MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OF COBB ELECTRIC MEMBERSHIP CORPORATION 1000 EMC PARKWAY MARIETTA, GEORGIA
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1 MINUTES OF REGULAR BOARD OF DIRECTORS MEETING OF COBB ELECTRIC MEMBERSHIP CORPORATION 1000 EMC PARKWAY MARIETTA, GEORGIA CALL TO ORDER Chairman Bryan Boyd called the meeting of the (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. Chairman Boyd recognized and congratulated Directors David Tennant and Malcolm Swanson who received their Director Gold certificate. Chairman Boyd thanked the directors for their commitment to continuing their education throughout their tenure on the board. INVOCATION AND PLEDGE Chip Nelson 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 Tenu ant Ed Crowell Kelly Bodner Malcolm Swanson Eric B. Broadwell Rudy Underwood Others in attendance were: Chip Nelson David Johnson Robert Steele Tim Sosebee Kevan Espy Jamey Hulsey Steve Paolucci Bob Schoonover
2 Minutes of Regular Board of Directors Meeting Page 3 of 9 March was reported at $2.1 million, which is $5.3 million favorable to budget. The net margin year-to-date was reported at $13.8 million, which is $8.6 million favorable to budget. The Balance Sheet as of the end of March is $896.4 million. The Committee received the Power Supply Update for the month of March 2016 by David Johnson, COO. The report included a recommendation for the Wholesale Power Cost Adjustment (WPA) to remain at 0.00 mils on member s bills rendered in May The Budget and Finance Committee presented to the Board a recommendation to approve the staff endorsed (WPA) of 0.00 mils starting May 1,2016. Chairman Boyd called for a vote on the motion from the Committee, there being no second necessary, the motion to approve the recommendation carried unanimously. Tim Sosebee, Vice President of Business Operations, presented to the Committee a report on write-offs for the month of March 2016 for $111,237. The Committee received a report from Tim Sosebee, Vice President of Business Operations, on the recent changes in work volume in the Member Care Center. Due to the decrease in volume, the staff is recommending Saturday operations he discontinued. David Johnson, COO. gave the Committee an extensive presentation on Cobb EMC s load forecast and its impact on Cobb EMC rates and competitiveness with other utilities. Chairman Boyd stated the financial reports have been reviewed and ready for submittal to the auditors. REPORTS FROM COMMITTEES Audit Committee Director Rudy Underwood, Chairman of the Audit Committee, stated the Committee met on April During the meeting, the Committee addressed the following topics: The Committee reviewed the internal audit of payroll and leave management processes and controls. Twenty-six different internal control components were tested in the audit, and internal audit identified six opportunities for improvement. Management immediately adopted two changes and agreed the other recommendations would be addressed. The Committee discussed the internal audit status report on pending management action on previous recommendations. Of the twenty-eight pending recommendations, only six are past due. The external auditors previewed Cobb EMC s annual financial audit procedures. The audit should be ready for the June Board Meeting. Public Affairs and Education Committee Director Kelly Bodner, Chairperson of the Public Affairs and Education Committee, stated the Committee met on April 14, 2016 and addressed the following topics: The Committee discussed the possible format for the upcoming annual meeting. Director Bodner will meet with Philip Hayden of the Credentials and Elections Committee to create an outline for candidates to speak at the annual meeting and present to the PAE Committee in a future meeting.
