Loading...
HomeMy WebLinkAbout2020.03.27.BPMC.Executed.Minutes BPMC Minutes March 27, 2020 Page 1 of 6 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) MEETING MINUTES Friday, March 27, 2020 Telephonic Anchorage, Alaska 1. CALL TO ORDER Chair Izzo called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:55 am. A quorum was established. 2. ROLL CALL FOR COMMITTEE MEMBERS Tony Izzo (Matanuska Electric Association [MEA]); John Burns (Golden Valley Electric Association [GVEA]) (arrived late); Anna Henderson (Matanuska Light and Power [ML&P]); Lee Thibert (Chugach Electric Association [CEA]); Bradley Janorschke (Homer Electric Association [HEA]); Curtis Thayer (AEA) (arrived late); and John Foutz (City of Seward) (arrived late). 3. PUBLIC ROLL CALL Ashton Doyle, TW Patch, Beazit Redzepi, Kirk Warren (AEA); Don Maynor (ARECA Insurance Exchange); Russell Thornton (CEA); Bob Day (Bradley Lake - HEA); Peter Sarauer, Ron Woolf (GVEA); Emily Hutchison, Larry Jorgenson. Andy Patrick (HEA); Cindy Cartledge (Jermain, Dunnagan & Owens); Kirk Gibson (McDowell Rackner Gibson, PC); Ed Jenkin; (MEA); and Bernie Smith (Public). 4. PUBLIC COMMENTS Bernie Smith expressed appreciation to Ashley (sic) Unidentified for her great job with the IMC meeting. He suggested AEA request their IT specialists to determine if the Zoom platform would work better for these meetings. Chair Izzo expressed support for the recommendation. 5. AGENDA APPROVAL MOTION: A motion was made by Mr. Janorschke to approve the agend a. Motion seconded by Mr. Thibert. A roll call vote was taken, and the motion to approve the agenda passed unanimously. Chair Izzo stated for the record, all Committee members were now present. 6. APPROVAL OF PRIOR MINUTES -December 6, 2019 and January 24, 2020 MOTION: A motion was made by Mr. Thibert to approve the Minutes of December 6, 2019 and January 24, 2020. Motion seconded by Mr. Burns. BPMC Minutes March 27, 2020 Page 2 of 6 A roll call was taken and the motion to approve the Minutes of December 6, 2019 and January 24, 2020, passed unanimously. 7. NEW BUSINESS A. FY21 Administrative Fee Change Mr. Thayer noted an email was sent to the BPMC members on Friday explaining AEA would like to change the way AEA is compensated for the BPMC’s annual budget. For the last 20 years, there has been an annual flat fee of $200,000 that AEA has charged the BPMC. The BPMC gives the annual fee to AIDEA and AIDEA pays the bills. Lately, the flat fee has not been adequate to fully pay the bills and AIDEA has covered the difference out of their own operating funds. Last year, the additional funds necessary was approximately $170,000. AIDEA has notified AEA they no longer want to subsidize the BPMC, as they have no contractual rights or relationship. Mr. Thayer discussed the actual costs from last year. Administration fees, legal fees, travel, and Accu-Type transcription fees are proposed to be paid at actual costs going forward. The Committee would be updated on personnel costs and actuals. This is the same methodology currently used for Battle Creek. MOTION: A motion was made by Mr. Thayer to change how AEA is compensated from the BPMC annual budget for its administrative expenses, including but not limited to AEA personnel services. Currently, AEA is paid an annual fixed fee of $200,000 for its administrative expenses. Going forward from July 1, 2020, FY2021, AEA will bill the BPMC annual budget for its actual fees and expenses incurred in the manner as described in the memo and the spreadsheets that were provided to the BPMC members. Motion seconded by Mr. Janorschke. Mr. Burns inquired if there was a cap on the expenses. He expressed concern regarding an open-ended proposal. Mr. Thayer noted he shares the same concerns. The spreadsheet provided lists the employees, their rate, and overhead, totaling $241,000 for staff and facility fee. The total of $241,000 can be capped for this year. The Department of Law expenses, travel expense, and Accu-Type Deposition transcription would be at cost. This year’s total is $76,000. These expenses are not under staff’s control. Mr. Thayer expressed reticence in capping the Department of Law expenses. Mr. Thayer noted if the Committee is more comfortable capping all the expenses at $317,000, he requested to have the opportunity to come back before the Committee to have another discussion if expenses exceed the capped amount, especially Department of Law expenses. If the expenses do not reach the cap of $317,000, the utilities will only be charged at cost. Discussion continued regarding the wording of a friendly amendment to include a cap of fees. Kirk Gibson, McDowell Rackner Gibson, PC, recommended the cap wording of “not to exceed $317,000” be included in the motion. This will provide clear reference in the minutes. BPMC Minutes March 27, 2020 Page 3 of 6 A friendly amendment was accepted by the Maker and the Second to include the words, “not to exceed $317,000” at the end of the motion. A roll call was taken and the amended motion to change how AEA is compensated from the BPMC annual budget for its administrative expenses, including but not limit ed to AEA personnel services. Currently, AEA is paid an annual fixed fee of $200,000 for its administrative expenses. Going forward from July 1, 2020, FY2021, AEA will bill the BPMC annual budget for its actual fees and expenses incurred in the manner as described in the memo and the spreadsheets that were provided to the BPMC members not to exceed $317,000 passed unanimously. B. FY 21 Budget Approval Beazit Redzepi, AEA, delivered the FY21 Proposed Budget presentation. He reviewed the Bradley Lake and Battle Creek proposed budget changes, the O&M proposed budget, monthly utility contributions, R&C Fund disbursements and repayments, and Battle Creek capital purchases, administrative costs, and utility contributions. Bob Day, Bradley Lake, HEA, discussed the changes that were made to Bradley construction capital purchases since the approval of the draft budget at the previous meeting. It is likely that projects requiring