Loading...
10-25-2017 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, October 25, 2017 Call to Order — 3:00 p.m. President Monty Morrow called the meeting to order at 3:00 p.m. Members present: President Monty Morrow; Vice President Anthony Hanson; Commissioner Robert Wendorff; and Commissioner Don Martinez. Secretary Mark Girard was absent. Others present: General Manager Jeremy Carter; Attorney Marc Sebora. 1. Conflict of Interest There were no conflicts of interest noted. 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Wendorff, second by Martinez to approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements General Manager Carter presented the financial statements. Mr. Carted noted that everything is tracking, as we should. Rates are starting to go down for fall. Would like to highlight the financial ratios for individual Electric and Gas sheets are now accurate and up to date for 2017, this is something new. Typically, those individual divisions ratio are not separated out until year-end but because HUC is running separate balance sheets with the new software conversion this is possible. Jared Martig mentioned cash went down in September, and operationally will for next 2 months due to the payment of bonds. Otherwise similar as years past. Motion by Hanson, second by Martinez to approve the financial statements. Motion carried unanimously. 4. Open Forum -none 5. Communication a. City Administrator — Matt Jaunich i. Mr. Jaunich communicated that the City is in the middle of the budget process. ii. Construction on the Hotel to start at the end of November. Finishing the last part of the road today. iii. Enterprise Building to be completed by the end of the month. Two tenants are already in. iv. High Field Apartments, 1st phase will be open for November. 1 v. Century Court dirt work will be going on this fall. b. Divisions i. Dan Lang, Engineering Services Manager —Absent ii. Dave Hunstad, Electric Transmission/Distribution Manager- working on hotel site this week. Should be wrapping up on third apartment for High Field and Hotel. iii. Randy Blake, Production Manager — nothing to report iv. John Webster, Natural Gas Division Manager- There is a customer down south that has exceeded capacity by over 100%. A meeting is happening next week to see how to remedy the problem. v. Jared Martig, Financial Manager —Electric/Gas Bills went out without problems. Tom Kloss was able to help with the bandwidth of the file. Customers have at least 10 days to pay. c. General Manager — Jeremy Carter i. Will be attending the annual area MRES meeting in Alexander with Jared on Thursday. Will then need to get numbers in the budget. ii. Had a preliminary meeting this morning with UFS on the Cost of Study service. Need to work on some additional information and then get the commissioners involved so we can move forward. iii. Working on Final budget for November meeting. Need to adjust power supply and update transmission cost- Dan & I are working on that. We are waiting for clarification. iv. Finalizing Health Insurance. Had a meeting with union representation. We are looking between Health Partners and Medica. Hoping to have an insurance decision wrapped up by Mid November. v. Working on CIP plan next couple of weeks. vi. Sent info on Pilot information- looking for feedback. Please let me know what you think of resolution language and financial impact will be before I send to Matt. I know you may want to wait on Cost of Service study but need to try to move forward. Commissioner Hanson inquired on when the budget should be approved. General Manager Carter explained he was thinking November have budget presentation, than have 2-3 weeks to look over and would like to approve in December. This is consistent with years past. vii. For the upcoming Commission meetings, November date works well for everyone. For December, looks like we need to move up a week to December 20th viii. If Cost of Service Study is ready to go for November meeting then you could consider discussing at the monthly meeting or at a workshop on a different day. The budget and Cost of Service study could be two lengthy topics. Not seeing anything stand out for the budget in 2018. What we see in 2017 will be fairly consistent to 2018. Will know more at the end of the week. d. Legal — Marc Sebora —Working on generator contracts. 2 6. Policies a. Review Policies i. Investment Policy ii. Disconnection of Residential Services by Utilities iii. Disconnection of Commercial Services by Utilities iv. Health & Safety v. Accidents & Injuries vi. Unsafe Conditions or Practices vii. Employee Right -To -Know b. Approve Changes i. Budget Payment Plan —as noted ii. Investment policy —Commission Hanson asked if everything looked good and if auditors have looked at investment policy. General Manager Carter said everything looks good. iii. Explanation of Billing Procedure- as noted Motion by Martinez, second by Wendorff, to approve the policy changes as recommended. Motion carried unanimously. 