................33
SecondarySupplies..................................................................................................................................................34
Scheduleof Fees&Charges......................................................................................................................................35
Approved: 05/27/2008 Page 3 of 38
Effective: 07/01/2008
WATER RIGHT Lansing Board of Definitions
em Water and Light Water Rule and Regulation 1
DEFINITIONS OF TERMS AND THEIR ABBREVIATIONS
BOARD— When used in these Rules and Regulations, Board is an abbreviation meaning the Board
of Water and Light.
BORING— To pierce the ground with a turning or twisting movement of a tool to make a hole for
pipes, cables etc.
CUSTOMER— A purchaser of water service supplied by the Board or a governmental entity that
authorizes the Board to provide water service.
CUSTOMER OWNED FIRE HYDRANT—The hydrant and appurtenances owned and maintained by the
Customer, installed on CUSTOMER PIPING on private property after the Board
metering point.
CUSTOMER PIPING—A piping system owned or controlled by the Customer that conveys water from
the Service Location throughout the Customer's Premises.
CUSTOMER WATER SERVICE—Those pipes, valves and appurtenances owned and maintained by the
Board installed between a Water Main and Customer Piping.
CROSS—CONNECTION — A physical interconnection, arrangement or condition of the Customer's
plumbing through which the potable water furnished by the Board's Water Distribution
System could become contaminated if backflow takes place.
DEMAND— The rate of water delivered at a given point.
DOMESTIC WATER SERVICE — Those pipes, valves, backflow devices and appurtenances installed
from the Water Main to the Service Location for the purpose of providing water for
consumption other than irrigation or fire service use on the served Premises.
DWELLING UNIT— A dwelling unit shall be considered as a single room, suite or groups of rooms or
suites which have individual cooking and kitchen sink facilities designed for or used
exclusively for residential purposes.
FACILITIES— A general term which includes pipes, fittings, valves, fire hydrants, associated structures
and the like,used as a part of or in connection with a water installation.
FIRE SERVICE — Those pipes, valves, backflow devices and appurtenances installed from the Water
Main to the Customer's Premises for the sole purpose of providing water for fire fighting
on the served Premises.
METER SET—Those pipes,valves and appurtenances that house the water meter.
ON-SITE WATER MAINS—Water Mains installed on private property that will be located in easements
or public right-of-way and owned and maintained by the Board.
PERSON— Any individual, corporation, partnership, company, limited Liability Corporation,
organization or governmental entity.
Approved: 05/27/2008 Page 4 of 38
Effective: 07/01/2008
WATE_R3-HT Lansing Board of Definitions
Water and Light Water Rule and Regulation 1
PRIVATE FIRE HYDRANT — The hydrant and appurtenances owned and maintained by the Board,
installed on Water Mains on private property in Board approved easements to provide
water primarily for fire fighting purposes for the property benefit.
PUBLIC FIRE HYDRANT — The hydrant and appurtenances owned and maintained by the Board,
installed on Water Mains within public right-of-way or in Board approved easements to
provide water primarily for fire fighting purposes for public benefit.
PREMISES— A building and its grounds.
RATE— The unit prices as established by the Board's rate-making body and the quantities to
which they apply as specified in the Rate Schedule.
RATE SCHEDULE — A filed statement of the water Rate and the terms and conditions governing its
application as established by the Board's rate-making body.
SERVICE LOCATION—The point at which the Board has agreed to provide water service to Customer
Piping.
SERVICE STUBS — That portion of a Customer Water Service that extends from the Water Main to a
typical distance of 5 feet inside the property line.
TRENCH— A cut in the ground in which pipes, etc. are installed.
WATER DISTRIBUTION SYSTEM—The system of Water Mains, pipes, fittings, valves, fire hydrants
and all equipment and appurtenances thereto, necessary to distribute water to Customer
Water Services.
WATER MAIN — A pipe owned and maintained by the Board installed in public right-of-way or
easement that conveys water to a Customer Water Service or to a fire hydrant.
Approved: 05/27/2008 Page 5 of 38
Effective: 07/01/2008
WATE® Lansing Board of General Provisions
10Water and Light Water Rule and Regulation 2
General Provisions
Copies of the Board's Rate Schedules for water service are open to public inspection at the
Board's offices and are available on the Board's Internet Web site w,.vw.lbwl.com or upon
request. Application for original, modified or added service shall be made at the office of the
Board of Water and Light, Utility Services, 730 East Hazel Street, Lansing.
Any Person receiving or agreeing to receive water service from Board Facilities shall be deemed
a Customer of the Board subject to its Rates and these Rules and Regulations and responsible for
the service used whether such service is provided under a signed agreement or not.
Water service will not be supplied to new or remodeled buildings until such installations comply
with these Rules and Regulations.
For water service requests that are 2" or larger in size, the Customer should contact the Board's
System Integrity & Customer Projects Department to determine the characteristics of the water
service available at the Premises, since adequate flow and/or pressure may not be available. The
System Integrity & Customer Projects Department will inform the Customer of the Board's
requirements,which must be fulfilled by the Customer, in order to receive water service.
The Board may discontinue water service to any Customer for any breach of the Board's Policy,
Rules and Regulations, Procedures or in accordance with law. The Customer must pay a
reconnection fee as stated in Rule 15 to cover the costs of restoring water service that has been
discontinued for any breach of the Board's Policy, Rules and Regulations, Procedures or in
accordance with law.
The Board will release customer information in accordance with written customer authorization
and Board policy
This document is intended to cover most situations where standardized policies and practices
have been established. No officer, agent or employee of the Board has authority to waive or
modify the provisions of this document unless specifically authorized to do so by the Board of
Commissioners. The Board of Commissioners may revise this document at any time and may
modify or suspend any portion of it temporarily or permanently.
Approved: 05/27/2008 Page 6 of 38
Effective: 07/01/2008
WATER Lansing Board of Service Conditions
Water and Light Water Rule and Regulation 3
Service Conditions
1. Character of Service
The Board produces and distributes potable water, approved by the Michigan Department of
Environmental Quality (MDEQ), for public use throughout its service area and will endeavor, but
does not guarantee, to furnish a continuous supply and to maintain water pressure within
reasonable limits.
The Board shall not be liable for interruptions in the service including without limitation,
variations in the service characteristics, or for any loss or damage of any kind or character
occasioned thereby, due to causes or conditions beyond the Board's reasonable control, and such
causes or conditions shall be deemed to specifically include, but not be limited to, the following:
acts or omissions of Customers or third parties; operation of safety devices except when such
operation is caused by the negligence of the Board; absence of an alternate supply of service;
failure, malfunction, breakage, necessary repairs or inspection of machinery, Facilities or
equipment when the Board has carried on a program of maintenance consistent with the general
standards prevailing in the industry; act of God; war; action of the elements; storm or flood; fire;
riot; sabotage; labor dispute or disturbance, or the exercise of authority or regulation by
governmental or military authorities.
Notwithstanding any other provision of these rules, the Board may interrupt or limit water service
to Customers without prior notice and in a manner that appears most equitable under the
circumstances then prevailing or as necessary to protect the health, safety and welfare of its
employees or Customers. The Board shall be under no liability with respect to any such
interruption or limited supply.
2. Description of Service
A. Availability of Service
(1) Water service is provided to Customers in the City of Lansing and several surrounding
governmental entities. Service to the surrounding governmental entities is by
contractual agreement.
(2) The Board, at its discretion, may provide service to individual Customers outside its
service area with the approval of the local governmental entity.
(3) Water service may be made available to Premises that has frontage on a public right-
of-way. The Board, at its discretion, may install Water Mains and Customer Water
Services in easements.
(4) Water service is not available where the Board must bring the Customer Water Service
across another parcel or lot without an easement in order to provide service.
(5) In the case where there is more than one Water Main capable of providing service, the
Board shall determine which Water Main will be used for service and the location of
the Customer Water Service connection.
(6) Water service is available in sizes one inch (1") and larger. The Board will evaluate
service sizes two inches (2") and larger before installation to determine the adequacy
of water supply and pressure. Inquiries regarding adequacy of water supply and
pressure should be directed to the Board's System Integrity & Customer Projects
Department.
Approved: 05/27/2008 Page 7 of 38
Effective: 07/01/2008
WATE'-IGH Lansing Board of Service Conditions
Water and Light Water Rule and Regulation 3
B. Agreements
The Board shall require the Customer to enter into a written agreement that details the
terms and conditions and price to be paid by the Customer prior to water service
constriction.
In addition,the Board may negotiate written contractual arrangements as to the provision of
necessary service Facilities, duration of service, amount of deposit and refunds thereon,
minimum bills or other service conditions for Customers or prospective Customers whose
load requirements exceed the capacity of the available distribution system in the area or
whose load characteristics or special service needs require unusual investments by the
Board in service Facilities or where there is not adequate assurance of the permanent use of
the service.
The Board may charge a Connect Fee when the Customer requests the service to be made
active outside normal business hours as specified in Rule 15.
No promises, agreements or representations of any agent or employee of the Board shall be
of binding force upon the Board unless the same is within the authority of that individual
and incorporated in the written agreement.
C. Material Availability
Subject to the restrictions contained in Rule 3.2.A, the Board will constrict water
distribution Facilities and extensions only in the event it is able to obtain or use the
necessary materials, equipment and supplies. The Board may, in its discretion, allocate the
use of such materials, equipment and supplies among the various classes of Customers and
prospective Customers of the same class.
Approved: 05/27/2008 Page 8 of 38
Effective: 07/01/2008
WATE-icy Lansing Board of Use of Service
Water and Light Water Rule and Regulation 4
Use of Service
1. General
Potable water is supplied to a Customer for exclusive use on the Premises to which it is delivered
by the Board. Service may not be shared with another, sold to another, or transmitted off-the
Premises without the written permission of the Board,except as noted in Rule 6.
Use of water is only for the purposes authorized by the Board and is not to be extended to another
building without authorization of the Board.
No person except authorized Fire Department personnel, Director of Public Service, and such other
people as determined by the Board shall operate and/or take water from fire hydrant, Fire Service,
or any other unmetered connection.
2. Access and Damages
The Customer shall provide and maintain appropriate access and working space around water
Facilities in accordance with all applicable Board standards so as to permit ready and safe operation
and maintenance of such Facilities.
The Board's authorized personnel or agents of the Board shall have access to the Customer's
Premises at all reasonable hours for all purposes necessary to conduct business, including without
limitation: 1) install, inspect, read, repair, maintain, test or remove its meters 2) install, operate and
maintain other Board equipment or Facilities, and 3) inspect Fire Service installations, Customer
Piping, backflow devices and to determine the connected water Demand. If the meters, metering
equipment or other Board property are damaged or destroyed through the neglect of the Customer,
the cost of necessary repairs or replacements shall be the responsibility of the Customer.
If, for any reason beyond its control, the Board is unable to read a meter, operate, maintain or make
inspection, including but not limited to, reasons such as Premises being locked, meter being
inaccessible or unsafe conditions, then after due written notice to the Customer, the water service
may be disconnected until such time as arrangements have been made to permit access for Board
inspection and approval and the Customer has paid the appropriate reconnection fee as stated in
Rule 15.
3. Customer Piping and Equipment
The Board may deny or terminate service to any Customer whose water piping or equipment
constitutes a hazard to the Board's employees, equipment or its service to others. However, the
Board is not responsible to inspect the Customer's piping or equipment and shall not be held liable
for any injury or damage resulting from the condition thereof.
The Customer shall install and maintain the necessary Facilities or devices to protect Customer
owned equipment against service interruptions and other disturbances on the Board's system.
The Customer shall install a valve on the outlet of the meter-set and shall maintain it in good repair.
Alterations to the Customer Water Service or associated equipment are prohibited without approval
of the Board.
Approved: 05/27/2008 Page 9 of 38
Effective: 07/01/2008
WATE_ R� Lansing Board of Use of Service
Water and Light Water Rule and Regulation 4
4. Water Quality and Disturbances
The Customer shall operate equipment in a manner that does not cause surges, water hammer or
other problems in the Water Distribution System or to other Customers. If the Board notifies the
Customer of such a condition, the Customer shall discontinue operation of equipment causing such
condition until a correction has been made.
The Customer shall be responsible for the cost of installation, testing and maintenance of backflow
prevention equipment necessary to prevent contamination of the Water Distribution System as
required by the Board.
5. Improper Use and Tampering
Any person that uses water without making proper application for water service shall be responsible
for all charges for water service. The amount of such charges shall be determined by the Board
either by meter readings or on the basis of calculated consumption for the time water was used.
If water is being used by a Customer without proper application for service or water service
connection, the Board may discontinue service without notice. In case of such discontinuance of
service, the Board shall restore service only after the Customer has paid the reconnection fee as
stated in Rule 15
The Board may discontinue service and seek criminal charges, if it is determined that the meter or
piping on the Customer's Premises has been tampered with or altered in any manner to steal water.
If the Board discontinues service for this reason, the Board shall restore service only after the
Customer has paid the reconnection fee as stated in Rule 15,made appropriate restitution for stolen
service and made provisions for metering and/or piping changes as may be required by the Board.
6. Discontinuation of Service
A. Service may be voluntarily or involuntarily disconnected.
(1)Voluntarily
Service may be voluntarily disconnected per the Customer's request. The BWL
recommends that the Customer or the Customer's representative be present for the
disconnection to ensure complete shutoff. It can be difficult for the BWL to confirm that
the service have been completely turned off if there is no one present at the premises
during the shutoff. The Customer is responsible to advise the BWL if the shutoff was not
entirely effective.
(2) Involuntary
Service may be involuntarily disconnected in the following instances:
(a) Noncompliance with applicable Rules and Regulations;
(b) Noncompliance with Municipal, State and or Federal law; or
(c) Issuance of a Court Order
Approved: 05/27/2008 Page 10 of 38
Effective: 07/01/2008
WATER R� Lansing Board of Metering
Water and Light Water Rule and Regulation 5
Metering
1. General
All water sold to Customers shall be measured by commercially acceptable measuring devices owned
and maintained by the Board except where it is impractical to meter, such as for fire fighting,
temporary or special installation, in which cases the consumption may be calculated.
2. Sizing/Installation/Ownership
The Board shall furnish, install, own and maintain all metering equipment and reserves the right to
size such metering equipment.
3. Equipment Location
A. The Customer shall provide, at no expense to the Board, a space/enclosure suitable to the
Board for the installation of the necessary metering equipment. The Customer shall furnish
the space and the provisions for mounting metering and service equipment to meet Board
requirements. Inquiries regarding installation requirements should be directed to the Board's
System Integrity&Customer Projects Department.
B. Wherever possible, metering equipment should be located inside the building served and as
near as practicable to the point where the Customer Water Service enters the building.
C. The space provided must have adequate ventilation and permanent heat to prevent freezing of
the meter and associated piping. A clear overhead space of at least six feet (6') shall be
provided. A floor drain of adequate capacity must be provided adjacent to the meter except
where the Board has deemed it to be impractical to provide such drain.
D. Where an approved location is not available inside the building, the meter shall be located in
a meter manhole or pit at or near the property line, and the cost, ownership and maintenance
of the meter manhole or pit structure and the piping from the outlet of the Meter Set thereof
shall be the responsibility of the Customer, except where the Board has retained ownership.
The customer shall at all times, provide clear access to the meter manhole or pit structure for
the purpose of meter and meter set access and maintenance.
4. Multiple Occupancy Buildings
Where the building owner desires to meter each tenant's water separately, a meter manifold may be
permitted when the following conditions are met.
A. An adequately sized room is made available by the owner for housing the water meters. The
meter room shall be of sufficient size for access and provided with a door which can be fitted
with an approved lock box; and
B. Access to the meter area is by way of a common-use space; and
C. The building owner attaches a tag to the valve on the outlet side of the meter identifying the
number and/or address of the unit served; and
D. The building owner installs a valve on the outlet of each meter-set and
E. The building owner installs a valve at the point where each water supply line enters the
apartment or unit served; and
F. Each meter serves only one apartment or unit, with no interconnecting piping between each
apartment or unit.
Approved: 05/27/2008 Page 11 of 38
Effective: 07/01/2008
WATE-aI—T Lansing Board of Metering
No. Water and Light Water Rule and Regulation 5
5. Damaged or Frozen Meter
The Customer shall be held liable for damage to the meter from acts of carelessness, negligence, or
willful damage by owner or his tenants. The Board will repair any meter so damaged, and the cost
shall be billed to the Customer.
The Board may, after an occurrence of a frozen meter, charge the customer for the replacement of a
frozen meter as provided in Rule 15.
Approved: 05/27/2008 Page 12 of 38
Effective: 07/01/2008
WATE�IIGHT Lansing Board of Application of Rates
Water and Light Water Rule and Regulation 6
Application of Rates
1. General
Water Rates are predicated upon the Board not being required to provide more than one Customer
Water Service to a building or structure. The Board shall separately meter and separately bill
service at different points or at different buildings or structures unless specifically provided for in
the applicable Rate Schedule.
2. Resale
The owner or operator of an office building, apartment building, shopping mall, or similar structure
may purchase water from the Board for resale to occupants on the condition that service to each
occupant shall be metered separately and that the occupants may not be charged more for such
service than the appropriate Rate of the Board available for similar service under like conditions. In
order to qualify for resale to occupants, the owner or operator must state in writing their intent to
resell in the application for service. The owner or operator shall be responsible for payment of
purchased water for resale as required by Rule 7.
The Board shall have no obligation to furnish, test or maintain meters or other Facilities for the
resale of service by the reselling owner or operator to the occupant.
Billing records of the owner or operator may be audited once every 12 to 18 months using generally
accepted auditing practices. The audit shall be conducted by the Board or if the Board elects, by an
independent auditing firm approved by the Board. The reselling owner or operator shall be assessed
a reasonable fee for an audit conducted by the Board.
The owner or operator providing the resale shall be responsible for testing of each occupant's meter
at least once every 3 years. The accuracy of such meters shall be maintained according to the most
recent publication of Table 5-3, "Test Requirements for New, Rebuilt and Repaired Cold-Water
Meters" within the AWWA M6 manual. Meters shall be tested only by outside testing services or
laboratories approved by the Board.
A record of each meter, including testing results, shall be kept by the reselling owner or operator
during the use of the meter and for an additional period of one year thereafter. When requested, the
reselling owner operator shall submit certified copies of the meter test results and meter records to
the Board.
The reselling owner or operator shall render a bill once during each billing month to each of the
occupants' or tenants in accordance with the appropriate Board Rate Schedule. Every bill rendered
by the reselling owner or operator shall specify the following information; The Rate Schedule title,
the due date, the beginning and ending meter reading of the billing period and the dates thereof, the
difference between the meter readings; the amount due for services and/or commodity use, as
applicable to the Rate; subtotal before taxes, other taxes where applicable; the amount due for other
authorized charges; and the total amount due. The due date shall be 21 days from the date of
rendition. The reselling owner operator shall be responsible for all collections and payment disputes
for resale occupants.
Approved: 05/27/2008 Page 13 of 38
Effective: 07/01/2008
WATE"�NT Lansing Board of Application of Rates
10Water and Light Water Rule and Regulation 6
The reselling owner or operator shall supply each occupant with a water system adequate to meet
the needs of the occupant with respect to the nature of service, water quality, pressure, Cross-
Connection control and other conditions of service.
If the reselling owner or operator fails to meet the obligations of this rule, the Board will notify the
appropriate authorities and after reviewing with the reselling owner or operator, the problem(s) is
not resolved, the Board my declare reselling owner or operator in violation of Rule 2.
The renting of Premises with the cost of water service included in the rental as an incident of
tenancy will not be considered a resale of such service.
3. Choice of Rates
In some cases, the Customer may be eligible to take service under any one of two or more Rates.
Upon request, the Board will advise the Customer in the selection of the Rate that will provide the
lowest cost of service, based on the best available information, but the responsibility for the
selection of the Rate shall be the sole responsibility of the Customer.
After the Customer has selected a Rate, the Customer may not change from that Rate to another
Rate until at least twelve (12) months have elapsed. The Customer shall not evade this rile by
temporarily terminating service. The Board may waive the provisions of this paragraph where it
appears that a change of the Rate is necessary for permanent rather than temporary or seasonal
advantage. The intent of this rule is to prevent frequent changes from Rate to Rate.
The Board shall not be responsible to refund the difference in charges under different Rates
applicable to the same class of service, unless the Board provided an incorrect initial service turn-
on Rate setting or unless the Customer makes a written request and has a permanent change in load
profile. Any refuund is subject to Board approval.
4. Apartment Buildings and Multiple Dwelling Structures
An apartment building or multiple dwelling structure served by one meter and containing four (4)
or less Dwelling Units may elect to be billed on the appropriate Residential Service Rate.
5. Billing
Customers having more than one meter shall have consumption computed by individual meter in
accordance with the current Rate Schedule, with the exception of separate meters connected to the
Customer Water Service and installed solely for lawn sprinkling. Lawn sprinkling meters
connected to the Customer Water Service are subject to the Lawn Sprinkling Water Service Rate.
6. Minimum Charges
A minimum charge, as defined by the.Rate in effect, shall be applied to all services and billed to the
Customer. Where the Customer requests that a service be discontinued, the Board shall deactivate
the service by any appropriate means, including without limitation, removing the meter and/or by
disconnecting the service from the Board's Water Distribution System.
Approved: 05/27/2008 Page 14 of 38
Effective: 07/01/2008
WATE-1- Lansing Board of Application of Rates
IM Water and Light Water Rule and Regulation 6
7. Property Owner-Rental Agent Agreement for"Leave On"Service
The BWL may waive application charges to maintain continuity of service at rental property
locations provided: (1) the landlord agrees in writing to assume the responsibility for water
service during the interim between tenants, and (2) the landlord is in compliance with all other
rules and regulations of the Board.
Approved: 05/27/2008 Page 15 of 38
Effective: 07/01/2008
WATE�IIGHT Lansing Board of Responsibility for Payment of Bills
so Water and Light Water Rule and Regulation 7
Responsibility for Payment of Bills
1. General
Each Board Customer is responsible to pay all utility bills as rendered on or before the due date shown
thereon. The Customer remains responsible for payment of the bills until the Customer orders service to
be discontinued and the Board has had reasonable time to secure a final meter reading. Bills are
rendered on approximately a monthly basis. Bills are mailed to Customers approximately fifteen (15)
days before the due date shown on the bill. The Customer shall pay the net amount if paid on or before
the due date on the bill. Failure on the part of the Customer, through no fault of the Board,to receive the
bill shall not entitle the Customer to pay the net amount after the due date of the bill. If a bill remains
unpaid after issuing a five (5) day written shut-off notice, the Board shall have the right to discontinue
service.
In extenuating circumstances, a Customer will be afforded the opportunity to make payment
arrangements.
Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer has
requested a hearing,pending results of the hearing. Service may be discontinued for nonpayment of bills
that are not in dispute.
The Board may also require individual Customers to enter into a written `Billing Service Agreement,"
insuring that the Customer is responsible for all services used and rendered.
The Board will charge a"Non Sufficient Funds Fee"in accordance with Rule 15 for returned checks.
2. Estimated Consumption
Readings may be estimated when conditions warrant. Until reconciled by an actual reading, bills
rendered on estimated consumption have the same force and effect as bills rendered on actual meter
readings.
3. Billing Errors
A. When an error is found to exist in the billing rendered to a Customer,the Board will correct such
error to recover or refiind the difference between the original billing and the corrected billing.
Corrected billings will not be rendered for periods in excess of three (3) years from the date the
error is discovered. Re$inds to Customers will normally be made promptly upon discovery of
the error. Amounts due the Board from the Customer will be subject to normal collection policy
and procedures.
B. When an error is found to exist in the billing of a contract or service agreement with or
governing the Customer, the Board will correct such error to recover or refund the difference
between original billing and the corrected billing. Corrected billings will not be rendered for
periods in excess of three (3) years from the date the error is discovered. Refunds to Customers
will normally be made promptly upon discovery of the error. Amounts due the Board from the
Customer will be subject to normal collection policy and procedures.
Approved: 05/27/2008 Page 16 of 38
Effective: 07/01/2008
WATER R" s-HT Lansing Board of Responsibility for Payment of Bills
im Water and Light Water Rule and Regulation 7
4. Account Security Deposits
The Board shall require an account security deposit from any new or existing Customer with an
unacceptable credit history with the Board. The Board shall apply different rules to new Customers
signing up for service in accordance with Rule 7.4.B. The deposit is normally 2 times the average
monthly bill (actual or estimated) as determined by the Board and shall be applied according to Rule 15.
Security Deposits shall be administered in accordance with Customer Service established Standards and
Guedelines.
The Board may waive deposits in special circumstances. The Board may also demand deposits larger
than 2 times the average monthly bill if the Board determines that a Customer presents a higher than
normal credit risk.
A. Unacceptable cride history includes but is not limited to the following:
(1) The Customer has deliberately misinformed or misrepresented facts to the Board.
(2) The Customer misrepresents their identity.
(3) The Customer fails to provide positive identification at the time of applying for service.
(4) The Customer has diverted or interfered, in an unauthorized manner, with utility service in
the past 6 years.
(5) The Customer has had one or more payments canceled in the last 12 months due to: (1)
non-sufficient funds returned check, (2) account closed returned check, (3) non-sufficient
funds bank bill, (4) account closed bank bill, (5) credit card reversal, (6) or other payment
method cancellation.
(6) The Customer has a prior account that is delinquent within the last 6 years.
B. New Customers may not be required to submit a deposit, in any of the following situations:
Residential Customers
(1) The Customer has no service history with the Board and has been permitted into the Good
Faith Deposit Program in accordance with Customer Service established Standards and
Guidelines.
(2) The Customer has previously established an acceptable payment history with the Board
on a similar account.
(3) The Customer's bill is paid by a governmental agency.
(4) The Customer secures a guarantor; the guarantor has an acceptable payment history.
(5) The Customer provides an acceptable surety bond.
(6) The Customer provides an acceptable credit reference letter from a similar utility
company for a similar account. Account must have been in the Customer's name and
maintained for a minimum of 12 consecutive months.
Commercial and Industrial Customers
(1) The Customer has previously established an acceptable payment history with the Board
on a similar account.
(2) The Customer's bill is paid by a governmental agency.
Approved: 05/27/2008 Page 17 of 38
Effective: 07/01/2008
WATERR&LIGHT Lansing Board of Responsibility for Payment of Bills
Im Water and Light Water Rule and Regulation 7
(3) The Customer secures a guarantor;the guarantor has an acceptable payment history.
(4) The Customer provides an acceptable surety bond.
(5) The Customer provides an acceptable credit reference letter from a similar utility
company for a similar account. Account must have been in the Customer's name and
maintained for a minimum of 12 consecutive months.
The Board will refund deposits to all Customers who have taken service for 12 months and have an
acceptable payment history. The Board will also refund deposits to Customers who have voluntarily
terminated service and paid all charges due.
The Board will pay simple interest accrued on Account Security Deposits held. No interest will be paid
until the deposit is returned to the customer. The interest rate will be updated on July 1 of each year. The
interest rate used to calculate interest will be the sum of the Federal Funds rate in effect on the last day of
March of the current year plus .25%.
Approved: 05/27/2008 Page 18 of 38
Effective: 07/01/2008
WATE'-'IGHT Lansing Board of Dispute and Hearing Procedure
so Water and Light Water Rule and Regulation 8
Dispute and Hearing Procedure
1. Disputes
In accordance with the Lansing City Charter, the Board is required to provide a fair and equitable dispute
and hearing process for its Customers as follows:
A. When any Customer disputes a bill or service and the Board is so advised in writing, the date of
the notice of dispute will be recorded.
B. Service to a Customer shall not be discontinued for nonpayment of a disputed bill if the Customer
has requested a hearing, pending results of the hearing. Service may be discontinued for
nonpayment of bills that are not disputed.
C. The disputed bill or service will be investigated promptly and completely.
D. The Customer will be advised of the results of the investigation.
E. An attempt will be made to resolve the dispute in a manner mutually satisfactory to both parties.
F. The Board will provide the opportunity for each Customer to enter into a reasonable settlement
agreement in order to mutually resolve the disputed claim or to satisfy any liability not in dispute.
G. If a settlement cannot be reached between the Customer and the Board's Account Administrator,
the Customer may choose to appear before the Board's Dispute Review Committee. The review
will be scheduled within ten(10)days of the request or as mutually agreed to by both parties.
H. If a settlement cannot be reached following examination by the Dispute Review Committee, the
account will be referred to the Board's General Manager.
1. If a settlement is not reached after review by the Board's General Manager, the Customer shall be
afforded an opportunity for a hearing.
J. The Customer shall be responsible for payment of all other bills or portions of bills as rendered
which are not in dispute.
2. Hearings
A. Any Customer who disputes the services provided or a billing for services furnished in
accordance with the Board's filed Rates, Rules and Regulations or established policies or
procedures may request a hearing. If a hearing requested is based on a disputed past due bill, the
request must be made within ten (10) calendar days following the final outcome of the dispute
process. Any request for a hearing may be made in writing and received by the Board's corporate
office at 1232 Haco Drive, Lansing,Michigan,48912.
B. On receipt of a request for a hearing, the Board will forward this request to an independent
Hearing Officer. The Hearing Officer will arrange a time for the hearing and advise both the
Customer and the Board of the date, time and location in writing. The hearing will be scheduled
during normal business hours. Failure of the Customer or Board to attend the hearing without
due cause or prior request for adjournment will constitute a waiver of right of that party to the
hearing.
C. The Board and the Customer shall:
(1) Have the right to be represented by Counsel or other persons of their choice.
(2) Have the right to present evidence,testimony and oral and written argument.
(3) Have the right to cross-examine witnesses appearing on behalf of the other party.
Approved: 05/27/2008 Page 19 of 38
Effective: 07/01/2008
WATE"-IGH Lansing Board of Dispute and Hearing Procedure
WA Water and Light Water Rule and Regulation 8
(4) Have the right to have the hearing recorded by a court reporter at the expense of the
Customer. The Hearing Officer shall also have the right to have the hearing recorded by a
court reporter. Recordings will be preserved at least six (6) months from the date of the
hearing. All evidence relevant to the dispute will be received.
D. For each hearing, the Hearing Officer shall compile a hearing record which will contain;
(1) A concise statement in writing of the position of the Board in relation to the dispute.
(2) A concise statement in writing of the position of the Customer in the dispute.
(3) Copies of all evidence submitted by the parties.
E. If a decision is reached during the hearing, the Hearing Officer shall state the decision to both
parties. If the Hearing Officer does not reach a decision during the hearing, additional time will
be allowed to reach a decision. When a decision has been reached, either at the hearing or later,
the Hearing Officer will prepare a report which shall contain the following:
(1) A concise summary of the evidence and argument presented by the parties.
(2) The decision and a statement that the decision of the Hearing Officer was based solely on
the evidence presented and reasons therefore.
(3) Advise that the representatives of the Board and the Customer have a right to file an appeal
with the Board of Commissioners.
(4) A statement as to any settlement agreement.
(5) A statement that the dispute determination is binding on both parties unless appealed to the
Board of Commissioners within ten(10) days of the date of mailing of decision,and that any
request for appeal must be in writing to the Corporate Secretary.
F. The Hearing Officer shall file the written report with the Board of Commissioners and the Mayor
of the City of Lansing. A copy of the report shall be sent to the Customer via certified mail.
G. If the dispute is unresolved and the decision appealed, the Hearing Officer shall make
recommendations to the Board of Commissioners on the dispute. The Secretary of the Board will
arrange a time for the appeal and advise both the Customer and the Board of the date, time and
location in writing. Failure of the Customer to appear at the time set for the appeal without due
cause, or to request an alternate date, will constitute a waiver of right to appeal.
H. The Board of Commissioners shall report its final action on any unresolved disputes together with
the Hearing Officer's report and recommendations to the Mayor and the City Council of Lansing,
Michigan.
I. The Mayor may make recommendations to the Board of Commissioners on each unresolved
dispute.
Approved: 05/27/2008 Page 20 of 38
Effective: 07/01/2008
wATE'-ai- Lansing Board of Water Customer Choice Program
Water and Light Water Rule and Regulation 9
Water Customer Choice Program
1. General
The Board will accept and permit Customer installation of Customer Water Service(s), and On-Site
Water Mains, except Meter Set and metering equipment,provided the following conditions are met.
(1) The Board has approved the Customer's contractor prior to construction.
(2) The Customer has signed, and complied with, a Customer Choice Water Service agreement
with the Board prior to construction.
(3) The Customer has provided, and the Board has approved drawings, material lists and a
flushing and disinfection plan.
(4) The Customer has paid any and all past and current applicable fees and charges.
(5) The installation of Customer Water Service(s) and/or On-Site Water Mains has been inspected
and approved by the Board.
(6) Customer has dedicated Customer Water Service(s)and/or On-Site Water Mains to the Board.
Inquiries regarding the Water Customer Choice Program should be directed to the Board's System
Integrity&Customer Projects Department.
2. Contractor Qualification and Approval
Contractors desiring to become qualified and approved to install On-Site Water Mains and Customer
Water Services should contact the Material Services Management Resource Center. A charge for the
initial Permit Application and an Annual Contractor's Qualification Permit shall be assessed as stated
in Rule 15.
3. Residential Services
Customers installing residential water services shall be required to pay an "Inspection" charge as
stated in Rule 15 for each inspection.
4. Deposit and Non-Refundable Contributions for On-Site Water Mains and Large Services
A deposit and non-refundable contribution shall be required for any Customer desiring to install On-
Site Water Mains or commercial Customer Water Services. The amount of such deposit and non-
refundable contribution shall be as stated in Rule 15.
Upon project completion, the deposit shall be adjusted to reflect the actual Board cost with a final
billing or refund made to the Customer, except no billing or refund will be made if the actual cost is
within$100 dollars of the actual cost.
5. Permits
The Board will obtain the MDEQ Permit for Water System Construction. The Customer shall be
required to obtain all other permits.
Approved: 05/27/2008 Page 21 of 38
Effective: 07/01/2008
warER&LIGHr Lansing Board of Distribution System Extensions
Water and Light Water Rule and Regulation 10
Distribution System Extensions
1. General:
A. Request for Distribution System Extension
Rule 10 sets forth the conditions under which the Board will extend its Water Distribution
Systeun.
B. Ownership
The Board shall provide, own, maintain and specify all of its distribution Facilities
including location, except as otherwise expressly provided by agreement between the
Board and the governmental entity or Rule 9. "Water Customer Choice ProQram'. No
ownership rights to Board Facilities shall pass to any owner(s), developer(s), or
Customer(s)by reason of any contribution required hereunder.
C. Availability of Distribution System Extension
The Board shall in its sole discretion determine whether or not any particular Water
Distribution System extension shall be made, regardless of its intended use, and establish
any special conditions or requirements that may apply, including but not limited to
entering into an agreement with a developer,property owner(s) or governmental entity.
Water Distribution System extensions are generally available throughout the water service
area. Water Distribution System extensions may also be available outside the water
service area to serve individual Customers. Water Distribution System extensions outside
the service area shall be installed at the Board's discretion, and only with the approval of
the local governing entity.
D. Contribution In Aid of Construction for System Extensions
The owner(s), developer(s), governmental entity(s) or Customer shall be required to make
a contribution in aid of constriction to the Board to cover the cost of the Water
Distribution System extension prior to construction, except as provided otherwise by
agreement between the Board and the governmental entity or in Rule 9 "Water Customer
Choice Program".
The contribution in aid of constriction to the Board for Water Distribution System
extensions shall, at the Board's option,be of the following:
(1) At cost—The Customer will provide a deposit based on the Board's estimated cost
to constrict the Water Distribution System extension. Reconciliation between the
deposit and actual cost will be made upon project conclusion.
(2) Not-to-exceed — The Customer will provide a deposit based on the Board's
estimated cost to construct the Water Distribution System extension. If the actual
cost to construct the Water Distribution System extension is less than the deposit,
the Board will refund the difference upon project conclusion.
(3) Firm Price—The Customer will provide a one-time payment based on the Board's
estimated cost to construct the system extension. No reconciliation or refund will
be made upon project conclusion.
Approved: 05/27/2008 Page 22 of 38
Effective: 07/01/2008
WATErR&� L� Lansing Board of Distribution System Extensions
Water and Light Water Rule and Regulation 10
E. Installation of Distribution System Extension
All Water Distribution System extensions shall be installed by the Board or its
agent except as provided in Rule 9 "Water Customer Choice Pro ram".
Water Distribution System extensions shall be installed in public right-of-way
except in certain cases where, at the Board's discretion, they may be installed in
dedicated recordable easements on private property provided at no cost to the
Board.
Water Distribution System extensions shall traverse the total frontage of all
property served and all streets within a new subdivision. The Board, in its sole
discretion, may exempt side-lot streets where a Water Main is not required either to
provide service or to provide proper system flow and pressure.
Service Stubs shall be installed in conjunction with the Water Distribution System
extension except in certain cases as determined by the Board.
The Customer shall provide the Board a approved site plan for Board review and
approval.
Installation of a Water Distribution S ste extension will be initiated provided:
(1) The owner, developer, governmental entity, or Customer has entered into a
written agreement with the Board for the construction of the Water
Distribution System extension.
(2) The owner, developer, governmental entity, or Customer has paid the cost of
the Water Distribution System extension and any required system
reinforcement in a manner as determined by the Board or has fulfilled the
commitments as otherwise provided by agreement between the Board and the
governmental entity.
(3) Where applicable, the owner, developer, or Customer has recorded the plat or
final preliminary approval has been received, monuments or markers are in
place, lot lines staked, sewers installed, streets at finished grade(before gravel
and curb and gutter installation), sidewalk grading completed, and the ground
in workable condition.
(4) Construction during the winter season will only occur at the Board's
discretion.
F. Adequate Pressure and Flow Capacity
The Board shall not make Water Distribution System extensions unless adequate
pressure and flow capacity is available at the location of the Water Distribution
System extensions as determined by the Board. Variances from the Board's flow and
pressure capacity requirements may be granted in writing by the Board and where
applicable, the governing Fire Marshal.
Where Water Distribution System reinforcement is required to provide adequate
pressure and flow capacity at the location of the Water Distribution System extension,
the Customer, governmental entity or other benefiting parties shall bear the cost of
such Water Distribution System reinforcement.
Approved: 05/27/2008 Page 23 of 38
Effective: 07/01/2008
WATER Lansing Board of Distribution System Extensions
Water and Light Water Rule and Regulation 10
OWN
G. Permits
All permits will be obtained by the Board or its agent, except as provided in Rule 9"Water
Customer Choice Program", before construction is initiated.
H. Staking Requirements
The Customer shall provide all staking as required by the Board for installation of the
Water Distribution System extension. Inquires regarding staking requirements should be
directed to the Board's System Integrity& Customer Projects Department.
I. Fire Hydrants
Water Distribution Svstem extensions shall include fire hydrant coverage as determined by
the Board or governmental entity. Fire Hydrants designated as Private Hydrants shall be
billed according to Rate Schedule 6 and are the responsibility of the property owner.
J. Oversizing of Distribution System Extension
To meet the needs of existing and future Customers within the governmental area(s), the
Board may choose to install a larger size Water Main than that needed for the Water
Distribution Svstem extension. In such cases, the cost of oversizing shall be borne by the
benefiting governmental entity(s) or as provided for in the agreements between the Board
and the governmental entity(s).
Where the Board has determined that oversizing of a Water Main is needed for its own
purposes, the Board shall be responsible for the cost of such oversizing.
