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03-26-2025 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, March 26, 2025 Call to order — 3:00 p.m. President Matt Cheney called the meeting to order. Members present: President Matt Cheney; Vice President Troy Pullis; Secretary Don Martinez; Commissioner Tom Lambert; GM Jeremy Carter; Attorney Marc Sebora: Justin McGraw with Conway, Deuth & Schmiesing Audit Firm Absent: Commissioner Kathy Silvernale 1. Conflict of Interest President Cheney declared conflict of interest in voting on agenda item 2b Ratify Payment of Bills; President Cheney is owner of Redline Systems which is on this month's payment of bills. President Cheney will be abstaining from Agenda item 2b. 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Martinez, second by Commissioner Lambert to Approve the Consent Agenda. Motion carried unanimously. 3. APPROVE 2024 FINANCIAL AUDIT — PRESENTATION BY JUSTIN MCGRAW Justin McGraw with Conway, Deuth & Schmiesing Audit Firm presented the 2024 Hutchinson Utilities Commission Independent Audit Report. Mr. McGraw also provided Financial statement packets that show more detail along with how the review went. Mr. McGraw stated the audit was conducted in accordance with the Generally Accepted Accounting Standards and Government Auditing Standards. The financial statements of the Commission are presented fairly in the firms' opinion. Mr. McGraw reviewed the Statement of Net Position. Assets decreased slightly in 2024 with liabilities increasing. Mr. McGraw reviewed the Cash and Investment Balances. Restricted and Designated balances remained similar with Operating balances decreasing. Mr. McGraw reviewed the Electric and Natural Gas Divisions Operating Revenues and Expenses. Mr. McGraw summarized the Communications portion of the report with no recommendations for the upcoming year. Mr. McGraw stated the audit went well and the Staff was very helpful. Motion by Commissioner Pullis, second by Commissioner Martinez to Approve the 2024 Financial Audit. Motion carried unanimously. 4. Approve Financial Statements Mr. Martig presented the Financial Statements. Electric Division Net Profit increased by $104K over February 2024. An additional $150k in PCA was collected compared to last year. Purchased Power increased by $182K but was due to a true up of past expenses that actually lowered purchased power by $120k in February 2024. Natural Gas Division Net Income increased by $374K mostly due to increased usage with a much colder month compared to 2024. GM Carter reviewed year to date usage on both the Electric and Natural Gas Divisions. GM Carter recapped discussion from last month regarding the Rate Stabilization fund and PCA. GM Carter reviewed Investments. Motion by Commissioner Lambert, second by Commissioner Pullis to Approve the Financial Statements. Motion carried unanimously. 5. Open Forum 6. Communication a. City Administrator — Matthew Jaunich — i. A couple of City Developments coming this year b. Divisions 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. Provided update on Caterpillar Engine Oil leaks at Plant; Ziegler Caterpillar is installing the fix which is being covered on warranty. 2. Side Stream project completed 3. Stack Testing completed iv. Jared Martig, Financial Manager- Nothing to report c. Human Resources —Angie Radke - i. Working on Natural Gas Manager position d. Legal — Marc Sebora — i. Nothing to report e. General Manager —Jeremy-Carter i. Scheduling a tour for Plants 1 and 2 ii. Working on Natural Gas Prepaid items iii. Working on Tolling Agreement iv. Prospective customer looking to come to town — Staff is in the preliminary stages of working on a draft energy agreement v. Sent Commissioners Cash Flow projections- looking at having a Special meeting in soon vi. Natural Gas Transmission TVC Update vii. Preliminary stages of permitting to relocate pipeline off of School Road Bridge viii. Sent Commissioners Owatonna Survey to review 7. Policies a. Review Policies 2 i. Section 3 of Exempt Handbook ii. Section 3 of Non -Exempt Handbook No changes recommended at this time b. Approve Changes i. Flextime Program (Exempt) ii. Attendance/Tardiness (Exempt and Non -Exempt) iii. Rest Periods (Non -Exempt) iv. Use of Facilities During Off -Duty Hours (Non -Exempt) Ms. Radke spoke of the policy changes. There are no substance changes to the policies, all policies are still applicable. Changes are to remove the word Director from policies. Motion by Commissioner Martinez, second by Commissioner Lambert to Approve Policy Changes. Motion carried unanimously. 8. Unfinished Business 9. New Business a. Approval of HTI Substation Transformer Repair Mr. Hunstad presented approval of HTI Substation Transformer Repair. The HTI Substation transformer was taken out of service in January due to a nitrogen leak. Global Transformer Solutions completed an inspection of the transformer. Staff and Global Transformer Solutions are recommending the attached transformer repairs. Motion by Commissioner Pullis, second by Commissioner Lambert to Approve HTI Substation Transformer Repair. Motion carried unanimously. 10. Adjourn There being no further business, a motion by Commissioner Martinez, second by Commissioner Pullis to adjourn the meeting at 3:29p.m. Motion carried unanimously. ATTESTS a ^' t Matt Cheney, President 3 KaM J / , � �/CI'/1QlP, �Dlrlilli,sS�di7fl