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Home My WebLink About3-25-2026 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, March 25, 2026 Call to order — 3:00 p.m. President Don Martinez called the meeting to order. Members present: President Don Martinez; Secretary Matt Cheney; Vice President Tom Lambert; Commissioner Jeremy Crosby; GM Jeremy Carter; Attorney Marc Sebora Absent: Commissioner Kathy Silvernale Jeremy Crosby was sworn in as commissioner by Attorney Marc Sebora 1. Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the Consent Agenda. Motion carried unanimously. 3. Approve 2025 Financial Audit Justin McGraw with Conway, Deuth & Schmiesing Audit Firm presented the 2025 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 Auditing 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 2025 with liabilities decreasing as well. Mr. McGraw reviewed the Cash and Investment Balances. Restricted balance remained similar with Designated and 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 along with recommendations for the upcoming year. Mr. McGraw stated the audit went well and the Staff was very helpful. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve the 2025 Financial Audit. Motion carried unanimously. 4. Approve Financial Statements Mr. Martig presented the Financial Statements. Mr. Martig noted the GRE transmission estimate was not reversed from January, February is correct but year to date is incorrect. Electric Division revenues were up but were offset by an increase in mostly purchased power and transmission costs. Natural Gas Division usage and revenues were down compared to last year but was offset by a decrease in purchased gas costs. GM Carter provided a Storm Fern update and the impact to customers. GM Carter also elaborated on the Rate Stabilization Fund and market sales. Cash Balance and investments were reviewed. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve the Financial Statements. Motion carried unanimously. 5. Open Forum a. Mayor Gary Forcier 6. Communication a. City Administrator — Matthew Jaunich — i. Preparing for summer street and building projects. 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. Plant 1 water pipe leak update. iv. Byron Bettenhausen, Natural Gas Manager 1. Annual Training 2. Received MNOPS letter stating no issues on the 2024 audit. 2025 MNOPS audit is scheduled for May 2026. Mayor Forcier inquired about the progress on the trail. Mr. Lang and GM Carter provided an update. V. Jared Martig, Financial Manager - Nothing to report c. Human Resources — Angie Radke - i. Working with new D&A Consortium and 31d Party Administrator ii. Compensation Study d. Legal — Marc Sebora — i. Nothing to report e. General Manager —Jeremy Carter i. Update on Natural Gas prepaid deal that will be closing tomorrow, hedging and spot market was reviewed ii. Strategic Planning meeting to be held in April or May 7. Policies a. Review Policies i. Section 3 of Exempt Handbook ii. Section 3 of Non -Exempt Handbook No changes recommended at this time. 2 8. Unfinished Business 9. New Business a. Approval of New Ulm Natural Gas Transportation Capacity Agreement GM Carter presented Approval of New Ulm Natural Gas Transportation Capacity Agreement. The current transportation capacity agreement has been in place since April 2004 (inception of pipeline), which is scheduled to expire on March 31, 2026. The new transportation capacity agreement is a 5-year agreement that includes reserving 15,000 Dth's per day of capacity on HUC's transmission line extending from Trimont, MN to Hutchinson (93 miles). The new agreement phases in a reservation charge increase over two years, which will then bring the reservation charge consistent with the other customers on the transmission line. The agreement also addresses additional fees that could be incurred for daily and monthly imbalances outside of the agreed upon tolerances. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve New Ulm Natural Gas Transportation Capacity Agreement. Motion carried unanimously. b. Approval of New Ulm Natural Gas Interconnect Agreement GM Carter presented Approval of New Ulm Interconnect Agreement. In order for HUC to supply and transport natural gas to the City of New an interconnect agreement needs to be in place between both parties and will run concurrently with the New Ulm Natural Gas Transportation Capacity Agreement. The interconnect agreement establishes the commodity custody transfer point and the interconnection point between Hutchinson's natural gas pipeline facilities and New Ulm's natural gas pipeline facilities. The agreement also states the equipment necessary at the interconnection station to transport and read the flow of natural gas at predetermined pressures. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve New Ulm Natural Gas Interconnect Agreement. Motion carried unanimously. c. Approve Req#10521 -Close Interval Survey Mr. Bettenhausen presented Approval of Req#10521 — Close Interval Survey. A close interval survey (CIS) is conducted on pipelines to assess the entire structure's cathodic protection_ status by recording pipe -to -soil potential profile. In 3 2025, 1/5 of the transmission line was completed and now HUC would like to do the next 1/5 of the transmission line which is 20 miles. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve Req#10521 -Close Interval Survey. Motion carried unanimously. d. Approve Req#10519 - Blasting and Recoat at MLBV 212 Site Mr. Bettenhausen presented Approval of Req#10519 — Blasting and Recoat at MLBV 212 Site. The coating at MLBV 212 is in need of removal and replacement. Staff will sandblast any above ground piping or equipment and apply new coatings to keep the equipment safe and in compliance. Motion by Commissioner Cheney, second by Commissioner Lambert to Approve Req#10519 — Blasting and Recoat at MLBV 212 Site. Motion carried unanimously. e. Approve Selling of Surplus Equipment Mr. Hunstad presented Approval of Selling of Surplus Equipment. HUC has a 2006 John Deere 310SG Tractor backhoe that is in need of a new transmission. The quote received for a re -manufactured transmission, including installation was $30,622.39. Given the age of the equipment and significant cost of repair, Staff is recommending that the piece of equipment is sold as is. The backhoe was already scheduled for disposal in 2027 and planned to be replaced with a different type of equipment. Motion by Commissioner Lambert, second by Commissioner Cheney to Approve Selling of Surplus Equipment. Motion carried unanimously. Approve Sterling Energy LLC Contract 1 st Amendment — Tabled for this meeting g. Approve Req#10531 - GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355. Mr. Gabrielson presented Approval of Req#10531 — GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355. The work will be completed by GE. Some of the cost may be covered under warranty. There are also a few other options that are being looking into, but Staff would like to move forward with this proposal for now. Conversations were held on timing and other options that may be available. 4 Motion by Commissioner Cheney, second by Commissioner Lambert to Approve Req#10531 — GE Stage 2 LPT Blade Warranty Replacement Proposal 1725355. Motion carried unanimously. 10. Adjourn There being no further business, a motion by Commissioner Cheney, second by Commissioner Lambert to adjourn the meeting at 4:00p.m. Motion carried unanimously. Matt Cheney, Secretary ATTESTS .,� �� , Don Martinez, Preside, �i