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HomeMy WebLinkAboutLIGHTCOMM MIN02092009 Mansfield Municipal Electric Department Minutes of Light Commissioners Meeting February 9, 2009 EO I,."" :-{.....,..... 'C.... :) \J,' ," i Jt Z~Oq ,.,..;~:;: ! ("1 /~\ r:~: ~8 Present: Vice Chairman Jess Aptowitz; Clerk Kevin Moran; Commissioner George Dentino; Director Gary Babin; Engineer Chris Cox; Engineer Ann Langille; Staff Accountant Ken Thomson; Line Foreman Gary D' Ambra; Supervisor Laurie Anderson; Financial Assistant Jacqueline Lee and Town Manager John D' Agostino Light Commissioners Meeting The meeting was called to order at 7:06 PM followed by the Pledge of Allegiance. Motion: To approve the minutes of the December 15, 2008 Light Commissioners meeting (Moran/Dentino) Passes 3/0 Commissioner Dentino questioned page 4 of the minutes in regards to the Mansfield High School Robotics and whether they still had the remainder of the last donation from the Light Department. He asked Town Manager D' Agostino if he had looked into it. Town Manager D' Agostino said he had not but knew that the School Department has the ability to set up a "revolving" account. He said that Town Accountant Hart had no information about this and that he would check with Ed V ozzella, Director of Finance and Operations for the School Department. Director Babin recalled finding out after the December 15 Light Commissioners meeting that the School Department did still have the money and therefore Robotics is only in need of an additional $2,000. Town Manager D' Agostino will check into it. Commissioner Dentino then referred to the minutes where it said that Commissioner Baldwin had asked Director Babin if he had looked into the refunding of monies spent on customer service seminars for the Financial Assistants. Commissioner Dentino asked if Director Babin had followed up on that. Director Babin said he had not. Director Babin noted that the Financial Assistants were halfway through the series of seminars at the time Chairman Baldwin had inquired about a refund. MMED Capital Expenditures through December 2008 - Engineer Cox told the Board that the FY09 Capital Budget had been approved in the amount of $2,035,101. He then reviewed the original FY09 budgeted items, explaining whether each budgeted amount was staying the same or whether it was being adjusted. Commissioner Dentino questioned the purchase of new trucks. Director Babin said that MMED has been sinking a lot of repair money into the meter trucks which is why they are purchasing two new ones. Commissioner Dentino wondered why MMED was getting as little as 70,000 miles out of these vehicles and why there were not extended warranties on them. Motion: To accept the amended FY09 Capital Budget in the amount of $1,871,444 (Moran/Dentino) Passes 3/0 - MMED FYIO Capital Work Plan July 2009 - June 2010 - Engineer Cox told the Board that the proposed Capital Budget for FYlO is $1,575,946. He said that labor is priced out at $35.51 per hour plus an overhead factor of 80%. Vehicle time is priced out at $15 per hour and police details are an average of $350 per day. There is also a stores expense which is added to inventory material at a rate of 15% of the direct cost of the material. Engineer Cox then reviewed the One-Time Projects, Recurring Projects, Specials Projects and Reimbursable Projects. He then reviewed the projects which are not large enough to be considered "one-time" projects. Jim Lazzara and Karl Chambers from the Finance Committee were in attendance. Mr. Lazzara stated that they had reviewed the information with MMED staff and believed the biggest change is that there will be less capital projects. He noted that this will affect the operating budget as well. He believes it is better for the Board to wait and vote the capital and operating budgets at the same time. Mr. Lazzara added that the Finance Committee did question the need for the new vehicles and that all their questions were answered satisfactorily. MMED Five Year Capital Plan - Director Babin briefly reviewed the five year capital plan which the Finance Committee had requested. The plan included Ongoing Annual Capital Requirements, the East Mansfield Substation, Advance Metering Infrastructure and New Vehicles. Financial Statements - November 2008 - Staff Accountant Thomson stated that MMED's net operating income year-to-date through November was $1,705,743. The remaining balance in the Calpine Rate Stabilization Fund as of the end of November was $365,152. MMED's operating cash position through November 2008 was $3,772,045, up from $2,721,415 for the same period in FY08. Staff Accountant Thomson said that MMED's "AIR Undercollection of Generation Charges" through November was $436,458. Energy sales in November 2008 were down 5.4% from November 2007 and the depreciation fund balance was at $3,578,670. Commissioner Dentino wanted to know why there was .still a balance in the Calpine Rate Stabilization Fund. Director Babin said that it was his error that not all of it was used. MMED used only $30,000 