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03-03-2010 HUCMRegular Meeting March 3, 2010 (February's Regular Meeting) Members present: President Dwight Bordson; Vice President Robert Hantge; Secretary Craig Lenz; Commissioner Paul Nordin; General Manager Michael Kumm Members absent: Commissioner Donald H. Walser and Attorney Marc Sebora President Bordson called the meeting to order at 3:00 p.m. The minutes of the January 27, 2010 regular meeting were reviewed. A motion was made by Secretary Lenz, seconded by Commissioner Nordin to approve the minutes as written. Motion was unanimously carried. The January 2010 payables were discussed. A motion was made by Secretary Lenz, seconded by Vice President Hantge to ratify the payment of bills in the amount of $3,564,790.85 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the January 2010 financial statements /budget year -to -date. After discussion, a motion was made by Vice President Hangte, seconded by Secretary Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. Mayor Steve Cook and City Finance Manager Jeremy Carter were welcomed to the meeting. A discussion and follow -up to the HUC /City Council joint meeting took place. A motion was made by President Bordson, seconded by Vice President Hantge to form a committee consisting of GM Kumm, President Bordson, Secretary Lenz, and Vice President Hantge as backup, to work with city council members and review numbers for general transfer funding formula. Motion was unanimously carried. GM Kumm presented changes to employee handbooks, sections: introduction; what is HUC; and definitions. This is part of our policy review. The only changes are to the definitions section of `staff personnel'. A motion was made by Vice President Hantge, seconded by Secretary Lenz to approve changes to the employee handbooks, sections: introduction; what is HUC; and definitions. Motion was unanimously carried. (Policy attached.) GM Kumm presented changes to service beyond city limits of Hutchinson - policy. This is also part of our policy review. After discussion, a motion was made by Vice President Hantge, seconded by Commissioner Nordin to approve changes to service beyond city limits of Hutchinson - policy. Motion was unanimously carried. (Policy attached.) John Webster presented requisition #003869 for 2010 Chevrolet Silverado from Thane Hawkins Polar Chevrolet. This is for cab & chassis only; the utility body will be ordered separately. After discussion, a motion was made by Secretary Lenz, seconded by Vice President Hantge to approve requisition #003869 for 2010 Chevrolet Silverado from Thane Hawkins Polar Chevrolet for $26,248.77. Motion was unanimously carried. (Requisition attached.) Steve Lancaster presented requisition #003888 for 24 transformers from Border States. These are for inventory for 2010 projects. After discussion, a motion was made by Secretary Lenz, seconded by Commissioner Nordin to approve 24 transformers from Border States for $39,265.57. Motion was unanimously carried. (Requisition attached.) GM Kumm presented requisition #003894 for a primary underground fault locator — thumper from HDW Electronics Inc. This is a portable instrument that locates underground faults with an electrical signal, and it can tell how far away the fault is. After discussion, a motion was made by Vice President Hantge, seconded by Secretary Lenz to approve requisition #003894 for a primary underground fault locator — thumper from HDW Electronics Inc. for $31,923.56. Motion was unanimously carried. (Requisition attached.) Steve Lancaster presented requisition #003899 for cooling tower fan blade replacement cells 2 &3 at plant 2 from Cooling Tower Contractors. This is two sets for cells 2 & 3 that will need to be replaced because of visible deterioration. After discussion, a motion was made by Secretary Lenz, seconded by Vice President Hantge to approve requisition #003899 for cooling tower fan blade replacement cells 2 &3 at plant 2 from Cooling Tower Contractors for $28,300. Motion was unanimously carried. (Requisition attached.) A motion was made by Vice President Hantge, seconded by Secretary Lenz to declare the Gopher State One Call luncheon meeting scheduled for March 18, 2010 as an open meeting. Motion was unanimously carried. Division reports: Electric — Steve Lancaster • Nothing to report Gas — John Webster • Installing natural gas service at the Country Club • Working with natural gas marketers to obtain discounts on summer gas • Equipment for AMI being delivered • Will build a natural gas meter set for Round Lake, Minnesota Business — Jan Sifferath • Have received approximately $11,000 through the Revenue Recapture program • The new account coordinators are doing a great job • Teri Hofineister is doing great in her new position as account supervisor Unfinished Business • Changes to sick leave — exempt handbook We are working through some issues and will bring it to the board next month • McLeod Coop Territory Agreement Our Board, Glencoe's board and the Coop's board have all approved the