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HomeMy WebLinkAboutmin light commission 02/15/06 '",," i~1 ,- i,,)( ;-lD I~'A t\ (' (.,,:~ t" . -:... .... It\ d,:di lJHU:)ETTS Present: Chairman Bernie Dolan; Vice Chairman Louis P. Amoruso; Clerk David McCarter; Commissioner Roger Achille; Commissioner Michael McCue; Director Gary Babin; Engineer Ann Langille; Engineer Chris Cox; Line Foreman Gary D' Ambra; Financial Assistant Jacqueline Lee and Town Manager John D' Agostino Mansfield Municipal Electric Department r!'::- ,: iCE Minutes of Light Commissioners Meeting 06 ~PR 13 A~f 10: 25 February 15, 2006 (' Light Commissioner Meeting The meeting was called to order at 8 :00 PM, followed by the Pledge of Allegiance. Motion: To approve the minutes from January 18,2006 (Amoruso/McCue) Passes 5/0 Director's Report r Financial Statements for December 2005 - Director Babin presented MMED's financial statements for December 2005. He reported that Net Operating Income for December 2005 was $89,684, down by $200,000 from 2004 due to the 25% increase in power supply costs. He explained that sales revenue is also up, but only by 15%, so is not enough to cover the increase in power supply costs. He stated that MMED's cash position for December 2005 was $702,298, down significantly from $1.51 million in November 2005. This was due to: (1) The second quarterly payment to the Town for internal services and PILOT in the amount of$276,553 made in December (2) A payment in the amount of $214,673 made in December to MMWEC due to its required increase in working capital (3) Collections were down $200,000 from November 2005 (4) There were 5 payroll weeks in the month of December, as opposed to the normal 4 weeks. Director Babin said that year-to-date energy sales through December are up 5.4% but expects they will fall off after the winter due to the warm weather. MMED is already aware that January 2006 energy sales have declined 8.6% from January 2005, a fact not reflected in these financial statements. Clerk McCarter asked if Director Babin expected MMED would make a profit for the year. Director Babin answered that yes, MMED's Y-T-D net income is $1.178 million, while last year for the same period it was $1.377 million. It looks like MMED will collect $1.5 - 2 million in net operating income for the year. (" FY07 MMED Capital Budget - Director Babin stated that he would like to make a few points before Engineer Langille presented MMED's FY07 Capital Budget for the period July 2006 to June 2007 to the Board. He said that MMED is requesting $1.927 million for capital expenditures. He explained he wants all expenses accrued to a project to ultimately be charged to that project. To that end, a 17% stores expense for all stock is charged in this r budget, which was not included in last year's budget, as MMED attempts to reflect the cost of doing business. In addition, MMED has increased the overhead amount charged to straight time labor from 60% to 75% based on actual CY05 data for this budget. Director Babin also stated that MMED continues to account for all manhours in a detailed fashion. He explained that the Operating Budget manhours are determined once the Capital Budget is finalized. He reported that MMED is requesting that $100,000 be put aside for the purpose of looking into automated meter reading. Director Babin said that he is not looking to displace anyone and the employees involved would be given other tasks if it came to that. He also said he would come back to the Board with a specific plan for the Board's consideration before committing any money. Engineer Langille started her presentation by pointing out that MMED supplies power for the entire Town from the Gilbert St. Substation on the west side through seven distribution feeders. This is MMED's only distribution substation. r She then reviewed MMED's Capital Work Plan Cost Summary, which includes 3,434 manhours for one-time projects at a cost of $1,065,236. She explained a total of 2,625 manhours have been set aside for reimbursable projects. She said projects classified by plant account totals 1,200 manhours at a cost of $861,757. The capital work plan totals are 7,259 manhours and a total cost of$I,926,993. Engineer Langille then provided examples of carryover projects from prior years, one-time projects and recurring projects which take place over a series of years. She said that the single phase and 3 phase primary upgrades are carryover projects for which MMED is waiting on Verizon to complete their setting of the required poles. Another example of a carryover project is primary conduit installation on School Street. One-time projects include the 1 WI underground cable work on School St., totaling 551 manhours at a cost of $277,704. Another was the 1 W5 School St. and Coral