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HomeMy WebLinkAbout1989 BWL Board mintues FINAL 1 January 24, 1989 Office, Board of Water and Light Tuesday, January 24, 1989 Lansing, Michigan The Board of Commissioners met in regular session at 5:30 p.m. and the meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belen, Evans, Jessop, McComb, Strolle, Williams, and Hassler--7 Absent: Commissioner Sebolt--1 Quorum The Secretary declared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is available from the Secretary's Office.) Death of The death of Board of Water and Light employee, Ronald N. Ruby was Ronald N. Ruby announced by General Manager Pandy. Invocation An invocation was delivered by Chairman Hasslerlowed inmemoryemorofof Rodeceased. Ruby. A period of silent meditation Pledge The Pledge of Allegiance was said by all present. General Manager General Manager Pandy reported on the accidental death of BWL Overhead hich reports on Leuaccidentalee January Line p24V1whileRonald N.replacingRabguy wire oncurred Jolly Roadday at Hughes Road. death of BWL amp Y Ronald N. Ruby Details of the accident are under investigation and a complete report will be made once the investigative record is finalized. Mr. Ruby is survived by his mother, a sister and two teenage children. BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER JESSOP Approval of That the minutes of rescheduled regular session of Minutes December 20, 1988 be approvled. ed as mai Adopted unanimously. Public Cam�ents 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 COMMISIONRS COMMENT ON ANY AGENDAS MAYEDO.SO ATANYO THIS NE ITIME GORO MATTER IMMEDIATELY PRIOR To ADJOURNMENT. No persons spoke. 2 January 24, 1989 Committee of the Whole Report re: Norma7. and COMMITTEE OF THE WHOLE REPORT Capital Projects in the Engineering Division January 24, 1989 and documentation Board of Commissioners procedure. Board of Water and Light Lansing, Michigan The Committee of the Whole reports it met on January 17, 1989 with the General Manager and staff to review and discuss the following items with respect to Capital Projects: 1• Definitions of Normal and Major Capital Projects. - Normal Capital Projects are less than $100,000 and annual distribution projects. - Major Capital Projects are greater or equal to $100,000. 2• Past and present practices for budget preparation. 3. Internal control of projects prior to and after budget approval. 4. Example of a project caught between past practices and present controls - Makeup Water Supply (Project No. 87-106) . 5. Analysis of FY '87/88 and '88/89 projects. Present were Commissioners Williams (Chair) , Belen, Evans, Jessop, Hassler and Strolle. Absent were Commissioners McComb and Sebolt. Following discussion, the Committee of the Whole adopted the following motions and recommends Board approval: Res 1 Resolution 89-1-1 Additional funds approved 1.pp That additional funds in the amount of $650,000 to to complete make-up complete the Makeup Water Supply Project (Project water supply project No. 87-106) at Erickson Station be at Erickson approved. Res. 89-'1-2 Resolution 89-1-2 Board approval re- 2. That Board....a............... P _ quired for Ca ital pproval be required for Capital Projects that exceed estimated cost amounts by 15 Projects that exceed percent or $200,000, whichever is less. estimated cost by 15% or $200,000. Very truly yours, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER EVANS That the Committee of the Whole Report and Resolutions 89-1-1 and 89-1-2 be approved as submitted. Adopted unanimously. 3 January 24, 1989 Res. 89-1_7 General Manager Pandy requested the addition of a Water utility capital Water utility capital project to the General Manager's Recommendations to (1) upgrade the project to upgrade Eifert Booster Station as necessary to provide adequate pressure under Water pressure in all demands and (2) to install a second booster station, located such Delhi Township that the primary water supply will generate from the Cedar-Dye Complex. added to agenda This project is included in the Ten-Year Capital Budget forecast for Fiscal Year 1989-90. Because of low water pressure experienced during last summer's drought in the Delhi area, staff is recommending moving up this project from Fiscal 1990 to Fiscal 1989 to increase service reliability for demand conditions this summer. There being no objection, Resolution 89-1-7 was added as an addendum to the General Manager's Recommendations (see page 6) . 4 January 24, 1939 Recommendations Board of Water and Light Of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE SERVICES Res. No. 89-1- 3 Administrative Services Division, in accordance with prior Board approval, sold the following BWL vehicles at the Sale of BWL State of Michigan Public Auction of Motor Vehicles on vehicles #314 December 19, 1988. and #321 ratified Vehicle # Description Sale Price 314 1981 Olds Cutlass Station Wagon $ 750.00 321 1980 Plymouth Station Wagon 550.00 Total: $1,300.00 Less 5.6% Auction Fee: - 72.80 Net Sale Price: $1 ,227.20 -------------------- Bids for the new vehicles to replace the above listed vehicles were taken with and without trade-in allowance. The total trade-in allowance for the above vehicles was $800.00, thus the BWL netted an additional $427.20 by selling at auction. -------------------- PENSION Res. No. 89-1- 4 That Edmund E. Orr, Overhead Line - Pole Setting Super- visor, be placed on monthly pension of $1 ,689.25 effective Pension approved January 2, 1989. He has selected Option VI with the for Echwnd E. Orr provision that after his death, if his wife, Nancy K. Orr, survives him she will receive 5% or $84.46 per month for the rest of her life. Mr. Orr has worked for the BWL for 35.46 years and is 56 years of age. -------------------- 5 January 24, 1989 PENSION (Continued) Res. No. 89-1-5 That George E. Holm, General Supervisor in pension od$ct115.63 Maintenance, be placed on a monthly Pension approved effective January 2, 1989. He has selected Option III with for George H. Holm the provision that after his death, if his wife, Barbara K. Holm, survives him she will receive 70% or $1 ,480.94 per month for the rest of her life. Mr. Holm has worked for the BWL for 36.97 years and is 59 years -------------------- TREASURER/ CONTROLLER Re 9-1-6 That the Board of Water and Light make a $20,000 deposit (cash bond) with its application to renew the State Cash Bond Deposit of license for the Lake Lansing landfill site. This is the $20,000 approved to minimum initial deposit allowed under new legislation rein license for enacted which covers landfills. Lake Lansing.Land- -------------------- fill Site The check for this initial deposit has alrady been drawn and included with the application to renew the landfill license; the current license expires January 27, 1989. Under the new legislation we have four options to satisfy the total deposit requirements, i.e. (a) a cash bond, (b) an insurance company bond (not available) , (c) a letter of credit, or (d) an assigned Certificate of Deposit. The total amount required is $20,000 per must be or in this instance, $817,220 (40.861 acres) , and established for 30 years past the time landfill is no until longer used (estimated to be in 20 years) We June, 1991 to have the entire $817,220 in place. Once the license is issued, we plan on establishing a letter of credit, which we deem to be the best alterna- tive, and request a return of our $20,000 deposit. We will request Board approval before entering into a letter of credit. -------------------- Respectfully submitted, Joseph Pandy, J . General Manager JP/bg 6 January 24, 1989 ADDENDUM TO GENERAL MANAGER'S RECOMMENDATIONS WAM Ul''= Resolution 89-1-7 ............................................................... Res. 89-1-7 Amount of $800,000 That the amount of $800,000 be authorized for improvements to the water approved for improve- distribution system to provide adequate water pressure and reliability ments to water dis- in the south end of the BWL's service area (Delhi) under all demand tribution system conditions. The work to be performed in two phases: reliability in Delhi Township area Phase I includes upgrading of the existing Eifert Booster Station and installation of approximately 2,000 feet of 12" main and 7,500 feet of 16" main in Holt and Eifert Roads to be completed this fiscal year at an estimated cost of $550,000. Phase II covers a second booster station installation in fiscal year 1989-90 at an estimated cost of $250,000. It is projected that approximately $200,000 of the cost for water distribution mains will be recovered as Contribution-in-Aid over the next five years as customers are added along the new main. ------------------------------ An analysis of the water distribution system has been performed to determine modifications and additions required to improve and maintain the water pressure and reliability to the southern portion of the water distribution system under peak demand and fire flow conditions. Upon completion of this project, water pressure in the Delhi service area is projected to be at 40 psi or above during peak demands, compared to 8 to 20 psi which presently occurs under these conditions. The installation of the water distribution main which is required to maintain pressure, also provides an additional loop in the distribution system which will increase the reliability of service. This project will also delay the need for a reservoir and pumping station in Delhi, planned for 1991 at a cost of $4,150,000, for approximately six years in 1997. 7 January 24, 1989 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER JESSOP Res. 89-1-3 RESOLVED, That Resolution 89-1-3 (Administrative Services) of approved the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-1-4 and RESOLVED, That Resolutions 89-1-4 and 89-1-5 (Pension) of the 89-1-5 approved General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-1-6 RESOLVED, That Resolution 89-1-6 (Treasurer/Controller) of approved the General Manager'.s Recommendations be approved. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER EVANS Res. 8-1-7 RESOLVED, That Resolution 89-1-7 (Water Utility) of the General approved Manager's Recommendations by approved. General Manager Pandy described the difference between the system design and documentation process being utilized by Project Engineering for major capital projects for the production facilities and the practice in use by each of the three utilities in the design, estimate and budget preparation for their system distribution. Mr. Pandy noted that each utility has its own distribution engineering process and is responsible to the respective Utility Division Director. Documentation Following discussion, the Commissioners suggested that a documentation procedure suggested process be put into place for the three utilities similar to that used for three utilities by the Engineering Division (see Committee of the Whole Report, dated for Nord Capital January 24, 1989--p. 2) . It was also suggested that major capital system distrib- items relating to distribution facilities for the three utilities be tion projects included in the monthly Major Capital Projects Report. The motion was adopted unanimously. 8 January 24, 1989 GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: Share the Success Share the Success Update. An update report, dated January 1989, on the report indicates one- Share the Success program was handed out showing a one-month point gain month point gain in in December. Performance measurements which contributed to the December increase were highlighted. It was noted that the upcoming warmer weather months will most likely result in the loss of some points. Update on water hater Main Replacement. In response to Commissioner Evans' inquiry on main replacement the BWL's water main replacement program, Mr. Pandy reported that program. $100,000 is budgeted annually for this project. Watertown Township con- Electric Franchise. The BWL Marketing group is negotiating with sidering an electric Watertown Township for an electric franchise. franchise Meeting on water Re� onal.. Water Meeting. An information meeting on the feasibility of regionalization to regional approaches to water supply in the Greater Lansing area is be held 2-23-89 scheduled for Thursday, February 23, at 7 p.m. . Various officials from surrounding townships have been invited to this meeting. Lansing City Council Members and the Mayor have been debriefed on the water regionalization concept. Results of sick-leave "No SIC" Incentive Program. A brief analysis of the BWL's sick leave __.......... ..................................._.................... . incentive program incentive program was presented. It was noted that 43.6% of the "NO SIC" reviewed employees fell into the category of "not sick" at least ten months of the year. The cost effectiveness of the first year's experience is being analyzed. New specialized mobile Specialized Mobile Radio (SMR) . Installation of newly purchased SMR radios being installed; equipment has begun. Interest in this equipment has been expressed by BWL discussing joint the City for their parks and sanitation departments, and preliminary. venture with City of discussion is also taking place between the BWL and the Police Lansing Department on a possible joint venture with a regional SMR system. Commissioner Williams interjected that the State of Michigan is designing a State Police radio communication system, and suggested the City may want to also explore this option with the State. Erickson Station Erickson Station News Article. A positive article on the BWL's featured in Delta- Erickson plant, featured in the January 18, 1989 issue of the Delta- Waverly News article Waverly News, was handed out. It was noted that Erickson Station Operating Supervisor, Jack Shafer, is to be commended for his input in this informative article. Efforts to consolidate Michigan Municipal Electric Association. Efforts to unite the Michigan . . .. MCA, MPPA and MSCPA Municipal Electric Asso 1.ciation (MMEA) , Michigan Public Power Agency underway (MPPA) and Michigan South Central Power Agency (MSCPA) under one umbrella are in motion. Mr. Pandy is presenting the proposed merger concept to the respective agency Boards, with a request for their support. As the next first step, MMEA has retained the administrative and lobbying services of two organizations through July 30, 1989. 9 January 24, 1989 MMEA retained services Publicom Association Management Services will perform the every day of Publicom and administrative functions previously assigned to MMEA's former Executive Karoub Associates Vice President. Karoub Associates will be coordinating the lobbying services for MMEA. Both of these service organizations were retained at a cost well within the MMEA budget. Update of Accounts Accounts Receivable Aging .Report. Consumer Services Division Director ............................................................. . ...... Receivable Aging Neal Housler was introduced and presented a highlight of the Accounts report as of Receivable Aging Report, dated November 1988, for the Customer Service November 1988 Department. Mr. Housler introduced Mr. Ken Turner who is the BWL's General Supervisor for Credit .and Collections. A copy of the detailed report containing comparative accounts receivable information by utility was handed out. In summary, comparisons indicate accounts receivable vs. total past due from 1985 through November 1988 show a consistent pattern of past due accounts, which represents approximately 20 percent of revenue. As of November 30, 1988 the total accounts receivable was $11,387,128, and $2,715,866 of that was past due of which approximately $300,000 will be collected. Chairman Hassler commented that it appeared accounts receivable credit and collections involvement was being well managed, but he was concerned that the Statement of Sources and Uses Report reflected an increase in receivables for Fiscal Year ending June 30, 1988. It was agreed the increase was attributable to other factors such as sales and rate increases. COMMISSIONERS' REMARKS Crnmi.ssioners commnd Commissioner Hassler commended staff for another outstanding Annual staff for outstanding Report for Fiscal Year 1987-88. Commissioner Williams suggested having FY'87/88 Annual Report a supply available in the main lobby for customers. Possibility of a General Manager Pandy commented that a "mini version" of the annual "Mini Version" of report is being considered by staff to be used as a bill stuffer. All annual report being employees, major customers and financial institutions and advisors will discussed receive a copy of the complete annual report. Additional copies are available to customers upon request. Commissioner Jessop inquired about the downtown cable failure that occurred January 21. Update on 1/21/89 Mr. Pandy reported that when the BWL cable failure occurred January 21, downtown cable a backup cable was switched over to reinstate power to downtown failure facilities. During the failure, City Hall switched over to their own standby generator. Once the BWL restored the power, City Hall's automatic transfer switch malfunctioned causing interruption to their 911 System. The reason for the initial BWL cable failure is being investigated. 10• January 24, 1989 BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN Excused absence That the absence of Commissioner Sebolt be excused. Adopted unanimously. Adjournment On motion of Commissioner Strolle, the Board adjourned at 6:42 p.m. Mary 4-va, Secretary Filed: January 27, 1989 Rita M. Bauman, City Clerk a C C� Z � z Z C C C N y (!} -P - --s n � 0 N 00 r �c —v `r _ OFFICIAL PROCEEDINGS of the DEMOLITION HEARING OFFICERS February 23, 1989 HEARING OFFICER PRESENT: J. Paul Thompson HEARING OFFICERS ABESENT: Gloria Jones and Donald Hartwick BUILDING OFFICIAL PRESENT: Henry Hernandez OLD BUSINESS: 121-123 E. Grand River This case was tabled from the December 1, 1988, meeting to afford Mr. Basel time to close his sale with Estes Furniture Company. During the 60 day time period, the Building Safety Division had been informed by Estes Furniture that the sale would not go through. At this hearing Mr. Basel submitted a letter from Wayne Foster, Estes Furniture, dated February 23, 1989, stating they were going to reactivate the land contract purchase. Mr. Basel explained that he is in the process of trying to rebuilding some of the structure and has items tied-up in the Planning Division. Mr. Thompson determined that the structure at 121-123 E. Grand River be made safe for occupancy within 14 days or demolished. NEW BUSINESS: First Case - 822 Vine No Owners were present, however, Phillip Fare, representing Regency Savings Bank, appeared on their behalf. Mr. Henrandez explained that the assessed value of the structure is $7,498, and the estimated cost of repairs is $13,500. Mr. Thompson asked Mr. Fare to explain what intentions the bank had for this property, but didn't state any further details. Mr. Fare stated that they were in the process of doing a title search and getting an assessment of the property. Mr. Thompson determined that the structure at 822 Vine Street be made safe for occupancy or demolished within 14 days. Second Case - 6229 Gardenia Mr. David Alex and Ronald Heck were present. They are is the process of purchasing this property from the estate of Marston Busch. Also present were several neighbors. Mr. Hernandez explained that the Demoliton Hearing Minutes 2/23/89 Page 2 assessed value of the structure is $10,842, estimated cost of repairs is $14,900. Mr. Thompson asked Mr. Alexa to explain his plans for the structure. Mr. Alexa stated that he is buying the house in a package deal with other houses that Mr. Marston owned. He was not definite on a closing date, but would initiate repairs as soon as the closing occurred which could be approximately 60 days. Mr. Thompson explained the demolition process to Mr. Alexa stating that due to the neighbor's concern we would keep the process going, and that when he owned the structure and had started repairs with a good-faith effort of completing them, that the process could be slowed or even stopped. Mr. Thompson determined that the structure at 6229 Gardenia be made safe for occupancy or demolished within 14 days. Third Case - 1713 tierce Road Mrs. Martens and her son, Max, were present. Mr. Hernandez explained that the assessed value of the structure is $2,417.00, estimated cost of repairs is $23,200. Mr. Martens explained that he was in the process of purchasing a house to move on the site, and had applied for Consumers Power shut-off of gas so he could obtain a demolition permit for the present structure. Mr. Martens had not yet purchased the house and didn't know when he would. Mr. Thompson determined that the structure at 1713 Pierce be made safe for occupancy or demolished within 14 days. Fourth Case - 715 S. Francis The Owner, Jonnie May McCullen, was not present, however, her nephew, Robert McCullen, attended in her behalf. Mr. Hernandez explained that the assessed value of the structure is $6,810, estiaated cost of repair is $9,600. Mr. Thompson asked what Mrs. McCullen plans were for the structure. Mr. McCullen stated that his Aunt wanted to fix the structure and plans to start repairs as soon as she can arrange financing. They have obtained bids to replace the furnace and install duct work. Mr. Thompson explained the demolition process to Mr. McCullen and the fact that the process could be slowed or stopped at any point. Mr. Thompson determined that the structure at 715 S. Francis be made safe for occupancy or demolished within 14 days. Fifth Case - 719 Randall The Owner was not present. Mr. Hernandez explained that the assessed value of the property is $5,941 , estimated cost of repairs is $8,500. Demolition Hearing Minutes 2/23/89 Page 3 Mr. Hernandez informed the Hearing Officer that there is major founda- tion problems with the structure along with severe sewer problems. Mr. Thompson determined that the structure at 719 Randall be made safe for occupancy or demolished within 14 days. Sixth Case - 602 S. Magnolia No owner was present. Mr. Hernandez explained that the assessed value of the property is $7,307, estimated cost of repairs is $16,500. Mr. Hernandez stated that the property was vacated and deemed unsafe in May of 1988, and that no repairs have been started on the structure. Mr. Thompson determined that the structure at 602 S. Magnolia be made safe for occupancy or demolished within 14 days. Seventh Case - 1125 N. Capitol No owner' was present. Mr. Hernandez explained that the assessed value of the property is $10,379, estimated cost of repair is $14,500. Mr. Hernandez stated that the structure has been vacant and in a dilapidated condition for some time. Mr. Thompson determined that the structure at 1125 N. Capitol be made safe for occupancy or demolished within 14 days. Eight Case - 2412 Pollard No owner was present. Mr. Hernandez explained that the assessed value of the property is $3,528, estimated cost of repairs is $13,800. Mr. Hernandez stated that he had spoken with the owner on February 23, 1989, and he is in the process of obtaining a letter from Consumer's Power to obtain a demolition permit to demolish the structure himself. There was discussion as to tabling this case, but it was decided to proceed in case the owner did not do the demolition. Mr. Thompson determined that the structure at 2412 Pollard be made safe for occupancy or demolished within 14 days. Respectfully submitted, 4Ann ^^ Henry Hernandez Acting Secretary Demolition Board 2-23-89 11 Febn,ery 26, 1989 Office, Board of Water and Light Tuesday, February 28, 1989 Lansing, Michigan The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Present: Commissioners Belen, Hassler, Jessop, Sebolt, Strolle, Roll Call and Williams -6 Absent: Commissioners Evans and McComb -2 The Secretary declared a quorum present. Quorum General Manager Panay, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) The Invocation was given by Chairman Hassler. Invocation The Pledge of Allegiance was said by all present. Pledge of Allegiance BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS Approval of Nfinutes That minutes of regular session of January 24, 1989 be approved as mailed. Adopted unanimously. CHAIRMAN HASSLER DRESS THEUNCED T MEMBERS OF COMMISSIONERSHREGARDING PUBLIC WANY ITEM BE FONRTHE Public Gam THE OPPORTUNITY TOO ADDRESS AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE COMMISSIONERS. ANYONE TO COMMENT ON ANY MATTER TO AGENDA ADJOURNMENT. AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR No persons spoke. sociation blic ��, A letter was received fBoardrom hofADirectorsmerican uapprovedethesrecommendationAby Ica advising that the APPA APPA of the Nominations and Awards Committee of the Board of Water and Light's BVs selection for The award will the Scattergood selection for the E. F. Scattergood System Achievement Award. "his theE.E.F.. Scat award recognizes outstanding achievement by a utility. System be presented at special ceremonies during the APPA National Conference Auard held June 5-7 in Orlando, Florida. Placed on file. Chair of the Long _ mattes of thanks A thank you letter was received from Donald Hines, a Long from Capital � Range Planning Committee, Capital Area UnoneFebruary for l4thto discuss the United Way for given to him, Ev Beemer and Bob Berning-- opted Way for potential for a "corporate" gift to the Capital Area United Way. speak at (o�ttee of the Whole This item will be discussed by the Committee of the Whole in April. Letter placed on file. 12 February 28, 1989 — Letter from Fred A communication was received from Fred J. Blanck, President of the BWL Blank RE: pension Retiree Association, regarding suggested enhancements to the BWL Pension plan mince ents Plan and benefits. Referred to the Personnel Committee. COMMITTEE OF THE WHOLE REPORT G muittee of the idle Board of Commissioners February 28, 1989 Report RE: Board of Water and Light 1' Capital City River— Lansing, Michigan fest request 2. ASIST Corporation Dear Ladies and Gentlemen: Work Management System The Committee of the Whole reports it met on February 14, 1989 to 3' Capital Area receive a Presentation on the following items: United Way request fora corporate 1. Request from Capital City contribution 2. ASIST Corporation's Work Management.System for Electric Transmission and Distribution. 3. Request from Capital Area United Way for Corporate Contribution. Present were Commissioners Belen, Evans, Jesso Hasslerr Strolle, and Williams. Absent was Commissioner�Sebolt. McComb, Capital City Riverfest. A presentation was made by James D. Blar behalf of the Capital City Riverfest Board of Directors invitinglthen Board of Water and Light (BWL) to be the exclusive sponsor of the 1989 Riverfest Electric Parade held during the Labor Day 'Weekend in downtown Lansing's Riverfront Park. The benefits to the communit were highlighted by Mr. Blair. The Capital Cit Y and the BWL calls for the following: Y Riverfest proposal 1• A $5,000 sponsorship fee 2. A sign for display 3. An electric bill stuffer for the month of August announcing the Riverfest event 4• " One float entry in the parade The Commissioners will be deliberating this proposal at the March 7 Committee of the Whole meeting. Electrical Transmission and Distribution Work ?Sava event Pro'ect. An overview was given by Brian Coo...er..........._..................._......._.........................Q...........................__.........J..........._.. eral isor Distribution, on the ASIST CorporationnWork Management System. Th system consists of coordination g Y The implemented by Electric EngineeringaandnthenLinehConstructioneduling ods being Departments. The overall goal of the work management system is to increase Electric Utility productivity by enhancing the coordination 13 February 28, 1989 n d scheduling job planning and line construction- and em Will be the activities between engineering ] Increased customer atisfactio mprovedtmonitoring anlity result of timely feedback from procedures. OO SISin beginning March 1, fee, or the BWL wi A report format was reviewed we sufficient to offset the $250,Oerein savings calculated over 24 months 1989 must b ll be entitled to a reimbursement of the deficiency savings. Everett Beemer, Re est Messrs. Donald Hines, resented a Cap_it_a1,,.Ar.ea,._United,._1iaY._.._...... the Capital Area United Way presented representing and Robert Kerning, pro financial supp request for the Board of Water and Ligng atmto promum corporate gift in the as a corporate entity, by gift were amount of $10,000' Three alternatives for a corporate suggested by the United Way representatives: financial gift through a cash contributtion- 1. A direct, expense, such 2. AssumPton of aofannual reportsaPoramaintenanceedtear down and as publicationthermometers. storage of campaign Washington, Services Center, 300 N. 3, A reduction in the annual steam and/or electric cost s incurred at the Community the Capital Area United Way. Lansing, owned and operated by will be deliberating this proposal at the Committee of The Commissionerstentatively scheduled for April 11, 1989. the Whole meeting, Respectfully submitted, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER SEBOLT That the Committee of the Whole Report be received as presented. Adopted unanimously. 14 February 28, 1se9 February 28, 1989 Recommendations of Director and Board of Water and General Lansing, Michigan Light Manager Dear Ladies and Gentlemen: The following items are recommended for your. approv ADMINISTRATIVE al: Res. No. 89-2-1 That City Council Request the a of June cycle f the Boar be advised thatthe three year ty to d of Water audit fain proposals for 30, 1988• Auditin Light was completed throughout the g and accountingP ted as y� audit wee accounting firm year, therefore a questions arise cycle should be Certified public retained as soon as possible. In accordance with the the Council is asked May 5' 1980 City Council conformance to obtain written resolution, interests with specifications proposals in Of the rate which are in the best Light, In addition, he ers and the Board of Water in conjunction Board asks that and and Selectingwith City staff in evaluatins staff work one for recommendation to g the the Cityproposals Counci•1. Res. No. 89_2_2 '-------- That the Board approve Amendment No. ��nt No• 2 to I'°rtation Contract with 2 to Western CSX Trans C-00934 Trans- C OD,34 Trw ortation Wes Railway, subject Portation and s Legal Co tO approval Grand Trun]t ntr�t �� � contract two unsel. This as to form by the rtatlon and 12/31 Years, with the extends the current Ra:LlGra1d �� /94, amended expiration date being '-Trent contract two years The $2.7 million of savings will customers via our energyflow adjustment through to our clause. 15 February 28, 1989 ADMINISTRATIVE SERA 13 Board-owned vehicles and g9-2-3 Authorize the following laced, be sold at auction Res. No. equipment, which have been rep or through competitive bids. ��,-;ration for 13 tion Descrip cab and g,�aied vehicles BWL # --��000# GVW flat bed eguignent to be sold 3 1977 Dodge D-300, 10, a rox. 70,004 miles); at auction or cat chassis (odometer reading PP Water Distribution Department. itive biddro- 1967 International 1600, Pitman Model 70B hY 4 rox. 45,236 miles); lift (odometer reading a PP Stores Department. 16 1982 Chevrolet Model CC31403, 000# GVW cab 10, vice body and chassis with powers sm-40832 miles) ; water (odometer reading PP Distribution Department. 10,000# GVW cab and 1961 GMC Model TC31403, 51 40 service body (odometer chassis with 56,172 miles); Water Distribution reading approx. Department. 1976 Ford Model F616, 241000# GVW crew cab and 80 odometer reading chassis with Delphi Body Construction Dept. approx. 46,272 miles) , 1977 Ford Model F-60 0, 24,000# GVW crew cab and odometer reading 102 chassis with powers body oLine Construction Dept. approx. 44,768 miles) ; 1962 Chevrolet Model CC30943, 10,000# GVW crew 115 with Powers SM-150 service body cab pickup 38,991 miles); (odometer reading approx. Distribution Department. 710 1981 Tennant Model 275 floor sweeper; construc- tion Services Department. 1979 Ingersoll/Rand Model p175WW portable air 711 Water Distribution Department. compressor; 1978 Ditch Witch Model R-40 trencher with trailer 727 Construction Department. (No. 519); Line 1977 Chicago pneumatic Model 185GZ portable air 770 Water Distribution Department. compressor; 16 Fek-uary 28, 1989 ADMINISTRATIVE SER_ V (Continued) BWL # Description (Res. No. 89-2-3) 783 1980 John Deere Model 310A tractor backhoe; Water Distribution Department. 789 1977 Chicago Pneumatic Model 185GZ portable air compressor; Water Distribution Department. -------------------- Res. No. 89-2-4 That the budgeted amount f or Projec Upgrade, be increased in the amounttof 8$10,850 Friel Dispenser Budget increase for cost of the equipment. $10 to cover the Project #� fuel dlSpenser upgrade Originally the project was estimated at telephone quotation from a 521,000 based on a from three bidders range from $31 , Actual bids received 31850 to $42,475. -------------------- HUMAN RESOURCES Res. No. 89-2-5 That Mr. J. forasu J Byrnes, Meter Reading Clerk, be awarded Suggestion Award � $464.86, suggestion edits two days before th ( 1 billing of having ISD run meter Ronald J. Byrnes in a savings of 8 1 2 g run This has resulted billing hours of clerical time for each g run and also improves customer relations by offering the customer an actual rather than an estimated bill. -------------------- It is estimated that the BWL will save $3.898.56 the first year by using this suggestion. -------------------- Res, No. 89-2-6 That Mr. Scott E. tion, be awarded Wilkinson, Operator B for Water Distribu- Suggestion Award to $141.30 for suggestion (1989-103) , for Scott E. W-11anson replacing the gate valve on the wet boring handle ball valve, thus makin g machine with a operate. This suggestion g the valves much easier to which is in constantsusenthroughout thewill allow e boring machine, utilized more efficiently, year, to be -------------------- It is estimated that the BWL will save $675.00 the first year by using this suggestion. 17 February 28, 1989 HUMAN RESOURCES (Continued) Supervisor, William D. Jones, System Production Sup That Mr. Department, be awarded $66.81 for Res. No. 89-2-7 Dep Information Systemsof adding a delete command to all suggestion (that xtr report., will not be produced. Suggestion Award MIB runs so that extraneous rep a er use cost over the William D. Jones This will result in a savings in p P course of the year. It is estimated that the BWL will save $267.24 the first year by using this suggestion. -------------------- MARK o, g9-2-8 It is recommended that the state's Residential No. Res. N Service (RCS) Plan, by which the BWLinc 1981 , be Site's Residential audits to residential customers 1989e June, discontinued effective June 30, Conservation Service ----_-_-- plan to be discoru- ----------- tinued effective these audits expires on 6-30-89 The Federal mandate requiring lcontinue to support energy June 30, 1989- with increasing emphasis groups in our service area, on energy efficiency. TREASURER/ SURER/ ROLLER to the Uninsured That the wording of the footnote relating Res. No- 89-2-g and subse- Losses-General Cash and Securities 86-2 be m1)ded from the �dumt to original original action dated 2/25 as follows: Res. $6-2-1 RE: �-' quent amendment dated 9/23/86 (Res. No. 86-9-5) insuredl DELETE: "Uninsured losses includes workers ell Cash and compensation claimsreostsabove normal Securities Fund operational or budgeted "Environmental includes any substantial ADD: to environmental expenditures relating round damages or claims related to underg storage tanks". 18 February 28, 1989 TREASURER/ CONTR LLER (Continued) (Res. No. 89-2- g With these amendments, the e will read: "Inclues Uninsured Losses, Litigations oand tEnvironmental- Environ- mental includes any substantial expenditures relating to environmental damages or claims related storage tanks". to underground -------------------- The above deletion is being made because we no longer need the explicit wording relating to workers, compensation insurance; we now carry excess workers, compensation insurance coverage which was not available in 1986. Further, the addition is deemed necessary as we are certifying to the federal government that we have suf- ficient funds in the amount of up to $1 million which could be used in the event we must expend funds for environmental damages or claims related to underground storage tanks. -------------------- Respectfully submitted, Joseph Pand Y, J3': JP/bg General Manager 19 February 28, 1989 BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS RESOLVED, That Resolu31and 89-2-4 (Adm8nistrative1Services)e) Res. 89-2-1 through and Resolutions 89 2 89-2-4 approved of the General Manager's Recommendations be approved. General Manager Pandy reported that With regard to Resolarate audits have been conducted; one for the BWL Gneral rbrager Camp in the past, two sep ne fee has the ch allocating auditthat Fiord operations and another for the BWLHEemployeeoted Pens on Fu sddisOcussincosts urges to pension BWL operating been charged for the two aadtwo-part audit bid: (1) possibility of requesting and (2) Pension Fund costs. The backctoetheo the appropriate accounts, thus 9 Pension Fund. There was not a clear consensus on this. were adopted Following discussion, Resolutions 89-2-1 through unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS RESOLVED, That Resolutions 89-2-5, 89-2-6 and 89-2-7 (Human Res. 89--2-5 through Resources) of the General Manager's Recommendations be 89-2-7 approved approved. Adopted unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER JESSOP of the General Res. 8c}2� approved RESOLVED, That Resolution 89-2-8keting) Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER JESSOP RESOLVED, That Resolution 89 2-9 (onsaberapproved Treasurer/Controller) of Res. 89-2-9 approved the General Manager's Recomm Adopted unanimously. 20 February 28, 1989 GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: BWL to receive E.F. E. F. SCATTERGOOD SYSTEM ACHIEV Scattergood S stem EKENNT AWARD. The Board of Water and g Y Light (BWL) has been selected to receive the American Public Power Achievement Award Association's (APPA) E. F. Scattergood System Achievement Award. BWL's application for the award focused on the "Share the Success"rhe and Customer Excellence programs, fiscal 1987-88 Annual Report, BWL Business Plan, Annual Report of the Electric Utility, WATTS AND DROPS, and various publications of BWL activities and programs. Mr. Pandy noted that this award was made possible through demonstrated and coordinated efforts on the part of a great number of employees. The BWL is the first public power utility in Michigan to ever receive this award, which has been given by APPA since 1946. mitts and Fops dudes MESSAGE FROM THE CHAIRMAN OF THE D BOAR . January-Feb a message from the fair- of WATTS AND DROPS, Chairman Phillip Hassler highlightstherdirectione ......._............ man of the Board the BWL has taken over the p message, he congratulated all employees ont behalf aofy the sBoard ofsCommissioners for the many accomplishments and excellent standing of the utility. APPA Performance Manage- PERFORMANCE MANAGEMENT WORKSHOP. An upcoming workshopon ment Workshop to be held management will be the pema 3/29-31/89 topic of APPA's spring meeting, Marchrfo Memphis, Tennessee. Kaset, Inc. of Tampa, Florida and Market Opinion Research of Detroit will discuss standards for, and measurement of, customer satisfaction. It was noted that the workshop is modeled after the BWL's Excellence in Customer Focus Program. receives Aa Bond BOND RATING. Moody's Investor Service has Rating rating. The Michigan Public Power Agency given the BWL an Aa bond rating. g Y (MPPA) received an A-1 Boardwide Safety Review SAFETY REVIEW, A memo has been sent to all Divisions requesting that to be conducted all as ects of BWL safety y programs be re-evaluated. This is a two- sided approach involving management and employees through their departmental safety committees. Joint efforts are underway with a target date of April 3 to render reports. Once results are in, a summary will be prepared for dissemination. Report on Export Sales EXPORT SALES. Fiscal-Year-to-Date (1/31/89) profit from sales approximately $1.3 million. A memo from Roy Peffley, datedwer February is 28, 1989, on Short-term Sales for Resale Energy Agreements with Michigan South Central Power Agency (MSCPA) and Consumers Power Company (CPCo) was handed out. The time frame of the sales are: MSCPA - 3/27/89 to 6/3/89; CPCo - 3/1/89 to 7/1/89 for a net profit of $750,000 for the two deals. The financial impact of both contracts were summarized. It was noted that with the BWL's system generation, projected system load, firm contracts, maintenance reserve and the monthly short-term sales to MSCPA and CPCo, the BWL's capacity will be sold out through July. 21 February 28, 1989 approval to a 30-Year electric Preliminary PP Board a Trustees. of WATERTOWN FRANCHISE-iven by the Watertown Township makes seven contiguous Preliminary approval franchise has been g This Watertown Frairhise Final approval is expected on March 20 where the BWL can offer electric service under statereceived a townships RED CROSS PLA UE. The Board of support ofdAmerican Red Cross RICAN Q...... American Red (Foss A?!(E....._....._.._._._..............._....... .. .. .. n plaque in appreciation for outstanding sup Plaque awarded to �' Pervices to the community. A total of 306 employees donated bloodI Q s 1988. given by Mr. Pandy A slide presentation was g Their REGIONAL„ 'WATER Clyde de Dugan on water regionalization. ficials Of the Briefing on Regional and Water. Utility Director Cly Water Meeti sponsored by joint presentation covered the thehRegionaights llWatereMeeting,d with fbenefits of j surrounding townships at 1 the 1 ing the 23, Topics reviewed were: ( ) (2) applying BWL, on February industry, action and pooling in the electric totility, and (3) proposed actions. joint action and pooling concep ts A video tape ater was shown of the BWL's an Section American Water Work's Association WATER MAIN TAPPING. COmichi' 22 in Grand Rapids. Water Main Tapping anticipation in the Michig etition held February P Comp Contest (AWWA) Water Main Tapping a record of 1 minute and 55etitions, The BWL took first place setting which tied the national record. The 1989 national AWWA comp will be held in Los Angeles, in June. Agency joint meeting A JOINT_MEETING. The first Michigan Public Power MPPA..AND... -- an Municipal Electric Association (MMEA) J Joint MPPA/M`�'A Meets (MPPA) and Michig on May 10-12, 1989. Some of the scheduled to be held 5/1�12/89 will be held in Lansing functions include: Wednesday_.,:�aY.__10 - Speaker: Larry Hobart APPA MMEA/MPPA Luncheon Executive Director, _ Vegas Night to follow MPPA Dinner Thursday.,. xax..11 _ Speaker: Robert A. Bowman MMEA/MPPA Dinner State Treasure Commissioners and staff are urged to attend to show strong Lansing support. vaca- GENERAL MANAGER.__- VACATION PLANS. Mr. Pandy will be vacationing In General Mwlager to South America from March 9-19 adopted by the Board on tion in South Anoka gY policy adop ATIVE. er Joe Wolfe is the igPPA_.AhTERriATE REPRESENTATIVE. Bill Cook appointed � December 18, 1984, Assistant General Manager suggested representative resentative on MPPA's Board of Commissioners Pandyesugges the porary p d designated BWeTrep the alternate representative. to MPPA Boar General Manag orary representative to serve as mfromlback the designation of a temp absence who is recuperatingothe Brush i on the MPPA Board in Joe Wblal ervisor, surgery. Bill cook, Technical General Sup was suggested as the ' Electric System Operating Center (BESOC) , e by virtue of his involvement appropriate representativ with MPPA's power pool activities. 1 ) ) 22 February 28, 1989 BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN Res. 89-2-10 approved Resolution 89-2-10 Bill.._Coog..... s....her-eb appointed of Water Light's representativeOnthe MPPAeBoardtheBofrCommissionersd until such time that the Assistant General Manager, as the Official representative, resumes his duties. Adopted unanimously. Centaur VS &JC, Trial CENTAUR .scheduled for 3-13�9 VgVL. The trial on the Centaur v BWL case is set for March 13, 1989. This case pertains to the BWL's Application Charge. BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER WILLIAMS Excused abse� That the absences of Commissioners Evans and McComb be excused. Adopted unanimously. �Jouz7ment On motion of Commissioner Strolle , the Board adjourned at 6:33 p.m. -71 Mary E. ova, Secretary 00 Filed: `O March 2, 1989 00 f r Rita M. Bauman Cityf Clerk 23 March 28, 1989 Office, Board of Water and Light Tuesday, March 28, 1989 Lansing, Michigan The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belem, Evans, Hassler, McComb, and Williams -5 Absent: Commissioners Jessop, Sebolt and Strolle -3 The Secretary declared a quorum present. Qu°rlum Sova and Executive Staff members were General Manager Pandy, Secretary ,s Office.) present. (An attendance list is filed in the Secretary The Invocation was given by Chairman Hassler. InVOcatiOR all present. The Pledge of Allegiance was said by Pledge BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER WILLIAMS oval of That minutes of regular session of February 28, 1989 be Appr approved as mailed. Minutes Adopted unanimously. E PUBLIC CHAIRMAN HASSLER ANDED THETCOMMISSIONERSMEMERS OF HREGARDINGWILL BE ANY ITEM ON THE Public Garments THE OPPORTUNITY TO ADDRESS T AGENDA AT THE TIME ANYONEHWISHINGITEM ISTO COMMENTOPEN FOR DONCANYI TMATTERNOT ON THE COMMISSIONERS. AGENDA MAY DO SO AT THIS TIME OR IMMEDIATELY PRIOR TO ADJOURNMEN . No persons spoke. COMMITTEE OF THE WHOLE REPORT March 28, 1989 Cannittee of the Board of Commissioners RE-: Board of Water and Light Whole Report Lansing, Michigan 1) Status of Combined 1989 to discuss Billing System 2) Request of Capital The Committee of the Whole reports it met on March , City Riverfest Board the following items: 1. Status of the Combined Billing System. ital City Riverfest Board. 2, Request of the Cap Present were Commissioners Evans, Jessop, Hassler, Sebolt, Strolle, and Williams. Absent were Commissioners Belen and McComb. 24 March 28, 1989 COKBINED BILLING. The General Manager reported that a walk-through of the Combined Billing System was conducted.Systems Division for the high er commended the Information g quality work performed to date. An overview was presented of conclusions, findings and recommendations for the quality assurance review of the Combined Billing System, performed by Peat Marwick Main & Co. The consultant's recommendations were summarized as follows: I. Reorganize the project under a key user. 2• Involve users in project activities. 3. Adopt a project management reporting system. 4. Provide training for project team members. Based on the consultant's recommendations, the Combined Billing project has been reorganized with the appointment of Engineering Division Director John Elashkar as the Project Manager. Reporting to Mr. Elashkar on the project are the following group leaders: User Group - Virginia Gallegos, Superintendent Customer Service Development - Jim Wile, Business System Analyst Information Systems Department Audit/Control - Kellie Willson, Internal Auditor After the formation of the project team, the General Manager requested an evaluation of options available for a computerized business system (combined billing) . Costs, benefits, advantages and disadvantages were evaluated for four options. I. Maintain the present system II. Continue the development of the Combined Billing System III• Purchase a software package IV. Utilize a hybrid system of Options I and II The Project Manager reported that based on a ten-year present worth analysis at 7 percent, Option II was selected--to continue the development of the Combined Billing System (Phase I) at an approximate cost of $1,775,000. The revised Phase I implementation date is August 1, 1990. Three milestones have been established to provide updates to the Commissioners: 1. After walk-through II 2. After documentation is completed 3. After testing The presentation was concluded with a demonstration of the Combined Billing System functional areas. CAPITAL CITY RIVERFEST - At the February 14 ............ ..... meeting, Y 1989 Committee of the Whole g, the Commissioners received a Proposal from the Rilrerfest Board of Directors for the Board oofWater and LightatoCbeythe 25 arch 28, 1989 erred until the March It 1989, onsor of the 1989 RiverfestfElectric Parade held during the exclusive sP This request was de Labor Day Weekend. Committee of the Whole meeting- light Of that request. In policy on "No Cash Contributions policy does The Commissioners met to discuss this re 85-�-3� - request, they discussed the p Board at Water and Light support through means other than Charitable Organizations (Resolution No• is related to some provide forof organizations whose Purpose roval cash contributions, subject to budget ap r ram of the utility, and program primary or secondary purpose ort may include advertising by the Commissioners. This support Commissioners concurred that Rtoethest hi which further the business interests of the Board f Water sponsorship The Co and Light in the community. positive contribution is a growing event and one which makes of ansing. Board of Water and Light and the City onsorship of Following discussion, the Commissioners concluded that sP Policy Advertising of this nature will be left the 1989 Riverfest Electric Parade would not violate the Board's lve to cashdiscretioncOft to the ributions staff. Respectfully submitted, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER EVANS-- SECONDED BY COMMISSIONER WILLIAMS That the Committee of the Whole Report be received as presented. Adopted unanimously- 26 1 hrch 28, 1989 Recommendations Of Director and Board of Water and Light General Lansing, Michigan Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE SERA Res. No. 89-3-1 That the following 11 Board-owned vehicles and equipment, AuthO which have been replaced, be sold nzation for 11 at auction or thoug 34�1ed vehid� competitive bids. through and equigrent to be BWL # sold at auction or — Description competitive bid 19 7980 Dodge D-750, 5,400# GVW V-8 Pickup Truck, odometer reading approx. 71,074 miles; Garage. 32 1984 Dodge , 5,850#, GVW V-8 Pickup Truck, Miles; ft box, odometer reading approx. 67,873 Water Distribution Department. 43 1984 Chevrolet Model Truck CG21005, 6,600# GVW Van T' V-8, odometer readingYPe miles; Water Distribution De papprox. 76, 113 artment. 48 1984 Chevrolet Model CG21005 Truck, V-8, odometer 6,600# GVW Van Type miles; reading approx. 52,076 Water Distribution Department. 108 1981 Chevrolet Model CG�;,903 Truck, V-8, 8 ft. box, odometer read GVW ing aPickup 31,820 miles; Water Production De ppYOx. 127 partment. 1984 Chevrolet Model CG21005 Truck, , 6,600# GVW Van Type V-8, odometer reading approx. 72,366 Miles; Appliance Repair Department. 128 1979 Dodge g W-200, 8,400# GVW Pickup Truck, 4 wheel drive with plow, odometer reading approx. 32,271 miles; Construction Services Department. 131 1979 GMC TC31305, 9,600# GVW Pickup Truck, 4 wheel drive, V-8, odometer reading approx. 35,852 miles; Production Maintenance Department. 144 1982 Chevrolet Model CG10903 Truck, V-8, 8 ft. box S,600# GVW Pickup 63, miles; ' odometer reading approx. Construction Services Department. 27 arch 28, 1989- ADMINISTRATIVE SERVICES (Continued) Description BW= Coupe, V-6, odome ter reading 89-3-1) 316 1983 Olds B-37 Omega (Res. No. approx. 47,591 miles; Customer Service Dept, 984 Olds Omega Coupe, V-6, odometer reading 1 319 303 miles; Meter Reading Department. approx. 70, ENGINE 000 be issued to purchase order in the amount Oflllinois to provide Res. No. 89-3-2 That a P Company of Chicago, Moores Harza Engineering purchase order to professional services and assistance in licensing Park and North Lansing Hydros. Harza Enguieering ----- �ny to provide ------------- -- professional ser 19, 1 g89, informed us that vices and assist FERC, in their letter of January 1988 failed to ante -1 cens>� lications submitted November 1 , , regulations Moores Park and the aPP requirements of the Commission's 9 North Ians� conform to the and requested several evaluations and studies to be Pe Hydro formed. Harzawill be working with Environmental Engineering De- espond to FERC as well as request extensions partment to r 19, 1989 response deadline. to the April company contacted because of their extensive experience in Michigan Harza was the only and C. Presently erience with MDNR an alone. projects are involved in licensing 11 HUMAN RESOURCES Harry Chandler, construction mechanic welder in 89-3-3 That Mr. be awarded $60.00 for suggestion Res. No Construction Services, to fabricate a Suggestion Award to (1989_116) , suggesting a different way ening curb boxes. This method will aid Scott E. Wilkinson special tool for op efficiency and safety. -------------------- It is estimated thasuggestion. uthe sBWori Will save $240.00 the first year by using this g 28 March 28, 1989 HUMAN RESOURCES (Continued) Res. No. 89-3-4 That Mr. Harold J. Miller, tion, be awarded , Mechanic B for Water Distribu- Suggestion Award to tion, be a ar $419.88 for suggestion (1987-99), to use Harold J. Miller 60 audio visual l work ocators for service order . This suggestion will generate a savings tion time and increase in produc- accuracy and reliability. It is estimated that the year by using this BWL will save $3,448.80 the first suggestion. -------------------- INFORMATION SYSTEMS Re 89-3-5 Award a contract to Unisys Corporation, Bluebell a sixty (60) month extended term , PA, for Contract to Unisys System Software. Plan for 2200/402 Computer COrporation for of $81 ,794.71 and This is to be paid in a first installment W-mmth extended $15,705.71. fiftY-nine (59) monthly payments of term Plan for 2200/402 CORputer This contract guarantees no price increase for sixt at which time it can be reviewed. Y System Software months (60) BWL Price only has a twelve (12) month Currently, the which time the protection at The above Price is projected to increase oveYrantee at 15 with the price is less than the monthly price agreed purchase of the 2200/402 Hardware (Res 88-11-10 - $949,926). . No. Funds to cover the cost of this are included in the 198g-90 Capital and O&M budgets. Unisys is the only supplier of the software for their thus s they were the only bidder. The present value analysis of this extended license is $36,877; better for the BWL than the license payment of $828,259. optional one time 29 March 28, 1989 TREASURER/ CONTROLLER That the "Payroll and Pension Roll" bank account earswhich ofwill Res. No. 89-3-6 1989 to the have been at the NBD Commerce Bank forlt three Pension June 30, 1989, be transferred on July Payroll and Michigan National Bank, and that the "Customer Deposit Roll accounts trans- ld Kent ferred to Michigan Refund" bank account which will ears,have bbentransfer at the Ored on Bank of Lansing also for three y These two National Bank�- July 1 , 1989 to Manufacturers Bank of Lansingo three tomes Deposit Refund account transferrer accounts to remain at the above banks or u to Manufacturers years. Bank ------------- It is our custom to rotate these two accounts every three years among the local banks and the two banks recommended e in to receive these accounts, effective July line for the selection. We do not expect either bank to invoke service charges on these accounts- -------------------- ee Liability insurance Purchase Public heeoffls gencyls drepresenting Lexington Res. No. 89-3-7 from Lyman and Sheets Agency March 28, 1990 at Purchase of Public Insurance Company for the period ending premium of $91 ,774.50 for $5 million of liability an annual p 000 per insured individual Officials and e with a retention of $5, Fmployee Liability coverage per loss. This was the best insurance from Lyman and a maximum of $50,000 and Sheets Agency evaluated bid of those received. -------------------- Co. at Other bids received were from (a) Lyman and Sheets, representing International Surplus Lines InsuranceInsurance an annual premium of $101 ,544.06, and (b) Lansi Agency representing Lexington Insurance Company at an 940. The expiring insurance was annual premium of $100, with International Surplus Lines at a premium of $111 ,641 .98 with coverage similar to that proposed. 