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12-19-2018 HUCCPHUTCHINSON UTILITIES COMMISSION AGENDA REGULAR MEETING December 19t", 2018 3:00 p.m. 1. CONFLICT OF INTEREST 2. APPROVE CONSENT AGENDA a. Approve Minutes b. Ratify Payment of Bills 3. APPROVE FINANCIAL STATEMENTS 4. OPEN FORUM 5. COMMUNICATION a. City Administrator b. Divisions C. Legal d. Human Resources e. General Manager 6. POLICIES a. Review Policies i. Financial Reserve Policy ii. Identity Theft- Red Flag Program iii. Surplus Property Policy iv. Deferred Compensation v. Personal Use of Utility Facilities & Equipment vi. Recognition Policy vii. Required Clothing- Nonexempt Only viii.Small Hand Tools- Nonexempt Only ix. Health & Safety x. Unsafe Conditions or Practices xi. Employee Right -to -Know xii. Appendix A xiii. Appendix B xiv. Appendix C xv. Appendix D b. Approve Changes i. Payments of HUC Payables ii. Safety Glasses -Nonexempt Only iii. Accidents & Injuries 7. UNFINISHED BUSINESS a. None 8. NEW BUSINESS a. Approve 2019 Budgets & 5 Year CIP b. Approve Moving 2019 Pay Grid C. Approve Charge -Offs d. Approve Fagen Change Order e. Conduct the Performance Review of Hutchinson Utilities Commission General Manager Pursuant to Minnesota Statute 13D.05 Subd. 3(a) 9. ADJOURN MINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, November 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; Secretary Robert Wendorff; Commissioner Don Martinez; Commissioner Matt Cheney; GM Jeremy Carter; Attorney Marc Sebora: Conflict of Interest 2. Approve Consent Agenda a. Approve Minutes b. Ratify Payment of Bills Motion by Commissioner Martinez, second by Commissioner Cheney to approve the Consent Agenda. Motion carried unanimously. 3. Approve Financial Statements Jared Martig presented the financial statements. Last month Gas Division showed a decrease in revenue by $35K due to a calculated fuel error, which was corrected for this month. GM Carter added on Electric Division Sales for Resales is up from last October. Transalta Energy Sales for Oct 2018 was $112,911 compared to last year of $30,123. On the Investment Report, there is a U.S. Treasury Bill coming due Dec 6. The Treasury Bill will not be reinvested due to Units 6 & 7 payments on mechanical and electrical that need to be paid. Divisions are running on trend, along with loads being consistent from year to year. GM Carter noted that a graph was added for the Combined Division Financial Report. Motion by Commissioner Hanson, second by Commissioner Wendorff to approve the financial statements. Motion carried unanimously. 4. Open Forum 5. Communication a. City Administrator— Matthew Jaunich i. Major construction has been completed for the year. ii. Development Wise — Expansion of Woodstone, Townhomes on Century Ave and Apartments on Denver iii. Getting ready for budgets b. Divisions i. Dan Lang, Engineering Services Manager — Nothing to Report ii. Dave Hunstad, Electric Transmission/Distribution Manager 1. Finishing up projects for the year iii. Randy Blake, Production Manager 1. Construction is going well for Units 6 & 7. Staff is waiting for a permit on a piping project that is being worked on that has to go to an underground tank. Also waiting for a DOT permit to work within the confines of HWY 7. Many people on site working. iv. John Webster, Natural Gas Division Manager- Absent v. Jared Martig, Financial Manager - Nothing to Report c. Human Resources - Brenda Ewing — Nothing to Report d. Legal — Marc Sebora — Nothing to Report e. General Manager — Jeremy Carter i. Wrapping up budgets and CIP. ii. Waiting on Health Insurance. Medica has quoted us as a small group at 11.12%. Waiting to hear from Health Partners. iii. Working on Property Liability Insurance. May be adding insurance on Natural Gas transmission line. iv. Fleet schedule will be finalized this week. Looking at having a workshop in December. Commissioners agreed that a workshop is needed. Angie will set up a Special meeting. 6. Policies a. Review Policies i. Landlord Acknowledgement ii. Inserts with Utility Bills iii. Training & Education Assistance iv. Workplace Accommodation v. Unpaid Extended Leave of Absence vi. Family Death vii. Emergency Leave viii. Military Leave ix. Jury, Witness, or Board Duty x. Volunteer Fire or Rescue Squad Duty xi. School Conference Leave xii. Bone Marrow/Organ Donation Leave No changes recommended at this time. b. Approve Changes i. After Hours Reconnection Policy - As noted. Make timeframes consistent. ii. Retirement Program - As noted. Changing title. Motion by Commissioner Hanson, second by Commissioner Martinez to approve the policy changes as recommended. Motion carried unanimously. 7. Unfinished Business 8. New Business 2 a. Approve Non -Waiver of Tort Liability Limits for General Liability Mr. Martig presented the requirement by League of Minnesota Cities Insurance Trust. Staff is recommending to not waive the tort liability limits. If HUC does waive this, then HUC must purchase excess liability coverage. In the past, HUC has not waived the municipal tort limit. After discussion, a motion by Commissioner Martinez, second by Commissioner Cheney to Approve Non -Waiver of Tort Liability Limits for General Liability. Motion carried unanimously. b. Discuss Date for Performance Review of Hutchinson Utilities General Manager. President Morrow recognized Brenda Ewing, Human Resources Director. Ms. Ewing discussed the Performance Review of Hutchinson Utilities General Manager. Per General Manager's contract with Utilities, an annual Performance Review is to be conducted. Generally, this has occurred in December at the scheduled Commission Meeting or a Special Meeting. It is up to the commission on when the Performance Review should be held. GM Carter would have the opportunity to decide if it would be an open or closed session. When the date is decided, review forms will be sent to all the Commissioners. GM Carter is reviewed in multiple different areas, including Organizational Management, Fiscal Management, Program Development, Relationship and Communication with the Commission, Long Range Planning and Relationship with Public and Outside Organizations. After Commissioners have completed and returned review forms, all results will be compiled for discussion at the review. President Morrow asked GM Carter and the Commissioners to have the review at the December 19, 2018 Commission Meeting. GM Carter and Commissioners agreed to the date. c. Discussion of re -appointment of Don Martinez GM Carter spoke of the re -appointment of Don Martinez. GM Carter along with Mr. Sebora, review annually what board members and officer positions need re- appointment. At the end of 2018, Commissioner Martinez's position is up for re -appointment. Commissioner Martinez was filling in for a previous term that was held by Donna Luring. The process HUC goes through is to see if the candidate wants to be re -appointed and stay on, if so the information is given to the Mayor and City Administrator of the City of Hutchinson. It would be recommended that HUC would like to re -appoint Commissioner Martinez to a first full year five term. Commissioner Martinez is willing to stay on and be re- appointed. Commissioner Martinez concurred. All Commissioners agreed with re- 3 appointment of Commissioner Martinez. d. Formal Action -Discussion of EDA Incubator Building Covered Utility Services. President Morrow recapped the EDA Discussion from the previous meeting on November 9, 2018. Today the Commissioners will be putting it to vote on whether to cover the utility services of the EDA Incubator Building Commissioner Hanson inquired if the Commissioners are to discuss if there is support, if some language should be created with some starts and stops. President Morrow stated that a direction would be made one way or the other. Bringing it to a motion and voting `yay' or `nay'. If Commissioners want to discuss before it is brought to a formal vote that may be something that can be entertained. President Morrow recognized Mr. Sebora, and inquired if that is something that can be entertained. Mr. Sebora stated it could be played out either way. The Commissioners have had the time to think about this topic, discussions have been made and now it is time to move forward with the motion or not. If the Commission does want to move forward, direction needs to be given to GM Carter and myself so something can be drafted, otherwise if the Commission wants to set a dollar amount that is something that can be voted on as a motion as well. There are many options that the Commission have talked about in the past; does the Commission want the amount to be an annual amount, should something be written as part of a policy, should the by-laws be amended, is EDA going to be the only group that is entitled to that contribution. On the other side, this is new territory; does HUC want to enter into this. HUC may receive other requests from other bodies. Either way a decision needs to be made today. After more discussion, Commissioner Hanson made a motion, second by Commissioner Cheney for GM Carter and Attorney Marc Sebora to move forward and create language on a policy to consider the EDA's financial request with certain starts and stops that follow State Statute. Motion was not carried unanimously. President Morrow asked for a roll call vote. Commissioner Hanson — yay Commissioner Wendorff- nay President Morrow — nay Commissioner Martinez — nay Commissioner Cheney — yay Vote was 3 nay — 2 yay. President Morrow thanked the Commission and Staff for the great discussion. Commissioner Wendorff pointed out that this does not show HUC as not 12 supporting the EDA, EDA is a good program. Commissioner Cheney added if down the road EDA comes back with different language, that HUC and the Commission should keep an open mind for further discussion. 9. Adjourn There being no further business, a motion by Commissioner Cheney, second by Commissioner Wendorff to adjourn the meeting at 3:39p.m. Motion carried unanimously. ATTEST: Monty Morrow, President 5 Robert Wendorff, Secretary MINUTES Special Meeting — Hutchinson Utilities Commission Wednesday, December 12, 2018 Call to order — 7:30 a.m. President Morrow called the meeting to order. Members present: President Monty Morrow; Vice President Anthony Hanson; Secretary Robert Wendorff; Commissioner Don Martinez; General Manger Jeremy Carter; Attorney Marc Sebora Absent: Commissioner Matt Cheney Others present: Dan Lang, Dave Hunstad, John Webster, Angie Radke. The purpose of the special meeting is to have a 2019 Budget Workshop. GM Carter reviewed the documents that were emailed to the Commissioners last week. GM Carter started the meeting with the Fleet Management program. GM Carter had asked Staff to review all the equipment/fleet and create a complete inventory list and prioritize the equipment/fleet. Points of consideration were the type of equipment, future replacement value, estimated useful life and estimated replacement year. Discussions amongst Staff were the prioritizing of Equipment to Critical, Very Important, Important and Future Consideration; along with buying, leasing or reallocating equipment to other areas. President Morrow inquired of Dave Hunstad, Electric Transmission/Distribution Manager, how consolidating of equipment has gone in the past. Mr. Hunstad noted that it has worked out. GM Carter reviewed the breakout of HUC's total equipment between Light and Heavy equipment. Majority of the value is in the Heavy Equipment at $1.8M, where Light Equipment is $635K. Staff prioritized HUC's vehicles to HUC's Operations. HUC's annual funding requirements are also considered. HUC also has to value time; there are only certain months of the year to try and complete jobs. Vehicles that provide operational efficiency along with needed equipment to complete job tasks efficiently are also considered as part of the long-range fleet/equipment program. GM Carter spoke of the pictorial graphs, which is a 10-year snapshot. In the past, equipment annual funding was $150K-$175K to maintain a consistent funding level. However now it is looking to be $175-$200K a year. As