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Home My WebLink About2018 Minutes BWL Approved by the Board of Commissioners 1-22-19 Hometown People.Hometown nAowec MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT November 13, 2018 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 13, 2018. Chairperson David Price called the meeting to order at 5:30 p.m. Present: Commissioners David Price, Beth Graham, Anthony McCloud, Anthony Mullen, Ken Ross, Tracy Thomas, and Sandra Zerkle. Non-Voting Commissioners present: Dion'trae Hayes (Lansing Charter Township), Douglas Jester (East Lansing), William Long (Delta Township). Absent: None The Corporate Secretary declared a quorum. Commissioner Thomas led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Ross, Seconded by Commissioner Zerkle, to approve the Regular Board Meeting minutes of September 25, 2018. Action: Motion Carried SPECIAL PRESENTATION General Manager Peffley introduced Bernie Porn who gave an update on the Epic MRA Employee Survey Results. As employee survey was conducted in 2015 from which positive results were received, BWL contracted with MRA to conduct another survey in 2018. A comparison of the responses from 2015 and 2018 was done. There were responses from 378 out of 701 employees and overall the ratings were more positive. Commissioner Ross requested a copy of the results be sent to the Commissioners. He also asked if the survey of the employees was voluntary and anonymous and whether open ended questions were asked. Mr. Porn responded that surveys were voluntary and anonymous and there were open ended questions. GM Peffley commented that the next steps will be presenting the slides to all departments and addressing the responses. He thanked Mr. Porn for all the work he did. Commissioner Zerkle asked why employees would not know what the competitive rates are compared to the other rates in the community as the information has been provided by public media. GM Peffley responded that rates are reviewed in safety meetings and he is unsure why employees would not know but will follow up with additional communications. Commissioner Long asked how the BWL compared with other companies in the survey response rate. Mr. Porn responded that a majority of the employees responded and that is very high as that seldom occurs in an organization. Commissioner Long also asked to what is the low percentage attributed and whether Mr. Porn thought that those who didn't respond were satisfied or not satisfied. Mr. Porn responded that the percentages obtained in the results would probably be similar as the responses are random. Commissioner Price thanked GM Peffley and Mr. Porn for the survey and stated that it is important for the Board to know how the employees feel about their employment at the BWL, their working environment and what the employees think can be improved. PUBLIC COMMENTS None. COMMUNICATIONS Electronic Mail received from: shadoww0lf@protonmail.com regarding One Touch Make Ready Policy - Referred to Management. Received and Placed on File COMMITTEE REPORTS COMMITTEE OF THE WHOLE Meeting Minutes November 6, 2018 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, November 6, 2018. Committee of the Whole Chair Sandra Zerkle called the meeting to order at 5:30 p.m. and asked the Corporate Secretary to call the roll. Present: Commissioners Sandra Zerkle, Beth Graham, Tony Mullen, David Price, Ken Ross, Tracy Thomas, and Non-Voting Member: William Long (Delta Township), and Douglas Jester (East Lansing) Absent: Commissioner Anthony McCloud and Non-Voting Member Dion'trae Hayes (Lansing Township) The Corporate Secretary declared a quorum. Public Comments None. Other A special presentation was made by General Manager Dick Peffley to Amy and Trevor Feinberg, participants and first place winners in Halloween in Old Town at Preuss Pets, who dressed up their greyhound as the Eckert Station with smokestacks and Hometown Power Dog slogan. Approval of Minutes Motion by Commissioner Graham, Seconded by Commissioner Mullen, to approve the Committee of the Whole meeting minutes of September 18, 2018. Action: Motion Carried. 2019 Regular Board Meeting Schedule Resolution Committee of the Whole Chair Zerkle presented a proposed Resolution setting the BWL Board of Commissioners 201 Regular Board Meeting Dates as directed by Section 1.1.2 of the BWL's Rules of Procedure. Motion by Commissioner Thomas, Seconded by Commissioner Graham, to approve the 2019 Regular Board Meeting Dates Resolution. Action: Motion Carried Michigan Public Power Agency (MPPA) Commissioner Appointment Resolution General Manager Peffley stated that the presented Resolution is naming James Mitchell as BWL's First Alternate MPPA Commissioner to replace Bradley Stoecker who resigned his position with the BWL effective October 1, 2018 and asked that the Resolution be forwarded to the full Board for consideration. Motion by Commissioner Ross, Seconded by Commissioner Thomas to forward the proposed MPPA Commissioner Appointment Resolution to the full Board for consideration. Action: Motion Carried Pole Attachment General Manager Peffley provided information on the pole attachment process and highlighted the following items: • BWL has roughly 32,000 distribution poles in our service territory, 42 contracting companies attaching to BWL poles in the BWL service territory, and over 130,000 third party contacts to our poles. • BWL has revenues of $582,982.28 for third party attachments and since January 1, 2018 BWL has received $70,323 in application fees from joint party attachments. • BWL currently receives $7.30 per pole attachment on an annual basis. There is little expense to the BWL to attach to the poles and BWL encourages pole attachment. • Since January 2018, 1600 new attachments on poles have been processed and as part of the BWL double pole elimination program since May 2018, BWL has 50 poles and counting ready to be pulled over the winter/spring. • BWL currently has over 80 EPRS (Emergency Pole Replacement Slips) processing. • Attachers sign agreements to use the poles and current pole attachers are notified if adjustments need to be made. Agreeable attachments do not always occur. • BWL would like to amend the agreements with the 42 contracting companies and claim the right to move the attachments if the companies do not agree to move. • Both Michigan and BWL are exempt from the recent FCC One Touch Make Ready order. Commissioner Price asked if a new attacher requests attachment to a pole who notifies the other attachers and what authority does the BWL have to move the attachers to make room for the new attacher. GM Peffley stated that the new attacher notices the other attachers and that the BWL has no authority to move the attachers with which new contracts haven't been renegotiated. BWL can move the attachers that don't meet current specifications. Commissioner Ross asked whether or not this would result in an amendment to the rate schedule, whether rate payers would be subsidizing this service, and whether data was available regarding whether this service would be provided in-house or with an outside partner. GM Peffley stated that the pole attachments would be revenue neutral to BWL customers and rules and regulations would not need to be addressed as $7.30 per year per pole has been established. GM Peffley also stated the service would be provided in-house unless it would be more proficient to hire a crew. Commissioner Ross inquired if there was a separate charge for attachment besides the current rate structure of $7.30 per pole. GM responded that a second charge was a back charge for the labor to make the pole ready and the new attacher is responsible for paying that charge. Commissioner Zerkle asked if there was a deadline for a company going out of business to remove their pole attachment. Ricky Thornton, Technical Systems Analyst for Customer Projects and Developments, responded that some deadlines are in place, and that arrangements are made to take the necessary attachments down. Commissioner Thomas inquired about the pole attachment process during the recent ice storm. GM Peffley responded that restoring electricity was the main concern during the ice storm. Easement Grant 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 along Canal Road to serve the new BWL combined cycle plant. The said easement grant request will be effective upon Lansing City Council's approval. Commissioner Mullen asked if gas was going to be purchased from Consumers Energy. GM Peffley responded that Consumers Energy owns the pipeline and will receive a fee for the pipeline. Gas can be provided by BWL or purchased from Consumers Energy. Commissioner Ross asked for a description of the location for the pipeline. GM responded that the easement is for property on Erickson. George Stojic, Executive Director of Planning and Development responded that a new city gate is being constructed and hits the service territory extending from Saginaw Hwy west of 96, south to General Motors property to Mt. Hope Street to the east and to Canal Street. Motion by Commissioner Price, Seconded by Commissioner Thomas to forward the proposed Easement Grant to Consumers Energy Resolution to the full Board for consideration. Action: Motion Carried. Enterprise Risk Management Update GM Peffley introduced George Stojic who stated that two projects were underway, the Enterprise Risk Management Strategy and Asset Management. Mr. Stojic introduced Brandie Ekren, General Counsel for the Board of Water and Light, who spoke about Enterprise Risk Management Strategy 5, Objective 4 from the Strategic Plan which was approved in 2016. Ms. Ekren stated that program basics were a structured, consistent, and continuous process across an organization for identifying, assessing and deciding on responses to and reporting on opportunities and threats that affect the achievement of the organization's objectives. Ms. Ekren highlighted the summary tasks of quality assurance, engagement, and responsibility and accountability. Ms. Ekren proposed an ERM program as a 2020 milestone goal, to be approved in March 2019, that will include risk management coordinated across business areas, management performance and analysis tools, monitoring, strategy setting and scenario planning, and reporting responsibility. Task 5AC: L 13WI Strategir.Plan 201 Cr2020 __. _ _-. __... Assign responsibility and accountability to employees Siran1y 5,Obl-1-4; t,tifizinga system toanalyzeand Yeasurethe paxess Enterprise Risk Management Po� rrtelfenreby...ringowmkplareermmvnrmlhmreek,feeh...erwrrnl in terms of risk toaSseLs,safet and customers. pr.,iro with the inrom of adronq whir, ring imam ummhr,end ircr d 'fl;r n LANSING WATER&LIGHT 'Triter prise Management" ..�—'---- ...............O0ARO OF_..._ ..._......-....._....... Summary Tasks: 'E P Commute n/the whale Update G,2019 1.Oustlry Auumntt November E.E"EaR•^""' a R«wu^xlmfty a nrxx,um.wrny Task 5.4C Program Development-Enterprise Ruk Management. A..Ign r.apnndbRiry end nnmmtnhlGry to employeea tRilixing a.yxtnm m Basics annl yre nnA measure the process in rermt of rf+4 m nsEtm,nnlrry and rustomerc. Enterprise Risk Management -Benefits A Yl rnaar nd.cane;arem,aml o,mimma>Preens ar,nra an ar�,ni:,,rrrn Im id, Vyi. yand dcriA ng nn«,I drgT«ngon np>n«un ers LP� JLi. r d d..d ood �I.i.. %ndlhr< -11 t II tlr aanrvernrni dos.ny:raR nn's objrll voYflntdtarn o/ trrrarAadanr..) R 'soiree.ry r,,,n,,..�Rl rl„ra,w. r r ar,rrn,.bp.o-n.. 2020 MILESTONE GOAL InEvlwre. .9nrul.uJu,•bu+nr.0 pax.,m s,rnd rollobo,on elfauc Ia Inrcpmtr +ClwrvMrramndlnq of 4ny Luilnrss drkr,.nscwunrd risk mv'aR<mn^t Establish and Implement a Comprehensive Enterprise Risk rick ryvernence,in<'.Iudingsuvtrgic de ,on making ond,.,k ov,rsight; +Ppnrxhws,and lwnk of effrv.ti..nns. Management Program risk intro ue endm naEemene,including drni;piny,implemnminR and •Nnkm naRenu,nI 6M,,( dwdh:nd.<Isiunma4rya 1,, l,e,.e>al all hrvernd man.c.nrrE'� furflr:stive rrtk progro -h;d try rx.<utive rnanaµ.-meet,anti dr"r .mv4;nq rkk rr rchlp,a'lhr idcnnlymn,n enrwina-mandwing,ondrvPrnmgof .Inuenvdaswu!bnal rflkk_a,..mlu I0 Id',color Balanced,friteltigen r&Integrated tPe&'Aks,4.M by rho busrmavnirc_ (aevdinonon et an,n;rfiratr•d renpnn.a In rempfiartre revahrrnena ENTER—SE RISK MANAGEMENT-NIURt rMfrf�pir WnMnapavMserbW Program Development-Enterprise Risk Management- PCApMAP nwt�'-nrre'AnnrAt+n+En'(1..rr,rnrwerrar. 13clan ed and I ite.illEent •'+rM.Prn.etr.+rearnr+!"n'e^r ENTERPRISE RISK MANAGEMENT-TOURNEY TO GATE Irw rv,,er rxv Iru,R W4vrc 4 5 'rh rtlan rat Iltr La YanJ 1 P Y n,rt'd hA.t. cu, 1 1 ,Y✓<•+nand, ' TN h m'cMq •N ♦4aM E.aE,tle ✓YKer'., N.�,+-.a,r Strer,Yf I!!r aeg4lu'"w:rtrrk July Pcv,xaf H,sk REgrstsr , A. •Iy _ '� _ S,1 seu Pl [anJ[ollal ra mn At.<.tM Remcrc,Nev:Pianl .r,.n...w•:rra wNYnP41 t V 1 rnW Whid,err. Y �a'rr jy—y r. . ,.� "' �....-. -•.,. xvtr a„urrr.rrmVR,..i.ran oN Epl tG:n ' rnwrn.rrluo..n Mrn.mvpnagrRw tWakr.prrjwnn Commissioner Zerkle asked what part the Internal Auditor plays in risk management. Ms. Ekren responded that the Internal Auditor may provide information. Commissioner Ross asked whether BWL had an outside consultant that is familiar with complex organizations and utility space for the infrastructure. Ms. Ekren responded that BWL's outside consultant is Marsh Consulting and they have helped with setting up the risk assessment and finding out what other utilities are doing. Commissioner Ross commented that having someone accountable for identified risk is critically important and welcomed Ms. Ekren to speak again to the Commissioners about the infrastructure of the Enterprise Risk Management program as it progresses. Commissioner Mullen commended Ms. Ekren on her presentation and asked for an example of a risk and how the risk would be managed. Ms. Ekren responded that the asset management presentation that follows will provide the comparative benefits of managing risk and not managing risk. Ms. Ekren also provided for an example a qualified work force and succession planning, and ensuring that employees are qualified to take on jobs and are trained to be able to do the job. Commissioner Jester asked whether risk to customer satisfaction, risk to reputation or predominately risk to physical and financial operational risks were being assessed. Ms. Ekren responded that a variety of risks were being assessed including all of those stated in the question. Commissioner Jester also asked what new risks were identified. Ms. Ekren responded that what the utility would look like in the future, and also recognizing communication and information as an asset were two new risks that were identified. Commissioner Ross asked whether people understand what the organizational risk tolerance is for an activity, how activities are calibrated to risk presented and how much risk is tolerated. Ms. Ekren responded that a baseline of risk has been established but there is no uniform standard and more insight will be provided in March 2019 at the Committee of the Whole meeting. Commissioner Zerkle commented that instead of saying what is the risk, say what is the problem and what is the solution. Ms. Ekren stated that that is the reason there is a focus on creating a uniform definition and the objective of what is getting in the way of the stakeholder realizing the value. Asset Management Update Dave Bolan, Executive Director of Operations, introduced Jerry Flore, Asset Management Manager, who presented a video of the Asset Management Journey and gave an update on some current initiatives. Mr. Flores stated that another update will be provided in March 2019. Mr, Bolan agreed with Ms. Ekren's proposal to walk through actual scenarios of how assets are classified as critical and the risk they pose to the organization if they are not properly maintained or replaced in a timely manner.This will be done at the March 2019 COW. Asset Management Update Asset Management Update -W Asset Management Update Asset Management Update Presentation Presentation Objectives Strategy 3:Effectively Acquire and Manages Resources 1.Overvi—al Strategic Plan AM ObI-I—s Board of Conwissioners COW Meeting 2.M.—Iles Asso1 I4ana9anwnl J-may(vslva1randoul) , Nvmmber 9•.2018 3.Why W 150 55000 C,rrpham? 4.Presonl aWL's Asset Management Plan Asset Management Update Asset Management Update Asset Management Update -� �.�:�..� aJ 21 arw2.2 ftemV4.beat practices ary the basis t,ISO 55000.(PAS�55) Z.f'u'3;"urtcnlatr Arsci S?an.:gcrtcnt panacha What is Asset Management? 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Asset Management Update Asset Management Update . - s;,.,, . , .,., o:e�r•r' ,, r ---.nurse_ i cod l«3(Iln , G.d ..:.:.n.Y••«+n., In tY«a SY "• nn� Asset Management Update Asset Management Update Asset Management Update VWE22. SN .....n.,Y.�.,.r.. Clmvoras-St«H«Ocvy mta I« oaenooaas: n c' rmF«d«a wal ru+fN erns eai a,ewh EvP d tiwra: Od(WS)-Sn.w«c.W.—n k. Hap Mau! ® @oaN o/Commisslonen mwt ne«nwan ertl pKwpear r'"" •.••.••,.•. _• • e—.- ` As k•h ppoe' tIh AaulM 1 d ob�Gwadders.su .p a anagwrwnt Spa r an • � �! ",y.,. _ �i Aaap Manavemem •'.�., � .f r � "� � —_ ..• � �.)-�—_—_� eonnnued commurueafioneNpdabe ro lh•9oaN(•v n•rl Marts) Commissioner Price asked about the demographics on the heat map and Mr. Flore responded that more main breaks occur where there is red on the map. Commissioner Ross asked three questions: where is the BWL at in the asset management process; at what time will BWL be at the maturity level for asset management; and will this result in additional reporting and greater transparency. Dave Bolan responded that the BWL is in the process of deciding how some of the elements will be applied and has decided on how some elements will be applied and implementing those elements; BWL is scheduled to be at Maturity Level #3 at the end of 2020; and that a capital budget is created, an investment is made which removes risk, and assets are managed based on their criticality. Commissioner Ross also asked if the risk is only for physical assets. Mr. Bolan responded that scores and measurements are made for all potential risks. Commissioner Price inquired if trees as a risk was a good characterization of asset management and Mr. Bolan concurred. Commissioner Price also asked whether the report in March 2019 will have the information integrated into the budget planning. Mr. Flores responded that a draft risk matrix to develop a process for the capital budget projects is in progress. Commissioner Zerkle inquired whether the Internal Auditor is included in the discussions for asset management. Internal Auditor Phil Perkins responded that he has some involvement with the project and added that there are two factors to consider, the probability of risk and the impact of an occurrence. Commissioner Zerkle asked whether the human factor was to be considered for asset management. GM Peffley stated that is another area and another department has been created for that. Commissioner Long commented that the human factor had been mentioned under Enterprise Risk Management. He also thanked GM Peffley for sharing the MPPA presentation. Commissioner Jester asked what the focus was on for demonstrating to the staff that asset management has value. Mr. Flore responded that a pilot program was conducted in which work orders were run to validate software functionality. Commissioner Jester stated that BWL has a number of assets and he would like this be in the budget process. Other Motion by Commissioner Graham, Seconded by Commissioner Ross, to excuse Commissioners Anthony McCloud and Dion'trae Hayes from tonight's meeting. Action: Motion Carried Commissioner Price informed the Commissioners that there will be a ceremony to honor veterans at 11:00 am on Friday at the REO Depot and that he will be playing drums along with his pipe major during the event. Adiourn Motion by Commissioner Price to adjourn the meeting. Meeting adjourned at 7:24 p.m. Respectfully Submitted Sandra Zerkle, Chair Committee of the Whole FINANCE COMMITTEE Meeting Minutes November 6, 2018 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 7:31 p.m. on Tuesday, November 6, 2018. Finance Committee Chair Ken Ross called the meeting to order at 7:31 p.m. and asked that roll be taken. Present: Commissioners Ken Ross, Beth Graham, Tony Mullen, and David Price. Also present: Commissioners Tracy Thomas, and Sandra Zerkle, and Non-Voting Commissioners Bill Long (Delta Township), and Douglas Jester (East Lansing). Absent: None The Corporate Secretary declared a quorum. Public Comments None Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner Mullen, to approve the Finance Committee meeting minutes of September 18, 2018. Action: Motion Carried. September YTD Financial Summary Financial Manager, Scott Taylor, presented the following: Pinancial Summary-September 2018 n„r , Cash Income Statement Y1 D Ratios Employee Data Budget Status YFD cpaa eaxarroiE.rmu".cs.,.w...n.,xi •,.,..,.,..,.......,...._.�..,...,..r.....,...,,_., r rr..n,rr ,....... r r....a r,. C,Ivus ryrym.r,- n n, oay.iui., >irif Return on Assets Cash is up $4 million dollars from last month due to the time of year and days cash on is also strong. The Income Statement YTD indicates more than $5 million in revenue, operating expenses are a little under— which is normal for this time of year, and the budgeted net income is holding at $20 million. Budget Status YTD indicate that some of the initiatives aren't off to full speed yet. Because of the Erickson outage some money was shifted for spending from September to October. The Capital Budget YTD for the new power plant is going well and also Return on Assets. Operating Ratios, Current Ratios, and Debt to Total Assets are all strong. Although Days Sales Outstanding is in the red it is similar to last year. Bad debt is continuing to be tracked. In Employee Data the employee count has decreased due to 11 interns returning to school. Payroll data is on track even though overtime is a little high due to transition in the work forcer Due to good claims experience this year benefits costs are down. GM Peffley commented on the Erickson turbine outage. Erickson was allotted $4 million and if the outage had gone over that amount the turbine would not have been put back together. Commissioner Thomas commented that the next items include amendments to plan documents that usually are addressed in an HR Committee Meeting. The amendments do not propose to make changes to any benefits or plan designs and because they are primarily intended to facilitate changes to the investment policy statement they are included with the proposed investment policy statement changes. Defined Contribution and Deferred Compensation Plan Updates Scott Taylor introduced Plante Moran Financial Advisors, BWL's new advisors for the two 401(a) plans and the 457(b) plan. Mr. Taylor stated that the changes being made in the plans are for management of plan assets. The changes are similar to those made in the VEBA and DB plans in September 2018, The two 401(a) plans replaced the Defined Benefit Plans. The plans are employer contribution only and are based on a percentage of wages. The 457(b) plan is a deferred compensation plan which employees can contribute. BWL will contribute $1,000 each year in January and will match up to $1,500 more per year. Commissioner Zerkle asked if the 457 plan was a pre-tax plan. Mr. Taylor responded that employees have a pre-tax and a Roth option in the 457 plan. Mr. Taylor explained that all three plans are set up in a similar fashion and each plan has a single document that is the plan and trust agreement. The plan portion of the document talks about the administration of the plan, defines the benefits and defines the eligibility. The trust portion of the document is about managing the investments. Management has carried out trustee functions on the trustees' behalf and although this is accepted practice, the change is being requested due to advice by counsel to make it more explicit that delegation by trustees was appropriate and clearly stated. The following recommendations for which management seeks approval are: the addendum to the three plans makes it clear that the trustee authority can be delegated; revision of the investment policy statement to add language that clearly lists the authority that is being delegated to the Retirement Plan Committee (RPC); and the clear delegation by resolution to the RPC. Motion by Commissioner Price, Seconded by Commissioner Mullen, to approve the changes to the 401(a) Defined Contribution Plans and the 457(b) Deferred Compensation Plan and forward them to the Trustees and Board for approval. Action: Motion Carried Commissioner Long asked what attributed to the lesser extent of repair than expected on the Erickson turbine. GM Peffley responded that turbine outages are done every seven years or 50,000 hours and the Erickson was right on schedule. GM Peffley stated that plant staff did an excellent job of operating the machine over the last seven years. Internal Audit Status Report Internal Auditor Phil Perkins presented the following status report: W Overview FY 2019 Audit Plan Progress Report Ennanemenls Completed: • FY 2019 Audit Plan Progress Report 1. Pnysical Sewnly Audd(FYtO carryover) 2. Contract 81gnaturo Authority Compliance Audil(FY10 carryover) Internal Audit Status Report • Continuing Professional Education Status 3 Customer Arrangements d Thbd Party Payments Audit(FYtO ulrryover) 4. surprise Cash Count#1 Presented by: 5. Employee Time Reporting Review#1 Phil Perkins,Director of Internal Audit Finance Committee Meeting November 2018 W.L FY 2019 Audit Plan Progress Report,cont'd Continuing Professional Education/ Certification Status Ennanements in Prnares FY 2019 Audit Plan Progress Report,Cont'd 1 Director of Internal Audit: 1. Change Management Fallow-up Audit-75%complete Remaining Enflagements: On target to complete all CPE requirements for CPA,CIA 2. Metering Services Audit•25%complete 1. IT Cybe--ity Audit and CISA designations this year. CPE will be reported to proper authorities so that 3. COBIT Compliance Follow-up Audit-25%mmplete 2. Vegetation Management Audit certifications(and In the case of CPA,Ilcensure)will be 4. Asset Management Consulting 3. Procurement Audit maintained through 2018 and beyond. ag g-underway.ongoing. 2. Senior Internal Auditor: 4. OSMART and Other Oiganizalional Change Management- On target to complete annual CPE requirements for CPA Upcoming Enoaaemenls: Consulting designation. 1. Accounts Payable Audit-start December 2018 5. Surprise Cash Count#2 In progress toward completing requirements for Certified Inormalion Sysloms Auditor(CISA)designation. }2 Project Engineering Audit-start January 2019 e, Time Reporting Review#2 1t r: X Other Scott Taylor requested that the Commissioners bring their Pension Trustees binders to the Trustee Meeting in order that updates that are being approved can be placed in the binders. Adiourn Commissioner Ross adjourned the meeting at 8:05 p.m. Respectfully submitted Ken Ross, Chair Finance Committee RESOLUTIONS/ACTION ITEMS RESOLUTION 2018-11-01 2019 Regular Board Meeting Schedule 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 2019 as follows, unless otherwise notified or as a result of date conflicts with rescheduled City Council meetings: 2019 Lansing Board of Water& Light Board of Commissioners Regular Board Meeting Schedule Tuesday January 22 Tuesday March 26 Tuesday May 28 Tuesday July 23 Tuesday September 24 Tuesday November 19 Meetings will be held in the Lansing Board of Water & Light REO Town Depot located at 1201 S. Washington Ave., Lansing, MI at 5:30 p.m. RESOLVED FURTHER, that a notice of the meeting schedule shall be published in a newspaper of general circulation in Ingham County the week of January 1, 2019. Motion by Commissioner Thomas, Seconded by Commissioner Graham to approve the 2019 Regular Board Meeting Dates Resolution. Action: Motion Carried. RESOLUTION 2018-11-02 Amending Appointment to Michigan Public Power Agency WHEREAS, Robert Lalonde is the Michigan Public Power Agency (MPPA) Commissioner on behalf of the Lansing Board of Water& Light (BWL), along with Bradley Stoecker and Constance Carantza, who serve as First and Second Alternate Commissioners, respectively; and WHEREAS, Bradley Stoecker resigned his position with the BWL effective October 1, 2018; and WHEREAS, James Mitchell has served as the BWL's Bulk Power Trading Supervisor for approximately 4 years; and WHEREAS, it is appropriate and in the best interest of the BWL to name a replacement for the BWL's First Alternate on behalf of the BWL. NOW, BE IT RESOLVED, that Robert Lalonde will remain as the MPPA Commissioner on behalf of the BWL. FURTHER RESOLVED, that Constance Carantza will remain as the Second Alternate Commissioner. FURTHER RESOLVED, that James Mitchell is named as BWL's First Alternate MPPA Commissioner. Motion by Commissioner Zerkle, Seconded by Commissioner Mullen, to approve the Amending Appointment to Michigan Public Power Agency Resolution. Action: Motion Carried. RESOLUTION 2018-11-03 Amendment of Defined Contribution Plan Number 106696; Revised Investment Policy Statement; and Delegation of Authority. WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the ICMA Retirement Corporation Governmental Money Purchase Plan &Trust Number 106696 (the "Defined Contribution Plan Number 106696"); and WHEREAS, the Sponsor wants to amend Defined Contribution Plan Number 106696 for the purpose of enabling the Trustees to delegate certain investment authority to the Retirement Plan Committee (the "Committee") of Defined Contribution Plan Number 106696, and for the purpose of changing the name of Defined Contribution Plan Number 106696. THEREFORE, it is: RESOLVED, that the Sponsor approves and adopts the Addendum Number 1 to Defined Contribution Plan Number 106696, effective as indicated therein. FURTHER RESOLVED, that, after its review and based on a recommendation from management, the Sponsor adopts and approves the attached Lansing Board of Water and Light Defined Contribution Plan and Trust 1 Statement of Investment Policies, Procedures and Objectives. FURTHER RESOLVED, that the Sponsor acknowledges that the Trustee (also known as Trustees) intends to delegate to the Lansing Board of Water and Light Retirement Plan Committee certain duties relating to the investment of Lansing Board of Water and Light Defined Contribution Plan and Trust 1 assets. The Sponsor does not delegate to the Committee authority to amend, freeze or terminate the Lansing Board of Water and Light Defined Contribution Plan and Trust 1. FURTHER RESOLVED, that the Sponsor indemnifies and holds harmless each member of the Committee from and against all liability of any kind, including, without limitation, court costs, attorneys' fees and other expenses that arise from any legal or administrative proceeding of any kind that is brought by any person, entity or government agency in connection with the Committee's discharge of its duties relating to the Lansing Board of Water and Light Defined Contribution Plan and Trust 1; provided, however, that this indemnification shall not apply with regard to any proceeding in which a Committee member is found to have been grossly negligent or to have violated a law or committed a crime. Motion by Commissioner Ross, Seconded by Commissioner Graham to approve the Resolution for amendment of Defined Contribution Plan Number 106696 by adoption of Addendum; Revised Investment Policy Statement; Delegation of Authority; and Indemnification. Action: Motion Carried RESOLUTION 2018-11-04 Amendment of Defined Contribution Plan 108824; Revised Investment Policy Statement; and Delegation of Authority. WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the ICMA Retirement Corporation Governmental Money Purchase Plan &Trust Number 108824 (the "Defined Contribution Plan Number 108824"); and WHEREAS, the Sponsor wants to amend Defined Contribution Plan Number 108824 for the purpose of enabling the Trustees to delegate certain investment authority to the Retirement Plan Committee (the "Committee") of Defined Contribution Plan Number 108824, and for the purpose of changing the name of Defined Contribution Plan Number 108824. THEREFORE, it is: RESOLVED, that the Sponsor approves and adopts the Addendum Number 1 to Defined Contribution Plan Number 108824, effective as indicated therein. FURTHER RESOLVED, that, after its review and based on a recommendation from management, the Sponsor adopts and approves the attached Lansing Board of Water and Light Defined Contribution Plan and Trust 2 Statement of Investment Policies, Procedures and Objectives. FURTHER RESOLVED, that the Sponsor acknowledges that the Trustee (also known as Trustees) intends to delegate to the Lansing Board of Water and Light Retirement Plan Committee certain duties relating to the investment of Lansing Board of Water and Light Defined Contribution Plan and Trust 2 assets. The Sponsor does not delegate to the Committee authority to amend, freeze or terminate the Lansing Board of Water and Light Defined Contribution Plan and Trust 2. FURTHER RESOLVED, that the Sponsor indemnifies and holds harmless each member of the Committee from and against all liability of any kind, including, without limitation, court costs, attorneys' fees and other expenses that arise from any legal or administrative proceeding of any kind that is brought by any person, entity or government agency in connection with the Committee's discharge of its duties relating to the Lansing Board of Water and Light Defined Contribution Plan and Trust 2; provided, however, that this indemnification shall not apply with regard to any proceeding in which a Committee member is found to have been grossly negligent or to have violated a law or committed a crime. Motion by Commissioner Ross, Seconded by Commissioner Graham to approve the Resolution for amendment of Defined Contribution Plan Number 108824 by adoption of Addendum; Revised Investment Policy Statement; Delegation of Authority; and Indemnification. Action: Motion Carried RESOLUTION 2018-11-05 Amendment of Lansing Board of Water& Light 457 Deferred Compensation Plan; Revised Investment Policy Statement; and Delegation of Authority• WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the ICMA Retirement Corporation 457 Governmental Deferred Compensation Plan and Trust Number 300435 (the "457 Plan"); and WHEREAS, the Sponsor wants to amend the 457 Plan for the purpose of enabling the Trustees to delegate certain investment authority to the Retirement Plan Committee (the "Committee") of the 457 Plan Trust, and for the purpose of changing the name of the 457 Plan. THEREFORE, it is: RESOLVED, that the Sponsor approves and adopts the Addendum Number 1 to the 457 Plan, effective as indicated therein. FURTHER RESOLVED, that, after its review and based on a recommendation from management, the Sponsor adopts and approves the attached Lansing Board of Water and Light 457 Deferred Compensation Plan and Trust Statement of Investment Policies, Procedures and Objectives. FURTHER RESOLVED, that the Sponsor acknowledges that the Trustee (also known as Trustees) intends to delegate to the Lansing Board of Water and Light Retirement Plan Committee certain duties relating to the investment of 457 Plan assets. The Sponsor does not delegate to the Committee authority to amend, freeze or terminate the 457 Plan. FURTHER RESOLVED, that the Sponsor indemnifies and holds harmless each member of the Committee from and against all liability of any kind, including, without limitation, court costs, attorneys' fees and other expenses that arise from any legal or administrative proceeding of any kind that is brought by any person, entity or government agency in connection with the Committee's discharge of its duties relating to the 457 Plan; provided, however, that this indemnification shall not apply with regard to any proceeding in which a Committee member is found to have been grossly negligent or to have violated a law or committed a crime. Motion by Commissioner Ross, Seconded by Commissioner Thomas, to approve the Resolution for amendment of the 457 Plan by adoption of Addendum; Revised Investment Policy Statement; Delegation of Authority; and Indemnification. Action: Motion Carried THE REGULAR BOARD MEETING RECESSED AT 6:07 P.M. FOR THE ALLOWANCE OF THE ANNUAL PENSION FUND TRUSTEES MEETING. THE REGULAR BORD MEETING RECONVEYNED AT 6:54 P.M. SUMMARY REPORT LANSING BOARD OF WATER & LIGHT PENSION FUND TRUSTEES MEETING November 13, 2018 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 6:07 P.M. (Officially Publicly Noticed for 5:35 P.M.) on Tuesday, November 13, 2018. Chairperson David Price called the meeting to order at 6:07 p.m. and asked the Corporate Secretary to call the roll. Present:Trustees Beth Graham, Anthony McCloud,Tony Mullen, David Price, Ken Ross,Tracy Thomas, and Sandra Zerkle. Absent: None and a quorum was declared. Public Comments None. Approval of Minutes Motion by Trustee Mullen and Seconded by Trustee Graham to approve the minutes from the November 14, 2017 Pension Fund Trustees' Annual Meeting, Action: Motion Carried Defined Benefit Plan Information RESOLUTION 2018-11-06 Revised Lansing Board of Water& Light Defined Benefit Plan for Employees' Pensions Statement of Investment Policies, Procedures and Obiectives WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the Lansing Board of Water & 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 Motion by Trustee Mullen, Seconded by Trustee Graham to acknowledge the Revised DB Investment Policy - Statement. Action: Motion Carried Post-Empioyment Benefit Plan Information RESOLUTION 2018-11-07 Revised Post Retirement Benefit Plan for Eligible Employees of Lansing Board of Water& Light Statement of Investment Policies Procedures, and OVectives WHEREAS, the Board of Water and Light (the "Sponsor") sponsors the VEBA (Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of Water & 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. Motion by Trustee Zerkle, Seconded by Trustee Graham, to acknowledge the Revised Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of Water & Light of Investment Statement of Investment Policies, Procedures and Objectives. Action: Motion Carried Defined Contribution Plan Information RESOLUTION 2018-11-08 Amendment of Defined Contribution Plan Number 106696• Delegation of Investment Authority WHEREAS, the individual voting members of the Board of Commissioners for the Lansing Board of Water and Light serve as the trustees (collectively,the "Trustees") of the ICMA Retirement Corporation Governmental Money Purchase Plan &Trust (the "Defined Contribution Plan Number 106696"); and WHEREAS, the Trustees and the Lansing Board of Water and Light want to amend Defined Contribution Plan Number 106696 for the purpose of enabling the Trustees to delegate certain investment authority to the Retirement Plan Committee (the "Committee") of Defined Number 106696. Plan 6 Number 106696, and for the purpose of changing the name of Defined Contribution THEREFORE, it is: _ RESOLVED, that the Trustees consent to the adoption of Addendum Number 1 to Defined Contribution Plan Number 106696 effective as indicated therein. FURTHER RESOLVED, that, after reviewing the attached Lansing Board of Water and Light Defined Contribution Plan and Trust 1 Statement of Investment Policies, Procedures and Objectives (the "IPS"),the Trustees acknowledge said IPS, effective as indicated therein. FURTHER RESOLVED, that the Trustees delegate to said Committee authority to perform the investment functions that are assigned to the Committee in the IPS, a copy of which is e effective as set attached forth hereto IPS.and incorporated herein by reference.The delegation of said authority shall b FURTHER RESOLVED, that the Trustees indemnify and hold harmless each member of the Committee from and against all liability of any kind, including, without limitation, court costs, attorneys' fees a other expen ores that arise from any legal or administrative proceeding of any kind that is brought by any person, government agency in connection with the Committee's discharge of its duties that are described in the attached IPS; provided, however, that this indemnification shall not apply with regard to any proceeding in which a Committee member is found to have been grossly negligent or to have violated a law or committed a crime. Motion by Trustee Zerkle, Seconded by Trustee Graham to acknowledge Adde Resolution for endum; Acknowledgment of amend PS;nt of Defined Contribution Plan Number 106696 by Board adoption of Delegation of Authority; and Indemnification. Action: Motion Carried RESOLUTION 2018-11-09 Amendment of Defined Contribution Plan Number 1088241 Delegation of Investment Authority f Water WHEREAS, the individual voting members of the Board of Commissioners oaGovoerrd nmental d Light serve as the trustees (collectively, the Trustees ) of the ICMA Retirement Corporation Money Purchase Plan &Trust Number 108824 (the "Defined Contribution Plan Number 108824"); and WHEREAS, the Trustees and the Lansing Board of Water and Light want to amend Defined Contribution Plan Number 108824 for the purpose of enabling the Trusteesefed Contribution Plan Number 108824,oand for the rity to the Retirement Plan Committee (the "Committee") of purpose of changing the name of Defined Contribution Plan Number 108824. THEREFORE, it is: RESOLVED, that the Trustees consent to the adoption of Addendum Number 1 to Defined Contribution Plan Number 108824 effective as indicated therein. FURTHER RESOLVED, that, after reviewing the attached Lansing Board of Water and Light Defined Contribution Plan and Trust 2 Statement of Investment Policies, Procedures and Objectives (the "IPS"), the Trustees acknowledge said IPS, effective as indicated therein. FURTHER RESOLVED, that the Trustees delegate to said Committee authority to perform the investment functions that are assigned to the Committee in the IPS, a copy of which is attached hereto and incorporated herein by reference.The delegation of said authority shall be effective as set forth in the IPS. FURTHER RESOLVED, that the Trustees indemnify and hold harmless each member fees and of the Commiother ttee from and against all liability of any kind, including, without limitation, court cos person, entity expenses or that arise from any legal or administratithe committee's discharge ofe proceeding of any kind t is its duties that areht by ydescribed in the government agency in connection with I with regard to any proceeding in attached IPS; provided, however, that this indemnification shall not apply which a Committee member is found to have been grossly negligent or to have violated a law or committed a crime. solution for Motion by Trustee Zerkle, Seconded by Trustee Graham to on of acknowledge Acknowledgment of amendment of Defined Contribution Plan Number 108824 by Board adoption of Delegation of Authority; and Indemnification. Action: Motion Carried RESOLUTION 2018-11-10 Amendment of Lansing Board of Water& Li ht 457 Deferred Com ensation Plan Acknowled ement of IPS- De le ation of Investment Authorit - Indemnification WHEREAS, the individual voting members of the Board of CommissionersRetirement the Lansing Corporation f Water and Light serve as the trustees (collectively, the Trustees ) of the ICMA Governmental Deferred Compensation Plan and Trust Number 300435 (the "457 Plan"); and WHEREAS, the Trustees and the Lansing Board of Water and,LLigh t w nt tR amen the P an7Comm tree Plan for the purpose he of enabling the Trustees to delegate certain investment authority "Committee") of the 457 Plan Trust, and for the purpose of changing the name of the 457 Plan. THEREFORE, it is: e adoption of Addendum Number 1 to the 457 Plan effective as RESOLVED, that the Trustees consent to th indicated therein. FURTHER RESOLVED, that, after reviewing the attached Lansing P°ocedureerd of s and Objecter