VILLAGE OF MORRISVILLE WATER AND LIGHT DEPARTMENT

November 17, 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 and Peter Bourne.

Staff: Craig Myotte, Jim Fontaine, Penny Jones

1) PUBLIC MEETING:

Craig stated that he had drafted a letter to the Harris’ to provide them with a written response that they requested. The Trustees had no comments on the letter. Craig will proceed to mail it out to the Harris’.

2) CURRENT PRIORTY PROJECTS:

Craig reported the following are the top priority items currently in front of staff: Line Purchase, Water Storage RFQ, Hydro Assessment Review RFQ, 2009 Budget (capital and expense), 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.

3) MANAGEMENT REPORT:

The new hydraulic unit at Green River has been installed and tested. We will conduct a new capability audit test as soon as possible. Plant #2 racks won’t be delivered until the second week in December. Unit should be back on line in early 2009. Overall the actual generation level for 2008 will be in excess if budget by 1,000,000 kWhs or 11% due to higher than normal precipitation. Expect overall positive benefit in power supply costs. Jim also reported that the sewer line river crossing repairs have been completed and Terry Judkins has been lined up to complete drainage repairs on our Zack Woods property.

Penny reported that she is working with staff on process of giving winter disconnect notice and communicating with customer who was not being billed for water services. In addition, Penny reported that she received insurance rate information and is working on the 2009 budget. VPPSA is suppose to have the power supply budget to us this week. The Trustees asked what would be included in the report. Craig stated he would review the draft format with the trustees at the next meeting.

Craig reported that he is still working on ways to reduce costs with Hardwick and met with Dave Hallquist of VEC to also discuss interest in cost reduction effort and their R&D gasification

project. The Trustees had a few questions regarding Hyde Park that staff responded to. Craig reported that the GMP line purchase and project 10 continue to occupy a significant amount of time.

Craig handed out a summary to respond to Trustee Bourne’s question regarding the CVPS loss settlement and reviewed the summary for the Trustees. Trustee Thompson asked about the gasification project and the Trustees had a brief discussion with staff about the gasification project.

4) APPROVE MINUTES OF MEETING HELD November 3, 2008:

Trustee DeBor stated that the dollar amount and following sentence under 9) Other Business regarding the Zack Woods property need to be removed and replaced with “less than expected.” On a motion by Trustee Bourne, seconded by Trustee DeBor and unanimously approved, the Board approved the minutes of the November 3, 2008, regular meeting as modified.

5) Approve Revolving One-Year Loans (Trucks #2 & #9):

On a motion by Trustee Bourne seconded by Trustee Thompson and unanimously approved, the Board approved the revolving one-year truck loans and signed the loan documents.

6) UPDATE OF WWTF PROJECT:

Jim reviewed the minutes of the WWTF Meeting No. 4. Keymont has successfully completed the water test of SBR #2. They continue to complete minor crack repairs and grinding and patching of the tank walls. Backfill around the SBR tank is 40% complete. The SBR Control basement and wetwell walls along with the majority of the foundation walls have been placed. The Influent Valve Bldg. structure has been erected and enclosed ready for roofing. The access road rough grading is approximately 50% complete. Keymont plans to pour the suspended slab for the SBR Control Building basement later this week. They will then fill the wetwell for a water leakage test. Backfill around the structures will continue. Keymont anticipates pulling the temporary sheeting within two weeks. The metal roof on the UV Building and Influent Valve Building will be installed. Electrical rough-in at the UV, Influent Valve and SBR Control slab-on-grade will be completed.

7) UPDATE OF WATER METER PROJECT:

A total of 119 meters have been installed to-date (59 change outs and 60 out- ins). Up Country P&H will continue to install meters with a two-person crew for the foreseeable future. Ti-Sales will prepare a schedule update that will project the completion based on the above. MWL discussed several concerns at the last monthly meeting regarding coordination and trying to stay ahead of the meter installation to both locate and exercise curb stops in case there is a problem with the water shutoff at the service entrance. In addition, MWL stated that radios for the water meters should be located outside the structure if at all possible. Up Country needs to confirm that the water is running and that the water line is properly flushed before leaving each installation. In one instance

last month, MWL had to replace a water service from the curb stop to the house because a service line broke at the slab when installing the meter. MWL has tracked the cost incurred for this expense. MWL and Ti-Sales agreed to review everything at the end of the project to make appropriate cost changes to the contract. Software training will be occurring on November 24.

8) REVIEW POWER SUPPLY CONTRACTS:

The Trustees discussed the cost overrun of Project 10. VPPSA provided responses to additional questions from the trustees. The Trustees discussed past and current cost and market projections for the project. The Trustees are concerned that the new market projections appear to be inflated to keep the project viable. The Trustees are concerned with the accuracy of the cost estimates and suggested VPPSA consider getting another independent review of the cost estimates. In addition the Trustees discussed options they might consider for the project.

Discussion on power supply contracts was deferred to Executive Session.

9) OTHER BUSINESS:

Craig reported that a letter had been sent to Ed Stanak. We have not heard back anything from Mr. Stanak yet.

The Trustees discussed the Zack Woods appraisal. The final appraisal value came in below the Trustee’s expectation. Trustee Bourne suggested Craig contact Forest & Parks to get a list of parcels recently purchased. The Trustees want to make sure we get fair market value for the parcel.

Craig reviewed power supply cost, energy, demand and hydro Key Results Indicator (KRI) charts. Penny reviewed the Accounts Payable chart.

The Trustees discussed a summary of rate increase and mitigation strategies proposed by staff. Penny handed out rate forecast summaries for water and wastewater. The Trustees had a lengthy discussion on water and sewer rate increases for 2009. The Trustees discussed various options of using sewer allocation money to stabilize rates.

On a motion by Trustee Bourne seconded by Trustee Thompson, with Trustee DeBor opposing, the Board approved a 7% increase in sewer rates for 2009, using existing sewer allocation dollars to mitigate the rate increase.

On a motion by Trustee Thompson seconded by Trustee DeBor, with Trustee Sargent opposing, the Board approved a 12% increase in water rates for 2009.

10) EXECUTIVE SESSION:

At 8:05 PM on a motion by Trustee Bourne, seconded by Trustee Sargent and unanimously approved, the Board went into Executive Session to discuss power contracts and potential legal issues. At 8:25 PM on a motion by Trustee Thompson, seconded by Trustee Sargent and unanimously approved, the Board came out of Executive Session.

On a motion by Trustee DeBor and seconded by Trustee Bourne, the Trustees authorized Craig to continue negotiations with Green Mountain Power for the purchase of electrical facilities at a price not to exceed $1.2 million at the most advantageous terms possible.

11) ADJOURNMENT:

At 8:35 PM, on a motion by Trustee Bourne, seconded by Trustee Sargent and unanimously approved, the Board adjourned the meeting.

___________________________________

Tim Sargent, Clerk