Resolution Approving Sale of Stock by tic11239

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                               SUMMARY OF ACTIONS
                REGULAR MEETING OF THE BOARD OF PUBLIC UTILITIES
               OF SPRINGFIELD, MISSOURI, HELD THURSDAY, JULY 29, 2010


                         Board Members Present:

                                                 Thomas Finnie
                                                 Brian Hamburg
                                                 Mark McNay
                                                 Lisa Officer
                                                 Dianna Parker
                                                 Mike Peters
                                                 Patrick Platter
                                                 Tom Rankin
                                                 Dan Scott

1.   Opening Remarks

                Chairman Officer reminded the Board of the Special Board Meeting on
     Tuesday, August 10, to review the proposed 2011 Annual Operating Plan and Board
     Retreat.

2.   Approval of Minutes

                 Unanimously approved the Minutes of the Regular Board Meeting held
     June 17, 2010.

3.   Public Comment

                 None.

4.   Committee Reports

     --MANAGEMENT & FINANCE COMMITTEE

                  Unanimously adopted a resolution approving the acceptance and sale of
     Smurfit-Stone stock to be applied toward the utility debt of Smurfit-Stone Container
     Corporation and to authorize the General Manager to proceed in the future on similar
     matters without additional specific Board approval.

5.   Financial Statements

                 Unanimously approved the financial document, including the budget
     disbursements for the year-to-date through June 30, 2010.

6.   General Manager's Report

                 Received various reports.

                 The meeting adjourned at 4:28 PM.


                                             1
                                 MINUTES OF A
                    REGULAR MEETING OF THE BOARD OF PUBLIC
                       UTILITIES OF SPRINGFIELD, MISSOURI

             The Regular Meeting of the Board of Public Utilities of Springfield,
Missouri, was held at 301 East Central Street, Springfield, Missouri, on Thursday, July 29,
2010, at 3 PM.

             Present:
                                           Thomas Finnie
                                           Brian Hamburg
                                           Mark McNay
                                           Lisa Officer
                                           Dianna Parker
                                           Mike Peters
                                           Patrick Platter
                                           Tom Rankin
                                           Dan Scott

             Absent:
                                           Krystal Compas
                                           Brooks Miller

             Ex-Officio Board Member Present:

                                           Greg Burris

constituting a majority of the Board, and a quorum.

             In addition to the above Board Members, the following persons were present
at the meeting:

                                           Joel Alexander
                                           Renee Armstrong
                                           Amy Austin
                                           John Black
                                           Pam Elsaesser
                                           Mike Finch
                                           Gary Gibson
                                           Cheri Hamlin
                                           Janet Hudson
                                           Wes Johnson
                                           Gayla Jones
                                           Jerry Kennard
                                           Kyle McClure
                                           Scott Miller
                                           Stephanie O’Connor
                                           Brenda Putman
                                           Ray Ross
                                           Cara Shaefer
                                           Dawn Smith


                                       2
                                              Dean Thompson
                                              Lisa Turner
                                              John Twitty
                                              Mark Viguet

                 Mrs. Lisa Officer, Chairman of the Board, presided and called the meeting to
     order, and Mr. Tom Rankin, Secretary of the Board, served as Secretary of the meeting.

1.                Chairman Officer welcomed everyone to the meeting and reminded the
     Board of the Special Board Meeting on Tuesday, August 10, to review the proposed 2011
     Annual Operating Plan and Board Retreat. She stated that the meeting would begin at
     noon in City Utilities’ Training Center Classroom.

2.                Next, Chairman Officer presented Minutes of the Regular Board Meeting
     held June 17, 2010. Upon a motion duly made by Mr. Peters, and seconded by Mr.
     Rankin, the Board unanimously approved the Minutes.

3.                Next, Chairman Officer asked if there were any members of the public who
     wished to address the Board; there were none.

4.               The next order of business to come before the meeting was Committee
     Reports by Committee Chairmen.

     MANAGEMENT & FINANCE COMMITTEE

                   Mr. Mark McNay, Chairman of the Management & Finance Committee,
     called the committee to order. Mr. Twitty stated that a quorum of the Management &
     Finance Committee was not present, and asked that all attending board members vote on
     the committee. Mr. McNay asked Mr. John Black, General Counsel, to present item (4a) a
     resolution regarding authorization to sell stock:

                         WHEREAS, Smurfit-Stone Container Corporation (“Smurfit-Stone”)
                 and its affiliated corporations filed for Chapter 11 bankruptcy protection in
                 the United States Bankruptcy Court in the District of Delaware, Case No. 09-
                 10235, on January 26, 2009; and

