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12-17-2014 HUCMMINUTES Regular Meeting — Hutchinson Utilities Commission Wednesday, December 17, 2014 Call to order — 3:00 p.m. President Anthony Hanson called the meeting to order. Members present: President Anthony Hanson; Vice President Monty Morrow; Commissioner Donna Luhring; Commissioner Dwight Bordson; Attorney Marc Sebora; and General Manager Jeremy Carter. Member absent: Secretary Mark Girard. 1. Approve Minutes of November 26, 2014 Regular Commission Meeting The minutes of the November 26, 2014 regular meeting were reviewed. A motion was made by Vice President Morrow, seconded by Commissioner Luhring to approve the November 26, 2014 regular meeting minutes. Motion was unanimously carried. 2. Ratify Payment of Bills for November 2014 The November 2014 payables were discussed. After discussion, a motion was made by Commissioner Luhring, seconded by Commissioner Bordson to ratify the payment of bills in the amount of $2,527,292.37 (detailed listing in payables book). Motion was unanimously carried. 3. Approve Financial Statements/Budget Year to Date President Hanson explained due to the meeting being moved up from the regularly scheduled date, the financial statements are not available and will be sent out when they are complete. 4. Review Policies GM Carter presented the policies, sections: • Inserts with Utility Bills • Inaccessible Utility Equipment/Meters No changes were recommended. 5. Approve Changes to Policies GM Carter presented changes to the policies, section: • Identity Theft — "Red Flag Program" Changes to Identity Theft — "Red Flag Program" were made for clarification. A motion was made by Vice President Morrow, seconded by Commissioner Luhring to approve changes to Identity Theft — "Red Flag Program." Motion was unanimously carried. (Changes attached.) 6. Review Exempt and Non -Exempt Employee Handbooks GM Carter presented exempt and non-exempt handbooks, sections: • Administration of Personnel Policies • Savings Clause • Hiring • Probationary Period Upon Hiring • Temporary Employees After discussion, all sections were tabled as the Board recommended language be added to the section 'Hiring' to reflect the Human Resource Director's and/or the City Attorney's involvement in the hiring process. 7. Approve Changes to Exempt and Non -Exempt Employee Handbooks GM Carter presented changes to the exempt and non-exempt employee handbooks, section: • What is Hutchinson Utilities Commission? GM Carter explained in November's regular meeting, the Board requested additional language be added regarding the natural gas pipeline and transmission line. A motion was made by Commissioner Bordson, seconded by Vice President Morrow to approve changes to the exempt and non-exempt handbooks. Motion was unanimously carried. (Changes attached.) 8. Approve Changes to Policy on Payments of Hutchinson Utilities Commission Payables GM Carter presented changes to the Policy on Payments of Hutchinson Utilities Commission Payables. The date was changed from 2014 to 2015 in the second to last paragraph. This is part of HUC's annual review of policies. A motion was made by Commissioner Luhring, seconded by Commissioner Bordson to approve the changes to the Policy on Payments of Hutchinson Utilities Commission Payables. Motion was unanimously carried. (Policy attached.) 9. Approve 2015 Budget GM Carter presented the 2015 budget. Updated changes were distributed and discussed. HUC is changing health insurance plans to Blue Cross Blue Shield with a higher deductible of $3,000/$6,000 versus the current $2,500/$5,000 deductible. This results in a premium increase of 5.4% versus the proposed 12.5% increase if HUC had stayed with Medica. For 2015, HUC will be embedding a Health Reimbursement Account (HRA) alongside the Health Savings Account (HSA) program to offset additional exposure for the employees' out-of-pocket costs. HUC will also be securing MetLife for dental and life insurance at a savings of 18% over 2014. The Board requested a revised budget semi-annually and after the third quarter. E After discussion, a motion was made by Commissioner Luhring, seconded by Commissioner Bordson to approve the 2015 budget. Motion was unanimously carried. 