October - Flathead Electric Cooperative

FLATHEAD ELECTRIC COOPERATIVE, INC
October 22, 2014
ICALISPELL, MONTANA
The regular meeting of the Board of Trustees of Flathead Electric Cooperative, Inc. was held at
the office of the Cooperative at 2510 US HWY 2 East, Kalispell, Montana on Wednesday, October
22, 2014. The meeting was called to order at 9:01 a.m. by President, Earl Messick.
Other officers and trustees in attendance were: Doug Grob, Vice-President; Emery Smith,
Secretary/Treasurer; Duane Braaten, Chris Byrd, Jay Downen, Paul Holland, Bruce Measure, and
Alan Ruby. Also in attendance were: Mark Johnson, General Manager; Max Davis, Legal
Counsel; Tod Young, Cheryl Talley, Mike Parrish, Dave Biggar, Jason Williams, John Goroski,
Stephanie Wallace, Frank Kauzlarich, Kevin Hodik, and Suzanne Childers.
It was moved by Emery Smith and seconded by Doug Grob that the agenda as amended be
approved. The motion was unanimously adopted.
It was moved by Paul Holland and seconded by Emery Smith that the September 24,2014 minutes
be approved as presented. The motion was unanimously adopted.
Dave Biggar introduced Frank Kauzlarich as the new Director of Operations.
Emery Smith reported on the Finance and Audit Committee meeting on October 21, 2014.
It was moved by Doug Grob to file for audit the financial statements for the month ending
September 30, 2014. The motion was seconded by Paul Holland and upon being put to a vote was
unanimously adopted.
It was moved by Duane Braaten to approve a capital credit general retirement for 2014 of 5% of
the unretired patronage capital on a First In — First Out basis for an approximate amount of $2.8
million. The motion was seconded by Paul Holland and upon being put to a vote was unanimously
adopted.
It was moved by Doug Grob to update the Bank Signatories as presented. The motion was
seconded by Duane Braaten and upon being put to a vote was adopted with eight in favor and one
opposed.
After considerable discussion, it was moved by Paul Holland to approve the October 21' advance
of a $6 million loan from CoBank. The motion was seconded by Chris Byrd and upon being put
to a vote was unanimously adopted.
After considerable discussion, it was moved by Emery Smith to direct Mark Johnson to present a
proposal for a potential 2014 rate rebate to include method, amount, and timing of a rebate. The
motion was seconded by Paul Holland and upon being put to a vote was unanimously adopted.
After considerable discussion, the Board directed Mark to initiate the bid process in 2015 for the
operations and maintenance of the Landfill-Gas-to-Energy Generating Facility.
Bruce Measure reported on the Policy Committee meeting on October 6, 2014.
After considerable discussion, the Board recommended additional direction to Mark to form a
member advisory committee of property owners, renters, and members-at-large to review the Flex
Pay program involving property owners.
Stephanie Wallace answered questions regarding the addition of electronic member voting at
Flathead Electric. The Board directed Stephanie to present voting options, recommendation of a
possible by-law rewrite, and a cost breakdown.
Cheryl Talley answered questions regarding recent activity at the Landfill-Gas-to-Energy
Generating Facility.
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Jason Williams updated the Board regarding a Columbia Falls easement issue that was resolved
after legal representation sent a letter to nearby members explaining easement compliance. Jason
also answered questions regarding upgrading the Flathead Electric feeder south of Libby.
Tod Young introduced Suzie Wrbelis as the new Payroll Administrator. Tod also reported that the
Flex Pay participants are eligible to contribute to Roundup for Safety.
Mike Parrish answered questions regarding funding for servers in 2015.
Dave Biggar answered questions regarding working on projects with the Montana Department of
Transportation and on pole testing.
John Goroski updated the Board regarding the Demand Response Unit (DRU) program. John also
answered questions regarding equipment removal, recent changes to Plum Creek invoicing, and a
recent project with International Paper in Libby.
In his manager's report, Mark Johnson updated the Board regarding the following:
•
Power Generation Options in Libby — Mark and Cheryl met with Jim Hammons, Libby
City Administrator regarding potential hydro projects in Libby. Jim Hammons will be in
touch with FEC for a follow up conversation once the City's engineering consultant
finishes its evaluation. Cheryl and Earl attended a meeting with Paul Rununelhart and the
KRDC regarding the boiler at the mill site. Mark and Cheryl to follow up in early 2015.
•
Member Phone Calls — Mark reported that he spoke to a member who is concerned with
the Board's decision to stop the automated calling prior to a disconnect. The member
researched the FCC ruling and felt that we should still be making the phone calls. The
attorney will do some additional research for possible Board reconsideration.
Attorney Max Davis updated the board regarding an ongoing easement issue.
It was moved by Emery Smith to authorize the Secretary to sign the revised F&A Policy 210
Appendix B. The motion was seconded by Chris Byrd and upon being put to a vote was
unanimously adopted.
The Department Managers left the meeting.
The Board and Manager discussed the following:
•
Flex Pay program and Property Owners — Mark and the Board continued discussion of the
member advisory committee.
•
Member Phone Calls — There was discussion on handling of member phone calls and
customer service.
•
Social Media — There was discussion on the possibility of social media interfacing.
