HomeMy Public PortalAbout08-02-1993 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 2.1993
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 2, 1993, in the Municipal Building
3 in said City. Chairperson Brookbank presided with the following Councilmembers in attendance: Elstro, Lundy,
4 Donat, McBride,Parker, Allen, Dickman and Hutton. The following business was had to-wit:
5
6 APPROVAL OF MINUTES OF JULY 19.1993
7
8 The minutes of July 19, 1993 were not available for approval.
9
10 APPROVAL OF BILLS. INVESTMENTS AND TRANSFERS
11
12 Upon recommendation of the Finance Committee,Councilmember Allen moved to approve the following bills for
13 payment,seconded by Councilmember Dickman and by unanimous voice vote the motion carried.
14
15 Bills Already Paid
16 Payroll and Deductions 214,565.69
17
18
19 Investments Purchased From:
20 Cash Operating Fund 1,650,000.00
21 Bond Sinking Fund
22 Utility Bond Reserve Fund
23 Depreciation Reserve Fund 91,000.00
24 Insurance Reserve Fund
25 Consumer Deposit Fund
26 Cash Reserve Fund 137,500.00
27 Group Insurance Fund
28
29 Total Investments 1,878,500.00
30
31
32 Transfer to City in Lieu of Taxes:
33
34 Transfer from Cash Operating Fund to:
35 Payroll Deduction Fund
36
37 Transfers from Depreciation Reserve to:
38 Cash Operating Fund
39
40 Transfers from Consumer Deposit to:
41 Cash Operating Fund
42
43 Transfers from Utility Bond Reserve Fund to:
44 Bond Sinking Fund
45
46 Transfers from Cash Operating :
47 Interest and Bond Principal
48 Bond Sinking Fund
49 Cash Reserve Fund 137,500.00
50 Utility Bond Sinking Fund
51 Depreciation Reserve Fund 91,000.00
52 Insurance Reserve Fund
53 Consumer Deposit Fund
54 Interest and Bond Principal
55
56 End of Month Petty Cash
57 Revenue Bonds
58 Interest Coupons Redeemed
59 Bond Coupons
60 Miscellaneous Bills Already Paid 1,400,892.97
61 Total prepaid invoices 3,722,458.66
62 Total Bills Not Paid 701,281.57
63
64 Grand Total 4,423,740.23
65
RP&L Minutes Cont'd
August 2, 1993
Page 2
1 REMARKS BY CHAIRPERSON(
2
3 Chairperson Brookbank announced that General Manager Irving Huffman is in Atlanta, Ga. visiting a new
4 grandson, Brady Huffman.
5
6 UNFINISHED BUSINESS
7
8 Directing her remark to Councilmember Elstro, Chairperson Brookbank said everybody had their expense reports
9 turned in except him. He responded that he would have it ready within the next few days, adding that there was
10 no law that said he had to have it turned in.Chairperson Brookbank commented that the State Board of Accounts
11 would probably want to see it someday.
12
13 A letter prepared by City Attorney Thomas Milligan was read by City Clerk Norma Carnes at the request of
14 Chairperson Brookbank.The letter in its entirety is on file in the City Clerk's office.
15
16 Chairperson Brookbank said she had asked previous to the meeting at the RP &L service building Monday night
17 about minutes 36 months prior to the approval of building the stack. She said after going through the files it was
18 discovered they were only on tape and had not been transcribed. There were 66 tapes in all. She said she and
19 fellow Councilmembers Allen and McBride listened to some tapes, adding that it would be a laborious process to
20 transcribe them. Councilmember Elstro said it would be too expensive.Chairperson Brookbank asked Milligan if it
21 was too insignificant a project. Milligan said that as the presiding officer of the Board it is Brookbank's
22 responsibility to keep a record in the absence of a secretary or a person taking notes. He said it is necessary for a
23 public body to keep an accessible written record and it would be a reasonable expenditure to have the tapes
24 transcribed. Milligan said she did not have to have a Board vote to ask that the tapes be transcribed.
25 Councilmember Elstro said he felt the tapes did not have to be transcribed. Chairperson Brookbank said RP & L
26 had spent $400,000 on a cable project and she felt if those minutes had been transcribed and available to the
27 Board members to read,that might not have happened. Councilmember Elstro said he felt that money should not
28 be wasted on having the tapes transcribed, adding that he felt the Board should vote on the issue. He said if the
29 Board members wanted to listen to the tapes they could go to RP&L where he felt the tapes should stay.
30
31 Chairperson Brookbank asked Milligan to describe the Chairperson's powers. Milligan said these include
32 convening and presiding over meetings, perfecting the record of meetings and appointing committees. He said
33 she had discharged those powers and it was not necessary to have a vote of confidence on exercising them.
