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HomeMy WebLinkAboutElectric Board - Minutes - 04/17/1996i Council Liaison: Alan Apt Staff Liaison: Don Botteron Chairperson: Mark Fidrych Phone: 490-7240 (Vi) 223-7140 (H) Vice Chair: Jeff Eighmy Phone: 491-5784 223-9487 A regular meeting of the Fort Collins Electric Board was held on Wednesday, April 17, 1996, in the Light and Power Training Room, at 700 Wood Street, Ft. Collins. BOARD MEMBERS PRESENT: Bill Brayden, Jeff Eighmy, Mark Fidrych, Len Loomans, Barbara Rutstein, BOARD MEMBERS ABSENT: Richard Smart and Jim Welch STAFF PRESENT: Don Botteron, Delynn Coldiron, John DeHaes, Ron King, Jon McHugh, Tom Rock, Rich Shannon, Gwyn Strand Dennis Sumner OTHERS PRESENT: John Bleem and Paul Eckman BOARD LIAISONS: Council Liaison -- Alan Apt Staff Liaison -- Don Botteron 1. APPROVAL OF MINUTES: A Motion was made by Board Member Rutstein to approve the Minutes. Board Member Loomans seconded the Motion. The Motion passed unanimously and the Minutes from the March 20, 1996 meeting were approved. -I- 2. GOVERNANCE: Don provided a recap on the results of the research that had been done on this project to date. He reported on the responses that were received by John DeHaes from the telephone surveys that he conducted with key officials from six of the cities whose charters were reviewed, and had independent boards. He also reported on the responses that were received by Dennis Sumner from the telephone interviews he conducted with several utilities that had governance structures similar to the current structure of Light & Power. Summaries of this information were provided to Board Members. Responses varied greatly from one utility to the next. Some were doing nothing to address the deregulation and competition issues, but others were actively exploring repositioning their utilities in order to meet the demands of this new environment. For those utilities that were proactive on this issue, a common theme was to streamline operations and become as competitive as possible. There was a high level of concern amongst these utilities around cost identification, PILOTS, and governing body relationship issues. There was also general recognition by these utilities that efforts to sell municipal utilities are likely initiatives of competitors. Every utility that participated in the survey recommended that decisions of this magnitude continue to require a vote of the people. Several of the utilities also stressed the need for built in safeguards to assure open and frequent communication between an independent/autonomous board and City Council. Another suggestion was to allow for line -item veto power if City Council has final approval over a budget that is developed by an independent/autonomous board. Board Members briefly discussed this information. They were appreciative of staffs' research efforts. Next, Paul Eckman reviewed the information contained in his memorandum regarding delegating powers to an independent/autonomous appointed electric board. He mentioned that the main thing he found was that the Colorado courts have said that if an elected body delegates authority to a non -elected body, the non -elected body has to in some way be impressed with responsibility to the electorate. Paul gave several examples for how this could be accomplished, including: appointing the Mayor or a Councilmember as one of the members of the independent/autonomous electric board, allowing Council to remove board members either with or without cause, establishing a ceiling on the size of financial transactions that the board could conduct without Council approval, and allowing Council a certain amount of time within which they could veto or ratify board actions. He also mentioned that sufficient standards and safeguards guiding both the legislative and administrative acts of the board should be defined either in the Charter or by ordinance to insure that the board cannot exercise unfettered discretion. There was some discussion on the potential of individual board members being sued based on actions taken by the board. Paul mentioned that board members with decision making authority have a much better risk of being sued. However, City Council has passed an ordinance that states that Council will support Board Members and City employees that are being sued, as long as they are working within the guidelines of the City. -2- • G Next, Board Members discussed the Draft Recommendation that was provided in Board packets. 1. Composition of the board: Board members briefly discussed the options presented. Board Members will choose an option following more in-depth discussion at next month's Board meeting. 2 Qualifications: This language was pulled from the existing City Charter and is the same language used for City Council members. Qualifications for Boards and Commission members as stated in the Boards and Commissions manual, are much more lenient. However, if the Board is going to have similar powers as Council, it should have similar qualifications required of its members. Financial disclosure: This language required that board members be willing to disclose financial information to the public. If the board will be making decisions on bonds, etc., the public has a right to know if there are any financial conflicts of interest. Board members would have to abstain from any decisions or recommendations on issues where they might have a financial conflict of interest. 