in December. He said the remaining balance in the Calpine fund would be passed to the customers through the Generation Charge over the next several months. Commissioner Dentino commented that MMED's cash position is going up because of what the ratepayers are being charged. Director Babin explained that the rates had been expected to produce a 6% rate of return but ended up actually producing an 8% rate of return. He said that the details of the rate of return issue will be addressed with the Board when they discuss the DPU report next month. He also noted that any excess income can go back to the ratepayers should the Board vote to do so. Commissioner Dentino wondered why MMED 2 '" hadn't already addressed it and lowered the rate when they first figured out this was happening. Director Babin reiterated that the Board will be able to vote to return this money back to the ratepayers if it chooses. Vice Chairman Aptowitz commented that the net income appears high to him also. Clerk Moran questioned the dip in the high tension sales between October 2007 and October 2008. Director Babin said that Engineer Langille had looked into that and determined that the high tension energy sales had decreased by 25%. Only one customer had slightly increased sales by 5% but all other high tension customers experienced decreased sales. Vice Chairman Aptowitz questioned how collections were being handled as he was very concerned about businesses closing. He wondered if payments were still being made in a timely manner. Director Babin answered that MMED was really cracking down on customers with the new collections policy. Generation Charge for 1st Quarter 2009 - Director Babin stated that the Generation Charge for the first quarter of 2009 was set at 12.67 cents but that he expects it will come down when the next Generation Charge is set. He noted that an average of 1.06 cents per kWh has been billed to each customer in 2008 for the Canal Generating Unit charges and said that litigation is still moving forward. East Mansfield Substation Project Update - Engineer Cox told the Board that MMED has reached an agreement with National Grid on the Property Access Agreement which allows MMED to enter onto the property at Bird Road to perform soil boring tests. He said that MMED hired Charles H. Gross P .E., LLC to oversee the soil boring contractor and to prepare the report. This data will then be used to prepare foundation drawings for equipment. Engineer Langille told the Board that the Site Plan Review is the next major step. Green Energy Option for MMED Customers - Director Babin told the Board that MMED staff approached MMWEC about coming up with a program to offer to customers which would not cost the Light Department a significant amount of money but would allow customers to make a donation towards green energy. The program MMWEC came up with involves C02 allowances for auction. The customers would have the ability to voluntarily contribute a specific amount of money each month toward the purchases of the C02 allowances. MMED would collect the money from the customers, purchase the C02 allowances through and then retire them, thereby eliminating that C02 from being discharged in the atmosphere. Clerk Moran questioned whether this would satisfy the green energy requirements of some of MMED's commercial customers. Director Babin said he was unsure as the program was intended for residential customers but thought perhaps this could work for commercial customers too. Director Babin wanted to get a sense of the Board whether he should move forward on this. The Board indicated that he can pursue it to obtain more information. 3 " Residential Conservation Services Program Summary Calendar Year 2008 - Director Babin reminded the Board that MMED is required by law to spend 1/4 of 1 % of operating revenues each year for residential conservation services. Supervisor Anderson reviewed the breakdown of MMED's 2008 residential conservation services costs. MMED's target was $89,755 while the actual expenditure was $104,251, exceeding the target by $14,496. Supervisor Anderson said that a total of 517 customers applied for rebates with a total of 553 appliances rebated. The total dollar amount paid out for appliance rebates was $46,200. She explained that 38 rebates were declined either because the appliance didn't qualify or the customer had already reached the $100 per year cap. Motion: To continue the appliance rebate program as presently implemented for a three year period. (Moran/ Aptowitz) Passes 3/0 FYI0 Capital and Operating Budget Discussion - Director Babin noted he was uncertain that the Light Department should need to decrease their budget by 5% as the other Town departments are being asked to do. He told the Board that MMED's budget is unique because of the purchase of power supply. Director Babin told the Board he was seeking their guidance on how to proceed with preparation of the budget. Director Babin proposed a level funded budget as he said MMED's situation is different from other Town departments. He added that