02-26-2014 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, February 26, 2014
Call to order — 3:02 p.m.
President Hanson called the meeting to order. Members present: President Anthony
Hanson; Vice President Monty Morrow; Commissioner Bordson; Interim General
Manager John Webster.
Members absent: Secretary Mark Girard; Commissioner Donna Luhring; Attorney Marc
Sebora.
Guests: City Administrator Jeremy Carter and City Human Resource Manager Brenda
Ewing.
1. Approve Minutes of the January 17, 2014 Special and January 29, 2014
Regular Meetings
The minutes of the January 17, 2014 special and January 29, 2014 regular
meetings were reviewed. A motion was made by Commissioner Bordson,
seconded by Vice President Morrow to approve the minutes. Motion was
unanimously carried.
2. Ratify Payment of Bills for January 2014
The January 2014 payables were discussed. After discussion, a motion was made
by Commissioner Bordson, seconded by Vice President Morrow to ratify the
payment of bills in the amount of $3,576,262.09. (detailed listing in payables book).
Motion was unanimously carried.
3. Approve Financial Statements /Budget Year to Date
Jared Martig presented the January 2014 financial statements /budget year -to -date.
After discussion, a motion was made by Vice President Morrow, seconded by
Commissioner Bordson to approve the financial statements /budget year -to -date.
Motion was unanimously carried.
4. Approve Changes to Policies and Requirements Booklet
Interim GM Webster presented changes to the policies and requirements booklet,
sections:
• Electric Meter Requirements
• Electric Meter Placement
• Sealing of Meters - Electric
There were no changes to sections Electric Meter Requirements and Electric
Meter Placement.
The recommended change to the section Sealing of Meters — Electric was tc
delete the last sentence of the first paragraph as it is what HUC currently practices.
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A motion was made by Commissioner Bordson, seconded by Vice President
Morrow to approve the changes to the policies and requirements booklet. Motion
was unanimously carried. (Changes attached.)
5. Approve Changes to Exempt and Non - Exempt Handbooks
Jan Sifferath presented changes to the exempt and non - exempt handbooks,
sections:
• Life Insurance
• Health /Dental Insurance
• Disability Insurance (Exempt Only)
There were no changes to section Life Insurance. Jan explained HUC changed
from CIGNA to Met Life Insurance in 2014 due to cost. The Met Life policy is
portable which benefits the employees. Cost for Met Life is approximately $775 per
month for all employees. HUC does offer voluntary life, however, employees pay
the premium for this. Life insurance is one time the annual employee salary up to
maximum of $50,000.
The recommended changes to section Health /Dental Insurance was to add, "but is
eligible for the high deductible health plan" to the last sentence of the fifth
paragraph of the exempt booklet only. This is what HUC currently practices.
Changes to the Disability Insurance section was listed on the agenda as exempt
only; however, we are deleting the word 'staff' and adding this section to the non-
exempt handbook as this is what HUC currently has practiced since July 2013.
After discussion, a motion was made by Commissioner Bordson, seconded by Vice
President Morrow to approve the changes to the exempt and non - exempt
handbooks. Motion was unanimously carried. (Changes attached.)
6. Approve Changes to Parallel Generation Policy (Tabled at the January 2,
2014 & January 29 Regular Meetings)
Interim GM Webster mentioned this policy is tabled again until the March regular
commission meeting.
At this time, Donna Luhring arrived at the meeting: 3:23 p.m.
7. Approve Requisition #5725 for Forklift (Budgeted for 2014)
Dave Hunstad presented requisition #5725 for purchase of a forklift which was
budgeted for 2014. A motion was made by Commissioner Bordson, seconded by
Vice President Morrow to approve requisition #5725 for purchase of a forklift from
Toyota Lift of Minnesota for $60,004.97. Motion was unanimously carried.
(Requisition attached.)
8. Approve Bid Tabulation for Horizontal Directional Drilling Machine
Dave Hunstad presented the bid tabulation for a horizontal directional drilling
machine which was budgeted for 2014. After analysis and discussion ensued
about the purchase of the drilling machine, the Board tabled this agenda item to
consider purchase of used equipment and further analysis.
