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11-10-2011 HUCMSpecial Meeting November 10, 2011 Members present: President Robert Hantge; Vice President Paul Nordin; Secretary Dwight Bordson; Commissioner Donald H. Walser; Attorney Marc Sebora; General Manager Michael Kumm Member absent: Commissioner Craig Lenz President Hantge called the meeting to order at 12:04 p.m. GM Kumm presented the Termination Agreement for the Integrated Transmission Agreement (tabled at the October 26, 2011 regular commission meeting). A motion was made by Secretary Bordson, seconded by Commissioner Walser to approve the Termination Agreement for the Integrated Transmission Agreement (tabled at the October 26, 2011 regular commission meeting). Motion was unanimously carried. (Termination Agreement attached.) GM Kumm explained agenda items 2, 3 and 4 were related. Agenda item 2, previously approved Great River Energy Integration Agreement (Settlement Term Sheet) and agenda item 4, the Joint Pricing Zone Revenue Allocation Agreement were approved by the Board in the October 26, 2011 regular commission meeting. Since then, HUC received unexpected revisions to the Great River Energy Integration Agreement (Settlement Term Sheet) and the Joint Pricing Zone Revenue Allocation Agreement. GM Kumm requested a motion to rescind agenda item 2, previously approved Great River Energy Integration Agreement (Settlement Term Sheet). A motion was made by Secretary Bordson, seconded by Vice President Nordin to rescind previously approved Great River Energy Integration Agreement (Settlement Term Sheet). Motion was unanimously carried. GM Kumm presented the revised Great River Energy Integration Agreement (Settlement Term Sheet). A motion was made by Vice President Nordin, seconded by Secretary Bordson to approve the revised Great River Energy Integration Agreement (Settlement Term Sheet). Motion was unanimously carried. (Integration Agreement attached.) GM Kumm also requested a motion to rescind previously approved authority of general manager to sign the Joint Pricing Zone Revenue Allocation Agreement as HUC is no longer the signatory on the agreement; MRES is now. A motion was made by Commissioner Walser, seconded by Vice President Nordin to rescind previously approved authority of general manager to sign the Joint Pricing Zone Revenue Allocation Agreement. Motion was unanimously carried. There being no further business, a motion was made by Commissioner Walser, seconded by Secretary Bordson to adjourn the meeting at 12:09 p.m. Motion was unanimously carried. ATTEST: Robert Hantge, President Dwight Bordson, Secretary Special Meeting November 10, 2011 Members present: President Robert Hantge; Vice President Paul Nordin; Secretary Dwight Bordson; Commissioner Donald H. Walser; Attorney Marc Sebora; General Manager Michael Kumm Member absent: Commissioner Craig Lenz President Hantge called the meeting to order at 12:04 p.m. GM Kumm presented the Termination Agreement for the Integrated Transmission Agreement (tabled at the October 26, 2011 regular commission meeting). A motion was made by Secretary Bordson, seconded by Commissioner Walser to approve the Termination Agreement for the Integrated Transmission Agreement (tabled at the October 26, 2011 regular commission meeting). Motion was unanimously carried. (Termination Agreement attached.) GM Kumm explained agenda items 2, 3 and 4 were related. Agenda item 2, previously approved Great River Energy Integration Agreement (Settlement Term Sheet) and agenda item 4, the Joint Pricing Zone Revenue Allocation Agreement were approved by the Board in the October 26, 2011 regular commission meeting. Since then, HUC received unexpected revisions to the Great River Energy Integration Agreement (Settlement Term Sheet) and the Joint Pricing Zone Revenue Allocation Agreement. GM Kumm requested a motion to rescind agenda item 2, previously approved Great River Energy Integration Agreement (Settlement Term Sheet). A motion was made by Secretary Bordson, seconded by Vice President Nordin to rescind previously approved Great River Energy Integration Agreement (Settlement Term Sheet). Motion was unanimously carried. GM Kumm presented the revised Great River Energy Integration Agreement (Settlement Term Sheet). A motion was made by Vice President Nordin, seconded by Secretary Bordson to approve the revised Great River Energy Integration Agreement (Settlement Term Sheet). Motion