HomeMy WebLinkAbout2017 Minutes BWL Officially Approved January 3,2018
Hometown People.Hometown Power.
LANSING BOARD OF WATER AND LIGHT
BOARD OF COMMISSIONERS
SPECIAL MEETING MINUTES
December 5, 2017
The Board of Commissioners met at the BWL Headquarters-REO Town Depot located at
1201 S. Washington Ave., Lansing, MI, at 5:00 p.m. on Tuesday, December 5, 2017.
Chairperson David Price called the meeting to order at 5:00 p.m. Chairperson Price
announced that due to the posting of the meeting time at both 5:00 p.m. and 5:30 p.m. in
the Lansing State Journal, and in order to give everyone a chance for public comment, the
meeting would start at 5:00 p.m., as much business as possible would be conducted, and if
all business was finished before 5:30 p.m. the vote would be held, the meeting would
recess and reconvene at 5:30 p.m. There would then be a call for any additional public
comment, and then the vote would be held on the resolution.
Corporate Secretary Griffin called the roll.
Present: Commissioners Beth Graham, Dennis Louney, Anthony McCloud, Anthony
Mullen, David Price, Ken Ross, Tracy Thomas, and Sandra Zerkle (at 5:10 p.m.) Non-Voting
Commissioners present: Douglas Jester (East Lansing) (at 5:08 p.m.), William Long (Delta
Township), and Rod Taylor (DeWitt Township).
Absent: None
The Corporate Secretary declared a quorum.
Commissioner Rod Taylor led the Pledge of Allegiance.
MEETING PURPOSE:
Consider a Resolution for a Rate Structure Change for Electric, Water, Steam, and Chilled
Water Rate Schedules to be Effective February 1,2018, 2019, and 2020.
Commissioner Price stated that he called for this Special meeting to consider the rate
structure change for electric, water, steam, and chilled water rate schedules and would like
to put forward a Resolution.
RESOLUTION#2017-12-01
2018—2020 Rate Adjustments
WHEREAS, rates shall be established at a level that will enable the Board of Water and
Light (BWL) to meet its mission of serving the Greater Lansing area by providing high
quality utility services, reliably, at the lowest reasonable cost; and
Special Board Mtg.
December 5,2017
Page 2 of 3
WHEREAS, in accordance with the BWL's Rate Making Principles, BWL management has
reviewed the electric rates relative to its financial plan and recommends an overall
increase of 3%, comprised of varying individual rate class increases, to electric billings on
February 1, 2018, February 1, 2019, and February 1, 2020; and
WHEREAS, in accordance with the BWL's Rate Making Principles, BWL management has
reviewed the water rates relative to its financial plan and recommends a 5.5% increase to
water billings on February 1, 2018 and a 7.5% increase to water billings on February 1,
2019 and February 1, 2020; and
WHEREAS, in accordance with the BWL's Rate Making Principles, BWL management has
reviewed the steam rates relative to its financial plan and recommends a 5.5% increase to
steam billings on February 1, 2018 and a 7.5%increase to steam billings on February 1,
2019 and February 1, 2020; and
WHEREAS, the notice of the proposed increases was communicated to all customers by
public notice on November 14, 2017, and a public hearing was held on November 30, 2017
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.
THEREFORE, it is:
RESOLVED, that the electric, water, steam, and chilled water rate schedules, detailed in
attachments A—D, be adopted and made effective for electric, water, steam, and chilled
water consumption on February 1, 2018, February 1, 2019, and February 1, 2020.
Motion by Commissioner Mullen, Seconded by Commissioner McCloud to approve the
stated Resolution.
PUBLIC COMMENT
None.
Chair Price recessed the meeting at 5:02 p.m.
Chair Price reconvened the meeting at 5:30 p.m. and called again for Public Comment.
PUBLIC COMMENT
None.
Chair Price called for a vote on the motion before the Board to adopt the Rate Schedule
Resolution.
Yeas: Commissioners Graham, Louney, McCloud, Mullen, Price, Ross,Thomas, and Zerkle
Nays: None
Action: Carried Unanimously
Special Board Mtg.
December 5,2017
Page 3 of 3
MANAGER'S REMARKS/COMMENTS
None.
COMMISSIONERS' REMARKS/COMMENTS
Commissioner Zerkle stated that the Commissioners have spent many hours in the last six
months to review, understand and determine what rate increase would be optimum.
There were many presentations and lots of information presented the Board by the
General Manager Peffley and Chief Financial Officer Heather Shawa their Administration.
She also stated that the Commissioners take the comments seriously that are given by the
customers and clients. Mr. Peffley has responded to the comments given by customers
and clients and his responses have been presented to the Commissioners.
Chair Price stated that this rate schedule resolution started with the IRP over a year ago
and went through several processes. He also thanked all the staff that worked on the
proposal and noted that the Commissioners approved the rate schedule resolution
unanimously.
Chair Price announced that Commissioner Rod Taylor will be leaving the manager position
of DeWitt Township to go to work for the Michigan Department of Treasury. He welcomed
Commissioner Taylor's continuation on this Board.
PUBLIC COMMENT
None.
Chair Price noted that the Lansing State Journal on their own posted two different meeting
times for today's Special Board meeting.
Commissioner Thomas stated that is was not the fault of the Corporate Secretary that the
newspaper incorrectly posted the meeting time. She posted and noticed the Special Board
meeting for 5:00 p.m. on December 5, 2017.
ADJOURNMENT
Chair Price adjourned the meeting at 5:37 p.m.
Filed with Lansing City Clerk:
12-12-17-Unofficial Minutes
1-29-18 Official Minutes
Approved by the Board of Commissioners 1-23-18
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Hometown People. Hometown Power.
MINUTES OF THE BOARD OF COMMISSIONERS MEETING
LANSING BOARD OF WATER AND LIGHT
November 14, 2017
The Board of Commissioners met at the Lansing Board of Water and Light (BWL) Headquarters-REO Town
Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Tuesday, November 14, 2017.
Chairperson David Price called the meeting to order at 5:46 p.m.
Present: Commissioners David Price, Beth Graham, Dennis Louney, Anthony Mullen, Tracy Thomas, and
Sandra Zerkle. Non-Voting Commissioners present: Douglas Jester (East Lansing), William Long (Delta
Township) and Rod Taylor (DeWitt Township).
Absent: Commissioner(s) Anthony McCloud and Ken Ross.
The Corporate Secretary declared a quorum.
Commissioner Beth Graham led the Pledge of Allegiance.
Commissioner Price recognized and welcomed the newest Commissioner, Doug Jester, representing the city of
East Lansing.
APPROVAL OF MINUTES
Motion by Commissioner Graham, Seconded by Commissioner Thomas, to approve the Regular Board
Meeting minutes of September 26, 2017.
Action: Motion Carried
PUBLIC COMMENTS
None.
COMMUNICATIONS
Electronic Mail received regarding the rate adjustments from:
a. Diana Grinwis-Referred to Management. Received and Placed on File
b. Ryan, No last name provided - Referred to Management. Received and Placed on File
c. Marcella Reynolds- Referred to Management. Received and Placed on File
d. Thomas Eldred - Referred to Management. Received and Placed on File
e. Linda Riley- Referred to Management. Received and Placed on File
1
f. Tam R.Arend - Referred to Management. Received and Placed on File
Commissioner Price presented the Finance Committee Report:
FINANCE COMMITTEE
Meeting Minutes
November 7, 2017
The Finance Committee of the Board of Water and Light (BWL) met at the BWL Headquarters — REO Town
Depot, located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Tuesday, November 7, 2017.
Finance Committee Chair Ken Ross called the meeting to order and asked that roll be taken.
Present: Commissioners Ken Ross, Beth Graham, Dennis Louney, and David Price. Also present: Commissioners
Anthony Mullen and Sandra Zerkle, and Non-Voting Commissioners Bill Long (Delta Township), and Douglas
Jester(East Lansing).
The Corporate Secretary declared a quorum.
Public Comments
None
Approval of Minutes
Motion by Commissioner Price, Seconded by Commissioner Graham, to approve the Finance Committee
meeting minutes of September 19, 2017.
Action: Motion Carried.
September YTD Financial Summary
Chief Financial Officer (CFO), Heather Shawa presented the following:
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Cash targets are green and continue to be on track. The Income Statement indicates that the quarter ended
slightly beating the revenue budget and spending is down. The primary difference from actual YTD from this
year compared to last year is due to the first quarter last year being hot and dry, along with additional units at
Eckert. The projected fiscal-year-end net income has not been changed from the FY18 budget and based on
the first quarter review expectations are to be at or slightly under budget. Ms. Shawa explained the
differences between retail and wholesale in revenue. Retail includes residential, commercial, and industrial
customers; and wholesale includes excess that can be sold into the market. Residential customer quantity is
2
about 80% of total quantity of customers and 20% of revenue. Ms. Shawa also mentioned that three out of
the five ratios are above or at benchmark, Days Sales Outstanding is one day different, and Bad Debt is typical
for first quarter review.
Commissioner Mullen inquired whether there was any significant difference between the Board's practices in
writing off bad debt and the APPA. Ms. Shawa responded that there wasn't any difference in process and the
APPA Median is the closest benchmark comparison available even though BWL is a large municipal utility and
the comparison is with smaller municipal utilities.
Commissioner Ross asked whether the APPA Median is the actual median or average. Ms. Shawa stated that
she will confirm and follow up that the number provided is intended to be the median rather than the
average.
Commissioner Ross also inquired about the number of temporary employees and both Ms.Shawa and General
Manager Dick Peffley responded that some temporary employees will roll into full time positions. Since meter
readings will be discontinued with AMI,temporary employees were hired specifically for that length of time.
Commissioner Long inquired about wholesale being down this year and whether there was a surplus on the
market. GM Peffley responded that only one of the three substations, the Eckert station, was run and staffed
last year.
Commissioner Mullen asked whether the wholesale was reflected in the budget this year and GM Peffley
responded that it was and is on target.
Capital Proiect Exceedance Approvals
Finance Committee Chair Ross explained the Capital Project Exceedance Policy stating that a budget was set
and approved and it was exceeded by 15% or$200,000, therefore requiring management to come back to the
Board of Commissioners and get approval for the excess amount.
CFO Heather Shawa introduced the Canal Substation Distribution Resolution, Project PE-20196, by briefly
explaining that the project described in the resolution originally included two distribution feeders or circuits
and also a direct tie-in service to a key customer. Part of the increase is to add a third feeder circuit which will
accommodate expected growth and is required for the groSolar Project.
Commissioner Ross stated that an amendment to the proposed resolution for the Canal Substation
Distribution was provided which corrected the budget amount of$433,000 to $443,000.
Motion by Commissioner Price, Seconded by Commissioner Graham, to substitute the amended resolution for
the Canal Substation Distribution and to accept the resolution as presented.
Action: Motion Carried
Discussion
Commissioner Mullen asked what differences and changes were made in this project and Ms. Shawa
responded that in addition to the increased load and the third circuit, there were a couple vendor issues
involving design and testing, and to complete the project at the time stated costs were incurred.
Motion by Commissioner Price, Seconded by Commissioner Graham, to approve the resolution for the Canal
Substation Distribution and to forward to the full Board for approval.
3
Action: Motion Carried.
CFO Heather Shaw introduced the Capital Project Exceedance Enterprise Service Bus (ESB) Resolution, Project
PG-40044, by briefly explaining that the project described in the resolution is part of the BSmart technology
projects. ESB collects and communicates data to and from BWL's new technology projects in the BSmart
portfolio and future technologies. Originally ESB had four testing, development, and live production
environments and after review it was recommended and supported that there be ten environments. The cost
increase is for the additional licenses and the additional environments to support an efficient and secure
system, and also for labor.
Commissioner Long asked if there is an anticipated addition of more environments and Ms. Shawa stated that
there is not at this time.
Motion by Commissioner Price, Seconded by Commissioner Graham, to forward the Resolution for the Capital
Exceedance Project Enterprise Service Bus to the full Board for consideration.
Action: Motion Carried.
Internal Audit Open Management Response Quarterly Report
Chief Financial Officer Heather Shawa presented management's responses to audits as follows:
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Internal Audit Status Report
Internal Auditor Phil Perkins presented the following status report:
u ^N Overview
• FY 2018 Audit Plan Progress Report
Internal Audit Status Report • Status of External Peer Review Open
Recommendations
Presented by: Other Items
Phil Perkins,Director of Internal Audit
Finance Committee Meeting
November 2017
4
FY 2018 Audit Plan Progress Report FY 2018 Audit Plan Progress Report(2)
�l!St44x.��;(),I�.G9D.161.4t@C'. BS.1�!.If+3��fli!S4_m.€9.t3:
1, Water Production Gatti Reporting Audit(FYI$) 1. Cash Recapts Audit
2. Time R"Mng R--e I 2. Customer Paymem Manpernen(YThad Patty Pay"nta Audit
3 Surpnse Cash Coura at 3. Contract Authonzali-8 APProral Process Audit
4. Paynw Atanogement Aude{FY 17 carryover) 4. Phywcal Attest Management Add
5. Tmk ReponM Reolex u2
Eg$agr:ment;it P(Ogres;' d. Surprise Cash Co..t*2
1, Identity and Aces;Management Aufat(!•l'17-•slinunted fit".4 7. Consuding-Various
completes
2. FoSa-up H.ng Pr—i Audit iFY 17-estimated W%corrOtte)
3. Succession Planning Audit(FY 18-25%=r0etel
1 L
3 .
FY 2018 Audit Plan External 5-Year Independent Review
►lannad Audits: Estimated Progr.,s to Data • Status of Open Recommendations:
Hours The CEO Hotline should be an auditable area. Internal Audit
Cash R..NPt. 4(4 i-j..2018
1TH.IpNmu Duk u,n,a.r,wnt 3W Pre-Wo<50-4 orYK response: Concur.Internal Audit will work with management to gain
;utcnUon PlenNnp 3W MMW.. access to hotline complaints that involve potentially fraudulent or
cure ern .ntA,ng.n»N. xd setp01,201e otherwise illegal or unethical behavior,with the objective being to
Gonlract AuthorkNlaNApyonl Procne 300 sVNA 201e address control or procedural improvements to prevent similar
paykat Ac<...s.<ar�n uaaaa.m.nt 3W st•d IAn2a1n Incidents In the future. Estimate completion of a working approach
W—ProduWen D,u R.po,iiv 3M C0.44.Wd by July 31,2017.
D[n.r Engag•m•nes: Action: A working approach was agreed upon prior to July 31,2017.
saP'n•.CosA aMI•(xt w 1 cvuNtwnAaaa It was agreed that when IA performs the annual risk assessment
Tnnu Rrrteg Rw•cxc(I) 1ai 1r.nsacaroletca and audit planning,general information about the hotline activity
cPmamng-VaWrs „< cam- over the past year should be provided,including any potential fraud
cases and resolution.Internal Audit may request general or detailed
ravel evatwnd lr.,. 7,«pp hotline Information at any time.
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External 5-Year Independent Review External 5-Year Independent Review
• Status of Open Recommendations(conl'd):
• Audit planning should include consulting during System • Status of Open Recommendations(cont'd):
.Qgvglopnlgn --CySigior major system development and Risk assessment discussions between the Internal Auditor and the
acquisition.Internal Audit Response:Concur, Internal Audit is Finance Committee should be documented so that the approval of
working with management to provide both informal and formal the annual audit plan and accompanying resources reflect the
advice and consulting on current B1h4 major projects such as the results of such discussions. Internal Audit Response:Concur. The
ARMS,AMI,new plant construction,and replacement Cl system,as Internal Auditor will include in his recommended audit plan why the
well as any future such projects. number and type of audits and resources needed are optimal based
• Action:The Internal Auditor is now invited to monthly project status on assessed risks,and this will be documented in Finance
meetings on major system developments and the CFO is requesting Committee meeting minutes accordingly.
Internal Audit consulting support as-needed for the major and other Action: In the July 2017 Finance Committee meeting,the Internal
system development projects. Auditor provided explanations based on risk assessment for the
number and types of audits recommended in the proposed FY 2018
audit plan,along with presentation of estimated resources needed to
erform the plan.This approach will continue going forward,
Other Items
Internal Auditor Continuing Professional Education]
Certification Status:
• Completed all CPE requirements for CPA,CIA and CiSA
designations this year to maintain current
certificationrllcensing status,
• CPE includes a 24-hour course on SAP Security and Audit
which will be valuable in future audit planning and
performance.
Other
None
Adjourn
Commissioner Ross adjourned the meeting at 6:16 p.m.
