MINUTES SOUTHSIDE ELECTRIC COOPERATIVE MEETING OF … 2017 Board Mtg Minutes.pdf · 1 MINUTES...

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MINUTES SOUTHSIDE ELECTRIC COOPERATIVE

MEETING OF THE BOARD OF DIRECTORS MAY 18, 2017 @ 12:30 P.M.

HEADQUARTERS BOARD ROOM PRESENT: Frank W. Bacon (Chairman) Earl C. Currin, Jr. (Vice Chairman) Paul S. Bennett (Secretary) Charles J. Friedl (Treasurer) Brenda H. Johnson

Michael A. Lobue Kristie Martin-Wallace Clive C. Pettis, Sr. William T. White Frank F. Rennie, IV (General Counsel) Christine Marston (Minute Taker)

STAFF: Jeffrey S. Edwards, President/CEO George A. Felts, VP of Engineering Brad Furr, VP of Operations Danny J. Hammond, Chief Operating Officer Jean H. Morris, VP of Human Resources Ronald O. White, VP of Public & Member Relations

Dr. Frank Bacon presided. Ron White gave the invocation.

PREVIOUS MINUTES On motion made and seconded:

The Minutes of the April 20, 2017 Board Meeting are approved as presented.

MOTION CARRIED ODEC REPORT

The ODEC report was given by Earl Currin and Jeff Edwards.

PRESIDENT/CEO’S REPORT 1. The Financial and Statistical report for April 2017 was reviewed and is attached to

and made a part of the Minutes.

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2. The Cooperative’s accounts receivable write-offs were reviewed: Accounts receivable write-offs from November 2016 through January 2017

equal $42,608.30. Year-to-date percent of write-offs is .17%.

On motion made and seconded:

“The accounts receivable write-offs in the amount of $42,608.30 are approved as presented.”

MOTION CARRIED 3. The Board was provided information regarding cybersecurity events during the

month of April 2017. 4. The Institute of Electrical & Electronics Engineers (IEEE) outage data and safety

report for April 2017 were reviewed in detail: IEEE Outage Data

a. System Average Interruption Duration Index (SAIDI) and System Average Interruption Frequency Index (SAIFI) were below the historical values for the month.

b. Customer Average Interruption Duration Index (CAIDI) was slightly below historical values for the month.

c. There were no power supply outages during the month. d. The system saw significant thunderstorms on April 6th & 22nd. These storms

did not create a significant impact to the overall monthly performance. e. There were no major event days during the month.

Safety Report

a. There were no lost-time injuries in April. b. Total lost-time accumulated in April was 0 days. c. As of April 30th, employees have worked 362 days without a lost time injury.

5. Western District Office Construction: a. Received the FCC’s approval of the tower permit on May 11th:

Preparing final permits to Campbell County for building permit Jamerson-Lewis providing pricing for site and electrical work Awaiting tower quotations Control building to be ordered

b. Working with neighbor on driveway modifications: SEC’s Buildings & Grounds coordinating installation

c. MCA Architecture is reviewing and approving material submittal packages and performing project design oversight.

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d. Hurt & Proffitt continued site inspection activity. e. Jamerson-Lewis General Contractor continue with construction oversight. f. Final project summary estimate:

Total buildings & sitework $10.4 million (GMP) Additional project costs $2.3 million (estimated). Contingency on additional costs $254,378. Total Additional project costs $2.5 million (estimated) Total Project $12.9 million (estimated).

g. Building contingency balance $444,335. h. Building scope change summary:

HVAC revisions (1/5/2017) = $3,103 Total additions = $3,103

i. Project schedule: Building A – Office estimated completion October 5, 2017 Building B – Warehouse estimated completion July 11, 2017 Building C – Vehicle Shop estimated completion July 21, 2017 Fuel Island – estimated completion April 27, 2017 Substantial completion October 11, 2017 Owner occupancy October 24, 2017 Final project completion November 7, 2017

6. The SEC Member & Public Relations Department (MPR) has produced a prepay video for the website and YouTube channel.

7. SEC has kicked off its Action Committee for Rural Electrification (ACRE) campaign and so far, participation by employees has increased over past years. This increase is attributed to the MPR department detailing why ACRE was formed and its benefits for employees of electric cooperatives.

