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03-27-2024 HUCCPHUTCHINSON UTILITIES COMMISSION AGENDA REGULAR MEETING March 27, 2024 3:00 p.m. 1. CONFLICT OF INTEREST 2. APPROVE CONSENT AGENDA a. Approve Minutes b. Ratify Payment of Bills 3. APPROVE 2023 FINANCIAL AUDIT — PRESENTATION BY JUSTIN MCGRAW 4. APPROVE FINANCIAL STATEMENTS 5. OPEN FORUM 6. COMMUNICATION a. City Administrator b. Divisions C. Human Resources d. Legal e. General Manager 7. POLICIES a. Review Policies i. Section 3 of Exempt Handbook ii. Section 3 of Non -Exempt Handbook b. Approve Changes 8. UNFINISHED BUSINESS 9. NEW BUSINESS a. Award Contract for Hutchinson Substation 115kV and 69kv Circuit Breakers b. Approve Req#009860 — Purchase of Cooling Tower Recirculating Pumps Plant 1 C. Approve Req#009861 — Renegade Professional Services Agreement d. LM6000 Update 10. ADJOURN MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, February 28, 2024 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 Kathy Silvernale; GM Jeremy Carter; Attorney Marc Sebora Absent: Commissioner Anthony Hanson; Commissioner Robert Wendorff Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Cheney, second by Commissioner Silvernale to Approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements Mr. Martig presented the Financial Statements. Revenues were down despite increased usage due to Power Cost Adjustment (PCA) bringing in $216k a year ago compared to zero dollars this year. PCA would have brought in $320k if HUC would have been below the threshold in the rate stabilization fund. HUC is now below the threshold so future PCA's can be expected. GM Carter spoke of Sales for Resales with a new customer starting in January. GM Carter reviewed the Industrial and Large General Classes for both Electric and Natural Gas Divisions noting some facilities being down. Purchase Power and PCA were also reviewed. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve the Financial Statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator —Matthew Jaunich — i. Council authorized to go out for bids for lighting project at the VMF ii. New grandstand was awarded for VMF. iii. In the middle of Strategic Planning '7=big0"017 i. Dan Lang, Engineering Services Manager — Nothing to report ii. Dave Hunstad, Electric Transmission/Distribution Manager — Nothing to report iii. Mike Gabrielson, Production Manager — 1. Tuck Pointing project to start soon iv. John Webster, Natural Gas Division Director — 1. Pipeline Emergency Responder Training tomorrow 2. MNOPs Audit to start in the next couple of weeks 3. Provided Heartland Corn Project Update v. Jared Martig, Financial Manager- Nothing to report c. Human Resources — Angie Radke - i. Working on a couple of Salary Surveys for surrounding areas d. Legal — Marc Sebora — i. Nothing to report e. General Manager — Jeremy Carter i. Q market survey ii. Backfilling Positions - Customer Service Rep and Natural Gas Welder Service Person iii. Legislative Updates iv. Cash Flow model - working on options moving forward 6. Policies a. Review Policies i. Section 2 of Exempt Handbook ii. Section 2 of Non -Exempt Handbook No changes recommended at this time. b. Approve Changes i. Equal Employment Opportunity Policy Ms. Radke spoke to the changes on the Equal Employment Opportunity Policy. The changes being made mirror the League of Minnesota EEO policy. Motion by Commissioner Cheney, second by Commissioner Silvernale to Approve the Policy Changes. Motion carried unanimously. 7. Unfinished Business 8. New Business a. Approval of 3M Natural Gas Transportation and Daily Swing Supply Agreement Mr. Webster presented Approval of 3M's Natural Gas Transportation and Daily Swing Supply Agreement. 3M's current agreement expires on March 1, 2024 at 9 A.M. This agreement provides transportation rights to 3M on Hutchinson's facilities from March 1, 2024 at 9.00 A.M. through March 1, 2025 at 9.00 A.M. This 2 agreement is identical to the 2023 agreement except for date changes and increased monthly meter fee. All fees are in alignment with the rate realignment structure proposed by the Commission for this customer. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve 3M Natural Gas Transportation and Daily Swing Supply Agreement. Motion carried unanimously. b. Approval of Natural Gas Facilities Maintenance Agreement — City of Fairfax Mr. Webster presented Approval of Natural Gas Facilities Maintenance Agreement — City of Fairfax. The City of Fairfax has requested HUC to continue to perform the maintenance on the natural gas transmission/distribution interconnect and the line control facilities serving all customers to the East on Highway 19 and the Cities of Fairfax and Gibbon effective April 1, 2024. Motion by Commissioner Cheney, second by Commissioner Silvernale to Approve Natural Gas Facilities Maintenance Agreement to the City of Fairfax. Motion carried unanimously. c. Approval of HTI/TDK Amendment to Natural Gas Transportation Agreement Mr. Webster presented Approval of HTI/TDK Amendment to Natural Gas Transportation Agreement. HTI/TDK has been purchased by a holding company. HUC needs to amend the agreement to allow bills to be sent to Highland Park Industrial, LLC located in Denver, Colorado. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve HTI/TDK Amendment to Natural Gas Transportation Agreement. Motion carried unanimously. d. Approve Req#009834 — 2024 GMC 1500 Pickups Mr. Lang presented Approval of Req#009834 — 2024 GMC 1500 Pickups. Looking at replacing two 2014 GMC 1500 pickups for the Production Department, per the fleet management schedule. Based on MN state bid pricing. Motion by Commissioner Cheney, second by Commissioner Silvernale to Approve Req#009834 — 2024 GMC 1500 Pickups. Motion carried unanimously. 3 9k. Approve Implementing a Protective Safety Footwear Policy Ms. Radke presented Approval of Implementation of a Protective Safety Footwear Policy. Currently a couple of departments do have safety footwear that is required in the departments. However, the Safety Committee and MMUA Safety Coordinator is recommending a formal policy to have all HUC Staff in the following departments to have protective safety footwear; Electric Division, Natural Gas Division, Plant Electricians, Production and Inventory. The budgeted amount will be reviewed every year. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve Implementing a Protective Footwear Policy. Motion carried unanimously. 9k. Discussion of Non -Union Grid Movement GM Carter started the conversation with the Non -Union Grid Movement. GM Carter provided information on what a 5% grid movement would mean for non- union employees. With the Union Contract passing at the January meeting that included a 5% increase for union employees, Staff would like to bring to the Commission an adjusted 5% grid movement for the non -union employees. Discussion was held about mirroring the 5% Union increase to the non -union employees. Commissioners stated that it does make sense to move and mirror the 5% movement with the non -union employees and would like to Approve the grid movement today. Motion by Commission Cheney, second by Commissioner Silvernale to Approve raising the Non -Union Pay Grid an additional 1 % to the 5% as presented by GM Carter. Motion carried unanimously. 9k. Approve Additional Cost of NSR Work for Unit 1 Mr. Gabrielson presented Approval of Additional Costs of NSR Work for Unit 1. The Commission has authorized GM Carter to approve up to $700k for NSR work on Unit 1. Staff is now requesting an additional $300k for a total of $1 M in NSR repairs. Mr. Gabrielson also provided an overall update on the balance piston and mid - shaft repair. Discussion was held on the additional NSR work and the time frame. Motion by Commissioner Silvernale, second by Commissioner Cheney to Approve Additional Costs of NSR Work for Unit 1. Motion carried unanimously. 12 9. Adjourn There being no Commissioner unanimously. ATTEST: further business, a motion by Commissioner Cheney, second by Silvernale to adjourn the meeting at 3:31 p.m. Motion carried Don Martinez, President 5 Kathy Silvernale, Secretary 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Description Fund: 1 ELECTRIC 03/05/2024 GEN 804874 ACE HARDWARE Sales Tax Receivable - Replace Supplies Generator 41 Material Maintenance Other - Materials HECK GEN 80487 TOTAL FOR FUND 1: Page 1/18 Account Dept Amount 186-000- 00 0.41 401-550- 01 15.79 402-554- 01 5.99 402-554- 01 29.91 52.10 03/05/2024 GEN 80488* ADEPT BLAST AND PAINT Grounds - Outside Services 401-935- 08 353.38 03/05/2024 GEN 80489* ALEX HLAVINKA DEP REFUND/APPLIED 235-000- 00 208.00 03/05/2024 GEN 80490* AMY MCNAMARA OR ZACHARY CHILSON DEP REFUND/APPLIED 235-000- 00 195.00 03/05/2024 GEN 80491* ANDREW HANSEN DEP REFUND/APPLIED 235-000- 00 91.00 03/05/2024 GEN 80492* ANTHONY MATHEWS DEP REFUND/APPLIED 235-000- 00 71.50 03/05/2024 GEN 80493* AUSTIN UTECHT DEP REFUND/APPLIED 235-000- 00 39.00 DEP REFUND/APPLIED 235-000- 00 91.00 HECK GEN 80493 TOTAL FOR FUND 1: 130.00 03/05/2024 GEN 80495*4 BORDER STATES ELECTRIC SUPPLY SPLICE, YS1J4W4W Al/CU 46 to 46 BURNDY 154-000- 00 66.50 DUST CAP, 600A, COOPER DPC625 154-000- 00 261.81 FUSE, SMU-20, 140K, 702140 154-000- 00 1,924.60 SILICONE LUBRICANT-SL-S 5OZ-HIGH 154-000- 00 28.40 LOAD TRACKER, UG 1.00-2.52, PDP 154-000- 00 5,682.00 ARRESTOR, ELL, IOKV, 3238018CIOM 154-000- 00 1,190.04 SILICONE LUBRICANT-SL-S 5OZ-HIGH 154-000- 00 28.40 Sales Tax Receivable - New 186-000- 00 4.57 Sales Tax Receivable - New 186-000- 00 152.27 Sales Tax Receivable - New 186-000- 00 472.46 Sales Tax Receivable - New 186-000- 00 1.95 HECK GEN 80495 TOTAL FOR FUND 1: 9,813.00 03/05/2024 GEN 80496* BRUCE REMUS DEP REFUND/APPLIED 235-000- 00 130.00 03/05/2024 GEN 80497* CAMERON WAGNER OR JENA FORTUN DEP REFUND/APPLIED 235-000- 00 260.00 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Description Fund: 1 ELECTRIC 03/05/2024 GEN 80499* CESAR ORTIZ 03/05/2024 GEN 80500* CHASE STEIL OR DELAINE VONGO 03/05/2024 GEN 80501*4 CINTAS CORPORATION 4470 03/05/2024 GEN 80502*4 CITY OF HUTCHINSON 03/05/2024 GEN 80503 CORE & MAIN 03/05/2024 GEN 80504 COUNTY OF MCLEOD 03/05/2024 GEN 80505* CRAIG OR STEPHANIE LOCH 03/05/2024 GEN 805064 CRANE ENGINEERING 03/05/2024 GEN 80507 DESIGN ELECTRIC, INC 03/05/2024 GEN 80508 DGR ENGINEERING 03/05/2024 GEN 80510 EDWIN RODRIGUEZ OR KARLA REYES 03/05/2024 GEN 80511* ELIZABETH SPENCER 03/05/2024 GEN 80512 FERGUSON ENTERPRISES 4525 03/05/2024 GEN 80513* FIRST CHOICE FOOD & BEVERAGE Page 2/18 Account Dept Amount DEP REFUND/APPLIED 235-000- 00 55.25 DEP REFUND/APPLIED 235-000- 00 52.00 Uniforms & Laundry 401-550- 01 255.31 Uniforms & Laundry 401-550- 01 255.31 UNIFORMS & LAUNDRY 401-588- 02 156.08 UNIFORMS & LAUNDRY 401-588- 02 156.08 HECK GEN 80501 TOTAL FOR FUND 1: 822.78 VEHICLE/EQUIPMENT FUEL -POWER 401-550- 01 167.07 Line - Materials 401-581- 02 5,500.00 VEHICLES/EQUIPMENT FUEL-ELEC 401-588- 02 1,111.70 VEHICLES/EQUIPMENT FUEL-ADMIN 55/45 401-935- 08 69.03 CHECK GEN 80502 TOTAL FOR FUND 1: 6,847.80 Meter - Materials 401-586- 02 1,377.39 Maintenance Other - Materials 402-554- 01 1.50 DEP REFUND/APPLIED 235-000- 00 130.00 T1-B80173R John Crane Seal Repair 402-554- 01 3,105.23 FREIGHT 401-588- 02 232.89 HECK GEN 80506 TOTAL FOR FUND 1: 3,338.12 Maintenance Other - Materials 402-554- 01 7.05 3M Substation SCADA 107-362- 00 16,356.00 STATION EQUIPMENT (SWITCHGEAR, 107-362- 00 44.00 HECK GEN 80508 TOTAL FOR FUND 1: 16,400.00 OVERPAYMENTS 142-000- 00 39. 06 DEP REFUND/APPLIED 235-000- 00 65.00 SERVICE CHARGE 401-588- 02 14.83 BREAKROOM/RECOGNITION BANQUET 401-926- 08 151.88 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Fund: 1 ELECTRIC 03/05/2024 GEN 80514* GABRIEL COOPER OR MADDISON MORA DEP REFUND/APPLIED 03/05/2024 GEN 80515* GABRIELA GARCIA DEP REFUND/APPLIED 03/05/2024 GEN 80516*4 GOPHER STATE ONE -CALL INC Line - Materials 03/05/2024 GEN 80517* GRANT MARCEAU DEP REFUND/APPLIED 03/05/2024 GEN 80518 GREAT RIVER ENERGY Outside Services 03/05/2024 GEN 80520* HEALTH PARTNERS DENTAL INSURANCE - 82% ELEC DENTAL INSURANCE - COBRA HEALTH INSURANCE-82o ELEC HECK GEN 80520 TOTAL FOR FUND 1: 03/05/2024 GEN 80521 HETTINGER, RON Training - Expense 03/05/2024 GEN 80522*4 HILLYARD/HUTCHINSON Supplies Grounds - Materials HECK GEN 80522 TOTAL FOR FUND 1: 03/05/2024 GEN 80523* HUTCHFIELD SERVICES 03/05/2024 GEN 80524 HUTCHINSON CO-OP 03/05/2024 GEN 80525 HUTCHINSON WHOLESALE SUPPLY CO 03/05/2024 GEN 80526 DADA OLIVIER 03/05/2024 GEN 80527* JASON T GIESEN 03/05/2024 GEN 80528* JEFF LIESTMAN 03/05/2024 GEN 80529* JEFFREY MACHADO 03/05/2024 GEN 80530* JODY OR BRIAN EERINESS 03/05/2024 GEN 80531* JOE FARNIOK 03/05/2024 GEN 80532 JOHN HENRY FOSTER Grounds - Outside Services Other Equipment - Materials Structures & Equipment - Mater OVERPAYMENTS DEP REFUND/APPLIED DEP REFUND/APPLIED DEP REFUND/APPLIED DEP REFUND/APPLIED DEP REFUND/APPLIED Parker Air Dryer Startup AAAQ22341 Account Dept 235-000- 00 235-000- 00 401-581- 02 235-000- 00 401-567- 03 242-000- 00 242-000- 00 242-000- 00 401-580- 02 401-550- 01 401-935- 08 401-935- 08 402-598- 02 402-592- 02 142-000- 00 235-000- 00 235-000- 00 235-000- 00 235-000- 00 235-000- 00 107-341- 00 Page 3/18 Amount 208.00 136.50 24.30 65.00 2,243.41 4,262.53 443.25 55,476.92 60,182.70 100.00 51.70 191.85 1,093.21 247.12 217.98 59.92 104.00 45.50 169.00 201.50 65.00 732.90 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Payee Description Account Dept Page 4/18 Amount Fund: 1 ELECTRIC Sales Tax Receivable - Replace 186-000- 00 9.35 HECK GEN 80532 TOTAL FOR FUND 1: 742.25 03/05/2024 GEN 80533* JONATHAN BOLLAND GET REFUND/APPLIED 235-000- 00 48.75 03/05/2024 GEN 80534 JUDY STRACHOTA OVERPAYMENTS 142-000- 00 90.11 03/05/2024 GEN 80535* JUSTINE NUTTER GET REFUND/APPLIED 235-000- 00 74.75 03/05/2024 GEN 80536 KYLE WENDLING Cip - Residential 401-916- 07 25.00 03/05/2024 GEN 80538 LEONA BRYGGER OVERPAYMENTS 142-000- 00 72.40 03/05/2024 GEN 80542* MAKAYLA NGUYEN GET REFUND/APPLIED 235-000- 00 52.00 03/05/2024 GEN 80543* MARCO TECHNOLOGIES, LLC OFFICE SUPPLIES 401-921- 08 521.68 03/05/2024 GEN 80544 MATHESON TRI-GAS INC Generator 41 Material 402-554- 01 210.37 03/05/2024 GEN 80545* MATTHEW KOTELNICKI GET REFUND/APPLIED 235-000- 00 123.50 03/05/2024 GEN 805464 MCC ENERGY SOLUTIONS, LLC I AM MANAGEMENT FEES 401-555- 02 3,900.00 IAM USAGE FEES 401-556- 03 3,050.00 CHECK GEN 80546 TOTAL FOR FUND 1: 6,950.00 03/05/2024 GEN 80547* MICHAEL OR ANGELA MASSMANN GET REFUND/APPLIED 235-000- 00 201.50 03/05/2024 GEN 80548* MICHELE KRIPPNER GET REFUND/APPLIED 235-000- 00 58.50 03/05/2024 GEN 80549* MICHELLE LINDEMEIER GET REFUND/APPLIED 235-000- 00 52.00 03/05/2024 GEN 80550 MIDWEST OVERHEAD CRANE Outside Services 402-554- 01 2,868.49 03/05/2024 GEN 80551* MYLES RICK OR MACKENZIE RICHARDSON GET REFUND/APPLIED 235-000- 00 104.00 03/05/2024 GEN 80552* MYRON SCHUETTE GET REFUND/APPLIED 235-000- 00 162.50 03/05/2024 GEN 80553* NATALI BASNEY GET REFUND/APPLIED 235-000- 00 55.25 GET REFUND/APPLIED 235-000- 00 107.25 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee Fund: 1 ELECTRIC CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Description 03/05/2024 GEN 80554* NOAH PARA 03/05/2024 GEN 80557* NUVERA 03/05/2024 GEN 80558*4 OXYGEN SERVICE COMPANY INC 03/05/2024 GEN 80559 03/05/2024 GEN 80560* 03/05/2024 GEN 80561 03/05/2024 GEN 80565 03/05/2024 GEN 80566 POWER MONITORS INC PREMIUM WATERS INC PRO AUTO & TRANSMISSION REPAIR SARAI ANDRADE SCHWEITZER ENGINEERING HECK GEN 80553 TOTAL FOR FUND 1: DEP REFUND/APPLIED TELEPHONE Supplies Supplies HECK GEN 80558 TOTAL FOR FUND 1 Meter - Materials OFFICE SUPPLIES -BOTTLED WATER VEHICLES - MATERIAL-ELEC OVERPAYMENTS SEL-751 Serial Cable Serial Cable Serial Cable Serial Cable SEL-751 Sales Tax Receivable - New Sales Tax Receivable - New Sales Tax Receivable - New HECK GEN 80566 TOTAL FOR FUND 1 03/05/2024 GEN 80567* SHRED RIGHT OFFICE SUPPLIES -SHREDDING SERVICES 03/05/2024 GEN 80569 STEVEN BEAUCHAMP SANTIAGO OVERPAYMENTS 03/05/2024 GEN 80570* TARA FELIPE OZUNA OR CHASE ISBEL DEP REFUND/APPLIED 03/05/2024 GEN 805714 TWO-WAY COMMUNICATIONS INC Maintenance Other - Materials Telephone 03/05/2024 GEN 80572* UNITED PARCEL SERVICE MAIL SERVICES - UPS, FEDEX Account Dept 235-000- 00 401-921- 08 401-550- 01 401-550- 01 401-586- 02 401-921- 08 402-598- 02 142-000- 00 107-362- 00 107-362- 00 107-362- 00 107-362- 00 107-362- 00 107-362- 00 186-000- 00 186-000- 00 186-000- 00 401-921- 08 142-000- 00 235-000- 00 401-921- 08 Page 5/18 Amount 162.50 58.50 1,938.99 112.42 2,136.50 12.24 169.16 68.98 3,460.01 117.32 60.61 62.56 64.51 3,256.73 237.87 20.97 7,504.48 16.33 67.99 97.50 ** VOIDED ** ** VOIDED ** 165.64 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Payee Description Account Dept Page 6/18 Amount Fund: 1 ELECTRIC 03/05/2024 GEN 80573* VERIZON WIRELESS TELEPHONE 401-921- 08 1, 084. 42 03/05/2024 GEN 80575 WANDA ANDERSON OVERPAYMENTS 142-000- 00 72.83 03/05/2024 GEN 805764 WARTSILA OF NORTH AMERICA, INC SENSOR, PRESSURE, 4516 541 154-000- 00 6,650.64 Sales Tax Receivable - Replace 186-000- 00 477.73 FREIGHT 401-588- 02 298.16 HECK GEN 80576 TOTAL FOR FUND 1: 7,426.53 03/05/2024 GEN 80577 WESCO RECEIVABLES CORP ABB Test Switch 107-362- 00 410.00 ABB Test Switch 107-362- 00 1,995.00 ABB Test Switch 107-362- 00 390.25 Sales Tax Receivable - New 186-000- 00 192.18 HECK GEN 80577 TOTAL FOR FUND 1: 2,987.43 03/05/2024 GEN 80578 WHEELHOUSE INDUSTRIAL Plant 2 Ladder Access Install 107-341- 00 8,018.35 Sales Tax Receivable - Replace 186-000- 00 551.26 HECK GEN 80578 TOTAL FOR FUND 1: 8,569.61 03/05/2024 GEN 80579 WILLIAM CONDON OVERPAYMENTS 142-000- 00 28.17 03/05/2024 GEN 80580 ZACHARY GONZALES OR SONJA SCHLEE OVERPAYMENTS 142-000- 00 104.88 03/05/2024 GEN 805814 ZIEGLER POWER SYSTEMS EXTENSION-SPARKPLUG 154-000- 00 3, 462.50 FREIGHT 401-588- 02 25.40 HECK GEN 80581 TOTAL FOR FUND 1: 3,487.90 03/20/2024 GEN 805824 ACE HARDWARE Supplies 401-550- 01 9.18 Maintenance Other - Materials 402-554- 01 11.30 Maintenance Other - Materials 402-554- 01 2.77 Line - Materials 402-594- 02 16.64 HECK GEN 80582 TOTAL FOR FUND 1: 39.89 03/20/2024 GEN 80583 ALEJANDRO COSTANERA OVERPAYMENTS 142-000- 00 16.77 03/20/2024 GEN 80584 ANTON CARIGIET OVERPAYMENTS 142-000- 00 17. 98 03/20/2024 GEN 80585 APR STORAGE OVERPAYMENTS 142-000- 00 622.62 03/20/2024 GEN 80586 ARI MILLER OVERPAYMENTS 142-000- 00 51.02 03/20/2024 GEN 80587 BEN STRITESKY Cip - Residential 401-916- 07 50.00 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Description Fund: 1 ELECTRIC 03/20/2024 GEN 80588 BETKER BUILDERS 03/20/2024 GEN 805894 BOLLFILTER PROTECTION SYSTEMS 03/20/2024 GEN 8059014 BORDER STATES ELECTRIC SUPPLY 03/20/2024 GEN 80592 BRYANT OR PAIGE NORDBY 03/20/2024 GEN 80593*4 CCP INDUSTRIES, INC 03/20/2024 GEN 80594 CENTRAL HYDRAULICS 03/20/2024 GEN 80595*4 CINTAS CORPORATION 4470 03/20/2024 GEN 80596*4 CITY OF HUTCHINSON Page 7/18 Account Dept Amount BILL BACK 142-000- 00 823.50 O-RING, 3040135 154-000- 00 26.20 O-RING, 3030520 154-000- 00 2.18 O-RING, 3040130 154-000- 00 15.92 PLUG, SCREWD SEALING, 2000189 154-000- 00 51.76 GASKET, 3270004 154-000- 00 4.24 FREIGHT 401-588- 02 21.93 HECK GEN 80589 TOTAL FOR FUND 1: 122.23 SHEILD, HOUSE SIDE, LED LIGHT, SOLID 154-000- 00 414.84 BULB, HIS LU, 250W, 85377 154-000- 00 199.80 PHOTO EYE, TWIST LOCK,(FOR LED) 154-000- 00 242.48 CONNECTOR, MULTI TAP STUD WITH COVER, 154-000- 00 839.50 STREETLIGHT, LED COBRA HEAD, BLACK 154-000- 00 355.68 Sales Tax Receivable - New 186-000- 00 28.52 Sales Tax Receivable - New 186-000- 00 30.41 Sales Tax Receivable - New 186-000- 00 57.72 Sales Tax Receivable - Replace 186-000- 00 10.67 Sales Tax Receivable - Replace 186-000- 00 24.45 Generator 41 Material 402-554- 01 155.22 TAX 401-588- 02 5.69 BATTERY, SIZE D 401-588- 02 82.80 TAX 401-588- 02 1.75 SAFETY VEST, RVZ2410SE, SIZE 2XL 401-588- 02 25.46 HECK GEN 80590 TOTAL FOR FUND 1: 2,474.99 OVERPAYMENTS 142-000- 00 151.01 Line - Materials 401-581- 02 168.03 Vehicles - Material 402-554- 01 188.21 Uniforms & Laundry 401-550- 01 255.31 Uniforms & Laundry 401-550- 01 255.31 UNIFORMS & LAUNDRY 401-588- 02 156.08 UNIFORMS & LAUNDRY 401-588- 02 156.08 HECK GEN 80595 TOTAL FOR FUND 1: 822.78 Generator 41 Water & Sewer 401-547- 01 568.65 Generator 41 Water & Sewer 401-547- 01 184.69 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee Fund: 1 ELECTRIC CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Description 03/20/2024 GEN 80597 COUNTY OF MCLEOD 03/20/2024 GEN 80598 DGR ENGINEERING 03/20/2024 GEN 80601*4 FIRST CHOICE FOOD & BEVERAGE 03/20/2024 GEN 80602 FITZPATRICK, BRANDON 03/20/2024 GEN 80603 GIDEON KRIENKE 03/20/2024 GEN 80604*4 GOPHER STATE ONE -CALL INC 03/20/2024 GEN 80605 GREAT RIVER ENERGY 03/20/2024 GEN 80606* HILLYARD/HUTCHINSON 03/20/2024 GEN 80607 HUGO MEDRANO 03/20/2024 GEN 80608*4 HUTCHINSON LEADER 03/20/2024 GEN 80609 HUTCHINSON WHOLESALE SUPPLY CO Page 8/18 Account Dept Amount Waste Disposal 401-550- 01 782.81 Waste Disposal 401-550- 01 41.81 Waste Disposal 401-550- 01 578.53 Line - Materials 402-594- 02 145.81 Cip- Commercial 401-916- 07 2,706.90 IT ADMIN AND SUPPORT 75/25 401-921- 08 2,622.94 IT ADMIN AND SUPPORT 75/25 401-921- 08 3.00 IT ADMIN AND SUPPORT 75/25 401-921- 08 9,515.79 Dues/Membership Expense 401-930- 08 345.00 Utility Expenses - Water/Waste 401-930- 08 547.25 Utility Expenses - Water/Waste 401-930- 08 12.40 HECK GEN 80596 TOTAL FOR FUND 1: 18,055.58 Street Lighting - Materials 402-596- 02 45.75 3M Substation SCADA 107-362- 00 5,133.00 STATION EQUIPMENT (SWITCHGEAR, 107-362- 00 67.00 Hutchinson Sub 115kV Rebuild 107-362- 00 7,020.00 STATION EQUIPMENT (SWITCHGEAR, 107-362- 00 430.00 HECK GEN 80598 TOTAL FOR FUND 1: 12,650.00 BREAKROOM/RECOGNITION BANQUET 401-926- 08 437.70 Uniforms & Laundry 401-588- 02 224.99 OVERPAYMENTS 142-000- 00 45.88 Line - Materials 401-581- 02 251.10 TRANSMISSION EXPENSE 401-565- 03 125,314.95 Grounds - Materials 401-935- 08 51.81 OVERPAYMENTS 142-000- 00 57.06 Station Equipment (115Kv & 69K 107-353- 00 135.22 Cip - Marketing 401-916- 07 337.50 Advertising/Printing 401-921- 08 352.00 HECK GEN 80608 TOTAL FOR FUND 1: 824.72 Structures & Equipment - Mater 402-592- 02 (1.08) Vehicles - Material 402-598- 02 77.98 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # Payee Fund: 1 ELECTRIC 03/20/2024 GEN 80610 ISD 423 CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Description 03/20/2024 GEN 806114 JASPER ENGINEERING & EQUIPMENT 03/20/2024 GEN 806134 JOHN HENRY FOSTER 03/20/2024 GEN 80614 KELSEY EBLEN 03/20/2024 GEN 80615*4 LEAGUE OF MN CITIES INS TRUST 03/20/2024 GEN 806174 MCMASTER-CARR SUPPLY COMPANY 03/20/2024 GEN 806184 MIRATECH Page 9/18 Account Dept Amount Vehicles - Material 402-598- 02 203.05 HECK GEN 80609 TOTAL FOR FUND 1: 279.95 Cip- Commercial 401-916- 07 3,119.91 Cip- Commercial 401-916- 07 7,403.64 Cip- Commercial 401-916- 07 3,537.00 HECK GEN 80610 TOTAL FOR FUND 1: 14,060.55 Sales Tax Receivable - Replace 186-000- 00 598.65 SE-2F1-90-7-TPU-035 402-554- 01 6,936.00 FAK-10A 402-554- 01 477.40 FAK-10B 402-554- 01 861.00 PETK-2D 402-554- 01 100.20 ET-8C(1 pack) 402-554- 01 35.70 ET-8C( 5 pack) 402-554- 01 90.37 FREIGHT 401-588- 02 207.00 HECK GEN 80611 TOTAL FOR FUND 1: 9,306.32 FILTER, AIR/OIL SEPERATOR, SPIN ON, 154-000- 00 568.86 OIL, COMPRESSOR, QYN-SYN PLUS, QUINCY 154-000- 00 1,401.52 Sales Tax Receivable - Replace 186-000- 00 86.34 Sales Tax Receivable - Replace 186-000- 00 142.45 Zek Service AAAQ22340 402-554- 01 1,865.50 Generator 41 Outside Services 402-554- 01 4.42 FREIGHT 401-588- 02 101.63 HECK GEN 80613 TOTAL FOR FUND 1: 4,170.72 OVERPAYMENTS 142-000- 00 37.41 PREPAID INSURANCE 174-000- 00 116, 482.80 THERMOMETER, 3" BIMETAL, 4" STEM, 0-200 154-000- 00 150.76 GAUGE, 0-160, 2 1/2", 1/4" BOTTOM 154-000- 00 246.96 Sales Tax Receivable - Replace 186-000- 00 28.27 FREIGHT 401-588- 02 13.55 HECK GEN 80617 TOTAL FOR FUND 1: 439.54 VALVES & GASKET TO SAMPLE GAS PUMP 154-000- 00 310.76 FREIGHT 401-588- 02 41.85 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Payee Description Account Dept Page 10/18 Amount Fund: 1 ELECTRIC HECK GEN 80618 TOTAL FOR FUND 1: 352.61 03/20/2024 GEN 80619 MN DEPT OF COMMERCE OVERPAYMENTS 142-000- 00 289. 44 03/20/2024 GEN 80621 NOAH NELSON OVERPAYMENTS 142-000- 00 142.33 03/20/2024 GEN 80622 NORTHERN STATES SUPPLY INC WIRE BUFFING WHEEL. 154-000- 00 22.49 Sales Tax Receivable - New 186-000- 00 1.55 HECK GEN 80622 TOTAL FOR FUND 1: 24.04 03/20/2024 GEN 80623 OLSON, BRENDAN Training - Expense 401-580- 02 263.75 03/20/2024 GEN 806244 OROBICA PHE AMERICAN, CORP. GASKET, COOLING TOWER HEAT EXCHANGER 154-000- 00 270.00 FREIGHT 401-588- 02 40.00 HECK GEN 80624 TOTAL FOR FUND 1: 310.00 03/20/2024 GEN 80626 QUALUS SERVICES, LLC Relay testing. 107-362- 00 3,094.00 03/20/2024 GEN 806274 KID EQUIPMENT DRILLCLEAN 154-000- 00 103.60 Power Equipment - Materials 402-598- 02 1,086.40 HECK GEN 80627 TOTAL FOR FUND 1: 1,190.00 03/20/2024 GEN 806284 REED SERVICES OF WYOMING INC 55 gallon drum od POD MX compressor 402-554- 01 2,050.00 Materials 401-588- 02 190.46 HECK GEN 80628 TOTAL FOR FUND 1: 2,240.46 03/20/2024 GEN 80629* RELIANCE STANDARD LIFE -LIFE LTD INSURANCE-80o ELEC 242-000- 00 1,751.50 LIFE INSURANCE-80o ELEC 242-000- 00 1,048.70 HECK GEN 80629 TOTAL FOR FUND 1: 2,800.20 03/20/2024 GEN 806314 RS AMERICAS, INC. Phoenix Contact 1019998 Circuit 107-362- 00 98.56 END PLATE, ALTECH CORP. 470078136 154-000- 00 7.50 CONTACT BLOCK, NORMALLY CLOSED, PANEL 154-000- 00 18.50 END PLATE, TERM ELK, ALTECH CORP 154-000- 00 6.60 FREIGHT 401-588- 02 15.00 HECK GEN 80631 TOTAL FOR FUND 1: 146.16 03/20/2024 GEN 806324 RUNNING'S SUPPLY INC Sales Tax Receivable - Replace 186-000- 00 2.68 Sales Tax Receivable - Replace 186-000- 00 1.02 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Fund: 1 ELECTRIC Accessory Plant - Materials 402-554- 01 Accessory Plant - Materials 402-554- 01 HECK GEN 80632 TOTAL FOR FUND 1: 03/20/2024 GEN 80633 SIERRA SNAZA OVERPAYMENTS 142-000- 00 03/20/2024 GEN 80634 SOPUS OIL, SHELL MYSELLA, S3 N 40 WEIGHT 154-000- 00 Sales Tax Receivable - Replace 186-000- 00 HECK GEN 80634 TOTAL FOR FUND 1: 03/20/2024 GEN 80635* T-MOBILE Telephone 401-921- 08 03/20/2024 GEN 806364 TANI DIVISION -BD SHIFFLER INC Sales Tax Receivable - Replace 186-000- 00 Sales Tax Receivable - Replace 186-000- 00 Water Injection Valve Blankets 402-554- 01 Replacement Blankets Quote 24-025 402-554- 01 FREIGHT 401-588- 02 HECK GEN 80636 TOTAL FOR FUND 1: 03/20/2024 GEN 80637 TK ELEVATOR CORPORATION Outside Services 402-554- 01 03/20/2024 GEN 80638* TRANS LEASE/SERVICE AGREEMENTS 401-921- 08 03/20/2024 GEN 806394 TWO-WAY COMMUNICATIONS INC Maintenance Other - Materials 402-554- 01 Telephone 401-921- 08 Telephone 401-921- 08 HECK GEN 80639 TOTAL FOR FUND 1: 03/20/2024 GEN 80640* UNITED INFORMATION SERVICES, INC COLLECTION - MATERIALS 401-903- 06 COLLECTION - MATERIALS 401-903- 06 HECK GEN 80640 TOTAL FOR FUND 1: 03/20/2024 GEN 80641*4 WEST CENTRAL SANITATION INC GENERATOR 41 WATER & SEWER -INDUSTRIAL 401-547- 01 WASTE DISPOSAL-4TH AVE 401-550- 01 UTILITY ESP - WATER/WASTE 55/45- 401-930- 08 HECK GEN 80641 TOTAL FOR FUND 1: Page 11/18 Amount 33.98 12.98 50.66 50.46 8,692.20 1,148.54 31.28 555.16 455.00 7,950.00 344.93 4,431.00 273.92 133.54 69.42 476.88 433.10 120.55 194.61 03/20/2024 GEN 80642 WYNN STOCK Cip - Residential 401-916- 07 18.00 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Page 12/18 User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 1 ELECTRIC Total for fund 1 ELECTRIC 501,810.86 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Page 13/18 User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS 03/05/2024 GEN 80488* ADEPT BLAST AND PAINT Grounds - Outside Services 401-935- 08 289.12 03/05/2024 GEN 80489* ALEX HLAVINKA DEP REFUND/APPLIED 235-000- 00 112.00 03/05/2024 GEN 80490* AMY MCNAMARA OR ZACHARY CHILSON DEP REFUND/APPLIED 235-000- 00 105.00 03/05/2024 GEN 80491* ANDREW HANSEN DEP REFUND/APPLIED 235-000- 00 49. 