and gtives ht (t e 11IpSe)the Compensation Plan and Trust Statement of Investment policies, Trustees acknowledge said IPS, effective as indicated therein. stment perform the i FURTHER RESOLVED, that the Trustees delegate to said Committee of which authority to h eto and incorporated functions that are assigned to the Committee in the IPS, a copy herein by reference.The delegation of said authority shall be effective as set forth in the IPS. ee FURTHER RESOLVED, that the Trustees indemnify and hold harmless eachtt e ber fees of the Corn hertexpeonseS nd against all liability of any kind, including, without limitation, court cos , person, entity or that arise from any legal or administrative proceeding of any kind that is brought by any p government agency in connection with the Committee's discharge of its duties that are described in the in attached IPS; provided, however, that this indemnification shall not apply with regard to any proceeding which a Committee member is found to have been grossly negligent or to have violated a law or committed a crime. — Motion by Trustee Zerkle, Seconded by Trustee Graham, to acknowledge De egat on of�nvestment Authority; n for amendment of the 457 Plan by Board adoption of Addendum; Acknowledgment of and Indemnification. Action: Motion Carried Supplemental Information Chief Financial Officer Heather Shawa introduced George Tarlas, Senior Managing Director with ACG Asset Consulting Group, who presides over the DB and VEBA plan advisors and provided a market overview of the DB and VEBA plans; Sandra Rouse-Thames, Retirement PIan Specialist Iwho provilsa ded a participant eDducat oonfreview Relationship Management from ICMA-the DC Plan adminstraor, so from ICMA; and Steven Gibson, Senior Consultant with Plante er °ran-the DC r David Houselr, and Financial Analystn advisors. Ms. aKylle acknowledged, Finance Manager Scott Taylor, Finance Supervisor Page for their work on the Trustee packet and audit overview. Trustee Ross asked if the cumulative return value was from the stale date o present,awa and responded that an the explanation of the index in the narrative that is comparable to the investments y cumulative return was from the start date to the present, and wth ndexr. swhiponded that h has a growth and palue style. growth stocks are selected and the benchmark is the Russell 1000 g Trustee Ross also asked whether BWL has evaluated whether it made more sense to do index investing to save fees as some of the stock selections have beat the index and others have not. Ms. Shawa responded BWL is working with ACG Consulting and they will be examining the different options throughout the next year. Trustee Ross thanked Ms. Shawa for the dashboard and the amount of information provided. Trustee Zerkle commended the Board and the ICMA representatives for the retirement program provided to the employees. Trustee Thomas thanked the ICMA representatives for their excitement, motivation, and enthusiasm. Trustee Ross asked for an explanation of the asset allocation for the plans and the side by side comparison between employees and other participants. Ms. Shawa responded that the participants are more educated when it pertains to their personal investment strategies. Ms. Rau makes the deco responded ded t at alot of fee. employees select the managed accounts tool where Morningstar plans. Trustee Ross also inquired as to why the asset allocation totaled more than 100 percent for the 401(a) p Ms. Rouse-Thames responded that they will look into that and provide the information to the Trustees. Trustee Zerkle asked if there were guidelines for loans that employees take out of the 401(a) plans. Ms. Shawa responded that the 457(b) plan allows an emergency withdrawal but the 401(a) plan follows the IRS guidelines and there are no recommendations at this time for any changes. Trustee Ross asked if employees are auto enrolled when they are hired, if there are automatic annual percentage increases. and if a percentage increase program had been evaluated if there wasn't one. Ms. Shawa responded that employees are not automatically enrolled and apes available fn the plan but is t in the system. Mr.Taylor responded that auto enrollment is a required, and that an annual percentage increase is available for the plan but is not in place. Commissioner Ross recommended that these features be evaluated and placed in the plan as a larger number of people is better for a savings device. Ms. Shawa asked the Board of Trustees for acceptance of the 2018 Audited Financial Statements for the _ Defined Benefit Pension Plan, the Defined Contribution Pension Plan, and the Retire Benefit Plan (VEBA) which were audited by Baker Tilly. Commissioner Price commented that it is good to hear a good news report for the retirement plans as he has heard other municipalities are in arrears on their retirement plans. RESOLUTION 2018-11-11 Acce tance of 2018 Audited Financial Statements for Defined Benefit Pension Plan Defined Contribution Pension Plan and Retiree Benefit Plan Resolved, that the Corporate Secretary receive and place on file the Defined Benefit, Defined Contribution, and Retiree Benefit Plan reports presented during the Pension Trustee Meeting. -------------------------- staff comments: All three Plans received clean audit reports. Motion by Trustee Ross, Seconded by Trustee Thomas, to accept the 2018 Audited Financial Statements for Defined Benefit Pension Plan, Defined Contribution Pension Plan, and Retiree Benefit Plan (VEBA). Action: Motion Carried RESOLUTION 2018-11-12 Travel & Reimbursement Policy— Board of Commissioners, Board Appointees, Employees and Investment Fiduciaries WHEREAS, the Board of Commissioners approved a BWL Travel & Reimbursement Policy ("Policy") on March 28, 2017 which served to combine and replace three existing policies and two previous resolutions; and WHEREAS, the BWL staff has conducted a review of compliance with the Policy and determined additional clarifying language would enhance compliance; and WHEREAS, it has been determined based on the feedback and review that revising the Policy to provide additional guidance and clarity would improve understanding of the Policy, improve compliance with the Policy, and reduce the time associated with administering the Policy; and WHEREAS, the Board of Commissioners adopted the Policy as presented. THEREFORE, it is: RESOLVED, that the Trustees acknowledge the attached, updated Travel & Reimbursement Policy. Motion by Trustee Ross, Seconded by Trustee Graham, to acknowledge the Travel & Reimbursement Policy for Board of Commissioners, Board Appointees, Employees and Investment Fiduciaries. Action: Motion Carried Ms. Shawa stated that last year a hard copy binder of the pension plans was provided to the Commissioners anp d an u dated electronic copy,that will be available on demand, will be avdaable on the dashboard in the near future. In addition, a quarterly pension report will be available Other None. Excused Absences None. Ad_ ourn There being no further business, the Pension Fund Trustees meeting adjourned at 6:54 p.m. Chair Price reconvened the Board of Commissioners' Meeting at 6:54 p.m. MANAGER'S RECOMMENDATIONS RESOLUTION 2018-11-13 Easement Grant to Consumers Ener"Company an RESOLV ED, that the Board of Commissioners hereby recommends that Lansing Ci yma Council rantd by the as d of ement to Consumers Energy Company which will be located on property occupied Water and Light; and RESOLVED, the General Manager of the Board of Water and CghtCothorized to execute all FURTHER R roved by the Lansing yunc documents to effectuate this easement grant once app comments: The Board of Water and Light's ( BWL ) new power plant in nDWlt i Township he WL btends to e fueled by Staff Com supplysufficient fuel to P natural gas which requires a new gas pipeline to("Consumers") to construct the new gas pipeline, and contract with the Consumers Energy Company has requested an easement for said pipeline across the property the terlms of said I easement,lll be ited. Consumers q The BWL has performed an operational feasibility consideration, that are mssment utually agreeable. which includes only nominal monetary n b Commissioner Zerkle, Seconded by Commissioner Thomas to approve the Resolution for the Grant Motto y Easement to Consumers Energy. Action: Motion Carried UNFINISHED BUSINESS There was no Unfinished Business, NEW BUSINESS There was no New Business. MANAGER'S REMARKS None. COMMISSIONERS' REMARKS commissioner Thomas commended Ms. Shawa's department for their hard work and great job and also congratulated Scott Taylor for representing the BWL well. ' e wished everyone a joyous holiday season and an prosperous new year for to band an d the of - Chair Price and Light. Chair Price also informed the meeting attendees our ngethle Silver Bells event and he invited people band will be playing in City Hall from 7:15 p.m. to 8 p to stop by. EXCUSED ABSENCE None. PUBLIC COMMENTS Anna and Fischer from Lansing Environmental Action Team spoke about a acceleration of climate change the need of the BWL to transfer to renewable energy well before ADJOURNMENT Chair Price adjourned the meeting at 7:00 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes filed(electronically)with Lansing City Clerk: 11-27-18 official Minutes filed(electronically)with Lansing City Clerk:02-01-19 Hometown People.Hometown Power: MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT September 25, 2018 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, September 25, 2018. Chairperson David Price called the meeting to order at 5:30 p.m. Present: Commissioners Anthony Mullen, David Price, Ken Ross,Tracy Thomas, and Sandra Zerkle. Non-Voting Commissioners present: William Long (Delta Township), and Dion'trae Hayes (Lansing Charter Township). Absent: Commissioners Beth Graham, Anthony McCloud and Non-Voting Commissioner Douglas Jester (East Lansing) The Corporate Secretary declared a quorum. Commissioner Long led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Ross, Seconded by Commissioner Thomas, to approve the Regular Board Meeting minutes of July 24, 2018. Action: Motion Carried PUBLIC COMMENTS None. COMMUNICATIONS Electronic Mail received From or Re: • Mike Harrington of Michigan Forge regarding Electricity Cost per kWh-Referred to Management. Received and Placed on File • Resignation Statement from BWL Commissioner Dennis M. Louney Motion by Commissioner Ross, Seconded by Commissioner Thomas to accept, receive and place on File the letter of resignation from Commissioner Dennis M. Louney. Action: Motion Carried • Ann Nieratko regarding Tree Trimming Concern -Referred to Management. Received and Placed on File COMMITTEE REPORTS HUMAN RESOURCES COMMITTEE Meeting Minutes September 18, 2018 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 5:00 p.m. on Tuesday,September 18, 2018. Human Resources (HR) Committee Chairperson Tracy Thomas called the meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Tracy Thomas,Anthony McCloud and Sandra Zerkle. Also present: Commissioners Beth Graham, Anthony Mullen, David Price, and Ken Ross; and Non-Voting Commissioner William Long (Delta Township). Absent: None As the Chair of the HR Committee Commissioner Thomas took the liberty to remove items#3 regarding the High Deductible Health Plan from the agenda. Public Comments None Approval of Minutes Motion by Commissioner Zerkle, Seconded by Commissioner Graham, to approve the Human Resources Committee meeting minutes of June 28, 2018. Action: Motion Carried. PA152 Health Care Premium Sharing Resolution Human Resource Committee Chairperson Tracy Thomas introduced Michael Flowers, Executive Director of Human Resources. Mr. Flowers reviewed and discussed BWL's options regarding Public Act 152's requirements associated with capping the amount a public employer may pay for health care insurance. Public Act 152, 2011 The BWL has three Options: Comply with PA 152 and limit expenditures on health care cost based on a schedule of dollars provided in the Act using the Hard Cap as updated annually; or Limit expenditures on health care cost based on a 84/20 percentage split, requiring a majority vote; or Exempt itself entirely from the Act u choose some other percentage of Premium sharing, requiring a 2/3 vote In conclusion, the recommendation is that the Board select option 3 and exempt itself from the requirements of PA 152 of 2011 for all active employees' medical benefits, effective January 1, 2019 with an increase from 16% to 18% in premium sharing contribution. The Administration presented a proposed Resolution and asked that the Committee forward the Resolution to the full Board for consideration. Commissioner Zerkle inquired as to whether the hard cap of$93.79 for the employee per pay period premium could be increased slightly every year and Mr. Flowers responded that it could. PROPOSED RESOLUTION To Amend Employee Contribution to Medical Benefit Plans WHEREAS, Governor Rick Snyder, on September 27, 2011, signed legislation known as the "Public Funded Health Insurance Contribution Act", Public Act 152 of 2011 limiting the amount public employers may pay for government employee medical benefits, and; WHEREAS, Public Act 152 of 2011 took effect January 1, 2012 and applies to all public employers including the Lansing Board of Water& Light, and; WHEREAS, Public Act 152 of 2011 created a "hard cap" for medical benefit plan years beginning January 1, 2012, such that a public employer may not pay more than the statutory caps for medical benefit plans, and; WHEREAS, by a 2/3 vote of its governing body each year, a public employer may exempt itself from the requirements of Public Act 152 of 2011 prior to each benefit plan year, and; WHEREAS, the Board of Commissioners have met each year and passed a resolution exempting the Lansing Board of Water & Light from the "hard cap" of Public 152 of 2011 and established premium sharing amounts for the applicable benefit plan years, as follows: Date Resolution No. Premium Sharing Effective Date July 24, 2012 (#2012-07-01) 10% All Active Employees January 1, 2013 July 23, 2013 (#2013-07-02) 12%All Active Employees January 1, 2014 September 23, 2014 (#2014-09-03) 12% All Active Employees January 1, 2015 July 28, 2015 (#2015-07-12) 12% All Active Employees January 1, 2015 November 17, 2015 (#2015-11-02) 12%- Union Employees January 1, 2016- 12% 14% - Non-Union Employees Union Effective July 1, 216— 14% Non-Union November 15, 2016 (#2016-11-06) 14%All Active Employees January 1, 2017 September 26, 2017 (#2017-09-01) 16%All Active Employees January 1, 2018 RESOLVE that the Board by at least 2/3 vote desires to exempt itself from the requirements of Public Act 152 of 2011 for the upcoming benefit plan year, effective January 1, 2019 through December 31, 2019. FURTHER RESOLVE that the Board desires to increase premium sharing from 16% to 18% for all active employees for medical benefits effective January 1, 2019. Motion by Commissioner McCloud, Seconded by Commissioner Zerkle, to forward the proposed resolution for PA 152 Health Care Premium Sharing to full Board for consideration. Action: Motion Carried. High Deductible Health Plan-PULLED FROM AGENDA Other None Ad'ourn Motion by Commissioner Graham, Seconded by Commissioner Zerkle, to adjourn the meeting. Action: Motion Carried Meeting adjourned at 5:10 p.m. Respectfully Submitted, Tracy Thomas, Chair Human Resources Committee COMMITTEE OF THE WHOLE Meeting Minutes September 18, 2018 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, September 18, 2018. Committee of the Whole Chair Tony Mullen called the meeting to order at 5:30 p.m. and asked the Corporate Secretary to call the roll. Present: Commissioners Sandra Zerkle, Beth Graham, Anthony McCloud, Tony Mullen, David Price, Ken Ross, Tracy Thomas, and Non-Voting Member: William Long (Delta Township) Absent: Commissioners Dion'trae Hayes (Lansing 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 McCloud, to approve the Committee of the Whole meeting minutes of July 10, 2018. Action: Motion Carried. Safety Report Update General Manager Dick Peffley reported that an OSHA investigation was conducted at the Eckert station and a clean bill of health was received. Also, a MIOSHA investigation was conducted at the Erickson station and GM Peffley introduced Oscar Rodriguez-Franco, Industrial Health and Safety Manager, who provided information from the Safety Report Update. Mr. Rodriguez-Franco stated that an award was received for best practices in natural gas leak testing at the combined cycle co-generation plant due to the leadership in Electric Production, Director Roberto Hodge. Mr. Rodriguez-Franco also stated that BWL has been working with Marsh Risk Consulting to improve safety and with MIOSHA to improve compliance. Several items were found where improvement was needed. Mr. Rodriguez-Franco recognized Erickson station leadership Manager, Lucinda Lehmkuhle; Operating Supervisor, Scott Mills; and Station Shift Supervisor, Dave Klemish for stepping forward and working as a team to address the safety items. Commissioner Zerkle commended Oscar Rodriguez-Franco on his dedication to safety and employees. GM Peffley stated that even though the plant is closing employees are still making the necessary corrections to comply with safety. Strategic Plan Update 2018 General Manager Dick Peffley introduced George Stojic, Executive Director of Planning and Development, who reviewed the updates to the 2018 Strategic Plan which was adopted in September 2016. Mr. Stojic introduced an updated spreadsheet and explained the color coding that was designed to show changes and additions in the Plan's milestones. Mr. Stojic stated that there were no strategy changes to the seven Strategic Plan strategies: Customer Experience, Community Involvement, Effectively Acquire and Manage Resources, Implement New Technologies, Workforce, Financial Stability, and BWL Leadership, Commissioner Long inquired whether the SmartMeters that are being installed would all be activated at the same time. GM Peffley responded that SmartMeters are currently being installed and tested and would all be activated at the same time in 2021. Mr. Stojic stated that the BWL is on track to successfully implement the Plan and gave the Board a high-level overview of the Staff's progress with the Plan's Objectives and tasks. Commissioner Long asked where the responsibility lies organizationally with emergency planning. Mr. Stojic responded that question would be answered in the next presentation. Commissioner Zerkle asked if there was an incentive package for new business customers. GM Peffley responded that there a couple different levels for smaller and larger customers. Commissioner Zerkle also stated that she appreciated the updates to the strategic plan. Organizational Structure Update Mr. George Stojic reported that the BWL had undertaken six major initiatives including: closing Eckert Power Plan, buildout of the Transmission and Distribution System, the transition of the workforce, the Strategic Plan, adopting five new technology projects, and an asset management plan. To help ensure success implementing the initiatives, BWL staff hired a consulting firm to review the BWL's process and organizational structure for alignment with the initiatives. The consulting firm, UMS Group, made several business process recommendations and recommended changes to the BWL's organizational structure. The BWL staff made a few modifications to the UMS proposal and is in the process of implementing the new organizational structure (shown below). Connnniasioner Long commented on the lack of departments under Executive Director George 3t jic and GM Peff|ey responded that Mr. St jic |stransitioning into retirement. Commissioner Long also restated his earlier question regarding emergency planning. GM Peff|ey responded that there is an Emergency Manager that reports to Chief Operating Officer, Dave Bolan, plus new policies and procedures were put into place. Commissioner Long stated the Mayor was decreed as the authority during emergencies and GM Peff|eystoted that BVVL has worked with the city administration on recent emergencies. Capital Proiect Update GM Peff|ey reported that approximately 100 Capital Projects are now in progress and that the following 10 projects make upGOY6of the budget: 1. The new plant has a budget of $5OO nn||||on. Combustion turbines have been ordered at good price, an owner's representative and a design engineering company have been hired, and construction bids were due this week. Ground breaking will be in the spring of2O19 and the plant will go online first quaMcer202I. 2. VVestside reinforcement project has a budget nf $33 million and was completed this summer ontime and under budget. 3. Central substation has budget of $2O million. Some equipment is being powered up and circuits are being pulled in. The project |soverbudgetrightnovvbutisbeingeva|uated. 4. AMiSnnartnneters, has a budget of$31million. One third of the electric meters have been installed and the project will be completed in June of282O. 5. CIS has ap|aceho|der budget of$l4million. This project isintheprocurennentstagesandisachedu|ed to be completed in December 2021. No schedule or budget issue at this time. 5. Wise Road substation upgrade has a budget nf$I3million. Engineering is just beginning and the project in within budget and schedule. 7. Lansing Grand River substation for GM has a budget of$1Z.Smillion. |t will go live in2OZ3. Noschedule or budget issues et this time. O. Electric distribution automation has a budget of$7 million. If there are faults on a line, outages will be located quicker and restored faster. The first phase is scheduled for summer ofZOl9. 9. REO hot section rebuild has a budget of $5 million. Two turbines costing $3.5 million each will be rebuilt. The first turbine was completed this week. The second turbine will be rebuilt in April ZO19. The turbines have approximately a five-year life. 10. Erickson turbine rebuild has e budget of$4 million. This will be the last rebuild for the station. Customer Payment Audit Follow-Up GM Peffley introduced Customer Service Manager, Bob Perialas, who spoke about the customer payment arrangements and third-party payments. The audit found that in general arrangements are successful and are positively impacting customers;and although there is a 60%success rate,this average could be higher. Reaching out to counterparts to find out what payment arrangements are available and what analytics are available is being used to determine what that average should be. Secondly, the audit found that the appropriate approval for a special arrangement didn't make a difference for the success of payment arrangements. Commissioner Price asked if there was a commonality among the customers that were successful in making payments. Mr. Perialas responded that there a number of customers and a review hasn't been done to determine if there is any commonality. Commissioner Zerkle asked if there were any community dynamics that affected whether customers had difficulty meeting the payment arrangements. Mr. Perialas responded that there a number of customers and they wouldn't want to not offer a customer an arrangement based on geographic location. Commissioner Long asked if there was any pattern to how quickly a response is given to a customer. GM Peffley responded that up until a couple of years ago shutoffs were done without working with customers. Now customers need to minimize use of power to keep their bill down. BWL is looking toward a system that will keep track of the criteria in customer payments. Commissioner Zerkle asked if it was correct that once the Smartmeters were in use it would be easier to keep track of the criteria needed to determine the successfulness of meeting payment arrangements and Mr. Perialas responded that it would be. Other Commissioner Price congratulated the BWL Team that received the gold medal in the Capital City Dragon Boat Race. Commissioner McCloud inquired whether emergency services were being provided for hurricane Florence communities. GM Peffley responded that BWL has not been asked to provide service yet but teams are on call and ready to go if needed. Committee of the Whole Chair Zerkle congratulated Corporate Secretary Denise Griffin on a milestone of 10 years worked at BWL and presented Ms. Griffin with a certificate of appreciation. Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to excuse Commissioners Dion'trae Hayes and Douglas Jester from tonight's meeting. Action: Motion Carried Adiourn Motion by Commissioner McCloud , Seconded by Commissioner Mullen to adjourn the meeting. Meeting adjourned at 6:47 p.m. Respectfully Submitted Sandra Zerkle, Chair Committee of the Whole FINANCE COMMITTEE Meeting Minutes September 18, 2018 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 on Tuesday, September 18, 2018. _ Finance Committee Chair Ken Ross called the meeting to order at 7:14 p.m. and asked the Corporate Secretary to call the roll. Present: Commissioners Ken Ross, Beth Graham, David Price, and Tony Mullen. Also present: Anthony McCloud, Tracy Thomas, and Sandra Zerkle; Non-Voting Commissioner William Long (East Lansing). Absent: None The Corporate Secretary declared a quorum. Public Comments None. Approval of Minutes Motion by Commissioner Price,Seconded by Commissioner Mullen,to approve the Finance Committee meeting minutes of July 10, 2018. Action: Motion Carried. Baker Tilly External Audit Report and Resolution Committee Chair Ross introduced external auditor Jodi Dobson, Partner at Baker Tilly Virchow Krause, LLP. Ms. Dobson presented and highlighted the external audit report which included an audit overview, observations and recommendations, and required government communications. BWL received an unmodified or clean opinion which is the highest level of assurance provided. Ms. Dobson's presentation was as follows: . Board of Water and Light-City of Lansing - Audit overview ' metowW Finance committee Meeting- yxnr:en n ur So ptomber 18,2018 " 2018 Audit Presentation Hon Poway. w�:Iwo.Lm6a1.Ui l0 4ma:,•.,y 4J, r-- Lt st.1—.." 1,IempenMnll4LYfabnofdaaNfale . ..}i^i ". ..- CMaoMaad Gaeuo^6 Ialala0bnl_ gyp., yaAAf0.TIL1.1' "t Wau ea aWfy4n,enlal ben _ „. IWMierW ada,maem t Board of Water and Light-City of Lansing Board of Water and Light-City of Lansing Audit ovorv!*w Audit ovorvlow yPAKER TILLY yPAKER TILL1' ..-....-.d Controls Disbursements - reviewed ....__-_. ._.. �i In key Payroll _ transaction areas Billings — _- • Cash and investments Capital assets j Information technology __-- r---r Financial reporting Board of Water and Light-City of Lansing '"'�•� Board of Water and Light•City of Lansing Oesorvptiens and rocomm*ndatione Oesurv.Nrona ar d 'orrnno Jallons yPAKER TILLY Errlvpnsu Fund -::�,� �,AKFR TILLY Enlorprlso Fund Reported net income of S14.11g.000 oW ung Fwryeu '.. ..v.. > Bond coverage was met in 2018 Companion +�•a ' "' > There were no material weaknesses reported w� Restated 2017 due to the implementation of GASB 75 f c'e........... cr..q'...-:v'a...... 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GASB Slalenlrnt No.83.Coil-Asset Relvernenl 06Lgalans Plarve`d9mwand Tnlvlq 00'Aud.l Avcamtuq Pd:eaf —effecthv for fiscal Year 2019 GASB Slulmlenl No.87,Leases-ellutilive Iw fiscal year Acrounlulp EHimaloc Fuurcial5latament DurAoclvas 2021 D,ft- a Enmonlervd in Pe4mm119 lM1CAW:I r Mlcd nna i-mr-ed Ml511dlem¢Ns GASB Statement No.88.Cedsin DisOdswes Related fo Debt. Dlsap—rismihmanapamanl caaunmrossmin elnelleoep ndsmA=wunlantc _',,di,Diracl Iwnnwnr9s and Direct P4 camenlr—effecliva Audi.IrWeaeadmwe for fiscal year 2019 lAmu,_1 Rcplamntauoes GASB Slulemc+ll No.89 Accuunlrn9 for lnfMn:sf Cost di-il the Period or C-1-1stan—etf_li_for rscal year 202 � �IAY.CR TI LLY Jodi Dobson,Partner I):608 240 24Eri1 Bethany Ryers,Senior Manager D:608 240 2382 I�t1lfS David DeBano,Senior Accountant p;608 240 2664 Commissioner Long inquired about the sewerage collection fees and receivables. General Accounting Manager Lori Pung responded that these fees are charged to the City of Lansing to provide the collection services for them and the receivables are what is received from the customers. at Commissioner Ross asked if the BWL was responsible for themmenit ctabhe wo and rk they did with Bake responded r Tilly.BWL is not, commissioner Ross commended the accounting dep Motion by Commissioner Price, Seconded by CommissionerllenMu , to forward to the Board Meeting the Acceptance of the Resolution for the 2018 Audited Financial Action: Motion Carried. Chief Financial Officer (CFO), Heather Shawa, introduced Ms. Lori Pen wohkspoke d onsbe wout ork bytBakelr Tilly. Ms. Pung stated that the audit was started in April which included prepfor Pung thanked the Executive Staff and the accounting staff, includin w chg Josh allenges rving Scott due to Taylor, 7aul 5 but they got their work and extra hours. Ms. Pung also noted that there were some through it. Commissioner Price requested that a brief overview of the Baker Tilly audit be presented at the joint City of Lansing/BWL meeting in October 2018. July YTD Financial Summary CFO Heather Shawa presented the July 2018 Year-to-date Financial Summary which indicated that the total Cash is over $189M, Days Cash on hand is 164, and debt service coverage ratio is 3.77. Restricted funds decreased slightly due to annual debt service payment. Ms. Shawa stated that revenue was $2 million over budget and the operating expenses were under budget, which resulted in net ios so re being metmlU der employee data a llion compared to $3.6 million budget. Ms. Shawa mentioned that four out of the five full time equivalent factor has been added for contractors. itnand"I Summary•'July 2018 w��FnaxinxllSgpa�u4*Y �1�Yst.�'.�r'. �,�5�._ 111 •' ,.....� Cc,h I m tifd wIY1D Ca.h I ne St t t t I D -- -., 13u1gel Slams IID r u Return on Assets Commissioner Zerkle asked whether new tree trimmers woulde added in 2018 or 2019. GM Peffley responded that one of two teams would be added as soon as they can be onboarCapital Project Exceedance Electric Annual Account—Resolution CFO Shawa presented the following information on the Capital Project Exceedance Electric Annual Account and requested approval of the resolution. • The projected final budget is $2 million more than the approved budget. • There was an increase in the cable fault replacements for system restoration. Other areas in need include five additional projects and outdoor city LED lighting GM Peffley commented that there are 200 miles of service cable in the city and there is an increase in blue sky outages. Apprentices will be trained and the cable replacements will be a 30-year project. A plan is being constructed and it will be an annual project. Commissioner Long asked whetherthe cable that needed repaired was underground and GM Peffley responded that 1800 miles of cable were underground, 600 miles of which is called URBS direct variable and is located in townships. Commissioner Price inquired about the rate at which the cable will be replaced and GM Peffley responded that 100 feet of cable will be replaced per week and cable would be replaced first where there are the most faults. Commissioner Long asked whether other municipalities in the city had projects and which projects had priority. GM Peffley responded that the projects are evaluated for priority in conjunction with the city and are completed accordingly. Motion by Commissioner Price, Seconded by Commissioner Mullen, to accept as presented the Capital Project Exceedance Electric Annual Account Resolution and to forward to the Board Meeting for consideration. Action: Motion Carried. Internal Auditor's Revised Audit Plan for FY 2019 Finance Committee Chair Ken Ross presented the revised audit plan for FY 2019 on behalf of Internal Auditor Phil Perkins who was not in attendance this evening. Finance Chair Ross ask the Committee to approve the revised Audit Plan by motion. The revised audit plan was requested by the CFO as a follow up to the 2017 COBIT audit. Proposed FY 2019 Audit Plan—Revised Sep 2018 Plannod Audits: Estimated Hour. Follow•up—IT Ch-91 ManaLamant lincl OT) 300 300 IT Cybanacurity COBIT Compliance Follow-up 200 Asfal ManaLamant Program 300 Metering Services 300 Accounts Payable 300 Vegetation ManaLamant 300 300 Procurement PraJa<tEnLlneerinL—PlannedPreJactf 300 Other Eng.9—n1s: Consulting—"SMART&Other Org Change MLt 200 Consulting—Other(T"D) 200 Surprise Cash Count(2{/Tl—Rpl Rev(2) 200 Total Required Hours 3,200 Motion by Commissioner Price, Seconded by Commissioner Mullen, that the Committee approve the Revised Audit Plan for FY 2019. Action: Motion Carried. Other None. Adiourn Chair Ken Ross adjourned the meeting at 7:35 p.m. Respectfully submitted Ken Ross, Chair Finance Committee MANAGER'S RECOMMENDATIONS None. UNFINISHED BUSINESS None. NEW BUSINESS None. RESOLUTIONS RESOLUTION 2018-09-01 PA 152 Health Care Premium Sharing To Amend Employee Contribution to Medical Benefit Plans WHEREAS, Governor Rick Snyder,on September 27, 2011,signed legislation known as the"Public Funded Health Insurance Contribution Act", Public Act 152 of 2011 limiting the amount public employers may pay for government employee medical benefits, and; WHEREAS, Public Act 152 of 2011 took effect January 1, 2012 and applies to all public employers including the Lansing Board of Water& Light, and; WHEREAS, Public Act 152 of 2011 created a "hard cap" for medical benefit plan years beginning January 1, 2012, such that a public employer may not pay more than the statutory caps for medical benefit plans, and; Y WHEREAS, by a 2/3 vote of its governing body each year, a public employer may exempt itself from the requirements of Public Act 152 of 2011 prior to each benefit plan year, and; on the WHEREAS, the Board of Commissioners have met each year o d andeestablished(premium sharing amountg Board of Water & Light from the hard cap of Public 152 of 2 for the applicable benefit plan years, as follows: Date Resolution No. Premium Sharing Effective Date July 24, 2012 (#2012-07-01) 10%All Active Employees January 1, 2013 July 23, 2013 (#2013-07-02) 12% All Active Employees January 1, 2014 (#2014-09-03) 12% All Active Employees January 1, 2015 September 23, 2014 Jul (#2015-07-12) 12% All Active Employees January 1, 2015 Y 28 2015 16- 12% 12%- Union Employees January 1, 20 November 17, 2015 (#2015-11-02) 14%- Non-Union Employees Union Effective July 1, 216 — 14% Non-Union November 15, 2016 (#2016-11-06) 14%All Active Employees January 1, 2017 September 26, 2017 (#2017-09-01) 16%All Active Employees January 1, 2018 RESOLVE that the Board by at least 2/3 vote desires to exempt itself f December 31t Z01emens of 9ublic Act 152 of om the requir 2011 for the upcoming benefit plan year, effective January 1, 2019 through FURTHER RESOLVE thatthe Board desires to increase premium sharing from 16%to 18%for all active employees for medical benefits effective January 1, 2019. Motion by Commissioner Thomas, Seconded by Commissioner Zerkle,to approve the PA 152 Health Care Premium Sharing Resolution. Action: Motion Carried RESOLUTION 2018-09-02 Fiscal Year 2018 Audited Financial Statements of the Enterprise Fund and Pension Fiduciary Funds RESOLVED, that the fiscal year 2018 Audited Financial Statements of the Board of Water and Light have been reviewed and are hereby accepted as presented. y of the fiscal r 2018 FURTHER RESOLVED, that the Corporate Secretary is hereby and the di oeport onpaudit auditing procedures w th the Audited Financial Statements of the Board of Water and Light State Treasurer as required by the Uniform Budgeting and Accounting Act (Public Act 2 of 1968, as amended) no later than December 31, 2018. FURTHER RESOLVED, that the Corporate Secretary is hereby directed to file a copy of the fiscal year 2018 Audited Financial Statements of the Board of Water and Light with the City of Lansing no later than October 15, 2018. ioner Thomas,to accept the Resolution for the FY 2018 Motion by Commissioner Ross, Seconded by Commiss Audited Financial Statements. Action: Motion Carried RESOLUTION 2018-09-03 Capital Project Budget Fxrpedance Approval: AE—Electric Annual Account — WHEREAS, Lansing Board of Water & Light's (BWL) Policy 15-02, entitled Capital Project Buet dget for electric, Approval necessitates BWL Board of Commission approval for aggregate water, steam and chilled water "annual" 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 AE- Electric Annual Account was$8,448,400; and WHEREAS, the projected final total cost for Capital Project AE - Electric Annual Account is $10,402,004, should the projects be completed; and iewed the project cost in detail, which includes but is not limited to WHEREAS, BWL staff and management rev the rationale and circumstances for the increased budget projection; and WHEREAS, BWL staff and management recommends that the Capital Project AE — Electric Annual Account be completed despite the projected increased cost; and WHEREAS, BWL staff and management recommends that the BWL Board of Commissioners approve the Capital Project AE— Electric Annual Account to be completed as projected. RESOLVED,the BWL Board of Commissioners approve completion of Capital Project AE—Electric Annual Account with a projected final total cost of$10,402,004. sioner Mullen to approve the Capital Project Budget Motion by Commissioner Thomas, Seconded by Commis Exceedance for Capital Project AE—Electric Annual Account. Action: Motion Carried MANAGER'S REMARKS General Manager Dick Peffley announced the following: GM Peffley informed the Board that Mr. Dan Ebert of Hometown Connections addressed the BWL Directors and Managers on September 21't on the topic of"Inuserand is impacting ilable on v bli Power". Mr. Peffley stated this presentation provided excellent information applicants, 54 of which were 85 app A 15t S.T.E.P. orientation was held September 12, 2018. There were ear for the 15t S.T.E.P. from Lansing, and of which 22 were fromWaverly f which 30 have been hired by High Other companies program and 110 students have graduate have noticed the success of the program and would like to implement it in their companies. • BWL conducted an employee survey two and a half years ago and participation was 55%. On average 35%-40% is considered good. Another employee surveyeebbe en o uraged toconucted (th responses complete then urvey�ay. September 28, 2018. GM Peffley asked that the employ The BWL Chili Cook-Off will be held in the Lansing Lugnuts stadium Friday, October 12, 2018. The stadium was selected as the new location as it is easier to handle the long lines for chili in the stadium. GM Peffley and Executive Staff attended the annual MMEA conference that was held September 12- 14, 2018 in Escanaba, MI. COMMISSIONERS' REMARKS City on Comm issioner Thomas noted that BWL was the sponsor of the 2018 Ca i the JazRiver Rul that if Ma at d August that was held this past weekend. GM Peffley stated that BWL also sponsored 3-4, 2018. chael Commissioner Price reported that the Commissioners are working n with Lazii tove iadhere to Governance Flowers, Corporate Secretary, Denise Griffin, and Executive Assistant, Policy to evaluate themselves every year. An anonymous survey will be conducted through Survey Monkey Commi ssioner Price also reported that General Counsel Brandie Ekren, Corporate Secretary Denise Griffin, and staff are developing a portal for the Board of Commissioners and staff for access to BWL policies, resolutions, and other necessary information. MOTION OF EXCUSED ABSENCE Excused Absence Motion by Commissioner Ross, Seconded by Commissioner Thomas,to excuse Commissioner Graham, Commissioner McCloud, and Commissioner Jester from tonight's meeting. Action: Motion Carried PUBLIC COMMENTS None ADJOURNMENT Chair Price adjourned the meeting at 5:48 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes filed(electronically)with Lansing City Clerk 9-27-18 Approved by the Board of Commissioners:11-13-18 official Minutes filed(electronically)with Lansing City Clerk:11-16-18 Approved by the Board of Commissioners 09-25-18 Hometown People. Hometown Power. MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT July 24, 2018 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 July 24, 2018. Chairperson David Price called the meeting to order at 5:30 p.m. Chairperson Price welcomed new Commissioner, Dion'trae Hayes, Supervisor of Lansing Charter Township, representing Lansing Charter Township as the Advisory Commissioner, The Corporate Secretary, M. Denise Griffin, called the roll. Present: Commissioners David Price, Beth Graham, Dennis Louney, Anthony McCloud, Ken Ross, Tracy Thomas, and Sandra Zerkle, Non-Voting Commissioners present: Douglas Jester (East Lansing) (arrived at 5:43 p.m,), William Long (Delta Township) and Dion'trae Hayes (Lansing Charter Township). Absent: Commissioner Anthony Mullen The Corporate Secretary declared a quorum. Commissioner Anthony McCloud led the Pledge of Allegiance. Chairperson Price Congratulated Commissioner McCloud on his recent marriage. ELECTION OF OFFICERS FY 2017-2018 Nominating Committee Chairperson Anthony McCloud presented the June 28, 2018 Nominating Committee Report, from which the proposed slate of officers for Fiscal Year 2018-2019 is as such: Commissioner David Price serving as Chairperson; and Commissioner Sandra Zerkle serving as Vice Chairperson. There were no further nominations for the officers' positions. Motion by Commissioner McCloud, Seconded by Commissioner Thomas to nominate Commissioner David Price to serve as the Chairperson and Commissioner Zerkle to serve as the Vice Chairperson of the Board of Commissioners for Fiscal Year 2018-2019. Action: Carried Unanimously Chair Price thanked everyone for their support and is looking forward to working with the Vice Chair Zerkle and the members of the Board in FY 2018-2019. SPECIAL PRESENTATION: MICHIGAN MUNICIPAL ELECTRIC ASSOCIATION (MMEA) LIFETIME MEMBERSHIP AWARD George Stojic, Executive Director of Planning and Development, stated that the BWL was the first utility in Michigan to adopt a renewable portfolio standard and the first utility to voluntarily commence a long term comprehensive energy efficiency program. Sue Warren, retired BWL Manager of Energy & Eco Strategies, planned and designed the programs and served as an ambassador to other utilities. Mr. Stojic introduced Jim Weeks, Executive Director of MMEA, who presented Sue Warren with an MMEA Lifetime Membership Award and plaque. Sue Warren thanked MMEA and BWL for the award. APPROVAL OF MINUTES Motion by Commissioner Thomas, Seconded by Commissioner Zerkle, to approve the Regular Board Meeting minutes of May 22, 2018. Action: Motion Carried PUBLIC COMMENTS None, COMMUNICATIONS Electronic Mail received From or Re: a. Electronic mail from Amara Moody re Utility Financial Assistance - Referred to Management. Received and Placed on File COMMITTEE REPORTS Commissioner Tracy Thomas presented the Human Resources Committee Report: HUMAN RESOURCES COMMITTEE Meeting Minutes June 28, 2018 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 4:30 p.m. on Thursday, June 28, 2018. Human Resources (HR) Committee Chairperson Tracy Thomas called the meeting to order and asked the Corporate Secretary to call the roll. The following members were present: Commissioners Tracy Thomas, Anthony McCloud, Tony Mullen, and Sandra Zerkle (arrived at 4:49 p.m.) Also, present: Commissioners Beth Graham, Dennis Louney, and David Price. Absent: None Public Comments None Approval of Minutes Motion by Commissioner Mullen, Seconded by Commissioner McCloud, to approve the Human Resources Committee meeting minutes of September 12, 2017. Action: Motion Carried, FY 2018 Board Appointee Performance Reviews HR Committee Chair Thomas noted that the charter appointed employees' evaluations and statistical results were emailed to all Commissioners a week prior to today's committee meeting. 