3 plans Minutes of Regular Board of Directors Meeting Page 4 of 9 The Committee discussed Cobb EMC s speaking engagements in the community and ways to continue outreach to the community. The Committee discussed the low attendance at the March 28, 2016 Town Hall Meeting. Even though attendance has been low for several meetings, the Committee agreed the meetings should continue as they still hold value and offer members a forum to speak to discuss their ideas and opinions. Old Business - scholarship applications are currently under review with six vocational scholarships received compared to only one last year. New Business are underway to organize a t-shirt contest for the annual meeting. The Committee discussed the Energy Efficiency Seminar held in April, where a member complimented Cobb EMC regarding the Smart Hub application. The member stated the application, in her opinion, surpasses what Georgia Power has to offer. The member suggested offering members additional education on their energy stack as Cobb EMC now offers the new Smart Choice Rate. Governance Conunittee Director Ed Crowell. Chairman of the Governance Committee, stated the Governance Committee met on April 18, 2016 and discussed potential board proposed bylaw changes to Section 2.12 and 6.13 of the Bylaws: as well as, proposed revisions to Policy 909. The Committee voted and recommended to the full Board for approval the following: Amend Policy 909: Corporate Committee Structure. as follows: - Add wording to clarify the definition of Part-Time employee under Section II-A2. This change is necessary in order to match the Affordable Care Act definition. The revised wording reads Part-time employees work less than 30 hours per week, on average. - Add wording to clarify under Section 11-C what is considered hours worked for overtime calculation. Employees are compensated at time and one-half for all hours worked in excess of forty (40) within any work week. Regular hours, holiday hours, bereavement leave, court services/jury duty leave and annual leave will be counted as hours worked. - Add wording to Section III. which assigns responsibility for the administration of this policy to the Vice President of Human Resources. Chairman Boyd called for a vote on the motion from the Committee to approve the changes to Policy 909, as presented. There being no second necessary, the motion to approve the Committee s recommendations carried unanimously. Mr. Crowell presented the following two board proposed bylaw changes noted in bold print and posted on the Company s website for two consecutive Board meetings, for consideration by the Board: Amend Article VI of the Bylaws (Non-Profit Cooperative, and Patronage Capital) by adding Section as follows:
4 Minutes of Regular Board of Directors Meeting Page 6 of 9 - Add 2/3 to the following statement, a vote of a 2/3 majority of the Members submitting a ballot - Add the following statement, Three Hundred (300) Members entitled to vote on the Bylaw amendnient - Remove the following statement, one-half of one percent (.5%) of the total number of Members as of January 1 in the year the proposed amendment is submitted Proposed Bylaw Amendment: SECTION Bylaw Amendments. These Bylaws may be amended by either: (i) the affirmative vote of a 2/3 majority of the Directors present and voting at the second (2nd) of two (2) consecutive director meetings at which the amendment is addressed, or (ii) by the affirmative vote of a 2/3 majority of the Members submitting a ballot. Amendments directly relating to the election of the Board of Directors, and changes to any Bylaw Section expressly so limiting amendment, may be adopted only by a majority vote of the Members submitting a ballot. (a) Sponsorship of Bylaw Amendments. The Board of Directors may sponsor or propose Bylaw amendments. Unless waived by the Board of Directors, a Bylaw amendment sponsored or proposed by Members must be: (1) sponsored and accompanied by a dated petition containing the printed names, addresses and original dated signatures of at least Three Hundred (300) Members entitled to vote on the Bylaw amendment one half of one percent (.5%) of the total number of Members as of January 1 in the year the proposed amendment is submitted (each page upon which one or more member signatures is affixed, shall also set forth the proposed Bylaw Amendment or a reason able and accurate synopsis thereof; Director Crowell stated that further discussion regarding the proposed amendment to Article X would continue if further input was provided by Directors: otherwise, the proposal would be considered for a vote by the full Board at the next regularly scheduled Board meeting. Affiliated Transactions Committee Director Eric Broadwell, Chairman of the Affiliated Transactions Committee, stated there was no cause for the committee to meet and, therefore, no report at this time. Enerv Portfolio Committee Director David Tennant, Chairman of the Energy Portfolio Committee, stated the Committee did not meet and there was no report at this time.
5 reviewed reviewed Minutes of Regular Board of Directors Meeting Page 7 of 9 Human Resource Committee Director Malcolm Swanson, Chairman of the Human Resource Committee, stated the Committee met on April 18, 2016 and discussed strategic planning goals. The Committee plans to meet again in June. APPROVE APPLICATIONS ANT) CANCELLATIONS OF MEMBERSHIPS Chip Nelson, President and CEO, presented the Applications and Cancellations of Memberships report, stating there were 1,899 activations and 1,639 cancellations, resulting in a net positive of 260 new members in the month of March. Net additions for the year total 700 and the member count as March 1, 2016 was 180,573. A motion by Director Crowell was made to approve the applications for new memberships and approve cancellations of memberships, as presented; seconded by Director Bodner. The motion carried unanimously. REVIEW SAFETY REPORT Jamey Hulsey, Senior Vice President of Electric Operations presented the March 2016 Board Safety Report. March 2016 Results March Safety Meetings - attendance remains at 100% for all departments. Preventable Vehicle Accidents - reviewed and compared annual totals for 2012 through 2016 with two preventable vehicle accidents occurring in Safety Violation Incidents reviewed and compared annual totals for 2012 through 2016 with three safety violations occurring in Recordable Injury Comparison and compared annual totals for 2012 through 2016 with two non-violation injuries and one violation injury occurring in Incident I DART Rate and compared annual totals for 2012 through Cobb EMC s Year to Date Cumulative Incident Rate was Goal 100 percent 98.9 percent was reached in March due to one violation injury, generating a daily success rate of 98.9 percent; there were 90 out of 91 days without a violation injury, and 6 days since the last violation injury. REPORT FROM PRESIDENT AND CEO Chip Nelson. President and CEO, announced the Home Owners Association Meeting would be held tonight. Monday. in the Community Room. Mr. Nelson encouraged all to attend. Mr. Nelson invited the Board to participate in the Tour of the Sandhills Solar Facility on June 1, 2016.
