HomeMy Public PortalAbout11-04-1996 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. NOVEMBER 4.1996
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, November 4, 1996, in the Council
3 Chambers in the Municipal Building in said City. Chairperson Larry Parker presided with the following
4 Councilmembers in attendance: Howard "Jack" Elstro, Etta Lundy, Bruce Wissel, Sarah "Sally" Hutton, Alan
5 Stamper, Bing Welch and Geneva "Gene"Allen. Absent was Robert Dickman. The following business was had
6 to-wit:
7
8 APPROVAL OF MINUTES
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10 The minutes of the October 21, 1996 meeting were approved on a motion by Councilmember Allen,second by
11 Councilmember Welch and the motion was carried on a unanimous voice vote.
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13 APPROVAL OF BILLS. INVESTMENTS AND TRANSFERS
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15 Upon recommendation of the Finance Committee, Councilmember Stamper moved to approve the following bills
16 for payment,seconded by Councilmember Hutton and by unanimous voice vote the motion carried.
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18 Bills Already Paid
19 Payroll and Deductions 232,633.16
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21 Investments Purchased From:
22 Cash Operating Fund 1,500,000.00
23 Bond Sinking Fund
24 Utility Bond Reserve Fund
25 Depreciation Reserve Fund 91,000.00
26 Insurance Reserve Fund
27 Consumer Deposit Fund
28 Cash Reserve Fund 168,025.00
29 Group Insurance Fund
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31 Total Investments 1,759,025.00
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33 Transfer from Cash Operating Fund to:
34 Cash Reserve Fund for Payment 168,025.00
35 to City in lieu of taxes
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37 Transfer from Cash Operating Fund to:
38 Depreciation Reserve Fund 91,000.00
39 for Property&Plant
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41 Transfers from Depreciation Reserve to:
42 Cash Operating Fund
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44 Transfers from Consumer Deposit to:
45 Cash Operating Fund
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47 Transfers from Utility Bond Reserve Fund to:
48 Bond Sinking Fund
49
50 Transfers from Cash Operating to :
51 Interest and Bond Principal
52 Bond Sinking Fund
53 Cash Reserve Fund
54 Utility Bond Sinking Fund
55 Depreciation Reserve Fund
56 Insurance Reserve Fund
57 Consumer Deposit Fund
58 Interest and Bond Principal
59 End of Month Petty Cash
60 Revenue Bonds
61 Interest Coupons Redeemed
62 Bond Coupons
63 Miscellaneous Prepaid Invoices 274,253.44
64 Total Prepaid Invoices 2,524,936.60
65 Less EFT/Direct Deposit of Payroll (47,181.11)
Total Prepaid Invoices 2,477,755.49
Total Bills Not Paid 496,916.32
Grand Total 2,974,671.81
RP&L Minutes Cont'd
November 4, 1996
Page 2
1 REMARKS BY CHAIRPERSON
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3 Chairperson Parker announced that a special meeting regarding the budget will be held Tuesday, November 19,
4 and on November 25,at the regular meeting at RP&L,the budget will also be discussed and Board members will
5 hear a presentation on G.I.S.given by City Engineer Bob Wiwi.
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7 UNFINISHED BUSINESS
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9 There was none.
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11 STREET LIGHT COMMITTEE REPORT
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13 There was none.
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15 MISCELLANEOUS BUSINESS
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17 Chairperson Parker announced that Item No.3 on the agenda would be postponed until a later meeting to enable
18 Board members the opportunity to discuss it with the City Attorney to see if the resolution, as stated,would be
19 needed.
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21 REPORT BY GENERAL MANAGER
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23 General Manager Irving Huffman requested the Board's authorization to receive bids at the November 18 meeting
24 for a one ton 1997 Cargo Van to replace a 1984 van.Councilmember Elstro so moved,second by
25 Councilmember Hutton and the motion was carried on a unanimous voice vote.
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27 Huffman introduced Steve Esary,the new Chief Electrical Engineer,to make the presentation of the Osmose Pole
28 Line Treatment Agreement. Esary said this is budgeted for 1996 and appears in the expense budget because it is
29 basically a maintenance function. He explained that the utility has a substantial amount of money invested in its
30 13,000 wooden poles, noting that this wood testing process is not a very high tech system but involves a lot of
31 manual testing and excavating around the poles. Esary said the poles are treated before they are installed to
32 battle wood decay,adding that the average useful life of a wooden pole is about 30 years.
