Board of Water and Light

BOARD OF WATER & LIGHT BOARD OF COMMISSIONERS REGULAR BOARD MEETING AGENDA May 20, 2025 - 5:30 p.m. 1201 S. Washington Ave., Lansing, Michigan REO Town Depot BWL full meeting packets and public notices/agendas are located on the official web site at https://www.lbwl.com/about-bwl/governance. 1. Roll Call 2. Pledge of Allegiance 3. Approval of Minutes a. Regular Board Meeting Minutes of March 25, 2025 4. Public Comment on Agenda Items Members of the public are welcome to speak to the Board on any agenda subject. Anyone wishing to comment on any matter not on the agenda may do so immediately prior to adjournment. Each speaker will have 3 minutes to speak to the Board. 5. Communications a. Electronic mail from Max Howard re: BWL Internal Auditor Hiring in the City Charter 6. Committee Reports a. Special Human Resources Committee Meeting (May 8, 2025) – Beth Graham, Chairperson b. Human Resources Committee Meeting (May 13, 2025) – Beth Graham, Chairperson c. Committee of the Whole Meeting (May 13, 2025) – Semone James, Chairperson d. Finance Committee Meeting (May 13, 2025) – Tony Mullen, Chairperson 7. Manager’s Recommendations 8. Unfinished Business 9. New Business 10. Resolutions/Action Items a. Appointment of the Charter Position of Corporate Secretary Resolution b. Appointment of the Charter Position of Director and General Manager Resolution c. Appointment of the Charter Position of Internal Auditor Resolution d. Ratification of Trustees of Retirement Plans Resolution e. Return on Equity Agreement Resolution f. Capital Budget Exceedance Request for Electric Annuals Resolution g. Capital Budget Exceedance Request for REO Steam Turbine Generator Overhaul Resolution  h. Cash Reserve Policy Change Resolution i. FY26-31 Budget Resolution 11. Manager’s Remarks 12. Commissioners’ Remarks 13. Motion of Excused Absence 14. Public Comment Members of the public are welcome to speak to the Board on any Board of Water and Light subject. Each speaker will have 3 minutes to speak to the Board. 15. Adjournment Agenda posted on web site/building 05-15-25 2025 Board Meetings Notice/Schedule Posted in the Lansing State Journal January 3, 2025  To Be Approved by the Board of Commissioners 05-20-2025 MINUTES OF THE BOARD OF COMMISSIONERS MEETING LANSING BOARD OF WATER AND LIGHT _________________________________ March 25, 2025 ________________________________ The Board of Commissioners met at the Lansing Board of Water and Light (BWL) Headquarters- REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, on Tuesday, March 25, 2025. This meeting was publicly noticed for 5:30 p.m. Chairperson David Price called the meeting to order at 5:30 p.m. Corporate Secretary, LaVella J. Todd, called the roll. The following Commissioners were present: Chairperson David Price, Semone James, DeShon Leek, Tony Mullen, Dale Schrader, and Sandra Zerkle. Also Present: Non-Voting Commissioners Stuart Goodrich (Delhi Township), and Robert Worthy (Delta Township). Absent: Commissioners J.R. Beauboeuf (East Lansing), Beth Graham and Chris Harkins. The Corporate Secretary declared a quorum. Commissioner Schrader led the Pledge of Allegiance. Chairperson Price recognized Director of Internal Audit Elisha Franco for her five year’s of service and presented her with a certificate. APPROVAL OF MINUTES Motion by Commissioner Semone James, Seconded by Commissioner Tony Mullen, to approve the Regular Board Meeting minutes of January 28, 2025. Action: Motion Carried. PUBLIC COMMENTS There were no public comments. COMMUNICATIONS Electronic Mail received From Randy Joy re: Accounts Payables Election. Referred to Management. Received and Placed on File. 3 Electronic Mail received From Patricia Balassone re: Public Comment. Received and Placed on File. COMMITTEE REPORTS Committee of the Whole Chairperson Semone James presented the Committee of the Whole Meeting Report: COMMITTEE OF THE WHOLE Meeting Minutes March 11, 2025 The Committee of the Whole of the Lansing Board of Water and Light (BWL) met at the BWL Headquarters-REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, on Tuesday, March 11, 2025. Committee Chairperson Semone James called the Committee of the Whole Meeting to order at 5:30 p.m. and asked the Acting Corporate Secretary to call the roll. Present: Commissioners Chris Harkins, Semone James, DeShon Leek, Tony Mullen, David Price, Dale Schrader, and Sandra Zerkle; and Non-Voting Commissioners J. R. Beauboeuf (East Lansing), and Commissioner Robert Worthy (Delta Township) Absent: Commissioner Beth Graham and Non-Voting Commissioner Stuart Goodrich (Delhi Township) Acting Corporate Secretary Maria Koutsoukos declared a quorum. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Semone James, Seconded by Commissioner Tony Mullen, to approve the Committee of the Whole Meeting minutes of January 14, 2025. Action: Motion carried. The minutes were approved. Enterprise Risk Management and Risk Register Update Director of Strategic Planning & Development Kellee Christensen presented the Risk Management and Risk Register update. Ms. Christensen reviewed the Enterprise Risk Management structure, insurance, consultation, and claims; and also, the BWL FY2024-25 Insurance Program, claim investigations, and claim recovery activity. Commissioner Mullen asked whether a claim would be filed if a telephone pole and power lines were taken down due to an accident. Ms. Christensen responded that access to data is not as readily available, due to a change in privacy laws, making it difficult for BWL to file a damage claim. 4 Commissioner Leek asked the status of the claim for the turbine at Delta Energy Plant. GM Peffley responded that it is ongoing. Commissioner Harkins asked how the claim investigation numbers compared to similar utilities. Ms. Christensen responded that she didn’t have information about similar utilities but BWL works to mitigate losses and filing a claim as quickly as possible. GM Peffley added that crews are out every day and BWL pays out very little. Commissioner Worthy asked if there is a uniform agreement for standard work when there is reciprocal work completed. GM Peffley responded there is a mutual aid agreement for those utilities that are part of the agreement. Commissioner Beauboeuf asked if claims for insurance were always investigated prior to a settlement and if there were claims about errors or omissions regarding employment. Ms. Christensen responded that if damage is done and known an investigation isn’t needed for insurance. GM Peffley responded that he would follow up with legal and provide the information to the Commissioners in an email regarding the claims regarding employment. Business Planning Analyst Leah Bucio presented the Risk Registry update. Ms. Bucio reviewed the risk register categories: compliance, financial, operational, reputational, and strategic. She also reviewed departmental risk assessments and mitigation plans. Commissioner Mullen asked if there was a mitigation plan for recurring incidents. Ms. Christensen responded that information is collected and if there is an increase in the same incidents, there will be emphasis on the safety information that is presented. 2021 Strategic Plan Accomplishments Business Planning Analyst Leah Bucio presented the 2021 Strategic Plan Accomplishments. Ms. Bucio provided a strategic plan refresher of five strategies in the areas of customer & community, workforce engagement & diversity, climate & environment, operational resiliency & continuous improvement, and financial stability. The FY26 Strategic Plan will be effective July 1, 2025. Commissioner Zerkle asked whether the decrease in the open hours of the call center had been reevaluated recently. GM Peffley responded that he received requests to keep the call center open after it was closed during COVID, and walk-in traffic has improved since it has been reopened. Commissioner Schrader asked whether new solar customers are classified residential customers and whether the customers reduce their electricity rates. Ms. Christensen responded that most solar customers are residential but there are also commercial customers. Rebates are given and the rebate process is on the BWL website. Additionally, an education seminar is being recommended. Ms. Christensen affirmed that electricity rates are reduced and stated that some customers send energy back and get credited for it. GM Peffley added that the rate is tracked and his solar array makes 50% of its power for the year in the summer and in January, 5 1% of the power was made. Solar aligns better than wind with peak power usage but more credit is given by the government for wind. Chairperson James asked the Director of Internal Audit Elisha Franco to summarize the revision to the security deposit rule and positive results for the community. Ms. Franco shared that previously, a late fee resulted in the security deposit being held on file. The revision states that the security deposit would be held if there was a shut off and if there were no further shut offs in a 12-month period then the security deposit would be returned. She further shared that over approx. $3.2 million dollars in security deposits were released back to customer’s accounts due to this guideline change. The funds are recorded as a liability on BWL’s books and held in escrow. The goal of the security deposits is to return them to the customer accounts, rather than retaining the money on BWL’s books. Commissioner Zerkle commented that the security deposit would be put in the BWL general ledger. Commissioners Schrader and Chairperson James commended the implementation of the revised security deposit rule. GM Peffley added that a deposit is not required to turn power back on if there is a utility service interruption. Commissioner Zerkle thanked the BWL staff for their work on the strategic plan and their helping of customers. Chairperson James asked what could be done so that rate payers could be informed of all the good things the BWL is offering and doing for the community. GM Peffley responded that the communication plan is being rolled out and includes a series of two to three minute slots on television stations in which he speaks of the progress BWL is making. Chairperson James commended GM Peffley on the Bright Ideas campaign and all the strategic plan accomplishments. Commissioner Harkins asked whether the grants mentioned in the accomplishments are finalized or yet to be allocated. Assistant General Manager (AGM) Heather Shawa responded that it was a combination of both. All Commissioners gave a round of applause to management and staff for the outstanding 2021 Strategic Plan Accomplishments. Amending Appointment to Michigan Public Power Agency - Commissioner and Alternate The upcoming retirement of Chief Operations Officer Dave Bolan was acknowledged and all Commissioners and meeting attendees gave a round of applause for his 38-years of outstanding service to the BWL and City of Lansing. Chief Operations Officer Dave Bolan presented the amending appointment to MPPA Commissioner and Alternate resolution. 