HomeMy WebLinkAbout11-17-1993 Formal BM Agenda"VFYNAlaska Energy Authority
AGENDA
ALASKA ENERGY AUTHORITY
Board of Directors Meeting
November 17,1993 -Formal Meeting
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS
PRIOR MINUTES (November 9,1993)
NEW BUSINESS
A.Bradley Lake Hydroelectric Project -Return of Surplus State Appropriations
B.Update of Alaska Energy Authority Transition
Status and Funding Issues
C.Intertie Grant Agreement
D.Financial Statements
DIRECTOR COMMENTS
A.Transition/Project Status
B.Next Meeting Date (January 28,1994)
BOARD COMMENTS
ADJOURNMENT
Alaska Energy Authority
MEMORANDUM
TO:Board of DirectorsAlaskaEnergyAuthorityMboxl/C/FROM:William R.Snell
Executive Director
DATE:-December 17,1993
SUBJECT:Bradley Lake Hydroelectric Project
Return of Surplus State Appropriations
Later this month,the Alaska Energy Authority (AEA)plans to return
approximately $11.5 million to the State General Fund.This transfer
represents the bulk of the surplus Bradley Lake appropriations to be
reimbursed to the state as a result of cost underruns on _project
construction.
The State of Alaska originally appropriated $175,080,000 toward financing
the design and construction of the project.The remaining project costs
were financed by AEA through the issuance of Power Revenue Bonds.The Power
Sales Agreement with the Railbelt Utilities was structured such that the
Utilities agreed to pay debt service on bonds sold for the project in an
amount equal to 50%of the total cost of the project (including financing
costs and reserve funds),or $175 million,whichever was less.All monies
were placed with a trustee bank to pay the construction costs:as they wereincurred.Under the terms of the bonds,when project construction was
essentially complete (98%),the state would be reimbursed one-half of the
amount by which the total project costs were less than $350 million.
Overall project construction is now 99%complete which allows for
disbursement of the state's surplus.The current estimated total project
cost including financing (which is to be divided equally between the State
and the Utilities),is approximately $325.2 million.
The AEA will be retaining sufficient monies to complete the remaining
miscellaneous project construction,including an additional contingency
amount in excess of $1 million.Upon completion of all work,a final
disbursement of any remaining state surplus will be made.
The Alaska Legislature,this past session,under HCS CSSB 126 (FIN),has
reappropriated all surplus Bradley Lake monies to the Railbelt Energy Fund
(AS 37.05.520).
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Alaska Energy Authority
MEMORANDUM
TO:Board of Directors
ony)Energy AuthorityAMTag&={4
FROM:Wil vist R)Sneil
Executive Director
DATE:December 17,1993
SUBJECT:Update of Alaska Energy Authority Transition
Status and Funding Issues
We have identified a variety of costs that will be incurred by
the Alaska Industrial Development and Export Authority (the
Authority)as a direct result of the transfer of functions of
the Alaska Energy Authority (AEA).The Authority does not have
available funds within its FY94 operating budget to finance allofthesecosts.RSA's between the Authority and AEA (operating
budget)and/or the Department of Community and Regional Affairs
(transition funds approved by the Legislature)as well as the
Authority's operating budget,will provide the necessary
funding.We have attempted to quantify the FY94 incremental
costs for planning purposes.The following list is intended to
be comprehensive,but undoubtedly additional items will be
identified as we progress through the final stages of transfer
and estimated amounts will be refined.
1.Permanent personnel.We have identified five full-time
and two shared positions required to operate the "new"
AEA,once the Bradley Lake Hydroelectric Project
operations and maintenance ("O &M")function is
transferred to the utilities.Until the O &M function
is assumed,seven existing AFA O &M_ transition
positions are needed to operate the Bradley
Hydro-electric Project and perform support services for
the Four Dam Pool.Those seven positions are funded by
the current operation budget and are not included
below.The costs noted below are from August 11,1993,
or the date indicated through June 30,1994;
Alaska Energy Authority
Board of Directors
December 17,
Page Two
1993
Deputy Director -Energy (Range 26).This position
performs functions for AEA as well as being the
Healy Clean Coal Project Manager and will be funded
equally by both after January 1,1994.During
transition,the estimated cost is $37,000 from
transition funds.After January 1,1994,each
operating budget will contribute $25,000.
