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 CALL TO ORDER Chairman David McClellan 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 held in the Board Room of the Administrative Building. INVOCATION AND PLEDGE Ron Younker gave the invocation and led the pledge. IN ATTENDANCE The following members of the Board of Directors were present: Bryan Boyd Tripper Sharp David McClellan David Tennant Kelly Bodner Malcolm Swanson Eric B. Broadwell Rudy Underwood Ed Crowell Others in attendance were: Peter Heintzelman, CEO Brett Stovern, CFO Tim Sosebee Kristi Knight Mark Goddard Tim Jarrell Ron Younker Leslie Thompson Jenny Carroll Perla De La Rosa Andy Gramling Nataly Hart

2 Minutes of Regular Board of Directors Meeting Page 2 of 10 Mary R. Miller, Member Guest Harriet Peacock, Member Guest John P. Thompson, Member Guest Kevin Moore, General Counsel APPROVAL OF AGENDA Director Crowell made a motion to approve the agenda, seconded by Director Bodner. The motion carried unanimously. SAFETY MESSAGE Nataly Hart, Internal Auditor, delivered the Safety Message on Super Bowl Celebration Safety and offered the following tips; If hosting a party and serving alcohol, ensure guests have a designated driver or have arranged for a taxi or Uber to transport them home safety Ensure TV is mounted and secured safely to protect guests Don t overload electrical sockets If grilling, have a fire extinguisher handy Avoid leaving food out for extended periods of time (no longer than two hours) Keep pets away from garbage and away from crowds as pets can sometimes become agitated when exposed to crowded and loud settings APPROVAL OF PREVIOUS MINUTES Chairman McClellan called for a vote to approve the minutes from the December 18, 2018 Board of Directors Meeting. Director Broadwell seconded a motion made by Director Tennant to approve the minutes. The motion carried unanimously. RECOGNIZE MEMBERS Chairman McClellan welcomed member guests Mary R. Miller, Harriet Peacock, and John P. Thompson, to the meeting. REPORT FROM BUDGET AND FINANCE COMMITTEE Director Underwood, Chairman of the Budget and Finance Committee, presented the report from the Budget and Finance Committee Meeting held on January 28, Director Underwood stated the Committee approved the minutes of the December 17, 2018 Committee meeting. Kevin Greiner, President and CEO of Gas South, presented an update on Gas South s financial results as of December Gas South s net income for December was reported at $4.6 million, which is $1 million unfavorable to budget. For the fiscal year-todate, Gas South s net income is $5.5 million which is $1 million favorable to the budget.

3 Minutes of Regular Board of Directors Meeting Page 3 of 10 The Committee received the Financial and Statistical Report for Cobb EMC for the month of December 2018 by Brett Stovern, Chief Financial Officer. The net margin for December was reported at a loss of $8.9 million which is $12.5 million unfavorable to the budget but included $6.5 million of amounts that were and will be given back to members in December of 2018 and January of The calendar year-to-date net margin is $36 million which is $1.7 million favorable to budget. Mr. Stovern also presented the 2017 to 2019 Income Statement comparing the 2017 and 2018 actuals and 2019 budget results. Tim Sosebee, Senior VP of Business Operations, presented to the Committee a report on write-offs for the month of December 2018 for $18,936. In New Business, Committee Chairman Underwood stated that the Capital Credits policy would be further reviewed by a Finance Sub-Committee which included Committee Chairman Underwood, and Directors Boyd, McClellan, Tennant and Swanson. Tim Jarrell, Vice President of Power Supply, reported on the Power Cost Update for the month of December. The Committee received a staff recommendation for the Wholesale Power Cost Adjustment (WPA) of zero mils on member s bills rendered in February The Committee recommended the Wholesale Power Adjustment (WPA) of zero mils for the month of February The WPA will be reviewed monthly and adjusted if necessary. Chairman McClellan called for a vote on the motion from the Committee to approve the recommendation of a Wholesale Power Adjustment of zero mils starting February 1, 2019, with consideration thereof monthly. There being no second necessary, the motion to approve the Committee s recommendation, with consideration thereof monthly carried unanimously. Committee Chairman stated $4.6 million was returned to members in December of 2018 and $2.1 million in January of Chairman McClellan stated the financial reports have been reviewed and are ready for submittal to the auditors. REPORTS FROM COMMITTEES Audit Committee Director Broadwell, Chairman of the Audit Committee, stated the Committee met January 23, 2019 and discussed the following; Received a review of the 2018 year-end, the fourth quarter report and the Capital Credit process report from Kristi Knight, Vice President of Internal Audit and Compliance Approved the list of recipients for the External Auditor Request for Proposal (RFP). The final list is available for the Board to review upon request Discussed upcoming equity increase due to unbilled revenue and accumulated other comprehensive income (OCI) increase Requested an update on the materiality threshold from the external auditors Public Affairs and Education Committee Director Swanson, Chairman of the Public Affairs and Education Committee, stated the Committee did not meet and he had nothing to report.

