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08-25-2015 HUCMMINUTES Special Meeting — Hutchinson Utilities Commission Tuesday, August 25, 2015 Call to order — 8:00 a.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; General Manager Jeremy Carter. Members absent: Attorney Marc Sebora Others present: Jared Martig, Randy Blake, Dave Hunstad, John Webster, Dan Lang, and Kim Koski. GM Carter distributed an overview of HUC's mission statement, values, strategies, and objectives for review and discussion during this first strategic planning workshop. (Handout attached.) The Board decided to focus today's workshop on reviewing HUC's mission statement and core values. Secretary Girard recommended adding a key metrics column next to the values column. GM Carter asked the Board what level of involvement they want to take during this strategic planning process. Commissioner Bordson explained historically the Board focused on HUC's vision and values and then established high level measurable objectives on where HUC should be in three to five years. HUC staff developed the strategies to meet those objectives. After review of the current mission statement which states, "The Hutchinson Utilities Commission will provide economical, reliable electric and natural gas and related services within our service territory and the Midwest, while contributing economic vitality to the City of Hutchinson", the Board added the word 'safe' before the word `economical'. The following HUC core values were reviewed: 1. Provide Reliable Electric, Gas & Related Services to Our Customers — This value will continue to be a priority. HUC's electric division still meets and exceeds the RP3 Platinum designation. The goal would be to maintain this level of designation as it is utilized for marketing to attract new businesses to the community. Last year, HUC's natural gas division was awarded The American Public Gas Association's System Operational Achievement Recognition — Silver level. HUC will be applying again in 2017 with the goal of achieving the Gold level. The Board asked if there was a disaster recovery plan in place. Maybe follow a tiered approach depending on the potential disaster. Currently, there is insurance coverage and a risk mitigation plan on both electric and gas. Vice President Luhring asked if HUC carries insurance for terrorism. Jared Martig responded that the League of Minnesota Cities added data hacking in the last couple years. 2. Provide Affordable Pricing & Excellent Value for HUC's Services —HUC is market competitive and the rates are stable for our customers due in part to HUC's rate stabilization funds. HUC has not had rate increases since 2006. After review of the value statement, the Board recommended replacing the word 'affordable' with 'market competitive' and 'stable'. Discussion held regarding where renewables and distributed generation should fall within the objectives along with new opportunities for investment. GM Carter responded these items could be part of value statement five. Commissioner Bordson suggested a rate survey in regards to renewables could be a one-year strategy to see what percentage of customers would be willing to pay more and/or support renewable energy. Jared Martig commented currently HUC offers blocks of wind to our customers where they may pay extra. Currently, no customers are signed up for any blocks of wind. 3. Provide Excellent Customer Service to Our Customers — Discussion held regarding customer service satisfaction surveys with the rate payers and if there are any measurements currently. Currently, we have measurements through the RP3 program. GM Carter commented HUC could utilize HUC's new web site design to provide customers relevant information. Commissioner Bordson suggested using technology to provide customers access to see their usage online. After review of the value statement, the Board recommended deleting 'to our customers'. 4. Enhance the Quality of Life & Economic Vitality in Hutchinson — Commissioner Bordson suggested continuing to work with businesses and the City of Hutchinson. President Hanson commented HUC's largest opportunity is in the top two values providing reliability along with stable and competitive pricing. Commissioner Bordson would like to see HUC's funds go directly to help a City project versus going into the general fund to specifically isolate the utilities' part in the project. 5. Serve our Customers in Ways that are Ethically, Fiscally & Environmentally Responsible — GM Carter mentioned this covers HUC being fiscally responsible for maintaining reliability, infrastructure, and providing cost effective energy. HUC will strive to continue to follow all regulations, consciously considering the environment. A consideration is if HUC would like to be more proactive than the law requires. HUC is looking out for the best interest of our customers and community as we conduct business and try to balance this on a monthly basis. After review of the value statement, the Board recommended combining value statement numbers three and five and change the statement to say, "Provide excellent customer service in ways that are ethically, fiscally and environmentally responsible". In addition, change objective statement one to read, "Provide customers and community with essential information." Discussion was held regarding different ways to send marketing information to HUC's customers to include inserts with bills and newsletters. 6. Promote the Safety of Our Customers, Employees and the Public — After review of the value statement, the Board recommended removing the words `customers' and '& the public' from the value statement to keep it relating to HUC employees, as value statement one relates to the customers and public. 