MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OF COBB ELECTRIC MEMBERSHIP CORPORATION 1000 EMC PARKWAY MARIETTA, GEORGIA

Transcription

1 MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OF COBB ELECTRIC MEMBERSHIP CORPORATION 1000 EMC PARKWAY MARIETTA, GEORGIA March 27,201$ CALL TO ORDER Chairman Tripper Sharp called the meeting of the Cobb Electric Membership Corporation (hereinafter Cobb EMC Board of Directors to order at approximately 4:00 p.m. The meeting was hetd in the Board Room of the Administrative Building. INVOCATION AND PLEDGE Ron Younker gave the invocation and led the pledge. IN ATTENIMNCE The following members of the Board of Directors were present: Bryan Boyd Tripper Sharp David McClellan David Tennant Ed Crowell Kelly Bodner Malcolm Swanson Eric B. Broadwell (telephonically) Rudy Underwood Others in attendance were: Peter Heintzelrnan Tim Sosebee Kevan Espy Jamey Hulsey Kristi Knight Bob Schoonover Leslie Thompson Jenny Carroll Ron Younker Tim Janell Perla De La Rosa

2 Minutes of Regular Board of Directors Meeting Page 2 of 11 March APPROVAL OF AGENDA Manish Mumdkar John Umphlett. Foundation Chairman Kimberly Stallworth, Member Guest Kevin Moore, General Counsel Director Boyd made a motion to approve the agenda, seconded by Director Crowell. The motion carried unanimously. SAFETY MESSAGE Manish Murudkar. Supervisor of System Protection and Relations, presented the Safety Message on taking care of your heart. Mr. Murudkar recommended seeing a physician for a yearly physical and stress test after the age of 40. During these tests, heart issues can be revealed which may otherwise go undetected. APPROVAL OF PREVIOUS MINUTES Chairman Sharp called for a vote to approve the minutes from the February 20, 2018 Board of Directors Meeting. Director Crowell seconded a motion made by Director McClellan to approve the minutes. The motion carried unanimously. RECOGMZE MEMBERS Chairman Sharp welcomed member guest and Foundation President. John Umphtett to the meeting. REPORT FROM BUDGET AND FINANCE COMMITTEE Director McClellan, Chairman of the Budget and Finance Committee, presented the report from the Budget and Finance Committee Meeting held on March 26, Director McClellan stated the Committee approved the minutes of the February Committee meeting. Kevin Greiner, President and CEO of Gas South, presented an update on Gas South s financial results as of February Gas South s net income for February was $3.1 million, which is unfavorable to budget by $1.9 million. The fiscal year-to-date net income is $10.3 million, which is $4.6 million unfavorable to the budget. The Committee received the Financial and Statistical Report for Cobb EMC for the month of February 2018 by Bob Schoonover. Interim CFO. The net margin for February was reported at $2.5 million, which is $1 million unfavorable to the budget. The calendar year-to date net margin is $10.6 million which is $200,000 unfavorable to budget. The Balance Sheet at the end of February is $927.8 million. AJe,nber Guest, Kimberly Staltworth, entered the meeting at this time.

