VILLAGE OF MORRISVILLE WATER AND LIGHT DEPARTMENT

July 21, 2008

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, Ed DeBor, Keith Thompson, Peter Bourne

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

Guest: Ms. Rhonda Bennett (Union Bank)

1) PUBLIC MEETING:

No members of the public were present.

2) OLD BUSINESS – ENERGY EFFICIENCY AND GREEN RESOURCE INVESTMENT:

Staff reports that not much progress has been made yet on the hydro generation plan. Mr. Cloutier has recommended a microturbine in the bypass at Green River. Staff plans to have further dialogue with Mr. Cloutier to develop recommendations for the 2009 budget. The Board requested an electronic version of his report. Staff plans to look at hydro generation as a separate business unit. MW&L can only get new green credits based upon increased generation above the base 2005 generation numbers.

3) MANAGEMENT REPORT:

Jim reported that we are currently generating 2.3 MW of power due to recent rains. We’re even generating at Green River. We’ve lost all the flashboards on Dam #1. We will not know how many boards on Dam #2 have been lost until flows decrease. The Trustees discussed flashboards and the benefit a rubber dam would offer for aiding generation under these conditions. The Chairman pointed out that rubber dams might not be feasible from a cost perspective alone but when viewed through loss of generation they may be. Trustee Thompson asked why the flashboards were not concrete. Trustee Bourne pointed out that for flood control purposes, the dam can only be so high with concrete. The higher the concrete, the more water you are impounding and the more flooding upstream. Jim pointed out that the leading manufacturer of the rubber bladders used in rubber dams has gotten out of that business. The Chairman asked if a better technology existed instead of rubber. Staff will review available options.

Blow & Cote was the low bidder for the Plant #2 headgate project.

Had two minor outages this weekend, which was considerably better than a lot of neighboring utilities. In fact, we sent a crew to assist VEC in restoration efforts.

Trustee DeBor verified that the hole in the new pavement on Elmore Street was ours. A curb valve broke trying to turn it back on.

Trustee Bourne asked if it was feasible for us to go all the way to Underhill to set a pole. Jim assured him that we are being paid to cover our costs plus.

The Chairman asked how power prices were. Jim replied they are very high (16¢/kwh). Vermont Yankee is scheduled to be back on line tomorrow but that will probably not alleviate the prices.

Penny informed the Board that we will no longer accept post-dated checks.

Penny recently met with a web designer. A new site will allow us to roll out E-Care. This will allow customers to view their utility bills online and will allow them to pay online.

The Chairman asked who our financial software was through. It is through Harris but they will no longer be enhancing it. Their new program is Cayenta. Harris has a software for life program so MWL would only pay for implementation and training if we chose Cayenta. Penny recently attended a demo at VELCO on Great Plains software and would like a demo directly from Great Plains themselves. Training and implementation will be the biggest costs. The Chairman asked what the monthly support fees were. Penny has not discussed this with either company.

The Chairman asked how accounts receivable were doing. Penny informed him that we will be aggressively following the DPS rules of disconnect during winter months, which begin November 1^st.

The mediation on the CVPS/Northern Loop loss will be tomorrow at the Hilton from 9AM to 6PM. There is not much expectation that a settlement will be reached and MW&L has informed the DPS and mediator that if we don’t have a significant offer on the table by the end of the day that we would be filing with FERC.

Trustee Bourne asked if there had been any further discussions with Hyde Park Electric. Craig said no and he still has to come up with a value for representing them at VPPSA. Craig has some hesitation about the arrangement but is willing to give it a go and will revisit the arrangement if he feels uncomfortable.

6) APPROVE BOND ANTICIPATION NOTE FOR WWTF PROJECT:

Ms. Rhonda Bennett of the Union Bank (UB) arrived for this item with bond and grant anticipation notes for the Board to sign. UB will lend MW&L money and we will invest it in a CD which would pay more in interest that loan interest. Rhonda reminded the Board that interest on municipal CD’s was tax exempt and that the interest from the CD will be reinvested in the WWTF project. MW&L is mandated by RDA to use all loan money first before using any grant money. Arbitrage will provide cost savings from the loans. Paul Guilliani has reviewed and approved this

On a motion by Trustee Bourne, seconded by Trustee Thompson and unanimously approved, the Board signed the Bond Anticipation Note for the WWTF project.

7) APPROVE GRANT ANTICIPATION NOTE FOR WWTF PROJECT:

On a motion by Trustee Bourne, seconded by Trustee Thompson and unanimously approved, the Board signed the Grant Anticipation Note for the WWTF project.

4) APPROVE MINUTES OF MEETINGS HELD JULY 7, 2008:

On page five, instead of “Trustee Thompson questioned putting our money into a project in Ludlow” should read “Trustee Thompson questioned possibility/feasibility of putting money into the project”. Instead of “we own a piece of the project and that we get all the benefits that Ludlow gets” should read “we own a piece of the project”. On page two, “Sean Kuney” should be “Shaun Kuney” and he offered repayment of $100/month, not $300/month.

On a motion by Trustee DeBor, seconded by Trustee Bourne and unanimously approved, the Board tabled the minutes of the July 7, 2008, regular meeting.

