HomeMy Public PortalAbout07-21-1997 37
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, JULY 21.1997
1 The Common Council of the City of Richmond, Indiana, serving as a Board in charge of the operations of the
2 Richmond Power& Light Plant met in regular session at 7 p.m. Monday,July 21, 1997, in the Council Chambers
3 in the Municipal Building in said City. Chairperson Bing Welch presided with the following Councilmembers in
4 attendance: Howard "Jack" Elstro, Bruce Wissel, Sarah "Sally" Hutton, Geneva "Gene"Allen, Alan Stamper, Bob
5 Dickman and Larry Parker. Etta Lundy was absent.The following business was had to-wit:
6
7 APPROVAL OF MINUTES
8
9 The minutes of the meeting of July 7, 1997 were approved on a motion by Councilmember Hutton, second by
10 Councilmember Wissel and the motion was carried on a unanimous voice vote.
11
12 APPROVAL OF BILLS. INVESTMENTS AND TRANSFERS
13
14 Upon recommendation of the Finance Committee, Councilmember Hutton moved to approve the following bills for
15 payment,seconded by Councilmember Allen and by unanimous voice vote the motion carried.
16
17 Bills Already Paid 230,891.13
18 Payroll and Deductions
19
20 Investments Purchased From:
21 Cash Operating Fund 500,000.00
22 Band Sinking Fund
23 Utility Bond Reserve Fund
24 Depreciation Reserve Fund 2,330,809.09
25 Insurance Reserve Fund
26 Consumer Deposit Fund
27 28
Cash Reserve Fund
Group Insurance Fund
29
30 Total Investments 2,830,809.09
31
32 Transfer from Cash Operating Fund to;
33 Cash Reserve Fund for payment
34 to City in lieu of taxes
35
36 Transfer from Cash Operating Fund to;
37 Depreciation Reserve Fund
38 for Property&Plant
39
40 Transfers from Depreciation Reserve to:
41 Cash Operating Fund
42
43 Transfers from Consumer Deposit to:
44 Cash Operating Fund
45
46 Transfers from Utility Bond Reserve Fund to:
47 Bond Sinking Fund
48
49 Transfers from Cash Operating to :
50 Interest and Bond Principal
51 Bond Sinking Fund
52 Cash Reserve Fund
53 Utility Bond Sinking Fund
54 Depreciation Reserve Fund
55 Insurance Reserve Fund
56 Consumer Deposit Fund
57 Interest and Bond Principal
58 End of Month Petty Cash
59 Revenue Bonds
60 Interest Coupons Redeemed
61 Bond Coupons
62 Miscellaneous Prepaid Invoices 102,264.00
63 Total Prepaid Invoices 3,163,964.22
64 Less EFT/Direct Deposit of Payroll (51,022.58)
65 Total Prepaid Invoices 3,112,941.64
Total EFT Transfers 1,313,186.10
Total Prepaids plus EFT Transfers 4,426,127.74
Total Bills Not Paid 1,112,983.71
Grand Total 5,539,111.45
3g
RP&L Minutes Cont'd -
July 7, 1997
Page 2
1 REMARKS BY CHAIRPERSON
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3 Chairperson Welch explained that the balloons were from his wife, Patricia, for his birthday, which was Sunday.
4 He also noted that Councilmember Parker has a birthday coming up and thanked the Clerk's office for his card.
5 He commented about the retirement party for Irving Huffman Friday evening which he attended and the fact that
6 Mayor Dennis Andrews read a proclamation declaring today as Irving Huffman day in Richmond.
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8 Chairperson Welch also commented on the residential ranking of electrical utility charges by I.U.R.C., noting that
9 he found them interesting in the fact that it included 69 utilities in the state and Richmond ranked 54th. He said
10 that means coming from the highest, RP & L was 54 down on the list toward the lowest rates for residential
11 customers in the thousand kilowatt hours per month billing. He said all but one of those 15 which placed lower are
12 municipal utilities and most are I.M.P.A. members and only one is a generating utility. He said he felt I.M.P.A.
13 ranked rather well and he found that quite impressive that the RP & L rates are that competitive against other
14 Indiana owned, R.E.M.C.and cooperatives.
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16 UNFINISHED BUSINESS
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18 There was none.
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20 STREET LIGHT COMMITTEE REPORT
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22 Councilmember Elstro handed Clerk Schroeder a request for street lights which goes to the Board of Works and
23 commented that the two lights at the intersection of Backmeyer Road and South 37th Street had been okayed and
24 will go to the Board of Works next.
25
26 MISCELLANEOUS BUSINESS
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28 Chairperson Welch stated that with the departure in May of John Ulrich who had been hired to replace Huffman at
29 the end of July, it placed a void in RP&L's management succession chain and through discussions by the
30 personnel committee and the full Board of Directors with Huffman, an agreement had been reached that there is a
31 definite need to maintain continuity of the operation at RP&L.