6 Motion by Commissioner David Price, Seconded by Commissioner Tony Mullen to forward the Resolution for Amending Appointment to Michigan Public Power Agency – Commissioner and Alternate to the full Board for approval. Action: Motion Carried. RPC Update AGM Shawa presented the Retirement Plan Committee update. Both the DB and VEBA Plans are positioned to achieve their target returns. State Street GTC Retirement Income Builder (RIB) Series of funds was approved by the RPC to be added. The DB Plan monthly pension payment processing plan successfully transitioned to Northern Trust. RPC approved the FY25 Q2 ASA reimbursement of $2,227,776 in the VEBA Plan. Legislative changes and change to the normal retirement age are being updated in the Defined Contribution & Deferred Compensation Plans. The updated 401(a) Plan 2 documents will be forwarded to the Board for approval. RPC plans to vote on the approval of the 401(a) Plan 1 and 457 Plan documents at its March 17 th meeting. AGM Shawa and Chairperson James congratulated Scott Taylor on his new role as Chief Financial Officer. The Director of Accounting, Finance & Planning position will be replaced by the Manager of Accounting, Finance & Planning on the RPC. Commissioner Leek asked what other changes were made to the RPC charter. AGM Shawa responded that summary plan descriptions for covered plans have been added based on recommendations from outside counsel. Commissioner Price asked whether the RPC membership listing of two voting members of the Board of Commissioners was correct. Ms. Shawa responded that it should be one voting member and one alternate. Chairperson James and CFO Taylor responded that it is two voting members of the Board, but one is a voting member of the committee and one is an alternate in case of a tie. Commissioner Mullen asked the process for selecting the two voting members. Chairperson James and AGM Shawa stated that commissioners were selected in committee and the resolution states the Board can add to, reappoint, and remove the Commissioners and members on the RPC. Commissioner Price added that an internal audit report on the RPC recommended additional members of two Commissioners, a BWL retiree, and an IBEW Local Union 352 employee. Commissioner Mullen asked what could be done if a Commissioner wanted to be on the RPC, and what was the length of service for the members. Commissioner Price stated that the resolution should be reviewed. The Corporate Secretary or Assistant to the Corporate Secretary will provide Commissioner Mullen with the RPC Charter resolution. Motion by Commissioner Tony Mullen, Seconded by Commissioner David Price to forward the Resolution for the RPC Membership Change to the full Board for approval. Action: Motion Carried. DC Plan 2 Plan Document Update Chief Financial Officer Scott Taylor presented the DC Plan 2 Plan Document update. The update is due to the regulatory and legislative changes of the Secure Act of 2019, Cares Act of 2020, and 7 the Secure Act of 2019. There are no benefit changes in the plan. The main changes are in the plan document, along with some adoption agreement elections. Commissioner Harkins commented that the legislative changes are from a few years ago and asked what is the regular process of updating the documents. CFO Taylor responded that the regulatory changes often don’t have full guidance right away and have a multi-year time frame to adopt them. Motion by Commissioner Semone James, Seconded by Commissioner David Price to forward the Resolution for the DC Plan 2 Plan Document to the full Board for approval. Action: Motion Carried. DEI Lansdscape Update Diversity, Equity & Inclusion Specialist Vernon Woodley presented the DEI Landscape update. Most of the recent executive orders only apply to the federal government. EO 14173 directs all federal agencies to investigate DEI discrimination in private industry and encourages the private sector to end illegal DEI discrimination preferences. Mr. Woodley emphasized that BWL has no illegal DEI discrimination or preferences practices. Opportunities at BWL are open to all qualified employees. BWL offers DEI learning opportunities in the areas of New Hires, Management, Emerging Leaders, Executive Team, and Continual Learners Lunch & Learn events. Commissioner Mullen commented that BWL needs to make sure that BWL’s DEI process continues, is strong and that the people hired are representative of the City of Lansing. Commissioner Beauboeuf commented that the DEI program questions focus on a nuance when it is said there is compliance and there isn’t a special program that targets a certain group. If there is a program that is for everyone but it benefits one group over another, it is illegal. Everyone has to be invited equally to participate, and the program needs to be analyzed to ensure compliance for the receiving of grant funding, Chairperson James commented that GM Peffley gave her assurance that there isn’t any concern about losing grant funding. GM Peffley confirmed and added that there aren’t any pending employment suits. GM Peffley added that BWL’s volunteer resignation rate is 25% of other companies of the same size and that very few people leave unhappy. Commissioner Mullen commented that the end results are whether BWL has a diverse workforce. Mr. Woodley responded that a variety of events are celebrated and a DEI orientation workshop is conducted for all new employees. Commissioner Zerkle commented that she had attended several of the DEI events and that DEI isn’t about pushing one person ahead but that all employees are equally valuable and included. Resolution Honoring Tracy Thomas Chairperson James presented the resolution honoring Tracy Thomas to the Committee. 8 Motion by Commissioner Semone James, Seconded by Commissioner Tony Mullen to forward the Resolution Honoring Tracy Thomas to the full Board for approval. Action: Motion Carried Unanimously Chairperson James acknowledged Commissioner Thomas’ 16 years of service to the BWL and citizens of Lansing, commenting that Commissioner Thomas did a great job serving the Board, representing the community, was complimentary of the staff and he will be missed. Other Motion by Commissioner David Price, Seconded by Commissioner Semone James for excused absences for Commissioners Beth Graham and Stuart Goodrich. Action: Motion Carried. Adjourn Chairperson James adjourned the meeting at 6:55 p.m. Respectfully Submitted, Semone James, Chairperson Committee of the Whole Finance Committee Chairperson Tony Mullen presented the Finance Committee Meeting Report: FINANCE COMMITTEE Meeting Minutes March 11, 2025 Finance Committee: Tony Mullen, Committee Chairperson; Semone James; David Price; and Dale Schrader; Alternates: Beth Graham, Sandra Zerkle; Non-Voting: Commissioners J. R. Beauboeuf, Stuart Goodrich, Robert Worthy. The Finance Committee of the Board of Water and Light (BWL) met at the BWL Headquarters – REO Town Depot, located at 1201 S. Washington Ave., Lansing, MI on Tuesday, March 11, 2025. Finance Committee Chairperson Tony Mullen called the meeting to order at 7:00 p.m. and asked the Acting Corporate Secretary to call the roll. Present: Commissioners Semone James, Tony Mullen, David Price, and Dale Schrader; Also Present: Commissioners Chris Harkins, DeShon Leek, Sandra Zerkle; and Non-Voting Commissioners J. R. Beauboeuf (East Lansing) and Commissioner Robert Worthy (Delta Township) Absent: None Acting Corporate Secretary Maria Koutsoukos declared a quorum. Public Comments There were no public comments. 9 Approval of Minutes Motion by Commissioner David Price, Seconded by Commissioner Dale Schrader, to approve the Finance Committee Meeting minutes of January 14, 2025. Action: Motion Carried. The minutes were approved. Financial Summary YTD Assistant General Manager Heather Shawa presented the YTD Financial Summary. Days Cash on Hand fluctuates due to the timing of new energy contracts and is currently positive. Credit ratings from Moody and from S&P were affirmed with a stable outlook. Total revenue variance is due to wholesale which is affected by market pricing and some recent outages. Non- Operating expense is affected by wholesale fuel costs. Net Income is positive primarily due to investment income. Capital and new energy products indicate an underspend due to timing and some schedule changes in planned capital. The Debt to Total Assets is underperforming against the benchmark due to outstanding revenue bonds and additional issuance of bonds but will reduce back to industry benchmark as the bonds are paid back. Benefits Cost is currently under budget due to lower than anticipated claims. Increased health costs will be presented in the budget in May. Chairperson Mullen commented that the Budget YTD is what is expected currently in the annual budget and the Actual YTD is what is realized currently, so BWL is doing better than what is expected. Commissioner James requested that the target heading be renamed Target YTD. Commissioner James asked the difference in vacancy ratios between bargaining and non- bargaining employees. AGM Shawa responded that BWL would follow up with that information. GM Peffley responded that the contractual ratio is based on headcount and it is representative. Commissioner Schrader asked what the effect of a Canadian power shut off would be on the wholesale electricity market. GM Peffley responded that the Canadian power shut off wouldn’t affect BWL negatively, but the 25% increase on other companies would benefit BWL and make BWL more attractive in the wholesale market to customers in Northern Michigan. The market will continue to grow for BWL. Capital Project Report AGM Shawa presented the Capital Project Report. Currently there is nothing on the watch list from the top ten planned projects. There are two items on the project watch list due to repairs required for damage found during inspections and inventory control ordering for long lead times. Some inventory arrived early but it will have a positive impact on next year’s budget. Regulatory Account Approval for Other Post Employment Benefit Plan CFO Scott Taylor presented the regulatory account approval for Other Post Employment Benefit Plan (OPEB). Approval is requested for a proposed change in accounting for OPEB expense in the VEBA plan due to changes that occurred in expense which affects rate setting. There isn’t any impact on the plan itself. GASB 62, a regulatory accounting standard, allows for deferred 10 accounting treatment with gradual changes over a period of time for certain regulated operations. The application of GASB Statement 62 will be effective Fiscal Year 2026. Commissioner Harkins asked if there had been consideration of paying down further the target rate of return plan of 6.5% and whether there were other durations considered than the 25-year amortization plan. CFO Taylor responded that historically plans were higher in the 7% and 8% range but have taken the approach of being more conservative. Mr. Taylor added that BWL’s plans are at 6.5% and 6.0%, are well funded, and the RPC and ACG advisors state that those are the appropriate targets for BWL right now. Mr. Taylor also responded that the 25-year amortization period was considered an appropriate length of time to level out expenses, but it can be reset if needed. GM Peffley responded that the Commissioners can make an appointment with CFO Taylor to further explain the plan. Chairperson Mullen commented that information is provided well and readily by the BWL staff in appointed meetings. Motion by Commissioner David Price, Seconded by Commissioner Semone James to forward the Resolution for the Application of GASB Statement 62 to OPEB Plan Expense to the full Board for approval. Action: Motion Carried. Approval of Payments Requested by Board Appointed Employees Resolution Commissioner James requested that the process be reviewed thoroughly since there will be a change in the way the Board operates. Chairperson Mullen presented the information for the resolution for the approval of appointee expenditures. The budget for the three appointed employees are presented together every year with the annual budget, and there have been questions about the expenses of the employees. The current procedures states the employees will sign off on the expenses and there is a set amount that can be approved. There was a question on who should approve the expenses of the appointed employees and the response received was the Finance Committee Chairperson and one other Finance Committee Member. A resolution should be formalized that states what the procedure will be going forward, and will include that the Finance Committee Chairperson and one another Board Member, not on the Finance Committee, who will be appointed by the Chairperson of the Board, will approve the appointed employees expense report. Commissioner Mullen also requested three separate presentations from the appointed employees, similar to the one the General Manager currently presents every year, be part of the procedure. A discussion followed. Commissioner James stated that in the Credit Card Policy Resolution 2023-07-06 it was resolved that each appointed employee is allotted a specified expense amount and each month a purchasing card report is to be presented to the Finance Committee Chairperson and the second named voting Finance Committee member. The resolution also states that the appointed employees shall report their non purchasing card related expenditures to the Board of Commissioners consistent with other BWL procedures including procedures in the Travel & Expense Policy and procedures in their employment contracts. 