                          WHEREAS, City Utilities of Springfield, Missouri, filed an
                 unsecured claim against the bankrupt estate in the amount of $59,399.91 for
                 prepetition utility services provided to Smurfit-Stone; and

                          WHEREAS, as part of the Smurfit-Stone plan of reorganization, City
                 Utilities received a distribution of 1,835 shares of Smurfit-Stone stock; and

                         WHEREAS, Smurfit-Stone (the Debtor) has made available to its
                 creditors through a Direct Registration System, a means by which it can sell
                 the stock it received from the bankruptcy proceedings; and

                         WHEREAS, City Utilities can reduce its loss from the bankruptcy by
                 selling the shares of Smurfit-Stone stock distributed to it through the
                 program; and



                                          3
                           WHEREAS, similar bankruptcy proceedings occasionally occur, and
                  it is in the best interest of the utility to be able to efficiently resolve these
                  claims by authorizing the General Manager to take such action necessary to
                  sell stock received through such proceedings.

                           NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF
                  PUBLIC UTILITIES OF THE CITY OF SPRINGFIELD, MISSOURI, that
                  the General Manager and his designees be and hereby are authorized to take
                  such action and execute such documents as may be necessary or convenient
                  to sell 1,835 shares of Smurfit-Stone Container Corporation stock received as
                  a distribution from the reorganized bankruptcy estate credited to the Debtor’s
                  account, for the benefit of City Utilities, and to authorize the General
                  Manager and designees to execute, sell, and proceed in future similar cases
                  without additional board approval.

                   Mr. Black stated that the bankruptcy of the Smurfit-Stone Container
     Corporation resulted in the utility having an unsecured claim of approximately $59,000.
     During the bankruptcy proceedings, stock was made available that can be sold and applied
     to the utility debt for Smurfit-Stone Container Corporation. Mr. Black said the result
     would be a recovery against the utility debt of approximately $45,000 should the Board
     approve the resolution. The procedures of the bankruptcy court and the requirements of
     the transfer agent require that the governing body specifically authorize the officer,
     designated as Mr. Twitty, to proceed. Mr. Black stated that the resolution would authorize
     Mr. Twitty to sell the stock and would further authorize the General Manager to proceed
     in the future with circumstances such as these without specific Board approval.

                  Mr. Black answered various questions from committee members.

                  Mrs. Parker arrived at the meeting at this time.

                  Mr. McNay asked for a motion to approve the resolution and to recommend
     same to the Board. Mr. Scott made a motion and Mr. Peters seconded the motion.

                   Mr. McNay moved to recommend Board adoption of item (4a) a resolution
     approving the acceptance of 1,835 shares of Smurfit-Stone Container Corporation stock
     and authorizing the sale of said shares to apply toward the utility debt of Smurfit-Stone
     Container Corporation. The resolution also authorizes the General Manager to proceed in
     the future on similar matters without additional specific Board approval.

                  Mrs. Officer stated that Mr. McNay has made a motion to adopt a resolution
     approving the acceptance of 1,835 shares of Smurfit-Stone Container Corporation stock
     and authorizing the sale of said shares to apply toward the utility debt of Smurfit-Stone
     Container Corporation. The resolution also authorizes the General Manager to proceed in
     the future on similar matters without additional specific Board approval. Mr. Platter
     seconded that motion. The Board unanimously adopted the foregoing resolution.

5.                 Next, Mr. Mike Finch, Associate General Manager – Finance/CFO presented
     the Financial Statements (Item 5a) and supporting documents (charts attached) for the
     year-to-date through June 30, 2010, for Board consideration.

                  Upon a motion duly made by Mr. Rankin, and seconded by Mr. Hamburg,


                                            4
the Board unanimously approved the Financial Statements and supporting documents,
including the attached budget disbursements.




                                  5
                                                                                                          City Utilities of Springfield, Missouri
                                                                                                     Board of Public Utilities Additional Information
                                                                                                              Summary of Disbursements
                                                                                                                       June 30, 2010

                                                                                                                    ($ In Thousands)

                                          Line
                                    Notes No.