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9. Discuss Succession Plan — Director Electric Division
Steve Lancaster's recommendation is to leave the position open until HUC hires
the new general manager. This will allow the general manager to be involved in the
hiring process for Steve's replacement. Steve reported he has started the transition
of his job responsibilities to the managers.
10. Updates:
a. Industrial Rate Subcommittee (President Hanson & Vice President Morrow)
Vice President Morrow reported that 3M requested to meet again on March 18
to continue discussions. No additional conversations have taken place with 3M
since last meeting. Commissioner Bordson abstained from this discussion due
to conflict of interest.
b. Compensation Subcommittee (Commissioner Luhring & Secretary Girard)
Commissioner Luhring reported they met with HUC management. They are
waiting for Wayne Brede to complete his report. Commissioner Luhring
expressed the need for changes to the policy to keep commissioners involved
with salary increases. Commissioner Bordson asked Jared Martig if HUC is
auditing limits of vacation accrual. Jared reported this feature is built into HUC's
JD Edwards software.
c. Joint Meeting Date with City (Commissioner Bordson)
Commissioner Bordson reported there were no updates. He has not received a
response from Mayor Cook.
d. Hiring of New General Manager (Brenda Ewing)
City of Hutchinson Human Resource Manager Brenda Ewing reported to date,
HUC has received seven applications for the general manager position and
discussed the hiring process for this position.
Commissioner Bordson asked if HUC has a policy to cover travel and related
expenses for out -of -state candidates who are interviewed. Brenda explained
past practice has been to determine what a reasonable reimbursement for the
travel related expenses is and then reimbursed candidates.
Brenda stated all applicant information is private until someone is considered
as a finalist. Finalist information is considered public.
After discussion, a motion was made by Commissioner Bordson, seconded by
Vice President Morrow to approve giving Brenda Ewing the authority to approve
the reimbursement of up to $5,000 for travel and out -of- pocket expenses for a
candidate's travel to interview for the general manager position. Motion was
unanimously carried.
11. Communication from the City Administrator
City Administrator Carter presented an update on what's going on at the City.
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Commissioner Bordson requested to plan on discussing the City's solar project at
the joint meeting and how it may impact HUC.
12. Division Reports
Business — Jan Sifferath
• Working with the Compensation Subcommittee and hoping to get preliminary
report from Wayne Brede next week. Will meet again to discuss outcome of the
report.
• Met with outgoing Union representative and incoming Union representative as
well as the Union stewards, Jared Martig, and John Webster regarding HUC's
insurance costs. The Union representatives say unless HUC leaves the plan
status quo, HUC will have to open the Union contract. There has to be an
agreement from the Union to open it. It's premature to know where HUC's
premiums will be in 2015. The Union contract goes through June 30, 2016.
Interim GM Webster mentioned the subcommittee will research a couple ideas
the Union representatives suggested that other utilities practice.
Finance — Jared Martig
• Auditor may be presenting their report in the March meeting.
• Started tiling project in the crew rooms as old flooring needed replacement.
Electric — Steve Lancaster
• Steve Lancaster handed out and discussed the HUC yearly reliability report
which shows outage statistics. The Board commended HUC on the quality of
projects and reliability.
Natural Gas — John Webster
• John Webster discussed daily natural gas prices in February comparing this
year's prices to last year's prices. Today's gas price was $20. John
commended HUC system control in keeping prices down for our customers.
The average price for natural gas yesterday for HUC customers was $7.
• Purchased natural gas for generation for the months of January, June July &
August at a pricing of $4.21 for 2015. The price was $3.96 for 2016.
• Prince of Peace has requested HUC relocate the natural gas main which goes
down that alley. HUC will be discussing the cost involved with Prince of Peace.
• With favorable natural gas prices, HUC's risk management model was slated to
purchase natural gas the first part of March for the next 9 years at the mid -$4
range.