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) and requested that the BWL HR Executive Director, Michael Flowers, attend. Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to enter into closed session to discuss the contractual year-end performance evaluation of Corporate Secretary M. Denise Griffin. Roll Call Vote: Yeas: Commissioners Tracy Thomas, Anthony McCloud, Tony Mullen. Nays: None. Action: Motion Carried. The Human Resources Committee went into closed session at 4:37 p.m. Motion by Commissioner Mullen, Seconded by Commissioner McCloud, to reconvene into open session. Action: Motion Carried. The Human Resources Committee reconvened to open session at 4:48 p.m. Upon conclusion of the Closed Session, the following motion was offered: Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to forward a resolution reappointing M. Denise Griffin to the Charter position of Corporate Secretary for FY19 to the full Board for consideration. Action: Motion Carried, Internal Auditor Internal Auditor, Phil Perkins, 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) and requested that the BWL HR Executive Director, Michael Flowers, attend. Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to enter into closed session to discuss the contractual year-end performance evaluation of Internal Auditor, Phil Perkins. Roll Call Vote: Yeas: Commissioners Tracy Thomas, Anthony McCloud, Tony Mullen, Sandra Zerkle. Nays: None. Action: Motion Carried. The Human Resources Committee went into closed session at 4:51 p.m. Motion by Commissioner Zerkle, Seconded by Commissioner McCloud, to reconvene into open session. Action: Motion Carried. The Human Resources Committee reconvened to open session at 5:04 p.m. Upon conclusion of the Closed Session, the following motion was offered: Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to forward a resolution reappointing Phil Perkins to the Charter position of Internal Auditor for FY19 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) and requested that the BWL HR Executive Director, Michael Flowers, attend. Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to enter into closed session to discuss the contractual year-end performance evaluation of General Manager, Richard Peffley, Roll Call Vote: Yeas: Commissioners Tracy Thomas, Anthony McCloud, Tony Mullen, Sandra Zerkle. Nays: None. Action: Motion Carried, The Human Resources Committee went into closed session at 5:08 p.m. Motion by Commissioner Zerkle, Seconded by Commissioner Mullen, to reconvene into open session. Action: Motion Carried. The Human Resources Committee reconvened to open session at 5:37 p.m. Upon conclusion of the Closed Session, the following motion was offered: Motion by Commissioner McCloud, Seconded by Commissioner Mullen, to forward a resolution reappointing Richard (Dick) Peffley to the Charter position of General Manager for FY19 to the full Board for consideration. Action: Motion Carried. Subsequent Steps for Board Appointed Employees Contracts HR Chair Thomas requested a motion for the HR Committee to charge the HR Chair and the Board Chair with the task of working with the appointed employees on their respective annual merit considerations on behalf of the Board of Commissioners. Motion by Commissioner Mullen, Seconded by Commissioner Zerkle, to charge the HR Chair and the Board Chair with the task of working with the appointed employees on their respective annual merit considerations on behalf of the Board of Commissioners. Action: Motion Carried. Excused Absence None Other HR Committee Chair Thomas thanked Commissioner Mullen for meeting with HR Chair Thomas and going through the transition process. HR Committee Chair Thomas also thanked Smiljana for helping the Commissioners with the addressing of some issues. Commissioner Price thanked HR Committee Chair Commissioner Tracy Thomas for his work as the HR Committee Chair. Adiourn Motion by Commissioner McCloud, Seconded by Commissioner Thomas, to adjourn the meeting. Action: Motion Carried Meeting adjourned at 5:41 p.m. Respectfully Submitted, Tracy Thomas, Chair Human Resources Committee Commissioner Anthony McCloud presented the Nominating Committee Report: NOMINATING COMMITTEE Meeting Minutes June 28, 2018 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 5:46 p.m. on Thursday, June 28, 2018. 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, Beth Graham, Anthony Mullen and Tracy Thomas. Absent: None Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Graham, Seconded by Commissioner McCloud to approve the Nominating Committee meeting minutes of June 29, 2017. 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 2018-2019 Chairperson and Vice Chairperson Nominating Committee Chair McCloud noted that the survey results indicated only two Commissioners interested in the officer positions, Commissioner Price for the Board Chair position and Commissioner Zerkle for the Vice Chair position. Nominating Committee Chair McCloud requested a motion to nominate Commissioner David Price to serve as the Chairperson for the 2018-2019 fiscal year and Commissioner Zerkle as the Vice Chairperson for the 2018-2019 fiscal year. Motion by Commissioner Thomas, Seconded by Commissioner Mullen to nominate Commissioner David Price to serve as the Chairperson for the 2018-2019 fiscal year and Commissioner Zerkle as the Vice Chairperson for the 2018-2019 fiscal year. Action: Motion Carried Motion by Commissioner Mullen, Seconded by Commissioner Thomas to present the slate of Officers for 2018-2019 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 24th Regular Board/Annual Organizational meeting. Commissioner Thomas thanked Nominating Committee Chair McCloud for his work as chair of the committee. Excused Absence None Adiourn There being no further business, the meeting adjourned at 5:49 p.m. Respectfully submitted, Anthony McCloud, Chair Nominating Committee Chair David Price presented the Committee of the Whole Report for Committee of the Whole Chairperson Anthony Mullen: COMMITTEE OF THE WHOLE Meeting Minutes July 10, 2018 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 10, 2018. Committee of the Whole Chair Tony Mullen called the meeting to order at 5:30 pm and asked the Corporate Secretary to call the roll. Present: Commissioners Tony Mullen, Beth Graham, Dennis M. Louney, David Price, Ken Ross, Tracy Thomas, and Sandra Zerkle and Non-Voting Members: Doug Jester(East Lansing), William Long (Delta Township) (arrived at 5:34 p.m.) Absent: Commissioner Anthony McCloud The Corporate Secretary declared a quorum. Public Comments None. Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner Thomas, to approve the Committee of the Whole meeting minutes of May 15, 2018. Action: Motion Carried. BWL Futures Trading Authorization Update General Manager Richard Peffley introduced Bob Lalonde, Regulatory Compliance & Market Operations Manager, who presented an update to the policy that was passed last year. Permission had been asked to trade futures as part of the BWL hedging strategy. Mr. Lalonde explained that BWL wanted to trade futures to minimize the risk of future purchases and sales--especially in paying a consistent price on gas purchases, and provided examples. He also explained that the market is larger with futures trading, Mr. Lalonde provided the following information after a question and answer session: • Long term weather conditions, gas storage, market conditions, plus some political items are contributory variables to price fluctuation in gas prices. • More crude production occurs when oil prices go up and since natural gas is a by-product of that production which results in a lower price for natural gas, the situation in Iraq won't cause the price of natural gas to increase. • The prices on the side by side comparison of a purchase of gas and a call option include additional costs and fees such as delivery. • Changes will occur with the addition of the new plant and future goals for the Futures Trading program include this addition. • Efficiency analyses will be conducted to determine what would have occurred if futures weren't done and only purchases were made. • External auditors have reviewed the futures transactions and an audit process is about to start. 2017 Annual Energy Waste Reduction and Renewable Energy Update Rhonda Jones, Marketing & Business Strategy Manager, presented a PowerPoint presentation on energy waste reduction and renewable energy. She highlighted the low-income services in the energy optimization programs, the goals of the programs, the energy waste reduction plan, the renewable energy results, and the renewable energy portfolio. Aileen Gow, Customer Accounts Analyst, will follow up on Commissioner Jester's question about the average measure of life of the items—lights,thermostats, etc.—in the program. Commissioner Mullen asked whether any items besides LED lights would be given to customers, such as the 0% loans that were mentioned or energy efficient appliances. Ms. Jones responded that more efficient refrigerators are currently given to low income residents and other means to obtaining savings are being looked into for the future. Commissioner Price commented that the majority of low income customers are renters and the responsibility for appliances is the landlords'. GM Peffley responded that BWL is reaching out to educate the landlords on the benefits of energy efficient appliances. Commissioner Louney commented that a requirement is being discussed with the city that landlords need to have an energy audit performed before obtaining their renewal certification from the city. Aileen Gow, Customer Accounts Analyst, spoke about low income guidelines and the energy waste reduction plan, providing different behaviors customers can utilize to lower their energy use. Commissioner Long commented that most low-income customers heated with natural gas rather than electricity and furnaces can't be provided through BWL. Ms. Gow responded that BWL does refer customers to agencies or companies that work with natural gas services. Commissioner Louney commended the staff for their efforts and asked whether the BWL had an energy efficiency program incentive such as Consumers Energy has where churches get a small percentage for referring parishioners. Ms. Gow responded that churches and other businesses such as Cristo Rey, Peckham, and Habitat for Humanity provide energy kits and encourage people to sign up for the energy audit. Commissioner Price inquired about the number of operating solar panels. George Stojic responded that approximately 1,000 panels have been scheduled and about 500 are operating. Commissioner Zerkle inquired about the Hydro One repair and replacement. GM responded that it hasn't operated for a few years and the cost to repair it will be more than the payback and it probably will be decommissioned. Commissioner Louney inquired about purchasing panels in the community solar program and if there would be an opportunity for financing and paying half the cost up front to bring more people in. GM responded that is a program that is being evaluated. General Manager Peffley commented that available capacity and energy sales are the main parts of the energy portfolio. Under FERC regulations, capacity requirements for three years are being met by the BWL. Natural gas energy capacity, solar energy capacity, and wind energy capacity provide different challenges in meeting the requirements, with natural gas energy giving the largest return or output currently. More solar energy and wind energy modules have to be built to obtain the same amount of energy as obtained from natural gas modules. Commissioner Ross inquired about the difference in energy credits for solar energy and wind energy and whether the solar and wind energy had to be obtained within the service territory. GM Peffley responded that it is preferred in order to rely on the grid. Commissioner Ross also asked whether the smaller solar arrays in various locations were a form of distributed generation that would make the BWL internal system more resilient. GM Peffley responded that the BLW is looking into smaller modules that the BWL can own, operate and service. Return on Equity Request General Manager Peffley provided information and some background on the Return on Equity (ROE) Request/Payment in Lieu of Taxes Agreement. Board Chair David Price stated that the City of Lansing requested for the Board to revisit the ROE percentage; after some dialogue General Manager Peffley recommended a two-year extension with the same ROE percentage of 6.1%. The Resolution presented today is for approval of the stated to be forwarded to the full Board for consideration. General Manager Peffley stated that gross revenue is being built and the tax basis will be increased instead of raising the percentage rate of energy cost. Motion by Commissioner Price, Seconded by Commissioner Zerkle to approve the amended Return on Equity Request Resolution and forward to the full Board for consideration. Action: Motion Carried. Other Motion by Commissioner Zerkle, Seconded by Commissioner Graham to excuse Commissioner McCloud from the meeting. Commissioner Price spoke congratulations for Commissioner Anthony McCloud on his recent marriage. Adjourn Motion by Commissioner Zerkle to adjourn the meeting. Meeting adjourned at 6:44 p.m. Respectfully Submitted Tony Mullen, Chair Committee of the Whole Commissioner Ken Ross presented the Finance Committee Report: FINANCE COMMITTEE Meeting Minutes May 15, 2018 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, on Tuesday, May 15, 2018. Finance Committee Chair Ken Ross called the meeting to order at 7:31 pm and asked that roll be taken. Present: Commissioners Ken Ross, Dennis Louney, David Price, and Sandra Zerkle. Also present: Commissioner Anthony Mullen, and Non-Voting Commissioners Douglas Jester (East Lansing). Absent: Commissioner Beth Graham, and Non-Voting Commissioners Brian Ross (DeWitt Township) and William Long (Delta Township) The Corporate Secretary declared a quorum. Public Comments None Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner Louney, to approve the Finance Committee meeting minutes of March 13, 2018, Action: Motion Carried. March YTD Financial Summary Chief Financial Officer (CFO), Heather Shawa presented the following: C-1, 111 a SIM,•n,cnl YTD liatim Gm lu ec Data - u �lu�h,•Islaln,:rrn � ��,.,,. , - �......_,.........- Rclnm an:lseeln ,v„•_,..o..,..av Cash metrics, net income, and return on assets remain on track. Capital budget spending is consistent with YTD. Spending on capital is underspent with the primary driver of the new plant. The cost for long lead procurement items hasn't started yet so capital spend is 8% under rather than 31%. Ratios are consistent with the last few months. For Employee Data there is an FTE of 39 temporary employees. The budgeted headcount is 754 and it is higher this month because of V S.T.E.P. students. There are 700 active employees and 40 positions posted. Cash Reserve Policy & Resolution Scott Taylor, Finance Manager, presented the proposed Cash Reserve Policy Resolution. Currently, BWL operates under an informal policy. Mr. Taylor stated that it is a best policy practice to have a formal policy, which expresses a commitment to maintaining adequate reserves and remain financially sound, and rating agencies look favorably on such a commitment. Clearly defining the requirement and commitment to it, with a resulting slight increase in the target of days cash on hand, are the goals in the proposed policy. For each year of the six-year forecast the new policy includes a minimum cash reserve amount based on the following five risk factors: • Operating expenditures • Return on equity to the city • Historical plans and service • Debt service • Capital improvements Mr. Taylor reported that the policy is intended to be self-correcting and self-regulating by requiring that each budgeted forecast meet the minimum requirements. If the cash reserves were to fall below the minimum, the board would require necessary corrections in the next budget and forecast. Commissioner Ross asked that since a goal of the policy wasn't to increase the target of days cash on hand but there may be a slight increase, what would happen under the current conditions if the policy was in place today. Mr. Taylor responded that the minimum cash days on hand would range between 153 and 159 days over the forecast period. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the Cash Reserve Policy Resolution to the full Board for consideration. Action: Motion Carried FY 2019-2024 Budget & Forecast Presentation & Resolution CFO, Ms. Shawa presented the FY 2019-2024 Budget & Forecast and Resolution. i,. .Forecast BWI.SNaI.9i<Oble[trve3 •1:'ey e�d9�t end Ferecaat Aa Wmptrona • •SalesYoWme History aw Fon<est byl dity r......�.,, •OWrenny Budget end Fereu<t w.,swn •Cep,ei Budge,eM Fere<•st Neat SNFa a� � u•ruu lwmnwnr«ry.sem.rw.a«w. •main,<kr luyn c.wN wuy tr„w.,..•,...,d,...r.aA,..ws<.r..,l...w,.wwr: •hr.n�hl'.,W.Warn rM l'.•unWa,dMnrddw BtY •Lawn A+M,Ysn..xrl�ak enq.�'.4,:.w.ry..n uw[ a4Ln romnx«ar rarmulayr+4v,r uJ. MrV rnlnn•pw[ ,na+•.m r...wror•v.rn<•u�+•'rrea.w•nr•[pr.<. rw^'r nfnm Yrnror0.[at^[w.r nwr..mw ar..v W n..r..ninr ri[,.+ay.r.r..:rrn.•rr..r:rw.....r.n.n.grw.+ •Ren en A.sn. ^.,»•.� t+sn.e .. ,a,.�w •a cu.a.,......•.r....,,...r.r..a,..w n. KHr:wnvw.w.•na�rY..p...r.-wr[wom.a�...a ..I al[e•••.•[k•rr,:r..t.+drmvnwaY rar•i�.•yuwrrNin.+r M.mn rY '^ a�e.RaWr.p.. wrm �Ri.MrItaM RNernmF.N,irene+f ,.w.w.<.n.•.,r•rwa,,,v,,..rr. w,r<r wrw.rw<nnwral �MrnrecnttlBMe<penu us<r<aus,e.cR.S gfrxi,were upped rc[n 8t>a1Or Un•pteeiOrr<(Mel yeN. .�.,.er � '.F+w!:� w.._ �iA'tiI(.:.` •E[kertlrontilans lrom WsNwdoperationtoaseMwui<apxity `""` ,��« .«atr<[r.•<lanwtry,e[q. .__� TMsl em&yee[mm[isb[Mgetedat 751 Fm FY a ,arrdMfi— ..-« ,,,• in<a[b—dinq vvw, Rewrn on Fgulq to irre<nYrrneen at 6.aK ara,m.nr«.ra..nwa,.w w. < .<r..w•I,a,..�• r aB.nwaw MAai whavNtsWr •The new pL its nptvetbnal in eddycaln+d•ryar)o1r. r [MxM into[nt is capitaBxM Mninq the plant[m<tnHtiM perwd. «� iP!! 'Msja'steam[,ntanur[omracl e.pireslktMre.wv.F'orecast � ,. assurnn[omrxt is r<nrw[•d. y rn rvr ry*•`n[mr•nin r•1»n`+Iw r a.,M,r _ i._%alh i.,_su.IR i r.•w i_.�i_iiiu y L=ra L.ssl.Y�r i�tatf'L�YSi:a' <Yw Rntun wnrvrrltV 4-.�xh)..-tL 1L •u l.��RY�3.-H�': .wwr ! � _�v �. L-3lYx L_S.� •^_ir'L_W!.C.�_I_!,x rx....r .�.m:"�-•'.-`.-.�! A v Pawn m.n...tr F) r-v wfawA m.Mw'.^ttn'wJRoYutafmYnv rz •fiowre Cormittn tV+aepr.of pefoMtd,tMOMf<tiB—d Capital f...la FY Sm9-Sou a�'lweonnvnd tot Ibud d Cratvrvoshoers•Myno+.d on M.fy SL Tna9. �f ,tkfard MCmmn+.orre.<to a{�.o+ar aA P+f'^tM the f V>of9 • f'.R' armdMnl9et ervf fie nirp tM CiYCInk wBM fodsysd sppovd. Cn.C4.Y a.MnVc<+p dat AN��H1wvf A•tl RdwrrArnW .(food MCaaatPsfwrarAtP aP P forted,MUprwtl.q aM fapitdfaeuAlafY 9 <afd b 1tM fapiW �. It IaeAaat totM Maya PK to IXfoMLmB ;.t �<eyMm.uaS rr nb - fa. t '4'a v (rea.nwxfrr!:,•.. �� i.>urpprwvf Von tntMtMrry VM.hlatabe. commissioner Jester asked whether the wholesale electric revenue forecast was inclusive and whether it is a known bilateral arrangement, anticipated bilateral arrangement or an interchange. He explained that an interchange means that BWL will be buying and selling power to the miSO wholesale market which is a short term market and wanted to know the risks. George Stojic, Executive Director of Planning and Development, responded interchange. Commissioner Zerkle asked about the change in Net Income in FY 2022. Ms. Shawa responded that the financing of the new plant begins in FY 2019 and in the second half of FY 2021 the new plant will come online and there will be a half year depreciation with interest capitalized only for that half year. Ms. Zerkle also inquired about the 6-year capital by utility and location and whether there were funds set aside for repairs for Eckert and GM Peffley responded that there was through O&M. _ Commissioner Jester asked for what the $148,00 was designated at Eckert. GM Peffley responded it is designated for costs for closing the plant. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the proposed FY 2019-2024 Budget & Forecast Resolution to the full Board for consideration. Action: Motion Carried Capital Exceedance Resolution CFO Heather Shawa introduced the Capital Project Exceedance resolution by briefly explaining that the budget for the project described in the resolution exceeds the amount originally budgeted and requested approval for the projected final cost of$3,900,000. d result with Commissioner Ross commented that the six-year process doesn'a ked ewhetherghe processar to be iving the t snaseeff cient and respect to the capital project exceedance. Commissioner Ross transparent as possible. Commissioner Zerkle commented that the information is helpful for ranking priorities but not for approval six years out. Commissioner Mullen commented that the capital project exceedance goals were set specifically due to an stated that in one to incident where a considerably larger amount of money was to be spent.whether six eyear goals were r quhred to be three years required explanation or resolution but questioned adhered to. of GM Peffley responded that a presentation on how finances are estimated, Board Ms.budgeted, Shawa added hat labor, accuracy over each phase of projects would be beneficial for materials, and other costs may change over time. Commissioner Zerkle commented that it would be helpful to provide reports given at prior meetings to compare with current reports being provided. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the Capital Exceedance Resolution to the full Board for consideration. Action: Motion Carried Internal Audit Open Mana-_ement Response Quarterly Report Chief Financial Officer Heather Shawa presented management's responses to audits as follows: W- STATUS OF\1•AN.AGE]IENT RESPO\SES TO AUDITS lv Accosdmce Dish Board Rrwlunon+s_014A7A5 APRIL 30,2018 Updrnap ir;ncr lsru Dale Responsible Srams Audi,`7ame Isssu Descnptlon dr<a !ao Humvs lipd.,;uq�.of�bdc:cnptlon;rs•.:<!I mniensap,ssith estimased project 46 prsforsvann W-1A1.btsec.0 dedjebdescnpt—be h. Rnom<rs cenyslesion,670`I9. E,.1= & updated Camprasanon P g gcomp erfoss— Imemlds:dil recommendedincreasingflexsbilip'aci0s ,0- R— Apllanfv`dTMoulm`ba[e'mdsmealr'Rnmssu tuarin,IF.k toshbon.'ill+ 47 P ti� PP Fs 1=t-&- aw•sads V—"increases, a_019 pedoaua:renmuF mrul niie,wdl br fssu:=ed mrJ Cam)xnsatiw ccssemcuorteJ In n•�:.veemr•?In 7;1.15 51 COB1T Imernol Asdil noted than norm-shouldeondnuranas 7017 Tseclmofon Of14sr.n.dsl o:i•au:e'arr!:eiv:gre{:vned sscenask<<.IO occea<k,.s Consph.,, ezpedgs d a xluduk as possibl<lo ends fvll 17 ' ''' ,..plume syslh the vdopt,d IT go:ersunce 5amessest. , c• 58 As .... lvusr:aI Amfis reca;muevds shas Successsms Plamrme >Lsrcb Hsnmus A—.[updatesiv Ss:cceuirni Plmsning yrocrdma will be draRed and ... Plavnine �F;T procadtnes be Fvma.Oly appmsxdmdvpdatmsally. '_01S Rrsosvcn nsbvunrJ for exrnsdre vunaeement apprasnl by 4'30:18 ed ms 59 Successwv Wt,—i Avdsl cqp=,Ow fug cmct 1posit..,as "hi"h \ h Humor Afi"group ssr dy piloting stool to a::ssl with sdesmfrcanon of `Sn'sours a, ssible 2018 Luc F samces critiril Putt—rvhir will be isvpinrunud ors an organi¢anomseiJe b sis PUnnurg . . W by1261:15, 60 9:cc<s:iov Inse�wl AcsUt supports uaicissg usd dtt ela3nsxm of `018 RHsoancrs (lades:u A—d—sand a's0rcvusume lhron¢h 1-2019��r HWL Plarwn¢ �•T0.m cesvancandidaus Clos<d�•n:,,v i::ac<1.ta:ch cols sr,ns, ;,oar mP opennion 57 [demin•and LntewlAudrl recammevsls acts.,,rovtirme en as Feb Intcrmanon Tice follow uonAh nsc`C1ttrl�ialfo011 irssasuse�of sdobal Access a-F61ed s scbedsde sspmsible to fsdly mTi,—s an 201 S Trchvolagy polity.proarsses,m p hfanagement e[fecnee LAM pmenm smea acwmsss;(3)wplementatiov of an autemaud,)stem tm managing pc¢ile¢ed sscamts;and(4)deplo)mrml or a th-t idmnfmaeon system on en'as. Commissioner Ross inquired about the overdue items. Ms. Shawa responded that she would follow up and provide the information to the Commissioners after the meeting. Revised Investment Policy Statements & Resolution Scott Taylor, Finance Manager presented two revised investment policy plans, the Defined Benefit (DB) Plan which is the traditional pension plan, and the VEBA Plan which hich will more covers the naccurately reflect reavestments d with ) asset providing health care benefits. Refinement in the policy index allocation in both the DB and VEBA plans and changing the discount rate from 7 % % to 7% in the DB plan, which relates to the maturation of the plan, are the main changes for which approval was requested. Commissioner Ross noted that there was an amendment on page 13 of the DB plan changing the total return of the Policy index for BloomBar US Aggregate from 35-40%to 40-45%. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the proposed Revised DB and VEBA Investment Policy Statements Resolution as presented to the full Board for consideration. Action: Motion Carried Other None. Excused Absence sioner Louney, to excuse Commissioner Graham from Motion by Commissioner Price, Seconded by Commis today's meeting. Action: Motion Carried Ad lourn Motion by Commissioner Price, Seconded by Commissioner Louney, to adjourn the meeting. Commissioner Ross adjourned the meeting at 8:45 p.m. Respectfully submitted Ken Ross, Chair Finance Committee MANAGER'S RECOMMENDATIONS General Manager Dick Peffley presented the recommendation for the Return on Equity Agreement with Amendment #4 with a request for approval from the Board. The Return on Equity Agreement is a request by the City of Lansing to extend the Return on Equity payment for two years at the current rate. RESOLUTION #2018-07-01 Return on Eguity(Pay ment in Lieu of Taxes WHEREAS, the City of Lansing has expressed a desire to continue the Agreement dated June 30, 1992, which has been subsequently extended thereafter for payment in lieu of taxes arrangement; WHEREAS, the Board of Commissioners Committee of the Whole (COW) considered the City of Lansing's request on July 10, 2018; WHEREAS, the General Manger recommended the Agreement be extended by two (2) years at a rate of six- point one percent (6.1%), which would be memorialized as Amendment No. 4; WHEREAS, the COW agreed with the General Manager's recommendation and approved the same to be forwarded to the Board of Commissioners' July meeting for approval; and WHEREAS, the COW further directed the General Manager to finalize Amendment No. 4 in light of his July 10, 2018's recommendation and execute on behalf of the Board of Commissioners. RESOLVED, That the Board of Commissioners hereby approve Amendment No. 4 as recommended by the General Manager. FURTHER RESOLVED, the General Manager and Corporate Secretary shall execute Amendment No. 4 on behalf of the Board of Commissioners. Motion by Commissioner Ross, Seconded by Commissioner Thomas, to amend and approve the resolution for the Return on Equity Agreement with Amendment#4. Action: Motion Carried, UNFINISHED BUSINESS There was no Unfinished Business. NEW BUSINESS There was no New Business. RESOLUTIONS/ACTION ITEMS RESOLUTION #2018-07-02 Appointment of the Charter Position of Corporate Secretar 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 1st 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 2018-2019 or until a successor is appointed, whichever last occurs: M. Denise Griffin, Corporate Secretary FURTHER RESOLVED, That the Chair of the Board of commissionersadjustments recohorized to execute any and all mmended by the Human Resources contractual amendment documents which reflect merit Committee for FY 2018's performance. Motion by Commissioner Louney, Seconded by Commissioner McCloud, to approve the reappointment of the Corporate Secretary for Fiscal Year 2018-2019. Action: Motion Carried. RESOLUTION #2018-07-03 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 1st 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 2018-2019 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 2018's performance. Motion by Commissioner Thomas, Seconded by Commissioner Zerkle, to approve the reappointment of the Internal Auditor for Fiscal Year 2018-2019. Action: Motion Carried. RESOLUTION #2018-07-04 Appointment of the Charter Position of Director and General Manager Th e 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 1st 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 2018-2019 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 adjustments recohorized to execute any and mmended by the Human Resources contractual amendment documents which reflect merit Committee for FY 2018's performance. Motion by Commissioner Thomas, Seconded by Commissioner Louney, to approve the reappointment of the Director and General Manager for Fiscal Year 2018-2019. Action: Motion Carried. RESOLUTION #2018-07-05 Board Policy on Follow-up to Internal Audit Findings & Recommendations General Responsibilities: Internal Audit. The Internal Auditor is responsible for performing the annual Internal Audit Plan approved by the Finance Committee of the Board. This includes but is not limited to: 1. Informing management of any potential issues during audit engagements and briefing the results of audits including any findings prior to releasing a draft audit report to management. 2. Formally presenting the results of each audit engagement in writing. Reports of audit will include any reportable findings, recommendations, and management's responses to the findings and recommendations. 3. Following up on previous audit findings and management responses to ensure that the corrective action(s) noted in the responses were in fact taken, and that those actions corrected the problem(s) identified. Management. Management is to respond with actionable responses to each reported finding and recommendation in the internal auditor's report within an agreed-upon timeframe. Each management response should contain the following: 1. Acknowledgement of agreement (or disagreement if applicable) with the audit finding and recommendation. 2. A specific action or actions being taken (or completed)to address the problem(s) noted in the finding and recommendation. 3. A statement that either affirms that the stated corrective action(s) has/have already been completed or, if not, an estimated date when management believes the corrective action(s) will be completed. The estimated completion date should be management's best estimate, based on available resources, priorities and schedules as to when the corrective action(s) can reasonably be expected to be completed. Follow Up of Open Management Responses to Audit Findings: 1. Schedule of Open Actions. For each management response for which the corrective action is to be completed by an estimated future date, a schedule will be developed to track, on at least a biannual basis, the status of such corrective action(s) until they are completed. a. There should be a notation biannually regarding progress toward completion of the corrective action. If other priorities precluded further progress during a biannual period, this should be so stated. b. The Internal Auditor will receive an updated schedule biannually and keep the Finance Chair apprised of action completion and status. 2. Schedule Usage. ment will use the schedule as a tool for reporting progress on open a. Management. Manage — corrective actions to the Finance Committee biannually. b. Internal Auditor. The Internal Auditor will use the schedule to help in future planning efforts and to ensure that management's corrective actions are being implemented as stated in the management responses to audit reports. (This Resolution supersedes RESOLUTION#2014-07-05 adopted on July 22, 2014.) Motion by Commissioner Ross, Seconded by Commissioner McCloud, to approve the Internal Audit Management Response Policy Amendment. Action: Motion Carried. RESOLUTION #2018-07-06 Internal Audit Plan for FY 2019 RESOLVED, That the Board of Commissioners hereby approves the Internal Audit Plan for FY 2019. Motion by Commissioner Ross, Seconded by Commissioner McCloud, to approve the Internal Audit Plan for FY 2019. Action: Motion Carried. RESOLUTION #2018-07-07 Internal Audit Charter Approval the Internal RESOLVED, That the Board of Commissioners hereby approvesAudit Charter as amended to which by the conforms to the International Standards for the Professional Practice of Internal Auditing, promulgated Institute of Internal Auditors. issioner Ross, to approve the amended Internal Audit Motion by Commissioner McCloud, Seconded by Comm Charter. Action: Motion Carried. MANAGER'S REMARKS General Manager Peffley commented on a well written article in the of MidMEAC ht which ref Why erenced edtse�eral Renewable Energy, written by Theresa Lark, the Executive Direct things the BWL is doing regarding renewable energy. COMMISSIONERS' REMARKS Commissioner Sandra Zerkle thanked the Board for support in the election and congratulated GM Peffley on the State of the BWL meeting. the Commissioner Tracy Thomas congratulated Commissioner McCloud on ismarriage the HR evaluationsand Sue Warren on and Lifetime MMEA award. He also thanked the Commissioners for timelyresponses su port received from Commissioner Mullen, HR Executive Director Michael Flowers, and Executive Assistant p Smiljana Lazic. r Price also noted Chair David Price thanked the commissioners for the work done in the pertyear. thrGr halm to four-year termst the city Council reappointed Commissioner David Price and Commission four-year ter the He stated that he will appointing Committee Chairs over issioner Sandra Zerkle next couple of eCommissioner Air Price nthony Executive Committee: Commissioner David Price, Comm Mullen, Commissioner Anthony McCloud. Commissioner Ross, to approve the Commissioners appointed to Motion by Commissioner Price, Seconded by the Executive Committee. Action: Motion Carried. MOTION OF EXCUSED ABSENCE Motion by Commissioner Ross, Seconded by Commissioner Graham to excuse Commissioner Anthony Mullen from this meeting. Action: Motion Carried. PUBLIC COMMENTS Randy Dykhuis, Lansing, encouraged the BWL to set a date certain for BWL to be 100%fossil fuel free before 2040. Carol Rall, Lansing, congratulated Sue Warren on the MMEA award, and spoke about reliable energy. ADJOURNMENT Motion by Commissioner McCloud, Seconded by Commissioner Thomas to adjourn the meeting. Chair Price adjourned the meeting at 6:04 p.m. M. Denise Griffin,Corporate Secretary Preliminary Minutes filed (electronically)with Lansing City Clerk: 8-2-18 official Minutes filed (electronically)with Lansing City Clerk 9-27-18 Approved by the Board of Commissioners 07-24-18 Hometown People. Hometown Power. MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT May 22, 2018 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 May 22, 2018. Vice Chairperson Anthony Mullen called the meeting to order at 5:30 p.m. Present: Commissioners Beth Graham, Dennis Louney, Anthony Mullen, Ken Ross, Tracy Thomas, and Sandra Zerkle. Non-Voting Commissioners present: Douglas Jester (East Lansing), William Long (Delta Township) and Brian Ross (DeWitt Township). Absent: Commissioner David Price, Commissioner Anthony McCloud The Corporate Secretary declared a quorum. Commissioner Tracy Thomas led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Graham, Seconded by Commissioner Thomas, to approve the Regular Board Meeting minutes of March 27, 2018. Action: Motion Carried PUBLIC COMMENTS None. COMMUNICATIONS Electronic Mail received From or Re: a. Electronic mail from Evelyn Fratzke re an increase in BWL service charge - Referred to Management. Received and Placed on File b. Electronic mail re power outages at Court One Medical Professional Building - Referred to Management. Received and Placed on File COMMITTEE REPORTS COMMITTEE OF THE WHOLE Meeting Minutes May 15, 2018 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 15, 2018. Committee of the Whole Chair Tony Mullen called the meeting to order at 5:30 pm and asked the Corporate Secretary to call the roll. Present: Commissioners Tony Mullen, Dennis M. Louney, Anthony McCloud, David Price, Ken Ross, Tracy Thomas, and Sandra Zerkle and Non-Voting Member: Doug Jester (East Lansing). Absent: Commissioners Beth Graham, William Long (Delta Township) and Brian Ross (DeWitt Township). The Corporate Secretary declared a quorum. Public Comments None. Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner McCloud,to approve the Committee of the Whole meeting minutes of January 9, 2018. Action: Motion Carried. FOIA Policy & Procedures & Resolution General Counsel Brandie Ekren introduced Paralegal Elissa McDaniels who summarized proposed revisions to the BWL Freedom of Information Act (FOIA) Policy & Procedures. Ms. McDaniels stated that the BWL, as a board, generally address FOIA compliance in its Rules of Administrative Procedure Section 19.4, which is in alignment with City of Lansing, and in accordance with PA 442 of 1976. After reviewing the current policy and consulting with the Lansing City Attorney and Lansing City Clerk, staff proposed a revised FOIA Policy. This Policy would remain in alignment with the City of Lansing but there would be some operational changes. A summary of changes is outlined below as well as some benefits to the BWL and its Customers. City of Lansing Policy BWL Policy Section 1. FOIA Coordinator = Updated to reflect BWL Lansing City Attorney General Counsel as FOIA Coordinator Section 2. How to submit Modified to BWL contact request information Section 9. Appeal goes to the Appeal goes to Chair of the President of City Council Board of Commissioners LFOIA Training Updated to align with BWL training practices II. Receipt/Intake of FOIA Updated to align with current Request practice of Legal Analyst intake, logging into BWL electronic filing log system III. Requesting record from Updated to align with actual applicable departments BWL electronic filing system and provide notice to COL City Attorney in alignment with collaborative efforts with City VI. Law Enforcement Struck law enforcement references (p. 15) references as inapplicable to BWL (p. 15) Vill. FOIA Payment Intake (p. Process to BWL Accounting 15-17) and file copy in BWL Follows COL's internal electronic filing system under deposit slip procedure the FOIA log (p. 17) Benefits to the BWL and Customers Increased clarity for requestors Streamlined process for FOIA processing Increased efficiency for Appeals process Compliance with FOIA timelines & other requirements Commissioner Mullen and Zerkle presented questions regarding the appeal process and the role of the FOIA Coordinator, General Counsel Ekren clarified the intent was to follow the statute which denotes that FOIA appeals are directed to the head of the public body, which is the Chair of the Board. General Counsel Ekren further explained that the revised FOIA Policy clarifies that the FOIA Coordinator is the BWL General Counsel as opposed to the "BWL Attorney" as the BWL has several attorneys performing work for the BWL both internally and externally. Commissioner Ross presented questions and requested clarification about the appeal rights when a fee waiver request was denied, and why we had non-profit discount fee language for one type of non-profit but not all non-profits. After some dialogue it was determined that, in both cases, it was due to the fact that the BWL has not had much experience with waving fees/consideration, staff would obtain background information from the City of Lansing, because the proposed language was taken from the City's template. General Counsel Ekren concurred with Commissioner Ross' recommendation to modify Section 9 of the policy and procedure document entitled Appeal of an Excessive FOIA Processing Fee to include language that would allow a requestor to appeal the FOIA Coordinator's denial of a fee waiver, or discount request in the same manner they appeal the amount of a fee. The Board directed Legal Counsel to solicit input from the Lansing City Attorney on this requested modification and proposed a subsequent adjustment to the policy and procedures after receipt of the City's data. General Counsel Ekren will also solicit background information from the City on how they consider fee waiver requests and the non-profit discount fee language. In conclusion, although the policy and procedures would be approved at May 22, 2018 Board meeting as presented, it could be amended later to incorporate the proposed modifications to Section 9. Motion by Commissioner Price, Seconded by Commissioner McCloud to forward the FOIA Policy Resolution to the Board for consideration. Commissioner Ross requested the right to reserve for amendment pending the outcome of General Counsel Ekren's findings to his questions. Action: Motion Carried. Customer Satisfaction Survey General Manager Peffley introduced Bernie Porn, President of EPIC-MRA, who reviewed the results of the Customer Satisfaction Survey that was conducted in March 2018 and the comparisons to the some of the survey results from 2015. ..t.. t 11 I)"I,r th p ,idin, I Ih ci •in-10 1) l lih r mblhty,dlordahiht, 4 I cuu wn ices jI Yut den yams n cr p:nl t cear. EPICAMA Hometown People.Hometown Power, Lansing Board of Water and Light I Customer Satisfaction Survey N.,Ibynal Cll t...,S.—y r d.1rd 11111 '1 2.1. 1aFW f I—PIc.1".J.y. rlYorl.tr:.In ea ley lea IHI en ,ea Mr. IPI w r S,Ihd nlcyurity. 6-In-Ill p"J"d"Cloping renewable energy 'what are die pul%t to leant ured AND inn6finea ttatural gas fired plant methods ofreporting a power outage-'' �s gig t -71 TT I ! �hrc dean s-m-1 o,atisfied frith exln,ience of What are the most to least used method,of eornaoine the Ncar 9.in-10 satisfied with,experience of contacting MI. .0 ntacuo- 1 iR'I.to rcp.m a Fx»Yer rtutagc 'N,V,.for reasons other than reporting a power outage" � •°for teaspns other than reporting apower outage Ala U t.il I Near unanimous satisPoction with Mijority.wys Umt BWL is doing the right au um ll 1— Nearly 8•in-10 said cncipy provided for economic experience of paying BWL.bilk trimming while proaccting appearance of ir— dcyclopmcm atop priority or very important w wr re. w. a. sn in z a�it',i p,mam Ibr B%VI 6-in Ill u,t n cN n il',i importam to m+tall Where BW�L4�oustOrtxn get their Io offc,prt+ t.11Yi 1+nl:ltl.lii`1","t It- .n1.1r.I11Cl�lti ill i.l.i�i11 i•1 Il++nt�} w� , �bilmuttlon about local govLmntrnt ._.. r•,„.. I K,a...,m„....,. r v ..., .. , ..., . „»...,...,.., ...., � .,�r,61s+Na rnwlwuW+•�w '° Y(NMAw1YM1,I1M l Y�iIrM) f I 1 � I U+r RARIM/wNrM1 WMlnrr/ r arr r (rI Commissioner Zerkle asked if there was a method for reaching and informing customers of the benefits of smart meters. General Manager Peffley responded that since almost half of the housing in Lansing are rental properties and landlords aren't concerned with utility services, as they are not responsible for paying them, the BWL is working on initiatives to inform landlords of the benefits of new heating systems as it relates to tenants. Mr. Porn responded that energy use management programs will be helpful for customers also. Commissioner Jester asked whether there were any other items that caused fluctuations besides geographic and demographic variations. Mr. Porn responded that family size and income were additional factors. Commissioner Price inquired about the capital income differential between Delta Township, City of Lansing, and City of East Lansing. Mr. Porn responded that he believes there are significant differences in household income between those areas. General Manager Peffley stated that the survey includes this information. Commissioner Ross asked if the Board conducts any type of internal customer surveys and if so, whether the numbers align with the results of the presented survey. General Manager Peffley responded that the BWL does not. Commissioner Zerkle commented that adding a caveat to any published material regarding the survey stating that the BWL will reach out to its customers and provide information on assistance that may be of help to them. General Manager Peffley responded that even though customer approval rating is high, extra steps will be made to acquire higher approval of all customers. Commissioner Jester congratulated the staff for earning the high customer rating. He commented on the costs for low income customers and requested a change to the way their rates are calculated. Commissioner Ross asked if smart meters are the way to better ratings and to give the customer control. He also commented that the energy efficiency programs are mostly helpful to larger customers. Planning , Vegetation Management I. Mock planned blocks in quartersectiom trimmed in rY14 * 45Wocksporquarlcrwction 41h Year of 5 Yeof Trfmming Cycir. . Compared old pbnned work to cJeate new work plan if this area ware going to t o trimmed FY IA 0 Currently In the 41"year of our cycle;there will be another year of growth. NELG18 Work Sample ,n Numbof of irons ary CaNEtiEE ANU t;k?,CL F,rr... ;'-.. Plans on NELG18 ® Pictures of Re-Growth 701 a Pions 3018 Plans - r 44 addresses ?b add,e need trimming - !.few addm yes rct�r:�b rein ak s 6 addresses re added C.Ili rg to idnjlr beer has-111 nid in d-,A.g roil cycles g,.Mh Pictures of Re-Growth.:.. Comparison •, L r pis Conclusion of NELG18 ► OI oil the yards walked out,roughly 60%needed trimming on next cycle ��(/I ► Of that 60%.most treew r es seemed to he Maple trees suckering back S 1 t L G 2 1 ► A felusals could be remmatSnext cycle ► Smog amount were trimmed before the no-overhang policy ► Considemblo grow tack to the 4 years;will still require a fair amouN `014 201it of trimming next cycle. MOORES RIVER PARR/P SWLG21 Work Sample SWLG21 thrmberot Trees ► Aroa Wong the Grand River near Moores Rirer Park a—_._._.