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HomeMy WebLinkAboutmin light commission 11/16/05 " r Mansfield Municipal Electric Department Minutes of Light Commissioners Meetifig DFt I c: November 16, 2005 . v ; J ?: C:;n I. v,_, '" j " ("... C" ,- ~ ! . ,; ,;, i "illJ ',t.. ,j Present: Chairman Bernie Dolan; Vice Chairman Louis P. Amoruso; Cle~k D~d ts:Carter; Commissioner Roger Achille; Director Gary Babin; Engineer Ann Langille; Engineer Chris Cox; Line Foreman Gary D' Ambra; Financial Assistant Jacqueline Lee and Manager John D' Agostino Light Commissioner Meeting The meeting was called to order at 7:48 followed by the Pledge of Allegiance. Motion: To approve the minutes from October 12, 2005 (Achille/Amoruso) Passes 3/0 (Dolan abstains) Director's Report Financial Statements for September 2005 - Director Babin presented MMED's financial statements for September 2005. He reported that net income for the year is slightly ahead of last year and net income from operations is slightly under $900,000. MMED was notified by MMWEC that there will be an increase in MMED's working capital r requirement. The reason is due to the tremendous increase in the cost of doing business with ISO New England. MMWEC handles all of MMED's interaction and billing with the ISO. Since the cost of power on the spot market, from which MMED obtains about 20% of its power supply, has risen so dramatically over the last several months, MMWEC has increased MMED's working capital requirement from $885,087 to $1,529,106, which will have a significant impact on MMED's cash position. The increased working capital requirement payment will be made in three installments so as not to deplete cash. Director Babin also explained that MMED's payments to the Town for its PILOT and internal services are now done on a quarterly basis instead of in one lump sum at the end of the Town's fiscal year. This will also have an impact on MMED's cash position. That impact will not show up until October, however, since the first payment was made after the September books had closed. Director Babin reported that energy sales for July through September 2005 are up 7.5% from 2004. He attributed this growth primarily to residential sales. Town Manager D' Agostino questioned the 13.7% increase in year-to-date municipal energy sales and whether that was attributable to the schools. Director Babin said he was not sure but will look into it. He thought it was possibly due to a reclassification of accounts. Mansfield Utility Assistance Program - Director Babin stated that once again MMED has r been asked to make a contribution to the Mansfield Utility Assistance Program. Mansfield's " r Director of Social Services, Gail Farrugia, has requested $40,000 in assistance money for the current fiscal year. Last year MMED made a donation of $30,000. Director Babin explained that this money is used only for payment of electric bills. He also said there are strict guidelines to qualify for assistance, a copy of which was distributed to the Board. Director Babin said he believed the clients are screened carefully and that this job was better performed by professionals experienced in that field, such as the Social Services staff. Commissioner Achille noted the guideline which mentioned excessive electric heating bills and questioned whether it was based strictly on the bill or the bill relative to the client's income. Director Babin answered income was a factor but MMED doesn't get involved with evaluating the clients needs and he feels that it is best to maintain an arms length relationship for distribution of the funds. That screening ofthe clients is left to Social Services. Commissioner Achille also asked if the assistance money was a grant. Director Babin explained the money is classified by MMED's auditors as an uncollectible debt. MMED is giving the money to Social Services and effectively they give it back to MMED. He also told the Board that in order for a client to receive assistance they themselves must make a payment equal to 25% of the assistance they will receive. Commissioner Achille wondered why Social Service would give a client $500 and also have them pay $125, instead of just giving them $375. Town Manager D' Agostino explained the reasoning behind that is the client needs to make an effort and commitment to pay their own bills and not be totally reliant on Social Services assistance. r Commissioner Achille asked what amount of funds are left over from last year. Director Babin indicated that the last time he checked there was about $15,000 left over. Director Babin said that in 2003, Social Services had also requested $40,000. Last year, Social Services only requested $30,000 due to the amount they had left over from the prior year. Since this winter is predicted to be particularly bad, however, they have again requested $40,000. Clerk McCarter asked if someone who heats their house with oil or gas and has an excessive bill would get their electric bill paid. Town Manager D' Agostino answered they would not. Director Babin ended the discussion by stating that the Town is fortunate to have this type of arrangement where MMED funds the program and has other, objective professionals make the decisions in regard to assistance for the clients. Motion: That the Mansfield Municipal Electric Department contribute $40,000 to the Town of Mansfield for the purpose of donating this money to the Mansfield Utility Assistance