                                             1     Public Utility Operating Fund:
                                             2          Claims And Accounts                                                                             $     30,659
                                             3          Wages And Salaries (Net)                                                                               3,885
                                             4          Other Payments                                                                                             0
                                             5          Public Utility And Water Utility Debt Service                                                              0
                                             6          Interfund Transfers (Net)                                                                                  0
                                             7          Interfund Transfers to Reimburse Public Utility for SW2 Disbursements                                   (549)
                                            8           Intrafund Transfers to SW2 Equity Fund                                                                     0
                                            9           Intrafund Transfers (Net)                                                                                 19
                                            10          Disbursements For Current Month                                                                       34,014
                                            11          Prior Months Disbursements                                                                           239,883
                                            12          Fiscal Year-to-date Disbursements                                                                    273,897
                                            13          Non-disbursed Budget Balance                                                                         240,788
                                    *       14           Total Budgeted Disbursements (Note 3)                                                               514,685

                                            15     Other Funds (Excluding SW2):
                                            16         Interfund Transfers                                                                                         0
                                            17         Intrafund Transfers                                                                                       (19)
                                            18         Disbursements For Current Month                                                                           (19)
                                            19         Prior Months Disbursements                                                                              7,767
                                            20         Fiscal Year-to-date Disbursements                                                                       7,748
                                            21         Non-Disbursed Budget Balance                                                                            9,549
                                    *       22         Total Budgeted Disbursements (Note 3)                                                                  17,297

                                            23     All Funds Disbursements (Excluding SW2)
                                            24           Fiscal Year-to-date Disbursements                                                                   281,645
                                            25           Non-disbursed Budget Balance                                                                        250,337
                                    *       26           Total Budgeted Disbursements (Note 3)                                                          $    531,982

                                            27     SW2
                                            28           Claims And Accounts                                                                                   8,625
                                            29           Wages And Salaries (Net)                                                                                  0
                                            30           Insurance Refunds                                                                                         0
                                            31           Debt Service                                                                                              0
                                            32           Intrafund Transfers from Public Utility to SW2 Equity Fund                                              549
                                            33           Interfund Transfers to Reimburse Public Utility for SW2 Disbursements                                     0
                                            34           Intrafund Transfers (Net)                                                                                 0
                                            35           Disbursements For Current Month                                                                       9,174
                                            36           Prior Months Disbursements                                                                          126,668
                                            37           Fiscal Year-to-date Disbursements                                                                   135,842
                                            38           Prior Fiscal Year-to-date Disbursements                                                             418,645
                                            39           Non-Disbursed Budget Balance                                                                         97,056
                                    *       40           Total Budgeted Disbursements (Note 3)                                                          $    651,543

                                            41     All Funds Disbursements
                                            42           Fiscal Year-to-date Disbursements                                                                   417,487
                                            43           Non-disbursed Budget Balance                                                                        347,393
                                    *       44           Total Budgeted Disbursements (Note 3)                                                              1,183,525




* See Accompanying Notes to Financial Statements
May not add due to rounding                                                                                     Page 20
           Working Capital By Month
                                Millions of Dollars

$120
                FY 2010
$100


$80


$60


$40
                                      5 Year (FY2005 – FY2009)
$20                                           High - Low

  $0
    Oct   Nov    Dec      Jan   Feb   Mar    Apr      May   Jun   Jul   Aug   Sep
        Operating Income
              Millions of Dollars



    $9.8



                                     $5.7
                   $4.1



    Actual        Budget            Variance
Fiscal Year To Date Through June 30, 2010
 Net Income, excluding MVA
              Millions of Dollars



    $12.4




                   $6.2              $6.2




    Actual        Budget            Variance
Fiscal Year To Date Through June 30, 2010
         Days Cash

 102
             82           75
                          60




Actual     Budget        Target
         June 30, 2010
       Restricted Fund Balances, SW2
                             Millions of Dollars

                     $497.9
  Operating Fund      7.2


                                          $295.7
     Construction
       Funds         373.0                  5.7
                                                   $167.4
                                           187.6
     Capitalized                                     3.6
   Interest Funds                                   73.9
                     50.8                  26.7     14.2
Debt Service Funds   52.8                  52.8     52.8
                     14.1                  22.9     22.9
     Equity Funds    2008                  2009     2010
                       September 30                June 30
     Accounts Receivable
             Millions of Dollars

          $13.4              $12.9
           2.1
                              3.0
Arrears

          11.3                9.9
Current


          Actual            Budget
            June 30, 2010
  Investment in Coal and Natural Gas
                          Millions of Dollars
                                 $24.1

          $20.7   $21.2
                                 5.3
                                        $16.5   $16.5
                  7.2
  Coal     8.9
                                                        $11.7

                                                 9.7
                                         12.4
                                 18.8                   5.1
Natural           14.0
          11.8
  Gas                                            6.8    6.6
                                          4.1

          Oct 1 Jun 30          Oct 1 Jun 30    Oct 1   Jun 30
            FY 2008                FY 2009        FY 2010
           Community Services
                  Thousands of Dollars

City of Springfield:
   Cash Payments in Lieu of Taxes        $ 8,289
   Utility Services                        6,567
   Public Transit Services                 2,347
   Relocations                             1,340
   Other Community Services                  157
       Total City of Springfield          18,700
Property Transfers and Other                  44
     Total                               $18,744

            Actual: 6.9%
            Target: 7% - 8%
6.                The next item to come before the Board was the General Manager’s report.