__.......__._. ____...___....___.._.._.___.... ► Ara a consists of many mature City lreei ► City dausn'twont.—,.Is so hat—a mount of suck..,gowlh —�"� ,___,-_- �_------- .Alayseo moeasemremovaF,inn'm knes due loretrimaung hard trimmed "^4>t' trem Imm last<ycb ."—_— .._ ► Most common from grown b xk are Maple or lok—that grow like woad, .these ore the fastest gassing species -- -"� --� ► Mast of frees nestdieg trimming are bucket huas ► So,—trees were ocom—na for,.mewl.hewavor,homaa —, opted to keep the Imes resulting in any topped hoes that aro now dead or sending new shoot:towards the Ones • 1' Before Trimming and Mowing After Trimming and Mowing 7 ..: Reliability-Tree Related Outages Tree and Primary Down OMS Orders SAIDI Conclusion At least 40 50%at frees trimmed 5 years ago require Itimming -- • • I. Mostly Maple true$are sprMllilb back I. Workload W01 clectect�after �r�is completed 0. Sucker growth wig comp q M [ }.. John Rademacher, BWL Utility Forestry Supervisor assisted General Manager Peffley with providing information on the Tree Trimming agenda item. General Manager Peffley stated that new height appropriate trees are provided to customers as replacement for trees that are cut down. The "Right Tree in the Right Place" program currently in place was paused during budget constraints, resulting in large number of trees needing trimmed. Commissioner Zerkle commented that customers have the liberty to have arborists complete tree trimming to their specifications, therefore, the BWL would essentially not have significant trimming to perform. She proposed a consideration that the presentation and information at hand be provided to City Council. General Manager Peffley responded that the information is available for them and has offered to make the presentation at the next BWL and City Council joint meeting. Commissioner Zerkle also asked if additional BWL tree trimming teams will be instated, opposed to keeping tree trimming contractors after the current tree trimming program is completed. General Manager Peffley responded that opportunities are being explored. Commissioner Price asked whether tree trimming practice is done on the drop from the pole to the house and Mr. Rademacher responded that one to two feet are trimmed so that there is a minimal and adequate opening for the power lines. Commissioner Jester inquired about System Average Interruptible Duration Index (SAIDI) and restoration time. General Manager Peffley responded that SAIDI indicates the total customer outage minutes and the advantages of tree trimming. He also stated that the restoration time is a lot quicker when there is only a recently fallen branch or tree to remove. Collection Practices & Procedures Commissioner Mullen stated that this item was placed on the agenda to answer some questions that the Mayor's office is receiving regarding the BWL's policies and procedures regarding bills and shutoffs when customers get behind on their bills. Bob Perialas, Customer Service Manager, reviewed the collection cycle as well as the BWL's practices and procedures. Additionally, Mr. Perialas reviewed items that are done proactively to help customers, such as payment arrangements and energy efficiency recommendations. Mr. Perialas stated that helpful pamphlet, brochures and kits are available for the public. Collection Cycle IS days 2 days haler 2 days"',., Bill Prints - --• Bill due .-..-.----. La[e Fee .---- 1"Reminder Letter Final Notice Pool ' as oep.nd:on: 5 ams due Final Notice �+ee°fdmial. --- Shut off Eligibility Notice & a°i nn,i n°use, vee°i po°i Phone Call 5 days Shut ON Pool 9 days y Final Notice Expires ' House Vislt:Make Packet for shut off W Customer aware of 21 dovs Depends on: 2l day letter—Sent to y pending shut off ldav sana°e Medical Alert Account «ai a«°„nn me uooi Hard Copy Off General Manager's Update General Manager Peffley spoke about the following items: 1. Sex Trafficking Awareness: news story done by Channel 6 2. Adopt-a-River: 25th year anniversary 3. Building Trades Article 4. WJR Radio Interview on May 17, 2018: How Lansing is innovative on solving the infrastructure problem in Michigan 5. BWL Employee Scott Hamelink spoke on lead service replacement at the Creating Healthy Communities: Get the Lead Out Conference 6. BWL employee Randy Roost will be speaking on lead service line replacement at the Engaging Local Government Leaders Conference in Denver. 7. The 1st S.T.E.P. Graduation is Wednesday, May 16th at 4 pm at the Depot Other Commissioner Price commented on the placard that is being provided to Commissioners to place in their vehicles during meetings held at the BWL. He also spoke about the follow-up email that was sent to the Commissioners from the Community Service Commission that oversees the AmeriCorp program in Michigan. The BWL was selected for a Governor's Service Award for corporate community leadership. The event will be held at the Wharton Center on June 51h and Commissioner Price encouraged attendance. Commissioner Price also said he participated in the Adopt a River event on May 121h and helped with the hand out of trees. An email was sent to all Commissioners from Internal Auditor Phil Perkins regarding a meeting he had with Commissioner Louney who provided suggestions for potential candidates for apprenticeships and other bargaining positions. Commissioner Price requested that this topic be presented for discussion. Commissioner Mullen responded that the General Manager and his staff are working on filling these positions. Commissioner Louney provided some background on the process and suggested that regular reviews be put in place. Commissioner Zerkle concurred that follow-through is necessary and succession planning needs to be further designed. General Manager Peffley responded to Commissioner Price's comment that part of the BWL's strategic plan is to ensure that the employees currently at the Eckert station have positions at the BWL once Eckert closes, as such, some positions have been held open for that reason. Adjourn Motion by Commissioner Price, Seconded by Commissioner McCloud to adjourn the meeting. Meeting adjourned at 7:27 p.m. Respectfully Submitted Tony Mullen, Chair Committee of the Whole Commissioner Ken Ross presented the Finance Committee Report: FINANCE COMMITTEE Meeting Minutes May 15, 2018 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, on Tuesday, May 15, 2018, Finance Committee Chair Ken Ross called the meeting to order at 7:31 pm and asked that roll be taken. Present: Commissioners Ken Ross, Dennis Louney, David Price, and Sandra Zerkle. Also present: Commissioner Anthony Mullen, and Non-Voting Commissioners Douglas Jester (East Lansing). Absent: Commissioner Beth Graham, and Non-Voting Commissioners Brian Ross (DeWitt Township) and William Long (Delta Township) The Corporate Secretary declared a quorum. Public Comments None Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner Louney, to approve the Finance Committee meeting minutes of March 13, 2018. Action: Motion Carried, March YTD Financial Summary Chief Financial Officer (CFO), Heather Shawa presented the following: .eatm3 �z_..£i. '3 ar..aua .{—c.—naz'travf +cize2"4rt3�-. §{"v �?i I f ('ash I.—u.st ilc l Y1 l) Ratios LZoVen Dada ,~•— .�.�'—. ry G Uudgrl status Y11) k M R"W on Assets_ v.....,.� ..» ,._. Y Cash metrics, net income, and return on assets remain on track. Capital budget spending is consistent with YTD. Spending on capital is underspent with the primary driver of the new plant. The cost for long lead procurement items hasn't started yet so capital spend is 8% under rather than 31%. Ratios are consistent with the last few months. For Employee Data there is an FTE of 39 temporary employees. The budgeted headcount is 754 and it is higher this month because of 11t S.T.E.P. students. There are 700 active employees and 40 positions posted. Cash Reserve Policy & Resolution Scott Taylor, Finance Manager, presented the proposed Cash Reserve Policy Resolution. Currently, BWL operates under an informal policy. Mr. Taylor stated that it is a best policy practice to have a formal policy, which expresses a commitment to maintaining adequate reserves and remain financially sound, and rating agencies look favorably on such a commitment. Clearly defining the requirement and commitment to it, with a resulting slight increase in the target of days cash on hand, are the goals in the proposed policy. For each year of the six-year forecast the new policy includes a minimum cash reserve amount based on the following five risk factors: • Operating expenditures • Return on equity to the city • Historical plans and service • Debt service • Capital improvements Mr. Taylor reported that the policy is intended to be self-correcting and self-regulating by requiring that each budgeted forecast meet the minimum requirements. If the cash reserves were to fall below the minimum, the board would require necessary corrections in the next budget and forecast. Commissioner Ross asked that since a goal of the policy wasn't to increase the target of days cash on hand but there may be a slight increase, what would happen under the current conditions if the policy was in place today. Mr. Taylor responded that the minimum cash days on hand would range between 153 and 159 days over the forecast period. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the Cash Reserve Policy Resolution to the full Board for consideration. Action: Motion Carried FY 2019-2024 Budget & Forecast Presentation & Resolution CFO, Ms. Shawa presented the FY 2019-2024 Budget & Forecast and Resolution. Budget , Forecast •BVVL Sirat+pic Obja<nrn •Yay Oud9at and Gontaat Aaaumpt�an, S. Voluma Ni,to and Fan att by Utility r.—.r.....,. •Opa11-9 uud9at d Fonta,t vv�.,... -Capital nudgat and Fontast •Na.t tap, Mm,ww,wpla Irenamrrsawrr, rw..... 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He explained that an interchange means that BWL will be buying and selling power to the MISO wholesale market which is a short term market and wanted to know the risks. George Stojic, Executive Director of Planning and Development, responded interchange. Commissioner Zerkle asked about the change in Net Income in FY 2022. Ms. Shawa responded that the financing of the new plant begins in FY 2019 and in the second half of FY 2021 the new plant will come online and there will be a half year depreciation with interest capitalized only for that half year. Ms. Zerkle also inquired about the 6-year capital by utility and location and whether there were funds set aside for repairs for Eckert and GM Peffley responded that there was through 0&M. Commissioner Jester asked for what the $148,00 was designated at Eckert. GM Peffley responded it is designated for costs for closing the plant. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the proposed FY 2019-2024 Budget & Forecast Resolution to the full Board for consideration. Action: Motion Carried Capital Exceedance Resolution CFO Heather Shawa introduced the Capital Project Exceedance resolution by briefly explaining that the budget for the project described in the resolution exceeds the amount originally budgeted and requested approval for the projected final cost of$3,900,000. Commissioner Ross commented that the six-year process doesn't appear to be giving the intended result with respect to the capital project exceedance. Commissioner Ross asked whether the process is as efficient and transparent as possible. Commissioner Zerkle commented that the information is helpful for ranking priorities but not for approval six years out. Commissioner Mullen commented that the capital project exceedance goals were set specifically due to an incident where a considerably larger amount of money was to be spent. He stated that goals within one to three years required explanation or resolution but questioned whether six year goals were required to be adhered to. GM Peffley responded that a presentation on how finances are estimated, budgeted, and the percent of accuracy over each phase of projects would be beneficial for the Board. Ms. Shawa added that labor, materials, and other costs may change over time. Commissioner Zerkle commented that it would be helpful to provide reports given at prior meetings to compare with current reports being provided. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the Capital Exceedance Resolution 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: STATUS OF MANAGEMENT RESPONSES TO AUDITS APR1L 30,0_013 Ia Accordance nith Board Rmohmon d_s014-07-05 Gn7nra:in r,vi Isante Audil Name I—Descnpnou Date ReT—ible Status 46 Performance Internal dude recommended job descnphons N Jan Human UpAvmj!o,+;eb dcscnp:wn•.a udl m:'_ensac.mith eaomated project Esotuanonx updaud. 2017 Resources cumplenonby670119. Conspeosenon 47 Performance lnurmsl A,&urotnmended msaeasmg t]enbdiry'-th Jan Human A plan for decouphng base and=ril increases u r<aring<ompletion.Tue E,hI-i®h nudnsg merit incr<aus 2017 Reatuces nsp<ndu4;msmrnmul zsfnrnz,h:m.app4cabk to stm nr:al Comprna(m a u 2019 pmdam.uer o:ana cemesd cyole.tnll be fmalced an•l uc-d Ic maua-xmrnd by 711;13. 52 COB Inlemal,itiwed du toctionsshosddeoonnueauas Juoe Grformatioo Off^.•asa invoh•ca,J3 aml:cing rrly:ned ascnn:plu:e,l0 m:trac..i Camphau<e "pediled a xhedute a possible to reach fu0 a_017 Teclmoloep ucaa.:cd 1 omplianre ,1h the adq,t d IT gosemaoce @ansnrost. 58 Anccessmn Internal Auditmmmueds char S.—ion Plummy SLvch Huuzsn Annul updale..Si—you Fling pracedsue:will bedra6cd and Plannine hTR'p,.,,b.ea be f—B-v app,—d and updm,d annually. 3019 Rrsa—, aubained for esecudce ounaeemenr aypmsal by 63M8. 59 Interml Audcl.supporaa dcrnfyiae canac.1 ponnans as Much Human Afoau group rs--dy prlotinga toolm—nt pith ndamhcaoon of Planwg :IEA'somr as posable. 2018 Pewmces raitiril positions niirh nill br irnplemmted on anorganinsoan-uidebsis by 1 a!31'18. 60 Slim.. Iataaal Audit rupp—nainng and deseloyrnmt of Stsrch Htmzm Caudidaa esussmrnd and desdoymrm u<tmdrJsrap,ns pan of she BWL Platming NETT sureeruen candidates. 5019 Resources I:adentap Academy,and will continue through June.019. C:In:e.i'a;s:,•s(once\1.neb 1018 repnnj: 57 Identinvnd Intenul AuNlrecammends actsmta ronturue an as Eeb Infumanon the ielloair�¢actiouhace been<empleled:(q uaflw o.HiM open. A— eaPednnd a xhrdsde as pse:sible 10 Adl�m Phnorm an 2019, Techoolag)• polir,prxesses,and prxedsues;(3)removal stall ivtmces ofglobal hfana_emrnt efflcoce LAM Pmgrarn a<r acceuuts;(3)implrmenWfioo atan aufom ted scsttm for mamgioe prhileaed accoums;and(4)deplo)meul of a threat idennf aeon system on a_ s. Commissioner Ross inquired about the overdue items. Ms. Shawa responded that she would follow up and provide the information to the Commissioners after the meeting. Revised Investment Policy Statements & Resolution Scott Taylor, Finance Manager 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. Refinement in the policy index which will more accurately reflect real asset allocation in both the DB and VEBA plans and changing the discount rate from 7 % % to 7% in the DB plan, which relates to the maturation of the plan, are the main changes for which approval was requested. Commissioner Ross noted that there was an amendment on page 13 of the DB plan changing the total return of the Policy index for Bloom Bar US Aggregate from 35-40%to 40-45%. Motion by Commissioner Price, Seconded by Commissioner Louney, to forward the proposed Revised DB and VEBA Investment Policy Statements Resolution as presented to the full Board for consideration. Action: Motion Carried Other None. Excused Absence Motion by Commissioner Price, Seconded by Commissioner Louney, to excuse Commissioner Graham from today's meeting. Action: Motion Carried Adiourn Motion by Commissioner Price, Seconded by Commissioner Louney, to adjourn the meeting. Commissioner Ross adjourned the meeting at 8:45 p.m. Respectfully submitted Ken Ross, Chair Finance Committee MANAGER'S RECOMMENDATIONS There were no Manager Recommendations. UNFINISHED BUSINESS There was no Unfinished Business. NEW BUSINESS There was no New Business. RESOLUTIONS/ACTION ITEMS RESOLUTION #2018-05-01 Board of Water and Light Freedom of Information Act (FOIA) Policy RESOLVED, pursuant to the authority of MCL 15.240, PA 442 of 1976, and Section 19.4 of the BWL's Administrative Rules of Procedure, the BWL approves the FOIA Policy as recommended. BE IT RESOLVED, the FOIA Policy is effective upon approval. Motion by Commissioner Ken Ross, Seconded by Commissioner Beth Graham, to approve the BWL Freedom of Information Act (FOIA) Policy Resolution, Action: Motion Carried. RESOLUTION #2018-05-02 Minimum Cash Reserve Requirement Policy WHEREAS, the Board of Commissioners ("Board") is committed to maintaining a financially stable and resilient utility; and WHEREAS, the Board recognizes that a key element of preserving financial stability over extended periods of time and through varying economic conditions is maintaining adequate cash reserves. BE IT RESOLVED, that after its review, and based on the recommendation from management, the Board approves the Minimum Cash Reserve Requirement Policy, which clearly defines a risk based methodology for establishing the Board of Water and Light's minimum cash reserve requirements on an annual basis for each year of the succeeding six-year forecast period. Motion by Commissioner Sandra Zerkle, Seconded by Commissioner Tracy Thomas, to approve the Minimum Cash Reserve Requirement Policy Resolution. Action: Motion Carried. RESOLUTION #2018-05-03 Fiscal Year 2019-2024 Budget and Forecast RESOLVED, that the Annual Operating and Capital Budget covering Fiscal Year 2019 is hereby approved as presented; and RESOLVED, that the Operating and Capital Forecast for the Fiscal Years 2020-2024 is hereby accepted as presented; and FURTHER RESOLVED, 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: Staff recommends an operating and maintenance budget of $313.7M and a capital budget of $189.6M for Fiscal Year 2019. The Operating and Capital Forecast for Fiscal Years 2020-2024 includes potential rate increases in Fiscal Year's 2021-2024. The potential rate increases are for forecast purposes only and have not been approved through a public rate hearing process. The forecast rate increases are subject to revision and, in any case, prior to implementation, must be subject to the BWL's 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. In accordance with the provisions of the Lansing City Charter, Article 5, Chapter 2, Section 5-203.5 and Section 5-203.6, staff recommends the Finance Committee approve the budget and forecast for presentation and adoption by the Board at its May 22, 2018 board meeting. Motion by Commissioner Dennis Louney, Seconded by Commissioner Beth Graham, to approve the FY 2019- 2024 Budget and Forecast Resolution. Action: Motion Carried. RESOLUTION #2018-05-04 Capital Project Budget Exceedance Approval• Project PG-40045 Corporate IT-Infrastructure Redesign 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 budget for FY 2018 approved by the Commission for Capital Project PG-40045 IT-Infrastructure Redesign was $1,500,000; and WHEREAS, upon project review it was determined that the entire project cost of $3,900,000 should be captured as capital expenditures versus $2,500,000 of the total budgeted amount was initially accounted for in the FY 2018 operating and maintenance budget; and WHEREAS, BWL staff and management recommends that the BWL Board of Commissioners approved the Capital Project PG-40045 IT-Infrastructure Redesign to be completed as projected. BE IT RESOLVED, that the BWL Board of Commissioners approve completion of Capital Project PG-40045 IT- Infrastructure Redesign with a projected final total cost of$3,900,000. Staff Comments: BWL staff and management reviewed the project cost and scope in detail, which includes but is not limited to the rationale and circumstances for the increased capital budget projection however the total overall project estimate remains unchanged. Motion by Commissioner Sandra Zerkle, Seconded by Commissioner Dennis Louney, to approve the Capital Project Budget Exceedance for Project PG-40045 Corporate IT-Infrastructure Redesign Resolution. Action: Motion Carried. RESOLUTION #2018-05-05 Revised DB and VEBA Investment Policy Statements 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 the Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of Water and Light (the "Retiree Medical Benefit Plan"); and WHEREAS, the Retirement Plan Committee, established by the Sponsor, periodically reviews the target rate of return for each plan and, as the result of its most recent review, recommends the target rate of return for the Defined Benefit Plan be reduced from 7.5%to 7.0%; and WHERAS, the Retirement Plan Committee also periodically reviews the investment policy statements, formally known as the Statements of Investment Policies, Procedures and Objectives, for each plan and, as the result of its most recent review, recommends revising the policy index of each plan to more precisely represent the respective target asset allocations of each plan; and WHEREAS, the Retirement Plan Committee along with the General Manager recommends the Sponsor adopt the revisions which reflect these recommendations in the attached (i) Lansing Board of Water & Light Defined Benefit Plan for Employees' Pensions Statement of Investment Policies, Procedures and Objectives; and (ii) Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of Water & Light Statement of Investment Policies, Procedures and Objectives; and 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 of Investment Policies, Procedures and Objectives; and (ii) Post-Retirement Benefit Plan for Eligible Employees of Lansing Board of Water & Light Statement of Investment Policies, Procedures and Objectives; THEREFORE, it is: RESOLVED, that, after its review, and based on the recommendation from the Retirement Plan Committee along with the General Manager, 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 Beth Graham, Seconded by Commissioner Ken Ross, to approve the Revised DB and VEBA Investment Policy Statements Resolution. Action: Motion Carried. Commissioner Sandra Zerkle commented that, although the Resolutions in this meeting were voted on quickly, the Board spent time going over the items in detail in committee meetings. MANAGER'S REMARKS General Manager Peffley informed of the following: 1. George Stojic, Executive Director of Planning and Development; Brandie Ekren, General Counsel; Stephen Serkaian, Executive Director of Public Affairs; and General Manager Dick Peffley will be attending the Lansing Reception at the Mackinaw Policy Conference May 29 —June 1, 2018. GM Peffley will speak about how BWL is becoming the utility of the future 2. GroSolar solar array will start generating electricity Friday, June 1, 2018. The plant will come on in 2 MW stages as testing is performed. It will take a month to bring it on to full load which is over 20 MW. COMMISSIONERS' REMARKS Commissioner Sandra Zerkle gave congratulations to the 15Y S.T.E.P. graduates who each received $2,000. Commissioner Thomas had 12 students graduate from the program. MOTION OF EXCUSED ABSENCE Motion by Commissioner Beth Graham, Seconded by Commissioner Dennis Louney, to excuse Commissioners David Price and Anthony McCloud from this meeting. PUBLIC COMMENTS Carol Rall, Lansing, expressed disappointment at the Board's lack of response to citizen input on viable options from several meetings regarding the BWL's decision to build the new plant. Randy Dykhuis, Lansing, expressed disappointment at the BWL Board's and management's refusal to acknowledge that there are other ways to replace Erickson and Eckert than with a gas fired plant. He stated that other companies are aggressively seeking out other forms of energy. He asked for a definite date for BWL to be fossil free and to generate all electricity from clean energy. He asked that the date be set before 2050. Jay Samek, Lansing resident and climate change research scientist at MSU, applauded the BWL for closing coal plants and investing in solar arrays but spoke against the building of the natural gas power plant. Rebecca Payne, Lansing spoke against the building of the natural gas plant as renewable energies are getting cheaper. Steve Rall, Lansing, spoke about the technologies and price declines in renewable energy that are contributing to coal plant retirements. Andrew Sarpolis, Sierra Club, spoke about the BWL moving toward renewable energy and efficiency but there was room for growth. ADJOURNMENT Vice Chair Mullen adjourned the meeting at 5:58 p.m. M. Denise Griffin, Corporate Secretary Preliminary Minutes filed (electronically) with Lansing City Clerk: 5-29-18 Official Minutes filed (electronically) with Lansing City Clerk 7-31-18 Approved by the Board of Commissioners 05-22-18 Hometown People. Hometown Power: MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT March 27, 2018 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 March 27, 2018. Chairperson David Price called the meeting to order at 5:30 p.m. Present: Commissioners David Price, Beth Graham, Dennis Louney, Anthony McCloud, Anthony Mullen, Ken Ross (arrived at 6:08 p.m.), Tracy Thomas, and Sandra Zerkle. Non-Voting Commissioners present: Douglas Jester (East Lansing), William Long (Delta Township) and Brian Ross (DeWitt Township). Absent: None The Corporate Secretary declared a quorum. Commissioner Graham led the Pledge of Allegiance. Commissioner Price wished Commissioner Graham a happy birthday. SPECIAL CEREMONY- SK RUN PROCEEDS TO MCLAREN GREATER LANSING HEALTHCARE FOUNDATION General Manager Dick Peffley welcomed Rachel Turek from the McLaren Foundation and presented a check in the amount of$1,681.00 which is the proceeds from the 91h Annual BWL Hometown Power 5K. The next BWL Hometown Power 5K will be August 11, 2018. APPROVAL OF MINUTES Motion by Commissioner Thomas, Seconded by Commissioner Graham, to approve the Regular Board Meeting minutes of January 23, 2018. Action: Motion Carried PUBLIC COMMENTS The following speakers spoke in favor of the natural gas plant project: Steve Claywell, Michigan Building Trades Tim Damon, President and CEO of Lansing Regional Chamber of Commerce Hector Wyatt, Local 499 laborer Chris Keck, Lansing, MI Ron Byrnes, Lansing, MI Mark Towez, Lansing, MI Tyler McCastle, Lansing, MI Rudy Agilar, Delta Township, MI The following speakers spoke against the natural gas plant project: Becky Payne, Lansing Environmental Action Team Steve Rail, Lansing, MI Dot Johnson, Lansing, MI Sam Briggs, East Lansing, MI Evan Morton, MSU student and SAC Housing Community Scott Bell, Lansing, MI Anna Fischer, Lansing Environmental Action Team Miranda Summerfeld, Lansing, MI Rachel Lambert, Lansing, MI Ashley Huska, East Lansing, MI Carol Rall, Lansing, MI Tommy Tackett, Lansing, MI Timothy Pilsbury, Lansing, MI Elaine Derbofichov, Lansing, MI Terry Link, East Lansing, MI Bob Barnhart, Lansing, MI Melanie Mack, Lansing, MI Kirk Webb, Lansing, MI Joseph Ryan, Lansing, MI An unidentified member of the public from State Health Care, State of Michigan, spoke regarding the natural gas plant project. COMMUNICATIONS Electronic Mail received From or Re: a. Electronic mail from Dave Errickson re Proposed Power Plant - Referred to Management. Received and Placed on File Commissioner Ken Ross presented the Finance Committee Report: FINANCE COMMITTEE Meeting Minutes March 13, 2018 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, on Tuesday, March 13, 2018. Finance Committee Chair Ken Ross called the meeting to order at 5:00 pm 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), Douglas Jester (East Lansing) (arrived at 5:30 pm), and Brian Ross (DeWitt Township) (arrived at 5:17 pm). The Corporate Secretary declared a quorum. Public Comments Steve Claywell, President of Michigan Building and Construction Trades Council, spoke in support of BWL's vision and infrastructure project and meeting the needs of the community. Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner Graham, to approve the Finance Committee meeting minutes of January 9, 2018, Action: Motion Carried, Tax Reform Update Heather Shawa, Chief Financial Officer, introduced Scott Taylor, Finance Manager, who presented the potential impacts of the Tax Cuts and Jobs Act. Mr. Taylor spoke about how the tax reform affects the BWL with the preserved ability to issue tax exempt bonds, the elimination of tax exempt advanced refunding, the reduction to income tax rates, charitable donations, retirement plans, and employee payroll. Commissioner Price asked if Pennies for Power donations would affect any of the rate payers' tax rates. Ms. Shawa responded that Pennies for Power collects about $55,000 total per year but individually the amounts are smaller, unless there is a one-time donation, and thus the tax rate wouldn't be impacted. FY19 O&M and Capital Budget Overview/Budget Timeline Heather Shawa reported that FY19 0&M and Capital Budget are well underway. The Capital budget is being finalized and executive approval will be obtained. The initial submission of FY19 0&M Budget will be examined with the directors and management team over the next two weeks. The FY19 0&M Budget is to be finalized for executive and General Manager approval by the end of March or beginning of April, and then this budget will be presented at the May Finance Committee meeting. The Six Year Forecast will be issued for acceptance at the May meeting also. January YTD Financial Summary Chief Financial Officer (CFO), Heather Shawa presented the following: NnunJ.d Smnm«-Jmwap JllH.. .. �w� v j 2nanciA Summary January 2018 Cna, h: :Slal,i •nl1IU R.dirn m— [ ,Int'cp Data r, r L •—I Oudp;rl SLdvv 1'T!1 ........ ......:., 4�.. • -E- v. Cash balance and metrics remain green and continue to be on track. The first bond interest payment was made on January 1, 2018 which reduced slightly the restricted funds. The Income Statement indicates that the total revenue through January actual is slightly over $208 million compared to budget of$206 million, the Net Income actual exceeds the budget, and the Projected Net Income is at the budgeted amount and on track. The 0&M YTD is on track and Capital Spend is slightly under budget but projections are to still spend the capital budget on the projects that will be starting. Three of the five ratios are being met. Temporary employee headcount increased by 12 in the 15t S.T.E.P. program. Payroll data is tracking up on overtime due to holiday costs and an outage. Revised Travel and Reimbursement Policy Ms. Shawa introduced Lori Pung, General Accounting Manager, who reviewed the updates for the Revised Travel and Reimbursement Policy. Ms. Pung provided an overview of the following summary and clarification of the revisions. SUMMARY OF REVISIONS TO BWL'S TRAVEL & REIMBURSEMENT POLICY The following substantive revisions were made to sections of the Policy as follows: General Guidelines • Added clarification that the Policy covers overnight and/or out of state travel only. • Removed language, "They are based on practices employed by many organizations of our size and take into consideration what is considered reasonable and customary. While this Policy does contain expense limits, we challenge all employees Traveler's to use professional judgment when incurring expenses on behalf of the Board of Water& Light("BWL")." • Revised language from, "Travelers who use personal funds to facilitate travel arrangements will be reimbursed after the trip occurs and when proper documentation is submitted. Should reimbursement be requested prior to traveling, the request must be submitted via BWL's Travel Form with proper approval" to, "For conference registration fees, lodging, airfare and transportation, it is recommended these expenses are scheduled in advance and prepaid using a BWL P-Card. A request for advance reimbursement prior to travel is not encouraged, however, these advance requests may be paid via a check request through the Request for Payment option included in BWL's Travel & Reimbursement Form ("Form"), along with submitting receipts electronically to the Accounts Payable Department. Should a traveler use personal funds to pay for travel related expenses incurred while traveling, the traveler may request reimbursement after the trip has occurred. Detailed supporting documentation must be submitted and approved by management along with submitting the Form. " • Added language, "All travel records shall be maintained in accordance with the Board of Water and Light Records Retention and Disposal Schedule" due to removal of retention requirement from Substantiation section. Scope • Added language to clarify individuals not covered under this Policy o Commissioners: (excludes Non-Voting Advisory Commissioners) o Employees: (excludes independent contractors, contractors through employment agencies, temporary employees, interns and First Step Students) • Added language to clarify Investment Fiduciary o Plan Trustees and Retirement Plan Committee Approval • Commissioner, Board Appointee, Investment Fiduciary o Revised language from, "Advance approval for all business travel is required by the Board Chair" to "Advance approval for all business travel is required by the Board Chair prior to incurring any expenses. Failure to obtain appropriate approval may result in denial of payment or reimbursement." • Employee o Revised language from, "Advance approval for all business travel is required by the Manager and Director" to "Advance approval for all business travel is required by the Manager and Director prior to incurring any expenses. Failure to obtain appropriate approvals may result in denial of payment or reimbursement." Transportation • Commissioner, Board Appointee, Employee, Investment Fiduciary o Added, "Baggage fees" o Rental Car sub-section, added, "and associated fuel expenses" o Taxi, bus subway, etc. sub-section added, "including associated tip up to 20%will be reimbursed" o Removed language regarding mileage entry; it is not policy, but rather instructional. Incidentals • Commissioner, Board Appointee, Employee, Investment Fiduciary o Added new Incidentals section with a $10/day limit. New language states "Incidental expenses or tips given to porters, baggage carriers and hotel staff considered to be reasonable will be reimbursed not to exceed $10 per travel day with a detailed receipt. If a detailed receipt cannot be reasonably obtained, the expenditure must be documented including location, date and a description of the expenditure." Substantiation Requirements • Commissioner, Board Appointee, Employee, Investment Fiduciary o Removed Miscellaneous Expenses sub-section altogether which included a $50 limit. Added baggage fees, parking and tolls to Transportation section. • Employee o Changed from, "All expenses must be summarized on BWL's Travel Form with receipts and submitted for review and approval by next level of management above a supervisor" to, "All expenses must be summarized on the Form and submitted for review and approval by the Traveler's Manager," • Commissioner, Board Appointee, Employee, Investment Fiduciary o Added, "Any request submitted beyond 60 days will not reimbursed." Commissioner Price requested that an amendment be made to the policy by removing the language "excludes Non-Voting Advisory Commissioners" under the Scope section. Commissioner Long asked for a clarification on travel expenses being made by P-Card, and whether the removal of the language "excludes Non-Voting Advisory Commissioners" under the Scope section applied to one-year non-voting advisory commissioners. Ms. Pung responded that travel expenses for the commissioners were placed on the Corporate Secretary's P-Card and that the removal of the language "excludes Non-Voting Advisory Commissioners" applied only to four-year term commissioners. After a brief discussion it was determined that the exclusion should only apply to the 1-year term Commissioner. Motion by Commissioner Price, Seconded by Commissioner Louney, to accept the Proposed Revised Travel and Reimbursement Policy Resolution with amendment to include 4-year Advisory Commissioners. Action: Motion Carried Bond Resolutions Ms. Shawa presented the funding strategy and Mr. Taylor presented the executive summary of the Fifteenth Supplemental and Amended and Restated Utility System Bond Resolutions. Ms. Shawa stated that the bond resolutions are the next formal step in the process for providing funding for a new plant and other system improvements. Ms. Shawa noted that the work done on the bond resolutions was done in consultation and development with Chris Lover, who serves as BWL's financial advisor, and his team from Public Financial Management (PFM), and also with Bill Danhoff and his team from Miller Canfield, who serve as bond counsel. Julia Baker and Chris Dembowsky from Miller Canfield were in attendance at the meeting. Ms. Shawa also noted that the first formal step in the funding process was taken at the last Finance Committee meeting and that the published Notice of Intent started a 45-day referendum period which expired today, March 13, 2018 at 5:00 pm. Ms. Shawa outlined the following items in the funding strategy: • Issuing the $500 million fixed rate bonds right away is the simplest but most expensive way as once the bonds are issued the interest starts capitalizing. • Issuing the fixed rate bond in three phases; issuance of $100 million of bond anticipation notes; issuance of$400 million in fixed rate revenue bonds of which $100 million will be used to pay back the $100 million line of credit and the remainder will be set aside to finance further construction; issuing the remaining$100 million in variable rate bonds There was dialogue regarding the line of credit in comparison to a fixed rate bond. In response to the dialogue, Mr. Taylor commented that there was a 3% line of credit rate. There was also discussion on interest rates and locking in for a lower rate with the expectancy of increased or raised rates. Mr. Taylor conveyed that the strategy is continually monitored and can be revised if the rates are going to increase. Mr. Taylor outlined the following items from the Fifteenth Supplemental Resolution which authorizes the CFO to execute phase one of the strategy: • Authorized up to $100 million of Bond Anticipation Notes to finance cost of the power plant and system improvements. • Notes can be sold either with a junior lien on the system revenues, or payable only from proceeds of the bonds. Mr. Taylor outlined the following items from the Amended and Restated Utility System Revenue Bond Resolution which authorizes the CFO to execute phases two and three of the strategy, restates the existing resolution, and amends some provisions: • Authorizes up to $500,000,000 of new bonds to finance costs of the Power Plant and • System Improvements described in the Notice of Intent Resolution adopted on January 23, 2018. • Upon delivery of the new bonds (if at least $300,000,000 is issued), the purchasers of the new bonds will hold over 51% of the principal amount of BWL Bonds, and the new resolution can replace the 1989 Resolution and the 15 Supplements. • The following provisions for the bond reserve account approved in November 2016 would take immediate effect (instead of after all BWL bonds issued prior to 2016 are paid); o Permit separate bond reserve accounts (with different requirements) for each series of bonds; o Permit purchase of a surety bond with a rating equal to or higher than the BWL bond rating (the 1989 resolution requires a AAA rating). • The following are new provisions: o Update the "Aggregate Debt Service" provision to remove the very onerous requirement to assume that variable rate bonds bear interest at a 10% interest rate or higher. This is useful because BWL must compare Aggregate Debt Service with system revenues before issuing new bonds. o The resolution could be amended without consent of bondholders if the rating agencies confirm that the amendments would not result in the reduction or withdrawal of any rating. Commissioner Jester inquired about the opportunity costs if there is a need for the Board to make further investments and what are the limits and additional capacity to deal with future needs. General Manager Peffley responded that the Erickson plant will be retired in 2025, Edison's Belle River plant in 2030, and the new plant with the renewable portfolio will take the BWL through those retirements. The next stage of review will be in 2030 and the debt will have been paid down. Ms. Shawa responded that the Six Year Forecast will be presented in May and rating agencies will look at those metrics. GM Peffley added that the $500 million that is being borrowed is for the new plant and other system and technology project improvements and that ways to reduce costs are still being reviewed. Motion by Commissioner Louney, Seconded by Commissioner Mullen, to forward for consideration with the recommendation to adopt the Fifteenth Supplemental Bond Resolution as presented to the full Board. Action: Motion Carried Motion by Commissioner Price, Seconded by Commissioner Louney, to forward for consideration with the recommendation to adopt the Amended and Restated Utility System Bond Resolution as presented to the full Board. Action: Motion Carried Internal Audit Status Report Internal Auditor Phil Perkins presented the FY 2018 Audit Plan Progress Report and the Proposed Internal Audit Succession Plan. _____. - Overview Internal Audit Status Report FY 2018 Audit Plan Progress Report • Proposed Internal Audit Succession Plan Presented by: Phil Perkins,Director of Internal Audit Finance Committee Meeting March 2018 FY 2018 Audit Plan Progress Report FY 2018 Audit Plan Progress Report(2) Engagements Completed: 1. Water Production Data Reporting Audit(FY 18) Remaining Engagements: 2. Identity&Access Management Audit(FY 17 carryover) 1. Contract Authorization&Approval Process Audit 3, Succession Planning Audit(FY 16) 2. Physical Access Management Audit 4. Time Reporting Review 41 3. Surprise Cash Count#2 5. Surprise Cash Count i#1 4. Consulting—Other Areas Affected by Reorganization Engagements In Progress: 1. Cash Recelpts Audit(FY 18)—90%complete Other: 2. Customer Arrangements/Third Party Payments Audit(FY 18)- Risk Assessment&Annual Planning for FY 2019 Audit Plan underway 3. Time Reporting Review 02—In progress 4. Consulting—Payroll/Benefits Internal Controls—in progress AALM Proposed Internal Audit Succession Plan Plan is to hire experienced senior internal auditor with IT auditing experience by June 30,2018. — This will provide one year of experience,training,etc.for the new employee prior to the incumbent Internal Auditors planned retirement dale. — The new hire would have the opportunity to move into the Internal Audit Director's role if performance and desire so warranted. As a potential supplement providing targeted IT audit expertise when needed,an RFP will be sent for Competitive bids for services starting in FY 2019. ...............