Loading...
08-31-2011 HUCMRegular Meeting August 31, 2011 Members present: President Robert Hantge; Vice President Paul Nordin; Secretary Dwight Bordson; Commissioner Donald H. Walser; Attorney Marc Sebora; General Manager Michael Kumm Members absent: Commissioner Craig Lenz President Hantge called the meeting to order at 3:04 p.m. Agenda item #5: Wartsila North America contract was moved to agenda item #2; Agenda item #2: Ratify Payment of Bills was moved to agenda item #3; Agenda item #3: Approve Financial Statements /Budget Year -to -Date was moved to agenda item #4; and Agenda item #4: Joint Action Agency was moved to agenda item #5. The minutes of July 27, 2011 regular meeting were reviewed. A motion was made by Commissioner Walser, seconded by Secretary Bordson to approve the minutes as written. Motion was unanimously carried. GM Kumm presented the Wartsila North America contract for the natural gas fired reciprocating internal combustion engine generator set and auxiliaries. A 10 -day extension was given to work out details and sign contract by September 10, 2011. After discussion, a motion was made by Commissioner Walser, seconded by Secretary Bordson to grant GM Kumm and Steve Lancaster, Director of Electric authorization to sign the Wartsila North America contract pending the attorney's review, and issue the down payment check in the amount of $1,685,000 to Wartsila North America for the natural gas fired reciprocating internal combustion engine generator set and auxiliaries. Motion was unanimously carried. (Contract attached.) At this time Attorney Marc Sebora left the meeting: 3:22 p.m. The July 2011 payables were discussed. A motion was made by Vice President Nordin, seconded by Commissioner Walser to ratify the payment of bills in the amount of $2,864,288.47 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the July 2011 financial statements /budget year -to -date. After discussion, a motion was made by Commissioner Walser, seconded by Vice President Nordin to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm gave an update on the transmission owner membership in MISO. President Hantge presented information regarding HUC's having the ability to assume the benefits of being a Joint Action Agency without becoming one. This is done by becoming a Municipal Power or Municipal Gas Agency. GM Kumm suggested it is worth exploring as continuing to do business without becoming one would impact future large projects. After discussion, the Board recommended further research into the possibility of HUC becoming a Municipal Power or Municipal Gas Agency. Also, the Board recommended adding this to unfinished business to discuss further in the September's regular commission meeting. Vice President Nordin presented a hand -out of the City of Hutchinson's IT budget to assist in discussing the City's consideration of hiring an IT staff person to support the additional work load that's been added since the IT staff was reduced by one person due to budget cuts in 2010. This is informational and for discussion only. HUC currently pays a reimbursement charge to the City of $75,000 per year for IT support of servers, personal computers and software. After discussion, the Board recommended adding this to unfinished business to discuss further in the September's regular commission meeting. GM Kumm presented for review the policies and requirements booklet, sections: deposit requirement for residential; deposit requirement for commercial /industrial; and cold weather rule. No changes were recommended. GM Kumm presented changes to exempt and non - exempt handbooks, sections: vacation - exempt only; and holidays. Recommended changes were made due to past practice. After discussion, a motion was made by Secretary Bordson, seconded by Commissioner Walser to approve changes to the exempt and non - exempt handbooks, sections: vacation - exempt only; and holidays. Motion was unanimously carried. (Changes attached.) Division Reports Gas — John Webster • Working with FEMA regarding July 1 HUC storm damage costs; FEMA covers 75% of costs and State covers 25% • Secured generation gas at a price of $4.60 for the month of January 1, 2012 Business — Jan Sifferath • Attending APPA Business and Finance conference September 19 through September 21 in Denver, Colorado • In the past, HUC has shared life insurance contract with the City of Hutchinson. The City has changed their life insurance broker. HUC has remained with same broker and secured own life insurance contract with CIGNA and Hartford with no increase in