was unanimously carried. (Integration Agreement attached.) GM Kumm also requested a motion to rescind previously approved authority of general manager to sign the Joint Pricing Zone Revenue Allocation Agreement as HUC is no longer the signatory on the agreement; MRES is now. A motion was made by Commissioner Walser, seconded by Vice President Nordin to rescind previously approved authority of general manager to sign the Joint Pricing Zone Revenue Allocation Agreement. Motion was unanimously carried. There being no further business, a motion was made by Commissioner Walser, seconded by Secretary Bordson to adjourn the meeting at 12:09 p.m. Motion was unanimously carried. ATTEST 0'4'4� Lr-.", DvJ6ht Bordson, Secretary Han e, President Termination Agreement for the Integrated Transmission Agreement Between Great River Energy And Southern Minnesota Municipal Power Agency And Hutchinson Utilities Commission This Termination Agreement ( "Agreement ") is made and entered into as of the day of 2011, by and between Great River Energy ( "GRE "), a cooperative corporation organized under the laws of the state of Minnesota, Hutchinson Utilities Commission, an enterprise fund of the City of Hutchinson, a Minnesota Municipal Corporation ( "HUC), and the Southern Minnesota Municipal Power Agency ( "SMMPA "), a municipal corporation and political subdivision of the state of Minnesota, and any successors thereof, which are referred to herein collectively as "Parties" and singularly as "Party." This Agreement is being made and entered by the Parties with respect to termination of the Integrated Transmission Agreement between the Parties. WHEREAS, GRE, as successor to United Power Association ( "UPA "), HUC and SMMPA are parties to an Integrated Transmission Agreement ( "ITA ") dated November 24, 1986, as amended, which is designated as a Carved Out Grandfathered Agreement ( "GFA ") No. 451 of Attachment P to the MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff ( "Tariff "); and WHEREAS, GRE and HUC are also parties to an agreement related to the ITA, the Settlement Agreement for MISO Schedule Fee Charges Relating to the Integrated Transmission Agreement, dated May 25, 2005 (the "MISO Fee Agreement "), which provides for settlement of certain MISO charges applicable to HUC; and WHEREAS, GRE became a Midwest Independent Transmission System Operator ( "MISO ") Transmission Owner effective December 1, 2004; and WHEREAS, SMMPA became a MISO Transmission Owner on April 1, 2006; and WHEREAS, GRE operates a joint pricing zone within MISO, which is administered subject to a Joint Pricing Zone Revenue Allocation Agreement, dated April 30, 2010 (the "GRE Joint Pricing Zone Agreement "), to which both GRE and SMMPA are parties; and WHEREAS, HUC plans to become a MISO Network Integration Transmission Service ( "NITS ") customer for its entire load, effective January 1, 2012; and 1 WHEREAS, HUC has contracted with Missouri River Energy Services ( "MRES ") to represent HUC- owned transmission facilities within MISO; and WHEREAS, the Parties desire to terminate the ITA and transition the HUC load and HUC transmission facilities to the GRE joint pricing zone, and subject to the GRE Joint Pricing Zone Agreement, effective January 1, 2012; WHEREAS, GRE and HUC desire to also terminate the MISO Fee Agreement concurrently with the termination of the ITA; and NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and undertakings set forth herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. The Parties agree to terminate the ITA and all its attachments effective as of the later of the following: (i) January 1, 2012, (ii) the date that HUC commences taking NITS service from MISO for the entire HUC load and integrates its transmission facilities under MISO operational control, and (iii) the effective date of the acceptance by the Federal Energy Regulatory Commission ( "FERC") of the revisions to the GRE Joint Pricing Zone Agreement permitting the integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone (the effective date will be referred to herein as the "Termination Date" and is the same date as the "Integration Date" as defined in the related agreement between GRE and HUC governing the integration of the HUC load and HUC transmission facilities in the GRE pricing zone). In addition, GRE and HUC agree to terminate the MISO Fee Agreement effective as of the Termination Date. 2. The Parties agree to reasonably cooperate with MISO to submit all required filings, including filings with FERC, and take such other actions as are necessary to terminate the ITA as a grandfathered agreement under the Tariff. 