08-27-2014 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, August 27, 2014
Call to order — 3:00 p.m.
President Hanson called the meeting to order. Members present: President Anthony
Hanson; Vice President Monty Morrow; Secretary Mark Girard; Commissioner Donna
Luhring; Commissioner Dwight Bordson; Attorney Marc Sebora; and General Manager
Jeremy Carter.
1. Approve Minutes of July 30, 2014 Regular Meeting
The minutes of the July 30, 2014 regular meeting were reviewed. A motion was
made by Commissioner Luhring, seconded by Vice President Morrow to approve
the minutes. Motion was unanimously carried.
2. Ratify Payment of Bills for July 2014
The July 2014 payables were discussed. After discussion, a motion was made by
Commissioner Bordson, seconded by Commissioner Luhring to ratify the payment
of bills in the amount of $2,582,691.20 (detailed listing in payables book). Motion
was unanimously carried.
3. Approve Financial Statements/Budget Year to Date
Jared Martig presented the July 2014 financial statements/budget year-to-date.
After discussion, a motion was made by Commissioner Bordson, seconded by
Commissioner Girard to approve the financial statements/budget year-to-date.
Motion was unanimously carried.
4. Review Policies
GM Carter presented the policies, sections:
• Deposit Requirement — Residential
• Deposit Requirement — Commercial/Industrial
• Terminating Electric/Natural Gas Service by Customer
No changes were recommended.
5. Review Exempt and Non -Exempt Employee Handbooks
GM Carter presented exempt and non-exempt handbooks, sections:
• Deferred Compensation
No changes were recommended.
6. Approve Exempt and Non -Exempt Employee Handbooks
GM Carter presented the exempt and non-exempt employee handbooks, sections:
• School Conference Leave (Tabled at the July 30 Regular Meeting)
• Bone Marrow Donation Leave (Tabled at the July 30 Regular Meeting)
Both sections were tabled at the July 30 regular meeting as the Board requested
the need for these policies be researched further and if the State Statute could be
referenced when needed. GM Carter recommended that these policies be
approved for awareness and easy reference for both managers and employees.
After discussion, a motion was made by Commissioner Luhring, seconded by Vice
President Morrow to approve adding sections School Conference Leave and Bone
Marrow Donation Leave to the exempt and non-exempt handbooks. Motion was
unanimously carried. (Sections attached.)
7. Rescind Leave Credit in Lieu of Compensation Policy
Attorney Sebora presented a memo to the Commissioners explaining his
recommendation that this policy be rescinded as there are no HUC employees
earning a salary close to the governor's salary cap at this time. The policy was
adopted in November 2011 to allow HUC employees whose salary exceeded the
governor's salary cap to accumulate hours in a bank of hours representing the
amount of that employee's salary which exceeded what those employees could be
paid under the governor's salary cap. This bank of hours would then be paid out to
the respective employee upon his/her separation from the utility. A motion was
made by Commissioner Bordson, seconded by Commissioner Luhring to rescind
the Leave Credit in Lieu of Compensation Policy. Motion was unanimously carried.
(Policy and Memo attached.)
8. Approve Requisition #6011 to Install Aluminum Sheeting and Support Stand -
Offs on Unit #5 Exhaust Stack Muffler
Randy Blake explained this was a 2014 capital budget item. After discussion, a
motion was made by Commissioner Bordson, seconded by Vice President Morrow.
Motion was unanimously carried. (Requisition attached.)
9. Communication from the Interim City Administrator
Interim City Administrator Sebora had nothing to report.
10. Division Reports
Electric — Dan Lang
Nothing to report
Electric — Dave Hunstad
• Working on completing reconductor projects.
Finance — Jared Martig
• HUC will have an open house on Tuesday, October 7, 2014 to celebrate Public
Power/Natural Gas Week.
Natural Gas — John Webster
Natural gas crews are out on Highway 7 East installing distribution main for
Factory Direct and Simonson's and to provide higher pressure gas.
HUC's pipe trailer was returned yesterday.
2
Electric — Randy Blake
• Unit #3 tagged as it developed a water leak in the turbo charger. A crack in the
housing needs repair. Received quotes for repair at an estimated amount of
$15,000. This amount is budgeted for 2015.
• An ammonia gas detection system was installed for Unit #5 and training has
been provided.