technology changes, so will some of HUC's vehicles. Management wants to make sure the Commissioners are comfortable with that amount of funding on a yearly basis. HUC needs to look into the future to see if electric vehicles or other options should be considered. Last piece of the Fleet Management Program for the Commission to consider is HUC has not designated a reserve of cash for the Fleet program. Does the Commission want to see specific cash designation for Fleet? If so, a line would show on the designation report as Fleet Program. Something for the board to consider. GM Carter noted this leads the Special Meeting to the Financial Reserve Policy. The Financial Reserve policy is on the Commission Agenda for next week; however, a more in depth look is important. GM Carter asked if the Commissioners are comfortable with the amounts of current designations. Commissioner Hanson inquired of the 60 to 90 days operating cash and excess cash being applied to capital reserves. GM Carter stated the Capital Reserve is for 5 years of normal infrastructure maintenance and upkeep at $3.45M; however, the Reserve does not cover new acquisitions or major capital expenditures. GM Carter probed the Commissioners to the comfort level of how much cash balance is desired in Operating Reserve. Should Reserves be more towards 60 day than 90 day? HUC's policy reflects Restricted Reserves, Capital Reserve, and Operating Reserves (which includes the PILOT Reserve). After discussion, GM Carter added if there is a consensus with a change in the Financial Reserve, it could be discussed next week at the Commission meeting. Commissioner Martinez stated that right now it appears 70 percent of dollars are fixed and 30 percent is not reserved or is earmarked as a placeholder for unforeseen things. From a management standpoint, this makes sense. GM Carter added there could still be things that might surface so Staff tries to reserve money for those circumstances. Commissioner Hanson inquired when the right time to implement would be; is it at end of year or during strategic planning. After more discussion, GM Carter informed the Commissioners to ask any other questions before next Wednesday. GM Carter reviewed the 2019 budget. Overall, a $60K change was made since the preliminary budget meeting, this effected three areas. Operating dollars were increased to update HUC's security system, increase insurance coverage on the NG transmission line and a slight increase in the budget for Health Insurance premiums. HUC is running a high-pressure transmission line, if repairs are needed the costs incurred could be upwards of $1 M. These costs would be for repair; which could take weeks, additional transportation costs from another party and / or gas revenue loss. Additional insurance for the Electric Division Transmission lines was not increased. Costs for additional electrical transmission insurance was nearly double the amount of NG Transmission insurance and Staff felt that there are redundancies and less risk exposure. Therefore, transmission infrastructure is betterto self -insure. HUC can also self -generate so the risk of everything going out is unlikely and unlikely for long periods of time. The piece that made the Electric insurance higher was everything is above ground. The last increase is the adjustment in Health Insurance. Health insurance increased to 11.12 percent, which the budget showed 10 percent increase. GM Carter added that Workers Comp may go down but that final number will not be known until middle of January. GM Carter noted that Commissioner Hanson had inquired about Energy Consumption and if any class changes were more than 1 percent. Consumption is fairly flat; however, Small General has ticked up a little to 2.8%. Large General up to 1.45% with the addition of Uponor. There was a slight decrease on the industrial side estimated due to operations and energy efficiency. Commissioner Wendorff inquired if the Cost of Service Study that was done earlier impacted the budget. GM Carter stated yes and no. Revenue changed slightly between classes but the bottom line number had no impact, which was the goal. After additional discussion, GM Carter looked to the Commissioners for additional questions or comments. Commissioner Hanson inquired about what was contributing to the personnel costs. GM Carter stated that it is a combination of salary, benefits, Work Comp, Pension, FICA, etc. Many areas increase incrementally as wages increase. GM Carter also noted that every time salary and benefits increase so do the employer contributions to those various line items. On average, HUC should see a 4-5 percent increase every year if the current organizational structure stays in place for the foreseeable future. Commissioner Hanson inquired about the investment in Unit 8. Dan Lang, Engineering Services Manager, stated that with talking to Randy Blake, Production Manager, Unit 8 is still a good solid base unit with life in it. President Morrow inquired if there were additional questions or comments. President Morrow thanked GM Carter and Staff for all of the work that was done. There being no further business, a motion by Commissioner Martinez, second by Commissioner Wendorff to adjourn the meeting at 8.43 a.m. Motion was unanimously carried. 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N U) oo �4 ,i 1- 00 00 00 Oo Oo Oo Oo o0 o0 o0 oo oo oo oo oo oo oo O U q O O O O O O O O O O O O O O O O O N f7 J-) N N N N N N N N N N N N N N N N N N M•• ,T, U Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln Ln O O O O O O O O O O O O O O O O O '.D U H q Cia H H H H H H H H H H H H H H H H H w H E� H H H D EO � N z\ O " z\ H N U N � �D 0, O x 1-1 H o +) a N a O \ , N S4-1 p N U a \ U) a Q w � a O a z w w w w FX El � Q a z x m u � w Q u x u w x u ro a ZH- 14 U N U � H a 1i x I--� M � M Z:7) O O -li (r) 00 � li +-) CD (0 N f7 J-) x U H .D Q U 03 un N O 61 f Ln of 3' ,3' H of O M H N N of un O M O M 61 N 61 Ln* 00 N H CD h 00 �' O N H Ln � M CDl0 O N un M 0 00 � 00 00 0 O O O O O O I I I I I I O N H N N O O 61 61 61 61 O I I I I I I O O O O h N 31 3' 3' 3' H go O H H N N I N U1 11 U1 W 0) W l) N u CD 00 a a � w a � Z � w x n W n N z n O a 4-4 H [T] 0 x U I a U rt r1 W U H W .11 Ra4 rt H ' 11 w .1 W 4w-a f�-1 0 N a u O u H O a H z w N a � H z w Q a w w z z O O z � Q H w � a a w 0 0 a U 3 O O f1 H n o w Ca W a H E-i �D �D N N O O O 61 CD W W W 61 O 0 0 o N co w w U U w w w w w co co C7 C7 C7 C7 C7 F, N u U U H H z z N O N O N O N O N O N H H un O un O un O l0 O l0 o - - w H H H H H HUTCHINSON UTILITIES COMMISSION COMBINED DIVISIONS FINANCIAL REPORT FOR NOVEMBER, 2018 WPf��fi��VY�'��iiii��(((�I�Illlllllll h�f l�((((((((��Illlllllll �llllllllll ��iiiii��(((�I�IIIIIIIIII 191.7% of Year Comp. 2018 2017 Di %Chnq 2018 2017 Di %Chnq Full YrBud %of Bud Combined Division Customer Revenue $ 3,130,421 $ 3,074,661 $ 55,760 1.8% $ 33,069,138 $ 31,938,579 $ 1,130,559 3.5% $ 35,763,605 92.5% Sales for Resale $ 204,258 $ 180,357 $ 23,901 13.3% $ 2,885,563 $ 1,988,774 $ 896,788 45.1% $ 2,519,200 114.5% NU Transportation $ 80,767 $ 74,899 $ 5,867 7.8% $ 858,731 $ 830,777 $ 27,954 3.4% $ 739,440 116.1% Electric Division Transfer $ 54,697 $ 54,308 $ 389 0.7% $ 601,669 $ 597,391 $ 4,278 0.7% $ 656,366 91.7% Other Revenues $ 45,494 $ 43,220 $ 2,274 5.3% $ 583,707 $ 663,592 $ (79,886) (12.0%) $ 492,808 118.4% Interest Income $ 30,645 $ 11,460 $ 19,185 167.4% $ 319,037 $ 130,046 $ 188,991 145.3% $ 100,000 319.0% TOTAL REVENUES $ 3,546,282 $ 3,438,905 $ 107,377 3.1% $ 38,317,844 $ 36,149,160 $ 2,168,684 6.0% $ 40,271,419 95.1% Salaries & Benefits Purchased Commodities Transmission Generator Fuel/Chem. Depreciation Transfers (Elect./City) Operating Expense Debt Interest TOTAL EXPENSES NET PROFIT/(LOSS) $ 457,405 $ 427,617 $ 29,787 6.97% $ 5,326,376 $ 5,044,955 $ 281,420 5.6% $ 6,363,429 83.7% $ 1,825,976 $ 1,739,900 $ 86,076 4.9% $ 18,667,516 $ 18,054,961 $ 612,555 3.4% $ 19,600,000 95.2% $ 197,531 $ 185,455 $ 12,076 6.5% $ 2,277,414 $ 2,311,711 $ (34,297) (1.5%) $ 2,630,000 86.6% $ 38,539 $ 31,406 $ 7,133 22.7% $ 1,083,484 $ 845,656 $ 237,828 28.1% $ 992,082 109.2% $ 325,667 $ 317,333 $ 8,333 2.6% $ 3,582,333 $ 3,490,667 $ 91,666 2.6% $ 3,908,000 91.7% $ 158,986 $ 154,003 $ 4,984 3.2% $ 1,748,849 $ 1,694,028 $ 54,821 3.2% $ 1,907,835 91.7% $ 120,413 $ 315,766 $ (195,353) (61.9%) $ 1,765,747 $ 2,204,977 $ (439,230) (19.9%) $ 2,490,809 70.9% $ 98,621 $ 61,258 $ 37,362 61.0% $ 1,134,135 $ 694,090 $ 440,045 63.4% $ 1,280,863 88.5% $ 3,223,138 $ 3,232,740 $ (9,602) (0.3%) $ 35,585,854 $ 34,341,045 $ 1,244,808 3.6% $ 39,173,018 90.8% $ 323,144 $ 206,165 $ 116,979 56.7% $ 2,731,990 $ 1,808,114 $ 923,876 51.1% $ 1,098,401 248.7% November November YTD YTD 2018 2017 Change 2018 2017 Change Gross Margin % 34.0% 35.7% -1.7% 34.3% 32.8% 1.5% Operating Income Per Revenue $ (%) 10.6% 6.8% 3.7% 8.5% 5.8°% 2 7°% Net Income Per Revenue $ (%): 9.1% 6.0% 3.1% 7.1% 5.0% 2.1% 2018 HUC Budget Target 32.2% IIIIIIIIIIIIIIIIIII 10NNNNNNNN�1 5.2% fN��IINIINIdI 2.7°% Just as a reminder due to the early meeting date that some estimates on large dollar items were used and some smaller items were not recorded at all. HUTCHINSON UTILITIES COMMISSION ELECTRIC DIVISION FINANCIAL REPORT FOR NOVEMBER, 2018 91.7% of Year Comp. 2018 2017 2 . %Chna 2018 2017 2 . %Chna Full YrBud %of Bud Electric Division Customer Revenue $ 1,863,067 $ 1,906,238 $ (43,171) (2.3%) $ 23,397,358 $ 23,240,158 $ 157,200 0.7% $ 25,325,189 92.4% Sales for Resale $ 204,258 $ 180,357 $ 23,901 13.3% $ 2,885,563 $ 1,988,774 $ 896,788 45.1% $ 2,519,200 114.5% Other Revenues $ 19,013 $ 19,782 $ (769) (3.9%) $ 247,713 $ 400,881 $ (153,168) (38.2%) $ 208,800 118.6% Interest Income $ 16,716 $ 5,730 $ 10,986 191.7% $ 174,853 $ 65,023 $ 109,830 168.9% $ 50,000 349.7% TOTAL REVENUES $ 2,103,055 $ 2,112,107 $ (9,052) (0.4%) $ 26,705,486 $ 25,694,836 $ 1,010,650 3.9% $ 28,103,189 95.0% Salaries & Benefits $ 362,486 $ 341,091 $ 21,395 6.3% $ 4,191,002 $ 3,958,536 $ 232,466 5.9% $ 4,942,964 84.8% Purchased Power $ 1,059,064 $ 1,079,469 $ (20,405) (1.9%) $ 13,431,967 $ 13,063,786 $ 368,181 2.8% $ 14,000,000 95.9% Transmission $ 197,531 $ 185,455 $ 12,076 6.5% $ 2,277,414 $ 2,311,711 $ (34,297) (1.5%) $ 2,630,000 86.6% Generator Fuel/Chem. $ 38,539 $ 31,406 $ 7,133 22.7% $ 1,083,484 $ 845,656 $ 237,828 28.1% $ 992,082 109.2% Depreciation $ 241,667 $ 233,333 $ 8,333 3.6% $ 2,658,333 $ 2,566,667 $ 91,666 3.6% $ 2,900,000 91.7% Transfers (Elect./City) $ 128,224 $ 123,408 $ 4,816 3.9% $ 1,410,469 $ 1,357,491 $ 52,978 3.9% $ 1,538,693 91.7% Operating Expense $ 89,868 $ 276,584 $ (186,716) (67.5%) $ 1,209,856 $ 1,600,635 $ (390,779) (24.4%) $ 1,613,834 75.0% Debt Interest $ 42,446 $ $ 42,446 #DIV/0! $ 516,210 $ 20,248 $ 495,962 2,449.4% $ 606,763 85.1% TOTAL EXPENSES $ 2,159,825 $ 2,270,748 $ (110,923) (4.9%) $ 26,778,735 $ 25,724,730 $ 1,054,005 4.1% $ 29,224,336 91.6% NET (56,770) $ (158p,641))/ $/ 1/01,8(((71 (64.2%) $ (73,249) $ (29,894) $ ((433/,�3(5(((6) 145.0% $ (1,121,147) 6.5% F }IR'(rK� lllllllllllll�� 91.7% of Year Comp. (/�/P �(�R(��O1�yFIIIT/(LOSS)$((( W �I�IRIY�fi 100" , Illllllllll lll� ��11lll 2018 2017 2 . %Chna 2018 2017 2 . %Chna Full YrBud %of Bud Electric Division Residential 4,042,594 3,897,856 144,738 3.71% 47,399,470 44,828,258 2,571,212 5.74% 50,432,797 94.0% All Electric 292,316 247,527 44,789 18.09% 2,296,045 2,072,190 223,855 10.80% 2,611,705 87.9% Small General 1,587,311 1,481,281 106,030 7.16% 17,493,367 16,310,603 1,182,764 7.25% 17,085,853 102.4% Large General 6,303,850 6,041,963 261,887 4.33% 72,905,290 68,951,343 3,953,947 5.73% 79,262,499 92.0% Industrial 9,036,000 9,651,000 (615,000) (6.37%) 119,100,000 124,319,000 (5,219,000) (4.20%) 134,707,856 88.4% Total KWH Sold 21,262,071 21,319,627 (57,556) (0.27%) 259,194,172 256,481,394 2,712,778 1.06% 284,100,710 91.2% September November YTD YTD 2018 HUC 2018 2017 Change 2018 2017 Change Budget Target Gross Margin % 26.6% 27.7% -1.1% 26.7% 26.1% 0.6% 24.0% Operating Income Per Revenue $ (%) -1.6% -8.1% 6.5% 0.7% -0.6% 1.3% -2.0% ��IIIIIIIIIIIIIIII Net Income Per Revenue $ (%): -2.7% -7.5% 4.8% -0.3% -0.1% -0.2% -4.0% 0%-5% Customer Revenue per KWH: $0.0876 $0.0894 -$0.0018 $0.0898 $0.0902 -$0.0003 $0.0886 11llllllllllllllll� Total Power Supply Exp. per KWH: $0.0719 $0.0713 $0.0007 $0.0748 $0.0731 $0.0017 $0.0750 Overall net income increased by $101,871 mostly due to $174,000 in new bond financing expensed in November 2017. Without that expense last year and an additional $42,446 in interest expense in 2018, net income would have remained similar between the two years. Sales for Resale of $204,258 consisted of $24,131 in market sales, $35,600 in the monthly tolling fee from Transalta, $28,527 in Transalta energy sales, and $116,000 in capacity sales to SMMPA. November 2017 Sales for Resale of $180,357 consisted of $17,455 in market sales, $34,400 in monthly tolling fees from Transalta, $32,502 in Transalta energy sales, and $96,000 in capacity sales to SMMPA. November 2016 Sales for Resale of $162,420 consisted of $6,316 in market sales, $34,400 in Transalta tolling fees, $55,204 in Transalta energy sales, and capacity sales to SMMPA for $66,500. Overall Purchased Power decreased by $20,405. MRES purchases decreased by $8,256 and market purchases/MISO costs decreased by $12,149. November power cost adjustment was $.00258/kwhr bringing in an additional $55,044 in revenue for the month and $1,456,854 YTD. Last year's power cost adjustment for November 2017 generated $101,312 in additional revenue for the month and $1,614,026 YTD. HUTCHINSON UTILITIES COMMISSION GAS DIVISION FINANCIAL REPORT FOR NOVEMBER, 2018 2018 2017 2 . Gas Division Customer Revenue $ 1,267,354 $ 1,168,423 $ 98,931 Transportation $ 80,767 $ 74,899 $ 5,867 Electric Div. Transfer $ 54,697 $ 54,308 $ 389 Other Revenues $ 26,481 $ 23,438 $ 3,043 Interest Income $ 13,928 $ 5,730 $ 8,198 TOTAL REVENUES $ 1,443,228 $ 1,326,799 $ 116,429 Chna 2018 2017 2 . 