HomeMy WebLinkAboutlc_03142012 Mansfield Municipal Electric Department
Minutes of Light Commissioners Meeting RECEIVED
March 14,2012 FUN CLERKS OFFICE
2011APR18 A gill
Present: Chairman George Dentin; Vice Chairman Kevin Moran; Cler *1. ier Kozlowski;
Commissioner Douglas Annino; Commissioner Jess Aptowitz; 1p4 e D T5 Babin;
Financial Assistant Jacqueline Lee and Town Manager William Ross
Light Commissioners Meeting
The meeting was called to order at 7:08 PM followed by the Pledge of Allegiance. Chairman
Dentino stated that this meeting was being televised and taped by Mansfield Cable Access.
There was no one signed up for Questions and Comments.
Motion: To approve the minutes of the December 21, 2011 Light Commissioner's
meeting
(Aptowitz/Moran)Passes 5/0
Motion: To approve the minutes of the January 18,2012 Light Commissioner's meeting
(Kozlowski/Moran)Passes 5/0
Director's Report—Chairman Dentin announced that he would be deferring the item on the
agenda about MMED paying the assessment of$15,086 for the new NEPPA training facility.
Vice Chairman Moran didn't understand why) it was being deferred again and wanted to
reintroduce his motion that he had previously agreed to withdraw. He pointed out that this
had been discussed several times and that Director Babin had given the Board all the
information that they had requested.
Chairman Dentin stated that the Board had received the most recent information only two
days before this meeting and that he had been out at another meeting the night before. He had
no time to review the information and said that with all due respect he was postponing the
item. Director Babin explained there had been a problem with the Town network that did not
allow the information to be sent out on Friday.
Commissioner Aptowitz said that he did read the information and that he agreed with Vice
Chairman Moran. He felt that they shouldn't wait another month until the next Light
Commissioners meeting as all the other communities are supporting it and MMED was the
only member who had not paid their assessment. Director Babin said that he too would like
to move forward with this tonight.
Chairman Dentino stated that timing is the issue and pointed out that the Light
Commissioners haven't had a meeting in so long that Town Manager Ross had to set the date
for this meeting. He said he would, however, agree to postpone the item for one week only
until the next Selectmen's meeting rather than one month until the next Light Commissioner's
meeting. Commissioner Moran asked if the vote would take place at the next meeting,which
Chairman Dentino agreed to do. Chairman Dentino said that while he had information on the
training courses attended, he wanted to receive a listing of which MMED employees went to
training sessions and he would also like to know how many types of NEPPA memberships
there are. Director Babin said there is just one type of membership for utilities that is based
on energy sales and also said he will get the other information Chairman Dentino is
requesting.
FY13 Operating Budget - Director Babin highlighted the assumptions which apply to both
the operating and capital budgets beginning with the labor rates reflecting the FY13 wage
rates; the load is predicted to decline by 3%with the loss of ADM Cocoa;basic electric rates
are the same and depreciation expense is 5%. He reported the projected rate of return is
6.15%. He explained that the decrease in the cost of purchased power is due to two things;
the loss of ADM and the lowering of the cost of power in the market place. Director Babin
also reported that the new substation will be up and running by the summer and begin to be
depreciated the following year. He told the Board that he believes this budget is consistent
with those budgets of prior years.
Commissioner Aptowitz said he is very concerned with the PILOT amount of$480,000. He
wondered what is the fair methodology that should be used to calculate the amount. He asked
the other Board members for their opinions.
Commissioner Moran answered that according to the calculations Town Manager Ross had
done that once the new substation is up and running then the amount that MMED is currently
paying would be considered a reasonable amount.
Commissioner Aptowitz asked if the Board would be amenable to revisiting this issue before
July 1,2012 to try to come up with a reasonable methodology to calculate a new amount.
Chairman Dentin thought they should actually do it before Town Meeting. He pointed out
that even though it.is not voted on at that time, the subject of the PILOT is raised at the
meeting.
Jack Goldberg from the Finance Committee offered to have a discussion of the PILOT at one
of the Finance Committee meetings. His suggestion was that it be tied to the revenue stream.
Commissioner Aptowitz then questioned the target rate of return of 6%. Town Manager Ross
suggested to the Board that they have a rate study and analysis done to determine what the
rates need to be to support and maintain the system now that the substation will be up and
running. He believes this study should be done by an outside firm. He also told the Board
that MMED's residential rates are low while commercial rates are on the middle to high side.
Mr. Goldberg brought up the subject of the OPEB (Other Post Employment Benefits)
payment. Director Babin said that MMED recently made their FY11 and FY12 payments in a
lump sum. Town Manager Ross reminded everyone that MMED's OPEB is separate from the
rest of the Town by law so there can be no comingling of the monies.
Motion: To approve the MMED Operating budget for FY13 and to also include the
$241,540 OPEB payment
(Aptowitz/Moran)Passes 5/0
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FY13 Capital Budget - Director Babin stated that the proposed FY13 capital budget is for
$3,450,177. He said that a portion of the Bonney Lane and Erick Road project will be
completed in FY12 with the second phase proposed for FY13. This project was done to
improve reliability because there were issues in this area during recent storms.
