Board Meeting - October 15, 2015

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, October 15, 2015, at 9:00 a.m.  This meeting was preceded by notice duly published in the Hastings Tribune on Tuesday, October 13, 2015, 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: Schultes, Meyer, Vrooman, Ptak, Leonhardt, Cogley, Crecelius, Hartman, Barfknecht, Schawang, Hernandez, Stange, Odom, Goebel, Krings, Duval, and Tony Hermann (Hastings Tribune)

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.

There were no public comments.

Chairman Shoemaker thanked the following employees for their years of service:  Steve Elley – Whelan Energy Center – 35 years; Virgil Naggatz – Whelan Energy Center – 35 years; and Richard Woodward – Whelan Energy Center – 35 years.

Chairman Shoemaker and the Board agreed to move to Item 11 – Discussion of City Council request of Hastings Utilities to change fiscal year end to September 30.

Council Liaison Odom commented that the discussion of Hastings Utilities' fiscal year being changed to October 1 to align with the General City budget has been discussed within the City Council long before this recommendation from the study.  The City Council tabled the issue to allow the Board of Public Works to have a discussion on the proposed ordinance.

Councilman Krings said this was one of the items in the study and that at this time the majority of the City Council are on board with this concept.  Krings said that this was not an attempt to try to push any of the other items in the study.  He asked the Board to make this change an urgent matter and would like to see a nine month budget approved this budgeting session.  He feels this would show that the Board of Public Works is committed to working with the City Council on matters moving forward.

Councilwoman Duval agreed with Krings and said that not only were we caught off guard on this agenda item, but the Council was also.

Board Member Dewalt thanked the City Council members for the opportunity for Board of Public Works' discussion and said that the Board was caught off guard with this approval of an ordinance to change the utilities' fiscal year on their agenda for their October 12th meeting.    The Board has had no opportunity to do any work to get to a nine month budget prepared and that the 12 month budget is 95% complete.  Dewalt said she didn't know how this would affect the budget in relation with PPGA or how the FERC reporting would be affected.

Chairman Shoemaker said that he felt there are some good ideas in the study and would need extensive discussion.

Board Member Hunt also thanked the Council for the opportunity for the Board to have a discussion.  He stated that our staff would need help from the city in preparing a budget like theirs, but Shoemaker reminded Hunt that we are not doing a municipal budget, just being asked to change the fiscal year.

Dave Ptak said that Mark Barfknecht does furnish Hastings Utilities information to the City Treasurer and it is inserted into the city budget form that they file with the state.

Marv Schultes distributed a 1933 City Water and Light Annual Operating Report that was requested by Councilman Odom showing that the Utilities has been on a calendar fiscal year as far back as 1933. He said a calendar year was probably chosen years ago because it makes sense to get through the summer peak to get better data in order to prepare a more accurate budget.   He said that OPPD, NPPD, and many private electrical utilities use a calendar year.  It was discussed that Grand Island and Fremont both operate on a 10-1 – 9-30 fiscal year.

Councilman Odom said that he is hoping Hastings Utilities can make this change for the 2016-2017 budget but would like to allow Hastings Utilities three months to plan the change and not push to comply in two weeks to avoid any mistakes.

Mark Barfknecht explained that the accounting system, including the Public Power Generation Agency's accounting, is complex and his department would need more time to make the change to a new fiscal year and agreed that the 2016 draft budget is nearly complete.

Dave Ptak stated that he has put in a call to the State Auditor's Office to see what steps Hastings Utilities will need to go through to comply with the reporting laws.

Councilman Krings reiterated he believed that the City Council will insist that Hastings Utilities comply with a new fiscal year starting 10-1-2016.

Councilman Goebel asked staff if they could prepare a nine month budget after the 12 month budget is distributed on October 26th so that it would be available at the Board worksessions on November 3rd and 4th.  Barfknecht said they will try their best.

Shoemaker summarized by going through the two options; pass a 12 month budget and cut off early and start the new fiscal year as of 10-1-2016; or pass a 9 month budget now. After Dave Ptak visits with the State Auditor's Office, we will know how to proceed.  The Board would then have no problem if the Council adopts an ordinance that mandates the September 30 year end.

Motion by Dewalt, Second by Shoemaker, to notify the Mayor and City Council that:

(1) the Board of Public Works reviewed and discussed Ordinance No. 4454 which would change the fiscal year of the proprietary utility functions operated by Hastings Utilities to be the same as the City of Hastings' fiscal year and that the Board of Public Works has no objections to the change of the fiscal year; and

(2) that the change in said fiscal year be accomplished in compliance with the Nebraska Budget Act (Neb. Rev. Stat. §13-501 - §13-513), but in no event later than the start of the City's fiscal year commencing October 1, 2016.

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

Under report from the General Manager, Marv Schultes reported that after discussions by HU and City staff, the Sewer District on North 2nd Avenue is scheduled to be on the next Council Agenda for action.

Schultes reported that he met with the Nebraska Department of Environmental Quality and the Governor regarding compliance with the Clean Power Plan rules.  The Governor prefers that utilities work together as a state as they go forward toward implementation.

Schultes thanked Dewalt, Mayor Powers, and Industrial Irrigation for participating in a tour of the Pollution Control Facility last week.

