CEO's Report - West River Telecom
Transcript of CEO's Report - West River Telecom
21 WEST RIVER TELECOM 2011 ANNUAL REPORT
Michael Grimm2011Annual
MeetingEntertainer
June 3, 2011
Luncheon ...................................................................................................10:30 a.m. - 1:00 p.m.
Registration ................................................................................................11:00 a.m. - 1:00 p.m.
Entertainment by Michael Grimm, Hazen ................................................12:00 p.m. - 12:45 p.m.
Presentation of Colors ................................................. American Legion Clark Grosz Post 189
The National Anthem ..................................................................... Taylor Hougum-Carr, Hazen
Call to Order ....................................................................................................... Matt Erhardt, Jr.
Invocation .............................................................. Pastor Walt Wolff, Peace Lutheran, Hazen
Welcome ................................................................................... Mark Nygard, Mayor of Hazen
Appoint Parliamentarian ................................................................................... Matt Erhardt, Jr.
Report of Credentials Committee ................................Credentials Committee Chairperson
Reading of Meeting Notice and Proof of Mailing ...................................................Theo Reich
Approval of Minutes .......................................................................................... Matt Erhardt, Jr.
Drawing for Prizes
Report on Voting Procedure .......................................................................Patrick A. Donovan
Election of Directors ........................................................................................... Matt Erhardt, Jr.
President’s Report .............................................................................................. Matt Erhardt, Jr.
Report on By-law change (s) ......................................................................Patrick A. Donovan
Drawing for Prizes
COO/Financial Manager’s Report ..................................................................... Bonnie Krause
Recognition of Guests & Introduction of Board ............................................. Matt Erhardt, Jr.
Drawing for Prizes
CEO’s Report ...............................................................................................................Mick Grosz
Service Awards ............................................................................................................Mick Grosz
Matt Erhardt, Jr.
Drawing for Prizes
Unfinished Business ............................................................................................. Matt Erhardt, Jr.
New Business ....................................................................................................... Matt Erhardt, Jr.
Election Results ................................................................Credentials Committee Chairperson
Adjournment ....................................................................................................... Matt Erhardt, Jr.
Grand Prize Drawing
59th Annual Membership Meeting
21 WEST RIVER TELECOM 2011 ANNUAL REPORT
Michael Grimm2011Annual
MeetingEntertainer
June 4, 2010
The 58th Annual Meeting of the members of West River Telecommunications Cooperative was called to order by President Erhardt at the Hazen High School Auditorium in Hazen, North Dakota, at 1:10 o’clock p.m. MDT on June 4, 2010, pursuant to Notice duly given.
Pastor John Fanella gave the invocation, which was followed by a welcome from Delmar Schramm, President of the Board of Commissioners of the City of Hazen.
Patrick A. Donovan, West River Telecommunications Cooperative’s attorney, was appointed as parliamentarian for the meeting by President Erhardt.
Mel Beckler, a member of the Credentials Committee, reported that 386 members had registered for the meeting, and a quorum was declared present. He also informed the members that the Credentials Committee had met earlier to consider and had approved all proceedings related to the Director nominee petitions and election to be conducted at today’s meeting.
The reading of the Notice of Meeting and Proof of Mailing was dispensed with upon motion duly made, seconded and carried.
The reading of the minutes of the last meeting was dispensed with, and such minutes were approved upon motion duly made, seconded and carried.
The election of directors was the next topic on the agenda. Attorney Donovan explained the voting procedures. The members were told that two of the seven Director positions were open. In District One, Brittany Lelm is the sole petitioner and nominee for election. In District Three, Matt Erhardt, Jr. is the only candidate. Both are incumbent Directors. The chair was vacated by President Erhardt and Vice President Vollmuth continued with the election procedures.
A motion was made, seconded and carried declaring that Brittany Lelm, as the sole candidate for her position, be elected to a three year term on the Board of Directors representing District One.
A motion was made, seconded and carried declaring that Matt Erhardt, Jr., as the sole candidate for his position, be elected to a three year term on the Board of Directors representing District Three.