30 March 28, 1989 WATER Res. No. 89-3-8 That the Board agree to serve water to trict 52, Delhi Township, Proposed Water Dis- Approval D Delhi Charter Township Board ong October uested b4 resolution of the ��p Water erIhs- accordance with the agreement between the Board and the 1988 and t in tr trict 52 — Dutch ' Charter Township of Delhi dated August 15, 1972, covering Meadows Subdivision the furnishingof a p Phase II, Lots 19-30 the Board advise officialseOfater Delhiu Township Dashfollows: I. The Board will accept Water District No. 52 estab- lished by Township resolution on October 4, 1988 and will provide a potable water supply to said district. 2. The Township will be required to make an $18,540 non- refundable contribution in aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LII) covering the furnishing of a potable water Supply in Water District No. 52. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for water service. Further, that the project be approved for installation, and the General Manager and Secretary be authorized to sign the aforementioned agreement (Supplement LII) to furnish a Potable water supply in Water District No. 52 as follows: Dutch Meadows Subdivision Phase II, Lots 19-30 To provide a potable water supply within the proposed new district requires the installation of 820 feet of water main at the estimated cost of $15,170 and two (2) hydrants at a cost of $3,370. The main extension will serve 12 residential customers. One time connection fees will amount, to $4,788. annual revenue is $2,340. Estimated Water mains to be installed in the summer of the signing of the agreement. 1989 following 31 Nb rch 28, 1989 WATER (Continued) That the Board agree to serve water to proposed Water as requested by resolu- tion No. 89-3-9 21 , District No. 53, Delhi Township, Board on February Approval Of Delhi 1989 of the Delhi charter Township agreement between the Township Water Dis- 1g89 and that in accordance ip oftDelh dated August 15, trict 53 - Eifer� Board and the Charter Township in of a potable water supplying Road/Holt Road Areajg72, covering tth f eB hoardadvise officials of Delhi Town- Delhi Township, ship as follows: tab- 1. The Board will accept Water District No. 53 es1989 n February 21 , and lished by Township resolution o ly to said district. will provide a potable water supp 2. The Board and the Township are to enter into a written agreement (Supplement LIII) covering the furnishing of a potable water supply in Water District No. 53. 3. Water mains are to be installed in accordance with the current Board's Rules and Regulations for water for service. Further, that the project be approved installation, and the General Manager and Secretary be authorized to sign the aforementioned agreemesupplY in (Supplement LIII) to furnish a potable hical area of Water District No. 53. The geograp Water District No. 53 is as follows: Eifert Road from Willoughby southerly to a point 145 feet north of the center linen of Wilcox and Holt Road from Eifert easterly 60 Meet a west of the center line of Heatheon. To p ovid potable water supply within the proposed dis- trict requires the installation of 9,290 feet of water main at the estimated cost of $359,339. The main extension will serve 86 residentialhismand One commercial customers existing structures will time connection fees for exi amount to $35,511 . The potential frontage charges would amount to $190,053. Estimated annual revenue for existing is $35,900. -------------------- Water mains to be installed in the Spring of 1989 following the signing of the agreement. This Water District was previously authorized as the "Delhi Township Reinforce- ment". 32 March 28, 1989 WATER (Continued) Res. No. 89-3-10 That charges in the Board of Water and Light Regulations for Water System Extensions s Rules and Charges BWL Rules changed to $18.50 Sheet 12.05, be in Regulations cover- with an additionalp15%linear foot of water main installed, ing water' system ex- and $1 ,g85 per linear foot on improved roads, i , Sheet 12.05 tion season,Per hydrant installed during the 1989 construc- and that these charges be applied to service lines tapped off applicable Board of Water and Light financed water mains. -------------------- Respectfully submitted, Joseph Pandy, Jr. JP/bg General Manager 33 March 28, 1989 BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER WILLIAMS 3-1 approved RESOLVED, That ReltRecommendations(Administrative approvedServices) of Res. 89- P the General Manager's Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER WILLIAMS That Resolution 89-3-2 (Engineering) of the General roved RESOLVED, Rom, 8g`3-2 aPp Manager's Recommendations be approved- Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER BELEN RESOLVED, That Resolutions 89-3-3 and 89-3-4 (Human Res, and Resources) of the General Manager's Recommendations be gc�314 approved approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER BELEN That Resolution 89-3-5 (Information Systems) of the roved RESOLVED, Res, g9-3-5 app General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER McCOMB RESOLVED, That Resolutions 89-3-6 and 89-3-7 (Treasurer/ Res. 80}3-6 and Controller) of the General Manager's Recommendations be approved. 8}�7 approved Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN RESOLVED, That Resolutions 89-3-8, 89-3-9 and 89-3-10 (Water) of Res. 89-3-8 through the General Manager's Recommendations be approved. 89-3-10 approved Adopted unanimously. 34 March 28, 1989 UNFINISHED BUSINESS - WATER REGIONALIZATION ............. ater egionalization . ......... .." " ............... briefing General Manager Pandy gave a recap of a briefing the Commissioners received at the February 28 regular meeting on water regionalization. The Commissioners were asked to (1) authorize participation in the Regional Water Supply Stud designate Clyde Dugan as the BWL's representative on the estudy gro gro Director, (3) pledge a pro rata share of the cost of the study, and on Population. Representatives from surrounding cities�andsed townships who attended the informational meeting regarding a regional a water supply and distribution approach to their responses r and i from the BWL to solicit g hopefully letter commitment. y get their BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER McCOMB Resolution 89-3-11 ................... Joint Action Water Study Res ............. . . 89-3-11 Board authorization for BWL WHEREAS, the Board of Water and Light desires to develop the to Participate in Greater Lansing regional water supply in a reliable Joint Action Water cost manner,and, , efficient, and low Study WHEREAS, an engineering mic is necessary to examine alternatives eand omakefeasibility recommendationsyrelative to the technical and financial aspects of these alternatives. NOW THEREFORE the Board of Water and Light agrees to participate in the Regional Water Supply Study, and designates Clyde R. Dugan as its official representative to develop the study specifications, review proposals, retain consultants, provide data, and review the study recommendations. AND THE Board of Water and Light agrees to financially support the cost of the Regional Water Supply Study in the amount of 46% of its cost, based on the population formula utilized by the Tri-County Groundwater Management Board. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: Joe Wolfe returns JOE WOLFE RETURNS TO WORK. to work fran sick-leave welcomed back to work following Assistant General fManager Joseph Wolfe was rom Wally N1, 19 to retire WALLY NOURSE TO RETIRE. The retirement of Treasurer/controller y. August 1, 1989 .. ............ ... ko'ur I. August was announced. Mr. Nourse's retirement will take effect Wallace August 1, 1989, after more than 15 years of service at the BWL. for his retirement dinner will be forthcoming. Plans 35 March 28, 1989 • the loss of BWL employee Arleen Laser ARLEEN LASER VICTIM OF TRAGIC FIRE. The BWL is mourning ed by ire in her employee Arlene Laser who lost hmarchf27. Mrs.e from a fLaser fWas employ victim of fatal file apartment early Monday morning, Leader- the BWL for over 21 years. She held the position of Group mers Services Division. Customer Assistance in the Consu ibution WATER_UTILITY_ANNUAL...REPORT. A Highlight of the Water DistDecember 31a Water Distribution and - - Engineering Department Annual Report for the period ending periods Fngineering Department 1988 was presented. The report compares annual data for the Annual Report for prod January 1, 1986 to January 1, 1989- Of significance was the increase ended 12/31/88 review in total water mains installed--30,787 feet in 1989 as compared to 5,550 feet in 1986•compared .0045 i94reliability 1986showed theimproved averageesults-- 99.9862 in 1989 as Pared dropped to 1.15 hours in 1989 as interruption time per incident has was notedit compared to 2.31 hoursf r approximately 60`koftthe breaks rink25%n h of the Landel System account BWL's water distribution system. I. Status repo dated March 15, rt on TTIC STATUS OF THE._ITI/EPRI ELECTROTECHNOLOGY APPLICATIONS.._PROGR'' COPY Committee, Applications Project of a memo to the ITItEPRI Project gy Institute (ITI) was handed out. 1989, from the Industrial Technology Excerpts from an ITI report indicated that success has occurred in the Induction Hardening ofoject Generalth BOC Motors. The application consistedof Powertr-ov Division "change-over from a cast iron camshaft ointed hardened thatsteel directcamshaft local for greater stress tolerance." Mr. Pandy p manufacturing benefit has resulted from this structural technology experiment. The Co ram authorized the e BWL's onNovemberi22, 1988 in ITI's Electrotechnology Applications (Res. 88-11-7) . competition CONSUMERS POWER COMPANY. The Commissioners were advised ofertaining to Briefing on compe -. - - matter with Cons�s�x's competition matter between Consumer Power Co. aelectrind the c seWL rvice to a the Watertown Township franchise and providing prepared by Power Cony new Meijer's subsidiary warehouse. A fact sheet is being Pre P staff attorney Larry Wilhite on the pros and cons of BWL actions in this controversy. The Commissioners were advised RIVERFRONT ECONOMIC DEVELOPMENT PLAN. Department City of Ding pre- of a memo received from Alan Tubbs, Director of the Lansing The BWL paring an Up for a & Municipal Development, dated March 20, 1989' The pared by Riverfront Economic of Planning Development Plan been requested to Division Directorft Pinrresponseotopaorequestpreceived the City a Riverfront Economic Development from the City Council to develop Plan. Written comments from the BWL are requestedby the City by March 30 to to consultants the incorporate in a final RFP for sending nthegRFP regarding Ottawa station were first week of April. Excerptsof ro riateness of the City highlighted. Discussion pointed to the app P studying the feasibility of the Ottawa Station before a final decision is made by the BWL on the future of the plant. Planning Board's ctor oncerns will be communicated to the City. Engineering Ophaug is the BWL's representative for planning matters. 36 March 28, 1989 Update on scheduled FUTURE MEETINGS. theCCF Ccmamee meetings for meetings around toIvariousn l th oving BWL facilities,Committeeole be the dssioners held at Ottawa Station, on April 11 include: at 5:30 P.M. Agenda items 1. Request of Capital Area United Way 2. Review of Capital Project Variances 3. Future of Ottawa Station A Personnel Committee meeting is scheduled for April 19 at 12 noon. Agenda items include: 1. Review of quarterly pension fund investment status 2. To discuss the letter, dated February 20,1989, from Fred J. Blanck, President of the BWL Retiree Association, regarding suggested enhancements to the Pension Plan. 3. Review of Human Resources Policies Agenda items for the May 9th Committee of the Whole meeting include: 1. Budget for Fiscal 1989/g0 2. Financial forecast for electric, water and steam 3. Ratemaking strategy 4. Proposed bond issue for water and electric projects The meeting will be held in the Board Room at 5:30 p.m_ Briefing on Capital Budget CAPITAL BUDGET COMPARISON Pa .r'-s°n capital budgets was handed out cfore review. The sheetsummarizes comparisonondnsed year (FY) FY '87/88 through FY '89/90 Net Normal Capital Additions and Net Major Capital Projects by utility. The capital budget will be detailed in greater depth at the Committee of the Whole meeting in May.BWL Plowable Back--Fill BWL FLOWABLE BACK-FILL DEMONSTRATION. The BWL will be conduct' Dermnstration scheduled Flowable Back-Fill Demonstration, on April 20 from 1:00-2:00 on 4/20/89 conducting a the BWL Lake Lansing Road ash storage site. Contractors and engineers have been invited to attend. Price Waterhouse 1988 PRICE WATERHOUSE 1988 Mxncipal Electric Survey Waterhouse 1988 Municip�ISurveyAL UonLelectrITY UiicEand watersummary oYethe Price results Mr. Pandy highlighted the BWL's standing compared at the surveys. presented. Electric: There were 22 electric municipal utilities surveyed. Generally, BWL rates ranked 26% below the average and expenses ranked 17% below the average. In comparison, the BWL is in very on all the electric items with the exception of the Administrativenandg General Expenses. Mr. Pandy noted that many utilities spread their Administrative and General Expenses over production, transmission and distribution accounts; the BWL, however, does not. Staff is the possibility of changing this method to maintain uniformity twith nthe other utilities surveyed. 37 March 28, 1989 Water: With regard to the water survey, the BWL is the largest utility included in the study. The BWL ranked higher than the survey averages for all Operating and Income and Operating Expense measures, except two. Mr Pandy pointed out that this is due to the fact that the BWL uses the lime-soda ash softening process and is removing sludge from the Riverside Ponds. The same comments about Administrative and General Expenses mentioned above for Electric also app Y to the water utility. . rest CONFLICT OF INTEREST DISCLOSURES. FA con nancialcPlanning t of eDirecrorcDana re, Conflict of Interest Dis- dated March 9, 1989, submitted by closures for Dana TousleY Tousley was read. Mr. Tousley's statement explains that a possible and Joseph Pandy conflict of interest, or the appearance of one, may be present for doing business with Michigan National of theBank. This is BWL Purchasingfiled Policyursuant to the requirements of sects 4 Mr. Tousley's disclosure was placed on file. so ed to e on he General Manager Pan lien has apur chased h3001 shares hof common stock t stockof record the fact th of Cap itol Capitol Bank Corcerofi$9'peYdshaOre. The General National o 1-24-89 at a prl lative to investments in Capitol National participate in decisions re Bank. er Pandy and APPA NATIONAL CONFERENCE. General Manager Pandy has been invited by General�g APPA to lead the discussion at the 1989 National Conference on the Financial Planning Director the top incentive to s at topic "Financial Incentives for Performance Improvements." The BWL s Tousley invited p� Share the Success program is considered to be among APPA National Conference programs in the country. A highlight of "Share the Success" will be in June presented by Mr. Pandy. Financial Planning Director Dana Tousley has also been invited to speak at the National Conference on the topic Of "What To Say When the City Asks for More Money." COMMISSIONERS' REMARKS Commissioner Williams congratulated Environmental Engineering staff for Comments re: 1989 being selected by the Department of Natural Resources (DNR) to receive Fnvirommental Excellence the 1989 Environmental Excellence Award. Award Commissioner Williams inquired on the status of the Creyts Road Landfill. is with Steam Utility Director Woodard-Yauk reported that she ro riaterapprovals Update on Creyts BWL Environmental Engineering staff in securing pp P Road landfill . She noted that numerous personnel changes have occurred for the site at the DNR, whichcreated is now beingdtakensome elaywbyhthepBWL. Theo site is being different approach pursued for a designation acharacterizeds a lthelmaterialD that aisltolbete the BWL has not adequatelyConsequently, the BWL is being asked to refine placed in the facility. the testing program and to conduct additional testing. 38 March 28, 1989 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Excused Absences That the absences of Commissioners Jesso excused. p. Sebolt and Strolle be Adopted unanimously. Adjournment On motion of Commissioner Evans, the Board adjourned at 6:40 p.m, Mary ni ova, Secretary co �-+ Filed: March 31, 1989 J 03 00 w rn Rita M. Bauman, City Clerk F- 3 00 V- N O S � U Y !Y Z Q n 39 April 2-5, 1989 office, Board of Water and Light Tuesday, April 25, 1989 Lansing, Michigan The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Present: Commissioners Belen, Evans, Jessop, Hassler, McComb, Roll Call Strolle, and Williams -7 Absent: Commissioner Sebolt -1 Quorum The Secretary declared a quorum present. General Manager handy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) Invocation The Invocation was given by Chairman Hassler. Pledge The Pledge of Allegiance was said by all present. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN That minutes of regular session of March 28, 1989 be approved Approval of as mailed. Minutes Adopted unanimously.OUNCED E PUBLIC ILL BE DED Public Corments CHAIRMAN HASSLER ANNDDRESS THETCOMMISSIONERS MEMBERS OF H W REGARDING ITEM FONRTHE THE OPPORTUNITY TO A AGENDA AT THE TIME SUCH ITEM IS OPEN FOR DISCUSSION BY THE R NOT ON THE COMMISSIONERS. ANYONE WISHING S TIME OTOI COMMENT TELY PRIOR ON ANY ATOEADJOURNMENT. AGENDA MAY DO SAT No persons spoke. camm ication from A letter of thanks and appreciation was received from Douglas A. Douglas Van Epps RE: Van Epps, Attorney, Lansing, for the prompt response received from Mary Freedom of Information Sova on a Freedom of Information request. Request placed on file. COMMITTEE OF THE WHOLE REPORT April 25, 1989 Ccandttee of the Board of Commissioners Whole Report RE: Board of Water and Light 1. Capital. Area United Lansing, Michigan Way reports it met on April 11, 1989 to discuss Z, Capital Project Var- The Committee of the Whole lances the following issues: 3. Future of Ottawa Station 1. Request of Capital Area United ay 4. Dispute with Consune�s 2. Review of Capital Project Variances 3, Future of Ottawa Station a contractual Power Con�y 4. Written legal opinion regarding dispute with Consumers Power Company 40 April 25, 1989 Present were Commissioners Evans, Jessop, Hassler, McComb, Strolle, and Williams. Absent were Commissioners Belen and Sebolt. CAPITAL AREA UNITED WAY. At the February 14, 1989 Committee of the .... ............... Whole meeting, the Commissioners received a request from the Capital Area United Way for the Board of Water and Light to provide financial support, as a corporate entity, by considering a minimum corporate gift in the amount of $10,000. The following three alternatives were suggested by United Way: 1. A direct, financial gift 2. Assumption of an annual expense 3. A reduction in the annual steam and/or electric cost A decision on this request was deferred until the April 11, 1989 Committee of the Whole meeting. Following discussion, the Commissioners agreed that providing in kind service to the Capital Area United Way would not violate the Board's Policy relative to not making direct cash contributions. Support in the form of advertising and program sponsorship which further the business interests of the Board of Water and Light in the community is considered appropriate. Providing support through in kind services will be left to the discretion of staff. Res. 89-4-1 Resolution 89-4-1 RESOLVED, The Board of Commissioners endorses staff s _Authorization to provide recommendation to provide in kind support to United Way throughtheassumption ofpthet Capital followingto the annualArea Capital Area United Way expense items: I. Sponsor the publication of a weekly report in the LANSING STATE JOURNAL during the fall campaign at a cost Of approximately $4,400. 2. Update, maintain, tear down and store the campaign thermometers at an approximate cost of $4,500. CAPITAL PROJECT VARIANCES. The General Manager reviewed the following five Major Capital Projects (Exhibit A) with revised completion costs in excess of 15 percent of the original cost as they appeared in the March 13, 1989 status report: Original Revised Project No. 83-3 Water Instrumentation $ 300,000 $ 420,000 Eckert Station Project No. 87-106 - Water Make-Up Supply 850,000 1,500,000 Erickson Station Project No. 88-110 - Chemical Unloading/Handling 200,000 450,000 Dye/Cedar Complex Project No. 87-120 - Watertown Township Extension 1,309,000 1,446,000 Water Distribution Project No. 88-113 - Deaerator Addition Moores Park Station 500,000 1,500,000 41 April 25, 1989 Capital Project variances will be reported to the Committee of the Whole basis. Following discussion, the Committee of the Whole on a monthly royal: adopted the following motion and recommends Board approval: Resolution._89_-.4„-2. RESOLVED, That the Capital Prts by 15rpercent/orhich have $200,000, Res. 89-4-2 exceeded estimated cost amounts Approval of capital whichever is less, be approved as presented. projects overrun artment for OTTAWA STATION OPTION FOR ,PRESSURIZED FLUIDIZED,.BED COliBUSTIO . e S Presentation on Ottawa conducted by the Project Engineering Dep Station options for results of a study an 80MW Pressurized Fluidized Bed Combustion (PFBC) system at ottawa pressurized fluidized Station were presented by the General Manager. The study examined the bed combustion following three options: 1. Retrofit within the existing Ottawa Station 2. Installation of new boiler in adjacent parking lot north of Ottawa Station parking lot and 3. Combustor and Gas Turbine in p retrofit steam turbine in Ottawa Station Project Engineering also evaluated the following additions to the PFBC Addi_tional....Costs system: $3,100,000 1. Cost to cover the coal pile 3,530,000 2. Cost to provide public access to the stack air cooled 3. Cost of dry cooling tower; i.e. , 6,920,000 condenser 8,000,000 4, Cost of an extraction turbine ( xhi The original cost summary three with theoadditionstoutlEnedbabove and a summary of cost modifications (Exhibit C) are attached. formational purposes only. No action Staff presented this item for in was taken. CONTRACTUAL DISPUTE WITH CONSUMERS POWER COMPANY The Commissioners met ... gal nion in closed session to review a cwritten by onfidenti�helJune 7p11968�agreement Staff Attorney Larry Wilhite, regarding between Consumers Power Company and the Board of Water and Light. Following discussion, the Committee of the Whole adopted the following royal: motion and recommends Board app Resolution No. 89-4-3 orts in staff RESOLVED, The Board of Commissi I.oners sup. service Res. 89-4-3 fulfilling all obligations with respect to providing Board supports staff relative to providing under the franchise to be acquired from Watertown Township. electric service under franchise to be acquired Respectfully submitted, from Watertown Township Gerald W. Williams, Chair Pro Tem Committee of the Whole 42 April 25, 1989 BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER JESSOP That the Committee of the Whole Report, including Resolutions 89-4-1, 89-4-2, and 89-4-3 be approved as presented. Adopted unanimously. Personnel PERSONNEL COMMITTEE REPORT Cormdttee Board of Commissioners Report RE; Board of Water and Light I. Pension investments Lansin April 25, 1989 2. Letter received from g Michigan Fred Blanck re: en- The Personnel Committee reports it met on April 19, 1989 to discus hancerrents to Pen- following items: sion Fund s t h e 3. Human es Resourc Policies es 1. Quarterly pension fund investments. The Committee's tiony Employment recommendation relative to the Pension Fund has been b) Settlement of Fm- submitted to the Pension Fund Trustees. Ployre c) Rat Claims 2. Letter received by the Chairman of the Board, dated Ratification of Februar Policies previously y 20, 1989, from Fred Blanck, President of the approved Board of Water and Light Retiree Association, regarding suggested enhancements to the Pension Fund. The Chairman referred this letter to the Personnel Committee for review and consideration. 3. Human Resources Policies. Proposed policies on (a) Probationary Employment and (b) Settlement of Employment Claims were reviewed along with policies Previously approved by the Board. Present were Commissioners Jessop, Sebolt, and McComb. Following review and discussion, the committee adopted the following resolutions and recommends Board approval: Res. 8+$ Resolution 89 4-8 Cost information re- Cost Information for Improveme .. 1. quested for improvements ................. .. ............. RESOLVED to retiree benefits That staff provide cost information to the Personnel Committee on the following items by the fall of 1989 for review. 1. Possible inflationary adjustment options to retiree pensions. 2. Increase in Medicare Part B reimbursement. 3. Availability of retiree participation in the employee/retiree Paid eye glass program. RESOLVED FURTHER, That a target implementation date of January 1, 1990 be considered if it is determined by the committee that the above benefits are economically feasible. 43 April 25, 1989 Human _Resources..Policies That the following Human Resources policies be approved as submitted: Res0lutiO.n89-4-9 Re: Probationary Employment Page 50 Page 51 Res. 89-4-9 Resolution 89 4-_10 Re: Settlement of Employment Claims Probationary Employment Policy Further, that the previously approved Human Resources policies Res, 89-4-10 be reconfirmed as submitted. (These policies are on file in the Secretary's Office and are available on request.) Settlement of Employ- ment 0-aims Policy-.- Respectfully submitted, E. Lane Jessop, Chair Previously approved Personnel Committee I uTon Resources policies reconfirmed By COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER McCOMB That the Personnel Committee Report, including Resolutions 89-4-8, 89-4-9, and 89-4-10 be approved Adopted unanimously. Aril 25, 1989 �- '° 1�(H I B I T A WATER&L1CHT SINCE 1885 Box 13007 113 W.Ottawa Street Lansing,MI 48901-3007 Memo: April 11, 1989 517.371-6000 TO: Joseph Pandy, Jr. FROM: John Elashkar.5i!�'% SECT: Major Capital Projects Overrun The following is an e%planation of Major Capital projects with revised March 13, 1989 status report. completion cost in excess of 15% of the original cost as they appearin the Proiect c. 83-3 Water Instrumentation - Eckert Station Original Cost = $300,000 Revised Cost = $420,000 This project was authorized in FY 1983 to replace and/or upgrade the manual boilers feedwater sampling stations. In FY 1984, the project was put on hold for reevaluating the scope based on the impact that the Steam Heat Supply Projects will have on the boiler feedwater. After gaining operational experience with the Steam Heat Supply Project, it was determined that the existing stations need to be replaced with continuous monitoring/sampling stations and additional ones installed. 45 April 25, 1989 Memo to Joseph Pandy, Jr. April 11, 1989 Page 2 project No. 87-106 Water Make-Up Supply - Erickson Station Original Cost = $ 8507000 Rerised Cost = $1,500,000 Status of this project was presented to the Committee of the Whole in January 1989. The increase is due to the addition of storage tanks and upgrade of equipment to handle the deterioration in the water quality from Delta Township. Project No. 88-110 Chemical Unloading/Handling - Dye/Cedar Complex Original Cost = $200,000 Reprised Cost = $450,000 In FY 1987/88 budget the project was authorized for $900,000 based on complete replacement of the system. During FY 1988/89 budget preparation, because of the Water Utility's financial difficulties, $200,000 was allocated to the project. An attempt to reduce the scope while maintaining dust control and operational requirement failed. 46. April 25, 1989 Memo to Joseph Pandy, Jr. April 11, 1989 Page 3 Project No. 87-120 Watertown Township Extension - Water Distribution This project was divided and authorized under Normal and Major Capital Projects as follows: Major Capital Portion $624,000 Normal Capital Portion $685,0(0 Total $1,309,000 Revised Cocrroletion Cost: Major Capital Portion $915,000 Normal Capital Portion $531,000 Total $1,446,000 Even though the major portion completion cost exceeds 15% of the original cost, the total project is still within the guidelines. The overrun in the major capital portion of the project is due to field conditions encountered that extended construction time. 47 April 25, 1,989 Memo to Joseph Pandy, Jr. Page 4 April 11, 1989 Proiect No. 88-113 Deaerator Addition - Moores Park Station original Cost = $ 500,000 Rerised Cost $1,500,000 The existing deaerator (DA) has a capacity to handle the steam load from 3 out of the 4 boilers at the station. Because of the headered design of the plant, any maintenance on the DA requires complete shutdown of all boilers. The original scope of this project was to install an additional DA in parallel with the existing one to allow steam sendout of all boilers capacity as well as maintenance without station shutdown. Detailed Engineering Analysis of the entire system revealed that the existing blowdow-n tank and heaters were inadequate to handle all boilers. A new blowdown tank, heat exchangers and redesign of other existing components was required. With the new equipment and redesign of the e--fisting system, the cycle efficiency was increased. Calculated savings are approximately $200,000/year. 48 April 25, i989 " D(HIBIT B " COST SUMMARY OTTAWA STATION LANSING BOARD OF WATER & LIGHT 80,000KW PRESSURIZED FLUIDIZED BED RETROFIT COST ESTIMATE JANUARY 25, 1989 (1) Within (2) Ottawa (3) Combustor & GT in Ottawa Parking Lot* Parking Lot. ST in Ottawa Station Civil/Structural 18,510 11,125 10,850 Electrical(w/o Gen.) 18,300 22,300 22,500 Mechanical with 79,900 70,300 Installation 74,400 -Combustor -Waste Heat Blr. -Sm. Turbine -Gas Turb./Comp. I & C 4,850 4,850 4,850 Environmental 100 100 100 Miscellaneous 200 (Studies etc. ) 200 200 Sub-Total #1 121,860 108,875 112,900 Design Engineering 10,360 9,255 (8.58 of Sub-total) 9,600 Construction Mgmt. 1,000 1,000 8 man yrs.@ 5OKx2.5 1,000 Startup (20 men x 800 800 4/12 x 50K x 2.5) 800 BWL Eng. Support 1,200 1,200 4 men x 50K x 1.8 x 1,200 3.33 yrs. Sub-Total #2 13,360 12,255 12,600 Sub-Total (01 & #2) 135,220 121,130 125,500 Contingency (254) 33,800 30,300 31,400 TOTAL 169,020 151.430 156,900 2,113 1,893 1,961 Note; All Nos, in Thousands except $/KW *Existing Office, Scr. House, Locker/Rest Room used " EXHIBIT C " 49 April 25, 1989 COST SUMl4ARY MOD CATIONS OTTAWA STATION LANSING BOARD OF WATER & LIGHT 8O.000KW PRESSURIZED FLUIDIZED BED RETROFIT COST ESTIMATE APRIL 7, 1989 (1) Within (2) Ottawa (3) Combustor & CT in Ottawa Parking Loc* Parking Loc. ST in Ottawa Station Original Cost 169,020 151,430 156,900 Summary Using Mechanical $1,961/KW Draft Cooling Tower $2,113/SC� $1,893/ Case I Mechanical Draft Cooling Tower 280 3707 .7 280 1. Add for Extraction Steam Pipe 3,100 3,100 3,100 2. Add for Coal Pile Cover 3;530•.. 0 :..: -.- 3. Add for Elev. & Obs. Platform. Sub-Total 3,380 7,000 3,380 172,400 158,430 160,280 Total Original + Case I $2,155/KW $1,980/KW $2,003/KW Case II Air Cooled Condenser 6,080 4,970 6,080 1. Add for Air Cooled Condenser 0 370 280 28 2. Add for Extraction Steam Pipe 3,280 3,100 3,100 3. Add for Coal Pile COv8lr 0 3,530 0 4. Add for Elev. & Obs. Platform Sub-Total 9,460 11,970 9,460 178,480 163,400 166,360 Total Original + Case II $2,231/KW $2,043/KW $2,080/KW Case III River Water Cooling -2,730 -2,730 1. Deduct Mech. Draft Cooling Tower -2,280 370 280 2. Add for Extraction Steam Pipe 3.100 3,28 3. Add for Coal Pile Cover 0 3,37 0 3,100 0 0 4. Add for Elev. & Obs. Platform Sub-Total 650 4,270 650 169,670 155,700 157,550 Total Original + Case III $2,121/KW $1,946/KW $1,969/KW Note: All Nos. in Thousands except $/KW *Existing Office, Scr. House, Locker/Resc Room used 50 April 25, 1989 Resolution 89-4-9 POLICY PROBATIONARY EMPLOYMENT All new, regular employees shall complete a probationary period of at least six (6) months. The Board of Water and Light ("BWL") may terminate the probationary employee without notice or without cause during the probationary period. The probationary period may be extended at the discretion of the upper level management of the BWL. Probationary employees may not earn seniority or pension service credit. After satisfactory completion of the probationary period, seniority and pension service credit will be granted retroactive to the date of hire. Employees hired on a part-time or temporary basis are not probationary employees. They do not accumulate probationary credit. Temporary employees transferred to regular full time status in the same classification and department shall be granted probationary credit from the temporary status date of hire. Temporary employees transferred to regular, full-time status in different classifications or departments shall begin the probationary period on the date of transfer. After satisfactory completion of the probationary period, seniority and pension service credit will be granted retroactive to the date of hire. This policy is not intended to and shall not be construed as granting any rights and benefits other than herein expressed during the period following probation. 51 April 25, 1989 Resolution 89-4-10 POLICY SETTLEMENT OF EMPLOYMENT CLAIMS That the General Manager be authorized, or in his absence such assistants as he shall designate, to negotiate and settle employment claims of any nature in an amount not to exceed $100,000.00. This authority shall include, but not be limited to, labor relations claims, workers' compensation claims, civil rights claims or litigation involving the above types of claims. Settlement or employment claims which exceed $100,000.00 must receive approval of the Board of Commissioners. 52 April 25, 1989 April 25, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-4-4 That the following Resolution be ap proved: Resolution to Mich- WHEREAS, the City of Lansing by its Board of Water and igan Department of Light, hereinafter referred to as the "GOVERNMENTAL BODY" Transportation to from time to time makes application to the Michigan issue individual Department of Transportation, hereinafter referred to as permit for use of the "DEPARTMENT" for permits, hereinafter referred to as State Trunkline "PERMIT", to construct, operate, use and/or maintain right-of-way utility or other facilities, or to conduct other activities, on, over, and under state trunkline right of way at various locations within and adjacent to its corporate limits. NOW THEREFORE, in consideration of the DEPARTMENT granting such PERMIT the GOVERNMENTAL BODY agrees that: 1 . It will faithfully fulfill all permit requirements and will indemnify, save harmless, represent and defend the State of Michigan, Michigan Transportation Commission, the DEPARTMENT, and all officers, agents, and employees thereof and those governmental bodies performing permit activites for the DEPARTMENT and all officers, agents, and employees thereof, pursuant to a maintenance contract from any and all claims of every kind for injuries to, or death of any and all persons and, for loss of, or damage to property, and environ- mental damage or degradation, and from attorneys fees and related costs arising out of, under, or by reason of the presence of the GOVERNMENTAL BODY'S facilities and/or its installation, construction, operation, maintenance, or other activities which are being per- formed under the terms of the PERMIT on, over, and/or under the State trunkline right of way, except claims resulting from the sole negligence or willful acts or omissions of said DEPARTMENT, its officers, agents, employees, and contracting governmental bodies and officers, agents, and employees thereof, performing permit activities. 53 April 25, 1989 ADMINISTRATIVE (Continued) (Res. No. 89-4-4) 2. The DEPARTMENT shall not be subject to any obligations or liabilities by vendors and contractors of the GOVERNMENTAL BODY, or their subcontractors or any other person not a party to the PERMIT without its specific prior written consent and notwithstanding the issuance of the PERMIT. 3. It will, by its own volition and/or request by the DEPARTMENT, promptly restore and/or correct physical or operating damages to any State trunkline right of way resulting or arising out of the installation, construction, operation, and/or maintenance of the GOVERNMENTAL BODY'S facilities pursuant to a PERMIT issued by the DEPARTMENT. 4. The incorporation by the DEPARTMENT of this Resolution as part of a PERMIT does not preclude the DEPARTMENT requiring additional performance security of insurance when deemed necessary by the DEPARTMENT. 5. This Resolution shall continue in force from the date hereof until cancelled by the GOVERNMENTAL BODY or the DEPARTMENT with no less than thirty (30) days prior written notice to the other party. It will not be cancelled or otherwise terminated by the GOVERN- MENTAL BODY with regard to any PERMIT which has already been issued or activity which has already been undertaken. BE IT FURTHER RESOLVED, that the following position or positions are hereby authorized to make application to the Michigan Department of Transportation for the necessary permit to work within state trunkline rights of way on behalf of the GOVERNMENTAL BODY. Roy Peffley, Electric Utility Director, and/or Richard Bauder; Robert Shumway, Superintendent of Water Distribution, and/or Richard Wagner; Joette Woodard-Yauk, Steam Utility Director, and/or John Hundt. -------------------- This Resolution is required by the Michigan Department of Transportation for purposes of issuing to a governmental body an Individual Permit for Use of State Trunkline Right of Way, form 2205 or an Annual Permit for Miscellaneous Operations within Free Access State Trunkline Right of Way, Form 2205B. -------------------- 54 April 25, 1989 ADMINISTRATIVE SERVICES Res. No. 89-4-5 Approve the purchase of an estimated 12 month requirement of resale and system lamps for the period from May 1 , 1989 Purchase system and through April 30, 1990, from Michigan Brass and Electric resale lamps from Company, Lansing, Michigan, in the amount of $109,440. Michigan Brass and Pricing is firm through April 30, 1990. Electric Company -------------------- The other bidders were Kendall Electric, Inc. ($110,960) , Westinghouse Electric Supply Company ($118,940), All Phase Electric Supply Company ($138,700) , and Graybar Electric Company, Inc. $144,400). -------------------- MARKETING Res. No. 89-4-6 Authorize $20,000 to Market Opinion Research (MOR) to conduct annual update of customer attitude survey. The Authorization for survey is used to determine the perception of residential Market Opinion electric and water customers toward the BWL and its Research to conduct services. annual update of customer attitude survey We have cut approximately $10,000 from the cost of the survey by eliminating 23 questions and reducing the sample size from 600 to 500. MOR says the reduction in sample size will make it difficult to analyze subgroups of customers but will not significantly affect the overall validity of the results. The survey will be conducted the first week of May. -------------------- WATER Res. No. 89-4-7 That the Board of Water and Light and Great Lakes/ Contract with Great Enviroland enter into an extension of Contract No. Lakes/Enviroland 17-513-400-02 (Removal and Marketing of Residual Lime, extended for three Riverside and Dye/Cedar Complex) , for three years plus, year plus through June 30, 1993, in accordance with the provisions of the contract specifications. -------------------- 55 April 25, 1989 WATER (Continued) (Res. No. 89-4-7) The vendor has agreed to reduce the price per ton and price per cycle in the final year of the current contract, and for the three year extension. Estimated annual savings (Option #2 with extension) are $271 ,800 per year. Backup material regarding this resolution is attached. -------------------- Respectful submitted, Joseph Pandy, Jr. General Manager JP/bg 56 April 25, 1989 BY COMMISSIONER MCCOMB-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-Z" RESOLVED, That Resolution 89-4-4 (Administrative)approved General Manager's Recommendations be ap proved. of the Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER JESSOP Res. 89-4r5 RESOLVED, That Resolution 89-4-5 (Administrative Services) of approved the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-+-6 RESOLVED, That Resolutions 89-4-6 (Marketing) of the General approved Manager's Recommendations be ap proved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Res. 89-4-7 RESOLVED, That Resolution 89-4-7 (Water Utility) of the approved General Manager's Recommendations be approved. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: Watertown Township WATERTOWN CHARTER TOWNSHIP. The Watertown Charter Township Board of franchise amendments Trustees has approved an amended electric franchise for the Board of Water and Light on April 24. The following amendments were approved by the township trustees: 1• The length of the franchise was changed from thirty (30) to twenty (20) years. 2. The following language was added to the end of Section 5: "The initial franchise fee payment to the Township shall be made by January 31 of the year following the approval by the Board of a franchise fee, and shall reflect revenue based on retail sales from 30 days after the effective date of the franchise fee through December 31. Thereafter, estimated payments shall be rendered to the Township quarterly, subject to a year-end reconciliation to actual retail sales revenues as of December 31." 57 April 25, 1989 3. Strike everything after the first sentence which ends with the words, "are not exclusive." Insert the following language to the end of the section: "The Board of Water and Light recognizes Watertown Township's right to limit use of its valuable resources through any legal contractual conditions, and Watertown Township recognizes the Board of Water and Light's right to dispose of its waste by-products through any legal means. However, disposal of the BWL's flyash in Watertown Township's existing landfill would only be sought as a last resort, and then only on a temporary basis. In addition, the BWL agrees that for the duration of this franchise, it will not site or file an application for a new landfill permit in Watertown Township." General Manager Pandy requested the Board of Commissioner's pleasure on the amended language. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER EVANS Resolution 89-4-11 Res. 89-4-11 That the Watertown Charter Township franchise be approved as Camassioner approval amended. of Watertown Township franchise as amended Adopted unanimously. Meijer's request for It was reported that Meijer's has requested BWL electricity to serve electric service to their planned distribution center in Watertown Township. The BWL will serve planned distri- seek a written service application from Meijer's. bution center in Watertown Township BWL FLOWABLE BACK-FILL. The Flowable Back-Fill demonstration held on .............................................................................................. April 20, at the Lake Lansing Road ash storage site, was attended y Flowable back-fill more than 50 people, and an overall success. den a success WATER REGIONALIZATION. The following communities have approved a ............................................................................ Status of Water resolution identifying a representative who will participate on their Regionalization behalf in the Water Regionalization Task Force: joint action study Board of Water and Light Delhi Township Delta Township DeWitt Township East Lansing Meridian Township Michigan State University Lansing Township Watertown Township Windsor Township It was mentioned that the City of DeWitt has not yet committed a person to the task force. The City of Mason, not originally included as a participant, has submitted their commitment. To date, pledges for pro rata share of the cost of the study have been committed by the Board of Water and Light and Delhi Township. 58 April 25, 1989 Status of negotiations HOLLAND BOARD OF PUBLIC WORKS. The BWL is negotiating a five-year with Holland Board of agreement with the Holland Board of Public Works for a Supplemental Public Works for supple- Capacity and Energy Service Schedule D to the BWL Coordination mental capacity and Agreement. Their Board has approved the concept at this point. The Energy Service proposed agreement would provide supplemental capacity of $3.50/KW per Schedule D month for capacity, and energy at cost plus 10 percent. Capacity payments over the term of the contract, to commence May 1, 1989, would total approximately $5 million in profit to the BWL. Status of FERC hydro- FERC HYDROELECTRIC LICENSING. Efforts to relicense the Moores Park and electric licensing North Lansing hydro facilities with the Federal Energy Regulatory Commission (FERC) are continuing. An April 19, 1989 memo to General Manager Pandy from Engineering Director John Elashkar regarding the FERC license was handed out. In his memo, Mr. Elashkar reported that studies and/or conditions required to license the two hydro facilities will cost a minimum of approximately $150,000 to a maximum of $740,000, depending on the results of the studies and FERC acceptance of alternate protocol to some of the studies. General Manager Pandy remarked that legislation has been introduced in congress calling for the exclusion of hydros constructed prior to 1935. Staff will be working closely with American Public Power Association staff in support of the legislation. Periodic updates on this issue will be provided to the Board. The Board also requested involvement with congress relative to the pending legislation. Status of Division BWL SAFETY PROGRAM. An update was presented on independent reviews and Joint Safety recently conducted by each Division and the Joint Safety Committee--in Committee reviews of conjunction with department safety committees--on the BWL safety BWL Safety Program program. The review included the following six major areas: 1. BWL Safety Program - incentives, disciplines, reviews, statistics, etc. 2. Procedure and Traffic Control - how we do our work and how we control the environment in which we work. 3. Resources - money, manpower, or machinery needed to do our work safely. 4. Management/Employee Interaction - supervisor and employee roles, work management program, etc. 5. Joint Safety Committee Activities - safety manual, monthly meetings, etc. 6. Safety Attitude - how do we keep safety first in the minds of all employees? A three-page summary of recommendations submitted was circulated to the Commissioners. Visuals were displayed summarizing safety issues and assignments to be discussed in greater depth. Concerted efforts are underway by management and the Joint Safety Committee to put issues addressed into action. General Manager Pandy emphasized the need to individualize safety. He pointed out that safety needs to be designated a priority in the Share the Success (STS) Program. A concept being analyzed is modifying STS (up for renewal in July) by scoring STS on an actual point basis; 59 April 25, 1989 i.e. , if the final total is 403 points, it would equate to a 4.03% lump sum payment--instead of rounding off the total to5_ lump Another option being discussed is creating an incentive whereby a um recognition award would be paid to an employee for successfully completing a fiscal year without a chargeable-type accident. Discussion on need to HEAT RATE. General Manager Pandy reported that heat rate continues to be another major focus in the Share adjust the heat rate the Success Program. Employee goal for heat morale is being affected because they realize that increased sales also increase heat rate. An explanation was presented on the need to adjust the heat rate goal for Fiscal 1988/89, as a result of continued increased sales for resale which impact the heat rate. Mr. Pandy stated that staff is advocating that net heat rate projections next fiscal year should be based on a sliding scale updated monthly to reflect actual sales. This Thewould Commissionersewill more be askedatoeconsider intelligent methodology. 988/89 an adjustment in establishing Concurrentlytethe goals cost/unitssoldlmeasureaforthe May 23 regular meeting. electric will also need to be adjusted. oners received a copy of the April, Share the Success SHARE THE .SUCCESS. The Commissi update 1989 Share the.11 Success Update report. It was noted that a new high o 372 points was attained. eeting n a Committee of the Whole COMMITTEE OF TH 1. E WHO I. LE MEETING. The Commismiotorreview and s will be mdiscuss lthe ......... ... to meet on 5-1�9 to Committee of the Whole on May 1, at 5.30 p. review proposed FY'90 following items: Budget and other 1. Proposed Fiscal 1989/90 Budget financial matters 2. Bond Issue 3. Financial Forecast 4. Major Capital Projects Status Report Discussion RE: electric ELECTRIC VEHICLES. A copy of an article, entitled "Electric Vehicles: vehiclesWhere Are they Headed?" from the April, 1989 issue of ELECTRICAL WORLD was handed out to the Commissioners. The article discusses the move toward commercial manufacturing and marketing of electric vehicles. Significant market penetration is expected by the early 1990's. Mr. Pandy commented that staff may be considering electric vehicles to replace utility vans in the near future. Briefing on Argentina ARGENTINA. Slides on Mr. Pandy's trip to Argentina in March focused on .................... ............l. the avaiability and reliability of electricity. MICHIGAN STATE UNIVERSITY'S ELECTRIC GENERATION. Discussion was held MSU electric generation __.. ............ ......._.. relative to the April 22, 1989 LANSING STATE JOURNAL article on s discussed need for a new boiler-generator unit. The Commissioners suggested that a utility interconnection with MSU staff should continue to be pursued. (Commissioner Evans left the meeting at 6:41 p.m.) 60 April 25, 1989 b C � a 'LS F- F; � r �— O COMMISSIONERS' REMARKS ~ N Comrnnts RE: Chairman Hassler noted that past due accounts receivable dropped .1:5 ct Accounts Receivable $164,433 from February to March. This represents a significant improvement over previous months. �.o rr W (p BY COMMISSIONER WILLIAMS-- r r• SECONDED BY COMMISSIONER BELEN r Fxcused Absence That the absence of Commissioner Sebolt be excused. Adopted unanimously. Adjournment On motion of Commissioner Strolle the Board adjourned at 6:52 � P.m. Mary Sova, Secretary Filed: April 28, 1989 Rita M. Bauman, City Clerk 61 Mpy 22, 1989 Office, Board of Water and Light Tuesday, May 22, 1989 Lansing, Michigan The Board of Commissioners met in rescheduled regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: commissioners Belen, Evans, Jessop, Hassler, Strolle, and Williams -6 Absent: Commissioners McComb and Sebolt -2 Quorum The Secretary declared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) NOTICE RESCHEDULED REGULAR MEETING Notice of Rescheduled The regular meeting of the Board of Water and Light Commissioners of the Meeting City of Lansing, Michigan, scheduled to be held at 5:30 p.m. on Tuesday, May 23, 1989 in the Board Room on the Second Floor of the Board of Water and Light Main Office Building, 123 West Ottawa Street, Lansing, Michigan has been rescheduled for Monday, May 22, 1989 at 5:30 p.m. in the aforesaid room. Posted: May 2, 1989 Certified by: BOARD OF WATER AND LIGHT Mary E. Sova, Secretary Telephone 371-6033 Invocation The Invocation was given by Chairman Hassler. Pledge The Pledge of Allegiance was said by all present. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN That minutes of regular session of April 25, 1989 be approved as mailed. Adopted unanimously. Public Ca►mmnts 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. Hearing Appeal RE: George V. Warren, Attorney, UAW-GM Legal Services Plan, appeared before Disputed Water Bill the Board to appeal the Independent Hearing Officer's decision on behalf for Elaine Hill of his client, Mrs. Elaine Hill of 3227 Jerree, Lansing, concerning her disputed water billing. 62 „ May 22, 1989 Mr. Warren stated that it is his contention that the bill appears to be erroneous. He argued that the meter test revealed an error rate which exceeded the industry standards of 98.5% for normal flow, thus the normal error rate should be no more than 1.5%. He reported that this particular meter was found to be 2.5% off by the BWL. Following debate, it was the consensus of the Board, that an independent check would be conducted by an outside source to verify whether the meter was defective during the period being disputed. This matter was tabled pending reverification on the accuracy of the meter. COMMITTEE OF THE WHOLE REPORT May 22, 1989 Committee of the Whole Board of Commissioners Report RE: 1. Proposed Board of Water and Light Fiscal 1989/90 Budget, Lansing, Michigan 2. Revenue Bond Issue, 3. Financial Forecast, The Committee of the Whole met on May 1, 1989 with the General Manager 4. Major Capital Pro- and staff to review the following items: jects Status Report 1. Proposed Fiscal 1989/90 Budget 2. Revenue Bond Issue 3. Financial Forecast 4. Major Capital Projects Status Report Present were Commissioners Belen, Evans, Jessop, Hassler, McComb, Sebolt, Strolle, and Williams. Following review and discussion, the Committee of the Whole adopted the following motions and recommends Board approval: Resolution 89-5-1 .............................. .................................. FISCAL 1989-90 BUDGET .................................................I.............. Res. 89-5-1 That the annual Budget covering Fiscal Year 1989-90, which Fiscal 1989-90 Budget includes the proposed bond issue, be approved as presented (see Attachment A) . Further, that the Capital Projects in Exhibit 3 of the budget be authorized in the amount of the project estimate. Capital expenditures for Fiscal 1989-90 are limited to the amount included in the budget. May 22; 1989 63 Resolution 89-5-2 .................._................................................................ PREPARATIONS TO ISSUE REVENUE BONDS ... .... Res, 89-5-2 RESOLVED, That staff begin preparations to issue approximately Preparations to Issue $16 million in bonds in the third or fourth quarter of 1989. Revenue Bonds These bonds will be used to finance the projects listed in Attachment B. FURTHER RESOLVED, that staff prepare a resolution authorizing a bond issue in accordance with the Revenue Bond Issuance Policy adopted by the Commissioners January 9, 1979. RESOLVED FURTHER, That the General Manager be authorized to retain Bond Counsel and a Financial Advisor to assist in the preparations for issuance. RESOLVED FURTHER, That mini bonds in denominations of $500 or more, be included in the structure of the issue for sale to employees and customers. Resolution 89-5-3 ...... ._...._..._................................................... CAPITAL PROJECTS OVERRUN Res. 89-5_3 RESOLVED, That the following Capital Projects, which have Capital Projects Overrun exceeded estimated cost amounts by 15 percent or $200,000, whichever is less, be approved as reported (see Attachment C) : Project # Original Revised 89-121 - Steam Reliability Intertie $400,000 659,000 Steam Transmission/Distribution 88-013 - Radio Communication Upgrade 300,000 370,000 Common Facilities Projected Revenue Requirements. It is further reported that Financial .. ........_....................................._.. Planning Director Dana Tousl 1.ey presented the results of his annual study to review long term revenue requirements for the Electric, Water and Steam Utilities. The assumptions of the study and recommendations made as a result of the study will form the foundation of the BWL's financial strategy for- the next Business Plan. Respectfully submitted, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN That the Committee of the Whole Report, including Resolutions 89-5-1, 89-5-2 and 89-5-3 be approved as presented. Adopted unanimously. 