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HomeMy WebLinkAbout2011 Minutes BWL 53 Preliminary Minutes:7o be Approved 77-15-77 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT September 27, 2011 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Dennis Louney, Anthony McCloud, Marilyn Plummer, David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Absent: None. The Corporate Secretary declared a quorum present. Commissioner Cynthia Ward led the Pledge of Allegiance. Motion by Commissioner Margaret Bossenbery, Seconded by Commissioner Tracy Thomas, to Amend the Agenda and move item#7a (Resolution for the 2012 Board Meeting Dates)to item#10, the Resolution portion of the Agenda. Action: Motion Carried PUBLIC COMMENTS 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. Steven Raull, 1608 W. Shiawassee St., stated that he was a representative of"Lansing Can Do Better". Mr. Raull spoke about energy efficiencies and commended the Board of Water& Light for getting underway with the new REO Town Plant and the Electric Car Program. ------------------ APPROVAL OF MINUTES Motion by Commissioner Bossenbery seconded by Commissioner Price to approve the minutes of the Regular Board Meeting minutes of July 26, 2011. Action: Carried unanimously Regular Board Mtg. September 27,2011 Page 2 of 11 COMMUNICATIONS a. Letters regarding use of BWL's floodplain for Woldumar Nature Center's Run-A Munk 5& 10K Walk/Run(Jeff Hicks, Delta Township Trustee; Joan Bauer, State Rep.; Rick Jones, State Senator) Acted on by the Administration and Received and Place on File b. Electronic mail from Anderson Water Systems regarding Reo Town Plant. Acted on by the Administration and Received and Place on File c. Letter of appreciation to BWL employees from the Board of Commissioners Received and Place on File d. Letters in response to the request for use of the BWL's floodplain for Woldumar Nature Center's Run-A-Munk 5& 10K Walk/Run. Received and Place on File COMMITTEE REPORTS COMMITTEE OF THE WHOLE September 13, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, September 13, 2011. Committee Chair Louney called the Committee of the Whole meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Dennis M. Louney, Anthony McCloud, Marilyn Plummer, Tracy Thomas, David Price, Cynthia Ward and Sandra Zerkle. Committee Chair Louney welcomed the new Commissioner, Anthony McCloud. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Thomas, seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of July 12, 2011. Action: Motion Carried Plant Updates Regular Board Mtg. September 27,2011 Page 3 of 11 ■ Wise Road Water Plant General Manager Lark stated that there was an accident at the Wise Road Water Plant on July 26th. There was an error made by both the Board of Water and Light operator and the first time chemical (chlorine) deliverer, who was a contractor. The chemical was placed in the wrong holding tank, therefore causing a chemical release that heavily damaged the inside of the plant. General Manager Lark thanked all of the Board of Water& Light Departments that were involved with the handling of the situation. He stated that it was gratifying to see all of the Board of Water& Light employees mobilize so quickly to serve customers and monitor both the air and water quality, of which there was no problem with either. General Manager Lark stated that the water plant was fully insured and that this accident will have a positive effect on rates because of instead of having to spend $4 Million over six years, as budgeted, we will spend $500,000, which is the deductable amount. In fact, the Board of Water& Light will investigate the possibility of bringing legal action against the chlorine contractor to recover the$500,000 deductable. Dick Peffley, Executive Director of Water Operations and Special Projects, provided some history of the Wise Road Water Plant. He said the Wise Road water plant was a fully automated plant that produces 10 millions gallons of water a day and it serves south Lansing and the Holt area. Mr. Peffley said when the two chemicals of chlorine and fluoride mixed it caused a gas cloud that aggressively attacked the equipment and caused extensive damage on the inside of the plant. The exterior wall structure seems to have survived the event with minimal damage and we plan to reuse the shell of the building; however we will be replacing much of the equipment inside and installing computer upgrade systems, which is a major redesign. The estimated time to rebuild this state of the art water facility is two years. Mr. Peffley thanked the Administration and his support staff, particularly Tim Hyde and Scott Hamelink for all of their support and assistance with keeping the Wise Road Plant operating. ■ REO Town Co-Generation Plant General Manager Lark stated that the REO Town Plant is on time and on budget. He stated that within the next month you will start to see a lot more activity at the site. Susan Devon, Assistant General Manager and Project Manager for the REO Town Plant provided a brief update on the REO Town Plant which included minor plant design changes and major equipment purchases. 2012 Regular Board Meeting Resolution Motion by Commissioner Price,seconded by Commissioner Plummer,to forward the proposed resolution for the 2011 Board Meeting Schedule to the full board for approval. Action: Motion Carried Other None Regular Board Mtg. September 27,2011 Page 4 of 11 Absence None Adjourn On Motion by Commissioner Price, seconded by Commissioner Plummer, the meeting adjourned at 6:20 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE September 13, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 6:25 p.m. on Tuesday, September 13, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis Louney, Marilyn Plummer and David Price. Alternate committee members Tracy Thomas and Sandra Zerkle were present. Also present was Board member Cynthia Ward and Anthony McCloud. Absent: None. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Price to approve the Finance Committee meeting minutes of July 12, 2011. Action: Carried unanimously. FY 2011 Audited Financial Statements- Plante Moran General Manager J. Peter Lark introduced Douglas Rober, Managing Partner with Plante & Moran (P&M). Douglas Rober stated that P&M is appreciative of the opportunity to work with the Board of Water & Light. Mr. Rober introduced Shaun Krick, CPA Associate. Mr. Rober stated that there were no difficulties with management and no significant finding during the audit. Shaun Krick, CPA Associate with P&M, reviewed the audit process of the financial statements of the Enterprise Fund and Pension Fiduciary Funds of the Board of Water and Light (BWL) for fiscal year ending 2011 as well as the management letter. The following communications were included in the report: Regular Board Mtg. September 27,2011 Page 5 of 11 • Communications required under SAS 115 • Communications required under SAS 114 • Other Recommendations • Legislative and Informational Items A complete copy of the Audited Financial Statements&Findings is on file in the Corporate Secretary's office. Fiscal Year 2011 Audited Financial Statements General Manager asked that the resolution for the approval of the 2011 Fiscal Year Audited Financial Statements be forward to the full Board for consideration. On motion by Commissioner Plummer, seconded by Commissioner Louney, to move the proposed resolution for the Adoption of the 2011 Fiscal Year Audited Financial Statements to the full board for consideration and approval. Action: Motion Carried Required Annual Purchasing Report General Manager Lark presented the Commissioners with the 2011 Purchasing Report. Other None There being no further business, the meeting adjourned at 6:50 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee i Iwniae..layk.Nunettirwn. MINUTES BOARD OF WATER AND LIGHT PENSION FUND TRUSTEES'ANNUAL MEETING Tuesday, September 13, 2011 Present: Trustees Margaret Bossenbery, Dennis M. Louney, Anthony McCloud, Marilyn Plummer, David Price, Tracy Thomas, Cynthia Ward and Sandra Zerkle. Absent: None Staff Present: General Manager J. Peter Lark,Assistant General Manager and Chief Financial Officer Susan Devon, Director of Internal Audit Phil Perkins, Manager of Finance and Planning Bill Aldrich, Marilyn Montgomery, Senior Treasury Analyst, Scott Taylor, CPA, CTP, Supervisor, Treasury& Budgeting, Regular Board Mtg. September 27,2011 Page 6 of 11 Executive Financial Assistant Walter Middlebrook III, Shoni Galatian, Office Supervisor of Corporate Administration and M. Denise Griffin, Corporate Secretary Consultants Present: From Merrill Lynch: Michael Muirhead Associate Financial Advisor, Keith Azar, Senior Financial Advisor and Marie Vanerian, First Vice President. From ICMA: Sandra Rouse-Thames, Retirement Plan Specialist, John McCann, Regional Vice-President and Tim True, Director of Strategic Relations The Secretary declared a quorum. Chairperson Zerkle called the meeting to order at 6:55 p.m. On Motion by Trustee Louney and Seconded by Trustee Bossenbery to approve the minutes of the September 14, 2011 Pension Fund Trustees'Annual Meeting Minutes. Action: Motion Carried Public Comments There were no public comments. FY2011 Financial Information General Manager J. Peter Lark introduced Susan Devon,Assistant General Manager and Chief Financial Officer. Ms. Devon, Assistant General Manager and Chief Financial Officer provided an overview of the different Pension Plans. She stated that the packet the Board received is broken down into plan areas, the Defined Benefit Plan, the Defined Contribution Plan and the Post Retirement Benefit Plan. Each of the sections in the packet includes general information consisting of the Plan and Trust documents, the Audited Financial Statements, the Actuarial Study Report, the Investment Policy Statement for each Plan and the Investment Results. Defined Benefit Plan ■ Defined Benefits The Defined Benefit(DB) Plan was closed to new employees hired after December 31, 1996. There are currently 457 retirees and beneficiaries, 13 terminated employees with vested benefits and 37 current employees in this plan for a total of 507 Plan participants. There were 18 total retirees with DB benefits during 2010. The reduction in the total number of participants is a result of the death of 18 retirees. There were also 4 retirements. There are 37 DB active employees with an average age of 56.7 and an average of 28.3 years of service. 0 Defined Contributions Regular Board Mtg. September 27,2011 Page 7 of 11 The Defined Contribution Plan was established as a replacement for the Defined Benefit Plan. At that time there were 602 active employees who elected to switch to the new DC Plan. There are currently 885 participants in the DC Plan including 673 active participants. Active participants range in the age of 35 to over 65. ■ Retiree Benefit Plan There are a total of 1,172 participants in the Postretirement Benefit Plan of which 696 were active employees. Performance ■ Defined Benefit Susan Devon, Assistant General Manager and Chief Financial Officer stated with respect to the DB Fund Performance: Investment income in the plan was $17.5 Million compared to$8.6 Million last year. Plan assets increased to $82.09 Million in 2011 from $73.3 Million in 2010. The funded ration for the DB plan was 115%which means assets exceed our liabilities by 15%. This is a notable improvement. ■ Defined Contribution Investment income in the DC Plan was $23 Million compared to $14 Million last year. Plan assets increased to $136 Million in 2011 from$115 million in 2010. Post-Retirement Plan The Postretirement Plan had $19 Million in investment compared to $6 Million last year. Plan assets increased from $77 Million at June 30, 2010 to $104 Million at June 30, 2011, an increase of $27 Million. The funded ratio for the Postretirement Plan was 30% in 2010 and has increased to 39% in 2011. Marie Vanerian, First Vice President at Merrill Lynch provided an update on the current market conditions. Tim True, ICMA Director of Strategic Relations and the ICMA Staff provided updates on Education Activity. Mr. True also presented General Manager Lark with the 2011 Communicator Award that the Board received for their efforts in implementing payroll deduction for Roth IRA's. General Manager Lark respectfully asks that the Board forward the proposed resolution for the acceptance of the 2011 Audited Financial Statements to the full Board for consideration. Moved by Trustee Louney, seconded by Trustee Price, to approve the following resolution and forward to the full Board for consideration: Regular Board Mtg. September 27,2011 Page 8 of 11 RESOLUTION ACCEPTANCE OF 2011 AUDITED FINANCIAL STATEMENTS FOR DEFINED BENEFIT PENSION PLAN, DEFINED CONTRIBUTION PENSION PLAN, AND RETIREE BENEFIT PLAN VEBA Resolved, that the Corporate Secretary receive and place on file the Defined Benefit, Defined Contribution, and Retiree Benefit Pension reports presented during the Pension Trustee Meeting. -------------------------- Staff comments All three Plans received clean audit reports. -------------------- Action: Motion Carried On Motion by Trustee Price and Seconded by Trustee Ward with no further business the Pension Fund Trustees meeting adjourned at 7:25 p.m. Action: Motion Carried Submitted by: M. Denise Griffin Corporate Secretary MANAGER'S RECOMMENDATIONS General Manager Lark respectfully requested that the Board of Commissioners approve of the following resolutions. RESOLUTION#2011-09-01 FISCAL YEAR 2011 AUDITED FINANCIAL STATEMENTS RESOLVED, That the fiscal year 2011 Audited Financial Statements for the Board of Water and Light have been reviewed and is hereby accepted as presented. FURTHER RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2011 Audited Financial Statements of the Board of Water and Light and the report on auditing procedures with the State Treasurer as required by the Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended) no later than December 31, 2011. FURTHER RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2011 Audited Financial Statements of the Board of Water and Light with the City of Lansing no later than October 15, 2011. Motion by Commissioner Thomas seconded by Commissioner Bossenberty, to approve the resolution for the 2011 Audited Financial Statements. Action: Carried Unanimously ------------------------ Regular Board Mtg. September 27,2011 Page 9 of 11 RESOLUTION #2011-09-02 ACCEPTANCE OF 2011 AUDITED FINANCIAL STATEMENTS FOR THE DEFINED BENEFIT PLAN, DEFINED CONTRIBUTION PENSION PLAN,AND RETIREE BENEFIT PLAN (VEBA) Resolved,that the Corporate Secretary received and placed on file the Defined Benefit, Defined Contribution, and Retiree Benefit Pension reports presented during the Pension Trustee Meeting. --------------------------------- Staff comments: All three Plans received clean audit reports. Motion by Commissioner Bossenbery and Seconded by Commissioner Price, to approve the resolution for the for the acceptance of the 2011 Audited Financial Statements for the Defined Benefit Plan, Defined Contribution Pension Plan, and Retiree Benefit Plan. Action: Carried unanimously UNFINISHED BUSINESS There was no Unfinished Business NEW BUSINESS There was no New Business RESOLUTIONS RESOLUTION#2011-09-03 IN N 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 Water& Light's Board of Commissioners are hereby set for calendar year 2011 as follows, unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings: 2012 Board of Water and Light Commissioners Regular Board Meeting Schedule Tuesday January 24 Regular Board Mtg. September 27,2011 Page 10 of 11 Tuesday March 27 Tuesday May 22 Tuesday July 24 Tuesday September 25 Tuesday November 13 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 City Pulse the week of January 1, 2012. Motion by Commissioner Bossenbery seconded by Commissioner Price, to approve the schedule for the 2012 Board Meeting Dates. Action: Carried unanimously MANAGER'S REMARKS Check Presentations General Manager Lark and Board Chair Sandra Zerkle presented the following Chili Cook-Off proceeds checks to: —Lansing Police Chief Teresa Szymanski in the amount of$6000 for the H.O.P.E. Scholarship Program. Chief Szymanski thanked General Manager Lark, the Board of Commissioners and the Board of Water& Light employees for supporting the H.O.P.E. Scholarship program. —Sparrow Foundation Development Director Michelle Reiner, in the amount of$6000.00. Ms. Reiner thanked the Board of Water& Light on behalf of the Sparrow Foundation. Ms. Reiner stated that she appreciates the partnership with the Board of Water& Light. —Executive Director of the Impression Five Science Center Erik Larson, in the amount of$6,000 for the Adopt-A River program. Mr. Larson thanked the Board of Water& Light for the check and for its continued support. General Manager Lark and Board Chair Zerkle also presented Ivan Love, Executive Director of Capital Area Community Services (CACS) with a check in the amount of$4,000.00, the proceeds from the 5K Walk that was held in August. —Ivan Love thanked the Board of Water& Light and General Manager Lark for the"Pennies for Power" initiative that donates to their organization every year to assist low-income families with their utility payments. Updates General Manager Lark provided an updated on the REO Town Plant. He stated that the project is on time and on budget, He also provided an update on the"Be Well for Life" program. He stated Regular Board Mtg. September 27,2011 Page 11 of 11 for the first 6 months of the program the average weight loss was 10.1 lbs. and the BM reduction was 4.1%. COMMISSIONERS' REMARKS Commissioner Cynthia Ward acknowledged and commended the Board of Water& Light employees also known as the"Water Bolts"who participated in the Dragon Boat Race over the Labor Day weekend. It was a great event and a great show of teamwork and team spirit. Commissioner Tracy Thomas thanked the"Be Well for Life"organizers. He also thanked the 1st Step Board of Water& Light representatives that came to Waverly High School to inform student of the program. He welcomed new Commissioner Anthony McCloud. Commissioner Dennis M. Louney commended all the Board of Water& Light employees for their effort and hard work to make the"Pennies for Power" initiative successful. He welcomed new Commissioner Anthony McCloud. Commissioner Marilyn Plummer welcomed new Commissioner Anthony McCloud. PUBLIC COMMENTS There was no public comment. EXCUSED ABSENCE None ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner Price the meeting adjourned at 6:00 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes fled with Lansing City Clerk October 4,2011 BOARD OF WATER AND LIGHT 1232 Haco Drive-Lansing, Michigan 1 r�n September 27, 2011 - 5:30 p.m. BOARD MEETING AGENDA - (A n 1. Roll Call Js 2. Pledge of Allegiance 3. Approval of Minutes a. Regular Board Meeting of July 26, 2011 4. Public Comments 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. 5. Communications a. Letters regarding use of BWL's floodplain for Woldumar Nature Center's Run-A-Munk 5 & 10K Walk/Run (Jeff Hicks, Delta Township Trustee; Joan Bauer, State Rep.; Rick Jones, State Senator) b. Electronic mail from Anderson Water Systems regarding Reo Town Plant c. Letter of appreciation to BWL employees from the Board of Commissioners d. Letters in response to the request for use of the BWL's floodplain for Woldumar Nature Center's Run-A-Munk 5 & 10K Walk/Run 6. Committee Reports a. Committee of the Whole Meeting Report (September 13, 2011) — Dennis M. Louney, Chair b. Finance Committee Meeting Report (September 13, 2011) — Marge Bossenbery, Chair C. Pension Fund Trustees Meeting Report (September 13, 2011) —Sandra Zerkle, Trustee 7. Manager's Recommendations a. Approve 2012 Board Meeting Dates b. Approve FY 2011 Financial Audit C. Approve FY 2011 Pension and Post Employment Benefit Plan Audited Financial Statements 8. Unfinished Business 9. New Business 10. Resolutions 11. Manager's Remarks 12. Commissioners' Remarks 13. Motion of Excused Absence 14. Public Comments Members of the public are welcome to speak to the Board on any Board of Water and Light subject. 15. Adjournment PreliminaryMinules To 9eApproved on September 27,2011 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT July 26, 2011 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Dennis Louney, Marilyn Plummer, David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle, Absent: Commissioner Anthony McCloud, The Corporate Secretary declared a quorum present. Commissioner Tracy Thomas led the Pledge of Allegiance. General Manager Lark provided an update on the accident at the Wise Road Water Treatment Plant. APPROVAL OF MINUTES Motion by Commissioner Ward seconded by Commissioner Price to approve the minutes of the Regular Board Meeting minutes of May 24, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment, ------------------ COMMUNICATIONS a. Thank You Note from Susan Lark. Received and Place on File Regular Board Mtg. July 26,2011 Page 2 of 13 COMMITTEE REPORTS COMMITTEE OF THE WHOLE July 12, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, July 12, 2011. Acting Chair Zerkle called the Committee of the Whole meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Tracy Thomas, Cynthia Ward, Marilyn Plummer and Sandra Zerkle. Absent: Commissioners Frank Lain, Dennis M. Louney and David Price Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery, seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of May 10, 2011. Action: Motion Carried Energy Optimization Plan General Manager Lark stated that the Energy Optimization Plan is mandated by Public Act(PA) 295 in which it requires utilities to review and update their plans every couple of years. The Energy Optimization Plan Update is reviewed by the Public Service Commission (PSC) and the public must be invited to comment on the update, in which the Board of Water& Light will do so through the Connections Newsletter, The Board of Commissioners' have to be made aware of the update and that public comment is being solicited for comment. The comment period will start August 1, 2011. Sue Warren, Manager of Marketing and Business Strategies, stated that PA 295 was passed in October of 2008 and it requires an evaluation, update and public comment of every utility's Energy Optimization Plan biennially. Ms. Warren stated that the Optimization Plan will be posted to the Board of Water& Light's website and that the August edition of the Connections Newsletter will contain a section for solicitation of public comments. Comments can be sent by internet or mail and the pubic can also meet with George Stojic, Executive Director of Strategic Planning the week of August 22nd. This Optimization Plan is being submitted for the years 2012 through 2014. Ms. Warren also provided information on Board of Water& Light's recent addition of a PILOT Energy Optimization Program for small businesses, new construction and residential walk through audit program. Regular Board Mtg. July 26,2011 Page 3 of 13 Commissioner Cynthia Ward stated that she recently availed herself of the refrigerator recycling program and the website was very user-friendly and the people involved were timely and professional. REO Town Update Susan Devon, Project Director of the REO Town Cogeneration Plant, provided an update on the following progress of the plant construction: ■ Christman Co, has been selected as the construction manager ■ Project Labor Agreement with the Michigan Building Construction and Carpenters Trades for work on the plant and office building has been entered into. ■ Meeting scheduled with Board of Water& Light, the construction manager, trade contactors, union representatives and MIOSHA with respect to elevating the level of safety for the building of the plant itself, ■ Entered major equipment contacts for the Combustion Turbine, Steam Turbine and the Boiler ■ The Steam Vault has been substantially completed on site ■ Piling work will be starting sometime in mid September or early October. ■ Entered into a contract with Consumers Energy Co. for the Natural Gas Pipeline Ms. Devon stated that the Cogeneration Plant construction project is both on schedule and on budget. Commissioner Tracy Thomas congratulated General Manager Lark on his presentation at the REO Cogeneration Plant Groundbreaking ceremony. F-RIB Update George Stojic, Executive Director of Strategic Planning and Development, provided an update on the RFP to serve MSU's Facility for Rare Isotope Beams (FRIB) project. Mr. Stojic stated that the main question is by which option the Board of Water& Light can serve both the FRIB and MSU, either by retail or wholesale. Other Marilyn Plummer thanked General Manager Lark, the Board of Water& Light and the Board of Commissioners on behalf of the Juneteenth Committee for all of their support for the Juneteenth Celebration. She gave a special thanks to Angie Goodman of the Board of Water& Light for her assistance with showcasing the Electric Volt vehicle. It was a great event. General Manager Lark provided the Board of Commissioner with a hard copy of the final official statement for the bond rating for the REO Town Cogeneration Plant, Mr. Lark also provided the Commissioners with a copy of the Final Pricing Book with respect to the$250,000,000 Utility System Revenue Bonds, Series 2011 A. Commissioner Sandra Zerkle thanked Margaret Bossenbery, Susan Devon and Dick Peffley for the picnic that they recently hosted. Regular Board Mtg. July 26,2011 Page 4 of 13 Excused Absence Motion by Commissioner Thomas seconded by Commissioner Plummer to excuse Commissioners Louney and Price from tonight's meeting. Action: Carried Unanimous Adiourn On Motion by Commissioner Bossenbery, seconded by Commissioner Plummer, the meeting adjourned at 6:11 p.m. Respectfully Submitted Sandra Zerkle, Acting Chair Committee of the Whole FINANCE COMMITTEE July 12, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:30 p.m. on Tuesday, July 12, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were also present. Absent: Commissioner Dennis M. Louney Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Thomas to approve the Finance Committee meeting minutes of May 10, 2011. Action: Carried unanimously. External Audit Communication to the Board Presented by Shaun Krick CPA Plante &Moran General Manager Lark introduced external auditor Shaun Krick, Manager with Plante Moran (P&M) who reviewed and presented the Statement on Auditing Standards (SAS) 114 External Audit Report. Mr. Krick said that the SAS 114 involves communication between the external auditors and the Governing Board. It requires that the external auditor report and update Governance with anticipated audit plans and any significant issue or findings that are reasonably anticipated during the year as well as anticipated ways to solve those issues and gather information from the Board pertaining to areas that may be of concern regarding an increased risk of material misstatement in financial records. Regular Board Mtg. July 26,2011 Page 5 of 13 The scope of the Audit that will be performed is to express an opinion of the financial statements of the Board as well as each of the pension plans. There will be a management letter or significant deficiency (SAS 115) letter if that is required at the end of the engagement as well as having another meeting in September to discuss the results of the audit procedures. Mr. Krick reviewed the following: ■ Audit Process ■ Auditor Responsibility ■ Management Responsibility ■ Testing Phases ■ Required Discussion Points ■ Significant Risk Misstatement ■ Responses to Significant Risk Misstatement ■ Additional Required Discussion Points ■ Communication to those Charged with Governance In response to the required discussion points mentioned on page#12 of the presentation, the Finance Committee indicated that the Board should maintain the current policy designating Susan Devon, Assistant General Manager and Chief Financial Officer as the appropriate contact person for any Audit questions. Mr. Krick asked the Board of Commissioners if there were any areas of concern that warrant attention or additional procedures. In response to Mr. Krick's question the Board of Commissioners stated no areas of concern. 401 A Defined Contribution Plan General Manager Lark stated that the 401A Plan is the pension plan that the Board operates. Whenever any changes takes place with the plan the Administration is required to come before the Board of Commissioners for approval of the change and that is the purpose of what is being done today. Although there is no actual change, because the Board does not make contributions to 401 Plans until the employee has been with the Board for 6 months, that part of the plan stating that the employer contributions to this 401A Plan will take place only following 6 months from the date of hire is being reduced to writing. General Manager Lark asked that the resolution associated with this 401A Plan be approved and forwarded to the full Board for its consideration. On motion by Commissioner Plummer, seconded by Commissioner Thomas, to forward to the full Board the proposed resolution to consider the 401A Defined Contribution Plan to clarify the timing of the employer contribution to the Plan. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 6 of 13 North Lansing Dam Rppair General Manager Lark stated the North Lansing Dam is inspected for safety every 4 years and in 2007 it was determined that repairs were needed in order to maintain safety. The estimated cost for the Dam repair was $689,000, Later it was determined that the repair work should be performed without lowering the river level; and as a result of that determination, it was decided that a cofferdam would be used to complete the repair project. Because of the cofferdam, coupled with higher bids being submitted to do the repair jobs, the estimated cost of repairs increased significantly. The new estimate of the repair work is $1.2 Million. The Board requires anything over 15% higher than budget be brought back to the governing body for approval. After dialogue and a short question and answer session amid the Commissioners and General Manager Lark, a motion was made. On motion by Commissioner Plummer, seconded by Commissioner Thomas, to forward to the full Board the proposed resolution approving a revised budget for the North Lansing Dam Repair. Action: Carried unanimously Internal Audit Status Report Finance Chair Bossenbery reviewed the memorandum that was included in the packet regarding updates on the Internal Auditor functions. Finance Chair Bossenbery stated that the vacant position of Associate Internal Auditor Perez Goree would not be filled at this time. Also the contract for the Internal Auditing augmentation services contract has been awarded to Charles Moore & Associates. With those changes in effect a revised internal auditor status report will be presented by Internal Auditor Perkins at tonight's meeting. Internal Audit Status Report Internal Auditor Phil Perkins presented an overview of Internal Auditors Status Report that included: FY 2012 Audit Planning • Risk analysis was performed by Internal Auditor and management of all auditable activities at BWL. • Use of Warren, Gorham & Lamont (WG&L, recognized tax, accounting and audit research firm) risk assessment factors and weighted scoring tailored to BWL environment. • Identified top potential audits per discussions and assessment. • Goal is to complete as many high-quality, risk-based audits as possible in FY2012, • The risk score and other factors were used to identify activities for potential audit. Other factors used: • Balanced audit coverage between financial and operational areas. • Audits of activities that had Risk/Scoping assessments performed in prior years. • Available audit resources were compared to estimated hours required to complete the selected audits. • Available Resources: • Director of Internal Audit 1,800 hrs* • Contracted Internal Audit Services 1,200 hrs** Total 3,000 hrs * Based on 85% of total annual available hrs to allow for holidays, vacation, training, etc. ** Based on recent history and available budget. Regular Board Mtg. July 26,2011 Page 7 of 13 FY 2012 Recommended Audit Plan Planned Audits & Estimated Hours Audit Title FY2012 Hours Payroll Management 600 Procurement Management 500 Billing Processes & Controls 500 Capital Assets Processes & Controls 600 Subtotal 2,200 IT Governance/High Level Risk Assessment 300 Quick Fraud Prevention Audits (Cash Counts) 200 Consulting Engagements/Other* 300 Total 3,000 *Time permitting, an audit of Records Retention Management will be added. Finance Chair Bossenbery stated also to help with the Audit process the Enterprise Risk Management Group that is headed by Mike Collins is available for assistance. She also stated if Mr. Perkins feels that he does need any assistance to please bring the issue back to the Board. Chair Zerkle stated that she would like a report in 6 month on the progress of Mr. Perkins Audit process. On motion by Commissioner Plummer, seconded by Commissioner Thomas the Finance Committee accepted the Audit Plan presented by the Director of Internal Audit. Action: Motion Carried Excused Absence On motion by Commissioner Thomas, seconded by Commissioner Thomas, to excuse the absence of Commissioner Dennis M. Louney. Action: Carried unanimously. Other None, Adjourn On Motion by Commissioner Plummer, seconded by Commissioner Thomas, the meeting adjourned at 7:30 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee Regular Board Mtg. July 26,2011 Page 8 of 13 NOMINATING COMMITTEE MINUTES July 19, 2011 The Nominating Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 12:15 p.m. on Tuesday, July 19, 2011. Nominating Committee Chair Tracy Thomas called the meeting to order and asked the Corporate Secretary to call the roll. The following committee members were present: Commissioners Marge Bossenbery, Marilyn Plummer, Tracy Thomas, Cynthia Ward and Alternate Committee Member David Price. Also in attendance was Commissioner Dennis M. Louney. Absent: None Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Ward to approve the Nominating Committee meeting minutes of July 20, 2010. Action: Motion Carried Public Comment There were no public comments. Nominate Board Officer Candidates for FY 2011-2012 The Nominating Committee met to review the Commissioner Survey responses for consideration of board officer nominations for the Board of Water & Light Board of Commissioner's Chair and Vice Chair for fiscal year 2011-2012. Upon discussing and reviewing the submitted survey forms Nominating Chair Tracy Thomas opened the floor for nominations. Motion by Commissioner Plummer, seconded by Commissioner by Bossenbery, to nominate Sandra Zerkle to serve as the Chair for the 2011-2012 FY. Action: Motion Carried Motion by Commissioner Ward, seconded by Commissioner by Bossenbery, to nominate Dennis M. Louney to serve as the Vice Chair for the 2011-2012 FY. Action: Motion Carried Nominating Committee Chair Thomas stated the Nominating Committee's recommended slate of offices will be presented to the full Board for consideration at the Regular Board meeting of July 26, 2011. The recommended slate of officer candidates for FY 2011-2012 will consist of: Chair: Sandra Zerkle Vice Chair: Dennis Louney Vice Chair Louney stated that he appreciates the faith that the Board has in him and appreciates the opportunity to serve in this capacity. There being no further business, the meeting adjourned at 12:20 p.m. Respectfully submitted, Tracy Thomas, Chair Nominating Committee Regular Board Mtg. July 26,2011 Page 9 of 13 MANAGER'S RECOMMENDATIONS General Manager Lark said no where in the ICMA Adoption Agreement is it stated that an employee may not receive 401A Defined contributions until the employee has been with the Board of Water& Light six months. The proposed resolution will allow for this language to be put in writing and eliminate any ambiguities. He stated that this addition to the language does not change the substance of the plan. General Manager Lark respectfully requested that the Board approve this 401A Defined Contribution Plan adjustment. RESOLUTION #2011-07-01 401A DEFINED CONTRIBUTION PLAN RESOLVED, that the Board of Commissioners hereby amends the ICMA Adoption Agreement to clarify that employer contributions will occur following six (6) months from the date of hire. FURTHER RESOLVED, that the Board of Commissioners hereby amends the ICMA Governmental Money Purchase Plan &Trust in accordance with Post-EGTRRA Legislative and Regulatory Changes. FURTHER RESOLVED, that the Chair is hereby authorized to execute the above referenced documents on behalf of the Board of Commissioners. Staff Comments.- The BWL has always made pension contributions following 6 months from the date of hire for eligible plan participants. This clarification eliminates any potential ambiguity. The Post-EGTRRA Legislative and Regulatory changes require updates to all plan documents that offer pension benefits of any form. The Board of Commissioners approved a similar compliance update for the Defined Benefit Plan. Despite the compliance language updates, the BWL's Defined Contribution plan has not changed in substance or form. All benefits remain intact. Motion by Commissioner Bossenbery seconded by Commissioner Louney, to approve the resolution for the 401A ICMA Plan Revisions. Action: Carried Unanimously ------------------------ General Manager Lark stated that the State of Michigan requires that a safety inspection be performed on the North Lansing Dam every 4 years. After doing an inspection it was determined that certain adjustments had to be made to the Dam to put it in a safe position. The initial project was budgeted for$689,000 and the current estimated budget is $1.2 Million. With there being an appreciable amount due to the use of the cofferdam and the addition of the gate seals improvements the budget matter must be brought to the attention and approved by the Board of Commissioners. He respectfully asked that the Board approve the new budget for this project. Regular Board Mtg. July 26,2011 Page 10 of 13 RESOLUTION#2011-07-02 RESOLUTION FOR NORTH LANSING DAM REPAIR WHEREAS, the original project scope and budget estimate for the North Lansing Dam Repair Project (NLD) was developed from a report prepared by Stantec Consultants in 2009 which anticipated the lowering of the river to complete the required concrete pier repair work and the filling of scour holes downstream of the dam apron; and WHEREAS, this resulted in an initial project budget amount of$689,000; and WHEREAS, during the final development of the design and construction documents, discussions with BWL operations personnel and affected users of the Grand River required a cofferdam to be constructed across the majority of the river to maintain the river level during construction and additional work for adjustment or replacement of the existing dam gate seals. BE IT RESOLVED, that based on the actual bid prices received, the budget for the North Lansing Dam Repair Project be increased from $689,000 to $1,200,000 to accommodate the increased scope of work and associated construction costs. Staff Comments The State of Michigan requires that a safety inspection be performed on the NLD every 4 years. Following the safety inspection in 2007 it was determined that repairs were required to maintain the safety of the dam. The major items requiring repair were removal and replacement of the concrete piers that hold the dam gates and the filling of a large scour hole at the downstream apron of the dam. When the initial estimate was prepared it was anticipated that the work could be performed by lowering the river level at the dam by four feet. During the design of the repair and discussions with the City of Lansing Parks Department regarding use of the Burchard Park for access to the dam for the repair work, it was discovered that several business and river users would be adversely impacted by the extended lowering of the river level throughout the downtown area. Therefore, it was determined that the work should be performed without lowering the river level, requiring an increase in the amount of cofferdam work. Additionally, since the initial consultant report and estimate was prepared it was determined that the existing gate seals are leaking and require either adjustment or replacement. Since this seal work would require dewatering the area around the concrete piers that hold the gates, it was determined that the seal adjustment or replacement should occur at the same time as the concrete pier repairs. The increased scope of work and construction costs are reflected in the bid prices received. Motion by Commissioner Ward seconded by Commissioner Price, to approve the resolution for the revised budget for the North Lansing Dam repair. Action: Carried unanimously UNFINISHED BUSINESS There was no Unfinished Business Regular Board Mtg. July 26,2011 Page 11 of 13 NEW BUSINESS The Nominating Committee recommended a slate of officers for the 2011-2012 Fiscal Year. The slate of officers included Commissioner Zerkle as the Chair and Commissioner Louney as the Vice Chair. Chair Zerkle asked if there were any nominations from the floor for Chair and Vice Chair. There were no nominations from the floor. Moved by Commissioner Price and supported by Commissioner Bossenbery that nominations be closed and that a unanimous ballot be cast for the nominated slate of Officers with Sandra Zerkle as Chair and Dennis M. Louney as Vice Chair. Action: Carried unanimously. Chair Zerkle and Vice Chair Louney stated their appreciation for their reappointments. They both stated that it is an honor to serve in their positions as an Officer of the Board. Chair Zerkle stated that the Executive Committee consists of the Chair, Vice Chair and Past Chair as well as another member of the Board. With no Past Chair presently on the Board there a two positions on the Executive Committee to make it complete. Motion by Commissioner Plummer and seconded by Commissioner Ward to nominate Margaret Bossenbery and Tracy Thomas as the final members of the Executive Committee. Action: Motion Carried RESOLUTIONS RESOLUTION#2011-07-03 Appointment 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 1 st of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of Director and General Manager for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: J. Peter Lark, Director and General Manager FURTHER RESOLVED, That Mr, Lark shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2016, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Thomas seconded by Commissioner Ward, to reappoint J. Peter Lark to the Charter position of Director and General Manager for fiscal year 2011-2012. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 12 of 13 RESOLUTION#2011-07-04 Appointment of the Charter Position of Internal Auditor 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 appoints the following individual to the Charter position of Internal Auditor for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: Philip Perkins, Internal Auditor FURTHER RESOLVED, That Mr. Perkins shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2013, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Price seconded by Commissioner Ward, to reappoint Philip Perkins to the Charter position of Internal Auditor for fiscal year 2011-2012. Action: Carried unanimously RESOLUTION#2011-07-05 Appointment 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 appoints the following individual to the Charter position of Corporate Secretary for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: M. Denise Griffin, Corporate Secretary FURTHER RESOLVED, That Ms. M. Denise Griffin shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2013, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Ward seconded by Commissioner Plummer, to reappoint M. Denise Griffin to the Charter position of Corporate Secretary for fiscal year 2011-2012. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 13 of 13 MANAGER'S REMARKS General Manager Lark stated during the last 10 to 14 days the Board of Water& Light has had a difficult time meeting the load due to the extreme heat; however with the herculean efforts of the BWL's employees to keep our units running, and not buying power elsewhere, we have done quite well. The BWL has come close to it peak. General Manager Lark stated that the Board of Water& Light has moved more water in the last 10- to 14 days then ever before. Chilled Water is also doing well in that a 4th Chiller has been in use for many days. He applauded the BWL workers for their hard work. General Manager Lark reminded everyone that the 5K Run/Walk is Saturday, August 13th. There are 350 runners registered for the run/walk, which is the largest number of participants for this event. Last year this event raised $3000.00 for the Pennies for Power program which is administrated by CACS for those who can not afford to pay for their utilities. The Chili-Cook-Off also made approximately an $18,000 profit this year in which the proceeds will be distributed to HOPE Scholars, Sparrow Foundation and the Impressions 5 Museum. Also the IBEW and BWL had its annual Golf Outing and raised $3000.00 just recently for Pennies for Power and the City Rescue Mission. COMMISSIONERS' REMARKS Commissioner Thomas congratulated Sandra Zerkle and Dennis Louney on their reappointments as Chair and Vice Chair of the Board. He also congratulated the 3 Board Appointed employees on their reappointments. PUBLIC COMMENTS Robert J. Schmidt III of Holt, MI spoke about the BWL's 11t STEP program and requested the Board consider an alternative means of issuing 1st STEP Scholarship funds that his was son was eligible for through Lansing Community College, In response to Mr. Schmidt's comments Chair Zerkle stated that she had received an email regarding this matter. She stated that she empathizes with the situation however this scholarship is specific to LCC for tuition and fees. General Manager Lark stated that he has all the documents that show that the BWL has issued a check for$1500.00 to the LCC Foundation for scholarship distribution to the 1st participants. In the email submitted by Mr. Schmidt III, it was requested that the $1500.00 be put on a debit card and be used for living funds. The scholarship terms of this program have always been that the money would be used for tuition and fees. EXCUSED ABSENCE On motion by Commissioner Price, seconded by Commissioner Bossenbery to excuse Commissioner McCloud from tonight's meeting. ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner Price the meeting adjourned at 6:10 p.m. M. Denise Griffin, Corporate Secretary Preliminary Minutes filed with Lansing City Clerk on August 4,2011 DELTA T O W N S H I P July 18, 2011 Lansing Board of Water and Light Attn.: Board of Commissioners 1232 Haeo Drive Lansing, Michigan 48912 RE: Woldumar Nature Center's Run-a-Munk 5& 10K Walk/Run Dear Board of Commissioners: I write regarding Woldumar Nature Center's above described event. It is my understanding that several years ago BWL.granted permission to Woldumar to lead guided hikes on BWUs 40 acre floodplain, located to the west and south of Woldumar's property. In doing so,the BWL helped Woldumar expand its programming and become an even greater educational center to the residents of Delta Township and surrounding communities. As you likely know, Woldumar is one of Delta Township's greatest assets, attracting some 40.000 visitors from across mid-Michigan each year.Your ongoing support helps ensure that Woldumar will be available to carry on its mission for future generations. I thank you for your continued support. This year Woldumar will add a half-marathon trail run as part of its annual Run-a-Munk event. This event raises nearly $10,000 for Woldumar's programs and is critical to the organization's continued existence. I understand that in order to achieve the full 13.1 m iies required for the half-marathon,Woldumar will need to utilize BWL's floodplain area. Because Woldumar's use would not be a "guided hike', Wolduialar is requesting permission fedm BWL'to use its property for the race. Recognizing that:the event . is critical to Woldumar's success, Delta Township was pleased to lend its support and grant permission to Woldumar to extend its trail run onto the Township's Anderson Park property. I respectfully request BWL's favorable consideration of Woldumar's request to likewise extend its trail run onto BWL's floodplain property. Please do not hesitate to contact me if I can be of any ass' 'auce in your review of WoldumaCs request. Thank you. Sinc of cks D to Township Trustee JCHItiv cc: Lori McSweency, Executive Director, Woldumar Nature Center '?710 west Sa,rinaNv Highway•Delta Township,Michigan 489I"-9712 hal'oranation Ph: 5??-323-8500•Fax: 517-323-8599 www.deltami.gov In 68TH DISTRICT HOUSE OF REPRESENTATAIES COMMITTEE: STATE CAPITOL APPROPRIATIONS P.O� BOA: 30014 STATE OF MICHIGAN SUBCOMMITTEES: LANSING, MI 48909-7514 EDUCATION (MVC) PHONE: (517) 373-0826 JOA V AVER HIGHER EDUCATION (MVC! FAX: 1517? 373-5658 STATE REPRESENTATIVE COMMUNITY HEALTH E-MAIL: joanbauercu?house.mi.gov CAPITOL COMMI€T'EE (MVC) July 26, 2011 L--BWL Roard of Commissioners __.... 