fees. • Planning on public power week in October GM Kumm updated the Board on the MMUA Board meeting. Legal Update Nothing to report Unfinished Business • GM Kumm discussed options to create a green rate. GM Kumm will research further and report back to the Board next month. • GM Kumm reported R.W. Beck will conduct a rate study this year New Business • President Hantge presented a hand -out regarding Hutchinson Economic Development Authority participating in a sponsorship of the Angel Network which would invest in new local businesses; EDA is inquiring of HUC's consideration of partnering with the City in supporting the Angel Network • President Hantge appointed Vice President Nordin and Secretary Bordson as the General Manager performance review team • Natural Gas Feasibility o Discussion held regarding revisiting the opportunity to use natural gas compressor stations as an option to fuel vehicles; GM Kumm to research and report back to Board There being no further business, a motion was made by Commissioner Walser, seconded by Secretary Bordson to adjourn the meeting at 4:33 p.m. Motion was unanimously carried. ATTEST: Robert Hantge, President Dwight Bordson, Secretary Regular Meeting August 31, 2011 Members present: President Robert Hantge; Vice President Paul Nordin; Secretary Dwight Bordson; Commissioner Donald H. Walser; Attorney Marc Sebora; General Manager Michael Kumm Members absent: Commissioner Craig Lenz President Hantge called the meeting to order at 3:04 p.m. Agenda item #5: Wartsila North America contract was moved to agenda item #2; Agenda item #2: Ratify Payment of Bills was moved to agenda item #3; Agenda item #3: Approve Financial Statements /Budget Year -to -Date was moved to agenda item #4; and Agenda item #4: Joint Action Agency was moved to agenda item #5. The minutes of July 27, 2011 regular meeting were reviewed. A motion was made by Commissioner Walser, seconded by Secretary Bordson to approve the minutes as written. Motion was unanimously carried. GM Kumm presented the Wartsila North America contract for the natural gas fired reciprocating internal combustion engine generator set and auxiliaries. A 10 -day extension was given to work out details and sign contract by September 10, 2011. After discussion, a motion was made by Commissioner Walser, seconded by Secretary Bordson to grant GM Kumm and Steve Lancaster, Director of Electric authorization to sign the Wartsila North America contract pending the attorney's review, and issue the down payment check in the amount of $1,685,000 to Wartsila North America for the natural gas fired reciprocating internal combustion engine generator set and auxiliaries. Motion was unanimously carried. (Contract attached.) At this time Attorney Marc Sebora left the meeting: 3:22 p.m. The July 2011 payables were discussed. A motion was made by Vice President Nordin, seconded by Commissioner Walser to ratify the payment of bills in the amount of $2,864,288.47 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the July 2011 financial statements /budget year -to -date. After discussion, a motion was made by Commissioner Walser, seconded by Vice President Nordin to approve the financial statements /budget year -to -date. Motion was unanimously carried. GM Kumm gave an update on the transmission owner membership in MISO. President Hantge presented information regarding HUC's having the ability to assume the benefits of being a Joint Action Agency without becoming one. This is done by becoming a Municipal Power or Municipal Gas Agency. GM Kumm suggested it is worth exploring as continuing to do business without becoming one would impact future large projects. After discussion, the Board recommended further research into the possibility of HUC becoming a Municipal Power or Municipal Gas Agency. Also, the Board recommended adding this to unfinished business to discuss further in the September's regular commission meeting. Vice President Nordin presented a hand -out of the City of Hutchinson's IT budget to assist in discussing the City's consideration of hiring an IT staff person to support the additional work load that's been added since the IT staff was reduced by one person due to budget cuts in 2010. This is informational and for discussion only. HUC currently pays a reimbursement charge to the City of $75,000 per year for IT support of servers, personal computers and software. After discussion, the Board recommended adding this to unfinished business to discuss further in the September's regular commission meeting. GM Kumm presented for