05-30-2012 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, May 30, 2012
Call to order — 3:00 p.m.
Vice President Lenz called the meeting to order. Members present: Vice President
Craig Lenz; Secretary Leon Johnson; Commissioner Monty Morrow; Commissioner
Anthony Hanson; Attorney Marc Sebora; General Manager Michael Kumm. Member
absent: President Dwight Bordson.
Guests: Dave Berg and Kevin Favero (SAIC); Jeremy Carter (City); Miles Seppelt (City);
Mayor Steve Cook.
Agenda item #3: Approve Financial Statements /Budget Year to Date was moved to
agenda # 4; and
Agenda item #4: Presentation by SAIC (Dave Berg) — Rate Study was moved to agenda
item #3.
1. Approve Minutes of April 25, 2012 Regular Meeting
The minutes of the April 25, 2012 regular meeting were reviewed. A motion was
made by Secretary Johnson, seconded by Commissioner Morrow to approve the
minutes. Motion was unanimously carried.
2. Ratify Payment of Bills for April 2012
The April 2012 payables were discussed. A motion was made by Secretary
Johnson, seconded by Commissioner Hanson to ratify the payment of bills in the
amount of $4,193,701.37 (detailed listing in payables book). Motion was
unanimously carried.
3. Presentation by SAIC (Dave Berg) - Rate Study
Dave Berg and Kevin Favero of SAIC were welcomed to the meeting. Mr. Berg
gave a presentation on the results of the May 2012 Electric and Gas Cost -of-
Service and Unbundled Rate Study. Mr. Berg stated the recommended changes
are minimal and HUC is on solid financial footing. HUC may want to consider rate
design changes; however, Mr. Berg does not recommend an overall rate increase
at this time. Existing rates look favorable through 2016.
4. Approve Financial Statements /Budget Year to Date
GM Kumm presented the April 2012 financial statements /budget year -to -date. After
discussion, a motion was made by Secretary Johnson, seconded by Commissioner
Hanson to approve the financial statements /budget year -to -date. Motion was
unanimously carried.
5. Discuss Angel Network /Incubator Assistance /Future EDA Projects
Commissioner Hanson stated it was requested at the Joint HUC /City meeting to
add this discussion item to the agenda. Miles Seppelt from City of Hutchinson was
welcomed. Mr. Seppelt requested HUC's consideration to partner with EDA in
1
future projects such as: the Angel Network, an industrial spec building /small
business incubator and the downtown revitalization plan #2 which is an update and
refinement project to promote economic development.
6. Discuss City Administrator /Ex- Officio HUC Board Member
GM Kumm stated this agenda item is a result of the HUC /City Joint meeting to
further discuss the Mayor's request to appoint the City Administrator as an ex-
officio board member on the Commission. In the Joint meeting, Mr. Kumm had
noted per Commission President Bordson that all HUC meetings are open and
public for anyone to attend. The Board had then unanimously agreed it was not
necessary to appoint the City Administrator as an ex- officio. Mayor Cook noted he
had since spoken with President Bordson who said he had no opposition to an ex-
officio position as a non - voting member. Attorney Sebora mentioned there would
need to be a change to the City Charter. Mayor Cook suggested removing Council
member verbiage and replacing with ex- officio verbiage as a non - voting member.
Mayor Cook said it would then be presented to the Charter Commission. The
Board would like to discuss this further upon President Bordson's return and also
meet with the Charter Commission.
7. Appoint a Commissioner to Committee for Analyzing the Transfer Formula to
City
Mayor Cook stated this agenda item is also a result of the HUC /City Joint meeting
to appoint Commission members to the City Council approved committee which
includes Jeremy Carter, Council Member Chad Czmowski and Mayor Steve Cook,
to review the transfer formula to City. Mayor Cook would like to see if the transfer
could be increased. Vice President Lenz noted a PILOT (Payment in Lieu of
Taxes) committee was formed in 2008. HUC will need to absolve that committee at
the next regular commission meeting. A motion was made by Commissioner
Hanson, seconded by Secretary Johnson to appoint Commissioner Morrow and
President Dwight Bordson to the transfer formula committee. Another motion was
made to modify the original motion to add GM Kumm to the transfer formula
committee. Motions were unanimously carried.