President Erhardt then presented his report to the members.
Attorney Donovan reported on Bylaw changes.
COO/Financial Manager Bonnie Krause presented the financial report and this report was approved upon motion duly made, seconded and carried.
CEO/General Manager Grosz then presented his report to the members.
Service awards were presented.
President Erhardt then called for unfinished business and there was none. Next, he called for new business. No new business was brought before the assembly.
There being no other or further business, the meeting was duly adjourned upon motion made, seconded and carried at 2:09 p.m.
59th Annual Membership Meeting Minutes of58th Annual Meeting of West River Telecommunications Cooperative
43 WEST RIVER TELECOM 2011 ANNUAL REPORT
Matt Erhardt, Jr.President
Mick GroszCEO
On behalf of the Board of Directors, Management and the Employees at West River Telecommunications, welcome to our 59th Annual Membership meeting.
West River had another successful year in 2010. During the construction season, we finished the upgrades to our outside plant. Now virtually every subscriber has high quality digital phone service and access to high speed internet. This has taken several years to complete and several millions of dollars to achieve. This was all done without borrowing any money. With our strong financial condition, we were able to complete these projects with our own cash. Which leads me to the next order of business; this was our best year for margins in West River’s history. This allows us to retire capital credits to you, the members, approximately $2.5 million.
It is mixed emotions to have CEO Grosz announce his intentions to retire. It will be sad to see him leave West River as he has been very dedicated to this industry His knowledge and work ethic have been greatly appreciated by not just the Board but also by his peers. We wish him all the best in whatever he decides to do, whether it is getting back in the political arena, just going golfing or traveling the globe. He will be missed.
Even though West River faces many challenges, I am confident of the future. With your support and the dedication, ability and hard work of management and the employees, West River will continue to provide state of the art high quality services it enjoys today well into the future.
On behalf of the Board of Directors, the CEO/Manager, Staff and Employees, once again welcome, thank you for your patronage and hope to see you again next year.
Thank you for attending our 59th Annual Meeting.
Matt Erhardt, Jr.
President’s Report
“this was our best year for margins in West River’s history. This allows us to retire capital credits to you,
the members, approximately $2.5 million.”
43 WEST RIVER TELECOM 2011 ANNUAL REPORT
Matt Erhardt, Jr.President
Mick GroszCEO
President’s Report CEO’s Report
Greetings and welcome to the 59th Annual Membership Meeting of West River Telecommunications Cooperative.
The past year was a successful one for WRT. We pretty much finished our upgrades to enable us to provide terrestrial broadband to all but a small handful of customers. We increased the capacity of our ring to accommodate the growth of internet usage. We will continue to do so again this year. It is a major effort and expense to stay ahead of the capacity needs of our customers.
We had a successful year financially. Our net margins were the highest in history. Most of the net margins are due to our participation in cellular partnerships. The foresight of WRT to participate in these partnerships to the fullest is paying huge dividends.
The FCC began the process of transitioning from supporting voice based networks to supporting broadband based networks. The cost for us to provide broadband is greater than it is to provide voice only networks. WRT, and other rural telecommunications companies, rely on support from the Universal Service Fund and other high cost funds to provide services at reasonable rates. All of those support mechanisms are being looked at by the FCC.
If those support mechanisms are reduced or eliminated the ability for WRT to provide service at affordable prices in rural areas will be jeopardized. The Board and management, in conjunction with other telcos, are working hard to ensure that the FCC does not leave rural America behind.
This will be my last report to the membership of WRT. I have announced my intentions to retire sometime prior to the next Annual Membership meeting. It has been a privilege and honor to have the opportunity to manage a great company.
Working for the member-owners of WRT has been a pleasure. Working with the members, Board and employees of WRT has been one of the best experiences of my life.
The member-owners of WRT have been loyal customers of WRT throughout the years. The member support I have enjoyed throughout my years as manager is greatly appreciated. Our number one goal at WRT is to provide for the telecommunications needs of our members with quality service at affordable rates.