• The Minnesota Office of Pipeline Safety will audit Brownton's distribution
integrity program on March 13, 2014.
• Communicating daily with 3M regarding natural gas prices. Both 3M and HTI
transport through HUC's pipeline.
Vice President Morrow asked City Administrator Carter if it would be valuable to
have Interim GM Webster present at a City Council meeting to help businesses
and community understand how HUC provides low cost natural gas through the
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risk management model HUC has in place. It was agreed this would be
valuable.
13. Legal Update
Attorney Sebora was absent.
Unfinished Business
• Discuss Separate Business Unit for Wholesale Business
o John Webster discussed setting a date to meet with Jared Martig and
President Hanson.
New Business
• Discuss HUC Services — Reading Water and Electric Meters for City of
Brownton
Interim GM Webster discussed the possibility of HUC installing AMI electric and
water meters and then reading them for the City of Brownton. The Board
agreed to have Interim GM Webster start discussions with the City of Brownton
regarding HUC reading their water and electric meters.
• Discuss City of Hanska
Interim GM Webster discussed the City of Hanska requested the Commission
consider HUC provide natural gas service to them due to the higher propane
costs and fuel oil. The City of Hanska is located about 10 miles south of New
Ulm where the HUC pipeline is located about three miles west of there. Asked
Board permission to start discussions to be natural gas transporter and may
elect to buy commodity from HUC as well.
• Jared Martig confirmed the Board would like to honor the Water Carnival
donation request again this year.
There being no further business, a motion was made by Commissioner Bordson,
seconded by Commissioner Luhring to adjourn the meeting at 4:45 p.m. Motion was
unanimously carried.
Mark Girard, Secretary
ATTEST: �""''�•
Anthony Hans n, President
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Sealing of Meters
Electric meters and current transformer housings, which have been sealed by HUC,
shall not be broken or tampered with without the consent of HUC except in emergency
cases. HUC shall be notified immediately after a seal has been broken. If HUC is not
notified and HUC personnel discover a broken seal, a $10 broken seal charge may be
assessed to the customer. MeteF reading perSGnnel will insperat all meteFs and seals as
they are mading meter-s.
Seals will be assigned to each meter /account by color according to the following:
Gray Seal Regular Account
Red Seal Meter Disconnected for Non - Payment
Blue Seal Meter Disconnected by Customer Request
Yellow Seal Life Support Equipment
Exempt
Health /Dental Insurance
HUC provides an opportunity for employees to participate in a group health (HSA) /dental
insurance program. Employees are eligible for coverage the first of the month following hire
date. Contact the Customer /HR Manager for information regarding benefits and participation
levels.
Contact the Customer /HR Manager for information about continuation of health /dental
insurance coverage after leaving.
HUC will provide those employees who participate in the high deductible family plan $4,000
annually into the HSA and employees participating in the high deductible single plan will
receive $2,000 annually into the HSA.
Based on Internal Revenue Service rules, an employee must be an eligible individual to qualify
for an HSA including generally having no other health coverage that is not a high deductible
health plan.
Veterans of the United States armed forces who receive medical benefits from the Veterans
Administration (VA) or employees who are enrolled in TRICARE, which is health insurance
available to active duty and retired service and reserve members and their dependents, are
therefore not eligible to qualify for an HSA, but is eligible for the high deductible health plan.
A veteran who receives medical benefits from the Veterans Administration (VA) or employees
who are enrolled in TRICARE who participate in the high deductible family plan, but who is not
eligible to qualify for an HSA, shall receive $4,000 annually in two equal installments in lieu of
said monies being deposited in an HSA.
A veteran who receives medical benefits from the Veterans Administration (VA) or employees
who are enrolled in TRICARE who participates in the high deductible single plan, but who is not
eligible to qualify for an HSA, shall receive $2,000 annually in two equal installments in lieu of
said monies being deposited in an HSA.
Exempt & Non - Exempt
Disability Insurance
HUC pays the entire premium of a long -term disability insurance policy for all staff employees.
Information on disability insurance is available through the Customer /HR Manager.
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