Respectfully submitted
Ken Ross, Chair
5
Finance Committee
Commissioner Price presented the following Trustee Meeting Report that was held prior to this Board
Meeting:
SUMMARY REPORT
LANSING BOARD OF WATER & LIGHT
PENSION FUND TRUSTEES ANNUAL MEETING
November 14, 2017
The Pension Fund Trustees of the Lansing Board of Water & Light (BWL) met at the BWL Headquarters — REO
Town Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:00 p.m. on Tuesday, November 14, 2017.
Chairperson David Price called the meeting to order at 5:09 p.m. and asked the Corporate Secretary to call the
roll.
Present: Trustees David Price, Beth Graham, Dennis M. Louney (arrived @5:18 p.m.),Tony Mullen,Tracy
Thomas, and Sandra Zerkle.
Absent: Trustees Anthony McCloud and Ken Ross
The Corporate Secretary declared a quorum.
Public Comments
There were no public comments.
Approval of Minutes
Motion by Trustee Thomas and Seconded by Trustee Mullen to approve the Minutes from the November 15,
2016 Pension Fund Trustees' Annual Meeting.
Action: Motion Carried
FY 2017 Financial Information
FY 2017 Financial Information Relative to DB,VEBA, and DC Plan,and Proposed Resolutions
General Manager Peffley introduced Chief Financial Officer Heather Shawa to provide an overview of Board of
Water & Light's (BWL) Pension Plans and the Resolutions that were being considered for approval or
acceptance.
Ms. Shawa stated that the resolutions in the packet were previously vetted through the appropriate
committee meetings and approved by the full board. The trustees are being asked to acknowledge through
resolution the investment policy statements for the DB and VEBA Plans and for acceptance of the Trust
Agreements for both of these plans.
Ms. Shawa introduced Nathan Burke, VP, Senior Consultant at Asset Consulting Group who provided
information on the DB and VEBA Plans. Ms. Shawa also introduced Lisa Burks-Wilson and Sandra Rouse-
Thames from ICMA who are financial advisors for the Defined Contribution Plan.
Mr. Burke reviewed the Defined Benefit (DB) and VEBA Plan for the period ending June 30, 2017 and gave a
global economic update. Mr. Burke stated that the returns are reflective of solid corporate growth and
highlighted asset allocation.
6
Ms. Shawa reviewed the performances of the Defined Benefit Plan, the Retirement Pension Plan and the
Defined Contribution Plan for FY 2017. Ms. Shaw noted that the enterprise statements, which include the
pension plan statements, all received a clean audit report in September 2017.
Defined Benefit Plan
Ms. Shawa stated that Defined Benefit (DB) Plan currently has 382 participants of which 8 are active. As of the
valuation date of June 30, 2017, the Plan had $65.9 million in plan assets and $56.9 million in plan liabilities.
The BWL was over-funded by $9 million. This results in a Funded Ratio of just under 116%- up approximately
9% from the prior year. For FY 2017, the BWL had $8 million in net investment income, which equates to an
13.75% return. Ms. Shawa stated that these results were due to some changes in investment policy
statements and to the market. In comparison in FY 2016 BWL had a 0.5% return. For FY 2017 administrative
fees were$339,000 and this is 0.51%of plan assets.
RESOLUTION 2017-11-01'
Revised Lansing Board of Water and Light Defined Benefit Plan
for Employees' Pensions Statement of Investment Policies, Procedures,and Objectives
WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the Lansing Board of Water and Light
Defined Benefit Plan for Employees' Pensions (the "Defined Benefit Plan"); and
WHEREAS, the Retirement Plan Committee has reviewed the current Lansing Board of Water & Light Defined
Benefit Plan for Employees' Pensions Statement of Investment Policies, Procedures and Objectives in
conjunction with a transition to a new benefit plan investment consultant; and
WHEREAS, the Retirement Plan Committee recommended the Sponsor adopt the revisions reflected in the
attached Lansing Board of Water& Light Defined Benefit Plan for Employees' Pensions Statement of
Investment Policies, Procedures and Objectives; and
WHEREAS, the Sponsor adopted the attached, revised Defined Benefit Plan for Employees' Pensions
Statement of Investment Policies, Procedures and Objectives;
THEREFORE, it is:
RESOLVED,that the Trustees acknowledge the attached, revised Defined Benefit Plan for Employees' Pensions
Statement of Investment Policies, Procedures and Objectives.
RESOLUTION 2017-11-02
Amendment and Restatement of Trust Agreement for the Lansing Board of Water and Light
Defined Benefit Plan for Employees' Pensions
WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the Lansing Board of Water and Light
Defined Benefit Plan for Employees' Pensions (the "Defined Benefit Plan"); and
WHEREAS, the cost of Defined Benefit Plan benefits is funded through the Trust Agreement for the Lansing
Board of Water and Light Defined Benefit for Employee's Pensions (the "Pension Trust Agreement"); and
7
WHEREAS, to reflect current governance procedures and for other purposes, the Sponsor adopted and
approved the attached amendment and restatement of the Trust Agreement for the Lansing Board of Water
and Light Defined Benefit Plan for Employees' Pensions.
THEREFORE, it is:
RESOLVED,that the Trustees accept the terms and conditions of the attached Amendment and Restatement of
the Trust Agreement for the Lansing Board of Water and Light Defined Benefit Plan for Employees' Pensions,
both individually and collectively.
Motion by Trustee Zerkle, Seconded by Trustee Mullen,to acknowledge the Revised Defined Benefit Plan for
Employees' Pensions Statement of Investment Policies, Procedures and Objectives Resolution, and to accept
the Amendment and Restatement of the Trust Agreement for the Defined Benefit Plan Resolution.
Action: Motion Carried
Retirement Pension Plan—VEBA
Ms. Shawa stated that the VEBA Trust as of the actuarial valuation date of June 30, 2017 has 1,448
participants of which 727 are active. The VEBA plan had $174 million in plan assets and $206 million in plan
liabilities. The BWL was 84.4% funded which is up 13.7% from the prior year. For FY 2017, the BWL had $17
million in net investment income, equaling a 11.65% return. For the prior FY, the BWL had a 0.6% return. The
administrative fees were $766,000 which is 0.44%of total plan assets.
Ms. Shawa noted that Nyhardt, BWL's actuarial consultant, was asked to perform a projection and currently
the BWL's VEBA Plan is projected to be fully funded by June 30, 2023. Ms. Shawa also noted that an
experience study was performed and three recommendations were given and implemented. An increase of
2.3% in liability resulted from the implementation.
RESOLUTION 2017-11-03
Revised Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of
Water and Light Statement of Investment Policies. Procedures, and Objectives
WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the VEBA (Post-Retirement
Benefit Plan for Eligible Employees of Lansing Board of Water and Light); and
WHEREAS, the Retirement Plan Committee has reviewed the current VEBA Statement of Investment Policies,
Procedures and Objectives, in conjunction with a transition to a new benefit plan investment consultant; and
WHEREAS, the Retirement Plan Committee recommended the Sponsor adopt the revisions reflected in the
attached VEBA Statement of Investment Policies, Procedures and Objectives; and
WHEREAS, the Sponsor adopted the attached, revised VEBA Statement of Investment Policies, Procedures and
Objectives;
THEREFORE, it is:
RESOLVED, that the Trustees acknowledge the attached, revised VEBA Statement of
Investment Policies, Procedures and Objectives.
8
RESOLUTION 2017-11-04
Amendment and Restatement of Trust Agreement for the Post-Retirement Benefit Plan
for Eligible Employees of the Lansing Board of Water and Light
WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the Post-Retirement Benefit
Plan for Eligible Employees of the Lansing Board of Water and Light (the "VEBA"); and
WHEREAS, the cost of VEBA benefits is funded partially through the Trust Agreement for the Post-Retirement
Benefit Plan for Eligible Employees of the Lansing Board of Water and Light (the "VEBA Trust"); and
WHEREAS, to reflect current governance procedures and for other purposes, the Sponsor adopted and
approved the attached amendment and restatement of the Trust Agreement for the Post-Retirement Benefit
Plan for Eligible Employees of Lansing Board of Water and Light.
THEREFORE, it is:
RESOLVED, that the Trustees accept the terms and conditions of the attached Amendment and Restatement of
the Trust Agreement for the Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of Water
and Light, both individually and collectively.
Motion by Trustee Thomas, Seconded by Trustee Graham, to acknowledge the Revised VEBA Statement of
Investment Policies, Procedures, and Objectives, and to accept the Amendment and Restatement of the VEBA
Trust Agreement.
Action: Motion Carried
Commissioner Price commended Ms. Shawa on the financial dashboard provided as the information is readily
accessible.
Defined Contribution (DC) Plan
Ms. Shawa gave a brief explanation of the Defined Contribution Plan. The plan consists of a 401 and a 457
component. The 401 plan is an employer contribution plan to which contributions begin after six-months of
employment. The 457 plan is an employee contribution plan with an employer match. At the first pay of
every year, BWL contributes $1,000 to the employee 457 plan and employee contributions are matched up to
$1,500. Employees are responsible for making their own investment decisions in the plan. ICMA retirement
plan specialists were on site 39 days in FY 2017 and met with participants and an ICMA certified financial
planner was on site for 12 days during FY 2017. Two onsite seminars were held at which about 50 participants
attended and additional educational opportunities will occur. For FY 2017 the DC Plan had total expenses of
$1.1 million which is 0.6%of plan assets. The BWL contributed $6.1 million to the plan.
Commissioner Jester asked if any evaluations had been performed regarding the fees related to the DC Plan
for which entities have to be more transparent in respect to ICMA and other alternatives. Ms. Shawa
responded that evaluations have been done for marketing and best practice, and also for advisory and
administration, and ICMA was retained. In the next 30 days the next RFP will be sent out for advisory services.
Supplemental Information
Ms. Shawa asked the Board for acceptance of the 2017 Audited Financial Statements which combined three
separate policies and had been previously approved at the March 28, 2017 Board Meeting.
9
RESOLUTION 2017-11-05
Acceptance of 2017 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.
Motion by Trustee Zerkle, Seconded by Trustee Thomas,to accept the 2017 Audited Financial Statements for
Defined Benefit Pension Plan, Defined Contribution Pension Plan, and Retiree Benefit Plan (VEBA).
Action: Motion Carried
RESOLUTION 2017-11-06
Travel & Reimbursement Policy—Board of Commissioners, Board Appointees,
Employees, and Investment Fiduciaries
WHEREAS, the attached Travel & Reimbursement Policy for the Board of Commissioners, Board Appointees,
Employees and Investment Fiduciaries (formerly known as Retirement System Representatives) will replace
the existing Policies and Resolutions listed below:
1) Policy 0004—Travel Expense (Board Appointees)
2) Policy 0007—Travel Expense for Commissioners Only
3) Policy 0056—Travel & Reimbursement—Employees
4) Resolution#2007-05-14—Amendment to Travel Policy for the Board of Commissioners
5) Resolution#2014-11-02—Retirement System Education &Travel Policy
WHEREAS,the Board of Commissioners adopted the attached, combined and updated Travel &
Reimbursement Policy as presented;
THEREFORE, it is:
RESOLVED, that the Trustees acknowledge the attached, combined and updated Travel & Reimbursement
Policy.
Staff Comments:The purpose of this Resolution is to consolidate the existing policies and resolutions listed
above into 1 policy and apply uniform requirements throughout. The following significant changes were made:
Board of Commissioners
• Policy covers 4 Year Term Commissioners
• Advance Approval by the Board Chair
• Reimbursement Approval by the Board Chair
• Policy may be overridden by Board Chair when emergency or special circumstance arises
Board Appointees
• Advance Approval by the Board Chair
10
• Reimbursement Approval by the Board Chair
• Eliminated the $50/day per diem rate
• Meal Reimbursement will be at actual cost with a 20%gratuity cap
• Policy may be overridden by Board Chair when emergency or special circumstance arises
Employees
• Meal reimbursement increased (from $50)to$70 per day with a 20%gratuity cap
• Miscellaneous Expense increased (from $25)to$50 per day
Investment Fiduciaries
• Advance Approval by the Board Chair
• Reimbursement Approval by the Board Chair
• Eliminate $500 per day cash travel advance
• Policy may be overridden by Board Chair when emergency or special circumstance arises
Motion by Trustee Thomas, Seconded by Trustee Mullen, to accept the Travel & Reimbursement Policy for
Board of Commissioners, Board Appointees, Employees and Investment Fiduciaries.
Action: Motion Carried
Excused Absences
Motion by Trustee Graham, Seconded by Trustee Mullen,to excuse Trustees Anthony McCloud and Ken Ross
from tonight's meeting.
Action: Motion Carried
Adjourn
There being no further business, the Pension Fund Trustees meeting adjourned at 5:37 p.m.
MANAGER'S RECOMMENDATIONS
General Manager Peffley recommended that the Board approve the Capital Project Budget Exceedance
Approval for Project PE-20196 Canal Substation Distribution and Project PG-40044 Enterprise Service Bus
before the Board that evening.
RESOLUTION 2017-11-07
Capital Project Budget Exceedance Approval:
Project PE-20196 Canal Substation Distribution
WHEREAS, Lansing Board of Water & Light's (BWL) Policy 15-02, entitled Capital Project Exceedance Approval
necessitates BWL Board of Commission approval for specific capital projects that are expected to exceed their
previously approved budget by both 15%and $200,000 prior to completion of the project; and
WHEREAS, the previously approved budget for Capital Project PE-20196 Canal Substation Distribution was
$443,000; and
WHEREAS, the projected final total cost for Capital Project PE-20196 Canal Substation Distribution is$943,000,
should the project be completed; and
11
WHEREAS, BWL staff and management reviewed the project cost in detail, which includes but is not limited to
the rationale and circumstances for the increased budget projection; and
WHEREAS, BWL staff and management recommends that the Capital Project PE-20196 Canal Substation
Distribution be completed despite the projected increased cost; and
WHEREAS, BWL staff and management recommends that the BWL Board of Commissioners approved the
Capital Project PE-20196 Canal Substation Distribution to be completed as projected.
RESOLVED, the BWL Board of Commissioners approve completion of Capital Project PE- 20196 Canal
Substation Distribution with a projected final total cost of$943,000.
Motion by Commissioner Mullen, Seconded by Commissioner Grahams, to approve the Capital Project Budget
Exceedance Project PE-20196 Canal Substation Distribution Resolution.
Action: Motion Carried.
RESOLUTION 2017-11-08
Capital Project Budget Exceedance Approval:
Project PG-40044 Enterprise Service Bus
WHEREAS, Lansing Board of Water & Light's (BWL) Policy 1S-02, entitled Capital Project Exceedance Approval
necessitates BWL Board of Commission approval for specific capital projects that are expected to exceed their
previously approved budget by both 15%and $200,000 prior to completion of the project; and
WHEREAS, the previously approved budget for Capital Project PG-40044 Enterprise Service Bus was
$1,055,000; and
WHEREAS, the projected final total cost for Capital Project PG-40044 Enterprise Service Bus is$1,681,000,
should the project be completed; and
WHEREAS, BWL staff and management reviewed the project cost in detail, which includes but is not limited to
the rationale and circumstances for the increased budget projection; and
WHEREAS, BWL staff and management recommends that the Capital Project PG-40044 Enterprise Service Bus
be completed despite the projected increased cost; and
WHEREAS, BWL staff and management recommends that the BWL Board of Commissioners approved the
Capital Project PG-40044 Enterprise Service Bus to be completed as projected.
RESOLVED, the BWL Board of Commissioners approve completion of Capital Project PG-40044 Enterprise
Service Bus with a projected final total cost of$1,681,000.
Motion by Commissioner Thomas, Seconded by Commissioner Mullen, to approve the Capital Project Budget
Exceedance Project PG-40044 Enterprise Service Bus Resolution.
Action: Motion Carried.
UNFINISHED BUSINESS
12
There was no Unfinished Business.
NEW BUSINESS
There was no New Business.
RESOLUTIONS/ACTION ITEMS
RESOLUTION 2017-11-09
Appointment of Chair as Signatory for Trustee Designations
RESOLVED,That the Board of Commissioners hereby appoints the following individual as signatory for
appointments and/or removal of Co-Trustees.
David Price, Chairman of the Board
FURTHER RESOLVED,That the Chair of the Board of Commissioners is authorized to execute any and all
contractual documents which reflect appointment or removal of an individual Co-Trustee.
Motion by Commissioner Thomas, Seconded by Commissioner Graham, to approve the Appointment of Chair
as Signatory for Trustees Designations.
Discussion: Commissioner Long asked for clarification of the responsibility of the Chair as a signatory for
appointments and/or removal of Co-Trustees. Legal Counsel, Brandie Ekren, responded that the Trust
Agreement states that the voting Board members are appointed as Trustees and the Board meets and decides
on appointments and/or removals. However, the Trust Agreement doesn't state the authority for the signing
of documents or carrying out decisions.
