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HomeMy Public PortalAbout06-19-1995 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,JUNE 19,1995 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,June 19, 1994, in the Council Chambers 3 in the Muncipal Building in said City. Chairperson Howard "Jack" Elstro presided with the following 4 Councilmembers in attendance:Gene Allen, Jane Brookbank, Bob Dickman, Mary Ellen Donat, Sally Hutton, Etta 5 Lundy, Don McBride and Larry Parker. The following business was had to-wit: 6 7 APPROVAL OF MINUTES OF JUNE 5,1995 8 9 Councilmember McBride moved to approve the minutes of the previous meeting as prepared, seconded by 10 Councilmember Dickman and on a unanimous voice vote the motion was carried. 11 12 APPROVAL OF BILLS, INVESTMENTS AND TRANSFERS 13 14 Upon recommendation of the Finance Committee, Councilmember Donat moved to approve the following bills for 15 payment,seconded by Councilmember Hutton and by unanimous voice vote the motion carried. 16 17 Bills Already Paid 18 Payroll and Deductions 222,916.37 19 20 Investments Purchased From: 21 Cash Operating Fund 1,150,000.00 22 Bond Sinking Fund 23 Utility Bond Reserve Fund 24 Depreciation Reserve Fund 1,031,882.82 25 Insurance Reserve Fund 26 Consumer Deposit Fund 27 28 Cash Reserve Fund Group Insurance Fund 29 30 Total Investments 2,181,882.82 31 32 33 Transfer from Cash Operating Fund to: 34 Cash Reserve Fund for payment 35 to City in lieu of taxes 36 37 Transfer from Cash Operating Fund to: 38 Depreciation Reserve Fund for 39 Property and Plant 40 41 Transfers from Depreciation Reserve to: 42 Cash Operating Fund 43 44 Transfers from Consumer Deposit to: 45 Cash Operating Fund 46 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 59 Interest and Bond Principal 60 61 End of Month Petty Cash 62 Revenue Bonds 63 Interest Coupons Redeemed 64 Bond Coupons 65 Miscellaneous Bills Already Paid 122,402.67 Total prepaid invoices 2,527,201.86 Total Bills Not Paid 670,478.91 Grand Total 3,197,680.77 RP&L Minutes Cont'd June 19, 1995 Page 2 1 2 REMARKS BY CHAIRPERSON 3 4 There were none. 5 6 UNFINISHED BUSINESS 7 8 Councilmember Allen read a resolution confirming the termination of the General Manager's contract of 9 employment and fixing compensation noting that the Board objected, in writing, to a third renewal term of the 10 agreement and stated that she would like to make a motion on it. She commented that the contract terminates 11 July 26, 1996. 12 13 Reading further in the resolution, she said it stipulated that the compensation retroactively increased three percent 14 of $85,057.44 from October 1, 1994 through September 1, 1995 for a total of $87,609.16 and increased three 15 percent of the $87,609.16 for compensation of an annualized rate of $90,237.43 for October 1, 1995 and ending 16 July 26, 1996. She also stated that the City Clerk is to mail a copy to Huffman on or before June 21, 1995 and a 17 second was made by Councilmember Brookbank. 18 19 Councilmember Donat moved to strike the motion, stating that Huffman needs to stay in the position of general 20 manager for at least one more year. She suggested that Council extend his contract for one more year with the 21 stipulation that the search begin immediately for someone to learn the management process who will be able to 22 step right in and manage RP & L. Councilmember Allen explained that her motion only terminates the existing 23 contract and doesn't keep anyone from writing a new contract. Councilmember Brookbank stated that two men 24 have already been in training for the general manager's position and somehow faults have been found giving 25 reasons for eventually firing them. Councilmember Dickman said one year may be required as Councilmember 26 Donat suggested, however,there is a whole year and a month left on the contract and a search is underway for a 27 number two person, but this contract calls for a five year extension and he feels that legally and technically it 28 would be wise since that clause is in there to do the one year notice and leave the options open to create a new 29 contract. Chairperson Elstro stated that he didn't see anything wrong with the contract now in existence and 30 extending it one year. Councilmember Dickman said that is possible, but if someone is hired within the next month 31 it gives Huffman a year to work with the replacement. 32 33 Councilmember Donat questioned who had written the resolution. Councilmember Lundy commented on a letter 34 received by all the Councilmembers in which Huffman stated that he would like a one year extension with six 35 months notice. Councilmember Parker said the way he interpreted the letter is that Huffman asked for a six month 36 extension and wanted six months notification and he suggested a compromise, suggesting Council take the letter 37 dated June 14 written by Huffman and amend the resolution, saying it does both. It terminates the five year 38 contract and gives a one year contract in addition to that with a six month notification. Councilmember Donat said 39 the resolution read by Councilmember Allen is a technical document, adding that there is some question about 40 whether or not it is six months or one year. Councilmember Allen said the resolution follows the language of the 41 contract and the Board needs to notify Huffman a year ahead of time if his contract is going to be renewed. 