8.5% $ 9,671,781 $ 8,698,422 $ 973,359 7.8% $ 858,731 $ 830,777 $ 27,954 0.7% $ 601,669 $ 597,391 $ 4,278 13.0% $ 335994 $ 262,711 $ 73,283 143.1% $ 144:184 $ 65,023 $ 79,161 8.8%1 $ 11,612,358 $ 10,454,324 $ 1,158,035 Salaries & Benefits $ 94,918 $ 86,526 $ 8,392 9.7% $ 1,135,374 $ 1,086,420 $ 48,954 Purchased Gas $ 766,913 $ 660,432 $ 106,481 16.1% $ 5,235,548 $ 4,991,175 $ 244,373 Operating Expense $ 30,546 $ 39,182 $ (8,636) (22.0%) $ 555,891 $ 604,342 $ (48,451) Depreciation $ 84,000 $ 84,000 $ - 0.0% $ 924,000 $ 924,000 $ Transfers (City) $ 30,762 $ 30,594 $ 168 0.5% $ 338,380 $ 336,537 $ 1,843 Debt Interest $ 56,175 $ 61,258 $ (5,084) 0.0% $ 617,925 $ 673,842 $ (55,917) TOTAL EXPENSES $ 1,063,313 $ 961,992 $ 101,321 10.5% $ 8,807,118 $ 8,616,315 $ 190,803 NET PROFIT/(LOSS) $ 379,914 $ 364,807 $ 15,108 4.1% $ 2,805,240 $ 1,838,008 $ 967,232 Chna 91.7% of Year Full Yr Bud $ 10,438,416 Comp. % of Bud 92.7% 11.2% 3.4% $ 739,440 116.1% 0.7% $ 656,366 91.7% 27.9% $ 284,008 118.3% 121.7% $ 50,000 288.49/8 11.1%1 $ 12,168,230 95.4% 4.5% $ 1,420,465 4.9% $ 5,600,000 (8.0%) $ 876,975 0.0% $ 1,008,000 0.5% $ 369,142 8.32L $ 674,100 2.2% $ 9,948,682 52.6%1 $ 2,219,548 79.9% 93.5% 63.4% 91.7% 91.7% 91.7% 88.5% 126.4% I WiM 91.7% of Year Comp. 2018 2017 Di %Chnq 2018 2017 Di %Chnq Full YrBud %of Bud Gas Division Residential 58,254,236 49,622,691 8,631,545 17.39% 380,166,965 322,315,746 57,851,219 17.95% 449,582,000 84.6% Commercial 43,254,689 44,411,292 (1,156,603) (2.60%) 303,078,165 271,378,259 31,699,906 11.68% 420,183,000 72.1% Industrial 82,843,210 90,907,408 (8,064,198) (8.87%) 772,264,289 765,029,230 7,235,059 0.95% 786,836,000 98.1% Total CF Sold 184,352,135 184,941,391 (589,256) (0.32%) 1,455,509,419 1,358,723,235 96,786,184 7.12%1 1,656,601,000 87.9% November November YTD YTD 2018 HUC 2018 2017 Change 2018 2017 Change Budget Target Gross Margin % 45.0% 48.6% -3.6% 52.3% 49.7% 2.6% 51.4% IIIIIIIIIIIIIIIIIIIIIIII �� Operating Income Per Revenue $ (%) 28.5% 30.8% -2.3% 26.9% 21.7% 5.1% 22.1% Net Income Per Revenue $ (%): 27.1% 28.1% -1.0% 25.2% 18.2% 7.0% �pyN�NNpNp�p�p�p�N� 18.8% ��MflIII�IIIIIIIIIIIIIIIIIyy Contracted Customer Rev. per CF: $0.0045 $0.0038 $0.0007 $0.0039 $0.0038 $0.0001 $0.0035pp�pp�pp��pp��pp��ryry�I Customer Revenue per CF: $0.0088 $0.0087 $0.0001 $0.0098 $0.0098 $0.0000 $0.0088IIIIIIIIII��II�'' Total Power Supply Exp. per CF: $0.0042 $0.0036 $0.0006 $0.0037 $0.0038 ($0.0001) $0.0035 $0.0035 Natural Gas net income increased by $15,108. The $116,429 in increased revenue was nearly matched by the $106,481 in increased purchased gas creating a stable bottom line compared to November 2017. November's fuel cost credit adjustment was $.85076/MCF totalling $88,610 for the month and $452,612 YTD. November 2017 credits totalled $135,413 for the month and $658,502 YTD. Current Assets UnrestrictedlUndesignated Cash Cash Petty Cash Designated Cash Capital Expenditures - Five Yr. CIP Payment in Lieu of Taxes Rate Stabilization - Electric Rate Stabilization - Gas Catastrophic Funds Restricted Cash Bond Interest Payment 2017 Bond Interest Payment 2012 Debt Service Reserve Funds Total Current Assets Receivables Accounts (net of uncollectible allowances) Interest Total Receivables Other Assets Inventory Prepaid Expenses Sales Tax Receivable Deferred Outflows - Electric Deferred Outflows - Gas Total Other Assets Total Current Assets Capital Assets Land & Land Rights Depreciable Capital Assets Accumulated Depreciation Construction - Work in Progress Total Net Capital Assets Total Assets HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED NOVEMBER 30, 2018 Electric Gas Total Division Division 2018 10,125,989.40 5,929,865.49 16,055,854.89 680.00 170.00 850.00 2,750,000.00 700,000.00 3,450,000.00 882,327.00 369,142.00 1,251,469.00 372,736.68 - 372,736.68 - 651,306.61 651,306.61 400,000.00 100,000.00 500,000.00 Total Net Change 2017 Total (YTD) 24,307,832.66 (8,251,977.77) 850.00 - 1,375,117.27 2,074,882.73 1,196,331.00 55,138.00 314, 539.41 58,197.27 646,058.37 5,248.24 500,000.00 - 1,276,555.44 - 1,276,555.44 137,946.88 1,138,608.56 - 1,969,100.00 1,969,100.00 2,118,025.05 (148,925.05) 522,335.64 2,188,694.02 2,711,029.66 2,711,029.66 - 16,330,624.16 11,908,278.12 28,238,902.28 33,307,730.30 (5,068,828.02) 1,839,204.33 1,371,671.28 3,210,875.61 2,967,356.03 243,519.58 19,039.49 19,039.49 38,078.98 31,415.67 6,663.31 1,858,243.82 1,390,710.77 3,248,954.59 2,998,771.70 250,182.89 1,157,267.43 466,910.63 1,624,178.06 1,658,354.93 (34,176.87) 44,732.06 18,680.68 63,412.74 (1,962.23) 65,374.97 63,231.86 - 63,231.86 177,577.65 (114,345.79) 752,887.00 - 752,887.00 1,746,060.00 (993,173.00) - 250,962.00 250,962.00 582,020.00 (331,058.00) 2,018,118.35 736,553.31 2,754,671.66 4,162,050.35 (1,407,378.69) 20,206,986.33 14,035,542.20 34,242,528.53 40,468,552.35 (6,226,023.82) 690,368.40 3,899,918.60 4,590,287.00 4,591,691.75 (1,404.75) 89,600,664.69 41,294,704.69 130,895,369.38 128,040,230.86 2,855,138.52 (55,103,326.90) (16,014,585.00) (71,117,911.90) (67,822,493.44) (3,295,418.46) 12,490,576.32 375,586.89 12,866,163.21 4,089,773.96 8,776,389.25 47,678,282.51 29,555,625.18 77,233,907.69 68,899,203.13 8,334,704.56 67,885,268.84 43,591,167.38 111,476,436.22 109,367,755.48 2,108,680.74 HUTCHINSON UTILITIES COMMISSION BALANCE SHEET - CONSOLIDATED NOVEMBER 30, 2018 Electric Gas Total Total Net Change Division Division 2018 2017 Total (YTD) Current Liabilities Current Portion of Long-term Debt Bonds Payable - 1,295,000.00 1,295,000.00 1,220,000.00 75,000.00 Bond Premium - 185,608.32 185,608.32 185,608.32 - Accounts Payable 2,368,515.78 1,067,167.43 3,435,683.21 1,153,133.60 2,282,549.61 Accrued Expenses Accrued Interest - - - 0.20 (0.20) Accrued Payroll 40,836.33 11,972.00 52,808.33 38,972.87 13,835.46 Total Current Liabilities 2,409,352.11 2,559,747.75 4,969,099.86 2,597,714.99 2,371,384.87 Long -Term Liabilities Noncurrent Portion of Long-term Debt 2017 Bonds 16,675,000.00 - 16,675,000.00 16,675,000.00 - 2012 Bonds - 12,605,000.00 12,605,000.00 13,975,000.00 (1,370,000.00) 2003 Bonds - - - - - Bond Premium 2012 635,682.24 1,299,257.87 1,934,940.11 2,156,793.64 (221,853.53) Pension Liability- Electric 3,083,440.00 - 3,083,440.00 4,226,202.00 (1,142,762.00) Pension Liability- Nat Gas - 1,027,813.00 1,027,813.00 1,408,734.00 (380,921.00) Accrued Vacation Payable 323,735.99 102,774.05 426,510.04 378,943.50 47,566.54 Accrued Severance 73,739.62 28,580.99 102,320.61 92,050.32 10,270.29 Deferred Outflows - Electric 794,370.00 - 794,370.00 569,910.00 224,460.00 Deferred Outflows - Nat Gas - 264,790.00 264,790.00 189,970.00 74,820.00 Total Long -Term Liabilities 21,585,967.85 15,328,215.91 36,914,183.76 39,672,603.46 (2,758,419.70) Net Position Retained Earnings 43,889,948.88 25,703,203.72 69,593,152.60 67,097,437.03 2,495,715.57 Total Net Position 43,889,948.88 25,703,203.72 69,593,152.60 67,097,437.03 2,495,715.57 Total Liabilities and Net Position 67,885,268.84 43,591,167.38 111,476,436.22 109,367,755.48 2,108,680.74 Hutchinson Utilities Commission Cash -Designations Report, Combined 11/30/2018 Financial Institution Current Interest Rate Annual Interest Balance, November 2018 Balance, October 2018 Change in Cash/Reserve Position Savings, Checking, Investments varies varies varies 28,238,902.28 29,625,168.76 (1,386,266.48) Total Operating Funds 28,238,902.28 29,625,168.76 (1,386,266.48) Debt Reserve Requirements Bond Covenants - sinking fund Debt Reserve Requirements Bond Covenants -1 year Max. P & I Total Restricted Funds 3,245,655.44 3,027,941.14 217,714.30 2,188,694.02 2,188,694.02 - 5,434,349.46 5,216,635.16 217,714.30 Operating Reserve Min 60 days of 2018 Operating Bud. 5,868,920.00 5,868,920.00 Rate Stabalization Funds 1,024,043.29 1,024,043.29 PILOT Funds Charter (Formula Only) 1,251,469.00 1,251,469.00 Catastrophic Funds Risk Mitigation Amount 500,000.00 500,000.00 Capital Reserves 5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 3,450,000.00 3,450,000.00 Total Designated Funds 12,094,432.29 12,094,432.29 YE YE YE YE YTD HUC 2014 2015 2016 2017 2018 Target Debt to Asset 28.8% 32.0% 32.2% 40.8% 37.6% Current Ratio 2.26 2.52 3.06 5.73 5.49 RONA 0.05% 1.31% 2.17% 1.80% 2.74% Ftt� Change in Cash Balance (From 12131114 to 1113012018) Month End Electric Elec. Change Natural Gas Gas Change Total Total Change 11/30/2018 16,330,624 11,908,278 28,238,902 12/31/2017 23,213,245 (6,882,621) 10,702,689 1,205,589 33,915,934 (5,677,032) 12/31/2016 8,612,801 14,600,444 9,500,074 1,202,615 18,112,875 15,803,059 12/31/2015 6,170,790 2,442,011 9,037,373 462,701 15,208,163 2,904,712 12/31/2014 3,598,821 2,571,969 6,765,165 2,272,208 10,363,986 4,844,177 * 2017's Signifcant increase in cash balance is due to issuing bonds for the generator project. Hutchinson Utilities Commission Cash -Designations Report, Electric 11/30/2018 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest November 2018 October 2018 Position Savings, Checking, Investments varies varies varies 28,238,902.28 29,625,168.76 (1,386,266.48) Total HUC Operating Funds 28,238,902.28 29,625,168.76 (1,386,266.48) Debt Restricted Requirements Bond Covenants - sinking fund Operating Reserve Min 60 days of 2018 Operating Bud. Rate Stabalization Funds $400K-$1.2K PILOT Funds Charter (Formula Only) Catastrophic Funds Risk Mitigation Amount Capital Reserves 5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) Total Designated Funds 1,276,555.44 1,222,932.81 53,622.63 4,387,223.00 4,387,223.00 372,736.68 372,736.68 882,327.00 882,327.00 400,000.00 400,000.00 2,750,000.00 2,750,000.00 8,792,286.68 8,792,286.68 Excess Reserves Less Restrictions & Designations, Electric 6,261fl782.04 6fl384fl474.23 (122fl692.19) YE YE YE YE YTD APPA Ratio HUC 2014 2015 2016 2017 2018 5K-10K Cust. Target Debt to Asset Ratio (* w/Gen.) 7.4% 13.2% 16.1% 36.1% 35.3% 50.1% Current Ratio 2.48 2.95 3.57 10.70 7.33 2.43 �I�IIIIIIII��IIIIIIIIII RONA -3.1% -1.2% -0.4% -0.1% -0.1% NA >0% Hutchinson Utilities Commission Cash -Designations Report, Gas 11/30/2018 Change in Financial Annual Balance, Balance, Cash/Reserve Institution Current Interest Rate Interest November 2018 October 2018 Position Savings, Checking, Investments varies varies varies 28,238,902.28 29,625,168.76 (1,386,266.48) Total HUC Operating Funds 28,238,902.28 29,625,168.76 (1,386,266.48) Debt Restricted Requirements Debt Restricted Requirements Total Restricted Funds Operating Reserve Rate Stabalization Funds PILOT Funds Catastrophic Funds Capital Reserves Total Designated Funds Bond Covenants - sinking fund Bond Covenants -1 year Max. P & I Min 60 days of 2018 Operating Bud. $200K-$600K Charter (Formula Only) Risk Mitigation Amount 5 Year CIP ( 2018-2022 Fleet & Infrastructure Maintenance) 1,969,100.00 1,805,008.33 164,091.67 2,188,694.02 2,188,694.02 - 4,157,794.02 3,993,702.35 164,091.67 1, 481, 697.00 1, 481, 697.00 651, 306.61 651, 306.61 369,142.00 369,142.00 100, 000.00 100, 000.00 700,000.00 700,000.00 3,302,145.61 3,302,145.61 YE YE YE YE YTD HUC 2014 2015 2016 2017 2018 APGA Ratio Target Debt to Asset 55.6% 54.8% 51.5% 48.1% 41.0% TBD Current Ratio 2.07 2.17 2.59 2.72 3.76 TBD RONA 4.3% 4.7% 5.6% 5.0% 7.7% TBD 2 �2 �2 �2 �2 00000 Q Q Q Q Q N N N N N Q Q Q Q Q Q Q Q Q Q Q Q Q Q Z Z Z Z Z O N N N N Z Z Z Z Z Z Z Z Z Z Z Z Z Z W CO - O O O O O O N O O O O COMNOOOOOOMOCOO r 0 V 0 0 0 N I` O CO V 0 N O O O M N V I� o M O) CO O M N_ O co co CO V co M Lo O Lo co CO O O) 0 M O) � O 0 - O CO CO N N M LD 0 0 00 O 0 O O O LU CO O O O O O O O N O O O O CO CO CO co CO CO CO O O I-- O CO N O O O O Ln O O) O Ln O r N CO V O) O) I-_ o N col O . 