Julie Lindgren, President District 3 — Roberts, Bearcreek Dave Peterson, Vice President Arleen Boyd, Secretary/Treasurer District 5 — Fishtail District 1 — Bridger, MT, Clark, WY District 2 - Boyd, Joliet District 4— Red Lodge Bill Pascoe Kevin P. Owens, PE PO Box 1110 1306 N Broadway Ave 503-791-8275 [email protected]Beartooth Electric Cooperative Board of Trustees Meeting January 9, 2018 BEC Board Book | January 9, 2018 | Page 1
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Transcript
Julie Lindgren, President District 3 — Roberts, Bearcreek
Dave Peterson, Vice President
Arleen Boyd, Secretary/Treasurer District 5 — Fishtail
• BEC Risk Management Committee Meeting | Guest Presenter: Henry Dykema, SundanceSolar, BEC Office | January 23, 2018-Noon
• BEC Communication Committee Meeting, BEC Office | January 24, 2018-Noon• BEC Regular Board Meeting, BEC Office | January 30, 2018-Noon
13. Visitor Comments
14. Executive Session
• General Manager’s Informal Six-month Review
15. Executive Action
16. Adjourn
BEC Board Book | January 9, 2018 | Page 3
Beartooth Electric Cooperative, Inc.
Minutes of the Board of Trustees’ Meeting, November 28, 2017
Held at the offices of Beartooth Electric Cooperative
Beartooth Electric Cooperative will be referred to as BEC herein. The Glossary of Terms and Acronyms website link is http://www.BeartoothElectric.com/content/glossary.
Call to Order: Board President, Julie Lindgren, called the meeting to order at 12:01 p.m.
Present: Presiding: Julie Lindgren, Arleen Boyd, Dan Dutton, Roxie Melton, Dick Nolan, and Bill Pascoe
Kevin P. Owens, General Manager Eric Elton, Line Superintendent Brad Prophet, Accountant Kaaren Robbins, Communication & Member Services
Via telephone: Larry Martin, Legal Counsel David Peterson, District 7 Trustee
Guest: Frank Willett, Finance Committee Eleanor Guerrero, Carbon County News
Approval of agenda:
A motion was made by Dan Dutton and seconded by Roxie Melton, to approve the agenda with edits. Motion carried. Voting was unanimous.
Approval of minutes:
A motion was made by Bill Pascoe and seconded by Dick Nolan, to approve the October 31, 2017, regular board meeting minutes as edited. Motion carried. Voting was unanimous.
Presentation: Marty Tomlin and Markus Urbanik shared their experience as Operation Second Chance hunting guides.
Committee/Trustee/Attorney Reports:
Risk Management Committee:
The Risk Management/Finance Committees met and went over what we are essentially going to do today with more input. The committee’s response to the budget approach was extremely positive--noting the approach of having a period
long enough for everybody to dig into the numbers and give feedback was appreciated and starting with a zero-based budget is a good business practice.
The committee noted they would like to see more detail after the accelerated investment of plant which follows the pole replacement plan.
The cooperative’s cyber risk was looked at by the committees and will be covered later in the meeting with Kevin and Larry.
Comments and questions were provided to Kevin. Kevin will cover during the Budget discussion.
Finance Committee:
The Risk Management and Finance Committees met in a combined meeting. The Finance Committee report is the budget portion of the Risk Management Committee report.
Bylaw Committee:
There was no Bylaw Committee activity this month. The only bylaw matter for this coming year is to possibly change the annual meeting date to the spring versus the fall.
Policy Committee:
There was no Policy Committee activity this month. The Policy Committee will resume reviews in January 2018.
Communication Committee:
The Communications Committee hosted a guest, Ryan Hall, editor, Rural Montana magazine and communication director at Montana Electric Cooperatives’ Association (MECA). Ryan presented the Rural Montana reader survey results for both MECA and BEC. It was an interesting meeting, and we discussed communication items we had not previously considered:
• Very few co-ops have a president’s column in their Rural Montananewsletter.
• BEC’s communications needs have changed after Southern.• Readers are interested in the “human” factor.• There was redundancy with three reports reporting on the same topic.
BEC has the open invitation from Ryan Hall to return in six or so months to review our communication progress.
Arleen Boyd asked to have a board discussion about board fiduciary responsibilities for communications added to the next board meeting agenda and the chair agreed.
BEC Board Book | January 9, 2018 | Page 5
2018 Budget Discussion:
The presented budget sits within the board set parameters: cash reserve of $500,000 (budget: $682,388) and debt service coverage ratio of no less than 1.25 (budget: 1.42).
The board requested edits and double checks to be included in the final Budget.
Consent Agenda:
The board reviewed the consent agenda and requested staff to take the next step in cleaning reports.
Brad Prophet presented the October and 3rd quarter financials.
Staff Reports:
Kevin P. Owens reviewed the General Manager Report.
• BEC was invoiced for its first payment to Morgan Stanley for power supplycharges incurred in October. The power supply transition from Twin Eagleto Morgan Stanley wen incredibly smooth.
• The 2018 Budget Process continues. Final approval is scheduled for theJanuary 9, 2018, board meeting.
• BEC conducted a two-day long-term Strategic Plan Workshop. It was a veryconstructive two-day event that achieved its primary goals: A new Missionstatement, Pledge, and key performance measures, etc. were developed andagreed upon. Primary goals and objectives for the next three years willprovide a clear focus for BEC.
• Transformer banks on irrigation loads have been de-energized for theseason to reduce transformer losses.
• Following the October board meeting staff was directed to proceed with asecond loan ($1,057,787) from CoBank at 3.47% to fund the RUS Cushion ofCredit account with a 5% return. An additional $500,000 from BEC cashreserves was deposited into the RUS Cushion of Credit account with a 5%return.
• Capital Credit refunds for 1991-1992 in the amount of $437,000 will bemailed out to members on November 30, 2017.
• Coinciding with the issuance of the 1991-1992 Capital Credit refunds willbe notifications to members of unclaimed capital credit checks issued inNovember 2016 for periods of late 1987 and all of 1989 and 1990.Notifications will be seen on BEC’s website, Facebook and the office.
• The application process for the 2018 Washington D.C. Youth Tour,Beartooth Electric Scholarship, and MECA Memorial Scholarship wasannounced this month and distributed to all high schools in the BECservice territory.
Kaaren Robbins reviewed the Communication report.
Eric Elton provided the Line Superintendent report.
BEC Board Book | January 9, 2018 | Page 6
New Business:
The 2018-2020 Strategic Plan was discussed. Updates with measurable goals will be reviewed and approved during the January 9, 2018, board meeting.
The 2018 BEC 80th Annual Member Meeting is planned for September 29, 2018, at the ANIPRO Event Center.
Old Business:
BEC Financial Policy No. 307 Purchase of Materials and Equipment.
A motion was made by Dick Nolan and seconded by Roxie Melton, to approve the Financial Policy 307 as amended by general manager and attorney. Motion carried. Voting was unanimous.
BEC Financial Policy No. 306 Retirement of Capital Credits.
A motion was made by Bill Pascoe and seconded by Richard Nolan, to delete section 3.2.1.2 from Financial Policy 306. Motion carried. Voting was unanimous.
A motion was made by Bill Pascoe and seconded by Richard Nolan, to retroactively look at the capital credit retirements from November 2016 and pay any member who did not get paid due to the section 3.2.1.2. Motion carried. Voting was unanimous.
The TWACS Meter RFP was discussed. The schedule is to forward the RFP draft to the attorney for review, distribute the RFP and obtain a signed document by mid-January.