4. The City Council may remove appointed board members: Current Charter language states that City Council can remove board members at Council's pleasure. Changing the language to state that City Council can remove board members only for cause, makes this a somewhat contentious issue. Board Members leaned toward keeping the current language that states City Council can remove board members at Council's pleasure. Board members shall/shall not receive payment: Board Members looked at three options: 1) no salary or payment for service; 2) same pay as City Councilmembers; 3) one-half the amount paid to City Councilmembers. Current City Charter states that board members work without pay, so this language would have to be revised if one of the pay options were chosen. Councilmembers are currently paid $250/month for regular members and $500/month for the Mayor. The Charter Review Committee is recommending that these amounts be changed to $500/month for regular members, and $750/month for Mayor. Board Members leaned in favor of minimal compensation. There was some feeling that it would be easier to justify devoting more time to utility issues, etc., if board members were paid. Also, there was some feeling that this might help offset personal liability issues. -3- 6. Authority to set electric rates and fees as appropriate in the conduct of its activities: Board Members discussed this issue and agreed that this should be a duty of the independent/autonomous electric board. They thought it was appropriate to add a rescission clause giving Council the authority to veto board actions on this issue. Authority to approve the budget: Board Members discussed this issue and agreed that this should be a duty of the independent/autonomous electric board. They thought it was appropriate to add a rescission clause giving Council the authority to veto board actions on this issue. 8. Authority to hire and fire the Utility General Manager and set salary: Board Members discussed this issue. Generally, in autonomous board situations, the board is responsible for hiring and firing the General Manager, and setting and administering the entire utility pay plan. Administration of the utility pay plan is generally delegated from the board to the General Manager. Doing this would help make it absolutely clear that Light & Power is a separate entity choosing to operate under the City's umbrella, but not an actual City department. It reinforces the board's responsibility for the operation of the utility, with the exception of three or four major issues that would remain in the control of City Council, i.e., budget, rates, condemnation and issuance of long-term debt. Board Members agreed that hiring, firing and setting the salary of the General Manager should be a duty of the independent/autonomous electric board. 9. Authority to adopt administrative policies, purchasing procedures, pay plans and the necessary rules, regulations and procedures which shall govern personnel matters: Board Members discussed this issue and agreed that this should be a duty of the independent/autonomous electric board. 10. Authority to issue long-term debt. Board Members agreed that this should be a responsibility of an independent/ autonomous electric board in accordance with the language that was provided where the Board would give Council 60 days notice of its intent to issue debt, and Council would have a right a rescission where they could veto action of the board on this issue. Is 11. The City's financial director shall be responsible for the investment of Light & Power reserves: This is currently in the City's Charter. This is working well -- things are being handled responsibly and there is value in pooling the City's monies for investment purposes. Board Members were in agreement with this. 12. The Electric Board shall have the authority to enter into joint ventures and partnerships including responsibility for the Platte River Power Authority Organic Contract and contract for electric power and energy: Board Members discussed this issue and were unclear on some of the issues related to this item. Paul Eckman will research this and provide answers to the Board. 13. City Council will/will not retain the right of eminent domain (condemnation): Board Members discussed this issue and agreed that City Council should reserve the right of eminent domain (condemnation). 14. The Electric Board shall be responsible for governance of the City's electric utility plus other functions in the best interest of the utility delegated by the City Council: There was brief discussion on whether or not Charter language should be changed to include energy options other than electricity, i.e., gas, telecommunications, etc., so City Council could delegate responsibilities related to these other energy options to the board, if they desired to do so. 15. Payment in lieu of taxes and franchise fee shall be: Board Members discussed the option of retaining current Charter language on PILOTs and the option of changing current Charter language to specify that PILOTS shall not exceed a total of 7.5% of revenue. 