call to order marietta, georgia 30060 1000 emc … site pdfs/directors... · jessica barron....

MIMJTES Of REGULAR BOARD OF DIRECTORS MEETING OFCOBB ELECTRIC MEMBERSHIP CORPORATION

1000 EMC PARKWAYMARIETTA, GEORGIA 30060

July 25 2017

CALL TO ORDER

Chairman Tripper Sharp called the meeting of the Cobb Electric MembershipCorporation (hereinafter “Cobb EMC”) Board of Directors to order at approximately 4:00 p.m.The meeting was held in the Board Room of the Administrative Building.

INVOCATION AND PLEDGE

Robert Steele gave the invocation and led the pledge.

IN ATTENDANCE

The following members of the Board of Directors were present:

Bryan BoydTripper SharpDavid McClellanDavid TennantEd CrowellKelly BodnerMalcolm SwansonEric B. BroadwellRudy Underwood

Others in attendance were:

Chip NelsonDavid JohnsonRobert SteeleJamey HulseyTim SosebeeKevan EspyLeslie ThompsonKristi KnightJenny CarrollBob SchoonoverJessica Barron

Minutes of Regular Board of Directors Meeting of 8Cobb Electric Membership CorporationJuly 25, 2017

Tiffany HarworthMonica AguilarEverett RobinsonWesley ThamesCharity WilsonKevin Moore, General CounselDavid Tyler. Member GuestAmy Smith, Member Guest

APPROVAL OF AGENDA

Chairman Sharp requested the acceptance of the External Audit be added to OldBusiness. Chip Nelson requested a construction update presented by Tim Sosebee be added toOld Business.

Director Boyd made a motion to approve the agenda, as amended: seconded by DirectorMcClellan. The motion carried unanimously.

SAFETY MESSAGE

Tiffany Harworth, Learning and Development Coordinator, presented the Safety Messageon summer water safety. Summertime means spending time in and around water, Ms. Harworthoffered the following tips on how to stay safe while enjoying water related activities:

• Only swim in designated areas and make sure to have a “buddy” with you at all times• Make sure you know how to swim. If you are not a confident swimmer. consider taking

swim lessons• Consider wearing a Coast Guard certified life vest when swimming or near water• When boating, ensure all passengers have access to a Coast Guard certified life vest• Refrain from drinking alcohol when swimming

Ms. Harworth also spoke about “secondary drowning”, a term used to describe adrowning complication, which often occurs in children. Secondary drowning takes place whenwater gets into the lungs. The lungs can become irritated and fluid can build up, causing acondition called pulmonary edema. Likely, you would notice a child having trouble breathingright away. and it might get worse over the next 24 hours. This event is rare. but can happen.Symptoms of this condition include:

• Coughing• Chest pain• Trouble breathing• Lethargy• Vomiting• Loss of appetite• Changes in behavior


Ms. Harworth discussed the Emerging Leader Program at Cobb EMC. This year’sprogram focused on five select employees and their professional and personal development.Each participant received various tasks and challenges over this past year to complete to learnabout the overall operations of the cooperative. This year’s Emerging Leaders are MonicaAguilar, Jessica Barron, Everett Robinson. Wesley Thames and Charity Wilson. Each programparticipant addressed the Board and Staff and expressed their thanks for the opportunity toparticipate in the program.

APPROVAL OF PREVIOUS MINUTES

Chairn-ian Sharp called for a vote to approve the minutes from the June 27, 2017 Board ofDirectors Meeting. Director Bodner seconded a motion made by Director Boyd to approve theminutes. The motion carried unanimously.

RECOGNIZE MEMBERS

Chairman Sharp welcomed member guests David Tyler and Amy Smith present at themeeting.

REPORT FROM BUDGET AND FINANCE COMMITTEE

Director McClellan, Chairman of the Budget and Finance Committee, presented thereport from the Budget and Finance Committee Meeting held on July 24. 2017.