64 7 cq May 21, 40%D OF WATER AND LIGHT-LANSING MICHIGAN ATTACHMENT A 2 BUDGET-FISCAL YEAR ENDING JUNE 30, 1990 3 4 WATER ELECTRIC STEAM TOTAL 5 PROJECTED INCOME STATEMENT FY 90 6 =------------------------------- ----------------- 7 OPERATING REVENUE [1] $12,420,921 $127,401,068 $10,892,279 $150,714,268 8 9 Operation/Maint Expense $10,726.338 S103,569,010 $9,313,043 $123,608,391L 10 Depreciation Expense 11 13,980,000 12 TOTAL OPERATING EXPENSE $1- - 13 7,588, 91 14 OPERATING INCOME ,3,125 877 $1125, 15 Other Income [2] 16 Other Expense [3] 81300 17 ,, 0 877 18 NET INCOME 19 $18,287,687 20 Rate of Return(3/89 Rate Base)21 6.71% 22 PROJECTED CASH FLOW FY 90 23 =------------------------- 24 Restricted Operating Cash [4] $14,720,400 25 Restricted General Cash [5] 23,280,000 26 Restricted Bond Reserve [6] 7,973,000 27 Available General Cash 11900,000 28 Available Spec. Proj Cash 29 21,400,000 30 BEGINNING CASH 7-1-89 ----------- 31 32 Sources of Cash 33 Net Income $18,287,687 34 Depreciation 13,980,000 35 Bond Proceeds 15,663,000 36 Deferred Expense Amortization[7] 598,176 37 38 TOTAL SOURCES OF CASH ---------- 39 40 SOURCES OF CASH PLUS ------------ 41 BEGINNING FUND BALANCES 42 $117,802,263 43 Uses of Cash 44 Debt Principal [8] $2,111,523 45 Normal Capital Expenditures [9] 12,730,000 46 Major Capital Expenditures [10] 21,243,000 47 Return on City Equity 48 4,742,989 49 TOTAL USES OF CASH 50 $40,827,512 51 Restricted Operating Cash $15,863,183 52 Restricted General Cash 25,087,287 53 Restricted Bond Reserve 8,591,964 54 General Cash Balance 4,521,428 55 Special Proj Balance 56 22,910,889 57 ENDING CASH 6-30-90 ----------- May 22, 1989 65 BOARD OF WATER AND LIGHT-BUDGET FOOTNOTES-FISCAL YEAR ENDING JUNE 30, 1990 (1] Revenue based on sales forecast for water (9,312,000 CCF) , Electric (2,703,000 MWH) and Steam (1,574,600 MLB) . These sales levels are 2.8% lower, 3.6% higher, and 3.0% higher respectively than the twelve month period ended March 1989. Water revenues include an overall 3% increase in rates effective November 1989. [2] Other Income includes earnings on short term securities purchased plus Sewerage Collection Fees and Income from Merchandising. [3) Other Expense includes interest of $100,000 on the 1973 Revenue Bond Issue, $104,000 on the 1976 Revenue Bond Issue, $171,666 on the Pension Fund Debt, $12,777 on the land contract for the Lake Lansing Road Site, $17,780 on the Michigan Ash Bldg at Erickson, $162,467 interest on Steam Debt to Electric-offset by interest income in Electric, and $82,500 interest on customer deposits. [4] Projected June 30, 1989 Restricted Operating Cash balances Operations and Maintenance Fund $13,000,000 Depreciation, Extension & Improvement Fund 1,500,000 Bond and Interest Fund 220,400 Total Restricted Operating Cash $14,720,400 (5] Projected June 30, 1989 Restricted General Cash balances Belle River Contract $12,460,000 Coal Buildup 3,790,000 Uninsured Losses 7,030,000 Total Restricted General Cash $23,280,000 (6] Projected June 30, 1989 Restricted Bond Reserve and Redemption balances Bond Reserve $5,412,000 1973 Redemption 1,273,000 1976 Redemption 1,288,000 Total Restricted Bond Reserve and Redemption $7,973,000 [7] Five year amortization of deferred expenses for Eckert turbine #1 reblade and Erickson turbine reblade and overhaul. [8] Debt repayment includes principal payments of $1,000,000 for the 1973 Revenue Bond Issue, $1,000,000 for the 1976 Revenue Bond Issue, $70,834 for the Pension Fund Debt, $27,224 for the Lake Lansing Road site, and 13,465 for the Michigan Ash bldg at Erickson. Steam Utility debt repayment includes $80,203 to repay the loan from the Electric Utility for construction of the Steam Main. Electric Utility debt repayment is reduced by the same amount. [9] Normal Capital expenditures represent total amounts to be spent from cash flow for all Distribution projects, and Production, Transmission and Common projects less than $100,000, during Fiscal Year 1990. (10] Major Capital expenditures represent total amounts to be spent from cash flow for Production, Transmission and Common projects greater than $100,000, during Fiscal Year 1990. N N BOARD OF WATER 6 LIGHT - LANSING, MICHIGAN BUDGET FOR FISCAL YEAR ENDING JUNE 30, 1990 DIVISION SUMMARY - OPERATIONS & MAINTENANCE EXPENSE Restated for Budget Comparison ---------------------------------------------------------- Vehicle & Material Production Outside Expenses Net Equipment & Fuels/Chem. Services to be Labor /1/ Charges Supplies Purch Power 6 Other /2/ Total Water Electric Steam Distributed Total - -------- ----------- ------- ----- ----- -------- ----- ----------- ----- ADMINISTRATIVE $660,004 $0 $44,820 $0 $17,272,872 $17,977,696 $152,266 $1,420,257 $34,782 $16,370,391 $17,977,696 ELECTRIC UTILITY 18,008,439 663,827 3,299,321 62,071,378 4,318,144 88,361,109 0 80,055,984 7,429,386 875,739 88,361,109 WATER UTILITY 3,216,216 193,420 350,980 2,056,620 1,297,797 7,115,033 7,115,033 0 0 0 7,115,033 STEAM UTILITY 378,272 15,200 75,055 4,608 577,541 1,050,676 0 0 1,050,676 0 1,050,676 ENGINEERING 1,612,065 37,990 192,390 0 444,936 2,287,381 5,400 0 0 2,281,981 2,287,381 HUMAN RESOURCES 742,018 1,458 38,640 0 443,635 1,225,751 0 35,958 0 1,189,793 1,225,751 ENGINEERING PLANNING 560,582 0 16,980 0 157,684 735,216 114,416 396,967 27,596 196,267 735,246 COMMUNICATION AND MARKETING 400,926 243 88,655 0 282,996 772,820 20,210 47,976 2,500 702,134 772,820 TREASURER/CONTR05LER 842,976 0 11,800 0 90,433 945,209 0 20,000 0 925,209 945,209 ADMINISTRATIVE SERVICES 1,925,743 64,985 553,136 0 722,537 3,266,401 0 0 0 3,266,401 3,266,401 CONSUMER SERVICES 3,140,686 40,230 275,948 0 964,469 4,421,333 401,207 894,108 0 3,126,018 1,421,333 INFORMATION SYSTEMS 1,442,088 180 200,300 0 809,035 2,451,603 0 0 0 2,451,603 2,451,603 GRAND TOTAL $32,930,015 $1,017,533 $5,148,025 $64,132,606 $27,382,079 $130,610,258 $7,808,532 $82,871,250 $8,544,940 $31,385,536 $130,610,258 Distributed Expenses: Spread to Water, Electric, & Steam /3/ 2,917,806 20,697,760 768,103 -24,383,669 0 Vehicle and Equipment Charges /4/ -1,017,533 -1,017,533 Indirect Costs Spread to Capital Budget /5/ -5,984,334 -5,984,334 05-04-89 NET BUDGET BY UTILITY $10,726,338 $103,569,010 $9,313,043 $0 $123,608,391 - May 22, 1989 67 BOARD OF WATER AND LIGHT-DIVISION SUMMARY FOOTNOTES-FISCAL YEAR ENDING JUNE 30, 1990 [1] Net Labor refers to the dollar amount of labor charged to operations and maintenance expense accounts. [2] Outside Services and Other includes such items as insurance, pension funding, FICA, service engineers, maintenance contractors, consultants, utilities, travel/conference, dues/subscriptions. [3] Administrative, general, and engineering expenses which are allocated to the Water, Electric, and Steam Utilities based on such factors as manpower, labor charges, fuel costs, and meters in service. [4] The cost of owning and operating vehicles is included in RA 525 and in the grand total charges. 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. 68 May 22, 1989 ATTACHMENT B PROPOSED BOND PROJECTS AND FINANCING METHOD PROJECT PROJECT EXPENDED BALANCE DESCRIPTION ($000) NUMBER ESTIMATE TO 6-89 7-89 Eckert Dam Repair/Monitoring 85-1 2,400 11080 1,320 Eckert House Water Service 86-3 1,500 250 1,250 Eckert Wastewater Treat Plant 90-103 808 0 808 Erickson Make-up Water Supply 87-106 1,500 500 11000 Erickson Replace Breeching 90-107 900 0 900 Northeast Substation 85-16 4,130 50 4,080 East Lansing Dist. Upgrade 90-114 550 0 550 Enterprise Substation 90-112 1,720 0 1,720 -------- -------- -------- ELECTRIC UTILITY TOTAL 74.24% $13,508 $1,880 $11,628 Dye Filter Control Mod. 88-109 900 100 800 Dye Exterior Renovation 90-115 315 0 315 Wise Control Mod. 90-117 417 0 417 Well Field Remote Control 89-110 900 50 850 Remote Meter Program [1] 87-33 3,755 2,352 1,403 Delhi High Lift Booster Pump 89-123 800 550 250 WATER UTILITY TOTAL 25.76% $7,087 $3,052 $4,035 GRAND TOTAL 100.00% $20,595 $4,932 $15,663 [1] Program extends thru Fiscal 1994, but bond issue is only for FY 90, 91, 92 charges. PROBABLE TERMS SOURCES OF FUNDS PROJECTS 15,663,000 COUPON 7.50% PAR AMOUNT OF BONDS 15,902,000 TERM 15 +PREMIUM /-DISCOUNT 0 COSTS 1.5% 238,530 ---------- 15,902,000 USES OF FUNDS PROJECT COSTS (DETAIL ABOVE) 15,663,000 COST OF ISSUANCE 238,530 CONTINGENCY 470 15,902,000 nreA/hn,i not/h ti rioof 011 May 22,• 1989 69 Memo to Joseph Pandy Jr. ATTACHMENT C Page 5 April 11, 1989 Project No. 89-121 Steam Reliability Intertie - Steam Transmission and Distribution Original Cost = $400,000 Revised Cost = $659,000 Status of this project was addressed in Joette Woodard-Yauk's memo of December 9, 1988 that was given the Commissioners during their meeting of December 20, 1988 (copy attached). Project No. 88-13 Radio Communication Upgrade - Common Facilities Original Cost = $300,000 Revised Cost = $370,000 The increase in cost of this project is due to additional equipment required to make the system reliable and adaptable for future expansion to accommodate other governmental agencies. Attachment 70 May 22, 1989 May 22, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-5-4 That a Safety Bonus of one percent (1%) of base pay be established for Fiscal Year 1989-90, to be awarded to Safety Bonus Award individual employees whose safety performance merits same. to be established -------------------- The General Manager will establish procedures and criteria for award of the safety bonus, with recommendations from the Joint Safety Committee. -------------------- Res. No. 89-5-5 That the FY 1989 Share the Success Plan performance measures goal for Heat Rate be increased from 10,732 BTU/ Share The Success Heat kWh to 10,778 BTU/kWh, and the Electric Cost Per Unit Sold Rate Measure Increased goal be decreased from 15.2 mills/kWh to 14.9 mills/kWh. The following ranges and point allocations should be assigned: Heat Rate (BTU/kWh: 10,827 10,827-10,803 10,802-10,778 < 10,778 0 points 24 points 36 points 48 points Cost Per Unit Sold (mills/Kwh: 15.5 15.5 - 15.2 15. 1 - 14.9 < 14.9 0 points 16 points 24 points 32 points -------------------- Total MWh is a vital component in projected system net heat rate. The ten ( 10) month actual 2,319,789 MWh vs. our projected 2, 185,454 MWh negatively impacts system Heat Rate by 46 BTU/kWh, while positively impacting cost per unit sold by .3 mills/kWh. (See attached backup information) -------------------- May 22; 1989 71 ADMINISTRATIVE SERVICES Res. No. 89-5-6 Administrative Services Division, in accordance with prior Board approval, sold the following BWL vehicles at the BWL Vehicles sold at State of Michigan Public Auction of Motor Vehicles on State of Michigan April 15, 1989. Public Auction Vehicle Sale Number Description Price 19 1980 Dodge Pickup, Model D150, V-8 $ 1,700 32 1984 Dodge Pickup, Model D150, V-8 6 1/2' box 2,400 48 1984 Chevrolet Van, Model CG21005, V-8 2,700 108 1981 Chevrolet Pickup, V-8, 8' box 2,400 127 1984 Chevrolet Van, Model CG21005, V-8 2, 100 128 1979 Dodge Pickup, Model W200, 4 wheel drive with plow 3,000 131 1979 GMC Pickup, Model TC31305, 4 wheel drive, V-8 2,000 134 1979 Dodge Van, Model B-100 200 144 1982 Chevrolet Pickup, Model CC10903, V-8, 8' box 2,000 316 1983 Olds Omega B-37 Coupe, V-6 1 ,500 319 1984 Olds Omega Coupe, V-6 1 ,000 $21 ,000 Less 5.6% Auction Fee: -1 ,176 Net Sale Price: $19,824 -------------------- Bids for the new vehicles to replace the above listed vehicles were taken with and without trade-in allowance. The total trade-in allowance for the above vehicles was $2,100, thus the BWL netted an additional $18,900 by selling at auction. -------------------- Res. No. 89-5-7 Authorize purchase of the estimated 12 month requirement of free renewal lamps (approx. 359,400 lamps) covering the Purchase of free period from June 1 , 1989 through May 31 , 1990, from West- renewal lamps inghouse Electric Supply Co. , Lansing, Michigan, in the amount of $105,530. Pricing is firm through May 31 , 1990. All material to be released as required. -------------------- The other bidder was G.T.E. Sylvania Lighting-Industrial ($116, 160) . General Electric Co. , Westinghouse Electric Corp. and General Electric Supply Co. were invited to bid but declined. -------------------- 72 May 22, 1989 ADMINISTRATIVE SERVICES (Continued) Res. No. 89-5-8 Authorize purchase of the estimated 12 month requirement of Hydrofluosilicic Acid for Dye and Wise Road Water Condi- Purrhase of Hydro- tioning plants from Carrier-Stephens Co. for $196.00 per fluosilicic Acid for ton. Estimated 12 month quantity is 150 tons, for an Dye and Wise Road estimated cost of $29,400. Pricing is firm through May 31 , Water Conditioning 1990. All material to be released as required over the 12 Plants month period. -------------------- The other bidders were Spencer Chemical ($29,672) , L.C.I. Limited ($31 ,895) , and Shrieve Chemical Co. ($34,950) . Cardinal Chemical Co. declined to bid. General Alum & Chemical Corp. was invited to bid but did not reply. -------------------- Res. No. 89-5-9 Authorize purchase of the estimated 12 month requirement of Pebble Quicklime for Dye and Wise Road Water Conditioning Purchase of Pebble plants from Marblehead Lime Co. for $53.36 per ton. Quicklime for Dye and Estimated 12 month quantity is 10,672 tons, for an Wise Road Water estimated cost of $569,457.92. Pricing is firm through Conditioning Plants May 31 , 1990. All material to be released as required over the 12 month period. The other bidders were Detroit Lime Co. ($624,845) and BeachviLime Limited ($764,862). -------------------- Res. No. 89-5-10 Authorize purchase of the estimated 12 month requirement of Soda Ash for Dye and Wise Road Water Conditioning plants Purchase of Soda Ash from Stauffer Chemical Co. for $156.80 per ton. Estimated for Dye and Wise Road 12 month quantity is 2,350 tons, for an estimated cost of Water Conditioning $368,480. Pricing is firm through May 31 , 1990. All Plants material to be released as required over the 12 month period. -------------------- The other bidder was PVS Nol/Wood Chemicals ($373,650) . General Chemical Corp. , Alexander Chemical Corp. , and FMC Corporation declined to bid. -------------------- %y 72, 1989 73 ADMINISTRATIVE SERVICES (Continued) Res. No. 89-5-11 Authorize purchase of the estimated 12 month requirement of Granulated Salt for Moores Park Steam Plant from AKZO Purchase of Granulated Salt, Inc. for $59.75 per ton. Estimated 12 month quantity Salt for Moores Park is 320 tons, for an estimated cost of $19, 120. Pricing is Stearn Plant firm through May 31 , 1990. All material to be released as required over the 12 month period. -------------------- The other bidders were Morton Thiokol, Inc. ($19,584) and American Salt Co. ($25,472). -------------------- Res. No. 89-5-12 Authorize purchase of the estimated 12 month requirement of Sulfuric Acid for Eckert and Erickson Stations from CIL Purchase of Sulfuric Corp. of America for $61 .50 per ton. Estimated 12 month Acid for Eckert and quantity is 528 tons, for an estimated amount of $32,472. Erickson Stations Pricing is firm thruuyli May 31 , 1990. All material to be released as required over the 12 month period. -------------------- The other bidders were General Alum & Chemical Corp. ($39,758) , Carrier-Stephens Co. ($41 , 184). Cardinal Chemical Corp. M&H Chemical, Inc. , and Haviland Products Co. declined to bid. -------------------- Res. No. 89-5-13 Authorize purchase of the estimated 12 month requirement of Caustic Soda for Eckert and Erickson Stations from the Old Purchase of Caustic World Trading Co. for $387.00/dry ton. Estimated 12 month Soda for Eckert and quantity is 145.6 dry tons, for an estimated amount of Erickson Stations $56,347.20. All material to be released as required over the 12 month period. -------------------- The other bidders were M&H Chemical, Inc. ($60,569) , K. A. Steel Chemicals, Inc. ($63, 190) , Cardinal Chemical Corp. ($65,520) and Haviland Products Co. ($66,539) . Carrier- Stephens Co. , Jones Chemicals, Inc. , and Pioneer Chlorine Alkali Co. declined to bid. -------------------- 74 May 22, 1989 ADMINISTRATIVE SERVICES (Continued) Res. No. 89-5-14 Authorize purchase of the estimated 12 month requirement of Liquid Chlorine for water treatment plants from Carrier- Purchase of Liquid Stephens Co. for $450.00/1-ton cylinder and $65.25/150-lb. Chlorine for water cylinder. Estimated 12 month quantity is 97 1-ton and 27 treatment plants 150-1b. cylinders, for an estimated amount of $45,411.75. Pricing is firm through May 31 , 1990. All material to be released as required over the 12 month period. -------------------- The other bidders were Cardinal Chemical Corp. ($45,877) and Jones Chemical Corp. ($50,525). PVS-Nol/Wood Chemical, Inc. and Pioneer Chloride Alkali Co. declined to bid. -------------------- Res. No. 89-5-15 Authorize purchase of the estimated 12 month requirement of Sodium Hypochlorite for Eckert Station from M&H Chemical Purchase of Sodium Co. for $.455/gallon. Estimated 12 month quantity is Hprochlorite for 25,000 gallons, for an estimated amount of $1 1 ,375. All Eckert Station material to be released as required over the 12 month period. -------------------- The other bidders were Haviland Products Co. ($12,750) , High-Po-Chlor ($14,750) , Jones Chemicals, Inc. ($15,000), K. A. Steel Chemicals, Inc. ($16,250) , and Carrier-Stephens Co. ($17,000). -------------------- Res. No. 89-5-16 Authorize purchase of the estimated 12 month requirement of Molten Sulfur for the Erickson Station flue gas condition- Purchase of Molten ing system from Marathon Petroleum Co. for $131 .25/long Sulfur for Erickson ton. Estimated 12 month quantity is 157 long tons, for an Station estimated amount of $20,606.25. Pricing is firm through May 31 , 1990. All material to be released as required over the 12 month period. -------------------- Bay Chemical Co. , Shell Oil Co. , CIL Corp. of America, PVS Nol/Wood, and Olin Chemicals declined to bid. Ashland Chemical, Malinckrodt, Inc. , and Texas Gulf Chemicals Co. did not respond. -------------------- May 22, 1989 75 ADMINISTRATIVE SERVICES (Continued) Res. No. 89-5-17 Authorize purchase of the estimated 12 month requirement of Single-phase Watthour Meters from Eagle Engineering & Purchase of Single- Supply Co. for $25.84 per meter. Estimated 12 month phase Watthour Meters quantity is 6,912 meters, for an estimated amount of $178,606.08. Pricing is firm through May 31 , 1990. All material to be released as required over the 12 month period. -------------------- The other bidders were Westinghouse Electric Supply Co. ($183,444) , Instrument Specialties, Inc. ($184,343) , General Electric Co. ($184,826) , and Reed City Power Line Supply ($198,374) . -------------------- CONSUMER SERVICE Res. No. 89-5-18 That the BWL Rules and Regulations for Water Service, Sheet 7.00, Item 3, Billing, be amended as per the Rules and Regulations attached. Deletions are shown with a strike-thEeagk for Water Service, and additions are shown in ALL CAPS. Sheet 7.00, Item 3 Billing,i ng, attended -------------------- This request is in response to customer input indicating the unfairness of our changing a zero consumption charge of $4. 15 per month on a single water service with a separate sprinkling meter. Our water rules have been written to collect a customer charge for every meter in service. This proposed change will exclude the customer charge on lawn sprinkling meters. The water consumption recorded on the separate sprinkling meter will be billed at the appropriate water commodity charge excluding sewerage. We recommend this change be made effective June 20, 1988, the same date the commissioners approved the installation of the separate water meters for lawn sprinkling service Rule 8.03.09). -------------------- 76 May 22, 1989 ELECTRIC Res. No. 89-5-19 It is recommended that the General Manager be authorized to enter into a Supplemental Agreement No. 1 to the SupplEmental Agreement Coordination Agreement between Lansing Board of Water and No. 1 to the Coordi- Light and the City of Holland, Michigan. As a part of this nation Agreement Agreement, Service Schedule D will provide for supplemental between Lansing Board firm capacity and energy, and seasonal capacity reserva- of Water and Light and tions from May 1 , 1989 through April 30, 1994. the City of Holland, Michigan -------------------- The BWL will provide Holland supplemental firm capacity ranging from 11 to 41 MW plus reserves, at compensation of $3.50 per KW per month for firm capacity. Energy will be provided at incremental cost plus 10%. -------------------- Res. No. 89-5-20 That the Board agree the attached Rule IX of the Rules and Regulations for Electric Service be adopted and made Rule IX of the Rules effective as of June: 1 , 1989. and Regulations for Electric Service -------------------- adopted The existing Rule IX has been in effect since May 27, 1986 and is being revised to focus on customer service and improve our ability to be competitive in the fringe areas. The proposed rule change has been completely rewritten for clarity. New language is in ALL CAPITAL LETTERS and deleted language is 1}Red-ex1 . Headings are referenced to existing sheet numbers. -------------------- HUMAN RESOURCES Res. No. 89-5-21 That Mr. Carlie M. Scott, maintenance mechanic for Produc- tion Maintenance, be awarded $196.52 for suggestion Suggestion Award to (1989-88) , for suggesting installation of an inspection Carlie M. Scott hole into the speed reducing gear box to inspect gears for premature wear. This preventative maintenance measure should cut down on repairs for gear failures. -------------------- By using this suggestion, it is estimated that the BWL will save $1 ,215.20 the first year. -------------------- May 22, 1989 77 HUMAN RESOURCES (Continued) Res. No. 89-5-22 That Ms. Marilyn Palmer, Clerk in General Accounting, be awarded $156.25 for suggestion ( 1988-90) , for suggesting a Suggestion Award to more efficient way to tag and record new office equipment Marilyn Palmer and furniture when it is received at the warehouse, thus saving about 56 hours a year. -------------------- By using this suggestion, it is estimated that the BWL will save $812.53 the first year. -------------------- PENSION Res. No. 89-5-23 That Kenneth L. Maier, Mechanical Benchboard Operator at Eckert Station, be placed on an early reduced vested Pension approved for pension of $105.34 per month effective April 1, 1989. He Kenneth L. Maier has selected a straight pension. Mr. Maier worked for the BWL for 15.32 years acid is 59 years of age. -------------------- WATER Res. No. 89-5-24 Approve a change to the Conditioned City Water Hardness Control band from the current 85 + 5 parts per million to Change to the Con- 80 to 100 parts per million. ditioned City Water Hardness Control -------------------- Bend This change will result in an estimated annual savings for water treatment chemicals of $40,000 - $45,000, and in sludge processing costs of $10,000. There will also be a reduction in conditioned water sodium levels during summer loads by as much as 10 - 15 parts per million. Water customers will not perceive a change in water taste or quality as a result of this revised control band, except for high volume industrial customers using Zeolite Water Softeners, where a minor increase in regeneration require- ments will occur. -------------------- 78 May 22, 1989 WATER (Continued) Res. No. 89-5-25 That the Board agree to serve water to proposed Water District No. 54 Delhi Township, as requested by resolu- Approval of Delhi tion of the Delhi Charter Township Board on April 18, 1989 Township Water District and that in accordance with the agreement between the Board No. 54 - Willoughby and the Charter Township of Delhi dated August 15, 1972, Woods Subdivision, covering the furnishing of a potable water supply in Phase I, Ints 1-23 Delhi Township, the Board advises officials of Delhi Township as follows: 1 . The Board will accept Water District No. 54 estab- lished by Township resolution on April 18, 1989 and will provide a potable water supply to said district. 2. The Township will be required to make a $31 , 120 non- refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations for Water Service for installing the necessary distribution facilities to serve said district. 3. The Board and LIte Township are to enter into a written agreement (Supplement LIV) covering the furnishing of a potable water supply in Water District No. 54. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $31 , 120 from the Township, the project be approved for installation, and the General Manager and Secretary be authorized to sign the aforementioned agreement (Supplement LIV) to furnish a potable water supply in Water District No. 54. The geographical area of Water District No. 54 is as follows: Willoughby Woods Subdivision Phase I Lots 1 thru 23 To provide a potable water supply within the proposed new district requires the installation of 1500 feet of water main at an estimated cost of $27,750 and two (2) fire hydrants at a cost of $3,370. The main extension will serve 23 residential customers. One-time connection fees will amount to $9,177. Estimated annual revenue is $4,495. -------------------- Water mains to be installed in Summer of 1989 following receipt of the Township's non-refundable contribution-in- aid of construction and the signing of the agreement. -------------------- May 22, 1989 79 WATER (Continued) Res. No. 89-5-26 That the Board agree to serve water to proposed Water District No. 55 Delhi Township, as requested by resolu- Approval of Delhi tion of the Delhi Charter Township Board on April 18, 1989 Township Water and that in accordance with the agreement between the Board District No. 55 - and the Charter Township of Delhi dated August 15, 1972, College Heights covering the furnishing of a potable water supply in Delhi Phase H Subdivision, Township, the Board advises officials of Delhi Township as Lots 21-50 follows: 1 . The Board will accept Water District No. 55 estab- lished by Township resolution on April 18, 1989 and will provide a potable water supply to said district. 2. The Township will be required to make a $47,255 non- refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LV) covering the furnishing of a potable water supply in Water District No. 55. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $47,255 from the Township, the project be approved for installation, and the General Manager and Secretary be authorized to sign the aforementioned agreement (Supplement LV) to furnish a potable water supply in Water District No. 55. The geographical area of Water District No. 55 is as follows: College Heights Phase II Subdivision Lots 21 thru 50 To provide a potable water supply within the proposed new district requires the installation of 2190 feet of water main at an estimated cost of $40,515 and four (4) fire hydrants at a cost of $6,740. The main extension will serve 30 residential customers. One-time connection fees will amount to $11 ,970. Estimated annual revenue is $5,865. -------------------- Water mains to be installed in Summer of 1989 following receipt of the Township's non-refundable contribution-in- aid of construction and the signing of the agreement. -------------------- 80 Icy 22, 1989 WATER (Continued) Res. No. 89-5-27 That the Board agree to serve water to proposed Water District No. 56, Delhi Township, as requested by resolu- Approval of Delhi tion of the Delhi Charter Township Board on April 18, 1989 Township Water District and that in accordance with the agreement between the No. 56 - Holbrook Hills Board and the Charter Township of Delhi dated August 15, Phase II Subdivision, 1972, covering the furnishing of a potable water supply in Lots 48-78 Delhi Township, the Board advises officials of Delhi Township as follows: 1 . The Board will accept Water District No. 56 estab- lished by Township resolution on April 18, 1989, and will provide a potable water supply to said district. 2. The Township will be required to make a $33,822.50 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LVI) covering the furnishing of a potable water supply in Water District No. 56. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $33,822.50 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LVI) to furnish a potable water supply in Water District No. 56. The geographical area of Water District No. 56 is as follows: Holbrook Hills Phase II Subdivision Lots 48 thru 78 To provide a potable water supply within the proposed new district requires the installation of 1 ,555 feet of water main at an estimated cost of $28,767.50 and three (3) fire hydrants at a cost of $5,055. The main extension will serve 31 residential customers. One-time connection fees will amount to $12,369. Estimated annual revenue is $6,060. -------------------- Water mains to be installed in Summer of 1989 following the receipt of the Township's non-refundable contribution- in-aid of construction and the signing of the agreement. -------------------- May 22, 1989 81 WATER (Continued) Res. No. 89-5-28 That the Board agree to serve water to proposed Water District No. 57, Delhi Township, as requested by resolu- Approval of Delhi tion of the Delhi Charter Township Board on April 18, 1989 Township Water District and that in accordance with the agreement between the Board No. 57 - Pinetree Road and the Charter Township of Delhi dated August 15, 1972, to River Pointe Subdivi- covering the furnishing of a potable water supply in Delhi sion Township, the Board advised officials of Delhi Township as follows: 1. The Board will accept Water District No. 57 estab- lished by Township resolution on April 18, 1989, and will provide a potable water supply to said district. 2. The Township will be required to make a $120,837.10 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LVII) covering the furnishing of a potable water supply in Water District No. 57. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $120,837. 10 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LVII) to furnish a potable water supply in Water District No. 57. The geographical area of Water District No. 57 is as follows: Beginning at the south end of Water District 48 thence south 820 feet along Pinetree Road, thence easterly 1470 feet to River Pointe Sub, then River Pointe Sub Phase I, Lots 1 thru 43. To provide a potable water supply within the proposed new district requires the installation of 5,725 feet of water main at an estimated cost of $115,602. 10 and seven (7) fire hydrants at a cost of $11 ,795. The main extension will serve 43 residential customers. One-time connection fees and meter set charges will amount to $17, 157. Estimated annual revenue is $8,405. -------------------- 82 May 22, 1989 WATER (Continued) (Res. No. 89-5-28) Water mains to be installed in Summer of 1989 following the receipt of the Township's non-refundable contribution-in- aid of construction and the signing of the agreement. -------------------- Respectfully submitted, vo- qa44 A 7010 Joseph Pandy, Jr. General Manager JP/bg Attachments May 22, 1989 83 BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER STROLLE Res. 89-5-4 and RESOLVED, That Resolution 89-5-4 and 89-5-5 (Administrative) 89-5-5 approved of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN Res. 89-5-6 through RESOLVED, That Resolution 89-5-6 through 89-5-17 89-5-17 approved (Administrative Services) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER BELEN SECONDED BY COMMISSIONER STROLLE Res. 89-5-18 approved RESOLVED, That Resolution 89-5-18 (Consumer Services) of the General Manager's Recommendations be approved. Adopted by the following vote: Yeas: Commissioners Belen, Evans, Jessop, Strolle -4 Nays: None Absent: Commissioners McComb and Sebolt -2 Abstained: Commissioners Hassler and Williams -2 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER JESSOP Res. 89-5-19 through RESOLVED, That Resolutions 89-5-19 through 89-5-22 (Electric) 89-5-22 approved of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER JESSOP Res. 89-5-23 approved RESOLVED, That Resolution 89-5-23 (Pension) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Res. 89-5-24 through RESOLVED, That Resolutions 89-5-24 through 89-5-28 (Water) of the 89-5-28 approved General Manager's Recommendations be approved. Presentation by Bill BWL Water Production Chemist, Bill Maier, briefed the Commissioners on Maier on rational for the rational for proposing to slightly increase the hardness standard proposing to slightly for BWL water conditioning plants from the current 85 + 5 parts per increase hardness million to 80 to 100 parts per million (Resolution 89-5-24) . He standard 84 May 22, 1989 reported that the current standard (1) requires overfeed during high load periods in chemical waste and (2) results in higher than necessary sodium levels. The proposed change allows (1) flexibility during high loads resulting in less waste, (2) lower treatment cost overall, (3) no customer perception of change, and (4) decreased sodium levels. Following the presentation and discussion, Resolutions 89-5-24 through 89-5-28 were adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: Direct Excavation DIRECT EXCAVATION OF RESIDUAL LIME. Preliminary results of the pilot of Residual Lune test for direct excavation of residual lime stored at Riverside and hauling it for agricultural application is working well. This process may be more economical than the dredging operation. n,EAAffA Spring PUM/MPPA SPRING CONFERENCE. The first joint conference of the Conference Michigan Municipal Electric Association and Michigan Public Power Association, held May 9-12, 1989, at the Radisson Hotel, Lansing, was successful. Key items consid erna at the meetings were: (1) the proposed resolution for the MMEA/MPPA consolidation was approved, (2) a committee has been named with the task of drafting a consolidation agreement and selecting one person to head MMEA/MPPA, as General Manager/Executive Vice President, (3) the MPPA Board of Commissioners elected Assistant General Manager Joe Wolfe Chairman of their Board. Another formal vote will be required by MMEA and MPPA during the fall conference for the merger of the two entities to become official. The two units will continue to exist as separate organizations with separate bylaws; i.e., their main emphasis being: MMEA - lobbying and MPPA - power supply, with one executive in charge of both entities. Status of MPPA STATUS OF MPPA POOL PROJECT. The following eight of the original 14 Pool Project members have elected to participate in the MPPA Coordinated Dispatch Pool: 1. Charlevoix 5. Lowell 2. Grand Haven 6. Petoskey 3. Harbor Springs 7. Traverse City 4. Lansing 8. Zeeland Additional information relative to MPPA pool set-up activities will be provided to the Board once details are formalized. Several significant tasks still remain to be accomplished before a pool can be operational. Paperwork Reduction PAPERWORK REDUCTION PROGRAM. The Board of Water and Light has been Program involved in a paperwork reduction program, under the leadership of Administrative Services Director Terry Graham. After one month into the program, a reduction of 13,442 pages/year were identified; after the second month, a total 31,908 pages/year will be eliminated such as reports, memos, magazines, and other miscellaneous documents not needed by departments. May 22, 1989 85 Touche Ross & Co. selected EXTERNAL AUDIT. The firm of Touche Ross & Co. has been selected to for External Audit perform the BWL's external audits for the years 1989-1993. The City Council's Ways and Means Committee is scheduled to meet May 23 and recommend to the City Council that this firm be approved. Touche Ross & Co. was low bid for each of the five years. Their bid of $24,000 for 1989 was $2,450 lower than in 1988. MinorityAdvisory MINORITY....... ...................................................................._..................... Committee (MAC) Seminar attend a panel discussion sponsored by the Minority Advisory Committee. The discussion will focus on "Race Relations in the 1990's," to be held on June 7, at 5:30 p.m., at the Hazel Street Training Center. Commissioner Eva Evans has agreed to serve as one of the four panelists. Cost Benefits of COST BENEFITS OF PREVENTIVE MAINTENANCE. Mr. Pandy gave an overview of Preventive Maintenance a recent memo he received from Electric Utility Director Peffley regarding cost benefits of preventive maintenance. It was reported that year to date, Erickson Station's availability is 97%--12% above industry average--the BWL's long-range goal of 85%. In justifying the preventive maintenance program, the Commissioners were advised that there would be a 15-year payback period. By achieving a 97% availability at Erickson Station, approximately $822,000 in savings from fuel cost was achieved vs. an 85% availability. For each megawatt-hour of lost generation at Erickson Station, the cost is $3.95 for replacement generation. Following discussion, Commissioner Belen suggested publicizing this information. Share the Success SHARE THE SUCCESS UPDATE. The fiscal-year-to-date score for the Share .........................................1.1........._ ......... ._..... ...... Update the Success program through April, 1989 is at 354 points. Results of a cost/benefit analysis through April indicates a net savings of $7.3 million. Fiscal 1990 System Load FISCAL 1990 SYSTEM LOAD AND GENERATION PROJECTION. A colored graphic .... . ._....... ............................... .. ..... . . _.........I—. and Generation Projection showing the system load and generation projection schedule for Fiscal 1990 was handed out. This schedule will be instrumental in developing the 0&M budget for the Electric Utility, providing total generating capability, planning equipment outages and optimizing future sales-for- resale. Legal Opinion RE: OPINI .. ... . .... .._...._. Purchase of M Revenue An opinion prepared by Staff Attorney Larry Wilhite was handed out, Bonds by Commissioners relative to the conflict of interest question raised at the May 1 Committee of the Whole meeting. Mr. Pandy presented a summary of the opinion. In essence, the Board of Commissioner's purchase of BWL mini- bonds would not violate a law, but would have the appearance of a conflict of interest. Because of the appearance, the staff attorney strongly recommends avoiding such a purchase. Following discussion, staff was directed to draft a recommended policy statement clearly defining who would be eligible to purchase BWL revenue bonds, and who should be ineligible; i.e. , Commissioners, Executive Staff members (specifying those who vTould be exempt, if any) , and clarifying the eligibility of family members. 86 May 22, 1989 Flakt FGD Systems for FLART FGD SYSTEMS FOR ERICKSON STATION. The contents of a letter Erickson Station received from Flakt, Inc. regarding a fluidized gas desulfurization (FGD) system for Erickson Station was highlighted. Flakt, Inc. reports that their examination of spent lime from the water treatment plant indicates it is suitable for use in a wet FGD system, but not a dry system. The quantities involved are large, estimating 67,000 dry tons based on an 8,000 hour per year operation at full load with 3% sulfur coal. The average budget price for a dry scrubber and baghouse at Erickson Station would be approximately $11 million; and a wet scrubber and baghouse would be twice that amount. It was noted that with the definite possibility of acid rain legislation emerging across the country this year, there may be an opportunity to open other markets for BWL spent lime. Delegation from the DELEGATION FROM THE NETHERLANDS. The Governor's Office referred a Netherlands delegation from the Netherlands to the BWL to meet with Mr. Pandy on May 22 to discuss the management and operations of a well run municipal utility. General Manager asked APPA APPOINTMENT. General Manager Pandy has been asked to serve as to serve as Chairman Chairman of a new APPA Task Forte^ on Strategic Marketing. Mr. Pandy of new APPA Task indicated he would accept this assignment, subject to concurrence by Force on Strategic the Commissioners. Marketing Uo CD BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER STROLLE 3 0 < o RESOLVED, That General Manager Pandy, is hereby authorized to N -n serve as Chairman of APPA's Task Force on Strategic N n Marketing. m Adopted unanimously. 00 � � COMMISSIONERS' REMARKS Status of providing Commissioner Hassler inquired on the status of p ding q providing electric electric service to service to the Meijer Freight Consolidation Center. Meijer Freight Con- solidation Center Electric Engineering Superintendent Dick Bauder reported that service order requisitions for underground electric service have been signed. This project is close to being released for construction. The Commissioners will be kept informed of legal issues that may arise with respect to providing service to this customer. Past Due Accounts Commissioner Hassler noted that the past due accounts receivable Receivable through April, 1989 is up again. ne 27,�1j? Office, Board of Water and Light Tuesday, June 27, 1989 Lansing, Michigan The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chair Pro Tem Williams. 01 Call Present: Commissioners Belen, Jessop, McComb, Strolle, and Williams -5 Absent: Commissioners Evans, Hassler and Sebolt -3 forum The Secretary declared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) avocation The Invocation was given by Chair Pro Tem Williams. ledge of Allegiance The Pledge of Allegiance was said by all present. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER BELEN ,pproval of That minutes of rescheduled regular session of May 22, 1989 be brutes approved as mailed. Adopted unanimously. 'ublic Convents CHAIRMAN PRO TEM WILLIAMS 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. Thank--you letter from A letter was read from David E. Hickey, President of the Michigan )avid Hickey of MTAA re: Municipal Electric Association (MMEA) , thanking the Board of Water and Legislative fish-fry and Light for hosting MMEA's annual legislative fish fry and the spring spring conference conference. Received and placed on file. .ne 27, 1989 89 Resolution 89-6-1 PERSONNEL COMMITTEE REPORT ................................................................................................................................. June 27, 1989 Board of Commissioners Board of Water and Light Lansing, Michigan Dear Ladies and Gentlemen: Personnel C=attee The Personnel Committee met on Thursday, June 15, 1989, to consider the Report RE: Wage and Non-Bargaining Wage and Salary Plan review and compensation Salary Plan review and recommendation for Fiscal Year 1989-90, as submitted by staff. orq)ff ation recorrmerr ation for FY 89-90 Present were Personnel Committee Members Jessop (Chair) , McComb, and Sebolt. Also present was Commissioner Hassler. Following discussion and review of the (a) Wage and Salary Administration for Non-Bargaining Unit employees, (b) the wage and benefit survey conducted by the Human Resources Division, (c) percentage increase in the Bureau of Labor Statistics Consumer Price Index for February 1988 v. February 1989, (d) Bargaining Unit and Non-Bargaining Unit salary comparison and (e) Non-Bargaining Unit employee issues, the Committee adopted the following motions and recommends Board approval: I. WAGES AND SALARIES A. That all current, Non-Bargaining Unit salary ranges be increased 4.0% for Fiscal 1989-90. B. That all current Clerical and Technical employees in full-time regular positions receive a 4.0% General Increase. C. That the matrix for Performance Increases for First Line Supervisory, Professional-Middle Management, and Administrative employees be set at 4.0%, and D. That Performance Increases be administered for Clerical and Technical employees as in the past. II. PERFORMANCE INCREASE DATES That Performance Increase dates for Professional and First Line Supervision be moved to July 1. Further, it is recommended that all of these employees be placed on an objective based performance appraisal system at least by July 1, 1990. ze 27, '1989 III. SALARY ADJUSTMENTS A. First Line Supervisors: That adjustments continue to be made on July 1 to the salaries of First Line Supervisors who do not maintain an 8% differential at the Minimum, or 18% at the Normal Maximum, above those they supervise. B. Engineers: That the market problem for Project Engineers be addressed by the Engineering and Human Resources Divisions no later than October 1, 1989. Further, that the General Manager be given the authority to make necessary adjustments based upon the consequent recommendations. IV. PART-TIME EMPLOYEES That all Part-Time employees receive a 4.0% General Increase, rounded up to the next full nickel, effective July 1, 1989. V. FINANCIAL IMPACT The impact of these recommendations results in an increase of 4.46% of total compensation. Respectfully submitted, E. Lane Jessop, Chair Personnel Committee Commissioner Belen inquired on the maximum percentage salary increase a Non-Bargaining Unit employee could receive based on performance from the compensation recommendation. General Supervisor of Personnel Services, Terrie Stevens, responded that the maximum increase--based on the Fiscal Year 1989-90 Performance Increase Matrix, would be 12 percent for an employee with a superior rating and in the lower third of the salary range. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN That the Committee of the Whole Report, including Resolution 89-6-1 be approved as presented. Adopted unanimously. dune 27, 1939 91 Recommendations Board of Water and Light Of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-6-2 That in accordance with Article II, Section 2. 1 of the Board's Rules of Administrative Procedure, the following Six-month Board listing of dates be adopted as the meeting schedule for Meeting Schedule the Board of Water and Light for the ensuing six (6) months. This schedule is subject to change as a result of date conflicts with rescheduled City Council meetings. Further, that a notice of the meeting schedule be pub- lished in the LANSING STATE JOURNAL the week of July 2, 1989. The following is the schedule of regular meetings of the Board of Commissioners of the Board of Water and Light commencing at 5:30 p.m. for the last six (6) months of 1989: July 25 Tuesday August 22 Tuesday September 26 Tuesday October 24 Tuesday November 28 Tuesday December 19 Tuesday ---------------------- Res. No. 89-6-3 That the BWL Commissioners, General Manager, Assistant General Manager, Treasurer/Controller, Director of Proposed Policy on the Financial Planning and Internal Auditor, including Purchase of Mini Bonds dependent family members, be authorized to purchase no by Camdssioners, Gen. more than one bond or mini-bond from any BWL bond issue. Mg., and Executive Staff That other BWL Directors and Executive Staff be author- (See P. 106for ized to purchase bonds or mini-bonds in amounts as they amended resolution) may so desire. e 27, 1989 ADMINISTRATIVE (continued) (Res. No. 89-6-3) That Commissioners and all Executive Staff shall file written disclosure statements with the Secretary of the Board which indicate the full amount of bond or mini- bonds purchased by themselves and their dependent family members. -------------------- Limitation and disclosure requirements will allow Com- missioners and staff to exercise leadership by example in purchasing of bonds or mini-bonds, while fully dis- closing their participation therein. AMENDMENT NOTE: See amended language on p. 106. -------------------------- Res. No. 89-6-4 Approve the recommendation of the Share the Success Management Committee for Performance Measures for FY Share The Success 1989-90 Share the Success Plan and that employees will performance measures be eligible to receive a Performance Bonus of 0 - 5% as and employee benefit determined by the final Performance Measures points options approved earned for FY 1990; and, Approve the recommendation of the Share the Success Management Committee for Employee Benefit Options for using FY 1989 Share the Success Bonus Credits for the Plan Year 9/1/89 - 8/31/90. -------------------- If all goals are reached, the BWL will realize a cost savings of $6, 126,378 and employees will earn up to 500 points, or a 5.0% STS bonus equal to $1 ,729,566. The net savings to BWL will be $4,396,812. The Benefit Options are similar to last year but include the addition of Lifestyle Protection Plan Term Life Insurance and the purchase of BWL bonds (if available) . See Joe Wolfe's memo dated 6/14/89 for further details. -------------------- Res. No. 89-6-5 Approve Amendment No. 2 of Coal Purchase and Sales Agreement with Costain Coal, Inc. , dated October 29, Amendment No. 2 of 1986, as shown below: Coal Purchase and Sales Agreement with 1 . Extend term from 12-31-91 to 6-30-93. Costain Coal, Inc. 2. Immediate price reduction from $27.515/ton to $25.30/ton retroactive to 1/1/89. June 27, 1989 93 ADMINISTRATIVE (Continued) (Res. No. 89-6-5) 3. Beginning 10-1-89, increase tonnage from 100,000 tons/year to 250,000 tons/year. 4. Reduce the amount of pass through for contract escalation factors from 80% to 75%. 5. In 1993, a) grant Costain a Right-of-First Refusal on a five (5) year replacement contract; b) at BWL option, the price payable on the 1993 contract extension will be either the then current market price or the then current contract price; and c) at BWL option, contract tonnage may increase from 250,000 to 300,000 tons/year. In addition to the above, Costain's Right-of-First Refusal on the Chapperal contract which expires 9-30-89 is cancelled. -------------------- It is estimated that this proposed agreement has a net present value savings of $413,000 when compared to the probable cost of coal under contract provisions which could be obtained by open bidding. The cost of incremental tonnage after 10-1-89 is approx- imately $24.60/ton which compares favorably with the current spot market price of coal. In addition to the measurable savings outlined above, the proposed agreement has potential future benefits by offering price protection in 1993 and beyond in case acid rain legislation artificially increases the market value of low sulphur coal. -------------------- Res. No. 89-6-6 Approve the following resolution requesting that Coordinated Pool Project be established: Resolution requesting MPPA to form a Coor- WHEREAS, the Board of Water and Light of the City of dinated Pool Project Lansing, Michigan (the "Participant") is a member of Michigan Public Power Agency (the "Agency") , an agency formed to meet the future electric needs of its member municipalities; and, WHEREAS, it is anticipated that the expenses of the Agency will be met in the following manner: ie 27, 1989 ADMINISTRATIVE (continued) (Res. No. 89-6-6) 1 . General Administrative expenses will be paid from dues to be received by the Agency from all members of the Agency; 2. Project costs will be paid by members of the Project Committee; and, WHEREAS, Project Costs, such as engineering fees, legal fees, financial consulting fees, travel costs and other must be incurred by the Agency to establish a project; and, WHEREAS, Project Costs must be paid by the Agency whether or not a project is finally established; and, WHEREAS, the Agency on December 13, 1984, accepted an Engineering Report - Power Supply Study (the "Reporter") dated October 31 , 1984, completed by R.W. Beck and Associates on behalf of the Agency; and, WHEREAS, the Report indicated, among other things, that: 1 . There appears to be sufficient generating capacity among MPPA's members to meet their combined needs until the year 2000. 2. There are substantial savings to MPPA's members from a combined dispatch of the resources of the Agency members; and, WHEREAS, on the basis of the Report, the Lansing Board of Water and Light participated in the Power Resources Study-Phase II; and, WHEREAS, as a result of the Phase II study, the munici- palities of Charlevoix, Grand Haven, Harbor Springs, Lansing, Lowell, Petoskey, Traverse City and Zeeland have indicated their desire to form a Coordinated Pool; and, WHEREAS, there are still engineering, legal, financial and other expenses that will be incurred to negotiate the agreements for transmission, interconnection, dis- patching and other matters before a pool can be operational. NOW THEREFORE, BE IT RESOLVED, by the Lansing Board of Water and Light as follows: Jame 27, 1989 95 ADMINISTRATIVE (continued) (Res. No. 89-6-6) 1 . The Agency is hereby requested to form a Coordinated Pool Project to perform the tasks required to form an eight member MPPA Pool. 2. The Participant agrees to reimburse the Agency on a monthly basis for its 49.88% share of the Coordinated Pool Project's costs, as determined by the Project Committee (up to a maximum reim- bursement of $85,000) . 3. The Participant understands that these costs will not be reimbursed by the Agency at a later date, unless the Project results in an eight member MPPA Coordinated Pool. -------------------- Considerable work remains to bring the pool into operation including engineering and legal expenses to negotiate final agreements between MPPA and the members, transmission and coordination agreements with Consumers Power Company, dispatching agreements between MPPA and Lansing BWL and Wolverine Power Supply Cooperative. These efforts will cost an estimated $170,000, of which the BWL share is 49.88%, not to exceed $85,000. See Joe Wolfe's memo dated 6/2/89 enclosed. -------------------- ADMINISTRATIVE SERVICES Res. No. 89-6-7 Administrative Services, in accordance with prior Board approval, sold the following 14 vehicles and equipment Sale of M vehicles at the State of Michigan Public Auction of Motor and equigrent at Vehicles on May 13, 1989. State Auction BWL # Description Sale Price 3 1977 Dodge D-300, 10,000# GVW flat bed cab and chassis, odometer reading approx. 70,004 miles; Water Distri- bution Department. $ 900.00 4 1967 International 1600, Pitman Model 70B hydrolift, odometer reading approx. 45,236 miles; Stores Department. 1 ,900.00 me 27, 1989 ADMINISTRATIVE SERVICES (continued) (Res. No. 89-6-7) BWL # Description Sale Price 16 1982 Chevrolet Model CC31403, 10,000# GVW cab and chassis with Powers SM-40 service body, odometer reading approx. 53,832 miles; Water Distribution Dept. 2,450.00 43 1984 Chevrolet Model CG21005, 6,600# GVW Van Type Truck, V-8, odometer reading approx. 76, 113 miles; Water Distribution Dept. 2,000.00 51 1981 GMC Model TC31403, 10,000# GVW cab and chassis with Powers SM-40 service body, odometer reading approx. 56, 172 miles; Water Distribution Dept. 2,000.00 80 1976 Ford Model F616, 24,000# GVW crew cab and chassis with Delphi body, odometer reading approx. 46,272 miles, Line Construction Dept. 950.00 102 1977 Ford Model F600, 24,000# GVW crew cab and chassis with Powers body, odometer reading approx. 44,768 miles; Line Construction Dept. 1 ,200.00 115 1982 Chevrolet Model CC30943, 10,000# GVW crew cab pickup with Powers SM-150 service body, odometer reading approx. 38,991 miles; Water Distribution Dept. 1 ,450.00 710 1981 Tennant Model 275 floor sweeper; Construction Services Dept. 550.00 711 1979 Ingersoll/Rand Model P175WW portable air compressor; Water Distribution Dept. 1 ,950.00 727 1978 Ditch Witch Model R-40 trencher with trailer (No. 519); Line Construction Dept. 6,250.00 770 1977 Chicago Pneumatic Model 185GZ portable air compressor; Water Distribution Dept. 1 ,400.00 783 1980 John Deere Model 310A tractor backhoe; Water Distribution Dept. 11 ,400.00 Jame 27, 1989 97 ADMINISTRATIVE SERVICES (continued) (Res. No. 89-6-7) BWL # Description Sale Price 789 1988 Chicago Pneumatic Model 185GZ portable air compressor; Water Distribution Dept. 1 ,400.00 Gross Auction Proceeds $35,800.00 Less 5.6% Auction Fee 2,004.80 Net Auction Proceeds $33,795.20 -------------------- Bids for the new vehicles to replace the above listed vehicles were taken with and without trade-in allowance. The total trade-in allowance for the above vehicles was $22,240.00, thus the BWL netted an additional $11 ,555.20 by selling at auction. -------------------- CONSUMER SERVICES Res. No. 89-6-8 That a list of accounts totaling $398,872.26 on file in the Secretary's office be written off as uncollectible (a) Bad Debt Write- for fiscal year ending June 30, 1989. Following is a Off for fiscal breakdown of these accounts: year ending June 30, 1989 Electric $217,829.56 Water 74,049.69 Merchandise 286.99 Miscellaneous 46,483. 14 Steam 1 ,460.23 Sub-total $340, 109.61 Sewerage 58,762.65 TOTAL $398,872.26* *This figure includes bankruptcy accounts totaling $15, 162.81 . (b) Uncollectible Further, that the sewerage charge in the amount of Sewerage Charge $58,762.65 be referred to the City for further handling. in the mount of The BWL's portion of the above ($340, 109.61 ) will be $58,762.65 charged against the $615,000 reserve set forth on the referred to the balance sheet for "Uncollectible Accounts". City for further handling -------------------- This accounting procedure is done on an annual basis. It amounts to .228% of total billed sales revenue for the 12 months ending April, 1989. 3 me 27, 1989 CUSTOMER SERVICES (continued) (Res. No. 89-6-8) A Bad Debt Write-off 5 Year Comparison is enclosed. Comparison of other utilities (1988 figures) are listed below: Consumers Power Company Revenue $3,092,455,000 Write-off $6,354,000 = .21% Detroit Edison Revenue $3,070,724,000 Write-off $10,789,000 = .35% Kansas City Public Power Revenue $126,794,000 Write-off $902,000 = .71% -------------------- HUMAN RESOURCES Res. No. 89-6-9 That Ms. Carolyn Williams, receiving clerk in Stores, be awarded $171 . 