00 03/05/2024 GEN 80492* ANTHONY MATHEWS DEP REFUND/APPLIED 235-000- 00 38.50 03/05/2024 GEN 80493* AUSTIN UTECHT DEP REFUND/APPLIED 235-000- 00 21.00 DEP REFUND/APPLIED 235-000- 00 49.00 HECK GEN 80493 TOTAL FOR FUND 2: 70.00 03/05/2024 GEN 80494 BOB KING Cip - Residential 401-916- 07 325.00 03/05/2024 GEN 80495*4 BORDER STATES ELECTRIC SUPPLY WIRE, 410 SOLID BARE CU, WITH 45 MILS 154-000- 00 807.50 TAX 401-874- 04 55.73 HECK GEN 80495 TOTAL FOR FUND 2: 863.23 03/05/2024 GEN 80496* BRUCE REMUS DEP REFUND/APPLIED 235-000- 00 70.00 03/05/2024 GEN 80497* CAMERON WAGNER OR JENA FORTUN DEP REFUND/APPLIED 235-000- 00 140.00 03/05/2024 GEN 80498 CENTURYLINK Utilities (Electric, Satellite 401-856- 05 69.07 03/05/2024 GEN 80499* CESAR ORTIZ DEP REFUND/APPLIED 235-000- 00 29.75 03/05/2024 GEN 80500* CHASE STEIL OR DELAINE VONGO DEP REFUND/APPLIED 235-000- 00 28.00 03/05/2024 GEN 80501*4 CINTAS CORPORATION 4470 UNIFORMS & LAUNDRY 401-880- 04 102.88 UNIFORMS & LAUNDRY 401-880- 04 102.88 HECK GEN 80501 TOTAL FOR FUND 2: 205.76 03/05/2024 GEN 80502*4 CITY OF HUTCHINSON Materials 401-874- 04 5,500.00 VEHICLE/EQUIPMENT FUEL -GAS 401-880- 04 890.38 VEHICLES/EQUIPMENT FUEL-ADMIN 55/45 401-935- 08 56.48 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Fund: 2 GAS HECK GEN 80502 TOTAL FOR FUND 2: 03/05/2024 GEN 80505* CRAIG OR STEPHANIE LOCH DEP REFUND/APPLIED 235-000- 00 03/05/2024 GEN 80509 E2 ELECTRIC All material, labor and equipment for 107-369- 00 03/05/2024 GEN 80511* ELIZABETH SPENCER DEP REFUND/APPLIED 235-000- 00 03/05/2024 GEN 80513* FIRST CHOICE FOOD & BEVERAGE BREAKROOM/RECOGNITION BANQUET 401-926- 08 03/05/2024 GEN 80514* GABRIEL COOPER OR MADDISON MORA DEP REFUND/APPLIED 235-000- 00 03/05/2024 GEN 80515* GABRIELA GARCIA DEP REFUND/APPLIED 235-000- 00 03/05/2024 GEN 80516*4 GOPHER STATE ONE -CALL INC Materials 401-874- 04 Line - Outside Services 401-856- 05 HECK GEN 80516 TOTAL FOR FUND 2: Page 14/18 Amount 6,446.86 70.00 5,759.82 35.00 50.62 112.00 73.50 24.30 44.55 03/05/2024 GEN 80517* GRANT MARCEAU DEP REFUND/APPLIED 235-000- 00 35.00 03/05/2024 GEN 805194 GROEBNER & ASSOCIATES INC VALVE, BALL, 3/4", POLY GAS VALVE, SDR 154-000- 00 196.65 FREIGHT & TAX 401-874- 04 46.00 HECK GEN 80519 TOTAL FOR FUND 2: 242.65 03/05/2024 GEN 80520* HEALTH PARTNERS DENTAL INSURANCE - 18% GAS 242-000- 00 935.68 HEALTH INSURANCE-18o GAS 242-000- 00 12,177.86 HECK GEN 80520 TOTAL FOR FUND 2: 13,113.54 03/05/2024 GEN 80522*4 HILLYARD/HUTCHINSON Grounds - Materials 401-935- 08 140.15 03/05/2024 GEN 80523* HUTCHFIELD SERVICES Grounds - Outside Services 401-935- 08 894.44 03/05/2024 GEN 80527* JASON T GIESEN DEP REFUND/APPLIED 235-000- 00 56.00 03/05/2024 GEN 80528* JEFF LIESTMAN DEP REFUND/APPLIED 235-000- 00 24.50 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Page 15/18 User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS 03/05/2024 GEN 80529* JEFFREY MACHADO DEP REFUND/APPLIED 235-000- 00 91.00 03/05/2024 GEN 80530* JODY OR BRIAN EERINESS DEP REFUND/APPLIED 235-000- 00 108.50 03/05/2024 GEN 80531* JOE FARNIOK DEP REFUND/APPLIED 235-000- 00 35.00 03/05/2024 GEN 80533* JONATHAN BOLLAND DEP REFUND/APPLIED 235-000- 00 26.25 03/05/2024 GEN 80535* JUSTINE NUTTER DEP REFUND/APPLIED 235-000- 00 40.25 03/05/2024 GEN 80537 LEANDER HEINEN Cip - Residential 401-916- 07 350.00 03/05/2024 GEN 80539 LIEN, MIKE Training - Expense 401-870- 04 86.06 03/05/2024 GEN 80540 LOIS HOFFMAN Cip - Residential 401-916- 07 350.00 03/05/2024 GEN 80541 MAIERS, MATTHEW Training - Expense 401-870- 04 75.46 03/05/2024 GEN 80542* MAKAYLA NGUYEN DEP REFUND/APPLIED 235-000- 00 28.00 03/05/2024 GEN 80543* MARCO TECHNOLOGIES, LLC OFFICE SUPPLIES 401-921- 08 173.90 03/05/2024 GEN 80545* MATTHEW KOTELNICKI DEP REFUND/APPLIED 235-000- 00 66.50 03/05/2024 GEN 80547* MICHAEL OR ANGELA MASSMANN DEP REFUND/APPLIED 235-000- 00 108.50 03/05/2024 GEN 80548* MICHELE KRIPPNER DEP REFUND/APPLIED 235-000- 00 31.50 03/05/2024 GEN 80549* MICHELLE LINDEMEIER DEP REFUND/APPLIED 235-000- 00 28.00 03/05/2024 GEN 80551* MYLES RICK OR MACKENZIE RICHARDSON DEP REFUND/APPLIED 235-000- 00 56.00 03/05/2024 GEN 80552* MYRON SCHUETTE DEP REFUND/APPLIED 235-000- 00 87.50 03/05/2024 GEN 80553* NATALI BASNEY DEP REFUND/APPLIED 235-000- 00 29.75 DEP REFUND/APPLIED 235-000- 00 57.75 HECK GEN 80553 TOTAL FOR FUND 2: 87.50 03/05/2024 GEN 80554* NOAH PARA DEP REFUND/APPLIED 235-000- 00 31.50 03/21/2024 02:15 PM CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES Page 16/18 User: JMartig CHECK DATE FROM 02/23/2024 - 03/22/2024 DE: Hutchinson Utili Check Date Bank Check # Payee Description Account Dept Amount Fund: 2 GAS 03/05/2024 GEN 80555 03/05/2024 GEN 80556 NORTHERN BORDER PIPELINE CO LINE - OUTSIDE SERVICES -INTERCONNECT 401-856- 05 NOVASPECT INC FREIGHT 401-874- 04 FREIGHT 401-874- 04 IN 18B3438X012, O-ring 11/16x7/8x3/32 402-892- 04 IN T14037T0012, O-ring Globe, Body 402-892- 04 HECK GEN 80556 TOTAL FOR FUND 2: 03/05/2024 GEN 80557* NUVERA TELEPHONE 03/05/2024 GEN 80558*4 OXYGEN SERVICE COMPANY INC Materials Materials HECK GEN 80558 TOTAL FOR FUND 2: 03/05/2024 GEN 80560* PREMIUM WATERS INC OFFICE SUPPLIES -BOTTLED WATER 03/05/2024 GEN 805624 RENEGADE ENERGY ADVISORS LLC. M & R STATION EQUIPMENT Engineering - Labor Engineering - Labor HECK GEN 80562 TOTAL FOR FUND 2: 03/05/2024 GEN 80563 RUNNING'S SUPPLY INC Power Equipment - Materials 03/05/2024 GEN 80564 SANDRA KAUFMN Cip - Residential 03/05/2024 GEN 80567* SHRED RIGHT OFFICE SUPPLIES -SHREDDING SERVICES 03/05/2024 GEN 80568 SOUTH CENTRAL ELECTRIC ASS'N UTILITIES (ELECTRIC, SATELLITE 03/05/2024 GEN 80570* TARA FELIPE OZUNA OR CHASE ISBEL DEP REFUND/APPLIED 03/05/2024 GEN 80572* UNITED PARCEL SERVICE MAIL SERVICES - UPS, FEDEX 03/05/2024 GEN 80573* VERIZON WIRELESS TELEPHONE 03/05/2024 GEN 80574 VIVIAN KIRKPATRICK Cip - Residential 03/20/2024 GEN 80590*4 BORDER STATES ELECTRIC SUPPLY BATTERY, SIZE C Materials 401-921- 08 401-874- 04 401-874- 04 401-921- 08 107-369- 00 401-880- 04 401-880- 04 402-895- 04 401-916- 07 401-921- 08 401-856- 05 235-000- 00 401-921- 08 401-921- 08 401-916- 07 401-874- 04 401-874- 04 2,000.00 25.67 25.67 50.00 354.00 465.34 646.33 112.42 77.24 189.66 4.08 6,600.00 4,125.00 2.89 100.00 5.44 49.53 52.50 55.22 361.47 350.00 52.56 3.61 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Payee Description Account Dept Page 17/18 Amount Fund: 2 GAS TAX 401-874- 04 1.75 SAFETY VEST, RVZ2410SE, SIZE M 401-880- 04 25.46 HECK GEN 80590 TOTAL FOR FUND 2: 83.38 03/20/2024 GEN 80591 BROWN COUNTY RURAL ELECTRIC Utilities (Electric, Satellite 401-856- 05 354.50 03/20/2024 GEN 8059314 CCP INDUSTRIES, INC Materials 401-874- 04 154.74 03/20/2024 GEN 80595*4 CINTAS CORPORATION 4470 UNIFORMS & LAUNDRY 401-880- 04 102.88 UNIFORMS & LAUNDRY 401-880- 04 102.88 HECK GEN 80595 TOTAL FOR FUND 2: 205.76 03/20/2024 GEN 80596*4 CITY OF HUTCHINSON IT ADMIN AND SUPPORT 75/25 401-921- 08 874.31 IT ADMIN AND SUPPORT 75/25 401-921- 08 1.00 IT ADMIN AND SUPPORT 75/25 401-921- 08 3,171.93 Dues/Membership Expense 401-930- 08 345.00 Utility Expenses - Water/Waste 401-930- 08 437.80 Utility Expenses - Water/Waste 401-930- 08 10.15 HECK GEN 80596 TOTAL FOR FUND 2: 4,840.19 03/20/2024 GEN 80599 ETHAN MARCUS Cip - Residential 401-916- 07 325.00 03/20/2024 GEN 80600 FASTENAL COMPANY Materials 401-874- 04 58.76 03/20/2024 GEN 80601*4 FIRST CHOICE FOOD & BEVERAGE Public Awareness - Material 401-856- 05 206.34 BREAKROOM/RECOGNITION BANQUET 401-926- 08 145. 90 HECK GEN 80601 TOTAL FOR FUND 2: 352.24 03/20/2024 GEN 80604*4 GOPHER STATE ONE -CALL INC Materials 401-874- 04 251.10 Line - Outside Services 401-856- 05 31.05 HECK GEN 80604 TOTAL FOR FUND 2: 282.15 03/20/2024 GEN 80606* HILLYARD/HUTCHINSON Grounds - Materials 401-935- 08 51.81 03/20/2024 GEN 80608*4 HUTCHINSON LEADER Public Awareness - Material 401-856- 05 187.07 Public Awareness - Material 401-856- 05 187.07 Cip - Marketing 401-916- 07 112.50 Advertising/Printing 401-921- 08 320.01 Advertising/Printing 401-921- 08 288.00 03/21/2024 02:15 PM User: JMartig DE: Hutchinson Utili Check Date Bank Check # CHECK DISBURSEMENT REPORT FOR HUTCHINSON UTILITIES CHECK DATE FROM 02/23/2024 - 03/22/2024 Payee Description Account Dept Page 18/18 Amount Fund: 2 GAS HECK GEN 80608 TOTAL FOR FUND 2: 1,094.65 03/20/2024 GEN 80612 JENNIFER SMITH Cip - Residential 401-916- 07 350.00 03/20/2024 GEN 80615*4 LEAGUE OF MN CITIES INS TRUST PREPAID INSURANCE 174-000- 00 77, 655.20 Worker's Compensation 401-926- 08 166.92 HECK GEN 80615 TOTAL FOR FUND 2: 77,822.12 03/20/2024 GEN 806164 MCLEOD COOPERATVIE POWER ASSN MISC EXPENSE -GAS LINE PUMP 401-880- 04 72.48 UTILITIES (ELECTRIC, SATELLITE-MCLEOD 401-856- 05 44.03 HECK GEN 80616 TOTAL FOR FUND 2: 116.51 03/20/2024 GEN 80620 NELSON TECHNOLOGIES INC Operating & Maint-Brownton 416-108- 04 300.00 03/20/2024 GEN 806254 PARADIGM LIAISON SERVICES, LLC Operating & Maint-Brownton 416-108- 04 615.04 Public Awareness - Material 401-856- 05 3,690.27 HECK GEN 80625 TOTAL FOR FUND 2: 4,305.31 03/20/2024 GEN 80629* RELIANCE STANDARD LIFE -LIFE LTD INSURANCE-20o GAS 242-000- 00 437.88 LIFE INSURANCE-20o GAS 242-000- 00 262.17 HECK GEN 80629 TOTAL FOR FUND 2: 700.05 03/20/2024 GEN 80630 RENEGADE ENERGY ADVISORS LLC. Engineering - Labor 401-880- 04 5,100.00 03/20/2024 GEN 80635* T-MOBILE Telephone 401-921- 08 382.85 03/20/2024 GEN 80638* TRANS LEASE/SERVICE AGREEMENTS 401-921- 08 1,477.00 03/20/2024 GEN 80640* UNITED INFORMATION SERVICES, INC COLLECTION - MATERIALS 401-903- 06 354.36 COLLECTION - MATERIALS 401-903- 06 1,658.73 HECK GEN 80640 TOTAL FOR FUND 2: 2,013.09 03/20/2024 GEN 80641*4 WEST CENTRAL SANITATION INC UTILITY EST - WATER/WASTE 45/55- 401-930- 08 245.49 Total for fund 2 GAS 167,227.54 TOTAL - ALL FUNDS 669,038.40 '*'-INDICATES CHECK DISTRIBUTED TO MORE THAN ONE FUND '#'-INDICATES CHECK DISTRIBUTED TO MORE THAN ONE DEPARTMENT December 31, 2023' Independent Auditor's Report Pages 2-4: 9 Financial statements are the responsibility of the Commission's management Our responsibility is to express an opinion on these financial statements based on our audit Conducted audit in accordance with Generally Accepted Auditing Standards and Government Auditing Standards * Obtain reasonable assurance financials are free from material misstatement Independent Auditor's Report (Contd) Pages 2-4: Financial statements of the Commission are presented fairly in our opinion Required Supplementary Information — Management's Discussion and Analysis (pages 5-9) Additional Required Supplementary Information (pages 37-45) Internal control letter on pages 59-60 Statement of Net Position ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current Assets Restricted Assets Net Capital Assets Total Assets Deferred Outflows of Resources Total Assets and Deferred Ouflows of Resources 2023 2022 $ 30,984,691 $ 30,486,315 3,255,656 3,689,480 71,936, 753 73, 706, 492 106,177,100 107,882,287 $ 107,165,841 $ 109,510,817 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Current Liabilities $ 3,354,520 $ 4,076,441 Long -Term Liabilities 25,700,332 30,160,229 Total Liabilities 29,054,852 34,236,670 Deferred Inflows of Resources 1,331,753 131,405 Net Position Net Investment in Capital Assets Unrestricted Total Net Position Total Liabilities. Deferred Inflows of Resources and Net Position 54,151,882 53,541,798 22,627,354 21,600,944 76,779,236 75,142,742 $ 107,165,841 $ 109,510,817 Cash and Investment Balances $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 011 lo/om 2019 2020 IN Operating $9,563,367 $12,810,700 IIIIII Restricted 3,575,572 3,680,239 ■ Designated 12,822,241 12,767,467 2021 2022 2023 $10,552,359 $9,962,061 $10,370,905 3,688,606 3,689,480 3,255,656 13,715,289 13,432,222 14,154,021 Statement of Revenues, Expenses and Changes in Net Position OPERATING REVENUES OPERATING EXPENSES Production Purchased Power/Gas Other Operating Expense Administrative and General Depreciation and Amortization Contribution to City of Hutchinson Total Operating Expenses Operating Income (Loss) NET NONOPERATING REVENUES (E)PENSES) Change in Net Position NET POSITION, BEGINNING OF YEAR NET POSITION. END OF YEAR 2023 2022 $ 42, 000, 714 $ 45, 845, 410 5,147, 394 6,721,410 19, 688, 330 22, 521, 870 7,633,967 7,498,792 2,568,771 2,574,145 4,451,820 4,561,045 1,904,536 1,867,192 41,394,818 45,744,454 605,896 100,956 1,030,598 (1,442,600) 1,636,494 (1,341,644) 75,142, 742 76, 484, 386 $ 76, 779, 236 $ 75,142, 742 CDS .............. Electric Division $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15, 000, 000 $10, 000, 000 $5,000,000 $0 $ (5,000,000) ■Total Operating Revenues IN Total Operating Expenses IIIIII Net Nonoperating Revenues (Expenses) 2019 2020 2021 2022 2023 $27,982,592 $26,460,616 $29,696,029 $30,463,813 $28,202,457 27,994,698 26,516,829 29,884,530 32,116,526 29,349,429 (239,498) 1,644,875 (345,928) (842,544) 437,386 Electric Division $2,000,000 $1,500,000 $1,000,000 $500,000 $(500,000) $(1,000,000) $(1,500,000) $(2,000,000) $(2,500,000) $(3,000,000) 2019 2020 2021 2022 2023 ■ Change in Net $(251,604) $1,588,662 $(534,429) $(2,495,257) $(709,586) Position CDS Revenue per KWH Year Ended December 31, 2023 Revenue Fbr Amount KWH Sold KWH CLASS Residential $ 5,660,328 53,848,241 $ 0.1051 All Electric 253,750 2,456,479 0.1033 Small General Service 1,851,979 18,394,997 0.1007 Large General Service 6,963,455 79,393,020 0.0877 Industrial 8,065,784 106,372,000 0.0758 Sale for Resale 5,120,534 46,626,000 0.1098 Street Lighting 139,778 61,008 2.2911 $ 28,055,608 307,151,745 0.0913 Year Ended December 31, 2022 Revenue Fbr Amount KWH Sold KWH CLASS Residential $ 5,841,794 53,618,060 $ 0.1090 All Electric 287,649 2,784,990 0.1033 Small General Service 1,912,490 18,221,919 0.1050 Large General Service 7,703,499 83,658,560 0.0921 Industrial 8,990,927 112,228,000 0.0801 Sale for Resale 5,446,484 27,568,000 0.1976 Street Lighting 138,294 93,386 1.4809 $ 30,321,137 298,172,915 $ 0.1017 CDS Natural Gas Division ,,r Natural Gas Division $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 2019 2020 2021 2022 2023 ■ Change in Net Position $2,538,847 $2,118,476 $1,187,743 $1,153,613 $2,346,080 Revenue per MCF Year Ended December 31, 2023 Revenue Per Thousand Amount CF Sold MCF CLASS Residential $ 3,949,946 397,209,731 $ 9.9442 Commercial 2,888,770 309, 694, 761 9.3278 Large industrial 5,138,193 786,468,863 6.5332 $ 11, 976, 909 1, 493, 373, 355 $ 8.0200 Year Ended December 31, 2022 Revenue Per Thousand Amount CF Sold MCF CLASS Residential $ 4,474,818 468,419,771 $ 9.5530 Commercial 3,275,405 360,645,718 9.0821 Large industrial 5,769,905 900,160,272 6.4099 $ 13, 520,128 1, 729, 225, 761 $ 7.8186 Communications • Accounting Practices • No Difficulties Encountered Corrected and Uncorrected Misstatements No Disagreements with Management Management Representations Management Consultations with Other Accountants Other Audit Findings or Issues General Recommendations * Earned Sick and Safe Time Law Questions or Comments? Contact information: Justin McGraw, CPA °irnc ira c,sc aac0irn 320-693-7975 HUTCHINSON UTILITIES COMMISSION MANAGEMENT LETTER DECEMBER 31, 2023 CONWAY, DEUTH & SCHMIESING, PLLP CPAS & ADVISORS LITCHFIELD, MINNESOTA This page intentionally left blank HUTCHINSON UTILITIES COMMISSION TABLE OF CONTENTS DECEMBER 31, 2023 gdeft Required Communications 1-3 Comparative Financial Data 4 Graphical Information 5-12 Schedule of Findings on Accounting Issues and Internal Controls 13 This page intentionally left blank REQUIRED COMMUNICATIONS Members of the Hutchinson Utilities Commission Hutchinson, Minnesota We have audited the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, as of and for the year ended December 31, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated January 4, 2024. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Commission are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2023. We noted no transactions entered into by the Commission during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Management's estimate of the allowance for doubtful accounts is based on historical electric and natural gas revenues, historical loss levels, and an analysis of the collectability of individual accounts. We evaluated the key factors and assumptions used to develop the allowance in determining that it is reasonable in relation to the financial statements taken as a whole. Management's estimate of depreciation and amortization is based on the number of years an asset is in service. We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole. Management's estimate of lease terms and discount rates on leases is based on information stated in the lease expense agreement and expectations of the lease. The lease terms and discount rates determine the amount of interest that will be recorded during each reporting period as well as the amount of right to use assets and lease liability that is reported at the end of a reporting period. .O Box 570 y. w, y, • M.. 0 II i Litchfield Office 820 Sibley Ave N Utchfied, MIN 55355 (3 0) 693-7975 www.cdscpa.colirmf OfficeSartelt Ste 1 �rr � Members: American Institute of Certified Public Accountants, Minnesota Society of Certified Public Accountants Significant Audit Findings (Cont'd) Qualitative Aspects of Accounting Practices (Cont'd) Management's estimate of pension related items and other postemployment benefit related items are based on actuarial valuations performed by consultants specializing in those areas. We evaluated the key factors and assumptions used to develop those estimates in determining that it is reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated March 27, 2024. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Commission's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Commission's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. 2 Other Matters We applied certain limited procedures to Management's Discussion and Analysis, the Schedule of Proportionate Share of the Net Pension Liability, the Schedule of Employer Contributions, the Schedule of Changes in the Commission's Total OPEB Liability and the related notes, which is required supplementary information that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the required supplementary information and do not express an opinion or provide any assurances on the required supplementary information. We were engaged to report on the statements and schedules listed in the table of contents as supplementary information, which accompany the financial statements but are not required supplementary information. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the Organizational Data section, which accompany the financial statements but are not required supplementary information. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the use of the Commission and management of Hutchinson Utilities Commission and is not intended to be and should not be used by anyone other than these specified parties. CONWAY, DEUTH & SCHMIESING, PLLP CPAS & ADVISORS LITCHFIELD, MINNESOTA March 27, 2024 3 This page intentionally left blank ELECTRIC DIVISION Residential General Service Industrial Street Lighting Resale Total Electric Sales Other Operating Revenues Total Operating Revenues Purchased Power - Electric Other Operating Expenses Total Operating Expenses Net Nonoperating Revenues (Expenses) Change in Net Position GAS DIVISION Residential Commercial Industrial Total Gas Revenues Gas Transportation Total Operating Revenues Purchased Power - Gas Other Operating Expenses Total Operating Expenses Net Nonoperating Revenues (Expenses) HUTCHINSON UTILITIES COMMISSION COMPARATIVE FINANCIAL DATA 2019 2020 2021 2022 2023 $ 5,638,725 $ 5,692,685 $ 6,013,887 $ 6,129,443 $ 5,914,078 9,566,730 8,911,119 9,731,853 9,615,989 8,815,434 9,667,324 8,963,654 9,524,147 8,990,927 8,065,784 147,456 141,886 137,710 138,294 139,778 2,773,852 2,709,012 4,221,535 5,446,484 5,120,534 27,794,087 26,418,356 29,629,132 30,321,137 28,055,608 188,505 42,260 66,897 142,676 146,849 27,982,592 26,460,616 29,696,029 30,463,813 28,202,457 14,272,870 13,172,097 14,833,873 15,665,830 13,201, 794 13, 721,828 13,344, 732 15,050,657 16,450,696 16,147,635 27,994,698 26,516,829 29,884,530 32,116,526 29,349,429 (239,498) 1,644,875 (345,928) (842,544) 437,386 $ (251,604) $ 1,588,662 $ (534,429) $ (2,495,257) $ (709,586) $ 3,981,709 $ 3,663,453 $ 4,639,771 $ 4,474,818 $ 3,949,946 2,974,834 2,597,225 3,469,964 3,275,405 2,888,770 3,679,891 3,539,863 5,334,891 5,769,905 5,138,193 10,636,434 9,800,541 13,444,626 13,520,128 11,976,909 1,773,082 1,719,680 1,762,198 1,861,469 1,821,348 12,409,516 11,520,221 15,206,824 15,381,597 13, 798,257 5,961,040 5,588,511 9,830,566 9,356,872 7,635,147 3,887,159 3,969,118 4,024,107 4,271,056 4,410,242 9,848,199 9,557,629 13,854,673 13,627,928 12,045,389 (22,470) 155,884 (164,408) (600,056) 593,212 Change in Net Position $ 2,538,847 $ 2,118,476 $ 1,187,743 $ 1,153,613 $ 2,346,080 HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION Operating Revenues & Expenses and Net Nonoperating Revenues (Expenses) $35,000,000 $30,000,000 $27,982,592 $29,696,029 $29 884 530 $28,202,457 $29,349 ,429 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 ��k644,875 437,386 -$5,000,000 2019 2020 2021 2022 2023 BTotal Operating Revenues ®Total Operating Expenses ®Net Nonoperating Revenues (Expenses) $30,463,813 $32,116,526 $26,460,616 $27,994,698 $26,516,829 $(239,498) $(345,928) $(842,544) Change in Net Position $2,000,000 $1,588,662 $1,500,000 $1,000,000 $500,000 $0 -$500,000 $(251,604) $(534,429) -$1 , 000, 000 $ (709, 586) -$1,500,000 -$2,000,000 -$2,500,000 $ (2, 495, 257) -$3,000,000 2019 2020 2021 2022 2023 BChange in Net Position 5 Change in Net Position $2,000,000 $1,588,662 $1,500,000 $1,000,000 $500,000 $0 -$500,000 $(251,604) $(534,429) -$1 , 000, 000 $ (709, 586) -$1,500,000 -$2,000,000 -$2,500,000 $ (2, 495, 257) -$3,000,000 2019 2020 2021 2022 2023 BChange in Net Position 5 5 HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION Major Revenue by Source 11 000 000............................................................................................................................................................................................................................................................................................................................................................... $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2019 2020 2021 2022 2023 ■Residential ®General Service 0Industrial Purchased Power & Fuel Costs Compared to Total Sales $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2019 2020 2021 2022 2023 BPurchased Power - Electric ®Total Electric Sales HUTCHINSON UTILITIES COMMISSION ANALYSIS OF OPERATIONS ELECTRIC DIVISION YEARS ENDED DECEMBER 31, 2023 AND 2022 The Statement of Revenues and Expenses set forth the results of the operations in detail for the years ended December 31, 2023 and 2022. Operating revenues, kilowatt hours (KWH) sold, and average revenue per kilowatt hour sold by class of service are as follows: Year Ended December 31, 2023 Revenue Per Amount KWH Sold KWH INWIN& Residential $ 5,660,328 53,848,241 $ 0.1051 All Electric 253,750 2,456,479 0.1033 Small General Service 1,851,979 18,394,997 0.1007 Large General Service 6,963,455 79,393,020 0.0877 Industrial 8,065,784 106,372,000 0.0758 Sale for Resale 5,120,534 46,626,000 0.1098 Street Lighting 139,778 61,008 2.2911 $ 28,055,608 307,151,745 $ 0.0913 Year Ended December 31, 2022 Revenue Per Amount KWH Sold KWH INWIN& Residential $ 5,841,794 53,618,060 $ 0.1090 All Electric 287,649 2,784,990 0.1033 Small General Service 1,912,490 18,221,919 0.1050 Large General Service 7,703,499 83,658,560 0.0921 Industrial 8,990,927 112,228,000 0.0801 Sale for Resale 5,446,484 27,568,000 0.1976 Street Lighting 138,294 93,386 1.4809 $ 30,321,137 298,172,915 $ 0.1017 7 HUTCHINSON UTILITIES COMMISSION ANALYSIS OF OPERATIONS ELECTRIC DIVISION YEARS ENDED DECEMBER 31, 2023 AND 2022 KWH Sold 61,008 Street Lighting 93,386 46, 626, 000 Sale for Resale 27,568,000 106,372,000 Industrial 112,228,000 ,393,020 79 Large General Service OE83,658,560 18, 394, 997 Small General Service 18,221,919 2,456,479 All Electric 2,784,990 53, 848, 241 Residential 53,618,060 ,-ZZZZZZZZZZZZZZZZZZP 0 50,000,000 100,000,000 150,000,000 2023 KWH Sold 02022 KWH Sold Street Lighting Sale for Resale Industrial Large General Service Small General Service All Electric Residential Average $/KWH $2.2911 $1.4809 $0.1098 $0.1976 $0.0758 $0.0801 $0.0877 $0.0921 $0.1007 $0.1050 $0.1033 $0.1033 $0.1051 $0.1090 I.00 $0.50 $1.00 $1.50 $2.00 $2.50 2023 Revenue Per KWH 02022 Revenue Per KWH HUTCHINSON UTILITIES COMMISSION NATURAL GAS DIVISION Operating Revenues & Expenses and Net Nonoperating Revenues (Expenses) $18,000,000 $16,000,000 $15 206 824 $15,381,597 $13,854,673 $13,627,928 $13,798,257 Change in Net Position $3, 000, 000 $2,538,847 $2,500,000 $2,346,080 $2,118, 476 $2, 000, 000 $1,500,000 $1,187,743 $1,153,613 $1,000,000 $500,000 $0 2019 2020 2021 2022 2023 BChange in Net Position HUTCHINSON UTILITIES COMMISSION NATURAL GAS DIVISION Major Revenue by Source $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2019 2020 2021 2022 2023 BResidential ®Commercial 0Industrial Purchased Gas Compared to Total Sales $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8, 000, 000 $6, 000, 000 $4, 000, 000 $2, 000, 000 $0 2019 2020 2021 2022 2023 ■Purchased Power - Gas ®Total Gas Revenues 10 HUTCHINSON UTILITIES COMMISSION ANALYSIS OF OPERATIONS NATURAL GAS DIVISION YEARS ENDED DECEMBER 31, 2023 AND 2022 The Statement of Revenues and Expenses set forth the results of the operations in detail for the years ended December 31, 2023 and 2022. Operating revenues, cubic feet sold, and average revenue per thousand cubic feet sold by class of service are as follows: CLASS Residential Commercial Large Industrial CLASS Residential Commercial Large Industrial Year Ended December 31, 2023 Revenue Per Thousand Amount CF Sold MCF $ 3,949,946 397,209,731 $ 9.9442 2,888,770 309,694,761 9.3278 5,138,193 786,468,863 6.5332 $ 11,976,909 1,493,373,355 $ 8.0200 Year Ended December 31, 2022 Revenue Per Thousand Amount CF Sold MCF $ 4,474,818 468,419,771 $ 9.5530 3,275,405 360,645,718 9.0821 5,769,905 900,160,272 6.4099 $ 13,520,128 1,729,225,761 $ 7.8186 11 HUTCHINSON UTILITIES COMMISSION ANALYSIS OF OPERATIONS NATURAL GAS DIVISION YEARS ENDED DECEMBER 31, 2023 AND 2022 CF Sold 786,468,863 Large Industrial 900,160,272 309,694,761 Commercial 360,645,718 397,209,731 Residential 468, 419,771 i. 0 pp0 pp0 pp0 pp0 3p0 OpO, Epp pp0, 9p0 p30, 1 20p pp0, M2023 CF Sold M2022 CF Sold Average $/MCF $6.5332 Large Industrial $6.4099 $9.3278 Commercial $9.0821 $9.9442 Residential 9.5530 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 M2023 Revenue per 1000 MCF M2022 Revenue Per 1000 MCF 12 This page intentionally left blank HUTCHINSON UTILITIES COMMISSION SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS DECEMBER 31, 2023 We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. INTERNAL CONTROL The objective of internal accounting control is to provide reasonable, but not absolute, assurance as to the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management. It should be recognized that within the Commission, an inherent risk is present with certain positions. It is very common for entities such as Hutchinson Utilities Commission, to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets. The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Commission's continual review of financial information at monthly meetings. GENERAL RECOMMENDATIONS Throughout the course of the audit, we spoke with management regarding certain items that we see as an opportunity to improve. None of these were considered significant within the scope of the audit. The items discussed requiring action have been resolved or are in the process of resolution. We would like to acknowledge the assistance and courtesies extended to us by the personnel of the Hutchinson Utilities Commission. EARNED SICK AND SAFE TIME LAW Beginning January 1, 2024 all employers are required to implement Earned Sick and Safe Time (ESST) leave policies per Minnesota law, Chapter 53. The new law applies to all employers with one or more employees. Under the new law, an employee earns, at minimum, up to one hour of time off for every 30 hours worked. Employees are eligible if they work at least 80 hours in a year for an employer in Minnesota and are not an independent contractor. The law is applicable to part- time and temporary employees. Employers are required to track ESST and provide this information in a reasonable manner to employees. We recommend management of the Commission update their personnel policies, as necessary. Changes may be necessary to your financial records, specifically budgeting for the changes, and it will benefit the Commission to begin this process now. If requested, Conway, Deuth and Schmiesing, PLLP will assist in the implementation. These services will be billed separate from, and in addition to, your annual audit engagement fees. Please contact us with any questions. 