Action:There being no further discussion the Motion Carried.
MANAGER'S REMARKS
General Manager Peffley informed of the following:
BWL's Public Affairs group, under Steve Serkaian, received two national awards at the APPA conference in San
Francisco, CA. The first award was received for the Lansing Energy Tomorrow TV spots that were run last year
and which will be run again this year. The second award was received for the printed material designs that are
produced for community programs.
The East Lansing mayor's office lauded BWL for the fast response to the recent power outage at the end of the
Michigan State game. Traffic lights and district power were restored quickly so that there were no problems.
Critical negotiations are being held with a large customer on the west side of BWL's service territory. BWL's
nearest competitor is also interested. BWL should have the results within a month as this customer would like
to break ground quickly.
BWL is a presenting sponsor for Silver Bells in the City which is being held November 17,2017. BWL is hoping
to have 100,000 attend this year.
Commissioner Louney expressed appreciation for the expedience of staff on restoring the power that went
out on the east side of town last Friday. The power was brought back within an hour.
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COMMISSIONERS' REMARKS
Commissioner Thomas thanked the finance team for the dashboard and its ready visibility.
Commissioner Jester extended his greetings to the Board and thanked the Corporate Secretary, Denise Griffin,
for the extremely efficient onboarding process.
Commissioner Taylor congratulated the Board regarding the Pension and VEBA Plans.
Commissioner Price informed that he plays drums in a bagpipe band and the band will be playing in City Hall
from 7:15 p.m.to 8:00 p.m. during the Silver Bells event and he invited people to stop by.
Commissioner Price reminded the Board about the upcoming Public Rate Hearing on Thursday, November 30,
2017 at 5:30 p.m. and the Special Board Meeting to consider the rate increases on Tuesday, December 5, 2017
at 5:00 p.m.
MOTION OF EXCUSED ABSENCE
Motion by Commissioner Thomas, Seconded by Commissioner Mullen,to excuse Commissioners Anthony
McCloud and Ken Ross from this meeting.
Action: Motion Carried.
PUBLIC COMMENTS
None.
ADJOURNMENT
Chair Price adjourned the meeting at 6:11 p.m.
M.Denise Griffin,Corporate Secretary
Preliminary Minutes filed(electronically)with Lansing City Clerk: 12-12-17
Official Minutes filed(electronically)with Lansing City Clerk:1-29-18
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Hometown People.Hometown Power.
PUBLIC NOTICE/AGENDA
LANSING BOARD OF WATER AND LIGHT BOARD OF COMMISSIONERS
FINANCE COMMITTEE MEETING
January 10, 2017—5:30 P.M.
BWL REO Town Depot
1201 S. Washington Ave.
Lansing, MI 48910
Call to Order
Roll Call
Public Comments on Agenda Items
1. Finance Committee Meeting Minutes of November 8, 2016
2. November YTD Financial Summary
3. Update on Management Responses to Internal Audits
4. Internal Audit Status Report
5. Travel Policy Review
a. Board of Commissioners Policy
b. Board Appointees Policy
c. BWL Employees Policy
d. Retirement System Education and Travel Policy Resolution
Other
Adjourn
-----------------------
Posted:1-6-17
M.Denise Griffin
Corporate Secretary
(517)702-6033
Electronic Distribution:
Commissioners City Clerk's Office
Executive Staff&Security City Council Office
Lobby/Depot Mayor's Office
Outside Agenda Recipients
H-W-People P-1
Board of Water and Light Board of Commissioners
2017 REGULAR BOARD MEETING SCHEDULE
PUBLIC NOTICE
In accordance with the Lansing Board of Water & Light'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 Lansing Board of Water & Light's
Board of Commissioners are hereby set for calendar year 2017 as follows,
unless otherwise notified or as a result of date conflicts with rescheduled
City Council meetings:
2017
Lansing Board of Water & Light Board of Commissioners
Regular Board Meeting Schedule
Tuesday January 24
Tuesday March 28
Tuesday May 23
Tuesday July 25
Tuesday September 26
Tuesday November 14 or 21
Meetings will be held in the Lansing Board of Water & Light Headquarters,
REO Town Depot Facility located at 1201 S. Washington Ave., Lansing, MI at
5:30 p.m.
In the event a special meeting or rescheduled meeting is held, a notice will
be posted at the Board of Water and Light Headquarters, 1201 S.
Washington Ave., Lansing, Michigan, 48910, at least 18 hours prior to the
time of the meeting.
THIS NOTICE IS 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
Hometown People.Hometown Power:
MINUTES OF THE BOARD OF COMMISSIONERS MEETING
LANSING BOARD OF WATER AND LIGHT
July 25, 2017
The Board of Commissioners met at the Lansing Board of Water and Light(BWL) Headquarters-REO Town Depot
located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Tuesday,July 25, 2017.
Chairperson David Price called the meeting to order at 5:30 p.m.
Present: Commissioners Beth Graham, Tony Mullen, David Price, Ken Ross, Tracy Thomas, and Sandra Zerkle.
Non-Voting Commissioners present: Bill Long(Delta Township) and Rod Taylor (DeWitt Township).
Absent: Commissioners Dennis Louney,Anthony McCloud, and Bob Nelson
The Corporate Secretary declared a quorum.
Chairperson David Price introduced and welcomed BWL's newest Commissioner, Mr. Rod Taylor representing
DeWitt Township.
Commissioner Taylor led the Pledge of Allegiance.
ELECTION OF OFFICERS FY 2017-2018
As Commissioner McCloud was absent, Corporate Secretary Denise Griffin presented the June 29, 2017
Nominating Committee Report,from which the proposed slate of officers for Fiscal Year 2017-2018 is as such:
Commissioner David Price serving as Chairperson; and Commissioner Sandra Zerkle serving as Vice
Chairperson. Commissioner Zerkle requested withdrawal from the nomination as Vice Chairperson.
Commissioner Sandra Zerkle withdrew her name from the slate of officers for the consideration of the Vice
Chairperson position.
Motion by Commissioner Mullen, Seconded by Commissioner Ross to nominate Commissioner David Price to
serve as the Chairperson of the Nominating Committee.
Action: Carried Unanimously
Motion by Commissioner Ross, Seconded by Commissioner Thomas to nominate Commissioner Mullen to
serve as the Vice Chairperson of the Nominating Committee.
Action: Carried Unanimously
Chair Price thanked everyone for their support and is looking forward to working with the Vice Chair Mullen
and the members of the Board in FY 2017-2018.
1
APPROVAL OF MINUTES
Motion by Commissioner Thomas, Seconded by Commissioner Graham,to approve the Regular Board Meeting
minutes of May 23, 2017.
Action: Motion Carried
PUBLIC COMMENTS
None.
COMMUNICATIONS
Electronic Mail received From or Re:
a. Daniel J. Dekker regarding Tree Trimming Services-Referred to Management. Received and Placed on File
b. Daniel J. Dekker regarding Damage to his Property-Referred to Management. Received and Placed on File
COMMITTEE REPORTS
NOMINATING COMMITTEE MINUTES
June 29, 2017
The Nominating Committee of the Lansing Board of Water and Light met at the BWL Headquarters-REO Town
Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:15 p.m. on Thursday,June 29, 2016.
Nominating Committee Chair,Anthony McCloud,called the meeting to order and asked the Corporate Secretary
to call the roll. The following committee members were present: Commissioners Anthony McCloud, Dennis
Louney, Ken Ross and Tracy Thomas.
Absent: None
Public Comments
There were no public comments.
Approval of Minutes
Motion by Commissioner Ross, Seconded by Commissioner Louney to approve the Nominating Committee
meeting minutes of June 21, 2016.
Action: Motion Carried
Officer& Committee Survey Results & Officer&Committee Survey Memorandum
Nominating Committee Chair Anthony McCloud stated that the Officer Committee Survey Results Forms and
Committee Survey Memorandum were included in the Nominating Committee meeting packet for review and
asked if there were any questions regarding the documents. There were no questions.
Nomination of Board Officer Candidates for Fiscal Year 2017-2018
Chairperson
Nominating Committee Chair McCloud opened the floor for the Officer position of Chairperson. The following
motion was offered:
2
Motion by Commissioner Ross, Seconded by Commissioner Thomas to nominate Commissioner David Price to
serve as the Chairperson for the 2017-2018 fiscal year.
Action: Motion Carried (3/1 Louney dissenting)
Vice Chairperson
Nominating Committee Chair McCloud opened the floor for the Officer position of Vice Chairperson
Nominations and the following motion was offered:
Motion by Commissioner Thomas,Seconded by Commissioner Louney to nominate Commissioner Sandra Zerkle
to serve in the Officer position of Vice Chairperson.
Action: Motion Carried (3/1 Ross dissenting)
Motion by Commissioner Ross, Seconded by Commissioner Thomas to present the slate of Officers for 2017-
2018 to the full Board for consideration is as follows:
Chair: David Price
Vice Chair: Sandra Zerkle
Action: Carried Unanimously
Nominating Committee Chair McCloud stated that the recommended slate will be presented to the full Board
for consideration and nominations will be taken from the floor at the July 25th Regular Board/Annual
Organizational meeting.
Excused Absence
None
There being no further business,the meeting adjourned at 5:19 p.m.
Respectfully submitted,
Anthony McCloud, Chair
Nominating Committee
HUMAN RESOURCES COMMITTEE
Meeting Minutes
June 29, 2017
The Human Resources Committee of the Lansing Board of Water and Light(BWL) met at the BWL Headquarters-
REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Thursday,June 29, 2017.
Human Resources (HR) Committee Chairperson Sandra Zerkle called the meeting to order and asked the
Corporate Secretary to call the roll. The following members were present: Commissioners Sandra Zerkle,
Anthony McCloud,Tony Mullen, and Tracy Thomas. Also present:Commissioners Dennis M. Louney,David Price
and Ken Ross.
3
Absent: None
Ms. Griffin notified the committee that Internal Auditor, Phil Perkins, is on vacation.
Public Comments
None
Approval of Minutes
Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to approve the Human Resources
Committee meeting minutes of May 23, 2017.
Action: Motion Carried.
FY 2018 Board Appointee Performance Reviews
Chair Zerkle passed out the employees' survey results, the employees' self-evaluation results, a copy of
comments, and a copy of each employee's goals and accomplishments for the year. Chair Zerkle proposed that
these items be given to Human Resources Director, Michael Flowers, and placed into the personnel files of each
of the three employees. Chair Zerkle also informed the Committee that Commissioner Graham and
Commissioner Goodrich did not participate in the evaluation process.
Commissioner Thomas stated that new Commissioners should be informed immediately of their charge to
evaluate the Board of Commissioners'three appointed employees.
Commissioner Ross questioned if the appointees had access to the individual evaluation scores to provide more
detailed insight to individual questions.After a discussion regarding the essentials of providing a compilation of
aggregate numbers to allow appointees to focus on strength and weakness, HR Chair Zerkle stated the she
would provide the Commissioner's with the individual numbers.
Corporate Secretary
Corporate Secretary M. Denise Griffin requested a closed session for the purpose of receiving her contractual
year-end performance evaluation as permitted by the Open Meetings Act exemption MCL 15.268(a).
Motion by Commissioner Mullen, Seconded by Commissioner McCloud, to enter into closed session to discuss
the contractual year-end performance evaluation of Corporate Secretary M. Denise Griffin.
Roll Call Vote:
Yeas: Commissioners Sandra Zerkle, Anthony McCloud,Tony Mullen,Tracy Thomas.
Nays: None.
Action: Motion Carried.
The Human Resources Committee went into closed session at 5:45 p.m.
The Human Resources Committee reconvened to open session at 6:04 p.m.
Internal Auditor
Internal Auditor, Phil Perkins, was absent from the meeting.
The Committee chose to discuss the contractual year-end performance evaluation of Internal Auditor, Phil
Perkins, at a later date, if requested.
4
Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to forward a resolution reappointing
Phil Perkins to the Charter position of Internal Auditor for FY18 to the full Board for consideration.
Action: Motion Carried.
General Manager
General Manager Richard Peffley requested a closed session for the purpose of receiving his contractual year-
end performance evaluation as permitted by the Open Meetings Act exemption MCL 15.268(a).
Motion by Commissioner Mullen, Seconded by Commissioner Thomas, to enter into closed session to discuss
the contractual year-end performance evaluation of General Manager, Richard Peffley.
Roll Call Vote:
Yeas: Commissioners Sandra Zerkle, Anthony McCloud, Tony Mullen, Tracy Thomas.
Nays: None.
Action: Motion Carried.
The Human Resources Committee went into closed session at 6:06 p.m.
The Human Resources Committee reconvened to open session at 6:36 p.m.
Upon conclusion of the Closed Sessions, the following motions were offered:
Motion by Commissioner Mullen, Seconded by Commissioner Thomas, to forward a resolution reappointing
Richard (Dick) Peffley to the Charter position of General Manager for FY18 to the full Board for consideration.
Action: Motion Carried.
HR Chair Zerkle stated that the reappointment resolutions will be taken under consideration at the July regular
Board meeting.
Subsequent Steps for Board Appointed Employees Contracts
The Board Chair, David Price,will work with the appointed employees,on behalf of the Board of Commissioners,
on their respective contracts and annual merit considerations.
Excused Absence
None
Other
HR Chair Zerkle said that she recommends changes in the evaluation process to help simplify it.
Public Comments
None
Adiourn
Motion by Commissioner McCloud, Seconded by Commissioner Thomas, to adjourn the meeting.
Action: Motion Carried
5
Meeting adjourned at 6:40 p.m.
Respectfully Submitted,
Sandra Zerkle, Chair
Human Resources Committee
COMMITTEE OF THE WHOLE
Meeting Minutes
July 11, 2017
The Committee of the Whole of the Lansing Board of Water and Light(BWL) met at the BWL Headquarters-REO
Town Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Tuesday,July 11, 2017.
Committee of the Whole Chair Tony Mullen called the meeting to order and asked the Corporate Secretary to
call the roll.
Present: Commissioners Tony Mullen, Beth Graham, Dennis M. Louney, Anthony McCloud, David Price, Ken
Ross, Tracy Thomas, and Sandra Zerkle and Non-Voting Members: William Long (Delta Township) and Robert
Nelson (East Lansing).
Absent: None.
The Corporate Secretary declared a quorum.
Public Comments
None.
Governance Policy Resolution
Commissioner Mullen shared information regarding the tabled agenda item.
Motion by Commissioner Price, Seconded by Commissioner Graham to take the Governance Policy Resolution
and the edited draft Governance Policy from the table.
Discussion: None.
Action: Motion Carried.
Motion by Commissioner Louney to amend item 5), now item 6),to add the sentence This policy is not intended
to prevent a commissioner from fulfilling their appointed duties in representing the rate payers of the Lansing
Board of Water and Light. Motion,was not supported.
After some discussion, it was determined that the additional sentence did not add to or take away from the
policy and was unnecessary to amend.
Motion withdrawn.
6
Motion by Commissioner Price, Seconded by Commissioner McCloud to accept the Governance Policy
Resolution with the proposed edits and forward to the Board for consideration.
Discussion: Discussion transpired regarding edits for the following sections:
• Edit Section 1) d by removing the General Manager wording after"monitor organizational performance"
as there are other sources from which communication is received.
• Section 2) a by removing "at all times," due to the broadness of the wording, and replacing it with "in
capacity as a board member;" and also, removing the second sentence as all issues that are in reference
to the Board of Water and Light require this loyalty and responsibility.
• Edit Section 2) b ii by adding "or other Designee" for times when the Chair is not available to speak; by
removing the third sentence as unnecessary or redundant.
• Edit Section 2) b iii and 2) b v by removing as unnecessary or redundant.
• Edit Section 4) a by removing the Board's only formal connections to the BWL wording as the Board is
formally connected to the BWL as the governing body.
• Edit policy by adding an additional section to provide for conducting Commissioner self-evaluations.
Action: Motion Carried.
Committee of the Whole Chair Tony Mullen recessed the meeting at 7:01 p.m. and reconvened the meeting at
7:12 pm.
Approval of Minutes
Motion by Commissioner McCloud, Seconded by Commissioner Thomas to approve the Committee of the
Whole meeting minutes of May 9, 2017.
Action: Motion Carried.
North American Electric Reliability Corporation (NERC) Update
General Manager, Dick Peffley, introduced Robert Lalonde, Manager of Bulk Power, who provided the
Commissioners with a North American Electric Reliability Corporation (NERC) update. Mr. Lalonde provided
historical information on the formation of NERC and how it led to mandatory compliance with developed
standards approved by the Federal Energy Regulatory Commission (FERC). He stated that NERC is an authority
assigned with ensuring the reliability of the bulk electric system.
