Minutes of the Board of Directors’ Meeting

Lane Electric Cooperative, Inc.

August 22, 2011

 

The regular monthly meeting of the Board of Directors of Lane Electric Cooperative Inc. was called to order by President Jeri Nelson at 11:07 AM on Monday, August 22, 2011, at the Cooperative’s office located at 787 Bailey Hill Rd, Eugene, Oregon.  Directors present were Christopher B. Seubert, Vice-President; Loy M. Sparks, Secretary; Patricia C. Dymock, Treasurer; and directors Charles J. Leighter, Charles E. Bangle, and James W. Hill. Also present were Charles N. Fadeley, Cooperative’s attorney; Rick Crinklaw, General Manager; Dave D’Avanzo, Manager of Member Services; and Debi Wilson, Manager of Office & Staff Services, and Brenda Everts, Executive Secretary, who acted as recording secretary.

Call to Order

· Member Input

No outside members were present.

· Approval of the Agenda

President Nelson asked if there were additions or amendments to the agenda. Hearing none, President Nelson declared the agenda approved as presented.

·  Approval of Minutes

President Nelson asked if there were any additions or corrections to the minutes of the regular board meeting held on July 25, 2011.   One correction was noted. A motion was made and seconded to approve the minutes as corrected.  The motion passed unanimously.

Reports:

· Director  & Committee

Policy Committee:

Committee Chair, President Nelson reported the Policy Committee met prior to the board meeting to discuss Policy 108 (Directors Fees & Expenses).  The policy committee reviewed data prepared by ORECA, the Cooperative’s statewide organization.  They also compared the Cooperative’s board fees to other peer cooperatives in Oregon, followed by a review of data developed by staff gathered from IRS's Form 990 that compared director compensation to all other Oregon cooperatives. Discussion followed.  Upon motion properly made and seconded, it was recommended to change the daily director fee from $150 to $200 for all meetings other than monthly board meetings starting September 1.  The motion was approved by unanimous vote.

Annual Meeting Committee:

Committee Chair, Director Hill reported everything is in order and ready for the five upcoming District Meetings and the Annual Meeting.

Blackberry Jam Festival:

Director Sparks reported on the Blackberry Jam Parade held in Lowell Oregon on July 30.

Oakridge Keg & Cask Festival:

Director Hill reported he attended the Oakridge Keg & Cask Festival held in Oakridge on August 20.  The festival was a fund-raiser for the Oakridge Food Box Program and Oakridge-Westfir Chamber of Commerce.

· Manager: 

      Thank You Cards:

                  Cards and thank you letters were passed around the board table.

Fish & Wildlife - Biological Opinion (Bi-Op:)

Mr. Crinklaw reported that federal judge, James Redden had remanded the Bi-Op back to the federal agencies.  Discussion followed.

BPA Financials & Rate Case:

Mr. Crinklaw referred to a hand-out from the Public Power Council (PPC) titled “In the Loop” regarding the Bonneville Power Administration (BPA) rates effective October 1.  He reported he was waiting to hear from the Pacific Northwest Generating Cooperative (PNGC) to see what the net effect will be for Lane Electric.

PNGC Power Operations Report:

Mr. Crinklaw reported the hydro forecast measured at The Dalles Dam was 132% of normal.

PNGC Financials – July Results:

            Mr. Crinklaw reported year-to-date net income for PNGC was $5.3 million, $1.5 million over budget. He also reported the year-end forecast for net income was $5.7 million, $2.7 million over budget.       

              PNGC Power Portfolio (2015 – 2019):

Mr. Crinklaw reported on the issues surrounding the PNGC 2015 – 2019 power portfolio.  He also reminded the board of the strategic education program scheduled for September 13, at The Valley River Inn. 

