Loading...
HomeMy WebLinkAboutmin of light commission 12/22/03 r Minutes of Ligh.t Commissioners Meeting December 22, 2003 \ ~: i Present: Chairman ~teven MacGaffii~.i Vice Chairman David McCarter; Commissioner Louis P. Amoruso;' Clerk. Roger Abfulle; Commissioner Mike McCue; Director Jack Beliveau; Chief Financial Officer Kimberly Stoyle and Manager John D' Agostino Light Commissioners Meeting The meeting was called to order at 7:30 followed by the pledge of allegiance. Minutes of November 17, 2003 Regular Session Motion: To approve Passes 4/0/1 Clerk Achille abstained Questions and Comments r" Finance Committee members Andy Gazzolo, Jim Lazzara and Jack Goldberg were in attendance. Andy Gazzolo stated the Finance Committee, after looking into the Light Department's budget for the past 30 days, would like to present their findings thus far. Jim Lazzara explained this was their first year doing this and voiced his concern regarding the amount of time they have had to review the figures. He requested that in the future they receive the information 90 days ahead of time. Director Beliveau explained that the Light Department doesn't receive the information about the power costs, which is the major one, until mid to late October. The information requested was provided in early November and Beliveau stated he prepared the budget in less than one week. It would, therefore, be difficult to give them information any sooner. Mr. Lazzara also requested a narrative to go along with projected changes, which would explain the reasoning behind them. Mr. Goldberg added that they are looking for explanations as to why things may be moving in a certain direction. Mr. Lazzara asked if they could get a list of capital projects the Light Dept. is planning on doing, along with a breakdown of labor, materials, etc. Director Beliveau answered it would be difficult to do. He explained that a transformer could fail which would be a capital item, but if a squirrel were the cause of the problem, it would be an operations maintenance problem. Therefore it is difficult to predict the split between capital and operations in advance. The totals are predictable but not the split. These details are impossible to know ahead of time. An example Director Beliveau gave was the project for replacing the porcelain cutouts, which was originally going to be contracted out. The union complained about this so the work was not contracted out which meant a large amount of internal labor unexpectedly went to capital projects and away from operations/maintenance labor. Mr. Lazzara reiterated that the more information they had the better for making their recommendations. f" ,--.. i r" r' ~ Mr. Goldberg inquired about the Light Department's accounting practices. He questioned why the PILOT is not shown as an expense above the line? CFO Stoyle stated that the cash portion of the PILOT must be recorded below the line. He questioned why litigation costs were not recorded in this fiscal year? Director Beliveau answered that the costs had not been incurred in this fiscal year and were related to a prior period. CFO Stoyle suggested a workshop be set up with Light Dept. personnel, the Finance Committee and the Auditor to review the accounting practices of utilities. In regards to the negative cash flow issue that was raised by the Treasurer and the Town Accountant in February of 2003, Mr. Goldberg expressed his opinion that there is a need for better communication between the Light Dept. and the Town. Director Beliveau reported that he was only made aware of the potential problem 9 months after the supposed situation began. At that time, he immediately forwarded a memo to the Treasurer and met with him to discuss the issue. Both agreed having the Light Department auditor look into the potential difference was beneficial to all. Mr. Goldberg noted that he had discussed the auditors memo with the Town Accountant Bea Kearney. CFO Stoyle asked why only the Town Accountant was consulted on this matter and not the Light Department before any conclusion was drawn. Mr. Goldberg questioned if there should be one auditor for both the Town and the Light Dept., although he realizes it is commonplace to have 2 separate auditors. CFO Stoyle reported that only 10% of municipals (4 out of 42) have the same auditor for both. Director Beliveau made the point that the accounting practices for the Light Dept. are very specialized. He also noted that Towns and Light Departments are required to use different fiscal years. Mr. Goldberg questioned why the Light Dept. is on a calendar year Fiscal Year and not the same fiscal year as the Town (July 1 - June 30). Director Beliveau explained it is a FERC regulation requiring all municipal light departments to use a calendar year as the fiscal year for reporting purposes. Mr. Lazzara suggested that the Finance Committee make recommendations for the 1 st Quarter only instead of the whole year given their desire to seek more information. Financial Report for October 2003 Chief Financial Officer, Kimberly Stoyle, reviewed the profit and loss statement and the balance sheet for October. Total metered sales for October were $1,979k and total power production expense was $1,444k. Net income for the month was $2k while there was a net decrease to surplus of $71.2k. CFO Stoyle explained fixed costs still had to be paid for power not received because Seabrook generating station was down. She also pointed out that final year-end adjustments for FY 2002 are now reflected in the balance sheet. She likewise anticipates losses for November and December. There were 10 outages for the month, 3 of which were due to squirrels or birds. CFO Stoyle began the report of major projects. The Light Dept. is ready to test e-billing at the beginning of 2004. The building at 125 High St. is almost ready for the plant personnel move. 2 r Director's Report Vice Chairman McCarter questioned Line Foreman Gary D' Ambra about the North Main Street project and the burial of the underground conduit. Foreman D' Ambra stated