MINUTES OF THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF UNITED POWER, INC. FRIDAY, MAY 16, 2014 GENERAL President Douglas Pryce called the regular meeting of the United Power Board of Directors to order at 9:01 a.m. on May 16, 2014. The meeting was held at the United Power Headquarters Building, 500 Cooperative Way, Brighton, Colorado. Present were Directors Bill Berens, Virginia Buczek, Tim Erickson, Beth Martin, Brian McCormick, Ursula Morgan, Rick Newman, Douglas Pryce, Dave Rose and James Vigesaa. Chief Executive Officer Ron Asche and Executive Assistant to the Board Michele Sack were also present. Director Grant was absent. Others present for the meeting were staff members Dean Hubbuck, Kim Marsh, John Parker, Mitzi Rea, Bryant Robbins, Antelia Salazar-Ball, Myke Weis, and Troy Whitmore. Director Berens gave the invocation and led in the Pledge of Allegiance. INVOCATION/PLEDGE AGENDA APPROVED A motion was made by Director Buczek, seconded and carried to approve the Agenda as presented. INTRODUCTION OF NEW EMPLOYEES Dean Hubbuck introduced Jared Odom as a new employee of United Power working in the Engineering/Rates department. Antelia Salazar Ball announced Ana Barraza as a new part-time employee of United Power working in the Ft. Lupton Office in the Member Services Department. CONSENT AGENDA MINUTES The April 16, 2014 Annual Meeting Minutes and the April 18, 2014 Regular Board Meeting Minutes were included in the Board packet for review. Director Berens made a motion to approve the minutes. The motion was seconded and passed, approving the April 16, 2014 Annual Meeting Minutes and the April 18, 2014 Regular Board Meeting Minutes as presented. FINANCING OPTIONS ON CONVERSION OF CFC LOAN CEO Ron Asche and CFO John Parker discussed alternative financing options on the conversion of a CFC loan. The financing options range from converting the 7.2% fixed rate loan to (1) a variable rate, which is currently 2.9%, (2) a 14 year fixed rate of 5.05%, or (3) a combination of variable and fixed rate options. Information on this item was included in the board packet for review. Following review and discussion, a motion was made by Director Vigesaa, seconded and passed to accept staff recommendation to move the $9.018 million CFC loan from a 7.2% interest fixed rate loan to a variable interest rate loan. Director Berens voted against this motion.
PATRONAGE CAPITAL RETIREMENT CFO John Parker discussed the proposed retirement of $4.5 million in patronage capital. Information on the patronage capital retirement proposal was included in the board packet for review. John also discussed the process when capital credit retirements are unclaimed. Following review and discussion, a motion was made by Director Martin, seconded and carried to adopt the following Resolution Authorizing Retirement of Patronage Capital. RESOLUTION AUTHORIZING RETIREMENT OF PATRONAGE CAPITAL WHEREAS, it is the goal and stated policy of United Power, Inc., to make general retirements of patronage capital each year; and WHEREAS, all lender and mortgage covenants were satisfied in 2013; and WHEREAS, the Board of Directors has determined that the financial condition of United will not be impaired by a general retirement of patronage capital furnished by patrons. NOW, THEREFORE, BE IT RESOLVED, that a FIFO retirement of $371,989, representing the year of 1986-1988, that a general retirement of $3,826,320, and that total retirement authorized is $4,500,000 to be distributed to all patrons by the retirement method as described in Policy C-18, Patronage Capital; and BE IT FURTHER RESOLVED that special retirements to estate and other departed members be limited to a total of $300,000 (after discounts). - - - - - - - - - - - - 2015 ANNUAL MEETING DATE/PLACE External Affairs Director Troy Whitmore discussed his memo, which was included in the Board packet for review, on the proposed schedule and location for the 2015 United Power Annual Meeting. Mr. Whitmore stated that they had tentatively reserved the Adams County Fairgrounds Waymire Dome and Exhibit Hall for the date of April 15, 2015. Following review and discussion, a motion was made by Director Buczek, second and carried to adopt the following Resolution Approving 2015 Annual Meeting Date and Location. 2
