Loading...
HomeMy WebLinkAboutLC_052913 Mansfield Municipal Electric Department Light Commissioner Minutes May 29,2013 RECEIVED CLERKS OFFICE Present: George Dentino; Chairman, Olivier Kozlowski; Vice Chairman, Jess Apt2tz l § P Doug Annino;Kevin Moran;William Ross,Town Manager; Gary Babin,Director. Minutes taken 4.: LI by:Tracey Whelan MANSFIELD ,SETTS Chairman Dentino called the meeting to order and stated that the meeting is being broadcast live on Mansfield Cable Access and this broadcast will be available at various times for viewing. None s _k .-TT j, s ii s rt Gsli s 5,`11'11 1J i�5 ATat rt g 3 a fin y... Motion: To approve the MMED minutes from October 17, 2012 (Kozlowski/Aptowitz) Discussion: Gary Babin, Director of the Mansfield Municipal Electric Department, noted the reason for the October 17th minutes coming before the Board at this time was due to Mr. Dentino asking for elaboration on a few issues. PASSES 5:0 Motion: To approve the MMED minutes from March 25, 2013 (Aptowitz/Kozlowski)PASSES 5:0 1D`ii Mardi Financials-Mr.Babin gave an overview of the FY13 financial results for the nine month period through March 2013. Mr.Babin stated that net income of the department was $1.9 million with operating cash of$9.35 million and that the Generation Charge was stable with a payable of less than $100,000. Mr. Babin reported that energy sales are up 1.7% for the year, which is a positive sign. Mr. Babin followed up on a concern raised by Mr. Moran at the last Board meeting about the decline in HT sales. Director Babin stated there are five commercial customers in this grouping: Toyota, Smurfit-Stone, Murata, Reit Management and Atlantic Realty. These customers take service at 13,800 volts and are metered at that level. The customers own and maintain all their high voltage equipment on the customer side of the meter, which results in a bulk discount. In researching the HT sales decline, which was about 32% through January compared to the prior year, Director Babin stated that Reit Management had sold one of its three buildings in the high voltage loop (located at 100 Hampshire) to Covidien, which then took service directly from MMED as a standard commercial customer(LT). Mr.Babin pointed to the March 2013 financials, which when HT and LT sales were added together showed that total sales were about the same as the prior year. Light Commissioner's Meeting May 29,2013 Page 1 of 4 Mr. Babin also reported that Smurfit-Stone (Rock-Tenn) is going out of business. In 2012 they were the Town's 3rd largest customer and MMED sold them about 4 million kWh. Their consumption has been consistent through January 2013 but has been steadily decreasing since then. Mr.Babin's understanding was that they would be closed by the end of the summer. Mr. Aptowitz inquired about the distribution expense, considering each line item is over budget. Mr. Babin stated that the most significant factor is that MMED is now accounting for OPEB in their labor costs. As far as other increases in costs, Mr. Babin also reported that the streetlight re-lighting program cost about $40,000 in labor and about $28,000 in equipment and that the department has also been more aggressive with tree trimming due to the amount of storms. Mr. Moran noted that sales are tracking slightly behind budget. Mr. Babin stated that the economic downturn,weather related issues and the loss of ADM are contributing factors but residential sales and small commercial sales are up and making the difference. Mr.Annino asked if Smurfit-Stone owed any monies to the Town. Mr.Babin reported that MMED did lose money due to bankruptcy Taws when the company filed for Chapter 11 in 2009 but after that the payment stream was excellent. Mr. Aptowitz asked when the write-off took place and Mr. Babin indicated he would check on the amount and the date the amount was written off. Copeland Road Underground Construction Project Mr. Babin provided a progress report regarding the Copeland Road Underground Conduit project,which is a paper street that runs from Maple Street.to West Street in a north-south direction. The purpose of building the duct line is to interconnect the Bird Road substation to the Gilbert Street substation, and to do that several cable circuits will need to be installed. This will allow the entire Town to be serviced by two substations. Several steps have been taken by MMED to move the process along: In 2012 Town Meeting authorized the Town to acquire the property rights needed to construct the right of way; a walk-through with Conservation Commission, DPW and Town Manager was done;the route was surveyed and that identified all the parcels and then those parcels were marked; the Conservation Commission agent and MMED Engineer flagged the wetlands; and Town Counsel prepared a set of easement documents, which were distributed to all abutters (8 parties) and MMED met individually with most of them. One executed easement has been returned and approved by the Board. Mr.Ross noted the Town is working with the property owners in the area and will spend more time with a few; in particular the Roman Catholic Diocese because St. Mary's church did not have direct ownership. Mr. Ross stated that while walking through the area one of the concerns was whether the duct line could be physically constructed given the routing limitations. A contractor walked the route and concluded that it is buildable. Mr. Ross felt that Lou Ross from Town Counsel has been extremely knowledgeable and has guided the Town through the process. Mr. Ross felt Copeland Road is the viable option and less intrusive then other options. Mr. Babin noted the Town is trying to minimize the impact of constructing on East Street since it had recently been fully reconstructed. NextEra Contract - Mr. Babin presented a snapshot view for the value of the recently signed NextEra contract relative to current market rates for power purchases. This is the energy contract that the Board authorized the Town Manager to execute in January 2013. Mr.Babin reported that periodically MMED looks at the value of the contract relative to what it would cost to replace the power today. The total value of the contract is a fixed price of$12.5 million and the cost to replace that today would be $1.3 million higher, which is about 8%. Light