8. Discuss Credit Card Payments
GM Kumm discussed information on past years' credit card charges and the credit
card fees HUC incurs to accept credit card payments as a convenience for HUC
customers. The credit card fee amounts have increased substantially over the
years due to the majority of the fees coming from businesses charging their bills.
Staff will research options to help reduce the amount HUC incurs and present at
the next regular commission meeting.
9. Review Policies and Requirements Booklet
GM Kumm presented the policies and requirements booklet, sections: meter
testing - natural gas; natural gas service work; and locating customer's underground
utilities - natural gas. This is part of HUC's policy review and no changes are
requested at this time.
2
10. Approve Changes to Exempt and Non - Exempt Handbooks
GM Kumm presented changes to the exempt and non - exempt handbooks,
sections: Section 6 — health and safety; accidents and injuries; unsafe conditions
or practices; and employee right -to -know. The changes to `Section 6 — health and
safety' and `accidents and injuries' were to clean up verbiage and to provide clarity
on what we currently practice. A motion was made by Commissioner Hanson,
seconded by Secretary Johnson to approve the changes to `Section 6 — health and
safety' and `accidents and injuries'. Motion was unanimously carried. (Changes
attached.) No changes were recommended for section `unsafe conditions or
practices'. The changes recommended for section `employee right to know' were to
clean up verbiage and the Board recommended changing the word `should' to
`shall' in the last sentence. A motion was made by Commissioner Morrow,
seconded by Commissioner Hanson to approve the changes to section ` employee
right to know'. Motion was unanimously carried. (Changes attached.)
11. Approve Bid Tabulation for Units 3 & 4 RICE Rule Compliance Modifications
Steve Lancaster presented the bid tabulation for units 3 and 4 RICE rule
compliance modifications to make units 3 and 4 compliant with the RICE ruling. If
this work is not done these units would be shut down. This was a budgeted item for
$450,000. After discussion, a motion was made by Secretary Johnson, seconded
by Commissioner Hanson to approve the bid tabulation for units 3 and 4 RICE rule
compliance modifications from Farabee Mechanical Inc. for $270,980. Motion was
unanimously carried. (Bid tabulation attached.)
12. Approve Requisition #4884 for Casing Bypass Project
John Webster presented requisition #4884 for casing bypass project. GM Kumm
mentioned these are the last three casings in the distribution system and the final
part of the 19 year project. After discussion, a motion was made by Commissioner
Hanson, seconded by Commissioner Morrow to approve requisition #4884 for
casing bypass project from Northern Pipeline Construction Co for $73,535. Motion
was unanimously carried. (Requisition attached.)
13. Division Reports
Electric — Steve Lancaster
• New engine on a rail up from Houston.
• Mandatory pre -bid site visit last week for plant 1 building modifications for
mechanical and electrical.
• New switchgear in place.
Business — Jan Sifferath
• New system controller started today — Larry Mason.
• Hiring a summer temporary employee for line crew.
• Jon Guthmiller working on CIP report to send to the Department of Commerce
• Working on researching credit card payment issue.
3
Gas — John Webster
• Received United Farmers Cooperative's (United Natural Gas LLC) resolution
from their Board to design and build skids for their interconnect system to only
serve their grain facility.
Finance — Jared Martig
• Sent out bank requests for proposals last week.
• Will receive bond refinancing results tomorrow.
GM Kumm will be giving a presentation on power supply planning to City Council
members at City Center tomorrow.
14. Legal Update
Nothing to report
Unfinished Business
• Discuss Potential Capacity Sale
GM Kumm and Steve Lancaster are continuing to work on the potential
capacity sale.
New Business
• Discuss Patent License Agreement for Statistical Model in System Control
Discussion was held regarding a patent for the statistical model and software
used in system control.
• GM Kumm presented a leadership review summary comparing 2005 to 2010
results of a 360 degree feedback survey anonymously completed by all HUC
employees anonymously. Summary shows employees overall are satisfied.
There being no further business, a motion was made by Commissioner Hanson,
seconded by Commissioner Morrow to adjourn the meeting at 5:45 p.m. Motion was
unanimously carried.
