Lane Electric - A Touchstone Energy Cooperative

03-28-16

Minutes of the Board of Directors’ Regular Meeting

March 28, 2016

 The Lane Electric Cooperative, Inc. (LEC) Board of Directors convened its regular board meeting on March 28, 2016 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 Jack Billings and directors Kathy Keable and Jerry Shorey. Director Susan Knudsen Obermeyer participated by telephone.

Also present at different times in the meeting were: Charles N. Fadeley, LEC attorney (arrived at 9:06 AM); Matt Michel, General Manager; Dave D’Avanzo, Manager of Member & Regional Affairs; Tony Toncray, Manager of Engineering & Operations; Debi Wilson, Manager of Office & Staff Services; Cynthia Scoble, Controller, Bud Dyer, ROW Coordinator, Julie Stephens, Credit and Member Services Supervisor, Ken Kuhns of Kenneth Kuhns & Co., Dave Churchman, EWEB, and Mark Herbert and Molly Scurto of New Paradigms.

Executive Secretary Brenda Everts acted as recording secretary.

 Member Input

None.

Approval of Agenda

President Seubert asked if there were additions or amendments to the agenda. General Manager Matt Michel ask to add a donation request, President Seubert declared the agenda approved as amended.

Approval of Minutes

President Seubert asked if there were additions or corrections to the February 22, 2016 board meeting minutes.  President Seubert declared the February 22, 2016 minutes approved as presented.

Safety Program Report

Engineering & Operations Manager Tony Toncray reported on the February inside Office and outside Construction and Maintenance safety meetings, and the Employee Safety Performance graphs through February. He provided the topics scheduled for the April inside safety meeting. Directors Knudsen Obermeyer and Billings reported on the safety meeting they attended.  Director Buermann will attend next month’s Office Safety meeting. Director Shorey will attend the next month’s Construction & Maintenance Safety meeting. Tony also reported on the Alert & Alive Forum’s evaluation of security for office and field employees.

 Presentation and Acceptance of 2015 Audit Report   

The Lane Electric Cooperative Audit Committee came to order 9:30 a.m. on March 28, 2016 at the Cooperative’s headquarters.  The Committee members, being all the directors of Lane Electric Cooperative, were present.  (Ms. Knudsen-Obermeyer was present via telephone).  Also present was Kenneth Kuhns of Kenneth Kuhns & Co., the Cooperative’s engaged auditor.

Mr. Kuhns said the audit went very well and resulted in an unmodified (clean) opinion on the financial statements. The Governance Letter had no exceptions.

Mr. Kuhns went over significant highlights in the 2014-15 audit report, including:

  1. Comparison of current and previous revenues, margins, cash and cash flow levels and the reasons for the differences.
  2. Ratio of equity to total assets, noting LEC did not retire capital credits last year. Equity was above 40%.
  3. Long-term and short-term borrowing and
  4. Internal controls are adequate.
  5. The meter flashing was properly classified and funded.

A director asked if being a 100% CFC borrower presented any additional risk.  Mr. Kuhns said he had not identified any additional risk.

A director asked if LEC’s debt level should start decreasing after the headquarters remodel.

A director asked about the 85% test and for-profit activities.  Mr. Kuhns explained the test and options.

The Committee went into executive session with the auditor.  The Board then reconvened into regular session.  It was moved and seconded to accept the 2014 and 2015 audit report as prepared and presented by Kenneth Kuhns & Co.  Motion passed.

Executive Session

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

 Financial Report

Controller Cynthia Scoble reported on LEC’s financial condition for the period ending February 2016. Discussion occurred.

Capital Credits Allocation

Manager Wilson gave an overview of capital credits and how Lane Electric handles allocations of those credits.

November Budget Workshop Date

Manager Wilson rescheduled the November budget workshop to November 16.

Selecting an Auditor

Manager Wilson discussed the next steps in selecting an auditor for next year.

 Policy Review

General Manager Michel presented two policies for review:

Policy 109 (Indemnification of Directors, Officers, & Employees)

Policy 301 (Service Policy)

Upon motion made and seconded, the Board affirmed Policy 109 (Indemnification of Directors, Officers, & Employees) as presented in the board packet.

 Upon motion made and seconded, the Board adopted Policy 301 (Service Policy) as presented in the board packet.

