07-29-2015 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, July 29, 2015
Call to order — 3:00 p.m.
President Hanson called the meeting to order. Members present: President Anthony
Hanson; Vice President Donna Luhring; Secretary Mark Girard; Commissioner Monty
Morrow; Commissioner Dwight Bordson; Attorney Marc Sebora; General Manager
Jeremy Carter.
1. Conflict of Interest
Secretary Girard declared a conflict of interest in voting on the Consent Agenda as
he is listed in the payment of bills.
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
A motion was made by Commissioner Bordson, seconded by Commissioner
Morrow to approve the items listed under the Consent Agenda. Motion was
unanimously carried.
3. Approve Financial Statements
Jared Martig sent out revised financial statements to the Commission to include
the updates to the balance sheet ratios. GM Carter noted changes which were
made as some information was lost during the format conversion for the packet.
GM Carter noted Dan Lang has benchmarked the 2013 against 2014 numbers for
HUC's base load contract which indicate HUC was in a little better position in 2014
than 2013. We will continually watch our base load contract relative to what energy
our customers are using.
GM Carter recommended not doing a mid -year budget amendment as the trending
is close to 50% of the revenue side. As HUC starts entering the upcoming power
cost adjustment months, we may be trending right at budget on the revenue side.
On the expense side, we are trending below 50%. With the upcoming retirements,
the cost savings will be offset by the severance payouts. Overall, HUC is doing
better than through June 2014.
After discussion, a motion was made by Vice President Luhring, seconded by
Commissioner Bordson to approve the financial statements. Motion was
unanimously carried. (Changes attached.)
4. Open Forum
5. Communication
a. City Administrator — Matthew Jaunich
i. The City just completed the yearly audit.
ii. Working on the 2016 budget.
iii. The Utilities staff is working with City on Christmas lighting at Library Square
and helping out at the ball field getting ready for next year's State amateur
tournament.
iv. The Second Avenue project is close to being finished.
v. The Luce Line Trail project will start within the next couple weeks.
vi. Working on plans for the aquatic center.
b. Divisions
i. Randy Blake —
1 . Two of HUC's newest operators passed their Class A Chief license test.
They may now operate equipment without being supervised by another
chief operator. This will save on overtime costs running Unit 8.
2. Unit 8's 600 amp breaker failed Monday afternoon and the breaker ran
the motor control center for all the cooling pumps. The breaker was
replaced and is running again.
3. Midwest Overhead Crane installed the new crane last week. The project
is complete.
Dan Lang —
1. HUC has been generating due to warmer weather and the Transalta
contract. HUC hit a new peak for the year of 57.2 megawatts which is
just shy from the 2006 peak of 65 megawatts.
2. Calling on the Transalta contract has resulted in about $114,000 in sales
so far.
iii. Dave Hunstad —
1. Working on repairs from the outage last Friday at 4:30 p.m.
2. On the Second Avenue project, HUC changed the lighting to LED. The
lighting for the Golf Course Road project was changed to LED as well.
iv. Jared Martig -
1. Attended a Webinar on GASB 68.
2. HUC was selected to be audited by PERA's auditors. Jennifer Tramp
and Brenda Ewing have been working on getting information to their
auditors.
3. HUC is in the preliminary stages of researching switching software
companies to the same company the City of Hutchinson secured. There
may be a cost savings of about $70,000 per year after an
implementation cost of about $200,000.
4. Two customers turned their electricity back on after being disconnected.
HUC charges $100 and another re -disconnect fee of $40 per customer.
The police were notified and a report was sent to Attorney Sebora.
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v. John Webster —
1 . Sent the Greater Minnesota Gas Interconnect and Transportation
Agreements to the Commissioners for review and received comments
back from two Commissioners. Will send out to Greater Minnesota Gas
after today's meeting for their response.
2. Preparing a presentation for this year's MEA conference.
3. Met with Heartland Corn to discuss their interest in working with HUC for
transporting natural gas to their plant as they grow. Will be assisting
them over the next couple years as they go through the permitting
process. They are currently buying out their metering and regulating
facilities from the City of Fairfax. They have asked HUC to operate and
maintain their facilities for them.
4. Prepared a response to the City of Lafayette's Request for Proposal for
natural gas service.
5. Adding new customers on North High Drive and Bluff Street as we had
enough response from a group of citizens.
6. Working with Dan Lang watching daily prices for natural gas. Through
July, the prices are up 24 cents. We will keep our eye on it.
c. Legal — Attorney Sebora
i. Received one report so far on the illegal reconnect of power which is a
crime so it will be prosecuted.
ii. A detachment action occurred earlier this spring, where a land owner on the
northeast side of town sought to have his land removed from the city limits
of Hutchinson through an administrative proceeding. The update is the
Administrative Law Judge ruled against the City of Hutchinson on that
proceeding so there was an Order issued allowing the land owner to remove
his land from the City limits. The City Council voted earlier this month to
appeal that decision.
iii. Will be attending a Missouri River Energy Services (MRES) seminar on
August 6 in Sioux Falls regarding the proposed changes to their power
supply contracts they are going to be considering at their September
meeting. These changes are being brought on by consolidations by some of
their suppliers — Western Area Power Administration and Southwest Power
Pool which will be affecting how MRES gets its power.
d. General Manager — Jeremy Carter
i. Continuing to work on the capital expenditures model.
ii. Starting to work on the general topics for the strategic planning meetings in
August and September.
iii. Attended the MPCA stakeholder meeting regarding the new Federal
regulations coming out. There will be more follow-up meetings after the
initial ruling from the Federal Government in August. A lot of work will need
to be done in the next year to figure out the best approach in Minnesota.
