Board Meeting - April 3, 2014

MINUTES OF THE MEETING OF THE BOARD OF PUBLIC WORKS

A regular meeting of the Board of Public Works was held at the Hastings Utilities Board Room on Thursday, April 3, 2014, at 9:00 a.m.  This meeting was preceded by notice duly published in the Hastings Tribune on Tuesday, April 1, 2014, and by notices duly posted in the lobby of Hastings Utilities, 1228 North Denver Avenue, and the City Hall, 220 N. Hastings Avenue, and was therefore open to the public.

Present: Hunt, Krieger, Shoemaker, Dewalt, Kully

Also Present:  Schultes, Meyer, Sanders, Hartman, Ptak, Cox, Leonhardt, Odom, Goebel, Crecelius, Laura Bernero (Hastings Tribune), and Mike Sullivan

Chairman Shoemaker stated that the Board of Public Works is subject to the Open Meetings Laws and acknowledged that the Open Meetings Law poster has been posted in the room.

The Pledge of Allegiance was recited.

There were no public comments.

Mike Sullivan gave an update on two Settlement Agreements with certain insurers of the City of Hastings and Hastings Utilities seeking payment under insurance policies in effect at times relevant to the dealings with EPA.

Moved by Hunt, seconded by Kully, to authorize the Board Chairman to execute two Settlement Agreements with Travelers and the Excess Insurers.  Roll Call:  Ayes; Hunt, Kully, Dewalt, Shoemaker, Krieger.  Nays; None.  Motion carried.

Al Meyer informed the Board that the WEC-1 outage is underway and is scheduled to be complete and back on line on April 15, 2014.

Hunt suggested that the Board look into getting Mr. Cutsor of MEAN to present his presentation on the SWPP and the Integrated Market.  Mr. Cutsor gave a presentation at the PPGA Board Meeting and Mr. Hunt felt it could be beneficial to our Board.  Don Cox informed the Board that our staff could give a similar presentation if desired.

Moved by Dewalt, seconded by Krieger, that the following items on the Consent Agenda be approved:

Roll Call:  Ayes; Dewalt, Krieger, Shoemaker, Hunt, Kully.  Nays; None.  Motion carried.

Don Cox gave a short presentation on the gas price spike on March 1st and 2nd.  He reported that it again spiked to high levels for a couple of days and will result in a significant increase in the Purchase Gas Adjustment for April 2014.  Staff recommends the use of the rate stabilization fund to levelize the purchase gas adjustment for April 2014.  The natural gas rate stabilization fund available equals $8,655,869.  The fund will be reduced by approximately $250,000 to $300,000 as a result of Board action for March 2014 billing rate relief.  The implementation of this recommended action will further reduce the fund by an estimated $140,000 to $180,000 and save HU customers that same amount on April 2014 billings.

Moved by Hunt, seconded by Kully, that due to volatile natural gas swing pricing during the month of March 2014, natural gas rate stabilization funds shall be utilized to reduce the impact of higher natural gas costs to HU customers.  For purposes of the Purchased Gas Adjustment calculation (PGA) for billings issued during the month of April 2014, the PGA base cost of gas shall be increased from $3.111 to $4.361 per MCF.  This will result in savings to HU ratepayers of $1.25 per MCF ($0.125 per CCF).  A customer using 100 CCF for the April billing period will save $12.50 in comparison to normal rates.  Anticipated cost impact to the rate stabilization fund is within an estimated range of $140,000 to $180,000.  Roll Call:  Ayes; Hunt, Kully, Shoemaker, Dewalt, Krieger.  Nays; None.  Motion carried.

A presentation prepared by Don Cox was distributed for the discussion Gas Storage and Purchasing Policies.

Moved by Dewalt, seconded by Hunt, to table the Discussion on Gas Storage and Purchasing Policies.  Roll Call:  Ayes; Dewalt, Hunt, Shoemaker, Krieger, Kully.  Nays; None.  Motion carried.