Julie discussed Kevin’s request for a six-month informal performance review. The review is scheduled during the January 30 board meeting.
Upcoming Meetings:
• MECA Winter Committee and Board Meetings, Great Falls, MT | November 28-29, 2017
December 14, 2017, Noon• BEC Regular Board Meeting, BEC Office | January 9, 2018-Noon• BEC Regular Board Meeting, BEC Office | January 30, 2018-Noon
Visitor Comments: None.
Executive Session: None required.
BEC Board Book | January 9, 2018 | Page 7
Executive Action: None required.
The next regularly scheduled meeting of the BEC Board of Trustees is Tuesday, January 9, 2018.
A motion was made by Richard Nolan and seconded by Dan Dutton, to adjourn the meeting at 4:16 p.m. Motion carried. Voting was unanimous.
President, Julie Lindgren adjourned the meeting.
ATTEST:
_____________________________________
Arleen Boyd, Secretary
BEC Board Book | January 9, 2018 | Page 8
Risk Management/Finance Committee report Combined Risk Management and Finance Committee, Meeting December 16, 2017 Red Lodge BEC Office Attending: Frank Willett, Judith Gregory, Bill Pascoe, Julie Lindgren, Dan Dutton, Dick Nolan, Roxie Melton, Gil Boyer, Arleen Boyd, Kevin Owens Present on phone: Attorney Larry Martin Staff attending: Kaaren Robbins, Brad Prophet The primary meeting objective was to review and recommend action to the board on the 2018 proposed Budget. General Manager, Kevin Owens answered many questions from the committee and reviewed updated projected budget numbers addressing questions and suggested changes from the October risk management meeting. There is an addition to the budget for a temporary, part-time employee for work order processing. The employee will report to Brad Prophet. Kevin is confident that a person with an accounting background can be hired as budgeted. Payroll in 2018 will increase 2% and benefits 7%. The discussion highlighted the difficulty of tracking employee expense because their time (required by FERC) is assigned to the various accounts they serve. Judith Gregory suggested that the simplified cash flow statement could show employee expense collectively, not just across accounts. Discussion of rate classes and the definition of the classes clarified the kVA requirements for small business, large (50-1000 kVA) and industrial (1001 and up). Dan Dutton suggested that the actual definition of residential and small business and kVA requirements could usefully be highlighted for the board. Kevin summarized current Cushion of Credit deposits and recommends an annual evaluation of potential additional deposits based on available cash and interest rates from BEC lenders. The Cushion of Credit deposit generates 5% interest. The impact of 5% interest will change based on the cost of borrowing money to fund the deposit. Recommendations. Board budget approval. The budget provides for the long-discussed improvements at the Pine Crest subdivision for which the committee endorses. Also recommended: approval of the income statement, cash flow and balance sheets adjusted to match end-of-year numbers. The committee recommends engaging Kim Mikkelson to update the seven-year (possibly 10-year) financial model following 2018 budget approval. Larry Martin noted for consideration by the committee and board two cyber security issues his firm’s clients have encountered recently. Email addresses for board members may not be secure. Many organizations provide addresses and
BEC Board Book | January 9, 2018 | Page 9
connections to the board. The Americans with Disabilities Act is addressing rights for access to facilities, programs and services including communications. Companies are being required to look at how websites and other information platforms provide access for clients and the public with hearing or sight disabilities. Kevin agreed that the security issues demand attention and that there is a risk for the co-op to examine electronic access to information. The group discussed examples of attempts to take advantage of internet-based information and financial transactions. Kevin reported an increase in the Cyber Security Liability Coverage to . Bill Pascoe outlined some current power supply developments and how the availability of renewable resources that do not carry fuel costs (like solar and wind and hydro) can impact operating costs (marginal costs) for power generation plants. He briefly described current impacts on power costs resulting from the availability of power generated by renewables in California. Bill will continue the report /discussion at the January 23 risk management meeting. Next risk management meeting set for January 23 at noon with a presentation from Henry Dykema whose local company, Sundance Solar, provides solar and wind power systems design and installation
BEC Board Book | January 9, 2018 | Page 10
MEMBERSHIPS JANUARY 9, 2018
NEW MEMBERSHIPS: 31
CANCELLED MEMBERSHIPS: 31
TOTAL MEMBERSHIPS: 4497
CAPITAL CREDITS Capital Credit Discounted Retained by Co-Op Allocated Refund to Member
12/06/2017 2:35:12 am OPEN BALANCE REGISTER Page: 865
Account Prov Status Hold Class Total Total Current ------ Current Total
Name Bill Amt Bill Amt Bill Past ARAmt ARAmt 30 Day 60 Day 90 Day
Grand Totals: 748,728.47 647,615.47 101,113.00 740,304.34 639,697.21 66,350.91 16,160.24 18,095.98
GRAND TOTAL SUM MARY TNFORMATJON
Tot Active Active Tot Inactive Inactive Active Active Inactive Inactive Active Active Inactive Inactive Dollars Accts Dollars Accts Credit$ Credit Accts Credit$ Credit Accts Debit$ Debit Accts Debit$ Debit Accts
JO Day 65,528.81 630 822. IO 18 0.00 0 0.00 0 65,528.81 630 822.10 18
Total AR Amt 728,351.55 6000 11,952.79 43 -28,746.08 142 -234.70 3 757,097.63 5858 12,187.49 40
Budget Amt Due 7,375.55 52 0 00 0 -1,223.87 2 0.00 0 8,599.42 50 0.00 0
Accumulated provisions set aside for Uncollectable Write-Off Accounts to November 30, 2017 is $38,415.53. Capital Credits to be applied with General Retirements if not paid.