3 Minutes of Regular Board of Directors Meeting Page 3 of ii Tim Sosebee. Senior Vice President of Business Operations presented to the Committee a report on write-offs for the month of February 201$ for $24,036. Mr. Schoonover discussed the Cooperative Finance Cooperation (CFC) Power Vision Loan Resolution. This resolution authorizes Cobb EMC to borrow from CFC an aggregate amount not to exceed $90 million and replace the current CFC debt facility commitments upon transaction close. The Committee recommended the approvai of this resolution. Chairman Sharp called for a vote on the motion from the Committee to approve the recommendation to approve the CFC Power Vision Loan and resolution, as presented. There being no second necessary. the motion to approve the Committee s recommendation carried unanimously. Mr. Schoonover offered an update to the Committee on the Shea Case Option 2 Payout for A total of $24,926 and will he paid in the August 2018 timeframe. Mr. Schoonover noted. because 2017 revenues totaling $12 million were allocated to members in 2016, and due to other non-recurring expenses recorded in 2017, there were no excess margins to allocate to members for Tim Jarrell. Associate Vice President of Power Supply, presented an update on Cobb EMC s Rate Study. Jason Strong of CFC presented Cobb EMC s Revenue Requirements Study results. Mr. Jarrell presented information on three proposals for the Enterprise Distribution System Restoration Plan. The report included a recommendation to proceed with Corus 360 s Statement of Work (SOW) to assist with the restoration plan. The Committee recommended the approval of Corus 360. Chairman Sharp called for a vote on the motion from the Committee to approve the recommendation to proceed with Corus 360 and their SOW. There being no second necessary. the motion to approve the Committee s recommendation carried unanimously. The Committee received a staff recommendation for the Wholesale Power Cost Adjustment (WPA) of zero mils on member s bills rendered in April 2018 from Mr. Jarrell. The Committee recommended the Wholesale Power Adjustment (WPA) be zero for the month of April The WPA will he reviewed monthly and adjusted if necessary. Chairman Sharp called for a vote on the motion from the Committee to approve the recommendation of a Wholesale Power Adjustment of zero mils starting April 1, 2018, with consideration thereof monthly. There being no second necessary, the motion to approve the Committee s recommendation, with consideration thereof monthly carried unanimously. Chairman Sharp stated the financial reports have been reviewed and are ready for submittal to the auditors. REPORTS FROM COMMITTEES Audit Committee Director Rudy Underwood, Chairman of the Audit Committee, stated the Committee did not meet in March. The Committee plans to meet next on April 6, Public Affairs and Education Committee Kelly Bodner. Chairman of the Public Affairs and Education Committee. stated the Committee met on March and discussed the following;

4 Minutes of Regular Board of Directors Meeting Page 4 of 11 HVAC Filter Program Cobb EMC plans to partner with Filter Easy to offer filter replacements to benefit members by; Reducing member s energy bill and potentially decreasing their heating and cooling costs by five to fifteen percent Preventing costly repairs to a member s heating and cooling system Improving our member s home air quality by removing harmful toxins Increasing convenience for members Providing the HVAC Filer Program for members will increase member satisfaction, and come at no cost to Cobb EMC. Additionally, Cobb EMC will receive $1 for the first filter shipped to members that purchase a filter. Demographic Information and Utilization Cobb EMC has partnered with Claritas to assist in the collection of member information, feedback and engagement information The Marketing Department will leverage data and member insights to better serve our members Collected data will allow the creation of marketing pieces that align with our member s communication preferences. This data could potentially save money when mailing bill inserts and other marketing materials Data will also help to identify members most likely to participate in surveys and other programs Social Media Communication and Yearly Objectives Cobb EMC s current Strategic Plan drives our objectives JD Power and ACSI Member Satisfaction results serve as built-in measurement for progress Targeted communications to audience segments on a channel level (based on member segmentation data). Cobb EMC will employ Push Digital to help facilitate social media interactions with members Washington Youth Tour Cobb EMC currently sends one scholarship recipient to participate in the tour at an approximate cost of $4,200. The Committee recommended sending up to four scholarship recipients to the Washington Youth Tour in 2018 to serve as Cobb EMC representatives. Chairman Sharp called for a vote on the motion from the Committee to approve send up to four students to Washington. There being no second necessary, the motion to approve the

5 Mm cites of Regular Board of Directors Meeting Page 5 of 11 Committee s recommendation carried unanimously. Other topics discussed by the Committee include reviewing scholarship applications received from the Community foundation, announcing the combined Home Owners Association and Town Hall Meeting on April 26, in the Pounds Auditorium, and electric vehicles and the installation of charging stations on the Cobb EMC campus. Governance Committee Director Ed Crowell. Chairman of the Governance Committee, stated the Committee met on March 12, The Committee recommended a revision to Policy 905, by deleting paragraph 7, II. A., which states, Employees who spend tess than the standard allowance for group insurance selection will receive the remaining money as taxable income in the weekly check. Chairman Sharp called for a vote on the motion from the Committee to delete paragraph 7, II. A of Policy 905. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously. The Committee recommended revisions to the Service Rules and Regulations regarding member s responsibly related to overhead and underground residential service connections and electric generators. The following new language is recommended for Section 201 A. Overhead Residential; The cooperative will furnish and install the overhead service conductors from its pole to the weatherhead and will make the connections between the cooperative s conductors and the member s conductors (coming out of the weatherhead). The member is responsible for suppling and installing the meter cabinet and ensuring it is maintained in accordance with the National Electrical Code, the cooperative s requirements, and any state or local laws, codes or ordinances. The following new language is recommended for Section 201 B. Underground Residential; The cooperative will furnish and install the underground service conductors from the transformer to the top connections in the meter cabinet. The member is responsible for suppling and installing the meter cabinet and ensuring it is maintained in accordance with the National Electrical Code. the cooperative s requirements, and any state or local laws, codes or ordinances. The following new language is recommended for Section 203 B. Electric Generators; Where auxiliary or standby service is installed by the member to provide emergency power, parallel operation of the member s generating