RESOLUTION SETTING 2015 ANNUAL MEETING OF MEMBERS DATE WHEREAS, Article 3.00 of United s Bylaws provides the Annual Meeting of Members shall be held before May 1 each year on a date and place fixed by the Board within the Cooperative s service territory; and WHEREAS, Colorado statutes and United Power s bylaws require at least a six-month notification of the Cooperative s Annual Meeting to the membership; and WHEREAS, United Power is desirous of holding a successful 76 th Annual Meeting of Members. NOW, THEREFORE, BE IT RESOLVED, that the 2015 Annual Meeting of Members of United Power, Inc., shall be held at 6:30 p.m. on Wednesday, April 15, 2015 at the Waymire Dome and Exhibit Hall at the Adams County Fairgrounds. - - - - - - - - - - - - AUTHORIZE VOTE OF SHARES IN CSA DIRECTION ELECTION CEO Ron Asche discussed the Vote of Shares to be held during the Consumer Services Association Annual Meeting of Shareholders to be held immediately following the Board meeting. Following review and discussion, a motion was made by Director McCormick, second and carried to adopt the following the Resolution Authorizing Vote of Shares in Election of Directors for CSA s Annual Meeting of Shareholders. RESOLUTION AUTHORIZING VOTE OF SHARES IN ELECTION OF DIRECTORS FOR CSA S ANNUAL MEETING OF SHAREHOLDERS WHEREAS, the annual meeting of shareholders of Consumer Services Association, Inc. will be held in the near future; and WHEREAS, the principal purpose of said annual meeting is to elect directors, accept reports, and transact such other business as may properly come before the meeting; and WHEREAS, United Power, Inc. ( United ), is the sole shareholder of Consumer Services Association, Inc. NOW, THEREFORE, BE IT RESOLVED, that United Power, Inc. vote all of its shares to elect the following directors to the Consumer Services Association Board: 3
1. Bill Berens 7. Ursula J. Morgan 2. Virginia Buczek 8. Richard E. Newman 3. Tim Erickson 9. Douglas R. Pryce 4. Robert S. Grant 10. Dave Rose 5. Elizabeth Martin 11. James Vigesaa 6. Brian A. McCormick BE IT FURTHER RESOLVED, that the President and the Secretary-Treasurer of United Power, Inc. are authorized and directed to take all steps necessary to effectuate said vote, including the execution of any necessary documents on behalf of United Power, Inc. EXECUTIVE SESSION - - - - - - - - - - - - Director Vigesaa made a motion that the Board go into Executive Session to discuss personnel issues. The motion was seconded and carried unanimously. The Board went into Executive session at 10:20 a.m. Attending the Executive Session were CEO Ron Asche, Directors Berens, Buczek, Erickson, Martin, McCormick, Morgan, Newman, Pryce, Rose, and Vigesaa. The Executive Session ended at 10:25 a.m. and the Board went back into regular session with all Directors present. At 10:25 a.m. the Board recessed for break. The Board reconvened at 10:40 a.m. CEO REPORT CEO Asche reviewed his May 7, 2014 written report which was a handout at the Board meeting. CEO Asche discussed the safety report and a recent meeting he, Dean Hubbuck and Troy Whitmore had with the Frederick Town Manager and the Town s consultants regarding United Power s New Town Frederick service territory. CEO Asche also noted that he, Director Buczek, Troy Whitmore and Tom Green attended the Thornton City Council meeting to review United Power s services, franchise fees and system expansions in the franchised territory served by United Power. The Mayor and City Council expressed their thanks for United Power s presence and support. Several staff members, CEO Asche and Director Buczek also visited the Frederick/Firestone Fire District to discuss the possibility of using their Emergency Operations Center (EOC) as an emergency backup facility for United Power. Further discussions with the Fire District will be held on possible use of their EOC facilities. 4
FINANCIAL REPORT CFO John Parker reviewed his May 7, 2014 written report and the Financial Report for period ending April 30, 2014. He also discussed the Form 7 financial report comparing the current figures to this same time last year. ENERGY OUTREACH Representatives from Energy Outreach Colorado made a presentation to the Board on the services this organization provides to low income households. Energy Outreach Colorado is a non-profit entity that raises funds to provide financial assistance to Coloradans in the payment of home energy bills. United Power contributed $18,000 to this organization in 2013. At 12:00 noon the Board recessed for lunch. The Board meeting reconvened at 12:58 p.m. EXTERNAL AFFAIRS REPORT External Affairs Director Troy Whitmore reviewed his May 7, 2014 written report which was included in the Board packet for review. Mr. Whitmore discussed the Annual Meeting attendance and the voter breakdown by membership years, District office and Board district. He reported that United Power was host to Tri-State on April 30 th for 10 of their newest employees. United Power staff provided the group with briefings about the operation of a distribution cooperative and a tour of our facilities. Mr. Whitmore announced that United Power has won two Spotlight on Excellence Awards this year. The first award was for best graphic design