34
35 Councilmember Allen said she had listened to the tapes of parts of three meetings and noted that in May of 1988
36 the Board voted to give the City$1,600,000 for the next four years which would have carried through 1992. But, in
37 1993 the budget had also stood at$1,600,000.She noted that she had heard former Councilmember Lynn Morris
38 say on her radio program that it was done to punish former Mayor Frank Waltermann and since it was for a term
39 of four years she wondered if that was a possibility. She added that ratepayers are always being asked if anything
40 is given to the City will it raise rates. She said any money that is given to the City, put into a reserve account, or
41 selected for traveling or for new equipment affects the rates. She said other cities have higher utility rates but
42 they have moved on and are not stymied like Richmond and she questioned as to whether lower utility rates had
43 benefitted the City's economy. She said that Memphis, Tenn. had an uncoordinated economic development team
44 until they got the utilities, City government and the Chamber of Commerce working together. She said once they
45 got the three working as one,for the good of all the citizens,they began making progress and Memphis is a highly
46 productive City now which is what she wants Richmond to be, adding that Councilmembers were elected to
47 represent all citizens in the City. In a conversation she had with General Manager Irving Huffman about RP& L,
48 she said, he explained he was just trying to protect his turf. She said she felt turfism has no place here if
49 everybody is going to work together and accomplish anything. She said she heard a five-member panel at the
50 APPA conference in California discuss payments to the City, not particularly in lieu of taxes, but just a payment to
51 the City and in all cases the payment ranged from 5 to 30 percent. Referring to the printout of the operating
52 revenues and transfers to the City provided by Financial Manager Herschel Philpot, Allen said that in 1988 when
53 the Board decided to lower the amount from $2 million to$1.6 million the percent of the transfer of the percentage
54 of total revenues to the City was 6.47 and she heard some Councilmembers say the figure was dropped because
55 the formula they were using was escalating. But, she noted, in 1988 RP & L had$30 million in revenues and this
56 year there will be$40 million.She said it didn't seem sensible that the same amount of money is to be transferred
57 to the City when the inflation rate has been at least 3 percent in each one of those years. She added that if it
58 continues in 1993 the percentage of giving to the City on the gross revenues will be 4.25 and 4.07 in 1994, so it
59 has been decreasing. She said the $2,475,000 payment that she suggests will not jeopardize RP & L funds nor
60 the rates because this money has been a liability on RP & L's balance sheet. She moved that the Board outpay
61 the payment of$2,475,000, not only as payment in lieu of taxes but as a partial payment on the dividends, then
62 asked for comments before the vote. Councilmember Hutton said when the Board lowered the rate of return $30
63 million was in the reserves, that is why the formula was going up. Philpot said the reserves were quite high and
64 one of the recommendations made after an HDR report was to hold the rates steady and bring the reserves down
65 to$14 to$17 million. He told Councilmember Allen that the amount she gave as a liability is incorrect, adding that
the liability is$137,500 a month that is expensed. He said the figure she quoted is the amount of money in the
RP&L Minutes Cont'd
August 2, 1993
Page 3
1 cash reserve fund as an asset. Councilmember Allen said the cash reserve fund as an asset is $1.8 million but
2 the liability at the end of December in both 1991 and 1992. Philpot interrupted, saying it is 18 months of transfers.
3 Councilmember Allen responded,saying that is true,so it has all been expensed,six months in 1992 and it will be
4 12 months expensed in 1993 and is on the balance sheet at $2,475,000. Councilmember Dickman said the
5 electrical rates have gone up and the revenue has increased,for instance,the street light charge to the City went
6 up 27 percent and that comes out of the City's pocket but the return on investment has not increased and
7 spendable amount of money is steadily declining. He added that he heard Huffman say that the rate increase that
8 is already in effect now will build the reserves back up quickly, saying it boiled down to what is a fair rate of return
9 to the owner. He said the fact that RP & L's income is going up and is charging the City more to provide the
10 electricity but RP & L is not giving the City greater return and it is not increasing so it's going to choke the City.
11 Councilmember Allen added that this motion does not include what is fair. She said that will be decided on in the
12 November budget and when the Board does the RP & L budget that will be another question. This, she said, is
13 just a question of what is already on the books.