Contracts Manager (Range 24).Full funding required
as of August 1,1993.Transition funding through
December 31,1993 is $41,200.Estimated AEA
operating budget funding for remainder of FY94 is
$49,400.
Director of Maintenance and Operations (Range 25).
This is an existing AEA position with a transfer
Gate of October 1,1993.Estimated cost of $83,900
from AEA operating budget.The salary range of this
position will be evaluated over the course of this
year.
Project Manager (Range 25).This is an existing AEA
Bradley Lake Construction Project Manager position
with a transfer date of October 1,1993.Effective
January 1,1994,the position will be funded 75%by
AIDEA and 25%by AEA.Estimated cost of $29,250
prior to January 1,1994,and $14,600 after January
1,1994,from AEA operating budget.The salary
range of this position will be evaluated over the
course of the year.AIDEFA's operating budget
portion is $33,850.
Accountant (Range 16).This position has been
transferred from AEA to AIDEA with full funding
required as-of January 1,1994.Estimated cost of
$28,400 from AEA operating budget.
Accountant V (Range 22).This will initially be a
permanent part-time position (65%),requiring
funding between October 1 and December 31,1993.
Estimated cost of $19,900 from AIDEA operating
budget and $39,800 from AEA operating budget after
January 1,1994.
Alaska Energy Authority
Board of Directors
December 17,1993
Page Three
g.Administrative Assistant (Range 14).This is a
position transferred from AEA filled by an AIDEA
staff member.Between October 1 and December 31,
1993,this position provided transition assistance
to the Deputy Director of Energy,the Contracts
Manager and trained with AEA staff.Funding between
October 1 through December 31,1993,is $12,400 from
transition funds.The remainder of FY94 estimate of
$24,850 is from AEA operating budget.
2.Temporary personnel.AIDEA has hired one temporary
position to develop an accounting system for the AEA
projects.That position is an Accountant IV (Range
21D).The contract is from September 20,1993 to
January 31,1994.Estimated cost of $22,200 from
transition funds.
3.Severance pay for transition staff.The AEA board of
directors passed a resolution providing laid off
employees with a one month salary severance package.
AIDEA/AEA identified 12 staff for its transition team.
The severance package for those individuals is estimated
at $73,000 from transition funds.
4.Moving costs.The cost to move records,equipment,
furniture,personnel,etc.,is estimated at $50,000 from
transition funds.
5.Legal costs.Legal costs for transition from the larger
AFA to the "new"AEA require extensive re-negotiations
of existing agreements with the utilities,redrafting of
existing by-laws and regulations,review of the
statutory scheme of AEA and AIDEA with legislation
recommendations,advice on personnel matters,etc.
Anticipated costs are $200,000 -50%Attorney General,
50%outside bond counsel.;
6.Travel.Travel and per diem associated with the
transition required of Attorney General and_e "staff,
estimated to be $5,000 from transition funds.
7.Computer costs.Wiring and set up of computers,
hardware and software costs.Estimated cost of $25,000
from transition funds.
Alaska Energy Authority
Board of Directors
December 17,1993
Page Four
8.Annual Report costs.Due to loss of AEA/DCRA staff,
availability to produce FY93 annual report,additional
incremental contractual services over and above typical
report preparation costs billed to operation budgets.
Estimated at $10,000 from transition funds.
9.Contingency costs.Unanticipated costs not otherwise
funded from current operating budgets for actions
required to complete the transition.Estimated budget
is $50,000 from transition funds.
10..Board of Director costs relating to publication of
meetings and other costs.Estimated cost of $3,000 from
AEA operating budget.
ll.Risk management travel and meeting expenses related to
AFA transfer.Estimated cost of $5,000 from AEA
operating budget.
12.Remodel of existing Authority office space to
accommodate required new positions and filing space.
New offices and a reworking of existing space usage are
required as well as phone system upgrade.Estimated
cost of $81,500 from AIDEA operating funds.
13.Contractual consulting services necessary to evaluate
the technical responsibilities to be either assimilated
under contract with the utilities or to remain with the
Authority/AEA.Estimated costs are $25,000 from AIDEA
operating funds.
The total estimated incremental costs to be incurred by the
Authority are $711,050 which must be funded from the Authority's
operating budget .($185,250)and from transition funds
($525,800).Permanent staff costs funded from the AEA operating
budget are estimated at $303,200.There will be additional FY94
operational costs incurred after the transfer is completed.
