Minutes of the Board of Directors’ Meeting

                                                  Lane Electric Cooperative, Inc.

                                                            November 28, 2011

 

The regular monthly meeting of the Board of Directors of Lane Electric Cooperative Inc. was called to order by President Jeri Nelson at 11:00 AM on Monday, November 28, 2011, at the Hampton Inn located at 3780 West 11th Ave., Eugene, Oregon.  Directors present were Loy M. Sparks, Vice-President; Patricia C. Dymock, Secretary; and directors Charles J. Leighter Treasurer, Christopher B. Seubert, 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; Debi Wilson, Manager of Office & Staff Services;  Tony Toncray, Manager of Construction; Doug Stockdale, Manager of Engineering 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 October 24, 2011.   Hearing none, President Nelson declared the minutes approved as presented.

Reports:

Director  & Committee

Facility Meeting Committee

Director Seubert reported the Facility Committee met to discuss the renovation project underway at the headquarters.  It was reported that some issues with both the security system and the HVAC system will need to be looked into and assessed.

Concession Sponsorships

Director Dymock reported that she and her husband, Fred, attended a recent McKenzie High School football game at which the Cooperative sponsored the concessions.  She mentioned how grateful everyone was.

Cottage Grove Community Foundation AnnualDinner

Director Bangle reported on the Cottage Grove Community Foundation Annual Dinner that was held on October 27 at “Our Lady of Perpetual Help” in Cottage Grove.  He mentioned it was a good fundraiser for the foundation.

Manager: 

Thank You Cards:

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

Biological Opinion

Mr. Crinklaw reported that Judge James Redden is stepping down from the federal court bench.  He reported that Judge Brown or Judge Hernandez will likely be assigned to address fish and wildlife issues that affect Northwest Utilities.

PNGC Financials – September Results:

Mr. Crinklaw reported year-end net income for PNGC was $9 million.

Regional/Federal Power Issues

Mr. Crinklaw reported on the following issues that have emerged during the past month; BPA Capital Program, PMA Market-Based Rate Proposal and the REP Settlement.

Union Pacific Railroad (UPRR) Project

Mr. Crinklaw reported that materials and equipment have been ordered to complete the metering facility for the UPRR Willamette Pass Corridor Project in Oakridge. The construction for the metering facility is scheduled to be completed before year-end.

Rate Decrease/Rebate

Mr. Crinklaw reported on several news articles generated from the communication efforts following the release of information regarding the rate decrease/rebate.

King Estate Solar Project – Update

Mr. Crinklaw reported the racks and PV panels have all been installed.  He said work is continuing on converting the tap from 1-phase to 3-phase. He also reported the following equipment is still in transit; metering cabinet, recloser switch and vault, transformer vault, and the BPA meter.  Once the equipment is installed and the transformer is placed on the vault, the project will satisfy the Oregon tax requirements.

2012 LIHEAP (Low Income Home Energy Assistance Program)

Mr. Crinklaw reported funding assistance will be about half of what it was last year.  The agency opened on November 1 and closed on November 8 due to lack of funding.

 

Electric Vehicle Charging Station

Mr. Crinklaw reported on a state/federal initiative to install fast DC charging stations for electric vehicles.  The program is known as “TIGER II”.  The intent is to have state-wide coverage for electric vehicle charging.  The stations must have 3-phase power and be no more than 100 miles apart.

WECC/NERC Assessment

Mr. Crinklaw reported that he has received an invoice for $12,276 for the 2012 WECC/NERC annual assessment.

2012 Association Dues

Mr. Crinklaw reported the cost of the 2012 NWPPA and NRECA Association dues.  The dues for NRECA are $18,840 and the dues for NWPPA are $12,569.

ORECA Annual Meeting

Mr. Crinklaw reported the upcoming ORECA Annual meeting to be held Dec. 1 at the Salem Grand Hotel in Salem.  Directors Bangle, Dymock, Sparks Leighter, Nelson and Seubert are all scheduled to attend.

PPC Annual Meeting

Mr. Crinklaw reported the PPC Annual meeting will be held Dec. 8 in Portland.  Mr. Crinklaw and Director Sparks are both scheduled to attend.

Eugene Chamber of Commerce “Celebration of Business”

Mr. Crinklaw reported the Eugene Chamber of Commerce’s “Celebration of Business” will be held on January 25 at the Hilton.  Those scheduled to attend are, Mr. Crinklaw and his wife Carla, Tony Toncray and his wife Shelley, Director Seubert, Debi Wilson, and possibly Senator Floyd Prozanski.

SAVE (Safely Achieving Value & Efficiency)

Mr. Crinklaw reported on a cost saving proposal from the customer service representatives regarding new member packets.  The suggestion was to convert the packet to CD instead of paper form.  It would save on postage and printing costs, with a projected annual savings of $5,900 a year.

Employee Succession

Mr. Crinklaw reported Sean Martin completed his Journeyman Tree trimmer apprenticeship on October 3, and Travis Larsen completed his Lineman apprenticeship on November 5.

LEC Christmas Party

The Lane Electric Christmas Part is scheduled for Dec 9 at the Country Inn in Coburg.

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

Holiday Open House

Mr. Crinklaw invited everyone to his Holiday Open House the evening of Monday December 19 following the Board meeting.

 

Travel & Meetings Itinerary

Each director received a copy of Mr. Crinklaw’s travel and meeting itinerary for November and December.  