3. Effective as of the Termination Date, the Parties agree to waive any outstanding equalization balances under the ITA between the Parties for time periods prior to the Termination Date. The Parties acknowledge and agree that settlement of these past equalization balances is unnecessary, as actual cost recovery will be addressed under the payment provisions of the GRE Joint Pricing Zone Agreement. 4. Nothing in this Agreement is intended to modify, amend or supersede the obligations of the Parties under either of the "Restated Operations and Maintenance Agreement' between GRE and HUC, dated July 31, 2005, or the "Operation and Maintenance Agreement' between GRE and SMMPA, dated December 27, 1989, and as amended on August 1, 2001. 2 5. Nothing in this Agreement is intended to modify, amend or supersede any other contractual agreements that may exist bilaterally between the Parties. 6. GRE and SMMPA agree that SMMPA's Grand Marais Public Utilities Commission ( "Grand Marais ") network load shall remain within the GRE joint pricing zone following the Termination Date and SMMPA shall continue contracting for MISO network service in the GRE pricing zone. 7. Should the Integration Date and Termination Date be delayed beyond June 1, 2012, this Agreement shall terminate. In such instance, the Parties agree to negotiate in good faith any amendments to the ITA or other related matters to accomplish the goals set forth in this Agreement. 8. Upon the effective Termination Date, GRE will notify the Parties of the Termination Date of the ITA. 9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 10. Conflicts. This Agreement is intended to be interpreted in a manner consistent with the MISO Tariff. In the event of a conflict between this Agreement and the MISO Tariff, the Parties agree to negotiate in good faith to amend this Agreement to implement as closely as reasonably possible the original intent of the Parties. 11. Entire Agreement. This Agreement constitutes the final written expression of the Parties' agreement regarding the subject matter herein. All amendments must be in writing and signed by each Party. 12. Representation of Status. Each Party hereby represents and warrants that it has the legal capacity to enter into this Agreement and that the individuals who execute this Agreement have the full and complete authority to do so. IN WITNESS THEREOF, the Parties, by their duly authorized agents, have hereunder executed this Agreement. 3 GREAT RIVER ENERGY A Minnesota Cooperative Corporation By: William Kaul, Vice President, Transmission HUTCHINSON UTILITIES COMMISSION An enterprise fund of the City of Hutchinson, a Minnesota Municipal Corporation By: Michael Kumm, General Manager SOUTHERN MINNESOTA MUNICIPAL POWER AGENCY A Minnesota Municipal Corporation and political subdivision of the State of Minnesota By: David P. Geschwind, Executive Director and Chief Executive Officer 4 Integration Agreement Between Great River Energy And Hutchinson Utilities Commission This Integration Agreement ( "Agreement ") is made and entered into as of the day of 2011, by and between Great River Energy ( "GRE "), a cooperative corporation organized under the laws of the state of Minnesota, and Hutchinson Utilities Commission, an enterprise fund of the City of Hutchinson, a Minnesota Municipal Corporation ( "HUC ") , and any successors thereof, referred to herein collectively as "Parties" and singularly as "Party." Recitals WHEREAS, GRE, as successor to United Power Association ( "UPA "), and HUC, along with Southern Minnesota Municipal Power Association ( "SMMPA ",) are parties to an Integrated Transmission Agreement ( "ITA "), dated November 24, 1986, as amended, which is designated as Carved Out Grandfathered Agreement ( "GFA ") No. 451 of Attachment P of the MISO Open Access Transmission, Energy and Operating Reserve Markets Tariff ( "Tariff'); and WHEREAS, GRE and HUC are also parties to an agreement related to the ITA, the Settlement Agreement for MISO Schedule Fee Charges Relating to the Integrated Transmission Agreement, dated May 25, 2005 (the "MISO Fee Agreement "), which provides for settlement of certain MISO charges applicable to HUC; and WHEREAS, GRE and HUC