HomeMy WebLinkAbout1996 Minutes BWL MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,January 23, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Christian,Evans,Hassler,Lontz, O'Leary, Pratt,Royal, Strolle-8
Absent: None
The Secretary declared a quorum present.
The Invocation was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER STROLLE --
SECONDED BY COMMISSIONER EVANS
That minutes of regular rescheduled session of December 19, 1995,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
Charles(Chuck)J. Clark. Partner, Ottawa Park Associates, Developers(OPAD), made his intention
known that he wishes to speak on the Ottawa Station redevelopment project when this item comes up for
discussion on the agenda.
Charles E. Rathbun, 515 Jason Court. Lansing,told the Board that Lansing's fluoridated water is
endangering his health. He indicated that he has no objections with the taste of the water;but said that
the fluoride in the water offsets the effect of his medications. Mr. Rathbun related to spots that appear on
his skin from drinking fluoridated water and eating food cooked in the water.
This matter was referred to Administration and Water Utility Director. Clyde Dugan, who met with Mr.
Rathbun immediately after the Board meeting to discuss his concerns on fluoridation.
Page 2 Board Meeting Minutes
January 23, 1996
COMMUNICATIONS
No communications received.
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on January 9, 1996, to receive update presentations on the following
matters:
1. General Motors Steam Contract
2. Electric Competition
3. Suggestion Program
4. Extension of Tree Trimming Services Contract
Present were Commissioners Christian,Evans, Hassler, O'Leary,Pratt,Royal,and Strolle. Excused
Absence: Commissioner Lontz(business commitment in Gaylord).
General Motors Steam Contract. The status of the General Motors(GM)and BWL steam contract
issues being negotiated was presented by Steam Utility Director Joette Woodard-Yank. She reported that
since GM's Small Car Group is interested in entering into contracts for all three BWL utility services,
common contract provisions are being developed. Provisions agreed to in concept were reviewed along
with major considerations still under discussion. A deadline of January 19 has been established for
developing draft language for the common contract provisions. An overview of the Steam Service
Contract with General Motors will be presented at the Committee of the Whole meeting on February 11
1996, for final Board consideration at the regular meeting of February 27, 1996.
Electric Competition. Electric System Control Director Bill Cook and Treasurer/Controller Dana
Tousley presented an update on the progress of strategies developed to meet and beat the competition in
the electric utility industry. Issues identified by the Electric Competition Task Force were first presented
to the Commissioners at a Committee of the Whole meeting held February 28, 1995. Mr. Cook outlined
the recommendations presented by the task force and reviewed staff activities and accomplishments to
date. Mr. Tousley reviewed a proposed timeline for electric and steam rate changes, if any are required.
New Suggestion Program. A proposed employee reward and recognition system called Visible
Improvement Program(VIP)was highlighted by Corporate Planning Director Roger Ophaug and
Manager of Total Quality Program 011ie Kingsbury. The VIP would replace the current suggestion
program and is designed to work in conjunction with the Total Quality Improvement(TQI)process and
increase the number of improvement solutions contributed by BWL employees. The VIP contains
streamlined processes to ensure timely review of suggestions.encourages participation from all employees,
and strives to involve employees in solution implementations. The VIP would be monitored by an
oversight committee.comprised of management and union members, to assure the program Is success.
Following discussion. the Board authorized staff to convene a special conference with Bargaining Unit
representatives to discuss the proposed program. Subject to union concurrence,a resolution authorizing
implementation of the VIP will be included in the General Manager's Recommendations for Board
consideration at the regular meeting of January 23, 1996. Staff will evaluate the performance of the VIP
after it has been in effect for one year, and will report the results to the Board.
Board Meeting Minutes Page 3
January 23, 1996
Extension of Tree Trimming Contract. Electric Transmission&Distribution Director Dave Emmons
presented the results of a BWL team assigned to evaluate tree trimming services provided by Nelson Tree
Service. Inc. Nelson's contract with the BWL is due to expire February 29, 1996. The team concluded
that it would be in the BWL's best business decision to retain Nelson Tree Service,with no price increase
over 1995 pricing, and guaranteed three-year price protection. Mr. Emmons reported that historically
there has been fairly strong competition for the tree trimming contract, and the decision to extend the-
contract vs. using a competitive bid process was fully evaluated by the team. Nelson Tree Service was
chosen three years ago through a competitive bid process because they scored high on the evaluation with
no high risk threats. Stalling and equipment were the highest weighted selection criteria. A benefit of
contract extension in this circumstance is continuity of performance and program quality.
The Commissioners discussed the advantages and disadvantages of retaining a supplier when quality,
service, relationship and pricing are right for both parties. Following discussion, there appeared to be a
consensus to award a contract extension to Nelson Tree Service,Inc. The General Manager's
Recommendations will include a resolution to extend the contract with Nelson Tree Service, Inc. for three
years for Board consideration at the regular meeting of January 23, 1996.
The topics presented at the Committee of the Whole meeting were informational items only, and no action
was taken.
Respectfully submitted,
Dave O'Leary, Chair Pro Tern
CONUvUTTEE OF THE WHOLE
BY COMMISSIONER O'LEARY—
SECONDED BY COMMISSIONER EVANS
That the Committee of the Whole Report be received as presented.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No.96-1-1
That the Board retain the services of Energy Services Group,Inc., (ESG)to assist the
Board of Water and Light(BWL)with fuels procurement related matters. More
specifically, ESG will be assisting with the economic analysis associated with the
acquisition of private rail car equipment and a market analysis of future fuel
opportunities to maximize BWL's competitive position,and any other fuel supply related
matters that may arise on an as-needed, as-required basis.
Page 4 Board Meeting Minutes
January 23, 1996
The recommendation of utilizing the services of Energy Services Group, Inc., is based
on a sole source bid. ESG assisted the BWL in its most recent coal and transportation
contract negotiations and has a very thorough understanding of BWL operations. This
use of ESG's services will cover the period from January 1 to December 31. 1996 and
will be paid at an hourly rate of$135 with a total estimated cost of$15,000(exclusive of
travel and lodging).
Res. No.96-1-2
That the Board approve a lease agreement with Arkansas Power&Light c/o ENTERGY
Services, Inc., of Beaumont,Texas for the lease of rail cars to be used in the transport of
coal, subject to approval as to form by the BWL's legal counsel. The lease agreement
particulars are as follows:
1. The term of this agreement will be thirty-six(36)months.
2. ENTERGY Services, Inc., will provide eighty-three(83)used rotary
dump gondola rail cars.
3. The lease rate will be$340.00 per car/month(full service-inclusive of
all normal maintenance expenses).
By entering into this lease agreement with ENTERGY Services, Inc., the BWL will be
able to guarantee car supply for a portion of its annual needs. The rail cars will be
utilized in dedicated service to Erickson Station. The CSX Transportation and CN
North America railroads have given the BWL a transportation rate reduction incentive
of$1.70 per ton for the use of private(non-railroad owned or leased)rail cars. The
lease rate equated to a per ton amount is projected to be between$1.19 -$1.30. This
lease agreement is projected to yield an annual transportation savings between$103,950
and$144,075.
The ENTERGY Services,Inc.Proposal is the best evaluated proposal when considering
the lease rate, rail car carrying capacity, and overall rail car condition. Other proposals
were received from: RAILCAR LTD.,Helm Financial Corporation,RESIDCO,
InterRail, Inc., David J. Joseph Co., G.E. Capital, and Greenbrier.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolutions 96-1-1 and 96-1-2 be approved as submitted.
Adopted unanimously.
Board Meeting Minutes Page 5
7anuary 23, 1996
CORPORATE PLANNING
Res. No. 96-1-3
It is recommended that:
1. The present Suggestion Plan which was effective September 1. 1987 be
phased out as soon as all existing suggestions submitted under the Plan
have been evaluated or resolved.
2. A Visible Improvement Program(VIP)be approved and implemented as of
March 1. 1996 to replace the present Suggestion Plan.
3. The General Manager be authorized to Administer the Visible Improvement
Plan.
The Board of Water and Light has had a suggestion program since 1965 to encourage
employees to suggest improvement opportunities. Employee participation is decreasing
and the process needs to be streamlined.
The VIP is designed to enhance,grow and build on the present suggestion plan. In
addition to encouraging employees to submit improvement ideas,the VIP contains a
streamlined review process and involves the employee in the implementation of the
suggested improvement.
Under VIP, employees will receive points for improvement ideas upon implementation
of the idea. The points can be accumulated and redeemed for gift certificates which can
be used to purchase merchandise. The present Suggestion Plan has cash awards paid
upon approval of the suggestion rather than on implementation. Under the present
Suggestion Plan, awards are subject to tares being withheld, reducing the amount of the
award. Under the VIP plan, the taxes would be paid by the Board of Water and Light.
To encourage employees to submit ideas for improvement, a bonus merchandise award
will be given to an employee for the employee's first implemented idea each year. This
is new and would be in addition to calculated award for the idea.
Employees who have submitted suggestions under the existing Suggestion Plan which
have not been evaluated prior to implementation of VIP will be given the opportunity to
have them evaluated under that plan or they can resubmit the suggestion under the VIP.
VIP also supports the Total Quality Improvement(TQI)Program and one of the
objectives to bring employee involvement programs under one umbrella. The VIP can
be used to recognize and reward TQI teams and in conjunction with other employee
involvement programs.
A Special Conference was held with representatives of the Bargaining Unit and
concurrence for replacing the present Suggestion Plan with the Visible Improvement
Program was obtained.
In accordance with the TQI principles,the performance of the VIP will be monitored
during the year and the results reported to the Board of Commissioners after it has been
in effect for one year.
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Page 6 Board Meeting Minutes
January 23, 1996
General Manager Pandy distributed a memo from Corporate Planning Director Roger Ophaug, dated
January 23. 1995, relative to a lease with New Tower Inc. The Board was advised on February 28, 1995,
of New Tower's interest to install a radio tower on the Riverside Sludge Pond area. Mr. Pandy noted that
the property covered by the Lease Agreement is a portion of two separate parcels purchased for Water
Utility purposes. Both parcels were purchased with BWL funds--the first parcel in 1923 for$3,000 and
the second parcel in 1939 for$6.700.
There being no objections. the following recommendation was added to the General Manager's
Recommendations for Board consideration:
CORPORATE PLANNING-(Addendum)
Res. No.96-1-10
RE: Authorization to Lease Real Property
OWNER: Board of Water and Light
LEASE TO: New Tower, Inc.,Lansing,Michigan
GENERAL DESCRIPTION: Aurelius Road Sludge Ponds
ADDRESS/LOCATION: 2000 E. Main Street, Lansing
TERM: Twenty(20)Years with Automatic Renewal for 20 year increments unless
canceled by New Tower, Inc. with one year written notice.
TYPE OF TRANSACTION: Lease of Excess/Surplus Property.
CONSIDERATION: Annual Rental Fee of$1 500 00 increasing by$100 00 per year on each of first
five anniversaries and increasing each year thereafter by percentage of annual increase in CPI(All Cities).
BWL to have space and access on Tower for paging equipment.
Legal Description:
That part of Outlot C of Leslie Park Subdivision, City of Lansing, Ingham County,
Michigan as recorded in Liber 4 of Plats Page 2, Ingham County Records described as:
Beginning at a point on the North line of Grand Trunk Western Railroad N890 29'00"E
757.09 feet from the Southwest corner of Lot 38 of Avis Subdivision, as recorded in
Liber 9 of Plats.Page 30, Ingham County Records; thence N00°31'00"W 500.00 feet;
thence N890 59'5711E 453.09 feet to a point on the Westerly bank of the Red Cedar
River, thence along the intermediate traverse line the following two courses: S040 11,
55"W 170.33 feet and S050 16' 30"W 327.84 feet to said North line and the end of said
intermediate traverse line. thence S890 29'00"W along said North line 405.99 feet to
the point of beginning; said parcel containing 4.92 acres more or less; said parcel
subject to all easements and restrictions, if any.
The described property is in the flood plain area of the Red Cedar River and is not suitable for any known
or anticipated future utility use. It is therefore excess/surplus property available for lease to New Tower
for installation of a radio tower, associated building and ground grid.
Board Meeting Minutes Page 7
January 23, 1996
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolutions 96-1-3 and 96-1-10 be approved as submitted.
Adopted unanimously. -
TECHNICAL SERVICES DIVISION
Res. No. 96-1-4
It is recommended that three(3)year agreements for general construction and erection
services be awarded to:
1. Christman Constructors, Inc., Lansing,Michigan
2. Clark Construction Company,Lansing,Michigan
3. Moore Trosper Construction, Inc.,Holt,Michigan
Other bidders were: Granger Construction Company declined to bid;Haussman
Construction Company and Kares Construction Company, Inc. did not submit proposals.
The decision to contract for construction and erection services is based on reducing the
time and costs to prepare formal specifications and contracts for small capital or
maintenance projects.
These Contractors will be utilized on an as-needed basis. A scope of work, detailed
specifications and drawings will be provided to the Contractors to enable them to
provide pricing for the work. The Contractors will be requested to quote on a "firm-
lump-sum cost not-to-exceed"basis; or depending upon the scope, the project costs may
be based on previously agreed to labor and material rates and mark-ups.
The utilization of these Contractors will be approved by the General Manager,Division
Directors or Department Managers.based on delegated purchasing authority.
Res. No. 96-1-5
It is recommended that three(3)year agreements for electrical construction and erection
services be awarded to:
1. Hatzel&Buehler, Inc.. Ann Arbor,Michigan
2. F. D. Hayes Electric Company, Inc..Lansing,Michigan
3. Lansing Electric Motors. Inc.,Lansing,Michigan
Other bidders were: Superior Electric of Lansing, Inc. Newkirk Electric Associates Inc.
declined to bid. C&L Electric, Inc.,Lutz Electric Construction Co., and Quality
Electric, Inc. did not submit proposals.
Page 8 Board Meeting Minutes
January 23, 1996
The decision to contract for construction and erection services is based on reducing the
time and costs to prepare formal specifications and contracts for small capital or
maintenance projects.
These Contractors will be utilized on an as-needed basis. A scope of work,detailed
specifications and drawings will be provided to the Contractors to enable them to
provide pricing for the work. The Contractors will be requested to quote on a"firm-
lump-sum cost not-to-exceed"basis; or depending upon the scope,the project costs may
be based on previously agreed to labor and material rates and mark-ups.
The utilization of these Contractors will be approved by the General Manager,Division
Directors or Department Managers,based on delegated purchasing authority.
Res. No.96-1-6
It is recommended that three(3)year agreements for mechanical construction and
erection services be awarded to:
1. Davy Songer,Incorporated,Romulus, Michigan
2. Northern Boiler Mechanical Contractors.Muskegon, Michigan
3. Monarch Welding&Engineering, Inc..Hazel Park,Michigan
Other bidders were: Goyette Mechanical Company, T. H. Eifert, Inc., John E. Green
Company, and William E. Walter. Inc. Detroit Boiler Company, Fisher&Wright, Inc.,
and Shaw Winkler, Inc.,did not submit proposals.
The decision to contract for construction and erection services is based on reducing the
time and costs to prepare formal specifications and contracts for small capital or
maintenance projects.
These Contractors will be utilized on an as-needed basis. A scope of work,detailed
specifications and drawings will be provided to the Contractors to enable them to
provide pricing for the work. The Contractors will be requested to quote on a"firm-
lump-sum cost not-to-exceed"basis;or depending upon the scope,the project costs may
be based on previously agreed to labor and material rates and mark-ups.
The utilization of these Contractors will be approved by the General Manager,Division
Directors or Department Managers, based on delegated purchasing authority.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolutions 96-1-4. 96-1-5, and 96-1-6 be approved as submitted.
Adopted unanimously.
Board Meeting Minutes Page 9
January 23, 1996
TREASURER/CONTROLLER
Res. No. 96-1-7-NO ACTION-REFERRED BACK TO STAFF FOR REVIEW.
RESOLVED, that the present car allowance reimbursement rates effective December 1,
1992. applicable to BWL employees required to provide personal transportation in
performing their respective job assignments, be amended effective January 1, 1996-as
follows:
That the per mile reimbursement rate for both Plan A and Plan C be set at the Standard
Business Mileage Rate announced annually by the IRS;as of December 31, 1995 this
rate is 30 cents per mile(IRS will revise for 1996 when Budget impasse resolved).
Plan A-Standard Business Mileage Rate for all miles driven.
Plan C -Minimum monthly allowance based on 200 miles and all miles
driven above 200 at the Standard Business Mileage Rate. ($60.00/month
plus 30 cents per mile above 200 miles).
Further. that all other procedures under the plans as adopted July 1980 and amended
July 1985. remain in effect, except the provision that car allowance plans be reviewed
annually. The Standard Business Mileage Rate is adjusted annually by the IRS, thus the
survey of corporate practices will be performed only every three years, and BWL car
allowance plans will be revised as conditions warrant.
The above revisions will result in an estimated net annual savings of$21,717.
A review of BWL car allowance plans and the annual survey of car allowance rates and
practices of other utilities and Lansing area firms reveals the following: Estimated cost
of owning and operating an automobile in the Lansing area is 31.9 cents per mile(6.5
cents variable and 25.4 cents fixed). This is a 3.9%increase since October 1992.
Surveyed entities reimburse at 21 to 30 cents per mile. Majority surveyed tie their
mileage reimbursement rate to the Standard Business Mileage Rate established annually
by the IRS. IRS adjusts annually for inflation. No other entity surveyed maintains a
fixed monthly reimbursement rate(BWL current Plan Q. BWL Plan C average
reimbursement was 56.0 cents per mile. During FY 1995. BWL paid$111,768 for auto
mileage reimbursement.
Chairman Hassler announced that staff has requested to have this item pulled from the agenda for further
review and discussion. There being no objections,Resolution 96-1-7 was referred back to staff.
Res. No.96-1-8
Authorize a three year contract extension for Trimming of Trees and Related Work
along Electric Lines Owned and Maintained by the Board of Water and Light to Nelson
Tree Service. Inc., Dayton,Ohio, from March 1. 1996 to February 29, 1999. Pricing is
firm for the contract period and is based on the projected work hours of a four crew
operation. Actual hours worked may vary. Based on the projected level of services,the
estimated annual costs are: Year One, $554,756.80: Year Two. $554.756.80 and Year
Three, $554,756.80. The estimated three-year total is$1,664,270.40.
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Page 10 Board Meeting Minutes
January 23, 1996
The award of the contract extension is based on a team evaluation process that identified
retaining Nelson Tree Service. Inc., with no price increase over 1995 pricing, and
guaranteed three-year price protection, as the best business decision for BWL tree
trimming services. Nelson Tree Service. Inc.,was the best evaluated contractor based
on a competitive bid evaluation when they were awarded the tree trimming contract in
1993. A competitive bid process will be made at the end of the contract for future
selection of a supplier for tree trimming.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-1-8 be approved as submitted.
Adopted unanimously.
WATER
Res. No. 96-1-9
That Board of Water and Light charge for 6 inch and 8 inch watermain installations be
changed to$21.25 per foot,effective January 1, 1996. This is a 3.7%increase over the
current charge.
That Board of Water and Light charges for public fire-hydrant installations on mains 12
inches and smaller be changed to$1,750 per hydrant,effective January 1, 1996. This is
a 7.7%increase over the current charge.
-----------------
The watermain and hydrant installation charges are based on the three previous years of
BWL average costs for that type of work. trended to July 1, 1996, the middle of next
year's construction season.
The above trending factors were obtained by using indices from the Handy Whitman
Index, a well-recognized publication of trends in public construction.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-1-9 be approved as submitted.
Adopted unanimously.
Board Meeting Minutes Page 11
January 23, 1996
GENERAL MANAGER'S REMARKS
General Manager Pandy briefed the Commissioners on the following items:
Financial Reports. A copy of BWL's Budget Variance Analysis through December, 1995,was
distributed for review. The report shows unit sales for Water at 1.5%above budget,Electric unit sales at
8.7%above budget,and Steam unit sales at-1.4%below budget. Mr. Pandy noted that when Steam sales
for December and January are factored in, due to the cold weather experienced, Steam sales should return
to the budget level. In total, Gross Revenues are 7.8%above budget and total Expenses are-2.3%below
budget. He further noted that the BWL is closer to targeted rates of return for the Water and Electric
Utilities, however,the Steam Utility is still lagging. The Board will receive an update report on the
proposed Steam Service Contract with General Motors at the Committee of the Whole meeting scheduled
for February 13.
Mr. Pandy reported that Consolidated Financial Statements through December, 1995, indicate the BWL's
employee count is at 767 permanent employees,which is identical to the same time period last year.
Ottawa Station Site Reclamation Grant Application. A letter from the State of Michigan's Department
of Environmental Quality(DEQ),dated January 12, 1996, regarding a Site Reclamation Grant
Application was distributed. Mr. Pandy reported that the DEQ has exhibited a cooperative attitude by
trying to assist the BWL with the environmental aspects of the Ottawa Station redevelopment project. He
explained that an application for site assessment funds would be submitted to the DEQ by the City of
Lansing as the eligible entity. The City's Public Service Department is cooperating with the BWL by
trying to obtain grant funding to assist with site reclamation costs.
Ottawa Station Redevelopment Project Update. Mr.Pandy reported that the Oldsmobile Vision Center
is closer to making a decision on relocating the Vision Center in the Ottawa Station. He referred to an
article in the LANSING STATE JOURNAL, dated January 20, 1996,which reports on Mayor Hollister's
optimism that discussions with Oldsmobile will lead to an announcement within 30 days that the Vision
Center will relocate its facility from Troy,Michigan, to the Ottawa Station.
A letter from Sparrow Health System,dated January 16, 1996, was handed out advising that their market
and financial feasibility study of the proposed fitness center in the Ottawa Station renovation project is
expected to be completed by mid-February.
A letter from Ottawa Park Associates,Developers(OPAD), dated January 22, 1996,was handed out
requesting a deadline extension until the next scheduled Board meeting on February 27th for submission
of a tenant list for the Ottawa Station development project.
Chuck Clark told the Commissioners that OPAD has made steady progress with their tenant group,but
that additional time would be needed for Oldsmobile and Sparrow to complete their ongoing evaluation on
the cost and feasibility of leasing space in the Ottawa Station. He reiterated that Oldsmobile and Sparrow
Hospital are showing strong interest in the Ottawa development.
Commissioner Christian asked Mr. Clark that if the Board authorizes an extension to February 27, 1996,
whether the additional 30 days was a realistic deadline.
Mr. Clark responded that he felt the February 27 date was a realistic time frame to submit written
commitments from the major tenants.. He said that OPAD plans to meet with the tenant group and
HN f B Architects in February to finalize space requirements. He noted that drawings with specific square
footage plans would not be produced in time for the February 27th meeting.
Page 12 Board Meeting Minutes
January 23, 1996
Commissioner Evans asked if"Plan B"discussions would be appropriate at this time.
Mr. Clark stated that the potential major tenants are likewise anxious to make their decision as quickly as
possible. He added that there is nothing to be gained by extending the process.
Commissioner Lontz expressed concern with granting a second extension because a contingency Plan B is
not in place. He noted that if granting the extension is the consensus of the Board he would go along with
it.
Chairman Hassler suggested discussing this matter further at the Committee of the Whole meeting
scheduled on February 13th, and the Commissioners concurred. General Manager Pandy reminded the
Commissioners of Thomas J. Coates' letter to the Board,dated October 16, 1995, stating that as the
runner-up firm they would be willing to come back to discuss the redevelopment project in the event
OPAD is unable to satisfy requirements specified by the Board's resolution. Mr.Pandy stated that he also
shares Mayor Hollister's optimism on Oldsmobile's Vision Center becoming a major tenant in the Ottawa
Station.
Following discussion, the Board agreed to grant Ottawa Park Associates, Developers(OPAD)a deadline
extension to February 27th. By that time the potential tenants are expected to commit in writing and
OPAD is to present its plans to the Board.
U.S.Water Prices. A copy of a memo from Water Utility Director Clyde Dugan,dated January 18,
1996,was handed out which reports on U. S. water prices for industrial users. Statistics comparing BWL
water rates are based on 220,200 gallons(294.4 CCF)per month, with a 2 inch meter,as of July 1, 1995.
Mr. Pandy reported that BWL water rates compare favorably nationally($385.12/mo. or 7.6%above the
U.S. average of$357.88/mo.)and especially in our region(Region V at$383.29/mo. or 7.1%over the
national average). Mr. Pandy noted that when you consider that only 21%of utilities soften the water,
which is a major cost component, the BWL ranked especially well. Data based on U.S. water prices was
taken from the January 1996 issue of WATER WORLD.
Electric Competition. A handout was distributed regarding Governor Engler's outline for moving
Michigan's electric industry into a more competitive type of model. Mr. Pandy stated that the outline has
many points the BWL is concerned about. He said that it seems to be patterned after proposals made by
Consumers Power Co. and Detroit Edison Co. Staff is working with the BWL's lobbyist,Kheder&
Associates, in finalizing a draft position paper. Mr. Pandy referred to the January 15, 1996, issue of
ELECTRIC UTILITY WEEK, which reports on deregulation and electric competition issues. He noted that
these items will be discussed at the Committee of the Whole meeting scheduled for February 13th.
Lawsuit Against the City of Lansing Filed by a Former BWL Employee. General Manager Pandy
reported that a lawsuit was filed by former BWL employee. James Harken,against the City of Lansing
naming various city officials as defendants. He noted that the officers of the Board and some BWL
employees are named in the complaint,although the BWL is not a party in the lawsuit. The
Commissioners were briefed regarding the complaint.
General Manager Pandy to Travel to China. Mr.Pandy reported that he plans to travel to San Ming,
China, from January 24-29, 1996,on a goodwill mission. The purpose of the trip is to establish trade and
Sister City relations with San Ming. Since the trip does not relate to BWL business,there will be no
expenses for the BWL. Technical Services Director John Elashkar will be in charge in Mr.Pandy's
absence.
Board Meeting Minutes Page 13
January 23, 1996
BWL Recognized by the U. S. Marine Corps. A certificate was received from the U. S. Marine Corps
recognizing the BWL's outstanding support to the Toys for Tots campaign. Mr. Pandy noted that this is
particularly an effort of the BWL's Community Events Committee.
Southern Engineering International. Representatives from Southern Engineering International of
Atlanta, Georgia, met with BWL Electric Utility staff last week to discuss potential market possibilities.
General Manager Pandy stated that Southern Engineering International continues to consider the Midwest
as a feasible region to build a utility plant. He noted that the BWL may be able to develop a business
relationship with them,as they appear interested in Michigan as a potential market for power pool
resources.
Input Received on Integrated Resource Plan. The Integrated Resource Plan Citizen's Advisory
Committee,consisting of 12 citizens involved in identifying values important to the community as the
BWL develops its plan to meet future electric and steam needs,held its third meeting to wrap up
discussions. A report on the advisory committee's input is being finalized.
REMARKS BY COMMISSIONERS
Commissioner Strolle greeted Councilmember Harold Leeman,who was in the audience,and officially
welcomed him as a new City Council Member.
Commissioner Lontz congratulated Steam Utility Director Joette Woodard-Yauk for her excellent article
on chlorofluorocarbons.which appeared in a publication entitled.District Energy, Vol. 81, Number 1,
Third Quarter. 1995.
Commissioner O'Leary remarked that he has received many nice comments on the BWL's publication of
its first-ever BWL Owner's Manual. He congratulated staff for an excellent communication piece and
wide distribution as an insert in the LANSING STATE JOURNAL. Communications Director John Strickler
and Public Information Analyst Nancy Tarras were acknowledged for their efforts in producing the
handbook.
ADJOURNMENT
On motion of Commissioner Royal, the Board adjourned at 6:10 p.m.
A - L".
Mary E. So�retary
Filed: January 26, 1996
Marilynn Slade. City Clerk
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Board of Water and Light, Lansing,Michigan
Original Sheet No.EB12-1
LARGE CAPACITY ELECTRIC SERVICE
RATE NO. 8
Multiple Delivery Point Aggregation -The 15-minute period demands of multiple delivery points of a
customer shall be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW; and
(b)the total On-Peak Billing Demand shall not be less than 25,000 kW. Aggregation shall be applicable for
determination of the On-Peak Billing Demand only. All other charges,including the Basic Service Charge and
Maximum Demand, shall apply to each delivery point independently.
Meterine-When the BWL elects to measure the service on the secondary side of the transformers,the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation,consumption as
registered by the different meter installations will not be combined for billing purposes, but will be billed and
computed separately except as provided for Multiple Delivery Point Totalization.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No. EB13
OUTDOOR LIGHTING SERVICE
RATE NO. 9
Availability-This rate is available to any customer located«ithin the Board of Water and Light(BWL)
service area for dusk to dawn lighting of customer's premises. All lights will be furnished and maintained by
the BWL and will be installed so as to overhang private property from existing or new poles set at points
accessible to BWL constniction and maintenance equipment. This rate is not available for purposes of street,
highway, or public thoroughfare lighting.
Monthly Rate- Shall be computed in accordance with the following charges.
Luminaries on Overhead Mast Arm on existing BWL poles
High Pressure Sodium
100 W $ 8.15
250 W $13.75
400 W $14.70
Mercury Vapor'
175 W $ 8.55
400 W $14.70
Floodlighting Luminaire on Bracket Ann on existing BWL poles
High Pressure Sodium
100 W $11.65
250 W $14.60
400 W $17.10
In the event additional facilities or rearrangement of existing facilities are required, the BWL shall install,
operate and maintain such facilities for the following monthly charges.
Type of Facilities
35-foot wood poles including span of overhead secondary extension $4.75 per pole
37-foot concrete pole including span of overhead secondary extension $11.30 per pole
Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of est. cost
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations -Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
1 Rates apply to existing luminaires only and are not open to new business.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No. EB14
OUTDOOR LIGHTING SERVICE
RATE NO. 9
Service Contract-A written service agreement shall be entered into to take BWL service for a term of years
determined as follows:
(a) One year, if additional facilities are not required, or
(b) Three years, if additional facilities are required
(c) Five years, if monthly charges calculated at 1.67%of estimated cost,
(d) Ten years, if special contractual arrangements are made.
In the event the customer discontinues service before the end of the agreement term, the established rate for the
remaining portion of the agreement shall immediately become due and payable. The BWL will replace lamps
or make repairs as soon as practicable after the customer has reported that the installation requires servicing.
Such replacements and repairs will be made during regular working hours. The BWL may refuse or restrict the
service provided in this rate to seasonal type customers and/or may require such customers to pay for the service
annually in advance where the permanency of the customer is doubtful or has not been demonstrated by the
customer. If relocation, including adjustment, of the outdoor protective light or relocation of other facilities
used in connection«ith the light is desired by the customer during the term of the contract, the BWL will
provide this service, if feasible, at the customer's expense.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
Original Sheet No.EB14-1
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Availabilitv-This rate is available to any customer desiring primary voltage sendce under the following
conditions: (a)the electrical requirements are supplied at one point of delivery through one metering
installation(except as provided below for Multiple Delivery Point Aggregation); (b)the Maximum Demand is
1,000 kW or more; (c)heat derived from electricity is an integral part of the customer's manufacturing process;
(c)such process heating equipment has a total connected load of 1,000 kW or more, and accounts for at least
50%of total kWh consumption; (e)all, or a portion of, the process heating load, not less than 1,000 kW, is
curtailable;and(f)the customer agrees to a service contract with the BWL for the customer's full electrical
service requirements,including provisions for load curtailment,for a period of not less than ten(10)years.
This rate is not available for standby or emergency service.
Nature of Service-Alternating current, 60 hertz, three phase. The primary voltage to be determined by the
Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per customer per month or pan thereof
Capacity Charge $50.00 per kW for all Curtailment Period Demand in excess of
Firm Capacity
Energy Charge $0.0740 per kWh for the first 100 hours use of Maximum Demand,
plus
$0.0350 per kWh for the excess kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The minimum charge shall be the sum of(a) the Basic Service Charge, (b)the amount of$2.00 times the
Maximum Demand,and(c) the amount of$6.90 times the Firm Capacity.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees, franchise fees,or any other charges against the Board's property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
Firm Capacity: A specified capacity(in hundreds of kW)as set forth in the electric service
agreement with the BWL sufficient to meet the customer's requirements for non-curtailable service at
any time.
Curtailment Period Demand: The kW supplied during the 15-minute period of maximum use
during any period of curtailment as defined by the electric service agreement with the BWL.
Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period
of maximum use during the month but not less than 60%of the highest Maximum Demand in the
preceding eleven(11) months, and not less than 1,000 kW.
Adopted: Proposed Effective: January 1. 1997
Board of Water and Light,Lansing, Michigan
Original Sheet No. EB14-2
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Multiple Dclivery Point Aggregation -The 15-minute period demands of multiple delivery points of a
customer may be summed for determination of the total Curtailment Period Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; and(b)the total
Maximum Demand shall not be less than 4,000 kW. Aggregation shall be applicable for determination of the
Curtailment Period Demand and related charges only. All other charges, including the Basic Service Charge,
shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers, the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for Multiple Delivery Point Totalization.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming,controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1. 1997
Board of Water and Light, Lansing,Michigan
1st Revised Sheet No. EB15
TRAFFIC LIGHT SERVICE
RATE NO. 11
Availabilitv-This rate is available to any political subdivision or agency of the State of Michigan located
within the Board of Water and Light(BWL)senice area desiring unmetered secondary service for operating
traffic lights installed on streets or highways for traffic control and guidance.
Nature of Service- Alternating current,60 hertz, single phase. 120/240 nominal volts
Monthly Rate-Shall be computed in accordance with the following charges.
Energy Charge $.0261 per watt of active load per month
The actual labor, material, miscellaneous and indirect charges experienced maintaining and relamping traffic
signals during the preceding month.
Tax Adiustment -Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Minimum Charge-$1.50 per month or part thereof.
Determination of Active Load-The active load of flasher lamps or cyclically operated traffic control lamps
shall be 50%of total wattage of all lamps used during one complete cycle of operation. The active load of
continuous,non-intermittent steady burning lamps shall be 100%of the total wattage of all lamps used.
Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations -Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
2nd Revised Sheet No. EB 16
SPACE CONDITIONING AND
ELECTRIC WATER HEATING SERVICE
RATE NO. 12
Availabilitv-This rate is available to any customer desiring service for commercial/industrial space
conditioning and/or electric water heating furnished through a separate meter to which no other electrical
device except electric space heating, electric air conditioning, humidity control equipment or electric water
heating equipment may be connected. Electric space heating will be considered to include heating by light
system provided the primary means of space heating at the time of maximum heating requirements will be
furnished by the lighting system with the balance of the heating requirements furnished by supplementary
electric heating equipment. This rate is not available to new applications for heat for light systems received
after March 1, 1979. This rate is not applicable to the use of electricity for electric air conditioning unless the
customer has permanently installed electric space heating equipment and uses it as the principal source of space
heating, or to the use of electricity for occasional or seasonal substitute for another method of water heating.
Nature of Service- Alternating current, 60 hertz, single phase at Board of Water and Light(BWL)available
secondary voltage. Three phase service will be furnished at BWL option.
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $7.50 per customer per month or part thereof
Energy Charge Summer Billing Months of June through October
$0.0760 per kWh
Winter Billing Months of November through May
$0.0472 per kWh
Energv Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Ad iustment-Bill shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service%nth the BWL.
Rules and Regulations -Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
3 rd Revised Sheet No.EB 17
RESIDENTIAL ELECTRIC SERVICE,
SENIOR CITIZEN
RATE NO. 21
Availability-This rate is available to any single family residence or individual dwelling unit when the entire
electric requirements are supplied at one point of delivery through the same meter and where the customer is 65
years of age and head of the household being served. Service to appurtenant buildings may be taken through
the same meter. Service under this rate is not available to any single family residence or individual dwelling
unit when a portion of the residence or dwelling unit is used for commercial, industrial, or resale purposes
unless the wiring is so arranged that service for residence and non-residence purposes are metered separately.
Customers taking service under this rate shall provide evidence of age and contract with the Board of Water
and Light(BWL) to remain on this rate for at least twelve(12) months. This rate shall not be available for new
customers applying after the effective date of the rate. This rate shall cease to be available to any customer for
service on or after July 1, 1999. Customers remaining on this rate at that time shall elect to continue to receive
service under any other applicable residential rate schedule available at that time.
Nature of Service-Alternating current, 60 hertz, single phase, 120/240 nominal volts.
Monthlv Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $3.20 per customer per month or part thereof
Energy Charge $0.0389 per kWh for the first 300 kWh
$0.0656 per kWh for the next 200 kWh
$0.0880 per kWh for all over 500 kWh
Water Heating Discount-When an approved electric water heater is permanently installed, and there is no
other method of water heating,the above rate for the first 300 kWh, shall apply to the first 450 kWh billed and
the above rate for the next 200 kWh,shall apply to the next 250 kWh billed.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees. franchise fees, or any other charges against the BWL property, or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance. excluding delayed
payment charges,shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted:Proposed Effective: January L. 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No.EB18
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO. 31
Availabilitv-Available to any political subdivision or agency of the State of Michigan within the Board of
Water and Light(BWL)service area having jurisdiction over public streets or roadways,for street lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution system
with secondary voltage available. Luminaires may be installed with no limitations as to spacing between
luminaires. Where an overhead line extension is required to serve one or more luminaires, the BWL will
furnish, as part of the facilities provided under this rate, an average of 350 linear feet of line extension per
luminaire to be served from such extension. A special agreement will be required if more than 350 linear feet
of line extension per luminaire is required.
Nature of Service-The BWL will furnish, install, own, operate, and maintain all equipment comprising the
street lighting system,and supply the unmetered energy. The BWL reserves the right to furnish service from
either a series or multiple system or both.
Annual Rate-The annual rate per luminaire with fixture and setting, payable in twelve(12) monthly
installments, shall be as follows:
High Pressure Sodium Luminaire
70 W $ 62.00
100 W $ 71.00
150 W $ 81.00
250 W $100.00
400 W $128.00
Mercury Vapor Luminaire'
100 W $ 67.00
175 W $ 79.00
250 W $ 93.00
400 W $120.00
1000 W $227.00
Plus an additional annual charge, depending on t-V of installation of:
Wood Pole-Overhead Service None
Wood Pole-Underground Service $ 73.00
Concrete Pole-Overhead Service $113.00
Concrete Pole-Underground Service $113.00
Post Top $ 73.00
Historic - Single Top $235.00
Large Historic-Dual Top $688.00
Small Historic-Dual Top $490.00
Wall/Tunnel-8760 hours $100.00
Wall/Tunnel -4200 hours $ 60.00
Bollard $233.00
' Rates apply to existing luminaires only and are not open to new business except where the BWL elects, at the
customer's request, to install additional luminaires Nvithin an area already served by a mercury vapor lighting
System.
Adopted: Proposed Effective: January 1. 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No.EB19
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO. 31
Customer Contribution -The annual rates are based on fixtures normally stocked by the BWL,and installed
utilizing normal construction techniques. The BWL may, at its option, upon customer request install a street
lighting system not covered by the above rates. The customer, after installation, will be required to make a one
time contribution equal to the difference between the actual installed cost and the BWL estimated installed cost
of a standard installation. The annual unit charge for each luminaire will then be as stated above.
Unit Replacement-The BWL may,at its option,upon customer request replace existing street light units.
After installation,the customer shall make a one time contribution equal to the undepreciated value of the unit
plus the cost of removal.
Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to
termination charges,contributions in aid of construction,term or other special considerations when the
customer requests service, equipment or facilities not normally provided under this rate.
Tax Adiustment -Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
1st Revised Sheet No. EB20
This sheet has been canceled.
Adopted:Proposed Effective: January 1. 1997
Board of Water and Light. Lansing, Michigan
1st Revised Sheet No. EB21
This sheet has been canceled.
Adopted:Proposed Effective: January 1. 1997
Board of Water and Light, Lansing,Michigan
1st Revised Sheet No. EB22
This sheet has been canceled.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No. EB23
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO. 32
Availabilitv- Available to any political subdivision or agency of the State of Michigan within the Board of
Water and Light(BWL) service area having jurisdiction over public streets or roadways,for street lighting
service for any system consisting of one or more luminaires-,-here the BWL has an existing distribution system
available.
Nature of Service-The BWL will connect the customer's equipment to BWL lines,furnish the control
equipment, supply the unmetered energy,control the burning hours of the lamps, provide normal replacement
of luminaire refractors, control devices and lamps. The customer will furnish, install and own all equipment
comprising the street lighting system including, but not limited to the overhead wires or underground cables
between luminaires and the supply circuits extending to the point of attachment with the BWL. All
maintenance and replacement of the customer's equipment except normal lamp and glass replacement shall be
paid by the customer. The BWL reserves the right to furnish service from either a series or multiple system or
both.
Annual Rate-The annual rate per luminaire, payable in twelve (12) monthly installments, shall be as follows:
High Pressure Sodium Luminaire
70 W S 32.00
100 W $ 42.00
150 W S 51.00
250 W S 70.00
400 W S 98.00
Mercury Vapor Luminaire'
175 W $ 47.00
250 W S 63.00
400 W S 89.00
1000 W $197.00
Incandescent Luminaire'`
2500 L $ 66.00
4000 L $105.00
6000 L $127.00
Maintenance Charge -The actual labor, material. miscellaneous and indirect charges experienced maintaining
street light units during the preceding month.
Combined Rates-The annual rate for units consisting of more than one luminaire shall be the appropriate
combination of individual unit charges above.
' Rates apply to existing luminaires only and are not open to new business except where the BWL elects, at the
customer's request_ to install additional luminaires within an area already served by a mercury vapor lighting
system.
`Rates apply to existing luminaires only and are not open to new business.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light,Lansing, Michigan
2nd Revised Sheet No. EB24
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO.32
Special Terms and Conditions -The BWL reserves the right to make special contractual arrangements as to
termination charges, contributions in aid of construction,term or other special considerations when the
customer requests service, equipment or facilities not normally provided under this rate.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property,or
its operation,or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light. Lansing, Michigan
2nd Revised Sheet No. EB25
ECONOMIC DEVELOPMENT RIDER
Purpose-The primary purpose of this rider is to enhance economic development in the Board of Water and
Light(BWL) service area. It will be offered to customers when, in the utility's judgment, the availability of the
rider is a major factor for the customer locating or expanding its operations and when the rider will result in a
net benefit to the BWL and its customers.
Availabilitv-This rider is available to industrial customers on Large General Electric Service Rate No. 4 or
Primary Electric Service Rate No. 5 or Large Capacity Electric Service Rate No. 8. For purposes of this rider,
an industrial customer is defined as any business that manufactures a product for sale or research and
development. This would include usage for facilities directly associated with and on the same premises as the
manufacturing business such as offices and warehouses. A customer desiring service under this rider must
contract for such service on or before December 31, 2001. This rate will be available for a period of five years
from the date of the contract. All provisions of this rider are the same as the principal service rate with the
following exceptions:
New Customer-Open to a new industrial customer taking service on or after January 1, 1991 where
the new load results in 100 kW or more of billing demand.
Existing Customer-Open to an existing industrial customer who contracts for a bona fide increase in
connected load resulting in an increase of 100 kW, or 10%of their historical billing demand,
whichever is greater, or more of billing demand on or after January 1, 1991.
Monthly Rate
Capacity Charge: A percentage of the capacity charge included in the principal service rate, less credits,as
follows:
Contract
Year %
1 50%
2 60%
3 70%
4 80%
5 90%
Contracted Historical Billing Demand - An existing customer's contracted historical billing demand will be
the average of the three highest registered demands, including metering adjustments, during the twelve(12)
month period prior to the contract or as established by mutual consent. The contracted historical billing
demand shall be subject to the 60%provision during the contract period. The BWL reserves the right to
establish a contracted historical billing demand for all customers with duplicate or replacement operations
within the BWL service area.
Billing Demand-For a new customer, the entire billing demand shall be subject to the capacity charge in this
rider and shall never be less than 100 kW and shall not be subject to the 60%provision. For an existing
customer, or a new customer with an established contracted historical billing demand, the contracted historical
billing demand shall be billed at the capacity charge in the customer's principal service rate. Only the billing
demand in excess of the contracted historical billing demand shall be billed at the capacity charge in this rider
and shall not be subject to the 60%provision.
Minimum Charge-A new customer shall have a minimum billing demand of 100 kW. A customer,with an
established contracted historical billing demand. shall have a minimum billing demand equal to 60%of the
contracted historical billing demand.
Adopted:Proposed Effective: January 1. 1997
Board of Water and Light, Lansing. Michigan
1st Revised Sheet No. EB26
This sheet has been canceled.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
1st Revised Sheet No. EB27
ENERGY COST ADJUSTMENT
The Energy Cost Adjustment permits the monthly adjustment of rates for the costs of energy incurred in
supplying electricity to retail customers. All residential and general service rates are subject to the Energy Cost
Adjustment. In applying the Energy Cost Adjustment the applicable rate per kWh shall be increased or
decreased by the amount of the current Energy Cost Adjustment. The following definitions and procedures will
be followed in calculating the monthly Energy Cost Adjustment.
Definitions
Energy Cost Adjustment-the amount per kWh by which the applicable rates shall be adjusted for billing in
each month.
Energy Costs-those costs incurred in supplying retail electricity. Such costs shall include fuel burned in the
generating plants, energy costs associated with firm power purchases, net interchange power costs,and costs
associated with other temporary power transactions such as maintenance power. The cost of fuel burned shall
include the delivered cost of fuel(base cost, escalations. premiums/penalties, transportation,demurrage),
outside lab fees and other outside costs related to fuel procurement, and fuel additives such as freeze proofing.
Over/Under Recovery-the difference between actual Energy Costs for prior months and the amount of energy
cost recovered by means of the Base Cost of Energy and the Energy Cost Adjustment. The Over/Under
Recovery shall be added to the Energy Costs for purposes of computing the Energy Cost Adjustment for each
month.
Base Cost of Energy-the average Energy Cost included in the energy rates of the various rate schedules.
Such amount shall not be recovered by means of the Energy Cost Adjustment. The current Base Cost of Energy
is$0.017921 per kWh sold.
Procedures
Estimated Energy Cost shall be projected for a twelve-month period. Any amount of Over/Under Recovery
(positive or negative) shall be added to the Energy Cost to determine the total cost basis for the Energy Cost
Adjustment. The total cost basis shall be divided by the projected total retail billed sales for the twelve-month
period resulting in the average energy cost per kWh. The Base Cost of Energy shall be subtracted from the
average energy cost to result in the Energy Cost Adjustment.
The Energy Cost Adjustment shall be reviewed and, as necessary, revised periodically in accordance with the
provisions of this schedule,but not less frequently than every twelve months.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
1st Revised Sheet No. EB28
SCHEDULED CURTAILMENT SERVICE RIDER
Availabilitv-This rider is available to customers on Primary Electric Service Rate No. 5. A customer desiring
service under this rider must contract to curtail its demand upon notice by the Board of Water and Light(BWL)
by approximately 1,000 kW or more. The amount of curtailable demand subject to this rider may be limited by
the Commissioners in total and by customer.
Conditions of Curtailment-The General Manager has authorization to negotiate with qualifying customers as
to terms and conditions of this rider.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light. Lansing,Michigan
3rd Revised Sheet No. EB29
LANSING CITY ENTERPRISE COMMUNITY REBATE
Purpose-The primary purpose of this rebate is to encourage investment in the proposed Lansing City
Enterprise Community. The Lansing City Enterprise Community is defined as the following 1990 census
tracts: Numbers 2,3,5,7,8,12,13,14,15,19,20,21 and 65 or as determined by the City of Lansing.
Availability -This rebate is available for a two year period from the date the Lansing City Enterprise
Community is established. All provisions of this rebate are the same as the principal water, electric or steam
service rate with the following exceptions:
1. This rebate is available only to customers installing a new water,electric, or steam service in the
Lansing City Enterprise Community.
2. This rebate is available only to customers restarting an existing idle water,electric or steam service
in the Lansing City Enterprise Community after a period of no consumption.
3. This rebate is not available to Electric Rate 4 or Electric Rate 5 customers who sign a contract for
service under the Electric Economic Development Rider.
Payment-Upon application by the customer and approval by the City of Lansing and the Board of Water and
Light, the customer will be paid a rebate on the previous 12 month's utility(water, electric, steam)charges.
The rebate is ten(10)percent of the total utility charges paid by the customer.
Adopted: Proposed Effective: January 1, 1997
Page 14
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,February 27, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Christian,Evans,Hassler,Lontz,O'Leary,Royal, Strolle-7
Absent: Commissioner Pratt(out of town on businm) -t
The Secretary declared a quorum present.
The Invocation was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER EVANS
That minutes of regular session of January 23, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
No persons spoke.
Q
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Board Meeting Minutes Page 15
February 27, 1996
COMMUNICATIONS
No communications received.
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met February 12, 1996, to receive update presentations on the following
topics:
1. Ottawa Station Redevelopment Status
2. General Motors Steam Contract Status
3. Electric Competition
4. 10 MG Reservoir Landscaping and Lighting
Present were Commissioners Christian,Evans,Hassler,Lontz, O'Leary, Pratt, Royal, and Strolle.
Ottawa Station Develonment Status. General Manager Pandy reported that Ottawa Park Associates,
Developers(OPAD)continues to make progress in their negotiations with potential anchor tenants for the
Ottawa Station development project. The City Club has expressed a strong interest in relocating to the
Ottawa Station.and OPAD and the BWL have been invited to address the City Club Board of Directors
on February 19 to present the project. At the request of Oldsmobile, Visual Services, Inc.—the developer
and training supplier for the Oldsmobile Vision Center has invested in excess of$25,000 to assist with a
design and space allocation description for the construction and management of the Vision Center in the
Ottawa Station. Mr. Pandy displayed a preliminary floor plan of the Ottawa project showing the
conceptual location of a museum, health club, learning center, office space,conference rooms,shops,
restaurants and glass entryway.
The Commissioners deliberated on a realistic timeline for OPAD to secure commitments from potential
major tenants. On October 3, 1995. the developer was given a ninety(90)day timeline to secure firm
commitments from major tenants. Two extensions have been granted by the Board to allow viable major
tenants to complete feasibility studies on the economic impact and to submit the analysis to their
respective Boards. Mr. Pandy told the Commissioners that the complexity of tenant decision making is
taking more time than anticipated. Following discussion. the Commissioners concurred that the reason
OPAD was selected for the Ottawa Station redevelopment project was because the type of occupancy with
particular potential tenants would create activities and an environment that will encourage the best use of
the Ottawa Station for business and social activities. There appeared to be consensus that progress is
being demonstrated. Bi-monthly progress reports will be made to the Board,at which time an evaluation
can be made whether granting an extension is reasonable.
General Motors Steam Service Project and Contract Negotiations. Joette Woodard-Yauk,Director of
Steam Utility, gave a summary presentation on the current status of efforts to provide steam service to
GM's Small Car Group(SCG)Plant#6 complex. She reported that bids received for the design and build
of the steam supply project significantly exceeded the project estimate of$7 million. There was only one
bidder who did not take exception to the established completion date based on SCG's required service
date. The bid was$12.289.600,with condensate return, and$10.942,600 without condensate return.
