01-25-2012 HUCMRegular Meeting
January 25, 2012
Members present: Vice President Paul Nordin; Secretary Dwight Bordson;
Commissioner Craig Lenz, Attorney Marc Sebora; General Manager Michael Kumm
Members absent: President Robert Hantge
Vice President Nordin called the meeting to order at 3:00 p.m.
Attorney, Marc Sebora, swore in the newly elected commissioners, Leon Johnson and
Monty Morrow.
Vice President Nordin called for the Commission reorganization
A motion was made by Commissioner Lenz, seconded by Commissioner Johnson to
elect Dwight Bordson to the position of president. Motion was unanimously carried.
A motion was made by Secretary Bordson, seconded by Commissioner Morrow to elect
Craig Lenz to the position of vice president. Motion was unanimously carried.
A motion was made by Secretary Bordson, seconded by Commissioner Lenz to appoint
Leon Johnson as secretary. Motion was unanimously carried.
A motion was made by Secretary Bordson, seconded by Commissioner Lenz to appoint
Marc Sebora as legal counsel. Motion was unanimously carried.
A motion was made by Commissioner Lenz, seconded by Secretary Bordson to appoint
Kim Koski as recording secretary.
A motion was made by Commissioner Johnson, seconded by Commissioner Morrow
designating Citizens Bank & Trust, Wells Fargo and Home State Bank as depository for
utility funds.
The minutes of the December 28, 2011 regular meeting were reviewed. The Board
recommended striking Vice President Nordin's name from the `Members Present' list as
he was absent. A motion was made by Commissioner Lenz, seconded by Secretary
Bordson to approve the minutes subject to making the recommended correction. Motion
was unanimously carried.
The December 2011 payables were discussed. A motion was made by Secretary
Bordson, seconded by Commissioner Lenz to ratify the payment of bills in the amount of
$3,394,402.41 (detailed listing in payables book). Motion was unanimously carried.
GM Kumm presented the December 2011 financial statements /budget year -to -date.
After discussion, a motion was made by Commissioner Johnson, seconded by
Commissioner Lenz to approve the financial statements/budget year -to -date. Motion
was unanimously carried.
GM Kumm presented the energy conservation rebate to 3M for $44,040.00.
Commissioner Johnson abstained from voting because of a conflict of interest. After
discussion, a motion was made by Commissioner Lenz, seconded by Commissioner
Morrow to approve the energy conservation rebate to 3M for $44,040.00. Motion was
unanimously carried. (Rebate attached.)
GM Kumm presented the HUC strategic plan mission, values and vision statements for
review. A formal review of the strategic plan is done every five years. The vision
statement is broken up into nine sections which will be reviewed at upcoming
commission meetings. After discussion, GM Kumm requested the Board submit any
comments or changes to formally adopt at the February commission meeting.
GM Kumm presented the Service Beyond City Limits of Hutchinson policy. This is part
of our yearly policy review. The Board recommended a correction be made changing
the word `form' to `from' on page 2, under 3 (B), third paragraph. A motion was made by
Commissioner Lenz, seconded by Secretary Bordson to approve Service Beyond City
Limits of Hutchinson policy with the recommended correction. (Changes attached.)
GM Kumm presented the CIP Rebate Level of Authority policy. This is also a part of our
yearly policy review and no changes are requested at this time.
GM Kumm presented policies and requirements booklet, sections: MN Government
Data Practices Act & Public Records Request; electric service requirements & charges;
and temporary service — electric. This is park of our policy review and no changes are
requested at this time.
GM Kumm presented changes to exempt and non - exempt handbooks, sections: unpaid
extended leave of absence; family death; emergency leave; and military leave. No
changes recommended for sections family death and emergency leave. Changes to
verbiage of sections unpaid leave of absence and military leave were made for
consistency. After discussion, a motion was made by Commissioner Johnson,
seconded by Commissioner Morrow to approve changes to exempt and non - exempt
handbooks, sections: unpaid extended leave of absence and military leave. Motion was
unanimously carried. (Changes attached.)
Steve Lancaster presented the advertisement for bids for plant 1 cooling tower repair.
Steve explained the wood structure inside the cooling tower needs repair and it is a
budgeted item. After discussion, a motion was made by Commissioner Lenz, seconded
by Secretary Bordson to approve the advertisement for bids for plant 1 cooling tower
repair. Motion was unanimously carried. (Advertisement for bids attached.)
Division Reports
Electric — Steve Lancaster
• Working on ad to fill a system controller position.
Gas — John Webster
• Natural gas purchases for July 2012 at $2.87 and for November 2012 through
October 2015 at $4.075.