Mr. Lalonde's presentation included information on the responsibilities developed for the Internal Compliance
Program to measure and maintain compliance to standards applicable to the Board of Water& Light, as well as
information on self-reporting standards, Critical Infrastructure Protection standards for the BWL and self-
reports.
Easement Grant Board of Water and Light to Consumers Energy Resolution
General Manager Peffley introduced General Counsel Brandie Ekren, who provided information on the grant
request for an easement to Consumers Energy Company to allow construction of gas lines and pipelines. The
said easement grant request will be effective upon Lansing City Council's approval. After a short discussion
regarding additional language to the resolution the following motion was offered:
7
Motion by Commissioner Ross, Seconded by Commissioner Zerkle to forward the two proposed resolutions
with the additional wording of"Please see the attached documents"to identify the properties for the
easement grants to the full Board for consideration.
Action: Motion Carried.
Rules and Regulations FY 2018
General Manager, Dick Peffley, introduced Ray Moore, Manager of Customer Projects, who reviewed the 2018
Fiscal Year Rules and Regulations. Ray Moore also stated that, under the current electric vehicle program, the
BWL will pay$1,000 toward the installation of a Level II electric car charging station if you are an AP owner and
the BWL has installed 22 charging stations.
RULES AND REGULATIONS UPDATE
For Fiscal Year 2018
Electric,Water. Steam and Chilled Water
• Revision of Rule 2, General Provisions
o 2.1.E-Added language to clarify that ownership does not pass to Customer for paying a deposit
or contribution and the deposit is not refundable unless stated in these Rules.
o 2.1.F-Added language to provide notice that multiple reconnect fees may be charged when
multiple services require reconnection.
• Revision of Rule 3.1.6, Characteristics of Service, Character of Service
o Added language to clarify, based on the BWL's claims experience,the BWL is not liable for
damage caused by conditions beyond its control.
• Revision of Rule 4.1.A, Use of Service, General
o Language added to include a statement to prohibit actions by the customer that are dangerous
or disruptive to service.
• Revision of Rule 4.2.A, Use of Service,Access and Damages
o Added definition of maintenance.
o Added language to expressly include removal of anything, including trees, that may interfere
with maintenance of BWL facilities.
• Revision of Rule 4.2.C&D Use of Service,Access and Damages
o Added language to include a prohibition against intentional interference by a customer with
BWL access, and notice of the resulting fee and Customer responsibility for any losses or damage
associated with failure to provide access.
• Revision of Rule 4.3.A, Use of Service, Customer Equipment/Customer Piping and Equipment
o Added language to state the BWL may deny or terminate service to protect the public health
and welfare.
o Added language to expand upon and clarify that the BWL is not responsible for installing,
inspecting, repairing, maintaining, testing, or removing customer equipment.
• Revision of Rule 4.3.13, Use of Service, Customer Equipment/Customer Piping and Equipment
o Added language to account for damages to wiring or equipment caused by BWL planned or
emergency work and states that the BWL will repair customer wiring or equipment.
• Revision of Rule 4.5.B&C (Water, Steam, & CW)/4.6.B&C(Electric), Use of Service, Improper Use and
Tampering
8
o Revisions to impose responsibility upon non-Customers for improper use of or tampering with
service.
• Revision of Rule 4.6.13 (Water, Steam, CW) 4.7. B (Electric), Use of Service, Disconnection of Service
o Added language to encourage customers to be present at the time of service disconnections
while also recognizing being present may not always be possible and informs customers they may
be responsible for any consumption that takes place if the disconnection is ineffective.
• Revision of Rule 4.6.13.1.a (Water, Steam) 4.7.13.1.a (Electric), Use of Service, Disconnection of Service,
Customer Request
o Added language to account for non-owners, such as tenants, requesting disconnection of
service.
• Revision of Rule 4.6.6.3 (Water, Steam, CW) 4.7.13.3 (Electric), Use of Service, Disconnection of Service,
Other
o Added language to account for disconnection when the BWL no longer serves a territory or
customer choice is an alternative.
• Revision of Revision of Rule 7.1.D, Bills and Payments, Responsibility for Payment of Bills
o Added language to align with industry standard practice that requires a deposit from a new
customer if a delinquent customer account holder resides at the same service location as the new
customer.
• Revision of Rule 9.7.A (CW), 9.12.A (Steam)10.7.A(Electric), 10.12.A (Water), Distribution System
Extensions, Easements
o Added language to further clarify that maintenance includes, among other things,tree
trimming or removal, restoration, replacement, construction, and relocation.
• Revision of Rule 16/12, Schedule of Fees and Charges, Connect(turn-on/turn-off)Fee
o Changed language to reflect actual hours of operation of the BWL Customer Service
Department.
Electric
• Revision of Rule 3.3.A, Service Conditions, Dual Voltage Transformers
o Changed language to alleviate situations where existing 4160 volt customers who either own
the distribution transformers, or the electric rate requires them to provide the transformers and
where their financial responsibility of replacement is an impediment to the BWL expeditiously
completing the conversion to 13.2kV operation.
• Revision of Rule 10.14.A.1, Distribution System Extensions, General, Outdoor Protective Lighting
o Added language to clarify the existence of BWL facilities on utility grade poles and so customers
understand BWL OPL's are not allowed on customer owned poles.
• Revision of Rule 11.2.E Services, For Electric Service Upgrade
o Added language to inform customer to contact BWL utility Services for service upgrades and
that the customer is responsible for complying with BWL requirements.
• Revision of Rule 11.8.E Services, Multi-Dwelling Structure Services
o Added language to bring rule in line with current practice for installing secondary service
conductors.
• Revision of Rule 11.9.A Services, Conversion of Existing Overhead Electric Service
o Added language to clarify times the BWL must consider other projects and operational needs.
While it is possible to honor Customer's request, it may be a burden on the rate payers.
Water
• Revision of Rule 4.3.0 Use of Service, Customer Piping and Equipment
9
o Revision to state the Customer is responsible for the condition of their own building and core
holes because there are instances where we patched the core hole but it doesn't mean
maintenance is retained by the BWL.
• Revision of Rule 5.6.D Metering, Damaged Metering Equipment
o Revision to give examples of damage beyond the Customer's control.
Steam
• Revision of Rule 4.3.0 Use of Service, Customer Piping and Equipment
o Revision to state the Customer is responsible for the condition of their own building and core
holes because there are instances where we patched the core hole but it doesn't mean
maintenance is retained by the BWL.
• Revision of Rule 5.5.0 Metering, Damaged Metering Equipment
o Revision to give examples of damage beyond the Customer's control.
Chilled Water
• Revision of Rule 4.3.0 Use of Service, Customer Piping and Equipment
o Revision to state the Customer is responsible for the condition of their own building and core
holes because there are instances where we patched the core hole but it doesn't mean
maintenance is retained by the BWL.
Motion by Commissioner Ross, Seconded by Commissioner McCloud to present the resolution for the
acceptance of the proposed changes to the FY 2018 Rules and Regulations to full Board for consideration.
Action: Motion Carried.
Amendments and Restatements of Retirement Plans
After a discussion with General Manager Peffley and CFO Heather Shawa, Committee of the Whole Chair
Mullen pulled from the agenda item #6, Amendments and Restatements of Retirement Plans, due to time
constraints. (These items will be addressed at a later date.)
Public Comment
None.
Other
General Manager Peff ley provided the Committee with a copy of a letter that commended the BWL on tree
trimming services that were provided in East Lansing. This letter was submitted by the president of an East
Lansing Neighborhood Association.
Commissioners acknowledged the efforts for the "Under the Bridge" project that kicked off last week.
Adiourn
Motion by Commissioner Price, Seconded by Commissioner Thomas to adjourn the meeting.
Meeting adjourned at 8:15 p.m.
Respectfully Submitted
Tony Mullen, Chair
Committee of the Whole
FINANCE COMMITTEE
10
Meeting Minutes
July 11, 2017
The Finance Committee of the Board of Water and Light(BWL) met at the BWL Headquarters—REO Town Depot,
located at 1201 S. Washington Ave., Lansing, MI, at 8:20 p.m. on Tuesday,July 11, 2017.
Finance Committee Chair Ken Ross called the meeting to order and requested a roll call.
Present: Commissioners Ken Ross, Dennis M. Louney, Anthony McCloud, and David Price. Also present:
Commissioners Beth Graham, Tony Mullen, Tracy Thomas, and Sandra Zerkle, and Non-Voting Commissioners
William Long, and Robert Nelson.
Absent: None.
The Corporate Secretary declared a quorum.
Public Comments
None.
Approval of Minutes
Motion by Commissioner Price, Seconded by Commissioner McCloud, to approve the Finance Committee
meeting minutes of May 16, 2017.
Action: Motion Carried.
May YTD Financial Summary
Chief Financial Officer (CFO), Heather Shawa, presented the following:
<"altf lniomc Sfatcnurnl Y"7l) Ratios lanpinyce llaln
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.w.n.....w R - b F'f' • ..wr.
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ern,... .... w.:.....:.
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CFO Heather Shawa presented the May 2017 Year-to-date Financial Summary which indicated that the total
Cash is over$248M, Days cash on hand is$222M, and debt service coverage ratio is 2.19. The latter two are up
from last month. The Year-to-date income statement as of May YTD shows revenues to budget are up 3%,
comparative to this time last year at which they were up 5%. The projected fiscal-year-end net income is
approximately$15 million and is pending any year end audit adjustments. Ms.Shawa indicated that the capital
budget is predicting to be underspent but construction projects that were delayed are getting caught up now
that construction season started in June. BWL's adjusted net income return indicates the actual net rate of
return is ahead of budget and slightly under target.
11
Ms. Shawa also mentioned that three out of the five ratios are being met. Bad debt and uncollectible continue
to be watched. Commissioner Nelson commented that if BWL had opted into Act 95, the Michigan Energy
Assistance Program,the bad debt could be reduced as some customers have to choose between electricity and
putting food on the table. Commissioner Mullen asked whether BWL had an outside debt collector and after
what length of time the outside debt collector is contacted. Chair Ross requested CFO Shawa bring information
to the next meeting for the response to Commissioner Mullen's question.
Ms. Shawa also reviewed the employee data and the employee headcount compared to budget and benefit
cost. Although the data indicates being under budget, the temporary employee headcount is 41 and there are
recruiting efforts to fill about 27 vacancies.
Revised Investment Policy Statements/Resolution
Heather Shawa introduced Scott Taylor, Finance Manager, who presented two revised investment policy plans,
the Defined Benefit (DB) Plan which is the traditional pension plan, and the VEBA Plan which covers the
investments associated with providing health care benefits. Asset Consulting Group was retained last March as
the consultant for these plans. The consultants' feedback was that the statements were well constructed and
consistent with the plan objectives. Overall the changes in both plans are consistent and have similar strategies.
Refinement in asset allocation, clearly defining manager objectives, and evaluation of plan performance were
the main changes targeted.
Motion by Commissioner Price, Seconded by Commissioner McCloud to forward the proposed Resolution for
the Adoption of the Revised Investment Policy Statements to the full Board for consideration.
Action: Motion Carried.
Internal Audit Quarterly Management Response Report-Out
CFO Heather Shawa reviewed the Internal Audit Quarterly Management Response Report-Out and reported
that the Management Responses are sent out quarterly. Internal Auditor Phil Perkins and his team perform
various internal audits throughout the year and provide recommendations or findings to the management,
who are then responsible to submit corrective actions within 30 days of the final audit report to Mr. Perkins.
This Report-Out is the tracking tool to monitor the recommendations or findings and the corrective actions
submitted.
12
f'dulcs ht red
Issue Responsible
Audit Name Issue Description Date Area Stands
Open Issues:
33 Outage The audit recommended more specific lest critetia, Oct I nfonnatiou Rasults provided a,part of\ovc.nl+:r 2016.sores 1,.,[included:
Itlanagement testing performed by the call pmcessiag vendor. 2015 Technology ♦levelopmc at o spcc'iflc le-ir cl'ituria,te,IQmp t';crtartucd by the call
Slmern development of rest scripts,and a narrative of test Irrocesain,vanddx.development of test,cripts,and a u:urdive of test
results. results_Based an costtenefit nays".the rmaininr reccommendan ons
firant theztw11uorlwrated into the new O.MS solution.
sfia 2{i8.chedule min 44 Billing To address safety concerns associated with hilt Nov Planning& Applicable tan±tuar8,,has been imrntpixnted into pralxtsed ch:m;,rs to
consumption residential customers.nraimennent is 2016 Development BR'LRule•,and lte}2ilafn ms.In addition.RWI is comuplying with the
discussing possible revisions to existing Rules and City of Lansinpi.Pious Occupsd.0 Ordinance.
Regulations and coordination of pubnc safety initiatives
with other public agencies.
45 Perfmwance Internal Audit recommemled additouil standardization Jau Human Further development ofthe BttT.perforniance mauagmtent process for
Evaluation& of performance evaluation procedures. 2017 Resources non-bargaining employees is underway,including additional
Compensation participation throughout the year and goals and objectives in line with
the new BWL Strategic Plan.The SMART concept already in use will be
expanded upon(i.e..employee performance goals are SMART,which
stands for Specific,Measurable,Attioti-oriented,Realistic and Time
bound).Estimated completion date is 711118.
46 Performance Internal Audit recommended job descriptions be Jain Hainan Hainan Resources will coordinate all update of job descriptions,in
Evaluation& updated. 2017 Resources collaboration with each area dunugliout the organization.This project
Compensation will incorporate multiple phases,beginning with planing and
identifying needed resources.Estimated project completion is 6130/19.
47 Perforance Internal Audit recommended increasing flexibility with Jail Humman �Decouphng of base and merit increases is already t uderway,including
Evaluation& awarding merit increases. 2017 Resources budgeting of the two separate categories of increases for fiscal 2018 and
Compensation development of conespondumg hnstnetional hnfonuation.Project
completion is expected by 711118.
48 Collections Internal Audit supports adding a requirement to check March Customer A new tool will being hnplemented,by 811;11,to help ensure deposits
;Eft' customer credit prior to opening a new account. 2017 Service are consistently and appropriately applied to new customers.
50 Follow-Up of Internal Audit noted the need to reemphasize use of May Training& Meter in. in LMS will be provided by 9i30/17 and use of LMS
Training& LMS and continue with refresher training. 2017 Development will continue to be reemphasized.
Development
Audit
AEI{'
51 Follow-Up of Internal Audit recommended Training&Development May Training& Workshops for departmental trainers,including an online procedure for
Training& coordinate with department trainers to better ensure 2017 Development entering training completions to LEIS,will be developed and delivered
Development training completions are entered into 12MS,along with by 9.:30117.The workshops will be followed by management's
Audit considering the eventual use of LMS as the primary assessment of the accuracy and completeness of training documentation
,Eft source for Balanced Scorecard Reporting of training in LbIS.concluding with a reconurlendation,by 3/3ll18.regarding use
time. of LMS data in Balanced Scorecard reporting.
52 COBff Internal Audit noted that actions should continue on as June Information Multiple actions and completion dates are involved,including hioer-
Compliance expedited a schedule as possible to reach fall 2017 Technology risk,as-yet-incomplete items 1.6(an 5uplemention plan for the IT
VIF compliance with flue adopted IT govemance framework Strategic Plan;expected by 7/1117);81(Quality Management System)
and 9.3(Risk Management Plan),by 12/31117;3 2:4.5.6.2.and 8.1(all
to be provided via the new governance fimework).by 1213 Ill 8;and 4.1
(replace Cobit governance framework with CN9Q,by 680119.
13
STATUS OF MANAGEMENT RESPONSES TO AUDITS _ _
JUNE 2017 In Accordance with Board Resolution#2014-07-05
♦,.h�ilf6S in red
I.ssuz Responsible
AuditNaue Issue Description [Dal,# J Area Status
17 Close the Books The Iilenual Auditor iecoiunneuded that consideration Aue General A General Accolmting Procedure Manual was finalized in May 2017.
be given to the use of a general accounting manual. 2014 Accounting
7 Nlanagemenl of The I temal Auditor recommiemded encrypting data on Sept Infonuadon IT has encrypted the laptops used by field personnel and established user
Mobile Devices all remaining laptops and smart phones. 2015 Technology guidelines.Guidelines insinict B3VZusers to encrypt sensitive data on
their own mobile devices.Software with remote uanageueut
capabilities has been procured,installed,and deployed.
29 Manaeenneut of menial Audit reconuuended finisher consideration of Sept Information Software with remote nnanagenncut capabilities has been procured,
Mobile Devices procuring sollwaie with.remote cleaning capabiliries. 2015 Technology installed.and deployed.