for the Powering through the Flood of 2013 logo. United Power s United Newsline tied with Union Power in North Carolina for best external publication award. He also briefly discussed Senate Bill 202 and House Bill 1397. Mr. Whitmore noted that United Power has received an overall member satisfaction score of 84 for the 1 st quarter of 2014 on its American Customer Satisfaction Index (ACSI). A more detailed ACSI report will be provided at a future meeting. ENGINEERING/RATES DEPT. REPORT Engineering-Rates Manager Dean Hubbuck reviewed his May 7, 2014 written report which was included in the Board packet for review. He discussed the 69kv sub-transmission line project that staff is preparing to bid in May. This line will be used to serve expanding oil and gas loads in Southwest Weld County. Mr. Hubbuck reported that the BluBox oil well flare gas capture and electric generation project completion schedule with Tri-State has been extended from 12 months to 18 months in our contract with Tri-State from May 1, 2014 to November 1, 2014. Mr. Hubbuck also noted that a 3 rd phase with SOL Partners solar project is also being studied. 5
DIRECTOR MEETINGS/CONFERENCES Director Erickson noted that he attended the Town of Mead Board of Trustee meeting along with CEO Asche, Troy Whitmore and Bill Meier. The Town was complimentary of United Power and the service we provide. Rick Newman along with several Board Members and staff attended the recent ACED Awards Luncheon. Director Newman stated the luncheon speaker s presentation on the history of technology advances and how the sharing of that knowledge impacted the world economy was excellent. Several Directors attended the Legislative Rally held in Washington D.C. May 4-7, 2014. All had positive comments about being able to meet with the Senators and members of the House of Representatives from Colorado face to face this year to discuss current issues and concerns. TRI-STATE REPORT Director Newman reviewed his written Tri-State Board Report for April 2014 and addressed board questions. At 2:33 p.m. the Board recessed for break. The Board reconvened at 2:44 p.m. CREA REPORT Director Morgan reported on the Colorado Rural Electric Association Board meeting and addressed board questions. WUE REPORT Director McCormick reported on Western United Electric (WUE) and addressed Board questions. TOPICS OF DISCUSSION The Directors discussed Board Compensation. Following review and discussion, a motion was made by Director Vigesaa and seconded to adjust the per diem from $400 to $500 per board meeting to reflect the change in consumer price index for the past 10 years. After discussion, the Board President declared this motion out of order. Director Berens left the Board room. 6
TOPICS OF DISCUSSION (cont.) Upon further review and discussion, a motion was made by Director Vigesaa, seconded and passed to raise the Director per diem from $400 to $500 for all board meetings and that the per diem for all other meetings be set at $500 if the meeting is 4 hours or more and $250 if the meeting is less than 4 hours, with such revised per diems to be effective in June 2014. The motion passed 4-3 with Director s Buczek, Martin and Morgan opposing. Director Newman abstained. Director Berens returned to the Board room. A motion was made by Director Buczek, seconded and passed that the annual cap for Director s expenses be adjusted annually by an amount equivalent to the annual change in the cost price index (CPI-U) beginning in 2015. Director Erickson opposed. Director Morgan and Director Newman abstained. The Board discussed topics for the Strategic Planning Session scheduled for September 11 th and 12 th. Possible topics of discussion for the session included: risk assessment, merger options, load growth and the impact on the organization, power supply, fiber and the use of other assets in communities, member engagement/contact/communications, and distributed generation and microgrids. President Pryce asked that staff have brief outlines of these topics available at the June 2014 Board meeting for further discussion. ROUND-UP FOUNDATION The Round-Up Foundation December Meeting Minutes, Update and Year-to-Date Summary by Director District were included in the Board packet for review and discussion. WRITTEN REPORTS The following written reports were included in the Board packet for review and discussion. Absences and Regular Hours Worked New Memberships by District Report on Collection Activities MEETING SCHEDULE The next Regular Board Meeting is scheduled for Friday, June 20, 2014 at 9:00 a.m. at the Brighton Headquarters Office, 500 Cooperative Way, Brighton, Colorado. 7
ADJOURNMENT President Pryce declared the meeting adjourned at 4:32 p.m. Michele Sack, Recording Secretary 8