8. Jeff Edwards attended a meeting through the North Carolina Electric Membership Corporation (NCEMC) on the increased use of electric vehicles nationwide. SEC needs to start thinking about the impact they will have on its system and keep an eye on technology and availability of charging stations throughout service territory.

9. The Gaff n Go Rodeo is this Saturday, May 20th. The Gaff n Grill and Operators Rodeo is Friday, May 19th. Nate Humprey, SEC apprentice lineman, will be the keynote speaker at the Gaff n Go Banquet Saturday evening.

10. The Powerline Worker Program has graduated 17 more students. All participants have found employment except for one, this student has not actively looked for employment. The next class begins in June with 27 students enrolled.

11. Southside Opportunity Fund (SOF) held its second annual Scholarship Golf tournament May 12th. There were 18 teams signed up to play and over $15,000 was raised. SEC’s MPR department was responsible pulling everything together.

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NEW BUSINESS 1. Western District Contingency Loan:

a. A $12.5 million Power Vision loan with Cooperative Financing Corporation (CFC) is for construction of the Western District office.

b. Interest of 4% for the loan. c. Amendment to the “Committed” line of credit product from $15 million to

$200,000. d. SEC for a $15 million “As Offered” line of credit.

Upon motion made and seconded, “The $15 million Western District Contingency loan is approved.”

MOTION CARRIED 2. COMPensate Plan annual update:

a. NRECA’s National Consulting Group developed plan using the point factor compensation system, which has been in use at SEC since 1999.

b. Overall plan objectives: To attract, retain and motivate employees. Provides a consistent compensation system which can clearly explain

why employees are compensated at a particular level. c. Overall plan update objectives:

Market pricing for evaluated positions Remain competitive in market

d. Sources of Salary Data: 2017 National Compensation Survey (consumers over 50,000). 2017 Economic Research Institute (Petersburg).

e. Average compa ratio of .98% (2% below midpoint ((MP)) before pay increases).

f. SEC’s average market increase is 2.85% Slightly higher than the NRECA National Compensation System (NCS)

for all distribution cooperatives of 2.7%. Higher than the U.S. Bureau of Labor Statistics, showing salaries

nationally increased 2.3% for all occupations. g. Average compa ratio of 1.00 (MP) after implementation of pay increases h. Pay increases are based on the following criteria:

Competent employees (with less than 12 months in position) will be brought to the lower third of their pay grade range.

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Competent employees (with 12 months or more in position) will be brought to the mid-point of pay grade range.

Employees performing at an exceptional level may be brought to a pay point between mid-point and upper third.

Other eligible employees will receive a merit increase based on the plan matrix recommendation.

i. Pay increases effective July 1, 2017. On motion made and seconded:

“The COMPensate Plan annual update is approved.” MOTION CARRIED

3. In preparation for the Cooperative Finance Corporation (CFC) Forum, selection of NCSC voting delegates are needed:

a. Charles Friedl, Voting Delegate b. Frank W. Bacon, Alternate

On motion made and seconded: “The voting delegates to the NCSC are approved.”

MOTION CARRIED LEGAL REPORT 1. Sage Right of Way Management began herbicide application on May 15th fulfilling

their obligation from 2016. If they complete all the work described in the contract, SEC will dismiss the pending lawsuit.

2. A copy of a letter sent to the United States Department of Agriculture – Rural Utilities Service (USDA - RUS) from the Civil War Trust was received. They have requested a delay on releasing the Memorandum of Agreement in order to give them time to review all documentation acquired through the Freedom of Information Act (FOIA). RUS is not allowing any further delay in the matter. All interested parties have 30 days to respond. A final determination will be given after the 30-day comment period has expired.