•
Elliot Mainzer — Mark reminded the Board of the meeting with Elliott Mainzer,
Administrator of BPA and representatives of Western Montana G&T which will be held
November 7th at Mission Valley Power in Pablo. He, Doug and Chris will likely not attend
due to a conflict. Earl, Duane, and Alan will be attending.
•
Expense Reports — There was discussion regarding following a formal process when
submitting expense reports.
•
MECA Education Committee — There was discussion that MECA is working on setting up
meetings and training in the Flathead area.
The Board recessed for lunch at 12:02 p.m. and reconvened at 12:45 p.m.
Tod Young, John Goroski, Cheryl Talley, Mike Parrish, Stephanie Wallace, Dave Biggar, and
Frank Kauzlarich entered the meeting.
Doug reported on the Western Montana G&T meeting held October 15th.
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Duane reported on the Portland meetings held October 1' — 3rd.
Earl Messick, Emery Smith, Paul Holland, Alan Ruby, and Jay Downen plan on attending the
MECA Winter Meeting December 2nd — 3rd in Great Falls. Doug Grob tentatively plans on
attending.
No one is planning on attending the Mid-West Electric Consumer's Association Annual Meeting
December 8th — 11th in Denver, CO.
Doug Grob and Chris Byrd plan on attending the Portland meetings December 10th — ll th.
Earl Messick, Doug Grob, Alan Ruby, and Chris Byrd plan on attending the Western Montana
G&T meeting December 17th in Missoula. Jay Downen tentatively plans on attending.
It was moved by Paul Holland to approve all travel. The motion was seconded by Emery Smith
and upon being put to a vote was unanimously adopted.
With no further business to come before the Board, the meeting adjourned at 12:58 p.m.
ACCEPTED BY:
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FLATHEAD ELECTRIC COOPERATIVE, INC.
Minutes of Finance & Audit Committee
October 21, 2014
Committee members present: Emery Smith, Chairman; Duane Braaten, Doug Grob, Chris Byrd,
Earl Messick, Paul Holland and Alan Ruby. Jay Downen and Bruce Measure were absent. Also
present were: Mark Johnson, Tod Young, Stephanie Wallace, Jason Williams, Mike Parrish, John
Goroski, Wade Harris, Kevin Hodik and Suzanne Childers.
TOPIC
Call to Order
DISCUSSION
ACTION
Emery Smith called the meeting to
order at 9:01 a.m.
Tod
John Goroski and Wade Harris
No Committee action required.
presented the 2015 Sales, Revenue and
Cost of Power Forecast. 10-year average
weather is assumed in this forecast.
2015 kWh sales forecast shows a 0.3%
decrease, the revenue forecast shows a
0.2% increase and the cost of power
forecast shows a 0.7% increase. The
2015 revenue forecast assumes no
change to June 2014 retail rates. John
and Wade answered questions from the
Committee.
September 2014
Financial Statements
Tod Young reviewed the financial
statements for the period ending
September 30, 2014 and answered
questions from the Committee. Net
margins exceeded budget 105.6%
primarily due to a colder than normal
winter, no major outages, and vacant
positions that were budgeted but not yet
filled. Revenues were over budget 2.9%
and cost of power was over budget
3.1%.
It was moved by Earl Messick and
seconded by Doug Grob to
recommend to the Board to file for
audit the financial statements
dated September 30, 2014. The
motion was carried.
Disbursements over
$25,000.00
There were no questions.
No Committee action required.
Departmental “Budget
to Actual Reports”
Tod and Mark Johnson answered
No Committee action required.
questions regarding on the Departmental
Budget to Actual Reports.
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2014 Capital Credit
General Retirement
Tod recommended that Flathead Electric
continue to retire 1/20th or 5% of the
unretired patronage capital with the
intent of moving toward a 20-year
rotation sometime in the future. The
retirement would be in the amount of
approximately $2.8 million.
Loan Advance –
Forward Fix proposals
Kevin Hodik and Tod presented loan
proposals from CoBank and CFC in the
amount of $6 million to reflect the
reimbursement of general funds that
were used to fund the 2014 construction
plan. The proposals included
comparisons of obtaining the loan today
or forward fixing to December 10, 2014.
Bank Signatory Update
Tod presented a bank signature update.
With Dave Biggar retiring in January
2015, staff is being proactive in
changing the bank signatories now.
Implementation will be delayed until
December 2014.
It was moved by Earl Messick and
seconded by Doug Grob to
recommend to the Board to
update the Bank Signatories as
presented. The motion was
carried.
CFC Patronage Capital
Allocation and
Retirement
CFC allocated 2014 patronage capital of
$114,922.14 and retirement in the
amount of $57,461.07 to Flathead
Electric.
No Committee action required.
Quarterly Review
September 30, 2014
Tod presented the quarterly review
compiled of graphs and charts
comparing actual to budget and prior
year’s actuals. Tod answered questions
from the Committee.
No Committee action required.
There was discussion regarding
pursuing contractor bids for the Landfill
Gas-to-Energy Generating Facility. The
current contract with SCS will renew in
2015.
Adjournment
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With no further business, the meeting
adjourned at 11:30 a.m.
It was moved by Earl Messick and
seconded by Doug Grob to
recommend to the Board to
approve a capital credit general
retirement for 2014 of 5% of the
unretired patronage capital for an
approximate amount of $2.8
million. The motion was carried.
After considerable discussion by
the Committee, it was agreed to
advance a $6 million loan, today,
from CoBank.