DECEMBER 2017 DISCONNECTED NON PAY RED LODGE(RDL)COLUMBUS (CMB)
DATE CITY SERVICE LOC# LOCATION ACCOUNT DISCONNECTED RECONNECTEDFEBRUARY 9,2017 BRIDGER 6S 23E 27 661 C 490205 RDL INSTALLED 20/20/ METERFEBRUARY 28, 2017 GREYCLIFF 1S 16E 17 1376 O 562706 CMB NEW JUNE 5, 2017
MARCH 2017 - NONE
APRIL 2017 JOLIET 4S 23E 07 547 A 377202 RDL APRIL 5, 2017 SAME APRIL 6, 2017JOLIET 4S 23E 07 547 71902 RDL APRIL 5, 2017 SAME APRIL 6, 2017BRIDGER 6S 23 E 27 661 C 490205 RDL APRIL 5, 2017RED LODGE 6S 19E 28 849 D 634400 RDL APRIL 5, 2017 SAME NOVEMBER 28, 2017ROBERTS 4S 20E 35 901 C 432101 RDL APRIL 5, 2017 SAME JUNE 9, 2017ROBERTS 4S 21E 35 901 D 436801 RDL APRIL 5, 2017 SAME JUNE 9, 2017RAPELJE 3N 20E RJ 1454 C 454703 CMB APRIL 13, 2017
MAY 2017 - NONE
JUNE 7, 2017 COLUMBUS 3S 21E 23 517 R 97515 CMB JUNE 7, 2017 OWNER JUNE 26, 2017 JOLIET 3S 21E 13 523 SI 70803 RDL JUNE 7, 2017 SAME JUNE 7, 20167BELFRY 9S 21E 14 753-4 744000 RDL JUNE 7, 2017
JULY 6, 2017 NYE 4S 15E 17 059 A 617600 CMB JULY 6, 2017ROBERTS 5S 21E RBTS 290 55816 RDL JULY 6, 2017 SAME JULY 6, 2017ROBERTS 6S 20E 35 406 E 638300 RDL JULY 6, 2017 SAME JULY 6, 2017RED LODGE 7S 20E 08 1026 278604 RDL JULY 6, 2017 SAME JULY 6, 2017RED LODGE 8S 20E MB 1043 D 441602 RDL JULY 6, 2017 SAME JULY 12, 2017ALPINE 7S 17E 00 1633 266901 RDL JULY 6, 2017 SAME JULY 19, 2017
JULY 13, 2017 COLUMBUS 2S 19E-CC 1307-83 640905 CMB JULY 13, 2017 NEW NOVEMBER 9, 2017
AUGUST 8, 2017 RED LODGE 6S 20E 25 440 D 411514 RDL AUGUST 8, 2017 NEW AUGUST 14, 2017REED POINT 2S 15E 25 1392 281209 CMB AUGUST 8, 2017 NEW AUGUST 9, 2017
SEPTEMBER 7, 2017 COLUMBUS 2S 203 32 247-2 755800 CMB SEPTEMBER 7, 2017 SAME SEPTEMBER 7, 2107FISHTAIL 4S 18E FT 35 D 203101 CMB SEPTEMBER 7, 2017 SAME SEPTEMBER 26, 2017
OCTOBER 11, 2017 RED LODGE 8S 20E 30 1060 A1 238102 RDL OCTOBER 11, 2017 SAME OCTOBER 12, 2017
NOVEMBER 3, 2017 CLARK 57N 101W 06 783 A2 761100 RDL NOVEMBER 3, 2017CLARK 58N 101W 06 783 B1 729300 RDL NOVEMBER 3, 2017
DECEMBER 6, 2017 BOYD 4S 20E 36 972-13 447104 RDL DECEMBER 6, 2017COLUMBUS 2S 20E 19 1301-12A 648500 CMB DECEMBER 6, 2017
Notices went out with Past Due Balances due 12/29/2017. 25 = 2017 DISCONNECTSDelinquent accounts will be due 01/03/2018 and Disconnecting Accounts 60-90 days in arrearas 01/11/2018. 17 = 2017 RECONNECTS
8 = 2017 ACCOUNTS STILL OFF
Page 1 of 1
BEC Board Book | January 9, 2018 | Page 13
According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid OMB
control number. The valid OMB control number for this information collection is 0572-0032. The time required to complete this information collection is estimated to average 15 hours per
response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
BORROWER DESIGNATION
MT0019
PERIOD ENDED
FINANCIAL AND OPERATING REPORT November 30, 2017
BORROWER NAME
INSTRUCTIONS-See help in the online application BEARTOOTH ELEC COOP INC
This information is analyzed and used to determine the submitter's financial situation and feasibility for loans and guarantees. You are required by contract
and applicable regulations to provide the information. The information is subject to the Freedom of Information Act (5 U.S.C. 552)
CERTIFICATION
We recognize that statements contained herein concern a matter within the jurisdiction of an agency of the United States and the making
of a false, fictitious or fraudulent statement may render the maker subject to prosecution under Title 18, United States Code Section 1001.
___X___ All of the obligations under the RUS loan documents have been fulfilled in all material respects.
_________ There has been a default in the fulfillment of the obligations under the RUS loan documents. Said default(s) is/are
specifically described in Part D of this report.
1/3/2018
DATE
1/3/2018
DATE
YEAR-TO-DATE
ITEM LAST YEAR THIS YEAR BUDGET THIS MONTH
(a) (b) (c) (d)
1. Operating Revenue and Patronage Capital................................... 8,004,586 7,867,325 7,566,248 688,809
2. Power Production Expense............................................................... 0 0 0 0
3. Cost of Purchased Power............................................................... 2,671,521 2,821,011 2,706,666 267,098
ASSETS AND OTHER DEBITS LIABILITIES AND OTHER CREDITS
1. Total Utility Plant in Service.................................................31,408,105 30. Memberships................................................................... 0
2. Construction Work in Progress........................................... 237,531 31. Patronage Capital............................................................. 6,447,202
4. Accum. Provision for Depreciation and Amort.................. 15,193,758 33. Operating Margins - Current Year..................................... 484,325
6. Non-Utility Property - Net.................................................... 0 35. Other Margins and Equities............................................. 153,235
7. Investments In Subsidiary Companies............................... 0 36. Total Margins and Equities (30 thru 35)............................. 7,448,212
8. Invest. In Assoc. Org. - Patronage Capital....................... 426,153 37. Long-Term Debt - RUS (Net).......................................... 454,765
9. Invest. In Assoc. Org. - Other - General Funds................. 0 38. Long-Term Debt - FFB - RUS Guaranteed......................... 5,356,998
10. Invest. In Assoc. Org. - Other -Nongeneral Funds.......... 289,007 39. Long-Term Debt - Other - RUS Guaranteed....................... 0
11. Investments In Economic Development Projects............ 0 40. Long-Term Debt - Other (Net).............................................5,772,822
12. Other Investments.............................................................. 0 41. Long-Term Debt - RUS - Econ. Devel. (Net)........................ 0
13. Special Funds.................................................................... 0 42. Payments-Unapplied 0
14. Total Other Property and Investments (6 thru 13)........ 715,160 43. Total Long-Term Debt (37 thru 41-42)...................................11,584,585
15. Cash - General Funds....................................................... 1,314,415 44. Obligations Under Capital Leases-Noncurrent.................................... 0
16. Cash - Construction Fund - Trustee.................................. 1 45. Accumulated Operating Provisions................................... 0
17. Special Deposits................................................................ 0 and Asset Retirement Obligations
18. Temporary Investments.................................................... 415,144 46. Total Other Noncurrent Liabilities (44+45)......................... 0
22. Renewable Energy Credits.......................................... 0 50. Current Maturities Long-Term Debt................................... 0
23. Materials and Supplies - Electric and Other.................... 469,163 51. Current Maturities Long-Term Debt-Ec.Dev...................... 0
24. Prepayments....................................................................... 42,682 52. Current Maturities Capital Leases..................................... 0
25. Other Current and Accrued Assets................................... 2,317 53. Other Current and Accrued Liabilities................................ 392,231
26. Total Current and Accrued Assets (15 thru 25)............... 3,023,457 54. Total Current and Accrued Liabilities (47 thru 53)................ 837,818
28. Other Deferred Debits......................................................... 104,159 56. Other Deferred Credits................................................... 1,141,048