Board Resolution No. 95-11-2,adopted November 28, 1995. authorizes BWL staff to proceed with the
design, and the purchase and installation of equipment to provide BWL steam service to SCG Plants#2,
#3 and#6. Mrs. Woodard-Yauk noted that the significant increase in capital project cost from the
original estimate, made it necessary to fully inform the Board prior to award of the contract. The Board
Page 16 Board Meeting Minutes
February 27, 1996
was advised that staff is seeking SCG's concurrence with the February 8, 1996, letter(distributed at the
meeting)confirming discussions with SCG representatives. The letter identifies SCG's decision to
proceed with the project on a phased approach and extend the service date to December 31, 1996.
Following discussion. it was the consensus that staff should proceed with the project as authorized by
Resolution No. 95-11-2. The project will be done in two phases in an effort to reduce overall project cost.
Phase I will consist of engineering design,purchase of all long lead items including the pipe and -
acquisition of required licenses. right of ways and easements. Phase II is the actual construction of the
project. Staff is discussing contract methodology with the bidder,which could be utilized to share any
possible cost savings during Phase 11. '-
Mrs. Woodard-Yauk also reported that contract negotiations with GM/SCG are continuing at a rapid
pace. Staff will be working with bond counsel to assure that contract language does not negatively impact
the BWL's ability to obtain tax exempt financing for future projects. Major contract considerations under
discussion were reviewed. Once agreement on the contract language is reached,an overview will be
presented to the Committee of the Whole for formal contract approval at a subsequent Board meeting.
Electric Competition. Dana Tousley, Treasurer/Controller, presented an overview on the BWL's
competitive posture. Graphics comparing BWL electric rates per unit by customer class with surrounding
utilities indicated the BWL compares very favorably. Mr. Tousley reviewed the BWL's projected electric
rate strategy by rate class for the next three years. He told the Commissioners that Management
Resources International,Inc. has been engaged for the rate design based on the parameters presented.
Staff will be returning with the results of the rate design for discussion on alternatives for electric rates at
a future Committee of the Whole meeting.
Bill Cook.Director of Electric System Control. reported on the status of electric industry restructuring
efforts in Michigan. The goal of this recodification-reform is to retain and bring big business to
Michigan. Industry is the issue. Along with this goal is to reduce and/or eliminate regulations. Governor
Engler has endorsed the Michigan Jobs Commission series of recommendations to introduce competition
and reform the electric utility industry in Michigan. The Governor has submitted these recommendations
to the Michigan Public Service Commission to use as guiding principles in its effort to promote
competition. Mr. Cook reviewed the BWL recommended electric industry restructuring principles as
communicated to the Michigan Public Service Commission(MPSC)by letter dated February 6, 1996. In
the light of the Michigan Jobs Commission sweeping recommendations, there is concern with how final
implementation details will impact BWL customer/owners. The principles outlined in the BWL position
paper in general reflect issues to be addressed by the MPSC,which include:
• General • Structural
• Supplier Guidelines • Regulatory
• Transition • Market Power
• Municipal Utility Issues • Ongoing Process
Following discussion, the Commissioners concurred with the principles presented.
10 MG Reservoir Landscaping and Lighting. Clyde Dugan,Director of Water Utility,presented
proposed plans to enhance the appearance of the 10 million gallon underground reservoir located between
Cedar and Larch Streets, across from the Dye Water Conditioning Plant. This area will receive increased
public attention with traffic to and from the new baseball stadium. The total project estimate for the
landscaping and lighting project is$225,000. Mr. Dugan asked for concurrence to present a resolution
authorizing an addition to the FY 1995-96 Capital Budget for consideration at the next regular meeting.
A conceptual site plan of the proposed landscaping and lighting project was displayed. The entire project
is expected to be completed in mid-summer. Mr. Dugan acknowledged the efforts of Larry George of
Project Engineering, who coordinated the various facets of the landscaping project, and the expertise of
Board Meeting Minutes Page 17
February 27, 1996
Irene Cahill of the City of Lansing's Forestry Division. Mr. Dugan noted that the City's Forestry Division
is providing the trees and shrubs at no cost to the BWL. Mr. Dugan also reported that bids for lawn
maintenance at the Dye/Cedar Complex have been evaluated and a resolution for award will be presented
to the Board for action. Following discussion, there was consensus to proceed with plans as proposed for
consideration at the regular meeting of February 27, 1996.
This was an informational meeting only, no action was taken.
Respectfully submitted,
Dave O'Leary, Chair Pro Tern
COMMITTEE OF THE WHOLE
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER EVANS
That the Committee of the Whole Report be received as presented.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No.96-2-1
That the Board approve Amendment No. 1 to our Rail Transportation Contract ICC-
CSXT-C-64435 with CSX Transportation and Grand Trunk Western Railroad. Inc.,
subject to approval as to form by BWL's legal counsel.
This Amendment No. 1 contains the contract language necessary for the efficient
economic and operational use of private rail cars(non-railroad owned or leased
equipment)by BWL.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-2-1 be approved.
Adopted unanimously.
CORPORATE PLANNING
Res. No.96-2-2
Authorize the BWL to grant an easement to Continental Cablevision of Michigan.. Inc.
for communication facilities at a cost consideration of$1,500. a one time payment upon
Page 18 Board Meeting Minutes
February 27, 1996
execution of the easement. The easement location is 1712 S. Creyts Road,a portion of
the South Crcyts Substation property.
This easement would permit Continental Cablevision to construct, maintain and have
access to a concrete building housing fiber optic relay equipment on the Southeast
corner of the South Creyts Substation property. The right to install communication
cable and conduit within the easement area would also be granted. The Board of Water
and Light is not presently using nor has any foreseeable use of this portion of the South
Creyts Substation property for Utility purposes-
Res. No. 96-2-3
Approve Release of Easement:
WHEREAS. Clayton G. Bailey and Addie M. Bailey executed a certain easement
conveying and warranting to the Board of Water and Light forever, such rights as
recorded in Liber 17 of Miscellaneous Records,Page 486, in the Register of Deeds,
Ingham County,Michigan,February 21, 1930; and,
WHEREAS. Strobel&Boada, representing Capital Valley Investment Company, owner
of part of Block 148, Original Plat, City of Lansing,has requested the release of said
easement, more specifically described as follows:
Easement Description: The east five(5)feet of Lot Nine(9) in Block
One Hundred and Forty-eight(148), all being in the City of Lansing,
County of Ingham. State of Michigan.
WHEREAS, this easement as described above is not needed to continue the operations of
the Board of Water and Light.
NOW, THEREFORE, BE IT RESOLVED,That the Board of Commissioners of the
Board of Water and Light release, discharge and vacate said easement on the above
described property and that the General Manager and Corporate Secretary be authorized
to execute the release of easement, subject to the requirement of the Lansing City
Charter. Further that the Corporate Secretary be directed to record the release of
easement with the Ingham County Register of Deeds.
This easement was for steam lines which probably served residential customers prior to
the hotel and restaurant/lounge being constructed at the corner of Lenawee and South
Capital Avenue. The steam lines are abandoned and the easement is no longer required.
Res. No. 96-24
Approve Release of Easement:
WHEREAS, Edgar S. Porter and Drury L. Porter, executed a certain easement
conveying and warranting to the Board of Water and Light forever, such rights as
Board Meeting Minutes Page 19
February 27, 1996
recorded in Liber 17 of Miscellaneous Records. Page 488. in the Register of Deeds.
Ingham County. Michigan,February 21, 1930. and.
WHEREAS, Strobel&Borda, representing Capital Valley Investment Company, owner
of part of Block 148.Original Plat, City of Lansing, has requested the release of said
easement, more specifically described as follows:
Easement Description: The east five(5)feet of Lot Ten(10), the east five
(5)feet of the west one hundred and twelve and one half(112 1/2)feet of
Lot Twelve(12). The north twenty-one j21)feet of the east five(5)feet of
the west one hundred twelve and one half(112 1/2)feet of Lot Eleven
(11). The south twenty(20)feet of the east five(5)feet of Lot Eleven
(11). The east twenty-three(23)feet of the west one hundred and sixty
(160)feet of the north five(5)feet of the south twenty(20)feet of Lot
Eleven(I 1). The east five(5)feet of the west one hundred and forty
seven(147) feet of the north eighteen(18)feet of the north thirty-four(34)
feet of Lot Eleven(11). The east thirty-four and one half(34 1/2)feet of
the west one hundred and forty seven(147)feet of the north seven(7) feet
of the south forty one(41)feet of Lot Eleven(11). The south eleven(11)
feet of the north thirty-two(32)feet of the cast fifteen(15)feet of the west
one hundred and twelve and one half(112 1/2)feet of Lot Eleven(11).
All of the above described lands being in Block 148, City of Lansing,
Michigan.
WHEREAS, this easement as described above is not needed to continue the operations of
the Board of Water and Light.
NOW.THEREFORE,BE IT RESOLVED,That the Board of Commissioners of the
Board of Water and Light release,discharge and vacate said easement on the above
described property and that the General Manager and Corporate Secretary be authorized
to execute the release of easement, subject to the requirement of the Lansing City
Charter. Further that the Corporate Secretary be directed to record the release of
easement with the Ingham County Register of Deeds.
This easement was for steam lines which probably served residential customers prior to
the hotel and restaurant/lounge being constructed at the corner of Lenawee and South
Capital Avenue. The steam lines are abandoned and the easement is no longer required.
Res. No. 96-2-5
Approve Release of Easement:
WHEREAS. Jacob Himmelberger executed a certain easement conveying and
warranting to the Board of Water and Light forever, such rights as recorded in Liber 19
of Miscellaneous Records. Page 257. in the Register of Deeds, Ingham County,
Michigan.October 2. 1930;and,
Page 20 Board Meeting Minutes
February 27, 1996
WHEREAS. Strobel&Borda, representing Capital Valley Investment Company,owner
of part of Block 148, Original Plat. City of Lansing, has requested the release of said
easement. more specifically described as follows:
Easement Description: The west one hundred and twenty(120)feet of the
north five(5)feet of the south fifty-one(51)feet of Lot Three(3). The
south five(5) feet of the north fifteen(15) feet of the west five(5)feet of
the east fifty-two and one half(52 1/2) feet of Lot Three(3). Also, the
south fifty-one(51)feet of the west five(5)feet of the east forty-six and
one half(46 1/2)feet of Lot Three(3). All of the above described lands
being in Block One Hundred and Forty-eight(148), in the City of
Lansing,Michigan.
WHEREAS. this easement as described above is not needed to continue the operations of
the Board of Water and Light.
NOW, THEREFORE,BE IT RESOLVED, that the Board of Commissioners of the
Board of Water and Light release, discharge and vacate said easement on the above
described property and that the General Manager and Corporate Secretary be authorized
to execute the release of easement, subject to the requirement of the Lansing City
Charter. Further that the Corporate Secretary be directed to record the release of
easement with the Ingham County Register of Deeds.
This easement was for steam lines which probably served residential customers prior to
the hotel and restaurant/lounge being constructed at the corner of Lenawee and South
Capital Avenue. The steam lines are abandoned and the easement is no longer required.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolutions 96-2-2 through 96-2-5 (Corporate Planning), respectively,be approved.
Adopted unanimously.
HUMAN RESOURCES
Res. No.96-2-6
That Wayne L. Dennis, a Construction Mechanic for Construction Services.be awarded
a total of$89.00 for suggestion proposal number 1995-068, to enlarge holes in mounting
plate to 1 1/8" to minimize time required to anchor cable pulling device.
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$356 in the first year.
Board Meeting Minutes Page 21
February 27, 1996
Res. No. 96-2-7
That Terry A. Kalush, a Water Station Operator A for Water Production Operations,
and Jeffrey North, a Maintenance Mechanic Supervisor for Water Production
Maintenance,each be awarded$90.97 for a total of$181.94 for suggestion proposal
number 1995-039. to use influent valve to push water into inlet and basin transfer pump
to pump water at accelerated rate when taking final settling basin out of service for
cleaning.
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$1,069.40 in the first year.
Res. No. 96-2-8
That Teresa Smith, a Customer Billing Representative for Customer Accounting
Services,be awarded a total of$266.30 for suggestion proposal number 1996-004, to
add fields to CA 1751 printout for customer name, mailing address, meter number, and
whether SIO was previously sent, to expedite issuance of meter read card.
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$1,913 in the first year.
Res. No. 96-2-9
That Richard Taylor, a Relay Technician for System Operations, be awarded a total of
$5.000 for suggestion proposal number 1993-184. to replace the electronic only in
existing Rockwell Remote Terminal Units(RTU) rather than replacing complete RTU.
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$487,523 in the first year.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER LONTZ
That Resolutions 96-2-6 through 96-2-9, respectively, (Human Resources)be approved.
Adopted unanimously.
Page 22 Board Meeting Minutes
February 27, 1996
PENSION
Res. No. 96-2-10
That Kenneth L. Burch, Line Helper in Line Construction Department, be placed on an
early reduced pension of$1,294.93 per month effective February 1, 1996. He has-
selected Option V with the provision that after his death, if his wife, Mary L.
Smith/Burch, survives him she will receive 50%or$647.47 per month for the rest of her
live as provided under Option V. --
-----------------
Mr. Burch has worked for the BWL for 31.27 years and is 50 years of age.
-----------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-2-10 be approved.
Adopted unanimously.
TREASURER/CONTROLLER
Res. No. 96-2-11
Authorize a three year contract for Trash Hauling and Recycling Services for all BWL
locations to Waste Management of Michigan Midwest, Lansing,MI from April 1, 1996
to March 31, 1999, in the amount of$76,777.96. Pricing is firm for one year,with 3%
increases in years two and three. The estimated annual costs based on the current level
of service are: Year One, $24,840.00; Year Two$25.585.20: and Year Three
$26.352.76. The three year total is$76,777.96.
The award recommendation is based on a competitive bid evaluation. Bid evaluation
criteria included compliance with BWL specifications, compliance with the Ingham
County Health Department(ICHD) Solid Waste Management Plan, and total cost. The
Waste Management bid represents an approximate saving of$35,000(37%)over BWL
costs for the next three years compared to our current contract costs.
Other bidders were Browning-Ferris Industries(BFI), Eaton Rapids,MI($96,617.45);
Allied Disposal Company, Bath, MI($102,230.72), and Granger Container, Lansing,
MI($106.452.00).
Board Meeting Minutes Page 23
Pebntary 27, 1996
Rcs. No. 96-2-12
Authorize disposal of the following equipment that has been declared surplus by the
Electric Production Division,Production Maintenance Department. The method of
disposal will be sale based on competitive bids.
1) One(1)Ingersoll-Rand Centac Centrifugal Air Compressor,Model No.
C10M2. Serial No.M86-3825,purchased in 1986 from Ingersoll-Rand,
removed from service in 1994.
2) One(1)EMD Diesel Locomotive(BWL#799), 1951 General Motors
Corporation.Model D-100021,Engine 16-567B, purchased in 1982 from
Grand Trunk Railroad, removed from service at Erickson Station in 1995.
The compressor was part of the auxiliary equipment at Ottawa Station. The diesel
locomotive engine is worn out and will be sold for salvage.
Res. No.96-2-13
Authorize disposal of a Spectrometer that has been declared surplus by the Technical
Services Division. Environmental Services Department. The method of disposal will be
by sale based on competitive bids.
1) One(1)Gas Chromatograph-Mass Spectrometer Nermag Model R10-10C,
purchased in 1987, removed from service in Environmental Services
Department in 1995.
This piece of equipment is technologically obsolete.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CIIRISTIAN
That Resolutions 96-2-11, 96-2-12, and 96-2-13, respectively, (Treasurer/Controller)
be approved.
Adopted unanimously.
WATER
Res. No. 96-2-14
That Board of Water and Light charges for water service installations be changed.
effective January 1, 1996, as follows:
Page 24 Board Meeting Minutes
February 27, 1996
Size Main-To-Curb-Box Curb-Box-To-Blde.
Current Proposed Current Proposed
Fee 1996 Fee Fee 1996 Fee
3/4" $680 $740 $10.75 $12.85
1" $815 $890 $11.00 $13.15
11/2" $1,085 $1,180 $12.18 $14.55
2" $1,355 $1,480 $12.76 $15.25
The new fees represent an increase of 9.0%over the current Main-To-Curb-Box fees
and 19.5%over the Curb-Box-To-Building fees. The increased fees are established to
phase in the full recovery of actual costs.
Res. No.96-2-1-S
That the Board authorize an addition to the FY 1995/96 Capital Budget for Dye/Cedar
Complex in the amount of$225,000 for landscaping and lighting the 10 MG Reservoir.
The project will result in a combination of grass, shrubbery and trees on the slopes of the
reservoir, eight lamp standards on the upper perimeter,three seating areas with two
lamps each along Cedar Street, and a combination of grasses and wild flowers on the
top. A retaining wall encloses the southeast corner of the structure, providing protection
and enhancing the appearance of this area.
The landscaping design has been coordinated with Lansing's Forestry Division, and the
trees and shrubs are provided by them at no cost to the Board.
Res. No. 96-2-16
That the Board enter into an agreement with Lawn Tech of Grand Ledge,Michigan,for
lawn maintenance at the Dye/Cedar Complex. The term of the agreement is four(4)
years,with an estimated cost of$31,264 for the four year period.
Other bids were evaluated as follows: Evergreen Lawn Care($39.000);Professional
Turf Management($52,113);Quality Landscaping($89,442); and. Smith Tree and
Landscaping($90,542).
With the landscaping improvements made along Cedar Street as a part of the High
Pressure Pumping Station project,and with the proposed landscaping improvements for
the 10 MG Reservoir, the need for a pre-defined performance contract for this complex
became evident. This contract covers weeding,fertilizing, mulching, mowing,
trimming, and cleanup for the entire complex.
Board Meeting Minutes Page 25
February 27, 1996
Prospective bidders were provided drawings showing all existing landscaping features,
as well as those proposed for the 10 MG Reservoir.
--------------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER ROYAL
That Resolutions 96-2-14, 96-2-15 and 96-2-16. respectively, (Water)be approved.
Adopted unanimously.
UNFINISHED BUSINESS
Ottawa Station Redevelopment Update. Chuck Clark,Partner of Ottawa Park Associates,Developers
(OPAD), presented a two-week progress report on the Ottawa Station development project. He told the
Commissioners that negotiations with potential anchor tenants are continuing on a positive note.
Proposed site plans of the Ottawa Station redevelopment project, prepared by HNTB Architects Engineers
Planners,were handed out. Mr. Clark reviewed the floor plan depicting the location of the various tenants
who have indicated a strong interest in the Ottawa Station project. i.e.,Oldsmobile/Vision Center,
Sparrow Hospital,R.E. Olds Museum, and the City Club. He stated that Visual Services. Inc. (VSI)plans
to unveil their business plan for the construction and management of the Vision Center in the Ottawa
Station sometime around March 15, 1996. An artist's rendering of the Ottawa development as viewed
from the Michigan Avenue bridge was displayed. The drawing suggests removing the existing pedway
from the Radisson Hotel to the Lansing Center and redesigning it for installation on the east side of the
Ottawa Station with an exit on the west side into the Grand Avenue ramp. Mr. Clark noted that the real
benefit from the pedway renovation is the improvement of the Lansing skyline from Michigan Avenue,
which becomes uncluttered.
A lengthy question and answer period followed relative to the site plans and potential tenants. The
Commissioners were satisfied with the progress report. Mr. Clark agreed to continue to present
bi-monthly update reports to the Board.
GENERAL MANAGER'S REMARKS
General Manager Pandy bricfed the Commissioners on the following items:
Ethics Committee Investigation of Possible Conflict of Interest Involving General Manager Pandy.
Mr. Pandy distributed copies of documents from official BWL records on all information upon which he
disclosed potential conflicts of interest. These records included copies of memos and Board minutes,
which clearly state that the Board recused Mr. Pandy from all discussions including interviews and
evaluation on the merits of the four potential developers for the Ottawa Station redevelopment project.
The minutes also reference that once the team of Ottawa Park Associates,Developers(OPAD)was
selected by the Board. the Commissioners then authorized Mr. Pandy to proceed with negotiations relative
to the redevelopment project.
City Council's Ways and Means Committee Discuss BWL's Condition and Value. Notes taken by
Internal Auditor Kellie Willson of the February 21, 1996. City Council's Ways and Means Committee
meeting listed ten questions raised by the committee relative to the BWL. Mr. Pandy reported that at the
suggestion of Councilmember Harold Leeman, written answers--together with back-up documentation--to
the ten questions were delivered to the City Council on February 26. The responses provide a capsule
Page 26 Board Meeting Minutes
February 27, 1996
review of the BWL on where the utility stands regarding matters pertaining to Belle River and
competition.
Mr. Pandy also reported that the Council's Ways and Means Committee intends to invite Financial Broker
Sandv Pensler to talk about the BWL and its finances at a televised public forum. The meeting is
scheduled for March 6, 1996. at 4:00 p.m. in the City Council chamber. Mr. Pensler, an agent for
Consumers Power Company(CPCo), tried unsuccessfully to negotiate a deal between CPCo and the-City
to lease the BWL's electric and steam utilities to Consumers Power under the terms of a 75-year operating
agreement. Mr. Pandy noted that Mr. Pensler stands to gain about$3 million in commission fees from the
transaction. The Commissioners were encouraged to attend this4mportant meeting to express their views
on the BWL.
Share the Success Update. The BWL's Share the Success performance measures through the month of
January took a 46 point dip. Work is ongoing to try to regain ground.
AABE Holds 96th Annual Conference in Detroit. The BWL along with other utilities helped sponsor a
conference called, the American Association of Blacks in Energy(AABE)February 21-24. The BWL was
recognized in their program. Human Resources Director Linda Gardner and Staff Attorney Larry Wilhite
were instrumental in getting the BWL involved in this effort.
Mayor's Energy Advisory Board. Notes taken by Corporate Planning Director Roger Ophaug on the
February 21, 1996, meeting of the Energy Advisory Board(EAB)were handed out for re,0ew.
Commissioner Lontz Meets with Citv Council Counterpart. Commissioner Lontz met with
Councilmember Howard Jones on January 30, 1996. as part of the BWL's pairing effort. His notes
including suggestions made by Councilmember Jones were handed out for information.
Visible Improvement Program (VIP). A formal copy of the Visible Improvement Program folio was
handed out for information. The VIP folio contains a complete collection of reference documents
regarding the new employee reward and recognition system.
Access BIDCO Dividend Achieves 50% Return. A letter from Access BIDCO, dated January 23, 1996,
was handed out. The letter announces that with respect to the BWL's Pension Fund investment in the
BIDCO, a cash dividend of$3.00 per share will be paid on March 1, 1996, to shareholders of record as of
February 15. 1996. This brings Access BIDCO's cumulative dividend to$5.00 on a$10.00 investment.
At this point of the BWL's initial investment, a 50%return has been achieved, which represents an
excellent success for the BWL Pension Fund.
The American Bowling Congress Congratulates and Salutes BWL Bowling League. The American
Bowling Congress(ABC) recognized the BWL for fifty years of corporate support for sanctioned
competition. The BWL league was organized in 1946 and has continued for fifty years in this community.
Mr. Pandy and the Board congratulated the bowling league on a half century of competition.
Vision Center Tour. Mr. Pandy reminded the Board of the Vision Center Tour leaving on February 28 at
9:00 a.m. and returning by 2:30 p.m. The Board and staff will be accompanied by the local news media--
TV-6. TV-10,and the LANS►NG STATE JOURNAL. The group will be met by John Burgess, Vice President of
Visual Services. Inc. (VSI)and Dick Ellis, Manager of VSI.
Board Meeting Minutes Page 27
February 27, 1996
APPA Publishes 1993 Financial and Operating Ratios. A sheet showing financial and operating ratios
by customer size class, published by the American Public Power Association(APPA),was handed out for
reference. Mr. Pandy noted that the latest year compiled by APPA was for 1993. The handout includes
separate data compiled by the BWL comparing FY 1993 with FY 1995. Although the BWL performed
well in most of the measures, there were a couple of categories where there would be some concern and
need to be addressed. This item will be reviewed at a future Committee of the Whole meeting.
REMARKS BY COMMISSIONERS
Rain Fee Discussion. Commissioner O'Leary inquired if billing for the stormwater system(rain fee)
would fall upon the BWL, since sewerage charges are already included on BWL bills.
Mr. Pandy responded that Councilmembers Leeman and Novak have indicated that they would like to see
the stormwater fee. included on the BWL's monthly utility bills as a separate item, in addition to the
sewerage charge. Mr. Pandy noted that he suggested to both Councilmembers that the BWL receives a lot
of resistance from customers on the sewerage charge. Further, the stormwater fee is based on land area
and is the responsibility of the land-owner,while sewerage charges are paid by tenants(the BWL's
database does not include land-owners information on real estate parcels). Mr. Pandy indicated to
Councilmembers Leeman and Novak that he would pass on their request to the Board for consideration.
Televised Board Meetings Advocated by Councilmember Leeman. Mr.Pandy reported that
Councilmember Leeman urges the Board to meet in the City Council chambers to have all public meetings
televised. Board meetings were televised from July 1980 through December 1982. Results from a
telephone survey conducted in 1982 indicated there was very little interest in the community to continue
televising the meetings.
Discussion on Proposed Energy Park. Commissioner Lontz asked for Board and staff reaction on the
proposal submitted by the Energy Advisory Board to the City of Lansing, in which an Energy Park would
be established on city-owned park property adjacent to the dam and fish ladder on the Grand River.
Technical Services Director John Elashkar told the Board that the BWL's cost estimate associated with
the proposed Energy Park was approximately$220,000 for the hydro dam only. If the power is activated.
then the dam would have to be licensed,which would involve additional costs.
Commissioner Hassler suggested a complete cost study to determine the total BWL cost to assist in
establishing the proposed Energy Park.
Corporate Planning Director Roger Ophaug stated that the Energy Board has been told the BWL is not in
a position to finance any part of the Energy Park project. There was consensus that the BWL would be
interested in pursuing this project should funding become available through external sources.
Comments on Ethics Committee Investigation of General Manager Pandv. Chairman Hassler stated,
on behalf of the Commissioners. that this Board is satisfied with the information provided and filed with
respect to any conflicts of interest. He said that this Board supports General Manager Joe Pandy and
knows that he has been open about his business investments. He further stated that it is well documented
that Joe Pandv removed himself from all discussions associated with evaluating and selecting a developer
for the Ottawa Station redevelopment project,and that this Board knows General Manager Pandy will be
exonerated by the Ethics Committee.
Page 28 Board Meeting Minutes
February 27, 1996
EXCUSED ABSENCE
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That the absence of Commissioner Pratt(out of town on business)be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Royal, the Board adjourned at 6:20 p.m.
Mary . Sci Secretary
Filed: March 4, 1996
Marilynn Slade, City Clerk
Y � :I
r � �
Page 29
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesdav,March 26, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Evans, Hassler, O'Leary,Royal, Strolle-5
Absent: Commissioners Christian,Lontz, and Pratt-3
The Secretary declared a quorum present.
The Invocation was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That minutes of regular session of February 27, 1996, be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
Lloyd Teets, 116 E. Elm Street, Lansing,commented on proposed Resolution 96-3-2, agreement with
RAILCAR,Ltd., for a supply of used rail cars. He remarked that leasing 83 rail cars seems excessive
since he rarely sees more than one of three units at Eckert operating.
Mr. Teets also stated that three years ago, Delhi Township's thirty-year franchise with Consumers Power
Company(CPCo)was up for renewal, and noted that the BWL missed an opportunity. He questioned the
BWL's efforts to sell its excess generating capacity. He stated that with the BWL's low electric rates, it
would seem something is wrong since the utility is unable to acquire these franchises.
Mr. Teets also remarked that he will making Freedom of Information Act(FOIA) requests on the Ottawa
Power Plant development and associated partnerships. He spoke in support of the Ottawa Power Plant
project, indicating that it can really be a key anchor to downtown's redevelopment, and noted he never
considered the Lansing Center and the baseball stadium an anchor.
[Responses to comments on p. 35 and "General11anager's Remarks,"p. 40 of minutes.]
Page 30 Board Meeting Minutes
March 26, 1996
Charles Clark, president of Clark Construction Company and a partner of Ottawa Park Associates,
Developers(OPAD), updated the Board on activities since the last progress report of March 12. Mr.
Clark reported on meetings held with officials from R.E. Olds Museum. Oldsmobile and Vision Service,
Inc. (VSI),Michigan State University Business School, Sparrow Hospital, and the State of Michigan. He
noted that grant opportunities are being explored to assist potential tenants in locating in the Ottawa
facility. Mr. Clark indicated that he is very pleased with the progress being made and remarked that he
continues to be more enthusiastic and excited about the Ottawa Power Plant redevelopment project
becoming a reality. He unveiled a three-dimensional scale model of the first four floors of the redeveloped
power plant, and discussed how some of the proposed tenants would fit into the lower floors of the project.
The model included space on the first four floors for the Vision Center, including a 250-seat multi-
purpose theater,R.E. Olds Museum, a health club, a 200-seat restaurant. a Learning Center, and retail
stores.
COMMUNICATIONS
No communications received.
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on March 12, 1996, to receive staff presentations on the following
agenda items:
L Ottawa Station Development
2. Customer Attitude Survey
3. Dimondale Dam Project
4. Community Involvement
5. City of Lansing Communications
6. Other Related Issues
Present were Commissioners Christian, Evans, Hassler, Lontz, Pratt, O'Leary, and Strolle. Absent was
Commissioner Royal(business commitment out of stale).
Ottawa Station Development. Chris Holman, partner of Ottawa Park Associates,Developers(OPAD),
presented a bi-monthly progress report on the Ottawa power plant development project. Schematic floor
plans of the proposed Oldsmobile Vision Center prepared for Vision Service, Inc. (VSI)by Krent/Paffett
Associates, Inc. were distributed to the Commissioners. Mr. Holman noted that the scale model drawings
clearly indicate VSI's commitment to the development. OPAD will be meeting with Oldsmobile and VSI
officials to continue discussions on a tenant lease potential. Mr. Holman indicated he is optimistic that
discussions with Oldsmobile will lead to a decision to relocate its Vision Center to the Ottawa plant.
Other scheduled meetings will be held with the R.E. Olds Museum Board of Directors and the State of
Michigan to explore available museum grants, the Michigan Society of Association Executives and the
Capitol Club, (comprised of association directors), and the City Club of Lansing to discuss the prospects
of relocating to the Ottawa facility. Sparrow Hospital's market and financial feasibility study on a
proposed fitness center has been completed, and OPAD plans to participate in a meeting with Sparrow
officials and the City of Lansing to discuss possible city employee membership in a downtown health club.
OPAD has started pricing a tenant build-out cost--comprised of space from the walls in--for VSI and other
potential tenants. A question and answer period followed. The next progress report will be made at the
regular Board meeting on March 26, 1996.
Board Meeting Minutes 31
March 26, 1996
Customer Attitude Sun,ev. Dr. Andrew Morrison, Partner of Market Strategies, Inc. (MSI), presented
the results of the semi-annual residential customer satisfaction and performance survey to profile the
relationship between the BWL and these customers, and the BWL's market position in the changing
energy utility marketplace. Dr. Morrison reported the findings relevant to changes in the last year, the
Consumer Power proposal, and priority of key utility activities. He noted that since May 1995 to
December 1995, the BWL's position with customers has weakened on three summary measures:
(1) Satisfaction with electric service slightly decreased from 88% to 82%; (2)satisfaction with water
service decreased six points to 84%; and (3)overall favorability fell from 85%to 79%. A combination of
causes contributed to the diminished levels of customer satisfaction according to MSI observation. The
most consequential factors are represented by a combination of anger over water rate increases; confusion
about sewerage rates: and dissatisfaction occurring when customers interact with the BWL regarding bill
related issues. Important positive findings include the increase in overall loyalty from 75%in May, 1995
to 80%currently. Awareness increased for BWL activities such as the potential sale of the BWL's main
office building, new water agreements with Delta and Lansing townships, the Ottawa power plant
commercial development, and winning the taste test for BWL water. Communications Director John
Strickler reported on BWL communication efforts involving expanded radio spots featuring BWL
employees and promoting the Connections newsletter readership. Lengthy discussion was held with
respect to communication challenges in reaching the various customers groups ranging in ages 18-29 and
45-64.
The Commissioners viewed a video segment of a focus group(BWL Citizens Advisory Committee)
conducted in early fall to provide input to the Integrated Resource Planning(IRP)process. Issues of
importance to customers and the community values as discussed by the focus group include Cost,
Reliability, Local Control. Environment, Local Economic Concerns and Demand-Side Management.
Dimondale Dam Project. John Elashkar, Director of Technical Services, and Jim Felts,project engineer
for the Dimondale Dam project, presented an overview of the Dimondale Dam Disposition Study.
Conclusions outlined in the study summarize pertinent issues which must be considered in determining
the proper course of action for disposition of the Dimondale Dam located in the Village of Dimondale. A
map depicting BWL-owned property surrounding the dam was displayed. The BWL obtained the dam in
1930 from the Michigan Heat and Power. Mr. Felts compared the following four options taking into
consideration the economic, environmental, recreational, and sociological issues:
Option No. 1 - Construct New Dam
Option No. 2A-Major Dam Repair
Option No. 2B-Minor Dam Repair
Option No. 3 -Remove Existing Dam
Option No. 4 -No Action
The consequences of the various options were discussed. Prior to selecting an option, several things must
first take place: (1)Review the study with the Michigan Department of Natural Resources(DNR)for
input, (2) perform an appraisal of the Dimondale Dam property, and(3) meet with officials from the
Village of Dimondale and Windsor Township. Once input is received by those impacted by the dam, staff
is to report back to the Board with a recommendation for consideration.
Communitv Involvement. General Manager Pandy gave an overview of community foundations
established to benefit the community. He discussed the importance of local commitment to community
involvement. The community involvement program supported by the Salt River Project in Phoenix,
Arizona, was cited as a model, which includes corporate contributions and numerous community service
through employee volunteers. Discussion was held with regard to the favorability aspect of a public utility
that is committed to supporting its customers.
Page 32 Board Meeting Minutes
March 26, 1996
City of Lansing Communications. The Commissioners plan to continue to meet with their City
Councilmember counterpart to encourage positive communication. Issues raised by Sandy Pensler at the
Council's Ways and Means Committee meeting held March 6, 1996, were highlighted. A capsule report
addressing issues discussed will be prepared for the Commissioners for reference.
Lugnuts Tower. General Manager Pandy reported on the status of the proposed"Lugnuts Tower," the
converted BWL brick chimney located on Jay Street at Cedar and Michigan Avenue. He told the
Commissioners that the notion of putting the proposed"Lugnuts" lettering on the chimney was not
approved by the City's Zoning Administrator because it was considered off premise advertising,which
classifies it as a billboard. The City's sign ordinance prohibits billboards in the Capitol Center District.
On the other hand, the shape of the nut on the tower could be construed as"public art" and, therefore,be
exempt from the regulations of the Sign Code. Mr. Pandy noted that in combination with the lettering,
the nut would be considered a sign. Mr. Pandy handed out an artist's rendering of the 155 foot chimney
made to resemble a lug with a nut on it by wrapping the top of the stack with a nut shaped canopy and
extending"threads"below the"nut" approximately eight feet. He reported that a total of$36,000 has
been received in private donations to cover the cost of placing the nut sculpture on the chimney.
Following discussion, the Board concurred with plans to convert the brick chimney into an identification
point for the Oldsmobile Park stadium area. If and when the sign ordinance is amended. additional
private funds would be solicited to cover the cost of the"Lugnuts" lettering.
Respectfully submitted,
David O'Leary, Chair Pro Tern
COMMITTEE OF THE WHOLE
BY COMMISSIONER EVANS
SECONDED BY COMMISSIONER STROLLE
That the Committee of the Whole Report be accepted as presented.
Adopted unanimously.
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on March 19, 1996, to consider pension fund items for the period October
1, 1995 to December 31, 1995.
Present were Committee Members Evans, O'Leary, Pratt,and Strolle. Also present was Commissioner
Hassler.
The committee reviewed a quarterly report of the BWL Employees' Pension Fund investments for the
quarter ending December 31. 1995. The report of the Personnel Committee has been forwarded to the
Pension Fund Trustees for consideration.
At the last Personnel Committee meeting held December 14, 1995, staff was asked to research costs of
changes in funding actuarial assumptions; conduct an actuarial study to measure healthcare benefits
liability;and to research what other municipals are doing in these areas.
Treasurer/Controller Touslev presented the results of a supplemental actuarial report(dated February 6,
1996) outlining the contributions and unfunded liabilities for the various changes in funding assumptions.
In summary, it was reported that the current mortality table used in the actuarial valuation is the 1971
Group Annuity Mortality Table. Significant improvements in life expectancies have occurred since this
Board Meeting Minutes 33
March 26, 1996
table was developed: the 1983 Group Annuity Table reflects current experience very well and many plans
have begun using this table. A review of current economic assumptions being used by public plans in
Michigan shows that the spread between the interest rate and the base inflation portion of the salary scale
varies from 1.5%(conservative) to 3.5%(optimistic). The spread used in the BWL's most recent
valuation is 2%(7.5%interest minus 5.5%base inflation in the salary scale). This measure indicates that
the economic assumption package currently being used is fairly conservative.
The Personnel Committee submits the following resolution for Board consideration:
Changes in Pension Funding Assumptions
(Resolution 96-3-1)
RESOLVED, That the BWL pension funding assumptions used by the actuaries to
calculate the annual pension contribution be changed as follows:
Assumptions determined by the BWL
Investment Returns 7.5% No change
Pay Projections 5.0% Change from 5.5%
Mortality Table 1983 Group Annuity Change from 1971 Group
Annuity
Amortization(UAAL) 15 years Change from 30 years
Funding Target 100% No change
Assumptions determined by historical data, revised as recommended by actuaries
Rates of Separation Probability Range
Rates of Disability Probability Range
Rates of Retirement Probability Range
Active Group Size Constant
These changes would have reduced the FY 96 pension contribution by$436.036 from
$3,470.672 to$3,034,636 in FY 96)and increased Unfunded Actuarial Accrued
Liabilities (UAAL)by$258,282. Since the fund is currently overfunded, the effect is to
reduce the overfunding by 1.3%. These changes are consistent with recommendations
made by our actuary and should result in a favorable actuarial valuation letter in the
future. The net effect of these changes will gradually reduce the current overfunding
situation.
Other Matters
The committee discussed alternatives for recognizing and funding post-retirement health insurance
benefits. Once a study on post-retirement healthcare funding is completed, the results will be reviewed
with the Personnel Committee.
Discussion was held with regard to internal vs. external pension investment management. Staff was asked
to research industry trends and provide suggested alternatives on how to assist the Board in monitoring
the investment process.
Respectfully submitted
John Strolle, Chair
PERSONNEL COMMITTEE
Page 34 Board Meeting Minutes
March 26, 1996
BY COMNUSSIONER STROLLE--
SECONDED BY COMMISSIONER O'LEARY
That the Personnel Committee Report, including Resolution 96-3-1,be approved.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No. 96-3-2
That the Board revise Resolution No. 96-1-2 concerning approval of a rail car lease
agreement with Arkansas Power&Light c/o ENTERGY Services, Inc. BWL has not
been able to come to agreement on lease terms with ENTERGY. Therefore, it is
recommended that BWL enter into a lease agreement with RAILCAR Ltd., of Atlanta,
Georgia for the supply of rail cars, subject to approval as to form by the BWL's legal
counsel. The lease agreement particulars are as follows:
1. The term of this agreement will be thirty two(32) months(May 1, 1996 -
December 31, 1998), with BWL having the right to a twelve(12) month
extension.
2. RAILCAR,Ltd. will provide a train set of eighty three(83)used bottom
hopper rail cars with the assurance that they will maintain the integrity of the
train set at all times during the term of the lease.
3. The lease rate will be$320.00 per car/month(full service- inclusive of all
normal maintenance expenses).
------------------
The RAILCAR Ltd. proposal will guarantee the supply of rail cars throughout the term
of the lease while providing similar economic advantages as compared to the
ENTERGY Services, Inc. proposal.
Res. No.96-3-3
It is recommended that the Base, Goal and Ranges for FY 1995/96 Share the Success
(STS) Water Reliability Measure(Total Customer Outage Hours)be revised from:
Base: 3611.3 (Average of past four fiscal years based on an average 11 services/block)
Goal: 2680.6 (Average of FY 94 and FY 95 based on an average of 11 services/block)
Scoring Range: >3611.3 (3611.3 <----->2680.6) <2680.6
0 (10 <-----------22.5) 25
Board Meeting Minutes 35
March 26, 1996
To:
Base: 4274.3 (Average of FY 94 and FY 95 actual customer outage hours)
Goal: 3046.5 (FY 95 actual customer outage hours,best of FY 94 and FY 95)
Scoring Range: >4274.3 (4274.3 <----> 3046.5) <3046.5
0 (10<--------->22.5) 25
The Base and Goal were established based on a limited sampling as to the number of
water services per block. The monthly results are being reported based on the actual
number of services interrupted and length of interruption. A subsequent review of the
data for the past two fiscal years indicates that the assumed average of 11 services per
block based on the limited sampling is not representative. The revision uses actual
historical data to establish the Base and Goal.
-------------
This revision would result in both the Base and Goal and the actual scoring being on the
same basis, namely actual number of services interrupted and the actual length of
interruption. There were 2318.4 total customer outage hours recorded through January
1996. The revised measure would result in 13 points earned as of January compared to
no points for the existing measure.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolutions 96-3-2 and 96-3-3 be approved.
General Manager Pandy stated that the rail car recommendation is the good work of Brian McLeod,Fuels
Supply and Results Manager and his staff. Mr. Pandy responded to Lloyd Teets' observations(during
Public Comments) relative to the 83 rail cars. He reported that in order to get the private car rate, a unit
train is needed; a unit train consists of 75 to 100 cars moved as one unit by one string of locomotives.
Each car has a capacity of approximately 80-100 tons per car. The BWL burns nearly 500.000 tons of
coal per year. It was noted that Erickson Station alone burns 80 tons per hour,which is equivalent to a
full rail car every hour. The turnaround time on these cars is typically ten to eleven days because they
have to be brought in full and returned to the mines empty in Kentucky, and then reloaded and reshipped
through two carriers back to Lansing. Mr. Pandy stated that the Fuels Supply staff conducted a scientific
and professional analysis to determine the optimum savings for BWL customers;with the lease of 83 cars,
a 75-car train and 8 spare cars will be in service.
Commissioner Royal asked about the construction of the rail cars and Commissioner Strolle asked about
the cars' life expectancy.
Mr. McLeod responded that the used rail cars are made out of steel with a life expectancy well within the
period of the lease.
Resolutions 96-3-2 and 96-3-3 were adopted unanimously.
Page 36 Board Meeting Minutes
March 26,1996
HUMAN RESOURCES
Res. No. 96-34
That Sheryl Adams, Office Supervisor, Water Transmission&Distribution, be awarded a total of
$1,199.88 for suggestion proposal number 1995-093, to change action code parameters on CIS
Water Main Tap&Curb Box SO1 screen to allow entry of"0" in footage, material type CD,and
size CD fields.
--------------------
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$11,248.84 in the first year.
--------------------
Res. No. 96-3-5
That Stanley Keeler, Relay Technician for Electric Testing,be awarded a total of$134.80 for
suggestion proposal number 1994-010, to train Line Department personnel to locate secondary
faults for repair, eliminating need to call in Test Group.
----------------
By implementing this proposal, it is estimated that the BWL will realize a net savings of$598.00
in the first year.
-------------------
Res. No. 96-3-6
That Diana Paul, Office Assistant, Water Transmission&Distribution, be awarded a total of
$52.45 for suggestion proposal number 1995-076, to include all material for same account
number and item number on one disbursement notice with ticket numbers from delivery slips
listed for verification by Stores Department.
-------------------
By implementing this proposal, it is estimated that the BWL will realize a net savings of$209.80
in the first year.
--------------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolutions 96-3-4. 96-3-5, and 96-3-6 be approved.
Adopted unanimously.
Board Meeting Minutes 37
March 26, 1996
TREASURER/CONTROLLER-CONSUMER SERVICES DIVISION
Res. No. 96-3-7
The following policy governing the use and acceptance of credit cards is adopted.
Use of Credit Cards by BWL Personnel
• The Treasurer/Controller is the person responsible for credit card issuance,accounting,
monitoring, retrieval and generally overseeing compliance with this policy.
• Only designated officers or employees of the BWL may use a credit card for purchase of
goods or services for the official business of the BWL.
• Each cardholder shall submit documentation and adhere to procedures promulgated by
the Treasurer/Controller.
• The written procedure shall address specific accounting controls and the approval
process required.
• Each cardholder is responsible for the protection and custody of the card and shall notify
the Treasurer/Controller immediately if lost or stolen.
• Each cardholder shall return the credit card upon termination of employment.
• The unauthorized use of a credit card by any officer or employee of the BWL is subject
to the appropriate disciplinary policy up to and including termination. In addition, the
BWL may seek criminal prosecution as circumstances warrant.
• The total combined authorized credit limit of the credit cards issued shall not exceed 5%
of the BWL's budget.
• The balance including interest due on credit cards shall be paid within 60 days of the
statement date.
Acceptance of Credit Cards as Payment
• The Director of Consumer Services is the person responsible for monitoring customer
payment by credit card.
• The BWL accepts credit cards as payment for any utility charge or fee, provided the
cashier section processes the transaction.
• Procedures governing the acceptance of credit card payments are embodied in Consumer
Services Support Procedure#P09-54.
• Currently the BWL accepts Visa, Mastercard and Discover.
• The Director of Consumer Services may add or subtract from this list, if the financial
transaction device selected has the same terms and conditions as the above.
The BWL issued a credit card to each director in August 1994. The attached
administrative procedure went to each cardholder at that time.
The BWL began accepting credit card payments in July 1994. Agreements with our
bank, First of America, regarding credit card transactions and Automated Clearing
House(ACH) transactions are in place.
In January 1996, the Michigan Legislature passed Act 266 of 1995 (HB 5019)which
requires a written policy adopted by the governing body. The act grandfathers existing
credit card arrangements, but requires the adoption of a written policy within six(6)
months. The above policy statement and the attached administrative procedures meet
the requirements of this Act.
Page 38 Board Meeting Minutes
March 26, 1996
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolution 96-3-7 be approved.
Adopted unanimously.
Res. No. 96-3-8
Authorize the sale of obsolete Board-owned vehicles and equipment through competitive
bids. The items are BWL units Nos. 2-1, 11-1, 29-1, 58-1, 68-1, 75-1, 88-1, 105-1, 112-
1, 120-1, 130-1, 134-1, 139-1, 146-1, 157-1, 163-1, 166-1, 171-1, 180-1, 184-1, 185-1,
186-1, 187-1, 189-1, 191-1, 194-1, 195-1, 198-1, 216-1, 735-1, 805-1, 813-1.
--------------------
An itemized list is on file with the Corporate Secretary.
--------------------
Res. No.96-3-9
Resolved, that, pursuant to Article E of the Wholesale Water Service Agreement with Delta
Township, $2,909,000 received 2/12/96 from Delta Township, as advance payment for future
BWL facility additions. be transferred to a new General Cash& Securities sub-account entitled
"Water Facilities".
--------------------
Delta Township, as part of their wholesale contract,agreed to pay in advance for certain future
water production facilities required to serve wholesale water. These funds will earn interest until
needed to construct the specific facilities contemplated in the agreement. The funds may be used
for this purpose at any time. The Board must approve in advance any other use of these funds.
The first expenditure ($503,000) is expected in FY 97 or FY 98 Capital Budget.
The Commissioners have previously designated$8 million for uninsured losses (W, E, S)and$3
million for coal supply(E, S) in the General Cash and Securities account.
--------------------
BY COMMISSIONER STROLLE
SECONDED BY COMMISSIONER EVANS
That Resolutions 96-3-8 and 96-3-9, respectively, be approved.
Adopted unanimously.
Board Meeting Minutes 39
March 26, 1996
WATER
Res. No. 96-3-10
That the Board agree to serve water to proposed Water District No. 116, Delhi
Township,as requested by resolution of the Delhi Charter Township Board on March
20, 1996, and that in accordance with the agreement between the Board and the Charter
Township of Delhi dated August 15, 1972, covering the furnishing of a potable water
supply in Delhi Township, the Board advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 116 established by Township
resolution on 3/20/96, and will provide a potable water supply to said district.
2. The Township will be required to make a$9,779.00 non-refundable
contribution-in-aid of construction to cover the charges set forth in the Board's
Policies and Procedures for Water Service for installing the necessary
distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement
(Supplement CXVI)covering the furnishing of a potable water supply in
Water District No. 116.
4. Water mains are to be installed in accordance with the current Board's Policies
and Procedures for Water Service.
Further, that upon receipt of the sum of$9,779.00 from the Township, the project be
approved for installation, and the General Manager and the Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement CXVI)to furnish a
potable water supply in Water District No. 116.
The geographical area of Water District No. 116 is as follows: Beginning at the
northwest corner of M-99/Martin Luther King Blvd.,and Bishop Road,thence
north 350 feet.
To provide a potable water supply within the proposed new district requires the
installation of 350 feet of water main and one fire hydrant at an estimated cost of
$9,779.00
The main extension will serve one(1)commercial customer. One-time connection fees
will amount to$2,975.00. Estimated annual revenue is$500.00.
Water mains to be installed in spring of 1996 following the receipt of the Township's
non-refundable contribution-in-aid of construction and the signing of the agreement.
--------------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-3-10 be approved.
Adopted unanimously.
Page 40 Board Meeting Minutes
March 26, 1996
GENERAL MANAGER'S REMARKS
General Manager Pandy briefed the Commissioners on the following items:
Llovd Teets' Misstatements. Mr. Pandy stated that he would further like to respond to Lloyd Teets'
erroneous information presented during the public comments portion of the agenda. [Mr. Teets had
earlier left the meeting.]
1. Marketing of excess generating capacity: The BWL sells approximately$10 million of wholesale
power annually. In 1995 the BWL's excess power was sold out through the summer. A bid has recently
been requested for a requirement of 1,500 MW,equivalent to three BWL total generating capacities.
Predictions are that excess BWL capacity will be sold out again this summer.
2. Eckert units in operation: The Eckert Moores Park complex has three stacks with a total of ten
units--three electric units each on the west and the center stack, and four steam units on the east stack.
Mr. Teets is erroneous in saving only one unit runs.
3. Delhi Township Franchise: The BWL has a thirty-year franchise as does Consumers Power
Company; they are not exclusive franchises as determined by the township and Michigan law.
City Attorney Completes Review on Conflict of Interest Involving Joe Pandy. A copy of a memo to
the Ethics Board from City Attorney James Smiertka,dated March 22, 1996,was handed out for review.
In summary, the opinion states that no further investigation or inquiry is warranted by the Ethics Board,
as none of the facts presented establish the existence of any ethics violation, either in the selection of
Ottawa Park Associates,Developers(OPAD)or from the Mid-Michigan Water Authority(MMWA) to
date. Mr. Pandy noted that the opinion comes of no surprise because everything that was done in
connection with the Ottawa development was legal,ethical, and above board. Mr.Pandy added that he is
grateful the City Attorney acted quickly and decisively in order to move on a more positive mode.
Commissioner Strolle noted that it is his understanding there is going to be a thirty-day period of
confidentiality to permit a thorough investigation before subjecting persons to public embarrassment.