• Working with United Farmers Cooperative to transport natural gas off HUC
pipeline to fuel their new plant in Brownton.
• Plant 1 design work and specifications complete for new engine fuel line.
• Working with 3M's St. Paul office on natural gas transport contract which
expired January 1, 2012.
Business — Jan Sifferath
• Nothing to report
Finance — Jared Martig
• Auditors at HUC next week.
• Rough estimate of refinancing bonds — approximate savings of $90,000 per
year.
Legal Update
Attorney Sebora reported City of Hutchinson is considering incorporating a
mortgage foreclosure system to track foreclosed houses in an effort to help
prevent damage to houses from burst pipes as a result of utility disconnection for
non - payment in the winter. Also, the property taxes could be assessed for unpaid
bills. At this time, HUC does not assess unpaid electric and gas bills to property
taxes. After discussion, the Board agreed to Attorney Sebora researching the
opportunity for a bill to be introduced at the current legislation session to allow
assessment of unpaid natural gas and electric bills to property taxes.
Unfinished Business
Common Cup — GM Kumm gave an update on options discussed with Bev Bonte
in response to her request at last commission meeting to offset the disconnect
and reconnect fees to customers who seek financial assistance at Common Cup.
GM Kumm will bring options back to the Board at next commission meeting.
New Business
GM Kumm presented a hand -out explaining the generation marketing analysis.
On behalf of the Hutchinson Utilities Commission, the Board presented Vice President
Nordin with a plaque and meter lamp in appreciation for his years of service to the
Commission.
There being no further business, a motion was made by Commissioner Johnson,
seconded by Commissioner Morrow to adjourn the meeting at 5:05 p.m. Motion was
unanimously carried.
ATTEST:
Dwight Bordson, President
Leon Johnson, Secretary
Regular Meeting
January 25, 2012
Members present: Vice President Paul Nordin; Secretary Dwight Bordson;
Commissioner Craig Lenz; Attorney Marc Sebora; General Manager Michael Kumm
Members absent: President Robert Hantge
Vice President Nordin called the meeting to order at 3:00 p.m.
Attorney, Marc Sebora, swore in the newly elected commissioners, Leon Johnson and
Monty Morrow.
Vice President Nordin called for the Commission reorganization.
A motion was made by Commissioner Lenz, seconded by Commissioner Johnson to
elect Dwight Bordson to the position of president. Motion was unanimously carried.
A motion was made by Secretary Bordson, seconded by Commissioner Morrow to elect
Craig Lenz to the position of vice president. Motion was unanimously carried.
A motion was made by Secretary Bordson, seconded by Commissioner Lenz to appoint
Leon Johnson as secretary. Motion was unanimously carried.
A motion was made by Secretary Bordson, seconded by Commissioner Lenz to appoint
Marc Sebora as legal counsel. Motion was unanimously carried.
A motion was made by Commissioner Lenz, seconded by Secretary Bordson to appoint
Kim Koski as recording secretary.
A motion was made by Commissioner Johnson, seconded by Commissioner Morrow
designating Citizens Bank & Trust, Wells Fargo and Home State Bank as depository for
utility funds.
The minutes of the December 28, 2011 regular meeting were reviewed. The Board
recommended striking Vice President Nordin's name from the `Members Present' list as
he was absent. A motion was made by Commissioner Lenz, seconded by Secretary
Bordson to approve the minutes subject to making the recommended correction. Motion
was unanimously carried.
The December 2011 payables were discussed. A motion was made by Secretary
Bordson, seconded by Commissioner Lenz to ratify the payment of bills in the amount of
$3,394,402.41 (detailed listing in payables book). Motion was unanimously carried.
GM Kumm presented the December 2011 financial statements /budget year -to -date.
After discussion, a motion was made by Commissioner Johnson, seconded by
Commissioner Lenz to approve the financial statements /budget year -to -date. Motion
was unanimously carried.
GM Kumm presented the energy conservation rebate to 3M for $44,040.00.
Commissioner Johnson abstained from voting because of a conflict of interest. After
discussion, a motion was made by Commissioner Lenz, seconded by Commissioner
Morrow to approve the energy conservation rebate to 3M for $44,040.00. Motion was
unanimously carried. (Rebate attached.)
GM Kumm presented the HUC strategic plan mission, values and vision statements for
review. A formal review of the strategic plan is done every five years. The vision
statement is broken up into nine sections which will be reviewed at upcoming
commission meetings. After discussion, GM Kumm requested the Board submit any
comments or changes to formally adopt at the February commission meeting.
