07-31-2019 HUCMMINUTES
Regular Meeting - Hutchinson Utilities Commission
Wednesday, July 31, 2019
Call to order - 3:00 p.m.
President Don Martinez called the meeting to order., Members present, President Don
Conflict of Interest
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
'rTM=ui 7,171170siliner
Consent Agenda. Motion carried unanimously.
3. Approve Financial Statements
Mr. Marti:lg presented the financial statements. Electric Division Net Income
decreased by $8,710 mostly due to a decrease in Customer Revenue and Sales for
Resale. June was a cooler month. Natural Gas Net Income increased by $39,137
mostly due to increased customer revenue with increased usage, GM Carter added
everything istrending like it should, no concerns.
Motion by Commissioner Hanson, second by Commissioner Wendoirtif to approve
the financial statements, Motion carried unanimously.
5. Communication
a. City Administrator - Matthew Jauniich -
i. Continuing to work oni 5th Ave project
ii. South Grade road construction to start end oif Aiuguist
b. Divisions
ii. Dian Lang, Engineering Services Manager - Nothing to report.
ii. Dave Hunstad, Electric'Transmission,/Disitribution Manager-
1. Re-Coinductor upigrade on Chicago Ave
2, South Grade Road prep work to start
3, Working on RP3 appliication
iii. Randy Blake,, Production Manager -
1 Units 6 & 7 SCR's have been filled, HUC personnel are working on the
commissioning.,
2. Components for the luibe oi'l mist eliminator have been ordered and will
be installed for Unit 7.
I Quade's Electric is finishing up lighting
4. Elevation Coatings finished repainting Unit 1 modules,
5. Konecranes instaliled new hoisit above units 5, 6 and 7.
6. Unit 8 was shut down July 911 d�ue to a generator ground a�larmi, Had
field service come in to test and confirm a grounded rotor,
7. Unit 5 has a cracked valve seat, waiting on Wartsila to provide a cylinder
head,
8. Interviewed candidates for Maintenance Mechanic position.
iv, John Webster, Natural Gas Division Manager- Nothing to report
v. Jared Martig, Financial Manager- Nothing to report
c. Legal — Marc Sebora — Nothing to report
d. Human Resources - Brenda Ewing — Absent
e, General Manager — Jeremy Carter
i. 3M Feasibility Study on Co -generation early part of September. Will be
having discussions on the economic and financial effects.. Project size is
unknown.
ii. With Unit 8 being down, discussions will need to be had on the cost to repair,
iii. Dept. of Commerce have been having conversations on fuel switching.
iv, Continuing to work on strategic planning topics
v. Working with Director of EDA, IM,iles Seppelt, on perspective customer for
Industrial Park.
6. Policies
a, Review Policies
i. Appendices of Exempt Handbook
Appendices of Nopt Handbook
b. Approve Changes
7, Unfinished Business
a. Discussion of Exempt Employee Pay Performance System
GM Carter recapped the discussions that have been held on the Exempt Emiiploy
Pay Performance System and how to move forward with eliminating the lump su
payout. A Performance Guide Recommendation was sent out trying to keep
consideration as much as possible a progressive increase up to market and on
up, to market assuming that the grid is moving somewhat with cost of inflation th
there is regression of the percentages when and employee moves towards the
K
of their respective pay grade. From previous grid discussions, the lastest revised
grid has the last column broken out into two columns; one called Upper Middle and
the other called Max. This was done so there is the abillity depending on how an
employee scores in the performance based system to have an additional one
percent increase over the maximum column; range previously discussed. This was
changed to match more of what the cost of inflation may be and what may be similar
to what union negotiations may be moving forward along with trying tol line up
union/non-union as close to possible. This is all under the assumption that the
Commiission, will continue to move the grid with inflation. GM Carter also noted that
consideration was taken into account with market data and being externally
competitive. The other recommendation made was how to get out of the lump sum
pay system immediately and several options were discusseid; 1) Freeze the
employees" salaries unt�i�l the grid catches up 2) do a onetime move of the grid to
encompass all emiployees into the grid of 7% or 3) look at organization restructure.
GM Carter also discussed another piece that goes along with this which is, the
Integration of a new performance matrix grid to grade employees going forward. The
IhiStimetramewill mirror p with the upcoming union contract negotiations in
The Commission will then have market data to see if all of HUC's employees are stil�l
market competitive, if the grid is moving properly, and/or if shifts, need to be made.
Commissioner Hanson noted'thiat this is a delicate conversation and GM Carter did
a great job. Employees are doing well and utilities is running well. The priorities
have been to get in line with grid and with the peer group. Commissioner Hanson
added that he, is okay with making a grid change of 7%, because it is the right thing
to do. On,ly comment, understand going to a market based system every few years
doling study, job descriptions are accurate up to market.
