Board Meeting Minutes

VERMONT ELECTRIC COOPERATIVE, INC.
REGULAR MEETING OF THE BOARD OF DIRECTORS
MAY 28, 2019
APPROVED MINUTES

CALL TO ORDER – AGENDA ITEM #1
President Rich Goggin called the meeting to order at 12:00 p.m. in the Robert P. Northrop Boardroom at VEC offices in Johnson, Vermont.  Present were Directors Ken Hoeppner, Carol Maroni (Second Vice President), Mark Woodward (Secretary) George Lague, Charlie Van Winkle, Don Worth, Paul Lambert (First Vice President), Rich Westman, Tom Bailey, and Jody Dunklee.  Also present from VEC was CEO Rebecca Towne, General Counsel Vickie Brown, Chief Financial Officer Mike Bursell, Safety & Security Manager John Varney, and Manager of Government Affairs and Member Relations Andrea Cohen. 
No members were present.

SAFETY DRILL – AGENDA ITEM #3
Varney provided a reminder to check for ticks as they are very prevalent this year.  He provided a tick removal tool.  A director noted that there is a place where you can send in ticks for testing for Lyme disease.  The best practice if you are bit is to treat for Lyme right away.

Maroni moved and Worth seconded to go into executive session to discuss the contents of the minutes. A director raised a concern that a discussion of the contents of the minutes was not an appropriate topic for an executive session. 
A vote was taken and the motion passed with one nay.
The Board entered executive session at 12:07 pm. 
VEC staff, except for the CEO, left the meeting.
By unanimous consent, the Board exited executive session at approximately 12:40 pm. 
Staff re-joined the meeting.

APPROVE 4/29/19 REGULAR BOARD MEETING MINUTES AND 5/11/19 ORGANIZATIONAL MEETING MINUTES – AGENDA ITEM #4
President Goggin asked if there were any additions or corrections to the minutes of the regular monthly Board of Directors meeting held on April 29, 2019. 
Woodward moved and VanWinkle seconded to approve the minutes of the April Board meeting.
There was a suggestion to add a clarification to note that the changes to the Form 990 discussed at the meeting were made at the recommendation of the auditors.
Discussion ensued. 
There was also a suggestion to clarify that the total budget for the Newport warehouse project was $2 million to provide context for the discussion of possible changes to the budget.
The minutes, with these two changes, were approved by unanimous vote.

President Goggin asked if there were any additions or corrections to the minutes of the Organizational meeting held on May 11, 2019. 
Westman moved and Hoeppner seconded to approve the minutes of the Board organizational meeting. 
There was no discussion, and the minutes were approved by unanimous vote.        

FINANCE COMMITTEE RECOMMENDATIONS RE PATRONAGE CAPITAL AND EQUITY MANAGEMENT PLAN – AGENDA ITEM #5
Ward noted that the Finance Committee had met during the morning and reviewed VEC’s Equity Management Plan and its Financial Forecast in depth with CFO Bursell.  Ward noted that the Committee recommended that the VEC Board authorize management to implement a total patronage retirement of $1.2 million in 2019 to be spread $950,000 (79%) to 1997 retirement and $250,000 to 2018 retirement.
Ward moved and VanWinkle seconded to approve that recommendation.  The motion passed by unanimous vote.

Ward further noted that the Committee also recommended that the Board approve the VEC Equity Management Plan included in the Board packet.
Ward moved and Lague seconded to approve that recommendation. 
The motion passed by unanimous vote.

BOARD COMMITTEE ASSIGNMENTS – AGENDA ITEM #6
Goggin noted that committee responsibilities were raised at the organizational meeting and that the discussion was deferred to a future meeting.  In the meantime, the consensus was to keep the committee structure the same until those further discussions.

There was a break in the meeting at 1:05 p.m.
The meeting resumed at 1:15 p.m.

STRATEGIC PLANNING  - 2020 CORE COMPETENCIES AND KEY FOCUS AREAS – AGENDA ITEM #7
Amanda Zay joined the meeting.  Zay noted that the purpose of today’s session is for the Board to begin to develop the key focus areas which staff will use to develop the annual strategies, action plans and key performance indices for 2020.  After reviewing the 2019 key focus areas, considering recent strategic discussions from the Board, and their understanding of the direction of the utility business, the senior leadership team has drafted key focus area for Board review and discussion.  Zay walked through each of the proposed key focus areas, which are as follows:

Key Focus Area #1 – Amplify our nimble, innovative culture through high employee engagement and leadership at all levels consistent with our core values
Key Focus Area # 2 – Pursue excellence in our core business functions
Key Focus Area # 3 – Enhance the electric grid and infrastructure to maximize benefits to members and communities
Key Focus Area # 4 – Expand our energy transformation program to best serve members and increase the benefit of our low-carbon electricity
Key Focus Area # 5 – Enhance services by understanding member needs through data and member engagement

There were questions, discussion and suggestions about each area.  Zay noted that these would be shared with staff as they do their detailed planning exercise.   
Woodward moved and Westman seconded to approve the five key focus areas as presented.  The motion passed with unanimous vote.
Zay left the meeting.