Mr. Pandy responded that the confidentiality language is part of an ethics ordinance that has not yet been
acted on by the City Council.
Mavor Hollister Comments on Evaluation of the BWL. A copy of a letter was handed out written by
Mayor Hollister to Councilmember Ellen Beal, dated March 22, 1996, clarifying his position on what, if
any, evaluation of the BWL should be conducted. In his letter, the Mayor attempts to clarify his position
and to stress that the information the Council Ways and Means Committee is seeking is already available
from the BWL. The Mayor also indicates he hopes an agreement can be reached on a scope of services
and stands ready to cooperate with any evaluation.
BWL Applies for Self-Assessment and Peer Review. Sue McCormick,Manager of Water Technical
Support, received a letter from the American Water Works Association regarding their Quality Utility
Service program. The BWL had applied for their peer review by other water utility professionals. The
three utilities selected were the Columbus Water Works, Georgia, the City of Winnipeg, Manitoba,
Canada, and the St. Louis County Water Company,Missouri. The BWL hopes to be reviewed by peer
utilities sometime in the near future. Mr. Pandy noted that this would be a good way for the City to get
information by trading services among professionals.
Board Meeting Minutes 41
March 26, 1996
APPA Publication Re: Facts on Public Power. Mr. Pandy mentioned the name of a new publication
from the American Public Power Association(APPA),entitled STRAIGHT ANSWERS To FALSE CHARGES
AGAINST PUBLIC POWER. This document has been about eight months in the making. It discusses issues
dealing with payments in lieu of tares,beating the competition, why public power rates are lower and
other related issues. Copies have been ordered from APPA to distribute to the City Council, the media,
and anybody who wants to know more about public power.
BWL Communications Plan Reviewed. Mr. Pandy summarized the BWL's communication plan for
dealing with false charges about the BWL and public power. A concise BWL reference booklet is being
developed to respond to the various questions raised.
BWL Cash Reserves Compared with Citv's Sewage Disposal System. Mr. Pandy reviewed an exhibit
comparing the BWL's 16.2% cash reserves as of June 30, 1995, with the City's Sewage Disposal System
cash on hand, ranging from 15.4%to 16.6%. The Sewage System pays the City a 1%return,while the
BWL pays the City a 4%return.
Propertv Tax Comparison for Top Ten Taxpayers. With regard to property tax calculations,the
BWL's payment to the City as of June 30, 1995,was$5.8 million, while the top ten taxpayers paid
approximately$3.8 million combined. The BWL represented 154%of what the top ten paid together.
WASHINGTON Post Article on the Lansing Lugnuts. A copy of an article entitled"Will Baseball Come
Through In the Clutch?" appeared in the WASHINGTON POST, March 25, 1996 issue. The article compares
Lansing's new development to the old auto industry.
Press Announcement on Oldsmobile Park Opening. A copy of Mayor Hollister's press announcement
on grand opening celebrations scheduled for the Oldsmobile Park next week was handed out. Stadium
construction workers will be honored on March 31; the first baseball game between Michigan State
University and the University of Michigan is on April 3; and a free community tailgate luncheon will be
held with food, entertainment and giveaways before the Lansing Lugnuts opening day game on Friday,
April 5.
Safetv Bonus to be Restored for Current Fiscal Year. Mr. Pandy reported that at a special
management-union conference, agreement was reached to reinstate the 1%safety bonus program through
this current fiscal year. Under the agreement, the safety bonus will be subject to union negotiation in the
next contract. Based on the BWL's safety record this year, employees would be eligible for the safety
bonus through June 30, 1996.
Total Safety Performance. Mr. Pandy noted that the BWL is having a bad year on safety. The BWL's
total safety performance number last year was 2.5 (a lower number represents a better score)with a goal of
4.0. The current safety incident rate at 9.07 is nearly twice what it was at this time in FY 1995. Factors
contributing to the unfavorable safety performance point to the severity of this winter,employees are
distracted due to the Council's prolonging of the Pensler proposal,and the 1993 downsizing of the
organization resulting in fewer and less experienced employees.
Capital Area United Way Campaign. A letter of thanks was received from Dr. Eva Evans, General
Campaign Chair for the 1995 Capital Area United Way, acknowledging the BWL's time and efforts on
the United Way campaign. The BWL received a bronze award for the employees' outstanding
contibutions and support to the people of this community.
Water Professionals from Korea Visit BWL. A letter of thanks was received from the Community
Volunteers for International Programs for the BWL's hospitality toward the delegation from Korea. This
activity was hosted by Clyde Dugan-Water Utility Director, and Sue McCormick-Manager of Water
Technical Support.
Page 42 Board Meeting Minutes
March 26, 1996
Junior Achievement Efforts Recognized. Congratulations to Brian McLeod whose Junior Achievement
team raised $6,185--they were the top team!
REMARKS BY COMMISSIONERS
No remarks.
EXCUSED ABSENCE
BY COMMISSIONER ROYAL--
SECONDED BY COMMISSIONER STROLLE
That the absences of Commissioner Christian(iii), Lontz(out of town on business)and Pratt
(vacation)be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Royal, the Board adjourned at 6:50 p.m.
A�� 4 LVIV
Mary E. S� Secretary
Filed: March 28, 1996
Marilynn Slade, City Clerk
Page 43
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesdav,April 23, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street, Lansing, Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Evans. Hassler, Lontz, O'Leary, Pratt. Royal and Strolle -7
Absent: Commissioner Christian - 1
The Secretary declared a quorum present.
The Invocation was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all. f= ---
APPROVAL OF MINUTES '
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS 71
That minutes of regular session of March 26, 1996.be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
No persons spoke.
COMMUNICATIONS
No communications received.
Page 44 Board Meeting Minutes
April 23. 1996
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on April 16. 1996, for a briefing on the following items:
1. Economic Development Projects- City of Lansing
2. North Lansing Landfill - DNR Notice of Operating License Denial
3. Related Matters as may properly be brought before the Committee
Present were Commissioners Evans. Hassler. Lontz. O'Leary. Pratt. Royal, and Strollc. Absent was
Commissioner Christian(sick leave).
Ottawa Station Development Progress. Chris Holman, partner of Ottawa Park Associates. Developers
(OPAD), reported that recruitment negotiations for Oldsmobile's Vision Center to the Ottawa Station
project arc continuing. OPAD remains enthused with discussions that have taken place with Oldsmobile
and Vision Service. Inc. It�%as noted that once a firm commitment is made by the potential major tenant,
others will follow. A formal presentation by Oldsmobile with General Motors is still pending.
General Manager Pandy informed the Commissioners that bids for the Ottawa Equipment Removal and
Salvage Project are on hold. The two low bidders for the project have agreed to the time extension and
will honor their bids as submitted on June 14. 1995.
The next progress report on the Ottawa Station redevelopment project will be made at the regular meeting
on April 23, 1996.
Economic Development Projects. Pat Cook, Manager, Economic Development Corporation (EDC),
presented a report of 1994-1995 Economic Development Projects in the City of Lansing, encompassing
the"Old Town. Central Business District. and Pere Marquette." vicinities. She gave an overview of
Mayor Hollister's strategic program in looking for ways to critique and recommend economic
development objectives that the City could implement. Areas of concern included regional cooperation.
effective uses of capital and leveraging additional capital, re-inventing City government, and strategic
planning. As the City looked for ways to have an immediate impact on downtown's development
activities, the concept of an entertainment district blossomed, driving a number of entertainment options
in specific areas of the Central Business District to capitalize on providing unique family-oriented
activities. Ms. Cook pointed to"partnering" efforts in the community involving applicants, business
entrepreneurs. banks and the City jointly brought the projects to fruition. Another development strategy
in operation for over one year involved the EDC setting up a small business loan program with a loan pool
of$1.8 million. She indicated that from eight loans approved by the EDC Board, $1.3 million has been
committed to financing, the equity partner for each project brought in additional $520.000, and a third
piece of financing brought financial institutions. banks, tax credits, housing rehab dollars, historic
preservation dollars, for another$2.5 million in new equity. The total program has encouraged and
leveraged$4.4 million from the eight projects, creating approximately 150 new jobs.
Commissioner Lontz suggested exploring the notion of creating a community economic development
committee as a BWL standing committee to screen projects and dovetail activities with the City. Other
potential areas worth investigating by such a committee might include rates and marketing efforts.
Following discussion, the consensus was to place this item on the Board agenda for more in depth
discussion.
Hoard Meeting Minutes 45
April 23. 1996
North Lansing Landfill - DNR Notice of Operating License Denial. Technical Services Director John
Elaslikar presented an update report on the BWL's action plan to deal with the saturated ash and the
rising water table conditions at the North Lansing Fly Ash Landfill. The Board was first advised of this
concern on September 12. 1995. Following ongoing communication with Michigan Department of
Environmental Quality (DEQ) officials. a joint meeting has been set for April 22, 1996. at which time the
BWL will have the opportunity to show cause. submit a closure plan, and submit an interim response plan
to control or manage the source of groundwater contamination. including how to address the saturated ash
problem. Available options to be discussed with the DEQ include:
• Crcvts Road Landfill
• Motor Wheel Disposal Site
• Commercial Landfill
• Relocate the Ash Onsite
• Long Range Ground Water Remcdialion
In reviewing an economic analysis of North Lansing Landfill alternatives. Mr. Elashkar indicated the
most feasible option appears to be the Motor Wheel Disposal Site(MWDS)at a cost of$4.350.000. with
an anticipated completion date of 1999. Assumptions arc:
• Haul. 500.000 cubic vards(CY)of ash to the Motor Wheel disposal site
• Raise the North Lansing Landfill floor and clay line it
• Install a new monitoring system
This option will be contingent to acceptable negotiations with the MWDS group for the BWL supply of
the 500,000 cubic yards.
Results of the April 22nd meeting with Department of Environmental Quality officials will be presented at
our regular meeting of April 23, 1996.
RELATED MATTERS
Dve High Pressure Pumping Station Incident. Corporate Planning Director Roger Ophaug presented
an overview of a pump failure at the High Pressure Pumping Station on Cedar Street that occurred at 5:30
a.m. on April 3. 1996. A ruptured flange caused the pump failure pouring over one million gallons of
water onto Cedar Street within 25 minutes. Slides were displayed depicting the structural damage caused
at the new pumping station. An investigation team is conducting a through inquiry to determine the
extent of damage and associated costs. Efforts are underway to return the High Pressure Pumping Station
back in service by May 1, 1996. (with pump No. 2 isolated) to assure adequate water reserves.
RFQ to Report on the Value of the BWL. General Manager Pandy advised that 11 consulting firms had
responded to the City of Lansing's Request for Qualifications (RFQ)on the evaluation of the Board of
Water and Light.
Midwest Utilities Pr000se ISO Formation. General Manager Pandy reported that a group of Midwest
utilities have agreed to pursue the dcyclopmcnt of an independent system operator(ISO) that would be
responsible for ensuring fair and reasonable access for all parties to the transmission grid. That formation
was announced by American Electric Power Co., Detroit Edison Co.. Cinergy Corp. (in Ohio and
Indiana), and Cenlerior Energy Corp. (Cleveland Electric and Toledo Edison). An area map was
displayed showing the proposed service territory from West Virginia to Tennessee. to Kentucky. Ohio.
Indiana, Michigan, Illinois. and Wisconsin. It was noted that a missing party to this filing is Consumers
Power Co. The BWL has indicated its interest in joining the ISO through the Michigan Public Power
Agency(NIPPA).
Page 46 hoard Meeting Minutes
April 23. 1996
Emnlovment Agreement for General Manager. General Manager Pandy briefed the Commissioners on
his employment agreement for the benefit of the newer members. The BWL has been advised that WILX-
TV-10 plans to submit a Freedom of Information Act(FOIA) request for employment agreements of all
chief executive officers of agencies with the public sector. This has been prompted by the recent hiring of
the executive for the City's MEGA Authority.
This committee report is presented for information only.
Respectfully submitted.
David O'Leary, Chair Pro Tem
COMMITTEE OF THE WHOLE
BY COMMISSIONER HASSLER--
SECONDED BY COMMISSIONER EVANS
That the Committee of the Whole Report be accepted as presented.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATION
Res. No. 95-4-1
That the Board enter in a Rail Transportation Contract with Norfolk Southern Railroad
(NS) and CN North America (CNNA) subject to approval as to form by the BWL's legal
counsel. The contract particulars are as follows:
1. The term shall be from the effective date(approx. 5-1-96 through
l-31-97).
2. There will be no minimum volume commitment.
3. The rates will be as follows:
From origins in Kenova/Thackcr I Districts
7,000 Net Ton
Single Car Train Load
$16.99 $16.54
From origins in the Thacker II District
7.000 Net Ton
Single Car Train Load
$17.57 $17.05
--------------------
By entering into this contract with Norfolk Southern and CN North America. the BWL
Will be able to expand its base of Spot coal suppliers. This will ensure that Spot coal
opportunities arc maximized.
Hoard Meeting Minutes 47
April 23.1996
--------------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolution 96-4-1 (Administrative)be approved.
Adopted unanimously.
COMMUNICATIONS
Res. No. 95-4-2
Authorize Market Strategies. Inc. to conduct a semi-annual customer attitude survey at a
price not to exceed $22.000.
--------------------
The survey is used to determine the perception of residential customers toward the BWL
and its services. and to measure performance of certain communications programs and
customer satisfaction for the Share the Success program.
--------------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER LONTZ
That Resolution 96-4-2 (Communications)be approved.
Adopted unanimously.
PENSION
Res. No. 954-3
That Jessica M. Gregory. Supervisor in Remittance Processing. be placed on a disability
pension of$1.264.50 per month effective February 1. 1996. She has selected Option IV.
with the provision that after her death, if her husband. Delbert J. Gregory, survives her
he will receive 100%. or$1.264.50. per month for the rest of his life as provided under
Option IV. If her husband predeceases her, the pension amount of$1.264.50 will revert
back to the regular pension amount of$1.350.64 for the rest of her live as provided
under Option IV.
-------------------
Mrs. Gregory has worked for the BWL for 20.35 years and is 46 years of age.
--------------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER O'LEARY
That Resolution 96-4-3 (Pension) be approved.
Adopted unanimously.
Page 48 Board Meeting Minutes
April 23, 1996
WATER
Res. No. 96-44
That the Board agree to serve water to proposed Water District No. 102. Delhi
Township. as requested by resolution of the Delhi Charter Township Board on August 9,
1994. and that in accordance with the agreement between the Board and the Charter
Township of Delhi dated August 15. 1972, covering the furnishing of a potable water
supply in Delhi Township, the Board advised officials of Delhi Township as follows:
1. The Board will accept Water District No. 102 established by Township
resolution on August 9, 1994. and will provide a potable water supply to said
district.
2. The Township will be required to make a$41.332.50 non-refundable
contribution-in-aid of construction to cover the charges set forth in the Board's
Policies and Procedures for Water Service for installing the necessary
distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement
(Supplement CII)covering the furnishing of a potable water supply in Water
District No. 102.
4. Water mains arc to be installed in accordance with the current Board's Policies
and Procedures for Water Scrvice.
Further, that upon receipt of the sum of$41.332.50 from the Township, the project be
approved for installation, and the General Manager and the Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement CII) to furnish a potable
water supply in Water District No. 102.
The geographical area of Water District No. 102 is as follows:
Holbrook Hills Subdivision Phase 3 -Lots 79 through 116
To provide a potable water supply within the proposed new district requires the
installation of 1.670 feet of water main and fire hydrants at an estimated cost of
$41.332.50. Delhi Township acknowledges this portion of the cost of said project. Due
to required water main oversizing BWL's cost of the system extension will be$3,857.00.
The main extension will serve thirty-eight(38) residential customers. One-lime
connection fees will amount to$28.120.00. Estimated annual revenue is$12,920.00
Water mains to be installed in Summer of 1996 following the receipt of the Township's
non-refundable contribution-in-aid of construction and the signing of the agreement.
Prior Board action by Resolution No. 94-8-18. adopted August 23. 1994. to serve water
to proposed Water District No. 102 --Holbrook Hills Subdivision Phase 3. Lots 79
through 116. Delhi Township, is hereby rescinded and superseded by new Board
Resolution 96-4-4.
--------------------
Board Meeting Minutes 49
April 23.1996
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolution 96-4-4 (Water)be approved.
Adopted unanimously.
ADDITIONAL AGENDA ITEM
Confidentiality Agreement with Southern Electric International, Inc. Mr. Pandy advised the Board
on recent developments with Southern Electric about various ways the BWL can work with them in the
development of a power supply project that is economical for our customers. A copy of a standard
confidentiality agreement between the Board of Water and Light and Southern Electric International, Inc.
(Southern Electric). a Delaware corporation, was handed out for review. Mr. Pandy reported that
negotiations with Southern Electric are at a point where they would like to share some proprietary
information with the BWL subject to a confidentiality agreement. In return the BWL would provide them
with information such as heat rates and economics of our generating units for the purpose of enabling the
parties to evaluate the project. This agreement was brought to Mr. Pandy by Southern Electric the
afternoon just prior to the Board meeting (4/23/96), thus the reason for the lateness in placing this item on
the agenda. He noted that the confidentiality agreement is a standard type of agreement between two
utilities to share information that may be mutually beneficial.
Commissioner O'Leary asked if the agreement is for the sharing of information only, or if it is because
Southern Electric is interested in providing power in this area.
Mr. Pandy responded that Southern Electric would like to become a provider of power in the Midwest
generally, not just Lansing but Michigan, Ohio, Indiana, and Illinois. They are a large utility company. a
division of a Southern company of Atlanta. GA.
Commissioner Hassler asked if they have contacted other utilities.
Mr. Pandy said that Southern Electric is working with other utilities in Michigan. They view some
utilities, such as the BWL as friendly to them. and they view other utilities as being unfriendly
competitors to which they would not like to have the information passed on. Mr. Pandy noted that the
BWL would have a lot more to learn from them than they from us.
Commissioner O'Leary asked if there is a downside to entering into this agreement.
Mr. Pandy responded that he is not aware of a downside. The agreement is a formality because Southern
Electric can easilv obtain information on the BWL through a Freedom of Information Act(FOIA) request.
Commissioner Evans asked if political consequences could result from this agreement.
Mr. Pandv responded that he is not aware of any. He said that entering into this type of agreement is a
standard business practice between companies that arc going to share proprietary information that might
be important to competitors. Southern Electric is going to be sharing with the BWL information of which
limited agreements may have been signed with proprietor vendors of technology.
Commissioner Hassler asked what Southern Electric would gain as the result of this agreement.
Mr. Pandy responded that the BWL is the third largest electric utility in Michigan. The two utilities
larger than the BWL are Consumers Power Co. and Detroit Edison Co.. and they are not particularly in a
cooperative mode with utilities like Southern Electric. He clarified that it is not the intent to exchange
Page 50 Board Meeting Minutes
April 23, 1996
information that a private citizen mould be concerned about, such as customer and billing information.
Specific information being discussed with them includes: (1) the net heat rate of the new combined cycle
gas turbine technology being developed. (2) the relative efficiency of a coal-burning plant versus a natural
gas burning plant, and (3) the efficiency that could be realized from combined cycle. producing both
electricity and steam from more modern equipment. Mr. Pandy further noted that Southern Electric is
interested in both working with the BWL and potentially being a supplier of services and technology to
the BWL in the future if it is economical.
Staff Attorney Wilhite interjected that as a general practice. the BWL could not make blanket promises of
confidentiality in good faith, due to the Freedom of Information Act(FOIA). The BWL however. could
make certain promises about exempt and protected information.
Mr. Pandy stated that Southern Electric operates in many states: consequently, they understand FOIA laws
and Sunshine laws.
After a lengthy question and answer period. the following motion was made:
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER STROLLE
To authorize the entering into a Confidentiality Agreement with Southern Electric
International. Inc. for the purpose of holding negotiations on the possible development
of a power supply project that would be economical for BWL customers. In the course
of such negotiations it is anticipated that the parties will disclose to each other certain
confidential proprietary information for the purpose of enabling the parties to evaluate
the Project. The parties wish to enter into this agreement in order to protect the
confidentiality of that information.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
Formation of a Principal Shouuing District. General Manager Pandy reported that Downtown Lansing
organizations. such as Lansing 2000. Inc. and other private sector groups, are in the process of forming a
Principal Shopping District (PSD) in cooperation with the City of Lansing. The PSD. comprised of the
central business center in downtown and the commercial area in Old Town, would be responsible for
activities such as: (1)downtown maintenance services, (2)business recruitment and retention efforts. (3)
maintenance of a downtown database inventory. and(4)advising the city on certain land use/planning
matters, etc. To finance this effort and services, the PSD allows for levying special assessments against
land and/or interests in land as a means to finance services of the PSD. This would replace the special
assessment currently levied for mall maintenance. The rate assessment methodology provides for I 1 cents
per square foot for first floor space and 5 cents per square foot for second floors and above. As an
example, the annual assessment estimate for the Ottawa Street Power Station redeveloped would be
approximately$7.000 per year under the proposed formula. This proposal needs to be worked out with
the City Council and the Mayor.
Commissioner Lontz gave an overview of the intent of P.A. 120 of 1961, amended in 1994. He stated
that a Principal Shopping District would constitute a management board comprised of the majority of the
businesses in the PSD. Two representatives serve on the board--one member representing the City and the
Board Meeting Minutes 51
April 23.1996
other member from a neighborhood adjacent to the PSD. The City then must pass an ordinance to adopt
the district, and a board then comes out of that.
In response to Commissioner Evans inquiry relative to how this new structure would benefit Lansing,
General Manager Pandy stated that this is aimed at revitalizing the downtown and establishing a district
where the necessary levies would be raised to support important marketing activities, which ultimately
help the tax base of the City.
Commissioner Pratt asked if the same amount of money would be raised by the PSD's new assessment as
compared to the mall maintenance assessment.
General Manager Pandy responded that it is his understanding that more money is expected to be raised.
The proposed ordinance to establish the PSD is scheduled for public hearing on April 29. 1996, at 7:00
p.m. in the Lansing City Council Chambers. The City Council would subsequently be considering the
ordinance.
Greater Lansing Labor Council Opposes the Sale of the BWL. A copy of a letter addressed to the
Mayor and the City Council,dated April 11. 1996. was handed out for review. The letter was written by
Glenn H. Freeman. President of the Greater Lansing Labor Council. in support of the BWL and opposing
the buyout of the BWL by Consumers Power Co.
Erickson Station Service Road to Close. General Manager Pandy reported that the BWL has petitioned
the Eaton County Road Commission to abandon a portion of the Erickson Station service road because of
various trash problems due to illegal dumping.
North Lansing Landfill Update. Technical Services Director John Elashkar reported that BWL staff and
outside legal counsel met with the Department of Environmental Quality(DEQ)staff and a representative
from the Attorney General's office on April 22. 1996. The BWL's closure plan was presented to them as
well as the interim response plan to control or manage the source of groundwater contamination,
including how to address the saturated ash problem, as discussed at the April 16, 1996. Committee of the
Whole meeting. BWL options included a combination of relocating the fly ash. the Motor Wheel Disposal
Site, and the Creyts Road Landfill. Legal arguments were presented by BWL representatives as to why
DEQ should not close the North Lansing Landfill. DEQ officials promised to respond within three weeks.
Mr. Elashkar told the Board that negotiations with Motor Wheel arc continuing for the BWL supply of
500.000 cubic yards of ash.
Report on Robert Van Ells Iniury at Erickson Station. General Manager Pandy reported on an
unfortunate accident which occurred on the afternoon of April 23, 1996, involving Erickson Operations
Supervisor Robert Van Ells, who was hit by three weights while working in the power planCs electrostatic
precipitator hopper(dust collector). The dust collector has wires which are part of the electrostatic
mechanism with 25 pound weights on the wires to keep them in tension. While he was on the scaffolding,
one of the wires broke and dropped three weights. The first weight knocked his hard hat off(he was
wearing proper safety equipment): the second weight hit him behind the left ear and gashed his head
about one inch, requiring four stitches: and the third weight hit his hand, causing swelling, but it was not
broken. Mr. Van Ells was transported to St. Lawrence Hospital. where a CAT Scan was taken. After
determining there was no neurological injury, he was released and returned to work on that same
afternoon. Mr. Pandy reported that a team formed to investigate the cause of the accident has identified
that a fixture was molded to the weights to improve the design, but apparently not so improved in terms of
safety. The molded fixture was apparently eroded by the fly ash.
Sparrow Hospital Groundbreaking for New Out-Patient Services. Groundbreaking was held for
Sparrow Hospital's 200.000 square foot addition on the south side of Michigan Avenue and the pedestrian
bridge to connect the existing facilities to the new facility, The project. mainly for out-patient services, is
expected to be completed in December, 1997.
Page 52 Hoard Meeting Minutes
April 23. 1996
FOIA Request RE: General Manager Employment Agreement and Lugnut Expenses. A Freedom of
Information Act(FOIA) request has been received from WILX-TV 10 for a copy of the Employment
Agreement with General Manager Pandy and for the amount of monies spent by the BWL for Lugnut
tickets. the suite at the Oldsmobile Park Baseball Stadium and furnishings. Mr. Pandy said that he
believes the Employment Agreement interest was sparked by the i iring of the MEGA Authority Director.
It is not known what sparked the interest of the baseball suite information. Mr. Pandy told the Board that
all the information requested will be fully disclosed.
Ottawa Street Power Station Redevelopment Update. General Manager Pandy reported that there is
nothing new to report on the Ottawa project, since both John Rock, General Manager of Oldsmobile, and
John Burgess. Vice President of Vision Services. Inc., are out of town.
Trends in U.S. Electricity Rates by Customer Class. General Manager Pandy stated that contrary to
prevailing belief. U. S. industrial electricity rates are not rising in real terms(actual, minus inflation). He
compared U.S. trends to the BWL in electricity rate decreases by customer class from 1985 to 1994 as
follows:
Rates U. S. Trends BWL Trends
Residential - 7% - 24.5%
Commercial - l 1% - 24%
Industrial - 22% - 24.2%
U. S. trend information was obtained from The Electricity Journal, April. 1996. This comparison shows
that the BWL performed better than the U. S. average in reducing rates in a rather uniform manner for all
classes of customers.
Chairman Hassler noted that this would be excellent information to share with customers in the
CONNECTIONS newsletter.
Discussion on Economic Development Involvement. At the Committee of the Whole meeting of April
16. 1996. Commissioner Lontz suggested looking into the formation of a standing committee to focus on
economic development projects and marketing efforts. The objective of the committee would be to:
(1) retain businesses in this area. (2) attract new national or international industries to the City, and
(3) look at long-term project strategies: i.e.. explore a phase 2 approach for the Ottawa Park Associates.
Developers(OPAD) project for the adjacent property between the Ottawa Plant and the Shiawassee
Bridge.
Commissioner Evans agreed with the suggestion, but noted the idea will need to be joined with key
visionary players. She noted that the BWL cannot do this alone.
Commissioner Hassler agreed that the suggestion is a good one, but reminded that the responsibility of the
Board is not to manage. but to receive information from staff as input to set policy. He said that there arc
economic development committees within the City, and the Board needs to capitalize on those by working
with them. He further noted that General Manager Pandy is already a member of the City's Economic
Development Corporation (EDC). from which he receives input.
Commissioner Lontz remarked that the management vs. policy separation issue is a valid point to put on
the table. He suggested merging management and policy-making responsibilities together. As an
example, he said the Citizens' Focus Group formed as an interim committee for providing input to the
Integrated Resource Planning process was an excellent endeavor, on which Board members were also
invited to participate.
Hoard Meeting Minutes 53
April 23, 1996
Commissioner O'Leary stated that he believes it is a staff function to sit down and brainstorm on
economic development strategies in conjunction with other committees within the City. Staff
recommendations should then be brought to the Board for discussion and consideration.
Commissioner Pratt inquired what would have been gained or lost by having an economic development
committee looking at the redevelopment of the Ottawa Street Power Plant.
Commissioner Hassler responded that three subcommittees wvere formed comprised of Commissioners and
staff for a thorough review of the most viable development proposals for the Ottawa Power Plant. He
noted that the reason the subcommittees in this manner were formed was due to a potential conflict of
interest on the part of the General Manager who could not be involved in the evaluation process.
Commissioner Pratt indicated that forming a committee with a focus may be worth further investigation.
It could mean greater staff involvement with economic development issues,which would come back to the
Board for policy decisions.
Commissioner Evans stated that regardless of its composition or the manner in which such a committee is
implemented. it is the thought that someone would focus on the things that make Lansing an attractive
place. She said that if she were constructing a"think tank." she would staff it primarily with people who
arc visionaries and with maybe one or two pessimists. She illustrated that Detroit became an island, and
noted that developments as in Southfield.Troy and West Bloomfield were all in downtown Detroit. She
said she would hate to see that happen to Lansing because the survival of Lansing and the region requires
some visionary thought from people who are not afraid to speak up and take chances.
General Manager Pandy commented that the Economic Development Corporation(EDC)on which he
serves basically is not a think tank. The EDC is primarily a board that administers economic development
funds of the City of Lansing for projects. particularly within the downtown area. The EDC is more of a
governance board reacting to projects that come forward as opposed to what Commissioner Evans is
describing in terms of visionary thinking on what could be done to create development. Mr. Pandy spoke
in favor of a BWL committee focusing on economic development. because utilities have traditionally been
involved in economic development even when they enjoyed monopoly status. They did it because what
was good for the community was good for the utility. He said that more importantly the utility industry
has restructured to a market force situation with retail wheeling, open access. aggregation of loads by
businesses. and shopping. It is more important than ever for the BWL to gear up to compete because
businesses in this community arc in global competition, and they need the business retention help. Mr.
Pandy noted that the BWL has identified the top sixty customers, and marketing people are calling to
assist in retaining their business in Lansing. He said that the BWL has not made a significant budgetary
commitment to this type of endeavor. as the utility is still operating in a traditional monopoly mode.
Commissioner O'Leary asked how the Lansing Regional Chamber of Commerce's Capital Choice
program is involved.
General Manager Pandy remarked that Capital Choice is the Chamber's effort in marketing the Lansing
region through voluntary contributions. The BWL has contributed $10.000 per year to that effort over
the past four years. for a total of$40.000. Capital Choice typically raises about$1.5 million used to
market the Lansing region. They produce informational resources about the tri-county area. and are
involved in finding new opportunities to recruit companies in the Lansing area. The BWL has provided
strong marketing support by estimating utility costs, identifying sites. and working on infrastructure
issues. Mr. Pandy has been on the Capital Choice Steering Council since its inception four years ago.
Their success. however, has not been directly in the BWL's service territory. Capital Choice has brought
projects to Eaton Rapids and Williamston. Although these projects help support the Lansing economy in
terms of people coming to town to shop and dine, the City.of Lansing has not yet landed a large industry.
Page 54 Board Meeting Minutes
Apri 1 23. 1996
many cities have had Capital Choice initiatives for 15 years, and noted that at least the tri-county area is
gaining ground.
Commissioner O'Leary remarked that the point is that the BWL should be cooperating with Capital
Choice in whatever the utility does. whether it is for retaining or attracting new businesses. Whatever
program the BWL comes up with should be part of their marketing plan.
General Manager Pandy noted that the BWL is cooperating through its Economic Development Rider.
The Capital Choice brochure points to low utility rates as one of the top reasons for businesses to locate in
Lansing.
Commissioner Lontz commented that while he was serving on Mayor Archer's staff in Detroit for one
year. their retention and attraction program was not set up by the Chamber, but by Detroit Edison Co. for
a very practical reason, and it was that they had built all their infrastructure in the central city.
Commissioner Lontz also commented that he feels comfortable on the Board when the three utility
directors come to present reports on steam,electricity. and water. They know what they are doing, the
Board knows what decision it has to make, and knows that all the alternatives have been analyzed. But
the Board does not have someone providing statistical information on growth, non-growth,
unemployment. and those factors that relate back to the utilities and the Lansing area. He said the BWL
needs this type of a focus with periodic reports to the Board.
General Manager Pandy stated that the BWL has excellent marketing people in its Marketing
Department. He noted that among them are Mark Taylor and Linda Rasor,who are known throughout
the community. Positive feedback is frequently received from developers, persons from EDC and the
Chamber of Commerce.
Commissioner Strolle supported Commissioner Lontz's suggestion of placing more emphasis on economic
development strategies. He agreed that the BWL needs to be proactive by elevating this function with
resources.
Commissioner O'Leary suggested having someone from the marketing staff make a presentation on what
the BWL is currently doing relative to marketing efforts and promoting economic development.
Commissioner Hassler added that staff suggestions on ways to place greater focus on economic
development issues discussed this evening would also be helpful.
Following discussion, there was consensus that once the Board has a better understanding of what is being
done, a decision can then be made on how it wants to proceed.
General Manager Pandy suggested that in addition to the BWL's Economic Development Rider, certain
areas within the City might be identified for marketing purposes from which there could be a special rate.
such as targeting certain parcels that arc redeveloped.
Commissioner Hassler asked about the status of a proposal presented at a Committee of the Whole
meeting on September 13. 1994. relative to the possible sale of the BWL"s Comfort Street property.
Corporate Planning Director Ophaug responded that negotiations on a potential sale are continuing. The
primary problem is trying to get truck traffic in that area without rebuilding surrounding streets and
buying out a few homes to reroute the streets. Funding issues also need to be resolved. Mr. Ophaug
indicated that a combination of efforts involving the BWL. the interested buyer, the City and others arc
needed to move negotiations forward.
Board?Meeting Minutes »
April 23. 1996
REMARKS BV COMMISSIONERS
Commissioner O'Leary thanked Councilmcmbcr Leeman for attending the Board meeting.
Chairman Hassler commented that the Commissioners look forward to having other Councilmembers
attend meetings of the Board as well.
EXCUSED ABSENCE
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That the absence of Commissioner Christian(sick leave)be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Royal, the Board adjourned at 6:30 p.m.
Mary E. S Secretary
I
Filed: April29, 1996
Marilynn Slade, City Clerk
Page 56
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,May 28, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing, Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Christian, Hassler,Lontz,O'Leary,Pratt, and Royal-6
Absent: Commissioner Evans and Strolle-2
The Secretary declared a quorum present.
The Invocatign was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER LONTZ
That minutes of regular session of April 23, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRN AN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
No persons spoke.
COMMUNICATIONS
No communications received.
Board Minutes Page 57
May 28, 1996
COMMITTEE REPORTS
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on May 14, 1996, to receive staff reports on the following items:
1. Fiscal Year 1997 Budget
2. General Motors Steam Contract
3. Electric Pricing Strategies
4. Economic Development Activities
5. Related Matters
Present were Commissioners Evans, Hassler, Lontz,O'Leary,Pratt,and Strolle. Absent were
Commissioners Christian(Bereavement)and Royal(out-patient surgery).
Fiscal Year 1997 Budget Review. Treasurer Controller Dana Tousley presented details on the proposed
Fiscal 1997-budget, including the Projected Income Statement and cash flow forecast by utility. The
Operations and Maintenance(O&M)budget to budget percentage change is 0.6%higher than last year's
budget. A budget variance analysis indicated the following:
Program/Reason Primary Reason FY97 Budgeted Increase
Net Labor Decrease in budgeted positions&pension cost $ (851,011)
Outside Services and Other Increase in outside services 1, 791,212
Coal&Chemical&Purchased Power Increase in purchased power&chemicals 154,634
Vehicle&Material Costs Increase in material cost 177,016
Transfer to Capital Increase in transfers to capital (401,754)
Total Change Budget to Budget $ 870,097
BY THE CON511TTEE OF THE WHOLE:
Fiscfrc YEAR 1996-97 BUDGET
(Resolution 96-5-1)
RESOLVED, That the annual budget covering Fiscal 1996-97 be approved as presented
(See Attachment A -last page of minutes).
FURTHER RESOLVED, That the capital projects in Exhibit 3 of the budget booklet be
authorized in the amount of the project estimate. Total capital expenditures for Fiscal
1996-97 are limited to the amount included in the budget.
General Motors(GM) Steam Contract. Steam Utility Director Joette Woodard-Yauk reported that final
agreement has not yet been reached on GM's Small Car Group(SCG) Steam Supply Agreement. She
presented a status report on major provisions in the last draft of the Agreement. It was noted that the
BWL is proceeding with construction based on the November 29, 1995,Letter of Authorization from
GM/SCG in the absence of a Steam Supply Agreement and a License Agreement for the steam main and
facilities on GM property. While these agreements are being completed,construction is proceeding in
order to meet a December 31, 1996 service date. Listed below are key points presented:
• Contract awarded to Pipe Systems, Inc. for design and construction of required
steam main and facilities is being amended.
Page 58 Board Meeting Minutes
May 28, 1996
• As a result of efforts during Phase I, the contract cost was reduced by almost$2
million.
• BWL contract amendment will authorize Pipe Systems, Inc. to proceed with Phase
II (actual construction)for lump sum of$8,949,700 for both Phase I and II.
• Total itemized project cost:
Pipe Systems, Inc. Contract $ 8, 949,700
Easement&Right of Way Fees 50, 000
BWL Engineering Cost 399, 824
Communications Equipment 100, 000
Contingency(incls. portable boiler connection) 500, 000
Total $ 9, 999, 524
Included in FY 1997 Annual Budget $ 10, 400,000
Issues yet to be resolved with GM/SCG include:
• Term provision and consequences of termination
• Specific designation of excessive curtailment hours
BY THE COMIvII`TTEE OF THE WHOLE:
DESIGNATED A GREEWENT ADMINISTRATORS
FOR STEAM SUPPL YA GREEwovT WITH GM/Swa CAR GROUP
(Resolution 96-5-2)
RESOLVED, For purposes of administering the Steam Supply Agreement, Steam Utility
Director Joette Woodard-Yauk is hereby designated as the Primary Agreement
Administrator and Peter Thelen, Steam Production Manager, as Secondary Agreement
Administrator. This designation assures smooth contract coordination and grants
authorization to modify conditions of service involving quality issues. A change to
financial obligations would require Board approval.
The Board concurs with issues negotiated to date. The Steam Supply Agreement is targeted to be
presented to the Board for approval at the regular meeting on May 28, 1996.
Proposed rate schedules are submitted under the General Manager's Recommendations,which will be the
subject of a Public Hearing on July 16, 1996.
Future Electric Pricing Strategies. Treasurer/Controller Dana Tousley reported on preliminary
activities that have taken place over the last six months to one year in preparation for possible electric rate
changes. Rate-Making Principles were summarized, and the following BWL Electric Rate objectives were
discussed in detail:
1. Maintain cost based rates.
2. Give consideration to market conditions.
3. Adjust commercial and industrial rates to conform with objectives 1 and 2 (above).
4. Increase revenue(approximately 8.5%)over the next three(3)years.
5. Minimize impact of deregulation on all.
6. Contract with larger customers to encourage retention.
7. Increase flexibility of rate structures.
In presenting his analysis, Treasurer/Controller Tousley reported that the Electric Utility needs an
increase in revenue to partially fund a projected cash flow deficit in FY 1999 and bring the electric utility
rate of return closer to the 4%target.
Board Minutes Page 59
May 28, 1996
BY THE COIv NE=E OF THE WHOLE:
AUTHORIZATION TO DESIGNELECTRIC RATE SCHEDULES
(Resolution 96-5-3)
RESOLVED, That staff be directed to design and propose electric rate schedules that
increase annual revenues 2.0%.
The tentative schedule for the rate-setting process is:
July 16, 1996 -Review proposed rate schedules at the Committee of the Whole mtg.
July 28, 1996 - Set public hearing date
September 10, 1996 -Public hearing to be held
Economic Development Activities. Mark Taylor,Manager of Electric Customer Projects and Marketing,
presented an overview of economic development efforts to attract, enhance, and retain major customers in
the BWL service area. Efforts include:
1. Interface with Lansing Regional Chamber of Commerce on an ongoing basis.
2. Participate in Chamber of Commerce's Regional Economic Development
(RED)Team, which recently organized an economic summit to analyze the
region's performance against other regions where Lansing competes for new
investment.
3. Contribute$10,000 annually(since 1992)to Chamber of Commerce's Capital
Choice program for marketing the Lansing(tri-county)region..
4. Attend trade shows and conferences to bring BWL incentive issues to current
and prospective customers, and to assess marketing issues for the BWL to
provide desired customer products and services.
5. Offer economic development incentives for commercial and industrial
customers when the availability of the incentive is a major factor for the
customer locating or expanding its operations and it benefits the BWL and its
customers.
6. Provide major customer support to ensure they receive maximum benefits.
7. Survey commercial and industrial customers for customer satisfaction and
service enhancements. (See Addendum, to Committee of the Whole Report-
Resolution 96-5-15, regarding survey of commercial customers,page 60.)
Mr. Taylor noted that in the last five years, the BWL has competed for 117 projects and was successful in
acquiring 104 (89%) of them.
An outline prepared by Commissioner Lontz on suggested community and economic development issues
was handed out for review. Following discussion, staff was directed to prepare a strategic plan on BWL
economic development goals for discussion at the July ;6th Committee of the Whole meeting.
Page 60 Board Meeting Minutes
May 28, 1996
(ADDENDUM TO COMMITTEE OF THE WHOLE REPORT)
There being no objection, the following resolution was added to the Committee of the Whole Report:
ELECTRIC SYSTEM CONTROL
Res. No. 96-5-15
That a contract for commercial and industrial customer satisfaction surieying services be
awarded to Synergic Resources Corporation, for a cost not to exceed$84,976. This
surveying effort is intended to establish a commercial and industrial customer satisfaction
benchmark for all these utilities, segmentation of these customers, and an evaluation of
potential new products and services for this class of customer.
This recommendation is a product of the Customer Flexibility and Services Task Force.
This surveying effort is expected to be completed by August, 1996. Other bidders were
Market Probe, Inc.,Market Strategies, Inc., and X energy, Inc. A report detailing proposal
evaluation is on record with the Secretary of the Board.
General Manager Pandy noted that staff plans to personally contact the large industrial customers for
direct input on their needs. Consequently, the not to exceed$84,976 figure will be a lower amount based
on a commercial focus rather than both a commercial and industrial focal point.
Related Matters. General Manager Pandy briefed on the following items:
1. OTTAWA STATION REDEVELOPMENT. Due to out of town commitments,
representatives for Ottawa Park Associates,Developers(OPAD)were unable to
attend the Committee of the Whole meeting to present their progress report on
Vision Center negotiations. An update will be presented at the regular meeting
on May 28th.
2. MIDWEST ISO PRINCIPLES. BWL and Michigan Public Power Agency(N PPA)
staff have attended meetings of the Midwest Independent System Operator
(ISO)--a regional transmission group being organized by the American
Electric Power(AEP) Co., Detroit Edison Co. and others. Midwest ISO
Principles were summarized.
3. CONFIDENTIALITY AGREEMENT. The Confidentiality Agreement with Southern
Electric International (SEI) has been signed. The first meeting with SEI
officials was held at the B WL on May 14th,where discussion on initial ideas
for partnering opportunities took place. SEI has agreed to sign a Not to
Compete Agreement with the BWL.
4. CONFLICT OF INTEREST DISCLOSURE. An updated Conflict of Interest Disclosure
from General Manager Pandy, dated April 30, 1996,was filed with the Board.
5. BWL COMMUNICATION CAMPAIGN. Copies of forthcoming bill stuffers,
communicating the value of the BWL were distributed.
Board Minutes Page 61
May 28, 1996
6. AWWA SELF ASSESSMENT AND PEER REVIEW. The BWL is participating with
the AWWA Water Research Project to benchmark water utilities and determine
customer satisfaction.
7. CUSTOMER ATTITUDE SURVEY. The spring customer attitude survey has been
completed by Market Strategies, Inc. Preliminary results as compared to last
December's survey look very good. Survey details will be reviewed at a future
meeting.
8. STATUS OF PURCHASE AGREEMENT FOR 123 W. OTTAWA PROPERTY. A copy of
a letter to Patrick T. Reid,Reid and Reid Law Offices,from Staff Attorney
Larry Wilhite, dated May 9, 1996,regarding the Contract for the Purchase of
Real Estate at 123 W. Ottawa Street,Lansing was handed out for review. The
letter advises that the contract between Capitol Annex L.L.C. and the BWL is
set to expire on June 30, 1996. Vlahakis Realty Company who submitted a
back-up offer on the property is being notified of the impending contract
expiration date with Capitol Annex. If it is clear that Capitol Annex will be
unable to proceed with closing,and if negotiations with Vlahakis Realty are
unsuccessful by June 30th, the Board plans to explore other alternatives to
dispose of the property.
9. ALTERNATIVE FUELS AND TECHNoLOGIES. Jack Hill reported that the U.S.
Department of Energy(DOE)is seeking an industry partner that will volunteer
information about its generating station for use as a site for a conceptual
design. The site will not be modified,however, it will be given a detailed
evaluation for unit repowering with advanced pressurized fluidized-bed
combustion(APFBC). DOE will supply the funds for a study performed by
Parsons Power Group, Inc. to develop a conceptual design and economic
evaluation using procedures familiar to the BWL. A major benefit of APFBC is
that it would allow higher sulfur coal to be burned more efficiently, resulting in
lower coal costs. The BWL has submitted an application for the APFBC
repowering project designating Eckert Station for the site. DOE plans to make
a decision from among three applicants within a couple of weeks.
Respectfully submitted,
/s/David O'Leary, Chair Pro
CON4NIITTEE OF THE WHOLE
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER PRATT
That the Committee of the Whole Report, including Resolutions 96-5-1, 96-5-2, 96-5-3,
and addendum item 96-5-15, respectively,be approved as presented.
Adopted unanimously.
Page 62 Board Meeting Minutes
May 28, 1996
FINANCE COMMITTEE REPORT
The Finance Committee met on February 27, 1996, to receive a quarterly report from the Internal Auditor.
Members present were Commissioners Christian, Hassler, Lontz, and Royal. Also present were
Commissioners O'Leary and Strolle.
Internal Auditor Kellie Willson briefed the Committee on the following projects in which she has been
involved:
Production Maintenance Inventory. She continues to work with the project team responsible for
establishing an auditable inventory system at Production Maintenance.
Internal Control Evaluation. She designed a project called Systems Assessment.
Governmental Accounting Standards. She has been representing public power on a task force charged
with developing new standards for investment accounting.
The Committee received a special report on accounting standards.
BY THE FINANCE COMMITTEE
GOVERNMENTAL ACCOUNTING STANDARDS BOARD(GASB)
STATEMENT#20,PARAGRAPH 7
(Resolution 96-5-4)
WHEREAS, GASB Statement#20 provides in paragraph 7 that municipal utilities may
apply all FASB(Financial Accounting Standards Board)Statements except for those
that conflict with or contradict GASB pronouncements. GASB emphasizes that this is
"interim guidance." They have made it clear they would like to prevent municipal
utilities from following any FASB Statements issued after November 30, 1989. Adopting
paragraph 7 is the officially sanctioned way to maintain as much comparability as
possible. It is the approach that BWL and most utilities in public power have taken to
date.
NOW, THEREFORE, BE IT RESOLVED, That the Board supports the position taken by
APPA (American Public Power Association)by approving the GASB Statement#20,
Paragraph 7.
Respectfully submitted,
Ernest J. Christian, Chair
FINANCE CONIIvIITTEE
BY COMMISSIONER O'LEARY
SECONDED BY COMMISSIONER PRATT
That the Finance Committee Report, including Resolution 96-5-4, be approved as
presented.
Adopted unanimously.
Board Minutes Page 63
May 28, 1996
GENERAL MANAGER'S RECOMMENDATIONS
ELECTRIC PRODUCTION DIVISION
Res. No. 96-5-5
That the Board authorize$100,000 to cover the cost of installing"sonic horns" in the stacks at
Eckert Station. The request is being made to allow the transfer of the project costs from Eckert
Station Operations&Maintenance Budget to the Capital Budget which allows it to be
depreciated as an asset.
Approximately four years ago the Board purchased and installed, on O&M, sonic horns for the
Moores Park stacks on a trial basis. The horns emit a high energy sound wave that is used to
clean the inside of the stack liners. Presently the horns sound twice daily for 30 seconds each.
From across the river it sounds like a faint fog horn. We verbally told the MDNR and the
neighbors we would install horns in all the stacks if the tests showed positive results. After two
years the number of"fall out" complaints involving flaky ash from the Moores Park stacks has
diminished. The horns were ordered for Eckert Station, using O&M funds, in FY 94/95. Our
plans were to install the horns using BWL forces. Work schedules have not permitted this to
happen. Therefore in January 1996, Production Maintenance hired contractor supplemental help
to install the horns before summer loads.
Commissioner Hassler commented that there seems to be a misunderstanding when budgeting for planned
capital projects. As an example, he noted that the total FY'96 capital budget approved by the Board
should remain unchanged, despite the addition of new unplanned capital expenditures during the year.
The planned capital budget should not be amended to include an increase to cover a major expenditure.
Additional funds for a major expenditure should be found within the current fiscal year budget,
particularly since it is unlikely all expenditures listed in the capital budget would be made during the
fiscal year.
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-5-5 be approved as submitted.
Adopted unanimously.
LEGAL
Res. No. 96-5-6
That the purchase of the following insurance coverage be approved:
Business travel accident insurance from the Lansing Insurance Agency representing Life
Insurance Company of North America,for a 3 year period commencing June 10, 1996, at three
year pre-paid premium of$3,249.00. This would provide a principal sum of$100,000 per person
for accidental death and dismemberment up to$500,000 per accident.
Page 64 Board Meeting Minutes
May 28, 1996
The expiring similar coverage is with the Lansing Insurance Agency representing Life Insurance
Company of North America,for the 3 year period from June 10, 1993 to June 10, 1996, at three
year pre-paid premium of$4,374.00. Other bids received were from the Lansing Insurance
Agency representing the AIG Life Insurance Company at a three year pre-paid premium of
$5,576.00 and the Lyman and Sheets Insurance Agency representing the Commercial Life
Insurance Company at a three year pre-paid premium of$5,449.00.
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-5-6 be approved as submitted.
Adopted unanimously.
PENSION
Res. No. 96-5-7
That Sandra K. Gibbs be placed on a straight disability pension of$610.89 per month effective
September 24, 1994.
Ms. Gibbs worked for the BWL 13.32 years and is 43 years of age.
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-5-7 be approved as submitted.
Adopted unanimously.
STEAM
Res. No. 96-5-8
Authorize the General Manager to execute a Steam Supply Agreement with General Motors
(GM), Small Car Group(SCG), subject to terms and conditions which meet the approval of the
Staff Attorney, Steam Utility Director, and the General Manager.
This contract will provide for extension of BWL steam mains and service to interconnect to
General Motors SCG Plant 6 as authorized by GM's letter of agreement.
Board Minutes Page 65
May 28, 1996
BY COMMISSIONER CHRISTIAN--
SECONDED BY COMMISSIONER O'LEARY
That Resolution 96-5-8 be approved as submitted.
Adopted unanimously.
TREASURER/CONTROLLER
Res. No. 96-5-9
That a Public Hearing on the proposed new General Steam Service Rate No. 3 (see Attachment B
-last page of minutes)be scheduled for July 16, 1996, at 5:30 p.m. in the Board Room.
The-purpose of the Public Hearing is to receive public comment on establishing this new rate
schedule.
BY COMMISSIONER CHRISTIAN--
SECONDED BY COMMISSIONER ROYAL
That Resolution 95-5-9 be approved as submitted.