Presumably,these costs will be funded from the existing FY94
AFA operating budget.These items include:
1)Travel costs
2)Risk management costs
3)Cost of AIDEA's Economic Development Coordinator
4)Long distance phone and supply costs
5)Board of Director costs relating to publication of
meetings and other costs.;
6)Attorney General and outside legal costs (i.e.,bond
counsel).
Alaska Energy Authority
Board of Directors
December 17,1993
Page Five
7)Contractual costs (i.e.,financial advisor,auditor,
etc.).
8)O &M transition staff until Bradley Operations are
transferred.
9)Other
Based on current projections,AEA's operational and
administrative costs will be reduced by approximately $350,000
to $400,000 in FY94 and $500,000 to $550,000 annually,in later
years.These projections are based on AEA's proposals to the
operating utilities.Depending upon the resolution of the final
contracts,the actual cost to operate the projects cannot be
determined until the utilities provide AEA with their estimates
to assume the transferred duties.
The legislation mandating the transfer of AEA also repealed AS
44.83.045 which authorized employment of staff and an Executive
Director by AEA.As a result,instead of a separate Authority
and AEA budget,we are transferring the required employees and
expenditures to the existing Authority budget and fund the costs
via inter-agency transfers.
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DOCEVA -27]
cc:Pat Ryan,Chief of Staff
Edgar Blatchford,Commissioner,DCRA
Darrel Rexwinkel,Commissioner,DOR
Herbert C.Lang
AIDEA /AEA
TRANSITION PLAN
DECEMBER 1993
I.INTRODUCTION
This report is to update the Board on the status and changes resulting from
the transition efforts since the November 9,1993 meeting.
II.STAFFING
Our initial transition plan identified two AEA employees that would transfer
to AIDEA,10 AIDEA/AEA transition employees (five of whom were on-site
Bradley Lake operation staff)and 18 DCRA transition staff to assist in the
AIDEA/AEA transition.It was intended that this staffing arrangement would
be only for the period of August 12 through December 31,1993.Our
transition:efforts are ahead of schedule and transition staff levels are now
being reduced (See Attachment).
At this time,two AEA employees have been transferredto AIDEA.
Of the 10 AIDEA/AEA transition staff,two have received their 30 day notice
to terminate their employment,effective December 1,19933;two have been
advised their employment will cease January.1,1994;the five Bradley Lake
operating staff are pending transfer to Homer Electric Association;and one
position may extend beyond December 31,1993,depending upon the outcome of
negotiations with the utilities.
The DCRA staff performing transition duties for AIDEA/AEA has been reduced
by seven positions;six other positions will be eliminated on or before
November 30,19933;and the remaining five positions will perform limited
services through the end of the transition period.
AIDEA/AEA will be competitively seeking to fill one permanent full-time
accounting position within the next 30 days.The net result by December 31,
1993,is that AIDEA will have filled six full-time positions (including the
two transferred employees)and one part-time position,with one transition
position remaining dependent upon utility negotiations.Of the full-time
positions,three will be devoted to AEA functions.The remainder will be
allocating portions of their time to both AIDEA and AEA functions.
(Organizational Chart Attached)
III.BUDGET:
Staff has prepared the initial FY95 State Operating Budget,the draft joint
AEA/DCRA operation budget between July 1 and December 31,1993,and the AEA
budget between January 1 and June 30,1994.In addition,preliminary
project FY95 project operating budgets have been prepared for the dual
purpose of identifying the AEA portion of the project operating budgets and
negotiating operating agreements and budgets with the various operating
utilities and the project management committees.
IV.PROJECT AGREEMENTS
Project:Bradley Lake Hydroelectric Project
Status Update:
1.
Project:
Delegation of AEA Duties:
A final decision on AEA's proposed delegation of duties to Homer
Electric Association,Inc.(HEA)and the Bradley Project Management
Committee (BPMC)is pending the resolution of three areas of
discussion between the AEA,HEA and the remaining BPMC utilities as
represented by the BPMC.Those areas will be resolved through the
completion of the agreements listed below.
Operation and Maintenance Agreement:
A preliminary agreement and budget has been negotiated with HEA.