are parties to an Operations and Maintenance Agreement, dated July 31, 2005 (the "O &M Agreement "); and WHEREAS, GRE became a Midwest Independent Transmission System Operator ( "MISO ") Transmission Owner on December 1, 2004; and WHEREAS, GRE operates a joint pricing zone within MISO, which is administered subject to a Joint Pricing Zone Revenue Allocation Agreement, dated April 30, 2010, (the "GRE Joint Pricing Zone Agreement "), to which both GRE and SMMPA are parties; and WHEREAS, HUC plans to become a MISO Network Integration Transmission Service ( "NITS ") customer for its entire load, effective January 1, 2012; and WHEREAS, HUC has contracted with Missouri River Energy Services ( "MRES ") to represent the transmission facilities owned by HUC as part of the MISO transmission system; and WHEREAS, the Parties desire to concurrently terminate the ITA, including the MISO Fee Agreement, and transition the HUC load and HUC transmission facilities to the GRE joint pricing zone 1 and subject to the GRE Joint Pricing Zone Agreement, effective as of the Integration Date, as that term is defined in Section 1, of this Agreement; and WHEREAS, the Parties are separately proposing to the other parties to the GRE Joint Pricing Zone Agreement, revisions to the GRE Joint Pricing Zone Agreement suitable to integrate HUC load and HUC transmission facilities in the GRE joint pricing zone that are intended to become effective on the Integration Date; and WHEREAS, upon integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone, GRE will be responsible to directly collect the amounts due from HUC for NITS provided by MISO to HUC, and HUC will be responsible to pay GRE such amounts; and WHEREAS, the Parties are entering into this Agreement to provide for the transition from the termination of the ITA to the integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone under the terms of the revised GRE Joint Pricing Zone Agreement. Agreement NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and undertakings set forth herein, the sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. Integration of HUC Load and Transmission Facilities in GRE Joint Pricing Zone; Integration Date. The Parties agree to enter into such agreements and take such other actions as are necessary or appropriate to integrate the HUC load and HUC transmission facilities in the GRE joint pricing zone effective as of the later of the following: (i) January 1, 2012 or (ii) the date that HUC commences taking NITS service from MISO for all of the HUC load and integrates its transmission facilities under MISO operational and /or functional control, and (iii) the effective date of the acceptance by the Federal Energy Regulatory Commission ( "FERC ") of the revisions to the GRE Joint Pricing Zone Agreement permitting the integration of the HUC load and HUC transmission facilities in the GRE joint pricing zone (the effective date will be referred to herein as the "Integration Date "). 2. Approvals; Regulatory Filings. The parties agree to reasonably cooperate to gain the approval of the other parties to the GRE Joint Pricing Zone Agreement for the revisions to the GRE Joint Pricing Zone Agreement that are necessary to incorporate the HUC load and HUC transmission facilities in the GRE joint pricing zone. The Parties agree to reasonably cooperate with MISO to submit all filings, including filings to FERC, required to approve the revisions to the GRE Joint Pricing Zone Agreement on a schedule that reasonably provides for an effective date for such revisions of January 1, 2012. Such cooperation is not intended to affect either Party's current or 2 future right to protest a specific provision included in such filings, including but not limited to the Parties' Attachment 0 transmission rate calculations and supporting data. 3. Joint Pricing Zone Load Reporting; Payment of Amounts Due for NITS. As of the Integration Date, GRE will report to MISO all load served by HUC. HUC agrees to comply with the MISO requirements for metering and load reporting, and will perform such functions in a manner comparable to the practices of the other parties within the GRE joint pricing zone, including but not limited to the practice of submitting gross load values that are not reduced for behind -the- meter generation. GRE will directly invoice HUC for the NITS provided by MISO to HUC. HUC agrees to make payments for NITS directly to GRE on a schedule and in a manner consistent with the schedule for payments and other settlements under the GRE Joint Pricing Zone Agreement. 