workers to be in close proximity will be postponed until next year due to COVID-19 safety precautions. There were no questions. MOTION: A motion was made by Mr. Janorschke to approve the fiscal year 2021 budget as presented. Motion seconded by Mr. Thayer. A roll call was taken and the motion to approve the fiscal year 2021 budget as presented passed unanimously. C. Bond Retirement & Excess Payments Mr. Thayer explained the white paper provided was developed for informational purposes in response to a previous inquiry by Cory Borgeson regarding the retirement of bonds and excess payments. The white paper provides a background on the construction financing of the Bradley Lake Hydro Project, addresses questions relating to the final payment of power revenue bonds, and discusses excess payment obligations of the utilities under the Power Sales Agreement. Mr. Thayer informed Brenda Applegate, CFO, and Cindy Cartledge, bond counsel, are both available to answer questions. There were no questions. Mr. Thayer indicated the regular payment plan and defeasance schedule would continue to be followed. There was no objection to maintaining the current schedule. BPMC Minutes March 27, 2020 Page 4 of 6 D. FY 20 Budget Amendment - Battle Creek Project Mr. Redzepi explained the FY20 budget was amended for an approximate amount with the addition of the claims consultant. The increase in capital purchases is an additional $350,000. The request is to amend the budget as shown in the FY20 Proposed Budget - Amend 2. The Battle Creek participating utilities will have an increase in monthly contributions for the remaining four months of the year. Mr. Redzepi noted as of 12/31, the actuals for the claims consultant are over budget at $431,000. MOTION: A motion was made by Mr. Thayer to approve the second amendment of the FY2020 Bradley Lake Hydro Project Budget as presented. The budget amendment increases the Battle Creek participating utilities’ annual contribution by $350,000 to pay the Interface Consulting services. Motion seconded by Mr. Janorschke. Mr. Gibson provided context and noted he worked with Mr. Redzepi to determine the additional contribution amount for Interface Consulting services. Mr. Thibert recommended prudence and cautious review of the costs while moving forward with claims consulting. A roll call was taken and the motion to approve the second amendment of the FY2020 Bradley Lake Hydro Project Budget as presented. The budget amendment increases the Battle Creek participating utilities’ annual contribution by $350,000 to pay the Interface Consulting services passed, with Mr. Burns abstaining. 8. OLD BUSINESS 8A. Battle Creek Project Update Chair Izzo expressed concern about the impact of COVID-19 on productivity when work resumes on the project. Chair Izzo requested Bryan Carey, AEA, provide the Battle Creek Project update. Mr. Carey informed the diversion dam was substantially completed in early March. The fusing machine is expected to be assembled in April. Test welds will be conducted and fusing of the pipe will begin. Mr. Carey noted a safety plan regarding COVID-19 is actively being devised and will be implemented by both contractors. The substantial completion date of July 22, 2020, and final completion date of August 31, 2020, remain the same. Mr. Carey informed the total project budget cost will exceed the non-contingency budget, but the overages are well within the contingency budget parameters. Discussions with the Budget Subcommittee are ongoing regarding how to address the overages. Mr. Carey explained the photos provided in the presentation. There were no questions. 8B. Operators Report Mr. Day reviewed the Bradley Lake Operator Report included in the packet. He noted operations would be reducing the kind of maintenance requiring multiple people to be working in a small area in order to practice social distancing as much as possible. The unit BPMC Minutes March 27, 2020 Page 5 of 6 availability for both units in February and March was 100%. The lake level is approximately 17 feet higher than the normal lake level. He encouraged the utilities to use Bradley as much as possible. There were no questions. 8C. O&D Report Pete Sarauer, GVEA, presented the O&D Report. He noted the loss calculations on the Bradley Lake Water Tracking Report during the SQ Line outage were corrected and discussed at the last O&D meeting. The O&D Committee approved the Bradley Lake FY21 budget. Mr. Sarauer discussed the COVID-19 safety precautions implemented for the O&D Committee and at Bradley Lake to maintain a healthy workforce. There were no questions. 9. COMMITTEE REPORTS 9A. Budget to Actual Mr. Redzepi reviewed each of the schedules within the provided Bradley Lake Budget to Actual Expense Report dated 7/01/2019 to 12/31/2019. There were no questions. Chair Izzo requested to move Item 10. Executive Session to the end of the meeting. A roll call was taken and there were no objections to moving Item 10. Executive Session to the end of the meeting. 11. COMMITTEE ASSIGNMENTS Chair Izzo informed the invoice from HEA regarding Swan Lake fire repairs has been received. Chair Izzo assigned the invoice to the Budget Subcommittee for their review before it is brought back before the BPMC for determination and action. 12. MEMBERS COMMENTS Mr. Thibert expressed appreciation to the Budget Subcommittee for their work. He encouraged everyone to stay safe. Mr. Foutz echoed Mr. Thibert’s comments. Ms. Henderson echoed previous comments. Mr. Janorschke echoed previous comments. Mr. Burns echoed previous comments. Mr. Thayer expressed appreciation for the amendment on the administrative services. He stated AEA will attempt to and plan on being under budget. Chair Izzo echoed the comments of appreciation. He thanked AEA and Ashton Doyle for their efforts during this time when technology has to be used in new ways to facilitate meetings. Chair Izzo expressed support in reviewing on-screen alternatives such as Zoom. Chair Izzo provided an update to a previous discussion on a statewide call regarding the employee who