review the policies and requirements booklet, sections: deposit requirement for residential; deposit requirement for commercial /industrial; and cold weather rule. No changes were recommended. GM Kumm presented changes to exempt and non - exempt handbooks, sections: vacation - exempt only; and holidays. Recommended changes were made due to past practice. After discussion, a motion was made by Secretary Bordson, seconded by Commissioner Walser to approve changes to the exempt and non - exempt handbooks, sections: vacation - exempt only; and holidays. Motion was unanimously carried. (Changes attached.) Division Reports Gas — John Webster • Working with FEMA regarding July 1 HUC storm damage costs; FEMA covers 75% of costs and State covers 25% • Secured generation gas at a price of $4.60 for the month of January 1, 2012 Business — Jan Sifferath • Attending APPA Business and Finance conference September 19 through September 21 in Denver, Colorado • In the past, HUC has shared life insurance contract with the City of Hutchinson. The City has changed their life insurance broker. HUC has remained with same broker and secured own life insurance contract with CIGNA and Hartford with no increase in fees. • Planning on public power week in October GM Kumm updated the Board on the MMUA Board meeting. Legal Update Nothing to report Unfinished Business • GM Kumm discussed options to create a green rate. GM Kumm will research further and report back to the Board next month. • GM Kumm reported R.W. Beck will conduct a rate study this year New Business • President Hantge presented a hand -out regarding Hutchinson Economic Development Authority participating in a sponsorship of the Angel Network which would invest in new local businesses; EDA is inquiring of HUC's consideration of partnering with the City in supporting the Angel Network • President Hantge appointed Vice President Nordin and Secretary Bordson as the General Manager performance review team • Natural Gas Feasibility o Discussion held regarding revisiting the opportunity to use natural gas compressor stations as an option to fuel vehicles; GM Kumm to research and report back to Board There being no further business, a motion was made by Commissioner Walser, seconded by Secretary Bordson to adjourn the meeting at 4:33 p.m. Motion was unanimously carried. Dwight Bordson, Secretary ATTEST: Han e, resident HDR 8.18.11 TABLE OF CONTENTS Article 1 -GOODS AND SERVICES ..................................................................... ............................... 1 Article2 - THE PROJECT ...................................................................................... ............................... 1 Article 3 - POINT OF DESTINATION .................................................................. ............................... 1 Article 4 - TERMS AND DEFINITIONS ............................................................... ............................... 1 Article5 - CONTRACT TIMES ............................................................................. ............................... 2 Article 6 - CONTRACT PRICE .............................................................................. ............................... 3 Article 7 - PAYMENT PROCEDURES .................................................................. ............................... 3 Article8 - INTEREST ............................................................................................. ............................... 4 Article 9 - PARTIES' REPRESENTATIONS ........................................................ ............................... 4 Article10 -MISCELLANEOUS ............................................................................ ............................... 5 Page i HDR 8.18.11 F:TW9 04 D16- M" THIS AGREEMENT is by and between Hutchinson Utilities Commission; 225 Michigan St. SE, Hutchinson, MN 55350 ( "Buyer ") and Wartsila North America, Inc, 16330 Air Center Blvd, Houston, TX 77032 ( "Seller "), (each a "Party ", and together the "Parties "). WHEREAS, Buyer is developing Nominal 9.3 MW gross power generation project (the "Project ") to be located in Hutchinson, Minnesota, the United States; and WHEREAS, in connection with the Project, Buyer desires to purchase from Seller one Wartsila 20V34SG engine generator set, along with appurtenant equipment and related technical services, all as more particularly described herein. NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound, the Parties hereto agree as follows, Buyer and Seller