10. Approve Summary of Closed Meeting Proceedings for the General Manager Performance Appraisal held on November 26, 2014 President Hanson presented the Summary of Closed Meeting Proceedings for the General Manager Performance Appraisal held on November 26, 2014. A motion was made by Commissioner Bordson, seconded by Commissioner Luhring to approve the Summary of Closed Meeting Proceedings for the General Manager Performance Appraisal held on November 26, 2014. Motion was unanimously carried. (Summary attached.) President Hanson explained per the performance appraisal and employment agreement, GM Carter shall receive at least $3,000 prior to December 31, 2014, as his performance standard rating was at least "meets job requirements." A motion was made by Commissioner Bordson, seconded by Commissioner Luhring to approve the $3,000 increase in GM Carter's annual salary prior to December 31, 2014. Motion unanimously carried. 11. Consideration of Approval of Non -Waiver of Tort Liability Limits for General Liability Coverage GM Carter explained the League of Minnesota Cities requested to have on record HUC's governing board has either waived or not waived the liability limits. Attorney Sebora commented it is important that HUC not waive the liability limits as it increases HUC's exposure. A motion was made by Commissioner Luhring, seconded by Vice President Morrow to approve the Non -Waiver of Tort Liability Limits for General Liability Coverage. Motion unanimously carried. (Non -Waiver attached.) 12. Approve 3M Transportation Agreement. John Webster presented the 3M Transportation Agreement explaining the rates are the same as last year. A motion was made by Commissioner Bordson, seconded by Vice President Morrow to approve the 3M Transportation Agreement. Motion unanimously carried. (Agreement attached.) 13. Communication from the interim City Administrator Interim City Administrator Sebora reported the City approved the contract with the new City Administrator, Matthew Jaunich. 14. Division Reports GM Carter Nothing to report Finance — Jared Martig 3 • HUC received approximately $22,000 as a property and liability insurance dividend from League of Minnesota Cities. Electric — Dave Hunstad • Completed field inspections to include infrared and visual inspections. • Changed out some transformers. • Completing end -of -year items. Electric — Dan Lang Nothing to report Natural Gas — John Webster • Completing end -of -year items. • Starting engineering and writing specifications on new gas line for the south side of town. • Evaluating all generation facilities' gas measurements. Rebuilding Unit 8 meter facilities. Unit 5 is good. The rest of the metering at the downtown plant will be replaced next year due to poor gas measurements. 15. Legal Update Nothing to report Unfinished Business • Discuss Separate Business Unit for Wholesale Business o Anticipate presenting information at the January meeting. • Discuss Compensation Study o Nothing to report New Business None There being no further business, a motion was made by Commissioner Luhring, seconded by Vice President Morrow to adjourn the meeting at 4:10 p.m. Motion was unanimously carried. ATTEST: Anthony H son, Pre dent 4 �zz/� Z. a rK Girard, Secretary 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 Guste,,-,oFinancial Manager. AmeRdre CjanFary 2, 2 Amended December 17. 2014 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.",. This policy shall be reviewed on an annual basis. WELCOME TO HUTCHINSON UTILITIES COMMISSION WHAT IS HUTCHINSON UTILITIES COMMISSION? The Municipal Electric Light Plant was established in 1935 as a result of a special election authorizing the establishment of a new generating plant and distribution system through a bond issue of $250,000 to pay for the construction. The vote was 1,187 for and 128 against. Contracts were awarded for the construction of a new power plant building at the intersection of State Highways 7 and 15. The contract included three (3) 625 hp 430 kw diesel generating units, switchboard, a complete distribution system and other auxiliary equipment. On November 28 1936, construction was completed and by January of 1937, over 600 customers were connected. By the end of March, the system was serving 1,171. The City Charter was amended in 1935 to create a Utilities Commission to manage and operate the system. In 1960, the City constructed a natural gas distribution system, buying natural gas from Northern Natural Gas Company, and selling it to the citizens of Hutchinson and the surrounding rural area. Natural gas is also used in firing the dual generating units of the light plant. In 2003, in order to control natural gas transportation costs, Hutchinson Utilities constructed a high pressure natural gas pipeline to serve this community. This transmission line is interconnected with Northern Border Pipeline near Trimont Minnesota which allows Hutchinson Utilities to transport natural gas to its customers in addition to other municipal utilities and industrial end users located along the pipeline corridor. Since 1936, the Hutchinson Utilities Commission, consisting