3. Scott Stovall will be attending the June 2017 Board meeting in Frank Rennie’s place.

DIRECTOR CONCERNS/COMMENTS & ADJOURNMENT

The SOF Board held a teleconference to review and approve the new SOF

website. There will be a link from the SEC website to the SOF website, and there is a

direct link from the SOF website to the Powerline Workers program. Donations will be

able to be made from the website.

The SEC Board has received a thank you note from Janet Booth Scott, the

daughter of George Booth, previous SEC Board member, for the flowers sent.

General FundCash in Banks 5,382,212.19

General Funds Invested CFC - CTC's 2,153,156.82 CFC - Patronage Capital 2,308,683.88 Federated Insurance Corporation 395,022.00 TEC Trading Incorporated 622,500.00 Town of Hurt 1,000.00

Notes and Accounts Receivable Electric Consumer 6,777,356.60 Other Accounts Receivable 3,533,553.72

21,173,485.21 Material and Supplies in Stock 2,224,053.03

Construction Work in Progress to be Paid from Construction Funds 0.00

TOTAL 23,397,538.24

Construction Funds Available First Citizens Bank 0.00

CFC RUS & FFB COBANK

Balance Available for Advance 14,500,000.00

Gross Obligations 52,352,174.62 129,294,613.53 16,191,030.11 19,500,000.00

Interest Paid This Year 633,230.54 557,417.33 207,810.03 133,250.89

NOTES STATISTICS

STATEMENT OF GENERAL FUNDS AND OTHER ASSETSApril 30, 2017

CFC, COBANK & FIRST CITIZENS BANK

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Comparative Operating Statistics

179 209 62786 755 156646 646 141

4,569 3,800 3,80013 555 69

55,452 55,941 55,9418,251 8,260 8,260

Meters Installed - New Services

2012 2013 2014 2015 2016 2017January 34 38 28 45 49 38February 38 39 25 37 33 50March 12 30 27 44 53 59April 30 33 42 47 44 62May 32 37 41 54 37June 37 41 58 46 67July 40 46 50 60 53August 59 57 76 72 69September 43 55 45 53 43October 49 54 54 53 62November 39 95 48 41 70December 41 45 56 45 39Total 454 570 550 597 619 209

Southside Electric CooperativeFor the Month Ending April 2017

New Services ConnectedMeters RemovedMeters Reinstalled

Y-T-D 2017

Services Idle, Excluding SeasonalNumber of Services RetiredTotal Consumers Receiving ServiceTotal Miles Energized

Y-T-D 2016 April 2017

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Revision: 85643

General LedgerFinancial And Operating Report Electric Distribution

Page: 110:14:27 am05/11/2017

SOUTHSIDE ELECTRIC COOPERATIVE

Item Last Year This Year

----------------------------------Year - To - Date -------------------------------

Budget Current------------- Period - To - Date -----------------

Budget

INCOME STATEMENT FOR APR 2017

40,766,306.86 35,448,243.38 41,065,344.97 6,990,912.30 7,945,215.34 1. Operating Revenue and Patronage Capital0.00 0.00 0.00 0.00 0.00 2. Power Production Expense

24,623,330.48 20,206,363.18 24,325,625.60 3,782,088.18 4,595,238.75 3. Cost of Purchased Power1,765.58 343.58 0.00 0.00 0.00 4. Transmission Expense

0.00 0.00 0.00 0.00 0.00 5. Regional Market Expense1,359,986.05 1,460,877.74 1,267,211.05 345,361.95 305,893.74 6. Distribution Expense - Operation3,577,891.57 3,264,089.18 3,365,357.75 796,835.13 838,612.12 7. Distribution Expense - Maintenance

704,710.56 669,750.88 766,811.24 180,389.39 180,240.72 8. Customer Accounts Expense879,507.13 905,347.06 927,490.92 208,001.27 216,586.64 9. Customer Service and Informational Expense187,082.87 166,366.59 175,000.00 45,833.66 50,000.0010. Sales Expense