K. Economic Development Considerations
Where the Board determines that the Water Distribution Svstem extension will promote
development that provides substantial and sustainable economic benefits to its Customers
or the Lansing region, the Board will consider an offset to its fees and charges and/or an
economic incentive subject to its availability.
Where a Customer has obtained an approved Lansing Brownfield Plan and entered into a
Brownfield Reimbursement Agreement with the Lansing Brownfield Redevelopment
Authority (LBRA), The Board, subject to agreement with the LBRA, may seek
reimbursement for its Water System Connection Fee (Rate 3 of the Board's Rate
Schedule) directly from the LBRA. In the event the Board is not reimbursed for its Water
System Connection Fee from the LBRA, the Customer shall be required to pay the
remaining amount due.
L. Easements and Tree Removal Permits
Where the Board has agreed to construct the Water Distribution Svstem extension in an
easement and prior to such construction, the owner(s), developer(s) or Customer(s) shall
be required to furnish, at no expense to the Board, recordable easements in a form
satisfactory to the Board. The easement shall grant right-of-ways suitable for the ingress,
egress and the installation and maintenance of the Water Distribution System extension
including any Water Distribution System equipment as designed by the Board for present
and future service. The owner, developer, or Customer shall also, in a form satisfactory to
the Board, grant the Board permission to trim and remove trees as necessary to protect the
integrity of its distribution system and the safety and welfare of its employees and the
public.
Approved: 05/27/2008 Page 24 of 38
Effective: 07/01/2008
WArE" R' a� Lansing Board of Distribution System Extensions
Water and Light Water Rule and Regulation 10
In the event the required easements and tree removal permits are not provided by the
owner(s),developer(s) or Customer(s)for such extension,the Board may elect to construct
all or any part thereof along public highways or other private property. In such event, the
Board may require the owner(s), developer(s) or Customer(s) to pay the added
construction expense occasioned by the use of such highways or other private property,
plus any expense encountered in acquiring permits and easements on other private
property when necessary to provide service to the owner(s),developer(s)or Customer(s).
M. Non-Standard Equipment
Where the Customer requests that the Board utilize equipment which differs from its
normal specifications, purchased or installed, the Board may elect to provide such non-
standard equipment with the Customer paying any additional cost.
N. Non-Standard Construction
Where, in the Board's judgment, practical difficulties exist such as unexpected
governmental requirements, frost or wet conditions, contaminated soil, rock within the
excavation surface, or where it is necessary to deviate from the Board's approved
construction standards or established distribution system design, the Board may require
the Customer to pay for the additional cost resulting therefrom.
O. Other Facilities
It will be the responsibility of the owner(s), developer(s) or Customer(s) to identify and
provide locations of any existing privately owned underground Facilities such as lawn
sprinkler systems, field drainage systems, septic tanks, Customer owned electric lines, etc.
If privately owned Facilities are not properly located, the Board does not assume
responsibility for any damage to these Facilities.
P. Construction Date of Distribution System Extension
The Board will, based on availability of work crews and material, and subject to approvals
of the appropriate regulatory agencies, utilize best efforts in constructing the Water
Distribution System extension to meet a mutually agreed upon date or as required by
agreement between the Board and the governmental entity.
2. Water Facility Relocations and Removals:
(1) At the request of a Customer or developer, or as required due to a conflict, or to meet Board
Standards,the Board will relocate or remove its water Facilities provided:
A. The relocation or removal is feasible and meets Board Standards.
B. The Customer or developer obtains approval from all Customers impacted by the
proposed relocation.
C. The relocation or removal does not degrade water reliability or quality.
D. All governmental approvals,permits and easements are obtained
Prior to any relocation or removal of water Facilities, the Customer or developer shall be required
to make a nonrefundable contribution in aid of construction. The aid in contribution of
construction shall reimburse the Board for all relocation and removal costs including material,
labor, the cost of breaking and repairing streets, walks, parking lots, driveways, etc., repairing
lawns,replacing shrubs, flowers, etc., and any right-of-way costs as per this Rule 10,plus the cost
Approved: 05/27/2008 Page 25 of 38
Effective: 07/01/2008
WATER R&LIGHT Lansing Board of Distribution System Extensions
Water and Light Water Rule and Regulation 10
of any necessary modifications to the Board's Water Distribution System affected by the
relocation or removal, less the salvage value of any portion of the water Facilities removed.
(2) If, at any time subsequent to completion of the Water Distribution System extension, it is found
that Water Mains or related Facilities are not at the correct location or at the proper elevation due
to changes beyond the control of the Board, the Customer or developer shall reimburse the Board
to relocate Water Mains or related Facilities to the correct location or at the proper elevation.
Approved: 05/27/2008 Page 26 of 38
Effective: 07/01/2008
wATE"—'aa Lansing Board of Services
Water and Light Water Rule and Regulation 11
Services
1. General
The Customer Water Service shall be furnished, installed, owned and maintained by the Board
except as otherwise provided in Rule 9 "Water Customer Choice Program". In the course of
maintaining or repairing a Customer Water Service, the Board shall bear no responsibility for
damage incurred or restoration to areas where the Customer Water Service passes under any area
not readily accessible. The Customer shall be responsible for additional repair costs due to these
encumbered services.
The Service Location shall be specified by the Board and shall be located so that the Board's
service Facilities meet or exceed all clearance requirements and applicable local codes.
Should it become necessary for any cause beyond the Board's control to change the Service
Location, the entire cost of any changes in the Customer's service shall be the responsibility of
the Customer.
Should it become necessary for the Board to reinforce or upgrade the Water Distribution System
to accommodate the requested service, a nonrefundable contribution in aid of construction shall
be required as determined by Rule 10.1.D.
2. Temporary Water Service
Temporary water service is available to contractors and others for construction activities, sewer
flushing, festival usage, and bulk tanker fill etc. The charge for such temporary water services
shall be as specified in Rule 15.
3. Domestic Water Service
A. General
It shall be the Customer's responsibility to determine the correct pipe size for the Customer Water
Service prior to making application.
Plans shall be submitted to the Board's System Integrity & Customer Projects Department for
services two inches(2") and larger or unusual connections.
Customer Water Services shall be installed from the Water .Ntain to the Customer's building or
metering manhole or pit in the most direct manner. The pipe comprising the connection shall
cross only that legally described property upon which the building to be serviced is located.
It is the intent of the Board that all underground water pipes to the meter or meter manhole or pit
be installed and maintained by the Board. However,where unusual or special circumstances exist
or as allowed by Rule 9 "Water Customer Choice Prorrrarn", the Customer may request approval
to install underground water pipes. Applicants shall submit plans and specifications to the
Board's System Integrity& Customer Projects Department for approval prior to installation.
No person other than an authorized employee or agent of the Board shall open or close the
outside valve (curb stop) on the Customer Water Service. No person except an authorized Board
employee, agent of the Board or as allowed by Rule 9 "Water Customer Choice Program" shall
tap, revamp or connect to a Water Main or any of the pipes comprising the Customer Water
Service.
Approved: 05/27/2008 Page 27 of 38
Effective: 07/01/2008
WATE&TIGHT Lansing Board of Services
Water and Light Water Rule and Regulation 11
B. Customer Connections to Board Facilities
It shall be the Customer's responsibility to connect his plumbing to the Customer Water Service
or meter-set installed by the Board. All work shall be in firll compliance with all applicable
plumbing codes.
Where the water Meter Set is installed inside, the Customer shall connect by first installing a
valve at the outlet of the Meter Set.
Where it is required that the Meter Set be installed outside in a meter manhole or pit, the
Customer shall connect at the outlet of Meter Set. The customer shall install a shut-off valve after
the outlet of the Meter Set, normally installed at the inside wall of building to be served.. The
customer shall be responsible to install, own and maintain Customer Piping from the outlet of the
Meter Set and the customer shall be responsible to install, own and maintain the meter manhole
or pit structures which house the Meter Set, except where the Board has retained ownership.
No connection to the Customer Water Service shall be allowed except at the outlet side of the
Meter Set.
C. Charges
For standard installations, the Customer shall pay a "Water Service" charge for the cost of the
Customer Water Service installation prior to construction, in accordance with Rule 15 in a
manner as determined by the Board.
Where a water service connection is made from a Water Main subject to a "Front Foota�,Te
Recovery"charge, such charge shall be as stated in Rule 15.
All new Customer Water Service connections made to Water Mains shall be subject to a System
Connection Fee in accordance with Rate Schedule 3 of the Board's Water Rate Schedules and
any applicable charges contained in agreements between the Board and the governmental entity.
Where, in the Board's judgment, practical difficulties exist such as unexpected governmental
requirements, frost or wet conditions, contaminated soil, rock within the excavation surface, or
where it is necessary to deviate from the Board's approved construction standards or established
distribution system design, the Board may require the Customer to pay for the additional cost
resulting therefrom.
Where it is necessary for installation of a Customer Water Service to be scheduled during the
"Winter Construction Period" as defined in Rule 15, the Customer may be required to pay a
"Winter Constriction Charge"as established therein.
The Customer shall be responsible for additional repair costs due to encumbered Customer Water
Services or damage as a result of negligence, willful damage or carelessness by the Customer,
owner or tenants.
4. Fire Service
A. General
The Board will provide water service for the sole purpose of providing direct fire protection.
This service may include but is not limited to:
(1) Public Fire Hydrants
(2) Private Fire Hydrants
(3) Connection to fire sprinkler systems
Approved: 05/27/2008 Page 28 of 38
Effective: 07/01/2008
WATER IGHT Lansing Board of Services
Water and Light Water Rule and Regulation 11
The Board owns and maintains all hydrants and all Fire Services up to the point of entry to the
Customer's building, except were Customer Owned Hydrant or Fire Services are connected after
the Board's metering point.
An approved backflow prevention device shall be installed on the Fire Service and detector check
by-pass line. The backflow devices shall be installed, owned, tested and maintained by the
Customer. Test results shall be sent to the Board's System Integrity & Customer Projects
Department.
A detector check by-pass meter shall be installed, owned and maintained by the Board to monitor
water consumption through the Fire Service. Water used for fire fighting is paid through the
monthly Fire Service charge and is not metered. The Customer shall contact the Board's System
Integrity & Customer Projects Department for fire system testing. In addition to the monthly Fire
Service charge, the Customer shall be billed for excessive use of water for fire system testing and
any water used from the Fire Service for non-fire fighting purposes.
The Board reserves the right to inspect Fire Service installations.
Fire Services are also subject to Rule 1 1.3.A.
B. Charges
The Board shall assess a"Fire Hydrant"charge as stated in Rule 15 prior to the installation of any
individual fire hydrant.
The Customer shall pay the Fire Service installation cost prior to construction.
The Customer shall be responsible for additional repair costs due to encumbered Fire Services or
damage as a result of negligence, willful damage or carelessness by the Customer, owner or
tenants.
5. Lawn Sprinkler(Irrigation) Service
Where a Customer requests that a separate meter be installed in parallel to an existing meter or
that a separate meter be installed in conjunction with a new service installation for water use that
does not enter the wastewater system and is permitted by the local governmental entity, the
Customer shall pay the amount specified in Rule 15 prior to installation.
Such separate meter shall be furnished and installed by the Board at an acceptable location. In no
case shall this meter be larger than the service line size.
The Customer shall install a valve at the outlet of the meter-set.
An approved backflow prevention device shall be installed on all lawn sprinkler/irrigation
services. The backflow devices shall be installed,owned,tested and maintained by the Customer.
6. Water Facility Relocations and Removals
The Board will relocate or remove its water Facilities in accordance with Rule 10.2.
7. Lead Service Pull Ahead Program
A. Where a customer has an identified lead service and desires to have that service replaced
before the BWL Schedule Replacement date AND the customer does not qualify to be
included in the Sensitive Population Replacement Schedule, the customer is eligible for a
credit against the cost to replace the service and or stub as stated in Rule 15.
B. For direct replacements of 1"or less standard copper service size the customer will utilize the
Customer Choice Program(Rule 9).
Approved: 05/27/2008 Page 29 of 38
Effective: 07/01/2008
WATE�I® Lansing Board of Services
IM Water and Light Water Rule and Regulation 11
C. For direct replacement of service and or stub greater than 1"the Customer Project engineer
will estimate the replacement and credit.
D. For all upgrades, renovation and split services the Customer Projects engineer will estimate
the replacement and credit.
Approved: 05/27/2008 Page 30 of 38
Effective: 07/01/2008
TATE"RkLIGe Lansing Board of Booster Pumps
Water and Light Water Rule and Regulation 12
Booster Pumps
Where the Customer uses a booster pump to increase pressure to the Customer's internal plumbing,
the pump shall be of such capacity to maintain the suction side of the pump at or above 35 psi.
Where a jockey pump is used to maintain pressure on fire sprinkler systems or other unmetered Fire
Service,the jockey pump must take suction from a metered Customer Water Service.
The Customer shall suitably pipe, valve and protect all booster pumps such that the boosted pressure
will not cause backflow into the Board's Water Distribution System.
_
All booster pumps having a capacity that could develop velocities in excess of 10 feet per second in
the Customer Water Service shall have modulating valves installed on the discharge so that start-up or
shut-down pressure surges will not be generated back into the Board's Water Distribution Svstem.
Approved: 05/27/2008 Page 31 of 38
Effective: 07/01/2008
waTE'�ickr Lansing Board of Water Storage Facilities
Water and Light Water Rule and Regulation 13
Water Storage Facilities
Where the Customer desires to maintain a stored water facility of any type (elevated storage tank,
ground storage tank, etc.) that is directly connected to the Board's Water Distribution System, the
storage vessel must be approved by the Board and any other agency or regulatory body with
jurisdiction over the facility. Applicants shall submit plans and specifications to the Board's System
Integrity& Customer Projects Department for approval prior to installation.
The Customer must use a metered Customer Water Service for water used to fill, flush, and/or
overflow such storage tanks,including those tanks used for fire protection purposes.
The stored water facility shall include provision for protection against backflow into the potable water
system as outlined in Rule 14.
Approved: 05/27/2008 Page 32 of 38
Effective: 07/01/2008
77TE- 77 Hr Lansing Board of Cross Connection
sm Water and Light Water Rule and Regulation 14
Cross—Connection
1. General
A Customer shall not create or allow any actual or potential physical connection between a potable
water line and a non-potable fluid, such that it is possible for the non-potable fluid to enter the potable
water system.
Potable water is provided to the Customer subject to the Board's Cross Connection Control Program
which is available by contacting the Board's offices at 1232 Haco Drive, Lansing or on the Board's
Internet Web site at www.lbwl.com.
2. Installation of Backflow Prevention Devices
The Customer will be required to install a Backflow prevention device on a Customer Water Service
to assure containment when the Board determines that an unprotected Cross-Connection exits. The
Backflow prevention device shall be purchased, installed, tested and maintained by the Customer.
The Customer must obtain the Board's approval of the type and manufacturer of the device. The
Customer shall install the device at the termination of the Customer Water Service at the outlet side of
the secondary valve and shall be installed in accordance with good design practice. Unprotected
bypasses are not permitted.
If, in the opinion of the Board the building use represents an extreme hazard, or that multiple hazards
exist within the building, or Customer Piping (internal or external) is too complex to provide for
reasonable inspection, or there exist a high potential for future cross connections, a backflow
prevention device may be required at the Service Location, in addition to internal protection.
3. Inspection and Maintenance of Backflow Prevention Devices
Backflow prevention devices must be installed in an area that will permit easy access for inspection,
testing, and maintenance. The Board shall specify inspection and testing of all backflow prevention
devices on a regular schedule. If a device is found to be defective, the Customer shall repair or
replace the equipment as necessary within thirty days. The Customer shall then notify the Board of
compliance. Test results shall be sent to the Board's System Integrity & Customer Projects
Department.
The Customer shall permit access for inspection by the Board of any backflow prevention devices and
all internal plumbing with reasonable prior notice.
4. Compliance
The Customer must immediately correct any potentially hazardous backflow condition found during
an inspection of internal plumbing. Failure to take adequate corrective action may result in
termination of water service.
5. Severe Hazard Locations
Customer Water Services serving the following Facilities must be protected against backflow. A safe
air gap or reduced pressure backflow preventer is generally specified for the following uses:
(1) Hospitals,clinics, sanitariums and biological research centers
(2) Morgues,funeral homes and other places with autopsy Facilities
Approved: 05/27/2008 Page 33 of 38
Effective: 07/01/2008
WATER aucH"T Lansing Board of Cross Connection
IN Water and Light Water Rule and Regulation 14
(3) Waste-treatment plants (both solid and liquid waste)
(4) Chemical plating plants
(5) Industrial plants having complex plumbing systems not visually traceable in their entirety
(6) Premises with an auxiliary water supply
(7) Premises where inspection is restricted
(8) Laboratories
(9) Marinas
(10) Food and beverage processing plants
(11) Petroleum processing or storage plants
(12) Radioactive material processing plants
(13) Premises with reclaimed water systems
(14) Facilities using treated water for process purposes
A pressure-type vacuum breaker is recommended for the following uses:
(1) Underground lawn sprinkler systems
(2) Irrigation systems
6. Secondary Supplies
A Customer's potable water plumbing cannot be connected to any well-water or surface water source,
or to any water storage tank not approved by the Board.
Approved: 05/27/2008 Page 34 of 38
Effective: 07/01/2008
WATER&LIGH Lansing Board of Schedule of Fees & Charges
Water and Light Water Rule and Regulation 15
Schedule of Fees & Charges
WATER FEES and CHARGES
When A hed Charge
Charge Description pp
Water Main Installation Based on design including fire protection Firm price quote,not to exceed
coverage quote or at cost
Water Main Front Footage Recovery /of the charge for either side of street if not
previously collected. $55 /ft
On 6" S70 /ft
On 8" $110 /ft
On 12" $135 /ft
On16"
When requested b
Fire Hydrant Installation 9 y Customer Firm Price Quote
Up to and incl. 1"Water Service
Main-to-Curb Box Stub on previously $2,000 per stub plus
installed water mains restoration cost
Curb Box-to-Building(Trenched) $800 minimum,$17 /ft in
excess of 45 feet plus
restoration cost
Curb Box-to-Building(Bored) 51,850 minimum,$39 /ft in
excess of 45 feet plus
restoration cost
Indoor Meter Set—Standard $195
Water Services(BWL Installed) Indoor Meter Set-With Split Irrigation $265
Outdoor Meter Set with Meter pit $2,055
Outdoor Irrigation Meter Set with Meter pit $2,055
Outdoor Meter Set with Meter pit—Customer $120
Choice Program(labor only)
(Connection Fee applicable) Retrofit of existing service to allow for split $410
irrigation service
Charge for setting meter on a split service after S75
initial installation
Greater than 1"Water Service Firm price quote
Main-to-Curb Box Stub
Curb Box-to-Building Firm price quote
Meter Set—greater than 1"less than 3" Firm price quote
service Meter Pit set—Customer Choice $165
Program(labor only)
Spilt Irrigation Service Firm price quote
Page 35 of 38
Approved: 05/27/2008
Effective: 07/01/2008
WATEu'GHT Lansing Board of Schedule of Fees & Charges
Water and Light Water Rule and Regulation 15
WATER FEES and CHARGES
Charge Description When Applied
Charge
Lead Service Pull Ahead Program Reimbursement of actual cost up to the following
Credits- Utilizing Customer Choice schedule
Program
Up to and including 1"diameter lead services and
stubs-direct replacement to BWL Standard
Stub(Main-to-Curb Box) S 1,520 credit maximum
Service(Curb Box-to-Building) S 1,380 credit maximum
Stub and Service $ 2,900 credit maximum
Greater than 1"Diameter lead services and stubs- Estimated Credit
direct replacements to BWL standard
For all Upgrades,Renovations and Split Services of Estimated Credit
existing lead services to BWL standard
Winter Construction Charge Water Services7and derS15 /Trench ftGreater than 2" ice Firm price quote
December 15—March 31 In addition to normal charge
Damage Meter Charge Upon occurrence
For services:
Up to 1" =S200
1 %=Labor and Material*
2"=Labor and Material*
*minimum charge of S400
Hydrant Flow Testing When requested by Customer
$250 ea.
-7
Bulk Water Permit Fee Initial application fee
Bulk Water Renewal Fee $110 ea
Consumption Fee Yearly
(Filled at Hazel Street Yard Hydrant) $30 yearly
For commodity used S Commodity charge/ccf
+chemical charge-
calculated according to
current General Water
Service Rate 2.
Domestic Service Inspection Fee Each inspection visit for 2"or less diameter services $75 ea.
(Customer Choice Program) only—no engineering drawings or service
evaluation required.
Permit Application Initial request by contractor seeking qualification $250
(Customer Choice Program)
Annual Contractor's Qualification Annually
permit fee S 150
(Customer Choice Program)
Approved: 05/27/2008
Effective: 07/01/2008 Page 36 of 38
WATE® Lansing Board of Schedule of Fees & Charges
Water and Light Water Rule and Regulation 15
WATER FEES and CHARGES
Charge Description When Applied Charge
Engineering,Inspection and On-site mains and commercial services Deposit.of5%for inspection,
Administration actual cost of inspection that
(Customer Choice Program) are less than or exceeding
deposit will be reimbursed or
billed. Additionally a
nonrefundable 3%for
engineering and admin for
projects based on BWL
Estimated construction cost of
$100,000 or less
Deposit of 4%for inspection,
actual cost of inspection that
are less than or exceeding
deposit will be reimbursed or
billed. Additionally a
nonrefundable 2%for
engineering and admin for
projects based on BWL
estimated construction cost of
>$100,000
$1,000 minimum non
refundable fee for construction
inspection and$600 minimum
non refundable fee for
engineering-and administration.
Temporary Hydrant Usage for Within BWL service area for construction use
construction,festivals and
governmental special use by special Permit Fee per project $150
permit.
(A) 1"RPZ backflow device plus $380 if required.
Commodity fee $45 month or portion thereof
(B) 2"RPZ backflow device plus $720 if required
Continued on next page Commodity fee $130/month or portion
thereof
(C) Other approved backflow prevention
device Cost based on estimated usage
Temporary Hydrant Usage for Non-compliance fee $250 deposit
construction,festivals and
governmental special use by special Hydrant wrench S45
permit.
Continued from previous page Water Theft Penalty Fee $500 1"occurrence
Up to$1500 2nd occurrence
Up to S5000 3`d occurrence
and permit revocation
Festivals,non-profit or otherwise 1" 1-3 days=$100
-includes rental of RPZ 4-7 days=$300
8+days=$500
2" 1-3 days=$250
4-7 days=$500
8+days=$750
Metered use for approved governmental special use Setup and removal cost plus
—includes rental of RPZ Residential Water Service
Rate 1 commodity charge.
Approved: 05/27/2008 Page 37 of 38
Effective: 07/01/2008
WATE�UGHT Lansing Board of Schedule of Fees & Charges
so Water and Light Water Rule and Regulation 15
WATER FEES and CHARGES
Charge Description When Applied Charge
Security Deposits—Residential For all new customers unless waived by conditions
stated in Rule 7.
Water&City Sewer $1 l2
Water Only $43
Security Deposits—Commercial& For all new customers unless waived by conditions 2 times average monthly bill
Industrial stated in Rule 7.
Connect fee 7:30 a.m.—5:30 p.m.weekdays No charge
After 5:30 p.m.on weekdays or weekends and $l35
holidays
Reconnection Fee
Non-pay(Normal hours) 7:30am—5:30 pm weekdays S25
Non-pay(Other than normal hours) After 5:30 p.m.on weekdays or weekends and $135
holidays
Meter Tampering Any time $135
Missed Appointment,No Show,No After second occurrence,per occurrence $30
access Fee
Non Sufficient Funds(NSF)Fee For Non Sufficient Funds on Checks S30
Meter Calibration Charge Customer request meter calibration check is within $90
plus or minus 1.5%of accuracy
Charges other than those published Relocations,repeat thawing,damages,etc. At cost
Approved: 05/27/2008 Page 38 of 38
Effective: 07/01/2008
Approved by the Board. May 27, 2008
MINUTES OF THE BOARD OF COMMISSIONERS' RESCHEDULED MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, March 25, 2008
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Hack
Drive, Lansing, Michigan.
Present: Commissioners Robert Cochran, Tony DeLuca, Semone James, Peter Kramer, Frank
Lain, Julee Rodocker and Sandra Zerkle.
Absent: Commissioner Joseph Graves
The Secretary declared a quorum present.
Chairperson James called the meeting to order at 5:30 p.m.
APPROVAL OF MINUTES
Motion by Commissioner DeLuca, seconded by Commissioner Cochran, to approve the minutes
of the rescheduled regular board meeting held January 29, 2008.
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.
There were no public comments.
COMMUNICATIONS
None.
COMMITTEE REPORTS
Board Meeting Page 2 of 31
March 25,2008
WATER&LIGHT
Xemefown People.
Hometown Power.
BOARD RETREAT SUMMARY
February 1, 2008—8:30 a.m. to 1:30 p.m.
The James B. Henry Center for Executive Development
3535 Forest Road—Lansing
Present: Commissioners Robert Cochran, Tony DeLuca, Joseph Graves, Semone James, Peter
Kramer, Frank Lain, Julee Rodocker, and Sandra Zerkle. Absent: None
Facilitator: Bryan Singletary, President of Practical Energies
Staff Present: Acting Corporate Secretary Rosemary Sullivan
The Board of Commissioners met with Facilitator Bryan Singletary on day one of the board
retreat to receive guidance regarding board development and strategic planning in relation to
Board of Water and Light (BWL) matters.
Facilitator Bryan Singletary informed the Commissioners that the American Public Power
Association may present a workshop in the near future on governance roles and responsibilities
in Lowell, Michigan. For example, the Commissioners role is to set policy and hire and direct
the Chief Executive Officer (i.e. General Manager). Whereas, staff's role is to focus on
operational, financial, and engineering needs of the BWL, which includes but is not limited to
customer complaint response.
Strategic planning is structural, and looks at the future of the utility, based on market, consumer
technology, and financial issues. A strategic plan is a living, written document that expresses
consensus of the governing board on the future outcome of the utility.
The roles of the Commissioners are to:
• Hold staff accountable
• Represent all consumers
• Insure long-term success of the utility
• Approve the budget
• Evaluate the GM
• Help the organization stay on course
• Audit every aspect of the organization
Value Mission Statements are an expression of what the organization wants to become. Value
Statements are explanations of how one is expected to behave around others and how one values
its stockholders. A Mission Statement is an explanation of what the company does and why it
exists.
Page 3 of 31
Board Meeting
March 25,2008
Mr. Singletary presented a slide of the following exercise:
Vision Statement Exercise
a.) As an organization moves forward we will be.....
b.) As a public power sector our governance structure will be characterized by.....
c.) Our customers will view us as.....
d.) What will we be known for in the community.....
e.) We will lead through.....
f.) Our employee's will describe the organization by.....
Value Statement of Exercise:
What are 4 to 6 core values the organization and employees should have?
How will you value your:
a.) Key Accounts
b.) Commercial Customers
c.) Residential Customers
d.) Employee's
e.) Community
f.) Other Departments
Mission Statement Exercise:
Describe what the organization does:
a.) Provide reliable utilities
b.) Cost effectiveness
c.) Ensure long term power discussion for the long haul
d.) Environmental stewards
e.) Planning new market strategies
f.) 600 kW—last power plant
Strength and weaknesses are internal, opportunities and threats are external
(SWOT= Strength—Weaknesses - Opportunities—Threats)
What are strengths of the BWL?
Low rates
• Top quality water
• Good service
• Reliability
The Commissioners brainstormed a master list of issues that the BWL must have in order to do
well and move towards a vision consistent with its values and mission:
a.) Reliable cost effective power long term power supply
b.) Human Resource Department-work to keep workforce healthy, insure reliable people
power, succession planning
c.) Evaluate direct reports accurately—General Manager, Internal Auditor, and Corporate
Secretary
d.) Labor relationships
e.) Identify renewable energy resource opportunities—diversify quality
Page 4 of 31
Board Meeting
March 25,2008
f.) Customer service—maintain quality
g.) Public image (advertising) customer public image
h.) Maintain communication mechanism with public
i.) Maintain sufficient cash for good bonding rates, maintain good bonding capabilities
j.) Continue to seek Operations &Maintenance (O&M) cost reductions
k.) Establish budget/perform budget maintenance
1.) Continue to identify new markets for sales
m.)State of the art Information Technology operations, i.e. smart metering mobile tracking
n.) Ensure public and workplace safety
o.) Hold GM accountable to strategic issue metrics
p.) Demand side management and efficiency programs
q.) Maintain compliance
The Commissioners again brainstormed items for information they would like to receive from
the GM on a monthly basis:
a.) Budget Compliance
b.) Schedule Compliance on Capital Projects
c.) Safety Metrics
d.) Progression on Strategic Initiatives (issues)
e.) Legal Updates
f.) Press Releases (courtesy call)
g.) What questions—CAIDI, SAIDI(reliability measures).
How BWL did compared to others?
h.) Customer Satisfaction
i.) Employee Satisfaction
j.) Management to Report on Community Involvement
k.) Monthly Written Report on What GM has Done (maintain positive image)
1.) Regulatory Compliance
m.)Rate Comparison
n.) Financial Report
o.) Information Technology Report Update
Submitted by Rosemary Sullivan
Acting Corporate Secretary
The report will be filed with the minutes of the March 25, 2008 Board meeting.
WATER&LIGHT
IN.
Hometown People.
Hometown Power.
BOARD RETREAT SUMMARY
February 2, 2008—8:30 a.m. to 1:00 p.m.
The James B. Henry Center for Executive Development
3535 Forest Road—Lansing
Page 5 of 31
Board Meeting
March 25,2008
Present: Commissioners Robert Cochran,Tony DeLuca, Joseph Graves, Semone James, Peter
Kramer, Frank Lain, Julee Rodocker, and Sandra Zerkle. Absent: None
Staff Present: General Manager J. Peter Lark,Executive Director and Chief Financial Officer
Susan Devon, Executive Director of Operations Dick Peffley, Executive Director of Strategic
Planning and Development George Stojic, Director of Production George Bibbings,
Communications Director Mark Nixon, Director of Engineering Doug Wood, Government
Relations Manager Calvin Jones and Corporate Secretary Rhonda Jones.
On day two of the Board retreat, the Commissioners met with staff members to discuss strategic
planning in relation to the Board of Water and Light (BWL). As such, General Manager J. Peter
Lark discussed the need for the BWL to start thinking about its long-term electric generation
plans. In essence, the BWL will look at renewables, energy efficiency and building a power
plant to replace 120 mW (which are Eckert units 1-3 initially and units 4-6 eventually). Staff is
working to obtain more landfill gas, making hydro's operational, and creating an energy
efficiency program. It was also noted that staff worked with the Department of Environmental
Quality (DEQ) regarding the mercury rules and air quality relative to the Eckert Station units. In
addition, it would cost the BWL more money to cleanup the stacks than it is worth due to their
current age and anticipated life span. It takes approximately 7-10 years to build a plant.
Therefore, it is necessary to make decisions regarding whether to build a plant, partner with
another entity or do nothing at all. Additionally, the BWL may also want to consider building
and/or partnering to build a gas plant. The cap and trade program(which allows a certain
amount of populants in the environment and also allows for the buy and sell of those allowances)
will increase the cost of natural gas and will be dependent upon the results of the upcoming
presidential election. Listed below are various facts regarding power plants in the state of
Michigan.
Plant Information:
• Few plants have been built in the U.S. within the last 5-10 years.
• Last base load plant built in Michigan was 1985.
• Demand increased due to consumption and plant retirements.
• The last nuclear plant built in the United States (U.S.) was 1979.
• Detroit Edison (DTE) plans to build a nuclear plant, which should take 12-15 years.
• Building a nuclear plant is not an option for the BWL due to size, cost, and opposition to
build in the Lansing area.
It was noted that during the plant consideration process, the BWL should form a community
group that would be responsible for making recommendations relative to building a plant. Listed
below is the suggested timetable for the upcoming project:
• Receive integrated resource plan—March 2008
• Form community group—April 2008
• Receive community group recommendation(s) —July 2008
• File (if applicable) with the DEQ—Fall 2008
Page 6 of 31
Board Meeting
March 25,2008
e existing
response to a Commissioner question, staff noted that theynderre unsure n w enviro if nmental rules.ermit
In p
at Erickson Station would allow for a new plant to be built u
However, they would check and see if it is possible.
George Sto'ic,Executive Director of Strategic Planning and De plane ent.rev
re a ew ad
presentation materials en dressed
titled, "Electric Generation Expansion
number of items that specifically included the electric planning
o°tions,rgenerating istorical
a Q generating capacity, new resourcep
sales, demand growth, existing g g p
technologies, planning goals and contingencies as well asreliab ditm affordability and minimizing
goals to consider in the electric planning process include Y
risk.
Electric planning process
Forecast future electric peak demands and annual energy requirements
•
Identify inventory of operating its over planning horizon
• un•
Determine if additional resources are needed
• Evaluate resource options to determine which resources best meet the need
Li
sted below is a brief summary of some of the specific points discussed during the presentation.
• BWL forecast for retail sales load; 1.1 million mWh or one third of sales go to non-retail
customers.
BWL is long on base load generation, containing u its out by the year over 3 plants.
• year 201 g
• BWL anticipates taking some of the Eck
• BWL also anticipates an overall 1.4% growth rate
Commissioner Zerkle departed at 10:27 a.m.
BWL ownership interest in Belle River is a long-term contract with MPPA until the plant is
•
taken out of service.
Natural Gas— 1/3 more drilling wells are dedicated to natural gas. Supply is currently at
• and prices are expected to increase.• in which the Environmental
Retooling equipment can trigger new source review (NSR)
Protection Agency can require air emissions controls.
Eckert Power Plant NSR retrofit exposure and replacement costs include the following:
•
Air Emission Control Equipment
$80,000,000
Selective Catalytic Reduction 130,000,000
Flue Gas Desulfurization 3,000,000
ACI with Polishing Filter 3,200,000
Annual O&M
Water Intake Regulations $46,000,000
Closed Loop Water Cooling 146,000
Annual O&M
Page 7 of 31
Board Meeting
March 25,2008
Listed be
low are the net unit heat rates per British thermal units (Btu,$) of input for each Kwh
generated per new plant technologies and existing facilities.
New Combined Cycle units—6,860to
(Natural gas fired combined cycle units are verdue to l high gas pcient and r ces.)produce steam.
They are only utilized a few months in a year
New Circulized Fluidized Bed—9,837
CFB can burn almost anything including renewables. However, it is a little less efficient
than pulzarized coal.)
New Pulzarized Coal—9,643
Erickson— 10,645
Eckert 6— 11,759
Eckert 5 — 11,770
Eckert 4— 11,652
Eckert 3 — 12,330
Eckert 2— 13,062
Eckert 1 - 12,864
New Resource Options
Traditional generating plants
- Coal
-Natural gas
• Renewable energy
• Energy efficiency
• Load management
• Market purchases
Renewable Energy Options
• Landfill gas—High reliability at• 97%.
Hydro—Moores River is an option.
• Wind—Availability is 25%.
• Solar
• Biomass—Is a possibility.
Commissioner Zerkle returned at 11:13 a.m.
In addition to the above items, staff reported that Sargent estimated that the BWLy is doing a site lysis build a
generation facility. It w
regarding the building of a new g at the site as well.
550 mW plant but it could also build the smallesnsu rcri tical with the BWL as they do not have
Other municipalities have expressed an interest i partnering
good op
n the transrrussion
tions BWLs The
after 2010. If the BWL decides to partner with BWL is e pulling out of the MPPA
will be the respective partners issue and not the .
ective If the BWL covers its
1 and the have been notified to that effect resp ryou l
oad
Power Pool
gh the MPPA for third party
and what is needed for MPPA then the BWL still has to work through
Page 8 of 31
Board Meeting
March 25,2008
new plants in China and India has caused prices to rise in the United
sells. Huge demand for
States.
In order to determine the cos
t to build a new plant: multiply the number of kW's that one wool
need by the cost per kW
takes lace prior to taking bonding action. The BW st stream w would ill incarn rease
Receiving air permits t P
that the revenue from excess capacity is relatively so going
on the bonds until it starts paying to actually build the plant. The r a
until the project takes flight also noting DTE and Consumers Energy
cost
BWL cost will eventually increase. However, 1 120 mW of needed generation.
faster ace than the BWI-• In addition, it was further advised that risk exposure
to heighten at a fa p
could be determined by how much the BWL exceeds the initial
o February 2, 2008 is
the Electric Generation Expansion Planning presentation dated
A copy f
on file in the once of the Corporate Secretary.
Reca o Strate is Plannin Session—Da One that fined se elements ra a
missioners presented staff with a list of item contain
represented their strategic
The Board of Com one of the board retreat. The listeady
planning discussion from dayit was noted that
ff is alr
ent master issues, and reporting metrics• ed that he General Manager mission statement, Manager develop a
working on many of the issues. However, it was sugges
would incorporate the master issues and reporting the masterissues ononranb the
strategic plan that would like to be ke t abreas I
board retreat. In addition the Board w• in the project. The
s an
staff i
regular Or uarterl basis. The information present damework to beg a of whatpt e
Commissioners would like to see in the plan an cation would include the time
s agreed that they would like to receive communication from staff as tot e
Commissioner g 2008. The Comm
framework of the strategic plan by May o. ts.
needed to complete the plan,persons assigned to the task, and talking p
In response to the overview,Peter Lark noted his reluctance to state what staff would have
w.
prepared by May 2008, as he has not worked on this topic until
o
rocess as
In response the Com missioners clarified that the BWI-should formalize
General Manager they are
already working on many of the tasks. It was also conveyedd ensure that he is in r e ent with the plan. The
time to digest what was discussed e that the ideas for the retreat are carried forward andth t the
not
Commissioners also want to ens
forgot
ten. Furthermore,the reports stipulated in the p°de of the BWLiI p
Board of Commissioners abstains from the opera
There being no further business the meeting ended at 1:05 p.m.
Submitted by Rhonda Jones
Corporate Secretary
minutes of the March 25, 2008 Board meeting.
The repor
t will be filed with the
page 9 of 31
Board Meeting
March 25,2008
Report of the Joint Meeting of the
Summary P ht Commissioners
Board of Water nsingCity
Lig
Lansing Council
and La September 279 2007
at
Board of Commissioners
Chair, Santiago Rios called the meeting to rder Ha co Drive,Lansing,- The
meeting was held in the Boardroom of the Administrative Of ices,
1232 Michigan.
The following Commissioners were present: Robert Cochran,
Joseph Graves, Semone James,
Peter Kramer, Santiago Rios,
Julee Rodocker, and Sandra Zerkle. Absent: Commissioner Robin
Smith.
Brian Jeffries,Tim Kaltenbach,
A
Councilmember's Present: Kathy
ey D d Carol Wood1 unbar (arrived at2Absent: Councilmember's Sandy Allen and
Harold Leeman,Derrick Qu Y
William Matt. City staff members were not present. cial Officer Susan Devon,
er J. Peter Lark, Chief Fin an orate
BWL Staff Present: General Manager er of Governmental Relations Calvin Jones, Corp
Executive Director Dick Peffley,Manager
Secretary Rhonda Jones, and Administrative Secretary Rosemary Sullivan.
Sec Business
Y
resentatives Present: Business Manager Joseph ay. and President
Manager Ron Byrnes, A
IBEW Local 352 Repssistant Business Manager Jim D
Dolores Appling.
joint meeting was to present an update to City Council on the following
The purpose of the Joy
topics:
Public Comment
There were no public comments.
Agenda Items: ear cycle.