New Paradigms, LLC Presentation

Mark Herbert and Molly Scurto of New Paradigms gave a presentation of their services. Following discussion, the board elected to hire Mark F. Herbert & Associates, Inc. to conduct a Peer/Board Evaluation.

Reports

Annual Meeting: Annual Meeting Chair Kessler reported on director involvement at the district meetings.  Dave D’Avanzo, Member & Regional Affairs Manager provided an update on the Election & Credentials actions and Annual Meeting communication efforts and facilitated the Board’s selection of Lane Electric’s 2016 Member of the Year. Upon motion made and seconded, the Board elected Bev McCulley as Member of the Year.  Motion made and properly seconded to vote to see if there will be a co-member of the year. Following the vote, the board elected Geneva Davis to be a co-member of the year.

Director Reports: Directors offered comments on their recent activities.

 

ORECA: President Seubert reported on ORECA matters. General Manager Michel shared an update on the ORECA Governmental Affairs Committee activities and other legislative and regulatory efforts.

 General Manager: General Manager Michel shared thank-you notes received and reported on: PNGC Matters, PPC and BPA matters; information contained in the Miscellaneous Readings; Policy 401 expenses; community solar garden; prepay; net metering; the transition planning for four-ten workdays effective June 27th; outage protocol; strategic plan mapping update; and US Supreme Court no action on marijuana legalization. General Manager Michel also received guidance from the Board on field collections, handling emails to all board members from members and non-members; and action on private stock.

Review of 2016 NRECA Adopted Resolutions

President Seubert suggested setting a date to hold a workshop to Review the 2016 NECA Adopted Resolutions with an eye towards proposing a few of their own.  The workshop will be held April 12th from 9:00 am to 11:00 am lunch included.

Right of Way Program Update

Bud Dyer, Right of Way Coordinator gave an overview of the vegetation management program.  He also reported on a database project the he along with Andy Cave, IT Coordinator developed that will help monitor vegetation growth and will help be more predictive with Right of Way maintenance.

 Appointment of Voting Delegates

President Seubert called for action on a Ruralite voting delegate.  Upon motion made and seconded the Board appointed Member & Regional Affairs Manager Dave D’Avanzo as Lane Electric’s 2016 voting delegate for Ruralite.

President Seubert called for action on a NWPPA voting delegate.  Upon motion made and seconded the Board appointed Director Knudsen Obermeyer as Lane Electric’s 2016 voting delegate and Director Shorey as alternate for NWPPA.

Donation Requests

Upon motion made and seconded, the Board approved a donation in the amount of $125 to high school grad night events upon request.

Upon motion made and seconded, the Board approved a donation in the amount of $5,000 to match a CoBank Sharing Success donation application for area food banks and Food for Lane County.

Upon motion made and seconded, the Board approved a donation in the amount of $200 to Community Festival Association.

Agenda Items for April 25

President Seubert reviewed next month’s agenda items.

 

Action Review:

Approval of the agenda as amended, approval of the minutes, acceptance of the 2015 Audit Report, directed legal counsel to provide advice on email communications, commended Debi Wilson on diligence on recording meter flashing expenses and clean financial audit, set November 16 as a budget workshop day, consensus to decide direction on 2016 audit services at April regular board meeting, affirmed as presented Policy 109 (Indemnification of Directors, Officers, & Employees), adopted as presented Policy 301 (Service Policy), elected to hire Mark F. Herbert & Associates, Inc. to conduct a Peer/Board Evaluation Process, consensus for district meetings business casual dress and director talks  at meetings: Jack Billings, community solar-Kathy Keable, disaster preparedness-Hugh Buermann, Row River Right of Way work, selected Bev McCauley and Geneva Davis as Co-Members of the Year, gave direction to General Manager on field collections, emails, stock holdings, set April 12th from 9-11 with lunch for work session on 2016 NRECA Resolutions, appointed Manager D’Avanzo as 2016 Ruralite voting delegate, appointed Susan Knudsen Obermeyer as delegate and Jerry Shorey as alternate 2016 NWPPA voting delegates, donated $125 for grad nights upon request, $1,000 ($5,000 total) to five local food banks to be matched dollar for dollar by CoBank, donated $200 to the Oakridge/Westfir Tree Festival.

Adjournment

Being no further business to come before the Board, President Seubert adjourned the meeting at approximately 4:35 p.m.