Adopted unanimously.
WATER
Res. No. 96-5-10
That Resolution 96-4-4 regarding Water District No. 102, adopted on April 23, 1996,be
amended as follows: (Note: New wording in bold and capitalized, changes are stricken out).
That the Board agree to serve water to proposed Water District No. 102,Delhi Township, as
requested by resolution of the Delhi Charter Township Board on August 9, 1994, and that in
accordance with the agreement between the Board and the Charter Township of Delhi dated
August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board
advised officials of Delhi Township as follows:
1. The Board will accept Water District No. 102 established by Township
resolution on August 9, 1994, and will provide a potable water supply
to said district.
2. The Township will be required to make a$41,332.50 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the
necessary distribution facilities to serve said district.
Paee 66 Board Meeting Minutes
May 28, 1996
3. The Board and the Township are to enter into a written agreement
(Supplement CII)covering the furnishing of a potable water supply in
Water District No. 102.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Further, that upon receipt of the sum of$41,332.50 from the Township, the project be approved
for installation, and the General Manager and the Corporate Secretary be authorized to sign the
aforementioned agreement(Supplement CII) to furnish a potable water supply in Water District
No. 102.
The geographical area of Water District No. 102 is as follows:
HeIbFeekHills Subdi-,4sien Phase 3 Lets 79..'.,ugh
CEDAR RIDGE SUBD"ION PHASE 1
-LOTS 1 THROUGH 38
To provide a potable water supply within the proposed new district requires the installation of
1,670 feet of water main and fire hydrants at an estimated cost of$41 '-moo$45,189.50. Delhi
Township acknowledges thAs THE portion of$41,332.50 the-eest OF the cost of said project.
Due to required water main oversizing the BWL's cost of the system extension will be$3,857.00.
The main extension will serve thirty-eight(38)residential customers. One-time connection fees
will amount to$28,120.00. Estimated annual revenue is$12,920.00.
Water mains to be installed in Summer of 1996 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
Prior Board action by Resolution No. 94-8-18, adopted August 23, 1994, to serve water to
proposed Water District No. 102--Holbrook Hills Subdivision Phase 3, Lots 79 through 116,
Delhi Township, is hereby rescinded and superseded by new Board resolution 96-4-4,as
amended by this resolution(96-5-10)..
Res. No. 96-5-11
That the Board agree to serve water to proposed Water District No. 117,Delhi Township, as
requested by resolution of the Delhi Charter Township Board on October 17, 1995, and that in
accordance with the agreement between the Board and the Charter Township of Delhi dated
August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board
advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 117 established by Township
resolution on 10/17/95, and will provide a potable water supply to said
district.
Board Minutes Page 67
May 28, 1996
2. The Township will be required to make a$90,219.25 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the
necessary distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement
(Supplement CXVII)covering the furnishing of a potable water supply
in Water District No. 117.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Further, that upon receipt of the sum of$90,219.25 from the Township,the project be approved
for installation, and the General Manager and the Corporate Secretary be authorized to sign the
aforementioned agreement(Supplement CXVII)to furnish a potable water supply in Water
District No. 117.
The geographical area of Water District No. 117 is as follows:
Arbor Wood Subdivision, Phase 2
Lots 11 through 51
To provide a potable water supply within the proposed new district requires the installation of
3,555 feet of water main and fire hydrants at an estimated cost of$91,836.25. Delhi Township
acknowledges the portion of$90,219.25 of the cost of said project. Due to required water main
oversizing the Board of Water and Light's cost of system extension will be$1,617.00.
The main extension will serve forty(40)residential customers. One-time connection fees will
amount to$29,600.00. Estimated annual revenue is$13,600.00.
Water mains to be installed in Summer of 1996 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
Res. No. 96-5-12
That the Board agree to serve water to proposed Water District No. 118,Delhi Township, as
requested by resolution of the Delhi Charter Township Board on January 16, 1996, and that in
accordance with the agreement between the Board and the Charter Township of Delhi dated
August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board
advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 118 established by Township
resolution on January 16, 1996, and will provide a potable water
supply to said district.
2. The Township will be required to make a$39,352.50 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the
necessary distribution facilities to serve said district.
Page 68 Board Meeting Minutes
May 28, 1996
3. The Board and the Township are to enter into a written agreement
(Supplement CXVIII)covering the furnishing of a potable water
supply in Water District No. 118.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Further, that upon receipt of the sum of$39,352.50 from the Township, the project be approved
for installation, and the General Manager and the Corporate Secretary be authorized to sign the
aforementioned agreement(Supplement CXVHI)to furnish a potable water supply in Water
District No. 118.
The geographical area of Water District No. 118 is as follows:
Chisholm Hills Estates No. 1, Lots 1 through 20
To provide a potable water supply within the proposed new district requires the installation of
1,590 feet of water main and fire hydrants at an estimated cost of$40,738.50. Delhi Township
acknowledges the portion of$39,352.50 of the cost of said project. Due to required water main
oversizing BWL's cost of system extension will be$1,386.50.
The main extension will serve twenty(20)residential customers. One-time connection fees will
amount to$14,800.00. Estimated annual revenue is$6,800.00.
Water mains to be installed in Summer of 1996 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
Res. No. 96-5-13
That the Board agree to serve water to proposed Water District No. 119, Delhi Township, as
requested by resolution of the Delhi Charter Township Board on May 21, 1996, and that in
accordance with the agreement between the Board and the Charter Township of Delhi dated
August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board
advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 119 established by Township
resolution on May 21, 1996, and will provide a potable water supply to
said district.
2. The Township will be required to make a$24,007.50 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the
necessary distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement
(Supplement CXIX)covering the furnishing of a potable water supply
in Water District No. 119.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Board Minutes Page 69
May 28, 1996
Further, that upon receipt of the sum of$24,007.50 from the Township, the project be approved
for installation, and the General Manager and the Corporate Secretary be authorized to sign the
aforementioned agreement(Supplement CXDQ to furnish a potable water supply in Water
District No. 119.
The geographical area of Water District No. 119 is as follows:
Grovenburg Woods No. 4 Subdivision
Lots 70 through 86
To provide a potable water supply within the proposed new district requires the installation of
970 feet of water main and fire hydrants at an estimated cost of$25,740.00. Delhi Township
acknowledges the portion of$24,007.50 of the cost of said project. Due to required water main
oversizing the BWL's cost of system extension will be$1,732.50.
The main extension will serve seventeen(17)residential customers. One-time connection fees
will-amount to$12,580.00. Estimated annual revenue is$5,780.00.
Water mains to be installed in Summer of 1996 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement
Res. No. 96-5-14
That the Board agree to serve water to proposed Water District No. 120, Delhi Township, as
requested by resolution of the Delhi Charter Township Board on May 7, 1996, and that in
accordance with the agreement between the Board and the Charter Township of Delhi dated
August 15, 1972, covering the furnishing of a potable water supply in Delhi Township, the Board
advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 120 established by Township
resolution on May 7, 1996, and will provide a potable water supply to
said district.
2. The Township will be required to make a$21,793.20 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the
necessary distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement
(Supplement CXX)covering the furnishing of a potable water supply
in Water District No. 120.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Further, that upon receipt of the sum of$21,793.20 from the Township, the project be approved
for installation, and the General Manager and the Corporate Secretary be authorized to sign the
aforementioned agreement(Supplement CXX)to firrnish a potable water supply in Water District
No. 120.
Page 70 Board Meeting Minutes
May 28, 1996
The geographical area of Water District No. 120 is as follows:
Lamoreaux No. 2 Subdivision
Nine (9)Lots along Quadrille Lane beginning at Fontaine Trail thence south 780 feet
To provide a potable water supply within the proposed new district requires the installation of
780 feet of water main and fire hydrants at an estimated cost of$21,793.20.
The main extension will serve nine(9) residential customers. One-time connection fees will
amount to$6,660. Estimated annual revenue is$3,060.00.
Water mains to be installed in Summer of 1996 following the receipt of the Township's non-
refundable contribution-in-aid of construction and the signing of the agreement.
BY COMMISSIONER CHRISTIAN—
SEEONDED BY COMMISSIONER O'LEARY
That Resolutions 96-5-10 through 96-5-14, respectively,be approved as submitted.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
Safety Incident Rate Correction. General Manager Pandy reported that in his written report to the
Board, dated May 23, 1996, under item 7, the Safety Incident Rate(SIR) goal was reported as 4.0 or less.
This goal was based on the old Total Safety Performance(TSP)goal. Under a new formula, the Safety
Incident Rate target is 6.92. The BWL's current 8.41 SIR is a lot closer to the goal of 6.92 rather than
the 4.0 TSP.
Equipment Sold From Ottawa Station. Mr. Pandy reported that one(1)used complete steam driven
auxiliary oil pump assembly from Ottawa Station was sold for$20,000 to Union Electric Company. They
have already paid the BWL for this piece of equipment.
MPPA Contract Extended Another Year. At their May meeting, the Michigan Public Power Agency
(MPPA)Power Pool agreed to continue to use the average energy pricing methodology. That will be an
acceptable method for Calendar Years 1996 and 1997. The Power Pool approved the estimated billings
for 1995 as actualized. The 1996 capacity charge of$5.30 per KW month was extended for 1997. The
BWL will continue to sell power and energy to the pool at$30432 per MWK which is at the current
wholesale market.
State Government Needs for Approximately 40,000 Square Feet of Office Space. Mr. Pandy reported
that the Michigan Department of Management and Budget has sent out an inquiry to real estate investors,
developers, and agents indicating that the State is looking for 40,000 square feet of leased office space in
downtown Lansing. Mr. Pandy noted that this would seem to tie into the potential move of the Roosevelt
Building employees who were slated by Capitol Annex L.L.C. for the BWL's Main Office Building. The
Board Minutes Page 71
May 28, 1996
State would like to take possession of the needed space by not later than March 1, 1997, and responses
must be submitted by May 31, 1996.
Problem Discovered With Water and Sewer Billings. General Manager Pandy handed out a memo
addressed to David Wiener, Executive Assistant to Mayor Hollister, from John McComb, the City's
Principal Operations Analyst, dated Mav 24, 1996, regarding a glitch the BWL had in General Motors'
(GM)water and sewerage billing. Mr. Pandy reported that a frozen meter regulator at GM's Plant 6
caused a problem in their water billing. In correcting the problem, it was later discovered that GM's
consumption meter was off by a factor of ten(10). The BWL billing system caught the error and staff
moved to correct it; but in so doing, it was necessary to make field verifications. In the process, GM was
overbilled for water and sewerage. To correct the consumption overbilling, GM has agreed to take the
credit for overpayment over a six-month period. Mr. Pandy stated that of more consequence is the impact
on City sewer rate increases.
BWL to Provide In-Kind Support for Annual Paint Blitz. The BWL has been contacted by the
Lansing Neighborhood Council regarding a"Paint Blitz," coming up in June. The Paint Blitz is done by
volunteers that go out into the community and help needy people paint their homes. This activity is
coordinated by the Neighborhood Council. Mr. Pandy suggested that the BWL consider providing in-kind
service support after work hours or on a weekend by lending equipment such as ladders and bucket trucks
with the understanding that the BWL would provide trained workers to operate the equipment. Following
discussion, the Board concurred with providing in-kind support for the Paint Blitz, noting that this effort
would be an excellent opportunity for the BWL to render a worthwhile service to the community.
Steam Supply Agreement Negotiations With GM Nearing Closure. Steam supply negotiations with
General Motors(GM) held May 28th went fairly well. The negotiating team hopes to settle the contract
by the end of the week.
Ottawa Station Redevelopment Progress. General Manager Pandy reported that a meeting between
John Burgess of Visual Services, Inc. (VSI)and John Rock, General Manager of Oldsmobile, is scheduled
for May 30ih to continue negotiations on bringing the Vision Center to the Ottawa Power Plant
development.
Corporate Planning Director Roger Ophaug Celebrates 35 Years at the BWL. Mr. Pandy announced
that Corporate Planning Director Roger Ophaug has completed 35 years of service to the BWL on May
22, 1996. He was honored by staff at a Lugnut game at the Oldsmobile Baseball Stadium on May 22nd.
REMARKS BY COMMISSIONERS
Update on Pump Failure at Dye High Pressure Pumping Station. Commissioner Pratt inquired on the
status of the April 3rd pump failure at the High Pressure Pumping Station on South Cedar Street.
Corporate Planning Director Ophaug responded that the results of the investigation task force charged
with determining the cause of the flange failure and determining responsibility are due on June 6. The
task force will receive assistance from an outside legal firm and an outside expert in analyzing equipment
failure. Water Utility Director Clyde Dugan added that the High Pressure Pumping Station was placed
back in service on May 1st.
Former Commissioner Jack Sebolt Sends His Regards. Chairman Hassler announced that he recently
spoke with former Commissioner Jack Sebolt. He is doing well and is ready to challenge anyone from the
BWL in a round of golf.
Page 72 Board Meeting Minutes
May 28, 1996
Nominating Committee Appointed. Chairman Hassler appointed the following Commissioners to serve
on the Board's Nominating Committee: Ernest Christian(chair),Peter Pratt, and John Strolle. The duty
of the committee is to choose nominees for the offices of Chair, Vice Chair, and Chair Pro Tern for Fiscal
Year 1996-97. Given the fact that new Board appointments or reappointments have not been made by the
City, some issues on the nominations process need to be resolved. They include:
1. City Charter requirements if new board appointments or reappointment of
incumbent commissioners to new terms are not made by July 1. [A written
opinion prepared by Staff Attorney Larry Wilhite regarding Board of
Commissioners Hold-overs, dated July 20, 1995, has been provided to the
Board.]
2. The Nominating Committee needs to decide if it wants to submit Board officer
nominations before new appointments are named or reappointments to new
terms. [A written opinion prepared by Staff Attorney Larry Wilhite regarding
the Board's Organizational Meeting, dated May 14, 1996, has already been
provided to the Board.]
The Nominating Committee was directed to consider these issues and present its report to the Board at the
first meeting in July [July 23 -designated as the Board's Organizational Meeting]. Staff Attorney Larry
Wilhite was asked to advise the committee on legal matters that may arise.
Discussion on Rotation of Board Officers. Commissioner Lontz expressed that he would hope the
Nominating Committee and the Board begins to frame both short-term and long-term guidelines relative
to rotating officers on the Board. He suggested including language in the Board's Rules of Administrative
Procedure associated with officer nominations and term limits on officer positions. He noted that a
rotational procedure would provide an opportunity for all members of the Board to serve in a leadership
capacity. Specifically, he suggested that the Chairperson nominee would be someone with longevity and
history on the Board. The Vice Chair nominee would be a member with one or two years seniority who
could eventually step into the Chair position.
In response to Mr. Pandy's inquiry relative to present officers serving beyond July 1, Mr. Wilhite
commented that absent a Nominating Committee Report on Board officer nominations, the current
officers would be able to continue serving until such time that the nomination and election process is
completed.
With respect to Board appointments, Chairman Hassler noted that the City Charter states the following
should take place:
• BY MARCH 1 -The City Clerk reports to the Mayor and Council a list of the terms
on City boards due to expire on June 30.
• BY MAY 1 -The Mayor files a list of appointments to the several boards.
• BY JUNE 1 -The City Council acts on board member appointments.
Board Minutes Page 73
May 28, 1996
EXCUSED ABSENCES
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER PRATT
That the absences of Commissioners Evans(vacation) and Strolle(work commitment)be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Royal, the Board adjourned at 6:10 p.m.
MarySo , ecre E. tart
Filed: May 30, 1996
Marilynn Slade, City Clerk
BOARD OF WATER AND LIGHT-LANSING MICHIGAN &raAmu►� A
BUDGET FISCAL YEAR ENDING JUNE 30, 1997 (from Corm�ttee of the ?:hole Report on page 57)
WATER ELECTRIC STEAM TOTAL
PROJECTED INCOME STATEMENT FY 97
OPERATING REVENUE [1] 16,619,350 134,865,362 12,435,237 163,919,949
Operation/Maint Expense 11,498,519 113,123,544 10,342,168 134,964,231
Depreciation Expense 17,798,000
TOTAL OPERATING EXPENSE 152.762.231
OPERATING INCOME 11,157,718
Other Income (2) 5,913,000
Other Expense (3] 2,031,644
NET INCOME - - 15,039,074
NET INCOME AFTER CITY PAYMENT 8,771,300
'RATE OF RETURN-2/96 RATE BASE 3.10%
PROJECTED CASH FLOW FY 97
Restricted Operating Cash 20,581,000
Restricted General Cash 15,720,000
Special Project/Const Cash 26, 00,000
'BEGINNING CASH 7-1-96 [4] 62,501,000
Sources of Cash
Net Income 15,039,074
Depreciation 17,798,000
TOTAL SOURCES OF CASH 32,837,074
SOURCES OF CASH + BEG. CASH 95,338,074
Uses of Cash
Debt Principal [5] 1,281,376
Capital Expenditures [6] 35,075,000
Payment to City 6,267,774
TOTAL USES OF CASH 42,624,150
Restricted Operating Cash 16,870,529
Restricted General Cash 16,348,800
Special Project/Const Cash 19,494,595
ENDING CASH 6-30-97 52,713,924
1
BOARD OF WATER AND LIGHT - BUDGET FOOTNOTES
FISCAL YEAR ENDING DUNE 30, 1997
[1] Revenue based on sales forecast for water (9,846,795 cco, electric (2,566,948 mwh) and
Steam (1,916,149 mlb). These sales levels are 18.2% higher (Delta Twp), 3.0% lower (cooler
summer), and 44.6% higher (GM Plant 6) respectively than the twelve month period ended
January 1996. There are no rate changes, other than GM Plant 6 proposed rates, included in the
budget revenues.
[2] Other Income includes earnings on short term securities and sewerage collection fees.
[3] Other Expense includes interest on the 1989 and 1994 Revenue Bonds, Pension debt,
'Michigan Ash building at Erickson, Steam Debt to Electric, and customer deposits.
[4] Projected June 30, 1996 Restricted Operating Cash balances
Operations and Maintenance Fund S20,131,000
Bond and Interest Fund 450,000
Total Restricted Operating Cash $20,581,000
Projected June 30, 1996 Restricted General Cash balances
Coal Buildup $ 3,500,000
Water Facilities 2,970,000
Uninsured Losses 9,250,000
Total Restricted General Cash $15,720,000
[5] Debt repayment includes principal payment for the 1989 and 1994 Revenue Bonds, Pension
debt, and the Michigan Ash building at Erickson.
[6] Capital expenditures represent total amounts estimated for all Annual Capital Additions,
Planned Capital Projects, and Bond Projects during Fiscal Year 1997.
BOARD OF WATER 3 LIGHT-LANSING, MICHIGAN
BUDGET FOR FISCAL YEAR ENDING JUNE 30, 1997
DIVISION SUMMARY-OPERATIONS 3 MAINTENANCE EXPENSE
Restated for Budget Comparison
Vehicle 8 Material Production Outside Expenses
Net Equipment 8 Fuels/Chem Services to be
Labor/1/ Cher9t§ Suppllg§ Purc-h Power $Others Tgtel Water Electric Steam Distributed Total
ADMINISTRATIVE 953.792 804 64,076 0 18.061.373 19.080.045 51.978 815,013 40.898 18,1 72.156 19,080,i.
ELECTRIC UTILITY 16.175,552 703,365 2.916,699 69.382,402 3,785.387 92,963.405 0 92,669.243 0 294.162 92.963,405
WATER UTILITY 3.484.197 187.192 470.789 2.952.145 1,156,609 8.250,932 8.250,932 0 0 0 8.250,9j.,
STEAM UTILITY 2.175,440 101,387 395.738 5,305.427 1,867,608 9,845.600 0 0 9,845,600 0 9,845,600
TECHNICAL SERVICES 3.374,310 67.416 755.791 0 1.619,539 5,817,056 0 0 0 5.817,056 5,817,056
HUMAN RESOURCES 448,836 0 66.950 0 270,375 786,161 0 0 0 786.161 786,161
CORPORATE PLANNING 161,751 0 33,500 0 47,810 243,061 0 0 0 243,061 243.061
COMMUNICATION 159.106 1.190 56,781 0 285,110 502.187 0 18,350 0 483,837 502,18i
TREASURER/CONTROLLER 1,753.412 69,327 40,463 0 216.630 2,079,832 0 0 0 2.079.832 2,079,832
CONSUMER SERVICES 4,018,432 105.340 114,557 0 971.574 5.209.903 202,881 278.407 30,079 4,698.536 5,209"'1
GRAND TOTAL $32,704,828 $1,236.021 $4,915,344 $77,639,974 $28,282,015 $144.778,182 $8,505,791 $93,781,013 $9,916,577 $32.574,801 $144,778,162
Distributed Expenses:
Spread to Water, Electric, 8 Steam/3/ 2.992,728 19,342.531 425,591 (22,760,850) 0
Vehicle and Equipment Charges/4/ (1,236,021) (1,236.021)
Indirect Costs Spread to Capital Budget 15J (8,5T7,930) (8,577,930)
NET BUDGET BY UTILITY $11,498.519 $113,123.544 $10,342,168 $0 $134,964,231
w
BOARD OF WATER AND LIGHT - DIVISION SUMMARY FOOTNOTES
FISCAL YEAR ENDING DUNE 30, 1997
[1] Net Labor refers to the dollar amount of labor charged to operations and maintenance
expense accounts.
[2] Outside Services and Other include such items as insurance, pension funding, FICA, service
engineers, maintenance contractors, consultants, utilities, travel and conference, dues and
subscriptions.
[3] Administrative, general, and engineering expenses are allocated to the Water, Electric, and
Steam based on such factors as personnel, labor charges, fuel costs, and meters in service.
[4] The cost-of owning and operating vehicles is in RA 425 and in the grand total. Thus, vehicle
charges must be subtracted from total charges to arrive at net operation and maintenance expense.
This procedure complies with our normal accounting practice.
[5] Indirect costs applied to capital projects represents overhead charged to fixed capital and
credited to expense.
Board of Water and Light, Lansing, Michigan P4-faz »enf R Sheet No. S132a
(from General :Manager's Recommendations, Res 96-5-9
on page 65. )
GENERAL STEAM SERVICE
RATE NO. 3
Availability -This rate is available to any customer receiving service from the Board of Water and Light (BWL) steam
transmission or distribution system with a gauge pressure in excess of 100 psi. Service will be provided upon customer
entering into a steam supply contract with the BWL. Terms and conditions of the contract may vary due to customer
requirements and the impact on BWL facilities.
Nature of Service - BWL will supply steam service with a gauge pressure of 100 psi or more. The contract may specify
other service requirements by either party.
Monthly Rate -Per contract terms.
Fuel Cost Adiustment - The fuel cost adjustment shall consist of an increase or decrease of 0.16 ($0.0016) cents per
thousand pounds of-steam billed for each full 0.1 ($0.001) cent or fraction thereof increase or decrease in the average
delivered cost of fuel burned monthly above or below 168.3 ($1.683) cents per million Btu. (A fraction of 0.05
($0.0005) cents or less will not be considered a full 0.1 ($0.001) cent; a fraction of 0.06 ($0.0006) cents or greater will
be considered a full 0.1 ($0.001) cent.) The price per million Btu for each billing month shall be the average delivered
cost of fuel consumed during the preceding calendar month.
Amine Treatment Adiustment - Per contract terms.
Tax Adjustment- Bills shall be increased within the limits of any governmental authority or political subdivision which
levies taxes, license fees, franchise fees, or any other charges against the BWL's property, or its operation, or the
production and/or sale of steam, to offset any such cost and thereby prevent other customers from being compelled to
share such local increases.
Minimum Charge - Per contract terms.
Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance, excluding delayed payment
charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Steam Service which
are incorporated herein by this reference.
Adopted: Effective:
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Page 74
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,June 25, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Evans, Christian, Hassler,Lontz,Pratt, Royal and Strolle-7
Absent: Commissioner O'Leary- 1
The Secretary declared a quorum present.
ThC u.vocation was del'--ed by l hwi awi Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER STROLLE
That minutes of regular session of May 28, 1996,be approved as filed. n
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
No persons spoke.
COMMUNICATIONS AND PETITIONS
Charles(Chuck)J. Clark, Partner, Ottawa Park Associates,Developers(OPAD), briefed the Board on
their progress toward securing major tenants for the Ottawa Station redevelopment project. Discussions
are continuing in positive terms with John Burgess, Vice President of Visual Services, Inc. (VSI). John
Rock, General Manager of Oldsmobile, continues to reiterate his commitment to locating the Vision
Center to the Ottawa Station. Mr. Clark reported that VSI is submitting their proposal to Oldsmobile's
top management on June 27. Oldsmobile officials plan to present a proposal to General Motors(GM)for
a final decision, which could come as early as July 31. Discussion was held with respect to the due
diligence process. Commissioner Hassler summarized GM's approval process indicating that John Rock
has already made preliminary presentations to GM's top marketing officials. with the final decision to be
made by the GM president's council.
Page 75 Board Minutes
June 25, 1996
General Manager Pandy added that in recent conversations with John Rock,Mr. Rock has clearly stated
his position that Oldsmobile remains committed to Lansing in three ways: (1) the LPGA Oldsmobile
Classic, (2)the Oldsmobile Park Stadium, and(3)the proposed Oldsmobile Vision Center at Ottawa
Station. Mr. Pandy reported that a tour of the Ottawa Station has been given to MCMC(MC2) health
foundation officials with regard to a fitness facility. Tours are scheduled with the Small Business
Association of Michigan,Lansing Rotary, Waverly Rotary, Sparrow Hospital, and M-Care's M-Fit
division. In addition, discussions have been held with Thomas J. Coates relative to his interest in
bringing tenants to the OPAD project.
COMMITTEE REPORTS
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on June 10, 1996, to consider the following:
1. Pension Fund Investments, and
2. Fiscal Year 1997 Non-Bargaining Compensation.
Committee Members present were Commissioners O'Leary,Pratt, and Strolle(Chair).
Pension Fund Investments. The Committee's recommendation on Pension Fund investments has been
referred to the Pension Fund Trustees for action.
Non-Bargaining Compensation. The Committee reviewed with Human Resources Director Linda
Gardner and Employment and Compensation Administrator Steve Pollo the conclusions on their analysis
for changes in compensation for Non-Bargaining Unit employees for Fiscal Year 1997. Staff
recommendations were made after(1)conducting an external market survey, (2)analyzing Cost of Living
trends, (3)comparing Non-Bargaining and Bargaining Unit salaries within the BWL, (4)receiving input
from the Non-Bargaining Unit Compensation Committee, and(5)considering the BWL's ability to pay.
After much discussion, the Committee concurred with the following recommendation:
BY THE PERSONNEL COMMITTEE:
Wage and Salary Recommendations
Non-Bargaining Unit
(Resolution 96-6-1)
RESOLVED, That effective July 1, 1996:
1. All current Non-Bargaining Unit salary ranges be increased 2.7%for Fiscal
Year 1997;
2. All current Clerical and Technical(C-T)employees in full-time positions
receive a 2.7%General Increase, and that their performance increases be
administered according to existing policy;
3. That an interim Performance Increase budget be established by Division based
on the Division's Compa-Ratio as outlined in Attachment#5 (attached to end
of minutes); and
Board Meeting Minutes Page 76
June 25, 1996
4. That performance increases for First Line Supervisors(FLS), Professional
Middle-Management(PMM), and Administrative (ADM)employees be
awarded within the guidelines set forth in Attachment#5.
RESOLVED FURTHER, That effective July 1, 1996:
1. All current part-time employees receive a 2.7%General Increase rounded up to
the next full nickel, and.
2. That the method of computing Non-Bargaining Unit bi-weekly salaries be
changed to Annual Salary divided by 2,080;this hourly equivalent rounded to
the nearest penny then multiplied by 80 hours for the bi-weekly rate.
Respectfully submitted,
John Strolle, Chair
PERSONNEL COMMITTEE
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER LONTZ
That the Personnel Committee Report, including Resolution 96-6-1 (Wage and Salary
Recommendations Non-Bargaining Unit)be approved as submitted.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Rea No. 96-6-2
That in accordance with Article II, Section 2.1 of the Board's Rules of Administrative
Procedure, it is recommended that the following list of dates be adopted as the regular
meeting schedule for the Board of Water and Light Commissioners for the ensuing six
(v) uivn&6.
1996
July 23 -Tuesday
August 27 -Tuesday
September 24 -Tuesday
October 22 -Tuesday
November 26 -Tuesday
December 17 - Tuesday
Regular meetings of the Board shall commence at 5:30 p.m.
This schedule is subject to change as a result of date conflicts with rescheduled City
Council meetings.
Page 77 Board Minutes
June 25, 1996
It is further recommended that a notice of the meeting schedule be published in the
LANSING STATE JOURNAL the week of July 7, 1996.
------------
Res. No. 96-6-3
It is recommended that:
I. The Flexible Spending Account(FSA)be continued and that the contract with The
TPA United Health Care Administrators, Inc. (TPA),for administration of FSA be
continued.
II. The following Share the Success(STS)Bonus Options be approved for FY 1996/97:
1. Deferred Cash No change
2. Purchase of Vacation * No change
3. Purchase of Free Choice * No change
4. I.C.M.A. No change
5. FSA(Flexible Spending Account) No change
6. Cancer Care, Intensive Care,AFLAC Plan No change
7. Charitable Contributions ** No change
8. Long Term Disability Program*** No change
* The purchase of vacation and free choice days will be limited to
ten(10) days which includes no more than two(2)free choice
days.
** This year's contributions will be given to one organization, Capital
Area Community Service Energy Bank.
*** Open enrollment for"buy-up"option
Rea No. 96-6 4
It is recommended that:
I. The recommendation for Performance Measures for FY 1996/97 Share the Success
Plan(STS)be approved.
II. The employees be eligible to receive a Performance Bonus of 0-5%as determined by
Final points with total payment to the employees not to exceed the gross savings for
FY 1996/97,
--------------------
Board Meeting Minutes Page 78
June 25, 1996
If all goals and targets are reached, BWL will realize a financial impact of$3,554,293
based on the three financial impact measures. The employees will earn up to 500 points
on a 5.0%STS bonus equal to$1,777,147 with the net financial impact to BWL being
$1,7777146. The other seven(7) measures have a financial impact which is not
quantifiable. (See attached Summary FY 1996/97 STS Performance Measures).
--------------
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolutions 96-6-2, 96-6-3 and 96-6-4 be adopted.
Adopted unanimously.
ELECTRIC SYSTEM CONTROL
Res. No.96-6-5
WHEREAS, the members of this Board appointed William J. Cook, Jr., Director of
Electric System Control, as the Board of Water and Light's representative on the
Michigan Public Power Agency(MPPA)Board of Commissioners and Joseph Pandy,
Jr., General Manager, as the alternate representative,and
WHEREAS, it now appears to be in the best interest of the Board of Water and Light
that the alternate representative assignment be modified.
RESOLVED, that William J. Cook, Jr., Director of Electric System Control, continue
his role as the Board of Water and Light's representative on the MPPA Board of
Commissioners and Douglas K. Wood, Manager of Electric Planning and System
Studies, is hereby appointed as the alternate representative effective July 1, 1996.
RESOLVED FURTHER, that Board Resolution 82-2, as amended, adopted February 28,
1995, is hereby rescinded
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-6-5 be adopted.
Adopted unanimously.
Page 79 Board Minutes
June 25, 1996
PENSION
Res. No. 96-"
That Andrew T. Joostberns, Manager of Underground in Line Construction Department,
Transmission&Distribution Division, be placed on a disability pension of$2,332.77
per month effective June 1, 1996. He has selected Option VI with the provision that
after his death, if his wife Darlene K. Joostberns survives him, she will receive 80%or
$1,866.22 per month for the rest of her life as provided under Option VI. If his wife
predeceases him, the pension amount of$2,332.77 will revert back to the regular
pension amount of$2,646.48 for the rest of his life as provided under Option VI.
Mr. Joostberns has worked for the BWL for 28.81 years and is 53 years of age.
Res. No. 96-&7
That Frances E. Silas, Water Production Helper in Water Production Department,be
place on a disability pension of$608.43 per month effective September 30, 1995. She
has selected a straight disability pension with Workers' Compensation Offset.
Ms. Silas has worked for the BWL for 14.34 years and is 39 years of age.
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER PRATT
That Resolution 96-6-7 be adopted.
Adopted unanimously.
STEAM
Rea No. 96-6-8
That the Board approve a new Coal Sales Agreement with Costain Coal, Inc., for the
supply of coal to the Moores Park Steam Plant. The Agreement particulars are as
follows:
1. The term of the Agreement will be for three(3)years,from January 1, 1997
through December 31, 1999.
2. The quantity of coal to be supplied will be an amount equal to the annual coal
requirements of the Moores Park Steam Plant.
Board Meeting Minutes Page 80
June 25, 1996
3. The quarterly escalation/de-escalation of the price payable under the
Agreement will be based on specific Bureau of Labor Statistics indices and
will be capped at an annual limit not to exceed±2.5%.
4. The price payable under the new Agreement effective January 1, 1997 will be
$25.50 per net ton F.O.B. mine.
By entering in this new Agreement with Costain Coal, Inc., the Steam Utility will
maintain continuity of a consistent and reliable coal supply for Moores Park as it begins
supplying steam under the General Motors Small Car Group Steam Supply Agreement.
Additionally, the price payable effective January 1, 1997 represents a projected$2.50
per ton reduction in price from the price that is projected to be in effect on December 31,
1996.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolution 96-6-8 be adopted.
Adopted unanimously.
TREASURER/CONTROLLER
Res. No. 96-6-9
That the Board pay$6,216,506 to the City of Lansing pursuant to our agreement dated
June 30, 1992.
Further, that all Receiving Fund cash and investments remaining following the above
payment be transferred effective June 30, 1996 to the Special Project Fund for future
capital projects.
General Manager Pandy commented that the City equity payment is an increase of approximately
$380,000(6.5%)over the amount paid last year. This is reflective of the fact that the hot summer last
year contributed to increased electric sales, the cold winter increased steam sales, and increased water
sales was also a contnbuting factor.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER EVANS
That Resolution 96-6-9 be approved.
Adopted unanimously.
Page 81 Board Minutes
June 25, 1996
WATER
Res. No. 96-6-10
Authorize the demolition of the 30 TPD Calciner and associated structures, including
the Lime Outstock Bin, located at 148 S. Cedar Street. This equipment is no longer
used or useful for utility operations.
The 30 TPD Calciner was taken out of service in 1984,but some of the ancillary
equipment was used in conjunction with the 60 TPD Calciner operations. In 1994,the
60 TPD Calciner was declared surplus, and equipment was offered for salvage(Board
Resolution 94-8-16), therefore,the 30 TPD Calciner is no longer needed for utility
operations. Demolition of the 30 TPD Calciner is included in the Fiscal Year 96-97
budget.
Rea No.96-6-11
That the Board agree to serve water to proposed Water District No. 121 Delhi
Township, as requested by resolution of the Delhi Township Board on June 4, 1996, and
that in accordance with the agreement between the Board and the Charter Township of
Delhi dated August 15, 1972,covering the furnishing of a potable water supply in Delhi
Township, the Board advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 121 established by Township
resolution, and will provide a potable water supply to said district.
2. The Township will be required to make a$43,997.80 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the necessary
distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement
Supplement C=)covering the furnishing of a potable water supply in
Water District No. 121.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Further, that upon receipt of the sum of$43,997.80 from the Township, the project be
approved for installation. and the General Manager and the Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement C=) to furnish a
potable water supply in Water District No. 121.
Board Meeting Minutes Page 82
June 25, 1996
The geographical area of Water District No. 121 is as follows:
Woodland Estates Subdivision, Lots 1 through 10
College Road beginning at Dell Road thence north 740 feet.
To provide a potable water supply within the proposed new district requires the
installation of 2,100 feet of water main and fire hydrants at an estimated cost of
$64,673.40. Delhi Township acknowledges the portion of$43,997.80 of the cost of said
project. Due to required water main oversizing,BWL's oversizing cost will be
$8,754.20. BAIL will incur additional cost of$10,337.80 for Alaiedon Township's
portion of the water main which will be recovered in frontage fees as customer's
connect. BWL's total cost will be$19,092.00
The main extension will serve 16 residential customers. One-time connection fees will
amount to$11,840.00. Estimated anni3 revenue is$5,440.00.
Water mains to be installed in Summer of 1996 following the receipt of the Township's
non-refundable contribution-in-aid of construction and the signing of the agreement.
Res. No. 96-6-12
That the Board agree to serve water to proposed Water District No. 2, DeWitt Township,
as requested by resolution of the DeWitt Charter Township Board on June 12, 1996, and
that in accordance with the agreement between the Board and the Charter Township of
DeWitt dated July 14, 1995, covering the furnishing of a potable water supply in DeWitt
Township, the Board advises officials of DeWitt Township as follows:
1. The Board will accept Water District No. 2 established by Township resolution,
and will provide a potable water supply to said district.
2. The Township will be required to make a$13,271.00 non-refundable
contribution-in-aid of construction to cover the charges set forth in the Board's
Policies and Procedures for Water Service for installing the necessary
distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement(Supplement
II)covering the furnishing of a potable water supply in Water District No. 2.
4. Water mains are to be installed in accordance with the current Board's Policies
and Procedures for Water Service.
Further, that upon receipt of the sum of$13,271.00 from the Township, the project be
approved for installation, and the General Manager and Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement II)to furnish a potable
water supply in Water District No. 2.
The geographical area of Water District No. 2 is a follows: 400 feet east of US-27 on
Northcrest.
Page 83 Board Minutes
June 25, 1996
To provide a potable water supply within the proposed new district requires the
installation of 400 feet of water main and one(1) fire hydrant at an estimated cost of
$13,271.00. The main extension will serve one(1)commercial business. A one-time
connection fee will amount to$1,953.00. The estimated annual revenue is$500.00.
Water mains to be installed in the Summer of 1996 following the receipt of the
Township's non-refundable contribution-in-aid of construction and the signing of the
agreement.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER ROYAL
That Resolutions 96-6-10, 96-6-11 and 96-6-12 be approved.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
BWL Recognized for Physical Fitness and Workplace Safety and Employee Wellness. The BWL has
been awarded the 1996 Healthy Workplace Gold Award by the Governor's Council on Physical Fitness,
Health and Sports. The BWL also received a certificate of recognition by the Michigan Chamber of
Commerce for Outstanding Efforts to Promote Workplace Safety and Employee Wellness.
Congratulations goes to Linda Gardner,Director of Human Resources,and her staff.
Status of Purchase Agreement for 123 W. Ottawa Property. Vlahakis Realty has moved ahead to try
to remove the contingencies in their offer for the BWL's Main Office Building(123 W. Ottawa Street).
They inspected the building on June 24 with their contractor on remodeling the BWL office building--
Christman Construction. Vlahakis Realty is also working with Ron Guggemos on financing details. Mr.
Pandy indicated that Vlahakis is sensitive to not interfering with the due process of Capitol Annex
L.L.C.'s (a.k.a. Granger)offer which is pending until the June 30, 1996,expiration date. Mr. Pandy
reported that Granger had asked for a six-month extension, however, management is not recommending
that such an extension be granted at this time. Staff Attorney Larry Wilhite reported that Granger's
attorney,Patrick Reid, indicated they are still interested in the property and may consider negotiating
another deal after June 30th. Following discussion, it was the consensus of the Board to keep its options
open after June 30th in order to consider other alternativees. This matter will be on the agenda for the
Committee of the Whole meeting scheduled July 16, 1996.
Public Hearing on Changes to the Steam Rate Structures Scheduled July 16, 1996. Mr. Pandy
reminded the Board that a public hearing on proposed steam rate structure changes will be held on July 16
at 5:30 p.m. The Committee of the Whole meeting will immediately follow the hearing.
Committee of the Whole to Discuss Economic Development on August 13, 1996. The topic of
economic development will be on the agenda for the August 13th Committee of the Whole meeting.
Board Meeting Minutes Page 84
June 25, 1996
Briefing on FERC Orders#888 and 889. Bill Cook, Director of Electric System Control, presented an
overview of BWL strategies for dealing with the Federal Energy Regulatory Commission(FERC)Order
888-transmission access and FERC Order 889-open access. Under FERC Order 888, public utilities
subject to FERC jurisdiction are required to file uniform transmission tariffs providing for both network
and point-to-point transmission service by July 9, 1996, Affected parties that wish to intervene must do so
within 15 days of that filing. FERC Order 889 -open access, addresses interrelated issues of information
flow associated with FERC's view of a competitive electric industry-Order 888. Following discussion,
the consensus of the Board was to support Michigan Public Power Agency's(NIPPA) intervention in these
filings. The MPPA Power Pool and the BWL's ability to achieve other wholesale power sales are most
seriously threatened by the anticipated transmission filing byConsumers Power Company(CPCo).
CPCo Announces new Economic Development Venture. Mr. Pandy reported that Consumers
Renaissance Development Corporation was formed by CPCo on May 31, 1996, as a nonprofit for the
purpose of accelerating the redevelopment of thousands of unused industrial and commercial brownfield
sites throughout Mic1 igan. This type of econofnic developiileat initiative in the BWL service area is to be
discussed at the August 13th Committee of the Whole meeting.
City-Requests for Proposals (RFP)for BWL Evaluation. Mr. Pandy reported that bid proposals to
evaluate the value of the BWL to the City of Lansing were sent to four consulting firms. Proposals are to
be submitted to the City of Lansing by July 11, 1996.
Seweraee Charee Clarification Statement on BWL Utility Bills. Mr. Pandy reported that due to
continuing confusion among City of Lansing customers regarding sewerage billing, the following
statement will be added under the"sewerage" section of the BWL utility bill:
Your sewer rates are set by Lansing City Council and the sewer system is operated by
the Lansing Public Service Department. BWL provides only billing services.
The billing confusion was reiterated by the BWL's customer focus groups and most recently by the semi-
annual customer attitude survey. The clarification statement is being implemented within the next thirty
(30)days.
Financial Impact of Proposed Sewer Rate Structure on BWL Customers. Mr. Pandy handed out a
tabulation listing two scenarios(which includes both the cost of sanitary and storm sewer)of proposed
sewer rate increases for large BWL water users. He stated that the City's Ways and Means Committee is
considering changing the rate structure for sewer rates. The BWL has communicated by letter to the City
Council and the Mayor its opposition to changing to a flat commodity rate for sewer. He noted that the
faianciai impact to Larger commerciai and industrial customers is unduly burdensome and unnecessary.
Proposed increases of 50-60%in the amount a business must pay for sewer will not encourage any
company to do business in Lansing. Further, a large increase of this nature for the BWL will eventually
trigger an increase in water, electric and steam rates. A large sewer increase means a corresponding
decrease in water consumption. A decrease in water sales will mean lower sewer revenue and lower water
revenue, resulting in more rate increases in the future to recover the same amount of revenue. Mr. Pandy
expressed concern that the proposed sewer rate structure would have a significant consequence to the
BWL since our commercial and industrial customers represent two-thirds(67%)of the BWL load.
Following discussion, the Board agreed to include this topic on the agenda for the Committee of the
Whole meeting on July 16.
Page 85 Board Minutes
June 25, 1996
Postal Rate Increase Effective July 1, 1996. Mr. Pandy reported that due to efforts by the Consumer
Services Division staff and the Information Systems Departs vmL the BWL will see a reduction in its
annual postage cost by$49,920 (from 26.7 cents to 23.5 cents). This is an overall reduction in postage
cost of$101,400 per year. The opportunity was presented this year by the U.S. Postal Service offering a
reduced postage rate for business bar coded mail. This enhancement will be implemented with the July
Levelized Payment Plan release.
Levelized Payment Plan to be Fully Implemented September 1996. Mr. Pandy reported that July and
August will be dedicated to piloting the "Levelized Billing" system and making any necessary
adjustments. Full implementation with promotional advertising is scheduled for September 1996. An
average monthly utility bill(electric, water, sewerage)will be calculated to arrive at 12 equal monthly
payments which will be projected to equal actual consumption. The 12th month will be the balancing
month and any debit/credit will be adjusted in that month's bill. Exclusions to the plan include utility
billings which are not for core services. This improvement was based on feedback received from
customer focus groups. The Consumer Services Division and Information Systems Department were
congratulated for their efforts in this enhancement.
Water Tapping Team Miss Qualifying in Final Round. The BWL water tapping team did not qualify
at this year's tournament in the American Water Works Association's(AWWA)annual conference in
Toronto.
Benefit Analysis for Suburban Retail Water Service Reviewed. Mr. Pandy reported that the net
economic benefit of providing retail water service to suburban communities during the period from FY
1972 through FY 1995 is$7,504,420, far exceeding the expenses. Mr. Pandy pointed out that the analysis
shows clearly that the BWL should be serving the suburbs; that retail water service to the suburbs is not
being provided for free; and that expenses are covered plus a return,which benefits Lansing customers.
Share the Success at 373 Points through May, 1996. The Share the Success score has made another
dramatic gain in May, increasing 53 points to reach a total of 373 points.
BWL Picnic a Great Success. The annual BWL Picnic held June 15 was attended by over 1,600 people.
The BWL hosted the Linemen's Rodeo for Michigan this year with strong showing by our team consisting
of Jeremy Adcock, Ron Davis and James Chandler. Our team won third place in the Secondary Event
among a large showing of 16 teams from Consumers Power,Detroit Edison and other utilities, including
teams from Indiana.
"Lui ut"installation on BWL Chimngy_Comp eted. Mr. Pandy reported that the stainless steel
"Lugnut" symbol on the BWL chimney located near Michigan Avenue and South Cedar Street was
installed on June 20 and very well received.
REMARKS BY COMMISSIONERS
Commissioner Royal provided copies of handouts of filings by Consumers Power Company and Detroit
Edison Company to the Michigan Public Service Commission in the matter of the recommendations of the
Michigan Jobs Commission for electric and gas utility reform. Also handed out was a document entitled,
ELECTRIC UTILITY INDUSTRY OVERVIEW as prepared by Detroit Edison. It presents a general outlook
on how investor-owned utilities are defending the restructuring debate.
Board Meeting Minutes Page 86
June 25, 1996
Commissioner Pratt requested information on how staff evaluates the performance of Kheder&
Associates' lobbying services. He noted that in the midst of the restructuring controversy at the regulatory
level, he has not seen anything from Kheder on this issue, other than the legislative bill tracking report,
which does not seem to be germane to the restructuring debate. Mr. Pandy responded that a report on
lobbying services will be forthcoming.
Commissioner Lontz stated that he thought the letter to Senator Dianne Byrum, written by Electric
System Control Director Bill Cook, relative to a May 28th joint House Public Utilities and Senate
Technology and Energy Committee meeting, was excellent. Commisssioner Lontz commented that he
believes the Senator's position on having the legislature take the lead in restructuring the electric utility
industry puts this issue in the right arena instead of it being a regulatory administrative piece. He noted
that this process would provide a better opportunity for a fair hearing. Commissioner Lontz also
expanded on Commissioner Pratt's comments regarding lobbying services. He stated that he would like to
see additional legislation listed;for example, the brownfield site legislation, related Renaissance zone
legislation, and bills pertaining to economic development strategies.
Commissioner Evans commented that restructuring and electric competition was the theme of the
American Public Power Association(APPA)national conference. She gave an overview of topics covered
at workshop sessions,which included discussions on restructuring and public power political advocacy,
and retaining and attracting large customers in a competitive market. She also expressed the need for the
Board and management to discuss in greater depth the implications of electric utility restructuring, and its
effect on the BWL.
Commissioner Christian commented that he was pleased to see a positive rate of return for all three
utilities,as reflected in the cash position of the Budget Variance Analysis sheet May, 1996.
EXCUSED ABSENCES
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER ROYAL
That the absence of Commissioner O'Leary(out of the state)be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Royal, the Board adjourned at 6:58 p.m.
IMary*E-. a, Secretary
Filed: June 27, 1996
Marilynn Slade, City Clerk
(From Committee of the Whole Report
ATTACEMM#rl
PERFORMANCE APPRAISAL PROCEDURE
Fiscal 1997
_. Divisions will receive a PI budget allocation based on the Fry 1997 Compensation
Plan. Allocations will be based on the ratio of the division's average
salaries in the covered group to the average 2/3 level for the covered
positions within the division.
�. A suggested array will be provided which will correlate PI increase percentages
based on performance expectations and the employee's position within the range.
3. Proposed individual increases must be held within the suggested range based on
the person's performance and position in the salary range.
Further, the Division may not exceed the total PI budget dollars allocated to
it. Therefore, Division managers should meet prior to submitting
recommendations in order to assure rating consistency and compliance with these
requirements.
Performance criteria may be group-based objectives for the Responsibility
Area/Division, or they may be individually rated. Suggested performance rating
definitions are included on the Suggested Individual Percentage Allocation
Chart. As an alternative, the performance criteria may be based on individual
MR/PS's. However, those RA's choosing to use MR/PS's should compute the
employee's rating and only submit the recommended increase corresponding to
provisions #3 and #4 above. (See the attached Rating Equivalency Chart which
correlates the MR/PS rating values to the values which will be applied under
the proposed system.
�. Rating Computations:
o Assess the individual employee's performance level: R1 unacceptable, no
_ncrease (less than 60k of performance expectations achieved) ; #2 below
performance expectations (61t-80t of performance expectations achieved) ;
#3 meets performance expectations (81t-100V of performance expectations
achieved) ; 44 exceeds performance expectations (over loot of performance
expectations achieved) ; or 45 significantly exceeds performance
expectations (Over look of performance expectations achieved AND
contributes something with long-lasting organizational impact.
0 Performance Assessments should be outlined in a one page report written
by the Manager and covering the employee' s performance _,r. various job-
related areas. Some suggested characteristics to consider are attached.
O To arrive at the percentage range for the PI increase: 'look at the
intersection of the performance expectations column with the row
representing the individual employee' s position in the saiary range.
0 Specify on the Performance Assessment what percentage increase you
recommend for that employee. Percentages must be within the margin for
the employees position in the salary range and performance ''evel. As
Guidance, you should prorate the percentage within the range eased on the
extent to which the employee achieved the expectations as indicated
above.
�11 ratings ust be received by Duman :esources for a ✓isicn prior to
processing. -his is necessary to assure compliance with the cverail PI budget.
ATPACMMZNp#&2
Compa-Ratio Chart
RANGE
MAXIMUM
STEP A Employees more than 51 above the middle third.
105%
Employees who exceed the middle third max up to 5t
more than middle third.
STEP B
loot
2/3 MAX
Employees who are at got of the middle third uv to
STEP C Middle third.
901,
Employees who make between the range minimum and got
[STEP D of the 2/3 max salary.