' mina. J. Peter Lark, General Manager reported d of its that the Board of Water
l, Update on Tree Trim b goo job with tree trimming and is at
is doing a g J
the process of
and Light (BWI-) g
Service contract continues to be reviewed ri ndim ork to the City of Lansing.
is in
The Wright Tree crew and contract g
establishing one in-house tree
is trimming crew
at this project and others in a broad perspective.
It was also noted that
hi Waer Agreement. Mr. Lark noted than aat s eeable solutihe,met with Joe
ons
2. Update on Delta Townsp relative
t
Delta Township Supervisor and is optimistic that they will workou b
to issues involving the water agreement.
ard of
3. Update on Rul
es of Procedure. Commissioner Rios refroported igham Smith, City Attorney.
Commissioners received input on the Rules of Procedure
Board Meeting Page 10 of 31
March 25,2008
They were amended and approved at the September 25, 2007 Board meeting and will be
resubmitted to the City Attorney and Council for approval as to form and final adoption.
4. Update on Safety Improvements. Mr. Lark noted that the BWL is considering the
implementation of a safety incident plan. Whereas, employees are rewarded for going one year
without a safety incident. They are reviewing a monetary and non-monetary reward system so
that employees will know that management takes safety seriously.
Joseph Davis, Business Manager and Dolores Appling, President of IBEW Local 352
recommended that proactive solutions such as, purchasing equipment and maintaining safety
often works better than incentives. At times, monetary incentives cause people to work against
one another and gives employees a sense of entitlement. It was noted that one must change their
overall thought process regarding safety.
5. Update on Financials for Fiscal year end 2007. Susan Devon, Chief Financial Officer (CFO)
reported the following net income for fiscal years 2006 and 2007.
FY06 FY07
Electric $15,000,000 gain $22,700,000 gain
Water 2,200,000 loss 900,000 gain
Steam 5,300,000 loss 800,000 gain
Chilled Water 1,100,000 loss 850,000loss
Councilmember Wood inquired as to the status of negotiations between the BWL and City
administrators regarding the payback contingency for the street light rider.
Mr. Lark advised City Council that he was unaware of any negotiations regarding the payback
contingency contained within the street light rider. He also noted that the payback period has
commenced and the City of Lansing is on schedule with regards to repayment.
Councilmember Dunbar asked if the City of Lansing and the BWL has had discussions regarding
the annual amount charged for the Fire Department to tap fire hydrants. She further indicated
that the Fire Department was assuming responsibility for consumption that is unrelated to their
departments use, i.e. street sweepers. City Council will refer the question to Jerry Ambrose,
Mayor's Chief of Staff for further discussion.
6. Update on Removal of Lead Pipes. It was reported that the BWL is ahead of schedule and is
in the process of adding another BWL crew to assist with the removal of lead pipes. Customers
with special priorities, i.e. churches, hospitals, community centers, etc. has been addressed and
the removal process is essentially following the CSO Project. In response to a question from
City Council, BWL staff noted that they would follow-up with Council regarding customer's
ability to determine when their lead pipes will be replaced. City Council and the Commissioners
also discussed increasing the BWL's involvement in the CSO Project to help increase
efficiencies and reduce cost.
Board Meeting Page 11 of 31
March 25,2008
An Ad Hoc Committee on Workforce Development comprised of Commissioners, staff persons,
and union representatives was formed to look at tree trimming, high school partnerships, present
BWL employment and the development of capacity to allow the BWL to do more work in-house.
Corresponding cost benefit analysis of work presently done by external parties will also be taken
into consideration during the review process.
7. Update on Public Relations. Mr. Lark advised Council that there have been several positive
things that have recently occurred. Some of those items include the Renewable Portfolio
Standard, an upcoming change a light announcement with the Mayor of Lansing and Urban
Options, as well as a future BWL project involving the exchange of old incandescent light bulbs
for compact fluorescent lamps (CFL's).
8. Update from the Director of Internal Audit. Susan Devon, CFO reported that the Internal
Audit Department has completed three audits that include fuel procurement, procurement cards,
and coal audit. Two requests for proposals (RFP) are also being developed relative to the SAP
Controls Assessment and deferred benefit plan advisors. They will also conduct a feasibility
study regarding the implementation of Sarbanes-Oxley.
9. Update on CSO Project. The BWL continues to work with the Public Service Department to
coordinate work necessary due to the CSO Project. In response to Council's inquiry, BWL staff
noted that they continue to receive customer complaints that are monitored on a daily basis. In
addition, staff also confirmed that the BWL recoups cost whenever contractors dig into utility
lines that were properly marked.
10. Update on Organizational Structure and Strategic Plan. Mr. Lark noted recent additions to
the executive management team that include Susan Devon, Chief Financial Officer and George
Stojic, Executive Director of Strategic Planning and Development. It was also advised that Dick
Peffley was named Executive Director of Operations. In addition, the General Counsel position
is currently vacant but has been posted and individual persons are now in charge of each
respective power plant. Mr. Lark further noted that he has enjoyed his time at the BWL. He is
very positive and upbeat and believes that they have a fine team in place.
Joseph Davis, Business Manager of MEW Local 352 announced his scheduled departure from
the BWL for a position with the MEW as an International Representative. He noted that there
have been leadership changes at the BWL over the last several years and hopefully, they now has
a team in place that will lead the company into the future. Mr. Davis advised everyone of the
importance of having a good relationship between management, City Council and city leaders, as
they are all charged under City Council and the City of Lansing. He also spoke about the
importance of the Ad Hoc committee and the relevance of the work before them, i.e. training and
technical committees. He went onto note that the BWL has a good program in place with good
leaders.
Commissioner Rios further advised that there is a good working relationship between the Board
of Commissioners and management. He sees everything as positive and very optimistic. In
addition, the Board of Commissioners is presently planning a joint retreat with key management
staff to establish objectives.
Board Meeting Page 12 of 31
March 25,2008
11. Pending Litigation. Mr. Lark directed City Council to the materials that were contained in
the meeting packet.
12. Other.
Calvin Jones. City Council congratulated Calvin Jones on his recent promotion to Manager of
Governmental Relations. They also thanked him for his hard work and efforts in responding to
their questions and concerns.
Streetlights. Councilmember Woods reported streetlights out on Mt. Hope Avenue between S.
Cedar and Martin Luther King Jr. Boulevard. She also inquired into the BWL's strategic plan
for streetlights, as one light out can make a huge difference in a neighborhood.
Mr. Lark reported that Dick Peffley is in the process of developing a program in which to
monitor all of the streetlights and change out those that are older in existence.
Special Thanks. Councilmember Woods thanked the Board of Commissioners and staff for
condolence cards and contributions made in honor of her mother's passing.
Compact fluorescent lamps (CFL's). Councilmember Dunbar reminded everyone that although
CFL's are energy efficient they are not recyclable. It is important to advise customers that they
are mercury-based light bulbs that save electricity but cannot be tossed away in the same fashion
as traditional light bulbs. She also suggested either placing a sub-depository at either the BWL
or the City Recycling Station to allow for easy and proper disposal of CFL's.
Welcome. Councilmember Quinney welcomed Peter Kramer to the Board of Commissioners.
He also announced and invited persons to participate in the upcoming American Diabetes 5k
Walk scheduled for Saturday, October 61h at Oldsmobile Park at 9:00 a.m.
The meeting adjourned at 1:24 p.m.
The report will be filed with the minutes of the March 25, 2008 Board meeting.
Joint Meeting of the
Board of Water and Light Commissioners
and Lansing City Council
February 18, 2008
City Council President Brian Jeffries called the meeting to order at 8:55 a.m. The meeting was
held in the Regency I Room of the Radisson Hotel, 111 N. Grand Avenue, Lansing, Michigan.
Commissioners Present: Robert Cochran, Tony DeLuca, Joseph Graves, Semone James, Peter
Kramer, Frank Lain, Julee Rodocker and Sandra Zerkle. Absent: None.
Board Meeting Page 13 of 31
March 25,2008
Councilmember's Present: Kathy Dunbar, Eric Hewitt, Brian Jeffries, A'Lynne Robinson and
Carol Wood. Absent: Councilmember's Sandy Allen, Tim Kaltenbach and Derrick Quinney.
BWL Staff Present: General Manager J. Peter Lark, Chief Financial Officer Susan Devon,
Executive Director of Operations Dick Peffley, Executive Director of Strategic Planning and
Development George Stojic, Director of Internal Audit Susan Pifer, Director of Engineering
Doug Wood, Manager of Governmental Relations Calvin Jones and Corporate Secretary Rhonda
Jones.
IBEW Local 352 Representatives Present: Business Manager Ron Byrnes and Assistant
Business Manager Jim Dravenstat-Moceri.
City Staff Present: Mayoral Chief of Staff Jerry Ambrose and Legislative Office Manager
Terese Horn.
The purpose of the joint meeting was to present an update to City Council on the following
topics:
1. Update on CSO Project. General Manager J. Peter Lark gave a brief overview of the CSO
Project in which it was noted by Mayoral Chief of Staff Jerry Ambrose that the Board of Water
and Light (BWL) would enter into a memorandum of understanding should both entities agree
that the BWL would take on some of the CSO work. The BWL would also determine if there is
a need to hire additional employees for this particular project. In addition, Commissioner
Cochran advised that his objective was to ensure that the BWL hires new employees to work
with existing staff members to help maintain the BWL's skilled labor force when the existing
workforce retires.
2. Update on Strategic Planning. Mr. Lark reported that Executive Director of Operations
George Stojic is currently working on an integrated resource plan that would address strategic
planning. The BWL currently forecast an annual electric growth rate of 1.4% over twenty years.
The Mayor and City Council has expressed interest in city growth, i.e. Accident Fund, Police
Triangle, etc. As such, the BWL hopes to meet load growth with renewables and energy
efficiencies. There is a need for the BWL to determine a way to service its customers reliably
and effectively by 2018. The BWL must also determine its options relative to reliance on MISO,
building a plant or partnering with Consumers Energy (CE) who has extended an offer to the
BWL to buy into their new plant. In addition, the BWL plans to develop a Lansing area citizens
group to receive community input.
In response to Council questions, Mr. Lark noted the following:
• Eckert Station Offline - The BWL does not intend for Eckert Station to come offline for a
long time because it can still run Units 4-6. The primary concern resides with Units 1-3 and
the need to determine a course of action under new environmental rules by 2018.
• Green Power and the Strategic Plan—The BWL will rollout an energy efficiency program
fall 2008. The BWL's renewable program requires $.03 more per kWh, which is
inexpensive. However, staff is working to bring that cost to $.01 to $.01 1/2 per kWh. The
Board Meeting Page 14 of 31
March 25,2008
BWL's green power cost is relatively the same as CE. However, even with those costs
BWL's total rates including green power costs are below CE's normal rates by
approximately 25%. It was also clarified that if the BWL does not sell all of its green power
then it must absorb the cost. However, the BWL hopes that the new program will increase
participation and offset some of the absorption cost. In response to a Councilmember's
suggestion to spread the cost over the entire customer base, Mr. Lark noted that utility
companies do not typically act in such a manner. The primary reason being a customer's
reluctance to pay for a service that they did not request. Therefore, the BWL is working to
reduce the cost and thereby, increase overall involvement.
• Patty Ache Bill—The BWL does not have a position on the Patty Ache Bill.
3. Update on Water Bonds. In response to Council's question regarding the acceleration of the
lead line program, Mr. Lark noted that the BWL is ahead of schedule and already accomplishing
said task.
Council inquired about the fly ash pit clean up and the timeline to have said project completed.
In response Director of Engineering Doug Wood noted that the BWL recently awarded bids for
the contract. Therefore, City Council should start to see the clean up project move forward in
2008. The BWL is also working with the Drain Commissioner and the Department of
Environmental Quality regarding an easement.
4. Update on Ottawa Station/Phoenix Project. Mr. Lark noted that construction of the new
chilled water facility slated for Pine and Allegan is scheduled to begin fall 2008. He confirmed
that the BWL would work with multiple entities such as, the CSO Project, Lansing Community
College and Ottawa Station to coordinate traffic issues during the construction period. In
response to a Council question, it was verified that there is intent to have a Project Labor
Agreement in place for the Ottawa Station Project.
5a. Update on Tree Trimming. In response to Council's question regarding the tree trimming
process, staff advised that the BWL has a total of seven (7) trucks. Only those homes directly
affected are notified of pending tree trimming work. The BWL is in the process of listing the
designated areas and upcoming schedule on its website.
Commissioner Lain suggested that the BWL and the City of Lansing consider placing both
respective tree trimming schedules and parameters on the public access television channel.
Staff also confirmed that the City's tree trimming crew is available to the BWL. Wright Tree
Service does not have exclusive rights to the BWL's tree trimming work. In addition, it was also
suggested that the BWL and City of Lansing coordinate efforts to minimize the number of tree
trimming trips to the same respective areas.
5b. Update on Lead Line Replacement Program. It was reported that the BWL is ahead of
schedule in replacing lead service lines. As of January 2008, approximately 5,100 (40%) were
replaced with an expectation that the BWL will have completed approximately 5,600 (43%) by
Board Meeting Page 15 of 31
March 25,2008
fiscal year end. This schedule will place the BWL head of schedule by approximately 100
services.
In response to a Council question regarding foreclosures and access, staff noted that the
increased rate of home foreclosures has slowed the process. However, the BWL can typically
locate a contact person to gain access into the basement of a home in order to complete the lead
service replacement.
6. Update on Power Plant Replacement. See item number 2.
7. Update on Financials. Mr. Lark gave a brief financial update in which he noted a 2.48% rate
of return effective six months year ended December 31, 2007. However, BWL policy requires a
4% return on assets. The initial fiscal year 2007-08 budget was relatively stringent, resulting in
cost overruns. Commissioner Cochran also advised and the General Manager concurred, that
deferred maintenance issues based on past management practice has caused unscheduled
budgeted items to development.
Chief Financial Officer Susan Devon advised that one of the financial issues involves the transfer
of funds from the Defined Benefit (DB) to the Retiree Benefit Plan and Trust (VEBA). Recent
market changes have affected the assets value. Therefore, staff must wait and see what happens
with the market, as funds must be transferred to the VEBA plan.
8. Update on Ad Hoc Committee on Workforce Development. Staff reviewed information
provided in the meeting handout that gave an overview of the BWL's efforts regarding the
following:
• First Step Program—High school to work based learning program
• Joint Technical Training Committee—The committee is in the process of developing a
centralized technical training program for staff throughout the BWL
• Anti-Harassment Policy Training—All BWL employees are scheduled to partake in anti-
harassment training from December 2007 through February 2008.
• Substance Abuse Awareness Training
• Integrated Management Team Development Training
• Diversity Council—Created by the General Manager in 2007, the council will propose a
diversity plan and plan of action to the Board of Commissioners. The council will also create
an advisory panel during the third quarter of 2008.
9. Update on BWL Rules of Procedures. The Board of Commissioners advised City Council
that the BWL's Rules of Procedures is awaiting final approval by City Council. As such, the
Board requested an update on its status. In response after brief discussion, Council President
Brian Jeffries noted that City Council would take up the matter in approximately 2 weeks and
requested that a BWL representative be present at the meeting if possible.
10. Other.
Parliamentary Training. Commissioner James, Board Chair advised City Council that the Board
of Commissioners is scheduled to attend parliamentary training at the BWL. As such, she
Board Meeting Page 16 of 31
March 25,2008
extended an invitation to City Council to receive training in this area if interested. Secretary
Jones will advise Legislative Office Manager Terese Horn of the training date once confirmed.
Electric Supply. In reference to electric generation, Commissioner Lain noted that the primary
difference in electric generation is the supply side. It is better for the BWL and its future to
control the source of its electric generation.
Quarterly Meetings. Council President Brian Jeffries noted and the General Manager agreed that
the quarterly joint meetings are very beneficial. In addition, Mr. Lark welcomed City Council to
contact for any reason, he advised new council members to schedule a BWL plant tour at their
convenience.
Dye Water Plant. In response to Council questions regarding water plant tours, Executive
Director of Operations Dick Peffley advised that there are plans in the works to reopen the water
plant for future tours.
There being no further business the meeting ended at 9:58 a.m.
The report will be filed with the minutes of the March 25, 2008 Board meeting.
EXECUTIVE COMMITTEE
March 13, 2008
The Executive Committee of the Board of Water and Light met at the Executive Offices, Lansing
beginning at 5:10 p.m. on Thursday, March 13, 2008.
Executive Committee Chair, Semone James called the meeting to order and asked the secretary
to call the roll. The following members were present: Commissioners Robert Cochran, Joseph
Graves, Semone James and Julee Rodocker. Commissioners Tony DeLuca and Frank Lain (5:20
p.m.) were also present.
Absent: None
Public Comments
There were no public comments.
Commissioner Retiree Appreciation Discussion
Executive Committee members suggested that the Board of Commissioners consider different
Commissioner retiree appreciation gifts in lieu of the traditional honoree dinner held upon
retirement from the Board of Commissioners. Estimates for various suggested gift items were
handed out to committee members as sample gift ideas. The suggestions included dinner and a
movie, dinner and a Wharton Center show, and overnight stays at the English Inn, Great Wolf
Lodge, Mackinaw Island, or the Soaring Eagle Hotel. After brief discussion, the Executive
Committee agreed that the gift options were good ideas provided that the respective
commissioner receives the option to make their own gift choice. The committee also agreed to
Board Meeting Page 17 of 31
March 25,2008
make the retiree appreciation gift retroactive to former Commissioner Santiago Rios in lieu of
the honoree dinner. The gift would not exceed an amount of$500.00; and the Corporate
Secretary is responsible for designating the monetary split for the respective gift certificate, i.e.
dinner and hotel stay, dinner and Wharton Center event, etc. It was further advised that the gift
certificate should not be intended for alcoholic purchases.
On motion by Commissioner Cochran, seconded by Commissioner Rodocker to form a
resolution to move the item to the full board for consideration.
Action: Carried unanimously.
Budget Updates: Board of Commissioners, Internal Auditor and Corporate Secretary
It was advised that Santiago Rios and Robin Smith no longer sit on the Board of Commissioners.
As a result, the balance of their budgeted miscellaneous monies were allocated to new
Commissioners based on ward appointment for the remainder of fiscal year 2008 for
responsibility area (RA) 108.
Susan Pifer Director of Internal Director confirmed that she did not anticipate overages for RA
106. It was also confirmed that a large portion of money would be spent utilizing the services of
Plante &Moran.
There being no further discussion, the meeting adjourned at 5:23 p.m.
Respectfully submitted,
Semone M. James, Chair
Executive Committee
The report will be filed with the minutes of the March 25, 2008 Board meeting.
COMMITTEE OF THE WHOLE
March 13, 2008
The Committee of the Whole of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 5:30 p.m. on Thursday, March 13, 2008.
Committee of the Whole Chair, Julee Rodocker called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert Cochran,
Tony DeLuca, Joseph Graves, Semone James, Frank Lain and Julee Rodocker.
Absent: Commissioners Peter Kramer and Sandra Zerkle.
Public Comments
There were no public comments.
Board Meeting Page 18 of 31
March 25,2008
Customer Satisfaction Survey
Andrew Morrison of Market Strategies International (MSI) presented the results of the Lansing
Board of Water and Light (BWL), 2007 Annual Customer Satisfaction Survey dated March
2008. MSI has performed customer satisfaction surveys for the BWL since 1978. They also
conduct similar surveys for approximately 50 other utilities including Detroit Edison. The
results were positive and the report contains specific results relative to various questions. It was
noted that customers relate to utility companies depending on their household characteristics or
demographics of the service area. The surveys objectives include the following.
• Trend the Board's overall satisfaction level and customer perceptions of the utility's
performance on various activities and relationships.
• Assess the utility's communications and community involvement activities, and the impact of
customer awareness and reactions to media coverage of the Board.
• Provide the Board with a utility industry benchmarking perspective on the utility's
performance.
• This type of survey is typically used by utility managers to identify relative strengths and
weaknesses and to help determine future activities to address customer need and concerns.
It was noted that there is a large education gap regarding consumer's knowledge of the
environment, renewables, alternative technologies and its impact on the utility industry. It is
believed that one of the responsibilities of the industry is to educate the public regarding these
issues. Reliability versus cost is a tradeoff and it would be beneficial for consumers to have that
understanding. It was further advised that using the BWL Connections Newsletter to inform
customers of changes is one of the best channels for direct contact. There is good readership and
it is an important vehicle to utilize in sharing information with customers. Those who are regular
or occasional readers of Connections generally are much more positive toward the BWL than
those who do not read it. The newsletter demonstrates the BWL's ability to preserve the level of
positive response. The BWL is generally in the 1" quartile of the benchmarking summary
compared to the national residential benchmarking database. The BWL has sustained its lst
quartile status position for nearly 30 years, which is a great accomplishment. It was further
advised that once customers get past the rate perception then they are primarily concerned about
reliability and customer service. Therefore, one must maintain positive responses in those areas.
In response to a Commissioner question, Mr. Morrison noted that the BWL can build on its
perception of care about the community by continuing its long-term program of events and
activities that involve community issues. Examples of such items include economic
development, school sponsorships, and community partnerships. It was suggested that
community events such as, Adopt-A-River develop a strategic plan similar to what is done for
generation or customer service in order to gain leverage.
By way of Commissioner recommendation, it was suggested that the survey be included in the
Connections Newsletter to expand the sample size. However, in response to the suggestion Mr.
Morrison noted that it would be difficult to scientifically blend together a scientific pole with a
volunteer random pole. It was recommended that Connections maybe useful in obtaining
customer ideas or suggestions. However, it could not be weighted properly to give the proper
scientific results.
Board Meeting Page 19 of 31
March 25,2008
Summaries of the survey findings are presented below.
• The Board continues to perform well with regard to customer evaluations, with no particular
weaknesses of note.
• There are several topics that Market Strategies discusses with all of its utility clients in terms
of sustaining a positive relationship with customers:
• Rate moderation and effective communication to help customers understand why rate
increases occur, when they do occur;
• Strong, consistent, error-free operating performance;
• Attention to economic circumstances;
• Environmental and energy efficiency plans and activities; and
• Using communication channels and messaging effectively to support and sustain the positive
relationship or mitigate problems or concerns.
A complete copy of the Lansing Board of Water and Light, 2007 Annual Customer Satisfaction
Survey dated March 2008 is available in the office of the Corporate Secretary.
Proposed Diversity Plan
Susan Devon, Chief Financial Officer (CFO) introduced the proposed diversity plan and
members of the Inclusion and Equity Diversity (IED) Council that included Cheval Breggins,
Calvin Jones, Amy Ranno and Tracy Tolbert. The purpose of amending the corporate diversity
policy is to enhance diversity prospects at the BWL. It was noted that the former corporate
diversity policy is no longer in place due to Proposal 2. Therefore, staff requested that the
amended policy be adopted to move forward as a foundation for the diversity plan. The IED
Council gave an overview of the Inclusion and Equity Diversity Action Plan that included the
following topics:
• Organizational Assessment Survey, Interviews and Reporting
• Developing the Inclusion and Equity Diversity Plan
• Developing the Diversity Advisory Panel
• Training and Communications
• Diversifying the Workforce and Community Outreach
The Commissioners commended the IED Council for an impressive presentation and encouraged
them in their efforts regarding diversity. They also noted their concern regarding vendor and
contractor diversification and wanted staff to ensure that those parties are also addressed in the
ongoing action plan and program. In addition, the Commissioners advised staff that they do not
want the project to fall through the cracks and they would also like to see it as a sustainable
budgeted line item.
In response to Commissioner questions, staff noted that they are seeking the growth and
development of a diverse pool of suppliers, which is noted in the policy. It is also the BWL's
goal to reflect the community that it serves. Although, a timeline was not included in the
presentation materials the IED Council is considering a 5-year plan. Staff also noted that the
organizational assessment survey, interviews and reporting, which will be conducted by Public
Policy Associates will cost$15,000.
Board Meeting Page 20 of 31
March 25,2008
On motion by Commissioner James, seconded by Commissioner Cochran, the Committee of the
Whole agreed to move the proposed resolution to amend the Corporate Diversity Policy to the
full board for consideration.
Action: Carried unanimously.
STEP—School to Training & Employment Program
Dallas Burdick, Education and Training Administrator gave an overview of the BWL's School to
Training and Employment Program (STEP). The purpose of the newly developed program is to
expose local area high schools students to careers in the utility industry. The BWL has partnered
with Ingham Intermediate School District, Eaton Intermediate School District, Lansing School
District, Clinton County RESA, and Lansing Community College in developing the parameters
for said program. The BWL also consulted with the Department of Labor and Capital Area
Michigan Works. IBEW Local 352 is also involved in the program in that it agreed to provide
eight (8) bargaining unit employment opportunities to assist with the program in helping to meet
the BWL's needs for skilled labor. The program will target sixteen (16) participants of which
eight will be offered full time employment at the programs end, and the other eight will be
awarded $1,500 scholarships to Lansing Community College to help further their education.
The Commissioners expressed support for the program and its intended purpose. They also
asked staff to ensure that at risk students and those without parental involvement have
opportunity to participate. The Commissioners suggested that students receive education
regarding workplace expectations, i.e. dress. They also expressed concern regarding the
diversity of the positions being offered and the potential male to female ratio. It was suggested
that staff consider partnering with other entities including parochial schools and the Art of
Leadership program. The Commissioners also noted the need to ensure that there is adequate
funding in the budget to support the program. In addition, the Commissioners asked IBEW
Local 352 Assistant Business Manager Jim Dravenstat-Moceri to consider expanding the number
of bargaining unit positions made available to the program. In response to the request, Mr.
Dravenstat-Moceri advised that he would discuss the request with Executive Committee, as
future retiree potentials could allow the bargaining unit to expand the number of available
positions.
Update on Bonding
Susan Devon, CFO gave a brief update regarding the Tenth Supplement Revenue Bond
resolution passed at the January 29, 2008 board meeting. On February 8, 2008, rating agencies,
Moody's and Standard & Poor's affirmed the BWL's bond ratings. Moody's affirmed the
BWL's Aa3 rating and Standard & Poor's affirmed the BWL's AA- rating. As such, the BWL
submitted a qualifying standalone statement on February 13, 2008 to the Michigan Department
of Treasury (MDOT) based on its own financial statements not including that of the City of
Lansing. As a result, MDOT determined that the BWL is in material compliance with criteria in
section 303(3) of Public Act 34 of 2001 and authorized the BWL to issue municipal securities
without need for its further approval. MDOT's approval thereby allows the BWL to move
forward with the bond issuance as scheduled. The Preliminary Official Statement will be
Board Meeting Page 21 of 31
March 25,2008
distributed to the public on March 12, 2008 and the BWL expects to move forward with a
competitive bidding process on March 19, 2008.
Resolutions Honoring Retired Commissioners
On motion by Commissioner Cochran, seconded by Commissioner James, the Committee of the
Whole agreed to forward the resolutions Honoring Retired Commissioners Gary Calkins,
Santiago Rios and Robin Smith to the full board for further consideration.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 7:16 p.m.
Respectfully submitted,
Julee M. Rodocker, Chair
Committee of the Whole
The report will be filed with the minutes of the March 25, 2008 Board meeting.
FINANCE COMMITTEE
March 20, 2008
The Finance Committee of�� `a�of the Board of Water and Light met at the Executive
Offices, Lansing beginning at 4:00 5-40 p.m. on Thursday, March 20, 2008.
Finance Committee Chair, Joseph Graves called the meeting to order and asked the secretary to
call the roll. The following members were present: Commissioners Robert Cochran, Joseph
Graves, Semone James and Peter Kramer. Commissioner Frank Lain, alternate committee
member was also present.
Absent: None
Public Comments
There were no public comments.
Proposed Rate Restructuring (Senior Citizen Customers)
Bill Aldrich, Manager of Finance and Planning gave an overview of the proposed Rate
Restructuring for Senior Citizen Customers. The proposed change recommends a basic service
charge reduction of$2.00 effective July 1, 2008, which would result in a subsidy of$60,231.
However, if the reduction were $4.00 then it is estimated that the subsidy would cost
approximately $120,000. If approved by the Finance Committee then the proposed rate
restructuring would require a public hearing be held on May 22, 2008. It was also noted that any
rate reduction significantly higher than what was recommended would require subsidies from
other ratepayers. The rate change would effectively move the breakeven point from to 570-
kilowatt hours to 620-kilowatt hours (kWh). Therefore, a senior citizen rate customer would
benefit on this rate provided they average 620 kWh or less per month. It was further noted that
Board Meeting Page 22 of 31
March 25,2008
approximately 1,800 persons are currently on the senior rate with an estimated 8,000—9,000
senior citizens in the BWL's territory. Staff also noted that the rate change information would be
communicated to the general public via the Connections Newsletter.
The Finance Committee discussed the proposal and obtained understanding from staff regarding
its impact and implications of the breakeven point. It was suggested that staff communicate the
percentage decrease of the rate restructuring to allow for better appreciation of the proposal.
On motion by Commissioner James, seconded by Commissioner Kramer, the Committee of the
Whole moved the proposed Rate Restructuring for Senior Citizen Customers to a Public Hearing
to be held on May 22, 2008 at 5:30 p.m.
Action: Carried unanimously.
Mini SOX & Internal Controls Update
Susan Pifer, Director of Internal Audit gave a high level update of Mini SOX and Internal
Controls. A Enterprise Risk Management, Internal Controls Steering Committee handout
entitled, "Building A Foundation" was provided to committee members during the meeting. It
was also advised that Plante &Moran are onboard and documentation will be put in place for the
benefit of internal and external auditors. The project objectives for SOX Risk Assessment and
Pilot Scoping are listed below.
Project Objectives
• Compliance with new risk assessment standards (SAS 104— 111) or the "Spirit of SOX"
• Perform risk assessment for significant financial statement accounts and related business
processes
• Develop methodologies for documenting and testing internal controls for key business
process and sub-processes
The Finance Committee commended Ms. Pifer for pushing the topic forward due to its
importance relative to internal controls. Commissioner Cochran also suggested that board
members attend the APPA conference class regarding SOX standards if possible as the class was
very informative.
On motion by Commissioner Cochran, seconded by Commissioner James, the Committee of the
Whole approved board member SOX training scheduled for May 15, 2008.
Action: Carried unanimously.
SAP Controls Assessment
Audit Manager John Nobis of Plante &Moran noted that they presented their SAP Control
findings to management, noted their agreement and how they plan to move forward. In response
to a Commissioner question, Ms. Pifer noted that the SOX project is not dependent on SAP.
Therefore, it is not necessary for all of the SAP modules to be in place to proceed. In addition,
bound copies of the SAP Control Assessment dated March 2008 were scheduled for distribution
following the meeting.
Board Meeting Page 23 of 31
March 25,2008
Internal Auditor Update & Organizational Review
No discussion took place regarding this matter. Please see committee packet materials for
details.
Other
Commissioner Retiree Appreciation Gifts. The Finance Committee discussed the proposed
resolution regarding Commissioner Retiree Appreciation Gifts. The discussion centered on
technical requirements and the public appearance of providing such a gift. Some thoughts
concerning the proposed resolution included the appearance of compensation, the elimination of
a social opportunity for staff and board members to mingle, the need to issue a 1099 form and
the ethics policy. During discussion, it was suggested that the Board honor the Commissioner(s)
prior to the end of their appointment. Therefore, the Commissioner(s) would receive a
complimentary BWL watch and dinner prior to their exit from the Board. Another suggestion
included allowing exiting Commissioners the opportunity to invite former Commissioners or
staff members to participate in their respective honoree dinner. After further discussion, the
Finance Committee took the following action:
On motion by Commissioner Cochran, seconded by Commissioner James moved the proposed
resolution for Commissioner Retiree Appreciation Gifts to the full board for consideration.
Action: The motion carried by the following vote.
Yeas: Commissioners Cochran, Graves and James.
Nays: None
Abstain: Commissioners Kramer and Lain.
In response to a Commissioner question, Charles Moore of C.L. Moore & Associates advised
that the gift certificate would be considered compensation regardless of the amount because it is
not an expense. The honoree dinner however would not be considered compensation. It was
also confirmed that the threshold for a 1099 is $599.00. Following brief discussion, the Finance
Committee took the following action:
On motion by Commissioner James, seconded by Commissioner Lain, to revisit the topic at the
April 2008 Committee of the Whole meeting after due diligence has been completed by the
Director of Internal Audit, General Counsel and C.L. Moore &Associates. The proposed
resolution will not be moved to the full board at this time.
Action: Carried unanimously.
There being no further business, the meeting adjourned at 4:58 p.m.
Respectfully submitted,
Joseph E. Graves, Jr., Chair
Finance Committee
The report will be filed with the minutes of the March 25, 2008 Board meeting.
Board Meeting Page 24 of 31
March 25,2008
MANAGER'S RECOMMENDATIONS
esolution 2008-3-I
A. Amend the Corporate Diversity Policy
WHEREAS, the Lansing Board of Water and Light, the customers we serve, and our service
areas include a broad spectrum of individuals with diverse backgrounds, cultures and
experiences;
WHEREAS, the Lansing Board of Water and Light is more than water, electricity, steam, and
chilled water; we are hometown people working together to improve the quality of life in our
community;
WHEREAS, the Lansing Board of Water of Light is committed to becoming an industry leader
in hiring, promoting, and retaining diverse and resourceful employees who will ensure stronger
partnerships with our customers, our communities, and our legislators;
WHEREAS, on October 30, 2007 the General Manager announced a new strategic diversity
initiative for the Lansing Board of Water and Light that will embrace the diverse backgrounds,
cultures and experiences of our current and future employees, recognize their inherent strengths,
and allow us to work together as we become the most diversified and successful utility company
in the nation;
WHEREAS, diversity is a vital component of the Lansing Board of Water and Light's future
business success by attracting and retaining a talented workforce, boosting creativity, improving
the work environment, and creating a positive image and reputation within the community we
serve;
WHEREAS, a critical step in the development and implementation of a diversity program is the
adoption of a corporate diversity policy;
RESOLVED, that the Board of Commissioners recognizes and values the unique backgrounds
and perspectives of the BWL's workforce and wishes to promote, integrate, implement and
evaluate a variety of diversity initiatives that better serve our employees, customers, and our
community and therefore;
FURTHER RESOLVED, that the Board of Commissioners adopt the proposed Corporate
Inclusion, Equity and Diversity Policy;
CORPORATE INCLUSION, EQUITY, AND DIVERSITY POLICY
As a public utility, the Lansing Board of Water& Light (BWL) recognizes the
importance of inclusion, equity, and diversity among its workforce, suppliers, and in
the communities that it serves.
BWL generates its revenues from a broad cross-section of rate-payers, representing a
diverse community of people. In recognition of that fact, and in recognition of the
importance of diversity to the BWL and its rate-payers, the BWL will aggressively
B Page 25 of 31
Board Meeting
March 25,2008
support the growth and development of a diverse pool of suppliers, applicants, and
employees, with the intent of making opportunities available to all genders, ethnic
groups, races, sexual orientations, socio-economic statuses, ages, physical abilities,
religions, and localities.
BWL's goal, under corporate diversity, is to create an environment which values
inclusion, equity, and diversity as enhancements to the products and services it offers
to its ratepayers.
The General Manager, or a designated representative, shall establish a diversity
program consistent with this policy.
--------------------
Motion by Commissioner Cochran, seconded by Commissioner Lain, to approve the Amended
Corporate Diversity Policy.
Action: Carried unanimously.
esolution 2008-3-2
B. Senior Citizen Rate Restructuring
WHEREAS, the rate schedules of the BWL were subject to a general increase of 7% for the
electric utility effective March 1, 2008, a general increase of 7% for the water utility effective
March 1, 2008, and a general increase of 6% for the steam utility effective March 1, 2008 for
electric, water, and steam consumption on or after March 1, 2008; and
WHEREAS, the general rate increase of 7% is also applied to Rate Schedule No. 21, the BWL's
electric senior citizen rate; and
WHEREAS, other Michigan utilities provide special senior citizen electric rate schedules with
larger discounts than are offered under the current BWL senior citizen rate; and
WHEREAS, public comments support larger discounts for the BWL's senior citizen rate
schedule; and
WHEREAS, a$2.00 reduction in the monthly service charge under the BWL's Rate Schedule
No. 21 electric senior citizen rate would provide a larger discount for customers utilizing BWL's
senior citizen rate, and will bring the discounts available under the BWL's senior citizen rate
closer to comparable rates provided by other Michigan utilities.
RESOLVED, that a proposed $2.00 reduction in the monthly service charge for Rate Schedule
No. 21, the BWL's electric senior citizen rate,be made the subject of a public hearing prior to
further consideration by the Board of Commissioners.
RESOLVED FURTHER, that the Board of Commissioners hereby sets the date of Thursday,
May 22, 2008, at 5:30 p.m. for a public hearing to solicit public input on the proposed $2.00
Pave 26 of 31
Board Meeting
March 25,2009
reduction in the monthly service charge for Rate Schedule No. 21. The hearing will be held in
the Board of Water and Light's offices, 1232 Haco Drive, Lansing. The Corporate Secretary is
directed to file with the City Clerk, no later date of Apri 2008, information regarding the
proposed rate decrease with an effective Y l,
2008.
ELECTRIC: Residential Senior Citizen—Rate 21 (Attachment A)
--------------------
Motion by Commissioner Kramer, seconded by Commissioner Cochran, to approve the Senior
Citizen Rate Restructuring.
Discussion: In response to Commissioner James question regarding the percentage effect of the
rate reduction, General Manager Peter Lark noted that he could not give the exact number.
However, the average senior on Rate 21 typically has a 20% lower bill than their residential
neighbors. Therefore, with the new restructured rate it would add an additional 9% reduction off
of the already reduced rate.
Commissioner James also advised that she hopes staff will take the opportunity to enlist more
senior customers on the program and they will publicize that the BWL is trying to help senior
customers in this area.
Action: Carried unanimously.
UNFINISHED BUSINESS
None.
NEW BUSINESS
None.
RESOLUTIONS
esolution 2008-3-3
BOARD OF WATER AND LIGHT
RESOLUTION HONORING GARY CALKINS
WHEREAS, it is a pleasure to extend this expression of our thanks and best wishes to
Gary Calkins for his service as a Commissioner of the Board of Water and Light; and
WHEREAS, Gary Calkins was appointed to the Board of Commissioners on February 23,
2004 as an At-Large Commissioner. He served on the Finance Committee, Human Resources
Committee, Nominating Committee and, Executive Committee during his term as a
Commissioner; and
Page 27 of 31
Board Meeting
March 25,2009
WHEREAS, Gary Calkins' past employment with the State of Michigan and his service
in numerous community organizations such as the Landlord's Association Jee f ids all Michigan,
d
Newsboys,
Camp Highfield, Lansing Symphony and Lansinga
enhancing the quality of life at the Board of Water and Light and the best interest of citizens,
business, and industry in Lansing; and
ater
and Light and
WHEREAS, on behalf of his colleagues, employees ° 0nerdy,a of nd talen he devoted
the citizens of Lansing, ewe offer our sincere Board of Water and Light.de for the time, g
as a Commissioner of th
RESOLVED, That the members of this body herebo or and In commend
ar 3 ssion this
ry Calkins
upon leaving this Board with over three years of distinguishedears of
251h day of March 2008, we wish Gary success in all his future endeavors and many y
well-deserved enjoyment on the golf course.
BOARD OF COMMISSIONERS
Semone M. James, Chair
Julee M. Rodocker, Vice Chair
Robert W. Cochran
Peter W. Kramer
Frank Lain
Tony DeLuca
Joseph E. Graves, Jr.