11 Chairperson Mullen requested that the procedure state that purchases by the appointed employees are to be approved or signed off by the Board of Commissioners as a signing off procedure is stated for managers and directors. Commissioner Price requested that the Credit Card Policy be amended, update it with the procedures Chairperson Mullen requested, and rename it the Appointees Purchasing Power Policy to encompass both purchasing card and non-purchasing card expenses. Chairperson Mullen stated that the resolution would be returned to General Counsel Mark Matus for amendment. Presentation of Appointed Employees’ Department Budgets to Finance Committee Resolution Commissioner Harkins asked if the budgets to which were being referred were the prospective budgets and Chairperson Mullen affirmed. Motion by Commissioner Semone James, Seconded by Commissioner David Price to forward the Resolution for the Appointee Budget Approval to the full Board for approval. Action: Motion Carried. Internal Audit Status Report Director of Internal Audit Elisha Franco presented the Internal Audit Status Report. Ms. Franco gave an overview of the Remittance/Cash Receipts Audit update; the remaining FY2025 Audit Plan; the AuditBoard update; and the acquiring of Plante Moran to consult with and assist with the internal audit strategic plan, quality assurance and improvement plan, organizational risk management and manual. Internal Audit Department Assessment Results Director of Internal Audit Elisha Franco presented the Internal Audit Assessment results. Ms. Franco reviewed the current state of internal audit practices and procedures, which includes issue priority; the gap analysis, which identifies areas for improvement with the internal audit function; and the implementation of AuditBoard. Commissioner James asked about the selection of Plante Moran as the consultant and Ms. Franco responded that Plante Moran is on contract with the BWL for auditing services. Commissioner James also asked if there should be a separation between internal audit and management. Ms. Franco responded that she confirmed the independence between the service Plante Moran is providing for the Internal Audit Department and the service being provided for management. Commissioner James asked about the contract negotiated and if the statement of work can be provided to the Commissioners. Ms. Franco responded that she can negotiate cost within her budget and will provide the statement of work to the Commissioners. Other There was no other business. 12 Adjourn Chairperson Tony Mullen adjourned the meeting at 8:13 p.m. Respectfully submitted, Tony Mullen, Chairperson Finance Committee Commissioner Sandra Zerkle presented the Human Resources Committee Meeting Report for Chairperson Beth Graham in her absence: HUMAN RESOURCES COMMITTEE Meeting Minutes March 18, 2025 Human Resources (HR) Committee: Commissioner Beth Graham, Committee Chairperson; Commissioners Chris Harkins, DeShon Leek and Sandra Zerkle; Alternates: Tony Mullen, Dale Schrader; Non-Voting Members: Commissioners J. R. Beauboeuf, Stuart Goodrich and Robert Worthy. The HR Committee of the Lansing Board of Water and Light (BWL) met at the BWL Headquarters- REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, on Tuesday, March 18, 2025. HR Committee Chairperson Beth Graham called the meeting to order at 5:00 p.m. and asked the Corporate Secretary to call the roll. The following members were present: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle; also present: Alternate Commissioner Dale Schrader; Commissioner Semone James; and Non-Voting Commissioner Robert Worthy (Delta Township) Absent: None. The Corporate Secretary declared a quorum. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner DeShon Leek, Seconded by Commissioner Sandra Zerkle, to approve the HR Committee meeting minutes of September 10, 2024. Action: Motion Carried. Market Analysis Review for Appointees Executive Director of Human Resources, Michael Flowers, presented the process for going through a market analysis for the three appointed employees’ salaries and position descriptions, including the placement in pay grades, reviewing any movements in the markets, and a comparison with similar industries. Recommendations for the appointed employees are brought to the Human Resources Committee Chairperson and members, and then to the full Board for approval. 13 Commissioner Leek asked whether the current volatility of the market has been experienced before and what was done for the point system in that situation. Mr. Flowers responded that projection and what makes sense is evaluated. Commissioner Harkins asked for a general timeline for the market analysis and position descriptions. Mr. Flowers stated that a market analysis takes one to four weeks to obtain. Mr. Flowers added that a structured compensation philosophy is in place that has been followed for the last couple of years. Commissioner Zerkle commented that it is requested by the HR Committee to have the evaluation process completed by July 1 and Mr. Flowers responded that the schedule will be presented in the next agenda item. Performance Management Evaluation Questions for Appointees Mr. Flowers presented the timeline and process that will be followed for the performance evaluations to be in place by July 1, and to be ready for the committee meeting for the reappointment of the appointees and extension of their contracts. The first step is sending the self-evaluations to the appointed employees and receiving those evaluations back from them. The second step is sending the returned self-evaluations to the Commissioners to review and to complete the appointed employees’ performance evaluations, and the third step is to send the completed performance evaluations to the HR Committee Chairperson and Mr. Flowers to compile prior to the HR Committee Meeting in May and then for the Board Meeting in May. Mr. Flowers added that communication will be sent to the Commissioners when the self-evaluations have been sent to the appointed employees and additional communications will be sent for each subsequent step. Commissioner Zerkle asked if Chief of Staff Smiljana Williams would be the point person this year also for the collection and distribution of the information to be sent to the Commissioners prior to the finalization of the information. Mr. Flowers affirmed. Commissioner Schrader asked when the appointees can expect the self-evaluation questions. Mr. Flowers asked Chairperson Graham when she wanted the self-evaluations sent out. Mr. Flowers added, for example, he could send the self-evaluations on March 19 with a requested return date of April 2nd. Chairperson Graham responded that sending out the self-evaluations by March 24th with a return date of two weeks is reasonable. Commissioner James requested copies of the current contracts of the appointed employees be sent to the Commissioners as the Commissioners are bound by the contract. Chairperson Graham asked when copies of the contracts should be sent and Commissioner James responded that copies should be sent right after the contracts have been signed. Chairperson Graham responded that copies of the current contracts will be sent to the Commissioners with the self- evaluations. Mr. Flowers proposed the schedule of sending the self-evaluations on March 24th, receiving back the appointed employees self-evaluations on April 7th, allow a couple days to review the 14 compilation, and then sending the completed self-evaluations, along with copies of the contracts, to the Commissioners on April 10th. Commissioner James requested confirmation that the Board will receive on April 10 th the self- evaluations, etc. and are to return them by May 2nd in order to be ready for the May 13th Committee meeting. Chairperson Graham and Mr. Flowers affirmed that was what was being proposed. Commissioner James suggested the return date be April 28 th. Chairperson Graham responded that the interviews could be conducted on May 6th, and the HR Committee would meet on May 13th. Commissioner Zerkle asked if that would be enough time to put the contracts together. Mr. Flowers responded that there are usually only minor adjustments needed. Commissioner Harkins asked what was done previously for the scheduling of the appointed employees re-appointment items. Commissioner James and Mr. Flowers responded that Commissioners’ schedules have fluctuated and the schedule is determined annually by the Commissioners. Commissioner Zerkle requested the wage averages of the three appointed employees be sent to the Commissioners. Mr. Flowers responded that the pay grade and amount for the appointees can be provided to the Commissioners. Mr. Flowers proposed that the final schedule will be to send out the appointee self-evaluations and an email notification to Commissioners on March 24th with a request to return by April 7th. Upon compilation by Mr. Flowers, a copy of each contract, salary, and pay grade for the appointed employees will also be sent along with the self-evaluations and performance questions to the Commissioners on April 10th. The completed performance evaluations will be sent to the HR Committee Chairperson and Mr. Flowers by April 28th. On May 6th, a special meeting will be held and on May 13, an HR Committee Meeting will be held. Commissioner James asked if a copy of the evaluations can be sent to the Commissioners Mr. Flowers responded that he would send them. Commissioner James asked whether the special meeting on May 6th would be a special HR or COW Meeting. Commissioner Zerkle responded it would be an HR Committee meeting. Commissioner James asked whether there would be closed sessions at the May 6 th meeting. Mr. Flowers responded that there will be closed sessions to discuss the evaluations. Commissioner Harkins asked if the meeting to be held on May 6th was to be voted on or was it a set date. Chairperson Graham responded that May 6th is the day that is being proposed to conduct the evaluation part of the process. Commissioner James added that the special meeting allows the Chairperson to meet with the appointed employees to negotiate their contracts. Motion by Commissioner Chris Harkins, Seconded by Commissioner Sandra Zerkle to distribute the self-evaluations to the appointed employees on March 19th; for the self-evaluations to be 15 due back to Michael Flowers on April 7th; for the existing contracts, the compiled evaluations and the performance evaluation questions to be sent to the Commissioners on April 10th; for the latter to be due back to Michael Flowers and the HR Committee Chairperson on April 28th; for a special HR Committee Meeting to be held on May 6th; and for discussion to be held at an HR Committee Meeting on May 13th. Action: Motion Carried. Commissioner Worthy asked if there was a process for modifying the appointed employee job descriptions. He noted that the General Manager’s job description doesn’t include responsibility for chilled water. Chairperson Graham responded that Mr. Flowers can make the modification. Other There was no other business. Adjourn Meeting adjourned at 5:41 p.m. Respectfully Submitted, Beth Graham, Chairperson Human Resources Committee Commissioner Zerkle commented that she has attended some city council meetings in the past few months and several of the council members stated that questions aren’t asked during the Regular Board Meetings. Commissioner Zerkle added that she stated that Commissioners ask questions of the staff during Committee Meetings when the information is presented. Chairperson Price thanked Commissioner Zerkle for her excellent point and affirmed that the Commissioners ask questions and have open discussions during the Committee Meetings where the real work is done, and at the Regular Board Meetings the resolutions are approved after the work has been done. MANAGER’S RECOMMENDATIONS There were no General Manager recommendations. UNFINISHED BUSINESS There was no unfinished business. NEW BUSINESS There was no new business. 