RANGE
MINIMUM
EQUATION: Individual Salary
X 100
Normal Max [top of middle third] of pay grade
i
ArrAGIUIT fr3
DEPARTMENT PI ALLOCATION CHART
DEPT COMPA-RATIO PI % BASE SALARY BUDGET
<86%
4.7%
86-91.99% 4.2%
92-95.99% 3.7%
96-99.99% 3.2%
>100% 2.7%
INDIVIDUAL PERCENTAGE ALLOCATION CHART
MAXIMUM
A-1 A-2 A-3 A-4 A-5
of
0 0% 0% 0-3.0% 3.0-4.0%
B-I B-2 B-3 B-4 B-5
0
/0 0% 0-3% 3.0-4.0% 4.0-5.0%
100%
C-1 C-2 C-3 C-4 C-5
0
0 0-2.7% 2.7-4.0% 4.0-5.0% 5.0-6.0%
90%
D-i D-2 D-3 D-4 D-5
0
/0 0-3.0% 3.0-4.5% 4.5-5.5% 5.5-6.5%
86%
RANGE
MINIMUM
Performance Not fully Meets Exceeds Significantly
significantly meeting perfb=,mcc p=ormance exceeds
- -
below performance expectations expectations performance
expectations: expectations (81%-100% of (Over 100% of expectations
(less than 60". (61%-80% of performance performance (Over 100% of
of objectives performance expectations expectations oerformance
achieved) expectations achieved). achieved). expectations
unacceptable--no achieved). achieved AND
increase.
contributes
something of
long-lasting
organizational
impacn.
I.Y-' e
� t l `. .�
t .
1 � ,
Page 87
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,July 30, 1996
The Board of Commissioners met in rescheduled regular session at 5:30 p.m., in the Main Office
Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman
Hassler.
Present: Commissioners Christian,Hassler, Lontz, O'Leary,Pratt,Royal and Strolle-7
Absent: Commissioner Evans- 1
The Secretary declared a quorum present.
The Invocation was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER STROLLE
That minutes of regular session of June 25, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TINM SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
No persons spoke.
COMMUNICATIONS AND PETITIONS
A letter from Councilmember Rick Lilly,dated July 29, 1996, was received and read into the record after
the Committee of the Whole Report was considered. (See Committee Reports,below.)
ANNUAL ORGANIZATION
Chairman Hassler announced that the July Board meeting is generally the time for the annual
organizational meeting to elect officers. The annual meeting is being postponed until the regular meeting
in August, at which time the Nominating Committee will announce nominations for Board officers.
Board Minutes Page 88
July 30, 1996
COMMITTEE REPORTS
COMMIE OF THE WHOLE REPORT
(Resolution 96-7-1)
The Committee of the Whole met on July 16, 1996, to receive staff reports on the following items:
1. Customer Attitude Survey
2. Sale of BWL Main Office Building and Associated Parking Lot
3. Customer Flexibility and Services Task Force Report
4. Charitable Foundation
Present were Commissioners Christian,Hassler,Lontz,O'Leary,Pratt,Royal,and Strolle. Excused
Absence: Commissioner Evans(out of town).
Customer Attitude Survey, Andrew Morrison of Market Strategies presented the key findings of the
latest customer attitude survey administered in May. The results demonstrate that communication efforts
over the past six months have been successful and improving positive perceptions. It was noted that
increased communication about the sewage issue,the Board's comparatively low rates, and other topics on
which a majority of customers are misinformed would be useful. The Board's attention also needs to be
directed at service reliability and restoration performance,both which show decreases in positive response.
Sale of BWL Main Office Building, General Manager Pandy reported that the Capitol Annex L.L.C.
Agreement to purchase BWL real estate at 123 W. Ottawa Street and parking lot at 221 N. Capitol
Avenue,Lansing,expired on June 30, 1996,according to its terms. A letter from the law firm of Reid and
Reid on behalf of Capitol Annex,requesting that the termination date of the Agreement be extended,was
received for consideration. Following discussion, the Commissioners denied an extension of time,
thereby,declaring the Agreement null and void. A competing offer submitted by Vlahakis Realty
Company,on November 27, 1995,was discussed with Paul Vlahakis and Jim Vlahakis, who were in
attendance to respond to questions regarding their Buy and Sell Agreement.
Following discussion,the Commissioners concurred that it would be in the BWL's best interests to open
the sale to competitive bidding giving all developers an opportunity to bid. Staff was directed to issue a
public request for proposals to interested developers on the purchase of the BWL Main Office Building
and associated parking lot with proposals to be opened at 2:00 p.m.on July 29, 1996. The Board plans to
evaluate and select the best proposal at the July 30, 1996 Board meeting.
Customer Flexibility and Services Task Force Report. Consumer Services Director Terry Graham
updated the Commissioners on the wank of the('n-ctnmer Flev_itjilifv and Services Tack Force forr-nwi to
determine what service enhancements the BWL could offer to customers. Two subcommittees were
formed that represent various BWL service related departments;namely, (1)Residential Flexibility and
Services and(2)Commercial and Industrial Flexibility and Services.
Customer Service Manager,Ken Turner, presented the findings of the Residential Flexibility and Services
Subcommittee. It was noted that as the electric industry accelerates toward deregulation, "Customer
Choice"will be an expected option for all utility customers. Feedback from focus group sessions
consisting of BWL employees/retirees, residential/commercial customers,developers/contractors and
community opinion leaders was obtained as they shared their perceptions of customer needs and wants
from the BWL. Customer choice service plans, incorporating an alternative strategy,of providing new
service enhancements to increase customer satisfaction were outlined. Following discussion and input
from the Commissioners,the concept in principle was endorsed. Staff is to report back with an
implementation plan once the process of finalizing details is completed. Mr. Turner also presented a
concept to re-establish a modified residential light bulb program. Following discussion and input from
Page 89 Board Minutes
July 30, 1996
the Commissioners, staff was requested to continue exploring the best partnering effort for implementing
the proposed residential light bulb program.
Charitable Foundations. General Manager Pandy introduced the notion of instituting a BWL charitable
foundation as a subset of the Capital Region Community Foundation. The purpose of BWL participation
in the Foundation is to share in a common commitment to improve conditions in this community. Mr.
Pandy reported that as a donor,the BWL would be able to provide guidance to the Foundation in
determining the purpose for which gifts are to be used. A second charity program suggested is the
"Change for the Community"program through which customers may"round up"their utility bill
payments to the next highest dollar. The difference between the amount of the bill and the rounded-up
payment would be donated to charitable programs in the service area. This program would provide seed
money in addition to other sources of funding that can be found for the Foundation.
Following discussion it was the sense of the Commissioners that direct allocation of BWL funds to
charitable programs is not consistent with the mission of the BWL. They encouraged staff to explore a
type of a"Change for the Community"program which would generate funds donated by BWL ratepayers.
Staff was fiirtber direveet to inv4�gjante what nther nrblic rower utilities are doing regarding charitable
-<- _
contributions and/or a round-up program.
Respectfully submitted,
Dave O'Leary, Chair Pro Tern
COMMITTEE OF THE WHOLE
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER PRATT
That the Committee of the Whole Report, (Resolution 97-7-1),be approved as
submitted-
Adopted unanimously.
The following communication received July 30, 1996, from Councilmember Rick Lilly, Chair,Planning
and Development Committee,Lansing City Council,was read:
To: Mr. Phillip Hassler, Chair
Board of Water and Light Commissioners
Dear Mr.Hassler:
I woulu bate to.vyu�..�it your aven.-dunce at dhe ne..4a and
Development Committee which is to convene on Tuesday, August 6, 1996,at 4:00 p.m.
At this time we will be discussing the property located at 123 West Ottawa Street. It is
our hope that we can all get on the same page relative to this important project in the
City of Lansing.
If you have any questions or comments, please do not hesitate to contact me at your
convenience.
Sincerely,
Rick Lilly, Chair
Planning and Development Committee
Lansing City Council
Discussion on this topic was deferred until later on the agenda(see page 96 of 7/30/96 minutes).
Board Minutes Page 90
July 30, 1996
GENERAL MANAGER'S RECOMMENDATIONS
LEGAL
Res. No.96-7-2
Purchase the following insurance coverage:
Pension and Welfare Fund Fiduciary Responsibility Insurance for the three year period
from September 1, 1996 to September 1, 1999 from Lyman and Sheets Insurance
Agency representing the Aetna Casualty and Surety Company of America at an annual
premium of$20,628.
This was the best evaluated bid of those received.
The Board's expiring similar insurance coverage is with the Lyman and Sheets
Insurance Agency representing The Aetna Casualty and Surety Company for an annual
premium of$I8,500. The policy limit would remain the same at$10 million with a
deductible of$10,000. The policy enables the Board of Water and Light to choose to
continue coverage after the policy ends for acts occurring during the policy period It
also provides for defense costs in addition to the policy limits rather than part of the
policy limits.
Bids were also received from Lansing Insurance Agency representing the Cincinnati
Insurance Company at an annual premium of$17,000,and from Voss Insurance
Services representing Federal Insurance Company at an annual premium of$35,000.
Res.No.96-7-3
Retain the services from CoreSource for the Workers' Compensation Self Insurance Program for
the three(3)year period from September 1, 1996 to September 1, 1999,at an annual cost of
$16,300.
It is further resolved that the services may be negotiated for an additional one to three year period
beyond the 1999 expiration, subject to contract ratification by the Board of Commissioners.
This was the best evaluated bid of those received.
The BWL's expiring contract is with CoreSource at an annual cost of$20,964. Human Resources
is very satisfied with the level of services being provided by CoreSource and recommends
continuation with CoreSource as a service company. Changing companies can result in
decreased administrative efficiency and is not justified by the price differential in bids.
Bidders used different approaches to establish fees. Several had an annual administrative flat
charge and/or medical review fees in addition to the per claim fees. The cost of each bid is
estimated below.
Page 91 Board Minutes
July 30, 1996
Estimated Estimated
Service Company Cost Service Company Cost
Eagle Claims Management $14,300 Citizens Management $24,230
J. P.Bender&Associates 15,750 Meadowbrook Insurance Group 25,000
CoreSource 16,300 HCM Claims Management 26,185
Crawford and Company 18,679 ASU Risk Management Services 29,000
Gallagher Bassett Services,Inc. 20,097 Sedgwick of Michigan, Inc. 33,490
Mackinaw Administrators,LLC 34,090
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That Resolutions 96-7-2 and 96-7-3, respectively,be approved.
Adopted unanimously.
STEAM
Res.No.96-74
That the BWL retain the services of Kattner/FVB District Energy,Inc. (Kattner)to
assist the BWL in evaluating and optimizing the various District Energy options under
consideration as part of the BWL's Integrated Resource Plan(IRP). Estimated cost of
Kattner's service is$9,750.
The recommendation to utilize Kattner/FVB District Energy, Inc.,is based on a sole
source proposal. Kattner is recognized in the industry for their experience and
specialized expertise in all aspects of the development and design of District Energy
systems. Retaining of Kattner's service to assist in the IRP process will help assure
identification of the optimal District Heating and Cooling system configuration to meet
the future needs of the BWL and its customers.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-7-4 be approved.
Adopted unanimously.
Board Minutes Page 92
July 30, 1996
TREASURER/CONTROLLER
Res.No.96-7-5
Purchases, Annual Commodity.
Authorize the purchase of the estimated 12 month requirements of the following
commodities for use in Dye and Wise Road Water Conditioning Plants, Moores Park
Steam Plant,and Eckert and Erickson Electric Generating Plants. Pricing is firm
through July 31, 1997. Commodity quantities are released as required over the 12
month period. All commodities were competitively bid in accordance with the BWL
Purchasing Policy and Procedures. Below is a summary of the lowest and best evaluated
bids.
Annual Quantity Annual Cost
Commodity (Est.) Unit Cost (Est.) Vendor
Hydrofluosilicic Acid 200 tons $138.90/ton $ 27,780.00 Kaiser
Aluminum&Chem. Corp.
Pebble Quicklime 15,000 tons 59.90/ton 898,500.00 Marblehead
Lime Co.
Soda Ash 1,800 tons 153.32/ton 275,976.00 General
Chemical Corp.
Granulated Salt 320 tons 69.25/ton 22,160.00 Akzo Salt, Inc.
Sulfuric-Acid 528 tons 61.00/ton 32,208.00 Marsulex,Inc.
Caustic Soda 145.6 tons 379.08/ton 55,194.05 K.A. Steel
Chemicals, Inc.
Sodium Hypochlorite 85,000 gal. .5291/gal. 44,973.50 K.A. Steel
Chemicals,Inc.
Sodium Hexametaphosphate 36,000 lbs. .61/lb. 21,960.00 Haviland
Products Co.
Total: $1,378,751.55
Res.No.96-7-6
That the Reserve for Uncollectible Accounts be increased from$615,000 to$750,000
effective June 30, 1996.
The increase of$135,000 is primarily due to increased active and inactive account
balances which may have to be written off in the future.
Res.No.96-7-7
Resolved,to adopt the following rate schedule effective August 15, 1996: General
Steam Service-Rate No. 3 (rate schedule attached).
ATTACHMENT TO RESOLUTION 96-7-7
Board of Water and Light, Lansing, Alichigan Sheet No. SB2a
GENERAL STEAM SERVICE
RATE NO. 3
Availability -This rate is available to any customer receiving service from the Board of Water and Light (BWL) steam
transmission or distribution system with a gauge pressure in excess of 100 psi. Service will be provided upon customer
entering into a steam supply contract with the BWL. Terms and conditions of the contract may vary due to customer
requirements and the impact on BWL facilities.
Nature of Service-BWL will supply steam service with a gauge pressure of 100 psi or more. The contract may specify
other service requirements by either party.
Monthly Rate - Per contract terms.
Fuel Cost Adiustment -The fuel cost adjustment shall consist of an increase or decrease of 0.16 ($0.0016) cents per
thousand pounds of steam billed for each full 0.1 ($0.001) cent or fraction thereof increase or decrease in the average
delivered cost of fuel burned monthly above or below 168.3 ($1.683) cents per million Btu. (A fraction of 0.05
($0.0005) cents or less will not be considered a full 0.1 ($0.001) cent, a fraction of 0.06 ($0.0006) cents or greater will
be considered a full 0.1 ($0.001) cent.) The price per million Btu for each billing month shall be the average delivered
cost of fuel consumed during the preceding calendar month.
Amine Treatment Adiustment-Per contract terms.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political subdivision which
levies taxes, license fees, franchise fees, or any other charges against the BWL's property, or its operation, or the
production and/or sale of steam, to offset any such cost and thereby prevent other customers from being compelled to
share such local increases.
Minimum Charge- Per contract terms.
Delayed Pavment Charge- A delayed payment charge of 5% of the unpaid balance, excluding delayed payment
charges, shall be added to any bill which is not paid on or before the due date.
Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Steam Service which
are incorporated herein by this reference.
Adopted: July 30, 1996 Effective: August 15, 1996
Page 93 Board Minutes
July 30, 1996
These rates were the subject of a Public Hearing on July 16, 1996. The new rates apply
to steam used on or after August 15, 1996.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER LONTZ
That Resolutions 96-7-5, 96-7-6,and 96-7-7,respectively,be approved.
Commissioner O'Leary asked for a clarification on the Reserve for Uncollectible Accounts
(Resolution 96-7-6).
Treasurer/Controller Tousley responded that it is a valuation reserve based upon an annual analysis of
outstanding accounts receivable balances. The increased reserve,effective June 30, 1996,represents an
inc-maw Mir. Tousley rotai;that the reserve of S6115,000 vvas onigiDaliy estaiuiisucd in Ame; 11794
and represented.51%of retail operating revenues. Since that time,retail operating revenues have
increased over 31%. The new reserve in the amount of$750,000 represents.47%of current retail
operating revenues.
Following discussion,the motion was adopted unanimously.
FATE
Res.No.96-7-8
That Resolution 96-5-11,regarding Water District No. 117,adopted on May 28, 1996,
be rescinded and replaced with the following revised resolution:
That the Board agree to serve water to proposed Water District No. 117, Delhi
Township,as requested by resolution of the Delhi Charter Township on October 17,
1995,and that in accordance with the agreement between the Board and the Charter
Township of Delhi dated August 15, 1972, covering the furnishing of a potable water
supply in Delhi Township,the Board advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 117 established by Township
resolution on 10/17/95,and will provide a potable water supply to said district.
2. The To_mchir Sy;ll hP regmiired to r a_ke a $36,506.25 no -refundable
contribution-in-aid of construction to cover the charges set forth in the Board's
Policies and Procedures for Water Service for installing the necessary
distribution facilities to serve said district.
3. The Board and the Township are to enter into a written agreement(Supplement
CXVII)covering the furnishing of a potable water supply in Water District No.
117.
4. Watermains are to be installed in accordance with the current Board's Policies
and Procedures for Water Service.
Board Minutes Page 94
July 30, 1996
Further,that upon receipt of the sum of$36,506.25 from the Township,the project be
approved for installation,and the General Manager and the Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement CXVII)to furnish a
potable water supply in Water District No. 117.
The geographical area of Water District No. 117 is as follows:
Arbor Wood Subdivision,Phase 2
Lots 16 through 28 and Lots 35 through 42
To provide a potable water supply within the proposed new district requires the
installation of 1,475 feet of watermain and fire hydrants at an estimated cost of
$36,506.25.
The:*rain extension will serve twenty-one(21)residential customers. One-time
connection fees will amount to$15,540.00. Estimated annual revenue is$7,140.00.
Water District No. 117 is being revised due to major surveyor grade discrepancies
and bad weather conditions allowing developer to only construct approximately
one-half of project for this construction year.
Watermains to be installed in Summer of 1996 following the receipt of the Township's
non-refundable contribution-in-aid of construction and the signing of the agreement.
Res.No.96-7-9
That the Board agree to serve water to proposed Water District No. 122,Delhi
Township,as requested by resolution of the Delhi Charter Township Board on April 2,
1996,and that in accordance with the agreement between the Board and the Charter
Township of Delhi dated August 15, 1972,covering the furnishing of a potable water
supply in Delhi Township,the Board advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 122 established by Township
resolution,and will provide a potable water supply to said district.
2. The Township will be required to make a$37,125 non-refundable contribution-
in-aid of construction to cover the charges set forth in the Board's Policies and
Procedures for Water Service for installing the necessary distribution facilities
to serve said district.
3. The Board and the Township are to enter into a Written agreement(Supplement
C=I)covering the furnishing of a potable water supply in Water District 122.
4. Watermains are to be installed in accordance with the current Board's Policies
and Procedures for Water Service.
Further,that upon receipt of the sum of$37,125 from the Township,the project be
approved for installation,and the General Manager and the Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement CXXII) to furnish a
potable water supply in Water District No. 122.
Page 95 Board Minutes
July 30, 1996
The geographical area of Water District No. 122 is as follows:
College Heights Estates Phase 5,Lots 87 through 109
To provide a potable water supply within the proposed new district requires the
installation of 1,500 feet of watermain and fire hydrant at an estimated cost of$37,125.
The main extension will serve twenty-three(23)residential customers. One-tune
connection fees will amount to$17,020. The estimated annual revenue is$7,820.
Watermains to be installed in Summer of 1996 following the receipt of the Township's
non-refundable contribution-in-aid of construction and the signing of the agreement.
BY COMMISSIONER STROLLE—
SECvi i ED BY Cuivx`lt ltSSIOIti�R PRATT
That Resolutions 96-7-8 and 96-7-9,respectively, be approved.
Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
To be discussed after the General Manager's Remarks.
RESOLUTIONS
There were no resolutions.
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
Harken v. Board of Water and Light Case Closed. General Manager Pandy reported on the status of
the James E. Harken v Lansing Board of Water and Light(BWL)case. It was noted that outside counsel
(Cholette,Perkins&.Buchanan,P.L.C.)communicated that the claimant did not appeal Judge Grattan's
decision in favor of the BWL mailed June 6, 1996,which became final July 6, 1996. This file is now
considered closed. Staff Attorney Wilhite noted that the BWL still has the option of taking legal action
against Mr. Harken for violation of the B WL's Settlement Agreement. A decision as to whether or not to
pursue this option has not yet been made.
Board Minutes Page 96
July 30, 1996
Commissioner Royal asked for a background overview on this case. Staff Attorney Wilhite noted there
were several actions involved,and briefed on the initial"Whistle Blower" action and the Workers'
Compensation claim.
Steam Clock-A Gift From the Rotary Club of Lansing. General Manager Pandy noted that the July
1996 issue of BWL PIPELINE reports on the construction of a 28-foot tall steam clock to be located in
Wentworth Park at the corner of Michigan and Grand Avenue. The clock is planned to be completed in
time for this year's Silver Bells in the City celebration held in late November. He thanked the City
Council for approving the$150,000 gift from the Rotary Club of Lansing.
Chairman Hassler Writes Article on the Reason for the BWL's Success. General Manager Pandy
called attention to the recent PIPELINE article written by Chairman Hassler, "The Reason for Our
Suc ." Everycne was e.xuxaged to read this excellent piece.
BWL Employee Calvin Jones Honored at the Lugnuts Game. General Manager Pandy recognized
Calvin Jones, Supervisor in Construction Services,for being named the"Community Lugnut"this month.
He was saluted at the Lugnuts game for his community involvement. Mr. Jones has been instrumental in
organizing the annual 5K run out by the Erickson Station. The$5,000 proceeds from that event went to
the"Night-Out-Against-Crime."
Bids for Purchase of BWL Real Estate(Main Office Building and Associated Parking Lot). General
Manager Pandy handed out copies of the tabulation of bids received July 29, 1996,on the purchase of 123
W.Ottawa Street Main Office Building and 221 N. Capitol Avenue parking lot. He noted that Capitol
Annex,L.L.C. (a.k.a. Granger Companies)submitted a certified check for$60,000 and again asked for an
extension of their March 28, 1995,contract for purchase through February 28, 1997 [see also Committee of
the Whole Report on page 88 of 7/30/96 minutes]. Mr.Pandy noted that their proposed bid at$5,157,375 did
not comply with the BWL's minimum bid of$5,200,000 as stipulated in the Request for Proposal(RFP).
Mr.Pandy also noted that Vlahakis Company sent a letter stating that they would honor their proposal at
$5,200,000 per their Buy and Sell Agreement,dated November 27, 1995.
General Manager Pandy referred to a copy of a letter written to the Lansing City Council by Reid and
Reid on behalf of Capitol Annex L.L.C., dated July 25, 1996, requesting their assistance in the matter of
the extension of time. Mr. Pandy took issue to the third paragraph of their letter,which states:
We have requested an extension of time from the Lansing Board of Water and Light to
the Contract for Purchase which expired by its terms on June 30, 1996. The only
response we received was a refund of the$60,000.00 earnest money deposit we put out
for this project,
Mr.Pandy reported that several responses were sent to Patrick Reid with copies to Gary Granger. Most
notably at Mr.Pandy's request, Staff Attorney Larry Wilhite wrote to Patrick Reid of Reid and Reid Law
Offices on May 9, 1996, to advise him that time was about to elapse on the Contract for the Purchase of
Real Estate at 123 W. Ottawa Street,Lansing,between Capitol Annex,L.L.C. and the Board of Water and
Light. A copy of that letter was handed out for review. Mr.Pandy noted that when the letter was mailed,
Capitol Annex had less than sixty(60)days remaining on their contract. The letter clearly included a
reminder of: (1)the June 30, 1996,expiration date;(2)the three contingencies to be cleared up prior to
the expiration date; and(3)that if Capitol Annex is unable to come to closing, the BWL would proceed
with plans to dispose of the property as well as return the earnest money in the amount of$60,000.
Page 97 Board Minutes
July 30, 1996
Staff Attorney Wilhite reported that he had several conversations with Patrick Reid closer to the contract's
expiration date. Mr. Wilhite indicated that he also takes issue with Mr. Reid's criticism of the Board for
not taking action on their request to extend the Capitol Annex Contract for Purchase beyond the June 30,
1996,termination date. Mr. Wilhite also indicated that in a telephone conversation with Pat Reid, Mr.
Reid specifically requested that the Board not take formal action one way or another,as it could cause
more problems.
Commissioner Pratt referred to the fourth paragraph of Mr.Reid's letter to the General Manager,dated
July 25, 1996,and stated that until today he does not recall seeing anything in writing that explained the
reasons for Capitol Annex not being able to fulfill the terms of the contract. Commissioner Pratt noted
that an explanation at this late date seems unusual,and asked if Mr.Reid ever declared in writing,prior to
July 25,as to why Capitol Annex could not carry out the conditions of the contract.
Mr. Pandy responded that to the best of his knowledge,he has no recollection of a written explanation.
Commissioner Hassler reminded that the BWL paid$1.8 million to the City in 1992 for the land on which
the Main Office Building stands(123 W. Ottawa Street). He stated his opinion that the Contract for the
Purchase was between the BWL and Capitol Annex,L.L.C. He expressed disappointment over a potential
political issue which could result with the City. He stated that the question now becomes whether or not
the Commissioners want to take a prudent business position and pass judgment tonight or postpone until
after the Board meets with City Council's Planning and Development Committee to discuss the proposed
sale.
Commissioner Royal asked if Pat Reid and Gary Granger(Capitol Annex)were aware that the Board was
going to discuss the contract termination matter at the Committee of the Whole meeting held July 16.
General Manager Pandy responded that Pat Reid was aware of that meeting and knew his letter addressed
to the General Manager,dated July 16, 1996,requesting an extension of the Contract to Purchase was
going to be read at the meeting.
Commissioner O'Leary stated that he believes everything discussed at the Committee of the Whole
meeting,July 16, 1996,was done in a proper and fair manner.
Discussion was held relative to Capitol Annex not meeting RFP specifications which required a minimum
bid of$5.2 million.
Commissioner Hassler commented on the importance of setting a time limit for satisfying all
contingencies set forth in the agreement. He pointed out that Vlahakis Companies is also entitled to a
time frame to put together a plan in a like manner given to Capitol Annex. Commissioners O'Leary and
Lontz agreed that a closing date beyond the date of City Council approval is needed.
Commissioner Strolle stated that he would like to hear from representatives of Vlahakis Companies on
their specific plan to develop the BWL office building. Commissioner Pratt interjected that he found it
interesting that neither of the bidders--Capitol Annex and Vlahakis Companies—fulfilled the terms of the
RFP by not responding to all the questions. He stated his opinion, that neither one of the developers has
demonstrated the purchase can be performed
Board Minutes Page 98
July 30, 1996
Commissioner Strolle gave an example of what he would like to see happen. In the Ottawa
Redevelopment Project,an evaluation process was put in place to assure the key factors are in place, such
as the developer's financial strength and feasibility of the project. By meeting with all the interested
parties,the process gives some assurance that the selection is based on the most viable developer. He
further stated that before a decision is made, he would feel more comfortable to have representatives from
Capitol Annex and Vlahakis Companies appear before the Board to answer all the questions specified in
the RFP.
In connection with performance,Commissioner O'Leary stated that it would not be unusual to request a
Letter of Credit in the amount of$1 million for the purchase. On a general program,80%would probably
be borrowed with a 20% ($1 million)down payment required to demonstrate financing can be obtained.
Chairman Hassler suggested temporarily tabling this item to allow John Rock, General Manager of
Oldsmobile,and Charles(Chuck)Clark,partner of Ottawa Park Associates,Developers(OPAD) -
(who had just entered the meeting)to present a status report on Ottawa Station negotiations. The
Commissioners concurred. Discussion will resume after the Ottawa update presentation.
Oldsmobile General Manager,John Rock,Reports on Status of Ottawa Neeotiations. John Rock,
Manager of Oldsmobile,updated the Board on progress toward locating Oldsmobile's Vision Center in
the Ottawa Station. He noted that progress toward reaching a decision was hindered due to the recent
announcement that Oldsmobile and other General Motors(GM)automotive headquarters will consolidate
offices at Detroit's Renaissance Center,and secondly, that Vision Services,Inc. (VSI)has also been slow
in submitting a business case for operating the Vision Center at the Ottawa Building. Mr. Rock noted that
with the recent corporate relocation announcement, it makes it even more important that Oldsmobile
retain a corporate presence in Lansing by moving the Vision Center into the Ottawa Station. VSI has
committed to him that they will submit its business plan by August 7. Once the plan is received, the
project still would need to go through GM's corporate approval process,which could take from 45 to 60
days. Mr. Rock proposed that if the Board can give OPAD another 60 days to come forward, he would
retum with a progress report on September 24.
Commissioner O'Leary asked Mr.Rock for his opinion on the probability of the success of GM moving
its Vision Center to the Ottawa Plant on a scale of 1 to 10(with 10 being the top). Mr.Rock responded
that he feels the success of the Vision Center project would be at 6 to 7. He added that if this project
comes to fruition, it could be more of an anchor point than the Oldsmobile Ball Park. Vision Center
training programs would draw people from all over the country which would result in additional money
for the community.
Commissioner Lontz noted that for the first time in many months, he has a clear picture of what is
happening with this project. The Commissioners thanked John Rock for his interest and involvement in
the Ottawa development project and for coming this evening to report on the status of negotiations.
Page 99 Board Minutes
July 30, 1996
Following discussion, Commissioner O'Leary moved, seconded by Commissioner Strolle:
RESOLLMON EXTENDING NEGOTIATIONS
FOR OTTAWA STATION DEVELOPMENT PROJECT
(96-7-10)
RESOLVED,That Ottawa Park Associates,Developers(OPAD)be granted an
extension of time until the regular meeting of September 24, 1996,to present its report
on negotiations with major tenants for the Ottawa Station development project.
Adopted unanimously.
CONTINUATION OF DISCUSSION
Sale of Real Proueriv ai 123 W. Gtiawa Sireeic arsa 22i N. Cauir.►i avenue. It was the consensus of
the Board to bring the matter concerning the purchase of the Main Office Building and associated parking
lot off the table for consideration.
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER LONTZ
RESOLVED,That the offer submitted by Vlahakis Companies be accepted subject to
meeting the following conditions upon execution of the Contract for the Purchase of
Real Estate:
1. Providing the sum of Fifty Thousand Dollars($50,000) as earnest money paid
to the Board of Water and Light(BWL);and
2. Providing the sum of One Million Dollars($1,000,000)in the form of a Letter
of Credit issued in the name of the BWL.
The Contract is to terminate if it is not closed one hundred and twenty(120)days from
the date the sale is approved by the Lansing City Council,but not to exceed
December 16, 1996.
Commissioner Pratt noted that December 16 is four months away, meaning the City Council would have
to approve the sale within two weeks.
BY COMMISSIONER ROYAL:
To add a friendly amendment to the motion proposed by Commissioner O'Leary:
That Vlahakis Companies provide a response to all the questions in the Request for
Proposal.
Commissioner Strolle stated that it may be good public relations on the Board's part to delay approval
until after the August 6 meeting to get input from the Council's Planning and Development Committee.
Commissioner O'Leary stated his opinion that the letter from Capitol Annex to the City Council, dated
July 25, 1996, is inappropriate at this stage. Commissioner Hassler added that responsibility for this
decision rests with this Board first,and then is subject to review by the City Council.
Board Minutes Page 100
July 30, 1996
General Manager Pandy pointed out that he heard Paul Vlahakis say at the Committee of the Whole
meeting of July 26 that with a 120-day limitation,there would be a big risk on his part in effort and
money. Mr.Pandy noted he is not sure that many developers would agree to a 120-day contract
termination with an open political question. Commissioner Pratt agreed that 120 days would give the
developer two weeks to get Council approval,which seems an inadequate time period.
Commissioner O'Leary pointed out that it should be the developer's responsibility to work with the City
Council to get approval.
Staff Attorney Wilhite reminded the Commissioners that a public hearing would have to be scheduled by
the Council at least thirty(30)days from the date the Board's resolution and signed agreement is filed
with"idle C y Clet',�. ;teas►4utices ila., 120 days down to ninety(90)days.
Based on the public hearing requirement, Commissioner Strolle offered a second friendly amendment:
That the Contract time schedule be changed to the original six(6) months instead of
four(4)months.
General Manager Pandy noted that six(6)months would take the Contract to approximately
January 30, 1997.
Chairman Hassler invited CouncHmember Harold Leeman,who was in the audience,for his input
regarding the matter being discussed.
Councilmember Leeman suggested that action not be taken at this time until after the Planning and
Development Committee(comprised of Councilmembecs Allen, Novak,and Lilly(Chair),is given an
opportunity to discuss this topic with the Board.
Chairman Hassler responded that with the facts on the table and from a business point of view,it is
obvious what the decision should be. Commissioner O'Leary agreed that it is the Board's responsibility to
select the best developer to purchase the 123 W. Ottawa Street property.
With respect to extending the contract deadline to six months,Commissioner Lontz concurred with
Commissioner O'Leary's concern of giving in to developers on deadline dates. He stressed that the BWL
should be telling developers what,when and how it wants the terms of an agreement.
Commissioner O'Leary noted that the key factors involved with the developers are: (1)renovation of the
BWL office building, (2)leases,and(3)financing.
BY COMrAISSIONER CHFUSTIAN—
SECONDED BY COMMISSIONER PRATT
That the original motion be rescinded.
Adopted unanimously.
A new motion was introduced:
Page 101 Board Minutes
July 30, 1996
BY COMMISSIONER O'LEARY--
SECONDED BY COMMISSIONER LONTZ
RESOLUTION SELECTING DEVELOPER FOR THE PURCHASE OF
REAL PROPERTY AT 123 W. OTTAWA STREET AND 221 N. CAPITOL
(96-7-11)
RESOLVED,That the offer submitted by Vlahakis Companies be accepted subject to
meeting the following conditions upon execution of the Contract for the Purchase of
Real Estate:
1. Providing the sum of Fifty Thousand Dollars($50,000) as earnest money paid
to the Board of Water and Light(BWL);and
2. Providing the sum of One Million Dollars($1,000,000)in the form of a Letter
of Credit issued in the name of the BWL;and
3. Answering the questions on the Request for Proposal.
The Contract shall terminate if it is not closed by December 16, 1996.
The motion was adopted by the following vote:
Yeas: Christian,Hassler,Lontz,O'Leary,Royal—5
Nays: Pratt, Strolle—2
Commissioner Evans was absent for this vote.
Chairman Hassler advised that due to a schedule conflict, he would not be able to attend the meeting of
the Planning and Development Committee scheduled for Tuesday, August 6,at 4:00 p.m. Following
discussion,it was agreed that a representative from the Board would attend the meeting for Commissioner
Hassler. Staff Attorney Wilhite was requested to accompany the Board representative to provide a brief
chronology of events which have transpired over the past year.
REMARKS BY COMMISSIONERS
Commissioner Lontz inquired on the status of the 10 million gallon underground reservoir landscaping
and lighting project.
General Manager Pandy reported that this project, located between Cedar and Larch Streets across from
the Dye Water Conditioning Plant,is well under way. Excavation and masonry work have started and the
final landscaping phase of the project will be the last to be completed.
Board Minutes Page 102
July 30, 1996
EXCUSED ABSENCES
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTLAN
That the absence of Commissioner Evans(out of the date)be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Co ininiss ico n v iinyal,ulU-Board ndJOUIL-1.it ai S'.5 Ei.aai,
Mary F?' Y"-, S catY
Filed. August 1, 1996
Marilynn Slade,City Clerk
Page103
MINUTES OF BOARD OF COMMISSIONERS'MEETING i
LANSING BOARD OF WATER AND LIGHT
_ :.)
Tuesday,August 27,1996 -', I if !-r'"
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman Hassler.
Present: Commissioners Christian,Hassler,Lontz,O'Leary,Pratt,Royal and Strolle-7
Absent: Commissioner Evans- 1
The Secretary declared a quorum present.
The Invocation was delivered by Chairman Hassler.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMNIISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That minutes of rescheduled regular session of July 30, 1996,be approved as filed-
Adopted unanimously.
REPORT OF THE NOMINATING COMMITTEE
THE NOMINATING COMMITTEE, to whom was referred the duty of making nominations for officers
of the Board of Commissioners for the ensuing fiscal year, or until a successor is duly elected,whichever
last occurs,
REPORTS AS FOLLOWS: The nomination process was preceded with informal nominations solicited
from each Commissioner. This input was considered in developing the final slate of nominations for
officers. And,finally, an election was held by mail-in ballot.
Election of Officers
(Resolution 96-8-1)
The Nominating Committee submits the following election results:
for Chair-Elect -David O'Leary
for Vice Chair-Elect -Diane Royal
for Chair Pro Tem-Elect -William Lontz
The newly elected officers will not begin their duties until the two pending Board vacancies are filled with
new appointments currently under consideration by the City Council.
Board Minutes Page 104
August 27, 1996
Staff Reappointments_
(Resolution 96-8-2)
Further,the Nominating Committee recommends the reappointment of the following Board-appointed
staff for the ensuing fiscal year, or,until a successor is appointed,whichever last occurs:
Director and General Manager -Joseph Pandy, Jr.
Internal Auditor -Kellie Willson
Corporate Secretary -Mary Sava
Respectfully submitted,
Ernest Christian, Chair
Peter Pratt
John Strolle
NOMINATING COMMITTEE
There being no objection,the Report of the Nominating Committee,including Resolutions 96-8-1 and
96-8-2,was approved as read.
PUBLIC COMMENTS
CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED
THE OPPORTUNITY TO ADDRESS THE COMMISSIONERS REGARDING ANY ITEM ON THE
AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS.
ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO AT
THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMENT.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications received.
COMMITTEE OF THE WHOLE REPORT
(Resolution 96-8-3)
The Committee of the Whole met on August 13, 1996,to receive staff reports on the following topics:
1. Electric Rates
2. Economic Development
Present were Commissioners Christian,Evans,Hassler,Lontz,O'Leary,Pratt,Royal,and Strolle.
Electric Rates. Patrick Hurley, Vice President of Management Resources International(NEU),presented
an executive summary of the Electric Pricing Study,conducted by MRI on behalf of the BWL. The
objectives of the Pricing Study are to review the BWL's current rate schedules,pricing issues and goals,
establish projected revenue needs, and develop a pricing strategy for the next three years. The proposed
pricing plan anticipates changes in the B WL's pricing policies and market circumstances, as well as
changes in the industry environment. Treasurer/Controller Dana Tousley gave an overview of BWL
Page 105 Board Minutes
August 27, 1996
electric rate objectives as part of the preparatory process to respond to competition. There was lengthy
discussion on the need to maintain the BWL's competitive cost advantage for larger customers while
continuing to offer residential customers prices that are well below the regional average. The
Commissioners agreed in principle with the information presented. For additional reference, staff was
requested to provide background data used to conduct the Pricing Study.
Following discussion, staff was directed to conduct further study on certain aspects of the rate plan and to
report back for further analysis and discussion at the Committee of the Whole meeting to be held
September 10, 1996.
Economic Development. Mark Taylor,Manager of Electric Customer Projects and Marketing,
summarized the current economic development role of the BWL. He noted that staff has acted as a
supplementary resource to the marketing and promotion activities of the local and state economic
development community. This includes taking a lead role in business retention calls within the BWL
service territory. Major BWL economic development activities since 1990 were highlighted.
Suggested partnership efforts between the City of Lansing and the BWL include the following projects:
• State of Michigan Renaissance Zones: To provide a catalyst for economic revival of depressed
urban and rural areas in the State.
• Neighborhood Enterprise Zones(NEZ): Encourage new housing construction and renovation of
existing houses in some eligible older State of Michigan cities via elimination of property tax and
substituted lower NEZ tax.
• Lansing Community Micro Enterprise Fund: To create or expand small businesses in low and
moderate income areas of Lansing via a low interest loan program.
• Business Financing Assistance Program: To attract developers and encourage property owners to
fix up their buildings for commercial retail and residential user by providing low interest loans.
• City of Lansing recommendations for cooperation or joint partnership between
City/EDC/BWL: BWL contribution to a Revolving Loan Fund.
Suggested community and economic development activities for the BWL include:
• BWL Sites and Buildings
• Retention and Expansion Programs
• Financial Packaging
• Marketing and Promotion
• Research and Organization
• Industrial Park(with energy)
• Rate Incentives
• Land Incentives
• Residency Incentives
Following discussion,the Commissioners directed staff to prioritize the recommended community and
economic development activities for evaluation at the Committee of the Whole meeting to be held on
September 10, 1996.
Respectfully submitted,
Dave O'Leary, Chair Pro Tern
COMMITTEE OF THE WHOLE
Board Minutes Page 106
August 27, 1996
BY CONMSSIONER O'LEARY--
SECONDED BY CON IISSIONER STROLLE
That the Committee of the Whole Report, (Resolution 96-8-3),be approved as
submitted.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Rea No.96-84
That the Board amend Resolution 96-4-1 concerning entering into a Rail Transportation
Contract with Norfolk Southern Railroad(NS)and CN North America(CNNA)subject
to approval as to form by the BWL's Legal Counsel. The amended contract particulars
are as follows:
1. The term shall be from the effective date(approx. September 1, 1996)through
December 31, 1997.
2. There will be no minimum volume commitment.
3. The rate will be as follows:
From origins in Kenova/Thacker I Districts
7,000 Net Ton 7,000 Net Ton 8,000 Net
Ton
Single car Trainloads-NS Cars Trainloads-Private Cars Trainloads-
Private Cars
$16.99 $16.54 $14.94 $14.54
From origins in Thacker II District
7,000 Net Ton 7,000 Net Ton 8,000 Net
Ton
Single Car Trainloads-NS Cars Trainloads-Private Cars Trainloads-
Private Cars
$17.57 $17.05 $15.45 $15.05
By entering into this contract with Norfolk Southern and CN North America,the BWL
will be able to expand its base of Spot coal suppliers,as well as increase the
opportunities to ship coal utilizing BWL private railcars.
Page 107 Board Minutes
August 27, 1996
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-8-4(Administrative)be approved.
Adopted unanimously.
CORPORATE PLANNING
Res. No.96-8-5
It is recommended that Resolution 86-8-4 concerning easements to governmental
entities be amended as follows:
Authorize the General Manager to grant easements to other
governmental entities OR RELEASE EASEMENTS FROM OTHER
GOVERNMENTAL ENTITIES in an amount not to exceed$10,000
subject to the applicable provisions of the Lansing City Charter.
Note: New wording inserted in capital letters.
This is an administrative matter,which will expedite the handling of easements;the
dollar amount is consistent with other Board policies.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-8-5 (Corporate Planning)be approved.
Adopted unanimously.
WATER
Res. No.96-8-6
That the Board agree to serve water to proposed Water District No. 123,Delhi
Township,as requested by resolution of the Delhi Charter Township Board on August
20, 1996, and that in accordance with the agreement between the Board and the Charter
Township of Delhi dated August 15, 1972,covering the furnishing of a potable water
supply in Delhi Township,the Board advises officials of Delhi Township as follows:
1. The Board will accept Water District No. 123 established by Township
resolution,and will provide a potable water supply to said district.
2. The Township will be required to make a$3,771.90 non-refundable
contribution-in-aid of construction to cover the charges set forth in the
Board's Policies and Procedures for Water Service for installing the
necessary distribution facilities to serve said district.
Board Minutes Page 108
August 27, 1996
3. The Board and the Township are to enter into a written agreement(Supple-
ment CXXIII)covering the furnishing of a potable water supply in Water
District No. 123.
4. Water mains are to be installed in accordance with the current Board's
Policies and Procedures for Water Service.
Further,that upon receipt of the sum of 3,771.90 from the Township, the project be
approved for installation,and the General Manager and the Corporate Secretary be
authorized to sign the aforementioned agreement(Supplement CXXIII)to furnish a
potable water supply in Water District No. 123.
The geographical area of Water District No. 123 is as follows:
Along College Road beginning approximately 740 feet north of Dell Road
thence northward 270 feet. This district is contiguous to(and will be
constructed in conjunction with)Water District No. 121.
To provide a potable water supply within the proposed new district requires the
installation of 270 feet of watermain and fire hydrants at an estimated cost of
$10,767.90. Delhi Township acknowledges the portion of$3,771.90 of the cost of said
project. Due to required watermain oversizing,BWL's oversizing cost will be
$3,194.10. BWL will incur additional cost of$3,771.90 for Aleidon Township's portion
of the watermain which will be recovered in frontage fees as customer's connect
BWL's total cost will be$6,996.00.
The main extension will serve two(2)residential customers. One-time connection fees
will amount to$1,480.00. The estimated annual revenue is$680.00.
Watermain to be installed in Summer of 1996 following the receipt of the Township's
non-refundable contribution-in-aid of construction and the signing of the agreement.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-8-6(Water Utility)be approved.
Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
Page 109 Board Minutes
August 27, 1996
RESOLUTIONS
There were no resolutions.
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
Central Fuels Laboratory,ISO 9000 Registration. General Manager Pandy reported that the BWL's
Central Fuels Laboratory(CFL)of the Fuel Supply&Results Department has been recommended by
National Quality Assurance,Inc. (NQA)for registration with the International Organization for
Standardization(a federation of international standards bodies,known as ISO 9000). The ISO 9000
registration will enable the Fuel Supply Section to administer the coal quality sections of BWL coal
contracts with absolute credibility thus assuring customers that the full value for each fuel dollar being
spent is realized. Brian McLeod,Manager of Fuel Supply&Results Department,and Wendy Bradley,
Senior Fuels Technician,who were present in the audience were recognized for their efforts in attaining
this internationally recognized honor.
Installation of Sue McCormick as Michigan Section AWWA Chairperson. Water Technical Support
Manager Sue McCormick is to be installed as Chair of the Michigan Section of the American Water
Works Association(AWWA)on September 12, 1996. She joins the ranks of three previous BWL
employees who served in this capacity,they are: William Fishback(1979), Claude Erickson(1956),and
John Dye(1949). Ms.McCormick will preside for one year. The Commissioners were invited to attend
the Michigan Section AWWA annual conference to be held September 10-13, 1996 at the Radisson Plaza
Hotel at Kalamazoo Center,Kalamazoo.
FY 1997 Goals and Objectives to be Reviewed. Draft documents of Electric Utility and Water Utility
goals and objectives for FY 1997 were sent out to the Commissioners last week. Copies of FY 1997
goals and objectives for the following divisions were handed out for review and comments: Steam Utility,
Treasurer/Controller,Human Resources,and Communications. A final Business Plan will be presented to
the Board in September.
Joette Woodard-Yank Completes Term as IDEA President. Steam Utility Director Joette Woodard-
Yauk was featured in DISTRICT ENERGY,Third Quarter, 1996,and received numerous accolades for
her leadership role as president of the International District Energy Association(IDEA).
BWL Cooperates with MDNR Fisheries Program. General Manager Pandy reported that the Michigan
Department of Natural Resources(MDNR),Fisheries Division, is requesting the use of a pond located on
BWL property in Windsor Township(T3N,R3W, Sec. 3)for the stocking of walleye spring fingerlings.
This would involve 60,000 fish that would grow in 50 days, expected to reach a size of two inches where
they would then be captured and restocked in other fisheries. The BWL plans to cooperate with the
MDNR in this site by sharing its resources for public good. Corporate Planning Director Roger Ophaug
noted the fisheries program is anticipated to be implemented in about one year,which would allow time to
resolve and finalize details, including a Memorandum of Understanding for access onto the BWL property
and use of the pond.
Meeting Planned to Discuss Proposed Vision Center Development in Ottawa Power Station.
Oldsmobile General Manager,John Rock,has called a meeting to be held Friday, August 30, at the
University Club of MSU at 6:00 p.m. to focus on the conceived development of the Vision Center in the
Ottawa Station. Meeting participants include representatives from the City,BWL, Oldsmobile, Vision
Board Minutes Page 110
August 27,1996
Services,Inc. (VSI),and Ottawa Park Associates,Developers(OPAD). General Manager Pandy stated
that Mr. Rock is committed to relocating the Vision Center to Lansing. In addition,Mr. Rock has
indicated on numerous occasions that Oldsmobile wants to continue its presence in Lansing through the
Oldsmobile Park,LPGA Golf Classic,and the proposed Vision Center.
The Small Business Association of Michigan Considers Relocating to the Ottawa Power Station.
Gary Woodbury,President-CEO of The Small Business Association of Michigan, has communicated to
the Ottawa Park Associates,Developers(OPAD)that the Association's physical development committee
has agreed to commit to 10,000 square feet in the Ottawa plant development for its relocated offices. The
Association,currently housed in the Phoenix Building on Washington mall,is considering space in
Ottawa's upper levels(6th or 7th floor). The Association's membership is expected to vote on the
relocation proposal in early September.
[Commissioner Lontz arrived at 5:50 p.m.]
Centerpiece Fountain Proposed for Oldsmobile Park. General Manager Pandy displayed an artist's
concept of a high-tech water fountain at the main entrance of Oldsmobile Park,proposed by Mayor
Hollister. The circular fountain, expected to cost about$100,000,would feature arcing and vertical
streams of water,synchronized to the pulse of light and sound. Mr.Pandy suggested supporting the City
and the community with this project by providing the water hookup to the fountain and periodic
maintenance service. In return, the BWL would receive recognition for in-kind support, similar to
maintenance services to be provided for the Rotary Steam Clock. Following discussion, the
Commissioners agreed that it would be appropriate for the BWL to take a role in the community by
providing operational and maintenance services for the fountain.
Mayor Submits Nominations for BWL Commissioners Mayor David Hollister has placed the
nominations of Judson Werbelow and Joseph Graves,Jr. for BWL Commissioners to fill the expired terms
of Phillip Hassler and Dr.Eva Evans. Mr. Werbelow is a retired attorney from the firm of Dickinson,
Wright,Moon, Van Dusen&Freeman,who did legal work for the BWL and also for the Michigan Public
Power Agency(MPPA). He is experienced in public power matters,particularly in public power bond
issues. Joseph Graves, Jr. is currently employed by the Michigan Family Independence Agency, serving
as an executive advisor to the Director,Dr. Gerald Miller. Mr. Graves also served as a Deputy Director of
the Michigan Department of Social Services in both the Blanchard and Engler administrations. His
previous employment experience includes work in the Michigan Department of Commerce Energy
Administration and in the State of California Energy Office under former California Governor Jerry
Brown.
The two nominees are subject to City Council confirmation. Their appointments will run through
June 30, 2000. Commissioners Hassler and Evans will continue on the Board until the Mayor's two
appointments are confirmed.
REMARKS BY COMMISSIONERS
Commissioner Lontz inquired on the status of the Integrated Resource Plan(IRP)and its effect on rates.
Bill Cook,Director of Electric System Control Division, responded that the time frame for presenting the
final recommendations is four months behind schedule. The completion date is targeted some time in
November. The purpose of the IRP is to develop a long-term strategy(10-15 years)to optimize the
BWL's power costs. Some of the alternatives may have an impact on the operations and maintenance
costs,but there is nothing in the IRP that has a short-term fix.
Page 111 Board Minutes
August 27, 1996
Commissioner Christian inquired where the BWL stands in recovering damage expenses from the Dye
High Pressure Pumping Station Incident on April 3, 1996.
Corporate Planning Director Roger Ophaug responded that Project Engineering staff and the Risk
Manager are in negotiations with the contractor. A formal response from the contractor has not yet been
received.
PUBLIC COMMENTS
Councilmember Harold Leeman,who was present in the audience,thanked Commissioners Hassler and
Evans for their time and commitment to the BWL and the City.
EXCUSED ABSENCES
BY COMMISSIONER ROYAL—
SECONDED BY COMMISSIONER CHRISTIAN
That the absence of Commissioner Evans be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Royal,the Board adjourned at 5:59 p:m
Mary E. So ecretary
Filed: August 28, 1996
Marilynn Slade, City Clerk
Board of Water and Light,Lansing,Michigan
Board of Water & Light
Lansing, Michigan
Proposed
Electric Rate Schedules
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
3rd Revised Sheet No.EB1
RESIDENTIAL ELECTRIC SERVICE
RATE NO. 1
Availability-This rate is available to any single-family residence or individual dwelling unit when the entire
electric requirements are supplied at one point of delivery through one meter. Service to appurtenant buildings
may be taken through the same meter.