The Board of Directors is a very dedicated group of individuals. They work hard to understand and provide for the telecommunications needs of our members. It takes much study and research to anticipate the future needs of customers and then provide for those needs in a timely manner. I very much appreciate the guidance and support the Board has provided me through the years.
The employees of WRT are second to none. The heart and soul of any company are the employees. WRT employees are well educated in their fields. WRT employees are dedicated to providing our customers with the best service possible. I have never worked with a better group of people.
My time has come to move on. I am confident that WRT will be here far into the future to provide for all of your telecommunication needs. The people that make WRT work will still be here for you.
Mick Grosz
65 WEST RIVER TELECOM 2011 ANNUAL REPORT
District 4Ray Carlson
WRT Directorsare elected
to 3 year terms
District 7Randal
Christmann
District 7David J.
Lundstrom
District 7Lee
Reiser, Jr.
Matt Erhardt, Jr.President - District 3
Nick VollmuthVice President - District 5
Theo ReichSecretary/Treasurer - Dist. 2
Ray CarlsonDirector - District 4
Randy ChristmannDirector - District 7
Harley OversethDirector - District 6
Mick GroszCEO
Patrick A. DonovanAttorney
WRT Service Map
Brittany LelmDirector - District 1
Board of Directors/CEO/Attorney
65 WEST RIVER TELECOM 2011 ANNUAL REPORT
District 4Ray Carlson
WRT Directorsare elected
to 3 year terms
District 7Randal
Christmann
District 7David J.
Lundstrom
District 7Lee
Reiser, Jr.
Board of Director Candidates
87 WEST RIVER TELECOM 2011 ANNUAL REPORT
2010 2009
ASSETSCurrent Assets
Cash and cash equivalents $ 8,612,331 $ 5,353,507
Temporary investments in certificates of deposits 1,902,523 4,740,843
Investments in held-to-maturity securities - current 20,849,864 9,022,447
Telecommunications receivable, net 254,540 199,128
Other accounts receivable 1,356,535 1,623,415
Interest receivable 82,581 102,786
Materials and supplies 1,728,213 1,582,522
Other prepayments 168,440 196,933
Total current assets 34,955,027 22,821,581
Investments and Noncurrent Assets
Temporary investments in certificates of deposits 878,000 1,382,642
Investments in held-to-maturity securities 3,740,461 6,699,310
Investments in equity method investments 15,618,528 15,301,458
Other investments 2,154,030 2,425,057
Nonregulated investments 377,398 280,540
Other noncurrent assets 75,311 98,509
Total investments and noncurrent assets 22,843,728 26,187,516
Telecommunications Plant
In service 106,795,661 102,975,915
Under construction 52,764 872,800
Plant adjustment 7,383,187 7,383,187
Total investment in plant 114,231,612 111,231,902
Less accumulated depreciation and amortization 75,684,593 71,754,496
Net plant 38,547,019 39,477,406
$ 96,345,774 $ 88,486,503
Balance SheetsDECEMBER 31, 2010 AND 2009
10% CASHBACK for every dollar spent in 2010
87 WEST RIVER TELECOM 2011 ANNUAL REPORT
2010 2009
LIABILITIES AND EQUITIES
Current Liabilities
Current maturities of long-term debt $ 1,463,000 $ 1,390,000
Accounts payable 682,883 979,507
Customer deposits 123,729 113,864
Advanced billing and payments 9,276 7,942
Accrued income taxes 116,857 28,960
Accrued taxes - other 468,657 484,571
Other current liabilities 731,537 705,483
Total current liabilities 3,595,939 3,710,327
Long-Term Debt, Less
Current Maturities 1,828,436 3,749,783
Other Liabilities
Deferred compensation reserve 74,382 95,495
Deferred income taxes 2,283,487 2,220,661
Total other liabilities 2,357,869 2,316,156
Equities
Patronage capital 53,526,311 50,899,268
Other equities 35,037,219 27,810,969
Total equities 88,563,530 78,710,237
$ 96,345,774 $ 88,486,503
Balance SheetsDECEMBER 31, 2010 AND 2009
Over 7000 Customers are saving money with WRT Bundles