13 for her suggestion ( 1989-184) to Suggestion Award to install auxiliary door controls at each receiving door Carolyn Williams to eliminate multiple trips from the truckers' cage to the door control switches. This method would save approximately 45 minutes per day and improve safety. -------------------- It is estimated that the BWL will save $961 .28 the first year by using this suggestion. -------------------- Res. No. 89-6-10 That Mr. Larry Taylor, overhead line supervisor in Line Construction, be awarded $1 ,486.28 for his suggestion Suggestion Award to ( 1987-84) to install dual wound transformers on cutover Larry Taylor jobs. This method would save time by eliminating the extra work now required for cutover installations. -------------------- It is estimated that the BWL will save $14, 112.76 the first year by using this suggestion. -------------------- June 27, 1989 99 HUMAN RESOURCES (continued) Res. No. 89-6-11 That Mr. Robert Hume, line helper in Line Construction, be awarded $213.27 for his suggestion ( 1989-170) , to Suggestion Award to install remote door switches on the doors located on Robert Hume E-dock in Stores. This method would benefit the BWL by reducing the amount of time between loading individual trucks. -------------------- It is estimated that the BWL will save $1 ,382.65 the first year by using this suggestion. -------------------- LEGAL Res. No. 89-6-12 That the General Manager be authorized to retain the law firms of Dickinson, Wright, Moon, VanDusen and Freeman; Authorization to Loomis, Ewert, Parsley and Ederer; Dykema, Gossett, retain special legal Goodnow, Spencer and Trigg; Willingham and Cote' ; and counsel for a period Varnum, Riddering, Schmidt and Howlett as special of one year counsel, subject to approval of the Lansing City Council. These firms will provide, as needed, advice in the areas of employment relations, public finance, municipal law, litigation, real estate and general commercial law. These firms shall be retained for a period of one ( 1 ) year and shall be reimbursed at their respective hourly rates. Further, that Resolution No. 88-4-7 be, and is, hereby rescinded. ------------------- Requests for Proposals (RFP's) were sent to eight (8) firms, seven (7) of which responded. The proposals were evaluated by a Task Force comprised of four (4) directors. Each firm has offices in the Lansing area and were selected for specialized reasons, although on a given matter, one firm could perform as capably as another. The anticipated uses for these firms is as follows: Dickinson, Wright: labor and finance; Loomis, Ewert: Centaur v BWL; Dykema, Gossett: environmental, terri- torial disputes; Willingham & Cote' : insurance claims, environmental; Varnum, Riddering: public power issues, MPPA opinion. Use of special counsel would be subject to the recommendation of Staff Counsel and approval of the General Manager. -------------------. 0 tube 27, 1989 PENSION Res. No. 89-6-13 That Evalene Short, Staff Specialist in Human Resources, be placed on a monthly disability pension of $649.23 Evalene Short placed with Workers' Compensation Offset, effective October 14, on a disability 1987. She has selected Option VI with the provision pension that after her death, if her husband, David E. Short, survives her he will receive 20% or $129.85 per month for the rest of his life. If her husband predeceases her, the pension amount of $649.23 will revert back to the regular pension amount of $654.25 for the rest of her life as provided under Option VI. Ms. Short has worked for the BWL for 17.75 years and is 41 years of age. -------------------- Res. No. 89-6-14 That John P. Harpster, Boulevard Light Mechanic in Line Construction, be placed on a monthly disability pension John P. amTster of $1 ,052.26 effective April 29, 1989. He has selected placed on a dis- Option I with the provision that after his death, said ability pension amount of pension shall continue to his wife, Barbara J. Harpster, if she survives him. Mr. Harpster has worked for the BWL for 29.76 years and is 55 years of age. -------------------- TREASURER/CONTROLLER Res. No. 89-6-15 It is estimated that there will be approximately $15,500,000 in the BWL Receiving Fund at the end of Authorization to pay Fiscal Year 1989. All cash and investments in the $4,673,499 of fund at the end of the fiscal year not required to Surplus Fund monies satisfy other funds established by Revenue Bond to City of Lansing Ordinance 18A, will transfer to a Surplus Fund. All for return on City July 1989 fund requirements as established by the equity Ordinance will have been met; therefore, the approxi- mate $15,500,000 will transfer to the Surplus Fund on June 30, 1989. Monies in the Surplus Fund may be appropriated by the Board for any lawful purpose. Therefore, it is recommended that the Board authorize the payment of $4,673,499 of the Surplus Fund monies to the City of Lansing, Michigan, which will constitute a return on the City's equity in its utility system. June 27, 1989 101 , TREASURER/CONTROLLER (continued) (Res. No. 89-6-15) It is further recommended that all funds remaining in the Surplus Fund following the payment to the City be Funds rtfmining in transferred effective June 30, 1989 to the Special Surplus Fund to be Project Fund for use in payment of capital expenditures. transferred to the Special Project Fund -------------------- Res. No. 89-6-16 That the Treasurer/Controller file the necessary report of unclaimed checks, warrants, deposits and credit Report of unclaimed balances with the Michigan Department of Treasury, checks, warrants, Escheats Division and remit the total payable of deposits and credit $6,0 31 .5 6. balances to be filed with Michigan Dept. -------------------- of Treasury Escheats Division Recent years escheated amounts were: 1988 $ 8,733.56 1987 11 , 160.54 1986 198,489,21 1985 17,519.81 -------------------- WATER Res. No. 89-6-17 It is recommended that Sheet 8.03, Paragraph 9 of the Rules and Regulations for Water Service be revised, Sheet 8.03 of Rules adopted and made effective immediately. and Regulations for Water Services New language is in all CAPITAL LETTERS and deleted anended language is ltined-eat. 9. LAWN SPRINKLER SYSTEMS In addition to the requirements of Item 8 above, lawn-sprinkler and irrigation systems have the usual requirements relative to separate meter- settings.+6ee-Skeet-9T89;-Item-44v Where a customer desires a separate parallel meter (e.g. meter for water supply to an irrigation system) , the meter shall be furnished and installed by the Board, and shall be connected at an acceptable inside or outside location. In no case shall the lawn irrigation meter be larger than the regular domestic-service meter. .02 Tune 27, 1989 WATER (Continued) (Res. No. 89-6-17) Immediately at the outlet of the meter-setting, the customer shall install a backwater valve. and-an appEeved-baekglew-prevexteLc-+see-Sheets-44Tgg-aad 449rg43-asd-Figure-4-axd-2-4:a-the-Appeadix4: IT IS RECOMMENDED THAT ON ALL HOSE BIBS SERVED FROM THIS METER AN APPROVED BACKFLOW PREVENTION DEVICE BE INSTALLED. -------------------- The existing rule has been in effect since June 30, 1988 and is being revised to be more clear and concise and to more accurately reflect the Board's responsibilities regarding water service. -------------------- Res. No. 89-6-18 It is recommended that Sheet 8.04, Paragraph 10 of the Rules and Regulations for Water Service be revised, Sheet 8.04 of Rules adopted and made effective immediately. and Regulations for Water Service Deleted language is 1-}xed-e7at. amended 10. FIRE SERVICE Installation of service pipe for fire protection shall be governed by the same rules as other Customer Service Connections. Additionally, at the end of the Fire Service Connection installed by the Board, the Customer shall install a "detector check valve" -fe44ewed-lay-a-gate-valve. Said "detector check valve" shall have installed on its two by- pass plugs, two brass pipe nipples and two 3/4 inch brass compression valves so that a by-pass meter may be installed by the Water Distribution Department. The location of the "detector check valve" shall be governed by the same rules as water meters (see Sheet 9.0, Rule 2) . -------------------- The existing rule has been in effect since October 18, 1976, and is being revised to allow for the installation of the gate valve before or after the "detector check valve", inside or outside of the building or not at all, depending on the customer's design criteria for his fire service. -------------------- Jame 27, 1989 103 WATER (continued) Res. No. 89-6-19 That the Board approve a revision to Water District No. 57 which was approved at the May 22, 1989 Board meeting Water District No. 57 in the amount of $120,837. 10. The revised amount will revised to reflect a be for $150,961 .00, a difference of $30, 123,90. This new route on Pinetree water district will now serve 70 residential customers Road and Dell Road instead of 43. This revision amends Resolution 89-5-28, adopted by the Board on May 22, 1989. -------------------- Water District No. 57 is being revised to reflect a new route on Pinetree Road and Dell Road. Customers along this route have requested water from the Township and the added water main being installed will accomplish this. -------------------- Res. No. 89-6-20 That the Board agree to serve water to proposed Water District No. 58, Delhi Township, as requested by Approval of Delhi resolution of the Delhi Charter Township Board on June Township Water 20, 1989, and that in accordance with the agreement District No. 58 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. 58 estab- lished by Township resolution on June 20, 1989, and will provide a potable water supply to said district. 2. The Township will be required to make a $71 ,503.84 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LVIII) covering the furnishing of a potable water supply in Water District No. 58. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. �me 27, 1989 WATER (Continued) (Res. No. 89-6-20) Further, that upon receipt of the sum of $71 ,503.84 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LVIII) to furnish a potable water supply in Water District No. 58. The geographical area of Water District No. 58 is as follows: Beginning on Grovenburg Road at the south end of Grovenburg Farms No. 2 Subdivision thence south along Grovenburg Road 1 , 128 feet, thence Grovenburg Woods Subdivision, Phase 1 , Lots 1 thru 30. To provide a potable water supply within the proposed new district requires the installation of 3,058 feet of water main at an estimated cost of $76,628.84 and seven (7) fire hydrants at a cost of $11 ,795.00. The main extension will serve 40 residential customers. One-time connection fees will amount to $15,960.00. Estimated annual revenue is $7,820.00. Water mains to be installed in Summer of 1989 following the receipt of the Township's non-refundable contribu- tion-in-aid of construction and the signing of the agreement. -------------------- Res. No. 89-6-21 That the Board agree to serve water to proposed Water District No. 59, Delhi Township, as requested by Approval of Delhi resolution of the Delhi Charter Township Board on April Township Water 18, 1989, and that in accordance with the agreement District No. 59 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. 59 estab- lished by Township resolution on April 18, 1989, and will provide a potable water supply to said district. 2. The Township will be required to make a $39,742.50 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations for Water Service for installing the necessary distribution facilities to serve said district. Ame 27, 1989 105 WATER (Continued) (Res. No. 89-6-21 ) 3. The Board and the Township are to enter into a written agreement (Supplement LIX) covering the furnishing of a potable water supply in Water Dis- trict No. 59. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $39,742.50 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LIX) to furnish a potable water supply in Water District No. 59. The geographical area of Water District No. 59 is as follows: Grovenburg Farms Subdivision No. 3 Lots 45 thru 70 To provide a potable water supply within the proposed new district requires the installation of 1 ,875 feet of water main at an estimated cost of $34,687.50 and three (3) fire hydrants at a cost of $5,055.00. The main extension will serve 26 residential customers. One-time connection fees will amount to $10,374.00. Estimated annual revenue is $5,084.00. Water mains to be installed in Fall of 1989 following the receipt of the Township's non-refundable contribu- tion--in-aid of construction and the signing of the agreement. -------------------- Respectfully submitted, Joseph Pandy, Jr. General Manager JP/bg .06 Tune 27, 1989 BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER STROLLE ;es. 89-6-2 RESOLVED, That Resolution 89-6-2 (Administrative) of the approved General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN Zes, 89{6_3 RE: RESOLVED, That Resolution 89-6-3 (Administrative) of the 'olicy on the Purchase General Manager's Recommendations be approved. )f Mini Bonds as amended BY COMMISSIONER McCOMB-- That Resolution 89-6-3 be amended as follows: That the BWL Commissioners, General Manager, Assistant General Manager, Treasurer/Controller, Director of Financial Planning and Internal Auditor, :ifivlvd-ing THEIR SPOUSES AND dependent family members, be authorized to purchase no more than one :b n=&or mini-bonds from any BWL bond issue (i.e. , limit of one mini-bond per family) . That other BWL Directors and Executive Staff, THEIR SPOUSES AND DEPENDENT FAMILY MEMBERS be authorized to purchase NO MORE THAN ONE ;bends-or mini-bonds-7n-arrentrts-as-f�ie�+-ma .................... ...._................................. drs-iry FROM ANY BWL BOND ISSUE (i.e. , limit of one mini-bond .._.._...........................................................................-- ................_........................... per family) . That Commissioners and all Executive Staff shall file written disclosure statements with the Secretary of the Board which indicate the full amount of bend-or mini-bonds purchased.-icy themselves;-and-their-dependent-family-members- -------------------------- Limitation and disclosure requirements will allow Commissioners and staff to exercise leadership by example in purchasing of bands-or mini-bonds, while fully disclosing their participation therein. Note: Words to be deleted are stricken out. Words to be added are in capital letters. BY COMMISSIONER JESSOP-- That Resolution 89-6-3 be referred to staff for further review. Discussion followed. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN That motion to refer resolution to staff be withdrawn. Carried. June 27, 1989 107 I�Y COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER STROLLE ini Bond purchase policy ar Camdssioners and Executive That Resolution 89-6-3 as amended be adopted. taff adopted as amended Adopted by the following vote: Yeas: Commissioners Belen, Jessop, McComb, Strolle, Williams -5 Nays: None Absent: Commissioners Evans, Hassler, Sebolt -3 auTdSGioner Hassler indi- In the absence of Commissioner Hassler, General Manager Pandy announced ates he does not plan to for the record that Commissioner Hassler has indicated he does not plan archase bonds or mini- to purchase bonds or mini-bonds from the BWL bond issue. ands BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN as. 89-" through RESOLVED, That Resolutions 89-6-4, 89-6-5, 89-6-6 4-6-6 approved (Administrative) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER BELEN SECONDED BY COMMISSIONER STROLLE es. 89-6-7 approved RESOLVED, That Resolution 89-6-7 (Administrative Services) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER STROLLE es. 89-&-8 through RESOLVED, That Resolutions 89-6-8 (Consumer Services) , 9-6-12 approved 89-6-9, 89-6-10 and 89-6-11 (Human Resources) , and 89-6-12 (Legal) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER JESSOP ;es. 89-6-13 and RESOLVED, That Resolutions 89-6-13 and 89-6-14 (Pension) of the 39-{-14 approved General Manager's Recommendations be approved. Adopted unanimously. am 27, 1989 BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN es. 89-6-15 and RESOLVED, That Resolutions 89-6-15 and 89-6-16 (Treasurer/ 19-6-16 approved Controller) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER JESSOP ;es. 89-6-17 through RESOLVED, That Resolutions 89-6-17 through 89-6-21 (Water) of the 39-6-21 approved General Manager's Recommendations be approved. Adopted unanimously. NEW BUSINESS 'resentation on Market Andrew Morrison of Market Opinion Research presented an oral summary of )pinion Research results this year's customer attitude survey. He reported that the survey )f customer attitude shows improvements in several areas, including overall favorability and Ivey concern for customers. Customers were particularly positive about our electric utility's reliability record, with 92% giving the BWL high marks for reliable service. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: Report on power outage POWER OUTAGE. About 5,000 homes and businesses served by the BWL were .. ..........-.._. ... . ....I Erom June 26,storm without electricity as a result of severe thunderstorms that passed through the greater Lansing area on Monday evening, June 26. Power was restored to most customers by 11 p.m. on the same evening and to all customers by Tuesday afternoon, June 27. Report on annual BWL PICNIC A SUCCESS. The Annual BWL Employees Picnic was held .............................. mrployees picnic Saturday, June 17 at the Erickson Station grounds. RETIREMENT PARTY FOR WALLY NOURSE. A retirement party honoring -....._................_...... Retirement Party to Treasurer/Controller Wallace Nourse is planned for Friday, July 28, honor Wally Nourse 1989, at 6:30 p.m. , at the Radisson Hotel. The Commissioners were invited to join staff and friends to celebrate this special occasion. First of Michigan engaged FINANCIAL ADVISORY SERVICE. First of Michigan has been retained to to provide advisory ser- provide financial advisory services in the issuance of approximately vice to rmrket revenue $16 million in revenue bonds in the fourth quarter of 1989. bonds COSTAIN COAL PRESIDENT RESIGNS. Bruce V. Work, president of Costain Reorganization of Costain Coal Inc. resigned effective June 14, 1989. Costain Coal intends to Coal, Inc, acquire all of the outstanding stock of Pyro Energy, a publicly traded company. The new Costain organization will be headed by Chuck Schulties, former president of Pyro Energy. Jame 27, 1989 109: Report on legal fees LEGAL FEES FOR SPECIAL COUNSEL. A recap of legal fees paid by the BWL paid for Special Counsel over the past four years was handed out for review. Year to date fees for Fiscal 1988-89 are considerably lower as compared to previous years. Audit on Sales Tax AUDIT DETERMINATION LETTER. The BWL recently received a clean sales tax audit from the State of Michigan Department of Treasury. There were no penalties assessed. The sales tax audit covered the period September 1, 1985 through April 30, 1989. UNISYS 2200/402 computer COMPUTER MAINFRAME. The new UNISYS 2200/402 computer system has been ..................................................................... system received and received and is operating smoothly. operating ASEA BROWN BOVERI FORMS NEW SUBSIDIARY. ASEA Brown Boveri (ABB) has ............................................................................................ . ........................ ASEA Brown Boverl formed a new subsidiary, ABB Energy Ventures of Princeton, New Jersey, (ABB) forms a new to develop, own, and operate non-utility generation and transmission subsidiary projects worldwide. ABB Energy Services will remain independent of ABB Energy Ventures, yet Energy Services will serve as a key supplier for U. S. projects. Disputed water bill ELAINE HILL WATER BILL DISPUTE. As directed by the Commissioners at their regular meeting of May 22, an independent test was conduced by an outside source to verify the accuracy of the BWL water meter removed from Elaine Hill's premises. Results of an independent test conducted by Delta Township were slightly at variance with BWL conclusions. Due to current water metering technology, the BWL allows for a certain level of under or over-registration of water usage. In conclusion, the dispute is being resolved as follows: (1) the BWL test results are to remain unchanged, but the ccf usage registration will be adjusted to 100 percent; (2) this adjustment will result in an additional 1.5 percent reduction to Mrs. Hill's ccf usage; and (3) a 30-month extended payment plan is being arranged to minimize her financial impact. Clean Air Legislation CLEAN AIR LEGISLATION. President Bush unveiled an outline of the Administration's clean air legislation on June 12, 1989. The proposal, which is yet to be drafted as legislation, covers acid rain, urban air pollution, and toxic air pollutants. Based on the President 's proposal, the BWL is not expected to be adversely affected by Phase I of the proposed clean air legislation. Corporate Alternative CORPORATE ALTERNATIVE MINIMUM TAR. House Ways and Means Committee Miriilmun Tax Chairman Dan Rostenkowski introduced legislation (H. R. 1761) to impose high taxes across the board for public purpose tax-exempt bonds. Currently, 50 percent of the interest earnings from public purpose tax- exempt bonds is included in calculating the corporate alternative minimum tax, and 75 percent would be taxed beginning in 1990. H. R. 1761 would subject 100 percent of a corporation's tax-exempt income to such a tax. This would diminish the market for public power's tax- exempt bonds. People VS Helen Chavez PEOPLE VS. HELEN CHAVEZ. A notice, dated June 7, 1989, from the - restitution ordered Thirtieth Judicial Circuit Court of Michigan has been received advising that restitution has been ordered for theft damages suffered from former employee, Helen Chavez. 10 Lme 27, 1989.. tatus of energy theft ENERGY THEFT. A brief report was given on the status of the energy ase theft case. F. Scattergood APPA SYSTEM _ACHIEVEMENT AWARD. General Manager Pandy displayed the ........................................................................_.. ysten Achievement Award E. F. Scattergood System Achievement Award presented to him and eceived at APPA National Chairman Phillip Hassler at the American Public Power Association bnference (APPA) National Conference on June 6 in Orlando, Florida. He emphasized that this award was made possible through the combined efforts of all BWL employees. On July 10, the Lansing City Council plans to introduce a resolution recognizing the BWL for receiving this award. This marks the first time ever a public power utility in Michigan has been the recipient of the award. report on AWWA Water AWWA WATER MAIN TAPPING COMPETITION. The BWL tapping team put in an .......................__......_................._......._.........................._...................... fain Tapping Competition outstanding effort at the American Water Works Association (AWWA) preliminary competition held in Los Angeles, but did not make it to the finals. The national water main tapping champs were from the East Bay Municipal Utilities District, Oakland, California, with a time of 1 minute and 20.22 seconds. K congratulated SHARE THE SUCCESS PRESENTATION AT APPA. A letter from Walter Cox, ...._......__....._....................--........._...._................... ................._......................_...................................... ..... .or Share the Success Director of Santee Cooper, a utility in Moncks Corner, South Carolina, )resentation at APPA was read relative to the Share the Success presentation made by Mr. Ttional Conference Pandy at the APPA National Conference. Walter Cox, who is also President Emeritus of Clemson University, congratulated the BWL for an outstanding presentation on the Share the Success program. Rjare the Success point STATUS OF SHARE THE SUCCESS POINT TOTAL. For the first time this year, total for May topped the Share the Success point total surpassed the 400 point mark with a lie 400 point mark new high of 412 for the month of May. It was noted that the June point total may be lower due to critical areas in our total safety performance and the impact the weather may have on the heat rate during June. New measures set for the Fiscal 1989-90 Share the Success program were reviewed in detail. The measures are being divided into four broad categories, with a total of 500 points available. 3WL Safety Incentive SAFETY INCENTIVE BONUS PROGRAM. Procedures and criteria for receiving 3onus program detailed a 1 percent safety bonus under the new Safety Incentive Bonus Program were detailed by Mr. Pandy. The Safety Incentive Bonus Program, to take effect July 1, 1989, is designed to award BWL employee;; far their individual safety performance. Employees will be grouped into three classifications: (1) Field Employee, (2) Field/Office Employee, and (3) Office Employee. The Board of Commissioners approved the program on May 22, 1989. amity approves sewer SEWER RATE INCREASE EFFECTIVE JULY 1, 1989. An analysis on the recent rate increase effective sewer rate increase approved by the City Council was handed out. An July 1, 1989 example on the size of the increase and its effect on residential customers using 8 ccf per month was outlined. The approved sewer increase is 12.7 percent for the average residential customer. June 27, 1989 111 COMMISSIONERS' REMARKS tatus report on Commissioner McComb inquired about the status of a proposal to MSU for tility interconnection providing steam and electric connections. roposal to NSU General Manager Pandy reported that staff has been working on a utility interconnection proposal. It is being reviewed at the June 30 BWL Operations and Engineering meeting for finalization. Staff plans to contact MSU in the near future to make an offer. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN xcused Absences That the absences of Commissioners Evans, Hassler, and Sebolt be excused. Adopted unanimously. djo=mient On motion of Commissioner Strolle, the Board adjourned at 6:53 p.m. Mary E. S va, Secretary CA -4 ek Filed: June 30, 1989 T. Rita M. Bauman, City Clerk � r- tti; 112 July 25, 1989 Office, Board of Water and Light Lansing, Michigan Tuesday, July 25, 1989 The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belen, Jessop, McComb, Sebolt, Strolle, Williams, and Chairman Hassler -7 Absent: Commissioner Evans -1 Quorum The Secretary declared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) Invocation The Invocation was given by Chairman Hassler. Pledge of Allegiance The Pledge of Allegiance was said by all present. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER JESSOP Approval of Minutes That minutes of regular session of June 27, 1989 be approved as mailed. Adopted unanimously. Elections of Chairman Hassler announced that in accordance with provisions of the Officers and City Charter and the Rules of Administrative Procedure of the Board of Staff Appointments Water and Light, adopted May 8, 1979 and as amended, that this being the first regular meting in July and designated as the organizational meeting, that election of officers for the ensuing fiscal was now in order. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN Resolution 89-7-6 Res. 89-7-6 Election of Officers and Staff Appointments P. Hassler reelected RESOLVED, That Chairman of the Board Phillip E. Hassler, Vice aoi,man; J. Sebolt re- Chairman Jack R. Sebolt, and Chairman Pro Tem Gerald W. elected V.C.; Gerald Williams be re-elected to their present offices for the Williams reelected ensuing fiscal year, or, until their successors are elected, Chair Pro Ten whichever last occurs. J. Pandy reappointed FURTHER RESOLVED, That General Manager Joseph Pandy, Internal Gen. Mgr.; K. Willson Auditor Keilie Willson and Secretary of the Board Mary Sova be reappointed Internal reappointed for the ensuing fiscal year, or, until their Auditor; M. Sova re- successors are appointed, whichever last occurs. appointed Secy. of the Board Adopted unanimously. July 25, 1989 113 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. Cammnications A letter was received from Bill and Mary Ann Evert expressing gratitude for "fast, friendly, and knowledgeable service" provided by Board of Water and Light crews at their home. Placed on file. A letter of thanks was received from the family of Clarence Stanaway for the Board's expression of sympathy. Placed on file. 114 July 25, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-7-1 That the Secretary be authorized, by virtue of the attached Authorization to resolution, to publish a Notice of Intent to Issue Bonds publish a Notice of and Notice of Right to Petition for Referendum. Intent to Issue Bonds and Notice of Right -------------------- to Petition for Referendum These notices are required by Public Act 94 (Revenue Bond Act). The BWL must then wait forty-five (45) days during which time registered electors may file a petition requesting a referendum. This notice consists of a general statement of the purpose of the bond issue, the amount of the bond issue (not to exceed $16 million). -------------------- PENSION Res. No. 89-7-2 That Richard A. Betts, Relay Technician in EM&M, be placed Pension approved for on a monthly pension of $1 ,457. 10 effective July 2, 1989. Richard Betts He has selected Option III with the provision that after his death, if his wife, Patsy C. Betts, survives him she will receive 20% or $291 .42 per month for the rest of her life. Mr. Betts has worked for the BWL for 31 .42 years and is 55 years of age. -------------------- Res. No. 89-7-3 That James C. Case, Maintenance Mechanic in Water Produc- Early pension tion, be placed on an early reduced monthly pension of approved for Jarreas $1 ,283.44 effective July 2, 1989. He has selected Option Case VI with the provision that after his death, if his wife, Emily A. Case, survives him she will receive 60% or $770.06 per month for the rest of her life. Mr. Case has worked for the BWL for 34. 12 years and is 53 years of age. -------------------- July 25, 1999 115 PENSION (Continued) Res. No. 89-7-4 That Wallace R. Nourse, Treasurer/Controller, be placed on a monthly pension of $1 ,202.09 effective August 1, 1989. Pension approved He has selected Option III with the provision that after for Wallace Nourse his death, if his wife, Thelma O. Nourse, survives him she will receive 80% or $961 .67 per month for the rest of her life. Mr. Nourse has worked for the SWL for 16.10 years and is 62 years of age. -------------------- WATER Res. No. 89-7-5 That $4,000 be authorized for the purchase of property, briefly described as follows: Authorization to purchase property Approximately 1/2 acre, located in the east 1/2 in Clinton County for of the SE 1/4 of Section 36, Clinton County, use as a booster pump Michigan. This parcel lies north of Grand River station site for Avenue and south of the C.S. Railway and is also Watertown 1+'p• located east of Airport Road. Further, this property is being purchased from Adams Outdoor Advertising and will be used as a site for the installation of a booster pump station for Watertown Township. -------------------- Respectful submitted, Joseph Pandy, Jr. General Manager JP/bg Re: Resolution 89-7-1 116 At a regular meeting of the Board- of Water and Light of the City of Lansing, Ingham and Eaton Counties , Michigan, held on the 25th day of July, 1989, at 5:30 o'clockp .m. in the Board Room, 123 West Ottawa Street, Lansing, Michigan. PRESENT: Commissioners Belen, Jessop, McComb, Sebolt, Strolle, Williams. and Chairman Hassler. ABSENT: Commissioner Evans. The following resolution was offered by Commissioner Sebolt and seconded by commissioner Williams WHEREAS, the Board of Water and Light of the City of Lansing, Michigan (the "Board" ) desires to remodel, update and extend the life of the water supply and electric generating and distribution utilities of the City of Lansing (the "Project" ) ; and WHEREAS, the Board proposes to pay part of the cost of the Project with the proceeds of revenue bonds to be issued pur- suant to Act 94, Public Acts of 1934, as amended ( "Act 94" ) ; and WHEREAS, the Charter of the City of Lansing provides that the Board has full and exclusive management of the water, heat, steam and electrical utilities of the City of Lansing and the Board is, therefore, the governing body of the water, heat, 117 steam and electric utilities of the City of Lansing as defined in Act 94. IT IS RESOLVED BY THE BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, INGRAM AND EATON COUNTIES, MICHIGAN, AS FOLLOWS: 1 . The Secretary of the Board is hereby authorized and directed to cause the following notice to be published and prom- inently displayed once in the Lansing State Journal : -2- 118 NOTICE OF INTENTION OF THE CITY OF LANSING, MICHIGAN, BY AND THROUGH THE BOARD OF WATER AND LIGHT TO ISSUE REVENUE BONDS IN AN AMOUNT NOT TO EXCEED $16,000,000 AND NOTICE OF RIGHT TO PETITION FOR REFERENDUM THEREON TO ALL ELECTORS AND TAXPAYERS OF THE CITY OF LANSING AND OTHER INTERESTED PARTIES: NOTICE IS HEREBY GIVEN, that the City of Lansing, Ingham and Eaton Counties, Michigan, by and through the Board of Water and Light, intends to authorize the sale, issuance and delivery of revenue bonds in the principal amount of not to exceed $16,000,000 pursuant to Act 94, Public Acts of 1933, as amended, for the purpose of paying part of the cost of remodeling, updat- ing and extending the life of the water supply and electric utilities of the City of Lansing, including some or all of the following: (i) structural and turbine repairs and stability improvements to the Moores Park Dam at the Eckert Station and structural repairs to the North Lansing Dam, (ii) the installa- tion of a new potable water service to the west end of the Eckert Station and modifications to the existing house service water system, replacement of three house service water pumps, three ash sluice pumps and six cooling tower pumps at the Eckert Station, (iii) modifications to upgrade the piping, valves, pumps and equipment for the waste water treatment system at the Eckert Station, (iv) upgrade the make-up water systems of the Erickson -3- 119 station, (v) replace the flue gas discharge 'breeching between the I.D. fans and the chimney at the Erickson Station, (vi) construct a 138 kV Substation, (vii) install a new 13.2 kV distribution cable to downtown East Lansing, (viii) add a second transformer and associated distribution switch gear at the existing Enterprise 138 kV Substation, (ix) upgrade the valves, piping and controls of the rapid sand filters at the Dye Water Conditioning Plant, (x) restore some of the exterior walls and install a new facade on other portions of the exterior walls of the Dye Water Conditioning Plant, (xi) replace existing remote monitoring and controls of the high service water pumps and facilities at the Wise Complex and provide for integrated control and monitoring capabilities at the Dye Water Conditioning Plant, (xii) upgrade the Lansing area well field remote control and indication by R. F. Telemetry and integration of the controls and indication points into the computer system at the Dye water Conditioning Plant, (xiii) replace residential and commercial water meters in conjunction with the combined billing format for electric, water and steam billing and (xiv) upgrade the Eifert Booster Pumping station by installing a second pump and new water mains and adding another booster pump pumping station to the Delhi Township Water Distribution System. The net revenues of facilities of the City of Lansing for the supply and distribution of water and the generation and -4- 120 distribution of electricity, steam and steam heat will be pledged to the payment of principal of and interest on the bonds. The maximum amount of the bonds to be issued is $16,000,000. The bonds will mature in not to exceed 20 annual installments with interest at a rate not to exceed 13% per annum on the unpaid principal balance of the bonds from time to time outstanding. RIGHT TO PETITION FOR REFERENDUM THIS NOTICE IS GIVEN to and for the benefit of the elec- tors and taxpayers of the City of Lansing and other interested parties in order to inform them of the intention of the City of Lansing to sell, issue and deliver the bonds and also to inform them of the right to petition for a referendum upon the question of selling, issuing and delivering the bonds. The City of Lansing intends to sell, issue and deliver the bonds without a vote of the electors thereon, but the City of Lansing will not sell, issue and deliver the bonds until 45 days after publication of this notice. If, within the 45-day period, a petition for referendum requesting an election on the sale, issuance and delivery of the bonds, signed by not less than 10% or 15,000 of the registered electors of the City of Lansing, residing within -5- 121 the City of Lansing, whichever is less, has been filed with the City Clerk, the City of Lansing will not sell, issue or deliver the bonds unless approved by a majority of the electors of the City of Lansing voting thereon at a general or special election. This notice is given by order of the City of Lansing, by and through the Board of Water and Light, pursuant to Act 94 of the Public Acts of Michigan, 1933, as amended. Further informa- tion may be obtained at the office of the undersigned Secretary. Dated: July 26, , 1989 AAAJ As JfYoLoo' Maky'Iff.IS6vaf, Secretary Board of Water and Light of the City of Lansing -6- 122 — 2 . It is hereby determined that the above notice pro- vides information to adequately inform the taxpayers and electors of the City of Lansing of the nature of -the bonds to be issued, the obligation to be undertaken by the City of Lansing and of their right to file a petition for a referendum requesting an election on the issuance of the bonds. It is hereby found and determined that the Lansing State Journal is a newspaper of general circulation in the City of Lansing and is the newspaper reaching the largest number of persons to whom the notice is directed. 3 . All resolutions and parts of resolutions insofar as they may be in conflict herewith are hereby rescinded. YEAS: Commissioners Belen, Jessop, McComb, Sebolt, Strolle, Williams, and Chairman Hassler, NAYS: None ABSENT: Commissioner Evans. RESOLUTION ADOPTED. -7- 123 STATE OF MICHIGAN ) SS COUNTY OF INGHAM ) I, the undersigned, the Secretary of the Board of Water and Light of the City of Lansing, Michigan, do hereby certify that the foregoing is a true and complete copy of the proceedings taken by the Board of Water and Light of the City of Lansing at a meeting therein indicated, the original of which proceedings is on file in my office. Signed this 26th day of July , 1989 . . ,idta &V..' Mary a, secretary, Board of tater and Light of the City of Lansing JMW/32063/0014/AA4/ljd -8- 124 July 25, 1989 BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-7-1 approved RESOLVED, That Resolution 89-7-1 (Administrative) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER McCOMB Res. 89-7_2, 89-7-3, RESOLVED, That Resolutions 89-7-2, 89-7-3 AND 89-7-4 and 89-7-4 approved (Pension) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER BELEN Res. 89-7-5 approved RESOLVED, That Resolution 89-7-5 (Water) of the General Manager's Recommendations be approved. Adopted unanimously. UNFINISHED BUSINESS Update on Elaine Hill General Manager Pandy presented an update on the outcome of Ms. Elaine appeal Hill's water bill dispute, as previously reported to the Commissioners at the June 27, 1989 regular meeting. George Warren, attorney for Ms. Hill, has contacted the BWL Consumer Services Division to advise that she has accepted the BWL's proposal to adjust her ccf usage by 1.5 percent and to allow a 30-month payment arrangement. Mr. Warren indicated he was pleased with the manner in which his client's dispute was handled. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: Update on People PEOPLE VS. HELEN CHAVEZ. Restitution has been received from Helen ......................_......................_._... ..._...._... .._...._...... vs. Helen Chavez Chavez through the Ingham County Circuit Court. legislation amending LEGISLATION AME.... _. ._ the Public Utility Bennett Johnston (D-La.) introduced legislation amending the Public Holding Company Act Util y Holding Company Act (PUHCA) to exempt independent wholesale power generators from restrictions of the act. The Utility Working Group (UWG) , of which Consumers 'Power is a member, has made this legislation a priority for this congress. Senator Johnston recently scored a major point by arranging to introduce the bill as an amendment to a bill on the Arctic National Wildlife Refuse. The motive for this was to avoid having the legislation referred to the Banking Committee, which has jurisdiction over PUHCA. The Senate Banking Committee chair, Senator Donald Riegle (D-Mich.) , has apparently agreed with this 125 July 25, 1989 strategy. Mr. Pandy noted that the BWL has contacted Senator Riegle to urge that he assert jurisdiction over the bill. The measure does not address transmission access and other issues that concern public power. Mr. Pandy discussed other implications of deregulating generation. Status of Wildcat WILDCAT COAL STRIKES. Wildcat coal strikes which began June 12 in .......... ......__... Strikes support of strikers against Pittston Coal have idled much of the nation's coal production since June 12. Although the wildcat strike has not affected the BWL's contractual suppliers, it has affected both price and ability to get coal from the spot market. The BWL is down to a supply of 42 days, where the normal supply is 60 days. At the current rate of consumption, the BWL is losing two days of coal supply per week. The BWL has taken the following measures in response to the coal shortage: (1) all economy energy sales have been curtailed, (2) the wholesale agreement with Consumers Power Co. to expire in August will not been renewed, (3) other measures are being investigated to address this situation. Following discussion, the Commissioners urged that a press release be sent to local newspapers informing the media of the coal shortage and pricing problems and also of the local impact this could create if the strike continues. FheTg, AssistanCe ENERGY ASSISTANCE TASK FORCE INTERIM REPORT. An Executive Summary of Task Force the Interim Report of the Energy Assistance Task Force, formed by the Interim Report Michigan Department of Social Services (DSS) , dated April 1989, was handed out. The report states that DSS is looking at a $30 million reduction in their budget. A solution recommended is to lean on utilities to match DSS client payments for pre-enrollment arrears and usage over the payment cap; i.e. , "Energy providers will match client payments of 2% at the rate of $2 for each $1 received and payments of 3% at the rate of $3 for each $1 received." Consumers Power Co. , Michigan Consolidated Gas, and Detroit Edison have reportedly agreed to this plan. The Michigan Municipal Electric Association, representing the BWL and other utilities, has taken a strong position against the proposal. Following discussion, staff was requested to summarize the potential financial impact to BWL customers. Share the Success SHARE THE SUCCESS. Final numbers are not yet available on update approximately six Share the Success performance measures to close out fiscal year ending June 30, 1989. Based on preliminary data, the maximum score possible for the fiscal year is 385. Mr. Pandy noted that if the maximum points are not attained on the six pending measures, the final score would be less than 385. Purchasing Deparumnt PURCHASING DEPARTMENT VENDOR GUIDE. Copies of Purchasing Department's Vendor Guide new Vendor Guide on Conducting Business with the BWL were handed out. This guide, which outlines BWL Purchasing Department policy and procedures, will be distributed to new vendors who are trying to understand how to do business with the BWL. July 25, 1989 126 BWL ranks in top RANKING OF TYPICAL MONTHLY RESIDENTIAL AND INDUSTRIAL ELECTRIC BILLS. ten on residential A report summarizing the ranking of typical monthly residential and rates and 17th on industrial electric bills, dated January 1, 1989, prepared by Financial industrial rates Planning Director Dana Tousley was handed out for review. It was noted that BWL residential rates ranked 9th (in the top ten) out of 106 cities surveyed, and 17th out of 106 industrial rates. Summary data was taken from a national electric rate survey, conducted by Peat Marwick Main & Co. , prepared for Lincoln Electric & Omaha Public Power District. Wally Nourse leaves CASH RECEIPTS AND DISBURSEMENTS: With Treasurer/Controller Wally BWL in strong financial Nourse retiring July 31, 1989, he leaves the BWL in strong financial condition condition. Mr. Pandy remarked that Mr. Nourse's excellent service to the BWL has been very much appreciated. The Commissioners concurred. COMMISSIONERS' REMARKS Camrents by Commissioner Sebolt expressed his gratitude to the Commissioners for Commissioner Sebolt their support in his re-election to the office of Vice Chair. on his re-election as V. Chr. Commissioner McComb remarked on the excellent article in the July 1989 issue of GREATER LANSING BUSINESS MONTHLY regarding water Comments by regionalization. Cc m issioner McCcmb on article re: BY COMMISSIONER JESSOP-- Water RegionaLjaation SECONDED BY COMMISSIONER McCOMB Fxcused Absence That the absence of Commissioners Evans be excused. Adopted unanimously. Adjournment On motion of Commissioner Strolle, the Board adjourned at 6:27 p.m. A041�- �Jom Mary E. Sova Secretary Filed: July 26, 1989 Rita M. Bauman, City Clerk LAr,s,lr u CiTy CLE;�x Ju4 ; 4 3a pH &3 127 August 22, 1989 Office, Board of Water and Light Lansing, Michigan Tuesday, August 22, 1989 The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belen, Evans, Jessop, Sebolt, Strolle, Williams, and Chairman Hassler -7 Absent: Commissioner McComb -1 Quorum The Secretary declared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) Invocation The Invocation was given by Chairman Hassler. Pledge of Allegiance The Pledge of Allegiance was said by all present. BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER JESSOP Approval of That minutes of regular session of July 25, 1989 be approved as Minutes mailed. Adopted unanimously. Public Camients 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. BWL Wins Ccnmunity General Manager Pandy announced that the BWL took first place in the 1989 Corporate QiaLlenge YMCA Community Corporate Challenge for best overall team. This tournament Cup brings together employees from area businesses to compete in various sports event. In addition to winning the Challenger's Cup, the following members of the BWL Blue Team were recognized for earning other individual awards: Banner (4th Place) Men's 3 Mile Run Ord Place) Jim Farrington Jerry Steffy Karen Pier Ron Monroe James Chandler Obstacle Course Roy Peffley Karen Pier Karen Schmitz Women's 3 Mile Run Larry Wilhite Jayne Hoxie Roy Peffley August 22, 1989 128 PrWomenedicted�� dicted-Bika'Race Donna Austin Karen Schmitz Karen Pier Karen Simpson Jim Farrington Jayne 8oxie Ron Monroe Annette Belanger . d�����JL ��I� (1�t �I�c�� ��u'�' ���m- (�od'�I���> Dnug McGinnis Jim Farrington Jerry Steffy Bill Jones Cherie Watson James Chandler Karen Pier Bob Murphy �u�������� Mio�d'�c�����od�-a���'�����-�%ud ������} Doug McGinnis Donna Austin Jim Farrington James Chandler Kathy &odronm Bob Murphy Dane Stuible Karen Schmitz Annette Belanger Jodie Davis Karen Pier Jayne 8noie Homer Barker Kenneth Burch Mr' Paudy further noted that Karen Pier and Jim Chandler were the driving force behind the 8WL'n involvement in the Corporate Challenge. Employee participation in this activity was done after work hours. E. F. Scattergood System General Manager yaudy displayed the newly framed E. F. Scattergood System Achievement Amazd to be Achievement Award, together with the City Council resolution, which is displayed at Hazel Street being exhibited in the Main Office Building lobby for the next couple of IcaioingOester weeks. The award will be permanently located in the Hazel Street Training Center. Ommnisoioosareceive General Manager 9audy presented each Commissioner with a personalized 1989 FizvizoomeotalAuareoaao Environmental &nareuooy Award. This is the first award ever to be given Award out by the BWL'o Environmental Engineering Department. The award recognizes the Board's strategic planning efforts in providing service consistent with sound environmental practices. COMMITTEE OF THE WHOLE BD9ODT Oomnitteeofthe �&le Board of Commissioners August 22' 1989 Report Board of Water and Light �auoiu� 8inbi�au l) Be�eRiver Task ' Force conclusions 2) Zu�szo� �xt� The Committee of the Whole met no July 25, 1989 with the General Manager and staff to receive a briefing uu the following it Quarterly Report items: l' Conclusions of the Belle River Task Force. 2 Quarterly progress report from the Internal Auditor. Present were Commissioners Beleu' Jeayop, Hassler, McComb, Sebolt, StroIle, and Williams (Chair Pro 7em) &boout was Commissioner Dvauo' 129 August 22, 1989 Belle_._.River Task Force Report General Manager Pandy reported that as part of strategic planning, staff formed a Belle River Task Force to research and recommend the most efficient method of integrating the 150MW Belle River entitlement into the Board of Water and Light system. The Commissioners received a detailed presentation on the conclusions of the report. Major findings include: 1. Eckert units will regularly be cycled; 2. Summer shutdown of Moores Park Station may be feasible; 3. Levelized annual savings of approximately $4 million can be achieved by cycling; 4. Capital project investment of $3,133,000 is required to modify units for cycling; 5. Electric system reliability/stability will not be affected by Belle River, provided planned transmission improvements are made; and 6. Eckert Station manpower may be reduced after control upgrades are accomplished. Periodic updates will be provided to the Commissioners as future uncertainties become better defined and impacts can be more accurately assessed. An Executive Summary of the Belle River Task Force Report is filed in the Secretary's Office. Internal Audit Quarterly Report ....... Internal Auditor Kellie Willson reported on the following internal audit activities: External Audit: The auditing firm of Touche Ross & Co. is completing their final field work to conclude their Fiscal Year 1989 audit of the BWL and the pension plan. Stores Department Audit: A new approach is being taken by the external auditors in their Stores Department inventory audit. They streamlined their audit by selecting samples from items over $1,000 in value, since such items make up 85 percent of total inventory dollars. Early test count results of Stores inventory conducted June 30 found no errors showing differences of more than 5 percent. This new sampling approach will provide more meaningful information about the accuracy of Stores' inventory. Combined Billing Pr.ojec_t: The Combined Billing project team has been working on identifying and completing the tasks necessary for the successful implementation of Combined Billing. Since the reorganization of the Combined Billing project in January, 1989, and the last project update in March 1989, a more in-depth evaluation of the system was performed resulting in revisions and modifications to the initial approach August 22, 1989 130 and task scheduling concepts of the project. The project team divided Combined Billing into thirteen subsystems with each having a specific responsibility. Additional staff from user departments have been assigned to the project. The project team and supporting work groups are making progress toward implementing an effective system. Respectfully submitted, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER BELEN-- SECONDED BY COMMISSIONER JESSOP That the Committee of the Whole Report be received as submitted. Adopted unanimously. PERSONNEL COMMITTEE REPORT Personnel Camdttee Board of Commissioners August 22, 1989 Report RE: Board of Water and Light 1) Performance appraisals Lansing, Michigan for three Board- appointed positions The Personnel Committee met on August 15, 1989 to review the following 2) Discretionary Fund items: for the General Manager 1. Results of performance appraisals conducted by the Res. 89-8-18 Commissioners on the Fiscal 1989 accomplishments of the 3) Employment Agreement General Manager. for the General Manager 2. Results of performance appraisals conducted by the General Manager on the Fiscal 1989 accomplishments of the Internal Auditor and Secretary of the Board. Present for the Committee were Commissioners Jessop (Chair) , McComb and Sebolt. Commissioners Hassler and Williams were also present. After review and discussion, a consensus was reached on the results of the ratings for the General Manager, Internal Auditor and Secretary of the Board. The Personnel Committee adopted the following resolutions and recommends Board approval: Resolution 89-8-16 .. . _....................._.........._._... . .... Performance Appraisals for the General Manager, _............_..............__..._........_ ......_....................................................................__...... Internal Auditor, and Secretary of the Board WHEREAS, Performance evaluations and salary increases for the three positions reporting directly to the Board of Commissioners are administered according to the BWL Wage and Salary Plan for Non-Bargaining Unit Administrative employees; be it 131 August 22, 1989 RESOLVED, That the General Manager, Internal Auditor and Secretary of the Board are eligible to receive salary increases effective as of July 1, 1989, according to the Fiscal 1990 Performance Increase Matrix; and RESOLVED FURTHER, That the ratings for the three persons reporting to the Board of Commissioners be hereby confirmed as follows: General Manager Joseph Pandy, Jr. - Outstanding Internal Auditor Kellie Willson - Outstanding Secretary of the Board Mary Sova - Outstanding Resolution 89-8-17 Discretionary Fund for,.,..the General Kanager WHEREAS, The Board of Commissioners established a discretionary fund for business development purposes on August 25, 1987, to enable the General Manager to cover club membership, initiation fees and monthly dues ; and WHEREAS, The use and accounting of the discretionary fund is reviewed annually in accordance with generally accepted accounting principles; be it RESOLVED, That the amount of the discretionary fund for Fiscal 1990 be increased to $7,500; and RESOLVED FURTHER, That Resolution 88-8-2 be, and is, hereby rescinded. Resolution„89-8-18 gmployment Agreement for. the „General Kanaper WHEREAS, The Personnel Committee met on November 18, 1988 for preliminary discussion relative to drafting an employment agreement for the General Manager, and WHEREAS, It was the consensus of the Commissioners that additional copies of sample agreements used by other public power entities and related industry would be reviewed before proceeding further; be it RESOLVED, That the Personnel Committee is hereby directed to continue discussions on a proposed contract for the General Manager with the assurance that compliance will be maintained with the city Charter; and RESOLVED FURTHER, That the Personnel Committee is authorized to retain special counsel to represent the Commissioners and to assist with drafting the employment agreement and to take other action as deemed appropriate and necessary to implement said agreement. Respectfully submitted, E. Lane Jessop, Chairman Personnel Committee August 22, 1989 132 BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER EVANS That the Committee of the Whole Report, including Resolutions 89-8-16, 89-8-17, and 89-8-18, respectively, be approved as submitted. Adopted unanimously. 