2,243,411.32 1,961,758.67 2,046,806.17 398,197.64 521,555.1911. Administrative and General Expense33,577,685.56 28,634,896.88 32,874,302.73 5,756,707.22 6,708,127.1612. Total Operation & Maintenance Expense (2 thru 11)

3,498,489.63 3,187,217.96 3,717,150.96 902,456.57 929,287.7413. Depreciation & Amortization Expense520,000.00 551,000.00 551,000.00 137,750.00 137,750.0014. Tax Expense - Property & Gross Receipts

0.00 0.00 0.00 0.00 0.0015. Tax Expense - Other1,913,494.56 1,957,508.79 2,003,605.00 490,153.38 500,901.2516. Interest on Long-Term Debt

0.00 0.00 0.00 0.00 0.0017. Interest Charged to Construction - Credit2,486.99 3,795.25 2,000.00 942.01 500.0018. Interest Expense - Other

27,943.28 11,162.06 25,000.00 3,415.31 6,250.0019. Other Deductions39,540,100.02 34,345,580.94 39,173,058.69 7,291,424.49 8,282,816.1520. Total Cost of Electric Service (12 thru 19)

1,226,206.84 1,102,662.44 1,892,286.28 -300,512.19 -337,600.8121. Patronage Capital & Operating Margins (1 minus 20)36,020.32 36,471.80 36,689.68 8,870.40 9,172.4222. Non Operating Margins - Interest

0.00 0.00 0.00 0.00 0.0023. Allowance for Funds Used During Construction0.00 0.00 0.00 0.00 0.0024. Income (Loss) from Equity Investments

-34,932.06 960.13 1,297.36 884.16 324.3425. Non Operating Margins - Other240,000.00 224,105.00 240,000.00 60,000.00 60,000.0026. Generation and Transmission Capital Credits208,999.12 244,155.98 210,000.00 0.00 130,000.0027. Other Capital Credits and Patronage Dividends

0.00 0.00 0.00 0.00 0.0028. Extraordinary Items1,676,294.22 1,608,355.35 2,380,273.32 -230,757.63 -138,104.0529. Patronage Capital or Margins (21 thru 28)

1,676,294.22 1,608,355.35 2,380,273.32 -230,757.63 -138,104.05Operating - Margin0.00 0.00 0.00 0.00 0.00Non Operating - Margin1.64 1.56Times Interest Earned Ratio - Operating1.88 1.82Times Interest Earned Ratio - Net1.64 1.58Times Interest Earned Ratio - Modified

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Revision: 81731SOUTHSIDE ELECTRIC COOPERATIVE

This YearLast Year Variance

BALANCE SHEET FOR APR 2017

ASSETS AND OTHER DEBITS 1. Total Utility Plant in Service 340,354,319.01 11,756,354.84328,597,964.17 2. Construction Work in Progress 19,617,331.55 2,944,876.6216,672,454.93 3. Total Utility Plant (1 + 2) 359,971,650.56 14,701,231.46345,270,419.10 4. Accum. Provision for Depreciation and Amort. 103,547,166.64 4,169,760.8099,377,405.84 5. Net Utility Plant (3 - 4) 256,424,483.92 10,531,470.66245,893,013.26 6. Non-Utility Property (Net) 26,381.27 -3,315.6129,696.88 7. Invest. in Subsidiary Companies 0.00 0.000.00 8. Invest. in Assoc. Org. - Patronage Capital 46,759,809.62 1,075,251.5245,684,558.10 9. Invest. in Assoc. Org. - Other - General Funds 2,549,178.82 18,825.422,530,353.40 10. Invest. in Assoc. Org. - Other - Nongeneral Funds 0.00 0.000.00 11. Invest. in Economic Development Projects 0.00 0.000.00 12. Other Investments 841,307.74 9,097.36832,210.38 13. Special Funds 0.00 0.000.00 14. Total Other Property & Investments (6 thru 13) 50,176,677.45 1,099,858.6949,076,818.76 15. Cash - General Funds 5,382,212.19 1,235,947.594,146,264.60 16. Cash - Construction Funds - Trustee 0.00 0.000.00 17. Special Deposits 0.00 0.000.00 18. Temporary Investments 0.00 0.000.00 19. Notes Receivable (Net) 0.00 0.000.00 20. Accounts Receivable - Sales of Energy (Net) 6,777,356.60 -322,292.807,099,649.40 21. Accounts Receivable - Other (Net) 3,533,553.72 195,486.153,338,067.57 22. Renewable Energy Credits 0.00 0.000.00 23. Material and Supplies - Electric & Other 2,224,053.03 1,361,442.47862,610.56 24. Prepayments 802,810.83 53,107.17749,703.66 25. Other Current and Accrued Assets 5,004,109.80 184,203.704,819,906.10 26. Total Current and Accrued Assets (15 thru 25) 23,724,096.17 2,707,894.2821,016,201.89 27. Regulatory Assets 39,586.25 -110,124.13149,710.38 28. Other Deferred Debits 4,919,873.50 -872,123.525,791,997.02 29. Total Assets and Other Debits (5 + 14 + 26 thru 28) 335,284,717.29 13,356,975.98321,927,741.31

