11-09-2018 HUCM Special MeetingMINUTES
Special Meeting — Hutchinson Utilities Commission
Thursday, November 9, 2018
Call to order — 9:00 a.m.
President Morrow called the meeting to order. Members present: President Monty
Morrow; Vice President Anthony Hanson; Secretary Robert Wendorff; Commissioner Don
Martinez; Commissioner Matt Cheney; General Manager Jeremy Carter; Attorney Marc
Sebora
Others present: Dan Lang, Dave Hunstad, Jared Martig, John Webster, Brenda Ewing,
Angie Radke.
The purpose of the special meeting is to discuss the Preliminary 2019 Budget, discuss
the Performance Pay Matrix, discuss the EDA Incubator Building and to Approve the
Agreement/Contract to Quade Electric for Electrical Installation of Units 6 & 7.
President Morrow asked the Commission if there was a motion to approve the Agenda.
Motion by Commissioner Martinez, second by Commissioner Cheney to approve the
Agenda. Motion carried unanimously.
GM Carter spoke about the Preliminary 2019 Budget. GM Carter highlighted for
Combined Divisions, Revenues are at $41.6m, expenses at $40.4m with a Net profit of
$1.1m. 2019 Retail Customer Sales, which includes $2.OM in Power Cost Adjustment
(PCA). Net increase in retail customer sales over 2018 Budget is $793k, which is a 3.1 %
increase.
Commissioner Hanson inquired if there were any classes that increased or decreased by
more than 1 %. GM Carter noted that all the classes are very consistent; any variation
would depend on weather.
GM Carter reviewed the Sales for Resales stating that there was an increase of $432k
over the 2018 budget. Other Revenues are consistent to what 2018 showed.
GM Carter reviewed the pictorial graphs. These graphs show the overall comparison as
to how the revenue is derived. The Consumption History graph shows a snapshot of
each customer class loads, which is fairly flat.
GM Carter spoke on the Electric Division Expense Budget Highlights. Continuing to work
on Health Insurance. Waiting for various carriers to provide quotes yet. Medica will
consider HUC a small group for 2019. As of now projected a 10% increase. PILOT was
increased up to 4% of revenues. Significant increase will be GRE/MISO transmission
expense of $750k.
After discussion of the Electric Division preliminary budget, GM Carter reviewed an
overview of the Natural Gas Division. Retail Customer Sales has a decrease of $428k.
At the start of 2018, HUC had not given back credits for the first 3 months. 3M and HTI
showed an increase in revenue from contract sales of $156k.
GM Carter concluded by reviewing the pictorial graphs and expense budget highlights of
the Natural Gas Division. Overall fairly consistent.
GM Carter asked the Commission if there were any questions.
After some discussion, GM Carter addressed the Commission to see if there are any
questions.
GM Carter spoke about the Performance Pay Matrix. GM Carter did have
communications with Staff and non-management about the Performance Pay Matrix. The
consensus was there is not a real need for a change, this is not an issue now what is the
incentive to change. In 2016, HUC instituted a grid by being market competitive to
maintain good employees. At that time, HUC already had multiple employees outside the
approved salary ranges for each position so a lump sum was created. As the grid has
moved, six of the twelve non-union employees are now at the top of the grid. Ideas about
creating a more goal structured system that employees can achieve have been
discussed.
President Morrow recognized Brenda Ewing, Human Resources Director, and inquired if
she had additional input to offer. Ms. Ewing talked about the various components that
HUC is cognizant of when considering employee compensation including, internal equity,
pay equity, and remaining competitive with our defined market. Ms. Ewing added that the
most recent job evaluation and compensation study was conducted in 2015/2016, and
recommended that a study be done every five years to ensure HUC compensation is
compliant and accurate.
After much discussion, the Commissioners agreed this is a sensitive conversation with
many dynamics. Looking to make a policy for years to come may be good for right now
but may not be right for the future. All companies struggle with staff and labor force along
with pay equity. Utilities today is in a different place then what it was years ago. This
topic will continue to stay on the radar and each commissioner should talk with Jeremy if
there are any additional questions.
President Morrow recapped the conversations that were held at the October 31
Commission meeting on the EDA Incubator Building. GM Carter noted that
Commissioners are at different positions. Everyone knows that EDA is good for the
community, so there is no right or wrong. Conversations about drafting something in the
bylaws have been discussed however, the Commission needs to decide. It is not
uncommon for public utilities to provide services to the EDA or other government city
functions. Philosophically where does HUC want to be? There are many options
available and whatever is decided now does not mean it cannot change in the future.
After viewpoints from all commissioners were made, it was decided that this topic needs
more consideration. In addition, within this time Commissioners need to take time to
communicate with GM Carter on any questions there may be.
GM Carter requested for the Approval of the Agreement/Contract to Quade Electric for
the Electrical Installation of Units 6 & 7 be tabled for today. GM Carter noted that Quade
Electric is having issues receiving the appropriate dollar amount on the Certificate of
Insurance. GM Carter added that Staff would give Quade Electric a week to try to get
that paperwork together.
President Morrow thanked Staff and the Commissioners for the discussions today.
There being no further business, a motion by Commissioner Hanson, second by
Commissioner Wendorff to adjourn the meeting at 10:28 a.m. Motion was unanimously
carried.
Robert Wendo , Secret
ATTEST:
Monty orrow, President