133 August 22, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-8-1 That in the absence of the General Manager, the Assistant General Manager shall be in charge of all Board operations. Corporate Quin of That in the absence of the General Manager and Assistant Camend General Manager, the below listed Directors, in the sequence in which they are listed, shall be in charge of all Board operations: 1. Director, Electric Utility 2. Director, Water Utility 3. Director, Engineering 4. Director, Steam Utility 5. Treasurer/Controller -------------------- This action is necessary due to the retirement of Wallace Nourse. Staff believed that the directors of the larger operations divisions should be in charge in the absence of the General Manager and the Assistant General Manager. This supersedes Board actions of 4-13-70, 4-9-73, 10-14-74, 7-25-77 and 3-25-86. -------------------- Res. No. 89-8-2 That the Board approve the modification to the authority to sign checks: Authorization to sign checks required not less than two (2) of the following officers e required to sign checks for the general checking account at First of America Bank, the payroll/pension checking account at Michigan National Bank and the customer deposit refund checking account at Manufacturers Bank of Lansing drawn on and after August 23, 1989. Director and General Manager Assistant General Manager Treasurer/Controller Director, Engineering Secretary of the Board August 22, 1989 134 ADMINISTRATIVE (Continued) (Res. No. 89-8-2) This action rescinds all prior resolutions. The Secre- tary of the Board is directed to certify to the banks the signatures of the officers in the above designated positions as of August 23, 1989 and notify the banks that at least two (2) of the officers designated must sign said checks or they will not be valid. -------------------- John Elashkar, Director of Engineering, replaces Wallace Nourse as a check signer. Supersedes Board actions of 1961, 1968, 2-9-70, 9-8-75, 2-17-81, 3-24-87 and 4-26-88. -------------------- Res. No. 89-8-3 That the Board approve Amendment No. 1 to ICC-CSXT-C-3396 Transportation Contract with CSX Transportation, Inc. The Amendment No. 1 to term of this Agreement will be retroactive to June 1, 1989, Transportation Con- with an expiration date of May 31, 1990. tract with CSX Transportation -------------------- Annual volume: Minimum of 90% of coal delivered to Ottawa Station during the second contract year. The volume incentive refund will be $0.50 per ton for all coal originating on the CSX with final delivery at Ottawa Station. The original contract was approved May 24, 1988 under Board Resolution 88-5-4. ADMINISTRATIVE SERVICES Res. No. 89-8-4 Authorize purchase of the estimated 12 month requirement of Style 124B Street Light Globes (approximately 1,000 globes) Purchase of street covering the period from September 1, 1989 through August light globes from 31 , 1990, from Formed Plastics, Carle Place, New York, in formed plastics the amount of $55,350. Pricing is firm through August 31, 1990. All material to be released as required. -------------------- 135 August 22, 1%9 ADMINISTRATIVE SERVICES (Continued) (Res. No. 89-8-4) The other bidder was Spirit Industries, Inc. , Lansing, Michigan ($65,500). General Electric Co. and Twenty First Plastics were invited to bid but declined. R. N. Fink Mfg. Co. was invited to bid but did not respond. -------------------- Res. No. 89-8-5 Authorize purchase of the estimated 12 month reqirem1n000 of Style 124B Street Ornamental Rings (approximately Purchase of street rings) covering the period from September 1, 1989 through nctual August 31 , 1990, from King Luminaire, Jefferson, Ohio, in Pu frna King 1ringa'T�' the amount of $40,000. Pricing is firm through August 31, 1990. All material to be released as required. -------------------- The other bidder was Demmer Corporation, Lansing, Michigan ($46,800). General Electric Co. , Spirit Industries, Inc., Trumark, Inc., and Martini-Dietrich Metals & Fasteners were invited to bid but declined. Industrial Pattern and Ameri- can Sunroof Corp. were invited to bid but did not respond. -------------------- HUMAN RESOURCES Res. No. 89-8-6 That Mr. Dorne Croley, Lin suggestion (1989-51)ker in Line t that,owith ea awarded $1 ,566.35 for his qualified radio operator at the truck radio, to use one Suggestion Aid journeyman lineworker instead of two, to isolate non- Donne Croley energized street light arc circuits. This method would eliminate calling a second crew for the isolation of non- energized street lighting. It is estimated that the BWL will save $14,913.50 the first year by using this suggestion. -------------------- August 22, 1989 136 HUMAN RESOURCES (Continued) Res. No. 89-8-7 That Mrs. Karen Furney, Clerk A in Customer Accounting, be awarded $402.67 for her suggestion (1989-196), to use a Suggestion Award to form preprinted by Information Systems Department to Karen Furney apply deposits to past due accounts in lieu of hand- written stubs. This method will decrease the amount of handling time per billing considerably and also provide the customers with a visual balance due. The evaluation agrees with this suggestion and states this method would be easily implemented. -------------------- It is estimated that the BWL will save $3,276.68 the first year by using this suggestion. -------------------- Res. No. 89-8-8 That Mr. Tully Parrish, Auxiliary Steam Production Operator at Moores Park Operations, be awarded $148.00 for his Suggestion Award to suggestion (1989-141 ) to install an alarm to indicate the TuUy Parrish air washer is in the process of becoming plugged. This method would benefit the BWL by reducing the amount of time spent maintaining the system and, further, this will pro- vide added protection for the bottom ash vacuum pump and silo. -------------------- It is estimated that the BWL will save $730.00 the first year by using this suggestion. -------------------- Res. No. 89-8-9 That Mr. George Wedel, Equipment Mechanic at the Garage, be awarded $703.00 for his suggestion (1989-177) to dis- Suggestion Auerd to continue rustproofing of BWL vehicles. According to some George Wedel manufacturers' warranties, the warranty would be voided by the use of rustproofing. -------------------- It is estimated that the BWL will save $6,280 the first year by using this suggestion. -------------------- 137 August 22, 1989 TREASURER/CONTROLLER S ecific Excess Res. No. 89-8-10 purchase the following insurance coverage: p year period Workers' Compensation Insurance for the1990 from Hall & Purchase of Specific from September 1, 1989 to September 1, and Surety Excess Workers' Can- Kennedy, Inc. representing The Aetna Casualty Company for an annual premium of $28,995 subject to adjust- pensation Lozano ments. This was the best evaluated bid of those receive d. franHa7-]. and Kennedy, Inc• -------------------- The Board's existing similar insurance acoverage annual is wit f the above agency and insurance comp Y $29,165 before adjustments. The other bidder for similar coverage was the Insurance Agency, representing MidwestE p $35,309 and Company, at a comparable annual premium representing Transamerica Insurance at a comparable annual premium of $42,000. Purchase the following insurance coverage: Boiler and Res. No. 89-8-11 year period from Machinery Insurance for the three (3) Y Purchase of Boiler September 1 , 1989 to September 1, 1992 from Hall r&aeannual Inc. representing the Home Insurance Company, and Machinery In- premium of $84,125, subject to minor adjustments. The surance fran Hall and Kennedy, Inc. The of liability for an accident would be $40 million. The deductiblesThis was theldent would best evaluated bid rom 00 to bidof those $232,07474. received. ------------------- The Board's existing similar insurance coverage is with the Lansing Insurance Agency and the Continental Insurance Company at an annual cost of $96,538. The limit of liabilityaccident range from $25000 to $309432 r an cnSO1nThe deductibles pe The other bidders for Boiler and Machinery Insurance were Mourer Foster, Inc. , representing Hartford Steam Boiler; the Lansing Mutual Agency, representing Hartford Steam Boiler; Hall & Kennedy, Inc. , representing Hartford Steam Boiler; and the Lansing Insurance Agency, representing e Company, Hartford Steam Boiler and Continental Insuranc Company. The premium bid range was Travelers Insurance from $72,000 to $186,730 for the various options. August 22, 1989 138 TREASURER/CONTROLLER (Continued) Res. No. 89-8-12 Purchase the following insurance coverage: Pension and Welfare Fund Fiduciary Responsibility Insurance for the one Purchase of Pension (1) year period from September 1, 1989 to September 1, 1990 and Welfare Find from the Lyman and Sheets Agency representing the Aetna Fiduciary Responsibility Casualty and Surety Company for an annual premium of Insurance from Lyman $18,389. This was the only bid received. and Sheets Agency -------------------- The Board's expiring similar insurance coverage is with the above agency and insurance company at an annual cost of $19,208. The annual aggregate of liability would remain the same at $10 million with a deductible of $10,000. -------------------- Res. No. 89-8-13 That the General Manager and/or one of the following designated representatives in the sequence listed below, Authority to invest be authorized to invest operating funds in such securities operating finds as permitted by law and to purchase, sell, assign and endorse for transfer, certificates representing said securities and invested in the name of the Board of Water and Light. 1. Treasurer/Controller 2. Assistant General Manager 3. Superintendent, General Accounting The Revenue Bond Act of 1933 (PA 94 of 1933, MSA 5.2731), as amended, Lansing Ordinance 18A, 18B and 26A, and BWL Resolution 80-3, govern and restrict the investment of BWL operating funds. -------------------- This is to clarify the investment authority for BWL oper- ating funds and provide a resolution for filing with the various financial institutions with which the BWL does business. A similar resolution is being prepared for the Pension trustee meeting in September, naming the designated representatives for the investment of pension funds. Supersedes Board action of 3-10-81. 139 August 22, 1989 WATER That the Board agree to serve water to proposed Water District No. 60, Delhi Township, as requested by resolution Res. No. 89-8-14 and Delhi Township of the Delhi Charter Township Board on August 1 , 1989, District No. 60 - that in accordance with the agreement between the Board and dated Glern>� Manor Phase the Charter Township of oflalpotableAugust water supply covering the furnishing II Subdivision, the Board advises officials of Delhi Town- Lots 19-37 Delhi Township, ship as follows: 1. The Board will accept Water District No. estab- lished by Township resolution on 8/1/89, and will provide a potable water supply to said district. 2. The Township will be required to make a $24,182.50 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LX) covering the furnishing o a potable water supply in Water District No. 60. d in with 4, Water Trent Board'se to bRulestandeRegulationsafor Water the Curren Service. Further, that upon receipt of the sum of $24,182.50 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to tshsagn the aforementioned agreement (supplement potable water supply in Water District. No. 60. The geographical area of Water District No. 60 is as follows: Glenmoor Manor Phase II Subdivision, Lots 19 thru 37 To provide a potable water supply within the proposed new district requires the installation of 1,125 feet of water main at an estimated cost of $20,812.50 and two (2) fire hydrants at a cost of $3,370.00. The main extension will serve 19 residential customers. fees and meter set charges 72 0 will One-time connection revenue is $3, to $7,581.00. Estimated annual Water mains to be installed in Fall of 1989 following the receipt of the Township's non-refundable contribution-in- aid of construction and the signing August 22, 1989 140 WATER (Continued) Res. No. 89-8-15 That staff be directed to prepare information, data, and exhibits for an informational brochure and for a Public Staff directed to Hearing on water rate increase on a date determined by prepare informational staff, subject to Board approval (at least 45 days after brochure for ureter filing a statement explaining new rates and charges rate Public Hearing together with a Notice of Public Hearing). -------------------- The Commissioners wish to communicate the need for a water rate increase as fully and openly as possible to the public, BWL water customers and the media. --------------------- Respectfull submitted, Joseph Pandy, Jr. General Manager JP/bg 143 August 22, 1989 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER JESSOP s. 89-8-1 through RESOLVED, That Resolutions 89-8-1, 89-8-2 and 89-8-3 F-&3 approved (Administrative) , of the General Manager's Recommendations be approved. With regard to Resolution 89-8-1, Commissioner Belen suggested that the chain of command also be noted on the organizational chart. Adopted unanimously. BY COMMISSIONER WILLIAMS -- SECONDED BY COMMISSIONER JESSOP s. 89-&A and 89-8-5 RESOLVED, That Resolutions 89-8-4 and 89-8-5 (Administrative proved Services) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN s. 89-8-6 through RESOLVED, That Resolutions 89-8-6, 89-8-7, 89-8-8, and 89-8-9 -8-9 approved (Human Resources) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER EVANS s. 89-8-10 through RESOLVED, That Resolutions 89-8-10, 89-8-11, 89-8-12, and -8-13 approved 89-8-13 (Treasurer/Controller) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN s. 89-8-14 and RESOLVED, That Resolutions 89-8-14 and 89-8-15 (Water) of the -&-15 approved General Manager's Recommendations be approved. Adopted unanimously. There being no objection, an additional resolution (No. 89-8-19) was included to the General Manager's Recommendations. August 22, 1989 144 BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELEN Res. 89-8-19 approved RESOLVED, That Resolution 89-8-19 (Treasurer/Controller- Addendum item) of the General Manager's Recommendations be approved as presented. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: STATUS OF MEIJERS ELECTRIC SERVICE. The BWL has energized a temporary _ ...................._................................_.........._........._......._.- service to the Meijers additional warehouse on Grand River Avenue in Watertown Township on August 3. Permanent electric service is expected to he installed in a couple of months. COAL SUPPLY STATUS. At the July 25 Board meeting, the Commissioners .. ............._........................................................ . were notified of the wildcat coal strikes in support of strikers against Pittston Coal. As an update, Mr. Pandy reported that the BWL currently has a 41 day supply based on a system burn of 3,300 tons/day. Substantial coal is on order--approximately 34,500 tons this week and sufficient on order to bring the supply up to 48 days by September 10. The following coal saving efforts being initiated by the Electric Utility were outlined: Phase I - Commencing August 26, the BWL will be buying approximately 660 MWH from Consumers Power Co. , provided their cost is within economic guidelines. A savings of approximately 300 tons of coal per week is anticipated from this purchase. Phase II - If the BWL's inventory falls below 40 days or the inability to purchase spot market coal materializes, off-peak non- displacement energy would then be purchased on a nightly basis. This would be slightly higher in cost and would have to be monitored. An approximately 240 MWH could be purchased on a nightly basis, saving 100 tons of coal daily. Mr. Pandy handed out a copy of an August 22, 1989 article from THE WALL STREET JOURNAL, entitled: "Pittston Chief Digs in Against UMW (United Mine Workers) ." Indications are that UMW leadership intends to keep negotiating with Pittston until Labor Day. If agreement is not reached, there may be more labor unrest. 145 August 22, 1989 Commissioner Williams noted that this would be an appropriate time for the Committee of the Whole to review the BWL's policy on coal supply. The policy should clearly address stockpiling measures to be taken in the event of coal strikes. Staff will review the policy and present it to the Commissioners for discussion. SALES FOR RESALES. A report on sales for resale over the last five . ........ . ...... .... ................................ fiscal years was '.landed out. In Fiscal 1989, a gross profit of million (less fuel cost) was earned by selling wholesale power to others. SHARE THE SUCCESS PAMPHLETS. Copies of Fiscal 1990 Share the Success (STS) booklets detailing STS goals and performance measures were handed out. Mr. Pandy noted that new goals for the Electric, Water and Steam cost per unit are set 3.5% below budget for Fiscal 1990. The new goal for Beat Rate is comparable to 1989, adjusted to Fiscal 1990 planning. The bases and goals for these measures will be adjusted monthly according to established charts to reflect changes in sales that go above or below the BWL's 1990 budget. Mr. Pandy clarified that in the ,7uly, 1989 issue of the STS UPDATE, a projected STS payment of $1,289,353 was reported--based on a budgeted figure. The actual payment will be $1,161,579, resulting in a net savings to the BWL in the amour. of $2,853,090. STEAK SUPPLY AGREEMENT NEGOTIATIONS WITH BOC. Good progress is being made on negotiations wit I.h BOC for a new Steam Supply Agreement. Discussions are -aking place relative to going with a concept of an industrial rate schedule with a demand charge and an energy charge. This would place the steam utility in a more consistent practice similar to what is being done by other utilities. In the past, the BWL had: a contractual commitment with BOC to taste a percentage of the plant cost. Once details of the Steam Supply Agreement are finalized, a recommendation will be brought before the Commissioners for approval. DISCONTINUANCE OF KOSITCHEK'S HIGH PRESSURE (H.P.) _STEAM SERVICE. The Steam Utility is recommending the discontinuation of a nigh pressure steam service which serves Kositchek's Men's Apparel, who uses the steam for a clothes press. Annual operating expenses incurred on this service significantly exceeds the net revenue received. An incentive being proposed is to offer the customer one year of calculated savings to the BWL for discontinuing the high pressure steam service. The customer, however, would be required to continue to utilize low presure steam for heating their facility and to purchase a se-if-contained electric press. August 22, 1989 146 TEN LARGEST CUSTOMERS. A report of the BWL's ten largest customers __..... .................................__...... during Fiscal 1989 was handed out. The list is broken out by electric, water and steam--both in dollars and units in sales. It was noted that B.O.0 (G.M. Div.) heads the list with the State of Michigan coming in second. MICHIGAN PUBLIC POWER AGENCIES TO INTERVENE IN F.E.R.0 PROCEEDINGS... ......... ..... Assistant General Manager Joseph Wolfe reported that the Michigan Public Power Agency (MPPA) , the Michigan Municipal Electric Association (MMEA) , Michigan South Central Power Agency (MSCPA) and Wolverine Power Supply Cooperative are all intervening in proceedings being held by the Federal Energy Regulatory Commission (FERC) . This case involves Consumers Power Co. (CPCo) in their attempts to transfer ownership of their Palisades plant to another newly formed company called Palisades Generating Co.--partly owned by CPCo and Bechtel Power Corporation. MPPA, MMEA, MSCPA and Wolverine Cooperative viewed this as an opportunity to try to gain access to CPCo's transmission system. Further update will be presented to the Commissioners with a request for their support in the cost of this intervention. UPDATE ON THE LICENSING OF HYDRO DAMS. The BWL is continuing to pursue ........ ..... ............ its licensing efforts with FERC for the Moores Park and North Lansing Hydros. With respect to the North Lansing Hydro Dam, several alternatives have been evaluated to conform to the requirements of FERC's regulations. The lowest cost alternative for the repair of the drum gates is approximately $600,000. Sufficient funds have been allocated in the capital budget for this project. The main expense is building the cofferdam to isolate the dam. Mr. Pandy noted that he simply wanted the Commissioners to be aware of the least cost alternative. A new application will be submitted to FERC indicating that the BWL has opted for one of the alternatives studied. This should improve the BWL's chances of securing a hydro license. [Commissioner Strolle left the meeting at 6:15 p.m.] PROPOSED WATER RATE INCREASE DISCUSSION. General Manager Pandy and _ .... _ Treasurer/Controller Tousley presented the following tentative water rate increase schedule: • 9/26/89 Committee of the Whole to review rate design proposal. ® 9/26/89 Commissioners to set date for public hearing at regular Board meeting. ® 9/27/89 Staff to file public hearing documents and publish notice of public hearing. • 11/14/89 Public hearing regarding water rate increase. • 11/28/89 Approval of rate increase at regular Board meeting. 0 1/01/90 Rate increase effective 147 August 22, 1989 Staff solicited Commissioner ideas and input to be included in their presentation to the Committee of the Whole on September 26. Commissioner Hassler suggested the following guidelines in designing rates: 1. Reduce the rate of return to around 5.5% 2. No double digit increases 3. Rate increases to be one year apart 4. Borrow money from the Electric Utility 5. Increase connection fees 6. Add appropriate communication to the schedule [Commissioner Evans left the meeting at 6:50 p.m.] BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER BELENpp Excused Absences That the absences of Commissioners McComb and Sebolt be excused. Adopted unanimously. Adjourrnmt On motion of Commissioner Jessop, the Board adjourned at 7:06 p.m. ' Mary E. va, Secretary Filed: August 4,. 1989 Rita M. Bauman, City Clerk SeptFnber 26, 1989 148 Office, Board of Water and Light Lansing, Michigan Tuesday, September 26, 1989 The Board of Commissioners met in rescheduled regular session at 6:40 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belen, Evans, Jessop, McComb, Sebolt, Strolle, Williams, and Chairman Hassler -8 Absent: None. Quorun The Secretary e!eclared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) NOTICE RESCHEDULED REGULAR MEETING Rescheduled Meeting The starting time of the regularly scheduled meeting of the Board of Water and Light Commissioners of the City of Lansing, Michigan, is hereby being delayed to enable the Commissioners to meet as a Committee of the Whole at 5:30 p.m. The regular Board Meeting will convene immediately following the Committee of the Whole meeting. Date of Meeting: September 26, 1989 (unchanged) Rescheduled Time: From 5:30 p.m. to approximately 6:15 p.m. Place: Board Room, Second Floor 123 W. Ottawa Street Lansing, Michigan Posted: September 21, 1989 Certified by: BOARD OF WATER AND LIGHT Mary E. Sova, Secretary Act 267, PA'76 Telephone 371-6033 Invocation and The Invocation and Piecge of Allegiance was given by Chairman Hassler. Pledge 149 September 26, 1989 BY COMMISSIONER HASSLER-- SECONDED BY COMMISSIONER BELEN Minutes Amended That the second paragraph of page 147 of the August 22, 1989, regular meeting minutes be amended to reflect two additional guidelines suggested to staff in their water rate design: Note: (New language is capitalized.) 1. Reduce the rate of return to around 5.5% 2. No double digit increases 3. Rate Increases to be one year apart 4. Borrow money from the Electric Utility 5. Increase connection fees 6. Add appropriate communication to the schedule 7. ELIMINATE THE SUBURBAN SURCHARGE OVER TIME 8. ESTABLISH GOAL OF PARITY RATE OF RETURN FOR ALL RATE CLASSES Approval of Further, that the minutes be approved as amended. Minutes as Amended Adopted unanimously, as amended. CHAIRMAN HASSLER ANNOUNCED THAT MEMBERS OF THE PUBLIC WILL BE AFFORDED THE Public Cements OPPORTUTITTY 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. COMMITTEE OF THE WHOLE REPORT September 26, 1989 Camdttee of the Board of Commissioners Whole Report RE: Board of Water and Light Proposed Water Lansing, Michigan Rate Schedules The Committee of the Whole met this afternoon to review and deliberate alternative water rate increase schedules that will provide revenues necessary for a financially sound water system operation. r Present were Commissioners Williams (Chair 'Pro Tem) , Beien, Evans, Jessop, Hassler, McComb, Sebolt, and Strolle. Sep"ber 26, 1989 150 By direction of the Board on August 22, 1989, staff has designed new water rate schedules which will produce approximately $1,687,766 of additional annual revenue over a two-year period, amounting to an overall billed revenue increase of approximately 13.1%. The revenue increase is necessary to avoid a projected cash flow deficit caused by capital expenditures for improvements to the water system, since the last rate increase adopted October 28, 1986 and effective November 12, 1986. The anticipated effective date of the proposed water rate schedules is January 1, 1990. The Committee of the Whole presents the following resolution with the recommendation that it be adopted: Resolution 89-9-19 Res. 89-9-19 _....._ ............_............................. SETTING A PUBLIC HEARING DATE FOR Setting Public Hearing PROPOSED WATER RATE SCHEDULES Date for Proposed Water Rate Schedule - I. RESOLVED, That the proposed water rate schedules as listed November 14, 1989 below and detailed in "Attachment A" be made the subject of a public hearing prior to further consideration by the Board of Commissioners. Rate No. 1 - Residential Service Rate No. 2 - General Service Rate No. 3 - Water System Connection Fees and Service Installation Charges Rate No. 4 - Fire Services and Fire Hydrant Charges 2. That a public hearing to solicit public input on this matter be set for Tuesday, November 14, 1989, at 5:30 p.m., in the Board of Water and Light Office Building, 123 West Ottawa Street, and that the Secretary of the Board be directed to file with the City Clerk, as required in the City Charter, information regarding pending changes in the rate structures. Respectfully submitted Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER McCOMB Committee of the That the Committee of the Whole Report, including Resolution Whole Report 89-9-19, be approved as submitted. Adopted Adopted unanimously. 151 September 26, 1989 Donald Hines speaks Mr. Donald Hines, representing the Lansing Regional Chamber of Commerce RE: Proposed Water Industrial Council, spoke relative to the proposed water rate schedules to Rate Schedules be considered at the public hearing on November 14, 1989. He expressed concern with the alternative rate option selected by the Commissioners for the four rate classes. He urged the Commissioners to consider an adjustment in the water rate structure that would achieve a parity rate of return for all rate classes during the first year of the increase. Staff to meet with General Manager Pandy mentioned that the rate option selected attempts to Donald Hines respond to the parity issue. Following lengthy discussion, it was agreed that staff would meet with Mr. Hines to review various models addressing the parity issue and to clarify his concerns with the proposed rate schedules. Commissioner Hassler reminded that the purpose of the public hearing is to receive input on the proposed rates from the public before a final decision is made on their adoption. PROPOSED RATES - ATTACHMENT A BOARD OF WATER AND LIGHT Effective LANSING, MICHIGAN RESIDENTIAL WATER SERVICE - RATE NO. 1 Availability - This rate is available to any single family residence or residential duplex served by one meter. Separately metered lawn sprinkling systems used for individual residential properties are also covered by this rate. Monthly Rate Shall be computed as follows: Customer Charge: $4.25 per customer per month, and Commodity Charge: Effective 1-1-90 $0.96 per 100 cubic feet used. Effective 1-1-91 $1.05 per 100 cubic feet used. Power and Chemical Cost Adjustment - The power and chemical cost adjustment shall consist of an increase or decrease of 0.1 cents per CCF billed for each 0.1 cent increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5 cents per CCF. The cost per CCF for each billing period shall consist of the weighted average cost of chemicals, electricity, steam and oil used in pumping and treatment facilities during the period. Period shall be defined as follows: Monthly bill - one month period preceding the month billed by two months. Bimonthly bill - two month period preceding the month billed by two months. Quarterly bill - three month period preceding the month billed by two months. Suburban Surcharge - For all residential customers situated outside the boundaries of the City of Lansing, a 10 percent surcharge shall be applied to the total of the customer charges and commodity charges including any power and chemical cost adjustment. Minimum Charge - Minimum charge per month shall be the above customer charge. Tax Ad.iustment - 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, operation, or the production and/or sale of water, monthly bills will be increased to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Application Charge - A $6.00 charge shall be added to the first regular bill for all customers turning on service at a residence irrespective of prior service with the BWL at a different address. Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance of the current month's 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's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. PROPOSED RATES - ATTACHMENT A BOARD OF WATER AND LIGHT Effective LANSING, MICHIGAN GENERAL SERVICE WATER - RATE NO. 2 Availability - This rate is available to any customer served on the BWL's water system. Service taken under this rate is not available for resale. Monthly Rate - Shall be computed as follows: Customer Charge per customer per month: 5/8" meter $4.25 3" meter 95.63 3/4" meter 5.95 4" meter 170.00 1" meter 10.63 6" meter 340.00 1 1/2" meter 24.65 8" meter 595.00 2" meter 40.38 10" meter 807.50 Commodity Charge: Effective 1-1-90 $.96 per 100 cubic feet for the first 2000 cubic feet used, and $.91 per 100 cubic feet for all use greater than 2000 cubic feet. Effective 1-1-91 $1.05 per 100 cubic feet for the first 2000 cubic feet used, and $0.96 per 100 cubic feet for all use greater than 2000 cubic feet. Power and Chemical Cost Adjustment - The power and chemical cost adjustment shall consist of an increase or decrease of 0.1 cent per CCF billed for each 0.1 cent increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5 cents per CCF. The cost per CCF for each billing period shall consist of the weighted average cost of chemicals, electricity, steam and oil used in the BWL's pumping and treatment facilities during the period. Period shall be defined as follows: Monthly bill - one month period preceding the month billed by two months. Bimonthly bill - two month period preceding the month billed by two months. Quarterly bill - three month period preceding the month billed by two months. Suburban Surcharge - For all general service customers situated outside the boundaries of the City of Lansing, a 10 percent surcharge shall be applied to the total of the customer charges and commodity charges including any power and chemical cost adjustment. Minimum Charge - Minimum charge per month shall be the above customer charge. Tax Adjustment - 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, operation, or the production and/or sale of water, monthly bills will be increased to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Application Charge - A $6.00 charge shall be added to the first regular bill for all customers turning on service at a location irrespective of prior service with the BWL at a different address. Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance of the current month's 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's latest edition of Rules and Regulations for Water Service which are incorporated herein by this PROPOSED RATES - ATTACHMENT A BOARD OF WATER AND LIGHT Effective LANSING, MICHIGAN WATER SYSTEM CONNECTION FEES AND SERVICE INSTALLATION CHARGES - RATE NO. 3 System Connection Fees - The following schedule of fees shall apply to all new water service connections made to mains. This fee shall not apply to active services which are being replaced. Size Service Schedule Connection to Main of Fees 3/4" Effective 1-1-90 Effective 1-1-91 $ 500.00 $ 560.00 1" 1 1/2" 600.00 672.00 800.00 896.00 2" 950.00 1,064.00 3" 1,350.00 1,512.00 4" 1,700.00 1,904.00 6" or larger 2,450.00 2,744.00 The above system connection fee shall be paid at the time application is made to have the service installed from the curb box to the building. Service Installation Charges - All water services 2 inch and less shall be installed from the water main to the building in accordance with the following schedule of charges: From water main to curb box: Size Service Schedule of Line Installed Charges 3/4" Effective 1-1-90 Effective 1-1-91 1" $500.00 $560.00 1 1/2"ll 600.00 672.00 800.00 896.00 2" 1,000.00 1,120.00 The above charge shall be paid at the time application is made to have the service Installed from the main to the curb box. From the curb box to the building: Size Service Schedule of Charges Line Installed Per Linear Foot 3/4" $8.75 1 9.25 1 1/2" 10.50 2" 11.00 The above charge shall be paid at the completion of the installation. All water services greater than 2 inch, all multiple services or services replaced or revamped at customer's request, shall be installed at cost (time and material including indirect charges and applicable system connection fee). PROPOSED RATES = ATTACHMENT A (continued) BOARD OF WATER AND LIGHT Effective LANSING, MICHIGAN WATER SYSTEM CONNECTION FEES AND SERVICE INSTALLATION CHARGES - RATE NO. 3 Other Charges - In addition to the above system connection fees and service installation charges, the following charges will be added when applicable: 1. Surface Restoration - The customer shall be charged for all necessary surface restoration including, but not limited to, pavement or sidewalk replacement, lawn work, and any sand backfill. 2. Winter Construction - Services installed between December 1 and March 31 shall be subject to a charge of $3.00 per linear foot installed from the curb box to the building. 3. Additional Service Footage - Water service shall be installed in the shortest and most direct manner from the water main in the street, to a point immediately inside the exterior building wall fronting the street. Where it is necessary to enter the building at any other location, an additional $1.00 per linear foot will be charged for all footage installed beyond the front building line. The water service must end either in a full basement or above the floor in a building having no basement. 4. Outside Meter - Where required, underground water meter pits will be installed in accordance with the following schedule of charges. Size of Meter Pit Service Charge 3/4" $185.00 ill 226.00 1 1/2" 720.00 2" or larger Time and Material 5. Sleeve Under Floor - Where a customer installs a sleeve under the floor and the BWL installs a pipe within the sleeve, the charge for this pipe will be $1.00 per linear foot. Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance of the charges billed under this rate shall be added to any bill which is not paid within thirty (30) days from the date of billing. Customer Requested Remote Reading Register - $25.00 fee - The BWL, where possible, will install a remote reading register on an existing water service based upon customer request and payment of the fee. Rules and Regulations - Service under this rate is subject to the BWL's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. PROPOSED RATES - ATTACHMENT A BOARD OF WATER AND LIGHT Effective LANSING, MICHIGAN FIRE SERVICES AND FIRE HYDRANT CHARGES - RATE NO. 4 Fire Services - A fire service line will be installed from the water distribution main to a fire hydrant(s) or a customer's detector check valve in accordance with the schedule of charges for service installations and system connection fees (Rate 3). The location of the detector check valve shall be determined by the Water Distribution Engineering Department. Fire service lines shall be used for fire protection purposes only. No additional charge will be made for water used for testing and fire purposes. The customer shall maintain the detector check valve and fire protection system connected thereto in good condition in compliance with Section 34-9, Repair and Protection of Equipment, of the Code of the City of Lansing, Michigan. Fire Service Charges - Water supply and maintenance of a fire service line shall be provided in accordance with the following schedule of charges: Size Fire Service Monthly Charge 4" or smaller $ 31.00 6" 61.00 8�0 106.00 10" 12" 192.00 253.00 Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance of the current month's fire service charges shall be added to any bill which is not paid on or before the due date. Fire Hydrant Charges - Water supply and maintenance of public and private fire hydrants shall be provided for an annual charge of $168.00 per hydrant. Rules and Regulations - Service under this rate is subject to the BWL's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. September 26, 1989 152 September 26, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-9-1 Authorize retaining the professional services of G. W. Fauth & Associates, Inc. of Alexandria, Virginia, to conduct Authorization to a cost/benefit analysis of private railroad equipment retain G. W. Fauth ownership in the amount of $17,500. & Associates to conduct cost/benefit This study will analyze capital and operating costs of the analysis of private BWL owning its own railroad cars for shipping coal from the railroad equipment coal mines in east Kentucky to Erickson Station and will ownership determine the rail freight rate necessary for BWL to save in delivered cost of coal. -------------------- The other bidders were Long Term Contract Consultants, Inc. ($22,500); Reebie Associates ($23,950); L. E. Peabody & Associates, Inc. ($24,600); and Frederick J. Murrell, P.A. ($32,500). -------------------- Res. No. 89-9-2 That it be noted that copies of the audit reports were filed with City of Lansing officials by Touche Ross and Co. on FY 1989 Audit September 15, 1989. received - copies to be That the audit of the Board of Water and Light's (BWL) financial filed with statements covering fiscal year 1989 conducted by Touche Ross State Treasurer and Co. be received and placed on file. - Audit to be published in That the audit of the financial statements of the Plan for State Journal Employees' Pensions of the Board of Water and Light for fiscal year 1989 be received and referred to the Personnel Committee. That the Secretary of the Board be requested to file copies of both audit reports with the State Treasurer as required by law. That a condensed copy of the BWL audit be published in The State Journal. That it be noted the external auditors found no significant items which warranted submission of a management letter. -------------------- 153 Septanber ?6, il�b�) ADMINISTRATIVE SERVICES Res. No. 89-9-3 Authorize purchase of the estimated 3 year requirement of analytical chemical services of water treatment at Moores Park Pturchase of Station, Ottawa Station, Erickson Station, and Eckert Station analytical chemical from Nalco Chemical Co. , Youngstown, Ohio, in the amount of services for water $9,911 per year. Pricing includes an estimated annual 5% treatment at power increase for inflation. plants frcm Falco Chemical Co. -------------------- The other bidder was Betz Laboratories, Inc. , Trevose, PA ($29,715). Calgon Corporation, Cincinnati, OH, was invited to bid but declined. -------------------- Res. No. 89-9-4 Authorize purchase of the estimated 3 year requirement of chemicals for water treatment at Moores Park Station from Betz Ptachase of chemicals Laboratories, Inc. , Trevose, PA, in the amount of $21,823 for water treatment per year. Pricing includes an estimated annual 58 increase for at %ores Park Sta- inflation. tion from Betz Laboratories -------------------- The other bidder was Nalco Chemical Co. , Youngstown, OH ($35,099). Calgon Corporation, Cincinnati, OH, was invited to bid but declined. -------------------- Res. No. 89-9-5 Authorize purchase of the estimated 3 year requirement of chemicals for water treatment at Ottawa Station from Nalco PtII'chase of chemicals Chemical Co. , Youngstown, OH, in the amount of $2,692 per year. for water treatment Pricing includes an estimated annual 5% increase for inflation. at Ottawa Station Nalco was evaluated as the best evaluated bidder for Ottawa frcm [Nalco Chemical Station in order to standardize the chemical vendor for Eckert Co. and Ottawa Stations. -------------------- The other bidder was Betz Laboratories, Inc. , Trevose, PA ($550.00). Calgon Corporation, Cincinnati, OH, was invited to bid but declined. -------------------. Sep�enber 26, 1989 154 ADMINISTRATIVE SERVICES (Continued) Res. No. 89-9-6 Authorize purchase of the estimated 3 year requirement of chemicals for water treatment at Erickson Station from Nalco Purchase of chemicals Chemical Co. , Youngstown, OH, in the amount of $68, 184 per for water treatment year. Pricing includes an estimated annual 5% increase for at Erickson from Nalco inflation. Chemical Co. -------------------- The other bidder was Betz Laboratories, Inc., Trevose, PA ($69,653). Calgon Corporation, Cincinnati, OH, was invited to bid but declined. -------------------- Res. No. 89-9-7 Authorize purchase of the estimated 3 year requirement of chemicals for water treatment at Eckert Station from Nalco Purchase of chemicals Chemical Co. , Youngstown, OH, in the amount of $39,330 per year. for water treatment Pricing includes an estimated annual 5% increase for inflation. at Eckert from Nalco Chemical Co. The other bidder was Betz Laboratories, Inc., Trevose, PA ($41 ,479). Calgon Corporation, Cincinnati, OH, was invited to bid but declined. -------------------- HUMAN RESOURCES Res. No. 89-9-8 That Messrs. Baker, Cater, Demorest, Allison and Scott, the Utility Crew II at Electric Production Maintenance, be awarded Suggestion awards to: $913.72 (to be divided evenly) for their suggestion (1989-157) , Scott Mker, Delbert to create a permanent mounted platform for the circulating Cater, Joseph Denorest, water pumps at Erickson Station. This method would benefit the Dale Allison and BWL by creating a solid and level foundation on which the pump Carlie Scott will run more efficiently. Also, this will facilitate installa- tion and maintenance of the pump by decreasing the amount of time between necessary maintenance. -------------------- By using this suggestion, it is estimated that the BWL will save $8,387.20 the first year. -------------------- 155 September 26, 1989 HUMAN RESOURCES (Continued) Res. No. 89-9-9 That Ms. Inez Keusch, Clerk B in Customer Services, be awarded $392.97 for her suggestion (1989-198), to place an account Sugestion auerd to status indicator on form 714 which is used to post vendor Inez Keusch payments from Social Services. This would benefit the BWL by reducing the amount of time spent manually searching for the closed account information and eliminate multiple transfers and refunds due to erroneous postings. -------------------- By using this suggestion, it is estimated that the BWL will save $3,179.68 the first year. -------------------- Res. No. 89-9-10 That Mr. John Kuipers, Construction Mechanic Leader at Construction Services, be awarded $126.70 for his suggestion Suggestion award to (1989-180) , to purchase corner protectors to be installed on John Kuipers the corners of all wooden tool boxes. This method would benefit the BWL by eliminating a potential safety hazard and prolonging the life of the wooden boxes. -------------------- By using this suggestion, it is estimated that the BWL will save $517.00 the first year. -------------------- Res. No. 89-9-11 That Mr. Kenneth Pung, a Maintenance Mechanic at Electric Suggestion award to Production Maintenance, be awarded $82.45 for his suggestion Kenneth Pmg (1989-94) , to cut an inspection hole in the top of the coal belt guard. This method would benefit the BWL by reducing the amount of time needed to access the belts and save at least 20 hours per year. -------------------- By using this suggestion, it is estimated that the BWL will save $329.80 the first year. -------------------- September 26, 1989 156 TREASURER/CONTROLLER Res. No. 89-9-12 That the BWL obtain an unsecured letter of credit in the amount of $817,220 from First of America Bank-Central (FOAB-C) subject Authorization to obtain to the terms and conditions set forth in FOAB-C's commitment an unsecured letter of letter dated August 14, 1989 (attached). This letter of credit credit from First of is necessary to satisfy the State deposit requirements for the America Bank-Central Lake Lansing Landfill site. (See Attachment B.) to satisfy state de- posit requirements -------------------- for Lake Lansing Landfill Site This is a follow-up to Resolution 89-1-6 authorizing a $20,000 cash deposit. The State has renewed the Lake Lansing Landfill license and under the new legislation we have four options to satisfy the $817,220 deposit requirement: 1) cash bond, 2) insurance company bond (not available), 3) letter of credit, or 4) assigned certificate of deposit. The letter of credit option will provide the greatest liquidity and least cost to the Board. Upon filing with the State, we will request the return of our $20,000 deposit. -------------------- Res. No. 89-9-13 That the attached resolution authorizing the sale of up to $14 million Revenue Bonds (Series 1989A) and up to $3 million Resolution authorizing Revenue -Bonds (Series 1989B) to provide necessary funds to sale of Revenue Bonds finance certain improvements and additions to the electric and to finance improvements water system be adopted. (See Attachment c.,1 to electric and uater systems -------------------- Res. No. 89-9-14 WHEREAS, the Board has Series 1973 and Series 1976 Revenue Bonds outstanding in the amount of $4,000,000 plus interest, and Resolution RE: Defeasance of Out- WHEREAS, the Board's Financial Advisor, First of Michigan, with standing Bonds the concurrence of Bond Counsel, has recommended the defeasance (Ordinance 18A) of Ordinance No. 18A, as amended, pursuant to which the existing bonds were issued, and WHEREAS, staff agrees with this recommendation. IT IS RESOLVED, That Ordinance No. 18A, as amended and supplemented by Ordinance No. 18B and Ordinance No. 26A, pursuant to which the outstanding revenue bonds were issued, be defeased by depositing sufficient cash and securities into an escrow account to pay the remaining bond principal and interest when due. That staff be directed to request City Council to amend Ordinance No. 18A as proposed by Bond Counsel. That the General Manager and Treasurer/Controller be authorized to take all necessary actions to defease Ordinance No. 18A as amended. -------------------- 157 September 26, 1989 TREASURER/CONTROLLER (Continued) Res. No. 89-9-14 The enclosed attachments provide details relative to the defeasance of outstanding bonds. (See AttachmentD. ) -------------------- Res. No. 89-9-15 Purchase the following insurance coverage for the premium and term indicated: Annual Authorization to purse Property/ Premium Term Fire Liability, Auto and Crime From Lyman & Sheets Agency representing: Insurance from St. Paul Fire & Marine Co. Property/Fire $282,828* 3 yr various carriers Marine/EDP/Contractor Equip. 19,366 3 yr From Lansing Insurance Agency representing: National Union Fire Ins. : $ 5 million General Liability 418,708 1 yr 10 million Umbrella Liability 111 ,000 1 yr Railroad Protective Liability 750 1 yr Lexington Insurance Co.: $5 million Umbrella Liability 55,080 1 yr New Hampshire Insurance Co. : Auto Liability & Comprehensive 63,450* 1 yr Contractor Equipment 10,927* 1 yr From Hall and Kennedy, Inc. representing: Hartford Fire Insurance Co. : Crime, Public Employee Bond 2,954 2 yr Total Premium: $965,063 *Subject to retroactive adjustment. -------------------- This combination is the lowest and best evaluated bid of several bids received. Some contractors' equipment will have double coverage but the above combination is still the best value. The BWL's expiring coverages are with the Lansing Insurance Agency and Hall and Kennedy, Inc. at an annual premium of $1 ,042,526. Other bidders were Hall and Kennedy, Inc. representing Home Insurance, et al, - Property/Fire ($322,923); Lansing Insurance Agency representing Cigna - Property/Fire ($331.,540); Lyman and Sheets Agency representing several liability and auto carriers. -------------------- September 26, 1989 158 WATER Res. No. 89-9-16 That the Board accept a revision to Water District No. 58. This revision amends Resolution No. 89-6-20, adopted by the Board on Delhi Township June 27, 1989. (Amended language is stricken through, revised Water District language is underlined, as follows: ) NO. 58 revised (Grovenburg That the Board agree to serve water to proposed Water District Road area) No. 58, Delhi Township, as requested by resolution of the Delhi Charter Township Board on June 20, 1989, 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. 58 established by Township resolution on June 20, 1989, and will provide a potable water supply to said district. 2. The Township will be required to make a $74TS@3T84 $77, 154.65 non-refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LVIII) covering the furnishing of a potable water supply in Water District No. 58. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $,7};593184 $77, 154.65 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LVIII) to furnish a potable water supply in Water District No. 58. The geographical area of Water District No. 58 is as follows: Beginning on Grovenburg Road at the south end of Grovenburg Farms No. 2 Subdivision thence south along Grovenburg Road 47}38 1 ,130 feet, thence Grovenburg Woods Subdivision, Phase I, Lots 1 thru 30. To provide a potable water supply within the proposed new district requires the installation of 3 958 3,355 feet of water main and seven (7) fire hydrants at an estimated cost of $967688r84 $99,854.65 axd-seven-E44-fiEe-kydEante-at-a-eest e€-$44,796�99. 159 September 26, 1989 WATER (Continued) Res. No. 89-9-16 The main extension will serve 40 residential customers. One- time connection fees will amount to $15,960.00. Estimated annual revenue is $7,820.00. Water mains to be installed it-gummeE-e€ during 1989 following the receipt of the Township's non-refundable contribution-in- aid of construction and the signing of the agreement. -------------------- Water District No. 58 is being revised to reflect a new route on Grovenburg Road. This revised route will allow extension of a primary feeder main, and enhance the reliability of water service to this area. -------------------- Res. No. 89-9-17 That the Board agree to serve water to proposed Water District No. 61 , Delhi Township, as requested by resolution,of the Delhi Delhi Water Charter Township Board on September 19, 1989, and that in District No. 61 accordance with the agreement between the Board and the Charter Dell Ridge Township of Delhi dated August 15, 1972, covering the furnishing Subdivision of a potable water supply in Delhi Township, the Board advises Lots 1-14 officials of Delhi Township as follows: 1 . The Board will accept Water District No. 61 established by Township resolution on September 19, 1989, and will provide a potable water supply to said district. 2. The Township will be required to make a $24,526.75 non- refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations 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 LXI) covering the furnishing of a potable water supply in Water District No. 61 . 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $24,526.75 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LXI) to furnish a potable water supply in Water District No. 61. The geographical area of Water District No. 61 is as follows: Dell-Ridge Subdivision, Lots 1 thru 14 ,SeptBiber 26, 1989 160 WATER (Continued) Res. No. 89-9-17 To provide a potable water supply within the proposed new district requires the installation of 995 feet of water main and fire hydrants at an estimated cost of $24,526.75. The main extension will serve fourteen (14) residential customers. One-time connection fees and meter set charges will amount to $5,586.00. Estimated annual revenue is $2,737.00. Water mains to be installed in fall of 1989 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. -------------------- Res. No. 89-9-18 That the Board agree to serve water to proposed Water District No. 62, Delhi Township, as requested by resolution of the Delhi Delhi Water Charter Township Board on September 19, 1989 and that in accord- District No, 62 ance with the agreement between the Board and the Charter Higgins Subdivision Township of Delhi dated August 15, 1972, covering the furnishing Lots 2-24. 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. 62 established by Township resolution on September 19, 1989 and will provide a potable water supply to said district. 2. The Township will be required to make a $41 , 115.60 non- refundable contribution-in-aid of construction to cover the charges set forth in the Board's Rules and Regulations for Water Service for installing the necessary distribu- tion facilities to serve said district. 3. The Board and the Township are to enter into a written agreement (Supplement LXII) covering the furnishing of a potable water supply in Water District No. 62. 4. Water mains are to be installed in accordance with the current Board's Rules and Regulations for Water Service. Further, that upon receipt of the sum of $41, 115.60 from the Township, the project be approved for installation, and the General Manager and the Secretary be authorized to sign the aforementioned agreement (Supplement LXII) to furnish a potable water supply in Water District No. 62. The geographical area of Water District No. 62 is as follows: Higgins Subdivision, Lots 2 thru 24 161 Septenber 26, 1989 WATER (Continued) Res. No. 89-9-18 To provide a potable water supply within the proposed new district requires the installation of 1 ,880 feet of water main and fire hydrants at an estimated cost of $41 ,115.60. The main extension will serve twenty-three (23) residential customers. One-time connection fees and meter set charges will amount to $9,177.00. Estimated annual revenue is $4,496.00. Water mains to be installed in the fall of 1989 following the receipt of the Township's non-refundable contribution-in-aid of construction and the signing of the agreement. -------------------- Respectfully submitted, AL Joseph Pandy, J General Manager JP/bg First of America Bank-Central ATTACHI B L,;;c,ua,. V.:ui.y,v, 48909 1r:rgdiirF;r<;4 Re: Resolution 89-9-12 1b0U August 14, 1989 i1 FIRSTOF AM RI CA Mr. Dena W. Tousley, Treasurer Lansing Board of Water and Light 123 West Ottawa Street P. O. Box 13007 Lansing, Michigan 48901 Dear Mr. Tousley: We are pleased to advise you that First of America Bank-Central ("FQAB-C") has approved an unsecured letter of credit in favor of Lansing Board of Water and Light. This commitment is subject to the terms and conditions set forth in this commitment letter. Borrower: Lansing Board of Water and Light Letter of Credit Amount: $817,220.00 Purpose: Meet requirer,,ents for solid waste disposal license required by the Department of Natural Resources for North Lansing Landfill #2 One-half of one percent (1/2%) Annually of Letter of Credit Amount 0%og eq.io Terra: Five (5) years �'�llateral: Unsecured Closing Costs: Borrower shall pay all expenses arising from this commitment including, but not limited to FQAB-C attorney fees This commitment for a letter of credit is subject to the following terms and conditions. 1. Borrower shall provide FOAB-C annual financial statements along with an annual statement indicating full compliance with the provisions of the Solid Waste Management Act, 1978 PA 641, as amended or any future regulations that may be enacted with respect to the closure and post closure monitoring and maintenance of the North Lansing Landfill #2. 2. Borrower shall notify FOAB-C in writing immediately of any violations of the provisions of the Solid Waste Management Act, 1978 PA 641, as amended or any future regulations that may be enacted with respect to the closure and post closure monitoring and maintenance of the North Lansing Landfill #2. 