4. Transmission Facilities Eligible for Joint Pricing Zone. All HUC transmission facilities included in the GRE joint pricing zone will meet the definition of Zonal Transmission Facilities, as that term is defined in the GRE Joint Pricing Zone Agreement. Generally, facilities will comply with the definition of Zonal Transmission Facilities if such facilities comply with the criteria for transmission facilities set forth in the "Midwest ISO Transmission Criteria for Review of New Member Transmission" and in a manner consistent with GRE's implementation of the Minnesota boundary guidelines, as each may be amended from time to time. Such criteria will apply to existing and future facilities owned by HUC, including the HUC -owned facilities located at the McLeod substation. S. Operations. The Parties agree to reasonably cooperate to take such actions as are necessary to integrate HUC operations, including billing and settlement arrangements, within MISO operations as of the Integration Date. GRE and HUC agree to seek the agreement of MISO and the other parties to the GRE Joint Pricing Zone Agreement for GRE to settle the HUC Schedule 9 NITS payments within the GRE Joint Pricing Zone Agreement. The Parties also agree to amend the O &M Agreement to as is reasonably necessary due to the termination of the ITA and the integration of HUC load and HUC transmission facilities within the GRE joint pricing zone. 6. MISO Ancillary Services. HUC acknowledges and agrees that as of the date that HUC commences taking NITS service from MISO, to the extent that HUC requires ancillary services to serve its load, including Schedule 1 ( "Scheduling and Dispatch ") and Schedule 2 ( "Reactive Supply and Voltage Control "), the provision of such services will be governed by the terms of the MISO Tariff and HUC will arrange for and pay for such services. 7. NERC. After the Integration Date, GRE will continue to perform NERC Transmission Operator ( "TOP ") functions on behalf of HUC as required for the transmission facilities owned by HUC and operated by GRE within the GRE Local Balancing Area, as that term is defined in the Tariff. GRE will perform such services at no cost to HUC for so long as HUC has arrangements in place to take NITS service from MISO for its entire load and HUC is paying Schedule 1 charges in 3 accordance with the MISO Tariff. With the exception of such TOP functions, HUC will be responsible for all other NERC and MRO standards requirements and reporting obligations applicable to HUC under other NERC designations. Upon the request of HUC, GRE will provide HUC with information and documents reasonably necessary for HUC to comply with its NERC and MRO obligations. GRE and HUC agree to negotiate in good faith a definitive agreement further detailing their respective obligations under this Section 7 prior to June 1, 2012. 8. Settlement Payments by GRE. In consideration for the early termination of the ITA, GRE agrees to pay to HUC the annual settlement payments indicated below. The settlement payments will become due and payable as described in this Section 8. Each annual payment will be divided into twelve (12) equal payments which will be due and payable by GRE on a monthly basis during the applicable year. GRE's obligation to make payments to HUC will commence on January 1, 2012. In the event that the Integration Date does not occur until after January 1, 2012, the monthly settlement payments will function as a credit in the calculation of the "Make Whole" payments, as described in Section 10(a), subject to the refund requirement set forth in Section 10(b). After the Integration Date, the monthly settlement payments will be credited against the net payment due and payable to HUC under the revised GRE Joint Pricing Zone Agreement. After the Integration Date, GRE's continuing obligation to make the monthly settlement payments to HUC as described herein will be subject to the conditions set forth in Section 9. In no event shall GRE be obligated to make total payments to HUC that exceed $1,000,000. Year Annual Payment 2012 $400,000 2013 $300,000 2014 $200,000 2015 $100,000 2016 $0 Total $1,000,000 9. Conditions to GRE Monthly Settlement Payment Obligation. After the Integration Date, GRE's monthly settlement payment obligation will remain in