HomeMy Public PortalAbout08-16-1999 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,AUGUST 16,1999
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,August 16, 1999,in the Council Chambers in
the Municipal Building in said City.Chairperson Bruce Wissel presided with the following Councilmembers in
attendance:,Etta Lundy,Sarah"Sally"Hutton,Dennis R.Rice Sr.,Bing Welch and Larry Parker.Absent were Howard
"Jack"Elstro and Boil Dickman The following business was conducted:
ROLL CALL
Seven present.Chairperson Wissel announced that Councilmember Elstro had called to say he would be late,but he
would try to make the meeting.
APPROVAL OF MINUTES
Councilmember Hutton moved to approve the minutes of August 2, 1999,second by Councilmember Lundy 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 Rice and by unanimous voice vote the motion was carried.
Bills Already Paid:
Payroll and Deductions $237,908.54
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
For Property&Plant
Transfers from Depreciation Reserve to:
Cash Operating Fund
Transfers from Consumer Deposit to:
Cash Operating Fund
Transfers front 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 81,114.93
Total Prepaid Invoices 319,023.47
Less EFT/Direct Deposit of Payroll (66.980.84)
Total Prepaid Invoices 252,042.63
Total EFT Traisfers: 71,570.91
Total Prepaids plus EFT Transfers: 323.613.54
Total Bills Not Paid: 382,590.84
Grand Total of Bills to be approved: $706,204.38
RP&L Minutes Cont'd
August 16,1999
Page 2
REMARKS BY CHAIRPERSON
Chairperson Wissel had no comments.
UNFINISHED BUSINESS
There was none.
STREET LIGHT COMMITTEE REPORT
_There was no report.
REPORT BY GENERAL MANAGER
General Manager David Osbum requested authorization from the Board to accept a proposed buy out settlement for a
PCB clean up.He said this is a processing center in Kansas City,Mo.,adding that he had sent all of the Board members
a letter on this containing background information.
He said RP&L received its notification from the Environmental Protection Agency that the local utility was a potential
responsible party in this matter in October 1997. This takes awhile to process these,he said.Explaining,Osburn said,
when these sites exist there are a lot of parties which do business with these companies and in this case there are maybe
around 1,500 different companies involved.He said what usually happens is that a dozen of the very large contributors
that are involved and they create what they call a steering committee,which tries to arrange for the cleanup of these
sites.And,as part of that,they will offer the smaller contributors,of which RP&L is a member,what they call a buy
out agreement and will offer an agreement and we will pay for it and be done with it.He said this narrows down the
number of parties they have to deal with and gives them some funds with which to operate to deal with administrative
costs and part of the funds will go toward the clean up also.
Osburn said RP&L received a buy out agreement for this,noting that the company is PCB Treatment Inc.He said his
knowledge of this is that they did dispose of RP&L's material but when they went out of business they left a
contaminated facility that needs to be cleaned up.He added that in the environmental arena you pay for this whenever
you do business with anybody.He said they are offering this buy out agreement to anybody who has contributed less
than 75,000 pounds and the local utility has verified the records they showed them and concur with every item they
showed that RP&L had sent to the facility.The agreement,he said,would be in the amount of$68,595.He said he is
asking for the authorization to proceed with this,but before he takes any final action and sign it off he would see if he
can talk them down to a lesser amount.
Councilmember Parker asked if the money goes to EPA?City Attorney Bob Bever answered that this money would go
into a fund among all the parties who are pooling their resources.He said it does not go to EPA and this agreement is
not a release by EPA,which,he said is one of his concerns.He said it initially goes into this one fund for purposes for
(a)defending the EPA suit that is going against them,but(b)also to be used by what would hopefully be a consent
decree with EPA on behalf of all these parties that make up the steering committee.He said that would be RP&L's
contribution to that decree so that ultimately it would go to EPA for the cost of the cleanup.He said this is not being
signed off on by EPA so there is that risk out there,but all these parties,many of which are bigger than RP&L,have
agreed to defend the local utility and indemnify us for any future actions by the United States so to the extent that they
have a bigger purse than RP&L,they would have to pay if RP&L ended up having to pay more than the amount of
$68,595.He added that this is pretty safe but it is not a guarantee.
Councilmember Parker asked if EPA doesn't authorize these waste sites in the beginning then police them?He said it
looks like to him that it should be EPA's responsibility.Bever said they're doing things differently than they did 20
years ago so a lot of the sites now are being found to be hazardous and any party that has contributed to it can be held
as a responsible party under the federal legislation.Councilmember Parker then stated that evidently RP&L has no
choice but to buy its way out.Bever said if the utility did not do this,then when the suit comes and the local utility is
being held as the responsible party it would be incurring its own defense costs and since it is not a field of his expertise
they would have to get counsel who is an environmental lawyer to do it.He said RP&L would be running its own risk
of what fine they would attribute to the utility without the protection of this whole group.