of three (3) qualified voters of the City of Hutchinson, has operated the Municipal Electric Plant and the Natural Gas Distribution System. It was established by Section 17 of the City Charter that the Commissioners be appointed by the City Council, one (1) every two years, for a six year term. No Commissioner can serve more than two (2) successive terms. The Commission elects a President, Vice President, and Secretary. In November of 1987, the City Charter was amended to expand the Utilities Commission to a five (5) -member board. Each Commissioner's term will be five (5) years and no Commissioner can serve more than two (2) successive terms. The City Charter gives the Commission full, absolute and exclusive control of and power over the City Light and Power Plant and the Natural Gas Distribution System. The Commission hires a General Manager to manage the day-to-day operation of the Utilities. The Hutchinson Utilities Commission has, for many years, made substantial cash contributions to the General Fund of the City of Hutchinson from surplus earnings of both the electric and gas divisions of the Utilities. Hutchinson Utilities Commission has provided and will continue to provide to its customers, electricity and natural gas at the lowest possible cost. Hutchinson Utilities Commission Summary of Closed Meeting Proceedings General Manager Performance Appraisal Wednesday, November 26, 2014 On November 26, 2014, the Hutchinson Utilities Commission conducted a closed meeting for the six-month performance appraisal for General Manager, Jeremy Carter. Individuals present included General Manager Jeremy Carter, Commission Members Donna Luhring, Mark Girard, Anthony Hanson, Monty Morrow, and Dwight Bordson, City Attorney Marc Sebora, and City of Hutchinson Human Resources Director Brenda Ewing. Mr. Carter exercised his right to close the proceedings to the public as permitted under Minnesota Statute 13D.05, Subdivision 3(a). Motion by Luhring, seconded by Girard to go into closed session to conduct the General Manager's performance review. The motion passed unanimously. The Commission then proceeded into a closed session at 4:12 p.m. The Commission reviewed with Mr. Carter his performance for the six-month period of employment which commenced on May 27, 2014. The review is required per the terms of the employment contract in place between the Hutchinson Utilities Commission and General Manager Carter. President Hanson noted that the Commission is to provide Mr. Carter with direction and feedback regarding his performance to date and to provide guidance to advance the organization in the direction the Commission deems appropriate. Mr. Carter provided the Commission with an overview of his initial 180 days of employment as General Manager. Mr. Carter's performance was evaluated in the following areas: Organizational Management, Fiscal/Business Management, Program Development, Relationship & Communication with the Commission, Long -Range Planning, and Relationships with Public & Outside Organizations. The consensus of the Commission is that Mr. Carter's cumulative performance for the review period was found to be 3.64 on the rating scale of 0 — 5 and, per the Hutchinson Utilities Commission, is meeting and exceeding job requirements on the ratings scale. The employment contract between Hutchinson Utilities and Mr. Carter indicates that Hutchinson Utilities, as the employer, will consider an increase in compensation for the General Manager dependent upon the result of an annual performance evaluation and shall increase the employee's annual salary by at least $3,000.00 prior to December 31, 2014, if the employee receives a performance standard rating of at least "meets job requirements". The Commission will consider the increase at their regularly scheduled meeting on December 17, 2014. The Commission then discussed goals and objectives for Mr. Carter including, 1) a written succession plan; 2) strategic planning process; 3) staff team management development; and, 4) 2015 budget targets and parameters. Commission Luhring stepped out of the meeting at 5:18 p.m. and returned at 5:21 p.m. Motion by Luhring, seconded by Girard, to open the closed proceedings. The motion passed unanimously. The Commission moved back to the open session at 5:29 p.m. Motion by Bordson, seconded by Morrow, to adjourn the meeting at 5:30 p.m. The motion passed unanimously. �o LEAGUE of MINNESOTA CITIES CONNECTING & INNOVATING SINCE 1913 LIABILITY COVERAGE — WAIVER FORM LMCIT members purchasing coverage must complete and return this form to LMCIT before the effective date of the coverage. Please return the completed form to your underwriter or email to pstech@lmc.org This decision must be made by the member's governing body every year. You may also wish to discuss these issues with your attorney. Cities and other League of Minnesota Cities Insurance Trust members that obtain liability coverage from LMCIT must decide whether to waive the statutory tort liability limits to the extent of the coverage purchased. The decision has the following effects.