4 Minutes of Regular Board of Directors Meeting Page 4 of 10 Governance Committee Director Ed Crowell, Chairman of the Governance Committee, stated the Committee met January 15, 2019 and discussed the following; Policy 618: Capital Credits Director Crowell reviewed the newly drafted Capital Credits Policy 618 outlined as follows; The Cooperative shall allocate and retire capital credits in a manner that: (1) is consistent with operating on a cooperative basis under state and federal law; (2) is consistent with the Cooperative s bylaws, section 6.2 through 6.12; (3) is fair and reasonable to the Cooperative s patrons and former patrons; (4) provides the Cooperative with sufficient equity and capital to operate effectively and efficiently; (5) protects the Cooperative s financial condition and all restrictions imposed by its debt financing covenants. Subject to law, the Cooperative s articles of incorporation, and the Cooperative s bylaws, the allocation and retirement of capital credits are at the sole discretion of the Cooperative s Board of Directors ( Board ). The Expectations of the policy incorporate: -Board Approval -Patronage Earning Allocations -Patronage Loss Allocations -Nonpatronage Earning Allocations -Nonpatronage Loss Allocations -General Capital Credits Retirements -Special Capital Credit retirements -Discounted Special Capital Credits Retirements -Recoupment Limitations of the policy include: -Forfeiture of Capital Credits -Patron Classes -Separate Allocations and Retirements -Notice of Allocation -Adverse Financial Impact -Request and Agreement for Special Retirement. -Discount Rate -Minimum Amount. -Payment and Notice of Retirement -Unclaimed Capital Credits Responsibility of the policy include: -Implementation of Policy -Recommendations to Board -Review and Approval by Board -Compliance with Policy Director Crowell stated the Committee worked with Staff and Internal Auditors to create the policy and provided a red-lined copy to the Board for discussion and review prior to the Board Meeting. Discussion was held regarding Section III, G. Special Capital Credits. The Board agreed to review this section further, but to proceed with the vote to adopt the policy. Chairman McClellan called for a vote on the motion from the Committee to adopt Policy 618 with further review of Section III, G. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously.

5 Minutes of Regular Board of Directors Meeting Page 5 of 10 Director Crowell reviewed the proposed updates to Service Rules and Regulations: Statement of Nondiscrimination Kristi Knight noted on page 21 a specific name of an employee should not be listed. The suggested change would read, Head of the Human Resources Department. This update would give flexibility in the event of a title change of said department head The title page of the statement currently lists all updates; the last date is mislabeled as August 27, 2018 and should read March 27, 2018 On page 22, the current hours of operation for the Corporate Office and Drive Through should be updated to 8:00 a.m. to 5:00 p.m. Also, the telephone number for the cooperative is currently labeled emergency number and should be removed Section 104 Service Security Deposits - Tim Sosebee suggested adding the following language to section G, The cooperative may offer that the member be billed under the prepay program in lieu of a deposit Section 105 Service Extension Permanent Establishments - Removing of language which reads, or any other establishment of permanent nature Single Phase and Third Phase - A member or developer currently pays a contribution in aid of construction to offset the cost of installing and maintaining overhead service. In some instances, the member or developer decides not to build, making the contributions nonrefundable. Staff recommended adding language which allows for funds to be returned at Cobb EMC s discretion. The additional language would read, Cobb EMC in its sole discretion may return contributions for projects not yet commenced. This update is recommended for both Overhead Service Extension and Underground Service Extension Section 202 General Wiring Requirements The work Indemnification should be added to the title per Federated Insurance recommendation as well as the word death Chairman McClellan called for a vote on the motion from the Committee to approve revisions to the Service Rules and Regulations, as presented. 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 did not meet and plans to meet next on February 5, Human Resource Committee Director Bodner, Chairperson of the Human Resource Committee, stated the Committee met on January 17, 2019 and with all members of the Board during executive session on January 25, 2019.