place as set forth in Section 8 for so long as HUC meets all of the following conditions: (a) the HUC transmission facilities remain within the GRE joint pricing zone and subject to the GRE Joint Pricing Zone Agreement through an appropriate agency agreement with MRES or another MISO TO, or as a consequence of HUC becoming a MISO TO, and (b) HUC remains a MISO NITS customer for the entire HUC load, and 4 (c) HUC makes timely payments to GRE for the NITS provided by MISO to HUC. In the event that HUC fails to meet any of the foregoing conditions, GRE's obligation to make monthly payments will immediately cease, and GRE will be entitled to take the actions necessary to amend the GRE Joint Pricing Zone Agreement to remove the HUC transmission facilities from the GRE joint pricing zone and eliminate the right of HUC to receive revenues in connection with such facilities. 10. Delay of Integration Date. a. In the event that the Integration Date is delayed, due to forces reasonably outside the control of HUC, past January 1, 2012, then HUC shall make "Make Whole" payments to GRE. The "Make Whole" payments will be determined as the monthly net of: (i) GRE's joint pricing zone charges to HUC for MISO NITS to serve the entire HUC load, (ii) the HUC load ratio share of the MISO Schedule 26 charges paid by GRE to MISO, (iii) recovery of the revenue requirement paid to HUC for the HUC transmission facilities, and (iv) the monthly settlement payment described in Section 8 of this Agreement. Such Make Whole payments shall be due and payable to GRE within fifteen (15) business days of receipt by HUC of an invoice for such payments. This Section 10(a) will apply only to delays of the Integration Date prior to June 1, 2012. During the period of such a delay, if any, the MISO Fee Agreement will remain in effect, and GRE will be entitled to separately bill and invoice HUC for the applicable charges under the MISO Fee Agreement. b. In the event that the Integration Date is delayed for any reason past June 1, 2012, GRE's obligations to make monthly settlement payments under this Agreement shall terminate and HUC will be obligated to refund to GRE the total amount of the monthly settlement payments that GRE has paid to HUC as part of the "Make Whole" payments described in Section 10(a) during the time period between January 1, 2012 and May 31, 2012. In the event of such a delay, HUC agrees to arrange for NITS service from MISO effective as of June 1, 2012 and the Parties further agree to negotiate in good faith revisions to the ITA and the MISO Fee Agreement consistent with HUC taking NITS service from MISO. Upon the completion of the (i) refund of the total amount of the monthly settlement payments, and the (ii) revisions to the ITA and MISO Fee Agreement, this Agreement will terminate. 11. Post - Settlement Payment Period. Upon GRE's payment to HUC of the total amount of the settlement payments described in Section 8 (subject to the conditions set forth in Section 9), HUC's obligation to make timely payments to GRE for the NITS provided by MISO to HUC will remain in effect for the remainder of the term of this Agreement. 12. Term. Unless this Agreement is terminated prior to the Integration Date as set forth in Section 10(b), this Agreement shall remain in effect after the Integration Date for a period of five (5) years and continue thereafter for so long as the HUC transmission facilities are subject to the 5 GRE Joint Pricing Zone Agreement, through an agency agreement with a MISO TO, or otherwise. Starting on the third anniversary of the Integration Date, either HUC or GRE may terminate this Agreement by providing two (2) years prior written notice of its intent to terminate to the other Party. In the event of any such termination, the Parties shall reasonably cooperate to terminate the participation of HUC's agent, or HUC, as applicable, in the GRE Joint Pricing Zone Agreement concurrently with the termination of this Agreement. Notwithstanding the foregoing, this Agreement shall automatically terminate upon any termination of the GRE Joint Pricing Zone Agreement. 