Service under this rate is not available to any single-family residence or individual dwelling unit when a
portion of the residence or dwelling unit is used for commercial, industrial, or resale purposes unless the wiring
is so arranged that service for residence and non-residence purposes are metered separately.
Nature of Service- Alternating current, 60 hertz, single phase, 120/240 nominal volts.
Monthly Rate -Shall be computed in accordance with the following charges:
Basic Service Charge $3.20 per customer per month or part thereof
Energy Charge Summer Billing Months of June through October
$0.0543 per kWh for the first 500 kWh
$0.0580 per kWh for all over 500 kWh
Winter Billing Months of November through May
$0.0543 per kWh for the first 500 kWh
$0.0565 per kWh for all over 500 kWh
Water Heatine Discount-When an approved electric water heater is permanently installed,and there is no
other method of water heating, the Basic Service Charge shall be$2.90.
Energy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which le%ies taxes, license fees,franchise fees. or any other charges against the Board of Water and
Light(BWL)property, or its operation, or the production and/or sale of electric energy, to offset any such cost
and thereby prevent other customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Auxiliary Power Provision -Domestic customers desiring electric service as an auxiliary source of power to
wind or solar powered generating equipment may take service under this rate schedule under special agreement
with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under
this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper
operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to
sell energy to the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a
charge of$6.40 per month or part thereof instead of the above Basic Service Charge.
Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light,Lansing.Michigan
3rd Revised Sheet No. EB3
RESIDENTIAL ALL-ELECTRIC SERVICE
RATE NO. 2
Availabilitv-This rate is available to any single-family residence or individual dwelling unit when the entire
electric requirements for water heating, cooking and space conditioning are supplied at one point of delivery
through one meter. Service to appurtenant buildings may be taken through the same meter.
Service under this rate is not available to any single-family residence or individual dwelling unit when a
portion of the residence or dwelling unit is used for commercial, industrial,or resale purposes unless the wiring
is so arranged that service for residence and non-residence purposes are metered separately.
Nature of Service-Alternating current,60 hertz, single phase, 120/240 nominal volts.
Monthly Rate- Shall be computed in accordance with the following charges.
Basic Service Charge $3.20 per customer per month or part thereof
Energy Charge Summer Billing Months of June through October
$0.0543 per kWh for the first 500 kWh
$0.0580 per kWh for all over 500 kWh
Winter Billing Months of November through May
$0.0543 per kWh for the first 500 kWh
$0.0560 per kWh for all over 500 kWh
Water Heatine Discount-When an approved electric water heater is permanently installed, and there is no
other method of water heating,the Basic Service Charge shall be$2.90.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adjustment -Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board of Water and
Light(BWL)property, or its operation, or the production and/or sale of electric energy, to offset any such cost
and thereby prevent other customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior senice with the BWL.
Auxiliary Power Provision -Domestic customers desiring electric service as an auxiliary source of power to
wind or solar powered generating equipment may take service under this rate schedule under special agreement
with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under
this rate shall pay all reasonable costs associated«ith any alteration of BWL equipment required for proper
operation of the customer's generating equipment in parallel iNith the BWL system. A customer may elect to
sell energy to the BWL at the rate of S.022/kWh delivered. Customers selling energy to the BWL shall pay a
charge of$6.40 per month or part thereof instead of the above Basic Service Charge.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No. EB2
This sheet has been canceled.
Adopted: Proposed Effective: January 1. 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No. EB5
GENERAL ELECTRIC SERVICE
RATE NO.3
Availabilitv-This rate is available to any customer desiring secondary voltage service for any purpose when
supplied at one point of delivery through one meter. The limitation to secondary-voltage service may be waived
in instances where the character of the electric load at the premises served has changed substantially. This rate
is not available for emergency or standby service.
Nature of Service-Alternating current, 60 hertz,single phase or three phase. The secondary voltage in each
case to be determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $7.50 per customer per month or part thereof
Energy Charge Summer Billing Months of June through October
$0.0686 per kWh
Winter Billing Months of November through May
$0.0660 per kWh
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy,to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Metering-Where the BWL elects to measure the service on the primary side of the transformers,the metered
kWh thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the
customer receives service through more than one meter, the consumption as registered by the different meters
will not be combined for billing purposes. but will be computed and billed separately.
Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to anv bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Auxiliary Power Provision - Customers desiring electric service as an auxiliary source of power to wind or
solar powered generating equipment may take service under this rate schedule under special agreement with the
BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate
shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of
the customer's generating equipment in parallel with the BWL system. A customer may elect to sell energy to
the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of
$12.46 per month or part thereof instead of the above Basic Service Charge.
Rules and ReZulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No. EB4
This sheet has been canceled.
Adopted:Proposed Effective: January 1. 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No. EB7
LARGE GENERAL ELECTRIC SERVICE
RATE NO. 4
Availahilitv-This rate is available to any customer desiring secondary voltage for any purpose when the
electrical requirements are supplied at one point of delivery through one metering installation and where the
billing demand is 15 kW or more. The limitation to secondary-voltage service may be waived in instances
where the character of the electric load at the premises served has changed substantially. This rate is not
available for standby or emergency services.
Nature of Service-Alternating current, 60 hertz, single phase or three phase. The secondary voltage to be
determined by the Board of Water and Light(BWL).
Monthlv Rate- Shall be computed in accordance with the following charges.
Basic Service Charge $18.00 per customer per month or part thereof
Capacity Charge $8.20 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0350 per kWh
Winter Billing Months of November through May
$0.0320 per kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh) metering
installed in accordance with BWL Rules and Regulations regarding power factor.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset anv such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand -The billing demand shall be the kW supplied during the 15-minute period of maximum use
during the month but not less than 60%of the highest registered demand in the preceding eleven(11) months,
nor less than 15 kW.
Metering- Where the BWL elects to measure the service on the primary side of the transformer, the metered
kW and kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one metering installation, the consumption as
registered by the different metering installations will not be combined for billing purposes, but will be
computed and billed separately.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance,excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge -A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light. Lansing, Michigan
1st Revised Sheet No. EB6
This sheet has been canceled.
Adopted:Proposed Effective: January L 1997
Board of Water and Light, Lansing, Michigan
3rd Revised Sheet No.EB9
PRIMARY ELECTRIC SERVICE
RATE NO. 5
Availability-This rate is available to any customer desiring primary voltage service when the electrical
requirements are supplied at one point of delivery through one metering installation(except as provided below
for Multiple Delivery Point Aggregation)and where the billing demand is 100 kW or more. This rate is not
available for standby or emergency service.
Nature of Service-Alternating current, 60 hertz,three phase. The primary voltage to be determined by the
Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $50.00 per customer per month or part thereof
Capacity Charge $6.90 per kW for all kW of On-Peak Billing Demand,plus
$2.00 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0315 per kWh for all kWh during the On-Peak Period,plus
$0.0270 per kWh for all kWh during the Off-Peak Period, plus
Winter Billing Months of November through May
$0.0300 per kWh for all kWh during the On-Peak Period,plus
$0.0270 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh)metering
installed in accordance with BWL Rules and Regulations regarding power factor.
Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees,or any other charges against the Board's property, or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-
minute period of maximum use during the On-Peak Period during the month, but not less than 60%of
the highest registered demand during the On-Peak Period in the preceding eleven (11) months,and
not less than 100 kW.
Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period
of maximum use during the month whether on-peak or off-peak, but not less than 60%of the highest
registered demand in the preceding eleven(11) months, and not less than 100 kW.
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
1st Revised Sheet No. EB8
This sheet has been canceled.
Adopted:Proposed Effective: January 1. 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No. EB10
PRIMARY ELECTRIC SERVICE
RATE NO. 5
Multiple Delivery Point Aggregation -The 15-minute period demands of multiple delivery points of a
customer may be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; (b)the total On-
Peak Billing Demand shall not be less than 4,000 kW; and(c)the customer shall agree to a service contract
with the BWL for the customer's full electrical service requirements at the totalized delivery points for a period
of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing
Demand only. All other charges, including the Basic Service Charge and Maximum Demand, shall apply to
each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers, the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes, but will be billed and
computed separately except as provided for Multiple Delivery Point Totalization.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL,a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
Original Sheet No. EB10-1
GENERAL PRIMARY SERVICE
RATE NO. 6
This sheet has been canceled.
['This Rate is proposed to be canceled. Service may be provided under rates 3 or 4.1
Adopted:Proposed Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No. EB11
MUNICIPAL WATER PUMPING ELECTRIC SERVICE
RATE NO. 7
Availability-This rate is available to any political subdivision or agency thereof of the State of Michigan
located within the Board of Water and Light(BWL)service area desiring service for potable water pumping
and associated potable water production equipment when the entire electrical requirements are supplied at one
point of delivery through one meter. This rate is not available for emergency, standby, or auxiliary service.
Nature of Service- Alternating current, 60 hertz, three phase. The secondary or primary voltage in each case
to be determined by the BWL.
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $5.00 per customer per month or part thereof
Energy Charge $0.0515 per kWh
Enerev Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees, franchise fees,or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Metering-Where the BWL elects to measure the service on the primary side of the transformers serving the
customer,the metered kWh thus measured will be reduced 3%for billing purposes to adjust for transformer
losses.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill which is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service which are incorporated herein by this reference.
Adopted: Proposed Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
2nd Revised Sheet No.EB12
LARGE CAPACITY ELECTRIC SERVICE
RATE NO. 8
Availabilitv-This rate is available to any customer desiring primary voltage service when: (a) the electrical
requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point
Aggregation;(b)where the total On-Peak Billing Demand is 25,000 kW or more; and(c)the customer agrees
to a service contract with the BWL for the customer's full electrical service requirements at the applicable
delivery points for a period of not less than ten(10)years. This rate is not available for standby or emergency
service.
Nature of Service-Alternating current. 60 hertz, three phase. The primary voltage to be determined by the
Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per delivery point per month or part thereof
Capacity Charge $8.00 per kW for all kW of On-Peak Billing Demand,
plus
$1.50 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0300 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period,plus
Winter Billing Months of November through May
$0.0288 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule which is incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all
applicable delivery points during the 15-minute period of maximum use during the On-Peak Period
during the month,but not less than 85%of the highest registered demand during the On-Peak Period
in the preceding eleven(11) months, and not less than 25,000 kW. (See Multiple Delivery Point
Aggregation.)
Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during
the 15-minute period of maximum use during the month whether on-peak or off-peak,but not less
than 60%of the highest registered demand in the preceding eleven(11) months, and not less than
1,000 kW. The total Maximum Demand for all applicable delivery points shall not be less than 25,000
kW.
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Adopted:Proposed Effective: January 1, 1997
APPENDIX A
SUMMARY OF TENTATIVE CONTRACT SETTLEMENT
November 1, 1996 - October 31, 1999
I. Basic Agreement
A. Three year agreement retroactive to November 1, 1996 (expiring October 31, 1999)
B. Parties agree to a"Living Agreement"to address competition and cost reduction
C. Partnership Statement and Empowerment of Departments
II. Economic Changes
A. Wage Increases
I 1-01-96 - 10-31-97 3.5%
11-01-97 - 10-31-98 3.0%
11-01-98 - 10-31-99 2.5%
B. Life Insurance, effective January 1, 1997
1. Premium Waiver and Life Pay-out will be discontinued.
2. Premium on all life and accidental death and dismemberment insurance
coverage over$10,000 will be paid through the Flexible Spending Account.
C. Job Security
1. A minimum ratio of fifty-five percent(55%)bargaining unit representation in
the workforce will be maintained.
2. Supplemental labor performing bargaining unit work will be limited to ten
percent(10%)of bargaining unit employees.
3. Formation of a New Ventures Team
4. Flexibility
5. Successor Clause
III. Other Issues
A. Policy Statements
1. Upon request from the union, Management must respond to wage adjustment
requests within six months after the presentation.
B. Leave of Absence
An employee placed on compensable illness or injury leave after November 1,
1996 shall lose seniority when the leave equals the employee's pre-leave seniority,
but not to exceed 2 years.
C. The Just-Cause criteria and procedure under the current BWL Drug &Alcohol
Policy will be enhanced with education and process improvements.
D. Share the Success
1. Bonus amount applied to base pay for pension calculation capped at 59/o/year.
2. Separate department measures based on hard savings attributable to employees
with 90/10 split of savings; 90%to organization/10%to department employees.
3. Department taskforces to be established to identify savings within one year.
4. Both programs to continue through the life of this agreement.
APPENDIX A-1
E. Any employee who has returned to the bargaining unit shall not have seniority
time accumulated outside the bargaining unit applied in determining layoff.
F. "Reasonable Time" for standby shall be defined as 30 minutes.
N. Issues Sent to Subcommittee
A. Paid Time Off
B. Use of 20-day window to return to former job
C. Workers Compensation
APPENDIX A•2
PARTNERSHIP AGREEMENT
The Board of Water and Light and I.B.E.W., Local 352, recognize the critical and
on-going need to improve customer service and reduce cost. As part of this
agreement, we are committed to a partnership; working together to improve the
Board of Water and Light's ability to compete in a rapidly changing marketplace.
We will accomplish this through:
• An open and free exchange of all information
Proactive decision-making at all levels
Enabling employees to be owners of their work
Promoting participation and innovation
Encouraging a positive relationship among all employees
Our partnership will become the driving process that enables the Board of Water
and Light to continue to change and stay competitive.
R
INCREMENTAL BARGAINING SETTLEMENT COST pP'Fr;dDI:{
NOVEMBER 1, 1996 TO OCTOBER 31, 1999
'Base' 'Gross' 'Total'
Bargaining Wage Wage Compensation
Costs Increase Increase Increase
(1) (2) (3) (4)
$19.30 $22.64 $28.88
YEAR ONE
General Increase 3.50% 798,986 0.68 0.79 0.91
Pension Multiplierto 1.80 1.83% 311,485 0.35
Ten Year Graded Vesting 0.03% 5,106 0.01
Life Insurance (Option Two) (19,869) -0.02
Life Insurance (Flexible Spending) (11,216) -0.01
Leave of Absence (2 yrs from 5 yrs) (23,254) -0.03
Actual Overtime on Holidays (6,648) -0.01
1,054,590 $19.98 $23.43 $30.08
3.50% 4.16%
YEAR TWO
General Increase 3.00% 704,988 0.60 0.69 0.80
Pension Multiplier to 1.80 1.83% 10,975 0.01
Ten Year Graded Vesting 0.03% 180 0.00
Life Insurance (Option Two) (695) 0.00
Life Insurance (Flexible Spending) (393) 0.00
Leave of Absence (2 yrs from 5 yrs) (814) 0.00
Actual Overtime on Holidays (233) 0.00
714,008 $20.58 $24.12 $30.89
3.00% 2.69%
YEAR THREE
General Increase 2.50% 610,989 0.52 0.60 0.69
Pension Multiplier to 1.80 1.83% 9,683 0.01
Ten Year Graded Vesting 0.03% 159 0.00
Life Insurance (Option Two) (21) 0.00
Life Insurance (Flexible Spending) (12) 0.00
Leave of Absence (2 yrs from 5 yrs) (24) 0.00
Actual Overtime on Holidays (7) 0.00
620,767 $21.10 $24.72 $31.59
2.50% 2.27%
Notes:
(1) Includes payroll loading: FICA 7.65%; Pension 7.22%; Life & Long-Term
Disability Insurance 1.58%.
(2) Base wage is the employee average hourly rate.
(3) Gross wage include base wage plus share the success, shift premium,
Sunday premium, standby premium, paid retirement allowance and
overtime.
(4) Total compensation include gross wage plus pension contribution, health
care insurance, dental insurance, life insurance, long-term disability
insurance, FICA, workers compensation, tuition refunds, safety shoes &
glasses, and meals paid.
DMF GENERAL ACCOUNTING 11/14/96 07:31 AM FACTSHET.WK4
APPENDIX C
Pension Settlement Issues
Issue 1. Continue existing post retirement benefits
Agree
Issue 2. Post retirement increases in pension amount
Agree to continue current system, with one change. Board would review pension increases every 3
years, but reduce the "look back" period to one year. For example, pensioners who have retired in the
last 12 months would be ineligible for any increase.
Issue 3. Security of ICMA deferred compensation funds
Agree to establish separate trust, when IRS and ICMA have set regulations and determined the form and
format for complying with the provisions contained in 1996 amendments to the Internal Revenue Code.
Issue 4. Attract and retain employees
Agree to a graduated vesting schedule starting at 5 years, with 100% vesting at 10 years seniority.
Agree to a 1.80 multiplier for all pension calculations.
Agree to lump sum annuity withdrawal option upon permanent separation from employment. This option
must be actuarially equilvalent.
Agree to purchase of pension service credit. The purchase price must be actuarially equivalent.
Establish mandatory defined contribution plan for new hires after 1-1-97 and existing employees who
wish to permanently convert to defined contribution plan. Must be at no cost to BWL over existing DB
plan.
Issue 5. Cost
Change multiplier to 1.80 $311,485 annual cost
Graduated vesting 5-10 yr 5,106 annual cost
Issue 6. Security of the pension promise
Agree to strengthen and improve termination and successor clause in trust agreement.
Issue 7. Communication to employees
Agree to continue to provide the following simplified and improved reports to employees;
a. Summary plan description
b. Member annual statement
c. Plan annual report
Agree to pursue, apply and strive to win the Public Pension Principles Achievement Award sponsored by
The Public Pension Coordinating Council.
dwt 11/26/96 812 AM
Board of Water and L.61it, Lansing,Michigan
Board of Water & Light
Lansing, Michigan
Electric Rate schedules
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
3rd Revised Sheet No. EB1
RESIDENTIAL ELECTRIC SERVICE
RATE NO. 1
Availabilitv-This rate is available to any single-family or multifamily dwelling of 4 units or less when the
entire electric requirements are supplied at one point of delivery through one meter. Service to appurtenant
buildings may be taken through the same meter.
Service under this rate is not available to any single-family or multifamily dwelling unit of 4 units or less when
a portion of the dwelling unit is used for commercial, industrial, or resale purposes unless the wiring is so
arranged that service for residential and non-residential purposes are metered separately.
Nature of Service-The service is alternating current,60 hertz, single phase, 120/240 nominal volts.
Monthly Rate - Shall be computed in accordance with the following charges:
Basic Service Charge $3.20 per customer per month
Energy Charge Summer Billing Months of June through October
$0.0543 per kWh for the first 500 kWh
$0.0580 per kWh for all over 500 kWh
Winter Billing Months of November through May
$0.0543 per kWh for the first 500 kWh
$0.0565 per kWh for all over 500 kWh
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Water Heating Discount-When an approved electric water heater is permanently installed, and there is no
other method of water heating, the Basic Service Charge shall be$2.90.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment -Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees, franchise fees, or any other charges against the Board of Water and
Light(BWL) property, or its operation. or the production and/or sale of electric energy, to offset any such cost
and thereby prevent other customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Auxiliary Power Provision-Domestic customers desiring electric service as an auxiliary source of power to
wind or solar powered generating equipment may take service under this rate schedule under special agreement
with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under
this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper
operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to
sell energy to the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a
charge of$6.40 per month or part thereof instead of the above Basic Service Charge.
Rules and Regulations - Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No.EB2
This sheet has been canceled.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No. EB3
RESIDENTIAL ALL-ELECTRIC SERVICE
RATE NO. 2
Availabilitv-This rate is available to any single-family or multifamily dwelling of 4 units or less when the
entire electric requirements for water heating, cooking and space conditioning are supplied at one point of
delivery through one meter. Service to appurtenant buildings may be taken through the same meter.
Service under this rate is not available to any single-family or multifamily dwelling of 4 units or less when a
portion of the dwelling unit is used for commercial, industrial, or resale purposes unless the wiring is so
arranged that service for residential and non-residential purposes are metered separately.
Nature of Service-The service is alternating current, 60 hertz, single phase, 120/240 nominal volts.
Monthly Rate -Shall be computed in accordance with the following charges.
Basic Service Charge $3.20 per customer per month
Energy Charge Summer Billing Months of June through October
$0.0543 per kWh for the first 500 kWh
$0.0580 per kWh for all over 500 kWh
Winter Billing Months of November through May
$0.0543 per kWh for the first 500 kWh
$0.0560 per kWh for all over 500 kWh
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Water Heating Discount-When an approved electric water heater is permanently installed, and there is no
other method of water heating, the Basic Service Charge shall be$2.90.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment -Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board of Water and
Light(BWL)property, or its operation, or the production and/or sale of electric energy, to offset any such cost
and thereby prevent other customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Auxiliary Power Provision -Domestic customers desiring electric service as an auxiliary source of power to
wind or solar powered generating equipment may take service under this rate schedule under special agreement
with the BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under
this rate shall pay all reasonable costs associated with any alteration of BWL equipment required for proper
operation of the customer's generating equipment in parallel with the BWL system. A customer may elect to
sell energy to the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a
charge of$6.40 per month or part thereof instead of the above Basic Service Charge.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing, Michigan
2nd Revised Sheet No.EB4
This sheet has been canceled.
Adopted:November 26, 1996 Effective.- January 1, 1997
Board of Water and Light, Lansing, Michigan
2nd Re%lsed Sheet No. EB5
GENERAL ELECTRIC SERVICE
RATE NO. 3
Availability-This rate is available to any customer desiring secondary voltage service for any purpose when
supplied at one point of delivery through one meter. The limitation to secondary-voltage service may be waived
in instances where the character of the electric load at the premises served has changed substantially. This rate
is not available for emergency or standby service.
Nature of Service-The service is alternating current, 60 hertz, single phase or three phase. The secondary
voltage is determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $7.50 per customer per month
Energy Charge Summer Billing Months of June through October
$0.0686 per kWh
Winter Billing Months of November through May
$0.0660 per kWh
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Enem Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies takes, license fees.franchise fees, or any other charges against the BWL property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Metering-Where the BWL elects to measure the service on the primary side of the transformers, the metered
kWh thus measured will be reduced by 3%for billing purposes to adjust for transformer losses. Where the
customer receives service through more than one meter, the consumption as registered by the different meters
will not be combined for billing purposes. but«ill be computed and billed separately.
;,Ielaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Auxiliary Power Provision -Customers desiring electric service as an auxiliary source of power to wind or
solar powered generating equipment may take service under this rate schedule under special agreement with the
BWL. The customer shall pay the charges set forth above. A customer taking auxiliary power under this rate
shall pay all reasonable costs associated with any alteration of BWL equipment required for proper operation of
the customer's generating equipment in parallel with the BWL system. A customer may elect to sell energy to
the BWL at the rate of$.022/kWh delivered. Customers selling energy to the BWL shall pay a charge of
$12.46 per month or part thereof instead of the above Basic Service Charge.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
1st Revised Sheet No. EB6
This sheet has been canceled.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing, Michigan
2nd Revised Sheet No.EB7
LARGE GENERAL ELECTRIC SERVICE
RATE NO. 4
Availabilitv-This rate is available to any customer desiring secondary voltage for any purpose when the
electrical requirements are supplied at one point of delivery through one metering installation and the billing
demand is 15 kW or more. The limitation to secondary-voltage service may be waived in instances where the
character of the electric load at the premises served has changed substantially. This rate is not available for
standby or emergency services.
Nature of Service-The service is alternating current, 60 hertz, single phase or three phase. The secondary
voltage is determined by the Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $18.00 per customer per month
Capacity Charge $8.20 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0350 per kWh
Winter Billing Months of November through May
$0.0320 per kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh.
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh) metering
installed in accordance with BWL Rules and Regulations regarding power factor.
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment -Bills shall be increased within the limits of any governmental authority or political
subdivision which levies takes. license fees,franchise fees, or any other charges against the BWL property, or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand -The billing demand shall be the kW supplied during the 15-minute period of maximum use
during the month but not less than 60%of the highest registered demand in the preceding eleven(11)months,
nor less than 15 kW.
Metering-Where the BWL elects to measure the service on the primary side of the transformer, the metered
kW and kWh quantities thus measured will be reduced by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one metering installation, the consumption as
registered by the different metering installations«i11 not be combined for billing purposes, but will be
computed and billed separately.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge -A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Adopted: November 26. 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
1st Revised Sheet No.EB8
LARGE GENERAL ELECTRIC SERVICE
RATE NO. 4
Rules and Regulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No.EB9
PRIMARY ELECTRIC SERVICE
RATE NO. 5
Availabilitv-This rate is available to any customer desiring primary voltage service when the electrical
requirements are supplied at one point of delivery through one metering installation (except as provided below
for Multiple Delivery Point Aggregation) and the billing demand is 100 kW or more. This rate is not available
for standby or emergency service.
Nature of Service-The service is alternating current, 60 hertz, three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthly Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $50.00 per customer per month
Capacity Charge $6.90 per kW for all kW of On-Peak Billing Demand,plus
$2.00 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0315 per kWh for all kWh during the On-Peak Period, plus
$0.0270 per kWh for all kWh during the Off-Peak Period, phi
Winter Billing Months of November through May
$0.0300 per kWh for all kWh during the On-Peak Period, phi
$0.0270 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The Reactive Power Charge shall be applicable to customers who have reactive kilovar hour(kvarh) metering
installed in accordance with B WL Rules and Regulations regarding power factor.
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Ad iustment -This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees. franchise fees, or any other charges against the Board's property,or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the kW supplied during the 15-
minute period of maximum use during the On-Peak Period during the month,but not less than 60%of
the highest registered demand during the On-Peak Period in the preceding eleven(11) months, and
not less than 100 kW.
Maximum Demand: The Maximum Demand shall be the kW supplied during the 15-minute period
of maximum use during the month whether on-peak or off-peak,but not less than 60%of the highest
registered demand in the preceding eleven(11) months. and not less than 100 kW.
Schedule of on-peak and off-peak periods -The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
3rd Revised Sheet No. EB10
PRIMARY ELECTRIC SERVICE
RATE NO. 5
Multiple Delivery Point Aggregation-The 15-minute period demands of multiple delivery points of a
customer may be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; (b)the total On-
Peak Billing Demand shall not be less than 4,000 kW; and (c) the customer shall agree to a service contract
with the BWL for the customer's full electrical service requirements at the aggregated delivery points for a
period of not less than five(5)years. Aggregation shall be applicable for determination of the On-Peak Billing
Demand only. All other charges, including the Basic Service Charge and Maximum Demand, shall apply to
each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes, but will be billed and
computed separately except as provided for in Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge- A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
Original Sheet No. EB10-1
GENERAL PRIMARY SERVICE
RATE NO. 6
This sheet has been canceled.
[This Rate is proposed to be canceled. Service may be provided under rates 3 or 4.1
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No.EB11
MUNICIPAL WATER PUMPING ELECTRIC SERVICE
RATE NO. 7
Availabilitv-This rate is available to any political subdivision or agency of the State of Michigan desiring
service for potable water pumping and associated potable water production equipment when the entire electrical
requirements are supplied at one point of delivery through one meter. This rate is not available for emergency,
standby, or auxiliary service.
Nature of Service-The service is alternating current, 60 hertz, three phase. The secondary or primary voltage
is determined by the BWL.
Monthly Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $5.00 per customer per month
Energy Charge $0.0515 per kWh
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Adiustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adjustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Metering-Where the BWL elects to measure the service on the primary side of the transformers serving the
customer, the metered kWh thus measured will be reduced 3%for billing purposes to adjust for transformer
losses.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No.EB12
LARGE CAPACITY ELECTRIC SERVICE
RATE NO. 8
Availabilitv-This rate is available to any customer desiring primary voltage service when: (a) the electrical
requirements are supplied at one or more points of delivery as provided below for Multiple Delivery Point
Aggregation; (b)where the total On-Peak Billing Demand is 25,000 kW or more; and(c) the customer agrees
to a service contract with the BWL for the customer's full electrical service requirements at the applicable
delivery points for a period of not less than ten(10)years. This rate is not available for standby or emergency
service.
Nature of Service -The service is alternating current, 60 hertz, three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthlv Rate-Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per delivery point per month
Capacity Charge $8.00 per kW for all kW of On-Peak Billing Demand, plus
$1.50 per kW for all kW of Maximum Demand
Energy Charge Summer Billing Months of June through October
$0.0300 per kWh for all kWh during the On-Peak Period,plus
$0.0260 per kWh for all kWh during the Off-Peak Period, plus
Winter Billing Months of November through May
$0.0288 per kWh for all kWh during the On-Peak Period, plus
$0.0260 per kWh for all kWh during the Off-Peak Period
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Enerev Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billine Demand
On-Peak Billing Demand: The On-Peak Billing Demand shall be the total kW supplied to all
applicable delivery points during the 15-minute period of maximum use during the On-Peak Period
during the month,but not less than 85%of the highest registered demand during the On-Peak Period
in the preceding eleven(11) months,and not less than 25,000 kW. (See Multiple Delivery Point
Aggregation.)
Maximum Demand: The Maximum Demand for each delivery point shall be the kW supplied during
the 15-minute period of maximum use during the month whether on-peak or off-peak,but not less
than 60%of the highest registered demand in the preceding eleven(11) months, and not less than
1,000 kW. The total Maximum Demand for all applicable delivery points shall not be less than 25,000
kW.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
Original Sheet No. EB12-1
LARGE CAPACITY ELECTRIC SERVICE
RATE NO. 8
Schedule of on-peak and off-peak periods-The On-Peak Period shall be from 10:00 a.m. until 6:00 p.m.,
Monday through Friday. All other hours shall comprise the Off-Peak Period.
Multiple Delivery Point Aggregation -The 15-minute period demands of multiple delivery points of a
customer shall be summed for determination of the total On-Peak Billing Demand under the following
conditions: (a)the Maximum Demand determined at each delivery point must equal or exceed 1,000 kW; and
(b)the total On-Peak Billing Demand shall not be less than 25,000 kW. Aggregation shall be applicable for
determination of the On-Peak Billing Demand only. All other charges, including the Basic Service Charge and
Maximum Demand, shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes, but will be billed and
computed separately except as provided for Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge - A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No.EB13
OUTDOOR LIGHTING SERVICE
RATE NO. 9
Availabilitv-This rate is available to any customer located within the Board of Water and Light(BWL)
service area for dusk to dawn lighting of customer's premises. All lights will be furnished and maintained by
the BWL and will be installed so as to overhang private property from existing or new poles set at points
accessible to B WL construction and maintenance equipment. This rate is not available for purposes of street,
highway, or public thoroughfare lighting.
Monthly Rate-Shall be computed in accordance with the following charges.
Luminaries on Overhead Mast Arm on existing BWL poles
High Pressure Sodium
100 W S 8.15
250 W $13.75
400 W $14.70
Mercury Vapor'
175 W S 8.55
400 W S 14.70
Floodlighting Luminaire on Bracket Arm on existing BWL poles
High Pressure Sodium
100 W $11.65
250 W $14.60
400 W $17.10
In the event additional facilities or rearrangement of existing facilities is required, the BWL shall install,
operate and maintain such facilities for the following monthly charges.
Type of Facilities
35-toot wood poles including span of overhead secondary extension $ 4.75 per pole
37-foot concrete pole including span of overhead secondary extension $11.30 per pole
Other facilities,hand set poles,or rearrangement of existing facilities 1.67% of est. cost
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for EIectric
Service incorporated herein by this reference.
' Rates apply to existing luminaires only and are not open to new business.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd Revised Sheet No.EB14
OUTDOOR LIGHTING SERVICE
RATE NO. 9
Service Contract-A written service agreement shall be entered into to take BWL service for a term of years
determined as follows:
(a) One year, if additional facilities are not required, or
(b) Three years, if additional facilities are required
(c) Five years, if monthly charges calculated at 1.67%of estimated cost,
(d) Ten years, if special contractual arrangements are made.
In the event the customer discontinues service before the end of the agreement term,the established rate for the
remaining portion of the agreement shall immediately become due and payable. The BWL will replace lamps
or make repairs when practicable after the customer has reported that the installation requires servicing. Such
replacements and repairs will be made during regular working hours. The BWL may refuse or restrict the
service provided in this rate to seasonal type customers and/or may require such customers to pay for the service
annually in advance where the permanency of the customer is doubtful or has not been demonstrated by the
customer. If relocation, including adjustment, of the outdoor protective light or relocation of other facilities
used in connection with the light is desired by the customer during the term of the contract, the BWL will
provide this service, if feasible, at the customer's expense.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
Original Sheet No. EB14-1
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Availabilitv-This rate is available to any customer desiring primary voltage service under the following
conditions: (a) the electrical requirements are supplied at one point of delivery through one metering
installation(except as provided below for Multiple Delivery Point Aggregation); (b) the Maximum Demand is
1,000 kW or more; (c) heat derived from electricity is an integral part of the customer's manufacturing process;
(c)such process heating equipment has a total connected load of 1,000 kW or more, and accounts for at least
50%of total kWh consumption; (e)all, or a portion of, the process heating load, not less than 1,000 kW, is
curtailable;and(f)the customer agrees to a service contract with the BWL for the customer's full electrical
service requirements, including provisions for load curtailment,for a period of not less than ten(10)years.
This rate is not available for standby or emergency service.
Nature of Service-The service is alternating current, 60 hertz, three phase. The primary voltage is
determined by the Board of Water and Light(BWL).
Monthlv Rate- Shall be computed in accordance with the following charges:
Basic Service Charge $250.00 per customer per month
Capacity Charge $50.00 per kW for all Curtailment Period Demand in excess of
Firm Capacity
Energy Charge $0.0740 per kWh for the first 100 hours use of Maximum Demand,
plus
$0.0350 per kWh for the excess kWh
Reactive Power Charge $0.008 per kvarh in excess of 50%of total kWh
The minimum charge shall be the sum of(a)the Basic Service Charge, (b)the amount of$2.00 times the
Maximum Demand, and(c)the amount of$6.90 times the Firm Capacity.
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Energy Cost Ad iustment -This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property,or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Billing Demand
Firm Capacity: is a specified capacity (in hundreds of kW)as set forth in the electric service
agreement with the BWL sufficient to meet the customer's requirements for non-curtailable service at
any time.
Curtailment Period Demand: is the kW supplied during the 15-minute period of maximum use
during any period of curtailment as defined by the electric service agreement with the BWL.
Maximum Demand: is the kW supplied during the 15-minute period of maximum use during the
month but not less than 60%of the highest Maximum Demand in the preceding eleven(11) months,
and not less than 1,000 kW.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
Original Sheet No. EB 14-2
PROCESS HEATING ELECTRIC SERVICE
RATE NO. 10
Multiple Delivery Point Aggregation -The 15 minute period demands of multiple delivery points of a
customer may be summed for determination of the total Curtailment Period Demand under the following
conditions: (a)the Maximum Demand at each delivery point must equal or exceed 100 kW; and(b)the total
Maximum Demand shall not be less than 4,000 kW. Aggregation shall be applicable for determination of the
Curtailment Period Demand and related charges only. All other charges, including the Basic Service Charge,
shall apply to each delivery point independently.
Metering-When the BWL elects to measure the service on the secondary side of the transformers,the metered
kW and kWh quantities thus measured will be increased by 3%for billing purposes to adjust for transformer
losses. Where the customer receives service through more than one meter installation, consumption as
registered by the different meter installations will not be combined for billing purposes,but will be billed and
computed separately except as provided for Multiple Delivery Point Aggregation.
Equipment Supplied by Customer-The customer shall be responsible for furnishing, installing and
maintaining all necessary transforming, controlling and protective equipment required for service beyond the
BWL primary-voltage delivery point. At the sole option of the BWL, a customer may lease such transformers
or other equipment from the BWL under terms established by the BWL.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations- Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
1st Revised Sheet No.EB15
TRAFFIC LIGHT SERVICE
RATE NO. 11
Availabilitv-This rate is available to any political subdivision or agency of the State of Michigan desiring
unmetered secondary service for operating traffic lights installed on streets or highways for traffic control and
guidance.
Nature of Service -The service is alternating current, 60 hertz, single phase, 120/240 nominal volts
Monthlv Rate-Shall be computed in accordance with the following charges.
Basic Service Charge $1.50 per customer per month
Energy Charge 5.0261 per watt of active load per month
The actual labor, material, miscellaneous and indirect charges experienced maintaining and relamping traffic
signals during the preceding month.
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Tax Ad iustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the Board's property,or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Determination of Active Load -The active load of flasher lamps or cyclically operated traffic control lamps
shall be 50%of total wattage of all lamps used during one complete cycle of operation. The active load of
continuous, non-intermittent steady burning tamps shall be 100%of the total wattage of all lamps used.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Rules and Regulations -Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Liguc,Lansing,Michigan
2nd Revised Sheet No. EB16
SPACE CONDITIONING AND
ELECTRIC WATER HEATING SERVICE
RATE NO. 12
Availabilitv-This rate is available to any customer desiring service for commercial/industrial space
conditioning an electric water heating furnished through a separate meter to which no other electrical
device except electric space heating, electric air conditioning, humidity control equipment or electric water
heating equipment may be connected. Electric space heating will be considered to include heating by light
system provided the primary means of space heating at the time of maximum heating requirements will be
furnished by the lighting system with the balance of the heating requirements furnished by supplementary
electric heating equipment. This rate is not available to new applications for heat for light systems received
after March 1, 1979. This rate is not applicable to the use of electricity for electric air conditioning unless the
customer has permanently installed electric space heating equipment and uses it as the principal source of space
heating, or to the use of electricity for occasional or seasonal substitute for another method of water heating.
Nature of Service-The service is alternating current, 60 hertz, single phase at Board of Water and Light
(BWL)available secondary voltage. Three phase service will be furnished at BWL option.
Monthlv Rate- Shall be computed in accordance with the following charges.
Basic Service Charge $7.50 per customer per month
Energy Charge Summer Billing Months of June through October
$0.0760 per kWh
Winter Billing Months of November through May
$0.0472 per kWh
Minimum Bill -The minimum bill is the basic service charge included in the monthly rate.
Enemy Cost Adjustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Ad iustment-Bill shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees, franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Char e-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No.EB17
RESIDENTIAL ELECTRIC SERVICE,
SENIOR CITIZEN
RATE NO. 21
Availabilitv-This rate is available to any single family or multifamily dwelling of 4 units or less when the
entire electric requirements are supplied at one point of delivery through the same meter. The customer must
be 65 years of age and head of the household being served. Service to appurtenant buildings may be taken
through the same meter.
Service under this rate is not available to any single family or multifamily dwelling of 4 units or less unit when
a portion of the residence or dwelling unit is used for commercial, industrial, or resale purposes unless the
wiring is so arranged that service for residential and non-residential purposes are metered separately.
Customers taking service under this rate shall provide evidence of age and contract with the Board of Water
and Light(BWL) to remain on this rate for at least twelve(12) months.
Nature of Service-The service is alternating current, 60 hertz, single phase, 120/240 nominal volts.
Monthly Rate - Shall be computed in accordance with the following charges.
Basic Service Charge $3.20 per customer per month
Energy Charge $0.0389 per kWh for the first 300 kWh
$0.0656 per kWh for the next 200 kWh
50.0880 per kWh for all over 500 kWh
Minimum Bill-The minimum bill is the basic service charge included in the monthly rate.
Water Heating Discount-When an approved electric water heater is permanently installed, and there is no
other method of water heating, the above rate for the first 300 kWh, shall apply to the first 450 kWh billed and
the above rate for the next 200 kWh, shall apply to the next 250 kWh billed.
Energy Cost Ad iustment-This rate is subject to an Energy Cost Adjustment factor added to the above energy
charges and calculated as defined on a separate rate schedule incorporated herein by this reference.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers-from being compelled to share such local increases.
Delaved Payment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Application Charge-A$7.00 charge shall be added to the first regular bill for all customers turning on
service at a service location irrespective of prior service with the BWL.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No. EB18
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO. 31
Availabilitv-Available to any political subdivision or agency of the State of Michigan for street lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution system
with secondary voltage available. Luminaires may be installed with no limitations as to spacing between
luminaires. Where an overhead line extension is required to serve one or more luminaires, the BWL will
furnish 350 linear feet of line extension per luminaire served from such extension. A special agreement will be
required if more than 350 linear feet of line extension per luminaire is required.
Nature of Service-The BWL will furnish, install, own,operate,and maintain all equipment comprising the
street lighting system, and supply the unmetered energy. The BWL reserves the right to furnish service from
either a series or multiple system or both.
Annual Rate-The annual rate per luminaire with fixture and setting,payable in twelve(12) monthly
installments, shall be as follows;
High Pressure Sodium Luminaire
70 W $ 62.00
100 W $ 71.00
150 W $ 81.00
250 W $100.00
400 W $128.00
Mercury Vapor Luminaire'
100 W $ 67.00
175 W $ 79.00
250 W $ 93.00
400 W $120.00
1000 W $227.00
plus an additional annual charge, depending on type of installation, of:
Wood Pole-Overhead Service None
Wood Pole-Underground Service $ 73.00
Concrete Pole-Overhead Service $113.00
Concrete Pole-Underground Service $113.00
Post Top $ 73.00
Historic - Single Top $235.00
Large Historic-Dual Top $688.00
Small Historic-Dual Top $490.00
WalTunnel - 8760 hours $100.00
Wall/Tunnel-4200 hours $ 60.00
Bollard $233.00
' Rates apply to existing luminaires only and are not open to new business except where the BWL elects, at the
customer's request, to install additional luminaires within an area already served by a mercury vapor lighting
system.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing,Michigan
2nd Revised Sheet No.EB19
STREET LIGHTING SERVICE
BOARD OWNED SYSTEMS
RATE NO. 31
Customer Contribution-The annual rates are based on fixtures normally stocked by the BWL, and installed
utilizing normal construction techniques. The BWL may, at its option, upon customer request install a street
lighting system not covered by the rates below. The customer, after installation, will be required to make a one
time contribution equal to the difference between the actual installed cost and the BWL estimated installed cost
of a standard installation. The annual unit charge for each luminaire will then be as stated below.
Unit Replacement-The BWL may, at its option, upon customer request replace existing street light units.
After installation,the customer shall make a one time contribution equal to the undepreciated value of the unit
plus the cost of removal.
Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to
termination charges, contributions in aid of construction, term or other special considerations when the
customer requests service,equipment or facilities not normally provided under this rate.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees,franchise fees, or any other charges against the BWL property, or
its operation,or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delayed Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Lignt, Lansing, Michigan
1st Revised Sheet No. EB20
This sheet has been canceled.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
1st Revised Sheet No. EB21
This sheet has been canceled.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
1st Revised Sheet No.EB22
This sheet has been canceled.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,-Lansing,Michigan
2nd Revised Sheet No. EB23
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO. 32
Availability-Available to any political subdivision or agency of the State of Michigan for street lighting
service for any system consisting of one or more luminaires where the BWL has an existing distribution system
available.
Nature of Service-The BWL will connect the customer's equipment to BWL lines, furnish the control
equipment, supply the unmetered energy, control the burning hours of the lamps, provide normal replacement
of luminaire refractors, control devices and lamps. The customer will furnish, install and own all equipment
comprising the street lighting system, including, but not limited to the overhead wires or underground cables
between luminaires and the supply circuits extending to the point of attachment with the BWL . All
maintenance and replacement of the customer's equipment except normal lamp and glass replacement shall be
paid by the customer. The BWL reserves the right to furnish service from either a series or multiple system or
both.
Annual Rate-The annual rate per luminaire, payable in twelve(12) monthly installments, shall be as follows:
High Pressure Sodium Luminaire
70 W $ 32.00
100 W $ 42.00
150 W $ 51.00
250 W $ 70.00
400 W $ 98.00
Mercury Vapor Luminaires
175 W $ 47.00
250 W $ 63.00
400 W $ 89.00
1000 W $197.00
Incandescent Luminaire2
2500 L $ 66.00
4000 L $105.00
6000 L $127.00
Maintenance Charge-The actual labor, material, miscellaneous and indirect charges experienced maintaining
street light units during the preceding month.
Combined Rates-The annual rate for units consisting of more than one luminaire shall be the appropriate
combination of individual unit charges above.
t Rates apply to existing luminaires only and are not open to new business except where the BWL elects, at the
customer's request, to install additional luminaires within an area already served by a mercury vapor lighting
system.
Rates apply to existing luminaires only and are not open to new business.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
2nd ReNised Sheet No. EB24
STREET LIGHTING SERVICE
CUSTOMER OWNED SYSTEMS
RATE NO. 32
Special Terms and Conditions-The BWL reserves the right to make special contractual arrangements as to
termination charges, contributions in aid of construction, term or other special considerations when the
customer requests service, equipment or facilities not normally provided under this rate.
Tax Adiustment-Bills shall be increased within the limits of any governmental authority or political
subdivision which levies taxes, license fees, franchise fees, or any other charges against the BWL property, or
its operation, or the production and/or sale of electrical energy, to offset any such cost and thereby prevent other
customers from being compelled to share such local increases.
Delaved Pavment Charge-A delayed payment charge of 5%of the unpaid balance, excluding delayed
payment charges, shall be added to any bill that is not paid on or before the due date.
Rules and Regulations-Service under this rate is subject to the BWL Rules and Regulations for Electric
Service incorporated herein by this reference.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing, Michigan
2nd Revised Sheet No. EB25
ECONOMIC DEVELOPMENT RIDER
Purpose-The primary purpose of this rider is to enhance economic development in the Board of Water and
Light(BWL)service area. It will be offered to customers when, in the utility's judgment, the availability of the
rider is a major factor for the customer locating or expanding its operations and when the rider will result in a
net benefit to the BWL and its customers.
Availabilitv-This rider is available to industrial customers on Large General Electric Service Rate No. 4 or
Primary Electric Service Rate No. 5 or Large Capacity Electric Service Rate No. 8. For purposes of this rider,
an industrial customer is defined as any business that manufactures a product for sale or research and
development. This would include usage for facilities directly associated with and on the same premises as the
manufacturing business such as offices and warehouses. A customer desiring service under this rider must
contract for such service on or before December 31, 2001. This rate will be available for a period of five years
from the date of the contract. All provisions of this rider are the same as the principal service rate with the
following exceptions:
New Customer-A new customer is a new industrial customer taking service on or after January 1,
1991, where the new load results in 100 kW or more of billing demand.
Existing Customer- An existing customer is an existing industrial customer who contracts for a bona
fide increase in connected load resulting in an increase of 100 kW, or 10%of their historical billing
demand, whichever is greater, or more of billing demand on or after January 1, 1991.
Monthly Rate
Capacity Charge: A percentage of the capacity charge included in the principal service rate, less credits,as
follows:
Contract
Year
1 50%
2 60%
3 70%
4 80%
5 90%
Contracted Historical Billing Demand - An existing customer's contracted historical billing demand will be
the average of the three highest registered demands, including metering adjustments, during the twelve(12)
month period prior to the contract or as established by mutual consent. The contracted historical billing
demand shall be subject to the 60%provision during the contract period. The BWL reserves the right to
establish a contracted historical billing demand for all customers with duplicate or replacement operations
within the BWL service area.
Billing Demand -For a new customer, the entire billing demand shall be subject to the capacity charge in this
rider and shall never be less than 100 kW or subject to the 60%provision. For an existing customer, or a new
customer with an established contracted historical billing demand, the contracted historical billing demand
shall be billed at the capacity charge in the customer's principal service rate. Only the billing demand in excess
of the contracted historical billing demand shall be billed at the capacity charge in this rider and shall not be
subject to the 60%provision.
Minimum Charge- A new customer shall have a minimum billing demand of 100 kW. A customer,with an
established contracted historical billing demand, shall have a minimum billing demand equal to 60%of the
contracted historical billing demand.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Lignt,Lansing,Michigan
1st Revised Sheet No. EB26
This sheet has been canceled.
Adopted:November 26, 1996 Effective: January 1, 1997
Board of Water and Light.Lansing,Michigan
1st Revised Sheet No. EB27
ENERGY COST ADJUSTMENT
The Energy Cost Adjustment permits the monthly adjustment of rates for the costs of energy incurred in
supplying electricity to retail customers. All residential and general service rates are subject to the Energy Cost
Adjustment. In applying the Energy Cost Adjustment the applicable rate per kWh shall be increased or
decreased by the amount of the current Energy Cost Adjustment. The following definitions and procedures will
be followed in calculating the monthly Energy Cost Adjustment.
Definitions
Energy Cost Adjustment-the amount per kWh by which the applicable rates shall be adjusted for billing in
each month.
Energy Costs-those costs incurred in supplying retail electricity. Such costs include fuel burned,energy costs
associated with firm power purchases, net interchange power costs,and costs associated with other temporary
power transactions. The cost of fuel burned shall include the delivered cost of fuel(base cost, escalations,
premiums/penalties, transportation, demurrage), outside lab fees and other outside costs related to fuel
procurement, and fuel additives such as freeze proofing.
Over/Under Recovery-the difference between actual Energy Costs for prior months and the amount of energy
cost recovered by means of the Base Cost of Energy and the Energy Cost Adjustment. The Over/Under
Recovery shall be added to the Energy Costs for purposes of computing the Energy Cost Adjustment for each
month.
Base Cost of Energy-the average Energy Cost included in the energy rates of the various rate schedules.
Such amount shall not be recovered by means of the Energy Cost Adjustment. The current Base Cost of Energy
is$0.017921 per kWh sold.
Procedures
Estimated Energy Cost shall be projected for a twelve-month period. Any amount of Over/Under Recovery
(positive or negative)shall be added to the Energy Cost to determine the total cost basis for the Energy Cost
Adjustment. The total cost basis shall be divided by the projected total retail billed sales for the twelve-month
period resulting in the average energy cost per kWh. The Base Cost of Energy shall be subtracted from the
average energy cost to result in the Energy Cost Adjustment.
The Energy Cost Adjustment shall be reviewed and_ as necessary, revised periodically in accordance with the
provisions of this schedule,but not less frequently than every twelve months.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light, Lansing, Michigan
1st Revised Sheet No.EB28
SCHEDULED CURTAILMENT SERVICE RIDER
Availability -This rider is available to customers on Primary Electric Service Rate No. 5. A customer desiring
service under this rider must contract to curtail its demand upon notice by the Board of Water and Light(BWL)
by approximately 1,000 kW or more. The amount of curtailable demand subject to this rider may be limited by
the Commissioners in total and by customer.
Conditions of Curtailment-The General Manager has authorization to negotiate with qualifying customers as
to terms and conditions of this rider.
Adopted: November 26, 1996 Effective: January 1, 1997
Board of Water and Light,Lansing,Michigan
3rd Revised Sheet No. EB29
LANSING CITY ENTERPRISE COMMUNITY REBATE
Purpose-The primary purpose of this rebate is to encourage investment in the proposed Lansing City
Enterprise Community. The Lansing City Enterprise Community is defined as the following 1990 census
tracts: Numbers 2,3,5,7,8,12,13,14,15,19,20,21 and 65 or as determined by the City of Lansing.
Availability-This rebate is available for a two year period from the date the Lansing City Enterprise
Community is established. All provisions of this rebate are the same as the principal water, electric or steam
service rate with the following exceptions:
1. This rebate is available only to customers installing a new water, electric, or steam service in the
Lansing City Enterprise Community.
2. This rebate is available only to customers restarting an existing idle water, electric or steam service
in the Lansing City Enterprise Community after a period of no consumption.
3. This rebate is not available to Electric Rate 4 or Electric Rate 5 customers who sign a contract for
service under the Electric Economic Development Rider.