1232 Elaco Dr. Lansing,MI 48912 Dear LBWL Commissioners, On behalf of your neighbor, Woldumar Nature Center, I encourage you to grant the center permission to use the LBWL's floodplain as a part of their half marathon fundraiser. I appreciate that you haven generously allowed the center to use your land for guided tours and believe that using your land in this new capacity would be a great benefit to the Woldumar Nature Center. As you know, The Woldumar Nature Center has played an integral role in educating Michiganders about the natural environment and about the importance of utilizing services like the amenities offered by BWL in an environmentally smart way. Supporting Woldumar by allowing them to use your land would be a great way to support the education of your customers. Thank you for your time and please do not hesitate to contact me if there is any way my office can assist you. incere y, .loan Bauer State Representative, 68th District RICK JONES THE SE;'VFE COMMmEES: 2,, P DISTRICT �({,�v JUDICIARY, CHAIR F.C. q0X 3G03i., STATE OF �d#.CHIGA,N REDISTRICTING, VICE-CHAIR LANSNG, M1 4y9Q9'753u REGULATORY REPCRM, VIC CHAIR PHONE. 1517i 373 3;47 E.:JERGY AND TECHNOLOGY TOLL-"iEE: ic58! 301,2124 HEAL1`4 MOLLY PAX: ._... 372;.nN9 snnrhonesissenate.rriiehigan.g;w August 2, 2011 LBWL Board Commissioners Lansing Board of Water and Light 1232 Haco Drive Lansing. MI 48912 Re: Letter of Support Encouraging permission of floodplain use for purpose of Woldumar Nature Center half marathon trial run Dear LBWL Commissioners, I feel that it is incredibly important to voice my support for Woldumar Nature Center and its continuing efforts of educating the people of the area about the natural environment.This beneficial organization is a staple in our community that provides enlightening benefits to the youth, as well as the entire public. As you may know, Woldumar is a 501 (c)3 non-profit organization and is one of the few nature centers left in the nation that is not affiliated with a municipality.The organization relies heavily on charitable donations and fundraisers; one of the most successful being the recent annual Woldumar's Run-a-Muck 5& 10K Walk/Run, which has grown expediently over the past three years and has raised nearly$10,000 for Woldumar's programs. Woldumar has proposed a planned half marathon trial run in conjunction with this year's Run-a-Muck Walk/Run, and has received permission from Delta Township to expand the fundraiser to Anderson Park. In order to meet the guidelines of a 13.1 mile course for the half marathon,Woldumar would need permission to access the . LBWL's floodplain. Due to the fact that this will not be a guided hike. as the LBWL gave permission for use of the floodplain to Woldumar for guided hikes once before, this would be a public marathon and Woldumar would appreciate the approval for the propitiation before continuing on with more planning for this event. I ask on behalf of Woldumar Nature Preserve, and strongly support, that the LBWL Board of Commissioners grant permission for this benevolent organization to utilize the floodplain for this fundraiser, and in continuing the success of bringing natural environment education to the people of this great community, Thank you, Rick Jones State Senator 24th District Pkg'e I of I M. Denise Griffin From: Anonymous@lbwl.org Sent: Monday, August 29, 2011 2:49 PM To: M. Denise Griffin Subject: Reo Town Cogen plant -"'* DO NOT REPLY TO THIS EMAIL This message was received from the external Commissioner web page (the sender was anonymous). Email submitted at 8/29/2011 2:48:33 PM From hftp://www.lbwl.com Attention: Commissioner Zerkle Subject: Reo Town Cogen plant Message: We supply water treatment equipment (www.d--gremont- tech n olog ies.com)specifi-.al ly for boiler feed water. is there a contact we can speak to regarding the new cogen plant you are building? Regards Peter MIDGLEY Industrial Regional Business Manager ANDERSON WATER SYSTEMS, INC. 160 King Street West, 2nd Floor DUNDAS - ONTARIO - L9H 1V4 - CANADA DL : +1 905-627-6503 FAX : +1 905-627-2381 MOB : +1 289-244-7600 www.degremont- technologies.com 8/29/2011 September 20, 2011 On behalf of the entire Board of Commissioners, I want to thank the entire BWL team for its incredible response to the July 26 chemical accident at our Wise Road Water Plant. As you probably know, the accident couldn't have happened at a worse time. Hot, dry weather had our two water plants operating at near capacity. We never get to choose a time of crisis. How we respond, though, is a matter entirely of our choosing. It's no exaggeration to say that how our team responded was awe-inspiring. We were able to keep the Wise Road plant operating during and after the accident, and continued to deliver safe drinking water to our customers. There are so many employees deserving of our thanks. They stepped up, pulled together, and prevailed throughout this crisis. During the early days of the crisis, some of you stayed overnight at the plant, sleeping in your vehicles. Some of you cancelled vacation plans. Some of you worked weeks without a day off. Without you, we could not have risen to this daunting challenge. Your dedication and hard work deserve the gratitude of all BWL customers. On behalf of the Board of Commissioners, I thank you. Sincerely, Sandra Zerkle Chair Board of Commissioners Lansing Board of Watea and Light 1232 H.aco Di Lansing, MI 48912 Hometown People. Hometown Rower. September 16, 2611 Representative Joan Bauer State Capitol P.O. Box 30014 Lansing, Mi. 48909-7514 Dear Representative Bauer: Thank you for your letter of July 26th sent on behalf of Woldumar Nature Center. Your letter supports the Nature Center's request to extend its half marathon onto the Lansing Board of Water & Light's property, which is located immediately adjacent to Woldumar. You will be pleased to learn that the Board of Water & Light has granted Woldumar's request. The Board of Water & Light recognizes that Woldumar Nature Center has played a unique and important role in providing educational opportunities to residents of the greater Lansing community, especially on the importance of protecting the rnid-Michigan environment. As a good neighbor, the Board of Commissioners is happy to support Woldumar's fund raising effort. Again, thank you for your lefiter. Sandra Zerkle Chairperson Board of Commissioners Board of Water& Light 1232 Haco Drive Pa Box 13007 Lansing,Mi 48901-3007 517-702-6000 www.lbwl.com ' Lansing Board of Water and flight 123211aco Drive Lansing, ICI 48912 Hometown People. Hometown Power: September 16, 2011 Jeff Hicks, Delta Township Trustee 7710 W. Saginaw Highway Lansing, Ml 48917 Dear Trustee Hicks, Thank you for your letter of July 18t" sent on behalf of Woldumar Nature Center. Your letter supports the Nature Center's request to extend its half marathon onto the Lansing Board of Water & Light's property, which is located immediately adjacent to Woldumar. You will be pleased to learn that the Board of Water & Light has granted Woldumar's request. The Board of Water & Light shares your belief that Woldumar Nature Center is one of Delta Township's greatest assets. In fact, Woldumar is enjoyed by and provides services for the entire Lansing community. As a good neighbor, the Board of Commissioners is happy to support Woldumar's fund raising effort. Again, thank you for your letter. ,y Sandra Zerkle Chairperson Board of Commissioners Board of Water & Light 1232 Haco Drive PO Box 13007 1 Lansing,MI 48901-3007 1 517-702-6000 www.lbwf.com 7 Lansing Board of Water and Light 1232 I1aco Drive Lansing, All 48912 Hometown People. Hometown Power. September 16, 2011 Senator Rick Jones State Capitol P.O. Box 30036 Lansing, MI. 48909-7536 Dear Senator Jones: Thank you for your letter of August 2nd sent on behalf of Woldumar Nature Center. Your letter supports the Nature Center's request to extend its half marathon onto the Lansing Board of Water & Light's property, which is located immediately adjacent to Woldumar. You will be pleased to learn that the Board of Water & Light has granted Woldumar's request. The Board of Water & Light recognizes that Woldumar Nature Center has played a unique and important role in providing educational opportunities on mid-Michigan's natural environment to residents of the greater Lansing community. As a good neighbor, the Board of Commissioners is happy to support Woldumar's fund raising effort. Again, thank you for your letter. Sandra Zerkle Chairperson Board of Commissioners Board of Water & Light 1232 Haco©rive PO Box 13007 1 Lansing,Ali! 48001-3007 517-702-6000 wwtwkwl.corn ' COMMITTEE OF THE WHOLE September 13, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, September 13, 2011. Committee Chair Louney called the Committee of the Whole meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Dennis M. Louney, Anthony McCloud, Marilyn Plummer, Tracy Thomas, David Price, Cynthia Ward and Sandra Zerkle. Committee Chair Louney welcomed the new Commissioner, Anthony McCloud. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Thomas, seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of July 12, 2011. Action: Motion Carried Plant Updates Y Wise Road Water Plant General Manager Lark stated that there was an accident at the Wise Road Water Plant on July 26t". There was an error made by both the Board of Water and Light operator and the first time chemical (chlorine) deliverer, who was a contractor. The.chemical was placed in the wrong holding tank, therefore causing a chemical release that heavily damaged the inside of the plant. General Manager Lark thanked all of the Board of Water & Light Departments that were involved with the handling of the situation. He stated that it was gratifying to see all of the Board of Water & Light employees mobilize so quickly to serve customers and monitor both the air and water quality, of which there was no problem with either. General Manager Lark stated that the water plant was fully insured and that this accident will have a positive effect on rates because of instead of having to spend $4 Million over six years, as budgeted, we will spend $500,000, which is the deductible amount. In fact, the Board of Water & Light will investigate the possibility of bringing legal action against the chlorine contractor to recover the $500,000 deductable. Dick Peffley, Executive Director of Water Operations and Special Projects, provided some history of the Wise Road Water Plant. He said the Wise Road water plant was a fully automated plant that produces 10 millions gallons of water a day and it serves south Lansing and the Holt area. C.O.W.Meeting September 13,2011 Page 2 of 2 Mr. Peffley said when the two chemicals of chlorine and fluoride mixed it caused a gas cloud that aggressively attacked the equipment and caused extensive damage on the inside of the plant. The exterior wall structure seems to have survived the event with minimal damage and we plan to reuse the shell of the building; however we will be replacing much of the equipment inside and installing computer upgrade systems, which is a major redesign. The estimated time to rebuild this state of the art water facility is two years. Mr. Peffley thanked the Administration and his support staff, particularly Tim Hyde and Scott Hamelink for all of their support and assistance with keeping the Wise Road Plant operating. ■ REO Town Co-Generation Plant General Manager Lark stated that the REO Town Plant is on time and on budget. He stated that within the next month you will start to see a lot more activity at the site. Susan Devon, Assistant General Manager and Project Manager for the REO Town Plant provided a brief update on the REO Town Plant which included minor plant design changes and major equipment purchases. 2012 Regular Board Meeting Resolution Motion by Commissioner Price, seconded by Commissioner Plummer, to forward the proposed resolution for the 2011 Board Meeting Schedule to the full board for approval. Action: Motion Carried Other None Absence None Adjourn On Motion by Commissioner Price, seconded by Commissioner Plummer, the meeting adjourned at 6:20 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE September 13, 2011 The Finance Committee of t he Board of Water and Light met at the Executive Offices, Lansing beginning at 6:25 p.m. on Tuesday, September 13, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretar y to call the roll. T he f ollowing members were present: Commissioners Margaret Bo ssenbery, Dennis Louney, Marilyn Plummer and David Price. Alternate committee members Tracy Thomas and Sandra Zerkle were present. Also present was Board member Cynthia Ward and Anthony McCloud. Absent: None. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Price to approve the Finance Committee meeting minutes of July 12, 2011. Action: Carried unanimously. FY 2011 Audited Financial Statements — Plante Moran General Manager J. Peter Lark introduc ed Doug [as Rober, Managing Partner with Plante & Moran (P&M). Douglas Rober stated that P&M is appreciative of the opportunity to work with the Board of Water & Light. Mr. Rober intr oduced Shaun Krick, CPA Associate. Mr. Rober stated that there were no difficu Ities with management and no s ignificant finding during the audit. Shaun Krick, CPA Associat e with P&M, reviewed t he audit process of the financial statements of the Enterprise Fund and Pens ion Fiduciary Funds of the Board of Water and Light (BWL) for fisc al year ending 2011 as well as the management letter. The following communications were included in the report: • Communications required under SAS 115 • Communications required under SAS 114 • Other Recommendations • Legislative and Informational Items A complete copy of the Audited Financial Statements & Findings is on file in the Corporate Secretary's office. Finance Committee September 13,2011 Page 2 of 2 Fiscal Year 2011 Audited Financial Statements General Manager asked that the resolution for the approval of the 2011 Fiscal Year Audited Financial Statements be forward to the full Board for consideration. On motion by Commissioner Plummer, seconded by Commissioner Louney, to move the proposed resolution for the Adoption of the 2011 Fiscal Year Audited Financial Statements to the full board for consideration and approval. Action: Motion Carried Required Annual Purchasing Report General Manager Lark presented the Commissioners with the 2011 Purchasing Report. Other None There being no further business, the meeting adjourned at 6:50 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee o �04 �.. MINUTES BOARD OF WATER AND LIGHT PENSION FUND TRUSTEES' ANNUAL MEETING Tuesday, September 13, 2011 Present: Trustees Margaret Bossenbery, Dennis M. Louney, Anthony McCloud, Marilyn Plummer, David Price, Tracy Thomas, Cynthia Ward and Sandra Zerkle. Absent: None Staff Present: General Manager J. Peter Lark, Assistant General Manager and Chief Financial Officer Susan Devon, Director of Internal Audit Phil Perkins, Manager of Finance and Planning Bill Aldrich, Marilyn Montgomery, Senior Treasury Analyst, Scott Taylor, CPA, CTP, Supervisor, Treasury & Budgeting, Executive Financial Assistant Walter Middlebrook III, Shoni Galatian, Office Supervisor of Corporate Administration and M. Denise Griffin, Corporate Secretary Consultants Present: From Merrill Lynch: Michael Muirhead Associate Financial Advisor, Keith Azar, Senior Financial Advisor and Marie Vanerian, First Vice President. From ICMA: Sandra Rouse- Thames, Retirement Plan Specialist, John McCann, Regional Vice-President and Tim True, Director of Strategic Relations The Secretary declared a quorum. Chairperson Zerkle called the meeting to order at 6:55 p.m. On Motion by Trustee Louney and Seconded by Trustee Bossenbery to approve the minutes of the September 14, 2011 Pension Fund Trustees' Annual Meeting Minutes. Action: Motion Carried Public Comments There were no public comments. FY2011 Financial Information General Manager J. Peter Lark introduced Susan Devon, Assistant General Manager and Chief Financial Officer. Pension Fund 1 rustee Septe t ber 13, 20 11 'age 2 of 4 Ms. Devon, Assistant General Manager and Chief Financial Officer provided an overview of the different Pension Plans. She stated that the packet the Board received is broken down into plan areas, the Defined Benefit Plan, the Defined Contribution Plan and the Post Retirement Benefit Plan. Each of the sections in the packet includes general information consisting of the Plan and Trust documents, the Audited Financial Statements, the Actuarial Study Report, the Investment Policy Statement for each Plan and the Investment Results. Defined Benefit Plan ■ Defined Benefits The Defined Benefit (DB) Plan was closed to new employees hired after December 31, 1996. There are currently 457 retirees and beneficiaries, 13 terminated employees with vested benefits and 37 current employees in this plan for a total of 507 Plan participants. There were 18 total retirees with DB benefits during 2010. The reduction in the total number of participants is a result of the death of 18 retirees. There were also 4 retirements. There are 37 DB active employees with an average age of 56.7 and an average of 28.3 years of service. ■ Defined Contributions The Defined Contribution Plan was established as a replacement for the Defined Benefit Plan. At that time there were 602 active employees who elected to switch to the new DC Plan. There are currently 885 participants in the DC Plan including 673 active participants. Active participants range in the age of 35 to over 65. ■ Retiree Benefit Plan There are a total of 1,172 participants in the Postretirement Benefit Plan of which 696 were active employees. Performance ■ Defined Benefit Susan Devon, Assistant General Manager and Chief Financial Officer stated with respect to the DB Fund Performance: Investment income in the plan was $17.5 Million compared to $8.6 Million last year. Plan assets increased to $82.09 Million in 2011 from $73.3 Million in 2010. Pension Fund Trustee September 13, 2011 Pacae 3 of 4 The funded ration for the DB plan was 115% which means assets exceed our liabilities by 15%. This is a notable improvement. ■ Defined Contribution Investment income in the DC Plan was $23 Million compared to $14 Million last year. Plan assets increased to $136 Million in 2011 from $115 million in 2010. Post-Retirement Plan The Postretirement Plan had $19 Million in investment compared to $6 Million last year. Plan assets increased from $77 Million at June 30, 2010 to $104 Million at June 30, 2011, an increase of$27 Million. The funded ratio for the Postretirement Plan was 30% in 2010 and has increased to 39% in 2011. Marie Vanerian, First Vice President at Merrill Lynch provided an update on the current market conditions. Tim True, ICMA Director of Strategic Relations and the ICMA Staff provided updates on Education Activity. Mr. True also presented General Manager Lark with the 2011 Communicator Award that the Board received for their efforts in implementing payroll deduction for Roth IRA's. General Manager Lark respectfully asks that the Board forward the proposed resolution for the acceptance of the 2011 Audited Financial Statements to the full Board for consideration. Moved by Trustee Louney, seconded by Trustee Price, to approve the following resolution and forward to the full Board for consideration.- RESOLUTION ACCEPTANCE OF 2011 AUDITED FINANCIAL STATEMENTS FOR DEFINED BENEFIT.PENSION PLAN, DEFINED CONTRIBUTION PENSION PLAN AND RETIREE BENEFIT PLAN (VEBA) Resolved, that the Corporate Secretary receive and place on file the Defined Benefit, Defined Contribution, and Retiree Benefit Pension reports presented during the Pension Trustee Meeting. -------------------------- Staff comments: All three Plans received clean audit reports. Pension Fund Trustee September 13, 2011 Page 4 of 4 -------------------- Action: Motion Carried On Motion by Trustee Price and Seconded by Trustee Ward with no further business the Pension Fund Trustees meeting adjourned at 7:25 p.m. Action: Motion Carried Submitted by: M. Denise Griffin Corporate Secretary t 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 Water & Light's Board of Commissioners are hereby set for calendar year 2011 as follows, unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings: 2012 Board of Water and Light Commissioners Regular Board Meeting Schedule Tuesday January 24 Tuesday March 27 Tuesday May 22 Tuesday July 24 Tuesday September 25 Tuesday November 13 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 City Pulse the week of January 1, 2012. ----------------- RESOLUTION FISCAL YEAR 2011 AUDITED FINANCIAL STATEMENTS RESOLVED, That the fiscal year 2011 Audited Financial Statements for the Board of Water and Light have been reviewed and is hereby accepted as presented. FURTHER RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2011 Audited Financial Statements of the Board of Water and Light and the report on auditing procedures with the State Treasurer as required by the Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended) no later than December 31, 2011. FURTHER RESOLVED, That the Corporate Secretary is hereby directed to file a copy of the fiscal year 2011 Audited Financial Statements of the Board of Water and Light with the City of Lansing no later than October 15, 2011. RESOLUTION ACCEPTANCE OF 2011 AUDITED FINANCIAL STATEMENTS FOR THE DEFINED BENEFIT PLAN, DEFINED CONTRIBUTION PENSION PLAN, AND RETIREE BENEFIT PLAN (VEBA) Resolved, that the Corporate Secretary received and placed on file the Defined Benefit, Defined Contribution, and Retiree Benefit Pension reports presented during the Pension Trustee Meeting. ---------------------------------- Staff comments: All three Plans received clean audit reports. Noninwn 0.wpe.Nuiva.iPox. PUBLIC NOTICE Regular meetings of the Board of Water and Light Commissioners of the City of Lansing, Michigan, are scheduled to be held at 5:30 p.m., at the Board of Water and Light Administrative Offices, Boardroom, 1232 Haco Drive, Lansing, Michigan on the following dates: 2011 Board of Water and Light Commissioners Regular Board Meeting Schedule Tuesday January 25 Tuesday March 22 Tuesday May 24 Tuesday July 26 Tuesday September 27 Tuesday November 15 In the event a special meeting or rescheduled meeting is held, a notice will be posted at the Customer Service Lobby, 1232 Haco Drive, Lansing, Michigan, at least 18 hours prior to the time of the meeting. Posted by order of the Board of Water and Light Commissioners in conformity with Act 267, PA 1976. BOARD OF WATER AND LIGHT M. Denise Griffin, Corporate Secretary (517) 702-6033 Preliminary Minutes To Be Approved on September 27,2011 =, MINUTES OF THE BOARD OF COMMISSIONERS' MEETING t�J !JJ LANSING BOARD OF WATER AND LIGHT C-D 11i C- July 26, 2011 C=:, G..; fhe Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Dennis Louney, Marilyn Plummer, David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Absent: Commissioner Anthony McCloud. The Corporate Secretary declared a quorum present, Commissioner Tracy Thomas led the Pledge of Allegiance. General Manager Lark provided an update on the accident at the Wise Road Water Treatment Plant. APPROVAL OF MINUTES Motion by Commissioner Ward seconded by Commissioner Price to approve the minutes of the Regular Board Meeting minutes of May 24, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment, ------------------ COMMUNICATIONS a. Thank You Note from Susan Lark, Received and Place on File Regular Board Mtg, July 26,2011 Page 2 of 13 COMMITTEE REPORTS COMMITTEE OF THE WHOLE July 12, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, July 12, 2011. Acting Chair Zerkle called the Committee of the Whole meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Tracy Thomas, Cynthia Ward, Marilyn Plummer and Sandra Zerkle. Absent: Commissioners Frank Lain, Dennis M. Louney and David Price Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery, seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of May 10, 2011. Action: Motion Carried Energy Optimization Plan General Manager Lark stated that the Energy Optimization Plan is mandated by Public Act (PA) 295 in which it requires utilities to review and update their plans every couple of years, The Energy Optimization Plan Update is reviewed by the Public Service Commission (PSC) and the public must be invited to comment on the update, in which the Board of Water & Light will do so through the Connections Newsletter. The Board of Commissioners' have to be made aware of the update and that public comment is being solicited for comment. The comment period will start August 1, 2011, Sue Warren, Manager of Marketing and Business Strategies, stated that PA 295 was passed in October of 2008 and it requires an evaluation, update and public comment of every utility's Energy Optimization Plan biennially, Ms. Warren stated that the Optimization Plan will be posted to the Board of Water& Light's website and that the August edition of the Connections Newsletter will contain a section for solicitation of public comments. Comments can be sent by internet or mail and the pubic can also meet with George Stojic, Executive Director of Strategic Planning the week of August 22nd. This Optimization Plan is being submitted for the years 2012 through 2014. Ms, Warren also provided information on Board of Water& Light's recent addition of a PILOT Energy Optimization Program for small businesses, new construction and residential walk through audit program. Regular Board Mtg. July 26,2011 Page 3 of 13 Commissioner Cynthia Ward stated that she recently availed herself of the refrigerator recycling program and the website was very user-friendly and the people involved were timely and professional, REO Town Update Susan Devon, Project Director of the REO Town Cogeneration Plant, provided an update on the following progress of the plant construction: • Christman Co. has been selected as the construction manager ■ Project Labor Agreement with the Michigan Building Construction and Carpenters Trades for work on the plant and office building has been entered into. ® Meeting scheduled with Board of Water& Light, the construction manager, trade contactors, union representatives and MIOSHA with respect to elevating the level of safety for the building of the plant itself. • Entered major equipment contacts for the Combustion Turbine, Steam Turbine and the Boiler ■ The Steam Vault has been substantially completed on site • Piling work will be starting sometime in mid September or early October. • Entered into a contract with Consumers Energy Co. for the Natural Gas Pipeline Ms. Devon stated that the Cogeneration Plant construction project is both on schedule and on budget. Commissioner Tracy Thomas congratulated General Manager Lark on his presentation at the REO Cogeneration Plant Groundbreaking ceremony. F-RIB Update George Stojic, Executive Director of Strategic Planning and Development, provided an update on the RFP to serve MSU's Facility for Rare Isotope Beams (FRIB) project. Mr. Stojic stated that the main question is by which option the Board of Water& Light can serve both the FRIB and MSU, either by retail or wholesale. Other Marilyn Plummer thanked General Manager Lark, the Board of Water& Light and the Board of Commissioners on behalf of the Juneteenth Committee for all of their support for the Juneteenth Celebration. She gave a special thanks to Angie Goodman of the Board of Water & Light for her assistance with showcasing the Electric Volt vehicle. It was a great event. General Manager Lark provided the Board of Commissioner with a hard copy of the final official statement for the bond rating for the REO Town Cogeneration Plant, Mr. Lark also provided the Commissioners with a copy of the Final Pricing Book with respect to the $250,000,000 Utility System Revenue Bonds, Series 2011 A. Commissioner Sandra Zerkle thanked Margaret Bossenbery, Susan Devon and Dick Peffley for the picnic that they recently hosted. Regular Board Mtg. July 26,2011 Page 4 of 13 Excused Absence Motion by Commissioner Thomas seconded by Commissioner Plummer to excuse Commissioners Louney and Price from tonight's meeting, Action: Carried Unanimous Adiourn On Motion by Commissioner Bossenbery, seconded by Commissioner Plummer, the meeting adjourned at 6:11 p.m, Respectfully Submitted Sandra Zerkle, Acting Chair Committee of the Whole FINANCE COMMITTEE July 12, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:30 p.m. on Tuesday, July 12, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were also present, Absent: Commissioner Dennis M. Louney Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Thomas to approve the Finance Committee meeting minutes of May 10, 2011. Action: Carried unanimously. External Audit Communication to the Board Presented by Shaun Krick, CPA, Plante& Moran General Manager Lark introduced external auditor Shaun Krick, Manager with Plante Moran (P&M) who reviewed and presented the Statement on Auditing Standards (SAS) 114 External Audit Report. Mr. Krick said that the SAS 114 involves communication between the external auditors and the Governing Board. It requires that the external auditor report and update Governance with anticipated audit plans and any significant issue or findings that are reasonably anticipated during the year as well as anticipated ways to solve those issues and gather information from the Board pertaining to areas that may be of concern regarding an increased risk of material misstatement in financial records. Regular Board Mtg. July 26,2011 Page 5 of 13 The scope of the Audit that will be performed is to express an opinion of the financial statements of the Board as well as each of the pension plans. There will be a management letter or significant deficiency (SAS 115) letter if that is required at the end of the engagement as well as having another meeting in September to discuss the results of the audit procedures, Mr. Krick reviewed the following: ■ Audit Process ■ Auditor Responsibility ■ Management Responsibility ■ Testing Phases ■ Required Discussion Points ■ Significant Risk Misstatement ■ Responses to Significant Risk Misstatement ■ Additional Required Discussion Points ■ Communication to those Charged with Governance In response to the required discussion points mentioned on page#12 of the presentation, the Finance Committee indicated that the Board should maintain the current policy designating Susan Devon, Assistant General Manager and Chief Financial Officer as the appropriate contact person for any Audit questions. Mr. Krick asked the Board of Commissioners if there were any areas of concern that warrant attention or additional procedures. In response to Mr, Krick's question the Board of Commissioners stated no areas of concern. 401 A Defined Contribution Plan General Manager Lark stated that the 401A Plan is the pension plan that the Board operates. Whenever any changes takes place with the plan the Administration is required to come before the Board of Commissioners for approval of the change and that is the purpose of what is being done today. Although there is no actual change, because the Board does not make contributions to 401 Plans until the employee has been with the Board for 6 months, that part of the plan stating that the employer contributions to this 401A Plan will take place only following 6 months from the date of hire is being reduced to writing. General Manager Lark asked that the resolution associated with this 401A Plan be approved and forwarded to the full Board for its consideration. On motion by Commissioner Plummer, seconded by Commissioner Thomas, to forward to the full Board the proposed resolution to consider the 401A Defined Contribution Plan to clarify the timing of the employer contribution to the Plan. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 6 of 13 North Lansing Dam Repair General Manager Lark stated the North Lansing Dam is inspected for safety every 4 years and in 2007 it was determined that repairs were needed in order to maintain safety. The estimated cost for the Dam repair was $689,000. Later it was determined that the repair work should be performed without lowering the river level; and as a result of that determination, it was decided that a cofferdam would be used to complete the repair project. Because of the cofferdam, coupled with higher bids being submitted to do the repair jobs, the estimated cost of repairs increased significantly. The new estimate of the repair work is $1.2 Million. The Board requires anything over 15% higher than budget be brought back to the governing body for approval. After dialogue and a short question and answer session amid the Commissioners and General Manager Lark, a motion was made. On motion by Commissioner Plummer, seconded by Commissioner Thomas, to forward to the full Board the proposed resolution approving a revised budget for the North Lansing Dam Repair. Action: Carried unanimously Internal Audit Status Report Finance Chair Bossenbery reviewed the memorandum that was included in the packet regarding updates on the Internal Auditor functions. Finance Chair Bossenbery stated that the vacant position of Associate Internal Auditor Perez Goree would not be filled at this time. Also the contract for the Internal Auditing augmentation services contract has been awarded to Charles Moore & Associates, With those changes in effect a revised internal auditor status report will be presented by Internal Auditor Perkins at tonight's meeting. Internal Audit Status Report Internal Auditor Phil Perkins presented an overview of Internal Auditors Status Report that included: FY 2012 Audit Planning • Risk analysis was performed by Internal Auditor and management of all auditable activities at BWL. • Use of Warren, Gorham & Lamont (WG&L, recognized tax, accounting and audit research firm) risk assessment factors and weighted scoring tailored to BWL environment. • Identified top potential audits per discussions and assessment. • Goal is to complete as many high-quality, risk-based audits as possible in FY2012. • The risk score and other factors were used to identify activities for potential audit. Other factors used: • Balanced audit coverage between financial and operational areas. • Audits of activities that had Risk/Scoping assessments performed in prior years. • Available audit resources were compared to estimated hours required to complete the selected audits. • Available Resources: • Director of Internal Audit 1,800 hrs* • Contracted Internal Audit Services 1,200 hrs** Total 3,000 hrs * Based on 85% of total annual available hrs to allow for holidays, vacation, training, etc. ** Based on recent history and available budget. Regular Board Mtg. July 26,2011 Page 7 of 13 FY 2012 Recommended Audit Plan Planned Audits & Estimated Hours Audit Title FY2012 Hours Payroll Management 600 Procurement Management 500 Billing Processes & Controls 500 Capital Assets Processes & Controls 600 Subtotal 2,200 IT Governance/High Level Risk Assessment 300 Quick Fraud Prevention Audits (Cash Counts) 200 Consulting Engagements/Other* 300 Total 3,000 *Time permitting, an audit of Records Retention Management will be added. Finance Chair Bossenbery stated also to help with the Audit process the Enterprise Risk Management Group that is headed by Mike Collins is available for assistance. She also stated if Mr. Perkins feels that he does need any assistance to please bring the issue back to the Board. Chair Zerkle stated that she would like a report in 6 month on the progress of Mr, Perkins Audit process. On motion by Commissioner Plummer, seconded by Commissioner Thomas the Finance Committee accepted the Audit Plan presented by the Director of Internal Audit, Action: Motion Carried Excused Absence On motion by Commissioner Thomas, seconded by Commissioner Thomas, to excuse the absence of Commissioner Dennis M, Louney. Action: Carried unanimously. Other None, Adiourn On Motion by Commissioner Plummer, seconded by Commissioner Thomas, the meeting adjourned at 7:30 p,m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee Regular Board Mtg. July 26,2011 Page 8 of 13 NOMINATING COMMITTEE MINUTES July 19, 2011 The Nominating Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 12:15 p.m. on Tuesday, July 19, 2011. Nominating Committee Chair Tracy Thomas called the meeting to order and asked the Corporate Secretary to call the roll. The following committee members were present: Commissioners Marge Bossenbery, Marilyn Plummer, Tracy Thomas, Cynthia Ward and Alternate Committee Member David Price. Also in attendance was Commissioner Dennis M. Louney. Absent: None Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Ward to approve the Nominating Committee meeting minutes of July 20, 2010. Action: Motion Carried Public Comment There were no public comments. Nominate Board Officer Candidates for FY 2011-2012 The Nominating Committee met to review the Commissioner Survey responses for consideration of board officer nominations for the Board of Water & Light Board of Commissioner's Chair and Vice Chair for fiscal year 2011-2012. Upon discussing and reviewing the submitted survey forms Nominating Chair Tracy Thomas opened the floor for nominations. Motion by Commissioner Plummer, seconded by Commissioner by Bossenbery, to nominate Sandra Zerkle to serve as the Chair for the 2011-2012 FY, Action: Motion Carried Motion by Commissioner Ward, seconded by Commissioner by Bossenbery, to nominate Dennis M. Louney to serve as the Vice Chair for the 2011-2012 FY. Action: Motion Carried Nominating Committee Chair Thomas stated the Nominating Committee's recommended slate of offices will be presented to the full Board for consideration at the Regular Board meeting of July 26, 2011. The recommended slate of officer candidates for FY 2011-2012 will consist of: Chair: Sandra Zerkle Vice Chair: Dennis Louney Vice Chair Louney stated that he appreciates the faith that the Board has in him and appreciates the opportunity to serve in this capacity. There being no further business, the meeting adjourned at 12:20 p.m. Respectfully submitted, Tracy Thomas, Chair Nominating Committee Regular Board Mtg. July 26,2011 Page 9 of 13 MANAGER'S RECOMMENDATIONS General Manager Lark said no where in the ICMA Adoption Agreement is it stated that an employee may not receive 401A Defined contributions until the employee has been with the Board of Water& Light six months. The proposed resolution will allow for this language to be put in writing and eliminate any ambiguities. He stated that this addition to the language does not change the substance of the plan. General Manager Lark respectfully requested that the Board approve this 401A Defined Contribution Plan adjustment. RESOLUTION#2011-07-01 401A DEFINED CONTRIBUTION PLAN RESOLVED, that the Board of Commissioners hereby amends the ICMA Adoption Agreement to clarify that employer contributions will occur following six (6) months from the date of hire. FURTHER RESOLVED, that the Board of Commissioners hereby amends the ICMA Governmental Money Purchase Plan &Trust in accordance with Post-EGTRRA Legislative and Regulatory Changes. FURTHER RESOLVED, that the Chair is hereby authorized to execute the above referenced documents on behalf of the Board of Commissioners. Staff Comments.- The BWL has always made pension contributions following 6 months from the date of hire for eligible plan participants. This clarification eliminates any potential ambiguity. The Post-EGTRRA Legislative and Regulatory changes require updates to all plan documents that offer pension benefits of any form. The Board of Commissioners approved a similar compliance update for the Defined Benefit Plan. Despite the compliance language updates, the BWL's Defined Contribution plan has not changed in substance or form. All benefits remain intact. Motion by Commissioner Bossenbery seconded by Commissioner Louney, to approve the resolution for the 401A ICMA Plan Revisions, Action; Carried Unanimously ----------------------- General Manager Lark stated that the State of Michigan requires that a safety inspection be performed on the North Lansing Dam every 4 years, After doing an inspection it was determined that certain adjustments had to be made to the Dam to put it in a safe position. The initial project was budgeted for$689,000 and the current estimated budget is $1.2 Million. With there being an appreciable amount due to the use of the cofferdam and the addition of the gate seals improvements the budget matter must be brought to the attention and approved by the Board of Commissioners. He respectfully asked that the Board approve the new budget for this project. Regular Board Mtg. July 26,2011 Page 10 of 13 RESOLUTION#2011=07-02 RESOLUTION FOR NORTH LANSING DAM REPAIR WHEREAS, the original project scope and budget estimate for the North Lansing Dam Repair Project (NLD) was developed from a report prepared by Stantec Consultants in 2009 which anticipated the lowering of the river to complete the required concrete pier repair work and the filling of scour holes downstream of the dam apron; and WHEREAS, this resulted in an initial project budget amount of$689,000; and WHEREAS, during the final development of the design and construction documents, discussions with BWL operations personnel and affected users of the Grand River required a cofferdam to be constructed across the majority of the river to maintain the river level during construction and additional work for adjustment or replacement of the existing dam gate seals. BE IT RESOLVED, that based on the actual bid prices received, the budget for the North Lansing Dam Repair Project be increased from $689,000 to $1,200,000 to accommodate the increased scope of work and associated construction costs. Staff Comments The State of Michigan requires that a safety inspection be performed on the NLD every 4 years. Following the safety inspection in 2007 it was determined that repairs were required to maintain the safety of the dam, The major items requiring repair were removal and replacement of the concrete piers that hold the dam gates and the filling of a large scour hole at the downstream apron of the dam. When the initial estimate was prepared it was anticipated that the work could be performed by lowering the river level at the dam by four feet. During the design of the repair and discussions with the City of Lansing Parks Department regarding use of the Burchard Park for access to the dam for the repair work, it was discovered that several business and river users would be adversely impacted by the extended lowering of the river level throughout the downtown area, Therefore, it was determined that the work should be performed without lowering the river level, requiring an increase in the amount of cofferdam work. Additionally, since the initial consultant report and estimate was prepared it was determined that the existing gate seals are leaking and require either adjustment or replacement. Since this seal work would require dewatering the area around the concrete piers that hold the gates, it was determined that the seal adjustment or replacement should occur at the same time as the concrete pier repairs. The increased scope of work and construction costs are reflected in the bid prices received. Motion by Commissioner Ward seconded by Commissioner Price, to approve the resolution for the revised budget for the North Lansing Dam repair. Action: Carried unanimously UNFINISHED BUSINESS There was no Unfinished Business Regular Board Mtg. July 26,2011 Page 11 of 13 NEW BUSINESS The Nominating Committee recommended a slate of officers for the 2011-2012 Fiscal Year. The slate of officers included Commissioner Zerkle as the Chair and Commissioner Louney as the Vice Chair. Chair Zerkle asked if there were any nominations from the floor for Chair and Vice Chair, There were no nominations from the floor. Moved by Commissioner Price and supported by Commissioner Bossenbery that nominations be closed and that a unanimous ballot be cast for the nominated slate of Officers with Sandra Zerkle as Chair and Dennis M. Louney as Vice Chair. Action: Carried unanimously. Chair Zerkle and Vice Chair Louney stated their appreciation for their reappointments, They both stated that it is an honor to serve in their positions as an Officer of the Board. Chair Zerkle stated that the Executive Committee consists of the Chair, Vice Chair and Past Chair as well as another member of the Board. With no Past Chair presently on the Board there a two positions on the Executive Committee to make it complete. Motion by Commissioner Plummer and seconded by Commissioner Ward to nominate Margaret Bossenbery and Tracy Thomas as the final members of the Executive Committee. Action: Motion Carried RESOLUTIONS RESOLUTION#2011-07-03 Appointment 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 1 st of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of Director and General Manager for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: J. Peter Lark, Director and General Manager FURTHER RESOLVED, That Mr. Lark shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2016, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Thomas seconded by Commissioner Ward, to reappoint J. Peter Lark to the Charter position of Director and General Manager for fiscal year 2011-2012. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 12 of 13 RESOLUTION120,11-07=04 Appointment of the Charter Position of Internal Auditor 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 appoints the following individual to the Charter position of Internal Auditor for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: Philip Perkins, Internal Auditor FURTHER RESOLVED, That Mr. Perkins shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2013, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Price seconded by Commissioner Ward, to reappoint Philip Perkins to the Charter position of Internal Auditor for fiscal year 2011-2012. Action: Carried unanimously RESOLUTION#201:1-07-05 Appointment 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 1 st of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of Corporate Secretary for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: M. Denise Griffin, Corporate Secretary FURTHER RESOLVED, That Ms. M, Denise Griffin shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2013, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Ward seconded by Commissioner Plummer, to reappoint M. Denise Griffin to the Charter position of Corporate Secretary for fiscal year 2011-2012. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 13 of 13 MANAGER'S REMARKS General Manager Lark stated during the last 10 to 14 days the Board of Water& Light has had a difficult time meeting the load due to the extreme heat; however with the herculean efforts of the BWL's employees to keep our units running, and not buying power elsewhere, we have done quite well, The BWL has come close to it peak. General Manager Lark stated that the Board of Water& Light has moved more water in the last 10- to 14 days then ever before. Chilled Water is also doing well in that a 4th Chiller has been in use for many days, He applauded the BWL workers for their hard work. General Manager Lark reminded everyone that the 5K Run/Walk is Saturday, August 13th. There are 350 runners registered for the run/walk, which is the largest number of participants for this event, Last year this event raised $3000.00 for the Pennies for Power program which is administrated by CACS for those who can not afford to pay for their utilities. The Chili-Cook-Off also made approximately an $18,000 profit this year in which the proceeds will be distributed to HOPE Scholars, Sparrow Foundation and the Impressions 5 Museum, Also the IBEW and BWL had its annual Golf Outing and raised $3000.00 just recently for Pennies for Power and the City Rescue Mission, COMMISSIONERS' REMARKS Commissioner Thomas congratulated Sandra Zerkle and Dennis Louney on their reappointments as Chair and Vice Chair of the Board. He also congratulated the 3 Board Appointed employees on their reappointments. PUBLIC COMMENTS Robert J, Schmidt III of Holt, MI spoke about the BWL's 1st STEP program and requested the Board consider an alternative means of issuing 1st STEP Scholarship funds that his was son was eligible for through Lansing Community College. In response to Mr. Schmidt's comments Chair Zerkle stated that she had received an email regarding this matter. She stated that she empathizes with the situation however this scholarship is specific to LCC for tuition and fees. General Manager Lark stated that he has all the documents that show that the BWL has issued a check for$1500.00 to the LCC Foundation for scholarship distribution to the 1st participants. In the email submitted by Mr. Schmidt III, it was requested that the $1500.00 be put on a debit card and be used for living funds. The scholarship terms of this program have always been that the money would be used for tuition and fees. EXCUSED ABSENCE On motion by Commissioner Price, seconded by Commissioner Bossenbery to excuse Commissioner McCloud from tonight's meeting, ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner Price the meeting adjourned at 6:10 p.m. M. Denise Griffin, Corporate Secretary Preliminary Minutes fled wilh Lansing City Clerk on August 4,2011 Approved by the Board: July 26,2011 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT ; .