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11-25-1985 HUCM& cl . 8-9- Regular Meeting November 25, 1985 All Commissioners were present; also present were Mgr. Alexander, Counsel Peterson and Ruth Hakel. President Daggett called the meeting to order at 1:00 p.m., and at this time welcomed the following Circle Pines board members: Chairman Andrew Gibas, Jon Thiel, Marlene Rasmussen, Wayne Dannheim and City Administrator Jim Keinath. After reviewing the October 28, 1985 minutes, a motion was made by Commissioner Lyke, seconded by Commissioner Beatty to accept the minutes as presented. Motion was unanimously carried. A general discussion session was held with the Circle Pines Board. Ivan Larson was called upon to review and explain Exhibit XI representing peak shaving plant operational charges. Motion was made by Commissioner Lyke, seconded by Commissioner Beatty to enter into an agreement (Exhibit XI) with Circle Pines for the period November 1, 1985 to November 1, 1986. Motion was unanimously carried. (Executed copy on file.) At this time Circle Pines members excused themselves from the meeting. The October electric and gas payables were discussed. Motion was made by Commissioner Lyke, seconded by Commissioner Beatty to accept the payables as listed. Motion was unanimously carried. Ruth Hakel reported on the October financial statements. Motion was made by Commissioner Beatty, seconded by Commissioner Lyke to accept both statements. Motion was unanimously carried. N:gr. Alexander presented quotes received for a 1/2 ton truck (1977 1/2 ton GMC trade -in included): 1. Myron Wigen Chevrolet Co. $10,400.00 2. Swanke Motors, Inc. 9,642.96 3. Plowman's, Inc. 9,098.00 4. Myron Wigen Chevrolet Co. 9,000.00 (not accepted - did not meet specifications) Motion was made by Commissioner Lyke, seconded by Commissioner Beatty to accept the low bid belonging to Plowman's, Inc. in the amount of $9,G98.00. Motion was unanimously carried. President Daggett reviewed the changes requested by the International Brotherhood of Electrical Workers. Changes Requested 1. We propose a one (1) year agreement. 2. We propose a substantial increase in wages. 3. Article XXV amend to include Dr. Martin Luther King's birthday as an additional paid holiday. 4. Article XVIII we propose to increase the shift differential annually by the same percentages as the annual wage increase. 5. If the contract is not settled by January 1, 1986 all pay increases shall be retroactive to January 1, 1986. Following Were Offered Agreed upon one (1) year contract. Increase of 3.250. No additional holiday pay. No shift differential. Agreed. Motion was made by Commissioner Lyke, seconded by Commissioner Beatty to accept the changes, and after receiving formal notification of acceptance from the International Brotherhood of Electrical Workers, authorize proper signatures to the agreement as outlined for the year 1986. Motion was unanimously carried. Mgr. Alexander called upon Ivan Larson to report on a meeting held with Don Swanson, David Schmidt (Associated Consultants, Inc.), Tony Rude and Glen Skarbakka (United Power Association) regarding Integrated Transmission System. Attached to the face of these minutes is data relative to the discussion. Additional information will be available for the December meeting, also f_ �ures on the Nelson River Project (Project to be completed in 1996). Old Business: Mgr. Alexander requested more time to evaluate the reorganization of duties. FJ 1 1 1 A&ASSOCIATED CONSULTANTS REGISTERED PROFESSIONAL ENGINEERS 3131 FERNBROOK LANE NORTH