HomeMy Public PortalAbout08-19-1996 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. AUGUST 19.1996
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, August 19, 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, Robert
5 Dickman,Alan Stamper,Bing Welch and Geneva"Gene"Allen. The following business was had to-wit:
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7 APPROVAL OF MINUTES OF AUGUST 5.1996
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9 Councilmember Hutton moved the minutes be approved, second by Councilmember Allen and the motion was
10 carried on a unanimous voice vote.
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12 APPROVAL OF BILLS. INVESTMENTS AND TRANSFERS
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14 Upon recommendation of the Finance Committee, Councilmember Stamper moved to approve the following bills
15 for payment,seconded by Councilmember Wissel and by unanimous voice vote the motion carried.
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17 Bills Already Paid
18 Payroll and Deductions 223,240.18
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20 Investments Purchased From:
21 Cash Operating Fund
22 Bond Sinking Fund
23 Utility Bond Reserve Fund
24 Depreciation Reserve Fund
25 Insurance Reserve Fund
26 Consumer Deposit Fund
27 Cash Reserve Fund
28 Group Insurance Fund
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30 Total Investments
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32 Transfer from Cash Operating Fund to;
33 Cash Reserve Fund for Payment
34 to City in lieu of taxes
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36 Transfer from Cash Operating Fund to;
37 Depreciation Reserve Fund
38 for Property&Plant
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40 Transfers from Depreciation Reserve to:
41 Cash Operating Fund
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43 Transfers from Consumer Deposit to:
44 Cash Operating Fund
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46 Transfers from Utility Bond Reserve Fund to:
47 Bond Sinking Fund
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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 116,807.55
63 Total Prepaid Invoices 340,047.73
64 Less EFT/Direct Deposit of Payroll (40,465.90)
65 Total Prepaid Invoices 299,581.83
Total Bills Not Paid 680.749/32
Grand Total 980,331.15
RP&L Minutes Cont'd •
August 19, 1996
Page 2
1 REMARKS BY CHAIRPERSON
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3 There were none.
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5 UNFINISHED BUSINESS
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7 There was none.
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9 STREET LIGHT COMMITTEE REPORT
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11 There was none.
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13 MISCELLANEOUS BUSINESS
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15 There was none.
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17 REPORT BY GENERAL MANAGER
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19 General Manager Irving Huffman asked Board members for authorization to take bids for two small dump trucks
20 to replace Unit No.29 which is a 1984 with 82,000 miles and Unit No.39 which is a 1985 with 75,154 miles at the
21 September 3 meeting. Councilmember Stamper so moved,second by Councilmember Hutton and the motion was
22 carried on a unanimous voice vote.
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24 Huffman also requested authorization to take bids for a 1997 four-door sedan to replace the general manager's
25 automobile,stating that the plan is to trade in an older 1987 auto with 128,991 miles. Councilmember Welch
26 moved to approve the request with a second by Councilmember Hutton. Councilmember Stamper said he will
27 vote No on the request because he would like to wait before acting on it,explaining his reasons were the pending
28 rate case and the pending possible commitment of$25 million of RP& L money for the LEBBS project. In the roll
29 call vote, seven Councilmembers cast Aye votes and two, Councilmembers Stamper and Allen,cast Nay votes.
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31 City Attorney Bob Bever explained that Huffman had presented a rough draft of Resolution No. 6-1995 to
32 Councilmembers a few weeks ago and it was his understanding from Huffman that the State Board of Accounts
33 had questioned the Board and Management for what is known as the salary ordinance for this year.The reason
34 being,that it did not allow for any of the increases that had always and customarily been given by management to
35 probatiuonary employees after six-month intervals.That, along with the fact that in the salary resolution this year
36 there is no reference to fringe benefits which are made a part of employee compensation.
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38 Bever said to avoid the possibility that some employee got paid something or received a fringe benefit and would
39 have to return that,the State Board of Accounts had indicated a resolution was needed to amend the resolution of
40 last year which was Resolution No. 6-1995. He said he took Huffman's comments and put together this
41 resolution which is Resolution No.4- 1996, allowing the general manager to make those merit increases in six
42 month steps consistent with the State Board of Accounts and also to make reference to the fringe benefits that are
43 a part of the employee compensation as set out in the employee policy manual. He added that any increase in
44 excess of three percent per year for any employee must also first be approved by this Board, which has always
45 been the case. Bever said this merely puts the Board in compliance with what it has been doing but satisfies the
46 State Board of Accounts to show it on the salary resolution.Councilmember Elstro moved for adopting Resolution
47 No.4- 1996,second by Councilmember Welch and the motion was carried on an eight to one vote with
48 Councilmember Allen casting a vote against.
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50 Huffman updated Board members on the August 14 meeting concerning the LEBBS project, noting that
51 discussion centered around finances and the group arrived at several types of solutions that all were going to
52 review. He noted that the$25 million figure is not cast in stone, adding that this has to be a win-win project for
53 everyone. He said municipal electric utilities are not based upon the rate base but based upon revenue needs,
54 adding that the rate base is only used as a checkpoint and the rate base is not to determine what the rates will be.
55 He said the Public Service Commission will have to be satisfied and will review the case to determine the need.
56 He said RP &L is limited at the present time as to what information it can give out, adding that the public meeting
57 is set for September 30.
58
59 In answer to a question by Councilmember Wissel as to what the definition is for a rate base, Huffman said it is
60 what you have invested in your utility and depreciated that becomes your rate base.Councilmember Wissel
61 commented that if the money is taken out of the operation of the plant to build a new unit it is going to cause
62 revenue needs. Huffman said that is possibly so but now it is in the reserves, making some interest income, and if
63 you spend some of that money naturally you will lose some of the interest income. He added that the Commission
64 looks at it that RP&L possibly has more money in there than they possibly would like to see.
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RP&L Minutes Cont'd
August 19, 1996
Page 3
1 Councilmember Wissel asked if the rate base is used for private utilities to get a return on the capital they have
2 already invested in. Huffman said on this upcoming rate case RP& L will have a much lower rate of return, adding
3 that this Board has elected to hold the residential rate where it is and to grant the industrial rates a decrease.
4 However, he said,that will have to be based upon the cost of service study and all customers will not receive the
5 same change in rate.Councilmember Wissel stated that somewhere there is going to have to be made a return
6 on the capital investment anyway,whether it is called a revenue need or rate base need, adding that it is still
7 going to have to be figured into the rate somewhere.
8
9 Councilmember Welch noted that the next RP&L meeting will be Tuesday,September 3rd because of the Labor
10 Day holiday.
11
12 Councilmember Allen commended RP&L for the different policy it adopted on the direct deposit payments for
13 customers.She explained that previously RP&L had been saying the payments were due 10 days after the bill
14 was issued and now the new policy means they are taking out of the ratepayers'bank accounts at the due date.
15 She said she appreciated the change because she had had some calls from those concerned about it.Huffman
16 said it would save the customers about two or three cents and Councilmember Allen said many of those
17 customers live on a fixed income and need even the smallest of savings.
18
19 Councilmember Stamper stated that he feels it is a positive step and one in the right direction that
20 Councilmembers as the Board of Directors for RP& L and as management of the utility are bringing the general
21 manager's car up to a bid process now.
22
23 NEW BUSINESS
24
25 There was none.
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27 PUBLIC COMMENTS
28
29 There were none.
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31 ADJOURNMENT
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33 There being no further business,on a motion duly made,seconded and passed the meeting was
34 adjourned.
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41 Larry Parker, Chairperson
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45 ATTEST:
46 Norma Schroeder,City Clerk
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