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Home My WebLink Aboutmin light commission 04/12/06 ~~, . . {' RECE\VED rl~\~H,\ ~\ r.~~.s Off \CE .. '.} ::- ~ -.:; ~..' ,..-. 06 JUN 23 AM n: 26 t1ANSFlELO MASSACHUSETTS Present: Chairman Bernie Dolan; Vice Chairman Louis P. Amoruso; Clerk David McCarter; Commissioner Michael McCue; Director Gary Babin; Engineer Ann Langille; Line Foreman Gary D' Ambra; Financial Assistant Jacqueline Lee and Town Manager John D' Agostino Mansfield Municipal Electric Department Minutes of Light Commissioners Meeting April 12, 2006 Light Commissioner Meeting The meeting was called to order at 8: 12 PM. Motion: To approve the minutes from February 15, 2006 (Amoruso/McCue) Passes 4/0 Director's Report (' MMED 2005 Audit and 2005 DTE Report - Director Babin stated that MMED was seeking the Board's acceptance of the FY 2005 audit, which covered the six-month fiscal year transitional period from January 1,2005 through June 30,2005. Mr. Kevin McConnell from Nelson, Adam and Dickson P. C., who performed the audit, was in attendance to review the report. Ms. Lisa Dickson, the partner who oversaw the audit, was planning to be present at the Board meeting which was originally scheduled for March 29, 2006 but was unable to attend this meeting. Mr. McConnell said that he would cover some of the broad points in the audit, as well as the management letter. He began by stating that the six-month audit ending 6/30/05 was necessary so that MMED's fiscal year would coincide with the Town's fiscal year. He also noted that the audit was performed in conformity with DTE regulations. Mr. McConnell stated that MMED's net assets increased by $728,000; which is net income of $973,000 less a 6 month accrual for payment in lieu of taxes (PILOT) of $245,000. Operating income increased over prior year due to an increase in energy use as well as an increase in the Purchased Power Cost Adjustment (PPCA). Total operating expenses increased by $770,000, which was due to increased purchased power costs and transmission costs. With regard to the management letter, Mr. McConnell said that the only issue raised in the current years' letter was that discounts had not been calculated correctly on certain classes of street lights, due to an error in the setup of the rate code in the billing system. MMED has corrected this and the billing is now being accurately calculated said Director Babin. With respect to prior year comments, it was noted that revenue from jobbing had not been recorded when earned but when received. This procedure was changed and immediately implemented in June 2005 after it was pointed out to MMED in the audit management letter for the period ending December 31,2004. (' ~ r II r The next issue noted, also from prior year comments, was that some timesheets were incomplete as to dates and hours and some showed no evidence of having been signed for approval. It had been recommended that MMED review each time sheet for completeness and appropriate approvals. Mr. McConnell stated there has been significant improvement as the auditors noted only two Occurrences of incomplete time sheets since this recommendation was made. Clerk McCarter mentioned Director Babin's memo regarding the new payroll processing procedures and asked if he followed up on it with Office Manager Laurie Anderson. Director Babin explained a new policy has been instituted within the department and Office Manager Anderson oversees the time cards, making sure they are in order and are properly approved. Director Babin also noted that in the Board package for approval was the calendar year 2005 Department of Telecommunications and Energy (DTE) report. He stated that this report is basically a statistical summary of MMED's performance in the calendar year. Director Babin reminded the Board that MMED is still required to file tqis report on a calendar year basis even though MMED has changed to a July to June fiscal year. Motion: To accept the MMED FY 2005 audit covering the period from January 1,2005 to June 30, 2005 and to approve the MMED 2005 annual report to be filed with the DTE (Department of Telecommunications and Energy) (Amoruso/McCue) Passes 4/0 (' Financial Statements for January and February 2006 - Director Babin presented MMED's financial statements for January and February 2006. He reported that the balance sheet shows MMED's free cash position for February 2006 at $1.15 million, which is still below the target of $1.5 million. Net income year-to-date is approximately the same as for the same period in the prior year. Director Babin also stated that energy sales have fallen significantly, with January down 8.7% and February down 4.8% relative to the same periods in 2005. He still expects sales growth to end up in the 2.5% to 3% range for the year, however. Director Babin explained that MMED is still drawing down monthly from the MMWEC reserve trust rate stabilization fund by the difference between what Calpine would have cost MMED and what Dominion actually costs. He added that this has had no impact on the rates. Vice Chairman Amoruso asked about the Calpine settlement. Director Babin explained that because the matter was still pending litigation, and therefore could only be discussed in executive session, very little could be said. He did state, however, that the Calpine settlement would be put into another separate interest bearing account at MMWEC and the existing reserve trust fund would be reimbursed for the Calpine drawdown once a settlement has been received. He also added that MMED is unsure of what the situation will be in 2008 with energy prices when the Dominion contract runs out or how much it will cost to replace it. The reserve trust fund has been accrued to help mitigate the impact of any significant increase in costs at that time. Collection Write-Off Summary - Director Babin said that MMED's Write-off Policy states that r the MMED staff is required to report back to the Board each year to summarize debt for closed accounts that has been outstanding for at least one year and which is being written off He reported r :r . . r that on January 1, 2006, a total of $49,331.02 was written off for the period prior to December 31, 2004. This figure was made up of $28,117.41 which was written off for CY04 and $21,213.61 which was written off for the period prior to January 1, 2004 because recent collection activity on these accounts by MMED staff had failed. Director Babin then reviewed the follow-up procedure on closed accounts. He said that once an account has been closed and has gone unpaid for a period of thirty days, a letter goes out requesting payment and notifying them that failure to pay will result in MMED referring the account for collection activity. Ten days later, a second letter goes out letting them know their account will be sent to a collection agency in ten more days. After fifty days the account is sent to the collection agency and the outstanding debt is then put on the customer's credit report. Director Babin stated that MMED has been aggressive and almost $4,000 has been collected through the collection agency. He believes this procedure has been working and has had a positive impact on accounts receivab Ie. Director Babin also reported that since the new deposit policy has been implemented, approximately $74,000 in deposits has been collected. He believes the policy implementation has gone smoothly, better than expected, and said that the bulk of complaints have come from landlords. He said that when he speaks with them, he points out that if they are able to collect first month, last month and a security deposit that MMED should also have the same opportunity to protect itself He said the staff may come back to the Board later with suggested modifications to the policy. (' Clerk McCarter mentioned a letter that the Board had received from a woman who was moving within Mansfield and was complaining that she now had to submit a deposit. Director Babin pointed out that in the past, MMED had refunded deposits to customers previously deemed to be good payers and that some ended up leaving an unpaid balance when they closed the account. He added that he did not plan to propose any modifications to the policy until it had been in effect for at least one year. Old and New Business Chairman Dolan asked Line Foreman Gary D' Ambra as to how much longer they would be digging on School St.' Foreman D' Ambra said there would be a few more days of trenching, then when everything was in the ground, permanent asphalt would be put down. He explained this work is being done in conjunction with the Golden Triangle as well as for MMED's continuing work to relocate some of its overhead circuits underground. Adjournment Motion: To adjourn the Light Commissioner's meeting at 8:40 Passe ,,-..... d21 \ 0 ( Date of Approval r I