6 Minutes of Regular Board of Directors Meeting Page 6 of 10 Chairman McClellan called for a vote on the motion from the Committee to approve the P results and the final score card. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously. Chairman McClellan called for a vote on the motion from the Committee to approve the P Goals, as presented. There being no second necessary, the motion to approve the Committee s recommendation carried unanimously. The Board commended Staff on the hard work and effort put forth on both initiatives. A discussion was held regarding implementing a step versus a prorated method for P3 in Chairman McClellan called for a vote on the motion from the Committee to approve the step method for P3 in There being no second necessary, the motion to approve the Committee s recommendation carried unanimously with Director Underwood abstaining. Chairman McClellan called for a vote on the motion from the Committee to approve a new Charter of the Administrative Committee. The Committee will initially include Brett Stovern, CFO, Peter Heintzelman President and CEO, and Ron Younker, Vice President of Human Resources. The Charter sets forth the mission, jurisdiction, authority, composition, and responsibilities of the Administrative Committee of the Cobb EMC 401(k) Plan, Cobb EMC Retirement Medical Plans, and the Cobb EMC Retirement Plan. The Committee will meet quarterly then offer a report to the Board twice a year. There being no second necessary, the motion to approve the Charter, as presented, carried unanimously. Director Bodner stated she had a personnel matter to discuss during Executive Session. APPROVE APPLICATIONS AND CANCELLATIONS OF MEMBERSHIPS Peter Heintzelman presented the Applications and Cancellations of Memberships report, stating there were 1,508 activations and 1,370 cancellations, resulting in 138 net new members in December. The member count year to date is 1,633 and the total member count as of January 1, 2019 was 184,907. Director Broadwell made a motion to approve the applications for new memberships and approve cancellations of memberships, seconded by Director Boyd. The motion carried unanimously. REVIEW SAFETY REPORT Andy Gramling, Director of Safety, presented the December 2018 Board Safety Report. December 2018 Results December Safety Meetings - attendance is 100% for all departments, which includes zero make-ups Preventable Vehicle Accidents - displayed annual totals from 2014 through 2018 with one preventable vehicle accident occurring in December 2018 with a total of eleven yearto-date Safety Violation Incidents - displayed annual totals from 2014 through 2018 with two safety violations occurring in December 2018 with a total of twenty-three year-to-date.

7 Minutes of Regular Board of Directors Meeting Page 7 of 10 Recordable Injury Incidents - displayed annual totals from 2014 through 2018 with one non-violation, and zero violations injuries occurring in December There have been ten non-violation and zero violation injuries year-to-date Incident / Days Away, Restricted, or Transferred (DART) Rate (includes preventable and non-preventable injuries) - displayed annual totals from 2014 through Cobb EMC s year-to-date cumulative incident rate is 2.44 and the year-to-date DART rate is 1.22 Safety Goal for 2018 = 100 percent the 2018 daily success rate is 100 percent; 365 out of 365 days have passed without a violation injury; 493 days have passed since the last violation injury Percentage of Safety Participation and 2018 Assessment Yearly totals for safety participation in 2015 were 42.1 percent, 79.7 percent in 2016 and in The year-to-date Safety participation total for 2018 is 100 percent. Mr. Gramling announced the 2018 Outstanding Safety Award winner, Mr. Johnny Rainer. Mr. Gramling reviewed violations from 2008 to present noting the total score of 23 in 2018 was the second lowest since In 2018, there were eleven Preventable Vehicle Accidents (PVA) with employees/infrastructure and zero with outside parties; this is the first time in ten years a zero was achieved. For 2018, the Incident Rate (IR) was 2.44, the third lowest in ten years and the DART rate was 1.22 the second lowest in ten years Safety Initiatives Mr. Gramling reviewed the Safety Department s Initiatives to reduce accidents, injuries and violations in MARKETING AND CORPORATE COMMUNICATIONS REPORT Mark Goddard, Interim Head of Marketing and Corporate Communications, presented the December 2018 Marketing and Corporate Communications report. Mr. Goddard discussed the Electric Vehicle (EV) initiative. Currently 205 members are on the NiteFlex Rate. Of the 205 members, 82 members own an electric vehicle and 8 own two or more EVs. Mr. Goddard reviewed the EV web page ( analytics from December 1 to December 31, Mr. Goddard offered fourth quarter (Q4) media reports for 2018 noting secured media coverage resulted in 98.2 million impressions. If Cobb EMC purchased the editorial secured in paid advertising, the amount would equate to $212,500. For Media Tone, no negative media coverage was received in the fourth quarter. Mr. Goddard reported on the Q4 Social Media Report noting total followers increased by 3.6 and the number of engagements increased by percent since the previous date range. Messages sent volume increased by 16.1 percent and messages received volume increased by 67.6 percent since the previous date range. In 2019, 46 mini-grants were awarded to local elementary, middle and high school teachers totaling $20,963. Mr. Goddard reviewed 2019 planning and reported Foundation distributions for January totaled $53,200.