13 HUTCHINSON UTILITIES COMMISSION AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 CONWAY, DEUTH & SCHMIESING, PLLP CPAS & ADVISORS LITCHFIELD, MINNESOTA This page intentionally left blank HUTCHINSON UTILITIES COMMISSION TABLE OF CONTENTS DECEMBER 31, 2023 ORGANIZATIONAL DATA INDEPENDENT AUDITOR'S REPORT REQUIRED SUPPLEMENTARY INFORMATION Management's Discussion and Analysis BASIC FINANCIAL STATEMENTS Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows Notes to the Financial Statements REQUIRED SUPPLEMENTARY INFORMATION Schedule of Proportionate Share of Net Pension Liability Schedule of Employer Contributions Schedule of Changes in the Commission's Total OPEB Liability Notes to Required Supplementary Information SUPPLEMENTARY INFORMATION Combining Statement of Net Position Combining Schedule of Revenues and Expenses Schedule of Division Cash Flows Statement of Net Position - Electric Division Detailed Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual - Electric Division Statement of Net Position - Natural Gas Division Detailed Schedule of Revenues, Expenses and Changes in Net Position - Budget and Actual - Natural Gas Division 1 2-4 5-9 10 11 12-13 14-36 37 38 39 40-45 46 47 48-49 50 51-53 54 55-57 HUTCHINSON UTILITIES COMMISSION TABLE OF CONTENTS DECEMBER 31, 2023 COMPLIANCE SECTION Independent Auditor's Report on Minnesota Legal Compliance Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Summary Schedule of Prior Audit Findings PAGE 58 AM 61 HUTCHINSON UTILITIES COMMISSION ORGANIZATIONAL DATA DECEMBER 31, 2023 A Light and Power Commission was formed under the provisions of an amendment to the Hutchinson City Charter in 1935; the Commission was charged with the operation of the Municipal Electric Plant. Charter amendments approved December 17, 1954, provided for a change in the name to Hutchinson Utilities Commission. Additional duties under that amendment provided for the control and management of a municipal gas distribution system. A revised city charter was adopted at a special election September 17, 1987. Some of the pertinent sections of this new charter are briefly summarized in the following paragraphs. The Commission shall have control and management of the Light Plant, the Light Plant distribution system, the Gas Plant and the Gas Plant distribution system. The Commission shall consist of five persons, who shall be appointed by the Council. A member shall be appointed every year for a term of five years, to fill the place of the member whose term has expired. No member shall be appointed to more than two successive terms. The members of the Commission shall receive compensation for their services as determined annually by the Council. The Commission's charter approves one person on the Commission may live outside the City of Hutchinson limits as long as they are a ratepayer. The Commission shall provide for its own organization and rules of procedure and annually shall elect a president and vice president from among its members. It shall also appoint a secretary who may or may not be a member of the Commission. The Commissioners and their official titles were as follows: Anthony Hanson Matt Cheney Don Martinez Robert Wendorff Kathy Silvernale President Vice President Secretary Commissioner Commissioner This page intentionally left blank INDEPENDENT AUDITOR'S REPORT Members of the Hutchinson Utilities Commission Hutchinson, Minnesota Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, as of and for the year ended December 31, 2023 and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Commission, as of December 31, 2023, and the respective changes in financial position, and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Commission, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Report on Partial Comparative Information We have previously audited the Commission's 2022 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 29, 2023. In our opinion, the partial comparative information presented herein as of and for the year ended December 31, 2022 is consistent, in all material respects, with the audited financial statements from which it has been derived. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Sart�ell Office Ste 0 W www,cdscpa.c rn Members: American Institute of Certified Public Accountants, Minnesota Society of Certified Public Accountants In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commission's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Commission's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Schedule of Proportionate Share of Net Pension Liability, the Schedule of Employer Contributions, the Schedule of Changes in the Commission's Total OPEB Liability and the related notes as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission's basic financial statements. The statements and schedules listed in the table of contents as supplementary information are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the organizational data section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 27, 2024 on our consideration of the Commission's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Commission's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission's internal control over financial reporting and compliance. (,t7U&J, Z)k ar ,;&sl , 7'� CONWAY, DEUTH & SCHMIESING, PLLP CPAS & ADVISORS LITCHFIELD, MINNESOTA March 27, 2024 4 This page intentionally left blank REQUIRED SUPPLEMENTARY INFORMATION This page intentionally left blank HUTCHINSON UTILITIES COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2023 Overview of the Financial Statements Hutchinson Utilities Commission is a fund of the City of Hutchinson, Minnesota, and is responsible for the full operation and management of the electric and natural gas systems of the City. The annual report of Hutchinson Utilities Commission includes the financial statements, the independent auditor's report, and notes detailing the financial statements and this management's discussion and analysis report. The report also includes supplementary informatior for each of Hutchinson Utilities Commission's divisions. Financial Statements Required The financial statements report information about Hutchinson Utilities Commission using accounting methods similar to those used by private sector companies. These statements offer short-term and long-term financial information about its activities. The Statement of Net Position includes all of the Commission's assets and deferred outflows of resources, liabilities and deferred inflows of resources, and net position and provides information regarding the nature and amount of investments in various assets and obligations to the Commission's creditors. They also provide the basis for computing rate of return, evaluating the capital structure, and determining the liquidity and financial flexibility of the Commission. The Statement of Revenues, Expenses and Changes in Net Position accounts for all the current year's revenues and expenses. This statement measures the success of operations over the past year and can be used to determine whether all costs are recovered through user fees and other charges. This statement measures the Commission's profitability and credit worthiness. The Statement of Cash Flows provides information about the Commission's cash receipts and cash payments during the reporting period. This statement reports cash receipts, cash payments, and net changes in cash resulting in cash balances during the reporting period. Financial Statement Analvsis Total gross investment in capital and right to use assets increased to $163,584,490 in 2023 from $160,932,837 in 2022 Capital and right to use assets increased $2,651,653 primarily because of upgrades and improvements to the Cooling Tower Repair project, Plant 2 Unilux Boiler project, Plant 1 Substation SCADA Relay project, Hutchinson Substation Transformer project and HCP Interconnection Project. Operating revenues decreased and operating expenses decreased from 2022 by $3,844,696 and $4,349,636, respectively. Operating income increased from 2022 by $504,940. The primary decrease in operating revenues and operating expenses was due to a decrease in electric and natural gas sales in 2023, by $2,265,529 and $1,543,219, respectively, from 2022. The primary area of the increase in operating income was due to a decrease in the cost to generate electricity, decreased natural gas costs, and an increase in utility billing rates charged to customers. 5 HUTCHINSON UTILITIES COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2023 Significant Transactions In 2023, the Commission transferred $1,904,536 per agreement to the City of Hutchinson. Condensed Financial Statements A summary of the Statement of Net Position is presented in Table 1. Table 1 Condensed Statement of Net Position 2023 2022 Current Assets Restricted Assets Net Capital and Right to Use Assets Total Assets Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources Current Liabilities Long -Term Liabilities Total Liabilities Deferred Inflows of Resources Net Position Net Investment in Capital Assets Unrestricted Total Net Position Total Liabilities, Deferred Inflows of Resources and Net Position $ 30,984,691 $ 30,486,315 $ 3,255,656 3,689,480 71,936,753 73,706,492 106,177,100 107,882,287 988,741 1,628,530 $ 107,165,841 $ 109,510,817 $ $ 3,354,520 $ 4,076,441 $ 25,700,332 30,160,229 _ 29,054,852 34,236,670 1,331,753 131,405 Increase Decrease) 498,376 (433,824) (1,769,739) (1,705,187) (639,789) 344,9 (721,921) (4,459,897) (5,181,818) 1,200,348 54,151,882 53,541,798 610,084 22,627,354 21,600,944 1,026,410 76,779,236 75,142,742 1,636,494 $ 107,165,841 $ 109,510,817 A 344,9 HUTCHINSON UTILITIES COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2023 Condensed Financial Statements (Cont'd) A summary of the Statement of Revenues, Expenses and Changes in Net Position is presented in Table 2. Table 2 Condensed Statement of Revenues, Expenses and Changes in Net Position Increase 2023 2022 (Decrease Operating Revenues Operating Expenses Cost of Operations Depreciation and Amortization Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses) Change in Net Position Net Position, Beginning of Year Net Position, End of Year Budgetary Highlights $ 42,000,714 $ 45,845,410 $ (3,844,696) 36,942,998 41,183,409 (4,240,411) 4,451,820 4,561,045 (109,225) 41,394,818 45,744,454 (4,349,636) 605,896 100,956 504,940 1,030,598 (1,442,600) 2,473,198 1,636,494 (1,341,644) 2,978,138 75,142,742 76,484,386 (1,341,644) $ 76,779,236 $ 75,142,742 $ 1,636,494 The Commission adopts an annual Operating Budget and a Capital Improvement Budget. Because of its enterprise nature and in order to comply with Federal Energy Regulatory Commission accounting and reporting requirements, the budgets are not operated as statutory budgets. The Commission and Utilities staff review budget results monthly and the budget is used as a financial management tool. A summary of the 2023 Budget Analysis is presented in Table 3. 7 HUTCHINSON UTILITIES COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2023 Budgetary Highlights (Cont'd) Table 3 Condensed Budget Analysis Operating Revenues Operating Expenses Cost of Operations Depreciation and Amortization Expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses) Change in Net Position Net Position, Beginning of Year Net Position, End of Year 2023 Budget 2023 Actual Over $ 45,435,775 $ 42,000,714 $ (3,435,061) 39,902,238 36,942,998 (2,959,240) 4,400,000 4,451,820 51,820 44,302,238 41,394,818 (2,907,420) 1,133,537 605,896 (527,641) (64,867) 1,030,598 1,095,465 1,068,670 1,636,494 567,824 75,142,742 75,142,742 $ 76,211,412 $ 76,779,236 $ 567,824 Actual operating revenues were $3,435,061 under budgeted revenues while operating income (loss) was under budget by $527,641. The actual operating revenues for the Commission had a variance of approximately 7.56% from budgeted operating revenues. Operating expenses were $2,907,420 less than budgeted. Purchased Power and Gas for Generation expenses were lower than budgeted due to decreasing Natural Gas prices along with a decreased Gas demand for power generation. In 2018, the Commission entered into an agreement for a specific Payment in Lieu of Taxes (PILOT). The agreement requires the Commission to make payments equaling $1,904,536 in 2023. Starting in calendar year 2007, the Commission reallocated its common expenses between the two divisions. Formulas were developed and used to establish the common expenses between the two utilities, in particular, Customer Service and Collection Accounts and the Administrative and General Accounts. Capital and Riaht to Use Assets and Lona-Term Liabilitv Activit The Commission's investment in capital and right to use assets increased to $163,584,490 in 2023. This is an increase of $2,651,653 from 2022. Refer to Note 5 of the Notes to the Financial Statements for the Commission's 2023 capital asset activity. At year-end, the Commission had $19,255,000 in bonds outstanding and $872,514 in compensated absences. Refer to Note 6 of the Notes to the Financial Statements for a schedule showing the Commission's long-term liability activity. At 2023 year-end, the Commission had a Solar Array Land Lease Liability of $778,560. See Note 7 in the Financial Statements for a schedule showing the Commission's long-term lease activity. 0 HUTCHINSON UTILITIES COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS DECEMBER 31, 2023 Economic Factors and Next Year's Budget The Commission considered many local community and external energy industry factors when setting the Electric & Gas Division fiscal year 2023 budgets, rates, and fees that will be charged to customers. Of significance was the continual increase in costs associated with purchased electrical wholesale power and transmission fees. Conversely, the Gas Division continues to see favorable prices for the procurement of the natural gas commodity but is budgeting for higher prices. Both divisions continue to see consistent energy consumption forecasts in the near future. The Commission continued to "bundle" its electric wholesale rate to its retail customers. What this means is the operating income the Commission receives from its wholesale KWHR sales is applied to the wholesale rate it charges its retail customers. This "bundling" effect reduces the overall blended cost of wholesale power which aids in retail rate pricing stability. Contact Information Any questions regarding information contained in this report and requests for additional information should be addressed to the Hutchinson Utilities Commission, 225 Michigan Street SE, Hutchinson, MN 55350 or by phone at (320) 587-4746. 0 This page intentionally left blank BASIC FINANCIAL STATEMENTS This page intentionally left blank HUTCHINSON UTILITIES COMMISSION STATEMENT OF NET POSITION DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2022 2023 2022 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Assets Current Assets Cash and Investments $ 24,524,926 $ 23,394,283 Receivables Accounts Receivable (Net of Allowance for Doubtful Accounts of $116,824 and $77,677, Respectively) 3,271,218 4,348,083 Interest Receivable 141,412 118,284 Sales Tax Receivable 318,168 224,217 Inventory 2,500,144 2,212,972 Prepaid Items 228,823 188,476 Total Current Assets 30,984,691 30,486,315 Noncurrent Assets Restricted Assets Cash and Investments 3,255,656 3,689,480 Capital and Right to Use Assets Assets Not Being Depreciated or Amortized 6,369,189 5,579,725 Other Capital and Right to Use Assets, Net of Depreciation and Amortization 65,567,564 68,126,767 Net Capital Assets 71,936,753 73,706,492 Total Noncurrent Assets 75,192,409 77,395,972 Total Assets 106,177,100 107,882,287 Deferred Outflows of Resources 988,741 1,628,530 Total Assets and Deferred Outflows of Resources $ 107,165,841 $ 109,510,817 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Current Liabilities Accounts Payable $ 2,641,109 $ 3,378,907 Customer Deposits 314,101 326,775 Accrued Expenses Interest 58,538 65,534 Salaries Payable 340,772 305,225 Total Current Liabilities 3,354,520 4,076,441 Long -Term Liabilities Net Pension Liability 3,701,830 5,361,862 Total OPEB Liability 85,461 103,307 Other Long -Term Liabilities Due Within One Year 2,909,995 2,828,641 Other Long -Term Liabilities Due in More Than One Year 19,003,046 21,866,419 Total Long -Term Liabilities 25,700,332 30,160,229 Total Liabilities 29,054,852 34,236,670 Deferred Inflows of Resources 1,331,753 131,405 Net Position Net Investment in Capital Assets 54,151,882 53,541,798 Unrestricted 22,627,354 21,600,944 Total Net Position 76,779,236 75,142,742 Total Liabilities, Deferred Inflows of Resources and Net Position $ 107,165,841 $ 109,510,817 See Accompanying Notes to the Financial Statements 10 HUTCHINSON UTILITIES COMMISSION STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 OPERATING REVENUES Electric Energy Sales Natural Gas Sales Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Production Operations Maintenance Purchased Power/Gas Other Power Supply Transmission Operations Maintenance Distribution Operations Maintenance Customer Accounts Expense Sales Expense Administrative and General Depreciation and Amortization Expense Contribution to City of Hutchinson Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Merchandise and Contract Work, Net Miscellaneous Income Gain (Loss) on Disposal of Assets Bond Premium Interest Expense Total Nonoperating Revenues (Expenses) Change in Net Position NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR See Accompanying Notes to the Financial Statements 11 2023 2022 $ 28,055,608 $ 30,321,137 11,976,909 13,520,128 1,968,197 2,004,145 42,000,714 45,845,410 4,318,980 5,702,451 828,414 1,018,959 19,688,330 22,521,870 296,850 299,646 3,409,151 3,292,156 47,429 113,737 2,126,038 2,027,003 1,043,215 1,057,998 502,610 475,355 208,674 232,897 2,568,771 2,574,145 4,451,820 4,561,045 1,904,536 1,867,192 41,394,818 45,744,454 605,896 100,956 1,354,735 (878,835) 7,263 18,439 244,976 96,081 (3,693) 219,065 219,065 (795,441) (893,657) 1,030,598 (1,442,600) 1,636,494 (1,341,644) 75,142,742 76,484,386 $ 76,779,236 $ 75,142,742 HUTCHINSON UTILITIES COMMISSION STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers Payments Received from Other Sources Payments to Suppliers Payments to Employees Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Other Noncapital Income (Expense) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Additions to Utility Plant Proceeds from Sale of Assets Principal Payments on Long -Term Liabilities Interest Paid on Long -Term Liabilities Net Cash Provided (Used) by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest Income Net Increase (Decrease) in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF CASH AND CASH EQUIVALENTS Current Assets - Cash and Investments Restricted Assets - Cash and Investments Total Cash and Cash Equivalents See Accompanying Notes to the Financial Statements 12 2023 2022 $ 41,096,708 $ 43,330,847 1,874,246 1,920,704 (32,823,447) (35,577,908) (4,955,434) (4,511,323) 5,192,073 5,162,320 252,239 114,520 (2,682,081) (1,954,412) 64,156 (2,594,582) (2,453,174) (802,437) (903,198) (6,079,100) (5,246,628) 1,331,607 (902,703) 696,819 (872,491) 27,083,763 27,956,254 $ 27,780,582 $ 27,083,763 $ 24,524,926 $ 23,394,283 3,255,656 3,689,480 $ 27,780,582 $ 27,083,763 HUTCHINSON UTILITIES COMMISSION STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 RECONCILIATION OF OPERATING INCOME (LOSS) TO CASH FLOWS FROM OPERATING ACTIVITIES Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Depreciation and Amortization Pension Related Adjustments OPEB Related Adjustments (Increase) Decrease in Assets Accounts Receivable Sales Tax Receivable Inventory Prepaid Items Increase (Decrease) in Liabilities Accounts Payable Customer Deposits Salaries Payable Compensated Absences Net Cash Provided (Used) by Operating Activities 2023 2022 $ 605,896 $ 100,956 4,451,820 4,561,045 174,465 363,335 (12,206) (27,789) 1,076,865 (523,642) (93,951) (83,441) (287,172) (28,908) (40,347) (141,429) (737,798) 792,851 (12,674) 13,224 35,547 13,629 31,628 122,489 $ 5,192,073 $ 5,162,320 NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES In 2022, a lease obligation of $841,316 was incurred when the Commission entered into a lease for the right to use land for a solar array. See Accompanying Notes to the Financial Statements 13 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. REPORTING ENTITY Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, is governed by five members who are appointed by the Council of the City of Hutchinson, Minnesota. The accompanying financial statements present only the Hutchinson Utilities Commission fund and are not intended to present fairly the financial position of the City of Hutchinson, Minnesota. The financial statements present the Commission and its component units. The Commission includes all funds, organizations, institutions, agencies, departments and offices that are not legally separate from such. Component units are legally separate entities for which the Commission is financially accountable, or for which the exclusion of the component unit would render the financial statements of the Commission misleading. The criteria used to determine if the Commission is financially accountable for a component unit includes whether or not 1) the Commission appoints the voting majority of the potential component unit's governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit, or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to, or impose specific financial burdens on, the Commission. As a result of applying the component unit definition criteria above, the Commission does not have any component units. B. FUND ACCOUNTING The operations of the Commission are recorded as a proprietary fund. The proprietary fund is used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes. C. MEASUREMENT FOCUS. BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION The financial statements include the operations of the City of Hutchinson Municipal Utilities. The Electric and Natural Gas divisions are treated as a single enterprise fund of the City of Hutchinson, Minnesota. The Utilities are governed by the Hutchinson Utilities Commission, which is appointed by the City Council. No other operations are controlled by the Hutchinson Utilities Commission. The accounts of the Commission are organized on the basis of fund accounting. The operation of the fund is accounted for with a separate set of self -balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, net position, revenues, and expenses. Government resources are allocated to and accounted for in the individual fund based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. 14 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Cont'd) The proprietary fund is accounted for using the accrual basis of accounting and economic resources measurement focus. Revenues are recognized when earned, and expenses are recognized when incurred. Revenue from electricity and gas sales is reflected in the accounts only at the time such revenue is actually billed to customers. Accordingly, no recognition is given in the accounts for revenue from sales between established cycle billing dates. The proprietary fund distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. It is generally the Commission's policy to use restricted resources first, then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position is available. D. DEPOSITS AND INVESTMENTS The Commission's cash and cash equivalents are considered to be cash on hand, deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition. The Commission may invest in the following types of investments as authorized by Minn. Stat. §§118A.04 and 118A.05: (1) securities which are direct obligations or are guaranteed or insured issues of the United States, its agencies, its instrumentalities, or organizations created by an act of Congress, except mortgage - backed securities defined as "high risk" by Minn. Stat. §118A.04, subd. 6; (2) mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments; (3) general obligations of the State of Minnesota and its municipalities, and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service; (4) time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States banks; (5) commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less; and 15 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) D. DEPOSITS AND INVESTMENTS (Cont'd) (6) with certain restrictions, in repurchase agreements, securities lending agreements, joint powers investment trusts, and guaranteed investment contracts. Cash and investments were comprised of deposit accounts, money market accounts, municipal bonds, FFCB bonds, FHLB bonds, and brokered certificates of deposit. The Commission categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs. The Commission has an investment policy in place that addresses interest rate risk, credit risk, concentration of credit risk and custodial risk as follows: Custodial Credit Risk - Deposits: For deposits, this is the risk that in the event of bank failure, the Commission's deposits may not be returned to it. Minnesota Statutes requires that all Commission deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110 percent of deposits in excess of FDIC Insurance. The Commission's investment policy states the collateralization level will be 110% of the market value of principal and accrued interest. When the pledged collateral consists of notes secured by first mortgages, the collateral level will be 140% of the market value of principal and accrued interest. Authorized collateral includes the obligations of the U.S. Treasury, agencies, and instrumentalities, shares of investment companies whose only investments are in the aforementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, futures contracts, repurchase and reverse repurchase agreements, and commercial paper of the highest quality with a maturity of no longer than 270 days, as well as certain first mortgage notes, and certain other state or local government obligations. Minnesota statutes require that securities pledged as collateral be held in safekeeping by the Commission treasurer or in a financial institution other than that furnishing the collateral. Interest Rate Risk - This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates. The Commission's investment policy states the Commission should manage their interest rates based on safety, liquidity and the overall rate of return on the investment. The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements. Extended maturities may be utilized to take advantage of higher yields; however, no investment shall be made with a term of more than ten years. Credit Risk - Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations. The Commission's investment policy states it will comply with Minnesota Statutes Chapter 118A. HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) D. DEPOSITS AND INVESTMENTS (Cont'd) Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in a single issuer. Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments, individual financial institutions or maturities. The Commission's investment policy states the Commission will attempt to diversify its investments according to type and maturity. Custodial Credit Risk - Investments: For an investment, this is the risk that in the event of the failure of the counterparty, the Commission will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Commission's investment policy states when investments purchased by the Commission are held in safekeeping by a broker/dealer, they must provide asset protection of $500,000 through the Securities Investor Protection Corporations (SIPC) and at least another $2,000,000 Supplemental Insurance Protection, provided by the broker dealer. E. RECEIVABLES AND OPERATING REVENUES AND EXPENSES An allowance for doubtful accounts is recorded based on historical electric and natural gas revenues, historical loss levels, and an analysis of the collectability of individual accounts. Meters are read throughout the month and revenues are recognized when utility services are billed to customers. Hutchinson Utilities Commission did not accrue revenues for services provided but not billed at the end of the year. Monthly billings from the wholesale power and natural gas suppliers, which are for power and natural gas costs to the last day of the month, are reflected in the accounts. F. INVENTORY Inventories of materials and supplies are recorded at average cost, which does not exceed market. G. PREPAID ITEMS Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in the financial statements. H. CAPITAL AND RIGHT TO USE ASSETS Capital and right to use assets, both tangible and intangible, which include property, plant, equipment and infrastructure assets (e.g., roads, sidewalks and similar items) and easements, are recorded at cost. Right to use assets are capitalized at the present value of minimum lease payments. The cost of additions to capital assets includes contracted work, direct labor, and materials. Major outlays for capital assets and improvements are capitalized as projects are constructed. Repairs, replacement, and the renewal of items determined to be less than units of property are charged to maintenance. Donated assets are recorded as capital assets at their estimated acquisition value at the date of donation. 17 HUTCHINSON UTILITIES COMMISSION NOTE 1 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) H. CAPITAL AND RIGHT TO USE ASSETS (Cont'd) Tangible and intangible capital and right to use assets of the Commission are amortized or depreciated using the straight-line, full month convention method over the following estimated useful lives: Buildings 35-60 years Transmission plant (electric) 20-35 years Distribution plant (electric) 20-35 years Building improvement 15-30 years Transmission plant (gas) 10-45 years Distribution plant (gas) 10-45 years Generation plant 10-30 years General plant 5-10 years Vehicles 5-10 years Office equipment 3-5 years Computer equipment 3-5 years Capital assets not being depreciated include land, easements and construction in progress, if any. I. DEFERRED OUTFLOWS OF RESOURCES In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. Deferred outflows of resources represents a consumption of net position that applies to a future reporting period. During that future period, it will be recognized as an outflow of resources (expense). The Commission has two items that qualify for reporting in this category on the financial statements which is related to pensions and other post -employment benefits. J. COMPENSATED ABSENCES The liability for compensated absences reported in the financial statements consists of unpaid, accumulated vacation and sick leave balances. The liability has been calculated using the vesting method, in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included. Compensated absences are accrued when incurred in the financial statements. The Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting. The current portion consists of an amount based on a trend analysis of current usage of vacation and vested sick leave. The noncurrent portion consists of the remaining amount of vacation and total vested sick leave. Both union and nonunion employees can accrue a maximum of 200 hours per year of vacation pay. Both union and nonunion employee may carry over a maximum of two times their annual accrual of vacation into the next year. Each permanent nonunion full-time employee must use at least 40 hours of vacation per year. Vacation pay is 100% payable at severance of employment. A maximum of 720 hours can be accrued for sick leave. After accumulation of 720 hours, a payback of one-half of the amount over 720 hours will be made annually. Upon retirement or death before retirement, severance payable is paid back at one-half of any amount of hours remaining will be made by the commission. 18 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) K. PENSIONS For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. The Commission participates in various pension plans; total pension expense for the year ended December 31, 2023, was $406,765. The components of pension expense are noted in the plan summaries. L. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Employees of the Commission pay premiums based on a negotiated schedule. Since the insurance rate is not based on age, the Commission has an implicit rate subsidy factor in postemployment health care expenses. Additionally, Minnesota Statutes require the Commission to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage. The Commission's bargaining agreement and personnel policy do not provide for any contributions upon employee retirement. M. LONG-TERM OBLIGATIONS In the financial statements, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Lease liabilities are measured at the present value of payments expected to be made and amortized as a component of interest expense over the lease term. N. DEFERRED INFLOWS OF RESOURCES In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period. During that future period, it will be recognized as an inflow of resources (revenue). The Commission has one item that qualifies for reporting in this category on the financial statements which is related to pensions. O. NET POSITION Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the financial statements. Net investment in capital assets consists of capital assets, net of accumulated depreciation, and right to use assets, net of accumulated amortization, reduced by the outstanding balance of any long-term liabilities used to build or acquire the capital and right to use assets. Net position is reported as restricted in the financial statements when there are limitations on their use through external restrictions imposed by creditors, grantors or laws or regulations of other governments. Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets. 19 HUTCHINSON UTILITIES COMMISSION NOTE 1 NOTE 2 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd) P. BUDGETS AND BUDGETARY ACCOUNTING The General Manager is responsible for preparing and submitting an annual budget. Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Q. USE OF ESTIMATES The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources, and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. R. PRIOR YEAR INFORMATION The basic financial statements include certain prior -year partial comparative information in total but not at the level of detail required for a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Commission's financial statements for the year ended December 31, 2022, from which the partial information was derived. DEPOSITS AND INVESTMENTS A. DEPOSITS In accordance with applicable Minnesota Statutes, Hutchinson Utilities Commission maintains deposits at depository banks authorized by the Commission. Custodial Credit Risk - Deposits: The Commission's bank balances were not exposed to custodial credit risk because they were fully insured through the Federal Deposit Insurance Corporation as well as collateralized with securities held by the pledging financial institution's trust department or agent and in the Commission's name. Deposits in Bank Money Market Accounts Petty Cash Total Deposits $ 8,820,145 234,154 850 $ 9,055,149 20 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 2. DEPOSITS AND INVESTMENTS (Cont'd) B. INVESTMENTS The Commission had the following investments: Municipal Bonds FFCB Bonds FHLB Bonds Brokered Certificates of Deposit Interest Rate Risk Fair Value Maturity Date $ 9,555,357 1-12 years 1,570,675 1-2 years 3,597,645 1-3 years 4,001,756 1-5 years Total Investments $ 18,725,433 The Municipal Bonds had a variety of ratings. The FFCB Bonds and FHLB Bonds were rated AAA. The Brokered Certificates of Deposit were not rated. Investment's fair value measurements are as follows: Fair Value Measuring Unit Fair Level Level Level Value Inputs Inputs Inputs Municipal Bonds $ 9,555,357 $ $ 9,555,357 $ FFCB Bonds 1,570,675 1,570,675 FHLB Bonds 3,597,645 3,597,645 Brokered Certificates of Deposit 4,001,756 4,001,756 Total Investments $ 18,725,433 $ 0 $ 18,725,433 $ 0 The following is a summary total of deposits and investments: Deposits (Note 2.A.) $ 9,055,149 Investments (Note 2.B.) 18,725,433 Total Deposits and Investments $ 27,780,582 21 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 2. DEPOSITS AND INVESTMENTS (Cont'd) B. INVESTMENTS (Cont'd) Deposits and investments are presented in the basic financial statements as follows: Current Assets Cash and Investments $ 24,524,926 Noncurrent Assets Restricted Assets Cash and Investments 3,255,656 Total Deposits and Investments $ 27,780,582 NOTE 3. DEPOSITS AND INVESTMENTS - RESTRICTED Restricted cash and investments are designated by bond covenants for specific purposes. Restricted cash consisted of the following: Public Utility Revenue Refunding Bonds, Series 2012A Funds required to be held in a debt service reserve account based on criteria set aside in the bond issuance document. $ 2,072,000 Public Utility Revenue Bonds, Series 2017B Funds required to be held in a debt service reserve account based on criteria set aside in the bond issuance document. 1,183,656 Total Cash and Investments - Restricted $ 3,255,656 The following items have been designated by the Commission for the following purposes: Rate Stabilization - Electric $ 503,363 Rate Stabilization - Gas 626,565 Payment in Lieu of Taxes 1,942,626 Catastrophic 1,000,000 Expansion and Development Reserve Account Funds designated for the expansion and development of the utility. 3,450,000 60 Days Operating Cash 6,631,467 Total Cash and Investments - Designated $ 14,154,021 The above Commission designated amounts are included in the Current Assets -Cash and Investments total. 22 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 4. INVENTORY Inventory consists of the following: Electric Division Fuel Oil and Lubricants $ 59,446 Plant Systems Material 9,155 Engine Parts 984,693 Distribution Materials 544,394 Transformers 348,101 Total Electric Division 1,945,789 Natural Gas Division Fittings 250,785 Transmission Line Gas 303,570 Total Natural Gas Division 554,355 Total Inventory $ 2,500,144 23 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 5. CAPITAL ASSETS Capital asset activity was as follows: Capital Assets, Not Being Depreciated Land Easements Construction in Progress Total Capital Assets, Not Being Depreciated Beginning Ending Balance Increase Decrease Balance $ 559,528 $ $ $ 559,528 4,030,760 4,030,760 989,437 1,686,872 (897,408) 1,778,901 5,579,725 1,686,872 (897,408) 6,369,189 Capital Assets, Being Depreciated Structures and Improvements 135,045,429 Equipment 19,257,735 Software 208,632 Total Capital Assets, Being Depreciated 154,511,796 Right to Use Assets, Being Amortized Land Less Accumulated Depreciation for Structures and Improvements Equipment Software Total Accumulated Depreciation Less Accumulated Amortization for Land 841,316 1,261,829 630,788 1,892,617 74,953,349 3,774,945 12,074,996 647,317 169,956 1,514 87,198,301 4,423,776 28,044 28,044 136,307,258 (30,428) 19,858,095 208,632 (30,428) 156,373,985 841,316 78,728,294 (30,428) 12,691,885 171,470 (30,428) 91,591,649 56,088 Total Capital and Right to Use Assets, Being Depreciated and Amortized, Net 68,126,767 (2,559,203) 0 65,567,564 Net Capital Assets $ 73,706,492 $ (872,331) $ (897,408) $ 71,936,753 Depreciation and amortization expense was charged to the following functions: Electric Division Natural Gas Division $ 3,354,505 1,097,315 Total Depreciation and Amortization Expense $ 4,451,820 24 HUTCHINSON UTILITIES COMMISSION NOTE 6 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 LONG-TERM LIABILITIES A. COMPONENTS OF LONG-TERM LIABILITIES Interest Rates Public Utility Revenue Refunding Bonds, Series 2012A 4.00-5.00% Public Utility Revenue Bonds, Series 2017B 2.50-4.00% Bond Premium Long -Term Leases 2.50% Compensated Absences Total Long -Term Liabilities Final Balance Maturity Outstanding 12/01/2026 $ 5,955,000 12/01 /2037 13, 300, 000 1,006,967 1 /31 /2051 778,560 872,514 $ 21,913,041 On July 19, 2012, Hutchinson Utilities Commission issued Public Utility Revenue Refunding Bonds, Series 2012A for $20,720,000, with an interest rate of 4.00% to 5.00%. The Commission issued the bonds to advance refund a portion of the 2013 through 2025 maturities of the Public Utility Revenue Bonds, Series 2003B. The Commission completed the refunding to reduce its debt service payment over the next 14 years by $1,638,277. This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $1,245,620. On October 31, 2017, the Hutchinson Utilities Commission issued Public Utility Revenue Bonds of 2017 for $16,675,000. The proceeds of the issue were used to purchase and install new generators for the expansion of electric generation. B. MINIMUM DEBT PAYMENTS Annual debt service requirements to maturity for bonded debt is as follows: Year Ending December 31 Revenue Refunding Bonds, Series 2012A Principal Interest Revenue Bonds, Series 2017B Principal Interest 2024 $ 1,895,000 $ 278,800 $ 760,000 $ 423,656 2025 1,980,000 203,000 790,000 393,256 2026 2,080,000 104,000 820,000 361,656 2027 850,000 328,856 2028 885,000 294,856 2029-2033 4,810,000 1,101,659 2034-2037 4,385,000 339,326 $ 5,955,000 $ 585,800 $ 13,300,000 $ 3,243,265 25 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 6. LONG-TERM LIABILITIES (Cont'd) C. CHANGES IN LONG-TERM LIABILITIES Beginning Ending Due Within Balance Additions Reductions Balance One Year Revenue Refunding Bonds, Series 2012A $ 7,780,000 $ $ (1,825,000) $ 5,955,000 $ 1,895,000 Revenue Bonds, Series 2017B 14,030,000 (730,000) 13,300,000 760,000 Bond Premium 1,226,032 (219,065) 1,006,967 219,065 Long -Term Leases 818,142 (39,582) 778,560 Compensated Absences* 840,886 31,628 872,514 35,930 Total Long -Term Liabilities $ 24,695,060 $ 31,628 $ (2,813,647) $ 21,913,041 $ 2,909,995 * The change in compensated absences liability is presented as a net change. D. PLEDGED REVENUES Future revenue pledged for the payment of long-term debt is as follows: Bond Issue/ Percent Remaining Principal Pledged Use of Proceeds/ of Total Term of Principal and Interest Revenue Type Debt Service Pledge and Interest Paid Received Revenue Refunding Bonds, Series 2012A Natural Gas Utility Charges 100% 2012-2026 $ 6,540,800 $ 2,158,550 $ 11,976,909 Revenue Bonds, Series 2017B Electric Utility Charges 100% 2017-2037 16,543,265 1,182,856 28,055,608 W, HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 7. LONG-TERM LEASES Lease agreements are summarized as follows: Origination Payment Payment Date Terms Amount Interest Rate Solar Array Land Lease 1/31/2022 30 years $ 40,000 2.50% Current Year Original Lease Additional Balance Liability Outflows Outstanding Solar Array Land Lease $ 841,316 $ $ 778,560 Land was leased by the Commission from the City of Hutchinson to be used to construct and operate a solar power generating facility starting on 1/31/2022. The lease is for a period of 20 years and can be renewed for up to two five year extensions. The interest rate on the lease is a fixed rate of 2.50%. Annual requirements to amortize lease obligations and related interest are as follows: Year Ending December 31 Principal Interest 2024 $ $ 2025 2026 2027 2028 2029-2033 2034-2038 2039-2043 2044-2048 2049-2051 NOTE 8. RISK MANAGEMENT 20,536 19,464 21,049 18,951 21,576 18,424 22,115 17,885 119,150 80,850 134,807 65,193 152,522 47,478 172,565 27,435 114,240 5,760 $ 778,560 $ 301,440 The Commission purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT), which is a public entity risk pool currently operating as a common risk management and insurance program, with cities in the state. The Commission pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is self-sustaining through commercial companies for excess claims. The Commission is covered through the pool for any claims incurred but unreported, but retains risk for the deductible portion of its insurance policies. The amount of these deductibles is considered immaterial to the financial statements. There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years. 27 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 8. RISK MANAGEMENT (Cont'd) The Commission's workers' compensation insurance policy is retrospectively rated. With this type of policy, final premiums are determined after loss experience is known. The amount of premium adjustment for 2023 is estimated to be immaterial based on workers' compensation rates and salaries for the year. There are no other claims liabilities reported in the funds based on the requirements of accounting standards, which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. NOTE 9. DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION The Commission participates in the following cost -sharing multiple -employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. General Employees Retirement Plan (GERP; General Employees Plan; accounted for in the General Employees Fund): All full-time and certain part-time employees of the Commission are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. B. BENEFITS PROVIDED PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state Legislature. Vested, terminated employees who are entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service. GFRP RPnPfits- General Employees Plan benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2 percent for each of the first 10 years of service and 1.7 percent for each additional year. Under Method 2, the accrual rate for Coordinated members is 1.7 percent for all years of service. For members hired prior to July 1, 1989 a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. 28 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 9. DEFINED BENEFIT PENSION PLANS - STATEWIDE (Cont'd) B. BENEFITS PROVIDED (Cont'd) GERP Benefits: (Cont'd) Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50 percent of the cost -of -living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. In 2023, legislation repealed the statute delaying increases for members retiring before full retirement age. C. CONTRIBUTIONS Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state Legislature. GERP Contributions: Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2023 and the Commission was required to contribute 7.50 percent for Coordinated Plan members. The Commission's contributions to the General Employees Fund for the year ended December 31, 2023, were $405,709. The Commission's contributions were equal to the required contributions as set by state statute. D. PENSION COSTS GERP Pension Costs: At December 31, 2023, the Commission reported a liability of $3,701,830 for its proportionate share of the General Employees Fund's net pension liability. The Commission's net pension liability reflected a reduction due to the State of Minnesota's contribution of $16 million. The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the Commission totaled $102,159. The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Commission's proportionate share of the net pension liability was based on the Commission's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2022, through June 30, 2023, relative to the total employer contributions received from all of PERA's participating employers. The Commission's proportion share was 0.0662 percent at the end of the measurement period and 0.0677 percent for the beginning of the period. 29 HUTCHINSON UTILITIES COMMISSION NOTE 9 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Cont'd) D. PENSION COSTS (Cont'd) Commission's Proportionate Share of the Net Pension Liability State of Minnesota's Proportionate Share of the Net Pension Liability Associated With the Commission $ 3,701,830 102,159 Total $ 3,803,989 There were no provision changes during the measurement period. For the year ended December 31, 2023, the Commission recognized pension expense of $97,499 for its proportionate share of GERP's pension expense. In addition, the Commission recognized an additional $459 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General Employees Fund. At December 31, 2023, the Commission reported its proportionate share of GERP's deferred outflows of resources and deferred inflows of resources from the following sources: Differences Between Expected and Actual Economic Experience Changes in Actuarial Assumptions Net Difference Between Projected and Actual Investment Earnings Changes in Proportion Contributions Paid to GERP Subsequent to Measurement Date Totals Deferred Deferred Outflows of Inflows of Resources Resources $ 122,231 $ 26,696 626,760 1,014,640 167,153 29,977 123,264 204,357 $ 983,325 $ 1,331,753 The $204,357 reported as deferred outflows of resources related to pensions resulting from Commission contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2024. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31 2024 2025 2026 2027 Pension Expense Amount $ 81,567 (621,520) 67,473 (80,305) 30 HUTCHINSON UTILITIES COMMISSION NOTE 9 NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Cont'd) E. LONG-TERM EXPECTED RETURN ON INVESTMENT The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Long -Term Expected Real Rate of Return Domestic Equity 33.50% International Equity 16.50% Fixed Income 25.00% Private Markets 25.00% 100.00% F. ACTUARIAL METHODS AND ASSUMPTIONS 5.10% 5.30% 0.75% 5.90% The total pension liability in the June 30, 2023, actuarial valuation was determined using an individual entry -age normal actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total liability is 7.0 percent. This assumption is based on a review of inflation and investments return assumptions from a number of national investment consulting firms. The review provided a range of return investment return rates deemed to be reasonable by the actuary. An investment return of 7.0 percent was deemed to be within that range of reasonableness for financial reporting purposes. Inflation is assumed to be 2.25 percent for the General Employees Plan. Benefit increases after retirement are assumed to be 1.25 percent for the General Employees Plan. Salary growth assumptions in the General Employees Plan range in annual increments from 10.25 percent after one year of service to 3.0 percent after 27 years of service. Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. The table is adjusted slightly to fit PERA's experience. Actuarial assumptions for the General Employees Plan are reviewed every four years. The most recent four-year experience study for the General Employees Plan was completed in 2022. The assumption changes were adopted by the Board and became effective with the July 1, 2023 actuarial valuation. The following changes in actuarial assumptions occurred in 2023: GERP Changes in Actuarial Assumptions: The investment return assumption and single discount rate were changed from 6.5 percent to 7.00 percent. 31 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 9. DEFINED BENEFIT PENSION PLANS - STATEWIDE (Cont'd) F. ACTUARIAL METHODS AND ASSUMPTIONS (Cont'd) GERP (Cont'd) Changes in Plan Provisions: An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1, 2023. The vesting period of those hired after June 30, 2010, was changed from five years of allowable service to three years of allowable service. The benefit increase delay for early retirements on or after January 1, 2024, was eliminated. A one-time, non -compounding benefit increase of 2.5 percent minus the actual 2024 adjustment will be payable in a lump sum for calendar year 2024 by March 31, 2024. G DISCOUNT RATE The discount rate used to measure the total pension liability in 2023 was 7.0 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees were projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. H. PENSION LIABILITY SENSITIVITY The following presents the Commission's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the Commission's proportionate share of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the current discount rate: GERP 1 % Lower 6.00% $ 6,548,834 Current Discount Rate 7.00% 3,701,830 1 % Higher 8.00% 1,360,060 I. PENSION PLAN FIDUCIARY NET POSITION Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. 