Sandra Zerkle
Motion by Commissioner Zerkle, seconded by Commissioner Cochran, to approve the resolution
honoring former Commissioner Gary Calkins.
Discussion: Commissioner James commended former o a d ss one ht.r Gae also ary cknowledged the
ins on his years
of service and positive contribution to the Board of Waterg
appreciation dinner held in his honor.
Action: Carried unanimously.
esolutio�12008-3-
BOARD OF WATER AND LIGHT
RESOLUTION HONORING ROBIN M. SMITH
Board Meeting Page 28 of 31
March 25,2008
WHEREAS, it is a pleasure to extend this expression of our thanks and best wishes to
Robin M. Smith for her service as a Commissioner of the Board of Water and Light; and
WHEREAS, Robin M. Smith was appointed to the Board of Commissioners on
September 23, 2002 as a Third Ward Commissioner. This Board wishes to acknowledge her
many contributions to the Board of Water and Light, the City of Lansing and its citizens; and
WHEREAS, Robin served on the Finance, Executive and Nominating Committees and as
an alternate on the Human Resource and Ad Hoc Committee on Workforce Development. She
also served as the Board Chair during fiscal years 2004, 2005, and 2006; and
WHEREAS, Robin is a teacher with the Lansing School District in the areas of language
arts and literacy, and was previously employed by the Michigan State Chamber of Commerce;
and
WHEREAS, Robin is a lifelong resident of Lansing whose commitment to service in her
community is demonstrated through a rich history of personal involvement.
RESOLVED, That the members of the Board of Water and Light Commissioners hereby
honor and commend Robin M. Smith upon leaving this Board with over five years of
distinguished service. In Regular Session this 251h day of March 2008, we sincerely wish Robin
continued success in all her endeavors.
BOARD OF COMMISSIONERS
Semone M. James, Chair Julee M. Rodocker, Vice Chair
Robert W. Cochran Peter W. Kramer
Tony DeLuca Frank Lain
Joseph E. Graves, Jr. Sandra Zerkle
Motion by Commissioner Kramer, seconded by Commissioner Zerkle, to approve the resolution
honoring former Commissioner Robin Smith.
Action: Carried unanimously.
Board Meeting Page 29 of 31
March 25,2008
esolution 2008-3-
BOARD OF WATER AND LIGHT
RESOLUTION HONORING SANTIAGO RIOS
WHEREAS, it is a pleasure to extend this expression of our thanks and best wishes to
Santiago Rios for his service as a Commissioner of the Board of Water and Light; and
WHEREAS, Santiago Rios was appointed to the Board of Commissioners on June 14,
2004 as an At Large Commissioner. This Board wishes to acknowledge his many contributions
to the Board of Water and Light, the City of Lansing and its citizens; and
WHEREAS, Santiago served on the Human Resources Committee, Executive
Committee, Finance Committee, Ad Hoc Committee for Workforce Development and Board
Chair from July to November 2007; and,
WHEREAS, Santiago practiced law in Michigan and Illinois, served as Senior Vice
President for Sosa, Bromley, Aguilar& Associates, a national marketing and advertising firm,
and as Assistant Attorney General, Mr. Rios serves as General Counsel for the Michigan
Department of Community Health; and
WHEREAS, Santiago is a founding member of the Julian Samora Research Institute at
Michigan State University, and has served as a member of the City of Lansing Human Relations
and Community Services Board, and as chairperson of the Capital Area Cesar E. Chavez
Commission for five years; and
RESOLVED, That the members of the Board of Water and Light Commissioners hereby
honor and commend Santiago Rios upon leaving this Board with three years of distinguished
service. In Regular Session this 251h day of March 2008, we sincerely wish Santiago continued
success in all his endeavors.
BOARD OF COMMISSIONERS
Semone M. James, Chair Julee M. Rodocker, Vice Chair
Robert W. Cochran Peter W. Kramer
Tony DeLuca Frank Lain
Board Meeting Page 30 of 31
March 25,2008
Joseph E. Graves, Jr. Sandra Zerkle
Motion by Commissioner Cochran, seconded by Commissioner Kramer, to approve the
resolution honoring former Commissioner Santiago Rios.
Discussion: Commissioner Cochran advised of his great respect and growing friendship with
former Commissioner Santiago Rios. It was noted that Mr. Rios contribution to the board was
good, important and informed. Commissioner Cochran noted that he was sorry Mr. Rios is no
longer here but he applauded his service to the BWL.
Commissioner James echoed Commissioner Cochran's sentiments. She also advised that she
had a great deal of respect for Mr. Rios and his contributions to the BWL. He always came well
prepared and she believed that he enjoyed being chair. Commissioner James noted that she
missed Mr. Rios and wishes him well in his future endeavors.
Action: Carried unanimously.
MANAGER'S REMARKS
Peter Lark noted that the BWL is consistently honored for its utility and community service
work. The BWL recently received a Circle of Honor Award from the Capital Area United Way.
The award recognizes the BWL's many years of funding and it's in kind support. In addition,
the Arbor Day Foundation nationally recognized the BWL along with 148 other utilities in last
weeks Wall Street Journal. Each year the Arbor Day Foundation gives out Tree Line USA
awards. In order to win recognition a utility must meet the following requirements: provide a
program of quality tree care, conduct annual worker trending, utilize quality tree care practices,
and maintain a tree planting and public education program.
Adopt-A-River Day is April 26, 2008 in which the BWL will give Lansing area families a
chance to adopt hundreds of trees. Each family will receive an adoption certificate with their
respective tree. This project will bring greater attention to the need to plant more trees in our
community and the BWL can be proud of its efforts to promote tree planting and tree care.
COMMISSIONERS' REMARKS
Commissioner Zerkle commended staff for their work on the School to Training and
Employment Program (STEP) that was a part of the initiative under the Ad Hoc Committee. The
project seems to be growing and she is impressed with the forward movement of trying to
encourage young people in areas aside from 4-year college programs.
Commissioner James echoed Commissioner Zerkle's comments regarding STEP and
commended staff on the program. She also noted that the Board of Commissioners looks
forward to working with staff on all of their future initiatives.
Board Meeting Page 31 of 31
March 25,2008
In addition, Commissioner James also commended former Commissioner Robin Smith for her
valuable contributions as a board member. Ms. Smith was the Board Chair for three fiscal
periods and is now the Chair of the Lansing Community College Board of Trustees.
Commissioner James noted that Ms. Smith will be missed and wished her the best as well.
EXCUSED ABSENCES
On motion by Commissioner Lain, seconded by Commissioner Cochran, to excuse the absence
of Commissioner Joseph Graves.
Action: Carried unanimously.
PUBLIC COMMENTS
Tracy Tolbert, BWL employee and member of the Inclusion and Equity Diversity Counsel noted
that she was proud to represent the union on this respective committee. She also noted that she
attended a diversity summit at the Kellogg Center that addressed various things that the BWL is
currently leading. The seminar noted the 3 A's of diversity that include the following: 1) assess
what we have, 2) articulate where we as an organization are going and what value is placed on
diversity, and 3) action. Action must take place after the assessment, which she believes is going
to occur. Ms. Tolbert further advised that she is proud of the BWL and thanked the Board of
Commissioners on behalf of the union, the BWL, and the community.
ADJOURNMENT
On motion by Commissioner Cochran, seconded by Commissioner DeLuca, the meeting
adjourned at 5:54 p.m.
/s/Rhonda Jones, Corporate Secretary
Filed with Lansing City Clerk
April 2, 2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
ATTACHMENT A
PROPOSED
RESIDENTIAL S SERVICE'
ENIOR CITIZEN
RATE NO.21
ears of age and
' available to any single family or multifamil ede dwelling eustomersmust be 65 y or less when ears
entire electric
Availahili -This rate is through the same m h the same meter.
lied at one point of delivery appurtenant tbuildings may be taken through
requirements are supplied served. Service to
head of the household being ed that
purposes unless the wiring is so arranged
Service under this rat e is not available to any single family or multifamily dwelling of 4 units or less unit when a portion
Purposes are metered separately.
of the residence or dwelling unit is used for commercial,industrial,or resale
service for residential and non-residential pure
under this rate shall provide evidence of age and contract with the Board of Water and Light
Customers taking service u
(BWL)to remain on this rate for at least twelve(12)months
n hertz,singl
Nature of Service-The service e phase, l20/240 nominal volts.
i is alternating Current, charges.
Shall be compute
Month)to- d in accordance with the following g
7/1/08
Basic Service Charge $2.76
Commodity Charge $.0509 per kWh for the first 300 kWh
$.0859 per kWh for-the next 200 kWh
$.l 152 per kWh for all over 500 kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly
factor added to the above energy charges
gY Adjustment
fined on a separate rate schedule incorporated herein by this reference.
EMU—Cost.,
-This rate is subject to an Ener Cost
and calculated as de political subdivision which
governmental authority or p production
other charges against the BWL property,or its operation,or the p
Tax Adjustment-Bills shall be increased within the limits of any g refees,Or anyvent other customers from being compelled to share
levies taxes,license fees,franchise offset any such cost and thereby p
and/or sale of electrical energy, payment charges,
such local increases. dela ed
charge of 5%of the unpaid balance,excluding Y
Delayed Payment Charge-A delayed payment due
shall be added to any bill that is not paid on or before to the first t regular bill for all customers turning on service at a
Application Charge-A$7.00 charge shall be added
service location irrespective of prior service with the BWL• Regulations for Electric Service
Reuulations-Serviceunder this rate is subject to the BWL Rules and
Rules and
incorporated herein by this refere
nce-
Effective:July 1,2009
Adopted:proposed
Approved by the Board: March 25, 2008
MINUTES OF THE BOARD OF COMMISSIONERS' RESCHEDULED MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday, January 29, 2008
The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco
Drive, Lansing, Michigan.
Present: Commissioners Robert Cochran (5:35), Tony DeLuca, Joseph Graves, Semone James,
Peter Kramer, Frank Lain, Julee Rodocker and Sandra Zerkle.
Absent: None.
The Acting Secretary declared a quorum present.
co ;T-
Chairperson James called the meeting to order at 5:30 p.m.
APPROVAL OF MINUTES
Motion by Commissioner Joseph Graves, seconded by Commissioner Peter Kramer, to approve
the minutes of the regular meeting held November 27, 2007 and the special meeting held
December 4, 2007.
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.
Phil Lemke, BWL employee, thanked Commissioners and staff for the support he has received
since his accident.
John Pollard spoke against the proposed rate increase. He believes that the Board of Water and
Light (BWL) are losing its customer base because of the utility costs in this area. He cited the
number of home vacancies in Lansing, the number of people living in poverty, and the senior
citizen discount. Mr. Pollard also thinks that rates for BWL customers outside of the City of
Lansing should be higher than those within the city.
Board Meeting Page 2
January 29,2008
Jim Harken of Lansing addressed the labor, pension, health-care costs, and wages for BWL
employees and stated that costs should be cut internally before increasing rates. He questioned
the steam utility being subsidized by the electric utility. He also cited the amount of money that
the city would have made if the BWL were sold in 1992.
Steve Rulison, Osborn Road, Lansing spoke on geothermal heating and suggested this as an area
that the BWL may be interested in pursuing.
Dorothy Alagna spoke against the proposed rate increase. She and her husband are retired and
on a fixed income and noted that the 7% increase is way out of line.
Steve Goodwin of Lansing believes that the BWL customer base is shrinking and that too many
people are losing their homes in this area. He questioned the high salary of executives and why
the BWL has so many new vehicles.
Leonard Wilson, Ada Street, Lansing thanked the BWL for repairing streetlights in his area. He
also spoke against the proposed rate increase. He and his wife are both on disability and stated
that it is difficult to make all of their monthly payments. He understands that rates may need to
be raised but perhaps not quite so high at this time.
Michael Cole of Lansing asked that the Commissioners consider a smaller rate increase,
suggesting a 3% to 31h% rate increase instead of 7%. He spoke of the money that the BWL
loaned the City by lowering the streetlight and fire hydrant rates as well as the sell of Ottawa
Station.
COMMUNICATIONS
Letter from Robin M. Smith dated December 4, 2007, expressing her pleasure in serving as a
Commissioner.
Received and placed on file.
Letter from Rev. Joe Huston, Sr., Minister of Central United Methodist Church dated January 17,
2008, regarding the proposed 6 percent steam rate increase.
Received and placed on file.
E-mail received from Mark Mitchell, 820 Britten Avenue, Lansing dated January 25, 2008,
opposing the rate increase.
Received and placed on file.
Letter from the State of Michigan, Department of Management and Budget, dated January 28,
2008, opposing the rate increase.
Board Meeting Page 3
January 29,2008
Received and placed on file.
Message from Marilyn Ford, 1501 Shubel, Lansing dated January 28, 2008, opposing the rate
increase.
Received and placed on file.
COMMITTEE REPORTS
FINANCE COMMITTEE REPORT
December 4, 2007
Finance Committee met at the Executive Offices, Lansing beginning at 4:30 p.m. on Tuesday,
December 4, 2007.
Acting Finance Committee Chair, Semone James called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Semone James
and Peter Kramer(arrived at a:as p.m.). Commissioners Frank Lain and alternate committee member
Robert Cochran were also present.
Absent: None.
Public Comments
There were no public comments.
Water Bonding Resolution
Susan Devon, Chief Financial Officer(CFO) introduced Warren Creamer, Bond Financial
Advisor with Robert W. Baird and William Danhof, Bond Counsel with Miller, Canfield,
Paddock & Stone. Staff sought Board approval of the proposed tenth supplement to the
Amended and Restated Bond Authorizing Resolution, dated October 24, 1989. The bond
resolution would authorize an issue up to $40 million of revenue bonds for water and electric
purposes. It would also provide for reserve, construction and other accounts that are needed to
maintain the bond proceeds. In addition, the rate covenant and additional bonds test for the
proposed and all future debt would change from 150% to 125% of the maximum annual debt
service requirements. Outstanding bonds issued prior to the tenth supplement would remain at
150% of the maximum annual debt service requirement. It was further noted that the proposed
tenth supplement bond detail provides for the sale of the bonds in either a competitive or
negotiated sale as determined by the Board of Water and Light's (BWL) CFO based on the
financial advisors recommendation.
In response to a Commissioner question, Mr. Baird clarified that rating agencies tend to rate
overall performance and not just legal covenants. Reducing the rate covenant to 125% increases
the BWL's rate flexibility as it looks towards more significant capital improvements, by
removing antiquated covenants that require the BWL to set rates to produce revenues in excess
of normal operational maintenance administration at levels, which would provide recovery of
Board Meetincy Page 4
January 29,2008
150% of maximum annual debt service requirements. In response to another question, it was
noted that the BWL is fairing extraordinarily well against other public utilities. It was further
advised that AAA ratings amongst electric utilities is typically an indication that an organization
has more funds in the bank than necessary and could make better decisions with respect to rates
and ratepayer money. In addition, the significant benefit between negotiated and open bonds is
its flexibility. Investors tend to pay more money for bonds if they have particular features; the
more complicated the transaction the more often one would see a negotiated sale. Mr. Baird
suggested that the BWL consider selling the proposed bond on a negotiated basis, which would
give the BWL an opportunity to re-familiarize itself with the process. It is not a decision that the
BWL must make right now. However, the process tends to be very open and fluid in that it is
real time whereas, one is allowed to adjust rates based on demand and supply for given
maturities.
On motion by Commissioner Graves, seconded by Commissioner Cochran, the Committee of
the Whole agreed to forward the Tenth Supplemental Revenue Bond resolution to the full Board
for consideration.
Action: Carried unanimously.
Internal Audit Reports
Susan Pifer, Director of Internal Audits provided an update with respect to internal audit reports
issued to date. In response to a Commissioner question, Ms. Pifer noted that any issues that arise
during the course of an audit are typically presented to and addressed by the CFO. More
specifically, she spoke to issues regarding the coal book inventory and shipping and receiving of
the coal entries into the general ledger. Although, both issues are currently being addressed, the
first one is relative to coal scales being used by the BWL and its vendor in determining their
accuracy with respect to current standards. The second item is primarily an issue of internal
control whereas; the buyer is making entries into the system and may need support and training
in this regard. It was noted that the Associate Internal Auditor and Manager of Internal Controls
and Tariff Administration could be sent to provide additional training and oversight relative to
this issue. In addition, Ms. Pifer also asked the Board of Commissioners to consider the addition
of an Audit Specialist to assist the Internal Audits and Metrics Department (IAD) and to also
perform the most perfunctory audits. The additional position would not exceed a variance of
$25,000.
On motion Commissioner Graves, seconded by Commissioner Kramer, the Committee of the
Whole agreed to add an Audit Specialist position to the Department of Internal Audits and
Metrics at a variance not to exceed $25,000.
Discussion: Commissioner Cochran asked if the variance amount was sufficient?
Ms. Pifer noted that IAD currently has a positive variance but it should be noted that the Board
would see a larger amount next year.
Action: Carried unanimously.
Board Meeting Page 5
January 29, 2008
Sarbanes-Oxley Update
Susan Pifer noted that external auditor audit fees are expected to increase due to the
implementation of Sarbanes-Oxley standards. The update noted an estimated increase of
approximately 15 —20% in audit fees. In response to a Commissioner question, Ms. Pifer
advised that she expects to receive a firm number from the BWL's auditors as to what they
should expect to receive for the next audit cycle scheduled to begin in March/April 2008.
There being no further business, the meeting adjourned at 4:58 p.m.
Respectfully submitted,
Semone M. James, Chair
Finance Chair
The report will be filed with the minutes of the January 29, 2008 Board meeting.
COMMITTEE OF THE WHOLE
Tuesday,January 8, 2008
The Committee of the Whole of the Board of Water and Light met at the Executive Offices,
Lansing beginning at 5:30 p.m. on Tuesday, January 8, 2008.
Committee of the Whole Chair, Julee Rodocker called the meeting to order and asked the
secretary to call the roll. The following members were present: Commissioners Robert Cochran,
Tony DeLuca, Joseph Graves (teleconference), Semone James, Peter Kramer, Frank Lain, Julee
Rodocker and Sandra Zerkle.
Absent: None
Public Comments
Lansing City Mayor Virg Bernero commented on the Ottawa Station project by highlighting the
tremendous historic opportunity of such a development. He also thanked the Accident Fund,
Christman Company and the Board of Water and Light (BWL) for their partnership efforts in
this endeavor. The project will bring five hundred new jobs, $130 million in private investments,
riverfront reinvention, and downtown rejuvenation. It was noted that it has been a long process
but it is a testament to the possibilities and talent of the community. Mayor Bernero went onto
urge support and thanked the BWL for what they have done thus far.
Kelly Rossman-McKinney of the Rossman Group and Secretary of the Lansing Economic
Development Corporation (EDC) made remarks regarding the Ottawa Station project. Ms.
Rossman advised that the Ottawa Station building is a huge landmark for those persons who
have lived in Lansing and thanked the BWL for memorializing the landmark in a holiday
greeting earlier this year. Ms. Rossman noted with great pride the ability to keep the Ottawa
Station building while also allowing it to contribute to the City of Lansing's economic rebirth.
Board Meeting Page 6
January 29, 2008
She also commented on Christman Company's significant investment and the BWL's
commitment as the property owner and member of the EDC. In addition,Ms. Rossman thanked
the members of the BWL, Christman Company and the Accident Fund for putting the project
together.
By unanimous consent the Committee of the Whole agreed to change the order of the agenda
items. As such, an Update on Ottawa Station Facility was moved to the first agenda item.
Update on Ottawa Station Facility
J. Peter Lark, General Manager advised that there are two resolutions before the Committee of
the Whole. The first resolution declares the entire Ottawa parcel as surplus property and the
second resolution authorizes the General Manager of the BWL to enter into a development
agreement with the City of Lansing and Christman Company. Staff recommended the
aforementioned resolutions because they allow the BWL to exchange a$21 million liability for
potential annual revenue of$635,000.
Dick Peffley, Executive Director of Operations proceeded with the Ottawa Station update and
acknowledged Robert Trezise and Karl Dorshimer of the Lansing Economic Development
Corporation and Jim Cash and Anthony Pecchio of the Christman Company. Mr. Peffley
provided the Board of Commissioners with a project summary sheet that gave specific details
pertaining to the expenditures, savings and revenue of the project. He also offered the
Commissioners a copy of the survey and complete appraisal if needed or so desired. In addition,
Mr. Peffley noted that the Ottawa Station project is an opportunity for the BWL to turn a cost
center into a revenue source. By request of Commissioner James, Mr. Peffley gave an overview
of the summary sheet and provided explanation regarding various components of the project as
well as additional information. Listed below are the highlights of said discussion. See
Attachment)
• Expenditures to date total $313,000. This includes outside attorney charges for the
development agreement, stack removal, BWL sign removal, and BWL engineering labor for
the chiller. All parties agreed to assume responsibility for their individual attorney fees. Last
fall $50,000 was allotted for stack maintenance. However, due to the budgeted temporary
repairs and the lack of value relative to the future development. It was decided to remove the
stack at a cost of$218,000, which is included in the total cost of$313,000.
• Expenditures after sale total $1,910,000. This includes outside attorney charges to close the
deal and construction of the new steam facility, which is the BWL's responsibility to fund.
• Negotiated property sale price of$275,000 (adjusted original $1.00 price to offset exit costs).
• Capitol budget reduction totals $6,525,000. The budget reduction includes replacing the
boiler and turbine room roofs, exterior maintenance, lead paint, asbestos abatement and soil
removal, stack repairs, and pigeon dropping cleanup. The negotiated property sale price
($275,000) and the capitol budget reduction ($6,525,000) equates to a onetime savings to the
BWL of$6,800,000.
Board Meeting Page 7
January 29,2008
• Annual budget savings total $87,000. This includes maintenance and security, utilities, and
insurance premiums.
• New annual revenue totals $635,000. This includes estimated revenue figures for electric
($195,000), water($16,000), steam ($117,000; negotiations in progress), and chilled water
($307,000; negotiations in progress).
• The Accident Fund development agreement will not be signed until September 2008.
However, chiller construction will begin spring 2008.
• There are two facilities currently within Ottawa Station that consist of chilled water and
steam. The BWL has been allocated $20 million to relocate the chilled water facility to Pine
and Allegan, which is the site of the State of Michigan's former chilled water facility. If
relocation cost exceeds $20 million then the BWL will incur the cost for the overage. The
BWL will oversee the project and Christman Construction will be the construction manager.
• Building a new chilled water facility will improve the BWL's rates and structure for that
respective utility. Thereby, allowing the BWL to possibly add new customer load with a
prospective customer currently building a new facility in the City of Lansing.
• The BWL will incur the cost associated with relocating the steam facility to an underground
vault outside of Ottawa Station. The cost to relocate the steam service is $1.9 million. It is
the BWL's intent to use in-house labor to complete the bulk of the steam relocation project
and possibly farm out some of the construction work.
Following the presentation, Commissioner Graves advised that he understood the project
required incentives and he agreed with Mayor Bernero in that it is a great project for the City of
Lansing. Incentives are needed to make the project work and the question arises as to where
those incentives should be derived. Incentives are being provided from a number of sources.
However, not being privy to all of the details of the respective deal, it was noted that he was
unaware e of the origin of the incentives. Commissioner Graves wanted confirmation that
the ratepayers would be responsible for the $1.9 million steam relocation cost, as he wants to
assure customers that the BWL has done due diligence as it relates to minimizing cost to the
ratepayer. Commissioner Graves also inquired about the appraisals relative to the sell of the
property and environmental remediation issues.
Dick Peffley agreed with Commissioner Graves' sentiment regarding the steam relocation cost
relative to ratepayers and advised that there were two appraisals in 2005 and one in 2001. The
three appraisals totaled $1.9 million relative to the value of the land. However, the appraisal
excluded the power plant and did not address the environmental liability. As such, once the plant
is factored into the equation, the other property then has a negative value of$21 million. In
response to an additional question, Mr. Peffley advised the committee that the capital budget
reduction of$6 million had not yet been included in the capital budget. However, the budget
reduction is a cost avoidance slated for somewhere in the future.
Board Meeting Page 8
January 29,2008
In response to Commissioner James' question regarding the construction budget, Mr. Peffley
noted that they received two chiller construction estimates for$21 and$24 million respectively.
In regards to Commissioner Graves' question regarding sufficient funding, Robert Trezise, Jr.,
President and Chief Financial Officer of the Lansing Economic Development Corporation noted
the following information:
• There is $130 million in private investment slated to cover the cost for the entire project.
Revenue calculations and estimates were done to determine the approximate cost. There is
no more funding beyond the $130 million currently allocated for said project.
• Christman Company is paying a certain amount of money to replace the chiller and will be
reimbursed through Brownfield Tax Increment Finance (TIF).
• The TIF funding belongs to Christman Company and the Accident Fund who will be
reimbursed over a period of 30 years with interest.
In response to Commissioner James' question regarding excess funds, Mr. Peffley confirmed that
if the chiller relocation costs come under budget ($20 million) then the remaining funds could be
reallocated to the steam relocation project to offset costs. In addition, he noted that the BWL is
currently negotiating a 30-year lease term with the State of Michigan. The State would be the
sole leaseholder and they are not interested in buying the BWL's chilled water system at this
time.
On motion by Commissioner Cochran, seconded by Commissioner Zerkle, the Committee of
Whole agreed to forward the proposed resolutions to the full Board for consideration. The
aforementioned resolutions are titled as follows: 1) Proposed Resolution of the Board of the
Lansing Board of Water and Light to Declare Property Surplus and Offer that Property to the
City of Lansing and 2) Proposed Resolution of the Board of the Lansing Board of Water and
Light to Approve the Execution of that Certain Property Purchase and Development Agreement.
Discussion: Commissioner Graves asked Susan Pifer, Director of Internal Audit, for assurance
that she has reviewed all of the materials and understands the liability to the BWL; and has
agreed that there is nothing in the documents that should be of concern to the Board. In addition,
he also asked Ms. Pifer if she was comfortable with the compromise previously discussed
regarding the reallocation of funding from the chiller project to the steam project provided it
comes under budget?
In response, Ms. Pifer noted that she received the documents the day before and reviewed the
estimates with Dick Peffley to the best of their ability. The estimates are reasonable given the
information available and she cannot promise that they will not change as the project moves
forward. Ms. Pifer also noted that she was comfortable with utilizing rates to spread the cost out
over a period of time as opposed to absorbing the cost in one year. In addition, it is a better
scenario if cost can be abated with some of the surpluses.
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January 29,2008
Following brief discussion, staff confirmed that the aforementioned capacity to abate the steam
relocation costs with the chiller surplus is already included in the resolution brought before the
Committee of the Whole.
Commissioner Kramer abstained from the discussion and subsequent vote regarding both
resolutions.
Action: Carried unanimously.
Commissioner Craves departed the meeting at 6:22 p.m.
Discussion on Board Retreat Agenda Items
Commissioner James spoke to board retreat facilitator, Bryan Singletary who confirmed his
attendance for day one of the retreat. He also agreed with the existing outline that includes board
development and strategic planning with a minimal amount of time spent discussing board
governance.
Peter Lark confirmed that staff would provide a short outline to facilitate the discussion held on
day two. Some of the discussion topics will include generation supply and buying on the open
market. Approximately 5-10 key personnel from the executive team will be present to
participate in day two of the retreat.
Discussion on Agenda Items for joint Meeting with City Council
The committee briefly discussed the tentative agenda items for the joint meeting with City
Council. As such, the committee agreed to also provide an update on the Pension Plan (VEBA)
and Defined Benefit (DB) Request for Proposal (RFP). In addition, it was noted that the joint
meeting should be held after the board retreat so that the Board would be well updated on the
strategic plan.
Parliamentary Training for Commissioners
A request to provide parliamentary training to the Board of Commissioners was sent to nine
registered parliamentarians located in the southeastern Michigan area. Four proposals were
received and forwarded to the Board of Commissioners for review and consideration. Following
discussion, the committee took the following action:
On motion by Commissioner Lain, seconded by Commissioner Cochran, the Committee of the
Whole agreed to award the proposal to provide parliamentary training to Eleanor A. Siewert.
Discussion: The Commissioners discussed the various estimates provided in the proposals,
which included mileage, prep time and handouts. Upon further discussion, Commissioner Lain
agreed to a friendly amendment to award the proposal to Eleanor A. Siewert to provide four
hours of parliamentary training at a cost of$600.00 not to exceed a total of$750.00.
Action: Carried unanimously.
Board Meeting Page 10
January 29,2008
Rate Hearing Presentation
The Committee of the Whole received a draft copy of the rate hearing presentation materials,
which are subject to change. It was noted that the public hearing would be held on Tuesday,
January 22nd at 5:30 p.m., at which time staff will present the need for BWL rate increases to the
general public. During the discussion staff provided clarification and committee members
suggested the following presentation changes.
• Include graphs/pie charts explaining the cost of the CSO Project relative to the BWL.
• Move slide 17 to the beginning of the presentation, as the remaining slides will clarify the
slide and substantiate its findings.
Commissioner Craves re-entered the meeting via teleconference at 7:07 p.m.
Update on CSO Project
Doug Wood, Director of Engineering provided an update on the CSO Project. As such, Mr.
Wood noted that a letter was sent to Chad Gamble, Director of Public Service Department(PSD)
with the City of Lansing. The letter reaffirmed that the BWL's relationship with the PSD and
expressed an interest in performing some of the water work. Subsequent to the letter, Mr. Wood
met with Mr. Gamble and the PSD also released a 2-year construction cycle schedule in which
there are opportunities that the BWL could test pilot the project. There are obstacles to work out,
coordination efforts to be made, and traffic detours to address. However, it appears that the City
is receptive to the suggestion, which would allow the BWL to test its ability to perform some of
the CSO work at a comparable price within the next 2 years. In addition, Mr. Wood advised that
staff is preparing its annual construction season report, which will be forthcoming.
Peter Lark advised the committee that he has had several conversations with Mr. Gamble who
assured the BWL that they would give serious consideration on a going forward basis. It is
optimistic that the BWL may receive some work this year but definitely next year. In response
to Commissioner Graves' question, Mr. Lark confirmed that he was aware of the damage done to
BWL equipment by the City's CSO contractors as well as issues with the quality assurance
inspector relative to BWL equipment. It was noted that Jim Draventstatt-Morceri, Doug Wood
and Mr. Lark would have further discussion regarding the matter after the release of the
aforementioned report.
Six-Month General Manager Performance Review and Performance Factors/Goals
J. Peter Lark, General Manager and Board appointee requested an executive session for the
purpose of receiving his six-month performance review as permitted by Open Meetings Act
exemption MCL 15.268(a).
Moved by Commissioner Cochran, seconded by Commissioner Zerkle to go into executive
session. (7:14 p.m.) The roll was called.
Yeas: Commissioners Cochran, DeLuca, Graves (teleconference), James, Kramer, Lain,
Rodocker, and Zerkle.
Board Meeting Page 11
January 29,2008
Nays: None.
Absent: None.
Carried unanimously.
Moved by Commissioner James, seconded by Commissioner Cochran that the Committee of the
Whole returns to open session.
Carried unanimously.
The Committee of the Whole meeting reconvened in open session at 8:30 p.m.
There being no further business, the meeting adjourned at 8:31 p.m.
Respectfully submitted,
Julee M. Rodocker, Chair
Committee of the Whole
The report will be filed with the minutes of the January 29, 2008 Board meeting.
FINANCE COMMITTEE
January 15, 2008
The Finance Committee met at the Executive Offices, Lansing beginning at 4:00 p.m. on
Tuesday, January 15, 2008.
Finance Committee Chair, Joseph Graves called the meeting to order and asked the secretary to
call the roll. The following members were present: Commissioners Robert Cochran, Joseph
Graves, Semone James, and Peter Kramer. Commissioner Frank Lain, alternate committee
member was also present.
Absent: None.
Public Comments
There were no public comments.
Capital Budget Update: Eckert Station
Dick Peffley, Executive Director of Operations gave a brief overview of the Eckert Station Unit
#1 Condenser Retubing project. The project cost for the fiscal year 2008 capital budget is
$361,700. The original tubes currently in place are approximately 50 years old and have
outlived their normal life expectancy by 10 years. It was recommended that the tubes be
replaced now while unit#1 is down for a turbine overhaul. If not completed at this time, then the
next cycle outage will be in two years of which the Production Utility has concerns regarding the
tubes reliability. Mr. Peffley requested that the Finance Committee consider moving the
Board Meeting Page 12
January 29,2008
resolution forward in order to allow for the replacement of the condenser tubes within the current
fiscal budget.
On motion by Commissioner James, seconded by Commissioner Cochran, the Finance
Committee agreed to move the Eckert Unit#1 Condenser Retubing resolution to the full Board
for consideration.
Action: Carried unanimously.
Update on Solicitation of DB & VEBA RFP
Susan Devon, Executive Director and Chief Financial Officer gave a brief update on the
solicitation process for the Defined Benefit (DB) and Retiree Benefit Plan and Trust (VEBA)
request for proposal (RFP). The committee members included Director of Internal Audit Susan
Pifer, Charles Moore of C.L. Moore &Associates and Susan Devon. In addition to the
committee members, Commissioners Robert Cochran and Joseph Graves composed a panel of
five and conducted interviews with the following vendors: Asset Consulting Group, Citizens
Bank, LCG Associates and Merrill Lynch. Upon conclusion of the interviews and follow-up
work completed by Susan Pifer, the committee recommended that the RFP be awarded to Merrill
Lynch. The value of the assets included in the DB and VEBA plan total $165 million. Staff and
the Finance Committee members agreed that there is no committee action necessary relative to
the RFP update on the solicitation of the DB and VEBA plans.
Update on Pension Advisory and Banking Services
Susan Devon provided an update on the pension advisory services relative to the Defined
Contribution (DC) and 457 plans as well as banking services. It was noted that a RFP for the DC
and 457 plans were sent to different vendors in an attempt to determine if it would be beneficial
for the Board of Water and Light (BWL) and its employees to combine services. The RFP was
sent on December 20, 2007 and is due on January 25, 2008. The process for the current RFP will
follow that of the process used for the DB and VEBA plans. It was also noted that any changes
made to the plans would require extensive employee education.
In addition, a request for information (RFI) was sent for banking services to help the BWL
determine what is available and how it might combine services and receive improved cost
savings and services. Once the responses have been evaluated then staff will prepare a RFP
based on the information received from the respective RFI's. In response to a Commissioner
question, Ms. Devon advised that the RFP for banking services would be separate from that of
the pension advisory services (DC and 457 plans).
Capital Budget Update: Mobile Resource Management
Tom Marlow, Manager of Delivery Services presented an overview of the mobile resource
management project. The total project cost is $2,353,000 that includes capital project cost of
$1,840,000 and internal labor expenses of$513,000. The original budget estimate of$855,000
developed in 2005 did not take into account all related expenses. Therefore, the resolution
proposes that the capital project budget be increased from$855,000 to $1,840,000 to
accommodate cost.
Board Meeting Page 13
January 29, 2008
The mobile resource management (MRM) project will allow for more efficient work planning,
scheduling, and dispatch of BWL crews. Three major components of the project are hardware
and software for the office and vehicles as well as communication. Combined these components
will allow field workers the opportunity to communicate with the office electronically. It will
also increase productivity, reduce the paper process, utilize a global positioning system (GPS),
and provide access to future technologies. General Electric was recommended as the primary
vendor to lead the project and other vendors will be utilized as needed. In response to a
Commissioner question, Mr. Marlow noted that GE's system is being utilized by over twenty
(20) other utilities including Consumers Energy. GPS will track the vehicles location, which
covers the BWL's entire service territory, while the automotive vehicle locating (AVL) software
will communicate potential problems and/or maintenance issues to Fleet Services. The benefit of
the system is increased safety, productivity and security. The BWL outage management system
will also be linked to the new product, which enables BESOC to know where trucks are located
in order to route the proper resources and also allow employees to communicate when service
work is complete. In response to a Commissioner question regarding the operating system, Mr.
Marlow noted that the tracking system would be located at the BWL and the only outside
component is that of the AVL satellite. It was also advised that annual recurring operations and
maintenance (O&M) cost are $239,000 with a payback period of 4 years. In response to other
Commissioner questions, Mr. Marlow noted that the fiscal year 2008 O&M cost of$563,330 is
comprised of 6-months of O&M cost and budgeted employee wages. Additionally, the BWL
will utilize existing employees and will not hire new employees for this project. It was also
confirmed that the BWL would not need to build new cellular towers unless the BWL decides to
build its own wireless infrastructure.
On motion by Commissioner Cochran, seconded by Commissioner Kramer, the Finance
Committee agreed to forward the Mobile Resource Management Project resolution to the full
Board for consideration.
Action: Carried unanimously.
Other
Audit Committee. Susan Pifer and Susan Devon will meet to discuss the merits of the Audit
Committee and the need for committee meetings on a monthly or bi-monthly basis.
There being no further business the meeting adjourned at 4:38 p.m.
Respectfully submitted,
Joseph E. Graves, Jr., Chair
Finance Committee
The report will be filed with the minutes of the January 29, 2008 Board meeting.
Board Meeting Page 14
January 29,2008
MANAGER'S RECOMMENDATIONS
esolution 2008-1-1
A. Tenth Supplement Revenue Bond Resolution
WHEREAS, the City of Lansing acting by and through the Board of Water and Light has
previously issued its revenue bonds payable from revenues of the Water Supply, Steam, Chilled
Water and Electric Utility System under the provisions of Act 94, Public Acts of Michigan,
1933, as amended, and a Bond Resolution amended and restated on October 24, 1989 and further
amended and supplemented as described under the definition "Bond Resolution"below; and
WHEREAS, all terms not defined herein shall have the meanings set forth in the Bond
Resolution; and
WHEREAS, it is necessary for the public health, safety and welfare of the residents of the City
and the users of the System to acquire and construct the Series 2008 Project (as defined below);
and
WHEREAS, the City, acting by and through the Board, took action on July 25, 2006 to declare
official intent to reimburse expenditures for certain costs associated with acquisition and
construction of the Series 2008 Project with proceeds of revenue bonds, in compliance with
Treasury Regulation Section 1.150-2 issued by the Internal Revenue Service pursuant to the
Internal Revenue Code of 1986, as amended; and
WHEREAS, on October 12, 2007, the City published a Notice of Intent to Issue Revenue Bonds
and Right to Petition for Referendum in the Lansing State Journal describing revenue bonds to
be issued in one or more series to finance costs of the Series 2008 Project, and no petitions
requesting referendum as described in the Notice were filed with the City Clerk within the
referendum period; and
WHEREAS, Section 18(a) of the Bond Resolution as amended by Section 6 of the Second
Supplemental Revenue Bond Resolution permits the issuance of Additional Bonds of equal
standing and priority of lien with the Outstanding Senior Lien Bonds (defined below) for repairs,
extensions, enlargements and improvements to the System and costs of issuing such Additional
Bonds, including deposits which may be required to be made to a bond reserve account, if 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 the Additional Bonds shall be equal to at
least one hundred fifty (150%) percent of the maximum Aggregate Debt Service Requirement in
any current or future fiscal year on the Outstanding Bonds and on the Additional Bonds then
being issued; and
WHEREAS, the conditions and requirements of Section 18(a) of the Bond Resolution have been
met for the issuance of the proposed revenue bonds, and the City is ready to authorize issuance
of the first series of bonds to finance the Series 2008 Project.