Director McClellan stated the Committee approved the minutes of the June 26, 2017Committee meeting. Kevin Greiner, President and CEO of Gas South. presented an update onGas South’s financial results as of June 2017. Gas South’s net income for June was a loss of $1million, which is favorable to budget by $200,000. The fiscal year-to-date is a loss of $900,000,which is $400,000 favorable to budget.

The Committee received a report on the Financial and Statistical status for the month ofJune 2017 by Robert Steele, CFO. The net margin for June was reported at $4.3 million, whichis $3.8 million better than budget. Mr. Steele noted the calendar year-to-date net margin wasreported at $7.0 million, which is less than budget by $200,000. The Balance Sheet at the end ofJune is $912.2 million.

The Committee received a staff recommendation for the Wholesa]e Power CostAdjustment (WPA) of zero mils on member’s bills rendered in August 2017. The Committeerecommended the Wholesale Power Adjustment (WPA) be adjusted to zero mils beginning themonth of August 2017. The WPA will be reviewed monthly and adjusted if necessary.Chairman Sharp called for a vote on the motion from the Committee to approve therecommendation of a WPA of zero mils starting August 1, 2017, with consideration thereofmonthly. There being no second necessary, the motion to approve the Committee’srecommendation, with consideration thereof monthly carried unanimously.

Tim Sosebee, Senior Vice President of Business Operations presented to the Committee areport on “write-offs” for the month of June 2017 for $55,210.

The Committee received a proposal from Mr. Steele and Mr. Sosebee for Capital CreditRetirement. The Committee recommended a retirement of $13,603,835. Discussion ensued on


the pros and cons of several retirement options presented and the method by which members willreceive the retirement.

Chairman Sharp called for a vote on the motion from the Committee to approve therecommendation for Capital Credit Retirement of $13,603,835. There being no secondnecessary, the motion to approve the Committee’s recommendation carried with DirectorMcClellan voting to oppose. Director McClellan noted he voted against the $13 millionretirement, but is in favor of a $10 million capital credit retirement, as it would allow the EMC toreach a healthy 40% equity ratio more quickly.

Director Boyd made a motion to issue the Capital Credit Retirement in the form of billcredits to current members, and mailed checks to former members, seconded by DirectorBroadwell. After discussion, Director Underwood made a substitute motion to issue CapitalCredit Retirement as follows: for retirements under $10.00, members would receive a bill credit.Members with retirements over $10.00 would receive a check via mail (all former membersregardless of amount would receive a mailed check). Director Crowell seconded the substitutemotion. Chairman Sharp called for a vote on the substitute motion and the motion carried with afive to four vote. The substitute motion having passed, the initial motion was therefore renderedmoot, with no action required.

Chairman Sharp stated the financial reports have been reviewed and are ready forsubmittal to the auditors.

REPORTS FROM COMMETTEES

Audit Committee

Director Rudy Underwood, Chairman of the Audit Committee, made a motion from theCommittee’s recommendation to approve the Cobb EMC Internal Audit Charter. There being nosecond necessary, the motion to approve the internal audit charter carried unanimously.

Public Affairs and Education Committee

Kelly Bodner, Chairman of the Public Affairs and Education Committee, stated theCommittee met July 6, 2017 and discussed the Annual Meeting Agenda. Director Bodnerpresented the draft agenda to the Board. Chairman Sharp requested the Board Chair Report(agenda item III.) and the President’s Comments (agenda item IV.) switch places on the agenda.

Director Crowell made a motion to approve the Annual Meeting Agenda, as amended:seconded by Director Boyd. The motion carried unanimously.

Governance Committee

Director Ed Crowell, Chairman of the Governance Committee, stated the Committee didnot meet but plans to meet in August to discuss the terms and conditions regarding working withvendors.


Affiliated Transactions Committee

Director Eric Broadwell, Chairman of the Affiliated Transactions Committee, stated therewas no cause for the Committee to meet and, therefore, no report at this time. The Committeeplans to meet in August.