ATTEST:
Dwight Bordson, President
12
Leon Johnson, Secretary
MINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, May 30, 2012
Call to order — 3:00 p.m.
Vice President Lenz called the meeting to order. Members present: Vice President
Craig Lenz; Secretary Leon Johnson; Commissioner Monty Morrow; Commissioner
Anthony Hanson; Attorney Marc Sebora; General Manager Michael Kumm. Member
absent: President Dwight Bordson.
Guests: Dave Berg and Kevin Favero (SAIC); Jeremy Carter (City); Miles Seppelt (City);
Mayor Steve Cook.
Agenda item #3: Approve Financial Statements /Budget Year to Date was moved to
agenda # 4; and
Agenda item #4: Presentation by SAIC (Dave Berg) — Rate Study was moved to agenda
item #3.
1. Approve Minutes of April 25, 2012 Regular Meeting
The minutes of the April 25, 2012 regular meeting were reviewed. A motion was
made by Secretary Johnson, seconded by Commissioner Morrow to approve the
minutes. Motion was unanimously carried.
2. Ratify Payment of Bills for April 2012
The April 2012 payables were discussed. A motion was made by Secretary
Johnson, seconded by Commissioner Hanson to ratify the payment of bills in the
amount of $4,193,701.37 (detailed listing in payables book). Motion was
unanimously carried.
3. Presentation by SAIC (Dave Berg) - Rate Study
Dave Berg and Kevin Favero of SAIC were welcomed to the meeting. Mr. Berg
gave a presentation on the results of the May 2012 Electric and Gas Cost -of-
Service and Unbundled Rate Study. Mr. Berg stated the recommended changes
are minimal and HUC is on solid financial footing. HUC may want to consider rate
design changes; however, Mr. Berg does not recommend an overall rate increase
at this time. Existing rates look favorable through 2016.
4. Approve Financial Statements /Budget Year to Date
GM Kumm presented the April 2012 financial statements /budget year -to -date. After
discussion, a motion was made by Secretary Johnson, seconded by Commissioner
Hanson to approve the financial statements /budget year -to -date. Motion was
unanimously carried.
5. Discuss Angel Network /Incubator Assistance /Future EDA Projects
Commissioner Hanson stated it was requested at the Joint HUC /City meeting to
add this discussion item to the agenda. Miles Seppelt from City of Hutchinson was
welcomed. Mr. Seppelt requested HUC's consideration to partner with EDA in
1
future projects such as: the Angel Network, an industrial spec building /small
business incubator and the downtown revitalization plan #2 which is an update and
refinement project to promote economic development.
6. Discuss City Administrator /Ex- Officio HUC Board Member
GM Kumm stated this agenda item is a result of the HUC /City Joint meeting to
further discuss the Mayor's request to appoint the City Administrator as an ex-
officio board member on the Commission. In the Joint meeting, Mr. Kumm had
noted per Commission President Bordson that all HUC meetings are open and
public for anyone to attend. The Board had then unanimously agreed it was not
necessary to appoint the City Administrator as an ex- officio. Mayor Cook noted he
had since spoken with President Bordson who said he had no opposition to an ex-
officio position as a non - voting member. Attorney Sebora mentioned there would
need to be a change to the City Charter. Mayor Cook suggested removing Council
member verbiage and replacing with ex- officio verbiage as a non - voting member.
Mayor Cook said it would then be presented to the Charter Commission. The
Board would like to discuss this further upon President Bordson's return and also
meet with the Charter Commission.
7. Appoint a Commissioner to Committee for Analyzing the Transfer Formula to
City
Mayor Cook stated this agenda item is also a result of the HUC /City Joint meeting
to appoint Commission members to the City Council approved committee which
includes Jeremy Carter, Council Member Chad Czmowski and Mayor Steve Cook,
to review the transfer formula to City. Mayor Cook would like to see if the transfer
could be increased. Vice President Lenz noted a PILOT (Payment in Lieu of
Taxes) committee was formed in 2008. HUC will need to absolve that committee at
the next regular commission meeting. A motion was made by Commissioner
Hanson, seconded by Secretary Johnson to appoint Commissioner Morrow and
President Dwight Bordson to the transfer formula committee. Another motion was
made to modify the original motion to add GM Kumm to the transfer formula
committee. Motions were unanimously carried.