- If ffects: If the member does not waive the statutory tort limits, an individual claimant would be able to recover no more than $500,000 on any claim to which the statutory tort limits apply. The total all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would be limited to $1,500,000. These statutory tort limits would apply regardless of whether the city purchases the optional excess liability coverage. If the member waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could potentially recover up to $1,500,000 for a single occurrence. The total all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to $1,500,000, regardless of the number of claimants. % If the member waives the statutory tort limits and purchases excess liability coverage, a single claimant could potentially recover an amount up to the limit of the coverage purchased. The total all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage purchased, regardless of the number of claimants. Claims to which the statutory municipal tort limits do not apply are not affected by this decision. iy#5 Coon on liability coverage limits of$ iDUi 00G from the League of Minnesota Cities Insurance Trust (LMCIT). Check one: The member DOES NOT WAIVE the monetary limits on municipal tort liability established by Minnesota Statutes Section 466.04. ❑ The member WAIVES the monetary limits on municipal tort liability established by Minnesota Statutes Section 466.04, to the extent of the limits of the liability coverage obtained from LMCIT. Date of city c cil/governing body m eting De c epAer Q 201y Signature ._VAPosition 145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAX: (651) 281-1299 ST. PAUL, MN 55103-2044 TOLL FREE: (800) 925-1122 WEB: WWWLMC.ORG 0 %rGE of I N N ESOTA CITIES CONNECTING & INNOVATING SINCE 1913 RISK MANAGEMENT INFORMATION LMCIT LIABILITY COVERAGE OPTIONS Liability Limits, Coverage Limits, and Waivers LMCIT gives cities several options for structuring their liability coverage. The city can choose either to waive or not to waive the monetary limits the statutes provide; and the city can select from among several liability coverage limits. This memo discusses these options and identifies some issues to consider in deciding which of the options best meets the city's needs. Statutory Limits on Municipal Tort Liability The statutes limit a city's tort liability to a maximum of $500,000 per claimant and $1,500,000 per occurrence. These limits apply whether the claim is against the city, against the individual officer or employee, or against both. Coverage Limits for LMCIT's Basic Primary Liability Coverage LMCIT's liability coverage provides a limit of $1,500,000 per occurrence, matching the per - occurrence part of the statutory municipal tort liability limit. Beside the overall coverage limit of $1,500,000 per occurrence, there are also annual aggregate limits (that is, limits on the total amount of coverage for the year regardless of the number of claims), for certain specific risks. Aggregate limits apply to the following: Products $2,000,000 annually Failure to supply utilities $2,000,000 annually Data security breaches $2,000,000 annually EMF $2,000,000 annually Limitedpollution* $2,000,000 annually Mold $2,000,000 annually Land use liti ation** $1,000,000 annually Employers liability (work corn) $1,500,000 annually * Includes sudden and accidental releases of pollutants; herbicide and pesticide application; sewer ruptures, overflows and backups; and lead and asbestos claims. Dredging or excavation claims are subject to a $250,000 sublimit. These limits apply to both damages and defense costs. ** Coverage is provided on a sliding scale percentage basis, which is based on participation in LMCIT's online land use training. Coverage applies to both damages and litigation costs. More Information For more information about land use litigation coverage, please see the memo LMCIT Coverage for Litigation Relating to Land Use. LEAGUE OF MINNESOTA CITIES 145UNIVERSIIYAVE. WEST PHONE: (651) 281-1200 FAx: (651) 281-1298 INSURANCE TRUST ST. PAUL. MN 55103-2044 TOLL FREE: (8001) 925-1122 WED: wWW.LMC.QRG If the Statute Limits our Liability, Why Purchase Higher Coverage Limits? There are several different reasons why cities should strongly