32 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 10. DEFERRED COMPENSATION PLAN The Commission offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all Commission employees, permits them to defer a portion of their salary into future years. Participation in the plan is optional. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. Investments are managed by the plan's trustee under one of four investment options, or a combination thereof. The choice of the investment option(s) is made by the participants. NOTE 11. PUBLIC EMPLOYEES DEFINED CONTRIBUTION PLAN Four Commissioners of the Hutchinson Utilities Commission are covered by the Defined Contribution Plan, a multiple -employer deferred compensation plan administered by PERA. The Defined Contribution Plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes five percent of salary which is matched by the elected official's employer. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives two percent of employer contributions and twenty-five hundredths of one percent (0.25 percent) of the assets in each member's account annually. Total contributions made by the Commission during fiscal year 2023 were: Contribution Amount Percentage of Covered Payroll Employee Employer Employee Employer Required Rate Commissioners $ 1,056 $ 1,056 5.00% 5.00% 5.00% NOTE 12. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN A. PLAN DESCRIPTION The Commission operates a single -employer retiree benefit plan, (the Plan) that provides health, dental, and life insurance to eligible employees and their spouses through the Commission's commercial insurance plans. There are 51 active participants and 2 retired participants. Benefit and eligibility provisions are established through negotiations between the Commission and employee groups including a union. The union contract is renegotiated each two-year bargaining period. The Plan does not issue a publicly available financial report. No assets are accumulated in a trust that meets all of the criteria in GASB Statement No. 75, paragraph 4. B. TOTAL OPEB LIABILITY The Commission's total OPEB liability of $85,461 was measured as of December 31, 2022, and was determined by an actuarial valuation as of that date. Update procedures were used to roll forward the total OPEB liability to December 31, 2023. 33 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 12. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (Cont'd) C. CHANGES IN TOTAL OPEB LIABILITY Changes in the total OPEB liability were as follows: Total OPEB Liability Beginning of Year $ 103,307 Changes for the year Service Cost 4,242 Interest 1,877 Changes of Assumptions or Other Inputs (12,909) Benefit Payments (11,056) Net Changes (17,846) End of Year $ 85,461 Changes of assumptions and other inputs reflect a change in the discount rate from 1.84% in 2022 to 4.05%% in 2023. Sensitivity of the total OPEB liability to changes in the discount rate. The following presents the total OPEB liability of the Commission, as well as what the Commission's total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.05%) or 1-percentage-point higher (5.05%) than the current discount rate: Total OPEB Liability 1.0% Decrease 1.0% Increase in Discount Discount Rate in Discount Rate (3.05%) (4.05%) Rate (5.05%) $ 91,135 $ 85,461 $ 80,097 Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The following presents the total OPEB liability of the Commission, as well as what the Commission's total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (5.20% decreasing to 2.70%) or 1-percentage-point higher (7.20% decreasing to 4.70%) than the current healthcare cost trend rates: Healthcare Cost 1.0% Decrease Trend Rates 1.0% Increase (5.20% (6.20% (7.20% decreasing decreasing decreasing to 2.70%) to 3.70%) to 4.70%) Total OPEB Liability $ 77,748 $ 85,461 $ 94,265 34 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 12. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (Cont'd) D. OPEB EXPENSE, DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO OPEB For the year ended December 31, 2023, the Commission recognized OPEB expense of ($12,206). At December 31, 2023, the Commission reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Contributions Paid Subsequent to Measurement Date $ 5,416 $ $5,416 reported as deferred outflows of resources related to OPEB resulting from Commission contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability in the year ended December 31, 2024. E. ACTUARIAL METHODS AND ASSUMPTIONS The total OPEB liability in the December 31, 2021 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation Salary Increases Healthcare Cost Trend Rates Retiree's Share of Benefit -Related Costs 2.25% Based on the most recently disclosed assumptions for the pension plan in which the employee participates. 6.2% for 2023, decreasing over several decades to an ultimate rate of 3.7% for 2074 and later years. Assumed to increase with healthcare trend rates. A discount rate of 4.05% was applied in the measurement of the total OPEB liability. The discount rate is based on the index rate for a Fidelity 20-year Municipal GO AA Index rate for 20-year, tax exempt municipal bonds. Mortality rates were based on assumptions for General Employees used in the July 1, 2021 PERA of Minnesota Retirement Plan actuarial valuations, Pub-2010 General mortality tables with projected mortality improvements based on scale MP-2020, and other adjustments. The actuarial assumptions used in the December 31, 2021 valuation were based on the results of an actuarial experience study for the period January 1, 2022—December 31, 2022. NOTE 13. MAJOR CUSTOMERS The Electric Division derived approximately 45.33% of utility revenue from the top five major customers. The Natural Gas Division derived approximately 46.93% of its utility revenue from the top five major customers. 35 HUTCHINSON UTILITIES COMMISSION NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023 NOTE 14. RECLASSIFICATIONS Certain immaterial prior year financial statement amounts have been reclassified to conform to the current year's presentation. There was no affect on total net position. NOTE 15. COMMITMENTS A. PURCHASED POWER The Commission is committed to purchase 25 MW of its power requirements from Missouri River Energy Services pursuant to the Power Sale Agreement dated April 28, 2010. This contract is effective through January 1, 2046. B. PAYMENT IN LIEU OF TAXES The Commission is committed to contribute a portion of its total operating revenue to the City of Hutchinson in lieu of the payment of taxes pursuant to the Resolution No. 14853 dated February 10, 2018. NOTE 16. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position: Related to Pensions Related to OPEB Total Deferred Deferred Outflows of Inflows of Resources Resources $ 983,325 $ 1,331,753 5,416 $ 988,741 $ 1,331,753 This page intentionally left blank REQUIRED SUPPLEMENTARY INFORMATION This page intentionally left blank HUTCHINSON UTILITIES COMMISSION SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY DECEMBER 31, 2023 Employer's Proportionate Share of the Net Pension State's Liability Employer's Proportionate and the State's Proportionate Employer's Employer's Share Proportionate Share of the Proportionate Proportionate (Amount) of the Share of the Net Pension Plan Fiduciary Share Share Net Pension Net Pension Liability (Asset) as Net Position (Percentage) (Amount) of the Liability Liability Employer's a Percentage of as a Percentage Fiscal of the Net Net Pension Associated with Associated with Covered its Covered of the Total Year Pension Liability (Asset) the Employer the Employer Payroll Payroll Pension Ending Liability (Asset) (a) (b) (a+b) (c) ((a+b)/c) Liability Pensions GERP June 30, 2023 0.0662% $ 3,701,830 $ 102,159 $ 3,803,989 $ 5,328,556 71.39% 83.10% June 30, 2022 0.0677% 5,361,862 157,228 5,519,090 5,157,815 107.00% 76.67% June 30, 2021 0.0693% 2,959,420 90,354 3,049,774 5,043,405 60.47% 87.00% June 30, 2020 0.0673% 4,034,943 124,288 4,159,231 4,848,886 85.78% 79.06% June 30, 2019 0.0648% 3,582,647 111,328 3,693,975 4,605,472 80.21% 80.23% June 30, 2018 0.0649% 3,600,387 118,224 3,718,611 4,376,690 84.96% 79.53% June 30, 2017 0.0644% 4,111,253 51,661 4,162,914 4,146,010 100.41% 75.90% June 30, 2016 0.0694% 5,634,936 73,588 5,708,524 4,334,384 131.70% 68.90% June 30, 2015 0.0714% 3,700,319 3,700,319 4,241,304 87.24% 78.20% The Commission implemented GASB Statement No. 68 for fiscal year ended December 31, 2015. Information for prior years is not available See Accompanying Notes to the Required Supplementary Information 37 HUTCHINSON UTILITIES COMMISSION SCHEDULE OF EMPLOYER CONTRIBUTIONS DECEMBER 31, 2023 Contributions in Relation Contributions Statutorily to the Statutorily Contribution as a Percentage Required Required Deficiency Covered of Covered Fiscal Year Contribution Contribution (Excess) Payroll Payroll Ending (a) (b) (a-b) (d) (b/d) Pensions GERP 12/31/2023 $ 405,709 $ 405,709 $ $ 5,409,453 7.50% 12/31/2022 388,459 388,459 5,179,453 7.50% 12/31/2021 376,462 376,462 5,019,493 7.50% 12/31/2020 367,734 367,734 4,903,120 7.50% 12/31 /2019 351,656 351,656 4,688,747 7.50% 12/31/2018 337,735 337,735 4,503,133 7.50% 12/31/2017 314,977 314,977 4,201,039 7.50% 12/31/2016 310,915 310,915 4,145,538 7.50% 12/31/2015 327,065 327,065 4,360,868 7.50% The Commission implemented GASB Statement No. 68 for fiscal year ended December 31, 2015. Information for prior years is not available. See Accompanying Notes to the Required Supplementary Information 38 HUTCHINSON UTILITIES COMMISSION SCHEDULE OF CHANGES IN THE COMMISSION'S TOTAL OPEB LIABILITY DECEMBER 31, 2023 Service Cost Interest Differences Between Expected and Actual Experience Changes in Assumptions or Other Inputs Benefit Payments Net Change in Total OPEB Liability Total OPEB Liability - Beginning of Year Total OPEB Liability - End of Year Covered Employee Payroll Total OPEB Liability as a % of Covered Employee Payroll Measurement Date 12/31 /2022 12/31 /2021 12/31 /2020 12/31 /2019 12/31 /2018 12/31 /2017 $ 4,242 $ 8,537 $ 7,345 $ 5,994 $ 6,199 $ 5,475 1,877 2,627 3,222 3,982 3,391 3,379 (25,876) (10,484) (12,909) (2,021) 7,429 11,924 (3,843) 4,199 (11,056) (5,509) (4,519) (1,347) (17,846) (22,242) 13,477 10,069 5,747 13,053 103,307 125,549 112,072 102,003 96,256 83,203 $ 85,461 $ 103,307 $ 125,549 $ 112,072 $ 102,003 $ 96,256 $ 5,204,044 $ 4,841,990 $ 4,896,460 $ 4,733,716 $ 4,488,568 $ 4,206,868 1.64% 2.13% 2.56% 2.37% 2.27% 2.29% The Commission implemented GASB Statement No. 75 for fiscal year ended December 31, 2018. Information for prior years is not available. See Accompanying Notes to the Required Supplementary Information 39 This page intentionally left blank HUTCHINSON UTILITIES COMMISSION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 NOTE 1. CHANGES IN PLAN PROVISIONS A. GENERAL EMPLOYEE RETIREMENT PLAN (GE 2023 Changes: An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1, 2023. The vesting period of those hired after June 30, 2010, was changed from five years of allowable service to three years of allowable service. The benefit increase delay for early retirements on or after January 1, 2024, was eliminated. A one-time, non -compounding benefit increase of 2.5 percent minus the actual 2024 adjustment will be payable in a lump sum for calendar year 2024 by March 31, 2024. 2022 Changes: There have been no changes since the prior valuation. 2021 Changes: There have been no changes since the prior valuation. 2020 Changes: Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020. 2019 Changes: The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The State's special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. 2018 Changes: The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply. Contribution stabilizer provisions were repealed. 40 HUTCHINSON UTILITIES COMMISSION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 NOTE 1. CHANGES IN PLAN PROVISIONS (Cont'd) A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd) 2018 Changes: (Cont'd) Postretirement benefit increases were changed from 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 percent, beginning January 1, 2019. For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors. Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. 2017 Changes: The State's contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and $6,000,000 thereafter. The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The state's contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031. 2016 Changes: There have been no changes since the prior valuation. 2015 Changes: On January 1, 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions were revised; the State's contribution of $6.0 million, which meets the special funding situation definition, was due September 2015. B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST 2023 Changes: There have been no changes since the prior valuation. 2022 Changes: Retiree premiums were update to current levels. 2021 Changes: There have been no changes since the prior valuation. 41 HUTCHINSON UTILITIES COMMISSION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 NOTE 1. CHANGES IN PLAN PROVISIONS (Cont'd) B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST (Cont'd) 2020 Changes: Retiree premiums were update to current levels. 2019 Changes: There have been no changes since the prior valuation. 2018 Changes: There have been no changes since the prior valuation. NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS A. GENERAL EMPLOYEE RETIREMENT PLAN (GE 2023 Changes: The investment return assumption and single discount rate were changed from 6.5 percent to 7.00 percent. 2022 Changes: The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. 2021 Changes: The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2020 Changes: The price inflation assumption was decreased from 2.50% to 2.25%. The payroll growth assumption was decreased from 3.25% to 3.00%. Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25% less than previous rates. Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years 2-5 and slightly higher thereafter. 42 HUTCHINSON UTILITIES COMMISSION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd) A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd) 2020 Changes: (Cont'd) Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with adjustments. The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. The assumed spouse age difference was changed from two years older for females to one year older. The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly. 2019 Changes: The mortality projection scale was changed from MP-2017 to MP-2018. 2018 Changes: The mortality projection was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year. 2017 Changes: The combined service annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non -vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non -vested deferred member liability. The assumed post -retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 43 HUTCHINSON UTILITIES COMMISSION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd) A. GENERAL EMPLOYEE RETIREMENT PLAN (GERP) (Cont'd) 2016 Changes: The assumed post -retirement benefit increase rate was changed for 1.0 percent per year through 2035 and 2.5 percent per year thereafter to 1.0 percent per year for all years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2015 Changes: The assumed post -retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter. B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST 2023 Changes: The discount rate was changed from 1.84% to 4.05% based on the updated 20-year municipal bond rates. 2022 Changes: The discount rate was changed from 2.00% to 1.84% based on the updated 20-year municipal bond rates. Healthcare trend rates were reset to reflect updated cost increase expectations. Medical per capita claims costs were update to reflect recent experience. Withdrawal, mortality, and salary increase rates were updated from the rates used in the 7/1/2019 PERA General Employees Plan valuation to the rates used in the 7/1/2021 valuation. The inflation assumption was changed from 2.50% to 2.25% based on an updated historical analysis of inflation rates and forward -looking market expectations. 2021 Changes: The discount rate was changed from 2.75% to 2.00% based on the updated 20-year municipal bond rates. 44 HUTCHINSON UTILITIES COMMISSION NOTES TO REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 NOTE 2. CHANGES IN ACTUARIAL ASSUMPTIONS (Cont'd) B. OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN NOT ADMINISTERED IN A TRUST (Cont'd) 2020 Changes: The discount rate was changed from 3.71 % to 2.75% based on the updated 20-year municipal bond rates. Healthcare trend rates were reset to reflect updated cost increase expectations. Medical per capita claims costs were update to reflect recent experience. Mortality and salary increase rates were update from the rates used in the 7/1/2017 PERA General Employees Plan valuation to the rates used in the 7/1/2019 valuation. The inflation assumption was changed from 2.75% to 2.50% based on an updated historical analysis of inflation rates and forward -looking market expectations. 2019 Changes: The index rate for 20 year, tax-exempt municipal bonds used in the determination of the discount rate was changed from 3.31 % to 3.71 %. Healthcare trend rates were reset to reflect updated cost increase expectations, including an adjustment to reflect the impact of the Affordable Care Act's Excise Tax on high -cost health insurance plans. 2018 Changes: There have been no changes since the prior valuation. 45 SUPPLEMENTARY INFORMATION This page intentionally left blank HUTCHINSON UTILITIES COMMISSION COMBINING STATEMENT OF NET POSITION DECEMBER 31, 2023 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Assets Current Assets Cash and Investments Receivables Accounts Receivable (Net of Allowance for Doubtful Accounts of $59,580 and $57,244, Respectively) Interest Receivable Sales Tax Receivable Inventory Prepaid Items Total Current Assets Noncurrent Assets Restricted Assets Cash and Investments Capital and Right to Use Assets Natural Electric Gas Division Division Total $ 10,974,683 $ 13,550,243 $ 24,524,926 1,850,267 1,420,951 3,271,218 70,706 70,706 141,412 318,168 318,168 1,945,789 554,355 2,500,144 182,943 45,880 228,823 15,342,556 15,642,135 30,984,691 1,183,656 2,072,000 3,255,656 Assets Not Being Depreciated or Amortized 1,631,459 4,737,730 6,369,189 Other Capital and Right to Use Assets, Net of Depreciation and Amortization 43,486,321 22,081,243 65,567,564 Net Capital Assets 45,117,780 26,818,973 71,936,753 Total Noncurrent Assets 46,301,436 28,890,973 75,192,409 Total Assets 61,643,992 44,533,108 106,177,100 Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Current Liabilities Accounts Payable Customer Deposits Accrued Expenses Interest Salaries Payable Total Current Liabilities Long -Term Liabilities Net Pension Liability Total OPEB Liability Other Long -Term Liabilities Due Within One Year Other Long -Term Liabilities Due in More Than One Year Total Long -Term Liabilities Total Liabilities Deferred Inflows of Resources Net Position Net Investment in Capital Assets Unrestricted Total Net Position Total Liabilities, Deferred Inflows of Resources and Net Position 741,556 247,185 988,741 $ 62,385,548 $ 44,780,293 $ 107,165,841 $ 1,535,016 $ 1,106,093 $ 2,641,109 204,166 109,935 314,101 35,305 23,233 58,538 254,000 86,772 340,772 2,028,487 1,326,033 3,354,520 2,776,372 925,458 3,701,830 64,096 21,365 85,461 819,814 2,090,181 2,909,995 14,373,098 4,629,948 19,003,046 18,033,380 7,666,952 25,700,332 20,061,867 8,992,985 29,054,852 998,815 332,938 1,331,753 31,757,267 22,394,615 54,151,882 9,567,599 13,059,755 22,627,354 41,324,866 35,454,370 76,779,236 $ 62,385,548 $ 44,780,293 $ 107,165,841 M HUTCHINSON UTILITIES COMMISSION COMBINING SCHEDULE OF REVENUES AND EXPENSES YEAR ENDED DECEMBER 31, 2023 OPERATING REVENUES Electric Energy Sales Natural Gas Sales Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Production Operations Maintenance Purchased Power/Gas Other Power Supply Transmission Operations Maintenance Distribution Operations Maintenance Customer Accounts Expense Sales Expense Administrative and General Depreciation and Amortization Expense Contribution to City of Hutchinson Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Merchandise and Contract Work, Net Miscellaneous Income Bond Premium Interest Expense Total Nonoperating Revenues (Expenses) Change in Net Position NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR Electric Natural Gas Division Division Total $ 28,055,608 $ $ 28,055,608 11,976,909 11,976,909 146,849 1,821,348 1,968,197 28,202,457 13,798,257 42,000,714 4,318,980 4,318,980 828,414 828,414 12,053,183 7,635,147 19,688,330 296,850 296,850 3,223,449 185,702 3,409,151 30,487 16,942 47,429 1,166,114 959,924 2,126,038 759,978 283,237 1,043,215 286,500 216,110 502,610 120,809 87,865 208,674 1,590,746 978,025 2,568,771 3,354,505 1,097,315 4,451,820 1,319,414 585,122 1,904,536 29,349,429 12,045,389 41,394,818 (1,146,972) 1,752,868 605,896 677,583 677,152 1,354,735 (21,797) 29,060 7,263 208,842 36,134 244,976 33,457 185,608 219,065 (460,699) (334,742) (795,441) 437,386 593,212 1,030,598 (709,586) 2,346,080 1,636,494 42,034,452 33,108,290 75,142,742 $ 41,324,866 $ 35,454,370 $ 76,779,236 47 HUTCHINSON UTILITIES COMMISSION SCHEDULE OF DIVISIONS CASH FLOWS YEAR ENDED DECEMBER 31, 2023 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Customers Payments Received from Other Sources Payments to Suppliers Payments to Employees Net Cash Provided (Used) by Operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Other Noncapital Income (Expense) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Additions to Utility Plant Principal Payments on Long -Term Liabilities Interest Paid on Long -Term Liabilities Net Cash Provided (Used) by Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Interest Income Net Increase (Decrease) in Cash and Cash Equivalents CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF CASH AND CASH EQUIVALENTS Current Assets - Cash and Investments Restricted Assets - Cash and Investments Total Cash and Cash Equivalents See Accompanying Notes to the Financial Statements 48 Electric Natural Gas Division Division Total $ 28,671,898 $ 12,424,810 $ 41,096,708 52,898 1,821,348 1,874,246 (22,772,386) (10,051,060) (32,823,446) (3,556,156) (1,399,279) (4,955,435) 2,396,254 2,795,819 5,192,073 187,045 65,194 252,239 (1,546,973) (1,135,108) (2,682,081) (769,582) (1,825,000) (2,594,582) (463,132) (339,305) (802,437) (2,779,687) (3,299,413) (6,079,100) 666,019 665,588 1,331,607 469,631 227,188 696,819 � `[:%�:� rL��:� 6' ic�l:�d:i.�►�L�I:ic�L:k? $ 12,158,339 $ 15,622,243 $ 27,780,582 $ 10,974,683 $ 13,550,243 $ 24,524,926 1,183,656 2,072,000 3,255,656 S 12.158.339 S 15.622.243 S 27.780.582 HUTCHINSON UTILITIES COMMISSION SCHEDULE OF DIVISIONS CASH FLOWS YEAR ENDED DECEMBER 31, 2023 RECONCILIATION OF OPERATING INCOME (LOSS) TO CASH FLOWS FROM OPERATING ACTIVITIES Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Depreciation and Amortization Pension Related Adjustments OPEB Related Adjustments (Increase) Decrease in Assets Accounts Receivable Sales Tax Receivable Inventory Prepaid Items Increase (Decrease) in Liabilities Accounts Payable Customer Deposits Salaries Payable Compensated Absences Net Cash Provided (Used) by Operating Activities Electric Natural Gas Division Division Total $ (1,146,972) $ 1,752,868 $ 605,896 3,354,505 1,097,315 4,451,820 130,848 43,617 174,465 (9,154) (3,052) (12,206) 624,528 452,337 1,076,865 (93,951) (93,951) (243,874) (43,298) (287,172) 3,610 (43,957) (40,347) (259,744) (478,054) (737,798) (8,238) (4,436) (12,674) 20,937 14,610 35,547 23,759 7,869 31,628 $ 2,396,254 $ 2,795,819 $ 5,192,073 49 HUTCHINSON UTILITIES COMMISSION STATEMENT OF NET POSITION ELECTRIC DIVISION DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2022 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Assets Current Assets Cash and Investments Receivables Accounts Receivable (Net of Allowance for Doubtful Accounts of $59,580 and $29,517, Respectively) Interest Receivable Sales Tax Receivable Inventory Prepaid Items Total Current Assets Noncurrent Assets Restricted Assets Cash and Investments Capital and Right to Use Assets 2023 2022 $ 10,974,683 $ 10,367,801 1,850,267 2,474,795 70,706 59,142 318,168 224,217 1,945,789 1,701,915 182,943 186,553 15, 342, 556 15, 014, 423 1,183,656 1,320,907 Assets Not Being Depreciated or Amortized 1,631,459 1,406,896 Other Capital and Right to Use Assets, Net of Depreciation and Amortization 43,486,321 45,518,416 Net Capital Assets 45,117,780 46,925,312 Total Noncurrent Assets 46,301,436 48,246,219 Total Assets 61,643,992 63,260,642 Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Current Liabilities Accounts Payable Customer Deposits Accrued Expenses Interest Salaries Payable Total Current Liabilities Long -Term Liabilities Net Pension Liability Total OPEB Liability Other Long -Term Liabilities Due Within One Year Other Long -Term Liabilities Due in More Than One Year Total Long -Term Liabilities Total Liabilities Deferred Inflows of Resources Net Position Net Investment in Capital Assets Unrestricted Total Net Position Total Liabilities, Deferred Inflows of Resources and Net Position 50 741.556 1.221.397 $ 62,385,548 $ 64,482,039 $ 1,535,016 $ 1,794,760 204,166 212,404 35,305 37,738 254,000 233,063 2,028,487 2,277,965 2,776,372 4,021,396 64,096 77,480 819,814 808,753 14,373,098 15,163,439 18,033,380 20,071,068 20, 061, 867 22, 349, 033 998,815 98,554 31,757,267 32,899,011 9,567,599 9,135,441 41, 324, 866 42, 034,452 $ 62,385,548 $ 64,482,039 HUTCHINSON UTILITIES COMMISSION DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BUDGET AND ACTUAL - ELECTRIC DIVISION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 OPERATING REVENUES Utility Revenues Residential General Service Industrial Street Lighting Resale Total Utility Revenues Other Operating Revenues Penalties/Fees Security Lights Total Other Operating Revenues Total Operating Revenues OPERATING EXPENSES Production Operations Supervision and Engineering Other Employee Benefits Fuels Station Gas for Generation Transportation Waste Disposal Total Operations Maintenance Structures Generating Units Other Equipment Total Maintenance Total Production Power Costs Purchased Power 2023 9n99 Over (Under) Budget Actual Budget Actual $ 6,184,276 $ 5,914,078 $ (270,198) $ 6,129,443 9,894,561 8,815,434 (1,079,127) 9,615,989 9,532,333 8,065,784 (1,466,549) 8,990,927 139,484 139,778 294 138,294 4,230,000 5,120,534 890,534 5,446,484 29,980,654 28,055,608 (1,925,046) 30,321,137 134,400 137,699 3,299 132,161 11,000 9,150 (1,850) 10,515 145,400 146,849 1,449 142,676 30,126,054 28,202,457 (1,923,597) 30,463,813 1,124,161 1,197,149 72,988 1,217,782 777,201 928,665 151,464 1,037,795 265 206,500 286,307 79,807 196,882 1,620,606 1,148,611 (471,995) 2,500,832 719,517 719,517 716,683 26,000 38,731 12,731 32,212 4,473,985 4,318,980 (155,005) 5,702,451 36,000 21,609 (14,391) 90,602 564,150 513,122 (51,028) 