8. Discuss Credit Card Payments
GM Kumm discussed information on past years' credit card charges and the credit
card fees HUC incurs to accept credit card payments as a convenience for HUC
customers. The credit card fee amounts have increased substantially over the
years due to the majority of the fees coming from businesses charging their bills.
Staff will research options to help reduce the amount HUC incurs and present at
the next regular commission meeting.
9. Review Policies and Requirements Booklet
GM Kumm presented the policies and requirements booklet, sections: meter
testing - natural gas; natural gas service work; and locating customer's underground
utilities - natural gas. This is part of HUC's policy review and no changes are
requested at this time.
K
10. Approve Changes to Exempt and Non - Exempt Handbooks
GM Kumm presented changes to the exempt and non - exempt handbooks,
sections: Section 6 — health and safety; accidents and injuries; unsafe conditions
or practices; and employee right -to -know. The changes to 'Section 6 — health and
safety' and 'accidents and injuries' were to clean up verbiage and to provide clarity
on what we currently practice. A motion was made by Commissioner Hanson,
seconded by Secretary Johnson to approve the changes to 'Section 6 — health and
safety' and 'accidents and injuries'. Motion was unanimously carried. (Changes
attached.) No changes were recommended for section 'unsafe conditions or
practices'. The changes recommended for section 'employee right to know' were to
clean up verbiage and the Board recommended changing the word 'should' to
'shall' in the last sentence. A motion was made by Commissioner Morrow,
seconded by Commissioner Hanson to approve the changes to section ' employee
right to know'. Motion was unanimously carried. (Changes attached.)
11. Approve Bid Tabulation for Units 3 & 4 RICE Rule Compliance Modifications
Steve Lancaster presented the bid tabulation for units 3 and 4 RICE rule
compliance modifications to make units 3 and 4 compliant with the RICE ruling. If
this work is not done these units would be shut down. This was a budgeted item for
$450,000. After discussion, a motion was made by Secretary Johnson, seconded
by Commissioner Hanson to approve the bid tabulation for units 3 and 4 RICE rule
compliance modifications from Farabee Mechanical Inc. for $270,980. Motion was
unanimously carried. (Bid tabulation attached.)
12. Approve Requisition #4884 for Casing Bypass Project
John Webster presented requisition #4884 for casing bypass project. GM Kumm
mentioned these are the last three casings in the distribution system and the final
part of the 19 year project. After discussion, a motion was made by Commissioner
Hanson, seconded by Commissioner Morrow to approve requisition #4884 for
casing bypass project from Northern Pipeline Construction Co for $73,535. Motion
was unanimously carried. (Requisition attached.)
13. Division Reports
Electric — Steve Lancaster
• New engine on a rail up from Houston.
• Mandatory pre -bid site visit last week for plant 1 building modifications for
mechanical and electrical.
• New switchgear in place.
Business — Jan Sifferath
• New system controller started today — Larry Mason.
• Hiring a summer temporary employee for line crew.
• Jon Guthmiller working on CIP report to send to the Department of Commerce
• Working on researching credit card payment issue.
3
Gas — John Webster
• Received United Farmers Cooperative's (United Natural Gas LLC) resolution
from their Board to design and build skids for their interconnect system to only
serve their grain facility.
Finance — Jared Martig
• Sent out bank requests for proposals last week.
• Will receive bond refinancing results tomorrow.
GM Kumm will be giving a presentation on power supply planning to City Council
members at City Center tomorrow.
14. Legal Update
Nothing to report
Unfinished Business
• Discuss Potential Capacity Sale
GM Kumm and Steve Lancaster are continuing to work on the potential
capacity sale.
New Business
• Discuss Patent License Agreement for Statistical Model in System Control
Discussion was held regarding a patent for the statistical model and software
used in system control.
• GM Kumm presented a leadership review summary comparing 2005 to 2010
results of a 360 degree feedback survey anonymously completed by all HUC
employees anonymously. Summary shows employees overall are satisfied.