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Small Gen. Large Gen. Large For Resale Total Resid. Srv. Srv. Industrial NOTE: Sales for resale includes capacity sales, market sales and Transalta sales. NATURAL GAS DIVISION Operating Revenue NOVEMBER 2018 CLASS AMOUNT MCF /$ MCF Residential $501,067.59 58,254 $8.60143 Commercial $364,217.72 43,255 $8.42025 Large Industrial $402,068.92 82,843 $4.85338 Total $1,267,354.23 184,352 $6.87464 Fuel Adjustment-$0.00085 Rate Without Fuel Adjustment $7.72464 Natural Gas Division Year -to -Date ® 2018 $ Amount 132017 $ Amount ® 2018 MCF 132017 MCF 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Gas Residential Gas Commercial Large Industrial Total Electric Production Work Order De'scrlption Materials 11708 Units 6 & 7 $ 14,369,702.00 $ 11801 Unit 8 Building Spancrete Joint Replacement 10,000.00 11802 Unit 1 Control Building Air Conditioning 15,000.00 11803 Plant 1 Cooling Tower Piping Replacement 350,000.00 11804 Soft Start Motor Controllers for Air Supply Fan 8,000.00 11805 Replace Stage 3-5 HPC Blades 150,000.00 11806 Unit 1 CEMS Data Logger 30,000.00 11807 Plant 1 Pipe Replacement Engineering 7,000.00 Total Total Percentage .abor Budgeted Actual Difference Completed - $ 14,369,702.00 $ 11,617,076.88 $ (2,752,625.12) 70% $ 10,000.00 - $ (10,000.00) 100% $ 15,000.00 5,461.96 $ (9,538.04) 100% $ 350,000.00 - $ (350,000.00) 2,000.00 $ 10,000.00 16,698.94 $ 6,698.94 100% $ 150,000.00 - $ (150,000.00) 100% $ 30,000.00 $ (30,000.00) $ 7,000.00 $ (7,000.00) $ 14,939,702.00 $ 2,000.00 $ 14,941,702.00 $ 11,639,237.78 $ (3,302,464.22) Electric Distribution Work Total Total Percentage Order Description Materials Labor Bmudg_eted, Actual Difference Completed, 21801 Pole Repair or Replacement 15,000.00 15,000.00 - $ (15,000.00) 21802 Hutch Substation Roof Replacement 10,000.00 10,000.00 - $ (10,000.00) 21803 Station Equipment 10,000.00 10,000.00 19,415.38 $ 9,415.38 100% 21804 Duct for Reconductor 15,000.00 65,000.00 80,000.00 24,523.82 $ (55,476.18) 100% 21805 Uponer New Feed 85,000.00 50,000.00 135,000.00 209,964.59 $ 74,964.59 90% 21806 Feeder 16 and 17 Reconductor 30,000.00 70,000.00 100,000.00 54,011.83 $ (45,988.17) 100% 21807 MITGI New Feed 80,000.00 35,000.00 115,000.00 61,322.09 $ (53,677.91) 100% 21808 New Developments 50,000.00 50,000.00 103,529.55 $ 53,529.55 90% 21809 Century Court Apartments 20,000.00 15,000.00 35,000.00 7,759.67 $ (27,240.33) 90% 21810 Century Avenue Trail Work Feeder 22 10,000.00 10,000.00 20,000.00 7,547.65 $ (12,452.35) 100% 21811 New Developments Transformers 50,000.00 50,000.00 15,208.96 $ (34,791.04) 90% 21812 Plant 14160 Generator Transformer Repl 70,000.00 5,000.00 75,000.00 $ (75,000.00) 21813 Transformer Replacements 40,000.00 14,000.00 54,000.00 36,275.42 $ (17,724.58) 90% 21814 Century Court Apartments 10,000.00 3,000.00 13,000.00 $ (13,000.00) 21815 Meters 30,000.00 - 30,000.00 21,087.40 $ (8,912.60) 10% $ 525,000.00 $ 267,000.00 $ 792,000.00 $ 560,646.36 $ (231,353.64) Administrative Total Total Percentage Work Order Description Bud eted Actual Difference Completed 51801 Replace 2008 Super Duty Bucket Truck 140,000.00 140,000.00 51802 Replace 2007 Metering Van 25,750.00 23,887.64 1,862.36 100% 51803 Replace 2006 Production Dodge Dakota 25,000.00 26,079.22 (1,079.22) 100% 51804 Replace 2006 Ford F150 25,750.00 26,079.22 (329.22) 100% 51805 Replace Vehicle #433 37,080.00 43,375.78 (6,295.78) 100% $µ253,580.00 $ 119,421.86 $ (134,158.14) Work Order Description 61801 Transmission Lateral to HCP - ROW Easements 61802 Transmission Lateral to HCP - Materials and Permits 61803 Lafayette Interconnect Metering Upgrade 61804 Locator 61805 Misc Developments and Improvements 61806 Regulator Station Improvements 61807 Service Lines 61808 Meters, AMI, and all Fittings 61809 Industrial Metering and Regulation Natural Gas Total Materials Labor Budgeted $ 500,000.00 $ 4,200.00 $ 504,200.00 $ 1,000,000.00 4,200.00 1,004,200.00 90,000.00 18,000.00 108,000.00 6,000.00 - $ 6,000.00 125,000.00 28,000.00 $ 153,000.00 15,000.00 4,900.00 $ 19,900.00 55,000.00 31,500.00 $ 86,500.00 90,000.00 4,900.00 $ 94,900.00 80,000.00 7,000.00 $ 87,000.00 $ 1,961,000.00 $ 102,700.00 $ 2,063,700.00 $ Total Percentage Actual Difference Completed - $ (504,200.00) - $ (1,004,200.00) 18,562.37 $ (89,437.63) 10% 7,674.16 $ 1,674.16 100% 54,030.40 $ (98,969.60) 100% - $ (19,900.00) 81,214.33 $ (5,285.67) 100% 105,359.29 $ 10,459.29 100% 108,743.13 $ 21,743.13 100% 375,583.68 $ (1,688,116.32) HUTCHINSON UTILITIES COMMISSION 9T, Board Action Form iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliilliillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliilllI Agenda Item: Review Policies Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 Review Policies Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: As part of HUC's standard operating procedures, a continual policy review is practiced. This month, the following policies were reviewed and no changes are recommended on these policies at this time: i. Financial Reserve Policy ii. Identity Theft- Red Flag Program iii. Surplus Property Policy iv. Deferred Compensation V. Personal Use of Utility Facilities & Equipment vi. Recognition Policy vii. Required Clothing- Nonexempt Only viii. Small Hand Tools- Nonexempt Only ix. Health & Safety X. Unsafe Conditions or Practices xi. Employee Right -to -Know xii. Appendix A xiii. Appendix B xiv. Appendix C xv. Appendix D BOARD ACTION REQUESTED: None Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: RemainingCost: 4 �r��ATa HUTCHINSON UTILITIES FINANCIAL RESERVE POLICY A. PURPOSE: In order to maintain stable rates and provide reliable service, Hutchinson Utilities Commission (HUC) must have various tools in place to deal with changes in costs or operational performance. Maintaining appropriate financial reserves is one such tool that ensures sufficient funding is available for current operating, capital and debt service needs. Financial reserves absorb short-term financial variability resulting from unexpected operational changes or can reduce the need for large amounts of debt. This policy establishes a Capital Reserve (CR), which is used to cover acquisition of capital assets, including replacement of existing assets, and an Operating Reserve (OR), which addresses short-term financial volatility. HUC will establish a Capital Reserve and Operating Reserve for each of the two utilities — Electric and Gas. B. DEFINITIONS: Hutchinson Utilities Commission reserves can be classified into three broad categories that include Restricted Cash Reserves, Capital Reserve Funds, and Operating Reserve Funds. A "fund" is a segregation within the Utility's accounting system to keep sources and uses for a particular purpose easily identifiable and reportable. C. GENERAL PROVISIONS In the context of funding future capital equipment or facilities or replacing existing assets with substantial value HUC will analyze the most cost effective and efficient method to finance a project, be it through debt financing, pay -as -you go financing, use of reserves, use of contractual agreements, or through some combination of those various sources or others that may present themselves. At a minimum, reserve balances will be reviewed on an annual basis at, or near, the end of the fiscal year during preparation of the Capital & Operating Spending Plans to ensure adequate compliance with policy and intended funding targets. The minimum funding requirements established for each fund represents the baseline financial condition that is acceptable to the Commission from a risk and long-range financial planning perspective. Maintaining reserves at appropriate levels is a prudent, ongoing business process that consists of an assessment and application of various revenue generating alternatives. These alternatives (either alone or in combination with each other) include, but are not limited to: fees & charges, capital financing, investment of funds, contractual commitments, and levels of capital expenses. I. RESTRICTED RESERVES MR) - Restrictions on these monies are imposed by an outside source such as creditors, grantors, contributors, laws or regulations governing use. An example of restricted funds is bond reserve covenants required as a part of debt issuance. The funds are legally protected by bond covenants and can only be used in the event of default by HUC or to pay down principal at maturity. A. Funding Amount — The bond reserve requirements are established at the time of bond issuance. B. The sources of funds for the (RR) come from the undesignated fund balance of each utility which can change annually based on yearly operating performance and accumulated net revenues and, when appropriate, available short-term liquidity arrangements. 11. CAPITAL RESERVES (CR) - This reserve is established by action of the board to fund capital projects including electric and gas distribution & transmission system infrastructure, production facilities, and fleet that are a part of the 5-year capital improvement plan so HUC can avoid issuing bonds to pay for maintaining normal operations. This reserve is not intended to fund large major capital purchases. (Le ... Fleet, infrastructure replacement or acquisitions) A. Funding Amount — Minimum funding shall be targeted at the estimated current replacement costs of assets expected to be replaced within the next five years. B. Funding Sources — The sources of funds for the (CR) come from the undesignated fund balance of each utility which can change annually based on yearly operating performance and accumulated net revenues and, when appropriate, available short-term liquidity arrangements. 