16  RESOLUTIONS RESOLUTION 2025-03-01 Amending Appointment to Michigan Public Power Agency – Commissioner and Alternate WHEREAS, David Bolan is the Michigan Public Power Agency (MPPA) Commissioner on behalf of the Lansing Board of Water & Light (BWL), along with Lynn McKinstry and Constance Carantza, who serve as First and Second Alternate Commissioners, respectively; and WHEREAS, David Bolan will retire from his position with the BWL effective March 31, 2025; and WHEREAS, Lynn McKinstry will retire from her position with the BWL effective May 30, 2025; and WHEREAS, Roberto Hodge has been appointed to serve as the successor Chief Operations Officer after David Bolan’s retirement; and WHEREAS, Julie Spoering serves as the BWL’s Analyst of Bulk Power; and WHEREAS, it is necessary and in the best interest of the BWL to name a replacement MPPA Commissioner on behalf of the BWL. WHEREAS, it is necessary and in the best interest of the BWL to name a replacement for the BWL’s First Alternate on behalf of the BWL. NOW, BE IT RESOLVED, that Roberto Hodge is named the MPPA Commissioner on behalf of the BWL. NOW, BE IT RESOLVED, that Julie Spoering is named as the BWL’s First Alternate MPPA Commissioner. FURTHER RESOLVED, that Constance Carantza will remain as the Second Alternate Commissioner. Motion by Commissioner Tony Mullen, Seconded by Commissioner Sandra Zerkle to approve the Amending Appointment to Michigan Public Power Agency – Commissioner and Alternate Resolution at a Board meeting held on March 25, 2025. Action: Motion Carried. RESOLUTION 2025-03-02 Retirement Plan Committee Appointment Change and Revised Charter Approval WHEREAS, the Lansing Board of Water & Light (the “Sponsor”) sponsors the (a) Lansing Board of Water and Light Defined Benefit Plan and Trust for Employees’ Pensions; (b) Post-Retirement Benefit Plan and Trust for Eligible Employees of Lansing Board of Water and Light; (c) Lansing Board of Water and Light Defined Contribution Plan and Trust 1; (d) Lansing Board of Water and 17 Light Defined Contribution Plan and Trust 2; and (e) Lansing Board of Water and Light 457 Deferred Compensation Plan and Trust (collectively the “Plans”); and WHEREAS, the Sponsor created a formal committee effective September 27, 2016, the name of which is the “Retirement Plan Committee” (the “Committee”), to which the Sponsor delegated discretionary authority and responsibility for the discharge of certain duties, and the Sponsor appointed the following individuals to serve on the Retirement Plan Committee: Chief Financial Officer, Executive Director of Human Resources, and the Manager of Finance. Each Retirement Plan Committee member is appointed to serve on the Committee until his or her resignation or removal from the Committee; and WHEREAS, the Sponsor appointed the Director of Accounting, Finance, and Planning to replace the Manager of Finance on the Committee effective May 24, 2022; and WHEREAS, the Sponsor also appointed one voting member of the Board who shall also serve as a voting member of the Committee; one voting member of the Board who shall not serve as a voting member of the Committee except at Committee meetings at which the BWL Board of Commissioners’ voting member of the Committee is not present, or to break a tie vote; one BWL retiree to be chosen by the retirees according to a selection process determined by the retirees who shall serve as a voting member of the Committee; and one IBEW Local Union 352 bargaining employee to be chosen by the IBEW Local Union 352 according to a selection process determined by the IBEW Local 352 who shall serve as a voting member of the Committee effective May 23, 2023; and WHEREAS, due to a recent organizational change, the Sponsor has decided to replace the appointment of the Director of Accounting, Finance, and Planning on the Committee with the appointment of the Manager of Accounting, Finance, and Planning; and WHEREAS, the Sponsor approved the Retirement Plan Committee Charter on July 23, 2024; and WHEREAS, the Committee has revised its Charter and recommends it for approval by the Sponsor. THEREFORE, it is: RESOLVED, that the Sponsor replaces the appointment of the Director of Accounting, Finance, and Planning on the Committee with the appointment of the Manager of Accounting, Finance, and Planning on the Committee. FURTHER RESOLVED, that the Sponsor approves the revised Retirement Plan Committee Charter. Motion by Commissioner Semone James, Seconded by Commissioner Tony Mullen to approve the Resolution for Retirement Plan Committee Appointment Change and Revised Charter Approval at a Board meeting held on March 25, 2025. Action: Motion Carried. 18  RESOLUTION 2025-03-03 Restated DC Plan 2 WHEREAS, the Lansing Board of Water & Light (the “Sponsor”) sponsors the Lansing Board of Water and Light Defined Contribution Plan and Trust 2 (the “DC Plan 2”); and WHEREAS, the Sponsor uses the Internal Revenue Service preapproved prototype plan documents of Nationwide Retirement Solutions, Inc. (“Nationwide”), the third party administrator for the DC Plan 2; and WHEREAS, Nationwide migrated to a new plan document service provider, Actuarial Systems Corporation, while at the same time adding provisions related to the SECURE Act of 2019, the CARES Act of 2020 and the SECURE 2.0 Act of 2022, with provisions being mapped from the previous plan document and adoption agreement to ensure consistent operation of DC Plan 2 under the new documents; and WHEREAS, the Sponsor desires to amend and restate the DC Plan 2 effective January 1, 2025; and WHEREAS, the Sponsor has received and reviewed copies of the proposed DC Plan 2 Adoption Agreement, Basic Plan Document and Summary Plan Description (collectively “Plan Documents”); and WHEREAS, the Sponsor desires to approve and adopt the restated DC Plan 2 Plan Documents. NOW THEREFORE, it is: RESOLVED, that the restated DC Plan 2 Plan Documents are hereby approved and adopted, effective January 1, 2025; FURTHER RESOLVED, that any member of the Board of Commissioners, on behalf of the Sponsor, is authorized to execute the restated DC Plan 2 and any other documents that are necessary to implement the foregoing resolutions. Motion by Commissioner Semone James, Seconded by Commissioner Dale Schrader, to approve and adopt Restated DC Plan 2 at a Board Meeting held on March 25, 2025. Action: Motion Carried. RESOLUTION 2025-03-04 Resolution Honoring Tracy Thomas WHEREAS, it is a pleasure to extend this expression of our thanks and best wishes to Tracy Thomas for his service as a Commissioner of the Board of Water & Light; and, WHEREAS, Tracy Thomas was appointed as an At-Large Commissioner of the Board of Water & Light on July 12, 2008, to represent the City of Lansing; and 19 WHEREAS, He last served as a member of the Committee of the Whole and as Chairperson of the Human Resources Committee; and WHEREAS, Tracy has served 4 terms which encompassed 16 years and has served as Board Vice- Chairperson, Human Resources Committee Chairperson, Nominating Committee Chairperson and as a member of the Executive Committee; and WHEREAS, Tracy is a retired administrator of Waverly Community Schools; and holds a bachelor of science degree in Secondary Education and a master’s degree in K-12 Educational Administration from Michigan State University, East Lansing, Michigan; and has been involved in numerous leadership positions in the community; and WHEREAS, on behalf of his colleagues, employees of the Board of Water & Light and the citizens of Lansing, we offer our sincere gratitude for the time, energy, and talent he devoted as an At Large Commissioner of the Board of Water & Light. NOW THEREFORE BE IT RESOLVED, that the members of the Board of Commissioners, hereby honor and commend Tracy Thomas for his years of distinguished service in Regular Board Meeting this 25th day of March, 2025. We sincerely wish Tracy continued success in all his future endeavors and achieving that which is in the best interest of our community. David Price, Chairperson Semone James, Vice Chairperson J. R. Beauboeuf Stuart Goodrich Beth Graham DeShon Leek Tony Mullen Dale Schrader Robert Worthy Sandra Zerkle Motion by Commissioner Sandra Zerkle, Seconded by Commissioner Semone James, to approve the resolution of tribute for the outgoing Commissioner Tracy Thomas at a Board meeting held on March 25, 2025. Action: Motion Carried Unanimously. RESOLUTION 2025-03-05 Application of GASB Statement 62 to OPEB Plan Expense WHEREAS, pursuant to Resolution #2003-8-3, the Board of Commissioners requires management to receive Board approval before any deferrals under Financial Accounting Standards Board Statement 71, now Governmental Accounting Standards Board Statement 62 (GASB Statement 62); and 20 WHEREAS, the Lansing Board of Water & Light (BWL) can experience large fluctuations in actual and forecast annual Other Post Employment Benefit (OPEB) expense which may have an adverse effect on the stability and predictability of rates; and WHEREAS, the application of GASB Statement 62 allows the BWL to establish a regulatory asset account and amortize the OPEB expense over an extended period resulting in a more consistent annual expense that supports more stable and predictable rates. THEREFORE, it is: RESOLVED, that the Board of Commissioners, as the regulatory body of the BWL, approve, pursuant to GASB Statement 62, the establishment of a regulatory asset for the annual OPEB expense and an amortization period of twenty-five years, effective beginning in fiscal year 2026. Staff Comments: Although additional applications of GASB 62 occur infrequently, we have many existing applications of this accounting treatment that have been previously approved and are disclosed in our annual financial statements. These include such items as environmental remediation, fuel cost adjustments and contribution in aid of construction as well as others. Motion by Commissioner Semone James, Seconded by Commissioner Tony Mullen, to approve the Resolution for Application of GASB Statement 62 to OPEB Plan Expense at a Board meeting held on March 25, 2025. Action: Motion Carried RESOLUTION 2025-03-06 Appointee Budget Approval WHEREAS, it is the practice of the Lansing Board of Water & Light (BWL) for each department to annually submit for approval its proposed budget (both Operation and Maintenance (O&M) as well as Capital) for the upcoming fiscal year to management, an approval process which is a widely adopted business protocol; and WHEREAS, following management approval, the budget (O&M and Capital) is presented to the Board of Commissioners (Board) for final approval by June 1 as required by the Lansing City Charter; and WHEREAS, the individual budgets for (1) the Board, (2) the Internal Auditor, and (3) the Corporate Secretary are part of the annual budget submitted to the Board for approval; and WHEREAS, the General Manager’s expenditures are, except for the three individual budgets previously noted, the overall annual budget of the BWL, which is approved by the Board and subject to periodic status reports to the Board; and 21 WHEREAS, because the Appointees report directly to the Board, it is prudent and consistent with BWL business protocols for Appointees to present their individual budgets and the proposed budget developed for the Board to the Finance Committee for review and comment prior to submittal to the full Board for final approval. THEREFORE, it is: RESOLVED, that each Board Appointee, or their designee, will present their department budgets during the appropriate Finance Committee meeting as follows: (a) the Internal Auditor will present the budget for Internal Audit expenses, (b) the Corporate Secretary will present the budgets for the Board and Corporate Secretary, and (c) the General Manager will present the budgets for the BWL as a whole; and once approved by the Finance Committee, the entire budget submittal shall be presented to the full Board for final approval by June 1. Motion by Commissioner Tony Mullen, Seconded by Commissioner Dale Schrader, to approve the Resolution for Appointee Budget Approval at a Board meeting held on March 25, 2025. Action: Motion Carried. MANAGER’S REMARKS Assistant General Manager Heather Shawa remarked on the following: 1. In February, BWL received the prestigious Diamond Safety Award, a national recognition for safety excellence, from the American Public Power Association (APPA). 2. BWL’s REO Cogeneration Plant received the 2024 LM6000 Best Practice Award, for implementing key improvements and eliminating oil contamination from fuel-gas pipeline, to ensure compliance with emissions limits. 3. Thank you for your support at the Charter Commission meeting on March 18. 4. On March 19, we held our Ethnic Taste Fest. The event featured 25 dishes from various cultures prepared and served by our employees. We successfully raised $1,031, which will be donated to our Pennies for Power Program. 5. Dave Bolan’s retirement celebration is this Thursday at 3:00 p.m. at Depot. I hope you can join us in celebrating Dave’s 38 years of service at BWL. 6. Our next Community Resource Fair is on April 1 from 2-6pm at Gier Community Center. o This is our 11th resource fair. COMMISSIONERS’ REMARKS There were no public comments. MOTION OF EXCUSED ABSENCE Motion by Commissioner Semone James, Seconded by Commissioner Tony Mullen, to excuse Commissioners Beth Graham and Commissioner Chris Harkins from tonight’s meeting. Action: Motion Carried. 22  PUBLIC COMMENTS There were no public comments. ADJOURNMENT Chairperson Price adjourned the meeting at 5:51 p.m. LaVella J. Todd, Corporate Secretary Preliminary Minutes filed (electronically) with Lansing City Clerk 04-03-25 Approved by the Board of Commissioners: 05- -25 Official Minutes filed (electronically) with Lansing City Clerk: 05-__-25 23 From: Customer Service <customerservice@LBWL.COM> Sent: Tuesday, March 25, 2025 4:27 PM Submitted on Tue, 03/25/2025 - 4:27 PM Submitted by: Anonymous Submitted values are: Select a Commissioner: All Commissioners Name Max Howard Street Address Interlochen, Michigan. 