6 Minutes of Regular Board of Directors Meeting Page 6 of 11 equipment with the cooperative s system will not be allowed, except in cases of prior approval of the cooperative s Engineering Department. Any backup generator installation shall he wired in accordance with the specifications of the National Electric Code (NEC) and be permitted/inspected with the authority having jurisdiction. Such systems shall utilize transfer equipment that is suitable for the intended use and prevent power from being fed back into the main line that could result in injury to the public or cooperative workers. Chairman Sharp called for a vote on the motion from the Committee to approve the changes to Sections 201 A, 201 B and 203 B, as noted, to the Service Rules and Regulations. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously. Energy Portfolio Committee Director David Tennant, Chairman of the Energy Portfolio Committee, stated the Committee is scheduled to meet next on March 29, Human Resource Committee Director Swanson, Chairman of the Human Resource Committee, stated the Committee met on March 26, The Committee recommended approval of the CEO s request to select Carter Baldwin as the search firm for a Chief Financial Officer (CFO) for Cobb EMC. Chairman Sharp called for a vote on the motion from the Committee to approve Carter Baldwin as the search firm for a CFO. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously. The Committee discussed revisions to Policy 905 which included; 1. Changing the employee eligibility date for Group Benefit Plans from the first of the month following 60 days of employment to the first day of hire. 2. Providing approval to change the plan documents to allow participation in Employer Matching and Retirement Contributions in the Cobb EMC 401k plan from the first day of the calendar month following one year of eligible service to the first day of a payroll period following one calendar month of eligible service. This change will not require a modification to Policy 905, however an amendment to the plan will be required. The Committee recommended bypassing the Governance Committee s need to approve the recommended policy amendments. Chairman Sharp called for a vote on the motion from the Committee to bypass the Governance Committee, as stated. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously. The Committee recommended the approval of both policy updates, as presented. Chairman Sharp called for a vote on the motion from the Committee to approve the recommendation to grant Group Benefit Plans to employees upon the first day of hire and change the plan documents to allow participation in Employer Matching and Retirement Contributions in the Cobb EMC 401k plan to the first day of a payroll period following one calendar month of eligible service.

7 attendance displayed displayed Minutes of Regular Board of Directors Meeting Page 7 of 11 There being no second necessary. the motion to approve the Committee s recommendation carried unanimously. APPROVE APPLICATIONS ANI) CANCELLATIONS OF MEMBERSHIPS Peter Heintzelman. President and CEO. presented the Applications and Cancellations of Memberships report, stating there were 1,58 1 activations and 1,355 cancellations, resulting in 226 net new members in February. The member count as february 1, 2018 was Director Crowell made a motion to approve the applications for new memberships and approve cancellations of memberships. as presented, seconded by Director Tennant. The motion carried unanimously. REVIEW SAFETY REPORT Jamey Hulsey. Senior Vice President of Electric Operations, presented the February 2018 Board Safety Report. February 201$ Results February Safety Meetings - is 100% for all departments, which includes 70 make-ups. Preventable Vehicle Accidents - annual totals from 2014 through 2018 with two preventable vehicle accidents occurring in February 2018 with a total of three yearto-date. Safety Violation Incidents - annual totals from 2014 through 2018 with two safety violations occurring in February with a total of three year-to-date. Recordable Injury Incidents - displayed annual totals from 2014 through 2018 with three non-violations, and zero violation injuries occurring in February There have been three non-violation and zero violation injuries year-to-date. Incident / DART Rate (includes preventable and non-preventable injuries) - displayed annual totals from 2014 through Cobb EMC s year-to-date cumulative incident rate is 0.72 and the year-to-date dart rate is zero. Safety Goal for 2018 = 100 percent the 2018 daily success rate is 100 percent; 59 out of 59 days have passed without a violation injury; 1 87 days have passed since the last violation injury. Percentage of Safety Participation Yearly totals for safety participation in 2015 were 42.1 percent, 79.7 percent in 2016 and in Safety participation increased from percent in January to percent in February. Mr. Hulsey noted the cooperative is working ditigently to trend this number upward in 2018.

