HomeMy Public PortalAbout03-01-1993 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. MARCH 1. 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, March 1, 1993 in the Municipal Building
3 in said City. Councilperson 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
7
8 The minutes were unavailable and will be approved at the Board's next meeting March 15, 1993.
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 on unanimous voice vote the motion carried.
14
15 Bills Already Paid
16 Payroll and Deductions
17
18
19 Investments Purchased From:
:
20 Cash Operating Fund 1,050,000.00
21 Bond Sinking Fund
22 Utility Bond Reserve Fund
23 Depreciation Reserve Fund 91,000.00
24 Consumer Deposit Fund
25 Cash Reserve Fund 137,500.00
26 Insurance Reserve Fund
27 28
Group Insurance Fund
Total Investments 1,278,500.00
29
30
31
32 Transfer to City in Lieu of Taxes;
33 '
34 Transfer from Payroll Ded.to;
35 Cash Operating Fund
36
37
38 Transfers from Bond Sinking Fund to:
39 Cash Operating Fund
40
41 Transfers from Consumer Deposit to:
42 Cash Operating Fund
43
44 Transfers from Utility Bond Reserve Fund to;
45 Bond Sinking Fund
46
47 Transfers from Cash Operating :
48 Interest and Bond Principal
49 Bond Sinking Fund
50 Cash Reserve Fund 137,500.00
51 Utility Bond Sinking Fund
52 Depreciation Reserve Fund 91,000.00
53 Insurance Reserve Fund
54 Consumer Deposit Fund
55
56 Interest and Bond Principal
57
58 End of Month Petty Cash
59 Revenue Bonds
60 Interest Coupons Redeemed
61 Bond Coupons
62 Miscellaneous Bills Already Paid 4,861.95
63
64 Total Prepaid Invoices 1,511,861.95
65
Total Bills Not Paid 599,317.52
Grand Total 2,111,179.47
RP&L Minutes Cont'd
March 1, 1993t
•
Page 2
1 REMARKS BY THE CHAIRPERSON
2
3 Chairperson Brookbank noted that since the Board is asked to authorize RP & L to receive bids for a mini van
4 she wanted to bring Councilmembers up to date on the fact that her last name is Brookbank and requested
5 General Manager Irving Huffman to explain the steps of the bidding procedure.He said specifications are sent out
6 to various dealers who, in turn,supply the bids,and when those bids are returned to RP& L they are opened and
7 evaluated. Brookbank added that the bids do have a noncollusion affidavit. Explaining the reason for her actions,
8 Brookbank said some questions had been raised about her possible conflict of interest and she wanted to make it
9 perfectly clear that she never sees the bids.
10
11 UNFINISHED BUSINESS
12
13 None was presented
14
15 STREET LIGHT COMMITTEE REPORT
16
17 Councilmember McBride said he had a telephone call from Mary C. Nicholson at 121 North 17th Street inquiring
18 about an electric light which used to be in the alley near her garage.Assistant Manager Bill Clarke came forward
19 explaining that several years ago Nicholson's son had requested its removal and the light bulb had been taken out
20 but the fixture was still there.He added that when the circuit was rebuilt there was no record of an alley light.
21
22 REPORT BY GENERAL MANAGER
23
24 Huffman announced that-he would like to receive bids for a mini van at the next meeting.He said plans are to use
25 it in RP&L's engineering department and it will be replacing a 1986 Chevrolet Celebrity which has 82,107 miles
26 on it. Instead of trading that car in,which is usually done, Huffman asked for authorization to keep it and use it
27 primarily for transportation for meter readers.This would be a change from what has been done in the past.Meter
28 readers have been furnishing their own transportation and paid mileage of 28 cents per mile.Councilmember
29 McBride moved to authorize the General Manager to receive bids and keep the car,second by Councilmember
30 Parker and carried by a unanimous voice vote.
31
32 Explaining that he was asking the Board's authorization to purchase ten remote terminals, Huffman said the
33 original plan was to buy five this year and another five next year. However, in checking with Westronics Inc., he
34 said,they indicated they could give a special price if all ten were purchased at one time. He requested
35 authorization to order the ten and only get five this year and get the additional five next year.Councilmember
36 Dickman so moved,second by Councilmember McBride and carried by a unanimous voice vote.
37
38 Bringing up the subject of the pension plan at RP&L,Huffman noted that Councilmember Dickman had
39 requested information about how many,employees were hourly and how many were salaried.There are 107
40 hourly and 49 are salaried, he said.After.Huffman quoted some figures and gave his observations about the
41 pension plan,Dickman noted that nothing was said indicating anybody's pension would be affected. He added
42 that his committee was trying to understand that if, in fact,the plan is way overfunded what would have to be done
43 to bring it in line. -
44
45 Councilmember Elstro,directing his comments to Chairperson Brookbank, commented about the memo Huffman
46 was sent requesting where RP&L money is being invested and it was answered. In that same letter, he said, it
47 made comments about what Boards he sat on and Elstro wanted to know who requested that information.
48 Chairperson Brookbank responded that she requested it because it is information this Board has every right to
49 have.She added that she also asked if-he was compensated for sitting on the Board of any financial institutions.
50 Councilmember Elstro said that is his personal life and Councilmember Hutton agreed.Milligan interjected that the
51 fact that Huffman sits on the Peoples Board has had to be disclosed in his-conflict of interest statement.