NOW, THEREFORE, BE IT RESOLVED THAT:
Board Meeting Page 15
January 29,2008
Section 1. Definitions. All terms not defined herein shall have the meanings set forth
in the Bond Resolution, and whenever used in this Bond Resolution, except when otherwise
indicated by the context, the following terms shall have the following meanings:
(a) "Additional Bonds" means any Additional Bonds of equal standing with the
Series 2008A Bonds issued pursuant to Section 18(a) of the Bond Resolution as
amended by this Tenth Supplemental Revenue Bond Resolution.
(b) "Bond Resolution" means the Bond Resolution adopted by the Board on
September 26, 1989, as amended and restated on October 24, 1989 and
supplemented by the First Supplemental Revenue Bond Resolution adopted by the
Board on October 26, 1993, the Second Supplemental Revenue Bond Resolution
adopted by the Board on January 11, 1994, the Third Supplemental Revenue
Bond Resolution adopted on September 2, 1999, the Fourth Supplemental
Revenue Bond Resolution adopted October 26, 1999, the Fifth Supplemental
Bond Resolution adopted by the Board April 24, 2001, the Sixth Supplemental
Revenue Bond Resolution adopted by the Board on July 23, 2002, the Seventh
Supplemental Bond Resolution adopted by the Board on July 23, 2002, the Eighth
Supplemental Revenue Bond Resolution adopted on August 12, 2003, the Ninth
Supplemental Revenue Bond Resolution adopted on July 26, 2005, and this Tenth
Supplemental Revenue Bond Resolution, and any other resolution which amends
or supplements the Bond Resolution.
(c) "Bonds" means the Series 2008A Bonds and any Additional Bonds of equal
standing hereafter issued.
(d) "Chief Financial Officer" means the Chief Financial Officer of the Board.
(e) "Notice of Intent" means the Notice to Electors of the City of Lansing of Intent to
Issue Revenue Bonds and Right to Petition for Referendum published in the
Lansing State Journal on October 12, 2007.
(f) "Outstanding Senior Lien Bonds" means the Outstanding portion of: the Water
Supply and Electric Utility Bonds, Series 1994B, the Water Supply, Steam and
Electric Utility System Revenue Bonds, Series 1999A, the Water Supply, Steam
and Electric Utility System Revenue Bonds, Series 2002A, the Water Supply,
Steam and Electric Utility System Revenue Refunding Bonds, Series 2002B, the
Water Supply, Steam and Electric Utility System Revenue Refunding Bonds,
Series 2003A, and the Water Supply, Steam and Electric Utility System Revenue
Refunding Bonds, Series 2005A.
(g) "Reserve Requirement" shall mean the Reserve Requirement established by
Section 11 of this Tenth Supplemental Revenue Bond Resolution.
(h) "Series 2008A Bonds" means the Water Supply, Steam, Chilled Water and
Electric Utility System Revenue Bonds, Series 2008A issued pursuant to this
Tenth Supplemental Revenue Bond Resolution.
(h) "Series 2008A Construction Fund" shall mean the Series 2008A Construction
Fund established pursuant to this Tenth Supplemental Revenue Bond Resolution.
Board Meeting Page 16
January 29,2008
(i) "Series 2008 Project" means the acquisition and construction of improvements to
the System, together with any appurtenances and attachments thereto and any
related site acquisition or improvements, described in the Notice of Intent
including, but not limited to, renovation, improvement and equipping of water
conditioning plants; construction, improvement, and renovation of water
transmission and distribution lines and related water utility system facilities;
renovation, improvement and equipping of electric generating stations; and
construction, improvement and renovation of electric transmission and
distribution lines and related electric utility system facilities.
(j) "System" means the complete facilities of the City for the supply and distribution
of water and the generation and distribution of electricity, steam, chilled water,
and heat, including all plants, works, instrumentalities and properties, used or
useful in connection with the supply and distribution of water and the generation
and distribution of electricity, steam, chilled water, and heat and all additions,
extensions and improvements thereto existing or hereafter acquired by the City.
Section 2. Conditions Permitting Issuance of Additional Bonds. Pursuant to
Section 18(a) of the Bond Resolution as amended and supplemented through the date of issuance
of the last series of the Outstanding Senior Lien Bonds, the City hereby determines that the
Series 2008A Bonds shall be issued only if: (a) the average actual or augmented Net Revenues of
the System for the fiscal year ending June 30, 2007 are equal to at least 150% of the maximum
Aggregate Debt Service Requirement in any current or future fiscal year on the Outstanding
Bonds and the Series 2008A Bonds, and (b) the City is not in default in making its required
payments to the Operation and Maintenance Fund or the Redemption Fund.
Section 3. Ratification of Notice of Intent. The Board hereby ratifies and confirms
the actions taken by the Corporate Secretary of the Board to publish the Notice of Intent, and
hereby determines that the form of notice and the manner of publication is the method best
calculated to give notice to the electors of the City of the intent to issue the Series 2008A Bonds
and the purpose therefore, the source of payment of the Series 2008A Bonds, and the right of
referendum relating thereto, and the manner of publication is hereby determined to reach the
largest number of persons to whom the notice is directed.
Section 4. Necessity; Preliminary Approval of Plans; and Statement of Purpose. It is
hereby determined to be a necessary public purpose of the City to acquire and construct the
Series 2008 Project in accordance with the plans and specifications prepared by the City's
consulting engineers, which plans and specifications are hereby approved.
Section 5. Costs; Useful Life. The total cost of the Series 2008 Project is estimated
to be not-to-exceed Forty Million Dollars ($40,000,000) including the payment of incidental
expenses as specified in Section 6 of this Resolution, which estimate of cost is hereby approved
and confirmed, and the period of usefulness of the Series 2008 Project is estimated to be not less
than thirty(30) years.
Section 6. Payment of Cost of Project; Bonds Authorized; Applicable Law. To pay
part of the cost of acquiring and constructing all or a portion of the Series 2008 Project, including
payment of all legal, engineering, financial and other expenses incident thereto and incident to
Board Meeting Page 17
January 29,2008
the issuance and sale of the Series 2008A Bonds, the City shall borrow the sum of not-to-exceed
Forty Million Dollars ($40,000,000) and shall issue the Series 2008A Bonds therefore pursuant
to the provisions of Act 94. The remaining cost of the Series 2008 Project, if any, shall be
defrayed from funds on hand and legally available for such use, or, if the principal amount of the
Series 2008A Bonds is less than $40,000,000, from an additional series of bonds to be issued
upon approval of a future resolution. The Series 2008A Bonds shall be sold and the proceeds
applied in accordance with the provisions of Act 94.
Section 7. Series 2008A Bond Details, Registration and Execution. The
Series 2008A Bonds shall be designated as the "Water Supply, Steam, Chilled Water and
Electric Utility System Revenue Bonds, Series 2008A" and shall be payable solely out of the Net
Revenues of the System. City Council shall not be requested to pledge the full faith and credit of
the City for payment of the Series 2008A Bonds. The Series 2008A Bonds shall be issued as
fully registered bonds registered in the denomination of$5,000 or integral multiples thereof and
shall be numbered in consecutive order of registration or authentication from 1 upwards. The
Series 2008A Bonds shall be dated as of the Date of Delivery thereof or such other date as
determined at the time of sale of the Series 2008A Bonds, shall mature as serial bonds or term
bonds on such dates as shall be determined at the time of sale of the Series 2008A Bonds but not-
to-exceed thirty (30) annual maturities.
The Series 2008A Bonds shall be subject to optional or mandatory redemption prior to
maturity at the times and prices finally determined at the time of sale of the Series 2008A Bonds.
The Series 2008A Bonds shall bear interest at a rate or rates to be determined on sale
thereof not exceeding 6.00% per annum, payable on July 1, 2008, or such later date as provided
at the time of sale of the Series 2008A Bonds, and semi-annually thereafter on January 1st and
July 1st of each year.
The Series 2008A Bonds shall be executed by the manual or facsimile signature of the
Chairperson and the Corporate Secretary of the Board. No Series 2008A Bond shall be valid
until authenticated by an authorized representative of the Transfer Agent. The Series 2008A
Bonds shall be delivered to the Transfer Agent for authentication and be delivered by the
Transfer Agent to the purchaser in accordance with instructions from the Chief Financial Officer
upon payment of the purchase price for the Series 2008A Bonds in accordance with the bid
therefore when accepted. Executed blank bonds for registration and issuance to transferees shall
be delivered to the Transfer Agent for safekeeping from time to time as necessary.
Section 8. Registration and Transfer. The Chief Financial Officer is hereby
authorized to appoint as transfer agent for the Series 2008A Bonds a bank or trust company
qualified to act as bond registrar, paying agent and transfer agent (the "Transfer Agent"). The
Chief Financial Officer is hereby authorized to execute one or more agreements with the
Transfer Agent on behalf of the City. The City reserves the right to replace the Transfer Agent at
any time, provided written notice of such replacement is given to the registered owners of record
of bonds not less than sixty (60) days prior to an interest payment date. Principal of and interest
on the Series 2008A Bonds shall be payable by check or draft mailed by the Transfer Agent to
the registered owner at the registered address as shown on the registration books of the City
maintained by the Transfer Agent. Interest shall be payable to the person or entity who or which
is the registered owner of record as of the fifteenth (15th) day of the month prior to the payment
Board Meeting Page 18
January 29,2008
date for each interest payment. The date of determination of the registered owner for purposes of
payment of interest as provided in this paragraph may be changed by the City to conform to
market practice in the future.
The Series 2008A Bonds may be issued in book-entry-only form through The Depository
Trust Company in New York, New York("DTC"), and the Chief Financial Officer is authorized
to execute such custodial or other agreement with DTC as may be necessary to accomplish the
issuance of the Series 2008A Bonds in book-entry-only form and to make such changes in the
form of the Series 2008A Bonds within the parameters of this Resolution as may be required to
accomplish the foregoing. Notwithstanding the foregoing, if the Series 2008A Bonds are held in
book-entry-only form by DTC, payment of principal of and interest on the Series 2008A Bonds
shall be made in the manner prescribed by DTC.
The Series 2008A Bonds may be transferred upon the books required to be kept by the
Transfer Agent pursuant to this section by the person or entity in whose name it is registered, in
person or by the registered owner's duly authorized attorney, upon surrender of the bond for
cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form
approved by the Transfer Agent. Whenever any bond shall be surrendered for transfer, the City
shall execute and the Transfer Agent shall authenticate and deliver a new bond of the same series
in like aggregate principal amount, maturity and interest rate. The Transfer Agent shall require
the payment by the bondholder requesting the transfer of any tax or other governmental charge
required to be paid with respect to the transfer. Notwithstanding the foregoing, if Bonds are held
by DTC in book-entry-only form, the transfer of Bonds shall be made in the manner prescribed
by DTC.
Upon payment by the City of all outstanding principal of and interest on the
Series 2008A Bonds, the registered owner thereof shall deliver the Series 2008A Bonds to the
City for cancellation.
Section 9. Deposit to Bond Reserve Account. On or prior to the date of delivery of
the Series 2008A Bonds, the City shall deposit into the Bond Reserve Account any amount
necessary to cause the amount on deposit in the Bond Reserve Account to be equal to the
Reserve Requirement. The City may meet the Reserve Requirement by a letter of credit, a surety
bond, or an insurance policy if the provider or issuer thereof shall be rated AAA by Moody's
Investors Service and Standard and Poor's Corporation or any successor to either, and the Chief
Financial Officer is hereby authorized to execute an agreement with the provider or issuer of the
letter of credit, surety bond, or insurance policy.
Section 10. Series 2008A Bond Proceeds. From the proceeds of sale of the
Series 2008A Bonds there first shall be immediately deposited in the Redemption Fund an
amount equal to the accrued interest and premium, if any, received on delivery of the
Series 2008A Bonds, and the City may take credit for the amount so deposited against the
amount required to be deposited in the Redemption Fund for payment of the next maturing
interest on the Series 2008A Bonds; provided, however, that at the discretion of the Chief
Financial Officer, all or a portion of any premium received upon delivery of the Series 2008A
Bonds may be deposited in the Bond Reserve Account or the Series 2008A Construction Fund in
consultation with Bond Counsel.
Page 19
Board Meeting
January 29,2008
There shall next be deposited in the Bond Reserve Account an amount, if any, designated
at the time of sale of the Series 2008A Bonds as necessary to cause the amount on deposit in the
Bond Reserve Account to be equal to the Reserve Requirement.
The remaining proceeds of the Series 2008A Bonds shall be deposited in the
Series 2008A Construction Fund which shall be established by the Chief Financial Officer in a
bank or banks qualified to act as depository of the proceeds of sale under the provisions of
Section 15 of Act 94. Monies in the Construction Fund shall be applied solely in payment of the
portion of the cost of the Series 2008 Project being financed with proceeds of the Series 2008A
Bonds and any costs of engineering, legal, financial, bond insurance premiums and other
expenses incident thereto and to the issuance of the Series 2008A Bonds.
Any unexpended balance of the proceeds of sale of the Series 2008A Bonds remaining in
the Construction Fund after completion of the Series 2008 Project may, in the discretion of the
Chief Financial Officer,be deposited to the Bond Reserve Account in order to meet the Reserve
Requirement, or for further improvements, enlargements and extensions to the System. Any
balance remaining after such expenditure shall be paid into the Redemption Fund for the purpose
of purchasing Series 2008A Bonds on the open market at not more than the fair market value
thereof but not more than the price at which the Series 2008A Bonds may next be called for
redemption or used for the purpose of calling Series 2008A Bonds for redemption.
Section 11. Amendment of Reserve Requirement. Until payment or defeasance in full
of the Outstanding Senior Lien Bonds, the City must comply with the Reserve Requirement as
defined in Section 1 of the Bond Resolution as amended and restated on October 24, 1989, which
is the lesser of(a) the maximum Aggregate Debt Service Requirement for the then current and
any subsequent operating year and (b) ten percent of the aggregate proceeds of all Outstanding
Bonds. After payment or defeasance in full of the Outstanding Senior Lien Bonds, "Reserve
Requirement" shall mean the lesser of(i) the maximum annual debt service requirements on the
Outstanding Bonds, (ii) 125% of the average annual debt service requirements on the
Outstanding Bonds, or(iii) the total of 10% of the original aggregate face amount of each series
of the Outstanding Bonds, reduced by the net original issue discount, if any; provided, however,
that the Reserve Requirement shall not at any time exceed the amount allowed to be invested at
an unrestricted yield pursuant to Treas. Reg. Section 1.148 2(f)(2) or any successor provision
thereto as applicable to the Bonds.
Section 12. Amendment of Rate Covenant. Section 9 of the Bond Resolution, as
previously amended by Section 5 of the Second Supplemental Revenue Bond Resolution, is
amended to provide:
After payment or defeasance in full of the Outstanding Senior Lien Bonds and the Water
Supply, Steam and Electric Utility System Subordinate Lien Revenue Bonds, Series 1999B, the
Board will at all times fix, establish, maintain and collect rates, fees and charges for the sale of
the output, capacity, use or service of the System which, together with other income, are
reasonably expected to yield Net Revenues equal to at least 125% of the Aggregate Debt Service
Requirement for the forthcoming twelve month period plus such amount as is necessary to
comply with all covenants in the Bond Resolution and to pay all charges and liens whatsoever
payable out of Net Revenues in such period.
Page 20
Board Meeting
January 29,2008
Section 13. Amendment of Additional Bonds Test. Until payment or defeasance in
full of the Outstanding Senior Lien Bonds, the City must comply with the additional bonds test
imposed by Section 6 of the Second Supplemental Revenue Bond Resolution adopted
January 11, 1994. Section 18(a) of the Bond Resolution, as previously amended by Section 6 of
the Second Supplemental Revenue Bond Resolution, is amended to provide:
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 on the Net Revenues of the System with the Series 2008A 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 Bonds (unless such partial refunding
is done in compliance with (b)below) and paying costs of issuing such Additional Bonds,
including deposits which may be required to be made to a bond reserve account. Bonds
for such purposes shall not be issued pursuant to this subparagraph (a) unless the 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 Bonds shall be equal to at least one
hundred twenty-five (125%) percent of the maximum Aggregate Debt Service
Requirement in any current or future fiscal year on the Outstanding Bonds and on the
Additional Bonds then being issued. If the Additional Bonds are to be issued in whole or
in part for refunding Outstanding 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 Bonds to be refunded from
the proceeds of the Additional 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 Bonds, the Net Revenues may be augmented by an
amount which in the opinion of the Board's financial advisor 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 Board's financial advisor 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 Bonds to
be issued.
No Additional 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.
Page 21
Board Meeting
January 29,2008
The remainder of Section 18 of the Bond Resolution shall not be modified or amended by
this Section.
Section 14. Covenants. The City covenants and agrees as follows with the holders of
the Series 2008A Bonds as long as any of the Series 2008A Bonds remain outstanding and
unpaid as to either principal or interest:
(a) The City will cause the portion of the Series 2008 Project being financed with
proceeds of the Series 2008A Bonds to be acquired and constructed promptly and
in accordance with the plans and specification therefore.
(b) The City covenants and agrees with the Registered Owners of the Series 2008A
Bonds that as long as any of the Series 2008A Bonds remain outstanding and
unpaid as to either principal or interest, the City shall not invest, reinvest or
accumulate any moneys deemed to be proceeds of the Series 2008A Bonds
pursuant to the Internal Revenue Code in such a manner as to cause the
Series 2008A Bonds to be "arbitrage bonds" within the meaning of the Internal
Revenue Code. The City hereby covenants that, to the extent permitted by law, it
will take all actions within its control and that it shall not fail to take any action as
may be necessary to maintain the exemption of interest on the Series 2008A
Bonds from gross income for federal income tax purposes, including but not
limited to, actions relating to the rebate of arbitrage earnings, if applicable, and
the expenditure and investment of Bond proceeds and moneys deemed to be Bond
proceeds, all as more fully set forth in the Tax Compliance Certificate to be
delivered by the City with the Series 2008A Bonds.
(c) The City will not issue additional bonds of prior standing to the Series 2008A
Bonds.
Section 15. Series 2008A Bond Form. The Series 2008A Bonds shall be in
substantially the following form with such revisions, additions and deletions as the City may
deem advisable or necessary to comply with the final terms of the Series 2008A Bonds
established upon sale thereof:
Page 22
Board Meeting
January 29,2008
BOND NO.
R-
UNITED STATES OF AMERICA
STATE OF MICHIGAN
COUNTIES OF INGHAM AND EATON
CITY OF LANSING
WATER SUPPLY, STEAM, CHILLED WAER M REVENUE BONDT SERIESD ELECTRIC
UTILITY SYSTEM 2008A
Date of
Intere� Date of Maturity
Original Issue CUSIP
% July 1, 20_ 52008
Registered Owner: Cede &Co.
Principal Amount:
($ ) Dollars
The CITY OF LANSING, Counties of Ingham and Eaton, State of Michigan (the "City"),
acting by and through the Board of Water and Light ode ed Olwner specifiedges above,lor�egistered
owe and
for value received hereby promises to pay to the R g
assigns, only from the Net Revenues of the System as hereinafter provided, the Principal Amount
specified above, in lawful money of the United aStates
hereinafter provided, w t Dinterestte of Mthereon
aturity
specified above, unless prepaid prior thereto s
(computed on the basis of a 360-day year of twelve 30-day months) from the Date of Original
Issue specified above or such later date to which interest has been paid, until paid, at the Interest
Rate per annum specified above, first payable on July 1, 2008 and semiannually thereafter.
Principal of this bond is payable at the designated corporate trust office of
or such other transfer agent as the City may hereafter designate by
notice d to the registered owner of record not less than sixty (60) days prior to any interest
payment date (the "Transfer Agent"). Interest on this bond is payable by check or draft mailed
by the Transfer Agent to the person or entity who or Q stered ownehich is as of r trecord at the dregisay t red
f the
month prior to each interest payment date, the b
address. For the prompt payment of principal and oftthest on this bond water supply and electric the uutil ty ses ystems
ved by
the Board of Water and Light from the operations
including the steam, steam heat and chilled water distribution
ex enses of operation,maintenanceaand
provision has been made for reasonable and necessary P
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
tory lien are ton at on parity lwi both,
when due; however, the pledge of Net Revenues and thestatutory
pledge of Net Revenues and statutory lien in favor of the sty of ansi Steam andater Supply
and
Electric Utility System Revenue Bonds, Series 199 Water Supply,
System Revenue Bonds, Series 1999A, Water Supply, Steam and Electric Utility System
Board Meeting Page 23
January 29, 2008
Revenue Bonds, Series 2002A, Water Supply, Steam and Electric Utility System Revenue
Refunding Bonds, Series 2002B, Water Supply, Steam and Electric Utility System Revenue
Refunding Bonds, Series 2003A, and Water Supply, Steam and Electric Utility System Revenue
Refunding Bonds, Series 2005A. The pledge of Net Revenues and the statutory lien are senior in
priority of lien to the City's Water Supply, Steam and Electric Utility Revenue Bonds,
Series 1999B (Taxable Series) and any additional junior lien bonds issued pursuant to the Bond
Resolution (defined below).
This Bond is one of a series of bonds of like tenor, except as to denomination, rate of
interest and date of maturity, aggregating the principal sum of$_,000,000, issued pursuant to a
Bond Resolution adopted by the Board of Water and Light of the City (the "Board") on
October 24, 1989, as amended and supplemented from time to time, including by a Tenth
Supplemental Revenue Bond Resolution adopted by the Board on , 200_ (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 financing costs of improvements to the System, making a deposit to a bond
reserve account, if necessary, 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 of equal standing as
to the Net Revenues may hereafter be issued, and the general covenants and provisions pursuant
to which this bond is issued, reference is made to the Bond Resolution. Reference is hereby
made to the Bond Resolution and any and all supplements thereto and modifications and
amendments thereof, if any, and to Act 94, for a more complete description of the pledges and
covenants securing the bonds of this issue, the nature, extent and manner of enforcement of such
pledges, the rights and remedies of the registered owners of the bonds of this issue with respect
thereto and the terms and conditions upon which the bonds of this issue are issued and may be
issued thereunder. To the extent and in the manner permitted by the terms of the Bond
Resolution, the provisions of the Bond Resolution or any resolution or agreement amendatory
thereof or supplemental thereto, may be modified or amended by the City, except in specified
cases, only with the written consent of the registered owners of at least fifty-one percent (51%)
of the principal amount of the bonds then outstanding.
Bonds of this issue maturing on or prior to July 1, 20_ are not subject to redemption
prior to maturity.
Bonds or portions of bonds in multiples of$5,000 of this issue maturing on or after July
1, 20_ shall be subject to redemption prior to maturity without a premium, at the option of the
City, in such order as the City shall determine and within any maturity by lot, on any date on or
after July 1, 20_, at par plus accrued interest to the date fixed for redemption.
[Mandatory redemption provisions to
be inserted if term bonds are issued]
In case less than the full amount of an outstanding bond is called for redemption, the
Transfer Agent upon presentation of the bond called in part for redemption shall register,
authenticate and deliver to the registered owner a new bond of the same maturity and in the
principal amount of the portion of the original bond not called for redemption.
Board Meeting Page 24
January 29, 2008
Notice of redemption shall be given to each registered owner of bonds or portions thereof
to be redeemed by mailing such notice not less than thirty (30) days prior to the date fixed for
redemption to the registered owner at the address of the registered owner as shown on the
registration books of the City. Bonds shall be called for redemption in multiples of$5,000, and
bonds of denominations of more than $5,000 shall be treated as representing the number of
bonds obtained by dividing the denomination of the bonds by $5,000, and such bonds may be
redeemed in part. The notice of redemption for bonds redeemed in part shall state that, upon
surrender of the bond to be redeemed, a new bond or bonds in the same aggregate principal
amount equal to the unredeemed portion of the bonds surrendered shall be issued to the
registered owner thereof with the same interest rate and maturity. No further interest on bonds or
portions of bonds called for redemption shall accrue after the date fixed for redemption, whether
the bonds have been presented for redemption or not, provided funds are on hand with the
Transfer Agent to redeem the bonds or portion thereof.
This bond is transferable only upon the books of the City kept for that purpose at the
office of the Transfer Agent by the registered owner hereof in person, or by the registered
owner's attorney duly authorized in writing, upon the surrender of this bond together with a
written instrument of transfer satisfactory to the Transfer Agent 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 therefore as provided in the Bond
Resolution, and upon the payment of the charges, if any, therein prescribed. The Transfer Agent
shall not be required (i) to issue, register the transfer of, or exchange any bond during a period
beginning at the opening of business 15 days before the day of the mailing of a notice of
redemption of bonds selected for redemption under the Bond Resolution and ending at the close
of business on the date of that mailing, or (ii) to register the transfer of or exchange any bond so
selected for redemption in whole or in part, except the unredeemed portion of bonds being
redeemed in part.
THIS BOND IS A SELF-LIQUIDATING BOND AND IS NOT A GENERAL
OBLIGATION OF THE CITY AND DOES NOT CONSTITUTE AN INDEBTEDNESS OF
THE CITY WITHIN ANY CONSTITUTIONAL, STATUTORY OR CHARTER
LIMITATION, AND IS PAYABLE BOTH AS TO PRINCIPAL AND INTEREST SOLELY
FROM THE NET REVENUES OF THE SYSTEM AND CERTAIN FUNDS AND
ACCOUNTS ESTABLISHED UNDER THE BOND RESOLUTION. THE PRINCIPAL OF
AND INTEREST ON THIS BOND ARE SECURED BY THE STATUTORY LIEN
HEREINBEFORE DESCRIBED.
The City 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.
Board Meeting Page 25
January 29,2008
It is hereby certified and recited that all acts, conditions and things required by law to be
done 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 Transfer Agent's Certificate
of Authentication on this bond has been executed by the Transfer Agent.
IN WITNESS WHEREOF, the City, acting by and through the Board of Water and Light
of the City, has caused this bond to be signed in the name of the City with the facsimile
signatures of the Chairperson and Corporate Secretary of the Board of Water and Light, and a
facsimile of the City's corporate seal to be printed hereon, all as of the Date of Original Issue.
CITY OF LANSING, BY AND THROUGH THE
BOARD OF WATER AND LIGHT OF THE CITY
OF LANSING
By
Chairperson
Countersigned:
By
Corporate Secretary
Date of Authentication: , 2008
CERTIFICATE OF AUTHENTICATION
This bond is one of the bonds described herein.
Transfer Agent
By
Its: Authorized Signatory
[INSERT STANDARD FORM OF ASSIGNMENT]
Board Meetincy Page 26
January 29,2008
Section 16. Bond Counsel. The City recognizes that Miller, Canfield, Paddock and
Stone, P.L.C., has represented from time to time, and currently represents, various underwriters,
financial institutions, and other potential participants in the bond financing process for unrelated
projects, any of which might offer to purchase the Series 2008A Bonds or provide services
related to issuance and sale of the Series 2008A Bonds. The City appoints Miller, Canfield,
Paddock and Stone, P.L.C., Lansing, Michigan, as bond counsel for the Series 2008A Bonds,
notwithstanding the potential concurrent representation of any such participant in the bond
financing process regarding any unrelated matter.
Section 17. Financial Advisor. Robert W. Baird & Co., Traverse City, Michigan, is
hereby selected to act as Financial Advisor with respect to the Series 2008A Bonds.
Section 18. Competitive Sale. If the Financial Advisor recommends that the most cost
effective way to sell the Series 2008A Bonds is by competitive sale, then the Chief Financial
Officer is hereby authorized to fix a date for sale of the Series 2008A Bonds and publish notice
of sale of the Series 2008A Bonds in The Bond Buyer, of New York, New York, in substantially
the form recommended by the Financial Advisor and bond counsel. The Chief Financial Officer
is hereby authorized to award sale of the Series 2008A Bonds to the bidder whose bid produces
the lowest interest cost computed in compliance with the terms of the Notice of Sale, which bid
shall comply with the requirements for bids specified in the Notice of Sale and shall be within
the limitations contained in Section 21 of this Resolution. Good faith checks received from the
unsuccessful bidders shall be returned to each bidder as provided in the Notice of Sale. If the
Series 2008A Bonds are sold at competitive sale, then approval of the matters delegated to the
Chief Financial Officer under this Resolution may be evidenced by execution of a certificate
awarding sale of the Series 2008A Bonds or the Official Statement.
Section 19. Negotiated Sale. If the Financial Advisor recommends that the most cost
effective way to sell the Series 2008A Bonds is by negotiated sale, then the City hereby
determines to sell the Series 2008A Bonds at a negotiated sale instead of a competitive sale for
the reason that a negotiated sale will permit the City to enter the market on short notice at a point
in time which appears to be most advantageous, and thereby possibly obtain a lower rate of
interest on the Series 2008A Bonds. The Chief Financial Officer is authorized to select
underwriters, in consultation with the Financial Advisor, and to negotiate a Bond Purchase
Agreement with the underwriters. By adoption of this Resolution the City assumes no
obligations or liability to the underwriters for any loss or damage that may result to the
underwriters from the adoption of this Resolution, and all costs and expenses incurred by the
underwriters in preparing for sale of the Series 2008A Bonds shall be paid from the proceeds of
the Series 2008A Bonds, if the Series 2008A Bonds are issued, except as may be otherwise
provided in the Bond Purchase Agreement to be signed by the City at the time of sale of the
Series 2008A Bonds.
Section 20. Bond Ratings and Bond Insurance. The Chief Financial Officer is hereby
authorized to apply for bond ratings from such municipal bond rating agencies as deemed
appropriate, in consultation with the Financial Advisor. If the Financial Advisor or the
underwriters recommend that the City consider purchase of municipal bond insurance, then the
Chief Financial Officer is hereby authorized to negotiate with insurers regarding acquisition of
municipal bond insurance, and, in consultation with the Financial Advisor and the underwriters,
Board Meeting Page 27
January 29, 2008
to select an insurer and determine which bonds, if any, shall be insured, and the Chief Financial
Officer is hereby authorized to execute an agreement with the insurer relating to procedures for
paying debt service on the insured bonds and notifying the insurer of any need to draw on the
insurance and other matters.
Section 21. Parameters of Sale. The Series 2008A Bonds shall bear interest at a rate
or rates not exceeding 6.00% per annum. The purchase price bid for Series 2008A Bonds sold
by competitive sale, exclusive of any original issue discount or premium, shall not be less than
98% or more than 102% of the principal amount of the Series 2008A Bonds, plus accrued
interest, if any. The underwriters' discount for Series 2008A Bonds sold by negotiated sale shall
not be more than 1% of the principal amount of the Series 2008A Bonds. In making such
determinations the Chief Financial Officer is authorized to rely upon data and computer runs
provided by the Municipal Advisory Council of Michigan or the Financial Advisor.
Section 22. Official Statement. The Chief Financial Officer is authorized to approve
circulation of a Preliminary Official Statement describing the Series 2008A Bonds and, after sale
of the Series 2008A Bonds, to prepare, execute and deliver a final Official Statement.
Section 23. Continuing Disclosure. The Chief Financial Officer is hereby directed to
execute and deliver, prior to delivery of the Series 2008A Bonds, a written continuing disclosure
undertaking in order to enable the underwriters of the Series 2008A Bonds to comply with the
requirements of Securities and Exchange Commission Rule 15c2-12. The continuing disclosure
undertaking shall be in substantially the form which she shall, in consultation with Bond
Counsel, determine to be appropriate.
Section 24. Other Actions. In the event that the Chief Financial Officer is not
available at the time that it becomes necessary to take actions directed or authorized under this
resolution, then, then a person designated by the Chief Financial Officer or the General Manager
of the Board or a person designated by him is authorized to take the actions delegated to the
Chief Financial Officer by this Resolution. The officers, administrators, agents and attorneys of
the City are authorized and directed to take all other actions necessary and convenient to
facilitate issuance and sale of the Series 2008A Bonds, and to execute and deliver all other
agreements, documents and certificates and to take all other actions necessary or convenient in
accordance with this Resolution, and to pay costs of issuance including but not limited to bond
insurance premiums, transfer agent fees, financial advisor fees, bond counsel fees, rating agency
fees, costs of printing the Series 2008A Bonds and the preliminary and final official statements,
and any other costs necessary to accomplish sale and delivery of the Series 2008A Bonds.
Section 25. Applicability of the Outstanding Bond Resolutions. Except to the extent
amended, supplemented or otherwise provided in this Resolution, all of the provisions and
covenants provided in Bond Resolution shall apply to the Series 2008A Bonds issued pursuant to
provisions of this Resolution, such provisions of said Resolutions being made applicable to the
Series 2008A Bonds herein authorized.
Section 26. Conflicting Resolutions. All resolutions and parts of resolutions insofar as
they conflict with the provisions of this resolution are hereby rescinded.
Section 27. Severability and Paragraph Headings. If any section, paragraph, clause or
provision of this Resolution shall be held invalid, the invalidity of such section, paragraph,
Board Meeting Page 28
January 29, 2008
clause or provision shall not affect any of the other provisions of this Resolution. The paragraph
headings in this Resolution are furnished for convenience of reference only and shall not be
considered to be part of this Resolution.
Section 28. Publication and Recordation. In accordance with the provisions of
Section 6 of Act 94, this Resolution shall be published once in full in The City Pulse, a
newspaper of general circulation in the City 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 Corporate Secretary of the Board.
Section 29. Effective Date. This Resolution is hereby determined to be immediately
necessary for the preservation of the public peace, property, health and safety of the City. In
accordance with the provisions of Section 6 of Act 94, this Resolution shall become effective
immediately upon its adoption.
I hereby certify that the foregoing is a true and complete copy of a resolution duly
adopted by the Board of Water and Light of the City of Lansing, Counties of Ingham and Eaton,
State of Michigan, at a Regular meeting held on Tuesday January 29, 2008, at 5:30 p.m.,
prevailing Eastern Time, and that said meeting was conducted and public notice of said meeting
was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public
Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been
made available as required by said Act 267.
I further certify that the following Commissioners were present at said meeting
and that the following Commissioners were absent
I further certify that Commissioner moved adoption of said Resolution,
and that said motion was supported by Commissioner
I further certify that the following Commissioners voted for adoption of said Resolution
and that the following Commissioners voted
against adoption of said Resolution
I further certify that said Resolution has been recorded in the Resolution Book and that
such recording has been authenticated by the signature of the Chairperson and Corporate
Secretary.
Chairperson Corporate Secretary
--------------------
Board Meeting Page 29
January 29, 2008
Staff comments: The Finance Committee agreed with the proposed resolution at its December
4, 2007, meeting and sent it on to the full Board for approval. This resolution provides for:
• Issuance of tip to $40,000,000 of Series 2008A Bonds for improvements to the Water
Supply, Steam, Chilled Water and Electric Utility Systems;
• Deposit to Bond Reserve Account and Creation of Construction Fund for deposit of
Bond Proceeds;
• Future Rate Covenant reduced to 125%;
• Future Additional Bonds Test reduced to 125%;
• Chief Financial Officer to sell Bonds without further resolution; and
• Other matters relative to issuance, sale and delivery of Bonds.
Motion by Commissioner Graves, seconded by Commissioner Cochran, to adopt the Tenth
Supplemental Revenue Bond Resolution.
Action: Carried unanimously.
--------------------
esolution 2008-1-2
B. Declare Ottawa Station as Surplus and Offer Said Property to City of Lansing
WHEREAS, the City of Lansing, a Michigan municipal corporation (the "City"), the Lansing
Board of Water and Light, an administrative board and agency of the City ("BWL"), and
Christman Capital Development Company, a Michigan corporation on behalf of a Michigan
limited liability company to be formed ("CCDC") are exploring options to redevelop the real
property commonly known as the Ottawa Power Station as more completely described in the
attached Exhibit A (the "Property"), and such parties upon the completion of negotiations
anticipate entering into a Property Purchase and Development Agreement (the "Agreement"),
which sets forth conditions and terms of redeveloping the Property;
WHEREAS, the Property, except for those certain Steam Facilities and Chilled Water Facilities,
is no longer useful or required for the operation of the BWL;
WHEREAS, in connection with the Agreement, the Steam Facilities and Chilled Water
Facilities will be exchanged and/or replaced by"New Steam Facilities" and"New Chilled Water
Facilities";
WHEREAS, BWL expects that under the terms of the Agreement, any transfer of Property shall
be subject to certain rights of the City and BWL to use the Property from and after any such
transfer, including without limitation, BWL shall be granted a"License" for certain "Removal
Activities", which Removal Activities shall include, among other things, the right of entry onto
the Property for the purpose of removing, relocating, salvaging, demolishing, operating,
maintaining, repairing, and/or disassembling the Steam Facilities and the Chilled Water
Facilities;
Board Meeting Page 30
January 29,2008
WHEREAS, the License shall exist for thirty(30) days from and after the later of the date of
closing or the date on which the New Steam Facilities and New Chilled Water Facilities are fully
operational, and upon such operation, the Steam Facilities and Chilled Water Facilities will no
longer be useful or required for the operation of the BWL or the Property; and
WHEREAS, in connection with the Agreement, it is in the best interest of the BWL ratepayers
that the Property be transferred to the City for public purposes, which include, among other
things, the acquisition of new facilities and obtaining new customers by BWL, and the
redevelopment of the Property.
RESOLVED, that (a) subject to the terms and conditions of the Agreement, including but not
limited to, the License and Removal Activities; and (b) contingent upon the satisfaction of the
conditions precedent to the effectiveness of this Resolution which are set forth in the below
paragraph, the Board finds that the Property is no longer useful or needed for the operation of the
BWL and declares the same surplus and offers to transfer such surplus property and release
jurisdiction of such surplus property to the City.
FURTHER RESOLVED, that the conditions precedent to the effectiveness of this Resolution
shall include: (i) the full execution and delivery of the Agreement, which Agreement shall be in
substantially such form and substance authorized and approved by the BWL; and (ii) the
acquisition of an interest in land by BWL for the New Steam Facilities and New Chilled Water
Facilities.
FURTHER RESOLVED, in furtherance of the best interests of the BWL ratepayers and for the
public purposes recited above, the surplus property shall be transferred at a future time to the
jurisdiction of the City, via such documents, affidavits and/or quit claim deeds, if any, which are
required or appropriate in order to vest title to the Property in the City in the manner
contemplated under the Agreement, when and if the Mayor of the City accepts such transfer and
the City passes a resolution accepting jurisdiction over the Property pursuant to the terms and
conditions of the Agreement.
FURTHER RESOLVED, that J. Peter Lark, as the General Manager of BWL, is hereby
authorized to execute and deliver, for and on behalf of BWL, any such documents, affidavits
and/or quit claim deeds which are appropriate to complete such transfer to the City.
FURTHER RESOLVED, that any proceeds which belong to BWL in connection with the
above transactions shall remain with the funds and accounts of the BWL.
FURTHER RESOLVED, the conveyance of the Property to the City, as set forth above, is
hereby approved.
--------------------
Staff Comments: the Committee of the Whole agreed with the proposed resolution at its January
8, 2008, meeting and sent it to the full Board for approval.
Board Meeting Page 31
January 29, 2008
--------------------
Motion by Commissioner Rodocker seconded by Commissioner Graves, to declare Ottawa
Station property as surplus and offer that property to the City of Lansing.
Discussion: For the record, Commissioner Peter Kramer announced that he would abstain from
the discussion and vote on this item.
Action: Carried unanimously.
esolution 2008-I-3
C. Enter into a Property Purchase and Development Agreement
WHEREAS, the City of Lansing, a Michigan municipal corporation (the "City"), the Lansing
Board of Water and Light, an administrative board and agency of the City ("BWL"), and
Christman Capital Development Company, a Michigan corporation ("CCDC") have negotiated
the terms and conditions of that certain Property Purchase and Development Agreement, a copy
of which is attached hereto as Exhibit C, wherein the parties have agreed, subject to the
conditions and terms of the Agreement, to, among other things, redeveloping the real property
lying east of Grand Avenue at the easterly termini of Ottawa Street and Ionia Street as more
completely described in the attached Exhibit A.