42 43 Councilmember Donat asked Councilmember Allen what her reasons were for not wanting to extend Huffman's 44 contract and Councilmember Allen responded that the Board is looking for another person to take Huffman's place 45 and she feels it is time for him to step down. She added that if the new Board, which will take over January 1, 46 1996, decides to write a new contract for Huffman they can do so. In a roll call vote, the resolution was voted 47 down with Donat, Elstro, Lundy, Parker and Hutton voting against and Allen, Dickman, McBride and Brookbank 48 voting for. Councilmember Parker, alluding to Huffman's letter, said it suffices because it terminates the five year 49 agreement and puts into effect a one year agreement with a six month notification. 50 51 Huffman commented that he wrote the letter with the idea that he or this Board may want to terminate the 52 contract, adding that some people would like to see him terminated at a certain point. He stated that the contract 53 is good through July 26, 1996, and if the Board wants to terminate him after that, he feels he should be given six 54 months notice. He added that there will be some new members of the Board and he feels the new Board should 55 have some input into this issue. In addition, he said, it has to be taken into account how much training the person 56 chosen will need. He cautioned the Council to keep in mind that he, Huffman, is not only the general manager of 57 RP & L but is also chairman of IMPA and when he leaves RP & L someone else will be appointed to the latter 58 position from another city. He noted there is some merit to that position. 59 60 Councilmember Lundy moved to give an extension to July 26, 1997, with either side extending it for one year if 61 they are not satisfied. Huffman commented that means Council is accepting his letter as an agreement. 62 Councilmember Dickman said Council needs to add the six month option prior to any extension that either party 63 could terminate, including the first extension. Huffman said he doesn't want to end up with someone coming along 64 before July 1 and saying they want to terminate his contract, adding that he would like to at least get past this 65 administration so the next one can evaluate his service. Councilmember Dickman said Huffman is assured of a contract through July 26, 1996. Voting on Councilmember Lundy's motion was the entire Council except for Councilmember Brookbank who voted against. RP&L Minutes Cont'd June 19, 1995 Page 3 1 Councilmember Donat said Council still needed to decide on Huffman's raise which was three percent for both 2 years with the first being retroactive to October 1994. Councilmember Dickman so moved, second by Parker and 3 the motion was carried on a unanimous voice vote. 4 5 In answer to a question posed by Councilmember Brookbank about a meeting with Pete Wickman of Belden, 6 Huffman said he will meet with Belden concerning the subjects Council has raised, adding that meeting with 7 anybody prior to the cost of service study is not going to be meaningful. He said nobody knows what that study 8 will show until the calendar year is finished. He added that as soon as that study and RP & L's financial report is 9 available in January then that meeting will have meaning. Chairperson Elstro said the first meeting to evaluate 10 what the "headhunter" found from the internal surveys will be scheduled when he gets back from the APPA 11 conference in Seattle. 12 13 STREET LIGHT COMMITTEE REPORT 14 15 MISCELLANEOUS BUSINESS 16 17 REPORT BY GENERAL MANAGER 18 19 Huffman said the bids for the generator step up transformer for Unit No.2 had been evaluated by Black&Veach 20 and they had recommended the transformer be purchased from ABB Westinghouse Corp for$528,395. 21 Councilmember Hutton moved to award the bid to ABB,second by Councilmember McBride and the motion was 22 carried on a unanimous voice vote. 23 24 Three bids were received, Huffman said,for the 1995 bucket truck, and the price from Lift All for$57,989 met all 25 the specifications and was the best and lowest bid. He recommended Council accept the bid. Councilmember 26 McBride so moved, second by Councilmember Hutton and the motion was carried on a unanimous voice vote. 27 Huffman said two bids were received for the underground cable puller and after reviewing them it was found the 28 bid of$35,200 submitted by Sherman and Reilly of Chattanooga,Tenn.was the lowest bid and evaluated as the 29 best received. Councilmember McBride moved to award the bid to Sherman and Reilly, second by 30 Councilmember Hutton and the motion was carried on a unanimous voice vote.Only one bid was received for the 31 air compressor and that was from Brandeis Indiana Equipment Co. of Indianapolis for$12,792. Councilmember 32 Parker asked if it was possible to go out and better that price and Huffman said he felt that it is a good price. 