�. 5 Upon conclusion of Mr. Perkin's presentation a discussion followed regarding whether the succession plan was a Human Resources Committee Meeting item or a Finance Committee meeting item. A consensus followed that the succession plan was both a Human Resources and Finance Committee item. After a short discussion regarding this matter It was determined that Mr. Perkins should proceed with the with the hiring process. Other None Adjourn Motion by Commissioner Price, Seconded by Commissioner Louney, to adjourn the meeting. Commissioner Ross adjourned the meeting at 6:03 p.m. Respectfully submitted Ken Ross, Chair Finance Committee MANAGER'S RECOMMENDATIONS There were no Manager Recommendations. UNFINISHED BUSINESS There was no Unfinished Business. NEW BUSINESS There was no New Business. RESOLUTIONS/ACTION ITEMS RESOLUTION #2018-03-01 REVISED BWL TRAVEL& REIMBURSEMENT POLICY WHEREAS, the Board of Commissioners approved a BWL Travel & Reimbursement Policy ("Policy") on March 28, 2017 which served to combine and replace three existing policies and two previous resolutions; and WHEREAS, that Policy has been in effect for nearly one year; and WHEREAS, during the initial one-year period of implementation, BWL staff has solicited and received feedback regarding application of the Policy and its guidelines; and WHEREAS, the BWL staff has conducted a review of compliance with the Policy and determined additional clarifying language would enhance compliance; and WHEREAS, it has been determined based on the feedback and review that revising the Policy to provide additional guidance and clarity would improve understanding of the Policy, improve compliance with the Policy, and reduce the time associated with administering the Policy; THEREFORE, it is: RESOLVED, that, based on the recommendation from BWL staff, the attached revised BWL Travel & Reimbursement Policy which provides clearer guidance is approved and effective May 1, 2018. This Resolution supersedes Resolution #2017-03-03, which was also accepted by the Board of Trustees on November 14, 2017. Motion by Commissioner Ross, Seconded by Commissioner Graham, to approve the Revised BWL Travel & Reimbursement Policy Resolution. Action: Motion Carried. RESOLUTION #2018-03-02 Lansing Board of Water and Light FIFTEENTH SUPPLEMENTAL REVENUE BOND RESOLUTION A RESOLUTION TO AUTHORIZE: • Issuance of Bond Anticipation Notes; • Chief Financial Officer to sell Notes without further Board Approval. PREAMBLE WHEREAS, the City of Lansing acting through the governing body of the Lansing Board of Water and Light, has previously issued its utility system revenue bonds payable from revenues of the water supply, steam, chilled water and electric utility System under the provisions of Act 94, Public Acts of Michigan, 1933, as amended ("Act 94"), and a Bond Resolution amended and restated on October 24, 1989 and further amended and supplemented from time to time; and WHEREAS, all terms not defined herein shall have the meanings set forth in the Bond Resolution; and WHEREAS, the Board has determined that it is necessary for the public health, safety and welfare of the City and the users of the System to acquire and construct (a) a natural gas combined cycle facility to produce electricity, including all equipment and any appurtenances and attachments thereto and any related site acquisition or improvements, and the construction, improvement, and renovation of transmission and distribution infrastructure (collectively, the "Power Plant Project"), and (b) System Improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements (collectively, the "System Improvements Project"); and WHEREAS, on Saturday, January 27, 2018, the Board published in the Lansing State Journal a Notice of Intent to Issue Revenue Bonds and Right to Petition for Referendum describing utility system revenue bonds to be issued in an amount not-to-exceed Five Hundred Million Dollars ($500,000,000) to finance costs of the Power Plant and System Improvements Project, and no petitions requesting referendum as described in the Notice were filed with the City Clerk during the referendum period provided by Act 94; and WHEREAS, under the provisions of Section 413 of the Revised Municipal Finance Act, Act 34, Public Acts of Michigan, 2001, as amended ("Act 34"), the Board may issue bond anticipation notes in anticipation of the proceeds of long-term municipal bonds it proposes to issue; and WHEREAS, in order to finance costs of the Power Plant and System Improvements Project, the Board now desires to authorize the issuance of bond anticipation notes pursuant to the provisions of Section 413 of Act 34; NOW, therefore, be it resolved: Section 1. Definitions. All terms not defined herein shall have the meanings set forth in the Bond Resolution, and whenever used in this Bond Resolution, except when otherwise indicated by the context, the following terms shall have the following meanings: (a) "Bond Resolution" means the Bond Resolution adopted by the Board on September 26, 1989, as amended and restated on October 24, 1989, and supplemented on October 26, 1993, January 11, 1994, September 2, 1999, October 26, 1999 and amended on August 12, 2008 and June 9, 2009, April 24, 2001, July 23, 2002, August 12, 2003, July 26, 2005, January 29, 2008, May 10, 2011, January 24, 2012, January 22, 2013, November 15, 2016, and as supplemented by this Fifteenth Supplemental Revenue Bond Resolution and any other resolution which amends or supplements the Bond Resolution. (b) "Bonds" means the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A, the Utility System Revenue Bonds, Series 2011A, the Utility System Revenue Refunding Bonds, Series 2012A, the Utility System Revenue Refunding Bonds, Series 2013A, the 2017A Bonds, the Series 2019 Bonds, and any Additional Bonds of equal standing hereafter issued. (c) "Chief Financial Officer" means the Board's Chief Financial Officer. (d) Junior Lien Bonds means bonds or other obligations which may be issued or incurred by the Board to provide funds for any lawful purpose of the System which are of junior standing and priority of lien with respect to the Net Revenues to the claim of the Bonds. (e) "Notes" means the Utility System Revenue Bond Anticipation Notes, Series 2018 issued pursuant to this Fifteenth Supplemental Revenue Bond Resolution for the purpose of paying costs of the Series 2019 Project which need to be paid before the Board issues the Series 2019 Bonds. (f) Series 2018 Notes Construction Fund" shall mean the Series 2018 Notes Construction Fund established pursuant to this Fifteenth Supplemental Revenue Bond Resolution. (g) "Series 2019 Bonds" means the Utility System Revenue Bonds to be issued to pay costs of the Series 2019 Project. (h) Series 2019 Project means the project described in the Notice of Intent published in the Lansing State Journal on January 27, 2018, comprised of (a) the acquisition and construction of a natural gas combined cycle facility to produce electricity, including all equipment and any appurtenances and attachments thereto and any related site acquisition or improvements, and the construction, improvement, and renovation of transmission and distribution infrastructure (the "Power Plant Project"), and (b) construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements (the "System Improvements Project"). (i) System means the complete facilities of the Board for the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat, including all plants, works, instrumentalities and properties used or useful in connection with the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat, and all additions, extensions and improvements thereto existing or hereafter acquired by the Board. Section 2. Necessity and Statement of Purpose. It is hereby determined to be a necessary public purpose of the Board to acquire and construct the Series 2019 Project. Section 3. Costs; Useful Life. The total cost of the Series 2019 Project is estimated to be not-to- exceed $500,000,000 including the payment of capitalized interest and all legal, engineering, financial and other expenses incident thereto, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Series 2019 Project is estimated to be not less than thirty (30)years. Section 4. Bond Anticipation Notes Authorized; Note Data; Proceeds of the Notes. In order to pay costs of the Series 2019 Project which need to be paid before the Board issues the Series 2019 Bonds, the Board shall issue the Notes pursuant to the provisions of Section 413 of Act 34 in the aggregate principal amount of not-to-exceed One Hundred Million Dollars ($100,000,000) as finally determined by the Chief Financial Officer at the time of sale. The Notes may be issued as draw down notes with principal advanced to the Board by the Noteholder in installments. Costs of the Series 2019 Project paid with proceeds of the Notes shall include payment of legal, engineering, financial and other expenses incident thereto and incident to the issuance and sale of the Notes. The Notes shall be designated as the UTILITY SYSTEM REVENUE BOND ANTICIPATION NOTES, SERIES 2018. At the time of sale of the Notes the Chief Financial Officer is authorized to approve additional series designations for the Notes, including designation of the notes as taxable or tax-exempt. The Board designates the Notes as junior lien obligations under the Resolution unless at the time of sale of the Notes the Chief Financial Officer determines that the conditions to authorize issuance of the Notes on a junior lien basis have not been satisfied. If issued as junior lien obligations,then the Notes are obligations issued by the Board to provide funds for any lawful purpose of the System which are of junior standing and priority of lien with respect to the Net Revenues. If the Notes are not issued as junior lien obligations, then they shall be payable solely out of the proceeds of the Series 2019 Bonds. The Board reserves the right to issue additional notes in anticipation of the proposed Series 2019 Bonds, provided that the aggregate principal amount of notes shall not exceed 50% of the principal amount of the proposed Series 2019 Bonds in compliance with the provisions of Section 413 of Act 34. The Notes shall be payable in the principal amounts, at the times and in the manner determined by the Chief Financial Officer at the time of sale of the Notes, provided that the Notes shall mature not more than the earlier of 3 years from the date of issuance or 60 days after the expected date of issuance of the Series 2019 Bonds as required by the provisions of Section 413 of Act 34. The Notes shall bear interest at a fixed or variable rate or rates as determined by the Chief Financial Officer at the time of sale of the Notes. If the Notes bear interest at a variable rate or rates, the Chief Financial Officer is further authorized to determine, in accordance with law, a means by which interest on the Notes may be set, reset or calculated prior to maturity, provided that such rate or rates shall be at no time in excess of the maximum interest rate permitted by applicable law. Such rates may be established by a formula that is determined with respect to an index or indices of municipal obligations, reported prices or yields on obligations of the United States, the prime rate or rates of a bank or banks selected by the Chief Financial Officer or by any other method recommended by the Municipal Advisor. The Notes shall be issued as fully registered notes to be dated the date of delivery thereof or such other date as may be determined by the Chief Financial Officer at the time of sale of the Notes. The Notes shall be subject to optional or mandatory redemption prior to maturity at the option of the Board or the noteholder as determined by the Chief Financial Officer at the time of sale of the Notes. Unless waived by any registered owner of Notes to be redeemed, official notice of redemption shall be given by the Note Transfer Agent (defined below) on behalf of the Board and shall conform to the requirements set forth in the Note being redeemed. Either the Board or a financial institution designated by the Chief Financial Officer shall act as registrar or transfer agent for the Notes (the "Note Transfer Agent"). Interest shall be payable by check or draft drawn on the Note Transfer Agent mailed to the registered owner at the registered address, as shown on the registration books of the Board maintained by the Note Transfer Agent, or, at the option of the Registered Owner, by wire transfer to the bank account number on record with the Transfer Agent. Principal of and interest on this bond is payable to the Registered Owner of record as of the fifteenth (15th) day of the month preceding the interest payment date as shown on the registration books kept by the Transfer Agent. The principal of the Notes shall be payable upon presentation and surrender of such Notes to the Note Transfer Agent. The Note Transfer Agent shall keep the books of registration for this issue on behalf of the Board. The Notes may be issued in book-entry-only form through DTC, and the Chief Financial Officer is authorized to execute such custodial or other agreement with DTC as may be necessary to accomplish the issuance of the Notes in book-entry-only form and to make such changes in the note form within the parameters of this Resolution as may be required to accomplish the foregoing. If the Notes are held in book-entry form by DTC, payment shall be made in the manner prescribed by DTC. Notwithstanding the foregoing, if the entire outstanding amount of the Notes are held by a financial institution, then all payments of principal of and interest on the Notes may be made directly to the Registered Owner by wire transfer or other means satisfactory to the Registered Owner. The Notes shall be signed by the manual or facsimile signatures of the Chairperson and the Corporate Secretary of the Board. If the Notes shall be signed by the facsimile signature of both the Chairperson and the Corporate Secretary of the Board, then the Notes shall not be valid until authenticated by an authorized officer of the Note Transfer Agent. The Notes shall be delivered to the purchaser in accordance with instructions from the Chief Financial Officer upon payment of the purchase price for the Notes in accordance with the purchase contract for the Notes. Section 5. Note Form. The Notes shall be in substantially the following form with such revisions, additions and deletions as may be advisable or necessary to comply with the final terms of the Notes established upon sale thereof. NOTE No. R- UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTIES OF INGHAM AND EATON CITY OF LANSING LANSING BOARD OF WATER AND LIGHT UTILITY SYSTEM REVENUE BOND ANTICIPATION NOTE, SERIES 2018 Date of Interest Rate Date of Maturity Original Issue Registered Owner: Principal Amount: The City of Lansing, Counties of Ingham and Eaton, State of Michigan (the "City"), acting through the governing body of the Lansing Board of Water and Light (the "Board"), acknowledges itself to owe and for value received hereby promises to pay to the Registered Owner specified above, or registered assigns, only from the proceeds of bonds or from Net Revenues of the System as hereinafter provided, the Principal Amount specified above, [or such portion thereof as shall have been advanced to the Board by the Registered Owner,] in lawful money of the United States of America, on the Date of Maturity specified above, unless prepaid prior thereto as hereinafter provided, with interest thereon (computed on the basis of a 360-day year of twelve 30-day months) from the Date of Original Issue specified above or such later date to which interest has been paid, until paid, at the Interest Rate per annum specified above, first payable on [interest payment date] and semiannually thereafter. [During the time the Principal Amount is being drawn down by the Board under this note, the Registered Owner will periodically provide to the Board a statement showing the amount of principal that has been advanced and the date of each advance]. Principal of this note is payable at the designated corporate trust office of [transfer agent], or such other transfer agent as the Board may hereafter designate by notice mailed to the registered owner of record not less than sixty (60) days prior to any interest payment date (the "Transfer Agent"). Interest on this note is payable by check or draft mailed by the Transfer Agent to the person or entity who or which is as of the fifteenth (15th) day of the month prior to each interest payment date, the registered owner of record at the registered address. [Notwithstanding anything in this note or in the Bond Resolution (defined below) to the contrary, for so long as [Registered Owner] is the Registered Owner of this note, the Registered Owner shall not be required to present this note to the Transfer Agent for any mandatory redemption payment or at maturity, and all payments of principal of and interest on this note shall be made directly to the Registered Owner by wire transfer or other means satisfactory to the Registered Owner.] This note is issued in anticipation of the issuance of Utility System Revenue Bonds for the purposes of paying costs to acquire and construct a natural gas combined cycle facility to produce electricity, and system improvements. This note is issued pursuant to a Bond Resolution adopted by the Board on October 24, 1989, as amended and supplemented from time to time, including by a Fifteenth Supplemental Revenue Bond Resolution adopted by the Board on [date of resolution] (collectively, the "Bond Resolution"), and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended ("Act 94") and the Revised Municipal Finance Act, Act 34, Public Acts of Michigan, 2001, as amended. This note, including the interest thereon, is payable from the proceeds of bonds to be issued by the Board to pay the costs of the Project and to redeem this note. [In addition, for the prompt payment of principal and interest on this note, the revenues received by the Board from the operations of the Board's facilities for the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat (the "System") after provision has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the "Net Revenues"), are irrevocably pledged and a statutory lien thereon has been created to secure the payment of the principal of and interest on this note when due after provision has been made for payment of the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A, Utility System Revenue Bonds, Series 2011A, Utility System Revenue Refunding Bonds, Series 2012A, Utility System Revenue Refunding Bonds, Series 2013A, and Utility System Revenue Refunding Bonds, Series 2017A.] The Board reserves the right to issue additional notes in anticipation of the proposed bonds, provided that the aggregate principal amount of notes shall not exceed 50% of the principal amount of the proposed bonds in compliance with the provisions of Section 413 of Act 34. For a complete statement of the revenues from which and the conditions under which this note is payable and the general covenants and provisions pursuant to which this note is issued, reference is made to the Bond Resolution. Copies of the Bond Resolution are on file at the office of the Board, and reference is made to the Bond Resolution and any and all supplements thereto, and modifications and amendments thereof, if any, and to Act 94 for a more complete description of the pledges and covenants securing the note, the nature, extent and manner of enforcement of such pledges, the rights and remedies of the registered owners of the note with respect thereto and the terms and conditions upon which the note is issued and may be issued thereunder. [Provisions for redemption prior to maturity and transfer of note to be inserted] THIS NOTE IS A SELF-LIQUIDATING NOTE AND IS NOT A GENERAL OBLIGATION OF THE CITY AND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY WITHIN ANY CONSTITUTIONAL, STATUTORY OR CHARTER LIMITATION, AND IS PAYABLE BOTH AS TO PRINCIPAL AND INTEREST SOLELY FROM THE PROPOSED BONDS OR FROM NET REVENUES OF THE SYSTEM AND CERTAIN FUNDS AND ACCOUNTS ESTABLISHED UNDER THE BOND RESOLUTION. THE PRINCIPAL OF AND INTEREST ON THIS NOTE ARE SECURED BY THE STATUTORY LIEN HEREINBEFORE DESCRIBED. [The Board has covenanted and agreed, and covenants and agrees, to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest on this note and any bonds payable from the Net Revenues as and when the same shall become due and payable, to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution.] It is hereby certified and recited that all acts, conditions and things required by law to be done precedent to and in the issuance of note have been done and performed in regular and due time and form as required by law. [This note is not valid or obligatory for any purpose until the Transfer Agent's Certificate of Authentication on this note has been executed by the Transfer Agent.] IN WITNESS WHEREOF, the City, acting through the Lansing Board of Water and Light, has caused this note to be signed in its name with the facsimile signatures of the Chairperson and Corporate Secretary of the Board, all as of the Date of Original Issue. LANSING BOARD OF WATER AND LIGHT By David Price Chairperson Countersigned: By M. Denise Griffin Corporate Secretary [STANDARD FORMS OF CERTIFICATE OF AUTHENTICATION AND ASSIGNMENT TO BE INSERTED PRIOR TO DELIVERY OF NOTE] Section 6. Junior Lien Bond and Interest Redemption Fund; Payment of Notes. If the Notes are issued as junior lien obligations, then in order to provide for payment of principal of and interest on the Notes, the Board shall establish and maintain the JUNIOR LIEN BOND AND INTEREST REDEMPTION FUND created under Section 11C of the Bond Resolution. A portion of the proceeds of the Series 2019 Bonds shall be deposited to the Junior Lien Redemption Fund in an amount sufficient to pay principal of and interest on the Notes when due, unless the proceeds are deposited to a defeasance escrow fund for the Notes, or paid directly to the Note Transfer Agent or registered owner of the Notes. If the Board determines that it will not issue the Series 2019 Bonds, or if the Series 2019 Bonds are not issued prior to maturity of the Notes, then the Board shall deposit Revenues in the Junior Lien Redemption Fund in an amount sufficient to pay principal of and interest on the Notes when due. Monies deposited to the Junior Lien Redemption Fund shall be used solely for the purpose of paying the principal of and interest on the Notes. After payment in full of the Notes and any obligations under a credit facility authorized under Section 10 of this Resolution, any balance then remaining in the Junior Lien Redemption Fund shall be transferred to the Construction Fund established for the proceeds of the Series 2019 Bonds, or used for any other purpose permitted by law. Section 7. Creation of Series 2018 Notes Construction Fund. There shall be established and maintained a separate depositary fund designated as the SERIES 2018 NOTES CONSTRUCTION FUND which shall be established by the Chief Financial Officer in a bank or banks qualified to act as depository of the proceeds of sale under the provisions of Section 15 of Act 94. At the discretion of the Chief Financial Officer, separate accounts may be established within the Series 2018 Notes Construction Fund for proceeds of the Notes issued to pay the costs of the Power Plant and the costs of the System Improvements Project. Proceeds of sale of the Notes shall be deposited in the Series 2018 Notes Construction Fund and shall be applied solely in payment of the cost of the Series 2019 Project and any costs of engineering, legal, issuance and other expenses incident thereto. Any unexpended balance remaining in the Series 2018 Notes Construction Fund after completion of the Series 2019 Project may, in the discretion of the Board, be used for meeting requirements, if any, of the Bond Reserve Account, or for further improvements, enlargements and extension to the System. Any balance remaining after such expenditure shall be paid into the Redemption Fund. Section 8. Tax Covenant. The Board shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Notes pursuant to the Internal Revenue Code of 1986, as amended, in such a manner as to cause the Notes to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The Board hereby covenants that, to the extent permitted by law, it will take all actions within its control and that it shall not fail to take any action as may be necessary to maintain the exclusion of interest on the Notes from gross income for federal income tax purposes, including but not limited to, actions relating to the rebate of arbitrage earnings, if applicable, and the expenditure and investment of bond or note proceeds and moneys deemed to be bond or note proceeds, all as more fully set forth in the Non-Arbitrage and Tax Compliance Certificates to be delivered by the Board on the date of delivery of the Notes. Section 9. Negotiated Sale of Notes. Based upon the advice of PFM Financial Advisors LLC (the "Municipal Advisor"), in order to enable the Board to select and adjust terms for the Notes, and to achieve sale efficiencies so as to reduce the cost of issuance and interest expense, it is determined in the best interests of the Board to negotiate the sale of the Notes. The Board hereby determines to sell the Notes at a negotiated sale instead of a competitive sale. Section 10. Preparation for Sale of Notes. The Chief Financial Officer is authorized, based upon the advice of the Municipal Advisor, to circulate a request for quotations, sales memorandum, or other document describing the Board, the System, the Notes and security for payment of the Notes to potential purchasers of the Notes. The Chief Financial Officer is hereby authorized to apply for credit ratings for the Notes from such rating agencies as deemed appropriate, in consultation with the Municipal Advisor. If the Municipal Advisor recommends that the Board consider purchase or execution of a "Credit Facility" to assure timely payment of the Notes, such as an insurance contract, agreement for line of credit, letter of credit, commitment to purchase obligations, remarketing agreement, reimbursement agreement, tender agreement, or other transaction to provide security, then the Chief Financial Officer is hereby authorized to negotiate with potential providers of the Credit Facility, and, in consultation with the Municipal Advisor, to purchase or execute the Credit Facility, and the Chief Financial Officer is hereby authorized to execute an agreement with the provider of the Credit Facility. If the Municipal Advisor recommends that the Board consider purchase of municipal bond insurance for the Notes, then the Chief Financial Officer is hereby authorized to negotiate with insurers regarding acquisition of the insurance, and, in consultation with the Municipal Advisor, to select an insurer, and the Chief Financial Officer is hereby authorized to execute an agreement with the insurer relating to procedures for paying debt service and notifying the insurer of any need to draw on the insurance and other matters. Section 11. Sale of Notes. The Chief Financial Officer is authorized to award sale of the Notes to a financial institution or other purchaser based upon the recommendations and advice of the Municipal Advisor without further action of this Board. This authorization includes, but is not limited to, determination of original principal amount of the Notes; the prices at which the Notes are sold; the date of the Notes; the provisions for early redemption, if any; the interest rates and payment dates of the Notes, and whether the Notes are to be sold on a taxable or tax-exempt basis. The Chief Financial Officer is authorized to sign a purchase agreement, certificate of award of sale, acknowledgement of offer to purchase the Notes, or other document agreeing to sell the Notes on behalf of the Board. The maximum interest rate of the Notes shall not exceed 5.00% per annum. The purchase price for the Notes, exclusive of any original issue discount or premium, shall not be less than 95.00% of the principal amount of the Notes, plus accrued interest, if any. In making such determinations the Chief Financial Officer is authorized to rely upon data and computer runs provided by the Municipal Advisor. The Chief Financial Officer is authorized on behalf of the Board to make any covenants with the purchaser of the Notes as may be deemed advisable and approved by bond counsel and the Municipal Advisor. If a written continuing disclosure undertaking is necessary in order to enable the purchaser of the Notes to comply with the requirements of Securities and Exchange Commission Rule 15c2-12, then the Chief Financial Officer is authorized to execute and deliver a continuing disclosure undertaking in substantially the form which she shall, in consultation with bond counsel, determine to be appropriate. Section 12. Other Actions. In the event that the Chief Financial Officer is not available at the time that it becomes necessary to take actions directed or authorized under this resolution, then a person designated by the Chief Financial Officer is authorized to take such actions. The officers, administrators, agents and attorneys of the Board are authorized and directed to take all other actions necessary and convenient to facilitate issuance, sale and delivery of the Notes within the parameters of this resolution, and to execute and deliver all other agreements, documents and certificates and to take all other actions necessary or convenient in accordance with this resolution, and to pay costs of issuance including but not limited to rating agency fees, credit facility fees, insurance premiums, transfer agent fees, municipal advisor fees, bond counsel fees, and any other costs necessary to accomplish sale and delivery of the Notes. Section 13. Applicability of the Outstanding Bond Resolutions. Except to the extent supplemented or otherwise provided in this resolution, all of the provisions and covenants provided in the Bond Resolution shall apply to the Notes issued pursuant to provisions of this resolution, such provisions of the Bond Resolution being made applicable to the Notes herein authorized. Section 14. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. Section 15. Severability and Paragraph Headings. If any section, paragraph, clause or provision of this resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this resolution. The paragraph headings in this resolution are furnished for convenience of reference only and shall not be considered to be part of this resolution. Section 16 Publication and Recordation. In accordance with the provisions of Section 6 of Act 94, this resolution shall be published once in full in the Lansing State Journal, a newspaper of general circulation in the City qualified under State law to publish legal notices, promptly after its adoption but in any event prior to circulation of a Preliminary Official Statement or other marketing document for the Series 2018 Notes, and shall be recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairperson and Corporate Secretary of the Board. Section 17, Effective Date. This resolution is hereby determined to be immediately necessary for the preservation of the public peace, property, health and safety of the City and the users of the System. In accordance with the provisions of Section 6 of Act 94, this resolution shall become effective immediately upon its adoption. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light at a Regular meeting held on Tuesday, March 27, 2018, at 5:30 p.m., Eastern Time, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been made available as required by said Act 267. We further certify that the following Commissioners were present at said meeting: Commissioners David Price, Beth Graham, Dennis Louney, Anthony McCloud, Anthony Mullen, Ken Ross, Tracy Thomas, and Sandra Zerkle and that the following Commissioners were absent: None. We further certify that Commissioner Ross moved adoption of said resolution, and that said motion was supported by Commissioner Zerkle. We further certify that the following Commissioners voted for adoption of said resolution: Commissioners David Price, Beth Graham, Dennis Louney, Anthony McCloud, Anthony Mullen, Ken Ross, Tracy Thomas, and Sandra Zerkle and that the following Commissioners voted against adoption of said resolution: None. We further certify that said resolution has been recorded in the Resolution Book and that such recording has been authenticated by the signature of the Chairperson and Corporate Secretary. Chairperson Corporate Secretary 30789535.6\050796-00065 RESOLUTION #2018-03-03 Lansing Board of Water and Light AMENDED AND RESTATED UTILITY SYSTEM REVENUE BOND RESOLUTION A RESOLUTION TO AUTHORIZE: • Utility System Revenue Bonds for a natural gas combined cycle facility and system improvements; • Replacement of 1989 Resolution and Supplemental Resolutions by this Resolution; • Chief Financial Officer to sell Bonds without further Board approval. PREAMBLE WHEREAS, the City of Lansing acting through the governing body of the Lansing Board of Water and Light, from time to time issues its utility system revenue bonds payable from revenues of the water supply, steam, chilled water and electric utility system under the provisions of Act 94, Public Acts of Michigan, 1933, as amended ("Act 94"); and WHEREAS, the Board has determined that it is necessary for the public health, safety and welfare of the City and the users of the System to acquire and construct (a) a natural gas combined cycle facility to produce electricity, including all equipment and any appurtenances and attachments thereto and any related site acquisition or improvements, and the construction, improvement, and renovation of transmission and distribution infrastructure (collectively, the "Power Plant Project"), and (b) System Improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements (collectively, the "System Improvements Project"); and WHEREAS, on Saturday, January 27, 2018, the Board published in the Lansing State Journal a Notice of Intent to Issue Revenue Bonds and Right to Petition for Referendum describing utility system revenue bonds to be issued in an amount not-to-exceed Five Hundred Million Dollars ($500,000,000) to finance costs of the Power Plant and System Improvements Project, and no petitions requesting referendum as described in the Notice were filed with the City Clerk during the referendum period provided by Act 94; and WHEREAS, in order to finance costs of the Power Plant and System Improvements Project, the Board now desires to authorize the issuance of the UTILITY SYSTEM REVENUE BONDS, SERIES 2019 (the "Series 2019 Bonds") pursuant to the provisions of Act 94; and WHEREAS, the Board issues its utility system revenue bonds pursuant to the provisions of an Amended and Restated Bond Resolution adopted on October 24, 1989, which has been amended or supplemented by fifteen supplemental resolutions, and the Board would like to approve a replacement Amended and Restated Bond Resolution; and WHEREAS, upon delivery of the Series 2019 Bonds in an amount sufficient to cause the Registered Owners of the Series 2019 Bonds to equal not less than fifty one percent (51%) in principal amount of the total Utility System Revenue Bonds then outstanding, this resolution would replace the Amended and Restated Bond Resolution adopted on October 24, 1989. NOW, therefore, be it resolved: DEFINITIONS Section 1. Definitions. Whenever used in this Bond Resolution, except when otherwise indicated by the context, the following terms shall have the following meanings: (a) "Act 94" means Act 94, Public Acts of Michigan 1933, as amended. (b) Additional Bonds" means any additional bonds of equal standing with the Bonds issued pursuant to Section 24 of this Bond Resolution. (c) "Aggregate Debt Service" for any period means, as of any date of calculation by the Board, the sum of the amounts of the debt service for such period with respect to all Outstanding Bonds. In the event that any of the Outstanding Bonds bear interest at a variable rate, such Bonds shall, for purposes of calculating Aggregate Debt Service, be assumed by the Board to bear interest at a fixed rate of interest equal to the greater of the actual rate of interest then borne by such variable rate Bonds or the Certified Interest Rate applicable thereto. (d) "Aggregate Debt Service Requirement" means for any period, and as of any date of calculation, Aggregate Debt Service for such period, less any capitalized interest to be paid from the proceeds of the Bonds. (e) "Board" means the Board of Water and Light established pursuant to Section 5-201 of Chapter 2 of the City Charter of the City. (f) "Bond Reserve Account" means the Bond Reserve Account established pursuant to Section 18(B) of this Bond Resolution. (g) "Bond Resolution" means this Amended and Restated Bond Resolution and any other resolution amendatory to or supplemental to this Amended and Restated Bond Resolution. (h) "Bonds" or "Senior Lien Bonds" means the Outstanding portion of the Water Supply, Steam, Chilled Water and Electric Utility System Revenue Bonds, Series 2008A, the Utility System Revenue Bonds, Series 2011A, the Utility System Revenue Refunding Bonds, Series 2012A, the Utility System Revenue Refunding Bonds, Series 2013A, the 2017A Bonds, and the Series 2019 Bonds, and any Additional Bonds of equal standing hereafter issued. (i) "Certified Interest Rate" shall mean the interest rate determined by a certificate of the Chief Financial Officer executed on or prior to the date of the delivery of variable rate Bonds as the rate of interest the variable rate Bonds would bear if they were issued at a fixed interest rate based on the Bond Buyer Revenue Bond Index and assuming the same maturity date, terms and provisions (other than interest rate) as the variable rate Bonds, and on the basis of the Board's credit ratings with respect to the Bonds (other than Bonds for which credit enhancement is provided by a third party). Determination of the Certified Interest Rate as described in the prior sentence shall be conclusive. (j) "Chief Financial Officer" means the Board's Chief Financial Officer. (k) "City" means the City of Lansing, Michigan. (1) "Consulting Engineer" means the engineer or engineering firm or firms appointed from time to time, and having a favorable reputation for skill and experience in the design and operation of municipal utility systems, at the time retained by the Board to perform the acts and carry out the duties provided for such Consulting Engineer in the Bond Resolution. (m) "Event of Default" means an Event of Default specified in Section 25 of this Bond Resolution. (n) "Government Obligations" means (i) direct obligations of (including obligations issued or held in book entry form on the books of) the United States of America, (ii) obligations the payment on which is guaranteed by the United States of America including, but not limited to, stripped interest components of obligations issued by the Resolution Funding Corporation (REFCORP) and non-callable, non-prepayable debt obligations of the United States Agency for International Development (US AID), which pay principal and interest at least three (3) business days prior to any respective escrow requirement dates, or (iii) non-callable, senior debt obligations of any government-sponsored enterprise or federal agency, corporation, or instrumentality of the United States of America created by an act of congress including, but not limited to, the Federal Home Loan Banks, Freddie Mac, Federal Farm Credit Banks Funding Corporation, and Fannie Mae. (o) "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended. (p) "Investment Obligations" means, to the extent authorized by law, (i) United States government obligations; (ii) obligations the principal and interest on which is guaranteed by the United States; (iii) repurchase agreements that are secured by United States government obligations or obligations fully guaranteed by the United States and that are held by an independent third party; (iv) certificates of deposit or other accounts of, or bankers acceptances of, 1 or more of the following: (a) banks that are members of the federal deposit insurance corporation; (b) savings and loan associations that are members of the federal savings and loan insurance corporation; (c) credit unions whose accounts are insured by the national credit union share insurance fund; (v) commercial paper that is rated in the highest category by a nationally recognized rating agency; (vi) obligations of a state of the United States or of a political subdivision of a state of the United States that are rated in 1 of the 3 highest categories by a nationally recognized rating agency; (vii) a collective investment fund that invests solely in 1 or more of the securities described above; and (viii) Government Obligations. (q) "Junior Lien Bonds" and "Junior Lien Notes" means bonds, bond anticipation notes issued under Act 34, Public Acts of Michigan, 2001, as amended, or other obligations which may be issued or incurred by the Board to provide funds for any lawful purpose of the System which are of junior standing and priority of lien with respect to the Net Revenues to the claim of the Bonds. (r) Municipal Obligation" means any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable at the option of the obligor prior to maturity or as to which irrevocable notice has been given by the obligor to call on the date specified in the notice, and (ii) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or Government Obligations, which fund may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (iii) which fund is sufficient, as verified by an independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this definition of Municipal Obligation on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this definition of Municipal Obligation, as appropriate, and (iv) which are rated, based on the escrow, in the highest rating category of either two of the following three ratings agencies: Standard & Poor's Corporation, Fitch Ratings, and Moody's Investors Service, Inc. or any successors thereto. (s) "Net Revenues" means the Revenues remaining after deducting the reasonable expenses of administration, operation, and maintenance of the System. (t) "Operation and Maintenance Fund" means the Operation and Maintenance Fund established pursuant to Section 18(A) of this Bond Resolution. (u) "Outstanding Bonds" means Bonds issued under this Bond Resolution except: (i) Bonds cancelled by the Transfer Agent at or prior to such date; (ii) Bonds (or portions of Bonds) for the payment or redemption of which moneys or Government Obligations, equal to the principal amount or redemption price thereof, as the case may be, with interest to the date of maturity or redemption date, shall be held in trust under this Bond