13. Notices. The addresses for delivery of notices under this Agreement shall be as follows: For GRE: Jean Cassell Mayhew Manager, Transmission Strategy & Business Planning 12300 Elm Creek Boulevard Maple Grove, MN 55369 -4718 For HUC: Michael Kumm General Manager Hutchinson Municipal Utilities 225 Michigan Street, SE Hutchinson, MN 55350 -1905 14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 15. Conflicts. This Agreement is intended to be interpreted in a manner consistent with the MISO Tariff. In the event of a conflict between this Agreement and the MISO Tariff, the Parties agree to negotiate in good faith to amend this Agreement to implement as closely as reasonably possible the original intent of the Parties 16. Entire Agreement. This Agreement constitutes the final written expression of the Parties' agreement regarding the subject matter herein. All amendments must be in writing and signed by both Parties. 17. Representation of Status. Each Party hereby represents and warrants that it has the legal capacity to enter into this Agreement and that the individuals who execute this Agreement have the full and complete authority to do so. IN WITNESS THEREOF, the Parties, by their duly authorized agents, have hereunder executed this Agreement. GREAT RIVER ENERGY A Minnesota cooperative corporation By: William Kaul, Vice President, Transmission HUTCHINSON UTILITIES COMMISSION An enterprise fund of the City of Hutchinson, a Minnesota Municipal Corporation By: Michael Kumm, General Manager 7 HUTCHINSON UTILITIES COMMISSION SUMMARY OF CLOSED MEETING PROCEEDINGS GENERAL MANAGER INTERIM PERFORMANCE REVIEW SESSION August 31, 2011 On August 31, 2011, the Hutchinson Utilities Commission went into closed session on a motion made by Dwight Bordson and seconded by Paul Nordin, at 2:05 p.m. to conduct the interim performance review for the General Manager, Michael Kumm. Individuals present included Commissioners Robert Hantge, Paul Nordin, Dwight Bordson, and Don Walser. Commissioner absent was Craig Lenz. Others present were Michael Kumm, General Manager and Marc Sebora, City Attorney. The Hutchinson Utilities Commissioners reviewed with Mr. Kumm his performance for the period of January 1, 2011, to the present. The Commissioners referred to previous reviews and reviewed Mr. Kumm's benefit package. The Commissioners noted that past reports have been very favorable of Mr. Kumm. Mr. Kumm performs many job duties that other general managers in the private industry do not or are not responsible for. Mr. Kumm was not rated on specific competencies or categories due to this being an interim review. The Commissioners also provided feedback on the review process and concurred that a new model of review should be initiated. This model is considered a "360" program which allows for subordinate input and comments on a supervisor's performance. This type of model is used frequently in private industry. Paul Nordin and Dwight Bordson will be working on this initiative for Mr. Kumm's regular review to be held in November /December of 2011. Commissioner Hantge commented on issues pertaining to the funding of Mr. Kumm's salary. Mr. Kumm's salary is reaching the state - mandated salary cap for government employees. The Commissioners discussed various ways to handle this matter. Motion by Bordson, second by Nordin, to recess the closed meeting to provide more time to review the performance review and to discuss Mr. Kumm's competencies. HUTCHINSON UTILITIES COMMISSION SUMMARY OF CLOSED MEETING PROCEEDINGS GENERAL MANAGER INTERIM PERFORMANCE REVIEW SESSION October 26, 2011 On October 26, 2011, the Hutchinson Utilities Commission went into a closed session on a motion made by Craig Lenz and seconded by Dwight Bordson, at 2:24 p.m. to continue to conduct the continued interim performance review for the General Manager, Michael Kumm. Individuals present included Commissioners Robert Hantge, Dwight Bordson, Craig Lenz and Don Walser. Commissioner absent was Paul Nordin. Others present were Michael Kumm, General Manager and Marc Sebora, City Attorney. The Commissioners continued to review with Mr. Kumm his performance since January 1, 2011. Items of discussion and review included the direction of the organization, Mr. Kumm's excellent performance in his job achievements and the generation program. The Commissioners concurred on their satisfaction with Mr. Kumm's accomplishments so far this year. A brief discussion was held on Mr. Kumm's salary cap and various ways to handle any increases to his salary based on his exceptional performance. A formal annual review will be given to Mr. Kumm in November or December of 2011. Motion by Bordson, second by Lenz, to adjourn. Dwight Bordson, Secretary ATTEST: ei ant e, President