hereby agree as follows: ARTICLE 1 — GOODS AND SERVICES 1.01 Seller shall furnish the Goods and Services as specified or indicated in the Contract. ARTICLE 2 — THE PROJECT 2.01 The Project, of which the Goods and Services may be identified as that set forth in Exhibit OSeepe of Supply "` Ana E-xhib�Teehnieal Speeifieat}en92�the Contract as defined in the General ConditionjLMn. ARTICLE 3 — POINT OF DESTINATION 3.01 The Point of Destination is designated as: 44 4`M Avenue NE Hutchinson, MN 55350. ARTICLE 4 — TERMS AND DEFINITIONS 4.01 Any capitalized terms not otherwise defined in this Agreement shall have the meaning given to such terms in the General Conditions. Any other terms shall be used consistent with the rules governing interpretation as provided in the Contract. This Agreement is subject to the General Conditions. In the event of a conflict between the two, the General Conditions shall prevail. Page 1 HDR 8.18.11 ARTICLES — CONTRACT TIMES Milestones 5.01 Milestones A. Days for Submittal of technical information, Shop Drawing: Seller shall submit all Shop Drawings required by the Contract to Buyer for Buyer's review, (except for non- standard structural steel drawings, tanks, and pressure vessels that Buyer is authorized to review according to the terms of Exhibit E ( "Project Schedule ") subsequent to the commencement of the Contract Times as defined in the Contract. 4W] It is the intent of the parties that (1) Buyer conduct such review and issue its approval accompanied by any substantive comments needed to gain approval, within ten (10) days of Seller's submittal of such Shop Drawings and; and (2) resubmittals be limited whenever possible. If more than one resubmittal is necessary for reasons not the fault and beyond the control of Seller, then Seller shall be entitled to seek appropriate relief under Paragraph 7.04.A of the General Conditions. B. Days for Furnishing Services: The furnishing of Services to Buyer will commence within one - hundred -and- twenty (120)_ days after Buyer's acknowledgement of receipt of delivery of the Goods, and shall be completed within one- hundred -and- twenty (120) thereafter. C. Days to Achieve Delivery of Goods: The Goods are to be delivered to the Point of Destination and ready for Buyer's receipt of Delivery according to the provisions of Exhibit E ( "Project Schedule "). 5.02 Buyer's Final Inspection Days to Achieve Final Inspection: Buyer shall make its final inspection of the Goods pursuant to Paragraph 7.01.G of the General Conditions within Ove- (3)ten 10 days �40]after conclusion of the Performance Tests. 5.03 Delay Liquidated Damages for Delivery Buyer and Seller recognize that Buyer may suffer financial loss if the Engine Generator is not delivered at the Point of Destination within the times specified in Exhibit E (the "Project Schedule "). Further, they recognize the delays, expense, and difficulties involved in proving the actual loss suffered by Buyer if the Engine Generator is not delivered on time. Accordingly, instead of requiring such proof, Buyer and Seller agree that as liquidated damages for Seller's delay of delivery (but not as a penalty) Seller shall pay Buyer $3,000 for each day that expires after the time specified in Exhibit E (the "Project Schedule ") for delivery of the Engine Generator. 5.04 Liquidated Damages for Capacity and Heat Rate Buyer and seller agree to the following in the event that the Engine Generator installation fails to meet the Capacity and Heat Rate Guarantees ( "Performance Liquidated Damages "): Page 2 HDR 8.18.11 1 As to Heat Rate $1500.00 /Btu/kWh 2. As to Capacity $1343 / KW ustabhe wb4] tO the aletilation of 6.01 A. ffeentfa ptiee) / 93 41) X 1. 5 — The Performance Tests shall be conducted by Supplier utilizing Buyer's personnel in accordance with the Final Test Procedure. Buyer's personnel shall act under the supervision of Supplier's technical personnel. Upon completion of the Performance Tests, the Acceptance Certificate confirming Buyer's acceptance of the Equipment shall be signed by both Parties ( "Acceptance Certificate "). The effective date of the Performance Tests' completion shall be deemed the day that Supplier successfully completes the Performance Guarantees or meets the Minimum Performance Guarantees as defined in Exhibit HH. If (a) Buyer commences Commercial Operation of the Plant before completion of the Performance Tests, or (b) the conduct of the Performance Tests is delayed more than forty five (45) days after the execution of the Start-Up Certificate for reasons other than the