37 Hiiiag Process Intemtrl Audit has requested that an all-eucounpassing D4ay Human Htmuan Resources developed an operational policy which addresses
hiring policy be documented. 2016 Resources 131W,lining srandardsin their eutiren.
49 Collections menial Audit su geea continued nnonitoring of the 'March Qutomner Management continues to monitor the appropriateness of the dollar
i'.!'y' appropriateness of the dollar threshold for Final Notice 2017 Service threshold for Final Notice.
to cusionuers prior loan unpaid account becouting
eligible for shut-off of services.
E 2 IT Risk Ir was noted that network and fiva vial application Sept Infon'ruation Enhancennem of network.mainfra ie,and application password settings
Assessment by password settings need sirengdlening,including 2016 Technology has been completed.
External establishing requirements tharpasswords be changed
Auditors every 90 days,be a mninimum lengdr of S characters,and
include special characters.In addirion.S prior
passwords should be reineunbcred and user accounts
should be locked after 3-5 failed login attempts.
E-3 IT Fisk Management letter indicated that user account access Sept Information IT's review ofuser access to CIS and SAP with nnanagennenthas been
tlssessnnem by should be reviewed annually by management for 2016 Technology completed
External appropriateness,following the least privilege principle,
Auditors with documentation of reviews retauxd.
E-5 IT Risk Baker-Tilly noted that the Windows 2003 operating Sept Information The DP250 database is now tuning on an updated operating systeur.
Assessment by system oil which the DP250 database isms needs 2016 Technology
E"" "I upgrading.
Audimrs
Internal Auditor Status Report
Internal Auditor Phil Perkins presented an overview of the following information:
• External 5-Year Independent Review Results
• FY 2017 Audit Plan Progress Report
• Proposed FY 2018 Audit Plan
• Other Items
External 5-Year Independent Review
• Overall — Internal Audit at BWL was assessed as "generally conforming" to the Institute of Internal
Auditors' Standards for the Professional Practice of Internal Auditing.
• 5 non-binding recommendations for enhancements:
1. Change weightings on individual risk assessments to better quantify risk ratings for each activity in
the audit universe. Internal Audit response: Concur and adopted the recommendation. Completed
for FY 2018 risk assessment and will use the updated model going forward.
2. Include a separate "risk" category in audit reports for all issues presented. Internal Audit response:
Partially concur and will adopt the recommendation as needed (an effect or impact statement is
now included with each issue).
14
3. The CEO Hotline should be an auditable area. Internal Audit response: Concur. Internal Audit will
work with management to gain access to hotline complaints that involve potentially fraudulent or
otherwise illegal or unethical behavior, with the
objective being to address control or procedural improvements to prevent similar incidents in the
future. Estimate completion of a working approach by July 31, 2017.
4. Audit planning should include consulting during System Development Life Cycle for major system
development and acquisition. Internal Audit Response: Concur. Internal Audit is working with
management to provide both informal and formal advice and consulting on current BWL major
projects such as the ADMS, AMI, new plant construction, and replacement Cl system, as well as any
future such projects.
5. Risk assessment discussions between the Internal Auditor and the Finance Committee should be
documented so that the approval of the annual audit plan and accompanying resources reflect the
results of such discussions. Internal Audit Response: Concur. The Internal Auditor will include in his
recommended audit plan why the number and type of audits and resources needed are optimal
based on assessed risks, and this will be documented in Finance Committee meeting minutes
accordingly.
FY 2017 Audit Plan Progress Report
Engagements Completed: 2. Identity and Access Management Audit(estimated
1. Follow-up Training& Development Audit 50%complete)
2. Collections Audit 3. Follow-up Hiring Process Audit(estimated 67%
3. COBIT Compliance Audit complete)
4. New Service Order Management—Water Audit
5. Performance Evaluation/Compensation/Merit Pay Basis for plan:
Audit 1. Meetings with Executives and Staff to discuss risks
6.Surprise Cash Counts (2) and potential audit topics.
7. Employee Time Reporting Reviews (2) 2. Risk assessments for each of 100-plus auditable
8. Vehicle Time Reporting Reviews (1) activities at BWL.
3. Consideration of rotational audits, audit areas with
Engagements in Progress: risk/scoping assessments,first-time audits,etc.
1. Payroll Management Audit(estimated 75%complete) 4. Identified at least 19 potential audits to perform in FY
2018 and beyond.
Proposed FY 2017 Audit Plan — Background
Top 10 audits for FY 2017 (as discussed and agreed with senior management):
1. Cash Receipts
2. IT—Help/Service Desk
3.Succession Planning
4. Customer Payment Arrangements& Third Party Payments
5. Contract Authorization/Approval Process
6. Physical Access Security Management
7. Water Production Plant Audit
8. Power Purchase Agreements
9.Accounts Payable Below the line will be deferred
10.Cash Management/Treasury beyond FY 2018.
(Audits below the line will be deferred beyond FY 2018)
15
Proposed FY 2018 Audit Plan Available Resource
Planned Audits: Estimated Hours
Cash Receipts 300
IT Help/Service Desk Management 300
Succession Planning 300
Customer Payment Arrangements 300
Contract Authorization/Approval 300
Process
Physical Access Security Management 300
Water Production Plant Reporting 300 Phil Perkins Director of Internal 1,500
Other Engagements: Audit
Surprise Cash Counts(2) 50 C.L.Moore&Associates Augmented IA Services 8D0
Time Reporting Reviews(2) 150 Internal or External IT IT Audit Services 200
Consulting—Project 200 Audit Assistance
Development/Acquisition
Total Estimated Hours 2.500 Total Hours ZIMQ
Motion by Commissioner Price, Seconded by Commissioner McCloud to approve the FY 2018 Audit Plan.
Action: Motion Carried.
Internal Auditor Perkins requested that the Committee approve the Internal Auditor's Charter as is, as there
were no changes to the document. In response to Mr. Perkins request Finance Chair Ross suggested that the
Charter be provided at the next Finance Committee meeting for review.
Other
A request was made by Commissioner Long to have management provide a rate hearing schedule/timeline
review for 2017-2018. CFO Shawa provided an overview of the rate hearing schedule. The tentative schedule
has the Finance Committee Meeting in September 2017 as the kickoff. This meeting is currently scheduled for
September 12, 2017 but there is discussion to move it to September 19, 2017. The Finance Committee is hoping
to move the rate hearing schedule to the full Board at the Board Meeting scheduled September 26, 2017. The
rate hearing schedule has to be filed with the Lansing City Clerk by October 16, 2017 and publication is required
by November 15, 2017. A public hearing is tentatively scheduled for November 30, 2017. Approval of the rate
strategy would be at the January 23, 2018 Board Meeting and the rate implementation would be in effect
February 1, 2018.
Ms. Shawa reported that rate projections are included in the long-term forecast. Cost of service has been
reviewed, plus cost and rate structures, for a multi-year rate strategy. Any additional items that the
Commissioners would like considered, besides those noted, are to be submitted to the Finance Committee
before July 23, 2017 for analysis and recommendations.
Adjourn
Chair Ken Ross adjourned the meeting at 9:14 p.m.
Respectfully submitted
Ken Ross, Chair
Finance Committee
MANAGER'S RECOMMENDATIONS
RESOLUTION 2017-07-01
EASEMENT GRANT TO CONSUMER'S ENERGY COMPANY
16
RESOLVED, that the Board of Commissioners hereby recommends that Lansing City Council grant an easement
to Consumers Energy Company which will be located on property occupied and maintained by the Board of
Water and Light.
FURTHER RESOLVED, the General Manager of the Board of Water and Light is authorized to execute all
documents to effectuate this easement grant once approved by the Lansing City Council.
--------------------
Staff Comments: Consumers Energy Company ("Consumers") desires and requested an easement across
property currently owned by the City of Lansing by and for the Board of Water and Light ("BWL") for a gas
pipeline. Upon Consumers' request, the BWL performed an operational feasibility assessment and negotiated
the terms, which includes monetary consideration in the amount of$107,500,that were mutually agreeable.
--------------------
Motion by Commissioner Thomas, Seconded by Commissioner Graham,to approve the Easement Grant
Resolution requesting Lansing City Council to approve the grant easement to Consumers Energy Company.
Action: Motion Carried
RESOLUTION 2017-07-02
Rules and Regulations for Electric,Water, Steam and Chilled Water Utility Services
RESOLVED, that Fiscal Year 2017-2018 Rules and Regulations for Electric, Water, Steam and Chilled Water
Services be approved as presented,to be effective September 1, 2017.
Motion by Commissioner Graham, Seconded by Commissioner Thomas, to approve the Rules and Regulations
for FY 18.
Action: Motion Carried
UNFINISHED BUSINESS
There was no Unfinished Business.
NEW BUSINESS
Appointment of Executive Committee
Motion by Commissioner Price, Seconded by Commissioner Mullen, to appoint Commissioner Anthony
McCloud as the fourth member of the 2017-2018 Executive Committee.
Action: Motion Carried
RESOLUTIONS
RESOLUTION 2017-07-03
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, at its first regular meeting following July 15t of each year or
as soon as practicable thereafter.
RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position
of Corporate Secretary fiscal year 2017-2018 or until a successor is appointed, whichever last occurs:
17
M. Denise Griffin, Corporate Secretary
FURTHER RESOLVED,That the Chair of the Board of Commissioners is authorized to execute any and all
contractual amendment documents which reflect merit adjustments recommended by the Human Resources
Committee for FY 2017's performance.
Motion by Commissioner Zerkle, Seconded by Commissioner Mullen to approve the Resolution for the
Reappointment of the Charter Appointed Position of Corporate Secretary.
Action: Motion Carried
RESOLUTION 2017-07-04
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, at its first regular meeting following July 15t of each year or
as soon as practicable thereafter.
RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position
of Internal Auditor for fiscal year 2017-2018 or until a successor is appointed, whichever last occurs.
Philip Perkins, Internal Auditor
FURTHER RESOLVED,That the Chair of the Board of Commissioners is authorized to execute any and all
contractual amendment documents which reflect merit adjustments recommended by the Human Resources
Committee for FY 2017's performance.
Motion by Commissioner Ross, Seconded by Commissioner Mullen to approve the Resolution for the
Reappointment of the Charter Appointed Position of Internal Auditor.
Action: Motion Carried
RESOLUTION 2017-07-05
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, at its first regular meeting following July 15t of each year or
as soon as practicable thereafter.
RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position
of Director and General Manager for fiscal year 2017-2018 or until a successor is appointed, whichever last
occurs:
Richard R. Peffley, Director and General Manager
FURTHER RESOLVED, That the Chair of the Board of Commissioners is authorized to execute any and all
contractual amendment documents which reflect merit adjustments recommended by the Human Resources
Committee for FY 2017's performance.
18
Motion by Commissioner Ross, Seconded by Commissioner Mullen to approve the Resolution for
Reappointment of the Charter Appointed Position of General Manager.
Action: Motion Carried
RESOLUTION 2017-07-06
Commissioner Governance
WHEREAS, The Lansing Board of Water & Light (BWL) is a municipally owned utility company organized under
the Lansing City Charter as permitted by the Home Rule Cities Act, MCL 117.4(f)(c), and governed by the Board
of Commissioners("Board").The Board, per the Lansing City Charter, is delegated administrative, executive and
policy-making authority over the operation of the BWL, which includes the full and exclusive management of
water, heat, steam and electric services and such additional services of the City of Lansing as may be agreed
upon by the Board and City Council.
WHEREAS, per the Lansing City Charter, the Board has appointed three individuals, Director (also known as the
General Manager), Internal Auditor (also known as the Director of Internal Audit) and Secretary (also known as
the Corporate Secretary), who report directly to the Board and serve at the Board's pleasure. The General
Manager is also responsible to the Board for carrying out the duties assigned by the Board, which includes but
is not limited to the operation and management of the BWL.
WHEREAS, the Board's role as the governing body for the BWL includes certain fiduciary duties such as acting
in the BWL's best interest, protecting and enhancing the BWL as owned by its rate payers, exercising reasonable
care, loyalty and good faith in actions and decisions, meeting legal and regulatory requirements, and assuring
the General Manager, Director of Internal Audit and Corporate Secretary are effective with adequate support
and resources.
WHEREAS, while the Administrative Rules of Procedure as approved by Lansing City Council in accordance with
Section 5-105 identifies how the Board will conduct business and is organized for fulfilling its policymaking
responsibilities necessary for the operation of the BWL, it desires to better define the understanding between
individual Board members on day to day dealings.
WHEREAS,the Board also desires to improve and clarify the general nature of its working relationship with the
General Manager, Director of Internal Audit and Corporate Secretary; and distinguish its role as the governing
body from the role of the General Manager, management and staff to ensure operational efficiency.
RESOLVED, the Board adopts the following policy which clarifies its role as the governing body, provides
direction and priority focus for the General Manager, and interaction between the Board, General Manager,
Director of Internal Audit, Corporate Secretary, management and staff:
COMMISSIONER GOVERNANCE POLICY
1) The Board's objectives and goals for its effective governance of the BWL include the following:
a. Develop and adopt corporate policies for the governance of the BWL that are sufficient for the
effective administrative and executive management of the BWL;
19
b. Review and approve the corporate strategic plan that sets forth the mission,goals and broadly stated
objectives and performance measures;
c. Review and approve major project plans and programs, capital and operating budgets proposed by
the General Manager, or other policy matters as requested by the Board;
d. Monitor organizational performance;
e. Support the General Manager by engaging in collaborative performance planning and evaluation.
2) The Board commits itself and its individual members to ethical, businesslike, and lawful conduct, including
proper use of authority and appropriate professional and personal behavior. More specifically:
a. Commissioners must, in capacity as a board member, represent the interests of the BWL and their
respective constituents.
b. Commissioners may not attempt to exercise individual authority over the BWL, except as explicitly
set forth in Board policies.
i. Commissioners' interactions with the General Manager, management and staff must clearly
reflect that there is no authority vested in individual Commissioners, except when explicitly
authorized by action of the Board.
ii. Only the Chair or other Designee of the Board may speak on behalf of the Board.To that end,
no individual Commissioner(other than the Chair) may speak for the Board except to repeat
explicitly stated Board decisions.
iii. Commissioners will refrain from making individual public comments about the BWL unless
such comments are supported by relevant,timely, accurate and objectively reported
information.
iv. Commissioners will respect the confidentiality appropriate to personnel issues and
information of a sensitive nature.
3) The Board adopts and establishes that the General Manager's principal role, with the support of
management and staff employees, is to:
a. Carry out the administrative and management duties assigned for the full and exclusive management
of the utility services provided by the BWL;
b. Support the Board in its development of policies;
c. Carry out the Board policies;
d. Keep the Board informed about the outcomes of its polices, including achievement of results and the
use of resources;
e. Prepare and present, for Board approval and consistent with Board policies, a strategic plan, major
project plans and programs and capital and operating budgets;
f. Manage and operate the BWL, accepting accountability for the performance of the organization in
relation to the Board's policies, as well as its approved strategic and business plans, major project
plans and programs, and capital and operating budgets.
g. Establish administrative and operational directives, standards, guidelines and procedures that
support Board approved corporate policies, strategies, projects and budgets.
20
irector of
al Audit
te
4) The Board shall provide direction to the General Manager,
Mmo gonr es adopted bynthe Board which includes Secretary
the
collectively as a board through resolute
understanding that:
f Internal A
a. The General Manager, Director oudit and Corporate Secretary are the only persons
ational conduct that directly impact their respective
directly accountable to the Board for the oper
areas of responsibility. Additionally, the General Manager, Director of Internal Audit and Corporate
Secretary are individually accountable only to the Board.
The authority and accountability of respective management and staff is inseparable from the
authority and accountability of the General Manager, Director of Internal Audit and Corporate
Secretary.To that end:
i. The Board shall not give orders directly or implied to anyone other than the General Manager,
Director of Internal Audit or Corporate Secretary based on the areas of respective authority
and accountability.
ii. To the extent that the Board's written policies do not give specific direction, and the General
Manager, Director of Internal Audit or Corporate Secretary deem it necessary to act, the
General Manager, Director of Internal Audit or Corporate Secretary will respectively use a
reasonable interpretation of its current policies, to make all decisions, develop all processes
and procedures, take all actions and establish
forl practices add additional,or amendmecessary nts will
existing g Boaort to rd
Board actions taken and any recommendations
written policies.
commissioner or Board
ttee to do
b. Unless the Board has specifically authorized decis olnsdo al commendations,nor issue directives that
so, an individual Commissioner cannot make
are binding on the General Manager, Director of Internal Audit and Corporate Secretary
c. When individual Commissioners request information or assistance from management without
formal Board authorization,the General Manager, Director of Internal Audit and Corporate Secretary
can either respond to the request accordingly or refer the request to the Board.