GM Kumm presented the Service Beyond City Limits of Hutchinson policy. This is part
of our yearly policy review. The Board recommended a correction be made changing
the word `form' to `from' on page 2, under 3 (B), third paragraph. A motion was made by
Commissioner Lenz, seconded by Secretary Bordson to approve Service Beyond City
Limits of Hutchinson policy with the recommended correction. (Changes attached.)
GM Kumm presented the CIP Rebate Level of Authority policy. This is also a part of our
yearly policy review and no changes are requested at this time.
GM Kumm presented policies and requirements booklet, sections: MN Government
Data Practices Act & Public Records Request; electric service requirements & charges;
and temporary service — electric. This is part of our policy review and no changes are
requested at this time.
GM Kumm presented changes to exempt and non - exempt handbooks, sections: unpaid
extended leave of absence; family death; emergency leave; and military leave. No
changes recommended for sections family death and emergency leave. Changes to
verbiage of sections unpaid leave of absence and military leave were made for
consistency. After discussion, a motion was made by Commissioner Johnson,
seconded by Commissioner Morrow to approve changes to exempt and non - exempt
handbooks, sections: unpaid extended leave of absence and military leave. Motion was
unanimously carried. (Changes attached.)
Steve Lancaster presented the advertisement for bids for plant 1 cooling tower repair.
Steve explained the wood structure inside the cooling tower needs repair and it is a
budgeted item. After discussion, a motion was made by Commissioner Lenz, seconded
by Secretary Bordson to approve the advertisement for bids for plant 1 cooling tower
repair. Motion was unanimously carried. (Advertisement for bids attached.)
Division Reports
Electric — Steve Lancaster
• Working on ad to fill a system controller position.
Gas — John Webster
• Natural gas purchases for July 2012 at $2.87 and for November 2012 through
October 2015 at $4.075.
• Working with United Farmers Cooperative to transport natural gas off HUC
pipeline to fuel their new plant in Brownton.
• Plant 1 design work and specifications complete for new engine fuel line.
• Working with 3M's St. Paul office on natural gas transport contract which
expired January 1, 2012.
Business — Jan Sifferath
• Nothing to report
Finance — Jared Martig
• Auditors at HUC next week.
• Rough estimate of refinancing bonds — approximate savings of $90,000 per
year.
Legal Update
Attorney Sebora reported City of Hutchinson is considering incorporating a
mortgage foreclosure system to track foreclosed houses in an effort to help
prevent damage to houses from burst pipes as a result of utility disconnection for
non - payment in the winter. Also, the property taxes could be assessed for unpaid
bills. At this time, HUC does not assess unpaid electric and gas bills to property
taxes. After discussion, the Board agreed to Attorney Sebora researching the
opportunity for a bill to be introduced at the current legislation session to allow
assessment of unpaid natural gas and electric bills to property taxes.
Unfinished Business
Common Cup — GM Kumm gave an update on options discussed with Bev Bonte
in response to her request at last commission meeting to offset the disconnect
and reconnect fees to customers who seek financial assistance at Common Cup.
GM Kumm will bring options back to the Board at next commission meeting.
New Business
GM Kumm presented a hand -out explaining the generation marketing analysis.
On behalf of the Hutchinson Utilities Commission, the Board presented Vice President
Nordin with a plaque and meter lamp in appreciation for his years of service to the
Commission.
There being no further business, a motion was made by Commissioner Johnson,
seconded by Commissioner Morrow to adjourn the meeting at 5:05 p.m. Motion was
unanimously carried.
ATTEST:
Leon Johnson, Secretary
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Dwight rdson, President
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Revisod-Mareh 1, 2414
Revised January 25, 2012
Hutchinson Utilities Commission
Main Extension Rules
Service Beyond City Limits of Hutchinson
1. Definitions
Natural Gas Distribution Main
Natural gas distribution main is defined as that portion of the HUC's natural gas
piping and related facilities which are intended to provide service to more than a
single customer. Such piping is normally located in public streets and their right -of-
way or adjacent to property lines.
2. Individual Requests for Gas Main Extension
A. Application
Prospective customers currently without natural gas service may request such
service by submitting a written application to Hutchinson Utilities Commission
(HUC). HUC shall investigate the possibility of installing gas main to the
customer and shall make an estimate of the costs involved.
B. Allowances
Each customer shall receive a construction allowance based on projected
marginal revenue.