consider carrying higher limits of liability coverage. The Statutory Tort Limits Either Do Not or May Not Apply to Several Types of Claims Some examples include: • Claims under federal civil rights laws. These include Section 1983, the Americans with Disabilities Act, etc. • Claims for tort liability that the city has assumed by contract. This occurs when a city agrees in a contract to defend and indemnify a private party. • Claims for actions in another state. This might occur in border cities that have mutual aid agreements with adjoining states, or when a city official attends a national conference or goes to Washington to lobby, etc. • Claims based on liquor sales. This mostly affects cities with municipal liquor stores, but it could also arise in connection with beer sales at a fire relief association fund-raiser, for example. • Claims based on a "taking" theory. Suits challenging land use regulations frequently include an "inverse condemnation" claim, alleging that the regulation amounts to a "taking" of the property. LMCIT's Primary Liability Coverage has Annual Limits on Coverage for a few Specific Risks The table on page one lists the liability risks to which aggregate coverage limits apply. If the city has a loss or claim in one of these areas, there might not be enough limits remaining to cover the city's full exposure if there is a second loss of the same sort during the year. Excess liability coverage gives the city additional protection against this risk as well. However, there are a couple important restrictions on how the excess coverage applies to risks that are subject to aggregate limits: The excess coverage does not apply to three risks: failure to supply utilities; mold; and "limited pollution " claims if either the pollutant release or the damage is below ground or in a body of water; and The excess coverage does not automatically apply to liquor liability unless the city specifically requests it. The City may be Required by Contract to Carry Higher Coverage Limits Occasionally, a contract might include a requirement the city carry more than $1,500,000 of coverage limits. Carrying excess coverage is a way to meet these requirements. (There's also another option 2 for cities in this situation. LMCIT can issue an endorsement to increase the city's coverage limit only for claims relating to that particular contract. There's a small charge for these "laser" endorsements.) There may be more than One Political Subdivision Covered Under the City's Coverage An HRA, EDA, or port authority is itself a separate political subdivision. If the city EDA, for example, is named as a covered party on the city's coverage and a claim were made that involved both the city and the EDA, theoretically the claimant might be able to recover up to $1,500,000 from both the city and the EDA, since there are two political subdivisions involved. Excess coverage is one way to provide enough coverage limits to address this situation. Another solution is for the HRA, EDA, or port authority to carry separate liability coverage in its own name. This issue of multiple covered parties can also arise is if the city has agreed by contract to name another entity as a covered party, or to defend and indemnify another entity. Cities Sometimes Carry Higher Coverage Limits Because of a Concern the Courts Might Overturn the Statutory Liability Limits However, those limits have now been tested and upheld several times in Minnesota. While it's always possible that a future court might decide to throw out the statutory limits, this is now less of a concern. Available Excess Liability Coverage Limits Excess coverage is available in $1 million increments, up to a maximum of $5 million. Does the Optional Excess Coverage Apply to All Types of Claims? No. The excess liability coverage does not apply to the following types of claims: certain limited pollution claims; mold claims; claims for failure to supply utilities; auto no-fault claims; uninsured / underinsured motorist claims; workers' compensation, disability, or unemployment claims; or claims under the medical payments coverage. Who Needs Excess Liability Coverage? If anything, excess liability coverage is even more important to a small city rather than to a large city. If a city ends up with more liability than it has coverage, the city will have to either draw on existing funds or go to its taxpayers to pay that judgment. A large city faced with, say, a million dollars of liability over and above what its LMCIT coverage pays might be able to spread that $1 million cost over several thousand taxpayers. The small city by contrast might be dividing that same $1 million cost among only a couple