Commissioner's Meeting May 29,2013 Page 2 of 4 Mr. Aptowitz asked about the new construction across from Mansfield Crossing and do installations of this type replace the loss of Smurfit-Stone sales. Mr.Babin felt small commercial development does not really make much of an impact and that a large company is needed to offset the loss of sales. Mr. Babin felt that large commercial loads in the Cabot industrial park area are what will offset loss of sales. Mr.Ross noted the continued emphasis on conservation efforts and that replacing equipment with more energy efficient items seems to be the trend and had an adverse impact on sales. He stated that the challenge for utilities is to support the large fixed cost of plant facilities in the face of declining sales. His observation was that a reverse situation occurs because energy conservation reduces the consumption by customers but it becomes harder to reduce the cost of actually operating and maintaining the utility at the same rate. Bird Road Substation Final Cost Summary - Mr. Babin wanted to bring closure to the Bird Road Substation and provided a final summary of construction costs for the project. He reported the projected final cost to be $6.597 million and that MMED is withholding $25,000 for completion of landscaping. MMED has been engaged in discussions with the contractor, Ryan Company,who reported their sub-contractor has not been responsive to the fact that the initial hydro-seeding did not take. Mr.Babin reviewed the Change Order summary and told the Board that the staff had done a very good job in managing the project. The initial contract with Ryan Company for construction of the substation was$1.94 million and that the change order total for the project was$88,639. He noted that most of the change orders were due to unit price items, such as boulder removal and tree cutting that could not be anticipated. Taking these into account,the sum total of the change orders due to changes in scope was only 1.7% of the final cost. He said that the biggest cost item for changes in scope was for construction being slowed by delays in the transformer delivery but that MMED had the transformer company split the cost of the change order with the Town. This reduced the final cost impact to MMED of the change orders due to changes in scope to 1.1%. Mr.Annino noted that the amount of change orders were good and asked about the credit the Town was due for the staining of the perimeter wall. Mr. Babin noted that the final change order took this and several other items into account to settle the final cost of the project. He named several items that were involved with the reconciliation of the final change order. Mr.Moran asked about the hydro seeding and asked if it isn't too late to do it. Mr. Babin stated that there is a one year warranty on all landscaping work and that he was told it would be done by the end of the week. Mr. Aptowitz inquired about the original cost of the entire project at the outset of planning. Mr. Babin reported initial estimates were about$8 million and now the project cost was down to the $6.7 million price. Mr. Ross noted that the biggest factor that brought the price down was the transformer bid, which produced significant savings. Chairman Dentino inquired about the boulder removal change orders and if the size of the boulders was measured,which Mr.Babin said they were. Mr. Babin reported that the boulders were broken up on site and then they were removed. He noted the site was extremely rocky and that most of the boulders were subsurface, which necessitated the unit price method. Chairman Dentino was concerned about the cost charged for that removal and the length of time it took,which was approximately six months. Mr. Babin noted that as the boulders were removed they were stock piled and as time allowed then broken up. Light Commissioner's Meeting May 29,2013 Page 3 of 4 CPR Training -As a follow up item from a prior Board meeting where the question of whether the Fire Department provided CPR training that MMED had contracted out, Mr. Babin reported that MMED had used Life Support Systems,which handled all of MMED's CPR and AED needs. Mr.Babin also spoke with Deputy Chief Puleo who noted that the Fire Department is not staffed o do the CPR training and lacked some of the materials that are required to be distributed. In order for the Fire Department to complete the training it would be necessary to have someone come in at an overtime cost. Deputy Puleo suggested they would do it as a courtesy but do not market those types of services and felt that MMED made the right call in going with the vendor. Further clarifying, Mr. Babin noted the charge was $850 for two sessions, as opposed to the cost for one session that he had said earlier. Mr.Dentino mentioned a$2,000 figure he had seen on an invoice, which Mr.Babin said was for 8 AED rentals with semi-annual service for a total bill of$2,300. Chairman Dentino felt a CPR training session is a positive for the Town and asked Mr. Ross to follow up and find out what was done in the past. tfi k ft 90f9:! ,0411116`WI(001(t, Chairman Dentino noted there is a significant amount of engineering bills associated with the Bird Road project and he would like Mr.Babin and Mr.Ross to provide a list of projects that MMED is working on that require engineering. Both Mr.Babin and Mr.Ross will provide that information. Mr.Kozlowski noted that each time the substation discussion comes up he wonders if it is feasible to install underground conduit along the railroad right of way. Mr. Ross stated it is difficult to work with AMTRAK and the MBTA for simply getting an aerial crossing and suspected strongly that they would not want additional lines in that area, mainly due to their overhead catenary structures. Mr. Moran is concerned about giving any control to the MBTA for our electric facilities and the timing in their response.Mr.Babin mentioned a few instances of the difficulty of getting AMTRAK to respond to simple requests. G�i3 F kFi '�Ts"ria l ab (� { X10 . 1z �ti? j Q� 4� AWi����a��:uir as 6 1 w'I6 r F t [ii iJ6i it' None ,0411,-- i i s ila i Motion: To adjourn the MMED Light Commissioner's meeti g 8:03 PM PASSES 5:0 Signatu o C'r k Da of Approval /Trace; Whalen Light Commissioner's Meeting May 29,2013 Page4of4