02-28-2018 HUCMMINUTES
Regular Meeting — Hutchinson Utilities Commission
Wednesday, February 28, 2018
Call to order — 3:00 p.m.
President Monty Morrow called the meeting to order. Members present: President Monty
Morrow; Vice President Anthony Hanson; Commissioner Mark Girard; Commissioner Don
Martinez; General Manager Jeremy Carter; Attorney Marc Sebora
Absent: Secretary Robert Wendorff
Conflict of Interest
2. Approve Consent Agenda
a. Approve Minutes
b. Ratify Payment of Bills
Motion by Commissioner Hanson, second by Commissioner Girard to approve the
Consent Agenda. Motion carried unanimously.
3. Approve Financial Statements
Jared Martig presented the financial statements. On the Gas Division, there was a
net profit increase in January 2018 by $128K over January 2017. There was not a
fuel cost adjustment for January 2018 due to depleting the rate stabilization fund in
December. An additional $137K was added to the fund in January.
On the Cash side, overall Cash increased due to an error in BP's December invoice
leading to not receiving the invoice until February.
GM Carter added on the Electric Division, Sales for Resale and purchase power
increased due to the Transalta contract
After discussion, a motion by Commissioner Girard, second by Commissioner
Martinez to approve the financial statements. Motion carried unanimously.
4. Open Forum
5. Communication
a. City Administrator — Matthew Jaunich- Absent
b. Divisions
i. Dan Lang, Engineering Services Manager —Nothing to report
ii. Dave Hunstad, Electric Transmission/Distribution Manager —
1. For the monthly outage report there was nothing to report for January, so
included is the annual report for 2017. HUC is trending well. If there are
no outages for the month, this type of report format will be reported
quarterly.
iii. Randy Blake, Production Manager -
1. Disassembly of Unit 2 is continuing.
2. Reiner Contracting is well underway of finalizing the contract just waiting
on the performance & payment bonds. Communication from Jim Booty
will take place when everything is finalized and the project will then
proceed.
3. Had a Mechanic opening. Mike Gabrielson who was a plant operator has
now been hired as a mechanic.
4. Currently now have an Internal posting up for a Plant Operator position
which was vacated by Mike Gabrielson. If HUC does not fill internally, this
will be posted externally.
5. CAT drawings are due this month. CAT engineers will be in Hutchinson
next week.
iv. John Webster, Natural Gas Division Manager -
1. Completing some NG work for new facilities at plant 1
v. Jared Martig, Financial Manager- Nothing to report
c. Human Resources - Brenda Ewing — Absent
d. Legal — Marc Sebora — Nothing to report
e. General Manager — Jeremy Carter
i. Working on 2018 objectives
ii. Following up on COS Study
6. Policies
a. Review Policies
i. Electric Service Requirements & Charges
ii. Temporary Service — Electric
iii. Hiring
iv. Probationary Period Upon Hiring
v. Temporary Employees
No changes recommended at this time.
b. Approve Changes
i. CIP Rebate Level of Authority - as noted, adding clarity
ii. Service Beyond City Limits of Hutchinson - as noted, grammatical changes
clarification
iii. Purchasing Policy - Had Marc Sebora review and give more minimum
requirements and flexibility.
Motion by Commissioner Hanson, second by Commissioner Girard to approve the
policy changes as recommended. Motion carried unanimously.
7. Unfinished Business
a. Update on Pack Gas Discussions -
GM Carter noted HUC received a draft settlement agreement today, will be
reviewing this document with Marc Sebora this week and should bring something
forth in March.
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8. New Business
a. Approval of Extension of Northern Natural Gas Transportation Contract
#102733
John Webster presented the Extension of Northern Natural Gas Transportation
Contract #102733. This provides a secondary supply of natural gas to the City
of Hutchinson in the event of a catastrophic failure to the HUC natural gas
transmission line. A small price to pay to keep two stations available here for
an emergency. Motion by Commissioner Hanson, second by Commissioner
Martinez to approve Extension of Northern Natural Gas Transportation Contract
#102733. Motion carried unanimously. (Contract attached.)
b. Approval of (2) 2018 GMC 1/2T Pickups Requisition #7461
At this time, GM Carter reviewed the Fleet program. Dave Hunstad has
inventoried all HUC's equipment and has maintained the fleet management
program of changes. Important for the Commission to know that HUC is
managing and keeping within the guidelines.