49685 Message Hello, my name is Maxwell Howard and I am a reporter with WKAR. I recently was made aware of a comment made to the Lansing Charter that was urging them to modify the Lansing City Charter so that the Lansing City Council, and not the BWL’s Board of Commissioners, hires and directs the BWL’s internal auditor. I would like to speak to someone about your thoughts about this move. Is it a good idea or not? If you could give me a call or email me that would be excellent. My cell is 248-895-3642. Thanks 24  SPECIAL HUMAN RESOURCES COMMITTEE Meeting Minutes May 8, 2025 Human Resources (HR) Committee: Commissioner Beth Graham, Committee Chairperson; Commissioners Chris Harkins, DeShon Leek and Sandra Zerkle; Alternates: Tony Mullen, Dale Schrader; Non-Voting Members: Commissioners J. R. Beauboeuf, Stuart Goodrich, Robert Worthy The Special Human Resources Committee of the Lansing Board of Water and Light (BWL) met at the BWL Headquarters-REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:30 p.m. on Thursday, May 8, 2025. HR Committee Chairperson Commissioner Beth Graham called the meeting to order at 5:30 p.m. and asked the Corporate Secretary to call the roll. The following members were present: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle; also present: Commissioners Semone James (arrived @5:36pm), David Price, and Dale Schrader (Alternate); and Non-Voting Commissioners J. R. Beauboeuf (East Lansing) and Bob Worthy (Delta Township). Absent: None. The Corporate Secretary declared a quorum. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner DeShon Leek, Seconded by Commissioner Chris Harkins, to approve the HR Committee meeting minutes of March 18, 2025. Action: Motion Carried. FY 2025 Board Appointee Performance Reviews HR Committee Chairperson Beth Graham opened the floor for the Board Appointee Performance Reviews. Human Resources Executive Director Michael Flowers stated that the appointed employees have received their evaluation packets. Corporate Secretary Corporate Secretary LaVella J. Todd requested a closed session for the purpose of receiving her contractual year-end performance evaluation as permitted by the Open Meetings Act exemption MCL 15.268(a). 25 Motion by Chairperson Beth Graham, Seconded by Commissioner Chris Harkins, to go into closed session to discuss the contractual year-end performance evaluation of Corporate Secretary LaVella J. Todd. Roll Call Vote: Yeas: Commissioners Beth Graham, DeShon Leek, Sandra Zerkle and Chris Harkins. Nays: None. Action: Motion Carried. All Commissioners present and Human Resources Executive Director Michael Flowers were also requested to go into closed session. The Human Resources Committee went into closed session at 5:34 p.m. Motion by Commissioner Chris Harkins, Seconded by Commissioner DeShon Leek, to reconvene into open session. Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle Nays: None. Action: Motion Carried. The Human Resources Committee reconvened to open session at 6:15 p.m. Upon conclusion of the Closed Session, Chairperson Beth Graham stated that a resolution would be presented at the May 13, 2025 Human Resources Committee meeting. General Manager General Manager Richard R. Peffley requested a closed session for the purpose of receiving his contractual year-end performance evaluation as permitted by the Open Meetings Act exemption MCL 15.268(a). Motion by Chairperson Beth Graham, Seconded by Commissioner Chris Harkins, to go into closed session to discuss the contractual year-end performance evaluation of General Manager, Richard R. Peffley. Roll Call Vote: Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle Nays: None. Action: Motion Carried. All Commissioners present and Human Resources Executive Director Michael Flowers were also requested to go into closed session. Special Human Resources Committee Meeting May 8, 2025 Page 2 of 5 26 The Human Resources Committee went into closed session at 6:17 p.m. Motion by Commissioner Graham, Seconded by Commissioner Sandra Zerkle, to reconvene into open session. Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle Nays: None. Action: Motion Carried. The Human Resources Committee reconvened to open session at 7:03 p.m. Upon conclusion of the Closed Session, Chairperson Beth Graham stated that a resolution would be presented at the May 13, 2025 Human Resources Committee meeting. Internal Auditor Internal Auditor Elisha Franco requested a closed session for the purpose of receiving her contractual year-end performance evaluation as permitted by the Open Meetings Act exemption MCL 15.268(a). Motion by Chairperson Beth Graham, Seconded by Commissioner Chris Harkins, to go into closed session to discuss the contractual year-end performance evaluation of Internal Auditor, Elisha Franco. Roll Call Vote: Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle. Nays: None. Action: Motion Carried. All Commissioners present and Human Resources Executive Director Michael Flowers were also requested to go into closed session. The Human Resources Committee went into closed session at 7:04 p.m. Motion by Commissioner Sandra Zerkle, Seconded by Commissioner Chris Harkins, to reconvene into open session. Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle. Nays: None. Action: Motion Carried. The Human Resources Committee reconvened to open session at 7:41 p.m. Special Human Resources Committee Meeting May 8, 2025 Page 3 of 5 27 Upon conclusion of the Closed Session, Chairperson Beth Graham stated that a resolution would be presented at the May 13, 2025 Human Resources Committee meeting. Commissioner Zerkle asked if a motion to reappoint the three appointed employees is what was being sent forward. Mr. Flowers responded that contract discussions would be held with the three appointed employees before the presentation of the reappointment resolutions at the May 13, 2025 HR Committee meeting. Process for Appointee Market Analysis and Compensation Executive Director of Human Resources Michael Flowers stated that this agenda item is being presented per a request from a couple of the Commissioners for information about market analysis and compensation studies for classifications within the Board, pay grades and individual placements into positions. Mr. Flowers added that BWL has a compensation analysis committee that reviews non-bargaining unit positions. Mr. Flowers introduced Senior Compensation Analyst Jeanie Stittsworth who presented the process for appointee market analysis and compensation. The process included base pay structure, compensation studies, market data, survey data, BWL labor market, and comparison ratios. Commissioner Harkins asked if the market data for the 500-1000 employees’ company size range was for just utilities or all companies. Ms. Stittsworth responded that the data applies to both utilities and all companies. Commissioner Schrader asked whether the 75% percentile applied to the United States or to just Michigan. Ms. Stittsworth responded that it applied to BWL’s market for compensation of utility/energy and all industries nationwide. Mr. Flowers added that prior to the 75% percentile selection for compensation, initially the selection was 25% and then increased to 50% to maintain competitiveness and to attract and retain talent in the organization. Commissioner Zerkle asked what the pay scales were for the Boards’ appointed employees. Mr. Flowers responded that the Corporate Secretary pay grade is 11, the Internal Auditor pay grade is 12, and the General Manager pay grade is 21. Commissioner Schrader asked how many employees were in the pay grades 16-21. Mr. Flowers responded there were about 8 people in the organization. GM Peffley responded he has about five direct reports and there are senior directors as well. GM Peffley also stated the selection was increased to 75% because BWL was losing employees to other utilities. Commissioner Harkins asked how often the pay grade ranges change. Ms. Stittsworth responded that a compensation study and trends are evaluated annually in order to keep the comp ratios from reaching the maximum. Commissioner Harkins also asked how often other companies evaluate their pay grade. GM Peffley responded that one large investor owned utility company Special Human Resources Committee Meeting May 8, 2025 Page 4 of 5 28 evaluates pay grades every other year, and BWL bargaining unit salaries and entry level management salaries match theirs. Mr. Flowers added 2.5% was the increase this year in the range between pay grades. Commissioner Schrader requested the time frame between the change from the 25% to 50% percentiles and between the change from the 50% to the 75% percentile. Mr. Flowers responded that the 25% percentile was in effect 18 years ago and changed to 50% percentile shortly after, and the 50% percentile was in effect until 2020. Commissioner Graham asked if high income markets were also compared in addition to similar markets. Ms. Stittsworth responded that the current tool compares the Midwest. Mr. Flowers added that different areas are also compared besides utilities such as positions in finance, accounting, and engineering fields. Commissioner Leek asked if comparisons are made between same size utilities when the market is searched. Ms. Stittsworth responded that the labor market is based on a company’s employee size. Mr. Flowers added that there are several utilities around the country with the same employee size and customer base which are researched.Commissioner Worthy asked if benefits are factored into compensation. GM Peffley responded that total compensation is evaluated. Mr. Flowers confirmed and stated that the analysis is base wage only. Other There was no other business. Adjourn Meeting adjourned at 8:05 p.m. Respectfully Submitted, Beth Graham, Chairperson Human Resources Committee Special Human Resources Committee Meeting May 8, 2025 Page 5 of 5 29  HUMAN RESOURCES COMMITTEE Meeting Minutes May 13, 2025 Human Resources (HR) Committee: Commissioner Beth Graham, Committee Chairperson; Commissioners Chris Harkins, DeShon Leek and Sandra Zerkle; Alternates: Tony Mullen, Dale Schrader; Non-Voting Members: Commissioners J. R. Beauboeuf, Stuart Goodrich, Robert Worthy The Human Resources Committee of the Lansing Board of Water and Light (BWL) met at the BWL Headquarters-REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, at 5:00 p.m. on Tuesday, May 13, 2025. HR Committee Chairperson Commissioner Beth Graham called the meeting to order at 5:00 p.m. and asked the Corporate Secretary to call the roll. The following members were present: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle; also present: Commissioners Semone James, David Price, and Dale Schrader Absent: None. The Corporate Secretary declared a quorum. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner Chris Harkins, Seconded by Commissioner Sandra Zerkle, to approve the HR Committee meeting minutes of May 8, 2025. Action: Motion Carried. FY 2026 Board Appointee Resolutions Corporate Secretary Motion by Commissioner Sandra Zerkle, Seconded by Commissioner Chris Harkins, to forward the resolution reappointing LaVella J. Todd to the Charter position of Corporate Secretary for FY26 to the full Board for consideration. Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle Nays: None. Action: Motion Carried. General Manager Motion by Commissioner Chris Harkins, Seconded by Commissioner Sandra Zerkle, to forward the resolution reappointing Richard R. Peffley to the Charter position of General Manager for FY26 to the full Board for consideration. Yeas: Commissioners Beth Graham, Chris Harkins, DeShon Leek, and Sandra Zerkle 30 Nays: None. Action: Motion Carried. Internal Auditor Motion by Commissioner Chris Harkins, Seconded by Commissioner Sandra Zerkle, to forward the resolution reappointing Elisha Franco to the Charter position of Internal Auditor for FY26 to the full Board for consideration. Yeas: Commissioners Beth Graham, Chris Harkins and Sandra Zerkle Nays: DeShon Leek (Commissioner Leek stated he would not be voting in support at this time due to prior commitments not being fulfilled, but if they (commitments) are fulfilled, he would get back onboard.) Action: Motion Carried. Subsequent Steps for Board Appointed Employees Contracts Motion by Chairperson Beth Graham, Seconded by Commissioner Sandra Zerkle, to charge the HR Chairperson and the Board Chairperson with the task of working with the appointed employees on their respective annual merit considerations on behalf of the Board of Commissioners. Yeas: Commissioners Beth Graham, Chris Harkins and Sandra Zerkle Nays: None. Action: Motion Carried. Other There was no other business. Adjourn Meeting adjourned at 5:05 p.m. Respectfully Submitted, Beth Graham, Chairperson Human Resources Committee Human Resources Committee Meeting May 13, 2025 Page 2 of 2 31  COMMITTEE OF THE WHOLE Meeting Minutes May 13, 2025 The Committee of the Whole of the Lansing Board of Water and Light (BWL) met at the BWL Headquarters-REO Town Depot located at 1201 S. Washington Ave., Lansing, MI, on Tuesday, May 13, 2025. Committee Chairperson Semone James called the Committee of the Whole Meeting to order at 5:30 p.m. and asked the Corporate Secretary to call the roll. Present: Commissioners Beth Graham, Chris Harkins, Semone James, DeShon Leek, Tony Mullen, David Price, Dale Schrader, and Sandra Zerkle; and Non-Voting Commissioner Bob Worthy (Delta Township) Absent: Non-Voting Commissioner J. R. Beauboeuf (East Lansing) and Stuart Goodrich (Delhi Township) Corporate Secretary LaVella Todd declared a quorum. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner DeShon Leek, Seconded by Commissioner David Price, to approve the Committee of the Whole Meeting minutes of March 11, 2025. Action: Motion carried. The minutes were approved. RPC Update Chief Financial Officer, Scott Taylor, presented the Retirement Plan Committee update. Although market volatility has been significant, the Defined Benefit (DB) and Voluntary Employment Benefit Administration (VEBA) Plans have a well-diversified portfolio and RPC will continue to monitor strategic objectives and rebalance as appropriate. In the Defined Contribution 401(a) and Deferred Compensation 457(b) Plans, the State Street GTC Retirement Income Builder (RIB) Series of funds will go into effect on July 11, 2025 and education, workshops, and consultations will be scheduled. Market volatility has been significant in the latter two plans also and Nationwide has added links to their website to assist plan participants. The RPC is reviewing the Captrust contract as it expires May 31, 2025 and intends to extend the for contract for a temporary period while exploring the current retirement plan advisory service market. 32 A Ratification of Trustees of Retirement Plans resolution is being presented this evening for approval to forward to the Board due to the addition of Commissioner Chris Harkins and removal of former Commissioner Tracy Thomas. A ratification resolution will be brought forward each time there is a change in trustees. Commissioner Mullen requested a discussion for the next Committee of the Whole meeting regarding how individual Commissioners are appointed to the Retirement Planning Committee and requested the discussion include appointing the position of Board Chairperson and Vice- Chairperson. Commissioner Zerkle asked if the amount in the retirement plans which is in the market, stocks and bonds could be provided. CFO Taylor responded that the DB and VEBA plans have a specific target asset allocation and a reporting is received each month stating what is in each category. Nationwide will provide the information for the DC Plans if requested. The information can be sent to the Commissioners. Motion by Commissioner David Price, Seconded by Commissioner Beth Graham, to approve the updated Ratification of Trustees of Retirement Plans Resolution and forward it to the full Board for consideration. Action: Motion Carried. Return on Equity Agreement General Manager Dick Peffley noted that the Mayor and Lansing City Council need to pass the Return on Equity agreement and the rate of return for utilities aligns with the market and industry. Assistant General Manager Heather Shawa presented the Return on Equity Agreement Amendment No. 8. The recommendation is to extend the agreement an additional year with a payment of 6% of total budgeted board operating revenues. Upon approval of the agreement by the Board, the agreement will be forwarded to the City Council Ways and Means Committee on June 9, 2025 and then to the full City Council. Commissioner Schrader asked what would be paid if the actual revenue is lower than the projected revenue. AGM Shawa responded that 6% of the projected revenue amount provided in the budget is what will be paid. Commissioner Bob Worthy expressed concern that if BWL has a couple of bad years due to weather that is out of BWL’s control, and the actual revenue is lower than what is projected, BWL has no way to make the money back and the City will receive the same 6% amount that is in the projected budget. GM Peffley responded that those conversations have been held with the mayor and the agreement has been changed to a one year agreement so that adjustments can be made in future agreements with less of a detriment to both sides. Both BWL and the City can adjust their budgets accordingly. 33 Motion by Commissioner Sandra Zerkle, Seconded by Commissioner Dale Schrader, to approve the Return on Equity Agreement Resolution and forward it to the full Board for consideration. Action: Motion Carried. Watermain Replacement GM Peffley stated that BWL is working on the goal of replacing eight miles of watermain per year. The suspension of CSO by the city increased the cost for BWL as there was no longer sharing of the cost but the city is working on returning CSO. Water & Steam Distribution Manager, Todd Russell, and Water Operations Strategic Engineer, Derek Ambs, presented the Water Main Replacement presentation. The presentation included the BWL water system as a whole and the areas served, the water main replacement 25-year history, recent projects, backlog and replacement scenarios, BWL water main replacement planning and the capital budget. GM Peffley stated that although labor can be coordinated, it is a costly project and the water rates also include funding the two water plants. Grants have been applied for and received the last few years to help out. In response to Commissioner Harkins’ question of what the axis on the graph represented, Mr. Ambs responded that the axis in the backlog and replacement scenarios graph represents the cumulative number of miles of water main that are beyond useful life. Commissioner Leek asked the reason for the replacement of the 1950 Landel pipe that was installed. Mr. Ambs responded that there was a separate utility and separate treatment process that wasn’t good for the pipes. Commissioner Worthy commented that if all the pipe was rigid it would need to be excavated because it is welded together and asked if directional drilling was an option as there are additional savings. Mr. Russell responded that the joints slide together with a rubber gasket which seals and that directional drilling is already done but a majority of the time there are other utilities in the way. In response to Commissioner Harkins’ question of how often risk is assessed, Mr. Ambs responded that risk is reassessed every two years. Commissioner Schrader commented that a CSO contractor is $730 per foot and BWL is $400 per foot. Mr. Russell responded that there are only two or three CSO contractors that can perform a certain job and that causes the price to be driven up. Commissioner Zerkle asked if CSO was to be completed five years ago, when is the approximate timeline it will be completed. Mr. Russell responded that there is a 15 to 20 year delay and funding is required. Commissioner Zerkle asked how much of the 6% increase is for water main 34 replacement. GM Peffley responded that a bulk of the funding was from grants and water is 12% of BWL’s portfolio. Commissioner Schrader asked if part of the budget includes paying CSO contractors. Mr. Russell affirmed and stated about $5 million is for CSO work and $12 million for BWL in-house. Mr. Ambs added that there is also a line budget item for combined work of $2 million. Commissioner Mullen commented that half of Pleasant Grove on the south side was fixed and at a joint Board of Commissioners and City Council meeting, fixing the whole street in the city was discussed, and asked if this was in progress. Mr. Russell responded that BWL is working on the BWL half and works with the City of Lansing to do their part. IT and OT Update GM Peffley stated that cyber-attacks cost the U.S. $2 billion in 2023 and cost $16 billion in 2024. Chief Information Officer, Vern Myers, and Operations Technology Manager, Ray Moore, presented the IT and OT update. The update included cyber security and compliance. CIO Myers stated that there were over 1,000 posts of different vulnerabilities and threats, and on a monthly basis there are over 100,000 vulnerabilities within BWL devices and applications. CIO Myers stated that one of the major threat factors is email. Out of 288,000 emails in a three week period, about 1/3 were considered unwanted or malicious. BWL has several security defenses in place to mitigate threats. In response to GM Peffley’s request Mr. Moore provided the difference between IT and OT at BWL. IT is on the corporate side and includes HR, email and Financial systems; and OT is on the physical assets and includes technical systems that need their own networks and servers. IT is concerned about the confidentiality of information and it not getting into the wrong hands. OT is concerned about the availability of the information in order that systems are operating efficiently and within standards. Additionally, Mr. Moore presented on cyber resiliency and technology investments, cyber security and infrastructure improvements and accomplishments, and FY26 NERC CIP compliance initiatives. OT and IT are currently working on the CIP-003-9 project to implement with a deadline of April 1, 2026. Mr. Moore noted improvements in cybersecurity compliance resulted in acquiring additional cybersecurity insurance at a lower cost savings. Chairperson James asked what savings resulted. Mr. Moore responded that there was an additional million in coverage and would obtain the amount in savings and provide it to the Commissioners. Commissioner Schrader asked what NERC acronym stood for and Mr. Moore responded North American Electric Reliability Corporation and they are the governing body for the U.S. electric grid. 35 Commissioner Harkins asked whether there were any third party vendors not willing to participate in the upgrades in the security management controls. Mr. Moore responded that vendors know what is on the horizon and the government is working with the vendors to reduce the footprint. Commissioner Zerkle stated that when the system was last hacked the main concern was if something was done to the water and asked if that was still the top concern. GM Peffley affirmed as electricity can be bought and water cannot. GM Peffley added that a company was hired to attempt an attack and issues that were found were fixed. Mr. Moore stated that around 200,000 attacks, and up to 10 million attacks, occur in one day. Power Outage Circuit Drive Update General Manager Dick Peffley presented the power outage circuit drive update which included a grid of the transmission system of large poles around the city to which electric, solar, wind and gas plants attach and which tap off to about 25 substations. In the substations, which are like giant breaker panels, voltage reduces from 138,000 to 13,200. Primary circuits go out from the substations to about 200 feed areas throughout the city. When outages occur, the circuit that is down is determined, and priority of service is determined by the number of outages and the quickness of each project, as the goal is to restore 80% of outages in the first few hours. Commissioner Graham asked whether there is something that lights up that would indicate where a power outage is located and GM Peffley responded that there isn’t but smart meters indicate when a customer doesn’t have power. Commissioner Zerkle asked about emergency training that is provided and advice that is provided by experienced employees. GM Peffley responded that every storm has an after action report and discussions about what could have been done better and what was missed. Commissioner Schrader asked if there is a circuit down and mostly restored, whether a small amount of outage can be caused by a tree. GM Peffley responded that a small amount could be a fuse, or a wire, or a transformer. Commissioner Worthy asked if drones were utilized as additional spotters. GM Peffley responded that BWL has drones but the government requires pilot licenses and visual sighting of the drones while in operation. GM Peffley responded that use of drones in the future will be