Goggin noted that there was interest in hearing from the directors who attended the recent NEAEC meeting as to what they learned.  The directors reported these key learnings:

  • AT&T is paying pole attachment fees to expand their cell network.
  • The NRECA youth program is interesting, particularly the program to send young people to Washington, D.C. There may be matching money available, and partnering with another co-op may make this more affordable.
  • A safety speaker suggested videos from Federated Insurance re: best practices in safety.
  • There is interest in doing a feasibility study as to broadband, perhaps jointly with WEC. VW funds are available; if co-ops can get funding in the range of 80%, broadband might be feasible from an economic perspective.
  • Re EV adoption, it was interesting to hear how strategies change based on the industry is in the technology adoption process. Also learned that CFC has an electric vehicle expert who is potentially available to us.
  • The equity presentation was very useful.
  • Governance videos are available from the NRECA and perhaps the Board should review these and discuss.
  • It was good to get to know other directors and co-op folks in the northeast who share similar challenges, especially WEC.
  • The consensus was that the NEAEC meeting overall was very useful – both for providing good content and an opportunity to build relationships.

MEMBER OUTREACH – REVIEW ANNUAL MEMBER SURVEY QUESTIONS – AGENDA ITEM #8
Jake Brown, Energy Services Planner, and Adriana Eldridge, a VEC summer intern, joined the meeting.
Cohen gave a presentation as to the questions that staff has prepared for this year’s member survey.  She noted that the survey is good for getting general feedback from members as to service and policy preferences but not great to use for a more detailed market analysis, for example to explore the feasibility of broadband.  Because many of the questions are required by our state-approved Service Quality and Reliability Plan, the number of discretionary questions we can ask limits how deep we can go on any given topic.
There were questions, discussion and feedback about some of the specific questions which will be included in the survey. 
Cohen noted that the survey data will be available in July.
Jake Brown and Eldridge left the meeting.

MANAGERS’ REPORTS – AGENDA ITEM #9
Lague moved and Worth seconded to go into executive session to discuss a new contractual relationship.   The Board entered into executive session at 3:15.
By unanimous consent, the Board exited executive session at 3:32.
Bursell asked for authority to have two VEC staff officers have their facsimile signatures on all VEC checks instead of having the facsimile signature of the Board President and Treasurer on all checks. 
Hoeppner moved and Ward seconded to change the signatures on VEC’s checks to be those of the CEO and the CFO.
There were several questions about how the process would work.
The motion passed by unanimous vote.

Varney reported that the formerly contaminated soil piles in Newport have been removed from the site and disposed of.  He also noted that we are in final stages of completing an agreement for the Newport warehouse construction.
Brown noted that our comments filed in the net metering rule making proceeding attempted to limit net metering to projects under 150kW and to remove the “preferred site” designation for projects located in the SHEI.
There were some questions about the resolution of the pending union grievances.
Cohen reported that her group is planning seven community meetings where Rebecca will meet with members in various locations.  This is in addition to community events such as farmer’s markets and energy committees. 
Lisa will provide information to Board members about the Lacing Up for Cancer event. 
Cohen also reported on some of the outcomes of the legislative session. She will provide a written wrap up in the next Board packet.  

ANY OTHER BUSINESS – AGENDA ITEM #10
Goggin noted that the Burlington Free Press featured the GMP Tesla power wall program.

VanWinkle noted that a member had expressed his concern about the installation of AT&T equipment on our poles with respect to radio frequency emissions.  Towne said that staff is preparing talking points for Board members so they can field requests from members.  She noted that our most recent indication from AT&T is that they have no current plans to build out in our system.

Maroni moved that VEC apply for a grant for a broadband feasibility study.  Worth seconded.  There was discussion as to the scope of the study and the cost.  Towne suggested that we gather further information about the grant process and at the same time express our interest in being a participant.  Discussion ensued. 

Hoeppner moved to table this motion until the June Board meeting and allow management to get further information about the process, etc. for the Board to consider.  Ward seconded.  Discussion ensued.  The motion passed by unanimous vote.  The consensus was that management would research the process for participating in the state grant including reaching out to WEC.     

A director asked about the status of the parking lot, including the research being conducted by Towne as to Board compensation.  Towne indicated that that topic will be addressed at the next Governance Committee meeting.  There was a consensus to revive the parking lot to capture “to-do” items. 

Towne provided details about the June offsite meeting. 

ADJOURN – AGENDA ITEM #11
There being no further business before the meeting,
Lague moved and Worth seconded:
That the meeting be adjourned.
The motion carried unanimously.
The meeting adjourned at 5:43 p.m.