3. The issuance of the letter of credit shall be subject to acceptable review and documentation by FO:AB-C of Borrower's records and reporting procedures to the Department of Natural Resources with respect to the closure and post closure monitoring and maintenance of the North Lansing Landfill 42. Mr. Dana Tousley, Treasurer =Aa= B August 14, 1989 Page Wo 4. If the proceeds of the Letter of Credit are drawn by the beneficiary thgn amounts paid on behalf of the Borrower by FOAB-C shall be due and payable by Borrower to FLAB-C on demand with interest accruing on the outstanding balance at FCIAB-C's Variable Base Rate. 5. The issuance of the Letter of Credit shall be subject to acceptable completion of Letter of Credit documentation by FOAB-C and FOAB-C's legal counsel including but not limited a Promissory Note, Business Loan Agreement, Letter of Credit, Letter of Credit Application, and all other documentation that FLAB-C determines that is necessary to satisfactorily complete the Letter of Credit transaction. This comnitment shall not be assignable by operation of law, or otherwise, and may be terminated if (a) the Borrower shall fail to comply with any of the terms and conditions hereof or (b) in the event of the filing by or against Borrower of a petition in bankruptcy or insolvency. This commitment is further contingent upon the Borrower's maintaining a financial condition acceptable to FOAB-C. This commitment shall be valid for a period of thirty (30) days from the date hereof. If the terms of this corrmitment letter are acceptable, please indicate by signing and returning this letter. This offer shall expire sixty (60) days from this date, and the letter of credit transaction must be closed prior thereto. Thank you for the opportunity to provide you with our financing proposal. If you have any questions, please do not hesitate to call me at 334-5459. Sincerely, FIRST OF AMERICA BANK-CENTRAL Gary E. Organek Assistant Vice President Comnnercial Loan Department GBD:nmr ACCEPTED: LANSING BWM OF WATER AND LIGHT By: _ _ Date: ATTACI-IM C Resolution 89-9-13 BOND RESOLUTION A RESOLUTION TO AUTHORIZE AND PROVIDE FOR THE ISSUANCE OF WATER SUPPLY AND ELECTRIC UTILITY SYSTEM REVENUE BONDS TO PAY PART OF THE COST OF REMODELING, UPDATING AND EXTENDING THE LIFE OF THE WATER SUPPLY AND ELECTRIC UTILITY SYSTEM OF THE CITY OF LANSING; TO PROVIDE FOR THE RETIREMENT AND SECURITY OF THE BONDS; AND TO PROVIDE FOR OTHER MATTERS RELATIVE TO THE IMPROVEMENTS AND BONDS. Section 1. Definitions. Whenever used in this Bond Resolu- tion, except when otherwise indicated by the context, the follow- ing terms shall have the following meanings: (a) Accreted Amount" means, as of any January 1 or July 1, with respect to the Capital Appreciation Bonds, the amount set forth for such January 1 or July 1 in the form of Capital Appreciation Bond which amount represents original principal plus the amount of interest that has accrued to such date. "Accreted Amount" means, as of any date other than January 1 or July 1, the sum of (a) the Accreted Amount on the preceding January 1 or July 1 and (b) the product of (x) a fraction, the numerator of which is the number of days having elapsed from the preceding January 1 or July 1 and the denominator of which is the number of days from such preced- ing January 1 or July 1 to the next succeeding January 1 or July 1 and (y) the difference between the Accreted Amounts for such January 1 or July 1, which amount represents the principal plus the amount of interest that has accrued to the date of determination. (b) "Act 94" means Act 94, Public Acts of Michigan 1933, as amended. (c) "Additional Bonds" means any additional bonds of equal standing with the Series 1989A Bonds and the Series 1989B Bonds issued pursuant to Section 18 of this Bond Resolution. (d) "Aggregate Debt Service" for any period means, as of any date of calculation by the Board, the sum of the amounts of the debt service for such period with respect to all Outstanding Bonds. In the event that any of the Out- standing Bonds bear interest at a variable rate, such Bonds shall, for purposes of calculating Aggregate Debt Service, be assumed by the Board to bear interest at a fixed rate of interest equal to the greater of (i) 10.00% or (ii) the rate published by The Bond Buyer or any successor publication as its "Index of 25 Revenue Bonds" applicable on a date not more -1- ATrACI= C - Re: Resolution 89-9-13 At a regular meeting of the Board of Water and Light of the City of Lansing, Ingham, Eaton and Clinton Counties, Michigan, held in the Board Room, 123 W. Ottawa Street, Lansing, Michigan, on the 26th day of September, 1989, at 6 : 40 p.m. PRESENT: Commissioners Belen, Evans Jesson riccomh Sebolt.__ Strolle, Williams, and Hassler, ABSENT: None The following resolution was offered by Commissioner Mcco#1 who moved its adoption, and seconded by commissioner oner Jesson Attachment C than 20 days prior to the date of initial issuance of any such variable interest rate Bonds. (e) "Aggregate Debt Service Requirement" means for any period, and as of any date of calculation, Aggregate Debt Service for such period, less any capitalized interest to be paid from the proceeds of the Bonds. (f) "Award Resolution" means the resolution(s) of the Board authorizing the sale of the Bonds. (g) "Board" means the Board of Water and Light estab- lished pursuant to Section 5-201 of Chapter 2 of the City Charter of the City. (h) "Bond Resolution" means this Bond Resolution and any other resolution amendatory to or supplemental to this Bond Resolution and shall include any resolution authorizing the sale of a series of Bonds. (i) "Bonds" means the Series 1989A Bonds, the Series 1989B Bonds and, when issued and delivered, any Additional Bonds authorized and issued in accordance with Section 18 of this Bond Resolution. (j) "Capital Appreciation Bonds" means the Series 1989B Bonds which mature on July 1, 2004 . (k) "City" means the City of Lansing, Ingham, Eaton and Clinton Counties, Michigan. (1) "Code" means the Internal Revenue Code of 1986, as amended. (m) "Consulting Engineer" means the engineer or engi- neering firm or firms appointed from time to time, and having a favorable reputation for skill and experience in the design and operation of municipal utility systems, at the time retained by the Board -to perform the acts and carry out the duties provided for such Consulting Engineer in the Bond Resolution. (n) "Current Interest Bonds" means the Series 1989A Bonds and the Series 1989B Bonds which mature in the years 1994 and 1999. (o) "Depository" means First of America Bank-Central, or such other bank as shall be designated to act as deposi- tory pursuant to this Bond Resolution by resolution of the Board organized under the laws of any State of .the United -2- Attachment C States of America or any national banking association having a combined capital stock and surplus of at least $50,000,000. (p) "Event of Default" shall refer to an Event of Default specified in Section 19 of this Bond Resolution. (q) ' Government Obligations" means direct obligations of (including obligations issued or held in book entry form on the books of) the United States of America; (r) "Investment Obligations" means, to the extent authorized by law, (i) United States government obligations; (ii) obligations the principal and interest on which is fully guaranteed by the United States; (iii) repurchase agreements that are secured by United States government obligations or obligations fully guaranteed by the United States and that are held by an independent third party; (iv) certificates of deposit or other accounts of, or bankers acceptances of, 1 or more of the following: (a) banks that are members of the federal deposit insurance corporation; (b) savings and loan associations that are members of the federal savings and loan insurance corporation; (c) credit unions whose accounts are insured by the national credit union share insurance fund; (v) commercial paper that is rated in the highest category by a nationally recognized rating agency; (vi) obligations of a state of the United States or of a political subdivision of a state of the United States that are rated in 1 of the 3 high- est categories by a nationally recognized rating agency; (vii) a collective investment fund that invests solely in 1 or more of the securities described above; and (viii) Govern- ment Obligations. (s) "Junior Lien Bonds" means bonds or other obliga- tions which may be issued or incurred by the Board to provide funds for any lawful purpose of the System which are of junior standing and priority of lien with respect to the Net Revenues to the claim of the Bonds. (t) "Mandatory Redemption Requirement" refers to the requirement, if any, to redeem the Bonds prior to maturity as set forth in the Award Resolution. (u) ' Municipal Obligation" means any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state (i) which are not callable at the option of the obligor prior to maturity or as to which irrevocable notice has been given by the obligor to call on the date specified in the notice, and (ii) which are fully secured as to principal and interest and redemption premium, if any, by a fund consisting only of cash or Government Obligations, -3- Attachment C which fund may be applied only to the payment of such princi- pal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (iii) which fund is sufficient, as verified by an independent cer- tified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obliga- tions described in this definition of Municipal Obligation on the maturity date or dates thereof or on the redemption date or dates specified in the irrevocable instructions referred to in subclause (i) of this definition of Municipal obliga- tion, as appropriate, and (iv) which are rated, based on the escrow, in the highest rating category of Standard & Poor's Corporation and Moody's Investors Service, Inc. or any suc- cessors thereto; (v) "Net Revenues" means the Revenues remaining after deducting the reasonable expenses of administration, opera- tion, and maintenance of the System. (w) "Operation and Maintenance Fund" means the Opera- tion and Maintenance Fund established pursuant to Section 11(A) of this Bond Resolution. (x) "Project" means the remodeling, updating and extending the life of the water supply and electric utilities of the City of Lansing, including some or all of the follow- ing: (i) structural and turbine repairs and stability improvements to Moores Park Dam at the Eckert Station and structural repairs to the North Lansing Dam, (ii) the instal- lation of a new potable water service to the west end of the Eckert Station and modifications to the existing house ser- vice water system, replacement of three house service water pumps, three ash sluice pumps and six cooling tower pumps at the Eckert Station, (iii) modifications to upgrade the piping, valves, pumps and equipment for the waste water treatment system at the Eckert Station, (iv) upgrading the make-up water systems of the Eckert Station, (v) replacing the flue gas discharge breaching between the I.D. fans and the chimney at the Erickson Station, (vi) constructing a 138 kV Substation, (vii) installing a new 13.2 kV distribution cable to downtown East Lansing, (viii) adding a second trans- former and associated distribution switch gear at the exist- ing Enterprise 138 kV Substation, (ix) upgrading the valves, piping and controls of the rapid sand filters at the Dye Water Conditioning Plant, (x) restoring some of the exterior walls and installing a new facade on other portions of the exterior walls of the Dye Water Conditioning Plant, (xi) replacing existing remote monitoring and controls of the high service water pumps and facilities at the Wise Complex and -4- Attachment C providing for integrated control and monitoring capabilities at the Dye Water Conditioning Plant, (xii) upgrading the Lansing area well field remote control and indication by R. F. Telemetry and integration of the controls and indica- tion points into the computer system at the Dye Water Condi- tioning Plant, (xiii) replacing residential and commercial water meters in conjunction with the combined billing format for electric, water and steam billing and (xiv) upgrading the Eifert Booster Pumping Station by installing a second pump and new water mains and adding another booster pump pumping station to the Delhi Township Water Distribution System. (y) "Outstanding Bonds" means Bonds issued under this Bond Resolution except: (i) Bonds cancelled by the Transfer Agent at or prior to such date; (ii) Bonds (or portions of Bonds) for the payment or redemption of which moneys or Government Obligations, equal to the principal amount or redemption price thereof, as the case may be, with interest to the date of maturity or redemption date, shall be held in trust under this Bond Resolution and set aside for such pay- ment or redemption (whether at or prior to the maturity or redemption date) , provided that if such Bonds (or portions of Bonds) are to be redeemed, notice of such redemption shall have been given as provided in this Bond Resolution or provision satisfactory to the Trans- fer Agent shall have been made for the giving of such notice; (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authenticated and delivered hereunder; and (iv) Bonds no longer deemed to be Outstanding Bonds as provided in Section 5 of this Bond Resolution. (z) "Rating Agency" means Moody's Investors Service and/or Standard and Poor's Corporation, or any successor to either thereof or similar national rating agency if the fore- going do not exist. (aa) "Receiving Fund" means the Receiving Fund estab- lished pursuant to Section 11 of this Bond Resolution. (bb) "Redemption Fund" means the Bond and Interest Redemption Fund established pursuant to Section 11(B) of this Bond Resolution. -5- Attwliwnt C (cc) "Registered Owner" means the owner of a Bond as shown by the registration records kept by the Transfer Agent. (dd) "Revenues" means the income derived from the rates charged for the services, facilities, and commodities fur- nished by the System, earnings on investment of funds and accounts of the System required to be deposited in the Receiving Fund pursuant to this Bond Resolution and other revenues derived from or pledged to the operation of the System. (ee) "Series 1989A Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989A issued pursuant to this Bond Resolution. (ff) "Series 1989B Bonds" means the Water Supply And Electric Utility System Revenue Bonds, Series 1989B issued pursuant to this Bond Resolution. (gg) "Sufficient" means with respect to (i) cash or (ii) Government Obligations or (iii) Municipal Obligations, or any combination thereof, not redeemable at the option of the issuer thereof, the principal and interest payments upon which, without reinvestment of the interest, come due at such times and in such amounts, as to be fully sufficient to pay the interest as it comes due on the Bonds or any portion thereof and the principal and redemption premium, if any, on the Bonds or any portion thereof as they come due whether on the stated maturity date or upon earlier redemption. Securi- ties representing such obligations or cash shall be placed in trust with a bank or trust company, and if any of the Bonds are to be called for redemption prior to maturity, irrevoca- ble instructions to call the Bonds for redemption shall be given to the Transfer Agent. (hh) "System" means the complete facilities of the City for the supply and distribution of water and the generation and distribution of electricity, steam and heat, including all plants, works, instrumentalities and properties, used or useful in connection with the supply and distribution of water and the generation and distribution of electricity, steam and heat and all additions, extensions and improvements thereto existing or hereafter acquired by the City. (ii) "Transfer Agent" means the bank or trust company designated by the Board in the Award Resolution or any sub- sequent resolution to perform the duties of the Transfer Agent pursuant to this Bond Resolution. Section 2. Necessity, Estimate of Cost and Useful Life. It is hereby determined to be necessary for the public health, -6- Attachment C safety and welfare of the City to remodel, update and extend the life of the System by acquiring the Project. The estimated cost of the Project is $23,367,000 and the estimated useful life of the Project is not less than 30 years. Section 3. Series 1989A Bonds and Series 1989B Bonds Autho- rized. To pay a portion of the cost of acquiring the Project, including payment of legal, financial and other expenses of the issuance and sale of the Series 1989A Bonds and Series 1989B Bonds, the City, by and through its Board, shall borrow a sum as finally determined in the Award Resolution, which sum is presently estimated to be: (i) Fourteen Million Dollars ($14,000,000) , but not to exceed Sixteen Million Dollars ($16,000,000) in connection with the Series 1989A Bonds and (ii) Two Million Dollars ($2,000,000) , but not to exceed Three Million Dollars ($3,000,000) in connection with the Series 1989B Bonds, and issue the Series 1989A Bonds and the Series 1989B Bonds therefor pursuant to the provisions of Act 94 . Section 4 . Bond Details . The bonds shall be designated "Water Supply And Electric Utility System Revenue Bonds, Series 1989A" and "Water Supply And Electric Utility System Revenue Bonds, Series 1989B, " shall be payable solely out of Net Revenues and any other monies pledged under this Bond Resolution and shall not be a general obligation of the City. Series 1989A Bonds shall be issued in denominations of $5,000 or any integral multiples thereof not exceeding the amount of the Series 1989A Bonds maturing on the same date and shall be numbered in consecu- tive order of authentication from 1 upwards. Current Interest Series 1989B Bonds shall be issued in denominations of $500 or integral multiples thereof not exceeding the amount of Series 1989B Bonds maturing on the same date and shall be numbered in consecutive order of authentication from 1 upwards . Capital Appreciation Bonds shall be issued in denominations of the origi- nal principal amount per $1,000 at maturity or any authorized integral multiple thereof, which shall appreciate to $1,000 (or the applicable multiple thereof) upon maturity, as specified in the Award Resolution, shall be lettered "A" and numbered in con- secutive order from 1 upwards . Current Interest Bonds shall be dated as of October 1, 1989, or such later date as this Board shall approve in the Award Resolution. Capital Appreciation Bonds shall be dated as of their date of delivery. Current Interest Bonds shall bear interest at a rate or rates to be determined on the sale thereof, not exceeding nine percent (9%) per annum, payable on July 1, 1990, and on each January 1 and July 1 thereafter, by check drawn on the Transfer Agent and mailed to each Registered Owner at the registered address, as shown on the registration books of the City maintained by the Transfer Agent. Interest shall be payable to the Registered Owner of record as of the 15th day of the month prior to the -7- Attachment C payment date for each interest payment. The date of determina- tion of Registered Owner for purposes of payment of interest as provided in this paragraph may be changed by the Board to conform to market practice in the future. Interest on the Current Interest Bonds shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The principal of the Current Interest Bonds and the amount payable at maturity on the Capital Appreciation Bonds shall be payable at the principal office of the Transfer Agent upon presentation and surrender thereof. Unless otherwise provided in the Award Resolution, the Series 1989A Bonds shall be sold at not less than 98% of their par value and the Series 1989B Bonds shall be sold at not less than 100% of their par value (original principal amount per $1,000, in the case of Capital Appreciation Bonds) . The Series 1989A Bonds shall mature on July 1 in years and estimated amounts as described in Exhibit A. The actual amount of each maturity shall be finally determined in the Award Resolution. Current Interest Series 1989B Bonds shall mature on July 1 in years and estimated amounts as described in Exhibit B. The actual amount of each maturity shall be finally determined in the Award Resolution. Capital Appreciation Bonds shall mature in the estimated amount and on the date described in Exhibit C. The actual amount of each maturity shall be finally determined in the Award Resolution. Current Interest Bonds maturing on or prior to July 1, 1998, are not subject to redemption at the option of the Board, acting for the City, prior to maturity. The Current Interest Bonds maturing on and after July 1, 1998, are subject to redemption at the option of the City in whole or in part in such order as the Board shall determine and by lot within a maturity, in integral multiples of $5,000 in the case of Series 1989A Bonds and in integral multiples of $500 in the case of Series 1989B Bonds, at the following redemption prices (expressed as percentages of the principal amount of the Bonds or portion of Bonds to be redeemed) , plus accrued interest to the redemption date: Period During Which Redeemed (Both Dates Inclusive) Redemption Price July 1, 1997, to June 30, 1999 102% July 1, 1999, to June 30, 2001 101 July 1, 2001, and thereafter 100 Capital Appreciation Bonds are subject to redemption at the option of the Board acting for the City, in whole or in part by -8- Attachrent C lot at any time on or after July 1, 1997, at the following redemption prices (expressed as a percentage of the Accreted Amount of Capital Appreciation Bonds to be redeemed) : Period During Which Redeemed Redemption Price (Both Dates Inclusive July 1, 1997, to June 30, 1999 102% July 1, 1999, to June 30, 2001 101 July 1, 2001, and thereafter 100 The Bonds shall be issued in fully registered form and shall be signed by the manual or facsimile signatures of the Chairman and Secretary of the Board. The Bonds shall. have the facsimile corporate seal of the City printed thereon. No Bond shall be valid until authenticated by an authorized officer of the Transfer Agent. The Bonds shall be delivered to the Transfer Agent for authentication and shall be delivered by the Transfer Agent to the purchaser in accordance with instructions from the Secretary of the Board upon payment of the purchase price for the Bonds in accordance with the Award Resolution. Executed blank Bonds for registration and issuance to transferees shall, as necessary, be delivered to the Transfer Agent. Any Bond, upon surrender of the Bond to the Transfer Agent by the Registered owner thereof, accompanied by a duly executed written instrument of transfer satisfactory to the Transfer Agent, may be exchanged for a Bond or Bonds of any other autho- rized denominations of the same aggregate principal amount, maturity date and interest rate as the surrendered Bond. Any Bond may be transferred upon the books of the City main- tained by the Transfer Agent by the Registered Caner thereof, in person or by his or her duly authorized attorney, upon surrender of the Bond for cancellation, accompanied by a duly executed written instrument of transfer in a form approved by the Transfer Agent. Whenever any Bond or Bonds shall be surrendered for transfer, the Transfer Agent shall authenticate and deliver a new Bond or Bonds, of like aggregate principal amount, maturity, and r interest rate. The Transfer Agent shall q t P ym y the Registered Owner requesting the transfer of any tax or other governmental charge required to be paid with respect to the transfer. The City shall not be required (i) to issue, register the transfer of, or exchange any Bond during a period beginning at the opening of 15 business days before the day of the mailing of a notice of redemption of Bonds selected for redemption under this Bond Resolution and ending at the close of business on the day of that mailing, or ( ii) to register the transfer of or exchange any Bond so selected for redemption in whole or in part, -9- Attachmmt C except the unredeemed portion of Bonds being redeemed in part. The Board, on behalf of the City, shall give the Transfer Agent notice of call for redemption at least 15 days prior to the date notice of redemption is to be given. Upon payment of a fee of $15.00 and written notice received by the Transfer Agent and the Board not less than 15 days prior to a redemption date fixed by the Registered Owner, the Series 1989B Bonds shall be redeemed by the City, which date shall be a January 1 or July 1, at a price, in the case of Current Interest Bonds, equal to the principal amount of the Series 1989B Bonds to be redeemed and, in the case of Capital Appreciation Bonds, at a price equal to the Accreted Amount on the redemption date of Series 1989B Bonds to be redeemed. Section 5. Payment of Bonds: Defeasance. The Bonds and the interest thereon shall be payable solely from the Net Revenues, and to secure such payment, there is hereby created a statutory lien upon the whole of the Net Revenues . Pursuant to provisions of Act 94, the City, by and through its Board, hereby pledges to the repayment of principal of, redemption premium, if any, and interest on the Bonds, the funds and accounts established by this Bond Resolution, and a statutory lien is hereby created on such funds and accounts . The liens and pledge provided by this Bond Resolution shall continue until payment in full of the principal of and interest on all Bonds payable from Net Revenues, or, until Sufficient cash, Sufficient Government Obligations, Sufficient Municipal Obligations or any combination thereof shall have been deposited in trust for payment in full of the principal of and the interest on all Bonds to be paid to their maturity, or, if called or if irrevocable instructions have been given to call for redemption, to the date fixed for redemption together with the amount of the redemption premium, if any. Upon deposit of Sufficient cash, Sufficient Government Obligations, Sufficient Municipal Obligations or any combination thereof, the statutory lien created by this Bond Resolution shall be terminated with respect to the Bonds to be paid from the cash, Government Obligations or Municipal Obligations, or combination thereof, the Registered Owners of such Bonds shall have no further rights under this Bond Resolution except for payment from the deposited funds and for the rights of replacement, registration and trans- fer provided by this Bond Resolution, and such Bonds shall no longer be considered to be Outstanding Bonds under this Bond Resolution. Section 6 . Management. The operation, repair and management of the System shall be under the supervision and control of the Board. Section 7 . Charges. The rates to be charged for service furnished by the System and the methods of collection and -10- Attachment C enforcement of the collection of the rates shall be those per- mitted by law and established by the Board and in effect on the date of adoption of this Bond Resolution and thereafter as estab- lished by the Board. Section 8. No Free Service. No free service shall be fur- nished by the System to any person, firm or corporation public or private, or to any public agency or instrumentality. Section 9 . Rate Covenant. The Board will at all times fix, establish, maintain and collect rates, fees and charges for the sale of the output, capacity, use or service of the System which, together with other income, are reasonably expected to yield Net Revenues equal to at least 120% of the Aggregate Debt Service Requirement for the forthcoming twelve ( 12) month period plus such amount as is necessary to comply with all covenants in this Bond Resolution and to pay all charges and liens whatsoever pay- able out of Net Revenues in such period. Section 10 . Operating Year. The System shall continue to be operated on the basis of an operating year commencing on July 1st and ending on the 30th day of the following June. For purposes of determining the annual Aggregate Debt Service Requirement on the Bonds for any operating year, payments of principal and interest due on July 1st shall be considered to be part of the Aggregate Debt Service Requirement for the preceding operating year. Section 11 . Funds and Accounts: Flow of Funds. All Revenues of the System shall be set aside as collected and credited to a fund established with the Depository to be designated WATER SUPPLY AND ELECTRIC UTILITY SYSTEM RECEIVING FUND (the "Receiving Fund" ) . The Revenues so credited are pledged for the purpose of the following funds and shall be transferred from the Receiving Fund periodically in the manner and at the times hereinafter specified: A. OPERATION AND MAINTENANCE FUND: Periodically, out of the Revenues credited to the Receiving Fund there shall be first set aside in, or credited to, a fund designated OPERATION AND MAINTE- NANCE FUND, a sum sufficient to provide for the payment during the succeeding period of the next month's expenses of administra- tion and operation of the System, including such current expenses for the maintenance thereof as may be necessary to preserve the same in good repair and working order. B. BOND AND INTEREST REDEMPTION FUND: There shall be estab- lished and maintained a fund designated BOND AND INTEREST REDEMP- TION FUND (the "Redemption Fund" ) , the moneys on deposit therein from time to time to be used solely, except for required deposits to the Rebate Fund, for the purpose of paying the principal of, redemption premium, if any, and interest on the Bonds. -11- Attachffmt C Out of the Revenues remaining in the Receiving Fund, after provision for the credit or deposit to the Operation and Mainte- nance Fund, on or before each January 1 and July 1 there shall next be set aside in the Redemption Fund and transferred to the Transfer Agent a sum sufficient to provide for the payment of the principal of and interest on the Bonds on each January 1 and July 1, subject to any credit therefor as provided in this Sec- tion. . If there shall be any deficiency in the amount previously required to be set aside, then the amount of such deficiency shall be transferred to the Redemption Fund and the Transfer Agent as soon as the funds become available. C. JUNIOR LIEN BOND AND INTEREST REDEMPTION FUND: If the Board shall ever issue Junior Lien Bonds, there shall be estab- lished and maintained a separable depositary fund for the purpose of paying the principal of, redemption premium, if any, and interest on such Junior Lien Bonds as they come due (the "Junior Lien Bond and Interest Redemption Fund" ) . Revenues remaining in the Receiving Fund, after provision has been made for the requirements of the Operation and Maintenance Fund and of the Redemption Fund, shall be set aside, but not more often than monthly, in a fund for the Junior Lien Bonds in accordance with the resolution authorizing the issuance of the Junior Lien Bonds. A separate account may also be established within such fund as a bond reserve account to be funded on a junior lien basis in accordance with the resolution authorizing the issuance of the Junior Lien Bonds. The detail of the establishment and mainte- nance of such fund shall be provided in the resolution of the Board -authorizing the issuance of such Junior Lien Bonds. D. SURPLUS MONEYS: Any Revenues in the Receiving Fund after satisfying all requirements of the Operation and Maintenance Fund, the Redemp- tion Fund, the Rebate Fund and the Junior Lien Bond and Interest Redemption Fund shall be deemed to be surplus moneys and may be used for such purposes as the Board deems to be for the best interests of the City. If there should be any deficit in the Operation and Mainte- nance Fund, Redemption Fund or the Rebate Fund on account of defaults in setting aside required amounts therein, then trans- fers shall be made from the moneys remaining in the Receiving Fund at the end of any operating year to those funds in the priority and order specified herein, to the extent of any deficit, before any other disposition is made of the monies in the Receiving Fund at the end of any operating year. Section 12 . Rebate Fund. There shall be established and maintained a fund designated the REBATE FUND (the "Rebate Fund" ) . Moneys representing investment earnings or profits, shall be transferred annually from all funds and accounts established -12- Attaclment C under this Bond Resolution and deposited in the Rebate Fund in an amount sufficient to enable the City to rebate investment earn- ings to the federal government, if necessary, in accordance with the requirements of the Code. Funds on deposit in the Rebate Fund are not pledged as security for the Bonds. Monies shall be deposited in the Rebate Fund and shall be rebated to the federal government unless the City has received an opinion of nationally recognized bond counsel that failure to take such actions will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on such Bonds . Section 13. Priority of Funds. In the event the moneys in the Receiving Fund are insufficient to provide for the current requirements of the Operation and Maintenance Fund or the Redemp- tion Fund or the Junior Lien Bond and Interest Redemption Fund, any moneys or securities in other funds of the System, except the proceeds of sale of the Series 1989A Bonds and the Series 1989B Bonds, shall be credited or transferred, first, to the Operation and Maintenance Fund, second, to the Redemption Fund, to the extent of any deficit therein, and third, to the Junior Lien Bond and Interest Redemption Fund. Section 14 . Investments. Moneys in the funds and account established herein, and moneys derived from the proceeds of sale of the Bonds, may be invested by the Board on behalf of the City in Investment Obligations . Investment of moneys in the Redemp- tion Fund being accumulated for payment of the next maturing principal or interest on the Bonds shall be limited to Government Obligations bearing maturity dates prior to the date of the next maturing principal or interest payment respectively on the Bonds . Investment of moneys in any other funds or account, including moneys derived from the proceeds of sale of the Bonds, shall be limited to obligations bearing maturity dates or subject to redemption, at the option of the holder thereof, not later than the time estimated by the City when the moneys from such invest- ments will be required. Any securities representing investments shall be kept on deposit with the bank or trust company having on deposit the fund or funds or account from which such purchase was made. Earnings or profits on any investment of funds in any fund or account established in this Bond Resolution shall be deposited in or credited to the Rebate Fund to the extent necessary as required by Section 12 of this Bond Resolution and any earnings or profits remaining in the Receiving Fund, Operation and Mainte- nance Fund and Redemption Fund, shall be deposited in or credited to the Receiving Fund. The City, by and through its Board, covenants and agrees that to the extent permitted by law, it shall take all actions within its control and that it shall not fail to take any action as may be necessary to maintain the exclusion of interest on- the Bonds from gross income for federal income tax purposes, including but -13- Attachment C not limited to, actions relating to the rebate of arbitrage earnings and the expenditure and investment of Bond proceeds and moneys deemed to be Bond proceeds, all as more fully set forth in the Non-Arbitrage and Tax Compliance Certificate to be delivered by the City in connection with the issuance of the Series 1989A Bonds and the Series 1989B Bonds. Section 15. Applicable Law. The Series 1989A and the Series 1989B Bonds shall be sold and the proceeds applied in accordance with the provisions of Act 94 . Section 16 . Bond Proceeds. From the proceeds -of the sale of the Series 1989A Bonds and the Series 1989B Bonds there first shall be immediately deposited in the Redemption Fund an amount equal to the accrued interest and premium, if any, received on delivery of the Series 1989A Bonds and the Series 1989B Bonds and the City shall receive a credit equal to the amount so deposited against the amount required to be deposited in the Redemption Fund for payment of the next maturing interest on the Current Interest Bonds . The remaining proceeds of the Series 1989A Bonds and the Series 1989B Bonds shall be used to pay the cost of acquiring the Project and paying the cost of issuing the Series 1989A Bonds and the Series 1989B Bonds . Section 17 . Covenants . The City covenants and agrees with the Registered Owners of the Bonds that so long as any of the Bonds remain as Outstanding Bonds and unpaid as to either princi- pal or interest: (a) The Board will maintain the System in good repair and working order and will operate the same efficiently and will faithfully and punctually perform all duties with refer- ence to the System required by the Constitution and laws of the State of Michigan and this Bond Resolution. (b) The City and the Board will not sell, lease, mortgage or otherwise dispose of any part of the System, except for sales or exchanges of property or facilities ( 1) which are not useful in the operation of the System, or (2) for which the proceeds received are, or the fair market value of the subject property is, less than 1% of the Revenues for the preceding fiscal year, or (3) which will not impair the ability of the Board to comply with the rate covenant described in Section 9 of this Bond Resolution. Section 18. Additional Bonds . The right is reserved, in accordance with the provisions of Act 94, to issue additional bonds payable from the Net Revenues of the System which shall be of equal standing and priority of lien on the Net Revenues of the -14- Attachment C System with the Series 1989A Bonds and the Series 1989B Bonds, but only for the following purposes and under the following terms and conditions. (a) For repairs, extensions, enlargements and improve- ments to the System or for the purpose of refunding a part of i any Outstanding Bonds (unless such partial refunding is done in compliance with (b) below) and paying costs of issuing such Additional Bonds, including deposits which may be required to be made to a bond reserve account. Bonds for such purposes shall not be issued pursuant to this subpara- graph (a) unless the average actual or augmented Net Revenues of the System for the fiscal year of the System ending not more than 15 months prior to the sale of Additional Bonds shall be equal to at least one hundred twenty five ( 125%) percent of the maximum Aggregate Debt Service Requirement in any current or future fiscal year on the Outstanding Bonds and on the Additional Bonds then being issued. If the Addi- tional Bonds are to be issued in whole or in part for refund- ing Outstanding Bonds the maximum Aggregate Debt Service shall be determined by deducting from the principal and interest requirements for each operating year the annual Aggregate Debt Service Requirement of any Bonds to be refunded from the proceeds of the Additional Bonds. Net Revenues may be augmented as follows for the pur- poses of this subsection (a) . ( 1) If the System rates, fees or charges shall be increased at or prior to the time of authorizing the Additional Bonds, the Net Revenues may be aug- mented by an amount which in the opinion of the Consulting Engineer will reflect the effect of the increase had the System's billings during such time been at the increased rates . (2) The actual Net Revenues may be augmented by the estimated increase in Net Revenues which in the opinion of the Consulting Engineer will accrue as a result of new customers which have not been ser- viced during the fiscal year described in paragraph (a) above or as a result of the acquisition of the repairs, extensions, enlargements and improvements to the System which have been made during or sub- sequent to the fiscal year described in paragraph (a) above or which will be acquired in whole or in part from the proceeds of the Additional Bonds to be issued. -15- Attachment C No Additional Bonds of equal standing as to the Net Revenues of the System shall be issued pursuant to the autho- rization contained in subparagraphs (a) or (c) if the City shall then be in default in making its required payments to the Operation and Maintenance Fund or the Redemption Fund. (b) For refunding all of the Outstanding Bonds and paying costs of issuing such Additional Bonds. For refunding a part of the Outstanding Bonds and paying costs of issuing such Additional Bonds, if after giving effect to the refund- ing the maximum amount of Aggregate Debt Service in each future fiscal year shall be less than the Aggregate Debt Service in each future fiscal year prior to giving effect to the refunding. (c) Additional Bonds may be issued without meeting any of the conditions and tests set forth in subsection (a) above for any one or more of the following purposes: ( 1) to pay the cost of acquisition and construction of any repairs, replacements, betterments, improvements, major renewals or corrections of any damage or loss to the System necessary, in the opinion of the Consulting Engineer, to keep the System in good operating condition or to prevent a loss of Revenues therefrom or (ii) to pay the cost of decommissioning, dis- posal or termination of the System. Determination by the Board as to existence of conditions permit- ting the issuance of Additional Bonds shall be conclusive. Notwithstanding the foregoing requirements of Section 18, the Board reserves the right to issue Junior Lien Bonds payable as provided herein. Section 19 . Events of Default. Each of the following events, with respect to an issue of Bonds, is hereby declared an "Event of Default" : (a) default in the payment of the principal of, or interest, or redemption premium, if any, on any Bond after the same shall become due, whether at maturity or upon call for redemption; or (b) default by the City or the Board in the performance or observance of any other of the covenants, agreements or conditions on their part in this Bond Resolution, or con- tained in the Bonds; provided no default shall constitute an Event of Default until written notice thereof shall have been given by the Registered Owners of not less than twenty per- cent (20%) in principal amount of the Outstanding Bonds to the City and the City shall have had sixty (60) days after receipt of such notice to correct such default or cause the -16- Attachment C same to be corrected and shall not have corrected such default or caused the same to be corrected within such period; and provided, further, that if the default be such that it cannot be corrected within such period, it shall not constitute an Event of Default if action to correct the same is instituted within such period and diligently pursued until the default is corrected. Section 20. Appointment of Receiver and Statutory Rights. The Registered Owners of Bonds representing in the aggregate principal amount not less than twenty percent (20%) of all Out- standing Bonds, may protect and enforce the statutory lien and pledge of the funds and accounts and Net Revenues created by Act 94, and enforce and compel the performance of all duties of the officials of the City and the Board, including the fixing of sufficient rates, the collection of Revenues, the proper segrega- tion of Revenues, and the proper application of Revenues. In addition to the rights conferred to Registered Owners by the Resolution, the Registered Owners shall have all the rights con- ferred by Act 94 . The statutory lien upon the Net Revenues, however, shall not be construed to compel the sale of the System or any.part thereof. Section 21 . Effect of Waiver and Other Circumstances. No delay or omission of any Registered Owner to exercise any right or power arising upon the happening or an Event of Default shall impair any right or power or shall be construed to be a waiver of any such Event of Default or be an acquiescence therein and every power and remedy given by this Bond Resolution to the Registered Owners may be exercised from time to time and as often as may be deemed expedient by the Registered Owners . Section 22 . Bond Form. The Current Interest Bonds shall be in substantially the following form: -17- Attachnieit C [SERIES 1989A BONDS] [SERIES 1989B BONDS] UNITED STATES OF AMERICA STATE OF MICHIGAN INGHAM, EATON AND CLINTON COUNTIES CITY OF LANSING WATER SUPPLY AND ELECTRIC UTILITY SYSTEM REVENUE BONDS, SERIES 1989 Interest Maturity Date of Rate Date Original Issue CU IP REGISTERED OWNER: PRINCIPAL AMOUNT: The CITY OF LANSING, Ingham, Eaton and Clinton Counties, State of Michigan (the "City" ) , for value received, hereby promises to pay the Principal Amount shown above to the Registered Owner specified above on the Maturity Date specified above with interest thereon from the Date of Original Issue spec- ified above until paid at the Interest Rate per annum specified above, payable on July 1, 1990, and on each January 1 and July 1 thereafter until the obligation of the City to pay the Principal Amount is satisfied. Principal of this bond is payable at the principal office of or such other trans- fer agent as the City may hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest payment date (the "Transfer Agent" ) . Interest on this bond is payable to the registered owner of this bond as of the 15th day of the month next preceding the payment date as shown on the registration books of the City kept by the Transfer Agent by check or draft mailed to the registered owner at the registered address, and for the prompt payment thereof, the revenues of the facilities of the City for the supply and distribution of water and the generation and distribution of electricity, steam and heat (the "System" ) after provision has been made for reasonable and necessary expenses of operation, maintenance and administra- tion of the System (the "Net Revenues " ) , are irrevocably pledged and a statutory lien thereon has been created. -18- Attachnent C [Applicable Only to Series 1989B Bonds - Upon payment of a fee of $15.00 and written notice received by the Transfer Agent and the Board not less than 15 days prior to a redemption date fixed by the Registered Owner, which date shall be a January 1 or July 1, this Bond shall be redeemed by the City at a redemption price equal to the principal amount plus accrued interest to the redemption date. ] This bond is one of a series of bonds of like tenor, except as to denomination, rate of interest, date of maturity and prior redemption, aggregating the principal sum of $ , issued pursuant to a Bond Resolution (the "Bond Resolution" ) adopted by the Board of Water and Light of the City (the "Board" ) on 1989, and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended, for the purpose of paying part of the cost of remodeling, updat- ing and extending the life of the System and the costs of issuing the bonds. For a complete statement of the revenues from which and the conditions under which this bond is payable, a statement of the conditions under which additional bonds of equal standing may hereafter be issued, the rights and limitations on the owners of the bonds and the general covenants and provisions pursuant to which this bond is issued, reference is made to the Bond Resolution. Bonds of this series maturing prior to July 1, 1998, are not subject to redemption prior to their respective dates of matur- ity. Bonds of this series maturing on January 1, 1998, and thereafter are subject to redemption prior to maturity at the option of the Board acting for the City, at any time on and after January 1, 1997, in whole or in part, in the amount selected by the Board, in order of maturities selected by the Board and within a maturity by lot, at the redemption prices, expressed as a percentage of principal amount, set forth in the following table, plus accrued interest to the date of redemption: Redemption Dates Redemption (both inclusive) Price July 1, 1997, to June 30, 1999 102% July 1, 1999, to June 30, 2001 101 July 1, 2001, and thereafter 100 Notice of call of bonds for redemption shall be given to the registered owner by registered mail, mailed not less than 30 days prior to the date fixed for redemption to the registered address, provided that the failure to receive such notice shall not affect the validity of the redemption. Bonds called for -19- Attechwmt C redemption shall not bear interest after the date fixed for redemption, provided funds are on hand with the Transfer Agent to redeem the bonds called for redemption. This bond is a self-liquidating bond and is not a general obligation of the City and does not constitute an indebtedness of the City within any constitutional, statutory or charter limitation, but is payable, both as to principal and interest, solely from the Net Revenues of the System. The prin- cipal of and interest on this bond are secured by a statutory lien on the Net Revenues of the System. The Board has covenanted and agreed, and does hereby covenant and agree to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be out- standing, such rates for service furnished by the System as shall be sufficient to provide for payment of the principal of and interest on the bonds of this issue and any other bonds payable from the net revenues as and when the same shall become due and payable, and to maintain a bond redemption fund therefor, to provide for the payment of expenses of administration and opera- tion and such expenses for maintenance of the System as are nec- essary to preserve the same in good repair and working order, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution. This bond is transferable only upon the registration books of the City kept by the Transfer Agent by the registered owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this bond together with a written instrument of transfer satisfactory to the Transfer Agent duly executed by the registered owner or its attorney duly authorized in writing, and thereupon a new registered bond or bonds in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the Bond Resolution authorizing the bonds, and upon the payment of the charges, if any, therein prescribed. It is hereby certified and recited that all acts, condi- tions and things required by law precedent to and in the issuance of this bond and the series of bonds of which this is one have been done and performed in regular and due time and form as required by law. This bond is not valid or obligatory for any purpose until the Certificate of Authentication on this bond has been executed by the Transfer Agent. IN WITNESS WHEREOF, the City of Lansing, Ingham, Eaton and Clinton Counties, State of Michigan, by and through. its Board of Water and Light, has caused this bond to be executed with the -20- Attachment C facsimile signatures of its Chairman and its Secretary and the corporate seal of the City to be printed on this bond. CITY OF LANSING By: (FACSIMILE) Chairman (Seal) By: (FACSIMILE) Secretary -21- Attachment C Certificate of Authentication This bond is one of the bonds described in the within- mentioned Bond Resolution. Transfer Agent By: Authorized Representative Date of Authentication: -22- Attachment C ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name and address of transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for regis- tration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, with- out alteration or enlargement or any change whatever. Signature(s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. The transfer agent will not effect trans- fer of this bond unless the information concerning the transferee requested below is provided. Name and Address: PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF TRANSFEREE. (Include information for all joint owners if the bond is held by joint account) (Insert number for first named transferee if held by joint account) -23- Attachment C The Capital Appreciation Bonds shall be in substantially the following form: -24- Attachirent C UNITED STATES OF AMERICA STATE OF MICHIGAN INGHAM, EATON AND CLINTON COUNTIES CITY OF LANSING WATER SUPPLY AND ELECTRIC UTILITY SYSTEM REVENUE BONDS, SERIES 1989B Maturity Date of Date Original Issue CUSIP REGISTERED OWNER: ORIGINAL PRINCIPAL AMOUNT PER $1,000 AMOUNT DUE AT MATURITY: AMOUNT DUE AT MATURITY: $ The CITY OF LANSING, Ingham, Eaton and Clinton Counties, State of Michigan (the "City" ) , for value received, hereby promises to pay the Amount Due At Maturity shown above to the Registered Owner specified above on the Maturity Date specified above. The Amount Due At Maturity is payable at the principal office of or such other transfer agent as the City may hereinafter designate by notice mailed to the registered owner not less than 60 days prior to any interest payment date (the "Transfer Agent" ) . For the prompt payment of the Amount Due At Maturity, the revenues of the facilities of the City for the supply and distribution of water and the generation and distribu- tion of electricity, steam and heat (the "System" ) after provi- sion has been made for reasonable and necessary expenses of operation, maintenance and administration of the System (the "Net Revenues" ) , are irrevocably pledged and a statutory lien thereon has been created. If the Amount Due At Maturity shall not be paid at the Matur- ity Date, the Amount Due At Maturity shall thereafter bear interest .at the rate of % per annum. Upon payment of a fee of $ and written notice received by the Transfer Agent and the Board not less than 15 days prior to a redemption date fixed by the Registered Owner, which date shall be a January 1 or July 1, this Bond shall be -25- AttactmLant C redeemed by the City at a redemption price equal to the Accreted Amount on the redemption date. This bond is one of a series of bonds of like tenor, except as to denomination, rate of interest, date of maturity and prior redemption, aggregating the principal sum of $ , issued pursuant to a Bond Resolution (the "Bond Resolution" ) adopted by the Board of Water and Light of the City (the "Board") on 1989, and under and in full compliance with the Constitution and statutes of the State of Michigan, including specifically Act 94, Public Acts of Michigan, 1933, as amended, for the purpose of paying part of the cost of remodeling, updat- ing and extending the life of the System and the costs of issuing the bonds . For a complete statement of the revenues from which and the conditions under which this bond is payable, a statement of the conditions under which additional bonds of equal standing may hereafter be issued, the rights and limitations on the owners of the bonds and the general covenants and provisions pursuant to which this bond is issued, reference is made to the Bond Resolution. This Bond is not subject to redemption prior to July 1, 1997. This Bond is subject to redemption prior to the Maturity Date, at the redemption prices, expressed as a percentage of the Accreted Amount on the redemption date, set forth in the following table: Redemption Dates Redemption (both inclusive) Price July 1, 1997, to June 30, 1999 102% July 1, 1999, to June 30, 2001 101 July 1, 2001, and thereafter 100 Notice of call of bonds for redemption shall be given to the registered owner by registered mail, mailed not less than 30 days prior to the date fixed for redemption to the registered address, provided that the failure to receive such notice shall not affect the validity of the redemption. Bonds called for redemption shall not bear interest after the date fixed for redemption, provided funds are on hand with the Transfer Agent to redeem the bonds called for redemption. The following table sets forth, for each date therein, the Accreted Amount of this Bond per $1,000 Amount Due At Maturity: Accreted Accreted Date Amount Date Amount -26- Attachment C This bond is a self-liquidating bond and is not a general obligation of the City and does not constitute an indebt- edness of the City within any constitutional, statutory or charter limitation, but is payable, both as to principal and interest, solely from the Net Revenues of the System. The prin- cipal of and interest on this bond are secured by a statutory lien on the Net Revenues of the System. The Board has covenanted and agreed, and does hereby covenant and agree to fix and maintain at all times while any bonds payable from the Net Revenues of the System shall be out- standing, such rates for service furnished by the System as shall be sufficient -to provide for payment of the principal of and interest on the bonds of this issue and any other bonds payable from the net revenues as and when the same shall become due and payable, and to maintain a bond redemption fund therefor, to provide for the payment of expenses of administration and opera- tion and such expenses for maintenance of the System as are necessary to preserve the same in good repair and working order,. and to provide for such other expenditures and funds for the System as are required by the Bond Resolution. This bond is transferable only upon the registration books of the City kept by the Transfer Agent by the registered' owner hereof in person, or by