33 Councilmember Parker moved to award the bid to Brandeis,second by Councilmember McBride and the motion 34 was carried on a unanimous voice vote. 35 36 NEW BUSINESS 37 38 Councilmember Dickman commented that Councimembers met in executive session last week and were brought 39 up to date on the funds needed to allow the necessary pay increase for City employees,cover the unexpected 40 medical bills and make up the short fall on the funding for street lights. 41 42 He noted that the total short fall is$1,332,000 and the above are only three areas mentioned and does not include 43 any other costs of operation and increases the City might have. He said the$1,332,000 is needed to fund the 44 police contract and will allow a 4.5 percent increase for all other City employees for 1996. He added that all 45 Councilmembers seemed to be in agreement that the pay increases are fair and needed. Council also agreed 46 that the funding of the medical bills of Kenneth Lester must be done not knowing whether those costs will be 47 recovered.Also, Councilmember Dickman said,the City is still short on last year's budget of$105,000 for street 48 lights which means unless the cost goes down for 1996 there will be an additional shortage of$105,000 bringing 49 the total needed to$210,000 for street lights. 50 51 Councilmember Dickman gave the following suggestions to take care of the funding. He said (a)the City 52 administration could be required to make$770,000 in cuts in the existing City budget which will not be easy and it 53 will cause an elimination of some jobs; (b)the dividend and payment in lieu of taxes to the City from RP&L could 54 be increased from $1.938 million to $2.5 million which is still$1.134 million less than the maximum amount 55 allowable by the Indiana Regulatory Commission. Councilmember Dickman said the City can fund the increase by 56 cutting $562,000 carefully out of the 1996 RP &L budget which is a much larger budget to start with making the 57 cuts come a little easier. He added that this increase will have no effect on the surplus funds at RP &L or 58 electricity rates in any way, noting that what will be needed is to sharpen the pencil and make needed cuts that 59 would not affect any jobs at RP& L. He said that seems to be the fairest way to solve the problem. 60 61 Councilmember Dickman explained the need for urgency, noting that Council would need to have RP &L fund the 62 City transfer account by June 30, 1995 to have a legal funding for the 1996 budget. He moved to make the 63 transfer ofa$1,873,208 dividend to the City and a$625,792 payment in lieu of taxes to the City for a total transfer 64 of$2.5 million for 1996 and that RP &L fund that account by June 30, 1995.The motion received a second by 65 Councilmember Allen. RP&L Minutes Cont't June 19, 1995 Page 4 1 Chairperson Elstro said it was brought out in the executive session that no money was to come from RP&L. He 2 stated that Councilmember Parker had brought up several different items to go back to the F.O.P. and the Mayor 3 and Council had had no response. Councilmember Donat said she felt the City administration could be a better 4 steward of the budget to be able to fund these positions. She also noted that the Police are too important to be 5 made a political football,to be put in the middle of the administration and RP&L. She agreed with Chairperson 6 Elstro, noting that it was said at the executive session that the money was not going to come from RP &L. She said 7 she felt the contract is a good one and the City has space in its budget and there is room to fund the police salaries. 8 9 Councilmember Lundy asked whether or not the Firefighters will go along with a lesser amount of a raise than the 10 police. Councilmember Dickman said the police contract calls for just a one year raise. Councilmember Donat said 11 she had received a telephone call from a Firefighter who said he was unhappy with remarks made at the executive 12 session. She added that some disparaging remarks were made and it got back to the Firefighter.The motion was 13 defeated with Donat, Lundy, Parker, Hutton and Elstro voting against and Allen, Brookbank, Dickman and McBride 14 casting their votes in favor. 15 16 Huffman said it is not true that the Public Service Commission allowed RP& L to transfer$3 mllion to the City. He 17 said the commission did not allow that to be transferred, but the money was to be used for, if the transfer is made, it 18 comes out of that and any extensions or replacements which needed to be made in the system comes out of that 19 $3.5 million. Councilmembers Dickman and Allen refuted that statement. 20 21 ADJOURNMENT 22 23 There being no further business,on a motion duly made,seconded and passed the meeting was 24 adjourned. 25 26 27 28 29 30 31 Howard 'Jack"Elstro, Chairperson 32 33 34 35 36 37 ATTEST: 38 Norma Carnes, City Clerk 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 - 61 62 63 64 65