MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT. March 27, 2012

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1 Approved by the Board of Commissioners on MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT The Board of Commissioners met in the Boardroom of the Administrative Offices, 1232 Haco Drive, Lansing, Michigan. Chairperson Sandra Zerkle called the meeting to order at 5:30 p.m. Present: Absent: Commissioners Margaret Bossenbery, Dennis M. Louney, Anthony McCloud, Marilyn Plummer, David Price, Cynthia Ward, Tracy Thomas and Sandra Zerkle. Commissioner Tracy Thomas. The Corporate Secretary declared a quorum present. Commissioner Marilyn Plummer led the Pledge of Allegiance. APPROVAL OF MINUTES Motion by Commissioner Price seconded by Commissioner Louney to approve the minutes of the Regular Board Meeting minutes of January 24, Action: Carried unanimously PUBLIC COMMENTS MEMBERS OF THE PUBLIC ARE WELCOME TO SPEAK TO THE BOARD ON ANY AGENDA SUBJECT. ANYONE WISHING TO COMMENT ON ANY MATTER NOT ON THE AGENDA MAY DO SO IMMEDIATELY PRIOR TO ADJOURNMENT. There was no Public Comment. COMMUNICATIONS a. Letter submitted by James Chiodini of White, Schneider, Young & Chiodini to LBWL management regarding health care costs to retirees. Received and Place on File COMMITTEE REPORTS COMMITTEE OF THE WHOLE February 14, 2012 The Committee of the Whole of the Lansing Board of Water and Light met at the Executive Offices, Lansing beginning at 5:10 p.m. on Tuesday, February 14, 2012.

2 Page 2 of 8 Committee Chair Louney called the Committee of the Whole meeting to order and asked the Corporate Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Dennis M. Louney, Marilyn Plummer, Cynthia Ward and Sandra Zerkle. Absent: Commissioners Anthony McCloud, Tracy Thomas and David Price Public Comments There was no Public Comments Approval of Minutes Motion by Commissioner Ward, seconded by Commissioner Bossenbery to approve the Committee of the Whole meeting minutes of January 10, Action: Motion Carried REO Town Update (Informational Only) General Manager Lark stated that the REO Town project is on time and on budget and beginning at approximately 5:30 a.m. on February 15, 2012, 1,300 cubic yards of concrete will be poured at the REO site. The concrete will serve as the ground floor of the facility for Board of Water & Light s combined cycle, cogeneration plant. Also on February 17, 2012 the tiles for the Depot roof will begin to be placed on the facility. On Monday the 19 th the first steel girder will go up at 10:00 a.m. Wise Road Plant Update (Information Only) General Manager Lark stated that his Administration has heard from FTC&H Consultants and the Board s own experts regarding damages to the Wise Road Water Plant. The damages will be paid for by FM Global, the Board of Water & Light s insurance carrier, less a $500,000 deductible. The estimated date for completion of repairs in the Wise Road facility is March There will be a lawsuit by FM Global against the chlorine carrier and preliminary discussions indicate that FM Global will be pursing at that time the Board of Water & Light s claim for recovery of its deductible. Lead Pipe Replacement and CSO Update (Informational Only) General Manager Lark stated that lead pipe replacement is on schedule and is estimated to be completed in All high risk customer services have been completed. Regarding the Combined Sewer Overflow (CSO), there is one CSO project slated for this year and none next year; however the budget does call for a ramping up beginning in Additional Information and Updates provided by General Manager Lark An ADDY Award was presented to graphic artist Chris VanWyck, for his work on the Board of Water & Light s 2011 Chili Cook-Off Poster. The Board of Water & Light will be receiving the RP3 Reliable Power Award at the Platinum level. This award is presented by the American Public Power Association (APPA) and is in recognition of providing customers with the highest level of reliability. A letter of appreciation to General Manager Lark from Jamie Zimmer of Central United Methodist Church for prompt assistance with their heating and cooling system issues. General Manager Lark thanked Dick Peffley, Executive Director of Water Operations and Special Projects, for his assistance with this matter.

3 Other Page 3 of 8 In honor of Black History month the Board of Water & Light and its Inclusion, Equity and Diversity Council will be hosting a trip to the Charles H. Wright Museum of African American History on Saturday, February 25, 2012 from 8:00 a.m. to 4:30 p.m. The museum is located at 315 Warren Avenue in Detroit. Everyone is invited to attend. On February 29, 2012 there will be a Celebrate Differences in the Work Place panel discussion. This discussion will be moderated by General Manager Lark and closing remarks will be provided by Mr. Ronnie Byrnes, Business Manager of Local 352. General Manager Lark announced that it is hoped that Diversity Training for all Board of Water & Light employees will be completed by the end of this fiscal year. General Manager Lark announced that Mark Nixon, Communications Director, will be retiring on March 16, 2012 and that Stephen Serkaian has been retained on contract in the Communications Department. Chair Zerkle thanked General Manager Lark and his Administration for their work with the Central United Methodist Church. Vice Chair Louney thank General Manager Lark and his Administration for all of their hard work. Absence Motion by Commissioner Zerkle seconded by Commissioner Plummer to excuse Commissioners Anthony McCloud, David Price and Tracy Thomas from tonight s meeting. Action: Carried Unanimous Adjourn On Motion by Commissioner Ward, seconded by Commissioner Plummer, the meeting adjourned at 5:39 p.m. Respectfully Submitted Dennis M. Louney, Chair Committee of the Whole FINANCE COMMITTEE February 14, 2012 The Finance Committee of the Board of Water and Light met at the Executive Offices, Lansing beginning at 5:40 p.m. on Tuesday, February 14, Finance Committee Chairperson Margaret Bossenbery called the meeting to order and asked the Secretary to call the roll. Present: Commissioners Margaret Bossenbery, Dennis M. Louney, Marilyn Plummer. Alternate Committee member Sandra Zerkle was present. Also present was Board member Cynthia Ward. Absent: Commissioner David Price Public Comments There were no public comments.