WHEREAS, all capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Agreement.
WHEREAS, it is in the best interest of the BWL ratepayers for BWL to execute and enter into
the Agreement for public purposes, which include, among other things, the acquisition of new
facilities and obtaining new customers by BWL, all as set forth in the Agreement.
RESOLVED, that subject to and contingent upon the execution of the Agreement by the City,
BWL shall, and is authorized and directed to enter into the Agreement.
FURTHER RESOLVED, that J. Peter Lark, as the General Manager of BWL, is hereby
authorized to execute and enter into the Agreement, for and on behalf of BWL, in substantially
such form as is attached hereto as Exhibit C for, among other things, the purposes set forth above
and to acquire the New Steam Facilities and New Chilled Water Facilities in accordance with the
terms of the Agreement.
FURTHER RESOLVED, that any proceeds which belong to BWL under the Agreement, shall
remain with the funds and accounts of the BWL.
FURTHER RESOLVED, that BWL is authorized and directed to execute, deliver and perform
its obligations under the Agreement.
--------------------
Board Meeting Page 32
January 29,2008
Staff Comments: the Committee of the Whole agreed with the proposed resolution at its January
8, 2008, meeting and sent it to the full Board for approval.
--------------------
Motion by Commissioner Graves, seconded by Commissioner DeLuca, to approve the execution
of a Property Purchase and Development Agreement between City of Lansing and Christman
Capital Development Company.
Discussion: Commissioner Cochran advised that he noted some housekeeping things in the
agreement that were passed onto Peter Lark. As such, Dick Peffley spoke to outside counsel,
Eric Eggan who then met with the City Attorney. As a result, an erratum will come forth to
address those minor matters.
Mr. Lark concurred with Commissioner Cochran and advised that before the agreement is
executed the errata will come forward and they will execute the changed agreement only.
Action: Carried unanimously.
esolution 2008-I-
D. Budget Increase for Mobile Resource Management Project
WHEREAS, the original project and budget estimates for the Mobile Resource Management
Data Project (MRM) were developed in 2005 from Request for Information data and did not
address all related expenses including training, BWL labor, maintenance and other expenses; and
WHEREAS, this resulted in an initial budget amount of$855,000; and
WHEREAS, when further research was completed, it was realized from vendor bids received
that such a system was under budget and needed to be modified.
BE IT RESOLVED, that the budget for the Mobile Resource Management Data Project be
increased from$855,000 to $1,840,000 to accommodate costs for capital project costs
($1,840,000). This coupled with the internal labor expenses of$513,000 equate to a total project
cost of$2,353,000.
--------------------
Staff Comments: BWL Delivery Services was actively seeking a solution to scheduled and
unscheduled planning for work crews that would result in greater safety, increased productivity
and greater security for BWL owned vehicles. It was determined that a significant savings could
be realized through the implementation of a Mobile Resource Management System that would
allow personnel in the field to utilize data on mobile computers thus getting information out to
our employees in the field on a real time basis. It would cut the expense of paper processing and
Board Meeting Page 33
January 29,2008
be able to have employees utilize data while on location instead of having to return to the office
or workplace to gather information to perform work duties.
In addition to providing information, the AVL System (Automatic Vehicle Location) would
provide personnel both in the office and in the field with direct access location that would assist
dispatchers and crews in responding to outage and emergency situations as well as integrate their
regularly scheduled work into the process. The system would interface with a number of
applications such as OMS (Outage Management System), CIS (Customer Information System),
and in the future SAP (Systems, Applications and Products in Data Processing).
--------------------
Motion by Commissioner Graves, seconded by Commissioner DeLuca to approve the Budget
Increase for the Mobile Resource Management Project.
Action: Carried unanimously.
esolution 2008-I-
E. Addition to Capital Budget for Eckert Station Unit#1 Condenser Retubing
WHEREAS, the BWL Production Utility requests the addition of the Eckert unit#1 condenser
retubing to the 2007-2008 fiscal year capital budget. The Eckert unit#1 condenser retubing total
project cost is estimated and budgeted for$361,700.
BE IT RESOLVED, that the Eckert unit#1 condenser retubing budget of$361,700 be added to
the 2007-2008 fiscal year capital budget.
--------------------
Staff Comments: BWL Production Utility has actively requested the replacement of the
condenser tubes. The replacement of these tubes has been scheduled twice previously, but was
removed from the budget by past management. The existing tubes are original from the early
1950's installation and have well exceeded their design life expectancy of 30 years. The new
replacement tube material has been purchased and delivered for$107,650 through the BWL
warehouse facility (MSMRC) but has not been expensed out. Installation of the new tubes can
be completed during the present Eckert unit#1 turbine overhaul outage for an estimated cost of
$254,000. Installation of the tubes will improve the reliability and improve efficiency of the
Eckert unit#1 turbine generator.
This is the optimum time to complete this work since the unit is currently down for a turbine
overhaul. The next scheduled opportunity will not occur for another two years. Due to the age
and current condition of the existing condenser tubes, there is great concern by the Production
Utility that the unit will not operate reliably for an additional two years.
--------------------
Board Meeting Page 34
January 29,2008
Motion by Commissioner Cochran, seconded by Commissioner Rodocker, to approve the
Addition to Capital Budget for Eckert Unit#1 Condenser Tubing.
Action: Carried unanimously.
Rate Increase Information
General Manager Peter Lark responded in detail to questions previously presented by the general
public at the public hearing held on January 22, 2008. In addition, it was noted that the rate
increases the BWL seek are an attempt to balance its traditionally low rates with its duty to
remain financially sound. While the BWL seeks rate increases of 7 percent for electricity service,
7 percent for water service and 6 percent for steam service, it has also undertaken a number of
cost-cutting initiatives before seeking rate increases. Those cost-cutting initiatives, detailed last
week during the public hearing, total more than $25 million a year. The rate increase the BWL
seeks for electric service amounts to $2.50 cents a month for a typical residential customer. The
rate increase the BWL seeks for water service amounts to $1.20 a month for a typical residential
customer. The rate increases are in keeping with the BWL's long tradition of keeping its utility
rates significantly lower than neighboring utilities.
esolution 2008-I-
F. Rate Increases for Electric, Water, and Steam Utilities
WHEREAS, the staff of the BWL, in the course of its financial planning process, has determined
that the electric, water, and steam utilities will experience significant revenue shortfalls in fiscal
year 2008 and beyond; and
WHEREAS, such revenue shortfalls are caused primarily by the combination of very modest
revenue growth over the last four years, rising costs due to higher labor, health care, maintenance
and environmental costs as well as overall inflation, and reduced steam consumption due to GM
plant closings; and
WHEREAS, the last general rate increase in the electric utility occurred in September 2006, the
last general rate increase in the water utility occurred in July 2006, and the last general rate
increase in the steam utility occurred in September 2006; and
WHEREAS, the staff of the BWL has proposed a general increase of 7% for the electric utility
effective March 1, 2008, a general increase of 7% for the water utility effective March 1, 2008,
and a general increase of 6% for the steam utility effective March 1, 2008; and
WHEREAS, notice of the proposed increases were communicated to all customers by public
notice on December 7, 2007, and a public hearing was held on January 22, 2008 to receive
comments on the proposed increases; and
WHEREAS, the Board of Commissioners has considered the comments of the public as well as
the recommendations made by the BWL.
Board Meeting Page 35
January 29,2008
RESOLVED, That the electric, water, and steam rate schedules listed below and detailed in the
attached rate schedules be adopted and made effective for electric, water, and steam consumption
on or after March 1, 2008.
ELECTRIC: (Attachment A)
Residential Service-Rate l
General Service-Rate 3
Large General Service-Rate 4
Primary Service-Rate 5
Municipal Water Pumping Service-Rate 7
Large Capacity Service-Rate 8
Outdoor Lighting Service-Rate 9
Traffic Light Service-Rate 11
Space Conditioning and Electric Water Heating Service-Rate 12
Residential Senior Citizen-Rate 21
Street Lighting Service-Rate 31
Street Lighting Service-Rate 32
STEAM: (Attachment B)
General Service-Rate 1
Industrial Service-Rate 2
Residential Service-Rate 5
WATER: (Attachment C)
Residential Water Service—Rate l
General Water Service—Rate 2
Fire Service—Rate 4
Lawn Sprinkling Water Service—Rate 5
Fire Hydrant Charges—Rate 6
Motion by Commissioner Kramer, seconded by Commissioner Rodocker, to approve Rate
Increases for Electric, Water and Steam Utilities.
Action: Carried unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
No resolutions.
Board Meetincy Page 36
January 29,2008
GENERAL MANAGER'S REMARKS
No remarks.
COMMISSIONERS' REMARKS
Commissioner Graves sympathized with ratepayers and acknowledged the current challenging
economic times. He also noted that the Commission challenged itself by looking at cost
containment strategies and taking into account the plight of under and unemployed persons in the
area. It was a difficult decision to make while also keeping in mind the viability of the utility
and its competitive edge. Commissioner Graves went on record noting that the Commissioners
did listen, hear, debated and challenged themselves; and made the best decision for the utility
going forward.
Commissioner Cochran stated that the rate increase was a compromise and they were not
insensitive to those who spoke against it.
Commissioner James echoed the comments made by Commissioners Graves and Cochran. She
also stated that the Commissioners are not paid for their service on the board and that they pay
the same rates as other BWL customers. Commissioner James noted that the BWL is a fine
utility and also advised that costs in general are steadily rising. She complimented Peter Lark
and staff for creating significant efficiencies, moving the company in a new direction and
improving morale.
General Manager Peter Lark thanked the Commissioners for their support.
EXCUSED ABSENCES
No excused absences.
PUBLIC COMMENTS
No public comments.
ADJOURNMENT
On motion by Commissioner James, seconded by Commissioner Graves, the meeting adjourned
at 6:40 p.m.
/s/Rosemary Sullivan Acting Secretary
Filed with Lansing City Clerk
February 8, 2008
EXHIBIT C
PROPERTY PURCHASE AND DEVELOPMENT AGRE EMENT
Tliis Property Purchase and Development Agreement is made as of , 2008 anion;
the City of Lansing, a Michigan municipal corporation the principal business address of which is
124 W. Michigan Ave., Lansing, MI 48933-1694 (the "City"), the Lansing Board of Water and
Light, an administrative board,and agency of the City, the principal business address of which is
1232 Haco Drive, Lansing, MI 48912 (the "BWL"), and Christman Capital Development
Company, a Michigan corporation, the principal business address of which is 408 Kalamazoo
Plaza, Lansing, MI 48933 ("CCDC") on behalf of a Michigan limited liability company to be
formed("Developer").
RECITALS
A. The City, through the BWL, owns the real property lying east of Grand Ave. at the
easterly termini of Ottawa Street and Ionia Street as more completely described in the attached
Exhibit A (the "City Property") which is a key site along the City's riverfroat and on which
stands a formerly occupied generating plant with historic character (the "Powee-Station").
B• Much of the City Property was used for operations of the BWL and for other industrial
uses by prior owners and occupants and will require measures to address environmental
conditions on the City Property to make possible the uses of the City Property envisioned in this
Agreement.
C. The BWL currently has steam utility lines and facilities as described on the attached
Exhibit B (the "Stearn Facilities") and chilled water utility lines and facilities as described on
the attached Exhibit C (the "Chilled Water Facilities") on and in portions of the City Property
that will -need to be removed from the City Property and relocated or replaced prior to occupancy
of the City Property by another use.
D. A City parking ramp that lies partially on the City Properly and over Grand Ave., to other
City owned property on the west side of Grand Ave. as described on the attached Exhibit D (the
"Current Ramp") is also an impediment to redevelopment and reuse of the City Property
requiring demolition and replacement (the "New Ramp") before'the City Property can be used
as envisioned in this Agreement.
E. Developer has site control over adjacent property along Grand Ave, as also described on
the attached Exhibit A(the"Developer Property").
F. Developer has proposed acquiring all of the City Property from the City and redeveloping
the City Property together with the Developer Property (the Developer Property and City
Property are referred to together as the "Site") for the national corporate headquarters of the
Accident Fund Insurance Company of America ("AFICA") and for retail and other commercial
and office uses as more completely described and.depicted on the attached Exhibit E (the
"Project") if the Stearns Facilities, the Chilled Water Facilities and the Current Ramp can be
removed from the City Property and if other economic development incentives are provided to
make the Project economically viable.
- 1 -
G. The City wishes to preserve public access to.the riverfront property that is adjacent to the
Site.
H. The City, in cooperation with other governmental agencies, has assembled economic
development incentives in the fornl of the Public Support as more fully described and defined in
.Article V sufficient to make the Project economically viable.
I. Because coordinating the activities of demolishing, relocating and/or replacing the Steam
Facilities, the Chilled Water Facilities and the Current Rannp with Developer's redevelopment of
the Site will follow a critical timetable and involve significant coordination of efforts, Developer
desires coordinating control over that demolition, relocation and replacement and the City and
BWL are amenable to allowing Developer such control provided certain bidding and other
processes are maintained.
7. The parties have agreed that, tinder the terns and conditions of this Agreement, the
Project can be redeveloped to meet their respective goals as generally described above.
TERMS AND CONDITIONS
In exchange for the consideration in and referred to by this Agreement, the parties agree:
Article L• Purchase and Sale of the City Property
1.1 Purchase and Sale. The City agrees to sell and convey or cause to be conveyed the City
Property to Developer and Developer agrees to purchase the City Property from the City under
the terms and conditions stated in this Article I.
1.2 Purchase Price. Developer shall pay to the City as the purchase price for the City
Property, the sum of$275,000(the "Purchase Price"), which shall be remitted to the BWL.
(A) Developer shall pay the Purchase Price, less the Earnest Money (as defined in
subsection (B) below) in frill at the closing. The Purchase Price shall be allocated at the
closing among the land and existing improvements as agreed upon by the City and
Developer.
(B) Developer has made an earnest money deposit of $50,000 (the "Earnest
Money") with the Title Company (as defined below). Generally, if this Agreement is
terminated through no fault of Developer or Developer is permitted to terminate this
Agreement according to its terms, the Earnest Money shall be returned to Developer.
However,if Developer fails to close this transaction without permissible cause according
to the terms of this Agreement, the City and BWL shall retain the Earnest Money as
liquidated damages.
1.3 Condition of Real Estate.
(A) The following definitions shall apply in thus Agreement.
(1) "EnviroMnental Laws" means all federal, state and local environmental
laws, including, but not li nited to, Federal Water Pollution Control Act (33
U.S.C. §1251 et seq.), the Resource Conservation & Recovery Act (42 U.S.C.
§6901 et seq.), Safe Drinking Water Act (42 U.S.C. 5300f-j-26), Toxic
Substances Control Act (15 U.S.C. §2601 et seq.), Clean Air Act (42 U.S.C.
§7401 et seq.), the Comprehensive Enviromnental Response, Compensation and
Liability Act (42 U.S.C. §9601 et seq.) ("CERCLA"), the Emergency Plaiuling
and Community Right to Know Act, 42 U.S.C. §11001 et seq., the Michigan
Natural Resources and Environmental Protection Act (MCL §324.101 et seq.) the
administrative rules and regulations promulgated under such statutes, or any other
similar federal, state or local law or administrative rule or regulation of similar
effect, each as amended and as in effect and as adopted as of the date of execution
of this Agreement.
(2) "Hazardous Substances" means (i) any hazardous or regulated substance
as defined by Environmental Laws (ii) any other pollutant, contaminant,
hazardous substance, solid waste,hazardous material, radioactive substance, toxic
substance, noxious substance, hazardous waste, particulate inatter, airborne or
otherwise, chemical waste, medical waste, crude oil or any fraction thereof,
radioactive waste, petroleum or petroleum-derived substance or waste, asbestos,
PCBs, radon gas, all forms of natural gas, or any hazardous or toxic constituent of
any of the foregoing, whether such substance is in liquid, solid or gaseous rorin,
or (iii) any such substance the release, discharge or spill of which requires activity
to achieve compliance with applicable law.
(3) "Part 201" means Part 201 of Michigan's Natural Resources and
Enviromne.ntal Protection Act, 1994 P.A. 451, as amended, MCL §324.20101 et
seq., and the rules promulgated thereunder.
(B) Environmental condition.
(1) Developer acknowledges that the City Property constitutes a "facility"
under Part 201 because its soils or groundwater contain Hazardous Substances
exceeding applicable criteria under Part 201.
(2) Developer has obtained an "Enviromnental Due Diligence Study Report"
dated April 4, 2007,prepared by NTH Consultants,Ltd. (Project No. 16-070161-
00) on the City Property identifying a number of environrental conditions on or
around the City Property, including by way of example and without limitation, the
presence of lead based paint and asbestos within the Power Station building,
Dense Non-Aqueous Phase Liquid in groundwater perhaps presenting a
volatilization concern,materials related to coal storage,metals, and PCBs.
(3) Not later than May 31, 2008, Developer shall complete all additional
sampling, analysis, inspection and other environmental reviews Developer wishes
to make of the City Property. Developer naay, not later than Tune 15, 200S,
inform the City and the BWL in writing that Developer has detennined, in
Developer's sole discretion, that it is not financially feasible for Developer to
develop and use the City Property as provided in this Agreement. If Developer
does so, the Earnest Money shall be returned to Developer and this Agreement
shall tenninate upon Developer's receipt of the Earnest Money.
(4) Developer shall have the right to have one or more BEAs and Due Care
Plans for the City Property prepared in accordance with Part 201 and to submit
them to the Michigan Department of Environmental Quality ("MDEQ") with a
petition for determination of adequacy pursuant to Part 201. Until the MDEQ has
approved "closure" (i.e., the MDEQ no longer requires any remedial activities,
monitoring, reporting or other ongoing or periodic activities related to the
envirorillental condition of the City Property, though restrictive covenants and
other limitations may remain in place) pursuant to the RAP, each party shall
provide the other parties with copies of any documents submitted to, filed with, or
received from the MDEQ that are related to the City Property, The BWL shall
notify the other parties in writing when closure occurs. To the extent necessary
under applicable law the City and the BWL, shall, at Developer's request and
without expense to the City or the BWL, cooperate with Developer to submit ally
BEAs and Due Care Plans to the MDEQ.
(5) No later than March 31, 2008, the BWL shall, after consultation with and
considering the comments of Developer and the City, complete and file with the
1bIDEQ a remedial action plan for the City Property (the "RAP") and shall
diligently respond to feedback from the MDEQ and otherwise diligently pursue
approval of the RAP. The RAP shall be designed to address environmental issues
(except such activities as Developer is undertaking pursuant to subsection
1.3(B)(7) of this Agreement) in such a mariner as to allow the uses of the City
Property as contemplated in this Agreement. The parties recognize the MDEQ
has the ultimate authority over the design of any remedial actions for the City
Property, so if any condition is imposed as part of the MDEQ's approval of the
RAP that, in Developer's determination, makes the City Property unsuitable for
the uses contemplated in this Agreemment, Developer may terminate this
Agreement and the Earnest Money shall be returned to Developer. This
Agreement shall then terminate when Developer receives the Earnest Money.
Until the MDEQ has approved "closure" pursuant to the RAP, the BWL shall
provide Developer with copies of any documents that are to be submitted to, to be
filed with, or are received from the MDEQ that are related to the City Property.
The BWL shall allow Developer a reasonable time to colllllaeiit upon such
proposed submissions and filings prior to making them.
(6) The MDEQ's approval of the RAP shall be a condition of closing on the
conveyance of the City Property to Developer. If such approval does not occur
and the closing is not delayed as provided in this Agreement or the closing has
been delayed and no other delay can occur consistent with the terms of this
Agreement and any modification of deadlines as provided in this Agreement, then
this Agreement shall terminate and the Earnest Money shall be returned to
-Z -
Developer. The termination shall be effective when Developer receives the
Earliest Money.
(7) Based on the information available to the parties as of the date of this
Agreement, the parties anticipate that certain remedial activities will be necessary
ID
at the City Property for purposes of using the City Property as contemplated in
this Agreement. The Developer has agreed: (a) to perform the remedial activities
as set forth in Exhibit F, in compliance with Environmental Laws; and (b) to
otherwise exercise due care responsibilities at the City Property in accordance
with Envirorunental Laws and this Agreement ("Developer's Environmental
Activities"). All other remedial activities necessary at the City Property for
closure under the RAP, shall be the responsibility of the BWL runless the parties
otherwise agree in writing.
(8) No further information, reports or approval as to the enviroruriental
condition of the City Property, or the presence or absence of any Hazardous
Substances on the City Property shall be a precondition to closing.
(C) Developer has commenced its inspection of the City Property including the
structural conditions of all buildings and improvements on the City Property and the
character or suitability of the soils on the City Property. Not later than May 31, 2005,
Developer shall complete all additional inspection Developer wishes to make of the City
Property including the structural conditions of all buildings and improvements on the
City Property and the character or suitability of the soils on the City Property. Developer
may, not later than June 15, 2008, inform the City and the BWL in writing that Developer
has determined, in Developer's sole discretion, that it is not financially feasible for
Developer to develop and use the City Property as provided in this Agreement. If
Developer does so, the Earnest Money shall be returned to Developer and this Agreement
shall terminate upon Developer's receipt of the Earnest Money.
(D) Developer is aware that portions of the Site lie within a floodplain. Not later-than
May 31, 2008, Developer shall complete all additional review of the impact the
floodplain will have on the City Property and Developer's ability to develop and use it as
provided in this Agreement. Developer may, not later than June 15, 2008, inform the
City and the BWL in writing that Developer has determined, in Developer's sole
discretion, that it is not financially feasible for Developer to develop and use the City
Property as provided in this Agreement. If Developer does so, the Earnest Money shall
be returned to Developer and this Agreement shall terminate upon Developer's receipt of
the Earnest Money.
(E) Except as otherwise expressly provided in this Agreement, the sale and
conveyance of the City Property shall be "AS IS," "WHERE IS," and "WITH ALL
FAULTS"basis without any covenants,representations or warranties of any kind.
(1) The "AS IS," "WHERE IS," and "WITH ALL FAULTS" basis without
any covenants, representations or warranties of any kind includes, without
limitation, all of the following:
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(a) The City Property's condition or any condition of any building,
structure or other irrrprovement on, under, in or above the City Property.
(b) The suitability of the City Property for any purpose or use.
But it does not apply to the environmental condition of the Property which is
addressed in subsection(2) immediately below.
(2) Regardless of any other provision of this Agreement, with respect to the
envirorvnental condition of the City Property at the. time of closing, the parties
specifically agree:
(a) Developer shall be responsible to perform only Developer's
Environmental Activities. The BWL shall have the obligation to perform
all activities required under the RAP and applicable Enviroruzzental Laws
except to the extent they might duplicate Developer's Environmental
Activities.
(b) Developer shall, without cost to the City or the BWL, undertake
and complete all Developer's Envirorv»ental Activities even if the cost of
doing so exceeds Developer's expectations.
(c) Developer shall hold the City, the BWL, and their respective
officers and employees harmless from, defend them against and pay on
their behalf any claims, demands, causes of action, fines, penalties,
judgments, awards or other costs or losses incurred by the City or the
BWL arising from the perfomnance or failure to perform Developer's
Environmental Activities. To the extent penn.itted by law, the BWL shall
hold the City, Developer, and their respective officers and employees
harmless from, defend them against and pay on their behalf any claims,
demands, causes of action, fines, penalties, judgments, awards or other
costs or losses incurred by Developer arising From the performance nr
failure to perform the BWL's obligations under the RAP and all applicable
Environmental Laws. The City's, the BWL's and Developer's rights,
duties and obligations under this subsection (c) shall survive the closing
on the conveyance of the City Property to Developer.
(d) All parties shall remain liable for any of their acts or omissions
constituting exacerbation of- any environmental condition under
Environmental Laws.
(d) Except as otherwise expressly provided in this Agreement, the
parties otherwise retain all rights, duties and obligations they may have
under Environmental Laws.
(F) Regardless of any other provision of this Agreement, the BWL shall retain an
easement in the City Property, for the benefit of the BWL, the City, and any
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governmental agency of competent jurisdiction, for purposes of fulfilling any obligations
it has under the RAP. This shall be a Penmitted Exception as defined in subsection 1.4(E)
below. It shall be fully defined and agreed upon among the parties prior to closing on the
conveyance of the City Property to Developer and may not thereafter be modified except
after consultation among the parties and the MDEQ or other goverurrental agency of
competent jurisdiction. If, due to its effect upon the intended uses of the City Property,
Developer objects to the terms of this easement, Developer may elect to terminate this
Agreement, in which case the Earnest Money shall be returned to Developer and this
Agreement shall tenninate upon Developer's receipt of the Earnest Money. In the event
the MDEQ may require a revision to the easement in order for the BWL to fulfill any
obligations it has under the RAP, any such revision shall require the consent of
Developer, which consent shall not be unreasonably withlield, conditioned or delayed. If
such an easement modification is required by the MDEQ and Developer does not accept
that change, Developer may terminate this Agreement and the Earnest Money shall be
returned to Developer, and this Agreement shall tenninate when the Developer receives
the Earliest Money.
1.4 Title Commitment.
(A) Tile Developer has obtained a commitment for an ALTA owner's policy of title
insurance without standard exceptions with respect to the City Property in the amount of
the Purchase Price, from First American Title Insurance Company (the "Title
Company"), cornrnitment number NCS-325144-MICR, dated October 16, 2007 (the
"Title Commitment").
(B) Developer shall have 30 calendar days after the final execution of this Agreement
to notify the City in writing of any objections it has to any defects or exceptions disclosed
in the Title Commitment. If Developer fails to so notify the City prior to the end of that
30 day period for review,Developer shall be deemed to have waived all objections to ally
defects or exceptions disclosed in the Title Commitment.
(C) The City, at its sole option, shall have 30 calendar days after the notification frolr7
Developer to correct any defects or remove any exceptions to Developer's reasonable
satisfaction.
(D) If the City cannot or otherwise does not do so within that 30 day period,
Developer may, by written notice to the City within 10 calendar days thereafter,
terminate this Agreement and the Earnest Money shall be returned to Developer as
Developer's sole remedy. This Agreement shall terminate upon Developer's receipt of
the Earnest Money.
(E) All defects or exceptions disclosed in the Title Commitment that (i) Developer
does not raise or fails to object to pursuant to subsection(B), (ii)that are not corrected or
caused to be corrected as provided in subsection (C) biit Developer has not tenninated
this Agreement as provided in subsection(D), (iii) that are expressly provided for in this
Agreement, or (iv) that Developer expressly accepts, shall be deemed to be accepted by
Developer (the "Permitted Exceptions"). The parties agree that the City and BWL illay
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retain, in the deed to Developer or by a separate instrument to be executed at the closing,
easements in the City Property for a Chilled Water Facilities line, a manhole and related
appurtenances, serving chilled water to one or more downtown offices and a sanitary and
storm sewer line, a box culvert at the north end of the City Property, a marihole, and
related appurtenances in their existing locations or in such other locations as the parties
may agree in writing prior to closing and such easements are Pen-n.itted Exceptions.
(F) At closing, the City shall pay the cost of a title insurance policy issued pursuant to
the Title Commitment as it may be modified after the actions provided in subsection (C)
above. A "marked tip" title cornmitinent shall be provided at closing that will provide
"gap coverage" for the period between the completion of the closing and the issuance of
the title insurance policy to be issued pursuant to the Title Commitment as marked up at
Closing,
1.5 Suive .
(A) Developer has obtained a survey of the Site(the "Survey") that is also certified to
the City and the BWL without cost to the City or the BWL.
(B) Developer shall have until 30 calendar days after the final execution of this
Agreement to notify the City iii writing of any encroachments or other matters of concern
to Developer disclosed by the Survey. If Developer fails to so notify the City prior to the
end that 30 day period, Developers shall be deemed to have,waived all objections to any
conditions disclosed by the Survey.
(C) The City shall have 30 calendar days after notification from Developer to correct
any such conditions disclosed by the survey to Developer's reasonable satisfaction.
(D) If the City cannot or otherwise does not do so, Developer may, within 10 calendar
days thereafter, terminate this Agreement and the Earnest Money shall be returned to
Developer as Developer's sole remedy. This Agreement shall terminate upon
Developer's receipt of the Barnest.Money,
(E) All conditions disclosed in the survey that (i) Developer does not raise or fails to
object to pursuant to subsection (B), (ii) that are not corrected or caused to be corrected
as provided in subsection (C) but Developer has not terminated this Agreement as
provided in subsection (D), (iii)that are expressly provided for in this Agreement, or (iv)
that Developer expressly accepts, shall be deemed to be accepted by Developer (the
"Permitted Survey Conditions").
1.6 Access.
(A) Developer may, with notice and coordination with the BWL and the City, have
continuing access to the City Property in order to conduct, at Developer's sole expense,
surveys, inspections, soil borings, groundwater sampling, and other investigations of the
City Property the Developer may wish to perform. However, Developer shall promptly
provide the City a copy of any analyses and reports generated as a result of such
- S -
investigations. Developer shall not perform any intrusive or evasive tests or inspections,
including environmental tests or inspections, without the written consent of the City and
BWL,which consent shall not be unreasonably withheld, conditioned or delayed.
(B) Developer shall restore the City Property to the condition it was in prior to any
inspections or investigations undertaken by or on behalf of Developer pursuant to this
section.
(C) Developer shall hold the City and' the BWL (including, for purposes of this
provision, their respective officers and employees) harmless from, indemnify the City
and the BWL for, and defend the City and the BWL (with attorneys reasonably
acceptable to the City) against, any liability arising during such investigations Or
inspections perfornied by, for or on behalf of Developer. Developer's obligations under
this subsection (C) shall survive the termination of this Agreement. At the request of
either the City or the BWL, Developer shall provide the City and BWL with proof that
Developer or the contractor or agent entering upon the City Property pursuant to this
Section 1.6 has a commercial liability insurance in a minimum coverage amount of
$500,000 naming the City and the BWL (as well as their respective officers and
employees) as named or additional insureds.
1.7 Conditions Precedent to Closing.
(A) Zoning approvals. .
(1) In order to construct and occupy the Project on the Site Developer will
need to obtain various zoning and other land use related approvals fron the City.
(a) The City represents and warrants that the Site is currently zoned G-
1 Business District which currently allows the following uses so it will not
need to be.re-zoned and no special use approval is needed for those uses,
and, because it will be part of the overall Project, no special use approval
is required for the New Ramp.
(i) A comparison retail store;
(h) A private club, fraternal organization or lodge hall;
(ii) A restaurant,bar or tavern;
(iv) A enclosed theater, assembly hall or conceit hall;
(v) A hotel or motel;
(vi) A public park and playground, except indoor and outdoor
swimming pools and golf courses;
(vii) Any principal use permitted in a D-1 Professional Office
District;
(viii) A convenience store
(ix) A post office
(x) A motor vehicle service station;
(xii) An office of a civic, professional, religious or charitable
organization:
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(xiii) An office of an accountant, architect, artist, attorney, doctor
or dentist;
(xiv) An insurance agency;
(xv) A real estate office;
(xvi) A trade association or union office, except those with
auditoriums;.
(xvii) Any otlier use which,by the decision of the Plamzing
Board,is similar to the principally permitted uses set forth in this
section; and
(xviii) An accessory structure which is customarily incidental to
any of the uses listed above.
(b) Because of its use, its current zoning, anticipated changes to the
Site and other factors, approval of an overall site plan for the Project and
the Site(the"Site Plan") is required.
(2) Not later than April 30, 2008, Developer shall file an application for
approval of the Site Plan meeting the requirements of the City's zoning ordinance.
Developer shall use its reasonable best efforts to pursue approval of the Site Plan
including addressing on a timely basis (i.e., on or before agenda, notice and other
deadlines set forth in the zoning ordinance, City policies or Platuiing Board
bylaws, policies and procedures) all reasonable requests for additional
information.
(a) If Developer has complied with the requirements of this paragraph
(2) and has not obtained the needed Site Plan by August 15, 2008,
Developer may, upon written notice to the City and the BWL, tenninate
this Agreement and the Eaaiest Money shall be returned to Developer.
This Agreement shall tenninate when Developer receives the Earnest
Money.
(b) If Developer fails to comply with the requirements of this
paragraph (2), either the City or the BWL may, upon written notice to
Developer, terminate this Agreement and the Earnest Money shall be paid
to the City and the BWL as liquidated damages. This Agreement shall
terminate when the City and the BWL receive the Earnest Money.
(c) If Developer has complied with the requirements of this paragraph
(2) and has not obtained the needed Site Plan by August 15, 2008, and
Developer has not exercised its right to tenninate this Agreement as
provided in subsection (a) above, either the City or the BWL may, upon
notice to the other parties, terminate this Agreement and the Earnest
Money shall be returned to Developer. Tlus Agreement shall. terminate
when Developer receives the Earnest Money,
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(B) Floodplain approvals.
(1) Because a portion of the Site lies within a floodplain, construction and
occupancy of the Project might require special approvals frona federal, state, or
local authorities and special lender approval.
(2) Developer shall apply for any needed approvals prior to May 1, 2008.
(3) If Developer has complied with the requirements of paragraph (B)(2) and
has not obtained all required formal written approvals to construct and occupy the
portion of the Project that lies withal the floodplain by August 15, 2008, any party
to this Agreement may, upon written notice to the other parties, terminate this
Agreement and the Earnest Money shall be .returned to Developer and this
Agreement shall tennimate upon Developer's receipt of the Earnest Money. If
Developer fails to comply with the requirements of paragraph (B)(2), the City or
the BWL may, upon written notice to Developer, terminate this Agreement and
the Eaniest Money shall be paid to the City and the BWL as liquidated damages
and this Agreement shall terminate when the City have the BWL receive the
Earnest Money.
(C) Other governunental approvals.
(1) Not later than May 1, 2008, Developer shall notify the City and the BWL
in writing whether or not any other governnrmental approvals are legally required
under then applicable laws, rules or regulations in order to construct and occupy
the Project on the Site which notification shall also provide a list of the needed
approvals, a list of the steps to be taken to obtain such approvals, and the
timetable for obtaining such approvals.
(2) To the extent any party wishes to matte any of those approvals a condition
required to be met before closing on Developer's acquisition of the City Property,
that party shall notify the other parties in writing not later than May 15, 2008.
(3) If any party gives notification pursuant to paragraph (C)(2), such approval
shall be obtained prior to August 15, 2008. Developer shall then make timely
application to obtain any such required approvals prior to closing on Developer's
acquisition of the City Property. However, no such approval shall be a condition
of closing if it legally camlot be obtained until after closing on the conveyance of
the City Property to Developer.
(4) If Developer does not provide the City and the BWL with the notification
required by paragraph (C)(1) and there is- such an additional govennmental
approval that is legally required, which is known by Developer and not disclosed
as required under paragraph (C)(1), either the City or the BWL, at their sole
option, may upon written notice to Developer, terminate this Agreement in which
case the Earnest Money shall be paid to the City and the BWL as liquidated
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damages and this Agreement shall tenninate when the City have the BWL receive
the Earnest Money.
(5) If Developer complies with paragraph (C)(1), but fails to iliake timely
application for the required approvals, then either the City or the BWL may, at
their sole option, upoii written notice to the other parties, tenninate this
Agreement in which case the Earnest Money shall be paid to the City and the
BWL and this Agreement shall tenninate when the Earnest Money has been paid
to the City and the BWL.
(6) If Developer has complied with this subsection (C) and made timely
application but has been unable to obtain the required approvals within the
deadline established in this Agreement for closing, the parties shall have the
following options:
(a) Tine parties may waive that condition to closing and proceed to
closing.
(b) The parties may extend the date for closing until such approvals
can be obtained.
(c) Any party may, within 10 business days after Developer gives
written notice of its inability to obtain the needed approvals, terminate this
Agreement and the Earnest Money shall be returned to Developer. If any
party fails to give such notice in that 10-day period, it waives its right to
give such notice. This Agreement shall terminate upon the return of the
Earnest Money.to Developer.
(D) Major tenant.
(1) A primary motivation for the City and the BWL to enter into this
Agreement is to induce AFICA to occupy the Site as its national headquarters.
The City Council and the BWL shall be informed as to whether or not that
commitment exists and the nature of the commitment. Not less than 10 days prior
to closing on the conveyance of the City Property to Developer, Developer shall
demonstrate to the satisfaction of the City's and the BWL's attorneys that AFICA
is contractually committed to long-term occupancy of the Site as its corporate
headquarters. Developer shall also represent and warrant that AFICA is
contractually bound to lease the Site for at least 20 years after the date of the
closing subject to any right AFICA may have to purchase the Site and this
representation and warranty shall survive the closing.
(2) Any documents shared with the City's and the BWL's attorneys shall be
solely for the purpose of providuig them with infornnation in order for them to
advise their respective clients as to whether or not this condition has been met.
Accordingly, except as may otherwise be required by law, such documents shall
- 12 -
be kept confidential and the financial tems of that commitment shall not be
publicly disclosed.
(3) If Developer falls to enter into a sufficient long-tern lease or other
agreement with AFICA and, as a result, closing does not occur, this Agreement
shall tenninate and the Earnest Money shall be returned to Developer. This
Agreement shall tenninate upon Developer's receipt of the Earliest Money.
(E) Developer Financing.
(1) The parties want to assure, prior to closing, that Developer will have the
financial resources needed to complete the Project. The City Council and the
BWL shall be informed as to the nature and extent of Developer financial
resources for the Project. To that end, not less than 10 days prior to closing,
Developer shall demonstrate to the reasonable satisfaction of the City's and the
BWL's attorneys that Developer has the financing needed to construct the Proj ect
in accordance with this Agreement and the Site Plan.
(2) Any documents shared with the City's and the BWL's attorneys shall be
solely for the purpose of providing them with information in order for them to
advise their respective clients as to whether or not this condition has been met.
Accordingly, except as may otherwise be required by law, such documents shall
be kept confidential and the financial teens of that commitment shall not be
publicly disclosed.
(3) If Developer fails to obtain sufficient financing and, as a result, closing
does not occur, this Agreement shall tenninate and the Earliest Money shall be
paid to the City and to the BWL as liquidated damages. This agreement shall
terminate when the City and the BWL have received the Earnest Money.
(F) Public Support.
(1) The Project can be completed aiid occupied as provided in this Agreement
only if the public sector economic development incentives and financing are
provided as detailed in Article V of this Agreement (the "Public Support"). So,
the parties want to reasonably assure, prior to closing, that the Public Support will
be available when needed.
(2) The approvals and/or. steps for the Public Support shall be completed
within the times provided in Article V. Approval of the Public Support shall
require compliance with certain processes, including without limitation, certain
public hearings and others opportunities for public participation. Approval of the
Public Support requires various public officials and bodies to make discretionary
decisions, often using statutory or other criteria and considering a variety of
information including information offered by the public. Nothing in thus
Agreement is intended to impair or limit any discretion of any public official or
body.
- 13 -
(3) If the approvals have not be obtained and steps completed as required by
paragraph(F)(2), the parties shall have the following options:
(a) The parties niay waive that condition to closing and proceed to
closing.
(b) The parties may extend the date for closing until such approvals
can be obtained and/or steps completed.
(c) Any party may terminate this Agreement and the Earnest Money
shall be returned to Developer and this Agreement shall tenninate upon
the Developer's receipt of the Earnest Money.