An amendment to the Project Operating Agent Agreement with PPGA to formalize the process in resolution of disputes between PPGA and Hastings Utilities was discussed.

Moved by Hunt, seconded by Krieger, to approve the Amendment to Project Operating Agent Agreement with PPGA for New Section 9 Dispute Resolution.  Roll Call:  Ayes; Hunt, Krieger, Shoemaker, Dewalt, Kully.  Nays; None.  Motion carried.

The December 2013 Monthly Report was presented and discussed.  Marv Schultes gave a presentation on the end of the year report.

Moved by Krieger, seconded by Dewalt, to approve checks issued March 21, 2014, with the exception of check 22424 to Kully Pipe & Steel Corp., check 22481 to Sullivan Shoemaker PC LLO, and check 22351 to Industrial Park East Water System.  Roll Call:  Ayes; Krieger, Dewalt, Kully, Hunt, Shoemaker.  Nays; None.  Motion carried.

Moved by Krieger, seconded by Hunt, to approve check 22424 to Kully Pipe & Steel Corp. in the amount of $5,396.40.  Roll Call:  Ayes; Krieger, Hunt, Dewalt, Shoemaker.  Nays; None.  Kully abstained.  Motion carried.

Moved by Hunt, seconded by Dewalt, to approve check 22481 to Sullivan Shoemaker PC LLO in the amount of $850.50 and check 22351 to Industrial Park East Water System in the amount of $6,750.00.  Roll Call:  Ayes; Hunt, Dewalt, Krieger, Kully.  Nays; None.  Shoemaker abstained.  Motion carried.

Moved by Krieger, seconded by Kully, to approve the following claims:

- General Operating Fund against the Electric Fund – $2,662,944.35

- General Operating Fund against the Combined Fund - $3,514,143.77

Roll Call:  Ayes; Krieger, Kully, Hunt, Shoemaker, Dewalt.  Nays; None.  Motion carried.

Moved by Krieger, seconded by Kully, to approve the following work orders:

EL-289   Installation of a three-phase underground electric line and padmount transformer to serve the new Werner Construction Concrete Plant to 2295 East 7th St. Estimated Cost:  $  16,697

WA-303 Reconnection of services on West A St., Burlington Ave. to Sewell Ave. Estimated Cost:  $100,422

WA-304  Replacement of fire hydrants in the system.   Estimated Cost:  $  48,299

Roll Call:  Ayes; Krieger, Kully, Hunt, Dewalt, Shoemaker.  Nays; None.  Motion carried.

The Board asked for a future presentation on fire hydrants in the system.

A discussion took place on the Fisher Fountain repairs.  Board Member Hunt felt that City Engineering and the public should be involved in the repair process.  Other members felt that as this is a maintenance issue, staff should proceed as planned. Council Liaisons felt utility staff should proceed as planned and Odom felt that the City Engineer is busy enough with road projects.

Moved by Dewalt, seconded by Krieger, to table the following items on the Agenda:

Roll Call:  Ayes; Dewalt, Krieger, Shoemaker, Hunt, Kully.  Nays; None.  Motion carried.

Moved by Krieger, seconded by Dewalt, that this Board go into Closed Session, which Closed Session is clearly necessary for the protection of the public interest and for the prevention of needless injury to the reputation of an individual, which individual has not requested a public meeting, in order to discuss certain matters relating to personnel, and that said Closed Session will consist of a strategy session relative to negotiations and litigation.  Roll Call:  Ayes; Krieger, Dewalt, Hunt, Shoemaker, Kully.  Nays; None.  Motion carried.

The meeting closed to the public at 11:37 a.m.  The executive session consisted of Board Members, Council Liaisons, the Board's Attorney, and staff.

Moved by Krieger, seconded by Kully, that the meeting be reopened to the public at 12:12 p.m., and that no decisions were made nor official actions taken during said Closed Session.  Roll Call:  Ayes; Krieger, Kully, Hunt, Shoemaker, Dewalt.  Nays; None.  Motion carried.

The meeting adjourned at 12:12 p.m.