L Respond as requested. The General Manager, Director of Internal Audit and Corporate
Secretary at his or her discretion may notify all other Commissioners of the request and the
response provided.
ii. Refer the request. The General Manager, Director of Internal Audit and Corporate Secretary
at his or her discretion may refer the request to the Board for consideration and direction
before taking any action. This is especially appropriate where the General Manager,
Director
of Internal Audit and Corporate Secretary believe responding to the request for information
or assistance would be disruptive or require a material amount of staff time or funds that were
not previously budgeted or scheduled for that purpose.
5) Each year the Board will conduct a self-evaluation, soliciting the views of Board Members and other
stakeholders as to the ways in which efficiency and effectiveness can be improved.
6) This Commissioner Governance policy is not intended to and shall not be construed as supplanting the
Administrative Rules of Procedures as approved by the Lansing City Council in accordance with the Lansing
City Charter Section 5-105 in whole or part. This Governance Policy is an understanding amongst the
Board of Commissioners of how it will effectuate its executive and policymaking responsibilities with the
21
utilization of its three appointees: General Manager, Director of Internal Audit and Corporate Secretary.
To the extent certain organizational resources are needed d permsoed by the legal counsel this tivpol icy shall not
Rules of
Procedure,which includes but is not limited to the use of consultants
prohibit or hinder such use, so long as the Administrative Rules of Procedure are followed.
Motion by Commissioner Price, Seconded by Commissioner Mullen to approve the Resolution adopting the
Commissioners Governance Policy.
Action: Motion Carried
RESOLUTION 2017-07-07
Internal Audit Plan for FY 2018
RESOLVED,that the Board of Commissioners hereby approves the Internal Audit Plan for FY 2018.
Motion by Commissioner Ross, Seconded by Commissioner Thomas to approve the Internal Auditor Plan for FY
2018.
Action: Motion Carried
RESOLUTION 2017-07-08
Revised DB and VEBA Investment Policy Statements
ined
WHEREAS,the Board of Water and Light(the"Sponsor")sponsors n h Lansing Board of Water and Ligt and the Post Retirement Benefht Plan
Eligiblefor
Benefit Plan for Employees' Pensions (the Defined Benefit Plan")
Eligible Employees of Lansing Board of Water and Light (the "Retiree Medical Benefit Plan"); and
WHEREAS,the Retirement Plan Committee has reviewed the current(i) Lansing BoardProcedures o WaterObjects&Light Defined
the
Benefit Plan for Employees' Pensions Statement of Investment policies, Investment
Post-Retirement Benefit Plan for Eligible Employees of Lansing Boardit o of n/ to aater&new Light
benefiteplanf investment
Policies, Procedures and Objectives, in conjunction with
consultant; and
visions
lected in the
WHEREAS, the Retirement Plan Committee recommends the Sponsor adopthe Pensions fStatement of
attached (i) Lansing Board of Water & Light Defined Benefit Plan for Employees'
Investment Policies, Procedures and Objectives; and (ii) Post- Retirement Procedures Benefit and for
Objer Eligible Employees of
Lansing Board of Water& Light Statement of Investment Policies,
WHEREAS,the Sponsor wants to adopt the revisions reflected in the attached (i) Lansing Board of Water&
Light Defined Benefit Plan for Employees' Pensions Statement
Empl Investment oyees of Water&rocedures dLight
Objectives; and (ii) Post-Retirement Benefit Plan for Eligible of Lansing
Statement of Investment Policies, Procedures and Objectives;
THEREFORE, it is:
22
RESOLVED,that, after its review, and based on the recommendation from the Retirement Plan Committee,the
Sponsor adopts and approves: (i) the attached Lansing Board of Water & Light Defined Benefit Plan for
Employees' Pensions Statement of Investment Policies, Procedures and Objectives; and (ii) the attached Post-
Retirement Benefit Plan for Eligible Employees of Lansing Board of Water& Light Statement of Investment
Policies, Procedures and Objectives.
Motion by Commissioner Ross, Seconded by Commissioner Zerkle to approve the Revised DB and VEBA
Investment Policy Statements.
Action: Motion Carried
MANAGER'S REMARKS
None
COMMISSIONERS' REMARKS
Commissioner Mullen expressed his appreciation for the work of the Board Appointed employees.
Commissioner Ross requested an update on the status of the substation particularly regarding the sunken
garden.
GM Peffley responded that the project is on schedule and on budget. Contractors have been hired and
excavation will start about mid-August. Plants have been removed and put in storage and maintained in a
greenhouse. The moving of the garden will begin with the excavation. The project is scheduled to be
completed in October 2018.
Commissioner Thomas congratulated the Chair and Vice Chair as well as the three appointed employees on
their reappointment for FY18.
MOTION OF EXCUSED ABSENCE
Excused Absence
Motion by Commissioner Mullen,Seconded by Commissioner Thomas,to excuse Commissioner's Louney,
McCloud and Nelson from tonight's meeting.
Action: Motion Carried
PUBLIC COMMENTS
None
ADJOURNMENT
Chair Price adjourned the meeting at 5:50 p.m.
M.Denise Griffin,Corporate Secretary
Preliminary Minutes filed(electronically)with Lansing City Clerk:7-27-17
Official Minutes filed(electronically)with Lansing City Clerk:9-29-17
23
3
Q 1
� 3
Hometown People. Hometown Power
N
MINUTES OF THE BOARD OF COMMISSIONERS MEETING
its c,_
LANSING BOARD OF WATER AND LIGHT
t.
C -`!
May 23, 2017 r-)
r— v
The Board of Commissioners met at the Lansing Board of Water and Light(BWL) Headquarters-REO Town Depot
located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Tuesday, May 23, 2017.
Chairperson David Price called the meeting to order at 5:30 p.m.
Present: Commissioners Dennis M. Louney, Anthony McCloud, Tony Mullen, David Price, and Sandra Zerkle.
Non-Voting Commissioners present: Stuart Goodrich (arrived @5:53 p.m.) (Delhi Township), Bill Long (Delta
Township) and Bob Nelson (East Lansing).
Absent: Commissioner Tracy Thomas
The Corporate Secretary declared a quorum.
Commissioner Graham led the Pledge of Allegiance.
APPROVAL OF MINUTES
Motion by Commissioner McCloud, Seconded by Commissioner Mullen,to approve the Regular Board Meeting
minutes of March 28, 2017.
Action: Motion Carried
PUBLIC COMMENTS
None.
COMMUNICATIONS
Electronic Mail received From or Re:
a. LaSandra Jones regarding Outside Personal Protection Light-Referred to Management-Received and Placed on File
b. The 24th Annual Adopt A River Event-Received and Placed on File
c. Michael VanLeeuwenn regarding BWL's E-Payment System-Referred to Management-Received and Placed on File
1
COMMITTEE REPORTS
HUMAN RESOURCES COMMITTEE
Meeting Minutes
May 23, 2017
The Human Resources Committee (HR) of the Lansing Board of Water and Light (BWL) met at the BWL
Headquarters-REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:00 p.m. on Tuesday, May
23, 2017.
Human Resources Committee Chairperson Sandra Zerkle called the meeting to order and asked the Corporate
Secretary to call the roll.The following members were present:Commissioners Anthony McCloud,Tony Mullen.
Also, present:Commissioners Beth Graham;and Non-Voting Commissioners Stuart Goodrich and Robert Nelson.
Public Comments
None
Approval of Minutes
Motion by Commissioner Mullen, Seconded by Commissioner McCloud, to approve the Human Resources
Committee meeting minutes of January 10, 2017.
Action: Motion Carried.
Discussion re: Charter Appointed Employees Evaluation Process
Human Resources(HR)Chair Sandra Zerkle led the discussion on the evaluation process forthe three employees.
The HR and Board Chair agreed to be charged with the task of working with the appointed employees,on behalf
of the Board of Commissioners, on their respective annual merit considerations.
HR Chair Zerkle explained that although the evaluations are easier to do electronically, this year they were
printed and handed out as some words were omitted in the electronic preparation process. She informed the
Committee that the next HR meeting would take place on June 27, 2017 to review the appointees' evaluations.
Other
None
Public Comments
None
Excused Absence
Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to excuse Commissioner Thomas from
tonight's meeting.
Adiourn
With Motion by Commissioner McCloud, Seconded by Commissioner Mullen, the meeting adjourned at 5:16
p.m.
Respectfully Submitted,
Sandra Zerkle, Chair
Human Resources Committee
2
COMMITTEE OF THE WHOLE
Meeting Minutes
May 9,2017
The Committee of the Whole of the Lansing Board of Water and Light (BWL) met at the BWL Headquarters-REO Town
Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Tuesday, May 9, 2017.
Committee of the Whole Chair Tony Mullen called the meeting to order and asked the Corporate Secretary to call the roll.
Present: Commissioners Beth Graham, Tony Mullen, Dennis M. Louney, David Price and Sandra Zerkle and Non-Voting
Members: Stuart Goodrich (Delhi),William Long(Delta Township) and Robert Nelson (East Lansing).
Absent: Commissioners Anthony McCloud, Ken Ross and Tracy Thomas.
The Corporate Secretary declared a quorum.
Committee of the Whole Chair Mullen welcomed new Commissioner Beth Graham representing the 2nd Ward.
Public Comments
None
Approval of Minutes
Motion by Commissioner Price, Seconded by Commissioner Zerkle to approve the Committee of the Whole meeting
minutes of March 14, 2017.
Action: Motion Carried
Governance Policy Resolution
Board Chair David Price thanked Legal Counsel Ekren for her assistance with the Resolution for the Governance Policythat
is being presented today. Chair Price stated that it is a concern of volunteer organizations that are governed by Board
members that Board members know the parameters of what is required of a Board member and a job description helps
to ensure the success of Boards. The proposed Governance Policy provides specifics about the role of the Board and the
relationship to the three employees and members of the Board of Water and Light.
Following a discussion regarding the proposed Resolution the following motion was made:
Motion by Commissioner Price to forward the proposed Resolution for the Governance Policy to the full board for
consideration.
Motion by Commissioner Zerkle to lay on the table the discussed motion, Seconded by Commissioner Mullen.
Discussion: In summary, it was determined that further clarification was needed and that the proposed Resolution will be
forwarded to Commissioners in Word format to allow for changes and suggestions to be incorporated (redlined) into the
document. The document would then be returned to the Committee Chair who will bring the
recommendations/suggestions back to the Committee for review and consideration.
Committee of the Whole Chair Mullen stated for the record "This is an answer to a problem. This is not an answer in
search of a problem. 1 know of circumstances where this was needed to be written down. We may want to rewrite some
of these with the help of our Legal Counsel, but something like this Governance memo or a revision of our rules—which
would have to be approved by the City Council, and which would be difficult—needs to be put in writing. We have a
problem which we need to resolve. 1 would like to continue on something not discussed so for, and that is the problem
could be construed as respect." Commissioner Price added that one of the things that he has noticed about this
organization and its employees is the incredible respect the employees have toward commissioners.
3
Action: Motion Carried
Energy Optimization and Renewable Portfolio Annual Report
Sue Warren, Manager of the Energy and Eco Strategies Department, provided the Committee with the Annual
Renewable Energy and Energy Optimization Update,This report is a Public Act requirement imposed by the State of
Michigan's Public Service Commission (MPSC).
Ms. Warren stated that according to Public Act 295,the BWL is required to provide an annual report to its governing
body, MPSC and the BWL Customers.The said report will be provided to customers in the July Connections.
Energy Optimization 2016 Programs Program Highlights
➢ Services for Low Income Customers ➢ Education in the Community
➢ Residential Programs ■ Attended 48 local events
■ High Efficiency Lighting ■ Staff did 17 presentations to community
■ Appliance Turn-in & Recycling groups
■ Multi-Family Services ■ Think! Energy(school program with
■ Energy Star Products/Equipment Consumers Energy)
➢ Business Programs ➢ Pilot Programs
■ Prescriptive &Custom Incentives ■ Non Profit Grant
■ Energy Education Services o 14 Nonprofit organizations participated
■ Pilot programs ■ Smart Thermostat Program
o Installed 71 thermostats in 2016
■ Michigan Saves Low Interest Financing (with
CE)
o Residential— 0% for $1,000430,000
loans for up to 4 years
o Funded 12 loans in 2016
Ms.Warren reviewed the Energy Optimization Summary. Blue is the 2016 goals,the kilowatt hours savings are on the left
hand side, and the program budget is on the right. The actual is in the orange color, She stated that we met or exceeded
our goals and were at 118%of our kilowatt goals and used only 92%of budgeted money.
Energy Optimization Summary
_.._.__..____.................... ....._...._._._.._.______._._........
201G Caals 1 2016Aawl
Program Portfolio no F411Year PlwR Gross rasl Ye Prig
M,Savings 0udgvl 45W 5asdngs j Budgar.
........._............_......._.......__.............._......__........................_......_...._...................
......:........................_.....
Low P.—Saril 425,815 5213,875 649,543 i $218,940
Besulxmial Programs 5.606,248 51,250.209 5.615,631 i $1.154.983
.............................................................................................................................................._....:_........_.................
Business Services 16,151.740 $2,517,3a2 19,901,755 i $4312,594
Total Program Portfolio 22,183,801 $3.981.42G 26,166,929 $3,686,517
Pragram Adminlatralion� $374,639 _ $355,912
EVaWa6on(EMRV) >31U,561 5249,611
ANNUAL TOUTS 22,183,803 $4,676,629 20.166,929 $4,29y040
The pie chart below indicates what kind of measures the residential and Business customers have chosen to do to
achieve the kilowatt hours savings that have been attained from 2009 to 2016.
Residential Summary 2009-2016 Business Summary 2009-2016
ResldentW aM low lnWmelGlowelr SvvL� n
uGn m
4
Ms.Warren stated that the majority of the energy savings comes from lighting. A lot of that is due to the pricing of LEDs.
The slide below shows LED price reduction, which have come into the market and become very affordable, and to which
customers can transition.
LED Price Reductions
BWL LED Program
Price change based on 60W Equivalent
53nao
i
$25.00 —$ze.vz I i
$2J 00 ..-................ ................................................................................................................................._.._........_..............................................
$14.97
$I5.00
$17.97
$997
$M m 9.9]
$5.97
$5.03 ..._...._..........................................................................................$49J
......................................._...._. $399......._53.99 1
i
Apr19 1u113 Nw-13 J -14 J -14 Ma 14 Oct-15 1 -16 Aue-16 Sep16 J -17 )en-17
Ms. Warren indicated that some changes will need to be made due to the energy savings being based on incandescent
vs LED's, and savings between a compact fluorescent bulb and a LED bulb are not as large as they used to be. BWL has
hired Morgan Marketing Partners,who does most of the energy optimization plans for all the utilities in the state of
Michigan,to help implement a new cost saving plan to be effective for 2018-2020.
Annual Renewable Energy Update
Under Public Act 295 all utilities had to have 10% renewable energy in their portfolio by 2015. The Board of Water and
Light is in compliance with both the renewable energy and its inventory Earned Renewable Energy Credits(EREC's.) New
legislation does change slightly. The renewable energy number is increased to 12.5%in 2019 and 2020 and then increases
to 15% in 2021. With our plan developments, and due to the ability to carry forward renewable energy credits, the BWL
will not need any additional renewable energy to meet compliance with Public Act 342.
BWL's current energy portfolio consists of the purchase of energy and Renewable Energy Credits for landfill gas from
Granger,Tower Kleber Hydro, and wind from Exelon. In addition,the BWL owns a solar array on Cedar Street and a small
array located on the roof of the BWL's REO Headquarters facility. BWL does have a hydro plant which is not operating
right now but is under review.
At the conclusion of Ms.Warren's presentation,General Manager Peffley provided additional information on the progress
of the BWL's renewable energy program. He indicated that the BWL's Purchase Power Agreement (PPA)for 85 Mw of
wind energy in Huron County, while receiving initial permits, was defeated in an early May County referendum. He also
indicated that the wind developer was working on another site in the Thumb area of Michigan to replace the 85 Mw
defeated by the referendum.
Mr. Peffley included that the next renewable project will be a solar installation. According to the General Manager,solar
and the energy efficiency program will help reduce peak load and assist in the design of a smaller generating plant. He
stated that the BWL had multiple options to meet its renewable goals of 30%clean energy by 2020 and 40%clean energy
by 2030.
Smart Meter Communications ToolKit
Executive Director Stephen Serkaian introduced Communications Coordinator Amy Adamy and Community Relations
Coordinator Annie Rzepecki who presented a brief overview of the new smart meter program and the communication
5
toolkit available for distribution to the public. The presentation covered what are smart meters, future benefits of the
program,and possible concerns from customers.The BSmart FAQ Booklet, brochure and business card were handed out
to each commissioner to provide further details about the smart metering program. Following the discussion, it was
suggested to include closed captioning on the smart meter video.