585,135 305,000 293,683 (11,317) 343,222 905,150 828,414 (76,736) 1,018,959 5,379,135 5,147,394 (231,741) 6,721,410 12,862,000 12,053,183 (808,817) 13,164,998 51 HUTCHINSON UTILITIES COMMISSION DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BUDGET AND ACTUAL - ELECTRIC DIVISION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 OPERATING EXPENSES (Cont'd) Other Power Supply Supervision and General Salaries Training Professional Services Total Other Power Supply Transmission Operations Transmission Station Total Operations Maintenance Plant and Equipment Total Transmission Distribution Operations Supervision and Engineering Other Employee Benefits Line Meter Other Total Operations Maintenance Station Equipment Underground Lines Lines Transformers Street Lighting Other Equipment Total Maintenance Total Distribution Customer Accounts Expense Meter Reading Collection Other Employee Benefits Uncollectible Accounts Customer Services Meetings and Training Total Customer Accounts Expense 2023 9n99 Over (Under) Budget Actual Budget Actual $ 242,027 $ 260,250 $ 18,223 $ 263,046 4,000 (4,000) 36,600 36,600 36,600 282,627 296,850 14,223 299,646 3,325,000 3,009,524 (315,476) 2,882,993 190,000 213,925 23,925 203,256 3,515,000 3,223,449 (291,551) 3,086,249 32,381 30,487 (1,894) 94,083 3,547,381 3,253,936 (293,445) 3,180,332 609,748 420,696 (189,052) 400,022 424,780 424,754 (26) 399,230 126,704 148,016 21,312 133,950 59,798 16,896 (42,902) 25,141 150,000 155,752 5,752 167,746 1,371,030 1,166,114 (204,916) 1,126,089 43,374 20,192 (23,182) 81,285 235,178 362,088 126,910 365,168 37,098 26,728 (10,370) 66,605 88,008 292,607 204,599 253,406 43,809 58,363 14,554 62,373 447,467 759,978 312,511 828,837 1,818,497 1,926,092 107,595 1,954,926 16,723 4,126 (12,597) 4,705 188,892 169,737 (19,155) 171,213 12,000 12,309 309 15,054 4,000 33,848 29,848 (1,472) 74,147 61,457 (12,690) 63,138 1,100 5,023 3,923 465 296,862 286,500 (10,362) 253,103 52 HUTCHINSON UTILITIES COMMISSION DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BUDGET AND ACTUAL - ELECTRIC DIVISION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 OPERATING EXPENSES (Cont'd) Sales Expense Salaries Conservation Total Sales Expense Administrative and General Supervision and General Salaries Office Supplies Outside Services Employed Property Insurance Medical Insurance Other Employee Benefits Regulatory Commissioners Salaries Travel Miscellaneous Maintenance of General Plant Total Administrative and General Depreciation and Amortization Expense Contribution to City of Hutchinson Payment in Lieu of Taxes Total Operating Expenses Operating Income (Loss) NONOPERATING REVENUES (EXPENSES) Interest Income Merchandise and Contract Work, Net Miscellaneous Income Gain (Loss) on Disposal of Assets Bond Premium Interest Expense Total Nonoperating Revenues (Expenses) Change in Net Position NET POSITION, BEGINNING OF YEAR NET POSITION, END OF YEAR 2023 gngq Over (Under) Budget Actual Budget Actual $ 52,229 $ 44,109 $ (8,120) $ 43,566 255,500 76,700 (178,800) 94,107 307,729 120,809 (186,920) 137,673 547,969 556,002 8,033 527,645 279,727 271,655 (8,072) 291,531 70,014 104,239 34,225 99,983 277,156 311,022 33,866 391,607 102,211 81,931 (20,280) 63,254 108,100 122,588 14,488 98,617 1,000 1,350 350 5,784 15,836 15,836 15,848 5,000 6,899 1,899 3,600 77,717 69,469 (8,248) 71,448 46,755 49,755 3,000 72,782 1,531,485 1,590,746 59,261 1,642,099 3,300,000 3,354,505 54,505 3,468,796 1,319,414 1,319,414 1,293,543 30,645,130 29,349,429 (1,295,701) 32,116,526 (519,076) (1,146,972) (627,896) (1,652,713) 250,000 677,583 427,583 (439,382) (61,000) (21,797) 39,203 (17,798) 41,648 208,842 167,194 64,639 (3,693) 33,457 33,457 33,457 (453,356) (460,699) (7,343) (479,767) (189,251) 437,386 626,637 (842,544) $ (708,327) (709,586) $ (1,259) (2,495,257) 42,034,452 44,529,709 S 41.324.866 S 42.034.452 53 HUTCHINSON UTILITIES COMMISSION STATEMENT OF NET POSITION NATURAL GAS DIVISION DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS AS OF DECEMBER 31, 2022 2023 2022 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Assets Current Assets Cash and Investments $ 13,550,243 $ 13,026,482 Receivables Accounts Receivable (Net of Allowance for Doubtful Accounts of $57,244 and $48,160, Respectively) 1,420,951 1,873,288 Interest Receivable 70,706 59,142 Inventory 554,355 511,057 Prepaid Items 45,880 1,923 Total Current Assets 15,642,135 15,471,892 Noncurrent Assets Restricted Assets Cash and Investments 2,072,000 2,368,573 Capital and Right to Use Assets Assets Not Being Depreciated or Amortized 4,737,730 4,172,829 Other Capital and Right to Use Assets, Net of Depreciation and Amortization 22,081,243 22,608,351 Net Capital Assets 26,818,973 26,781,180 Total Noncurrent Assets 28,890,973 29,149,753 Total Assets 44,533,108 44,621,645 Deferred Outflows of Resources 247,185 407,133 Total Assets and Deferred Outflows of Resources $ 44,780,293 $ 45,028,778 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION Liabilities Current Liabilities Accounts Payable $ 1,106,093 $ 1,584,147 Customer Deposits 109,935 114,371 Accrued Expenses Interest 23,233 27,796 Salaries Payable 86,772 72,162 Total Current Liabilities 1,326,033 1,798,476 Long -Term Liabilities Net Pension Liability 925,458 1,340,466 Total OPEB Liability 21,365 25,827 Other Long -Term Liabilities Due Within One Year 2,090,181 2,019,888 Other Long -Term Liabilities Due in More Than One Year 4,629,948 6,702,980 Total Long -Term Liabilities 7,666,952 10,089,161 Total Liabilities 8,992,985 11,887,637 Deferred Inflows of Resources 332,938 32,851 Net Position Net Investment in Capital Assets 22,394,615 20,642,787 Unrestricted 13,059,755 12,465,503 Total Net Position 35,454,370 33,108,290 Total Liabilities, Deferred Inflows of Resources and Net Position $ 44,780,293 $ 45,028,778 54 HUTCHINSON UTILITIES COMMISSION DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BUDGET AND ACTUAL - NATURAL GAS DIVISION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 2023 2022 Over(Under) Budget Actual Budget Actual OPERATING REVENUES Utility Revenues Residential $ 4,221,049 $ 3,949,946 $ (271,103) $ 4,474,818 Commercial 3,126,186 2,888,770 (237,416) 3,275,405 Industrial 5,832,620 5,138,193 (694,427) 5,769,905 Total Utility Revenues 13,179,855 11,976,909 (1,202,946) 13,520,128 Other Operating Revenues Gas Transportation Contract - New Ulm 1,354,349 1,049,016 (305,333) 1,093,578 Transportation - Electric Division 719,517 719,517 716,683 Penalties/Fees 56,000 52,815 (3,185) 51,208 Total Other Operating Revenues 2,129,866 1,821,348 (308,518) 1,861,469 Total Operating Revenues 15,309,721 13,798,257 (1,511,464) 15,381,597 OPERATING EXPENSES Purchased Natural Gas 8,704,760 7,635,147 (1,069,613) 9,356,872 Transmission Operations Supervision and Engineering 133,431 100,120 (33,311) 92,965 Other 238,500 85,582 (152,918) 112,942 Total Operations 371,931 185,702 (186,229) 205,907 Maintenance Supervision and Engineering 8,545 1,915 (6,630) 6,077 Other 47,500 15,027 (32,473) 13,577 Total Maintenance 56,045 16,942 (39,103) 19,654 Total Transmission 427,976 202,644 (225,332) 225,561 Distribution Operations Supervision and Engineering 304,852 260,811 (44,041) 214,499 Other Employee Benefits 495,395 469,285 (26,110) 442,152 Mains and Services 282,553 155,725 (126,828) 166,642 Meters 21,023 21,486 463 18,752 Other 71,700 52,617 (19,083) 58,869 Total Operations 1,175,523 959,924 (215,599) 900,914 Maintenance Mains and Services 207,309 211,864 4,555 155,849 Meters 29,657 19,619 (10,038) 2,794 Other Equipment 66,500 51,754 (14,746) 70,518 Total Maintenance 303,466 283,237 (20,229) 229,161 Total Distribution 1,478,989 1,243,161 (235,828) 1,130,075 55 HUTCHINSON UTILITIES COMMISSION DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BUDGET AND ACTUAL - NATURAL GAS DIVISION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 OPERATING EXPENSES (Cont'd) Customer Accounts Expense Meter Reading Collection Other Employee Benefits Uncollectible Accounts Customer Services Meetings and Training Total Customer Accounts Expense Sales Expense Salaries Conservation Total Sales Expense Administrative and General Supervision and General Salaries Office Supplies Outside Services Employed Property Insurance Medical Insurance Other Employee Benefits Regulatory Commissioners Salaries Travel Miscellaneous Maintenance of General Plant Total Administrative and General Depreciation and Amortization Expense Contribution to City of Hutchinson Payment in Lieu of Taxes Total Operating Expenses Operating Income (Loss) 2023 2022 Over(Under) Budget Actual Budget Actual $ 23,500 $ 2,686 $ (20,814) $ 4,788 141,185 138,076 (3,109) 139,739 11,000 10,714 (286) 12,833 1,000 10,183 9,183 13,214 60,666 50,283 (10,383) 51,658 900 4,168 3,268 20 238,251 216,110 (22,141) 222,252 52,229 44,108 (8,121) 43,565 136,183 43,757 (92,426) 51,659 188,412 87,865 (100,547) 95,224 410,142 450,824 40,682 425,318 102,776 100,747 (2,029) 103,551 32,005 54,948 22,943 43,204 57,154 69,684 12,530 60,065 81,035 62,902 (18,133) 60,599 65,500 89,368 23,868 80,989 85,000 46,742 (38,258) 43,909 10,558 10,558 10,566 4,000 4,638 638 2,525 50,000 44,675 (5,325) 46,736 35,428 42,939 7,511 54,584 933,598 978,025 44,427 932,046 1,100,000 1,097,315 (2,685) 1,092,249 585,122 585,122 573,649 13,657,108 12,045,389 (1,611,719) 13,627,928 1,652,613 1,752,868 100,255 1,753,669 56 HUTCHINSON UTILITIES COMMISSION DETAILED SCHEDULE OF REVENUES, EXPENSES AND CHANGES IN NET POSITION BUDGET AND ACTUAL - NATURAL GAS DIVISION YEAR ENDED DECEMBER 31, 2023 WITH PARTIAL COMPARATIVE AMOUNTS FOR THE YEAR ENDED DECEMBER 31, 2022 2023 2022 Over(Under) Budget Actual Budget Actual NONOPERATING REVENUES (EXPENSES) Interest Income $ 250,000 $ 677,152 $ 427,152 $ (439,453) Merchandise and Contract Work, Net 500 29,060 28,560 36,237 Miscellaneous Income 22,426 36,134 13,708 31,442 Bond Premium 185,608 185,608 185,608 Interest Expense (334,150) (334,742) (592) (413,890) Total Nonoperating Revenues (Expenses) 124,384 593,212 468,828 (600,056) Change in Net Position $ 1,776,997 2,346,080 $ 569,083 1,153,613 NET POSITION, BEGINNING OF YEAR 33,108,290 31,954,677 NET POSITION, END OF YEAR $ 35,454,370 $ 33,108,290 57 COMPLIANCE SECTION This page intentionally left blank INDEPENDENT AUDITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE Members of the Hutchinson Utilities Commission Hutchinson, Minnesota We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated March 27, 2024. In connection with our audit, nothing came to our attention that caused us to believe that the Commission failed to comply with the provisions of the contracting -bid laws, depositories of public funds and public investments, conflicts of interest, public indebtedness, claims and disbursements, and miscellaneous provisions sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minn. Stat. § 6.65, insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the Commission's noncompliance with the above referenced provisions, insofar as they relate to account matters. The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing, and not to provide an opinion c�on� compliance. Accordingly, this communication is not suitable for any other purpose. C(inavtj, DAY' c rrrri /% 7_✓/, Zp CONWAY, DEUTH & SCHMIESING, PLLP CPAS & ADVISORS LITCHFIELD, MINNESOTA March 27, 2024 58 Ste 110 Sart�ett, MN w, 377 :1M 8621337 Members: American institute of Certified Public Accountants, Minnesota Society of Certified Public Accountants This page intentionally left blank INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Members of the Hutchinson Utilities Commission Hutchinson, Minnesota We have audited in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Hutchinson Utilities Commission, a fund of the City of Hutchinson, Minnesota, as of and for the year ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements, and have issued our report thereon dated March 27, 2024. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Commission's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission's internal control. Accordingly, we do not express an opinion on the effectiveness of the Commission's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses or significant deficiencies. However, material weaknesses or significant deficiencies may exist that have not been identified. 59 Morris Office 401 Atlantic Ave Morris, MAN 56267' (320) 589-2602 www.citscpa,corn Litchfield Office 820 Siibley Ave N Litchfield, MN 55355 (320) 693-7 '75 Sartelt Office Ste M Members: Arnerican Insfitute of Certified Public Accountants, Minnesota Sodety of Certified Public Accountants Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Commission's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the Commission's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. CONWAY, DEUTH & SCHMIESING, PLLP CPAS & ADVISORS LITCHFIELD, MINNESOTA March 27, 2024 .( HUTCHINSON UTILITIES COMMISSION Finding Reference SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS DECEMBER 31, 2023 Year Finding If Not Corrected, Provide Planned Finding Title Status Initially Occurred Corrective Action or Other Explanation Financial Statement Findings: None Minnesota Legal Compliance Findings: None 61 HUTCHINSON UTILITIES COMMISSION COMBINED DIVISIONS FINANCIAL REPORT FOR FEBRUARY, 2024 2024 2023 pi . Combined Division Customer Revenue $ 3,150,719 $ 3,371,984 $ (221,264) Sales for Resale $ 279,644 $ 360,365 $ (80,721) NG Transportation $ 185,264 $ 86,670 $ 98,594 Electric Division Transfer $ 60,383 $ 59,960 $ 424 Other Revenues $ 41,839 $ 55,103 $ (13,264) Interest Income $ 105,318 $ 79,145 $ 26,173 TOTAL REVENUES $ 3,823,167 $ 4,013,226 $ (190,059) Salaries & Benefits $ 618,843 $ 555,121 $ 63,722 Purchased Commodities $ 1,995,430 $ 2,008,886 $ (13,457) Transmission $ 180,731 $ 200,379 $ (19,648) Generator Fuel/Chem. $ 24,796 $ 33,738 $ (8,942) Depreciation $ 364,361 $ 376,529 $ (12,168) Transfers (Elect./City) $ 222,269 $ 218,671 $ 3,598 Operating Expense $ 177,875 $ 195,919 $ (18,044) Debt Interest $ 58,538 $ 65,534 $ (6,996) TOTAL EXPENSES $ 3,642,842 $ 3,654,777 $ (11,935) NET PROFIT/(LOSS) $ 180,325 $ 358,449 $ (178,123) %Chna 1 2024 2023 Di %Chna I Full Yr Bud %of Bud (6.6%) $ 6,818,303 $ 7,294,212 $ (475,909) (6.5%) $ 37,151,166 18.4% (22.4%) $ 710,194 $ 770,860 $ (60,665) (7.9%) $ 3,681,000 19.3% 113.8% $ 356,629 $ 175,326 $ 181,303 103.4% $ 2,108,203 16.9% 0.7% $ 120,767 $ 119,920 $ 847 0.7% $ 724,600 16.7% (24.1%) $ 77,391 $ 90,003 $ (12,612) (14.0%) $ 481,893 16.1% 33.1% $ 183,179 $ 145,148 $ 38,031 26.2% $ 783,457 23.4% (4.7%) $ 8,266,463 $ 8,595,468 $ (329,005) (3.8%) $ 44,930,319 18.4% 11.48% $ 1,315,506 $ 1,181,411 $ 134,095 11.4% $ 7,969,960 16.5% (0.7%) $ 4,321,705 $ 4,637,367 $ (315,662) (6.8%) $ 20,379,028 21.2% (9.8%) $ 364,413 $ 430,092 $ (65,679) (15.3%) $ 2,755,000 13.2% (26.5%) $ 401,131 $ 63,726 $ 337,406 529.5% $ 1,364,260 29.4% (3.2%) $ 728,722 $ 752,449 $ (23,728) (3.2%) $ 4,430,000 16.4% 1.6% $ 444,538 $ 437,342 $ 7,196 1.6% $ 2,667,226 16.7% (9.2%) $ 468,057 $ 568,671 $ (100,615) (17.7%) $ 3,268,836 14.3% (10.7%) $ 117,076 $ 131,068 $ (13,992) 10.7% $ 702,457 16.7% (0.3%) $ 8,161,148 $ 8,202,127 $ (40,979) (0.5%) $ 43,536,767 18.7% (49.7%) $ 105,315 $ 393,341 $ (288,026) (73.2%) $ 1,393,552 7.6% February February YTD YTD 2024 HUC 2024 2023 Change 2024 2023 Change Budget Target Gross Margin %: 28.3% 33.6% -5.3% 25.3% 29.3% -4.0% 33.6% 26%- 28% Operating Income Per Revenue $ (%): -0.2% 7.9% -8.0% -2.8% 3.8% -6.7% 2.3% 1%-4% Net Income Per Revenue $ (%): 4.7% 8.9% -4.2% 1.3% 4.6% -3.3% 3.1% 1%-3% HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION FINANCIAL REPORT FOR FEBRUARY, 2024 2024 2023 Di . %Chna 2024 2023 Di . %Chna Full YrBud %of Bud Electric Division Customer Revenue $ 1,743,198 $ 1,725,949 $ 17,249 1.0% $ 3,642,086 $ 3,757,525 $ (115,440) (3.1%) $ 24,902,363 14.6% Sales for Resale $ 279,644 $ 360,365 $ (80,721) (22.4%) $ 710,194 $ 770,860 $ (60,665) (7.9%) $ 3,681,000 19.3% Other Revenues $ 13,876 $ 25,185 $ (11,309) (44.9%) $ 27,454 $ 36,995 $ (9,541) (25.8%) $ 188,770 14.5% Interest Income $ 54,053 $ 40,966 $ 13,087 31.9% $ 94,378 $ 75,362 $ 19,016 25.2% $ 408,457 23.1% TOTAL REVENUES $ 2,090,771 $ 2,152,464 $ (61,694) (2.9%) $ 4,474,111 $ 4,640,742 $ (166,631) (3.6%) $ 29,180,590 15.3% Salaries & Benefits $ 459,175 $ 420,018 $ 39,157 9.3% $ 991,240 $ 895,143 $ 96,096 10.7% $ 5,777,096 17.2% Purchased Power $ 862,364 $ 917,555 $ (55,191) (6.0%) $ 1,961,758 $ 2,239,212 $ (277,454) (12.4%) $ 12,638,152 15.5% Transmission $ 180,731 $ 200,379 $ (19,648) (9.8%) $ 364,413 $ 430,092 $ (65,679) (15.3%) $ 2,755,000 13.2% Generator Fuel/Chem. $ 24,796 $ 33,738 $ (8,942) (26.5%) $ 401,131 $ 63,726 $ 337,406 529.5% $ 1,364,260 29.4% Depreciation $ 271,567 $ 285,841 $ (14,273) (5.0%) $ 543,135 $ 571,072 $ (27,938) (4.9%) $ 3,330,000 16.3% Transfers (Elect./City) $ 172,534 $ 169,911 $ 2,623 1.5% $ 345,067 $ 339,822 $ 5,245 1.5% $ 2,070,402 16.7% Operating Expense $ 132,878 $ 135,086 $ (2,208) (1.6%) $ 354,759 $ 420,866 $ (66,107) (15.7%) $ 2,111,928 16.8% Debt Interest $ 35,305 $ 37,738 $ (2,433) (6.4%) $ 70,609 $ 75,476 $ (4,867) LLILI $ 423,657 16.7% TOTAL EXPENSES $ 2,139,350 $ 2,200,266 $ (60,916) (2.8%) $ 5,032,112 $ 5,035,409 $ (3,297) (0.1%) $ 30,470,495 16.5% NET PROFIT/(LOSS) $ (48,579) $ (47,802) $ (777) 1.6% $ (558,001) $ (394,667) $ (163,334) 41.4% $ (1,289,905) 43.3% �yy�� pp yyy 16.66 of .Year Comp. % � �,. 2024 2023 Di . %Chna 2024 2023 Di . %Chna Full YrBud %of Bud Electric Division Residential 3,818,253 3,985,201 (166,948) (4.19%) 8,447,384 8,522,745 (75,361) (0.88%) 54,084,350 15.6% All Electric 240,213 305,013 (64,800) (21.24%) 580,188 651,634 (71,446) (10.96%) 2,585,300 22.4% Small General 1,363,064 1,440,690 (77,626) (5.39%) 2,958,936 3,049,472 (90,536) (2.97%) 18,348,996 16.1% Large General 5,548,320 5,659,490 (111,170) (1.96%) 11,500,240 12,135,450 (635,210) (5.23%) 83,540,973 13.8% Industrial 8,248,000 7,027,000 1,221,000 17.38% 17,248,000 15,457,000 1,791,000 11.59% 113,841,379 15.2% Total KWH Sold 19,217,850 18,417,394 800,456 4.35% 40,734,748 39,816,301 918,447 2.31% 272,400,998 15.0% February February YTD YTD 2024 HUC 2024 2023 Change 2024 2023 Change Budget Target Gross Margin %: 30.6% 29.5% 1.1% 21.3% 23.1% -1.9% 27.1% Operating Income Per Revenue $ (%): -3.3% -3.1% -0.3% -13.3% -9.0% -4.3% -4.6% Net Income Per Revenue $ (%): -2.3% -2.2% -0.1% -12.5% -8.5% -4.0% -4.4% Customer Revenue per KWH: $0.0907 $0.0937 -$0.0030 $0.0894 $0.0944 -$0.0050 $0.0914 $0.0914 Total Power Supply Exp. per KWH: $0.0735 $0.0803 -$0.0068 $0.0846 $0.0879 -$0.0033 $0.0769 Notes/Graphs: Net Loss increased by $777 over February 2023. Revenues were down due mostly to lower sales for resale with no Dynasty Power contract. Customer revenue increased despite no PCA due to an increase in Industrial usage. Expenses were down but that was partially due to a miscellaneous true up from MISO for October that was $120,000 larger than the previous year's true up. Sales for Resale of $279,644 consisted of $35,394 in market sales, $98,000 in capacity sales to Rice Lake, and $146,250 in capacity sales to AEP. February 2023 Sales for Resale of $360,365 included $48,341 in market sales, $98,000 in capacity sales to Rice Lake, $146,250 in capacity sales to AEP and $67,774 in tolling sales to Dynasty Power. February 2022 Sales for Resale of $276,231 consisted of $31,981 in market sales, $98,000 in capacity sales to Rice Lake, and $146,250 in capacity sales to AEP. Overall Purchased Power decreased by $55,191. MRES purchases increased by $45,732 partially due to an extra day and market purchases/MISO costs decreased by $100,923. The average cost of MISO power was $43.29/mwh (19,746 mwh's purchased), compared to $46.41/mwh (19,617 mwh's purchased) in February 2023. There was no Power Cost Adjustment for February 2024 and also $0 YTD. Power Cost Adjustment for February 2023 was $.00478/kwhr bringing in $88,376 for the month and $304,953 YTD. HUTCHINSON UTILITIES COMMISSION GAS DIVISION FINANCIAL REPORT FOR FEBRUARY, 2024 2024 2023 2 %Chna 2024 2023 2 %Chna Full YrBud %of Bud Gas Division Customer Revenue $ 1,407,522 $ 1,646,035 $ (238,514) (14.5%) $ 3,176,217 $ 3,536,687 $ (360,470) (10.2%) $ 12,248,803 25.9% Transportation $ 185,264 $ 86,670 $ 98,594 113.8% $ 356,629 $ 175,326 $ 181,303 103.4% $ 2,108,203 16.9% Electric Div. Transfer $ 60,383 $ 59,960 $ 424 0.7% $ 120,767 $ 119,920 $ 847 0.7% $ 724,600 16.7% Other Revenues $ 27,963 $ 29,918 $ (1,955) (6.5%) $ 49,937 $ 53,008 $ (3,071) (5.8%) $ 293,123 17.0% Interest Income $ 51,265 $ 38,178 $ 13,087 34.3% $ 88,801 $ 69,786 $ 19,015 27.2% $ 375,000 23.7% TOTAL REVENUES $ 1,732,397 $ 1,860,762 $ (128,365) (6.9%) $ 3,792,352 $ 3,954,726 $ (162,374) (4.1%) $ 15,749,729 24.1% Salaries & Benefits Purchased Gas Operating Expense Depreciation Transfers (City) Debt Interest TOTAL EXPENSES NET PROFIT/(LOSS) $ 159,668 $ 135,103 $ 24,565 18.2% $ 324,266 $ 286,268 $ 37,999 13.3% $ 2,192,864 14.8% $ 1,133,066 $ 1,091,331 $ 41,735 3.8% $ 2,359,947 $ 2,398,155 $ (38,209) (1.6%) $ 7,740,876 30.5% $ 44,996 $ 60,833 $ (15,836) (26.0%) $ 113,298 $ 147,806 $ (34,508) (23.3%) $ 1,156,908 9.8% $ 92,794 $ 90,688 $ 2,105 2.3% $ 185,587 $ 181,377 $ 4,210 2.3% $ 1,100,000 16.9% $ 49,735 $ 48,760 $ 975 2.0% $ 99,471 $ 97,520 $ 1,951 2.0% $ 596,824 16.7% $ 23,233 $ 27,796 $ (4,563) 0.0% $ 46,467 $ 55,592 $ (9,125) 16.4% $ 278,800 16.7% $ 1,503,492 $ 1,454,511 $ 48,981 3.4% $ 3,129,035 $ 3,166,718 $ (37,683) (1.2%) $ 13,066,272 23.9% $ 228,905 $ 406,251 $ (177,346) (43.7%) $ 663,317 $ 788,008 $ (124,692) (15.8%) $ 2,683,457 24.7% 2024 2023 2 %Chnq I 2024 2023 2 %Chnq I Full YrBud %of Bud Gas Division Residential 52,030,771 67,490,691 (15,459,920) (22.91%) 129,210,430 143,911,171 (14,700,741) (10.22%) 450,091,000 28.7% Commercial 36,008,917 48,392,328 (12,383,411) (25.59%) 89,607,635 102,600,912 (12,993,277) (12.66%) 350,477,000 25.6% Industrial 76,355,329 81,711,674 (5,356,345) (6.56%) 172,621,593 186,245,728 (13,624,135) (7.32%) 908,618,000 19.0% Total CF Sold 164,395,017 197,594,693 (33,199,676) (16.80%) 391,439,658 432,757,811 (41,318,153) (9.55%) 1,709,186,000 22.9% February February YTD YTD 2024 HUC 2024 2023 Change 2024 2023 Change Budget Target Gross Margin %: 25.2% 38.5% -13.2% 30.5% 36.7% -6.2% 46.0% 37%-40% Operating Income Per Revenue $ (%): 4.0% 20.6% -16.7% 10.5% 19.0% -8.5% 15.5% IIIIIIIIIIIIIIIIIIIIII Net Income Per Revenue $ (%): 13.2% 21.8% -8.6% 17.5% 19.9% -2.4% 17.0% IIIIIIIIIIIIIIIIIIIIII Contracted Customer Rev. per CF: $0.0080 $0.0078 $0.0003 $0.0082 $0.0075 $0.0007 $0.0060 IIIIIIIIIIIIIIIIIIIIII Customer Revenue per CF: $0.0090 $0.0087 $0.0003 $0.0080 $0.0086 -$0.0006 $0.0083 $0.0083 Total Power Supply Exp. per CF: $0.0070 $0.0056 $0.0014 $0.0061 $0.0056 $0.0005 $0.0048 $0.0048 Notes/Graphs: February Net Income decreased by $177,346 due mostly to decreased customer revenue as well as higher gas purchases. Transportation revenue will increase in 2024 as a new N.G. transport customer started this year. ere was no FCA for February 2024 with $150,146 YTD credits. ere was no FCA for February 2023 as well as $0 YTD. Current Assets UnrestrictedlUndesignated Cash Cash Petty Cash Designated Cash Capital Expenditures - Five Yr. CIP Payment in Lieu of Taxes Rate Stabilization - Electric Rate Stabilization - Gas Catastrophic Funds Restricted Cash Bond Interest Payment 2017 Bond Interest Payment 2012 Debt Service Reserve Funds Total Current Assets Receivables Accounts (net of uncollectible allowances) Interest Total Receivables Other Assets Inventory Prepaid Expenses Sales Tax Receivable Deferred Outflows - Electric Deferred Outflows - Gas Total Other Assets Total Current Assets Capital Assets Land & Land Rights Depreciable Capital Assets Accumulated Depreciation Construction - Work in Progress Total Net Capital Assets HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED FEBRUARY 29, 2024 Electric Gas Total Total Net Change Division Division 2024 2023 Total (YTD) 4,637,093.53 11,457,155.99 16,094,249.52 15,795,431.86 298,817.66 680.00 170.00 850.00 850.00 - 2,750,000.00 700,000.00 3,450,000.00 3,450,000.00 - 1,345,802.00 596,824.00 1,942,626.00 1,904,536.00 38,090.00 204,746.72 - 204,746.72 395,204.99 (190,458.27) - 472,900.68 472,900.68 332,317.86 140,582.82 800,000.00 200,000.00 1,000,000.00 1,000,000.00 - 295,914.06 - 295,914.06 995,714.06 (699,800.00) - 543,450.00 543,450.00 539,637.51 3,812.49 1,183,656.00 2,072,000.00 3,255,656.00 2,711,029.66 544,626.34 11,217,892.31 16,042,500.67 27,260,392.98 27,124,721.94 135,671.04 1,949,704.81 1,566,798.64 3,516,503.45 3,930,073.94 (413,570.49) 70,706.31 70,706.32 141,412.63 118,283.99 23,128.64 2,020,411.12 1,637,504.96 3,657,916.08 4,048,357.93 (390,441.85) 1,914,648.80 559,946.24 2,474,595.04 2,233,913.28 240,681.76 423,653.96 157,973.71 581,627.67 392,343.78 189,283.89 334,474.03 - 334,474.03 241,245.35 93,228.68 1,221,397.00 - 1,221,397.00 1,221,397.00 - - 407,133.00 407,133.00 407,133.00 - 3,894,173.79 1,125,052.95 5,019,226.74 4,496,032.41 523,194.33 17,132,477.22 18,805,058.58 690,368.40 3,899,918.60 113,787,768.87 43,427,718.63 (70,844,394.34) (21,532,064.90) 1,202,374.80 916,227.91 44,836,117.73 26,711,800.24 35,937,535.80 35,669,112.28 4,590,287.00 157,215,487.50 (92, 376,459.24) 2,118,602.71 71,547,917.97 4,590,287.00 155,572,962.13 (87,978,794.52) 1,181, 970.68 73,366,425.29 268,423.52 1, 642, 525.37 (4,397,664.72) 936,632.03 (1,818,507.32) Total Assets 61,968,594.95 45,516,858.82 107,485,453.77 109,035,537.57 (1,550,083.80) HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED FEBRUARY 29, 2024 Electric Gas Total Total Net Change Division Division 2024 2023 Total (YTD) Current Liabilities Current Portion of Long-term Debt Bonds Payable 730,000.00 1,825,000.00 2,555,000.00 700,000.00 1,855,000.00 Bond Premium - 185,608.32 185,608.32 185,608.32 - Lease Liability - Solar Array 19,546.00 - 19,546.00 - 19,546.00 Accounts Payable 2,251,876.54 1,175,240.34 3,427,116.88 3,679,048.34 (251,931.46) Accrued Expenses Accrued Interest 105,914.06 69,700.01 175,614.07 196,601.58 (20,987.51) Accrued Payroll 46,465.56 16,247.97 62,713.53 186,824.84 (124,111.31) Total Current Liabilities 3,153,802.16 3,271,796.64 6,425,598.80 4,948,083.08 1,477,515.72 Long -Term Liabilities Noncurrent Portion of Long-term Debt 2017 Bonds 12,570,000.00 - 12,570,000.00 13,330,000.00 (760,000.00) 2012 Bonds - 4,130,000.00 4,130,000.00 7,780,000.00 (3,650,000.00) Bond Premium 2012 460,033.20 324,814.19 784,847.39 1,003,912.67 (219,065.28) Pension Liability- Electric 4,021,396.00 - 4,021,396.00 4,021,396.00 - Pension Liability - Electric OPEB 77,480.00 - 77,480.00 77,480.00 - Pension Liability- Nat Gas - 1,340,466.00 1,340,466.00 1,340,466.00 - Pension Liability - Nat Gas OPEB - 25,827.00 25,827.00 25,827.00 - Accrued Vacation Payable 527,144.22 191,450.10 718,594.32 700,600.34 17,993.98 Accrued Severance 121,598.92 32,321.13 153,920.05 140,285.54 13,634.51 Deferred Outflows - Electric 98,554.00 - 98,554.00 98,554.00 - Deferred Outflows - Nat Gas - 32,851.00 32,851.00 32,851.00 - Total Long -Term Liabilities 17,876,206.34 6,077,729.42 23,953,935.76 28,551,372.55 (4,597,436.79) Net Position Retained Earnings 40,938,586.45 36,167,332.76 77,105,919.21 75,536,081.94 1,569,837.27 Total Net Position 40,938,586.45 36,167,332.76 77,105,919.21 75,536,081.94 