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05-30-2018 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, May 30, 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; Secretary Robert Wendorff; Commissioner Don Martinez; General Manager Jeremy Carter; Attorney Marc Sebora Absent: Commissioner Mark Girard Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills At this time, President Monty Morrow noted that the Board would be striking item 8e from the agenda. Motion by Commissioner Hanson, second by Commissioner Martinez to approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements Jared Martig presented the financial statements. Due to the BS&A software conversion last April, the monthly numbers are not very comparable within each division since a large journal entry was needed to split the electric and natural gas division numbers. However, the year to date numbers are accurate. GM Carter noted HUC is trending above through April. Motion by Commissioner Wendorff, second by Commissioner Martinez to approve the financial statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator — Matthew Jaunich i 2"d Ave Bridge scheduled to close Friday June 1st ii. Century Ave project is scheduled for middle of July iii. With the storms, the City has been picking up branches on the boulevard. b. Divisions i. Dan Lang, Engineering Services Manager — Nothing to report ii. Dave Hunstad, Electric Transmission/Distribution Manager — 1. Working on projects 2. For the monthly outage report there was nothing to report for April. iii. Randy Blake, Production Manager- 1. Would like to thank the Commission for their thoughts during his father's passing. 2. Have a new Plant Operator starting Monday, June 18 3. Removal of Unit 2 is complete. In process of pouring foundations for Unit 6 & 7. 4. 6 & 7 Generators are scheduled to be shipped and should be here beginning of July 5. Working with MPCA on adding air permit for units 6 & 7 iv. John Webster, Natural Gas Division Manager- Nothing to report v. Jared Martig, Financial Manager- 1. Looking to wrap up audit in next couple of weeks and have presentation ready for June Commission Meeting c. Human Resources - Brenda Ewing — Nothing to report d. Legal — Marc Sebora — Nothing to report e. General Manager—Jeremy Carter i. Expect project costs for Units 6 & 7 to ramp up in the next couple of weeks. 6. Policies a. Review Policies i. License requirements for utility operation ii. Alcohol or Drugs-Exempt iii. Natural Gas Service Work iv. Locating Customer's Underground Utilities-Gas No changes recommended at this time. b. Approve Changes i. Smoking —as noted, adding in Minnesota Clean Air Act and City ordinances. ii. Alcohol or Drugs- Non Exempt- as noted, grammatical changes iii. Natural Gas Meter Requirements and Placement — as noted, grammatical changes iv. Meter Testing — as noted, grammatical changes Motion by Commissioner Hanson, second by Commissioner Wendorff to approve the policy changes as recommended. Motion carried unanimously. 7. Unfinished Business 8. New Business a. Approve Charge Offs Jared Martig presented the Charge Offs in the amount of$5,852.23. HUC will be presenting Charge Offs every 6 months. The largest single amount this time is $700. 2 After discussion, a motion by Commissioner Martinez, second by Commissioner Hanson to approve Charge Offs. Motion carried unanimously. b. Approve HDR Unit 6 & 7 Change Request GM Carter presented the change request for HDR. HDR is requesting a change order request of an additional $263,500 to complete the project along with the final commissioning of the new units later this fall. The additional costs represent involvement from senior personnel that was needed at a greater level than what was anticipated. The two largest areas for involvement were the design complexity with HUC's facility along with HDR's additional time to review and complete the final contract agreement. HUC is asking the Commission to approve the change request to get through these last few RFP's. HUC/HDR anticipates this will cover the remainder of the project. Within the project there is a 5% contingency built in of $751,948 so this change request will be covered by contingency dollars and still keep the project well within budget. GM Carter added that Staff did do its due diligence to see if this is normal and recommends the best position is to stay with this engineering firm. Randy Blake noted that HDR struggled with getting information from CAT. Commissioner Hanson asked if Staff still has confidence with HDR. GM Carter and Randy Blake agreed from a technical standpoint, HDR staff is the best you can get. After discussion, a motion by Commissioner Hanson, second by Commissioner Martinez to approve HDR Unit 6 & 7 Change Request. Motion carried unanimously. c. Approve Advertisement of Bids for Units 6 & 7 Installation GM Carter presented the Approval of Advertisement of Bids for Units 6 & 7 Installation. This is the next step to keep the project moving. The contractor shall complete the necessary structural, civil and mechanical systems installation. The mandatory pre-bid meeting will be on June 20, 2018 at 10:00a.m. at Plant 1. Received bids will be accepted until 2:00p.m. on July 2, 2018. A motion by Commissioner Wendorff, second by Commissioner Hanson to approve Advertisement of Bids for Units 6 & 7 Installation. Motion carried unanimously. d. Approve COS 2 Year Rate Design GM Carter presented the Electric & Natural Gas Rate Structure change. A revised Rate Structure was handed out and will be attached. Commission inquired what the next steps would include. GM Carter stated that official notice would be given to City Administrator Jaunich, which would then be delivered to the Council. Depending on time 3 frame, the information would then be discussed at the June 12 Council meeting. It would then be decided if a workshop is needed to talk with Staff and the Commission. Council would have a 30-day timeframe to veto. After discussion, a motion by Commissioner Hanson, second by Commissioner Wendorff to approve COS 2 Year Rate Design Resolution 18-02. Motion carried unanimously. e. Approve BP Natural Gas Pre-paid Program This item is removed from the agenda. 9. Adjourn There being no further business, a motion by Commissioner Martinez, second by Commissioner Wendorff to adjourn the meeting at 3:34p.m. Motion carried unanimously. Robert Wendorff, Se ATTEST: Monty Morr w, President 4