11. Legal Update
Nothing to report
Unfinished Business
Discuss Separate Business Unit for Wholesale Business
o Nothing to report
Discuss Industrial Rate Change — Electric
o President Hanson reported GM Carter is working with staff to identify a
number of options for HUC to consider. GM Carter put some different
scenarios together to discuss with Commission. The Board will schedule a
workshop in September to include discussions on industrial rate change,
2015 budget and PILOT.
Discuss Compensation Study
o Nothing to report
New Business
President Hanson suggested the Board establish a PILOT subcommittee. After
discussion, a motion was made by Vice President Morrow, seconded by
Commissioner Bordson to appoint President Hanson and Commissioner Girard
to a PILOT subcommittee to negotiate with the City. Motion was unanimously
carried.
Closed Session to Conduct the Three -Month Performance Review of
Hutchinson Utilities Commission General Manager Pursuant to Minnesota
Statute 13 D .05 Subd. 3(a)
At 3:53 p.m. a motion was made by Commissioner Luhring, seconded by Commissioner
Bordson to move into a closed session meeting for the three month performance review
of HUC's general manager. Motion was unimously carried.
ATTEST:
Anthony Ha son, Pre ident
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WWGirard, 846retary
EXEMPT
SCHOOL CONFERENCE LEAVE
Any employee who has worked half-time or more for more than twelve (12) consecutive months
may take unpaid leave for up to a total of sixteen (16) hours during any school year to attend
school conferences or classroom activities related to the employee's child (under 18 or under 20
and still attending secondary school), provided the conference or classroom activities cannot be
scheduled during non -work hours. When the leave cannot be scheduled during non -work hours
and the need for the leave is foreseeable, the employee must provide reasonable prior notice of
the leave and make a reasonable effort to schedule the leave so as not to disrupt unduly the
operations of HUC. Employees may choose to use vacation leave hours or compensatory time
for this absence, but are not required to do so.
NON-EXEMPT
SCHOOL CONFERENCE LEAVE
Any employee who has worked half-time or more for more than twelve (12) consecutive months
may take unpaid leave for up to a total of sixteen (16) hours during any school year to attend
school conferences or classroom activities related to the employee's child (under 18 or under 20
and still attending secondary school), provided the conference or classroom activities cannot be
scheduled during non -work hours. When the leave cannot be scheduled during non -work hours
and the need for the leave is foreseeable the employee must provide reasonable prior notice of
the leave and make a reasonable effort to schedule the leave so as not to disrupt unduly the
operations of HUC. Employees may choose to use vacation leave hours or compensatory time
for this absence, but are not required to do so.
EXEMPT
BONE MARROW DONATION LEAVE
Employees working an average of 20 or more hours per week may take paid leave, not to exceed
40 hours unless agreed to by HUC, to undergo medical procedures to donate bone marrow. HUC
may require a physician's verification of the purpose and length of the leave requested to donate
bone marrow. If there is a medical determination that the employee does not qualify as a bone
marrow donor, the paid leave of absence granted to the employee prior to that medical
determination is not forfeited.
NON-EXEMPT
BONE MARROW DONATION LEAVE
Employees working an average of 20 or more hours per week may take paid leave not to exceed
40 hours unless agreed to by HUC, to undergo medical procedures to donate bone marrow. HUC
may require a physician's verification of the purpose and length of the leave requested to donate
bone marrow. If there is a medical determination that the employee does not qualify as a bone
marrow donor, the paid leave of absence granted to the employee prior to that medical
determination is not forfeited.
Adopted November 30, 2011
Hutchinson Utilities Commission
PERSONNEL POLICY
LEAVE CREDIT IN LIEU OF COMPENSATION
Each employee will be paid that portion of the employee's assigned salary that is permitted by law to be
paid. An employee whose salary exceeds an amount permitted by law to be paid is entitled to receive
leave hours in lieu of that portion of the salary that is not permitted by law to be paid. The amount of
leave hours will be calculated utilizing the employee's actual annual rate of pay established pursuant to
the applicable compensation policy and plan. The Commission, the General Manager or Department
Head is authorized to establish the assigned salary using the provisions of the pay plan established by the
Hutchinson Utilities Commission or the applicable collective bargaining agreement.
Once an employee's nominal salary has been reached or exceeds the salary cap for his/her position,
his/her hourly rate of pay will be the salary cap for the position divided by 2080 hours (the "capped
hourly rate").