1,569,837.27 Total Liabilities and Net Position 61,968,594.95 45,516,858.82 107,485,453.77 109,035,537.57 (1,550,083.80) Hutchinson Utilities Commission Cash -Designations Report, Combined 2/29/2024 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest February 2024 January 2024 Position Savings, Checking, Investments varies varies varies 27,260,392.98 27,780,580.05 (520,187.07) Total Operating Funds 27,260,392.98 27,780,580.05 (520,187.07) Debt Reserve Requirements Bond Covenants - sinking fund Debt Reserve Requirements Bond Covenants -1 year Max. P & I Total Restricted Funds Operating Reserve Rate Stabalization Funds PILOT Funds Catastrophic Funds Capital Reserves Total Designated Funds Min 60 days of 2024 Operating Bud. Charter (Formula Only) Risk Mitigation Amount 5 Year CIP (2024-2028 Fleet & Infrastructure Maintenance) 839,364.06 559,576.04 279,788.02 3,255,656.00 3,255,656.00 - 4,095,020.06 3,815,232.04 279,788.02 6,631,467.17 6,631,467.17 677,647.40 809,453.42 (131,806.02) 1, 942, 626.00 1, 942, 626.00 1, 000, 000.00 1, 000, 000.00 3,450,000.00 3,450,000.00 13,701,740.57 13,833,546.59 (131,806.02) YE YE YE YE YTD HUC 2020 2021 2022 2023 2024 Target Debt to Asset 32.3% 30.8% 31.4% 28.6% 28.3% Current Ratio 5.67 5.22 4.47 4.48 4.72 RONA 3.62% 0.41% -1.38% 1.96% 0.11% Change in Cash Balance (From 12131114 to 212912024) Month End Electric Elec. Change Natural Gas Gas Change Total Total Change 2/29/2024 11, 217, 892 16, 042, 501 27, 260, 393 12/31/2023 12,158,338 (940,446) 15,622,242 420,259 27,780,580 (520,187) 12/31/2022 11,633,212 525,126 15,450,554 171,688 27,083,766 176,627 12/31/2021 12,870,253 (1,237,041) 15,086,000 364,554 27,956,253 (872,487) 12/31/2020 14,239,233 (1,368,981) 15,019,173 66,827 29,258,406 (1,302,153) 12/31/2019 12,124,142 2,115,092 13,837,040 1,182,133 25,961,181 3,297,225 12/31/2018 15,559,867 (3,435,725) 12,335,998 1,501,042 27,895,864 (1,934,683) 12/31/2017 23,213,245 (7,653,378) 10,702,689 1,633,309 33,915,934 (6,020,070) 12/31/2016 8,612,801 14,600,444 9,500,074 1,202,615 18,112,875 15,803,059 12/31/2015 6,170,790 2,442,011 9,037,373 462,701 15,208,163 2,904,712 12/31/2014 3,598,821 2,571,969 6,765,165 2,272,208 10,363,986 4,844,177 * 2017's Significant increase in cash balance is due to issuing bonds for the generator project. Hutchinson Utilities Commission Cash -Designations Report, Electric 2/29/2024 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest February 2024 January 2024 Position Savings, Checking, Investments varies varies Total HUC Operating Funds tiectric iI Debt Restricted Requirements Bond Covenants - sinking fund Debt Restricted Requirements Bond Covenants -1 year Max. P & I Total Restricted Funds Operating Reserve Rate Stabalization Funds PILOT Funds Catastrophic Funds Capital Reserves Total Designated Funds varies 27,260,392.98 27,780,580.05 (520,187.07) 27,260,392.98 27,780,580.05 (520,187.07) Min 60 days of 2024 Operating Bud. $400 K-$1.2 K Charter (Formula Only) Risk Mitigation Amount 5 Year CIP (2024-2028 Fleet & Infrastructure Maintenance) 295,914.06 197,276.04 98,638.02 1,183,656.00 1,183,656.00 - 1,479,570.06 1,380,932.04 98,638.02 4,593,259.83 4,593,259.83 - 204,746.72 182,888.64 21,858.08 1,345,802.00 1,345,802.00 - 800,000.00 800,000.00 2,750,000.00 2,750,000.00 - 9,693,808.55 9,671,950.47 21,858.08 YE YE YE YE YTD APPA Ratio HUC 2020 2021 2022 2023 2024 5K-10K Cust. Target Debt to Asset Ratio (* w/Gen.) 32.6% 32.2% 34.8% 34.0% 33.9% 39.8% Current Ratio 6.18 5.70 4.96 4.35 4.58 3.75 RONA 2.5% -1.2% -4.2% -0.9% -1.0% NA >0% Notes/Graphs: Hutchinson Utilities Commission Cash -Designations Report, Gas 2/29/2024 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest February 2024 January 2024 Position Savings, Checking, Investments varies varies Total HUC Operating Funds Debt Restricted Requirements Bond Covenants - sinking fund Debt Restricted Requirements Bond Covenants -1 year Max. P & I Total Restricted Funds Operating Reserve Rate Stabalization Funds PILOT Funds Catastrophic Funds Capital Reserves Total Designated Funds varies 27,260,392.98 27,780,580.05 (520,187.07) 27,260,392.98 27,780,580.05 (520,187.07) Min 60 days of 2024 Operating Bud. $200K-$600K Charter (Formula Only) Risk Mitigation Amount 5 Year CIP (2024-2028 Fleet & Infrastructure Maintenance) 543,450.00 362,300.00 181,150.00 2,072,000.00 2,072,000.00 - 2,615,450.00 2,434,300.00 181,150.00 2,038,207.33 2,038,207.33 472,900.68 626,564.78 (153,664.10) 596,824.00 596,824.00 200,000.00 200,000.00 700,000.00 700,000.00 4,007,932.01 4,161,596.11 (153,664.10) YE YE YE YE YTD HUC 2020 2021 2022 2023 2024 AGA Ratio Target Debt to Asset 32.0% 28.8% 26.5% 21.0% 20.5% 35%-50% Current Ratio 5.18 4.79 4.06 4.61 4.82 1.0-3.0 RONA 5.3% 2.9% 3.0% 6.2% 1.7% 2%-5% Notes/Graphs: HUTCHINSON UTILITIES COMMISSION Investment Report For the Month Ended February 29, 2024 Interest Current Date of Date of Par Current Purchase Unrealized Premium Next Institution Description Rate YTM Purchase Maturity Value Value Amount Gain/(Loss) (Discount) Call Date Wells Fargo Money Market 4.880% 4.880% NA NA - 39,555.96 - - - N/A Wells Fargo FFCB 4.250% 4.250% 12/20/2022 12/20/2024 1,000,000.00 992,850.00 1,000,000.00 (7,150.00) - N/A Wells Fargo FFCB 4.000% 4.000% 04/10/2023 03/10/2025 580,000.00 576,032.80 580,000.00 (3,967.20) - N/A Wells Fargo FHLB 5.000% 5.000% 05/31/2023 11/26/2025 1,000,000.00 993,530.00 1,000,681.44 (7,151.44) 681.44 05/26/2024 Wells Fargo FHLB 0.500% 0.587% 01/29/2021 01/29/2026 295,000.00 274,291.00 295,000.00 (20,709.00) - 07/29/2024 Wells Fargo FHLB 0.500% 0.525% 02/09/2021 02/09/2026 470,000.00 435,393.90 470,000.00 (34,606.10) - 08/09/2024 Wells Fargo FHLB 1.000% 1.432% 04/29/2021 04/29/2026 400,000.00 381,268.00 400,000.00 (18,732.00) - 08/29/2024 Wells Fargo FHLB 0.750% 1.069% 06/30/2021 06/30/2026 300,000.00 277,668.00 300,000.00 (22,332.00) - 03/30/2024 Wells Fargo FHLB 0.900% 1.281% 09/30/2021 09/30/2026 250,000.00 231,240.00 250,000.00 (18,760.00) - 03/30/2024 Wells Fargo FHLB 1.115% 4.179% 01/10/2024 02/26/2027 575,000.00 520,467.00 526,218.41 (5,751.41) (48,781.59) 05/26/2024 Wells Fargo FFCB 1.000% 3.884% 02/02/2024 05/18/2027 1,100,000.00 985,798.00 1,005,028.11 (19,230.11) (94,971.89) 05/07/2024 Wells Fargo CD's 0.450% 0.450% 04/14/2021 04/15/2024 245,000.00 243,537.35 245,000.00 (1,462.65) - 08/14/2024 Wells Fargo CD's 2.800% 2.800% 06/17/2022 06/17/2024 245,000.00 243,189.45 245,000.00 (1,810.55) - N/A Wells Fargo CD's 0.550% 0.550% 08/02/2021 08/05/2024 245,000.00 240,100.00 245,000.00 (4,900.00) - N/A Wells Fargo CD's 4.800% 4.800% 11/16/2022 11/15/2024 245,000.00 244,532.05 245,000.00 (467.95) - N/A Wells Fargo CD's 1.100% 1.100% 01/31/2022 01/31/2025 245,000.00 236,353.95 245,000.00 (8,646.05) - 07/31/2024 Wells Fargo CD's 1.600% 1.600% 02/23/2022 02/24/2025 245,000.00 236,993.40 245,000.00 (8,006.60) - N/A Wells Fargo CD's 4.650% 4.650% 04/12/2023 04/07/2025 245,000.00 244,066.55 245,000.00 (933.45) - N/A Wells Fargo CD's 4.650% 4.650% 40/14/2023 04/14/2025 245,000.00 244,140.05 245,000.00 (859.95) - N/A Wells Fargo CD's 3.100% 3.100% 06/15/2022 06/16/2025 245,000.00 239,396.85 245,000.00 (5,603.15) - N/A Wells Fargo CD's 3.100% 3.100% 06/15/2022 06/16/2025 245,000.00 239,396.85 245,000.00 (5,603.15) - N/A Wells Fargo CD's 3.300% 3.300% 08/26/2022 08/26/2025 245,000.00 239,494.85 245,000.00 (5,505.15) - N/A Wells Fargo CD's 1.000% 1.000% 05/19/2021 05/19/2026 245,000.00 226,615.20 245,000.00 (18,384.80) - N/A Wells Fargo CD's 1.000% 1.000% 07/28/2021 07/28/2026 245,000.00 225,196.65 245,000.00 (19,803.35) - N/A Wells Fargo CD's 1.050% 1.050% 08/08/2021 08/25/2026 238,000.00 219,036.16 238,000.00 (18,963.84) - N/A Wells Fargo CD's 4.500% 4.500% 12/20/2023 12/21/2026 245,000.00 246,305.85 245,000.00 1,305.85 - N/A Wells Fargo CD's 1.000% 1.207% 07/31/2021 07/13/2028 245,000.00 218,069.60 245,000.00 (26,930.40) 06/13/2024 Broker Total 49.7% 9,883,000.00 9,494,519.47 9,739,927.96 (284,964.45) (143,072.04) Cetera Investment Services Money Market 0.500% 0.500% N/A N/A - 9,124.27 - - - N/A Cetera Investment Services Municipal Bonds 2.854% 3.173% 12/20/2018 02/01/2024 - - - - - N/A Cetera Investment Services Municipal Bonds 2.977% 3.246% 12/20/2018 03/15/2024 250,000.00 249,810.00 248,743.99 1,066.01 (1,256.01) N/A Cetera Investment Services Municipal Bonds 1.940% 1.821% 01/13/2020 05/01/2024 65,000.00 64,642.50 65,570.70 (928.20) 570.70 N/A Cetera Investment Services Municipal Bonds 5.742% 3.658% 04/11/2019 08/01/2024 100,000.00 100,143.00 109,960.00 (9,817.00) 9,960.00 N/A Cetera Investment Services Municipal Bonds 5.000% 4.253% 02/09/2023 08/15/2024 270,000.00 269,873.10 279,454.50 (9,581.40) 9,454.50 N/A Cetera Investment Services Municipal Bonds 2.400% 2.908% 08/05/2022 08/15/2024 50,000.00 49,352.50 50,070.17 (717.67) 70.17 N/A Cetera Investment Services Municipal Bonds 2.402% 2.926% 08/05/2022 10/01/2024 125,000.00 122,925.00 124,674.19 (1,749.19) (325.81) N/A Cetera Investment Services Municipal Bonds 2.033% 4.794% 06/05/2023 10/01/2024 85,000.00 83,409.65 82,332.21 1,077.44 (2,667.79) Make -Whole Call Cetera Investment Services Municipal Bonds 5.200% 4.710% 02/21/2023 11/01/2024 30,000.00 29,948.40 30,711.27 (762.87) 711.27 N/A Cetera Investment Services Municipal Bonds 4.000% 4.689% 05/19/2023 12/01/2024 50,000.00 49,559.50 50,428.33 (868.83) 428.33 N/A Cetera Investment Services Municipal Bonds 2.528% 1.918% 01/13/2020 12/01/2024 100,000.00 98,000.00 102,999.53 (4,999.53) 2,999.53 N/A Cetera Investment Services Municipal Bonds 1.319% 4.407% 09/26/2022 12/01/2024 50,000.00 48,584.50 47,238.35 1,346.15 (2,761.65) N/A Cetera Investment Services Municipal Bonds 3.922% 3.429% 12/20/2018 12/01/2024 204,000.00 202,198.68 208,181.10 (5,982.42) 4,181.10 N/A Cetera Investment Services Municipal Bonds 3.375% 4.693% 06/05/2023 03/01/2025 260,000.00 255,699.60 256,618.05 (918.45) (3,381.95) Make -Whole Call Cetera Investment Services Municipal Bonds 2.092% 4.793% 08/04/2023 05/01/2025 190,000.00 183,724.30 182,543.32 1,180.98 (7,456.68) NA Cetera Investment Services Municipal Bonds 4.415% 4.516% 02/21/2023 05/01/2025 60,000.00 59,585.40 59,907.79 (322.39) (92.21) N/A Cetera Investment Services Municipal Bonds 4.400% 3.221% 04/11/2019 07/01/2025 500,000.00 491,895.00 539,101.11 (47,206.11) 39,101.11 07/01/2024 Cetera Investment Services Municipal Bonds 0.824% 4.678% 01/09/2023 08/01/2025 100,000.00 94,202.00 91,160.64 3,041.36 (8,839.36) N/A Cetera Investment Services Municipal Bonds 5.640% 3.007% 04/18/2019 08/15/2025 205,000.00 189,032.55 169,737.95 19,294.60 (35,262.05) N/A Cetera Investment Services Municipal Bonds 3.743% 2.740% 04/18/2019 09/15/2025 215,000.00 211,278.35 228,334.53 (17,056.18) 13,334.53 N/A Cetera Investment Services Municipal Bonds 3.379% 1.934% 08/19/2019 10/01/2025 310,000.00 300,231.90 339,739.18 (39,507.28) 29,739.18 N/A Cetera Investment Services Municipal Bonds 2.727% 2.271% 03/03/2022 12/01/2025 335,000.00 318,089.20 342,781.72 (24,692.52) 7,781.72 N/A Cetera Investment Services Municipal Bonds 5.600% 1.186% 07/28/2020 12/01/2025 45,000.00 45,475.65 55,250.55 (9,774.90) 10,250.55 N/A Cetera Investment Services Municipal Bonds 4.250% 3.258% 04/11/2019 01/01/2026 500,000.00 490,430.00 529,769.03 (39,339.03) 29,769.03 N/A Cetera Investment Services Municipal Bonds 2.420% 1.175% 10/06/2020 03/01/2026 100,000.00 94,662.00 106,734.28 (12,072.28) 6,734.28 N/A Cetera Investment Services Municipal Bonds 3.000% 5.017% 11/17/2023 04/01/2026 135,000.00 130,057.65 129,493.80 563.85 (5,506.20) N/A Cetera Investment Services Municipal Bonds 1.609% 1.124% 09/24/2020 04/01/2026 285,000.00 264,491.40 292,370.10 (27,878.70) 7,370.10 N/A Cetera Investment Services Municipal Bonds 6.690% 3.356% 04/18/2019 04/15/2026 60,000.00 53,617.80 47,545.20 6,072.60 (12,454.80) N/A Cetera Investment Services Municipal Bonds 5.900% 1.451% 07/28/2020 06/15/2026 75,000.00 76,449.00 93,741.75 (17,292.75) 18,741.75 N/A Cetera Investment Services Municipal Bonds 0.000% 1.415% 08/13/2020 07/01/2026 100,000.00 88,170.00 92,037.00 (3,867.00) (7,963.00) N/A Cetera Investment Services Municipal Bonds 3.250% 2.903% 04/18/2019 08/01/2026 500,000.00 478,975.00 514,790.69 (35,815.69) 14,790.69 N/A Cetera Investment Services Municipal Bonds 2.116% 3.307% 06/07/2022 08/01/2026 75,000.00 70,346.25 71,565.00 (1,218.75) (3,435.00) N/A Cetera Investment Services Municipal Bonds 2.150% 2.203% 07/01/2019 12/01/2026 40,000.00 37,551.60 40,150.64 (2,599.04) 150.64 N/A Interest Current Date of Date of Par Current Purchase Unrealized Premium Next Institution Description Rate YTM Purchase Maturity Value Value Amount Gain/(Loss) (Discount) Call Date Cetera Investment Services Municipal Bonds 1.664% 1.150% 08/27/2020 09/01/2026 225,000.00 206,574.75 231,696.00 (25,121.25) 6,696.00 N/A Cetera Investment Services Municipal Bonds 2.375% 1.816% 09/04/2019 12/01/2026 90,000.00 84,216.60 93,395.70 (9,179.10) 3,395.70 N/A Cetera Investment Services Municipal Bonds 2.350% 2.191 % 07/01/2019 12/01/2026 500,000.00 468,510.00 505,385.00 (36,875.00) 5,385.00 N/A Cetera Investment Services Municipal Bonds 3.000% 1.991% 08/19/2019 02/01/2027 50,000.00 47,628.50 53,551.00 (5,922.50) 3,551.00 N/A Cetera Investment Services Municipal Bonds 3.150% 2.034% 08/1 9/201 9 03/15/2027 100'000.00 95,753.00 109,138.50 (13,385.50) 9,138.50 N/A Cetera Investment Services Municipal Bonds 3.332% 3.120% 04/1 8/201 9 04/15/2027 500,000.00 481,080.00 507,783.94 (26,703.94) 7,783.94 N/A Cetera Investment Services Municipal Bonds 3.865% 2.470% 08/1 9/201 9 05/01/2027 55,000.00 54,208.55 60,986.48 (6,777.93) 5,986.48 05/01/2025 Cetera Investment Services Municipal Bonds 5.981% 4.910% 11/20/2023 05/01/2027 120,000.00 123,123.60 126,798.40 (3,674.80) 6,798.40 N/A Cetera Investment Services Municipal Bonds 3.553% 2.289% 08/19/2019 05/01/2027 55,000.00 52,769.20 60,468.04 (7,698.84) 5,468.04 05/01/2026 Cetera Investment Services Municipal Bonds 3.230% 1.828% 08/1 9/201 9 05/15/2027 145,000.00 138,852.00 160,827.31 (21,975.31) 15,827.31 N/A Cetera Investment Services Municipal Bonds 1.925% 1.719% 11/23/2021 06/01/2027 310,000.00 281,204.10 313,447.46 (32,243.36) 3,447.46 Make -Whole Call Cetera Investment Services Municipal Bonds 1.861% 1.254% 06/07/2021 07/01/2027 410,000.00 374,440.70 412,336.71 (37,896.01) 2,336.71 N/A Cetera Investment Services Municipal Bonds 3.000% 3.101% 05/18/2020 09/01/2027 65,000.00 63,758.50 69,180.58 (5,422.08) 4,180.58 09/01/2025 Cetera Investment Services Municipal Bonds 2.817% 2.817% 09/25/2019 10/01/2027 35,000.00 29,383.55 27,969.55 1,414.00 (7,030.45) 05/01/2025 Cetera Investment Services Municipal Bonds 1.415% 1.793% 11/23/2021 03/01/2028 100,000.00 88,907.00 98,088.31 (9,181.31) (1,911.69) N/A Cetera Investment Services Municipal Bonds 3.270% 2.141% 08/19/2019 03/15/2028 155,000.00 147,759.95 170,805.09 (23,045.14) 15,805.09 09/15/2027 Cetera Investment Services Municipal Bonds 2.974% 2.574% 11/07/2019 04/01/2028 75,000.00 69,325.50 77,253.00 (7,927.50) 2,253.00 N/A Cetera Investment Services Municipal Bonds 2.125% 1.904% 11/23/2021 06/01/2028 110,000.00 98,057.30 111,525.06 (13,467.76) 1,525.06 N/A Cetera Investment Services Municipal Bonds 2.547% 1.240% 08/10/2021 07/01/2028 125:000.00 115,182.50 136,101.16 (20918.66) 11,101.16 N/A Cetera Investment Services Municipal Bonds 3.140% 2.004% 08/19/2019 OS/01/2028 500,000.00 470,210.00 547,105.00 (76,895.00) 47,105.00 OS/01/2027 Cetera Investment Services Municipal Bonds 3.000% 2.199% 05/19/2020 08/15/2028 90,000.00 88,210.80 95,401.80 (7,191.00) 5,401.80 08/15/2025 Cetera Investment Services Municipal Bonds 1.692% 1.813% 11/24/2021 10/01/2028 180,000.00 156,564.00 179, 18%4 (22,624.74) (811.26) N/A Cetera Investment Services Municipal Bonds 3.000% 1.942% 08/19/2019 06/01/2029 115:000.00 106:523.35 125:961.80 (19,438.45) 10,961.80 N/A Cetera Investment Services Municipal Bonds 5.295% 4.363% 02/O8/2024 10/01/2029 175,000.00 178,949.75 186,348.68 (7,398.93) 11,348.68 N/A Cetera Investment Services Municipal Bonds 4.000% 3.214% 03/22/2021 09/01/2031 60,000.00 59,040.00 64,292.00 (5,252.00) 4,292.00 09/01/2024 Cetera Investment Services Municipal Bonds 3.500% 2.699% 11/23/2021 02/01/2033 50,000.00 50,114.50 54,390.44 (4,275.94) 4:390.44 02/01/2025 Cetera Investment Services Municipal Bonds 3.250% 2.655% 08/1 9/201 9 06/01/2029 75,000.00 75,171.00 79,860.31 (4,689.31) 4,860.31 02/01/2025 Cetera Investment Services Municipal Bonds 3.125% 2.303% 11/23/2021 10/01/2034 50,000.00 49,356.00 54,773.69 (5,417.69) 4,773.69 04/01/2027 Cetera Investment Services Municipal Bonds 3.125% 2.456% 11/23/2021 OZ01/2035 50,000.00 49,362.00 54,236.11 (4,874.11) 4,236.11 OZ01/2026 Broker Total 50.3% 10,039,000.00 9,615,772.45 10,352,032.53 (745,384.35) 313,032.53 TOTAL INVESTMENTS 100.0% ELECTRIC DIVISION Operating Revenue February 2024 CLASS AMOUNT KWH /KWH Street Lights $22.07 405 $0.05449 Electric Residential Service $422,924.47 3,818,253 $0.11076 All Electric Residential Service $24,235.57 240,213 $0.10089 Electric Small General Service $141,722.37 1,363,064 $0.10397 Electric Large General Service $514,050.81 5,548,320 $0.09265 Electric Large Industrial Service $640,242.54 8,248,000 $0.07762 Total $1,743,197.83 19,218,255 $0.09071 Power Adjustment $0.00000 Rate Without Power Adjustment $0.09071 Electric Division Year -to -Date M2024 $A--t 02023 $A--t ■2024 KWH110 02023 KWH110 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Street Lights Residential All Elec. Small Gen. Large Gen. Large For Resale Total Resid. Srv. Srv. Industrial NOTE: Sales for resale includes capacity sales and energy for resale NATURAL GAS DIVISION Operating Revenue FEBRUARY 2024 CLASS AMOUNT MCF /$ MCF Residential $470,495.00 52,031 $9.04259 Commercial $321,144.21 36,009 $8.91844 Large Industrial $11,051.68 1,129 $9.78891 Large Industrial Contracts $604,830.65 75,226 $8.04018 Total $1,407,521.54 164,395 $8.56183 Fuel Adjustment $0.00000 Rate Without Fuel Adjustment $8.56183 Natural Gas Division Year -to -Date ® 2024 $ Amount 0 2023 $ Amount ■ 2024 MCF 13 2023 MCF 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 AL I I I Oil Gas Residential Gas Commercial Large Industrial Large Industrial Total Contracts HUTCHINSON UTILITIES COMMISSION ,�p Board Action Form Agenda Item: Review Policies ie Radke Review Policies Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: As part of HUC's standard operating procedures, a continual policy review is practiced. This month, the following policies were reviewed and no changes are recommended on these policies at this time: Section 3 of Exempt Handbook Section 3 of Non -Exempt Handbook BOARD ACTION REQUESTED: None EXEMPT SECTION 3 — HOURS AND CONDITIONS OF EMPLOYMENT Staff Personnel will establish work schedules, subject to the General Manager's approval. The regular work week is five 8-hour working days with two consecutive days off. The normal work week is Monday through Friday, except as otherwise established by Staff Personnel based on the customers' and Department's needs. The Utilities office hours are 7:30 a.m. to 4:00 p.m. Monday through Friday. FLEXTIME PROGRAM HUC's flextime program allows exempt employees to vary their scheduled work hours to conform with the operations of the Utilities. Flextime is approved by the employee's Manager or Director. REST PERIODS Employees may take one 15-minute paid rest period during each four-hour work period. One rest period is taken in the morning and the other rest period is taken in the afternoon. Rest periods shall not be cumulative and shall not be utilized to compensate for other absences. MEAL PERIODS Employees receive an unpaid meal period either one-half hour or one -hour long for a shift lasting at least six hours. Meal periods shall not be cumulative and shall not be utilized to compensate for other absences. ATTENDANCE/TARDINESS Employees are expected to work or use approved leave for all their scheduled hours. Unsatisfactory attendance including reporting late, quitting early or excessive absenteeism shall be cause for disciplinary action. An employee anticipating being late for any reason, must contact his/her Director, Manager or Supervisor as far in advance as possible. Employees are also required to report to their Director, Manager or Supervisor if they are ill and unable to continue working. If an employee is ill and cannot report to work, the employee must notify his/her Director, Manager or Supervisor before the scheduled start of the workday. INCLEMENT WEATHER If inclement weather causes an employee to arrive late or leave the job early, the employee must use vacation time, floating holiday, compensatory time or time without pay for the portion of the scheduled shift the employee did not work. If the General Manager determines it is necessary to close HUC offices due to weather, all employees will be paid their regular pay. Essential employees will be required to remain on -duty, however, they will be given comparable time off at a later date. If an essential employee living within the limits of the City of Hutchinson cannot get to the job site due to inclement weather, a HUC vehicle or snowplow will be dispatched to pick up the essential employee. NON-EXEMPT SECTION 3 — HOURS AND CONDITIONS OF EMPLOYMENT See Union Contract. REST PERIODS Employees may take one 15-minute paid rest period during each four-hour work period. Rest periods are taken during the second and third hours and between the sixth and seventh hours of the workday. During the summer, the afternoon rest period shall be taken when the Manager or Director deems it appropriate. Rest periods shall not be cumulative and shall not be utilized to compensate for other absences. MEAL PERIODS Employees receive an unpaid meal period of one-half hour for a shift lasting at least six hours. Meal periods may not be cumulative and may not be utilized to compensate for other absences. ATTENDANCE/TARDINESS Employees are expected to work or use approved leave for all their scheduled hours. Unsatisfactory attendance including reporting late, quitting early or excessive absenteeism shall be cause for disciplinary action. An employee anticipating being late for any reason, must contact his/her Director or Manager as far in advance as possible. Employees are also required to report to the Director or Manager if they are ill and unable to continue working. If an employee is ill and cannot report to work, the employee must notify his/her Director or Manager before the scheduled start of the workday. USE OF FACILITIES DURING OFF -DUTY HOURS Employees are not allowed on -site during off -duty hours without prior approval of a Director or Manager. INCLEMENT WEATHER If inclement weather causes an employee to arrive late or leave the job early, the employee must use vacation time, floating holiday, compensatory time or time without pay for the portion of the scheduled shift the employee did not work. If the General Manager determines it is necessary to close HUC offices due to weather, all employees will be paid their regular pay. Essential employees will be required to remain on -duty, however, they will be given comparable time off at a later date. If an essential employee living within the limits of the City of Hutchinson cannot get to the job site due to inclement weather, a HUC vehicle or snowplow will be dispatched to pick up the essential employee. HUTCHINSON UTILITIES COMMISSION��` Board Action Form �r�turscti mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm Agenda Item: Award Contract for Hutchinson Substation 115kV and 69kV Circuit Breakers Presenter: Dan L. Agenda Item Type: Time Requested (Minutes): 10 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: On March 13th HUC held a bid opening for 115kV and 69kV circuit breakers to be used for the Hutchinson Substation 115kV expansion project. Three bids were received. After reviewing the bid proposals, staff and DGR Engineering are recommending awarding the bid to Border States for a total contract price of $760,936.17. Border States would be furnishing circuit breakers manufactured by Siemens under this contract. Please see the attached bid tabulation sheet for the bid results. Attachments: Bid Summary DGR Engineering Letter of Recommendation March 2024 BOARD ACTION REQUESTED: Award contract for Hutchinson Substation 115kV and 69kV circuit breakers to Border States. FiscalImpact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: BID SUMMARY Furnishing 115 kV & 69 kV Breakers - Hutchinson Substation Hutchinson Utilities Commission Hutchinson, Minnesota OGI ENGINEERING DGR Project No. 428507 Bid Letting: March 13, 2024 - 2:00 PM Hutchinson Utilities Commission Page 1 of 1 Bid Act, Add. Guaranteed I Bidder and Address Security 1 & 2 Bid Price Delivery Date Breaker Mar Comments Border States (Siemens) 69 kV: 11927 53rd Street NE Bond 5% Bid Yes $760,936.17 115 kV: 74-84 Weeks Siemens Energy Taxes not included in bid price. Alberh ille. MN 55301 95-107 Weeks Border States (GE) 69 kV: 5 % Bid 56-60 Weeks 11927 53rd Street NE Yes $979,031.94 GE Grid Solutions Taxes not included in bid rice. P Bond 115 kV: Albertville. MN 55301 112-116 Weeks Hitachi Energy USA Inc. 5 %Bid Taxes not included in bid price. Westmoreland Park East 100 Distribution Circle Bond Add. 2 $960 70.00 � 90-94 Weeks Hitachi Energy gy Accessories and SF6 gas not included in bid price. Mt. Pleasant, PA 15666 P'.\04\285\OTSprdsht\BidSumTab Brkrs 428507 BID TABULATION Furnishing 115 kV & 69 kV Breakers - Hutchinson Substation Hutchinson Utilities Conunission Hutchinson, Minnesota DGR Project No. 428507 Bid Letting: March 13. 