Board Meeting Minutes


JANUARY 25, 2016

As required under the VEC Bylaws, notice of this meeting was sent to each Director by deposit in U.S. mail on January 19, 2016
President Tom Bailey 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 Dan Carswell (First Vice President), Michelle DaVia, Ken Hoeppner, George Lague, Carol Maroni (Second Vice President), Jack Miller, John Ward (Treasurer), Rich Westman, and Mark Woodward (Secretary).  Also present from VEC were CEO Christine Hallquist, CFO Michael Bursell, General Counsel Vickie Brown, Manager of Safety John Varney, Manager of Government Affairs and Member Relations Andrea Cohen, and Acting Corporate Assistant Lindsey Fenton.
Varney reported that before pulling out of a parking space, we should all take the time to make sure windows are clear of snow and ice. Visibility is important not only for you, but for others on the road so headlights and tail lights should be cleared off as well. This will make a big difference in poor conditions, and it was a rule that former employee Stan Tucker lived by.
Maroni added that she washes her headlights whenever she is at a gas station as they get dirty from all of the splashing on the road. Hoeppner urged owners of older vehicles to polish headlights as the covers can haze over time.
Maroni moved and Carswell seconded:
That the Board enter into executive session to discuss the Board operating norms.
By unanimous vote of those present the Board entered into executive session.
By unanimous vote of those present executive session ended. 
There were no members present.
President Bailey asked if there were any additions or corrections to the minutes of the regular monthly Board meeting held on December 29, 2015 included in the January 25, 2016 Board packet.
Bursell proposed a change so that the minutes state that if VEC comes in at or above (not below) its 2015 operating budget net income there may be an opportunity to write off some deferred storm costs.
Lague moved and Woodward seconded:
That the minutes of the regular monthly meeting held on December 29, 2015 be approved as amended.
The motion carried by unanimous vote.
Discussion ensued among the Board about Northlink fiber. A Director wanted to know the value of Northlink fiber, and Hallquist said it is very valuable to VEC from an operations perspective and as a result VEC is currently paying all the costs of maintaining it. The key sticking point for VEC taking ownership is unknown liabilities to FairPoint. Unless VEC can be held harmless for those, management would not propose that VEC take ownership. Discussion ensued about the proper disposition of the NorthLink fiber network. Hallquist noted that management is not recommending action by the Board at this time. VEC will continue dialogue with the Department of Public Service and come back to the Board if action is needed. 
Finance Update
CFO Bursell reported that his team has done a “soft close” of the books for 2015, and hard close will take place the first week of February. He noted that due to mild weather, December and January revenue will be less than usual for those months. Once the books are finally closed, he will be able to determine how much of the deferred storm costs can be written down. A director suggested that in light of lower than anticipated revenues in the early months of 2016, management may want to consider slowing capital expenditures in the first quarter of 2016.
Discussion ensued about the capital budget and how VEC manages individual projects within the overall budget. Hallquist noted that projects get delayed or change in scope for any number of reasons, including permitting issues and conditions on the ground that appear once the work is underway. In such a case other projects may be moved forward or scaled back to avoid idling employees and meet the overall budget. She suggested that the Board consider looking at capital budget performance based on a 3 year basis. Extensive discussion continued.    
A question was raised as to the status of VEC’s solar projects. 
Maroni moved and Lague seconded:
That the Board enter into executive session to discuss VEC solar deals. 
By unanimous vote of those present the Board entered into executive session.
By unanimous vote of those present the Board exited executive session.
Bursell noted that he was seeking Board approval of two resolutions necessary to implement Christine Hallquist’s name change with the Farm Credit Leasing Services Corporation. 
Lague moved and Ward seconded:
That the Board approve the Certified Copy of Corporation Resolution to Lease and the Incumbency Certificate included in the Board packet at pages 112-113. 
The motion carried by unanimous vote.
Hallquist also reported that VEC’s Manager of Information Technology Jacek Szamrej has given his resignation and will be moving with his family to Atlanta, Georgia. Jacek has played an important role throughout his 12 years at VEC and will certainly be missed. 
Operations Update
A Director asked again about variances within the capital budget. Hallquist reiterated that projects get moved around – including from year to year – based on conditions encountered along the way. Discussion ensued about capital project cost tracking. Bursell noted that the mild weather in November and December allowed for more construction projects to continue than normal.