MINNEAPOLIS, MINNESOTA 55441 612/ 559-5511 Hutchinson Utilities Hutchinson, MN 55350 Attn: Rufus Alexander, Mgr. Dear Alex: 0Ci j 51 5 October 11, 1985 REF: UPA Integrated Transmission System As per our phone discussion and Tony Rude's latest figures, Hutchinson will have to pay $200,000 more for ITS participation than shown -in our August report. This -is because your demand growth has been greater than the other members. As your load increases, your KWH requirements will also increase and make for greater wheeling cost savings. Attached is a duplication of page 17 from our report, on which we have added another column to indicate your net savings, with the $4,100,000 investment. This is based on steady energy requirements, while growth will make for greater savings. Tony would like to meet with us on this, so please let me know when and if you would like such a meeting. DES /jc Attachment Very truly yours, ASSOCIATED CONSULTANTS, INC. /- �(- (?c) Donald E. Swanson, P.E. - 17 - To eliminate wheeling costs on 10 megawatts of participation power would require an estimated $2,500,000 investment or $3,900,000 for all power. Ten year savings for both options including debt service on a ten year 9% bond issue would be as follows: Bonds Issue $2,500,000 $3,900,000 Avoided Wheeling Costs 6,604,000 9,905,000 9, 90si°©�' Debt Service (9 % -10 Year) 3,933,000 6,135,000 (oly50/'" Gross Savings Over Wheeling 2,671,000 3,770,000 3��155,��'C' Operating & Maint. 1,000,000 1,500,000 1,5�° °l am Net Savings 1,671,000 2,270,000 In addition to financial savings, both scenarios would create the following advantages. 1. Greater reliability of transmission service. 2. Better quality of incoming power (voltage, surges etc.). The 100% equity investment, while giving the above advantages, would also allow the following, probably even more important, features. 1. Complete use of UPA's transmission system with possibility of purchase of wholesale power from other utilities such as UPA, CPA, NSP, SMMPA, Minnesota Power, Willmar and others. 2. Possibility of sale of excess HUC capacity, with no transmission charge, to others connected to UPA's Transmission System. 3. Additional transmission cost savings on growth energy since the above tabulated savings are based on present energy use. 4. After ten years with debt amortized, annual cash flow would be increased by $600,000 (debt service), and continued use of the ITS would be available. - 17 - Development of the System Control Rate for United Power Association The System Control Pate represents the average cost for United Power Association (tTPA) to provide system control functions required in the operation of the transmission system. UPA recalculates this rate annually. The 1985 rate is .568 mills /kWh and is described here to illustrate the methodology, (Attachment A, p.2) The rate is calculated by dividing the appropriate system control costs by the total energy transmitted over the transmission system. The total energy consists of direct sales to UPA members, sales to municipals, certain SMMPA loads, a share of Dickinson station service, CPA's Lake Jenny load, WAPA allocations, Minnesota Power sales, a portion of Minnesota Power purchases, and a portion of Otter Tail Power sales. These amount to 2,831,489 VR,]h budgeted for 1985, (Attachment A, p.l). There are two categories of costs associated with the system control function. An allocation of variable expenses for transmission system control is included along with payments to Minnesota Power for transmission system control. The subtotal for this first category