Program. (Amoruso/McCarter) Passes 4/0 Review of MMED FY06 Capital Budget Plan - Engineer Ann Langille reviewed MMED's progress on the FY06 capital budget plan. She explained that in FY05, MMED was transitioning to the new fiscal year and that this was MMED' s first opportunity to revisit what r they had learned since the transition. ", r Engineer Langille talked about projects that had been planned in FY05 but hadn't been completed before the end of FY05 (a six month fiscal year from January 1 - June 30, 2005). At the bottom ofthe chart which was distributed to the Board, she reviewed the FY05 projects carried over to FY06. She stated that MMED had determined budget numbers for the FY05 projects that hadn't been completed, but were completed in FY06, and requested a budget figure of $259,462 for the FY06 budget to fund these projects. She then reviewed unbudgeted projects MMED wants to add to the FY06 capital budget, which total $370,971. These projects were unforeseen at the time the FY06 budget was prepared early this year. These projects include an overhead line construction upgrade on the 1 W7 feeder from Gilbert St. to Tremont St.; the High Street yard paving project; a project on Oxford Road to complete work in the Industrial Park; security cameras and a wireless Ethernet connection for the Gilbert Street Substation. She also said line transformer requirements were underestimated and MMED was required to purchase more transformers. Engineer Langille noted that one important item impacting the completion of the FY06 budget as proposed is that MMED cannot proceed with three of the projects, budgeted at over $153,000, until Verizon sets the required poles. The lW7 project on Gilbert St. has been added in part to utilize MMED labor that had originally been allocated for those 3 projects. Chairman Dolan questioned the comment "waiting for Verizon to set poles" and the number of times it was listed on the report. Director Babin said Verizon is not staffed the way ",.....- MMED is staffed and it is tough getting them to do the work MMED requests on a timely basis. He also believed MMED is certainly not the only one with this problem. Town Manager D' Agostino reported there is legislation pending for double pole replacement and a stricter structure and time-line for that work. Director Babin said local ordinances and by-laws have been established by other municipalities but had been fought by Verizon and struck down at the state level. Director Babin explained that the poles in Mansfield are jointly owned by MMED and Verizon. The town is divided roughly in half and MMED sets the required poles on its side of town and Verizon sets the required poles on its side of town. He also noted it has always been like this but the situation is getting increasingly worse with requests for pole sets and transfers by Verizon of double poles. Engineer Ann Langille reported MMED is now preparing the FY07 budget. She said MMED will have to consider moving some FY06 projects to FY07, although it would not be known until spring which specific projects would be deferred. One project would possibly be the new conduit and manhole system to get from School Street Bridge to Mansfield Crossing (Golden Triangle), budgeted in FY06 at $218,000. Director Babin noted that since the Board package had been distributed, MMED also opened bids for a bucket truck and expected to award the bid at a cost of $120,000. Engineer Langille also reported MMED changed budget allocations for overhead and underground work, as history had shown the allocations were inappropriate, but that the revisions had no impact on the total amount of the budget. She also indicated that there had not been a lot of activity with reimbursable projects through ,,-.. ", (' September 30, although there was in October, and that MMED has not made much of a dent in the reimbursable project hour allocation. Clerk McCarter inquired about paving of the High Street Yard. Director Babin stated this is a storage area that was classified as a Massachusetts DEP Hazardous Waste site. He explained that in 1969 the Town bought the land from the New England Power Company and it turned out that the land was originally wetlands that had been filled with what is classified as "urban fill". As such, it was classified as a hazardous site. MMED employed Woodard & Curran to file the necessary reports with the DEP and Director Babin noted that MMED has fulfilled the DEP requirements and, as a result, the yard was now ready to be paved and would not require any further monitoring. Clerk McCarter asked about negotiations with National Grid and whether there was a Purchase & Sales agreement. Director Babin answered that there is no agreement at this time. He further explained that a portion of the new Gilbert Street Substation was built on land owned by National Grid and that this has been an on-going issue for at least three years. He said MMED has been unable to get National Grid to conduct meaningful negotiations with them to facilitate purchase of the land. Town Manager D' Agostino added that MMED has budgeted money for this in FY06. Before the motion to approve the revised FY06 budget was voted on, Vice Chairman Amoruso asked if this had been run by the FINCOMM. When Director Babin responded that it had not, Vice Chairman Amoruso said he thought it should be run by the FINCOMM ~ because that was what was done in the past. Director Babin indicated