                  Mr. Gary Gibson presented the operations report. Regarding electric
     transmission and distribution, Mr. Gibson reported that work on the PIC west substation is
     progressing well and is estimated to be completed in August 2010. He said City Utilities
     received a credit memo from the transformer supplier, WEG Electric Corporation. Mr.
     Gibson stated that WEG was approximately 90 days late delivering a transformer; the
     credit memo for liquidated damages totaled approximately $250,000. He said the project
     is estimated to finish $350,000 under budget, and work was conducted by City Utilities’
     employees to reduce costs.

                  Mr. Gibson stated that during the time the Tree Management Policy was last
     updated in 2008, City Utilities committed that the goal would be to have the same tree
     canopy in the year 2029 that existed in 2009. He said an analysis was performed by
     ROLTA using aerial photography from 2009 which determined the service territory
     currently has 28.98 percent tree canopy. Mr. Gibson said that an analysis is planned for
     2014 to track progress. He noted that efforts with education and tree replacement coupons
     to customers will be used to increase the tree canopy.

                  Regarding natural gas, Mr. Gibson reported that the current 12-month futures
     price is $4.97/Dth versus $5.14/Dth last year, down approximately 3 percent. Last
     month’s futures price was $5.24/Dth. The current cash price is $4.36/Dth versus
     $3.10/Dth last year, up approximately 41 percent. Last month’s cash price was $4.40/Dth.

                 Mr. Gibson reported that the natural gas service to SW2 is complete. He
     reviewed a photograph of the plant contractor purging and commissioning at SW2.

                    Regarding water distribution and supply, Mr. Gibson stated that lake storage
     is currently at 88.4 percent. The historical average is 86.9 percent.

                   Mr. Gibson stated that construction is complete on the Southeast Booster
     Station. He said this station monitors pressures in the southeast portion of the system and
     automatically ramps up or down to ensure adequate pressures. Mr. Gibson reviewed a
     photograph of the booster station and said the station will allow City Utilities to delay
     future capital projects for a new water tank in the southeast portion of the water system.
     He said this project was also conducted by City Utilities’ crews in order to reduce costs.

                   Regarding SpringNet, Mr. Gibson reported that plans have been developed to
     provide Internet service to the new Expedia center in the old airport terminal. He said this
     work will be completed on a very aggressive time schedule to meet the requirements of the
     opening of this location. Service will be conducted in a staged approach with a 50 Mbps
     circuit in place by the August 20, 2010, deadline and the full 1,000 Mbps circuit will be
     completed on November 15, 2010. Mr. Gibson stated that City Utilities and Expedia
     entered into a 60-month agreement after the traditional provider for Expedia was unable to
     meet their requirements. He said City Utilities received a commendation from Expedia for
     quick response.

                   Regarding management services, damage claims & prevention and
     telecommunications, Mr. Gibson reported that bids were received and opened on July 15,
     2010, for the demolition of the Edge Supply and Comstock buildings. He noted that these
     bids are currently being evaluated.


                                            15
              Regarding transit, Mr. Gibson reported that ridership in June experienced a
slight decrease. June’s ridership totaled 120,541 rides compared to 122,044 rides in June
of last year, a decline of 1,503 rides or one percent. He stated that farebox revenues in
June increased from $69,198 in June 2009 to $72,676 in June 2010; an increase of $3,478
or five percent.

              Mr. Gibson said City Utilities participated in the American Public
Transportation Association’s (APTA) national “Dump the Pump” day on June 17, 2010,
by offering free bus rides to all passengers. Bus ridership for that day totaled 7,005 rides.
The average summer weekday ridership is 4,600.

              Mr. Gibson reported that a media event was held on Friday, July 16, 2010, to
unveil City Utilities’ new fleet of paratransit buses. He said the new fleet offers the low-
floor feature making it much easier for passengers that have difficulty negotiating steps to
enter and exit the coach. A ramp for passengers traveling in wheelchairs replaces the lift
that is used in the current fleet. Mr. Gibson stated that the new paratransit coaches also
have the “blue wave” design featured on the outside of the coach. This design is being
carried over to the bus stop signs and will be featured on the fixed route fleet of buses
when they are replaced. Mr. Gibson said the purchase of the coaches is being fully funded
through the American Recovery and Reinvestment Act of 2009.