is $508,956. Only transmission related system operation expenses are included in this amount, (Attachment A,p.3). The second cost category includes allocations of variable and fixed expenses for the SCADA and communications systems, and an allocation of administrative and general expenses. These amount to $1,097,517, (Attachment A, p.4). l 1985 BUDGET MWH BASE UPA MN Transmission Direct Sales to Members 2,282,639 MWh {Includes Load Management) Sales to Municipals /Others 299,840 SMMPA 121,660 CPA- Dickinson Station Service (567) 8,876 CPA -Lake Jenny 4,540 WAPA: City of Kandiyohi 3,140 Willmar State Hospital 3,570 Itasca - Mantrap 24,706 Kandiyohi 30,268 Willmar Municipal 30,000 Minnesota Power (Sales) 15,500 Ottertail (507) 4,850 Minnesota Power (Purchases for Resale) 11900 2,831,489 MWh RH /sg 1/21185 ATTACHMENT A Page 1 of 6 1 1 1 1985 DISPATCH RATE (BASED ON THE 1985 OPERATING BUDGET) Transmission Dispatch Rate Supervisory /Communications Rate RH /sg 1/21/85 .180 mills /kWh .388 mills /kWh 1985 Dispatch Rate .568 mills /kWh ATTACHMENT A Pape 2 of 6 ATTACHMENT A Page 3 of 6 ' 1985 BUDGET TRANSMISSION DISPATCH RATE V a r--- b l e Direct: Minnesota 561 197,443 x .85 = $167,827 Minnesota Power 565 161,933 Indirect: GSA Allocation Fixed Indirect: GSA Allocation 1985 Transmission Dispptch Rate RH /s9 1/21/85 1 119,851 59,345 508,956 2,831,489 .180 mills /kWh 1 1 1 1985 BUDGET SUPERVISORY /Coma- MNICATIONS RATE (INCLUDING MICROWAVE) Transmission Generation Variable Communications Expense Indirect: GSA Allocation Fixed Direct: Depreciation Interest Indirect: GSA Allocation RH /sg 1/21/85 (.87) (.13) ATTACHMENT A Pabe 4 of 6 259,701 x .87 = $ 225,940 518,039 x .67 = 249,784 x .87 = M14'H - 136,313 450,694 217,312 67,758 $1,097,517 2,831,489 .388 miIIs/k11h �O O N ►n r f"1 N � t�-ra r- n %D 1.1 •� cC k+ - N C - ao cj 00 V O ^ u1 r-i -4 •--� I c•'1 O H IC w - _ O0 00 N ro d C) � > r a 14 rl Ln - n s O� O w c� O 0 s c�► r+ p 0 re H 00 '4 u) ►, M ►r) Cl) C %0 00 H ' c0 a� ,-1 t!'1 en r•'1 p p ►! 1 N r--1 p Q� d r1 1-4 N - �y Ir O34.) m Ln N � x � �+ �4 a HO. � %D Lr) s CV) N .rl CC +j -4 00 r4 -4 r-i t` O H IC w - _ O0 00 N � > r a 14 - - aa w u) En 00 H a� ,-1 p p Co 00 p N N p0 O34.) m C31, O V? N pp 00 ON }a d O m ►!1 N -T e d r•-1 r-1 a Ln %D Ln u, 1 1 C 1 CO "4 .-1 C .r4 Aj al d cc y 0 a O L+ C �4 O •rl L1 � O N U O Ln N � x � �+ �4 1 MN OEM Labor ND O&M Labor 1985 BUDGET TRANSMISSION LOAD DISPATCH RATE INDIRECT FIXED COSTS General Plant Fixed Costs Insurance Acct. 924000 924130 925000 Subtotal MN Factor MN Portion S $3,461,560 2,965,149 $6,426,709 of Total 53.9% 46.17 100.0% (No State Designation) $200,000 74,400 55,500 $329,900 Y s14 oI/ MN General Plant Fixed Costs Depreciation Interest Taxes Total MN General Plant Fixed RH /sg 1/17/85 1 $177,816 $ 507,100 404,520 229,336 $1,318,772 ATTACHMENT A Pahe 6 of 6 The following motion was taken from the December 27, 1984 minutes: A motion was made by Commissioner Lyke, seconded by Commissioner Beatty to extend to the Hutchinson Utilities retired employees the right to retain medical group insurance until the age of 70 years. The retired employee shall pay all premiums and deductibles. Hutchinson Utilities has the right to alter, change or discontinue any or all medical insurance that affects the retired employee with a 30 day notice. They also have the right to cancel the above insurance if there is a direct or indirect cost to the Utility Commission. Motion was unanimously carried. A motion was made by Commissioner Beatty, seconded by Commissioner Lyke to amend the motion to the