05-24-2017 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, May 24, 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; Secretary Mark Girard;
Commissioner Robert Wendorff; and Commissioner Don Martinez. Others present:
General Manager Jeremy Carter; Attorney Marc Sebora.
1. Conflict of Interest
None
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
Finance Manager Jared Martig noted that some of the bills in the payment list were
also included on the previous month list due to the software conversion. It was
confirmed that all bills were paid only once.
Motion by Girard, second by Martinez, to approve the Consent Agenda. Motion
carried unanimously.
3. Approve 2016 Financial Audit — Presentation by Paul Harvego
Paul Harvego with the Conway, Deuth & Schmiesing audit firm presented the 2016
Hutchinson Utilities Commission independent audit report. Mr. Harvego noted the
changes in the report requirements due to Government Accounting Standards Board
(GASB) requirements.
Both the electric and natural gas divisions experienced an increase in revenues from
2015 to 2016.
Mr. Harvego summarized the communications portion of the report and the general
recommendations that consist of staff cross -training and capital asset accounting.
Staff should be trained annually on the process to report fraud.
Hanson questioned Mr. Harvego about the components of the prior period
adjustments which include the pension adjustment and the New Ulm packed gas
issue.
Motion by Hanson, second by Girard to approve the 2016 Financial Audit. Motion
carried unanimously.
4. Approve Financial Statements
General Manager Carter presented the financial statements. With the software
conversion in process, there are a number of notes to explain the statements
generated by the new software. Mr. Carter also noted that the April 2017 utility bills
included five fewer days, and this is reflected in the statements.
Financial Manager Jared Martig noted that an electric power cost adjustment and a
fuel cost adjustment credit have been applied to customers all four months in 2017.
Motion by Wendorff, second by Martinez to approve the financial statements.
Motion carried unanimously.
5. Open Forum
6. Communication
a. City Administrator — Matt Jaunich
i. Commercial and residential development is occurring all over the City,
including a large residential apartment complex.
ii. Denver Avenue SE should be open by the end of June.
b. Divisions
i. Dan Lang — Nothing to report
ii. Dave Hunstad —Work is occurring on 3 commercial projects, the Roberts Rd
and School Rd project, and 11 residential services
iii. Randy Blake — Emissions testing will be held next week; the Plant 2 MPCA air
permit is almost complete; work continues on the bid documents for units 6
and 7 and should be ready for distribution to the manufacturers, soon;
finishing capital projects
iv. John Webster — A meeting will be held with BP tomorrow regarding a prepaid
gas purchasing program
v. Jared Martig — New software is up and running except for the payroll module;
the Account Coordinator position has been conditionally offered to a
candidate; the interview process for the Administrative Coordinator is in
process
c. Legal — Marc Sebora
i. Nothing to report.
d. General Manager — Jeremy Carter
i. Kick off meeting with HDR is pending; a meeting with HUC and the City to
discuss the PILOT will be scheduled; and working on the cost of service study
7. Policies
a. Review Policies
i. Natural Gas Requirements and Placement
ii. Natural Gas Service Work
iii. Locating Customer's Underground Utilities — Gas
No changes were recommended at this time.
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b. Approve Changes
i. Meter Testing — Gas
The proposed changes are generally grammatical, and text has been added
to make the policy more straightforward and clear.
Motion by Hanson, second by Girard to approve the changes to the Natural
Gas Meter Testing policy. The motion carried unanimously.
8. Unfinished Business
a. Discussion on proposed Pipeline Imbalance settlement agreement with New Ulm
Public Utilities Commission
GM Carter noted that this liability has been on the HUC books for a year. New Ulm
has provided a settlement agreement and they approved and signed the agreement
at their meeting, yesterday. This will be on the Commission agenda in June.
Heartland Corn is in the process of discussing their settlement agreement with HUC.
Carter asked the Commission for any comments on the settlement agreement
documents.
Hanson asked if the settlement agreement amounts are what has been expected. It
was confirmed that they are and that the agreement, when signed, will protect HUC
from any future liability regarding this matter.
Hanson recommended moving forward with approving the settlements if the
Commission is comfortable doing so at today's meeting. The Commission indicated
they will act on the settlement agreement.
Motion by Hanson, second by Girard, to approve the New Ulm settlement
agreement. Motion carried unanimously.
9. New Business
a. RP3 Designation by Hutchinson Utilities Commission
Dave Hunstad noted this is the 10th consecutive year that HUC has been
awarded this designation and that this designation is in place until 2020. HUC is
recognized at the platinum level through the APPA. It was noted that this
designation is used in the economic development marketing materials for
commercial/industrial entities.
b. Consideration of Approval of Requisition #007218
John Webster noted there is a need to replace Natural Gas facilities near School
Rd and Roberts Rd intersection that serve the SW portion of the City.
Improvements and updates are needed to provide for effective flow. Three
bids/quotes were received. It is recommended that Q3 Contracting be awarded
the bid. They have completed work for HUC, previously.
Motion by Martinez, second by Wendorff to approve Requisition #007218.
Motion carried unanimously.
c. Consideration of Approval of the Cost of Service & Rate Design Study
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Mr. Carter noted that there were four responses to the HUC RFP. Two of these
are capable of doing only the study for the electric side of the business. Those
that can do both sides are a firm HUC has worked with previously and Utility
Financial Solutions. The Utility Financial Solutions proposal is more expensive
than the other firm, but they can complete the work in 12 weeks, have a larger
team and more resources assigned to this project, and will provide a fresh
perspective on the project. The references for the consultant have been
checked and are favorable. If approved, the kick-off meeting is tentatively
scheduled for June 2, 2017. For proprietary reasons, the consultant will not
meet the proposal requirement to provide an editable spreadsheet.
Motion by Girard, second by Hanson to approve the Cost of Service and Rate
Design Study. Motion carried unanimously.
d. Consideration of Approval of the General Manager's Contract Renewal
Marc Sebora provided information about the contract document. The contract
renewal is required as the current contract runs out May 27, 2017. The proposed
contract is open-ended with no sunset date, and includes new language that Mr.
Carter will be subject to the provisions of the Exempt handbook for employee
discipline. There is also a minor adjustment to the General Manager's salary as
his salary determination for 2017 is subject to the provisions of the current
Compensation Plan section of the HUC Exempt Employee Handbook.
Hanson added that he had inquired if HUC is covered or protected with the on-
going nature of the contract. Marc Sebora noted that Mr. Carter would be subject
to the discipline provisions of the non-union policy. Wendorff asked if the
contract contains language requiring notice to HUC from Mr. Carter if he chooses
to resign. The contract notes a required 30 -day advance notice.
Motion by Martinez, second by Hanson to approve the General Manager's
employment contract.
10.Adjourn
There being no further business, a motion was made by Girard, second by Wendorff
to adjourn the meeting at 4:04 p.m. Motion carried unanimously.
ATTEST,:-
Monty 10
rr President
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ark dirard, Secretary