St. Primary Upgrade, which totaled 803 manhours at a cost of $100,510. A third one-time project was the 1 W6 Willow St. Primary Upgrade - Phase I requiring 336 manhours for a cost of $28,581. The last one-time project listed was Squire Street and Ephriam Street Single Phase Underground Conduit Installation for a total of$132,988. Engineer Langille reported that some examples of MMED's recurring projects are the cutout replacement project and pole inspections. She said that the cutout replacement project will be completed this year. The portion of the pole replacement project for FY07 totals 648 hours for a cost of $53,966. (" Engineer Langille stated that the Route 106 Improvement Project is a reimbursable project for which MMED has allocated 838 manhours. The Mansfield Crossing Project, another reimbursable project, will utilize a minimum of 1,000 hours once the scope of work based on r the design at that location is finalized. It is estimated that the Town of Mansfield Fiber Optic Cable Project will take 537 manhours. Engineer Langille then gave an overview of the Project Cost Summaries by Plant Account, which accounts for nearly 50% of the Capital Budget. She said that additional overhead and underground work not specifically determined as of this time are estimated to total 1,000 manhours at a cost of $240,000. New transformer purchases will total $152,400; purchase and installation of new meters will total $91,250 and the cost of new vehicles will be $35,000. She explained that engineering and operations management at a cost of$267,107 is comprised of a portion of each of the salaries for the Line Foreman, the 2 Engineers and the Director as they spend significant time planning and managing capital projects. The "Other" account, which covers projects not specific in scope, has 200 manhours and $76,000 allocated to it. The totals for the Cost Summaries by Plant Account are 1,200 manhours and $861,757. Director Babin commended Engineer Langille for her hard work in preparing the budget and in making her presentation. He also acknowledged Gary D' Ambra's significant contribution in getting the budget completed. Town Manager D' Agostino also complimented Engineer Langille by saying she had done a fine job. Commissioner McCue said the presentation was very good and very understandable. r As a final note, Director Babin said he wanted to address the question asked earlier in the meeting as to whether MMED had the available funds to support this capital budget. He explained that the budget would be funded by net income and depreciation money. He also commented that MMED was building equity and had cash on hand to support the work. He added that MMED is building a solid system to ensure system reliability for its customers. FINCOMM member Jim Lazarra told the Board he had met with Director Babin and Engineer Langille to review the capital budget. He stated that while some projects get done within the fiscal year and some don't, the FINCOMM was comfortable with how this was being handled. He pointed out that some projects are done on the weekends and off-hours. He also said the FINCOMM was aware of MMED recently raising the rates. Taking everything into consideration, Mr. Lazarra said the FINCOMM was comfortable with MMED's capital budget. He did say that they will wait until a detailed scope of work was defined to give their opinion on the automated meter reading project but understands that its goal would be to improve efficiency. Motion: To approve the FY07 MMED Capital Budget in the amount of $1,926,993 (Amoruso/Achille) Passes 5/0 Old and New Business r-- Clerk McCarter asked about MMED's status with Calpine. Director Babin said it couldn't be discussed in open session because of the pending litigation but advised it could be discussed in an executive session. He added that MMED is starting to draw down on the rate stabilization fund at MMWEC, to offset the increased cost of replacing the Calpine contract f' \ {' """ with Dominion but that this money will be replenished when MMED receives its payment from Calpine. Vice Chairman Amoruso inquired as to whether MMED would be reimbursed for its legal fees incurred while attempting to get payment from Calpine. Director Babin responded that he didn't think so but would follow up on it. Chairman Dolan asked about the situation with Verizon and the poles on Rt. 106. Line Foreman D' Ambra said MMED would be meeting with Verizon the following day and that Verizon was scheduled to start work in March. He pointed out, however, that Verizon had supposedly scheduled their work on the East St. project for February and Foreman D' Ambra has yet to see them there. Adjournment Motion: To adjourn the Light Commissioner's meeting at 8:40 Passes 5/0 Respectfully submitted: Jacqueline Lee 3/29/06 Si~~-fd- r .