111. OPERATING RESERVES (OR) — This reserve is established by action of the board to address short- term financial risk or variability resulting from unexpected operating results and to address those financial risks that have a more immediate potential impact on the existing organization cost structure. (i.e... Rate Stabilization Reserve Funds, Catastrophic Reserve Funds, PILOT Reserve Funds, Operating Reserves) A. Risk Exposures — Potential sources of cash flow variability addressed by the (OR) include the following risk exposures: 1. Reductions in overall customer demand, 2. Changes in total system load resulting from the actions of large customers, 3. Failure to achieve the budgeted level of net income, 4. Changes in the costs of purchased power, 5. Catastrophic disasters or community events 6. General operation exposures, such as timing mismatch between revenue receipts and expense payment, unforeseen maintenance costs, regulatory compliance costs, and other unexpected increases in the operating budget B. Funding Amount— Target (OR) level has been set at a minimum of 60 days and a maximum of 90 days of total budgeted operating expenses for both the Electric Division and Gas Division. Since the (OR) changes annually for each division based on the following years budget, the (OR) will be adjusted annually. The (OR) target is in addition to the other operating reserve funds listed above. C. Funding Sources — The sources of funds for the (OR) come from the undesignated fund balance of each utility which can change annually based on yearly operating performance and accumulated net revenues and, when appropriate, available short-term liquidity arrangements. IV. FINANCIAL RESERVES HIERARCHY OF FUNDING — The following lists the priorities applied to HUC's reserves. A. Maintaining Operating Reserves (OR) within a 60 day to 90 day operating range. B. Once the Target (OR) level is achieved, excess cash may be applied to the (CR) or other areas at the discretion of the Hutchinson Utilities Commission. V. FINANCIAL RESERVES REPLENISHMENT— The above section describes the hierarchy of funding the reserves. The following describes what actions may be taken to generate cash and replenish the reserves under different scenarios of each of the two utilities. A. If the (OR) and (CR) are at the Target Level: Take no action B. If either the (OR) or (CR) is below the Target Level or if both the (OR) and (CR) are below the Target Level: Take no action during the current year, reevaluate the following year and reduce expenses and/or increase revenues, if necessary, to reach the Target Level within the next three years. VI. FINANCIAL RESERVES FUNDING LEVEL AND FUND BALANCE REVIEWS — The Target levels and fund balance are to be reviewed as follows: A. Target Level Review: Although the actual monetary values are reviewed annually and adjusted to reflect target goals when approving budgets, the Target (OR) and (CR) funding levels are to be evaluated every year. For example, the Commission could revise (reduce or increase) the (OR) or (CR) reserves based on future external factors and forward looking cost drivers. B. Financial Reserves Fund Balance Review: The (OR) and (CR) fund balances are to be monitored monthly by the Finance Department and reviewed annually during the budget review process by the Commission or if an event were suddenly to reduce the fund balances. Identity Theft — "Red Flag Program" It shall be the policy of HUC to establish an identity theft prevention program, also known as the "Red Flag Program". HUC has an identity theft program in place called the "RED FLAG PROGRAM", pursuant to the Federal Trade Commission's Red Flags Rule, which implements Section 114 of the Fair and Accurate Credit Transactions Act of 2003. Internal procedures have been established whereby employees of HUC have been trained on how to recognize and what procedures to follow if the employee suspects an identity theft is taking place. Implementation of the Red Flag Program is the responsibility of the Account Supervisor. Administration and maintenance of the Red Flag Program is the responsibility of the Financial Manager. EXEMPT DEFERRED COMPENSATION After completion of probationary period, HUC offers a 457 deferred compensation plan, which allows employees to place a portion of their earnings through payroll deduction into a tax deferred investment program. Taxes on money set aside are deferred until the time the money is withdrawn. HUC does not contribute to this 457 deferred compensation plan. For enrollment information, contact payroll. NON-EXEMPT DEFERRED COMPENSATION After completion of probationary period, HUC offers a 457 deferred compensation plan, which allows employees to place a portion of their earnings through payroll deduction into a tax deferred investment program. Taxes on money set aside are deferred until the time the money is withdrawn. HUC does not contribute to this 457 deferred compensation plan. For enrollment information, contact payroll. EXEMPT PERSONAL USE OF UTILITY FACILITIES AND EQUIPMENT No employee may use HUC facilities or equipment for personal use. NON-EXEMPT PERSONAL USE OF UTILITY FACILITIES AND EQUIPMENT No employee may use HUC facilities or equipment for personal use. NON-EXEMPT REQUIRED CLOTHING HUC will provide employees required uniforms and safety clothing at no cost to the employee. This clothing may differ by Department. See Staff Personnel for a list of the clothing HUC will provide to those employees. All clothing issued to employees by HUC may only be worn while the employee is on -duty for HUC. Failure to wear flame resistant clothing at the appropriate times is a violation of HUC policy and will subject the employee to discipline. NON-EXEMPT SMALL HAND TOOLS HUC shall furnish the hand tools specified by the Director or Manager as necessary to perform the employee's job duties. RUC will replace any small tools damaged or broken on the job. The damaged hand tool must be turned into the employee's Director or Manager. It is the responsibility of the employee to replace any missing hand tools. EXEMPT RECOGNITION POLICY - SERVICE AWARDS AND RETIREMENT GIFTS Obiective Service awards and retirement gifts are provided to recognize and reward employees for service with the company. Awards are granted without regard to position or salary. Scope of Policy Full-time, active employees are eligible for a service award for every five (5) years of service completed. The service awards may increase in value based on longevity, per the table listed in Service Award Procedures below. Service Credit Service credit for service awards will count from the first day an individual is considered a full- time employee of HUC and continue while the employee remains on full-time, active status. If an individual has a break in service, their service credit may resume accumulating when they return to full-time status, depending on the nature of the break. Service Award Procedures HUC will inform the individual employee of their eligibility for a service award. Eligible employees may select a gift card in the amount noted on the table below. Employee will receive a Certificate of Appreciation signed by the General Manager and presented to them at the Recognition Banquet. Gift cards must be for personal, tangible property and may not be redeemed for cash. Amount Years of Service $50 5 Years $100 10 Years $125 15 Years $150 20 Years $175 25 Years $200 30 Years $250 35 Years $300 40 Years Retirement Recognition Procedures Retirees have the option of a potluck luncheon in their honor. A gift from HUC valued at no greater than $300 will be given to the retiree. The immediate supervisor will be responsible for coordinating the purchase of the gift. NON-EXEMPT RECOGNITION POLICY- SERVICE AWARDS AND RETIREMENT GIFTS Obiective Service awards and retirement gifts are provided to recognize and reward employees for service with the company. Awards are granted without regard to position or salary. Scope of Policy Full-time, active employees are eligible for a service award for every five (5) years of service completed. The service awards may increase in value based on longevity, per the table listed in Service Award Procedures below. Service Credit Service credit for service awards will count from the first day an individual is considered a full- time employee of HUC and continue while the employee remains on full-time, active status. If an individual has a break in service, their service credit may resume accumulating when they return to full-time status, depending on the nature of the break. Service Award Procedures HUC will inform the individual employee of their eligibility for a service award. Eligible employees may select a gift card in the amount noted on the table below. Employee will receive a Certificate of Appreciation signed by the General Manager and presented to them at the Recognition Banquet. Gift cards must be for personal, tangible property and may not be redeemed for cash. Amount Years of Service $50 5 Years $100 10 Years $125 15 Years $150 20 Years $175 25 Years $200 30 Years $250 35 Years $300 40 Years Retirement Recognition Procedures Retirees have the option of a potluck luncheon in their honor. A gift from HUC valued at no greater than $300 will be given to the retiree. The immediate supervisor will be responsible for coordinating the purchase of the gift. EXEMPT SECTION 6 - HEALTH AND SAFETY HUC is very concerned about the safety of its employees and the public HUC serves. All employees are required to follow all HUC safety rules and make the safety of themselves, their co- workers, and the public a priority. To encourage a safe workplace, the Commission has adopted the APPA — Utilities Safety Handbook. Compliance with the APPA is "mandatory and is considered a requirement for employment". NON-EXEMPT SECTION 6 — HEALTH AND SAFETY HUC is very concerned about the safety of its employees and the public HUC serves. All employees are required to follow all HUC safety rules and make the safety of themselves, their co- workers, and the public a priority. To encourage a safe workplace, The Commission has adopted the APPA — Utilities Safety Handbook. Compliance with the APPA is "mandatory and is considered a requirement for employment". EXEMPT UNSAFE CONDITIONS OR PRACTICES Employees are required to report to a Director, Manager or Supervisor any unsafe conditions or practices they observe, including failure of a co-worker to follow safety rules or procedures. NON-EXEMPT UNSAFE CONDITIONS OR PRACTICES Employees are required to report to a Director or Manager any unsafe conditions or practices they observe, including failure of a co-worker to follow safety rules or procedures. EXEMPT EMPLOYEE RIGHT -To -KNOW Minnesota's Employee Right -to -Know law requires HUC to inform employees when they may be exposed to hazardous substances, harmful physical agents, or infectious agents. HUC has adopted a written Employee Right -to -Know program. HUC has evaluated and reevaluates the work sites to determine the presence of hazardous substances. Employees shall become familiar with the location of Safety Data Sheets (SDS) in their work area. NON-EXEMPT EMPLOYEE RIGHT -To -KNOW Minnesota's Employee Right -to -Know law requires HUC to inform employees when they may be exposed to hazardous substances, harmful physical agents, or infectious agents. HUC has adopted a written Employee Right -to -Know program. HUC has evaluated and reevaluates the work sites to determine the presence of hazardous substances. Employees shall become familiar with the location of Safety Data Sheets (SDS) in their work area. EXEMPT I, APPENDICES APPENDIX A - ACKNOWLEDGEMENT acknowledge that I have received a copy of the Hutchinson Utilities Employee Handbook and that I am responsible for being familiar with its contents. I understand the Hutchinson Utilities Employee Handbook does not create a contract between Hutchinson Utilities and me. I also understand that Hutchinson Utilities may revise the contents of the Employee Handbook at its discretion. Date: Employee's Signature NON-EXEMPT I, APPENDICES APPENDIX A - ACKNOWLEDGEMENT acknowledge that I have received a copy of the Hutchinson Utilities Employee Handbook and that I am responsible for being familiar with its contents. I understand the Hutchinson Utilities Employee Handbook does not create a contract between Hutchinson Utilities and me. I also understand that Hutchinson Utilities may revise the contents of the Employee Handbook at its discretion. Date: Employee's Signature EXEMPT I, Commission") as APPENDIX B — NEW EMPLOYEE ACKNOWLEDGEMENT have been hired by the Hutchinson Utilities Commission ("the I acknowledge that I will serve a nine (9) month probationary period, ending the day of , 20 , unless the General Manager extends my probation a maximum of three (3) additional months. I understand that until my probationary period is completed, the Commission may terminate me at any time and without cause. Date: Employee's Signature NON-EXEMPT I, Commission") as APPENDIX B — NEW EMPLOYEE ACKNOWLEDGEMENT have been hired by the Hutchinson Utilities Commission ("the I acknowledge that I will serve a six (6) month probationary period, ending the day of , 20 , unless the General Manager extends my probation a maximum of three (3) additional months. I