1) Residential Customers - $915.00
2) Firm Commercial Customers
Allowance for main shall be based on customer's estimated annual
revenue using the following formula (based on seven year recovery):
Allowance = $(U x M) x 7
Where:
U = Estimated long term annual usage in Mcf
M = Applicable margin per Mcf
Monthly "Meter Charge" not considered in calculating customer
allowance as this is a fixed cost to HUC.
C. Customer Contributions
A contribution shall be required if the estimated construction cost of main
exceeds the main allowance(s) for the customer(s) requesting the extension.
This payment is due as a single payment prior to the installation of the main.
However, if a residential customer's contribution for main exceeds $300.00,
the customer, with the approval of HUC, may elect to make a single payment
before construction begins or agree to pay the contribution in twelve (12) equal
installments, including a finance charge based on HUC's current weighted cost
of capital. These installments shall be billed with the utility bill and be payable
on the same date as the utility bill. All contributions shall be refundable in
accordance with Section 3. of this schedule.
3. Reapportionment and Refunds of Contributions
A. Reapportionment of Customer Contribution
When additional customers take service from a main extension which had
required a customer contribution, the original contribution and any new
contribution will be reapportioned among all customers on the extension if the
reapportionment does not cause an increase in any existing customer's
contribution. If the reapportionment calculation would cause an increase to
any customer's contribution, the portion of new main facilities under
consideration will be considered a separate and new gas main extension subject
to all the gas extension rules.
B. Refunds of Customers with No Additional Contribution
The HUC shall make refunds to the customer(s) or developer who made the
contribution(s) toward the extension of main for a period of five (5) years from
the installation date.
When the HUC connects new customers to this portion of main extension, the
refund shall be equal to the change in the customer contribution value after
reapportioning the contribution using the allowance in effect at the time the
extension was installed.
When the HUC makes an extension of main to subsequent customer(s) that
does not require a contribution form from the subsequent customer(s), the
refund shall be equal to the change in the customer using the allowance in
effect at the time the original extension was installed and the allowance in
effect for the new facilities less the construction costs of all main.
C. Single Customer Payment of Contribution
If an individual customer agrees in writing before the main extension is
installed to pay the total required contribution, that customer shall be eligible
for all main allowance refunds from all subsequent customers on the extension
during the refund period. Such a written agreement will thereby preclude any
reapportionment of the contribution among subsequent customers.
1) If a further main extension off the original extension is required to serve a
subsequent customer and the main cost is less than the total main
allowance available, the unused allowance shall be refunded to the
customer who made the single payment contribution outlined above.
2) If a further main extension off the original extension is required to serve a
subsequent customer and the main costs exceeds the total main allowance
available, the subsequent customers shall pay the contribution for the new
facilities.
4. Right to Refund
The right to receive a refund of any contribution held hereunder will attach to the
ownership of the premises for which the original extension was made. Any refund
shall be made to the person who owns such premise(s) at the time the refund is paid
unless the contributor has reserved the right to receive such refund in the conveyance
of the premise(s) to a subsequent owner and demonstrates that to the HUC.
In the case of a developer making a contribution to extend gas into a development,
the right to receive a refund shall attach to the owner of the development at the time
the refund becomes due, unless, in the conveyance of the development, the developer
provides the HUC with a written agreement reserving the right to receive such
refunds.
In no case shall the total refund(s) exceed the amount of the contribution.
5. Clearing Rights and Costs
Customer requesting service shall furnish, without expense to the HUC, right -of-
way, easements, permits and additional costs incurred to provide adequate clearing
for the main extension to serve the customer along a route approved by the HUC
after consulting with the customer.
If requested by the customer, the HUC will do the clearing at customer's expense.
The customer shall pay the HUC the estimated cost of clearing to be done by the
HUC. Costs will be adjusted to actual costs upon completion of the job.
6. Title
The title to all distribution main extensions made by the HUC hereunder remains
with the HUC. The HUC may at any time add additional customers to or make new
extensions to an existing extension without the consent of any customer or customers
who contributed to the cost of the existing extension, and without incurring any
liability for refunding contributions other that as provided herein.
7. Construction Standards
All natural gas distribution system extensions constructed hereunder shall conform
to the HUC's standards of construction, and shall meet the requirements of
governmental regulatory bodies having jurisdiction.
8. General Provisions
A. If in the HUC's sole judgment the HUC needs an easement over customer's
property in order to furnish service to customer, customer shall provide HUC
with an easement at no expense to HUC. If in the HUC's sole judgment HUC
needs an easement or easements over property not owned by customer in order
to furnish service to customer, customer shall obtain the easement(s) at no
expense to HUC.
B. No structures shall be placed over the route of the HUC's natural gas facilities.
However, such property may be used for gardens and other purposes which
will not interfere with maintenance and replacement of HUC's natural gas
facilities.