29. Total Assets and Other Debits (5+14+26 thru 28)............21,011,663 57. Total Liabilities and Other Credits
2. Residential Sales - b. kWh Sold 2. Residential Sales -b. kWh Sold 0
Seasonal c. Revenue Seasonal c. Revenue -$
a. No.Consumers Served 0 0 0 111 111 115 a.#Consumers 113 113 113 0 0 0
3. Irrigation Sales b. kWh Sold 0 0 0 50,405 269,170 929,163 3. Irrigation Salesb. kWh Sold 1,194,477 923,487 300,728 0 0 0 3,667,430
c. Revenue -$ -$ -$ 20,401.92$ 49,151.10$ 100,090.58$ c. Revenue 115,190.77$ 99,384.63$ 58,714.60$ -$ -$ -$ 442,933.60$
a. No.Consumers Served 379 380 382 381 381 468 a.#Consumers 468 468 468 473 470 0
4. Comm. And Ind. b. kWh Sold 923,574 739,024 690,687 648,275 603,122 669,103 4. Comm. And Ind.b. kWh Sold 749,060 694,902 655,037 693,551 805,252 0 7,871,587
1000 kVa or Less c. Revenue 97,713.89$ 82,805.97$ 78,622.93$ 75,380.95$ 71,501.03$ 80,532.58$ 1000 kVa or Lessc. Revenue 82,099.10$ 78,063.59$ 74,666.89$ 76,915.76$ 86,075.07$ -$ 884,377.76$
a. No.Consumers Served 1 1 1 1 1 1 a.#Consumers 1 1 1 1 1 0
5. Comm. And Ind. b. kWh Sold 117,000 98,400 117,900 94,800 146,100 151,500 5. Comm. And Ind.b. kWh Sold 156,000 138,900 141,900 110,400 81,900 0 1,354,800
Over 10000 kVa c. Revenue 10,101.38$ 9,066.75$ 10,341.94$ 10,987.50$ 15,213.56$ 15,447.94$ Over 10000 kVac. Revenue 14,959.31$ 13,913.09$ 13,987.32$ 11,766.39$ 6,550.68$ -$ 132,335.86$
a. No.Consumers Served a.#Consumers
6. Public Street and b. kWh Sold 6. Public Street andb. kWh Sold 0
Highway Lighting c. Revenue Highway Lightingc. Revenue -$
a. No.Consumers Served a.#Consumers
7. Other Sales to b. kWh Sold 7. Other Sales tob. kWh Sold 0
Public Auth. c. Revenue Public Auth. c. Revenue -$
a. No.Consumers Served a.#Consumers
8. Sales for Resale - b. kWh Sold 8. Sales for Resale -b. kWh Sold 0
RUS Borrowers c. Revenue RUS Borrowersc. Revenue -$
a. No.Consumers Served a.#Consumers
9. Sales for Resale - b. kWh Sold 9. Sales for Resale -b. kWh Sold 0
* Quick ratio=measures the ability of a company to use its cash and short-term/demand deposits to extinguish current liabilities immediately
** Equity Target - 40%*** Net TIER=Times Interest Earned Ratio (TIER) means the ratio of a
borrower’s net income (after taxes) plus interest expense,all divided by interest expenseNet TIER Target = RUS Covenant = 1.25 (met 2 of 3 years)
**** DSC=Debt Service Coverage is a measurement to generate sufficient fundsto cover principal and interest of long-term debt on an annual basisDSC Target = 1.5 (RUS Covenant = 1.25, met 2 of 3 years)
3,500,000
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
7,000,000
7,500,000
8,000,000
8,500,000
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Monthly kWh Sales
2017 Budget 2016 2015
$-
$20,000.00
$40,000.00
$60,000.00
$80,000.00
$100,000.00
$120,000.00
30 Days 60 Days 90 Days Total Past Due
November Aged Past Due Accounts Receivable
2017 2016
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
Jan 2017 Feb Mar Apr May June July Aug Sept Nov Dec
Delinquent Listing - Payments received thru 12/15/2017 - Over 30 Days
Customer Information System Payments Received Balance Due
BEC Board Book | January 9, 2018 | Page 19
BEARTOOTH ELECTRIC COOPERATIVE, INC.
SIMPLIFIED CASH FLOW
As of November 30, 2017
Black = creates cash
Red = uses cash
Thousands (000s) Actual Budget
CASH FROM OPERATIONS
Margins 558.8$ -$
Add back Depreciation 904.8 -
Add back Regulatory Asset 129.3
Cost from retirement of assets (poles, etc.) (254.0) -
Cash from Operations 1,338.9 -
Uses of Cash in Operations
Change in Ending Receivable Balance 416.2 -
Change in Ending Inventory Balance (69.8) -
Change in Ending Prepaid Expense Balance (28.1) -
Reduction of (payment for) other Current Assets 8.3 -
Change in Ending Accounts Payable Balance (90.0) -
Accrual/(payment) of other Current Liabilities 124.1 -
Cash created by (used in) operations 360.7 -
Capital Spending
Utility Plant (264.4) -
Construction Work in Progress (183.4) -
Other Property & Investments (21.1) -
Cash (used in) Capital Spending (468.9) -
Increase of debt (borrowing) - -
Pay down of debt - Early Exit Loan - -
Pay down of debt (42.6) -
Payment of Short-Term Line of Credit - -
Other creation (use of) cash (General Retirement) (460.5) -
Other Deferred Credit 6.0 -
Change in cash from all activities 733.6 -
Cash and Investments beginning 996.0 996.0
Change in cash 733.6 -
Cash and Investments ending 1,729.6 996.0
Payroll 1,239.7 1,024.1
Benefits 765.9 749.9
Total 2,005.6 1,774.0
*Note: Cash Flow Budget was forecasted on a quarterly basis. November 2017 is the second month of fourth quarter (December 2017).
Total 83,426 $181,827 $366,342 $2,064,792 $177,311 $614,291 $3,404,562 $40.81
TWACS The TWACS project remains on track to meet the deadline of having a Proposal ready for Board approval at their January 30 Meeting. A final staff DRAFT will be presented to BEC’s General Counsel the week of January 8. It is hopeful that the actual bid solicitation will follow the next week. Staff will evaluate bids beginning January 24.
Trump Signs Tax Reform Package; Senate Introduces Energy Tax Bill Congress wrapped up business for the year after passing tax reform legislation and a short-term spending bill to keep the government funded until January 19. The president signed both bills Friday morning. The tax bill maintains the tax-exempt status of co-ops as not-for-profits, but did not include several energy tax provisions. The final bill limits the ability of businesses to deduct interest payments
BEC Board Book | January 9, 2018 | Page 25
on their taxes, but preserves the full interest deductibility for taxable G&T co-ops. The bill eliminates the use of Clean Renewable Energy Bonds beginning in January, but retains the wind production tax credit at current levels.
The bill does not renew the tax provisions for geothermal heat systems, nor does it modify the existing tax credits for new nuclear power plants or carbon capture utilization and storage projects. However, Senate Finance Committee Republicans introduced an energy tax bill (S. 2126) to address those three electric co-op priorities. NRECA will continue to advocate for Congress to pass this legislation early in 2018.
The tax reform law will impact how employers manage payroll withholdings. The IRS will provide guidance in January and likely give employers time to comply with new individual income tax withholding.
Solar Tariffs In a 400 page report, the U.S. International Trade Coimmission (ITC) has sent President Trump three proposed trade duties aimed at protecting domestic solar panel manufacturers. The White House must determine by January 26 whether to adopt one of ITC’s remedies, devise an alternative, or do nothing. The ITC trio of recommendations varies, although all would remain in place for four years. The highest tariff put forward would add roughly 6 cents per watt on imported solar cells and 10-15 cents per watt on solar modules, declining over four years.
NISC NISC’s Board of Directors unanimously authorized the retirement of 30% of the organizations patronage capital. BEC will be receiving their patronage capital retirement check in the first quarter of 2018. Following is a breakdown of BEC’s status:
Beginning Balance: $25,108.86 2017 Allocation: $6,959.33 Ending Balance as of 12/31/17: $32,068.19
CFC The CFC Board of Directors has ratified the withdrawal of Southern Montana Electric G&T, Inc. from Class B membership in CFC. In connection with the withdrawal from CFC, BEC has received a check in the amount of $175.21 which represents a portion of its membership fee paid by SME G&T, that it has requested be refunded to its member, BEC.