to use for storms and to check street lights for outages. Other Chairperson Semone James stated that the presentations were very good and expressed appreciation for all the hard work. 36 Motion by Commissioner Beth Graham, Seconded by Commissioner Sandra Zerkle for an excused absence for Commissioners J. R. Beauboeuf and Stuart Goodrich. Action: Motion Carried. Adjourn Chairperson James adjourned the meeting at 6:39 p.m. Respectfully Submitted, Semone James, Chairperson Committee of the Whole 37  FINANCE COMMITTEE Meeting Minutes May 13, 2025 Finance Committee: Tony Mullen, Committee Chairperson; Semone James; David Price; and Dale Schrader; Alternates: Beth Graham, Sandra Zerkle; Non-Voting: Commissioners J. R. Beauboeuf, Stuart Goodrich, Robert Worthy. The Finance Committee of the Board of Water and Light (BWL) met at the BWL Headquarters – REO Town Depot, located at 1201 S. Washington Ave., Lansing, MI on Tuesday, May 13, 2025. Finance Committee Chairperson Tony Mullen called the meeting to order at 6:52 p.m. and asked the Corporate Secretary to call the roll. Present: Commissioners Semone James, Tony Mullen, David Price, and Dale Schrader; Also Present: Commissioner Sandra Zerkle; and Non-Voting Commissioner Bob Worthy (Delta Township) Absent: None Corporate Secretary LaVella Todd declared a quorum. Public Comments There were no public comments. Approval of Minutes Motion by Commissioner James, Seconded by Commissioner Schrader, to approve the Finance Committee Meeting minutes of March 11, 2025. Action: Motion Carried. The minutes were approved. Chairperson Mullen stated that at the March 11, 2025 Finance Committee Meeting it was discussed to postpone the Board appointed employees’ payment signoff resolutions to today’s meeting and it will be postponed again until the July Finance Committee meeting. Financial Summary YTD Chief Financial Officer Scott Taylor presented the YTD Financial Summary. Days Cash on Hand is strong, retail sales are slightly outperforming, wholesale sales has been closer to budget the last three months, operating expenses are down due to less sales and purchase power, net income is better than targeted, and non-operating income and expense is outperforming and BWL received $910,000 in reimbursement for storm expense through the city from the state program. The capital budget is 25% under and two capital exceedances are being brought to the Committee tonight. The new energy budget is closer to budget now due to expenditures in March. In the Return on Assets section, Target ROA was added which is the long term target return expected to be achieved by for 2028. Debt to Total Assets is above the standard median 38 primarily due to how much energy BWL self-generates and how much it continues to invest in new energy programs. Capital Budget Exceedance Request for Electric Annuals Electric Transmission and Distribution Director, Wayne Lynn, presented the Capital Budget Exceedance Request for Electric Annuals. Annual expenditures include cable failures, pole failures, transformer purchases and pole replacements. An exceedance of $5,793,843 is being requested. Commissioner Price asked whether the storms in north Michigan that brought down thousands of poles would affect the replenishing of BWL’s supply. GM Peffley responded that BWL’s program to replace poles is nearing completion. BWL had a 10% pole failure rate in 2022, a 6% pole failure rate in 2023, and a 3% pole failure rate in 2024. Currently there is a 1% failure rate. Chairperson Mullen asked about the giant transmission poles being put in on Jolly and if the wires from the wood poles already there can be placed on the metal. GM Peffley responded that some meet the standards and Mr. Lynn added that transmission and distribution will be on some of the poles and some of the poles will no longer be needed. Commissioner Schrader asked if the $5 million exceedance was being requested to get BWL to the 1% failure rate and what would be the consequences if not spent. GM Peffley responded that BWL is at 1% and the exceedance would keep it there. Mr. Lynn responded that more degraded poles would be left in the system and BWL would be subject to more downed poles in storms and longer restoration times. Motion by Commissioner David Price, Seconded by Commissioner Dale Schrader, to approve the Resolution for the Capital Budget Exceedance Request for Electric Annuals and forward it to the Full Board for consideration. Action: Motion Carried. Capital Budget Exceedance Request for REO Steam Turbine Generator Overhaul Gas Plant Chiller Plant Maintenance Manager, Tom Dickinson, presented the Capital Budget Exceedance Request for REO Steam Turbine Generator Overhaul. The life cycle of a turbine is 30 years and the overhaul maintains the life of the turbine. Typically steam engines are scheduled for overhaul every eight years and the steam turbine was commissioned in 2013. The overhaul includes disassembly, inspection, repairs, and reinstall. Upon inspection, a broken blade was found increasing the cost of repairs. Commissioner Worthy asked if a postmortem could be done on the steel to find out if it was a manufacturing defect. Mr. Dickinson responded that the manufacturer is aware of the blade and don’t know the reason for it. Commissioner Worthy also asked if an active PM program is being added in addition to the repair. Mr. Dickinson responded that projects are scored for importance, severity, efficiency of units, preventative maintenance, and to satisfy the insurance 39 company. GM Peffley added that explanations for variances this high are reviewed by the BWL executive team and the overhaul could have been done at eight years but it is just a delayed expense. Motion by Commissioner Semone James, Seconded by Commissioner David Price, to approve the Resolution for the Capital Budget Exceedance Request for REO Steam Turbine Generator Overhaul and forward it to the Full Board for consideration. Action: Motion Carried. Cash Reserve Policy Change CFO Scott Taylor presented the cash reserve policy change. A request for approval for updates to the policy is being made. The return on equity to the City risk factor is being reduced from 50% to 25% to reflect the increase in frequency of payments to the city from semiannually to quarterly. The Debt Service risk factor is being increased from 8.3% of annual debt service to 25% for interest and 50% for principal to reflect the elimination of the debt service reserve fund. A minimum of 150 days cash on hand has been added to ensure the cash reserve requirement does not drop below the minimum level. Commissioner Zerkle inquired about the difference and effect of the days cash on hand in managing money, and if the minimum cash reserve requirement would help during storm recovery. CFO Taylor responded that there are fluctuations in the impact due to slight changes in the risk factor and operating expenses, and the cash reserve allows BWL to be more resilient during adverse events and did help during the storm recovery. Chairperson Mullen asked whether an increase in days would affect BWL’s credit rating. CFO Taylor responded that it would only help and be treated as positive by rating agencies. Commissioner Schrader asked why someone would not approve having more cash on hand. CFO Taylor responded that there is an optimal amount not to exceed and the FY26-31 Budget & Forecast presentation will provide further explanation. Commissioner Zerkle (inaudible) GM Peffley responded that the amount is placed into reserve and could be used someplace else, and it will have no effect on operations. Motion by Commissioner David Price, Seconded by Commissioner Dale Schrader to forward the Resolution for the Cash Reserve Policy Change to the full Board for approval. Action: Motion Carried. FY26-31 Budget Presentation GM Peffley stated that he requested a 5% budget cut from staff, excluding fuel and purchase power, without impact to service. Assistant General Manager Heather Shawa provided the strategic objectives for customers and community, workforce engagement and diversity, climate and environment, operational resilience and continuous improvement, and financial 40 stability. CFO Scott Taylor provided the key budget and forecast assumptions, sales volume history and forecast by utility, operating budget and forecast, capital budget and forecast, and next steps. CFO Taylor noted that conversion of steam to hot water will lower costs for BWL customers as hot water is 15% more efficient than steam. Commissioner Worthy asked if the savings of $2 million when prepaying for natural gas was hedging or prepaying or both. AGM Shawa responded that the savings were hedging. CFO Taylor noted that General Motors is planning to discontinue steam service in FY 2028, convert it to hot water, and self-service themselves. GM Peffley stated that General Motors has a corporate carbon neutrality goal of 0% but to meet this target, they will need to rely on their vendors to produce hot water offsite. GM Peffley will continue to negotiate with GM. Commissioner Zerkle asked if all steam would be eliminated by FY2031 and if General Motors would be going to electric. CFO Taylor responded that the current estimate is at 15 years. GM Peffley responded that electric is not an efficient way to heat steam, and putting in gas boilers would go against General Motors carbon neutrality goal. GM Peffley commented on having a plan in place to meet the required goals for new energy and compliance, but there is pressure from the federal government on those goals with the changes being made. GM Peffley added that the new renewable energy assets projects, for which contracts have been signed to start construction, are experiencing pressure from the government on not being able to use their lines to bring energy back. Also, if the state overturns the ability to overwrite zoning for wind and solar, the projects won’t proceed because the local zoning ordinances will ban the projects in their area. BWL has a backup plan and administration may change in the future. Director of Internal Audit Elisha Franco presented the Operating Budget & Forecast for the Department of Internal Audit. Corporate Secretary LaVella Todd presented the Operating Budgets & Forecasts for the Office of the Corporate Secretary and the Board of Commissioners. Commissioner Worthy asked how far pricing can be locked in for fuel. CFO Taylor responded that BWL’s hedging plan is for five years with diminishing percentages to which BWL can commit. Commissioner Worthy also asked how depreciation is figured. CFO Taylor responded that straight line depreciation is figured for assets and an appropriate life is assigned. GM Peffley added that depreciation is also figured into the capital budget and how much needs to be reinvested. Commissioner Worthy asked if no growth was expected in chilled water as there was no increase in the budget. GM Peffley responded that a couple of customers are interested in chilled water and if it moves forward, there will be growth. Commissioner Worthy commented on the adjustment of the 9.5% increase for water for four years in the prior forecast as it was disconcerting and it is good to see that it has been reduced in this forecast. GM Peffley responded that surrounding townships were double and Grand Ledge customers received a $50 set fee. He 41 added that there is legislation pending that will make the 9.5% look small, which BWL intends to fight. Motion by Commissioner David Price, Seconded by Commissioner Semone James to forward the Resolution for the FY26-31 Budget Resolution to the full Board for approval. Action: Motion Carried. Cash Receipts Audit Results Director of Internal Audit Elisha Franco presented the FY2025 Cash Receipts Audit Results. The audit examined the cash receipts and remittance process, procedures and documents from July 1, 2023 to June 30, 2024. The audit found that there were two medium risk findings in documentation. Incomplete information was entered but no actual variances existed. Five audit process improvements were recommended. The overall opinion rating for the audit was sufficient. Chairperson Mullen asked about the development of an annual fraud training program for all BWL employees. Ms. Franco stated that some employees didn’t have any knowledge of BWL’s ethics program and fraud policy and it was decided to add training as a recommendation. Commissioner Price asked what rating is better than sufficient. Ms. Franco responded that the highest rating is strong, second is sufficient, third is needs improvement, and fourth is unsatisfactory. Internal Audit Status Report Director of Internal Audit Elisha Franco presented the internal audit status report. The report included an audit update, issue status update, FY 2025 audit work plan and department items. The internal audit department will welcome an intern in May. Also, May is internal audit month and a brief campaign will be run through BWL announcements and HPTV. Other There was no other business. Adjourn Chairperson Tony Mullen adjourned the meeting at 8:42 p.m. Respectfully submitted, Tony Mullen, Chairperson Finance Committee 42  RESOLUTION 2025-05-XX Appointment of the Charter Position of Corporate Secretary WHEREAS, the Board’s Rules of Procedures specify that the Board is to appoint a Director and General Manager, Internal Auditor, and Corporate Secretary, at its first regular meeting following July 1st of each year or as soon as practicable thereafter. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of Corporate Secretary fiscal year 2025-2026 or until a successor is appointed, whichever last occurs: LaVella J. Todd, Corporate Secretary FURTHER RESOLVED, That the Chairperson of the Board of Commissioners is authorized to execute any and all contractual amendment documents which reflect merit adjustments recommended by the Human Resources Committee for FY 2025’s performance. -------- Motion by Commissioner __________, Seconded by Commissioner __________, to approve the reappointment of the Charter Position of Corporate Secretary for Fiscal Year 2025-2026 at a Board Meeting held on May 20, 2025. Roll Call Vote: Yeas: Nays: Action: 43  RESOLUTION 2025-05-XX Appointment of the Charter Position of Director and General Manager WHEREAS, the Board’s Rules of Procedure specify that the Board is to appoint a Director and General Manager, Internal Auditor, and Corporate Secretary, at its first regular meeting following July 1st of each year or as soon as practicable thereafter. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of General Manager for fiscal year 2025-2026, or until a successor is appointed, whichever last occurs: Richard R. Peffley, Director and General Manager FURTHER RESOLVED, That the Chairperson of the Board of Commissioners is authorized to execute any and all contractual amendment documents which reflect merit adjustments recommended by the Human Resources Committee for fiscal year 2025’s performance. -------- Motion by Commissioner __________, Seconded by Commissioner __________, to approve the reappointment of the Charter Position of Director and General Manager for Fiscal Year 2025-2026 at a Board Meeting held on May 20, 2025. Roll Call Vote: Yeas: Nays: Action: 44  RESOLUTION #2025-05-XX Appointment of the Charter Position of Internal Auditor The Board’s Rules of Administrative Procedures specify that the Board is to appoint a Director and General Manager, Internal Auditor, and Corporate Secretary, respectively at its first regular meeting following July 1st of each year or as soon thereafter as may be appropriate. RESOLVED, That the Board of Commissioners hereby appoints the following individual to the Charter position of Internal Auditor fiscal year 2025-2026, or, until a successor is appointed, whichever last occurs: Elisha Franco, Internal Auditor FURTHER RESOLVED, That the Chairperson of the Board of Commissioners is authorized to execute any and all contractual amendment documents which reflect merit adjustments recommended by the Human Resources Committee for FY 2025’s performance. Motion by Commissioner __________, Seconded by Commissioner __________, to approve the reappointment of the Charter Position of Internal Auditor for Fiscal Year 2025-2026 at a Board Meeting held on May 20, 2025. Roll Call Vote: Yeas: Nays: Action: Motion Carried. 45  RESOLUTION 2025-05-XX Ratification of Trustees of Retirement Plans WHEREAS, the Lansing Board of Water & Light (the “Sponsor”) sponsors the (a) Lansing Board of Water and Light Defined Contribution Plan and Trust 1; (b) Lansing Board of Water and Light Defined Contribution Plan and Trust 2; (c) Lansing Board of Water and Light 457 Deferred Compensation Plan and Trust; (d) Lansing Board of Water and Light Defined Benefit Plan and Trust for Employees’ Pensions; and (e) Post-Retirement Benefit Plan and Trust for Eligible Employees of Lansing Board of Water and Light (collectively, the “Plans”); and WHEREAS, the Sponsor desires to ratify and confirm the current Trustees of the Plan and clarify the appointment, removal and resignation dates of new and former Trustees of the Plans. THEREFORE, it is: RESOLVED, that the following individuals are ratified and confirmed as the current Trustees of the Plans as of the date hereof: • David J. Price • Sandra Zerkle • Anthony Mullen • Beth Graham • Deshon Leek • Semone James • Dale Schrader; and • Chris Harkins. FURTHER RESOLVED, that the appointment and acceptance of the following individuals to serve as Trustees of the Plans is hereby approved, ratified and confirmed as of the date stated below: • David J. Price, reappointment April 25, 2021 • Sandra Zerkle, reappointment April 25, 2021 • Anthony Mullen, reappointment April 25, 2021 • Beth Graham, reappointment April 25, 2021 • Deshon Leek, reappointment April 25, 2021 • Semone James, July 26, 2021 • Dale Schrader, August 14, 2023; and • Chris Harkins, January 27, 2025. FURTHER RESOLVED, that the resignation or removal of the following individuals from the position of Trustees of the Plans is hereby approved, ratified and confirmed as of the date stated below: • Tracy Thomas, January 26, 2025. 46 Motion by Commissioner ________, Seconded by Commissioner _____________ to approve the Resolution for Ratification of Trustees of Retirement Plans at a Board meeting held on May 20, 2025. 47  RESOLUTION 2025-05-XX Return on Equity (ROE) Renewal WHEREAS, the City of Lansing has expressed a desire to continue the Agreement Between the City of Lansing and The Board of Water & Light dated June 30, 1992 (the Agreement), which has been subsequently extended by means of seven Amendments thereto in 2001, 2012, 2013, 2018, 2020, 2022 and 2024, respectively; and WHEREAS, the Board of Commissioners Committee of the Whole (COW) considered the City of Lansing’s request on May 13, 2025; and WHEREAS, the General Manager recommended the Agreement be amended and extended by 1 year at a rate of 6% of total budgeted Board operating revenues. If actual operating revenues are higher than budgeted operating revenues, the return on equity payments will be calculated in the amount of 6% of actual operating revenues, effective July 1, 2025, and will be memorialized as Amendment No. 8; and WHEREAS, the COW has considered the proposed Amendment No. 8, agreed with the General Manager’s recommendation and approved the Amendment, including authorization for the General Manager to execute the Amendment, and the Amendment shall be forwarded to the Board of Commissioners for approval at the May 20, 2025 Board meeting. THEREFORE, be it: RESOLVED, the proposed Amendment No. 8 to the Agreement Between the City of Lansing and The Board of Water & Light dated June 30, 1992 is approved, including authorization for the General Manager to execute the Amendment. Motion by Commissioner_________, Seconded by Commissioner _________, to approve the Return on Equity (ROE) Renewal at a Board meeting held on May 20, 2025. Action: ________. 48  RESOLUTION 2025-05-XX Capital Project Exceedance: AE – Electric Annuals WHEREAS, Lansing Board of Water & Light’s (BWL) Policy F1-13, entitled Capital Project Exceedance Approval, requires BWL Board of Commissioners approval for annual capital projects that are expected to exceed their previously approved aggregate total budget amount by both 15% and $200,000 prior to completion of the project; and WHEREAS, the previously approved budget for Capital Project AE – Electric Annuals was $14,638,000; and WHEREAS, the projected final total cost for Capital Project AE – Electric Annuals is $20,431,843, should the project be completed; and WHEREAS, BWL staff and management reviewed the project cost in detail, which includes but is not limited to the rationale and circumstances for the increased budget projection; and WHEREAS, BWL staff and management recommends that the Capital Project AE – Electric Annuals projected spending be approved. THEREFORE, it is: RESOLVED, the BWL Board of Commissioners approve projected spending for Capital Project AE – Electric Annuals with a projected final total cost of $20,431,843. Motion by Commissioner _____, Seconded by Commissioner _________, to approve the Resolution for Capital Project Exceedance: AE – Electric Annuals at a Board meeting held on ________. 49  RESOLUTION 2025-05-XX Capital Project Exceedance: PE-20274 REO STG Overhaul WHEREAS, Lansing Board of Water & Light’s (BWL) Policy F1-13, entitled Capital Project Exceedance Approval, requires BWL Board of Commissioners approval for capital projects that are expected to exceed their previously approved designed budget amount by both 15% and $200,000 prior to completion of the project; and WHEREAS, the previously approved budget for Capital Project PE-20274 REO STG Overhaul was $965,153; and WHEREAS, the projected final total cost for Capital Project PE-20274 REO STG Overhaul is $2,595,067, should the project be completed; and WHEREAS, BWL staff and management reviewed the project cost in detail, which includes but is not limited to the rationale and circumstances for the increased budget projection; and WHEREAS, BWL staff and management recommends that the Capital Project PE-20274 REO STG Overhaul projected spending be approved. THEREFORE, it is: RESOLVED, the BWL Board of Commissioners approve projected spending for Capital Project PE-20274 REO STG Overhaul with a projected final total cost of $2,595,067. Motion by Commissioner _____, Seconded by Commissioner _________, to approve the Resolution for Capital Project Exceedance: PE-20274 REO STG Overhaul at a Board meeting held on May 20, 2025. 50  RESOLUTION 2025-05-XX Minimum Cash Reserve Requirement Policy WHEREAS, the Board of Commissioners (“Board”) is committed to maintaining a financially stable and resilient utility; and WHEREAS, the Board recognizes that a key element of preserving financial stability over extended periods of time and through varying economic conditions is maintaining adequate cash reserves; and WHEREAS, the Board adopted a Minimum Cash Reserve Requirement Policy (“Policy”) on May 22, 2018 via Resolution 2018-05-02; and WHEREAS, BWL staff have conducted a review of the Policy and recommends updating the Policy to strengthen its ability to preserve financial stability, better align with changes to risk and improve the policy language. THEREFORE, it is: RESOLVED, the Board approves the revised Minimum Cash Reserve Requirement Policy (Attachment A), which clearly defines a risk based methodology for establishing the Lansing Board of Water & Light’s minimum cash reserve requirements on an annual basis for each year of the succeeding six-year forecast period. Motion by Commissioner ______________, Seconded by Commissioner ______________, to adopt the revised Minimum Cash Reserve Requirement Policy at a Board meeting held on May ___, 2025. Action: __________. 51  RESOLUTION 2025-05-XX Fiscal Year 2026-2031 Budget and Forecast RESOLVED, that the Annual Operating and Capital Budget covering Fiscal Year 2026 is hereby approved as presented; and RESOLVED, that the Operating and Capital Forecast for the Fiscal Years 2027-2031 is hereby accepted as presented; and FURTHER RESOLVED, that the Corporate Secretary be directed to make the appropriate filings with the Lansing City Clerk’s office in accordance with the Lansing City Charter regarding the above actions. Staff Comments: Staff recommends an operating and maintenance budget of $399.4M and a capital budget of $214.9M for Fiscal Year 2026. The Operating and Capital Budget and Forecast for Fiscal Years 2026-2031 includes forecasted rate increases. The forecast rate increases are subject to revision and, in any case, prior to implementation, must be subject to the BWL’s formal rate setting process as per Lansing City Charter, Section 5-205 which refers to the BWL’s authority to set just and reasonable rates and defines the public hearing process. In accordance with the provisions of the Lansing City Charter, Article 5, Chapter 2, Section 5-203.5 and Section 5-203.6, staff recommends the Finance Committee approve the budget and forecast for presentation and adoption by the Board at its May 20, 2025 board meeting. Motion by Commissioner ____, Seconded by Commissioner ______________, to approve the Resolution for the Fiscal Year 2026-2031 Budget and Forecast at a Board meeting held on May 20, 2025. 52