understand that until my probationary period is completed, the Commission may terminate me at any time and without cause. Date: Employee's Signature EXEMPT APPENDIX C — TEMPORARY EMPLOYEE ACKNOWLEDGEMENT I, ("the Commission") as have been hired by the Hutchinson Utilities Commission which is a temporary position. I acknowledge that this position will not exceed six (6) months and the Commission may terminate it without cause at any time. I also understand I accrue no rights to reappointment to this position if it becomes open again in the future. I understand as a temporary employee, I am not entitled to any benefits, and that I may be terminated from the position at any time and without cause. Date: Employee's Signature NON-EXEMPT APPENDIX C — TEMPORARY EMPLOYEE ACKNOWLEDGEMENT I , have been hired by the Hutchinson Utilities Commission ("the Commission") as , which is a temporary position. I acknowledge that this position will not exceed six (6) months and the Commission may terminate it without cause at any time. I also understand I accrue no rights to reappointment to this position if it becomes open again in the future. I understand as a temporary employee, I am not entitled to any benefits, and that I may be terminated from the position at any time and without cause. Date: Employee's Signature EXEMPT I, APPENDIX D - ACKNOWLEDGEMENT acknowledge that I have received a copy of the APPA-Utilities Safety Handbook and that I am responsible for being familiar with its contents. I understand I must follow all safety rules and regulations in the APPA Safety Handbook and any other safety rules adopted by Hutchinson Utilities. Date: Employee's Signature NON-EXEMPT I, APPENDIX D - ACKNOWLEDGEMENT acknowledge that I have received a copy of the APPA-Utilities Safety Handbook and that I am responsible for being familiar with its contents. I understand I must follow all safety rules and regulations in the APPA Safety Handbook and any other safety rules adopted by Hutchinson Utilities. Date: Employee's Signature OS HUTCHINSON UTILITIES COMMISSION 9T, Board Action Form iiiiiiiiiiiiiiiiiiiiiillillillillillillilliillillillillillillilliilliillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliillillillillillillillillillillilliillillillillillillilliillillillillillillilliilllI Agenda Item: Approve Policy Changes Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 App Changes to Policies Attachments: Yes BACKGROUND/EXPLANATION OFAGENDA ITEM: As part of HUC's standard operating procedures, a continual policy review is practiced. The following revisions to the policies below are recommended. i. Payments of HUC Payables ii. Safety Glasses -Nonexempt Only iii. Accidents & Injuries BOARD ACTION REQUESTED: Approve Policy Changes Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: RemainingCost: Amended December 29,,2917-1" , 2018 Policy on Payments of Hutchinson Utilities Commission Payables The Hutchinson Utilities Commission Accountant and Financial Manager are hereby authorized to issue warrant(s) drawn from the proper funds. (Resolution 153 was amended on March 25, 2009 and reads as follows): Resolution 153 authorizes HUC Accountant or HUC Financial Manager to transfer funds by wire or other electronic means. Claims shall be paid upon proper presentation during the year 201 F1 019. This policy shall be reviewed on an annual basis. NON-EXEMPT SAFETY GLASSES Employees must pay for their own eye examination (health insurance will generally cover 100% of examination expense). Any supplier who can provide eo n cerflfl'i ation that the glasses meet OSHA requirements may fill the prescription. It is recommended that employees fill their prescriptions at any optical department who accepts the Minnesota State Contract. Forms are available in the business office. EXEMPT ACCIDENTS AND INJURIES Employees must immediately report to a Director, Manager or Supervisor job -related illnesses, all accidents and injuries (regardless how minor) that occur during the course of employment with HUC. The Employee and Supervisor must fill out and sign an accident report. If a supervisor is not available and the nature of injury or illness requires immediate treatment, the employee is to go to the nearest available medical facility for treatment and, as soon as possible, notify his/her supervisor of the action taken. In the case of a serious emergency, 911 should be called. If the injury is not of an emergency nature, but requires medical attention, the employee will report it to the supervisor and make arrangements for a medical appointment. Worker's compensation benefits and procedures to return to work will be applied according to applicable state and federal laws. managed eme pt:E)N,ider-.—Wo 1<erCompensation ansuurer k League of Mannesota Oties insurance Pursuant to Minnesota Law, HUC has established a labor-management safety committee that investigates or reviews all accidents to identify causes of the accidents and suggest ways to prevent reoccurrence of the accident. The safety committee may request to interview any employee involved in an accident or any employee who may have knowledge of an accident. All employees are required to cooperate with the safety committee. NON-EXEMPT ACCIDENTS AND INJURIES Employees must immediately report to a Director, Manager or Supervisor j ob-related illnesses, all accidents and injuries (regardless how minor) that occur during the course of employment with HUC. The Employee and Supervisor must fill out and sign an accident report. If a supervisor is not available and the nature of injury or illness requires immediate treatment, the employee is to go to the nearest available medical facility for treatment and, as soon as possible, notify his/her supervisor of the action taken. In the case of a serious emergency, 911 should be called. If the injury is not of an emergency nature, but requires medical attention, the employee will report it to the supervisor and make arrangements for a medical appointment. Worker's compensation benefits and procedures to return to work will be applied according to applicable state and federal laws. managed eme pt:E)N,ider-.—Wo 1<erCompensation ansuurer k League of Mannesota "des0des insurance Pursuant to Minnesota Law, HUC has established a labor-management safety committee that investigates or reviews all accidents to identify causes of the accidents and suggest ways to prevent reoccurrence of the accident. The safety committee may request to interview any employee involved in an accident or any employee who may have knowledge of an accident. All employees are required to cooperate with the safety committee. HUTCHINSON UTILITIES COMMISSION�� Board Action Form �'Ylkll'M1'k� Agenda Item: 2019 Electric & NG Operating Budgets & 5 Year Capital Improvement Program (CIP) Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 10 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: Attached is the final 2019 operating budgets and 5 year (2019-2023) CIP for the Electric and Natural Gas Divisions. At a special meeting on 11-9-18 the 2019 budgets were reviewed and the major changes budgeted from 2018 to 2019 were discussed in detail. In addition, a follow-up budget workshop on 12-12-18 took place to review and have additional discussions on the 2019 Operating Budgets, 5 - Year Capital Improvement Program (CIP), the Fleet/Equipment Program, 5 - Year Budget Projections, and HUC's financial reserve policy. Management recommends as is required each year for the Commission to approve the final 2019 Operating budget and 5 - Year CIP Program. As is customary, the 5 - Year CIP changes from year to year and will reviewed and updated as needed moving into 2020. BOARD ACTION REQUESTED: Approve 2019 Electric and Natural Gas Division Operating Budgets & 5 Yr. CIP Fiscal Impact: Included in current budget: No Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: W m m 00 ri O N 0 0 0 0 0 0 0 0 (V 1.0 Ln Ln (V 1-0 O a) Ln -1 00 I- Ln (V O -! 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Customer Deposits $ Interest Expense - Bonds $ Total Nonoperating Revenus (Expenses) $ 2,602,580 $ 2,936,626 $ 2,670,071 464,184 $ 450,663 $ 401,730 20,695,451 $ 19,219,353 $ 21,141,107 361,553 $ 368,091 $ 376,398 2,045,209 $ 2,474,137 $ 2,747,937 27,567 $ 21,676 $ 86,959 1,054,088 $ 1,056,252 $ 1,013,466 479,000 $ 494,158 $ 504,138 417,219 $ 448,412 $ 480,195 294,625 $ 392,888 $ 324,749 3,299,819 $ 3,460,193 $ 3,256,234 3,824,434 $ 3,822,399 $ 3,852,675 738,110 $ 1,305,256 $ 1,196,331 5,303,838 $ 36,450,104 $ 1,839, 725 $ 2,056, 619 $ 31,956 $ 6,765 $ 158,282 $ 185,608 $ (262,972) $ (96) $ 8,372 $ 4,990 $ 354,499 $ 40,758 $ (900) $ 185,608 $ (2,661) $ 807,818) $ 217.152) $ $ 3,526,794 $ 3,459,066 $ 3,669,045 $ 533,496 $ 573,881 $ 742,459 $ 20,990,267 $ 19,600,000 $ 19,155,179 $ 488,152 $ 441,157 $ 246,288 $ 2,870,464 $ 2,960,765 $ 3,714,151 $ 86,724 $ 63,897 $ 65,792 $ 1,797,650 $ 1,945,329 $ 2,016,834 $ 654,233 $ 764,058 $ 859,065 $ 515,647 $ 454,357 $ 471,189 $ 540,911 $ 509,631 $ 495,313 $ 1,875,780 $ 1,759,162 $ 2,239,930 $ 3,808,000 $ 3,908,000 $ 3,925,000 $ 1,196,331 $ 1,398,853 $ 1,675,116 6,051,989 $ 38,884,449 $ 37,838,156 $ 1,983, 625 $ 1,835,491 $ 2,120, 655 $ 145,409 48,771 160,159 62,027 (174,964) 191,185 (3,811) 1,777,992 $ 100,000 $ 100,000 $ 250,000 $ 33,000 $ (24,500) $ (18,500) $ (2,400) $ (2,400) $ (2,400) $ 185,608 $ 185,608 $ 219,064 $ (100) $ (100) $ (100) $ (760.588) $ (1.280.863) $ (1.16&007) Net Income (Loss) $ 1,102,240 $ 1,839,467 $ 1,571,582 $ 1,391,012 $ 1,098,400 $ 1,058,049 COGS $ 26,196,544 $ 25,470,546 $ 27,424,201 $ 28,495,897 $ 27,098,766 $ 27,592,914 Gross Profit $ 11,947,020 $ 13,036,177 $ 12,611,413 $ 12,224,043 $ 12,860,045 $ 13,460,439 Gross Margin 31% 34% 32% 30% 32% 33% Operating Margin (%) 5% 5% 5% 5% 5% 4% Net Income (%) of Operating Sales 3% 5% 4% 3.4% 2.7% 2.6% N.1 (%) of Operating Sales (after cap labor) 0.00% 0.00% 0.00% 4.7% 3.7% 3.6% 2019 COMBINED INC. STATEMENT 2019 Net Income $ 1,058,049 Capitalized Labor - Production $ 47,000 Capitalized Labor - Distribution $ 242,000 Capitalized Labor- Natural Gas $ 145,750 Combined INC STMNT $ 1,492,799 2019 COMBINED CASH FLOW STATEMENT 2019 Net Income $ 1,058,049 Depreciation $ 3,925,000 2019TotaI Cap Exp $ (2,226,523) Principal Debt Payments $ (1,995,000) 2018/19 SOE Proceeds $ 116,000 Combined Cash Flow $ 877,526 2019 Cap Ex (As necessary) $ 116,000 Detailed Income Statement Electric Division OPERATING REVENUES Energy Sales Revenue Sales - Electric Energy (440, 442, 444) Power Cost Adjustments Other Energy Sales (447) Total Energy Sales Revenue (440, 442, 444, 447) Revenue From Other Sources Revenue From Other Sources (450,451) Security Lights (454.01) Pole Rental (454.02, 454.03) Total Revenue From Other Sources (450, 451, 454) TOTAL OPERATING REVENUES OPERATING EXPENSES Production Operations Operation Supervison & Engineering (546) Fuel (547) Operating Supplies and Expense (550) Total Production Operations (546, 547, 550) Maintenance Operations Structures (554) Generating Units (554) Other Equipment (554) Total Maintenance Operations (554) Other Power Supply Expense Purchased Power (555) System Control & Load Dispatch (556) Engineering Services (557) Total Other Power Supply Expense (555, 556, 557) Transmission Expense Transmission Expense Operation (560) Transmission Expense Operation (565) Transmission Expense Operation (567) Transmission Expense Maintenance (574) Total Transmission Expense (560, 565, 567, 574) Distribution Expense: Distribution Operation (580, 581, 586, 588, 589) Distribution Maintenance (592, 594, 595, 596, 598) Total Distribution Expense (580 ,581, 586, 588, 589, 592, 594, 595, 596, 598) 2015 Actual 1 2016 Actual 1 2017 Actual 1 2017 Budget 1 2018 Budget 1 2019 Budget $ 25,390,141 $ 24,923,358 $ 25,317,967 $ 24,085,461 $ 24,025,189 $ 24,118,530 $ - $ - $ - $ 1,100,000 $ 1,300,000 $ 2,000,000 $ 1,114,918 $ 1,931,859 $ 2,171,853 $ 2,310,110 $ 2,519,200 $ 2,951,500 $ 26,505,059 $ 26,855,217 $ 27,489,820 $ 27,495,571 $ 27,844,389 $ 29,070,030 $ 285,738 $ 282,041 $ 155,878 $ 270,200 $ 198,800 $ 193,500 $ 11,269 $ 11,253 $ 11,280 $ 10,000 $ 10,000 $ 10,000 $ 297,007 $ 293,294 $ 167,158 $ 26,802,066 $ 27,148,511 $ 27,656,978 $ 280,200 $ 208,800 $ 203,500 $ 27,775,771 $ 28,053,189 $ 29,273,530 $ 1,045,830 $ 1,065,718 $ 1,080,868 $ 1,599,193 $ 1,784,518 $ 1,837,312 $ 1,390,880 $ 1,721,375 $ 1,468,148 $ 1,772,101 $ 1,519,048 $ 1,686,733 $ 165,871 $ 149,533 $ 121,056 $ 155,500 $ 155,500 $ 145,000 $ 2,602,580 $ 2,936,626 $ 2,670,071 $ 3,526,794 $ 3,459,066 $ 3,669,045 $ 3,184 $ 9,160 $ 8,938 $ 10,000 $ 10,000 $ 10,000 $ 339,876 $ 343,228 $ 285,527 $ 483,496 $ 523,881 $ 692,459 $ 121,123 $ 98,275 $ 107,265 $ 40,000 $ 40,000 $ 40,000 $ 464,184 $ 450,663 $ 401,730 $ 533,496 $ 573,881 $ 742,459 $ 14,706,630 $ 13,521,486 $ 14,257,952 $ 14,208,043 $ 14,000,000 $ 13,640,000 $ 353,405 $ 368,091 $ 376,398 $ 488,152 $ 441,157 $ 246,288 $ 8,148 $ - $ - $ - $ - $ - $ 15,068,183 $ 13,889,577 $ 14,634,350 $ 14,696,195 $ 14,441,157 $ 13,886,288 $ 144,105 $ 144,105 $ 162,394 $ 145,000 $ 145,000 $ 145,000 $ 1,785,988 $ 2,215,298 $ 2,462,733 $ 2,550,000 $ 2,630,000 $ 3,380,000 $ - $ - $ - $ 10,000 $ 10,000 $ - $ 23,231 $ 16,956 $ 82,311 $ 76,483 $ 52,155 $ 54,014 $ 1,953,325 $ 2,376,359 $ 2,707,438 $ 2,781,483 $ 2,837,155 $ 3,579,014 $ 630,699 $ 606,292 $ 547,997 $ 1,190,420 $ 1,162,449 $ 1,227,878 $ 263,446 $ 363,615 $ 345,417 $ 274,166 $ 357,335 $ 384,411 $ 894,144 $ 969,907 $ 893,414 $ 1,464,586 $ 1,519,784 $ 1,612,289 Customer Service and Collection Meter Reading (902) $ 23,258 $ 26,057 $ 51,215 $ 10,361 $ 23,299 $ 24,401 Collection Expense (903) $ 152,037 $ 160,532 $ 151,657 $ 209,666 $ 167,649 $ 170,303 Bad Debt Write offs (904) $ 4,658 $ 18,634 $ 30,612 $ 5,500 $ 5,500 $ 5,500 Customer Services (906) $ 49,517 $ 41,404 $ 41,557 $ 58,078 $ 59,720 $ 63,083 $ 283,605 $ 256,168 $ 263,287 Total Customer Service and Collection (902, 903, 904, 906) $ 229,470 $ 246,627 $ 275,041 Sales Expense Supervison (911) Misc. Selling Expense (916) Total Sales Expense (911, 916) $ 220,968 $ 294,666 $ 231,090 $ 357,201 $ 346,442 $ 340,421 $ 220,968 $ 294,666 $ 231,090 $ 357,201 $ 346,442 $ 340,421 Detailed Income Statement Electric Division Administrative and General Adminstrative and General Labor (920) Office Supplies and Expenses (921) Outside Services (923) Property Insurance (924) Employee Pension & Benefits (926) Regulatory Expense (928) Misc. General Expense (930) Maint. Of General Plant (935) Total Administrative and General (920, 921, 923, 924, 926, 928, 930, 935) Other Expenses Depreciation Expense (403) Payment in Lieu of Taxes (408) Contribution To City - Roadway Lighting (408) Total Other Expenses (403, 408) TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES/(EXPENSES) Merchandise & Contract Work, Net Interest Income M isc. Income Interest - Customer Deposits Bond Service Fees Interest Expense - 2013B Bonds Interest Expense - 2017B Bonds Bond Premium Gain (Loss) On Disposal Amortization --Development Study TOTAL NONOPERATING REVENUES/EXPENSES NET INCOME COGS Gross Profit Gross Margin Operating Margin (%) Net Income (%) of Operating Sales Net Income (%) of Operating Sales (after cap labor) 2015 Actual 1 2016 Actual 1 2017 Actual 1 2017 Budget 1 2018 Budget 1 2019 Budget $ 452,383 $ 433,081 $ 427,182 $ 248,368 $ 274,966 $ 362,898 $ 106,060 $ 116,859 $ 118,128 $ 88,869 $ 77,427 $ 111,072 $ 1,355,579 $ 1,497,078 $ 1,296,129 $ 23,322 $ 18,084 $ 20,912 $ 67,948 $ 68,225 $ 77,534 $ 46,508 $ 36,585 $ 39,133 $ 2,389,037 $ 2,522,305 $ 2,452,988 $ 439,059 $ 449,079 $ 464,333 $ 322,664 $ 277,400 $ 347,031 $ 110,306 $ 80,306 $ 99,306 $ 88,200 $ 86,000 $ 89,000 $ 199,958 $ 178,250 $ 193,428 $ 30,000 $ 30,000 $ 25,000 $ 102,836 $ 102,836 $ 94,836 $ 46,842 $ 46,938 $ 51,186 $ 1,339,865 $ 1,250,809 $ 1,364,120 $ 2,816,301 $ 2,820,447 $ 2,830,636 $ 2,800,000 $ 2,900,000 $ 2,900,000 $ 384,391 $ 754,469 $ 681,816 $ 681,816 $ 882,327 $ 1,106,279 $ 146,739 $ 144,535 $ 147,384 $ 147,384 $ 147,384 $ 73,692 $ 3,347,431 $ 3,719,451 $ 3,659,836 $ 27,169,322 $ 27,406,181 $ 27,925,958 $ (367,256) $ (257,670) $ (268,980) $ (49,243) $ (24,216) $ 5,171 $ 15,978 $ 4,186 $ 78,873 $ 129,966 $ 83,272 $ 142,013 $ - $ - $ (2,499) $ - $ (900) $ (174,964) $ (35,196) $ (30,185) $ (20,248) $ $ $ (90,553) $ $ $ 5,576 $ $ 20,379 $ 48,295 $ (262,972) $ - $ - $ (201,466) $ 52,536 $ (8,337) $ 3,629,200 $ 3,929,711 $ 4,079,971 $ 28,612,425 $ 28,614,173 $ 29,536,894 $ (836,654) $ (560,984) $ (263,364) $ - $ (1,000) $ (1,000) $ 50,000 $ 50,000 $ 125,000 $ (2,400) $ (2,400) $ (2,400) $ (25,488) $ - $ $ $ (606,763) $ (558,657) $ $ $ 33,456 $ 22,112 $ (560,163) $ (403,601) $ (568,722) $ (205,134) $ (277,317) II $ (814,542) $ (1,121,147) $ (666,965) $ 20,088,271 $ 19,653,225 $ 20,413,589 $ 21,537,968 $ 21,311,259 $ 21,876,806 $ 6,713,795 $ 7,495,286 $ 7,243,389 $ 6,237,803 $ 6,741,930 $ 7,396,724 25.0% 27.6% 26.2% 22.5% 24.0% 25.3% -1.4% -0.9% -1.0% -3.0% -2.0% -0.9% -2.1% -0.8% -1.0% -2.9% -4.0% -2.3% -1.8% -1.8% -1.3% -1.3% NET INCOME 2019 Net Income $ (666,965) Cap. Labor- Production $ 47,000 Cap. Labor- Distribution $ 242,000 2019 Net Income $ (377,965) CASH FLOW STATEMENT 2019 Net Income $ (666,965) Depreciation $ 2,900,000 2017B Principal $ (625,000) 2019 Cap Exp $ (951,523) 2018/19 SOE Proceeds $ 87,000 2019 Electric Cash Flow $ 743,512 2019 Cap Exp (As necessary)" "11fi((5 Detailed Income Statement Gas Division 2015 Actual 1 2016 Actual 1 2017 Actual 11 2017 Budget 1 2018 Budget 1 2019 Budget OPERATING REVENUES Energy Sales Revenue Sales - Natural Gas --Retail Contract Sales to Large Customers (Includes 3M & HTI transport) New Ulm, HCP, & UFC Transportation Transportation --Electric Division Total Energy Sales Revenue (440, 442, 444, 447) Revenue From Other Sources Revenue From Other Sources (450,451) Total Revenue From Other Sources (450, 451, 454) TOTAL OPERATING REVENUES OPERATING EXPENSES Purchased Gas Purchased Gas for Retail (807) Contract Gas for Large Customer Total Purchased Gas Transmission Gas Transmission Operations (856) Gas Transmission Maintenance (863) Total Transmission (856, 863) Distribution Operations Supervision and Engineering (870) Mains and Services (874) Meters (878) Misc. (880) Total Distribution Operation (870, 874, 878, 880) Distribution Maintenance Lines --Services and Mains (892) Meters and House Regulators (893) Maintenance of Other Plant (895) Total Distribution Maintenance (892, 893, 895) Customer Service and Collection Meter Reading (902) Collection Expense (903) Bad Debt Write offs (904) Customer Services (906) Total Customer Service and Collection (902, 903, 904, 906) Sales Expense Supervison (911) Misc. Selling Expense (916) Total Sales Expense (911, 916) Administrative and General Adminstrative and General Labor (920) Office Supplies and Expenses (921) Outside Services (923) Property Insurance (924) Employee Pension & Benefits (926) Regulatory Expense (928) Misc. General Expense (930) Maint. Of General Plant (935) Total Administrative and General (920, 921, 923, 924, 926, 928, 930, 935) $ 6,812,881 $ 7,123,385 $ 7,503,257 $ 8,315,151 $ 7,688,416 $ 7,259,855 $ 3,110,620 $ 2,755,692 $ 3,295,884 ,;', $ 3,242,440 $ 2,750,000 $ 2,906,633 $ 776,164 $ 831,969 $ 902,042 ,;', $ 734,878 $ 739,440 $ 885,452 $ 641,833 $ 647,166 $ 651,699 $ 651,700 $ 656,366 $ 659,783 $ 11,341,498 $ 11,358,212 $ 12,352,883 $ 12,944,169 $ 11,834,222 $ 11,711,723 $ - $ - $ 25,753 $ - $ 71,400 $ 68,100 $ - $ - $ 25,753 $ 11,341,498 $ 11,358,212 $ 12,378,636 $ - $ 71,400 $ 68,100 $ 12,944,169 $ 11,905,622 $ 11,779,823 $ 3,545,049 $ 3,730,312 $ 4,272,140 $ 4,102,910 $ 3,300,000 $ 3,301,453 $ 2,443,772 $ 1,967,555 $ 2,611,014 $ 2,679,314 $ 2,300,000 $ 2,213,726 $ 5,988,821 $ 5,697,867 $ 6,883,154 $ 6,782,224 $ 5,600,000 $ 5,515,179 $ 115,115 $ 114,734 $ 122,810 $ 165,464 $ 175,765 $ 189,151 $ 4,337 $ 4,720 $ 4,648 $ 10,241 $ 11,742 $ 11,778 $ 119,452 $ 119,454 $ 127,458 $ 175,705 $ 187,507 $ 200,929 $ 166,328 $ 164,821 $ 160,609 $ 356,441 $ 440,517 $ 478,898 $ 87,715 $ 127,199 $ 143,315 ,;', $ 112,864 $ 192,670 $ 161,748 $ 9,497 $ 966 $ 19,765 ;,I $ 871 $ 872 $ 26,000 $ 159,849 $ 156,974 $ 141,781 $ 137,054 $ 148,821 $ 122,310 $ 423,389 $ 449,960 $ 465,470 $ 607,230 $ 782,880 $ 788,956 $ 156,591 $ 101,887 $ 116,256 ,;', $ 159,657 $ 179,698 $ 235,723 $ 9,322 $ 641 $ 1,412 $ 25,251 $ 25,266 $ 25,769 $ 49,641 $ 28,015 $ 41,053 $ 195,159 $ 201,759 $ 213,162 $ 215,554 $ 130,543 $ 158,721 $ 380,067 $ 406,723 $ 474,654 $ 19,029 $ 21,319 $ 41,663 $ 8,477 $ 19,062 $ 19,965 $ 124,394 $ 131,344 $ 125,156 ,;', $ 171,545 $ 125,766 $ 146,824 $ 3,811 $ 15,246 $ 4,333 $ 4,500 $ 4,500 $ 4,500 $ 40,514 $ 33,876 $ 34,001 $ 47,519 $ 48,861 $ 36,613 $ 187,748 $ 201,785 $ 205,154 $ 232,041 $ 198,189 $ 207,902 $ 73,656 $ 98,222 $ 93,659 $ 183,710 $ 163,189 $ 154,892 $ 73,656 $ 98,222 $ 93,659 $ 183,710 $ 163,189 $ 154,892 $ 155,341 $ 144,361 $ 143,981 ,;', $ 146,353 $ 150,184 $ 323,341 $ 82,789 $ 91,656 $ 120,613 „' $ 107,554 $ 90,800 $ 162,860 $ 35,353 $ 38,953 $ 46,743 $ 36,769 $ 26,769 $ 36,769 $ 72,711 $ 63,349 $ 30,723 $ 58,800 $ 59,000 $ 76,225 $ 451,860 $ 499,026 $ 354,188 ,;' $ 66,653 $ 61,750 $ 145,533 $ 19,082 $ 14,796 $ 16,097 ,;', $ 20,000 $ 20,000 $ 20,000 $ 55,594 $ 55,813 $ 60,977 $ 68,558 $ 68,558 $ 68,558 $ 38,052 $ 29,934 $ 29,923 $ 31,228 $ 31,292 $ 42,524 $ 910,782 $ 937,888 $ 803,245 $ 535,915 $ 508,353 $ 875,810 Other Expenses Depreciation Expense (403) Payment in Lieu of Taxes (408) Total Other Expenses (403, 408) TOTAL OPERATING EXPENSES OPERATING INCOME (LOSS) NONOPERATING REVENUES/(EXPENSES) Merchandise & Contract Work, Net Interest Income Misc. Income Bond Premium Interest Expense - Bonds Interest Expense - Customer Deposits Gain (Loss) On Disposal Amortization of Bond Discount and Issuance Costs Amortization --Development Study TOTAL NONOPERATING REVENUES/EXPENSES NET INCOME COGS Gross Profit Gross Margin Operating Margin (%) Net Income (%) of Operating Sales Net Income (%) of Operating Sales (after cap labor) Detailed Income Statement Gas Division 2015 Actual 1 2016 Actual 1 2017 Actual 11 2017 Budget 1 2018 Budget 1 2019 Budget $ 1,008,133 $ 1,001,952 $ 1,022,039 $ 1,008,000 $ 1,008,000 $ 1,025,000 $ 206,980 $ 406,252 $ 367,131 $ 367,131 $ 369,142 $ 495,145 $ 1,215,113 $ 1,408,204 $ 1,389,170 $ 1,375,131 $ 1,377,142 $ 1,520,145 $ 9,134,516 $ 9,043,923 $ 10,126,031 $ 10,272,023 $ 9,223,983 $ 9,738,467 $ 2,206,982 $ 2,314,289 $ 2,252,605 $ 2,672,146 $ 2,681,639 $ 2,041,356 $ 56,008 $ 29,206 $ 43,600 $ 15,978 $ 4,186 $ 66,536 28,316 $ 271,227 $ 18,146 $ 185,608 $ 185,608 $ 185,608 $ (821,833) $ (777,633) $ (730,017) $ (96) $ (2,661) $ (1,312) $ - $ 20,379 $ 13,732 $ (536,020) $ (269,688) $ (403,706)' $ 1,670,962 $ 2,044,601 $ 1,848,899 $ 33,000 $ (23,500) $ (17,500) $ 50,000 $ 50,000 $ 125,000 $ 185,608 $ 185,608 $ 185,608 $ (735,100) $ (674,100) $ (609,350) $ (100) $ (100) $ (100) $ (466,592) $ (462,092) $ (316,342) $ 2,205,554 $ 2,219,547 $ 1,725,014 $ 6,108,273 $ 5,817,321 $ 7,010,612 $ 6,957,929 $ 5,787,507 $ 5,716,108 $ 5,233,225 $ 5,540,891 $ 5,368,024 $ 5,986,240 $ 6,118,115 $ 6,063,715 46% 49% 43% 46% 51% 51% 19% 20% 18% 21% 23% 17% 15% 18% 15% 17% 19% 15% - - - 17% 20% 16% NET INCOME 2019 Net Income $ 1,725,014 Cap. Labor- Nat. Gas $ 145,750 2019 Net Income $ 1,870,764 CASH FLOW STATEMENT 2019 Net Income $ 1,725,014 Depreciation $ 1,025,000 2019 Cap Exp $ (1,275,000) 2012A Principal $ (1,370,000) 2018/19 SIDE Proceeds $ 29,000 2019 Cash Flow $ 134,014 2019 Cap Exp (As necessary) Hutchinson Utilities Commission Capital Improvement Plan 2019 thra 2023 PROJECTS BY DEPARTMENT Department Project # Priority 2019 2020 2021 2022 2023 Total Administration Chevrolet Tahoe 827 3 30,000 30,000 Administration Total 30,000 30,000 Electric - Distribution Dodge Ram 1500 226E 2 27,318 27,318 International 4900 w/Altec 255E 3 202,592 202,592 Vactron Trailer 270E 1 63,654 63,654 Vactron Drill 270E- 1 1 148,526 148,526 Station Equipment 362-19-1 2 10,000 10,000 Transformer Set -Up Unit#3 362-19-2 2 100,000 100,000 Station Equipment 362-20-1 2 10,000 10,000 Station Equipment 362-21-1 2 10,000 10,000 Station Equipment 362-22-1 2 10,000 10,000 Station Equipment 362-23-1 2 10,000 10,000 Duct Installation 366-19-1 3 15,000 15,000 Duct Installation 366-20-1 3 15,000 15,000 Duct