hundred taxpayers. $1 million divided among 5,000 taxpayers is $200 apiece — annoying but probably at least manageable for most taxpayers. $1 million divided among 200 taxpayers is $5,000 apiece — enough to be a real problem for many. 3 What's the Effect of Waiving the Per Claimant Statutory Liability Limit? If the city chooses the "waiver" option, the city and LMCIT no longer can use the statutory limit of $500,000 per claimant as a defense. Because the waiver increases the exposure, the premium is roughly 3% higher for coverage under the waiver option. If the city waives the statutory limit, an individual claimant could therefore recover up to $1,500,000 in damages on a claim. Of course, the individual would still have to prove to the court or jury that s/he really does have that amount of damages. Also, the statutory limit of $1,500,000 per occurrence would still apply; that would limit the individual's recovery to a lesser amount if there were multiple claimants. Why Would the City Choose to Pay More to Get Waiver -Option Coverage? The statutory liability limit only comes into play in a case where • The city is in fact liable. • The injured party's actual proven damages are greater than the statutory limit. Very literally, applying the statutory liability limit means an injured party won't be fully compensated for his/her Highlight The waiver option coverage does not give the city better protection. The benefit is to the injured party. actual, proven damages that were caused by city negligence. Some cities as a matter of public policy �r may want to have more assets available to compensate their citizens for injuries caused by the city's negligence. Waiving the statutory liability limits is a way to do that. Other cities may feel that the appropriate policy is to minimize the expenditure of the taxpayers' funds by taking full advantage of every protection the legislature has decided to provide. There's no right or wrong answer on this point. It's a discretionary question of city policy that each city council needs to decide for itself. For claims the statutory tort liability limits don't apply to, it doesn't affect how the city's coverage or risk on those claims. Waiving the statutory tort limits has no effect on claims the statutory limits don't apply to. Effects of Waiving the Statutory Limits if there is Excess Coverage If the city has $1 million of excess coverage and chooses to waive the statutory tort limits, the claimants (whether it's one claimant or several) could then potentially recover up to $2.5 million in damages in a single occurrence. If the city carries higher excess coverage limits, the potential maximum recovery per occurrence is correspondingly higher. Carrying excess coverage under the waiver option is a way to address an issue that some cities find troubling: the case where many people are injured in a single occurrence caused by city negligence. Suppose, for example, that a city vehicle negligently runs into a school bus full of kids, causing multiple serious injuries. $1,500,000 divided 50 ways may not go far toward compensating for those 4 injuries. Excess coverage under the waiver option makes more funds available to compensate the victims in that kind of situation. The cost of the excess liability coverage is about 25% greater if the city waives the statutory tort limits. The cost difference is proportionally greater than the cost difference at the primary level because for a city that carries excess coverage, waiving the statutory tort limits increases both the per - claimant exposure and the per -occurrence exposure. Waiving Statutory Tort Liability Limits: Increase in Risk? There is no increase in risk for the city to end up with liability if LMCIT doesn't cover it. The waiver form specifically says the city is waiving the statutory tort liability limits only to the extent of the city's coverage. Of course, that's not to say there is no risk the city's liability could exceed its coverage limits. We listed earlier a number of ways that could happen to any city. But the waiver doesn't increase that risk. Can we Waive the Statutory Tort Limits for the Primary Coverage but not for the Excess Coverage? No. if the city decides to waive the statutory tort limits, that waiver applies to the full extent of the coverage limits the city has. The city cannot partially waive the statutory limits. Is there a Simple way to Summarize the Options? It's not necessarily simple, but the table on the following page is a shorthand summary of what the effect would be of the various coverage structure options in different circumstances. Pete Tritz 2/12 Your League Resource Feel free to call the Underwriting