Strategic Vendor Relationships Kevin Owens, Eric Elton and Markus Urbanik met with Border States on December 12 to complete discussions with potential vendors who have the potential to supply material to Beartooth Electric over the course of a budget year. BEC has previously met with Anixter and RESCO to discuss the benefits of aligning business interests to provide the greatest level of cost management, service and value to the utility. BEC is currently under a strategic business alliance with Anixter that expires April 1, 2018. BEC
BEC Board Book | January 9, 2018 | Page 26
will make a decision in the first quarter of 2018 as to whom material purchases will be made going forward.
Federated Rural Electric Insurance Exchange Kevin Owens met with David Reher, Account Executive for Federated this month to review BEC’c overall insurance coverage. BEC’s past record on insurance claims and lost time accidents was viewed very favorable. David offered up an additional coverage for BEC’s consideration; Capital Credit Litigation. Her also suggested that the Board should consider adding a Policy to accommodate Arbitration and Mediation as a means to resolve Litigation. Both of these issues have been brought forward to General Counsel for further discussion.
CFC Eric Anderson met with Kevin Owens to conduct an annual review of BEC operations and financials. Owens also briefed him on the 2018-2022 Work Plan and recent financial model forecasts. Eric has apparently done a lot of past work with BEC regarding financial planning. Based upon our discussion, Eric was extremely impressed with the level of effort that has been undertaken by the Board to get BEC’s financial house in order. Eric conveyed a message from CFC to all Cooperatives that they needed to be focused and reporting the Distribution Equity, absent any equity on their books being transferred to them from their G&T power supplier. This message did not apply to BEC because of our current load following contract with Morgan Stanley.
NITS • A new Network Integration Transmission Service Agreement (NITS) between Northwestern Energy
and BEC was filed with FERC on December 27, 2018. WECC reliability Standard BAL-002-WECC-2became effective on October 1, 2014. This standard requires Contingency Reserves to be 3% ofgeneration and 3% of load.
• Morgan Stanley is providing Contingency Reserves for 3% of load under their current load-following power contract.
• Once again, BEC reached out to Northwestern Energy to provide Contingency Reserves for 3% of generation; i.e. .54 MW. Northwestern has gone to the market to procure this service from a third-party for the period March 1, 2018 to March 1, 2019. For the upcoming year, Seattle City Light will be providing the required 3% Contingency Reserve for generation to Beartooth through Northwestern Energy. There is no markup for this service provided by Northwestern. This year’s NITS Agreement is approximately 20% less than the previous year’s NITS.
BEC Board Book | January 9, 2018 | Page 27
BEC Communications Board Report January 9, 2018
1. January Rural Montana (content due January 11)• Kevin Owens: RFP• Kaaren Robbins: Feature: Generators, Generator Safety, BEC Members with Generators List, 2018 Budget
Approval, Energy Efficiency, Calendar
2. Event: BEC’s Carnegie Library Christmas Tree Lighting Ceremony (12/21/2017)• Planned Tree trimming/light string installation• Designed sign: Beartooth Electric Cooperative logo, “Let all your days be merry and bright “ message, date
December 21, 2017• Arranged for Santa• Coordinated ribbon cutting with the RL Chamber• Arranged Hot cocoa and carolling• Arranged press coverage• This event generated incredible goodwill and publicity across print, personal contacts and social media.
3. 2018 Washington D.C. Youth Tour Program• Closed: December 15.• One candidate to be selected today to represent BEC.
4. 2018 BEC $1,000 Scholarship• Deadline: January 26
5. 2018 MECA Memorial Scholarship• Deadline: January 26
6. Operation Round Up• Operation Round Up Contributions $92.34, billed 12/07/2017 for a balance of $1,361.98. Total number of accounts
176 and customers 163. I have received three applications for Operation Round Up and the ORUboard approved two and denied one at their last meeting. Richard Sederburg has resigned as President ofthe ORU Board to retire. The 2018 Board is as follows: Meg Hatch-President, Judy Strobbe-Vice President,Karen Reiner-Secretary, Janet Luloff will be joining the group as Member-at-large.
7. LISD/LIDDLISC/LIDD Discounted Accounts for November billed 12/06/2017. WY: $20.20 and MT: $146.70. TOTAL =$167.10. Total number of accounts is 24. To meet the MCA Universal system benefits program requirement of 2.4% of retail sales, a $200 credit will be applied to each LISC/LIDD program member’s account.
BEC Board Book | January 9, 2018 | Page 28
8. News Releases• “Beartooth Electric Invites All to the Carnegie Library Christmas Tree Lighting Ceremony,” distributed December 20,
2017• ”Beartooth Electric Cooperative Transparency,” distributed December 14, 2017• “Do rural electric cooperatives pay taxes?” distributed December 8, 2017• “Beartooth Electric Cooperative Scholarship Opportunities Open for Application,” distributed December 1, 2017
9. Emails to Member List• Post-Board meeting email sent December 9, 2017• Pre-Board meeting email sent January 6, 2018
10. Website Updates• Updated History• Update Employee Directory• Update Next Board Meeting• 2018 Washington D.C. Youth Tour (Closed)• 2018 MECA Memorial Scholarship• 2018 Beartooth Electric Scholarship• RM Newsletter January• Billing Insert January• January Board Book• October Financials• Calendar• RFP Page (in development)• News/Events “Beartooth Electric Invites All to the Carnegie Library Christmas Tree Lighting Ceremony.”• News/Events ”Beartooth Electric Cooperative Transparency.”• News/Events “Do rural electric cooperatives pay taxes?”• News/Events “Beartooth Electric Cooperative Scholarship Opportunities Open for Application.”
September 100.37 29 19.93 4 120.30 33 1,889.57 329
October 111.34 29 17.04 4 128.38 33 2,017.95 362
November 146.90 28 20.20 4 167.10 32 2,185.05 394
December 0.00 - 2,185.05 394
Note: One MT member from November is a pending disconnect, property sold
YTD 1,767.98 339 417.07 55 2,185.05 394
0.00 - 0.00 - 0.00 - 0.00
1,767.98 417.07 2,185.05
Rate schedule 14 for MT
Rate schedule 15 for WY
Estimate Dec 215.00
YTD + Estimated Dec 2,400.05
Annual Goal 7,200.00
Short -4,799.95
Divided by 24 current Dec accounts 200.00
24 accounts @ $200 credit 4,800.00
12/7/17, If our annual goal is $7,200, I would recommend we do the $160 credit to the 31 accounts to achieve the goal. Brad
Note: In 2014, 42 accounts were credited with $50 each to achieve the annual goal
MT WY Monthly YTD
C:\Users\bradp\Documents\Low Income Assistance.xlsx
BEC Board Book | January 9, 2018 | Page 30
BEC Board Book | January 9, 2018 | Page 31
BEC Board Book | January 9, 2018 | Page 32
BOARD REPORT By: Eric Elton, Line Superintendent
January 9, 2018
CONSTRUCTION, OPERATIONS & MAINTENANCE
• Red Lodge crew is changing out poles in the Roberts area. (We will start polechange out on the Absarokee sub next).
• Columbus crew has finished the pole inspections for Absarokee Sub. (Wehave a total of 3,547 poles on this substation and 100 are marked for changeout in 2018).
• I lost the bet, we didn’t get the Pinecrest Tie line done in 2017. Absenteeowners have agreed to sign easements and then left town for the Holidayswithout getting easements signed and notarized. We will be ready to getgoing on this project when the weather breaks this spring.