What is a Smort Grid?
As technology advances,now tools and techniques '
can be Implemented to help olecinc and water grids
run more efficiently.A smart grid is a way to monitor
electric and water dishibutioi networks.
Previous meter-reading solutions only allower!'one-
way"communication.The new Smart Grid allows for ,
two-way'communication by creating a network
between the meters and the EWL:s information
systems.Data Hawing both ways allows for the 8WL to
monitor oral diagnose problems In the electric and
vmtet system.Information gathered through our smart
grid will ollow nor more otkierst outage restotations.
Integrablon with energy efficiency program.as well
as cusfotrnet vtsibihty and control over individual
electricity and water usage.
a al
Other
General Manager Peff ley informed the Committee:
The 24th Annual Adopt A River is this weekend.
The Board of Water and Light just completed its three year NERC audit and there were no problems found.
Attorney Client Memorandum Discussion-Closed Session (MCL 15.268(h); MCL 15.243(e)1
Committee of the Whole Chair Tony Mullen stated that the Board has been provided an Attorney Client memorandum
and discussion concerning this memo is permitted to occur in closed session as allowed by the open meetings act,
specifically mcl 15.268(h) and mcl 15.243(g).
Motion by Commissioner Zerkle,Seconded by Commissioner Price,to go into closed session.
Roll Call Vote:
Yeas: Commissioners Stuart Goodrich (Delhi Township), Bill Long (Delta Township), Dennis Louney, Tony Mullen, Bob
Nelson (E. Lansing), David Price, Ken Ross, and Sandra Zerkle
Nays: None.
Action: Motion Carried.
The Committee of the Whole went into closed session at 7:08 p.m. and reconvened to open session at 7:27 p.m.
Adiourn
Meeting adjourned at 7:28 p.m.
Respectfully Submitted
Tony Mullen, Chair
Committee of the Whole
6
FINANCE COMMITTEE
Meeting Minutes
May 16, 2017
The Finance Committee of the Board of Water and Light(BWL)met at the BWL Headquarters—REO Town Depot,
located at 1201 S. Washington Ave., Lansing, MI, at 5:00 p.m. on Tuesday, May 16, 2017.
Finance Committee Chair Ken Ross called the meeting to order and requested a roll call.
Present: Commissioners Ken Ross, David Price, Dennis M. Louney and Anthony McCloud. Also present:
Commissioners Tony Mullen, Sandra Zerkle and Non-Voting Commissioners Stuart Goodrich, William Long and
Robert Nelson.
Absent: None.
The Corporate Secretary declared a quorum.
Public Comments
None
Approval of Minutes
Motion by Commissioner Price, Seconded by Commissioner McCloud, to approve the Finance Committee
meeting minutes of March 14, 2017.
Action: Motion Carried.
External Review of Internal Audits at BWL
Internal Auditor Phil Perkins informed the Finance Committee that the required 5-year review conducted by the
Professional Standards of the Institute of Internal Auditors (IIA) is complete and is pleased to announce that our
internal audit activity passed the recent review by receiving a rating of"generally conforms"to the IIA Standards
which is the highest rating that can be attained. The review was performed by an independent external party
with expertise in performing such reviews,and the reviewer spent three days on-site interviewing key personnel
and reviewing Internal Audit's process, procedures, reports, and supporting documentation. Mr. Perkins stated
that there will be more details regarding the results of this independent review presented at a future Finance
Committee meeting.
March YTD Financial Summary
Chief Financial Officer (CFO), Heather Shawa presented the following:
7
.,-...�. __financla sununary Marrh.617
Cash Income Statement YTU _Ratios Um ploy"',DA"
m ,..... .v f.. _...
w s» 3E»L A K^Yt F^•._d3t R f 41'1"f1.L Y.!'R �� .«.w..w
..r... .... ;w•.rx,.e
w.xu .. ..,... K43
•.,.... rusasu ec+..m ,axm„a+ns awo ,v.Aa xa
Budget StatusYTp ....................._.__ a. +..zu•.uaa.u�.»+•.A,...xx:x...�..rxyA
a . +:.:.i•-,w rmax l.,ww,tb4ulwxcrwL .._..n., on t,ru_>,n
[I Oil
r.«rw.,w...r.«»v—.. � ,,:.,« r,ona sba«vro ...........a.«,—..,.«...................
,
:Adjusted Net Income Return
« «,. ..........
W
...u.w.+uawww W7n1N WM prl'tG».� I x_S=
+r...•.w„.w»+v.'AmnYM.A.r`.v JarAcaklt:s:aaztLaxcAEitYtn: »,,K•«www. .........rrh94aW.v :YY® ta.'4'au .........._ S...Je4!.._.....t.'t.lYi-.3..LYL'.L'._....
CFO Heather Shawa presented the March Year-to-date Financial Summary which indicated that the Cash target
is on track, Days cash on hand is 218, and debt service coverage is 2.15, both slightly improved from the prior
month. The Year-to-date net income as of March is $8.6 million better than budget and the projected fiscal-
year-end net income is approximately $13 million.
April Year-to-date revenues are just over $317 million, which is $10 million better than budget. As far as our
net income, April Year-to-date we are just shy of$19 million for net income, which is $8.2 million better than
budget. April is forecasted to be a low sales revenue month and we did have a budget loss of $2 million; we
have $2.5 million in actual loss, some of which is part of our 0&M budget. Year-to-date we are still strong and
still project about a $13 million net income for the fiscal year end.
Commissioner Mullen questioned what was included in the "Other" category of the Benefits Cost. In response,
Chief Financial Officer Heather Shawa-DeCook stated that she believed that was the VEBA adjustment. Chair
Ross requested CFO Shawa-DeCook provide information on Commissioner Mullen's question.
Commissioner Sandra Zerkle commented that at this time of year the summary shows that we have a lot of
money left over in Capital Expenses and suggested that we include a line in the budget that indicates that we
still have so many millions of dollars' worth of projects to be completed during the rest of the year. General
Manager Peffley agreed with Commissioner Sandra Zerkle's comments and will look into flagging those
expenses in the budget.
FY 18 Budget Presentation/Resolution
General Manager Peffley stated that he is very proud of staff. Last year he asked for a 5%cut and this year staff
was asked to hold the line. They have answered the call, although it was very tough, and BWL has not sacrificed
availability, reliability or safety. He said that we are about to embark on a multiyear rate strategy and he wanted
to show that the company has tightened its belt. He said that we can accomplish all the set goals and meet the
strategic plan requirements with the presented budget. This budget is 5% lower than it was 2 years ago.
CFO Heather Shawa presented and reviewed the FY 18 Financial Plan as follows:
8
Sales Volume Forecast
FY 18 Budget
Utility FY 18 Budget FY 17 Budget to FY 17 Projected
FY 17 Budget
......................................................................................................._..........................................................................................................................................................................................................................................
Electric-Retail(MWh) 2,131,850 2,137,145 (0.25Y,) 2,174,799
Electric-Wholesale(MWh) 715,840 767,770 (6_8•Y,j 785,756
Electric-Total(MWh) 2,847,690 2,904,915 (2.0%) 2,960,556
Water(ccf) 8,794,943 8,534,134 3.15. 9,022,337
Stearn(mlb) 7.34,136 744,469 (1.4%) 714,802
Chilled Water{tnhrs). 11,134,000 10,288,000 8`H 11,952,000
• Retail sales volume is relatively unchanged due to our underlying growth rate of approximately t%
6oinp arises by our cominuod ability tog9noraio:1"•energy savings annually through our energy
optimiratioh proyrams.
Wholosab.ales votuae is oxpsoted to dsorepoe duo to,odubtiorss in generation of pun Fokort plant.
Weser.
• Retail sabs volume Is a pocted to decline slightly due to oonanued.stsr conservation.0-ts. This
de ...is offset by Increa.ee in Wh.f..1.Water Hate., Dell'.i T—ship,in particular,is anticipating
increased demand in its-iee territory.
• Steam salsa volume—pecrarions Novo twos reduced slightly from the prior year to reflect recent,
actuaf—porionc..
Chilled Western
»..•�-_...••.,�� Chilled Wale,isles velunw vxpactationv have boon increnvvd to refioct—nt,act-1—porionoo.
�. .._,. ......... ....._... .......................................................... .,.. ,._.._ ......._.............. .._........._.,.,......_...._..._.................................. 3
General Manager Peffley commented that wholesale revenue denotes a reduction in the revenue forecast due
to a one unit operation at the Eckert plant, and this is included in the planning for the future.
Commissioner Ross stated in summary that the lack of reliance on the Eckert facility results in less power being
sent out into the wholesale market,which ultimately results in less revenue for the BWL over the next couple
of years.
f
FY 2018 O&M Budget by Category
-in.$OCK):., rxc/ride., df�sprc>riaT'ic�n
i Total o 5267,02B�
,.r.ssor ssuane
Chief Financial Officer Heather Shawa stated The FY 2018 O&M expenses (excluding fuel) increased by 5%
compared to FY 2017 budgeted 0&M expenses; the total FY 2018 0&M expenses decreased by 4% when
including an $18 million decrease in fuel cost. The Forecasted CPI Index is a 2.4% Inflation rate that has been
factored in. The FY 2018 budget assumes 756 employees, an increase of 2 from FY 2017 budgeted employees.
The FY 2018 budget assumes 18 temporary employees.
General Manager Peffley said it is important to note that this is the first budget that includes succession
planning, which is a very expensive process but can no longer be delayed.
CFO Shawa continued the review with the following:
9
"" FY 2018 Income Statement by Utility
......._.........._......._......_............................................................_.................._.............._.................................................................................................................................................
. ..
...................��....��.. .3I. �I.......�..._......__��._....__ Cl[GTR1C _WATCH....................._fT[AM.............CNILL[O_WATE N_..__._..TOTAL._........
ALF5(MWh.c I,MIb,f4 n•hrt) 21N471690 8,794,9,13 15q,f:,f. If,i..,IJM,
Nnt.:l S )h9,RairD t 3S,Lu!3 S 12,1$!i $ li,6l] $ i2t,iiq
PERATINO REV{RUC 3 19 G.19G S 401702 s 13,159 S S,OS] 3 35S,444
Or:wr:,tirnvK Mrint«nar:>.n E.n«n,w 5C22A,]g9) S I2N,71>) S(],1t01 3 ll.]]O) $ 17,:>,a7ril
5 t7341) 2,aza�
P CRATING Cl(PF NSE S(162,9T9) S (SL1O71( 3(9.944) 3 (4.209) S (523,10.I
PERATINO INCOME 3 13.5>5 S 4,625 S 2.113 S 1,91J S 42,339
H«t:nn on.......Y } If%,4!iAl i f7,f%41 5 (729) 3 196e) S 170;!rf Tl
r)t I'll N,fn'011e 11nI,6 n,r $ 1�7nis $ 1.219 $ 76 S 51 .i,riP1
LYtl,rr Nan�OVrr41in9 Eni+enia 'i f10,tl3!11_� 5 It,l;:>).,_ 9(3.`3NUi� .f (SY.OI S 115.�1G9!
ET INCOME(LOSS) 3 E,9S3 3 1,511 3 (124) S 929 S 9,691
ATQ OF RETURN 5..1% 1. % 3.11% S.7S% 2.E0%
UOOCTQO HATE INCREASE EFF[RIV[2r1r19 ].00Ye S.SOY 5.50'Yo 0.90%
The next two slides are comparative income statements based on initial requests from Management and after
our strategic alignment and review.
"" Comparative Income Statement Comparative Income Statement
Based on Initial Regaests Prior t't;" oic s;ignment an3 iry:w
toStrategicAlignment and Review ...._..._....._......................................_....._..... .............................
SwIY ml3aY,.t `uii..l nmeA,4. nlYl%1pq '
ivSYt,+xSx Sxacrx,wwn:ra.ew3dP5e
:AMtH><Yuv 45N xc!a9G .32'4: IV ' ••• n
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sH:>gi L,Ui Ytit IIM .SFcn v•,_ ... >*M"
xei'[.ra :tl» :%a1 �W!lui: rM4
SMf�rR>lxfGrraV ulll i,e%u .x.h2�YNwrt .., Ito
l:u; r.
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Uti M'SL03WCYitiiw't �f[I FCC..._.. ..._).??: .�...... 91tr Imo.xv!IYOYw,htiNN ' <;na
nw'CMi+9 MtNYue;t42f54 3:115t: f:!3S3) µ1D iYY4!ke4vDYan!34wf£uTW) ,. ,.. 5 i`w,! WY:
ari«arni•y... 1fi1_ ,�!.�e- nA ':c+us.'.e=!..rt ...x... I!......... »
fw-
av
ry'
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I
u>yL. 7 ..�•� E
FY 2018 Cash Flow by Utility
r:
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....... ...kL...:..1..........................................._t..}:r,«.!c:.,.__.......wwr.w...............•Fr...M._.._..........'!.nl.f.9..................,,,.rw!:........
INN,nnli,i4n„na,tn,N 94�]. .t.wl ...,. E.tt4 eG.Y,n
5 5 1Ytci 3 S
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w�SP♦ vva 5 1 1t1 I.a� L � 3
3 s L,D.t i:,v:•u.:mar•lw —....e a L -a.aau tm
..k_{.E2Y_....._.L..�:......_.. 3_...^*i..�.. ..L.._......:..__.._...E..._;..".."..2........
anv.l.•ul an»t s atY.vvt fa, n s s.wt f ..,vlu t lsn,,nt
�a:(r+,. L 06v1 L ItxtGl 1 idi L N�,KI 3
F•i+a„nnGeaa ia) 9<t 1.nSif S ie:,l4a) ,51 Sltt'+,a(�91i
rr nan. f ttn14w1 3 1 Iarnl
a w, I1F L �1^•..,
ra a>r r.nart //l+f,t.o1 3 lan,s,al t iv.rcutl 3 It,Srl sltne,>lal
............... ..._............_......err.........._.....
f .ty".i?........
p *�. `.. rb.yx qvr rM aufiNW C+AW�Av a+Hi]n'.aiv+r2l9r.J anY�v�%nr>+ni hervlt.r..af A4vnW tnit@i"rc1f:n,.,r
j�+Y', +t,w^h.1+1s>rYlr l.F w,n/YNS rnrAlun/vyanfn.vY as M'tFntn Jl,S+r!
A
10
CFO Shawa pointed out that the $50 million under Borrowing represents a preliminary estimation of spending
for the new gas plant.
CFO Shawa reviewed the budget summary by utility and location:
FY 2018 Capital Budget Summary
Donau to(000',)
UTILITY LOCATION
ELECTRIC $ 54,331 ECKERT $ 185
WATER $ 7.547 ERICKSON 5 199
STEAM $ 8,730 RED PLANT $ 3,000
CHILLED WATER $ 450 T&D $ 64,583
COMMON $ 18,457 DYE/CEDAR $ 2,327
'INTERNALLY FUNDED CAPITAL BUDGET $ 89,516 CHILLER PLANT 5 440
NEW NGCC PLANT $ 50,000 MOORE'S PARK S 463
TOTAL CAPITAL BUDGET $ 139,516 NEW NGCC PLANT $ 50,000
OTHER $ 18,319
TOTAL CAPITAL BUDGET $219,516
•Thlc total DO:S NOT Indurle thv N-,NC(r,!WaHiral C,ac Cnmhinodr—lel Plant
CFO Shawa reviewed the FY 2018 Capital Budget and projects:
FY 2018 Capital Budget — Major Projects/Prograrr
In conclusion, Ms.Shawa requested that the Board approve the FY18 budget and forward it to the full Board for
consideration at the May 23, 2017 Regular Board meeting. She stated that the Charter calls for the budget
adoption by June 1, 2017. Once the budget is approved it will be filed with the City Clerk within 10 days upon
approval.
Motion by Commissioner Price, Seconded by Commissioner McCloud to forward the FY 2018 Financial Plan to
the full Board for consideration.
Action: Motion Carried
Other
None
11
Adiourn
On Motion by Commissioner Price, Seconded by Commissioner Louney,the meeting adjourned at 5:44 p.m.