(G) Public facility relocation.
(1) As stated in the recitals, the removals, relocations and/or replacements-of
the Steam Facilities and the Chilled Water Facilities are essential to the Project.
The parties wish to assure prior to closing that work can be accomplished in a
time and a maruier that is economically viable for all parties and consistent with
this Agreement.
(2) The approvals and/or steps for the removals, relocations and/or
replacements of the Steam Facilities and the Chilled Water Facilities shall be
completed within the limes provided in Articles III and IV. Those approvals and
steps shall require compliance with certain processes, including without
limitation, certain public hearings and others opportunities for public participation
and will require various public officials and bodies to make discretionary
decisions, often using statutory or other criteria and considering a variety of
information including Infornlatlon offered by the public. Nothing in this
Agreement is intended to impair or limit any discretion of any public official or
body.
(3) If the approvals have not been obtained and steps completed as required
by paragraph (G)(2) above at least 10 days prior to the deadline for closing
established in this Agreement, the parties shall have the following options:
(a) The parties may waive that condition to closing and proceed to
closing.
(b) The parties may extend the date for closing until such approvals
can be obtained and/or steps completed.
(c) Any party may terminate this Agreement by written notice, to the
other parties and the Earliest Money shall be returned to Developer. This
Agreement shall terminate upon Developer's receipt of the Earnest
Money.
- 14-
1.8 Deed. Title to the City Property shall be transferred to Developer by a warranty deed
subject to the Permitted Exceptions, to the Permitted Survey Conditions, and to the terms of this
Agreement.
(A) The following shall, in addition to others provided for in this Agreement, be
Permitted Exceptions.
(1) The City shall retain the right to construct an extension of its riverwallc on
the real property owned by the City along the river front ("Riverwallc Property"),
cantilevered over the River in accordance with plans and specifications to be
reviewed by and reasonably acceptable to Developer. However, the City's use of
the Riverwalk Property shall be subject to reasonable restrictions placed on its use
by written agreement between the City and Developer, which written agreement
shall be agreed upon between the City and Developer prior to the closing on the
conveyance of the City Property to Developer. The nature and extent of the
restrictions shall be for the purpose of limiting the City's or any subsequent owner
of the Riverwallc Property from engaging in any activity on tine Riverwallc
Property which may adversely affect or interfere with the intended and future use
and enjoyment of the Project by its owner and/or occupants. The written
agreement between the City and Developer shall be in recordable foml and
recorded with the Ingham County Register of Deeds after the closing occurs for
the conveyance of the City Property to Developer.
(2) The City Property will be conveyed with the covenant that it cannot be
occupied or used for "adult business" as that term is now defined in section
1296.01 of the City's zoning ordinance and Developer shall be required to impose
such a covenant on the Developer Property immediately after Developer closes on
the acquisition of the Developer Property which covenant shall be for the benefit
of and enforceable by the City.
(3) The City reserves the right to impose restrictive covenants, in the form of
institutional controls, engineering controls, deed restrictions, or Notices of
Approved Corrective Action as provided for under Enviroiunental Laws on the
City Property that are reasonably related to the enviromnental condition of the
City Property consistent with the RAP including, but not limited to, prohibiting
the use of groundwater, requiring the containment, analysis and proper disposal of
soils on the City Property, requiring notifications to transferees, lessees and other
future occupants, requiring warning to excavators and underground utility
workers, limiting allowable uses of the City Property, and providing for
continuing access for the BWL and the MDEQ for monitoring and remedial
activities (the "Restrictive Covenants"). The City or the BWL shall, upon the
MDEQ's approval of the RAP, but in any case, not later than 60 days prior to
closing, provide Developer all such Restrictive Covenants on the City Property
for Developer's review and approval as to form. The parties recognize that,while
the City and the BWL shall make all reasonable efforts so the Restrictive
Covenants will allow all the Developer's intended uses of the City Property, the
- 15 -
MDEQ has the ultimate authority to determine the terms of such Restrictive
Covenants prior to closing on the conveyance of the City Property to Developer.
Developer shall be notified of and be invited to participate in all communications
with the MDEQ regarding the Restrictive Covenants.
(13) Any party may require that the deed or other documentation recorded at closing
reflects any requirements of this Agreement that expressly or impliedly survive the
closing of the conveyance of the City Property to Developer as provided in this Article I.
1.9 Taxes, Assessments, Utilities. Developer shall pay any special assessments, property
taxes and any invoices for utilities levied against or for services provided to the City Property
after the date of the closing. 'The City Property is currently exempt from property taxation and
there are no outstanding special assessments levied against the City Property. The absence of
special assessments shall be included in the Title Commitment and in the title insurance policy to
be issued by the Title Company pursuant to the Title Commitment.
1.10 Closin . The closing on the conveyance of the City Property to Developer shall occur at
the City Hall or such other place as agreed upon by the parties,no later than September 30, 2005,
The City shall pay the cost for recording the deed and the title insurance costs as provided in
section 1.4 above. The transaction will be exempt from transfer taxes pursuant to MCL
207.505(h) and MCL 207.526(h)(i). Developer shall pay all other closing costs and recording
fees. The parties shall each pay their own attorney or other consultant fees.
1.11 Possession,Removal Activities.
(A) The transfer of title to the City Property to Developer by the City shall be subject
to the terns and conditions of this Section 1.11. The City shall deliver possession of the
City Property to Developer at closing, subject to (i) Removal Activities ( as defined
below), (ii) the right of the City to continue the use of the Current Ramp until its
demolition begins as provided in Article IV of this Agreement, (iii) subject to any
continuing obligations of the City and/or the BWL under the RAP, and (iv) subject to
rights provided the City, the BWL or others in the Permitted Exceptions. The provisions
of this Section 1.11 shall survive the closing.
(B) Developer grants to the BWL an irrevocable license and right of entry (the
"License") onto the City Property for the purpose of removing, relocating, demolishing,
operating; maintaining, repairing, and/or disassembling the Steam Facilities and the
Chilled Water Facilities for salvage, reuse, scrap or otherwise, all to the extent BWL, in
its sole discretion, deers appropriate and as fiuther described below (collectively, the
"Removal Activities'.').
(1) The term of the License shall commence with the closing and conveyance
of the City Property to Developer and shall expire 30 days after the later of the
date on which both the New Steam Facilities and New Chilled Water Facilities
are fully operational. During that term,BWL shall have the right to conduct the
Removal Activities tluough its employees, agents and/or contractors at any time
without obtaining any consents or authorizations and at no cost or expense to
- 16 -
BWL for such use. However, the BWL right of access shall be subject to
compliance with all of Developer's and its contractor's standard procedures for
access to the City Property during construction of the Project.
(2) Until the License expires, title to the Steam Facilities and the Chilled
Water Facilities shall be held by the BWL, including, but not limited to, all
personal property, fixtures, conduit, lines, leads, connections, facilities or any
other like or similar devices or any improvements or replacements of the same of
every nature and 16nd that comprise the Stearn Facilities and the Chilled Water
Facilities.
(3) Notwithstanding the foregoing, the BWL shall not be obligated or required
to undertake or complete any Removal Activities except to the extent the BWL
deems appropriate, in its sole discretion and the BWL shall not be obligated or
required to make any repairs to the City Property. However, the BWL shall not
cause any damage to any portion of the Power Station which may affect the
ability of Developer to obtain the Maximum available federal and state historic tax
credits for the Project, as set forth in this Agreement. Further, from and after the
expiration of said License, the BWL shall not be responsible or liable in any
una-uler whatsoever for the Steam Facilities or the Chilled Water Facilities, except
those facilities that remain within the easement provided pursuant to subsection
1.4(E) of this Agreement. From and after the expiration of the License, any
remaining components of the Stearn Facilities and Chilled Water Facilities shall
become the property of Developer. To the extent the BWL's rights under this
License are set forth in a document recorded with the Ingham County Register of
Deeds, upon expiration of the License as set forth above,Developer shall have the
right to prepare, execute and record with the Ingham County Register of Deeds
the necessary document to terminate, of record, the License and, if requested by
Developer, the BWL shall cooperate by co-signing that document.
(4) Developer shall hold the BWL, the City and their engineers, officers,
employees, agents, contractors and subcontractors harmless from, defend them
(with legal counsel reasonably acceptable to the City and BWL) against, and pay
on their behalf any amount ordered to be paid as a result of any and all demands,
claims, liabilities, obligations, damages, awards, judgments or administrative
losses or expenses either of them may receive or incur as a result, arising from or
in connection with the Removal Activities except those resulting from the
negligence or willful misconduct of F3WL, the City or either of their engineers,
officers, employees, agents, contractors or subcontractors. The preceding
sentence shall also not apply to any enviromnental condition on the City Property
except to the extent of any release or exacerbation resulting from the negligence
or other wrongfill action of-Developer or Developer's contractors, employees,
agents or representatives. To the extent permitted by law, the BWL shall hold
Developer, the City and their engineers, officers, employees, agents, contractors
and subcontractors harmless from, defend them (with legal counsel reasonably
acceptable to the City and Developer) against, and pay an their behalf any amount
- 17 -
ordered to be paid as a result of any and all demands, claims, .liabilities,
obligations, damages, awards, judgments or administrative losses or expenses
either of them may receive or incur as a result, arising from or in connection with
the Removal Activities except those resulting front the negligence or willful
-misconduct of Developer, the City or either of their engineers, officers,
employees, agents, contractors or subcontractors. The provisions of this Section
shall survive the expiration of the License, the closing on the conveyance of the
City Property to Developer, and the expiration, cancellation or termination of this
Agreement.
(5) During the tenn of the License, Developer shall obtain and maintain a
general liability and owner's liability insurance policy, naming the City and the
BWL and their engineers, officers and employees as insw-eds or additional
insureds and certificate holders with coverage of at least $1,000,000 per
individual and $1,000,000 per occurrence. Such .insurance shall provide that it
may not be canceled, modified or teminated without at least 30 days prior written
notice to the City and the BWL. A copy of the certificate(s) and po.licy(ies) of
insurance shall be provided to the City and BWL prior to the closing on the City
Property with Developer.
(6) During the terns of the License, the BWL shall obtain and maintain a
general liability and owner's liability insurance policy, naming the City and
Developer and their respective officers and employees as additional insured and
certificate holders with coverage at least $1,000,000 per individual and
$1,000,000 per occurrence, insuring all of the BWL's activities under the License.
Such insurance shall provide that it may not be cancelled, modified or terminated
without at least 30 days prior written notice to Developer. A copy of the
certificates and policy(ies) of insurance shall be provided.to Developer prior to
the closing on the City Property with Developer.
(7) At Developer's expense, the BWL, its employees, agents and contractors,
shall have the right to use electricity and other utilities at the City Property as
needed for the Removal Activities.
Article II: Project Development
2.1 Purpose. A primary purpose for the conveyance of the City Property to Developer and
for the Public Support is to assure the redevelopment, use and occupancy of the Site in
accordance with this Agreement. Moreover, much of the funding available for the Public
Support is dependent upon the tax revenues to be generated by the redevelopment, use and
occupancy of the Site as envisioned in this Agreement.
2.2 Redevelopment Required. Developer shall redevelop the Site or cause it to be
redeveloped as described and depicted on the attached Exhibit E, subject to only such changes as
are required by City bodies and officials ui the zoning approval process and in the review of the
plans by the City's building inspector acid subject to AFICA's reasoi'ab le review mid consent.
The AFICA shall occupy the Site as its corporate headquarters as provided in the lease to be
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disclosed to the City's and the BWL's attorneys prior to closing as provided in subsection
1.7(D)(1)above.
2.3 Compliance and Approvals.
(A) Developer shall assure that the Project and its construction and use comply with
all applicable laws, rules, regulations, permits, orders, decisions and directives of any
governmental official, agency or entity of competent jurisdiction.
(P) Developer shall be solely responsible to obtain and maintain any needed licenses,
pemnits, certifications or other reviews and approvals from any governmental officer,
agency or entity of competent jurisdiction needed to construct or use the Project.
(C) Without limiting the generality of the preceding subsections, Developer shall seek
approval under the City's zoning.ordinance and applicable construction codes, obtaining
whatever rezoning, special use approval, variances, site plan approvals, building and
occupancy pen-nits as may be required. Nothing in this Agreement shall in any way limit
the discretion of those officials or bodies as they engage in the required reviews and
decision making.
(D) The requirements .in this Section shall survive closing.
2.4 Proiect Timetable. The plaluling, pre-construction, construction and completion of the
Project shall comply with the following dates and, upon the written request of either the City or
the BWL,Developer shall provide a written status report on the Project's development.
Event Deadline
Submission of fully complete and approvable Site Plan to the City April 30, 2008
Closing September 30, 2008
Completion of and issuance of occupancy pennit(s) for first phase of the April 1, 2011
Project
Completion of Project April 1, 2011
2.5 Value. Developer represents that the Project will have a market value currently estimated
to be approximately $130,000,000 and will be completed by December 31, 2011. Developer
understands and agees that the City and the Brownfield Redevelopment Authority of the City of
Lansing (the `TBRA") are relying on that estimate of value and investment to generate the tax_
increment revenues needed to pay for publicly funded work on the Site. Payments to Developer
(or its assignee) from tax increment revenues will depend on sufficient increases in the taxable
value of the Site to generate sufficient tax increment revenues to pay Developer (or its assignee)
after other obligations have first been paid from those tax increment revenues.
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Article III: Utility Relocations
3.1 Steam Facilities Relocation..
(A) Replacements for the Steam Facilities shall be constructed in an underground
vault (the "Steam Vault")to be constructed in or near Wentworth Park which is adjacent
to the City Property (the "Steam Vault Location"). That relocation shall provide for a
vent approximately 36 inches in diameter to extend from underground to a height of 9
feet above the ground and shall provide for access to the underground facilities. The
design and configuration of the vent shall be subject to Developer's reasonable review
and approval which shall not require any changes adversely affecting the use, efficacy or
cost of maintaining the vent. A more particular, but nevertheless general description for
the replacement to the Steam Facilities are as described in the attached Exhibit B (the
"New Steam facilities").
(B) The BWL shall, at BWL's expense, cause plans and specifications for the New
Steam Facilities to be prepared consistent with the general description in Exhibit B, and
Stich plans and specifications shall be submitted to the City and the BWL for their
respective reviews and approvals not later than September 20, 2008. The BWL will be
responsible for all costs it incurs for BWL staff time needed to develop the plans and
specifications. The City's review' and approval shall be limited to assuring the design,
construction, operation, use, maintenance, and repair of the New Steam Facilities do not
unreasonably interfere with the use of Wentworth Parlc and that they are consistent with
the aesthetic and environmental vision for the riverfront as otherwise approved by the
City and in accordance with the conditions and requirements of any federal or state grants
or other sources of funding for Wentworth Park and the riverfront. The BWL shall
review the plans and specifications to ensure the New Steam Facilities will meet BWL's
operational requirements and standards. The costs incurred by Developer to prepare the
plans and specifications and obtain any needed approvals of the plans and specifications
shall be included in the cost of construction of the New Steam Facilities and paid (or
reimbursed) from the same funds as are used to pay for the construction and installation
of the New Steam Facilities.
(C) Developer shall, at its own expense to be reimbursed from tax increment revenues
pursuant to subsection 5.2(B) below, cause the New Steam Facilities to be constructed in
accordance with the plans and specifications approved pursuant to subsection (B). The
parties agree that, in order to assure the New Steam Facilities construction and
installation .is coordinated with Developer's activities oil the Site, The Christian
Company ("Christman") shall be the general contractor .for the constriction and
installation of the New Stearn Facilities. Such construction shall begin not later than
April 1, 2009 and be completed not later than September 30,2009.
(D) The City hereby gives permission to the BWL to use the Steam Vault Location for
the construction, installation, use, operation, maintenance, repair, replacement and
improvement of the New Steam Facilities in accordance with a License Agreement to be
executed by the City and the BWL prior to closing.
(E) To the extent it wishes to salvage any of the Steam Facilities, the BWL shall have
right to enter the City Property after the closing occurs on the City Property as set forth ir1
the License.
(F) The requirements of this Section shall survive closing on the conveyance of the
City Property to Developer.
3.2 Cliilled Water Facilities Relocation.
(A) Replacements for the Chilled Water Facilities shall be constructed on a site to be
designated and secured by the BWL (the "New Chiller Location") not later than March
30, 2008. A more particular, but nevertheless general, description for the replacement to
the Chilled Water Facilities is in the attached Exhibit C (the "New Chilled Water
Facilities").
(13) Developer shall, at Developer's expense to be reimbursed along with the New
Chilled Water Facilities constriction costs as provided below, cause plans and
specifications for the New Chilled Water Facilities to be prepared by a design
professional reasonably acceptable to the BWL, consistent with the general description in
Exhibit C, and such plans and specifications shall be submitted to the BWL for its review
and approval not later than June 30, 2008. The BWL will be responsible for all costs it
incurs for BWL staff time needed to develop the plans and specifications.
(C) Developer shall cause the New Chilled Water Facilities to be constructed at the
New Chiller Location in accordance with the plans and specifications approved pursuant
to subsection (B). The parties.agree that, in order to assure the New Chilled Water
Facilities constriction and installation is coordinated with Developer's activities on the
Site, Christman shall be the general contractor for the construction and installation of the
New Chilled Water Facilities.
(1) Developer shall order the components of the New Chilled Water Facilities
as needed for timely delivery to complete their construction and installation as
required by paragraph (2)below.
(2) Such construction and installation shall begin not later than September 30,
2008 and be completed not later than September-30,2009.
(3) Progress payments will'be made to Developer from funds available to the
BWL as provided in subsection 5.2(A) of this Agreement following the BWL's
standard construction draw procedures. The BWL shall provide funds from
another source to provide for any costs of the New Chilled Water Facilities and
New Steam Facilities that exceed $20 million. Until Developer makes the
infrastructure payment funds available as provided in subsection 5.2(b) of this
Agreement, neither the City nor the BWL shall have any obligations for payment
for the New Chilled Water Facilities.
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(D) The requirements of this Section shall survive closing on the conveyance of the
City Property to Developer.
3.3 Other Contract Requirements. The work provided oil the New Steam Facilities and the
New Chilled Water Facilities shall comply with the following contract requirements.
(A) The-construction contract with Christman shall be in a form acceptable to and
approved by the BWL consistent with the BWL's standard procedures for construction
and installation contracts.
(1) That contract shall provide for performance and payment bonds in the
amount of 100% of the contract price and shall note that it is work performed on
public property for a public entity such that no contractor's or material supplier
liens can be placed on the utility relocation project or the Site.
(2) The contract shall provide for completion and acceptance of the work in
accordance with standards customarily used by the BWL and shall provide
operations manuals and warranties in accordance with common standards for such
equipment and in accordance with the BWL's usual practices for such equipment.
(B) The BWL shall have the right, but not the obligation, to inspect and test all
construction, installation, and components of all equipment and the BWL shall be
contacted before any portions of the work is covered. However, the BWL will not,
simply by slaking such inspection(s) or testing(s), or by failing to raise any objections,
relieve the Developer or Christman from any obligations they may have, or waive any
warranties or guaranties covering the construction.
(C) Developer shall ensure that Christman obtains sealed bids for all subcontracted
work and major components and supplies, in a mariner generally in accordance with the
BWL's purchasing policies, and shall open those bids in the presence of the BWL's
designee. Developer shall ensure that Christman provides the bid tabulation and, if
requested by the BWL's designee,the bids, to the BWL for review and comment prior to
any bid award by Christman.
(D) Upon completion of the construction and installation, Developer shall provide the
City and the BWL with "as built" drawings showing the exact location of the work and
any deviations from the approved plans and specifications. Such drawings shall be
provided to the BWL before the BWL accepts the completed New Steam Facilities or
New Chilled Water Facilities.
(E) Developer shall hold the BWL, the City, the LBRA, and their engineers, officers
and employees harmless from, indemnify them for, and defend their (with legal coruasel.
reasonably acceptable to the City) against any and all demands, claims, liabilities,
obligations, damages, awards, judgments, administrative fines, or other losses or
expenses any of them may receive or incur as a result of the construction of the work to
be performed or provided by Developer under this Article and any defects in that work.
During constnlction and installation and until construction and installation is completed,
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the premises is restored and the BWL has accepted the work, Developer shall ensure that
Christman obtains and maintains a general liability and owners' liability insurance policy
naming the City, the BWL, the LBRA. and their engineers, officers and employees as
insureds or additional insureds and certificate holders with coverage of at least
$5,000,000 per individual and $5,000,000 per occurrence. Such insurance shall provide
that it may not be canceled, modified or terminated without at least 30 days prior written
notice to the City. A copy of the certificate(s) and policy(ies) of insurance shall be
provided to the BWL prior to the commencement of construction. In addition, Developer
sliall assure that all necessary or required workers' disability compensation,
unemployment compensation and other insurance has been obtained by Christman and its
contractors.
Article IV: Parking Ramp
4.1 New Ramp Location and Concept.
(A) The New Ramp shall be located on a portion of the Site located to the north of the
Power Station and south of Shiawassee Street which inay be part of the City Property
and/or all or a portion of the Developer Property as the parties may reasonably agree is
necessary for the construction and operation of the New Ramp in a manner that is
compatible with the development of the remainder of the Site whicli will be surveyed and
described in detail prior to the closing(the"New Ramp Site").
(B) The City and Developer have yet to work out the exact structure of the ownership
of the New Ramp. It will either(1)be constructed and owned by Developer and leased to
the City with an option to purchase it for a stated value pursuant to a lease purchase
agreement between Developer and the City to be entered into prior to closing on the
conveyance of the City Property to Developer, or (ii) the City or the Building Authority
of the City of Lansing(the "Building Autlority") will issue bonds soon after the closing
on the conveyance of the City Property to Developer and use the proceeds frolll the
issuance of those bonds to pay the cost of constructing the New Ramp which, together
with the New Ramp Site will be conveyed to the City as provided in a New Ramp
purchase agreement between Developer and the City to be entered into prior to the
closing on the conveyance of the City Property to Developer. Entry into either agreement
shall be condition of closing on the conveyance of the City Property to Developer. That
agreement shall, among other terms the parties may desire, address the following issues:
(1) Whether any portion of the New Ramp structure will be constricted for
commercial or residential uses and the terms of any such uses;
(2) Any needed easements in the New Ramp or adjacent property needed to
provide access to tiie New Ramp or any adjacent property;
(3) The lease and/or purchase terns for the New Ramp, including any
extensions or renewals;
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(4) Parking rights and payments for AFICA, for Developer, for the general
public, and for any other parties;
(5) The design requirements, plans and specifications for the New Ramp;
(6) Requirements for any construction contracts for the New Ramp, inchiding
any payment and performance bond or other requirements;
(7) Any rights to inspect the New Ramp's construction, to require "as built"
drawings, to warranties, etc.;
(8) What, if any,portion of the New Ramp will be located in or excluded from
the renaissance zone to be created under Section 5,6 of this Agreement; and
(9) Any operational or use requirements or limitation.
(C) The Current Ranip may not be demolished prior to the tune permitted under the
agreement to be entered pursuant to this Section.
Article V: Economic Development
5.1 Pu_ ipose.
(A) When completed, the Project will vastly alter the appearance of the vicinity with
the elimination of the "tunnel" that the Current Ramp gives, the demolition of the
building on the Developer Property, the re-occupancy of the long vacant Power Station,
the addition of retail shops, the continuation and linkage of the riverwalk, and the general
beautification of the area. Finally, it will enable the City to retain 623 jobs and a major
corporate headquarters and to enable the creation of up to, an estimated additional 500
jobs in its downtown. The parties anticipate the estimated $130 million project will
eventually add over an estimated $50 million to the City's tax base.
(B) However, the parties estimate addressing the enviroarnental issues on the City
Property, removing the existing Chilled Water Facilities and constructing new Chilled
Water Facilities, relocating the Steam Facilities, and demolishing the Current Ramp will
cost as much as $25 million, Constructing the New Ramp will cost about $20 million and
improving and enhancing the riverfront along the Site will cost upwards of$3.0 million.
Therefore, to obtain the economic, aesthetic and other. benefits of the Project, it is
necessary to make the Project financially viable by addressing the many.chall"cngcs
il-ierent in the Site and in retaining jobs in the City,
(C) Accordingly, City officials have aligned an array of Public Support for the
Project. Each is interdependent on the other and each requires attention to various
requirements to assure its benefits are available on a timely basis.
5•92 Brownfield Fviancing and Infrastructure Payments.
-?4 -
(A) Infrastructure payment.
(1) Developer shall, at or before the closing, mare available to the BWL,
pursuant to a written agreement among all the parties which shall, at a millinium,
require the'signature of a BWL official prior to the release of such funds, the
amourrlt of$20 million to be used by the BWL to pay costs incurred to construct
and install the New Chilled Water Facilities and the New Steam Facilities.
(2) The BWL shall from its own funds pay any amounts incurred in excess of
$20 million to construct and install the New Chilled Water Facilities-and the New
Steam Facilities.
(3) Disbursements from the funds to be provided under subsections (1) and
(2) above shall be made as provided in Section 3.2 of this Agreement.
(B) Reiribursernents from tax increments.
(1) It is intended that available tax increment revenues captured pursuant to
the Brownfield Redevelopment Financing Act, 1996 PA 381, as amended ("Act
381") be used to reimburse Developer for reimbursable costs incurred by
Developer for relocating the Steam Facilities, constructing the new Chilled Water
Facilities, removing the existing Chilled Water Facilities, and demolishing the
Current Ramp which shall be the subject of a separately negotiated brownfield
plan and reimbursement agreement.
(2) Such funds can be captured only in accordance with all of the following:
(a) A brownfield plan for the Site approved by the LBRA and the City
Council which is a condition of closing under Article I.
(i) The City, the BWL and Developer shall jointly prepare the
brownfield plan for the Site for consideration by the LBRA not
later than March 1, 2008.
(ii.) Provided it is approved by the LBRA by the date provided
in paragraph (i) above, the brownfield plan shall be submitted to
the City Council for a public hearing and approval not later than
April 15,2008.
(b) In order to capture t.x increment revenues generated from state
educational and local school operating tax millages, a brownfield work
plan must also be approved by the Michigan Economic Growth Authority
("riIEGA") which is a condition of closing under Article I: The City, the
BWL and the Developer shall jointly prepare the brownfield work plan.
Provided it is first approved by the LBRA, the work plan shall be
submitted to the MEGA for consideration by and approval of the MEGA
not later than May 15,2008.
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(c) Capture of these tax increment revenues will .require the City
Council and the LBRA to.adopt resolutions. Nothing in this Agreement
shall prevent the City Council and the LBRA Board from exercising their
discretion in the adoption of the needed resolutions or other actions to be
talcen,
(d) A reimbursement agreement among the City, the LBRA, the BWL,
and Developer, that provides for disbursement of the tax increment
revenues pursuant to this Agreement is a condition of closing under
Article I.
'(3) To the extent AFICA occupies the Site at the time they are available for
distribution, Developer shall have the right to assign to AFICA all of Developer's
rights to receive the tax increment revenues captured by the LBRA as set forth
above and as provided in the reimbursement agreement to be entered .into
pursuant to subsection 5.2(B)(2)(d) above. Such assigninent shall not take effect
until the City, the LBRA, and the BWL are notified in writing of the assignment'.
5.3 Brownfield Tax Credits. Act 381 also provides for state business tax credits with the
approval of a brownfield plan by the LBRA and-the City Council and with the approval of the
amount of the tax credits by the MEGA. The brownfield plan shall be submitted to and approved
by the City Council as provided in paragraph 5.2(A)(2)(a) above. Developer shall submit the
appropriate application to the MEGA for its consideration and approval not later than May 15,
2008. Approval of the tax credits in the amount of at least.$9.9 million is a condition of closing
under Article I.
5.4 CMI Grant Funds. The parties.agree that enhancement of the riverfront along the Site is
essential to the success of the Project. -The City has received a preliminary grant collnn]ltnlent
from the MDEQ for a Clean Michigan Initiative ("CMI") grant of$3.2 million that are available
to use for ettllancement of -the riverfront with public infrastructure improvements. After
providing Developer an opportunity for review and comment, the City will,not later than May 1,
2008, submit an amended waterfront development plan to the MDEQ showing, at a mininnunt,
proposed public infrastructure enhancements to the riverfiont contiguous to the Site. Final
approval of this CMI grant is a condition to closing under Article I.
5.5 EPA Grant Funds. The City has obtained a $600,000 grant from the United States
Envirotunental Protection Agency ("EPA") for use for environmental remediation in cormection
with the Project. The City will, not later than August 30, 2008, obtain any additional needed
approvals from state officials to use the funds for such purposes.. This is a condition to closing
under Article I.
5.6 Renaissance Zone. Property located in a "renaissance zone" created under the Michigan
Renaissance Zone Act, 1996 PA 386, as amended ("Act 386") is exempt from various taxes as
are those who occupy such property. The parties agree that approval of.the Site as a renaissance
zone is critical to the Pro cot's viability. The parties have yet to determine what, if any, portion
of the New Ramp should be within a renaissance zone and will address that as. part of the
agreement for the New Ramp under subsection 4.1(B) of this Agreement. Enactment of a
?6 -
resolution by the City Council in support of the renaissance zone prior to September 15, 2008
shall be a condition to closing under Article I. Developer may elect the date upon which such
renaissance zone application.is submitted to the State, which is currently estimated to be January
1,2009.
5.7 Historic Tax Credits.
(A) The City and the BWL shall cooperate with Developer as Developer seeks
creation by the City of a historic district encompassing the Power Station. Approval of
the historic district is a condition for closing under Article I. Approval of tax credits
related to that designation is not a •condition to closing and is solely Developer's
responsibility. To the extent reasonably necessary prior to closing on the conveyance of
the City Property to Developer, the City and the BWL shall execute as the owner of the
City Property such documents as may be needed to obtain such tax credits.
(B) If Developer does not apply for such designation by February 1, 2008 or does not
waive the approval of the historic district as a condition of closing by February 1, 2008
and, as a result, closing does not occur, either the City or the BWL may elect to terminate
this Agreement. If either does so, the Earnest Money shall be paid to the City and the
BWL as liquidated damages and this Agreement shall terminate upon the City's and
BWL's receipt of the Earnest Money.
5.8 Failure to Obtain or Give Public Support Approvals.
(A) Approval of the Public Support requires various public officials and bodies to
make discretionary decisions, often using statutory or other criteria and considering a
variety of information including information offered by the public. Nothing in this
Agreement is intended to impair or limit any discretion of any public official or body.
(B) Except where another or additional remedy is expressly provided by this
Agreement, if any approval that is required under this Article to be given prior to closing
or any deadline under this Article is required to be met before closing is not given or met
prior to the closing:
(1) The parties may waive that condition to closing and proceed to closing.
(2) The parties may, without amending this Agreement but with resolution
approved by the City Council and the BWL, extend the date for closing until such
approvals can be obtained and/or steps completed.
(3) Any party may terminate this Agreement and the Earnest Money shall be
returned to Developer. This Agreement shall terminate when the Earnest Money
is returned to Developer.
Article VI: Miscellaneous
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6.1 Fair Employment Practices. Developer agrees that in the constntction of the Project and
all other work Developer is to perform under this Agreement, Developer and its contractors,
agents and representatives shall comply with all applicable laws, ordinances, rules, regulations
and other legal requirements, whether now.in effect or hereinafter taking effect with respect to
equal opportunity, affirmative action, payment of prevailing wages and fringe benefits.
Furthermore, Developer agrees to enter into a Project Labor Agreement in a form approved by
BWL with Developer's contractors and subcontractors for the New Steam Facilities and the New
Chilled Water Facilities. Finally,Developer intends to negotiate a Project Labor Agreement for
any other work on the Project. Developer shall ensure that Christman and its subcontractors also
comply with the provisions of the Project Labor Agreement entered into by Developer.
6.2 Remedies.
(A) Where return or retention of the Earliest Money is provided, it shall be the sole
remedy available to the party. Where payment of the Earnest Money to or the retention
of the Earnest Money by the City and the BWL is provided, it shall be divided and
dispersed as they mutually direct in writing. If the City and the BWL do not agree on the
division and dispersal of the Earliest Money between them, the Earnest Money shall be
allocated between them based on invoiced and paid costs each has incurred according to
the following: first to pay for the costs of obtaining the return of the Earnest Money, then
to pay for the costs of preparing this Agreement, then for the costs of preparing plans and
obtaining approvals as required by this Agreement, and, finally, by dividing the
remainder. Otherwise, any remedies provided in this Agreement shall be cumulative of
all remedies available under applicable law or in equity.
(B) Where this Agreement calls for the payment of attorneys fees and transactional
costs, the party required to pay such amounts may review the invoices therefore to the
extent the information in those invoices is not privileged. If the parties do not agree on
the amounts to be paid, they shall seek the opinion of an attorney from another Michigan
based law firm who has experience with transactions of such a nature and complexity as
this transaction regarding the reasonableness of such fees and costs. If the parties can
agree on an attorney to review those invoices, the opinion of that attorney shall be
binding on the parties. If they cannot agree, the party seeking the fees shall select an
attorney, the party to pay the fees shall select an attorney and the two selected attorneys
shall select a third attorney and the majority decision of the three attorneys so selected
shall be binding on the parties. No selected attorney or that attorney's law firm shall
have provided services for any party within the last 5 years.
(C) Remedies may be exercised together or separately and the exercise of one or more
remedies shall not preclude the subsequent exercise of other remedies.
(D) The parties agree that some legal remedies may be inadequate and that equitable
remedies are more appropriate. The parties agree that any breach of this Agreement
causes irreparable harm to non-breaching parties.
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(E) To tine extent permitted by law, the parties agree that the j urisdiction and venue
for any action brought pursuant to, arising from or to enforce any provision of this
Agreement shall be solely in the state courts in Ingliam County, Michigan.
(F) To the extent permitted by law, the parties agree that in any action brought
pursuant to, arising from or to enforce any provision of this Agreement the prevailing
patty shall, in addition to any other remedy, be entitled to recover its costs, including,
without limitation, actual, reasonable filing fees, legal fees, expert fees, discovery
expenses and other costs incurred to investigate, bring, maintain or defend any such
action for its first accrual or first notice thereof tlu'ough all appellate and collection
proceedings.
(G) Time is of the essence in this Agreement. The failure of any party to comply with
a deadline imposed by this Agreement is a substantial breach of this Agreement.
However, the parties may, by written agreement by the Mayor and the General Manager
of the BWL agree to a one-time extension of a deadline of up to 60 days and after
approval by tine City Council and the BWL, extend any deadline in this Agreement to
whatever date is then agreed upon, without formally amending this Agreement. It is
further provided, that if it is unable to meet any required deadline under Section 1.7 of
this Agreement, Developer may, at its discretion extend the closing date by up to 180
days if it reasonably believes that, in doing so,it can meet the deadline. If any deadline is
so extended, all subsequent deadlines in this Agreement that are established in reference
or in harmony to the missed deadline shall be similarly extended.
(H) If the BWL fails to perform any covenant or condition of this Agreement with
regard to any of its obligations under any applicable Environmental Law and such failure
continues for thirty(30) days after written notice from Developer to the BWL, Developer.
ntay pay or perform on behalf of the BWL the defaulted obligation of tine BWL, in which
case the BWL shall rebnburse Developer on demand for all costs incurred by Developer
in so doing,including, without limitation, reasonable attorney fees, together with interest
at the statutory rate for a civil judgement from the date of Developer's payment or
performance until paid. Notwithstanding the foregoing: (1) if any such failure cannot
reasonably be cured within thirty (30) days,the BWL shall not be in default if the BWL
begins to cure during such 30-day period and diligently attempts to cure thereafter; and
(2) if the BWL's breach materially interferes with Developer's construction schedule for
tine improvements to be made to the Project,Developer may pay or perform the BWL's
default obligation after three (3) days written notice.
6.3 Entire Ageement. This is the entire agreement among the parties or any of them with
respect to its subject matter. It supersedes and replaces any prior or contemporaneous
agreements whether written or verbal, express or implied. It may not be amended except by a
writing signed by all the parties after approval by their respective governing bodies.
6.4 Interpretation. All parties had input into the drafting of this Agreement and all had the
advice of legal counsel before entering into this Agreement. Therefore, this Agreement shall be
coristnted as if mutually drafted. The captions are only for reference and shall not affect the
- 29-
interpretation of this Agreement. However, the recitals are an integral part of this Agreement.
Several copies of this Agreement may be signed, but they shall all constitute only one agreeanent.
A copy of this Agreement and all exhibits may be used as an original in any action or proceeding
Involving this Agreement. The exhibits are an integral part of this Agreement and are
incorporated into this Agreement. Whenever an officer is mentioned by title in this Agreement,
it shall be construed as meaning that officer or his/her designee or, if the office is abolished or
duties transferred to another officer, to the officer to whom such duties are assigned.
6.5 Notices. Notices shall be complete when delivered by personal delivery, by courier or
delivery service (such as UPS, FedEx or other service) or by certified mail, return receipt
requested to the addresses first written above. If any party refuses to accept delivery when
presented,delivery shall be deemed to have occurred at the time of such refusal.
6.6 Assignment and Benefit. No party may assign this Agreement or any rights, duties or
obligations under this Agreement without the express, prior written authorization of all the other
parties following action by their respective governing bodies. Stich authorization shall not be
unreasonably withheld, delayed or conditioned. This Agreement shall be binding on the parties
and their pennitted successors and assigns. However, no other parties are .intended to benefit
from or be beneficiaries of this Agreement.
6.7 Further Documents. Should further documentation reasonably be needed to effectuate
the provisions and intent of this Agreement, each party agrees to execute such further documents
as are reasonably needed without undue delay or conditions.
6.8 Recording. A memorandum of this Agreement may be recorded with the Ingham County
Register of Deeds by and at the expense of any party wishing to do so. If requested by any party,
the other parties shall cooperate in preparing and executing such a nnemorandunn for recording in
a form reasonably acceptable to all parties.
-;0-
The parties have signed this Agreement as of the date first written above.