• A 24KW Solar Array project which started in September 2017 hasencountered numerous complications due to the project’s lack ofengineering and design resulting in countless BEC crew hours totroubleshoot and the enlistment of HDR to resolve the overcurrent anddisconnection of panels due to improperly sized conductors from the arrayto the service.
• We spent a day with Big Horn Electric looking at their TWACS meteringsystem. We were surprised at how simple the equipment was to install.
• There was a hit-n-run on our line east of Columbus and broke two poles off.I reported the damage to the sheriff’s department, still no luck on who itwas.
• We installed 4 new services in the month of November.• There was a total of 17 outages system wide in the month of November.
(Please see attached breakdown sheet).• We had 578 individual consumers out of power at some point in the month
of November having duration of 1795 minutes. (Please see attachedbreakdown sheet).
BEC Board Book | January 9, 2018 | Page 33
EDUCATION, SAFETY & LOSS
• We held a MECA safety meeting on November 29. (Please see attachedsheet)
• The next MECA safety meeting is scheduled for January 4th.• There are no Lost Time Accidents to report for the month of November.
TRUCK, TOOLS & EQUIPMENT
• The backhoe trailer had a problem with the tilting mechanism and had tobe replaced. (Not sure on price yet but I’m guessing around 3500 dollars,it’s still at the machine shop).
11/29/17 90 5 unknown Re-fused cutout Reed Point OH 450
11/30/17 180 1 500 Replaced bad transformer Belfry OH 180
11/30/17 45 1 690 Turkeys flew into line Columbus OH 45
TOTALS 1795 578 46095
RUS CODE KEY November YTD Substations
000 Transmission 0 17 4 Belfry
090 Weather 8 57 6 Columbus
110 Planned Outage 2 17 1 Edg/From
300 Equipment 0 53 4 Nye
490 Trees 1 19 1 Red Lodge
500 Transformer 1 6 1 Reed Point
690 Animals 1 44
790 Public Caused 0 12
Unknown 3 35
BEC Board Book | January 9, 2018 | Page 35
BEAR TOOTH ELECTRIC COOPERATIVE
RED LODGE, MONTANA Kevin Owens, Manager
11-29-17
1. TOPICS. POLE TOP/BUCKET RESCUE, Electrical burns
2. VIDEO AIDS USED: Power Point Presentation
3. REPORT OF ACCIDENTS: We discussed accidents and near accidents thathave occurred within the state and industry.
4. RECOMMENDATIONS AND Comments. For the first topic Chris Benton hada presentation on proper first aid procedures for life treating bleedingsituations. We then went to the yards and the men demonstrated their ability to perform pole top and bucket rescue procedures. For our last topic we returned to the office and reviewed the effects and care concerns for electrical burns and contact injuries.
# of Class Hours: 4 # of Field Hours:
# of Personnel Present: 10 # of guests present:
Thanks for your help and involvement.
Gordon McConkey MECA SL/C
BEC Board Book | January 9, 2018 | Page 36
EMPLOYEE NAME ATTENDANCE KEVIN OWENS
LINDA DUKART
TRAVIS BARKER X
JAKE WRIGHT X
JIM AVENT X
JAMES PIHL X
SAM WALKOWIAK X CONNI TEACHOUT
ERIC ELTON X
MARTY TOMLIN
MARKUS URBANIK X
MIKE FERGUSON X
GUS BEHRENT X
BILL COLGROVE
KAAREN ROBINS
LEE HAUGE X
BEC Board Book | January 9, 2018 | Page 37
BEC Board Book | January 9, 2018 | Page 38
Delivery Point Analysis
Final November 2017 Days in month 30
Load Factor Line Loss
Demand Energy Demand Energy Purchased Demand Energy Energy Energy Demand Energy Transmission Less
kW kWh kW kWh % kWh kWh kW kWh Losses Trans Losses Line Loss
2 Months Ago 3 Months Ago Last Year Last Month Last Month
Less Trans
Line Loss Line Loss Line Loss Line Loss Line Loss
Sept 2017 August 2017 Nov 2016 Oct 2017 Oct 2017
Absarokee 12.8% 13.1% 13.0% 6.3% 10.8%
Belfry 16.9% 12.3% 15.4% 14.1% 18.2%
Columbus 15.7% 15.1% 14.6% 11.1% 14.5%
E. Rosebud 17.0% 18.3% 18.3% 14.6% 18.7%
Edgar 15.2% 12.5% 14.6% 10.8% 15.1%
Luther 11.7% 14.5% 11.1% 8.7% 13.1%
Nye 12.5% 12.9% 19.7% 10.9% 15.2%
Red Lodge 12.5% 12.0% 11.6% 7.8% 12.2%
Reed Point 13.5% 15.0% 13.8% 9.4% 13.7%
Roberts 12.0% 12.6% 13.7% 10.4% 14.7%
14.0% 13.2% 14.1% 9.9% 14.1%
Comparisons
Load Factor = It can be derived from the load profile of the specific device or system of devices. Its value is always less than one because maximum demand is always more than average demand. A high load factor means power
usage is relatively constant. Low load factor shows that occasionally a high demand is set. To service that peak, capacity is sitting idle for long periods, thereby imposing higher costs on the system. Electrical rates are designed so
that customers with high load factor are charged less overall per kWh. This process along with others is called load balancing or peak shaving.
In the normal course of business, estate retirements are approved by the Board of Trustees as part of the CONSENT AGENDA section of the meeting. We were approached by a customer to please expedite the process. The next review/approval by the Board of Trustees would have been the January 30, 2018 meeting and the estate retirement check would be issued shortly thereafter. This customer explained to us that they were in a current financial hardship. The General Manager conferred with the Board President, Secretary and Legal Counsel and the consensus was to proceed and release the estate retirement payment (December 15, 2017) to the member prior to its formal approval by the Board of Trustees with ratification to take place at the January 9th Board Meeting.
CAPITAL CREDITS (Estate Retirement)
Capital Credit Discounted Retained by Allocated Refund to Cooperative
Member
Member #80604 $1,263.55 $1,105.10 $158.45
Action needed: Ratification of the above transaction
BEC Board Book | January 9, 2018 | Page 41
2017 System Goal Accomplishment
70% of 2017 Goals were Accomplished
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD %
ORU started year w/122BEC Board Book | January 9, 2018 | Page 42
NRECA 2018 Annual and Regional Meeting Voting Delegate Certification and Credentialing Process
NRECA VOTING DELEGATE CERTIFICATION NRECA Bylaws Article V, Section 2(B) and 2(C) provide that "…each voting member shall be entitled to select, either by vote of its membership or its board of directors, one of its members, directors, or employees to act as the voting delegate, and one such person to act as the alternate delegate, at the meeting…each voting delegate must submit a certification signed by the director who is president of the member or is chair of the member’s board of directors, and by the director who is secretary of the member, stating that such delegate is duly authorized to cast the vote of the member.”
Please indicate below who will be your delegate at the 2018 NRECA Annual Meeting. Only those delegates who have been properly documented as authorized by their cooperatives shall be credentialed to act during the NRECA Annual and Regional Meeting Business Session. This form must be dated, signed by the board President and board Secretary (board of directors/trustees), and returned to NRECA by January 5, 2018. You will have an opportunity to select new delegates for the 2018 Regional Meetings.
The following are hereby certified as official voting delegate and alternate and are duly authorized to cast the vote of this member.
Signed Board President (of Member System) DATE Board Secretary (of Member System) DATE
If you have any questions concerning the above procedure, please contact the Membership Department at (703) 907-5868.