Director Babin then reviewed the six recurring projects which span a period of two or more
years. He also explained that there are also special projects that are unforeseen but which are
billable so no money is included for them in this budget. There are also projects classified by
plant account which can't be anticipated. Director Babin believes MMED has had a pretty
aggressive capital program over the years and thinks that it is fair to say the reliability of the
system has proven the benefits of MMED's capital program. He noted that it is a significant
advantage to having a municipal light plant in the community.
Chairman Dentin questioned the part of the budget that said "install new streetlights as
required". Director Babin explained that sometimes the streetlights are beyond repair when
the lineman go to replace a bulb so you are better off replacing them instead of having to go
back a second'time once the unit fails.
Motion: To approve the MMED Capital budget for FY13
(Aptowitz/Annino)Passes 5/0
Financials for January 2012- Director Babin stated that the net operating income year-to-
date through January is $606,761 while the prior year through the same period was $1.8
million. He explained that this is the first impact of MMED's $1.1 million dollar rebate to the
ratepayers for the month of January.
The operating cash through January 2012 was $9,624,793. Director Babin explained that the
revenue impact associated with that rate cut doesn't come in until the following month. The
example he gave was that bills issued in February aren't paid until March because of the grace
period to get the discount. He said that there is a 5.2% decrease in energy sales year to date
because of the loss of ADM.
In answer to a question asked at last month's meeting, Director Babin also included with the
fmancials a chart showing how MMED trues-up the Generation Charge month-to-month and
how at the end of each quarter that amount is worked into the calculation of the next quarter's
Generation Charge.
Mansfield High School Robotics Program- Director Babin said that Jim Carver Brown,
advisor of the Mansfield High School Robotics, was unable to attend tonight's meeting. Mr.
Carver Brown,however, did let Director Babin know that due to the fact that the team was not
selected for the regional competition they thought they would be going to, they are only in
need of$1,000 instead of the$5,000 they originally requested.
Motion: That the Mansfield Municipal Electric Department makes a Payment-in-Lieu-
of-Taxes in the amount of$1,000 to the Town of Mansfield for the purpose of donating
this money to the Mansfield High School Robotics Program. Such payment to be taken
from unappropriated earned surplus and be recorded as a below-the-line expense.
(Annino/Dentino)Passes 5/0
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After the Robotics vote, Chairman Dentino then put forth the following motion:
Motion: That the Mansfield Municipal Electric Department makes a Payment-in-Lieu-
of-Taxes in the amount of $45,000 to the Town of Mansfield for the purpose of paying
the cost to run streetlights. Such payment to be taken from unappropriated earned
surplus and be recorded as a below-the-line expense.
(Dentino/Aptowitz)
Commissioner Annino said he thought they were going to have a study done to look at the
streetlight issue.
Commissioner Aptowitz said he was willing to support Chairman Dentino's motion as long as
it was legal. Chairman Dentino pointed out that the Board just approved the same type of
motion for Robotics.
Vice Chairman Moran believes it is taxing the ratepayer through electric rates even though it
benefits them. He then pointed out that more policemen, firemen and teachers would also
benefit the ratepayers if MMED paid for it so where would this stop?
Town Manager Ross reminded the Board that the School Department gets 70% of that
$45,000 as they are entitled to 70% of the PILOT. MMED would actually have to pay
$150,000 in order for the Town to receive$45,000.
Commissioner Aptowitz withdrew his second of the motion. He said he would like to check
to see if it's legal to do this and will put it on the agenda for the next Selectmen meeting.
Appliance Rebate Approval- Director Babin stated that the State requires that '/4 of 1% of
MMED's operating revenue must be used for residential conservation services (RCS). He
told the Board that 8.5% of MMED's customers took advantage of MMED's appliance rebate
program in 2011.
Motion: To approve and extend MMED's Appliance Rebate Program for another three
years(2012-2014)
(Aptowitz/Moran) Passes 5/0
Chairman Dentino set the date for the next Light Commissioners meeting for Wednesday,
April 11,2011.
Old and New Business- Chairman Dentino questioned whether Allan Rice from PLM was
the supervisor on site at the East Mansfield Substation and how much time he spends there.
Director Babin explained that Mr. Rice was the design engineer but didn't spend any time
there and it was actually MMED Engineer Chris Cox who was on site.
Chairman Dentino then brought up the subject of Mr. Rice being sent to Idaho to witness the
testing of transformers for the new substation and questioned why it was necessary for
Engineer Cox to go along too. He agreed that it was important for someone to go but did not
think it was logical for a second person to go just to watch the first person witness the test.
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He wondered how much that cost the ratepayers. Director Babin answered that he did not
know exactly, there was air fare and a couple of nights at a hotel. He did point out that it was
not a vacation and that Engineer Cox was there only for the test then flew back after spending
only 2 evenings away.
Motion: To adjourn the Light Commissioners meeting at 9:17 PM and begin the
Selectmen's meeting
(Moran/Aptowitz)Passes 5/0
Respectfully submitted: Jacqueline Lee 4/17/12
Signature of Clerk Date of Approval
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