Lane Electric - A Touchstone Energy Cooperative

03-27-17

Minutes of the Board of Directors’ Regular Meeting

March 27, 2017

 The Lane Electric Cooperative, Inc. (LEC) Board of Directors convened its regular board meeting on March 27, 2017 at the LEC corporate office at 787 Bailey Hill Road in Eugene Oregon.

Call to Order

President Christopher B. Seubert called to order the LEC Board regular monthly meeting around 9:00 am with a quorum present. Directors present were: Vice-President J. Ingrid Kessler, Secretary Hugh Buermann, Treasurer Susan Knudsen Obermeyer and directors Jack Billings, Kathy Keable, and Jerry Shorey.

Also present at different times in the meeting were: Charles N. Fadeley, LEC attorney (arrived at 9:00 am); General Manager, Matt Michel; Tony Toncray, Manager of Engineering & Operations; Dave D’Avanzo, Manager of Member & Regional Affairs; Debi Wilson, Manager of Office & Staff Services; Cynthia Scoble, Controller; Rick Engstrom, Engineering Supervisor; John Murray and Zechariah English, Energy Services Representatives; Blair Blizzard, Engineering Technician; Tara Davis, Utility Services Representative; Robin Castle, Data Management Supervisor; Michael Kirschnick, Lovelife Farms; and Scott Daniels from Aldrich CPAs + Advisors LLP.

Communications/Executive Assistant Brenda Everts acted as recording secretary.

 Member Input

None.

Approval of Agenda

President Seubert asked if there were additions or amendments to the agenda. President Seubert declared the agenda approved as presented.

Approval of Minutes

President Seubert asked if there were additions or corrections to the February 21, 2017 board meeting minutes.  President Seubert declared the February 21, 2017 board meeting minutes approved as presented. 

 Safety Report

Manager Toncray reported on the February Inside and Outside Safety Meeting Minutes. Discussion occurred. He presented the safety graphs and noted 252 days without a workplace accident. He further reported on any monthly personal injuries and vehicle accidents including totals month-to-date. Director Billings will attend next month’s Office Safety meeting. Director Buermann will attend the next month’s Construction & Maintenance Safety meeting.

Presentation and Acceptance of 2016 Audit Report   

The Lane Electric Cooperative Audit Committee came to order 9:30 a.m. on March 27, 2017 at the Cooperative’s headquarters.  The Committee members, being all directors of Lane Electric Cooperative, were present.  Also present was Scott Daniels from Aldrich CPAs + Advisors, LLP, the Cooperative’s engaged auditor.  Mr. Daniels said the audit went very well and resulted in an unmodified (clean) opinion on the financial statements.  The Board Letter and CFC Certificate had no exceptions. Mr. Daniels went over significant highlights in the 2015-16 audit report, including:

  1. Comparison of current and previous revenues, margins, ratios, and cash flow levels, and the reasons for the differences.
  2. Ratio of equity to total assets increased to 41%, which is strong.
  3. Long-term and short-term borrowing and debt.
  4. Internal controls are adequate.
  5. No material adjustments.
  6. Records in excellent shape and well prepared.
  7. Ratios are solid considering recent plant activity.
  8. Revenue per customers low, but operating margin is strong.
  9. There were no legal issues.

A director asked if there was anything that pointed to inadequacies in prior audits.  Mr. Daniels said they did not see anything material in that regard. Mr. Daniels went over financial comparisons with other rural electric providers and noted LEC was right in line or on the strong side. A director noted this was the most thorough audit review he had been involved with.

The Committee went into executive session with the auditor.  The Board then reconvened into regular session.  It was moved and seconded to accept the 2015-2016 audit report as prepared and presented by Aldrich CPAs + Advisors, LLP.  Motion passed.

Executive Session

The directors along with General Manager Michel and Attorney Fadeley entered into executive session.