Those items are before the BPMC for review and approval.BPMC
approval has been delayed due to disagreements among the BPMC
utilities.
Master Operating Agreement:
The master operating agreement between aea and the BPMC is in final
negotiation.Execution of the agreement has been delayed due to
BPMC utility disagreements.
AEA/Bradley Budget
Budget discussions are continuing regarding the budget for fiscal 95
and the amended fiscal 94.A fiscal 95 budget has been presented totheBPMC.The amended fiscal 94 budget presentation has been
deferred until resolution of the overhead litigation.
Overhead Litigation
Meetings have been held in November to discuss pending PMC/AEA
overhead litigation.No resolution has been reached.
Four Dam Pool
Status Update:
1.AEA duties to be transferred to the operators have been proposed.
Revised O&M agreements will be initiated once the PMC agrees with
the transfer of duties.
Swan Lake Generator Insurance Repair contract has been awarded.
Tyee Transmissionline meetings regarding major repairs have beenheld.AEA plans in December to propose to the -PMC specific
repairs.An investigation of funding sources will follow.
-3-
4.A ten year R&R projection has been prepared for PMC approval.It
requires a significant increase to utility annual contributions.
5.AEA/Four Dam Pool Budget
AEA fiscal 95 and amended fiscal 94 budgets have been prepared.
These have been submitted to the PMC.
Project:Existing Intertie
Status Update:
1.AEA has compiled a draft list of duties.A revised budget will be
submitted in December.
2.The Intertie Operating Committee is in disagreement regarding the
extent of controller duties by GVEA and M&LP.An amendment to the
Intertie Agreement may be necessary.
Project:New Railbelt Intertie
Status Update:
l.The utilities have reached an agreement as discussed at the November
board meeting.
Project:Other Projects
Status Update:
Eklutna and Snettisham --Legislation to authorize the acquisition of
these projects by AEA/AIDEA has passed the U.S.House of
Representatives and is now in the U.S.Senate.
Black Bear -Potential long-term conduit financing is being explored.
V.ADMINISTRATIVE AND OPERATIONAL FUNCTIONS
AIDEA/AEA LEGAL DOCUMEN
Counsel is reviewing the corporate documents for necessary revisions to
regulations,by-laws,and statutes.Due to the scope of work required,
this effort will be completed in December.Draft proposals for
legislation should be ready by December 20,1993.
ACCOUNTING
The new AEA system has been designed and is in operation.
The accounts payable and general ledger portions of the program were
completed by December 1,1993,and except for one transition accounting
position,physically transferred to AIDEA on December 3,1993.
Additional modifications for budgeting and project cost tracking are
anticipated to be on-line before year end.
AUDITS
The FY93 final audit report is complete and in the board packet.The
Four Dam Pool and Bradley project operating budget audits are in
progress.
LAIM NTRACT ITIGATION &AGREEMENT
All ongoing claims,contracts and litigation have been identified.
Notices were sent to all AEA/AIDEA contract vendors regarding the change
to the corporate structure.The Department of Law has drafted a
memorandum of understanding between AIDEA/AEA and DCRA to address future
claims against either or both parties resulting from AEA actions prior
to the transfer of responsibilities.Due to changes in DCRA's
leadership,formal transfer of litigation will be completed this month.
INSPE iN
Final check lists and standards on required AEA and Contractor
inspections are anticipated to be completed by year end.
ENTORY
DCRA and AIDEA are completing the transfer of inventory.All transfers
should be complete by December 15,1993.Final inventory and required
transfers of furniture,.fixtures,and equipment for the Authority
offices and projects will begin the first of November,1993.The bulk
of the transfers should be completed within the month of November,1993.
RECORDS
The records inventory has been transferred to AEA/AIDEA.Physical
transfer is scheduled for the week of December 13,1993.
DOCEVA-279
August 12,1993
AEA/AIDEA Transfers (2)
Eberle,Dave
Sieczkowski,Stan
AEA/AIDEA Transition Staff (10)
Arminski,Tom
Hansen,Russ (BL)
Hansen,Sharon (BL)
Scott,Deanna (Replaced by Burger)
Sherlock,John (BL)
Sobelesky,Bill
Turner,Richard (BL)
Williams,Remy
Wolf,Larry
Zidalis,John (BL)
DCRA/AEA Transition Staff (18)
Acuff,Kristi
Baily,Suzi
Burger,Denise (Transferred to
AEA/AIDEA Transition)
Choe,Han
Hansen,Janet
Holmes,Bruce
Jones,Cynthia
Keylor,Cheryl Jean
Khan,Afzal .