52
53 Huffman noted that he did not have the figures ready concerning the financing for the upcoming cable. He said a
54 meeting with the consultants is scheduled for Wednesday out of which will come various plans that will be
55 submitted to the Board later in the month.
56
57 Councilmember Hutton questioned Milligan's involvement and in answer to her question about where his pay
58 came from, Milligan said he is paid by the City and he gets no extra money from RP&L. In response to
59 Councilmember Hutton's question aboutthe fact that maybe he is too close to the City to be doing RP&-L's legal
60 work,too, Milligan isaidthat RP-&L is the single biggest investment this City has and-a vital part of the City's
61 operation is to know what is going on at RP& L.He added that the Department of Law is prepared to handle
62 whatever legal matters its required to handle there.
63 -
64
65
1.
RP&L Minutes Cont'd
March 1, 1993
Page 3
1 Huffman addressed the issue of the 61/2 percent rate of return,noting that it was the rate RP&L chose to receive
2 as what it would be receiving as a rate increase. He added that the facility did not want to ask for more money,
3 noting that it was done with the customer in mind to prevent rate shock. He said RP&L knew it would be going
4 back for rate adjustments and rather than get a big 10 percent or an 8.5 percent rate of return it chose to go with
5 the 6.5,always thinking of the customer. He said RP&L isn't trying to see how much money it can make to build
6 up its revenues. He added that out of that 6.5 percent rate of return RP&L is making an investment into the plant
7 and the Commission allows it over$500,000 for payment in lieu of taxes but the extra money RP&L pays.He
8 said the more than$1 million RP&L pays has to come out of that,too.Milligan noted that the depreciation
9 reserve was$7.66 million as of January 31 of this year and that is used principally for additional plant and
10 replacement and that is discussed in RP&L's order from the Commission. It also provides in there for any kind of
11 plant extension, Milligan said, adding that that is the principal source type of thing Huffman is talking about when
12 he talks about a break down and that is the nearly$8 million depreciation reserve fund.Huffman said he wishes it
13 was$13 million because a problem can exist that could use up that amount if a generator is lost.That is why
14 those kind of funds are needed in the depreciation reserve fund, he added. Milligan noted that RP&L did not
15 request any increase in that fund from the Commission.
16
17 Chairperson Brookbank asked Jan Passmore to explain the mission of the Citizens Advisory Finance Committee.
18 Stepping to the lecturn, Passmore said no caviat was placed on the committee as far as going out and finding
19 money. He said Mayor Cornett empaneled the committee to review all revenues and expenditures of the City
20 which included not only RP&L but the Sanitary Department,Airport and Parks and Recreation.The question,he
21 said,was raised about the pension plan because it was stated in the report of the State Board of Accounts that it
22 was overfunded by approximately$5 1/2 million.The committee asked whether there was an actuarial study to
23 support that or contradict it and it also asked if there was an error in that report.
24
25 Passmore said there never was an intent to violate anybody's pension.However,when the State Board of
26 Accounts,which is the only outstanding auditing body,said there was a$5 1/2 million overfunding and they
27 indicated that the overfunding had increased the previous years the committee went back and looked at 1987 and
28 learned that it had been overfunded every year. The committee asked if there was an outstanding audit or
29 actuarial report to indicate whether this was correct or incorrect. He said Jim Daugherty of RP&L commented
30 that there were four actuarial reports that he or someone had determined were in error and that caused concern
31 within the committee suggesting that perhaps there was a need to get somebody else to give a proper report.He
32 concluded by saying it is not the committee's intent to steal anybody's pension.Huffman added that when
33 questions are raised employees are going to have a concern and are going to show that concern and that is why
34 they are in the Council chambers tonight.
35
36 Councilmember Parker asked if the Board of Public Works&Safety was going to look into the RP&L Board's
37 letter of intent to TCI.Chairperson Brookbank said the Board of Public Works&Safety had determined that at this
38 time it is not going to reopen the negotiations. Councilmember Parker expressed disappointment in that the Board
39 did not take the letter of intent and give it to TCI. He added that he was disappointed in the outcome.
40 Councilmember Elstro said he felt the Board of Public Works&Safety should respond in writing and Chairperson
41 Brookbank said she would insist on a written response.
42
43 Huffman said Herschel Philpot wants to go over RP&L's financial report in detail but would wait to do that at the
44 Board's meeting at the service building.
45
46 When Councilmember Dickman asked all those who were in the audience interested in the RP& L pension to
47 stand, about 40 did so. Most remained standing when he asked them to if they felt RP&L should be in the cable
48 TV business.When Chairperson Brookbank asked those who live in Richmond to remain standing only a few did.
49
50 Milligan commented that RP&L as a public entity is required to go through formal bidding procedures which
51 require newspaper advertisement on any contracts which are anticipated to exceed$25,000. He said the public
52 depository statutes of the State of Indiana do apply to RP&L and their procedure is set forth.Milligan added that
53 he would be happy to work with the purchasing people as well as the finance officer in order to comply with those
54 very simple formal bidding procedures as well as the public depository procedures,adding that those greatly
55 affect RP& L's expenditures as well as its investments.
56
57 ADJOURNMENT
58
59 There being no further business,on a motion duly made,seconded and passed the meeting was
60 adjourned.
61
62
63
64
65 Jane Brookbank,Chairperson
ATTEST:
Norma Games,City Clerk