Department at 651-281-1200 or 800-925-1122 with any questions. ojEA® of INNESO TA CITIES CONNECTING & INNOVATING SINCE 1913 LMCIT Liability Coverage Options LEAGUE OF MINNESOTA CITIES 145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAx (651) 281-1298 INSURANCE TRUST ST, PAUL. MN $5103-2044 TOLL FREE: (8OD) 925-1122 WEB: WWW.LMCORG On a liability claim to which On a liability claim to which the statutory limits apply the statutory limits do not apply Coverage structure This is the maximum This is the maximum total This is the maximum amount of damages which LMCIT would If the City: amount a single claimant could recover on an amount that all claimants could recover on a single occurrence. pay on the city's behalf for a single occurrence, regardless of the number of claimants. occurrence. Does not have excess coverage & Does not waive the statutory limits $500,000 $1,500,000 $1,500,000 Does not have excess coverage & Waives the statutory limits $1,500,000 $1,500,000 $1,500,000 Has $1,000,000 of excess coverage & Does not waive the statutory limits $500,000 $1,500,000 $2,500,000 Has $1,000,000 of excess coverage & Waives the statutory limits $2,500,000 $2,500,000 $2,500,000 LEAGUE OF MINNESOTA CITIES 145 UNIVERSITY AVE. WEST PHONE: (651) 281-1200 FAx (651) 281-1298 INSURANCE TRUST ST, PAUL. MN $5103-2044 TOLL FREE: (8OD) 925-1122 WEB: WWW.LMCORG ���GNl�jsoy AGREEMENT �tutTiES Hutchinson THIS AGREEMENT Is MADE BY AND BETWEEN HUTCHINSON Utitities Commission UTILITIES COMMISSION, HEREINAFTER "HUC" AND MINNESOTA MINING AND MANUFACTURING CO., HEREINAFTER "3M", ON THE 225 Michigan Street FOLLOWING TERMS AND CONDITIONS. Hutchinson Minnesota WHEREAS, 3M DESIRES TO PURCHASE, AND HUC SHALL 55350 PROVIDE, FIRM GAS FOR USE AT 3M's HUTCHINSON NORTH AND SOUTH PLANTS; AND, WHEREAS, 3M DOES ACKNOWLEDGE THAT HUC WILL, IN RELIANCE UPON THIS AGREEMENT, ENTER INTO AN AGREEMENT TO PROVIDE FIRM GAS AND TRANSPORTATION. WHEREAS, 3M SHALL HAVE A CHOICE OF PRICING MECHANISMS INCLUDING BUT NOT LIMITED TO; MONTHLY INDEX, DAILY INDEX, FIXED PRICE AND VARIOUS STRUCTURED PRODUCTS, FOR SUPPLY PURCHASES FROM HUTCHINSON. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES MAKE THE FOLLOWING AGREEMENT: Anthcny Hanson President Monty Mcrrow HUC SHALL PROVIDE, AND 3M SHALL ACCEPT, FIRM GAS Vice President COMMENCING JANUARY 1, 2015, AT 9:00 A.M. AND TERMINATING Mark Girard Secretary ON JANUARY 1, 2016, AT 9:00 A.M. Donna Luhring Commissioner Dwight Bordson Commissioner Jeremy Cartel General {Manager Tet 320-5874745 PAGE 1 OF 4 Fax 320-587-4721 1 . 3M SHALL PAY HUC BY THE FOLLOWING SCHEDULE DURING THE TERM OF THIS AGREEMENT: FLOW THROUGH ALL NATURAL GAS METERS COMMODITY INDEX TRANSPORTATION $0.36/DTH MONTHLY PEAK DAY DEMAND $9.00/MCF 2. HUTCHINSON AGREES TO PROVIDE DAILY SWING SUPPLY TO 3M AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE: DAY BY PLATT'S "GAS DAILY" IN ITS "DAILY PRICE: SURVEY ($/DTH)" FOR "NORTHERN, VENTURA" "MIDPOINT" ("DAILY INDEX") PLUS/MINUS $0.01. SWING SUPPLY IS DEFINED AS SUPPLY INCREASES OR DECREASES, FROM CONTRACTED LEVELS, NOMINATED AT LEAST 24 HOURS PRIOR TO THE START OF THE GAS DAY. 3. HUTCHINSON SHALL PROVIDE 3M WITH REAL-TIME BALANCING, BASED ON THE FOLLOWING: BEST EFFORTS REALTIME SWING NOMINATED LESS THAN 24 }TOURS PRIOR TO THE END OF THE GAS DAY ON A BEST EFFORTS BASIS, PRICED AT THE APPLICABLE PRICE, AS PUBLISHED FOR THE DAY BY PLATT'S "GAS DAILY" IN ITS "DAILY PRICE SURVEY ($/DTH)" FOR "NORTHERN, VENTURA" "MIDPOINT" ("DAILY INDEX"), PLUS/MENUS $0.15. 4. 3M SHALL PROVIDE TO HUQ, BY THE END OF THE 15"H DAY OF THE MONTH PRIOR TO GAS FLOW THE BASE LOAD LEVEL OF NATURAL GAS REQUIRED FOR THE FOLLOWING MONTH IN THE EVENT HUC HAS NOT RECEIVED THE BASE LOAD NOMINATION FROM 3M 13Y THE END OF THE 15TH DAY OF THE MONTH PRIOR TO THE GAS FLOW PAGE 2OF4 HUC SHALL NOMINATE THE CURRENT MONTH'S BASE, LOAD LEVEL FOR THE FOLLOWING MONTH 5. DURING THE TERM OF THIS AGREEMENT, HUC SHALL NOT BE LIABLE FOR STOPPAGE OF FLOW ON THE PIPELINE, NORTHERN BORDER PIPELINE COMPANY EQUIPMENT FAILURE, OR ANY OTHER FORCE MAJEURE WHICH AFFECTS THE FLOW OF GAS TO THE HUC BORDER STATIONS, OR ANY ACT OF GOD WHICH INTERRUPTS FLOW OF GAS ON THE PIPELINE, 6. PAYMENT IS DUE FROM 3M ON OR BEFORE THE TENTH DAY FOLLOWING THE DATE THE BILL IS ISSUED BY HUC. PAGE 3OF4 THIS AGREEMENT SETS FORTH ALLTERMS AGREED UPON BETWEEN THE PARTIES, AND NO PRIOR ORAL OR WRITTEN AGREEMENTS SHALL BE BINDING. THIS AGREEMENT SHALL NOT BE ALTERED, AMENDED OR MODIFIED EXCEPT AS IN WRITING AND EXECUTED BY BOTH PARTIES, HUTCHINSON UTILITIES COMMISSION BY:� NAME: TITLE: ?VAS"p-tV, i DATE: Il- 11. 1a MINNESOTA MINING 8c MANUFACTURING BY NAME: r � S TITLE:,. DATE: PAGE 4OF4