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34 Esary explained that Osmose will conduct a ground line inspection on every wood pole in the system,treating
35 them with a preservative at the ground line which stops decay and extends the life. He said it is recommended
36 that this procedure take place once every 8 to 10 years.He added that Osmose will also perform an inventory
37 because TCI and GTE rent space on the utility's wooden poles and a periodic inventory has to take place on
38 those contacts then the utility sends an invoice yearly to them for the use of the poles.
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40 Esary said Osmose Wood Preserving Company was selected because it performs this work for most every major
41 utility in the United States as well as Canada which includes about 600 utilities. He said the last pole inspection for
42 RP& L was done by Osmose and that was in 1986. He said the company develops many of the preserving
43 products they use and it is one of the few companies which do this as a specialty and not a sideline business.
44 Saying that, Esary recommended the Board approve the signing of the agreement.
45
46 Councilmember Stamper asked what the cost of the contract is and Esary answered that$240,000 was estimated
47 for 1996 with$80,000 carried over into 1997. However, he said,due to the time of the year this work is going to
48 be started that will probably be less,perhaps down to$90,000 estimated in 1996 with the remaining $230,000
49 carried over into 1997 with the estimated completion time in May or June of 1997. In answer to Councilmember
50 Stamper's question as to why RP&L is not bidding this,Esary said in speaking with his predecessor,Andy
51 Boatright, he learned that he was unable to get anyone else to provide a similar service. He said he,personally,
52 had made an attempt by contacting three firms but was unsuccessful in finding anyone as qualified as Osmose.
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54 Councilmember Welch asked for a breakdown of the cost per individual pole for Osmose to do this and Esary
55 said the cost per pole depends on what has to be done to preserve it, noting that the estimated cost per pole is
56 between$20 and$23.The installed cost,for a 40-foot pole,which is just for the pole and not the hardware will
57 range from $500 to$1,100,depending on the complexity. Esary said the work could start the last of this week and
58 Osmose will bring in seven crews with two to three men per crew..He said they could do 250 to 300 poles per
59 crew per week. In response to a question posed by Councilmember Elstro, Esary explained exactly what Osmose
60 will do in treating the poles. He said they would excavate about 18 inches deep around the circumference of the
61 pole,scrape away the decay,check it,put a pole wrap(a tar-like paper with a wood preservative)around the pole,
62 put the soil around it and tamp it. He said they will also perform a foreign contact inventory while at each pole,
63 adding that what they do is very labor intensive. Councilmember:Lundy asked how many poles they usually find
64 that have to be replaced. Esary said in 1986 the rejected rate was almost 8 percent of the 13,000.This time
65 around,he said,it is estimated they would see 3 to 5 percent rejected.
RP&L Minutes Cont'd
November 4, 1996
Page 3
1 Esary said that maybe they would look at 390 to 650 poles that need to be replaced.Councilmember Allen asked
2 him if there is a record of how many poles are 30 years old and Esary said he is sure that is tracked in the data
3 base and assured her that the list of those could be generated.Councilmember Allen commented that it would
4 seem to her that this treatment could be done more often. In answer to that, Esary said some poles don't take
5 preservative consistently. For example,he said,one pole may get to be 50 years old,while another will get to be
6 only 18. He said the treatment extends the life of marginal poles.
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8 Huffman also reminded the Board members of the inventory Osmose also does which establishes the rental
9 context which means money for RP&L,adding that this agreement will update that record.Councilmember Elstro
10 moved to approve the agreement,second by Councilmember Hutton and the motion was carried on a unanimous
11 voice vote.
12
13 Councilmember Welch commented that previous Boards have increased the salary of the general manager,
14 effective October 1 of each calendar year. He said included in the packets received by the Board members is a
15 recommendation by the personnel committee that the general manager's salary be increased by 3 percent
16 retroactive to October 1, 1996. He so moved,second by Councilmember Allen and the motion was carried on a
17 unanimous voice vote.
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19 Huffman reported that he and John Ulrich had attended an APPA seminar dealing with retail wheeling and the
20 implications of it. He said primarily the larger utilities were present and knowledgeable people from the
21 commission itself as well as the key places for investment banking, attorneys who handle security exchange
22 commission matters and anything that really is of severe importance to any of the major utilities.
23
24 President Parker said also included in the packets is a rate restructuring case for the IURC rate ordinance. He
25 asked Attorney Michael Craycraft if he would like to speak to that.