6 Minutes of Regular Board of Directors Meeting Page 8 of 9 MARKETING AND CORPORATE COMMUMCATIONS REPORT Kevan Espy, Vice President of Marketing and Corporate Communications, presented the March 2016 Marketing and Corporate Communications report. Mr. Espy reported on Cobb EMC s Cooperative Solar initiative launched November 1, The 2016 goal for blocks sold is and as of April 2016, 114 members have purchased 270 blocks on the program. Director Broadwe]l recommended conducting a survey regarding cooperative solar to investigate why our members are choosing to sign up for the program. Mr. Espy reported on Smart Choice accounts for March 2016, which totaled 742 active and 785 pending accounts for a total of 7,224 year to date. Mr. Espy reported on recent community activities stating he attended the Kennesaw Business Association (KBA) Luncheon and noted Cobb EMC was one of the sponsors fr the Northeast Cobb Community Egg Drop. Mr. Espy played an inspiring You Tube video announcing the winner of the Cobb EMC Energy Makeover, which began February 1, 2016 and ended March 31, Mr. Espy discussed the company s secured media highlights and stated Cobb EMC received positive feedback from a variety of media sources including, The Marietta Daily Journal, Atlanta Business Chronicle. Cobb Business Journal, and others. Mr. Espy reviewed unprompted nedia coverage for 2015 and 201, recent social media highlights from Facebook and Twitter, and Cobb EMC s social media engagement from January through March of Mr. Espy provided the Community Foundation Update and reported total distributions for April were $77,750. Mr. Espy presented the 2016 J.D. Power and Associates study results, which is the third wave of four produced during the year. Mr. Espy reviewed the 2016 Electric Residential Study Overview noting the new cooperative segment added to the study. Cobb EMC scored first place in this segment, which was the biggest advancement of all cooperatives in the study. Cobb EMC tied for sixth place at 55 percent for the highest communicating brands included in the study. Mr. Espy reported on Cobb EMC s customer satisfaction index trending by waves and noted Cobb EMC s score of 750 for January/February of 2016 was unprecedented. Cobb EMC s American Customer Satisfaction Index (ACSI) score for March 2016 was 87 for Online. 90 for Paper, and overall 88 for Survey. REPORT FROM GENERAL COUNSEL General Counsel, Kevin Moore, stated there was no report at this time and noted he had a legal matter to discuss during Executive Session. REPORT FROM DIRECTORS 1. Director Broadwell attended the Cobb EMC Director s Facilities Tour on Thursday, April 21, 2016 and enjoyed his time visiting with employees and learning more about the cooperative. 2. Chairman Tennant attended the 2016 NRECA Director s Conference in Austin, Texas and noted he enjoyed the speakers and the conference as a whole. On April 2, Director Tennant attended the Cobb EMC Director s Facilities Tour on Thursday, April 21, 2016.
7 Minutes of Regular Board of Directors Meeting Page 9 of 9 3. Director Crowell attended the 2016 CoBank Southeast Customer Meeting April 13, 2016 in Amelia Island, Florida. 4. Director Swanson attended the 40 Anniversary of the Women s Task Force Dinner on April 14, Director Bodner attended the Women s Task Force Dinner noting the group does so much for the community and created a beautiful quilt to auction off to raise money for charity. Director Bodner attended the Cobb EMC Director s Facilities Tour, and the solar panel ribbon cutting ceremony at the Cobb County Safety Village on April 22, Director Sharp attended the solar panel ribbon cutting ceremony at the Cobb County Safety Village and the 2016 NRECA Director s Conference in Austin, Texas. 7. Director McClellan attended the Women s Task Force Dinner and attended the Cobb EMC Director s Facilities Tour. OLD BUSINESS Chairman Boyd stated there was no old business at this time. NEW BUSINESS Chairman Boyd stated there was no new business at this time. EXECUTIVE SESSION Director Broadwell made a motion to enter Executive Session to discuss a legal matter; seconded by Director Tennant. The motion carried unanimously. The Directors went into Executive Session. Motion by Director Broadwell to exit Executive Session, seconded by Director McClellan, the motion carried unanimously. ADJOURNMENT There being no further business, Director McClellan made motion to adjou he meeting; seconded by Director Broadwell. The motion carried unan mously. V Malcolm Swanson Bryan yd Secretary/Treasurer Chairman
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