CITY OF LANSING approval as to fonn:
By:
Virg Berrnero,Mayor Brigham C. Smith, City Attorney
By:
Cluis Swope, Clerk Clack Hill PLC
Scott C. Snuth
Paul F. Novak
Miller, Canfield,Paddock & Stone PLC
William J. Danhof
Michael J. Hodge
BOARD OF WATER AND LIGHT Or THE approval as to foizn:
CITY OF LANSING
By:
J. Peter Lary, General Manager Honigman, Miller, Schwarz & Colin LLP
Eric J. Eggan
By:
Sernone James, Chair
By:
Rhonda Jones, Corporate Secretary
CHRISTMj AN CAPITAL DEVELOPMENT
COMPANY
By:
Steven F.Roznowsld, President
By:
Matthew T. Chappelle,
Secretary/Treasurer
J S
LANSING ECONOMIC
DEVELOPMENT COPPOR.A.TION
By:
Robert L. Trezise, h.,President and CEO
By:
Karl Dorshimer,Vice President
5534051 v.1
EXHIBIT A
LEGAL DESCRIPTIONS
"CITY PROPERTY"DESCRIPTION
Real property in the City of Lansing, County of Ingham, State of Michigan, described as
follows:
COMMENCING AT THE CENTER POST OF SECTION 16, T. 4 N.R. 2 W., CITY OF
LANSING, INGHAM COUNTY,MICHIGAN; THENCE ALONG THE EAST-WEST
1/4 SECTION LINE OF SECTION 16, N 89° 59' 00" E 527.87 FEET; THENCE N 00'
01' 45" W 330.00 FEET TO THE NORTHWEST CORNER OF BLOCK 99, ORIGINAL
PLAT OF THE TOWN OF MICHIGAN,NOW CITY OF LANSING,AS RECORDED
IN LI13ER 2, PAGES 36-38, INGHAM COUNTY PLATS,AND THE POINT OF
BEGINNING;THENCE ALONG THE EAST LINE OF NORTH GRAND AVENUE N
000 01' 45"W 519.77 FEET TO A FOUND R.R. SPU<E ON THE CENTERLINE OF
VACATED IONIA.STREET;THENCE ALONG SAID CENTERLINE DUE EAST
89.09 FEET; THENCE N 50' 05' 10" E 157.52 FEET; THENCE N 00' 29' 40" E 39.86
FEET TO A POINT ON THE CENTERLINE OF THE PARTY WALL TO THE WEST
EXTENDED EASTERLY; THENCE ALONG SAID EXTENSION AND ALONG THE
CENTERLINE OF THE PARTY WALL N 890 58' 00" W 210.25 FEET TO THE EAST
LINE OF NORTH GRAND AVENUE; THENCE ALONG SAID EAST STREET LINE
DUE NORTH 296.14 FEET TO A FOUND CUT CROSS IN THE CONCRETE
SIDEWALK, SAID POINT BEING ON THE SOUTH LINE OF SHIAWASSEE
STREET; THENCE ALONG SAID SOUTH STREET LINE S 890 58' 00" E TO THE
WESTERLY EDGE OF THE GRAND RIVER; THENCE SOUTHERLY ALONG THE
WESTERLY EDGE OF THE GRAND RIVER TO THE SOUTH LINE OF OTTAWA
STREET; THENCE ALONG SAID SOUTH STREET LINE DUE WEST TO THE
POINT OF BEGINNING..
There shall be excluded from the final legal description of the City Property that portion
of the parcel legally described above which constitutes "waterfront", as defined in City
Ordinance 208.10 (except for that portion of"waterfront" that is occupied by the cun-ent
Power Station Building, which shall be conveyed). Also, there shall be excluded from the
final legal description of the City Property any property that is south of the vacated
Ottawa Street curb line.
"DEVELOPER PROPERTY"DESCRIPTION
City of Lapsing,County of Ingham,State of Michigan,legally described as:
Commencing at a point on the East side of Grand Avenue 296.1 feet South of the Southeast corner of
Grand Avenue and Shiawassee Street,running thence East parallel with Shiawassee Street along the
centerline of a 12 inch brick firewall whose bearing measures South 89 degrees 53 minutes 57 seconds
East 210.25 feet,thence South 00 degrees 29 minutes 40 seconds West 39.74 feet, thence South 50
degrees 05 minutes 10 seconds West 157.52 feet to the centerline of the former Ionia Street now vacated,
thence West along said centerline 89.09 feet to the East line of Grand Avenue,thence North 141.15 feet
to the point of beginning,being a part of Lots 12 and 13 Block 66 and a part of Ionia Street between
Blocks 66 and 98 of the original plat of the City of Lansing, Ingham County,
[This exhibit is based on preliminary information currently available to the parties. It is subject to
further refinement and definition prior to executing this Agreement and,following execution of this
Agreement. It is specifically subject to survey verification, based on a survey to be obtained by
)Developer, to be prepared by C2AE. The final legal descriptions for the "CITY PROPERTY"
AND "DEVELOPER PROPERTY" shall be based on the survey to be obtained by Developer from
C2AE,subject to the provisions of the Agreement)
EXIS TING CHILLED WA 7EP,
/ LINES TO REMAIN VIA EASEMENT
NORTH
a
I
LANSING BOARD
ri
/ OF NA TER AND LIGHT
/ O TTA WA STA TION
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/ z, FOR MAJOR EOUIRIVENT
REMOVAL
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VIA EASEMENT
CUT & CAP d'; 12"
Q & JO" STEAM PIPING,'
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0 TTA VIA s
— - - - - — -_—= - ' STREET
J"571.1 I
EXHISI T S
CHILLED VIA TER PLANT STEAM OISTRIEUTION REMOVAL PLAN
SEE S-7
j I Steam Distribution Equipment
j Removal List
Iltem;Description _....-- -___-.— iQLY
imecQical
1 1 1Steam Pressure Reducing Valves
�: 2 Isolation Valves E 1�
4 5lrainers l I
--___ I 5 Safety Valves ------- - — ----... 3
G ,Spare Parts Starred on Site Lot
7 ;I nstruments &Transmitters 1Lot
'12/'14120073:18 PNl Development Agreement'I.AsExhibit B Steam
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EXHIBIT D
DESCRIPTION" CURRENT RAMP"
Description of"Current Ramp". The "Current Ramp" is shown in the attached figure and is
depicted inside the red border. The structure has been generally referred to as the"expansion
ramp"and is bound by Ionia Street on the north,the west side of the Grand Avenue right of way
Oil the west, Ottawa Street on the South, and the alley west of the former Ottawa Power Station
on the east.
For the purposes of demolition, the Current Ramp also includes the pedestrian and vehicular
connections to the original North Grand Ramp. The original North Grand Ramp shall not be
demolished.
[This exhibit is based on prelinritrary information currently available to the parties. It is
subject to further refinement and definition prior to executing this Agreement and,following
execution of this Agreement.]
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EXHIBIT E
DESCRIPTION AND DEPICTION OF THE "PROJECT"
DESCRIPTION OF THE "PROJECT"
The proposed development will involve reptuposing of the historic Ottawa Power
Station, a decommissioned electric power generation facility and the surrounding
propetties, into Class A office space to be leased on a long-tens basis by Accident Fund
Insurance Company of Arne-rica for use as a new national coil)orate headquatlers
campus.
Broadly, the project entails the following components:
(1) Environmental remediation of site and building contamination, and demolition of ttivo
existing buildings to the north of the power plant;
(2) Development of the approximately seven acre site, including a 25-foot wide public
"linear" park along the Grand River's edge, 'front Wentworth Park to Shiawassee
Street, to be owned by tine City of Lansing;
(3) Removal of an existing 10,000 ton chilled water plaint and high-pressure steam
distribution facility currently situated within the power plant, and development of
replacement facilities, at new offsite locations, to maintain utility services;
(4) Removal of an existing parking deck expansion currently spanning Grand Avenue
and partially occupying the southwest comer of the proposed site;
(5) Renovation of the historic Ottawa plant, including comprehensive structural
reconfiguration and abatement, to provide approximately 185,000 GSF of off ice
space and 3,400 GSF of basement parking;
(6) Development of an approximately 105,000 GSF building addition,designed to
complement the historic power plant,with additional office space to house 400
employees and a central energy plant;
(7) Purchase and installation of partitions, RlMiture, and other office equipment required
for the corporate operations to be housed in the facility;
(8) Development of technology and communications infrastructure,inchiding data center
facilities;
(9) Development, for either City of Lansing or private ownership,of an approximately
1,000 to 1,200 car parking deck, for use by Accident Fund employees and for
potential public parking.
EXHIBIT F
DEVELOPER'S ENVIRONMENTAL REMEDIATION ON CITY PROPERTY
[This exhibit is based on preliminary information currently available to the parties.
It is subject to further refinement and definition prior- to executing this Agreement
and, following execution of this Agreement.)
As part of the contemplated redevelopment, the following environmental remediation and
other related activities are anticipated to be included as the responsibility of the
Developer. The items are intended to be general in mature, as it is intended that the extent
of environmental contamination will be further characterized, and the associated
remediation requirements delineated,by a Baseline Enviromnental Assessment and Due
Care Plan(s) the Developer will prepare as pail of the due diligence and other
investigatory activities prior to closing. For further ease of reference,please see the
attached "Figure No. 1"prepared by NTH Consultants, Ltd. as part of the Due Diligence
Study referenced under section 1.3 (B) (2) of this agreement.
A.) Removal and disposal in a Type II landfill of soils located in the norlllcast
quadrant of Parcel A that are contaminated with petl'olerinl compounds,
specifically polynuclear aromatic (PNA) hydrocarbons, at concentrations that
exceed MDEQ criteria for volatilization to ambient air.
B.) Removal and disposal in a Type I landfill of lead and cadmium contaminated
soils in the southwest quadrant of Parcel C.
C.) Disposal in a Type 1.1 landfill of any soils removed from site during construction.
D.) Abatement and proper disposal. of all asbestos-containing window caulk and/or
other glazing materials from the windows of the Ottawa Power Station.
E.) Abatement and proper disposal, or encapsulation, of lead-based paint within the
Ottawa Power Station.
R) Abatement of hazardous materials contained within 300 North Grand Avenue
("Stackable Building") and 312 North Grand Avenue ("BWL Building") as
required from mass demolition of completed building and foundations.
G.) Installation of vapor barrier in the basement of the Ottawa Power Station,
including a concrete topping slab.
II.) Any dewatering of site, as required for constriction, will include disposal in the
City of Lansing municipal sanitary sewer system, including all permits and
environmental or other controls required for such disposal.
550836 .S !6005/119350
IN I
hT-� EAST SHUIWASSEE STRLLT
J` A
••��' ESTIMATED LIMrr OF SOIL
II IMPACTTHAT EXCEEDS
VOLATILIZATION CRITERIA
(DEPTH OF IMPACTED SOIL
' UIM
I�'( ppPRO% ATELY2TO4FEET
PARCEL"A" JIII BELOW GROUND SURFACE)
NOTE W
ANY SOIL REMOVED DURING }U11(
CONSTRUCTION ACTIVITIES WILL S¢�I; Abatement and demolition
EITHER NEEOTO BE RE-USED d!S;
APPROPRIATELY ON-SITE
BERMS)OR DISPOSED OF ATA 1i
FACT II MUNICIPAL LANDFILL �r''•„ APPROXIMATE LIIAITS
FACILITY. :r um•�it..:v:rn%.u==/ ( OF FORMER CON.
i�` t
STORAGE AREA,
/ //)l11 REPORTEDLY CAPPED
H Dewatering r rl:r*fir/ ; WRHCLAYEY SOIL
_ r
LAST 10l TA STRGLT r J PARCEL
ESTIMATED LIMIT OF SOIL
IMPACTED WITH
LEAD AND
CADMIUM AT A LEVELREOUIRING
Y L- - -J
DISPOSAL EILANDFILL pARCEL"C" I
(DEPTH OF IMPACTED SOILS 1
APPROXIMATELY]TO 7 FEET A.U. y ® Asbestos Window
BELOW GROUND SURFACE)
Caulk and Glazing
E Lead-based paint
FORMER MANUFACTURED
GAS PLANT(MGP) I Vapor Barrier
1
'/.• Irrc,: LLGLND
SEPARATE PHASE PRODUCT
APPRO%RAATELOCATION
OBSERVED.POSSIBLE MIGRATION FROM OFF.Sn OF MONITORING WELL
E SOURCE OFIN MONI O RI ASSESS
(MANUFACTURED GAS PLANT) /LY POTENTIAL CONTAMINANT
�JI 'lr t�rcutvr.�//r�/rn'r ' MIGRATION FROM
FORMERMGP
LAST O-rrA,YA STRLLT
,
------ -__,'/; GRAPHIC SCALE
120 0 120
1•=120'
is-0iotela0 ooTDiolw Fqunen
�ro Pad HTR consul an a,Ltd. PARCEL LAYOUT MAP
W�esr x�NAR xooT I.. .�
-N sHe i•�7x0' r,•�...,.,.IA.�s. FORMER COAL STORAGE SITE _(i
�snua AnO, LANSING,MICHIGAN
*=r*NOT TO SCALEE4*-
Attachment A
Electric Rate Schedules
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
RESIDENTIAL ELECTRIC SERVICE
RATE NO.1
Availability-This rate is available to any single-family or multifamily dwelling of 4 units or less when the entire electric
requirements are supplied at one point of delivery through one meter. Service to appurtenant buildings may be taken
through the same meter.
Service under this rate is not available to any single-family or multifamily dwelling unit of 4 units or less when a portion
of the dwelling unit is used for commercial,industrial,or resale purposes unless the wiring is so arranged that service for
residential and non-residential purposes are metered separately.
Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts.
Monthly Rate - Shall be computed in accordance with the following charges:
3/1/08
Basic Service Charge $4.76 Per customer per month
Commodity Charge Summer Billing Months of June through October
$.0705 Per kWh for the fast 500 kWh
$.0752 Per kWh for all over 500 kWh
Winter Billing Months of November through May
$.0705 Per kWh for the first 500 kWh
$.0734 Per kWh for all over 500 kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Enerev Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax 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 of Water and Light(BWL)property,or its
operation,or the production and/or sale of electric 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.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Auxiliary Power Provision-Domestic customers desiring electric service as an auxiliary source of power to wind or
solar powered generating equipment may take service under this rate schedule under special agreement with the BWL.
The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate shall pay all
reasonable costs associated with any alteration of BWL equipment required for proper operation of the customer's
generating equipment in parallel with the BWL system. A customer may elect to sell energy to the BWL at the rate of
$.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of$6.40 per month or part thereof instead
of the above Basic Service Charge.
Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
GENERAL ELECTRIC SERVICE
RATE NO.3
Availability-This rate is available to any customer desiring secondary voltage service for any purpose when supplied at
one point of delivery through one meter. 'Ilse limitation to secondary-voltage service may be waived in instances where
the character of the electric load at the premises served has changed substantially. This rate is not available for emergency
or standby service.
Nature of Service-The service is altemating current,60 hertz,single phase or three phase. The secondary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges.
3/1/08
Basic Service Charge $16.78 per customer per month
Commodity Charge Summer Billing Months of June through October
$.0827 per kWh
Winter Billing Months of November through May
$.0796 per kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Enerev Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which
levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or the production
and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share
such local increases.
Metering-Where the BWL elects to measure the service on the primary side of the transformers,the metered kWh thus
measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the customer receives
service through more than one meter,the consumption as registered by the different meters will not be combined for
billing purposes,but will be computed and billed separately.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7,00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Auxiliary Power Provision-Customers desiring electric service as an auxiliary source of power to wind or solar powered
generating equipment may take service under this rate schedule under special agreement with the BWL. The customer
shall pay the charges set forth above. A customer taking auxiliary power under this rate shall pay all reasonable costs
associated with any alteration of BWL equipment required for proper operation of the customer's generating equipment in
parallel with the BWL system. A customer may elect to sell energy to the BWL at the rate of$,022/kWh delivered.
Customers selling energy to the BWL shall pay a charge of$25.00 per month or part thereof instead of the above Basic
Service Charge.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
LARGE GENERAL ELECTRIC SERVICE
RATE NO.4
Availability-This rate is available to any customer desiring secondary voltage for any purpose when the electrical
requirements are supplied at one point of delivery through one metering installation and the billing demand is 15 kW or
more. The limitation to secondary-voltage service may be waived in instances where the character of the electric load at
the premises served has changed substantially. This rate is not available for standby or emergency services.
Nature of Service-The service is alternating current,60 hertz,single phase or three phase. The secondary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges.
3/1/08
Basic Service Charge $35.79 per customer per month
Capacity Charge $9.79 Per kW for all kW of Maximum Demand
Commodity Charge Summer Billing Months of June through October
$.0441 Per kWh
Winter Billing Months of November through May
$.0403 Per kWh
Reactive Power Charge $0.0089 per kvarh in excess of 50%of total kWh.
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering installed in
accordance with BWL Rules and Regulations regarding power factor.
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference,
Tax 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.
Billing Demand-The billing demand shall be the kW supplied during the 15-minute period of maximum use during the
month.
Metering-Where the BWL elects to measure the service on the primary side of the transformer,the metered kW and
kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the
customer receives service through more than one metering installation,the consumption as registered by the different
metering installations will not be combined for billing purposes,but will be computed and billed separately.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2009
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
PRIMARY ELECTRIC SERVICE
RATE NO.5
Availability-This rate is available to any customer desiring primary voltage service when the electrical requirements are
supplied at one point of delivery through one metering installation(except as provided below for Multiple Delivery Point
Aggregation)and the billing demand is 100 kW or more. This rate is not available for standby or emergency service.
Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the
Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges:
3/1/08
Basic Service Charge $89.49 per customer per month
Capacity Charge $7.94 Per kW for all kW of On-Peak Billing Demand,plus
$2.63 Per kW for all kW of Maximum Demand
Commodity Charge Stummer Billing Months of June through October
$0.0387 Per kWh for all kWh during the On-Peak Period,plus
$0.0350 Per kWh for all kWh during the Off-Peak Period,plus
Winter Billing Months of November through May
$0,0369 Per kWh for all kWh during the On-Peak Period,plus
$0.0350 Per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.0089 per kvarh in excess of 50%of total kWh
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering installed in
accordance with BWL Rules and Regulations regarding power factor.
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energv Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax 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.
Billine Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-minute period
of maximum use during the On-Peak Period during the month.
Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period of
maximum use during the month whether on-peak or off-peak.
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m.until 6:00 p.m.,Monday
through Friday. All other hours shall comprise the Off-Peak Period.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
PRIMARY ELECTRIC SERVICE
RATE NO.5
Multiple Delivery Point egere¢ption-The 15-minute period demands of multiple delivery points of a customer may be
summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum
Demand at each delivery point must equal or exceed 100 kW;(b)the total On-Peak Billing Demand shall not be less than
4,000 kW;and(c)the customer shall agree to a service contract with the BWL for the customer's full electrical service
requirements at the aggregated delivery points for a period of not less than five(5)years. Aggregation shall be applicable
for determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and
Maximum Demand,shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered kW and
kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer losses. Where the
customer receives service through more than one meter installation,consumption as registered by the different meter
installations will not be combined for billing purposes,but will be billed and computed separately except as provided for
in Multiple Delivery Point Aggregation.
Eaulpment Supplied by Customer-The customer shall be responsible for furnishing,installing and maintaining all
necessary transforming,controlling and protective equipment required for service beyond the BWL primary-voltage
delivery point. At the sole option of the BWL,a customer may lease such transformers or other equipment from the BWL
under terms established by the BWL.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility hates
PROPOSED
MUNICIPAL WATER PUMPING ELECTRIC SERVICE
RATE NO.7
Availability-This rate is available to any political subdivision or agency of the State of Michigan desiring service for
potable water pumping and associated potable water production equipment when the entire electrical requirements are
supplied at one point of delivery through one meter. This rate is not available for emergency,standby,or auxiliary service.
Nature of Service-The service is alternating current,60 hertz,three phase. The secondary or primary voltage is
determined by the BWL.
Monthly Rate-Shall be computed in accordance with the following charges.
3/1/08
Basic Service Charge $11.18 Per customer per month
Commodity Charge S.0627 Per kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax 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.
Meterine-Where the BWL elects to measure the service on the primary side of the transformers serving the customer,the
metered kWh thus measured will be reduced 3%for billing purposes to adjust for transformer losses.
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.
Aaolieition Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of-Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
LARGE CAPACITY ELECTRIC SERVICE
RATE NO.8
Availability-This rate is available to any customer desiring primary voltage service when:(a)the electrical requirements
are supplied at one or more points of delivery as provided below for Multiple Delivery Point Aggregation;(b)where the
total On-Peak Billing Demand is 25,000 kW or more;and(c)the customer agrees to a service contract with the BWL for
the customer's full electrical service requirements at the applicable delivery points for a period of not less than ten(10)
years. This rate is not available for standby or emergency service.
Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the
Board of Water and Light(B WL).
-Monthly Rate-Shall be computed in accordance with the following charges:
3/1/08
Basic Service Charge $279.66 per delivery point per month
Capacity Charge $8.95 per kW for all kW of On-Peak Billing Demand,plus
$1.68 per kW for all kW of Maximum Demand
Commodity Charge Summer Billing Months of June through October
$0.0336 per kWh for all kWh during the On-Peak Period,plus
$0.0291 per kWh for all kWh during the Off-Peak Period,plus
Winter Billing Months of November through May
$0.0322 per kWh for all kWh during the On-Peak Period,plus
$0.0291 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.0089 Per k varh in excess of 50%of total kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Enem Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax 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.
Billine Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all applicable
delivery points during the 15-minute period of maximum use during the On-Peak Period during the month. (See
Multiple Delivery Point Aggregation.)
Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during the 15-
minute period of maximum use during the month whether on-peal-or off-peak.
Adopted:Proposed Efieciive:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
LARGE CAPACITY ELECTRIC SERVICE
RATE NO.8
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m.until 6:00 p.m.,Monday
through Friday. All other hours shall comprise the Off-Peak Period.
Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a customer shall be
summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum
Demand determined at each delivery point must equal or exceed 1,000 kW;and(b)the total On-Peak Billing Demand
shall not be less than 25,000 kW. Aggregation shall be applicable for determination of the On-Peak Billing Demand only.
All other charges,including the Basic Service Charge and Maximum Demand,shall apply to each delivery point
independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered kW and
kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer losses. Where the
customer receives service through more than one meter installation,consumption as registered by the different meter
installations will not be combined for billing purposes,but will be billed and computed separately except as provided for
Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing,installing and maintaining all
necessary transforming,controlling and protective equipment required for service beyond the BWL primary-voltage
delivery point. At the sole option of the BWL,a customer may lease such transformers or other equipment from the BWL
under terms established by the BWL.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2009
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
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 3/1/08
100 W $10.11
250 W $17.06
400 W $18.23
Mercury Vaporl
175 W $10.60
400 W $18.23
Floodlighting Luminaires on Bracket Arm on existing BWL poles
High Pressure Sodium
100 W $14.45
250 W $18.10
400 W $21.20
Metal Halide
400 W $26.34
1000 W $45.56
1500 W $63.24
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
3/3/08
3 5-foot wood poles including span of overhead $13.00 Per pole
secondary extension
37-foot concrete pole including span of overhead $19.02 Per pole
secondary extension
Other facilities,band set poles,or rearrangement of
existing facilities 1.67% of estimated cost
Adopted:Proposed Effective:March 1,2008
Rates apply to existing luminaires only and are not open to new business.
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
OUTDOOR LIGHTING SERVICE
RATE NO.9
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision
which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or
the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from
being compelled to share such local increases.
Delayed Payment Change-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 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,
(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 refine 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:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
TRAFFIC LIGHT SERVICE
RATE NO.11
Availability-This rate is available to any political subdivision or agency of the State of Michigan desiring unmetered
secondary service for operating traffic lights installed on streets or highways for traffic control and guidance.
Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts
Monthly Rate-Shall be computed in accordance with the following charges.
3/1/08
Basic Service Charge $2.24 Per customer per month
Commodity Charge $.0347 Per watt of active load per month
The actual labor,material,miscellaneous and indirect charges experienced maintaining and relamping traffic signals
during the preceding month.
Minimum Bill-The minimum bill is the basic service charge included in the monthly 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 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.
Determination of Active Load-The active load of flasher lamps or cyclically operated traffic control lamps shall be 50%
of total wattage of all lamps used during one complete cycle of operation. The active load of continuous,non-intermittent
steady burning lamps shall be 100%of the total wattage of all lamps used.
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 Regulxtions-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
SPACE CONDITIONING AND
ELECTRIC WATER HEATING SERVICE
. RATE NO.12
Availability-This rate is available to any customer desiring service for commercialfindustrial space conditioning and/or
electric water heating furnished through a separate meter to which no other electrical device except electric space heating,
electric air conditioning,humidity control equipment or electric water heating equipment may be connected. Electric
space heating will be considered to include heating by light system provided the primary means of space heating at the
time of maximum heating requirements will be furnished by the lighting system with the balance of the heating
requirements furnished by supplementary electric heating equipment. This rate is not available to new applications for
heat for light systems received after March 1, 1979. This rate is not applicable to the use of electricity for electric air
conditioning unless the customer has permanently installed electric space heating equipment and uses it as the principal
source of space heating,or to the use of electricity for occasional or seasonal substitute for another method of water
heating.
Nature of Service-The service is alternating current,60 hertz,single phase at Board of Water and Light(BWL)available
secondary voltage. Three phase service will be furnished at BWL option.
Monthly Rate-Shall be computed in accordance with the following charges.
311/08
Basic Service Charge $22.37
Commodity Charge Summer Billing Months of June through October
$.0948 per kWh
Winter Billing Months of November through May
$.0589 per kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adjustment-Bill 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.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
RESIDENTIAL ELECTRIC SERVICE,
SENIOR CITIZEN
RATE NO,21
Availability-This rate is available to any single family or multifamily dwelling of 4 units or less when the entire electric
requirements are supplied at one point of delivery through the same meter. The customer must be 65 years of age and
head of the household being served. Service to appurtenant buildings may be taken through the same meter.
Service under this rate is not available to any single family or multifamily dwelling of 4 units or less unit when a portion
of the residence or dwelling unit is used for commercial,industrial,or resale purposes unless the wiring is so arranged that
service for residential and non-residential purposes are metered separately.
Customers taking service under this rate shall provide evidence of age and contract with the Board of Water and Light
(BWL)to remain on this rate for at least twelve(12)months.
Nature of Service-The service is alternating current,60 hertz,single phase, 120/240 nominal volts.
Monthly Rate-Shall be computed in accordance with the following charges.
311/08
Basic Service Charge $4.76
Commodity Charge $.0509 per kWh for the first 300 kWh
$.0859 per kWh for the next 200 kWh
$.1152 per kWh for all over 500 kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy charges
and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax 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.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO.31
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 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 3/1/08
70 W $76
100 W $86
150 W $100
250 W $122
400 W $155
1000 W $318
Mercury Vapor Luminaires
100 W $81
175 W $97
250 W $114
400 W $147
1000 W $278
Metal Halide Luminaire
175 W $170
250 W $194
400 W $196
1000 W $380
1500 W $583
Induction Luminaire
85 W $81
165 W $98
Adopted:Proposed Effective:March 1,2008
1 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 of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO.31
Annual Rate(continued)
plus an additional annual charge,depending on type of installation,of:
3/1/08
Wood Pole—Overhead Service None
Wood Pole—Underground Service $88
Concrete Pole—Overhead Service $139
Concrete Pole—Underground Service $139
Post Top $88
Historic—Single Top $288
Large Historic—Dual Top $842
Small Historic—Dual Top $598
Wall/Tunnel—8760 hours $122
Wall/Tunnel—4200 hours $74
Bollard $286
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 Reolacement-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 Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision
which levies taxes,license fees,franchise fees,or any other charges against the BWL property,or its operation,or
the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from
being compelled to share such local increases.
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:Proposed Effective:March 1,2008
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
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 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 3/1/08
70 W S40
100 W $50
150 W $63
250 W S85
400 W $120
1000 W $284
Mercury Vapor Luminaire'
175 W $59
250 W $77
400 W $109
1000 W $241
Incandescent Luminaire2
2500 L $80
4000 L $127
6000 L $154
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:Proposed Effective:March 1,2008
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.
2 Rates apply to existing luminaires only and are not open to new business.
Board of Water and Light,Lansing,Michigan—Electric Utility Rates
PROPOSED
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 levies taxes,license fees,fi=chise 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:Proposed Effective: March 1,2003
Attachment B
Steam Rate Schedules
Board or Water and Light,Lansing,Michigan—Steam Utility Rates
PROPOSED
GENERAL STEAM SERVICE
RATE NO.I
Availability-This rate is available to any customer receiving service from the Board of Water and Light(BWL)steam
distribution system with a maximum gauge pressure of fifteen pounds per square inch(15 psi). Steam services at gauge
pressures above 15 psi but not exceeding 100 psi,when available,may be supplied at the option of the BWL or upon
request by the customer.
Nature of Service-Saturated steam up to a maximum gauge pressure of 15 psi except as indicated above.
Monthly Rate
3/1/OS
Basic Service Charge $10.02 per customer per month
Commodity Charge Billing Months of June through November
$9.95 per 1000 lbs.for the first 200,000 lbs.
$10.52 per 1000 lbs.for all 1000 lbs.over 200,000 lbs.
Billing Months of December through May
$10.09 per 1000 lbs for the first 200,000 lbs.
$10.66 per 1000 lbs.for all 1000 lbs.over 200.000 lbs.
Surcharge-A surcharge of ten(10)percent shall be added to the above rates for steam service supplied upon customer's
request for service at gauge pressure above 15 psi but not exceeding 100 psi.
Fuel Cost Adjustment-This rate is subject to a Fuel Cost Adjustment factor added to the above charges and calculated as
defined on a separate rate schedule incorporated herein by this reference.
Amine Treatment Adjustment-The amine treatment adjustment allows for the monthly adjustment of rates to reflect the
actual cost incurred due to amine feed. The factor shall be applied to each 1000 pounds(lbs)billed. The factor shall
consist of 1.124 times the weighted average amine cost per 1000 lbs treated during the previous month.
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's property,or its operation,or the production
and/or sale of steam,to offset any such cost and thereby prevent other customers from being compelled to share such local
increases.
Minimum Charge-The Basic Service Charge included in the rate except that Special Minimum Charges shall be billed
when the revenue received does not adequately compensate the BWL for the cost of furnishing service.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill which is not paid on or before the due date.
Reconnect Charge-A reconnect charge shall be added to any account which discontinues and reconnects service at the
same address within a twelve(12)month period. The reconnect charge is specified in the BWL Rules and Regulations for
Steam Service.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Steam Service which are-
incorporated herein by this reference.
Effective:March 1,2008
Adopted:Proposed
Board of Water and Light,Lansing,Michigan—Steam Utility Rates
PROPOSED
INDUSTRIAL STEAM SERVICE
RATE NO.2
Availability:This rate is available to any customer engaged in mining or manufacturing and receiving steam at any
BWL plant wall at a minimum gauge pressure of 250 psi. Service will be provided upon customer entering into a
steam supply contract with the BWL. Terms and conditions of the contract may vary due to customer requirements
and the impact on BWL facilities.
Monthly Rate:_
3/1/08
Demand Charge: $1.14 per pound per hour(lb/hr)for all lb/hrs of contract demand
$1.00 per pound per hour(lb/hr)for all lb/1us exceeding contract demand
Commodity Charge: $5.55 per thousand pounds(Mlb)
Fuel Cost Adjustment-This rate is subject to a Fuel Cost Adjustment factor added to the above charges and calculated as
defined on a separate rate schedule incorporated herein by this reference,
Minimum Charge: Monthly Demand Charge above.
Tax Adjustment: Bills shall be increased within the limits of any governmental authority or political subdivision
which levies taxes,license fees,or any other charges against the BWL's property.or its operation,or the
production and/or sale of steam,to offset any such cost and thereby prevent other customers from being compelled
to share such local increases.
Billing Demand: The billing demand is the maximum demand(lb/hrs)supplied during the 15 minute period of
maximum use during the month,but not less than the contract demand.
Delayed Payment Charge:_ A delayed payment charge of 5%of the unpaid balance,excluding delayed payment
charges,shall be added to any bill which is not paid on or before the due date.
Rules and Regulations: Service under this rate is subject to the BWL Rules and Regulations for Steam Service
which are incorporated herein by this reference.
Effective:March 1,2008
Adopted:Proposed
Board of Water and Light,Lansing,Michigan—Steam Utility Rates
PROPOSED
RESIDENTIAL STEAM SERVICE
RATE NO.5
Availability-This rate is available to any single-family or multifamily dwelling of 4 units or less when the entire service
requirements are supplied at one point of delivery through one meter.
Service under this rate is not available to any single-family or multifamily dwelling unit of 4 units or less when a portion of the
dwelling unit is used for commercial, industrial,or resale purposes unless the service is so arranged that residential and non-
residential purposes are metered separately.
Nature of Service-Saturated steam up to a maximum gauge pressure of 15 psi. Steam services at gauge pressures above
15 psi but not exceeding 100 psi,when available,may be supplied at the option of the BWL or upon request by the
customer.
Monthly Rate
3/1108
Basic Service Charge $7.42 per customer per month
Commodity Charge Billing Months of June through November
$7.37 per 1000 lbs.for the first 200,000 lbs.
$7.79 per 1000 lbs,for all 1000 lbs,over 200,000 lbs.
Billing Months of December through May
$7.47 per 1000 lbs for the first 200,000 lbs.
$7.90 per 1000 lbs.for all 1000 lbs.over 200.000 lbs.
Surcharge-A surcharge of ten(10)percent shall be added to the above rates for steam service supplied upon customer's
request for service at gauge pressure above 15 psi but not exceeding 100 psi.
Fuel Cost Adiustment-This rate is subject to a Fuel Cost Adjustment factor added to the above charges and calculated as
defined on a separate rate schedule incorporated herein by this reference.
Amine Treatment Adiustment-The amine treatment adjustment allows for the monthly adjustment of rates to reflect the
actual cost incurred due to amine feed. The factor shall be applied to each 1000 pounds(lbs)billed. The factor shall
consist of 1,124 times the weighted average amine cost per 1000 lbs treated during the previous month.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which
levies taxes,license fees,franchise fees,or any other charges against the BWL's property,or its operation,or the production
and/or sale of steam,to offset any such cost and thereby prevent other customers from being compelled to share such local
increases.
Minimum Charge-The Basic Service Charge included in the rate except that Special Minimum Charges shall be billed
when the revenue received does not adequately compensate the BWL for the cost of furnishing service.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment charges,
shall be added to any bill which is not paid on or before the due date.
Reconnect Charge-A reconnect charge shall be added to any account which discontinues and reconnects service at the
same address within a twelve(12)month period. The reconnect charge is specified in the BWL Rules and Regulations for
Steam Service.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Steam Service which are
incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2000
Attachment C
Water Rate Schedules
Board of Water&Light,Lansing,Michigan—Water Utility Rates
PROPOSED
RESIDENTIAL WATER SERVICE
RATE NO.1
Availability-This rate is available to any single-family residence or multifamily dwelling of 4 units or less served
by one meter.
Monthly Rate-Shall be computed in accordance with the following charges.
Basis Service Charge:per customer per month or part thereof:
Meter 3/1/08
518" $7.52
3/4"* $10.53
1" $19.57
1'/,"or 1'/z" $43.65
2" $76.75
Commodity Charge:per ccf of water used per month;
$1.80
*The BWL standard residential installation is a 1"service line with a'/4"meter. The BWL reserves the right,in its
sole judgment,to install 5/8"meters on any new service installation when circumstances warrant.
Power and Chemical Cost Adjustment-The power and chemical cost adjustment shall consist of an increase or
decrease of 0.10 per ccf billed for each 0.10 increase or decrease in the average cost of power and chemicals
required to deliver treated water to the customer's meter above or below 17.50 per ccf. The cost per ccf for the
billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and
treatment facilities during the one month period preceding the month billed by two months.
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 water,to offset any such cost and thereby prevent other customers from being
compelled to share such local increases.
Minimum Charge-The minimum charge shall be the above Basic Service Charge applied for 30 days.
Delayed Payment Charge-A delayed payment cbarge of 5%of the unpaid balance,excluding delayed payment
charges,shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the fast regular bill for all customers turning on service at a
service location irrespective of prior service with the Board.
Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations
for Water Service which are incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water&Light,Lansing,Michigan—Water Utility Rates
PROPOSED
GENERAL WATER SERVICE
RATE NO.2
Availability-This rate is available to any customer served on the BWL's water system. Service under this rate is
not available for resale.
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge:per customer per month or part thereof;
Meter 3/1/08
5/8" $7.52
3/4" * $10.53
1" $19.57
or P/P $43.65
2" $76.75
3" $173.06
4" $308.50
6" $693.70
8" $1,232.50
10" $1,926.26
Commodity Charge:per ccf of water used per month;
$1.80
The BWL standard residential installation is a 1"service line with a 3/s"meter. The BWL reserves the right, in its
sole judgment,to install 5/8"meters on any new service installation when circumstances warrant.
Power and Chemical Cost Adiustment-The power and chemical cost adjustment shall consist of an increase or
decrease of 0.10 per ccf billed for each 0.10 increase or decrease in the average cost of power and chemicals
required to deliver treated water to the customer's meter above or below 17.50 per ccf. The cost per ccf for the
billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and
treatment facilities during the one month period preceding the month billed by two months.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision
which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or
the production and/or sale of water,to offset any such cost and thereby prevent other customers from being
compelled to share such local increases.
Minimum Charee-The minimum charge shall be the above Basic Service Charge applied for 30 days.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment
charges,shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
servicc location irrespective of prior service with the Board.
Rules and Re2ulatioos-Service under this rate is subject to the Board of Water and Light Rules and Regulations
for Water Service which are incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water&Light,Lansing,Michigan—Water Utility Rates
PROPOSED
FIRE SERVICE
RATE NO.4
Fire Service - A fire service line will be installed to a fire hydrant(s)or a customer's detector check valve in
accordance with the schedule of charges for water system connection fees(Rate 3)and the current water service
installation charges set forth in the Rules and Regulations for Water Service. The location of the detector check
valve shall be determined by the Water Distribution Engineering Department.
Fire service lines shall be used for fire protection purposes only. No additional charges will be made for water used
for testing and fire purposes. The customer shall maintain the detector check valve and fire protection system
connected thereto in good condition in compliance with Section 34-9,Repair and Protection of Equipment,of the
Code of the City of Lansing,Michigan.
Monthly Fire Service Charge-Water supply and maintenance of a fire service line to a detector check valve shall
be provided in accordance with the following schedule of charges:
Service Size 311108
4"or smaller $55
6" $122
g" $216
10"or larger $337
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 water,to offset any such cost and thereby prevent other customers from being
compelled to share such local increases.
Minimum Charge-Billings subject to this rate are not subject to a minimum charge.
Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment
charges,shall be added to any bill which is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations
for Water Service which are incorporated herein by this reference.
Adopted:Proposed Effective: March 1,2009
Board of Water&Light,Lansing,Michigan—Water Utility Rates
PROPOSED
LAWN SPRINKLING WATER SERVICE
RATE NO,5
Availability-This rate is available to any customer served on the BWL's water system where the meter or service is
installed solely for lawn sprinkling. Municipalities having jurisdiction over sewer system rates may designate other
uses of water which are subject to this rate.
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge: Billings subject to this rate are not subject to a Basic Service Charge.
Commodity Charge:per ccf of water used per month
3!1/08
all ccf $1.80
Power and Chemical Cost Adjustment-The power and chemical cost adjustment shall consist of an increase or
decrease of o.l¢per ccf billed for each 0.10 increase or decrease in the average cost of power and chemicals
required to deliver treated water to the customer's meter above or below 17.50 per ccf. The cost per ccf for the
billing period shall consist of the weighted average cost of chemicals,electricity,steam and oil used in pumping and
treatment facilities during the one month period preceding the month billed by two months.
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 water,to offset any such cost and thereby prevent other customers from being
compelled to share such local increases.
Minimum Charge-Billings subj ect to this rate are not subject to a minimum charge.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment
charges,shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on service at a
service location irrespective of prior service with the Board.
Mules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations
for Water Service which are incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008
Board of Water&Fight,Lansing,]Michigan—Water Utility Rates
PROPOSED
FIRE HYDRANT CHARGES
RATE NO.6
Annual Fire Hydrant Charge- Water Supply and maintenance of a fire service line to a public or private fire
hydrant shall be provided in accordance with the following annual schedule of charges:
3/1108
All Hydrants S357
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision
which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or
the production and/or sale of water,to offset any such cost and thereby prevent other customers from being
compelled to share such local increases.
Minimum Charge-Billings subject to this rate are not subject to a minimum charge.
Delayed Payment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed payment
charges,shall be added to any bill which is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the Board of Water and Light Rules and Regulations
for Water Service which are incorporated herein by this reference.
Adopted:Proposed Effective:March 1,2008