VILLAGE OF MORRISVILLE WATER AND LIGHT DEPARTMENT

June 4, 2007

MONDAY 6:00 PM

Water and Light Office

The meeting duly noticed and warned was called to order at 6:05 PM.

MEMBERS PRESENT: Chair: Bourne

Trustees: Wildes, Sargent, DeBor

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

ABSENT: Thompson

GUESTS PRESENT: None

1) PUBLIC MEETING

There were no members of the public in attendance.

2) OLD BUSINESS

Response to Issues raised in letter from ANR – Jim has sent an e-mail to ANR requesting an update but has received no response yet. The Chairman suggested giving them another 10 days before sending an additional email.

Copley Country Club (CCC) – Craig reported that The Copley Memorial Tournament fund-raiser was held on June 2, 2007 and netted $508 for the Amy Wade Fund. The Board reviewed the latest draft of the agreement between the Village and CCC. Craig suggested in section 9 that they change the fee from a fixed rate to any proceeds from the Amy Wade Fund fund-raiser. Trustee Wildes suggested including wording for switching to a set rental fee in case the Copley Memorial Tournament is cancelled. The trustees directed Craig to revise the document and forward it to CCC.

The Trustees discussed providing funds for the remaining application for Amy Wade funds from the Town.

On a motion by Trustee Wildes, seconded by Trustee DeBor, and unanimously approved, the Board agreed to pass along the $508 raised by CCC to the Town via the Amy Wade Fund for tree planting to beautify the northern gateway of the town (Brooklyn Street). The Chairman asked Craig to run a thank-you note in the paper thanking CCC for the tournament and the proceeds, etc.

3) MANAGEMENT REPORT

Jim reported that we found the problem with the vertical generation unit at Cady’s Falls. The turbine was packed full of silt. It has been cleaned out and is up and running.

We had Hartigan camera-ing and vactor-ing sewer transmission lines. One river crossing, which acts like a siphon, was completely plugged and had not been working for years. We may vactor more lines if any money remains in the budget at the end of the year. What was filmed is in good shape. However, we will have some divers look at the concrete cribbing underneath the river crossing to determine if it is eroding. Trustee Wildes asked if this will become part of on-going maintenance plan? Jim replied that it will become part of the maintenance plan. Trustee Wildes asked if the camera, or any camera, could detect stress in the pipe due to the degraded cribbing. Jim replied no because the cameras cannot operate completely under water and that pipe is always full.

The WWTF expansion will need Act 250 review because it is expanding more than 10%. The Chairman asked if Jim foresaw any problems acquiring the Act 250 permits. Jim replied that we will not apply for Act 250 until the project design is about 30% completed.

Penny reviewed the financials from all three Departments with the Trustees. In addition, Penny presented a chart showing customer charges for the IOUs and Coops, as requested by the Trustees. Currently, MW&L charges $6.42 per month. MW&L is in the lower section but the customer charge is one thing the DPS is looking at in regards to our filing for deseasonalized rates. Staff will be meeting with the DPS and will provide an update at the next meeting. Generally, the Trustees stated they were willing to consider increasing the Customer charge and lowering the energy charge.

Trustee Wildes pointed out that water and sewer revenues should be growing but there didn’t seem to be enough accruing from the rate increases. Are we comfortable, cash-flow-wise, making a $4 million investment? Penny replied that she was comfortable but, if necessary, we could implement a series of smaller, incremental rate increases.

Craig provided the financial materials that he received from Oswegatchie for the Board to review. Owegatchie is partnering with Atlantic Power Corporation for generation purchases.

At the FERC meeting held on May 24^th, VELCO turned down Stowe’s counter-proposal. If the issue goes to a FERC hearing, the case could go on for 2-3 years, but the judge was putting a lot of pressure on all parties involved to reach an agreement. Another settlement meeting is scheduled for June 11.

In regards to CVPS calculating load losses, Craig cannot seem to get anyone at CVPS to agree to make the necessary changes now that we’ve moved to open-access. Craig will send a letter to VELCO. MW&L should see the return of approximately $50,000 for the first 6 months of the OATT.

In regards to Vermont Transco, some believe that the municipals do not have the authority to invest in the equity and some believe the municipals do have the authority. Stowe has gotten conflicting answers from Guilliani that we need to have answered to our satisfaction.

The Chairman asked how relations were between Stowe Electric and VPPSA. Craig replied that it looked like they were improving, but issues still remain to be resolved.

Trustee Wildes asked what the HQ Participation Agreement was. Craig replied that it is one contract that ties all the other HQ contracts into one document. However as the HQPA was not kept up to date, then technically we are not in compliance. Reviewing the contract, which is a simple concept, is painful. The conditions of the contract would not change.