WEST RIVER TELECOM 2011 ANNUAL REPORT 109
4% Nonreg. Sales & Lease3% Internet Expense
13% Local Network
Revenue 2010
Revenue Distribution 2010
3% Nonreg. Sales & Lease4% Misc.5% Internet & DSL3% Long Distance
35% Dividends, Interestand Equity Earnings
37% Network Access& Federal Support
39% Net Margin
1% InterestExpense
15% Depreciation & Amortization
6% Corporate Operations
4% Customer Operations
9% Taxes
19% Plant Expense
2010 2009OPERATING REVENUES Local network services $ 4,306,660 $ 4,531,797 Network access services 12,392,555 11,122,611 Long distance network services 1,022,664 1,078,406 Miscellaneous 1,194,293 1,188,698 Telecom operating revenue 18,916,172 17,921,512 Internet revenue 1,842,055 1,751,581 Nonregulated sale and lease revenue 1,127,009 1,038,990 Total operating revenues 21,885,236 20,712,083
Operating Expenses Plant specific operations 4,400,125 4,485,880 Plant nonspecific operations 1,853,496 1,690,009 Depreciation 4,645,896 4,456,386 Customer operations 1,278,055 1,311,895 Corporate operations 2,045,702 2,080,804 Operating taxes, other 244,588 237,200 Telecom operating expenses 14,467,862 14,262,174 Internet expenses 1,046,192 1,078,581 Nonregulated sale and lease expense 1,485,410 1,403,481 Total operating expense 16,999,464 16,744,236
Net Operating Margin 4,885,772 3,967,847
Nonoperating Margin Interest income 683,713 894,558 Dividend income 2,317,005 1,568,432 Amortization of plant adjustment (492,213) (492,213) AFUDC 33,660 53,078 Equity earnings 8,913,276 7,897,971 Other nonoperating expense (53,540) (62,298) Net nonoperating margin 11,401,901 9,859,528
Net Margin Before Interest and Income Taxes 16,287,673 13,827,375
Interest Expense and Related Items 491,030 584,435
Net Margin Before Income Taxes 15,796,643 13,242,940
Provision for Income Taxes 2,751,423 2,581,783
Net Margin $ 13,045,220 $ 10,661,157
Statements of OperationsDECEMBER 31, 2010 AND 2009
WEST RIVER TELECOM 2011 ANNUAL REPORT 109
4% Nonreg. Sales & Lease3% Internet Expense
13% Local Network
Revenue 2010
Revenue Distribution 2010
3% Nonreg. Sales & Lease4% Misc.5% Internet & DSL3% Long Distance
35% Dividends, Interestand Equity Earnings
37% Network Access& Federal Support
39% Net Margin
1% InterestExpense
15% Depreciation & Amortization
6% Corporate Operations
4% Customer Operations
9% Taxes
19% Plant Expense
EideBailly LLP
Certified Public Accountants & Consultants
The Members
West River Telecommunications Cooperative
Hazen, ND 58545
We have audited, in accordance with
auditing standards generally accepted in
the United States of America, the balance
sheets of West River Telecommunications
Cooperative as of December 31, 2010
and 2009, and the related statements of
operations, equities and cash flows for the
years then ended, and in our report, dated April
4, 2011, we expressed an unqualified opinion
on those financial statements. In our opinion,
the information set forth in the accompanying
condensed financial statements is fairly stated
in all material respects in relation to the financial
statements from which it has been derived.
Completed financial statements are on file at the
Cooperative’s office.
April 4, 2011
Sioux Falls, South Dakota
Audit Report
Revenue Stats
Ranae Schmidt15 yearsMick Grosz
25 years
Lasy Bosch5 years
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Lasy BoschPersonnel Dir/Safety Coordinator
Bonnie KrauseCOO/ Financial Manager
Bruce MohlPlant Accountant
Bev HuberOffice Accountant
Tani GoodwinAccountant/ AP
Corey LeintzPayroll/ Plant Accountant
Shirley BreimeierCABS Coordinator
Jane SchrammAccounting Clerk
Beth KrauseMarketing Manager
Linda TerfehrMember Services Coordinator
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Mick GroszCEO
Loretta BeckmanExecutive Assistant
Jerry LangBuilding Maint. Rep.