Lammers,Richard
Macy,Barbara
Manni,Gloria
Marchegiani,Eric
Petrie,Brent
Spears,Joe
Vaughn,Lisa
Waer,Roger
Wilbanks,Brett
November 1,1993
AEA/AIDEA Transfers (2)
Eberle,Dave
Sieczkowski,Stan
AEA/AIDEA Transition Staff (10)
Arminski,Tom (01/01/94)
Burger,Denise (12/01/93)
Hansen,Russ (BL)
Hansen,Sharon (BL)
Sherlock,John (BL)
Sobelesky,Bill (12/01/93)
Turner,Richard (BL)
Williams,Remy (2?)
Wolf,Larry (01/01/94)
Zidalis,John (BL)
DCRA/AEA Transition Staff (11)
Baily,Suzi (11/30/93)
Choe,Han (12/31/93)
Hansen,Janet (12/31/93)
Jones,Cynthia (11/30/93)
Keylor,Cheryl Jean (11/30/93)
Khan,Afzal (11/30/93)
Lammers,Richard (11/30/93)
Manni,Gloria (12/31/93)
Marchegiani,Eric (12/31/93)
Spears,Joe (11/30/93)
Wilbanks,Brett (12/31/93)
ORGANIZATIONAL AND STAFFING CHART:The Alaska Industrial Development and Export Authority and the Alaska Energy Authority
Secretary IIl
R-14 PCN 219
Chairman Public Member Commissioner Commissioner Commissioner
Public Member
Executive
Director
R-28 PCN 200
Administrative Technical Receptionist
Assistant Engineer
R-14 PCN 213 R-21 PCN 212 R-7 PCN 216
Deputy Director Administrative*Deputy Director Deputy Director Correspondence Deputy Director
(Energy)Assistant (Finance)(Credit)Secretary Il (Development)
R-26 PCN 406 R-14 PCN 434 R-25 PCN 203 R-24 PCN 202 R10 PCN 215 R-24 PCN 201
Director Facility Contract Mgr.*Project Manager Accountant*Accountant II!Loan Servicing Econ.Development Loan Officer Development
Oper.Engineer'Bradley Lake Otticer Coordinator &Oper.Engineer
R-25 PCN 425 R-24 PCN 490 R-25 PCN 402 R-22 PCN 453 R-20 PCN 209 R-20 PCN 207 R-23 PCN 206 R-22 PCN 205 R-24 PCN 220
Accountant®Accounting Loan Doc.Spec.Loan Officer Project
Technician {1 Manager Il
R-18 PCN 423 R-14 PCN 221 R-16 PCN 208 R-18 PCN 204 R-22 PCN 222
Data Processing Loan Sv Tech Il Technical
Operator Engineer It
R-14 PCN 211 R-12 PCN 210 R-22 PCN 224
Finance Assistant Loan Servicing Engineer |
Technician Il
R-10 PCN 214 R-12 PCN 217 R-19 PCN #002
ALL POSITIONS ARE LOCATED IN ANCHORAGE |
*Alaska Energy Authority Operations and Maintenance component positions Development
Specialist
Org.Chart*11/4/93 KO R-13 PCN 223
Alaska Energy Authority
MEMORANDUM
TO:Board of Directors
a?7FROM:Wil Snell
Executive Director
DATE:December 17,1993
SUBJECT:Financial Statements and Management Letter
Included with your packet are the June 30,1993,Financial
Statements,Other Financial Information,and Independent
Auditors'Report and Management letter.
Representatives of Deloitte and Touche will be in attendance
at the meeting to discuss the Financial Statements and
Management Letter and to answer any questions the Board
members may have.
Alaska Energy Authority
MEMORANDUM
TO:Board of Directors
Alaska Energy ;huthorityFROM:witlienh
Executive Director
DATE:December 17,1993
SUBJECT:NEXT MEETING DATE
Staff suggests that the next Board of Director's meeting be scheduled for Friday,January28,1994 at 9:00 a.m.This meeting will be teleconferenced between Anchorage andJuneau.
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