9:43 a.m. — at this time, Commissioner Bordson left the meeting. Commissioner Morrow recommended adding a long-term planning, competitive component as a value to cover new strategies for customer trends and forward - thinking technologies, being competitive, and adapting to regulatory and/or legislative changes. GM Carter will revise the document and create language for an added value. President Hansen mentioned finding a place for the following items within the current values: 1. Renewables and generation 2. Continuous review of HUC's power supply planning 3. Opportunities for investment. During the next strategic planning meeting, the staff will discuss some of the tasks being done to meet the objectives. The Board would like to receive feedback from staff on any changes needed to the strategies and objectives. Randy Blake mentioned HUC is currently practicing about 95% of the values, strategies and objectives. This involves natural gas, generation, distribution and technical areas working together to make a budget. The next special meeting to continue strategic planning is scheduled for Thursday, September 24 at 8:00 a.m. There being no further business, a motion was made by Secretary Girard, seconded by Commissioner Morrow to adjourn the meeting at 10:00 a.m. Motion was unanimously carried. Mark Girard, Secretary ATTEST: AWMtn�• Anthony Hanson, Presiden Objectives of the 1st strategic planning workshop: 1. Strategic Planning Overview: a. Integrated and long-term strategic, operational and financial planning is important to meet HUC's board performance expectations and to align the business operations with the organizations long-term goals. b. The strategic planning outcomes will provide direction to management/staff during the development of a shorter range business plan that encompasses HUC objectives/task, the budgeting process & a capital expenditure program. 2. Identify an appropriate strategic planning process a. Each Meeting address one HUC Outcome, Strategy & Objectives (Comm/Mgmt) b. Mgmt to bring forward information for commissioner review, comment, & amendments? c. Discuss prioritization or levels of importance with the various strategic outcomes 3. Identify appropriate timeframes to complete an initial strategic planning document. a. Amend or Affirm HUC Values/Long-term Goals (consensus) b. Planning discussions as part of the monthly commission meeting or separate c. By Year -End, Sept— Feb (6 - HUC Outcomes) 4. Identify the stakeholder participation levels, time commitment, & communication channels a. Commission — HUC Outcomes/Strategies/Objectives? b. Management — HUC Outcomes/Strategies/Objectives/Tasks/Perf measurements? c. Employees — Objectives/Tasks? d. Discuss and communicate to entire organization at various stages of the strategic planning process to provide input/feedback? e. Encourage consistent and open stakeholder participation Mission Statement: The Hutchinson Utilities Commission will provide economical, reliable electric and natural gas and related services within our service territory and the Midwest, while contributing economic vitality to the City of Hutchinson. Broad Value Statement Goals: (reliability, affordability, customer service, quality of life, responsible, safety) Strategic Plan: (Review: 3-5 Years) Operating Plan: (Objectives, Budget, Long -Range Outlook, Performace measures) (Review: Annually) VALUES (HUC OUTCOMES) HUC STRATEGIES HUC Objectives Provide reliable electric, gas, & 1. Secure & deliver electric, natural gas, and related services to meet current & future customer demands 1. Maintain flexibility of supply to respond to changes in demand, market, and regulations related services to our customers in a reliable and efficient manner 2. Maintain Infrastructure to optimize asset life cycle and utilization 3. Exceed industry standards related to reliability & quality 4. Maintain programs to replace aging infrastructure that will improve the reliability & integrity of HUC's utility delivery system. Provide Affordable Pricing & 1. Provide electric, natural gas, and related services at competitive, fair and stable prices 1. Maintain income levels to provide adequate cash flows for debt service payments, system growth, and asset replacement excellent value for HUC's services 2. Maintain adequate cash balances and reserves to provide continued operations and maintenance and stable prices 3. Maintain credit rating that provides the ability to obtain debt at competitive interest rates 4. Continue to explore opportunities to grow the business through additional revenue opportunities and/or partnerships 1. Identify & Adapt to customer's changing demands to build & retain customer loyalty 1. Regularly solicit customer feedback to improve and change as the industry and customers preferences change Provide excellent customer service to 2. Use technology to provide convenient & efficient methods for doing business with HUC 2. Continue to explore technology to improve HUC's business processes and enhance the customers utility experience our customers 3. Recruit & retain a qualified, productive, diverse & talented workforce responsive to our customers' needs 3. Offer a competitive employee compensation & benefit package that will enable HUC to attract & retain a talented and diverse workforce. 4. Maintain a company -wide succession plan by assessing the utility's employment levels, predicting future needs, planning for internal movement, predicting external hiring needs and ensuring a skilled and trained workforce. Enhance the Quality of Life & 1. Promote enhanced quality of life through community involvement 1. Collaborate with community partners to promote economic development through attraction, retention, and growth of businesses and jobs Economic Vitality in Hutchinson 2. Promote enhanced quality of life through economic development initiatives in our community 2. Encourage employees to be personally involved in community activities 3. Promote programs that assist customers in need with their utility bills or provide incentives to make good energy consumption choices 1. HUC will strive to keep customers, city government, and the community educated about their utility. 1. Keep customers satisfied and informed by providing the community with essential information to improve its overall understanding of the utility Serve our customers in ways that are We will operate with the highest level of legal, ethical, financial, and environmental standards in mind. 2. Comply with applicable regulations and laws through appropriate policies, procedures, and controls ethically, fiscally 8, environmentally responsible 3. Achieve financial stability through the use of sound business practicies, policies, and operating procedures Promote the safety of our 1. Promote a safe environment emphasizing the importance of accident avoidance and injury prevention, 1. Enact and maintain programs and procedures that provide safe work practicies customers, employees & the public operate in compliance with applicable laws, rules and regulations. 2. Provide a safe and healthy workplace 3. Ensure all operating areas meet or exceed all applicable local, state, and federal safety rules and regulations 4. Enusre that safety is an integral part of all HUC's internal and external operations Mission - Values/Long-term goals - Strategies - Objectives - Tasks - Metrics/Indicator - Target (Dynamic and continuous process) SWOT Analysis (Strength, Weakness, Opportunity, Threat) Situation Analysis (internal/external) PEST Analysis: (Political, Economic, Social, Technological) Communication & Translation throughout the entire organization.