(The Alternate is certified to act only in the absence of the Delegate)
Signed
2018 Voting Delegate
2018 Alternate Delegate
Name Title
Name Title
Please fill out the form below. Indicate who will be your Voting Delegate for 2018 and an Alternate in case the Delegate is unable to attend the Business Meeting. You will have an opportunity to select a new delegate for the 2018 Regional Meetings. Please return this form to NRECA by email: [email protected] or by fax: (703) 907-5512
1 Please return signed, dated and completed formto [email protected] by January 5th, 2018.
2 Delegates must be registered for the meeting in advance and should pick up their badge before checking in as a delegate.
3 At the meeting the delegate must then proceed tothe Voting Delegate registration Desk which will be located near the general NRECA Meeting Registration area.
4 At the NRECA Voting Delegate Registration Desk, the delegate’s certification information will be reviewed and the delegate will receive the official delegate ribbon, which will be attached to the name badge, as well as the assigned credential card for the meeting. 5 The delegate must bring the credential card and ribbonto the NRECA Business Meeting and present it in order to vote. Each voting member is permitted one vote on each of the resolutions and other business properly brought before the Annual and Regional Business Sessions. No individual may represent more than one voting member system and proxy voting is prohibited.
PARENT/GUARDIAN MUST BE A MEMBER OF BEARTOOTH ELECTRIC COOPERATIVE TO APPLY
Please complete this application and return with your essay to Beartooth Electric Cooperative by December 15, 2017.
APPLICANT NAME [l,ane �fl\DU>lV'.\BEARTOOTH ELECTRICACCOUNTNUMBER_] ........ 7 .... 3_l_,,_a .... o _________________ _
PARENT/GUARDIAN NAME �Y\,) ( £ a V)o\ 'lt ,\f\Y) \ £e V , )aca�n .. MAILING ADDREss ___ 7_� .............. L ...... o,_.� ...... e. ...... x ...... j ___ L,=..a=-'-Y\ ..... <.. ___ B_e\_£:v'i ____ �_T __ ..... S ..... q....,l)_0 ........... 'o...__ __
Add,.. city ttate zip
TELEPHONE (40lD�L\-2,_\p -4D(?:J\ E-MAIL ADDRESS
SCHOOL NAME �6\ \...Mr� ,e. \1":\°)Y\ $( ,\/lQ{)\
scHooL MAILINGAooRess �DO t \J\um'OevS /WePERSONAL STATEMENT: DESCRIBE IN A FEW SENTENCES WHY YOU SHOULD BE SELECTED AS THE COOPERATIVE'S YOUTH TOUR REPRESENTATIVE. (Your personal statement will be consldeAKI In the judging).
LIST MEMBERS OF YOUR FAMILY (PARENTS, GUARDIANS, SIBLINGS).
I authorize Beartooth Electric Coopemlve. Inc. to use the above information along 'Mlh photos of me for publicity purposes of the sponsoringMontana Electric Cooperatives' Association.
APPLICATION AND ESSAY DEADLINE: DECEMBER 15, 2017
Beartoodl Electrlc Cooperative - PO Box 1110 -1306 N Broadway Ave - Red Lodge, MT 59068 Questions? Contact: Kaaran Robbins 406-446-2310 or [email protected]
ATE
12/5/17
BEC Board Book | January 9, 2018 | Page 44
The Future is in Our Hands
By Katie Jacobsen
Why is it so challenging to stay in contact with students and children? I think that many
students need consistent and interactive activities and updates in order to stay “in the loop.”
believe that in any good relationship there must be consistent communication.There are many
ways that I believe will work and that will encourage a positive response from high school
students. A few ideas that I have are, a representative coming to the different schools, improving
social media outreach and gear posts more toward youth, and finally, monthly newsletters geared
towards youth.
If the rest of high school students and children are like me, then they don’t know a lot
about what goes into helping our power work. Coming into schools and becoming engaged in
class activities and curriculum could provide the publicity needed in order to engage kids, like
me. Representatives can come into elementary and middle school classrooms and present what
the local electrical cooperation is, what it does, and the hard work that goes into electricity. They
could create interactive activities and engaging presentations by having parents who are
employed with the Beartooth Electric Cooperative visit classes. In my experience when
somebody that I know is leading an activity I am more engaged in what is being presented. They
could present on various topics. Such as, who the Cooperative is, what the coop does, and why
they do what they do. In the high school classroom, leaders within the Cooperative could visit
classes anywhere from basic classes such as Earth Science and computer sciences to advanced
classes, like Chemistry and Calculus. I think that engaging in lessons that kids are actually
learning about will create a fun and engaging atmosphere for learning. If information about the
Electrical Cooperative is properly presented and taught, then students at all levels will be able to
BEC Board Book | January 9, 2018 | Page 45
reap the benefits of that knowledge. Engaging within schools and local classrooms can lead to a
wide range of youth who will learn and absorb information about the Electric Cooperative.
Since it is 2017 and almost every child has a cellular device, social media is a very
impactful tool that, if properly used, can be a wonderful tool for spreading knowledge and
information. Creating fun, informational, and interactive videos and sharing them on social
media websites could attract the attention of youth and kids surfing social media. Personally,
when looking through my Instagram or Facebook feed, I rarely stop and look at photos. I almost
always will watch a video if it looks intriguing. After looking at the Beartooth Electric
Cooperative Inc. facebook page, I can see that there are not many of videos that have been made
that are informative. There are also not many engaging and informative photos. I know that it
sounds silly, but in many companies, there is a full-time media support individual or team for a
company. They manage all publicity and media for the company. Having someone who creates
and directs creative posts for the company could really reach many teens on the web. Social
media is an extremely valuable tool if it is used properly. If the Beartooth Electric Cooperative
could take advantage of this modern tool, kids everywhere would be able to have access to
information about the Cooperative.
One way to reach children could be mailing or emailing monthly newsletters, which
contain interactive and challenging competitions. Creating an interactive monthly newsletter
could be extremely useful in trying to engage the youth. For younger kids, you could include fun
informative coloring pages. An incentive for the kids to actually do the coloring pages could be
displaying a few in the next month’s newsletter. For older students, there could be photo
competitions, art competitions, and writing competitions. An incentive for older kids can be gift
cards to a gas station, or any gift card to anywhere. Another interesting prize could be
BEC Board Book | January 9, 2018 | Page 46
scholarship money or maybe even a job shadow. I think that having an incentive encourages
youth to challenge themselves.
In short, I believe that there are many ways that the Beartooth Electric Cooperative can
connect with the youth within the various communities. Through developing an exciting and
engaging newsletter, bringing a representative into classrooms, and using social media to target
and improve the connection between the youth and the Cooperative. There is always room for
improvement these creative techniques; improvement is not far off.
BEC Board Book | January 9, 2018 | Page 47
At the November board meeting Dick Nolan confirmed that his statement in the October minutes meant that in his opinion all BEC communications were the responsibility of management/operations. My opinion, based on fiduciary and ethical requirements and our stated commitments to members, is that the board has a responsibility to communicate directly with members as well as set strategy and provide oversight for BEC communications. The duty to honestly communicate material information ends with the board, not operations.
Having operations responsible for the communications plan, which has been reviewed with the communications committee and board and represents the bulk of BEC communications, is a good path. Having the board and management share responsibilities as outlined in BEC bylaws and policies is necessary. I am concerned about statements made at the board meeting advocating for the board to defer all communications to operations. At the last communications committee meeting there was general consensus to include additional operations information in the monthly Rural Montana BEC insert and reduce the length and frequency of the board contributions as appropriate, based on developing issues and board and committee activities. There was no indication of a proposal to discontinue direct board communications or reduce oversight; either of those actions would violate requirements in our bylaws and policies.