There was a lot of discussion on economic dispatching and price points
along with renewable credits and values and how they affect people bidding
major generation into the market.
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6. Policies
a. Review Policies
i. Employee Handbooks — Solicitation on Utility Premises
ii. Employee Handbooks — Employee Gifts
iii. Deposit Requirement — Residential
iv. Deposit Requirement — Commercial/Industrial
No changes were recommended at this time.
b. Approve Changes
i. Employee Handbooks — Offensive Behavior/Sexual Harassment
The Offensive Behavior/Sexual Harassment policy was tabled at the
June 24, 2015 regular commission. As directed by the Commission, Brenda
Ewing has incorporated language to include Human Resources in the
reporting and investigation of employee claims of offensive behavior/sexual
harassment. Additional information was also added which clarifies the
policy.
After discussion, a motion was made by Vice President Luhring, seconded
by Secretary Girard to approve changes to the Offensive Behavior/Sexual
Harassment policy. Motion was unanimously carried. (Changes attached.)
ii. Employee Handbooks — Flowers
Changes to the Flowers policy were made to be consistent with other policy
updates where the General Manager and/or Managers job titles were added
to reflect HUC's current organizational structure. A motion was made by
Commissioner Morrow, seconded by Commissioner Bordson to approve
changes to the Flowers policy. Motion was unanimously carried. (Changes
attached.)
iii. Distributed Generation (Greater than 40 kW) Policy and Contract for Parallel
Generation Facilities (Greater than 40 kW)
Due to both the industry changing and the timing of the City of Hutchinson
installing a large-scale 400 kW solar project within RUC's service territory, it
was important for HUC staff to review its current policy and interconnect
agreement (Greater than 40 kW) and recommend changes where
applicable to better fit the language and document structure being used in
the industry today.
Due to the large scale city project and Xcel Energy requirements, Kaela
Brennan from the law firm of McGrann, Shea, Carnival, Straughn & Lamb
assisted HUC in reviewing these documents. Additional language of
importance was added to provide more flexibility for HUC and more clarity
on customer requirements.
The intentions of the policy revisions were to create an overarching policy of
basic requirements that any type and/or size of Distributed Generation over
40 kW must comply with prior to HUC considering entering into an
Interconnect Agreement.
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The intentions of the Agreement/Contract revisions are to create a stand
alone document, by which HUC will have as much flexibility as possible to
address the various types, sizes, and dynamics of a customers Distributed
Generation project.
Commissioner Bordson and Commissioner Morrow expressed concerns
that this may limit HUC in future opportunities and as rules change. Attorney
Sebora commented the new contract language is better than the current
language from HUC's standpoint for protection and flexibility. If the changes
are not approved, the City of Hutchinson's contract will follow the current
policy. GM Carter recommended the Commission approve the
amendments.
After discussion, a motion was made by Secretary Girard, seconded by Vice
President Luhring to approve changes to the Distributed Generation
(Greater than 40 kW) Policy and Contract for Parallel Generation Facilities
(Greater than 40 kW). Motion was unanimously carried. (Changes
attached.)
7. Unfinished Business
a. Follow -Up Discussion on Commissioner Candidate Selection Process
President Hanson reported that he and Jeremy Carter will meet with Mayor
Forcier next week to share the information gathered for consideration in
selecting a new commissioner.
8. New Business
a. Approve Request for Proposals - Job Evaluation & Compensation System
HUC sent out a Request for Proposal to complete a comprehensive Job
Evaluation and Compensation System Study that includes all HUC union and
non-union positions. Areas of consideration are: 1) what HUC has in place now
and if we currently are following all labor laws; and 2) confirm HUC has good
internal pay equity within the organization with current job descriptions to stay
in compliance with the State. The last full blown study was done in 2007.
After discussion, a motion was made by Commissioner Morrow, seconded by
Commissioner Bordson to approve the Request for Proposals — Job Evaluation
& Compensation System. Motion was unanimously carried. (Request for
Proposals attached.)
b. Approve Interconnection and Purchase Power Agreement between the City of
Hutchinson and Hutchinson Utilities Commission
HUC's Policy for Distributed Generation (Over 40 kW) states that a separate
contract is required between HUC and the customer concerning the Qualified
Facility. The City of Hutchinson is installing a 400 kW solar system located at
the City's Waste Water Treatment Plant on Adams Street Southeast. The
energy produced by the Solar Array is expected to be used by the Waste Water
facility in its entirety, with very little if any of the energy being sold back to HUC.
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GM Carter recommended the Commission approve the Interconnection and
Purchase Power Agreement between the City of Hutchinson and Hutchinson
Utilities Commission to fulfill the requirements of Xcel Energy's grant.
A motion was made by Vice President Luhring, seconded by Secretary Girard
to approve the Interconnection and Purchase Power Agreement between the
City of Hutchinson and Hutchinson Utilities Commission. Motion was
unanimously carried. (Agreement attached.)
c. Setting a Public Joint Meeting with the City
GM Carter explained historically there is an annual joint meeting with the City of
Hutchinson and HUC to discuss last year's, current and future items. The public
joint meeting will be set for Tuesday, August 11 at 7:30 a.m. and will be held at
the City Center.
A motion was made by Secretary Girard, seconded by Commissioner Morrow
to declare a public joint meeting to be held on Tuesday, August 11 at 7:30 a.m.
at the City Center. Motion was unanimously carried.
9. Adjourn
There being no further business, a motion was made by Commissioner Morrow,
seconded by Vice President Luhring to adjourn the meeting at 4:10 p.m. Motion
was unanimously carried.
C-;� e c
arl Girard, Secretary
ATTEST: N
Anthony Hanson, President
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