Finance Committee Minutes

VILLAGE OF NORTH AURORA
FINANCE COMMITTEE MEETING MINUTES
MAY 13, 2013

CALL TO ORDER
Trustee Curtis called the meeting to order.

ROLL CALL
In attendance: Trustee Laura Curtis, Trustee Chris Faber, Trustee Mike Lowery.

Staff in attendance: Interim Village Administrator Dave Summer, Public Works Superintendent Mike Glock, Water Superintendent Paul Young, Finance Director Bill Hannah

AUDIENCE COMMENTS – None

APPROVAL OF MINUTES
1. Approval of the Finance Committee Meeting Minutes dated April 8, 2013
Not available. To be placed on the June Finance Committee Meeting agenda.

NEW BUSINESS
1. Discussion on Residential and Small Commercial Electricity Aggregation Process
Finance Director Bill Hannah noted that in attendance at the meeting was David Hoover of NIMEC. In July 2011 the Village received 8 bids and entered into a 2-year agreement with Integrys at a rate of 5.75 cents/kwh for residential and 5.8 cents/kwh for small commercial. Those rates were a savings of 25 – 30% of the current ComEd rate. The agreement with Integrys is set to expire this fall. A draft RFP was provided to the committee for review which specified that no early termination fees would apply and continued to require ComEd to be the billing agent. It is anticipated over the next year through May of 2013 that the ComEd rate will be at 6 cents/kwh, which includes an assumption that the purchased electricity adjustment will be .05.

Hannah asked that the committee discuss if it wants to consider any value added option once the Board sees the bids, which means a payment from the supplier to the village for unrestricted funds for any purpose. Hannah also asked the committee if they would want the Village to continue to coordinate the bid process which means the Village receives bids on Monday and have Board approval on that same night.

David from NIMEC noted that the community saved 2-1/2 million dollars over the last 2-year period. The average single family home saw a savings of $280/yr. Does the Board want to entertain bids or leave that to one individual?

Trustee Curtis asked what the benefit is of going with NIMEC instead of using someone in-house. Hannah said that NIMEC has done a lot of work during the process, screening the power supply providers and staying on top of case law and ICC law. Hannah said the Village does not have the manpower to handle the responsibility without some outside assistance.

Trustee Faber asked what the advantage would be of having someone else make the decision. Hoover said the market moves every day and since the Board has a meeting every two weeks, the rate could drop during this time and the Village would be unable to take advantage of the lower rate. Hoover added that the bids are only good for 24 hours.

Trustee Curtis asked, since NIMEC is compensated by the supplier, what is the supplier's best interest to commit to the contract when the rate is low. Hoover said NIMEC is paid on volume not savings.

Trustee Faber said there is a lot involved in making the decision and would not feel comfortable putting that burden onto one person.

The committee agreed to have the Village Board discuss pricing for added value contributions and continuing to have bids come in the same day as the board meeting for approval.

Trustee Faber asked what the Village saved with the last contract. Hoover said at the time of the last contract, ComEd's rate was 8.3 cents/kwh and 8.8 cents/kwh for the two years and the Village had a rate of 5.75 cents/kwh. Hoover said the Village would not see a 35% savings this year since the ComEd rate is being lowered to 5.5 cents/kwh plus the P.E.A. effective June 1st.

Trustee Lowery asked for an explanation of P.E.A. Hoover said that there is an agency that sets the ComEd rates. They make contract purchases two to three years in the future. They buy a third of every year’s load, figure out how many people they think will be on ComEd’s supply and they look at how much power they think they need and then enter into contracts for that load. When the actual month comes up and they have so many contracts and have only used so much power during that month, they will sell back the contracts of extra power to the market.

Conversation to be continued at the next COW meeting for decisions by the Board.

2. Discussion on North Aurora Activity Center Lease Renewals
Lease renewals for Share and Care and social worker Caryn Schultz. Most lease terms remain the same and there is some clarifying language that Staff is working on regarding maintenance responsibilities. Curtis asked Mike Glock if Share & Care issues have been resolved. Glock said that some of the issues would be discussed at an upcoming meeting.

3. Village Investment Policy Update
Bill Hannah said he made a couple of minor changes to the policy regarding explicit example of investing in municipal securities and also set a maximum threshold that could be invested in municipal securities.

4. Discussion on Additional Funding for the Overhead Sewer Assistance Grant Program
Mike Glock stated that the Village started the Overhead Sewer Assistance Program approximately five years ago. The grant is for homeowners who were getting sanitary sewers in their home. The cost of the project use to be $5000 and the Board allowed $2500 per household (not to exceed or pay half). Since then, labor and prices have increased. Other communities have also increased their prices. Glock asked for an increase from $2500 to $4000.

Faber asked how many houses this would apply to. Glock said the houses affected are between Cherry Tree and Willow Way and State Street that goes to Cypress.

Faber asked when the Village gave one of these grants. Glock said that was last spring. Curtis noted the Village has 7 residents expressing interest in the grant at this time.

The Committee was in favor of the additional funding.

OLD BUSINESS – None
OTHER INFORMATION – None
TRUSTEE COMMENTS - None

ADJOURNMENT
Motion to adjourn made by Trustee Faber and seconded by Trustee Lowery. All in favor. Motion approved.

Respectfully Submitted,

Lori J. Murray
Village Clerk