C. Properties subject to an easement granted to HUC shall be graded to a level
which shall not be above or more than 6 inches below finished grade, prior to
the time installation of natural gas facilities is commenced by HUC. The HUC
shall be notified in advance of any changes in grade after the natural gas
facilities have been installed by HUC, and HUC shall be reimbursed for any
and all costs incurred as a result of such change.
D. HUC shall not be liable for damage to trees, shrubs, fences, sidewalks,
driveways or other obstructions incident to the installations, maintenance or
replacement of natural gas facilities, unless such damage is caused by its own
negligence.
EXEMPT
UNPAID EXTENDED LEAVE OF ABSENCE
The General Manager may grant an employee's request for an extended leave of absence without
pay. The unpaid leave of absence shall be a minimum length of one month and a maximum
length of six months. Employees on an extended leave of absence for one month or longer which
is not governed by the FMLA, are required to pay the cost of any health, long -term disability or
life insurance during the leave of the absence. Employees on unpaid leave of absence shall not
earn vacation and sick leave.
No employee shall be granted a leave of absence in order to accept a different position with
another employer. Acceptance of a full -time position with another employer shall be deemed a
resignation of the employee's position with the � T T�esHUC.
EXEMPT
MILITARY LEAVE
The T esHUC shall comply with Minnesota statutes relating to military leave.
NON - EXEMPT
UNPAID EXTENDED LEAVE OF ABSENCE
The General Manager may grant an employee's request for an extended leave of absence without
pay. The unpaid leave of absence shall be a minimum length of one month and a maximum
length of six months. Employees on an extended leave of absence for one month or longer which
is not governed by the FMLA, are required to pay the cost of any health, long -term disability or
life insurance during the leave of the absence. Employees on unpaid leave of absence shall not
earn vacation and sick leave.
No employee shall be granted a leave of absence in order to accept a different position with
another employer. Acceptance of a full -time position with another employer shall be deemed a
resignation of the employee's position with the UtilifiesHUC.
NON - EXEMPT
MILITARY LEAVE
The T
- esHUC shall comply with Minnesota statutes relating to military leave.
Advertisement for Bids
for
"Plant 1- Cooling Tower Repair"
Hutchinson Utilities Commission
Hutchinson, Minnesota
Notice is hereby given that the Hutchinson Utilities Commission of the City of
Hutchinson, Hutchinson, Minnesota, hereinafter referred to as the Owner, will receive
sealed Bids at the Hutchinson Utilities office until 2 p.m. February 23rd 2012, and will
publicly open and read aloud such Bids on the following equipment:
"Plant 1- Cooling Tower Repair"
Proposals shall be properly endorsed and delivered in an envelope marked,
"Plant 1- Cooling Tower Repair" and shall be addressed to: Hutchinson Utilities
Commission, 225 Michigan Street SE, Hutchinson, Minnesota 55350. Attn: Mr. Steve
Lancaster.
Bids shall be supplied in hardcopy format. The name and address of the Bidder
shall be clearly indicated on the outside of the package containing the Bid. Bidder shall
provide one (1) original (clearly marked as such). All proposals shall be submitted on
the Bidder's own letterhead.
The Bid must contain detailed information on work to be completed, length of
time to complete work and warranty /guarantee information.
Each Bid shall be accompanied by a Bid Bond, made payable to the Hutchinson
Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, in the amount of
five percent (5 %) of the Bid, as a guarantee that the Bidder will enter into the proposed
Contract after the Bid has been accepted.
The successful Bidder shall furnish Performance and Payment Bonds within (15)
days after the award of the contract in an amount equal to one - hundred percent (100 %)
of the Contract price along with a certificate of insurance meeting Hutchinson Utilities
Commission requirements.
No Bidder may withdraw his Bid or Proposal for a Period of thirty (30) days after
date of opening of Bids.
At the aforementioned time and place, or at such later time and place as the
Owner then may fix, the Owner will act upon Proposals received and with its sole
discretion may award Contract for the furnishing of said equipment.
It is recommended that each Bidder conduct a pre -bid site visit. Hutchinson
Utilities point of contact for this project is Mr. Randy Blake. Mr. Blake can be reached at
320 - 234 -0551.
The Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson,
Minnesota reserves the right to reject any and all Bids, or Bid irregularities.
By ;Zr-&�,
Robert- Hmtge, - PresidL -nt
Paul Nordin, Vice President
Date �� -��0l
ATTESTS
By
Dwig t ords , Secretary
Date `.-� --