32
33 Explaining that, Chairperson Welch continued to related the conditions of the agreement in which he said Huffman
34 will stay as general manager until a new one is hired and commences work.At that time, he will step aside,
35 turning the duties over to the new general manager. He will continue at his current salary and compensation with
36 no increases of pay or rate,with his benefits remaining the same, and continue until January 3, 1998. He said the
37 Board had asked Huffman to do without vacation time until the general manager candidate is on board.Then, he
38 said,the Board asked Huffman to assume an individual consulting role representing RP &L as the I.M.P.A.
39 representative serving as general chairman of the board and on the executive committee as well as doing other
40 consulting on various projects that may come forth at the request of the new general manager or this Board.
41 Compensation,Chairperson Welch said,will be$1,250 per month based on a maximum of 25 hours for the first
42 four months in 1998. He added that any hours beyond the 25, Huffman will act as a private consultant and will be
43 paid at the rate of$75 per hour but would have no benefits, no vacations and no insurance medical benefits.This
44 agreement expires, he said,April 30, 1998 or upon 30 days written notice to the RP &L Board of Directors.
45
46 Councilmember Wissel explained why he would be voting No on this agreement,saying that he did not want his
47 vote taken as any kind of judgment of Huffman's skills, abilities or dedication. However, he said, he feels that this
48 Board has reached a point where it is ready to develop talent within RP &L and have a more structured approach
49 to position. He said he feels it is necessary to develop the talent within the organization, stating that when Ulrich
50 left, he indicated that he felt RP& L's human resources were being under utilized. Councilmember Wissel said he
51 would like to see the appointment of an interim director because everyone is very capable in their management
52 positions now and maybe one of the managers could act as a spokesman until a general manager is hired. He
53 added that he felt it was a shame that the negotiations were done behind closed doors because he really thought
54 his colleagues did an exemplary job in negotiating this and it was an impressive process that this Board went
55 through to come to this conclusion.
56
57 Councilmember Allen agreed with what Councilmember Wissel said, however, she said she would vote for this
58 agreement because of one aspect that he failed to mention.That is the fact, she said,that Huffman is currently
59 serving as chairman of the I.M.P.A. Board and that tenure will be up in April 1998. Because of that, she said,she
60 feels it is important that RP& L be represented in I.M.P.A., especially through the crucial times of deregulation
61 and rate restructuring coming up.She said she feels that is reason enough to keep him on.
62
63 Councilmember Hutton moved to adopt the agreement,second by Councilmember Elstro and the motion was
64 carried on a 6 to 2 roll call vote with Councilmembers Wissel and Stamper voting against.
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RP&L Minutes Cont'd
July 21, 1997
Page 3
1 REPORT BY GENERAL MANAGER
2
3 General Manager Irving Huffman explained that the last outage was due to one of the bushings having a crack in
4 it and failing under the 69,000 volts energizing it. He said there was sufficient force to blow the lightening arrestors
5 nearby and the three bushings. He said there was no failure in the transformer as some believed, but added that
6 he did not know why the bushing failed but said it could have happened during construction.
7
8 He expressed his appreciation for the retirement party,stating that it was funded by friends who wanted to show
9 their gratitude.
10
11 Councilmember Stamper asked for discussion about the proposed retubing of the No. 1 generator. He said he
12 feels it is knportant that people understand what the alternatives are, noting that it is not a question as to whether
13 or not this particular project or retubing the boiler makes sense or not, but is a question of whether that,coupled
14 with all of the other refrubishings,has to be done to a 47-year-old plant makes sense or not. He said he feels this
15 Board is not just making a$1.3 million retubing decision but is deciding whether it is going to refurbish which is an
16 $8 to$10 million decision it will have to make.
17
18 Councilmember Stamper said the Board's strategic focus is hiring a new general manager and use Huffman's
19 30-year expertise to determine where this utility is going over the next 10 to 20 years. He said he felt this takes
20 more priority than making sure RP&L generates out of Unit No. 1.
21
22 Huffman replied that retubing the boiler will be about a$1 million project.He reminded the Board that RP & L
23 spent$3 million on the generator and is going to spend money on the pulverizer and the boiler should be in
24 excellent condition. He said with any plant of any age,you have to put money back into it, and if the Board would
25 review how much money the plant has made for the citizens of Richmond they would find it varies from$1.6
26 million to$4 million. He said that variation reflects money that has been put back into the plant, adding that if you
27 don't keep the equipment up it will fall apart,then it is shut down, putting a greater burden on the remaining unit.
28 He also added that this is not going to be a$10 million project,but will be around$1 million. He said the
29 pulverizers will make the burn more efficient and increase the efficiency,thus it will pay for itself.
30
31 Councilmember Welch said he recognized Councilmember Stamper's point and suggested that information be put
32 together about the projected cost of doing the job so it can be discussed by the Board in depth. Councilmember
33 Stamper said Huffman can also tell the Board in the next 10 years what major (half million dollars or more) items
34 are also going to have to be replaced on Unit No. 1. Responding to Councilmember Stamper's comment about
35 refurbishing the old plant or building a new one, Huffman said it would cost around $30 million to replace the
36 plant.
37
38 ADJOURNMENT
39
40 There being no further business,on a motion duly made,seconded and passed the meeting was
41 adjourned.
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48 Bing Welch, Chairperson
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53 ATTEST:
54 Norma Schroeder, Clerk
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