terms of the agreement as well as our attorney involved. The Coop is having some issues with the agreement. Will report back next month as to the progress of the agreement. • Transportation Agreement with HTI We have not heard anything back from HTI regarding the different contracts we have sent them for review. New Business • Power Development Costs Will need to schedule a special meeting to discuss the Big Stone II payback • Purchase Power Agreement Met with RW Beck and will be drafting a response letter to MRES about the long term base load contract. Will discuss this contract at the special meeting also. • Acoma Township Acoma township wants a franchise agreement because we could be extending natural gas services to that area if people want it; we shouldn't have to pay anything if people are asking for natural gas service. GM Kumm reported on the Legislative Rally he attended in Washington, DC. Discussion was held regarding a City of Hutchinson website that offered information to what appeared to be their strategic plan. There being no further seconded by Secretary unanimously carried. ATTEST: business, a motion was made by Vice President Hantge, Lenz to adjourn the meeting at 5:12 p.m. Motion was Dwight Bordson, President Craig Lenz, Secretary Regular Meeting March 3, 2010 (February's Regular Meeting) Members present: President Dwight Bordson; Vice President Robert Hantge; Secretary Craig Lenz; Commissioner Paul Nordin; General Manager Michael Kumm Members absent: Commissioner Donald H. Walser and Attorney Marc Sebora President Bordson called the meeting to order at 3:00 p.m. The minutes of the January 27, 2010 regular meeting were reviewed. A motion was made by Secretary Lenz, seconded by Commissioner Nordin to approve the minutes as written. Motion was unanimously carried. The January 2010 payables were discussed. A motion was made by Secretary Lenz, seconded by Vice President Hantge to ratify the payment of bills in the amount of $3,564,790.85 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the January 2010 financial statements /budget year -to -date. After discussion, a motion was made by Vice President Hangte, seconded by Secretary Lenz to approve the financial statements /budget year -to -date. Motion was unanimously carried. Mayor Steve Cook and City Finance Manager Jeremy Carter were welcomed to the meeting. A discussion and follow -up to the HUC /City Council joint meeting took place. A motion was made by President Bordson, seconded by Vice President Hantge to form a committee consisting of GM Kumm, President Bordson, Secretary Lenz, and Vice President Hantge as backup, to work with city council members and review numbers for general transfer funding formula. Motion was unanimously carried. GM Kumm presented changes to employee handbooks, sections: introduction; what is HUC; and definitions. This is part of our policy review. The only changes are to the definitions section of 'staff personnel'. A motion was made by Vice President Hantge, seconded by Secretary Lenz to approve changes to the employee handbooks, sections: introduction; what is HUC; and definitions. Motion was unanimously carried. (Policy attached.) GM Kumm presented changes to service beyond city limits of Hutchinson - policy. This is also part of our policy review. After discussion, a motion was made by Vice President Hantge, seconded by Commissioner Nordin to approve changes to service beyond city limits of Hutchinson - policy. Motion was unanimously carried. (Policy attached.) John Webster presented requisition #003869 for 2010 Chevrolet Silverado from Thane Hawkins Polar Chevrolet. This is for cab & chassis only; the utility body will be ordered separately. After discussion, a motion was made by Secretary Lenz, seconded by Vice President Hantge to approve requisition #003869 for 2010 Chevrolet Silverado from Thane Hawkins Polar Chevrolet for $26,248.77. Motion was unanimously carried. (Requisition attached.) Steve Lancaster presented requisition #003888 for 24 transformers from Border States. These are for inventory for 2010 projects. After discussion, a motion was made by Secretary Lenz, seconded by Commissioner Nordin to approve 24 transformers from Border States for $39,265.57. Motion was unanimously carried. (Requisition attached.) GM Kumm presented requisition #003894 for a primary underground fault locator — thumper from HDW Electronics Inc. This is a portable instrument that locates underground faults with an electrical signal, and it can tell how far away the fault is. After discussion, a motion was made by Vice President Hantge, seconded by Secretary Lenz to approve requisition #003894 for a primary underground fault locator — thumper from HDW Electronics Inc. for $31,923.56. Motion was unanimously carried. (Requisition attached.) Steve Lancaster presented requisition #003899 for cooling tower fan blade replacement cells 2 &3 at plant 2 from Cooling Tower Contractors. This is two sets for cells 2 & 3 that will need to be replaced because of visible deterioration. After discussion, a motion