his attorney duly authorized in writing, upon the surrender of this bond together with a written instrument of transfer satisfactory to the Transfer Agent duly executed by the registered owner or its attorney duly authorized in writing, and thereupon a new registered bond or bonds in the same aggregate principal amount and of the same maturity shall be issued to the transferee in exchange therefor as provided in the Bond Resolution authorizing the bonds, and upon the payment of the charges, if any, therein prescribed. It is hereby certified and recited that all acts, condi- tions and things required by law precedent to and in the issuance of this bond and the series of bonds of which this is one have been done and performed in regular and due time and form as required by law. This bond is not valid or obligatory for any purpose until the Certificate of Authentication on this bond has been executed by the Transfer Agent. IN WITNESS WHEREOF, the City of Lansing, Ingham, Eaton and Clinton Counties, State of Michigan, by and through its Board of Water and Light, has caused this bond to be executed with the -27- Attachment C facsimile signatures of its Chairman and its Secretary and the corporate seal of the City to be printed on this bond. CITY OF LANSING By: (FACSIMILE) Chairman (Seal) By: (FACSIMILE) Secretary -28- Attachment C Certificate of Authentication This bond is one of the bonds described in the within- mentioned Bond Resolution. Transfer Agent By: Authorized Representative Date of Authentication: -29- Attactarient C ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto (Please print or typewrite name and address of transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within bond on the books kept for regis- tration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: The signature(s) to this assignment must correspond with the name as it appears upon the face of the within bond in every particular, with- out alteration or enlargement or any change whatever. Signature(s) must be guaranteed by a commercial bank or trust company or by a brokerage firm having a membership in one of the major stock exchanges. The transfer agent will not effect trans- fer of this bond unless the information concerning the transferee requested below is provided. Name and Address: PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF TRANSFEREE. (Include information for all joint owners if the bond is held by joint account) ( Insert number for first named transferee if held by joint account) -30- Attaclumt C Section 23. Amendments: Consent of Registered Owners. (a) The City, from time to time and at any time, sub- ject to the conditions and restrictions in this Bond Resolu- tion, may by and through its Board, adopt one or more supple- mental or amendatory resolutions which thereafter shall form a part hereof, for any one or more or all of the following purposes: (i) To issue Additional Bonds or Junior Lien Bonds; (ii) To add to the covenants and agreements of the City contained in this Bond Resolution, other covenants and agreements thereafter to be observed or to surrender, restrict or limit any right or power herein reserved to or conferred upon the City and the Board (including but not limited to the right to issue Additional Bonds) ; (iii) To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions contained in this Bond Resolution, or in regard to matters or questions arising under this Bond Resolution, as the City may deem necessary or desirable and not inconsistent with this Bond Resolution and which shall not have a material, adverse effect on the interests of the Registered Owners of the Bonds; (iv) To increase the size or scope of the System; and (v) To make such modifications in the pro- visions hereof as may be deemed necessary by the City to accommodate the issuance of Additional Bonds or Junior Lien Bonds which (a) are "Capital Appreciation Bonds" or "Zero Coupon Bonds" to the extent permitted by law or (b) are variable rate bonds, but only if such modifications, in the writ- ten opinion of nationally recognized bond counsel filed with the Board, do not result in materially diminishing the security hereby granted to the Registered Owners of any Outstanding Bonds. Any amendment or supplemental resolution or resolution autho- rized by the provisions of this Section 23(a) may be adopted by the City, by and through its Board, without the consent of or notice to the Registered Owners of any of the Outstanding Bonds, notwithstanding any of the provisions of Section 23(b) -below. -31- Attachment C (b) With the consent of the Registered Owners of not less than fifty one percent (51%) in principal amount of the Bonds then outstanding the City, by and through its Board, may from time to time and at any time adopt a resolution or resolutions supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Bond Resolution or of any supplemental resolution; provided, however, that no such supplemental resolution shall (i) extend the fixed maturity of any Bond, change a Mandatory Redemption Requirement for any series of Bonds or reduce the rate of interest thereon or extend the time of payment of interest, or reduce the amount of the principal thereof, or reduce or extend the time for payment of any premium payable on the redemption thereof, without the consent of the Registered Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of Registered Owners of the Bonds required to approve any such supplemental resolu- tion, or (iii) deprive the Registered Owners of the Bonds, except as aforesaid, of the right to payment of the Bonds from the Net Revenues, without the consent of the Registered Owners of all the Outstanding Bonds or, (iv) cause any modi- fication or reduction of the lien on or pledge of the Net Revenues or the funds or accounts established hereunder. No amendment may be made under this Section 23(b) which affects the rights or duties of the insurer of any of the Bonds with- out its consent. It shall not be necessary for the consent of the Registered Owners under this Section 23(b) to approve the particular form of any proposed supplemental resolution, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the adoption by the City of any supplemental resolution pursuant to the provisions of this Section 23(b) , the City shall cause the Transfer Agent to mail a notice by regis- tered or certified mail to the Registered Owners of all Outstand- ing Bonds at their addresses shown on the bond register or at such other address as is furnished in writing by such Registered Owner to the Transfer Agent setting forth in general terms the substance of such supplemental resolution. Section 24 . Sale of the Bonds . The Series 1989A Bonds shall be sold at a public sale published in accordance with law in a publication to be selected by the General Manager pursuant to a Notice of Sale in substantially the following form: -32- Attachrent C OFFICIAL NOTICE OF SALE $14,000,000 CITY OF LANSING, BY AND THROUGH THE BOARD OF WATER AND LIGHT OF THE CITY OF LANSING COUNTIES OF INGHAM, EATON AND CLINTON, STATE OF MICHIGAN WATER SUPPLY AND ELECTRIC UTILITY SYSTEM REVENUE BONDS, SERIES 1989A SEALED BIDS for the purchase of the above bonds will be received by the undersigned at the Secretary's office, Board of Water and Light of the City of Lansing, 123 W. Ottawa, Lansing, Michigan, on the 24th day of October, 1989, until 3:00 o'clock, P.M. , Eastern Daylight Time, at which time and place said bids will be publicly opened and read. IN THE ALTERNATIVE: Sealed bids will also be received on the same date and until the same time by an agent of the undersigned at the office of the Municipal Advisory Council of Michigan, 1158 First National Building, Detroit, Michigan 48226, where they will be publicly opened and read. Bids opened at Detroit, Michigan, will be read first. Bidders may choose either location to pre- sent bids and good faith checks, but may not present bids at both locations. BOND DETAILS: The bonds will be fully registered bonds of the denomination of $5,000 each or any integral multiple thereof not exceeding the aggregate principal amount for each maturity at the option of the purchaser thereof, dated October 1, 1989, and will bear interest from their date payable on July 1, 1990, and semi- annually thereafter. Said bonds will mature on the first day of July as follows: Year Amount Year Amount 1990 $1,000,000 1998 $1,000,000 1991 1,000,000 1999 500,000 1992 1,000,000 2000 1,000,000 1993 1,000,000 2001 1,250,000 1994 250,000 2002 1,250,000 1995 1,000,000 2003 1,250,000 1996 1,000,000 2004 500,000 1997 1,000,000 -33- Attadwient C PRIOR REDEMPTION: Bonds maturing on and after July 1, 1998, are subject to redemption prior to maturity, in whole or in part in such order as the City shall determine and by lot within a matur- ity, in integral multiples of $5,000, at the following redemption prices (expressed as percentages of the principal amount of the bonds or portions of bonds to be redeemed) , plus accrued interest to the redemption date: Period During Which Redeemed (Both Dates Inclusive) Redemption Price July 1, 1997, to June 30, 1999 102% July 1, 1999, to June 30, 2001 101 July 1, 2001, and thereafter 100 Not less than thirty days ' notice of redemption shall be given by mail to the registered holder at the registered address. Bonds or portions of bonds called for redemption shall not bear inter- est after the redemption date, provided funds are on hand with the bond registrar and paying agent to redeem the same. INTEREST RATE AND BIDDING DETAILS: The bonds shall bear interest at a rate or rates not exceeding 9% per annum, to be fixed by the bids therefor, expressed in multiples of 1/8 or 1/20 of 1%, or both. The interest on any one bond shall be at one rate only and all bonds maturing in any one year must carry the same interest rate. The difference between the highest and lowest interest rate on the bonds shall not exceed two percentage points. No proposal for the purchase of less than all of the bonds or at a price less than 98% of their par value will be considered. BOND REGISTRAR AND TRANSFER AGENT: The bonds shall be payable as to principal in lawful money of the United States upon surrender thereof at First of America Bank-Central, in the City of Lansing, Michigan, the bond registrar and transfer agent. Interest shall be paid to the registered owner of each bond as shown on the registration books at the close of business on the 15th day of the calendar month preceding the month in which the interest payment is due. Interest shall be paid when due by check or draft drawn upon and mailed by the bond registrar and transfer agent to the registered owner at the registered address. The City of Lansing may from time to time as required designate a successor bond registrar and transfer agent. REGISTRATION OF BONDS: The successful bidder shall notify the bond registrar and transfer agent in writing of the denominations and initial registered owners of the bonds on or before 5:00 P.M. , October 31, 1989. In the event of the failure so to notify the bond registrar and paying agent within such time, the City shall specify the denominations of bonds to be delivered to the -34- Attachment C successful bidder and the successful bidder shall be the initial registered owner thereof. PURPOSE AND SECURITY: The bonds are issued under the provisions of Act 94, Public Acts of Michigan 1933, as amended, and a bond resolution (the "Bond Resolution" ) adopted by the Board of Water and Light of the City of Lansing ( "Board" ) on September 26, 1989, for the purpose of paying part of the cost of remodeling, updating and extending the life of the water supply and electric utilities of the City of Lansing, Michigan, and to pay issuance costs for the bonds . The bonds, except to the extent payable from bond proceeds, are payable solely from the net revenues of the water supply and distribution and electric, heat and steam generating and distri- bution systems (the "System" ) of the City of Lansing and any additions thereto, and a statutory first lien on the net revenues of the System has been established by the Bond Resolution. The Board has covenanted and agreed to fix and maintain at all times while any of such bonds shall be outstanding such rates for service furnished by the System as shall be sufficient to provide for payment of the necessary expenses of operation, maintenance and administration of the System, of the principal and interest on all of said bonds when due, and to provide for such other expenditures and funds for the System as are required by the Bond Resolution. The City, acting through its Board, anticipates that it will issue Water Supply And Electric Utility System Revenue Bonds, Series 1989B in an aggregate principal amount not to exceed $3,000,000, the proceeds of which will be used for the same pur- pose as the proceeds of the Series 1989A Bonds, which bonds shall be secured on a parity with the Series 1989A Bonds. The rights and remedies of bondholders may be affected by bank- ruptcy laws or other creditors' rights legislation now existing or hereafter enacted. GOOD FAITH: A certified or cashier's check in the amount of $280,000 drawn upon an incorporated bank or trust company and payable to the order of the Treasurer of the Board of Water and Light must accompany each bid as a guarantee of good faith on the part of the bidder, to be forfeited as liquidated damages if such bid be accepted and the bidder fails to take up and pay for the bonds. No interest shall be allowed on the good faith checks and checks of the unsuccessful bidders will be promptly returned to each bidder's representative or by registered mail. The good faith check of the successful bidder will be immediately cashed and payment for the balance of the purchase price of the bonds shall be made at the closing. -35- Attactanmt C AWARD OF BONDS: The bonds will be awarded to the bidder whose bid produces the lowest interest cost computed by determining at the rate or rates specified in the bid, the total dollar value of all interest on the bonds from November 1, 1989, to their matur- ity and deducting therefrom any premium. LEGAL OPINION: Bids shall be conditioned upon the approving opinion of Dickinson, Wright, Moon, Van Dusen & Freeman, attor- neys of Lansing and Detroit, Michigan, a copy of which opinion will be printed on the reverse side of each bond, and the original of which will be furnished without expense to the pur- chaser of the bonds at the delivery thereof. The fees of Dickinson, Wright, Moon, Van Dusen & Freeman for services rendered in connection with such approving opinion are expected to be paid from bond proceeds. Except to the extent necessary to issue its approving opinion as to the validity of the bonds, Dickinson, Wright, Moon, Van Dusen & Freeman has made no inquiry as to any financial information, statements or material contained in any financial documents, statements or materials that have been or may be furnished in connection with the authorization, issuance or marketing of the bonds, and accordingly will not express any opinion with respect to the accuracy or completeness of any such financial information, statements or materials. TAX MATTERS: The approving opinion of bond counsel will include an opinion to the effect that under existing law, the interest on the bonds (a) is excluded from gross income for federal income tax purposes, (b) is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; such opinion will note, however, that certain cor- porations must take into account interest on the bonds in deter- mining adjusted net book income (adjusted current earnings for taxable years beginning after December 31, 1989) for the purpose of computing such alternative minimum tax. The opinion set forth in clause (a) above will be subject to the condition that the City of Lansing comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code" ) , that must be sat- isfied subsequent to the issuance of the bonds in order that interest thereon be (or continue to be) excluded from gross income for federal income tax purposes . Failure to comply with certain of such requirements could cause the interest on the bonds to be included in gross income retroactive to the date of issuance of the bonds. The City of Lansing has covenanted to comply with all such requirements. Bond counsel will express no opinion regarding other federal tax consequences arising with respect to the bonds . The City of Lansing has not designated the bonds as "qualified tax-exempt obligations" for purposes of Section 265(b) (3) of the Code. -36- Attachment C The successful bidder will be required, as a condition of deliv- ery of the bonds, to certify the "issue price" of the bonds within the meaning of Section 1273 of the Code. The form of an acceptable certificate will be provided by bond counsel. In addition, the approving opinion of bond counsel will include an opinion to the effect that under existing law, the bonds and the interest thereon are exempt from all taxation in the State of Michigan except inheritance taxes and taxes on gains realized form the sale, payment or other disposition thereof. CUSIP: CUSIP numbers will be imprinted on all- bonds of this issue at the issuer's expense. An improperly printed number will not constitute a basis for the purchaser to refuse to accept delivery. DELIVERY OF BONDS: The City of Lansing will furnish bonds ready for execution at its expense. Bonds will be delivered without expense to the purchaser at New York, New York, Chicago, Illinois, or Detroit, Michigan. The usual closing documents including a certificate that no litigation is pending affecting the issuance of the bonds, will be delivered at the time of the delivery of the bonds. If the bonds are not tendered for deliv- ery by twelve o'clock noon, Eastern Standard Time, on the 45th day following the day of sale, or the first business day there- after if said 45th day is not a business day, the successful bidder may on that day, or any time thereafter until delivery of the bonds, withdraw his proposal by serving notice of cancella- tion, in writing, on the undersigned, in which event the City of Lansing shall promptly return the good faith deposit. Payment for the bonds shall be made in Federal Reserve Funds. Accrued interest to the date of deliver of the bonds shall be paid by the purchaser at the time of delivery. FINANCIAL CONSULTANT: Further information with respect to said bonds may be obtained from First of Michigan Corporation, 26th Floor, 100 Renaissance Center, Detroit, Michigan 48243. Telephone: ( 313) 259-2600. THE RIGHT IS RESERVED TO REJECT ANY OR ALL BIDS. ENVELOPES containing the bids should be plainly marked "Proposal for Bonds . " City of Lansing, by and through the Board of Water and Light of the City of Lansing By: -37- Attachment C The Series 1989B Bonds shall be sold at private sale in amounts not to exceed either $5,000 of principal amount of Current Interest Bonds or $10,000 of amount of Capital Appreciation Bonds due at maturity per purchaser. Section 25. Bond Resolution to Constitute Contract. In con- sideration of the purchase and acceptance of any and all of the Bonds authorized to be issued hereunder by those who shall hold the same from time to time, this Bond Resolution shall be deemed to be and shall constitute a contract between the City and the Registered Owners from time to time of the Bonds and the lien and pledge made in this Bond Resolution and the covenants and agree- ments herein set forth to be performed on behalf of the City shall be for the equal benefit, protection and security of the Registered Owners of any and all of the Bonds, all of which, regardless of the time or times of their authentication and delivery or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof except as expressly provided in or permitted by this Bond Resolution. Section 26 . Conflicting Resolutions . All resolutions or orders, or parts thereof, in conflict with the provisions of this Bond Resolution are repealed. Section 27 . Severability and Paragraph Headings. If any section, paragraph, clause or provision of this Bond Resolution shall be held invalid, the invalidity of such section, paragraph, clause or provision shall not affect any of the other provisions of this Bond Resolution. The paragraph headings in this Bond Resolution are furnished for convenience of reference only and shall not be considered to be a part of this Bond Resolution. Section 28. Publication and Recordation. This Bond Resolu- tion shall be published in full in The State Journal, a newspaper of general circulation in the City of Lansing qualified under State law to publish legal notices, promptly after its adoption, and shall be recorded in the minutes of the Board and such recording authenticated by the signatures of the Chairman and the Secretary. Section 29 . Effective Date. This Bond Resolution shall become effective immediately upon its adoption. -38- Attadinent C Adopted and signed on the 7f day of 1989. r Chairnidn SecrEU ADOPTED: YEAS Commissioners.Belen, Evans, Jessop, McComb, Sebolt, Strolle, Williams, and Hassler -8 NAYS None ABSTAIN None -39- Attachment C STATE OF MICHIGAN ) ) SS: COUNTY OF INGHAM ) I, the undersigned, the Secretary of the Board of Water and Light of the City of Lansing, do hereby certify that the forgoing is a true and complete copy of a resolution duly adopted by the Board of Water and Light of the City of Lansing at a regular meeting held on September 26, 1989, the original of which is on file in my office. I further certify that the notice of said meeting was given in accordance with the provisions of the Open Meetings Act. Secretar Board of Water and Light of the City of Lansing -40- Attaclment C EXHIBIT A Series 1989A Bonds July 1 Principal Amount 1990 $1,000,000 1991 1,000,000 1992 1,000,000 1993 1,000,000 1994 250,000 1995 1,000,000 1996 1,000,000 1997 1,000,000 1998 1,000,000 1999 500,000 2000 1,000,000 2001 1,250,000 2002 1,250,000 2003 1,250,000 2004 500,000 Attachient C EXHIBIT B Series 1989B Current Interest Bonds July_ 1 Principal Amount 1994 $700,000 1999 850,000 Attachment C EXHIBIT C Series 1989E Capital Appreciation Bonds July 1 Principal Amount at Maturity 2004 $450,000 JMW/32063/0014/AA7/gs LANSING BOARD OF WATER AND LIGHT Re: Resolution 89-9-14 MEMO: DATE: September 15, 1989 TO: Mr. Joe Pandy, Jr., Director and General Manager FROM: Dana W. Tousley, Treasurer/Controller SUBJECT: Defeasance of Ordinance 18A Our financial advisor, Mr. Bill Roche, with Bond counsel, Mr. Jud Werbelow, concurring, has recommended the defeasance of Ordinance 18A to clear the way for a new bond resolution. Defeasance involves putting sufficient securities and cash into an escrow account to pay the remaining bond principal and interest when due. The advantages and disadvantages of defeasing are enumerated in Attachment I. Implementation There are several steps required to do a defeasance. n The Commissioners approve a defeasance in concept and authorize the General Manager and Treasurer/Controller to take all necessary actions to defease the ordinance. 0 The City Council amends ordinance 18A to allow a defeasance. The original ordinance did not include a provision for defeasance. Attachment II is a copy of the proposed amendment. M Management nominates an escrow agent. Our current bond paying agent, First of America Bank, is recommended. ® Bond counsel, staff attorney and escrow agent draw up an escrow agreement. ® Management executes the escrow agreement. R1 Management deposits securities and cash with the escrow agent. a First of Michigan prepares a verification letter and Ernst and Whinney confirms the transaction. Cost There are many combinations of securities and cash which will equal the $4,306,000 bond principal and interest still due. First of Michigan chose 4 scenarios and determined that the most efficient method of transacting the defeasance will be to purchase open market treasuries and transfer an 11.75% coupon Treasury currently in the bond reserve account. Attachment III is a copy of their recommendation. Much depends upon the price of treasury securities on the date the monies are deposited. The cost of the four scenarios ranged from $3,899,000 to $4,051,000. The actual mechanics of the deposit of escrow monies should be left to management. RECOMMENDATION That Ordinance 18A be defeased. Attachment IV is a resolution for commissioner consideration at the 9/26/89 meeting. The resolution approves the concept of a defeasance and authorizes management to take all necessary steps to execute the transaction. Attachments cc: J. Wolfe, L. Wilhite, J. Werbelow, B. Roche, D. Cluley, J. Strickler /wcF/hnndc/HPfoaCP ATTACHMEVr D ADVANTAGES AND DISADVANTAGES OF DEFEASANCE OF OUTSTANDING BONDS Advantages: 1. Old indentures replaced by a new, modernized indenture, incorporating the following features: a. Debt service reserve requirements eliminated or reduced. b. More liberalized additional bonds test. c. Annual coverage requirements reduced from 1.25 x to 1.20X. d. Flow of funds changed to conform with current Act 94, re- ducing accounting burden for LBWL. e. Definition of net revenues to include investment income. f. Depreciation, Extension and Improvement Fund ("DEI") eliminated. g. Relax operation and maintenance fund requirements. 2. Assets in Bond Reserve Account ("BRA") and DEI, as of June 30, 1988, equal $7,089,762 vs. $4,000,000 in bonds outstanding. 3. Approximately $3,200,000 in the above two funds will be freed up upon execution of the defeasance. 4. Funds in the Operation and Maintenance Fund and Bond and Interest redemption fund will be freed up 5. No lost investment income since a large portion of the funds in the BRA & DEI are already invested in U.S. Government Securities. Disadvantages 1. Annual Escrow Agent fee of approximately $500 - 1,000 for two years. 2. Cost of escrow verification of $2,000. AZTACHM= D DICKINSON, WRIGHT, MOON, VAN DUSEN a FREEMAN COUNSELLORS AT LAW SUITE 200 215 SOUTH WASHINGTON SQUARE LANSING, MICHIGAN 48933 TELEPHONE(3171 371.1730 800 FIRST NATIONAL BUILDING 525 NORTH WOODWARD AVENUE DETROIT.MICHIGAN 46226 P.O.BOX 509 TELEPHONE(313)Z23-3500 BLOOMFIELD HILLS,MICHIGAN 46013 TELEPHONE(313)a4aM300 SUITE 801 1001 LSTREET.NW. WASHINGTON.D.C.20036 TELEPHONE(202)457-0160 JUDSON WERBELOW September 11, 1989 Mr. Dana W. Tousley, HAND DELIVERED Treasurer/Controller Board of Water and Light 123 West Ottawa Street Lansing, MI 48901 Dear Dana: Enclosed is a draft amendment of Ordinance No. 18A to provide for the defeasance of the Ordinance No. 18A and release of the lien on the net revenues of the system. Before the enclosed draft is submitted to the City Council and the City Attorney, I would like to get the comments of Bill Roche, Larry Wilhite and yourself. Ver truly yours, Judso Werbelow JW/ljd Enclosure cc: William Roche Kester K. So, Esq. Lawrence Wilhite, Esq. JMW/sec/32063-14/LZ4 Al1AGHMEN'1' D Ordinance No. 18A, adopted by the City Council of the City of Lansing on October 5, 1970, as amended and supplemented, is hereby amended to add the following: Section 28. This Ordinance, as amended and supplemented by Ordinance No. 18B and Ordi- nance No. 26A, shall be defeased and the lien on the Net Revenues of the System established by this Ordinance shall be released and dis- charged upon the deposit, in trust, with the paying agent or other bank or trust company, of sufficient cash or direct obligations of the United States of America not redeemable at the option of the issuer thereof, or a combi- nation of cash and obligations of the United States of America, the principal and interest payments on which, without reinvestment of interest, come due at such times and in such amounts as to be fully sufficient to pay, when due, the principal of, redemption premium, if any, and interest on all bonds outstanding under this Ordinance on the stated maturity date or early redemption of such bonds, if called for early redemption or irrevocable instructions have been given to call such bonds for early redemption. This Ordinance is declared to be immediately effective upon its adoption. Terry J. McKane, Mayor Rita Bowman, Clerk 1989 . Adopted and signed this day of , JMW/32063/0014/AA8/ljd -2- ATTACHMENT D ORDINANCE AMENDING ORDINANCE NO. 18A WHEREAS, on October 5, 1970, the City Council of the City of Lansing adopted Ordinance No. 18A entitled An Ordinance To Provide For Extending, Enlarging And Improving The Existing Electric Utility System Of The City of Lansing: To Provide For The Issuance And Sale Of Revenue Bonds Under The Provisions Of Act 94, Public Acts Of Michigan, 1933, As Amended To Defray Part Of The Cost Thereof; To Provide For The Retirement And Security Of The Bonds To Be Issued Hereunder; To Provide For The Combining Of The City Utilities For Electric Light And Power, Steam And Steam Heat And Water Supply And Distribution: And To Provide For Other Matters Relative To Said System And Said Bonds ( "Ordinance No. 18A" ) ; and WHEREAS, Ordinance No. 18A has been amended and supple- mented by Ordinance Nos. 18B and 26A. WHEREAS, Ordinance No. 18A does not contain provisions for the defeasance of Ordinance No. 18A and the release of the lien imposed by Ordinance No. 18A on the net revenues of the facilities of the City of Lansing for the supply and distribution of water, the generation and distribution of electric light and power and of steam heat and the improvements thereto; and WHEREAS, Section 22 of Ordinance No. 18A provides that the City of Lansing may amend Ordinance No. 18A to cure any omis- sion therein. THE CITY OF LANSING ORDAINS: ATIACHI= D First of Michigan 100 Renaissance Center/26th Floor Corporation Detroit, Michigan 48243 Nsmb.n N—Yo,k Sm 6 E,cn+nga gnu. VSVE.STtLNTS Tel: 313-2 5 9 2 6 00 September 1, 1989 Mr. Dana W. Tousley Treasurer Board of Water and Light 123 West Ottawa Lansing, MI 48933 RE: DEFEASANCE OF SERIES 1973 AND SERIES 1976 BONDS Dear Mr. Tousley: We have completed our preliminary analysis as to the most cost effective method of defeasing the above referenced bond issues. As the following cash flows detail, the most effi- cient method of transacting the defeasance will be to pur- chase open market Treasuries and transfer the 11.75% coupon Treasury the Board currently has deposited in the reserve account. This scenario is illustrated in Section 4. The following is a summary of each section of the attached analysis: Section 1 Assumes the Board will purchase two open market U.S. Treasury Notes and provide an initial cash deposit of $4,700 to the escrow account, with no transfer of existing securities. Total escrow cost = $3,900,500 Section 2 Assumes transfer of both the existing Treasuries from the reserve account into the escrow account, plus the purchase of one additional open market Treasury. In addition, a cash deposit of $5, 525 would be required. Total escrow cost = $4, 048, 600 1„ Detroit • New York ¢tea N • Ann Arbor • Battle Creek • Birmingham • Clarkston • Coldwater• Dearborn • E.Lansing • Flint• Flint(Genesse Valley) . 1.`)M!CH!GAN • Frankenmuth • Grand Blanc • Grand Rapids • Grosse Pointe • Harbor Springs • Holland • Kalamazoo • Lapeer - • Midland • Mt.Clemens • Port Huron • Rochester • Saginaw • St.Joseph • Southfield • Southgate • Traverse City - Troy • Warren • West Bloomfield ATTACHMERF D Section 3 Assumes the transfer of the $2 , 600, 000 7 . 875% coupon Treasury only, plus the purchase of one additional open market treasury. A cash deposit of $1, 750 would be re- quired. Total escrow cost $4,051, 125 Section 4 Assumes the transfer of the $700,000 11.75% coupon Treasury only, plus the purchase of two open market Treasuries and a cash deposit of $4 , 350. This combination of the 11.75% Treasury the Board already owns, plus the purchase of the additional securities produces the lowest escrow cost of $3, 899,000. Section 5 Synopsis of advantages and disadvantages to the Board in proceeding with this transaction. First of Michigan would recommend either of the options il- lustrated in Sections 1 and 4 since the costs are very close. I will contact you on Tuesday, September 5 to dis- cuss the cash flows in more detail, and procedures as- sociated with this type of transaction. Sincerely, FIRST F CHIGAN CORPORATION r i G nn M. Watson Assistant 'Vice President Public Finance Department GMW/ld CC: Judson Werbelow, Esq. Septemt,�r 26, 1989 162 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER. JESSOP RESOLVED, That Resolutions 89-9-1 and 89-9-2 (Administrative) , of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER BELENS-- SECONDED BY COMMISSIONER WILLIAMS RESOLVED, That Resolutions 89-9-3 through 89-9-7 (Administrative Services) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER STROLLS RESOLVED, That Resolutions 89--9-8 through 89-9-11 (Human Resources) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER JESSOP RESOLVED, That Resolutions 89-9-12 through 89-9-15 (Treasurer/Controller) of. the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER WILLIAMS RESOLVED, That Resolutions 89-9-16, 89-9-17, and 89-9-18 (Water) of the General Manager's Recommendations be approved. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: MEALS ON WHEELS. The Friends for Life recently presented a plaque to the Board of Water and Light in appreciation for the voluntary efforts of forty BWL employees in the Meals on Wheels program. 163 September 26, 1989 CAPITAL AREA UNITED WAY (CAUW) . The BWL is participating in CAUW's "Loaned Executives" program. It was announced that Electric Utility Coordination Director Dick Sevic is on loan at the Capital Area United Way during the fall fund raising drive. The BWL has assumed the responsibility of publishing campaign progress reports in the LANSING STATE JOURNAL as well as posting thermometer signs throughout Lansing. ORGANIZATIONAL CHART. An updated BWL organizational chart reflecting . ...... .............. ........_._......................... ........ the order of succession was handed out. AVERAGE ELECTRIC RATES. A copy of a survey of electric rates of Michigan utilities, conducted by the counsel for the Michigan Municipal Electric Association (MMEA) , was handed out. The 1988 rate comparison survey indicates the following: (1) cooperatives have the highest average electric rates in the state--7.89 cents per kwh, (2) investor owned utilities--6.75 cents per kwh, and (3) municipals have the lowest cost--6.10 cents per kwh. The BWL showed an average of 5.23 cents per kwh. COMPETITION WITH CONSUMERS POWER CO. A copy of an article published in the September, 1989 issue of PROGRESS, which talks about "Munis on the March - 'CPCo faces challenges in its territory'" was handed out. Mr. Pandy noted that the article mentions the BWL in its discussion on expanding service beyond the city limits into adjoining townships. ELECTRIC SERVICE FOR CLUB MERIDIAN. The BWL has received a request from the Eyde Company to provide electric service to the Club Meridian development currently under construction. Marketing Division staff is negotiating with Meridian Township, to obtain a special permit to serve this area which extends outside of our franchise territory. An easement across Okemos school district property is also being secured. At this point, this project appears favorable. DEPARTMENT OF NATURAL RESOURCES (DNR) CONSENT ORDER RE: OTTAWA PLANT. __..._.. .... ..._. ..._ ..... .... ............ As previously communicated to the Commissioners, the Ottawa Plant has been the subject of negotiations with the DNR (Air Pollution Control Division) relative to (a) control program and testing and (b) opacity monitoring and reporting requirements. Mr. Pandy displayed visuals of proposed modifications to Ottawa Station and the estimated costs. A comparison of the original Draft Order, dated April 1.0, 1989 and the proposed Draft of Revised Consent Order dated September 12, 1989 was highlighted. Mr. Pandy stated that a Draft Consent Order will be submitted at the regular meeting of October 24, 1989, for approval. The DNR Commission will be considering the Consent Order on December 5, 1989. STATUS OF BWL COAL SUPPLY. The latest coal report shows the BWL has a 47 day supply. Mr. Pandy pointed out that the slow coal shipment problems have not necessarily been related to the United Mine Workers. Some problems experienced involved rail car shortages, and one producer had a quality problem with their coal testing. Mr. Pandy further reported that the annual coal pile inventory has been completed with a positive outcome. The Coal Pile Inventory Committee found that the BWL had 6,400 tons of coal more than what showed in the books, which is the equivalent of two additional days on hand. Sep,:em�er 26, 1989 164 LOW VOLTAGE RESIDENTIAL SECURITY LIGHTING PROGRAM. Several bidders ............._ _...................._..............._..........._....................... ... _ ............_................................................................................I................... were solicited for a Low Voltage Residential Security Lighting Program. Only one bidder responded. This program would be administered by a private company and referrals would be supplied by the BWL. The objective of the program is to develop off-peak night time electric load while satisfying the continuing need for security lighting (customer owned decorative yard lighting) in neighborhoods and on commercial property. DEPENDENT CARE NEEDS ASSESSMENT. At the November 22, 1988 regular .__...._._. ...... ......................._..__.....................__............._.................. ......._.. meeting, the Commissioners authorized an employee needs analysis for dependent care. The BWL Dependent Care Task Force has been working with the Michigan 4C (Community Coordinated Child Care) Association in reviewing the recommendations that resulted from the Dependent Care Needs Analysis conducted in March 1989. A copy of the Executive Summary was handed out for review. According to the report, 552 employees responded to the survey on dependent care needs, and 204 have young children--most of whom experience problems in managing the care of their young children. The summary includes seven recommendations to address the needs of employees with young children or elder dependents. An attachment was included with the summary outlining staff proposals to address the seven Executive Summary recommendations and costs. Mr. Pandy reported that staff proposals are well within the BWL's budget capability. He further noted that the BWL would not be subsidizing the program, but would be trying to facilitate it through the proposals submitted by staff. Mr. Pandy indicated he would hold off for two weeks in approving this program to allow sufficient time for Commissioner feedback. SHARE THE SUCCESS. The August Share the Success year-to-date total was ...I..." _................. ........... reported as 246 points. AUDITED FINANCIAL STATEMENTS. Mr. Pandy reported that the BWL received a clean audit for the period ended June 30, 1989. He noted that the BWL's net income is up by 23 percent. Mr. Ed Rebman, representing Touche Ross, was present to answer any questions regarding the audit. Mr. Rebman stated that there were no audit adjustments to the account and made no recommendations for improvements. He also reported that the audit did not include a management letter this year since no internal irregularities were found. In conclusion he added that there were no restrictions in their examination, and that staff was very cooperative and friendly. RIVERFRONT STUDY. Mr. Pandy will be contacting the City to communicate the Board of Commissioners' concern with the impact the results of the Riverfront Study could have on BWL properties and facilities being considered. 165 September 26, 1989 REMARKS BY BOARD COMMISSIONERS RIVERFEST. Commissioner Williams inquired if the response on the ...1............... ......._ ........... Riverfest electric parade was positive. General Manager Pandy and Communications and Marketing Director John Strickler reported that the sponsorship of this event was very successful with many favorable comments received. Mr. Strickler suggested that BWL sponsorship of the Riverfest electric parade be continued next year. DIAMOND REO SITE. Commissioner McComb spoke relative to the BWL's continued interest in a portion of the Diamond Reo site for a possible waste-to-energy facility. He remarked on the importance of conducting an extensive environmental impact analysis to address any potential issues that may be raised by the neighborhood association. Adjournment On motion of Commissioner Strolle, the Board adjourned at 7:35 p.m. As . Mary E. ova, Secretary Filed: September 29, 1989 RAa M. Bauman, City Clerir- November 28, 1989 174 Office, Board of Water and Light Lansing, Michigan Tuesday, November 28, 1989 The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belen, Evans, Jessop, McComb, Strolle, Williams, and Chairman Hassler -7 Absent: Commissioner Sebolt -1 Quorum The Secretary declared a quorum present. General Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) Invocation The Invocation and Pledge of Allegiance was given by Chairman Hassler. and Pledge BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Approval of Minutes . That minutes of regular cession of October 24, 1989 be approved as mailed. Adopted unanimously. Public Camients 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. Russell Greear speaks RE: Mr. Russell Greear, P.O. Box 12186, Lansing, stated that he is an the delayed payment charge independent advocate for the mentally handicapped. He spoke on the hardships the delayed payment charge creates for the mentally handicapped who are on fixed social security incomes. He added that something needs to be done to accommodate utility payment dates for the mentally handicapped to coordinate their billing due dates with the date they receive their checks. Commissioner Bel@n took exception to Mr. Greear's comments on the mentally handicapped. She commented that to earmark all of the mentally handicapped in the same condition would be an injustice. General Manager Pandy interjected that management is addressing the need to have the flexibility to accommodate various payment dates through the new Combined Billing System with an on-line target of July 1990. Until the new System is on-line, however, management does make manual arrangements on billing cycles to accommodate customers on fixed incomes who are experiencing certain hardships. Mr. Greear was asked to meet with Consumer Services Director Neal Housler for assistance in resolving his complaint. 175 November 28, 1989 11oyd Teets speaks RE: Mr. Lloyd Teets, 116 E. Elm Street, Lansing, spoke relative to his letter service shut-off at to the Board, dated November 16, 1989. He stated that he has had some 4501 Ingham St. problems with the City of Lansing due to the demolition of his home at 4501 Ingham Street. He complained that prior to the demolition., the BWL had turned off his electricity, removed the meter, and cut the line from the utility pole to his home at 4501 Ingham Street without his knowledge. Mr. Teets acknowledged the receipt of a letter, dated November 28, 1989, from Consumer Services Director Neal Housler in response to questions previously raised in a letter to staff, dated September 18, 1989. Mr. Teets agreed to meet with Mr. Housler to resolve any unanswered questions. Commissioner McComb remarked on the timeliness of staff's response to Mr. Teets' letter of September 18, 1989. COMMUNICATIONS Letter from Fred Porter of A letter, dated November 13, 1989, was received from Mr. Fred Porter, NAACP RE: informtion to be President of the Lansing Branch NAACP, advising of an upcoming annual requested from Purchasing request in January for information from our Purchasing Department on total Department dollars spent on goods and services with Black Suppliers. General Manage- Pandy and Administrative Services Director Terry Graham reported that the Purchasing Department has been taking an active approach in developing and improving the BWL's bidder list to include minority vendors. Mr. Pandy noted that the nature of the BWL's business does not allow a large volume of business with minority firms since major BWL purchases are for coal and electrical generation and transmission equipment. Discussion RE: suppliers Commissioner Belen requested a periodic verification of bids received from who have affirmative minority contractors or businesses. Commissioner Evans noted that the BWL action programs should do business with suppliers who have affirmative action programs. Mr. Porter's letter was received and placed on file. RESPONSES TO COMMENTS RECEIVED AT THE WATER RATE PUBLIC HEARING Staff responses to comments General Manager Pandy responded to the following comments received at the received at the Water Rate water rate hearing on November 14, 1989: Hearing • Kay Lovel - Her individual concern regarding a monthly water bill rather than a .large quarterly bill. was addressed through a manual procedure in the billing system. • Robert Homan, Manager of the Charter Township of Delhi - He concurred with proposed Rates I and 2; however, he opposed Rate 3 (Service Connection Fees) and the amount of increase for Rate 4 (Fire Hydrant Charges) . Mr. Pandy provided comparative cost data on Rate 3 and indicated that it was concluded after careful re-analysis that the Novernb& 28, 1989 176 proposed water service installation fees are justified and cost based. Secondly, the basis for increasing the fire hydrant fees is predicated on the fact that the BWL already receives a rate of return from fire protection service through fire protection customers, however, a return on equity has not been recovered from hydrant customers in the city and townships. • Comments were received from the Lansing City Council; Mayor Terry McKane; J. Patrick Babcock, Director of Social Services; David Wiener, representing State Representative David Hollister; Richard Baker; and Walter Jones, through his counsel, all addressed the issue of the elimination of the customer charge and putting all the costs into the commodity charge. Mr. Pandy stated that staff has re-examined this issue and has prepared four residential rate alternatives (see Attachment I) , all of which are revenue neutral, as an attempt to address the customer charge issue. Copies of the analysis, dated November 16, 1989, were handed out to interested parties in the audience and each option was summarized. • Mr. Pandy handed out a letter, dated November 17, 1989, which he received from William A. Waldron, Manager of Delta Engine Plant, Buick- Oldsmobile-Cadillac Group, G. M., urging the BWL and other municipalities to work cooperatively in the regionalization efforts of water sup?:ly and treatment. General discussion RE: water Mr. Pandy emphasized that the selection of the residential rate option is rates and alternative rate clearly a Board decision. He stated, however, that staff believes the options original Rate 1 as proposed should be approved for the following reasons: 1. There could be a General Service (Rate 2) implication if the residential rate is changed. Customers could be influenced to migrate from Rate 1 to Rate 2 or vice versa. 2. Rate No. 1 is cost justified (see Attachment II) . 3. Mr. Pandy also provided data for the Board's consideration of the rate options. Based on demographic data taken from the Market Opinion Research survey, 14.7 percent of the BWL's water customers are 65 years of age or older, and 32.9% earn $25,000 or less annual income. Commissioner McComb noted that the elderly should not solely be identified as needy individuals. Following discussion, the Commissioners concurred that economic hardships are not necessarily restricted to citizens age 65 and older, or persons on fixed incomes, but also to other customers who are on the poverty level. Chairman Hassler invited comments from the audience regarding discussion held on the proposed rates. Russell Greear comients Mr. Russell Greear agreed that the economic issue is not merely isolated on water rates to persons 65 years of age or older, but also for individuals who are physically and mentally handicapped and unable to work. 177 November 28, 1989 Walter Jones comments on Mr. Walter Jones stated that the City's sewerage rates do not water rates differentiate between residential or industrial customers. He remarked (1) that customers living in apartment complexes are receiving a break with the General Service Rate, and (2) that Both Governor Blanchard and Social Services Director Patrick Babcock have strongly urged the BWL to go along with the request received by the Lansing City Council. Lloyd Teets comments Mr. Lloyd Teets encouraged the Board to use good business sense regardless on water rates of what the political pressures might be. Jim Starr comments Mr. Jim Starr, counsel for Mr. and Mrs. Walter Jones, spoke on the fixed on water rates cost issue and encouraged the elimination of the customer charge by charging on a commodity used basis. He commented that the customer charge makes rates regressive, especially for individuals least able to pay. He suggested that all governmental agencies should take the needs of the poor into consideration. In closing, he remarked that the Board has the ability to approve a different rate structure that would be more compassionate for the poor. Discussion held by The Commissioners engaged in lengthy discussion relative to various Commissioners RE; various concerns. Commissionei J,�ssop spoke on 1,300 federal social programs concerns available to assist the needy. He stressed that the Board of Commissioners' responsibility is to see that the utility is operated and maintained in a businesslike manner. Commissioner Williams suggested the consideration of a water rate similar to the electric lifeline rate, using an income standard other than age. Commissioner Belen suggested allocating a certain sum of money to the General Manager for use in working with customers experiencing serious problems on an individual basis. Commissioner McComb suggested establishing a water bank, similar to the Energy Bank. Commissioners Evans and Strolle urged further analysis to determine what this utility can do to assist the needy. Board consensus to approve Following lengthy discussion, the Commissioners agreed to approve the water rates and meet as proposed water rates, subject to staff commitment to review the issues Committee of the Whole to raised by the Commissioners at a future Committee of the Whole meeting to review economic issues be held in three months and to make a recommendation within six months. discussed Formal action on Resolution 89-11-9 (water rates) was taken during the General Manager's Recommendation portion of the agenda. COMMITTEE OF THE WHOLE REPORT November 28, 1989 Comattee of the Whole Board of Commissioners Report RE: BESOC Energy Board of Water and Light Management System Lansing, Michigan The Committee of the Whole met with staff on November 14, 1989 to receive -asentation on study conclusions of the Brush Electric System Operating Center (BESOC) Energy Management System (EMS) , completed by the Macro Corporation. November 28, 1989 178 Present were Commissioners Belen, Evans, Jessop, Hassler, McComb, Strolle, and Williams. Absent was Commissioner Sebolt. Staff reported that the existing EMS has been enhanced several times since its installation in 1981 with both additions in hardware and increases in software functionality. The following concerns with the present system were detailed: a Equipment obsolescence • System maintenance/spare parts • Degrading system response • Outdated operating system • Functional limitations • Limited outside support • Limited expansion capacity The objectives of the study team, comprised of BESOC staff and Macro Corporation consultants, were to: • Review inadequacies of the EMS 0 Analyze possible corrections to inadequacies • Define BESOC operating requirements over the next 15 years • Identify the impact of implementing the Michigan Public Power Agency's (MPPA) energy dispatching function at BESOC 0 Recommend an optimal plan of action Study conclusions indicated the following: 1.. The existing Rockwell EMS System at BESOC is rapidly approaching the end of its useful life. 2. The fundamental concerns identified by MACRO are: A. Inability of the EMS to fulfill current and anticipated operational requirements. B. Risk of failure and sustained down time due to equipment obsolescence. 3. The system upri ade alternatives examined would provide some short term relief for E14S performance concerns. However, many of the existing EMS functional limitations would not be addressed, nor would the severity of equipment obsolescence be significantly reduced. 4. None of the upgrades would allow procurement of a new EMS to be dramatically delayed. 5. The long lead time required to replace an EMS makes it critical that the BWL proceed with total system replacement as soon as possible. 179 November 28, 1989 6. Future applications in a replacement EMS as well as in the existing Rockwell system are: A. Full graphics capabilities B. Operator training simulators C. Energy scheduling study abilities D. Database management data exchange capabilities 7. Replacement of the existing 21 Rockwell supplied RTU's should be effected over the next ten years. 8. Replacement of the existing Rockwell supplied GCU's should be effected within five years. 9. Implement BESOC facility expansion to accommodate expanded applications and the EMS transition period. Depending upon the EMS vendor selected, a new UPS system may also be required. 10. Increase BESOC support staff. 11. In order to assure maintainability of the existing Rockwell EMS until 1993, purchase of Rockwell spare parts when available is recommended. 12. The incremental impact on a new BWL EMS of MPPA is estimated to be $551,000 in 1989 dollars. 13. A recommended budget supplied by MACRO for this entire effort is $9,502,000 in 1989 dollars. Following a lengthy question and answer period, the Commissioners moved the following resolution for presentaei.on to the Board on November 28, 1989: Resolution 89-11-1 REPLACEMENT OF BESOC ENERGY MANAGEMENT SYSTEM Res. 89-11-1 RESOLVED, The Board of Commissioners recommends :he Replacement of BESOC Fnergy implementation of the recommendations outlined in the BESOC Management System Assessment Report, dated July 1989, submitted by the MACRO Corporation, at a total cost of $9,502,000 (1989 dollars) . Respectfully submitted, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN That the Committee of the Whole Report, including Resolution 89-1i-1, be approved as submitted. Adopted unanimously. Novernber 28, 1989 180 WATER&LIGHT WORKING HARD TO SERVE YOU P.O. Box 13007 123 W. Ottawa Street Lansing,MI 48901-3007 517.371.6000 MAQ-)N1 U I 11/16/89 Residential Rate Alternatives - revenue neutral with no change in forecast sales Proposed - 1990 $4.25/cust/mo + $0.955/ccf 1991 $4.25/oust/mo + $1. 05/ccf Option A - Eliminate Customer Charge 1990 $1.47/ccf 1991 $1.58/ccf Option B - Reduce Customer charge TO $2.00/cust/mo for all Residential 1990 $2. 00/cust/mo + $1.23/ccf 1991 $2.00/cust/mo + $1.33/ccf Option C - Senior Citizen Rate similiar to Electric Rate 21 (13% discount/ccf @ 4ccf) & (8% premium/ccf Q 8ccf) 1990 $4.25/cust/mo + $0.72 first 4 ccf + $1. 43 all over 4 ccf 1991 $4. 25/cust/mo + $0.79 first 4 ccf + $1. 57 all over 4 ccf Increase residential rate to cover subsidy to seniors 1990 $4. 25/cust/mo + $0. 96/ccf 1991 $4, 25/oust/mo + $1. 055/ccf Option D - Combined option B and C 1990 $2. 00/oust/",lo + $0.92 first 4 ccf + $1. 85 all over 4 ccf 1991 $2 . 00/cust/mo + $0. 98 first 4 ccf + $2.00 all over 4 ccf Increase residential rate to cover subsidy to seniors 199(% $2. 00/cust/mo + $1 .235/ccf 1991 $2. 00/cust/mo + $1.335/ccf 1990 1991 Class Cust Sales Revenue Cust Sales Revenue Res City 36,240 3,488,000 $5,179,293 36,965 3,500,557 $5,560,804 Res Sui,)n 4,198 487,000 747,124 4,282 488,753 804,749 Treasurer/Controller:PAW 181 ATTAG-IvM H November 28, 1989 LANSING, MICHIGAN BOARD OF WATER & LIGHT Why Pay a Monthly Customer Charge? Many ratepayers wonder why a customer charge shows up on their water bill each month, even when they didn't use very much water. The answer is that the water utility must bear ongoing ex- penses to serve its customers each month whether they use just a little water or a lot. These ongoing expenses are known as customer-related costs. For example, the meter reader makes his rounds every month to write down the usage shown on each customer's water meter. The utility then uses that information to prepare and send a bill to the customer. Later, it must collect and record customers' payments each month as bills are paid. All this costs money. In addition, the utility incurs capital and operating costs for each customer's meter and service line. These costs are imposed on the utility by each customer and cannot be avoided, even if one customer uses much less water than an- other. The monthly customer charge is the utility's way to recover these individual customer-related costs in away which follows the in- currence of these costs. 