breach of Supplier's obligations under this Agreement, the obligation to conduct the Performance Tests shall be deemed waived, Supplier shall have no liability for Performance Liquidated Damages, and Buyer shall pay Supplier the remaining milestones under the Milestone Payment Schedule. Under no circumstances shall Seller's liability for Performance Liquidated Damages in the aggregate exceed ten percent (10 %) of the Contract Price. ARTICLE 6 — CONTRACT PRICE 6.01 Buyer shall pay Seller for furnishing the Goods and Services in accordance with the Contract as follows: A. A Lump Sum of M8.364,425 �-wbs]subject to Paragraph 2 04 of the Centraet Article 7. And the conditions of the Contract ARTICLE 7 — PAYMENT PROCEDURES 7.01 Submittal and Processing of Payment A. Seller shall submit Applications for Payment in accordance with the Contract. Applications for Payment will be processed as provided in the Contract. 7.02 Milestone Payment Schedule; Buyer shall make milestone payments on account of the Contract Price on the basis of Seller's Applications for Payment exclusive of the Buyer's obligation to pay the Down Payment on the Effective Date which obligation shall not require that the Seller submit an Application for Payment, as follows: A. The Down Payment of 20% shall be made on the Effective Date as defined in the General Conditions. Page 3 >IF)pRIR11 B. Completion of Design 10% C. Crankshaft in engine block 30% D. Engine Generator, Ex -works Vaasa 20% E. Engine Generator delivered at Point of Destination 5% F. Auxiliary equipment delivery complete 5% G. Start-up Commissioning H. Testing 5% 5% 1. Upon receipt of the Application for Payment submitted in accordance with Paragraph 8.01A of the General Conditions and accompanied by payment in accordance with Paragraph 8.02.A of the General Conditions, an amount equal to the relevant above - listed percentage of the Contract Price. In the event a Change Order is issued, the amount of the Change Order shall be reflected in the next payment. 7.03 Final Payment A. Upon receipt of the final Application for Payment, Buyer shall pay Seller, less Delay and / or Liquidated Damages as applicable. ARTICLE 8 — INTEREST 8.01 All monies not paid by Buyer to Seller when due as provided in Article 8 of the General Conditions shall bear interest at the �5 %. I[TCKE61 ARTICLE 9 — PARTIES' REPRESENTATIONS SELLER'S REPRESENTATIONS In order to induce Buyer to enter into this Agreement, Seller represents that it: : A. has examined and carefully studied the Contract pertaining to the furnishing of the Goods and Services, as applicable to Seller's obligations and identified in Seller's Scope of Supply and Technical Specifications. B. will perform its obligations and rights under this Agreement, and not unreasonably interfere with the Buyer's work; and C. will perform all its obligations in good faith and in accordance with Prudent Electric Practices. D. shall be responsible for settin t7- ro erly mounting and ali ning_ iWb�lthe Engine Generator on the pad provided by Buyer. E. Provide initial (first fills) of lubricants, chemicals, water, and other consumables necessary for Start-up and Performance Tests, in accordance with Annex [ ] and Page 4 HDR 8.18.11 �xhibit�-wbq [ ], including yea ef-ammonia and catalyst, that are free of constituents that may adversely affect the Goods' performance; BUYER'S REPRESENTATIONS In order to induce Seller to enter into this Agreement, Buyer makes the following representations and shall be responsible for the following activities, each to be at Buyer's expense: A. Pay the Contract Price in accordance with the Milestone Payment Schedule. Be responsible for the storage of the Goods (after Delivery if necessary) in accordance with the Seller's storage guidelines; B. Install the Goods at the Plant Site in accordance with Seller's specifications. Buyer shall be responsible for offloading the Goods except for Engine Generator Set; C. Provide reasonable, safe, and timely access to the Plant to Seller's personnel for performance of its work hereunder, including the Services, and Delivery. Buyer shall also provide Seller an adequate and safe storage area for Seller's tools and parts necessary to conduct the Services hereunder; D. Provide competent and experienced personnel to assist Seller in conducting the Good's commissioning, Start-Up, and Performance Tests, including personnel who are qualified to operate and maintain the Goods during Start-Up and conduct of the Performance Tests; E. Obtain on a timely basis all Governmental Approvals necessary