              Regarding energy management and conservation, Mr. Gibson reported that
383 rebates and audits were processed in May 2010. The current total for the fiscal year is
5,749. Mr. Gibson stated that funds have almost been depleted; however, the programs
will remain open through August 2010 due to savings realized in other areas. Mr. Gibson
stated that rebates will not be processed in September, but there will be little impact on
customers. He said there will only be a delay in processing rebates until after the new
fiscal year beginning October 1, 2010. Mr. Gibson said that customers will be informed of
any delays.

             Mr. Gibson stated that a total of 667 units have been collected for the
Refrigerator & Freezer Recycling program, with 75 more units schedule to be collected
this week.

                Mr. Gibson reported that City Utilities has applied for the Neighborhood
Challenge Grant through the Missouri Department of Natural Resources – Energize
Missouri program. If successful, this grant would provide $500,000 to deliver an
EnergyWise Home Energy Report to an estimated 40,000 residential customers over a
period of 12 consecutive months. Mr. Gibson stated that this report will provide a
comparison of each customer’s own energy usage to a group of similar size homes in their
general geographic area to encourage voluntary energy reduction. The report will likely
create a peer competition atmosphere, which has proven to be a very effective method to
affect behavior change. Mr. Gibson said that additional information will be provided if
the utility is successful in receiving the grant; the expected award date is August 30, 2010.

              Next, Mr. Scott Miller, Associate General Manager – Electric Supply, gave
an electric supply update. Regarding electric transmission, Mr. Miller reported that the
Southwest Power Pool rate increase for the cost allocation for high voltage transmission
was approved by the Federal Energy Regulatory Commission (FERC) and the rate
increase has been implemented. Mr. Miller said that City Utilities and four other utilities
have jointly filed a request for a rehearing with FERC. He stated that a timeline has not


                                       16
 been set for the rehearing process, and the Board will be advised when more information
 is available.

             Mr. Miller reported that City Utilities’ peak record for one hour of energy is
802 MW. For June 2010, the highest energy usage was 757 MW and currently for July
2010 the highest energy usage is also 757 MW. Mr. Miller said although usage has not
reached the peak record for June 2010, an all-time June energy delivery record was set.
The record was 7 percent higher than June 2009 and 6 percent higher than the previous all-
time June record.

              Regarding SW2, Mr. Miller reported that work is being coordinated as
various crews strive to complete final work for the project. He said that a chemical clean
was conducted on the boiler and fans and motors have been tested and released for
operation. Mr. Miller noted that the original first-fire date has been moved from the week
of August 8 to the weekend of August 21, primarily due to workspace constraints around
the burner deck areas. He said that coordination has been made with City Utilities’
marketing department to publicly communicate information regarding the first fire. Mr.
Miller said that there are approximately 525 current workers on the project, and it is
anticipated that this number will drop significantly in August.

              Mr. Miller reviewed SW2 project contractual highlights charts. He stated
that external contracts for SW2 total approximately $8 million over the original budget for
these expenses and internal costs are currently $12 million under budget, resulting in
approximately $4 million under budget. Mr. Miller reminded the Board that additional
disbursement authority would be requested after the new operating plan becomes effective.
He stated that the original budget was $541 million and interest earnings are estimated to
total $16.7 million. The estimated cost of the project is $555 million. Mr. Miller stated
that the requested disbursement authority listed in the 2011 budget totals $557.9 million.
He said any funds included in the $557.9 million that are not allocated to the construction
and closing of the project would return to City Utilities’ finance department to be applied
to debt service.

              Mr. Miller answered various questions from board members.

               Next, Mrs. Lisa Turner, Director – Human Resources and Administration,
presented an administration update. Regarding marketing and communications,
Mrs. Turner reported that preparations are being made for the SW2 dedication ceremony
tentatively scheduled for November 10, 2010. A contract has been completed with Jimmy
John’s for eight bus advertisements. Mrs. Turner stated that radio spots to build awareness
of the Odd-Even watering program and the Refrigerator and Freezer Recycling program
will air through August 2010.

             Regarding benefits, employment and labor relations, Mrs. Turner reported
that Mr. Dick Wilson was elected as the new International Brotherhood of Electrical
Workers Business Manager. She said prior to being elected, Mr. Wilson was employed as
an Instrument Technician/Relief Operator in the water treatment area and previously
worked at both of City Utilities’ power stations.

