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HomeMy Public PortalAbout10-04-1999 PROCEEDINGS OF THE COMMON COUNCIL OF THE CITY OF RICHMOND,INDIANA,SERVING AS A BOARD IN CHARGE OF THE OPERATION OF THE RICHMOND POWER&LIGHT PLANT MONDAY,OCTOBER 4,1999 The Common Council of the City of Richmond,Indiana,serving as a Board in charge of the operations of the Richmond Power&Light Plant met in regular session at 7 p.m.Monday,October 4, 1999,in the Council Chambers in the Municipal Building in said City.Chairperson Bruce Wissel presided with the following Councilmembers in attendance:,Howard"Jack"Elstro,Etta Lundy,Bob Dickman,Sarah"Sally"Hutton,Dennis R.Rice Sr.,Bing Welch and Larry Parker.The following business was conducted: ROLL CALL Nine present. APPROVAL OF MINUTES Councilmember Hutton moved to approve the minutes of September 20, 1999,second by Councilmember Parker and the motion was carried on a unanimous voice vote. APPROVAL OF BILLS,INVESTMENTS AND TRANSFERS Upon recommendation of the Finance Committee,Councilmember Hutton moved to approve the following bills for payment,seconded by Councilmember Allen and by unanimous voice vote the motion was carried. Bills Already Paid: Payroll and Deductions Investments Purchased From: Cash Operating Fund Bond Sinking Fund Utility Bond Reserve Fund Depreciation Reserve Fund Insurance Reserve Fund Consumer Deposit Fund Cash Reserve Fund Group Insurance Fund Total Investments Transfer from Cash Operating Fund to: Cash Reserve Fund for Payment To City in lieu of taxes Transfer from Cash Operating Fund to: Depreciation Reserve Fund $3,430,209.78 For Property&Plant Transfers from Depreciation Reserve to: Cash Operating Fund Transfers from Consumer Deposit to: Cash Operating Fund Transfers from Utility Bond Reserve Fund to: Bond Sinking Fund Transfers from Cash Operating to: Interest and Bond Principal Bond Sinking Fund Cash Reserve Fund Utility Bond Sinking Fund Depreciation Reserve Fund Insurance Reserve Fund Consumer Deposit Fund Interest and Bond Principal End of Month Petty Cash Revenue Bonds Interest Coupons Redeemed Interest Coupons Redeemed Bond Coupons Miscellaneous Prepaid Invoices $ 21.858.96 Total Prepaid Invoices 3,452,068.74 Total EFT Transfers: 196,419.30 Total Prepaids plus EFT Transfers: 3,648,488.04 Total Bills Not Paid: 784,864.27 Grand Total of Bills to be approved: $4,433,352.31 RP&L Minutes Cont'd October 4, 1999 Page 2 REMARKS BY CHAIRPERSON Chairperson Wissel had no comments. UNFINISHED BUSINESS There was none. STREET LIGHT COMMITTEE REPORT Councilmember Elstro said Sections 6 and 7 in Meadow Park have been completed through RP&L engineering and in the line department and Section 8 has been approved by the City.He said it would probably be a month or two before it gets out to the line department. REPORT BY GENERAL MANAGER General Manager David Osburn asked Harry Phillips,the Energy Services Director to give a brief presentation on the Tree Power Program.Phillips said RP&L joined the Tree Power Program of the American Public Power Association (APPA)and part of that program is to facilitate the distribution of trees in the community.He said the utility has also entered into a unique partnership with Hayes Regional Arboretum and to further the utility's environmental commitment to the community,on Saturday,October 16,from 11 a.m.to 9 p.m.they will be distributing 3,000 trees on a first-come,first-served basis. He said some of the trees are Paw-paws,Cucumber Magnolias,Lawson Fall Cyprus and Persimmons and added that this has been a unique partnership in that they assisted in selecting trees native to Indiana and conducive to the climate. He said the goal is a mutual one and it's a long term distribution of trees within the community.In conclusion he invited the public out to Hayes Arboretum at 801 Elks Road on October 16. Councilmember Welch asked if this distribution of the trees would be to private residents for planting on their property. Phillips said part of the program is to make available trees to plant to the utility's customers however it chooses.He said there are also planting instructions included.He said that is also on RP&L's website.Councilmember Welch asked if he had checked with the Street Tree Commission to get a copy of the approved tree species it has published as well as the ordinance. Osbum explained that he has that information in his office and added that they can have some kind of sign informing people of that list of approved trees.President Wissel asked if people are allowed to plant at all in the median and Councilmember Welch responded that they could not in the City.Councilmember Welch said if it exceeds three feet in the area between the curb and sidewalk it is deemed to be street tree property and if people are going to plant there,by ordinance,they have to get approval.Osburn said he would make sure they would get some kind of notification that alerts people to those rules so they don't accidentally plant them in the wrong locations. At Waynet's annual meeting,Osbum said,RP&L was nominated and did win in the non-profit category for the best web page.He said that prompted him to bring Cam Hart,from the IS staff and Ron Lind,the new IS manager,to this meeting to give a short presentation of the web page. Lind manned the laptop while Hart explained each of the items that can be seen on RP&L's website at www.rA- l.com.She said the home page was designed with ease of navigation