Resolution and set aside for such payment or redemption (whether at or prior to the maturity or redemption date), provided that if such Bonds (or portions of Bonds) are to be redeemed, notice of such redemption shall have been given as provided in this Bond Resolution or provision satisfactory to the Transfer Agent shall have been made for the giving of such notice; (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered hereunder; and (iv) Bonds no longer deemed to be Outstanding Bonds as provided in Section 12 of this Bond Resolution. (v) "Rebate Fund" means the Rebate Fund established pursuant to Section 19 of this Bond Resolution. (w) Receiving Fund" means the Receiving Fund established pursuant to Section 18 of this Bond Resolution. (x) "Redemption Fund" means the Bond and Interest Redemption Fund established pursuant to Section 18(B) of this Bond Resolution. (y) "Registered Owner" means the owner of a Bond as shown by the registration records kept by the Transfer Agent. W "Reserve Requirement" shall mean the lesser of (i) the maximum annual debt service requirements on the Outstanding Bonds, (ii) 125% of the average annual debt service requirements on the Outstanding Bonds, or (iii) the total of 10% of the original aggregate face amount of each series of the Outstanding Bonds, reduced by the net original issue discount, if any; provided, however,that the Reserve Requirement shall not at any time exceed the amount allowed to be invested at an unrestricted yield pursuant to Treas. Reg. Section 1.148-2(f)(2) or any successor provision thereto as applicable to the Bonds. (a a) "Revenues" means the income derived from the rates charged for the services, facilities, and commodities furnished by the System, earnings on investment of funds and accounts of the System required to be deposited in the Receiving Fund pursuant to this Bond Resolution and other revenues derived from or pledged to the operation of the System. (bb) "Senior Lien Bonds" means the Bonds and does not include the Junior Lien Bonds and Junior Lien Notes. (cc) "Series 2018 Notes" means the Utility System Revenue Bond Anticipation Notes, Series 2018. (dd) "Series 2019 Bonds" means the Utility System Revenue Bonds, Series 2019 issued pursuant to this Amended and Restated Utility System Revenue Bond Resolution. (ee) "Series 2019 Construction Fund" means the Series 2019 Construction Fund established pursuant to this Bond Resolution. (ff) "Series 2019 Project" means the project described in the Notice of Intent published in the Lansing State Journal on January 27, 2018, comprised of (a) the acquisition and construction of a natural gas combined cycle facility to produce electricity, including all equipment and any appurtenances and attachments thereto and any related site acquisition or improvements, and the construction, improvement, and renovation of transmission and distribution infrastructure (the "Power Plant Project"), and (b) construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements (the "System Improvements Project"). (gg) "Sufficient" means with respect to (i) cash or (ii) Government Obligations or (iii) Municipal Obligations, or any combination thereof, not redeemable at the option of the issuer thereof, the principal and interest payments upon which, without reinvestment of the interest, come due at such times and in such amounts, as to be fully sufficient to pay the interest as it comes due on the Bonds or any portion thereof and the principal and redemption premium, if any, on the Bonds or any portion thereof as they come due whether on the stated maturity date or upon earlier redemption. Securities representing such obligations or cash shall be placed in trust with a bank or trust company, and if any of the Bonds are to be called for redemption prior to maturity, irrevocable instructions to call the Bonds for redemption shall be given to the Transfer Agent. (hh) "System" means the complete facilities of the Board for the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat, including all plants, works, instrumentalities and properties used or useful in connection with the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat, and all additions, extensions and improvements thereto existing or hereafter acquired by the Board. (ii) "Transfer Agent" means U.S. Bank National Association, or such other bank selected by the Board for payment of the Bonds. ISSUANCE OF SERIES 2019 BONDS Section 2. Necessity and Statement of Purpose. It is hereby determined to be a necessary public purpose of the Board to acquire and construct the Series 2019 Project. Section 3. Costs; Useful Life. The total cost of the Series 2019 Project is estimated to be not-to- exceed $500,000,000 including the payment of capitalized interest and all legal, engineering, financial and other expenses incident thereto, which estimate of cost is hereby approved and confirmed, and the period of usefulness of the Series 2019 Project is estimated to be not less than thirty (30) years. Section 4. Conditions Permitting Issuance of Additional Bonds. The Bond Resolution establishes requirements for the issuance of Additional Bonds of equal standing and priority of lien with the Outstanding Bonds. The Series 2019 Bonds can be issued as Additional Bonds pursuant to the requirements of the Bond Resolution if the Board determines that the actual or augmented Net Revenues of the System for the fiscal year of the System ending not more than 15 months prior to the sale of Additional Bonds shall be equal to at least one hundred twenty-five (125%) percent of the maximum Aggregate Debt Service Requirement in any current or future fiscal year on the Outstanding Bonds and on the Series 2019 Bonds. The Board hereby determines that the Series 2019 Bonds shall be issued only if the Chief Financial Officer determines (a) that the Board is not in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund, and (b) that the actual or augmented Net Revenues of the System for the fiscal year of the System ending not more than 15 months prior to the sale of Additional Bonds shall be equal to at least one hundred twenty-five (125%) percent of the maximum Aggregate Debt Service Requirement in any current or future fiscal year on the Outstanding Bonds and on the Series 2019 Bonds. It is anticipated that at the time the Series 2019 Bonds are issued, the Outstanding Bonds will be the Utility System Revenue Bonds, Series 2011A, Utility System Revenue Refunding Bonds, Series 2013A, and Utility System Revenue Refunding Bonds, Series 2017A. Section 5. Series 2019 Bonds Authorized. To pay part of the cost of acquiring and constructing all or a portion of the Series 2019 Project, including payment of all legal, engineering, financial and other expenses incident thereto and incident to the issuance and sale of the Series 2019 Bonds and capitalized interest in the amount to be determined at the time of sale of the Series 2019 Bonds, the City, acting by and through the Board, shall borrow the sum of not-to-exceed Five Hundred Million Dollars ($500,000,000) and shall issue the Series 2019 Bonds therefor pursuant to the provisions of Act 94. The remaining cost of the Series 2019 Project in excess of $500,000,000, if any, shall be defrayed from funds on hand and legally available for such use or from an additional series of Bonds to be issued upon approval of a future resolution. The Series 2019 Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94. The Series 2019 Bonds shall be payable solely out of the Net Revenues of the System and City Council shall not be requested to pledge the full faith and credit of the City for payment of the Series 2019 Bonds. The capitalized interest, if any, to be paid from proceeds of the Series 2019 Bonds shall not exceed the amount necessary to pay interest for three years, as finally determined at the time of sale of the Series 2019 Bonds by the Chief Financial Officer, Section 6. Series 2019 Bond Details. The Series 2019 Bonds shall be designated as the "UTILITY SYSTEM REVENUE BONDS, SERIES 2019" or such other series designation as determined at the time of sale by the Chief Financial Officer to reflect the sequence and the year of sale or delivery of the Series 2019 Bonds. The Series 2019 Bonds shall be issued as fully registered bonds registered in the denomination of $1,000 or integral multiples thereof and shall be numbered in consecutive order of registration or authentication from 1 upwards. The Series 2019 Bonds shall be dated as of the date of delivery thereof or such other date as determined at the time of sale of the Series 2019 Bonds, shall mature as serial bonds or term bonds on such dates as shall be determined at the time of sale of the Series 2019 Bonds but not-to- exceed thirty (30) annual maturities. The Series 2019 Bonds shall be subject to optional or mandatory redemption prior to maturity at the times and prices finally determined at the time of sale of the Series 2019 Bonds. The Series 2019 Bonds shall bear interest at a rate or rates to be determined on sale thereof, payable semi-annually on January 1st and July 1st of each year beginning on such date as determined at the time of sale of the Series 2019 Bonds provided that the first interest payment date shall be not later than ten months following the delivery date of the Series 2019 Bonds. The Series 2019 Bonds shall be executed by the manual or facsimile signature of the Chairperson and the Corporate Secretary of the Board. No Series 2019 Bond shall be valid until authenticated by an authorized representative of the Transfer Agent. The Series 2019 Bonds shall be delivered to the Transfer Agent for authentication and be delivered by the Transfer Agent to the purchaser in accordance with instructions from the Chief Financial Officer upon payment of the purchase price for the Series 2019 Bonds. Section 7. Registration and Transfer. The Board hereby requests that U.S. Bank National Association continue to serve the Board as transfer agent for the Series 2019 Bonds. The Chief Financial Officer is hereby authorized to execute one or more agreements with the Transfer Agent on behalf of the Board. The Board reserves the right to replace the Transfer Agent at any time, provided written notice of such replacement is given to the registered owners of record of bonds not less than sixty (60) days prior to an interest payment date. Principal of and interest on the Series 2019 Bonds shall be payable by check or draft mailed by the Transfer Agent to the registered owner at the registered address as shown on the registration books of the Board maintained by the Transfer Agent. Interest shall be payable to the person or entity who or which is the registered owner of record as of the fifteenth (15th) day of the month prior to the payment date for each interest payment. The date of determination of the registered owner for purposes of payment of interest as provided in this paragraph may be changed by the Board to conform to market practice in the future. The Series 2019 Bonds may be issued in book-entry-only form through The Depository Trust Company in New York, New York ("DTC"), and the Chief Financial Officer is authorized to execute such custodial or other agreement with DTC as may be necessary to accomplish the issuance of the Series 2019 Bonds in book-entry- only form and to make such changes in the form of the Series 2019 Bonds within the parameters of this resolution as may be required to accomplish the foregoing. Notwithstanding the foregoing, if the Series 2019 Bonds are held in book-entry-only form by DTC, payment of principal of and interest on the Series 2019 Bonds shall be made in the manner prescribed by DTC. The Series 2019 Bonds may be transferred upon the books required to be kept by the Transfer Agent pursuant to this section by the person or entity in whose name it is registered, in person or by the registered owner's duly authorized attorney, upon surrender of the bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Transfer Agent. Whenever any bond shall be surrendered for transfer, the Board shall execute and the Transfer Agent shall authenticate and deliver a new bond of the same series in like aggregate principal amount, maturity and interest rate. The Transfer Agent shall require the payment by the bondholder requesting the transfer of any tax or other governmental charge required to be paid with respect to the transfer. Notwithstanding the foregoing, if Bonds are held by DTC in book-entry-only form, the transfer of Bonds shall be made in the manner prescribed by DTC. Section 8. Creation of Series 2019 Bonds Construction Fund. There shall be established and maintained a separate depositary fund designated as the SERIES 2019 BONDS CONSTRUCTION FUND which shall be established by the Chief Financial Officer in a bank or banks qualified to act as depository of the proceeds of sale under the provisions of Section 15 of Act 94. At the discretion of the Chief Financial Officer, separate accounts may be established within the Series 2019 Bonds Construction Fund for proceeds of the Series 2019 Bonds issued to pay the costs of the Power Plant and costs of the System Improvements Project. Monies deposited in the Series 2019 Bonds Construction Fund shall be applied solely in payment of the cost of the Series 2019 Project and any costs of engineering, legal, issuance and other expenses incident thereto. Any unexpended balance remaining in the Series 2019 Bonds Construction Fund after completion of the Series 2019 Project may, in the discretion of the Board, be used for meeting requirements, if any, of the Bond Reserve Account, or for further improvements, enlargements and extension to the System. Any balance remaining after such expenditure shall be paid into the Redemption Fund. Section 9. Series 2019 Bond Proceeds. From the proceeds of sale of the Series 2019 Bonds there first shall be immediately deposited in the Redemption Fund an amount equal to the accrued interest, if any, received on delivery of the Series 2019 Bonds, and the Board may take credit for the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of the next maturing interest. All or a portion of any premium received upon delivery of the Series 2019 Bonds may be deposited in either the Redemption Fund or the Construction Fund, as determined by the Chief Financial Officer. The capitalized interest shall next be deposited in the Redemption Fund, and the Board may take credit for the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of interest on the Series 2019 Bonds. Next the Board shall provide for payment or defeasance of principal of and interest on the Series 2018 Notes, either by calling the Series 2018 Notes for redemption on the date of delivery of the Series 2018 Bonds and paying off the Series 2018 Notes upon receipt of bond proceeds, or by defeasing the Series 2018 Notes through deposit to an escrow fund. There shall next be deposited from the proceeds of sale of the Series 2019 Bonds to the Bond Reserve Account an amount, if any, designated by the Chief Financial Officer at the time of sale as necessary to meet the requirements of the bond purchasers. The remaining proceeds of sale of the Series 2019 Bonds shall be deposited to the Construction Fund. There shall next be deposited in the Bond Reserve Account an amount, if any, designated at the time of sale of the Series 2019 Bonds as necessary to cause the amount on deposit in the Bond Reserve Account to be equal to the Reserve Requirement. Section 10. Covenants Regarding Series 2019 Bonds. The Board covenants and agrees as follows with the holders of the Series 2019 Bonds as long as any of the Series 2019 Bonds remain outstanding and unpaid as to either principal or interest: (a) The Board will cause the portion of the Series 2019 Project being financed with proceeds of the Series 2019 Bonds to be acquired and constructed promptly and in accordance with the plans and specification therefor. (b) The Board covenants and agrees with the Registered Owners of the Series 2019 Bonds that as long as any of the Series 2019 Bonds remain outstanding and unpaid as to either principal or interest, the Board shall not invest, reinvest or accumulate any moneys deemed to be proceeds of the Series 2019 Bonds pursuant to the Internal Revenue Code in such a manner as to cause the Series 2019 Bonds to be "arbitrage bonds" within the meaning of the Internal Revenue Code. The Board hereby covenants that, to the extent permitted by law, it will take all actions within its control and that it shall not fail to take any action as may be necessary to maintain the exemption of interest on the Series 2019 Bonds from gross income for federal income tax purposes, including but not limited to, actions relating to the rebate of arbitrage earnings, if applicable, and the expenditure and investment of Bond proceeds and moneys deemed to be Bond proceeds, all as more fully set forth in the Tax Compliance Certificate to be delivered by the Board with the Series 2019 Bonds. Section 11. Series 2019 Bond Form. The Series 2019 Bonds shall be in substantially the form shown on the following pages, with such revisions, additions and deletions as the Board may deem advisable or necessary to comply with the final terms of the Series 2019 Bonds established upon sale thereof: Bond No. R- UNITED STATES OF AMERICA STATE OF MICHIGAN COUNTIES OF INGHAM AND EATON CITY OF LANSING LANSING BOARD OF WATER AND LIGHT UTILITY SYSTEM REVENUE BOND, SERIES 2019 Date of Interest Rate Date of Maturity Original Issue CUSIP Registered Owner: Cede &Co. Principal Amount: The City of Lansing, Counties of Ingham and Eaton, State of Michigan (the "City"), acting through the governing body of the Lansing Board of Water and Light (the "Issuer"), acknowledges itself to owe and for value received hereby promises to pay to the Registered Owner specified above, or registered assigns, only from the Net Revenues of the System as hereinafter provided, the Principal Amount specified above, in lawful money of the United States of America, on the Date of Maturity specified above, [unless prepaid prior thereto as hereinafter provided,] with interest thereon (computed on the basis of a 360-day year of twelve 30-day months) from the Date of Original Issue specified above or such later date to which interest has been paid, until paid, at the Interest Rate per annum specified above, first payable on [interest payment date] and semiannually thereafter. Principal of this bond is payable at the designated corporate trust office of [transfer agent], or such other transfer agent as the Issuer may hereafter designate by notice mailed to the registered owner of record not less than sixty (60) days prior to any interest payment date (the "Transfer Agent"). Interest on this bond is payable by check or draft mailed by the Transfer Agent to the person or entity who or which is as of the fifteenth (15th) day of the month prior to each interest payment date, the registered owner of record at the registered address. For the prompt payment of principal and interest on this bond, the revenues received by the Issuer from the operations of the Issuer's facilities for the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat (the "System") after provision has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the "Net Revenues"), are irrevocably pledged and a statutory first lien thereon has been created to secure the payment of the principal of and interest on this bond, when due; however, the pledge of Net Revenues and the statutory lien are on a parity with the pledge of Net Revenues and statutory lien in favor of the Utility System Revenue Bonds, Series 2011A, Utility System Revenue Refunding Bonds, Series 2013A, and Utility System Revenue Refunding Bonds, Series 2017A. This Bond is one of a series of bonds of even Date of Original Issue, aggregating the principal sum of $[principal amount], issued pursuant to an Amended and Restated Bond Resolution adopted by the Issuer on [date of resolution] (the "Bond Resolution"), and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended ("Act 94"), for the purpose of financing costs of improvements to the System, [making a deposit to a bond reserve account,] and paying the costs of issuing the bonds. For a complete statement of the revenues from which and the conditions under which this bond is payable, a statement of the conditions under which additional bonds of equal standing as to the Net Revenues may hereafter be issued, and the general covenants and provisions pursuant to which this bond is issued, reference is made to the Bond Resolution. Reference is hereby made to the Bond Resolution and any and all supplements thereto and modifications and amendments thereof, if any, and to Act 94, for a more complete description of the pledges and covenants securing the bonds of this issue, the nature, extent and manner of enforcement of such pledges, the rights and remedies of the registered owners of the bonds of this issue with respect thereto and the terms and conditions upon which the bonds of this issue are issued and may be issued thereunder. To the extent and in the manner permitted by the terms of the Bond Resolution, the provisions of the Bond Resolution or any resolution or agreement amendatory thereof or supplemental thereto, may be modified or amended by the Issuer, except in specified cases, only with the written consent of the registered owners of at least fifty-one percent (51%) of the principal amount of the bonds of the System then outstanding. Bonds of this issue maturing on or prior to [date] are not subject to redemption prior to maturity. Bonds or portions of bonds in multiples of $5,000 of this issue maturing on or after [date] shall be subject to redemption prior to maturity without a premium, at the option of the Issuer, in such order of maturity as the Issuer shall determine and within any maturity by lot, on any date on or after [date], at par plus accrued interest to the date fixed for redemption. [Mandatory redemption provisions to be inserted if term bonds are issued] In case less than the full amount of an outstanding bond is called for redemption, the Transfer Agent upon presentation of the bond called in part for redemption shall register, authenticate and deliver to the registered owner a new bond of the same maturity and in the principal amount of the portion of the original bond not called for redemption. Notice of redemption shall be given to each registered owner of bonds or portions thereof to be redeemed by mailing such notice not less than thirty (30) days prior to the date fixed for redemption to the registered owner at the address of the registered owner as shown on the registration books of the Issuer. Bonds shall be called for redemption in multiples of$5,000, and bonds of denominations of more than $5,000 shall be treated as representing the number of bonds obtained by dividing the denomination of the bonds by $5,000, and such bonds may be redeemed in part. The notice of redemption for bonds redeemed in part shall state that, upon surrender of the bond to be redeemed, a new bond or bonds in the same aggregate principal amount equal to the unredeemed portion of the bonds surrendered shall be issued to the registered owner thereof with the same interest rate and maturity. No further interest on bonds or portions of bonds called for redemption shall accrue after the date fixed for redemption, whether the bonds have been presented for redemption or not, provided funds are on hand with the Transfer Agent to redeem the bonds or portion thereof. This bond is transferable only upon the books of the Issuer kept for that purpose at the office of the Transfer Agent by the registered owner hereof in person, or by the registered owner's attorney duly authorized in writing, upon the surrender of this bond together with a written instrument of transfer satisfactory to the Transfer Agent duly authorized in writing and thereupon a new registered bond or bonds in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the Bond Resolution, and upon the payment of the charges, if any, therein prescribed. The Transfer Agent shall not be required (i) to issue, register the transfer of, or exchange any bond during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of bonds selected for redemption under the Bond Resolution and ending at the close of business on the date of that mailing, or (ii) to register the transfer of or exchange any bond so selected for redemption in whole or in part, except the unredeemed portion of bonds being redeemed in part. THIS BOND IS A SELF-LIQUIDATING BOND AND IS NOT A GENERAL OBLIGATION OF THE CITY AND DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE CITY WITHIN ANY CONSTITUTIONAL, STATUTORY OR CHARTER LIMITATION, AND IS PAYABLE BOTH AS TO PRINCIPAL AND INTEREST SOLELY FROM THE NET REVENUES OF THE SYSTEM AND CERTAIN FUNDS AND ACCOUNTS ESTABLISHED UNDER THE BOND RESOLUTION. THE PRINCIPAL OF AND INTEREST ON THIS BOND ARE SECURED BY THE STATUTORY LIEN HEREINBEFORE DESCRIBED. The Issuer has covenanted and agreed, and covenants and agrees, to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be outstanding, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest on the bonds of this issue and any other bonds payable from the Net Revenues as and when the same shall become due and payable, to provide for the payment of expenses of administration and operation and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution. It is hereby certified and recited that all acts, conditions and things required by law to be done precedent to and in the issuance of this bond and the series of bonds of which this is one have been done and performed in regular and due time and form as required by law. This bond is not valid or obligatory for any purpose until the Transfer Agent's Certificate of Authentication on this bond has been executed by the Transfer Agent. IN WITNESS WHEREOF, the City, acting through the Lansing Board of Water and Light, has caused this bond to be signed in its name with the facsimile signatures of the Chairperson and Corporate Secretary of the Issuer, and a facsimile of the City's corporate seal to be printed hereon, all as of the Date of Original Issue. LANSING BOARD OF WATER AND LIGHT By David Price Chairperson Countersigned: By M. Denise Griffin Corporate Secretary [INSERT STANDARD FORMS OF CERTIFICATE OF AUTHENTICATION AND ASSIGNMENT] PROVISIONS WHICH APPLY TO ALL SENIOR LIEN BONDS Section 12. Payment of Bonds; Defeasance. The Bonds and the interest thereon shall be payable solely from the Net Revenues, and to secure such payment, there is hereby created a statutory lien upon the whole of the Net Revenues. Pursuant to provisions of Act 94, the City, by and through its Board, hereby pledges to the repayment of principal of, redemption premium, if any, and interest on the Bonds, the funds and accounts established by this Bond Resolution, and a statutory lien is hereby created on such funds and accounts. The liens and pledge provided by this Bond Resolution shall continue until payment in full of the principal of and interest on all Bonds payable from Net Revenues, or, until Sufficient cash, Sufficient Government Obligations, Sufficient Municipal Obligations or any combination thereof shall have been deposited in trust for payment in full of the principal of and the interest on all Bonds to be paid to their maturity, or, if called or if irrevocable instructions have been given to call Bonds for redemption, to the date fixed for redemption together with the amount of the redemption premium, if any. Upon deposit of Sufficient cash, Sufficient Government Obligations, Sufficient Municipal Obligations or any combination thereof, the statutory lien created by this Bond Resolution shall be terminated with respect to the Bonds to be paid from the cash, Government Obligations or Municipal Obligations, or combination thereof, the Registered Owners of such Bonds shall have no further rights under this Bond Resolution except for payment from the deposited funds and for the rights of replacement, registration and transfer provided by this Bond Resolution, and such Bonds shall no longer be considered to be Outstanding Bonds under this Bond Resolution. Section 13, Management. The operation, repair and management of the System shall be under the supervision and control of the Board. Section 14. Charges. The rates to be charged for service furnished by the System and the methods of collection and enforcement of the collection of the rates shall be those permitted by law and established by the Board and in effect on the date of adoption of this Bond Resolution and thereafter as established by the Board. Section 15. No Free Service. No free service shall be furnished by the System to any person, firm or corporation public or private, or to any public agency or instrumentality. Section 16. Rate Covenant. The Board will at all times fix, establish, maintain and collect rates, fees and charges for the sale of the output, capacity, use or service of the System which, together with other income, are reasonably expected to yield Net Revenues equal to at least 125% of the Aggregate Debt Service Requirement for the forthcoming twelve month period plus such amount as is necessary to comply with all covenants in the Bond Resolution and to pay all charges and liens whatsoever payable out of Net Revenues in such period. Section 17. Operating Year. The System shall continue to be operated on the basis of an operating year commencing on July 1st and ending on the 30th day of the following June. For purposes of determining the annual Aggregate Debt Service Requirement on the Bonds for any operating year, payments of principal and interest due on July 1st shall be considered to be part of the Aggregate Debt Service Requirement for the preceding operating year. Section 18. Funds and Accounts: Flow of Funds. All Revenues of the System shall be set aside as collected and credited to a fund to be designated UTILITY SYSTEM RECEIVING FUND. The Revenues so credited are pledged for the purpose of the following funds and shall be transferred from the. Receiving Fund periodically in the manner and at the times hereinafter specified: A. OPERATION AND MAINTENANCE FUND: Periodically, out of the Revenues credited to the Receiving Fund there shall be first set aside in, or credited to, a fund designated OPERATION AND MAINTENANCE FUND, a sum sufficient to provide for the payment during the succeeding period of the next month's expenses of administration and operation of the System, including such current expenses for the maintenance thereof as may be necessary to preserve the same in good repair and working order. B. BOND AND INTEREST REDEMPTION FUND: There shall be established and maintained a fund designated BOND AND INTEREST REDEMPTION FUND, the moneys on deposit therein from time to time to be used solely, except for required deposits to the Rebate Fund, for the purpose of paying the principal of, redemption premium, if any, and interest on the Bonds. Out of the Revenues remaining in the Receiving Fund, after provision for the credit or deposit to the Operation and Maintenance Fund, there shall next be set aside, monthly, in the Redemption Fund a sum proportionately sufficient to provide for the payment of the principal of, mandatory redemption requirements, if any, and interest on the Bonds as and when the same become due and payable, subject to any credit therefor as provided in this Section 18(B). If there is any deficiency in the amount previously set aside, that deficiency shall be added to the requirements for the next succeeding month. There shall be established a separate account in the Redemption Fund to be known as the BOND RESERVE ACCOUNT. On the date of delivery of any Additional Bonds issued pursuant to Section 24(a) or (c) of this Bond Resolution, the Board shall transfer to the Bond Reserve Account from the proceeds of the Additional Bonds or any other available source the lesser of (a) 10% of the proceeds of the Additional Bonds and (b) the maximum Aggregate Debt Service Requirement on the Additional Bonds for the then current and any subsequent operating year and commencing on the 1st day of the month following delivery of the Additional Bonds and on the 1st day of each month thereafter until the amount in the Bond Reserve Account equals the Reserve Requirement, 1/12 of the difference between the amount deposited on the delivery of the Additional Bonds and the Reserve Requirement. Except as otherwise provided in this Bond Resolution, the moneys credited to the Bond Reserve Account shall be used solely for the payment of the principal of, redemption premium, if any, and interest on Bonds as to which there would otherwise be a default. If at any time it shall be necessary to use moneys credited to the Bond Reserve Account for such payment, then the moneys so used shall be replaced from the Net Revenues first received thereafter which are not required for expenses of administration, operation and maintenance of the system or for current principal and interest requirements on any of the Bonds. The Board may satisfy the Reserve Requirement by a letter of credit, a surety bond, or an insurance policy if the provider or issuer thereof shall be rated by any nationally recognized bond rating agency as high or higher than the Bonds at the time of purchase of the letter of credit, a surety bond, or an insurance policy. If at any time the amount in the Bond Reserve Account exceeds the Reserve Requirement, the excess may be transferred to such fund or account as the Board may direct. The Supplemental Resolution authorizing Additional Bonds may either (i) provide that the Additional Bonds are equally and ratably secured by the Bond Reserve Account funded according to the Reserve Requirement, or (ii) provide for the creation of a separate bond reserve account securing that series of Additional Bonds and a different reserve requirement, or state that no bond reserve account is required. C. JUNIOR LIEN REDEMPTION FUND: If the Board shall ever issue Junior Lien Bonds or Junior Lien Notes, there shall be established and maintained a separable depositary fund for the purpose of paying the principal of, redemption premium, if any, and interest on such Junior Lien Bonds or Junior Lien Notes as they come due (the "Junior Lien Redemption Fund"). Revenues remaining in the Receiving Fund, after provision has been made for the requirements of the Operation and Maintenance Fund and of the Redemption Fund, shall be set aside, but not more often than monthly, in a fund for the Junior Lien Bonds or Junior Lien Notes in accordance with the resolution authorizing the issuance thereof. A separate account may also be established within such fund as a bond reserve account to be funded on a junior lien basis in accordance with the resolution authorizing the issuance of the Junior Lien Bonds or Junior Lien Notes. The detail of the establishment and maintenance of such fund shall be provided in the resolution of the Board authorizing the issuance thereof. D. SURPLUS MONEYS: Any Revenues in the Receiving Fund after satisfying all requirements of the Operation and Maintenance Fund, the Redemption Fund, the Rebate Fund and the Junior Lien Redemption Fund shall be deemed to be surplus moneys and may be used for such purposes as the Board deems to be for the best interests of the City. If there should be any deficit in the Operation and Maintenance Fund, Redemption Fund or the Rebate Fund on account of defaults in setting aside required amounts therein, then transfers shall be made from the moneys remaining in the Receiving Fund at the end of any operating year to those funds in the priority and order specified herein, to the extent of any deficit, before any other disposition is made of the monies in the Receiving Fund at the end of any operating year. Section 19. Rebate Fund. There shall be established and maintained a fund designated the REBATE FUND. Moneys representing investment earnings or profits shall be transferred annually from all funds and accounts established under this Bond Resolution and deposited in the Rebate Fund in an amount sufficient to enable the City to rebate investment earnings to the federal government, if necessary, in accordance with the requirements of the Internal Revenue Code. Funds on deposit in the Rebate Fund are not pledged as security for the Bonds. Monies shall be deposited in the Rebate Fund and shall be rebated to the federal government unless the City has received an opinion of nationally recognized bond counsel that failure to take such actions will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on such Bonds. Section 20. Priority of Funds. In the event the moneys in the Receiving Fund are insufficient to provide for the current requirements of the Operation and Maintenance Fund or the Redemption Fund or the Rebate Fund or the Junior Lien Redemption Fund, any moneys or securities in other funds of the System, on except the proceeds of sale of the Bonds, shall be credited extent of any deficit tlherei o th edotoethel Rebate and Maintenance Fund, second, to the Redemption Fund, to the exe Fund and fourth, to the Junior Lien Redemption Fund. Section 21. Investments. Moneys in the funds and account established herein, and moneys derived from the proceeds of sale of the Bonds, may be invested by the Board on behalf of the City in Investment Obligations. Investment of moneys in the Redemption Fund being accumulated for payment of the next maturing principal or interest on the Bonds shall be limited to Government Obligations bearing maturity dates prior to the date of the next maturing principal or interest payment respectively on the Bonds. Investment of moneys in any other funds or account, including moneys derived from the proceeds of sale of the Bonds, shall be limited to obligations bearing maturity dates or subject to redemption, at the option of the holder thereof, not later than the time estimated by the City when the moneys from such investments will be required. Any securities representing investments shall be kept on deposit with the bank or trust company having on deposit the fund or funds or account from which such purchase was made. Earnings or profits on any investment of funds in any fund or account established in this Bond Resolution shall be deposited in or credited to the Rebate Fund to the extent necessary as required by Section 19 of this Bond Resolution and any earnings or profits remaining in the Receiving Fund, Operation and Maintenance Fund and Redemption Fund, shall be deposited in or credited to the Receiving Fund. Investments of moneys in the Bond Reserve Account shall be valued at amortized cost, including any amount paid as accrued interest at the time of purchase until the payment of such interest or the next interest payment date. Section 22. Applicable Law. The Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94. Section 23. Covenants. The City and the Board covenants and agrees with the Registered Owners of the Bonds that so long as any of the Bonds remain as Outstanding Bonds and unpaid as to either principal or interest: (a) The Board will maintain the System in good repair and working order and will operate the same efficiently and will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Michigan and this Bond Resolution. (b) The City and the Board will not sell, lease, mortgage or otherwise dispose of any part of the System, except for sales or exchanges of property or facilities (1) which are not useful in the operation of the System, or (2) for which the proceeds received are, or the fair market value of the subject property is, less than 1% of the Revenues for the preceding fiscal year, or (3) which will not impair the ability of the Board to comply with the rate covenant described in Section 16 of this Bond Resolution. (c) The City and the Board will not grant any franchise or other rights to any person, firm or nless required or corporation to operate an electric system Bordawil\I Inl compete ot operate a with that willucompete with the authorized by law and the City and the Board System. (d) The Board will use their best efforts to enforce any contracts to which they are a party regarding providing of electrical service. (e) The Board will not issue additional bonds of prior standing to the Bonds. nts th The Chief Financial Officer is authorized on behalf ofv sable and ppkoved by boe Board to mae any londacounselaand the the purchaser of a series of Bonds as may be deemed ad municipal advisor. res in accordance with the of Act Section 24. Additional Bonds. The right is Reve nues t e System which shall be ofequal standing end to issue additional bonds payable from the NettyReven purposes and priority of lien on the Net Revenues of the System with the Bonds, but only for the following p p under the following terms and conditions: (a) For repairs, extensions, enlargements and improvements to the System or for the purpose of refunding a part of any Outstanding Bonds (unless such partial refunding is done in compliance with (b) below) and paying costs of issuing such Additional Bonds, including deposits which may be required to be not be issued made to a bond reserve account. Bonds for such purpRevses enues of thle System for the pursuant iscal year of the subparagraph (a) unless the actual or augmented Net ve System ending not more than 15 months prior to the sale of Additional Bonds shall be equal to at least one hundred twenty-five (125%) percent of the maximum Aggregate Debt Service Requirement in any current or future fiscal year on the Outstanding Bonds and on the Additional Bonds then being nding Bonds, the maximum the Additional Bonds are to be issued in whole or in part for refunding Outsta Aggregate Debt Service shall be determined by deducting from the principal and interest requirements for each operating year the annual Aggregate Debt Service Requirement of any Bonds to be refunded from the proceeds of the Additional Bonds, Net Revenues may be augmented as follows for the purposes of this subsection (a): (1) If the System rates, fees or charges shall be increased at or prior to the time of authorizing the Additional Bonds, the Net Revenues may be augmented by an amount which in the opinion of the Board's financial advisor will reflect the effect of the increase had the System's billings during such time been at the increased rates. (2) The actual Net Revenues may be augmented by the estimated increase in Net Revenues which in as a result of new customers which have the opinion of the Board's financial advisor will accrue not been serviced during the fiscal year described in paragraph (a) above or as a result of the acquisition of the repairs, extensions, enlargements and improvements to the System which have been made during or subsequent to the fiscal year described in paragraph (a) above or which will be acquired in whole or in part from the proceeds of the Additional Bonds to be issued. No Additional Bonds of equal standing as to the Net Revenues of the System shall be issued pursuant to the authorization contained in subparagraphs (a) or (c) if the City shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. (b) For refunding all of the Outstanding Bonds and paying costs of issuing such Additional Bonds. For refunding a part of the Outstanding Bonds and paying costs of issuing such Additional Bonds, if after giving effect to the refunding the maximum amount of Aggregate Debt Service in each future fiscal year shall be less than the Aggregate Debt Service in each future fiscal year prior to giving effect to the refunding. (c) Additional Bonds may be issued without meeting any of the conditions and tests set forth in subsection (a) above for any one or more of the following purposes: (1) to pay the cost of acquisition and construction of any repairs, replacements, betterments, improvements, major renewals or corrections of any damage or