following: At no time will Hutchinson Utilities Commission allow more than ten (10) retired employees in its Medical Group Insurance; this benefit will be extended to those employees having ten (10) years of service with the Hutchinson Utilities Commission. Motion was unanimously carried. New Business: A _local businessman inquired of Commissioner Beatty if the new underground service, recently installed in the alley west of Main Street, would be adequate to take care of future loads. Mgr. Alexander asked to give a report at the December meeting. The following are October payables: 1 .7 3-n OCTOBER PAYABLES - ELECTRIC Petty Cash Postage 700.00 Petty Cash Meter refunds & interest 648.22 Neal Karels 20.40 Finnish Line Sports 105.50 Jerry Grund i 122.73 Clara Prieve 12.90 Andy Drummer 6.97 Gary Echert 7.68 Keith Larson 3.40 Keith Meronuck 12.20 Scott Rohr 5.19 James Bakken 12.30 Tim Archbold 6.92 Wanda Woller Refund - overpayment 26.12 Frank Dillion Refund - overpayment 146.17 Bruce Kopesky Refund - overpayment 26.75 MMUA Registration - fall conf. 150.00 First National Bank Payroll deposit plan 1,779.07 First State Federal Payroll deposit plan 2,501.46 Citizens Bank & Trust Co. Payroll deposit plan 5,311.53 State Treasurer PERA withheld & expense 3,792.33 State Treasurer FICA withheld & expense 3,896.86 Citizens Bank & Trust Co. Federal tax withheld 4,587.85 Woodmen Accident & Life Putnam Fund Dist. Medical insurance Employee deferred comp withheld 5,455.02 25.00 ICMA Retirement Employee deferred comp withheld 1,050.00 Continental Assurance Co. Life insurance 47.30 Continental Assurance Co. Life insurance 200.09 American Family Life Ins. Employee insurance withheld 128.40 American Payment Centers Rent 64.00 Apollo Piping Supply Plant supplies 6.83 Citizens Bank & Trust Co. Deposit to Contribution Account 25,000.00 Citizens Bank & Trust Co. Deposit to Bond & Interest Acct. 55,570.83 City of Hutchinson Insurance premium 8,373.00 Colonial Life & Accident Accident insurance withheld 196.20 Graybar Electric Co. Inventory 4,110.00 H & C Electric Supply Inventory 382.80 Hazard Control, Inc. Plant supplies 48.97 Hutchinson Utilities Employee utility bills withheld 700.00 IBM Corp. Lease, maint. service 987.50 Midwest Gas Association Employee insurance withheld 69.34 Millerbernd Mfg. Mdse. 303.40 MN Electric Supply Co. Plant supplies 5.10 Natural Gas Division Due to Natural Gas Division 245,658.11 Accounts Receivable Petersen- Wisdorf, Inc. Inventory 1,725.18 Richard Peterson Legal retainer 400.00 Petty Cash Postage 121.34 State of MN -Dept. of Labor Boiler inspection fees 80.00 Sterling Electric Co. Plant supplies 42.62 U.S. Postal Service Postage 110.00 OCTOBER - ELECTRIC (cone) W E S C O Zep Mfg. Co. Putnam Fund Dist. ICMA Retirement Corp. MN Electric Supply Co. Ty's Metal Finishing Debbie Zieman Quast Transfer Hall's Safety Equip. Paper Service Company MMUA City of Hutchinson McMaster -Carr Supply Curtis Erickson MN Environmental Quality MN Dept. of Emp. Relation Erickson Oil Products Zee Medical Service Citizens Bank & Trust Co. Commissioner of Revenue State Treasurer State Treasurer Firstate Federal Savings First National Bank Citizens Bank & Trust Co. Graybar Electric MN Electric Supply Co. Bradley Rasmussen R. H. Alexander H & C Electric Supply MN Electric Supply Graybar Electric Co. Rockite Silo Border States Electric Eugene Daggett Hutchinson Telephone Co. Kemske Paper Co. Electronic Center Central MN Communication Petty Cash H & C Electric Supply General Trading Co. Quast Transfer MN Benefit Assn. Abbott Electronics Advance Shoring