Energy Portfolio Committee

Director David Tennant, Chairman of the Energy Portfolio Committee, stated theCommittee did not meet, and there was no report at this time.

Human Resource Committee

Director Swanson, Chairman of the Human Resource Committee, stated the Committeedid not meet, and there was no report at this time. The Committee plans to meet in August.

APPROVE APPLICATIONS ANI CANCELLATIONS OF MEMEERSifiPS

Chip Nelson, President and CEO, presented the Applications and Cancellations ofMemberships report, stating there were 2,529 activations and 2,557 cancellations, resulting innegative 28 new members in the month of June. Net additions for the year total I ,059 and themember count as July 1, 2017 was 182,620.

Director Crowell made a motion to approve the applications for new memberships andapprove cancellations of memberships, as presented, seconded by Director Broadwell. Themotion carried unanimously.

REVIEW SAFETY REPORT

Jamey Hulsey, Senior Vice President of Electric Operations presented the June 2017Board Safety Report.

June 2017 Results

Mr. Hulsey was pleased to announce the cooperative achieved all zeros for June.• June Safety Meetings - attendance remains at 100% for all departments, which includes

eighty-two total make-ups.• Preventable Vehicle Accidents - reviewed and compared annual totals for 2013 through

2017 with zero preventable vehicle accident occurring in June 2017 and four year-to-date. Mr. Hulsey reviewed many of the company-wide efforts recently implemented toreduce vehicle accidents and decrease this number in years to come.

• Safety Violation Incidents - reviewed and compared annual totals for 2013 through 2017with zero safety violations occurring in June 2017 with a total of twelve year-to-date.

• Recordable Injury Comparison - reviewed and compared annual totals for 2013 through2017 with zero non-violation and zero violation injuries occurring in June 2017. Sevennon-violation and one violation injuries have occurred year-to-date.


• Incident / DART Rate (includes preventable and non-preventable injuries) - reviewed andcompared annual totals for 2013 through 2017. Cobb EMC’s year-to-date cumulativeincident rate is 1.65 and the year-to-date dart rate is 1.03.

• Safety Goal for 2017 = 100 percent — the 2017 daily success rate is 99.4 percent; 180 outof 181 days has passed without a violation injury, with 143 days since the last violationinjury.

Percentage of Safety Participation

Mr. Hulsey offered a presentation on safety participation from 2014 to present. Yearlytotals for 2014 were 30.9 percent. 42.1 percent in 2015 and 79.70 in 2016. Safety participationremained the same from last month’s 84.27 percent. Mr. Hulsey noted the cooperative isworking diligently each month to trend this number upward.

REPORT FROM PRESENT ANTI CEO

Chip Nelson, President and CEO, provided a report on the following:• Thunderstorms and other extreme weather conditions this spring and summer

have caused the SATDI number to weaken. Mr. Nelson stated he plans to addressthis issue with members at the upcoming Annual Meeting.

• The 2017 Planning Meeting is scheduled for Friday, August 18, 2017 beginning at3:00 p.m. at the Marietta Convention Center.

• Staff is currently investigating the option of moving the Pension Plan to NRECAand will be reporting to the Human Resource Committee on that option.

• Mr. Nelson announced Gas South employee Meredith Hodges would be steppingdown from her position as Vice President of Human Resources and ExternalAffairs. Gas South plans to eliminate this position. Ms. Hodges will continue towork with Gas South on a part-time basis.

Mr. Nelson reviewed the newly revised Gas South Executive Team:I. Kevin Greiner remains President and Chief Executive Officer.2. Jamie Tiernan remains Chief Financial Officer and Secretary - title of Vice

President of Finance changed to Vice President.3. Manon Brochu appointed Vice President and General Manager of Mass Markets.4. Chris Coan appointed Vice President and General Manager of Business and

Governmental Markets.5. Freddy Cardozo appointed Vice President of Supply and Risk Management.