               Mrs. Turner stated that as a result of the request for proposal process, The
Segal Company was selected as the new employee benefits consultant. The company will
assist with health care compliance/redesign, analyzing health care reform and analyzing the


                                       17
bids for a new pharmacy benefit manager currently with Medco that expires December 31,
2010.

               Mrs. Turner said that proposals for Long Term Disability (LTD) Insurance
are being requested. The contract is currently with Standard Insurance Company which
expires on September 30, 2010. She said included are optional proposals for employee-
paid, voluntary LTD insurance for union employees. Mrs. Turner stated that LTD provides
a benefit of 65 percent of income for total disability.

               Regarding safety, training, workers’ compensation and health management
areas, Mrs. Turner reported that a “Frontline Supervisor Leadership/Accountability
Training” was conducted July 27 through July 29, 2010, which focused mainly on safety.
She said this is the first time this type of training was offered and 70 of City Utilities’
frontline supervisors attended. The facilitator for the training, Mr. Dan Raines, was
employed with Georgia Power for 41 years, starting as a helper and ending his career as the
safety and training supervisor.

               Mrs. Turner reported that “Safety Day” events are scheduled for the natural
gas, water and electric areas on August 31, and September 1 and 2, 2010, respectively. She
noted that these are full days dedicated to safety that have been very successful in the past.

              Mrs. Turner stated that a “request for qualifications” has been issued for
consulting engineers to conduct the triennial review of City Utilities’ electric, natural gas,
transit and water systems. A triennial report is required due to bond ordinance. Mrs.
Turner said that the committee’s selection of the consultant is anticipated within two
months, with work to commence in the fall.

             Mrs. Turner stated that Mrs. Cheri Hamlin, Director – Benchmarking/Utility
Information gathers information for the Quarterly Scorecard which is part of the Quarterly
Update provided today to Board members.

              Next, Mr. Ray Ross, Director – Pricing, presented a natural gas procurement
strategy update. Mr. Ross stated that the primary driver of gas procurement is ensuring
that natural gas is available on the coldest winter day while also achieving the lowest
overall natural gas cost for customers. He said natural gas supply can be 70 – 85 percent
of what customers are actually paying. Managing the supply side is very important and a
mix of natural gas storage, fixed price contracts, long-term supply agreements, physical
call options and market purchases are used.

              Mr. Ross presented the following chart for the winter 2010-2011 natural gas
options and requirements:




                                        18
         Month              Firm          Storage          Contracts         Market
     December 2010        1,620,000          480,000        560,000          570,000

       January 2011       1,780,000          740,000        560,000          480,000

      February 2011       1,470,000          600,000        540,000          320,000
        March 2011         970,000           410,000        270,000          290,000

   Winter 2010 - 2011     5,840,000      2,230,000         1,930,000        1,660,000

                          100%               38%             33%             28%
              Mr. Ross reported that firm customers will need approximately 5.8 million
Dth of natural gas to meet winter heating requirements. He reviewed the percentages
supplied by storage, contracts and the market. Mr. Ross said that the inventory volume is
currently slightly ahead of what it has been in previous years and the decision was made to
hold natural gas in storage at a price less than reinjecting natural gas into storage. He said
1.8 million Dth is currently in storage at an average strike price of $3.62. Call options
acquired to date are 780,000 DTh at an average strike price of $6.39.

              Mr. Ross stated that call options are governed by the TEA Natural Gas
Financial Transactions Policy to limit customers’ exposure to natural gas price increases
and to allow participation in natural gas price decreases. Mr. Ross discussed the financial
tools to accomplish this objective.

               Mr. Ross noted that policy limits include maximum net annual exposure
limited to $4 million. He said this is the most that the program can cost customers on an
annual basis. The budgeted annual expenditure is limited to $10 million. Mr. Ross stated
that all costs or savings associated with this program are passed through to firm natural gas
customers.

              Mr. Ross discussed the following winter 2010 – 2011 options:

                          Average       Volume           Purchase          Market
         Option
                        Strike Price     (Dth)            Price            Value*
    Call – Nov. 2010       $6.38         200,000       $    37,000     $      25,202
    Call – Dec. 2010       $6.40         200,000       $    52,610     $      31,865
    Call – Jan. 2011       $6.43         170,000       $    59,600     $      38,218
    Call – Feb. 2011       $6.41         110,000       $    42,050     $      28,322
    Call – Mar. 2011       $6.30         100,000       $    41,500     $      27,660
    December - March       $6.39         580,000       $   195,760     $     126,065
    All                    $6.39         780,000       $   232,760     $     151,267
                                                                 *July 27, 2010 settle

              Mr. Ross reviewed the NYMEX winter strip for December 2010 through
March 2011.