26
27 Craycraft stepped forward,stating that in July of this year Board members had a presentation at RP&L on the
28 rate restructuring case and at that time those present included himself, Huffman, Herschel Philpot and the other
29 CPA representing the case. He added that on July 15 the RP&L Board adopted 9-0 the resolution authorizing the
30 filing with the commission of testimony and exhibits by which the existing subsidy excess revenues or the
31 differences in rates of return by customer classes would be reduced by 20 percent and the overall operating
32 revenues of the utility would be reduced by$577,728. He added that the case was filed and what he needs for the
33 hearing next week from the Council,and he apologized for the timing on this,is a rate ordinance by which the
34 municipal legislative body adopts the actual rates and charges by customer class to implement what was
35 authorized in July.He said it wasn't until August 30 that those rates and charges were filed with the commission.
36
37 Craycraft said it is simply a matter of the statute that rates and charges of a municipal owned utility must be
38 approved by the commission and the municipal legislative body. He said some of his clients, because they don't
39 expect to get exactly what they ask for,will adopt the rate ordinance on first reading only and then come back
40 after the commission has acted by order and make any necessary changes and pass it on to second or third
41 reading.Others, he said, pass the ordinance at once and submit it into evidence then come back and make any
42 necessary changes in the future after the commission has acted. He noted that he had prepared a rate ordinance
43 patterned after what was adopted by the Council in the last rate case three years ago and has attached to it the
44 rates and charges which were filed with the commission.
45
46 Councilmember Allen said the Board authorized the general manager to keep them informed of all the things that
47 transpired up to this rate case.She said she would have supposed that the Board would have been informed of
48 the testimony that had been filed to this date.Craycraft said he had received copies of the testimony and had sent
49 them on to RP&L. He said he also has a two-page outline which summarizes the position of the three parties in
50 the case which might also help the discussion. Councilmember Allen stated that without sufficient information it
51 would be difficult to vote on this ordinance because it could be that the testimony might change the minds of some
52 Board members about those rates.Craycraft responded that as a lawyer in this case, he had received the
53 testimony and sent it to his client which is RP& L.
54
55 Councilmember Stamper asked when the Gimbel testimony was filed and Craycraft responded that was August
56 30.Then, he asked about the testimony of Huffman, Philpot and Brenner,and Craycraft said that was filed August
57 16.And, in answer to another question by Councilmember Stamper, Craycraft said the testimony of Bill Clark was
58 filed last week.Those answers prompted Councilmember Stamper to address Huffman,asking why,when on
59 three separate occasions he had been asked to keep this Board informed, had they not been receiving the data
60 the Board told him they wanted.Huffman responded that he had no reply but said he will make copies of the
61 testimony and make it available to all the Board members.
62
63 Councilmember Stamper asked Craycraft how long he had known about the November 14 date for the hearing
64 and Craycraft answered that it was since the pre-hearing conference order was issued,which was quite some
65 time ago,maybe months.
•
RP&L Minutes Cont't •
November 4, 1996
Page 4
• •
1 Councilmember Stamper said he felt it would be irresponsible of him to say yes to this 24-page ordinance without
2 the City Attorney giving any legal representation and without having any of this information prior to this meeting.
3 Craycraft responded that he would not say it is irresponsible when they voted for the exact proposal on July 15,
4 adding that he took exception to Councilmember Stamper's statement.The difference is a resolution of the Board
5 and an ordinance of the City, Councilmember Stamper said, asking Craycraft that if Council stops this on first
6 reading it is not going to affect his ability to be able to act on our behalf in the rate case adversely.
7
8 Bever said he had received this ordinance just minutes before this meeting and in looking at the statute,it is a
9 surprise to him that the Board has final approval on setting rates to the customers. He added that the Board only
10 recommends to the legislative body what those rates and charges are and it is up to the municipal legislative body
11 by ordinance to pass that. He said he understood that Craycraft indicated that you had done the resolution part in
12 July but that resolution did not include the specific schedule of rates that is now attached. He asked Craycraft if he
13 was correct about that and Craycraft responded in the affirmative and apoligized again for the lack of timeliness. He
14 said he sent this out in July and failed to follow up on it to make sure it was carried through the proper procedures.
15
16 Chairperson Parker said this ordinance will go on to Council.
17
18 NEW BUSINESS
19
20 There was none.
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22 PUBLIC COMMENTS
23
24 There were none.
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26 ADJOURNMENT
27
28 There being no further business,on a motion duly made,seconded and passed the meeting was
29 adjourned.
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40 Larry Parker,Chairperson
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46 ATTEST:
47 Norma Schroeder, Clerk
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