4 Approval of Minutes Page 4 of 8 Motion by Commissioner Plummer, seconded by Commissioner Louney to approve the Finance Committee meeting minutes of January 10, Action: Carried unanimously. Quarterly Financial Update General Manager Lark provided a quarterly financial update that included information relative to Fiscal Year to date of December 31, 2011 for Electric, Water, Steam and Chilled Water services. (Combined Utility Financial Report is included in the Finance Committee packet of and is available for viewing in the Office of the Corporate Secretary.) Internal Audit Status Update Internal Auditor Phil Perkins presented a brief overview of : FY2012 Audit Plan Progress Procurement Complete, Final Report Issued Payroll Complete, Final Report Issued Capital Assets in progress, 25% complete Billing in progress, 25% complete Surprise Cash Count #1 Complete Remaining FY 2012 Activities Complete Billing & Capital Assets Audits Surprise Cash Count #2 IT Preliminary Risk Assessment/Planning for future IT Audits External Peer Review (tentatively scheduled for April 30 May 4, 2012) Annual Audit Planning & Risk Assessment for FY 2012 Excused Absence

5 Page 5 of 8 Motion by Commissioner Louney seconded by Commissioner Plummer to excuse Commissioner David Price from tonight s meeting. Action: Carried Unanimous Other None Adjourn On Motion by Commissioner Louney, seconded by Commissioner Plummer the meeting adjourned at 5:53 p.m. Respectfully submitted Margaret Bossenbery, Chair Finance Committee HUMAN RESOURCE COMMITTEE March 22, 2012 The Human Resource Committee of the Lansing Board of Water and Light met at the Board of Water & Light s Board Room, 1233 Haco Dr., Lansing, MI, at 4:00 p.m. on Thursday, March 22, Human Resource Committee Chairperson Tracy Thomas called the meeting to order and asked the Secretary to call the roll. The following members were present: Commissioners Tracy Thomas, Anthony McCloud, Cynthia Ward and Sandra Zerkle. Alternate Committee members present: Commissioners Dennis M. Louney and Marilyn Plummer. Also present were Board members Margaret Bossenbery and David Price. Absent: None Public Comments Ron Byrnes, Business Manager of Local 352 stated his concerns regarding consolidation of services between the City of Lansing and the Board of Water & Light. He questioned how the word consolidation was being defined. Mr. Byrnes stated that the City Charter supports the Board as being an autonomous and selfgoverning agency and asked that the Board of Commissioners please take that information into consideration. Joe Graves of 3114 S. Deerfield Ave., Lansing, stated that he served two terms on the Board of Water & Light Board of Commissioners and that he served on the Charter Commission that wrote the current operating Charter. He stated concerns about the consolidation of the Board of Water & Light and City of Lansing and that the Charter is very clear about the authority and autonomy of the Board of Water & Light. He said during deliberations while establishing the current Charter it was recognized that is was imperative that the independence of the Board be maintained and that the Board be isolated from any political considerations and political involvements. Approval of Minutes Motion by Commissioner Zerkle, seconded by Commissioner Ward to approve the Human Resource Committee meeting minutes of March 22, Action: Carried unanimously.