loss to the System necessary, in the opinion of the Consulting Engineer, to keep the System in good operating condition or to prevent a loss of Revenues therefrom or (ii) to pay the cost of decommissioning, disposal or termination of the System. Determination by the Board as to existence of conditions permitting the issuance of Additional Bonds shall be conclusive. Notwithstanding the foregoing requirements of Section 24, the Board reserves the right to issue Junior Lien Bonds and Junior Lien Notes payable as provided herein. Section 25. Events of Default. Each of the following events, with respect to an issue of Bonds, is hereby declared an "Event of Default": (a) default in the payment of the principal alt ma of, or interest,upon call for reldemption; or on premium, if any, on any _ Bond after the same shall become due, whether Y (b) default by the City or the Board in the performance dResolu tone or contained in Bonds; of the covenants, agreements or conditions on their part in thisiven provided no default shall constitute an Event of Default until 20%)written principal amount of the Out tantice thereof shall have been ding by the Registered Owners of not less than twenty percent Bonds to the City and the City shall have had sixty (60) days after receipt of such notice to correct such default or cause the same to be corrected and shall not have corrected such default or caused the same r, that if the to be corrected within such period; and provided, furthet of Defaudlt if alctbonsto cor hectat lthe same cannot b is within such period, it shall not constitute an Even instituted within such period and diligently pursued until the default is corrected. Section 26. Appointment of Receiver and Statutory Rights. The Registered Owners of Bonds representing in the aggregate principal amount not less than twenty and accounts 0a/nd Netl ROvenuesdcreated by ing Bonds, may protect and enforce the statutory lien and pledge of the funds Act 94, and enforce and compel the performance of all duts of the the lsegregation of City Reve nueseaBd the including the fixing of sufficient rates,the collection of Revenues, proper proper application of Revenues. In addition to the rights bC Act 94�The to statlutorydlieOwners n upon the Net y the Resolution, the Registered Owners shall have all the rights conferredY art thereof. however, shall not be construed to compel the sale of the System or any p Section 27. Effect of Waiver and Other Circumstances.. No delay or omission of any shall imps R agiYterged Owner to exercise any right or power arising upon the happening or an Event of Default rein and or power or shall be construed to be a waiver of any such Event eo RegisteredDefault Ownersamay beacquiescence exert sed frtheom t me every power and remedy given by this Bond Resolution to the g to time and as often as may be deemed expedient by the Registered Owners. Section 28. Amendments-, Consent of Registered Owners. (a) Amendments Without Consent of Registered Owners. The City, from timy by e through to time its Board, at any time, subject to the conditional or amendatoryamendatory resolutions whons in this Bond ich Resolution, r shall form a part hereof, for adopt one or more supplemental any one or more or all of the following purposes: (i) To issue Additional Bonds or Junior Lien Bonds or Junior Lien Notes; (ii) To add to the covenants and agreements of the City contained in this Bond Resolution, other covenants and agreements thereafter to be observed or to surrender, restrict or limit any right or power herein reserved to or conferred upon the City and the Board (including but not limited to the right to issue Additional Bonds); (iii) To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions contained in this Bond Resolution, or in regard to matters or nd not questions arising under this Bond Resolution, as the City nota e have materials desirablem necessary or adverse e f aecton the inconsistent with this Bond Resolution and whit interests of the Registered Owners of the Bonds; (iv) To increase the size or scope of the System; and (v) To make such modifications in the provisions hereof as may be deemed advisable by the City provided that the Board has confirmed in writing with each rating agency rating Outstanding Bonds to which the provision will apply that the adoption of such provision with not result in the reduction or withdrawal of any rating on such Bonds. — ovisions of Any amendment or supplemental resolution or resoluWithout the consent of oron authorized by the rnoti e to the Rlegi s Section tered 28(a) may be adopted by the City, by and through its Board, Owners of any of the Outstanding Bonds, notwithstanding any of the provisions of Section 28(b) )thel Registered (b) Amendments Requiring Consent of Registered Owners. With the con sent of Owners of not less than fifty one percent (51%) in principal amount of the Bonds then outstanding the City, by and through its Board, may from time to time and at any time adopt a resolution or resolutions provisions to or changing in any manner or eliminating supplemental hereto for the purpose of adding any p supplemental resolution; provided, however, that any of the provisions of this Bond Resolution or of any no such supplemental resolution shall (i) extend the fixed maturity of any Bond, change a mandatory redemption requirement for any series of Bonds or reduce the rate of interest thereon or extend the time reduce of payment of interest, or reduce the amount of the principal thereof, without trthe consent or thetend hReg s ered e time for payment of any premium payable on the redemption Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Registered Owners of the Bonds required to approve any such supplemental resolution, or (iii) deprive the Registered Owners of the Bonds, except as aforesaid, of the right to payment of the Bonds from the Net Revenues, without the consent of the Registered Owners of all the Outstanding Bonds or, (iv) cause any modification or reduction of the lien on or pledge of the Net Revenues or the funds or accounts established hereunder. No amendment may be made under this Section 28(b) which affects the rights or duties of the insurer of any of the Bonds without its consent. It shall not be necessary for the consent of the Registered Owners under this Section 28(b) to approve the fficient if such consent shall particular form of any proposed supplemental resolution, but it shall be su approve the substance thereof. Promptly after the adoption by the City of any supplemental resolution pursuant to the provisions of this Section 28(b), the City shall cause the Transfer Agent to mail a notice by registered or certified mail to the Registered Owners of all Outstanding Bonds at their addresses shown on the bond register or at such other address as is furnished in writing by such Registered Owner to the Transfer Agent setting forth in general terms the substance of such supplemental resolution. SALE OF SERIES 2019 BONDS Section 29. Ne otiated Sale of Bonds; Appointment of Senior Managing Underwriter. Based on the advice of PFM Financial Advisors LLC (the "Municipal Advisor"),negotiated sale nereby determined ordert o enablet he Board to select to be in the best interest of the Board to sell the Series 2019 Bonds by in time and adjust terms for the Series 2019 Bonds, to enter the market on shoer rate rt ticinterespoint the Sere which appears to be most advantageous, and thereby possibly obtain 019 Bonds, and to achieve sale efficiencies so as to reduce the cost of issuance and interest expense. The Chief Financial Officer is hereby authorized to select a managing underwriter and to name additional co-managers and/or to develop a selling group in consultation with the Municipal Advisor. By adoption of this resolution the Board assumes no obligations or liability to the underwriters for any loss or damage that may result to the underwriters from the adoption of this resolution, and all costs and expenses all from incurred by the underwriters in preparing for sale of the Series 2019 Bonds be otherw be aidise provided the pn theeds d of the Series 2019 Bonds, if the Series 2019 Bonds are issued, except a y Purchase Agreement for Series 2019 Bonds. by authorized to Section 30, Bond Ratings and Bond Insurance. The Chief sdeemed appropriate Financial officer is , inconsultation with apply for bond ratings from such municipal bond rating agencies aof the Municipal Advisor. If the Municipal Advisor recommends that the Board o negotiate ipurchasnsurers municipal bond insurance, then the Chief Financial Officer is hereby authorized garding er acquisition of municipal bond insurance, and, in consultation the Chief Financial Offc dv erg is or he select authorized an rto and determine which bonds, if any, shall be insured, and execute an agreement with the insurer relating to procedures for o her paying debt s.service on the insured bonds and notifying the insurer of any need to draw on the insurance and Section 31. Official Statement. The Chief Financial officer isafter sale authorized to app ove 2019circulation f a Preliminary official Statement describing the Series 2019 Bonds a prepare, execute and deliver a final Official Statement. zed to execute and Section 32. Continuing Disclosure. The Chief Financial Of edisclosureyundertaauthorlk undertaking as necessary in deliver, prior to delivery of the Series 2019 Bonds, a written continuing the requirements of Securities and order to enable the underwriter or bond purchaser to comply with Exchange Commission Rule 15c2-12. The continuing disclosure undertaking appropriate. shall be in substantially the form which she shall, in consultation with bond counsel, determine to Section 33. Sale of Series 2019 Bonds, The Chief Financial lwithootlfuther resolut o in oof this s n with the Municipal Advisor, to accept an offer to purchase the Series 2019 Bonds Board. This authorization includes, but is not limited to, determination the date of the Series inal 12019 Bonds; the amount of the Series 2019 Bonds; the prices at which the Series 2019 Bonds ar schedule of principal maturities and whether the Series 2019 Bonds shall of term bonds,sally or as ter interest provisions for early redemption, if any, including mandatory redemption rates and payment dates of the Series 2019 Bonds; and application d reroceeds solut on may be of the eevidenries 0ced by her Approval of the matters delegated to the Chief Financial officer under this execution of the Bond Purchase Agreement for the Series 2019 Bonds or other offer to purchase the Series 2019 Bonds, or a certificate of award of sale, or the Official er annum. The The maximum interest rate of the Series 2019 Bonds shaiscount o not eerem50mo,phall not be less than 97% price for the Series 2019 Bonds, exclusive of any original issued p ons of the principal amount of the Series 2019 Bonds, plus accrued data and computery. in mking such runs provided by II pal the Chief Financial Officer is authorized to rely upon d Advisor. In making such determinations the Chief Financial Officer is authorized to rely upon data and computer runs provided by the Municipal Advisor. e time Section 34. Other Actions. In the event that the Cthor Zed nundecial Orftlh sr resolution is not labnen to hperson that it becomes necessary to take actions directed or au designated by the Chief Financial Officer is authorized t o re directed to takee such other as, The fctiorns necessarytand agents and attorneys of the Board are authorized and of this convenient to facilitate issuance, sale and delivery of the Series 2019 Bonds witin the nd c tifhcates and to akerall other resolution, and to execute and deliver all other agreements, documents a actions necessary or convenient in accordance with this resolution, an to pay costs of transfer issuance agen fees inclmung pal not limited to rating agency fees, credit facility fees, insurance p advisor fees, bond counsel fees, and any other costs necessary to accomplish sale and delivery of the Series 2019 Bonds within the parameters of this resolution. MISCELLANEOUS Applicability of the Outstanding Bond Resolutions. Upon delivery of the Series 2019 Section 35. tered Ow Bonds in an amount sufficient to cause the Regis ds t t o then outstanding the provisions g and covenants fifty one percent (51%) in principal amount of the Bonds provided in the prior Bond Resolution adopted by the Board and amendedand restated on October 24, 1989 ha and further amended and supplemented from time to timelonger Section 36. Conflicting Resolutions. All resolutions an p date resolutions this insofar ar as they conflict with the provisions of this resolution are rescinded as of the effective Section 37. Severability and Paragraph Headings. If any section, paragraph, clause or provision of this resolution shall be held invalid, the invalidity of such cln headingsparagraph, in th ssresolpt onsare furn shall ished affect any of the other provisions of this resolution. The paragraph for convenience of reference only and shall not be considered to be part of this resolution. Section 38 Publication and Recordation. In accordance with the provisions of Section 6 of Act 94, this resolution shall be published once in full in the Lansing Snd shallrbe'recordedap in thefminutes of theneral tBoard ion in the City qualified under State law to publish legal notices, a and such recording authenticated by the signatures of the Chairperson and Corporate Secretary of the Board. Section 39. Effective Date. This resolution is hereby determined to be immediately necessary for the preservation of the public peace, property, health and safety of the City and the users of the System. In accordance with the provisions of Section 6 of Act 94, this resolution shall become effective immediately upon its adoption. We hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water andeetinht at a Regular meeting conducted and publicdnotice of on sa d March 27, 2018, at 5:30 p.m., Eastern Time, and that said meeting was Meetings Act, being 267, Public Acts meeting was given pursuant to and in full compliance wi ere kOpeand willbeor have beencmade available as of Michigan, 1976, and that the minutes of said meeting p required by said Act 267. ners We further certify that the following Commissioners were present at said meeting:Cloud Anthony Mullen, Ken Ross, Tracy Thomas and David Price, Beth Graham, Dennis Louney, Anthony M c Sandra Zerkle and that the following Commissioners were absent: None. We further certify that Commissioner Ross moved adoption of said resolution, and that said motion was supported by Commissioner Zerkle. We further certify that the following Commissioners voted for adoption of said resolution: ony oss,Tracy Commissioners David Price, Beth Graham, Dennis Louneym ers voted ny Id against nsthadoptiolneof said n, Ken Resolution: Thomas, and Sandra Zerkle and that the following Con None. We further certify that said resolution has been recorded in the Resolution Book and that such recording has been authenticated by the signature of the Chairperson andCorporate Corporate Secretary Chairperson 30874480.4\050796-00065 MANAGER'S REMARKS General Manager Peffley introduced Steve Serkaian, BWL Executive Director of Public Affairs, to give some project updates. Mr. Serkaian spoke as a member of the Board adef Directors public artfcommitment and Lansing pledged p J Council and stated that March is Art Advocacy Month. BWL m Arts 20 000 every three years to place art on the walls of the Central Substation. 'uThe submissions from artists the BWL's RFP that began earlier in month. work vv 11 be unveiled team at bout theJtime the substation is expected will befrom across the tri-county region. The art to be operational in the fall. COMMISSIONERS' REMARKS Commissioner Ross thanked the public for their comments and the input made over the course of the project. Commissioner Price Seconded Commissioner Ross' comment and agreed that the decision was not made quickly. PUBLIC COMMENTS Dot Johnson spoke about not being able to obtain information from the BWL regarding putting solar panels on the roof of her home. Ms. Johnson also asked why the BWL doesn't participate in the Michigan Saves program. ADJOURNMENT Chair Price adjourned the meeting at 6:38 p.m. M.Denise Griffin,Corporate Secretary Preliminary Minutes filed(electronically)with Lansing City Clerk: 4-4-18 Official Minutes filed(electronically)with Lansing City Clerk 5-29-18 Approved by the Board of Commissioners 3-27-18 W; Hometown People. Hometown Power. MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT January 23, 2018 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, January 23, 2018. Chairperson David Price called the meeting to order at 5:30 p.m. Present: Commissioners David Price, Beth Graham, Dennis Louney, Anthony McCloud, Anthony Mullen, Ken Ross, Tracy Thomas, and Sandra Zerkle. Non-Voting Commissioners present: Douglas Jester (East Lansing), William Long (Delta Township) and Brian Ross (DeWitt Township). Absent: None The Corporate Secretary declared a quorum. Commissioner Brian Ross led the Pledge of Allegiance. Commissioner Price reported that Commissioner Rod Taylor, advisory board member representing DeWitt Township, submitted his recognition and requested a motion to officially accept his resignation. Motion by Commissioner Mullen, Seconded by Commissioner Ken Ross, to accept the resignation of Rod Taylor. Action: Motion Carried Commissioner Price recognized and welcomed the new Commissioner, Brian Ross, representing DeWitt Township. APPROVAL OF MINUTES Motion by Commissioner Graham, Seconded by Commissioner Thomas, to approve the Regular Board Meeting minutes of November 14, 2017 and the Special Board Meeting minutes of December 5, 2017. Action: Motion Carried PUBLIC COMMENTS James Clift, policy director of the Michigan Environmental Council, spoke regarding the proposed new power plant. He stated a view of a lack of transparency regarding the proposal of the new natural gas plant and would like a more thorough and transparent process that shows that the board has evaluated all reasonable alternatives before further expenditures are made on the plant. Mr. Clift stated that the power plant is viewed as potentially extremely risky for the rate payers of the BWL. If major industrial payers leave the area, there will be a rate impact for the residential rate payers. Mr. Clift stated that the closing the coal capacity is supported but requested that a purchase power agreement be made for 2020-2025 while less risky energy efficiency programs and demand response reductions were utilized. Steve Rail, Lansing resident, spoke and presented points arguing against the central power plant that will be built. Anna Fisher, BWL customer and Lansing resident, spoke regarding not being able to put input into the building of the natural gas power plant and requested that less risky options and more current technologies be considered. Rebecca Payne, south Lansing resident, who has installed solar panels on home stated that the solar panels are a good investment and suggested that the BWL invest in renewables rather than in a gas plant that will last only 30 years. Marshall Klubow, BWL rate payer and co-founder of Mid-Michigan Energy Cooperative, spoke regarding having the technology to create electricity and store it, and requested that the decision for the power plant be postponed until the ecological impacts,financials, and renewables are discussed. COMMUNICATIONS Electronic Mail received From or Re: a. Letter of Resignation regarding Commissioner Rod Taylor of DeWitt-Referred to Management. Received and Placed on File b. Suellen Hozman regarding Tree Trimming -Referred to Management. Received and Placed on File c. Thank you card from BWL Internal Auditor Phil Perkins- Referred to Management. Received and Placed on File Commissioner Mullen presented the Committee of the Whole Report: COMMITTEE OF THE WHOLE Meeting Minutes January 9, 2018 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,January 9, 2018. Committee of the Whole Chair Tony Mullen called the meeting to order at 5:30 pm 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 Doug Jester (East Lansing). Absent: Rod Taylor (DeWitt Township) The Corporate Secretary declared a quorum. Public Comments None. Approval of Minutes Motion by Commissioner Thomas, Seconded by Commissioner Ross, to approve the Committee of the Whole meeting minutes of September 12, 2017. Action: Motion Carried. IT Strategic Initiatives General Manager Dick Peffley introduced Kim Ingram, Chief Information Officer (CIO), who spoke about the IT Strategic Initiatives Plan. Ms. Ingram stated that the IT goals and initiatives were aligned with the BWL Strategic Plan and she highlighted the completed goals of 2017 and the goals for 2018. a Strategy 4 Implement New Technologies ; � �;,,. '� �� 3� ,,,,,�,,,;,I ,� ��µ� C,Da25+:pvart ow[uzwm•rz antl Fmpfp;y+:throayh(nhanted Vzr WTacr+,aojr _ ;m;,,, ,,,,,,;';;,,,.,,,� Cn Trvx CaVlien ® kRe . GOmplaie ........... . ...................... ........... .._._.......... ........._......._.......... ............. ............ .............. .......... 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Tart a.3a Timeline': MiCrtplaef .:..1 adennN.Dulx ie xau'a, ny_,rplemenetrnno:o;Y•nhant•r,<nnlcwpp:ribwm•fl -. rea0f L[[ R IYTD PMOIC 11fa CJ 50 3 fT70T)n>nca aY•m.lr[�ti.D<fP Drtr..+I.c MCY a.ed 1pr tat h-il 101utpn, 2..fa nar e,IrerRes,fchnCre,PerIPECralmmperenn y^Ptwed _ I 'RP la/na uct !i bI Aa CI PI ibl�hed GrL (vC aci:ftY aflwn wll aprvtlnue baseq an bntln v^F 101E fla tl Yl Yt andart tadlal OCPEOaA _ ,www. 3 tab pc--Tafk OwPCr.iTO/Ksn•m � Iiakd L 1 t ttuaC,rt6evernaM ldhaN �C C Mrfeit.rrt Dretoc015 ba ad an Eeltnna""iE kdua 6t�;nm I pLY Y Y W Pa 1 ...._._._ ...._� 0iD ...................._ .._..................... .. _._.._.............._................ .. 7 Talk Lab Tim<ane NdestOMs �.er:tincpullY eebarn andeemparC u�rr•^ie•stprattices of w<%lagitate-cf-tne-art >OiT f.P 00 ,.artn 1 ieurra^- 6 si in el:sa Its _I t PcnnalO;Nt Qeinp ta;rtd anO depl.-tad QY test,lmclasi cr;ani:aupns 101E Cvn;�.n-.ee-ha^crmen;l:a sacur�fy,reaeticl�p�:a;urlS:est/utu+r sta:<Indwtryitandar0 irendf, .. .. ........«_.... .......j .n.Vih -aes a:-tl .e.ora curt Stfate(k iasY Ownar:RD1K:m w^.;ram 20 itt' CM1 t Yel[ It-imP -'jn tl Carp.ariie Gpvernarc! .. -- ..-- Tafk 6.2[ TimN.ne aaiNftOMf - /tF ..pa a,li and a_u.i.,,..na.d f.r m;natam•-S and use f tnn t' 3 C- i t t N (a I W h Id by tPla[b -J1{ Sir t 6ic Ta OW a RDI Km -t am 20 Crd L D atu,p d my trandl tlMnob,{y, 11 IT Corporate Strategic Plan —Goals for 2017 •4.1 Support existing&planned •4.2 Enhance IT& projects with IT Infrastructure Communications Technology • Completed IT High Level • Completed the IT Organization Assessment restructuring. • Completed IT Deep Dive on • Completed Professional Infrastructure&Architecture Development Plans for all IT • Completed the IT Strategic Plan Resources. • Completed IT Strategic Plan Roadshows throughout all departments within BWL. • IT/OT Network Separation, IT Corporate Strategic Plan —Goals for 2018 • 4.1 Support Existing&Planned Projects 4.2 Enhance IT&Communications with IT Infrastructure Technology We are designing a new data center utilizing a Cisco ACI solution. • We've established a PMO that will morph Thi ,,,,infrastructure gives us the ability to scale on in to a PMO Center of Excellence. multiple platforms,have more security in our environment,and support the future needs of existing, We continue to enhance our security planned and future projects. both internally and external) to our We are replacingg VDI devices with laptops,further Y Y enhancingour alrililytchaveamore mobile svarkforce. perimeter. • We are underway with our Project Management Office We stay abreast of current IT trends,best (PMO). We have enhanced our Enterprise Technology Team practices,and industry standards through (ETT)Charter and its been approved and adopted. Gartner. Inalignment,we are continuously rolling out Project We continue to invest in our IT resources Management Tools as not only apart al our IT Governance.Audit,but also as a partofthe PMO through enhanced,professional Developmentand preparation for CMMI Initiative, development0 opportunities,the ability to CMMI will provide standards,pprocedures and PMPP Y process thattvillsupportourlT Governance Model. attain certifications,and develop new skills aligned to industry standards and best practices, rr- (.. 'i Chair Price questioned the number of malicious hits, potential malware, viruses, etc. that are received per day. CIO Ingram responded that security tools have been put in place, internally and externally, and that an excess of 1,000 hits could occur daily. Closed Session Meeting Committee of the Whole Chair Mullen stated that the Administration has provided us with a Confidential Memorandum and discussion of such content is most appropriate in closed session. Chair Mullen asked for a motion to go into closed session for the purpose of discussing the Confidential Memo as permitted by the Open Meetings Act, specifically MCL 15.268(h) and MCL 15.243(y). Motion by Commissioner Price, Seconded by Commissioner McCloud to go into closed session. Action: Motion Carried. Roll Call Vote: Yeas: Commissioners Beth Graham, Dennis M. Louney, Anthony McCloud, Tony Mullen, David Price, Ken Ross and Tracy Thomas, Sandra Zerkle, and Non-Voting Members: Bill Long (Delta Township) and Douglas Jester (East Lansing). Nays: None. Action: Motion Carried. The Committee of the Whole went into closed session at 5:42 p.m. The Committee of the Whole reconvened to open session at 6:28 p.m. Motion by Commissioner Graham, Seconded by Commissioner Ross to reconvene into open session. Action: Motion Carried. Central Substation and Westside Reinforcement Update General Manager Peffley introduced Steve Brennan, Manager of Project Engineering. Mr. Brennan provided the Board with an update of the Westside Reinforcement and Central Substation projects. These two projects total approximately $60 million, are part of the Lansing Energy Tomorrow plan, and must be completed in order to close the Eckert power plant. The Central Substation is necessary to remove load from the Eckert substation prior to its closing and the Westside Reinforcement is necessary to maintain reliability and meet FERC and NERC reliability compliance requirements. The Westside Reinforcement involves modifying three existing substations and building eight miles of new 138 Kv transmission line. Mr. Brennan provided details on each project and indicated that both are on schedule and within budget. Anti-Nepotism Policy Resolution Michael Flowers, Human Resources Executive Director, reviewed the proposed changes to the Anti-Nepotism Policy. Nepotism Policy �k'HEREAS,in order tp promote a diverse workforce,avoid even the appearance of favoritism in employment matters,and to assure that an employee's hire,transfer,or promotion is based solely on the employee's qualifications and performance,the Board of Water and Light(BkVL)is altering and clarifying its policy on nepotism_ RESOLVED,That as of January 30,2004,the BWL will not hire,transfer,or promote an employee to work in any Responsibility Area(RA)that reports to a Manager or Director or through a Manager to a Director where the Manager and/or Director is a family member of the employee. Additionally,no employee will be placed in a position in which he or she reports directly to a family member. I ellawii�g t1E#'eetie date sf 4arixilir-y,-nE fasriilt c;kt o- t� Corapr�'- �riidi _ =n-oo�"' r3�33F2 --'�=Y3E+- T.' FI'R I t 1�P 01 r�V r 'raL�at ft3s �tk l� es o1 thtrgxalst3-f�tr�i y sr rr r 1}a1l b e drt tard-a> SPeuse-_�,3i"areatsilep-p' }i ik hnLL tit,tp iblu-rg—A apted i1�jtep-c4 itd #x Fe eaa }r�tt}<lc .ikf;,.Fnaegip trixU;ut'eaf-grur}dparr{}t:-iii-hc�+A;xtrrxt,tuu>lr.;or�apy-<:,AVsiu: FURTHER RESOLVED,That exceptions to this Policy may be permitted for reasons related to exigent needs of the B%N L. FURTHER RESOLVED,That the General Manager shall establish procedures consistent with this policy and shall be responsible for their implementation and compliance. GM Peffley stated that he has always had the right to waive the policy, but supports the recommended modifications. After a brief discussion regarding why the modifications were recommended the following motion was offered. Motion by Commissioner Price, Seconded by Commissioner McCloud to forward the Anti-Nepotism Policy Resolution with the proposed edits to the Board for consideration. Action: Motion Carried Unmanned Aerial Vehicle Storm Restoration Update GM Peffley informed the Committee that the BWL purchased a drone and it is already paying big dividends for the BWL. He presented slides depicting the use of the drone to find hot spots on faulty wiring, transformer problems, and line feeds. An infrared camera on the drone helps to identify future failures. 4 s, r s. F s r� There was some discussion regarding the capabilities of the drone. General Manager Peffley informed the Committee the drone is operated from a BWL truck that is set in a specific location and kept in line of sight. The discussion also touched upon the possibility of mobile mapping and data retention regarding circuit location and replacement. General Manager Peffley stated that exploration of such technology is being explored as well as the use of drones to find leaks during boiler inspections. MIOSHA Update A complaint was submitted to the Michigan Occupational Safety and Health Administration (MIOSHA) regarding the possibility of an explosion due to a faulty boiler. General Manager Peffley explained that more than likely it was not an explosion but a hunk of ash that fell and made a loud sound. He informed the Committee that when MIOSHA gets involved, a fine is usually assessed. It is worth mentioning that the BWL submitted documentation regarding the matter and there were no wrong findings. Commissioner Louney thanked GM Peffley for providing the MIOSHA information to the Commissioners and for clarifying the difference between a violation and a warning. GM Peffley also stated that the BWL is going for a high rating from MIOSHA that only Consumers Energy has and it requires very detailed inspections of the facilities. It takes a year to get the certification and only a handful of plants have them. Mutual Aid Assistance GM Peffley thanked the employees for the work that they did in Florida after the recent hurricane. He said the work that was done was well organized. Other GM Peffley provided the Commissioners with a copy of the Focus magazine in which the BWL was named as a catalyst to redeveloping the REO town area. Commissioner Mullen spoke about the number of questions and requests that are being submitted to the three appointed employees by members of the Board of Commissioners. He suggested that questions be tapered down and that some be submitted for agenda topics at various committee meetings. Adiourn Motion by Commissioner Price, Seconded by Commissioner McCloud to adjourn the meeting. Meeting adjourned at 7:02 p.m. Respectfully Submitted Tony Mullen, Chair Committee of the Whole Commissioner Ken Ross presented the Finance Committee Report: FINANCE COMMITTEE Meeting Minutes January 9, 2018 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, on Tuesday,January 9, 2018. Finance Committee Chair Ken Ross called the meeting to order at 7:05 pm and asked that roll be taken. Present: Commissioners Ken Ross, Beth Graham, Dennis Louney, and David Price. Also present: Commissioners Anthony McCloud, Anthony Mullen, Tracy Thomas, and Sandra Zerkle, and Non-Voting Commissioners Bill Long (Delta Township), and Douglas Jester (East Lansing). Absent: None The Corporate Secretary declared a quorum. Public Comments Cathy Welch stated her concern regarding the tree trimming process that is taking place in her neighborhood, the city, and elsewhere. She stated that she has learned that no research was done regarding the impact on the environment, wildlife, or economically and requested that tree trimming come to a halt until research has been done on the mentioned areas. Approval of Minutes Motion by Commissioner Price, Seconded by Commissioner Louney, to approve the Finance Committee meeting minutes of November 7, 2017, Action: Motion Carried. November YTD Financial Summary Chief Financial Officer (CFO), Heather Shawa presented the following: Cash Inaime S6drment YVO Ratios. _ _ I Tnploype DA'I w.« is xnu. fa'rJ..,•uu s,.xa ..3'i::i4..iT...T............ a .w>w•v.•.> I,arwa✓ sm.w.0 rc:n*fs ,.,.m.«,c «e.•x r uw.0 nr"ae •. .,.i,,.w ;k._k,wrw.....i..x?!.P!L`.....L'^?ti'.......�i."...d..uvarv.=...1'.'?•.�3Y.....�Cf .a. .. ......................_............_...................._e...__.__.......___......._....... ___........_....._.— oo•r. 1_!.%3'JR..•'^++'+.1._M:C'2�'*.L`tiL`L 10Eb:!"* l+udy"A Status Y I't) �x ..., :., ».....:w '3"�r^.!>w-7 [f_^F.M!X{._L.:xaa« x:z^•x« +•I «. ..:... w«•.,.«..v,wnw••«• .1 w.....• iv«J&Ws•a YTt, . ., .,.... , :..r..w:::':i_�._.I :.L._......^�._7._1�M^t._%•u,u".....:.a;j a`-a 'rt' i-n.., .... .,•,_,�.-�—�,� ..................___ «. w,......................:..�..,,..-... Return on As.rrts x__1 L<n. ._°:`''.'.�: .„.«,:. r..nvc-r..._.�.cnm.._i'w t .•.,: r,<...• o«;:..m w �.._:c_a.Cash balance balance and metrics remain green and continue to be on track. The Income Statement indicates that the total revenue through November actual is just over $150 million compared to budget of $145 million. Through the first five months of the fiscal year, BWL is 5.1%% over budget. Wholesale is slightly down primarily due to an extended outage at Belle River plant. Operating expenses continue to trend down and actual spend is about 2%. 0 & M spending will be tracking closer to budget in December and through the end of the year. Net income for the fiscal year is anticipated to be just under $9 million. Quarterly reviews are coming up and the mid-year review meetings, which are a good indicator of whether the projection needs to be adjusted, are scheduled to begin on January 29 with management. Any adjustments made in February will be noted in the March Finance Committee meeting. Capital spending is tracking slightly under budget based on cash flow but projections are to still spend the capital budget of around $60 million. BWL has started the fiscal 2019 0& M and Capital budget and Finance will be working with management over the next several months. Two of the five ratios are being met. The Operating ratio is slightly variant from the median because net income loss was projected but there was net income. Employee data hasn't changed from October. There are still vacancies to fill and temporary or contract employees are being utilized. Benefit costs are on track. About $400,000 of the $1 million under budget is due to a stop loss recovery that was received and credit was taken in the month the recovery was received. There were inquiries from: Commissioner Thomas inquired about the number of temporary and permanent employees. Ms. Shawa responded that BWL has 37 temporary employees and that in the IT department there is a staff augmentation contract and those employees are not included in the count. If they are included, BWL is closer to or at budget. GM Peffley added that BWL is attempting to hold jobs open for employees at the Eckert plant and that HR continues working with Operations to attempt to find work for those employees when the plant closes. Commissioner Zerkle inquired about the percentage of employees that will be retrained. Ms. Shawa responded that a rough estimate is one-third of the employees. GM Peffley added that BWL is getting closer to the implementation of Smart meters and the positions of the employees that do the reads, turn ons and turn offs will be changing. Commissioner Mullen inquired whether the implementation of the Smart meters (customer portal) would wait until they were all installed which would be in three to five years or would the portal be available as meters are installed. Ms. Shawa responded that was correct, it would be available only upon full implementation. Internal Audit Open Management Response Quarterly Report Chief Financial Officer Heather Shawa stated that the report has not been updated due to the holidays, however Commissioner should be getting an update by email before the end of the week. Ms. Shawa stated that there was one new recommendation based on the internal audit which was completed: follow-up of the hiring audit performed last year. The recommendation was to establish a timing goal in filling open positions, tracking progress using the weekly record log which HR produces and then consideration to add a departmental metric such as a departmental scorecard. Human resources management is working on the recommendation and is looking to immediately working with the departments to better define the timing goal for each open position. HR will also consider adding a departmental metric by June 30, 2018. Notice of Intent to Issue Revenue Bonds Resolution Ms. Shawa presented the Notice of Intent to Issue Revenue Bonds resolution which is the first formal step in the bond issuance process. This resolution authorizes the BWL to publish the notice of intent for new money revenue bonds. This is not required for refunding, which is what was brought forth last winter.This resolution also establishes the intent to reimburse the BWL for project costs incurred prior to the issuance of the new bonds. For example, long lead items such as the gas turbines will need to be procured prior to issuance to secure them using cash on hand. Once the bonds are issued, BWL will reimburse itself with the bond proceed. After approval of this resolution and publication of the related notice, which is required to be up for 45 days, the next step will be approval of the bond authorizing resolution which will be in the March Finance agenda. Once the resolution is in place in March, BWL will secure initial funding structured as a bond anticipation note. This will provide the necessary funding to get the project started which is primarily the new plant. The next step will be to begin preparing for the revenue bond issuance which currently is planned to take place in November of 2018. This resolution also allows BWL to cover investment in the T&D buildout, part of our Lansing Energy Tomorrow initiative, with any excess proceeds. This will also allow BWL to maintain its strong cash metrics and not have to pull from designated capital funds. Motion by Commissioner Price, Seconded by Commissioner Louney, to accept the Notice of Intent to Issue Revenue Bonds Resolution as presented. Action: Motion Carried Ms. Shawa introduced Bill Danhoff, BWL's bond counsel, to the Board. He and Brandie Ekren are assisting with the bond resolution. Other None Adjourn Commissioner Ross adjourned the meeting at 7:24 p.m. Respectfully submitted Ken Ross, Chair Finance Committee MANAGER'S RECOMMENDATIONS General Manager Peffley recommended that the Board approve the Notice of Intent to Issue Revenue Bonds Resolution before the Board that evening. RESOLUTION 2018-01-01 Notice of Intent to Issue Revenue Bonds Resolution Lansing Board of Water and Light RESOLUTION AUTHORIZING NOTICE OF INTENT TO ISSUE REVENUE BONDS FOR A NATURAL GAS COMBINED CYCLE FACILITY AND SYSTEM IMPROVEMENTS • Notice of Intent to Issue Revenue Bonds in an amount not-to-exceed $500,000,000 to finance a natural gas combined cycle facility and system improvements WHEREAS, the City of Lansing (the "City") provides in its City Charter that the Lansing Board of Water and Light (the "Board") has general management over water, heat, steam and electric services and certain additional utility services of the City, and the Board operates facilities for the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat, including all plants, works, instrumentalities and properties used or useful in connection with the supply and distribution of water and the generation and distribution of electricity, steam, chilled water, and heat (the "System"); and WHEREAS, the Revenue Bond Act, Act 94, Public Acts of Michigan, 1933, as amended ("Act 94") permits the Board to issue revenue bonds payable solely from the net revenues derived from the operation of the System (the "Revenue Bonds") in order to finance plants, works, instrumentalities, and properties used or useful in connection with utility systems such as the System; and WHEREAS, the Board has determined that it is necessary for the public health, safety and welfare of the City and the users of the System to acquire and construct a natural gas combined cycle facility to produce electricity, including all equipment and any appurtenances and attachments thereto and any related site acquisition or improvements, and the construction, improvement, and renovation of transmission and distribution infrastructure (collectively, the "Project") at a total estimated cost of Four Hundred Thirty-Five Million Dollars ($435,000,000); and WHEREAS, the Board has determined that it is necessary for the public health, safety and welfare of the City to acquire and construct System Improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements (collectively, the "System Improvements") at a total estimated cost of Sixty-Five Million Dollars ($65,000,000); and WHEREAS, issuance of revenue bonds as permitted by Act 94 in an amount not-to-exceed Five Hundred Million Dollars ($500,000,000) (the "Revenue Bonds") appears to be the most practical means to finance the Project and the System Improvements; and WHEREAS, a notice of intent to issue revenue bonds must be published before the issuance of the Revenue Bonds in order to comply with the requirements of Section 33 of Act 94; and WHEREAS, the Internal Revenue Service has issued Treasury Regulation § 1.150-2 pursuant to the Internal Revenue Code of 1986, as amended, governing proceeds of debt used for reimbursement, pursuant to which the Board must declare official intent to reimburse expenditures with proceeds of such debt before making the expenditures. NOW,THEREFORE, BE IT RESOLVED THAT: 1. Publication of Notice of Intent. The Board shall publish a notice of intent to issue the Revenue Bonds once as a display advertisement at least one-quarter (1/4) page in size in substantially the following form: NOTICE TO ELECTORS OF THE CITY OF LANSING OF INTENT TO ISSUE REVENUE BONDS FOR A NATURAL GAS COMBINED CYCLE FACILITY AND SYSTEM IMPROVEMENTS AND RIGHT TO PETITION FOR REFERENDUM PLEASE TAKE NOTICE that the Lansing Board of Water and Light intends to authorize the issuance and sale of Revenue Bonds pursuant to Act 94, Public Acts of Michigan, 1933, as amended, payable solely from revenues received by the Board from the operations of the Water Supply, Steam, Chilled Water and Electric Utility System (the "System"). The Revenue Bonds would be authorized in the maximum aggregate principal amount of not-to-exceed Five Hundred Million Dollars ($500,000,000). A portion of the proceeds in an amount currently estimated to be $435,000,000 would be issued for the purpose of paying costs to acquire and construct a natural gas combined cycle facility to produce electricity, including all equipment and any appurtenances and attachments thereto and any related site acquisition or improvements, and the construction, improvement, and renovation of transmission and distribution infrastructure. A portion of the proceeds in an amount currently estimated to be$65,000,000 would be issued for the purpose of paying costs of System improvements including, but not limited to, construction, improvement, and renovation of transmission and distribution lines and related utility system facilities for the water supply, steam, and chilled water systems and electric transmission and distribution lines and related electric utility system facilities, together with any appurtenances and attachments thereto and any related site acquisition or improvements. Costs financed with proceeds of the Revenue Bonds shall include funding of required bond reserve funds, capitalized interest and costs of issuance. SOURCE OF PAYMENT OF REVENUE BONDS THE PRINCIPAL OF AND INTEREST ON THE REVENUE BONDS SHALL BE PAYABLE solely from the net revenues received by the Board from the operations of the System. The revenues will consist of rates, fees and charges billed to the users of the System, a schedule of which is presently on file at www.lbwl.com. The rates, fees, and charges may from time to time be revised to provide sufficient net revenues to provide for the expenses of operating and maintaining the System, to pay the principal of and interest on the Revenue Bonds and any other bonds of the System, and to pay other obligations of the System. The Revenue Bonds will not pledge the full faith and credit of the City. The Revenue Bonds will not be a general obligation of the City. The Revenue Bonds may be issued in one or more series and may be combined with bonds issued for other purposes, and each series will mature in not to exceed thirty (30) annual installments with interest at such interest rate or rates to be determined at public or negotiated sale but in no event to exceed such rates as may be permitted by law. RIGHT OF REFERENDUM THE REVENUE BONDS WILL BE ISSUED WITHOUT VOTE OF THE ELECTORS UNLESS A VALID PETITION REQUESTING AN ELECTION ON THE QUESTION OF ISSUING THE REVENUE BONDS, SIGNED BY NOT LESS THAN 10% OF THE REGISTERED ELECTORS OF THE CITY, IS FILED WITH THE CITY CLERK OF THE CITY OF LANSING WITHIN FORTY-FIVE (45) DAYS AFTER THE DATE OF PUBLICATION OF THIS NOTICE. If a valid petition is filed, the Revenue Bonds cannot be issued unless approved by a majority vote of the electors of the City voting on the question of their issuance. This notice is given pursuant to the requirements of Section 33 of Act 94, Public Acts of Michigan, 1933, as amended. ADDITIONAL INFORMATION may be obtained at the administrative offices of the Lansing Board of Water and Light, 1201 S. Washington Ave., Lansing, Michigan 48910. M. Denise Griffin, Corporate Secretary Lansing Board of Water and Light 2. Sufficiency of Notice. The Corporate Secretary is hereby directed to publish the notice of intent in The Lansing State Journal, a newspaper of general circulation in the City qualified under State law to publish legal notices, which is hereby determined to be the newspaper that will reach the largest number of persons to whom the notice is directed. The Board hereby determines that the notice of intent and the manner of publication directed is the method best calculated to give notice to the electors of the City and the users of the System of the Board's intent to issue the Revenue Bonds, the purposes of the Revenue Bonds, the source of payment of the Revenue Bonds, and the right of referendum relating thereto. 