for the importation and customs clearance of the Goods and the construction, commissioning, Start-up, testing and operation of the Plant; F. Enter into all necessary contracts and agreements or as otherwise required for the dispatch of electric power produced during Start -Up and Performance Tests; G. Provide fuel for Start-Up and Performance Tests, in accodance with Exhibit _ Provide necessary for Start-up and Performance Tests, in accordance with Annex [ ] X and Exhibit [ ], that is free of constituents that may adversely affect the Goods' performance; H. Timely perform its obligations and rights under the Contract, and not interfere with the Seller's work; and ARTICLE 10 — MISCELLANEOUS 10.01 Anti - Corruption Certifications A. The Parties certify that they have not engaged in corrupt, fraudulent, collusive, or coercive practices in competing for or in executing the Contract. For the purposes of this Paragraph 10.01601: Page 5 HDR 8.18.11 1. "corrupt practice" means the offering, giving, receiving, or soliciting of any thing of value likely to influence the action of a public official in the bidding process or in the Contract execution; 2. "fraudulent practice" means an intentional misrepresentation of facts made (a) to influence the bidding process or the execution of the Contract to the detriment of Buyer, (b) to establish Bid or Contract prices at artificial non - competitive levels, or (c) to deprive Buyer of the benefits of free and open competition; 3. "collusive practice" means a scheme or arrangement between two or more Bidders, with or without the knowledge of Buyer, a purpose of which is to establish Bid prices at artificial, non - competitive levels; and 4. "coercive practice" means harming or threatening to harm, directly or indirectly, persons or their property to influence their participation in the bidding process or affect the execution of the Contract. 10.02 Other Provisions A. Factory Tests. Buyer and its representatives, which may include an internationally recognized inspection service selected by by Buyer, ( "Buyer's Inspector "), shall have the right to witness the Engines' factory tests. The date and time of the inspection and tests shall be communicated to Buyer reasonably in advance, but in no event less than thirty (30) days' notice of the week that the tests will occur, to allow Buyer or any of its representatives to attend such factory tests. Testing shall be performed at the factory of Seller during normal working hours. Seller shall bear the expenses of such factory tests, but Buyer shall bear the costs (including travel and lodging) of its representatives attending such tests, exclusive of travel the travel of four of the buyer's representatives and lodging to last 5 days for each respective representative. Buyer's personnel or representatives shall adhere to the safety and security rules in effect at the location where the tests are being conducted. B. Delivery Inspection. Upon Delivery, Buyer and its representatives shall, at Buyer's cost, inspect the Goods. Buyer shall, within ten (10) business days after Delivery, give notice to Seller of any relevant matter which Buyer considers not to be in accordance with this Contract. If Buyer fails to give such notice, or if Buyer fails to conduct such inspection, the Goods shall be considered in all respects to be in accordance with this Contract. Buyer shall have no right to reject or refuse Delivery of the Goods by reason of minor defects, shortages, damages, or errors which do not prevent the reasonable progress of the work or the normal operation of the Goods, provided that Seller agrees to remedy such defects after the Delivery of the Goods. C. Installation. Buyer commence installation install of �he Goods not later UWbiolthan ninety (90) �-Wbigdays after last Delivery occurs. Seller shall provide technical advice to Buyer during the Goods's installation. The amount of Seller's installation advisory man-days allocated for the Goods's installation is specifically listed in terms of the Contract.. Buyer shall be solely responsible for the proper and timely installation of the Goods in accordance with this Contract, Prudent Electric Practices and manufacturer's manuals and recommendations. Once Buyer installs the Goods, Buyer Page 6 HDR 8.18.11 shall notify Seller in writing of the by issuing the Mechanical Completion Certificate. Should Buyer fail to install the Goods pursuant to this Section, for reasons other than Seller's breach of its obligations hereunder or an Event of Force Majeure, the obligation to