he has made numerous attempts to get Verizon to finish their part but his requests have been completely ignored. Chairman MacCaffrie directed Manager D' Agostino to let Verizon know that the Dept. of Public Utilities will be contacted if Verizon continues to ignore their responsibility. With respect to the FY 2004 budget, Director Beliveau said the Finance Committee's proposal to make recommendations for the I st Quarter would be fine for operating expenses only but not for capital expenditures. He stated capital expenditures were front loaded and most would occur in the first quarter so a prorated approach would not work. He did ask if the Board would approve a capital expenditure of $1.6 million for Gilbert St. Substation expansion which would occur in January or February. Other capital expenditures, which were discussed and agreed to be paid, were the School St. Bridge project, new services to customers and a forklift, which needs to be replaced. Motion: To approve $2.1 million for FY 2004 1 st Quarter capital expenditure budget which would include $1.6 million for Gilbert St. Substation Passes 5/0 f" Director Beliveau reported that the auditors had begun their FY 2003 year end work for the FY 2003 audit and had planned to return in January. CFO Stoyle noted that the auditors services had been terminated by Manager D' Agostino. Director Beliveau suggested the Light Dept. remain with their current auditor Goulet, Salvidio & Assoc. until the FY 2003 audit has been completed, and then consider the option of using one auditor for both the Town and Light Department. An RFP could be initiated in the Spring for the subsequent fiscal year. He pointed out that the auditors complete the DTE report, which is highly specialized. Although Manager John D' Agostino had sent Goulet a letter informing them their services were no longer needed because the Town and the Light Dept. would be using the same auditor, the Board agreed that Goulet should follow through on the FY 2003 audit. Motion: To look into the possibility of having one auditor for both the Light Dept. and the Town Passes 5/0 Director Beliveau pointed out to the Board that they had hired Goulet in a vote three years ago and should therefore vote to continue the services for FY 2003. Motion: To allow the Light Dept. to continue with Goulet, Salvidio & Assoc. for the FY 2003 audit Passes 5/0 r 3 (' Director Beliveau believes the current policies in effect regarding charges to customers for new construction are not well written. Current industry practice is to spend one year's anticipated revenue for capital expenses associated with a new customer service. The customer is responsible for the excess cost over and above one's year's revenue. A "true up" is required at the end of one year. The agreement should be in the form of a contract. Director Beliveau noted, for example, the Golden Triangle project may cost over $1 million dollars to service. Should the customer or the Light Dept. pay for this and how much? Director Beliveau suggests the policy needs to be clarified. He will develop one for future consideration ofthe Board. Engineer Ann Langille gave a presentation regarding outage statistics. She explained there are 7 distribution areas that are served by a feeder. Our goal is to increase reliability and decrease the duration of any outage which occurs. There are three statistical measures of this; the first is SAIFI, which measures the frequency of outages. MMED's average is 1.6 (less than 2 interruptions per year). SAIDI measures the duration of outages. The MMED statistic is 75 minutes, which is less than the national average of 117 minutes. CAIDI is a measure of response time. The MMED average is 47 minutes compared to the national average of 88 minutes. In all statistical areas, the Light Department's reliability record and response time is two to three times better than national averages. Vice Chairman McCarter pointed out how well our municipal light department serves the Town. ,'-'" Engineer Chris Cox made a presentation regarding the East Side Substation. He showed an aerial picture of the Mansfield/Easton line and commented that the impact is mostly within the town of Easton. The parcel of land being considered is on Bird Rd. and is owned by National Grid. Director Beliveau noted this substation could carry 75% of the Town, or 100% in a worst-case scenario. Vice Chairman McCarter voiced concern about new houses being built in the neighborhood. Clerk Achille asked if there was any noise associated with the new substation? Engineer Cox replied in the affirmative. Commissioner McCue asked if it was premature to speak with the residents of Bird Rd.? Director Beliveau suggested a public hearing to distribute brochures and educate the residents. Old Business There was no old business. New Business Vice Chairman McCarter asked if the return address on the electric bills had been changed from 125 High St. to Six Park Row? CFO Stoyle answered it had. Director Beliveau noted that there had been no correspondence on this matter with the billing vendor. r" 4 \ , Commissioner Amoruso thanked everyone for their hard work. Commissioner McCue ~ said he appreciated the presentations that were given. Clerk Achille wished everyone happy holidays. Chairman MacCaffrie questioned who receives the interest from the Light Dept. money that the Town holds? CFO Stoyle answered the Town does. Although the procedure remains unchanged, Chairman MacCaffrie said he agreed the Light Dept. should be directly billed for police details rather than a direct transfer being done. This has resulted in some details being paid twice. In regards to payments of bills being received at 125 High St. rather than at Six Park Row, Chairman MacCaffrie expressed the opinion that it can't be avoided. The date for the next meeting was set for Monday, January 12, at 7:30. Adjournment r Motion: To adjourn the Light Commissioner's meeting at 9:30 Passes 5/0 Re~ submitted: Jac~ueline Lee 1/28/04 Signature of Clerk r/p-i/rJr Dat,e' of Apprdval . ,-... 5