Respectfully submitted
Ken Ross, Chair
Finance Committee
MANAGER'S RECOMMENDATIONS
RESOLUTION 2017-05-01
East Lansing Electric Franchise
WHEREAS, The Lansing Board of Water and Light (BWL) or its predecessor has served the City of East Lansing
before and since its incorporation; and
WHEREAS,in May of 2016,the City of East Lansing asked the BWL to collect and remit a Franchise Fee equivalent
to 5%of utility sales within the City of East Lansing; and
WHEREAS, The City of East Lansing desired to have the same Franchise Fee arrangement as any other
municipality served by the BWL; and
WHEREAS, the Franchise Fee for other municipalities is collected directly and solely from each municipality's
BWL customers and passed onto the respective municipality; and
WHEREAS, the BWL desires to honor the City of East Lansing's request without forgoing any other rights it has
as a matter of law; and
WHEREAS, representatives from both the City of East Lansing and BWL have negotiated in good faith a mutually
acceptable East Lansing Franchise Agreement as memorialized in an Ordinance to be approved by East Lansing
City Council, attached hereto as Attachment 1; and
NOW, THEREFORE, BE IT RESOLVED, that the BWL Board of Commissioners hereby authorizes the BWL to
implement the East Lansing Franchise Agreement as specifically memorialized in the Ordinance as attached
hereto as Attachment 1.
Motion by Commissioner Ross, Seconded by Commissioner Mullen, to approve Resolution for the E. Lansing
Franchise Agreement.
Discussion:
East Lansing Mayor Mark Meadows thanked the Board of Water and Light for their work with East Lansing on
Resolution for the Franchise.
GM Peff ley stated that at the November 8,2016 Finance Committee a request was brought forth that was made
by East Lansing to implement a franchise agreement. Four items emerged that needed to be accomplished: (1)
East Lansing would provide the BWL with a legal opinion confirming a franchise fee can be assessed; (2) BWL
12
will need an agreement with East Lansing to reimburse the BWL for all costs for defending against a third party
claim associated with the franchise fee; (3) East Lansing will be requesting a franchise fee from Consumers
Energy and requests that both agreements should start concurrently; (4) BWL will require an opportunity to
review the legal opinion confirming a franchise fee can be assessed before they will enter into a franchise
agreement with East Lansing. East Lansing has met (1), (2), and (4). Mr. Peffley said that he would like to offer
an amendment. Through negotiations with the East Lansing manager, George Lahanas, and his staff, in lieu of
a Consumers Energy franchise fee, East Lansing has granted BWL an exclusive franchise fee for all future
development in the BWL service territory.
Action: Motion Carried.
Additional Comments regarding the East Lansing Franchise Agreement:
There was discussion regarding the service territory map that was provided by General Manager Peffley.
Commissioner Ross commended the strong indemnification language provided by Legal Counsel Brandie Ekren
that is in the interests of the BWL. Commissioner Ross asked for confirmation on whether the area of tree
trimming is expanded or contracted in East Lansing.
In response BWL Legal Counsel Brandie Ekren responded that it neither expands nor contracts the amount of
tree trimming. It underlines and outlines in a city ordinance the BWL's right to trim for the purposes of
maintaining its business.
Commissioner Ross also asked about the section that deals with liability and whether new wires will be run, or
new poles; and will it expand or contract BWL's liability, or will it be the same liability as for our current
infrastructure.
In response Ms. Ekren responded that the liability would be the ordinary liability assumed and is limited to
construction and maintenance activity which improve infrastructure and major construction projects.
Attachment 1- East Lansing Electric Franchise
CITY OF EAST LANSING
ORDINANCE NO.
LANSING BOARD OF WATER AND LIGHT ELECTRIC FRANCHISE
ORDINANCE
AN ORDINANCE, granting to LANSING BOARD OF WATER AND LIGHT, its successors and assigns,
the right, power and authority to, in the defined service area, construct, maintain and
commercially use electric lines consisting of towers, masts, poles, crossarms, guys, braces,
feeders, transmission and distribution wires, transformers and other electrical appliances on,
under, along and across the highways,streets,alleys, bridges,waterways,and other public places,
and to do a local electric business in the defined service area in the CITY OF EAST LANSING,
INGHAM AND CLINTON COUNTIES, MICHIGAN,for a period of thirty years.
13
THE CITY OF EAST LANSING ORDAINS:
SECTION 1. GRANT, TERM. The CITY OF EAST LANSING, INGHAM AND CLINTON COUNTIES, MICHIGAN,
hereinafter City, hereby affirms the right, power and authority to the Lansing Board of Water and Light, a
municipally owned utility, its successors and assigns, hereinafter called the"Grantee,"to, in the defined service
area, construct, maintain and commercially use electric lines consisting of towers, masts, poles, crossarms,
guys, braces, feeders, transmission and distribution wires, transformers and other electrical appliances,
hereinafter referred to collectively as electric lines,for the purpose of, in the defined service area,transmitting,
transforming and distributing electricity on, under, along and across the highways, streets, alleys, bridges,
waterways, and other public places, and to do a local electric business and have an exclusive franchise to
provide electricity and electric service in the defined service area only, in the CITY OF EAST LANSING, INGHAM
AND CLINTON COUNTIES, MICHIGAN, for a period of thirty years, with said defined service area being shown
and depicted on Exhibit A, which is attached hereto and incorporated herein by reference.
SECTION 2. FRANCHISE FEE. During the term of this franchise, or the operation of the electric system
pursuant to this franchise, and to the extent allowable as a matter of law, the Grantee shall, upon acceptance
of the City, collect and remit to the City a franchise fee in an amount of five percent (5%) of the revenue,
excluding sales tax from the retail sale of electric energy by the Grantee within the City, for the use of its
streets, public places and other facilities, as well as the maintenance, improvements and supervision thereof.
Such fee will appear on the corresponding energy bills.
The fiscal year for purposes of determining the annual franchise fee to commence on July 1, 2017,with
the new fiscal years commencing on July 1st for each year thereafter, with the first franchise fee to be paid by
the Grantee to the City of East Lansing on October 1, 2017, with the Grantee to pay the franchise fees to the
City of East Lansing on a quarterly basis thereafter.
The City shall at all times keep and save the Grantee harmless from and against all loss, costs, expense
and claims associated with the collection and remittance of this franchise fee.
Either party, upon sixty (60) days written notice by the party may terminate this Ordinance granted
franchise, franchise fee collection and remittance. However, to the extent the Grantee is precluded from
collecting such franchise fees remittance to City will cease.
SECTION 3. CONSIDERATION. In consideration of the rights, power and authority hereby affirmed, said
Grantee shall faithfully perform all things required by the terms hereof.
SECTION 4. CONDITIONS. All of Grantee's towers, masts, and poles shall be so placed on either side of the
highways, streets, alleys and bridges as not to unnecessarily interfere with the use thereof for highway, street,
alley and bridge purposes. All of Grantee's wires carrying electricity shall be securely fastened so as not to
endanger or injure persons or property in said highways, streets, alleys, and bridges. All work performed by
said Grantee in said highways, street[s], alleys, and bridges shall be done so as to minimize interference with
the use thereof, and when completed,the same shall be left in as good condition as when work was
commenced. The Grantee shall have the right to cut or trim trees if necessary in the conducting of such
business.
14
Said lines and appurtenances shall be constructed so as to interfere as little as possible with the proper
lawful use of the streets, alleys, and public places.The installation of all poles, conduits, and appurtenances
shall be according to industry standards and shall be subject to such reasonable regulations as shall be
prescribed by said City from time to time.
SECTION 5. HOLD HARMLESS. Said Grantee shall at all times keep and save the City free and harmless from
all loss, costs and expense to which it may be subject by reason of construction or maintenance. Provided,
however, that Grantee's obligations under this Section 5 shall not apply to any loss, cost, damage or claims
arising out of the negligence of the City, its employees or its contractors. Grantor shall indemnify, hold harmless
and defend the Grantee from any and all claims, losses or litigation which result from the Grantee's compliance
with this Ordinance. However, Grantor is not responsible for Grantee's negligent or intentional misconduct
associated with the provision of utility services.
SECTION 6. EXTENSIONS. Said Grantee shall construct and extend its electric distribution system within the
defined service are of said City, and shall furnish electric service to applicants residing in the defined service
area in accordance with applicable laws, rules and regulations.
SECTION 7. NONEXCLUSIVE FRANCHISE. Certain rights, power and authority herein granted, are exclusive
as to providing electricity and electric service in certain areas of the City of East Lansing as described in Exhibit
A. Otherwise, with respect to jurisdiction of East Lansing,this remains a nonexclusive franchise.
The exclusive right to service certain areas of the City of East Lansing as described in Exhibit A is a
condition concurrent to the collection and remittance of the Franchise Fee described in Section 2.As such
either party may terminate the exclusive right to serve upon 60 days prior written notice. Therefore, to the
extent either shall cease, both ceases.
SECTION 8. RATES. The rates and Rules and Regulations governing the supply and use of electricity shall be
the same as in the City of Lansing except that the rates shall be increased within the boundaries of the City by
the amount of any taxes, license fees,franchise fees, or any other charges against the Grantee's property or its
operations, or the production and/or sale of electrical energy, levied or imposed by the City or otherwise
incurred by Grantee as a result of this Ordinance.
Section 10. SERVICE AREA. To the extent permitted by law, Grantee shall furnish electric service to all
customers requesting such service within Grantee's service area or the non-exclusive area.
Section 11. FOOTE ACT FRANCHISE. Nothing herein shall be construed as either party rendering an opinion
or position of the Grantee's vested franchise rights under the Foote Act, 1905 PA 264. The City does not waive
any right to contest, and the Grantee does not relinquish any right to assert.
Section 12. GRANTEE RULES. The Grantee shall have authority to promulgate such rules,
regulations,terms and conditions governing the conduct of its business as shall be reasonably
necessary to enable the Grantee to exercise its rights and perform its obligations under this
franchise, and to assure uninterrupted serviceto each and all of its customers. Provided,
however,that such rules, regulations,terms and conditions shall not be in conflict with the
provisions hereof or of laws of the State of Michigan.
15
SECTION 13. EFFECTIVE DATE. This ordinance shall take effect upon the day after the date of publication
thereof; provided, however, it shall cease and be of no effect after thirty days from its adoption unless within
said period the Grantee shall accept the same in writing filed with the City Clerk. Upon acceptance and
publication hereof,this ordinance shall constitute a contract between said City and said Grantee.
Section 14. PUBLICATION AND ADMINISTRATIVE COSTS.The City shall assume the cost of publication of
this franchise. A BWL administrative charge of%z percent (0.5%) of collected franchise fees for the quarterly
billing will apply.
Section 15. SEVERABILITY. If any provision of this franchise is to any extent illegal, otherwise invalid, or
incapable of being enforced, such provision shall be excluded to the extent of such invalidity or
unenforceability; all other provisions hereof shall remain in full force and effect.
We certify that the foregoing Franchise Ordinance was duly enacted by the City Council on the day
of , 2017.
Mark S. Meadows, Mayor Marie Wicks, City Clerk
ACCEPTANCE
TO THE CITY COUNCIL OF THE CITY OF EAST LANSING, INGHAM COUNTY, MICHIGAN:
The LANSING BOARD OF WATER AND LIGHT hereby accepts the franchise granted to it by your City
Council on the day of , 2017, which said franchise is entitled as follows:
AN ORDINANCE, granting to LANSING BOARD OF WATER AND LIGHT, its successors and assigns,
the right, power and authority to in the defined service area construct, maintain and
commercially use electric lines consisting of towers, masts, poles, crossarms, guys, braces,
feeders, transmission and distribution wires, transformers and other electrical appliances on,
under, along and across the highways, streets, alleys, bridges, waterways, and other public
places,and to do a local electric business in the defined service area in the CITY OF EAST LANSING,
INGHAM COUNTY, MICHIGAN, for a period of thirty years.
LANSING BOARD OF WATER AND LIGHT
By:
Dated: 2017
UNFINISHED BUSINESS
There was no Unfinished Business.
NEW BUSINESS
None.
16
RESOLUTIONS
RESOLUTION 2017-05-02
Fiscal Year 2018 Operating and Capital Budget
RESOLVED,that the annual Operating Budget covering Fiscal Year 2018 is hereby approved as presented;and
RESOLVED, that the annual Operating Budget has been presented with a potential and estimated rate increase. The
potential and estimated rate increase is a projection and has not been approved through a public rate hearing process.
The potential and estimated rate increase will be reviewed and adjusted as necessary during a formal rate setting process
as per Lansing City Charter,Section 5-205 which refers to the BWL authority to set just and reasonable rates and defines
the public hearing process;and
RESOLVED,that the Fiscal Year 2018 Capital Budget is hereby approved as presented; and
RESOLVED FURTHER,that the Corporate Secretary be directed to make the appropriate filings with the Lansing City Clerk's
office in accordance with the Lansing City Charter regarding the above actions.
--------------------
Staff Comments: In accordance with the provisions of the Lansing City Charter,Article 5,Chapter 2,Section 5-203.5,staff
recommends an operating and maintenance budget of$267.3 million and a capital budget of$139.5 million for Fiscal Year
2018. The capital budget includes $50 million exclusively attributable to the new natural gas plant and the remainder
provides for on-going services to our utility customers and to sustain our plant facilities for future operations. Staff
recommends that the Finance Committee approve these budgets and resolution for presentation and adoption by the
Board at its May 23, 2017 board meeting.
Motion by Commissioner Ross, Seconded by Commissioner McCloud to approve the Resolution for the FY18 Operating
and Capital Budget
Action;Motion Carried
MANAGER'S REMARKS
General Manager Peff ley informed of the following:
Awards Received
• The Board of Water and Light(BWL) received and accepted an award from the Mid-Michigan Environmental
Action Council for its work in lead service.
• The BWL received the APPA RP3 Designation Diamond Award scoring 100 out of 100 and the designation of
Diamond for the second consecutive year. The level of designation represents the quality of a utility and is based
on industrial recognized leading practices in four leading disciplines—reliability,safety, workforce development,
and system improvement.
BWL in the Community
BWL is striving to get information about BWL into the community.
• TV campaign in January through March with ads about BWL's renewable portfolio and where the Board was
going.
17
• A booklet was made which tells a little bit about the Board and BWL history that can be handed out at
events.
• A general manager's roundtable will be started. BWL sent out 40 requests for people to sit on this round
table and is hoping to get 30 responses returned. The people will commit to three meetings over the next
year. The purpose of the round table is to present the BWL's programs and future to get feedback and
obtain ambassadors for the community. The makeup of this group are community leaders, business, labor,
educators and certain community groups. Some requests have already been returned.
BWL as the Utility of the Future
BWL is striving to become the utility of the future and is there in many ways with BWCs renewable portfolio, the
million-dollar transmission project,the new cogeneration plant,strategic plan, and IRP. Now the BWL needs to focus
on the workforce and how to get the workforce there. The executives and UIVIS,which is a contractor that BWL has
used in the past, have been working for six months to figure out how to transition this organization to the utility
future—the size,the process, and how things are aligned. Tomorrow morning this will be unveiled to the managers
and directors. This is just the first crack at this. Input will be sought from the managers as to whether this was the
correct way to organize a company. Mr. Peffley acknowledged the IT Depart for implementing two major programs
over the last weekend (new main frame and converted the entire company to Office 365).
Saturday June 3'd is Be a Tourist in Your Own Town
The water department will be open and have tours of the water plants. Volunteers are welcome.
COMMISSIONERS' REMARKS
Board Chair Price acknowledged and praised General Manger Peffley on all the things that are being done that
are a part of delivering water, steam, electricity and steam water. This is living up to our motto "Hometown
People, Hometown Power".
Commissioner Ross acknowledged the General Manager for his measures taken with the IT Department. His
concern was that there has been a very critical breach in security and this has put a focus on the IT operations.
Ilt is a commitment of Mr. Peffley's Administration to have that be the first part of going from good to great.
Board Chair Price recognized departing Commissioner Stuart Goodrich from Delhi Township for service to the
Board and invited everyone to join the Board of Commissioner for cupcakes and punch at the conclusion of
today's meeting in honor of Mr. Goodrich.
Commissioner Goodrich stated that his time of service has been interesting. He acknowledged GM Peffley and
Corporate Secretary Griffin for their work with the Board of Commissioners.
Commissioner Zerkle commended the Board for their First Step program.
Commissioner Louney commended Commissioner Goodrich for his professionalism and insight. He also
acknowledged the BWL staff on receiving the mentioned awards. Also, he invited everyone to help volunteer
with the SWAT team and help sign people up for the energy efficiency program.
MOTION OF EXCUSED ABSENCE
Excused Absence
Motion by Commissioner McCloud, Seconded by Commissioner Graham, to excuse Commissioner Thomas
from tonight's meeting.
18
PUBLIC COMMENTS
None
ADJOURNMENT
Chair Price adjourned the meeting at 6:08 p.m.
M.Denise Griffin,Corporate Secretary
Preliminary Minutes filed(electronically)with Lansing City Clerk 6-1-17
Official Minutes filed(electronically)with Lansing City Clerk: 7-27-17
19