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Revision: 81731SOUTHSIDE ELECTRIC COOPERATIVE

This YearLast Year Variance

BALANCE SHEET FOR APR 2017

LIABILITIES AND OTHER CREDITS 30. Memberships 231,450.00 1,925.00229,525.00 31. Patronage Capital 99,776,127.02 751,009.0099,025,118.02 32. Operating Margins - Prior Years 0.00 0.000.00 33. Operating Margins - Current Year 1,608,355.35 -67,938.871,676,294.22 34. Non-Operating Margins 0.00 0.000.00 35. Other Margins and Equities 1,042,994.91 909,801.61133,193.30 36. Total Margins & Equities (30 thru 35) 102,658,927.28 1,594,796.74101,064,130.54 37. Long-Term Debt - RUS (Net) 0.00 -4,622.374,622.37 38. Long-Term Debt - FFB - RUS Guaranteed 125,421,516.53 10,841,377.37114,580,139.16 39. Long-Term Debt - Other - RUS Guaranteed 0.00 0.000.00 40. Long-Term Debt - Other (Net) 64,602,628.73 -4,633,540.5469,236,169.27 41. Long-Term Debt - RUS Econ. Devel. (Net) 0.00 0.000.00 42. Payments - Unapplied 0.00 0.000.00 43. Total Long-Term Debt (37 thru 41 - 42) 190,024,145.26 6,203,214.46183,820,930.80 44. Obligations Under Capital Leases - Noncurrent 0.00 0.000.00 45. Accumulated Operating Provisions 115,057.86 0.00115,057.86 46. Total Other Noncurrent Liabilities (44 + 45) 115,057.86 0.00115,057.86 47. Notes Payable 19,500,000.00 8,500,000.0011,000,000.00 48. Accounts Payable 5,090,667.16 -1,194,582.946,285,250.10 49. Consumers Deposits 2,302,493.41 -149,108.332,451,601.74 50. Current Maturities Long-Term Debt 7,813,673.00 354,288.007,459,385.00 51. Current Maturities Long-Term Debt - Econ. Devel. 0.00 0.000.00 52. Current Maturities Capital Leases 0.00 0.000.00 53. Other Current and Accrued Liabilities 2,928,408.86 -197,005.223,125,414.08 54. Total Current & Accrued Liabilities (47 thru 53) 37,635,242.43 7,313,591.5130,321,650.92 55. Regulatory Liabilities 0.00 0.000.00 56. Other Deferred Credits 4,851,344.46 -1,754,626.736,605,971.19 57. Total Liab. & Other Credits (36+43+46+54 thru 56) 335,284,717.29 13,356,975.98321,927,741.31

0.630.69Current Assets To Current Liabilities to 1 to 131.39 30.62 % %Margins and Equities To Total Assets