the primary goal.She said they add new and current information currently and encourage interaction with the utility's customers.She said from the home page visitors to the website can easily see what is offered and can read about a variety of information.She said details are provided about the business at RP&L,which includes location and hours as well as history of the utility along with the names of those on this Board. Included on the website is the cookout and prizes the utility is giving away on October 7 for the Public Power Week, she said,and made it possible for their customers to register for the drawing,on line.She said on the Electric Gourmet link,visitors can fmd out show times and print the recipes featured for each month.Under the environment section,she said,Phillips has introduced how the utility deals with and follows environmental regulations.There is also a section on the Tree Power Program that was discussed earlier in this meeting,she said. Hart said the utility welcomes comments and suggestions made by its customers and has provided forms they can fill out and send back by e-mail.There is also information about how your meter works,she said,and new customers can find out what they want to know on the customer service pages.In case of bad weather,she said,that might cause a power outage there is a page telling about what to do during such an event.There is also information on Y2K on the year 2000 page,she said.On the safety page,she said,Hal 0 Gen,promotes electrical safety and the information is good for everyone to review. Chairperson Wissel said he did use the website to report a light being out and received an acknowledgement of the complaint.He asked if that is standard procedure and Hart answered that all e-mail is acknowledged. Osburn said they are trying their best to use the worldwide web as an information tool and education tool as well as a customer service tool.He said something in the future is a customer being able to access his or her account,can see a graphical view of their usage and over a period of time their payment history. Reporting on an APPA meeting,Osbum said RP&L had applied for an APPA DEED grant,which is where members pay dues and that money is allocated out to member systems to do small research projects.He said DEED is an acronym for Demonstration of Energy Efficient Developments.He said he had applied for a grant to test distributive generation which,he said,is believed to be the future of the industry.The concept,he said,is that utilities will have difficulty building large power plants because of environmental and site restrictions and cost and there will be more small generation distributed out of the distribution system. RP&L Minutes Cont'd October 4, 1999 Page 3 Osburn said this brings with it a whole set of problems which include metering concerns,power quality concerns, reliability concerns and just deficiencies that have to be dealt with.He said APPA has been looking for a system to demonstrate this technology and to see how well it runs.He said he had offered the local utility to do a project and applied for a grant.As part of the process,he said,they know it requires the approval of this board and that is something they can discuss during the budgeting process.He said they did award a grant in the amount of$47,000 which is a large grant for APPA because the maximum they give out is$50,000.He said RP&L had estimated the cost of the project to be about$94,000 so they decided to fund half of the project.He said he would explain it to the Board in more detail at the budgeting meeting. Councilmember Welch asked what the time line is and Osburn said they hope to initiate the project the first of the year, have a unit operational by the first of March,run it for a six-month evaluation period and be done around September or October.He said he knows the biggest difficulty will be getting a unit and there are only a few of them out in service today but the manufacturer said some of the first units will be available this fall.He said if there is a problem getting a unit,that,of course,will push the project back. In answer to a question by Councilmember Welch about the type of customer they really wanted to address with this research project and Osburn said they have not identified a specific customer by name.He went on to say that distributive generation has some promises which include relieving substation transmission upgrade because it puts the generation out near where it's used so it relieves distribution loading and unloading.He added that it is also viewed as a power quality tool and the one they are looking at will run off natural gas,so for an operation that cannot stand any down time,the processes are that critical.He said they would be looking for a small,commercial location which would be willing to work with the utility because there will be some interruptions while doing the project. City Attorney Bob Bever spoke about the amendment to the General Manager's contract,saying that pursuant to conversations which have previously been conducted and comments from the Board's officers,that he has prepared that amendment.He said it includes the three items which were discussed:(a)The annual salary would be increased from$86,000 to$88,580 which is the increase of$2,580 percentage which was discussed at the executive session;(b) It adds one week to the vacation time of the General Manager,that whatever