Payment-Upon application by the customer and approval by the City of Lansing and the Board of Water and
Light, the customer will be paid a rebate on the previous 12 month's utility(water, electric,steam)charges.
The rebate is ten(10)percent of the total utility charges paid by the customer.
Adopted: November 26, 1996 Effective: January 1, 1997
Page 112
�- MINUTES OF BOARD OF COMMISSIONERS' MEETING
7 ^. r. LANSING BOARD OF WATER AND LIGHT
- I -r,iV
Tuesday,September 24,1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West
Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman O'Leary.
Present: Commissioners Christian, Graves,Lontz,O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: None
The Secretary declared a quorum present.
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER STROLLE
That minutes of regular session of August 27, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR
AT THE END OF THE MEETING.
Sale of BWL Main Office Building and Associated Parking Lot:
Nick Vlahakis, representing Paul Vlahakis of Commercial Acquisitions,L.L.C.,spoke on the Contract for
the Purchase of Real Estate Between the Board of Water and Light(BWL)and Commercial Acquisitions,
L.L.C. Mr. Vlahakis told the Board that negotiations with the BWL have been ongoing since the Board
authorized the deal on July 30, 1996,subject to meeting certain conditions. He noted that two unresolved
points in the negotiations exist at this juncture. The first issue is that the Board's Resolution 96-7-11,
adopted July 30, 1996, provided that there would be the sum of one million dollars($1,000,000)in the
form of a Letter of Credit issued in the name of the BWL The second issue is that the Contract would
terminate if not closed by December 16, 1996.
General Manager Pandy noted that negotiations with Mr. Vlahakis have stalled primarily due to
conditions placed on the transaction pursuant to Board Resolution 96-7-11. He stated that it was his sense
the Letter of Credit for one million dollars($1,000,000)was to assure the developer had sufficient capital
to put into the transaction as equity,which would represent approximately 25 percent of the five million
two hundred thousand dollars($5,200,000)purchase price. He also stated that there may have been
Page 113 Board Minutes
September 24, 1996
confusion in the way the resolution was worded. Further, the Board wanted to assure the one million
dollars($1,000,000)would be available at closing date and would not have to be borrowed,thereby the
total loan would be approximately four million dollars($4,000,000). The developers have indicated to
Mr. Pandy that they are going to endeavor to remove as many or all contingencies by December 16, 1996.
Mr. Vlahakis asked the Board to consider an amendment to Resolution 96-7-11 to waive the one million
dollar($1,000,000)Letter of Credit and to extend the December 16, 1996,Contract termination date. He
stated that Commercial Acquisitions would like the option of knowing that if they make substantial
progress and have removed most of the contingencies,with one contingency remaining, they would
indicate in writing what the remaining contingency is,what their plan is to eliminate it and what their
schedule is to resolve it.
Mr.Pandy suggested that if the Contract provides flexibility with regard to the termination date, it would
permit the closing process to move forward without the possibility of requiring a second public hearing in
the event the closing date needs to be extended.
The Commissioners discussed the Letter of Credit condition imposed by Resolution 96-7-11.
Commissioner Christian commented that the letter received from NBD Bank,addressed to Joseph Pandy,
Jr.,dated August 6, 1996,acknowledging Vlahakis Company's financial ability to obtain financing in the
$5 million range provided sufficient assurance that the developer's financial situation is sound. Following
discussion, the Commissioners consented to waiving the Letter of Credit.
The Commissioners discussed the December 16, 1996, Contract termination date imposed by Resolution
96-7-11. Nick Vlahakis stated that the due diligence has been completed,but until they have some
assurance from the City that the purchase is being considered,the removal of all contingencies is difficult-
He stated that the December 16 date does not appear to be a realistic date.
Commissioner Werbelow noted that since one of the major contingencies is the City Council approval,the
developer may or may not want to spend a lot of money on meeting the other contingencies without that
ascnrance. He suggested including language in the Contract relative to a deadline date for obtaining City
Council approval and another deadline for closing. Commissioner Pratt interjected that in a sense the
Board did put a City Council deadline by virtue of the December 16, 1996 date. Following discussion,
Commissioner Werbelow then suggested new language to the Contract leaving the option to extend the
termination date beyond December 16, 1996, to the Board of Commissioners. This would eliminate the
need for a subsequent public hearing. There appeared to be Board consensus on the suggested
amendment
With regard to the time frame,Mr.Pandy explained that the Board has to file with the City Clerk a signed
copy of the Contract,the Council would then be on notice to schedule a public hearing approximately
thirty(30)days later. If the Council approves it after the hearing,the Contract would take effect in six
weeks.
Following lengthy discussion,the Commissioners consented to the Contract for the Purchase of Real
Estate Between Commercial Acquisitions,L.L.C. and the Board of Water and Light,as amended. The
following recommendation was proposed:
Board Minutes Page 114
September 24, 1996
BY COMMISSIONER WERBELOW—
SECONDED BY COMMISSIONER CHRISTIAN
RESOLUTION REGARDING CONTRACT FOR THE PURCHASE
OF REAL ESTATE BETWEEN COMMERCIAL ACQUISITIONS, L.L.C.
AND THE CITY OF LANSING BY ITS BOARD OF WATER AND LIGHT
(96-9-6)
RESOLVED,that the draft copy of the proposed Contract for the Purchase of Real
Estate between Commercial Acquisitions,L.L.C. and the City of Lansing by its Board
of Water and Light be approved, subject to the following amendment:
Amend page 7, Item 9. Termination. This Agreement shall terminate at the end of
business on December 16, 1996,
PuFshaser-iaATifing. However if closing has not occurred by December 16, 1996,
Purchaser shall make full disclosure of contingencies yet to be removed along with
Purchaser's Estimate as to a closing date , AND THE
SELLER'S BOARD OF COMMISSIONERS MAY EXTEND THE TERMINATION
DATE.
(Additions are shown by capital letters. Deletions are shown by
Adopted unanimously.
Commissioner Lontz suggested receiving bi-weekly or monthly progress reports from the developer to
keep abreast of the status of negotiations. Mr. Vlahakis agreed to furnish this information in whatever
frequency is preferred by the Board.
Ottawa Street Station Redevelopment Project Update:
Chuck Clark,Partner,Ottawa Park Associates,Developers(OPAD), introduced Oldsmobile Public
Relations Director Gus Buenz. Mr. Clark reported that the Small Business Association of Michigan's
Board of Directors has authorized their Facilities Committee to submit a binding letter of intent with
contingencies to occupy space in the Ottawa Street Power Station. The Lansing City Club has also
indicated their interest in leasing space at the Ottawa Station.
Gus Buenz told the Board that he believes that all parties involved in negotiations to relocate
Oldsmobile's Vision Center to the Ottawa Station are making good progress. General Motors(GM)Vice
President for Corporate Affairs Bill Brooks will tour the Ottawa Station on October 8, 1996. Mr. Buenz
reported that discussions on the project have been held with Mr.Brooks;the project has been outlined and
the business case made and why it makes sense for General Motors to move forward with it. Mr. Brooks
has indicated the project sounds very good and that he would like to know more about it when he meets
with the negotiating team in Lansing on October 8. Mr. Buenz noted that if Mr. Brooks continues to think
favorably about the project,he will assist Oldsmobile General Manager John Rock to sell the plan to GM's
North American Operations(NAO) Strategy Board. Mr.Buenz further noted that part of the business
case of the project relates to the eventual move of Oldsmobile's business offices from Lansing to the
Renaissance Center(RenCen)in Detroit. Oldsmobile Division's intent is to continue to enhance the
Oldsmobile reputation and image in the Lansing community. He stated that Lansing will always be
Oldsmobile's home and the Vision Center will make great strides toward that goal. In closing,Mr. Buenz
noted that this is one of the reasons for the automaker's involvement with the Oldsmobile Park and the
R.E. Olds Museum,which is expected to be relocated to the Ottawa Station.
Page 115 Board Minutes
September 24, 1996
COMMUNICATIONS AND PETITIONS
No communications received.
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on September 10, 1996,at 5:30 p.m. to receive staff reports on the
following topics:
1. Electric Industry Restructuring
2. Electric Rates
Present: Commissioners Christian,Hassler,Lontz,O'Leary,Pratt,Royal,and Strolle.
Absent: Commissioner Evans(out of town on business)
Electric Industry Restructuring. Electric System Control Director Bill Cook reported on electric
industry restructuring. The purpose of his presentation was to:
• Bring the Commissioners up to date on restructuring activities in Michigan.
• Identify BWL response and strategies.
• Identify complex potential Board policy issues
Mr. Cook discussed electric restructuring activities in Michigan to date,BWL activities and strategies in
dealing with deregulation, including lobbying efforts,long-term contracts,customer commitments,cost of
service and rate strategy,cost control,as well as contingency planning. Also discussed were potential
Board policy issues, including participation in a competitive environment,territorial protections vs.
expansion flexibility, small customer protections,as well as stranded costs.
Comments and input were received from the Commissioners concerning strategies and efforts to date.
Electric Rate Chany-es. Treasurer/Controller Dana Tousley discussed the proposed electric rate increase.
He presented a financial forecast,a market survey,the results of an electric cost of service study,and the
results of an electric pricing study. After much discussion on the details of the impact on the various
customer classes,the following resolution was presented:
ELECrRIC RATE CHANGES TO BE THE
SUB.IEcr OF A PUBLIC HEARING
(96-9-1)
RESOLVED,that the proposed electric rates listed below and detailed in the attached
proposed rate schedules be made the subject of a public hearing prior to further
consideration by the Board of Commissioners.
Rate 1 - Residential Electric Service
Rate 2- Residential All Electric Service
Rate 3 - General Electric Service
Rate 4- Large General Electric Service
Rate 5 - Primary Electric Service
Rate 7- Municipal Water Pumping Electric Service
Rate 8- Large Capacity Electric Service
Rate 9- Outdoor Lighting Service
Board Minutes Page 116
September 24, 1996
Rate 10-Process Heating Electric Service
Rate 11 -Traffic Light Service
Rate 12-Space Conditioning and Water Heating Electric Service
Rate 21 -Residential Electric Service, Senior Citizen
Rate 31 -Street Lighting Service,Board Owned Systems
Rate 32-Street Lighting Service, Customer Owned Systems
Economic Development Rider
Energy Cost Adjustment
Scheduled Curtailment Rider
The proposed rate change cancels existing Rate 6-General Primary Service.
FURTHER RESOLVED,that a public hearing to solicit public input on this matter be
set for Tuesday, November 12, 1996,at 5:30 p.m.,in the Board of Water and Light
Office Building, 123 West Ottawa Street. Also,that the Corporate Secretary be directed
to file with the City Clerk information regarding pending changes in the rate structures.
There being no further business,the meeting was adjourned at 7:43 p.m.
Respectfully submitted,
Dave O'Leary,Chair Pro Tern
COMMITTEE OF THE WHOLE
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER LONTZ
That the Committee of the Whole Report, including Resolution 96-9-1,be approved as
submitted
Adopted unanimously.
Commissioner Joseph Graves,Jr., commented that being a new member, he would like to be briefed
further on the electric industry restructuring issue as outlined in the Committee of the Whole Report.
General Manager Pandy responded that he would be happy to cover that topic with him during the
scheduled BWL tour or anytime at Mr. Graves' convenience.
FINANCE COMMITTEE REPORT
The Finance Committee met on September 19, 1996,to review the results of the external audit of the
financial statements of the Board of Water and Light(BWL)for the year ended June 30, 1996.
Present were Commissioners Christian(Chair),Lontz,and Royal.
Representatives from Deloitte&Touche,LLP presented information on their audit methodology and
responded to procedural questions.
The Committee received a financial analysis prepared by Treasurer/Controller Dana Tousley.
Page 117 Board Minutes
September 24, 1996
Resolution to Accept the Audit of the BWL
Financial Statements for the Year Ended June 30, 1996
(96-9-4)
WHEREAS,copies of 1996 audit reports for the Board of Water and Light and for the
Plan for Employees'Pensions of the Board of Water and Light and a copy of the report
on the system of internal control were filed with City of Lansing officials by Deloitte&
Touche,LLP on September 16, 1996.
WHEREAS,the audit report for the Board of Water and Light and the report on the
system of internal control has been received and reviewed by the Finance Committee.
The auditors found no significant items that warranted submission of a management
letter.
WHEREAS, the 1996 audit report for the Plan for Employees'Pensions has been
received and reviewed by the Personnel Committee.
RESOLVED,That the Corporate Secretary is hereby directed to file copies of both audit
reports and the report on the system of internal control with the State Treasurer as
required by law.
Publishing a condensed copy of the Board of Water and Light audit report in The State Journal is not
required by law. However,it may be done at the discretion of the General Manager.
Respectfully submitted,
Ernest Christian,Chair
William Lontz
Diane Royal
FINANCE COMMITTEE
BY COMMISSIONER CHRISTIAN—
SECONDED BY COMMISSIONER ROYAL
That the Finance Committee Report,including Resolution 96-9-4,be approved as
submitted.
Adopted unanimously,
General Manager Pandy commented that the BWL had a very good financial year,one of the best in the
12 years since he has been with the BWL. Net income came in at$24.7 million;revenues were up 6.0%
percent,mainly because of the suburban water sales, expenses declined 8.0%reflecting the success of the
BWL's cost containment efforts, the BWL was able to return$6.2 million to the City of Lansing, which is
a 6.5%increase over the last fiscal year. Mr.Pandy noted that the positive financial result was also due
on the strength of the hot summer of 1995 when electric sales were up. He added that there are financial
needs going forward such as the need for a rate review.
Commissioner Christian commented that in reviewing the financial reports,all three utilities(electric,
steam and water)show a profit or a positive return on revenue,and a nice return on revenue for the
organization as a whole.
Board Minutes Page 118
September 24, 1996
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on September 23, 1996,to review and discuss the following items:
1. Pension Fund Investments
2. Performance Appraisals for the Three Board-Appointed Staff
Positions
Present were Commissioners Pratt,O'Leary,and Strolle(Chair)
Pension Plan Investment Review. Matters regarding the Employees' Pension Fund have been referred to
the Pension Fund Trustees for action.
Eckert Station's Long-Term Future. Jack Hill,Director of Electric Production,briefed the Committee
on the impact of the Eckert Station Task Force Report and recommendations to be implemented. The task
force was formed due to concern over Eckert Station's long-term future in light of the pending
deregulation. The participation process and task force recommendations to be implemented were
'zed. Discussion was held on cost savings issues such as purchasing power at a lower cost than
Eckert Station's present operating costs. The potential impact of this action on Eckert's workforce was
discussed.
Performance Appraisals. The Personnel Committee recommends the following resolution:
Performance Appraisals for General Manager,
Internal Auditor and Corporate Secretary
(#96-9-5)
WHEREAS,Performance evaluations and salary increases for the three positions reporting
directly to the Board are administered according to the BWL Wage and Salary Plan for Non-
Bargaining Unit Administrative employees;be it
RESOLVED,That the General Manager, Internal Auditor and Corporate Secretary are hereby
eligible to receive salary increases effective as of July 1, 1996, according to the Fiscal 1996
Performance Appraisal Procedure based on the Division's Compa-Ratio Allocation Chart and
the Individual Percentage Allocation Chart;and
RESOLVED FURTHER,That the ratings for the three positions reporting to the Board be
confirmed as follows:
General Manager Joseph Pandy,Jr. -Rating in the range of 5.0-6.0
Internal Auditor Kellie Willson -Rating in the range of 5.0-6.0
Corporate Secretary Mary Sova -Rating in the range of 5.0-6.0
Respectfully submitted,
John Strolle, Chair
Dave O'Leary
Peter Pratt
PERSONNEL COMMITTEE
Page 119 Board Minutes
September 24, 1996
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That the Personnel Committee Report, including Resolution 96-9-5,be approved as
submitted.
Adopted unanimously.
General Manager Pandy advised the Board that the BWL has the opportunity to purchase 100 megawatts
(MW)from Southern Electric International(SEI)as a"put" (the opportunity to put out energy to the
BWL)on 28 days that SEI chooses during a year's period. That"put" has a price of$14.00 per
megawatt-hour(MWH). To put it into perspective,Mr.Pandy stated that Eckert Station's cost is
approximately$22.00 MWH. Consequently,this energy is about one-third cheaper than what the Eckert
Station can be operated on with fuel and staffing. SEI is willing to pay the BWL a$15,000 premium to
agree to the deal. He noted that this shows the dramatic impact of the changing marketplace;that
competition is coming in very fiercely;and that it points to the need to make Eckert Station even more
competitive. He noted that Director of Electric Production Jack Hill and Human Resources Director Linda
Gardner are diligently working with the IBEW union on this issue.
Discussion was held relative to the transmission of the power and the importance of flexibility in
operating Eckert.
GENERAL MANAGER'S RECOMMENDATIONS
ELECTRIC PRODUCTION
Rea No.96-9-2
That the Board retain the services of Commercial Testing&Engineering(CT&E)to
conduct the annual mechanical coal sampling system critical inspection and bias tests at
Eckert and Erickson Stations for a two(2)year period covering fiscal year's 1997 and
1998. The selection of CT&E is based on the following criteria:
1. CT&E has satisfactorily conducted the critical inspection and bias tests at
Eckert and Erickson Stations in the past.
2. Their bid was the lowest received at$25,000 for the two(2)year period.
The other companies participating and their respective bid pricing is as follows: McCoy
&McCoy Laboratories,$36,440; Standard Laboratories, $70,000; and Katterhenry&
Associates, Inc., $37,100.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-9-2 (Electric Production)be approved.
Adopted unanimously.
Board Minutes Page 120
September 24, 1996
LEGAL
Res. No.96-9-3
Purchase the following insurance coverage:
From Voss Insurance Services,Inc.,representing the Continental Insurance Company,
Primary Property Insurance at an annual premium of$211,000 for the one year period
from September 30, 1996 to September 30, 1997.
From Voss Insurance Services,Inc.,representing the St Paul Mercury Insurance
Company, Excess Property Insurance at an annual premium of$105,000 for the one
year period from September 30, 1996 to September 30, 1997.
The expiring fire insurance company is the St.Paul Fire and Marine Insurance
Company,which has decided not to insure coal fired generating plants as part of its
book of business. The premium for the coverage for the last year was$315,984. Voss
Insurance Services has negotiated identical coverage on a layered basis with the
Continental Insurance Company,which is our current Boiler and Machinery insurer,
and the St Paul Mercury Insurance Company,one of the St. Paul companies. The next
scheduled bidding would be as originally scheduled for the 1998 policy period.
The Continental Insurance Company limit would be$20 million and the St Paul
Mercury limit would be approximately$730 million. As reported property values
change,the limit and premium will be adjusted accordingly.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-9-3 (Legal)be approved.
Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
There were no resolutions.
Pam 121 U=_4 M3-,UteS
September 24, 1996
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
Former Commissioners Phillip Hassler and Dr. Eva Evans Saluted. General Manager Pandy
recognized retiring Chairman Phillip Hassler who was in the audience. Mr.Pandy stated that Phil
Hassler's departure from the Board of Commissioners represents a significant change for the Board. He
has been a Board Commissioner for over 16 years,serving as the Chair for most of Mr.Pandy's tenure,
and is the last of the Commissioners who was here when Mr. Pandy was hired. Mr.Pandy noted that in
his 25 years of public service,he has never seen anyone give the kind of dedication,effort, intelligence
and expertise to a Board position that Phil Hassler has given to the BWL. On behalf of the staff,Mr.
Pandy stated that the BWL is going to miss his leadership,the community owes him a huge debt of thanks
for what he has done for the BWL.
General Manager Pandy commended Dr.Eva Evans also retiring from the Board with over ten years of
service. Mr.Pandy stated that Dr.Evans also has been an exemplary Board Member,bringing a great
deal of intelligence and expertise from a broad range issues to the Board. She will be missed as well.
The Board, staff and audience stood and applauded Mr.Hassler and Dr.Evans on their service and
accomplishments.
Both Mr.Hassler and Dr.Evans will be saluted at a dinner to be held in their honor on October 29.
Commissioners Joseph Graves,Jr. and Judson Werbelow Welcomed. General Manager Pandy
welcomed new Commissioners Joseph Graves,Jr.and Judson Werbelow. New Board officers were also
welcomed: Commissioner Dave O'Leary, Chair, Commissioner Diane Royal,Vice Chair,and
Commissioner William Lontz,Chair Pro Tem. For the benefit of the new Commissioners,BWL staff
members who were present in the audience introduced themselves.
Conflict of Interest Disclosure. General Manager Pandy distributed a copy of his annual Conflict of
Interest Disclosure statement,which is also to be filed with the City of Lansing.
City of Lansine Ethics Ordinance Overview. Staff Attorney Larry Wilhite presented a summary
presentation on his understanding of the Ethics Ordinance. He noted that a meeting with the City
Attorney is scheduled to clarify certain concerns with regard to the BWL. In summary, the Ethics
Ordinances accomplishes the following:
1. Establishes a complaint procedure
2. Defines prohibited transactions
3. Regulates participation in governmental decisions
4. Provides for financial disclosure by elected and appointed officials
5. Adopts a gift regulations
6. Requires lobbyist disclosure by City officers and employees
7. Provides for education concerning the chapter on Ethics
8. Provides Whistle-Blower protection.
Mr. Wilhite highlighted some of the important definitions of the Ordinance. He pointed out that some of
the definitions are so broad that clarification or amending certain language may be needed. Sections of
the Ordinance summarized included: Prohibitions, Investigative Assistance, Statement of Financial
Interest, and the Whistle-Blower Protection. Mr. Wilhite will report to the Board further once certain
ambiguous definitions and provisions are clarified.
Board Minutes Page 122
September 24, 1996
BWL Receives Environmental Stewardship Award. General Manager Pandy reported that the Gladys
Olds Anderson Environmental Stewardship Award was given to the BWL in appreciation of the role
played in the success of the Woldumar Nature Center and for the commitment to environmental education
and stewardship. This award recognizes the BWL's efforts on Adopt A River.
Communications Director John Strickler Receives Award for His Role in Adopt A River. Mr.
Pandy recognized Communications Director John Strickler who received an individual award from the
Nature Way Association Board of Directors for his leadership on Adopt A River.
Susan McCormick and Clyde Dugan Honored at Michigan Section-AWWA. Mr.Pandy recognized
Sue McCormick,Manager of Technical Support-Water Utility and Clyde Dugan,Director of Water
Utility,for their recent accomplishments. Sue McCormick was elected the first female chair of the
Michigan Section of the American Water Works Association(AWWA)at their recent conference in
Kalamazoo. Clyde Dugan was awarded the Raymond J.Faust Public Service Award in recognition of his
leadership in the water utility industry. This is the highest honor given annually to a water professional.
BWL Supports Proiect Play Through Utility Bill Stuffer Effort. A letter of thanks was received from
Project Play,dated September 16, 1996,for the BWL's willingness to mail Project Play materials in the
August utility bills. By mid-September,over$4,000 has been raised and Project Play continues to receive
over$100 per day through the BWL utility bill stuffer effort. Project Play funds neighborhood parks and
school playgrounds.
General Manager Expenses for Fiscal Year Disclosed to the Board. Mr. Pandy handed out a sheet
outlining his expenses for the fiscal year ended June 30, 1996. He noted that total expenses were
$9,056.87,broken down by credit card,Rotary Club,Country Club of Lansing,and Michigan Athletic
Club. This amount is less than in past years.
REMARKS BY COMMISSIONERS
Ten Million Gallon Underground Reservoir Landscaping and Lighting Project Completed.
Commissioner Lontz commented on the beautiful landscaping and lighting project over the 10 million
gallon underground reservoir across from the Dye Water Conditioning Plant. He stated that this project
has greatly improved the appearance of the area between Cedar and Larch Streets. He suggested
showcasing this project on the BWL's PIPELINE.
General Manager Pandy announced that the Committee of the Whole meeting will be held October 15 at
the Dye Water Conditioning Plant,which will include a tour of the reservoir area.
Dimondale Dam Project Update. Commissioner Lontz asked for an update on the Dimondale Dam
Project discussed at the March 12, 1996,Committee of the Whole meeting.
Corporate Planning Director Roger Ophaug reported that a meeting was held with residents from the
Village of Dimondale. Another meeting is scheduled with Dimondale officials in October. At that time
there may be some expression of interest to continue with negotiations to take over the dam.
Discussion Relative to August 7, 1996 Storm Response. Commissioner Christian expressed concern
with the September 18, 1996, memo to General Manager Pandy from Bill Cook,Director of Electric
System Control,relative to the August 7 storm response. Commissioner Christian stated that clearly with
the recent storm,the perception is that the BWL could have done a better job in restoring power. He
asked what actions are to be taken to assure problems have been corrected and that the BWL is still one of
the best utilities in the country.
Page 123 Board Minutes
September 24, 1996
General Manager Pandy responded that several steps have been taken. In the current CONNECTIONS
newsletter,enclosed with the utility bills, the August 7 storm is described as one of the worst storms
experienced in this area since the ice storm of 1985. The explanation includes an apology to customers
for the inconvenience,adding that it is not business as usual. Mr.Pandy noted that there were problems
with the phone system,which was in the process of being updated. Procedures and processes are being
changed to more efficiently deal with storm response in the future. Consumer Services Director Terry
Graham clarified the difference between the telephone system in the Customer Service Department and
the emergency phone system used at the Brush Electric Operating Center(BESOC). Electric System
Control Director Bill Cook remarked that BESOC's Auto-Attend emergency phone system is being
revised to incorporate into the new telephone system's procedures. This includes a trouble management
system which identifies outage problems in certain geographical areas serviced by the BWL. Electric
Transmission&Distribution Director Dave Emmons discussed changes being made in his division with
respect to storm response. He explained that after the magnitude of the storm is determined,by using
spotters in the Line Department,decisions relative to the use of outside crews,particularly in the area of
tree trimming,can be made quickly to expedite restoration.
Emnlovees'Vision Statement and Peer Review. Commissioner Pratt remarked on comments included
in the General Manager's cover memo to the Board,dated September 19, 1996, regarding the employees'
vision statement and the peer review results.
General Manager Pandy asked the Commissioners for their comments or endorsement of the BWL Vision
Statement because a cross section of BWL employees worked very hard on the statement over a couple of
months. This will set a new tone for the BWL in dealing with the competition in going forward. It sets
particularly a new tone for the collective bargaining negotiations currently in process with the IBEW. It is
critical to find win,win situations between the management and the union. It encourages productive
efforts by working together for our customers.
Commissioner Graves commented that he thought it was an excellent statement He noted that the
process involved in developing the statement was very well done.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That the BWL Vision Statement be endorsed as written.
Adopted unanimously.
Commissioner Pratt commented on the draft documents,dated September 19, 1996,summarizing the
internal peer review process. He asked for more information on what the review means.
General Manager Pandy responded that the peer review process was sparked by the notion that the BWL
was going to be evaluated by a consultant engaged by the City to scrutinize the operations of the BWL.
Management felt that if there are things internally that could be improved, they should be examined
through a peer review process. The peer review was conducted through a series of interviews with
managers and directors who stepped across their divisional lines and critiqued what is going on with fresh
eyes to look for ways to improve BWL operations. That process is ongoing; staff continues to discuss
issues in staff meetings to try to come up with ways of improving on those processes found to be
inefficient. Mr.Pandy noted that the peer review uncovered several areas of outstanding performance
where departments are being run in innovative and successW ways. This process will be a foundation for
ongoing improvements to be discussed in depth at the Board's strategic planning retreat on November 7.
Board Minutes Page 124
September 24, 1996
Standine Committee Assignments. Chairman O'Leary announced the Fiscal Year 1996-97 Standing
Committee assignments:
Executive Committee Finance Committee Personnel Committee
David O'Leary,Chair Ernest Christian,Chair John Strolle,Chair
Diane Royal,Vice Chair William Lontz Joseph Graves,Jr.
William Lontz,Chair Pro Tem Diane Royal David O'Leary
Judson Werbelow Peter Pratt
Alternates: Alternates:
David O'Leary,John Strolle Ernest Christian,William Lontz
Rescheduled Board Meeting in October. Chairman O'Leary announced that several Commissioners
will be unable to attend the regular meeting of October 22,and asked if it is agreeable to reschedule the
meeting to October 29.
There being no objection,the regular meeting was rescheduled to Tuesday,October 29,at 5:30 p.m.
New Commissioners Welcomed. On behalf of the Board, Chairman O'Leary welcomed new
Commissioners Judson Werbelow and Joseph Graves,Jr.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Former Board Commissioner Phil Hassler addressed the Board. The text of his statement follows:
Mr. Chairman. 1 just want to say Thank you! Thank you to each of the Commissioners
for all the time they have given to the community. Each of you have shared your
expertise with the Board of Water and Light. Also,I want to welcome Mr. Graves and
Mr. Werbelow.
I also want to thank the staff for the cooperation they have given me over the past 16
years.
In the July issue of PIPELINE, the article "The Reason for our Success,"I tried to
address what I believe is the reason why the Board of Water and Light will always come
out on top. The Greatest asset of any organization is its people and the quality and
dedication of the Board of Water and Light's people are second to none. The key is that
every single person makes a contribution from the Meter Reader to the Customer
Service Representative, to the Lineman, to the Boiler Operator, to Mr. Pandy. Your
efforts and talents have made this organization great, and it will continue to keep it on
top. I'm sure of it!
Two examples of this were evident tonight and discussed by Board members in the
information provided in the General Manager's Board material: They were (1) the
Vision Statement-it shows a tremendous amount of cooperation of the organization in
development and(2) the Peer Review Process-by using all the resources that you have
in the organization.
Both of these efforts will make a good organization better by uncovering opportunities
to improve.
Page 125 Board Minutes
September 24, 1996
Mr. Chairman, members of the Board of Commissioners and staff, thank you for the
opportunity to serve the Board of Water and Light and this community.
Chairman O'Leary commented that if everyone on this Board had their choice,Phil Hassler would still be
sitting on this Board. Commissioner O'Leary added that he has served on many boards in his life,but he
has never served with anyone who showed more dedication, interest and spent more time outside of the
meetings than Phil Hassler. On behalf of the Board, Chairman O'Leary thanked Mr. Hassler for giving so
much of his time to the BWL and this community and added that he will never be replaced.
The Board, staff and audience stood to applaud Mr. Hassler.
EXCUSED ABSENCES
No absences
ADJOURNMENT
On motion of Commissioner Graves,the Board adjourned at 7:03 p.m.
A :-,
&�t,
Mary E. S Stary
Filed: September 27, 1996
Marilynn Slade, City Clerk
Page 126
MINUTES OF BOARD OF COMMISSIONERS' MEETING
LANSING BOARD OF WATER AND LIGHT
0:
` r t il
Tuesday,October 29, 1996
iU �I C���
The Board of Commissioners met in rescheduled regular session at 5:30 p.m., in the Main Office
Building, 123 West Ottawa Street,Lansing,Michigan. The meeting was called to order by Chairman
O'Leary,
Present: Commissioners Christian, Graves,Lontz, O'Leary,Pratt,Royal, Strolle and Werbelow.
Absent: None
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That minutes of regular session of September 24, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR
AT THE END OF THE MEETING.
No persons spoke.
COMMUNICATIONS AND PETITIONS
No communications received.
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on October 15, 1996, at 5:30 p.m. to tour the Cedar Street Pumping
Station facilities, the 10 Million Gallon Reservoir Area and to receive staff reports on the following items:
1. Safe Drinking Water Act
2. Special Counsel Selection
3. Economic Development(This item was postponed until the next
Committee of the Whole meeting scheduled to be held November 12, 1996)
Page 127 Board Minutes
October 29, 1996
Present were Commissioners Christian, Graves,Lontz,O'Leary, Pratt,Royal, Strolle,and Werbelow.
Tour of the 10 Million Gallon Reservoir and Pumping Station. The Commissioners, accompanied by
Mayor Hollister and staff,were given a tour of the 10 Million Gallon Reservoir area to view the completed
landscape project. A tour of the Cedar Street Pumping Station and the Water Conditioning Plant facilities
followed.
Special Counsel Selection. Staff Attorney Larry Wilhite presented an overview of the evaluation process
undertaken to narrow the list for special counsel recommendations for legal services to the Board of Water
and Light(BWL).
Mr. Wilhite reported that special review criterion considered in the review process included: past service
to the BWL,compatibility,fee structure,and reputation in specialty areas with the overriding component
being the BWL's anticipated need for specialized legal services. The BWL has five basic areas of need
under normal circumstances: Public Utility/Energy Law,Public Finance or Bonds,Environmental Law,
Labor/Employment Law,and Municipal Law.
BY THE COMIv1=E OF THE WHOLE:
Selection of Special Counsel
(Resolution 96-10-1)
RESOLVED, That the General Manager be authorized to retain the following law firms
as special counsel on an as-needed basis for a period of two years through December 31,
1998. These firms will be submitted to the City Attorney for recommendation to the
City Council. Use of special counsel would be subject to the recommendation of Staff
Counsel and the approval of the General Manager.
• Varnum,Riddering
• Dickinson Wright
• Foster Swift
• Willingham, Cote'
• Canady Law Offices
Due to conflict of interest,certain firms will be prohibited from providing services in the area of Public
Utility/Energy law.
i oI niissioner Jud Wei-below did not participate in the discussion and did not vote on the proposed
resolution.
Safe Drinking Water Act-1996 Re-Authorization. Sue McCormick, Manager of Water Technical
Support, gave a presentation on the Safe Drinking Water Act(SDWA) 1996 Re-authorization. She
reported on major changes of the Act that will have an effect on water systems in the United States:
STANDARD SETTING PROCESS
• The Environmental Protection Agency(EPA) must set known hazards as priority
• Minimum of 5 new contaminants evaluated for regulation every 5 years
• Large utilities will monitor for vulnerability
Impacts:
• Monitoring should be significantly reduced for regulated contaminants
0 Maximum 5 every 5 years vs. 25 every 3 years
Board Minutes Page 128
October 29, 1996
• Monitoring Unregulated Contaminants
• Maximum 20 every 5 years for public water suppliers serving more than 10,000
customers
CONSUMER CONFIDENCE REPORTS
• EPA to develop a regulation by 8/6/98
• Minimum Requirements:
• Annual mailing to individual customers
• The actual maximum contaminant level and MCL goal of each contaminant detected
• Health concern statement for any violation of a regulated contaminant
• Detects of unregulated contaminants where monitoring is required
Impacts:
• BWL intent is to be ahead of the compliance schedule for disclosure of water quality
information
iuvoivenient widi the Arnerlcau Water Works Association(A`NIN e"n)and IvEchlgan
Department of Environmental Quality(MDEQ)to stay informed and positively impact the
regulatory process
SOURCE WATER PROTECTION
• The EPA must publish guidance for state source water assessment programs
• MDEQ has approved a wellhead protection program-must be extended to source waters
• Public Water Suppliers(PWS)are eligible for monitoring relief after completion of the
assessment in the source water delineated area
Impact:
• BWL is a partner in a regional wellhead protection program
• Monitoring relief may be postponed until completion of the assessment
• Program delays possible if communities want to apply for State Revolving Loan Funds
(SRF)for project
• MDEQ reorganization of Wellhead Program-unknown at this time
CAPACITY DEVELOPMENT
• EPA will develop guidance on capacity development
• States must develop programs to assess the technical,financial and managerial capacity
of public water supplies
Impact:
• Extends regulatory purview
• May significantly increase the cost of running the state programs(fees)
• May increase numbers of small systems deemed non-viable(market potential)
STATE REVOLVING FUNDS
• Creates a water SRF similar to wastewater
• Allows State flexibility to intermingle funds(33%)and set priorities.
• Take backs:
• 20%if no capacity development program
0 20%if Operator Certification program does not meet EPA guidelines
Page 129 Board Minutes
October 29, 1996
• Uses and Set Asides
• Program administration
• Capacity development
• Disadvantaged communities
• Source water protection
• EPA health effects research
• 15%to systems serving over 10,000
There being no further business,the meeting adjourned at 8:00 p.m.
Respectfully submitted,
William Lontz, Chair Pro Tern
COMMITTEE OF THE WHOLE
BY COMMISSIONER LONTZ--
SECONDED BY CON IISSIONER CHRISTIAN
That the Committee of the Whole Report, including Resolution 96-10-1,be approved as
submitted.
Adopted as follows:
Ayes Christian, Graves,Lontz,O'Leary, Pratt,Royal,and Strolle-7
Nays: None
Abstain:Werbelow
Commissioner Werbelow did not participate in the discussion.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No. 96-10-2
It is recommended that the FY 1996/97 Planned Capital Projects Budget be increased in
the amount of$200,000 to cover the cost of completing life extension work on the
Cooling Tower at the Erickson Station. These repairs will extend the operating life of
the Cooling Tower until approximately the year 2001,at which time a project will be
submitted for a complete rebuild or replacement.
An extensive inspection was completed on the Cooling Tower after damage to the hot
water basins was noticed during the planned eighteen month outage in April. During
the inspection it was determined that the tower had reached the point where extensive
repairs would be needed to avoid the risk of collapse. The condition creates a potential
safety hazard to operating personnel and a reliability risk for operation of the Erickson
Station Generating Unit. The Cooling Tower has essentially reached the approximate
end of its life. The requested life extension work will allow safe and economic operation
of the cooling Tower until a rebuild or replacement project can be scheduled to coincide
with an extended outage on the turbine.
Board Minutes Page 130
October 29, 1996
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-10-2 (Administrative)be approved.
Adopted unanimously.
COMMUNICATIONS
Res. No. 96-10-3
Authorize Market Strategies, Inc., of Southfield,Michigan,to conduct a semi-annual
customer attitude survey at a price not to exceed$22,000.
The survey is used to determine the perception of residential customers toward the BWL
and its services,and to measure customer satisfaction,loyalty,and all favorability,as
well as the performance of communications and customer service activities.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-10-3 (Communications)be approved.
Adopted unanimously.
ELECTRIC PRODUCTION
Res. No. 96-10-4
That the Board enter into a three year purchase order with Benetech,Inc., of Aurora,IL
for Freeze Conditioning Chemical Commodity Supplier and Monitoring Services. The
chemical commodities and monitoring services will be provided at the time coal is
loaded into railcars for delivery to Eckert and Erickson stations and the Moores Park
Steam Plant. The purchase order particulars are as follows:
1. The three year time frame will cover the winter seasons for FY 97,FY 98&
FY 99.
2. The unit pricing for chemical commodities and monitoring services will remain
firm for the entire three-year period.
3. The pricing for the chemical commodities and monitoring services is as follows:
Page 131 Board Minutes
October 29, 1996
Product# Price
Freeze conditioning agent(Electric) BT-922 $ 0.68/gallon
Freeze conditioning agent(Steam) BT-910 $ 1.66/gallon
Railcar side release agent(Both) BT-945 $ 0.90/gallon
Monitoring Services(Both) $14.00/hour
By entering into this three-year purchase order with Benetech,Inc.,the BWL will be
able to maintain its successful coal freeze conditioning treatment program while at the
same time minimizing cost. Further,Benetech,Inc., has been BWL's supplier of freeze
conditioning chemicals and monitoring services for the past four winter seasons during
which time they have demonstrated their ability to meet the customer's needs while
containing costs in a very volatile chemical market.
This recommendation is based on a sole source bid.
BY COMMISSIONER STROLLE—
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-10-4(Electric Production)be approved.
Adopted unanimously.
LEGAL
Res. No. 96-10-5
Purchase the following insurance coverage: From Lyman and Sheets Insurance Agency,
representing the American Empire Surplus Lines Insurance Company,Umbrella
Liability Insurance at an annual premium plus surplus lines tax of$79,000 for the one
year period from September 30, 1996 to September 30, 1997.
The Lyman and Sheets Insurance Agency provided,through the Gulf Insurance
Company,the first layer of Umbrella Liability Insurance at an annual premium of
$75,000 for the one year period from 9/30/95 to 9/30/96. The renewal policy with this
company would have excluded EMF related liability claims and would not be acceptable.
The limit of liability for this layer is$5 million.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-10-4(Legal)be approved.
Adopted unanimously.
Board Minutes Page 132
October 29, 1996
PENSION
Res. No. 96-10-6
That Jeffrey E. Lugo, Clerk B in Customer Service,be placed on a disability pension of
$660.00 per month effective December 8, 1995. He has selected Option I with Workers'
Compensation Offset with the provision that after his death, said amount of pension
shall continue to his wife,Linda M.Lugo,if she survives him, as provided under
Option I.
Mr. Lugo has worked for the BWL for 17.57 years and is 39 years of age.
Res. No. 96-10-7
That Scott A. Bischoff,Equipment Mechanic Helper in Fleet Services,be placed on a
disability pension of$454.26 per month effective September 10, 1996. He has selected a
straight disability pension with Workers'Compensation Offset
Mr. Bischoff has worked for the BWL for 11 years and is 37 years of age.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER CHRISTIAN
That Resolutions 96-10-6 and 96-10-7 (Pension)be approved.
Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
Page 133 Board Minutes
October 29, 1996
RESOLUTIONS
LANSING BOARD OF WATER AND LIGHT
RESOLUTION HONORING PHILLIP E.HASSLER
(#96-10-8)
WHEREAS,In recognition of his outstanding service to the Board of Water and Light, it is with great
respect that the members of this Board join in offering highest tribute to Phillip E.Hassler as he completes
his tenure as a Commissioner with over sixteen(16)years of service. Beginning with his appointment to
the Board on July 1, 1980,Phil Hassler has served with consistent professionalism and integrity and has
proven to be a leader within this community. He held the offices of Vice Chair in 1984 and 1985,and
was elected Chairman of the Board in July 1986,an office he held for the remainder of his tenure. He
also served on the Executive,Finance and Search Committees;and
WHEREAS,Phil Hassler was born in Lansing and began his working career in 1952 as a meter reader
for the Board of Water and Light(BWL). During his ten-year career with the BWL,there was a two-year
leave of absence to fulfill his military obligation and he also received his education at Michigan State
University,earning a bachelor's and master's degrees. Following his employment at the BWL,he went to
work for General Motors in 1962,a company at which he is still employed,and followed a steady
progression of promotions within the company's financial structure;and
WHEREAS,Phil Hassler's 34-year career with General Motors,in directing financial reporting and
analysis,brought to the BWL expertise in the technical financial aspects of industry, together with an
understanding of the local economy and an excellent knowledge of economic incentive issues that
maintain and attract business in Lansing; and
WHEREAS,It is most apparent that Phil Hassler sincerely cares about the employees and the
ratepayers who are served by the BWL. His leadership guided the Board's mission of providing lower
utility rates with high levels of reliability. Among significant BWL events during his service were: the
Belle River purchase(1982), selection of the current General Manager(1984), centennial anniversary of
the BWL(1985), Strategic Planning(1986), Share the Success employee improvement incentive program
(1987), installation of a new Customer Information System combining electric, water and sewer bills on a
single monthly statement(1990),Belle River power entering the system(1991), the attempted sale of the
BWL(1992),the first ever early retirement and voluntary separation program(1994), innovative mini-
bond financing for facilities(1989 and 1994),water regionalization(1995), and efforts to redevelop the
Oitawa'rower Plant(1996).
NOW, THEREFORE, BE IT RESOLVED, That the highest tribute be hereby accorded to
Phillip E.Hassler as he brings to a close his tenure as a Board Commissioner. In regular session this 29th
day of October 1996, may he know of the respect and admiration that are held for him by this Board,the
employees of this utility and the people of this community for his total commitment and dedication. We
wish Phil and his lovely wife,Helen,the very best and well deserved happiness and fulfillment.
Adopted unanimously.
Board Minutes Page 134
October 29, 1996
LANSING BOARD OF WATER AND LIGHT
RESOLUTION HONORING DR EVA L.EVANS
(#96-10-9)
WHEREAS, It is with pleasure and a privilege that the members of the Board of Commissioners
honor Dr. Eva L. Evans as she brings to a close an outstanding tenure of public service to the Board of
Water and Light and the people of this city as she completes over ten(10)years of dedicated service; and
WHEREAS, This distinguished community leader was appointed to the Board on February 25, 1986.
She was elected Vice Chair in July 1994 and served in that capacity for two years. While she served on
the Board and as a member of the Executive,Finance and Personnel Committees,she played a pivotal role
in the success of the Board of Water and Light by sharing her expertise from a broad range of issues just
as she has done in numerous local, state,and national boards. She has brought to this Board an insight
into the concerns and needs of this community;and
WHEREAS,?fir. Eva L.Evans began her higher education at Easter:Michigan University and Wayne
State University and finished with a Ph.D. in Administration and Higher Education,English from
Michigan State University. She is known nationally for her commitment to education and her dedication
to public service. She recently retired as the deputy superintendent for the Lansing School District and
continues to make educational opportunities a reality for all young people. This community leader has
been eloquent and effective both locally and nationally in providing a voice for excellence in education,
quality of life in the community,civil rights issues and community-owned public power systems. She
currently serves as the International President of Alpha Kappa Alpha,the world's oldest African-
American sorority, a 130,000-member association; and
WHEREAS, We are sincerely grateful for Dr.Evans' outstanding vision,leadership and intelligence.
The people of the Lansing community and the employees of the Board of Water and Light have benefited
from her long hours and hard work on this Board. A woman of great dignity,she may never know how
many lives she has touched;but there are many who know her value. Among significant BWL events
during her tenure on the Board were: Strategic Planning(1986), Share the Success employee
improvement incentive program(1987), installation of a new Customer Information System combining
electric,water and sewer bills on a single monthly statement(1990),Belle River power entering the
system(1991),the attempted sale of the BWL(1992), the first ever early retirement and voluntary
separation program(1994),innovative mini-bond financing for facilities(1989 and 1994),water
regionalization(1995),and efforts to redevelop the Ottawa Power Plant(1996).
NOW, THEREFORE,BE IT RESOLVED,That the highest tribute be hereby accorded to
Dr.Eva L. Evans for all that she has contributed as a member of this Board. On this 29th day of
October, 1996, we are proud to join her many Board of Water and Light mends and admirers in
extending gratitude for a distinguished term of public service. We will all miss her and wish her success
in all of her future challenges.
Adopted unanimously.
GENERAL MANAGER'S REMARKS
Main Office Building Sale Update: General Manager Pandy reported that a number of documents have
been provided to Paul Vlahakis of Commercial Acquisitions L.L.C.,as part of due diligence and the full
disclosure process by the Board of Water and Light(BWL)relative to the main office building sale. The
public hearing on the purchase of the BWL Main Office Building has been set for November 4, 1996.
After a public hearing, the City Council usually refers the matter to a committee for its recommendation.
Page 135 Board Minutes
October 29, 1996
Dimondale Property Update. Mr.Pandy reported that the Dimondale Village Council has
communicated their interest in exploring the possibilities related to acquisition of BWL properties near
the Dimondale dam. The Village Council is requesting that the Board refrain from entering into any
negotiations with other offers of purchase until it has had adequate time to develop and consider a plan for
the disposition of the dam and other parcels.
Sale Proceeds of BWL Property Sales. Mr.Pandy reported that when the BWL sold surplus property at
6551 S.Pennsylvania Avenue to Aldi,Inc.in 1994,the City of Lansing approved the property sale,but
there was never an agreement as to the disposition of the proceeds of the sale. The City has proposed
utilizing some of that money for a Central Area Comprehensive Master Plan(for the downtown)and a
Geographic Information System(GIS). The proposal has been referred to the Council's Committee on
Ways and Means for further discussion and a recommendation for Council action. The funds are being
held in an interest-bearing escrow account,under Treasurer/Controller Dana Tousley's control,for
distribution as shall be determined by the City and BWL. The Board engaged in lengthy discussion
relative to setting a prxpss for the use of proceeds from property that the City of Lansing conveyed to the
BWL for one dollar(S 1.00). The Board agreed with the concept of utilizing these funds for economic
development purposes to be jointly administered by the Mayor and the General Manager. Mr.Pandy was
directed to discuss this matter further with the Mayor and City Council for clarification and consensus on
the disbursement of funds. Once a consensus is reached with the City,Mr. Pandy is to bring a resolution
to the Board proposing guidelines to administer the proceeds from similar property sales,setting his
spending authority as outlined in the BWL Purchasing Policy.
APPA Publication on the Value of a Public Power System. Mr.Pandy called attention to a booklet
published by the American Public Power Association, 1996, entitled, THE VALUE oFA PUBLIC POWER
DIs7RIBunoNS'Ys7nw INCREASING, NoTDECREAswG. Copies of this publication are being distributed to
City of Lansing officials as an information piece on competition.
Some East Lansing Areas Interested in Chanting from CPCo to BWL Electric Service. Mr.Pandy
reported that he was contacted by the City Manager of East Lansing to discuss rate concerns expressed by
residents from a couple of areas in East Lansing served by Consumers Power Co. (CPCo). Residents in
the flower pot neighborhood of East Lansing and also property along Lake Lansing Road in the vicinity of
Coolidge Road served by CPCo are unhappy with their rates and would like to switch over to BWL
service.He informed them of current prohibitions in law against taking customers from another utility
company. Mr.Pandy noted that East Lansing officials initiated this discussion. Following Mr.Pandy's
report,the Commissioners suggested that it would be more appropriate for East Lansing to formally
communicate to both CPCo and the BWL to cooperatively consider their request.
BWL Float Takes First place irf It-iver f s±'s Electric Float parade. Mr.Pandy reported.that the
BWL's entry in the Riverfest Electric Float Parade competition won two awards:The Admiral's Award
for the best float in the event and the Minnow Award,judged on the basis of"lame,cool and way cool."
The Minnow Award represents the float was"way cool." Anne Stump and Barb Reynolds from the
Community Events Committee were on hand to receive the awards. Mr. Pandy noted that the BWL's
Construction Services Department(CSD)was instrumental in the float building effort. He congratulated
John Lipkowitz, CSD Manager;Don Taylor,CSD Supervisor, and Fritz Domres of Environmental
Services for their excellent work.
Commissioners Sign Vision Statement. Mr.Pandy reminded the Commissioners to sign the Vision
Statement,which will be rolled out to the employees on October 30.
Steam Contract Negotiations with General Motors. Mr. Pandy reported that there have been numerous
discussions with General Motors(GM)on the steam contract.. Negotiations are closer to reaching
agreement.
Board Minutes Page 136
October 29, 1996
Ottawa Station Power Plant Redevelopment Update. Mr. Pandy reported that discussions are
continuing with John Rock, General Manager of Oldsmobile,and who is retiring shortly. His staff is
continuing to press to reschedule a new date for GM's Vice President for Corporate Affairs Bill Brooks to
tour the Ottawa Station. A prior scheduled date of October 8 was canceled due to GM and UAW contract
negotiation matters. Mr. Rock and Ottawa Park Associate,Developers(OPAD)continue to remain
optimistic.
REMARKS BY COMMISSIONERS
Water Extension Proposal in Village of Dimondale. Commissioner Lontz inquired on the reasoning
behind the defeat of the BWL water extension proposal in the Village of Dimondale.
Mr. Pandy responded that the Village of Dimondale made a decision that the up front cost to extend water
mains into the Village would have to be borne by the property owners on the basis of their front footage.
The Village Council decided to collect the cost up front from the property owners, rather than amortizing
it,which appears to be the reason for the defeat.
