HomeMy Public PortalAbout12-16-1985 PROCEEDINGS OF THE COMMON COUNCIL OF THE
CITY OF RICHMOND, INDIANA, SERVING AS A BOARD
IN CHARGE OF THE OPERATION OF THE RIB POWER
& LIGHT PLANT, DEER 16, 1985
1 The Common Council of the City of Richmond, Indiana, serving as a Board in charge
2 of the operation of the Richmond Power & Light Plant, met in regular session December
3 16, 1985 at the hour of 7:00 P.M. in the Municipal Building in said City. Chairperson
III4 Morris presided with the following members present: Councilmembers Elstro, Williams,
5 Brookbank, Hankinson, Parker, Bodiker and Lemoine. Absent: None. The following
6 business was had to-wit:
7
8 APPROVAL OF N(TN1Ti'FS OF DEER 2, 1985 - '
9
10 Councilmember Hankinson moved to approve the minutes of the previous meeting as
11 prepared, seconded by Councilmember Williams and on unanimous voice vote- the motion
12 was carried.
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14 APPROVAL OF B1TTS AND INVESTS
15
16 Councilmember Whitesell announced that the Finance Committee had inspected the
17 bills already paid and the investments purchased and moved to recommend approval
18 of same as follows, seconded by Councilmember Hankinson and on unanimous voice
19 vote the motion was carried.
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'21 Bills Alread Paid
22
23 Investments Purchased from:
24 Cash Operating Fund t . ' 950,000.00
25 .
26 Miscellaneous Bills Already Paid 30,347.62
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28 Total Bills Already Paid 980,347.62
III 29
30 Councilmember Whitesell stated the Finance Committee had inspected unpaid bills
31 in the amount of 367,886.61 and moved to recommend payment of the unpaid bills,
32 seconded by Councilmember Hankinson and on unanimous voice vote the motion was
33 carried.
34
35 Grand total of all approved bills was 1,348,234.23.
36
37 REMARKS BY CHAIRPERSON
38 .
39 Chairperson Morris reminded the Board that there would be no regular meeting of
40 the Executive Board in December.
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42 REPORT BY GENERAL MANAGER
43
44 1986 Budget
45
46 Mr. Huffman stated to the Board that they have copies of the budget reflecting
47 the changes made during the budget meetings. He said that the budget reflected
48 a 2.4% growth of retail sales over 1985 and he feels this is realistic. He explained
49 that the electric utility was a weather sensitive utility and he felt there would
50 be a slight growth in the industrial sales.
51
52 Mr. Huffman stated that the capital side of the budget reflects projects to be
III53 done in the future and sometimes they are unable to complete all capital items. .
54 Mr. Huffman said that utilities always need upgrading and many of their substations
55 and equipment are from thirty (30) to fifty (50) years old, but they have had
56 excellent maintenance and they will be able to get additional mileage from well
57 maintained equipment.
58
59 Councilmember Lemoine asked if the 2.4% projected growth was based on 1985 sales
60 and Mr. Huffman said it was based on actual 1985 sales to August 31st.
61
62 Councilmember Whitesell asked the Board to deal with the capital budget and the
63 operating budget separately based on previous Board policy of approval of capital
64 expenditures over 25,000.00 being made on an individual basis per expenditure.
65
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RP&L Minutes Cont'd
December 16, 1985
Page 2
1 Mr. Huffman stated that they bring it to the Board if it is over 25,000.00, but
2 would like to have all capital expenditures in the budget as a plan for future
3 action.
4
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5 Councilmenber Whitesell stated that the capital budget should only reflect those
6 expenditure of 25,000.00 and under as approved purchases by the Board and those
7 are the expenditures necessary in the 1986 budget.
8
9 Councilmember Whitesell moved\to- approve the 1986 CapitalyBudget in the amount
10 of 55,626.00 per approved projects,:,seconded by Councilmember Brookbank, the following
11 discussion was held on the motion.
12
13 Councilmember Elstro asked about not voting on the budget as a whole and Councilmember
14 Whitesell explained that the 55;626:00._included the eight (8) -projects under 25,000.00
15 to be handled at the discretion of the General Manager and the balance of the
16 proposed projects in excess of 25,000.00 would have to be presented to the Board
17 for approval since Board policy dictates that technically only those .,under. 25,000..0.0
18 can be approved in a lump sum.
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20 Mr. Huffmaft said-. the Board could pass the entire proposed amount in 'the. capital
21 budget, but it would still require additional .approval .of the Board for - -
22 expenditures Over 25,000.00. He said it is easier to have a plan and the knowledge
23 that the Board is in support of projects before bringing them for additional approval.
24
25 Councilmember Bodiker commented.that.the.budget is only a_ financial—plan and items
26 under the 25,000.-00 value are a definite go and others items in the plan would
27 be brought back for Board approval.
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29 Mr. Huffman expressed concern over projects already approved by the Board for
30 1986 expenditures over the 25,000.00 value and he was informed that the Board
31 had already backed these planned expenditures.
32 -.
33 Councilmember Elstro asked if the motion was intended to set a certain amount
34 as a tentative go with other expenditures to be brought to the Board for approval
35 and Councilmember Whitesell stated that was correct and it was his personal views
36 not to authorize a seven million capital budget for 1986.
37
38 The motion for the 1986 Capital Budget to be 55,626.00 passed on the following
39 call of the roll:
40
41 Ayes: Elstro, Williams, Brookbank, Whitesell, Parker, Bodiker, Lemoine and Morris (8)
42 Nays: Hankinson (1)
43
44 Councilmember Elstro requested further discussion on this motion at the next
45 Executive Board meeting.
46
47 Councilmember Whitesell stated that to clarify his prior motion, he would move
48 to approve the 1986 capital budget inclusive and encompassing the balance of the
49 capital items proposed in excess of 25,000.00, with these items to be brought
50 to the Board for Board approval, seconded by Councilmember Brookbank and on the
51 following call of the roll the motion was carried.
