11-24-2021 HUCM Special MeetingMINUTES
Special Meeting — Hutchinson Utilities Commission
Wednesday, November 24, 2021
Call to order — 2:00 p.m.
President Matt Cheney called the meeting to order. Members present: President Mat)
Morrow, GM Jeremy Carter; Attorney Marc: Sebora
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The purpose of the special meeting is to have a Budget Workshop,
GM Carter presented, HUC's 2022 preliminary budget. GIVI Carter first noted that these
are preliminary budget numbers and Commissioners will have 5 weeks to review before
final budget numbers need to be approved. Currently there are a few moving parts
regarding the budget numbers and some, areas may need to be revised, Staff is waiting
on receiving quotes regarding a few significant projects that will need to be completed in
2022. Union negotiations are also in process, currently included in the budget numbers
are a 4% wage increase for union emiployees and moving the pay grid for non -union
employees by 4%
GM Carter highlighted for combined division, revenues are at $43.5M with expenses at
$42.8M with a Net Profit of $740K, which was a decrease in net profit over last year.
Electric Division Revenues are at $29.3M with expenses at $297M with a Net Loss of
$368,K; thiis is about $100K worse than last year. Gas Division Revenues are at $14.2M
with expenses at $13.11M with a Net Profit of $1.1M which is about $400,K worse than last
year.
Electric Division, Retail Customer sales is at $25.2M which, is fairly consistent with last
year. Power Cost Adjustment is 1 A M compared to 1.3M in, 2021 which means HUC wiilll
not need to, collect as much as the past year. Residential, Small General, Large General
and Industrial Sales are fairly consistent with past years; which means HI:UC's loads are
fairly consistent. Overall kwhr sales are essentially flat.
Commissioner Hanson inquired about any companies going into a different rate class for
next year, GIVI Carter noted there is nothiing that shows that type of movement for 2022.
GM Carter pointed out that Sales for Resales is ticked up, due to increased market sales.
HUC is currently ruininiinig the units into the fall. There has been unplanned downtime;
which has increased the market prices. HUC has been able to capitalize on this by
runniingi into the Fall,
Other Revenues, of $39!7K is made up of Additional customer charges which include 12
months of collections, Interest Earnings and Bond Premiums.
GM Carter reviewed the Pictorial Graphs; these graphs show the overall comparison as
to how the revenue is derived. The Consumption History graph shows a snapshot of each
customer class, loads, which is fairly flat, As long as consumption stays consistent HUC
is, right on track with Glide paths. Overall consistent.
GM Carter spoke on the Electric Division Expense Budget Highllighits, Health Insurance
will be staying with Medica at a O�% increase/decrease. Dental Insurance will remain with
Argus but at a 19% increase. HUIC did shop around for both Health and Dental Insurance.
LTD, Basic Life and AD&D benefits remain the same, PILOT remains the same as the
2021 Budget, GM Carter reviewed on Expense of a $125K
increase, along with the MRES Baseload Contract Expense of a $493K decrease. Additional
Operating Expenses of $20K for Cost of Service Study, $42K for Equipment Breakdown
Coverage, $70K for Asbestos Removal, $37K for Borescope Inspection, RATA & Emissions
Testing, Permitting, $30K for LED Light Retrofitting Project and $300K for Increase in
Depreciation Budget were a,lso highlighted.
GM Carter reviewed the; pictorial graphs, of the Electric Division Expenses.
After discussion of the Electric Division preliminary buidget, GM Carter gave an: overview
I Division. Retail Customer Sales has an increase of $268K,and shows,
R
illy, t
& P opeirationi/maintenance Agreement.
GM Carter concluded by reviewing the pictorial graphs and expiense budget highiliglhts of
the Naturail Gas Division, GM� Carter noted that the Retai�l Customer Gas purchases show
14 M
Study, $300K for Transmission ROW Maintenance, Painting, diation following In -
line pectioin and $I OOK for Material following Ini-line Inspection.
Discussion was held on how the PILOT is based and if HUC is being fairly compensated.
GM Carter spoke of some capital projects that may need to be done at Plant 1 which
include Cooling Tower repairs, Elevator, and asphalt/concrete work in the parking lot,
Along with the LED Conversion, Natural Gas High Consequent Area and the Fleet
Schedule.
Budget Presentation.
There were no concerns from the Commissioners.
There being no further business, a motion by Commissioner Martinez second by
Commissioner Hanson, to adjourn the meeting at 2:54pm. Motion carried unanimou:sly.
ATTEST:'
Matt heney, president
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Don Martinez, Secretary