Dan Lang presented Requisition #7461 to purchase (2) 2018 GMC 1/2T Pickups
in the amount of $52,158.44. One pickup is for the Engineering Services
department and one pickup is for the Electric production department. Motion by
Commissioner Girard, second by Commissioner Hanson to approve Requisition
#7461 for (2) 2018 GMC 1/2T Pickups. Motion carried unanimously.
c. Approval to Allow Purchase of Pipeline Repair Fittings for Inventory Requisition
#7473
John Webster presented Requisition #7473 to Allow Purchase of Pipeline Repair
Fittings for Inventory in the amount of $26,954.56. A few months ago, HUC had
a suspected pipeline hit. If the line would have been hit HUC does not have
anything on hand to repair it. This is something HUC has discussed since 2014.
In light of what happened, HUC decided to look at what parts can be on hand in
case a line is hit. Staff has priced three different manufactures. The
recommendation is PLIDCO, HUC has more experience with this company and
this includes a 5 -year warranty. Motion by Commissioner Martinez, second by
Commissioner Girard to approve Requisition #7473 to Allow Purchase of
Pipeline Repair Fittings for Inventory. Motion carried unanimously.
d. Approval of new Bucket Truck Requisition #7482 & Requisition #7487
Dave Hunstad presented Requisition #7482 & Requisition #7487 for Approval of
new Bucket Truck in the amount of $143,414.85. This will be replacing a 2008
40' Bucket Truck.
Commissioner Martinez inquired about the use of the bucket truck for HUC.
Dave Hunstad explained this bucket truck is for maintaining the substations,
street lights, as well as daily operations because it is fitted with a service body.
So it doesn't just function as a bucket truck. Motion by Commissioner Martinez,
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second by Commissioner Hanson to approve Requisition #7482 & Requisition
#4787 for new Bucket Truck. Motion carried unanimously.
e. Discussion on Cost of Service Study
President Morrow recapped the special meeting from a couple of weeks prior. It
was a good discussion and GM Carter needed to go back to Mr. Kasbohm and
Staff for more conversations.
GM Carter informed the Commission that he did talk with Mr. Kasbohm, the next
step needed is to see where, and what direction the Commission wants to go.
Mr. Kasbohm does not see a concern with a 3 -year rate track, or if it would be a
longer horizon path of 5-10 years. It also depends on how close the Commission
wants to be between classes. These scenarios can be crafted to the comfort
level of the Commission and Staff.
Commissioner Martinez noted the approach to a longer horizon to make a better
fit is ideal. Not talking major changes and can still achieve the end goal without
any negative feedback
Commissioner Hanson agreed. Having a 10 -year horizon and then revisit in 3
years can show what might be happening in the community.
GM Carter asked the Commission if they would like to have Mr. Kasbohm create
a model for 5-7-10 years.
Commissioner Martinez requested 7 and 10 year. This will give the Commission
an idea but realizing it can change quickly -community changes, legislation
changes, and industry changes.
GM Carter inquired about 5-10% equitability between classes.
The Commission would like to see 5%. There was not a rate class that needed
more than 10% and 5% could be very incremental.
The Commission would like to see the impact to each class.
GM Carter noted that he has everything he needs for Mr. Kasbohm.
Review 2017 Annual Distributed Generation
L Dave Hunstad presented the Distributed Generation 2017 report. Prior to
2017, HUC was required to file this report with the Department of Commerce
and the Minnesota Public Utilities Commission. Attached the Commission
will find the four solar customers in town and their annual usage. HUC
already has policies in place and now annually every February the
Commission will see this report.
9. Adjourn
There being no further business, a motion by Commissioner Hanson, second by
Commissioner Girard to adjourn the meeting at 3:49p.m. Motion carried
unanimously.
ATTEST:
Monty IVrrow, President
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Nobert'l"!�_endorff, Secret