7. Unfinished Business a. Update of Pack Gas Discussions Attorney Marc Sebora noted that he called the attorney three times last month and has not had a response. Commissioner Hanson commented that this sounds like this is all we can do. Attorney Sebora agreed. 8. New Business a. Approval of Rollover of Northern Natural Gas Transportation Contract #21279 John Webster, Natural Gas Division Manager communicated that HUC built pipeline in 2003-2004; we did maintain backup capacity supply on Northern Natural Gas. We have two contracts with Northern Natural Gas. One is for 8000 d/day we would like to lower it to 100 d/day. This is just enough to keep the station going. We would pay approximately $11 k a year, which is just enough to keep it there. If something were to happen to our station, we would have Northern Natural gas as a backup and would have to buy extra capacity to get us through. I feel it is better to pay for limited time instead of paying for unused capacity. Right now is the time to renew for another 5 years, they require 1 year in advance. Commissioner Martinez inquired if we renew this we maintain capacity of another source in case something were to happen to our line and we would be without gas. Therefore, even if we pay for penalties I feel this a cheap insurance policy. President Monty asked if this is budgeted. Mr. Webster replied it is. 3 Motion by Hanson, second by Wendorff, to approve the Rollover of Northern Natural Gas Transportation Contract #21279. Motion carried unanimously. b. Approval of Generator Contract Mr. Carter noted this is the final step in approving the generator contract. Since we awarded the bid, we have spent time working on the contract language, shipment dates, insurance threshold, critical and spare parts, and how things are going to run. None of the things we were working on had to do with the cost but with the design. We have been doing a lot of back and forth conversations, Caterpillar has accepted the final language and we can now proceed moving forward. Both generator contract bids had a 60 -day lock, but we had to talk through all the negotiations. We anticipated we would have the contracts in place and before the commission to sign, however we were not able to meet the deadline and now with the new exchange rate, we went from $8.8M to $9.1 M, which is a $286K increase. Overall, everything went very well, there was a lot of conversations and a lot of give and take. Caterpillar has had engineers come out; they are able to work around what we have here and everyone is eager to move forward. This is a very lengthy contract with lots of data. Jim Booty went through all of the technical data, and they can supply what we need. Final step is execution of the contract. In the spring, we will need to go out and get bids for electric, mechanical, and civil. Will still have engines by late summer early fall. Bonds are all set, should receive money by end of month. Mr. Carter asked the Commission if they had any questions. Commissioner Hanson asked Mr. Sebora if he was good with the contract. Mr. Sebora replied that he is. We have gone through all of this many times and thanked Randy Blake for his knowledge and the time that he has put into this. Commissioner Hanson asked Mr. Blake if he was comfortable on his side. Mr. Blake verified that he is. The engineers are very intelligent people. They brought a team of four from Germany and spent 38 hours here. They assured us they can make it work. There was a struggle with document but it should be a good project. Mr. Blake also thanked Mr. Carter and Mr. Sebora. This takes many hands with the length of document. President Monty asked Mr. Jaunich if he had any questions. Mr. Jaunich replied that the City Council is supportive. Commissioner Wendorff inquired if we are still on the same timeline. Mr. Carter replied that we are. Commissioner Hanson noted whatever we can do to stay in the contract with Rice Lake and stay in the parameters. Mr. Carter assured him we are. Motion by Hanson, second by Martinez, to approve the Generator Contract. 4 Motion carried unanimously. At this time, Commission Martinez inquired how the Open House went. Mr. Carter noted that it went well. We had 574 people come through. Commissioner Hanson asked if we had done something different this year. Mr. Carter replied that we did not. This year there was more of a steady stream throughout the entire night. Commissioner Hanson noted this is a good thing for community and thanked the staff for all their work. 9. Adjourn There being no further business, a motion was made by Martinez, second by Wendorff, to adjourn the meeting at 3:36 p.m. Motion carried unanimously. ATTEST: Monty Mo ow, esident 5 (' � /I/- J4 11:: -1 dl� Mark dirard, Secretary