Board Meeting Minutes

VERMONT ELECTRIC COOPERATIVE, INC.
REGULAR MEETING OF THE BOARD OF DIRECTORS
May 30, 2017

As required under the VEC Bylaws, notice of this meeting was sent to each Director
via US Mail on May 23, 2017

CALL TO ORDER – AGENDA ITEM #1
President Dan Carswell 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 Rich Goggin, Ken Hoeppner, Carol Maroni (Second Vice President), John Ward (Treasurer), Rich Westman, Mark Woodward (Secretary), Tom Bailey, Michelle DaVia, George Lague, Paul Lambert, and Don Worth.
Also present from VEC was CEO Christine Hallquist, Safety & Security Manager John Varney, Chief Operating Officer Peter Rossi, Manager of Government Affairs and Member Relations Andrea Cohen, Chief Financial Officer Mike Bursell, and General Counsel Vickie Brown.

REVIEW BOARD OPERATING NORMS – AGENDA ITEM #2
By unanimous consent, the Board went into executive session to discuss Board operating norms. VEC staff (including Hallquist) left the room.
By unanimous consent the executive session ended at 12:45.
VEC staff re-joined the meeting.

OTHER BUSINESS – AGENDA ITEM #11
This agenda item was moved forward.
DaVia noted that she had submitted a written motion, on behalf of three directors, that Paul Lambert be removed as director of conflict of interest following the completion of the process set forth in the bylaw Article IV, Section 4(a).
Maroni seconded the motion.
A discussion ensued as to whether the motion is to remove or to commence a process whereby a committee investigates and makes a recommendation. It was pointed out that the bylaws state that removal is permitted for a director “who is found to be in violation of” Policy B.3 or B.13.
Ward observed, as a point of order, that the motion to remove is premature at this time. Maroni withdrew her second to the motion.
It was noted that there is no process in the bylaws stating how the Board should make a finding that a director has violated the policy in the bylaws that is sufficient enough to warrant removal.
Extensive discussion ensued as to the appropriate way to address the allegations of conflict of interest.
The consensus of the Board was to commence the process set forth in Board Policy B.4 (Director Conflict of Interest) for investigating an allegation of conflict of interest.
Lambert stated that he does not believe that he has a conflict but would not object to the implementation of the process in Policy B.4. By agreement of the Board, Carswell appointed a committee of Woodward, Westman and Worth, noting that they are authorized to use the legal resources needed to conduct their investigation.

SAFETY DRILL – AGENDA ITEM #3
Varney passed out sunscreen to Board members with a reminder to use it diligently now that summer has arrived.

APPROVAL OF MINUTES – AGENDA ITEM #4
President Carswell asked if there were any additions or corrections to the minutes of the regular monthly Board of Directors meeting held on April 24, 2017.
Bailey moved and Lague seconded:
That the minutes of the regular monthly Board of Directors meeting held on April 24, 2017 be approved.
The motion carried by unanimous vote and the minutes were approved as presented.
Bailey moved and Worth seconded:
That the minutes of the Board Organizational meeting held on May 6, 2017 be approved.
The motion carried by unanimous vote and the minutes were approved as presented.

COMMITTEE APPOINTMENTS – AGENDA ITEM #5
Carswell noted that Board Policy B.11 calls for the Chair to reappoint committee members on an annual basis. Maroni requested that Hoeppner be added to Communications Committee in replacement of Molly Lambert. Other than that, the general consensus was to keep committee assignments in place; however Carswell invited directors to let him know if they wanted to change committees and he would accommodate those requests. Discussion ensued as to the appropriate number of members on each committee.

Maroni moved and DaVia seconded to amend Policy B.11, Section II.E to state that “[e]ach committee will consist of a chairperson and no more than four five director members.”

The motion carried by unanimous vote.

Maroni moved and Woodward seconded to change one of the functions of the Communications Committee from “review the content of external media” to “suggest and advise on topics for external communications.”

The motion carried by unanimous vote.

STRATEGIC PLANNING –AGENDA ITEM #7
VEC management staff Sally Lumbra, Cyril Brunner, Amanda Zay, Lisa Morris and Kris Smith joined the meeting.
Hallquist noted that draft key focus areas were included in the packet for the Board’s review. These were prepared by management staff. She further noted that once staff receives the Board input on the core competencies and key focus areas, then staff will take that to an offsite planning session to develop key performance indicators and strategies for 2018.

A director stated that the proposed key focus areas were very good, but expressed concern that the staff was getting ahead of the Board in the process. Hallquist noted that she considers this an iterative process. The Board had previously indicated that it wants input from management to gain benefit of staff’s expertise.

Zay explained the work done by staff in preparation for this meeting, noting that there was a brainstorming session to review VEC’s vision and mission and develop key focus areas for 2017. She noted that staff reviewed core competencies, which she defined as the areas that VEC needs to be really good at to execute the mission and vision. Since the vision and mission have not changed, staff did not recommend changes to core competencies.

Discussion ensued about the relationship of core competencies to key focus areas.

Zay continued her presentation of the five key focus areas that staff has suggested for 2018.

Extensive discussion ensued about the strategic planning process, the Board’s role in that process and whether there should be a longer-range time frame for the Board to be looking at. Carswell noted that the Board has already planned to revisit the mission and vision in spring of 2018.

Zay noted that the Board will give final sign off to the core competencies and key focus areas in June.

Maroni moved that the Board set aside a four-hour block of time for a fuller discussion of strategic planning. Goggin seconded. Discussion ensued about how useful it would be for the Board to do that now before we have heard from experts who are scheduled to address the Board in the coming months. The motion passed by unanimous vote, and the meeting was set for Thursday June 8, 1:00 to 5:00 at VEC.

SHEI INTERFACE – AGENDA ITEM #8
Bursell gave a presentation of the problems that the distribution utilities are currently facing in most of its system because excess generation above load in the area exceeds the export capacity of the grid that serves that area. These grid constraints have resulted in higher market prices for power and curtailment of generation resources such as Kingdom Community Wind and Sheffield Wind. Staff is working with other utilities, VELCO and the Department of Public Service to develop engineering and regulatory options to address the problem.
Discussion ensued to understand the issue and discuss possible solutions.

EFFICIENCY VERMONT – AGENDA ITEM #9
This agenda item was deferred due to time constraints.

CEO SUMMARY AND MANAGER REPORTS – AGENDA ITEM #10
This agenda item was deferred due to time constraints.

COMMITTEE REPORTS AND ANY OTHER BUSINESS – AGENDA ITEM #11
Ward noted that the Finance Committee met earlier in the day and made two recommendations for the Board to consider. First, the Committee recommended that the Board approve the retirement of $1 million in patronage capital in 2017, with $750,000 allocated to 1997 and $250,000 allocated to 2016. Ward moved that the Board accept that recommendation and approve the patronage retirement. Lague seconded.
The motion carried by unanimous vote.

Bursell noted that the Committee also recommended that the Board authorize management to purchase in September 2017 approximately $2.2 million in VT Transco stock that was previously offered to VEC but assigned to VELCO in 2013.
Westman moved and Ward seconded to accept the recommendation and approve the stock purchase.
The motion carried by unanimous vote.

ADJOURN OR RECESS – AGENDA ITEM #12
Bailey moved and Lague seconded:
That the meeting be adjourned.
The motion carried unanimously.
The meeting adjourned at 4:10 p.m.

Respectfully submitted: Mark Woodward, Secretary and Dan Carswell, President