8 Minutes of Regular Board of Directors Meeting Page $ of 11 MARKETING AND CORPORATE COMMUMCATIONS REPORT Mr. Espy presented the February 2018 Marketing and Corporate Communications report and discussed the Cobb EMC App promotion. Since its inception in January of 201 7, the app has been downloaded times. During the 30th Anniversary of the NRECA s Spotlight on Excellence National Awards Program. Cobb EMC won an award for the Most Innovative Use of Digital Communication. The NRECA s Silver Award was given to Brooke Melton. Leslie Thompson and Angela Croce Mr. Espy announced several upcoming events hosted by Cobb EMC. On April 21, 2018, Cobb EMC will sponsor an Earth Day Recycling Event from 8 a.m. to 1:00 p.m. at 1260 Cobb Parkway, North. Marietta, Georgia. On April 26, Cobb EMC will host a Homeowner s Association Meeting at 6:30 p.m. in the Pounds Auditorium. John Umphlett, Foundation Chairman, provided the Community Foundation quarterly update and reported total distributions for March 2018 totaled $99,300. Mr. Umphlett stated thousands of applications were received during the quarter and scrutinized by an efficient and fully-staffed team of foundation volunteers. Mr. Umphlett thanked the Board and staff for their continued support of the program. REPORT FROM PRESIDENT AND CEO Peter Heintzel man. President and CEO, reported on the following; First impressions of Cobb EMC and employees A committed, passionate workforce and leadership team is in place A dedication to the core mission exists throughout the cooperative A strong culture of safety is in place Employees are full of creative ideas and energy Employees are ready to focus on the future A positive reputational trajectory is in place for the company Opportunities exist to innovate processes and practices, and get the best out of the organization through management, are engaged at every level Opportunities abound for increased connection to our members and the community General goals accomplished during first two weeks Completed introductions to senior staff, employees and certain key relationships Attended safety-specific meetings Visited Gas South for introductions to employees and to attend an orientation for Gas South s Management Committee Meeting (MCOM) Scheduled a community leader engagement meet-and-greet to be held on April 11, Plan to meet our community leaders and to convey our priorities and begin immediate engagement Beginning public relations work with members and employees to focus on key messages: - Building on momentum - Focusing on employees and an energizing environment - Looking ahead to the future

9 Minutes of Regular Board of Directors Meeting Page 9 of 11 Workforce goals accomplished during the first two weeks Employee engagement and communications Announced monthly Town Hall Meetings. The first meeting is scheduled for Thursday, March 29, 2018 Attended 6:30 a.m. stretching and made introductions to Cobb EMC lineman Senior Staff Engagement Organized a half day meeting with Senior Staff to formulate structure around new idea processing and project management methodology Scheduled weekly one-on-one meetings with senior managers for the year Planned a one-day management strategy session for Tuesday, April 3, 2018 Made interim appointments to fully mitigate COO departure Focused on creating a vision and a cohesive strategy and providing the management team and leadership to execute ellectively Executive search consultant identified for CFO search REPORT FROM GENERAL COUNSEL General Counsel, Kevin Moore. discussed and reviewed Policy 601 with the Board satisfying the requirement for annual review. Policy 601 addresses director duties, responsibilities, standards of conduct, and professional development. The Board signed the policy attestation to signify receipt and understanding of the policy. REPORT FROM DIRECTORS Director Boyd attended the NRECA Annual Meeting in February. Director Tennant attended the Joint Meeting of Members of OPC/GTC/GSOC-Smarr Green Power on March 26, Mr. Tennant serves as the cooperative representative for OPC. GTC, and GSOC. Director Crowell plans to attend the Washington Legislative Conference in April. Director Swanson noted a member contacted him for information on our upcoming recycle day. The member did attempt to call Cobb EMC to ask for this information, but had difficulty bypassing the voice response unit. Mr. Sosebee was able to assist the member with her request. Director Bodner attended the Cobb County Science Olympiad at Walton High School sponsored in part by Cobb EMC. Director Bodner stated the event was a great success and she appreciated the continued support from Cobb EMC towards this worthwhile event. Director Bodner also attended the Pounds Auditorium dedication ceremony and Chip Nelson s retirement party. Director McClellan commented he was excited about Cobb EMC s future and the plans Mr. Heintzelman has in store for the cooperative, because he was also excited about Chip Nelson s achievements. Director Broadwell had a distressed member call him to discuss turning his power back on after a disconnect. Mr. Sosehee worked with the member to rectify the situation.