^ w May 24, 2011 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis Louney, Marilyn Plummer David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Absent: Commissioner Lain. The Corporate Secretary declared a quorum present. Commissioner Ward led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Plummer seconded by Commissioner Price to approve the minutes of the Regular Board Meeting minutes of March 2, 2011 and the Special Board Meeting minutes of May 10, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment, ------------------ COMMUNICATIONS None Regular Board Mtg. May 24,2011 Page 2 or 35 COMMITTEE REPORTS COMMITTEE OF THE WHOLE April 12, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, April 12, 2011. Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenber Frank Lain Dennis M. Loune 9 Y, Y,;., Tracy Thomas, Cynthia Ward, Marilyn Plummer and Sandra Zerkle. ` Absent: Commissioner David Price c Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of March 8, 2011. Action: Carried unanimously. Be Well for Life General Manager Lark introduced Michael Flowers, Director of Human Resources who reviewed the Board of Water & Light's (BWL) newly implemented "Be Well for Life" wellness program. Michael Flowers reviewed the objectives and action plan for the "Be Well for Life" health and wellness program that was recently unveiled to Board of Water & Light's employees. He stated that this is a program to engage employees to become active and healthier. He stated there has been a total of 371 BWL employees to go through the "Be Well for Life" presentation and approximately 206 employees have signed up to-date. Mr. Flowers also reviewed the Electronic Support System, the Healthspot Kiosk, the Performance Rewards and the Progress Report as well as the Privacy and Anonymity of the program. He stated that this wellness and fitness program is a great morale builder. General Manager Lark stated that he has received a lot of positive feedback and people seem to be excited about the program. Mobile Resources Management Update General Manager Lark introduced Nick Burwell, Director of Information Technology who reviewed the new Mobile Resource Management (MRM) Regular Board Mtg. May 24,2011 Page 3 of 35 program, a work management program that involves the placement of laptop computers in trucks. Mr. Lark stated that Laura Briggs of the Information Technology Department has spent a lot of time on this project. Nick Burwell, stated that the one of the advantages of MRM is Automatic Vehicle Locating (AVL), which is a device placed in the truck that identifies exactly where a vehicle is and how it is traveling around the system which is an advantage to the BWL in case of an emergency or a job that needs immediate attention. With AVL, the BWL can determine and route the closest vehicle to the situation at hand. Another advantage of the MRM program is replacing the paper system in the Board of Water & Light's water, steam, electric delivery, electric metering, tree trimming and customer account representative's areas. This program helps the workers create a map for their daily route that is based on the amount of time that is allocated to each job. Mr. Burwell stated this system that will help the BWL be more efficient, safer and save money. REO Town Update (Informational Only) Susan Devon, Assistant General Manager and Chief Financial Officer, and Project Director for the REO Town New Co-generation Plant stated that Burns and Roe Enterprise design work is progressing very well with the assistance of the Board of Water & Light's team. Currently, they are putting together the specifications for major pieces of equipment, such as the steam boiler and the combustion and steam turbines. Ms. Devon stated that a Request for Qualifications (RFQ) has been sent out for the Construction Manager, the company that will actually build the plant, and that a total of 7 responses have been received. That list will be narrowed down and a Request for Proposal (RFP) will be sent out. The Construction Manager is expected to be selected by the middle of May. The request for architectural services for the interior of the office building was also sent out and the responses are due soon. An RFP was also sent out for architectural services for the Depot, in which 9 responses have been received and a selection will be made from that pool. Ms. Devon stated there has been a halt in the acquisition of the Historical Tax Credit because it looks like the Board of Water & Light is not going to fit into any of the qualifications based on a review of the Governor's budget. Ms. Devon stated that the BWL is moving forward on the final Bonding process for the Underwriting Service. Currently the Board of Water & Light's team is working with the Bond Advisor to finalize the official statement which is in draft form. The Board is also preparing the presentation for the rate agency meeting on April 27, 2011. Regular Board Mtg. May 24,2011 Page 4 of 35 Chili Cook-Off Update Calvin Jones, Director of Public Relations and Diversity, informed the Board of Commissioners' that this year's Chili Cook-Off will be held on Saturday, June 4, 2011 from 4:00 to 9:00 p.m. at the Adado Riverfront Park. Mr. Jones reviewed the charitable recipients and Chili Cook-Off members. He also gave special thanks to the Board of Water & Light's staff that assists with the success of the event. Other General Manager Lark announced there will be a groundbreaking ceremony on April 19th at 10:00 a.m. for the new Great Lakes Center for Utility Training. This is a partnership between Lansing Community College (LCC) and BWL. The BWL name will be on the facility. Dallas Burdick, Manager of Organizational Development & Training, stated that LCC and BWL have a long partnership with training apprentices and working to develop the work force. He said together we have created a training center which will benefit Board of Water & Light's employees directly because various training will be done at this facility. This facility will also open up training that is not available to other utilities and students that want to move into line work and related utility industry work. Lansing Community College is creating a curriculum and students will be able to obtain a utility certificate of training. Excused Absence Motion by Commissioner Zerkle seconded by Commissioner Thomas to excuse Commissioner Price from tonight's meeting. Action: Carried Unanimously. Adiourn On Motion by Commissioner Thomas, seconded by Commissioner Bossenbery, the meeting adjourned at 6:15 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE April 12, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:25 p.m. on Tuesday, April 12, 2011. Regular Board Mtg. May 24,2011 Page 5 of 35 Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were present. Absent: None Public Comments There were no public comments. Excused Absence None Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Louney to approve the Finance Committee meeting minutes of March 8, 2011. Action: Carried unanimously. Eleventh Supplement Revenue Bond Resolution General Manager Lark stated that the proposed resolution for the Eleventh Supplemental Revenue Bond Resolution relates to the proposed Bond Issuance that would fund the REO Town Plant. In August the Board approved the resolution to publish notice of the proposed bond issuance which is required. After publication of that notice, potential objecting parties had 45 days to oppose the proposed bond Issuance by referendum and there were no entities suggesting that we undertake a referendum. General Manager Lark asked that the Finance Committee forward the resolution to the full Board for consideration. General Manager Lark stated that he felt that it would be in the best interest of the Board if we had a Special Board Meeting on May 10t" following the regularly scheduled Committee of the Whole and Finance Committee meetings to handle the business of the proposed resolution. Lansing Board of Water and Light ELEVENTH SUPPLEMENTAL REVENUE BOND RESOLUTION A RESOLUTION TO AUTHORIZE: • Issuance of up to $250,000,000 of Series 2011A Bonds for Moores Park Replacement Cogeneration Plant, System improvements, Capitalized Interest and costs of issuance; • Appointment of senior managing underwriter, Regular Board Mtg. May 24,2011 Page 6 of 35 • Chief Financial Officer to sell Series 2011A Bonds without further resolution; • Other matters relative to issuance, sale and delivery of Series 2011A 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 from time to time; 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 2011A Project (as defined below); and WHEREAS, on August 4, 2010, the Board published in the City Pulse a Notice of Intent to Issue Revenue Bonds and Right to Petition for Referendum describing revenue bonds to be issued to finance costs of the Series 2011A Project, and no petitions requesting referendum as described in the Notice were filed with the City Clerk; and WHEREAS, the conditions and requirements of the Bond Resolution for the issuance of Additional Bonds of equal standing and priority of lien with outstanding bonds have been met for the issuance of the proposed revenue bonds, and the Board is ready to authorize issuance of the first series of revenue bonds to finance the Series 2011A Project. NOW, THEREFORE, BE IT RESOLVED THAT: 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 and the Series 2011A Bonds issued pursuant to Section 18(a) of the Bond Resolution as amended by Section 13 of the 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 and amended on August 12, 2008 and June 9, 2009, the Fifth Supplemental Bond Resolution adopted by the Board April 24, 2001, the Sixth Supplemental Revenue Bond Resolution adopted Regular Board Mtg. May 24,2011 Page 7 of 35 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 January 29, 2008, and this Eleventh Supplemental Revenue Bond Resolution, and any other resolution which amends or supplements the Bond Resolution. (c) "Bonds" means the Series 2008A Bonds and the Series 2011A Bonds and any Additional Bonds of equal standing hereafter issued. (d) "Chief Financial Officer" means the Assistant General Manager and Chief Financial Officer of the Board. (e) "Reserve Requirement" shall mean the Reserve Requirement established by Section 11 of the Tenth Supplemental Revenue Bond Resolution and described in Section 10 herein. (f) "Series 1999-2005 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 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) "Series 2008A Bonds" means the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A. (h) "Series 2011A Bonds" means the Utility System Revenue Bonds, Series 2011A issued pursuant to this Eleventh Supplemental Revenue Bond Resolution. (i) "Series 2011A Construction Fund" shall mean the Series 2011A Construction Fund established pursuant to this Eleventh Supplemental Revenue Bond Resolution. Q) "Series 2011A Project" means the acquisition and construction of a Moores Park Replacement Cogeneration Plant, a combined cycle natural gas facility producing steam and electricity including two combined cycle sets, each set consisting of a combustion turbine, a heat recovery steam generator, a steam turbine and an auxiliary boiler to provide backup steam service, and System improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements. Regular Board Mtg. May 24,2011 Page 8 of 35 (k) "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. Section 2. Conditions Permitting Issuance of Additional Bonds. The Bond Resolution establishes requirements for the issuance of Additional Bonds of equal standing and priority of lien with the Outstanding Series 1999-2005 Bonds and Outstanding Series 2008A Bonds. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test required by Section 18(a) of the Bond Resolution as amended by Section 6 of the Second Supplemental Revenue Bond Resolution. The Series 2011A Bonds can be issued as Additional Bonds pursuant to the requirements of the Bond Resolution if the Board determines that the actual or augmented Net Revenues for the fiscal year ending not more than 15 months prior to the sale of Additional Bonds are 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. Section 18(a) permits Net Revenues to be augmented if the System rates, fees or charges were increased prior to the time of authorizing the Additional Bonds. On January 25, 2011 the Board enacted rate increases. The Board has obtained the opinion of a Consulting Engineer on the amount of Net Revenues which would have resulted for the fiscal year ending June 30, 2010 had the System's billings during such time been at the increased rates. The Board has also obtained schedules prepared by Robert W. Baird & Co. (the "Financial Advisor") showing the maximum Aggregate Debt Service Requirement on the Outstanding Bonds and the Series 2011A Bonds if the Series 2011A Bonds are issued within the parameters of this resolution. Based on the opinion of the Consulting Engineer and the schedules provided by the Financial Advisor, the Board hereby determines that the augmented Net Revenues for the fiscal year ending June 30, 2010 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 2011A Bonds. The Board hereby determines that the Board is not in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Section 3. Necessity; Preliminary Approval of Plans; and Statement of Purpose. It is hereby determined to be a necessary public purpose of the Board to acquire and construct the Series 2011A Project in accordance with the plans and specifications prepared by the Board's consulting engineers, which plans and specifications are hereby approved. Section 4. Costs; Useful Life. The total cost of the Series 2011A Project is estimated to be not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) including the payment of capitalized interest and incidental Regular Board Mtg. May 24,2011 Page 9 of 35 expenses as specified in Section 5 of this resolution, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Series 2011A Project is estimated to be not less than thirty (30) years. Section 5. 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 2011A Project, including payment of all legal, engineering, financial and other expenses incident thereto and incident to the issuance and sale of the Series 2011A Bonds and capitalized interest in the amount to be determined at the time of sale of the Series 2011A Bonds, the City, acting by and through the Board, shall borrow the sum of not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) and shall issue the Series 2011A Bonds therefor pursuant to the provisions of Act 94. The remaining cost of the Series 2011A Project, if any, shall be defrayed from funds on hand and legally available for such use, or, if the principal amount of the Series 2011A Bonds is less than $250,000,000, from an additional series of bonds to be issued upon approval of a future resolution. The Series 2011A Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94. The capitalized interest to be paid from proceeds of the Series 2011A Bonds shall not exceed the amount necessary to pay interest for three years, as finally determined at the time of sale of the Series 2011A Bonds. Section 6. Series 2011A Bond Details. The Series 2011A Bonds shall be designated as the "Utility System Revenue Bonds, Series 2011X 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 2011A Bonds. The Series 2011A 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 2011A 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 2011A Bonds, shall mature as serial bonds or term bonds on such dates as shall be determined at the time of sale of the Series 2011A Bonds but not-to-exceed thirty (30) annual maturities. The Series 2011A 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 2011A Bonds. The Series 2011A Bonds shall bear interest at a rate or rates to be determined on sale thereof, payable on January 1, 2012, or such other date as provided at the time of sale of the Series 2011A Bonds, and semi-annually thereafter on January 1st and July 1st of each year, provided, however, that the first interest payment date shall be not later than ten months following the delivery date of the Series 2011A Bonds. The Series 2011A Bonds shall be executed by the manual or facsimile signature of the Chairperson and the Corporate Secretary of the Board. No Series 2011A Bond shall be valid until authenticated by an authorized representative of the Transfer Agent. The Series 2011A 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 Regular Board Mtg. May 24,2011 Page 10 of 35 Financial Officer upon payment of the purchase price for the Series 2011A 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 7. Registration and Transfer. The Chief Financial Officer is hereby authorized to appoint as transfer agent for the Series 2011A 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 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 2011A 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 provided in this paragraph may be changed by the Board to conform to market practice in the future. The Series 2011A 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 2011A Bonds in book-entry-only form and to make such changes in the form of the Series 2011A Bonds within the parameters of this resolution as may be required to accomplish the foregoing. Notwithstanding the foregoing, if the Series 2011A Bonds are held in book-entry-only form by DTC, payment of principal of and interest on the Series 2011A Bonds shall be made in the manner prescribed by DTC. The Series 2011A 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 2011A Bonds, the registered owner thereof shall deliver the Series 2011A Bonds to the Board for cancellation. Regular Board Mtg. May 24,2011 Page 11 of 35 Section 8. Deposit to Bond Reserve Account. On or prior to the date of delivery of the Series 2011A Bonds, the Board 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 Board 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 9. Series 2011A Bond Proceeds: Construction Fund. From the proceeds of sale of the Series 2011A 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 2011A Bonds, and the Board 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 2011A 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 2011A Bonds may be deposited in the Bond Reserve Account or the Series 2011A Construction Fund in consultation with Bond Counsel. The capitalized interest shall next be deposited in the Redemption Fund, and the Board may take credit for the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of interest on the Series 2011A Bonds. There shall next be deposited in the Bond Reserve Account an amount, if any, designated at the time of sale of the Series 2011A 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 2011A Bonds shall be deposited in the Series 2011A 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 2011A Project being financed with proceeds of the Series 2011A Bonds and any costs of engineering, legal, financial, bond insurance premiums and other expenses incident thereto and to the issuance of the Series 2011A Bonds. Any unexpended balance of the proceeds of sale of the Series 2011A Bonds remaining in the Construction Fund after completion of the Series 2011A 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 be used 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 calling Series 2011A Bonds for redemption or for the purpose of purchasing Series 2011A Bonds on the open market at not more than the fair market value thereof but not more than the price at which the Series 2011A Bonds may next be called for redemption. Regular Board Mtg. May 24,2011 Page 12 of 35 Section 10. Reserve Requirement. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the Reserve Requirement as defined in Section 1 (ff) 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 Series 1999-2005 Bonds, "Reserve Requirement" shall mean the following as established by Section 11 of the Tenth Supplemental Revenue Bond Resolution: 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 11. Rate Covenant. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board will comply with the Section 9 of the Bond Resolution, as previously amended by Section 5 of the Second Supplemental Revenue Bond Resolution, and 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 150% 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. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 12 of the Tenth Supplemental Revenue Bond Resolution. 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. Section 12. Additional Bonds Test. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test imposed by Section 6 of the Second Supplemental Revenue Bond Resolution adopted January 11, 1994. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 13 of the Tenth Supplemental Revenue Bond Resolution. 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 Regular Board Mtg. May 24,2011 Page 13 of 35 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 Board shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Additional Bonds may be issued as provided in Section 18 subparagraphs (b) or (c) of the Bond Resolution. Regular Board Mtg. May 24,2011 Page 14 of 35 Section 13. Covenants. The Board covenants and agrees as follows with the holders of the Series 2011A Bonds as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest: (a) The Board will cause the portion of the Series 2011A Project being financed with proceeds of the Series 2011A Bonds to be acquired and constructed promptly and in accordance with the plans and specification therefor. (b) The Board covenants and agrees with the Registered Owners of the Series 2011A Bonds that as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest, the Board shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Series 2011A Bonds pursuant to the Internal Revenue Code in such a manner as to cause the Series 2011A Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The Board 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 2011A 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 Board with the Series 2011A Bonds. (c) The Board will not issue additional bonds of prior standing to the Series 2011A Bonds. Section 14. Series 2011A Bond Form. The Series 2011A 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 2011A Bonds established upon sale thereof: BOND NO. R- UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTIES OF INGHAM AND EATON CITY OF LANSING LANSING BOARD OF WATER AND LIGHT UTILITY SYSTEM REVENUE BOND, SERIES 2011A Date of Interest Rate Date of Maturity Original Issue CUSIP Registered Owner: Cede & Co. Principal Amount: Regular Board Mtg. May 24,2011 Page 15 of 35 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 [interest payment date] and semiannually thereafter. Principal of this bond is payable at the designated corporate trust office of [transfer agent], 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; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A, the Water Supply, Steam and Electric Utility System 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, 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. The pledge of Net Revenues and the statutory lien are senior in priority of lien to the Water Supply, Steam, Chilled Water and Electric Utility System Subordinate Lien Revenue Refunding Bond, Series 2009A (Federally Taxable) 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$[principal amount], issued pursuant to a Bond Resolution adopted by the Board on October 24, 1989, as amended and supplemented from time to time, including by a Eleventh Supplemental Revenue Bond Resolution adopted by the Board on [date of resolution] (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 financing costs of improvements to the System, [making a deposit to a bond reserve account,] and paying the costs of issuing the bonds. Regular Board Mtg. May 24,2011 Page 16 of 35 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 maturing on or prior to [date] 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 [date] shall be subject to redemption prior to maturity without a premium, at the option of the Board, in such order of maturity as the Board shall determine and within any maturity by lot, on any date on or after [date], 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. 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 Board. 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. Regular Board Mtg. May 24,2011 Page 17 of 35 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 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 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 its name 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 Regular Board Mtg. May 24,2011 Page 18 of 35 By Chairperson Countersigned: By Corporate Secretary [INSERT STANDARD FORMS OF CERTIFICATE OF AUTHENTICATION AND ASSIGNMENT] Section 15. Negotiated Sale. Based upon the advice of the Financial Advisor, given the volatile nature of the bond market, in order to enable the Board to select and adjust terms for the Series 2011A Bonds, 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 2011A Bonds, and to achieve sale efficiencies so as to reduce the cost of issuance and interest expense, it is determined in the best interests of the Board to negotiate the sale of the Series 2011A Bonds. The Board hereby determines to sell the Series 2011A Bonds at a negotiated sale instead of a competitive sale. Section 16. Appointment of Senior Managing Underwriter. Bank of America Merrill Lynch (the "Underwriter") is hereby named as senior managing underwriter for the Series 2011A Bonds. The Board reserves the right to name additional co-managers and/or to develop a selling group, and the Chief Financial Officer is authorized to name additional co-managers and/or to develop a selling group in consultation with the Financial Advisor. By adoption of this resolution the Board assumes no obligations or liability to the Underwriter for any loss or damage that may result to the Underwriter from the adoption of this resolution, and all costs and expenses incurred by the Underwriter in preparing for sale of the Series 2011A Bonds shall be paid from the proceeds of the Series 2011A Bonds, if the Series 2011A Bonds are issued, except as may be otherwise provided in the Bond Purchase Agreement for Series 2011A Bonds. Section 17. 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 recommends 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, 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 18. Official Statement. The Chief Financial Officer is authorized to approve circulation of a Preliminary Official Statement describing the Series 2011A Bonds and, after sale of the Series 2011A Bonds, to prepare, execute and deliver a final Official Statement. Section 19. Continuing Disclosure. The Chief Financial Officer is hereby directed to execute and deliver, prior to delivery of the Series 2011A Bonds, a Regular Board Mtg. May 24,2011 Page 19 of 35 written continuing disclosure undertaking in order to enable the Underwriter 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 20. Sale of Series 2011A Bonds. The Chief Financial Officer is authorized, in consultation with the Financial Advisor, to negotiate a Bond Purchase Agreement with the Underwriter, and to accept an offer by the Underwriter to purchase the Series 2011A Bonds without further resolution of this Board. This authorization includes, but is not limited to, determination of original principal amount of the Series 2011A Bonds; the prices at which the Series 2011A Bonds are sold; the date of the Series 2011A Bonds; the schedule of principal maturities and whether the Series 2011A 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 2011A Bonds; and application of the proceeds of the Series 2011A Bonds including the amount of capitalized interest, if any. 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. The Chief Financial Officer is authorized to execute the Bond Purchase Agreement. The net interest cost of the Series 2011A Bonds shall not exceed 8.00%. The first maturity of principal on the Series 2011A Bonds shall occur no earlier than 2012, and the date of the final maturity shall not cause the Series 2011A Bonds to exceed thirty (30) annual maturities. The Underwriter's discount for the Series 2011A Bonds shall not be greater than 1.00% of the principal amount of the Series 2011A Bonds, net of original issue discount or premium. In making such determinations the Chief Financial Officer is authorized to rely upon data and computer runs provided by the Financial Advisor. Section 21. 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 the Manager of Finance and Planning, the General Manager, or a person designated by the Chief Financial Officer or the Manager of Finance and Planning 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, sale and delivery of the Series 2011A 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 rating agency fees, bond insurance premiums, transfer agent fees, financial advisor fees, bond counsel fees, costs of printing the Series 2011A Bonds and the preliminary and final official statements, and any other costs necessary to accomplish sale and delivery of the Series 2011A Bonds. Section 22. Applicability of the Outstanding Bond Resolutions. Except to the extent supplemented or otherwise provided in this resolution, all of the provisions and covenants provided in the Bond Resolution shall apply to the Series 2011A Bonds issued pursuant to provisions of this resolution, such provisions of the Bond Resolution being made applicable to the Series 2011A Bonds herein authorized. Regular Board Mtg. May 24,2011 Page 20 of 35 Section 23. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. Section 24. 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 25. 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 26. 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 and the users of the System. In accordance with the provisions of Section 6 of Act 94, this resolution shall become effective immediately upon its adoption. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Special meeting held on Tuesday, May 10, 2011, at 6:30 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. We 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 We 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 Regular Board Mtg. May 24,2011 Page 21 of 35 Motion by Commissioner Thomas, seconded by Commissioner Plummer to forward the proposed resolution for the Eleventh Supplemental Revenue Bond to the full Board for consideration. Action: Carried Unanimously Other Finance Chair Bossenbery stated next month the Board will review the budget. Adiourn On Motion by Commissioner Louney, seconded by Commissioner Thomas, the meeting adjourned at 6:35 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee COMMITTEE OF THE WHOLE May 10, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, May 10, 2011. Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Tracy Thomas, Cynthia Ward, Marilyn Plummer, David Price and Sandra Zerkle. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Ward, seconded by Commissioner Thomas to approve the Committee of the Whole meeting minutes of April 12, 2011. Action: Carried unanimously. Rules and Regulations Electric ♦ Water ♦ Steam ♦ Chilled Water ♦ Electric Fees & Charges ♦ Water Fees & Charges General Manager Lark stated that the Rules and Regulations update is done on an annual basis to inform customers of current fees and charges. This is a code of conduct or a hand book as to how the Board of Water & Light interacts with Regular Board Mtg. May 24,2011 Page 22 of 35 customers, particularly with respect to fees and charges. General Manager Lark stated that a lot of work goes into the yearly update. Kellee Christensen, Manager of Customer Projects and Development, stated that a lot of analysis is done to make sure that the Board of Water & Light is complying with certain codes in a timely manner to keep Rules and Regulations current. General Manager Lark asks that the Committee forward the resolution approving the Rules and Regulations for Electric, Water, Steam and Chilled Water Utility Services to be effective July 1, 2011 to the full Board for approval. Motion by Commissioner Price, seconded by Commissioner Bossenbery to move the resolution for the Rules and Regulations to full Board for approval. Action: Motion Carried Renewable Energy Plan Update General Manager Lark said the State of Michigan Public Service Commission (PSC) requires that the Board of Water & Light provide the Board of Commissioners a Biennial Update on their Renewable Energy Plan. The Renewable Energy Plan Update is reviewed by the PSC and the public must be allowed to comment on the Update. The Biennial Update has to be brought to the Board's attention so that they know that they are aware that public comment is being solicited. The comment period will start May 16th and it will be posted on our internet. Sue Warren, Manager of Marketing and Business Strategies, stated that PA 295 was passed in October of 2008. It is the legislation that requires the Renewable Energy Program and an Energy Optimization Program. The Board did update our financial analyses and we are required to let our customers comment on this. The law requires year-end results from those programs to be filed with the Public Service Commission (PSC) and a summary provided to customers. Ms. Warren stated that the Board of Water & Light is exceeding requirements and goals for both Renewable Energy and Energy Optimization. IBEW 352 Organization Efforts (Informational Only) General Manager Lark presented the Board with IBEW 352 material that has been circulated to Board of Water & Light employees. He stated that he is not aware of any problems with the Union and has respect for their leadership. General Manager Lark stated that he wanted to make the Board aware of the information that has been circulating. He feels if employees want to be unionized, that is fine; however, employees should be provided all and as much information possible to help them make the best decision possible. Other o REO - Cogeneration Plant Update Regular Board Mtg. May 24,2011 Page 23 of 35 General Manager Lark spoke about his recent trip to New York to visit to the bond rating agencies of Moody's and Standards & Poor's. Mr. Lark stated that the bonds are rated by these agencies before they go out for issuance. He stated this was his third time participating in the bond process since he has been at the BWL, and believes that he and Susan Devon, Assistant General Manager and Chief Financial Officer persuasively presented the Board of Water & Light's case. General Manager Lark said the importance of the advance approval of the rate increases for the power plant was very favorable to the Board of Water & Light for receiving a good rating. Ms. Devon said the trip to New York went well and that a lot of significant work was done ahead of time. She said Mr. Lark did a superb job and she is proud to be a part of the Board of Water & Light. Ms. Devon stated that the Administration will be issuing the Preliminary Official Statement (POS) on Friday, May 13t" as the first step towards the sale of the bonds. The Board of Commissioners will be receiving an electronic copy of the POS. Next week the Administration will be preparing an internet road show presentation which will include Susan Devon, J. Peter Lark and Warren Creamer, the Board's bond adviser. The internet presentation will be presented to future possible investors. On May 22"d there will be an advertisement in the Lansing State Journal announcing the sale of the Bonds. The Board of Water & Light's website will have a link that will include the POS, financial statement, and the internet road show presentation. Bond sales will be taking place on May 23rd and 24t". Then, on June 15t", the Board of Water & Light will close the deal. Ms. Devon said the two architects for the REO project have been selected. For the Depot; Cornerstone, known for their historical renovation, was selected; and FTCH was selected as the office interior architects. They are evaluating responses on bids and hope to have all responses awarded by between June 1st and 15t". She said they continue to discuss the pipeline. Construction will begin on June 13, 2011 for the steam vault. Ms. Devon reminded everyone about the Ground Breaking Ceremony on May 25t". o Hometown Power 5K General Manager Lark introduced Bob Perialas, Manager of Customer Service. Mr. Perialas provided an update on the 3rd Annual Hometown Power 5K. He said last year the Board of Water & Light's entire 5K event was paid for through sponsorship. He said the Board of Water & Light was able to donate $3,000.00 to Pennies for Power at no cost to the BWL. Mr. Perialas said they are predicting to have over 300 participants this year and are looking forward to increasing this year's donation to Pennies for Power, the program that helps low income families with their utility payments. The 5K event will take place August 13t" at 9:00 a.m. Regular Board Mtg. May 24,2011 Page 24 of 35 This year there will be the introduction of the new family rate of$58.00 for 4 people with a $10.00 charge per additional person. Marilyn Plummer stated on behalf of the Juneteenth Committee she would like to invite everyone to the Annual Juneteenth celebration to celebrate the historical significance of the oldest African American Holiday. The event will kick off on June 16, 2011. Excused Absence None Adjourn On Motion by Commissioner Plummer, seconded by Commissioner Price, the meeting adjourned at 6:20 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE May 10, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:00 p.m. on Tuesday, May 10, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were present. Also present were Board Members David Price and Frank Lain. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Thomas, seconded by Commissioner Louney to approve the Finance Committee meeting minutes of April 12, 2011. Action: Carried unanimously. FY 2012 Budget General Manager J. Peter Lark provided an overview of the proposed financial plan for fiscal year (FY) 2012 for the Lansing Board of Water and Light (BWL). He stated that the FY 12 Operating Budget that is being proposed resulted in a reduction in operations and maintenance expenses from the level approved in FY Regular Board Mtg. May 24,2011 Page 25 of 35 2011. These reductions show that we have been very careful with the cash we have and that we are spending very carefully. All of our operations budgets have decreased with the exception of strategic planning which reflect cost increases related to environmental. The budget allows for continued service to its utility customers and future operations and sustainability for the plant facilities. The total proposed budget for FY 2012 is $435.5 million, of which operations and maintenance comprise $279 million and capital budget is approximately $156 million. Capital expenditures for fiscal years 2012-2017 are estimated at $462 million. The budget presentation materials included the following information: sales forecast, revenue assumptions, MISO market participation, comparison of energy cost, operating expense assumptions, operations and maintenance budget by category, budgeted net income/cash flow, comparative income statement (FY2012/20011), budget comparison by division and department, and budgeted return on Ratebase. SALES FORECAST Utility FY12 Forecast FY11 Budget % '12 Forecast To '11 Budget Electric — Retail (MWh) 2,248,434 2,200,585 2.2% Electric-Wholesale (MWh) 1,114,635 953,744 16.9% Electric (MWh) 3,363,069 3,154,329 6.6% Water (ccf) 9,223,158 9,973,155 -5.2% Steam (Mlb) 743,000 742,711 4.4% Chilled Water tnhrs 10,379,126 9,968,925 7.7% Electric: -Retail sales volumes by customer class are expected to remain at the same level as FY 2011 with the exception of commercial sales which are expected to grow by approximately 4.2 %. -Wholesale sales volumes are expected to increase as a result of increased plant availability in FY 2012. Water: -Retail sales volume expectations have been reduced to better represent actual sales volumes experienced in recent years. Steam: -Steam sales volumes are expected to be consistent with FY 2011 Chilled Water: -Chilled water sales volume increases are attributed to recent customer additions, including the State Police Headquarters and the Accident Fund Building. Revenue Assumptions •Electric Retail — No rate increases anticipated for FY 2012 Regular Board Mtg. May 24,2011 Page 26 of 35 *Electric Wholesale — Margins continue to be affected by depressed market prices *Water, Steam, & Chilled Water Utilities —Anticipated increases are included in the budget MISO Market Participation As of January 1, the BWL officially entered the MISO market as a registered participant. The BWL also now has the benefit of an improved ability to sell excess generation through negotiated sales as well as the ability to participate in the day ahead markets (rather than just the real time market). Operating_Expense Assumptions •Reviews held with each department •Overall FY 2012 O&M decrease of 6.8% compared to final FY 2011 Budget* •Current CPI Index —1.6% inflation •Budget assumes 712 FTE's as compared to 718 FTE's in the FY 2011 budget. •Wage and salary increases = 3% for bargaining unit employees only, as required by contract. General Manager Lark asks that the resolution accepting the Fiscal Year 2012 Operating and Capital Budget be forwarded to the full Board consideration. PROPOSED RESOLUTION Fiscal Year 2012 Operating and Capital Budget RESOLVED, that the annual Operating Budget covering Fiscal Year 2012 is hereby approved as presented; and RESOLVED, that the Fiscal Year 2012 Capital Budget is hereby approved as presented; and RESOLVED, that the forecast for capital expenditures for the Fiscal Years 2012- 2017 is hereby accepted as presented; and RESOLVED FURTHER, that the Corporate Secretary be directed to make the appropriate filings with the 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 maintenance budget of$279.0 million and a capital budget of$156.5 million for Fiscal Year 2012. $44.8 million of the Fiscal Year 2012 capital budget is to provide for on-going services to our utility customers and to sustain our plant facilities for future operations. The remaining$111.7 million will support the start of construction of the Reo Town Plant. Capital expenditures for Fiscal year 2012-2017 are estimated to be $462 Regular Board Mtg. May 24,2011 Page 27 of 35 million. Staff recommends that the Finance Committee approve these budgets and resolution for presentation and adoption by the Board at its May 24, 2011 Board meeting. Finance Chair Bossenbery stated that she spoke with Corporate Secretary Griffin and Internal Auditor Perkins regarding their budgets. There is a minimal increase in the Internal Auditor's and Corporate Secretary's budget, the Board's budget remains the same and those figures are all included in the complete budget. Motion by Commissioner Thomas, seconded by Commissioner Louney to forward the FY 2012 Operating and Capital Budget Resolution to the full Board for consideration. Action: Motion Carried Internal Audit Status Report Internal Audit Status Report Internal Auditor Phil Perkins presented an overview of Internal Auditors Status Report that included: Risk Assessments/Scoping Review Status Four financial risk assess ment/scoping reviews are complete: -Expenditures & Accounts Payable -Inventories (Materials, Equipment & Fuel) -Equity Accounts -Cash & Treasury • Three remain- -Commitments & Contingencies (85% complete) -Record & Monitor Debt (over 50% complete) -Taxes (almost complete) -All of the above will be completed by or before June 30, 2011. -We will also start a Procurement Card audit in May at the request of the Assistant GM & CFO. Annual Audit Planning for FY2012 1. Basic premise—the audit plan is a product of the Internal Auditor with significant input from Management and advice and consent from the Finance Committee and Board. 2. Assessment of Company Risks is a Key Aspect of Planning • Annual risk assessment is required by Institute of Internal Auditing Standards. • Risks reviewed include high-level Strategic Risks (Environmental, Other Regulatory, Economic, Major Changes, etc.) and Departmental/Functional Risks (application of 10 identified risk factors to auditable activities, operational, financial, fraud risks, etc.) • Discussions are held about how the identified risks may pertain to potential audit topics. Regular Board Mtg. May 24,2011 Page 28 of 35 3. The plan should be flexible enough to allow for unanticipated needs and include resource estimates as well as proposed audit engagements. 4. The final audit plan for FY2012 should be reviewed by the Internal Auditor and Senior Management, and approved by the Finance Committee. External Peer Review — Recommended Approach • An external peer review of the Internal Audit activity is required every 5 years per Institute of Internal Auditors Standards. These standards are as incumbent upon the internal auditing profession as the Statements of Auditing Standards promulgated by the AICPA are to our external auditors. • Internal Audit is due for an external review by no later than the last quarter of FY2012. • Our goal is to have the peer review performed at the lowest possible cost by a professional external party with experience in performing such reviews. • Recommendation is to use a peer review team from the Association of Local Government Auditors (ALGA): • Lowest out-of-pocket cost provider (they charge for travel/business expenses only). • Team size is two people for an Internal Audit Department of our size (estimated cost $4,000 or less). • In return for ALGA's services, BWL Internal Audit will need to provide a team member periodically (e.g., every three years on average) for peer reviews at other locations. The reviews normally take a week to perform. Finance Chair Bossenbery commended Internal Auditor Perkins and Assistant General Manager and Chief Financial Officer Susan Devon for working together on Audit Procedures. Internal Auditor Perkins presented information on the Association of Local Government Auditors (ALGA) and their peer review program. Mr. Perkins stated that ALGA only charges their travel and other business expenses to perform the mandatory (every 5 years) external review and therefore would be a cost- effective solution. In exchange, the BWL Internal Audit Director and Associate Internal Auditor will need to support external peer reviews at other locations on an average of once every three years. This would accrue indirect benefits of benchmarking and best practice sharing from other internal audit groups. Mr. Perkins recommended that he be allowed to proceed with ALGA as the external peer review provider and asked the Finance Committee to approve his recommendation. Motion by Commissioner Louney, seconded by Commissioner Plummer to approve Internal Auditors Perkin's recommendation that he be allowed to participate with ALGA as an external peer provider. Action: Motion Carried Regular Board Mtg. May 24,2011 Page 29 of 35 Other Board Chair Zerkle congratulated Phil Perkins on his recently acquired Auditor Information System (IT) Certification. Chair Zerkle ask Mr. Perkins if the new certification will allow him to do more accurate IT audits. In response Internal Auditor Perkins stated this does give him more knowledge, however he still needs to gain experience. Everyone congratulated Mr. Perkins on his accomplishment. Adjourn On Motion by Commissioner Plummer, seconded by Commissioner Thomas, the meeting adjourned at 6:55 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee HUMAN RESOURCE COMMITTEE May 17, 2011 The Human Resource Committee of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:00 p.m. on Tuesday, May 17, 2011. Human Resource Committee Chairperson Tracy Thomas called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Tracy Thomas, Marilyn Plummer and Sandra Zerkle. Also present were Commissioner Cynthia Ward. Absent: Commissioner Frank Lain. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Zerkle to approve the Human Resource Committee meeting minutes of July 20, 2010. Action: Carried unanimously. Succession Planning General Manager Lark introduced Board of Water & Light's General Counsel and Executive Director of Employment Affairs, Brandie Ekren, who reviewed the Succession Planning Plan. Regular Board Mtg. May 24,2011 Page 30 of 35 Ms. Ekren stated that the Executive Staff has been working on the Succession Plan for over a year. Succession Planning is the process of identifying and staffing critical positions through recruitment and identification of leadership talent and cultivation of this talent training and mentoring. The Lansing Board of Water and Light's program has four key components: Critical Planning, Leadership Development, Mentoring and Coaching and Employee Recruitment and training. Bond Rating Update General Manager Lark announced that the BWL has received excellent news. Moody's and Standard & Poor's have both affirmed our bond ratings Diversity Field Trips Update/Introduction of New manger (Information Only) General Manager Lark introduced the new Manager of Diversity Daryl Hibbert. Mr. Hibbert stated that he was honored to be at tonight's meeting to speak about the Board of Water & Light's public relations and diversity program. Mr. Hibbert stated that bringing people together to create excellent service is what we do, here at the Lansing Board of Water & Light. Our Public Relations and Diversity program helps us to create excellence for our customers and our employees. He stated that the objective of the public relations and diversity program is to educate, train and connect people with communities. Mr. Hibbert said that he was thankful for the tremendous support and latitude that he has received from Executive Staff and Calvin Jones, Director of Public Relations and Diversity. He said that he has a great staff and recognized Tansay Carter from his staff. FY 2011 Board Appointee Performance Review — General Manager General Manager Performance Review General Manager J. Peter Lark, requested a closed session for the purpose of receiving his contractual year-end performance evaluation as permitted. Motion by Commissioner Zerkle, seconded by Commissioner Plummer to go into closed session. Action: Carried unanimously. The Human Resource Committee meeting wentin to closed session at 5:45 p.m. Motion by Commissioner Plummer, seconded by Commissioner Zerkle that the Human Resource Committee return to open session. Action: Carried unanimously Regular Board Mtg. May 24,2011 Page 31 of 35 The Human Resource Committee meeting reconvened in open session at 6:15 p.m. Upon conclusion of the closed session, the Human Resource Committee took the following action: Motion by Commissioner Zerkle and seconded by Commissioner Plummer to reappoint Mr. Lark as the Director and General Manager for Fiscal Year 2012. Action: Carried unanimously Motion by Commissioner Zerkle, seconded by Commissioner Plummer to authorize the Board Chair to finalize the details of Mr. Lark's contract with Legal counsel. Action: Motion Carried FY 2011 Board Appointee Performance Review — Internal Auditor Internal Auditor Performance Review Internal Auditor Phil Perkins requested a closed session for the purpose of receiving his contractual year-end performance evaluation as permitted. Motion by Commissioner Plummer, seconded by Commissioner Zerkle to go into closed session. Action: Carried unanimously. The Human Resource Committee meeting went into closed session at 6:21 p.m. Motion by Commissioner Zerkle, seconded by Commissioner Thomas that the Human Resource Committee return to open session. Action: Carried unanimously The Human Resource Committee meeting reconvened in open session at 6:50 p.m. Upon conclusion of the closed session, the Human Resource Committee took the following action: Motion by Commissioner Zerkle and seconded by Commissioner Plummer to reappoint Mr. Perkins as the Internal Auditor for Fiscal Year 2012 Action: Carried unanimously Motion by Commissioner Zerkle, seconded by Commissioner Plummer to authorize the Board Chair to finalize the details of Mr. Perkins contract with Legal counsel. Regular Board Mtg. May 24,2011 Page 32 of 35 Action: Motion Carried FY 2011 Board Appointee Performance Review — Corporate Secretary Corporate Secretary Performance Review Corporate Secretary M. Denise Griffin requested a closed session for the purpose of receiving her contractual year-end performance evaluation as permitted. Motion by Commissioner Plummer, seconded by Commissioner Thomas to go into closed session. Action: Carried unanimously. The Human Resource Committee meeting went into closed session at 6:52 p.m. Motion by Commissioner Zerkle, seconded by Commissioner Plummer that the Human Resource Committee return to open session. Action: Carried unanimously The Human Resource Committee meeting reconvened in open session at 7:12 p.m. Upon conclusion of the closed session, the Human Resource Committee took the following action: Motion by Commissioner Zerkle and seconded by Commissioner Plummer to reappoint Ms. Griffin as the Corporate Secretary for Fiscal Year 2012. Action: Motion Carried Motion by Commissioner Zerkle, seconded by Commissioner Plummer to authorize the Board Chair to finalize the details of Ms. Griffin's contract with Legal counsel. Action: Motion Carried Human Resource Chair Tracy Thomas stated that the contracts for the three Board Appointed employees will be prepared and ready for signature at the July 26, 2011 Regular Board Meeting. The contracts are effective July 1, 2011. Other There was no motion for any Excused Absence There being no further business, the Human Resource Committee meeting adjourned at 7:16 p.m. Regular Board Mtg. May 24,2011 Page 33 of 35 Respectfully submitted, Tracy Thomas, Chair Human Resource Committee MANAGER'S RECOMMENDATIONS General Manager J. Peter Lark stated on May 10, 2011 the Finance Committee approved the budget that is before the Board of Commissioners tonight. He asked that the Board approve the Operating and Maintenance Budget of $279 million as well as the Capital Budget of$156.5 million for FY 2012, which includes $44.8 million for the FY capital budget on-going services, as well as the remaining $111.7 million for the construction of the REO Town Plant. Mr. Lark also asked that the Board accept the Capital Expenditures for Fiscal Years 2012- 2017. RESOLUTION #2011-05-02 Fiscal Year 2012 Operating and Capital Budget RESOLVED, that the annual Operating Budget covering Fiscal Year 2012 is hereby approved as presented; and RESOLVED, that the Fiscal Year 2012 Capital Budget is hereby approved as presented; and RESOLVED, that the forecast for capital expenditures for the Fiscal Years 2012- 2017 is hereby accepted as presented; and RESOLVED FURTHER, that the Corporate Secretary be directed to make the appropriate filings with the Lansing City Clerk's office and the Mayor's office in accordance with the Lansing City Charter regarding the above actions. -------------------- Motion by Commissioner Bossenbery, seconded by Commissioner Price to approve the Fiscal Year 2012 Operating and Capital Budget and accept the forecast for capital expenditures for the Fiscal Years 2012-2017 as presented. Action: Carried unanimously. General Manager Lark stated that the updated Rules and Regulations were presented to the Committee of the Whole on May 10, 2011. The Committee was provided with a copy of the proposed Rules & Regulations with all of the changes identified in the new fee schedule attachments. Mr. Lark stated that this is an annual amendment to the Electric, Water, Steam and Chilled Water Rules and Regulations and the purpose of this is to update any fees and charges, as well as to amend any other rules that require updating. Regular Board Mtg. May 24,2011 Page 34 of 35 RESOLUTION #2011-05-03 Rules and Regulations for Electric, Water, Steam & 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, 2011. -------------------------------- Motion by Commissioner Price, seconded by Commissioner Plummer, to approve the Rules and Regulations for Electric, Water, Steam, and Chilled Water Utility Services to be effective July 1, 2011. Chair Zerkle stated that there was very little change in the Rules and Regulations. UNFINISHED BUSINESS There was no Unfinished Business NEW BUSINESS There was no New Business RESOLUTIONS Resolutions were adopted under Manager's Recommendations MANAGER'S REMARKS General Manager Lark stated that the design company of Ciesa Design that did the Board of Water & Light's 2010 Annual Report won an Addy Award for the report. Mark Nixon masterminded the report and Heidi Myer masterminded all of the financial part. General Manager Lark recognized Calvin Jones for receiving the Lansing Community College Alumni of the year award. Mr. Lark stated that Calvin is a key player at the Board of Water & Light and that his intergovernmental relation work is second to none. Calvin Jones, Director of Public Relations and Diversity stated that when he was notified that he had been nominated and received the Alumni of the year award he was pleasantly surprised. He thanked General Manager Lark and Susan Devon, Assistant General Manager and Chief Financial Officer for providing great leadership and making it possible for Board of Water & Light employees to grow. He said that he is blessed to be here at the Board of Water & Light. General Manager Lark announced that the Board of Water & Light 2011 received the Governor's Award for Historic Preservation. The Board received this award Regular Board Mtg. May 24,2011 Page because the investment and rehabilitation efforts of the Ottawa Street Power 5 of 35 Station. General Manager Lark stated that the Board of Water & Light (BWL) sold all of its bonds on Monday and Tuesday, and by today at noon all $250 million had been sold. There was actually a billion dollars in priority orders. The BWL's underwriter from Bank of America stated that he believed this was the best bond issuance on Wall Street in the last six months. He thanked the Commissioners and his Administration for all of their support and hard work. COMMISSIONERS' REMARKS Commissioner Thomas congratulated Calvin Jones on his Lansing Community College Alumni Award. Commissioner Thomas also stated that the Commissioner's three appointed employees Mr. Lark, Ms. Griffin and Mr. Perkins have done an excellent job and is very happy with their performances. Chair Zerkle said tomorrow is a monumental day for the Commissioners' and the BWL employees. The process begins for the building of the new co-generation plant. She stated that tomorrow's ground breaking is a testament to the ability of Mr. Lark and his staff. Chair Zerkle spoke about the 1st Step Ceremony that will take place on Thursday. She stated this program is very special to her because of the way it reaches out to kids from different communities and gives them the opportunity to get some work experience. She said that the mentoring at the BWL has been tremendous and hopes to continue and expand this program. Commissioner Louney stated that he would like to recognize and state his appreciation for all of the effort and hard work that the BWL's staff puts into the annual updating of the Rules and Regulations and the preparation of the Budget. PUBLIC COMMENTS There were no public comments EXCUSED ABSENCE There was no motion for any excused absence. ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner Price the meeting adjourned at 5:50 p.m. M. Denise Griffin, Corporate Secretary Preliminary Minutes fled with Lansing City Clerk on June 3.2011 Final Approved Minutes riled with Lansing City Clerk on July 28,2011 Preliminary Mnutes to be Approved on July 26,2011 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT -7 May 24, 2011 =' r� k-73 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Oriive, Lansing, Michigan. r�s Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis Louney, Marilyn Plummer David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Absent: Commissioner Lain. The Corporate Secretary declared a quorum present. Commissioner Ward led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Plummer seconded by Commissioner Price to approve the minutes of the Regular Board Meeting minutes of March 2, 2011 and the Special Board Meeting minutes of May 10, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment. .................. COMMUNICATIONS None Regular Board Mtg. May 24,2011 Page 2 of 35 COMMITTEE REPORTS COMMITTEE OF THE WHOLE April 12, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, April 12, 2011. Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Tracy Thomas, Cynthia Ward, Marilyn Plummer and Sandra Zerkle. Absent: Commissioner David Price Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of March 8, 2011. Action: Carried unanimously. Be Well for Life General Manager Lark introduced Michael Flowers, Director of Human Resources who reviewed the Board of Water & Light's (BWL) newly implemented "Be Well for Life" wellness program. Michael Flowers reviewed the objectives and action plan for the "Be Well for Life" health and wellness program that was recently unveiled to Board of Water & Light's employees. He stated that this is a program to engage employees to become active and healthier. He stated there has been a total of 371 BWL employees to go through the "Be Well for Life" presentation and approximately 206 employees have signed up to-date. Mr. Flowers also reviewed the Electronic Support System, the Healthspot Kiosk, the Performance Rewards and the Progress Report as well as the Privacy and Anonymity of the program. He stated that this wellness and fitness program is a great morale builder. General Manager Lark stated that he has received a lot of positive feedback and people seem to be excited about the program. Mobile Resources Management Update General Manager Lark introduced Nick Burwell, Director of Information Technology who reviewed the new Mobile Resource Management (MRM) Regular Board Mtg. May 24,2011 Page 3 of 35 program, a work management program that involves the placement of laptop computers in trucks. Mr. Lark stated that Laura Briggs of the Information Technology Department has spent a lot of time on this project. Nick Burwell, stated that the one of the advantages of MRM is Automatic Vehicle Locating (AVL), which is a device placed in the truck that identifies exactly where a vehicle is and how it is traveling around the system which is an advantage to the BWL in case of an emergency or a job that needs immediate attention. With AVL, the BWL can determine and route the closest vehicle to the situation at hand. Another advantage of the MRM program is replacing the paper system in the Board of Water & Light's water, steam, electric delivery, electric metering, tree trimming and customer account representative's areas. This program helps the workers create a map for their daily route that is based on the amount of time that is allocated to each job. Mr. Burwell stated this system that will help the BWL be more efficient, safer and save money. REO Town Update (Informational Only) Susan Devon, Assistant General Manager and Chief Financial Officer, and Project Director for the REO Town New Co-generation Plant stated that Burns and Roe Enterprise design work is progressing very well with the assistance of the Board of Water & Light's team. Currently, they are putting together the specifications for major pieces of equipment, such as the steam boiler and the combustion and steam turbines. Ms. Devon stated that a Request for Qualifications (RFQ) has been sent out for the Construction Manager, the company that will actually build the plant, and that a total of 7 responses have been received. That list will be narrowed down and a Request for Proposal (RFP) will be sent out. The Construction Manager is expected to be selected by the middle of May. The request for architectural services for the interior of the office building was also sent out and the responses are due soon. An RFP was also sent out for architectural services for the Depot, in which 9 responses have been received and a selection will be made from that pool. Ms. Devon stated there has been a halt in the acquisition of the Historical Tax Credit because it looks like the Board of Water & Light is not going to fit into any of the qualifications based on a review of the Governor's budget. Ms. Devon stated that the BWL is moving forward on the final Bonding process for the Underwriting Service. Currently the Board of Water & Light's team is working with the Bond Advisor to finalize the official statement which is in draft form. The Board is also preparing the presentation for the rate agency meeting on April 27, 2011. Regular Board Mtg. May 24,2011 Page 4 of 35 Chili Cook-Off Update Calvin Jones, Director of Public Relations and Diversity, informed the Board of Commissioners' that this year's Chili Cook-Off will be held on Saturday, June 4, 2011 from 4:00 to 9:00 p.m. at the Adado Riverfront Park. Mr. Jones reviewed the charitable recipients and Chili Cook-Off members. He also gave special thanks to the Board of Water & Light's staff that assists with the success of the event. Other General Manager Lark announced there will be a groundbreaking ceremony on April 19th at 10:00 a.m. for the new Great Lakes Center for Utility Training. This is a partnership between Lansing Community College (LCC) and BWL. The BWL name will be on the facility. Dallas Burdick, Manager of Organizational Development & Training, stated that LCC and BWL have a long partnership with training apprentices and working to develop the work force. He said together we have created a training center which will benefit Board of Water& Light's employees directly because various training will be done at this facility. This facility will also open up training that is not available to other utilities and students that want to move into line work and related utility industry work. Lansing Community College is creating a curriculum and students will be able to obtain a utility certificate of training. Excused Absence Motion by Commissioner Zerkle seconded by Commissioner Thomas to excuse Commissioner Price from tonight's meeting. Action: Carried Unanimously. Adiourn On Motion by Commissioner Thomas, seconded by Commissioner Bossenbery, the meeting adjourned at 6:15 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE April 12, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:25 p.m. on Tuesday, April 12, 2011. Regular Board Mtg. May 24,2011 Page 5 of 35 Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were present. Absent: None Public Comments There were no public comments. Excused Absence None Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Louney to approve the Finance Committee meeting minutes of March 8, 2011. Action: Carried unanimously. Eleventh Supplement Revenue Bond Resolution General Manager Lark stated that the proposed resolution for the Eleventh Supplemental Revenue Bond Resolution relates to the proposed Bond Issuance that would fund the REO Town Plant. In August the Board approved the resolution to publish notice of the proposed bond issuance which is required. After publication of that notice, potential objecting parties had 45 days to oppose the proposed bond Issuance by referendum and there were no entities suggesting that we undertake a referendum. General Manager Lark asked that the Finance Committee forward the resolution to the full Board for consideration. General Manager Lark stated that he felt that it would be in the best interest of the Board if we had a Special Board Meeting on May 10th following the regularly scheduled Committee of the Whole and Finance Committee meetings to handle the business of the proposed resolution. Lansing Board of Water and Light ELEVENTH SUPPLEMENTAL REVENUE BOND RESOLUTION A RESOLUTION TO AUTHORIZE: • Issuance of up to $250,000,000 of Series 2011A Bonds for Moores Park Replacement Cogeneration Plant, System improvements, Capitalized Interest and costs of issuance; • Appointment of senior managing underwriter; Regular Board Mtg. May 24,2011 Page 6 of 35 • Chief Financial Officer to sell Series 2011A Bonds without further resolution; • Other matters relative to issuance, sale and delivery of Series 2011 A 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 from time to time; 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 2011A Project (as defined below); and WHEREAS, on August 4, 2010, the Board published in the City Pulse a Notice of Intent to Issue Revenue Bonds and Right to Petition for Referendum describing revenue bonds to be issued to finance costs of the Series 2011A Project, and no petitions requesting referendum as described in the Notice were filed with the City Clerk; and WHEREAS, the conditions and requirements of the Bond Resolution for the issuance of Additional Bonds of equal standing and priority of lien with outstanding bonds have been met for the issuance of the proposed revenue bonds, and the Board is ready to authorize issuance of the first series of revenue bonds to finance the Series 2011A Project. NOW, THEREFORE, BE IT RESOLVED THAT: 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 and the Series 2011 A Bonds issued pursuant to Section 18(a) of the Bond Resolution as amended by Section 13 of the 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 and amended on August 12, 2008 and June 9, 2009, the Fifth Supplemental Bond Resolution adopted by the Board April 24, 2001, the Sixth Supplemental Revenue Bond Resolution adopted Regular Board Mtg. May 24,2011 Page 7 of 35 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 January 29, 2008, and this Eleventh Supplemental Revenue Bond Resolution, and any other resolution which amends or supplements the Bond Resolution. (c) "Bonds" means the Series 2008A Bonds and the Series 2011A Bonds and any Additional Bonds of equal standing hereafter issued. (d) "Chief Financial Officer" means the Assistant General Manager and Chief Financial Officer of the Board. (e) "Reserve Requirement" shall mean the Reserve Requirement established by Section 11 of the Tenth Supplemental Revenue Bond Resolution and described in Section 10 herein. (f) "Series 1999-2005 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 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) "Series 2008A Bonds" means the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A. (h) "Series 2011A Bonds" means the Utility System Revenue Bonds, Series 2011A issued pursuant to this Eleventh Supplemental Revenue Bond Resolution. (i) "Series 2011A Construction Fund" shall mean the Series 2011A Construction Fund established pursuant to this Eleventh Supplemental Revenue Bond Resolution. (j) "Series 2011A Project" means the acquisition and construction of a Moores Park Replacement Cogeneration Plant, a combined cycle natural gas facility producing steam and electricity including two combined cycle sets, each set consisting of a combustion turbine, a heat recovery steam generator, a steam turbine and an auxiliary boiler to provide backup steam service, and System improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements. Regular Board Mtg. May 24,2011 Page 8 of 35 (k) "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. Section 2. Conditions Permitting Issuance of Additional Bonds. The Bond Resolution establishes requirements for the issuance of Additional Bonds of equal standing and priority of lien with the Outstanding Series 1999-2005 Bonds and Outstanding Series 2008A Bonds. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test required by Section 18(a) of the Bond Resolution as amended by Section 6 of the Second Supplemental Revenue Bond Resolution. The Series 2011A Bonds can be issued as Additional Bonds pursuant to the requirements of the Bond Resolution if the Board determines that the actual or augmented Net Revenues for the fiscal year ending not more than 15 months prior to the sale of Additional Bonds are 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. Section 18(a) permits Net Revenues to be augmented if the System rates, fees or charges were increased prior to the time of authorizing the Additional Bonds. On January 25, 2011 the. Board enacted rate increases. The Board has obtained the opinion of a Consulting Engineer on the amount of Net Revenues which would have resulted for the fiscal year ending June 30, 2010 had the System's billings during such time been at the increased rates. The Board has also obtained schedules prepared by Robert W. Baird & Co. (the "Financial Advisor") showing the maximum Aggregate Debt Service Requirement on the Outstanding Bonds and the Series 2011A Bonds if the Series 2011A Bonds are issued within the parameters of this resolution. Based on the opinion of the Consulting Engineer and the schedules provided by the Financial Advisor, the Board hereby determines that the augmented Net Revenues for the fiscal year ending June 30, 2010 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 2011A Bonds. The Board hereby determines that the Board is not in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Section 3. Necessity; Preliminary Approval of Plans; and Statement of Purpose. It is hereby determined to be a necessary public purpose of the Board to acquire and construct the Series 2011A Project in accordance with the plans and specifications prepared by the Board's consulting engineers, which plans and specifications are hereby approved. Section 4. Costs; Useful Life. The total cost of the Series 2011A Project is estimated to be not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) including the payment of capitalized interest and incidental Regular Board Mtg. May 24,2011 Page 9 of 35 expenses as specified in Section 5 of this resolution, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Series 2011A Project is estimated to be not less than thirty (30) years. Section 5. Payment of Cost of Protect; Bonds Authorized; Applicable Law. To pay part of the cost of acquiring and constructing all or a portion of the Series 2011A Project, including payment of all legal, engineering, financial and other expenses incident thereto and incident to the issuance and sale of the Series 2011A Bonds and capitalized interest in the amount to be determined at the time of sale of the Series 2011A Bonds, the City, acting by and through the Board, shall borrow the sum of not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) and shall issue the Series 2011A Bonds therefor pursuant to the provisions of Act 94. The remaining cost of the Series 2011A Project, if any, shall be defrayed from funds on hand and legally available for such use, or, if the principal amount of the Series 2011A Bonds is less than $250,000,000, from an additional series of bonds to be issued upon approval of a future resolution. The Series 2011A Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94. The capitalized interest to be paid from proceeds of the Series 2011A Bonds shall not exceed the amount necessary to pay interest for three years, as finally determined at the time of sale of the Series 2011 A Bonds. Section 6. Series 2011A Bond Details. The Series 2011A Bonds shall be designated as the "Utility System Revenue Bonds, Series 2011K 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 2011A Bonds. The Series 2011A 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 2011A 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 2011A Bonds, shall mature as serial bonds or term bonds on such dates as shall be determined at the time of sale of the Series 2011A Bonds but not-to-exceed thirty (30) annual maturities. The Series 2011A 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 2011A Bonds. The Series 2011A Bonds shall bear interest at a rate or rates to be determined on sale thereof, payable on January 1, 2012, or such other date as provided at the time of sale of the Series 2011A Bonds, and semi-annually thereafter on January 1 st and July 1 st of each year, provided, however, that the first interest payment date shall be not later than ten months following the delivery date of the Series 2011A Bonds. The Series 2011A Bonds shall be executed by the manual or facsimile signature of the Chairperson and the Corporate Secretary of the Board. No Series 2011A Bond shall be valid until authenticated by an authorized representative of the Transfer Agent. The Series 2011A 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 Regular Board Mtg. May 24,2011 Page 10 of 35 Financial Officer upon payment of the purchase price for the Series 2011A 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 7. Registration and Transfer. The Chief Financial Officer is hereby authorized to appoint as transfer agent for the Series 2011A 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 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 2011A 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 provided in this paragraph may be changed by the Board to conform to market practice in the future. The Series 2011A 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 2011A Bonds in book-entry-only form and to make such changes in the form of the Series 2011A Bonds within the parameters of this resolution as may be required to accomplish the foregoing. Notwithstanding the foregoing,.if the Series 2011A Bonds are held in book-entry-only form by DTC, payment of principal of and interest on the Series 2011A Bonds shall be made in the manner prescribed by DTC. The Series 2011A 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 2011A Bonds, the registered owner thereof shall deliver the Series 2011A Bonds to the Board for cancellation. Regular Board Mtg. May 24,2011 Page 11 of 35 Section 8. Deposit to Bond Reserve Account. On or prior to the date of delivery of the Series 2011A Bonds, the Board 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 Board 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 9. Series 2011A Bond Proceeds; Construction Fund. From the proceeds of sale of the Series 2011A 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 2011A Bonds, and the Board 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 2011A 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 2011A Bonds may be deposited in the Bond Reserve Account or the Series 2011A Construction Fund in consultation with Bond Counsel. The capitalized interest shall next be deposited in the Redemption Fund, and the Board may take credit for the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of interest on the Series 2011 A Bonds. There shall next be deposited in the Bond Reserve Account an amount, if any, designated at the time of sale of the Series 2011A 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 2011A Bonds shall be deposited in the Series 2011A 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 2011A Project being financed with proceeds of the Series 2011A Bonds and any costs of engineering, legal, financial, bond insurance premiums and other expenses incident thereto and to the issuance of the Series 2011A Bonds. Any unexpended balance of the proceeds of sale of the Series 2011A Bonds remaining in the Construction Fund after completion of the Series 2011A 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 be used 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 calling Series 2011A Bonds for redemption or for the purpose of purchasing Series 2011A Bonds on the open market at not more than the fair market value thereof but not more than the price at which the Series 2011A Bonds may next be called for redemption. Regular Board Mtg. May 24,2011 Page 12 of 35 Section 10. Reserve Requirement. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the Reserve Requirement as defined in Section 1 (ff) 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 Series 1999-2005 Bonds, "Reserve Requirement" shall mean the following as established by Section 11 of the Tenth Supplemental Revenue Bond Resolution: 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 11. Rate Covenant. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board will comply with the Section 9 of the Bond Resolution, as previously amended by Section 5 of the Second Supplemental Revenue Bond Resolution, and 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 150% 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. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 12 of the Tenth Supplemental Revenue Bond Resolution. 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. Section 12. Additional Bonds Test. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test imposed by Section 6 of the Second Supplemental Revenue Bond Resolution adopted January 11, 1994. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 13 of the Tenth Supplemental Revenue Bond Resolution. 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 Regular Board Mtg. May 24,2011 Page 13 of 35 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 Board shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Additional Bonds may be issued as provided in Section 18 subparagraphs (b) or (c) of the Bond Resolution. Regular Board Mtg. May 24,2011 Page 14 of 35 Section 13. Covenants. The Board covenants and agrees as follows with the holders of the Series 2011A Bonds as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest: (a) The Board will cause the portion of the Series 2011A Project being financed with proceeds of the Series 2011A Bonds to be acquired and constructed promptly and in accordance with the plans and specification therefor. (b) The Board covenants and agrees with the Registered Owners of the Series 2011A Bonds that as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest, the Board shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Series 2011 A Bonds pursuant to the Internal Revenue Code in such a manner as to cause the Series 2011A Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The Board 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 2011A 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 Board with the Series 2011 A Bonds. (c) The Board will not issue additional bonds of prior standing to the Series 2011A Bonds. Section 14. Series 2011A Bond Form. The Series 2011A 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 2011A Bonds established upon sale thereof: BOND NO. R- UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTIES OF INGHAM AND EATON CITY OF LANSING LANSING BOARD OF WATER AND LIGHT UTILITY SYSTEM REVENUE BOND, SERIES 2011A Date of Interest Rate Date of Maturity Original Issue CUSIP Registered Owner: Cede & Co. Principal Amount: Regular Board Mtg. May 24,2011 Page 15 of 35 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 [interest payment date] and semiannually thereafter. Principal of this bond is payable at the designated corporate trust office of [transfer agent], 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; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A, the Water Supply, Steam and Electric Utility System 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, 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. The pledge of Net Revenues and the statutory lien are senior in priority of lien to the Water Supply, Steam, Chilled Water and Electric Utility System Subordinate Lien Revenue Refunding Bond, Series 2009A (Federally Taxable) 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$[principal amount], issued pursuant to a Bond Resolution adopted by the Board on October 24, 1989, as amended and supplemented from time to time, including by a Eleventh Supplemental Revenue Bond Resolution adopted by the Board on [date of resolution] (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 financing costs of improvements to the System, [making a deposit to a bond reserve account,] and paying the costs of issuing the bonds. Regular Board Mtg. May 24,2011 Page 16 of 35 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 maturing on or prior to [date] 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 [date] shall be subject to redemption prior to maturity without a premium, at the option of the Board, in such order of maturity as the Board shall determine and within any maturity by lot, on any date on or after [date], 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. 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 Board. 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. Regular Board Mtg. May 24,2011 Page 17 of 35 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 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 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 its name 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 Regular Board Mtg. May 24,2011 Page 18 of 35 By Chairperson Countersigned: By Corporate Secretary [INSERT STANDARD FORMS OF CERTIFICATE OF AUTHENTICATION AND ASSIGNMENT] Section 15. Negotiated Sale. Based upon the advice of the Financial Advisor, given the volatile nature of the bond market, in order to enable the Board to select and adjust terms for the Series 2011A Bonds, 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 2011A Bonds, and to achieve sale efficiencies so as to reduce the cost of issuance and interest expense, it is determined in the best interests of the Board to negotiate the sale of the Series 2011A Bonds. The Board hereby determines to sell the Series 2011A Bonds at a negotiated sale instead of a competitive sale. Section 16. Appointment of Senior Managing Underwriter. Bank of America Merrill Lynch (the "Underwriter") is hereby named as senior managing underwriter for the Series 2011A Bonds. The Board reserves the right to name additional co-managers and/or to develop a selling group, and the Chief Financial Officer is authorized to name additional co-managers and/or to develop a selling group in consultation with the Financial Advisor. By adoption of this resolution the Board assumes no obligations or liability to the Underwriter for any loss or damage that may result to the Underwriter from the adoption of this resolution, and all costs and expenses incurred by the Underwriter in preparing for sale of the Series 2011A Bonds shall be paid from the proceeds of the Series 2011A Bonds, if the Series 2011A Bonds are issued, except as may be otherwise provided in the Bond Purchase Agreement for Series 2011A Bonds. Section 17. 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 recommends 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, 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 18. Official Statement. The Chief Financial Officer is authorized to approve circulation of a Preliminary Official Statement describing the Series 2011A Bonds and, after sale of the Series 2011A Bonds, to prepare, execute and deliver a final Official Statement. Section 19. Continuing Disclosure. The Chief Financial Officer is hereby directed to execute and deliver, prior to delivery of the Series 2011A Bonds, a Regular Board Mtg. May 24,2011 Page 19 of 35 written continuing disclosure undertaking in order to enable the Underwriter 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 20. Sale of Series 2011A Bonds. The Chief Financial Officer is authorized, in consultation with the Financial Advisor, to negotiate a Bond Purchase Agreement with the Underwriter, and to accept an offer by the Underwriter to purchase the Series 2011A Bonds without further resolution of this Board. This authorization includes, but is not limited to, determination of original principal amount of the Series 2011A Bonds; the prices at which the Series 2011A Bonds are sold; the date of the Series 2011A Bonds; the schedule of principal maturities and whether the Series 2011A 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 2011A Bonds; and application of the proceeds of the Series 2011A Bonds including the amount of capitalized interest, if any. 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. The Chief Financial Officer is authorized to execute the Bond Purchase Agreement. The net interest cost of the Series 2011A Bonds shall not exceed 8.00%. The first maturity of principal on the Series 2011A Bonds shall occur no earlier than 2012, and the date of the final maturity shall not cause the Series 2011A Bonds to exceed thirty (30) annual maturities. The Underwriter's discount for the Series 2011A Bonds shall not be greater than 1.00% of the principal amount of the Series 2011A Bonds, net of original issue discount or premium. In making such determinations the Chief Financial Officer is authorized to rely upon data and computer runs provided by the Financial Advisor. Section 21. 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 the Manager of Finance and Planning, the General Manager, or a person designated by the Chief Financial Officer or the Manager of Finance and Planning 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, sale and delivery of the Series 2011A 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 rating agency fees, bond insurance premiums, transfer agent fees, financial advisor fees, bond counsel fees, costs of printing the Series 2011A Bonds and the preliminary and final official statements, and any other costs necessary to accomplish sale and delivery of the Series 2011A Bonds. Section 22. Applicability of the Outstanding Bond Resolutions. Except to the extent supplemented or otherwise provided in this resolution, all of the provisions and covenants provided in the Bond Resolution shall apply to the Series 2011A Bonds issued pursuant to provisions of this resolution, such provisions of the Bond Resolution being made applicable to the Series 2011A Bonds herein authorized. Regular Board Mtg. May 24,2011 Page 20 of 35 Section 23. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. Section 24. 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 25. 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 26. 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 and the users of the System. In accordance with the provisions of Section 6 of Act 94, this resolution shall become effective immediately upon its adoption. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Special meeting held on Tuesday, May 10, 2011, at 6:30 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. We 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 We 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 Regular Board Mtg. May 24,2011 Page 21 of 35 Motion by Commissioner Thomas, seconded by Commissioner Plummer to forward the proposed resolution for the Eleventh Supplemental Revenue Bond to the full Board for consideration. Action: Carried Unanimously Other Finance Chair Bossenbery stated next month the Board will review the budget. Adiourn On Motion by Commissioner Louney, seconded by Commissioner Thomas, the meeting adjourned at 6:35 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee COMMITTEE OF THE WHOLE May 10, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, May 10, 2011. Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Tracy Thomas, Cynthia Ward, Marilyn Plummer, David Price and Sandra Zerkle. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Ward, seconded by Commissioner Thomas to approve the Committee of the Whole meeting minutes of April 12, 2011. Action: Carried unanimously. Rules and Regulations Electric ♦ Water♦ Steam ♦ Chilled Water♦ Electric Fees & Charges ♦ Water Fees & Charges General Manager Lark stated that the Rules and Regulations update is done on an annual basis to inform customers of current fees and charges. This is a code of conduct or a hand book as to how the Board of Water & Light interacts with Regular Board Mtg. May 24,2011 Page 22 of 35 customers, particularly with respect to fees and charges. General Manager Lark stated that a lot of work goes into the yearly update. Kellee Christensen, Manager of Customer Projects and Development, stated that a lot of analysis is done to make sure that the Board of Water & Light is complying with certain codes in a timely manner to keep Rules and Regulations current. General Manager Lark asks that the Committee forward the resolution approving the Rules and Regulations for Electric, Water, Steam and Chilled Water Utility Services to be effective July 1, 2011 to the full Board for approval. Motion by Commissioner Price, seconded by Commissioner Bossenbery to move the resolution for the Rules and Regulations to full Board for approval. Action: Motion Carried Renewable Energy Plan Update General Manager Lark said the State of Michigan Public Service Commission (PSC) requires that the Board of Water & Light provide the Board of Commissioners a Biennial Update on their Renewable Energy Plan. The Renewable Energy Plan Update is reviewed by the PSC and the public must be allowed to comment on the Update. The Biennial Update has to be brought to the Board's attention so that they know that they are aware that public comment is being solicited. The comment period will start May 16th and it will be posted on our internet. Sue Warren, Manager of Marketing and Business Strategies, stated that PA 295 was passed in October of 2008. It is the legislation that requires the Renewable Energy Program and an Energy Optimization Program. The Board did update our financial analyses and we are required to let our customers comment on this. The law requires year-end results from those programs to be filed with the Public Service Commission (PSC) and a summary provided to customers. Ms. Warren stated that the Board of Water & Light is exceeding requirements and goals for both Renewable Energy and Energy Optimization. IBEW 352 Organization Efforts (Informational Only) General Manager Lark presented the Board with IBEW 352 material that has been circulated to Board of Water & Light employees. He stated that he is not aware of any problems with the Union and has respect for their leadership. General Manager Lark stated that he wanted to make the Board aware of the information that has been circulating. He feels if employees want to be unionized, that is fine; however, employees should be provided all and as much information possible to help them make the best decision possible. Other o REO - Cogeneration Plant Update Regular Board Mtg. May 24,2011 Page 23 of 35 General Manager Lark spoke about his recent trip to New York to visit to the bond rating agencies of Moody's and Standards & Poor's. Mr. Lark stated that the bonds are rated by these agencies before they go out for issuance. He stated this was his third time participating in the bond process since he has been at the BWL, and believes that he and Susan Devon, Assistant General Manager and Chief Financial Officer persuasively presented the Board of Water & Light's case. General Manager Lark said the importance of the advance approval of the rate increases for the power plant was very favorable to the Board of Water& Light for receiving a good rating. Ms. Devon said the trip to New York went well and that a lot of significant work was done ahead of time. She said Mr. Lark did a superb job and she is proud to be a part of the Board of Water & Light. Ms. Devon stated that the Administration will be issuing the Preliminary Official Statement (POS) on Friday, May 13th as the first step towards the sale of the bonds. The Board of Commissioners will be receiving an electronic copy of the POS. Next week the Administration will be preparing an internet road show presentation which will include Susan Devon, J. Peter Lark and Warren Creamer, the Board's bond adviser. The internet presentation will be presented to future possible investors. On May 22"d there will be an advertisement in the Lansing State Journal announcing the sale of the Bonds. The Board of Water & Light's website will have a link that will include the POS, financial statement, and the internet road show presentation. Bond sales will be taking place on May 23rd and 24th. Then, on June 15th, the Board of Water & Light will close the deal. Ms. Devon said the two architects for the REO project have been selected. For the Depot; Cornerstone, known for their historical renovation, was selected; and FTCH was selected as the office interior architects. They are evaluating responses on bids and hope to have all responses awarded by between June 1st and 15th. She said they continue to discuss the pipeline. Construction will begin on June 13, 2011 for the steam vault. Ms. Devon reminded everyone about the Ground Breaking Ceremony on May 25th. o Hometown Power 5K General Manager Lark introduced Bob Perialas, Manager of Customer Service. Mr. Perialas provided an update on the 3rd Annual Hometown Power 5K. He said last year the Board of Water & Light's entire 5K event was paid for through sponsorship. He said the Board of Water & Light was able to donate $3,000.00 to Pennies for Power at no cost to the BWL. Mr. Perialas said they are predicting to have over 300 participants this year and are looking forward to increasing this year's donation to Pennies for Power, the program that helps low income families with their utility payments. The 5K event will take place August 13th at 9:00 a.m. Regular Board Mtg. May 24,2011 Page 24 of 35 This year there will be the introduction of the new family rate of$58.00 for 4 people with a $10.00 charge per additional person. Marilyn Plummer stated on behalf of the Juneteenth Committee she would like to invite everyone to the Annual Juneteenth celebration to celebrate the historical significance of the oldest African American Holiday. The event will kick off on June 16, 2011. Excused Absence None Adiourn On Motion by Commissioner Plummer, seconded by Commissioner Price, the meeting adjourned at 6:20 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE May 10, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:00 p.m. on Tuesday, May 10, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were present. Also present were Board Members David Price and Frank Lain. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Thomas, seconded by Commissioner Louney to approve the Finance Committee meeting minutes of April 12, 2011. Action: Carried unanimously. FY 2012 Budget General Manager J. Peter Lark provided an overview of the proposed financial plan for fiscal year (FY) 2012 for the Lansing Board of Water and Light (BWL). He stated that the FY 12 Operating Budget that is being proposed resulted in a reduction in operations and maintenance expenses from the level approved in FY Regular Board Mtg. May 24,2011 Page 25 of 35 2011. These reductions show that we have been very careful with the cash we have and that we are spending very carefully. All of our operations budgets have decreased with the exception of strategic planning which reflect cost increases related to environmental. The budget allows for continued service to its utility customers and future operations and sustainability for the plant facilities. The total proposed budget for FY 2012 is $435.5 million, of which operations and maintenance comprise $279 million and capital budget is approximately $156 million. Capital expenditures for fiscal years 2012-2017 are estimated at $462 million. The budget presentation materials included the following information: sales forecast, revenue assumptions, MISO market participation, comparison of energy cost, operating expense assumptions, operations and maintenance budget by category, budgeted net income/cash flow, comparative income statement (FY2012/20011), budget comparison by division and department, and budgeted return on Ratebase. SALES FORECAST Utility FY12 Forecast FY11 Budget % '12 Forecast To '11 Budget Electric— Retail (MWh) 2,248,434 2,200,585 2.2% Electric-Wholesale (MWh) 1,114,635 953,744 16.9% Electric (MWh) 3,363,069 3,154,329 6.6% Water (ccf) 9,223,158 9,973,155 -5.2% Steam (Mlb) 743,000 742,711 4.4% Chilled Water (tnhrs) 10,379,126 9,968,925 7.7% Electric: -Retail sales volumes by customer class are expected to remain at the same level as FY 2011 with the exception of commercial sales which are expected to grow by approximately 4.2 %. -Wholesale sales volumes are expected to increase as a result of increased plant availability in FY 2012. Water: -Retail sales volume expectations have been reduced to better represent actual sales volumes experienced in recent years. Steam: -Steam sales volumes are expected to be consistent with FY 2011 Chilled Water: -Chilled water sales volume increases are attributed to recent customer additions, including the State Police Headquarters and the Accident Fund Building. Revenue Assumptions *Electric Retail — No rate increases anticipated for FY 2012 Regular Board Mtg. May 24,2011 Page 26 of 35 *Electric Wholesale — Margins continue to be affected by depressed market prices •Water, Steam, & Chilled Water Utilities —Anticipated increases are included in the budget MISO Market Participation As of January 1, the BWL officially entered the MISO market as a registered participant. The BWL also now has the benefit of an improved ability to sell excess generation through negotiated sales as well as the ability to participate in the day ahead markets (rather than just the real time market). Operating Expense Assumptions •Reviews held with each department •Overall FY 2012 O&M decrease of 6.8% compared to final FY 2011 Budget* •Current CPI Index —1.6% inflation •Budget assumes 712 FTE's as compared to 718 FTE's in the FY 2011 budget. •Wage and salary increases = 3% for bargaining unit employees only, as required by contract. General Manager Lark asks that the resolution accepting the Fiscal Year 2012 Operating and Capital Budget be forwarded to the full Board consideration. PROPOSED RESOLUTION Fiscal Year 2012 Operating and Capital Budget RESOLVED, that the annual Operating Budget covering Fiscal Year 2012 is hereby approved as presented; and RESOLVED, that the Fiscal Year 2012 Capital Budget is hereby approved as presented; and RESOLVED, that the forecast for capital expenditures for the Fiscal Years 2012- 2017 is hereby accepted as presented; and RESOLVED FURTHER, that the Corporate Secretary be directed to make the appropriate filings with the 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 maintenance budget of$279.0 million and a capital budget of$156.5 million for Fiscal Year 2012. $44.8 million of the Fiscal Year 2012 capital budget is to provide for on-going services to our utility customers and to sustain our plant facilities for future operations. The remaining$111.7 million will support the start of construction of the Reo Town Plant. Capital expenditures for Fiscal year 2012-2017 are estimated to be$462 Regular Board Mtg. May 24,2011 Page 27 of 35 million. Staff recommends that the Finance Committee approve these budgets and resolution for presentation and adoption by the Board at its May 24, 2011 Board meeting. Finance Chair Bossenbery stated that she spoke with Corporate Secretary Griffin and Internal Auditor Perkins regarding their budgets. There is a minimal increase in the Internal Auditor's and Corporate Secretary's budget, the Board's budget remains the same and those figures are all included in the complete budget. Motion by Commissioner Thomas, seconded by Commissioner Louney to forward the FY 2012 Operating and Capital Budget Resolution to the full Board for consideration. Action: Motion Carried Internal Audit Status Report Internal Audit Status Report Internal Auditor Phil Perkins presented an overview of Internal Auditors Status Report that included: Risk Assess ments/Scoping Review Status • Four financial risk assessment/scoping reviews are complete: -Expenditures & Accounts Payable -Inventories (Materials, Equipment & Fuel) -Equity Accounts -Cash & Treasury Three remain: -Commitments & Contingencies (85% complete) -Record & Monitor Debt (over 50% complete) -Taxes (almost complete) -All of the above will be completed by or before June 30, 2011. -We will also start a Procurement Card audit in May at the request of the Assistant GM & CFO. Annual Audit Planning for FY2012 1. Basic premise—the audit plan is a product of the Internal Auditor with significant input from Management and advice and consent from the Finance Committee and Board. 2. Assessment of Company Risks is a Key Aspect of Planning • Annual risk assessment is required by Institute of Internal Auditing Standards. • Risks reviewed include high-level Strategic Risks (Environmental, Other Regulatory, Economic, Major Changes, etc.) and Departmental/Functional Risks (application of 10 identified risk factors to auditable activities, operational, financial, fraud risks, etc.) • Discussions are held about how the identified risks may pertain to potential audit topics. Regular Board Mtg. May 24,2011 Page 28 of 35 3. The plan should be flexible enough to allow for unanticipated needs and include resource estimates as well as proposed audit engagements. 4. The final audit plan for FY2012 should be reviewed by the Internal Auditor and Senior Management, and approved by the Finance Committee. External Peer Review — Recommended Approach • An external peer review of the Internal Audit activity is required every 5 years per Institute of Internal Auditors Standards. These standards are as incumbent upon the internal auditing profession as the Statements of Auditing Standards promulgated by the AICPA are to our external auditors. • Internal Audit is due for an external review by no later than the last quarter of FY2012. • Our goal is to have the peer review performed at the lowest possible cost by a professional external party with experience in performing such reviews. • Recommendation is to use a peer review team from the Association of Local Government Auditors (ALGA): • Lowest out-of-pocket cost provider (they charge for travel/business expenses only). • Team size is two people for an Internal Audit Department of our size (estimated cost $4,000 or less). • In return for ALGA's services, BWL Internal Audit will need to provide a team member periodically (e.g., every three years on average) for peer reviews at other locations. The reviews normally take a week to perform. Finance Chair Bossenbery commended Internal Auditor Perkins and Assistant General Manager and Chief Financial Officer Susan Devon for working together on Audit Procedures. Internal Auditor Perkins presented information on the Association of Local Government Auditors (ALGA) and their peer review program. Mr. Perkins stated that ALGA only charges their travel and other business expenses to perform the mandatory (every 5 years) external review and therefore would be a cost- effective solution. In exchange, the BWL Internal Audit Director and Associate Internal Auditor will need to support external peer reviews at other locations on an average of once every three years. This would accrue indirect benefits of benchmarking and best practice sharing from other internal audit groups. Mr. Perkins recommended that he be allowed to proceed with ALGA as the external peer review provider and asked the Finance Committee to approve his recommendation. Motion by Commissioner Louney, seconded by Commissioner Plummer to approve Internal Auditors Perkin's recommendation that he be allowed to participate with ALGA as an external peer provider. Action: Motion Carried Regular Board Mtg. May 24,2011 Page 29 of 35 Other Board Chair Zerkle congratulated Phil Perkins on his recently acquired Auditor Information System (IT) Certification. Chair Zerkle ask Mr. Perkins if the new certification will allow him to do more accurate IT audits. In response Internal Auditor Perkins stated this does give him more knowledge, however he still needs to gain experience. Everyone congratulated Mr. Perkins on his accomplishment. Adjourn On Motion by Commissioner Plummer, seconded by Commissioner Thomas, the meeting adjourned at 6:55 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee HUMAN RESOURCE COMMITTEE May 17, 2011 The Human Resource Committee of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:00 p.m. on Tuesday, May 17, 2011. Human Resource Committee Chairperson Tracy Thomas called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Tracy Thomas, Marilyn Plummer and Sandra Zerkle. Also present were Commissioner Cynthia Ward. Absent: Commissioner Frank Lain. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Zerkle to approve the Human Resource Committee meeting minutes of July 20, 2010. Action: Carried unanimously. Succession Planning General Manager Lark introduced Board of Water & Light's General Counsel and Executive Director of Employment Affairs, Brandie Ekren, who reviewed the Succession Planning Plan. Regular Board Mtg. May 24,2011 Page 30 of 35 Ms. Ekren stated that the Executive Staff has been working on the Succession Plan for over a year. Succession Planning is the process of identifying and staffing critical positions through recruitment and identification of leadership talent and cultivation of this talent training and mentoring. The Lansing Board of Water and Light's program has four key components: Critical Planning, Leadership Development, Mentoring and Coaching and Employee Recruitment and training. Bond Rating Update General Manager Lark announced that the BWL has received excellent news. Moody's and Standard & Poor's have both affirmed our bond ratings Diversity Field Trips Update/Introduction of New manger (Information Only) General Manager Lark introduced the new Manager of Diversity Daryl Hibbert. Mr. Hibbert stated that he was honored to be at tonight's meeting to speak about the Board of Water & Light's public relations and diversity program. Mr. Hibbert stated that bringing people together to create excellent service is what we do, here at the Lansing Board of Water & Light. Our Public Relations and Diversity program helps us to create excellence for our customers and our employees. He stated that the objective of the public relations and diversity program is to educate, train and connect people with communities. Mr. Hibbert said that he was thankful for the tremendous support and latitude that he has received from Executive Staff and Calvin Jones, Director of Public Relations and Diversity. He said that he has a great staff and recognized Tansay Carter from his staff. FY 2011 Board Appointee Performance Review— General Manager General Manager Performance Review General Manager J. Peter Lark, requested a closed session for the purpose of receiving his contractual year-end performance evaluation as permitted. Motion by Commissioner Zerkle, seconded by Commissioner Plummer to go into closed session. Action: Carried unanimously. The Human Resource Committee meeting wentin to closed session at 5:45 p.m. Motion by Commissioner Plummer, seconded by Commissioner Zerkle that the Human Resource Committee return to open session. Action: Carried unanimously Regular Board Mtg. May 24,2011 Page 31 of 35 The Human Resource Committee meeting reconvened in open session at 6:15 p.m. Upon conclusion of the closed session, the Human Resource Committee took the following action: Motion by Commissioner Zerkle and seconded by Commissioner Plummer to reappoint Mr. Lark as the Director and General Manager for Fiscal Year 2012. Action: Carried unanimously Motion by Commissioner Zerkle, seconded by Commissioner Plummer to authorize the Board Chair to finalize the details of Mr. Lark's contract with Legal counsel. Action: Motion Carried FY 2011 Board Appointee Performance Review— Internal Auditor Internal Auditor Performance Review Internal Auditor Phil Perkins requested a closed session for the purpose of receiving his contractual year-end performance evaluation as permitted. Motion by Commissioner Plummer, seconded by Commissioner Zerkle to go into closed session. Action: Carried unanimously. The Human Resource Committee meeting went into closed session at 6:21 p.m. Motion by Commissioner Zerkle, seconded by Commissioner Thomas that the Human Resource Committee return to open session. Action: Carried unanimously The Human Resource Committee meeting reconvened in open session at 6:50 p.m. Upon conclusion of the closed session, the Human Resource Committee took the following action: Motion by Commissioner Zerkle and seconded by Commissioner Plummer to reappoint Mr. Perkins as the Internal Auditor for Fiscal Year 2012 Action: Carried unanimously Motion by Commissioner Zerkle, seconded by Commissioner Plummer to authorize the Board Chair to finalize the details of Mr. Perkins contract with Legal counsel. Regular Board Mtg. May 24,2011 Page 32 of 35 Action: Motion Carried FY 2011 Board Appointee Performance Review— Corporate Secretary Corporate Secretary Performance Review Corporate Secretary M. Denise Griffin requested a closed session for the purpose of receiving her contractual year-end performance evaluation as permitted. Motion by Commissioner Plummer, seconded by Commissioner Thomas to go into closed session. Action: Carried unanimously. The Human Resource Committee meeting went into closed session at 6:52 p.m. Motion by Commissioner Zerkle, seconded by Commissioner Plummer that the Human Resource Committee return to open session. Action: Carried unanimously The Human Resource Committee meeting reconvened in open session at 7:12 p.m. Upon conclusion of the closed session, the Human Resource Committee took the following action: Motion by Commissioner Zerkle and seconded by Commissioner Plummer to reappoint Ms. Griffin as the Corporate Secretary for Fiscal Year 2012. Action: Motion Carried Motion by Commissioner Zerkle, seconded by Commissioner Plummer to authorize the Board Chair to finalize the details of Ms. Griffin's contract with Legal counsel. Action: Motion Carried Human Resource Chair Tracy Thomas stated that the contracts for the three Board Appointed employees will be prepared and ready for signature at the July 26, 2011 Regular Board Meeting. The contracts are effective July 1, 2011. Other There was no motion for any Excused Absence There being no further business, the Human Resource Committee meeting adjourned at 7:16 p.m. Regular Board Mtg. May 24,2011 Page 33 of 35 Respectfully submitted, Tracy Thomas, Chair Human Resource Committee MANAGER'S RECOMMENDATIONS General Manager J. Peter Lark stated on May 10, 2011 the Finance Committee approved the budget that is before the Board of Commissioners tonight. He asked that the Board approve the Operating and Maintenance Budget of$279 million as well as the Capital Budget of$156.5 million for FY 2012, which includes $44.8 million for the FY capital budget on-going services, as well as the remaining $111.7 million for the construction of the REO Town Plant. Mr. Lark also asked that the Board accept the Capital Expenditures for Fiscal Years 2012- 2017. RESOLUTION #2011-05-02 Fiscal Year 2012 Operating and Capital Budget RESOLVED, that the annual Operating Budget covering Fiscal Year 2012 is hereby approved as presented; and RESOLVED, that the Fiscal Year 2012 Capital Budget is hereby approved as presented; and RESOLVED, that the forecast for capital expenditures for the Fiscal Years 2012- 2017 is hereby accepted as presented; and RESOLVED FURTHER, that the Corporate Secretary be directed to make the appropriate filings with the Lansing City Clerk's office and the Mayor's office in accordance with the Lansing City Charter regarding the above actions. -------------------- Motion by Commissioner Bossenbery, seconded by Commissioner Price to approve the Fiscal Year 2012 Operating and Capital Budget and accept the forecast for capital expenditures for the Fiscal Years 2012-2017 as presented. Action: Carried unanimously. General Manager Lark stated that the updated Rules and Regulations were presented to the Committee of the Whole on May 10, 2011. The Committee was provided with a copy of the proposed Rules & Regulations with all of the changes identified in the new fee schedule attachments. Mr. Lark stated that this is an annual amendment to the Electric, Water, Steam and Chilled Water Rules and Regulations and the purpose of this is to update any fees and charges, as well as to amend any other rules that require updating. Regular Board Mtg. May 24,2011 Page 34 of 35 RESOLUTION #2011-05-03 Rules and Regulations for Electric, Water, Steam & 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, 2011. -------------------------------- Motion by Commissioner Price, seconded by Commissioner Plummer, to approve the Rules and Regulations for Electric, Water, Steam, and Chilled Water Utility Services to be effective July 1, 2011. Chair Zerkle stated that there was very little change in the Rules and Regulations. UNFINISHED BUSINESS There was no Unfinished Business NEW BUSINESS There was no New Business RESOLUTIONS Resolutions were adopted under Manager's Recommendations MANAGER'S REMARKS General Manager Lark stated that the design company of Ciesa Design that did the Board of Water & Light's 2010 Annual Report won an Addy Award for the report. Mark Nixon masterminded the report and Heidi Myer masterminded all of the financial part. General Manager Lark recognized Calvin Jones for receiving the Lansing Community College Alumni of the year award. Mr. Lark stated that Calvin is a key player at the Board of Water & Light and that his intergovernmental relation work is second to none. Calvin Jones, Director of Public Relations and Diversity stated that when he was notified that he had been nominated and received the Alumni of the year award he was pleasantly surprised. He thanked General Manager Lark and Susan Devon, Assistant General Manager and Chief Financial Officer for providing great leadership and making it possible for Board of Water & Light employees to grow. He said that he is blessed to be here at the Board of Water & Light. General Manager Lark announced that the Board of Water & Light 2011 received the Governor's Award for Historic Preservation. The Board received this award Regular Board Mtg. May 24,2011 Page 35 of 35 because the investment and rehabilitation efforts of the Ottawa Street Power Station. General Manager Lark stated that the Board of Water & Light (BWL) sold all of its bonds on Monday and Tuesday, and by today at noon all $250 million had been sold. There was actually a billion dollars in priority orders. The BWL's underwriter from Bank of America stated that he believed this was the best bond issuance on Wall Street in the last six months. He thanked the Commissioners and his Administration for all of their support and hard work. COMMISSIONERS' REMARKS Commissioner Thomas congratulated Calvin Jones on his Lansing Community College Alumni Award. Commissioner Thomas also stated that the Commissioner's three appointed employees Mr. Lark, Ms. Griffin and Mr. Perkins have done an excellent job and is very happy with their performances. Chair Zerkle said tomorrow is a monumental day for the Commissioners' and the BWL employees. The process begins for the building of the new co-generation plant. She stated that tomorrow's ground breaking is a testament to the ability of Mr. Lark and his staff. Chair Zerkle spoke about the Vt Step Ceremony that will take place on Thursday. She stated this program is very special to her because of the way it reaches out to kids from different communities and gives them the opportunity to get some work experience. She said that the mentoring at the BWL has been tremendous and hopes to continue and expand this program. Commissioner Louney stated that he would like to recognize and state his appreciation for all of the effort and hard work that the BWL's staff puts into the annual updating of the Rules and Regulations and the preparation of the Budget. PUBLIC COMMENTS There were no public comments EXCUSED ABSENCE There was no motion for any excused absence. ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner Price the meeting adjourned at 5:50 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes fled with Lansing City Clerk on June 3,2011 Approved: May 24, 2011 W Hn—m—Peopfe.Homiiatin Rowe:, r"' N LANSING BOARD OF WATER AND LIGHT BOARD OF COMMISSIONERS SPECIAL MEETING MINUTES �` -= F` I May 10, 2011 The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Marilyn Plummer, David Price, Tracy Thomas, Cynthia Ward and Sandra Zerkle. Absent: None The Secretary declared a quorum present. Chairperson Zerkle called the meeting to order at 7:00 p.m. PUBLIC COMMENT THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANYAGENDA 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 General Manager Lark stated that this resolution is to authorize up to $250 Million of Series 2011A Bond for the Moores Park Replacement Cogeneration Plant and other system improvement and asks that the Board approve the Eleventh Supplemental Revenue Bond Resolution. He also stated that the Resolution was approved by Finance Committee on April 12, 2011. Special Board Meeting. May 10,2011 Page 2 of 19 RESOLUTION#2011-05-01 Lansing Board of Water and Light ELEVENTH SUPPLEMENTAL REVENUE BOND RESOLUTION A RESOLUTION TO AUTHORIZE: Issuance of up to $250,000,000 of Series 2011A Bonds for Moores Park Replacement Cogeneration Plant, System improvements, Capitalized Interest and costs of issuance; • Appointment of senior managing underwriter; • Chief Financial Officer to sell Series 2011A Bonds without further resolution; • Other matters relative to issuance, sale and delivery of Series 2011A 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 from time to time; 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 2011A Project (as defined below); and WHEREAS, on August 4, 2010, the Board published in the City Pulse a Notice of Intent to Issue Revenue Bonds and Right to Petition for Referendum describing revenue bonds to be issued to finance costs of the Series 2011A Project, and no petitions requesting referendum as described in the Notice were filed with the City Clerk; and WHEREAS, the conditions and requirements of the Bond Resolution for the issuance of Additional Bonds of equal standing and priority of lien with outstanding bonds have been met for the issuance of the proposed revenue bonds, and the Board is ready to authorize issuance of the first series of revenue bonds to finance the Series 2011 A Project. NOW, THEREFORE, BE IT RESOLVED THAT: 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: Special Board Meeting. May 10,2011 Page 3 of 19 (a) "Additional Bonds" means any Additional Bonds of equal standing with the Series 2008A Bonds and the Series 2011A Bonds issued pursuant to Section 18(a) of the Bond Resolution as amended by Section 13 of the 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 and amended on August 12, 2008 and June 9, 2009, 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, the Tenth Supplemental Revenue Bond Resolution adopted on January 29, 2008, and this Eleventh Supplemental Revenue Bond Resolution, and any other resolution which amends or supplements the Bond Resolution. (c) "Bonds" means the Series 2008A Bonds and the Series 2011A Bonds and any Additional Bonds of equal standing hereafter issued. (d) "Chief Financial Officer" means the Assistant General Manager and Chief Financial Officer of the Board. (e) "Reserve Requirement" shall mean the Reserve Requirement established by Section 11 of the Tenth Supplemental Revenue Bond Resolution and described in Section 10 herein. (f) "Series 1999-2005 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 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) "Series 2008A Bonds" means the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A. Special Board Meeting. May 10,2011 Page 4 of 19 (h) "Series 2011A Bonds" means the Utility System Revenue Bonds, Series 2011A issued pursuant to this Eleventh Supplemental Revenue Bond Resolution. (i) "Series 2011A Construction Fund" shall mean the Series 2011A Construction Fund established pursuant to this Eleventh Supplemental Revenue Bond Resolution. (j) "Series 2011A Project" means the acquisition and construction of a Moores Park Replacement Cogeneration Plant, a combined cycle natural gas facility producing steam and electricity including two combined cycle sets, each set consisting of a combustion turbine, a heat recovery steam generator, a steam turbine and an auxiliary boiler to provide backup steam service, and System improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements. (k) "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. Section 2. Conditions Permitting Issuance of Additional Bonds. The Bond Resolution establishes requirements for the issuance of Additional Bonds of equal standing and priority of lien with the Outstanding Series 1999-2005 Bonds and Outstanding Series 2008A Bonds. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test required by Section 18(a) of the Bond Resolution as amended by Section 6 of the Second Supplemental Revenue Bond Resolution. The Series 2011A Bonds can be issued as Additional Bonds pursuant to the requirements of the Bond Resolution if the Board determines that the actual or augmented Net Revenues for the fiscal year ending not more than 15 months prior to the sale of Additional Bonds are 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. Section 18(a) permits Net Revenues to be augmented if the System rates, fees or charges were increased prior to the time of authorizing the Additional Bonds. On January 25, 2011 the Board enacted rate increases. The Board has obtained the opinion of a Consulting Engineer on the amount of Net Revenues which would have resulted for the fiscal year ending June 30, 2010 Special Board Meeting. May 10,2011 Page 5 of 19 had the System's billings during such time been at the increased rates. The Board has also obtained schedules prepared by Robert W. Baird & Co. (the "Financial Advisor") showing the maximum Aggregate Debt Service Requirement on the Outstanding Bonds and the Series 2011A Bonds if the Series 2011A Bonds are issued within the parameters of this resolution. Based on the opinion of the Consulting Engineer and the schedules provided by the Financial Advisor, the Board hereby determines that the augmented Net Revenues for the fiscal year ending June 30, 2010 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 2011A Bonds. The Board hereby determines that the Board is not in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Section 3. Necessity; Preliminary Approval of Plans; and Statement of Purpose. It is hereby determined to be a necessary public purpose of the Board to acquire and construct the Series 2011A Project in accordance with the plans and specifications prepared by the Board's consulting engineers, which plans and specifications are hereby approved. Section 4. Costs; Useful Life. The total cost of the Series 2011A Project is estimated to be not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) including the payment of capitalized interest and incidental expenses as specified in Section 5 of this resolution, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Series 2011A Project is estimated to be not less than thirty (30) years. Section 5. 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 2011A Project, including payment of all legal, engineering, financial and other expenses incident thereto and incident to the issuance and sale of the Series 2011A Bonds and capitalized interest in the amount to be determined at the time of sale of the Series 2011A Bonds, the City, acting by and through the Board, shall borrow the sum of not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) and shall issue the Series 2011A Bonds therefor pursuant to the provisions of Act 94. The remaining cost of the Series 2011A Project, if any, shall be defrayed from funds on hand and legally available for such use, or, if the principal amount of the Series 2011A Bonds is less than $250,000,000, from an additional series of bonds to be issued upon approval of a future resolution. The Series 2011A Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94. The capitalized interest to be paid from proceeds of the Series 2011A Bonds shall not exceed the amount necessary to pay interest for three years, as finally determined at the time of sale of the Series 2011A Bonds. Special Board Meeting. May 10,2011 Page 6 of 19 Section 6. Series 2011A Bond Details. The Series 2011A Bonds shall be designated as the "Utility System Revenue Bonds, Series 2011A" 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 2011A Bonds. The Series 2011A 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 2011A 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 2011A Bonds, shall mature as serial bonds or term bonds on such dates as shall be determined at the time of sale of the Series 2011A Bonds but not-to-exceed thirty (30) annual maturities. The Series 2011A 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 2011A Bonds. The Series 2011A Bonds shall bear interest at a rate or rates to be determined on sale thereof, payable on January 1, 2012, or such other date as provided at the time of sale of the Series 2011A Bonds, and semi-annually thereafter on January 1st and July 1st of each year, provided, however, that the first interest payment date shall be not later than ten months following the delivery date of the Series 2011A Bonds. The Series 2011A Bonds shall be executed by the manual or facsimile signature of the Chairperson and the Corporate Secretary of the Board. No Series 2011A Bond shall be valid until authenticated by an authorized representative of the Transfer Agent. The Series 2011A 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 2011A 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 7. Registration and Transfer. The Chief Financial Officer is hereby authorized to appoint as transfer agent for the Series 2011A 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 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 2011A 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 Special Board Meeting. May 10,2011 Page 7 of 19 determination of the registered owner for purposes of payment of interest as provided in this paragraph may be changed by the Board to conform to market practice in the future. The Series 2011A 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 2011A Bonds in book-entry-only form and to make such changes in the form of the Series 2011A Bonds within the parameters of this resolution as may be required to accomplish the foregoing. Notwithstanding the foregoing, if the Series 2011A Bonds are held in book-entry-only form by DTC, payment of principal of and interest on the Series 2011A Bonds shall be made in the manner prescribed by DTC. The Series 2011A 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 2011A Bonds, the registered owner thereof shall deliver the Series 2011A Bonds to the Board for cancellation. Section 8. Deposit to Bond Reserve Account. On or prior to the date of delivery of the Series 2011A Bonds, the Board 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 Board 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 9. Series 2011A Bond Proceeds; Construction Fund. From the proceeds of sale of the Series 2011A 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 2011A Bonds, and the Board may take credit for the amount so deposited against the amount required to be Special Board Meeting. May 10,2011 Page 8 of 19 deposited in the Redemption Fund for payment of the next maturing interest on the Series 2011A 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 2011A Bonds may be deposited in the Bond Reserve Account or the Series 2011A Construction Fund in consultation with Bond Counsel. The capitalized interest shall next be deposited in the Redemption Fund, and the Board may take credit for the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of interest on the Series 2011A Bonds. There shall next be deposited in the Bond Reserve Account an amount, if any, designated at the time of sale of the Series 2011 A 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 2011A Bonds shall be deposited in the Series 2011A 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 2011A Project being financed with proceeds of the Series 2011A Bonds and any costs of engineering, legal, financial, bond insurance premiums and other expenses incident thereto and to the issuance of the Series 2011A Bonds. Any unexpended balance of the proceeds of sale of the Series 2011A Bonds remaining in the Construction Fund after completion of the Series 2011A 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 be used 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 calling Series 2011A Bonds for redemption or for the purpose of purchasing Series 2011A Bonds on the open market at not more than the fair market value thereof but not more than the price at which the Series 2011A Bonds may next be called for redemption. Section 10. Reserve Requirement. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the Reserve Requirement as defined in Section 1 (ff) 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 Series 1999-2005 Bonds, "Reserve Requirement" shall mean the following as established by Section 11 of the Tenth Supplemental Revenue Bond Resolution: 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 Special Board Meeting, May 10,2011 Page 9 of 19 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 11. Rate Covenant. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board will comply with the Section 9 of the Bond Resolution, as previously amended by Section 5 of the Second Supplemental Revenue Bond Resolution, and 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 150% 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. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 12 of the Tenth Supplemental Revenue Bond Resolution. 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. Section 12. Additional Bonds Test. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test imposed by Section 6 of the Second Supplemental Revenue Bond Resolution adopted January 11, 1994. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 13 of the Tenth Supplemental Revenue Bond Resolution. 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 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 Special Board Meeting. May 10,2011 Page 10 of 19 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 Board shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Additional Bonds may be issued as provided in Section 18 subparagraphs (b) or (c) of the Bond Resolution. Section 13. Covenants. The Board covenants and agrees as follows with the holders of the Series 2011A Bonds as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest: (a) The Board will cause the portion of the Series 2011 A Project being financed with proceeds of the Series 2011A Bonds to be acquired and constructed promptly and in accordance with the plans and specification therefor. (b) The Board covenants and agrees with the Registered Owners of the Series 2011A Bonds that as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or Special Board Meeting. May 10,2011 Page 11 of 19 interest, the Board shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Series 2011 A Bonds pursuant to the Internal Revenue Code in such a manner as to cause the Series 2011A Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The Board 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 2011A 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 Board with the Series 2011A Bonds. (c) The Board will not issue additional bonds of prior standing to the Series 2011A Bonds. Section 14. Series 2011A Bond Form. The Series 2011A 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 2011A Bonds established upon sale thereof: BOND NO. R- UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTIES OF INGHAM AND EATON CITY OF LANSING LANSING BOARD OF WATER AND LIGHT UTILITY SYSTEM REVENUE BOND, SERIES 2011A Date of Interest Rate Date of Maturity Original Issue CUSIP Registered Owner: Cede & Co. Principal Amount: 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 Special Board Meeting. May 10,2011 Page 12 of 19 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 [interest payment date] and semiannually thereafter. Principal of this bond is payable at the designated corporate trust office of [transfer agent], 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; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A, the Water Supply, Steam and Electric Utility System 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, 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. The pledge of Net Revenues and the statutory lien are senior in priority of lien to the Water Supply, Steam, Chilled Water and Electric Utility System Subordinate Lien Revenue Refunding Bond, Series 2009A (Federally Taxable) 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 $[principal amount], issued pursuant to a Bond Resolution adopted by the Board on October 24, 1989, as amended and supplemented from time to time, including by a Eleventh Supplemental Revenue Bond Resolution adopted by the Board on [date of resolution] (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 financing costs of improvements to the System, [making a deposit to a bond reserve account,] and paying the costs of issuing the bonds. For a complete statement of the revenues from which and the conditions under which this bond is payable, a statement of the conditions under which Special Board Meeting. May 10,2011 Page 13 of 19 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 maturing on or prior to [date] 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 [date] shall be subject to redemption prior to maturity without a premium, at the option of the Board, in such order of maturity as the Board shall determine and within any maturity by lot, on any date on or after [date], 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. 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 Board. 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. Special Board Meeting. May 10,2011 Page 14 of 19 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 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 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 its name with the facsimile signatures of the Special Board Meeting. May 10.2011 Page 15 of 19 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: Chairperson Sandra Zerkle Countersigned By: Corporate Secretary M. Denise Griffin [INSERT STANDARD FORMS OF CERTIFICATE OF AUTHENTICATION AND ASSIGNMENT] Section 15. Negotiated Sale. Based upon the advice of the Financial Advisor, given the volatile nature of the bond market, in order to enable the Board to select and adjust terms for the Series 2011A Bonds, 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 2011A Bonds, and to achieve sale efficiencies so as to reduce the cost of issuance and interest expense, it is determined in the best interests of the Board to negotiate the sale of the Series 2011A Bonds. The Board hereby determines to sell the Series 2011A Bonds at a negotiated sale instead of a competitive sale. Section 16. Appointment of Senior Managing Underwriter. Bank of America Merrill Lynch (the "Underwriter") is hereby named as senior managing underwriter for the Series 2011 A Bonds. The Board reserves the right to name additional co-managers and/or to develop a selling group, and the Chief Financial Officer is authorized to name additional co-managers and/or to develop a selling group in consultation with the Financial Advisor. By adoption of this resolution the Board assumes no obligations or liability to the Underwriter for any loss or damage that may result to the Underwriter from the adoption of this resolution, and all costs and expenses incurred by the Underwriter in preparing for sale of the Series 2011A Bonds shall be paid from the proceeds of the Series 2011A Bonds, if the Series 2011A Bonds are issued, except as may be otherwise provided in the Bond Purchase Agreement for Series 2011A Bonds. Section 17. 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 recommends 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, 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 18. Official Statement. The Chief Financial Officer is authorized to approve circulation of a Preliminary Official Statement describing the Special Board Meeting. May 10,2011 Page 16 of 19 Series 2011A Bonds and, after sale of the Series 2011A Bonds, to prepare, execute and deliver a final Official Statement. Section 19. Continuing Disclosure. The Chief Financial Officer is hereby directed to execute and deliver, prior to delivery of the Series 2011A Bonds, a written continuing disclosure undertaking in order to enable the Underwriter 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 20. Sale of Series 2011A Bonds. The Chief Financial Officer is authorized, in consultation with the Financial Advisor, to negotiate a Bond Purchase Agreement with the Underwriter, and to accept an offer by the Underwriter to purchase the Series 2011A Bonds without further resolution of this Board. This authorization includes, but is not limited to, determination of original principal amount of the Series 2011A Bonds; the prices at which the Series 2011A Bonds are sold; the date of the Series 2011A Bonds; the schedule of principal maturities and whether the Series 2011A 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 2011A Bonds; and application of the proceeds of the Series 2011A Bonds including the amount of capitalized interest, if any. 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. The Chief Financial Officer is authorized to execute the Bond Purchase Agreement. The net interest cost of the Series 2011A Bonds shall not exceed 8.00%. The first maturity of principal on the Series 2011A Bonds shall occur no earlier than 2012, and the date of the final maturity shall not cause the Series 2011A Bonds to exceed thirty (30) annual maturities. The Underwriter's discount for the Series 2011A Bonds shall not be greater than 1.00% of the principal amount of the Series 2011A Bonds, net of original issue discount or premium. In making such determinations the Chief Financial Officer is authorized to rely upon data and computer runs provided by the Financial Advisor. Section 21. 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 the Manager of Finance and Planning, the General Manager, or a person designated by the Chief Financial Officer or the Manager of Finance and Planning 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, sale and delivery of the Series 2011A 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 rating agency fees, bond insurance premiums, transfer agent fees, financial advisor fees, bond counsel fees, costs of printing the Series 2011 A Special Board Meeting. May 10,2011 Page 17 of 19 Bonds and the preliminary and final official statements, and any other costs necessary to accomplish sale and delivery of the Series 2011A Bonds. Section 22. Applicability of the Outstanding Bond Resolutions. Except to the extent supplemented or otherwise provided in this resolution, all of the provisions and covenants provided in the Bond Resolution shall apply to the Series 2011 A Bonds issued pursuant to provisions of this resolution, such provisions of the Bond Resolution being made applicable to the Series 2011A Bonds herein authorized. Section 23. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. Section 24. 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 25. 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 26. 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 and the users of the System. In accordance with the provisions of Section 6 of Act 94, this resolution shall become effective immediately upon its adoption. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Special meeting held on Tuesday, May 10, 2011, at 6:30 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. We 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. Special Board Meeting. May 10,2011 Page 18 of 19 We further certify that the following Commissioners were present at said meeting Margaret Bossenbery, Frank Lain, Dennis M. Louney, Marilyn Plummer, David Price, Tracy Thomas, Cynthia Ward and Sandra Zerkle and that the following Commissioners were absent, none. We further certify that Commissioner Bossenbery moved adoption of said resolution, and that said motion was supported by Commissioner Ward. We further certify that the following Commissioners voted for adoption of said resolution ALL COMMISSIONERS PRESENT and that the following Commissioners voted against adoption of said resolution NONE. We 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. Sandra Zerkle M. Denise Griffin Chairperson Corporate Secretary Action: Carried unanimously. MANAGER'S REMARKS General Manager Lark stated that some time ago Commissioner Louney brought to his attention that the Michigan Department of Community Health would be offering a fluoridation equipment grant funded by Delta Dental. The Board of Water & Light (BWL) applied for the grant and received $16,524 to apply towards the replacement of the aging fluoridation equipment at the Wise Conditioning Plant. General Manager Lark thanked Commissioner Louney for bringing the grant information to his attention. General Manager Lark stated that Bob Trezise of the Lansing Economic Development Corporation wanted him to announce that there is going to be a dedication of a statue called "Inspiration" at 2:00 p.m. on Sunday at the City Market. COMMISSIONER REMARKS In response to Commissioner Louney's remarks regarding General Manager Lark performing at this years Chili Cook Off, General Manager Lark stated that at this year's Chili Cook Off the performing bands will consist of Board of Water & Light employees at which there is no cost to the BWL. EXCUSED ABSENCE None. PUBLIC COMMENTS Special Board Meeting. May 10,2011 Page 19 of 19 There were no public comments. ADJOURNMENT On motion by Commissioner Price, seconded by Commissioner Ward, the meeting adjourned at 7:08 p.m. M. Denise Griffin, Corporate Secretary Preliminary Minutes Filed with Lansing City Clerk on May 16,2011 Final Approved Minutes Filed with Lansing City Clerk on May 26,2011 Preliminary Minutes to be approved: May 24,2011 LANSING BOARD OF WATER AND LIGHT BOARD OF COMMISSIONERS SPECIAL MEETING MINUTES May 10, 2011 The Board of Commissioners met at the Executive Offices of 1232 Haco Drive, Lansing, Michigan. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Marilyn Plummer, David Price, Tracy Thomas, Cynthia Ward and Sandra Zerkle. Absent: None The Secretary declared a quorum present. Chairperson Zerkle called the meeting to order at 7:00 p.m. PUBLIC COMMENT r7 THE CHAIR ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOI4E c.n TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT AND ANYONE a' 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 General Manager Lark stated that this resolution is to authorize up to $250 Million of Series 2011 A Bond for the Moores Park Replacement Cogeneration Plant and other system improvement and asks that the Board approve the Eleventh Supplemental Revenue Bond Resolution. He also stated that the Resolution was approved by Finance Committee on April 12, 2011. RESOLUTION #2011-05-01 Lansing Board of Water and Light ELEVENTH SUPPLEMENTAL REVENUE BOND RESOLUTION A RESOLUTION TO AUTHORIZE: Special Board Mtg. May 10,2011 Page 2 of 18 Issuance of up to $250,000,000 of Series 2011A Bonds for Moores Park Replacement Cogeneration Plant, System improvements, Capitalized Interest and costs of issuance; • Appointment of senior managing underwriter; • Chief Financial Officer to sell Series 2011A Bonds without further resolution; • Other matters relative to issuance, sale and delivery of Series 2011A 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 from time to time; 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 2011A Project (as defined below); and WHEREAS, on August 4, 2010, the Board published in the City Pulse a Notice of Intent to Issue Revenue Bonds and Right to Petition for Referendum describing revenue bonds to be issued to finance costs of the Series 2011A Project, and no petitions requesting referendum as described in the Notice were filed with the City Clerk; and WHEREAS, the conditions and requirements of the Bond Resolution for the issuance of Additional Bonds of equal standing and priority of lien with outstanding bonds have been met for the issuance of the proposed revenue bonds, and the Board is ready to authorize issuance of the first series of revenue bonds to finance the Series 2011A Project. NOW, THEREFORE, BE IT RESOLVED THAT: 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 and the Series 2011A Bonds issued pursuant to Section 18(a) of the Bond Resolution as amended by Section 13 of the 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 Special Board Mtg. May 10,2011 Page 3 of 18 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 and amended on August 12, 2008 and June 9, 2009, 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, the Tenth Supplemental Revenue Bond Resolution adopted on January 29, 2008, and this Eleventh Supplemental Revenue Bond Resolution, and any other resolution which amends or supplements the Bond Resolution. (c) "Bonds" means the Series 2008A Bonds and the Series 2011A Bonds and any Additional Bonds of equal standing hereafter issued. (d) "Chief Financial Officer" means the Assistant General Manager and Chief Financial Officer of the Board. (e) "Reserve Requirement" shall mean the Reserve Requirement established by Section 11 of the Tenth Supplemental Revenue Bond Resolution and described in Section 10 herein. (f) "Series 1999-2005 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 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) "Series 2008A Bonds" means the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A. (h) "Series 2011A Bonds" means the Utility System Revenue Bonds, Series 2011A issued pursuant to this Eleventh Supplemental Revenue Bond Resolution. (i) "Series 2011A Construction Fund" shall mean the Series 2011A Construction Fund established pursuant to this Eleventh Supplemental Revenue Bond Resolution. (j) "Series 2011A Project" means the acquisition and construction of a Moores Park Replacement Cogeneration Plant, a combined cycle natural gas facility producing steam and electricity including two Special Board Mtg. May 10,2011 Page 4 of 18 combined cycle sets, each set consisting of a combustion turbine, a heat recovery steam generator, a steam turbine and an auxiliary boiler to provide backup steam service, and System improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements. (k) "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. Section 2. Conditions Permitting Issuance of Additional Bonds. The Bond Resolution establishes requirements for the issuance of Additional Bonds of equal standing and priority of lien with the Outstanding Series 1999-2005 Bonds and Outstanding Series 2008A Bonds. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test required by Section 18(a) of the Bond Resolution as amended by Section 6 of the Second Supplemental Revenue Bond Resolution. The Series 2011A Bonds can be issued as Additional Bonds pursuant to the requirements of the Bond Resolution if the Board determines that the actual or augmented Net Revenues for the fiscal year ending not more than 15 months prior to the sale of Additional Bonds are 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. Section 18(a) permits Net Revenues to be augmented if the System rates, fees or charges were increased prior to the time of authorizing the Additional Bonds. On January 25, 2011 the Board enacted rate increases. The Board has obtained the opinion of a Consulting Engineer on the amount of Net Revenues which would have resulted for the fiscal year ending June 30, 2010 had the System's billings during such time been at the increased rates. The Board has also obtained schedules prepared by Robert W. Baird & Co. (the "Financial Advisor") showing the maximum Aggregate Debt Service Requirement on the Outstanding Bonds and the Series 2011A Bonds if the Series 2011A Bonds are issued within the parameters of this resolution. Based on the opinion of the Consulting Engineer and the schedules provided by the Financial Advisor, the Board hereby determines that the augmented Net Revenues for the fiscal year ending June 30, 2010 are equal to at least 150% of the maximum Aggregate Debt Service Requirement in any Special Board Mtg. May 10,2011 Page 5 of 18 current or future fiscal year on the Outstanding Bonds and the Series 2011A Bonds. The Board hereby determines that the Board is not in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Section 3. Necessity; Preliminary Approval of Plans; and Statement of Purpose. It is hereby determined to be a necessary public purpose of the Board to acquire and construct the Series 2011A Project in accordance with the plans and specifications prepared by the Board's consulting engineers, which plans and specifications are hereby approved. Section 4. Costs; Useful Life. The total cost of the Series 2011A Project is estimated to be not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) including the payment of capitalized interest and incidental expenses as specified in Section 5 of this resolution, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Series 2011A Project is estimated to be not less than thirty (30) years. Section 5. 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 2011A Project, including payment of all legal, engineering, financial and other expenses incident thereto and incident to the issuance and sale of the Series 2011A Bonds and capitalized interest in the amount to be determined at the time of sale of the Series 2011A Bonds, the City, acting by and through the Board, shall borrow the sum of not-to-exceed Two Hundred Fifty Million Dollars ($250,000,000) and shall issue the Series 2011A Bonds therefor pursuant to the provisions of Act 94. The remaining cost of the Series 2011A Project, if any, shall be defrayed from funds on hand and legally available for such use, or, if the principal amount of the Series 2011A Bonds is less than $250,000,000, from an additional series of bonds to be issued upon approval of a future resolution. The Series 2011A Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94. The capitalized interest to be paid from proceeds of the Series 2011A Bonds shall not exceed the amount necessary to pay interest for three years, as finally determined at the time of sale of the Series 2011A Bonds. Section 6. Series 2011A Bond Details. The Series 2011A Bonds shall be designated as the "Utility System Revenue Bonds, Series 2011A" 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 2011A Bonds. The Series 2011A 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 2011A 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 2011A Bonds, shall mature as serial bonds or term bonds on such Special Board Mtg. May 10,2011 Page 6 of 18 dates as shall be determined at the time of sale of the Series 2011A Bonds but not-to-exceed thirty (30) annual maturities. The Series 2011A 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 2011 A Bonds. The Series 2011A Bonds shall bear interest at a rate or rates to be determined on sale thereof, payable on January 1, 2012, or such other date as provided at the time of sale of the Series 2011A Bonds, and semi-annually thereafter on January 1st and July 1st of each year, provided, however, that the first interest payment date shall be not later than ten months following the delivery date of the Series 2011A Bonds. The Series 2011A Bonds shall be executed by the manual or facsimile signature of the Chairperson and the Corporate Secretary of the Board. No Series 2011A Bond shall be valid until authenticated by an authorized representative of the Transfer Agent. The Series 2011A 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 2011A 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 7. Registration and Transfer. The Chief Financial Officer is hereby authorized to appoint as transfer agent for the Series 2011A 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 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 2011A 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 provided in this paragraph may be changed by the Board to conform to market practice in the future. The Series 2011A 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 2011A Bonds in book-entry-only form and to make such changes in the form of the Series 2011A Bonds within the parameters of this resolution as may be required Special Board Mtg. May 10,2011 Page 7 of 18 to accomplish the foregoing. Notwithstanding the foregoing, if the Series 2011A Bonds are held in book-entry-only form by DTC, payment of principal of and interest on the Series 2011A Bonds shall be made in the manner prescribed by DTC. The Series 2011A 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 2011A Bonds, the registered owner thereof shall deliver the Series 2011A Bonds to the Board for cancellation. Section 8. Deposit to Bond Reserve Account. On or prior to the date of delivery of the Series 2011A Bonds, the Board 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 Board 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 9. Series 2011A Bond Proceeds; Construction Fund. From the proceeds of sale of the Series 2011A 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 2011A Bonds, and the Board 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 2011 A 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 2011A Bonds may be deposited in the Bond Reserve Account or the Series 2011A Construction Fund in consultation with Bond Counsel. The capitalized interest shall next be deposited in the Redemption Fund, and the Board may take credit for the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of interest on the Series 2011 A Bonds. Special Board Mtg. May 10,2011 Page 8 of 18 There shall next be deposited in the Bond Reserve Account an amount, if any, designated at the time of sale of the Series 2011A 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 2011A Bonds shall be deposited in the Series 2011A 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 2011A Project being financed with proceeds of the Series 2011A Bonds and any costs of engineering, legal, financial, bond insurance premiums and other expenses incident thereto and to the issuance of the Series 2011A Bonds. Any unexpended balance of the proceeds of sale of the Series 2011A Bonds remaining in the Construction Fund after completion of the Series 2011A 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 be used 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 calling Series 2011A Bonds for redemption or for the purpose of purchasing Series 2011A Bonds on the open market at not more than the fair market value thereof but not more than the price at which the Series 2011A Bonds may next be called for redemption. Section 10. Reserve Requirement. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the Reserve Requirement as defined in Section 1 (ff) 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 Series 1999-2005 Bonds, "Reserve Requirement" shall mean the following as established by Section 11 of the Tenth Supplemental Revenue Bond Resolution: 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 11. Rate Covenant. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board will comply with the Section 9 of the Bond Resolution, as previously amended by Section 5 of the Second Supplemental Revenue Bond Resolution, and 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 Special Board Mtg. May 10,2011 Page 9 of 18 reasonably expected to yield Net Revenues equal to at least 150% 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. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 12 of the Tenth Supplemental Revenue Bond Resolution. 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. Section 12. Additional Bonds Test. Until payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the Board must comply with the additional bonds test imposed by Section 6 of the Second Supplemental Revenue Bond Resolution adopted January 11, 1994. After payment or defeasance in full of the Outstanding Series 1999-2005 Bonds, the following provision shall apply as provided in Section 13 of the Tenth Supplemental Revenue Bond Resolution. 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 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. Special Board Mtg. May 10,2011 Page 10 of 18 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 Board shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. Additional Bonds may be issued as provided in Section 18 subparagraphs (b) or (c) of the Bond Resolution. Section 13. Covenants. The Board covenants and agrees as follows with the holders of the Series 2011A Bonds as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest: (a) The Board will cause the portion of the Series 2011A Project being financed with proceeds of the Series 2011A Bonds to be acquired and constructed promptly and in accordance with the plans and specification therefor. (b) The Board covenants and agrees with the Registered Owners of the Series 2011A Bonds that as long as any of the Series 2011A Bonds remain outstanding and unpaid as to either principal or interest, the Board shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Series 2011A Bonds pursuant to the Internal Revenue Code in such a manner as to cause the Series 2011A Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The Board 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 2011A Bonds from gross income for federal income tax purposes, including but not limited to, actions relating to the rebate Special Board Mtg. May 10,2011 Page 11 of 18 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 Board with the Series 2011A Bonds. (c) The Board will not issue additional bonds of prior standing to the Series 2011A Bonds. Section 14. Series 2011A Bond Form. The Series 2011A 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 2011A Bonds established upon sale thereof: BOND NO. R- UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTIES OF INGHAM AND EATON CITY OF LANSING LANSING BOARD OF WATER AND LIGHT UTILITY SYSTEM REVENUE BOND, SERIES 2011A Date of Interest Rate Date of Maturity Original Issue CUSIP Registered Owner: Cede & Co. Principal Amount: 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 [interest payment date] and semiannually thereafter. Principal of this bond is payable at the designated corporate trust office of [transfer agent], 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 Special Board Mtg. May 10,2011 Page 12 of 18 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; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the Water Supply, Steam and Electric Utility System Revenue Bonds, Series 1999A, the Water Supply, Steam and Electric Utility System 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, 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. The pledge of Net Revenues and the statutory lien are senior in priority of lien to the Water Supply, Steam, Chilled Water and Electric Utility System Subordinate Lien Revenue Refunding Bond, Series 2009A (Federally Taxable) 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 $[principal amount], issued pursuant to a Bond Resolution adopted by the Board on October 24, 1989, as amended and supplemented from time to time, including by a Eleventh Supplemental Revenue Bond Resolution adopted by the Board on [date of resolution] (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 financing costs of improvements to the System, [making a deposit to a bond reserve account,] and paying the costs of issuing the bonds. For a complete statement of the revenues from which and the conditions under which this bond is payable, a statement of the conditions under which additional bonds 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 Special Board Mtg. May 10,2011 Page 13 of 18 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 maturing on or prior to [date] 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 [date] shall be subject to redemption prior to maturity without a premium, at the option of the Board, in such order of maturity as the Board shall determine and within any maturity by lot, on any date on or after [date], 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. 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 Board. 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 Board 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 Special Board Mtg. May 10,2011 Page 14 of 18 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 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 its name 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: Chairperson Sandra Zerkle Countersigned By: Corporate Secretary M. Denise Griffin [INSERT STANDARD FORMS OF CERTIFICATE OF AUTHENTICATION AND ASSIGNMENT] Special Board Mtg. May 10,2011 Page 15 of 18 Section 15. Negotiated Sale. Based upon the advice of the Financial Advisor, given the volatile nature of the bond market, in order to enable the Board to select and adjust terms for the Series 2011A Bonds, 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 2011A Bonds, and to achieve sale efficiencies so as to reduce the cost of issuance and interest expense, it is determined in the best interests of the Board to negotiate the sale of the Series 2011A Bonds. The Board hereby determines to sell the Series 2011A Bonds at a negotiated sale instead of a competitive sale. Section 16. Appointment of Senior Managing Underwriter. Bank of America Merrill Lynch (the "Underwriter") is hereby named as senior managing underwriter for the Series 2011A Bonds. The Board reserves the right to name additional co-managers and/or to develop a selling group, and the Chief Financial Officer is authorized to name additional co-managers and/or to develop a selling group in consultation with the Financial Advisor. By adoption of this resolution the Board assumes no obligations or liability to the Underwriter for any loss or damage that may result to the Underwriter from the adoption of this resolution, and all costs and expenses incurred by the Underwriter in preparing for sale of the Series 2011A Bonds shall be paid from the proceeds of the Series 2011A Bonds, if the Series 2011A Bonds are issued, except as may be otherwise provided in the Bond Purchase Agreement for Series 2011 A Bonds. Section 17. 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 recommends 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, 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 18. Official Statement. The Chief Financial Officer is authorized to approve circulation of a Preliminary Official Statement describing the Series 2011A Bonds and, after sale of the Series 2011A Bonds, to prepare, execute and deliver a final Official Statement. Section 19. Continuing Disclosure. The Chief Financial Officer is hereby directed to execute and deliver, prior to delivery of the Series 2011A Bonds, a written continuing disclosure undertaking in order to enable the Underwriter 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 20. Sale of Series 2011A Bonds. The Chief Financial Officer is authorized, in consultation with the Financial Advisor, to negotiate a Bond Special Board Mtg. May 10,2011 Page 16 of 18 Purchase Agreement with the Underwriter, and to accept an offer by the Underwriter to purchase the Series 2011A Bonds without further resolution of this Board. This authorization includes, but is not limited to, determination of original principal amount of the Series 2011A Bonds; the prices at which the Series 2011A Bonds are sold; the date of the Series 2011A Bonds; the schedule of principal maturities and whether the Series 2011A 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 2011A Bonds; and application of the proceeds of the Series 2011A Bonds including the amount of capitalized interest, if any. 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. The Chief Financial Officer is authorized to execute the Bond Purchase Agreement. The net interest cost of the Series 2011A Bonds shall not exceed 8.00%. The first maturity of principal on the Series 2011A Bonds shall occur no earlier than 2012, and the date of the final maturity shall not cause the Series 2011A Bonds to exceed thirty (30) annual maturities. The Underwriter's discount for the Series 2011A Bonds shall not be greater than 1.00% of the principal amount of the Series 2011A Bonds, net of original issue discount or premium. In making such determinations the Chief Financial Officer is authorized to rely upon data and computer runs provided by the Financial Advisor. Section 21. 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 the Manager of Finance and Planning, the General Manager, or a person designated by the Chief Financial Officer or the Manager of Finance and Planning 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, sale and delivery of the Series 2011A 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 rating agency fees, bond insurance premiums, transfer agent fees, financial advisor fees, bond counsel fees, costs of printing the Series 2011 A Bonds and the preliminary and final official statements, and any other costs necessary to accomplish sale and delivery of the Series 2011 A Bonds. Section 22. Applicability of the Outstanding Bond Resolutions. Except to the extent supplemented or otherwise provided in this resolution, all of the provisions and covenants provided in the Bond Resolution shall apply to the Series 2011A Bonds issued pursuant to provisions of this resolution, such provisions of the Bond Resolution being made applicable to the Series 2011A Bonds herein authorized. Section 23. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. Special Board Mtg. May 10,2011 Page 17 of 18 Section 24. 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 25. 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 26. 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 and the users of the System. In accordance with the provisions of Section 6 of Act 94, this resolution shall become effective immediately upon its adoption. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Special meeting held on Tuesday, May 10, 2011, at 6:30 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. We 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 Margaret Bossenbery, Frank Lain, Dennis M. Louney, Marilyn Plummer, David Price, Tracy Thomas, Cynthia Ward and Sandra Zerkle and that the following Commissioners were absent, none. We further certify that Commissioner Bossenbery moved adoption of said resolution, and that said motion was supported by Commissioner Ward. We further certify that the following Commissioners voted for adoption of said resolution ALL COMMISSIONERS PRESENT and that the following Commissioners voted against adoption of said resolution NONE. We 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. Sandra Zerkle M. Denise Griffin Chairperson Corporate Secretary Special Board Mtg. May 10,2011 Page 18 of 18 Action: Carried unanimously. MANAGER'S REMARKS General Manager Lark stated that some time ago Commissioner Louney brought to his attention that the Michigan Department of Community Health would be offering a fluoridation equipment grant funded by Delta Dental. The Board of Water & Light (BWL) applied for the grant and received $16,524 to apply towards the replacement of the aging fluoridation equipment at the Wise Conditioning Plant. General Manager Lark thanked Commissioner Louney for bringing the grant information to his attention. General Manager Lark stated that Bob Trezise of the Lansing Economic Development Corporation wanted him to announce that there is going to be a dedication of a statue called "Inspiration" at 2:00 p.m. on Sunday at the City Market. COMMISSIONER REMARKS In response to Commissioner Louney's remarks regarding General Manager Lark performing at this years Chili Cook Off, General Manager Lark stated that at this year's Chili Cook Off the performing bands will consist of Board of Water& Light employees at which there is no cost to the BWL. EXCUSED ABSENCE None. PUBLIC COMMENTS There were no public comments. ADJOURNMENT On motion by Commissioner Price, seconded by Commissioner Ward, the meeting adjourned at 7:08 p.m. M. Denise Griffin, Corporate Secretary Filed with Lansing City Clerk May 16, 2011 Approved on 5-24-11 MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT C C� U� r t March 22, 2011 " ' '? f The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive;. Lansing, Michigan. Acting Chairperson Dennis M. Louney called the meeting to order at 5:30 p.m, Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis Louney, Marilyn Plummer (arrived at 5:40 p.m,), David Price, Cynthia Ward, Tracy Thomas. Absent: Commissioner Sandra Zerkle. The Corporate Secretary declared a quorum present. Commissioner Price led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Bossenbery seconded by Commissioner Ward to approve the minutes of the Regular Board Meeting of January 25, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment. ------------------ COMMUNICATIONS a. Electronic Mail from Jim Hepfer regarding public comment at the January 20, 2011 Public Hearing. Received and Place on File -------------------- COMMITTEE REPORTS Regular Board Mtg. March 22,2011 Page 2 of 13 JOINT COMMITTEE OF THE WHOLE Hometown People.Hometown Power, Joint Committee of the Whole Meeting Board of Water and Light Board of Commissioners Lansing City Council March 3, 2011 Call to Order Board of Water & Light Chair Zerkle and City Council President A' Lynne Robinson called the Joint Committee of the Whole meeting to order at 8:10 a.m. The meeting was held in the Governor's Room of the Lansing Center located at 333 East Michigan Avenue, Lansing, Michigan. Roll Call Board of Water & Light Commissioners Present: Chair Sandra Zerkle, Vice Chair Dennis M. Louney, Commissioners Margaret Bossenbery, Frank Lain, Marilyn Plummer, David Price, Tracy Thomas and Cynthia Ward. Absent: None Lansing City Council Councilmember's Present: President A' Lynne Robinson, Vice President Kathie Dunbar (arrived @ 9:00 A.M), Councilmember's Tina Houghton and Carol Wood. Absent: Councilmember's Eric Hewitt, Brian Jeffries, Derrick Quinney and Jessica Yorko. Other Present: BWL Staff: General Manager J. Peter Lark, Director of Internal Audit Phil Perkins, Executive Director of Operations Dick Peffley, Executive Director of Strategic Planning and Development George Stojic, Executive Director of Engineering Doug Wood, General Counsel and Executive Director of Employment Affairs Brandie Ekren, Director of Inclusion & Equity and Public Relations Calvin Jones, Manager of Customer Service Bob Perialas, Director of Communications Mark Nixon, Director of Security Daniel Barnes and Corporate Secretary M. Denise Griffin. Jim Dravenstat-Moceri, Assistant Business Manager Representatives IBEW Local 352. City Staff: Mayor Bernero's Chief of Staff Randy Hannan, City Council Legislative Office Manager Karen Hulett and Assistant City Attorney Don Kulhanek. Regular Board Mtg. March 22,2011 Page 3 of 13 Public Comment There was no public comment. Discussion Items The Board of Water& Light presented the Lansing City Council with updates on the following discussion items: Pennies for Power General Manager Lark reviewed the procedures of the Pennies for Power program. He stated that a subscribed customer allows for their bill to be rounded up to the next dollar amount and the difference between what is actually owed and the next dollar is donated to the Pennies for Power. The program operates through the Capital Area Community Services which is a 501 c(3) entities. Typically there is a donation to this program of about $40,000 a year. The Board of Water & Light also has a number of events that contribute additional donations to this organization that provides assistance to low income families for their utility bills. Commissioner Internet Contact General Manager Lark stated that in ongoing efforts to be as responsive as possible to our customers' needs, a link has been added to our BWL home page that will allow customers to contact or leave messages for individual Commissioners. VOLT General Manager Lark stated that as a result of his immediate sign up on the VOLT request list, he received one of the first electric vehicles delivered to the area. Mr. Lark reviewed the incentives available to customers purchasing a VOLT electric vehicle. Incentives are offered by the Federal Government and the Board of Water & Light from grant money obtained from the Department of Energy, which Mr. Lark forwent with his purchase of the vehicle. Mr. Lark also reviewed the placement of charging stations which is all a part of the Department of Energy grant. He stated that this program is very exciting to the Board of Water & Light because of the acquisition of new customers. Street Lights General Manager Lark stated that there are about 34,000 street lights in the Board of Water & Light service area. The Board has a program that continuously relamps street lights. As stated before, in ongoing efforts to be responsive to our customers' needs, we are adding to our newsletter "Connections" a box that contains phone numbers for assistance with light outages and water main Regular Board Mtg. March 22,2011 Page 4 of 13 breaks. With the new "SeeClickFix" method email thread in our Internet we have a new format for reporting outages. Mr. Lark stated that he would implement a means for the Board of Water & Light to directly respond to the "SeeClickFix" site. Estimated Bills General Manager Lark reviewed the estimating bills process. He stated that the Board of Water & Light tries to read 90% of the bills and that equals 1 estimate per year per customer. We had an unusual number of meter readers trying out other jobs last year which caused the inability to be able to meet the meter reading goal of 90% in addition, as the bill estimating procedures are based upon prior year usage. The significant difference in temperature between this year and last year also contributed to the issues with estimated bills. There was a discussion regarding the Board of Water & Light's customer service when dealing with individuals who have difficulties paying their utility bill. REO Town General Manager Lark stated that the Board of Water & Light has purchased the land at REO Town and there will be a groundbreaking ceremony on May 25, 2011 at 10:00 A.M. You should be seeing activity around the 2"d week in June and we plan on doing another community outreach event. Work will begin on the Depot in September. Mr. Lark stated that Bond issues are expected to be dealt with in April. He also provided an update on tax credits that are being applied for. City Council Vice President Kathie Dunbar spoke about the placement of a piece of historical memorabilia in the Depot. In response Dick Peffley stated that he would be more than happy to look into that issue and to contact the individual wishing to have this memorabilia placed in the Depot. Other Councilmember Carol Wood asked about the status of the clean up efforts of the comfort street ash landfill. In response George Stojic, Executive Director of Strategic Planning, stated the Board should be done with the clean up towards the end of 2011. City Council Vice President Kathie Dunbar spoke about the proposed millage increase for the City of Lansing. Adiourned The meeting Adjourned at 9:31 A.M. Regular Board Mtg. March 22,2011 Page 5 of 13 FINANCE COMMITTEE March 8, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:35 p.m. on Tuesday, March 8, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, Tracy Thomas and Marilyn Plummer. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were present. Commissioner David Price was also present. Absent: None Public Comments There were no public comments. Excused Absence None Approval of Minutes Motion by Commissioner Louney, seconded by Commissioner Thomas to approve the Finance Committee meeting minutes of January 11, 2011. Action: Carried unanimously. Bond Resolution Update General Manager Lark stated that the proposed resolution for the amendment to the Fifth Supplemental Revenue Bond will permit authorization to use the remaining proceeds from the Series 2001A Bond Proceeds for Water System Improvements. These remaining proceeds are a result of the Board of Water & Light completing the Series 2001A Project at the Ottawa Station Plant Chiller#1 and paying off all cost associated with the Project. General Manager Lark asks that the Finance Committee forward the resolution to the full Board for consideration. Lansing Board of Water and Light PROPOSED RESOLUTION TO AMEND FIFTH SUPPLEMENTAL REVENUE BOND RESOLUTION AND AUTHORIZE USE OF REMAINING BOND PROCEEDS A RESOLUTION TO AUTHORIZE: • Use of remaining Series 2001A Bond Proceeds for Water System Improvements. Regular Board Mtg. March 22,2011 Page 6 of 13 WHEREAS, the City of Lansing acting by and through the Lansing Board of Water and Light issues bonds payable from revenues of the Water Supply, Steam, Chilled Water and Electric Utility System under a Bond Resolution amended and restated on October 24, 1989 as further amended and supplemented from time to time (the "Bond Resolution"); and WHEREAS, pursuant to the Fifth Supplemental Revenue Bond Resolution adopted on April 24, 2001, the Board issued the $11,780,000 Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2001A (the "Series 2001A Bonds")for the purpose of paying costs to acquire, construct and install phase II of the chiller plant and related distribution system to serve the downtown chilled water district, and related costs and expenses (the "Series 2001A Project"); and WHEREAS, the Board has completed the Series 2001A Project, and paid all costs of the Series 2001A Project; and WHEREAS, approximately $1,900,000 of proceeds of the Series 2001A Bonds including investment earnings thereon (the "Series 2001A Bond Proceeds") remains in the Series 2001A construction account; and WHEREAS, the Board wishes to use the remaining Series 2001 A Bond Proceeds to pay costs of replacing filters and refurbishing water reservoirs at Dye Water Conditioning Plant, and reinforcing and supporting existing water mains under selected bridges and replacing or upgrading selected water valves in the Water Distribution System, together with related costs and expenses (the "Water System Improvements"), which are improvements described in the Notice of Intent published by the Board as part of the proceedings for the Series 2001A Bonds. NOW, THEREFORE, BE IT RESOLVED THAT: Section 1. Amending Resolution, The Board hereby finds that use of the remaining Series 2001A Bond Proceeds to pay costs of the Water System Improvements is desirable and not inconsistent with the Bond Resolution, and shall not have a material, adverse effect on the interests of the Registered Owners of the Bonds, and therefore the Fifth Supplemental Revenue Bond Resolution is hereby amended and supplemented by this resolution in accordance with Section 23(a)(iii) of the Bond Resolution. Section 2. Use of Bond Proceeds. The Board hereby finds that the Series 2001A Project has been completed and all costs of the Series 2001A Project have been paid. Section 6 of the Fifth Supplemental Revenue Bond Resolution is hereby amended to provide that the Series 2001 A Bond Proceeds remaining after completion of the Series 2001A Project shall be used for payment of costs of the Water System Improvements. The Assistant General Manager and Chief Financial Officer and/or the Manager of Finance and Planning are hereby authorized and directed to take all actions necessary to accomplish the intent of this resolution. Section 3. 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 Regular Board Mtg. March 22,2011 Page 7 of 13 are furnished for convenience of reference only and shall not be considered to be part of this resolution. Section 4. Conflictinq Resolutions; Effective Date. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. This resolution shall become effective immediately. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Regular meeting held on Tuesday, March 22, 2011, 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. 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 We 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 --------------------- Staff Comments: "This resolution would amend the Fifth Supplemental Bond Resolution to allow for the use of the remaining 2001A Bond Proceeds for Water System Improvements. The original resolution allowed for the expenditure of funds during the construction phase of the original Chilled Water plant in Ottawa Station. That project is complete, and all costs have been paid. The amended resolution would allow for the expenditure of the remaining $1.9 million of 2001A Bond Proceeds for the payment of costs of Water System Improvements." Motion by Commissioner Thomas, seconded by Commissioner Plummer to forward the proposed resolution for the amendment to the Fifth Supplemental Revenue Bond authorizing to use the remaining proceeds from the Series 2007A Bond Proceeds for Water System Improvements to the full Board for consideration. Action: Carried Unanimously Other Regular Board Mtg. March 22,2011 Page 8 of 13 None Adjourn On Motion by Commissioner Plummer, seconded by Commissioner Louney, the meeting adjourned at 6:40 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee COMMITTEE OF THE WHOLE March 8, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, March 8, 2011 . Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Tracy Thomas, Cynthia Ward, Marilyn Plummer, David Price and Sandra Zerkle. Absent: None Excused Absence None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of January 11, 2011. Action: Carried unanimously Feed-In Tariffs (Informational Only) General Manager J. Peter Lark stated that some of the Commissioners may be attending the upcoming American Public Power Association (APPA) Conference and wanted to provide some background information on Feed-In Tariffs which may be a topic of discussion at the conference. Feed-In Tariffs is a policy mechanism designed to encourage the adoption of renewable energy sources. George Stojic, Executive Director of Strategic Planning, provided a description of Feed-In Tariffs, and how they relate to, and are different from, net-metering and other renewable energy initiatives. He indicated that the Board is continuing to look at advantages and disadvantages of Feed-in Tariffs. Regular Board Mtg. March 22,2011 Page 9 of 13 Committee of the Whole Chair Dennis M. Louney introduced and welcomed new Commissioner, David Price. Safety Update (Informational Only) General Manager Lark introduced Bruce Cook, Director of Safety, Purchasing and Warehousing and Customer Service who provided an update on safety structure at the Board of Water & Light. Bruce Cook stated that there are three main components of safety structure and the Board of Water & Light and they include Safety Department, Board of Water & Light Safety Committee and Departmental Safety Advisory Committees. 1. Safety Department The main function of the Safety Department is to manage safety for the entire Board of Water & Light which includes: ■ Ensuing MIOSHA regulatory compliance, interpretation & consultation ■ Providing written safety programs and training ■ Administer Personal Protective Equipment ■ Perform area inspections ■ Ensure all hazards, near misses, and injuries are investigated 2. Board of Water & Light Safety Committee The main function of the Safety Committee is to promote safety which includes: ■ Approval of the Safety Manual rules and changes ■ Overseeing safety promotion and recognition ■ Creating subcommittees to address specific, complex safety problems 3. Departmental Safety Advisory Committees The main function of the Department Safety Advisory Committee is to integrate safety into every process which includes: ■ Providing group consensus on safety procedures and work practices Ensuring that all employees have the skills and training to do their job safely. ■ Guarantee employee involvement ■ Develop topics for monthly departmental safety meetings ■ Perform inspections of the department In conclusion Mr. Cook stated that the Board of Water & Light is continuously taking proactive measures regarding safety and encouraging employee involvement and ownership of safety. REO Town Update (Informational Only) Regular Board Mtg. March 22,2011 Page 10 of 13 Susan Devon, Assistant General Manager and Chief Financial Officer, and Project Manager for the REO Town New Co-generation Plant stated that staff has been very busy. Ms. Devon stated the Engineering and Architectural Services contract has been awarded to Burns and Roe Enterprises, Inc. Ms. Devon stated that regarding the Historic Depot, staff is in the process of trying to obtain and qualify for a Historical Tax Credit. She stated that the land purchase was completed in January 2011. She also stated they are working on the process for the installation of a natural gas line with the construction of the pipeline being done by Consumers Energy. Ms. Devon stated that the staff is also in the process of evaluating underwriting of Bonds and once that process is complete it will be brought to the Finance Committee for approval; also being determined is the type of insurance that is required or needed for this project. The Groundbreaking ceremony for the REO Town Plant is May 25, 2011. Other Margaret Bossenbery thanked the Board of Water & Light's staff for their support during the recent loss of a family member. Chair Zerkle thanked the Commissioners for strongly representing the Board of Water & Light at the Joint Board of Water & Light and Lansing City Council Committee of the Whole meeting that was recently held. Adiourn On Motion by Commissioner Thomas, seconded by Commissioner Bossenbery, the meeting adjourned at 6:27 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole MANAGER'S RECOMMENDATIONS General Manager J. Peter Lark stated that the proposed resolution for the amendment to the Fifth Supplemental Revenue Bond will permit authorization to use the remaining proceeds from the Series 2001A Bond Proceeds for Water System Improvements as permitted in the original resolution. RESOLUTION #2011-03-01' PROPOSED RESOLUTION TO AMEND FIFTH SUPPLEMENTAL REVENUE BOND RESOLUTION AND AUTHORIZE USE OF REMAINING BOND PROCEEDS A RESOLUTION TO AUTHORIZE: Regular Board Mtg. March 22,2011 Page 11 of 13 Use of remaining Series 2001A Bond Proceeds for Water System Improvements. WHEREAS, the City of Lansing acting by and through the Lansing Board of Water and Light issues bonds payable from revenues of the Water Supply, Steam, Chilled Water and Electric Utility System under a Bond Resolution amended and restated on October 24, 1989 as further amended and supplemented from time to time (the "Bond Resolution"); and WHEREAS, pursuant to the Fifth Supplemental Revenue Bond Resolution adopted on April 24, 2001, the Board issued the $11,780,000 Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2001A (the "Series 2001A Bonds") for the purpose of paying costs to acquire, construct and install phase II of the chiller plant and related distribution system to serve the downtown chilled water district, and related costs and expenses (the "Series 2001 A Project"); and WHEREAS, the Board has completed the Series 2001A Project, and paid all costs of the Series 2001A Project; and WHEREAS, approximately $1,900,000 of proceeds of the Series 2001A Bonds including investment earnings thereon (the "Series 2001A Bond Proceeds") remains in the Series 2001A construction account; and WHEREAS, the Board wishes to use the remaining Series 2001A Bond Proceeds to pay costs of replacing filters and refurbishing water reservoirs at Dye Water Conditioning Plant, and reinforcing and supporting existing water mains under selected bridges and replacing or upgrading selected water valves in the Water Distribution System, together with related costs and expenses (the "Water System Improvements"), which are improvements described in the Notice of Intent published by the Board as part of the proceedings for the Series 2001A Bonds. NOW, THEREFORE, BE IT RESOLVED THAT: Section 1. Amending Resolution. The Board hereby finds that use of the remaining Series 2001 A Bond Proceeds to pay costs of the Water System Improvements is desirable and not inconsistent with the Bond Resolution, and shall not have a material, adverse effect on the interests of the Registered Owners of the Bonds, and therefore the Fifth Supplemental Revenue Bond Resolution is hereby amended and supplemented by this resolution in accordance with Section 23(a)(iii) of the Bond Resolution. Section 2. Use of Bond Proceeds. The Board hereby finds that the Series 2001A Project has been completed and all costs of the Series 2001A Project have been paid. Section 6 of the Fifth Supplemental Revenue Bond Resolution is hereby amended to provide that the Series 2001A Bond Proceeds remaining after completion of the Series 2001 A Project shall be used for payment of costs of the Water System Improvements. The Assistant General Manager and Chief Financial Officer and/or the Manager of Finance and Planning are hereby authorized and directed to take all actions necessary to accomplish the intent of this resolution. Regular Board Mtg. March 22,2011 Page 12 of 13 Section 3. 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 4. Conflicting Resolutions; Effective Date. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. This resolution shall become effective immediately. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Regular meeting held on Tuesday, March 22, 2011, 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. We further certify that the following Commissioners were present at said meeting: Margaret Bossenbery, Frank Lain, Dennis M. Louney, Marilyn Plummer, David Price, Tracy Thomas and Cynthia Ward and that the following Commissioners were absent: Sandra Zerkle. We further certify that Commissioner Tracy Thomas moved adoption of said resolution, and that said motion was supported by Commissioner David Price. We further certify that the following Commissioners voted for adoption of said resolution: Margaret Bossenbery, Frank Lain, Dennis M. Louney, David Price, Tracy Thomas and Cynthia Ward and that the following Commissioners voted against adoption of said resolution: None. (Commissioner Marilyn D. Plummer arrived after the adoption of the Resolution) We 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 Sandra Zerkle M. Denise Griffin --------------------- Staff Comments: "This resolution would amend the Fifth Supplemental Bond Resolution to allow for the use of the remaining 2001A Bond Proceeds for Water System Improvements. The original resolution allowed for the expenditure of funds during the construction phase of the original Chilled Water plant in Ottawa Station. That project is complete, and all costs have been paid. The amended resolution would allow for the expenditure of the remaining $1.9 million of 2001A Bond Proceeds for the payment of costs of Water System Improvements." Regular Board Mtg. March 22,2011 Page 13 of 13 UNFINISHED BUSINESS There was no Unfinished Business NEW BUSINESS There was no New Business MANAGER'S REMARKS General Manager Lark announced that there will be a ground breaking ceremony for the REO Town New Co-generation Plant held on May 25, 2011 at 10:00 a.m. COMMISSIONERS' REMARKS Commissioner Tracy Thomas thanked Mark Nixon, Director of Communications and Calvin Jones, Director of Inclusion & Equity and Public Relations, for dealing with the"SeeClickFix" issue that was discussed at the Joint Board of Water& Light and Lansing City Council Committee of the Whole meeting held on March 3, 2011. Commissioner Dennis M. Louney stated that the Joint Board of Water& Light and Lansing City Council Committee of the Whole meeting was very nice. He congratulated the Board of Water& Light's Water Tapping Team on winning their third straight State Championship water-tapping competition. PUBLIC COMMENTS There were no public comments EXCUSED ABSENCE On motion by Commissioner Lain, seconded by Commissioner Ward to excuse Commissioner Zerkle from tonight's meeting. Action: Carried Unanimously ADJOURNMENT On motion by Commissioner Bossenbery, seconded by Commissioner Plummer the meeting adjourned at 5:44 p.m. M. Denise Griffin,Corporate Secretary Preliminary Minules fled with Lansing City Clerk on March 29,2011 Final Approved Minutes filed with Lansing City Clerk on May 26,2011 JJ Preliminary Minutes to be approved on 5-24-11 r Jw ,' 2i a .,. MINUTES OF THE BOARD OF COMMISSIONERS' MEETING LANSING BOARD OF WATER AND LIGHT March 22, 2011 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Acting Chairperson Dennis M. Louney called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis Louney, Marilyn Plummer (arrived at 5:40 p.m.), David Price, Cynthia Ward, Tracy Thomas. Absent: Commissioner Sandra Zerkle. The Corporate Secretary declared a quorum present. Commissioner Price led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Bossenbery seconded by Commissioner Ward to approve the minutes of the Regular Board Meeting of January 25, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment. ------------------ COMMUNICATIONS a. Electronic Mail from Jim Hepfer regarding public comment at the January 20, 2011 Public Hearing. Received and Place on File -------------------- COMMITTEE REPORTS Regular Board Mtg. March 22,2011 Page 2 of 13 JOINT COMMITTEE OF THE WHOLE -W I Hometown People.Hometown Power. Joint Committee of the Whole Meeting Board of Water and Light Board of Commissioners Lansing City Council March 3, 2011 Call to Order Board of Water & Light Chair Zerkle and City Council President A' Lynne Robinson called the Joint Committee of the Whole meeting to order at 8:10 a.m. The meeting was held in the Governor's Room of the Lansing Center located at 333 East Michigan Avenue, Lansing, Michigan. Roll Call Board of Water & Light Commissioners Present: Chair Sandra Zerkle, Vice Chair Dennis M. Louney, Commissioners Margaret Bossenbery, Frank Lain, Marilyn Plummer, David Price, Tracy Thomas and Cynthia Ward. Absent: None. Lansing City Council Councilmember's Present: President A' Lynne Robinson, Vice President Kathie Dunbar (arrived @ 9:00 A.M), Councilmember's Tina Houghton and Carol Wood. Absent: Councilmember's Eric Hewitt, Brian Jeffries, Derrick Quinney and Jessica Yorko. Other Present: BWL Staff: General Manager J. Peter Lark, Director of Internal Audit Phil Perkins, Executive Director of Operations Dick Peffley, Executive Director of Strategic Planning and Development George Stojic, Executive Director of Engineering Doug Wood, General Counsel and Executive Director of Employment Affairs Brandie Ekren, Director of Inclusion & Equity and Public Relations Calvin Jones, Manager of Customer Service Bob Perialas, Director of Communications Mark Nixon, Director of Security Daniel Barnes and Corporate Secretary M. Denise Griffin. Jim Dravenstat-Moceri, Assistant Business Manager Representatives IBEW Local 352. City Staff: Mayor Bernero's Chief of Staff Randy Hannan, City Council Legislative Office Manager Karen Hulett and Assistant City Attorney Don Kulhanek. Public Comment Regular Board Mtg. March 22,2011 Page 3 of 13 There was no public comment. Discussion Items The Board of Water & Light presented the Lansing City Council with updates on the following discussion items: Pennies for Power General Manager Lark reviewed the procedures of the Pennies for Power program. He stated that a subscribed customer allows for their bill to be rounded up to the next dollar amount and the difference between what is actually owed and the next dollar is donated to the Pennies for Power. The program operates through the Capital Area Community Services which is a 501c(3) entities. Typically there is a donation to this program of about $40,000 a year. The Board of Water & Light also has a number of events that contribute additional donations to this organization that provides assistance to low income families for their utility bills. Commissioner Internet Contact General Manager Lark stated that in ongoing efforts to be as responsive as possible to our customers' needs, a link has been added to our BWL home page that will allow customers to contact or leave messages for individual Commissioners. VOLT General Manager Lark stated that as a result of his immediate sign up on the VOLT request list, he received one of the first electric vehicles delivered to the area. Mr. Lark reviewed the incentives available to customers purchasing a VOLT electric vehicle. Incentives are offered by the Federal Government and the Board of Water & Light from grant money obtained from the Department of Energy, which Mr. Lark forwent with his purchase of the vehicle. Mr. Lark also reviewed the placement of charging stations which is all a part of the Department of Energy grant. He stated that this program is very exciting to the Board of Water & Light because of the acquisition of new customers. Street Lights General Manager Lark stated that there are about 34,000 street lights in the Board of Water & Light service area. The Board has a program that continuously relamps street lights. As stated before, in ongoing efforts to be responsive to our customers' needs, we are adding to our newsletter "Connections" a box that contains phone numbers for assistance with light outages and water main breaks. With the new "SeeClickFix" method email thread in our Internet we have a new format for reporting outages. Regular Board Mtg. March 22,2011 Page 4 of 13 Mr. Lark stated that he would implement a means for the Board of Water & Light to directly respond to the "SeeClickFix" site. Estimated Bills General Manager Lark reviewed the estimating bills process. He stated that the Board of Water & Light tries to read 90% of the bills and that equals 1 estimate per year per customer. We had an unusual number of meter readers trying out other jobs last year which caused the inability to be able to meet the meter reading goal of 90% in addition, as the bill estimating procedures are based upon prior year usage. The significant difference in temperature between this year and last year also contributed to the issues with estimated bills. There was a discussion regarding the Board of Water & Light's customer service when dealing with individuals who have difficulties paying their utility bill. REO Town General Manager Lark stated that the Board of Water & Light has purchased the land at REO Town and there will be a groundbreaking ceremony on May 25, 2011 at 10:00 A.M. You should be seeing activity around the 2"d week in June and we plan on doing another community outreach event. Work will begin on the Depot in September. Mr. Lark stated that Bond issues are expected to be dealt with in April. He also provided an update on tax credits that are being applied for. City Council Vice President Kathie Dunbar spoke about the placement of a piece of historical memorabilia in the Depot. In response Dick Peffley stated that he would be more than happy to look into that issue and to contact the individual wishing to have this memorabilia placed in the Depot. Other Councilmember Carol Wood asked about the status of the clean up efforts of the comfort street ash landfill. In response George Stojic, Executive Director of Strategic Planning, stated the Board should be done with the clean up towards the end of 2011. City Council Vice President Kathie Dunbar spoke about the proposed millage increase for the City of Lansing. Adjourned The meeting Adjourned at 9:31 A.M. FINANCE COMMITTEE March 8, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:35 p.m. on Tuesday, March 8, 2011. Regular Board Mtg. March 22,2011 Page 5 of 13 Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, Tracy Thomas and Marilyn Plummer. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were present. Commissioner David Price was also present. Absent: None Public Comments There were no public comments. Excused Absence None Approval of Minutes Motion by Commissioner Louney, seconded by Commissioner Thomas to approve the Finance Committee meeting minutes of January 11, 2011. Action: Carried unanimously. Bond Resolution Update General Manager Lark stated that the proposed resolution for the amendment to the Fifth Supplemental Revenue Bond will permit authorization to use the remaining proceeds from the Series 2001A Bond Proceeds for Water System Improvements. These remaining proceeds are a result of the Board of Water & Light completing the Series 2001A Project at the Ottawa Station Plant Chiller #1 and paying off all cost associated with the Project. General Manager Lark asks that the Finance Committee forward the resolution to the full Board for consideration. Lansing Board of Water and Light PROPOSED RESOLUTION TO AMEND FIFTH SUPPLEMENTAL REVENUE BOND RESOLUTION AND AUTHORIZE USE OF REMAINING BOND PROCEEDS A RESOLUTION TO AUTHORIZE: Use of remaining Series 2001A Bond Proceeds for Water System Improvements. WHEREAS, the City of Lansing acting by and through the Lansing Board of Water and Light issues bonds payable from revenues of the Water Supply, Steam, Chilled Water and Electric Utility System under a Bond Resolution Regular Board Mtg. March 22,2011 Page 6 of 13 amended and restated on October 24, 1989 as further amended and supplemented from time to time (the "Bond Resolution"); and WHEREAS, pursuant to the Fifth Supplemental Revenue Bond Resolution adopted on April 24, 2001, the Board issued the $11,780,000 Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2001A (the "Series 2001A Bonds")for the purpose of paying costs to acquire, construct and install phase II of the chiller plant and related distribution system to serve the downtown chilled water district, and related costs and expenses (the "Series 2001A Project"); and WHEREAS, the Board has completed the Series 2001A Project, and paid all costs of the Series 2001A Project; and WHEREAS, approximately $1,900,000 of proceeds of the Series 2001A Bonds including investment earnings thereon (the "Series 2001A Bond Proceeds") remains in the Series 2001A construction account; and WHEREAS, the Board wishes to use the remaining Series 2001A Bond Proceeds to pay costs of replacing filters and refurbishing water reservoirs at Dye Water Conditioning Plant, and reinforcing and supporting existing water mains under selected bridges and replacing or upgrading selected water valves in the Water Distribution System, together with related costs and expenses (the "Water System Improvements"), which are improvements described in the Notice of Intent published by the Board as part of the proceedings for the Series 2001A Bonds. NOW, THEREFORE, BE IT RESOLVED THAT: Section 1. Amending Resolution. The Board hereby finds that use of the remaining Series 2001A Bond Proceeds to pay costs of the Water System Improvements is desirable and not inconsistent with the Bond Resolution, and shall not have a material, adverse effect on the interests of the Registered Owners of the Bonds, and therefore the Fifth Supplemental Revenue Bond Resolution is hereby amended and supplemented by this resolution in accordance with Section 23(a)(iii) of the Bond Resolution. Section 2. Use of Bond Proceeds. The Board hereby finds that the Series 2001A Project has been completed and all costs of the Series 2001A Project have been paid. Section 6 of the Fifth Supplemental Revenue Bond Resolution is hereby amended to provide that the Series 2001 A Bond Proceeds remaining after completion of the Series 2001A Project shall be used for payment of costs of the Water System Improvements. The Assistant General Manager and Chief Financial Officer and/or the Manager of Finance and Planning are hereby authorized and directed to take all actions necessary to accomplish the intent of this resolution. Section 3. 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. Regular Board Mtg. March 22,2011 Page 7 of 13 Section 4. Conflicting Resolutions; Effective Date. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. This resolution shall become effective immediately. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Regular meeting held on Tuesday, March 22, 2011, 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. 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 We 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 --------------------- Staff Comments: "This resolution would amend the Fifth Supplemental Bond Resolution to allow for the use of the remaining 2001A Bond Proceeds for Water System Improvements. The original resolution allowed for the expenditure of funds during the construction phase of the original Chilled Water plant in Ottawa Station. That project is complete, and all costs have been paid. The amended resolution would allow for the expenditure of the remaining $1.9 million of 2001A Bond Proceeds for the payment of costs of Water System Improvements." Motion by Commissioner Thomas, seconded by Commissioner Plummer to forward the proposed resolution for the amendment to the Fifth Supplemental Revenue Bond authorizing to use the remaining proceeds from the Series 2007A Bond Proceeds for Water System Improvements to the full Board for consideration. Action: Carried Unanimously Other None Adiourn Regular Board Mtg. March 22,2011 Page 8 of 13 On Motion by Commissioner Plummer, seconded by Commissioner Louney, the meeting adjourned at 6:40 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee COMMITTEE OF THE WHOLE March 8, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, March 8, 2011. Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Frank Lain, Dennis M. Louney, Tracy Thomas, Cynthia Ward, Marilyn Plummer, David Price and Sandra Zerkle. Absent: None Excused Absence None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of January 11, 2011. Action: Carried unanimously Feed-In Tariffs (Informational Only) General Manager J. Peter Lark stated that some of the Commissioners may be attending the upcoming American Public Power Association (APPA) Conference and wanted to provide some background information on Feed-In Tariffs which may be a topic of discussion at the conference. Feed-In Tariffs is a policy mechanism designed to encourage the adoption of renewable energy sources. George Stojic, Executive Director of Strategic Planning, provided a description of Feed-In Tariffs, and how they relate to, and are different from, net-metering and other renewable energy initiatives. He indicated that the Board is continuing to look at advantages and disadvantages of Feed-In Tariffs. Committee of the Whole Chair Dennis M. Louney introduced and welcomed new Commissioner, David Price. Regular Board Mtg. March 22,2011 Page 9 of 13 Safety Update (Informational Only) General Manager Lark introduced Bruce Cook, Director of Safety, Purchasing and Warehousing and Customer Service who provided an update on safety structure at the Board of Water & Light. Bruce Cook stated that there are three main components of safety structure and the Board of Water & Light and they include Safety Department, Board of Water & Light Safety Committee and Departmental Safety Advisory Committees. 1. Safety Department The main function of the Safety Department is to manage safety for the entire Board of Water & Light which includes: ■ Ensuing MIOSHA regulatory compliance, interpretation & consultation ■ Providing written safety programs and training ■ Administer Personal Protective Equipment ■ Perform area inspections ■ Ensure all hazards, near misses, and injuries are investigated 2. Board of Water & Light Safety Committee The main function of the Safety Committee is to promote safety which includes: ■ Approval of the Safety Manual rules and changes ■ Overseeing safety promotion and recognition ■ Creating subcommittees to address specific, complex safety problems 3. Departmental Safety Advisory Committees The main function of the Department Safety Advisory Committee is to integrate safety into every process which includes: ■ Providing group consensus on safety procedures and work practices Ensuring that all employees have the skills and training to do their job safely. ■ Guarantee employee involvement ■ Develop topics for monthly departmental safety meetings ■ Perform inspections of the department In conclusion Mr. Cook stated that the Board of Water & Light is continuously taking proactive measures regarding safety and encouraging employee involvement and ownership of safety. REO Town Update (Informational Only) Susan Devon, Assistant General Manager and Chief Financial Officer, and Project Manager for the REO Town New Co-generation Plant stated that staff Regular Board Mtg. March 22,2011 Page 10 of 13 has been very busy. Ms. Devon stated the Engineering and Architectural Services contract has been awarded to Burns and Roe Enterprises, Inc. Ms. Devon stated that regarding the Historic Depot, staff is in the process of trying to obtain and qualify for a Historical Tax Credit. She stated that the land purchase was completed in January 2011. She also stated they are working on the process for the installation of a natural gas line with the construction of the pipeline being done by Consumers Energy. Ms. Devon stated that the staff is also in the process of evaluating underwriting of Bonds and once that process is complete it will be brought to the Finance Committee for approval; also being determined is the type of insurance that is required or needed for this project. The Groundbreaking ceremony for the REO Town Plant is May 25, 2011. Other Margaret Bossenbery thanked the Board of Water & Light's staff for their support during the recent loss of a family member. Chair Zerkle thanked the Commissioners for strongly representing the Board of Water & Light at the Joint Board of Water & Light and Lansing City Council Committee of the Whole meeting that was recently held. Adjourn On Motion by Commissioner Thomas, seconded by Commissioner Bossenbery, the meeting adjourned at 6:27 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole MANAGER'S RECOMMENDATIONS General Manager J. Peter Lark stated that the proposed resolution for the amendment to the Fifth Supplemental Revenue Bond will permit authorization to use the remaining proceeds from the Series 2001A Bond Proceeds for Water System Improvements as permitted in the original resolution. RESOLUTION #2011-03-01 PROPOSED RESOLUTION TO AMEND FIFTH SUPPLEMENTAL REVENUE BOND RESOLUTION AND AUTHORIZE USE OF REMAINING BOND PROCEEDS A RESOLUTION TO AUTHORIZE: • Use of remaining Series 2001A Bond Proceeds for Water System Improvements. Regular Board Mtg. March 22,2011 Page 11 of 13 WHEREAS, the City of Lansing acting by and through the Lansing Board of Water and Light issues bonds payable from revenues of the Water Supply, Steam, Chilled Water and Electric Utility System under a Bond Resolution amended and restated on October 24, 1989 as further amended and supplemented from time to time (the "Bond Resolution"); and WHEREAS, pursuant to the Fifth Supplemental Revenue Bond Resolution adopted on April 24, 2001, the Board issued the $11,780,000 Water Supply, Steam and Electric Utility System Revenue Bonds, Series 2001A(the "Series 2001A Bonds") for the purpose of paying costs to acquire, construct and install phase II of the chiller plant and related distribution system to serve the downtown chilled water district, and related costs and expenses (the "Series 2001 A Project"); and WHEREAS, the Board has completed the Series 2001A Project, and paid all costs of the Series 2001A Project; and WHEREAS, approximately $1,900,000 of proceeds of the Series 2001A Bonds including investment earnings thereon (the "Series 2001A Bond Proceeds") remains in the Series 2001A construction account; and WHEREAS, the Board wishes to use the remaining Series 2001A Bond Proceeds to pay costs of replacing filters and refurbishing water reservoirs at Dye Water Conditioning Plant, and reinforcing and supporting existing water mains under selected bridges and replacing or upgrading selected water valves in the Water Distribution System, together with related costs and expenses (the "Water System Improvements"), which are improvements described in the Notice of Intent published by the Board as part of the proceedings for the Series 2001A Bonds. NOW, THEREFORE, BE IT RESOLVED THAT: Section 1. Amending Resolution. The Board hereby finds that use of the remaining Series 2001A Bond Proceeds to pay costs of the Water System Improvements is desirable and not inconsistent with the Bond Resolution, and shall not have a material, adverse effect on the interests of the Registered Owners of the Bonds, and therefore the Fifth Supplemental Revenue Bond Resolution is hereby amended and supplemented by this resolution in accordance with Section 23(a)(iii) of the Bond Resolution. Section 2. Use of Bond Proceeds. The Board hereby finds that the Series 2001A Project has been completed and all costs of the Series 2001A Project have been paid. Section 6 of the Fifth Supplemental Revenue Bond Resolution is hereby amended to provide that the Series 2001A Bond Proceeds remaining after completion of the Series 2001A Project shall be used for payment of costs of the Water System Improvements. The Assistant General Manager and Chief Financial Officer and/or the Manager of Finance and Planning are hereby authorized and directed to take all actions necessary to accomplish the intent of this resolution. Section 3. 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 Regular Board Mtg. March 22,2011 Page 12 of 13 are furnished for convenience of reference only and shall not be considered to be part of this resolution. Section 4. Conflicting Resolutions: Effective Date. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. This resolution shall become effective immediately. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Regular meeting held on Tuesday, March 22, 2011, 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. We further certify that the following Commissioners were present at said meeting: Margaret Bossenbery, Frank Lain, Dennis M. Louney, Marilyn Plummer, David Price, Tracy Thomas and Cynthia Ward and that the following Commissioners were absent: Sandra Zerkle. We further certify that Commissioner Tracy Thomas moved adoption of said resolution, and that said motion was supported by Commissioner David Price. We further certify that the following Commissioners voted for adoption of said resolution: Margaret Bossenbery, Frank Lain, Dennis M. Louney, David Price, Tracy Thomas and Cynthia Ward and that the following Commissioners voted against adoption of said resolution: None. (Commissioner Marilyn D. Plummer arrived after the adoption of the Resolution) We 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 Sandra Zerkle M. Denise Griffin --------------------- Staff Comments: "This resolution would amend the Fifth Supplemental Bond Resolution to allow for the use of the remaining 2001A Bond Proceeds for Water System Improvements. The original resolution allowed for the expenditure of funds during the construction phase of the original Chilled Water plant in Ottawa Station. That project is complete, and all costs have been paid. The amended resolution would allow for the expenditure of the remaining $1.9 million of 2001A Bond Proceeds for the payment of costs of Water System Improvements." UNFINISHED BUSINESS There was no Unfinished Business Regular Board Mtg. March 22,2011 Page 13 of 13 NEW BUSINESS There was no New Business MANAGER'S REMARKS General Manager Lark announced that there will be a ground breaking ceremony for the REO Town New Co-generation Plant held on May 25, 2011 at 10:00 a.m. COMMISSIONERS' REMARKS Commissioner Tracy Thomas thanked Mark Nixon, Director of Communications and Calvin Jones, Director of Inclusion & Equity and Public Relations, for dealing with the"SeeClickFix" issue that was discussed at the Joint Board of Water& Light and Lansing City Council Committee of the Whole meeting held on March 3, 2011. Commissioner Dennis M. Louney stated that the Joint Board of Water& Light and Lansing City Council Committee of the Whole meeting"was very nice. He congratulated the Board of Water& Light's Water Tapping Team on winning their third straight State Championship water-tapping competition. PUBLIC COMMENTS There were no public comments EXCUSED ABSENCE On motion by Commissioner Lain, seconded by Commissioner Ward to excuse Commissioner Zerkle from tonight's meeting. Action: Carried Unanimously ADJOURNMENT On motion by Commissioner Bossenbery, seconded by Commissioner Plummer the meeting adjourned at 5:44 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes filed with Lansing City Clerk on March 29,2011 INED E—• Approved by the Board of Commissioners':March 22,2011 MINUTES OF THE BOARD OF COMMISSIONERS'MEETING LANSING BOARD OF WATER AND LIGHT January 25,2011 The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Tony DeLuca, Dennis Louney, Marilyn Plummer, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Absent: Commissioner Frank Lain The Corporate Secretary declared a quorum present. Commissioner Ward led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Thomas seconded by Commissioner DeLuca to approve the minutes of the Regular Board Meeting of November 23, 2010. Action: Carried unanimously. PUBLIC COMMENTS 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. Susan Harley, Policy Director of Clean Water Action and a member of"Lansing Can do Better", stated that her organizations are very appreciative that the Board of Water& Light is not going forward with the building of a coal plant and will be investing in a cleaner natural gas plant in REO Town and therefore support the proposed rates increases, with the condition that the outdated Eckert Moores Plant will be put on an enforceable timeline towards retirement. Steve Raul of 1608 W. Shiawassee spoke about his attendance at the Board of Water& Light's optimization event and commends the Board of Water& Light on their energy optimization efforts but wishes it was more aggressive. He said that it is imperative to aggressively increase energy optimization efforts and strongly supports solar energy for both commercial and residential use. He requested that the Board of Water& Light involve the community when making energy decisions. Regular Board Mtg. January 25,2011 Page 2 of 36 Carol Raul of 1608 W. Shiawassee spoke about her long time participation in the Board of Water& Light's voluntary green wise electric power program, which allows you to purchase monthly blocks of renewable energy. She asked that the Board revisit this program because of the renewable surcharge assessments. She also spoke about concerns that she has with the retirement of the Eckert Plant. ------------------ COMMUNICATIONS a. Letter from Westside Neighborhood Beautification Team Received and Place on File b. Customer Email Opposing Rate Increase Received and Place on File -------------------- COMMITTEE REPORTS COMMITTEE OF THE WHOLE January 11, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, January 11, 2011. Committee of the Whole Chair Louney called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Frank Lain (arrived 5:37 p.m.), Dennis M. Louney, Tracy Thomas, Cynthia Ward and Sandra Zerkle. Absent: Commissioners Tony DeLuca and Marilyn Plummer. Excused Absence Motion by Commissioner Thomas seconded by Commissioner Bossenbery to excuse Commissioners Tony DeLuca and Marilyn Plummer from tonight's meeting. Action: Carried Unanimously. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery seconded by Commissioner Zerkle to approve the Committee of the Whole meeting minutes of November 9, 2010. Action: Carried unanimously. Regular Board Mtg. January 25,2011 Page 3 of 36 Water Infrastructure Update General Manager J. Peter Lark stated when he first came to the Board of Water& Light(BWL)the emphasis from the Board's point of view seemed to be on not only electricity, but making sure that our entire infrastructure was up to date. General Manager Lark stated that he has always thought that the water infrastructure needed reviewing due to the age of the plants. Mr. Lark reported there has been some very important work done with respect to the water infrastructure and there is positive news to report. Dick Peffley, Director of Water Operation and Special Projects, provided a brief introduction to the water infrastructure study that General Manager Lark directed he conduct at the plants. Tim Hyde, Manager of Water Productions, stated that the BWL contracted with Fishbeck, Thompson, Carr& Huber, Inc(FTC&H)who spent 18 months evaluating the water facilities. Mr. Hyde provided an overview of the objectives of the study which included evaluations of the Dye and Wise Treatment Plants, an evaluation of the cost and feasibility of capacity replacement and the evaluation of current and anticipated regulations. Mr. Hyde reviewed the plants history and FTC&H's recommendations as well as proposed capital expenditures. The conclusion of the study was that the plants were in excellent condition, the recommendations are aligned with the Board of Water& Light's plans, and the recommendations concur with the Board of Water& Light's capital budget. Proposed Rate Presentation for Public Hearing (REO Town) General Manager Lark reviewed recent credit ratings of various utilities. He stated that he was very proud of the Board of Water& Light's AA3 credit rating from Moody's, especially since other entity ratings have dropped. In a Moody's document, it was stated that the Board of Water& Light is highly rated at AA3 given strong financial metric and management. General Manager Lark stated that he would divide the rate presentation into two separate sections 1) REO Town rates and 2) other general rate increases. Proposed Rate Presentation for Public Hearing (General Rates) General Manager Lark stated that the PowerPoint presentation that will be presented at the Public Hearing on January 20, 2011 is included in the Committee of the Whole packet and asked that the Board review the presentation and contact him with any questions or suggestions. Chair Zerkle suggested that the positive points and cost cutting measures that have been under taken by the BWL be highlighted in Mr. Lark's presentation at the Public Hearing. General Manager Lark stated that information regarding the proposed rate changes have been posted in the newspaper, on the Internet and printed on customers' billings. Commissioner Zerkle stated that Mark Nixon, Director of Communications, will be responding to an email that was submitted regarding the rate increases. Other There were no other items. Regular Board Mtg. January 25,2011 Page 4 of 36 Adjourn On Motion by Commissioner Thomas, seconded by Commissioner Bossenbery, the meeting adjourned at 6:10 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE January 11,2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:15 p.m. on Tuesday, January 11, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Dennis M. Louney, and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were also present. Absent: Commissioner Marilyn Plummer Public Comments There were no public comments. Excused Absence Motion by Commissioner Thomas seconded by Commissioner Louney to excuse Commissioners Marilyn Plummer from tonight's meeting. Action: Carried unanimously. Approval of Minutes Motion by Commissioner Thomas, seconded by Commissioner Louney to approve the Finance Committee meeting minutes of November 9, 2010 and November 23, 2010. Action: Carried unanimously. DB Plan Restatement Resolution General Manager Lark asks that the Finance Committee forward this resolution to the full Board for passage. This resolution states acceptance of the Defined Benefit Plan with a restatement to maintain compliance with current federal law. BOARD RESOLUTION RESOLVED: That the restated Lansing Board of Water and Light Defined Benefit Plan for Employees' Pensions is hereby adopted Regular Board Mtg. January 25,2011 Page 5 of 36 effective as stated therein; and FURTHER RESOLVED: That the Chairman of the Board of Commissioners and the Corporate Secretary are authorized to execute said restated Plan on behalf of the Board Motion by Commissioner Thomas, seconded by Commissioner Louney to forward the proposed resolution for the restated Defined Benefit Plan to the full Board for consideration. Action: Carried Unanimously Internal Audit Status Report Internal Auditor Phil Perkins presented a brief overview of recent Risk Investment activities. Mr. Perkins also reviewed the Internal Auditors plans for the remainder of fiscal year 2011. Current Risk Assessment Activities include: • Expenditures &AP Risk Assessment(first review complete,following up on some items) • Inventory Accounts Risk Assessment(draft completed, in review) • Equity Accounts Risk Assessment(draft completed, in review) • Deliverable for Each: -- Process Flowcharts -- Process Narratives -- Risks and Controls -- Results for Testing of Controls Planned Activities for remainder of FY 2011 included: • Other Financial Risk Assessments: o Treasury Accounts—Started December 2010, in process o Contingencies—Will begin this month o Tax Accounts—Estimated starting in April 2011 o Record & Monitor Debts-Related Accounts-Estimated starting in Apr/may 2011 o Internal Quality Assessment Review for Internal Audit(start in late FY2011) o Audit Planning for FY2012 Finance Chair Bossenbery stated that she and Internal Auditor Perkins will be meeting to discuss audit planning. After the mentioned meeting she and Mr. Perkins will meet with Susan Devon, Assistant General Manager and Chief Financial Officer to discuss proceeding forward with audit tasks. Other Commissioner Louney spoke about the email that General Manager Lark sent to the Board of Commissioners dated December 21, 2010 regarding the net metering capital project at the Erickson Plant. Mr. Lark reviewed details surrounding the cost of the required installation of a grade utility meter and the unscheduled outages that contributed to the capital overage. Commissioner Thomas thanked Mr. Lark and his staff for all of the work that they do and for the great credit rating review that was discussed at the Committee of the Whole meeting. There being no further business, the meeting adjourned at 6:35 p.m. Respectfully submitted Regular Board Mtg. January 25,2011 Page 6 of 36 Margaret Bossenbery, Chair Finance Committee MANAGER'S RECOMMENDATIONS General Manager J. Peter Lark addressed observations that were tendered to the Board of Commissioners at the January 20, 2011 Rate Increase Public Hearing. After providing a lengthy response to questions and concerns that were addressed by the public at the Rate Hearing, General Mark Lark respectfully asked that the Board approve the resolutions for the Electric, Water, Steam and Chilled Water rates and the Advance approval of the Electric and Steam increases to support the addition of new electric and steam generation. RESOLUTION#2011-01-01 RESOLVED: That the restated Lansing Board of Water and Light Defined Benefit Plan for Employees' Pensions is hereby adopted effective as stated therein; and FURTHER RESOLVED: That the Chairman of the Board of Commissioners and the Corporate Secretary are authorized to execute said restated Plan on behalf of the Board. Motion by Commissioner Plummer, seconded by Commissioner Ward, to approve the resolution for the restated Board of Water& Light Defined Benefit Plan for Employees' Pension. Action: Carried unanimously EXECUTIVE SUMMARY 2010 RESTATEMENT OF THE LANSING BOARD OF WATER AND LIGHT DEFINED BENEFIT PLAN FOR EMPLOYEES' PENSIONS The Lansing Board of Water and Light(LBWL)sponsors the Lansing Board of Water and Light Defined Benefit Plan for Employees' Pensions(the "Pension Plan"). Relevant pension law requires that the Plan be restated to incorporate: (1) all amendments that have been adopted since the Pension Plan's last required restatement; and (2)changes in legal requirements that have occurred subsequent to the Pension Plan's last required restatement. The 2010 Pension Plan restatement must be adopted by LBWL during January 2011 to ensure that the Pension Plan is submitted to the IRS for approval on or before January 31, 2011. The attached proposed Pension Plan restatement addresses the foregoing requirements. Relevant law requires certain language to be contained in all Plan Documents for qualified plans of this nature, The following areas of the Plan Document were impacted by these legal requirements: 1) Differential Wage Payments relating to qualifying military service were clarified; 2) Non-spousal roll over rights were expanded; 3) Distribution Restrictions were clarified; and 4) The Plan's treatment of benefits relating to Military service benefits was clarified. Again, although law requires the Plan Document to be restated to include language to reflect the above, the Plan Design was not modified or expanded in any form. LANSING BOARD OF WATER&LIGHT DEFINED BENEFIT PLAN FOR EMPO YEES'PENSION DOCUMENT ON FILE IN THE OFFICE OF THE CORPORATE SECRETRY. Regular Board Mtg. January 25,2011 Page 7 of 36 RESOLUTION#2011-01-02 Electric,Water, Steam, and Chilled Water Rate Increases WHEREAS, the corporate Financial Target for each of the Lansing Board of Water& Light's Strategic business units is 6.18% return on net fixed assets and materials and supplies that would require, $17.7 million of electric net income, $12.0 million of water net income, $1.6 million of steam net income, and $1.7 million of chilled water net income; and WHEREAS, the proposed Fiscal Year 2011 budget with the proposed rate adjustments would result in electric operating income of$10.3 million or a 3.18% return on fixed assets and materials and supplies; and WHEREAS,the proposed Fiscal Year 2011 budget with the proposed rate adjustments would result in a water operating loss of$3.6 million or a negative 1,84% return on fixed assets and materials and supplies; and WHEREAS,the proposed Fiscal Year 2011 budget with the proposed rate adjustments would result in a steam operating loss of$3.4 million or a negative 13.20% return on fixed assets and materials and supplies; and WHEREAS, the proposed Fiscal Year 2011 budget with the proposed rate adjustments would result in chilled water operating income of$1.3 million or a 4.75% return on fixed assets; and WHEREAS, the Staff proposed to increase annual electric billings by$2.7 million, water billings by $2.5 million, steam billings by$0.7 million and chilled water billings by$0.2 million; and WHEREAS, the Staff proposed a new electric rate for residential customers with separately metered Electric Vehicle Supply Equipment. This rate would allow a discounted rate for off-peak power used to charge electric vehicles; and WHEREAS, the current Electric Street Lighting flat rate structure does not allow flexibility for billing for various lamp types requested by customers nor does it allow for the recognition of advanced payments for capital costs; and WHEREAS, the Staff proposed to restructure the street lighting rates to bill for energy, transmission and distribution, and lamp maintenance through a per Watt annual charge and to bill for the facilities on a contract by contract basis; and WHEREAS,the Staff proposed to close the current street lighting rates to new contracts and to continue to bill current contracts under the current street lighting rate schedules; and WHEREAS,the notice of the proposed increases were communicated to all customers by public notice on December 29, 2010, and a public hearing was held on January 20, 2011 to receive comments on the proposed increases; and WHEREAS, the Board of Commissioners has considered the comments of the public as well as recommendations made by the BWL. Regular Board Mtg. January 25,2011 Page 8 of 36 RESOLVED, that the electric, water, steam, and chilled water rate schedules listed below and detailed in the attached rate schedules be adopted and made effective for electric and water consumption on or after March 1, 2011. Motion by Commissioner Louney seconded by Commissioner Bossenbery, to approve the resolution for the electric, water, steam, and chilled water rate schedules effective on or after March 1, 2011. Action: Carried unanimously Electric: (Attachment A) Residential Service Rate—Rate 1 General Service Rate—Rate 3 Large General Service Rate—Rate 4 Primary Service Rate—Rate 5 Municipal Water Pumping Service Rate—Rate 7 Large Capacity Service Rate—Rate 8 Outdoor Lighting Service—Rate 9 Traffic Light Service—Rate 11 Space Conditioning and Water Heating Service—Rate 12 Residential Senior Citizen Service Rate—Rate 21 Residential Plug-In Electric Vehicle Rate—Rate 22 Street Lighting Service Board Owned—Rate 31 Street Lighting Service Board Owned—Rate 31a Street Lighting Service Customer Owned—Rate 32 Water: (Attachment B) Residential Service—Rate 1 General Service—Rate 2 Fire Service—Rate 4 Lawn Sprinkling Service—Rate 5 Fire Hydrant—Rate 6 Steam: (Attachment C) General Service—Rate 1 Industrial Service—Rate 2 Residential Service—Rate 5 Chilled Water: (Attachment D) General Service—Rate 1 Electric: (Attachment A) Effective March 1, 2011 Regular Board Mtg. January 25,2011 Page 9 of 36 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: 3/1/11 Basic Service Charge $7.50 Per customer per month Comm dity Charqd Summer Billing Months of June through October $.0812 Per kWh for the first 500 kWh $.0861 Per kWh for all over 500 kWh Winter Billing Months of November through May $.0812 Per kWh for the first 500 kWh $.0842 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge 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. Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. GENERAL ELECTRIC SERVICE RATE NO.3 Availabili -This rate is available to any customer desiring secondary voltage service for any purpose when supplied at one point of delivery through one meter. 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 emergency or standby service. 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). Regular Board Mtg. January 25,2011 Page 10 of 36 Monthly Rate-Shall be computed in accordance with the following charges. 3/1/11 Basic Service Charge $17.98 per customer per month Commodity Charge Summer Billing Months of June through October $.0939 per kWh Winter Billing Months of November through May $.0906 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. Environmental Charge—.This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0,0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge 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. 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. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. 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. 311/11 Basic Service Charge $38.35 per customer per month Capacity Charge $10.19 Per kW for all kW of Maximum Demand Regular Board Mtg. January 25,2011 Page 11 of 36 Commodity Charge Summer Billing Months of June through October $.0537 Per kWh Winter Billing Months of November through May $.0497 Per kWh Reactive Power Charge $0.0092 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge as defined on a separate rate schedule incorporated herein by this reference. Tax Adwustment-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. PRIMARY ELECTRIC SERVICE RATE NO.5 Availabili -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: 3/1/11 Basic Service Charge $95.90 per customer per month Capacity Charge $8.27 Per kW for all kW of On-Peak Billing Demand,plus $2.74 Per kW for all kW of Maximum Demand Regular Board Mtg. January 25,2011 Page 12 of 36 Commodity Charge Summer Billing Months of June through October $0.0481 Per kWh for all kWh during the On-Peak Period,plus $0.0442 Per kWh for all kWh during the Off-Peak Period,plus Winter Billing Months of November through May $0.0461 Per kWh for all kWh during the On-Peak Period,plus $0.0442 Per kWh for all kWh during the Off-Peak Period Reactive Power Charge $0.0092 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billing Demand On-Peak Billing Demand: The On-Peak Billing Demand shall be the 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. PRIMARY ELECTRIC SERVICE RATE NO.5 Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a customer may be summed for determination of the total On-Peak Billing Demand under the following conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW;(b)the total On-Peak Billing Demand shall not be less than 4,000 kW;and (c)the customer shall agree to a service contract with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a period of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and Maximum Demand,shall apply to each delivery point independently. Meterin -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. Eguioment 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. Regular Board Mtg. January 25,2011 Page 13 of 36 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. 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. 3/1/11 Basic Service Charge $11.98 Per customer per month Commodity Charge $.0731 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0,0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge 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. Metering-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. 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. LARGE CAPACITY ELECTRIC SERVICE RATE NO.8 Regular Board Mtg. January 25,2011 Page 14 of 36 Availability-This rate is available to any customer desiring primary voltage service when:(a)the electrical requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point Aggregation;(b)where the total On- Peak Billing Demand is 25,000 kW or more;and(c)the customer agrees to a service contract with the BWL for the customer's full electrical service requirements at the applicable delivery points for a period of not less than ten(10)years. This rate is not available for standby or emergency service. Nature of Service-The service is alternating current,60 hertz,three phase. The primary voltage is determined by the Board of Water and Light(BWL). Monthly Rate-Shall be computed in accordance with the following charges: 3/1/11 Basic Service Charge $299.69 per delivery point per month Capacity Charge $9.32 per kW for all kW of On-Peak Billing Demand,plus $1.75 per kW for all kW of Maximum Demand Commodity Charge Summer Billing Months of June through October $0.0428 per kWh for all kWh during the On-Peak Period,plus $0.0380 per kWh for all kWh during the Off-Peak Period,plus Winter Billing Months of November through May $0.0413 per kWh for all kWh during the On-Peak Period,plus $0.0380 per kWh for all kWh during the Off-Peak Period Reactive Power Charge $0.0092 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. 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge as defined on a separate rate schedule incorporated herein by this reference. Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Billing Demand On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all applicable delivery points during the 15-minute period of maximum use during the On-Peak Period during the month. (See Multiple Delivery Point Aggregation.) Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during the 15-minute period of maximum use during the month whether on-peak or off-peak. LARGE CAPACITY ELECTRIC SERVICE RATE NO.8 Regular Board Mtg. January 25,2011 Page 15 of 36 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. Meterin -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. 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 3/1/11 100 W $10.53 250 W $17.77 400 W $18.99 Mercury Vapor' 175 W $11.05 400 W $18.99 Floodlighting Luminaires on Bracket Arm on existing BWL poles High Pressure Sodium 100 W $15.05 250 W $18.85 400 W $22.08 Metal Halid 400 W $27.44 1000 W $47.46 Rates apply to existing luminaires only and are not open to new business. Regular Board Mtg. January 25,2011 Page 16 of 36 1500 W $65.87 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. TY Pe of Facilitie 311/11 35-foot wood poles including span of overhead secondary $13.55 Per pole extension 37-foot concrete pole including span of overhead $19.82 Per pole secondary extension Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of estimated cost OUTDOOR LIGHTING SERVICE RATE NO.9 Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes,license fees,franchise fees,or any other charges against the Board's property,or its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. 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. 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 refuse or restrict the service provided in this rate to seasonal type customers and/or may require such customers to pay for the service annually in advance where the permanency of the customer is doubtful or has not been demonstrated by the customer. If relocation,including adjustment,of the outdoor protective light or relocation of other facilities used in connection with the light is desired by the customer during the term of the contract,the BWL will provide this service,if feasible,at the customer's expense. 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. 3/1/11 Basic Service Charge $2.30 Per customer per month Commodity Charge $.0362 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. Regular Board Mtg. January 25,2011 Page 17 of 36 Minimum Bill-The minimum bill is the basic service charge included in the monthly rate. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge 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. 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 Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. SPACE CONDITIONING AND ELECTRIC WATER HEATING SERVICE RATE NO.12 Availability-This rate is available to any customer desiring service for commercial/industrial 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. 3/1111 Basic Service Charge $23.97 Commodity Charge Summer Billing Months of June through October $.1065 per kWh Winter Billing Months of November through May $.0691 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge as defined on a separate rate schedule incorporated herein by this reference. Regular Board Mtg. January 25,2011 Page 18 of 36 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. 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. 3/1/11 Basic Service Charge $4.83 Commodity Charge $.0608 per kWh for the first 300 kWh $.0973 per kWh for the next 200 kWh $.1277 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.0025/kWh. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge as defined on a separate rate schedule incorporated herein by this reference. Energy Optimization Surcharge—This rate is subject to the Energy Optimization Surcharge 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. Regular Board Mtg. January 25,2011 Page 19 of 36 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. RESIDENTIAL PLUG-IN ELECTRIC VEHICLE CHARGING SERVICE RATE NO.22 Availability—The Experimental Residential Plug-in Vehicle Charging Rate is a voluntary pilot rate available to any single- family or multifamily dwelling of 4 units or less with separately metered Electric Vehicle Supply Equipment(EVSE)capable of providing Level 2 charging for plug-in electric motor vehicles. 