Co. Albrecht Oil Co. Allen Office Products American Linen Supply Anderson Chemical Co. Inventory Plant supplies Employee deferred comp Employee deferred comp Mdse. Plant supplies Meter refund Freight Mdse. Plant supplies Registration - workshop Insurance premium Equip. maint. Meter refund & interest BD Assessment -power plant s Registration Gas Plant supplies Federal tax withheld State tax withheld FICA withheld & expense PERA withheld & expense Payroll deposit plan Payroll deposit plan Payroll deposit plan Inventory Inventory, mdse. Underground expense Meeting expense Inventory, tools, suppl Underground line expens Inventory, plant suppli Trnasformer expense Inventory, mdse., plant Meeting expense Telephone Office supplies Radio maint. Radio maint. Meter refunds & int., o withheld withheld siting ies e es supplies 370.80 605.00 25.00 1,050.00 14.98 22.50 100.00 36.00 89.55 117.81 250.00 26,692.00 80.89 10.25 27.08 20.00 89.75 158.55 4,582.48 3,976.48 3,957.18 3,804.81 2,815.31 1,842.11 5,941.58 156.61 88.27 65.53 478.10 1,049.41 14.46 493.92 188.34 420.95 174.67 1,400.51 116.30 87.11 470.52 ffice supply, 374.42 gas Mdse., transformer expense Plant supplies, mdse., bldg. maint Freight charges Employee insurance withheld Radio maint. Mdse., inventory Gas Office supplies Laundry Inventory, water system maint. 96.64 473.54 36.00 10.00 33.55 120.80 105.85 85.95 59.76 537.35 1 1 1 IJ 1 OCTOBER - ELECTRIC (cone) Associated Consultants Barco Municipal Products Brandon Tire Brinkman Studio Coast to Coast Commissioner of Revenue Continental Safety Equip. Culligan Water Cond. Dostal & Oleson Oil Co. Earl's Welding /Industrial Fabricare Cleaners Family Rexall Drug Farm & Home Dist. Fireman's Fund Ins. Four Seasons Services Graybar Electric Co. Hazard Control, Inc. Home Bakery Howard Industries Hutchinson Co -op Hutch Fire & Safety Hutch Util - Emp. Fund Hutch Utilities Hutch Wholesale Supply Hydraulic Jack & Equip. IBEW Local 949 Ink Spots, Inc. Jacobs Tools Co., Inc. Jahnke's Red Owl Jur_ker Sanitation Kato Tool & Equip. Co. Lakes Gas Company Leef Bros., Inc. Mankato Business Products The Marley Cooling Tower Minnesota Sheriff Northern States Supply Petersen- Wisdorf, Inc. Plaza OK Hardware Quade Electric Schmeling Oil Simonson Lumber Standard Printing UPA Welders Supply West Central Industries WESCO Engineering fees Supplies Truck & power operated Supplies Plant supplies, bldg. Sales tax Supplies Plant supplies Equipment maint. Plant supplies Laundry Office supplies 7-5- 1g, 464.00 37.31 equip. maint. 106.32 maint. Plant supplies, bldg. maint. Employee insurance withheld Cup inserts Inventory Plant supplies Cookies Inventory Equipment maint. Plant supplies Employee fund withheld Labor 2,668.02 Plant & UC 1,945.28 usage Plant supplies, truck maint. Power operated equip. Union dues withheld Office supplies Power operated equip. Coffee Refuse service Supplies Gas Laundry Office supplies Water system maint. Subscription Plant supplies Inventory Plant supplies, bldg. Plant supplies, bldg. URD line Oil URD maint. Office supplies Station equip. maint. Plnat supplies Office supplies Inventory 16.55 63.09 16,797.71 13.50 22.50 41.00 11.90 182.00 61.70 36.51 98.08 39.80 980.00 124.16 191.16 2,017.00 7.50 69.00 64.00 4,613.30 & equipment 261.89 maint maint. maint. maint., 15.00 464.75 73.50 188.88 177.80 89.00 34.60 203.92 54.37 56.48 3,185.2.5 55.00 21.95 2,329.98 48.36 104.86 23.20 2.88 79.05 163.00 60.80 121.53 763.10 OCTOBER - ELECTRIC (cont) Wigen Chevrolet Co. Zep Mfg. Co. H & C Electric Supply Graybar Electric Co. Sterling Electric