Regional/Federal Power Issues:

Mr. Crinklaw reported wind developers/operators have filed a complaint with the Federal Energy Regulatory Commission (FERC) regarding BPA’s policy requiring wind generators to shut down operations when high water / high wind conditions occur. The wind generators are seeking recovery of the financial benefits they lose when required to shut down (i.e. tax credits, renewable energy credits etc).  The National Rural Electric Cooperative Association (NRECA) and American Public Power Association have intervened in the FERC proceedings. The wind generators have also filed a lawsuit in the U. S. 9th Circuit Court challenging the BPA policy. 

He also reported that Bill Drummond was selected as BPA’s Deputy Administrator.

NERC/Western Electricity Coordinating Council (WECC) Compliance - Update

            Mr. Crinklaw gave the board a report on the following compliance issues:

· PRC-005 - Regarding 115 KV relay testing/maintenance (Rainbow and Dexter substations) – Program is established and has been implemented. The issue has been settled and closed.

· PRC-008 - Regarding Under Frequency load shed relay testing (Hideaway and Oakridge substations).  The program has been established and implemented – The issue had been settled and closed.

· WECC Audit – Thorough examination of record/process.  WECC found the Cooperative to be 100% compliant and the Cooperative’s “Documentation was excellent

Attorney Chuck Fadeley arrived for the meeting at 12:00 P.M

 OPUC / NESC Compliance        

Mr. Crinklaw reported on the Oregon Public Utility Commission (OPUC) and National Electrical Safety Code (NESC) compliance issues.  He reported that NESC violations identified in the years 2008, 2009, and 2010 have mostly been corrected.  Compliance activities are significantly ahead of schedule and under budget.

Union Pacific Railroad (UPRR) Project

Mr. Crinklaw reported on the UPRR Willamette Pass Corridor Project.  The terms for the point of delivery/metering service agreement has been signed and returned along with an executed service agreement for Lane Electric to serve the Wolf Mountain tap from the UPRR Power Line.

            Blue River and Oakridge Substation Over-Voltage Protection

Mr. Crinklaw reported on the repair and installation of equipment installed in the Blue River and Oakridge substations.  The cost of the equipment was negotiated and paid by BPA following the Blue River over-voltage event of September 2009.  The total cost for the repairs and equipment was $85,500.  BPA reimbursed Lane Electric $80,000 and the balance was covered by the Cooperative.

Head Quarters HVAC system

Mr. Crinklaw reported on the HVAC system upgrade.  He reported that during the second weekend of August, a newly installed component on the HVAC system sprung a leak.  The water leaked into the vault causing moisture damage to the ceiling.  There was no damage to documents or records.  Service Masters were called to do the clean up and repair.  Comfort Flow’s insurance will cover the cost of the clean-up and repairs.

Multi-Purpose Room Renovation

Ms. Wilson gave an update on the renovation of the multi-purpose room.  She mentioned there were changes made to stay within the budget. The demolition date has been moved to the middle of September and completion will occur sometime after the first of the year.

Managers Report

Mr. Crinklaw reported the deadline for Director Filing packets was August 1. There were only three applications submitted.  The deadline for petition filing is August 25, at 5:00pm.

Mr. Crinklaw reported the PNGC Annual Meeting is scheduled for October 4, at the Crowne Plaza in Portland.

Mr. Crinklaw reported on copper theft at the Dorena Substation.  Metal thieves also hit the Walton/Dorena substations on July 28.  Dorena substation is a joint BPA/ Lane Electric substation.  It was reported that both the fence and equipment ground wires were damaged and removed. 

Mr. Crinklaw reported on the Lane County Youth Livestock Auction that was held Saturday August 20 during the Lane County Fair.  Gary Foster was the bidder again this year for the Cooperative.  Total items purchased:

· Beef – Cheyenne Wilson, Dexter

· Hog – Madison Dube, Veneta

· Hog Anna Cuevas, Junction City

Mr. Crinklaw reported that Blachly-Lane Electric Cooperative has hired a new General Manager, Joe Jarvis.  Mr. Jarvis was previously the Chief Financial Officer for Chelan PUD.  Bud Tracy, the current manager, will retire effective August 31.

Travel & Meetings Itinerary

Each director received a copy of Mr. Crinklaw’s travel & meeting itinerary for July and August.  