The Board convened regular session.  Upon motion made and seconded it was approved to amend Policy 108 (Director Fees & Expenses) Section II F to read as follows: A stipend or other attendance fee paid by a third party to a director attending as a representative of the Cooperative, and/or at the Cooperative’s request, shall be tendered to the Cooperative. Should the tendered fee exceed the stipend and travel expenses that would otherwise be paid by, or be the responsibility of, the Cooperative, such net amount shall be returned to the director.

General Managers Report

General Manager Michel reported on: PNGC and BPA rates matters; PPC matters; appointment as ex-officio to the LCOG’s Lane Economic Committee; Policy 401 expenditures; pre-pay; and upcoming events. He also led a discussion on the PNGC blended wholesale rates proposal.

Guest Speaker

Lovelife Farms partner, Michael Kirschnick, gave a presentation on the medical marijuana growing operation located in Lane Electric’s Central District. He shared his business model and gave an example of a lighting project they are evaluating to save energy costs.

Financial Report

Manager of Office & Staff Services, Debi Wilson, along with Controller Cynthia Scoble reported on LEC’s financial condition for the period ending February 2017. Discussion occurred.

The Budget Workshop date was set as November 9, 2017 at 9:00 a.m. to 1:00 p.m.

An auditor performance review workshop and net metering workshop were scheduled for May 15, 8:30 am to 11 a.m.

Debi Wilson reported on the General Liability & Property & Cyber Security Insurance renewals.

Policy Review

General Manager Michel presented Policy 107 (General Manager Search & Selection) for review. Discussion occurred. Upon motion made and seconded, the Board adopted Policy 107 (General Manager Search & Selection) as presented in the board packet.

General Manager Michel presented Policy 211 (Employee Holiday & Leave Privileges). Upon motion made and seconded, the Board adopted Policy 211 (Employee Holiday & Leave Privileges) as presented in the board packet. 

General Manager Michel presented Policy 605 (Multi-Purpose Room Use).  Upon motion made and seconded, the Board adopted Policy 605 (Multi-Purpose Room Use) as presented in the board packet.

Reports

Bylaws Committee: Bylaws Committee Chair Kessler reported on the suggested amendments. Discussion followed.

Annual/District Meeting Committee: Motion made and seconded to nominate Harry Bonini and Mike Speiser to be Lane Electric Cooperative’s co-members of the year.

ORECA: President Seubert reported on ORECA activities. Vice president Kessler reported on the Legislative Day held in Salem. General Manger Michel reported on a ORECA statewide safety program proposal.

Director Reports: Directors offered comments on their recent activities. President Seubert presented Director Billings with his Director Gold Credential.

Appointments

President Seubert called for action on a NWPPA voting delegate.  Upon motion made and seconded the Board appointed Director Buermann as Lane Electric’s 2017 voting delegate and Director Knudsen Obermeyer as alternate for Northwest Public Power Association (NWPPA).

Agenda Topics for May 1, 2017

President Seubert reviewed next month’s agenda items.

Travel Check-In: Brenda Everts gave a travel and training update.

Action Review

General Manager Michel reviewed Board actions: approval of agenda, approval of minutes; Director Billings to attend the Inside safety meeting, Director Buermann to attend the Outside safety meeting; set November 8th 9 a.m. to 1 p.m. for a budget workshop; set May 15th 8:30 a.m. to 11 a.m. for an auditor performance review and net metering workshop; adoption of Policy 108 (Directors’ Fees & Expenses) as amended; adoption of Policy 107 (General Manager Search & Selection) as presented; adoption of Policy 211 (Employee Holiday & Leave Privileges) as presented; adoption of Policy 605 (Multi-Purpose Room Use) as presented; at the district meetings Director Kessler will address the December ice storm and Director Billings will address Round Up and MAP programs; selected two members for 2017 Member of the Year; appointed Director Buermann with Director Knudsen Obermeyer alternate for 2017 NWPPA voting delegate.

Adjournment

Being no further business to come before the Board, President Seubert adjourned the meeting at approximately 3:25pm