Al Meyer reported that the WEC-1 maintenance outage was completed on October 5th.  There was an oil leak in a fuel storage tank.  The tank was taken out of service and repairs will be made.  The proper authorities were notified about the leak and Hastings Utilities will work with them on the clean up.  The WEC-2 maintenance outage will begin tomorrow, October 16th.

Lori Hartman reported on personnel activities:

An offer was made to an internal candidate for an Instrument Tech Assistant at WEC (David Miller).

The four Auxiliary Operators that were part of the Energy Center succession plan started on Monday, October 12th – all four were external hires  (Micah McCaffery, Ben Schudel, Brad Griffith, Wally Glassmyer).

Committee Reports:

Comparability.  Dewalt reported that the committee has nothing at this time.  Shoemaker asked the committee to revise their focus and get more active because of the new organizational study's recommendations on comparability.  Dewalt reminded the Board that the comparability committee was not happy with the last comparability study and after making some adjustments, they went forward with it because of time constraints.  Shoemaker and Dewalt asked that a committee meeting be scheduled to discuss the comparability recommendations from the city organizational study.Land Leases.  Hunt reported that the committee has met and he feels all land owned by the city should be under the direction of one head.  The committee has not pursued that yet.  Kully has met with a consultant in this business and the committee is waiting for his advice. Budgeted Labor – Accounting is working on the final copy of the budgeted labor.  Dewalt asked that the strategic planning sheet be sent to the Board.  Staff will send out the requested sheet.Improvement Districts – The Board will be looking at the transition agreements in the future.

Hunt asked that the Chamber's Bill to Hastings Utilities be paid.  The Chamber presentation was postponed to the next Board meeting.  The bill will appear on the check list at the next meeting.

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

a. Review, correction or approval of minutes of October 1, 2015
b. Review of payroll for period ending October 3, 2015
c. Review and approval of checks issued October 9, with the exception of check no.
28069 to Kully Pipe & Steel Corp., check no. 28107 to Sullivan Shoemaker PC LLO, and check no. 28168 to SID #1 of Clay County, NE

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

The Board asked for overtime by department on the payroll sheet in the future.

Moved by Hunt, seconded by Dewalt, to approve check no. 28069 to Kully Pipe & Steel Corp. in the amount of $1,617.07.  Roll Call:  Ayes; Hunt, Dewalt, Shoemaker.  Nays; None.  Kully abstained.  Motion carried.

Moved by Hunt, seconded by Kully, to approve check no. 28107 to Sullivan Shoemaker PC LLO in the amount of $609.37 and check no. 28168 to SID #1 of Clay County, NE in the amount of $88.12.  Roll Call:  Ayes; Hunt, Kully, Dewalt.  Nays; None.  Shoemaker abstained.  Motion carried.

As mentioned previously in the meeting, the Chamber Retail Development Committee Report was postponed until the October 29th meeting.

Marv Schultes presented the July 2015 Monthly Report.  Shoemaker read an article from the Omaha World Herald that OPPD is proposing a 4% rate hike, along with using rate stabilization monies.  They are facing the same issues as Hastings.

The Discussion on Residency Requirement will be postponed to the next meeting.

During a Preliminary Budget Discussion, Schultes reminded the Board that wages will show an increase of 2.93%, if their wage scale was previously at or above comparability.  The Board asked Schultes if he has a recommendation on rate increases/decreases and he said he will know more after looking at the August 2015 Monthly Report and the 2016 Budget numbers.  The Board asked that a copy of the historical rate increases be distributed.  Marty Stange gave short presentations on "Aquifer Storage and Restoration Project Status and Budget Review" and "2016 Sewer Budget Review".  Keith Leonhardt gave a short presentation on "Major Items for 2016 Electric and Gas Capital Budgets" and Kevin Schawang gave a short presentation on three software updates that will be in the proposed budget.  Those include the Billing System for $110,000, the Cayenta Financial Package for $125,000, and an HR Module that relies on the Cayenta Data for $150,000.

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

GA-314   New 4" PE Gas Main at Central Community College; 330' east of Parade Ave., 350 north of Community Dr. to 125' south of Community Dr. Estimated Cost:  $30,979

PL-674    Replacement of original leakage control system for regenerative air heater on WEC-1. Estimated Cost:  $36,905

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

There were no Board Member comments.

There were no Miscellaneous and Future Agenda Items.

Moved by Hunt, seconded by Kully, that this Board go into Closed Session, which Closed Session is clearly necessary for the protection of the public interest in that said Closed Session will consist of a strategy session relative to negotiations.  Roll Call:  Ayes; Hunt, Kully, Dewalt, Shoemaker.  Nays; None.  Motion carried.

The meeting closed to the public at 12:02 p.m.  The executive session consisted of Board Members, Council Liaisons, Marv Schultes, Al Meyer, Lee Vrooman, and Keith Leonhardt.

Moved by Dewalt, seconded by Kully, that the meeting be reopened to the public at 12:26 p.m., and that no decisions were made nor official actions taken during said Closed Session.  Roll Call:  Ayes; Hunt, Kully, Dewalt, Shoemaker.  Nays; None.  Motion carried.

The meeting adjourned at 12:26  p.m.