4) APPROVE MINUTES OF MEETING HELD MAY 21, 2007.

Craig had two typos. On page two in the next to last paragraph, the last sentence should read “this equipment in 2007.” The other typo was on page three. In section #4, end of first paragraph, there are two periods and should only be one.

Trustee Wildes made a motion to approve the minutes of May 21, 2007, minutes as amended, seconded by Trustee Sargent, and unanimously approved by all present.

5) EXECUTE 2007 SERIES 1 VERMONT MUNICIPAL BOND BANK SALE DOCUMENTS:

The documents were passed around for Board signatures. Penny pointed out that we will create a separate bank account to invest the bond money into to then make the monthly payments from. She also pointed out that the 108C filing was just approved today.

6) AUTHORIZE LIEN OF $411.51 FOR PROPERTY LOCATED AT 1082 STANCLIFF ROAD:

On a motion by Trustee Wildes, seconded by Trustee Sargent and unanimously approved, the Board authorized a lien of $411.51 for property located at 1082 Stancliff Road in Morristown owned by Yaofa Shung.

7) DISCUSS PRIVATE OWNED SEWER LINES

Craig reported he was having a difficult time getting a final signature from Mr. Manosh. He has been in daily contact with Gary Nolan for the last two weeks. He will continue to follow up but is currently not getting any feedback, either for or against.

Craig reported that he and Jim had prepared a packet for Murphy Realty with the Extension Policy. The packet was mailed to him and we are awaiting comments.

8) DISCUSS DPS REQUEST FOR FUNDING PUBLIC ENGAGEMENT PROCESS ON ENERGY:

The State allocated $50,000 to DPS for this project. The DPS has received quotes for $550,000 and want the utilities to ante-up the difference. This process would put MW&L on the hook for approximately $5,000. The Trustees believe it is not appropriate for the DPS to ask the municipals for money for a project under-funded by the General Assembly.

9) REVIEW VPPSA PLANNED PURCHASE STRATEGY:

VPPSA plans in 2007 to implement a planned purchase strategy that involves making future power purchases for a 2-year period. The first few purchases would have little effect on MW&L.

10) WWTF RDA LOAN AND RFP STATUS:

The RDA loan has a June 24^th deadline for comments so the Trustees agreed there is no reason in asking for results until then.

The RFP’s were sent out for engineering services for the WWTF and are due back by June 8^th. Selection criteria is not all based on lowest price but also on quality. Craig asked if the Board wanted involvement in the review. Trustee Wildes stated there was no need unless there were huge discrepancies between bids. Trustee Wildes reminded Craig & Jim that a critical part in review will be the time frame for delivery. Craig and Jim plan to have a recommendation for the Trustees at the June 18^th meeting.

11) PROPERTY MANAGEMENT:

Craig asked the Trustees for guidance on the scope of work for 2007. Trustee Wildes asked if we had forwarded the list of properties onto LEDC yet. Craig replied not yet. Trustee Wildes suggested that we forward the list onto LEDC, let them come to us with their ideas, and that may limit the scope of work. Craig stated he would meet with LEDC to provide them with the list.

12) Other Business

We have been asked by a non-profit group if we would include bill stuffers in our mailings for them. MW&L does not have a policy either for or against stuffers but, historically has not done them unless they were for our own purpose.

On a motion by Trustee Wildes, seconded by Chairman Bourne and unanimously approved, the Board agreed to not begin doing bill stuffers for outside entities.

Trustee Wildes suggested it was time to revisit how we use the Green River funds. The Trustees discussed the ongoing issue of ownership and how to best bring the matter to closure.

The Board reviewed the May 21^st letter from the Patnoes. Craig pointed out that their usage may be well below what they were permitted for but MW&L has no say on that permit number. The Trustees discussed the matter and concluded that ultimately this is Patnoe vs ANR issue not a Patnoe vs MW&L issue. Jim stated that the only issue for MW&L was if we opposed the proposed subdivision.

Craig had a visit from LEDC in regards to renting office space from MW&L. Trustee Wildes asked if they were considering any other locations? Craig said they mentioned a couple of other stops but had no details. The Board felt that if it would benefit our customers, then we should at least look at the possibilities.

Jim reported that an employee had a vehicular accident Sunday morning. The employee had worked mutual aid all night for WEC and fell asleep driving home. He struck a utility pole on Route 12 in Morristown. Luckily no one was hurt but the pick-up was seriously damaged. The insurance adjuster will determine if totaled. Craig stated that he would meet with Jim and Steve Cutler to develop a strategy for balancing employee safety with the need to restore service.

13) ADJOURNMENT:

At 7:56 PM, on a motion by Chairman Bourne, seconded by Trustee Wildes and unanimously approved, the Board adjourned the meeting.

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Dana Wildes, Clerk