was made by Secretary Lenz, seconded by Vice President Hantge to approve requisition #003899 for cooling tower fan blade replacement cells 2 &3 at plant 2 from Cooling Tower Contractors for $28,300. Motion was unanimously carried. (Requisition attached.) A motion was made by Vice President Hantge, seconded by Secretary Lenz to declare the Gopher State One Call luncheon meeting scheduled for March 18, 2010 as an open meeting. Motion was unanimously carried. Division reports: Electric — Steve Lancaster • Nothing to report Gas — John Webster • Installing natural gas service at the Country Club • Working with natural gas marketers to obtain discounts on summer gas • Equipment for AMI being delivered • Will build a natural gas meter set for Round Lake, Minnesota Business — Jan Sifferath • Have received approximately $11,000 through the Revenue Recapture program • The new account coordinators are doing a great job • Teri Hofineister is doing great in her new position as account supervisor Unfinished Business • Changes to sick leave — exempt handbook We are working through some issues and will bring it to the board next month • McLeod Coop Territory Agreement Our Board, Glencoe's board and the Coop's board have all approved the terms of the agreement as well as our attorney involved. The Coop is having some issues with the agreement. Will report back next month as to the progress of the agreement. • Transportation Agreement with HTI We have not heard anything back from HTI regarding the different contracts we have sent them for review. New Business • Power Development Costs Will need to schedule a special meeting to discuss the Big Stone II payback • Purchase Power Agreement Met with RW Beck and will be drafting a response letter to MRES about the long term base load contract. Will discuss this contract at the special meeting also. • Acoma Township Acoma township wants a franchise agreement because we could be extending natural gas services to that area if people want it; we shouldn't have to pay anything if people are asking for natural gas service. GM Kumm reported on the Legislative Rally he attended in Washington, DC. Discussion was held regarding a City of Hutchinson website that offered information to what appeared to be their strategic plan. There being no further business, a motion was made by Vice President Hantge, seconded by Secretary Lenz to adjourn the meeting at 5:12 p.m. Motion was unanimously carried. Craig Lenz, Secretary ATTEST: D t B dson, President Section I INTRODUCTION We are pleased to welcome you to the Hutchinson Utilities Commission. This Handbook has been prepared to familiarize you with our operating policies and procedures as well as your responsibilities as an employee. We hope you will find your work interesting and rewarding. When you become an employee of Hutchinson Utilities Commission, you represent Hutchinson Utilities to our customers and the general public. We should strive to show the best image possible. Should you have any questions regarding policies or procedures, kindly talk with your Director, Manager or Supervisor. WELCOME TO HUTCHINSON UTILITIES COMMISSION WHAT IS HUTCHINSON UTILITIES COMMISSION The Municipal Electric Light Plant was established in 1935 as a result of a special election authorizing the establishment of a new generating plant and distribution system through a bond issue of $250,000 to pay for the construction. The vote was 1,187 for and 128 against. Contracts were awarded for the construction of a new power plant building at the intersection of State Highways 7 and 15. The contract included three (3) 625 hp 430 kw diesel generating units, switchboard, a complete distribution system and other auxiliary equipment. On November 28 1936, construction was completed and by January of 1937, over 600 customers were connected. By the end of March, the system was serving 1,171. The City Charter was amended in 1935 to create a Utilities Commission to manage and operate the system. In 1960, the City constructed a natural gas distribution system, buying natural gas from Northern Natural Gas Company, and selling it to the citizens of Hutchinson and the surrounding rural area. Natural gas is also used in firing the dual generating units of the light plant. Since 1936, the Hutchinson Utilities Commission, consisting of three (3) qualified voters of the City of Hutchinson, has operated the Municipal Electric Plant and the Natural Gas Distribution System. It was established by Section 17 of the City Charter that the Commissioners be appointed by the City Council, one (1) every two years, for a six year term. No Commissioner can serve more than two (2) successive terms. The Commission elects a President, Vice President, and Secretary. In November of 1987, the City Charter was amended to expand the Utilities Commission to a five (5)- member board. Each Commissioner's term will be five (5) years and no Commissioner can serve more than two (2) successive terms. The City Charter gives the Commission full, absolute and exclusive control of and power