10 Minutes of Regular Board of Directors Meeting Page 10 of ii Director Broadwell stated he was currently attending an NRECA Director s Conference in Las Vegas, Nevada. OLD BUSINESS Chairman Sharp stated there was no old business at this time. NEW BUSINESS Resolutions for Smarr, Green Power, and OPCIGTCIGSOC Member and Alternate Member Representatives Chairman Sharp called for a vote to replace Chip Nelson with Peter Heintzelman on the resolutions for Smarr, Green Power, and OPC/GTC/GSOC in order for the President and CEO to serve in this capacity as a member or alternate member representative for the organizations. Director Crowell made a motion to approve the changes to the resolutions, seconded by Director McClellan. The motion carried unanimously. Gas South Third Amendment to LLC Agreement Chairman Sharp called for a vote to approve revisions to the Gas South Third Amendment to the LLC Agreement Article 7 and Schedule 2. Director Underwood asked for clarification on the agreement and the Board reviewed in detail. The following new language is recommended for Article 7 Management Committee Governance; Within thirty (30) days after the annual election of the Class A Member board of directors, its chair shall appoint no fewer than five (5) Representatives to the Management Committee, one (1) of whom shall be the CEO of the Class A Member and one (1) of whom shall be the CEO of the Company, provided no more than four (4) of whom may be members of the Class A Member board of directors. The chair of the Class A Member board of directors may remove or replace any or all Representatives, other than the CEO of the Class A Member and the CEO of the Company, in said chair s sole discretion. The composition of the Management Committee as of the Effective Date is set forth in Schedule 2. Each Representative serving on the Management Committee shall serve in such capacity until his successor or replacement shall have been appointed by the chair of the Class A Member, or until his removal in accordance with this Article 7, voluntary resignation, death or disability, as applicable. The Chairman of the Management Committee shall be elected by a majority of the Representatives and is limited to three (3) consecutive full one (1) year terms as Chairman of the Management Committee.

11 Class Minutes of Regular Board of Directors Meeting Page 11 of 11 The following new language is recommended for Schedule 2 - Tripper Sharp Ed Crowell Bryan Boyd David McClellan Kevin A. Greiner Company CEO Peter Heintzelman A Member CEO management committee members; Chairman Sharp called for a vote to approve the Gas South Third Amendment to LLC Agreement, as presented. Director Boyd made a motion to approve the agenda. seconded by Director Tennant. The motion carried unanimously. Business s Mr. Sosebee stated all future correspondence sent to and from Board members should be sent from their Cobb EMC addresses only. EXECUTIVE SESSION Director Boyd made a motion to enter Executive Session to discuss a personnel matter; seconded by Director Tennant. The motion carried unanimously. The Directors took a short recess then entered Executive Session. Motion by Director Boyd to exit Executive Session, seconded by Director McClellan. the motion carried unanimously. ADJOIJRNMENT There being no further business. Director McClellan made a motion to adjourn the meeting; seconded by Director Boyd. The motion carried unanimously. Bryan B yd Secretary/Treasurer Tripper Sharp Chairman