Corporate Services Update
Manager of Government Affairs and Member Relations Andrea Cohen reported that she is conducting a website update soon and is interested in meeting with the Communications Committee to discuss the changes. Cohen also noted that the next “VEC Meet & Greet” will be held on February 11th at The Abby in Sheldon.  These meetings thus far have seen relatively modest attendance, but have provided good feedback for VEC. It was recommended that the chairs of the Board Committees be present at some of the meet and greets if possible, but certainly the Director from the respective district should attend. 
Cohen noted that preparation has begun for Annual Meeting, which will be held on May 21st at Smugglers’ Notch Resort.  An article advertising the three open district seats was included in Co-op Life. She noted that rather than have Chairman Bailey record an IVR message to members to recruit director candidates, management instead recommends using that message as a way to boost attendance at the meeting. Several Directors encouraged management to pursue more communication on Front Porch Forum. Cohen noted that the challenge is to do so in a cost-effective way and that she would continue to investigate the FPF option.  
President Bailey called a break in the proceedings at 2:05p.m.
The meeting resumed at 2:17p.m.
Safety Update
Varney noted that VEC will become eligible for VPP status beginning in 2016. Since VOSHA looks at our accidental rate on a three year rolling basis, the two serious incidents from 2012 have now been dropped. The VPP assessment is very thorough, and requires documentation that is extremely time-consuming. 
General Counsel Update
Brown noted that, in its comments on the new draft net metering rule, the Department of Public Service has proposed an alternative rule to the one prepared by Board staff. Management has reviewed the DPS proposed rule. While there are some elements that improve upon the Board staff rule, the pricing continues to be too high and the rule lacks clear price signals that will ensure the renewable energy credits (RECs) from net metering go to the utilities. Management will continue to stress those two points in additional comments on the DPS draft rule.
DaVia moved and Miller seconded that:
The Board enter into executive session to discuss the price terms of solar projects.
By unanimous vote of those present the Board entered into executive session.
By unanimous vote of those present the Board exited executive session.
Hallquist noted that her report on progress toward her 2015 goals is included in the packet. Discussion ensued about various specific goals and accomplishments. Brown noted that this meeting would focus on Hallquist providing information about progress on 2015 goals, after which the BoardSource CEO assessment would be presented (on-line) to all directors. The Board would then be able to complete Hallquist’s performance review for 2015.
Several directors raised the issue of the town of North Hero’s concern about VEC’s lack of interest in a solar project in that town. There was a suggestion that VEC management reach out to the town and clarify VEC’s position.
Directors asked questions on Hallquist’s goals report and discussion ensued on various topics addressed in the report.  
Brown noted that the status of VEC’s solar projects has been discussed already at several points in the meeting. She noted that Grand Isle and Hinesburg projects are both moving along as planned.  
Maroni brought forward the issue that a developer has proposed a wind project in the town of Irasburg which has met opposition by the town and residents. She asked if there is anything VEC could do to encourage developers to work with and listen to the towns, as this is happening to some of the communities in the VEC territory. Maroni shared a proposed resolution for the Board’s consideration. Discussion ensued as the resolution with directors expressing a variety of viewpoints on the proper role of VEC. No action was taken on the proposed resolution, and a suggestion was made for Maroni to revise the resolution for further discussion by the Board. 
Governance Committee Meeting
Hoeppner noted that the committee met on January 21 and has recommended that the Board approve amendments to three Board policies which will be presented at the February Board meeting.
Finance Committee
Ward moved and Maroni seconded:
That the minutes of the December 29th finance committee meeting be approved.
The motion carried unanimously.
Westman proposed moving the Board’s monthly meeting dates back to Tuesdays, as the change to Mondays caused scheduling complications for other directors, which was not the intent. Discussion ensued.
DaVia moved and Ward seconded: 
That the Board move the monthly meeting back to the last Tuesday of the month for February and March, but keep the April meeting the last Monday of the month.
The motion carried unanimously.
There being no further business before the meeting,
Ward moved and Carswell seconded that the meeting be adjourned.
The motion carried unanimously.
The meeting adjourned at 4:32 p.m.
Respectfully submitted
Mark Woodward, Secretary and Thomas Bailey, President