he had not done so because he felt that this type of update and modification did not require him to do so and, further, that some of the FINCOMM comments during review of the FY05 budget results had been reflected in this budget update. Vice Chairman Amoruso said he didn't intend on changing it, he just wanted to run it by them before the revised budget was voted on. Commissioner Achille withdrew his motion to approve the budget, saying he agreed with Vice Chairman Amoruso's view. Town Manager D' Agostino said he wanted to clarify this issue and asked if it was the Board's intention to give FINCOMM an oversight rule in this process. Vice Chairman Amoruso said no, but the FINCOMM was asked to advise the Board. He believed it was like saying we gave you the task but we really don't care what you think. Chairman Dolan indicated that the motion to approve the revised budget had been withdrawn. He also pointed out that the FINCOMM had received the Light Department's packet at the same time the Board had received it and wondered how long the Board should give the FINCOMM to review it and comment since it had not already done so with the information in hand. It was agreed that the staff would contact the FINCOMM and discuss this matter with them and that the approval of the revised FY06 capital budget would wait until the next Light Commissioner meeting. Vice Chairman Amoruso commented that the process should be followed or it should be abandoned. Articles of Interest Regarding Rate Increases - Director Babin refreshed the Board's ~ memory that MMED had implemented a 0.5 cent increase in the PPCA on August 1, 2005 :. ",.....- and another 0.5 cent increase on November I. He had gathered news articles since that time to present to the Board in order to give the Board a basis of comparison for MMED's rate increases versus what is occurring with other utilties. Director Babin also prepared a table of information comparing MMED's rate increases, totaling 9% between the two PPCA increases, to what other utilities had implemented. Director Babin believed that the information shows MMED has made minor rate increases relative to the approximate 25% to 35% increases that other utilities have been implementing. As a result, he felt MMED's customers are in a relatively good situation. The information he distributed included a rate increase summary showing the cost of electricity for a typical 500kWh residential customer. A Mansfield Electric customer pays $60.23 for that service while a Mass Electric customer pays $81.20. In addition, customers of Commonwealth Electric, Cambridge Electric and Boston Edison, all NStar subsidiaries, pay over $100 for that same level of service. Comparisons to other municipal utilities who had announced rate increases were also presented and MMED was significantly below most of them. Director Babin stated MMED's increase is modest compared to what's going on and believes MMED has done a good job of managing power supply. He noted that a portion of the rate increase summary that he had distributed to the Board would be printed in the winter edition ofMMED's newsletter, the Live Wire, to residents. Old and New Business r Clerk McCarter mentioned the School Superintendent's letter regarding the increase in the school's electricity budget, which had been discussed at the October 12 Light Commissioners meeting. He asked Director Babin ifhe had met with Superintendent Moretti. Director Babin said he had spoken with Lincoln Lynch as he is administrator of the School Dept. budgets. He told the Assistant Superintendent there would be an approximate 6.5% increase overall for electric costs for the year. Director Babin said it was unclear to him what the 20% increase was that was referred to in the original letter. Town Manager D' Agostino said the Board should realize the School Department budgeted the same amount for this year as for last year in order to stay within their budget. Chairman Dolan said there had previously been a request from the Boy Scouts to the Board of Selectman to remove a pole located on the West Mansfield Common, to accommodate a landscaping project the Boy Scouts were performing on the common located in front of the Old Country Store. He informed the Board, however, that based on his discussions of the matter with the MMED staff, the work would cost MMED too much money to reasonably accommodate the request. Director Babin further explained one option was to keep all the lines overhead and move them across the street at a cost of approximately $50,000. The second option was to go underground at a cost in excess of $100,000. Director Babin indicated that as there is no benefit other than aesthetic value, this cost can't be justified. Chairman Dolan asked Town Manager D' Agostino to send a letter to the young man that had made the request indicating the disposition of the issue. (' r ~ J . ~ r r .. Chairman Dolan announced that a few people had contacted him regarding streetlights being out of service and that he wanted them to know that they are being fixed by MMED. Director Babin added that residents should call or e-mail the Light Department when they notice a streetlight out of service since that is really the only way MMED will find out about it. Adjournment Motion: To adjourn the Light Commissioner's meeting at 8:43 Passes 4/0 Respectfully submitted: Jacqueline Lee 12/14/05 didkli? Signature of Clerk r .,. 'YJl v) , Date of Approval