|
Vermont Electric Cooperative, Inc.
REGULAR MEETING OF THE BOARD OF DIRECTORS
January 26, 2010
APPROVED MINUTES
As required under the VEC By-Laws, notice of this meeting was sent to each Director by deposit in U.S. mail on January 20, 2010.
CALL TO ORDER - AGENDA ITEM # 1
President Thomas Bailey called the meeting to order at 12:03 p.m. in the Robert P. Northrop Boardroom at VEC offices in Johnson, Vermont. Present were Directors Dorothy Allard, Dan Carswell, Michelle DaVia, Craig Kneeland, Bertrand Lague, Howard Leighton, Priscilla Matten, John Miller, Daniel Parsons, John Ward, John Westie. Also present from VEC were CEO David Hallquist, CFO Mike Bursell, COO Jeffery Wright, Manager of Corporate Services Elizabeth Gamache and Manager of Communications Kathryn Kantorski. Mark Woodward joined the meeting at 12:09 p.m. Parliamentarian Randy Pratt was absent.
MINUTES OF DECEMBER 29, 2009 REGULAR MONTHLY MEETING APPROVED –AGENDA ITEM #2
Lague moved and Miller seconded:
That the minutes of the December 29, 2009 meeting be approved as presented.
The motion carried unanimously and the minutes were approved as amended.
FINANCIAL UPDATE – AGENDA ITEM #3
CFO Bursell started by handing out to Directors a copy of VEC’s portfolio by source and fuel, which was previously reviewed with the Power Supply and Operations Committee. Bursell and those present then engaged in a discussion of the Financial Update included in the Board packet which was distributed to all Directors prior to the meeting.
Soft close of 2009 Financials
CFO Bursell explained to Directors that in December VEC completes a pre-closing of the financials referred to as a soft close. The soft close carries 95% of the transactions impacting income for 2009 however; more entries are expected before the year is finalized, which should be complete by the first week of February.
School Street
VEC is expecting to close on the School Street property on Thursday, January 28th. The entries associated with the sale of the building are included in the soft close numbers for December.
Fitch Ratings:
On Thursday January 14th Fitch Ratings announced an upgrade to VEC’s financial rating. VEC was upgraded to a Triple B (BBB) rating with an outlook of stable. This puts VEC in the mid-level of investment graded companies.
Capital Spending:
As projected, capital spending was over budget this year by almost $1.4M largely due to the Comcast project in the Islands. Directors asked several questions in regards to the over spending in the capital budget. CEO Hallquist told the Board that there will be a report on corrective action measures on the Capital Budget in the Annual Meeting Agenda. CFO Bursell told Directors that a large part of the 2010 capital budget is contingent on the NEK Connector grant. CEO Hallquist indicated that VEC will know whether VEC has been awarded the grant by the next Board meeting.
President Bailey made a recommendation to the Board that the Finance Committee discuss at their next meeting how VEC can control some of these Capital costs.
To conclude the financial update, CFO Bursell reminded Directors that since this is the end of a quarter there are additional quarterly reports included in Director’s Board Packets.
Hallquist left the meeting at 1:47 p.m. and returned at 1:50 p.m.
APPOINT ASSISTANT SECRETARY & ASSISTANT TREASURER - ITEM #4
Gamache left the meeting at 1:53 p.m. and returned at 1:56 p.m.
CFO Bursell proposed to Directors that for efficiency purposes more management staff should be allowed to sign documents and indentures. It was proposed that instead of redoing the indenture and incurring additional costs that two of VEC’s senior manager’s be named as Assistant Treasurer (Michael Bursell) and Assistant Secretary (Randy Pratt).
Miller moved and Lague seconded the following motions:
That Michael Bursell be, and hereby is, appointed Assistant Treasurer of the Company, empowered with the powers and duties of the Treasurer under the Bylaws of the Company and authorized to act in such capacity as directed by the Board of Directors of the Company; and
That John Randall Pratt be, and hereby is, appointed Assistant Secretary of the Company, empowered with the powers and duties of the Secretary under the Bylaws of the Company and authorized to act in such capacity as directed by the Board of Directors of the Company.
Discussion ensued regarding the motions. The concern is that Directors want to be sure that these proposed motions do not conflict with State Law on Cooperatives. President Bailey recommended that the item be tabled until further legal opinion is obtained.
Miller withdrew the motion and Lague withdrew the second.
Motions for Appointment of Assistant Treasurer and Assistant Secretary will be included in the February agenda for the Board of Director Meeting.
President Bailey called for a short break in the proceedings at 1:09 p.m.
The meeting resumed in the Robert P. Northrop Boardroom at 1:17 p.m.
NORTH-LINK EDA – AGENDA #5
CEO Hallquist reviewed with the Board the history of the North Link project to date. Currently the EDA has a high level of confidence in VEC and would like VEC to take over the project in its entirety meaning the Coop would build and maintain the system, not just provide a management contract. Hallquist asked the Board how important it is in their view that VEC take on this project. The “customers” in this case would be companies such as Sovernet and Teljet not the end user. The $6M grant has a $2M match requirement which Sovernet and Teljet have committed to providing. Hallquist told Directors that he believes if VEC chooses not to proceed with the North Link project it will not affect the NEK Connector project grant money.
Directors had an opportunity to express their views on whether VEC should proceed with the North Link project. Some Directors were in favor of the project because they see direct benefit to some VEC members; others were not in favor of proceeding with the project without seeing a complete business plan.
Wright left the meeting at 1:23 pm. and returned at 1:31 p.m.