over the City Light and Power Plant and the Natural Gas Distribution System. The Commission hires a General Manager to manage the day -to -day operation of the Utilities. The Hutchinson Utilities Commission has, for many years, made substantial cash contributions to the General Fund of the City of Hutchinson from surplus earnings of both the electric and gas divisions of the Utilities. Hutchinson Utilities Commission has provided and will continue to provide to its customers, electricity and natural gas at the lowest possible cost. Definitions In this Handbook, the following terms shall have the meanings as listed below: "Commission" means the Hutchinson Utilities Commission. "Essential employees" means power plant operators, system controllers, line workers, and natural gas service workers. "Exempt employees" means executive, professional and administrative employees as those terms are defined in the Fair Labor Standards Act ( "FLSA ") and who are not subject to the minimum wage and overtime provisions of the FLSA. "General Manager" means the Chief Executive of Hutchinson Utilities who is appointed by the Commission. "Immediate family" means spouse or significant other, parent, stepparent, guardian, child, stepchild, sibling, grandparent, grandchild, and any in -law. "Non- exempt employees" are employees who are generally paid hourly and are subject to the minimum wage and overtime provisions of the FLSA. "Regular full -time employee" means an employee who has been appointed to an authorized, budgeted position who is not temporary or probationary and who is regularly scheduled to work 40 hours during a work week. Generally, regular full -time employees are eligible for Utility benefit programs subject to the terms, conditions and limitations of each benefit program. "Seniority" means length of consecutive employment as a regular full -time employee with Hutchinson Utilities. "Staff personnel" means Director of Electric Division, Director of Natural Gas Division, Business Customer /Human Relations Manager, Manager of Electric Production, Manager of Electric Distribution, Manager of Technical Services, Finance Manager, Accountant, Administrative Coordinator, Purchasing Agent, Inventory Agent, Computer Systems Analyst, Energy Conservation Administrator, and Accounts Supervisor. "Temporary employee" means an employee who may work up to 40 hours per week but for a maximum of 24 weeks per year, even if not consecutive weeks. Temporary positions are eligible for legally mandated benefits such as Social Security but are ineligible for Utility benefit programs. "Utility" and "Utilities" means Hutchinson Utilities. "Working days" means Monday through Friday. Hutchinson Utilities Commission Main Extension Rules Service Beyond City Limits of Hutchinson 1. Definitions Natural Gas Distribution Main Natural gas distribution main is defined as that portion of the HUC's natural gas piping and related facilities which are intended to provide service to more than a single customer. Such piping is normally located in public streets and their right -of- way or adjacent to property lines. 2. Individual Requests for Gas Main Extension A. Application Prospective customers currently without natural gas service may request such service by submitting a written application to Hutchinson Utilities Commission (HUC). HUC shall investigate the possibility of installing gas main to the customer and shall make an estimate of the costs involved. B. Allowances Each customer shall receive a construction allowance based on projected marginal revenue. 1) Residential Customers - $915.00 2) Firm Commercial Customers Allowance for main shall be based on customer's estimated annual revenue using the following formula (based on seven year recovery): Allowance = $(U x M) x 7 Where: U = Estimated long term annual usage in Mcf M = Applicable margin per Mcf Monthly "Meter Charge" not considered in calculating customer allowance as this is a fixed cost to HUC. C. Customer Contributions A contribution shall be required if the estimated construction cost of main exceeds the main allowance(s) for the customer(s) requesting the extension. This payment is due as a single payment prior to the installation of the main. However, if a residential customer's contribution for main exceeds $300.00, the customer, with the approval of HUC, may elect to make a single payment before construction begins or agree to pay the contribution in twelve (12) equal installments, including a finance charge based on HUC's current weighted cost of capital. These installments shall be billed with the utility bill and be payable on the same date as the utility bill. All contributions shall be refundable in accordance with Section 3. of this schedule. 