8 Minutes of Regular Board of Directors Meeting Page 8 of 10 REPORT FROM PRESIDENT AND CEO Peter Heintzelman, President and CEO presented Bryan Boyd with his Director Gold renewal certificate and offered a presentation on activity for December of 2018 and January 2019: Financial and Operational Performance Finished a strong financial year for members with WPA rebate successfully issued and well communicated to members Continuing to find efficiencies to keep costs down Improved procurement/contracting processes resulting in increased savings and additional contractors to ensure competitive tension Record P3 result achieved stretch goals in nearly all categories Rates Rolled out additional lifestyle rate for members Fixed Rate ; Increased EvenBill subscriptions substantially with new promotion Innovation/Trusted Energy Advisor Launched the Cobb EMC smart home/ev-ready/fiber-ready developer initiative Received recognition across the EMC, Solar and Customer Service industry for innovation. The cooperative is continually asked to share ideas through speaking engagements Ongoing due diligence of Pay as You Save (PAYS) program HR and Employee Engagement Launched postings and began search for VP Human Resources and VP Marketing due to moves and planned retirements and retained search for Director of Procurement Delivered three Town Hall Meetings with Heart of Leadership messaging Hosted a fun Holiday celebration for employees after a great year with high morale Revised Performance Review process completed Held ten to fifteen-person departmental Q and A meetings with outstanding employee connection Wellness Program launched successfully Retiree benefit changeover implemented Community Engagement and Public Relations Produced our most successful videos on record on social media Served as panel speaker at NRECA s CEO Closeup and delivered a message on Big Data/Member segmentation data and EV innovation Began service on Cobb Chamber Board, Executive Committee, and Chair of the International Committee Began service on Board of Boy Scouts of America Toured SafePath facilities Featured Speaker for the Northeast Cobb Business Association

9 Minutes of Regular Board of Directors Meeting Page 9 of Vision The CEO s total Vision is made up of a commitment to: 1. The three-year strategy approved by the board, the revised Mission and Vision and Our Way statements 2. Transition into a performance culture within which is one of Atlanta s best places to work 3. Constant communication of our reliability, rates, innovation, successes and improvements 4. Analysis and preparation for the rapidly-changing landscape of EMCs 5. Ensuring the right leadership is in place to achieve our goals Our Vision Become the energy industry benchmark through innovation that exceeds member and community expectations. Mr. Heintzelman reviewed the Strategic Plan and the five pillars it contains REPORT FROM GENERAL COUNSEL General Counsel, Kevin Moore, stated he had nothing to report. REPORT FROM DIRECTORS Director Swanson attended the Northeast Cobb Business Association Luncheon and commented that Mr. Heintzelman did an excellent job as the key note speaker Director Bodner recognized Staff for their hard work on the P3 initiative and thanked Tim Sosebee, Senior VP of Business Operations for his help with a member who needed assistance Director Underwood noted he had a productive conversation with a member regarding the PAYS program Director Sharp discussed the NiteFlex rate program with several members and received a suggestion from a member on t-shirt distribution for the next Annual Meeting. Director Sharp also attended the Cobb Chamber Eggs and Issues event OLD BUSINESS Chairman McClellan stated there was no old business to discuss. NEW BUSINESS Tim Jarrell, VP of Power Supply, Cobb EMC, discussed the Federal Energy Regulatory Commission (FERC). Cobb EMC is regulated as a public utility by FERC because we make wholesale sales of electric power. These principally occur under the RSA with Southern Power. Cobb EMC has a market-based tariff on file with FERC to authorize these sales. As a matter of compliance, Officers and Directors are required to submit a statement of interlocking positions.

10 Minutes of Regular Board of Directors Meeting Page 10 of 10 Mr. Jarrell asked all Officers and Directors to complete an Interlocking Officer and Director Questionnaire from our FERC attorney, Dan Frank of Eversheds Sutherland. The forms must be completed by February 8, 2019 and submitted to FERC to remain in compliance. EXECUTIVE SESSION Director Broadwell made a motion to enter Executive Session to discuss a personnel matter; seconded by Director Tennant. The motion carried unanimously. Motion by Director Sharp to exit Executive Session, seconded by Director Swanson, the motion carried unanimously. ADJOURNMENT There being no further business, Director Sharp made a motion to adjourn the meeting; seconded by Director Swanson. The motion carried unanimously. Rudy Underwood Secretary/Treasurer David McClellan Chairman