WRT Employees
WRT has approximately 13,000 subscribers
Over 16,600 access lines
Ranae Schmidt15 yearsMick Grosz
25 years
Lasy Bosch5 years
1211 WEST RIVER TELECOM 2011 ANNUAL REPORT
Ranae SchmidtCustomer Service Mgr.
Jeff HaydenComputer Programmer
Debbie MorastCSR-Beulah
Jodi AipperspachCustomer Service Rep
Shannon SilbernagelCSR-Mobridge
Lanet DuncanCSR-Mobridge
Roxanne GeurtsCustomer Service Rep
Kim GragerCSR-Accts Receivable
Marsha SwansonCashier/ Receptionist
Sharon SchmaltzCashier/ Receptionist
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Lisa RottCustomer Service Rep
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Tyson GrinsteinnerInternet/ Data Tech
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Riley EideInternet/ Data Tech
Trista DeWittCustomer Service Rep
Trent LeapaldtInternet/ Data Tech
Sheldon DacarInternet/ Data Tech
WRT Employees
WRT has offices in Hazen, Beulah & Mobridge
1413 WEST RIVER TELECOM 2011 ANNUAL REPORT
Jody Murschel15 years
Allan Mautz15 years
Aaron Wick10 years
Bob Fitzgerald5 years
Shannon Rask5 years
Lyle Walth15 years
Randy Davis
15 years
Blaine LemerPlant Manager
Rockne BonsnessSales Representative
Stacy HintzOSP Clerk
Frankie BuchertOSP Clerk
Cheryl LazierOSP Clerk
Blair MeierOutside Plant Facilities Mgr.
Jacob ReinhardtConstruction
Allen HaiderOutside Plant Facilities Ass’t Mgr.
Allan MautzConstruction
Bob FitzgeraldConstruction
Steven KnudsonRight-of-Way Agent
Aaron WickC.O./ Network Tech
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Craig SmithC.O./ Network Manager
Larry WiegeC.O./ Network Foreman
Robert MettlerC.O./ Network Tech
Gene WolfC.O./ Network Tech
Kip HammargrenC.O./ Network Tech
Darroll AasC.O./ Network Tech
Phil QuastC.O./ Network Tech
Jody MurschelC.O./ Network Tech
Shannon RaskPlant Clerk
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WRT Employees
1413 WEST RIVER TELECOM 2011 ANNUAL REPORT
Jody Murschel15 years
Allan Mautz15 years
Aaron Wick10 years
Bob Fitzgerald5 years
Shannon Rask5 years
Lyle Walth15 years
Randy Davis
15 years
Tim JohnsonI & R Manager
Patrick O’NeilComb. Tech. – Beulah
LaMar GoetzComb. Tech. – Washburn
Duane EllweinComb. Tech. – Hazen
Dave FisherComb. Tech. – Center
Tom BeeryComb. Tech. – Hazen
Dale HeidComb. Tech. – Beulah
Tom HierComb. Tech. – Glen Ullin
Darrell BelisleComb. Tech. – Turtle Lake
Kelly MaasComb. Tech. - Hazen
Tom IversonComb. Tech. – Elgin
Mike DegensteinComb. Tech. – Hazen
Randy DavisComb. Tech. – New Salem
Lyle WalthComb. Tech. – Mobridge
Joe BauerInstaller – McLaughlin
Jerry GraffComb. Tech. – McLaughlin
Rod SilvaInstaller – Fort Yates
Jackson HagenInstaller – McClusky
Casey BlohmInstaller – Hazen
INS
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Devon MittleiderInstaller – McLaughlin
Jeff HansonInstaller – Hazen
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Darren LeierInstaller – Hazen
Donna QuastCustomer Service Rep.
Julie HochsprungCustomer Service Rep.
WRT Employees