52
53 Ayes: Elstro, Williams, Brookbank, Whitesell, Parker, Bodiker, Lemoine and Morris
54 (8)
55 Nays: Hankinson (1)
56
57 Councilmember Elstro once again requested that the RP&L staff be updated on this
58 at the next Executive Board meeting.
59
60 Councilmember Whitesell stated to the Board that in his estimation the operating
61 budget serves as a guide, evaluates progress and establishes desires and direction
62 for the Board and the management of RP&L. He said the 1986 operating budget reflects
63 a 6% increase in sales over 1985 and a 11% to 12% increase in expenditures.
64 Councilmember Whitesell stated it was his opinion that these two need to be brought
65 closer together, that the expenses be more in line with the revenues.
RP&L Minutes Cont'd
December 16, 1985
Page 3 .
1 Councilmember Whitesell moved to reflect a 29,200,000.00 expense goal, the motion
2 was seconded by Councilmember Lemoine.
3
111 4 Councilmember Bodiker stated that figure would not reflect inflation at all.
5
6 The motion was defeated on the following call of the roll:
7
8 Ayes: Brookbank, Whitesell, Lemoine and Morris (4)
9 Nays: Elstro, Williams, Hankinson, Parker and Bodiker (5)
10
11 Councilmember Bodiker moved to approve the 1986 Operating Budget as presented,
12 seconded by Councilmember Parker and on the following call of the motion was carried.
13
14 Ayes: Elstro, Williams, Hankinson, Whitesell, Parker and Bodiker (6) '
15 Nays: Brookbank, Lemoine and Morris (3)
16 .
•
17 Economic Growth Group Dues
18
19 Councilmember. Hankinson moved to bring to the table for action the request fran
20 the Economic Growth Group for 2,500.00 dues for 1986, seconded by Councilmember
21 Elstro and on unanimous voice vote the motion was carried. •
22
23 Councilmember Bodiker asked the City Attorney if his membership on the Chamber
24 would cause any conflict in this matter and Mr. Barden stated it_would not.
25
26 Councilmember Hankinson stated that in view of the amount of dollars given to
27 the Economic Develoguent Office, he did not feel it was in the Board's best interest
28 to give to the Economic Growth Group and moved to deny the request. The motion
III29 was seconded by Councilmember Bodiker.
30
31 In response to Councilmember Lemoine, Mr. Huffman explained the dues were used
32 for printing and advertising.
33
34 Councilmember Williams commented that he felt the Board should give the EGG notice
35 that the funds were being cut off by paying the dues for 1986 and notifying them
36 they would not be forthcoming for 1987.
37
38 There being no further discussion, the motion was adopted on the following call
39 of the roll:
40 '
41 Ayes: Hankinson, Parker, Bodiker, Lemoine and Morris (5)
42 Nays: Elstro, Williams, Brookbank and Whitesell (4)
43
44 Coal Inventory
45
46 Chairperson Morris informed the Board that she had spoken with Mr. Mike Claytor
47 of the State Board of Accounts regarding the 300,000.00 variance in the coal inventory.
48 Mr. Claytor had told Chairperson Morris that a thorough, intense inventory was
49 not necessary and this was no reason to suspect that an annual inventory would
50 be necessary, but they did need to address the possibility that the inventory
51 was materially mistated.
52
53 General Manager Huffman stated that the utility industry used a shrinkage factor
54 of 2% when coal was received by rail, but now with truck delivery a 1.2% would
55 be on target, but he would rather use a 1.3% shrinkage factor since he would rather
56 have too much than not enough. Mr. Huffman indicated that auditing people were
57 not familiar with the industry shrinkage factors.
58 '
59 Chairperson Morris stated that without the inventory the audit would need clarification
60 and that it could affect the bond rating of the utility.
61
62 Councilmember Parker asked how the audit would be handled since it would not have
63 to be so intensive and Chairperson Morris stated that arrangements could be made
64 with an auditing firm for a formula to adjust the shrinkage factor.
65
RP&L Minutes Cont'd
December 16, 1985
Page 4
1 Councilmember Lemoine moved to ask Mr. Delmer Cox to work with the State Board
2 of Accounts on requirements for the coal inventory and to act to meet the
3 requirements for the coal inventory, seconded by Councilmember Brookbank and on
4 the following call of the roll the motion was carried.
5
6 Ayes: Elstro, Williams, Brookbank, Hankinson, Whitesell, Parker, Bodiker, Lemoine
7 and Morris (9)
8 Nays: None
9
10 Chairperson Morris stated that there has been no funds appropriated for this audit
11 and if funds are necessary, they will have to be appropriated in the future.
12
13 Mr. Huffman stated that he feels RP&L has a good shrinkage factor and that it
14 will take a full audit to determine the factor including core samples and survey.
15
16 NESCELLANEOUS BUSINESS
17
18 Councilmember Lemoine moved to add the approval of a consulting firm for the
19 financial audit to the January 6, 1986 agenda, seconded by Councilmember Hankinson
20 and on unanimous voice vote the motion was carried.
21
22 ADJOURNMENT
23
24 There being no further business, on a motion duly made, seconded and passed the
25 meeting was adjourned.
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29 Lynn Nepote Morris, Chairperson
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32 ATTEST:
33 Mary Merchanthouse,"City Clerk
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