3. Statement of Intent under Treas. Rea. 6 1.150-2. The Board hereby makes the following declaration of intent for the purpose of complying with the reimbursement rules of Treas. Reg. § 1.150-2 pursuant to the Internal Revenue Code of 1986, as amended: (1) The Board reasonably expects to reimburse itself for the expenditures described in (2) below with proceeds of debt to be incurred by the Board. (2) The expenditures described in this paragraph (2) are to pay certain costs associated with the Project and the System Improvements which were or will be paid subsequent to sixty(60) days prior to the date hereof or which will be paid prior to the issuance of the debt from the funds of the System. (3) As of the date hereof, the maximum principal amount of debt expected to be issued for reimbursement purposes, including reimbursement of debt issuance costs, is $500,000,000, which debt may be issued in one or more series and/or together with debt for other purposes. (4) A reimbursement allocation of the expenditures described in paragraph (2) above with the proceeds of the borrowing described herein will occur not later than 18 months after the later of(i) the date on which the expenditure is paid, or (ii) the date the Project and the System Improvements are placed in service or abandoned, but in no event more than three (3) years after the original expenditure is paid. A reimbursement allocation is an allocation in writing that evidences the Board's use of the proceeds of the debt to be issued for the Project and the System Improvements to reimburse the Board for a capital expenditure made pursuant to this Resolution. (5) The expenditures for the Project and the System Improvements are "capital expenditures" as defined in Treas. Reg. § 1.150-1(b), which are any costs of a type which are properly chargeable to a capital account (or would be so chargeable with a proper election or with the application of the definition of "placed in service" under Treas. Reg. § 1.150-2(c)) under general Federal income tax principles (as determined at the time the expenditure is paid). (6) No proceeds of the borrowing paid to the Board in reimbursement pursuant to this Resolution will be used in a manner described in Treas. Reg. § 1.150-2(h) with respect to abusive uses of such proceeds, including, but not limited to, using funds corresponding to the proceeds of the borrowing in a manner that results in the creation of replacement proceeds (within Treas. Reg. § 1.148- 1)within one year of the reimbursement allocation described in paragraph (4) above. 4. Financial Advisor. The Board hereby requests that Public Financial Management, LLC continue to serve the Board as Financial Advisor for the Revenue Bonds, including any bond anticipation notes which the Board might authorize in a future resolution. 5. Bond Counsel. The Board hereby requests that Miller, Canfield, Paddock and Stone, P.L.C., Lansing, Michigan, continue to serve the Board as bond counsel for the Revenue Bonds, including any bond anticipation notes which the Board might authorize in a future resolution. The Board acknowledges that Miller, Canfield, Paddock and Stone, P.L.C. has represented from time to time, and currently represents various underwriters, financial institutions, and other potential participants in the bond financing process, in matters not related to the issuance and sale of the Revenue Bonds. 6. Conflicting Resolutions. All resolutions and parts of resolutions insofar as they conflict with the provisions of this resolution are hereby rescinded. I hereby certify that the foregoing is a true and complete copy of a resolution duly adopted by the Board of Commissioners of the Lansing Board of Water and Light, at a Regular meeting held on Tuesday, January 23, 2018, at 5:30 p.m., Eastern Time, and that said meeting was conducted and public notice of said meeting was given pursuant to and in full compliance with the Open Meetings Act, being Act 267, Public Acts of Michigan, 1976, and that the minutes of said meeting were kept and will be or have been made available as required by said Act 267. 1 further certify that the following Members were present at said meeting: and that the following Members were absent: I further certify that Member moved for adoption of said resolution and that Member supported said motion. I further certify that the following Members voted for adoption of said resolution: and that the following Members voted against adoption of said resolution: Corporate Secretary 28959421.5\050796-00065 Motion by Commissioner Zerkle, Seconded by Commissioner Mullen, to approve the Notice of Intent to Issue Revenue Bonds Resolution. Discussion/Comments: Commissioner Ross took the opportunity to provide the Board with an overview of the open and transparent process taken by the BWL in the Lansing Energy Tomorrow initiative and the update to the BWL strategic plan over the last two and a half years. He outlined: "Starting back on August 13, 2015, the BWL was interviewed by Michigan Radio, and announced that the Eckert plant would close in 4 years—this has been a public goal for this organization for several years. On September 18, 2015,the BWL issue a press release seeking 2 community volunteers to serve on the Citizens Advisory Committee (CAC), a 9- member, citizen group charged with assessing the BWL's long term energy needs in the face of the eventual _ decommissioning of both the Erickson and Eckert coal burning plant. The CAC was to hold a series of public meetings, work with public energy experts at Public Sector Consultants, and engage the public on identifying the right future power generation and energy efficiency mix, examining natural gas, renewables, and energy efficiency.The culmination of this study, public engagement and self-assessment process would be the issuance of an Integrated Resource Plan (IRP) which would be used as a guide for the BWL over the next several years as we transition away from coal to a different mix of power generation. The CAC met on October 1, 2015 at LCC in Lansing, assessing the overall electric needs of the region, and on October 13, 2015 the website launch of "Lansing Energy Tomorrow" was publicly announced, which served as a public information space on the initiative, cataloging meeting materials, meeting descriptions and audio recordings of each meeting for public consumption.The BWL citizen group went to key communities in our service area to solicit input and engagement from a broad spectrum of citizens, and CAC meeting 2 was held at Hannah Community Center in East Lansing with the topic of "forecasting and resource needs". Meeting 3 was held on November 12, 2015 at Gier Community Center and the topic for discussion was "resource alternatives — looking at conventional generation". The 4th meeting examined "resource alternatives — renewable options & energy efficiency and was held ad Fenner nature center on December 9, 2015. The 51h meeting was held on January 13, 2016, where they looked at "managing future risks—scenarios and sensitivities," meeting at the LCC West Campus. On January 14, 2016 the BWL released public opinion poll results from a poll run by Epic MRA polling firm. They had surveyed 400 residents and 300 business owners and found that most favor balanced energy mix — prioritizing affordability and reliability. This research was discussed at the CAC and BWL committee meetings and incorporated as one of the data streams that the CAC considered in the IRP development process. Meeting 6 of the CAC was held on February 3, 2016 at the LCC West Campus and focused on "managing future risks—scenarios and sensitivities." The CAC released the IRP report, on May 10, 2016, which calling for a balanced plan for our energy future. The report was issued publicly and accepted by the BWL Board of Commissioners for review and integration into our strategic plan, which had not been updated since 2008. On August 16, 2016 the BWL COW met and had an open public discussion on the Proposed Strategic Plan update" during which the IRP report and recommendations were discussed in detail and management was provided with numerous ways in which our strategic plan should be updated to meet the IRP suggestions. The energy portfolio mix recommended in the IRP was also discussed at length at the public meeting and adopted by the Commissioners (natural gas as a bridge away from coal with dramatically increasing renewables— primarily wind and solar—along with a constant focus on energy efficiency improvements). The amended and updated strategic plan was passed out of the COW after much discussion on September 13, 2016 and the Board approved and adopted it at the September 27, 2016 public meeting. The public process used by the BWL during the Lansing Energy Tomorrow initiative, and by the BWL Board in updating its strategic plan was designed to solicit public engagement and many stakeholders participated, including labor, environmental interests, citizens, and commercial ratepayers. While no process is perfect, the BWL tried its best to be thorough and inclusive throughout, making sure that elected officials and community leaders were aware of the discussions and given an opportunity to provide input,which many did do at every stage. Now we hear some complaining tonight that "we took too long"; "that our method of analysis and public engagement was based on dated information"; "the public didn't want a balanced approach to our energy future—they want all renewables"; and "we should avoid building a new plant altogether,just buy energy on the grid until we can go totally renewable in 2025 or after." Well, I submit that each and every one of these issues was discussed by the CAC and the Board over the last three years and much of it was the subject of the public opinion poll and the CAC, the BWL and the Lansing ratepayers disagree strongly—all opted for a balanced approach that put kept our energy destiny within our control. To those who complain that we moved too slow, I am sure we would have gone faster, you would have complained that we rushed the process with an end game in mind. What was most unfortunate is that they failed to engage with the CAC in 2015, and 2016 and failed to engage with the BWL Board in 2015, 2016 and 2017. So, on December 18, 2017—after much work the BWL announced $500mm natural gas plant and on January 9, 2018 the _ notice of Intent to issue revenue nds BWL Board Finance Committee held a public meeting approved 23a 2018 meeting. Contrary to the assertoons resolution, with a recommendation that the BWL approve tat the January by last-minute critics, the Notice of Intent to Issue Revenue Bonds resolution was not the beginning of the process—in fact it was the culmination of a long process with much public engagement. lan which had overall goal of liminating Commissioner Ross stated that it took time to h ch i develop obettertl thought out han coal, andpwhile not perfect, certainly less evil than coal reliance on coal,transitioning to natural gas wcommissioner Ross in the pollutants it generates, along with increasing l CAC es ancommitteeg IRP improvin rdeve ogy 1pme t, and St ategic Plan stated he felt this was a transparent process and that the development process was all done in public meeting,where public input was welcomed and requested." Action: Motion Carried. UNFINISHED BUSINESS There was no Unfinished Business, NEW BUSINESS There was no New Business. RESOLUTIONS/ACTION ITEMS RESOLUTION 2018-01-02 Nepotism POIIC WHEREAS, in order to promote a diverse workforce, avoid even pperance of ona s based solely Ion the employee's sm in employment matters, and to assure that an employee's hire, transfer, o promo qualifications and performance, the Board of Water and Light (BWL) is altering and clarifying Its policy on nepotism. RESOLVED, That as of January 30, 2004, the BWL will not hire, transfer, or promote an employee to work in any Responsibility Area (RA) that reports to a Manager or Director or througha Manager to a DII be placed in irector where the Manager and/or Director is a family member of the employee. Additional),, no employee a position in which he or she reports directly to a family member. FURTHER RESOLVED, That exceptions to this Policy may be permitted for reasons related to exigent needs of the BWL. FURTHER RESOLVED,That the General Manager shall establish procedures consistent with this policy and shall be responsible for their implementation and compliance. (Approved by Board January 23, 2018- Res. 2018-01-02) y Motion b Commissioner Mullen, Seconded by Commissioner Graham, to approve the Nepotism Policy Resolution. Action: Motion Carried. MANAGER'S REMARKS — General Manager Peff ley informed of the following: The BWL proposed rate hike takes effect in February and it coincides with the 5%franchise fee in Delta 1. T p Township. Equipment bids for the new plant gas turbines are being returned and the pricing is as anticipated an 2. Mr. Stojic's group is evaluating them. is Wind development in the thumb area received a special use p r it andwind in expo t Countcted to it w coml provide mercial in December 2018. It is a 90 MW project ect and combined with 110 MW that will be online. energy solar in the fall. It is the 4. The GroSolar project in Delta is snit in the state of Michigan on schedule to start a ndgbelongs to the Board of Water and largest tracking solar developme Light's residents. e the 5. Ha rvest Park is the new development customer and will b mar Juana grower ocatsecond rade largest with d in an annual revenue of$10 million. Harvest Park is a pharmaceutical the Dimondale area. They broke ground two weeks ago on Phase 1 of the development. COMMISSIONERS' REMARKS Commissioner McCloud wished Internal Auditor Phil Perkins a happy birthday. MOTION OF EXCUSED ABSENCE None. PUBLIC COMMENTS olic director of Michigan Environmental Council, commented onothe B L s strategiccontaining plan and James Cllft, p Y IRP. He spoke about the cost as a percent increase for rate payers, exploring risks, and price fluctuations. plant for MW Steve Rall, Lansing resident, s uggested the use of smaller units of 100%20 renewable when renewables are increas rather than a 250 MW p ed, or if businesses decide to g ADJOURNMENT Chair Price adjourned the meeting at 6:06 p.m. M.Denise Griffin,corporate Secretary Preliminary Minutes filed(electronically)with Lansing City Clerk:1-29-18 official Minutes filed(electronically)with Lansing City Clerk 4-4-18 BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, MICHIGAN RULES OF PROCEDURE APPROVED BY BWL COMMISSION: MAY 26, 2015 CITY COUNCIL EFFECTIVE: JUNE 8, 2015 I. MEETINGS 1.1 Regular Meetings 1.1.1 The Board of Water and Light(BWL) Commissioners shall hold regular bi-monthly meetings on the fourth Tuesday of the month in the REO Depot, 1201 S. Washington Ave., Lansing, Michigan 48910 or at such other place, as the Board shall determine, unless a regular meeting is rescheduled as provided herein. 1.1.2 A schedule of dates, places and times for each regular bi- monthly meeting to be held in the calendar year shall be adopted by the Board during November of the preceding year. 1.2 Special Meetings 1.2.1 Special Meetings of the Board shall be called by the General Manager or Secretary on the request of the Chair of the Board or on the request of any two Voting Members. 1.2.2 Members of the Board shall have at least 18 hours written notice of a Special Meeting designating the time and purpose of such meeting. The notice shall be delivered personally to each Member of the Board or left at his or her usual place of residence or business by the Secretary or someone designated by the Secretary. 1.3 Rescheduled Meetings 1.3.1 The Chair may reschedule any regular or Special Meeting. 1.3.2 Notice of any rescheduled meeting shall be given as required pursuant to Section 1.2.2, and Section 2.2. 1.4 ConflictingTimes imes The schedule of regular Board meetings shall not conflict with regular meetings of the Lansing City Council. 1 1.5 Committee of the Whole Meetings 1.5.1 The Board may convene as a Committee of the Whole upon call by the Vice Chair or any two Voting Members of the Board. 1.5.2 Notice shall be provided in accordance with the provisions for Special Meetings and State law. 1.5.3 The Committee of the Whole shall report its recommendations, if any, for consideration by the Board at a regular or Special Meeting. 1.6 Closed Meetings 1.6.1 Meetings that are closed to the public may be closed to the public only for those purposes permitted under the Michigan Open Meetings Act, as amended. 1.6.2 No Non-voting Member shall participate in any closed meeting the subject of which the Non-voting Member or the municipality(s) they represent has a conflict of interest or a financial interest other than as a citizen of the municipality. If a conflict of interest question is raised under this section at any Board meeting prior to going into closed session, such question shall be determined by a majority of those Voting Members present and qualified to vote before the main question shall be voted on. If the Non-voting Member is recused, they shall be prohibited from voting on or participating in the closed session. II. NOTICE OF MEETINGS 2.1 Publication of Dates A notice listing the dates of the regular meetings shall be published annually in a newspaper of general circulation in Ingham County at least three days prior to the time of the regularly scheduled meeting in January. At the regularly scheduled meetings in November each year, the Board shall name the newspaper in which the notice shall be published. 2.2 Posting Notice Notice of all meetings of the Board shall be posted in accordance with state law. 2.3 Designated Person The Secretary shall be responsible for posting notices. 2 I1I. QUORUM FOR A REGULAR OR SPECIAL MEETING 3.1 Number Required The presence of five Voting Members of the Board shall be a quorum for the transaction of bu-siness at all regular and Special Meetings. 3.2 Lack of Quorum In the absence of a quorum, those present may adjourn any meeting or hearing to a later date or hold the meeting for the purpose of considering such matters as are on the agenda. No action taken in the absence of a quorum shall be valid or effective unless and until ratified and confirmed at a subsequent regular or Special Meeting at which a quorum is present and at which five affirmative votes are given for ratification. IV. OFFICIAL ACTION AT REGULAR OR SPECIAL MEETINGS 4.1 The concurring vote of the majority of all Voting Members of the Board serving shall be necessary for official action and such vote may only take place at regular or Special Meetings of the Board on the following items: 4.1.1 Adopting the annual fiscal year budget and any amendments thereto. 4.1.2 Adopting rates for furnishing electric, water, and steam service. 4.1.3 Appointment or removal of the Director, Internal Auditor, and Secretary. 4.1.4 Purchase and sale of real property. 4.1.5 Sale or exchange of facilities as set forth in 5-207 of Lansing's City Charter. 4.1.6 Providing compensation, benefits, conditions of employment, and retirement plans. 4.1.7 Removal of a Member from service as an officer, except at the expiration of the officer's term. 4.2 Except as may be required by law or by section 10.1.4, all other matters considered by the Board shall require the affirmative vote of a majority of Voting Members present at a regular or Special Meeting. 4.3 The Board speaks through resolutions. A Member of the Board may only speak on the Board's behalf in accordance with its resolutions. See19.2.3. 3 V. VOTING 5.1 Roll Call Vote 5.1.1 A roll call vote shall be required for holding a closed meeting as specified by the Open Meetings Act or upon request of any Voting Member. 5.1.2 All Voting Members and Non-voting Members shall be required to participate in a vote to go into closed session as required by the Open Meetings Act. 5.2 Unanimous Consent If there is no objection to the proposed action, the action may be taken by unanimous consent, except actions required by roll call vote pursuant to these rules,the Charter of the City of Lansing, or the law of the State of Michigan. 5.3 Conflict of Interest If a Board Member has a conflict of interest on an issue before the Board, he or she shall reveal the conflict, not participate in discussion or any decision regarding the issue, and shall refrain from discussing the issue with any other Board Member or staff. VI. ANNUAL ORGANIZATION The Board shall organize at its first regular meeting following July I"or as soon thereafter as is reasonably convenient, by selecting one of its Voting Members as Chair and, one of its Voting Members as Vice Chair, each of whom shall serve until the first regular meeting in the following July or a successor has been selected. VII. DUTIES OF OFFICERS 7.1 Chair The Chair shall preside at all regular or Special Meetings of the Board and public hearings conducted by the Board, see that all orders and regulations are executed and complied with, see that all legal contracts with the BWL for or in the name of the City are performed, and shall perform such other duties as may be from time to time lawfully required of the Chair. The Chair shall also be an ex officio member of all committees of the Board, unless the Chair is an official member of a Committee. If the Chair is an official member of a Committee, she or he shall possess all voting privileges. It shall not be necessary for the Chair to relinquish the chair for the purpose of participating in debate or for the making of routine motions and resolutions. 7.2 Vice Chair In the absence of the Chair,the Vice Chair shall perform all the duties 4 and have all the powers of the Chair. The Vice Chair shall also preside over meetings of the Committee of the Whole. 7.3 Past Chair The most immediate past Chair of the Board who is not currently serving as Chair or Vice Chair of the Board shall be designated"Past Chair." If no Past Chair is serving on the Board, the Voting Members of the Board shall select a Voting Member to assume the duties of the Past Chair as set forth in these Rules of Administrative Procedure. The Past Chair shall assume the duties of the Chair when neither the Chair nor the Vice Chair is present. VIII. CHARTER POSITIONS 8.1 Director, Secretary and Internal Auditor The Voting Members of the Board shall, at its first regular meeting following July 1st of each year, or as soon as practicable thereafter, appoint a Director, an Internal Auditor and a Secretary. The Director shall also be known as the General Manager, and shall be the highest executive officer of the Board of Water and Light. The Internal Auditor shall also be known as the Director of Internal Audit. These positions shall be contract positions, shall report directly to the Board of Commissioners, and shall serve at the pleasure of the Board of Commissioners. 8.2 Unless otherwise determined by the Board of Commissioners, contract reviews for the Charter Position employees shall commence no later than sixty(60) days prior to the end of the fiscal year and be completed no later than the start of the next fiscal year. IX. STANDING COMMITTEES 9.1 Committees 9.1.1 In order to carry out its policymaking obligations, the Board of Water and Light Commissioners shall meet as often as needed, as one or more standing committees or ad hoc committees, in the REO Depot, 1201 S. Washington Ave., Lansing, Michigan 48910 or at such other place, as the Board shall determine. Notice of these meetings shall be provided in accordance with the Lansing City Charter and state law. 9.2 Standing Committees 9.2.1 The following standing committees shall be appointed 5 by the Chair as provided in 9.4: Finance Human Resource Nominating EXECUTIVE 9.2.2 The Finance Committee shall have oversight responsibility for financial performance measures and audits, capital expenditures and returns, bond indebtedness and credit rating, annual Operations & Maintenance budget, rate review, and the investment policies of the retirement plans. 9.2.3 The Nominating Committee shall at its first regular meeting following July Pt of each year, nominate a slate of officers at its annual organizational meeting and shall endeavor to rotate officers of the Board annually. 9.2.4 The Human Resources Committee shall have oversight responsibility for non-bargaining salary adjustments, employee survey results, labor relations, performance appraisal review for Board-appointed positions, Board staff appointments, salary, wages, and employee benefits. 9.2.5 The Executive Committee shall, during the intervals between the Board of Commissioners' meetings, assist in the development of the BWL's position on major issues and submit and recommend the position to the Board for consideration and action. The Executive Committee shall consider and act upon such other activities as directed or referred to it by the Board or as otherwise specified in these Rules. 9.3 Ad Hoc Committees Ad hoc committees shall convene whenever the need arises to address an issue or topic that would not appropriately fall within any of the other standing committees and would not require the attention of the Committee of the Whole. 9.4 Appointment of Standing and Ad Hoc Committees The Chair shall appoint Members to the standing committees and such other ad hoc committees as the Board may from time to time establish. The first Voting Member named on each committee shall be the Chair of the committee. Standing Committees: All standing committees, except the Executive Committee, shall have four (4) regular Voting Members and two (2) 6 alternate Voting Members who shall serve in the absence of regular Voting Member(s). The Executive Committee shall have four (4) Voting Members, including the Chair, Vice Chair and Past Chair and one (1) Member elected by the Voting Members, whose term shall be concurrent with the terms of the Officers. The Chair may appoint additional Non-voting Members to any committee. The Nominating Committee shall not consist of any Members who intend to run for an officer position. Ad Hoc Committees: The Chair shall appoint Members of any ad hoc committee. An ad hoc committee may have any number of Members. 9.5 Sub-Committees Authorized The Executive Committee shall establish such sub-committees as deemed necessary. 9.6 Quorum for Committee Meetings A quorum for a standing or ad hoc committee shall be three(3)Voting Members of the Board. 9.7 Committee Meetings Meetings of standing or ad hoc committees may be called by the General Manager or Secretary on the request of the Chair of the Board, Chair of a committee or any two Voting Members on the committee. 9.8 Committee Reports Each standing or ad hoc committee shall report its recommendation, if any, for consideration by the Board at a regular or Special Meeting. Upon adoption of a motion to accept(or approve) a committee report, the recommendation of the committee becomes the action of the Board; provided, however, if any resolutions are necessary to carry out the report, they shall be enacted separately pursuant to section 19.5. 9.9 Committee Resolutions Committee reports recommending action by the Board shall have incorporated in the report the necessary resolutions or motions to accomplish the action. 9.10 Discharge of Consideration A committee shall be discharged of any matter referred to it by an affirmative vote of two-thirds of the Board. 7 X. AGENDA FOR REGULAR MEETINGS 10.1 Order of Business 10.1.1 The order of business at any regular meeting of the Board shall be as follows: 1. Roll Call 2. Approval of Minutes 3. Public Comments on agenda items shall be limited to three (3) minutes unless waived at the discretion of the Chair 4. Communications 5. Committee Reports 6. General Manager's Recommendations 7. Unfinished Business 8. New Business 9. Resolutions 10. Manager's Remarks 11. Remarks by Members of the Board. 12. Motion of Excused Absence 13. Public Comments on BWL-related matters shall be limited to three (3) minutes unless waived at the discretion of the Chair 14. Adjournment 10.1.2 In the absence of any objection, the presiding officer shall have the discretion to vary the order of business. 10.1.3 Preparation of Agenda An agenda shall be prepared by the General Manager and made available for distribution three days preceding a regular or Special Meeting for informational purposes only. However,the agenda is subject to unilateral change by the General Manager before the meeting. 8 10.1.4 Changes to the A eg nda In the absence of any objection, the General Manager or any Voting Member of the Board may add or subtract an agenda item at a meeting. In the event of objection, an affirmative vote of the majority of the Voting Members of the Board shall be required to add or subtract an agenda item. 10.1.5 Public Comments The time limits of Section 10.1.1.3 apply to all Public Comments. Immediately following Approval of Minutes, the Chair will announce that members of the public are invited to address the Board regarding any item on the agenda. Anyone wishing to comment on any matter not on the agenda may do so immediately prior to adjournment. The Chair may exercise its discretion in prescribing how members of the public will seek recognition, or extending time limits for comments under the circumstances, or in limiting remarks to the subject matter under discussion as provided in 10.1.1.3. 10.1.6 Reports and Recommendations of Director and General Manager The Director and General Manager shall advise the Board by mail of Reports and Recommendations to be considered at each regular meeting. XI. AGENDA FOR COMMITTEE MEETINGS 11.1 Order of Business 11.1.1 The order of business at any committee meeting of the Board shall be as follows: 1. Roll Call 2. Public comment on agenda items shall be limited to three (3) minutes unless waived at the discretion of the chair 3. Agenda Topics 4. Other 5. Adjourn 11.1.2 A concurring vote of a majority of Voting Members on the committee present shall be necessary to move a recommendation to the Board. 9 XII. PUBLIC HEARINGS 12.1 The Board shall hold a public hearing at least thirty days before the effective date of any changes in rate structure. The Board shall comply with the requirements of Charter Section 5-205.2 for public hearings regarding changes in the rate structure. The Board may also choose to hold public hearing on other topics as necessary or appropriate. 12.2 Although the Board will generally hold its public hearings in the REO Depot, 1201 S. Washington Ave., Lansing, Michigan 48910, the Board may conduct public hearings at such places that it determines will best serve the public interest. 12.3 Notice of the hearing will be placed in at least one (1) newspaper of general circulation in the Lansing, Michigan area, no less than fourteen (14) days before the public hearing. The notice shall state the date, time, place and subject of the hearing. Notice shall also be posted electronically on the LBWL's website. 12.4 A quorum of the Board shall be necessary to conduct a public hearing. 12.5 No Member shall engage in ex parte conversations about the topic of the public hearing either before or after the hearing until the full Board takes action on the topic. 12.6 Public hearings shall be open to the public, in accordance with the Open Meetings Act. 12.7 Individuals and organizations are invited to comment on the topic of the public hearing, either orally or in writing. Written comments should be addressed to the Secretary and should be presented on or before the date of the hearing. Oral comments shall be presented at the public hearing. The Chair may set reasonable limits on the length of oral presentations. Comments or conduct that disrupt the orderly conduct of meetings or hearings shall not be permitted. 12.8 A transcript or recording of the hearing shall be made and kept for no less than three years. 12.9 Public Hearing on Rates: In the case of a rate hearing, the Board may hold a separate meeting or meetings after the rate hearing to discuss the proposed changes to the rate structure and vote on the proposed changes. If the Board's discussions after the rate hearing indicate that it intends to raise any customer's rate higher than proposed during the public hearing, the Board shall hold an additional public hearing on the proposed higher rate in accordance with this section before voting on the rates. The Board is not required to hold any additional hearings in order to approve a rate lower than the rate proposed at the public hearing. 12.10 If the Board acts on the topic discussed at the public hearing, it shall do so at a public meeting and shall approve a written resolution describing its action. 10 XIII. MEMBERS OF THE BOARD 13.1 Attendance Each Member of the Board shall attend all meetings of the Board in person unless otherwise excused. Each Member must attend at least fifty (50) percent of regular or Special Meetings of the Board and fifty(50)percent of assigned committee meetings during any fiscal year. Failure to do so may be grounds for removal by the City from the office as a Member of the Board. 13.2 Disqualification to Vote Any Voting Member of the Board having a direct or indirect financial interest in any matter before the Board, or who may stand to gain or lose financially or otherwise due to action of the Board on any matter, shall indicate such interest to the Board and may be disqualified from voting on such matter as set forth in the Lansing City Charter. 13.3 Ethics All Board Members are subject to Article 5, Chapter 5 of the Lansing City Charter(Ethics) and the Lansing Ethics ordinance. XIV. RECONSIDERATION OF ACTION Any Voting Member may move to reconsider a previous action of the Board. Such motion to reconsider shall be made not later than the next regular Board meeting. XV. MINUTES 15.1 Preparation and Filing The Secretary shall keep minutes of regular and Special Meetings of the Board and committees and shall file a copy of the Board minutes in the office of the City Clerk as a public record. No official action taken by the Board shall be valid or effective until a copy of the minutes of the meeting at which such action was taken is filed with the City Clerk. 15.2 Corrections Corrections in the regular or Special Meeting or committee minutes shall be made not later than the next meeting after the meeting to which the minutes refer. The corrected minutes shall show both the original entry and the correction. 15.3 Delivery to Members The Secretary shall provide each Member of the Board with a copy of the regular or Special Meeting minutes as soon as they are filed 11 with the City Clerk. Corrected minutes shall be available no later than the next subsequent meeting after correction. 15.4 Public Inspection Proposed minutes will be available for public inspection not more than eight(8) business days after the meeting to which the minutes refer. Approved minutes will be available for public inspection not later than five (5) business days after the meeting at which the minutes are approved. Copies of the minutes will be made available to the public at a reasonable estimated cost for printing or copying. (1976 Public Act 267). XVI. CONFIDENTIALITY 16.1 Communications Members of the Board shall treat all information marked"confidential"or "privileged" accordingly and shall not release such information to unauthorized individuals, unless disclosure is required by law. All such information shall be returned to the Secretary. 16.2 Closed Session All written and verbal information obtained and/or discussed in Closed Session shall be confidential and never discussed or shared outside of Closed Session, unless otherwise specified by law. XVII. CONTRACT LIMITATIONS The Board shall not have the power to make any contract with or give any official position to any person who is known to be in default to the City. XVIII. AMENDMENTS Any Voting Member of the Board may initiate amendments to the Rules of Administrative Procedure by presenting them in writing at any regular meeting. All Members of the Board must be notified of such amendments mailed at least four (4) days before the amendment is to be voted upon. An affirmative a majority of Voting Members serving shall be required to amend the rules of procedure, after which the proposed revisions shall be forwarded to the City in compliance with Charter Section 5-105.8. XIX. MISCELLANEOUS 19.1 Parliamentary Procedure All questions of procedure not covered by these rules or the City Charter of the City of Lansing shall be governed by the provisions in "Robert's Rules of Order." 12 19.2 News Media Regulations 19.2.1 Members of the news media shall be provided with a table in the Board Room for their use. They shall have made available to them, upon request, a copy of the General Manager's Recommendations and any data accompanying the recommendations not marked "Confidential"at 10:00 a.m. one working day prior to the date of the meeting. 19.2.2 Following the adjournment of a Board meeting, members of the news media may request interviews of Members of the Board. 19.2.3 All policy statements shall be made on behalf of the Board by the Chair. See 4.3. 19.3 Vacancy Resignation Absence of Elected Officers 19.3.1 In the event the office of Chair shall become vacant by death, resignation or otherwise, the Vice Chair shall assume the office of Chair, and the most immediate Past Chair shall assume the office of Vice Chair. 19.3.2 In the absence of the Chair, Vice Chair and Past Chair, a Temporary Chair shall be elected, who would hold office during the session, until the return or election of the Chair, Vice Chair or Past Chair. 19.4 Freedom of Information It shall be the policy of this Board to follow the provisions of Public Act 442, 1976, as it may be amended by legislative enactment or judicial decision. 19.5 Resolutions Any Voting Member of the Board may sponsor a resolution. Any resolution may be co-sponsored by other Voting Members of the Board. A resolution must be submitted for placement on the Agenda as specified under Article X -Agenda. The sponsor of a resolution may withdraw the resolution at any time prior to enactment. Consent of the co-sponsors to withdrawal is not required. 19.6 Hiring Consultants The Board of Commissioners may hire external consultants, such as accountants, but not outside legal counsel. The full Board will meet before a consultant is hired to determine the scope of the issues to be addressed by the consultant, the consultant's budget, and the scope of contact with the Board. One Board Member may be authorized as the primary contact with the consultant. If time constraints preclude a meeting of the full Board to discuss hiring the 13 consultant, the Executive Committee may meet to approve the initial contact with the consultant, but may not authorize an expenditure of more than$1,000 to a consultant without the approval of the full Board. The consultant's.work product shall be written and shall be immediately transmitted to all Board Members upon completion of the requested work. All payments to consultants hired by the Board shall be deducted from the Board's budget. Board funds may not be expended to address an issue only applicable to one Member. All outside legal counsel must be hired by in-house counsel and in accordance with the Charter. 19.7 Reimbursement of Board Member Expenses 19.7.1 Board Member Travel Expenses: The Board recognizes the value of membership and attendance at conferences, workshops, and meetings at the state, regional, and national levels that are appropriate and necessary to carry out Board of Water and Light business. As such, the Board encourages: 1. The attendance of its Members in at least one out- of-state and one in-state conference seminar per year. 2. Each newly appointed Member of the Board is encouraged to attend a formal workshop on governance as offered by the American Public Power Association. Additional travel must be pre-approved by the Executive Committee. Travel expenses shall be reimbursed in accordance with the Board's Travel Expense Policy. 19.7.2 Board Member Miscellaneous Expenses: Members of the Board may incur additional business expenses while representing the Board of Water and Light in the community. Business expenses such as cell phone, business luncheons, and parking are such examples of legitimate business expenses. Upon filing a claim in the prescribed form, each Member of the Board shall be reimbursed for reasonable and necessary expenses incurred in the discharge of the Board Member's official duties, in accordance with the Board's Expense Reimbursement Policy. The Executive Committee shall review Member expenses on a quarterly basis. 19.8 Definitions As used herein, the following terms mean: 14 Member: Any member of the Board, including Voting Members and Non- voting Members. Voting Member: Any Member of the Board appointed pursuant to Lansing City Charter Section 5-103.2 Non-voting Member: Any Member of the Board appointed pursuant to Lansing City Charter Section 5-103.12. Adopted by the Board 5/8/79, and amended 8/14/79, 11/14/79, 3/11/80, 11/11/80, 7/14/81, 8/11/81, 7/13/82, 7/26/83, 6/26/84, 3/5/85, 12/18/90, 1/5/91, 3/3/08, and 5/26/15. 15 15