conduct the Performance Tests shall be deemed waived, Seller shall have no liability for Performance Liquidated Damages, and Buyer shall pay Seller the remaining milestones under the Milestone Payment Schedule. D. Start-Up. Promptly following installation and Buyer's notification to Seller that the Goods has been installed properly, Seller shall perform the Goods's commissioning and start-up, utilizing Buyer's personnel under Seller's supervision, to confirm conformance of the Goods to the Technical Specifications (the "Start-Up "). The Start- Up shall be performed in accordance with Prudent Electric Practices and Seller's commissioning guidelines, �ncluding all the Engines�UWbizj synchronized and running simultaneously on full load for fifteen hours. Seller reserves the right to stop the Start- Up procedure in order to make the necessary adjustments to the Goods. Under no circumstance shall Buyer be authorized to carry out the Start-Up without Seller's advising. Upon the completion of Start-Up of all Engines, Seller shall issue a certificate to Buyer indicating that Start-Up is complete (the "Substantial Completion Certificate "). E. Additional Services. Seller's amount of man-hours allocated to the Start-Up process is specifically set forth in Exhibit A. Should additional services or man-hours be necessary for the Goods's Start Up due to reasons other than Seller's breach of its obligations hereunder, Buyer may request, and, subject to Change Orders 4 add reference of the General Conditions, the Parties may mutually agree upon additional services to be provided by Seller to Buyer. Notwithstanding the foregoing, Buyer shall not be responsible for paying for additional services or man-days resulting from Seller's breach of its obligations under this Contract. The rates for the applicable services shall remain consistent with Exhibit I until December 31, 2012. F. Performance Tests. Promptly following issuance of the Substantial Completion Certificate, the Performance Tests shall be conducted in order to demonstrate the compliance of the Goods with the Performance Guarantees. The Performance Tests shall be conducted by Seller utilizing Buyer's personnel in accordance with the Final Test Procedure. Buyer's personnel shall act under the supervision of Seller's technical personnel. Upon completion of the Performance Tests, the Acceptance Certificate confirming Buyer's acceptance of the Goods shall be signed by both Parties ( "Acceptance Certificate "). The effective date of the Performance Tests' completion shall be deemed the day that Seller successfully completes the Performance Guarantees or meets the Minimum Performance Standards. If (a) Buyer commences Commercial Operation of the Plant before completion of the Performance Tests, or (b) the conduct of the Performance Tests is delayed more than forty five (45) days after the execution of the Start-Up Certificate for reasons other than the breach of Seller's obligations under this Contract, the obligation to conduct the Performance Tests shall be deemed waived, Seller shall have no liability for Performance Liquidated Damages, and Buyer shall pay Seller the remaining milestones under the Milestone Payment Schedule. Page 7 11DR 8.18.11 G. Punchlist. Promptly, but in no event later than five (5) working days, following Performance Tests, the Parties shall review the Seller's work under this Contract, and compile a list of work needed to be completed by Seller (the "Punchlist "). Seller shall use all reasonable efforts to complete the Punchlist items no later than one hundred and fifty (150) days after the Parties agree on the Punchlist. Should Seller fail to complete the Punch List within two hundred and ten (210) days after the Punchlist has been agreed upon, then Buyer shall have the right to complete any remaining Punchlist items and Seller shall reimburse Buyer for the direct costs and expenses of completion of such Punchlist work. Page 8 HDR 8.18.11 IN WITNESS WHEREOF, Buyer and Seller have signed this Agreement. Counterparts have been delivered to Buyer and Seller. All portions of the Contract have been signed or identified by Buyer and Seller or on their behalf. Buyer: Hutchinson Utilities Commission Seller: [Corporate Seal] Attest: Address for giving notice: 225 Michigan St. SE Hutchinson, MN 55350 Attn: Mr. Steve Lancaster (If Buyer is a corporation, attach evidence of authority to sign. If Buyer is a public body, attach evidence of authority to sign and resolution or other documents authorizing execution of Buyer - Seller Agreement.) Designated