Policy Review

· Policy 305 (Damage to Utility Property)

Upon motion properly moved and seconded, it was recommended that Policy 305 (Damage to Utility Property) be renewed as amended and presented.  The motion was approved by unanimous vote.

Donation Requests

A motion was made and seconded to donate $200 to the Uptown Business & Revitalization Association (Oakridge). The motion was approved by unanimous vote.

 A motion was made and seconded to donate $250 to the Fern Ridge Service Center.  The motion was approved by unanimous vote.

A motion was made and seconded to match a dollar-for-dollar, employees and board contributions to the United Way of Lane County; and that the board will be invited to the United Way festivities when they occur.  The motion was approved by unanimous vote. 

Select Recipient for Candidates – “Member of the Year”

Mr. D’Avanzo reported on the two candidates that were nominated to receive the “Member of the Year Award”.  A motion was made and seconded to select Gary and Sally Foster to be the 2011 recipients of the ‘Larry Erickson Member of the Year Award’ and that the award be presented to the recipients at one of the upcoming District Meetings.  The motion was approved by unanimous vote.

Lunch – Appoint Delegates for NRECA and CoBank Elections

Mr. Crinklaw reported that both NRECA and CoBank have sent notice of the upcoming director elections. In order to participate in the elections, the board must appoint the individuals authorized to cast the ballots for the Cooperative.  A motion was made and secondedto authorize President Nelson to cast Lane Electric Cooperative’s ballots in the director elections for the National Rural Electric Cooperative Association and for CoBank.  The motion was approved by unanimous vote.

Presentation of Inclining Block Rate Design Options

Ms. Wilson, Manager of Office & Staff Services, prepared a Power Point presentation for the board.  The presentation provided examples of inclining block rate designs. Examples were presented showing 1500 kWh and 2000 kWh as first blocks.  A seasonal component was also presented. A revised rate design will be presented at the board’s September meeting.

Presentation of Revised Rate Schedule L-1 (Yard Lights)

Ms. Wilson reported the current rate schedule for security lights is not fully recovering costs.  The proposed rate schedule would include charges for the initial installation of a light in addition to the continuing monthly charges for energy and maintenance.  The revision would only apply to future instillations.  A final recommendation will be presented at the boards September meeting.

Review Workers Compensation Insurance Renewal Proposals

Ms. Wilson reported that on September 30, the Cooperative’s current Workers Compensation Insurance coverage with Federated Insurance will expire.  Three proposals were submitted from Neilson, Hurtado & Associates; Federated Insurance; and SAIF.  She explained a significant positive influence in the cost of next year’s coverage due to the Cooperative’s improved experience MOD.  Last year the Cooperative’s MOD was 1.25 compared to 1.13 for 2012.  Mr. Crinklaw informed the board this will be an action item at the September board meeting.

2012 Budget Considerations

Ms. Wilson, along with Ms. Scoble, Controller, reviewed the budget preparation schedule and discussed general assumptions and how the budget may be affected by items in the new strategic plan.  She explained the initial draft is expected to be distributed to the board by the third week in October.

Financial Report

Ms. Scoble reported on the financial condition of the Cooperative for the period ending July 2011. The quarterly budget report was distributed. Ms. Wilson was also present for the report.

Safety Program Report

      Mr. Toncray, Manager of Construction & Maintenance reported on the July 25 safety meeting.  He reported on the status of the Employee Safety Program though the end of July.  The August safety meeting is scheduled for August 25.  The featured topic will be “Slips, Trips, and Falls”.  It was reported the employees have worked 137 days without a lost-time incident to date.

 

Agenda Items for September 26

· Donations

· Adopt Inclining Block Rate Design

· Health insurance renewal proposals

·  Workers compensation proposals

· Presentation of DRAFT Strategic Plan

· GM Performance Review

Adjournment

There being no further business to come before the board, the directors along with Mr. Crinklaw and Mr. Fadeley, entered into executive session.

___________________________________      ____________________________________

                           President                                                                    Secretary