14
15 In response to the comment made by Councilmbmer McBride that he felt the motion had a lot to do with the City
16 employees, Councilmember Parker said he felt that the amount of money RP & L gives the City in lieu of taxes
17 needs to be discussed and he felt that everybody wants to do what is fair. However, he said he didn't know what
18 that had to do with Cky employees and felt that it was a separate issue. He added that in his opinion no one on
19 this Board is opposed to the City employees receiving a raise and recalled that last year Councilmembers said
20 they would make every effort to give the City employees a raise. He said where the money comes from is
21 Council's responsibility but it doesn't necessarily have to come from RP & L. He added that no budget cuts have
22 been taken into consideration and Councilmembers haven't seen the budget as a group. Councilmember McBride
23 stated that without the money from RP & L he feels the Board is status quo as far as giving raises, however
24 Councilmember Parker disagreed. As one of the three members of Council meeting as the budget committee,
25 Councilmember Parker said it has not been finalized ;yet but at the present time there is an excess of
26 extpenditures of$1,830,353 and also budget recommendations to balance the budget to knock out four different
27 things to bring down the budget to only$150,000 over and that is with no increase to the City from RP&L.
28
29 Councilmember Allen said she is not proposing that the Board consider a new formula for payment to the City in
30 lieu of taxes, only to pay what is on the balance sheet. Councilmember Lundy said she felt that payment from RP
31 & L is not going to make Richmond a progressive City, adding there are a lot of reasons it may not be
32 progressive. She said she had never said that the Board should not give any more money to the City, however, it
33 is her feeling now that the Board not give the$2,475,000.She added that the budget should be discussed and the
34 Board should give the City a fair amount of money. She said the Board has to work with the City to figure out what
35 is happening to the money at hand to make sure the department heads are not just making a wish list and are
36 looking seriously at their budgets. She added that it is up to the Board to make sure it does the right thing for the
37 City and just because the money is there at RP & L doesn't mean the Board has to give it to the City.
38 Councilmember Elstro agreed, noting that Councilmembers haven't seen the budget. He said the City is
39 automatically picking up $150,000 by not having the Economic Development office in the City building.
40 Chairperson Brookbank pointed out that won't be on the budget until July 1994.
41
42 Councilmember Donat said she felt the Board should not give any more money to the City until members see the
43 City's budget.She added that she feels the City needs to also be good stewards of the taxpayers money and take
44 a look at the money it spends on consultants. Councilmember Dickman said he didn't understand why the City is
45 criticized for hiring consultants but it is okay for RP & L to hire a lot of consultants. Councilmember Elstro's
46 response to that was that if you've got the money you can do it and if you don't, you can't do it. He added that it is
47 a tight ship that is run at RP & L and that is more than he can say about some of the City's activities.
48 Councilmember Allen withdrew her motion.
49
50 Councilmember Donat commented on the cable issue, noting that this Board and Common Council voted on
51 whether or not to pursue the cable industry and Council voted to go ahead and go into the business but it was
52 vetoed by the Mayor. She moved that no member of this Board, including the chairperson, may order any type of
53 labor that would cost any amount of money without a majority vote of the Board, second by Councilmember
54 Hutton. Councilmember Dickman asked for a clarification from Milligan, questioning whether Chairperson
55 Brookbank was within her rights to request minutes to be done. He added that that is different than him going out
56 and hiring an accountant to do some work for RP & L without approval of the Board. Milligan answered in the
57 affirmative, noting that the utility law requires this Board to approve all contracts but a direction to a secretary at
58 RP& L or the provision to the City Clerk's office or the Department of Law to transcribe tapes into minutes is not
59 incurring a contract and does not require a majority vote of the Board. Councilmember Dickman responded that
60 the law protects members from doing something that is not legal and Councilmember Donat stated that in an
61 attempt to police all Board members her motion stands.
62
63 Milligan said it is a redundant motion and the fact that the Chairperson would direct that someone transcribe
64 minutes is simply a housekeeping matter. Councilmember Hutton asked if the transcribing could be done at RP&
65 L at its leisure as some things are done within the City and Milligan said that would be up to the Chairperson who
responded that this is not an emergency,adding that she felt the new Board members needed to be brought up to
speed. She said she felt it only fair for everyone to have hard copies of the minutes prior to 36 months, adding
that she found the tapes interesting and they jogged her memory. Councilmember Hutton said she didn't want to
see anyone hired to do the transcribing.Councilmember Dickman expressed a concern about the lasting qualities
of the tape, noting that in 50 years there might not be any records.
