05-27-2020 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, May 27, 2020
Call to order — 3:00 p.m.
President Don Martinez called the meeting to order. Members present: President Don
Martinez; Vice President Matt Cheney; Secretary Robert Wendorff; Commissioner Monty
Morrow; Commissioner Anthony Hanson; GM Jeremy Carter; Attorney Marc Sebora;
Brenda Parsley with Conway, Deuth & Schmiesing Audit Firm
Conflict of Interest
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
Motion by Commissioner Morrow, second by Commissioner Cheney to approve the
Consent Agenda. Motion carried unanimously.
3. Approve 2019 Financial Audit — Presentation by Brenda Parsley
Brenda Parsley with Conway, Deuth & Schmiesing audit firm presented the 2019
Hutchinson Utilities Commission independent audit report. Ms. Parsley stated that
the audit was conducted in accordance with the Generally Accepted Auditing
Standards and Government Auditing Standards. The financial statements of the
Commission are presented fairly in the firms' opinion. Ms. Parsley reviewed the
Statement of Net Position. Assets and liabilities both decreased in 2019. Overall
Net Position did increase in 2019, which is the trend the last several years. Ms.
Parsley reviewed the Cash and Investment Balances.
Electric Division Operating Revenues and Expenses both decreased in 2019.
Natural Gas Division Operating Revenues decreased with Operating Expenses
increasing in 2019.
Ms. Parsley summarized the Communications portion of the report and the general
recommendations, which consist of cross -training and capital asset accounting
which have been recommended in past years. The third recommendation relates to
GASB 95. Due to. COVID-19, there has been a delayed implementation of certain
GASB's by 18 months — 2 years, which includes the lease standard. This is
something to keep in mind for the future that all leases need to be added to the
financial statements.
Commissioner Hanson inquired about a prior period adjustment on the balance
sheet in 2018. Ms. Parsley noted it was for post -employment benefits.
GM Carter reviewed the Revenue per KWH slide and Revenue per MCF slide of the
presentation. These slides are showing that the glide paths the Commission put in
place a couple of years ago are indeed doing what the intent was. GM Carter also
noted conversation points regarding the glide paths will need to be discussed this
summer.
GM Carter noted that IT costs increased due to the SCADA system and by placing
RTUs out in the field to start transitioning HUC to an updated software system.
Additional increases were Boiler and Property insurance. Overall, operationally if
labor, IT and insurance is removed, HUC is running flat or at a decrease in some
cases.
Motion by Commissioner Hanson, second by Commissioner Wendorff to approve
the 2019 Financial Audit. Motion carried unanimously.
4. Approve Financial Statements
Mr. Martig presented the Financial Statements. Natural Gas Division April 2020 is
very similar to April 2019 but continues to remain below 2019 levels due to a warmer
2020 1st quarter compared to 2019. Electric Division net loss increased by $197k
mostly due to decreased revenues. Residential class usage increased with
commercial classes decreasing. More than half the decrease in revenue can be
attributed to no power cost adjustment in 2020 compared to the power cost
adjustment bringing in an additional $105k in 2019.
GM Carter reviewed the residential and commercial loads along with the A/R
balances. Discussions were held on the loads and the options customers have
regarding payment of bills. Staff will continue to monitor the loads along with the
A/R balances.
Motion by Commissioner Cheney, second by Commissioner Morrow to approve the
financial statements. Motion carried unanimously.
5. Open Forum
6. Communication
a. City Administrator — Matthew Jaunich — Absent
b. Divisions
i. Dan Lang, Engineering Services Manager — Absent
ii. Dave Hunstad, Electric Transmission/Distribution Manager —Absent
iii. Randy Blake, Production Manager — Absent
iv. John Webster, Natural Gas Division Director — Absent
v. Jared Martig, Financial Manager-
1. Fixed Assets module is now live. Continuing to work on the Purchasing
module.
c. Human Resources - Brenda Ewing — Absent
d. Legal — Marc Sebora —
Nothing to report
e. General Manager — Jeremy Carter
i. Reviewed the Power Supply Mix for 2019
2
ii. Transformer bid update. Bid opening was today. Staff and CE Power will
review all the bid specifications. After review of the bids, Staff will come to
the Board with CE Power's recommendation. Conversations were held on
the lead times of the transformers.
iii. Reviewed the return to work guidelines for HUC. As of June 1, HUC will be
moving from the Orange Phase down to Green Phase. All employees will
return back to work, however there will still be no congregation of employees.
Alternative Work Schedule Request Forms were provided to vulnerable
employees if needed. Lobby will continue to be closed -until July 6, but may
reopen sooner if needed.
Discussions were held on any feedback that has been received by the
employees along with the impact to HUC due to the pandemic.
7. Policies
a. Review Policies
i. Section 5 of Exempt Handbook
ii. Section 5 of Non -Exempt Handbook
No changes recommended at this time.
b. Approve Changes
No changes recommended at this time.
8. Unfinished Business
9. New Business
a. None
Commissioner Hanson spoke of the Glide Paths and the internal review.
Conversations were held on when the review needs to be presented to the
Council. GM Carter will present an internal review at the July Board meeting.
10. Adjourn
There being no further business, a motion by Commissioner Hanson, second by
Commissioner Cheney to adjourn the meeting at 3:43p.m. Motion carried
unanimously.
Robert endorff, Sec ry
ATTEST:..
on Ma rtinez, reside