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. "EVSE"means a device or apparatus,including vehicle supply cable,connector,internal relays and controls designed specifically for-the purpose of delivering energy from the premises wiring to a plug-in-electric motor vehicle.This equipment must meet or exceed the following codes,standards and recommended practices: 1. National Electric Code Article 625 Electric Vehicle Charging System. 2. Society of Automotive Engineers Standard(SAE)J1772. 3. Underwriters Laboratory(UL)2202,Charging Station Safety. 4. UL 2231 Personal Protection Device. 5, UL 2251 Standard for Safety of Plugs,Receptacles and Couplers for EVs. 6, UL 1998 Standard for Safety-Related Software 7, UL 991 Standard for Tests for Safety-Related Controls Employing Solid-State Devices 8. UL Subject 2594 Electric Vehicle Supply Equipment 9. Michigan Administration codes 408,30801 or 408.30876. "Level 2 Charging"means providing 208—240 volt single phase alternating current energy to an onboard charger of an electric motor vehicle with a maximum current specified at maximum 32 continuous amps and a Branch Circuit Breaker rated at 40 amps.The maximum continuous input power is specified as 7.68 Kilowatts. Nature of Service-The service is alternating current,60 hertz,single phase,208 to 240 nominal volts, Level 2 Charging as defined. Monthly Rate-Shall be computed in accordance with the following charges: 3/1/11 Basic Service Charge $1.95 Per customer per month Commodity Charge$0.0526 Per kWh for all Off-Peak Usage $0.1361 Per kWh for all On-Peak Usage On-Peak Hours: All kWh used between 7am and 11 pm Monday through Friday. Off-Peak Hours: All other kWh used. 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference.The current Environmental Charge is$0.0025/kWh. 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 previous delayed payment charges,shall be added to any bill that is not paid on or before the due date. Regular Board Mtg. January 25,2011 Page 20 of 36 RESIDENTIAL PLUG-IN ELECTRIC VEHICLE CHARGING SERVICE RATE NO.22 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. 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 311111 70 W $79 100 W $89 150 W $105 250 W $127 400 W $162 1000 W $331 Mercury Vapor Luminaire 100 W $84 175 W $101 250 W $119 400 W $153 1000 W $290 Metal Halide Luminaire 175 W $177 250 W $202 400 W $204 1000 W $396 1500 W $608 Induction Luminaire 85 W $84 165 W $102 STREET LIGHTING SERVICE BOARD OWNED SYSTEMS RATE NO.31 Regular Board Mtg. January 25,2011 Page 21 of 36 Annual Rate(continued) plus an additional annual charge,depending on type of installation,of: 3/1/11 Wood Pole—Overhead Service None Wood Pole—Underground Service $91 Concrete Pole—Overhead Service $144 Concrete Pole—Underground Service $144 Post Top $91 Historic—Single Top .$300 Large Historic—Dual Top $877 Small Historic—Dual Tap $623 Wall/Tunnel—8760 hours $127 Wall/Tunnel—4200 hours $77 Bollard $298 Customer Contribution-The annual rates are based on fixtures normally stocked by the BWL,and installed utilizing normal construction techniques. The BWL may,at its option,upon customer request install a street lighting system not covered by the rates below. The customer,after installation,will be required to make a one time contribution equal to the difference between the actual installed cost and the BWL estimated installed cost of a standard installation. The annual unit charge for each luminaire will then be as stated below. Unit Replacement-The BWL may,at its option,upon customer request replace existing street light units. After installation, the customer shall make a one time contribution equal to the undepreciated value of the unit plus the cost of removal. Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to termination charges,contributions in aid of construction,term or other special considerations when the customer requests service, equipment or facilities not normally provided under this rate. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge 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. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference.(Effective March 1,2011,this rate is not open to new business) STREET LIGHTING SERVICE BOARD OWNED SYSTEMS RATE NO.31a 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. 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 monthly installments,shall consist of an annual energy charge and an annual facilities charge,as set forth below: Annual Energy Charge-The annual rate per watt for energy used by a luminaire,shall be as follows; 3/1/11 High Pressure Sodium Luminaire $0.55 per watt of rated energy usage Regular Board Mtg. January 25,2011 Page 22 of 36 Metal Halide Luminaire $0,76 per watt of rated energy usage LED Luminaire $0.38 per watt of rated energy usage Annual Facilities Charge-The annual rate to recover the cost of luminaires,poles,attachments,and other equipment installed to provide service under this rate schedule,including the total facilities cost less any customer contributions,projected annual maintenance cost,and return on investment. The annual facilities charge for each luminaire and setting will be specified in the service contracts with each customer. Unit Replacement-The BWL may,at its option,and upon customer request replace existing street light units. After replacement,the customer shall make a one time contribution equal to the undepreciated value of the replaced unit plus the cost of removal. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge 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. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. 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 3/1/11 70 W $42 100 W $52 150 W $66 250 W $88 400 W $125 1000 W $296 Mercury Vapor Luminaire 175 W $61 250 W $80 400 W $114 1000 W $251 Incandescent Luminaire 2500 L $83 4000 L $132 6000 L $161 Regular Board Mtg. January 25,2011 Page 23 of 36 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. 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. Renewable Energy Plan Surcharge—This rate is subject to the Renewable Energy Plan Surcharge 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. Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric Service incorporated herein by this reference. Water: (Attachment B) Effective March 1, 2011 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 311/11 5/8" $10.27 3/4" $14.38 1" $26.73 1%4 or 1%" $59.61 2" $104.81 Commodity Charge:per ccf of water used per month; $2.35 " The BWL standard residential installation is a 7"service line with a M"meter. The BWL reserves the right, in its sole judgment,to installs/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 0.1¢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 44.70 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. Regular Board Mtg. January 25,2011 Page 24 of 36 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 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. 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. 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 311/11 5/8" $10.27 3/4"" $14.38 1" $26.73 1'/"or 1'/:" $59.61 2" $104.81 3" $236.34 4" $421.30 6" $947.34 8" $1,683.14 10" $2,630.56 Commodity Charge:per ccf of water used per month; $2.35 The BWL standard residential installation is a 1"service line with a %"meter. The BWL reserves the right, in its sole judgment,to Install 5/B"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 44.70 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 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. Regular Board Mtg. January 25,2011 Page 25 of 36 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. 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 3/1/11 4"or smaller $66 6" $148 8" $263 10"or larger $410 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. 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. 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 3/1/11 all ccf $2.35 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 44.70 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 Regular Board Mtg. January 25,2011 Page 26 of 36 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. 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. 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. 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: 3/1/11 All Hydrants $435 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. 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. Steam; (Attachment C) Effective March 1, 2011 GENERAL STEAM SERVICE RATE NO.1 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 3/1/11 Basic Service Charge $11.19 per customer per month Commodity Charge Billing Months of June through November $13.06 per 1000 lbs.for the first 200,000 lbs. $13.70 per 1000 lbs.for all 1000 lbs.over 200,000 lbs. Billing Months of December through May $13.22 per 1000 lbs for the first 200,000 lbs. $13.86 per 1000 lbs.for all 1000 lbs.over 200.000 lbs. Regular Board Mtg. January 25,2011 Page 27 of 36 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(Ibs)billed. The factor shall consist of 1.124 times the weighted average amine cost per 1000 Ibs treated during the previous month. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.30/Mlb. 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. 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: 311/11 Demand Charge: $1.28 per pound per hour(lb/hr)for all Ib/hrs of contract demand $1.12 per pound per hour(lb/hr)for all Ib/hrs exceeding contract demand Commodity Charge: $8.15 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.30/Mlb. 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. Regular Board Mtg. January 25,2011 Page 28 of 36 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. 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 3/1/11 Basic Service Charge $8.29 per customer per month Commodity Charge Billing Months of June through November $10.18 per 1000 lbs.for the first 200,000 lbs. $10.64 per 1000 lbs.for all 1000 lbs.over 200,000 lbs. Billing Months of December through May $10.30 per 1000 lbs for the first 200,000 lbs. $10.77 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 customers 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. Environmental Charge—This rate is subject to an Environmental Charge as defined on a separate rate schedule incorporated herein by this reference. The current Environmental Charge is$0.30/Mlb. 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 BWUs 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. Chilled Water: (Attachment D) Regular Board Mtg. January 25,2011 Page 29 of 36 Effective March 1, 2011 GENERAL CHILLED WATER SERVICE RATE NO.1 Availabili —this rate is available to any customer desiring service from the Board of Water and Light(BWL)district cooling system. Service will be provided upon the customer entering into a contract with the BWL. The contract will govern the customer's contract demand and terms and conditions of service,which may vary due to customer requirements and the impact on BWL facilities. This rate is not available for standby or emergency service. Monthly Rate—Shall be computed in accordance with the following charges: Capacity Charge: $43.74 per ton for all tons of billing demand less than or equal to 105%of the contract demand, and$61.24 per ton for all tons of billing demand exceeding 105%of the contract demand. Commodity Charge: $0.124 per ton-hr 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 electrical energy,to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Minimum Monthly Charge—The capacity charge included in the rate. Billing Demand—The billing demand shall be the maximum demand(tons)supplied during the 15-minute period of maximum use,but not less than 85%of the contract demand. The General Manager is authorized to waive billing demand in excess of 105°%of the contract demand where such billing demand is incurred is the result of emergency conditions on a customer's system and such emergency condition is caused by equipment or piping failure and the BWL concurs in the existence of an emergency condition. Temperature Factor Adjustment—During the months of May through October;if the customer's return water temperature is below 57 degrees Fahrenheit(F),the customer's commodity charge will be increased by 2.0%for either;(1)each degree Fahrenheit the customer's supply and return water temperature differential is less than 150 F or,(2)each degree Fahrenheit the customer's return water temperature is below 570 F,whichever is less. The General Manager is authorized to waive the application of the Temperature Factor Adjustment where warranted in cases of customer hardship where such hardship is caused by facilities constructed prior to the BWL's District Cooling System. Meterin —All services using chilled water from the BWL chilled water system shall be metered. The BWL shall,through consultation with the customer,determine the form in which the commodity shall be metered. 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 Chilled Water Service that are incorporated herein by this reference. RESOLUTION #2011-01-03 Advance Approval of Electric and Steam Increases to Support the Addition of New Electric and Steam Generation WHEREAS, the BWL annually supplies 800,000 Mlbs of steam to 225 customers with four coal- fired boilers for heating and supply of hot water; and WHEREAS, steam production facilities are over 55 years old and it is estimated that it will cost $67-139 million to attempt to keep the steam production facility operational; and Regular Board Mtg. January 25.2011 Page 30 of 36 WHEREAS, BWL Staff evaluated several options for supplying steam and found that a new natural gas combined cycle co-generation power and steam plant is the least costly option resulting in the lowest long-term rates for steam customers; and WHEREAS, the proposed natural gas combined cycle cogeneration power and steam plant will preserve and enhance BWL's electric reliability; and WHEREAS, the BWL Staff expects to issue approximately$250 million in Revenue Bonds to finance the construction of the new Power and Steam Plant; and WHEREAS,The BWL Staff wishes to maintain its current credit ratings so as to be able to issue this new debt at the lowest possible rate; and WHEREAS,the expected Electric and Steam annual revenue requirements for the proposed plant are$19.3 million and $0.2 million respectively; and WHEREAS, the BWL Staff, in its effort to maintain its current bond ratings, proposed that the Board preapprove Electric and Steam Utility rate increases associated with the new plant to be effective in Fiscal Years 2013 and, 2014; and WHEREAS,the Staff has proposed electric rate adjustments that would increase annual electric billings by$7.3 million and $7.7 million respectively and proposed a steam rate adjustment that would increase annual steam billing by$0.2 million; and WHEREAS, notice of the proposed increases were communicated to all customers by public notice on December 29, 2010, and a public hearing was held on January 20, 2011 to receive public comments on the proposed increases; and WHEREAS,the Board of Commissioners has considered the comments of the public as well as recommendations made by the BWL. RESOLVED, that the rate increases to electric and steam rate schedules, as illustrated in the attachments, be adopted with applicable effective dates of October 1, 2012 and October 1, 2013. Electric: (Attachment A) October 1, 2012 and October 1, 2013 rate increases by rate schedule Steam: (Attachment B) October 1, 2012 rate increase by rate schedule Motion by Commissioner Bossenbery, seconded by Commissioner Louney,for the advance approval of Electric and Steam rate increases to Support the Addition of New Electric and Steam Generation Plant with effective dates of October 1, 2012 and October 1, 2013. Action: Carried unanimously Regular Board Mtg. January 25,2011 Page 31 of 36 Electric: (Attachment A) October 1, 2012 and October 1, 2013 rate increases by rate schedule Electric Rate Increases to Be Implemented on October 1,2012 and October 1,2013 for the New Steam Plant Increase 1011112 Increase 10/1113 Rate 1 Basic Service Charge $0.29 $0.31 Commodity Summer $0.0032 $0.0033 First 500 kWh $0.0035 Over 500 kWh $0.0033 Winter $0.0032 $0.0033 First 500 kWh $0.0035 Over 500 kWh $0.0033 Rate 3 Basic Service Charge $0.68 $0.72 Commodity $0.0038 Summer $0.0036 $0.0034 $0.0036 Winter Rate 4 1.53 Basic Service Charge $1. $ Capacity Charge $0.39 $0,41 .41 Commodity $0.0021 Summer $0.0020 $0.0019 $0.0020 Winter Reactive Power $0.0003 $0.0004 Rate 5 Basic Service Charge $3.63 $3.83 Capacity Charge On-Peak $0.31 $0.33 Maximum Demand $0.10 $0.11 Commodity Summer $0.0018 $0.0019 On-Peak $0.0018 Off-Peak $0.0017 Winter $0.0018 On-Peak $0.0017 $0.0017 $0.0018 Off-Peak Reactive Power $0.0003 $0.0004 Rate 7 Basic Service Charge $0.45 $0.48 Commodity Charge S0.0028' S0.0029 Regular Board Mtg. January 25,2011 Page 32 of 36 Rate 8 Basic Service Charge $11,35 $11.98 Capacity Charge On-Peak $0.35 $0.37 Maximum Demand $0.07 $0.07 Commodity Summer $0.0016 $0.0017 On-Peak $0.0015 Off-Peak $0.0014 Winter $0,0017 On-Peak $0.0016 $0.0014 $0.0015 Off-Peak Reactive Power $0.0003 $0.0004 Rate 9 On Overhead Mast Arm on Existing BWL Poles HP Sodium 100 W $0.40 $0.42 250 W $0.67 $0.71 400 W $0.72 $0.76 Mercury Vapor 175W $0.42 $0,44 400 W $0.72 $0.76 Floodlighting Luminaires on Braxket Arm on Existing BWL Poles HP Sodium 0 W $0.57 $0.60 10 100 W $0.71 $0.75 400 W $0.84 $0.88 Metal Halide $1.10 400 W $1.04 $1.80 $1.90 1000 W $2.63 1500 W $2.49 Type of Facilities 35-foot wood poles including span of OH secondary extension $0.51 $0.54 37-foot wood poles including span of OH secondary extension $0.75 $0,79 Rate 11 Basic Service Charge $0.09 $0.09 Commodity Charge $0.0014 $0.0014 Rate 12 Basic Service Charge $0.91 $0.96 Commodity Charge $0.0040 $0.0043 Summer Regular Board Mtg. January 25,2011 Page 33 of 36 Winter $0.0026 $0.0028 Rate 21 $0.20 Basic Service Charge $0.19 Commodity $0.0025 First 300 kWh $0.00 Next 200 kWh $0.0038 $0.0040 $0.0050 $0.0052 Over 500 kWh Rate 31 HP Sodium $3 70 W $3 100 W $3 $4 1 $4 $4 50W 250 W $5 $5 4 $6 $6 00W 1000W $13 $13 Mercury Vapor $3 100W $3 1 $4 $4 75W $5 250W $5 4 $6 $6 00W 1000W $11 $12 Metal Halide $7 175W $7 2 $8 $8 50W 4 $8 $8 00W 1000W $15 $16 150OW $23 $24 Induction $3 85W $3 165W $4 $4 Installations Wood Pole OH $4 Wood Pole UG $3 Concrete Pole OH $5 $6 Concrete Pole UG $5 $6 Post Top $3 $4 $11 $12 Historic Single Top Large Historic Dual Top $24 $ $35 Small Historic Duel Top $ $5 $5 Wall[Tunnel 8760 hours $5 $5 Wall Tunnel 4200 hours $3 $3 Bollard $11 $12 Rate 32 HP Sodium 62 70W $2 100W $2 $2 Regular Board Mtg. January 25,2011 Page 34 of 36 150W $2 $3 25OW $3 $4 40OW $5 $5 1000W $11 $12 Mercury Vapor 175W $2 $2 250W $3 $3 400W $4 $5 1000W $10 $10 Incadescent 2500E $3 $3 4000E $5 $5 6000L $6 $6 Steam: (Attachment B) October 1, 2012 rate increase by rate schedule Steam Rate Increases to Be Implemented on October 1,2012 for the New Steam Plant Increase 1011/12 Rate 1 Basic Service Charge $ 0.24 Commodity Charge June-November First 200 Mlb $ 0.28 Excess $ 0.29 December-May First 200 Mlb $ 0.28 Excess $ 0.30 Rate 2 Demand Charge Contract Demand $ 0.03 Excess Demand $ 0.02 Commodity $ 0.17 Rate 5 Basic Service Charge $ 0.18 Commodity June-November First 200MIb $ 0.22 Excess $ 0.23 December-May First 200MIb $ 0.22 Excess $ 0.23 Regular Board Mtg. January 25,2011 Page 35 of 36 UNFINISHED BUSINESS There was no Unfinished Business NEW BUSINESS There was no New Business MANAGER'S REMARKS General Manager Lark's comments are referenced under Commissioners' Remarks. COMMISSIONERS' REMARKS Chair Sandra Zerkle spoke about the enormous amount of time and thought that the Board of Commissioners put in when considering rate proposals. She stated that Mr. Lark came to the Board of Commissioners over 3 years ago regarding the necessary replacement of the Eckert Plant stating that it was old, not efficient and not going to meet the environmental requirements that will be in place in coming years. We as a Board do not take rate increases lightly and we take public comment seriously and are very concerned about our customers. We as Commissioners have a task to do and that is to make sure that we have affordable rates and we have safe, reliable services and good environmental stewardship Commissioner Cynthia Ward thanked the BWL employees who greeted her and her husband so warmly at the holiday party. She also commended Mark Nixon on the very nice Annual Report, it was a keepsake. Commissioner Tracy Thomas thanked General Manager Lark and his staff for maintaining a very good credit rating. He also thanked General Manager Lark for eloquently responding to all of the issues that the owners of the BWL spoke about at the Public Hearing. He thanked all of the people who came to the public hearing and shared their concerns. He stated that he believes that the new plant will help us down the road to maintain low rates for generations to come. Commissioner Marilyn Plummer thanked General Manager Lark, his staff and those who have helped so diligently to continuously keep the Commissioners informed. She stated that she appreciated General Manager Lark thoroughly addressing all of the concerns that were brought up at the Public Hearing on behalf of the Commissioners. Commissioner Tracy Thomas congratulated Brandie Ekren on her leadership move as the General Counsel and Executive Director of Employment Affairs General Manager Lark stated that with all of the praise and the kind words from the Commissioners regarding responding to all of the questions that were raised at the Public Hearing, he wanted to be sure to thank his excellent Administrative Staff in preparing and assisting him with all of the answers; he could not have done it without their leadership and hard work. PUBLIC COMMENTS There were no public comments. Regular Board Mtg. January 25,2011 Page 36 of 36 EXCUSED ABSENCE There was no Motion for any excused absences. ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner DeLuca the meeting adjourned at 6:26 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes filed with Lansing City Clerk on February 3,2011 Final Approved Minutes f led with Lansing City Clerk on March 28,2011 Approved on September 27,2011 .UaLij MINUTES OF THE BOARD OF COMMISSIONERS` MEETING LANSING BOARD OF WATER AND LIGHT July 26, 2011 The�oard of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Commissioners Margaret Bossenbery, Dennis Louney, Marilyn Plummer, David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Absent: Commissioner Anthony McCloud. The Corporate Secretary declared a quorum present. Commissioner Tracy Thomas led the Pledge of Allegiance. General Manager Lark provided an update on the accident at the Wise Road Water Treatment Plant. APPROVAL OF MINUTES Motion by Commissioner Ward seconded by Commissioner Price to approve the minutes of the Regular Board Meeting minutes of May 24, 2011. Action: Carried unanimously PUBLIC COMMENTS 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 was no Public Comment. ------------------ COMMUNICATIONS a. Thank You Note from Susan Lark. Received and Place on File Regular Board Mtg. July 26,2011 Page 2 of 13 COMMITTEE REPORTS COMMITTEE OF THE WHOLE July 12, 2011 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:30 p.m. on Tuesday, July 12, 2011. Acting Chair Zerkle called the Committee of the Whole meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Tracy Thomas, Cynthia Ward, Marilyn Plummer and Sandra Zerkle. Absent: Commissioners Frank Lain, Dennis M. Louney and David Price Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Bossenbery, seconded by Commissioner Ward to approve the Committee of the Whole meeting minutes of May 10, 2011. Action: Motion Carried Energy Optimization Plan General Manager Lark stated that the Energy Optimization Plan is mandated by Public Act(PA) 295 in which it requires utilities to review and update their plans every couple of years. The Energy Optimization Plan Update is reviewed by the Public Service Commission (PSC) and the public must be invited to comment on the update, in which the Board of Water& Light will do so through the Connections Newsletter. The Board of Commissioners' have to be made aware of the update and that public comment is being solicited for comment. The comment period will start August 1, 2011. Sue Warren, Manager of Marketing and Business Strategies, stated that PA 295 was passed in October of 2008 and it requires an evaluation, update and public comment of every utility's Energy Optimization Plan biennially. Ms. Warren stated that the Optimization Plan will be posted to the Board of Water& Light's website and that the August edition of the Connections Newsletter will contain a section for solicitation of public comments. Comments can be sent by internet or mail and the pubic can also meet with George Stojic, Executive Director of Strategic Planning the week of August 22nd. This Optimization Plan is being submitted for the years 2012 through 2014. Ms. Warren also provided information on Board of Water& Light's recent addition of a PILOT Energy Optimization Program for small businesses, new construction and residential walk through audit program. Regular Board Mtg. July 26,2011 Page 3 of 13 Commissioner Cynthia Ward stated that she recently availed herself of the refrigerator recycling program and the website was very user-friendly and the people involved were timely and professional. REO Town Update Susan Devon, Project Director of the REO Town Cogeneration Plant, provided an update on the following progress of the plant construction: ■ Christman Co. has been selected as the construction manager ■ Project Labor Agreement with the Michigan Building Construction and Carpenters Trades for work on the plant and office building has been entered into. ■ Meeting scheduled with Board of Water& Light, the construction manager, trade contactors, union representatives and MIOSHA with respect to elevating the level of safety for the building of the plant itself. ■ Entered major equipment contacts for the Combustion Turbine, Steam Turbine and the Boiler ■ The Steam Vault has been substantially completed on site ■ Piling work will be starting sometime in mid September or early October. ■ Entered into a contract with Consumers Energy Co. for the Natural Gas Pipeline Ms. Devon stated that the Cogeneration Plant construction project is both on schedule and on budget. Commissioner Tracy Thomas congratulated General Manager Lark on his presentation at the REO Cogeneration Plant Groundbreaking ceremony. F-RIB Update George Stojic, Executive Director of Strategic Planning and Development, provided an update on the RFP to serve MSU's Facility for Rare Isotope Beams (FRIB) project. Mr. Stojic stated that the main question is by which option the Board of Water&Light can serve both the FRIB and MSU, either by retail or wholesale. Other Marilyn Plummer thanked General Manager Lark,the Board of Water& Light and the Board of Commissioners on behalf of the Juneteenth Committee for all of their support for the Juneteenth Celebration, She gave a special thanks to Angie Goodman of the Board of Water& Light for her assistance with showcasing the Electric Volt vehicle. It was a great event. General Manager Lark provided the Board of Commissioner with a hard copy of the final official statement for the bond rating for the REO Town Cogeneration Plant. Mr. Lark also provided the Commissioners with a copy of the Final Pricing Book with respect to the $250,000,000 Utility System Revenue Bonds, Series 2011 A. Commissioner Sandra Zerkle thanked Margaret Bossenbery, Susan Devon and Dick Peffley for the picnic that they recently hosted. Regular Board Mtg. July 26,2011 Page 4 of 13 Excused Absence Motion by Commissioner Thomas seconded by Commissioner Plummer to excuse Commissioners Louney and Price from tonight's meeting. Action: Carried Unanimous Adiourn On Motion by Commissioner Bossenbery, seconded by Commissioner Plummer, the meeting adjourned at 6:11 p.m. Respectfully Submitted Sandra Zerkle, Acting Chair Committee of the Whole FINANCE COMMITTEE July 12, 2011 The Finance Committee of the Board of Water and Light met at the Executive Offices, beginning at 6:30 p.m. on Tuesday, July 12, 2011. Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Margaret Bossenbery, Marilyn Plummer and Tracy Thomas. Alternate committee members Commissioners Cynthia Ward and Sandra Zerkle were also present. Absent: Commissioner Dennis M. Louney Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Thomas to approve the Finance Committee meeting minutes of May 10, 2011. Action: Carried unanimously. External Audit Communication to the Board Presented by Shaun Krick,CPA, Plante&Moran General Manager Lark introduced external auditor Shaun Krick, Manager with Plante Moran (P&M) who reviewed and presented the Statement on Auditing Standards (SAS) 114 External Audit Report. Mr. Krick said that the SAS 114 involves communication between the external auditors and the Governing Board. It requires that the external auditor report and update Governance with anticipated audit plans and any significant issue or findings that are reasonably anticipated during the year as well as anticipated ways to solve those issues and gather information from the Board pertaining to areas that may be of concern regarding an increased risk of material misstatement in financial records. Regular Board Mtg. July 26,2011 Page 5 of 13 The scope of the Audit that will be performed is to express an opinion of the financial statements of the Board as well as each of the pension plans. There will be a management letter or significant deficiency(SAS 115) letter if that is required at the end of the engagement as well as having another meeting in September to discuss the results of the audit procedures. Mr. Krick reviewed the following: ■ Audit Process ■ Auditor Responsibility ■ Management Responsibility ■ Testing Phases ■ Required Discussion Points ■ Significant Risk Misstatement ■ Responses to Significant Risk Misstatement ■ Additional Required Discussion Points ■ Communication to those Charged with Governance In response to the required discussion points mentioned on page#12 of the presentation, the Finance Committee indicated that the Board should maintain the current policy designating Susan Devon,Assistant General Manager and Chief Financial Officer as the appropriate contact person for any Audit questions. Mr. Krick asked the Board of Commissioners if there were any areas of concern that warrant attention or additional procedures. In response to Mr. Krick's question the Board of Commissioners stated no areas of concern. 401 A Defined Contribution Plan General Manager Lark stated that the 401A Plan is the pension plan that the Board operates. Whenever any changes takes place with the plan the Administration is required to come before the Board of Commissioners for approval of the change and that is the purpose of what is being done today. Although there is no actual change, because the Board does not make contributions to 401 Plans until the employee has been with the Board for 6 months, that part of the plan stating that the employer contributions to this 401A Plan will take place only following 6 months from the date of hire is being reduced to writing. General Manager Lark asked that the resolution associated with this 401A Plan be approved and forwarded to the full Board for its consideration. On motion by Commissioner Plummer, seconded by Commissioner Thomas, to forward to the full Board the proposed resolution to consider the 401A Defined Contribution Plan to clarify the timing of the employer contribution to the Plan. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 6 of 13 North Lansing Dam Repair General Manager Lark stated the North Lansing Dam is inspected for safety every 4 years and in 2007 it was determined that repairs were needed in order to maintain safety. The estimated cost for the Dam repair was$689,000. Later it was determined that the repair work should be performed without lowering the river level; and as a result of that determination, it was decided that a cofferdam would be used to complete the repair project. Because of the cofferdam, coupled with higher bids being submitted to do the repair jobs, the estimated cost of repairs increased significantly. The new estimate of the repair work is$1.2 Million. The Board requires anything over 15% higher than budget be brought back to the governing body for approval. After dialogue and a short question and answer session amid the Commissioners and General Manager Lark, a motion was made. On motion by Commissioner Plummer, seconded by Commissioner Thomas, to forward to the full Board the proposed resolution approving a revised budget for the North Lansing Dam Repair. Action: Carried unanimously Internal Audit Status Report Finance Chair Bossenbery reviewed the memorandum that was included in the packet regarding updates on the Internal Auditor functions. Finance Chair Bossenbery stated that the vacant position of Associate Internal Auditor Perez Goree would not be filled at this time. Also the contract for the Internal Auditing augmentation services contract has been awarded to Charles Moore& Associates. With those changes in effect a revised internal auditor status report will be presented by Internal Auditor Perkins at tonight's meeting. Internal Audit Status Report Internal Auditor Phil Perkins presented an overview of Internal Auditors Status Report that included: FY 2012 Audit Planning • Risk analysis was performed by Internal Auditor and management of all auditable activities at BWL. • Use of Warren, Gorham & Lamont(WG&L, recognized tax, accounting and audit research firm) risk assessment factors and weighted scoring tailored to BWL environment. • Identified top potential audits per discussions and assessment. • Goal is to complete as many high-quality, risk-based audits as possible in FY2012. • The risk score and other factors were used to identify activities for potential audit. Other factors used: • Balanced audit coverage between financial and operational areas. • Audits of activities that had Risk/Scoping assessments performed in prior years. • Available audit resources were compared to estimated hours required to complete the selected audits. • Available Resources: • Director of Internal Audit 1,800 hrs* • Contracted Internal Audit Services 1,200 hrs** Total 3,000 hrs * Based on 85% of total annual available hrs to allow for holidays, vacation, training, etc. ** Based on recent history and available budget. Regular Board Mtg. July 26,2011 Page 7 of 13 FY 2012 Recommended Audit Plan Planned Audits & Estimated Hours Audit Title FY2012 Hours Payroll Management 600 Procurement Management 500 Billing Processes & Controls 500 Capital Assets Processes &Controls 600 Subtotal 2,200 IT Governance/High Level Risk Assessment 300 Quick Fraud Prevention Audits (Cash Counts) 200 Consulting Engage ments/Other* 300 Total 3,000 *Time permitting, an audit of Records Retention Management will be added. Finance Chair Bossenbery stated also to help with the Audit process the Enterprise Risk Management Group that is headed by Mike Collins is available for assistance. She also stated if Mr. Perkins feels that he does need any assistance to please bring the issue back to the Board. Chair Zerkle stated that she would like a report in 6 month on the progress of Mr. Perkins Audit process. On motion by Commissioner Plummer, seconded by Commissioner Thomas the Finance Committee accepted the Audit Plan presented by the Director of Internal Audit. Action: Motion Carried Excused Absence On motion by Commissioner Thomas, seconded by Commissioner Thomas, to excuse the absence of Commissioner Dennis M. Louney. Action: Carried unanimously. Other None. Admourn On Motion by Commissioner Plummer, seconded by Commissioner Thomas, the meeting adjourned at 7:30 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee Regular Board Mtg. July 26,2011 Page 8 of 13 NOMINATING COMMITTEE MINUTES July 19, 2011 The Nominating Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 12:15 p.m. on Tuesday, July 19, 2011. Nominating Committee Chair Tracy Thomas called the meeting to order and asked the Corporate Secretary to call the roll. The following committee members were present: Commissioners Marge Bossenbery, Marilyn Plummer, Tracy Thomas, Cynthia Ward and Alternate Committee Member David Price. Also in attendance was Commissioner Dennis M. Louney. Absent: None Approval of Minutes Motion by Commissioner Plummer, seconded by Commissioner Ward to approve the Nominating Committee meeting minutes of July 20, 2010. Action: Motion Carried Public Comment There were no public comments. Nominate Board Officer Candidates for FY 2011-2012 The Nominating Committee met to review the Commissioner Survey responses for consideration of board officer nominations for the Board of Water & Light Board of Commissioner's Chair and Vice Chair for fiscal year 2011-2012. Upon discussing and reviewing the submitted survey forms Nominating Chair Tracy Thomas opened the floor for nominations. Motion by Commissioner Plummer, seconded by Commissioner by Bossenbery, to nominate Sandra Zerkle to serve as the Chair for the 2011-2012 FY. Action: Motion Carried Motion by Commissioner Ward, seconded by Commissioner by Bossenbery, to nominate Dennis M. Louney to serve as the Vice Chair for the 2011-2012 FY. Action: Motion Carried Nominating Committee Chair Thomas stated the Nominating Committee's recommended slate of offices will be presented to the full Board for consideration at the Regular Board meeting of July 26, 2011. The recommended slate of officer candidates for FY 2011-2012 will consist of: Chair: Sandra Zerkle Vice Chair: Dennis Louney Vice Chair Louney stated that he appreciates the faith that the Board has in him and appreciates the opportunity to serve in this capacity. There being no further business, the meeting adjourned at 12:20 p.m. Respectfully submitted, Tracy Thomas, Chair Nominating Committee Regular Board Mtg. July 26,2011 Page 9 of 13 MANAGER'S RECOMMENDATIONS General Manager Lark said no where in the ICMA Adoption Agreement is it stated that an employee may not receive 401A Defined contributions until the employee has been with the Board of Water& Light six months. The proposed resolution will allow for this language to be put in writing and eliminate any ambiguities. He stated that this addition to the language does not change the substance of the plan. General Manager Lark respectfully requested that the Board approve this 401A Defined Contribution Plan adjustment. RESOLUTION#2011-07-01 401A DEFINED CONTRIBUTION PLAN RESOLVED,that the Board of Commissioners hereby amends the ICMA Adoption Agreement to clarify that employer contributions will occur following six(6) months from the date of hire. FURTHER RESOLVED, that the Board of Commissioners hereby amends the ICMA Governmental Money Purchase Plan &Trust in accordance with Post-EGTRRA Legislative and Regulatory Changes. FURTHER RESOLVED, that the Chair is hereby authorized to execute the above referenced documents on behalf of the Board of Commissioners. Staff Comments.- The BWL has always made pension contributions following 6 months from the date of hire for eligible plan participants. This clarification eliminates any potential ambiguity. The Post-EGTRRA Legislative and Regulatory changes require updates to all plan documents that offer pension benefits of any form. The Board of Commissioners approved a similar compliance update for the Defined Benefit Plan. Despite the compliance language updates, the BWL's Defined Contribution plan has not changed in substance or form.All benefits remain intact. Motion by Commissioner Bossenbery seconded by Commissioner Louney, to approve the resolution for the 401A ICMA Plan Revisions. Action: Carried Unanimously ------------------------ General Manager Lark stated that the State of Michigan requires that a safety inspection be performed on the North Lansing Dam every 4 years. After doing an inspection it was determined that certain adjustments had to be made to the Dam to put it in a safe position. The initial project was budgeted for$689,000 and the current estimated budget is $1.2 Million. With there being an appreciable amount due to the use of the cofferdam and the addition of the gate seals improvements the budget matter must be brought to the attention and approved by the Board of Commissioners. He respectfully asked that the Board approve the new budget for this project. Regular Board Mtg. July 26,2011 Page 10 of 13 RESOLUTION#2011-07-02 RESOLUTION FOR NORTH LANSING DAM REPAIR WHEREAS, the original project scope and budget estimate for the North Lansing Dam Repair Project(NLD)was developed from a report prepared by Stantec Consultants in 2009 which anticipated the lowering of the river to complete the required concrete pier repair work and the filling of scour holes downstream of the dam apron; and WHEREAS, this resulted in an initial project budget amount of$689,000; and WHEREAS, during the final development of the design and construction documents, discussions with BWL operations personnel and affected users of the Grand River required a cofferdam to be constructed across the majority of the river to maintain the river level during construction and additional work for adjustment or replacement of the existing dam gate seals. BE IT RESOLVED, that based on the actual bid prices received, the budget for the North Lansing Dam Repair Project be increased from$689,000 to $1,200,000 to accommodate the increased scope of work and associated construction costs. Staff Comments The State of Michigan requires that a safety inspection be performed on the NLD every 4 years. Following the safety inspection in 2007 it was determined that repairs were required to maintain the safety of the dam. The major items requiring repair were removal and replacement of the concrete piers that hold the dam gates and the filling of a large scour hole at the downstream apron of the dam. When the initial estimate was prepared it was anticipated that the work could be performed by lowering the river level at the dam by four feet. During the design of the repair and discussions with the City of Lansing Parks Department regarding use of the Burchard Park for access to the dam for the repair work, it was discovered that several business and river users would be adversely impacted by the extended lowering of the river level throughout the downtown area. Therefore, it was determined that the work should be performed without lowering the river level, requiring an increase in the amount of cofferdam work. Additionally, since the initial consultant report and estimate was prepared it was determined that the existing gate seals are leaking and require either adjustment or replacement. Since this seal work would require dewatering the area around the concrete piers that hold the gates, it was determined that the seal adjustment or replacement should occur at the same time as the concrete pier repairs. The increased scope of work and construction costs are reflected in the bid prices received. Motion by Commissioner Ward seconded by Commissioner Price, to approve the resolution for the revised budget for the North Lansing Dam repair. Action: Carried unanimously UNFINISHED BUSINESS There was no Unfinished Business Regular Board Mtg. July 26,2011 Page 11 of 13 NEW BUSINESS The Nominating Committee recommended a slate of officers for the 2011-2012 Fiscal Year. The slate of officers included Commissioner Zerkle as the Chair and Commissioner Louney as the Vice Chair. Chair Zerkle asked if there were any nominations from the floor for Chair and Vice Chair. There were no nominations from the floor. Moved by Commissioner Price and supported by Commissioner Bossenbery that nominations be closed and that a unanimous ballot be cast for the nominated slate of Officers with Sandra Zerkle as Chair and Dennis M. Louney as Vice Chair. Action: Carried unanimously. Chair Zerkle and Vice Chair Louney stated their appreciation for their reappointments. They both stated that it is an honor to serve in their positions as an Officer of the Board. Chair Zerkle stated that the Executive Committee consists of the Chair, Vice Chair and Past Chair as well as another member of the Board. With no Past Chair presently on the Board there a two positions on the Executive Committee to make it complete. Motion by Commissioner Plummer and seconded by Commissioner Ward to nominate Margaret Bossenbery and Tracy Thomas as the final members of the Executive Committee. Action: Motion Carried RESOLUTIONS RESOLUTION#2011-07-03 Appointment 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 1st of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of Director and General Manager for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: J. Peter Lark, Director and General Manager FURTHER RESOLVED, That Mr. Lark shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2016, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Thomas seconded by Commissioner Ward, to reappoint J. Peter Lark to the Charter position of Director and General Manager for fiscal year 2011-2012. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 12 of 13 RESOLUTION#2011-07-04 Appointment of the Charter Position of Internal Auditor 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 appoints the following individual to the Charter position of Internal Auditor for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: Philip Perkins, Internal Auditor FURTHER RESOLVED, That Mr. Perkins shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2013, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Price seconded by Commissioner Ward, to reappoint Philip Perkins to the Charter position of Internal Auditor for fiscal year 2011-2012. Action: Carried unanimously RESOLUTION#2011-07-05 Appointment 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 appoints the following individual to the Charter position of Corporate Secretary for fiscal year 2011-2012, or, until a successor is appointed, whichever last occurs: M. Denise Griffin, Corporate Secretary FURTHER RESOLVED, That Ms. M. Denise Griffin shall be extended an employment contract which shall be effective from July 1, 2011, and expire on June 30, 2013, or until a successor is appointed, whichever later occurs. ---------------- Motion by Commissioner Ward seconded by Commissioner Plummer, to reappoint M. Denise Griffin to the Charter position of Corporate Secretary for fiscal year 2011-2012. Action: Carried unanimously Regular Board Mtg. July 26,2011 Page 13 of 13 MANAGER'S REMARKS General Manager Lark stated during the last 10 to 14 days the Board of Water& Light has had a difficult time meeting the load due to the extreme heat; however with the herculean efforts of the BWL's employees to keep our units running, and not buying power elsewhere, we have done quite well. The BWL has come close to it peak. General Manager Lark stated that the Board of Water& Light has moved more water in the last 10- to 14 days then ever before. Chilled Water is also doing well in that a 4th Chiller has been in use for many days. He applauded the BWL workers for their hard work. General Manager Lark reminded everyone that the 5K Run/Walk is Saturday, August 13th. There are 350 runners registered for the run/walk, which is the largest number of participants for this event. Last year this event raised $3000.00 for the Pennies for Power program which is administrated by CACS for those who can not afford to pay for their utilities. The Chili-Cook-Off also made approximately an $18,000 profit this year in which the proceeds will be distributed to HOPE Scholars, Sparrow Foundation and the Impressions 5 Museum. Also the IBEW and BWL had its annual Golf Outing and raised $3000.00 just recently for Pennies for Power and the City Rescue Mission. COMMISSIONERS' REMARKS Commissioner Thomas congratulated Sandra Zerkle and Dennis Louney on their reappointments as Chair and Vice Chair of the Board. He also congratulated the 3 Board Appointed employees on their reappointments. PUBLIC COMMENTS Robert J. Schmidt III of Holt, MI spoke about the BWL's 1st STEP program and requested the Board consider an alternative means of issuing 1st STEP Scholarship funds that his was son was eligible for through Lansing Community College. In response to Mr. Schmidt's comments Chair Zerkle stated that she had received an email regarding this matter. She stated that she empathizes with the situation however this scholarship is specific to LCC for tuition and fees. General Manager Lark stated that he has all the documents that show that the BWL has issued a check for$1500.00 to the LCC Foundation for scholarship distribution to the 11t participants. In the email submitted by Mr. Schmidt III, it was requested that the$1500.00 be put on a debit card and be used for living funds. The scholarship terms of this program have always been that the money would be used for tuition and fees. EXCUSED ABSENCE On motion by Commissioner Price, seconded by Commissioner Bossenbery to excuse Commissioner McCloud from tonight's meeting. ADJOURNMENT On motion by Commissioner Thomas, seconded by Commissioner Price the meeting adjourned at 6:10 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes fled with Lansing City Clerk on August 4,2011 Final Approved Minutes Filed with Lansing City Clerk on September 28,2011