3. Reapportionment and Refunds of Contributions A. Reapportionment of Customer Contribution When additional customers take service from a main extension which had required a customer contribution, the original contribution and any new contribution will be reapportioned among all customers on the extension if the reapportionment does not cause an increase in any existing customer's contribution. If the reapportionment calculation would cause an increase to any customer's contribution, the portion of new main facilities under consideration will be considered a separate and new gas main extension subject to all the gas extension rules. B. Refunds of Customers with No Additional Contribution The HUC shall make refunds to the customer(s) or developer who made the contribution(s) toward the extension of main for a period of five (5) years from the installation date. When the HUC connects new customers to this portion of main extension, the refund shall be equal to the change in the customer contribution value after reapportioning the contribution using the allowance in effect at the time the extension was installed. When the HUC makes an extension of main to subsequent customer(s) that does not require a contribution form the subsequent customer(s), the refund shall be equal to the change in the customer using the allowance in effect at the time the original extension was installed and the allowance in effect for the new facilities less the construction costs of all main. C. Single Customer Payment of Contribution If an individual customer agrees in writing before the main extension is installed to pay the total required contribution, that customer shall be eligible for all main allowance refunds from all subsequent customers on the extension during the refund period. Such a written agreement will thereby preclude any reapportionment of the contribution among subsequent customers. 1) If a further main extension off the original extension is required to serve a subsequent customer and the main cost is less than the total main allowance available, the unused allowance shall be refunded to the customer who made the single payment contribution outlined above. 2) If a further main extension off the original extension is required to serve a subsequent customer and the main costs exceeds the total main allowance available, the subsequent customers shall pay the contribution for the new facilities. 4. Right to Refund The right to receive a refund of any contribution held hereunder will attach to the ownership of the premises for which the original extension was made. Any refund shall be made to the person who owns such premise(s) at the time the refund is paid unless the contributor has reserved the right to receive such refund in the conveyance of the premise(s) to a subsequent owner and demonstrates that to the HUC. In the case of a developer making a contribution to extend gas into a development, the right to receive a refund shall attach to the owner of the development at the time the refund becomes due, unless, in the conveyance of the development, the developer provides the HUC with a written agreement reserving the right to receive such refunds. In no case shall the total refund(s) exceed the amount of the contribution. 5. Clearing Rights and Costs Customer requesting service shall furnish, without expense to the HUC, right -of- way, easements, permits and additional costs incurred to provide adequate clearing for the main extension to serve the customer along a route approved by the HUC after consulting with the customer. If requested by the customer, the HUC will do the clearing at customer's expense. The customer shall pay the HUC the estimated cost of clearing to be done by the HUC. Costs will be adjusted to actual costs upon completion of the job. 6. Title The title to all distribution main extensions made by the HUC hereunder remains with the HUC. The HUC may at any time add additional customers to or make new extensions to an existing extension without the consent of any customer or customers who contributed to the cost of the existing extension, and without incurring any liability for refunding contributions other that as provided herein. 7. Construction Standards All natural gas distribution system extensions constructed hereunder shall conform to the HUC's standards of construction, and shall meet the requirements of governmental regulatory bodies having jurisdiction. 8. General Provisions A. If in the HUC's sole judgment the HUC needs an easement over customer's property in order to furnish service to customer, customer shall provide HUC with an easement at no expense to HUC. If in the HUC's sole judgment HUC needs an easement or easements over property not owned by customer in order to furnish service to customer, customer shall obtain the easement(s) at no expense to HUC. B. No structures shall be placed over the route of the HUC's natural gas facilities. However, such property may be used for gardens and other purposes which will not interfere with maintenance and replacement of HUC's natural gas facilities. C. Properties subject to an easement granted to HUC shall be graded to a level which shall not be above or more than 6 inches below finished grade, prior to the time installation of natural gas facilities is commenced by HUC. 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