                                        19
              Mr. Ross stated that many investors in natural gas are making decisions
based upon the amount of natural gas in storage. He reviewed a chart of U.S. natural gas
in storage and noted that this year natural gas has approximately a two percent deficit from
one year ago; however, record levels of storage existed one year ago. Mr. Ross said that
U.S. natural gas in storage is approximately 10 percent above the five-year average.

             Next, Mr. John Twitty, General Manager, reported that the SW2 dedication
scheduled for November 10, 2010, will recognize this very significant project.

              Mr. Twitty stated that City Utilities is almost ready to enter into an
agreement with two firms that are working together to provide the third study for the
potential location for a new bus transfer station. He said that more information will be
provided to the Board next month.

            Mr. Twitty reviewed the nine categories included in the quarterly Strategic
Business Objectives Scorecard.

            Mr. Twitty reviewed the following upcoming activities for the 2011 Annual
Operating Budget (AOB) and electric rate increase proposal:

                  •   Operating Plan Review
                      - Includes 2011 Annual Operating Budget
                      - Includes additional SW2 disbursement authority
                  •   Electric Rate Increase Proposal
                  •   Approval Process
                       - Board Study Session                   August 10, 2010
                       - Joint Board/City Council Meeting      August 17, 2010
                       - Citizens’ Advisory Council            August 19, 2010
                           • (Rate Increase Proposal Only)
                        - City Council (2011 AOB and Electric Rate Increase Proposal)
                           • First Reading                     September 7, 2010
                           • City Council Vote                 September 21, 2010

              Mr. Twitty discussed principles that guided City Utilities’ staff in the
preparation of the 2011 Annual Operating Budget. He stated that the utility is aware of the
economic realities and hopes the economy will begin to improve. Mr. Twitty said that the
2011 Annual Operating Plan and Budget is a very austere plan with minimum
requirements, and because the utility has seen flattening of customer growth and
consumption per customer across all three commodities, new capacity projects are being
pushed into the future. He said that the plan and budget are committed to customers, as it
is each year, and that for the three services provided realize customers have no other
sources for these services. Mr. Twitty said the utility is very sensitive about this and wants
to ensure that steps are made to put the customer first.

              Mr. Twitty stated that the theme going forward is that a different regulatory
environment exists today and this environment is causing City Utilities to spend funds that
were not spent in the past. He noted that this also translates into costs for customers. Mr.
Twitty said that City Utilities will always comply with regulatory mandates.




                                       20
              Mr. Twitty stated that City Utilities does not take lightly the AA credit rating
that has been received from the credit agencies. He said that procedures could be done
differently to put this credit rating at risk, but the utility plans to take steps to keep the
finances strong so that the AA credit can be maintained.

               Mr. Twitty said that the 2011 Annual Operating Budget does not include any
new debt; debt from last year has been taken out of the plan, most was capacity-related and
has been pushed to the future. Mr. Twitty said that if there is new debt to be issued, it
should only be issued if there is a specific increase in rates to pay the debt service. He said
City Utilities will work very hard to meet financial targets such as cash on hand and debt
service coverage, which are two principal pieces that rating agencies review.

              Mr. Twitty stated that there are significant policy issues that will require
Board guidance. He reminded the Board that earlier in the year they were asked to
prioritize some potential new expenditures. The following three policy issues would need
to be discussed by the Board:

                  •   Stockton 2nd Allocation
                  •   Energy Management and Conservation
                  •   Energy Efficiency Advance Program

              Regarding the Stockton allocation, Mr. Twitty stated that a letter was sent to
the Missouri Corps of Engineers stating City Utilities intends to purchase the second
allocation sometime prior to its availability date of 2016. He said the utility has also asked
the Corps of Engineers if they will accept payments in the amount of $300,000 per year
that will be set aside in the water area beginning October 1, 2010. These funds could be
used for this allocation, if accepted, as beginning payment while City Utilities has time for
a water rate increase to pay the debt service. Mr. Twitty said that the approximately $8
million cost of the second allocation should be financed over a lengthy period of time. He
said if the purchase needs to be made sooner, an out-of-sequence increase in electric or
natural gas could be obtained and cross subsidized for a period of time until a water rate
increase is in place, or an out-of-sequence water rate increase could be obtained. Mr.
Twitty said that a plan will be provided over the next year.