President Martinilez noted that all employees need to be on the grid and is infavor of
eliminating the lump sum. A compensation study needs to be completed more often.
President Martinez added that the matrix and rating makes sense and is in, favor.
Commissioner Wendorff agreed and is in favor of a smooth transition.
Commissioner Morrow added that comparables with other utilities should be done
on a, regular basis. Hiowever, it's important to, note HUC's employees do a lot and
things done at HUIC are not the same as other municipal utilities.
GM Carted noted that no formal action is needed now but will be done at end of year
with budget.
8. New Business
a. Approve Requisition #79,27 — Spare Parts for Unit 5 W'artsila
Mr. Blake presented Approval of Requisition #7927 — Spare Parts for Unit 5
Wartsila. When Unit 5 was commiissionled in April 2013, it came with a few
*perating spare parts that mosby consisted of sensors and 0-rings. HUC woulli
like to purchase the recommended emergency spare parts for the rotating
portions of the engine. These parts will allow the mechanics, to perform
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miaiintenance repairs, on the engine if a failure would occur during normal
operations and return it to service a time,ly manner.
Commissioner Hanson inquired why 2 separate requisitions, Mr. Blake informe
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Mr. Blake presented Approval of Requisition #7933 — Spare Parts, for Unit 5
Wartsila. This requisition is the remainder of the recommended emergency spa
parts for Unit 5. 1
M1 =FF
Requisition #7933 — Spare Parts for Unit 5 Wartsila, Motion carried unanimously,
c. Approve Union Contract July 1, 2019 — December 31, 20,21
GIVI Carter presented Approval of Union Contract July 1, 2019, — December 31,
,20211, GM Carter recapped the conversations that were held between the Union
and management suib-committees. Both parties foed on negotiating a new
contract on a timely bases. The union and management sub -committees met
twice to discuss, and negotiate the tentative termis and conditions of a new contra(
upon final approval by the union and board of commissioners. On July 15, the
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which is in the commission packet. There are not many changes, Old positions
have been removed, some positions have been combined and a new GIS ploisitior
has been added along with a Temporary pilot program. Call -In minimal
compensation along wi'lth funeral leave for significant others were also among the
changes. This contract transitions into an annual cycle with a 2% wage increase
on July 2019 and 3,25% for Jan 2020 and Jan 2,021, Both sub -committees had
good negotiations. Commissioner Wendorff added'thiat negotiations went well;
management sub -committee listened to union sub -committee's concerns along
with union sub -committee listening to management sub -committee's concerns,
Commissioner Hanson agreed.
A motion by Commissioner Wendorff, second by Commiissioner Cheney to
Approve Union Contract July 1, 2019 — December 31, 2021,, Motion carried
unanimously.
d. Approve Unit 6 & 7 Air Emission Compliance Testing
Mr. Blake presented Approval of Unit 6 & 7 Emission Compliance Testing, Both
un,its need to have emission testing performed before the units can be entered int
cmmercial service. Interpol Laboratories has ppa erformed these tests in the st
and have .rood relationship with the EPA and MPCA. The testing wi�ll include thi
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Caterpillar performance and emission guaranties along with the Plant 1 air permit
requirements.
After discussion, a motion by Commissioner Cheney, second by Commissioner
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Hanson to Approve Unit 6 & 7 Air Emission Compliance Testing, Motion carrie4
unanimously.
Mr. Sebora presented Re -adopt the Data Practices Act & Public Records Request
® The State of Minnesota requires, that politicall subdiviisionis like HUC adopt
a data practices policy, which guides both the H'UC and members of the public in
obtaining information from HUC . State of Minnesota also requires that HUC adop),
the data practices policy annualily, prior to August 1.
A motion by Commissioner Hanson, second by Commissioner Morrow to Re-adlopit
the Data Practices Act & Public Records Request Policy. Motion carried
unanimously.
f. Declare ain Open Meeting for HUC"s Strategic Planning Being Aeld on
Thursday, August 29 from 9:00a.m. to 2:00p.m.
A motion by Commissioner Morrow, second by Commissioner Cheney to Declare
an Open Meeting for HUC's Strategic Planning Being Held on Thursday, August
from: 9:010ami to 2.00p.m. Motion carried, unanimously. I-
9. Adjourn
There being no further business, a motion by Commissioner Hanson, second by
Commissioner Wendorff to adjourn the meeting at 3:44p.m. Motion carried
unanimously.
Rol;ert We'ndorff, ecre
ATTEST.,
[56n Martine7, Presiden
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