6 Page 6 of 8 Health Care (Information Only) General Manager Lark stated that at the last two Committee of the Whole (COW) meetings there had been discussion regarding health care and that he would give his recommendation. He stated that the decision regarding this matter needs to be made by June 30 th, which is the end of the Fiscal Year. He will be bringing this matter to the attention of the Committee of the Whole at its May, 2012 meeting. General Manager Lark stated that there are three options pertaining to Public Act 152 of ) The hard cap, which means we limit the expenditures to a certain amount. 2) 20% Premium Co-Pay, instead of the current 5% premium co-pay and that requires a majority vote. 3) 2/3 vote for any other percentage less than 20%. General Manager Lark spoke about Principles of Gradualism. He said that he would recommend a 10% Co- Pay. He said that if the Board follows this recommendation it will have to be evaluated every year. A 10% increase would be a $34.00 per pay period increase for employees, After a lengthy conversation Board Chair Sandra Zerkle and Human Resource Chair Tracy Thomas stated for the record that they would not support the hard cap and that 10% is their preference. General Manager Lark stated that bargaining employees would not be affected immediately because the statute specifically preempts them during the pendency of their contract, which goes through the end of October. They will be affected after November 1 st. Consolidation (Information Only) General Manager Lark stated that there has been discussion about consolidation between the City of Lansing and Board of Water & Light. Because this issue has come up recently he would like to share some of the things that the Board has done in cooperation with the City. General Manager Lark stated that working cooperatively with the City of Lansing is a very good thing to do and plans to continue with these efforts. He stated that he always looks to two things when deciding whether to work cooperatively. The first question that he asks himself is - Is there a savings to the Board of Water & Light and the City of Lansing? Meaning is there a cost reduction or revenue enhancement. Is there something good in it for the Board of Water & Light? The second question is - Will it compromise in any way the Board of Water & Light s operational integrity? General Manager Lark stated the following is a list of cooperative agreements that the Board of Water & Light has in place with the City of Lansing: Equipment arrangement with the City of Lansing Inspection of Bucket Trucks Emergency Calls Dick Peffley, Executive Director of Water Operations and Special Projects, leading the City s effort to build a new garage The use of Board of Water & Light electricians Sewer, collections and billings

7 Page 7 of 8 General Manager Lark stated that there have been some conversations with officials from the City of Lansing and the Board of Water & Light is exploring those with an optimistic attitude in the hope that we can get something done that will save the City and the Board of Water & Light money and will not cede operational control. General Manager Lark stated that saving is very important to the Board of Water & Light at all times, because the lower we can keep our costs the easier it is to maintain our already low rates for our customers. Chair Zerkle stated that she appreciates Mr. Lark s efforts. She said as Commissioners they are all concerned about the integrity of the Board. She asked that Mr. Lark keep the Board informed where necessary as this situation progresses and they will certainly do whatever is needed to support and meet his objectives because they are the Board s objectives too. Human Resource Chair Thomas stated that communication is a big deal and before this meeting there was a lot speculations and this meeting has shed light on some of those things, this meeting also erased some of the questions that are being asked. Finally this meeting also promotes transparency. Other There being no further business, the Human Resource Committee meeting adjourned at 4:52 p.m. There were no Manager s Recommendations There was no Unfinished Business There was no New Business There were no Resolutions for Action. Respectfully submitted, Tracy Thomas, Chair Human Resource Committee MANAGER S RECOMMENDATIONS UNFINISHED BUSINESS NEW BUSINESS RESOLUTIONS MANAGER S REMARKS General Manager Lark stated that the Wine and Cheese Dancing with the Starz Extravaganza or Pennies for Power fundraiser for the Capital Area Community Services was a tremendous success with $10,000 being raised. General Manager Lark thanked Chair Sandra Zerkle who came up with the idea for this event. He also thanked the dancers, the committee and all of the volunteers that helped make this event a success. General Manager Lark stated that recently his Administration issued bonds for the purpose of refunding BWL's 2002A Bonds that are callable on July 1, The bond sale has already been done and there

8 Page 8 of 8 was a $2.7 million net present value savings. General Manager Lark thanked his financial team for all of their hard work. General Manager Lark thanked General Counsel Brandie Ekren for her work on the General Motors bankruptcy matter, which resulted in approximately a $2 million recovery. General Manager Lark stated at the request of Chair Zerkle he wrote a letter to Senator Stabenow regarding the FRIB. General Manager Lark stated that the Board of Water & Light received a letter from Traverse City Light and Power thanking the Board s crews for their assistance during the March 3, 2012 storm. General Manager Lark spoke about the Diversity field trip was recently taken to the African American Historical Museum. He stated that it was fun and there was an attendance of about 100 people. Also there was a Diversity Panel in which he moderated that included 4 panelists from diverse backgrounds that talked about their life experiences. He said that there has been very good feedback on this tremendous event. He thanked Ron Byrnes for his participation. COMMISSIONERS REMARKS Chair Zerkle stated that the Wine and Cheese Extravaganza was superb. The dedication of the dancers was wonderful and it was a great effort on behalf of the Board of Water & Light. Also the Commissioners met the 1 st Step students and as always they are excited to be taking part in this program. This is a tremendous program at the Board of Water & Light and I would love to see it expand. Since the 4 year inception of this program there have been 23 kids hired out of 40 in one capacity or another. Commissioner Louney thanked Calvin Jones, Roberto Hodge, Pat Turner, Jon Ebe and Jan Nelson for their assistance with a tour of the Eckert Station for a local Boy Scout troop. He said the Boy Scouts really enjoyed their tour. There was no Public Comment PUBLIC COMMENTS EXCUSED ABSENCE On motion by Commissioner Price, seconded by Commissioner Plummer to excuse Commissioner Thomas from tonight s meeting. ADJOURNMENT On motion by Commissioner Price, seconded by Commissioner Plummer the meeting adjourned at 6:50 p.m. M. Denise Griffin, Corporate Secretary Preliminary Minutes (Electronic) filed with Lansing City Clerk: April 5, 2012 Final Approved Minutes (Electronic) filed with the Lansing City Clerk: May 22, 2012