2024 - 2:00 PM Unit No. Nance and Description of Construction Unit A 115 kV Circuit Breaker B 69 kV Circuit Breaker Total Base Bid: Corrected Bid Atnount Shown Shaded Border States Siemens Energy No. of Units Unit Price Ext. Price 4 F 113.127.66 $ 452.510.64 102.808.51 $ 308,425.53 $ 760,936.17 Border States GE Grid Solutions Unit Price Ext. Price $ 146.521.28 $ 586.085.12 $ 97.648.94 $ 292.946.82 $ 879,03194 MR ENGINEERING Hitachi Energy USA Inc. Hitachi Energy USA Inc. Unit Price Ext. Price $ 161..140.00 $ 644.560.00 $ 105.470.00 $ 316.410.00 $ 960,970.00 P:\04\285\07\Sprdsht\BidSumTab Brkrs 428507 Page 1 of 1 OGI March 20, 2024 ENGINEERING" Hutchinson Utilities Commission Attn: Daniel Lang, Engineering Services Manager 225 Michigan Street SE Hutchinson, MN 55350 RE: Recommendation of Award of Contract Furnishing 115 kV and 69 kV Breakers — Hutchinson Substation DGR Project No. 428507 Dear Daniel: We have reviewed the bids received on March 13, 2024 for the above -referenced project. A bid summary form and detailed tabulation of the bid results is enclosed. We have checked the bids for mathematical accuracy and compliance with the bid specifications. We are hereby prepared to offer the following recommendation. There were three (3) responsive bids received ranging in price from $760,936.17 to $960,970.00. The apparent low bid evaluated was received from Border States Electric, who submitted a total price of $760,936.17 for Siemens Energy breakers. We are familiar with the Siemens breakers and see no reason why they should not be awarded the contract. We recommend that you award the contract to Border States Electric for a total price of $760,936.17. Please review our recommendation and feel free to contact us with any questions you or the Commission may have. Please let us know when an award has been made, and we will proceed with preparing the Contract Documents for signatures. We will be sending a copy of the bid summary to all bidders. Best Regards, DGR Engineering Alex Richter, P.E. Enclosure: Bid Summary and Tabulation AMR:ste DGR Engineering — 1302 South Union Street — P.O. Box 511 — Rock Rapids, IA 51246 phone: 712.472.2531 — fax: 712.472.2710 — dgr.com \0,:: \ 85\07\f:)rc\Ssec\I!!!Si eakei \CoitacL fDocs\I Lr Zcrirr Con Awaid Lo O nr i 428507 ISI ki s.docx HUTCHINSON UTILITIES COMMISSION��` Board Action Form �r�turscti mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm Agenda Item: Approve Purchase of Cooling Tower Recirculating Pumps (Plant 1) Presenter: Mike Gabrielson Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: The current pumps running the cooling tower are old Allis Chalmers pumps that were originally installed when U3 and U4 were new (-1968). These current pumps are wore out and parts are no longer available or supported. Staff is recommending purchasing two new Goulds brand pumps to replace the two existing pumps. One pump runs 24 hours a day 365 days a year to keep water flowing into the tower. This purchase is part of productions CAPX for 2024. HUC has $60K budgeted in the CAPX budget for this purchase. Once the pumps are purchased and delivered, piping modifications will need to be done as part of the installation. BOARD ACTION REQUESTED: Approve Req 009860 for the purchase of (2) new cooling tower recirc pumps Fiscal Impact: $52,460.72 Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: HUTCHINSON UTILITIES ra,�itiaa° oni'initIIIEwasrioI'll Note PURCHASE REQUISITION HUTCHINSON UTILITIES COMMISSION 225 MICHIGAN ST SE HUTCHINSON, MN 55350 Phone:320-587-4746 Fax:320-587-4721 EDELMANN & ASSOCIATES INC. 1900 ANNAPOLIS LANE NORTH MINNEAPOLIS, MN 55441 Description: Cooling Tower Recirc Pumps Date Requisition No. 03/19/2024 009860 Required by: Requested by: mgabrielson Item No. part No. Description Qty Unit Due Date Unit Price Ext. Amount 3411 PUMP EA031224CK- PROPOSAL EA031224CK 1 MFG. PART: 2.00 EA 06/02/2024 $26,230.360 $52,460.72 Total: 52,460.72 Date Printed: 03/19/2024 Requisitioned By: mgabrielson Page: 1/1 Headquarters Hutchinson Utilities Commission- Hu Mike Gabrielson 225 Michigan Street Southeast Hutchinson, MN 55350 McLeod mg a b rielson @ ci. hutch inson.m n. us Phone 320-234-0551 Fax Here is the quote you requested. N15 Minnesota Office 12265 Nicollet Ave., Burnsville, MN 55337 t. 952-444-] 949 mip of nnoo� u Number CESQ72260-01 Date Mar 18, 2024 Expires Apr 17, 2024 Hutchinson Utilities Commission- Hu Fluid Process Engineer Best Way Warehouse 2 Xylem e-05x8x9.5 Double Suction 24 Weeks ARO $27,688.80 $55,377.60 Performance Information Flow: 1,000gpm Head: 80ft Construction Deails Casing: Cast iron Impeller: 304SS, 9.843" diameter Seal: Single mechanical, John Crane 5610, Cabon vs SliCar faces w/ EPDM elastomers Baseplate: Fabricated steel Motor 30hp, 1800rpm, 3ph, 60hz, 230 460y TEPE We reserve the right to adjust quoted pricing due to the current volatility of the materials market. We will make every effort to maintain the quoted price. 1 of 3 This warranty excludes Products and any parts, failures and damage: (i) to which repair or replacement becomes necessary due to normal wear and tear; (ii) which are exhaustible items, including but not limited to such items as filter bags and seals; (iii) on which repairs, alterations or adjustments have been performed or begun by Buyer or any third party without Seller's consent; (iv) which are not promptly reported to Seller within the warranty period above; (v) which are modified without Seller's written approval; (vi) which are due to negligence other than that of Seller; (vii) which are due to accident, misuse, abuse, overloading, jamming, improper installation (other than installations made by Seller), improper operation, or abnormal conditions of temperature, moisture, dirt or corrosive matter or other environmental factors; or (viii) which have been damaged otherwise without the fault of Seller. Seller's obligation or liability under this warranty does not include any transportation or other charges or liability for direct, indirect, special or consequential damages or delay resulting from the improper use or application of the product or the substitution upon it of parts or accessories not approved by Seller or repair by anyone other than a Seller authorized representative. Buyer shall be responsible for all parts and service technician charges relating to work not covered by warranty. Buyer shall pay Seller for such parts and service work not under warranty within 15 days of the date of Seller's invoice. A past due charge of 1.25% per month shall apply to amounts past due. 10. LIMITATION OF LIABILITY. SELLER'S AGGREGATE LIABILITY WITH RESPECT TO DEFECTIVE PRODUCTS SHALL BE LIMITED TO THE MONIES PAID BY BUYER TO SELLER FOR THE DEFECTIVE PRODUCTS MANUFACTURED BY SELLER. SELLER EXTENDS NO WARRANTY, INCLUDING WITHOUT LIMITATION ANY WARRANTY AGAINST DEFECTS, IN PRODUCTS MANUFACTURED BY PARTIES OTHER THAN SELLER. SELLER SHALL NOT BE LIABLE TO BUYER, OR TO ANYONE CLAIMING UNDER BUYER, FOR ANY OTHER OBLIGATIONS OR LIABILITIES, INCLUDING, BUT NOT LIMITED TO, OBLIGATIONS OR LIABILITIES ARISING OUT OF BREACH OF CONTRACT OR WARRANTY, NEGLIGENCE OR OTHER TORT OR ANY THEORY OF STRICT LIABILITY, WITH RESPECT TO THE PRODUCTS OR SELLER'S UNDERTAKINGS, ACTS OR OMISSIONS. IN NO EVENT SHALL SELLER BE LIABLE FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF BUYER, ITS CUSTOMERS OR USERS OF THE PRODUCTS, INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS. 11. DISCLAIMER OF IMPLIED WARRANTIES. SELLER AND BUYER AGREE THAT THE FOREGOING WARRANTIES ARE EXCLUSIVE AND IN LIEU OF ALL OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR THE IMPLIED WARRANTY OF FITNESS FOR A PARTUCULAR PURPOSE. SELLER HEREBY DISCLAIMS ALL OTHER EXPRESS OR IMPLIED WARRANTIES. Any oral or written description of the Products is for the sole purpose of identifying the Products and shall not be construed as an express warranty. 12. ASSIGNMENT. BUYER SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF SELLER, ASSIGN ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT TO ANY THIRD PARTY. SUBJECT TO THE FOREGOING, THIS AGREEMENT SHALL BIND AND INURE TO THE BENEFIT OF SELLER AND BUYER AND THEIR RESPECTIVE PERMITTED SUCCESSORS AND ASSIGNS. 13. Force Maieure. Seller shall be entitled to suspend performance of its obligations under the Agreement to the extent that such performance is impeded by circumstances beyond the reasonable control of Seller, including, but not limited to war (whether declared or not), revolution, national strikes, natural disasters, acts of government, export or import prohibitions, fire, explosions, floods, accidents, sabotage, civil unrest, riots, and breakage or loss during transportation or storage as well as subcontractors' material and part shortages and delivery delays. 14. Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Wisconsin. Upon termination of this Agreement for any reason, Seller shall have all of the rights and remedies provided by law, including without limitation the rights of a secured party under Chapter 409, Wisconsin Statutes or any successor statute or similar statute in the jurisdiction where Buyer is located or stores the Products. 15. Miscellaneous. Seller reserves the right to correct clerical or similar errors relating to price or any other term shown in this Agreement. If any provision of this Agreement shall be determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. No waiver of breach of any of the provisions of this Agreement shall be construed to be a waiver of any succeeding breach of the same or any other provision. 3of3 L GOUILDS (b]PUMIPS Customer: EDELMANN & ASSOCIATES Proposal No: EA031224CK Inquiry No: Hutchinson Utilities PROFORMA INVOICE Main Offer March 12, 2024 Eric Black Edelmann & Associates (612) 259-0682 eric@edelmann.com ITEM NO QTY MODEL SIZE CONSTRUCTION DRIVER RATING/FRAME RPM UNIT TOTAL GRAND TOTAL Tower Pump 2 3410 6x8-11 M Bronze fitted 30.0 hp/286T 1800 26,230.36 52,460.72 TOTAL 2 units (Main offer) in USD-United States Dollars 52,460.72 ITT Page 1 iW 11�. u Imo. ° II II ........................ An ITT Bra rid EDELMANN & ASSOCIATES Client: Mike Gabrielson Proposal No: EA031224CK Item No: Tower Pump (Base Offer) Inquiry No: Hutchinson Utilities MODEL: 3410 M SIZE: 6x8-11/6V QTY: 2 Operating Conditions SERVICE Tower Pump LIQUID Water, Rated Temp. 70.0 deg F, SP.GR 1.000, Viscosity 1.000 cp, Rated/Max. suction pressure 0.0 / 0.0 psi g CAPACITY Rated 1,000.0 gpm HEAD 80.0 (ft) Performance at 1775 RPM per H 1 14.6 1 B basis power PUBLISHED EFFY 79.0% (CDS) RATED EFFY 77.5% with contract seal RATED POWER 26.3 hp (incl. Mech. seal drag 0.52). (Run out 29.0 hp NOL 29.2 hp) NPSHR 8.4 ft DISCH PRESSURE (R) 35.0 psi g (40.5 psi g @ Shut off) based on 0.0 psi g rated suction pressure PERF. CURVE 3769-1 (Rotation CW viewed from coupling end) Edelmann .ASSOCIATES, INC, Eric Black Edelmann & Associates (612) 259-0682 eric@edelmann.com March 12, 2024 PRICE in USD Pump Unit Incl Driver Incl Boxing Testing Freight Total 2 Units 52,460.72 SHUT OFF HEAD 93.6 ft MIN. FLOW Continuous Stable: 507.2 gpm Hydraulic: 507.2 gpm Thermal: N/A Materials CONSTRUCTION Bronze fitted CASING Cast iron (max.casing pressure @ rated temp. 175.0 psi g) CASING WEAR RING Bronze IMPELLER Bronze - Enclosed (9.6875 in rated, max=11.0000 in, min=8.0000 in) CASING GASKETS Non asbestos SHAFT MATERIAL SAE 4140 SHAFT TYPE Straight bore SHAFT SLEEVE Bronze LUBRICATION Regreasable bearings GLAND 316SS Flush vent and drain with carbon restricting bushing BEARINGS SKF 6207 (Inboard) / SKF 3306 A/C3 (Outboard) COUPLING Rexnord (Falk) - T10 1050T-S.F. 1.00 COUPLING PROPERTIES 1.0 Coupling service factor,AGMA Class 1 Clearance Fit COUPLING GUARD Carbon steel BASEPLATE Cast iron D00089A 1 T T Page 1 Proposal No: EA031224CK Item No: Tower Pump (Base Offer) MODEL: 3410 M 6x8-11/6V Sealing Method MECHANICAL SEAL Goulds SealPlus SP1CS (Carbon vs Silicon Carbide) - (Cartridge - Single) Flanges 125# flat face Liquid End Features 1/4in bronze casing vent valve Frame Features Labyrinth oil seals - Inpro VBX Shaft guard (Carbon Steel) Shaft guard - safety orange Single extended shaft Assembly and Testing Casing - Standard hydro test Impeller balanced to ISO G6.3 Piping Copper bypass tubing Needle control valve copper 3/8in. in bypass line Painting Goulds Blue standard painting Driver: Electric motor Manufacturer: Pump Mfg's Choice FURNISHED BY Pump Mfg MOUNTED BY Pump Mfg RATING 30.0 hp (22.4 KW) ENCLOSURE Severe Duty/Mill and Chemical Premium Efficiency PHASE/FREQ/VOLTS 3/60 Hz/460 INSULATION/SF F/1.15 Weights and Measurements TOTAL NET UNIT WEIGHT / VOLUME TOTAL GROSS UNIT WEIGHT / GROSS VOLUME SPEED 1800 RPM FRAME 286T 1,519.0 Ib / 26.7 ft3 1,812.0 Ib / 58.6 ft3 Program Version 1.76.0.0 Drawing Revision Limit Drawings returned with status approved as noted or revise and re -submit will be corrected and resubmitted only once. Thereafter, additional comments or revisions to these drawings will incur a charge of $250 per drawing. This proposal reflects the intended scope from the customer specifications supplied at the time of quotation. Additional specifications, requirements and scope presented at time of award or during order execution outside the original bid scope request, is subject to a change order with a potential cost and lead-time impact. ITT reserves the right to present engineering charges for more than two revision cycles on submittal drawings, provided these two revision cycles cover the intent of the specifications. ITT requires customer to provide all drawing comments applicable to the specification within the first submission return. Our offer does not include specific review and incorporation of any Statutory or Regulatory Requirements and the offer is limited to the requirements of the design specifications. Should any Statutory or Regulatory requirements need to be reviewed and incorporated then the Customer is responsible to identify those and provide copies for review and revision of our offer. 1 T T Page 2 Proposal No: EA031224CK Item No: Tower Pump (Base Offer) MODEL: 3410 M 6x8-11/6V Our quotation is offered in accordance with our comments and exceptions identified in our proposal. The pricing quoted herein will remain valid for 30 business days from the time of quotation. In the event that this validity should expire, please contact your ITT sales representative to confirm pricing validity prior to order placement. Click here to download the pump Bulletin 1 T T Page 3 GOUILDSModel 3410 M PUMPSOUTLINE DRAWING ITT ................... An ffT Brand Size 6x8-11 30i44 27.50 Pump Specification Min. headroom required to remove upper half casing 14.50 12.00 16.00 ry r � - L,7—� --T 9.00 I 9.00 _ _ _ 11 t- SUCT.FLANGE SIZE 8" DRILLING ANSI125 # FACING FF FINISH SMOOTH DISCH.FLANGE SIZE 6" DRILLING ANSI125 # FACING FF FINISH SMOOTH PUMP ROTATION LOOKING AT PUMP FROM MOTOR CW TYPE OF LUBRICATION REGREASABLE BEARINGS COOLED NO TYPE OF STUFFING BOX STANDARD COOLED NO TYPE OF SEALING MECHANICAL SEAL Motor SDecifcation MOTORBY PUMPMFG MOUNTBY PUMPMFG MFG. 1'UMPMFG'SCE7010E0REQUAL FRAME 286T POWER 30.0 hp RPM 1800 PHASE 3 FREQUENCY 60HZ VOLTS 460 INSULATION F S.F. 1.15 ENCLOSURE SEVERE DUTY/MILL AND CHEMICAL PREMI UM EFFICIENCY Auxiliary Snecification COUPLING BY PUMPMFG CPLG TYPE REXNORD FALK T101050T CPL GUARD BY PUMPMFG CPLG GUARD MATL CARBON STEEL BASEPLATE CASTIRON D00089A M EC K S EAL GOULDS SEALPL US SPI CS CARBON VS SILICON CARBIDE Typical Anchor Bolt Installation "3.50 Grout.Clearance L 1.50max.0.75min.s .; �� Refer pump IOM for typical grouting and anchoring details All dimensions are in inches. Drawing is not to scale Weights (Ibs) are approximate FORM # ED0188 N/A Program Version 1.76.0.0 T 10.50 10.50 24.00 Weityhts and Measurements PUMP 692. 0 lb MOTOR/CPLG 405. 0/12. o lb BASEPLATE 410.o lb TOTAL 1,519.0 1b GR.VOLUME w/BOX Se. 6 ft 3 GR.WEIGHT w/BOX 1,B12.0 1b Notes and 1Keterences MTR DIMENSIONS ARE APPROXIMATE INSTALL FOUNDATION BOLTS IN PIPE SLEEVES ALLOW FROM 0.75 to 1.50in. FOR GROUTING. SEE INSTRUCTION BOOK FOR DETAILS Foundation bolt grip thickness FOR PUMP TAPPED OPENINGS REFER TO DWG.: TEA031224CK/Tower Pump DRAWING IS FOR REFERENCE ONLY. NOT CERTIFIED FOR CONSTRUCTION UNLESS SIGNED. Customer: EDELMANN & ASSOCIATES End User: Hutchinson Utilities Commission Customer PO No: Item/Equip. No: Tower Pump Serial No: Service: Tower Pump DRAWING NO EA031224CK/Tower ITT Ui r'ip Model: 3410 Size: W-11 Group: M 60Hz RPM: 1775 Stages: 1 Customer: EDELMANN & ASSOCIATES Job/Inquiry No: Hutchinson Utilities End User: Hutchinson Utilities Commission Issued By: Eric Black Customer PO No: Quotation No: EA031224CK Item/Equip. No: Tower Pump (Base Offer) Certified By: Project No: Date: 03/12/2024 Service: Tower Pump Revision: 0 Operating Conditions Pump Performance Liquid: Water Published Efficiency: 79.0 % Suction Specific Speed: 8,928 gpm(US) ft Temp.: 70.0 deg F Rated Pump Efficiency: 77.5 % Min. Hydraulic Flow: 507.2 gpm S.G./Visc.: 1.000/1.000 cp Rated Total Power: 26.3 hp Min. Thermal Flow: N/A Flow: 1,000.0 gpm Non -Overloading Power: 29.2 hp TDH: 80.0 ft Imp. Dia. First 1 Stg(s): 9.6875 in NPSHa: NPSHr: 8.4 ft Solid size: Shut off Head: 93.6 ft % Susp. Solids Vapor Press: Max. Solids Size: 0.8200 in (by wtg): Notes: 1. Power and efficiency losses are not reflected on the curve below. 2. Curve shown is at ambient temperature conditions. ft 140 130 120 110 100 90 80 70 60 50 40 30 0 400 800 1200 1600 2000 2400 2800 3200 gpm 0 100 200 300 400 500 600 700 m3/h �' GOUILD r PWAII,,'S CENTRIFUGAL PUMP CHARACTERISTICS Performance Standard: HI 14.6 1 B basis power CDS No.: 3769 - 1 Speed: 1775 rpm Model: 3410 Size: 6X8-11 - M Imp. Dwg: D02498A / D02658A 0 77 Pattern: 63348 / 63454 Eye Area: 37.8 in 3 8ft 10i ;� 11 ft pw gin3011 7 8in `. 41, X\ IN% 30h`p Oh 7 20p25 p m -44 -40 - 36 - 32 -28 -24 -20 -16 -12 HUTCHINSON UTILITIES COMMISSION��` Board Action Form �r�turscti mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm Agenda Item: Approve Requisition 009861 - Renegade Professional Services Presenter: Jeremy Agenda Item; Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: Renegade Energy Advisors (REA) has provided a proposal to assist HUC and HCP in meeting annual Federal and State regulatory compliance items. Annually under the purview of the Federal Department of Transportations Office of Pipeline and Hazardous Materials Safety Administration (PHMSA) HUC and HCP are required to assess and delineate their HCA & MCA areas and perform a class location assessment. In addition, a constant review, update, and refinement of procedure manuals and programs are needed to stay in compliance with changing regulations. HUC has budgeted for the portion of costs associated with HUC's transmission line. HCP will be responsible for their portion of the costs in order to stay in compliance with the transmission line they now currently own. BOARD ACTION REQUESTED: Approve Requisition 009861 Fiscal Impact: $113,436 Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: HUTCHINSON UTILITIES C0IIIIltIII'iIIIIII tIII0Illm PURCHASE REQUISITION HUTCHINSON UTILITIES COMMISSION 225 MICHIGAN ST SE HUTCHINSON, MN 55350 Phone:320-587-4746 Fax:320-587-4721 RENEGADE ENERGY ADVISORS LLC. 448 N CEDAR BLUFF ROAD SUITE 183 KNOXVILLE, TN 37923 Note Description: HUC & HCP PHMSA Regulatory Compliance Services Date Requisition No. 03/21 /2024 009861 Required by: 03/27/2024 Requested by: jcarter Item No. part No. Description Qty Unit Due Date Unit Price Ext. Amount 2024 HUC REGULATORY COMPLIANCE SERVICES - 1 MFG. PART: 1.00 $78,486.000 $78,486.00 2024 HCP REGULATORY COMPLIANCE SERVICES - 2 MFG. PART: 1.00 $34,950.000 $34,950.00 Total: 113,436.00 Date Printed: 03/21/2024 Requisitioned By: jcarter Page: 1/1 February 't 9„ 2024 John Webster, Director of Natural Gas I(:Diivision Hutchinson Utilities Commission 225 Michigan it SE Hutchinson„ MN 55350...1905 - Ilse: 2024 Regulatory Compliance Renegade Energy Advisors„ I...II...0 ("IRIE::::A") its pleased to present Hutchinson Utilities Commission (111U, U) with this (proposal assist with the annual regulatory compliance items to satisfy PU NSA and the state of r for (both HUC assets (Ti aslk 1) and Heartland Corn (products ("HCP) assets (Taslk 2). ti't R ll'iiµ OF Ilim° Illim ....114 .....�....:.:...IIIl I u t .. 11 iY�� s o n I t � Il..IR..(.I!. '..rr'�......Ill.11! �..fN.. i 1..�..a.:(.t�..pr � k � l �° . ifll � mryl e:1!�.t Rermn 1 — II°I A/(MCA & Class Location Assessirfient The REA A team will utilize Its expertise to assist IHU.DC with their annual High Consequence Area (HCA), Moderate Consequence Area (MCA)„ and Mass Location assessment. REA proposes to use the most recent annual imagery for the assessment (2024 INAlP lirnagery, 60 cm resolution). As required by PIH MA iregulations, REA`s pipeline analysis will categorize HUC's pipeline Iby class and delineate all HCA and MCA areas. Deliverables: • All US shapefiles generated during the assessment, • FTIF= maps and -figures (if requested), • Data spreadsheets (if requested), • IFiinal report, including methodology and total mileage of class locations, HCAs & MCA& Assumptions: • This assessment will be completed via remote geospatial analysesi no 'field verifications will be performed. REA assumes that IHUC personnel will complete field verification activities, if deemed necessary. • HUC will incurthe cost to acquire updated HAIP imagery. REA will contract IE::::arth0n[:)rive to provide 2024 INAIIIp Irrnageiry (60 cm resolution). • If updated NAIP imagery is unavailable for 2024, Hutchinson will need to acquire other updated imagery. REA will provide an updated scope/cost in that case. Item 2 — I113roceduirall Manual (Reviews & Updatese REA (proposes to (provide the required annual review of the IFIF M A -regulated transmission and distribution procedural manuals. REA will review manuals 'to meet current PIHIM A regulations found in 49 CIFIR Parts 191 and 192 and applicable requirements per -the State of Minnesota. In -the 2024 calendar year, two maJor IFmlhlMSA rules are expected to be issued that will affect HUC assets. EpI::::A will include proposed updates to IHUC manuals to satisfy both 'final rules. "rhe rules are Gas Pipeline Leak Detection & Repair and -the Safety of Gas Distribution Pipelines and Other Pipeline Safety Initiatives. Status meetings with Ikey I NBC personnel are recommended at least once/month of the project duration. Deliverables: • Draft I anu.uals in Word compatible -files Final Manuals in PII::DIF compatible -file incorporating all final approved changes and rectified comments. Gas IMP (disk Matrix in Excel format Phone 1612) 619-7237 Jen®askREAllc.com 448 N. Cedar Bluff Road ti www.RenegadeEnergyAdvisors.com Suite 183 6) 0 Knoxville, TN 37923 Manuals included in the review: • Operations & Maintenance Manual • integrity Management Program Manual • Operator Qualification Manual • Emergency IFResponse Plan • Public Awareness Manual Assumptions: • IF:'iirnall procedural documents will be transmitted electronically in Word and IPDF compatible formats for record retention and future modification. • INo on site viisits are included. item Risk Assess rnent Analysis REA's team will use a quantitative risk model to assess the risk of;HUC's one high consequence area (HCA) and one moderate consequence area (MCA). Existing construction and operation data will be used, as available. If data is not available, conservative estimates per PHMSA guidelines will be used 'to establish both a likelihood and consequence for each consequence segment. Bi-weekly meetings with appropriate HUC staff are proposed. Deliverables: • Excel risk assessment sheet of each consequence area ,tl ask 2u.. l l,egi Uad (tarn ProductsI?e..Ut� ggrrr�r:.irt nq. Item 1 ® II°°lCA/MCA & Class Ill,,,,,ocatiion Assessment The REA team will utilize its expertise to assist HUC with their annual High Consequence Area (HCA), Moderate Consequence Area (MCA), and Class Location assessment. REA proposes to use the most recent annual imagery for the assessment (2024 NAIP Imagery, 60 cm resolution). As required by PHSSA regulations, REA's pipeline analysis will categorize HUC's pipeline by class and delineate all HCA and MCA areas. Deliverables: • All GIS shapefiles generated during the assessment, • PDF maps and figures (if requested), • Data spreadsheets (if requested), • Final report, including methodology and total mileage of class locations, HCAs & MCAs. Assumptions: • This assessment will be completed via remote geospaitial analyses; no field verifications will, be performed. REA assumes that HUC personnel will complete field verification activities, if deemed necessary. • The imagery acquired for Task 1/Item 1 will also be used for Task 2/Item 1. ltern 2 Procedural Manualll Reviews & Updates REA proposes to provide the required annual review of the PHMSA-regulated transmission and distribution procedural manuals. REA will review manuals to meet current PHMSA regulations found in 49 CFR Parts 191 and 192 and applicable requirements per the State of Minnesota. In the 2024 calendar year, one major PHMSA rule is expected to be issued that will affect HCP assets. REA will include proposed updates to HCP manuals to satisfy both final rules. The rule is Gas Pipeline Leak Detection & Repair. Status meetings with key HUC personnel are recommended at least once/month of the project duration Deliverables: • Draft Manuals in Word compatible files • Final Manuals in PDF compatible file incorporating all final approved changes and rectified comments. • Gas IMP Risk Matrix in Excel format Phone (612) 619-7237 Jen@askREAllc.com 448 N. Cedar Bluff Road www.RenegadeEnergyAdvisors.com Suite 183 Knoxville, TN 37923 Manuals included in the review: • Operations & Maintenance MainuM • Integrity Management Program IMainuall • Emergency Response IPlain • IFlubric Awareness Manual Assumptions: 0 Final procedural documents will be transmitted electronically in Word and IPIDIF•= compatible formats For record retention and -future modification. 0 INo on -site visits are included. Item 3 - Risk Assessment Analysliis REA's team will use a quantitative risk model to assess the risk of HCP's one high consequence area (HCA). Existing construction and operation data will be used, as available. If data is; not available, conservative estimates per PHMSA guidelines will be used to establish both a likelihood and consequence for each consequence segment. Bi-weekly meetings with appropriate HUC/HCP staff are proposed. Deliverables: • Excel risk assessment sheet of each consequence area IPR0JIIIE c "r IIMIF'!°,III..I1II N E S iW a a l4r 1 I lull„ Ih i n s o n Utfljbes IU I 2g j, t-Ur.y.,JR1,1 iLySaur iuentsR Item 1 - The 2024 HCA-MCA & Class Location assessment will be completed by July 315t, 2024. Item 2 - Proposed updates to the regulatory manuals will be completed by December 3154, 2024. Item 3 - Executed risk assessments will be completed by December 315t, 2024. F a s I N o a o I III a it �o ui ui i II ur r� p a r t x mVm t r prr� w %lwu r e m ein w Item 1 - The 2024 HCA-MCA & Class Location assessment will be completed by July 315t, 2024. Item 2 - Proposed updates to the regulatory manuals will be completed by December 315t, 2024. Item 3 - Executed risk assessment will be completed by December 315t, 2024. Cos f REA proposes the following estimate on a time and materials,, not to exceed basis: ITEM DESCRIPTION AMOUNT Item 1 - HCAIMCA & Class Location Assessment - mw. m 2024 Geospatial Analysis _.��........_ ._.:.w -.....u....._ ......... ..w-wn- $21,750 _...._......._...-1..w.......... 2024 NAIP Imaga.EarthOnDrive) ........... 936 .. w Item 1 -. Total Cost ,66 It�.,.� 2 Procedural Manual Reviews 8� Usates� _... _....... �..... ......... mmem a P sment _. n ®gTransmisslon Manual U dates Includin risk assesmm ... ........_ .. $25 200 ...w... Distribution Manual U dates $15,900 Item Total Cost mmmm $41,100 Item 3 Rlsk Assessment Anal sis m2� Risk Assessment -.1 HCA $7,350 ..�.--w__"Risk Assessment -1 MCA ..... ......... _ .-... _ _.� ..._ . .� �..$7,350 .. Item 3 Total Cost Task 1 - HUC Total $78,486 Phone 1612) 619-7237 yam Jen@askREAllc.com 0448 N. Cedar Bluff Road www.RenegadeEnergyAdvisors.com Suite 183 Knoxville, TN 37923 0 #X001W 1;jW0j•- # ITEM DESCRIPTION AMOUNT Item 1 — HCA/ C Class Location Assessment ss 2024 ...weos._ ..atial Analysis ......_ p y $4,600 ..............._ Item 1 — Total Cost $4,600 Lem 2 — Procedural Manual Reviews & Updates ,. .w....,.,.,. --- ...... _. . .--.. .. .. — , Transmission s Manual Update $23 000 Item 2 Total Cost $23,000 Item 3 Risk Assessment Anal sis mm. W..._...,...... ..�.— _....ssessm_.w nal m ........ m..„: Risk Assessment —1 HCA $7,350 Item 3 — Total Cost $7,360 Task 1 — HCP Total $34,960 Thank you again for the opportunity to support HUC with their regulatory programs. We look forward to the next steps. Should you have any questions please do not hesitate to contact me at (304) 993-3034. Sincerely, Brandi P. Wolfe re r F=A Phone (612) 619-7237 Igo,. Jen@askREAllc.com 1 mvw.RenegadeEnergyAdvisors.com 0 448 N. Cedar Bluff Road Suite 183 Knoxville, TN 37923