Leased Private Trainset Generates Savings. Commissioner Strolle praised the successful results in
savings derived from the leased railcars for coal delivery to Erickson Station. It was noted that the
savings from the leased private trainset are now projected to be greater than earlier projected in excess of
$160,000 per year.
Erickson Boiler Experiences Tube Leak. General Manager Pandy saluted Electric Production Director
Jack Hill and employees in Production Maintenance and Erickson Station for their quick and efficient
work in repairing the boiler which recently failed on October 25 as the result of a tube leak.. He noted
that within days, a section of the economizer also failed. An investigation showed that part of the
economizer had eroded by 25 years of flyash and soot passing over it. Mr.Pandy indicated that the
economizer will eventually need to be replaced in the near future.
Public Power Week Celebration. Commissioner Pratt asked for a recap of Public Power Week.
Public Information Director John Strickler reported that open houses were held at Erickson Station,the
Brush Electric System Operations Center(BESOC),and a series of four open houses on the evenings of
October 21-24 were held at various community centers from the various wards. Mr. Strickler commented
that this was one of the most successful Public Power celebrations held by the BWL. It was a very positive
experience for both the customers and BWL employees who participated in the open houses. Mr. Strickler
gave credit to Public Information Analyst Nancy Tarras who organized most of the open house activities.
Great support was also received from all three utilities,including Consumer Services,Environmental
Engineering,Human Resources, and employees participating in the Community Events Committee.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO
SPEAK TO THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
No persons spoke.
Page 137 Board Minutes
October 29, 1996
EXCUSED ABSENCES
No absences
ADJOURNMENT
On motion of Commissioner Graves,the Board adjourned at 6:10 p.m.
Mary .. va, Secretary
Filed.• November 4, 1996
Marilynn Slade, City Clerk
Page 138
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT _
Tuesday,November 26, 1996
The Board of Commissioners met in regular session at 5:30 p.m., in the Main Office Building, 123 West Ottawa
Street,Lansing,Michigan. The meeting was called to order by Chairman O'Leary.
Present: Commissioners Graves,Lontz,O'Leary,Pratt,Royal, Strolle and Werbelow-7
Absent: Commissioner Christian(out of town)-1
The Secretary declared a quorum present.
The Invocation was delivered by Chairman O'Leary.
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES
BY COMMISSIONER STROLLE-
SECONDED BY COMMISSIONER PRATT
That minutes of rescheduled regular session of October 29, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW,OR AT THE END OF
THE MEETING.
Jim Harken, 315 Bingham Lansing, spoke on the House Service project instituted by the BWL at Eckert Station.
He described the purpose of the project and indicated that he does not believe the project was installed in the most
reliable manner,. claiming it had no payback and no value.
Max Zemer, 527 Edison,Lansing,Business Manager of IBEW(International Brotherhood of Electrical Workers)
Local 352 spoke to the era that the BWL is entering into with labor/management relations. He noted that the
BWL's new Vision Statement,a partnership which is part of the contract,and a Living Agreement will go a long
way to address the upcoming changes from deregulation. This partnership will become the driving process that
enables the BWL to continue to change and stay competitive and better serve the public. He urged the Board's
approval of the union contract(Resolution 96-11-8-Personnel Committee Report).
Page 139 Board Minutes
November 26, 1996
COMMUNICATIONS AND PETITIONS
A letter of thanks from former BWL Commissioner Eva Evans for the BWL dinner given in her honor.
Received and placed on file.
A letter from Michael Gillenkirk, 1321 Jerome Street,Lansing,regarding his opposition to the proposed electric
rate increase and increasing taxes in the City of Lansing.
Received and placed on file.
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on November 12, 1996, to discuss economic development issues and related
matters.
Present were Commissioners Christian,Graves,Lontz,Pratt,Royal, Strolle,O'Leary and Werbelow.
Economic Development. Mark Taylor,Manager of Electric Customer Projects&Marketing,reviewed an action
plan to encourage economic development within the Board of Water and Light service territory,which includes:
1. Retention and customer satisfaction
2. Load growth and redevelopment
3. Communication of the economic development agenda
Following discussion,there was consensus among the Commissioners with the strategies presented. The
Committee of the Whole recommends approval of the following resolution:
Economic Development Policy
(Resolution 96-11-1)
It is the policy of the Board of Water and Light to support and participate in the economic
development of the Greater Lansing area by providing utility infrastructure,available surplus
properties,and targeted rates and services,when the development activity includes the following:
• Contributes to the vitality of the Greater Lansing area,
• Projects a sound business case for the Board of Water and Light and its customers,and
• Retains, grows, or diversifies the Board of Water and Light customer base.
Steam Supply Contract. Joette Woodard-Yauk,Director of Steam Utility,presented an overview of the final draft
of the steam supply contract with General Motors' Small Car Group(SCG), subject to legal review.
Respectfully submitted,
William D.Lontz, Chair Pro Tern
COMMITTEE OF THE WHOLE
Board Minutes Page 140
November 26, 1996
BY COMMISSIONER ROYAL--
SECONDED BY COMMISSIONER STROLLE
That the Committee of the Whole Report including Resolution 96-11-1,be approved as
submitted.
Adopted unanimously.
PERSONNEL COMMITTEE REPORT
The Personnel Committee met on November 25, 1996,to review the tentative IBEW Local 352 Labor Agreement.
Committee Members Present: Commissioners Strolle(Chair)and Christian, alternate. Commissioner Werbelow
was also present.
Committee Members Excused: Commissioners Graves,O'Leary and Pratt.
Human Resources Director Linda Gardner reported on the negotiated labor agreement between the BWL and the
IBEW Local 352. She presented a summary on the major issues resolved along with a cost benefit analysis relative
to total compensation. IBEW Business Agent,Max Zemer,was present and commented on the positive aspects of
the new Mutual Grains Bargaining experience.
Following discussion,the committee concurred with the negotiated agreement. The Personnel Committee
recommends that the following resolution be approved:
Approval of Union Contract
(Resolution 96-11-8)
WHEREAS,On September 26, 1996,the Board of Water and Light(BWL)and International Brotherhood of
Electrical Workers(IBEW)Local 352 began a new era of union contract negotiations. Instead of using traditional
"confrontational"or"demand"bargaining,the BWL used a method called Mutual Gains Bargaining; and
WHEREAS,With Mutual Gains Bargaining,both sides independently identified"core" issues that they would
like resolved. Both sides then worked together to identify and choose a solution that resolves each issue in a way
that both sides can live with;and
WHEREAS,the Mutual Gains Bargaining team used the new Vision Statement as a driving influence in their
decision making;and
WHEREAS,The BWL and IBEW Local 352 recognize the critical and ongoing need to improve customer service
and reduce cost. As part of this labor agreement,the BWL and IBEW Local 352 are committed to a partnership;
working together to improve the BWL's ability to compete in a rapidly changing marketplace.
WHEREAS,The proposed agreement is within the parameters established by the BWL and within budget
limitations.
NOW,THEREFORE,BE IT RESOLVED That subject to IBEW Local 352 member ratification, scheduled for
the week of December 9, 1996,the three-year agreement reached between Management and the Union Negotiating
Committee retroactive to November 1, 1996,unless otherwise designated in the agreement, is hereby approved.
The labor agreement is to expire at Midnight,October 31, 1999.
Page 141 Board Minutes
November 26, 1996
FURTHER RESOLVED That subject to legal review, the revised Pension Plan is hereby approved retroactive to
July 1, 1996 and is to expire at Midnight, June 30, 2002.
FURTHER RESOLVED That the Chairman and Secretary be authorized to sign the labor agreement
incorporating the settlement changes. An executive summary of major issues resolved is attached(see attachments
at the end of the minutes. Appendices: A:Summary of Tentative Contract Settlement,B:Settlement Cost, and
C:Pension Settlement Issues).
Respectfully submitted,
John Strolle, Chair
PERSONNEL COMMITTEE
BY COMMISSIONER ROYAL--
SECONDED BY COMMISSIONER PRATT
That the Personnel Committee Report, including Resolution 96-11-8,be approved as submitted.
Adopted unanimously.
GENERAL MANAGER'S RECOMMENDATIONS
CONSUMER SERVICES
Res.No.96-11-2
Authorize Check Express-Frandor,405 N. Clippert,Lansing,as a paystation,upon completion of
the usual paystation agreements and bonds.
The previous paystation in this area was State Employees Credit Union,located one block east.
They served an average of 360 customers and collected approximately$17,000 per month. Re-
establishing a paystation in this area will show our commitment to maintaining service levels in
the community.
-------------
Rea No. 96-11-3
Authorize Goff Food Stores,with the following four locations,as paystations,upon completion of
the usual paystation agreements and bonds:
1. 1671 Haslett Road,Haslett
2. 6075 N.Hagadom Rd.,East Lansing
3. 2380 N. Cedar Street,Holt
4. 1619 W. Grand River, Okemos
The four Goff locations average 45,000 customers per month. The BWL customers that shop at
these Goff locations have expressed a desire for paystations. The termination of the State
Employees Credit Union and the MSU Credit Union as paystations had served an average of
2000 customers and collected approximately$100,000 monthly,leaving a significant void. The
addition of these Goff Stores as paystations will re-establish this convenience to our customers.
Board Minutes Page 142
November 26, 1996
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER ROYAL
That Resolutions 96-11-2 and 96-11-3 be approved
Adopted unanimously.
LEGAL
Rea No. 96-11-4
Purchase the following insurance coverage: From Voss Insurance Services, Inc.,representing the
Continental Casualty Insurance Company,Boiler and Machinery Insurance at an annual
premium of$94,100 for the one year period from September 30, 1996 to September 30, 1997.
The Voss Insurance Services,Inc. represented the Continental Insurance Company for Boiler and
Machinery Insurance at an annual premium of$94,100 for the one year period from September
30, 1995 to September 30, 1996. During the past year, Continental Insurance Company merged
with the CNA Insurance Companies and is no longer used by the CNA Insurance Companies for
this coverage. Continental Casualty Insurance Company is one of the CNA Insurance
Companies.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER PRATT
That Resolution 96-11-4 be approved.
Adopted unanimously.
PENSION
Rea No. 96-11-5
That Howard L.Liberty be placed on an early reduced,vested pension of$438.66 per month
effective December 1, 1996. Mr.Liberty's option is for a straight pension.
Mr. Liberty worked for the BWL from March 16, 1970 to September 26, 1986,for a total of
16.53 years. He will be 55 years of age at his retirement.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER PRATT
That Resolution 96-11-5 be approved.
Adopted unanimously.
Page 143 Board Minutes
November 26, 1996
TECHNICAL SERVICES
Res. No. 96-11-6
It is recommended that the Board enter into a three year contract with Brooks Fiber
Communications of Grand Rapids,Michigan,for the Centrex Telephone Service at the Board of
Water and Light facilities.
Based on the present number and type of telephone stations,the Basic Service Contract amount
is:
First Year $84,342.33
Second Year 111,394.91
Third Year 121,521.71
The contract with Ameritech for the Centrex Telephone Service expired September 22, 1996.
Ameritech offered a three year extension at the rate of$164,317.56 per year.
We requested information from A T&T on local service,but they did not respond.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER WERBELOW
That Resolution 96-11-6 be approved.
Adopted unanimously.
Res. No. 96-11-7
Be It Resolved,that the following electric rate schedules(attached-Exhibit 1)be adopted and
applied to all electricity used or services rendered on or after January 1, 1997. These rate
schedules were the subject of a Public Hearing on November 12, 1996. (Note: Rate Schedules
are attached at the end of the minutes, after page 149)
Rate 1 Residential Electric Service(Sheet No.EB 1)
Rate 2 Residential All-Electric Service(Sheet No.EB3)
Rate 3 General Electric Service(Sheet No. EB5)
Rate 4 Large General Electric Service(Sheet Nos. EB7&EB8)
Rate 5 Primary Electric Service(Sheet Nos. EB9&EB 10)
Rate 7 Municipal Water Pumping Electric Service(Sheet No. EB 11)
Rate 8 Large Capacity Electric Service(Sheet Nos. EB12&EB12-1)
Rate 9 Outdoor Lighting Service(Sheet Nos. EB 13 &EB 14)
Rate 10 Process Heating Electric Service(Sheet Nos. EB14-1 &EB14-2)
Rate 11 Traffic Light Service(Sheet No.EB15)
Rate 12 Space Conditioning and Electric Water Heating Service(Sheet No.EB16)
Rate 21 Residential Electric Service-Senior Citizen(Sheet No.EB17)
Rate 31 Street Lighting Service-Board Owned(Sheet Nos.EB18&EB19)
Board Minutes Page 144
November 26, 1996
Rate 32 Street Lighting Service-Customer Owned(Sheet Nos. EB23 &EB24)
Economic Development Rider(Sheet No. E1325)
Energy Cost Adjustment(Sheet No. EB27)
Scheduled Curtailment Service Rider(Sheet No. EB28)
Lansing City Enterprise Community Rebate(Sheet No. EB29)
Be It Further Resolved, that the following electric rate schedules now in effect be rescinded for
billing purposes for any electricity used or service rendered on or after January 1, 1997.
Effective Date
Rate 1 Residential Electric Service 10-15-94
Rate 2 Residential All-Electric Service 10-15-94
Rate 3 General Service 01-01-92
Rate 4 Large General Service 01-01-92
Rate 5 Primary Service 01-01-92
Rate 6 General Primary Service 01-01-92
Rate 7 Municipal Water Pumping Service 01-01-92
Rate 9 Outdoor Lighting Service 01-01-92
Rate 11 Traffic Light Service 07-01-87
Rate 12 Space Conditioning Electric Water Heating Service 01-01-92
Rate 21 Electric Service, Senior Citizen 10-15-94
Rate 31 Street Lighting Service-Board Owned 01-01-92
Rate 32 Street Lighting Service-Customer Owned 01-01-92
Economic Development Rider 02-01-91
Energy Cost Adjustment 06-12-87
Scheduled Curtailment Service Rider 02-01-91
Lansing City Enterprise Community Rebate 08-25-94
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER WERBELOW
That Resolution 96-11-7 be approved.
Commissioner Graves stated that being a new Commissioner,the first discussion he was part of on the electric
rates issue was at the Public Hearing held November 12, 1996. He noted that he has not been part of prior
presentations and discussions,and for that reason,he would be abstaining from voting on Resolution 96-11-7-
new electric rate schedules. Commissioner Graves suggested putting in place a formal orientation process for new
Board Members. He indicated that he personally would not be voting for any issue or resolution brought before
this Board when there has not been adequate discussion on it.
Commissioner Royal staged she has some reservations on the rate increase at this time. She commented on the
importance of bringing Board members up to speed to better prepare them for voting on complicated matters such
as rate issues. She stated that she is particularly concerned with the impact the rate increase will have on
residential customers.
Commissioner Lontz commented that he also has reservations on the rate increase at this time. He indicated that
back during the process, he felt the Integrated Resource Plan(IRP)should have been completed. Not that the IRP
is"the information,"but it is an important piece of information that would have provided alternatives to look at
other than rates. He also voiced his reservations about the increase related to Rate 3 (General Electric Service)for
small businesses. He expressed concern that an economic development policy was adopted to increase the BWL's
capacity to work with businesses, and now their electric rates are being increased. He announced that he too would
be abstaining from voting on Resolution 96-11-7-new electric rate schedules. Commissioner Lontz also
Page 145 Board Minutes
November 26, 1996
commented on the importance of the Board having met in a strategic planning retreat to discuss issues of this
nature.
Commissioner Pratt echoed Commissioner Lontz's comments regarding the IRP. He stated that the IRP is an
important piece of the Board's future deliberation on rate issues and competition. He noted that in one of the
documents included in this month's Board meeting packet, it was reported that the IRP would be completed on
June 30, 1996.
Chairman O'Leary commented that he felt the process for the electric rate change was thorough. The fact that the
newly appointed Commissioners were not yet on board at the time when these discussions took place is the Board's
shortcoming. He agreed that the new members should have been brought up to date on this topic and indicated
that every effort will be made to do so in the future. He further stated that the reasoning for the rate increase is
more involved than just reacting to inflation. The reason for the rate increase was to try to get the utility in line
with the different rate levels the BWL is competing against in the marketplace,and a modest rate increase was the
solution.
General Manager Pandy responded to the several points raised by the Commissioners. On the Board retreat issue,
he explained that attempts were made to schedule a strategic planning retreat in the fall;however, due to
Commissioner schedule conflicts, it has now been postponed until after the first of the year. With regard to
Commissioner Lontz's comments on the new rate schedules and the IRP, Mr.Pandy noted that the reason there is
a larger increase for the business class as compared to other classes of customers is that the business customer in
general has enjoyed the greatest rate savings ranging from 30%to 40%below market rates. He noted that the
BWL would continue to offer economic development rates for businesses that want to grow and also continue to
have the lowest rates in the State. Mr.Pandy also explained that the IRP completion has been complicated by
trying to address both electric and steam facilities. What complicates it is when you try to mix the supplying of
steam and electric from the same equipment or from more efficient new technologies. With respect to preparing
new Board Members, General Manager Pandy noted that he believes the responsibility of orienting new Board
Members rests with him and the staff. Following discussion, Commissioner Graves and General Manager Pandy
agreed that in addition to conducting a tour of facilities,the preferred method would be to arrange a sit down
session with presentation materials,background information,and an opportunity for questions and answers on
pending issues.
Commissioner Werbelow stated that he met with Treasurer/Controller Dana Tousley earlier in the week to better
understand the rationale for the rate increases. Following his briefing with Mr. Tousley, he was satisfied with the
rationale which justifies the rate increase.
After much discussion, Chairman O'Leary urged open and fiee exchange of information at the meetings. He noted
that this administrative board has a responsibility to question items brought before the Board. He also noted that a
unanimous vote is not required of the Board.
The question being on the adoption of new electric rate schedules,Resolution 96-11-7,a roll call vote was taken:
YEAS: Pratt,Royal,O'Leary, Strolle, Werbelow--5
NAYS: None
ABSTENTIONS:Graves,Lontz--2
ABSENT: Christian--1
RESOLUTION ADOPTED.
UNFINISHED BUSINESS
No unfinished business.
Board Minutes Page 146
November 26, 1996
NEW BUSINESS
No new business.
RESOLUTIONS
There were no resolutions.
GENERAL MANAGER'S REMARKS
The following informational items were presented to the Board:
Michigan Electric Systems File Before FERC Re: Emergency Relief from Transmission Rake Hike by
CPCo. General Manager Pandy reported that Michigan electric systems filed before the Federal Energy
Regulatory Commission(FERC)an action to try to stop the 1,200%to 2,000%increase in transmission rates that
Consumers Power is trying to unilaterally impose on publicly owned electric systems in Michigan. On November
8, 1996,a petition for emergency relief was filed by the Michigan systems embraced by the Michigan Public Power
Agency(MPPA),Michigan South Central Agency, Wolverine Power Supply Cooperative and Michigan Public
Power Rate Payers Association—renewing their motion for declaratory order. Mr.Pandy noted that essentially the
Michigan systems have taken a position that they are going to pay the old tariffs until they are ordered to do
otherwise. He referred to an article summarizing this topic in the November 18, 1996,"Public Weekly Weekly,"
published by the American Public Power Association.
Bill Cook,Director of Electric System Control,reported that an escrow account has been set up by MPPA to keep
the monies that are in differential between what is being billed and what is being paid. Consumers Power
Company threatened that if an escrow account is not set up,they would terminate the transmission service
altogether. The amount in escrow for the first month was$87,000 for transmission services.
Status Report on Ottawa Station Redevelopment and Main Office Building Sale. General Manager Pandy
reported that staff has been informed by Oldsmobile that General Motor's(GM)Vice President for Corporate
Affairs Bill Brooks will come to Lansing on December 16 to meet with John Rock,Darwin Clark and other
Oldsmobile officials to tour the Ottawa Station and to discuss the future of the Vision Center. He also told the
Board that John Rock has indicated there is dialogue going on between Oldsmobile and the United Autoworkers
Union(UAW)about putting all of the training in Lansing into the Vision Center. If the UAW also supports this
project, it would strengthen the business case. GM has been urged to involve the union leadership in the tour as
well as discussions and deliberations on this project. Mr. Pandy noted that some indication as to whether or not
Oldsmobile is going to proceed with the project is expected shortly thereafter. With regard to the Main Office
Building sale,December 16 was set by the Board as the date for a response from Commercial Acquisitions,L.L.C.,
through Vlahakis Realty on the status of their purchase of the BWL Main Office Building. The Lansing City
Council held a public hearing on November 4, 1996,and referred the matter to the Committee on Development
and Planning. Mr.Pandy stated that timely information on both real estate matters should be available for the next
regular meeting to be held December 17, 1996. The Commissioners indicated that they would like to meet as a
Committee of the Whole at 4:00 p.m. on December 17, 1996.
Calvin Jones Declared a Fellow of MSU's Michigan Political Leadership Program. General Manager Pandy
recognized Calvin Jones, Shops Supervisor of Construction Services,for having completed the Michigan Political
Leadership Program at Michigan State University(MSU). Mr. Jones was declared a Fellow of the Michigan
Political Leadership Program on November 16, 1996,for his commitment to making our political system more
responsive and responsible and desiring to improve the quality of life for citizens of Michigan through political
service. Mr.Pandy noted that 24 fellows graduated from this very diverse program from every comer of the State.
Page 147 Board Minutes
November 26, 1996
Closed Session to Discuss Written Opinion with Special Counsel.
BY COMMISSIONER STROLLE--
SECONDED BY COMMISSIONER WERBELOW
To convene into a closed session to discuss the written opinion of special counsel regarding a
pending matter with the Michigan Department of Environmental Quality.
A roll call vote was taken as follows:
YEAS: Graves,Lontz, O'Leary,Pratt,Royal, Strolle, Werbelow—7
NAYS: None
ABSENT: Christian--1
By unanimous vote the Board convened into a closed session at 6:09 p.m.
Board Reconvenes in Regular Session.
The Board reconvened in regular session at 6:48 p.m.
[Commissioner Strolle left the meeting at 6:48 p.m.]
REMARKS BY COMMISSIONERS
Retainer Fee for Lobbying Firm
Commissioner Pratt asked about the fee to be paid to the lobbying firm of-Kheder and Associates,Inc.
General Manager Pandy responded that Kheder and Associates has demonstrated an effectiveness in
communicating to the legislature the BWL's positions on deregulation and competition in the electric industry. In
continuing the contract for another two years,Kheder and Associates originally proposed$48,000 per year,and
staff was able to negotiate retainers of$35,000 for 1997 and$40,000 for 1998. Bill Cook,Director of Electric
System Control,briefed the Board on Kheder's activities relative to recodification meetings. He noted that the
contract does have a one-month termination clause if it appears that in the beginning of the second year,the
workload has decreased requiring either a reduced level of service or no service at all.
Tree Trimming Update
Commissioner Pratt asked for an update on tree trimming efforts and the recommended improvements.
General Manager Pandy responded that trees are still the primary cause of power outages. The BWL has used
outside contractors for tree trimming services the last twenty years,running four crews year around. Mr.Pandy
stated that the Director of Electric Transmission and Distribution,Dave Emmons, has indicated that from 1992 to
1995,customer minutes off due to trees has more than quadrupled,going from 227,898 to 996,721. This
disturbing trend suggests that tree trimming efforts need to increase. Plans are underway to develop a standard for
frequency of tree trimming on the BWL system and implement a program to accomplish it, including the retention
of additional contractor crews for trimming.
United Wav Campaign
Commissioner Pratt congratulated employees on their contribution of$103,627 to the United Way Campaign.
Board Minutes Page 148
November 26, 1996
Internal Auditor's BWL Analytical Review Report
Commissioner Lontz thanked Internal Auditor Kellie Willson for her work in preparing excellent charts for the
annual BWL Analytical Review Report.
Status of Steam and Electric Service Aereements
Commissioner O'Leary asked for an update on the Steam Service Agreement.
General Manager Pandy reported that the Steam Service Agreement with General Motors' (GM) Small Car Group
is in its legal review by the BWL's Staff Attorney and GM. Conceptual agreement has been reached on all the
substantive issues. Construction of the pipe systems is well underway and is expected to be in service early in
1997.
Director of Electric System Control Bill Cook reported that the BWL and GM are close to reaching agreement on
Electric Service. He requested some time in December to review provisions of the agreement in order to finalize it
by the first of the year. Following discussion, the Board agreed to discuss this issue at a Committee of the Whole
meeting to be held on December 17, 1996, at 4:00 p.m.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Jim Harken, 315 Bingham,Lansing, discussed the following three BWL projects and requested a written response
on each project questioned:
Resolution 89-1-7, (January 24, 1989 minutes)Amount of$800,000 approved for improvements to the water
distribution system reliability in Delhi Township. He stated that a statement from the Lansing City Attorney says
this project was specifically implemented to provide water to Delhi Township. He asked whether or not Delhi
Township paid$800,000 for the water distribution system, or if it was subsidized by the citizens of the City of
Lansing.
Project Number 87-120 -Watertown Township Extension, Water Distribution SysteniL The project was for
$1,309,000. Mr.Harken commented that a statement from the Lansing City Attorney says the purpose for this
project was to provide water to Watertown Township. Mr.Harken said he searched the records for six months
after this project and found no indication that any of the money was recovered from Watertown Township.
Mr.Harken stated that both projects for Delhi and Watertown Townships totaled about$2.25 million. He
indicated that he suspects the BWL provided the pumps and distribution systems at the expense of City of Lansing
ratepayers. He asked whether or not the BWL subsidized the water distribution system to Delhi and Watertown
Townships
Resolution 89-8-19, (August 22, 1989 minutes) A resolution authorizing for the application of bonds for
$19,000,000. Mr.Harken stated that some of the bonds were for the upgrade of the electric utility system. He
indicated that he suspects a lot of that money went to Eckert Station. He further stated that tax-free bonds were
used for the Belle River project. He asked if the electric line out to DeWitt is unfair competition to Consumers
Power Company since the BWL has tax-free bonds that went for providing both Eckert and Belle River.
Chairman O'Leary assured Mr. Harken that a written reply to his questions would be sent to him,with a copy
forwarded to each Commissioner.
Page 149 Board Minutes
November 26, 1996
EXCUSED ABSENCES
BY COMMISSIONER ROYAL--
SECONDED BY COMMISSIONER PRATT
That the absence of Commissioner Christian be excused.
Adopted unanimously.
ADJOURNMENT
On motion of Commissioner Graves,the Board adjourned at 6:59 p.m.
ASVMary E. tary
Filed: December 4, 1996
Marilynn Slade, City Clerk
Page 150
MINUTES OF BOARD OF COMMISSIONERS'MEETING
LANSING BOARD OF WATER AND LIGHT
Tuesday,December 17, 1996
The Board of Commissioners met in regular session at 5:30 p.m.,in the Main Office Building, 123 West Ottawa
Street,Lansing,Michigan. The meeting was called to order by Chairman O'Leary.
Present: Commissioners Christian, Graves,Lontz,O'Leary,Pratt,Royal, and Werbelow-7
Absent: Commissioner Strolle- 1
The Assistant Secretary declared a quorum present.
The Invocation was delivered by Chairman O'Leary. _
The Pledge of Allegiance was said by all.
APPROVAL OF MINUTES c;
r--
BY COMMISSIONER CHRISTIAN =? -
SECONDED BY COMMISSIONER ROYAL
That minutes of regular session of November 26, 1996,be approved as filed.
Adopted unanimously.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY AGENDA SUBJECT OR ON ANY OTHER SUBJECT NOW, OR AT THE END OF
THE MEETING.
Jim Harken, 315 Bingham,asked when answers to his questions would be completed. Chairman O'Leary
responded that the process is not entirely completed. Mr.Harken should have the information before the Board
Meeting in January.
Commissioner Peter Pratt and his wife were congratulated on the birth of their baby.
COMMUNICATIONS AND PETITIONS
Page 151 Board Minutes
November 26, 1996
COMMITTEE OF THE WHOLE REPORT
The Committee of the Whole met on December 17, 1996, to discuss 1)ICMA Plan and Trust, 2) General Motors
Electric Contract, and 3) Southeastern Michigan Rural Electric Cooperative Partial Requirements Contract.
Present were Commissioners Christian, Graves.Lontz,Pratt,Roval, Strolle, O'Leary and Werbelow.
Deferred Compensation Assets. Treasurer/Controller Tousley presented information on a trust fund being
established for the BWL's employee deferred compensation plan. This action will add protection to the fund. A
federal law requires that deferred compensation plan assets be set aside in a trust fund by 1999.
Deferred Compensation Assets
(Resolution 96-12-12)
WHEREAS, the Board of Water and Light of Lansing,Michigan("Employer")has employees rendering valuable
services;and,
WHEREAS, the Employer has established a deferred compensation plan(ICMA Employer Plan Number 300435)
for such employees that serves the interest of the Employer by enabling it to provide reasonable retirement security
for its employees,by providing increased flexibility in managing its human resources,and by assisting in the
attraction and retention of competent personnel;and,
WHEREAS, the Employer has determined that the continuance of the deferred compensation plan will serve these
objectives; and,
WHEREAS,amendments to the Internal Revenue Code have been enacted that require changes to the structure of
and allow enhancements of the benefits of the deferred compensation plan:
NOW THEREFORE BE IT RESOLVED that effective January 1, 1997, the Employer hereby amends and restates
the deferred compensation plan(the"Plan")in the form of the ICMA Retirement Corporation Deferred
Compensation Plan and Trust; (Attached)
BE IT FURTHER RESOLVED that the assets of the Plan shall be held in trust,with the Employer serving as
trustee,for the exclusive benefit of the Plan participants and their beneficiaries,and the assets shall not be diverted
to any other purpose. The Trustee's beneficial ownership of Plan assets held in the ICMA Retirement Trust shall
be held for the further exclusive benefit of the Plan participants and their beneficiaries;
BE IT FURTHER RESOLVED that the Plan will permit loans;
BE IT FURTHER RESOLVED that the Employer hereby agrees to serve as trustee under the Plan.
BY COMMISSIONER ROYAL
SECONDED BY COMMISSIONER CHRISTIAN
That Resolution 96-12-12 be approved.
Adopted unanimously.
Board Minutes Page 152
November 26, 1996
General Motors Contract. Electric System Control Division Director Bill Cook presented information on a long-
term contract to supply electricity to General Motors facilities in the Lansing area.
Electric Service Agreement with General Motors
(Resolution 96-12-3)
The Lansing Board of Water and Light Commissioners authorize the General Manager to execute an Electric
Service Agreement with General Motors(GM), subject to terms and conditions which meet the approval of the
Staff Attorney,Electric Utility Directors, Treasurer/Controller, and General Manager. The basic tenets of this
agreement shall include:
• BWL being GM sole electric supplier in the BWL service area for a minimum of 10 years.
• In the event that the BWL Commissioners authorize retail access following this Agreement,the BWL would
have the continuing right of first refusal to meet GM electric requirements.
• Large Capacity Rate#8,approved at the November BWL Board of Commissioners'meeting,would be applied
to the following facilities:
Lansing Automotive Division Plant#1
Craft Center
Lansing Automotive Division Plant#3
Powertrain Plant#5
Lansing Automotive Division Plant#6
Parts Warehouse
• For GM's purposes,Large Capacity Rate#8 would be frozen for the first five years of the agreement.
• For GM's purposes, in years 6-10,Large Capacity Rate#8 would not increase by more than the Producers
Price Index in any year.
• The BWL Energy Cost Adjustment would remain in effect.
• The BWL would exhibit its best efforts to maintain GM's reliability at no worse than existing levels.
• The BWL does NOT waive the right to collect any future stranded costs in the event of retail access,to the
extent that such costs are made applicable to other BWL retail customers.
• BWL will provide technical assistance to GM,for which GM shall pay.
• The Agreement Dispute process includes:
Agreement Administrators authority to resolve procedural or
operational issues
Mediation
Binding Arbitration.
• The GM/BWL Electric Service Agreement controls in the event of a conflict with BWL rules and regulations
and/or published rates.
• In the event of the BWL's authority to operate as an autonomous agency, or ownership in the BWL changes
such that the change results in a materially decreased performance in rates and reliability, GM at its option
may deem the term of the agreement to be one year.
• BWL nerves the right to terminate the Agreement if it is found to jeopardize the tax exempt status of
Michigan Public Power Agency(MPPA)Belle River bonds.
This Agreement is intended as a defensive measure to secure the BWL's largest customer(18.67%of FY 96 BWL
electric revenue)for a period of at least ten(10)years during a period where the potential of significant change in
the electric industry is likely.
Page 153 Board Minutes
November 26, 1996
It is also intended that the provisions of this Agreement would be extended to similarly situated customers
qualifying for Large Capacity Rate#8 during this same period.
BY COMMISSIONER O'LEARY
SECONDED BY COMMISSIONER GRAVES
That Resolution 96-12-3 be approved.
Adopted unanimously.
SEMREC. Brent Henry, System Support Engineer from BESOC,presented information on extending the BWL's
wholesale power agreement with Southeastern Michigan Rural Electric Cooperative(SEMREC).
Amendment No. 2 of Southeastern Michigan Rural Electric
Cooperative(SEMREC)BWL Partial Requirements Agreement
(Resolution 96-12-4)
The Board of Water and Light Commissioners authorize the General Manager to execute Amendment No. 2 of the
Southeastern Michigan Rural Electric Cooperative(SEMREC)/BWL Partial Requirements Agreement, subject to
terms and conditions which meet the approval of the Staff Attorney and General Manager.
Amendment accomplishes keeping SEMREC as a BWL wholesale customer for two years longer than the existing
agreement;modifies the type of service the BWL supplies to SEMREC;results in SEMREC increasing its monthly
capacity reservation minimums; gives the BWL right to first refusal on future SEMREC power supply
considerations,lowers the monthly capacity charges,allocates any growth achieved by SEMREC to the BWL,and
results on present worth basis to about no net gain or loss over our existing agreement. Pending approval by Board
of Directors of SEMREC.
BY COMMISSIONER CHRISTIAN
SECONDED BY COMMISSIONER GRAVES
That Resolution 96-12-4 be approved.
Adopted unanimously.
Respectfully submitted,
William D.Lontz,Chair Pro Gem
COMMITTEE OF THE WHOLE
That the Committee of the Whole Report, including Resolutions 96-12-12, 96-12-3, and 96-12-4 be
approved as submitted.
GENERAL MANAGER'S RECOMMENDATIONS
ADMINISTRATIVE
Res. No. 96-12-1
That in accordance with Article II, Section 2.1 of the Board's Rules of Administrative Procedure,
it is recommended that the following list of dates be adopted as the regular meeting schedule for
the Board of Water and Light Commissioners for the ensuing six(6)months.
Board Minutes Page 154
November 26, 1996
1997
January 28 - Tuesday
February 25 - Tuesday
March 25 - Tuesday
April22 - Tuesday
May 27 - Tuesday
June 24 - Tuesdav
Regular meetings of the Board shall commence at 5:30 p.m.
This schedule is subject to change as a result of date conflicts with rescheduled City Council
meetings.
It is further recommended that a notice of the meeting schedule be published in the LANSING
STATE JOURNAL the week of January 5, 1997.
BY COMMISSIONER CHRISTIAN
SECONDED BY COMMISSIONER ROYAL
That Resolution 96-12-1 be approved.
Adopted unanimously.
CORPORATE PLANNING
Res. No. 96-12-2
It is recommended that the Board authorize the granting of an easement to Michigan Bell
Telephone Company,DBA Ameritech,for communication facilities at a cost consideration of
$1,000, a one time payment upon execution of the easement. The easement location is a portion
of the Burcham Substation Property, 683 Stoddard Street,East Lansing.
Easement Description: A part of a vacated alley and a part of Lot 23 of"Avondale"Plat,Liber 4,
Page 46 of Ingham County plats,particularly described as follows: Beginning at a point 8 feet
south of the southwest corner of Lot 23 of said plat, said P.O.B.being on the centerline of a
vacated 16 foot wide alley;thence north 25 feet to a point on the west line of Lot 23 that is 17
feet north of the southwest corner of Lot 23;thence east parallel with the south lot line 25 feet;
thence south 25 feet to the center of the vacated alley;thence along the vacated alley centerline
west 25 feet to the point of beginning, subject to an easement granted to Michigan Bell
Telephone Company on October 19, 1987,and recorded in Liber 1666,Pages 558-560,Ingham
County Deeds, and subject to any other existing easements and restrictions.
This easement will permit Ameritech to construct, maintain and have access to a
communications control cabinet adjacent to an existing Ameritech cabinet on the Southwest
corner of the Burcham Substation property. The Board of Water and Light is not presently using
nor has any foreseeable use of this portion of the Burcham Substation property for Utility
purpose.
Page 155 Board Minutes
November 26, 1996
BY COMMISSIONER CHRISTIAN
SECONDED BY COMMISSIONER PRATT
That Resolution 96-12-2 be approved.
Adopted unanimously.
ELECTRIC SYSTEM CONTROL
Res.No. 96-12-3
The Lansing Board of Water and Light Commissioners authorize the General Manager to
execute an Electric Service Agreement with General Motors(GM),subject to terms and
conditions which meet the approval of the Staff Attorney,Electric Utility Directors,
Treasurer/Controller, and General Manager. The basic tenets of this agreement shall include:
• BWL being GM sole electric supplier in the BWL service area for a minimum of 10 years.
• In the event that the BWL Commissioners authorize retail access following this Agreement,
the BWL would have the continuing right of first refusal to meet GM electric requirements.
• Large Capacity Rate#8,approved at the November BWL Board of Commissioners'meeting,
would be applied to the following facilities:
Lansing Automotive Division Plant#1
Craft Center
Lansing Automotive Division Plant#3
Powertrain Plant#5
Lansing Automotive Division Plant#6
Parts Warehouse
• For GM's purposes,Large Capacity Rate#8 would be frozen for the first five years of the
agreement.
• For GM's purposes, in years 6-10,Large Capacity Rate 48 would not increase by more than
the Producers Price Index in any year.
• The BWL Energy Cost Adjustment would remain in effect.
• The BWL would exhibit its best efforts to maintain GM's reliability at no worse than
existing levels.
• The BWL does NOT waive the right to collect any future stranded costs in the event of retail
access,to the extent that such costs are made applicable to other BWL retail customers.
• BWL will provide technical assistance to GM,for which GM shall pay.
Board Minutes Page 156
November 26, 1996
• The Agreement Dispute process includes:
Agreement Administrators authority to resolve procedural or
operational issues
Mediation
Binding Arbitration.
• The GM/BWL Electric Service Agreement controls in the event of a conflict with BWL rules
and regulations and/or published rates.
• In the event of the BWL's authority to operate as an autonomous agency, or ownership in the
BWL changes such that the change results in a materially decreased performance in rates
and reliability, GM at its option may deem the term of the agreement to be one year.
• BWL reserves the right to terminate the Agreement if it is found to jeopardize the tax
exempt status of Michigan Public Power Agency(MPPA)Belle River bonds.
This Agreement is intended as a defensive measure to secure the BWL's largest customer
(18.67%of FY 96 BWL electric revenue)for a period of at least ten(10)years during a period
where the potential of significant change in the electric industry is likely.
It is also intended that the provisions of this Agreement would be extended to similarly situated
customers qualifying for Large Capacity Rate#8 during this same period.
BY COMMISSIONER ROYAL
SECONDED BY COMMISSIONER GRAVES
That Resolution 96-12-3 be approved.
Adopted unanimously.
Res. No. 96-124
The Board of Water and Light Commissioners authorize the General Manager to execute
Amendment No. 2 of the Southeastern Michigan Rural Electric Cooperative(SEMREC)/BWL
Partial Requirements Agreement,subject to terms and conditions which meet the approval of the
Staff Attorney and General Manager.
Amendment accomplishes keeping SEMREC as a BWL wholesale customer for two years longer
than the existing agreement;modifies the type of service the BWL supplies to SEMREC;results
in SEMREC increasing its monthly capacity reservation minimums; gives the BWL right to first
refusal on future SEMREC power supply considerations, lowers the monthly capacity charges,
allocates any growth achieved by SEMREC to the BWL, and results on present worth basis to
about no net gain or loss over our existing agreement. Pending approval by Board of Directors of
SEMREC.
BY COMMISSIONER ROYAL
SECONDED BY COMMISSIONER WERBELOW
That Resolution 96-124 be approved.
Adopted unanimously.
Page 157 Board Minutes
November 26, 1996
HUMAN RESOURCES
Res. No. 96-12-5
That Larry R.Beckner, a Maintenance Mechanic for Production Maintenance,be awarded a total
of$274 for suggestion proposal number 1996-072,to use a newly developed tool to change
springs on precipitator hopper dump gates for faster,safer removal of the spring.
By implementing this proposal, it is estimated that the BWL will realize a net savings of$1990
in the first year.
Res.No. 96-12-6
That Ronald Byrnes, a Cable Splicer for Line Department,be awarded a total of$459.25 for
suggestion proposal number 1996-070, to use tool on end of insulated hot stick to change bushing
lugs without switching the loop or causing customer outages.
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$3,842.46 in the first year.
Res. No. 96-12-7
That Larry E.DeWitt,a Design Technician in Project Engineering,be awarded a total of$305.82
for suggestion proposal number 1995-109,to enter mechanical and structural drawing numbers
on Mapper Electrical Drawing files for more efficient referencing system.
--------------
By implementing this proposal, it is estimated that the BWL will realize a net savings of
$2,308.24 in the first year.
Res.No. 96-12-8
That Lois K.Hagy, a Customer Billing Representative for Customer Accounting Services,be
awarded a total of$632 for suggestion proposal number 1996-074,to sort daily CL billing
statements alphabetically along with secondary and primary meter statements.
By implementing this proposal, it is estimated that the BWL will realize a net savings of$5,570
in the first year.
Board Minutes Page 158
November 26, 1996
Res. No. 96-12-9
That Patrick Rennie, a Steam Production Operator for Moores Park Operations,be awarded a
total of$112.50 for suggestion proposal number 1996-062,to install a pressure switch from the
AG gates airline to the start/stop switch on the B/A pump to prohibit pump from running without
the air on and eliminate unnecessary maintenance on bottom ash system.
By implementing this proposal, it is estimated that the BWL will realize a net savings of$450 in
the first year.
BY COMMISSIONER GRAVES
SECONDED BY COMMISSIONER CHRIST A-N
That Resolutions 96-12-5 through 96-12-9 be approved.
Adopted unanimously.
Res. No. 96-12-10
WHEREAS, A new three-year labor agreement with the IBEW Local 352 was approved by the
Board on November 26, 1996, subject to IBEW Local 352 member ratification on December 11,
1996.
RESOLVED,That the following employment and benefit changes incorporated in the union
contract be applied to the Non-Bargaining Unit employees per the effective dates listed below:
Summary of Tentative Contract Settlement Affecting Non-Bargaining Unit Employees
November 1, 1996-October 31, 1999
I. Basic Agreement
A. "Living Agreement"to address competition and cost reduction
B. Partnership Statement and Empowerment of Department/employees.
H. Economic Changes
A. Life Insurance, effective January 1, 1997
Premium Waiver and Life Pay-out will be discontinued.
III. Other Issues
A. Leave of Absence
An employee placed on compensable illness or injury leave after November 1,
1996 shall lose seniority when the leave equals the employee's pre-leave
seniority, but not to exceed two years.
B. The Just-Cause criteria and procedure under the current BWL Drug Alcohol
Policy will be enhanced with education and process improvements.
C. Share the Success
1. Bonus amount applied to base pay for pension calculation capped at
5%per year.
2. Separate department measures based on hard savings attributable to
employees with 90/10 split of savings; 90%to organization/ 10%to
department employees.
Page 159 Board Minutes
November 26, 1996
3. Department task forces to be established to identify savings within one
year.
4. Both programs to continue through the life of this agreement.
D. Pension Issues (See Attachment)
IV. Issues Sent to Subcommittee
A.' Paid Time Off
B. Workers Compensation
BY COMMISSIONER ROYAL
SECONDED BY COMMISSIONER GRAVES
That Resolution 96-12-10 be approved.
Adopted unanimously.
PENSION
Res.No. 96-12-11
That David Buzinski,a Water Production Maintenance Mechanic in Water Production,be placed
on a disability pension of$1,314.74 per month effective August 22, 1996. He has selected a
straight pension with no option.
Mr.Buzinski has worked for the BWL for 22.22 years and is 46 years of age.
BY COMMISSIONER CHRISTIAN
SECONDED BY COMMISSIONER PRATT
That Resolution 96-12-11 be approved.
Adopted unanimously.
TREASURER/CONTROLLER
Res. No. 96-12-12
WHEREAS,the Board of Water and Light of Lansing,Michigan("Employer")has employees
rendering valuable services;and,
WHEREAS, the Employer has established a deferred compensation plan(ICMA Employer Plan
Number 300435)for such employees that serves the interest of the Employer by enabling it to
provide reasonable retirement security for its employees, by providing increased flexibility in
managing its human resources,and by assisting in the attraction and retention of competent
personnel; and,
WHEREAS, the Employer has determined that the continuance of the deferred compensation
plan will serve these objectives;and,
Board Minutes Page 160
November 26, 1996
WHEREAS, amendments to the Internal Revenue Code have been enacted that require changes
to the structure of and allow enhancements of the benefits of the deferred compensation plan:
NOW THEREFORE BE IT RESOLVED that effective January 1, 1997, the Employer hereby
amends and restates the deferred compensation plan(the"Plan")in the form of the ICMA
Retirement Corporation Deferred Compensation Plan and Trust; (Attached)
BE IT FURTHER RESOLVED that the assets of the Plan shall be held in mist,with the
Employer serving as trustee,for the exclusive benefit of the Plan participants and their
beneficiaries, and the assets shall not be diverted to any other purpose. The Trustee's beneficial
ownership of Plan assets held in the ICMA Retirement Trust shall be held for the further
exclusive benefit of the Plan participants and their beneficiaries;
BE IT FURTHER RESOLVED that the Plan will permit loans;
BE IT FURTHER RESOLVED that the Employer hereby agrees to serve as trustee under the
Plan.
This resolution essentially creates a separate trust entity, similar to our defined benefit pension
fund. ICMA assets contributed by employees are not subject to the creditors of the BWL. The
resolution also complies with the agreement with IBEW Local 352 to establish such a mist as
soon as practicable. The form of the resolution is suggested by ICMA Retirement Corporation.
ICMA Retirement Corporation has submitted the referenced Plan and Trust Agreement for an
IRS private letter ruling.
BY COMMISSIONER CHRISTIAN
SECONDED BY CONMSSIONER ROYAL
That Resolution 96-12-12 be approved.
Adopted unanimously.
WATER
Res.No. 96-12-13
That the Board of Water and Light(BWL)charge for 6" and 8"watermain installations on
unimproved roads,all having fire hydrant coverage,be changed to$25.50 per foot,effective
January 1, 1997. This is a 3%increase over the current charge.
That one-half this amount be the standard per foot frontage charge to be levied in conjunction
with a water service connection on either side of a street where a charge for watermain
installation has never been made,directly or indirectly.
That the BWL charge for public fire hydrant installations on mains 12"and smaller be changed
to$1,875 per hydrant, effective January 1, 1997. This is a 7%increase over the current charge.
Page 161 Board Minutes
November 26, 1996
The watermain-with-hydrant installation charge and the individual hydrant installation charge
listed above are based on the three(3)previous years of BWL average costs for that type of work,
trended to July 1, 1997, the middle of next year's construction season. The trending factors used
in the calculations were obtained by using indices from the Handy Whitman Index,a well-
recognized publication of trends in public utility construction.
BY COMMISSIONER CHRISTIAN
SECONDED BY COMMISSIONER PRATT
That Resolution 96-12-13 be approved.
Adopted unanimously.
UNFINISHED BUSINESS
No unfinished business.
NEW BUSINESS
No new business.
RESOLUTIONS
There were no resolutions.
GENERAL MANAGER'S REMARKS
General Manager Pandy commended Union Officers for excellent manner in which negotiations were handled.
Contract was ratified by a three-to-one margin.
Commissioner Christian expressed his congratulations as a representative of the Personnel Committee.
Negotiations were a `win\win' situation.
General Manager Pandy handed out a copy of a letter regarding the Michigan Utility Code of 1996 (H.B.6225).
The bill was not passed during the session that closed on December 13, 1996,but will be brought up again in 1997.
Discussion was held on the new LANSING CITY ENTERPRISE COMMUNITY REBATE, which approved at the
November 26, 1996 Board Meeting. This rate will be available to two Lansing Renaissance Zones. A press release
will be issued Wednesday or Thursday.
Enterprise Community Rebate/Renaissance Zones
Resolution 96-12-14
Resolved,that staff is directed to apply the existing Lansing City Enterprise Community Rebate rate schedule to
the City of Lansing Renaissance Zones established by the State of Michigan.
Board Minutes Page 162
November 26, 1996
BY COMMISSIONER ROYAL
SECONDED BY COMMISSIONER LONTZ
That Resolution 96-12-14 be approved.
Adopted unanimously:
General Manager Pandy will serve on the Local Initiatives Support Corporation(LISC)Lansing Advisory
Committee. This Committee will help raise the profile and capital for community development in Lansing.
General Manager Pandy spoke about Consumers Power realigning their marketing functions, and the value of
extra services available to various classes of customers.
General Manager Pandy reported on a meeting with Wisconsin Energy Corporation,which when merged with
Northern States Power in 1999,will be the 10th largest utility in the U. S. They provide 50%of the load in the
state of Wisconsin. They are hoping to form alliances with other utilities including the BWL for marketing of
additional services to customers in Michigan.
General Manager Pandy will speak on competition at an American Public Power Association(APPA)meeting in
California the second week in January.
Paul Vlahakis representing Vlahakis Companies spoke to the Commissioners requesting an extension on a
Purchase Agreement for selling the BWL Main Office Building, which expired December 16, 1996. After much
discussion, the Commissioners declined to extend the deadline.
Board of Water and Light employees are improving in the area of safety performance,but must be especially
careful in the ice and snow conditions of winter.
Discussion was held on financial reports prepared by Treasurer/Controller Dana Tousley. An executive summary
format was developed by Mr.Tousley. The Commissioners want to continue receiving the detail of the reports in
addition to the summary.
General Manager Pandy met with representatives from General Motors, OPAD, and the Mayor regarding the
development of the Ottawa Power Plant. Mr.Pandy expressed his optimism for the development. The
Commissioners will continue to receive updates on this project.
General Manager Pandy thanked the Commissioners for their support and wished everyone a happy holiday.
REMARKS BY COMMISSIONERS
Commissioner Royal asked for clarification on an item on Short Term Cash Investments. She asked about the
negative rate of return on one of the investments. Mr. Tousley stated that the investment was a mutual fund and
the price had declined since purchase. The negative rate of return was a true statement to date,but on an annual
basis, a positive return is expected.
PUBLIC COMMENTS
CHAIRMAN O'LEARY ANNOUNCED THAT MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO
THE BOARD ON ANY BOARD OF WATER AND LIGHT SUBJECT.
Page 163 Board Minutes
November 26, 1996
EXCUSED ABSENCES
BY COMMISSIONER ROYAL
SECONDED BY COMMISSIONER LONTZ
That the absence of Commissioner Strolle be excused.
Adopted unanimously.
ADJOURNMENT
The Board adjourned at 6:51 p.m.
Rosemary Sullivan, Assistant Secretary
Filed: December 19, 1996
Marilynn Slade, City Clerk