The board is accountable to members and must report directly to them. That means that, in addition to management’s planned increase in communications related to operations, members are entitled to communications from the board. The board is responsible for the strategy and content of those communications.
The board’s five-year history of direct conversation with members has worked. Reports from the annual meeting show that members place a high value on how they have been well informed by the board. There is no justification for abandoning that process as we deliver on a plan to increase communications. BEC bylaws were amended with a primary focus on member rights, including the right to information. The Board is responsible for protecting those rights. Policies have been updated to clearly state how the board and management should address member involvement and communications.
Primary fiduciary duties are care (due diligence) and loyalty to the organization. Care includes understanding the legal framework that governs us, including our bylaws and policies. Loyalty to the co-op requires us to support our recently defined mission/vision/pledge within that framework. Loyalty to our commitment to members requires open and active board communication.
Below is a list of bylaw and policy provisions that relate to board and staff responsibilities to communicate with members and enlist member involvement. My synopsis comment is at the end of each list in italics.
BEC BOARD FIDUCIARY COMMUNICATION RESPONSIBILITIESArleen Boyd
BEC Board Book | January 9, 2018 | Page 48
BEC AMENDED BYLAWS Article IV Board Trustees Section I A The business and affairs of the Cooperative shall be managed by a Board of seven (7) Trustees, which shall exercise all of the powers of the Cooperative required bylaw, by the Articles of Incorporation, by these Bylaws, or conferred upon the boardby these bylaws.Section I CThe Board shall ensure that the Cooperative members have access to informationrelevant to the business of the Cooperative with the exception of information that isdeemed proprietary or confidential by law, contract, policy, and these Bylaws.Article VI Section 8 ManagerThe board may appoint a Manager who shall perform such duties and exercise suchauthority as the Board may assign.
The board is responsible – a manager may be hired and assigned duties. Fiduciary responsibility is called out, in the context of financial transactions, in Article X.
COOPERATIVE POLICIES
Policy 202 Functions of the Board of Trustees Section 2.1 Objective: To explain the functions and responsibilities delegated to the Board of Trustees by the membership Section 3.2.1 Conduct meetings to inform the membership of BEC news and information, using such meetings to obtain their understanding and acceptance of BEC’s objectives, goals, policies, plans and programs. Section 3.2.6 Provide information and obtain understanding and acceptance of BEC’s objectives, viewpoints, policies, plans and programs Section 3.2.7 Keep the membership informed of problems faced by BEC which require their support and involve them in the planning and implementation of programs which affect them. Section 4.1 The Board of Trustees and the General Manager shall ensure that the provisions of this policy are followed.
Policy 202 lists requirements for the board to address legal responsibilities, trusteeship, planning and budgeting, providing for operating requirements and establishing controls.
BEC Board Book | January 9, 2018 | Page 49
Trustee Policy 209 Section 3.1 This Code of Ethics is intended to be a statement of how the board will conduct itself on a daily basis. It identifies the Board’s values and the procedures that will be followed to ensure that these values are upheld. Trustees are expected to know and understand the standards and expectations that are contained herein. The Code of Ethics provides guidance to Trustees in how they are expected to carry out their duties. Because the Code cannot address every possible situation, Trustees are expected to consult with the Board president if in doubt about the standards that apply in any situation. Section 3.2 The BEC Board believes that ethical standards are achieved not just through publication and dissemination of this document, but through open, objective and ongoing discussion about the ethical issues related to the business and activities of BEC. Section 7 Member Communications Section 7.1 In communicating with members BEC shall: 7.1.1 Provide all information that is not deemed legally confidential 7.1.2 Provide information that is accurate and understandable 7.2.3 Not knowingly make false or misleading statements Section 13 The Board President shall ensure that the provisions of this policy are followed.
Policy 209 specifically addresses board responsibilities and ethical conduct and makes the board president solely responsible for seeing that it is followed. The requirements for member communications in Section 7 are board responsibilities.
Policy 404 Member Relations Communications Section 3: It is the policy of BEC to: 3.6. Survey members regularly to identify attitudes, needs and views about BEC. 3.7. Encourage members to join committees and to actively participate in BEC. Section 4 It is the responsibility of the Board to: 4.1.1. Adopt a process to develop and approve annually a strategic plan for BEC that provides a proactive, comprehensive communications plan that includes: 4.1.1.1. Objectives and methods for communicating BEC's strategy and business performance effectively to members, employees and other individuals and organizations with an interest in BEC. 4.1.1.2. Procedures to receive feedback from members and other stakeholders of BEC. 4.1.1.3. Processes and criteria for measuring the accuracy and effectiveness of all BEC communications. 4.1.1.4. Plan for and promote trustee participation in communications programs.
Policy 404 holds the board responsible for a process to develop and approve a strategic, comprehensive communications plan that features trustee participation and encourages member involvement. The manager supports and manages a communications effort (section 4.2)
/4 - 2017 requirement from NWC (3% of estimated annual transmission peak)
/5 - Avg of current Sch 5 ($8.50) and Sch 6 ($7.35) rates
BEC Board Book | January 9, 2018 | Page 77
Payroll
Full-time employees are as follows:
Name Position Kevin OwensEric Elton Jim Avent Travis Barker Guy Behrent Bill Colgrove Linda Dukart Mike FergusonLee Hauge James PihlBrad ProphetKaaren RobbinsConnie TeachoutMarty Tomlin Markus Urbanik Sam Walkowiak Jake Wright TBD
General ManagerLine SuperintendentMeter Tech/Journeyman LinemanJourneyman LinemanLine Sub-ForemanLine Foreman Customer Service RepresentativeJourneyman LinemanLine Sub-Foreman Journeyman LinemanAccountantMember Services/Communications and Marketing Billing Clerk/CashierStaking TechnicianWarehousemanLine ForemanJourneyman LinemanTemporary - Work Order Clerk
BEC Board Book | January 9, 2018 | Page 78
BEARTOOTH ELECTRIC COOPERATIVE, INC. Revision: 78151
BUDGETCFC BUDGET PRO - PAYROLL/LABOR
12/07/2017 2:50:10 pm Page: 1
Draft: 2018 BUDGETSummary
FebruaryJanuary March April May June July August September October November DecemberDescription Total
Safe 1. No lost-time accidents during the year.2. Current year Workers’ Compensation experience modification rate shall not increase more
than 5%.3. No verifiable member complaints regarding safety issues that could result in liability to the
Cooperative.
Reliable 1. System Average Interruption Duration Index (SAIDI) less than the average for the past
three-year period*.2. System Average Interruption Frequency Index (SAIFI) less than the average for the past
three-year period*.3. Complete 100% of the system maintenance plan.
(* excludes outages over 12 hours in duration)
Efficient 1. Total year-end controllable expenses will be within +/-5% of budget.2. Capital projects are completed on time and under budget.3. Overtime hours will be less than the average of the past three years.
Long-term Strategic Company Goals
Reasonably Priced 1. No overall, membership-wide rate increase (no increase in revenue requirements) over the
next 5 years (2018 – 2022).2. BEC rates for the average monthly consumption are within X% of a defined peer group.3. BEC residential rates at 1,000 kWh hours per month will be equal to Northwestern Energy
by 12/31/2023.4. Meet annual TIER, DSC and equity targets according to long-term financial plan.