As a business decision,Councilmember Parker said,obviously this is the way to go,but it irritates him that you pay for
the waste disposal properly,authorized and licensed by the EPA,then later,the EPA says you have to pay this buy out
He added that he didn't know how a smaller business could exist under these types of rules.He said he thinks it is
wrong.One thing thathas changed,Osbum said,this was fairly early on in the PCB regulation life because the PCB
law came out in 1980 and RP&L was sending things out there in 1985.At that time,he said,if you called up and
asked about the standing of the company,the EPA wouldn't tell you.Today,he said,they will,so if you do business
with somebody today you can at least find out a little bit more information about that company before you do business
with them.
Councilmember Allen asked if there was any kind of commitment from EPA that they would not hold the people
liable?Osbum said he could not answer that.He said federal law has taken over and anybody that contributes to it is
held responsible.Councilmember Lundy asked what the chances are that EPA would come back and ask for more.
Osbum answered that he feels it is a fairly safe bet that EPA would honor this agreement.Osburn said to his
knowledge,EPA has always honored these agreements in the past.Councilmember Welch commented that in looking
at Osbum's letter,it states in the last paragraph that clean up costs will go$40 to$50 million and RP&L only
disposed 22,365 pounds of waste.He said out of 1,400 companies,it sounded to him like RP&L is a very small entity
in its total disposal quantity and if you take the buy out figure of$68,000 times 1,400 companies that totals out to over
$95 million_He said he would think that is a negotiating tool.Osbum said he did that math,too,but he just looked at
Indiana companies.He said he wouldn't mention any names,but the ones he knows,RP&L is by far the largest
company of any of the Indiana companies that contributed to that site,so he thinks many of those companies are
smaller than RP&L.That's why he thinks that math probably wouldn't work out that way.
RP&L Minutes Cont'd
August 16, 1999
Page 3
Councilmember Hutton moved to authorize Osbum to accept the proposed buy out settlement for the proposed PBC
clean up for a maximum of$68,595,second by Councilmember Rice and the motion was carried on a unanimous voice
vote.
Osbum reported on the annual electric bill survey done by the Indiana Utility Regulatory Commission and noted that
RP&L is down near the bottom which means the rates of the local utility show very low compared to the rest of the
state.He also pointed out that there are only 42 utilities listed and RP&L ranked 35.He pointed out that ranking 40
was Indiana-Michigan,which was rare to see them that low.However,he said,if they look at the cover page they see
that in these three months they are refunding$55 million to their customers because of a settlement in a nuclear plant
case.He said the IURC estimated that because of that their bill was reduced by$14 this month so when the three
months are over it will go back up around$14 and that will put them up in the high area where they belong.
Councilmember Welch said,for the benefit of the media,when Osburn said RP&L stands 35th out of 42,that the 42 is
the lowest rate and No. 1 is the highest rate which means Richmond rates in the low end of the lowest rates.Osburn
said that in comparison with those rating lower than RP&L,very few of them offer the breadth of services as RP&L
and are involved in as many things.He added that he feels this shows that RP&L does an awful lot for this community
and keep the rates low at the same time.Councilmember Welch also added that most of those cities on the low-end
rates are also members of IMPA which shows that municipal systems are doing their jobs in keeping the rates down.
Councilmember Rice said he found it to be interesting that for the 1,000-kilowatt hours usage,the highest rate is$95.22
and the lowest is$48.72 and Richmond falls in the$57 range.He said it is hard for him to believe that somebody is
charging$95 and RP&L is charging$57.He added that he feels the local utility's customers receive very good rates
and services out of RP&L.
Alluding to the results of the customer satisfaction survey,Osburn said,RP&L learned that they have a job to do in
educating its customers on items such as the rates because very few seemed to realize how the rates compare to others
in the state and in the country.He said the two comments they received the most were about the rates and outages,
especially after a storm.Councilmember Welch said he thought it would be interesting if Osburn could get IMPA to get
a comparison of the same 42 communities versus any Illinois,Ohio or Kentucky utility might bear out the very point
they're making and would give the customers something to look at,too.Osbum said he would look into that.
Osburn reported on the response of the customer satisfaction survey,saying they had got back the first-quarter
response,noting that overall units got very good news.He said the utility maintained its overall customer satisfaction
97 percent rating,stating that the good news is that that is a combination of the excellent and good ratings.He said they
did move 5 percentage points more into the excellent category.In the reliability index,he said,they had an increase
from 80 to 86 percent who felt the utility provided very reliable service.He said in their ratings of their employees,
both office and field,the utility had higher percentages in the excellent category.
Osburn said they asked some questions in the survey about future services or options the customers would like to see
and found two things they felt were a little bit odd and somewhat confusing.One,he said,was credit card billing,and
this particular group really likes their credit cards,because 77 percent felt it would be very valuable for RP&L to
accept credit cards as compared to only 14 percent in the past.He said they really didn't have any answer for that,
noting that the age breakdown is still pretty even across the board so this isn't a case where they happened to pick
either a lot of young or old individuals.In other services,he said,59 percent responded that they felt RP&L should
offer telecommunications services as compared to 33 percent in the previous survey.
He said this survey would be done quarterly and when four are done they will.summarize them and see how they
compare to the overall survey.
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