As the employee will be paid based on a "capped" hourly rate, annual earnings will not match the annual
salary cap for the position.
Example:
Salary cap = $151,866/2080 annual hours = $73.0125 = "capped" hourly rate
26 payrolls = $73.0125X 80 hrs/pay period = $5,841.00 X 26 pay periods = $151,866.00
27 payrolls = $73.0125X 80 hrs/pay period = $5,841.00 X 27 pay periods = $157707.00
When an employee leaves employment with the Hutchinson Utilities Commission, all severance will be
paid at the capped hourly rate.
Each employee will receive leave credits in lieu of all compensation, which exceeds the salary cap for
his/her position, as discussed earlier. Leave hours will be credited at the time the Commission, General
Manager, or Department Head establishes the assigned salary for the employee whose salary exceeds the
amount permitted by law to be paid. If an employee who has been awarded leave in lieu of compensation
pursuant to this policy terminates employment, the employee's leave hours accrual will be prorated
accordingly.
Leave Credit Computation:
Leave hours in lieu of annual salary will be credited for the difference between the nominal hourly rate
and the capped hourly rate. The computation formula is:
(nominal hourly rate — capped hourly rate) X # of hours employee was paid at the capped rate = x
x/capped hourly rate = Leave hours to be credited
Example:
Nominal salary = $200,000/2080 annual hours = $96.153 = nominal hourly rate
Salary cap = $151,866/2080 annual hours = $73.0125 = capped hourly rate
26 payrolls = ($96.153 — 73.0125) X (80 hrs/pay period X 26 pay periods = 2080) = $48134.24/$73.0125
= 659.257 hours
27 payrolls = ($96.153 — 73.0125) X (80 hrs/pay period X 27 pay periods = 2160) = $49,983.48/$73.0125
= 684.581 hours
Memorandum
To: Commissioners of the Hutchinson Utilities Commission
From: Marc A. Sebora, City Attorney
Date: 8/28/2014
Re: Rescission of HUC's "Leave Credit In Lieu Of Compensation Policy"
As you may know, Minnesota law restricts the amount of money public employees can earn. That
amount is to be no more than 110% of the governor's salary adjusted for inflation. This ceiling on
public employee earnings is called the "governor's salary cap". Currently, that maximum amount is
$162,245 and this amount increases approximately 3% per year.
In November of 2011, the Hutchinson Utilities Commission adopted a "leave credit in lieu of
compensation policy" which allowed HUC employees whose salary exceeded the governor's salary
cap to accumulate hours in a bank of hours representing the amount of that employee's salary which
exceeded what those employees could be paid under the governor's salary cap. This bank of hours
would then be paid out to the respective employee upon his/her separation from the utility.
I am enclosing a copy of the policy for your review.
During the time interval prior to Mr. Carter's employment as general manager, I had fielded questions
by various commissioners regarding the continued need to have this "leave credit in lieu of
compensation" policy in place.
In my opinion, the policy is no longer needed especially in consideration of the fact that no
Hutchinson Utilities Commission employee is earning a salary close to the governor's salary cap and
that the maximum amount set by the State continues to rise annually.
Therefore, it is my recommendation that this policy be rescinded.
HUTCHINSON UTILITIES COMMISSION REQUISITION FORM
Supplier: MCCORMICK INSULATION INC
530 SHOREVIEW PARK RD
SHOREVIEW, MN 55126
Phone: 651-699-4149
Fax:
Ship To: HUTCHINSON UTILITIES COMMISSION
175 MICHIGAN ST SE
HUTCHINSON, MN 55350
Phone: 320-587-4746
Fax: 320-587-4721
Requisition No. 006011
Item #
Q
Part Num. Description
Request Date
Acct #
Wo #
Unit Price
Per
Item Total
1
1
(000-00000)
10/15/2014
1073440000
11408
27,662.00
Each
27,662.00
Line Remarks: LABOR -MATERIALS -WELDING -WORK
PLATFORM LIFT- TO INSTALL .040 SMOOTH ALUMINUM
SHEETING AND SUPPORT STAND -OFFS TO UNIT # 5
EXHAUST STACK MUFFLER
Sales Tax 1,901.76
Special Charges 0.00
Total 29,563.76
Requisitioned By: BLAKE, RANDY Date: 08/21/2014
Approved By:
Date:
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