Policy Review

Policy 209 (Purchases – Employees & Directors)

Policy 603 (Donations & Contributions)

Upon a motion properly made and seconded, it was moved to renew as amended and presented Policy 209 (Purchases – Employees & Directors), and Policy 603 (Donations & Contributions).  The motion was approved by unanimous vote.

Articles of Incorporation

Mr. Fadeley reviewed the articles of incorporation.  On a quarterly basis Mr. Fadeley will review a portion of the Cooperative’s Bylaws.

Donation Requests

VFW Women’s auxiliary - Holiday Packages for Military Personnel - Upon motion properly made and seconded, a donation of $325 was approved by majority vote with one director dissenting.

Allocation of MemberChoice Reserve to King Estate Solar Project

Ms. Wilson, Manager of Office & Staff Services, reported that the term of the Purchase Power Agreement with SolarCity requires Lane Electric to make an advance payment of $108,000 when the solar project becomes operational. It is anticipated that the project will be operational before the end of the year.  She mentioned the reserve accumulated under the Cooperative's MemberChoice Program could be used to cover a large portion of the pre-payment. The reserve is intended to be used for renewable energy investments that would serve Lane Electric members.  Upon motion properly made and seconded it was moved to approve the allocation of $64,000 of the MemberChoice program reserves toward the King Estate Solar project.  The motion was passed by unanimous vote.

Construction Work Plan Activities Report

Mr. Stockdale gave the quarterly construction work plan activities report.

Approve 2012 Budget

Mr. Crinklawreported that following the board/staff work session on November 7, the revisions directed by the board were incorporated into the 2012 DRAFT budget.  Discussion followed. Upon motion properly made and seconded, it was moved to approve as presented the 2012 operating and capital budgets.  The motion was approved by unanimous vote.

Ratify Rate Schedule GS-1 (General Service Single-Phase)

Ms. Wilson reported on the changes needed to the General Service Single-Phase rate schedule following the adoption of an inclining block rate design. Upon motion properly made and seconded, it was moved to adopt as presented Rate Schedule GS-1 (General Service Single-Phase), and that the rate be effective to all billings rendered on or after January 1, 2012. The motion was approved by unanimous vote.

Authorize Purchase of AMI Modules

Mr. D’Avanzo presented a memo to the board for consideration to repurpose funds originally earmarked for demand response activities to purchasing the remaining software license for the AMI system platform. Upon motion properly made and seconded, it was moved to reallocate $100,000 originally budgeted for demand response activities, to purchase advancing metering infrastructure modules from Cooper Power System.  The motion was approved by unanimous vote.

Approve Renewal of Health Insurance

Ms. Wilson reported that the Employee insurance committee received and considered five proposals from three insurance companies. After considering the various plans, the committee recommended that the board renew dental coverage with NRECA and renew medical coverage with Providence.  Discussion followed.   Upon motion properly made and seconded, it was moved to renew for calendar-year 2012 the existing employee dental insurance coverage with the National Rural Electric Cooperative Association, and existing medical insurance coverage with Providence Health Plans.  The motion approved by unanimous vote.

Financial Report

Ms. Scoble, Controller, reported on the financial condition of the Cooperative for the period ending October 2011. Ms. Wilson was also present for the report.

Safety Program Report

Mr. Toncray, Manager of Construction & Maintenance reported on the October safety meetings.  The October Construction & Maintenance safety meeting was held October 27.  The featured topic was “Substation Fire Suppression”.  The October Office safety meeting was held October 20.  The topic was “Ladders & Stairs”. He reported on the status of the Employee Safety Program though the end of October.   It was reported the employees have worked 235 days without a lost-time incident to date.

 

Agenda Items for December 19

Donations

RESAP Resolution

2012 Board Meeting Dates

Appoint Annual Meeting Voting Delegates

 

Pre-Audit Conference 2011 Audit

The Lane Electric Board of Directors, acting as the Audit Committee, met with Kenneth Kuhns of Kenneth Kuhns & Company for the 2011 Pre-Audit Conference on November 28, 2011. 

Mr. Kuhns and Mr. Born told the Board about the firm’s electric utility audit experience.  Mr. Kuhns said his firm would share best practices from other utility audits.  Mr. Born will be supervising the audit field work.  Audit field work is to be completed in early February if records available, with the audit report at the March Board meeting.

Staff was excused.  The Cooperative’s attorney remained.

President Nelson stated the purpose of the meeting was to get acquainted with the new auditor and to bring up areas of special concern. She also talked about the previous audit engagement.  She told the auditor “we want an A, but we want to earn it.”

The auditor confirmed the review would be completed and independent.

The auditor informed the Board that they had talked to the former auditor as required by audit standards.

The auditor noted their broader responsibility was to the entities that rely on the financial statements.

Mr. Seubert asked about review of the Co-op’s cash investment choices.  The auditor said the standard audit looks at investment policies and would follow up on any investments that appeared unusual.

Mr. Seubert also emphasized the absolute requirement that the Co-op stay financially sound in this complex business environment.

The auditor asked for any specific Board concerns.

Pre-audit conference adjourned.

Submitted by Charles Fadeley, acting as Secretary for the meeting.

On motion properly made and seconded the board unanimously approved the audit engagement with Kenneth Kuhns & Company for the 2010-2011 audit.

Adjournment

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

 

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President                                                                            Secretary