Installation 366-21-1 3 15,000 15,000 Duct Installation 366-22-1 3 15,000 15,000 Duct Installation 366-23-1 3 15,000 15,000 Energy Park Infrastructure 367-19-1 6 75,000 75,000 Fdr #15 & #16 Reconductor 367-19-2 2 50,000 50,000 New Developments 367-19-3 6 51,000 51,000 City Road Projects 367-19-4 2 50,000 50,000 Highfeld Apartments 367-19-5 2 20,000 20,000 Century Court Apartments 367-19-6 2 20,000 20,000 Fdr #12A Reconductor 367-20-1 2 30,000 30,000 Fdr #14 Reconductor 367-20-2 2 75,000 75,000 New Developments 367-20-3 6 51,000 51,000 New Developments 367-21-1 6 51,000 51,000 Fdr # 22 Loop 367-21-2 2 60,000 60,000 New Developments 367-22-1 6 51,000 51,000 New Developments 367-23-1 6 51,000 51,000 Transformer Replacement 368-19-1 1 40,000 40,000 Transformers - New Developments 368-19-2 6 50,000 50,000 Century Court Apartments 368-19-3 3 20,000 20,000 Highfeld Apartments 368-19-4 3 15,000 15,000 Transformer Replacement 368-20-1 1 40,000 40,000 Transformers - New Developments 368-20-2 6 50,000 50,000 Fdr #12A Reconductor 368-20-3 6 15,000 15,000 Transformer Replacement 368-21-1 1 40,000 40,000 Transformers - New Developments 368-21-2 6 50,000 50,000 Transformer Replacement 368-22-1 1 40,000 40,000 Transformers - New Development 368-22-2 6 50,000 50,000 Transformer Replacement 368-23-1 1 40,000 40,000 Transformers - New Development 368-23-2 6 50,000 50,000 Produced Using the Plan -It Capital Planning Software Page 1 Friday, November 30, 2018 Department Project # Priority 2019 2020 2021 2022 2023 Total Meters 370-19-1 2 30,000 30,000 Meters 370-20-1 2 30,000 30,000 Meters 370-21-1 2 30,000 30,000 Meters 370-22-1 2 30,000 30,000 Meters 370-23-1 2 30,000 30,000 Ford F350 Super Duty Service Truck 573E 1 60,000 60,000 Ford F350 Super Duty Service Truck 574E 1 61,800 61,800 Dodge Dakota 44 995E 2 27,318 27,318 John Deere 310 Backhoe TBD - 2 1 82,400 82,400 Electric - Distribution Total 531,000 535,200 468,180 250,636 398,592 2,183,608 Electric - Production Plant 1 Heating/Air conditioning Replacement 341-19-3 3 10,000 10,000 Roof Replacement Plant 1 341-20-1 3 100,000 100,000 East Engine room/Floor Epoxy 343-19-1 3 35,000 35,000 Plant 1 Cooling Tower Upgrade 343-19-2 2 80,000 80,000 Unit 8 Controls Upgrade 344-19-1 3 270,000 270,000 Lube Oil & Glycol Maintenance tanks 344-19-3 2 40,000 40,000 Unit#8 Hot Gas Path Inspection 344-20-1 3 150,000 150,000 Unit#8 Boiler Retube 344-21-1 2 300,000 300,000 Unit#8 Steam Turbine Inspection/Overhaul 344-22-1 3 175,000 175,000 Replacement Hoist- East Engine Room Plant 1 346-19-1 1 30,000 30,000 Plant 1 Alarm System 346-20-1 2 15,000 15,000 Chevrolet Silverado 542J 3 26,523 26,523 Chevrolet Silverado 9901 3 27,319 27,319 Electric - Production Total 491,523 292,319 300,000 175,000 1,258,842 Electric - Transmission Engineering Transmission Loop HTI 353-22-1 3 75,000 75,000 Pole Repair or Replacement 354-19 6 15,000 15,000 Pole Repair or Replacement 354-20 6 15,000 15,000 Pole Repair or Replacement 354-21 6 15,000 15,000 Pole Repair or Replacement 354-22 6 15,000 15,000 Pole Repair or Replacement 354-23 6 15,000 15,000 Electric - Transmission Total 15,000 15,000 15,000 90,000 15,000 150,000 Natural Gas - Distribution Ford Dump Truck 037 1 51,905 51,905 Chevrolet Silverado w/Utility Body 130 1 65,564 65,564 Ford F550 Welding Truck 357 2 92,700 92,700 5th Ave (Lynn to Ontario) Relocate 376-19-2 2 300,000 300,000 South Grade Road Corridor - Relocate 376-19-3 2 50,000 50,000 Clinton Ave SW - Relocate 376-19-4 2 20,000 20,000 South Grade Road (School Rd to Dale St. SW) 376-19-5 2 5,000 5,000 Trunk Highway 7 Pedestrian/Trail Improvements 376-19-6 2 10,000 10,000 Century Court (Century & Sunset) 376-19-7 2 5,000 5,000 Trunk Highway 15 State Improvement Project 376-19-8 1 225,000 225,000 Isolated Main Repl. (Barley & Glen. In - Contract) 376-19-9 2 95,000 95,000 Misc Developments & System Improvements 376G-19-1 6 100,000 100,000 Misc Developments & System Improvements 376G-20-1 6 75,000 75,000 Misc Developments & System Improvements 376G-21-1 6 75,000 75,000 Misc Developments & System Improvements 376G-22-1 6 75,000 75,000 Misc Developments & System Improvements 376G-23-1 6 50,000 50,000 Regulator Station Improvements 378G-19-1 2 20,000 20,000 Produced Using the Plan -It Capital Planning Software Page 2 Friday, November 30, 2018 Department Project # Priority 2019 2020 2021 2022 2023 Total Regulator Station Improvements 378G-20-1 Regulator Station Improvements 378G-21-1 Regulator Station Improvements 378G-22-1 Service Lines 380G-19-1 Service Lines 380G-20-1 Service Lines 380G-21-1 Service Lines 380G-22-1 Service Lines 380G-23-1 Meters, AMI & All Fittings 381G-19-1 Meters, AMI & All Fittings 381G-20-1 Meters, AMI & All Fittings 381G-21-1 Meters, AMI & All Fittings 381G-22-1 Meters, AMI & All Fittings 381G-23-1 Residential Regulators 383-19-1 Industrial Metering & Regulation 385G-19-1 Industrial Metering & Regulation 385G-20-1 Industrial Metering & Regulation 385G-21-1 Pressure Monitors - AMI System, Laser Gas Detector 387-19-1 Natural Gas Sonic Nozzle Meter Prover 395-20-1 Ford F350 Super Duty Pickup 623 Ford F-150 X-cab 651 Chevrolet 4 Door X-cab 948 Natural Gas - Distribution Total Natural Gas - Transmission Regulator 2 - Replacement 369-19-2 Natural Gas - Transmission Total GRAND TOTAL 2 15,000 15,000 2 15,000 15,000 2 15,000 15,000 2 57,000 57,000 2 55,000 55,000 2 55,000 55,000 2 55,000 55,000 2 55,000 55,000 2 95,000 95,000 2 90,000 90,000 2 90,000 90,000 2 90,000 90,000 2 90,000 90,000 2 35,000 35,000 2 80,000 80,000 2 30,000 30,000 2 30,000 30,000 1 20,000 20,000 3 75,000 75,000 1 70,000 70,000 1 60,000 60,000 1 65,564 65,564 1,247,000 432,700 265,000 418,033 195,000 2,557,733 3 28,000 28,000 28,000 28,000 2,342,523 1,275,219 1,048,180 933,669 608,592 6,208,183 Produced Using the Plan -It Capital Planning Software Page 3 Friday, November 30, 2018 HUTCHINSON UTILITIES COMMISSION�� Board Action Form �'Ylkll'M1'k� Agenda Item: Consideration of 2019 Non -Union Pay Grid & Performance Increase / Merit Guide Presenter: Jeremy Carter Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: Per the objectives of the HUC Compensation Plan for non -union employees as established as part of the HUC Exempt Employee Handbook, HUC will: a) Establish and maintain a compensation plan that enables HUC to be highly competitive within our defined industry. b) Lead or exceed the market in attracting and retaining qualified, reliable and motivated employees who are committed to quality and excellence for those we serve. c) Ensure, subject to the financial condition of HUC, that employees receive fair and equitable compensation in relation to their individual contributions to HUC's success. To accomplish this, HUC annually considers a market adjustment to the current pay grid to accomplish these objectives. In determining a recommendation for an annual market adjustment, the General Manager shall consider, at least the following information: 1. U.S. and Mpls/St. Paul consumer -priced index changes (CPIU & CPIW) Nov. - 2.2% for the US; 1.2% Mpls/St. Paul; 1.7% Avg 2. Social Security calculation of cost of living increase - 2.8% COLA for 2019 3. Unemployment rate - 2.3% Hutchinson October rate 4. Employee turnover rate - >2% 5. Area wage survey - Limited information available - City proposed 2% grid adjustment 6. Legislative growth factor constraints 7. Bargaining Unit Increase - 2% 1/1/2018 & 2% 7/1/2018 Atfiqrhi-d is the recommended iav arid for 2019 that Oncorporateg a 0 BOARD ACTION REQUESTED: Approve the proposed 2019 non -union pay grid and the 2019 merit guide with the lump sum payment component for non -union performance increases . 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Past amounts written off are listed below. 2018: $ 9,850.78 includes this request and May request. 2017: $31,967.78 2016. $11,350.31 2015: $ 7,537.92 2014: $41,279.16 2013: $ 4,316.12 2012: $ 4,067.15 2011. $ 9,792.12 BOARD ACTION REQUESTED: Approve Charge Offs Fiscal Impact: Included in current budget: Budget Change: PROJECT SECTION: Total Project Cost: Remaining Cost: HUTCHINSON UTILITIES COMMISSION�� Board Action Form �'Ylkll'M1'k� Agenda Item: Fagen Change Order Presenter: Jeremy/Randy Agenda Item Type: Time Requested (Minutes): 5 New Business Attachments: Yes BACKGROUND/EXPLANATION OF AGENDA ITEM: As part of the mechanical installation and completion of unit 6 & 7 there had to be pier and slab modifications to the existing site and diagrams that were not anticipated. Once excavation started to take place it was discovered infrastructure underground was not in the locations previously thought, and no documents existed from some of the original installations back in the 1960s. The Fagen change order for $47,415.52 covers the cost of Labor, materials, additional subcontract work, document redesign, and equipment to modify the piers and change locations of some of the piers and slab work from previously determined locations. This Change Order will be covered by contingency dollars previously budgeted. BOARD ACTION REQUESTED: Approve Fagen Inc. Change Order Request Fiscal Impact: $47,415.52 Included in current budget: Yes Budget Change: PROJECT SECTION: Total Project Cost: $16,886,405 Remaining Cost: Pier & Slab Modification Change Item Cost �M:ar—kup—Tal—esTax -::]— Total Labor $16,667.39Included n/a $16,667.39 Materials $3334.70 15% 7.375% $3,334.70 Subcontracts $20,070.86 5% n/a $20,070.86' Equipment $5,481.00 n/a n/a $5,481.00 subtotal $45,553.95 15% OH & P - Materials $500.21 5% OH & P - Subcontracts $1,003.54 Sales Tax at 7.375% $282.82 Added Builder's Risk Premium $75.00 TOTAL $47,415.52 Position Project Manager Civil Superintendent Civil Journeyman Equipment Operator Composite Labor Rate based on 50 hour work week Regular Rate ST Hours OT Rate OT Hours Composite Rate $ 93.97 40 $ 130.07 10 $ 101.19 $ 80.29 40 108.65 10 $ 85.96 $ 53.69 40 71.12 10 $ 57.18 $ 56.95 40 75.72 10 $ 60.70 Material Takeoff Description Takeoff Quantity Material Price Material Amount Mid America - redetailing slab rebar 1.00 Is 420.00 /ea $ 420.00 Mid America - redetailing slab rebar 1.00 Is 125.00 /ea $ 125.00 80 sticks #4 rebar for slab mods 1.00 Is 560.00 /ea $ 560.00 Temporary Shelters 6.00 ea 200.00 /ea $ 1,200.00 Form Material 100.00 sf 2.25 /sf $ 225.00 4000 PSI concrete 3.39 cy 110.00 /cy $ 373.07 Liquid Curing Compound 69.75 SF 0.08 /sf $ 5.58 Chamfer 90.00If 0.47 /If $ 42.30 Epoxy Grout 3.07 cf 180.00 /cf $ 552.60 Credit for Cementious Grout 3.07 cf 55.00 /cf $ (168.85) Total $ 3,334.70 Subcontracts Description -- Takeo-ff- Q- u-aa ntity Midwest Fnd - P12 pier extension 1.00 ea Harris Rebar - P16 pier extension 1.00 ea Midwest Fnd - delay and obstruction 20.50 hrs drilling due to revised layout EG Rud - Additional layout 1.00 Is EG Rud - Additional layout for revisions 1.00 Is Sub Price Sub Amount 1,541.36 /ea $ 1,541.36 1,750.00 /ea $ 1,750.00 610.00 /hr $ 12,505.00 548.00 /Is $ 548.00 3,726.50 /Is $ 3,726.50 TOTAL $ 20,070.86 Equipment Rental Description Takeoff Quantlty Equip Price Equip Amount Welder, Portable 2.00 day 135.00 /day $ 270.00 Forklift, Telescoping 8M 1.00 day 450.00 /day $ 450.00 Rebar Bender 2.00 day 243.00 /day $ 486.00 Ground Thaw Machine 7.00 day 585.00 /day $ 4,095.00 Vibrator, Concrete High Frequency 1.00 day 90.00 /day $ 90.00 Scabbler/Scarifier- Hilti DG150 1.00 day 90.00 /day $ 90.00 TOTAL $ 5,481.00 Labor Calculation Description Takeoff Quantity Temporary Shelters 6.00 ea Manhours for Heating Shelters 6.00 ea Project Manager 3.00 day Civil Superintendent 3.00 day Form Equipment Pad 100.00 sf Install Chamfer 90.00 If Install Pad Rebar 0.48 to Modify Existing Rebar 1.00 Is Place Concrete Equipment Pads 3.23 cy Scarify Slabs 70.00 sf Install Owner Supplied Vault Cover in Slab 1.00 Is Labor Quantity Labor Price Labor -A- mount 48.00 mh 57.18 /mh $ 2,744.64 14.00 mh 57.18 /mh $ 800.52 30.00 mh 101.19 /mh $ 3,035.70 30.00 mh 85.96 /mh $ 2,578.80 45.00 mh 57.18 /mh $ 2,573.10 4.80 mh 57.18 /mh $ 274.46 24.00 mh 57.18 /mh $ 1,372.32 20.00 mh 57.18 /mh $ 1,143.60 20.00 mh 57.18 /mh $ 1,143.60 7.50 mh 57.18 /mh $ 428.85 10.00 mh 57.18 /mh $ 571.80 LABOR TOTAL $ 16,667.39