There being no further business, a motion was made by Commissioner Hanson,
seconded by Commissioner Morrow to adjourn the meeting at 5:45 p.m. Motion was
unanimously carried.
L on Johnson, Secretary
ATTEST:
4Dt ord n, President
EXEMPT
SECTION 6 - HEALTH AND SAFETY
The Util+tyL UC is very concerned about the safety of its employees and the public the
Wt+l+ty! UC serves. All employees are required to follow all Utilit y-HUC safety rules and
make the safety of themselves, their co- workers, and the public a priority. To encourage
a safe workplace, the Commission has adopted the APPA – Utilities Safety Handbook.
All non - exempt employees are required to read the APPA safety handbook. Compliance
with the APPA is "mandatory and is considered a requirement for employment ". (Pp. 20
and 23 APPA Safety Handbook).
ACCIDENTS AND INJURIES
Employees must immediately report to a Director, Manager or Supervisor all accidents
and injuries that occur during the course of employment with the kAi 4t UC. The
Supervisor must fill out and sign an accident report. See Q, 1°�TCustomer /Human
Relations Manager for form.
Pursuant to Minnesota Law, the UltesHUC, on GenjunGtion with the Gity ef HutGhinseR,
have has established a je+r- labor- management safety committee that investigates or
reviews all accidents to identify causes of the accidents and suggest ways to prevent
reoccurrence of the accident. The safety committee may request to interview any
employee involved in an accident or any employee who may have knowledge of an
accident. All employees are required to cooperate with the safety committee.
EMPLOYEE RIGHT -TO -KNOW
Minnesota's Employee Right -to -Know law requires the - Ut4ityt UC to inform employees
when they may be exposed to hazardous substances, harmful physical agents, or
infectious agents. The UtilityHUC has adopted a written Employee Right -to -Know
program. The -U 4i#3FHUC has evaluated and reevaluates the work sites to determine the
presence of hazardous substances. Employees should shall become familiar with the
location of MSDS sheets in their work area.
NON - EXEMPT
SECTION 6 — HEALTH AND SAFETY
The Ut*!*tyHUC is very concerned about the safety of its employees and the public the
Util+tyHUC serves. All employees are required to follow all Ut+l+t}-HUC safety rules and
make the safety of themselves, their co- workers, and the public a priority. To encourage
a safe workplace, the Commission has adopted the APPA — Utilities Safety Handbook.
All non - exempt employees are required to read the APPA safety handbook. Compliance
with the APPA is "mandatory and is considered a requirement for employment ". (Pp. 20
and 23 APPA Safety Handbook).
ACCIDENTS AND INJURIES
Employees must immediately report to a Director, Manager or Supervisor all accidents
and injuries that occur during the course of employment with the UtilitjfHUC. The
Supervisor must fill out and sign an accident report. See R� ��iRess Customer /Human
Relations Manager for form.
Pursuant to Minnesota Law, the lultoletee6HUC , ' ,
have has established a jeiRt labor- management safety committee that investigates or
reviews all accidents to identify causes of the accidents and suggest ways to prevent
reoccurrence of the accident. The safety committee may request to interview any
employee involved in an accident or any employee who may have knowledge of an
accident. All employees are required to cooperate with the safety committee.
EMPLOYEE RIGHT -TO -KNOW
Minnesota's Employee Right -to -Know law requires the -U# Wyt UC to inform employees
when they may be exposed to hazardous substances, harmful physical agents, or
infectious agents. The tpHUC has adopted a written Employee Right -to -Know
program. The Utilit HUC has evaluated and reevaluates the work sites to determine the
presence of hazardous substances. Employees should become familiar with the
location of MSDS sheets in their work area.
Uits 3 &4 RICE Rule Modifications
Company Name Bid Price
Bond
4�
Fairbanks Morse Engine
`� I �•0v
Exline Inc.
Peaker Services, Inc.
Energy Systems Midwest, Inc.
P S
Farabee Mechanical Inc.
Opened By: Witnesses B
`j
Recommend: Farabee Mechanical Inc.
Date
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