52.7953.24 %Long-Term Debt To Total Utility Plant %

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Statements of Cash Flows

Southside Electric Cooperative

Period ended Period ended

April 30, 2017 April 30, 2016

Cash flows from operating activities

Electric revenue received 39,429,490$ 43,253,706$

Power supply paid (22,397,209) (25,369,103)

Operating expenses paid (9,343,539) (10,365,956)

Interest received 36,472 36,020

Interest paid (1,535,504) (1,506,177)

FEMA monies received ‐ 72,463

Cash flows provided by operating activities 6,189,710 6,120,953

Cash flows from investing activities

Investment in electric plant,net (5,819,992) (8,642,067)

Contributions in aid of construction 815,685 ‐

Proceeds from disposal of plant ‐ 100,834

Installment loans issued (818,215) (491,317)

Investment in CoBank ‐ (1,000)

Proceeds from retirement of CTC's 17,207 15,952

Cash flows used in investing activities (5,805,315) (9,017,598)

Cash flows from financing activities

Proceeds from lines of credit 4,500,000 3,000,000

Proceeds from long term debt ‐ 2,400,000

Principal payments on long term debt (2,341,232) (1,970,812)

Capital credits paid to members, net (160,515) (112,033)

Proceeds from capital credits 793,026 69,359

Deposits collected from customers (10,447) (25,305)

Net change in memberships 390 125

Cash flows provided by financing activities 2,781,222 3,361,334

Net change in cash 3,165,617 464,689

Cash at December 31, 2016 and 2015 2,216,595 3,681,576

Cash at April 30, 2017 and 2016 5,382,212$ 4,146,265$

No. Receiving Service

a.

No. Minimum Bills d.

Avg. No. Receiving Service

e.

kWh Sold Cumulative

f.

Amount Cumulative

g.1. Residential Sales (excl seas.) 53,638 22 53,585 260,147,345 29,914,6862. Residential Sales Seasonal3. Irrigation Sales4. Comm. & Ind 1000 KVA or Less 1,905 19 1,896 18,708,367 1,947,1565. Comm. & Ind Over 1000 KVA 14 0 14 24,092,936 1,692,3796. Public St. & Highway Lighting7. Other Sales to Public Authority 384 2 384 16,601,355 1,555,1628. Sales for Resale - REA Borr.9. Sales for Resale - Other

10.

(1 thru 9) 55,941 43 55,879 319,550,003 35,109,38311. Other Electric Revenue xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 338,86112. Total (10 + 11) xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 35,448,243

THIS MONTH a.

THIS MONTH a.

YEAR-TO-DATE b.

1. Net kWh Generated . . . . . . . . 175,961 767,0782. kWh Purchased . . . . . . . . . . . 60,146,8693. Interchange kWh - Net . . . . . . 4. Total kWh (1 thru 3) . . . . . . . . 60,146,869 (11.85) (2.71)

154,527 312,535January 2017

YEAR-TO-DATETHIS MONTH

456,619

4,094,591

375,240

311,877,657

319,550,003 10. Month When Maximum Demand Occurred . . .

6. Office Use . . . . . . . . . . . . . . .7. Total unaccounted For

(4 less 5 & 6), . . . . . . . . . . (7,129,549)

ITEM ITEM

8. Percent System Loss (7/4)x100 . .

YEAR-TO-DATE b.

5. Total kWh - Sold . . . . . . . . . . . . 67,100,4579. Maximum Demand (kW) . . . .

311,877,657

67,100,457

350,975

PART D. CONSUMER SALES AND REVENUE DATA

5,442,080

5,728,253

xxxxxxxxxxxx

6,911,08879,825

6,990,912xxxxxxxxxxxx

PART D. CONSUMER SALES AND REVENUE DATA April 2017

CLASS OF SERVICEkWh Sold

b.Amount

c.

(8,439,424)

52,982,413

4,581,373

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MINUTES SOUTHSIDE ELECTRIC COOPERATIVE MEETING OF … 2017 Board Mtg Minutes.pdf · 1 MINUTES...

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