RP&L Minutes Cont'd
August 2, 1993
Page 4
1 Councilmember Lundy said she had no problem with the tapes being transcribed but pointed out that it should not
2 appear that RP & L is the only one not doing its job. She said she had contacted the City to get records on twc
3 occasions, once in the previous administration and once with the current one, and was told they were stored in the
4 airport hangers and were not available. She added that she had also asked for something from the City six months
5 ago and was told there were no records past 1992, causing her to comment that doing a poor job of housekeeping
6 is a two-way street.
7
8 Councilmember Donat stated there was a motion on the floor and it had been seconded, noting that it was not
9 made specifically for the minutes but for any type of labor that any member, including the Chairperson, might want
10 to order. She said it would keep a check and balance on the expenditures and allow the Board members to know
11 what is going on without being surprised by something in the mailbox on the day of the meeting. She restated the
12 motion. Councilmember Allen commented that the motion is redundant because the Board already has to vote on
13 everything that is spent at RP& L. Councilmember Hutton said much time has been wasted at RP & L in the past
14 six months digging up records and making copies. Councilmember Donat stated that Huffman did tell Board
15 members how much money one project cost that had been demanded of him. Councilmember Dickman said he
16 had a problem with the way the motion is worded, noting that there would be no way to request even one document
17 from RP & L without expending money , adding that they're going to have to buy a stamp or run it on a copy
18 machine and there is labor involved.The motion was defeated on the following call of the roll:
19
20 Nays:Lundy, McBride,Allen, Dickman and Brookbank(5)
21 Ayes:Elstro,Donat, Parker and Hutton (4)
22
23 Councilmember Parker asked Milligan whose responsibility it is to take the minutes, noting that back in the period of
24 time the tapes were made the City Clerk took the minutes in Council chambers but at the meetings in the RP & L
25 service building they were taped and not transcribed. Milligan answered that it is the City Clerk's responsibiity
26 because she or he is compensated as Clerk to the RP& L Board. Chairperson Brookbank said that was attempted
27 at the meeting in January at the RP&L service building but it didn't work out. Milligan said with the City Clerk taking
28 care of the minutes they are kept in the City Clerk's office in the vault for safekeeping and accessible to everyone
29 including Board members, all employees and the media and is a matter of public record. Councilmember Parker
30 said he had no problem with that, but was only trying to explain the reason they are on tape is that at that point nc
31 one was there to tape the minutes and transcribe them and it was not RP & L's responsibility to do so. City Clerk
32 Norma Carnes stated that, at Chairperson Brookbank's request, she attended the meeting in January and was told
33 by both Ms.Williams and Huffman that it was a duplication and there was no need for her to be there.
34
35 REPORT BY GENERAL MANAGER
36
37 At the request of Councilmembers Allen and Lundy, Philpot reported on the Energy Cost Adjustment factor noting
38 that RP&L files a 30-day filing every quarter and it changes. He said there are about six different things to project
39 and at the end of six months they go back and reconcile these things.These include the number of kilowatt hours
40 that RP&L thinks it is going to sell,the number it is going to buy,the demand for the month,the ECA energy and
41 the ECA demand charge RP&L will get from IMPA and also the capacity payment from IMPA. In December of
42 1993, right after the rate case,the ECA on the residential was.000116, almost 0; in the second quarter it went up
43 to about 4 mills and the third quarter,starting in July, it is a negative.003038,dropping about$7 a thousand
44 kilowatt hours so if an average bill is 1000 kilowatt hours the residential bill will be about$7 less.The one just filed
45 for the fourth quarter drops another$4 per thousand,so the ECA will be.007378 negative. He said part of this is
46 due to the refund RP& L is supposed to get from INM through IMPA. He added that on the LPS and industrial the
47 numbers for a typical bill would have been about$65,000 to$70,000 in the second quarter,and the third and fourth
48 it is going to drop just about$10,000 a month to these industrial customers. He said it is down now but probably by
49 the second quarter or third quarter of 1994 it is going to go back up. He commented that the ECA is hard to
50 understand but RP&L files a 17-to 20-page report quarterly with the IURC on a 30-day approval. Philpot said RP
51 &L set a new peak Tuesday and Wednesday,July 27 and July 28,of 141,000 kilowatt hours.He said the other
52 peak was around 130,000 which meant it jumped about 11 megawatts from 1992 to 1993,adding that it increases
53 RP&L's bill from IMPA about$100,000 to$150,000 a month.
54
55 ADJOURNMENT
56
57 There being no further business,on a motion duly made,seconded and passed the meeting was
58 adjourned.
59
60
61
62
63 Jane Brookbank,Chairperson
64
65
ATTEST:
Norma Carnes,City Clerk