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HomeMy WebLinkAboutLCMIN07/20/2011Town of Mansfield Board of Light Commissioners RECEIVED Minutes of July 20, 2011 T1) :ia ( 1'.RKS OFFICE Present: Chairman George Dentino, Vice Chairman Kevin?M6iW Cl2rkAlAA l Kozlowski, Commissioner Douglas Armino, Conunissiopyr.J Ss_Aptowitz, Town Manager William Ross, Director Gary Babin, Thomson Motion: To approve the minutes of June 13, 2011 (Moran/Kozlowski) 5:0 passes FINANCIAL REPORT FOR MAY 2011— The financial results for May 2011 was reviewed. Summary — Director Babin presented the Mansfield Municipal Electric Department's FYI l financial statements through May 2011. A few observations relative to those statements are included below: 1) Net Income — Net operating income year -to -date through May is $2,666,302 while non- operating income is $150,147. This figure has also been adjusted to account for the FYI l over - collection of Generation Charge revenues of $56,372. In other words, the $56,372 over - collection is not considered when computing net income. 2) Cash Position — MMED's operating cash position through May 2011 was $8,559,731 ( which, when adjusted for an Accounts Receivable of $319,165 for monies owed to MMED by its customers for an under - collection of the Generation Charge, makes available operating cash $8,878,896. Operating cash was $5,635,915 for the same period in FYI which, when adjusted for an Account Receivable of $472,187 for monies owed to MMED from customers for under - collection of the Generation Charge, made available operating cash $6,108,102. 3) Generation Charge Accounts Payable — MMED has a line item in the Current and Accrued Assets section of the Balance Sheet entitled "A/R Under- collection of Generation Charges ". This item reflects as an asset the under - collection of the Generation Charge, which is money owed to MMED by its customers. Through May, that receivable stands at $319,165. This amount is not calculated by fiscal year but reflects the over /under collection of the Generation Charge since the Generation Charge was introduced and started being collected in the new rates in January 2008. Any over- collection or under - collection of the Generation Charge over a 3 month period is then carried over and reconciled in the calculation of the Generation Charge for the following quarter. 4) Energy Sales — Energy sales for May 2011 are down 3.2% from May 2010. Year -to- date, sales are up 3.3 %. The rate of growth in sales has declined over the last 11 months, I due in part to the reduced load for the ADM Cocoa facility. In CYI1 through June, ADM kWh sales have declined 45% year to date compared to the same period in 2010 and are tailing off significantly in the last few months. 5) Depreciation Fund — MMED's depreciation fund balance stands at $6,178,412. This money will be used to help offset the cost of the East Mansfield substation while also supporting other capital improvements. Staff Accountant Thomson also noted several items in the financial worksheets for the Board's attention. Commissioner Aptowitz estimates that MMED has about $15 million in cash and that he would like to see the rate payers get some of it back via rebate or with a one time credit to their accounts. He felt there was not as much of a need for upcoming projects. Mr. Ross stated that MMED will need some of it for projects but not all. In addition, rate payers have not seen much of an increase in Generation Charge in the past couple of years. The department staff is also quite fiugal in their structure of work and purchases. Mr. Ross and Mr. Babin stated they will generate ideas for the Board to consider in returning a portion of the money to the conmmnity. Commissioners Moran and Annino agreed with flowing a portion of the operating cash back to customers. However, they want to ensure that enough ftmds are left to account for capital projects and residential programs. Commissioner Moran suggested earmarking money for Smart Grid technology while Commissioner Annino suggested renewable energy and conservation ideas. Commissioner Kozlowski had a few questions about the use of solar energy panels in municipal buildings. Being both rate payers and commissioners raises financial issues but he is uncertain how they might be addressed. Mr. Ross briefly explained a similar situation in another area to the board. Director Babin stated that before the Board undertook the distribution of funds, he suggested that the East Mansfield substation be completed to better assess MMED's financial situation. He also noted that the requirements for capital improvement projects were decreasing because of all of the work that has already been done. Chairman Dentino stated lie always likes returning money to the rate payers. However, he would also like to protect MMED's bond rating and pay cash for as much of the projects as possible. Director Babin suggested that MMED undertake a rate study to look at the possibility of lowering rates, as had been previously discussed. In this way a portion of the operating cash might be used to impact any fate redesign. Finally, Director Babin noted that of the $15 million in question, over $6 million was in an ( earmarked depreciation fund to be used only for capital improvement, that MMED would like to maintain an operating cash cushion of a minimum of $3 million or $4 million so lie saw that there was perhaps $4 million available for returning to the ratepayers in the manner suggested. Mr. Thompson also answered a question from Conunissioner Moran regarding high tension energy use from the prior meeting. THIRD QUARTER GENERATION CHARGE — The third quarter Generation Charge has been set at 11.37 cents, an increase of 1.39 cents from the 2 "d quarter charge of 9.98 cents. Director Babin provided an analysis reconciling the Generation Charge through May 2011. SOLAR RFP FOR TOWN LANDFILL UPDATE — Director Babin stated that on July 6, the Town of Mansfield issued an RFP for use of the town landfill site on East Street by developers for installation of a solar energy farm, from which MMED would purchase the electric output. The proposals were due July 27". However, it has been extended to August 10°i. Commissioner Moran asked how the municipal sale of energy from this project is different from commercial /private energy sales. Mr. Babin briefly explained the different between municipal energy sales and private sector sales. EAST MANSFIELD SUBSTATION UPDATE —The MMED staff updated the Board on the status of the East Mansfield substation project. Several bids related to installation of the station have been issued and will be opened in the next few weeks. OLD AND NEW BUSINESS - Under New Business, Chairman Dentino distributed several of Director Babin's timesheets from January and February of 2009 to the Board and staff. Chairman Dentino first had questions about why the MMED tracked vehicle use. Director Babin said that the purpose of tracking vehicle use was to calculate an hourly rate for vehicles that took into account their depreciation and operating expenses. Chairman Dentino questioned why it is tracked only on the Director's time sheet. Director Babin noted this happened for all vehicles on different people's timesheets. Chairman Dentine, also had questions and continents regarding matters related to the Director position. Referring to the timesheets, he had several questions about how Director Babin spent his time. Director Babin indicated lie could not remember specifics from early 2009 and sometimes noted them on the timesheet. Chairman Dentine, noted Director Babin's "Time In" varied on several days as listed on the sheets and that Director Babin is often out of the office. Director Babin said that some of his time spent away from the office is related to his Director position on the MMWEC Board, a task which the Board urged he undertake; on other activities directly related to representing MMED in various forums or when he is on vacation. Director Babin indicated that lie routinely lets his direct supervisor Mr. Ross know when lie will be out of the office and for what purpose. Both Director Babin and Mr. Ross answered Chairman Dentine's other questions regarding Director Babin's time allocation. 3 Mr. Ross recommended that the Light Commissioners and Board of Selectmen start to combine some of their meetings on Wednesday evenings as to consolidate employee time since the staff works until 8 on Wednesdays so no overtime would be required. The Board set the next MMED meeting for Monday, August 22nd, after which the MMED meetings will switch to a Wednesday schedule. Motion: To adjourn light conunissioners meeting and resume as Board of Selectmen in 5 minutes. (Kozlowski) 5:0 passes Respectfully submitted: Karen Doucette 7/27/11 22 SignaSignature ture of Clerk Date of Approval El