Hallquist explained that prior to devoting time to producing a business plan he would want a directive from the Board that VEC should precede with the project.
Lague moved and Miller seconded:
That the Board not support VEC management to proceed with the North Link project.
Discussion ensued. The issue discussed was the internal time and expense of creating a business plan.
Lague withdrew his motion and Miller withdrew his second.
DaVia moved and Westie seconded:
That management investigate state, federal or private organizations to fund a business plan for a broadband backbone providing company showing the profitability and viability.
The motion carried unanimously.
Bursell left the meeting at 2:21 p.m. and did not return.
President Bailey called for a short break in the proceedings at 2:21 p.m.
The meeting resumed in the Robert P. Northrop Boardroom at 2:35 p.m.
Manager of Regulatory and Planning Engineer Harry Abendroth and Construction Manager Doug Haselton joined the meeting at 2:35 p.m. for the Operations Performance update.
OPERATIONS PERFORMANCE – AGENDA #6
COO Wright introduced two of his staff members Doug Haselton and Harry Abendroth. Wright presented to the Board the operations performance measures of the last twelve months compared to prior years. The report shows tremendous improvement in system performance in 2009. Directors had an opportunity to ask questions of Wright, Haselton and Abendroth.
DaVia left the meeting at 3:05 p.m. and returned at 3:08 p.m.
REVIEW 2009 CEO GOALS – AGENDA #7
President Bailey referred Directors to CEO Hallquist’s goals which were previously mailed in the Board packets. Bailey asked Directors to review the goals along with the CEO’s comments and over the next two weeks provide their feedback on the forms provided to each Director and submit them to Human Resources. Manager of Corporate Services Liz Gamache reviewed the additional paperwork handed out during the meeting and gave further instructions for completing the forms.
EXECUTIVE SESSION – AGENDA #8
President Bailey requested that the executive session to discuss any questions or concerns with the CEO’s goals be postponed until the February meeting.
MANAGERS’ REPORTS - #9
CEO asked and received approval of the Board to take a scheduled vacation from 3/29/2010 through 4/14/2010.
Copley Hospital
Hallquist took a few moments to explain to the Board why he has been investigating co-generation projects outside of VEC territory, most specifically the Copley Hospital co-generation project. Hallquist explained that he has only attended one two hour meeting where he had an opportunity to express VEC’s interest in a purchase power contract from this project.
Bailey left the meeting at 3:20 p.m. and returned at 3:22 p.m.
Steel Tower Project
Wright told Directors that VEC is ready to start the Steel Tower Project however, VEC has not received permit from the Army Corps of Engineering. The earliest date that VEC could have a permit is February 16th. Timing is critical because the project scope has provisions that VEC must follow winter construction in wetland areas. Wright told the Board that there is an 11 acre parcel of land near 105, West of Island Pond in question because originally the landowner was willing to take an easement and now wants VEC to buy the property. If the landowner doesn’t accept VEC’s offer to pay for a conservation easement then VEC may have to buy other land to be able to proceed. This may require a Special Board Meeting Teleconference.
SQRP
Gamache reported to Directors that the SQRP results on Lost Time Severity and Lost Time Incidents for previous year were not met. VEC did meet all other measures and exceeded in SAFI and CADI as previously reported in Wright’s presentation.
BOARD ANNUAL CALENDAR – AGENDA ITEM #10
Hallquist reviewed with Directors the Board annual calendar for 2010 which was previously mailed with the Board packets. He pointed out that May and December are open months in case Directors have anything they would like to see added to the calendar.
COMMITTEE REPORTS – AGENDA ITEM #11
Governance Committee
Chairperson DaVia referred to Policies B.3, B.4, B.6, B.7, B.8, B.9, B.11 that were reviewed at December’s meeting which include input received during that meeting. DaVia told Directors that Board Policy B.5, which was also reviewed at the December meeting is not included in the packet because CFO Bursell would like to present a system for submitting for compensation. Directors then reviewed the suggested edits passed out by Director Leighton.
Gamache left the meeting at 3:49 p.m. and returned at 3:55 p.m.
Hallquist left the meeting at 3:50 p.m. and returned at 3:52 p.m.
DaVia asked if any Directors had any further comments or questions on the policies as presented.
DaVia moved and Ward seconded:
That the Board approve the Governance Committee’s recommendation for Board Policy B4; B6; B7; B8; B9; B11 as revised at the January 26, 2010 Board meeting; and that the Policies may be corrected for typos, spelling and formatting.
The motion carried by unanimous vote.
Executive Committee:
President Bailey told the Board that there was an Executive Committee meeting on Tuesday, January 19th and the committee meeting notes were passed out in today’s Board of Directors meeting for their review.
DaVia moved and Miller seconded:
To enter Executive Session to discuss the CEO Appraisal issued from the Executive Committee meeting of January 19, 2010.
The motion carried unanimously.
The Board entered Executive Session at 3:58 p.m.
Exit Executive Session.
By majority vote of those Directors present, the Executive Session ended at 4:20 p.m.
OTHER BUSINESS-AGENDA ITEM # 12
There was no other business.
ADJOURN – AGENDA ITEM # 13
There being no further business before the meeting,
Miller moved and Lague seconded that:
The meeting be adjourned.
No discussion was forthcoming and the motioned carried unanimously.
The meeting adjourned at 4:21 p.m.
Respectfully submitted:
_______________________ _____________________
Michelle DaVia, Secretary and Thomas Bailey, President
Signed minutes (PDF)
|