MARKETING AND CORPORATE COMMUMCATIONS REPORT

Kevan Espy, Vice President of Marketing and Corporate Communications, presented theJune 2017 Marketing and Corporate Communications report.

Mr. Espy reported on Smart Choice accounts for June 2017, which totaled 35,213 activemembers. Mr. Espy discussed the Cobb EMC App. which had 2,113 downloads in June and12,084 downloads since its release.

Minutes of Regular Board of Directors Meeting of $Cobb Electric Membership CorporationJuly 25, 2017

Cobb EMC recently hosted the Home Energy Makeover Ribbon Cutting ceremony. Avideo of this event is available to view in Dropbox. Members of the cooperative attended theCobb Chamber Marietta Area Council Meeting. The meeting’s focus was on the STEM(science, technology, engineering, and mathematics) initiative. Cobb EMC presented MissPeyton Gully of Pope High School the Positive Energy Award for $1,000. Miss Gully is a localstudent-athlete battling leukemia. After an extended absence, Miss Gully plans to return toschool this fall.

Mr. Espy reviewed the J. D. Power and Associates Syndicated Results. From 2012 topresent, Cobb EMC’s scores have steadily increased. Cobb EMC received its highest score todate of 748 for 2017. This score exceeds the target P3 Corporate Goal of 732 for 2017.

Other marketing highlights include:• Secured media coverage - up 2,300 percent from first quarter of 2017• Media tone — experienced some negative media tones in the first and second

quarter due to the Brown case and the RTF.• Q2 Facebook results — down slightly due to the RW and power outages from

recent storm activity.• Q2 Twitter results — similar to QI. The cooperative is focusing on quality over

quantity with Twitter activity.

Mr. Espy provided the Community Foundation Update and reported total distributions forJuly 2017 totaled $72,150.

REPORT FROM GENERAL COUNSEL

General Counsel, Kevin Moore, stated he had nothing to report at this time.

REPORT FROM DIRECTORS

Director Broadwell commented he recently spoke to a member regarding Peak Day textmessages. Director Broadwell spent time explaining to the member the advantages of ourprogram to that of our competitors. Director Broadwell suggested continued education for ourmembers on Peak Day events.

OLD BUSINESS

Acceptance of External Audit

Director Underwood, Chairman of the Audit Committee, stated the Audit Committeereceived the Consolidated Financial Statements as of April 30, 2017 and 2016 and IndependentAudit Report from McNair, McLernore, Middlebrooks & Co., LLC.

Director Underwood made a motion to accept the external audit. There being no secondnecessary, the motion to approve the Committee’s recommendation carried unanimously.

Minutes of Regular Board of Directors Meeting Page $ of $Cobb Electric Membership CorporationJuly 25, 2017

Construction Progress Update

Tim Sosebee. Senior Vice President of Business Operations offered an update on theBuilding 1000 renovations.

- November of 2016 Phase 1 began with demolition of the lower level of 1000- Phase us 75 percent complete (September 15-goal for completion of Phase 1- Total project is 47 percent complete- To date. $5.3 million spent of the $12.4 million total budget- April 1 of 201 8 — goal for project completion

The Pounds Auditorium has a seating capacity of 400 as opposed to the formerCommunity Room. which only had a capacity of 225.

NEW BUSINESS

Chairman Sharp stated there was no new business at this time.

EXECUTIVE SESSION

Director Broadwell made a motion to enter Executive Session to discuss rca] estate and apersonnel matter seconded by Director McClellan. The motion carried unanimously.

The Directors went into Executive Session.

Motion by Director Tennant to exit Executive Session, seconded by Director McClellan,the motion carried unanimously.

ADJOURNMENT

There being no further business, Director Broadwell made a motion to adjourn themeeting; seconded by Director Bodner. The motion carried unanimously.

Malcolm Swans6n Tripper SharpSecretary/Treasurer Chairman

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