16. The role of the Board shall focus on policy direction and governance: Board Members agreed with this. 17. Retain Article XII, Section 3 of the Charter requiring a vote of the electorate to dispose of electric utility property other than surplus assets: Board Members agreed with this. -5- 18. Require a management audit to be conducted: Board Members discussed this. Management audits lend a significant amount of credibility during transition to an independent/autonomous board. Board Members wanted to see this included as an option for City Council if they ever became concerned about the way the utility was being handled. Board Members liked the idea of having a management audit done after the first three years, and then have one done, at Council's option, perhaps every ten years thereafter. 19. Include a provision requiring any business selling or generating power within the City of Fort Collins to make payments to the City in an amount proportionate to Light & Power's payment in lieu of taxes and services provided. Board Members briefly discussed this issue. Board Members intend to spend the majority of the May Electric Board meeting finalizing a recommendation for the Charter Review Committee based on the information presented above. There was some concern that additional time needs to be spent to better clarify the reason a change in utility governance is necessary. The Board has tentatively agreed to call a special meeting on June 5, to complete this work, if needed. 3. STAFF REPORTS: 1. DSM Quarterly Report: Jon McHugh provided updates on some of the DSM successes there have been over the past few months. He also reported on monies that have been spent from the $500,000 allocated for DSM, including: Some money has been promised as part of the CLIP program; however, City legal staff has informed us that the City cannot make a loan to itself. Jon is working with City legal staff to work out details. $32,000 has been committed for lighting design review so far this year. Jon mentioned that between the lighting reviews that have been completed, and the ones that have been scheduled, we have approximately 1/2 million square feet in progress. The cost effectiveness has been outstanding. Approximately $45,000 has been spent for integrated building design. A good chunk of this was for the new library. A science building at Front Range Community College is underway and it will incorporate some of the same features that were used in the new library. We have come into this project too late to do a full building design in 2. for the science building, but will be able to integrate planned window placement, efficient lighting, etc. $45,000 has been spent on Commercial Energy Code efforts. A majority of this money has been allocated to producing users' guides. A consultant has been hired to do this. Part of this money will also be spent to provide training for the various trades. A $90,000 grant received from the Office of Energy Conservation is being used for Residential Energy Code efforts. A consultant out of Denver has been hired to put together a 100 page user's guide that will include many graphics, etc., so users will not have to wade through excessive jargon. $18,000 has been allocated to CSU to perform energy audits on four large commercial/industrial customers. Platte River Power Authority plans to spend an additional $30,000 to supplement the work we are doing on energy audits. Jon mentioned that an energy audit for the Water Reclamation Plant, one of our largest customers, has been scheduled. Also, he met with Symbios Logic to discuss implementation of the lighting recommendations suggested from their energy audit. This improvement has the potential to reduce Symbios' demand by 75 kW, which could save Symbios approximately $20,000 per year. Symbios is committed to saving another $19,000 per year in water costs by a water conservation idea identified during the energy audit. A more in-depth DSM presentation will be given at the July Electric Board meeting. Telecommunications Update: The Telecommunications Policy has been approved by City Council. Delynn will forward a copy of this to the Board. Seminars: Information was included in Board packets on two seminars: 1) Light Pollution & Visual Trespass; 2) New Opportunities and Trends in Energy Programs and Markets. If any Board Members are interested in attending, they should contact Delynn. 4. INFORMATION REQUESTS: None. -7- 5. OTHER BUSINESS: 1. Light & Power Retirees: Rich recognized Don Botteron and Ron King for their incredible careers at Light & Power. This is their last board meeting. A retirement reception has been scheduled for April 24th at 2:30 p.m. in the Light & Power Crew Ready Room. Board Members were invited to attend. 2. Change in process: Rich reviewed the recent change that staff made in the Board packet process. We are now sending two packets per month so that the information packet comes separately from the packet containing agenda materials. The packet containing agenda materials will continue to be sent out just before the monthly meeting. This change is intended to limit the amount of information received before Board meetings to only those materials that are time -sensitive and related to the current meeting's agenda. Any other time sensitive materials not included in packets will be given out at the meeting. 6. AGENDA: Governance Adjournment: The meeting adjourned at 7:20 p.m. Del Coldiron, Board Secretary 10