Representative: Name: Mr.Steve Lancaster. Title: Director Electric Division Address: 225 Michigan St. SE Hutchinson, MN 55320 Phone: 320.234.0547 Facsimile: 320.587.4721 Los [Corporate Seal] Attest: Address for giving notice:�_wb13] Agent for service of process: (If Seller is a corporation or a partnership, attach evidence of authority to sign.) Designated Representative: Name: Title: Address: Phone: Facsimile: Page 9 EXEMPT SECTION 5 — EMPLOYEE BENEFITS VACATION Exempt employees shall accrue paid vacation on the employment anniversary date according to the following schedule: Number of Years Employed Vacation '/2 20 hours 1 40 hours 2 80 hours 7 120 hours 11 128 hours 12 136 hours 13 144 hours 14 152 hours 15 160 hours 16 168 hours 17 176 hours 18 184 hours 19 192 hours 20 200 hours Vacation may be used after completion of the probationary period. Employees must receive prior approval of their vacation requests from their Director, Manager or Supervisor. V.,ea4io wil ~�* A vacation request for more than one day must be submitted in person at least two workdays in advance. (For example, if an employee is scheduled to work Wednesday, Thursday, Monday and the employee wants to take Monday afternoon as vacation, the employee must submit a request in person by Wednesday afternoon.) An employee may carry over up to a maximum of one time their annual accrual of vacation into the next vacation year. Vacation year is defined as service anniversary to service anniversary. Each permanent full -time employee must use at least 40 hours of vacation leave each year. New employees who only receive 40 hours of vacation per year must use at least 20 hours of vacation leave each year. Employees who are on vacation and experience a disabling accident or illness may use sick leave instead of vacation upon providing their Director, Manager or Supervisor appropriate proof of the accident or illness. NON - EXEMPT SECTION 5 — EM PLOYEE BENEFITS VACATION See Union Contract. EXEMPT HOLIDAYS Employees are eligible for holiday pay effective immediately upon hire. The Utilities will observe the following days as holidays: • New Year's Day • Martin Luther King Day • President's Day • Memorial Day • Fourth of July • Labor Day • Veteran's Day • Thanksgiving Day • Christmas Day If the holiday falls on a Sunday, the following Monday shall be the holiday. If the holiday falls on a Saturday, the preceding Friday shall be the holiday. If Christmas falls on a Tuesday, Wednesday, Thursday or Friday, then the preceding day shall be a Christmas Eve Day holiday. Additionally, there shall be two (2) floating holidays determined by mutual agreement between the employee and Director, Manager or Supervisor. If Christmas falls on a Saturday, Sunday, or Monday, there shall be no Christmas Eve Day holiday but there shall be three (3) floating holidays determined by mutual agreement between the employee and Director, Manager or Supervisor. Floating ays must be used by the end of each calendar Employees will be paid eight (8) hours straight time for each of the holidays. Temporary employees who work on a holiday will be paid at the employee's regular base pay rate and will not receive holiday pay for hours not worked. NON - EXEMPT HOLIDAYS Employees are eligible for holiday pay effective immediately upon hire. The Utilities will observe the following days as holidays: • New Year's Day • Martin Luther King Day • President's Day • Memorial Day • Fourth of July • Labor Day • Veteran's Day • Thanksgiving Day • Christmas Day If the holiday falls on a Sunday, the following Monday shall be the holiday. If the holiday falls on a Saturday, the preceding Friday shall be the holiday. If Christmas falls on a Tuesday, Wednesday, Thursday or Friday, then the preceding day shall be a Christmas Eve Day holiday. Additionally, there shall be two (2) floating holidays determined by mutual agreement between the employee and Director or Manager. If Christmas falls on a Saturday, Sunday, or Monday, there shall be no Christmas Eve Day holiday but there shall be three (3) floating holidays determined by mutual agreement between the employee and Director or Manager. Floating ays must be used by the end of each calendar year. Employees will be paid eight (8) hours straight time for each of the holidays. However, those employees governed by the Memorandum of Agreement, must comply with section 13.2 of that Agreement. Temporary employees who work on a holiday will be paid at the employee's regular base pay rate and will not receive holiday pay for hours not worked.