VILLAGE OF MORRISVILLE WATER AND LIGHT DEPARTMENT

January 5, 2009

MONDAY 6:00 PM

Water and Light Office

The meeting duly noticed and warned was called to order at 6:00 PM.

PRESENT:

Trustees: Dana Wildes, Tim Sargent, Peter Bourne, Ed DeBor and Keith Thompson.

Staff: Craig Myotte, Jim Fontaine, Penny Jones, Linda Osgood

GUESTS:

Ellen Burt & Edward French (Stowe Electric)

1) PUBLIC MEETING:

No members of the public were present.

2) MEETING WITH REPRESENTATIVES OF STOWE ELECTRIC:

The two utilities, mindful that the Lamoille County has more municipal utilities than any other county, are looking for ways to reduce costs through functional consolidation. There was great cooperation in the settlement of the 115 KV line construction costs and the CVPS line loss issue. Morrisville raised concerns about VPPSA’s exit fees and the energy losses Morrisville is incurring for wheeling power across its system for others without compensation.

Both utilities feel that there are many opportunities for functional consolidation of people, equipment, inventory, purchasing, billing, after hours call outs, and computer accounting software. In preparation, both utilities need to exchange their IBEW contracts, organizational charts, and summaries of major field equipment. Of course a confidentiality agreement would need to be entered into first. It was suggested that, instead of trying to consolidate in so many categories, we focus on one area and work it all the way through.

3) CURRENT PRIORITY PROJECTS:

Craig briefly updated the Board on the status of the current priority projects. Current priority projects include - Line Purchase, Hydro Review Proposals, 2009 Electric Budget (Approve), Water Storage Proposals (Review/Award), SSMA (WWTF Act 250 Permit Conditions), FERC Part 12 Dam Safety Inspection, Website Redesign, Sale of Zack Woods Property, Bradley Lawsuit, Rate Forecast for Electric, Water, Sewer, Review Insurance Coverage, 2008 Audit, IBEW Contract Negotiations.

4) MANAGEMENT REPORT:

The crews learned a lot from the ice storms. Holden, Massachusetts, had done very little ROW clearing. Our crews saw some poor construction practices. Our crews alone installed four miles of wire in Holden.

Penny has been working on budgets. We are still waiting for an answer from VPPSA on net metering.

Craig has a new power supply budget to review.

5) APPROVE MINTUES OF MEETING HELD DECEMBER 15, 2008:

Chairman asked that the word “electric” be added before “facility purchase” in section #10. The Board asked that “from Green Mountain Power” be struck from the last sentence under Executive Session.

On a motion by Trustee Thompson, seconded by Trustee Bourne and unanimously approved, the Board approved the minutes of the December 15, 2008, regular meeting.

6) SIGN A LIEN ON PROPERTY LOCATED AT 3869 LAPORTE ROAD (SHED) AND 3871 LAPORTE ROAD (RESIDENCE) FOR A TOTAL OF $210.59:

On a motion by Trustee DeBor, seconded by Trustee Sargent and unanimously approved, the Board signed a lien on property located at 3869 Laporte Road (shed) and 3871 Laporte Road (residence) for $210.59 plus recording fees of $16.00 for a total of $226.59.

7) UPDATE ON WWTF PROJECT:

The control building is being heated. Gravel Construction continues to work on water and sewer line. Jim has not received an updated schedule for a while. He knows that they had fallen behind schedule and were able to make a lot of it up but he is not sure where they stand now. He needs to get a good idea of Keymont’s work plan for the winter because he knows that Gravel will be shutting down soon. To-date the project is within budget. The Chairman verified that if Keymont leaves the construction site in such a condition that things get damaged due to freezes and thaws that it is not MW&L’s responsibility.

8) UPDATE ON WATER METER PROJECT:

Ti-sales is correcting a problem with the distance at which the handhelds can pick up a reading. The loaner handhelds had a much bigger range that the ones we are buying.

If they are to keep to their schedule, they will need to install 40 water meters a week to finish by April. To date, they have installed approximately 40 total. Up Country Plumbing is ready to just go door-to-door. Trustee Bourne suggested a bill insert or press release urging cooperation. He also recommended they start using local plumbers to catch up.

9) REVIEW DRAFT EXPENSE & CAPITAL BUDGET FOR 2009:

The Electric budget was deferred to the end of the budget discussion so the Board could concentrate on Water & Sewer. Trustee Bourne verified that metered water rates will not go into effect until 2010. The cost of chemicals has doubled and the standby generator at Well #3 needs work. Penny reminded the Board that the revenue was based on 2008 revenue with zero growth, per their instructions.

On a motion by Trustee Bourne, seconded by Trustee Thompson and unanimously approved, the Board approved the expense and capital budgets for 2009 for the Water Department.

On the Sewer side, Penny reminded the Board that the revenue was based on 2008 revenue with zero growth. Even after taking in account a 7% rate increase, the Sewer expense budget shows a $33,000 loss. Trustee DeBor asked if anything can be cut to break even. Penny replied that fuel and electricity may be too high but the administrative salaries and benefits were up because we are allocating more time. The Sewer capital budget is not a concern with bond money available. The Chairman asked if it would be worth the time to bid out the operations of the plant to someone else other than Earthtech. Jim reminded the Board that in the middle of a $6 million upgrade is not the time to change operators.

On a motion by Trustee Sargent, seconded by Trustee DeBor and unanimously approved, the Board approved the expense and capital budgets for 2009 for the Sewer Department.

On the Electric side, the draft budget shows a loss of $330,000 but cash flows show a loss of $560,000. We need to get a handle on the increase in transmission fees. Trustee DeBor questioned why, when all other commodities have tanked, purchase power is still going up. Further discussion on the Electric budget was tabled until the next meeting.

The Board would be interested in seeing an analysis of hydro production versus rainfall in 1994 compared to 2008. They question if the addition of even a single shift of plant operators might increase production. Our long-time consultant, Bill Clewes, agrees that MW&L has lost our focus on generation.

10) OTHER BUSINESS:

The Board meeting dates for 2009 were reviewed with no comments.

Darrow Mansfield had asked for, and received, a deferral on two lots off Cottage Street to hook to sewer. He is now looking for additional deferrals for more lots that are outside the 250’ connection zone. The Chairman stated that, as of right now, the regulation reads that you only need to connect if you are within 250’. New regulations could require connection if within the SSMA. Trustee Thompson had no problem with on-site septic. Trustee DeBor stated that going forward they would have to be careful. Trustee Bourne recommended we get a legal opinion on how to respond.

The letter to the Patnoe’s was mailed 12/30/2008. Ernie may attend the next meeting.

Craig is looking for a volunteer for the upcoming IBEW negations. Trustee Bourne was volunteered.

11) EXECUTIVE SESSION:

Not needed.

12) ADJOURNMENT:

At 8:45 PM, on a motion by Trustee Bourne, seconded by Trustee Thompson and unanimously approved, the Board adjourned the meeting.

___________________________________

Tim Sargent, Clerk