0 ATTAal'M II - continued Lansing Board of Water and Light Monthly Service Charge Number of customers by meter size weighting Residential Commercial Industrial factor City Suburban City Suburban City Suburban Total 5/8" 418 ,268 47 ,020 21,092 2,155 131 0 561,966 1.2 3/4" 5, 676 765 5,123 954 54 0 20,241 1.6 i" 1, 622 118 12, 474 2,022 88 0 46, 932 2.9 1 1/2" 36 3 6, 882 1,007 141 1 53,827 6.7 2" 3,879 443 167 0 49,042 10. 9 3" 689 81 34 0 20,803 25.9 41' 794 118 211 13 52,256 46.0 6" 101 12 104 13 21,160 92.0 10" 48 13, 800 287 .5 70,002 per equiv FY 1988 5/8" meter per month Amortization of Plant Cost (Depr) 1,530,393 21.86 1.82 Water Treatment Labor 907,074 12.96 1.08 Service & Main Maintenance (1/3 of Actual) 455,342 6.50 0.54 Customer Accounting (Metering, Billing Etc. ) 739,036 10.56 0.88 3,631,846 51.88 4.32 l N Treasurer/Controller:PAW 14-Nov-89 wrates.wkl 183 ^rovember 28, 1989 November 28, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE 'Res. No. 89-11-2 The Share the Success Management Committee (STSMC) recommends that the Board approve the following modified measures: Share the I. Heat Rate (BTU/KWH) Success measures for Heat Rate Base Goal Range and Electric 10,883 16,834 > 10,883 10,883-10,857 10,856-10,834 < 10,834 Availability 0 Points 20 Points 30 Points 40 Points modified II. Electric Availability W Base Goal Range 84.9 85.7 < 84.9 84.9 - 85.3 85.4 - 85.7 > 85.7 0 Points 14 Points 21 Points 28 Points -------------------- The reason for this request is two-fold: 1 . When the FY 1990 base and goal for heat rate were calculated last spring, an error was made. The error was discovered prior to Board approval of the STS Plan for FY 1990 but inad- vertently was not communicated to the STSMC. 2. Both the Heat Rate and Electric Availability base and goals were calculated on the planned maintenance schedule which called for the 45 MW Eckert Unit #3 being scheduled out for major maintenance. Eckert Unit #5 turbine is showing some signs of distress and needs its major overhaul in FY 1990 rather than FY 1991 . Therefore, the schedule has been changed to overhaul Eckert #5 in FY 1990 and Eckert #3 in 1991. Attached is a copy of correspondence from Roger Ophaug, Advisor to the Employee Measures Committee. Also attached is the Sales Variance vs. Heat Rate Table. -------------------- Novenber 28, 1989 184 ADMINISTRATIVE (Continued) Res. No. 89-11-3 Approve the following resolution to retain special legal Law Firm of Spiegel counsel of Spiegel and McDiarmid of Washington, D.C. in connec- and NUiarndd retained tion with pending Federal Energy Regulatory Commission cases and in connection with related energy matters. pending FE C cases (Palisades Generating Co. WHEREAS, there are currently cases pending before the Federal and Consumers Power Co.) Energy Regulatory Commission (FERC) (Palisades Generating Com= pany, Docket No. ER89-256, and Consumers Power Company, Docket No. EC89-10) , the outcome of which will affect the Board of Water and Light's (Board's) power supply rights or related interests; and WHEREAS, it is advisable and in the best interest of the Board to retain special legal counsel to represent the Board in connection with those or similar cases and to take other actions on the Board's behalf as necessary to secure the Board's power supply rights; and WHEREAS, the law firm of Spiegel & McDiarmid is concurrently representing or expects to represent numerous other Michigan cities and entities (including consumer-owner electric utilities such as the Michigan Public Power Agency, the Michigan South Central Power Agency, and the Wolverine Power Supply Coopera- tive) which have energy-related interests similar to those of the Board in connection with the pending FERC cases and related power supply matters; and WHEREAS, the joint legal representation by Spiegel & McDiarmid of the Board and other cities or entities with similar interests in connection with these energy-related matters will likely result in enhanced effectiveness, cost reductions and mutual benefits; and WHEREAS, a written agreement (the "Retention Agreement") has been prepared to retain and authorize Spiegel & McDiarmid, with the oversight of a steering committee as provided by the Retention Agreement, to take all reasonable actions on behalf of the Board in connection with the pending FERC cases and related power supply matters; and WHEREAS, it has been found that all of the terms of the proposed Retention Agreement are acceptable to the Board and protective of the Board's best interests. NOW THEREFORE BE IT RESOLVED that: 1 . The General Manager and Secretary are hereby authorized on behalf of the Board to sign and enter into the "Retention Agreement" retaining and authorizing the law firm of Spiegel & McDiarmid to represent the Board as special counsel as provided by and for the purposes set forth in the Retention Agreement. 185 Nova ber 28, 1989 ADMINISTRATIVE (Continued) (Res. No. 89-11-3) 2. All resolutions in conflict with this resolution are hereby repealed. 3. Expenditures of Board of Water and Light funds beyond $300,000 cannot be made without further approval of the Board. -------------------- Larry Wilhite, Staff Attorney, has requested approval of the City Attorney and City Council. -------------------- COMMUNICATIONS AND MARKETING Res. No. 89-11-4 It is recommended that the Commercial and Apartment Commercial and Conservation Service (CACS) Plan, adopted by the Board Apartnent Conversation on December 18, 1984, be rescinded effective immediately. Service Plan recsinded. -------------------- Title VII of the National Energy Conservation Policy Act, which required the implementation of a CACS plan, has been repealed in its entirety. -------------------- HUMAN RESOURCES Res. No. 89-11-5 That Ms. Eva Lydia Duncan, a Customer Service Representative Eva Lydia Duncan in Customer Services, be awarded $191 .40 for her suggestion received Suggestion (1989-199) to code Form 77 to indicate whether the meter is for Auard. a lawn sprinkler. Currently, the Representative must call the Water Department in order to verify the meter information. This has been eliminated by implementing this procedure. -------------------- By using this suggestion, it is estimated that the BWL will save $1 , 164 the first year. -------------------- November 28, 1989 186 HUMAN RESOURCES (Continued) Res. No. 89-11-6 That Ms. Lynn McKinstry, a Steam Production Operator at Moores Lynn McKinstry Park Operations, be awarded $2,651. 19 for her suggestion ( 1989- receives Suggestion 187) , to use the material from the pyrite collection which will Award. have enough carbon to burn in the stoker spreaders. The stoker spreaders have the capacity to burn chunks of coal that cannot be broken down by the pulverizers. This method would eliminate waste because we are using the coal as much as possible before disposal. -------------------- By using this suggestion, it is estimated that the BWL will save $25,761 .92 the first year. -------------------- STEAM Res. No. 89-11-7 That the Board authorize the General Manager to enter into a Steam Supply Steam Supply Agreement with General Motors Corporation, BOC Car Agreement with Group. General Motors - BOC authorized. The aforementioned Agreement becomes effective November 25, 1989 and shall remain in effect through December 31 , 1999 unless cancelled by either party with three and one-half (3 1/2) years advanced written notice. The Agreement is subject to renewal for additional five (5) year periods by mutual consent of both parties. This Agreement sets the cost of steam supplied to BOC in accordance with an Industrial Steam Service Rate #2. This rate will be available to any customer which qualifies for an Industrial Service Rate. This Agreement replaces the 1975 BWL/ BOC Steam Supply Agreement under which BOC's steam rates were tied directly to Moores Park Station's expenses. -------------------- BOC has verbally committed to signing the Steam Supply Agreement pending final review by both BWL and BOC legal staff. -------------------- 187 November 28, 1989 TREASURER/CONTROLLER Res. No. 89-11-8 1 . That the attached Industrial Steam Service Rate No. 2 be Indusrial Steam made the subject of a public hearing prior to further con- Service Rate No. 2 sideration by the Board of Commissioners. to be the subject of a public hearing 2. That a public hearing to solicit public input on this matter on 2-13-90. be set for Tuesday, February 13, 1990 at 5:30 p.m. , in the Board of Water and Light Office Building, 123 West Ottawa Street, and that the Secretary of the Board be directed to file with the City Clerk, as required in the City Charter, information regarding pending changes in the steam rate structure. -------------------- A discussion of the advantages and disadvantages of this rate schedule is included with the material regarding the BOC steam contract (proposed Resolution 89-11-7) . The purpose in making this an established rate is to make it available to any other large industrial customer who may locate within our steam district. -------------------- Res. No. 89-11-9 That the attached water rate schedule be adopted and applied to Water Rate Schedules all water used or services rendered on or after January 1 , 1990. 1, 2, 3, and 4 adopted for all Rate No. 1 -- Residential Water Service water used or service Rate No. 2 -- General Water Service rendered on or after Rate No. 3 -- Water System Connection Fees 1-1-90. Rate No. 4 -- Fire Service and Fire Hydrant Charges The water rate schedules adopted October 28, 1986 and effective November 12, 1986 are to be rescinded. -------------------- WATER Res. No. 89-11-10 It is recommended that the Rules and Regulations for Water Water Rules and Service be revised to include the new charges for service Regulations Sheets installation. These will be included in the Rules as Sheet 8.01.1 and 8.01.2 No. 8.01 . 1 and 8.01 .2. revised. -------------------- Respectfully submitted, Joseph Pandy, Jr. D General Manager JP/bg November 28, 1989 188 BOARD OF WATER AND LIGHT LANSING, MICHIGAN PROPOSED INDUSTRIAL STEAM SERVICE RATE NO. 2 Availability This rate is available to any customer engaged in mining or manufacturing and receiving steam at any BWL plant wall at a minimum gauge pressure of 250 psi. Service will be provided upon customer entering into a steam supply contract with the BWL. Terms and conditions of the contract may vary due to customer requirements and the impact on BWL facilities. Monthly Rate Demand Charge: $0.80 per pound per hour (lb/hr) for all ib/hrs of contract demand. $0.70 per pound hour (lb/hr) for all lb/hrs exceeding contract demand. Commodity Charge: $3.76 per thousand pounds (Mlb) Fuel Cost Adjustment: 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 178.70 ($1.787) cents per million BTU's. (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's for each billing month shall be the average delivered cost of fuel consumed during the preceding calendar month. Minimum Charge: Monthly Demand Charge above. Tax Adjustment: Bills shall be increased within the limits of any governmental authority or political subdivision which levies taxes, license fees, 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. 189 November 28, 1989 Rate No. 2 (continued) Billing Demand The billing demand is the maximum demand (lb/hrs) supplied during the 15 minute period of maximum use during the month, but not less than the contract demand. Delayed Payment Charge A delayed payment charge of 5% of the unpaid balance, excluding delayed payment charges, shall be added to any bill which is not paid on or before the due date. Rules and Regulations Service under this rate is subject to the Board of Water and Light Rules and Regulations for Steam Service which are incorporated herein by this reference. .November 28, 1989 1% BOARD OF WATER AND LIGHT, LANSING, MICHIGAN Effective January 1, 1990 RESIDENTIAL WATER SERVICE - RATE NO. 1 Re: Resolution #89-11-9 Availability - This rate is available to any single family residence or residential duplex served by one meter. Separately metered lawn sprinkling systems used for individual residential properties are also covered by this rate. Monthly Rate - Shall be computed as follows: Customer Charge: $4.25 per customer per month, and Commodity Charge: Effective 1-1-90 $0.955 per 100 cubic feet used. Effective 1-1-91 $1.05 per 100 cubic feet used. Power and Chemical Cost Adjustment - The power and chemical cost adjustment shall consist of an increase or decrease of 0.1 cents per CCF billed for each 0.1 cent increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5 cents per CCF. The cost per CCF for each billing period shall consist of the weighted average cost of chemicals, electricity, steam and oil used in pumping and treatment facilities during the period. Period shall be defined as follows: Monthly bill - one month period preceding the month billed by two months. Bimonthly bill - two month period preceding the month billed by two months. Quarterly bill - three month period preceding the month billed by two months. Suburban Surcharge - For all residential customers situated outside the boundaries of the City of Lansing, a 10 percent surcharge shall be applied to the total of the customer charges and commodity charges including any power and chemical cost adjustment. Minimum Charge - Minimum charge per month shall be the above customer charge. Tax Adjustment - 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, operation, or the production and/or sale of water, monthly bills will be increased to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Application Charge - A $6.00 charge shall be added to the first regular bill for all customers turning on service at a residence irrespective of prior service with the BWL at a different address. 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's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. November 28, 1989 191 BOARD OF WATER AND LIGHT, LANSING, MICHIGAN Effective January 1. 1990 GENERAL WATER SERVICE - RATE NO. 2 Re: Resolution #89-11-9 Availability - This rate is available to any customer served on the BWL's water system. Service taken under this rate is not available for resale. Monthly Rate - Shall be computed as follows: Customer Charge 5/8" meter $4.25 3" meter 95.63 per customer per month 3/4" meter 5.95 4" meter 170.00 1" meter 10.63 6" meter 340.00 1 1/2" meter 24.65 8" meter 595.00 2" meter 40.38 10" meter 807.50 Commodity Charge: Effective 1-1-90 $.955 per 100 cubic feet for the first 5000 cubic feet used, and $.87 per 100 cubic feet for all use greater than 5000 cubic feet. Effective 1-1-91 $1.05 per 100 cubic feet for the first 5000 cubic feet used, and $0.91 per 100 cubic feet for all use greater than 5000 cubic feet. Power and Chemical Cost Adjustment - The power and chemical cost adjustment shall consist of an increase or decrease of 0.1 cent per CCF billed for each 0.1 cent increase or decrease in the average cost of power and chemicals required to deliver treated water to the customer's meter above or below 17.5 cents per CCF. The cost per CCF for each billing period shall consist of the weighted average cost of chemicals, electricity, steam and oil used in pumping and treatment facilities during the period. Period shall be defined as follows: Monthly bill - one month period preceding the month billed by two months. Bimonthly bill - two month period preceding the month billed by two months. Quarterly bill - three month period preceding the month billed by two months. Suburban Surcharge - For all general service customers situated outside the boundaries of the City of Lansing, a 10 percent surcharge shall be applied to the total of the customer charges and commodity charges including any power and chemical cost adjustment. Minimum Charge - Minimum charge per month shall be the above customer charge. Tax Adjustment - 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, operation, or the production and/or sale of water, monthly bills will be increased to offset any such cost and thereby prevent other customers from being compelled to share such local increases. Application Charge - A $6.00 charge shall be added to the first regular bill for all customers turning on service at a location irrespective of prior service with the BWL at a different address. 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's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. November 28, 1989 192 BOARD OF WATER AND LIGHT, LANSING, MICHIGAN Effective January 1, 1990 WATER SYSTEM CONNECTION FEES - RATE NO. 3 Re: Resolution #89-11-9 System Connection Fees - The following schedule of fees shall apply to all new. water service connections made to mains. This fee shall not apply to active services which are being replaced. Size Service Schedule Connection to Main of Fees Effective 1-1-90 Effective 1-1-91 3/4" $ 500.00 $ 560.00 1" 600.00 672.00 1 1/2" 800.00 896.00 2" 950.00 1,064.00 3" 1,350.00 1,512.00 4" 1,700.00 1,904.00 6" or larger 2,450.00 2,744.00 The above system connection fee shall be paid at the time application is made to have the service installed from the curb box to the building. 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's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. November 28 1989 193 EOARD OF WATER AND LIGHT, LANSING, MICHIGAN Effective January 1, 1990 FIRE SERVICE AND FIRE HYDRANT CHARGES - RATE NO. 4 Re: Resolution #89-11-9 Fire Services - A fire service line will be installed to a fire hydrant(s) or a customer's detector check valve in accordance with the schedule of charges for water system connection fees (Rate 3) and the current water service installation charges set forth in the Rules and Regulations for Water Service. The location of the detector check valve shall be determined by the Water Distribution Engineering Department. Fire service lines shall be used for fire protection purposes only. No additional charge will be made for water used for testing and fire purposes. The customer shall maintain the detector check valve and fire protection system connected thereto in good condition in compliance with Section 34-9, Repair and Protection of Equipment, of the Code of the City of Lansing, Michigan. Fire Service Charges - Water supply and maintenance of a fire service line shall be provided in accordance with the following schedule of charges: Size Fire Service Monthly Charge 4" or smaller $ 31.00 6" 61.00 8" 106.00 10" 192.00 12" 253.00 Delayed Payment Charge - A delayed payment charge of 5% of the unpaid balance of fire service charges, excluding delayed payment charges, shall be added to any bill which is not paid on or before the due date. Fire Hydrant Charges - Water supply and maintenance of public and private fire hydrants shall be provided for an annual charge of $168.00 per hydrant. Rules and Regulations - Service under this rate is subject to the BWL's latest edition of Rules and Regulations for Water Service which are incorporated herein by this reference. November 28, 1989 Re: Resolution # 89-11-10 Board of Water and Light Sheet 8.01.1 RULES AND REGULATIONS FOR WATER SERVICE 5. cont'd CHARGES Service Installation Charges - All water services 2 inch and less shall be installed from the water main to the building in accordance with the following schedule of charges: From water main to curb box: Size Service Line Installed Schedule of Charges Effective 01/01/90 Effective 01/01/91 3/4" $ 500.00 $ 560.00 1" 600.00 672.00 1 1/2" 800.00 896.00 - 2" 1,000.00 1,120.00 The above charge shall be paid at the time application is made to have the service installed from the main to the curb box. From the curb box to the building: Size Service Schedule of Charges Line Installed Per Linear Foot 3/4" $ 8.75 1" 9.25 1 1/2" 10.50 2" 11.00 The above charge shall be paid at the completion of the installation. All water services greater than 2 inch, all multiple services or services replaced or revamped at customer's request, shall be installed at cost (time and material including indirect charges and applicable system connection fee) . Other Charges - In addition to the above service installation charges, the following charges will be added when applicable: 1. Surface Restoration - The customer shall be charged for all necessary surface restoration including, but not limited to, pavement or sidewalk replacement, lawn work, and any sand backfill. Adopted November 28, 1.989 Effective January 1, 1990 195 November 28, 1989 Board of Water and Light Sheet 8.01.2 RULES AND REGULATIONS FOR WATER SERVICE 2. Winter Construction - Services installed between December 1 and March 31 shall be subject to a charge of $3.00 per linear foot installed from the curb box to the building. 3. Additional Service Footage - Water service shall be installed in the shortest and most direct manner from the water main in the street, to a point immediately inside the exterior building wall fronting the street. Where it is necessary to enter the building at any other location, an additional $1.00 per linear foot will be charged for all footage installed beyond the front building line. The water service must end either in a full basement or above the floor in a building having no basement. 4. Outside Meter - Where required, underground water meter pits will be installed in accordance with the following schedule of charges. Size of Service Meter Pit Charge 3/4" $185.00 1" 226.00 1 1/2" 720.00 2" or larger Time and Material 5. Sleeve Under Floor - Where a customer installs a sleeve under the floor and the BWL installs a pipe within the sleeve, the charge for this pipe will be $1.00 per linear foot. New Water Services -- In addition to the Service Installation Charges and Other Installation Charges of this section, all new water service connections made to mains shall be subject to System Connection Fees in accordance with the current schedule of charges approved by the Board (Rate 3) . Adopted November 28, 1989 Effective January 1. 1990 Novenber 28, 1989 1% BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Res. 89-11-2 and RESOLVED, That Resolutions 89-11-2 and 89-11-3 89-11 3 (Administrative) of the General Manager's Recommendations be Approved approved.. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER BELEN Res. 89-11-4 RESOLVED, That Resolution 89-11-4 (Communications & Approved Marketing) of the General Manager's Recommendations be approve%'. Adopted unanimously. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER EVANS Res. 89-11-5 and RESOLVED, That Resolutions 89-11--5 and 89-11-6 (Human 89-11-6 Resources) of the General Manager's Recommendations be Approved approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER BELEN Res. 89-11-7 RESOLVED, That Resolution 89-11-7 (Steam) of the General Approved Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-11-8 and RESOLVED, That Resolutions 89-11-8 and 89-11-9 89-11-9 (Treasurer/Controller) of the General Manager's Approved Recommendations be approved. Adopted unanimously. BY COMMISSIONER McCOMB-- SECONDED BY COMMISSIONER BELEN Res. 89-11-10 RESOLVED, That Resolution 89-11-10 (Water) of the General Approved Manager's Recommendations be approw"'I. Adopted unanimously. 197 November 28, 1989 VIDEO PRESENTATION ON ENERGY FITNESS PROGRAM. __ ....... ......... Mr. LeRoy Harvey, Coordinator of the Energy Fitness Program for Urban Options, presented a ten minute video which provided a general overview of the components of the Energy Fitness Program. Urban Options is a non-profit agency in East Lansing Michigan, which serves residents throughout the Greater Lansing Community. They currently operate an energy demonstration house at 135 Linden Street, East Lansing. Mr. Harvey thanked the Commissioners for the BWL's contribution in supporting their efforts to serve over 1000 households this year. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: ERICKSON STATION OVERHAUL. The 18-month overhaul of Erickson Station . .........._ .......... ........................ has been completed very successfully. Mr. Pandy congratulated employees of Production Maintenance, Erickson Station and Project Engineering who assisted for a job well done. ECKERT STATION TUBE LEAKS. While Erickson Station was out, two tube leaks developed on Eckert Station units. This necessitated running Ottawa Station for the month of October. The availability of Ottawa Station versus buying power saved the BWL approximately $70,000 during that period in lieu of buying power. LANSING 2000. Mr. Pandy advised the Commissioners that he spoke this afternoon to the members of Lansing 2000 on the BWL's plans for the Ottawa Station. He reported on the status of Engineering Planning's Power Resource Study. He also reported on future power resource needs projected for the years 2000-2003. COAL SUPPLY. The BWL's coal supply is now up to 57 days. Export sales have begun again in November. SPECIAL LEGAL COUNSEL. The Lansing City Counsel approved a resolution on November 27 to retain the Washington, D. C. law firm of Spiegel and McDiarmid to represent the BWL in intervention proceedings before the Federal Energy Regulatory Commission (FERC) and other other regulatory agencies relative to the proposed sale of Consumers Power Co. 's Palisades Nuclear Plant (see Resolution 89-11-3) . Mr. Pandy handed out a press release issued today announcing the BWL's involvement, along with other public power utilities, in Michigan in an action to prevent approval of anti-competitive electric rates. Mr. Pandy noted that the utilities are also asking FERC to deny the Midland Cogeneration Venture's request to sell electricity at rates substantially above cost. ACTIVE EMPLOYEE COMPENSATION ANALYSIS. An analysis presenting active employee compensation costs by specific type of compensation per hour paid and pe_ hour worked, for the fiscal year ended June 30, 1989 was handed out and summarized. November 28, 1989 198 REVENUE B ... summarized. Mr. Pandy reported that the $14 million issue (Series 1989A) sold out at a net interest cost of 6.66%. The mini bonds (Series 1989B) for five years due on 7/1/94 sold out for $700,000. The ten-year bonds due 7/1/99, sold to 362 people at $760,500 from an offering of $850,000. The CAB's (capital appreciation bonds) due on 7/1/04 sold to 75 people for $155,254.70 from an offering of $448,723.95. Of the total $16 million offering, the BWL sold $15,432,956.78. COMMITTEE OF THE WHO .... _ .._.... ". meeting is scheduled for Tuesday, December 5 at 5:30 p.m. , at the Hazel Street Training Center. Agenda items are: (1) To review the District Cooling Feasibility Study conclusions and (2) To receive a presentation on Strategic Planning to the year 1995. REMARKS BY BOARD COMMISSIONERS Cctmnts re: Commissioner Williams inquired if customer service hours are being flexible office hours varied to accommodate the changing lifestyles of consumers. He cited the example of workina couples often finding it difficult to visit the business office during the normal 8:00 a.m. to 5:00 p.m. work schedule. General Manager Pandy responded that this concern has been addressed by the Level of Service Forecast Task Force in their strategic planning. Further information will be provided at the December 5 Committee of the Whole meeting. Consumer Services Superintendent Neal Housler noted that staff experimented with extended business hours some years ago, however, customer traffic was found to be minimal. Conments re: Water The Commissioners commented favorably on the positive approach taken by rate process staff in offering alternatives for the water rate process. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER HASSLER Excused absence - That the absence of Commissioner Sebolt be excused. Adopted unanimously. Adjournment On motion of Commissioner Strolle, the Board adjourned at 7:13 p.m. ,A&Vtl Mary E. Sova, Secretary Filed: December 1, 1989 Rita M. Bauman, City Clerk BOARD UY WR-UER & LIGHT NOVEMBER 28, 1989 199 December 19, 1989 Office, Board of Water and Light Tuesday, December 19, 1989 Lansing, Michigan The Board of Commissioners met in regular session at 5:30 p.m. The meeting was called to order by Chairman Hassler. Roll Call Present: Commissioners Belen, Jessop, McComb, Sebolt, Strolle, Williams, and Chairman Hassler -7 Absent: Commissioner Evans -1 Quote The Secretary declared a quorum present. General ?Manager Pandy, Secretary Sova and Executive Staff members were present. (An attendance list is filed in the Secretary's Office.) . Invocation and Pledge The Invocation and Pledge of Allegiance was given by Chairman Hassler. BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER SEBOLT Approval of Minutes That minutes of regular session of November 28, 1989 be approved as mailed. Adopted unanimously. Public Camients 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. Beverly LePard appeals Ms. Beverly LePard, 1007 W. Northrup, Lansing, was present to appeal a disputed water will decision rendered on November 17, 1989, by an Independent Hearing Officer regarding her disputed water billing in the amount of $40.91. Ms. LePard claimed that she decided to pursue the appeal procedure after receiving the Hearing Officer's report which omitted a staff recommendation made during the hearing to waive the water bill in question. She stated her position on the accuracy of the account analysis,and cited a bad experience she encountered several years ago with an electric bill, which made her suspicious with the current water billing. Chairman Hassler explained the BWL's obligation to all customers and noted that she had been provided with a complete account analysis on her disputed billing. He further noted that the testing of the meter indicated the meter to be operating within acceptable industry standards. Following lengthy discussion, General Manager Pandy suggested resolving Ms. LePard's appeal by refunding the difference between the $40.91 disputed amount and her average usage of approximately $35.00 for a net difference of $6.00. Mr. Pandy emphasized that although there were no errors found in the numbers, he considered it "good business" to resolve this matter for $6.00 in the interest of saving time for both Ms. LePard and staff. Ms. LePard accepted the offer. Commissioner McComb commented that he would hope this compromise would not establish a precedent for future appeals which may come before the Board. Mr. Pandy assured the Commissioners that details of this case would be reviewed to explore ways to resolve similar disputes at the staff level. 200 December 19, 1989 COMMITTEE OF THE WHOLE REPORT December 19, 1989 Camittee of the Board of Commissioners Whole Report Board of Water and Light Lansing, Michigan RE: 1) District Cook Fea- The Committee of the Whole met with staff on December 5, to receive sibility Study presentations on the following items: 2) Long Range Strategic Planning 1 District Cooling Feasibility Study Conclusions 3) Hazel St. 'Raining 2, Long-Range Strategic Planning Center 3. Other Related Topics 4) EPA Notice of Violations for Present were Commissioners Belen, Jessop, Hassler, McComb, Strolle, and Ottawa and Moores Williams. Absent were Commissioners Evans and Sebolt. Park Stations S) Proposal RE' District Cooling Feas_ibil_itx Study MSU's energy _._..... requirements The consulting firm of SFT, Inc. was retained by the Steam Utility to 6) Capital City evaluate the economic and engineering feasibility of providing cooling a Riverfest services to customers within the Lansing Downtown area by district cooling plant (DCP) . A DCP would provide chilled water from a central plant by means of an underground chilled water distribution system, and would deliver it to individual buildings for their air conditioning uses. The study addressed many factors such as marketability of the product, impact on the summer steam load, impact on the electric system, siting of the plant and distribution system, system design, probable capital and operations costs, reliability and environmental and other regulatory impact on a preliminary feasibility aaDistrict cooling noted that the preliminary feasibility of developing Plant has been demonstrated within a conservative framework of assumptions. Lengthy discussion ensued on this topic. The Commissioners concurred that a District Cooling Program would not only benefit the Central District economic customers and the Board of Water and Light, but would support development in Downtown Lansing. Following discussion, the Commissioners recommended the following resolution for action by the Board, 201 December 19, 1989 Resolution 89-12-1 Res. 89-12-1 AUTHORIZATION TO PROCEED WITH PHASE I OF THE Authorization to proceed DISTRICT COOLING PROGRAM with Phase I of the Dis- trict Cooling Program RESOLVED, That staff be authorized to proceed with Phase I of the District Cooling Program by making a firm commitment to proceed with establishing a Cooling District Utility. This would involve in-house staff developing a more detailed evaluation of the project and securing preliminary commitment from the identified potential Phase I customers. The Board will be asked to approve additional funds in the near future to be used for engineering analyses to more precisely identify capital investment costs. Long-Range Strategic Planning Five strategic planning task forces were formed to take a long-term focus out to the year 1995. The findings of the following task forces were presented to the Commissioners for their input and consensus. o Level of Service Forecast o Industry Environmental Forecast o Workforce Forecast o Financial Forecast o Possible New Ventures Other Items ..........................................._......... General Manager Pandy briefed on the status of the following items: I. Hazel Street Training Center. Modifications required to bring the center in compliance with City code were outlined as follows: Fire Code requirements $ 95,000 Barrier free building access 235,000 Safety Training Office modifications 100,000 Total $430,000 Following discussion, staff agreed to further investigate State and City requirements for barrier free building access. 2. Consent Order with Michigan Department of Natural Resources (MDNR) , regarding Ottawa and Moores Park Stations. The BWL was informed by the MDNR that Region 5 of the U. S. Environmental Protection Agency (EPA) has asserted its authority. The EPA rejected the Consent Order negotiated between the BWL and MDNR. Consequently, the BWL must reach an agreement with EPA no later than December 15, 1989, as to whether or not the BWL is going to enter into a (1) Consent Order, (2) Administrative Order, or (3) meet compliance. 202 December 19, 1989 3. Michigan State University (MSU) Energy. The State of Michigan is in the process of evaluating alternatives for supplying MSU's energy requirements. The BWL has been asked by the State to submit a proposal by December 20, 1989, indicating the BWL's interest in supplying MSU's present and future steam and electric requirements. General Manager Pandy advised that staff has proceeded to request proposals from consulting engineering firms to assist in identifying alternatives for the BWL to supply MSU with present and future steam and electric requirements, fully identify the capital cost requirements and annual operating and maintenance costs associated with each alternative, utilize identified costs to develop commodity charges for BWL supplied steam and electricity, and provide a proposal for BWL Energy Supply to MSU. Following discussion, the Commissioners concurred with staff that this would be an excellent venture for the BWL. 4. Capital City Riverfest. General Manager Pandy advised that the Festival Manager of Capital City Riverfest has requested the renewal of the BWL's sponsorship of the Electric Float Parade for fiscal year 1990. Following discussion, the Commissioners concurred with the $5,000 advertising expense on terms comparable to the 1989 Riverfest agreement. Respectfully submitted, Gerald W. Williams, Chair Pro Tem Committee of the Whole BY COMMISSIONER BELEN-- BY COMMISSIONER SEBOLT That the Committee of the Whole Report, including Resolution 89-12-1, be approved as submitted. Adopted unanimously. 203 'ice ber 19, 1989 PERSONNEL COMMITTEE REPORT Personnel Ccandttee Board of Commissioners December 19, 1989 Report RE: improve- Board of Water and Light ments to retiree Lansing, Michigan benefits The Personnel Committee reports it met on December 19, 1989 to discuss the following items: 1. Possible inflationary adjustment options to retiree pensions. 2. Increase in Medicare Part B reimbursement. 3. Availability of retiree participation in the employee/retiree paid vision care program. Following review and discussion, the committee adopted the following resolution and recommends Board approval: Resolution 89-12-11 Res. 89-12-11 RE: IMPROVEMENTS TO RETIREE BENEFITS I. Monthly pension in- ___.. crease effective RESOLVED: 1-1-91 2. Medicare reimburse- 1. That effective January 1, 1991, the monthly ment increased to pension now paid to pensioners, who retired prior to $20 per month January 1, 1986, be increased by effective 1-1-90 percentage difference between 1.55oandothee e si the on 3. Vision insurance multiplier in effect at the time of retirement, to a option available maximum adjustment of $125.00 0 to retirees at per month. V..sted pensioners are excluded from this increase. Further, their cost that an adjustment be considered again in 1995. 2. That Medicare reimbursement for eligible pensioners and spouses be increased to $20.00 per month effective January 1, 1990. 3. That vision insurance be available to retirees at their cost effective as soon as practical. Respectfully submitted, E. Lane Jessop, Chairman Personnel Committee BY COMMISSIONER JESSOP-- SECONDED BY COMMISSIONER SEBOLT That the Personnel Committee Report, including Resolution 89-12-11, be approved as submitted. Adopted unanimously. 204 December 19, 1989 sion to Staff presentation RE: General M the p, duePtodtimegcommitmentsBbyrBWL staffsmembers, to an BWL proposal to State modify p the order o f business in e s ss s overview of staffs proposal to the State of Michigan on Michigan State of Michigan on NBU energy alternatives University's energy alternatives. Mr. Pandy reported that at the December 5, 1989 Committee of the Whole meeting, he indicated staff would endeavor to retain an outside engineering consultant to assist in identifying alternatives for the BWL to supply MSU with energy requirements. The tight time frame did not nts allow December 20, those thisaprojecttwased to takenmont the solely deadline byBWL date off De Decem staff. Steam Utility Director Joette Woodard-Yauk, Electric Planning General Supervisor Doug Wood, and General Supervisor of Water and Steam Planning the contents of the BWL Sue McCormick briefed the Commissioners on proposal to be submitted to the State of Michigan on December 20, 1989. Their presentation covered the (1) Executive Summary, (2) MSU Generic capabilities and requirements for steam and electric, advantages to MSU of interconnection with the BWL, and (4) Alternative BWL proposals. The Commissioners commended staff members who assisted in this project, The Commissioners icularly for taking on the ambitious task of working in an extremely partight schedule. 205 December 19, 1989 Recommendations Board of Water and Light of Director and Lansing, Michigan General Manager Dear Ladies and Gentlemen: The following items are recommended for your approval: ADMINISTRATIVE Res. No. 89-12-2 In accordance with Article II, Section 2. 1 of the Board's Rules of Administrative Procedure, it is requested that the Board meeting following list of dates be adopted as the meeting schedule schedule for for the Board of Water and Light (BWL) for the ensuing six first six (6) months. months of 1990 This schedule is subject to change as a result of date conflicts with rescheduled City Council meetings. Further, that a notice of the meeting schedule be published in the LANSING STATE JOURNAL the week of January 1, 1990. The following is the schedule of regular meetings of the Board of Commissioners of the BWL commencing at 5:30 p.m. for the first six months of 1990: 1990 January 23 Tuesday February 27 Tuesday March 27 Tuesday April 24 Tuesday May 22 Tuesday June 26 Tuesday -------------------- Res. No. 89-12-3 The Board approve Amendment No. 1 to the Partial Require- ment Power Supply Agreement between BWL and Southeastern Approval of Amendment Michigan Rural Electric Cooperative (SEMREC) dated December No. 1 to the Partial 2, 1986. Requiranent Power Supply Agreement Amendment No. 1 extends the term of with SII�IRFL the Agreement from December 31, 1992 to December 31, 1999 and replaces existing Appendix A and Appendix B with Appendix A-1 and Appendix B-1, which specify a new schedule of minimum capacity and energy purchases by SEMREC and a new schedule of capacity charges. The Amendment No. 1 has been approved by the Board of Directors of SEMREC. -------------------- 206 December 19, 1989 ADMINISTRATIVE (Continued) uced (Res. No. 89-12-3) While this Amendment No• itwwillill rresultesult linradlong term revenues to the BWL in 1990-1992, Mr- benefit to the BWL by increased rev enues through 1999. - Wolfe's memo dated 12/7/89 along with a Comparison of Current & Proposed SEMREC Capacity Charges is enclosed. -------------------- Res. No. 89-12-4 That the BWL enter into a contract with Michigan Public Power Agency (MPPA) for the sale of partial requirements capacity and energy for the calendar year 1990 in amounts Approval of contract mutually agreed to by the parties. The capacity charges with KTA for sale per month and the energy is billed at BWL of partial require- is $3.50 per kW p meets capacity and average out-of pocket cost plus 10$ for the three previous andenergy for FY 1990 months. MPPA will resell this capacity and energy of its member cities who now purchase wholesale power rom another supplier. Those cities are Charlevoix, Chelsea, Eaton Rapids, Harbor Springs, Petoskey and Portland. -------------------- 1990 estimated revenues are: Capacity charge: $469,000 Energy charge: 470,400 Total Revenues: $939,400 Those sales are estimated to yield a net profit of about $469,000 to BWL. A chart showing the Schedule of Capacity Requirements for 1990 is enclosed. Res. No. 89-12-5 That the BWL enter into a transportation contract with the Norfolk Southern Railroad (NS) and the as tGrand Trunk Weste stern Approval of a trans- Railway (GTW), subject to approval portation contract Legal Counsel. The contract particulars are as follows: with the Norfolk year, commencing on Souther Railroad 1. Term of one (1) y January 1 , 1990 through December 31 , 1990. and (hand Trunk Western Railvzy 2. Volume commitment shall be a minimum Of 25,000 tons. 3. Rates to be held firm and free of escalation for the entire contract period. -------------------- By entering into this contract with NS and GTW, the BWL will be able to increase its base of potential Spot suppliers. It is expected that competition among the Spot suppliers will be enhanced. The anticipated minimum savings to the BWL during the contract period will be approximately $12,000. -------------------. 207 Decanter 19, 1989 HUMAN RESOURCES Res. No. 89-12-6 That Ms. Sheryl D. Bowie, Customer Service Representative, be awarded $180.38 for her suggestion ( 1990-2) to write on Sheryl Bowie the turn-off order the application number followed by the receives suggestion letters "LO". Currently, the Customer Assistance Depart- award ment has an automatic leave-on procedure for rental unit owners not wanting their services disconnected. The Customer Assistance Department has to verify that a leave- on order has been made when they receive a turn-off order from the Electric Meter Department. This suggestion will save time for both the Electric Meter and Customer Service Departments by not having to verify files. -------------------- By implementing this suggestion, it is estimated the BWL will save $1 ,053.78 the first year. -------------------- Res. No. 89-12-7 That Mr. Jack Jaquette, Work Dispatcher Supervisor, be awarded $220.60 for his suggestion (1990-12) for a new work Jack Jaquette card listing all types of jobs completed by crew members. receives suggestion Currently, the supervisor writes on the back of the card afford all work and locations of jobs that crew members perform each day. The designed card is saving the supervisor time by only having to mark appropriate boxes. -------------------- By implementing this suggestion, it is estimated the BWL will save $1 ,456.00 the first year. -------------------- Res. No. 89-12-8 That Ms. Michelle Joiner and Ms. Eva Lydia Duncan, Customer Michelle Joiner and Service Representatives, be awarded $145.25 (to be divided Eva Lydia Duncan equally) for their suggestion (1989-225) to give BESOC the receive suggestion application number along with the address when calling in a award turn on. By writing application numbers on slips, the Group Leader will save time from having to go through the files to locate the application. -------------------- By implementing this suggestion, it is estimated the BWL will save $702.52 the first year. -------------------- 208 Decanber 19, 1989 PENSION Res. No. 89-12-9 That George D. Ling, Station Shift Supervisor at Erickson Station, be placed on monthly pension of $1 ,508.67 effec- tive December 1 , 1989. He has selected option VI with the George Ling if his wife, ,Karen J. Ling, receives suggestion provision that after his death, per month award survives him she will receive 70% or $1 ,056.07 for the rest of her life. Mr. Ling gahas worked for the BWL for 34.66 years and is 58 years WATER in the Res. No. 89-12-10 Regulations charges haresfor Water systemExtension,ard of Water and LSheet s12u05s bed changed to $20.60 per linear foot of water main installed, Sheet 12.05 of per linear foot on improved roads, Rules and Regu- with 1 , additional dr and $1 ,635.00 per hydrant installed during the 1990 con- lations for Water and that these charges be applied to Systemten D sion serrvice lvice l season, seines tapped off applicable BWL financed water amended RF,: Water mail) installation 1990 These charges will be effective January 1, 1990 or 1990 construction season. charges effective the 1-1�J0 -------------------- The recommended charges have been determined in accordance with the procedure set forth in the Water System Extension Policy (Sheets 12.03-12.04). They represent an increase of $2.10 per foot for main installation and a decrease of $50.00 per hydrant for hydrant installation over the charges in effect for the 1989 construction season. Respectful) submitted, h Pand Joseph , Jr.Y General Manager JP/bg 209 December 19, 1989 BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-12-2 RESOLVED, That Resolutions 89-12-2 through 89-12-5 through 89-12-5 ('Administrative) of the General Manager's Recommendations be approved approved. Adopted unanimously. BY COMMISSIONER SEBOLT-- SECONDED BY COMMISSIONER WILLIAMS Res. 89-12-6 RESOLVED, That Resolution 89-12-6, 89-12-7, and 89-12-8 through 89-12-7 (Human Resources) of the General Manager's Recommendations be approved approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER SEBOLT Res. 89-12-9 RESOLVED, That Resolutions 89-12-9 (Pension) .of the General approved Manager's Recommendations be ap proved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER SEBOLT Res. 89-12-10 RESOLVED, That Resolution 89-12-10 (Water) of the General approved Manager's Recommendations be approved. Adopted unanimously. GENERAL MANAGER'S REMARKS General Manager Pandy reported on the following BWL activities: DISTRICT COOLING SYSTEM. The State of Michigan has shown a definite .. ............._........................................................ ... ............. interest in parti..cipating in the District Cooling Program. They have discussed the possibility of installing a steam turbine to replace their existing electric chiller and other viable options. A meeting with State personnel is planned for January 8 to discuss their commitment in more detail. STEAM SALES AGREEMENT WITH B.O.C. Mr. Pandy referred to a letter he ........... ... ........ . received from General Motors (GM) expressing appreciation to Joette Woodard-Yauk, Dana Tousley, and Roger Ophaug for their cooperation in working with GM in completing negotiations for a revised steam sales agreement with BOC Lansing. 210 December 19, 1989 OAKWOOD.TRANSFORMER (PCB). CASE. A letter from the BWL to the attorney representing four clients in the Oakwood, East Lansing, area regarding the BWL's settlement offer was handed out for review. Mr. Pandy reported on the status of negotiations. COAL INVENTORY REPORT. A coal report for the week ending December 9, ............. ....... 1989 w.as handed out. The coal supply is down to 55 days, based on a system burn of 3,300 tons/day, which is up from 3,100/day. A survey of upper Midwest utilities is being conducted by Fuels Procurement staff to determine the average coal inventory -being held by other utilities. The results of the evaluation will assist in determining whether or not the BWL's inventory goal should remain at 60 days. EPA NEGOTIATIONS. Staff is continuing to negotiate with the U.S. ............................ .. Environmental Protection Agency, Region V relative to their Notice o Violations for Ottawa and Moores Park Stations. The Commissioners will be kept apprised on the progress of negotiations with EPA. WATER REGION44TZATION. The Water Regionalization Committee has sel....... ected three firms to which the request for proposals (RFP) will e submitted. Mr. Pandy highlighted the contents of the RFP. Participating in the water regionalization concept are: BWL East Lansing Meridian Township Delhi Township Lansing Township Watertown Township Delta Township MSU Windsor Township Dewitt Township Mason Communities showing interest are: Aleidon Township, Bath Township, Grand Ledge, and Wiiliamston. Other communities to be invited are: Oneida Township, Vevay Township, and Wiliiamston Township The City of Dewitt is the only community that has elected not to participate. EXTENDED OFFICE HOURS. A memo, dated December 19, 1989, written by Consumer Services Director Neal Housler regarding extended office ours was handed out. The memo was written in response to an inquiry made by Commissioner Williams at the November 28, 1989, Board meeting. Staff is currently studying the possibility of providing telephone service for turn-on and turn-off orders and account inquiries beyond the 8:00 a.m. to 5:30 p.m. hours. 211 December 19, 1989 RIVE. The BWL Community Events Committee has reported they surpassed b L FOOD D ....... .. . oth goals that were set for the food drive. A total cash collection of $592 and over 1,000 pounds of canned goods were divided and delivered to the Kingsley Center, Potter Park United Methodist Church and Economic Crisis Center. APPA COMMUNITY SERVICE AWARD. Mr. Pandy advised of his plans to submit ....................... ........................................................................ . an application for APPA's new Community Service Award to be presented to a public power utility at the APPA National Conference in June, 1990. The award is designed to recognize efforts of public power utilities that fill a community need by demonstrating a high commitment to community service. Mr. Pandy displayed a collection of letters, awards and articles written on behalf of BWL employees to be used as exhibits for the award application. REMARKS BY BOARD COMMISSIONERS Camdssioner Sebolt Commissioner Sebolt expressed his a thanks Board and Ppreciation to the Commissioners and staff for the prayers, cards, and flowers received during his staff for remembering convalescence from surgery. him during his convalescence BY COMMISSIONER JESSOP-- t7 SECONDED BY COMMISSIONER HASSLER n Excused Absence t7i That the absence of Commissioner Evans be excused. b7 Adopted unanimously. N t Adjournment On motion of Commissioner Strolle, the Board adjourned at 6:38 p.m. c N J,v�/Ll p Mary E. ova, Secretary Filed: December 21, 1989 Rita M. Bauman, City Clerk August 22, 1989 140 WATER (Continued) Res. No. 89-8-15 That staff be directed to prepare information, data, and exhibits for an informational brochure and for a Public Staff directed to Hearing on water rate increase on a date determined by prepare informational staff, subject to Board approval (at least 45 days after brochure for water filing a statement explaining new rates and charges rate Public Hearing together with a Notice of Public Hearing). -------------------- The Commissioners wish to communicate the need for a water rate increase as fully and openly as possible to the public, BWL water customers and the media. --------------------- Respectfull submitted, �� . a Joseph Pandy, Jr. General Manager JP/bg 141 August 22, 1989 ADDENDUM - GENERAL MANAGER'S.,,RECOMMENDATIONS TREASURER/CONTROLLER ..........................._................................................................... Res. No. 89-8-19 89-8-19 Resolution authorizing applications for orders RESOLUTION AUTHORIZING APPLICATIONS FOR providing exception RE: ORDERS PROVIDING EXCEPTION 1 S41wnrP of Revenue Bonds WHEREAS, the Board of Water and Light of the City of Lansing intends to issue bonds to pay project costs as follows: 1. Water Supply And Electric Utility System Revenue Bonds, Series 1989A, in an amount not to exceed $16,000,000, to pay part of the costs of remodeling, updating, and extending the life of the water supply and electric utility system of the City of Lansing. 2. Water Supply And Electric Utility System Revenue Bonds, Series 1989B, in an amount not to exceed $3,000,000 to pay part of the cost of remodeling, updating, and extending the life of the water supply and electric utility system of the City of Lansing. WHEREAS, the Board of Water and Light of the City of Lansing desires to apply to the Municipal Finance Division of the Department of Treasury for an Order Providing Exception or, if an Order Providing Exception is not available, an Order of Approval. IT IS RESOLVED BY THE BOARD OF WATER AND LIGHT OF THE CITY OF LANSING, INGHAM AND EATON COUNTIES, MICHIGAN, that: 1. Any one of the General Manager, Assistant General Manager and the Treasurer/Controller is hereby authorized to prepare and file a Notice of Intent To Issue An Obligation or, if an Order Providing Exception is not available, an application for an Order Of Approval, with the Municipal Finance Division of the Department of Treasury and to take any and all action and execute any and all documents that may be required, necessary or desirable to obtain an Order Providing Exception or an Order of Approval with respect to the issuance of the following bonds: A. Water Supply And Electric Utility System Revenue Bonds, Series 1989A, in an amount not to exceed $16,000,000. B. Water Supply And Electric Utility System Revenue Bonds, Series 1989B, in an amount not to exceed $3,000,000. ------------------. 142 August 22, 1989 This resolution authorizes application to the Municipal Finance Division, Department of Treasury, State of Michigan, for approval to issue bonds. The approval is required by the Revenue Bond Act. The resolution was drafted and recommended by Jud Werbelow, Bond Counsel, and reviewed by Larry Wilhite, Staff Attorney. 143 August 22, 1989 BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER JESSOP Res. 89-8-1 through RESOLVED, That Resolutions 89-8-1, 89-8-2 and 89-8-3 89-8-3 approved (Administrative) , of the General Manager's Recommendations be approved. With regard to Resolution 89-8-1, Commissioner Belen suggested that the chain of command also be noted on the organizational chart. Adopted unanimously. BY COMMISSIONER WILLIAMS -- SECONDED BY COMMISSIONER JESSOP Res. 89-8-4 and 89-8-5 RESOLVED, That Resolutions 89-8-4 and 89-8-5 (Administrative approved Services) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Res. 89-8 through RESOLVED, That Resolutions 89-8-6, 89-8-7, 89-8-8, and 89-8-9 894 - approved (Human Resources) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER EVANS Res. 89-8-10 through RESOLVED, That Resolutions 89-8-10, 89-8-11, 89-8-12, and 89-&-13 approved 89-8-13 (Treasurer/Controller) of the General Manager's Recommendations be approved. Adopted unanimously. BY COMMISSIONER WILLIAMS-- SECONDED BY COMMISSIONER BELEN Res. 89.8-14 and RESOLVED, That Resolutions 89-8-14 and 89-8-15 (Water) of the 89--8-15 approved General Manager's Recommendations be approved. Adopted unanimously. There being no objection, an additional resolution (No. 89-8-19) was included to the General Manager's Recommendations.