Budget Meeting - July 27, 2016

MINUTES OF THE MEETING OF THE BOARD OF PUBLIC WORKS

A meeting of the Board of Public Works was held at the Hastings Utilities Board Room on Wednesday, July 27, 2016, at 8:00 a.m.  This meeting was preceded by notice duly published in the Hastings Tribune on Monday, July 25, 2016, 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, Kully, Shoemaker, Dewalt

Also Present: Meyer, Vrooman, Leonhardt, Cogley, Crecelius, Hartman, Barfknecht, McCoy, Stange, Cox, Patterson, Ptak, Sekora, Odom, Goebel, Gary Oetken of AGP, and Tony Hermann (Hastings Tribune)

The purpose of the meeting was to discuss the 2016-2017 Hastings Utilities Budget.

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.  He also declared a quorum of members present.

The Pledge of Allegiance was recited.

Staff presented the proposed Total Proprietary Statement and the 2016-2017 Labor Budget.  The total budget presented for 2016-2017 is $90,016,000.  Al Meyer summarized major challenges for the upcoming budget year, showed a summary of outstanding bonds and payments made January – September 2016 and showed a chart on In Lieu of Tax Payments made to the City.  Meyer also gave a presentation on PPGA impacts in each department at Hastings Utilities.  The Board would like to look at the number of personnel in each department before and after the start up of WEC-2.  Staff will get those numbers for the next meeting. It was suggested by one Board member to host an Open House at the WEC.  Staff will visit with the Board at another meeting on that suggestion.

Al Meyer informed the Board that water well #34 tripped on nitrates and was shut off for a couple of months.  Additional testing will take place to see if this vital well can be put back in service.  This emphasizes the need for treating the water and the costs associated with doing that which is a major challenge on water revenues.

As requested by the Board, $100,000 was budgeted in the Intra-City Services Fund for this fiscal year.

The Board discussed the date of implementation of any rate increases that may be needed.  They decided to follow the new fiscal year for implementation; therefore, any approved rate increases will go into effect October 1st.

The Board asked Mark Barfknecht to prepare additional rate projections for increases in water and sewer rates and have them ready for the budget meeting tomorrow.

The electric budget was presented to the board with no rate change.

Discussion was held on the priority of implementation of the 4.16 KV conversion project.  The alley behind the Hastings Tribune was discussed.  The Board would like the priority of that alley moved up when it is possible to do it.  Barfknecht said that Black & Veatch does a Biennial Report which includes an inspection of the entire distribution system and that report is available.

Keith Leonhardt gave a presentation on conversion of WEC-1 to natural gas.

No electric rate increase was recommended.

The gas budget was presented to the board with no rate change.

Don Cox gave a Wholesale Natural Gas update.

No gas rate increase was recommended.

The water budget was presented.  Discussion took place on rate making of water rates.  The last Rate Study by JEO will be distributed at the budget meeting tomorrow.  The Board delayed further discussion on the Water budget until tomorrow's meeting.

The Street Light budget was reviewed.  Ron Sekora gave a presentation on LED street light conversions.

No street light rate increase was recommended.

The meeting adjourned at 1:50 p.m.