the policy for the employees this would be one week additional,yet still based on the number of years one is with RP&L;and(c)The additional benefit of providing the split value life insurance policy with a$5,000 premium of which$2,500 would be paid outright by the employer and the other$2,500 would be paid by the employee but as a reimbursable expense that would be reimbursed by the employer then taxed as income to Osburn.He said he feels if this is the Board's pleasure,then it would be appropriate for a motion to amend his contract to include those three items. Chairperson Wissel asked Councilmember Welch as head of the Personnel Committee to comment on the amendment, which he did,saying that the Personnel Committee started looking at the added insurance with the idea of further protection for him and his family.However,they were also looking for some added protection for RP&L which the split dollar does.He said the added week of vacation was something that should have been done in this original contract.And,the added compensation was in line with the increase of all the RP&L employees for the year 2000.So, the Personnel Committee reached consensus on those points and recommends that these added benefits be amended into the General Manager's existing contract.Councilmember Rice moved to amend the contract to include the three items discussed,second by Councilmember Parker and the motion was carried on a unanimous voice vote. Osbum reminded the Board that RP&L is hosting the fall conference of IMEA this week with meetings Wednesday and Thursday mornings,and a banquet Wednesday night.He urged Board members to attend.Osburn said he had distributed a booklet to Board members which is a brief history of some public power issues and what has gone on in the past few years that pertain to public power. He said last year when Unit 1 at Whitewater was upgraded,ABB Services,the general contractor which did the work, came back and asked for additional compensation that RP&L felt was excessive and unwarranted.He said that amount was around$700,000 which was more than what the job was in the first place.He said quite a bit of time was spent negotiating this issue with them and a settlement was finally reached which was agreeable with both parties. Bever said the original contract approved was for$764,860 and at the end of their work they submitted two additional invoices for extra work that was found,unforeseen circumstances in the amounts of$57,416 plus$56,135,so approximately$113,000.He said while reviewing those an trying to knock those down,ABB came with a third change order in the amount of$680,847.He said what has happened is that third request was completely thrown out and on the first two additional invoices there was some additional work but not to the extent they thought,so an offer was made of $70,000 on that$113,000 and were notified two weeks ago that is acceptable to them in conjunction with them dismissing any of that$680,847 claim. Bever said although Osbum has the authority to do this and accept it,he feels it is appropriate for this board to approve the settlement for the$70,000 additional payment to ABB.Councilmember Dickman moved to approve the settlement, second by Councilmember Allen and the motion was carried on a unanimous voice vote. Osburn stated that he would like to compliment Bever who did an excellent job in negotiating this with ABB Services and his help really did make a difference.Bever responded that he was happy to get it done without being forced to file suit so there was no extra litigation costs. Councilmember Welch alluded to the letter which Osburn sent out on the problems with Unit No. 1 where the rupture was in the water cooling lines which resulted in being down and outage.He asked if the unit is back up and running efficiently.Osburn said Unit 1 is back up and running well and Unit 2 is up and running,but when this happened Unit 2 was off for fall maintenance so for a couple of days they actually had both units off at the same time,which is very rare.He said it was a good thing it happened at this time of the year when the load is very low because of the fall temperatures.He said next week Unit 1 will be off for its scheduled fall maintenance and at the next Board meeting he had asked Bob Crier,the power production manager,to come in and give the Board a brief update on what he has done this fall with the outages. RP&L Minutes Cont'd October 4, 1999 Page 4 Councilmember Dickman asked Osbum if he had purchased any emission credits yet.Osbum said he hadn't,but he had had a discussion with the broker that they are going to work with so have a good understanding of how they will proceed with it.He said they are trying to decide what price they want to buy those credits at,adding that the price has gone back up since the last time they had talked.They are selling now for about$188,so they are considering making an offer of$178 or$180 and see where that goes.He said they had anticipated purchasing around 2,000 credits and what he will try to do is try to buy them in smaller blocks and that way they will get so many at this price and if the price goes down they'll get more at a lower price,instead of going out and buying them all at one time. NEW BUSINESS There was none. ADJOURNMENT There being no further business,on a motion duly made,seconded and passed,the meeting was adjourned. Bruce Wissel,Chairperson ATTEST: Norma Schroeder,Clerk