             Regarding energy management and conservation, Mr. Twitty stated that the
Board and City Council approved an increase in electric rates in 2006 to fund $1 million in
new energy management and conservation spending. He said that the question is whether
to spend more on these efforts, how much, and when. Mr. Twitty noted that Ms. Cara
Shaefer, Director-Energy Management and Conservation, provided a presentation at the
Board Retreat in April 2010. The presentation provided a plan for future energy
management and conservation efforts that would spend 1 percent of gross operating
revenues by 2015. Mr. Twitty said this is not included in the base rates provided in the
Operating Plan; however, it would take an additional .2 percent increase in electric rates in
each year of the three-year package which will be discussed. He said that additional
information will also be provided over the next month.

             Mr. Twitty stated that the Energy Efficiency Advance Program is basically a
program consisting of funds set aside for customers to improve the energy efficiency of
their home or business. The customer would pay funds back to City Utilities over an




                                        21
agreed upon period of time. Mr. Twitty said even if the decision is made not to provide
additional funding for energy management and conservation, rate authority could be
provided by adding a rider to the current electric rates being presented for approval. He
stated that when funds are available, the pilot program could begin.

             Mr. Twitty stated that a program approved by the General Assembly and
signed by the Governor allows cities and counties to issue Property Assessment Clean
Energy (PACE) bonds. He said there are approximately 20 states involved in the program.
Mr. Twitty said this could perhaps be a companion program to the energy efficiency
advance program. He said the programs were similar; however, bonds issued for the
energy efficiency advance program are issued by the city or county and the amount
borrowed by the customer becomes a lien on the property taxes. Mr. Twitty stated that a
meeting regarding this issue has been held with Greene County and a second meeting has
been scheduled.

              Mr. Twitty stated that mortgage buyers Freddie Mac and Fannie Mae have
raised questions regarding the PACE bonds. He said it is the understanding that the PACE
bonds take a first financial position; however, discussions are being held in an effort to
come to an agreement regarding this issue.

             Mr. Twitty stated that City Utilities could proceed with the electric rate
package in order to establish the rider, even if it is not funded at this early stage, so that the
rider would not need to be added at a later date. In addition, the PACE program could be
added in coordination with the City of Springfield and/or Greene County.

              Mr. Twitty answered various questions from Board members.

               Chairman Officer then asked if there were any other items to properly come
before the Board; there were none. Chairman Officer then asked if any Board Member had
any items for the Board to hear; there were none.

              The meeting adjourned at 4:28 PM.




                                               Tom Rankin, Secretary
                                               Board of Public Utilities of Springfield, Mo.

                                                                                     7-29-10




                                         22
                                      NOTICE AND TENTATIVE AGENDA OF A
                            REGULAR MEETING OF THE BOARD OF PUBLIC UTILITIES
                                         To be held Thursday, July 29, 2010, 3 PM
                             City Utilities' C. Frank Knox Board Room, 301 E. Central Street




1.   Opening Remarks                                                                                                L. Officer

2.   Approval of Minutes (2a)                                                                                       L. Officer

3.   Public Comment                                                                                                 L. Officer

4.   Committee Reports                                                                                  Committee Chairmen
     (any anticipated actions would be listed with the appropriate Committee)
           Audit Committee                                                                                         L. Officer
           Good Community Committee                                                                                 T. Finnie
           Human Resources Committee                                                                                P. Platter
           Management & Finance Committee                                                                          M. McNay
           • Resolution – Authorization to sell stock (4a)

5.   Financial Statements (5a) (reporting required and approved by the Board)                                       M. Finch

6.   General Manager's Report                                                                                        J. Twitty

           •      Operations Update (Gibson)
           •      Electric Systems Update (Miller)
           •      Human Resources and Administration Update (Turner)
           •      Natural Gas Procurement Strategy Update (Ross)
           •      Utility Update (Twitty)


Any other items that may properly come before the Board.

Closed Item.
                       Following completion of its agenda, the Board may, if a majority approves, hold a closed meeting to
consider matters included within the purview of Section 610.021 (1, 2, 3, 9, 13 or 17), RSMo. (Supp). (Resolution for any
closed session will specify subjects).




Posted:    July 28, 2010                                                        Estimated Meeting Time: 3 PM – 5 PM




Persons addressing the Board of Public Utilities are asked to step to the podium and clearly state their name and
address before speaking. All meetings are tape recorded.
In accordance with ADA guidelines, if you need special accommodations when attending any Board of Public Utilities
Meeting, please notify the Assistant to the Board at 831-8610 at least 3 days prior to the scheduled meeting.

								
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