Plowman's, Inc. Kralein Investments Leslie Korngiegel Jack Alfredson Pat Amsler Gary Christianson LaVonne Deal Jill Farenbaugh Joel Froemming Ken Gardeski Mark Hanke Troy Olson Pam Provencher Mabel Reiter R. B. Remund Greg Steinacker Terry Theis Mark Thorson Helen M. Vacek Quinn Warner John Yates UPA Graybar Electric Co. Velvet Coach Erickson Oil Products Standard Solvents Co. Uniforms Unlimited Medical Insurance Truck maint. Plant supplies Inventory, supplies Inventory Inventory Truck maint. Meter refunds & int Purchased power Engine maint. #8 Meeting expense Gas Plant supplies Uniforms OCTOBER PAYABLES - GAS American Family Life Ins. Atkinson Blacktop Service Colonial Life & Accident Firstate Federal Savings Fisher Controls Hutch Utilities Midwest Gas Assn. State Treasurer Hutchinson Utilities State Treasurer State Treasurer Citizens Bank & Trust Co. Putnam Fund Dist. ICMA Retirement Corp. 170 Employee insurance withheld Maint. of mains Accident insurance withheld Deposit to C/D Account Inventory Employee utility bills withheld Employee insurance withheld Employee insurance withheld Payroll deposit plan PERA withheld & expense FICA withheld & expense Federal tax withheld Employee deferred comp withheld Employee deferred comp withheld 204.24 605.00 2,281.64 393.51 67.61 117.90 314.36 16.93 42.60 21.30 42.60 21.30 42.60 42.60 21.20 22.40 21.30 42.60 42.40 21.30 42.60 42.40 42.40 21.20 21.30 42.60 511,498.95 453.60 43.72 72.40 45.00 551.25 1,157.63 50.80 21.00 39.00 500.00 1,473.92 490.00 21.66 9.00 2,683.50 950.01 826.38 1,037.62 50.00 300.00 1 �7' 1 1 OCTOBER - GAS (cont) Continental Assurance Co. Continental Assurance Co. Hutch Utilities State Treasurer State Treasurer Commissioner of Revenue Citizens Bank & Trust Co. ICMA Retirement Corp. Putnam Fund Dist. Nat'l Assn. Consumer Owned Gas Petty Cash Hutch Utilities Research Reports Center Apollo Piping Supply American Freight Systems Apollo Piping Supply Albrecht Oil Co. American Meter Division Atkinson Blacktop Service Coast to Coast Continental Safety Equip. Energy Economics Fisher Controls Graphic Controls Corp. Hutch Town & Country Tire Hutch Util - Emp. Fund Hutch Utilities Hutch Wholesale Supply IBEW Local 949 Lakes Gas Co. North Star Gas Products Quade Electric Val -Tex Valves, Inc. Wigen Chevrolet Hutch Utilities Uniforms Unlimited Circle -Hutch Utility Erickson Oil Products Medical Insurance Life insurance Life insurance Payroll deposit plan PERA withheld & expense FICA withheld & expense State tax withheld Federal tax withheld Employee deferred comp withheld Employee deferred comp withheld Dues Meeting expense Due to Municipal Electric Plant interest C/D Office supplies Inventory Freight charges Inventory, supplies Gas Inventory, meter expense Maint. of services Supplies, power operated equip. maint. Supplies Supplies Inventory Supplies Power operated equip. maint. Employee fund withheld Peak shaving usage, labor Power operated equip. maint. Union dues withheld Gas Inventory Mains Inventory Truck maint. Due to Municipal Electric Plant October expenses Uniforms Purchased power Gas 7 7 -gr 18.70 79.09 3,093.37 973.43 866.42 954.36 1,133.26 300.00 50.00 330.00 171.53 9,333.32 20.00 156.67 41.56 82.91 18.13 347.52 87.58 13.69 13.50 40.13 63.10 42.60 6.50 16.00 2,150.55 19.10 117.25 116.73 326.16 14.20 493.20 102.11 12,016.68 38.85 319,784.56 38.58 517.20 There being no further business, motion was made by Commissioner Beatty, seconded by Commissioner Lyke to adjourn the meeting at 2:55 p.m. Motion was unanimously carried. ATTEST E. Daggett,JR esident i i Thomas B. Lyke, S retary 1 11