5) APPROVE REVISED FINANCIAL POLICY:

Craig would like to modify this agenda item to read “discuss” instead of “approve”. He wants some flexibility for staff to manage budget figures as long as they are still within the Capital Budget. He is not looking for approval to go beyond the budget. Trustee DeBor stated he is against it. After further discussion, staff recommended that the language could be modified to clarify the Board’s intent and clarification language will be offered for consideration of the Trustees at the next meeting. Trustee Sargent reminded everyone that they are supposed to review the financial policy once a year.

8) UPDATE OF WWTF PROJECT:

The project is well underway. Jim passed around photos of progress so far. CCS is driving sheathing into the bank for the new aeration tank and the foundation for the ultraviolet building. They have hit ledge in several areas, which was expected and this will require blasting. The waterline on Bridge Street will be tapped this Wednesday. Jim met with Leo Trombley in regards to a Quit Claim Deed from 1997 that was never filed. Leo’s land actually encompassed part of the plant. That deed has now been filed. We had Allen Newton blaze the property lines. Craig recommended that the Board plan a tour of the construction project as part of an upcoming meeting. The next project meeting is scheduled for August 12^th.

We are also looking at a low-head generator for the output of the new plant.

The Board asked if there had been any formal response from ANR to the maintenance plan submitted in 2005. There has not but we did submit an emergency response plan for the system which has been reviewed by ANR. Hiring EarthTech also helped satisfy ANR along with the Village’s commitment to upgrade the plant.

9) UPDATE OF WATER METER PROJECT:

Staff is currently matching water customers with sewer customers and we are looking at approximately 870 water meters so far. During the week of August 4^th, surveys of water services inside homes will commence and should take about 10 minutes each.

10) CAPITAL BUDGET UPDATE:

In the 2008 capital budget, $300,000 was budgeted for the head gates at Plant #2 and $200,000 for the head gates at Plant #1. The bid for Plant #2 alone came in at $504,000. Staff would like to defer the head gate project at Plant #1 until 2009 and transfer the $200,000 budget to the Plant #2 project. Trustee Bourne asked if the lack of operational head gates affected generation at Plant #1 and if so what the value of the generation is. Staff replied the project was needed from a safety standpoint. In addition, Jim pointed out that that we have not done the river permitting for Plant #1 and we would end up doing the work in the winter. If Plant #2 is approved, we can begin permitting for Plant #1 immediately and have all the pieces/parts in place and ready to go in 2009.

On a motion by Trustee Bourne, seconded by Trustee Thompson and unanimously approved, the Board authorized the expenditure of $504,000 to repair/replace the racks at Plant #2, authorized deferring Plant #1 to 2009, and authorized deferring the surge tank head gates at Plant #1 until 2009.

Jim would like to replace our radio equipment, which is included in the budget. VELCO is working on a statewide initiative and MWL is waiting for the outcome before it can make changes. We will need to change frequencies by 2010 because of FCC requirements for narrow banding.

11) OTHER BUSINESS:

The Chairman has been investigating the finances of Efficiency Vermont with no luck but was informed the best way to get that information was to request the EV’s financials from the DPS with a copy of the request to the Attorney General’s office .

On a motion by Trustee Bourne, seconded by Trustee Thompson and unanimously approved, the Board authorized the Chairman to ask the DPS and the Attorney General’s office to obtain EV’s financials.

The Board asked for further details on the trapping request on MW&L’s land. The targets are beaver, mink, fisher, and muskrat and the seasons vary but are mostly from October through March. The Trustees discussed the request and concerns regarding liability and perceived preferential treatment and decided that they want to revisit the policy for the use of all MW&L lands.

On a motion by Trustee Thompson, seconded by Chairman Wildes with Trustee Sargent and DeBor favoring and Trustee Bourne opposing, the Board denied the request to trap on MW&L property.

The meeting on a proposed new industrial park with Dave Yacavone, Ken Harvey, and Art Sanborn was productive. Craig’s task is to get cost estimates to get a sewer line across the bridge to access Ken’s property, as well as water and electric. The Chairman agreed that a housing component will open up more grant money. Trustee DeBor reminded the Board that this was the one parcel that they did not have voter permission to sell and the efficacy of the project would be based on selling lots, not leasing them.

Craig discussed the TSSA. He feels that we need to work to modify the boundary and need to decide what to do to mitigate the impact on prime agricultural soils. The Chairman replied that Chip Sawyer had language on how to deal with this but they needed to find a compromise. Craig suggested deferring any future joint board meetings until staff can iron out the details. The Board agreed.

On the CCS development, Craig received a call from Ed Stanak. Ed sees this as the first case for MW&L to file an amended Act 250 permit. Ed stated he expects the parcel may contain prime agricultural soils and MW&L will need to explain how they (or the developer) plan to mitigate the impact. Trustee DeBor questioned why it was our responsibility to do an amendment. Craig replied that our WWTF Act 250 permit requires MW&L to be involved at least as a co-applicant. The Trustees discussed that it is important for the Town to be involved and directed Craig to discuss with the Town being a co-applicant with the Village and CCS.

Trustee Thompson asked several questions. He asked if our logo could be redesigned and where the renewable portfolio standards come from. He still has an interest in establishing a fund to help low income households this winter. He would like to form an energy committee with the public similar to the Union Bank’s Green Lending Program. He asked that these items be included on the agenda for the next meeting.

12) EXECUTIVE SESSION:

Not required.

13) ADJOURNMENT:

At 8:15 PM, on a motion by Chairman Wildes, seconded by Trustee Bourne and unanimously approved, the Board adjourned the meeting.

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Tim Sargent, Clerk