MMED is not affected by the loss of state aid as are the other Town departments. He also reminded the Board that the Light Department operating budget was going to have to absorb additional labor costs in FYI0 because there is less labor allocated to the capital budget than in prior years. Director Babin then stated that he doesn't believe there is a need for MMED to reduce their budget by 5%. Commissioner Dentino asked Director Babin for a proposal showing exactly where he wants to level fund and where he wants to hold the increase. When Director Babin stated that the MMED unions were due a 3% contractual increase in FYI0 Commissioner Dentino commented that he had been under the impression that the Light Department union contracts were on the same schedule as the Municipal side. Town Manager D' Agostino clarified that all enterprise accounts are the same and are going to be level funded. Commissioner Dentino said he doesn't want to see anyone being treated differently and that it should be all or nothing. Director Babin said that even Mr. Lazzara had acknowledged that there are nuances that make the Light Department different from the other departments. Commissioner Dentino said he does not believe in asking for concessions from one side and not the other. He thought the rest of the Municipal side was at a disadvantage and that this side should also be looked at. Director Babin then suggested that the Board has the right to grant a one time increase in the PILOT as a potential remedy to help address the town's budget issues. Commissioner 4 Dentino said he never believed in that because that was simply taxing the residents through the meter. Vice Chairman Aptowitz said he wanted to move the process forward. He believes that as the Town Manager and the Light Department Manager, John D' Agostino can instruct his departments accordingly in regards to their budgets. Streetlights - Director Babin told the Board that the Town had made an appropriation for streetlights in FY09 in the amount of $130,000. Town Manager D'Agostino stated that no other town has the number of street lights that Mansfield has. He recommended for FYIO cutting the streetlight budget in half and wanted to get permission from the Board to shut off every other streetlight in Town. He wanted to begin by turning off every other streetlight in the Industrial Park, on Rt. 140, on Eastman Street and also reduce security lighting throughout the Town. He said this has been run by the Police Department who concurred with it from a safety point of view. This alone would save the Town approximately $8,000 to $10,000. Director Babin added that in order for the DPW budget to come in at their target for FY10, it would require turning out every other streetlight throughout the entire Town. Old and New Business Commissioner Dentino questioned the memo from Director Babin regarding the $25,300 cost to prepare the report in response to the citizen's complaint regarding Clinical Science Laboratory. The memo indicated that Director Babin had been directed by the Board to calculate the total cost of the staff time that went into addressing the complaint. Commissioner Dentino stated, however, that the Board had never asked Director Babin to do so. He believed the memo was a misrepresentation. Director Babin thought it was Commissioner Levine who had asked him for that information. Commissioner Dentino pointed out that the memo said it was a request from the Board and that Commissioner Levine is not the Board. Town Manager D' Agostino, however, believes he is the one who asked for a total cost of staff time because he thought people should know how much this cost them. Commissioner Dentino said that the Light Department should then also come up with a total cost for the Stoyle and Beliveau litigation. Town Manager D' Agostino said that Commissioner Dentino had already been given those numbers. Commissioner Dentino pointed out that staff hours were not included in those figures. He also pointed out that in the past he was told that staff time was a sunk cost and wondered why it was suddenly a concern in this instance. Town Manager D' Agostino said it was because Commissioner Dentino was asking him to go back 4 to 5 years and calculate the cost of the time spent by everyone and then mark it up 80%. He stated that the Clemmey complain had just happened and he believed that people needed to know the impact. He also noted that litigation costs are incurred all the time. 5 - Commissioner Dentino commented that Town Manager D' Agostino seems to pick and choose on things like this. He added that the Board did not even ask for this information. A meeting to discuss the customer complaint regarding Clinical Science Laboratory was set for Tuesday, February 17 at 7:00. It was also agreed that the Light Commissioners would next meet on Monday, March 2 and again on Monday, March 23. Motion: To adjourn the Light Commissioners meeting at 10:30 (Dentino) Passes 3/0 Respectfully submitted: Jacqueline Lee 4/13/09 '1L~ b I ~I 07 Date of Approval Signature of Clerk 6 '"